G8 Education FY25: Occupancy decline, safety reform and sector outlook

The 2025 financial year has marked a complex and defining period for Australia’s early childhood education and care (ECEC) sector. The FY25 results and strategic repositioning of G8 Education, Australia’s largest ASX-listed provider, operating 395 centres, offer a clear signal to commercial investors, approved providers, large operators and policymakers about the pressures reshaping the operating environment.

From macro-economic constraints and declining occupancy to intensified regulatory scrutiny and workforce reform, the sector is navigating structural change.

G8 Education reported a statutory net loss after tax of $303.3 million in FY25, largely driven by a $349.1 million non-trading goodwill impairment. Operating EBIT declined 18.9 per cent to $93.3 million, while total revenue fell 7.2 per cent to $948.2 million.

Occupancy declined 4.9 percentage points to 65.8 per cent, reflecting broader sector trends.

Several macro factors continue to influence enrolment and demand:

• Cost-of-living pressures: Sustained inflation and interest rates are affecting household budgets and enrolment patterns.
• Demographic shifts: Australia’s total fertility rate has reached historic lows following a multi-year decline in birth rates.
• Market supply dynamics: Continued centre development in some regions has coincided with moderating workforce participation growth.

For large operators, the combination of softening demand and rising fixed costs has required disciplined portfolio management. G8 divested five centres and surrendered six leases as part of network optimisation.

FY25 was also marked by heightened public scrutiny following serious child protection incidents across the sector, including a case involving a former G8 Education employee in Victoria.

For approved providers and centre managers, safety and compliance have moved beyond regulatory obligation to become central to sector viability and public trust.

Despite financial headwinds and heightened scrutiny, G8 Education reported strong quality performance across its network in FY25, outperforming the broader early childhood education and care sector.

By the end of 2025, 95 per cent of G8 services were rated as ‘Meeting’ or ‘Exceeding’ the National Quality Standard (NQS) overall, four percentage points above the national sector average. This represents a two percentage point improvement year-on-year.

Performance in key quality areas was similarly strong:

• Quality Area 1: Educational program and practice with 96 per cent of assessed services achieved a ‘Meeting’ or ‘Exceeding’ rating, reflecting continued emphasis on school readiness and evidence-informed pedagogy.
• Quality Area 2: Children’s health and safety with 96 per cent of assessed services achieved ‘Meeting’ or ‘Exceeding’, aligning with the organisation’s strengthened safety framework.

The proportion of services rated ‘Working Towards’ has continued to decline, supported by targeted intervention strategies. The Group has implemented additional support structures, including monthly learning communities to assist Educational Leaders in driving continuous improvement in identified services.

For large providers, these outcomes demonstrate that scale does not preclude quality performance, particularly when governance, leadership capability and improvement systems are embedded across the network.

G8 has outlined a strengthened ‘Safety, First and Always’ framework, including:

• a phased CCTV rollout from 2026
• prohibition of personal devices in centre rooms
• dedicated Safety Leaders in each service with protected time
• centralised Working with Children Check processes and teacher registration verification

Regulatory reform has accelerated in parallel, reinforcing that governance oversight and risk management frameworks must be robust and visible.

The Federal Government-funded Early Childhood Education and Care Worker Retention Payment introduced a 15 per cent wage increase above Award rates, 10 per cent from December 2024 and a further five per cent from December 2025.

Early indicators suggest improved workforce stability. G8 reported:

• a two percentage point improvement in team member retention to 79 per cent
• a 25 per cent year-on-year reduction in early childhood teacher vacancies

However, participation in the multi-employer agreement requires compliance with fee growth caps of 4.4 per cent in year one and 4.2 per cent in year two. For providers, balancing wage competitiveness with financial sustainability remains a central operational challenge.

The ECEC sector is entering a new operating phase. Financial discipline, governance strength and visible child safety frameworks are now central to sustainability.

While short-term financial pressures remain, structural fundamentals, including continued government investment and workforce reform, provide longer-term stability.

Providers that adapt successfully will be those that:

• maintain strong occupancy management and cost control
• embed child safety and compliance as core governance priorities
• leverage retention funding to build stable, qualified teams
• sustain quality outcomes that strengthen family trust

For investors and policymakers, FY25 identifies that early learning is not only a social infrastructure asset, but a regulated public service operating within evolving economic and political constraints.

Source: G8 Education FY25 results and investor materials