NextEd Group (NXD) H1 2025 earnings summary

Executive summary

• Revenue declined 21% year-on-year in H1 FY25, primarily due to regulatory changes impacting international student enrollments.

• Aggressive cost management, operational efficiency initiatives, and property rationalization stabilized the financial position and improved cash flow.

• Integration of International House exceeded targets, enrolling over 1,900 students and generating $13 million in invoiced revenue.

• Focus shifted to higher-margin vocational courses, especially in management, hospitality, and healthcare.

• Net loss after tax was $8.3 million, including a $5.0 million impairment in Technology & Design.

Financial highlights

• H1 FY25 revenue was $47.0 million, down 21% year-on-year; EBITDA before impairment was $5.8 million, down from $8.3 million.

• Gross margin improved to 53% from 51% due to a shift to higher-margin vocational courses.

• Operating cash flow was positive at $1 million, a $2.9 million improvement year-on-year.

• Operating costs reduced by $3.0 million year-on-year, with $5 million in annualized savings secured for FY25 and an additional $2 million for FY26.

• Cash at bank was $13.7 million at December-end, increasing to $14.1 million by January 2025, with $3.5 million restricted for bank guarantees.

Outlook and guidance

• Market conditions remain challenging due to ongoing regulatory and government policy changes affecting international student enrollments.

• $7 million in annualized cost savings secured for FY26, with further efficiencies targeted.

• Strategic review underway, with findings to be shared in Q4 FY25.

• Focus areas include onboarding former IH students, cost management, and cash flow preservation.