New Oriental Education & Technology Group Inc. (NYSE:EDU) Q2 2024 Earnings Call Transcript

So this is a good solution after the policy change and all the new — the restructuring of the whole company. So we’re confident in the development of this new product. And also the profitability is also currently we’re seeing the margins are similar with our tutoring business like the non-academic tutoring business for — mostly for elementary school students. And also, we’re seeing the potential for this kind of learning device business. The margin potential is also quite strong. We can leverage more of our teacher resources and also we don’t need to spend a lot of cost on the learning center openings. Yeah.

Timothy Zhao: That’s clear. Thank you, Sisi.

Operator: Thank you, Tim. Our next follow-up question comes from the line of Tian Hou from T.H. Capital. Please go ahead, Tian.

Tian Hou: Yes, Sisi and Stephen, just a follow-up question. It’s also related to the seasonality. So just not quite sure what’s the seasonality under the current business structure. So can you share some color?

Stephen Yang: Yes. The seasonality becomes more smooth than many years ago, and but the Q2 is still the low in the season. And so the strongest season is Q1 and then followed by the Q3 and Q4, and then the Q2 is the lowest season.

Tian Hou: Is the margin also follow the same trend?

Stephen Yang: I think so, yes. You look at the margin. In Q2 the non-GAAP Op margin is roughly 5.9%. I think the margin in Q3 definitely will be higher than Q2.

Tian Hou: Okay. Okay. Got it. Thank you. Thank you.

Operator: Thanks, Tian. We are now approaching the end of the conference call. I’ll turn the call over to New Oriental’s Executive President and CFO, Mr. Stephen Yang, for his closing remarks.

Stephen Yang: Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you.

Operator: Thank you. That concludes today’s conference call. Thank you for participating. You may now disconnect.