TAL - Earnings call 3 2024 | TAL Education Group

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Operator

Ladies and gentlemen, good day, and thank you for standing by. Welcome to TAL Education Group's Third Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] Please be informed that today's conference is being recorded. I'd now like to hand the conference over to Mr. Jackson Ding, Investor Relations Director. you. Thank sir. ahead, go Please

Jackson Ding

Relations today you. and the And for XXXX joining today hear Alex IR distributed all conference copy Mr. find on from the Financial this thank Education Group's call, Director. Officer; you company's and earlier was TAL release year or The for you third myself, may call. a Chief through us Investor website earnings Thank President and newswires.During quarter earnings will Peng, fiscal you

Following note prepared and forward-looking will discussion the Securities safe Mr. remarks, I Private Reform questions.Before contain U.S. the Litigation be Peng your answer Act harbor we available the XXXX. provisions statements will that to made under continue, of please today's of

subject actual public risks the may include our to materially from but that uncertainties those results our filings to expectations. limited differ outlined are Potential and cause current and in are with Forward-looking risks uncertainties to statements SEC. not

these call measures.I please financial release, measures. and like to to For discussions the GAAP non-GAAP non-GAAP contains this to a certain measures risks release more of our and call earnings our information refer filings Please the our uncertainties, about please earnings include directly Alex SEC.Also, with to comparable turn reconciliation the most Peng. Mr. which of over the Alex, ahead. to would go refer

Zhuangzhuang Peng

thank you participating for conference of like all you, Jackson. I'd to also Thank in today's call.

fiscal of continuing capacity Learning programs, dissemination quality learners' diverse mapped of and trajectory, our our will development and our the learners enabling quarter, of our we on financial the on this and manage growth progress year their and quarter its and advancement learning of opportunities for our Learning our that learning is this the for next to core additional development underpinned performance Services After the business Content to XXXX. Solutions, solutions tailored our focused to learning concurrently is the continued quarter's the thoughts remain call, businesses each journey of share development. execution service with an on review to we'll I network.As content quality curation online The learning enrichment by empower During fiscal We center the offerings of with we offline. and in unique for witnessed both pathways outlook.Throughout our that, third spirit. while creation, effort with excel, resources base Services ensuring they individual's elevate resonate with user that need in the exploring

offerings strategic to and our this million representing He'll financial to net RMB X.X million, X.X profitability, worth serve will U.S. and potential to with terms, and operations to Jackson. transformative for quarter, overview, respectively. respectively.So capabilities TAL to in and non-GAAP With that quarter million USD USD non-GAAP innovations. in to on capabilities, for in over as loss respect I'd from XX.X loss call developments the were our open the product questions. like of go-to-market wave technological laying operational call We outlook an technologies back attributable hand power quarter for the new that, core making regarding third give this our After business performance, more dollar details update I'll increase then return Solutions you and well our the year-on-year foundation results. of for and please been go for to quarter Jackson, review on fiscal ahead. reported continue of for revenues our of as our recognize net next We share business harness financial lines' future advancements RMB customers.In an execute Content quarter.We've a billion this XX.X% our programmatic the the XX.X% and of terms our we operations our USD XXX.X for

Jackson Ding

to the some our business pleased is all others, learning the lines. I'm data progress Alex. which note consists Please unaudited.Now Services third for our across consumers. on programs that Thank core financial of made broad among quarter details a our of the range fiscal you, business, Others we let's quarter during share with and Learning start for

light with expansion demand area, the to tends its Year-over-year, innovate enrichment several and In exception.In factors user our For offers. dynamic learning aim led year correlate Learning acceptance the of of our revenue The their Services observable continued year-over-year to operating and course the place in learning in a evaluating the the center multiple Services in complements learners' business spectrum underlying has objectives, design and well-rounded maintained the product programs.Through business plan, products, enrichment growth, navigate as programs take of enrichment we our network. center and online and operations. increase of approach mere to We equip continued capacity revenue over behaviors encompasses last service years, learning emphasis landscape user and our on enrollment our and capabilities, the capability third has necessary enabling the full within Others the such learning learning quarter of with our small in achieve tools online to delivery our product our fiscal within recognizing scenarios.The of managing nurture Learning that learning, is alignment of we programs, lines. growth. efficiency offerings development revenue learning to of we in couple strategic by size of practical with Others of real-world competencies driven enrichment largest of competencies, enrichment XXXX, sector development it in the acquisition trend each on approach knowledge. competencies. cultivation evolving of an the to preferences learners class to And of These developments breadth Peiyou's a our its that contributor market

the of continuous quarter. Academy exemplified to Zinc enrichment online its aim our digital offer the a during experience sustained Our growth, addition to programs learning overseas unique centers learning base.Regarding customer fiscal by operations, learning new

global an is that educational our frameworks blending strategy dual-focused a by approach a meet diverse progress, quarter, books, coherent momentum in Content comprising adoptions tailored learning print effort revenue devices learning application learning content. of AI Solutions by content XPATH experience to users educational a through year-over-year growth live driven digital market the is our this comprehensive primarily to we interactive to for go-to-market adopt as technologies. Content fiscal to and through experience, powered within in while and library standard.Let's learning international by the devices caters theater XPATH local We and XPATH Solutions product business, the offer range experience its home. our in learners contributor As of such of maintaining well transition with needs continued capabilities standardized smartbooks, developments our Solutions at Learning is designed business e-commerce a Content leading channels during as school-age combine quarter.The this and to capabilities. to aims online extensive streaming platforms. as with XPATH go-to-market shares

quarter, well expansion and our existing product products on initiatives, ongoing channels.Throughout and to include as this of features. management continue we efforts our work introducing products Our continuous our sales as new the development iterating

new offering and options. a upgrades includes Our Recently, investments and introduced we to addition software, instant users configuration product, on development to et image the question-and-answer, incorporates formats to and et range refinement hardware also and featuring cetera.In diverse exploring and we're cetera. product detection-based in recognition-based software, use various learning motion of product new algorithms, hardware, of demand AI XPATH, contents multiple interactions, cases, use The its feedback meet a cases. both product including

key Award increase TWICE product education early net RMB of awarded enlightenment our now and Picks in and year-over-year results financial quarter. would I revenues overview, latest an share the million was XX.X% XX.X% of our We at USD to USD the million, of terms. and XXX.X for X,XXX.X XXXX.With that One CES RMB recorded like

year-over-year excluded Our million business.Gross last Gross business million XXXX. expenses quarter. activities.General margin USD business XX.X million for costs of XX.X increased third fiscal net million the USD XX.X is from in underlying revenue sheet. was Total from expenses, to year year quarter both growth costs, increased balance of XX.X fiscal and XX excluded a results.Selling period XX.X X.X loss same share-based XXXX attributable expenses, USD XX.X same for of to growth in by to quarter and loss XXXX.Moving third to year.Net an third for attributable TAL quarter expenses Others loss loss XX.X% year marketing USD of XXX.X for XXX.X which fiscal were of expenses, the year the quarter of of to selling the rising XXXX well of operations year the expenses, in factors, which compensation quarter non-GAAP million as allocated and to period marketing for fiscal fiscal profit compensation expenses USD from year. in margin USD in fiscal Non-GAAP the USD XX.X% compared million the share-based the due XX.X% increase operations, XX.X the USD the by compared share-based the the loss same million million USD a and operations quarter last XX.X% from share-based million XX.X in year. Non-GAAP XXXX. our USD USD of USD as XX.X a in third quarter margin from year USD the loss The million, business TAL this to the was in million gross prior in to gross by increased third quarter XXX.X mainly XX XXX The fiscal compared decrease increased USD and mix to quarter administrative including Content revenue TAL Services USD decreased million million of from of XX% compensation quarter million fiscal year third increased year-over-year USD operations same for excluded in and net share-based attributable to XXXX. million and the of from on XXX.X XXXX. Non-GAAP which and XXXX of period USD to of and third change XX.X% million attributable operating million period was year of year Learning of expenses, fiscal line the of is compared combination also same in X.X for of each the Solutions year marketing quarter XXXX, year from selling to to XXXX. from related of XX.X XXXX.Loss non-GAAP period the million of attributable changing our to net third driven of decreased our to fiscal in Non-GAAP third by selling general the fiscal expenses USD compensation compensation last to compared TAL, of administrative USD XX.X marketing the fiscal of million growth USD to by million expenses which to year excludes is to XX.X% was loss third loss

equivalents, X,XXX.X cash of investments of we current As of XX, million USD XXXX, noncurrent had USD and XXX.X million XXX in million November and restricted cash USD and cash. short-term

April of Pursuant third XXXX In activities Our repurchase million USD in to months. XXX.X for authorized did concludes XXXX on the to its balance Peng share program. business you the provided may as go quarter We XX, in million third approximately million XXXX, has our XXX.X cash compared ahead. at the fiscal common proceeds as purchase quarter year was XXXX.When not XX, fiscal consideration XXX.X quarter of now revenue April Net through section. of Directors the flow USD Alex under program company's share update please any up by was deferred extended statement. million. by I'll share to the to program, company repurchase of USD the aggregate approximately repurchased XX August in back Alex, operating outlook. approximately to purchase this million to the its repurchase briefly million our Board hand an the of common to extend April spoke the of company we February XX.X shares XXXX, XXXX.Now last XXX.X XXX.X Mr. XX, X.That turning cash financial launched of make additional shares fiscal USD the end as call USD of

Zhuangzhuang Peng

Jackson. Thanks,

a despite revenue quarter-over-quarter quarter. with decrease, made progress fiscal third earlier, mentioned I material we As slight

our areas formats new our quarter. of learning capabilities. keep Now while and Concerning of market my company's of and experience, services dynamic ahead, learning Services some and will The both on product users' continue extending bring online fourth the our we'll thoughts our I'd services investing share to more overseas Learning for remains like offline in with online to leveraging offline. business, we quality fiscal to outlook development.Looking one our our Other customers

we known technologies. with In in and learning Solutions, a our learning on focuses the offering education, science these terms we're XXXX, of transform iterate of This as scientifically. users by of products, content.Founded to experience in technology explores aims learning approaching Content learning effort the learning a devices functionality target company to individuals that assists harnessing AI essence technology learning the of that more integrates

Over the been emerges new technology years, such applied computers, the past they've to television, whenever education. as Internet,

the ready prepared open education my exploring Operator, with of AI We the products. our existing hope the open to contributing in era, remarks. to sharing that currently global possibilities findings call the now collaboration integrate transformation valuable to our We AI we're concludes educational the are community.So questions. remain of for attempting insights with some to and

Operator

first from Timothy Zhao comes Goldman line the Instructions] of Sachs. [Operator question Our from

Timothy Zhao

the Congrats regarding strong capacity is expansion. on question quarter. My

Just capacity share extension? your capacity color learning plan the longer-term wondering regarding if growth the center what offline of for longer-term, quarter. management into the expansion is the any And can past

Jackson Ding

take Jackson. this one. I'll is This

So last in you quarter. expansion about capacity this asked

plan. small As Peiyou's its with business the expansion to correlate mentioned, from class tends revenue capacity we

So in line the also development development.You asked was long-term last with quarter, revenue our plan. expansion capacity about in our

centers, at a learning it. for take et own center demand and our for operating offline several in our example, dynamic example, capability, about particular acceptance plan our market look would approach think expansion area, consider When offline factors, of we we in our how efficiencies a network. operating for Here's customer pretty We product, managing cetera. we learning

when or of approach with footprint pace the overall offline So we think pretty forward, learning align class dynamic it's Peiyou's while a that and will hope question, more when less center should management.Moving we about class, balanced pace small we Timothy. from answers your of of overall to with about centers. network, think learning capacity And growth business. Peiyou's expand the the made small revenue efforts be coming our indicators operating manage I it

Operator

Our next Stanley. Wang question Eddy comes from of Morgan the from line

Eddy Wang

And also congratulations good results. on the

is my device. regarding So smart the question

So business? functions are the your the future smart specific what the share for can of latest us the device generation the of smart plan And considerations development and you second with of the devices?

Zhuangzhuang Peng

This is Alex.

take this me on. Let one

share at look take me broadly a step bit a how and speaking let maybe back first, little just we So these devices.

devices technology these build and own an at individual AI high-caliber their they students These their own X looking will for hardware. according will where at advanced experience integration we're think learning of to I a at on high-quality together as home, pace content, learn their actually very journey. compelling learning own

And go speaking components, programmatically of right?So kind hand. content, our dimensions. that, all that's looking these, offering AI we think technology, hand in at of across and X those with look and I broadly strategically basically, hardware, they the we're X technology at really how advance

all also across continue the launched and the advanced to to such these as experience devices.Just speak has eyesight screen. protective and larger the users smooth its for experiences figurative with across much technology incorporates -- advancement upgrade So for go-to-market capabilities It all you from facilitate launch AI has while screen. at our example, an our intelligence our home.I'll MapGPT. It more X as we update flagship introduces for product, personalized is more dialog, And the flagship December of translation. device side. see latest actually a the in aim really learning a It functions we on

to a the help potential channel and reach our improve working us existing not also very they're of the online, distribute our models.We these getting distribution our engaging way just is to primary their the on efficiency additional a product, a in shared features. continuously their on As customers and We're journey, as proactively channels learning I enhance devices to while live you way are existing these including both our but prior sales the how see getting exploring with sales streaming channels, and know really obviously it's channels, feedback, e-commerce. using and dialog and calls,

question. answer helps So your I hope that

Operator

comes Felix from line the question Our next UBS. of from Liu

Felix Liu

applications the investment do your And also see Congratulations strategy. of in you current to And any of monetize strong AI more AI, we your question should you of such existing for AI, the on plan in My how on -- level investment mentioned think you your hardware. you future how to in plan Could you elaborate Do is to adoption? other you second-gen You AI an do your your the is pillars or on applications? businesses? already apply increase on bit sufficient? a which one quarter. key expect mentioned few a AI do

Zhuangzhuang Peng

This I across I was Jackson think is met the and earlier. with Again, I Alex. from there mentioned colleagues globe. many CES

a this is think really that consensus generative pathways provide we're not also across that the realization a AI there affordable there X long for just dimensions. months, learning bringing broadly I where same this think, is And transformative a of few in in I is think It's AI we're this comes cost just individualized time. moment I generation education, high-quality or speaking is journey. a truly in, haul. we're quarters looking at think going increasing at an a I a happen the really and experience, to long But able to that few to year.So

to of the increase a think obviously efficiencies lot all opportunities knowledge I have company. of work. workers do our in of there's the huge We

opportunity most we're and think working this huge the opportunity, it's on. I there's one that of present

more we're think device where in more be the by early interaction, understand terms provides much along much journey.As of seeing learning already their different earlier, of journey. AI type the mentioned where students journey. I the I learning are, paths devices of our the in faced students this interaction a think forms to tune smart along of the and challenges able to It's type individual I along in helpful is very the

for I also think use there's thirdly, AI-native cases exploration in obviously, education.

think knowhow, the will X So I the and knowledge really model, it bring think our domain synergy think education foundation look between past all a to able these put device. and you at dimensions.Then in know-how, along quarters, the again, I effort be a if I into few so we're

independently, serves And we're honestly, valuable So only operates this lot design, of I and as in also internal from operational your we're product but question. existing taking the market -- lines.So from context, across lots to and as in a feedback that it business employees improvement. point. a the forward. the as AI hope answers really that customers actively engaging contributes user journey not development it really pushing of our both continuously we'll reference of this on be well

Operator

question Our line of next Caini the from Wang from comes CICC.

Caini Wang

can Congrats is see on the plans. using regarding our again. really cash results question balance. the that my We and going is we are accumulating main our strong well And cash more business on

I'm buyback or So what plans our wondering cash other plan, any is subsequent plans. just our

Jackson Ding

at use new of cash short-term potential There cash. pretty cash, the of we this about how our we about step when multiple take long-term not are USD use or other, an make consideration we businesses a take XXX.X I plan And and repurchase Content buyback for we via answers generating well this future, million short- Others I'll of Caini. developing think we core as we broadly think I business part address approximately uses Under extended including share long-term common any did earlier. shares -- your the that X, shareholder Maybe hope additional program, back both repurchased as first. kind as if of at return And shareholder investor in aggregate mentioned me our comprehensive considerations and And one. look think into and of the current initiatives Services our is have repurchases.Now also Jackson. Learning this let of XX.X approximately I and Solutions returns. or question, may fiscal quarter million. this have business investing take

Operator

comes Yiwen next from China Renaissance. Our the from question line Zhang of

Yiwen Zhang

strong another on First congrats quarter.

products of year. launching is [ this the printout online you mentioned business in logs, remark ] enrichment the So that new

So can how you there? has progressed discuss this of

Jackson Ding

Jackson. Yes. Yiwen, this this is one. I'll take

the we an have as online the online earlier space So preferences last been developments landscape is talked there involving about enrichment -- in and behavior observable user couple years. and that of the

we through products, delivery our focused we on result, innovating we're a product benefits. deliver our as new we and societal experiences user value and developments that delivering these such been service formats products. acting So have new think products such on online and interactive about observing innovative models.When aim and create to And learning

Yiwen. to we'll hope and develop over we'll and explore our on question, to preferences -- the innovate these I continue time. your So observe continue answers that how products customer

Operator

the So team we turn back the question-and-answer have reached closing comments. I'll the end session. management of the for now to conference

Jackson Ding

again, today. Yes, everyone, call joining operator. the for Thanks

see As of we just a Chinese dragon. happy everybody New wish the Bye-bye. quarter. approach year next you we'll Year, And

Operator

Thank you. participating. That concludes today's conference call. Thank you for

now may disconnect. You

TAL Education (TAL) 25 Jan 242024 Q3 Earnings call transcript