OneSmart International Education Group (ONE) Reports Q2 Revenue Beat; Affirms FY19 Revenue Guidance Above Consensus

OneSmart International Education Group (NYSE: ONE) reported Q2 revenue for the quarter came in at $140.9 million versus the consensus estimate of $95.6 million.

• Net revenues increased by 42.1% year-over-year to RMB942.5 million (US$140.9 million)
• Net revenues from OneSmart VIP business increased by 30.8% year-over-year to RMB747.4 million (US$111.7 million)
• Net revenues from HappyMath increased by 45.1% year-over-year to RMB117.4 million (US$17.5 million)
• Net revenues from FasTrack English increased by 257.5% year-over-year to RMB 39.4 million (US$5.9 million)
• Monthly average student enrollments[1] increased by 52.2% year-over-year to 156,171, of which monthly average student enrollments for OneSmart VIP business, HappyMath and FasTrack English increased by 22.2% , 57.3% and 162.2% from the same period of fiscal year 2018, respectively

Mr. Steve Xi Zhang, Chairman and Chief Executive Officer of OneSmart, commented, \"We are very excited to announce another quarter of strong growth in both topline and student enrollments. Total net revenues increased by 42.1% year-over-year to RMB942.5 million, which was supported by 52.2% year-over-year growth in monthly average student enrollments. OneSmart VIP business, HappyMath and FasTrack English achieved top-line growth of 30.8%, 45.1% and 257.5% year-over-year, respectively."

Mr. Dong Li, OneSmart's Director and Chief Financial Officer added, "We achieved 40.4% year-over-year growth in gross profit and 24.8% year-over-year growth in non-GAAP operating profit, even though we added a total of 128 learning centers since second fiscal quarter of 2018 to meet the increased market demand, we incurred certain one-off costs and expenses to comply with the latest regulatory requirements, and we substantially increased investments in integration of the latest education technology and curriculum development.

We added 34 new learning centers during the quarter and total number of study centers increased to 401 as of February 28, 2019, which represents total number of classrooms increase of 18.2% year-over-year and 4.9% quarter-over-quarter. We are delighted to see our Mature Learnings Centers[2] continue to consistently deliver satisfactory operating and financial results. During the second fiscal quarter of 2019, gross profit margin of our Mature Learning Centers[2]increased by 1.0% year-over-year, of which gross profit margin of Mature Learning Centers[2] for OneSmart VIP business, HappyMath and FasTrack English increased by 0.8%, 1.0%, and 19.7%, respectively. In the meantime, our newly opened learning centers are on track to ramp up quickly and are expected to achieve higher utilization when they become mature.

Juren Education, which we invested a strategic minority stake in October 2018, also achieved steady growth since our investment. Total student enrollments for the Winter and Spring semesters in 2019 increased by 48.4% year-over-year and Juren Education will further penetrate into more tier II and tier III cities in China.

Lastly, following our US$30.0 million share repurchase program approved by the board of directors in October 2018, we are delighted to announce that our board of directors has just authorized another share repurchase program of up to US$50.0 million worth of our shares over the next 12 months. These share repurchase programs reflect confidence in our future prospects and our ability to create and return long-term sustainable value for our shareholders."

GUIDANCE:

OneSmart International Education Group sees FY2019 revenue of $597.8-620.2 million, versus the consensus of $413.37 million.

For earnings history and earnings-related data on OneSmart International Education Group (ONE) click here.

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