New Oriental Education & Technology Group Inc. (EDU) Income Statement

The swings appear largely tied to seasonal enrollment cycles and the expanding e-commerce contribution, so a single quarter's growth rate may overstate or understate the underlying trend. The fact that growth decelerated to 6.1% in 2026Q1 before reaccelerating suggests the East Buy channel is adding volatility rather than smooth compounding. Investors should monitor whether trailing growth holds above the low-teens once seasonal effects are normalized.

Holding gross margin in the mid-50s while adding lower-margin physical product sales through e-commerce implies the education and consulting franchises still carry meaningful pricing power. The margin appears to be cyclical, peaking in first quarters when test-prep demand is strongest, which limits how much of the full-year margin can be read from any single period. Further regulatory caps on tuition or rising traffic acquisition costs could compress this range, and the data does not allow us to isolate segment-level gross margins.

The gap between gross profit and operating income in weaker quarters, such as 2025Q4 where SG&A of $623.3M exceeded gross profit of $673.3M by a thin margin, shows that overhead absorbs most incremental gross profit. SG&A has remained relatively flat in dollar terms around $520M to $730M while revenue fluctuates, which points to a largely fixed cost base. Operating leverage therefore works in both directions, and investors should expect margin volatility to track seasonal revenue rather than steady structural improvement.