Wang Xun
executive
Thank you, Olivia, and hello, everyone. Thank you for joining our call today. Since this is our first call in several reporting periods, I want to briefly review the company's evolution and strategic focus before I begin the discussions of this period's results. Following a significant transformation in 2022, Four Seasons now operates as an integrated provider of both tourism and education-related services in China, combining enrichment learning, study camps and learning trips plus full-scale travel agency offerings for all age groups.
During the first 6 months of fiscal year 2026, we sustained solid growth momentum. Total revenue reached CNY 145 million, representing a 7.9% year-over-year increase, supported by a healthy product mix and continued efficiency gains. We also maintained our strong upward profitability trajectory with gross profit margin rising from 22% in the first half of fiscal year 2025 to 26.7% in the first half of fiscal year 2026 and net income climbing to RMB 12.4 million, a 314% increase year-over-year. These achievements underscore the strength of our business model and disciplined execution across our core business.
Now let me walk you through this period's achievements, starting with enrichment learning business. For the 6 months ended August 31, 2025, we achieved significant revenue growth in this segment as we focus on delivering high-quality learning experiences for learners of all ages. By deepening our understanding of local needs and optimizing our operations, we are expanding our network of learning centers while ensuring our programs resonate with local learners. Through continuous refined management and improved operational efficiency, we have further boosted the profitability of our instrument learning programs. This disciplined framework allows us to scale with reasonably while upholding our unwavering commitment to educational excellence.
Turning to our tourism business. We will adopt a strategy that balances stable scale with product optimization by tightening our product portfolio toward high-margin value-added offerings. We aim to build a more resilient and sustainable business model for this segment. Overall, our operational excellence, strong strategic execution and diversified services and product portfolio have positioned us well for continued profitable growth.
Looking ahead, we will continue to focus on operational improvement and pursue organic growth by providing customers with an ever-widening selection of premium innovative services. We believe our growing portfolio of high-margin services, combined with disciplined expansion into new compliant markets, will enhance our long-term competitiveness and generate lasting value for our learners, customers, partners and shareholders.
Now I'd like to walk you through further details of our first half of fiscal year 2026 financial results. Revenue increased by 7.9% to RMB 145.3 million in the first half of fiscal year 2026 from RMB 134.7 million in the same period of last year, mainly driven by the growth in the company's enrichment learning business due to the business expansion effort.
Cost of revenue was RMB 106.5 million in the first half of fiscal year 2026 compared with RMB 105 million in the same period of last year, mainly due to the increase in staff costs of company's enrichment learning business.
Gross profit was RMB 38.8 million in the first half of fiscal year 2026 compared with RMB 29.7 million in the same period of last year. The increase of gross profit is mainly driven by the growth in the company's enrichment learning business, which has higher gross profit ratio.
General and administrative expenses decreased by 10.7% to RMB 24.3 million in the first half of fiscal year 2026 from RMB 27.2 million in the same period of last year, mainly attributable to the decrease in share-based compensation expenses, primarily caused by the repricing of share options in prior year.
Sales and marketing expenses decreased by 34.3% to RMB 5.3 million in the first half of fiscal year 2026 from RMB 8.1 million in the same period of last year, mainly due to the decrease in advertising activities.
Operating income was RMB 9.2 million in the first half of fiscal year 2026 compared with an operating loss of RMB 5.7 million in the same period of last year. Non-GAAP operating income, which is calculated as the operating income or loss excluding share-based compensation expenses, was RMB 9.8 million in the first half of fiscal year 2026 compared with a non-GAAP operating loss of RMB 1.6 million in the same period of last year.
Interest income net was RMB 3.1 million in the first half of fiscal year 2026 compared with RMB 7.5 million in the same period of last year, mainly due to interest expenses are no longer capitalized but expensed since the construction in progress of study camps in Wuyuan are completed in fiscal year 2025.
Income expense was RMB 1.1 million in the first half of fiscal year 2026 compared with RMB 3.5 million in the same period of last year, primarily attributable to an increase in income which is not subject to taxation, resulting in a decrease in income tax compared with the same period of last year.
Net income was RMB 12.4 million in the first half of fiscal year 2026 compared with RMB 3.0 million in the same period of last year. Non-GAAP net income, which is calculated as net income excluding share-based compensation expenses and unrealized holding gain or loss in investments, was RMB 13.7 million compared with RMB 2.1 million in the same period of last year.
Basic and diluted net income per ADS in the first half of fiscal year 2026 were RMB 4.53 and RMB 4.48, respectively, compared with both RMB 0.98 in the same period of last year. Non-GAAP basic and diluted net income per ADS in the first half of fiscal year 2026 were RMB 5.11 and RMB 5.05, respectively, compared with both RMB 0.54 in the same period of last year.
As of August 31, 2025, the company has cash and cash equivalents, short-term investments and short-term investments under fair value of RMB 213.1 million compared with RMB 262.6 million as of February 28, 2025. As of August 31, 2025, the company has long-term investment under fair value of RMB 157.9 million compared with RMB 103.2 million as of February 28, 2025.
This concludes my portion of prepared remarks. We will now open the call to questions. Operator, please go ahead.
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