NextEd Boosts EBITDA 16.7% as AI and Cost Cuts Drive Growth
NextEd Group Limited reported a 16.7% rise in underlying EBITDA and a 92% reduction in NPAT loss for H1 FY26, underpinned by AI integration and a strategic shift to higher-margin education segments.
- Underlying EBITDA up 16.7% to $6.7 million
- NPAT loss reduced by 92%, nearing breakeven
- Revenue down 2%, offset by growth in international education
- Operating costs cut by 9%, permanent cost base reset
- AI embedded across curriculum and operations driving efficiency
Solid Financial Turnaround Amid Revenue Pressure
NextEd Group Limited’s half-year results for the period ending 31 December 2025 reveal a company in transition. Despite a slight 2% dip in revenue to $45.7 million, the education provider has delivered a notable 16.7% increase in underlying EBITDA to $6.7 million, alongside a dramatic 92% reduction in net loss after tax. This improvement signals a stronger operational footing as NextEd navigates a challenging domestic funding environment and intensifying competition.
Strategic Shift to Higher-Margin Vocational and Higher Education
The revenue mix is shifting decisively towards higher-margin vocational programs and higher education pathways, areas where NextEd is expanding its footprint. International education segments, particularly English Language Intensive Courses for Overseas Students (ELICOS) and vocational education and training (VET), have grown market share significantly. ELICOS market share rose to 18.6%, while vocational share jumped 2.7%, reflecting the company’s success in attracting more international students and increasing lifetime value per student by 35% year-on-year.
AI Integration Driving Efficiency and Student Value
NextEd is leveraging artificial intelligence to enhance both operational efficiency and educational delivery. The integration of OpenAI Codex into its IT degree and the rollout of an AI Foundations Program for thousands of students exemplify this approach. These initiatives have already delivered approximately $0.3 million in cost savings and promise scalable benefits across recruitment, retention, and curriculum innovation. This tech-forward stance positions NextEd as a leader in applied AI within the education sector.
Cost Base Reset and Cash Flow Strength
Permanent cost reductions have trimmed operating expenses by 9%, with a leaner operating platform and property optimisation playing key roles. The company executed several sub-lease agreements, unlocking around $0.5 million annually in savings. Operating cash flow improved markedly to $3.0 million, more than triple the prior corresponding period, supporting a robust balance sheet with $16 million in cash and no bank debt. This financial discipline underpins NextEd’s capacity to invest selectively in growth areas.
Outlook: Scaling Growth with Discipline
NextEd’s management highlights a clear focus on scaling growth through expanding international market share, deepening vocational and higher education penetration, and leveraging AI for differentiation. While domestic revenue faced headwinds from South Australian funding cuts, the company’s international and technology-driven segments showed resilience. The next chapters will test how effectively NextEd can sustain momentum amid evolving market dynamics and regulatory environments.
Bottom Line?
NextEd’s disciplined cost management and AI-driven innovation set the stage for sustainable growth, but market shifts demand ongoing agility.
Questions in the middle?
- How will NextEd sustain growth amid domestic funding challenges?
- What further AI-driven efficiencies and curriculum innovations are planned?
- Can the company maintain its expanding international market share in a competitive landscape?
