IDP Education reported fiscal 2026 results showing resilience in profitability despite sharp declines in student volumes and revenue across key markets. The company maintained a gross margin of 60% while total revenue fell 11% year-over-year to $795.4 million, driven by a 27% drop in student placement volumes and an 8% decline in English language testing volumes.
Adjusted earnings before interest and tax decreased 7% to $122.9 million, though overhead costs fell 14% to $302.2 million, exceeding cost-reduction targets. Employee costs declined 11% following the elimination of approximately 1,250 roles, representing 20% of the workforce, while occupancy expenses dropped 10% as the IELTS testing footprint was reduced from about 1,500 venues to fewer than 600. Marketing spending fell 18%.
Student placement revenue declined 17% to $362.9 million, with volumes down 27% and average yield per placement rising 11% to $5,586. Yields improved across regions, with Australia up 4% and other destinations up 17%. English language testing revenue fell 5% to $388.9 million, while yield per test increased 7% in constant currency to $325. India’s IELTS volumes declined 22%, outperforming the broader Indian market’s 28% drop.
Geographic shifts in student placements were pronounced. Australia’s share of placements rose from 43% to 58%, while Canada and the U.S. saw declines of 80% and 67%, respectively. India’s share of total placements increased to 37% from 31%. Visa approval rates for IDP students remained above market averages in Australia and Canada, with IDP students achieving 86.3% approval in Australia versus an 81.2% industry rate.
The company maintained strong liquidity with $341 million in undrawn credit facilities and reported net leverage of 1.0x, down from 1.4x. A final unfranked dividend of 6.0 cents per share was declared, and a share buyback program of up to $50 million was announced. Contract assets and receivables fell 56%, while days sales outstanding improved to 33 days and cash conversion reached 139%.
IDP outlined a $15 million cost-saving target for fiscal 2027 and highlighted progress in its FastLane AI-driven student matching platform, which delivered a 7% higher conversion rate and a 13-point improvement in Net Promoter Score. The company has deployed over 100 AI models in production, supported by a team of more than 500 specialists. Average revenue per user for Student Essentials products grew 24%, with 53% of students purchasing at least one product.
Looking ahead, IDP guided adjusted EBIT for fiscal 2027 to between $95 million and $115 million, assuming market volumes decline 20% to 30% versus fiscal 2026 levels. One-off transformation costs of approximately $40 million are expected, and net leverage is projected to remain at or below 1.5x.
