IDP Education (IEL) H2 2024 earnings summary

Executive summary

• Achieved record FY24 revenue of over AUD 1 billion ($1,037m), up 6% year-over-year, with strong strategic progress despite industry and regulatory challenges.

• Student placement volumes grew 17%, significantly outperforming the industry, while IELTS testing volumes declined 18% due to weaker conditions in India.

• Adjusted EBIT rose 4% to AUD 239 million ($239m), while adjusted net profit declined slightly to AUD 154 million due to higher interest and tax rates.

• Maintained industry leadership through a trusted brand, focus on quality, and ongoing innovation, supported by disciplined cost management and strategic investments.

• English language teaching courses increased 13%, surpassing 100,000 courses for the first time, with revenue up 19% to $40m, driven by Cambodia.

Financial highlights

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

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

• Final dividend declared at AUD 0.09 per share (9cps), maintaining a 70% payout ratio; full-year dividends totaled 34cps, down 17% year-over-year.

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

• Overhead costs (adjusted) rose 12% to $372m, with a targeted cost reduction program implemented in H2.

Outlook and guidance

• Expect 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.

• Ongoing investment in digital and physical expansion, innovation, and quality to support future growth.

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