TAL's Q2 Revenue Rises 15.5% and Operating Income Doubles, but Investment Losses Push It to a Net Loss
TAL Education Group (NYSE: TAL) on 29 October reported unaudited results for the second quarter of fiscal 2027, the three months ended 31 August 2026. Net revenue rose 15.5% year on year to US$994.6 million, from US$861.4 million a year earlier.
Gross profit increased 21.1% to US$594.6 million, lifting gross margin to 59.8% from 57.0%. Operating income more than doubled to US$235.9 million from US$96.1 million, a rise of 145.4%, while non-GAAP operating income, which excludes share-based compensation, grew 129.7% to US$247.7 million from US$107.8 million.
Total operating costs and expenses fell 0.8% to US$758.8 million. Revenue costs rose 8.0% to US$400.0 million, selling and marketing expenses fell 15.3% to US$226.4 million, and general and administrative expenses rose 3.7% to US$132.4 million. On a non-GAAP basis total operating costs and expenses declined 0.9% to US$747.0 million. Share-based compensation allocated to operating costs was essentially flat at US$11.8 million.
Below the operating line, the quarter turned negative. TAL recorded net other expenses of US$189.7 million against net other income of US$67.1 million a year earlier, a swing the company attributed mainly to fair-value changes on certain investments. Income tax expense rose to US$135.9 million from US$51.1 million, chiefly on movements in deferred tax liabilities related to withholding tax. Net loss attributable to TAL was US$47.4 million, compared with net income of US$124.1 million a year earlier; the non-GAAP net loss was US$35.6 million against non-GAAP net income of US$135.8 million. Basic and diluted loss per ADS were both US$0.09, or US$0.06 on a non-GAAP basis. Three ADSs represent one Class A ordinary share.
For the six months ended 31 August the picture stayed positive. Net revenue rose 22.0% to US$1,753.0 million from US$1,436.4 million, operating income reached US$373.0 million against US$110.0 million, and net income attributable to TAL was US$360.6 million, up 132.1%, with non-GAAP net income of US$384.0 million, up about 116%.
Cash, cash equivalents and short-term investments totalled US$2,748.5 million at 31 August, down from US$3,239.3 million at 28 February 2026. President and CFO Alex Zhuangzhuang Peng said the quarter delivered steady revenue growth alongside further gains in operating efficiency, and that the company's focus remains on strengthening its core business and giving students a better learning experience. Looking ahead, he said TAL will deepen the integration of its industry experience with technology to create long-term value for students and society.
Gross profit increased 21.1% to US$594.6 million, lifting gross margin to 59.8% from 57.0%. Operating income more than doubled to US$235.9 million from US$96.1 million, a rise of 145.4%, while non-GAAP operating income, which excludes share-based compensation, grew 129.7% to US$247.7 million from US$107.8 million.
Total operating costs and expenses fell 0.8% to US$758.8 million. Revenue costs rose 8.0% to US$400.0 million, selling and marketing expenses fell 15.3% to US$226.4 million, and general and administrative expenses rose 3.7% to US$132.4 million. On a non-GAAP basis total operating costs and expenses declined 0.9% to US$747.0 million. Share-based compensation allocated to operating costs was essentially flat at US$11.8 million.
Below the operating line, the quarter turned negative. TAL recorded net other expenses of US$189.7 million against net other income of US$67.1 million a year earlier, a swing the company attributed mainly to fair-value changes on certain investments. Income tax expense rose to US$135.9 million from US$51.1 million, chiefly on movements in deferred tax liabilities related to withholding tax. Net loss attributable to TAL was US$47.4 million, compared with net income of US$124.1 million a year earlier; the non-GAAP net loss was US$35.6 million against non-GAAP net income of US$135.8 million. Basic and diluted loss per ADS were both US$0.09, or US$0.06 on a non-GAAP basis. Three ADSs represent one Class A ordinary share.
For the six months ended 31 August the picture stayed positive. Net revenue rose 22.0% to US$1,753.0 million from US$1,436.4 million, operating income reached US$373.0 million against US$110.0 million, and net income attributable to TAL was US$360.6 million, up 132.1%, with non-GAAP net income of US$384.0 million, up about 116%.
Cash, cash equivalents and short-term investments totalled US$2,748.5 million at 31 August, down from US$3,239.3 million at 28 February 2026. President and CFO Alex Zhuangzhuang Peng said the quarter delivered steady revenue growth alongside further gains in operating efficiency, and that the company's focus remains on strengthening its core business and giving students a better learning experience. Looking ahead, he said TAL will deepen the integration of its industry experience with technology to create long-term value for students and society.
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