Nido revenue rises to $85.8m as earnings target withdrawn and CFO resigns

Nido Education Limited has reported higher first-half revenue but lower earnings and a statutory loss, prompting the early childhood education and care operator to withdraw its FY2026 adjusted earnings growth target. The result follows the resignation of long-serving Chief Financial Officer Tom Herring, who will leave the company in November.

The ASX-listed provider described the six months to 30 June 2026 as a period of disciplined execution within a challenging and evolving operating environment for Australia’s early childhood education and care sector.

While network expansion and continued demand supported revenue growth, lower days of learning and labour costs that were unfavourable to the company’s expectations affected earnings performance.

In an announcement released on 25 August, Nido confirmed the resignation of Chief Financial Officer Tom Herring, who has overseen the company’s financial development from a privately owned group to an ASX-listed operator.

“Over his five-year tenure he has provided financial stewardship of Nido from a private group through raising circa $100 million and listing Nido on the ASX.”

The company said Mr Herring’s contribution had been substantial in establishing the foundations of Nido’s finance function.

He will remain in the position until 5 November 2026 to support an orderly transition, while Nido undertakes a recruitment process to appoint his successor.

Nido reported group revenue of $85.8 million, up from $82.8 million in the corresponding period, supported by network expansion and continued demand for early learning and care.

Service revenue accounted for $81.4 million, while establishment and management fees contributed a further $4.4 million.

However, the company recorded weaker earnings across several key measures:

• adjusted EBITDA fell 34.3 per cent to $4.3 million, from $6.6 million;
• adjusted net profit after tax declined 54.3 per cent to $2.1 million, from $4.6 million; and
• statutory net profit after tax moved from a $2.5 million profit to a $201,000 loss.

No interim dividend was declared for the half year.

At the service level, Nido generated adjusted EBITDA of $10.7 million, representing a service margin of 13 per cent.

The company delivered 434,000 days of learning, with an average daily fee of $183 and a wage-to-revenue ratio of 57 per cent.

Nido highlighted several pressures affecting the broader early childhood sector, including cost-of-living pressures on families, rising expectations, uneven supply growth and lower demand in some local markets.

The company’s investor presentation noted that the number of children attending centre-based day care declined by 2.8 per cent in the year to March 2026.

Occupancy also began the year from a lower base than anticipated.

Despite these conditions, Nido said enquiry levels remained resilient, with offers of enrolment tracking approximately 17 per cent ahead of the previous year.

The company’s immediate focus is on converting those enquiries and offers into enrolments and days of learning, while improving roster productivity and maintaining service quality.

Nido said its quality ratings remained above the sector average and that its operating priorities continued to centre on quality education and care, child safety and protection, family and educator experience, and consistent service delivery.

Employee retention improved to 83 per cent on a 12-month moving average, while more than 7,500 hours of training were delivered during the half

Nido opened four new services during the first half, with another two services opening after the reporting period.

The company also acquired four services:

• Nido Early School Wembley Downs in Western Australia;
• Nido Early School Piara Waters in Western Australia;
• Nido Early School Treeby South in Western Australia; and
• Nido Early School Para Hills in South Australia.

The services had Google ratings ranging from 4.5 to five stars as of 26 August 2026.

At 30 June, Nido owned 63 services and managed another 34 on behalf of third parties, including 16 incubated services.

Its incubator model remains central to the company’s growth strategy, providing access to what Nido describes as a de-risked acquisition pipeline of more than 100 services over the next five years.

Nido extended its NAB banking facility to February 2028 and increased the facility limit from $55 million to $65 million.

As of 30 June, the facility was drawn to $47 million, leaving $18 million in available headroom to support acquisitions and continued growth.

During the half, Nido provided a further $5 million loan to NAED Holdings Pty Ltd, its externally owned incubator partner.

The loan receivable had reached $20.45 million by 30 June, including $2.5 million in accrued interest. The loan carries an interest rate of eight per cent and is repayable in 2029.

In February, Nido told the market it was targeting adjusted EBITDA growth of approximately 20 per cent for FY2026, supported by organic performance and its acquisition pipeline.

The company has now formally withdrawn that target after days of learning and labour costs during the first seven months of the year performed below the assumptions underpinning the forecast.

“The Company does not expect to achieve that target within the current financial year. Accordingly, Nido formally withdraws the previously communicated FY2026 AEBITDA growth target.”

Nido said it continues to pursue several potential acquisitions, although their timing and completion remain uncertain and their possible contribution to the full-year result cannot yet be quantified.

From August, the company also increased fees within the parameters permitted under the Australian Government-funded Worker Retention Payment.

A review of Nido’s cost base is underway, with benefits expected to emerge progressively during the remainder of the year. The company said the review is intended to improve productivity, consistency and financial returns while protecting the quality of education and care.

Nido’s Centre Management Agreement with Busy Bees has also concluded.

Despite the softer earnings result and withdrawal of its FY2026 target, Nido said resilient enquiries, stronger enrolment offers and its growing acquisition pipeline continued to support confidence in its medium-term outlook.

For the balance of the year, the company will focus on:

• converting enquiries into occupancy;
• translating improved systems and processes into productivity;
• converting its strengthened operating platform into sustainable earnings growth; and
• continuing to invest in quality, safety, family and educator experience, workforce capability and disciplined growth.

The Board reiterated its focus on creating long-term value through organic growth, selective acquisitions and continued investment in the quality and consistency of Nido’s early learning services.

Read the full half year result here.