Key Highlights

  • Revenue declined 6.7% to $88.9 million, reflecting difficult conditions across the international education market.
  • Underlying EBITDA increased 7.0% to $15.3 million, supported by improved margins and lower operating costs.
  • Net loss narrowed 17.5% to $12.0 million, while underlying EBIT moved into positive territory at $3.1 million.
  • NextEd ended FY26 with $18.2 million in cash and no external borrowings, while vocational courses increased to 59% of International segment revenue.

NextEd Group Limited (ASX:NXD) reported a mixed FY26 performance, with Revenue declining while profitability measures improved amid challenging conditions for Australia's international education sector. Revenue fell 6.7% year on year to $88.9 million, but underlying EBITDA increased 7.0% to $15.3 million.

The operating environment was affected by higher Student Visa Application Charges and lower visa grant rates. These factors placed pressure on international student Demand and contributed to the decline in revenue.

Despite lower revenue, NextEd continued to reduce its cost base. Operating costs fell to $33.9 million in FY26 from $36.8 million in FY25. Since FY24, the operating cost base has declined by $8.5 million, or approximately 20%.

Margin Improvement Supports EBITDA Growth

The decline in revenue did not translate into a corresponding reduction in underlying EBITDA. Gross Margin improved to 55.4% from 53.6% in FY25, helping the group generate higher underlying Earnings despite lower sales.

Underlying EBIT also moved into positive territory, reaching $3.1 million compared with a loss of $0.1 million in the previous financial year.

Operating cash flow remained relatively stable at $10.9 million, compared with $11.3 million in FY25. The modest decline in operating cash generation indicates that the improvement in underlying EBITDA was accompanied by broadly consistent cash conversion.

NextEd finished the year with $18.2 million of cash and no external borrowings, giving the company a debt-free Balance Sheet at 30 June 2026.

Vocational Courses Gain Greater Importance

A key change in NextEd's Business mix has been the increasing contribution from vocational education. Vocational courses accounted for 59% of International segment revenue in FY26, compared with 47% a year earlier.

The company also increased its VET Market Share from 1.9% to 2.5%. This shift has helped offset weaker revenue from English language tuition and reflects NextEd's focus on areas where demand has been more resilient.

The company's vocational offering spans areas including business, technology, hospitality, health and community services. Management has indicated that care economy and community services offerings will receive greater focus in FY27.

Net Loss Narrows Despite Goodwill Impairment

NextEd reported a net loss after tax of $12.0 million, an improvement from the $14.6 million loss recorded in FY25. This represents a 17.5% reduction in the reported net loss.

The result included a $13.0 million non-cash Impairment against goodwill associated with the International cash-generating unit. The impairment reflects the company's assessment of prevailing market conditions affecting international education.

The distinction between underlying operating performance and statutory earnings is therefore important in assessing the FY26 result. While the company remained loss-making after tax, its underlying EBITDA increased and underlying EBIT returned to positive territory.

Cost Discipline Remains Central to FY27

NextEd's cost reductions have become an important feature of its response to weaker international student conditions. Operating costs have fallen from $42.4 million in FY24 to $33.9 million in FY26.

The company intends to maintain this focus while directing greater attention towards teaching quality, student experience and business areas that have demonstrated greater resilience during the current cycle.

At the same time, policy and regulatory conditions remain important variables for the international education market. Higher visa application charges and reduced visa grant rates have affected providers across the sector, creating an external constraint on student volumes.

Balance Sheet Provides Financial Flexibility

The company's $18.2 million cash position and absence of external borrowings provide a different financial position from one involving significant Debt obligations. Operating Cash Flow of $10.9 million also remained positive during the year.

With revenue under pressure but EBITDA improving, the FY26 figures point to the importance of NextEd's changing business mix and cost structure. The increased contribution from vocational education has become a material component of the group's response to weaker international language tuition.

Conclusion

NextEd's FY26 result combines a 6.7% decline in revenue with a 7.0% increase in underlying EBITDA and a 17.5% reduction in its net loss. The improvement was supported by a higher gross margin, lower operating costs and greater exposure to vocational education, while the $13.0 million goodwill impairment highlights continuing pressure within the international education segment. With $18.2 million of cash, no external borrowings and a growing VET market share, NextEd enters FY27 with its financial position supported by cost discipline, although the broader international education environment remains an important Factor for future revenue performance.