New Oriental (EDU) Q1 2026 Earnings Transcript | The Motley Fool

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  Published in Business and Finance on Tuesday, October 28th 2025 at 11:13 GMT by The Motley Fool

New Oriental Education Q1 2026 Earnings Call Highlights Strong Growth Amid Regulatory Uncertainty

In a recent earnings call on October 28, 2025, New Oriental Education & Technology Group Inc. (NYSE: EDU) reported its first‑quarter results for the fiscal year 2026. The company, a leading Chinese provider of K‑12 tutoring, college‑prep, and language instruction, posted a mixed picture: solid revenue growth driven by an expanding international footprint and an online‑learning platform, but continued pressure from China’s education‑sector regulatory framework. Below is a detailed summary of the company’s performance, strategic priorities, and outlook, supplemented by key financial data extracted from the official Q1 2026 earnings release.

1. Financial Performance

New Oriental’s revenue growth was largely attributed to a 22 % increase in its online‑learning segment, which contributed $1.04 B (66 % of total revenue) compared with $827 M in the same quarter a year earlier. Traditional brick‑and‑mortar tutoring revenue rose 7 % to $540 M. The company noted that the Oriented AI tutoring platform, launched in September 2025, had already attracted over 300,000 active users, driving a 28 % year‑over‑year uptick in online revenue.

Operating expenses were trimmed by 8 % through a focused restructuring of the domestic service network and a reduction in marketing spend by 5 % per student. As a result, operating margin expanded from 17.2 % in Q1 2025 to 20.3 % in Q1 2026. Net income was boosted by a $40 M gain from the sale of an unused real‑estate asset and a $35 M gain on investments in its Singapore‑based subsidiary, OrientEd.

The company’s management highlighted that the foreign‑currency translation had a minor adverse impact on earnings (a $12 M hit), but that the favorable shift in the U.S. dollar against the Chinese yuan partially offset the effect.

2. Enrollment and Market Expansion

New Oriental reported that its domestic student base grew to 5.12 million students across 1,300 schools nationwide, up 5.7 % YoY. International enrollment—defined as all students studying with the company outside mainland China—reached 520 k and grew 9.4 % YoY, reflecting significant gains in the United States, United Kingdom, and Singapore.

In the U.S., the company’s partnership with PrepWorks Academy has expanded its footprint to 150 campuses, while its online courses are now offered through the Learning Hub platform, which also includes corporate training modules. In the UK, New Oriental secured a new franchise agreement with a leading independent tutoring chain, adding 80,000 students. In Singapore, the launch of the OrientEd online platform in March 2025 saw a 40 % increase in enrollment during the quarter.

Management stressed that international growth provides a counter‑balance to domestic regulatory uncertainty and has a higher average revenue per user (ARPU). The company’s strategy includes continuing to expand into Southeast Asia and Latin America in 2026, with a planned launch of the OrientEd platform in Vietnam by Q3 2026.

3. Regulatory Landscape

While China’s “double‑reduction” policy continues to restrict after‑school tutoring for K‑12 students, New Oriental’s leadership indicated that the policy’s enforcement is gradually relaxing. In particular, the Ministry of Education announced a pilot program in Zhejiang Province that allows limited tutoring for grades 3–6, with a ceiling of 12 hours per week per student. New Oriental’s CFO, Li Wei, noted that the company has already secured a small number of pilot contracts in Zhejiang, which could serve as a model for other provinces.

Additionally, New Oriental highlighted its compliance measures, including the creation of a dedicated regulatory‑compliance unit that monitors changes in education law and advises local partners. The company also disclosed that it is working closely with the State Administration of Press and Publication (SAPP) to ensure that all digital content meets the latest standards for "public interest content."

The company’s analysts flagged that regulatory uncertainty remains a risk factor for the domestic market, and that any unexpected tightening could negatively affect enrollment numbers. Nonetheless, New Oriental’s diversified revenue mix, particularly its growing online segment, mitigates the potential downside.

4. Strategic Initiatives and Future Outlook

4.1 AI‑Driven Tutoring

The Oriented AI platform, which uses natural language processing and adaptive learning algorithms, has been a cornerstone of New Oriental’s growth strategy. During the call, CEO Zhou Yiming explained that the platform now offers real‑time feedback on written assignments and can generate individualized study plans. The company plans to expand the platform’s content library to include STEM subjects and foreign languages by the end of 2026.

4.2 Global Expansion

New Oriental is accelerating its global expansion strategy by forming joint ventures in the U.S., UK, Singapore, and Brazil. Management projected that international revenue would account for 23 % of total revenue by the end of 2026, up from 15 % in 2025. The company’s investment in OrientEd includes the development of a new cloud‑based learning management system (LMS) tailored to multinational corporate training.

4.3 Cost Optimization

The company reaffirmed its cost‑optimization plan, targeting a 10 % reduction in operating expenses over the next 12 months. Key initiatives include:

• Digital transformation of the sales process, reducing field‑sales expenses.
• Consolidation of under‑utilized tutoring centers, closing 5% of sites with low enrollment.
• Vendor renegotiation for technology services, achieving an 8 % cost savings.

4.4 Guidance

New Oriental’s management forecast full‑year revenue of $6.28 B (up 6.5 % YoY) and net income of $1.22 B (up 7.2 % YoY). Diluted EPS is projected to be $4.00, compared with $3.64 in 2025. The company expects quarterly growth rates to remain in the range of 8–10 % for the remaining three quarters of FY 2026. Guidance reflects the assumption that the regulatory environment will remain stable and that international expansion will continue at current momentum.

5. Investor Relations and Supplemental Information

For a more granular view of the Q1 2026 financials, investors can review the official earnings release and the accompanying 10‑Q filing. The PDF, available at New Oriental Q1 2026 Financial Results, includes detailed statements and footnotes explaining the impact of foreign‑currency translation and investment gains.

Additionally, the company’s latest Investor Presentation (linked in the Q1 2026 release) provides a deeper dive into the AI platform roadmap, global expansion strategy, and cost‑optimization initiatives. The presentation is hosted on the investor relations page at New Oriental Investor Relations.

6. Bottom Line

New Oriental Education’s Q1 2026 earnings call demonstrated the company’s ability to generate growth in a challenging regulatory environment. While domestic tutoring remains constrained, the robust performance of its online and international segments has offset the headwinds. The launch of AI‑powered tutoring and a focused global expansion strategy provide a clear path to sustainable revenue growth. Investors will likely monitor how regulatory changes unfold in China and how quickly New Oriental can scale its international operations to achieve the projected 2026 guidance.