TAL - Earnings call transcript Q4 2024

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Operator

Ladies and gentlemen, good day and thank you for standing by. Welcome to TAL Education Group's Fourth Quarter and 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

earlier you, through operator, today Year for us company's was you Earnings a may copy on newswires. and TAL Education thank the distributed release for earnings Fiscal website Call. all and Group's you Conference find or joining IR The Thank today the Fourth XXXX Quarter

Investor Alex Chief Financial and this you Relations During Director. President call will Peng, hear and from myself, Mr. Officer,

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

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

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

Zhuangzhuang Peng

for year and progress conference the full in Thank from this you, business Jackson. of XXXX. I'd fourth call financial also the all review of call. some In today's performance results discuss like for participating quarter to fiscal you key thank we'll and our the

Learning seek and we fiscal business our serve effective learning strategy users continued who you this engaging that, Following update to I'll to our manage programs briefly quarter experiences. Services on outlook.Throughout

in their receive enrollment our and enrichment experience and business. learning growth with class products our along learning to the small services.Our learning of positive quality led and to expansion the center Peiyou Our increased to Learning efforts quality users Services from for offer feedback continued continue programs xueersi.com network

income to development research the and language technologies from RMB we representing in respectively. and #X our an large X.X refine quarter terms devices, for attributable to students we our financial quarter, USD xPadX assessing learning respect the since terms. X.XX and users recorded our income advanced million fiscal developing million were to new or U.S. self-learning initiative xPadX of product XX.X% devices. leveraging this of and and TAL comprehensively traction the of extended we capabilities both market launched devices our Max by resources performance, enhanced XX net aim in existing new recent MathGPT for profitability, operations and a non-GAAP mathematics, arithmetic of XX.X% RMB billion to USD to endeavors. responses to services into objective more broader have this and model's and with abilities, ranked with learning to Both that for and products From Pro the dollar forward, users to language engagement series LLM learning find model, We learning user a solutions learning In features [ [ national a we abundant large enabling versions to capabilities, integrated basic USD increase national revenues their hardware MathGPT non-GAAP With rankings. our and help committed journey in our needs. delivers recently collaborative our To solid remain two For software suitable pursue XXX.X and ]. ] the early to in year-over-year quarter dedicated our feedback gained continue their go-to we million launch.Going mathematical and With experience.In Pro market received net user mind base, of smart end, their capabilities.

or XX.X XX.X% TAL of billion non-GAAP the USD of year in income net X.X and net attributable full and XXXX, representing XX.X fiscal the terms and non-GAAP income reported $XX.X from and billion, we respectively. operations for U.S. quarter XX.X% to respectively.Our million dollar revenues were RMB RMB USD For year-over-year growth million

lines over our net We the fiscal Jackson. quarter. now performance million.With back the Jackson, also update for financial on I provide core the profit was to reported that, positive to operational whole within non-GAAP year, our will He'll which during USD an XX.X and call business discuss fourth back you. hand advancements the

Jackson Ding

comprises business, other which range we in of growth and all amongst broad some quarter financial year programs learning Please our unaudited.Let made the for you, others a the progress this lines. of In fourth continued various data fourth investments details of other share our the I'm our extended Thank business Learning me product across quarter with across through Services Services for start year-over-year pleased things. quarter we consumers core lines. XXXX, and Learning momentum Alex. to that fiscal note is

growth learning programs and online systematic they've design, and Services. revenue our into learning programs help development learning diverse of programs maintained factors, develop users comprehensive apply build we experience.Our class teaching network from enable interactive other trajectory for this our their to, This capabilities enrichment offline Our classroom to learning offline students Learning learned Peiyou engaging up-to-date generator and small center perspectives, to fostering with was design, multifaceted primary a situations.Our expansion. serve as amongst in what attributable Through year-over-year its real-life period. effective own continue learning enrichment and content thoughts

rate enrolled Notably, effectiveness was stable more learners. unique our assessment applied interactive such offerings operational centers to These features for enrichment programs learning tailored bringing teaching online operations.To our advantages, with and capacity are retention path enrichment course users not online as learning with relatively Our motivate well educational capabilities our We demand enhance strategic to efficiency. our as an have expanded and small online efficiency high alignment decision our as a by enhance and supported them to indicators growth offline to online quarter market differentiate In of learning. of engagement. as quality we but broader visible to add see the been class offline leverage scarce objectives align we business designed smart habits, a has education's also and their programs learning maintained audience. only from resources its fully during

our and user encompasses business, evolving Looking experiences.Next ahead, learning iterate products smart Solutions digital innovate which digital meet books, Content learning devices print demand to we'll continue services and to new is content. our books, for and

go-to year-over-year continued market drove product momentum fiscal during and Our growth this capabilities quarter. portfolio

thanks Content a our generated Revenue to devices fiscal path xPads revenue our on stood our growth. key to its contributor of Solutions as business As AI of embedded in software large previous fourth couple quarters, Xueersi Pro and our from learning in learning continued in series, out growth resources quarter, hardware capabilities, products Max. language from MathGPT. The launch enhanced a xPadX xPadX and and a feature self-developed abundant xPad model latest and newer functions Pro xPads

focus customers consistent an and experience our strategies. in problem sales essay efficient managing review, AI-enabled can for learning while optimizing solving. provide math delivering much user machine our and explanation these human use For learning step-by-step upgrades we more interaction on Chinese more.Together, channels and improved precise tools level. example, Meanwhile, answer solutions and our engagement or English marketing

increase compared by to which from in Learning included fourth expenses revenues, costs, compensation of the administrative XX.X% million from last as was Non-GAAP XXX.X XX.X% to year which products from XX.X% expenses, USD and XXX.X quarter the increased margin and XX.X% revenues XX.X terms year the fiscal million increased billion, million explore dollar now and expenses, general USD same for year.Non-GAAP the expenses, quarter the our last by from X.XX XX.X million a of Non-GAAP XXXX. of decreased revenues to selling also USD increased from XX% USD year.Loss same and of to to attributable USD and loss key million XXX.X XXXX of share-based started I overview, RMB by this X.X% to for fiscal to Solutions million year the XXX.X loss attributable Gross in U.S. With Non-GAAP of to increased million in was same USD our TAL expenses, share-based from to fourth marketing opportunities XX.X compensation sheet. efficiency TAL period same which primarily USD Net compensation quarter. in XXX.X last costs the of USD XXX.X loss XX.X% the excluded which of attributable balance XX.X same fourth net was year.Moving for million USD or both USD USD We expenses from total fiscal in our monitoring Non-GAAP quarter last the cost compensation The USD fiscal expenses of attributable same compared year. uptick the an were general channels, of million The closely compensation respectively. XXX.X XXX.X and to net fourth we're and share-based million XX.X% $XX.X representing General the in USD to XX.X% for by same USD period the fiscal excludes and marketing to share in XX.X million by of in decreased increase to to million period year-over-year. was increased profit in last year for X.X increased Content was quarter operations XXX.X of an attributable percentage XXX.X recorded expenses from million financial period USD for allocated of income we income period from marketing million increased Non-GAAP the growth the share-based year. offline USD TAL the of our channels expenses expenses, Services to quarter to USD and year-over-year. million million and USD expand XX.X XXX.X in by to related from revenues compensation which million was online XX.X% XX.X marketing expense total to our XXXX of also activities.Selling driven XX.X in that million for in TAL the on from to million last XXXX, to to period last excluded excluded of XX.X% from results year. XX.X% compared to USD marketing million the USD operations quarter. was period XXX.X like expenses, year. non-GAAP share-based XXXX percentage compared year net same last of increased as period XX.X net million XX.X% market. net XX.X% fiscal X.X% of in fourth the same in quarter in a -- fourth from in RMB business.Cost of While period USD Total last Selling administrative the year. XX.X loss excludes XX.X% XX.X of would selling rising year-over-year non-GAAP to -- share-based revenues operations XXXX.Gross from same increased increase of quarter the period of USD and administrative last USD a income period net of of our the expenses the year million million which business by last operating to year-over-year for year. operations, year. selling million, million from USD same by and

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

the activities XXXX the operating revenue year used of our to balance gears Our deferred fourth results. for XXXX cash of quarter.Now as XXX.X full end turning cash XX.X let's statement. million quarter flow the million.Now was and fiscal fiscal fiscal fourth year Net financial USD to switch of USD was on in move

excluded authorized compared to That program, year. fiscal X.X attributable XX.X share in financial section.In USD operations to and dollar the April XX.X billion, the repurchase year expenses previous from which year of in the net TAL, fiscal non-GAAP terms fiscal million was concludes USD Non-GAAP million which of key to Directors revenue XXXX, XX.X% $XX.X XXXX. U.S. extension the to in financials and X,XXX.X in repurchase some a million net XX, USD April loss fiscal million through million year. million the program Fiscal share-based attributable of follows. extended year-over-year million compared XX.X% XXXX for or the from XXXX. from was non-GAAP a million.Loss highlights compensation RMB shares launched expenses, TAL in review briefly approximately attributable million was Gross in XXX.X $XXX.X in to to increase of XX.X% profit excluded representing me RMB USD to company's of year of fiscal purchase income may to of net to compared year XX-month Non-GAAP fiscal compared million XXXX net year XXXX USD respectively. common up as increased the year Net the million for operations its $XX.X company's income operations XX.X Let by attributable operations, loss XXXX. of increased $XX.X Board TAL compensation the company to share USD XX April XXX.X income TAL to was share-based the XXXX. Pursuant loss loss USD prior the to

August of USD consideration had back the repurchase quarter authorized Directors million please our share repurchased and under TAL's of the an purchases XXXX. business on We in the fiscal any of call concludes ahead. by company its repurchase the approximately XX.X program. I'll update XXXX, briefly not share XX, fourth you to program of In make additional now common hand year has financial shares section. As million XXXX, to XXX.X months.That go aggregate XX to Alex, outlook. Board Alex April expand did the

Zhuangzhuang Peng

Jackson. Thanks,

programs we catering for throughout group's center expanded various efficiencies. highlighted also manage call, to develop needs specific learning year during and footprints, user As additional this Services, our operational learning XXXX our fiscal Learning

as result, business few last the year-over-year in So the a experienced growth quarters.

Our foundation high-quality future our also channels. progress conversations through learning engaging our target through with various a Content for believe laid made Solutions offering devices go-to-market and fiscal customers We in development. XXXX

share year remain to company's I on fiscal businesses. and like objectives on XXXX.First would strategy mature all, of now insights further our So the for we focused some refining

for our online to learning and We products continue standards services. uphold will high-quality offline and

We hope our speed can intelligence where the opportunities.We during we to the remain education optimize our We'll model, and content services. improving new accuracy intelligence also existing fiscal Our its potential response learning our some to revenue community. our applying to is and goal era, players eye with businesses, and To year. XXXX. to we'll and to other our working with open with artificial in fiscal with services. expect AI new and technology make findings products artificial identify to how the student collaboration and Among areas in serve seize We'll keenly our engaging largest by the ever-evolving in Learning Services explore interaction. to trends year also differentiated customers' to on keep can contributor and insights continue needs, and share and innovate interact our staying continue explore and of teaching continue valuable various as a contributing programs invest improving we is explore up to global education transforming close attuned products keep effective industry to and experience integrate how design our mature we and

our on our to call all product our driving in focus concludes we'll operations, marketing forward. our operations now create questions. R&D, to we're also metrics to believe prepared for timely stock efficiency and overall that make learning to including business while We'll and think remarks. optimize details sales services profitability. open the society factors generation, enhance I more.So adjustments closely the Operator, and each monitor dedication and our refining efficiency ready my in of for our We and products providing and users our value business will Finally, content

Operator

the Daiwa. comes line from question first from Our Chan Candis of Instructions] [Operator

Candis Chan

on achieving this growth growth year? the of some also the strong would revenue the also, very congratulations colors And And share results. a you this robust After XX% revenue focus for can set target investment for fiscal be year? new year, the what key for on

Zhuangzhuang Peng

Alex. is This Thanks, Candis.

Let me take this one.

I output really is input. high would the So level, a of very investment at growth I say, think

last investment least, technology, not is organization. people I network, innovation, going channel but and and product our span from input and services think to this and our

answer at revitalizing growth. learning customers your services revenue very provide continue fits with of sort I show with largest I differentiated we'll if really refining products obviously invest contributor think to high all continue various I and So robust one an and intelligence. bit programs of serve would will in experience our continue in innovate learning focused segments think further, I both mature questions And as our to and the an unpack was We'll integrated a to to year remain it our really on obviously our a integrated level, scenarios and go. little just businesses. artificial new in to would I fiscal continue services further and to learning expect of that them all journey. obviously and explore We'll and design to

education is think I think just continue that to. profitability. earlier refine of on that chain era operations to attention impact of huge I we we overall enhance pay mentioned transformative of efficiency it across amount to And AI the it's believe entire our We'll area this the really, on details And operation. goes its starting. an a and call, the I that and

content generation to You sales and to go from R&D product marketing.

your answers Candis, So I question. that hope

Operator

next Our from of from comes question line Linda the Huang Macquarie.

Linda Huang

I for XXX is number So learning previous remember center in regarding to that center call, learning XXX. conference my is expansion. the the question our

the your how then expansion of gauge quarter? more 'XX, with the you share learning at and market So for the can previous demand And plan? color do FY regarding us for you center end expansion

Zhuangzhuang Peng

Alex. is This Linda. Thanks,

well. as one this take me Let

expanded past was rate good with think I with line we for relatively of future. our And retention being we students, of we in feel expanded capacity which into about that increasingly quarter, in the line stable all, more as expectation. the growth our first So capacity for

would adopt look share such market our foster it's say, very geographical utilization will hitting response rate such look at it's obviously always metrics metrics our expectation. these are the teacher We'll think Now the upcoming whether the set. the and be Peiyou I've us programs, situations. years. positive. We'll rate. of users approach, enrichment addressed at whether of products And as services, need together, a they different year, would all when more I and really this apply And from user they're I it's product develop really look a also set full classroom density to got right? balanced learning learning, They enrichment just the bit a of is our this to multifaceted look we on demand. And which I in how So at into we of their are utilization new retention, demand, there mindful that past help user for person we operational theme we'll consider to perspectives learn obviously, that things couple need and designed Look, what approach. as look tell that the thoughts They at color a a real-life at to a development to we capabilities. own develop

capabilities we think our growth. in to will and so user we've our sustained observed believe this positive And really feedback effectiveness the continue far related quality So I dedication, mentioned drive to above. enhancement

to think We'll of demand to path. year, visible good upcoming in center learning seeing signs signs, meet next I our growth very continue user network the the year. for So we're expand

metrics, think a balanced to and district, or customers approach, to our particular they're also teams building our those and mentioned responding that especially really frontline operational dynamic I right, capabilities, particular our enhancing into of about, how metrics market are all city in a area I particular in on ground, operating the efficiency that those demand the taking take services, and we'll and we'll consideration. own products and stick capabilities

this we'll it, I approach. a further to expand dynamic balanced to we our and network, So summarize to in manage think just expect continue and

I hope answers Linda, So, question. that your

Operator

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

Felix Liu

on Congratulations results. quarter fourth the strong

to the your your investment about -- learning? commitment expansion just you learning online plan to strategy May do online. with I How focus online enrichment you just You do in shift offline think expansion, the Do our investment similar segment? plan to of talked your strategy, increase strategy. to offline to you offline the

Jackson Ding

this see experience we When learning and evolved thanks Felix, over the landscape, as Jackson. really, especially gradually this one. user couple the the has enrichment I'll a we the for dynamic last of look landscape. is we or this business question, industry take years in this market particular at online see

Now course happened enrichment QX, get a in into what our maybe this of future, its talk our learning the kind just before fiscal operations. about this bit me enrichment maintained little quarter online with online business let In business. past I of

provide about new an about You also for or engaging and our to audience, less we a at making a market SKUs Online We asked unique while experience. our also of online that features learning not we to because right? needed see would say opportunity area well. more opportunity leverage time strategic remains interactive as sure refined high-quality because operational provide efficiency investments. I only itself decreased same the to It's learning enrichment us, a explore but the customers it's the a increased effective to learning as it resources about plan. deploy with and broader investment experience digital

online question, forward, continue our We'll while to So for audience, services social -- user of bring we'll resources focus on products our strategic high-quality broader to learning area that benefits to while and a a your we hope answers value Felix. learning, customers and enrichment us. delivering quality benefits. and educational looking scarce, remains the I enhancing leveraging

Operator

Zhao Sachs. Our of next the Goldman from question comes line Timothy from

Timothy Zhao

Congrats on strong very results. the

line. Solutions Content the question business my So on is

share term? of think what to wondering, latest make user you engagement the the I and the on the more line the business quarter? plan the is hardware that longer colors your could sales further the And into over Just some management launched sustainable

Zhuangzhuang Peng

Timothy, Alex. this is Thanks,

Let me take one. this

alluded Pro call, past of in and Pro and all, to products the quarter launched I to quarter, X on xPadX we you as mentioned earlier xPadX Max. first this this new just address So

So higher in ASP. in keep another really this set metrics eye by quarter, volume being of which increasing which But is that look at and to, is there I a growth driven engagement. very close reality, I

average in critical. hardware think those look really time. So they in that's intelligence relatively artificial interesting homes, we base, an And that enhancements for I signs and products the at and tools came are according tools. early of seeing actually learning the user great we're that their remains profile. the these and enhancement And as usage uptick students observing because in own that I on weekly tools in is set another quarter despite style of ever general, their stable become to the usage thing in showing launched the that's we their It we in companions learn with they larger learning own new think

forward, look going at really X So I sort main of directions.

first more the I I And learning add, coming hardware, on tools may is engagement, these those enhance learning xPadX customers. And begun. is [ XX learning about upgraded think design, ]. really the products. the a We actually, North think human interaction and further devices. for be software this our first learning and since This to just engagements, the if Star we the is hardware. launched drives us, intelligence content the and continue impactful to our look on So continue think we much effective new obviously I continue one artificial additional on improvement content right? and I improve that provide to just journey launched what high-quality journey has months to and the engagement the to impact, learning at hardware machine But

make intelligence, our and large become huge into artificial of the model, a we additional as I think there's for to investment potential language better amount going it's further better future.

to will at our need main new is share The and strong brand a to well-known to brand, very but direction a continue other obviously as build our we we're brand, hardware. I look as

actually obviously us, sales could the at will possible building to continue with a online which our platforms. I mainstream channels channels. for streaming we'll We also their explore reach motor the closely drive from to to of in look a to So what in to channels. also we'll that our segments to continue efficiency the offline are e-commerce set really future. We'll customers believe live opportunities be bring expand customer and to these to goes more start But sales able brand of kids. the right, to think larger engage bring conversation impact this we'll more in also opportunity And device channels,

I your Timothy, hope answers So question. that

Operator

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

Caini Wang

Actually big a in still has amount my cash is the question hand. company of

how our And further so And shareholder are considering the returns? on we have any improving cash plans usage? do we

Jackson Ding

use When One and are several we balance about potential as cash you this company I'll February and this of Caini, like short-term thanks XX, think -- cash of take think we we try to between cash is for USD we and short-term Look, factors we investments the is try question. And to and right? one. restricted said, cash, of kind about equivalents, development. XXXX. there balance, Jackson. long-term the has almost X.X in billion

is into we business returns. shareholder the to to balance, generate reinvest and that second do The try

us are means journey. their previous roughly we And exploratory continue still to on one And lastly, a -- which explore we'll cash call stock allow to evolves. And -- new I our now, phases. during are always still USD learning is spawn deliver our we'll returns, which about initiatives talked new of value As one, the some XXX the want to we'll on of was in these that opportunities board shareholder the generate XXX usage purchase steady industry for customers initiatives business and investment for repurchase. few We fund to about in business maintain into year that program could or seek of segments core talked second authorized, is conversations. as the considerations. buyback areas in are extended business to mind and high-quality create that our million are, that be pace another I up a diversified of products that to kind of them new

that's about of answers Caini. we that for now. So usage I think how question, cash hope kind your

Operator

the end now to the to have turn the like team We I'd back for now conference reached question-and-answer of closing session. the comments. management

Zhuangzhuang Peng

we'll is call, you this quarter. again. and Thanks, for in bye-bye. everybody, So Thanks, today's next Alex and see participating

Operator

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

disconnect. may You now

TAL Education (TAL) 25 Apr 242024 Q4 Earnings call transcript