Earnings release
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TAL InvestorRoom TAL Education Group Announces Unaudited Financial Results for the Second Fiscal Quarter Ended August 31, 2026, Declares Cash Dividend and Issues Notice of Annual General Meeting BEIJING, Oct. 29, 2026 /PRNewswire/ -- TAL Education Group (NYSE: TAL) ("TAL" or the "Company"), a smart learning solutions provider in China, today announced its unaudited financial results for the second quarter of fiscal year 2027 ended August 31, 2026 and issued notice of Annual General Meeting. Highlights for the Second Quarter of Fiscal Year 2027 Net revenues were US$994.6 million, compared to net revenues of US$861.4 million in the same period of the prior year. Income from operations was US$235.9 million, compared to income from operations of US$96.1 million in the same period of the prior year. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$247.7 million, compared to non-GAAP income from operations of US$107.8 million in the same period of the prior year. Net loss attributable to TAL was US$47.4 million, compared to net income attributable to TAL of US$124.1 million in the same period of the prior year. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$35.6 million, compared to non-GAAP net income attributable to TAL of US$135.8 million in the same period of the prior year. Basic and diluted net loss per American Depositary Share ("ADS") were both US$0.09. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.06. Three ADSs represent one Class A common share. Cash, cash equivalents and short-term investments totaled US$2,748.5 million as of August 31, 2026, compared to US$3,239.3 million as of February 28, 2026. Highlights for the Six Months Ended August 31, 2026 Net revenues were US$1,753.0 million, compared to net revenues of US$1,436.4 million in the same period of the prior year. Income from operations was US$373.1 million, compared to income from operations of US$110.4 million in the same period of the prior year. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$396.4 million, compared to non-GAAP income from operations of US$133.0 million in the same period of the prior year. Net income attributable to TAL was US$360.6 million, compared to net income attributable to TAL of US$155.4 million in the same period of the prior year. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$383.9 million, compared to non-GAAP net income attributable to TAL of US$177.9 million in the same period of the prior year. Basic and diluted net income per ADS were both US$0.65. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.69. Financial Data⸺Second Quarter and First Six Months of Fiscal Year 2027 (In US$ thousands, except per ADS data and percentages) Three Months Ended August 31, 2025 2026Pct. Change Net revenues 861,353 994,648 15.5 % Income from operations 96,097 235,861 145.4 % Non-GAAP income from operations 107,849 247,692 129.7 % Net income/(loss) attributable to TAL 124,084 (47,438) (138.2 %) Non-GAAP net income/(loss) attributable to TAL 135,836 (35,607) (126.2 %) Net income/(loss) per ADS attributable to TAL – basic 0.22 (0.09) (139.5 %) Net income/(loss) per ADS attributable to TAL – diluted 0.21 (0.09) (140.0 %) Non-GAAP net income/(loss) per ADS attributable to TAL – basic 0.24 (0.06) (127.1 %) Non-GAAP net income/(loss) per ADS attributable to TAL – diluted 0.24 (0.06) (127.4 %) Six Months Ended August 31, 2025 2026Pct. Change Net revenues 1,436,352 1,753,025 22.0 % Income from operations 110,443 373,065 237.8 % Non-GAAP income from operations 132,958 396,434 198.2 % Net income attributable to TAL 155,366 360,569 132.1 % Non-GAAP net income attributable to TAL 177,881 383,938 115.8 % Net income per ADS attributable to TAL – basic 0.26 0.65 146.9 % Net income per ADS attributable to TAL – diluted 0.26 0.65 147.9 % Non-GAAP net income per ADS attributable to TAL – basic 0.30 0.69 129.6 % Non-GAAP net income per ADS attributable to TAL – diluted 0.30 0.69 130.6 % "In the second quarter of fiscal year 2027, we delivered steady revenue growth and continued to improve operational efficiency," said Alex Peng, TAL's President and Chief Financial Officer. "Our focus remains on strengthening our core businesses and delivering better learning experiences for students." Mr. Peng added, "Looking ahead, we will continue to combine our educational expertise with technology to better serve students and create long-term value." Financial Results for the Second Quarter of Fiscal Year 2027 1/8
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Net Revenues In the second quarter of fiscal year 2027, TAL reported net revenues of US$994.6 million, representing a 15.5% increase from US$861.4 million in the second quarter of fiscal year 2026. Operating Costs and Expenses In the second quarter of fiscal year 2027, operating costs and expenses were US$758.8 million, representing a 0.8% decrease from US$765.3 million in the second quarter of fiscal year 2026. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$747.0 million, representing a 0.9% decrease from US$753.5 million in the second quarter of fiscal year 2026. Cost of revenues increased by 8.0% to US$400.0 million from US$370.3 million in the second quarter of fiscal year 2026. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 8.0% to US$399.5 million, from US$369.8 million in the second quarter of fiscal year 2026. Selling and marketing expenses decreased by 15.3% to US$226.4 million from US$267.3 million in the second quarter of fiscal year 2026. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 15.6% to US$223.3 million, from US$264.4 million in the second quarter of fiscal year 2026. General and administrative expenses increased by 3.7% to US$132.4 million from US$127.6 million in the second quarter of fiscal year 2026. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 4.1% to US$124.2 million, from US$119.3 million in the second quarter of fiscal year 2026. Total share-based compensation expenses allocated to the related operating costs and expenses increased by 0.7% to US$11.8 million in the second quarter of fiscal year 2027 from US$11.8 million in the same period of fiscal year 2026. Gross Profit Gross profit increased by 21.1% to US$594.6 million from US$491.0 million in the second quarter of fiscal year 2026. The gross margin for the second quarter of fiscal year 2027 was 59.8%, compared to 57.0% in the same period of the prior year. Income from Operations Income from operations was US$235.9 million in the second quarter of fiscal year 2027, compared to income from operations of US$96.1 million in the second quarter of fiscal year 2026. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$247.7 million, compared to Non-GAAP income from operations of US$107.8 million in the same period of the prior year. Other Income/(Expense) Other expense was US$189.7 million for the second quarter of fiscal year 2027, compared to other income of US$67.1 million in the second quarter of fiscal year 2026. The change in other income/(expense) for the second quarter was mainly driven by fluctuations in the fair value of certain investments. Income Tax Expense Income tax expense was US$135.9 million in the second quarter of fiscal year 2027, compared to US$51.1 million of income tax expense in the second quarter of fiscal year 2026. The increase in income tax expense was mainly due to changes in deferred tax liabilities relating to withholding tax. Net Income/(Loss) Attributable toTAL Education Group Net loss attributable to TAL was US$47.4 million in the second quarter of fiscal year 2027, compared to net income attributable to TAL of US$124.1 million in the second quarter of fiscal year 2026. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was US$35.6 million, compared to Non-GAAP net income attributable to TAL of US$135.8 million in the second quarter of fiscal year 2026. Basic and Diluted Net Income/(Loss) per ADS Basic and diluted net loss per ADS were both US$0.09 in the second quarter of fiscal year 2027. Non-GAAP basic and diluted net loss per ADS, which excluded share-based compensation expenses, were both US$0.06 in the second quarter of fiscal year 2027. Cash Flow Net cash used in operating activities for the second quarter of fiscal year 2027 was US$179.1 million. Cash, Cash Equivalents, and Short-term Investments As of August 31, 2026, the Company had US$1,952.6 million of cash and cash equivalents and US$795.9 million of short-term investments, compared to US$1,523.9 million of cash and cash equivalents and US$1,715.4 million of short-term investments as of February 28, 2026. Deferred Revenue As of August 31, 2026, the Company's deferred revenue balance was US$930.4 million, compared to US$882.2 million as of February 28, 2026. Financial Results for the First Six Months of Fiscal Year 2027 Net Revenues For the first six months of fiscal year 2027, TAL reported net revenues of US$1,753.0 million, representing a 22.0% increase from US$1,436.4 million in the first six months of fiscal year 2026. Operating Costs and Expenses In the first six months of fiscal year 2027, operating costs and expenses were US$1,380.0 million, representing a 4.1% increase from US$1,325.9 million in the first six months of fiscal year 2026. Non-GAAP operating costs and expenses, which excluded share-based compensation expenses, were US$1,356.6 million, representing a 4.1% increase from US$1,303.4 million in the first six months of fiscal year 2026. 2/8
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Cost of revenues increased by 14.3% to US$720.2 million from US$629.9 million in the first six months of fiscal year 2026. Non-GAAP cost of revenues, which excluded share-based compensation expenses, increased by 14.4% to US$719.2 million from US$628.8 million in the first six months of fiscal year 2026. Selling and marketing expenses decreased by 11.1% to US$398.4 million from US$448.1 million in the first six months of fiscal year 2026. Non-GAAP selling and marketing expenses, which excluded share-based compensation expenses, decreased by 11.2% to US$392.6 million from US$442.1 million in the first six months of fiscal year 2026. General and administrative expenses increased by 5.4% to US$261.3 million from US$247.9 million in the first six months of fiscal year 2026. Non-GAAP general and administrative expenses, which excluded share-based compensation expenses, increased by 5.3% to US$244.9 million from US$232.5 million in the first six months of fiscal year 2026. Total share-based compensation expenses allocated to the related operating costs and expenses increased by 3.8% to US$23.4 million in the first six months of fiscal year 2027 from US$22.5 million in the same period of fiscal year 2026. Gross Profit Gross profit increased by 28.1% to US$1,032.8 million from US$806.4 million in the first six months of fiscal year 2026. The gross margin for the first six months of fiscal year 2027 was 58.9%, compared to 56.1% in the same period of the prior year. Income from Operations Income from operations was US$373.1 million in the first six months of fiscal year 2027, compared to income from operations of US$110.4 million in the same period of the prior year. Non-GAAP income from operations, which excluded share-based compensation expenses, was US$396.4 million, compared to US$133.0 million Non-GAAP income from operations in the same period of the prior year. Other Income/(Expense) Other income was US$215.5 million in the first six months of fiscal year 2027, compared to other income of US$76.5 million in the same period of the prior year. The change in other income for the first six months was mainly driven by fluctuations in the fair value of certain investments. Income Tax Expense Income tax expense was US$279.6 million in the first six months of fiscal year 2027, compared to US$62.2 million for the first six months of fiscal year 2026. The increase in income tax expense was mainly due to changes in deferred tax liabilities relating to withholding tax. Net Income/(Loss) Attributable toTAL Education Group Net income attributable to TAL was US$360.6 million in the first six months of fiscal year 2027, compared to net income attributable to TAL of US$155.4 million in the first six months of fiscal year 2026. Non-GAAP net income attributable to TAL, which excluded share-based compensation expenses, was US$383.9 million, compared to US$177.9 million Non-GAAP net income attributable to TAL in the same period of the prior year. Basic and Diluted Net Income per ADS Basic and diluted net income per ADS were both US$0.65 in the first six months of fiscal year 2027. Non-GAAP basic and diluted net income per ADS, which excluded share-based compensation expenses, were both US$0.69 in the first six months of fiscal year 2027. Cash Flow Net cash provided by operating activities in the first six months of fiscal year 2027 was US$299.2 million. Share Repurchase The Company's board of directors (the "Board") has authorized to extend the Company's share repurchase program (the "Share Repurchase Program") initially launched in July 2025 by 12 months. Pursuant to the extended Share Repurchase Program, the Company may repurchase up to approximately US$393.7 million of its common shares through July 28, 2027. Between July 29, 2026 and October 23, 2026, the Company has repurchased 64,226 common shares at an aggregate consideration of approximately US$2.0 million. Declaration of Cash Dividend The Company's board of directors has considered and approved the declaration and payment of a cash dividend to our shareholders out of the Company's cash balances in an amount of US$0.3 per common share (US$0.1 per ADS), representing an aggregate dividend payment of approximately US$55.2 million to all shareholders of the Company. The cash dividend will be paid on or about December 18, 2026 to the Company's shareholders of record as of the close of business on December 1, 2026. TAL to Hold Annual General Meeting on November 27, 2026 The Company announced that it will hold its annual general meeting of shareholders (the "AGM") at TAL Building No.1, Courtyard No. 9, Qixin Middle Street, Changping District, Beijing, China, on November 27, 2026 at 3:00PM (Beijing time). No proposal will be submitted to shareholders for approval at the AGM. Instead, the AGM will serve as an open forum for shareholders and beneficial owners of the Company's ADSs to discuss Company's affairs with management. The Company's board of directors has fixed the close of business on November 9, 2026 (Eastern Standard Time) as the record date (the "Record Date"). Holders of record of the Company's common shares at the close of business on the Record Date are entitled to notice of the AGM and any adjournment or postponement thereof. Beneficial owners of the Company's ADSs are welcome to attend the AGM in person. The notice of the AGM is available on the Investor Relations section of the Company's website at https://ir.tal.com/. The Company has filed its annual report on Form 20-F (the "Annual Report"), which includes the Company's audited financial statements for the fiscal year ended February 28, 2026, with the U.S. Securities and Exchange Commission (the "SEC"). The Company's Annual Report can be accessed on the Investor Relations section of its website at https://ir.tal.com , as well as on the SEC's website at http://www.sec.gov . Conference Call 3/8
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The Company will host a conference call and live webcast to discuss its financial results for the second quarter of fiscal year 2027 ended August 31, 2026 at 8:00 a.m. Eastern Time on October 29, 2026 (8:00 p.m. Beijing time on October 29, 2026). Please note that you will need to pre-register for conference call participation at https://dpregister.com/sreg/10212718/1051b87d48e. Upon registration, you will receive an email containing participant dial-in numbers, passcode, and a unique access PIN. This information will allow you to gain immediate access to the call. Participants may pre-register at any time, including up to and after the call start time. A live and archived webcast of the conference call will be available on the Investor Relations section of TAL's website at https://ir.tal.com/. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, TAL Education Group's strategic and operational plans contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's ability to continue to provide competitive learning services and products; the Company's ability to continue to recruit, train and retain talents; the Company's ability to improve the content of current course offerings and develop new courses; the Company's ability to maintain and enhance its brand; the Company's ability to maintain and continue to improve its teaching results; and the Company's ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company's reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and TAL Education Group undertakes no duty to update such information or any forward-looking statement, except as required under applicable law. About TAL Education Group TAL Education Group is a smart learning solutions provider in China. The acronym "TAL" stands for "Tomorrow Advancing Life", which reflects our vision to promote top learning opportunities for students through both high-quality teaching and content, as well as leading edge application of technology in the education experience. TAL Education Group offers comprehensive learning solutions to students from all ages through diversified class formats. Our learning solutions mainly cover enrichment learnings programs and some academic subjects in and out of China. Our ADSs trade on the New York Stock Exchange under the symbol "TAL". About Non-GAAP Financial Measures In evaluating its business, TAL considers and uses the following measures defined as non-GAAP financial measures by the SEC as supplemental metrics to review and assess its operating performance: non-GAAP cost of revenues, non-GAAP selling and marketing expenses, non-GAAP general and administrative expenses, non-GAAP operating costs and expenses, non-GAAP income from operations, non-GAAP net income attributable to TAL, non-GAAP basic and non-GAAP diluted net income per ADS. To present each of these non-GAAP measures, the Company excludes share-based compensation expenses. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non- GAAP measures to the most comparable GAAP measures" set forth at the end of this release. TAL believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based compensation expenses that may not be indicative of its operating performance from a cash perspective. TAL believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non- GAAP financial measures also facilitate management's internal comparisons to TAL's historical performance and liquidity. TAL computes its non-GAAP financial measures using the same consistent method from quarter to quarter and from period to period. TAL believes these non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures. For further information, please contact: Jackson Ding Investor Relations TAL Education Group Tel: +86 10 5292 6669-8809 Email: ir@tal.com 4/8
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TAL EDUCATION GROUP UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands of U.S. dollars) As of February 28, 2026 As of August 31, 2026 ASSETS Current assets Cash and cash equivalents $ 1,523,879 $ 1,952,620 Restricted cash, current 227,551 221,561 Short-term investments 1,715,446 795,947 Inventories, net 143,326 254,280 Amounts due from related parties, current 46 25 Prepaid expenses and other current assets 232,870 313,187 Total current assets 3,843,118 3,537,620 Restricted cash, non-current 34,608 32,218 Property and equipment, net 500,710 499,700 Deferred tax assets 3,170 3,513 Rental deposits 28,058 30,404 Intangible assets, net 45,975 43,890 Goodwill 45,545 45,545 Land use rights, net 189,779 191,402 Amounts due from related parties, non-current 134 182 Long-term investments 828,249 1,803,390 Long-term prepayments and other non-current assets 37,216 90,443 Operating lease right-of-use assets 379,727 379,417 Total assets $ 5,936,289 $ 6,657,724 LIABILITIES AND EQUITY Current liabilities Accounts payable $ 152,513 $ 141,754 Deferred revenue, current 832,839 883,234 Amounts due to related parties, current 97 96 Accrued expenses and other current liabilities 672,344 751,095 Operating lease liabilities, current 109,393 120,655 Short-term debt - 29,763 Total current liabilities 1,767,186 1,926,597 Deferred revenue, non-current 49,353 47,167 Deferred tax liabilities 67,981 245,162 Operating lease liabilities, non-current 278,083 266,464 Total liabilities 2,162,603 2,485,390 Equity Class A common shares 156 141 Class B common shares 49 49 Treasury stock (20) (6) Additional paid-in capital 3,694,418 3,679,256 Statutory reserve 216,638 212,517 (Accumulated deficit)/retained earnings (130,428) 234,262 Accumulated other comprehensive (loss)/income (6,376) 47,044 Total TAL Education Group's equity 3,774,437 4,173,263 Non-controlling interests (751) (929) Total equity 3,773,686 4,172,334 Total liabilities and equity $ 5,936,289 $ 6,657,724 5/8
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TAL EDUCATION GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands of U.S. dollars, except share, ADS, per share and per ADS data) For the Three Months Ended August 31, For the Six Months Ended August 31, 2025 2026 2025 2026 Net revenues $ 861,353 $ 994,648 $ 1,436,352 $ 1,753,025 Cost of revenues (note 1) 370,340 400,005 629,911 720,183 Gross profit 491,013 594,643 806,441 1,032,842 Operating expenses (note 1) Selling and marketing 267,286 226,407 448,059 398,434 General and administrative (note 2) 127,630 132,375 247,939 261,343 Total operating expenses 394,916 358,782 695,998 659,777 Income from operations 96,097 235,861 110,443 373,065 Interest income, net 14,161 8,156 32,883 18,061 Other income/(expense) 67,076 (189,683) 76,548 215,530 Impairment loss on long-term investments (1,410) - (1,410) - Income before income tax expense and (loss)/income from equity method investments 175,924 54,334 218,464 606,656 Income tax expense (51,080) (135,895) (62,158) (279,553) (Loss)/income from equity method investments (819) 34,026 (1,074) 33,287 Net income/(loss) 124,025 (47,535) 155,232 360,390 Add: Net loss attributable to non- controlling interests 59 97 134 179 Total net income/(loss) attributable to TAL Education Group $ 124,084 $ (47,438) $ 155,366 $ 360,569 Net income/(loss) per common share Basic $ 0.65 $ (0.26) $ 0.79 $ 1.96 Diluted 0.64 (0.26) 0.78 1.94 Net income/(loss) per ADS (note 3) Basic $ 0.22 $ (0.09) $ 0.26 $ 0.65 Diluted 0.21 (0.09) 0.26 0.65 Weighted average shares used in calculating net income/(loss) per common share Basic 189,830,408 183,951,220 195,905,541 184,173,570 Diluted 192,494,611 183,951,220 198,687,649 186,010,217 Note1: Share-based compensation expenses are included in the operating costs and expenses as follows: For the Three Months Ended For the Six Months Ended August 31, August 31, 2025 2026 2025 2026 Cost of revenues $ 503 $ 512 $ 1,125 $ 1,012 Selling and marketing expenses 2,905 3,150 5,976 5,877 General and administrative expenses 8,344 8,169 15,414 16,480 Total $ 11,752 $ 11,831 $ 22,515 $ 23,369 Note 2: GAAP and non-GAAP general and administrative expenses include government subsidies, which were separately presented in our historical financial statements. This reclassification has been made to conform to the presentation for the current period, and such reclassification had no impact on the Group's previously reported income from operations, net income/(loss), shareholders' equity, or cash flows. Note 3: Three ADSs represent one Class A common share. 6/8
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TAL EDUCATION GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) (In thousands of U.S. dollars) For the Three Months Ended August 31, For the Six Months Ended August 31, 2025 2026 2025 2026 Net income/(loss) $ 124,025 $ (47,535) $ 155,232 $ 360,390 Other comprehensive income, net of tax 11,355 27,141 27,342 53,421 Comprehensive income/(loss) 135,380 (20,394) 182,574 413,811 Add: Comprehensive loss attributable to non- controlling interests 53 97 120 178 Comprehensive income/(loss) attributable to TAL Education Group $ 135,433 $ (20,297) $ 182,694 $ 413,989 TAL EDUCATION GROUP UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of U.S. dollars) For the Three Months Ended August 31, For the Six Months Ended August 31, 2025 2026 2025 2026 Net cash (used in)/provided by operating activities $ (58,095) $ (179,068) $ 289,690 $ 299,168 Net cash provided by investing activities 563,331 306,192 36,022 122,083 Net cash (used in)/provided by financing activities (281,885) 131,895 (535,989) (8,769) Effect of exchange rate changes (328) (275) (45) 7,879 Net increase/(decrease) in cash, cash equivalents and restricted cash 223,023 258,744 (210,322) 420,361 Cash, cash equivalents and restricted cash at the beginning of period $ 1,558,386 $ 1,947,655 $ 1,991,731 $ 1,786,038 Cash, cash equivalents and restricted cash at the end of period $ 1,781,409 $ 2,206,399 $ 1,781,409 $ 2,206,399 7/8
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TAL EDUCATION GROUP Reconciliation of Non-GAAP Measures to the Most Comparable GAAP Measures (In thousands of U.S. dollars, except share, ADS, per share and per ADS data) For the Three Months Ended August 31, For the Six Months Ended August 31, 2025 2026 2025 2026 Cost of revenues $ 370,340 $ 400,005 $ 629,911 $ 720,183 Share-based compensation expenses in cost of revenues 503 512 1,125 1,012 Non-GAAP cost of revenues 369,837 399,493 628,786 719,171 Selling and marketing expenses 267,286 226,407 448,059 398,434 Share-based compensation expenses in selling and marketing expenses 2,905 3,150 5,976 5,877 Non-GAAP selling and marketing expenses 264,381 223,257 442,083 392,557 General and administrative expenses (note 2) 127,630 132,375 247,939 261,343 Share-based compensation expenses in general and administrative expenses 8,344 8,169 15,414 16,480 Non-GAAP general and administrative expenses (note 2) 119,286 124,206 232,525 244,863 Operating costs and expenses 765,256 758,787 1,325,909 1,379,960 Share-based compensation expenses in operating costs and expenses 11,752 11,831 22,515 23,369 Non-GAAP operating costs and expenses 753,504 746,956 1,303,394 1,356,591 Income from operations 96,097 235,861 110,443 373,065 Share based compensation expenses 11,752 11,831 22,515 23,369 Non-GAAP income from operations 107,849 247,692 132,958 396,434 Net income/(loss) attributable to TAL Education Group 124,084 (47,438) 155,366 360,569 Share based compensation expenses 11,752 11,831 22,515 23,369 Non-GAAP net income/(loss) attributable to TAL Education Group (note 4) $ 135,836 $ (35,607) $ 177,881 $ 383,938 Net income/(loss) per ADS Basic $ 0.22 $ (0.09) $ 0.26 $ 0.65 Diluted 0.21 (0.09) 0.26 0.65 Non-GAAP net income/(loss) per ADS Basic $ 0.24 $ (0.06) $ 0.30 $ 0.69 Diluted 0.24 (0.06) 0.30 0.69 ADSs used in calculating net income/(loss) per ADS Basic 569,491,224 551,853,660 587,716,623 552,520,710 Diluted 577,483,833 551,853,660 596,062,947 558,030,651 ADSs used in calculating Non- GAAP net income/(loss) per ADS Basic 569,491,224 551,853,660 587,716,623 552,520,710 Diluted 577,483,833 551,853,660 596,062,947 558,030,651 Note 4: The tax effect of share-based compensation expenses was immaterial in the second quarter and in the first six months of fiscal year 2027. SOURCE TAL Education Group 8/8