New Oriental Education & Technology Group Inc. ( EDU ) shares are trading lower on Tuesday’s premarket.

The company reported a second-quarter revenue increase of 19.4% year-on-year to $1.038 billion, beating the analyst consensus estimate of $1.009 billion.

Total net revenues, excluding revenues generated from East Buy private label products and livestreaming business, increased by 31.3% Y/Y.

The growth was mainly driven by increased net revenues from educational new business initiatives.

The company’s adjusted earnings per ADS of $0.22 missed the analyst consensus estimate of $0.29.

Operating costs and expenses for the quarter shot up 20.2% to $1.02 billion. Operating income for the quarter decreased by 9.8% Y/Y to $19.3 million with an operating margin of 1.9%.

For the first half of FY25, revenue jumped 25.6% to $2.47 billion.

As of January 20, 2025, the Company had repurchased an aggregate of approximately 11.2 million ADSs for approximately $542.8 million from the open market under the prior authorized repurchase plan.

The operating cash inflow for the second quarter totaled $313.3 million. As of November 30, 2024, New Oriental had cash and cash equivalents of $1.42 billion. 

Outlook: For the third quarter, New Oriental expects total net revenues, excluding revenues generated from East Buy private label products and livestreaming business, of $1.007 billion to $1.03 billion, representing a year-over-year increase in the range of 18% to 21%. The analyst consensus for the quarter stands at $1.29 billion.

Price Action: EDU shares are trading lower by 12.9% at $53.00 in premarket at the last check Tuesday.