Earnings call transcript: Bright Scholar Q2 2025 sees revenue dip, stock rises

Bright Scholar Education Holdings Ltd (BEDU) reported its Q2 2025 earnings, revealing a decrease in revenue but notable improvements in net income. Despite the revenue drop, the company’s stock surged by 3.89% in recent trading, reflecting positive investor sentiment. According to InvestingPro data, the company currently has a market capitalization of $51.72 million, with an EBITDA of $10.87 million in the last twelve months.

Key Takeaways

• Revenue decreased to $43.8 million from $48.5 million year-over-year.
• Net income significantly increased to RMB 3.2 million from RMB 0.3 million.
• Stock price rose by 3.89% following the earnings announcement.
• Significant reduction of 30.7% in SG&A expenses.
• Strong university placements, including 100% acceptance rates at top institutions.

Company Performance

Bright Scholar’s Q2 2025 performance showcased a mixed picture, with revenue declining but profitability metrics improving. InvestingPro analysis reveals concerning trends, with revenue declining by 92.04% over the last twelve months and a current ratio of 0.68, indicating potential liquidity challenges. The company maintained its focus on premium international education, which continues to be in high demand. The stable enrollment figures and increased revenue per enrollment at U.S. schools indicate operational efficiency and strong market positioning.

Financial Highlights

• Revenue: $43.8 million, down from $48.5 million YoY.
• Gross Profit: $13.2 million, down from $15 million YoY.
• Gross Margin: 30%, a slight decrease from 30.8%.
• Net Income: RMB 3.2 million, up from RMB 0.3 million.
• Adjusted Net Income: Grew 179.5% to RMB 2.5 million.

Market Reaction

Bright Scholar’s stock price increased by 3.89% to $1.73 following the earnings release. This rise reflects investor optimism, likely driven by the company’s improved net income and strategic cost reductions. The stock remains within its 52-week range, having recently traded between $1.35 and $2.19. InvestingPro subscribers have access to exclusive Fair Value analysis and 7 additional ProTips that could help evaluate BEDU’s investment potential. Get deeper insights with the comprehensive Pro Research Report, available for over 1,400 US stocks.

Outlook & Guidance

The company is optimistic about its long-term growth, focusing on expanding its school business and global recruitment initiatives. Bright Scholar aims to maintain its operational efficiency and continue leveraging its strong position in the premium international education market.

Executive Commentary

CEO Robert Niu stated, "We are well positioned to accelerate revenue growth and create lasting value," highlighting the company’s strategic direction. CFO Cindy Zhang emphasized the success of cost optimization initiatives, noting a 30.7% reduction in SG&A expenses.

Risks and Challenges

• Revenue decline amid competitive market pressures.
• Potential volatility in international education demand.
• Economic uncertainties affecting student enrollment.
• Regulatory changes in key markets.
• Currency fluctuations impacting financial results.

Q&A

No questions were asked during the Q&A session, indicating a comprehensive presentation and possibly a lack of immediate concerns from analysts.

Full transcript - Bright Scholar Education Holdings Ltd Class A (BEDU) Q2 2025:

Conference Operator: Hello, ladies and gentlemen. Thank you for standing by for Bright Scholar’s Second Quarter of Fiscal Year twenty twenty five Earnings Conference Call. At this time, all participants are in listen only mode. After management’s remarks, there will be a question and answer session. Today’s conference call is being recorded.

I will now turn the call over to your host from Piacente Financial Communications, Andrea Guo, IR Counsel for the company. Please go ahead, Andrea.

Andrea Guo, IR Counsel, Piacente Financial Communications: Thank you very much. Hello, everyone, and welcome to Brand Scholar’s earnings conference call for the second quarter of fiscal twenty twenty five. The company’s financial and operational results were released earlier today and are available online by visiting the IR section of Bright Scholar’s website at ir.brethscholar.com. Please note that today’s discussion 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. As such, the company’s results may materially differ from today’s views. Further information regarding these and other risks and uncertainties is included in the company’s prospectus and other public filings as filed with the U. S.

SEC. The company does not assume any obligation to update any forward looking statements except as required under applicable law. Additionally, Scholar’s earnings press release and this conference call include a discussion of unaudited GAAP and non GAAP financial measures. Breast Scholar’s earnings press release contains a reconciliation of the unaudited non GAAP measures. Please also note that all numbers are in GBP.

Participants on today’s call will include Bright Solar’s Chief Executive Officer, Mr. Robert Niu, who will provide a company overview and update on strategic initiatives with highlights from the quarter. The company’s Chief Financial Officer, Ms. Cindy Zhang, will then provide details on the financial results for the period. We will then open the call for questions.

I will now turn the call over to Brasscono’s Chief Executive Officer, Mr. Robert Liu. Please go ahead, sir.

Robert Niu, Chief Executive Officer, Bright Scholar: Hello, everyone, and thank you for joining us on today’s call. We are pleased to report that YSCOLA delivered solid Q2 quarterly results, demonstrating our resilience in an evolving external environment. During the quarter, we made meaningful progress executing our dual engine growth strategy. Under this plan’s dedicated initiatives, we expanded our school’s business and advanced our global recruitment efforts for international students. As a result, our school’s business remained consistent with the total enrollment holding steady year over year at 2,699 students as of 03/31/2025.

Moreover, we also received strong 14.2% year over year improvement in revenue per enrollment at our U. S. Schools in this fiscal quarter. Meanwhile, our global recruitment initiatives maintained strong momentum across existing markets, building a sustainable pipeline for expansion. As a leader in premium international education, we remain committed to delivering exceptional learning experience while enhancing operational efficiency and growing our global footprint to drive sustainable long term value.

Importantly, we’ve made significant strides in optimizing operations, achieving year over year reductions in SG and A expenses. With our established global network and the ecosystem, we are well positioned to accelerate revenue growth and create lasting value for both customers and shareholders over the long term. The schools business remained our primary revenue source this quarter, accounting for around 61% of our total revenue. Despite macroeconomic headwinds, including the impact of VAT policies in The UK, stable student enrollment year over year demonstrates the resilience of our diversified portfolio by optimizing operational efficiency and maintaining rigorous academic standards with mitigated external pressures while continuing to deliver high quality education. During the quarter, our U.

S. Schools set new benchmarks for excellence by delivering outstanding results across both academic and extracurricular domains. On the academic front, our Cass Academy Boston students have already secured over 100 acceptance from 12 TA universities around across The U. S, Canada, and The UK, with more expected as the admission cycle continues through May 2025. This early success underscores the strength of our college prep programs beyond academics.

We are equally proud of our students’ remarkable achievements in athletics. I’m also delighted to share our own Boston Student Athlete. Dylan Harrow, was named as the Gatorade Massachusetts Boys Basketball Player of the Year for the second consecutive year. This honor has previously been awarded to legends like LeBron James and Jason Tatum. And they recognize Jalen’s unparalleled talents, academic dedication and community leadership.

Back to back wins are exceptionally rare to maintain Cas Boston as a hub for nurturing future champions. Furthermore, our Cas Boston Academy has been ranked number five nationally in the 2024 to 2025 prep programs ranking by NEprepbasketball.net, further validating our leadership in combining elite athletic programs with world class education. Together, these achievements underscore the significant progress we’ve made in our U. S. Schools business this quarter and how we are fulfilling our mission to develop well rounded global citizens.

In The UK, our schools have delivered exceptional university placement results that solidify Bright Scholar’s reputation as a premium pathway to global higher education. Across our UK boarding schools, students have received offers from eight of the top 10 UK universities according to QS ’20 ’20 ’5 ranking. Including prestigious institutions like Cambridge, UCL, and Imperial College in London, a significant cohort of our students has also earned offers from top 100 global universities with applications extending across Europe, Asia, and The United States. What makes these results particularly remarkable are the pleasant records we have achieved at specific schools. At the Michaels, we maintained a flawless 100% Cambridge acceptance rate this year with all three interviewed students securing admission invitation.

Similarly, CASCambridge has now achieved 100% Russell Group University offers for its A level students for two consecutive years, marking an exceptional marking an extraordinary accomplishment that puts our students in the company of The UK’s academic elite. These outstanding outcomes not only demonstrate our consistent ability to prepare students for the world’s most competitive universities, but also validates our position as a truly global education provider capable of opening doors to top institutions across continents. In addition, our global recruitment efforts gained further traction across key markets, enhancing our pipeline for future growth. Early indicators show strong demand for our programs, particularly in markets valuing our Western curricula and university pathways. We’re also leveraging our partnership with local institutions to amplify our presence, ensuring sustainable growth in new geographies.

Looking ahead, while I spoke, we remain focused on executing our dual engine growth strategy to drive excellence in our school business while expanding our global footprint in recruitment to serve more students planning to study abroad. Our strong academic results, coupled with operational resilience, position us to capitalize on the growing demand for premier international education. We are confident in our ability to deliver stronger value stronger long term value to students, families and shareholders alike. With that, I will turn the call over to our CFO, Ms. Cindy Zhang, who will discuss our key financial results.

Please go ahead, Cindy.

Cindy Zhang, Chief Financial Officer, Bright Scholar: Thank you, Robert. Now I’d like to discuss our financial results for the second quarter of fiscal twenty twenty five. Please note all amounts are in GDP unless otherwise stated. We are pleased to report a strong financial performance in Q2 fiscal year twenty twenty five marked by significant improvements in profitability and operational efficiency. While maintaining stable year over year revenue, we achieved a 6.2% increase in our overseas study consultant business revenue demonstrating the resilience of our diversified model.

Amidst ongoing external challenges, we successfully reinforced the reliance of our global with our school business while making sustainable operation improvements. Our focused cost optimization initiatives drove a 30.7% reduction in SG and A expenses year over year and improved the SG and A to revenue ratio by 1.2 percentage points. Notably, our net income from continuing operations increased by over 2,000 percentage year over year. Looking at our financial results for the second fiscal quarter in more detail. Our revenue from continuing operations was $43,800,000 compared with $48,500,000 for the same quarter last fiscal year.

By segment, our overseas study consulting revenue increased by 6.2% to RMB11.9 million. Schools and other revenues were $26,600,000 and $5,300,000 respectively. Gross profit from continuing operations was $13,200,000 compared to $15,000,000 for the same quarter last fiscal year. Gross margin from continuing operations was 30% compared with 30.8% for the same quarter last fiscal year. Adjusted gross profit from continuing operations was million compared with RMB15.1 million for the same quarter last fiscal year.

SG and A expenses from continuing operations decreased by 13.7% year over year to million. The decrease was mainly due to the improvement in operational efficiency in our steel businesses. Adjusted EBITDA was RMB3.1 million compared with RMB3.6 million for the same quarter last fiscal year. Now turning to profitability, we recorded a net income of RMB3.2 million increased from RMB0.3 million for the same quarter last fiscal year. Adjusted net income grew by 179.5% to RMB2.5 million compared to RMB1.3 million for the same quarter last fiscal year.

Moving to our balance sheet, as of 02/28/2025, we had cash and cash equivalents and restricted cash of million compared with million as of August as of the end of last fiscal year. In conclude, our second fiscal quarter performance is in line with our expectations. Our proven academic outcomes combined with strategic expansion reinforce our confidence in delivering sustainable long term growth. We remain committed to empowering students worldwide and creating values for all stakeholders. Okay, this concludes all our prepared remarks today.

We will now open the call to questions. Operator,

Conference Operator: Seeing that there are no questions, this concludes our question and answer session. I would like to turn the conference back over to Andrea Guo for any closing remarks.

Andrea Guo, IR Counsel, Piacente Financial Communications: Thank you once again for joining us today. If you have further questions, please feel free to contact Breast Scholar’s Investor Relations through the contact information provided on our website.

Conference Operator: This concludes this conference call. You may now disconnect your line. Thank you.

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