New Oriental Education & Technology Group Inc. Q1 2027 Earnings Recap

New Oriental shares fell 15.3% after earnings, despite revenue growth exceeding management’s guidance range. The likely concern is pressure on the consolidated margin from East Buy’s rapid growth and larger revenue mix share, which management highlighted as affecting group margins even as individual businesses’ margins expanded.

Key Takeaways

• Revenue rose 23.1% year over year to $1.87 billion; non-GAAP operating income increased 21.2% to $406.8 million.
• Overseas test-prep revenue grew about 8%, overseas study consulting about 7%, and adults and university students 22%.
• New education initiatives grew revenue 25% year over year; non-academic tutoring and the intelligent learning system and device business were each launched in around 60 cities.
• Management said East Buy’s rapid growth increased its share of group revenue and its weight in consolidated operating margin; it described overall margins as stable and cited year-over-year margin expansion in core education and East Buy.
• The company invested $28.2 million in its OMO teaching platform and said its AI-powered learning platform began generating sales within 25 days of launch.