Earnings Call Transcript
New Oriental Education & Technology Group Inc. (EDU)
Earnings Call Transcript - EDU Q1 2025
Operator, Operator
Good evening, and thank you for standing by for New Oriental's FY 2025 First Quarter Results Earnings Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. I'd now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao.
Sisi Zhao, Host
Thank you. Hello, everyone, and welcome to New Oriental's first fiscal quarter 2025 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website as well as on Newswire services. Today, Stephen Yang, Executive President and Chief Financial Officer, and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today 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, our results may be materially different from the view expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on New Oriental's Investor Relations website at investor.neworiental.org. I will now first turn the call over to Mr. Yang. Stephen, please go ahead.
Stephen Yang, CFO
Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. We're pleased to announce that the company has forged a healthy growth across our key business lines in alignment with the expectations, with the top-line growth of 30.5% this quarter. Total net revenues, excluding revenues generated from East Buy private label products and livestreaming business, increased by 33.5% year-over-year. In particular, we're impressed by the highly encouraging growth that the new endeavors have anchored, which has significantly contributed to the core building blocks of the company. At the same time, New Oriental's bottom-line performance for our core educational business has also achieved healthy yields. Operating margin-wise, we have excluded operating margins generated from East Buy for this quarter for a better reflection of the performance of New Oriental's core educational business. The operating margin and non-GAAP operating margin for this quarter have reached 23.7% and 24.4%, representing 370 basis point and 220 basis point improvement year-over-year, respectively. We're pleased to see the tremendous efforts that we devoted into our offerings and platforms, sparking positive growth across our business lines. Our commitment to maintaining a healthy profitability and market share stands firm as we strive to create sustainable value for our customers and shareholders in the long term. Now, I would like to spend some time to talk about the quarter's performance across our existing business lines and new initiatives in detail. Our key remaining business continued to secure encouraging trends this quarter. Breaking it down, the overseas test prep business recorded a revenue increase of 19% year-over-year for the first fiscal quarter of 2025. The overseas study consulting business recorded revenue increase of about 21% year-over-year for this quarter. The adults and university students business recorded a revenue increase of 30% year-over-year for this quarter. The ongoing investments in our new educational business initiatives, which mostly revolve around facilitating students' all-round development, have propelled the company's engine for innovation, having secured strong momentum in their respective ventures. Firstly, the non-academic tutoring courses, which we offer in around 60 existing cities, focuses on cultivating students' innovative ability and comprehensive quality. We're pleased to receive solid interest with a total of approximately 484,000 student enrollments recorded in this quarter. The top 10 cities in China contribute over 60% of this business. Secondly, the intelligent learning system and device business has been adopted in around 60 cities. We're happy to see elevated customer retention and scalability with approximately 323,000 active paid users reported in this quarter. The revenue contribution of these initiatives from the top 10 cities in China is around 55%. Our smart education business, educational material and digitalized smart study solutions have continued to contribute materially to the overall advancement of the company. In summary, our new educational business initiatives have recorded a revenue increase of 50% year-over-year for this quarter. In addition, our newly integrated tourism-related business line is now comprised of diverse offerings including cultural trips, study tours in China and overseas, as well as camp education. Within this business line, our study tour and research camp business for students of K-12 and university age achieved tremendous growth this quarter with an increase of 221% in revenue year-over-year for this quarter. We have operated study tours and research camp business in over 55 cities across the country, with the top 10 cities in China offering over 55% revenue share of this new business. The number of top-notch tourism offerings were also piloted to expand our reach to all age groups, including middle-aged and elderly individuals across 30 featured provinces in China and globally. This inspiring growth this quarter has affirmed our devotion to deliver premium offerings to our valued customers, and we believe this new business line will contribute meaningful revenue throughout this fiscal year. With regards to our OMO system, we have proceeded in revamping our platform and leveraged our educational infrastructure and technological edge on remaining key businesses and new initiatives with a vision to provide an advanced diversified education service to customers of all ages. In this quarter, a total of $24.6 million has been invested in our OMO teaching platform, which equips us with the flexibility to maintain unrivaled service to students. In terms of East Buy's performance, since April 2022, East Buy has launched a total of 488 SKUs in private label products in just two years. Our product categories have expanded into a well-diversified product mix to date. During the reporting period, East Buy also emphasized the significance of the offering-only product with a high cost performance, which has proven effective in reinforcing East Buy's value in the minds of our current and new users. In addition, thanks to our multi-channel strategy that has driven sustainable growth, East Buy's footprints have expanded from our livestreaming channels to platforms like Tmall, JD, Pinduoduo, and Xiaohongshu as they amplify our reach to a wider customer base. In the New Year, East Buy will explore offline channels by examining partnerships with offline schools owned by New Oriental brands and other parties as part of our vision to initiate an offline sales network and enhance our brand awareness to a greater extent. With regards to the company's latest financial position, I'm pleased to share that the company is seeing a healthy financial status with cash and cash equivalents, term deposits, and short-term investments totaling approximately $4.9 billion. Now, I would also like to take the opportunity to highlight that the company's Board of Directors approved a share repurchase program in July 2022, under which the company is authorized to repurchase up to $400 million of the company's ADS or common shares over the next 12 months. The company's Board of Directors further approved to extend the effective time of the share repurchase program to May 31, 2025, and increase the aggregate value of the shares that the company authorized to repurchase from $400 million to $700 million. As of October 22, 2024, the company repurchased an aggregate of approximately 9.8 million ADS for approximately $457.9 million from the open market. Now, I will turn the call over to Sisi to share with you about the key financials.
Sisi Zhao, Host
Thank you, Stephen. I'd like to share our key financial details for this quarter. Operating costs and expenses for the quarter were $1,142.3 million, representing a 27.6% increase year-over-year. Non-GAAP operating costs and expenses for the quarter, which excludes share-based compensation expenses, were $1,135.4 million, representing a 32.8% increase year-over-year. The increase was primarily due to the cost expenses related to accelerated capacity expansion for the educational business and newly integrated tourism-related business. Cost of revenues increased by 32.3% year-over-year to $583.5 million. Selling and marketing expenses increased by 42.3% year-over-year to $193.7 million. General and administrative expenses for the quarter increased by 15% year-over-year to $365.1 million. Non-GAAP G&A expenses, which exclude share-based compensation expenses, were $354.5 million, representing a 22.1% increase year-over-year. Total share-based compensation expenses, which were allocated to related operating costs and expenses, decreased by 82.7% to $6.9 million in the first fiscal quarter of 2025. Operating income was $293.2 million, representing a 42.9% increase year-over-year. Non-GAAP income from operations for the quarter was $300 million, representing a 22.6% increase year-over-year. Net income attributable to New Oriental for the quarter was $245.4 million, representing a 48.4% increase year-over-year. Basic and diluted net income per ADS attributable to New Oriental were $1.49 and $1.48, respectively. Non-GAAP net income attributable to New Oriental for the quarter was $264.7 million, representing a 39.8% increase year-over-year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were $1.61 and $1.60, respectively. Net cash flow generated from operations for the first fiscal quarter of 2025 was approximately $183.2 million, and capital expenditure for the quarter was $80.2 million. Turning to the balance sheet. As of August 31, 2024, New Oriental had cash and cash equivalents of $1,147 million. In addition, the company had $1,513.8 million in term deposits and $2,248.6 million in short-term investments. New Oriental's deferred revenue, representing cash collected upfront from customers and related revenue that will be recognized as the service or goods are delivered, at the end of the first quarter of fiscal year 2025 was $733.1 million, an increase of 23.7% compared to $1,401.4 million at the end of the first quarter of last fiscal year. Now, I'll hand over to Stephen to go through our outlook and guidance.
Stephen Yang, CFO
Thank you, Sisi. With the encouraging performance achieved from our diverse business lines, backed by our solid educational resources that have stood the test of time, we're bullish on maintaining healthy growth for our core educational business. Simultaneously, we will devote ongoing investments in expanding our new tourism-related business. We believe that this momentum will nourish a more extensive nationwide rollout of our tours in this fiscal year. While we strive to safeguard a healthy balance between revenue and profitability growth, we will also cautiously manage our capacity expansion and hiring to underpin the development of our educational business in this New Year. We plan to increase our capacity by around 20% to 25% for this fiscal year. The most new openings will be launched in cities with better top-line and bottom-line performance. Rest assured that we will closely monitor the pace and scale of new openings in accordance with the local operations and financial performance during the year. Every second quarter of our financial year tends to be a slower period due to the seasonality of our business. That being said, we remain confident in achieving steady growth and satisfactory operating profit for the full fiscal year. We expect total net revenues, excluding revenues generated from East Buy, in the second quarter of the fiscal year 2025, from September 1, 2024, to November 30, 2024, to be in the range of $851.4 million to $871.8 million, representing a year-over-year increase in the range of 25% to 28%. In addition, based on our current estimation, we expect the operating margin for the whole company, except for East Buy, for fiscal year 2025 will expand year-over-year. I must say that these expectations and forecasts reflect our considerations of the latest regulatory measures, as well as our current and preliminary view, which is subject to change. To conclude, New Oriental will always pursue premium offerings for our customers while simultaneously achieving sustainable growth. To achieve that, we will continue to devote necessary resources on research and application of new technologies such as AI and ChatGPT into our education and product offerings with a vision to uplift our strengths to pursue growth and operating efficiency. We will also continue to seek guidance from and cooperate with government authorities, comply with the relevant policies, guidelines and any related regulations, and further adjust our business operations as required. As always, we will work diligently to enhance the nation's education level to strengthen our leading position, so as to unveil further potential across all our business lines and realize our vision. This is the end of our fiscal year 2025 Q1 summary. At this point, I would like to open the floor for questions. Operator, please open the call for these. Thank you.
Operator, Operator
Thank you. We will now take our first question from Felix Liu from UBS. Please go ahead.
Felix Liu, Analyst
Good evening, management. Thank you for taking my question. My question is on your second quarter guidance. We noticed that in the first quarter, your capacity expansion was over 30% year-on-year by the number of learning centers. However, if we look at your second quarter guidance, it's slower than your capacity expansion in the first quarter. So, how should we think about the gap between capacity growth and revenue guidance? And could management share your outlook for second half growth? Do we expect to see the revenue growth to converge with capacity? Thank you.
Stephen Yang, CFO
Thank you, Felix. Regarding the Q2 guidance, we project that top-line growth will fall between 25% and 28% year-over-year in dollar terms. However, as we have observed, Q2 tends to be slower due to the seasonal nature of our education business. Nevertheless, we are confident in achieving a consistent growth rate of approximately 30% for the entire year. This indicates that we anticipate revenue growth, excluding East Buy, to accelerate in Q3 and Q4 compared to Q2. Despite some impact from the current economic environment, particularly in our overseas business, we expect full fiscal year revenue growth, excluding East Buy, to be around 30% year-over-year. Last year, we opened more learning centers in Q3 and Q4, and we've seen a faster pace of ramping up these centers than in the past. We believe that student enrollment will increase in the learning centers, especially in Q3 and Q4, which makes us quite optimistic about the overall growth for the year. Thank you, Felix.
Felix Liu, Analyst
Thank you.
Operator, Operator
Thank you. We will now take our next question. This is from the line of Alice Cai from Citi. Please go ahead.
Alice Cai, Analyst
Good evening, Stephen from Sisi. Thanks for taking my question. I have a question about the capacity expansion. Since Q2 is typically a low season, are you considering slowing down capacity expansion during this period to improve margins? And is that capacity to be concentrated in Q1 and Q4 for FY '25? And for the upcoming quarters, will you focus on encouraging penetration in existing cities rather than entering new ones? Thanks.
Stephen Yang, CFO
Yeah. By the end of this quarter, Q1, we have added around 6% new capacity. And, as I said, we plan to increase our capacity expansion by 20% to 25% for the whole year. Last year, we opened more learning centers, but this year, I think we will open the learning centers at a more healthy pace, 20% to 25%. And, yeah, as I said, we ramped up the learning centers much faster than before. I think as the whole year progresses, you'll see the margin expand for the whole year. In Q2, yeah, we might see some slight margin pressure in Q2 because of the seasonality, as Q2 is the low season, but we do believe for the whole year, the margin will be expanded for the education business, except for East Buy. Thank you, Alice.
Alice Cai, Analyst
Thanks.
Operator, Operator
Thank you. We'll now take our next question. And this is from Yiwen Zhang from China Renaissance. Please go ahead.
Yiwen Zhang, Analyst
Yeah, great. Thanks for taking my question. So, my question is about follow-up on the margin. So, I’m very glad to see our adjusted operating margin increase 220 basis points on a year-over-year basis, compared to the previous quarter. So, can you just tell us more about what is driving this improvement? And how should we think about the drivers to play out in the rest of the year? Thank you.
Stephen Yang, CFO
Thank you, Yiwen. You asked the question about the margin. Let us start with the margin analysis of this quarter. The non-GAAP operating margin for the education business, which excludes East Buy, expanded by 220 basis points year-over-year. As you know, last year Q1 had a high base, which made this quarter's comparison a bit harder. However, we still managed to double the margin expansion by 220 basis points year-over-year. I believe this is mainly due to the following reasons: Number one, we're pleased to see that business lines achieved positive top-line growth across all segments. Number two, we started to see the fruits of last year's learning center expansion, improving the overall utilization rate and achieving greater operating leverage. Number three, we implemented cost control measures across the company, and we were able to leverage our overhead this quarter. Even though we spent more money on the new tourism business, the education business, excluding East Buy, managed to achieve margin expansion higher than we expected. Regarding the margin outlook, due to the seasonality of the business, every second quarter is typically a low season. Therefore, we anticipate experiencing some minor margin pressure in the second quarter. But as I mentioned, we remain quite confident about Q3 and Q4. We are optimistic about the margin profile for the educational business, including East Buy, throughout the whole year. We expect that the non-GAAP operating margin will expand for the entire year.
Operator, Operator
Thank you. We will now take our next question. This is from Lucy Yu from Bank of America. Please go ahead.
Lucy Yu, Analyst
Hi, Stephen and Sisi. Just to clarify, Stephen, you said the second quarter non-GAAP operating profit margin will be under pressure. Do you mean that excluding East Buy, we're going to see margin contraction on a year-over-year basis? Just to clarify on that. And actually, my question is on the cultural tourism. You did mention that camp revenue was up by over 200% year-over-year. So, may I know how much revenue that cultural tourism contributed this quarter? And is that business segment loss-making or profit-making for this quarter? Thank you.
Stephen Yang, CFO
The slight margin pressure in Q2 that I talked about is entirely related to the educational business. We projected top-line growth of 25% to 28%, and since Q2 is typically a low season for the educational sector, we expect to see better leverage in Q3 and Q4. This is why we are optimistic about the margin outlook for those quarters. Regarding the tourism business, Q1 was the peak season, which included revenue from camp activities and overseas study tours, as well as domestic study tours, amounting to around $90 million. This revenue was profitable during the peak season, but looking ahead for the entire year, I anticipate that we may incur losses in the tourism segment as it is still its first year, and we need more time to refine the product and business models. Nonetheless, we are confident about the future growth of the tourism business. Thank you, Lucy.
Lucy Yu, Analyst
Thank you, Stephen.
Operator, Operator
Thank you. We'll now take our next question. This is from Timothy Zhao from Goldman Sachs. Please go ahead.
Timothy Zhao, Analyst
Hi, Sisi. Hi, Stephen. Thank you for taking my question. My question is regarding your K-12 new initiatives. Just wondering if you can break down in terms of the revenue growth between the non-academic tutoring and the intelligent learning devices and services. And the related question on the specific segment is I do notice that I think for the non-academic tutoring, the quarterly enrollment for the past quarter grew by around 11% year-on-year compared to close to 40% a quarter ago. Just wondering if you can elaborate more on the growth and what kind of growth we should expect on enrollments for the following quarters versus only 11% for this quarter. Thank you.
Stephen Yang, CFO
Sisi, can you share with Tim the revenue breakdown, specifically for the new business?
Sisi Zhao, Host
Yeah. The new K-12 educational related initiatives, including non-academic tutoring and intelligent learning devices business grew by over 50% in Q1, at 56%. Both are growing at similar rates.
Stephen Yang, CFO
And to your second question about the enrollment, yes, the enrollment growth of the K-12 segment seems lower this quarter because we opened the summer enrollment window earlier than last year. This means we reported more student enrollments in last year's Q4. This is kind of a timing difference. If you combine Q4 and Q1 together, the enrollment growth will normalize, and it is very strong overall. As I mentioned, even though Q2 will be the low season, we're quite confident about the full year's top-line growth. We expect to see accelerating top-line growth in Q3 and Q4. For the new businesses, we are keeping the guidance of 40% to 50% top-line growth for the full year.
Timothy Zhao, Analyst
Thank you, Stephen. Thank you, Sisi.
Stephen Yang, CFO
Thank you.
Operator, Operator
Thank you. We'll now take the next question. This is from Charlotte Wei from HSBC. Please go ahead.
Charlotte Wei, Analyst
Congratulations on your strong results. Thank you, Stephen and Sisi, for taking my question. Could you please share more color on the growth in different business segments in the second quarter? Thank you.
Sisi Zhao, Host
Yeah. Actually...
Stephen Yang, CFO
Second quarter?
Sisi Zhao, Host
Yeah. You're asking about the guidance for Q2?
Charlotte Wei, Analyst
Guidance breakdown, yeah.
Sisi Zhao, Host
Okay. Yeah. Overseas-related business will grow about over 20%. Domestic test prep, university student business will grow over 30%, 30% to 35%. The high school business will grow around 20%. And the new business will grow at around 50%.
Charlotte Wei, Analyst
Thank you. Very clear. Thank you.
Operator, Operator
Thank you. We'll now take our next question. This is from DS Kim from JPMorgan. Please go ahead.
DS Kim, Analyst
Hi, Stephen. Hi, Sisi. Thanks for taking my question. I just have a follow-up on your points about new businesses. If I may, did you say this past quarter, new businesses grew over 56%? Did I hear correctly? Because from the press release, I think maybe it's a minor thing, but the press release seems to say 49.8% this quarter. So just wanted to double check if I'm looking at that correctly.
Sisi Zhao, Host
Yeah, DS, that's the growth for non-academic tutoring and intelligent learning devices, which is over 55%.
DS Kim, Analyst
Oh, okay. So, that means these new educational business initiatives have other components as well. May I ask what else is included? Also, if possible, can you give us the breakdown in current revenue, last year revenue between non-academic tutoring versus intelligent learning and the smaller categories as well?
Sisi Zhao, Host
Yeah, actually, every quarter the contribution is similar. The non-academic tutoring accounts for roughly more than half of the new educational business, and roughly one-third is the intelligent learning device business. These two are growing faster than the rest of the smaller categories.
DS Kim, Analyst
And the smaller categories, if I may, are they book sales, or could you clarify what else we have here?
Sisi Zhao, Host
Yeah, intelligent books and also some to-be businesses.
DS Kim, Analyst
Got it. Thank you very much. If I may, I would like to follow up on earlier. You mentioned and kindly gave us a breakdown of the growth momentum for Q2 guidance. Can I double-check whether that was based on U.S. dollars versus renminbi? If you could provide this first quarter similar breakdown between segment growth, it would be great. Thank you so much. And I'll go back to the queue.
Stephen Yang, CFO
Q1 guidance, just share the exchange rates we're using...
Sisi Zhao, Host
Yeah. I can share with you the exchange rate that we're using for Q1 quarter and the guidance quarter. Is that okay?
DS Kim, Analyst
Yes, but earlier growth, was it based on USD?
Sisi Zhao, Host
Yeah. Q1 exchange rate is CNY7.22 and Q2 is CNY7.08 roughly.
DS Kim, Analyst
Thank you very much.
Operator, Operator
Thank you. We have another question coming through. Please stand by. This is from the line of Lucy Yu from Bank of America. Please go ahead.
Lucy Yu, Analyst
Stephen, sorry, just wanted to follow up on the second quarter margin. I know that you said it's a low season, but if you're looking at the top-line, it's still growing by over 25% to 28%, which is not low. So, why should we think that the operating profit margin will decline or contract on a year-over-year basis? Is there any other investment that you’re going to step up or some other reasons? Thank you.
Stephen Yang, CFO
Yes, the Q2 is the low season for all business lines, including overseas-related, K-12, and tourism businesses. We expect to face a loss from the tourism business in Q2. Historically, every Q2 has seen lower margin profiles for the entire company. I must mention, we have opened more learning centers in the second half of last year, but we will still need time to fill those centers with students. So yes, I acknowledge that we are taking a conservative approach in giving the margin guidance as always, Lucy.
Lucy Yu, Analyst
Understood. Just may I follow up on that, how much loss or margin drag have you incurred from tourism in the second quarter? Thank you.
Stephen Yang, CFO
I think it's too early to quantify that, but it is still a margin drag. We also spent more on marketing in Q2. However, as I mentioned, we started to control selling and marketing expenses in Q2. We're still in the process of monitoring that. This is why we've guided for slight margin pressure in Q2, but we expect to outperform our initial expectations regarding margins in Q2.
Lucy Yu, Analyst
Understood, Stephen. So, let's put it this way: so if we exclude East Buy, if we exclude cultural tourism, will the rest of the revenue from the business still see margin contraction in the second quarter?
Stephen Yang, CFO
Yes, I think so. If we take out the impact of the tourism business, I think the margin will be better than the overall company margin profile, except for East Buy. However, we do not provide specific guidance for East Buy by top-line growth and margin.
Lucy Yu, Analyst
Understood. Thank you so much.
Stephen Yang, CFO
Thank you, Lucy.
Operator, Operator
Thank you. We'll now take our next question. This is from Timothy Zhao from Goldman Sachs. Please go ahead.
Timothy Zhao, Analyst
Great. Thank you, Stephen and Sisi. So, I think a follow-up question on East Buy. I think one is on your revenue guidance. I guess, there was a transaction between EDU parent company and East Buy regarding East Buy's education business previously. Just wondering, in your guidance for the EDU core, does that include East Buy's previous education business? And secondly, the implied revenue for East Buy actually dropped quite significantly on a quarter-over-quarter basis. Just wondering if you can elaborate on the background or rationale behind that and how should we think about the revenue going forward. Thank you.
Stephen Yang, CFO
The guidance of Q2 top-line growth in the range of 25% to 28% is for the core education business, excluding East Buy, okay. I'm glad to hear your question about East Buy, but I'm afraid I'm unable to share the latest financial results of East Buy, as they will announce their half-year report in the next quarter. So, next quarter, both parties, the parent company and East Buy, will announce East Buy's financial status in more detail.
Timothy Zhao, Analyst
Sure. So, just to clarify on the guidance, I think if you look at East Buy's previous half-year financials for their education business, which is now part of EDU’s core business, it was around US$30 million to US$40 million per quarter. Just wondering when you talk about the guidance for EDU core education business, does that include East Buy's education business on a year-on-year basis?
Sisi Zhao, Host
Yeah, correct, Timothy. So, your understanding is totally correct. So, when we give guidance, we do an apples-to-apples comparison. Both the comparison quarter and the guidance quarter include the educational portion of East Buy's business. Is that clear?
Timothy Zhao, Analyst
Yes. Thank you, Sisi. Thank you, Stephen.
Operator, Operator
Thank you. We'll now take our next question. This is from DS Kim from JPMorgan. Please go ahead.
DS Kim, Analyst
Hello. Hi. Sorry, I didn't mean to beat a dead horse here, but some investors were asking me just now on this topic, so I thought it would be better to clarify things on new businesses again, sorry. Just to be clear, when you earlier commented that next quarter's growth guidance for new businesses of over 50%, did you mean to include other smaller businesses or only non-academic and intelligent learning devices? If you compare that 50% or over 50% growth to the previous quarter, what does that look like? And similarly, for high school businesses, we expected a 20% growth as you said next quarter. How was the growth for this quarter? Would you be able to comment on that?
Sisi Zhao, Host
Yeah. To make it clear for Q2 guidance for overall new initiatives – new educational initiatives, including all the components, so the total growth is around 45% to 46%. If you look specifically at non-academic tutoring and intelligent learning device, the two key ones, they are growing over 50%. Okay? And the high school business's Q1 growth is about 20% to 21%.
DS Kim, Analyst
Thank you. That's very clear. So, about 4%, 5% deceleration for the new businesses in terms of apples-to-apples, which I think is pretty great given that the base got tougher. Thank you for the clarification.
Sisi Zhao, Host
Okay.
Operator, Operator
Thank you. We are now approaching the end of the conference call. I will now turn the call over to New Oriental's Executive President and CFO, Stephen Yang, for his closing remarks.
Stephen Yang, CFO
Thank you again for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you.
Operator, Operator
Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.