TAL Education Group (NYSE:TAL) Q2 2020 Earnings Conference Call Transcript

Oct 24, 2019 • 08:00 am ET

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TAL Education Group (NYSE:TAL) Q2 2020 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by and welcome to the TAL Education Group Second Fiscal Quarter 2020 Earnings Conference Call. [Operator instructions] After the speaker's presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker for today, Ms. Echo Yan. Thank you, please go ahead, Ma'am.

Executive
Echo Yan

Thanks, operator. Thank you all for joining us today for TAL Education Group's second fiscal quarter 2020 earnings conference call. The earnings release was distributed earlier today and you may find a copy on the company IR website or through the Newswires. During this call, you will hear from the Chief Financial Officer, Mr. Rong Luo; Linda Huo, Vice President of Finance; and myself, IR of TAL. Following the prepared remarks, Mr. Luo and Ms. Huo will be available to answer your questions.

Before we continue, please note that the discussions today will contain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include but are not limited to those outlined in public filings with the SEC. For more information about these risks and uncertainties, please refer to our filings with the SEC. Also, our earnings release in this call includes discussions of certain non-GAAP financial matters. Please refer to our earnings release which contains a reconciliation of the non-GAAP matters to the most directly comparable GAAP matters.

I would like now to turn the call over to Mr. Rong Luo. Rong, please.

Executive
Rong Luo

Thank you, Echo. Good evening and good morning to you all. Thank you for joining us today on this earnings call. Our second quarter revenue performance was based on the robust and healthy growth of our overall small class business in the cities we currently cover and the continued scaling of our online courses. Net revenue growth in the second quarter was 33.8% year-over-year in US dollar terms to USD936.6 million and 38.7% in RMB terms. Total normal priced long-term course student enrollments increased by 54.5% year-over-year, most driven by both growth in online enrollments, as well as the Xueersi Peiyou small class.

GAAP income from operations decreased by 13.5% to USD69.9 million in the second quarter. Non-GAAP income from operations was almost flat to US$98.8 million. The rising operating expenses incurred in Q2 was mainly due to increased sales and marketing spending, research and development spending in our online initiatives.

I will now turn the call over to Linda Huo, our Vice President of Finance. She will give you an update on our operational progress in the second quarter. Next, Echo Yan, our IR Director will review the second quarter financials. After that, I will update you on our key strategy execution and discuss our business outlook next quarter. Linda please.

Executive
Linda Huo

Thanks Jul. Fiscal second