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You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this annual report.
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A. Operating Results
Overview
TAL Education Group is a smart learning solutions provider in China. The acronym “TAL” stands for “Tomorrow Advancing Life,” which empowers people’s life-long growth. Since our inception in 2005, we have been providing learning services and others for learners to achieve well-rounded development and for teachers and learning institutions to enhance classroom quality and operating efficiency, as well as learning content solutions for learners and their parents to enrich their learning experience. We have witnessed tremendous developments in China’s learning industry and continued to upgrade our business strategies to capture the new opportunities brought by technology advancement and evolving learning needs. Our widely trusted brand, passionate team, technology capabilities and broad learning content are the foundations of our success in this ever-evolving industry.
Our businesses started in 2005 by launching tutoring services mainly for the K-12 age groups in China, and began to explore online learning services afterwards, aiming to empower life-long growth with love and technology. We further expanded our offerings by introducing enrichment learning services and learning content solutions and entering markets outside China in the recent years. In response to developments in market and regulatory environments, we ceased offering the K-9 Academic AST Services in Chinese mainland at the end of 2021. We have since realigned our business focus toward (i) learning services and others, and (ii) learning content solutions to capture evolving customer needs. We have continued integrating technology with learning, promote innovation and lead industry development since our inception. We are always full of the passion for empowering learners, teachers and learning institutions and keeping a keen prospective for the evolving and developing industry.
General Factors Affecting Our Results of Operations
Our results of operations are affected by various general factors affecting the learning solution market in China, which include changes in population growth, disposable income per capita and level of urbanization, changes in demand from individual learners or learning institutions for learning solutions, changes in regulatory, legal and public policy landscape, changes in technology development, and general economic and business conditions in China and globally. Adverse changes in any of these factors could materially and negatively affect demand for our products and services and our results of operations.
Specific Factors Affecting Our Results of Operations
We believe that our results of operations are more directly affected by specific factors relating to our business, which are primarily as follows:
Our ability to deliver high-quality products and services in our current business and attract and retain learners and customers
Historically, our success largely depends on our deep understanding of, and close relationship with, our learners and customers in the learning solution market. We seek to continue to maintain our competitive advantages in our current business.
Learning services and others. Specifically, the results of operations of our learning services and others depend on, among others, our abilities (i) to retain existing learners by maintaining the consistency and quality of our existing offering, (ii) to attract new learners through our branding, marketing and promotion efforts and by upgrading and expanding our offerings that meet the evolving needs of learners and their parents, and (iii) to optimize the pricing and structure of our programs. Furthermore, the success of our learning services and others depends on our technological capabilities, including our ability to (i) continue to upgrade and provide high value-added solutions for our existing customers leveraging our robust technology capabilities, (ii) increase customer penetration on the back of success stories of our customers in the same industry, and (iii) expand our customer base across different industries by accumulating industry insights and tailoring our products and services to meet the needs of customers in those industries.
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Learning content solutions. The results of operations of our learning content solutions are primarily dependent on, among others, our ability to (i) develop high-quality content through our in-house development team and with our external partners, (ii) source, procure and license high-quality learning content from external partners, (iii) further expand our accumulated broad learning content library, (iv) establish and maintain relationship with major distributors and (v) gain access to a wide range of distribution channels to facilitate the distribution of our rich content. Such results also depend on our technology capabilities and industry insights to develop and launch tech-enabled learning content in different formats that delivers a holistic learning experience and fulfills the evolving needs of learners and their parents.
We believe our ability to deliver high-quality products and services well positions us to keep competitive in our current business. However, any compromise in such ability may materially and adversely affect the success and growth of our current business, thus negatively impacting our results of operations.
Our ability to broaden offerings of our learning solutions and expand into various markets
Our results of operations are also affected by our ability to invest in and develop new product and service offerings and further penetrate our potential client base both domestically and globally.
Broaden offerings. We have accumulated deep understanding of China’s learning industry and are well-positioned in delivering learning solutions beyond traditional training courses and textbooks. Going forward, we intend to further broaden our footprint and launch new products and services accommodating the additional demand of customers in and beyond the learning industry.
Geographic expansion. In addition to our domestic presence, our successful experience and accumulated know-how in China has laid a solid foundation for our international expansion, and we expect to replicate the proven success in China in new regions.
Our ability to attract, train and retain talents
To manage and support our growth, it is critical for us to recruit, train and retain qualified talents, including teachers, research and development talents and management personnel, as well as other personnel in administrative and selling and marketing functions, in particular during the time as we are going through the transition of our business model.
Our ability to attract, train and retain these qualified talents primarily depends on our ability to offer competitive compensation, effective and continued training opportunities, and rotation opportunities within our organization, as well as the development path to management opportunities.
Our ability to maintain competitiveness in technology
We have demonstrated our capabilities in developing proprietary technologies and applying them to enhance our products and services and improve our user experience. We have developed and launched various solutions powered by technology.
We will continue to invest in developing and upgrading our technology with a focus on optimizing our products and services to increase their efficiency and delivering a tailored and differentiated user experience.
Our management of costs and expenses
Our ability to maintain and increase our operational efficiency also depends on our ability to effectively control our costs and expenses. Talent compensation is critical in ensuring development and delivery of high-quality products, contents and services. We offer competitive remuneration packages to our talents and expect to continue to do so in the future. Other important components of our cost of revenues and expenses include advertising and promotion expenses as well as rental expenses for our learning and service centers.
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Key Components of Results of Operations
Net Revenues
In the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, we generated total net revenues of $1,490.4 million, $2,250.2 million and $3,008.9 million, respectively.
The primary sources of our revenues included (i) learning services and others, and (ii) learning content solutions.
The following table presents our net revenues disaggregated by revenue sources (net of discounts, value added tax and surcharges).
For the Years Ended February 28/29,
2024 2025 2026
$ % $ % $ %
(in thousands of $, except percentages)
Learning services and others $ 1,051,783 70.6 $ 1,534,815 68.2 $ 1,946,958 64.7
Learning content solutions 438,657 29.4 715,418 31.8 1,061,950 35.3
Total $ 1,490,440 100.0 $ 2,250,233 100.0 $ 3,008,908 100.0
Cost of Revenues and Operating Expenses
The following table sets forth, for the periods indicated, our cost of revenues and operating expenses, in absolute amounts and as percentages of the total net revenues:
For the Years Ended February 28/29,
2024 2025 2026
$ % $ % $ %
(in thousands of $, except percentages)
Net revenues $ 1,490,440 100.0 $ 2,250,233 100.0 $ 3,008,908 100.0
Total cost of revenues(1) (684,316) (45.9) (1,049,975) (46.7) (1,343,430) (44.6)
Operating expenses:
Selling and marketing(2) (461,851) (31.0) (748,750) (33.3) (889,053) (29.5)
General and administrative(3) (413,502) (27.7) (454,663) (20.1) (500,386) (16.7)
Total operating expenses $ (875,353) (58.7) $ (1,203,413) (53.4) $ (1,389,439) (46.2)
Notes:
(1) Includes share-based compensation expenses of $9.6 million, $6.4 million and $1.9 million for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
(2) Includes share-based compensation expenses of $24.6 million, $16.1 million and $10.8 million for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
(3) Includes share-based compensation expenses of $54.7 million, $42.4 million and $30.4 million for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
Cost of Revenues
Our cost of revenues primarily consisted of costs of products and content materials, teaching fees, performance-linked bonuses and other compensation for our teachers, rental cost of our learning and service centers, compensation to personnel providing support for our services and products, depreciation, amortization and impairment of long-lived assets used in the provision of learning services, and other office supplies.
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Operating Expenses
Our operating expenses consisted primarily of selling and marketing expenses and general and administrative expenses.
Our selling and marketing expenses primarily consisted of advertising expenses, marketing and promotional expenses, compensation to our personnel involved in sales and marketing activities, rental and utilities expenses relating to selling and marketing functions, and depreciation, amortization and impairment of long-lived assets used in our selling and marketing activities. Our selling and marketing expenses as a percentage of net revenues was 31.0%, 33.3% and 29.5% for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
Our general and administrative expenses primarily consisted of compensation paid to our management and administrative personnel, research and development expenses, costs of third-party professional services, rental and utilities expenses relating to office and administrative functions, and depreciation, amortization and impairment of long-lived assets used in our administrative activities. Our general and administrative expenses as a percentage of our total net revenues was 27.7%, 20.1% and 16.7% for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
Taxation
Cayman Islands
We are an exempted company incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, we are not subject to income, corporate or capital gains tax, and the Cayman Islands currently have no form of estate duty, inheritance tax or gift tax. In addition, payments of dividends and capital in respect of our shares are not subject to taxation in the Cayman Islands and no withholding will be required in the Cayman Islands on the payment of any dividend or capital to any holder of our shares, nor will gains derived from the disposal of our shares be subject to Cayman Islands income or corporation tax.
Hong Kong
Under the current Hong Kong Inland Revenue Ordinance, the first 2 million Hong Kong dollars of profits earned by a company are subject to be taxed at an income tax rate of 8.25%, while the remaining profits will continue to be taxed at the existing tax rate, 16.5%, and each group of connected entities can nominate only one entity to benefit from the two-tiered tax rate. The provision for Hong Kong profits tax in our consolidated financial statements was immaterial during the fiscal year ended February 28, 2026.
PRC Enterprise Income Tax
Our subsidiaries in China are companies incorporated under PRC law and, as such, are subject to PRC enterprise income tax on their taxable income in accordance with the relevant PRC income tax laws. Pursuant to the EIT Law, a uniform 25% enterprise income tax rate is generally applicable to both foreign-invested enterprises and domestic enterprises, except where a special preferential rate applies.
Enterprises qualified as “National Encouraged Software Enterprise” are entitled to an income tax exemption for two calendar years, followed by reduced income tax at a rate of 12.5% for three calendar years. If an enterprise qualified as “National Encouraged Software Enterprise” is also entitled to other tax preferential policies in enterprise income tax, such enterprise shall elect only one tax preference among these tax preferential policies. Enterprises qualified as “High and New Technology Enterprises” are entitled to a 15% enterprise income tax rate rather than the 25% uniform statutory tax rate. An enterprise which qualifies as “Key Software Enterprise” is entitled an income tax exemption for five calendar years from such enterprise’s first profitable year, and a reduced income tax at a rate of 10% for the following calendar years.
The following preferential tax treatments are enjoyed by certain of our subsidiaries and VIEs and VIE Subsidiaries:
● TAL Beijing and Beijing Xintang Sichuang are qualified as High and New Technology Enterprises, or HNTE, and accordingly would be entitled to a preferential tax rate of 15% from calendar years 2020 through 2025. TAL Beijing and Beijing Xintang Sichuang are in the process of renewing their qualifications of HNTE and are expected to be subject to an EIT rate of 15% for calendar year 2026 as long as they maintain their HNTE status.
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● Yizhen Xuesi is qualified as HNTE and accordingly entitled to a preferential tax rate of 15% from calendar years 2023 through 2026.
● Shenzhen Xingtong is qualified as HNTE and accordingly entitled to a preferential tax rate of 15% from calendar years 2024 through 2026.
Preferential tax treatments granted to our PRC subsidiaries and VIEs and VIE Subsidiaries by local government authorities are subject to review and may be adjusted or revoked at any time. The enterprises which enjoy preferential tax treatments shall also provide filing documents with respect to preferential tax treatments to the relevant tax authority when filing annual enterprise income tax returns for the settlement of tax payments. The discontinuation of any preferential tax treatments currently available to us, will cause our effective tax rate to increase, which could have a material adverse effect on our results of operations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The discontinuation of any of the preferential tax treatments currently available to us in China could adversely affect our results of operations and we face risks relating to the discretion of relevant tax authorities in interpreting and implementing tax-related laws and regulations.”
PRC Withholding Tax
As a Cayman Islands holding company, we may receive dividends from our PRC operating subsidiaries through TAL Hong Kong. The EIT Law and its implementation rules provide that dividends paid by a PRC entity to a non-resident enterprise for income tax purposes is subject to PRC withholding tax at a rate of 10%, subject to reduction by an applicable tax treaty with China. According to the Double Tax Avoidance Arrangement, dividends paid to shareholders residing in Hong Kong are subject to a reduced 5% rate of tax withholding provided that the Hong Kong residents are deemed by the relevant PRC tax authorities to be “non-PRC resident enterprises” under the EIT Law and the Hong Kong residents’ equity interests in Chinese mainland dividend issuer is above 25%. In February 2018, the SAT promulgated the SAT Circular 9 to clarify the definition of beneficial owner under PRC tax treaties and tax arrangements. According to the SAT Circular 9, a beneficial owner refers to a party who holds ownership and control over incomes or the rights or assets from which the incomes are derived. In determining whether a resident of the other contracting party to a double taxation agreement, or DTA, who is applying for enjoying preferential treatment under the DTA has the status as a beneficial owner, comprehensive analysis shall be conducted in light of the actual circumstances of the specific case and based on several factors, include among others, if (1) an applicant is under the obligation to pay 50% or more of the incomes received to any resident of any third country (region) within 12 months upon receipt of the incomes; and (2) if the business activities carried out by an applicant constitutes substantive business activities. Substantive business activities shall include substantive manufacturing, distribution, management and other activities. Whether an applicant’s business activities are substantive shall be determined based on the functions actually performed by the applicant and the risks assumed thereby. The substantive investment and shareholding management activities carried out by the applicant may constitute substantive business activities. Where the applicant concurrently engages in investment and shareholding management activities that do not constitute substantive business activities and other business activities, if the other business activities are not significant enough, the applicant will not be considered as engaging in substantive business activities and hence more likely not a beneficial owner.
In addition, if the incomes derived by any of the following applicants from China are dividends, the relevant applicant may be directly determined as having the status of a “beneficial owner”:
(1) The government of the other contracting party to the relevant DTA;
(2) A company that is a resident of, and is listed on the market of, the other contracting party to the relevant DTA;
(3) A resident individual of the other contracting party to the relevant DTA; or
(4) Where one or more parties referred to in Item (1) through Item (3) directly or indirectly hold 100% of the shares of the applicant, and the mid-tier in the case of indirect shareholding is a resident of China or a resident of the other contracting party to the relevant DTA.
Further, according to the SAT Circular 9, agents or designated payees are not beneficial owners. The fact that an applicant collects incomes via an agent or a designated payee does not affect the determination of whether the applicant has the status of a beneficial owner irrespective of whether an agent or a designated payee is a resident of the other contracting party to the relevant DTA.
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According to the SAT Circular 9, if the business activities carried out by an applicant do not constitute substantive business activities, then such applicant is likely not to be regarded as a beneficial owner. Although we may use our Hong Kong subsidiaries as a platform to expand our business in the future, our Hong Kong subsidiaries currently do not engage in any substantive business activities and thus it is possible that our Hong Kong subsidiaries may not be regarded as “beneficial owners” for the purposes of the SAT Circular 9 and the dividends they receive from our PRC subsidiaries would be subject to withholding tax at a rate of 10%. In addition, our Hong Kong subsidiaries may be considered PRC resident enterprises for enterprise income tax purposes if the relevant PRC tax authorities determine that our Hong Kong subsidiaries’ “de facto management bodies” are within China, in which case dividends received by them from our PRC subsidiaries would be exempt from PRC withholding tax because such income is exempted under the EIT Law for a PRC resident enterprise recipient. As there are substantial uncertainties as to the interpretation and implementation of the EIT Law and its implementation rules, it is uncertain whether, if we are deemed a PRC resident enterprise, any dividends to be distributed by us to our non-PRC shareholders and ADS holders would be subject to any PRC withholding tax. For a detailed discussion of PRC tax issues related to resident enterprise status, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Under the EIT Law, we may be classified as a PRC “resident enterprise,” which could result in unfavorable tax consequences to us and our shareholders outside of China.”
On September 29, 2018, the SAT promulgated Notice on the Scope of Application Concerning the Policy for Temporary Exemption of Withholding Income Tax on Direct Investment by Overseas Investors with Distributed Profits, or Circular 102. Pursuant to Circular 102, the scope of application of the temporary exemption of Withholding Income Tax was expanded from where overseas investors use the profits obtained from resident enterprises within China to invest directly in the encouraged investment projects, to where overseas investors use the profits obtained from resident enterprises within China to invest directly in all projects and fields which are not prohibited from foreign investment.
Value-Added Tax (VAT)
Our major PRC subsidiaries and the VIEs and VIE Subsidiaries are subject to VAT on revenue under the VAT regime. In general, the applicable VAT rate on the revenue earned from sale of goods is 13%, and from provision of our principal services is 6%. Certain of our smaller PRC operating entities are small-scale taxpayers subject to a 3% VAT collection rate under the simplified calculation method and are not entitled to credit input VAT. Our PRC subsidiaries and the VIEs and VIE Subsidiaries that are general VAT taxpayers are entitled to credit input VAT paid on qualified purchases against output VAT on sales, subject to the restrictions under PRC VAT laws and regulations. Revenue is recognized net of VAT in our consolidated income statement.
Critical Accounting Estimates
We prepare our financial statements in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect reported amounts of assets, liabilities, revenue, costs, and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and other factors that we believe to be relevant under the circumstances. Our management has discussed the development, selection and disclosure of these estimates with our board of directors. Since our financial reporting process inherently relies on the use of estimates and assumptions, actual results may differ from these estimates under different assumptions or conditions.
An accounting estimate is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that could reasonably have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our consolidated financial statements. We consider the accounting estimates discussed below to be critical to an understanding of our consolidated financial statements because they involve the greatest reliance on our management’s judgment. You should read the following descriptions of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included elsewhere in this annual report.
Impairment assessment of long-term investments
Our long-term investments include equity securities without readily determinable fair values, equity securities with readily determinable fair values, equity method investments, available-for-sale investments, fair value option investment and held-to-maturity investments. An impairment charge is recorded when the carrying amount of the investment exceeds its fair value.
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Application of a long-term investments impairment test requires significant management judgment. We make qualitative and quantitative analysis to identify whether indicators of impairment exist. We make assessment of whether an investment is impaired based on performance and financial position of the investee as well as other evidence of market value at each reporting date. Such assessment includes, but is not limited to, investments’ financial position and future cash flows, the new regulations, and other assumptions. When indicators of impairment exist, we prepare quantitative measurements of the fair value by using the income approach, if applicable, with observable or unobservable inputs and assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value of the long-term investments.
Fair value of level 3 available-for-sale investments
Available-for-sale investments are reported at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income / (loss) as a component of shareholders’ equity. Declines in the fair value of individual available-for-sale investments below their amortized cost due to credit-related factors are recognized as an allowance for credit losses, whereas if declines in the fair value are not due to credit-related factors, the loss is recorded in other comprehensive income / (loss).
The available-for-sale investments classified within Level 3 are valued using the income approach, the binomial option model or the backsolve method, where appropriate. The income approach, binomial option model and backsolve method require the use of significant unobservable inputs (Level 3 inputs) which involve significant management judgment and estimation, such as weighted average cost of capital, discount for lack of marketability and expected volatilities.
Revenue recognition related to sales of physical products bundled with digital resources
For the sales of physical products bundled with digital resources, we have identified two performance obligations, the physical products and the digital resources. The transaction price is allocated to each performance obligation based on the estimated stand-alone selling prices. If a stand-alone selling price is not directly observable, we estimate the stand-alone selling price by using adjusted market assessment approach or expected cost plus margin approach. Changes in the estimate and assumption could materially affect the revenue recognized during the year.
Valuation allowance for deferred tax asset
Deferred income taxes are recognized for temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, net of operating loss carry forwards and credits, by applying enacted statutory tax rates applicable to future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authorities. An uncertain income tax position will not be recognized if it has less than 50% likelihood of being sustained. Interest and penalties on income taxes will be classified as a component of the provisions for income taxes.
Significant judgment is required in determining the valuation allowance. In assessing the need for a valuation allowance, we consider all sources of factors, including estimates such as projected future taxable income, reversing taxable temporary differences and ongoing tax planning strategies. If it is determined that we are able to realize deferred tax assets in excess of the net carrying value or to the extent we are unable to realize a deferred tax asset, we would adjust the valuation allowance in the period in which such a determination is made, with a corresponding increase or decrease to earnings.
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Results of Operations
The following table sets forth a summary of our consolidated results of operations for the periods indicated, both in absolute amounts and as percentages of our net revenues. This information should be read together with our audited consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.
For the Years Ended February 28/29,
2024 2025 2026
$ % $ % $ %
(in thousands of $, except percentages)
Net revenues $ 1,490,440 100.0 % $ 2,250,233 100.0 % $ 3,008,908 100.0 %
Cost of revenues(1) (684,316) (45.9) (1,049,975) (46.7) (1,343,430) (44.6)
Gross profit 806,124 54.1 1,200,258 53.3 1,665,478 55.4
Operating expenses
Selling and marketing(2) (461,851) (31.0) (748,750) (33.3) (889,053) (29.5)
General and administrative(3) (413,502) (27.7) (454,663) (20.1) (500,386) (16.7)
Total operating expenses (875,353) (58.7) (1,203,413) (53.4) (1,389,439) (46.2)
(Loss)/income from operations (69,229) (4.6) (3,155) (0.1) 276,039 9.2
Interest income, net 84,928 5.7 83,482 3.7 62,030 2.1
Other income, net 48,766 3.3 64,717 2.9 390,155 13.0
Impairment loss on long-term investments (46,982) (3.2) (12,933) (0.6) (42,814) (1.5)
Income before income tax and loss from equity method investments 17,483 1.2 132,111 5.9 685,410 22.8
Income tax expenses (15,379) (1.0) (38,320) (1.7) (154,417) (5.1)
Loss from equity method investments (6,242) (0.4) (9,531) (0.4) (855) (0.1)
Net (loss) /income (4,138) (0.2) 84,260 3.8 530,138 17.6
Add: Net loss attributable to non-controlling interests shareholders 565 (0.0) 331 (0.0) 613 (0.0)
Net (loss)/income attributable to TAL Education Group’s shareholders $ (3,573) (0.2) $ 84,591 3.8 $ 530,751 17.6
(1) Includes share-based compensation expenses of $9.6 million, $6.4 million and $1.9 million for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
(2) Includes share-based compensation expenses of $24.6 million, $16.1 million and $10.8 million for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
(3) Includes share-based compensation expenses of $54.7 million, $42.4 million and $30.4 million for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively.
Fiscal Year Ended February 28, 2026 Compared to Fiscal Year Ended February 28, 2025
Net Revenues
Our total net revenues increased by 33.7% to $3,008.9 million for the fiscal year ended February 28, 2026 from $2,250.2 million for the fiscal year ended February 28, 2025. The increase was mainly due to the increase of $412.2 million in learning services and others and increase of $346.5 million in learning content solutions, respectively, as further discussed below.
Learning services and others
Revenues from learning services and others increased by 26.9% to $1,947.0 million for the fiscal year ended February 28, 2026 from $1,534.8 million for the fiscal year ended February 28, 2025. The increase was primarily due to the year-over-year enrollment growth of Xueersi Peiyou as a result of the expansion of our capacity.
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Learning content solutions
Revenues from learning content solutions increased by 48.4% to $1,061.9 million for the fiscal year ended February 28, 2026 from $715.4 million for the fiscal year ended February 28, 2025. The increase was mainly attributed to the sales volume growth of our learning devices and books integrated with digital learning experiences, which was fueled by our enhanced product development and go-to-market capabilities.
Operating Costs and Expenses
In the fiscal year ended February 28, 2026, our operating costs and expenses were $2,732.9 million, representing a 21.3% increase from $2,253.4 million in the fiscal year ended February 28, 2025. The increase was primarily due to increases in cost of revenues and selling and marketing expenses.
Cost of Revenues. Our cost of revenues increased by 27.9% to $1,343.4 million for the fiscal year ended February 28, 2026 from $1,050.0 million for the fiscal year ended February 28, 2025. This increase was primarily due to the increases in (i) costs of products and content materials of $67.1 million primarily due to the growth of Xueersi Peiyou and the sales volume growth of our learning devices and books integrated with digital learning experiences, (ⅱ) rental cost of our learning and service centers of $38.8 million due to our capacity expansion for Xueersi Peiyou, (ⅲ) compensation to personnel providing support for our services and products of $36.8 million and (ⅳ) teaching fees, performance-linked bonuses and other compensation for our teachers of $78.2 million primarily due to the increase in our workforce, which were in turn driven by the expansion of our business. The increase trend in cost of revenues is consistent with our revenue growth.
Selling and Marketing Expenses. Our selling and marketing expenses increased by 18.7% to $889.1 million for the fiscal year ended February 28, 2026 from $748.8 million for the fiscal year ended February 28, 2025. This increase was primarily due to increase in advertising, marketing and promotional activities. Selling and marketing expenses for the fiscal year ended February 28, 2026 also included $10.8 million in share-based compensation expenses, as compared to $16.1 million for the fiscal year ended February 28, 2025.
General and Administrative Expenses. Our general and administrative expenses increased by 10.1% to $500.4 million for the fiscal year ended February 28, 2026 from $454.7 million for the fiscal year ended February 28, 2025. Our general and administrative expenses increased slightly despite substantial increase in revenues from fiscal year 2025 to fiscal year 2026 because our general and administrative expenses primarily consist of compensation paid to our management and administrative personnel, which do not grow in a linear manner with revenue growth. In addition, as we scaled our business, we have made efforts to optimize our operational efficiency.
Gross Profit Margin
Our gross profit margin increased to 55.4% for the fiscal year ended February 28, 2026 from 53.3% for the fiscal year ended February 28, 2025. The increase was the result of a decrease in our cost of revenues as a percentage of net revenues from 46.7% in fiscal year 2025 to 44.6% in fiscal year 2026. The primary driver behind this decline was a 1.0% decrease in costs of products and content materials and a 0.5% decrease of teaching fees, performance-linked bonuses and other compensation for our teachers as a percentage of net revenues, which was attributed to improved operational efficiency across our services and products.
Interest Income, Net
We had interest income of $62.0 million for the fiscal year ended February 28, 2026, compared to $83.5 million for the fiscal year ended February 28, 2025. In both fiscal years, our interest income consisted primarily of interest earned from our cash and cash equivalents, short-term and long-term investments. The decrease in our interest income from fiscal year 2025 to fiscal year 2026 was primarily due to the changes in our cash management strategies. In particular, we invested in fewer term deposits compared with the prior fiscal year, which resulted in a reduction in interest income.
Other Income, Net
We recorded other income of $390.2 million and $64.7 million for the fiscal years ended February 28, 2026 and February 28, 2025, respectively. The increase was primarily driven by fluctuations in the fair value of certain investments.
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Impairment Loss on Long-Term Investments
We incurred $42.8 million of impairment loss on long-term investments for the fiscal year ended February 28, 2026, compared to $12.9 million for the fiscal year ended February 28, 2025. Impairment loss on long-term investments was due to declines in the value of long-term investments in several investees.
Income Tax Expenses
We had $154.4 million of income tax expenses for the fiscal year ended February 28, 2026, compared to $38.3 million of income tax expenses for the fiscal year ended February 28, 2025. The change was primarily attributable to an increase in operating income, as well as changes in the fair value of certain investments.
Net Income
As a result of the foregoing, we recorded net income of $530.1 million for the fiscal year ended February 28, 2026, compared to net income of $84.3 million for the fiscal year ended February 28, 2025.
Fiscal Year Ended February 28, 2025 Compared to Fiscal Year Ended February 29, 2024
Net Revenues
Our total net revenues increased by 51.0% to $2,250.2 million for the fiscal year ended February 28, 2025 from $1,490.4 million for the fiscal year ended February 29, 2024. The increase was mainly due to the increase of $483.0 million in learning services and others and increase of $276.8 million in learning content solutions, respectively, as further discussed below.
Learning services and others
Revenues from learning services and others increased by 45.9% to $1,534.8 million for the fiscal year ended February 28, 2025 from $1,051.8 million for the fiscal year ended February 29, 2024. The increase was primarily due to the year-over-year enrollment growth of Xueersi Peiyou as a result of the expansion of our capacity.
Learning content solutions
Revenues from learning content solutions increased by 63.1% to $715.4 million for the fiscal year ended February 28, 2025 from $438.6 million for the fiscal year ended February 29, 2024. The increase was mainly attributed to the sales volume growth of our physical products bundled with digital resources, which was fueled by our enhanced product development and go-to-market capabilities.
Operating Costs and Expenses
In the fiscal year ended February 28, 2025, our operating costs and expenses were $2,253.4 million, representing a 44.5% increase from $1,559.7 million in the fiscal year ended February 29, 2024. The increase was primarily due to increases in cost of revenues and selling and marketing expenses.
Cost of Revenues. Our cost of revenues increased by 53.4% to $1,050.0 million for the fiscal year ended February 28, 2025 from $684.3 million for the fiscal year ended February 29, 2024. This increase was primarily due to the increases in (i) costs of products and content materials of $91.3 million primarily due to the growth of Xueersi Peiyou and the sales volume growth of our physical products bundled with digital resources, (ⅱ) rental cost of our learning and service centers of $55.7 million due to our capacity expansion for Xueersi Peiyou, (ⅲ) compensation to personnel providing support for our services and products of $46.9 million and (ⅳ) teaching fees, performance-linked bonuses and other compensation for our teachers of $96.7 million primarily due to the increase in our workforce, which were in turn driven by the expansion of our business. The increase trend in cost of revenues is consistent with our revenue growth.
Selling and Marketing Expenses. Our selling and marketing expenses increased by 62.1% to $748.8 million for the fiscal year ended February 28, 2025 from $461.9 million for the fiscal year ended February 29, 2024. This increase was primarily due to increase in advertising, marketing and promotional activities. Selling and marketing expenses for the fiscal year ended February 28, 2025 also included $16.1 million in share-based compensation expenses, as compared to $24.6 million for the fiscal year ended February 29, 2024.
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General and Administrative Expenses. Our general and administrative expenses increased by 10.0% to $454.7 million for the fiscal year ended February 28, 2025 from $413.5 million for the fiscal year ended February 29, 2024. Our general and administrative expenses increased slightly despite substantial increase in revenues from fiscal year 2024 to fiscal year 2025 because our general and administrative expenses primarily consist of compensation paid to our management and administrative personnel, which do not grow in a linear manner with revenue growth. In addition, as we scaled our business, we have made efforts to optimize our operational efficiency.
Gross Profit Margin
Our gross profit margin slightly decreased to 53.3% for the fiscal year ended February 28, 2025 from 54.1% for the fiscal year ended February 29, 2024. The decrease was the result of an increase in our cost of revenues as a percentage of net revenues from 45.9% in fiscal year 2024 to 46.7% in fiscal year 2025. The primary driver behind this uptick was a 1.0% increase in the rental cost of our learning and service centers as a percentage of net revenues, which was attributed to our capacity expansion for Xueersi Peiyou.
Interest Income, Net
We had interest income, net of $83.5 million for the fiscal year ended February 28, 2025, compared to $84.9 million for the fiscal year ended February 29, 2024. In both fiscal years, our interest income consisted primarily of interest earned from our cash and cash equivalents and short-term investments, and remained relatively stable.
Other Income, Net
We recorded other income of $64.7 million and $48.8 million for the fiscal year ended February 28, 2025 and February 29, 2024, respectively, which was primarily due to an increase in the fair value of our wealth management products.
Impairment Loss on Long-Term Investments
We incurred $12.9 million of impairment loss on long-term investments for the fiscal year ended February 28, 2025, compared to $47.0 million for the fiscal year ended February 29, 2024. Impairment loss on long-term investments was due to declines in the value of long-term investments in several investees.
Income Tax Expenses
We had $38.3 million of income tax expenses for the fiscal year ended February 28, 2025, compared to $15.4 million of income tax expenses for the fiscal year ended February 29, 2024.
Net Income/(Loss)
As a result of the foregoing, we recorded net income of $84.3 million for the fiscal year ended February 28, 2025, compared to net loss of $4.1 million for the fiscal year ended February 29, 2024.
Inflation
According to the National Bureau of Statistics of China, the year-over-year percent changes in the consumer price index in China for February 2024, 2025 and 2026 were an increase of 0.7%, a decrease of 0.7% and an increase of 1.3%, respectively. Inflation has had some impacts on our operations in recent years, in the form of higher salaries for our teachers and other staff and higher rental payments for certain of the office space and service center and learning center space we lease. We can provide no assurance that we will not continue to be affected in the future by higher rates of inflation in China, or that we will be able to adjust our tuition rates to mitigate the impact of inflation on our results of operations.
Recent Accounting Pronouncements
A list of recent accounting pronouncements that are relevant to us is included in Note 2 to our audited consolidated financial statements included elsewhere in this annual report.
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B. Liquidity and Capital Resources
Cash Flows and Working Capital
We have financed our operations and the expansion of our business primarily through cash flows from operations and other financing activities, such as proceeds from our various private placements of our common shares, offering or private placement of convertible notes and certain credit facilities. As of February 28, 2026, we had $1,523.9 million in cash and cash equivalents, $262.2 million in restricted cash and $1,715.4 million in short-term investments. Our cash and cash equivalents consist of cash on hand, demand deposits and highly liquid investments, which are unrestricted as to withdrawal or use, or have original maturities of three months or less when purchased. Our restricted cash mainly represents security deposits held in designated bank accounts for future transactions, deposits required by PRC government authorities related to learning programs and services and establishment of new schools and subsidiaries. The short-term investments primarily consist of wealth management products with variable interest rates with original maturity of more than three months and less than one year.
The following table sets forth a summary of our cash and cash equivalents, restricted cash and short-term investments inside and outside China as of February 28, 2026.
Cash, cash Cash, cash Total
equivalents equivalents cash, cash
and and equivalents Short-term
restricted restricted and Short-term investments Total
cash in cash in other restricted investments in other short-term
RMB currencies cash in RMB currencies investments
(in thousands of $)
Entities outside China 20,173 484,947 505,120 — 1,275,552 1,275,552
VIEs in China 647,658 61 647,719 81,075 — 81,075
Non-VIEs in China 632,871 328 633,199 358,819 — 358,819
Entities inside China 1,280,529 389 1,280,918 439,894 — 439,894
Total 1,300,702 485,336 1,786,038 439,894 1,275,552 1,715,446
Although we consolidate the results of the VIEs, our access to the VIEs is only through the VIE Contractual Arrangements. See “Item 4. Information on the Company—C. Organizational Structure—VIE Contractual Arrangements.” For restrictions and limitations on liquidity and capital resources as a result of our corporate structure, see “—Holding Company Structure.”
We believe that our current cash, cash equivalents, restricted cash and short-term investments and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs to support our organic growth, including our cash needs for working capital and capital expenditures, for at least the next 12 months. However, we may need additional cash resources in the future if we experience changed business conditions or other developments or if we find and wish to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions. We may seek to issue debt or equity securities or obtain a credit facility. Any issuance of equity securities could cause dilution to our shareholders. Any incurrence of indebtedness could increase our debt service obligations and cause us to be subject to restrictive operating and finance covenants. In addition, there can be no assurance that when we need additional cash resources, financing will be available to us on commercially acceptable terms and amount, or at all.
The following table sets forth a summary of our cash flows for the periods indicated.
For the Years Ended February 28/29,
2024 2025 2026
(in thousands of $)
Net cash provided by operating activities $ 306,172 $ 397,923 $ 601,467
Net cash provided by / (used in) investing activities 95,068 (847,028) (175,746)
Net cash used in financing activities (233,095) (13,167) (643,512)
Effect of exchange rate changes (5,576) (3,473) 12,098
Net increase / (decrease) in cash, cash equivalents and restricted cash 162,569 (465,745) (205,693)
Cash, cash equivalents and restricted cash at the beginning of the year 2,294,907 2,457,476 1,991,731
Cash, cash equivalents and restricted cash at the end of the year $ 2,457,476 $ 1,991,731 $ 1,786,038
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Operating Activities
Net cash provided by operating activities amounted to $601.5 million in the fiscal year ended February 28, 2026, as compared to net cash provided by operating activities of $397.9 million in the fiscal year ended February 28, 2025. Net cash provided by operating activities in the fiscal year ended February 28, 2026 reflected net income of $530.1 million, adjusted by non-cash expenses and gain. Key adjustments mainly included (i) changes in operating assets and liabilities, mainly because a significant amount of cash payments for our learning services and others were recorded as deferred revenues, and due to the growth of our learnings services and others in fiscal year 2026 as the result of our capacity expansion for Xueersi Peiyou, our deferred revenue significantly increased by $211.0 million as of the end of fiscal year 2026 as compared to the end of fiscal year 2025, (ii) an increase in the movement of deferred income taxes of $65.8 million arising from fair value change of investments, and (iii) a large portion of non-cash expenses incurred during the period, primarily consisting of depreciation of property and equipment of $68.6 million, share-based compensation expenses of $43.1 million, inventories provision and others of $37.7 million and impairment loss on long-term investments of $42.8 million recorded based on our impairment assessment of the investments in several investees after reviewing their financial performance as of February 28, 2026. Such non-cash expenses were partially offset by gain from fair value change of investments of $412.4 million.
Net cash provided by operating activities in fiscal year 2026 increased by $203.5 million compared to that in fiscal year 2025. This year-over-year increase was mainly driven by a $279.2 million rise in operating income.
Net cash provided by operating activities amounted to $397.9 million in the fiscal year ended February 28, 2025, as compared to net cash provided by operating activities of $306.2 million in the fiscal year ended February 29, 2024. Net cash provided by operating activities in the fiscal year ended February 28, 2025 reflected net income of $84.3 million, adjusted by non-cash expenses and gain, mainly including share-based compensation expenses of $64.9 million, and changes in operating assets and liabilities, mainly because a significant amount of cash payments for our learning services and others were recorded as deferred revenues, and due to the growth of our learnings services and others in fiscal year 2025 as the result of our capacity expansion for Xueersi Peiyou, our deferred revenue significantly increased by $242.9 million as of the end of fiscal year 2025 as compared to the end of fiscal year 2024.
Net cash provided by operating activities in fiscal year 2025 increased by $91.8 million compared to that in fiscal year 2024. This year-over-year increase was primarily because (i) we turned net losses into net profits and achieved a net profit increase of $88.4 million, and (ii) an increase in the movement of deferred revenue of $52.0 million, as a result of the growth of our learning services due to our capacity expansion for Xueersi Peiyou, partially offset by (i) a decrease in share-based compensation expenses of $24.0 million, and (ii) a decrease in impairment loss on long-term investments of $34.0 million.
Investing Activities
Net cash used in investing activities amounted to $175.7 million in the fiscal year ended February 28, 2026, as compared to net cash used in investing activities of $847.0 million in the fiscal year ended February 28, 2025. Net cash used in investing activities in the fiscal year ended February 28, 2026 primarily related to purchase of short-term investments of $1,956.9 million, payments for long-term investments of $406.8 million, purchase of property and equipment of $93.2 million, and business acquisitions, net of cash acquired $95.5 million, partially offset by proceeds from maturity of short-term investment of $2,368.5 million.
Net cash used in investing activities amounted to $847.0 million in the fiscal year ended February 28, 2025, as compared to net cash provided by investing activities of $95.1 million in the fiscal year ended February 29, 2024. Net cash used in investing activities in the fiscal year ended February 28, 2025 primarily related to purchase of short-term investments of $2,083.4 million, payments for long-term investments of $101.8 million, and purchase of property and equipment of $111.7 million, partially offset by proceeds from maturity of short-term investment of $1,428.3 million.
Financing Activities
Net cash used in financing activities amounted to $643.5 million in the fiscal year ended February 28, 2026, as compared to net cash used in financing activities of $13.2 million in the fiscal year ended February 28, 2025. Net cash used in financing activities in the fiscal year ended February 28, 2026 was mainly attributable to repurchases of our common shares.
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Net cash used in financing activities amounted to $13.2 million in the fiscal year ended February 28, 2025, as compared to net cash used in financing activities of $233.1 million in the fiscal year ended February 29, 2024. Net cash used in financing activities in the fiscal year ended February 28, 2025 was mainly attributable to net proceeds and repayment of short-term debts and repurchases of our common shares.
Material Cash Requirements
Our material cash requirements as of February 28, 2026 and any subsequent interim period primarily include our capital expenditures, lease property management fee obligations, purchase of property and equipment obligations, and long-term investment obligations.
For the fiscal years 2024 to 2026, our primary capital expenditures were mainly related to construction projects costs, leasehold improvements and purchase of servers, computers, network equipment, and software systems. Our capital expenditures were $118.6 million, $111.5 million and $92.0 million for the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively, representing 8.0%, 5.0% and 3.1% of our total net revenues for such years, respectively. See “Item 4. Information on the Company—D. Property, Plants and Equipment” for more information.
Our lease property management fee obligations represent our non-cancelable agreements for property management fees in relation to leases for our offices, learning centers and service centers. As of February 28, 2026, the payment due within one year and thereafter for our lease property management fee obligations amounted to $20.4 million.
Purchase of property and equipment obligations represent our outstanding capital commitments mainly relating to capital expenditures of office space construction in Jiangsu. As of February 28, 2026, the payment due within one year and thereafter for our purchase of property and equipment obligations amounted to $21.2 million.
Our long-term investment obligations represent obligations in connection with several investments as of February 28, 2026. As of February 28, 2026, the payment due within one year and thereafter for our long-term investment obligations amounted to $0.9 million.
We intend to fund our existing and future material cash requirements primarily with anticipated cash flows from operations, our existing cash balance and other financing alternatives. We will continue to make cash commitments, including capital expenditures, to support the growth of our business.
We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity, or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Other than as discussed above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of February 28, 2026.
Holding Company Structure
Overview
We are a holding company with no material operations of our own. A substantial majority of our learning business in China is conducted through the VIE Contractual Arrangements. See “Item 4. Information on the Company—C. Organizational Structure—VIE Contractual Arrangements.” In the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, the VIEs and VIE Subsidiaries contributed 82.6%, 81.5% and 78.6%, respectively, of our total net revenues.
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Conducting most of our operations through the VIE Contractual Arrangements entails a risk that we may lose effective control over the VIEs and VIE Subsidiaries, which may result in our being unable to consolidate their financial results with our results and may impair our access to their cash flow from operations and thereby reduce our liquidity. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Corporate Structure” for more information, including the risk factors titled “If the PRC government determines that the agreements that establish the structure for operating our business in China are not in compliance with applicable PRC laws and regulations, we could be subject to severe penalties” and “We rely on the VIE Contractual Arrangements for our operations in China, which may not be as effective in providing operational control as direct ownership.”
Dividend Distributions
As a holding company, our ability to pay dividends and other cash distributions to our shareholders depends upon dividends and other distributions paid to us by our PRC subsidiaries. The amount of dividends paid by our PRC subsidiaries to us primarily depends on the service fees paid to our PRC subsidiaries from the VIEs, and, to a lesser degree, our PRC subsidiaries’ retained earnings. In the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, TAL Beijing and its designated PRC subsidiaries collectively charged $201.1 million, $345.8 million and $462.0 million in service fees, respectively, to the VIEs. The VIEs collectively paid $196.4 million, $170.1 million and $1,032.8 million in service fees to TAL Beijing and its designated PRC subsidiaries in the fiscal years ended February 29, 2024, February 28, 2025 and February 28, 2026, respectively. As of February 29, 2024, February 28, 2025 and February 28, 2026, the balance of the amount payable for the fees was $537.0 million, $712.7 million and $141.9 million, respectively.
Under PRC laws, each of our PRC subsidiaries and VIEs and VIE Subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory surplus reserve until such reserve reaches 50% of its registered capital and to further set aside a portion of its after-tax profit to fund the reserve fund at the discretion of our board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.
Pursuant to the VIE Contractual Arrangements, the earnings and cash of each of the VIEs (including dividends received from their respective VIE Subsidiaries) are used to pay service fees in RMB to TAL Beijing or its designated affiliates, as applicable, in the manner and amount set forth in the VIE Contractual Arrangements. After paying the applicable withholding taxes, making appropriations for its statutory reserve requirement and retaining any profits from accumulated profits, the remaining net profits of TAL Beijing and its designated affiliates would be available for distribution to TAL Hong Kong, and from TAL Hong Kong to our company. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Dividends we receive from our PRC subsidiaries may be subject to PRC withholding tax” and “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Taxation” for detailed discussions on withholding taxes. As of February 28, 2026, the net assets of our PRC subsidiaries and VIEs and VIE Subsidiaries which were restricted due to statutory reserve requirements and other applicable laws and regulations, and thus not available for distribution, was in aggregate $947.1 million, and the net assets of our PRC subsidiaries and VIEs and VIE Subsidiaries which were unrestricted and thus available for distribution was in aggregate $3,453.4 million.
We do not believe that these restrictions on the distribution of our net assets will have a significant impact on our ability to timely meet our financial obligations in the future. See “Item 3. Risk Factors—D. Risks Related to Doing Business in China—We may rely on dividends paid by our subsidiaries for our cash needs, and any limitation on the ability of our subsidiaries to make payments to us could limit our ability to pay dividends to holders of our ADSs and common shares” for more information.
Furthermore, cash transfers from our PRC subsidiaries to our subsidiaries in Hong Kong are subject to PRC government control of currency conversion. Restrictions on the availability of foreign currency may affect the ability of our PRC subsidiaries and the VIEs and VIE Subsidiaries to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Governmental control of currency conversions may affect the value of your investment.”
C. Research and Development, Patents and Licenses, etc.
See “Item 4. Information on the Company—B. Business Overview—Technology, Research and Development” and “Item 4. Information on the Company—B. Business Overview—Intellectual Property.”
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D. Trend Information
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the fiscal year ended February 28, 2026 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
E. Critical Accounting Estimates
For our critical accounting estimates, see “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical Accounting Estimates.”