IDP Education Ltd’s shares dropped 25.12% to AUD 1.63 on Thursday after the company reported a 9% year-on-year revenue decline to AUD 1.15 billion for the fiscal year ended June 30, 2026. Adjusted earnings before interest and tax fell 7% to AUD 123 million, while gross margin remained flat at 60%.
Student placement revenue fell 16% with volumes down 27%, though yield rose 11%. IELTS revenue slipped 1% as global volumes declined 8%, including a 22% drop in India and a 3% decline outside the country. Yield for IELTS increased 7%, driven by annual price increases and source country mix.
The company reduced overhead costs by 11% to AUD 302 million, exceeding its AUD 25 million net cost-reduction target. Headcount fell by 1,250 roles, or 20%, while net leverage improved to 1.0 times from 1.4 times a year earlier. Cash holdings stood at AUD 135 million, with undrawn facilities totaling AUD 341 million. Free cash flow yield reached 18%, and the board declared a final unfranked dividend of AUD 0.06 per share, maintaining annual payouts for 11 consecutive years.
For fiscal 2027, management expects market volumes to decline 20-30% compared with FY26, with adjusted EBIT guided between AUD 95 million and AUD 115 million. Additional cost reductions of AUD 15 million are targeted, while net leverage is expected to remain at or below 1.5 times. Transformation spending is projected at AUD 40 million, primarily for ERP and back-office modernization.
IDP operates 25 IELTS test centers in China and consolidated global locations from roughly 1,500 to fewer than 600. The company’s stock has fallen 56% over six months and 62% year-to-date, with a market capitalization of AUD 321 million.
