EDU drops after Q3 results as investors digest higher costs and fresh FY2026 outlook
New Oriental Education (EDU) is sliding after reporting fiscal Q3 2026 results and issuing updated outlook, prompting a post-earnings repositioning. The company reported Q3 net revenue of $1.417B (+19.8% YoY) and raised FY2026 revenue guidance to $5.561B–$5.599B.
1. What’s moving the stock today
New Oriental Education (EDU) is moving lower in the latest session as the market digests the company’s newly released fiscal third-quarter results (quarter ended February 28, 2026) and updated outlook issued on April 22, 2026. Despite strong year-over-year growth in revenue and profit, the stock’s decline points to a “post-earnings reset,” with traders focusing on the mix of growth versus cost trends and what’s already priced in.
2. The headline numbers investors are reacting to
For fiscal Q3 2026, New Oriental reported total net revenues of $1.4173 billion, up 19.8% year over year. Operating income rose 44.8% to $180.3 million and net income attributable to the company increased 45.3% to $126.8 million; non-GAAP diluted net income per ADS was $0.95. Management also guided fiscal Q4 2026 revenue to $1.4296 billion–$1.4669 billion (15%–18% year-over-year growth) and raised full-year FY2026 revenue guidance to $5.5614 billion–$5.5987 billion. �citeturn2view1turn2view0
3. The pressure points: expenses, cash flow, and “sell-the-news”
Even with accelerating growth, investors are also weighing expense intensity. In Q3, cost of revenues increased 23.4% year over year to $656.2 million, while selling and marketing expense increased 9.1% to $198.8 million and general and administrative expense increased 10.8% to $382.1 million; share-based compensation rose 30.9% to $21.1 million. The quarter also showed a net operating cash outflow of about $7.5 million and capital expenditures of $68.8 million, data points that can amplify a cautious tape reaction when the stock has been bid up into results. �citeturn2view1
4. Shareholder returns and what to watch next
Alongside results, New Oriental highlighted ongoing shareholder return actions. The company has a $300 million repurchase program for fiscal 2026 and, as of April 21, 2026, had repurchased about 3.3 million ADSs for roughly $184.3 million; it also approved a second dividend installment tied to fiscal 2026 of $0.60 per ADS with a May 15, 2026 record date. Next catalysts include follow-through on the Q4 revenue trajectory and whether expense growth moderates enough to sustain margin expansion as the company scales its mix of overseas test prep, domestic adult learning, and newer education initiatives. �citeturn2view0turn2view1