IDP Education (IEL) H1 2026 earnings summary

Executive summary

• Revenue for H1 FY26 was $462.2m, down 5–6% year-over-year, mainly due to lower student placement and language testing volumes in key markets, but yield improvements and transformation initiatives supported operational execution.

• Adjusted EBIT was $87.5m, down 14% year-over-year, with FY26 Adjusted EBIT guidance upgraded to $120m–$130m, reflecting improved operational execution and transformation progress.

• Statutory net profit dropped 65% to $23.5m, and adjusted NPAT fell 25% to $48.6m, reflecting challenging industry conditions and transformation costs.

• Transformation program is progressing, targeting a $25m net cost base reduction in FY26, with a focus on digital and AI-enabled tools and operational simplification.

• Cash conversion remained steady at 59%, and net leverage increased to 2.5x, within covenant limits.

Financial highlights

• Revenue declined 5–6% year-over-year to $462.2m, outperforming the volume decline due to yield growth in Student Placement (+15%) and Language Testing (+8%).

• Adjusted EBIT fell 14% to $87.5m; adjusted NPAT dropped 25% to $48.6m; statutory net profit was $23.5m, down 65%.

• Gross profit margin remained stable at 61.6–62% despite lower volumes.

• Direct costs and adjusted overheads both decreased (down 6% and 2% respectively), reflecting disciplined cost management and a reduction of ~900 staff.

• Cash conversion was 59%, with contract assets down 51% and days sales outstanding reduced to 29 days.

Outlook and guidance

• FY26 Adjusted EBIT guidance upgraded to $120m–$130m, reflecting confidence in transformation and yield improvement.

• Market volumes for FY26 expected to decline 20–30% versus FY25, but revenue outperformance anticipated through profitable growth and yield gains.

• Transformation program on track to deliver $25m net cost base reduction in FY26, weighted to H2.

• One-off restructuring costs of $35m–$45m expected in FY26.

• Earnings expected to be heavily weighted to H1 due to intake and destination mix and a one-off working capital benefit.