TAL Education (NYSE:TAL) held its fourth-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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Access the full call at https://event.choruscall.com/mediaframe/webcast.html?webcastid=Rt2sc3t1
Summary
TAL Education reported a significant year-over-year revenue increase of 31.5% in USD, reaching US$802.4 million in the fourth quarter of fiscal year 2026.
The company has expanded its learning services and content solutions, focusing on integrating technology to enhance user experience and engagement.
Profitability has improved with a non-GAAP net income of US$254.5 million for the quarter, highlighting efficient operations and a strong foundation for sustainable growth.
The learning device business achieved revenue growth, launching the X5 Ultra to enhance at-home learning with AI capabilities.
Future strategies include disciplined network expansion, leveraging AI, and maintaining operational efficiency to drive quality growth and profitability.
Full Transcript
OPERATOR
Ladies and gentlemen, good day and thank you for standing by. Welcome to TAL Education Group’s fourth quarter and fiscal year 2026 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press Star then one on a touch tone phone. To withdraw your question, please press Star then two. Please be informed today’s conference is being recorded. I would like to hand the conference over to Ms. Fang Liu, Investor Relations Director. Thank you. Please go ahead.
Fang Liu (Investor Relations Director)
Thank you all for joining us today for TAL Education Group fourth quarter and fiscal year 2026 earnings conference call. The earnings release was distributed earlier today and you may find a copy on the company’s IR website or through the news wires. During this call you will hear from Mr. Alex Peng, President and Chief Financial Officer, and Ms. Jackson Ding, Deputy Chief Financial Officer. Following the prepared remarks, Mr. Peng and Ms. Ding will be available to answer your questions. Before we continue, please note that today’s discussions 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 are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC. For more information about these risks and uncertainties, please refer to our filings with the SEC. Also, our earnings release and this call include discussions of certain non GAAP financial measures. Please refer to our earnings release which contains a reconciliation of the non GAAP measures to the most directly comparable GAAP measures. I would like to turn the call over to Mr. Alex Peng. Alex, please go ahead.
Alex Peng (President and Chief Financial Officer)
Thank you Fang Liu and thanks to all of you for joining today’s conference call. As we reflect on fiscal year 2026, it is worth stepping back to consider the progress we’ve made over the past several years. That progress has been built on more than two decades of experience in education, along with continued investment in our capabilities and innovation. Together, these efforts have enabled us to continuously refine our offerings and better serve the evolving needs of students and society. So, with that context in mind, let me now turn to our Learning Services business. Learning Services Business remains our largest revenue contributor. We are committed to delivering quality learning service experiences to our user base. We’re also building our Content Solutions business, including learning devices. These products significantly extend the accessibility and customer reach of our proprietary and third party content. They work alongside our learning services to create a more integrated learning experience, driving longer, deeper and stronger user engagement. Beyond our domestic operations, we also expanded into select international markets leveraging our R and D capabilities and operational know how to serve educational needs globally. While our businesses are at different stages of maturity, we are beginning to see meaningful improvement in company level profitability. This underscores our ability to optimize core operations and build a more efficient operating model, further strengthening our foundation for sustainable growth and long term value creation. So with that overview, let me walk you through our business Progress for the fourth fiscal quarter and full year 2026. Our offline PAYO enrichment programs demonstrated continued year over year growth in both the fourth quarter and the full fiscal year. Throughout the past year, we maintained a disciplined and consistent approach to expanding our offline learning center network with a strong focus on service quality, operational health and sustainable growth. Our expansion decisions are guided by a holistic assessment of factors including local market demand, receptivity to our offerings, our operational capabilities and our commitment to maintaining high service quality. This approach supported solid growth and healthy operating performance throughout fiscal year 2026 in our online enrichment learning business. We continue to enhance user experience and service quality through technology. During the fourth quarter and throughout fiscal year 2026, we upgraded key products with richer content and technology enabled features creating a more engaging learning experience. Together, these efforts strengthened the value proposition of our online enrichment offerings and supported sustained user growth and user engagement over time. Our learning device business achieved year over year revenue growth this quarter. In the last couple of quarters, this business has transitioned from its rapid expansion phase toward more moderate growth. We believe product quality and go to market capabilities will be critical to this business long term success. In March 2026 we introduced the X5 Ultra Classic, a device incorporating enriched content and upgraded AI capabilities. With the X5 Ultra now integrated into our learning devices port portfolio, we are positioned to address a broader spectrum of at home self directed learning needs as we expand our install base. Our key user engagement metrics remain Strong with around 80% weekly active users and an average daily active usage time of about one hour per device. This allows us to serve customers beyond our physical presence and enhance at home engagement. Next, let me turn to our financial performance for the quarter. In the fourth quarter our net revenues were US$802.4 million or 5,590,000,000 RMB, representing a year over year increase of 31.5% and 25.8% in US dollar and RMB terms respectively. Our non GAAP income from operations was US$82.2 million and non GAAP net income attributable to CAL reached US$254.5 million for the quarter. I will now hand the call over to Jackson who will provide an update on the operational developments across our four business lines and a review of our financial results for the fiscal fourth quarter. Jackson over to you.
Jackson Ding (Deputy Chief Financial Officer)
Thank you Alex. I am pleased to update you on our progress during the fourth fiscal quarter and full year across all core business lines. Our PAYO Small Cost Enrichment programs continued its operational momentum during this quarter. As we grow, we continue to uphold our service quality and operational efficiency in terms of physical footprint. We expanded our learning center network at a measured pace. Our operational discipline is reflected in our key performance indicators, with PAYO small cost maintaining a generally stable retention rate of around 80% across fiscal year 2026 with certain quarters exceeding that level. Turning to our online enrichment learning business, we continue to leverage technology to enhance the student learning experience. A core focus remains deepening student engagement to drive meaningful learning outcome. To that end, we have driven engagement through interactive formats such as immersive online classrooms and role playing activities. By offering both offline and online enrichment programs, we aim to address the evolving needs of students and support their holistic development. Next Our learning devices business delivered year over year growth in the fourth quarter as well as the full fiscal year. This reflects our progress in product development and go to market execution. Over the past year. We have also broadened our content library and incorporated AI driven features to support a more engaging and effective self directed learning experience. As Alex mentioned, last month we launched the X5 Ultra. This device expands our pricing points while offering more content, a unified learning interface and improved AI tools, among them the upgraded AI thinke 101 Turing feature. To complement these upgrades, we’ve also improved the hardware. The X5 Ultra includes a faster processor and a 13.2-inch eye comfort display, ensuring solid performance across different learning activities. While technology itself is important, we believe the true value lies in how it integrates curriculum aligned content, scenario based AI and seamless hardware into a cohesive learning system, one that is intended to be more intuitive and practical for students. By organizing fragmented learning materials and …
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