• Total Revenue for FY2024: 1,755.2 million RMB.
• Overseas Schools Revenue Growth: 17.5% year over year.
• Gross Profit Increase: 7.7% year over year.
• Gross Margin for FY2024: 28.7%, up from 26.4% last year.
• Adjusted Net Income for FY2024: 1.1 million RMB, compared to an adjusted net loss of 192.6 million RMB last year.
• SG&A Expenses Reduction: 18% for the fourth quarter and 8% for the fiscal year.
• Cash and Cash Equivalents: 505.8 million RMB, a 20% increase from the previous year.
• Net Cash from Operating Activities: Increased 14 times year over year to 104 million RMB for the fourth quarter.
• Complementary Education Services Revenue Decline: 19.7% year over year for the fourth quarter.

• Warning! GuruFocus has detected 3 Warning Signs with BEDU.

Release Date: November 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bright Scholar Education Holdings Ltd (NYSE:BEDU) achieved double-digit year-over-year revenue growth in its overseas schools business for the full fiscal year.
• The company completed the divestiture of all non-core businesses, allowing it to focus on high-growth, high-return core operations.
• Overseas schools segment showed strong performance with a 17.5% year-over-year revenue increase, contributing significantly to total revenue.
• The company reported an adjusted net income of 1.1 million RMB, a significant improvement from the previous year's adjusted net loss.
• Bright Scholar enhanced its cash position, increasing cash and cash equivalents by 20% year-over-year.

Negative Points

• Revenue from complementary education services declined by 19.7% year-over-year during the fourth fiscal quarter.
• The company recorded a net loss of 954.8 million RMB for the fourth quarter, primarily due to an impairment loss on goodwill and intangible assets.
• Gross margin for the fourth quarter decreased to 10% from 18.1% in the same quarter last year.
• SG&A expenses, although reduced, still represented a significant portion of costs, impacting overall profitability.
• The domestic kindergartens and K-12 operation services segment showed a decline in revenue, reflecting challenges in these areas.

Q & A Highlights

Q: Can you elaborate on the strategic focus for the upcoming fiscal year? A: Ruolei Niu, CEO: Moving into fiscal year 2025, we plan to reinforce our growth strategy by focusing on the expansion of our overseas school business and enhancing our global recruitment initiatives. This approach aims to capture more market opportunities and support sustainable growth.

Q: How did the overseas schools segment perform in the fiscal year? A: Ruolei Niu, CEO: Our overseas schools segment showed solid growth, with revenue increasing by 17.5% year over year. This segment accounted for 54.2% of our total revenue for the fiscal year, driven by exceptional academic outcomes and increased enrollment.

Q: What measures have been taken to improve operational efficiency? A: Hui Zhang, CFO: We have streamlined our operations, leading to a 16% reduction in headcount at our overseas headquarters and a 28% decrease in related costs. This has improved our operational efficiency and reduced SG&A expenses by 18% for the fiscal year.

Q: Can you discuss the financial performance for the fiscal year? A: Hui Zhang, CFO: We reported stable total revenue with a 17.5% increase in overseas schools revenue. Our gross profit increased by 7.7%, and we recorded an adjusted net income of 1.1 million RMB, compared to a net loss in the previous year. Our cash position also improved significantly.

Q: What are the future plans for the complementary education services segment? A: Ruolei Niu, CEO: We are winding down low-return programs and have divested non-core businesses. Moving forward, we aim to innovate and enhance our global recruitment initiatives to serve more students planning to study abroad, expanding our offerings in international markets.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.