IDP Education (IEL) Investor Update summary

Market conditions, regulatory developments, and trading update

• Key destination markets face synchronized and ongoing policy uncertainty, reducing global international student flows and market size.

• UK, Australia, Canada, and US have introduced or maintained restrictive immigration and student visa policies, with further changes pending, leading to weaker student sentiment and increased visa restrictions.

• International student market volumes to Australia, UK, Canada, and US declined ~28% for nine months to March, with visa issuance for FY25 Q3 YTD down 28% and further deterioration expected, especially in Canada and the US.

• Economic and geopolitical uncertainty has increased, compounding the impact of policy changes.

• FY2025 student placement volumes expected to decrease by 28%-30%, and IELTS volumes by 18%-20%, partially offset by strong average fee growth.

Financial performance and guidance

• FY2025 earnings (EBIT) expected between $115 million and $125 million, with cost control initiatives partially offsetting revenue declines.

• Adjusted overhead costs for H2 FY2025 targeted to be ~5% below H2 FY2024.

• Gross margins expected to be lower than FY2024 due to rapid volume declines and mix effects, especially in student placement.

• IELTS gross margin expected to remain in the low 40% range, subject to country and test center mix.

• CapEx pulled back by about a third versus initial expectations, focusing on high-impact investments.

Strategic priorities and cost management

• Strategic review underway to lower costs, improve productivity, and prioritize investment in digital and AI-driven initiatives.

• Focus on growing market share, cost management, and targeted investment spend, with strengthened cost reduction actions and a detailed review of long-term commercial levers.

• Cost efficiency program includes automation, AI, back-office simplification, and renegotiation of commercial arrangements.

• Investments prioritized for projects with short-term benefits and alignment with medium-term strategic goals, especially in digital and AI-enabled product development.

• Ongoing review of incentive structures to retain key staff while aligning with business performance.