IDP Education (IEL) H2 2024 earnings summary

Executive summary

• Achieved record FY24 revenue of $1,037 million (over AUD 1 billion), up 6% year-over-year, driven by strong student placement growth despite challenging regulatory and market conditions.

• Adjusted EBIT rose 4% to $239 million, while adjusted NPAT declined 1% to $154 million due to higher interest and tax rates; unadjusted EBIT and NPAT fell 5% and 10%, respectively.

• Student placement volumes grew 17% to 98,900, significantly outperforming the industry, which declined by 13%.

• IELTS testing volumes fell 18%, mainly due to weakness in India, but were partially offset by growth in other regions.

• Maintained industry leadership through a trusted brand, innovation, and disciplined cost management.

Financial highlights

• Revenue exceeded $1,037 million (AUD 1 billion) for the first time, a 6% increase year-over-year.

• Adjusted EBIT reached $239 million, up 4% from the prior year; adjusted NPAT was $154 million, slightly down due to higher interest and tax.

• Gross profit grew 8% to $663 million, with gross profit margins up slightly due to a favorable mix shift.

• Final dividend declared at 9 cents per share, bringing full-year dividends to 34 cents, down 17% year-over-year.

• EBITDA decreased 2% to $266 million; net finance expense increased 61% to $21.5 million.

Outlook and guidance

• Expects international student volumes in key markets to decline 20%-25% in FY25, assuming no further major policy changes.

• Australia, UK, and Canada are each expected to be down 20%-30% at a market level, while the US, New Zealand, and Ireland may see aggregate growth.

• Company expects to outperform the broader market decline, continuing to gain market share.

• Cost management and efficiency programs to continue in FY25 to align with near-term revenue outlook.

• Overhead costs in FY25 are expected to be in line with H2 FY24 run rate on an adjusted basis.