EDU (EDU) H1 2024 earnings summary

Executive summary

• Revenue for 1H24 rose 64% year-over-year to $16.9m, driven by strong enrolment growth in both higher education and vocational segments.

• EBITDA increased to $2.3m from $0.2m in 1H23, with margin expanding to 13% from 2% in 1H23.

• Net profit after tax reached $28k, reversing a $1.6m loss in 1H23 and marking the first profit since the pandemic.

• Ikon (HE) saw record enrolments and revenue, while ALG (VET) continued a modest recovery.

• Strategic focus on in-demand courses aligned to skills shortages in healthcare, education, and community services.

Financial highlights

• Ikon revenue up 88% to $10.4m; ALG revenue up 37% to $6.4m.

• Ikon EBITDA up 154% to $2.9m, with margin rising to 28%.

• ALG returned to EBITDA profitability at $122k.

• Gross margin improved to 55% from 54% year-over-year.

• Cash at bank was $8.0m at 30 June 2024, up from $3.1m at 31 Dec 2023.

Outlook and guidance

• Revenue and earnings expected to remain strong for FY24, with further operating leverage anticipated.

• Regulatory changes, including caps on new overseas student commencements from 2025, are expected to materially curtail enrolment growth.

• Ikon's 2025 cap set at 200 new overseas commencements, down from 784 YTD in 2024; ALG's cap not yet received but expected to be lower.

• Domestic student commencements are not affected by the proposed caps.

• Continued investment in product development, with new courses launching in 1H25.