Tian Hou: Thank you. Thank you.
Stephen Yang: Thank you, Tian.
Tian Hou: Excellent.
Operator: Thank you, Tian. [Operator Instructions] Our next question comes from Candice Chen from Daiwa. Please ask your question, Candice.
Candice Chen: Great. Hi, Sisi and Stephen, congratulations on a very strong quarter and also the revenue guidance. My question is on the margins for longer term. So I think you just mentioned that for the new education businesses that actually we are looking at around 19% to 20% operating margin, which is pretty impressive as compared to what you mentioned in the previous quarters. And I just wondering — I just wonder for — in the longer term that we are talking about like two to three years down the road, what should we expect for this new education business for — in terms of their operating margins? And also for the overseas test prep business, what kind of margin should we be expecting, given that very strong demand out of the revenue here? Thank you.
Stephen Yang: Yes, we — yes, as you know, we started the new education business two years ago. And in this quarter, the margin of this business is roughly 19%. And going forward, I think, the margin will be over 20%. So that means we expand the margin of this business. We will expand the margin of this business in the second-half of this year. And even in the new year, fiscal year ’25 we expect the margin of the education business overall will be expanded, because of the — yes, as I said, because of the lower fixed cost and the higher utilization of the learning centers and the cost control. I think both the existing business, such as the overseas related business and the college business and the new business, new initiatives will expand the margin.
So going forward, even in the second half of this fiscal year and the fiscal year ’25, I think the margin will be expanded, yes. So, yes, and we care more about the top-line growth and the margin expansion. So we believe we will create more value to the shareholders, yes. That’s the bottom-line wise.
Candice Chen: Great. Another question is about our cash. I think we are having almost $5 billion cash right now. So in terms of shareholder returns, what are we going to do with the cash in the following years?
Stephen Yang: Yes. We announced $400 million share buyback program. And so far we finished $194 million. And I think we will buy the share back from the open markets going forward. And this round we choose to buy the share back. And but historically we paid the several times special dividend and did several times share buyback. So going forward next round, maybe we will choose the dividend again and worthy share buyback.
Candice Chen: Okay. Good to hear. Thank you, Stephen.
Stephen Yang: Thank you.
Operator: Thank you, Candice. [Operator Instructions] Our next follow-up question comes from the line of Felix Liu from UBS. Please go ahead, Felix.
Felix Liu: Hi. Good evening, Stephen and Sisi. I have a follow-up question on competition. You mentioned that the supply-demand dynamics of the sector is very strong. So do you see any risk in competition intensifying? Do you see smaller players also ramping up capacity expansions or if not what is happening from graph? Thank you.
Stephen Yang: You know, Felix we have seen a lot of the competitors disappear from the market since two, three years ago. And especially [Technical Difficulty] we are facing less competition. And so I think this is true both for the K-12 business and the overseas-related business, even with the college business. And going forward, I think we expect the competition environment will be stabilized.
Felix Liu: Okay. Got it. Thank you.
Operator: Thank you, Felix. [Operator Instructions] Our next follow-up question comes from the line of Timothy Zhao from Goldman Sachs. Please go ahead, Tim.
Timothy Zhao: Hi, Sisi. Hi, Stephen. Just a follow-up question, I think on the intelligent learning system and devices. I saw the number of active users, I think for the past quarter is actually quite similar to the summer semester. Just wondering if you can share some color in terms of the seasonality of these business lines and what is the, I think, profitability that we are seeing. And how to think about, I think, the Q-on-Q growth, I think, into the third quarter, fourth quarter? That would be very helpful.
Sisi Zhao: Yes. Actually, the intelligent learning devices business are developing also very well. The growth is pretty strong and we’re seeing actually not very seasonal pattern for this business, quite similar with previous tutoring business, especially for middle school students. And this year, the year-over-year increase of user is very high. And also, we have prepared a lot of new devices to cater the needs of customers. The key drivers — growth drivers are new customers and also we’re making efforts on expanding to more subjects for existing customers as well. Because this is a very good product that helping kids to enhance their self-study ability even without our teacher’s instruction, but using the device and also benefiting from our very, very good content differentiating content embedded in the device that kids can also prepare for the academic study and do the process by themselves.
