Good day, and thank you for standing by. Welcome to TAL Education Group fourth quarter FY 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. Now I'd like to hand the conference over to Mr. Jackson Ding, Investor Relations Director. Thank you. Please go ahead, sir.
Thank you, operator. Thank you all for joining us today for TAL Education Group's fourth fiscal quarter and fiscal year 2022 earnings conference call. The earnings release was distributed earlier today, and you may find a copy on the company IR website or through the newswires. During this call, you will hear from Mr. Alex Peng, President and Chief Financial Officer, and myself, Investor Relations Director. Following the prepared remarks, Mr. Peng and I will be available to answer your questions. Before we continue, please note that the discussions today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in public filings with the SEC.
For more information about these risks and uncertainties, please refer to our filings with the SEC. Also, our earnings release in this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP measures to the most directly comparable GAAP measures. I would like now to turn the call over to Mr. Alex Peng. Alex, please.
Thank you, Jackson, and good evening to everybody on the call. I guess in a way it would be good morning to those joining from the U.S. Let me start by noting it's been about a year since the company last organized an earnings conference call. Thank you all for making the time and joining us today, and I'm looking forward to the discussion. Let me start with our financial results for the fourth quarter and the whole fiscal year, 2022. In the fiscal quarter ending on February twenty-eighth, 2022, we recorded $541 million in revenue, $0.6 million, so that's $600,000, in GAAP operating income, and $108 million in GAAP net loss attributable to TAL.
Since the recent market conditions and regulatory environment developing in our industry in the mainland of China, we've been taking actions and making necessary adjustments to our business. First of all, as of December 31, 2021, we ceased offering K9 academic after-school tutoring services in the mainland of China, which as you all know, used to constitute the majority of our overall revenue. We have since realigned our positioning as a smart learning solutions provider, and we have repivoted our products and services along three main thrusts, and those are learning services, technology solutions, and learning content solutions, and we offer these to learners and learning institutions both in China and globally. The financial performance of our fourth fiscal quarter and fiscal year 2022 reflects such transformation, and I will add it's a transformation in motion.
Let me take this opportunity to express on behalf of TAL's management team our sincere appreciations to our customers for their trust and understanding, to our colleagues and ex-colleagues for their dedication, hard work, and perseverance, to our business partners for their assistance and advice, to regulatory authorities for their supervision and guidance. Last but not least, to our shareholders for their continued support on this transformation journey. Thank you all. As we're transforming into smart learning solutions provider.
As I mentioned before, we're primarily offering the following products and services, learning services and others, learning technology solution, and content solutions. We're also exploring other initiatives in China and globally. Jackson will give you an update on our operational developments in these business areas and review the fourth quarter and fiscal year financial results. After that, I'll update you on our business strategy, and then we'll open the floor for questions. Jackson, please go ahead.
Thank you, Alex. Let me start by introducing our learning services and others business. We provide enrichment learning programs to learners between 2 and 18 years old. These programs are offered in various class sizes through both online and offline formats. Our offerings currently include the following programs, science and creativity, coding and programming, humanities and aesthetics, and et cetera. Let me now spend some time to talk about the programs themselves.
Science and creativity guide learners through observation, analysis, and application of various scientific phenomena and theories. The program is designed to develop learners' scientific curiosity and problem-solving capabilities. Coding and programming covers a broad range of computer science-related topics, including programming literacy, software development, algorithm, and et cetera. The program is designed to advance learners' technological fluency and critical thinking skills. Humanities and aesthetics provides comprehensive learning at the intersection of history, art, and literature. The program is designed to cultivate learners' cultural and aesthetic literacy. Aside from the offerings mentioned above, we are actively developing additional programs. We have witnessed demand from our customers to develop as well-rounded people and lifelong learners. Our enrichment programs are designed to capture that demand. Enrichment learning will continue to be an important pillar in our business going forward. Our second main business area is learning technology solutions.
We provide a full suite of enterprise-grade technology products and services to learning institutions. Our offerings cover many components in the value chain of the learning process, including online classroom, content development, teacher support, and learning center management. We are currently serving a number of for-profit and not-for-profit learning institutions and will continue to expand our customer base. Our third main business area is content solutions. We offer academic and non-academic learning content in both paper and digital formats. The learning content materials themselves are either created in-house, leveraging the broad content library we accumulated over the course of the company history, or acquired and/or licensed from domestic and global partners. These digitally integrated, highly interactive learning contents enable our learners to self-study or to simply consume casually. All these business areas mentioned above are still in development stages and are subject to further adjustments.
That concludes the operational development section. Let me now shift gears a little bit to go through some key financial highlights for the fourth fiscal quarter, and then briefly review the fiscal year 2022 financial results. Please note that financial results in the fourth quarter and fiscal year 2022 are subject to impact from one-off business adjustments and should be taken with care if used to refer to our potential future performance. Please also note that such financial performance still includes partial results from K-9 academic after-school tutoring services prior to the suspension. In the fourth quarter of fiscal year 2022, net revenue totaled $541 million, representing a 60% decrease from $1,363 million in the fourth quarter of fiscal year 2021.
The decrease in revenue was primarily driven by the cessation of K-9 academic AST services. Gross profit declined by 56% to $343 million from $781 million in the same year-ago period. Selling and marketing expenses decreased by 84% to $103 million from $660 million in the fourth quarter of fiscal year 2021. non-GAAP selling and marketing expenses, which excluded share-based compensation, decreased by 82% to $113 million from $635 million in the same year-ago period. Selling and marketing expenses as a percentage of revenue decreased by 29 percentage points to 19% in the last quarter on a year-on-year basis.
The year-on-year decrease of selling and marketing expenses was primarily a result of the reduction of marketing promotion activities. General and administrative expenses decreased by 39% to $212 million from $349 million in the fourth quarter of the fiscal year 2021. non-GAAP general and administrative expenses, which excluded share-based compensation expenses, decreased by 31% to $203 million from $294 million in the same year ago period. Income from operations was $0.6 million in the fourth quarter of fiscal year 2022, compared to loss from operations of $297 million in the same year ago period.
Non-GAAP income from operations, which excluded share-based compensation expenses, was $0.8 million compared to non-GAAP loss from operations of $217 million in the same period of the prior year. Net loss attributable to TAL was $108 million in the fourth quarter of fiscal year 2022, compared to net loss attributable to TAL of $169 million in the fourth fiscal quarter of fiscal year 2021. Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was $108 million compared to non-GAAP net loss attributable to TAL of $89 million in the same period of the prior year.
As of February 28, 2022, the company had $1.638 billion of cash and cash equivalents, $1.071 billion of short-term investments, and $1.044 billion in current and non-current restricted cash. As of February 28, 2022, the company's deferred revenue balance was $188 million compared to $1.417 billion as of February 28, 2021, representing a year-over-year decrease of 87%, which was primarily driven by the suspension of K-9 academic AST services. Turning now to the fiscal year 2022 financial results, let me briefly review some key financials as follows. Fiscal year revenues decreased by 2% to $4.391 billion.
Gross profit decreased by 11% to $2.188 billion. Loss from operations was $615 million in fiscal year 2022, compared to the loss from operations of $438 million in the prior year. non-GAAP loss from operations, which excluded share-based compensation expenses, was $440 million for fiscal year 2022, compared to non-GAAP loss from operations of $233 million in fiscal year 2021. Net loss attributable to TAL was $1.136 billion in fiscal year 2022, compared to net loss attributable to TAL of $116 million in the previous fiscal year.
Non-GAAP net loss attributable to TAL, which excluded share-based compensation expenses, was $961 million compared to non-GAAP net income attributable to TAL of $89 million in the fiscal year 2021. That concludes the financial highlights section. Now, I'll hand the call over to Mr. Peng to briefly update you on our business strategy outlook. Alex, please.
Thanks, Jackson. Fiscal year 2022 was certainly an eventful year in our industry. We went through significant changes in the regulatory environment and market conditions, and I think we've just entered into the opening chapters of a transformation journey. When I look forward and look into the future and thinking about the mega trends in technology and in society, we're also seeing new opportunities, but also new challenges. I think the company will continue to strive to capture these opportunities and overcome these challenges, and through the strength of our brands, our experienced staff, our content development capabilities, our technology, and our operational know-how. Looking forward, we expect learning services, learning technology solutions, and content solutions to have viable business models, and we'll continue to invest into other new initiatives.
As a smart learning solutions provider in China and abroad, we'll continue to serve learners and learning institutions globally. As I come to the end of my prepared remarks, I'll just make a personal reflection. As the Chinese saying goes, "The journey is arduous and long, and you will get through by just going forward." I think that speaks to the mindset of the management and the company. We'll just go forward. That concludes my prepared remarks. Operator, we're now ready to take questions.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to withdraw your request, please press the pound or hash key. Please stand by while we compile the question-and-answer roster. Once again, it's star one for questions. Our first question comes from Lucy Yu from Bank of America. Please go ahead.
Hi, Alex. Hi, Jackson. Thanks for taking my questions. This is Lucy, calling from Bank of America. I have a question on restructuring costs. How much of the restructuring costs are related to K-9 termination that were recorded in your last fiscal year 2022? And how were these restructuring costs recorded in PNL? And, will there be any more similar costs in the upcoming year? Thank you.
Lucy, thank you for your question. As previously announced by the company, we ceased offering K-9 academic after-school tutoring services in the mainland of China by the end of last year. The one-time costs and expenses incurred in the process were primarily related to staff optimization and learning center optimization. Such costs and expense items have largely been reflected in the second half of our fiscal year 2022 financial results. I would just say it was tremendously difficult to say goodbye to some of our endeared colleagues. We downsized significantly in the last year and tried our best to balance the career of our employees, the interest of our learners, and the staffing needs of the company in this downsizing process. As for real estate-related costs and expenses, we have been having some active discussions with our landlords.
The process itself is taking slightly longer than the staff optimization process. We'll consider the current business situation and future business need in adjusting our learning center. Besides, with the ongoing advances in the learning market, we'll continue to adjust our geographic footprint in the future. In short, I think the bulk of the K-9 cessation-related costs and expenses have already been booked in the, you know, FY 2022 financial results. There might still be a small amount in the next couple quarters. I hope that answers your question.
Yeah. Thank you so much.
Thank you. Our next question comes from D.S. Kim from J.P. Morgan. Please ask your question.
Hi, Alex. Hi, Jackson. Good evening, and thanks for taking my questions. By the way, it's great to see our operating profit turning positive in this challenging market. Congrats on that. Just to follow up on what you just mentioned, can I ask, you know, what would be the clean OpEx level for the coming quarters, i.e. as we understand most of the restructuring costs have already been booked. But just to gauge how much would be the recurring level, can I know either how much was booked in fourth quarter so that we can strip it out? Or what would be the recurring level going forward?
Got it. Thank you, D.S., for the question. That's a great question. I think before we answer kind of the OpEx outlook in the future, the first step is probably to kind of discuss a bit how many learning centers and employees we have retained. As such, we will have a better estimate of our OpEx going forward. We have made substantial progress by now in restructuring. As Alex mentioned earlier, we're transitioning to be a smart learning solutions provider to deliver learning services, learning technology solutions, and content solutions. We're in an evolving market today, and when we decide how many learning centers and how many employees to keep, we'll take into consideration of current business situation and future business needs.
By now, our staff optimization has achieved substantial results, and our overall employee size is a fraction of what it used to be. The current employee scale will provide suitable human capital resources for the business transformation. As for our learning centers, you can see on our financial reports that our operating lease right of use assets decreased by 85% compared with two quarters ago. The reduction in learning centers is in line with the reduction of operating lease. Like I said earlier, we're still having some ongoing discussions with a few of our landlords to further optimize our geographic footprints, right? As for the OpEx itself, what you see on our fourth quarter financials did still include some OpEx prior to the K9 cessation.
As we look forward, you can expect OpEx to change a bit from the current level.
Thank you. That's really helpful. Congrats again on turning profit this quarter.
Thank you.
Thank you. Our next question comes from Mark Lee from Citi. Please ask your question.
Hi, management. Thank you for the presentation. May I know your future development plan for the technology solutions and content solutions at these two segments respectively? Any key operating metrics we can track? What do you think about the timing to see this segment to take off? Thank you.
Great. Thanks, Mark. This is Alex. Let me take on that question. I think before addressing specific plans, metrics and timing, I wanna bring this question, sort of take a step back and bring it one level up. As I mentioned in my prepared remarks, looking forward, we're really seeing some very interesting exciting developments in the industry across the world. In the last, I would say, 6-8 months, I've had the opportunity to speak with a number of players and colleagues, from the industry, from many different parts of the world, in the U.S., in Europe, in other parts of Asia. I think from those conversations, many of them are telling me that we're really at the cusp of a learning revolution. From these discussions, I think four words come to my mind.
Those are online, digital, intelligence, and open. Let me explain a little bit around those four words, right? Online, especially with the impact from the pandemic, the online learning format is really, from many of these colleagues are telling me, it's here to stay. Digital. We're seeing digital content and digital devices playing an increasingly important part in the learning journey. Intelligence. With the advent of cognitive technologies and artificial intelligence-related algorithms, we're really seeing a much more natural and personalized experience for the learners. The last one is open. It's like the proverbial it takes a village. You know, it takes many players in the learner's learning journey to make it successful. It takes content and technology from many players to make it possible.
Just to build on that, really, if we talk about our strategy, broadly speaking, I think we'll continue to strive to build world-class first-party content. Also to work with content providers across the world to bring those contents to learners, both in China and in the rest of the world. We really look forward to integrating this experience across many different formats with technology, and to provide a much more natural and individualized, personalized learning journey to learners. Lastly, I think with the technology that we've built over the years and with experience in the past of serving other players in an industry, we really look forward to empowering the entire ecosystem on this digital transformation journey. If you say macro-ly, you know, that's how I look at this, how I look at the trends going forward and the big direction for us.
We are still in the early stages of this transformation. We have many of the components that I talked about that we've built over the years, but we're really still striving to build viable business models to fine-tune and optimize our product and services and continue to work with more partners across so many different markets. I look forward at a future date to give everybody updates on the metrics and how this drives our transformation forward. Thanks, Mark.
Thank you, Alex.
Thank you. Next question comes from Elsie Sheng from Morgan Stanley. Please go ahead.
Thank you, management, for taking my question. My question is also related to the new initiative. You just talked about many new courses and also projects that you are working on. Which of them are more important than the others? Also, how much revenue contribution do you expect from this new business in the future? Thank you.
Thanks, Elsie, for that question. Great question. As I mentioned before, we think the main contribution to FY23, the current fiscal year we're in, the revenue will come from those three buckets, right? Learning services, learning technology solutions, and content solutions. Out of these three areas, it is likely that learning services will be the largest revenue contributor in FY23. I'll just hasten to add that these businesses are still relatively early and will have more clarity on their overall size as they continue to develop. Other new initiatives, let's take an example, overseas academic tutoring. Those are still really in exploratory phases, and it's probably even harder to really predict their size. We'll continue to operate and develop these initiatives and scale them up when the right market conditions and the right internal capabilities are right.
Right now, as I mentioned before, we are in this transformation journey in motion. We're indeed undergoing major business adjustments and those new initiatives in conjunction at the same time. Some of these business areas have just started, and we'll obviously look forward to providing performance outlook as soon as possible in the future. Thanks, Elsie.
Thank you. Very helpful.
Thank you. Our next question comes from Felix Liu from UBS. Please ask your question.
Good evening, and thank you, management, for taking my question, and congratulations on turning profitable in a very challenging environment. My question is on your transition towards the non-academic tutoring. Could you share a bit more color on the transition? More specifically, you know, typically we're coming from, I'm coming from the typical angle of the after-school tutoring, so what level of enrollments are we looking at? Any retention rates to share and the margin outlook for the non-academic tutoring? Thank you.
Great. Thanks, Felix. Another great question. Let me first recap a little bit what Jackson talked about before. To start with, the enrichment learning services in terms of the subject areas are very different from academic after-school tutoring services. The business model, if you look at, unpack the business model, it's almost similar to that of academic AST. The product format is different. I mentioned the content format is different. We provide enrichment learning services in both online and offline format, in various class sizes. We're also making some interesting observations, that these kind of classes typically will foster a lot more interaction, a lot more student-driven activity. We absolutely look forward to continue to innovate and optimize those offerings to our customers and their operations.
For sure, we're closely tracking the metrics that reflect the overall health and growth of the business, so we can continue to fine-tune the business model. I think it's really still too early to discuss the metrics themselves. We'll come back to you as soon as possible.
Thanks. Okay. Thank you.
Thank you. Our next question comes from Linda Huang from Macquarie. Please ask your question.
Hi. Thanks, management. I have one question regarding for our cash position. We know that we probably need to spend some money to continue to invest in the new business, and we probably also will suffer from the certain period of the loss-making. I just want to know that how should we look at our cash position and to which point the cash level it will draw down. You know, from our announcement, I also noticed that the company would like to continue to reward the shareholders by the share repurchase. I just want to know that in addition to the share repurchase, the management has ever considered to use the cash to return to the shareholder.
When the management thinking about the shareholder return for like the cash return versus the share repurchase, what is the rationale behind that we prefer one over the other? Thank you very much.
Thanks, Linda. Again, let me unpack that question a little bit, all right? I think, Jackson, in our earnings release, there are numbers from the balance sheet you can see. I think Jackson talked a little bit about that earlier. Let me just briefly say, we believe the cash position is very solid. You talked about the share repurchasing plan. Again, as mentioned in our press release earlier, the board has authorized an expansion of our share repurchase plan. This is expansion from the plan that was put in place about a year ago. The plan effectively allows the company to repurchase up to approximately $800 million of the company's shares over the next 12 months.
The company was also informed that senior management of the company will use their personal funds to purchase up to 100 million of the company's shares. I think that the share repurchase has long been a way for us to create value for our long-term investors and shareholders. Last year, we approved the current share repurchase plan and executed a portion of it, and we really appreciate our shareholders' continuous support through this transformation, and we'll continue to create shareholder value. Thanks, Linda.
Okay. Very clear. Thank you very much.
Thank you. Our next question comes from Liping Zhao from CICC. Please ask your question.
Thanks, Alex and Jackson, for taking my question. Just one quick one from me on the board composition. Could management elaborate a little bit more on the change of the board composition? Thank you.
Thanks, Liping. First of all, let me just say we're really delighted to appoint Janet Yan Feng to our board of directors. Janet is currently a senior vice president and the CEO of Financial Services business unit of Trip.com, and she has extensive experience in business and finance. We're really confident that the addition of a seasoned senior executive such as Janet will add tremendous value to the company. I will also take this opportunity to really thank Jane Sun for her over a decade of service on the board of directors. Jane is a dear friend and a mentor. We learned a tremendous amount from Jane, and I wish her the best of luck and success in her future endeavors. Besides this change, our core members on the board are stable.
Our founder and CEO, Mr. Bangxin Zhang will serve as the chairman of the board, and Mr. Yunfeng Bai will continue serving as a director. I think our founders continue to be really committed to the businesses and are actively driving the business transformation. Thanks, Liping.
Right. Thank you. We have reached the end of the question-and-answer session. With that, we conclude our conference for today. Thank you for participating. You may all disconnect.