IDP plunges after cutting guidance amid international students restrictions
Make us a preferred source
Make us a preferred source on Google
More news: Global education and student support services provider IDP shares plunged after the company warned of weaker full-year earnings as key international student destination countries pursue restrictive policies.
The numbers: Shares in IDP had dropped 40% to $4.48 at 10:24am AEST and are down 71.6% over the last 12 months. The stock is at its lowest price level since 2017.
The share price crash represents a market capitalisation wipeout of around $832 million.
IDP’s earnings expected to halve amid policy turmoil for international students
The news: Global education and student support services provider IDP has reported full-year guidance that reflects as much as a 52% drop in adjusted EBIT for financial year 2025 amid an increasingly restrictive policy environment for international students.
The numbers: IDP estimates that adjusted FY25 EBIT will be in the range of $115 million and $125 million. In FY24, the company posted an adjusted EBIT of $239.4 million.
Student placement volumes are expected to decrease by between 28% and 30% while language testing volumes are expected to decrease by 18% and 20% compared to FY24. However, the impact on revenue will be partially offset by average fee growth.
Cost control initiatives have been in place since the first half of FY25, with adjusted overhead costs for H2FY25 expected to be 5% lower than the same period in FY24, despite negative operating leverage.
The context: IDP flagged policy uncertainty affecting international students in its key destination markets of the UK, Australia, Canada and the US as affecting the company’s student enrolment pipeline size and conversion rates during the important May and June period.
During this challenging operating period, the company intends to focus on growing market share, cost reduction and prioritising investment in digital and AI-enabled product development.
What they said: “Governments in all key destination countries are currently seeking to temporarily reduce migration levels, and economic and geopolitical uncertainty has increased,” the company said in a statement to the exchange.
“Despite this, IDP believes the long-dated structural growth drivers that underpin the economic and social importance of the international education industry, and immigration more broadly, will support the market’s sustainable long-term growth trajectory.”
The source: ASX
