Earnings call transcript: TAL Education Q2 2025 sees strong revenue growth

TAL Education Group reported robust financial results for the second quarter of 2025, with net revenues soaring by 39.1% year-over-year to $861.4 million. The company also reported a non-GAAP net income of $135.8 million. Despite the absence of specific earnings forecasts, the market responded positively, with the stock price increasing by 4.69% following the announcement. Currently trading at $12.03, TAL appears undervalued according to InvestingPro Fair Value estimates. The company remains focused on sustainable long-term growth and innovation in the educational sector.

Key Takeaways

• TAL Education’s revenue increased by 39.1% year-over-year.
• The company launched new AI-powered educational products.
• Stock price rose by 4.69% following the earnings announcement.
• TAL maintains a strong cash position with $1.54 billion in cash and equivalents.

Company Performance

TAL Education Group demonstrated significant growth in Q2 2025, driven by strong demand for its innovative educational products and services. With a focus on AI-driven learning solutions, the company continues to expand its market presence. The revenue growth of 39.1% compared to the same quarter last year highlights the company’s effective strategy in capturing market share in the fragmented education sector.

Financial Highlights

• Revenue: $861.4 million, up 39.1% year-over-year
• Non-GAAP income from operations: $107.8 million
• Non-GAAP net income: $135.8 million
• Gross margin: 57.0%, up from 56.3%
• Cash and equivalents: $1.54 billion
• Short-term investments: $1.71 billion

Outlook & Guidance

Looking forward, TAL Education is prioritizing sustainable long-term growth and plans to continue investing in content and technology. The company anticipates a gradual tapering in revenue growth for its PAYU Small Class segment, while its learning devices business remains in the early stages of development. Margin performance may fluctuate as TAL invests in new initiatives.

Executive Commentary

Alex Peng, President and CFO, emphasized the company’s commitment to long-term growth, stating, "Building our business is analogous to nurturing a tree. It demands patience, long-term commitment, and careful cultivation." He also highlighted the company’s goal of delivering transformative learning solutions to empower students.

Risks and Challenges

• Competitive pressure in the learning devices market could affect margins.
• Fluctuations in margin performance due to new initiatives.
• Potential market saturation in certain educational segments.
• Macroeconomic factors that could impact consumer spending on education.

Q&A

During the earnings call, analysts inquired about TAL’s learning device sales volumes and average selling prices (ASP). The company’s share repurchase strategy and business line performance were also discussed, providing insights into TAL’s growth expectations and strategic priorities.

Full transcript - Petrotal Corp (TAL) Q2 2026:

Conference Call Operator: Ladies and gentlemen, good day and thank you for standing by. Welcome to TAL Education Group’s Fiscal 2026 Second Quarter Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker’s presentation, there will be a question and answer session. Please be informed that today’s conference is being recorded. I would now like to hand the conference over to Ms. Fang Liu, Investor Relations Director. Thank you. Please go ahead.

Fang Liu, Investor Relations Director, TAL Education Group: Thank you all for joining us today for TAL Education Group’s second quarter fiscal year 2026 earnings conference call. The earnings release was distributed earlier today and you may find a copy on the company IR website or through the newsletters. During this call you will hear from Mr. Alex Peng, President and Chief Financial Officer, and Mr. Jackson Ding, Deputy Chief Financial Officer. Following the prepared remarks, Mr. Peng and Mr. 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’d like to turn the call over to Mr. Alex Peng. Alex, please go ahead.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Thank you, Fang, and thank all of you for participating in today’s conference call. Over the past years, our focus has been on driving the holistic development of our students. We have consistently invested in products and service enhancements to deliver a quality learning experience while integrating cutting-edge technologies to fuel innovation and advanced learning models. These initiatives have built a solid foundation for long-term sustainable growth. While we are encouraged by this momentum, we recognize the dynamic and competitive landscape. The learning devices market faces escalating competition, and AI-driven learning products continue to reshape education at an impressive pace. In navigating these opportunities, we embrace a long-term approach aimed at fortifying our competitive moats and ensuring sustained value creation for both our users and the society. Building our business is analogous to nurturing a tree. It demands patience, long-term commitment, and careful cultivation.

Because some of our strategic initiatives are still in early stages, they require ongoing investment. Consequently, we may face occasional variability and limited visibility in our financial performance due to seasonal demand shifts, competitive pressures, and deliberate resource reallocation. While these factors may cause short-term fluctuations, we remain focused on building the long-term capabilities needed to seize the opportunities in the market. I will now provide detailed updates starting with our second quarter FY2026 performance. Our learning services achieved growth this quarter with both our offline PAYU Small Class Enrichment Programs and online enrichment offerings increasing year over year. This underscores our commitment to providing quality learning experiences while expanding our operational capacity. We are continuing to take a disciplined approach in managing our PAYU Learning center network.

Focusing on long-term sustainability, we evaluate factors such as local market demand, user acceptance of our products, and our operational capabilities and efficiency to ensure service quality. The effectiveness of this approach is reflected in the positive user feedback and key operating metrics such as retention rates for online enrichment learning. We continuously optimize our services and expand our offerings by launching new programs tailored to diverse user groups. These initiatives aim to provide engaging and interactive experiences, improve learning outcomes, and ultimately create value for our users. At the same time, we’ve embraced a technology-focused approach to adapt to the evolving market landscape of the online learning sector. Guided by our strategic objectives, we’ve continued to integrate updated features like interactive sessions, personalized guidance, and real-time feedback to improve user engagement. These enhancements have made the learning experience more immersive and effective.

The positive feedback we’ve received from both students and parents has underscored the value of our technology-focused approach. Alongside our learning, we are advancing our content solutions. Learning devices are a key component of the strategy, offering potential for integrating AI technology into education. Enhancing product capabilities is essential for developing this business. In response to a fast-changing and highly competitive market, we’re continuously refining our product design, innovating functionality, and expanding our offerings. We’re also dynamically adjusting our business strategies to maintain agile and well-positioned in the sector. Several months ago, we expanded our product portfolio by launching three new models of learning devices. This expansion has allowed us to reach a broader user base while delivering tailored solutions to meet their individual needs. Building on these efforts and strategies, this quarter our learning device business grew its revenue on both a year-over-year and a sequential basis.

By helping students learn well in class, practice well after class, and read well beyond class, our learning devices aim to motivate students to unlock their learning potential while fostering holistic development. Our content solutions have evolved into a diversified portfolio that encompasses learning devices, print and digital books, and other content-based physical products and digital resources. This integrated ecosystem reflects our core mission of bringing quality learning resources to a wider audience, overcoming geographical and temporal limitations, and narrowing the gap in access to education. Our ultimate goal is to empower learners to achieve their personal development objectives. With that, I’d like to turn to our financial performance for the quarter. Our net revenues were $861.4 million or RMB 6,180.4 million for the quarter, representing year over year increases of 39.1% and 38.1% in U.S. dollar and RMB terms respectively.

Our non-GAAP income from operations and non-GAAP net income attributable to TAL for the quarter were $107.8 million and $135.8 million respectively. Now I’ll hand the call over to Jackson, who will provide an update on the operational advancements we made in our core businesses. He will also review our financial performance for the second fiscal quarter. Jackson, over to you.

Jackson Ding, Deputy Chief Financial Officer, TAL Education Group: Thank you, Alex. I’m pleased to share some details on progress we made in the second fiscal quarter across our core businesses. Please note that all financial data for the quarter are unaudited. During the second fiscal quarter, PAYU Small Class Enrichment Programs continued its development path. Its year over year growth was fueled by higher enrollments, which were supported by the continued expansion of our offline learning center network. In terms of learning center expansion, we have maintained a dynamic and methodical approach. We struck a balance that allowed us to meet the demands during the summer vacation period while maintaining teaching quality, business sustainability, and operational efficiency. By prioritizing the overall health of the business, PAYU Small Class maintained its steady performance. As Alex mentioned, we’re adopting a technology-driven approach to enhance our online enrichment learning programs.

Our main goal is to boost user motivation, deepen engagement, and improve the overall learning experience by integrating smart interactive features tailored to online learning habits. To that end, we have introduced a series of new initiatives that integrate technology into our in-class and after-class learning. For instance, we have created immersive online classrooms with role-playing experiences in which students can take on roles such as class helper or subject representative. By empowering students with classroom management responsibilities, their engagement and interaction within the classroom have improved. In some of our humanities programs, we have used AI to bring to life over 100 historical authors, enabling students to interact with AI-powered versions of these figures. This allows students to gain a deeper understanding of the authors’ historical backgrounds and literary contributions.

We have also created AI-powered companion cartoons to assist with app class exercises, making the learning process a more enjoyable experience. These initiatives have all been well received by all users. Looking ahead, we’ll continue to enhance engagement tools and invest in content, products, and services to meet the evolving needs of online learning. Next, I’d like to talk about our learning device business. Our goal is to empower users on their self-learning journeys by offering a wide selection of products with advanced smart features and comprehensive learning resources to meet our users’ diverse needs. We have expanded our product portfolio, introducing new models at various price points since 2023 that have gained market traction. This quarter our learning devices delivered revenue and sales volume growth on both a year over year and a sequential basis.

In June 2025, we officially launched AI Thinke 101, an interactive step by step tutoring AI companion for learning devices that enables a seamless interaction between the screen based and paper based learning experience. Supported by an advanced camera system and AI technology, it is able to recognize questions, evaluate answers, and dynamically adjust explanations in a timely manner to help students master problem solving methods and provide support in various learning scenarios. Since its launch, learning device models equipped with AI Thinke 101 have been well received by users. In August 2025, the China Academy of Information and Communications Technology evaluated educational AI agents and awarded AI Thinke 101 the industry’s highest rating, Level 4. This recognition further establishes its position as an innovator of educational agents. Our continued focus on improving product capabilities has contributed to progress in our learning device business.

As our product portfolios and user base have expanded, key engagement metrics such as weekly active rates and average weekly usage time have remained stable and healthy. This quarter, the average weekly active rate among all learning device users was approximately 80% and average data usage time per active device exceeded an hour. The above concludes the operational update. Now I’d like to walk you through our key financial results for the second fiscal quarter. Our net revenues were $861.4 million or RMB 6,180.4 million, an increase of 39.1% and 38.1% year over year in U.S. dollar and RMB terms respectively. Cost of revenues increased by 36.8% to $370.3 million from $270.6 million in the second quarter of fiscal year 2025. Non-GAAP cost of revenues, which excludes share based compensation expenses, increased by 37.6% to $369.8 million from $268.8 million in the second quarter of fiscal year 2025.

Gross profit increased in the second quarter of fiscal 2026, rising by 40.8% year over year to $491.0 million from $348.7 million for the same period last year. Gross margin increased to 57.0% from 56.3% for the same period last year. Selling and marketing expenses for the quarter were $267.3 million, representing an increase of 46.9% from $181.9 million for the same period last year. Non-GAAP selling and marketing expenses, which excludes share-based compensation expenses, increased by 48.6% to $264.4 million from $177.9 million for the same period last year. Non-GAAP selling and marketing expenses as a percentage of total net revenues increased from 28.7% to 30.7% year over year. General and administrative expenses increased by 8% to $129.1 million from $119.5 million in the same period of last year.

Non-GAAP general and administrative expenses, which excludes share-based compensation costs, increased by 11.5% year over year to $120.8 million from $108.3 million for the same period of last year. Non-GAAP general and administrative expenses as a percentage of total net revenues decreased from 17.5% to 14.0% year over year. Total share-based compensation expenses allocated to related operating costs and expenses decreased by 30.5% to $11.8 million in the second quarter of fiscal year 2026 from $16.9 million in the same period last year. Income from operations was $96.1 million in the second quarter of fiscal year 2026 compared with income from operations of $47.6 million in the same period of last year. Non-GAAP income from operations, which excludes share-based compensation expenses, was $107.8 million compared with non-GAAP income from operations of $64.5 million in the same period last year.

Net income attributable to TAL was $124.1 million in the second quarter of fiscal year 2026 compared to net income attributable to TAL of $57.4 million in the same period. Non-GAAP net income attributable to TAL, which excludes share-based compensation expenses, was $135.8 million compared to non-GAAP net income attributable to TAL of $74.3 million in the same period last year. Moving on to our balance sheet, as of August 31, 2025, we had $1,542.2 million in cash and cash equivalents, $1,706.6 million in short-term investments, and $239.2 million in current and non-current restricted cash. Our deferred revenue balance was $822.7 million as of the end of the second fiscal quarter. Now turning to our cash flow statement, net cash used in operating activities for the second quarter of fiscal year 2026 was $58.1 million. Finally, I would like to briefly address our share repurchase program.

In July 2025, the Company’s Board of Directors authorized a new share repurchase program. Under the program, the Company may spend up to approximately $600 million to purchase its common shares. Over the next 12 months between July 31 and October 29, 2025, the Company has repurchased approximately 4.2 million common shares at an aggregate consideration of approximately $134.7 million. That concludes the Financial section. I will now hand the call back to Alex to briefly update you on our business outlook and strategic priorities. Alex, please go ahead.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Thanks, Jackson. I’d like to share some thoughts on our outlook for the Company’s future development. The fiscal third quarter is generally not a peak season for enrichment learning demand, so we may experience fluctuations in our business performance due to seasonal factors. Nevertheless, we remain dedicated to driving sustainable long term growth across all our business lines. Looking ahead, we’ll continue to enhance our products and services to support students’ holistic development. Our goal is to serve a broader user base while adhering to the quality standards for both our enrichment learning programs and content solutions. To achieve this, we are making continued investments in content and technology. These investments will fuel innovation and position us to meet the evolving needs of our users in the long term. In addition, we are committed to exploring and building diverse sales channels to drive growth in our core business.

In today’s highly connected world, integrating online and offline user engagement is more crucial than ever. Offline touchpoints remain essential for fostering meaningful interactions with users. While we have established offline communication in learning services, newer areas such as the learning device business are still in the nascent stages. It is therefore essential that we strengthen our go to market capabilities in this area, which will take time and continued investment. Regarding our future financial performance outlook, as we’ve emphasized in recent quarters, our primary objective remains achieving sustainable long term growth rather than focusing solely on short term financial results. Accordingly, we will continue prioritizing resource allocation to critical areas aligned with our long term strategic goals. We’re committed to exploring expansion and innovation opportunities within our core businesses to enhance our competitiveness.

To execute these strategies effectively, we will maintain flexibility in resource allocation, carefully considering factors such as business dynamics, product cycles, market conditions, seasonality, and organizational capabilities. These adjustments may result in financial performance fluctuations, with some peers exceeding or falling short of market expectations. Indeed, in recent quarters we have experienced margin compression as we seed the new initiatives and scaled emerging opportunities. Conversely, we’ve also seen periods of outperformance as these investments matured. This variability underscores our intentional focus on sustainable growth over short term optimization while also reflecting limited visibility into near term financial performance. Despite these dynamics, our commitment to long term growth remains unwavering, particularly in the K12 learning sector. Our ultimate goal is to deliver transformative learning solutions that empower students in their holistic development. That concludes my prepared remarks. Operator, I think we’re now ready to open the call for questions.

Conference Call Operator: Thank you. We will now begin the question and answer session. To ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star 11 again. We will now take our first question from the line of Timothy Zhao from Goldman Sachs. Please ask your question, Timothy.

Timothy Zhao, Analyst, Goldman Sachs: Good evening, Alex, Jackson, and Fang. Thank you for taking my question. My question is regarding the PAYU Small Class Enrichment Programs offline enrichment business. Just wondering if management can share with us some updates on the market dynamics and also competitive landscape for this business. Could you offer some color into the second quarter performance and also the expansion in the offline learning centers and offline business? For example, have you offered any discount or promotions during the summer? Looking ahead, I’m just wondering if you can provide us a growth outlook for the overall enrichment business for the offline business. Thank you.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Thanks Timothy. This is Alex. Let me take this one on. It’s a multi part question, so let me try to unpack that and address each component of that question. First of all, in the offline payer market we’ve really observed steady growth in our PAYU Small Class Enrichment Programs. I think that mirrors learners’ increasing interest in them. As with any market during its development, competition is really inevitable. The offline small class enrichment learning market, if we define it like that, offline small class enrichment learning market, really it’s notably more fragmented than many other consumer or services markets, making it somewhat challenging to accurately assess the total market size and demand. To remain competitive in this fragmented landscape, the key really lies in developing high quality products and services which are supported by solid performance metrics.

While we continue to monitor the broader trends and dynamics of the enrichment learning market, our primary focus really remains on strengthening our product capabilities to better meet the needs of learners and deliver long term value. With regard to our performance in the second quarter, revenue for PAYU offline enrichment programs has grown largely in line with our learning center footprint. For network expansion, we maintain the same operational approach as before. I think as I mentioned during the prepared remarks, we evaluated several key factors such as our organizational capability and efficiency, regional market demand, and user acceptance of our products. This quarter we saw a moderate increase in offline enrichment learning centers. Given our disciplined approach to expansion, I think we are satisfied really with the overall health of the business.

Regarding summer class pricing, the ASP of our summer courses remains stable really compared with the same period last year. Lastly, I think you asked for the outlook. Looking ahead, we’ll continue to prioritize sustainability and healthy growth over scale in our approach to expanding offline learning centers. As we open new centers, maintaining consistent service quality and efficiency is really critical given the scaling requires broader service coverage. While upholding high quality service, we expect PAYU’s year over year revenue growth to gradually taper off. Timothy, I hope that answered your question.

Jackson Ding, Deputy Chief Financial Officer, TAL Education Group: Sure.

Timothy Zhao, Analyst, Goldman Sachs: Thank you, Alex, and congrats on the very solid result this quarter.

Felix Liu, Analyst, UBS: Thank you.

Conference Call Operator: Thank you. We’ll take our next question from the line of Felix Liu from UBS. Please ask your question, Felix.

Felix Liu, Analyst, UBS: Hi, good evening. Thank you, management, for taking my question, and congratulations on the very strong quarter. I have a few questions on the learning device business. Management, could you share some color on the business performance, especially on the sales volume and pricing for the devices for your newly launched product? What are the user feedback so far and the product’s overall performance on the P&L side of this segment? Are there notable differences in margins across various pricing points? Looking ahead, how does management see the competition landscape for learning devices? Thank you.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Thanks. Felix, this is Alex again. Let me take on this. Let’s start with the performance of our learning devices business in the past quarter. For the past quarter, sales volumes increased year over year and quarter over quarter, primarily due to our product and channel efforts. On the other hand, we do note that the blended ASP declined both sequentially and year over year, mainly due to changes in the product mix. Let me add some color to this. In May, a few months ago, we launched three new models, the P4, the S4, and the T4. These target different price tiers. These products were well received, driving year over year sales growth. The sequential growth also benefited from Q2 seasonal strength. In terms of ASP, the blended ASP declined below RMB 4,000, and that really reflects the shift in the product mix.

From a financial perspective, the bill of materials cost ratios for our learning devices across different price points really remained stable in Q2. At the P&L level, our learning devices still incurred an adjusted operating loss. We’ll continue to allocate resources to this line of business as ensuring our long-term competitiveness remains a key priority. Quarterly bottom line fluctuations are expected given market dynamics, competition, and the resource allocation point that I’ve been making. This focus, I’d like to add, is really critical. In today’s competitive smart education hardware landscape, you see major players continue to launch compelling learning tablet products. In addition, AI-driven learning products are reshaping education at an unprecedented pace. While we leverage our K12-focused high-quality content and continuously enhance product excellence and AI capabilities, really building hardware expertise and channel expertise requires foundational level efforts.

Rather than prioritizing short-term profitability, we remain really focused on key areas that drive long-term competitiveness, things like user feedback, market share, brand influence, and broader user engagement. We think the strategy really ensures a solid foundation for sustainable long-term growth. Based on our content solutions, including learning devices, books, and other early initiatives, we’ll continue to invest so that more students can access affordable high-quality learning content and tools. Our goal really is to leverage technological innovation and quality content to reach a broader audience and provide meaningful value to society. Felix, I hope that answered your question.

Felix Liu, Analyst, UBS: Yep, that’s clear.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Thank you.

Conference Call Operator: Thank you. The next question comes from the line of Li Ping Zhao from CICC. Please ask your question, Li Ping.

Fang Liu, Investor Relations Director, TAL Education Group: Good evening, Alex and Jackson. Thanks for taking my questions regarding your Q2 financial performance. I’m wondering, could you please provide a breakdown of top line growth and bottom line performance across different business lines, and how do we think about the trend for these business lines, for example, in Q3 or the second half of this fiscal year? Thank you.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Thank you.

Jackson Ding, Deputy Chief Financial Officer, TAL Education Group: Li Ping, this is Jackson. Let me take this one. Let me start with the top line and then move on to the bottom line. On the top line, we expect year over year revenue growth of PAYU Small Class to gradually taper off. This moderation really reflects a more normalized growth rate and will result in a measured pace of capacity expansion. As for learning devices, the business achieved year over year and quarter over quarter growth in Q2. However, please note that this business is still in its early stage. It is essential for fostering meaningful customer engagement, expanding our user base, and encouraging broader adoption. We remain committed to driving business development, though performance may fluctuate due to market conditions, product cycles, seasonality, and among other factors.

From a broader perspective, we believe a company’s growth and development depend on the value it creates for its users and the society as a whole. This principle underpins every aspect of a business, big and small. We view revenue growth at the company and industry levels as the result of continuous innovation, greater organizational capabilities, and stronger operational execution. Now let’s turn to the bottom line. As previously noted, we have established a presence across multiple business lines including various enrichment learning programs, learning devices, and other content solutions businesses. Notably, these businesses are at different stages of development, each with distinct priorities. On one hand, PAYU Small Class Enrichment Programs business has reached a more mature stage, delivering relatively stable profit margins.

On the other hand, regarding our newer initiatives such as learning devices, as we mentioned earlier, we prioritize long term competitiveness over short term profitability with a focus on operational metrics such as user feedback, market share, brand influence, and broader user reach. At this stage, the timeline to achieve profitability of the learning device business remains uncertain. We will continue to invest in this area through new product launches, content enrichment, developing AI-powered experiences, and making ongoing optimizations to drive performance improvements. Therefore, the company’s overall margin profile reflects the mix of mature and emerging businesses, making it challenging to generalize future margin trends. I would also like to mention that Q2 is typically a peak season for us in terms of profitability, and we should not expect this level of profit margins in the next couple of quarters to come. Li Ping, I hope that answers your question.

Fang Liu, Investor Relations Director, TAL Education Group: Thanks, Jackson, that’s helpful.

Conference Call Operator: Thank you. Our next question comes from the line of Elsie Sheng from CLSA. Please ask your question, Elsie.

Fang Liu, Investor Relations Director, TAL Education Group: Thank you management for taking my question and congratulations on the strong result. My question is on the plan of allocation in cash because we noticed that following the launch of the new share repurchase plan you have repurchased about 4.2 million common shares. Could you provide an outlook on the pace of share repurchase for the rest of the year?

Jackson Ding, Deputy Chief Financial Officer, TAL Education Group: Thank you. Elsie, this is Jackson, I’ll take this one. Let me share some updates on our capital allocation plans. As of August 31, 2025, the Company held approximately $3.5 billion in cash and cash equivalents, short term investments and restricted cash. We have always taken a prudent and balanced approach to capital allocation. We carefully evaluate potential uses of cash, striving to strike the balance between short term needs and long term development. Regarding shareholder returns, we launched our first $1 billion share repurchase program in April 2021, later extending it through 2025. In July 2025, that program was nearly completed and we announced a new $600 million repurchase program. Between July 31 and October 29, 2025, the Company has repurchased 4.2 million common shares for a total consideration of $134.7 million.

We will continue to execute a program in line with market conditions and may or may not utilize the full authorization over the next 12 months. Looking ahead, we’ll take a long term perspective when making strategic investments to promote sustainable and healthy growth. We’ll maintain steady investments in content, learning devices and other new initiatives as we believe these efforts will create long term value for shareholders. Backed by our cash position, we’re confident in our ability to fund business expansion while delivering returns to shareholders. As we drive business development, we will also remain attentive to shareholder interests. The specific level of shareholder returns will be comprehensively evaluated and periodically adjusted, taking into account dynamic factors such as market conditions, investment opportunities, business outlook and capital allocation priorities. We will provide timely and appropriate disclosures to ensure investors are well informed on this matter.

Elsie, I hope that answers your question.

Fang Liu, Investor Relations Director, TAL Education Group: Yes, thank you. It’s very clear. Thank you.

Conference Call Operator: We have reached the end of the question and answer session. Thank you all very much for your questions. I’ll now turn the conference back to the management team for closing comments.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Thank you again to everyone for joining us today. We look forward to seeing you all next quarter.

Jackson Ding, Deputy Chief Financial Officer, TAL Education Group: Thanks.

Alex Peng, President and Chief Financial Officer, TAL Education Group: Bye bye.

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