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Highlights

  • IDP shares crash 40% to AUD 4.48, wiping out AUD 832 million in market value.

  • FY25 adjusted EBIT forecast slashed by up to 52%, driven by falling student placements and testing volumes.

  • Policy shifts in Australia, UK, US, and Canada blamed for downturn; IDP pivots to cost cuts and digital investment.

Shares in IDP Education Ltd (ASX:IEL) plunged by 40% to AUD 4.48 in early Tuesday trade, after the global education and student support services company issued a profit warning that shocked the market. The sharp selloff erased around AUD 832 million from IDP’s market capitalisation and marked the stock’s lowest level since 2017, continuing a steep decline of over 71% in the past 12 months.

The share price drop follows IDP’s announcement that earnings for financial year 2025 (FY25) could fall by as much as 52%.

Earnings Halved Amid Global Policy Tightening

In a pre-market update, IDP said it expects adjusted EBIT for FY25 to be between AUD 115 million and AUD 125 million, down from AUD 239.4 million in FY24. The downgrade comes amid a significant contraction in international student movement, driven by increasingly restrictive visa and immigration policies in IDP’s key markets — the UK, Australia, Canada, and the US.

The company expects student placement volumes to fall by 28–30% and language testing volumes to drop by 18–20% compared to FY24. While IDP notes that average fee increases will help partially cushion the revenue blow, the drop in volumes will heavily impact earnings.

Cost Control Measures Underway

In response, IDP has moved to tighten costs, with adjusted overheads in the second half of FY25 expected to be 5% lower than the same period last year. The company noted this comes despite negative operating leverage, where falling revenue puts disproportionate pressure on margins.

The current downturn has prompted IDP to pivot its operational focus. “During this challenging period, we will focus on growing market share, delivering further cost reduction, and prioritising investment in digital and AI-enabled product development,” the company said.

Student Policy Uncertainty Wreaks Havoc

The company squarely attributed the earnings collapse to policy turbulence in international student destinations, which has disrupted its student pipeline and conversion rates, particularly during the critical May–June intake season.