New Oriental Education & Technology Group Inc. (NYSE:EDU) Q4 2020 Earnings Conference Call - Final Transcript

Jul 28, 2020 • 08:00 am ET

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New Oriental Education & Technology Group Inc. (NYSE:EDU) Q4 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good evening, and thank you for standing by for New Oriental's FY 2020 Fourth Quarter Results Earnings Conference Call. [Operator Instructions] After managements prepared remarks there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time.

I would like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao. Thank you. Please go ahead.

Executive
Sisi Zhao

Thank you. Hello, everyone, and welcome to New Oriental's fourth fiscal quarter 2020 earnings conference call. Our financial results for the periods were released earlier today and are available on the Company's website as well as on Newswire Services. Today, you will hear from Stephen Yang, Chief Financial Officer. After his prepared remarks, Stephen will be available to answer your questions.

Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law.

As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's Investor Relations website at investor.neworiental.org.

I will now turn the call over to Mr. Yang. Stephen, please go ahead.

Executive
Zhihui Yang

Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. Despite the outbreak of COVID-19 pandemics starting from March posted continuing pressure on all business across the globe, including ours. We are pleased to report a set of financial results in the fourth fiscal quarter of this fiscal year, that is in line with our expectation. Total net revenue was $798.5 million, a slight difference of 5.3% in dollar term, or 1% in RMB term.

A mix of results amounted to various business line were reported, which I will elaborate each of them shortly. Total student enrollments in academic subjects tutoring and test prep courses in the fourth quarter of fiscal year 2020 decreased by 6.2% year-over-year to approximately 2,585,600. The lower than normal increase in the number of student enrollments is primarily due to the outbreak of the COVID-19, which has made new customer acquisition in quarter much more challenging. While the enrollment for the summer and autumn classes have also been delayed.

In terms of the bottom line performance, for the entire fiscal year of 2020, we managed to deliver expansion of the non-GAAP operating margin of 70 basis points year-over-year to 12.9% compared to 12.2% for the prior fiscal year. However, for the fourth quarter of 2020, due to the negative impacts from pandemic, our top line performance, and the increased spending from operating free classes to promote our Koolearn's K-12 large classes with the aim of taking more market