In This Article:
New Oriental Education & Technology Group (NYSE: EDU)
Q1 2025 Earnings Call
Oct 23, 2024, 8:00 a.m. ET
Contents:
-
Prepared Remarks
-
Questions and Answers
-
Call Participants
Prepared Remarks:
Operator
Good evening, and thank you for standing by for New Oriental's FY 2025 first quarter results earnings conference call. At this time, all participants are in a listen-only mode. After management's 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'd now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao.
Sisi Zhao -- Director, Investor Relations
Thank you. Hello, everyone, and welcome to New Oriental's first fiscal quarter 2025 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, Stephen Yang, executive with president and chief financial officer, and I will share New Oriental's latest earnings results and business updates in detail with you.
After that, Stephen and I 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.
Should you invest $1,000 in New Oriental Education & Technology Group right now?
Before you buy stock in New Oriental Education & Technology Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and New Oriental Education & Technology Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $879,935!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of October 21, 2024
As such, our results may be materially different from the view 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, this conference call will be available on New Oriental's investors relations website at investor.neworiental.org. I will now first turn the call over to Mr. Yang. Stephen, please go ahead.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. We are pleased to announce that the company has forced a healthy growth across our key business lines, the alignment with the expectations with a top-line growth of 30.5% this quarter. Total net revenues excluding revenues generated from East Buy private label products and live streaming business increased by 33.5% year over year.
In particular, we're impressed by the highly encouraging growth that the new endeavors have entered, which has significantly contributed to the core building blocks of the company. At the same time, New Oriental's bottom-line performance for our core educational business has also achieved healthy yields. Operating margin-wise, we have excluded operating margins generated from East Buy for this quarter for a better reflection of the performance of New Oriental's core educational business. The operating margin and non-GAAP operating margin for this quarter has reached 23.7% and 24.4%, representing 370 and 220 basis point improvement year over year, respectively.
We are pleased to see the tremendous efforts that we devoted into our offerings and platforms, sparking positive growth across our business lines. Our commitment to maintaining a healthy profitability and market share stands firm as we strive to create sustainable value for our customers and shareholders in the long term. Now I would like to spend some time to talk about the quarter's performance across our existing business lines and new initiatives to you in detail. Our key remaining business continued to secure encouraging trends this quarter.
Breaking it down, the overseas test prep business recorded a revenue increase of 19% year over year for the first fiscal quarter of 2025. The overseas study consulting business recorded revenue increase of about 21% year over year for this quarter. The adults and the university students business recorded a revenue increase of 30% year over year for this quarter. The ongoing investments in our new education business initiatives, which mostly revolve around facilitating students overall development have propelled the company's engine to innovation, having secured strong momentum in their respective ventures.
Firstly, the nonacademic tutoring courses, which we have offered in around 60 existing cities, focused on cultivating students' innovative capability and comprehensive quality. We are pleased to receive solid interest with a total of approximately 484,000 student enrollments recorded in this quarter. The top 10 cities in China contribute over 60% of this business. Secondly, the intelligence learning system and device business has been adopted in around 60 cities.
We're happy to see elevated customer retention and scalability with approximately 323,000 active paid users reported in this quarter. The revenue contribution of these initiatives from the top 10 cities in China is around 55%. Our smart education business, educational material and digitalized smart study solutions have continued to contribute material yields to overall advancement of the company. In summary, our new educational business initiatives have recorded a revenue increase of 50% year over year for this quarter.
In addition, our newly integrated tourism-related business line is now comprised of diverse offerings of culture trips, study tours in China and overseas, as well as the camp education. Within the business line, our study tour and research camp business for students of K-12 and university-age achieved tremendous growth this quarter with an increase of 221% in revenue year over year for this quarter. We have operated study tours and research camp business in over 55 cities across the country, with the top 10 cities in China offering over 55% of revenue share of this new business. The number of top-notch tourism offerings were also piloted to expand our reach to all age groups, including the middle age and the elderly individuals around 30 featured province in China and globally.
This inspiring growth this quarter has affirmed our devotion to deliver premium offerings to our valued customers, and we believe this new business line will contribute continuously meaningful revenue from this fiscal year. With regards to our OMO system, we have persisted in revamping our platform and leveraged our educational infrastructure and technology edge on remaining key business and new initiatives with a vision to provide advanced, diversified education service to customers of all ages. In this quarter, a total of $24.6 million has been invested in our OMO teaching platform, which equips us with the flexibility to maintain a reliable service to students. In terms of the East Buy performance, since April 2022, East Buy has launched a total of 488 SKUs in private label products in just two years.
Our product categories have expanded into well-diversified product mix to date. Through the reporting period, East Buy also uplifts the significance of the offering only product with high-cost performance, which has proven effective in reiterating East Buy's value in the minds of our current and new users. In addition, thanks to our multichannel strategy that has been and has driven sustainable growth. East Buy's footprints have expanded from our live streaming channels to the life of Tmall, JD, Pinduoduo, and Xiaohongshu, as they amplify our reach to a wider customer base.
In the new year, East Buy will explore offline channels by examining the partnership with offline schools owned by new rental brands and other parties as part of our vision to initiate offline sales network and enhance our brand awareness to the great expense. With regards to the company's latest financial position, I'm pleased to share that the company is in a healthy financial status, with cash and cash equivalent term deposits and short-term investments totaling approximately $4.9 billion. Now I would also like this take opportunity to highlight that the company's board of directors approved a share repurchase program in July 2022, in which the company is authorized to repurchase up to $400 million of the company ADS or common shares through the next 12 months. The company's board of directors further approved to extend the effective time of the share repurchase program to May 31, 2025, and increase in the aggregate value of the shares that the company is authorized to repurchase from $400 million to $700 million.
As of October 27, 2024, the company repurchased an aggregate of approximately 9.8 million ADS for approximately $457.9 million from the open market. Now I will turn the call over to Sisi to share with you about the key financials. Sisi, please go ahead.
Sisi Zhao -- Director, Investor Relations
Thank you, Stephen. I'd like to share our key financial details for this quarter. Operating costs and expenses for the quarter were $1,142.3 million, representing a 27.6% increase year over year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were $1,135.4 million, representing a 32.18% increase year over year.
The increase was primarily due to the cost expenses related to accelerated capacity expansion for educational business and newly integrated tourism-related business. Cost of revenues increased by 32.3% year over year to $583.5 million. Selling and marketing expenses increased by 42.3% year over year to $193.7 million. G&A expenses for the quarter increased by 15% year over year to $365.1 million.
Non-GAAP G&A expenses, which exclude share-based compensation expenses, were $354.5 million, representing a 22.1% increase year over year. Total share-based compensation expenses, which were allocated to related operating costs and expenses increased by 82.7% to $6.9 million in the first fiscal quarter of 2025. Operating income was $293.2 million, representing a 42.9% increase year over year. Non-GAAP income from operations for the quarter was $300 million, representing a 22.6% increase year over year.
Net income attributable to New Oriental for the quarter were $245.4 million, representing a 48.4% increase year over year. Basic and diluted net income per ADS attributable to New Oriental were $1.49 and $1.48, respectively. Non-GAAP net income attributable to New Oriental for the quarter was $264.7 million, representing a 39.8% increase year over year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were $1.61 and $1.60, respectively.
Net cash flow generated from operations for the first fiscal quarter of 2025 was approximately $183.2 million, and capital expenditure for the quarter were $80.2 million. Turning to the balance sheet. As of August 31, 2024, New Oriental had cash and cash equivalents of $1,147 million. In addition, the company has $1,513.8 million in term deposits and $2,248.6 million in short-term investments.
New Oriental's deferred revenue, representing cash collected up front from customers and related revenue that will be recognized as a service or goods are delivered, at the end of the first quarter of fiscal year 2025 were $733.1 million, an increase of 23.7% as compared to $1,401.4 million at the end of the first quarter of last year. Now I'll hand over to Stephen to go through our outlook and guidance.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Thank you, Sisi. With the encouraging performance achieved from our diverse business lines backed by our solid education resources that have to the test of time, we're bullish on maintaining a healthy growth for our core educational business. Simultaneously, we will devote ongoing investments in expanding our new tourism-related business. We believe that these inputs will nourish more expansive nationwide rollout of our tours in this fiscal year.
While we strive to safeguard a healthy balance between revenue and profitability growth, we will also cautiously manage our capacity expansion and hirings to underpin the development of our educational business in this new year. We plan to increase our capacity by around 20% to 25% for this fiscal year. The most new openings will be launched in cities with better top-line and bottom-line performance. Rest assured that we will closely monitor the pace and scale of new openings in accordance to the local operations and financial performance during the year.
Every second quarter of our financial year tends to be a slower period due to the seasonality of our business. That being said, we remain confident in attaining a steady growth and satisfactory operating profit for the full fiscal year. We expect total net revenues excluding revenues generated from East Buy in the second quarter of the fiscal year 2025, September 1, 2024 to November 30, 2024, to be in the range of $851.4 million to $871.8 million, representing a year-over-year increase in the range of 25% to 28%. In addition, based on our current estimation, we expect the operating margin for whole company except for East Buy for fiscal year 2025 will expand year for year.
I must say that these expectations and forecasts reflect our considerations of the latest regulatory measures, as well as our current and preliminary view, which is subject to change. To conclude, New Oriental will always pursue premier offerings to our customers, simultaneously achieve sustainable growth. To achieve that, we will continue to develop necessary resources on research and application of new technologies such as AI and ChatGPT into our education and product offerings with a vision to uplift our strength to pursue the growth and operating efficiency. We will also continue to seek guidance from the -- from -- and cooperate with the government authorities, comply with the relevant policies, guidelines, and any related regulations, as well as to further adjust our business operation as required.
As always, we will work diligently to enhancing the nation's education level to strengthen the leading position so as to unveil further potential across all our business lines and realizing our vision. This is the end of our fiscal year on '25 Q1 summary. At this point, I would like to open the floor for questions. Operator, please open the call for these.
Thank you.
Questions & Answers:
Operator
Thank you. The question-and-answer session of this conference call will start in a moment. [Operator instructions] We will now take our first question. This is from the line of Felix Liu from UBS.
Please go ahead.
Felix Liu -- UBS -- Analyst
Good evening, management. Thank you for taking my question. My question is on your second-quarter guidance. We noticed that in the first quarter, your capacity expansion was over 30% year on year by the number of learning centers.
However, if we look at your second-quarter guidance, it's slower than your capacity expansion in the first quarter. So how should we think about the gap between capacity growth and revenue guidance? And could management share your outlook for second-half growth? Will -- do we expect to see the converge with capacity? Thank you.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Yes. I think -- thank you, Felix. As for the Q2 guidance, we give the guidance of the top-line growth will be in the range of the 25% to 28% in dollar terms year over year. But as you know, every second quarter tends to be a slower quarter due to the seasonality of our education business.
And -- but we will remain confident in attaining a steady growth of around 30% year over year for the whole year. So that means, we expect the revenue growth, excluding East Buy, in Q3 and Q4 will be accelerated compared to the growth of Q2. So as you know, even though we have seen some impact of the existing economic environment like the overseas business, we will expect the full fiscal year revenue growth, which, except for East Buy, will be around 30% year over year. And yes, we opened more learning centers in last year, Q3 and Q4, but we have seen -- we ramped up the learning centers much faster than before.
And so -- and I think we will feel the learning centers -- more students into the learning centers, especially in the Q3 and Q4. So we're quite optimistic about the top-line growth for the whole year for the whole year. Thank you, Felix.
Felix Liu -- UBS -- Analyst
Thank you.
Operator
Thank you. We will now take our next question. This is from the line of Alice Cai from Citi.
Alice Cai -- Citi -- Analyst
Good evening, Steven and Sisi. Thanks for accepting my question. I have a question about expansion. Since Q2 is typically a low season, are you concerned slowing down capex expansion during this period to increase margins, and do we expect more capex to be compensated in Q1 and Q4 for FY '25? And for the upcoming quarters, will you focus on encouraging penetration in existing cities rather than entering new ones? Thank you.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Yes. By the end of this quarter, Q1, we have added around 6% new capacity. And so as I said, we plan to increase our capacity expansion by 20% to 25% for the whole year. And last year, we opened more learning centers.
But this year, I think we will open the learning center, but a more healthy pace, 20% to 25%. And yes. As I said, we ramp up learning centers much faster than before. And so I think as the whole year wise, I think the margin -- we will see the margin expanded for the whole year.
And in the Q2, yes, we might be in some margin -- tiny margin pressure in Q2 because of the seasonality, due to the low season. But we do believe for the whole year, the margin will be expanded for the education business, except for East Buy. Thank you, Alice.
Alice Cai -- Citi -- Analyst
Thanks.
Operator
Thank you. We'll now take our next question, and this is from Yiwen -- apologies, Yiwen Zhang from China Renaissance.
Yiwen Zhang -- China Renaissance Securities -- Analyst
Yes, great. Thanks for taking my question. So my question is a follow-up on the margin. So it's very good to see adjusted margin increased 220 bps on worldwide basis, reversing the dip in the previous quarter.
So can you just talk more about what are driving this improvement, and how should we think about the drivers to play out in the rest of the year? Thank you.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Thank you, Yiwen. You asked the question about the margin. A lot started with the margin analysis of this quarter. The non-GAAP OP margin for education business, which excluding East Buy, was expanded by 220 basis points year over year.
As you know, I think last year, Q1, OP margin was high base. So that means we have a hard comparison this quarter. But we still doubled the margin expansion by 220 basis points year over year. I think this is mainly due to the following reasons.
Number one, we are pleased to see that the business alliance achieved the positive top-line growth for all business lines. And number two is we started to bear fruit of the learning center expansion of last year. It's drives the overall utilization rate up and get more operating leverage. Number three, we started to make cost control in the whole company, and we leveraged more overhead in this quarter even though we even spend more money on the new tourism business.
But the educational business, except for East Buy, we still got margin expansion higher than we expected. And for the margin outlook, due to the seasonality of the business, every second quarter is the low season. So we're likely to experience some minor margin pressure in the second quarter. But as I said, we were quite confident about Q3 and Q4.
So we are optimistic on the margin profile for the educational business, excluding East Buy in the whole year. And I think we expect that the whole year, the non-GAAP OP margin will be expanded for our year. Thank you, Yiwen.
Operator
Thank you. We will now take our next question. This is from Lucy Yu from Bank of America. Please go ahead.
Lucy Yu -- Bank of America Merrill Lynch -- Analyst
Hi, Stephen. Just to clarify, Stephen, you said the second quarter non-GAAP OP margin will be under pressure. Do you mean that excluding East Buy, we're going to see margin contraction on a year-over-year basis? So just to clarify on that. And actually, my question is on the culture tourism.
You did mention that camp revenue was up by over 200% year over year. So may I know how much revenue that cultural tourism contributed this quarter, and is that business segment loss-making or profit-making for this quarter?
Stephen Yang -- Executive Vice President, Chief Financial Officer
Yes, the margin -- the tiny margin pressure in Q2, what I said is only related to the educational business. And because we guided the 25% to 28% top-line growth and the Q2 is the low season of the education of business. So I think that you will see more leverage in Q3 and Q4. And so this is the -- so as I said, we're quite optimistic about the margin profile in Q3 and Q4.
And the tourism business, yes, in Q1, we'll see peak season for the touring business, such as the camp business and the overseas study tour, domestic study tour business. So the revenue of the Q1 was somewhere around $90 million of the tourism business. This is the revenue in Q1. And yes, we are profitable in Q1 because of the peak season.
But for the whole year, I think we will see loss-making of the tourism business. And that's just the first year. We need more time to testify the product and the business model for the tourism business. But we are quite confident about the development of the tourism business.
Thank you, Lucy.
Lucy Yu -- Bank of America Merrill Lynch -- Analyst
Thank you, Stephen.
Operator
Thank you. We'll now take our next question. This is from Timothy Zhao from Goldman Sachs.
Timothy Zhao -- Goldman Sachs -- Analyst
Hi, Stephen. Thank you for taking my question. My question is regarding your K-12 new initiatives. Just wondering if you can break down in terms of the revenue growth between the nonacademic tutoring and intelligent learning devices and services.
And a related question on the specific segment is I do notice that I think for the nonacademic tutoring, the quarterly enrollment for the past quarter grew by around 11% year on year compared to close to 40% a quarter ago. I was wondering if you can elaborate more on the growth and what kind of growth that we should expect on the enrollment for the following quarters versus only 11% for this quarter. Thank you.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Sisi will share with the team about the revenue breakdown within the new business.
Sisi Zhao -- Director, Investor Relations
Yes, the new K-9 educational related, including the nonacademic tutoring and intelligent learning device business grew by over 50% in Q1, 56%, and both are growing at similar rates.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Yes. And the second question about the enrollment. Yes, the enrollment growth of the K-12 seems to be low in this quarter because we opened the summer enrollment window earlier than that of last year. So we -- so that is -- we reported more student enrollment in the last year Q4.
This is kind of a timing difference. And so if you combine the Q4 and Q1, the enrollment growth will be normal and is very strong absolutely. And as I said, even though Q2 will be in low season, but we're quite confident about the whole year top-line growth. And and I think we will see the accelerating top-line growth in Q3 and Q4.
And for the new businesses, I think we still keep the same guidance of the 40% to 50% top-line growth for the new businesses for the full year.
Timothy Zhao -- Goldman Sachs -- Analyst
Thank you, Stephen. Thank you, Sisi.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Thank you.
Operator
Thank you. We'll now take the next question. This is from Charlotte Wei from HSBC. Please go ahead.
Charlotte Wei -- HSBC -- Analyst
Congratulations on your strong results. Thank you, Stephen and Sisi, for taking my question. Could you please share more color on the growth in different business segments in the second quarter? Thank you.
Sisi Zhao -- Director, Investor Relations
Yes. Actually, yes. You're asking the guidance -- for the guidance color of Q2?
Charlotte Wei -- HSBC -- Analyst
Yes.
Sisi Zhao -- Director, Investor Relations
OK. Yes. Overseas-related business will grow by about over 20%. And domestic test prep university students business grow will be over 30% -- 30%, 35%.
And high school business grow 20%, and the new business will grow over 50%, around 50%.
Charlotte Wei -- HSBC -- Analyst
Thank you, very clear. Thank you.
Operator
Thank you. We'll now take our next question. This is from D.S. Kim from J.P.Morgan.
Please go ahead.
D. S. Kim -- JPMorgan Chase and Company -- Analyst
Hi, Stephen. Hi, Sisi. Thanks for taking my question. I just have a follow-up on all your points that you made on new businesses, if I may.
Do you just say this past quarter, new businesses grew over 56%? Did I hear it correctly? Because from the press release, I think the minor thing about the press release seems to say 49.8% this quarter. So just wanting to double-check if I'm looking -- yes.
Sisi Zhao -- Director, Investor Relations
Yes. Yes, that's the growth for nonacademic tutoring and intelligent learning devices, the over 55%.
D. S. Kim -- JPMorgan Chase and Company -- Analyst
OK. So that means this new educational business initiative have something else as well. May I ask what else is here? And also, can you -- if you could give us the breakdown in terms of the current revenue or last year revenue between nonacademic tutoring versus intelligent and some other house mix within this subsegment?
Sisi Zhao -- Director, Investor Relations
Yes. Actually, every quarter, the contribution is similar. So the nonacademic tutoring is roughly about more than half of the new educational business. And roughly about 1/3 is the intelligent learning device business, and these two are growing faster than the rest, smaller categories.
D. S. Kim -- JPMorgan Chase and Company -- Analyst
And smaller category, if I may, is like book sales, or may I check what else we have here just to double-check?
Sisi Zhao -- Director, Investor Relations
Yes, intelligent books and also some 2B business.
D. S. Kim -- JPMorgan Chase and Company -- Analyst
Got it. Thank you very much. If I may follow up on earlier, you mentioned and kindly gave us a breakdown of the growth momentum for 2Q guidance. Can I double-check whether that was based on U.S.
dollar versus renminbi? And if you could provide the first quarter similar breakdown between a segment growth, if possible, it would be great. Thank you so much, and I'll go back to the queue.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Q1 guidance, just to share about the exchange rates we are using.
Sisi Zhao -- Director, Investor Relations
Yes. We -- I can share with you the exchange rate that we're using for Q1 quarter and the guidance quarter. Is that OK?
D. S. Kim -- JPMorgan Chase and Company -- Analyst
Yes. Earlier growth, was it based on USD? Yes.
Sisi Zhao -- Director, Investor Relations
Yes, Q1 exchange rates is 7.22 and Q2 is 7.08 roughly.
D. S. Kim -- JPMorgan Chase and Company -- Analyst
Thank you very much.
Operator
Thank you. [Operator instructions] This is from the line of Lucy Yu from Bank of America. Please go ahead.
Lucy Yu -- Bank of America Merrill Lynch -- Analyst
Stephen, sorry, just one follow-up on the second-quarter margin. I know that you started at a low season. But if you're looking at the top line, it's still growing at over 25% to 28%, which is not low. So why would -- should we think that the OP margin will decline or contract on a year-over-year basis? Is there any other investments? Are you going to step up or some other reasons? Thank you.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Yes, the Q2 is the low season for all business lines, the overseas related, even for the K-12 business, and the tourism business. We have tiny revenue from the tourism business. So we said that we will suffer the loss of the tourism business in Q2. And so if you saw the numbers, statically, every Q2 every year will be the low margin profile for the whole company.
And yes, as I said, we will open more learning centers in the second half of the last year, but we will still need more time to fill the students into the new learning centers. So -- and I must mention that we are using the conservative approach to give the margin guidance, as always.
Lucy Yu -- Bank of America Merrill Lynch -- Analyst
But I just may follow up that how much loss or margin drag have you sucked in from tourism in the second quarter? Thank you.
Stephen Yang -- Executive Vice President, Chief Financial Officer
I think it's too early to say that, but it is still the margin drag. And also, we spent some more expenses in the marketing and in the coming Q2. But I think we will -- yes, as you said, we spent more money on the margin in Q1, but we started to control the market expenses in Q2. We are still in the process.
And so that's why we guided the margin tiny pressure in Q2. But we expect we will do better than we expected margin-wise in Q2.
Lucy Yu -- Bank of America Merrill Lynch -- Analyst
Understood, Stephen. So let's put this way. So if we -- excluding East Buy, if we -- excluding cultural tourism, will the ramp of revenue -- rest of the business still see margin contraction in second quarter?
Stephen Yang -- Executive Vice President, Chief Financial Officer
Yes, I think so. I think the -- if you take out the impact of the tourism business, I think the margin will be better than the overall company margin profile, except for East Buy. We don't give the guidance of the East Buy by top-line growth in the market.
Lucy Yu -- Bank of America Merrill Lynch -- Analyst
Understood. Thank you so much.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Thank you, Lucy.
Operator
Thank you. I'll now take our next question. This is from Timothy Zhao from Goldman Sachs. Please go ahead.
Timothy Zhao -- Goldman Sachs -- Analyst
Great. Thank you, Stephen and Sisi. So I think a follow-up question on East Buy. I think one is I think your revenue guidance.
I think there was a transaction between EDU parent company and the East Buy regarding the East Buy education previously. Just wondering in your guidance, for the EDU core, basically the EDU educational services, does that include East Buy's previous education business? And secondly, I think for East Buy, I think the implied revenue for East Buy dropped quite significantly on a Q-on-Q basis. Just wondering if you can elaborate what is the background or the rationale behind that, and how should we think about the revenue going forward? Thank you.
Stephen Yang -- Executive Vice President, Chief Financial Officer
The guidance of Q2 top-line growth in the range of 25% to 28% is the core education business, except for East Buy. OK. And I'm very glad to hear from you about the question of East Buy. But I'm afraid I'm unable to share the latest financial results of the East Buy details.
They will announce their half-year report in the next quarter. So next quarter, I think we -- both party, the parent company and East Buy will announce the East Buy financial status in more detail next quarter.
Timothy Zhao -- Goldman Sachs -- Analyst
Sure, sure. So just to clarify on the guidance, I think if you look at East Buy previous half-year financials for their education business, which is now part of your core business, is around like $30 million, $40 million per quarter. Just wondering when you talk about the guidance for EDU core education business. So when you look at it on a year-on-year basis, the last year number for your core education business, that also includes the East Buy education business.
Right?
Sisi Zhao -- Director, Investor Relations
Yes, correct, Timothy. Your understanding is totally correct. So when we gave guidance, we do apple-to-apple comparison, so both the comparison quarter and the guidance quarter both includes the educational portion of the service business. Is that clear?
Timothy Zhao -- Goldman Sachs -- Analyst
Yes, thank you. Thank you, Sisi. Thank you, Stephen.
Operator
Thank you. We'll now take our next question. This is from D.S. Kim from J.P.Morgan.
Please go ahead.
D. S. Kim -- JPMorgan Chase and Company -- Analyst
Hello, sir. Hi, Stephen. Sorry, I didn't mean to beat a dead horse here. But some investors who are asking me just now on this, I thought it would be better to clarify things on new businesses again.
Sorry. Just to be clear, when you earlier commented that next-quarter growth guidance of new businesses of over 50%, did you mean to include other smaller business or only nonacademic and intelligent learning devices, i.e., if you compare that 50% or over 50% growth next quarter, how does that number look for this quarter? And then similarly, for high school businesses, we expected 20% growth as you said next quarter. How was the growth this quarter? Would you be able to comment on that? Sorry for redundant question.
Sisi Zhao -- Director, Investor Relations
Yes. To make it clear, for Q2 guidance, for overall new initiatives, new educational initiatives, including all the things, so -- together is around 45%, 46% growth. And if you only look at non-academic tutoring and intelligent learning device, the two key ones, the growth is over 50%. OK? And the high school business Q1 growth is about 20%, 20% to 21%.
D. S. Kim -- JPMorgan Chase and Company -- Analyst
That's very clear. So about 5% -- 4% to 5% deceleration for the new businesses in terms of apples to apples, which I think is pretty great given that the base got -- the comps got much tougher. So thank you for the clarification.
Operator
Thank you. We are now approaching the end of the conference call. I will now turn the call over to New Oriental's executive president and CFO, Stephen Yang, for his closing remarks.
Stephen Yang -- Executive Vice President, Chief Financial Officer
Thank you again for joining us on today. If you have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you.
Operator
Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.
Duration: 0 minutes
Call participants:
Sisi Zhao -- Director, Investor Relations
Stephen Yang -- Executive Vice President, Chief Financial Officer
Felix Liu -- UBS -- Analyst
Alice Cai -- Citi -- Analyst
Yiwen Zhang -- China Renaissance Securities -- Analyst
Lucy Yu -- Bank of America Merrill Lynch -- Analyst
Timothy Zhao -- Goldman Sachs -- Analyst
Charlotte Wei -- HSBC -- Analyst
D. S. Kim -- JPMorgan Chase and Company -- Analyst
This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.
The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
New Oriental Education & Technology Group (EDU) Q1 2025 Earnings Call Transcript was originally published by The Motley Fool