Tribal Group (TRB) H2 2024 earnings summary

Executive summary

• Achieved strong growth in core Student Information System (SIS) business, with revenue up 7.2% to £72.7m and margin improvement to 37.9%.

• Cloud revenue grew 25.2% to £13m, reflecting successful customer migration and expansion of Foundation Cloud.

• Annual Recurring Revenue (ARR) increased 6.5% to £57m, driven by core product growth and new customer wins.

• Net debt reduced significantly from £7.2m to £3.2m, supported by strong cash conversion and cost reductions.

• Focused on transitioning to a pure-play EdTech SaaS model, expanding global reach, and driving recurring revenue through subscription pricing and bundled offerings.

Financial highlights

• Group revenue rose 6% year-over-year to £90m, led by SIS and Foundation Cloud.

• Adjusted EBITDA increased 17.8% to £16.7m; cash adjusted EBITDA up 114% to £12.2m.

• Profit before tax slightly lower at £5.9m due to £3m exceptional cost from Nanyang Technological University settlement.

• Adjusted basic EPS rose to 4.7p; final dividend proposed at 0.65p, unchanged from prior year.

• Free cash flow improved by £8.7m to £7.3m; FTE reduced by 41 to 867, with SIS headcount down 59.

Outlook and guidance

• Expect continued growth in cloud migration, subscription pricing adoption, and new customer wins.

• H1 2025 trading in line with expectations; sector challenges may drive further tech investment.

• Focus on scaling subscription pricing and launching next-generation cloud infrastructure and new products, including Tribal Admissions.

• Etio performance anticipated to improve in 2024, but not to previous peak levels due to ongoing market uncertainty.

• Higher education sector faces challenges from declining international student numbers and restricted funding.