Nido Education reported a 4% year-on-year rise in group revenue to AUD 85.8 million for the first half of fiscal 2026, driven by a 4% increase in service revenue to AUD 81.4 million. However, adjusted EBITDA declined to AUD 4.3 million, while adjusted net profit after tax fell to AUD 2.1 million, reflecting margin compression in a challenging operating environment.
Service-level adjusted EBITDA totaled AUD 10.7 million, with a 13% margin, down from prior periods. Service costs rose to AUD 17.7 million, while support office costs reached AUD 6.4 million. The group recorded 434,000 days of learning at an average daily fee of AUD 183, with a stable wage-to-revenue ratio of 57%. Operating cash flow conversion stood at 110%, with free cash flow conversion at 77%. Capital expenditure for the period was AUD 1.5 million.
Shares in Nido Education fell 20.59% to AUD 0.26, extending declines from AUD 0.34 in the prior session. The stock has traded between AUD 0.23 and AUD 0.73 over the past 52 weeks, with a market capitalization of AUD 55 million and a P/E ratio of 16.6. The company’s gross profit margin over the last twelve months remained elevated at 93.5%, while its free cash flow yield was 20%. The current ratio stood at 0.29, and the dividend yield was 27.9%.
Management extended its loan facility to February 2028, increasing total capacity to AUD 65 million. As of June 30, AUD 47 million had been drawn, leaving AUD 18 million in available headroom for acquisitions. The incubator loan remains repayable no later than 2029.
Revenue growth was supported by a 17% increase in offers of enrollment compared with the prior year, though management cautioned that its target of 20% annual adjusted EBITDA growth is unlikely to be met this year due to acquisition timing and sector headwinds. The owned and incubated portfolio expanded by 37% since the October 2023 IPO to 81 services, while incubator occupancy averaged 52%, below the 80% target threshold. Educator retention improved to 83%, and fee adjustments were implemented in August 2026 under the government-funded Worker Retention Grant.
The center management agreement with Busy Bees Childcare, which began in October 2021, has concluded. Sector-wide challenges persist, with long-daycare attendance declining 2.8% in the year to March, according to the Federal Department of Education, amid weaker birth cohorts. Center-based daycare supply grew 2.5% to 9,700 services, including 425 new openings and 204 closures, while the Worker Retention Grant has been extended to mid-2028.
