TAL Education Group Announces Unaudited Financial Results for the Second Fiscal Quarter Ended August 31, 2026, Declares Cash Dividend and Issues Notice of Annual General Meeting

BEIJING, Oct. 29, 2026 /PRNewswire/ -- TAL Education Group (NYSE: TAL) ("TAL" or the "Company"), a smart learning solutions provider in China, today announced its unaudited financial results for the second quarter of fiscal year 2027 ended August 31, 2026 and issued notice of Annual General Meeting.

Highlights for the Second Quarter of Fiscal Year 2027

- Net revenues were US$994.6 million, compared to net revenues of US$861.4 million in the same period of the prior year.

- Income from operations was US$235.9 million, compared to income from operations of US$96.1 million in the same period of the prior year.

- Non-GAAP income from operations, which excluded share-based compensation expenses, was US$247.7 million, compared to non-GAAP income from operations of US$107.8 million in the same period of the prior year.

- Net loss attributable to TAL was US$47.4 million, compared to net income attributable to TAL of US$124.1 million in the same period of the prior year.

- Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$35.6 million, compared to non-GAAP net income attributable to TAL of US$135.8 million in the same period of the prior year.

- Basic and diluted net loss per American Depositary Share ("ADS") were both US$0.09. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.06. Three ADSs represent one Class A common share.

- Cash, cash equivalents and short-term investments totaled US$2,748.5 million as of August 31, 2026, compared to US$3,239.3 million as of February 28, 2026.

Highlights for the Six Months Ended August 31, 2026

- Net revenues were US$1,753.0 million, compared to net revenues of US$1,436.4 million in the same period of the prior year.

- Income from operations was US$373.1 million, compared to income from operations of US$110.4 million in the same period of the prior year.

- Non-GAAP income from operations, which excluded share-based compensation expenses, was US$396.4 million, compared to non-GAAP income from operations of US$133.0 million in the same period of the prior year.

- Net income attributable to TAL was US$360.6 million, compared to net income attributable to TAL of US$155.4 million in the same period of the prior year.

- Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$383.9 million, compared to non-GAAP net income attributable to TAL of US$177.9 million in the same period of the prior year.

- Basic and diluted net income per ADS were both US$0.65. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.69.

Financial DataââSecond Quarter and First Six Months of Fiscal Year 2027

(In US$ thousands, except per ADS data and percentages)

"In the second quarter of fiscal year 2027, we delivered steady revenue growth and continued to improve operational efficiency," said Alex Peng, TAL's President and Chief Financial Officer. "Our focus remains on strengthening our core businesses and delivering better learning experiences for students."

Mr. Peng added, "Looking ahead, we will continue to combine our educational expertise with technology to better serve students and create long-term value."

Financial Results for the Second Quarter of Fiscal Year 2027

Net Revenues

In the second quarter of fiscal year 2027, TAL reported net revenues of US$994.6 million, representing a 15.5% increase from US$861.4 million in the second quarter of fiscal year 2026.

Operating Costs and Expenses

In the second quarter of fiscal year 2027, operating costs and expenses were US$758.8 million, representing a 0.8% decrease from US$765.3 million in the second quarter of fiscal year 2026. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$747.0 million, representing a 0.9% decrease from US$753.5 million in the second quarter of fiscal year 2026.

Cost of revenues increased by 8.0% to US$400.0 million from US$370.3 million in the second quarter of fiscal year 2026. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 8.0% to US$399.5 million, from US$369.8 million in the second quarter of fiscal year 2026.

Selling and marketing expenses decreased by 15.3% to US$226.4 million from US$267.3 million in the second quarter of fiscal year 2026. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 15.6% to US$223.3 million, from US$264.4 million in the second quarter of fiscal year 2026.

General and administrative expenses increased by 3.7% to US$132.4 million from US$127.6 million in the second quarter of fiscal year 2026. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 4.1% to US$124.2 million, from US$119.3 million in the second quarter of fiscal year 2026.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 0.7% to US$11.8 million in the second quarter of fiscal year 2027 from US$11.8 million in the same period of fiscal year 2026.

Gross Profit

Gross profit increased by 21.1% to US$594.6 million from US$491.0 million in the second quarter of fiscal year 2026. The gross margin for the second quarter of fiscal year 2027 was 59.8%, compared to 57.0% in the same period of the prior year.

Income from Operations

Income from operations was US$235.9 million in the second quarter of fiscal year 2027, compared to income from operations of US$96.1 million in the second quarter of fiscal year 2026. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$247.7 million, compared to Non-GAAP income from operations of US$107.8 million in the same period of the prior year.

Other Income/(Expense)

Other expense was US$189.7 million for the second quarter of fiscal year 2027, compared to other income of US$67.1 million in the second quarter of fiscal year 2026. The change in other income/(expense) for the second quarter was mainly driven by fluctuations in the fair value of certain investments.

Income Tax Expense

Income tax expense was US$135.9 million in the second quarter of fiscal year 2027, compared to US$51.1 million of income tax expense in the second quarter of fiscal year 2026. The increase in income tax expense was mainly due to changes in deferred tax liabilities relating to withholding tax.

Net Income/(Loss) Attributable to TAL Education Group

Net loss attributable to TAL was US$47.4 million in the second quarter of fiscal year 2027, compared to net income attributable to TAL of US$124.1 million in the second quarter of fiscal year 2026. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$35.6 million, compared to Non-GAAP net income attributable to TAL of US$135.8 million in the second quarter of fiscal year 2026.

Basic and Diluted Net Income/(Loss) per ADS

Basic and diluted net loss per ADS were both US$0.09 in the second quarter of fiscal year 2027. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.06 in the second quarter of fiscal year 2027.

Cash Flow

Net cash used in operating activities for the second quarter of fiscal year 2027 was US$179.1 million.

Cash, Cash Equivalents, and Short-term Investments

As of August 31, 2026, the Company had US$1,952.6 million of cash and cash equivalents and US$795.9 million of short-term investments, compared to US$1,523.9 million of cash and cash equivalents and US$1,715.4 million of short-term investments as of February 28, 2026.

Deferred Revenue

As of August 31, 2026, the Company's deferred revenue balance was US$930.4 million, compared to US$882.2 million as of February 28, 2026.

Financial Results for the First Six Months of Fiscal Year 2027

Net Revenues

For the first six months of fiscal year 2027, TAL reported net revenues of US$1,753.0 million, representing a 22.0% increase from US$1,436.4 million in the first six months of fiscal year 2026.

Operating Costs and Expenses

In the first six months of fiscal year 2027, operating costs and expenses were US$1,380.0 million, representing a 4.1% increase from US$1,325.9 million in the first six months of fiscal year 2026. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$1,356.6 million, representing a 4.1% increase from US$1,303.4 million in the first six months of fiscal year 2026.

Cost of revenues increased by 14.3% to US$720.2 million from US$629.9 million in the first six months of fiscal year 2026. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 14.4% to US$719.2 million from US$628.8 million in the first six months of fiscal year 2026.

Selling and marketing expenses decreased by 11.1% to US$398.4 million from US$448.1 million in the first six months of fiscal year 2026. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 11.2% to US$392.6 million from US$442.1 million in the first six months of fiscal year 2026.

General and administrative expenses increased by 5.4% to US$261.3 million from US$247.9 million in the first six months of fiscal year 2026. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 5.3% to US$244.9 million from US$232.5 million in the first six months of fiscal year 2026.

Total share-based compensation expenses allocated to the related operating costs and expenses increased by 3.8% to US$23.4 million in the first six months of fiscal year 2027 from US$22.5 million in the same period of fiscal year 2026.

Gross Profit

Gross profit increased by 28.1% to US$1,032.