Market and Trading Update

• IDP Education Limited has provided a market and trading update, indicating that its key destination markets are still being affected by policy uncertainty, with further restrictions on student immigration anticipated.
• This uncertainty has led to a sharp decline in student demand in Canada and an increasingly negative international student environment in the US.
• The company's student enrolment pipeline size and conversion rates for the important May and June intake periods have been impacted, with the pipeline down 20% compared to FY24.
• Despite strong average fee growth partially mitigating the revenue impact, IDP now estimates its Adjusted FY25 EBIT to be in the range of $115 million to $125 million.
• The business has implemented cost control initiatives, expecting Adjusted Overhead Costs for H2 FY25 to be approximately 5% below H2 FY24, despite negative operating leverage.
• IDP is conducting a detailed review of longer-term cost, productivity, investment, and commercial levers, with an update expected at the FY25 results announcement in August 2025.
• The company remains confident in the long-term growth drivers of the international education industry and is focusing on market share gains, cost reduction, and prioritised investment in digital and AI-enabled product development.

Score: 3

Explanation: The document conveys a predominantly negative sentiment due to significant downward revision of EBIT guidance, sharp declines in student volumes, and ongoing policy uncertainty in key markets, despite mentioning some mitigating actions and long-term confidence.

• IDP is a market leader with global scale and a unique offering in the international education sector.
• The company is implementing a disciplined approach to costs, aligning expenses with short-term market conditions.
• A strategic long-term cost review is underway to enhance productivity and efficiency.
• IDP maintains a robust balance sheet with a strong cash position, providing financial stability.
• Focused investment in quality and innovation, including digital and AI-enabled product development, aims to ensure long-term growth and market share gains.
• The business expects to continue gaining market share in Student Placement as the sector increasingly focuses on quality services.
• IDP believes in the long-dated structural growth drivers that underpin the economic and social importance of the international education industry.

• Key destination markets continue to be impacted by policy uncertainty, with further restrictions on student immigration expected.
• Student demand in Canada continues to decline sharply due to ongoing policy volatility.
• The international student environment in the US is increasingly negative.
• The student enrolment pipeline size and conversion rates for important intake periods have been negatively impacted.
• The company now estimates a lower Adjusted FY25 EBIT range of $115 million to $125 million.
• IDP is experiencing negative operating leverage, which complicates cost management.
• Aggregate international student volumes to key IDP destinations are down 28% for the first three quarters of FY25 compared to the same period last year.
• Policy uncertainty and negative rhetoric are expected to continue into FY26, impacting future volumes.

• Continued policy uncertainty in key destination markets like Australia, Canada, and the US poses an ongoing challenge to student enrolment.
• The anticipated impact of the FY25 enrolment pipeline on FY26 volumes suggests a potential for sustained lower student numbers.
• Economic uncertainty has increased, which could further dampen international student mobility and spending.
• Geopolitical uncertainty adds another layer of complexity to the international education landscape.
• The risk of further restrictive policy changes, such as student caps, increased visa fees, and agent commission bans, could severely impact IDP's operations.
• The company's negative operating leverage means that revenue declines can disproportionately affect profitability.

Policy uncertainty is expected to persist into FY26, with anticipated impacts on future volumes from the FY25 enrolment pipeline; however, IDP is undertaking a detailed review of its cost, productivity, investment, and commercial strategies to navigate these conditions and remains confident in the long-term structural growth drivers of the international education industry.

• IDP remains confident in the long-term growth drivers for the industry and is well placed to navigate the current challenging market conditions.
• As a market leader, IDP will look to leverage opportunities to support clients through changes in conditions in destination markets.
• IDP has strengthened cost reduction actions to adapt expenses to the near-term revenue outlook.
• The business remains committed to its roadmap of digital and AI-enabled product development but will adjust the pace and scale to market conditions.
• With a clear strategy, an experienced global team, and a strong balance sheet, IDP remains well-placed to lead the sector through this period and emerge stronger when conditions improve.

The international education industry is currently facing significant headwinds due to global policy shifts towards more restrictive immigration, particularly in key destination markets like Australia, Canada, the UK, and the US, leading to declining student volumes and increased economic and geopolitical uncertainty.

• Shareholders are likely to experience negative impacts due to the downward revision of FY25 EBIT guidance, which could affect share price and future dividends.
• Students face increased uncertainty and potential difficulties in securing visas or enrolling in desired programs due to restrictive immigration policies and negative rhetoric.
• Employees may be affected by cost control initiatives and a detailed review of longer-term cost and productivity levers, potentially leading to restructuring or changes in work scope.
• Suppliers and partners in the international education ecosystem may see reduced demand for their services as student volumes decline.
• Creditors might view the company's financial outlook with increased caution, although the robust balance sheet and strong cash position provide some reassurance.

• IDP's Chief Executive Officer and Managing Director, Tennealle O'Shannessy, and Chief Financial Officer, Kate Koch, will host an investor call today, June 3, 2025, at 10:00 AM AEST to provide commentary on the market update.
• A detailed review of longer-term cost, productivity, investment, and commercial levers is being completed.
• An update on the detailed review will be provided at the FY25 results announcement in August 2025.
• Detailed financial and operational performance will be provided at the company's results announcement on August 28, 2025.

• 2025-06-03: Date of the ASX announcement and investor call hosted by IDP's CEO and CFO.
• 2025-08-28: Date of the company's FY25 results announcement, where an update on the longer-term cost review will be provided.