IDP Education (IEL) H2 2026 earnings summary

Executive summary

• FY26 results were resilient and aligned with guidance despite significant declines in international student volumes due to restrictive policy settings, with revenue holding up and strong yield growth offsetting volume pressures.

• Transformation initiatives exceeded targets, delivering a AUD 32 million net cost reduction and a 20% headcount reduction (~1,250 roles), with business simplification and technology investment positioning for future growth.

• Investments in technology, AI, and new market entries supported ongoing diversification and operational improvements.

• Balance sheet strengthened, with net leverage at 1x and strong cash generation enabling a AUD 50 million share buyback.

• Maintained high student trust and satisfaction, with NPS above 70 and over 90% of students expressing trust.

Financial highlights

• Revenue declined 9–11% year-over-year to $795.4 million, with gross profit margin stable at 60%.

• Adjusted EBIT was $122.9–$123 million, down 7% year-over-year, within guidance.

• Adjusted overhead costs fell 11%, with a total cost base reduction of AUD 32 million, exceeding the AUD 25 million target.

• Cash conversion improved to 139%, and contract assets and receivables fell 56% year-over-year.

• Cash balance at AUD 135 million, with undrawn facilities of AUD 341 million and net leverage reduced from 1.4x to 1x.

Outlook and guidance

• FY27 adjusted EBIT expected between AUD 95 million and AUD 115 million, assuming market volumes 20–30% lower than last year.

• Student Placement and English Language Testing yields expected to grow at mid-single-digit percentages.

• Further AUD 15 million net cost saving targeted for FY27, with transformation expenditure of around AUD 40 million.

• Net leverage expected to remain at or below 1.5x throughout the year.

• FY27 planning assumes no further changes in key immigration and visa policy settings.