NextEd Group (NXD) H2 2024 earnings summary

Executive summary

• Achieved record revenue of $111.4 million for FY24, up 8.9% year-over-year, despite a challenging regulatory environment impacting international student numbers.

• EBITDA declined 10% to $15.0 million, and adjusted NPAT dropped to $0.2 million, reflecting significant non-cash impairment charges and lower operating cash flows.

• Strategic initiatives included new campus launches, expansion of course offerings, and cost reduction measures targeting $5 million in annualized savings.

Financial highlights

• Revenue: $111.4 million (+8.9% vs FY23); EBITDA: $15.0 million (-10% vs FY23); adjusted NPAT: $0.2 million (-$5.8 million vs FY23).

• Net loss after tax: $(31.2) million, driven by a $28.9 million impairment on intangible assets.

• Operating cash flow: $1.7 million, down from $25.2 million in FY23; cash at bank: $19.3 million (vs $40.2 million in FY23).

• Contract liabilities (deferred revenue): $32.5 million, down 25% year-over-year.

Outlook and guidance

• Federal Government plans to cap new international student commencements in 2025, with NextEd’s proposed caps representing a 42% reduction for higher education and 45% for vocational commencements compared to 2023.

• Business is proactively shifting focus to domestic student growth and cost containment in anticipation of tighter immigration policy.