G8 Education (GEM) H2 2025 earnings summary

Executive summary

• Provided early childhood education to 36,000 children across 395 centers, maintaining a strong focus on quality, safety, and team capability, with 95% of centers meeting or exceeding National Quality Standard.

• Operational execution and safety focus supported resilience despite challenging market conditions, with strong progress in network quality and team retention, but occupancy remained pressured by affordability and sector confidence issues.

• Workforce stability improved with higher retention and a 5% wage uplift for award-based team members; team retention rose to 79.5%.

• 2025 was challenging due to affordability pressures, lower demand from declining birth rates, and increased sector supply, but operational execution and cost management remained strong.

• Family Net Promoter Score reached its highest since 2023.

Financial highlights

• Operating revenue was AUD 946.9 million (or $948.2 million), down 7.2% year-over-year due to lower occupancy and fewer operating centers.

• Operating EBIT (lease-adjusted) was AUD 93.3 million, down 18.9% year-over-year, with a margin of 9.9%.

• Statutory net loss after tax was $303.3 million, primarily due to a non-cash goodwill impairment of ~$350 million.

• Operating NPAT dropped 18.4% to $59.0 million year-over-year.

• Free cash flow for the year was AUD 12.3 million after CapEx, dividends, and share buyback.

Outlook and guidance

• Near-term conditions remain challenging with continued cost of living pressures, low birth rates, inflation, and regulatory changes impacting occupancy and costs.

• No final dividend for FY25; share buyback paused.

• CapEx for CY 2026 expected to be around AUD 50 million.

• Medium to long-term sector outlook remains positive, with government policy support and expected fertility rate recovery.

• Focus remains on safety, cost management, and network optimisation.