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$STI Posts Strong Half‑Year Results, Backs Earnings with Cash and Dividends





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Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.


STI Education Systems Holdings, Inc. (STI) posted a solid first‑half performance for fiscal year 2025–2026, underscoring the group’s ability to translate enrollment scale, pricing discipline, and tight cost management into resilient earnings, even as quarterly results normalized following an exceptionally strong start to the school year.

For the six months ended December 31, 2025, STI reported net income of ₱1.08 billion, up 18% year‑on‑year, while earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 13% to ₱1.55 billion, reflecting sustained operating momentum across its nationwide education network. 

A Normalized Quarter After a Front‑Loaded Start

In the second quarter alone, STI recorded net income of ₱461 million, down from ₱619 million in the September quarter. Revenues likewise eased to ₱1.39 billion, compared with ₱1.44 billion in the previous quarter. Management, however, emphasized that the decline was not a sign of weakening demand but a normalization effect following an unusually strong first quarter. 

The earlier quarter benefited from the earlier opening of School Year 2025–2026, which began in late July rather than mid‑August. Under Philippine Financial Reporting Standards, STI recognizes tuition income based on actual instructional days, resulting in a larger portion of school‑year revenues being booked in the September quarter.

As a result, earnings in the December quarter reflected a more typical academic rhythm, with revenues spread more evenly across the term.

Tuition Growth and Pricing Power Remain Intact

Despite the sequential dip, STI’s core revenue base remained robust. Tuition and other school fees continued to account for the bulk of revenues, supported by modest tuition adjustments implemented across STI Education Services Group, STI West Negros University, and iACADEMY. 

Enrollment levels were largely stable at the tertiary level, offsetting softness in Senior High School intake, which management attributed to earlier public‑school openings and broader system‑wide trends rather than competitive pressures. 

Cost Discipline and Scale Support Margins

Operating costs increased in the December quarter as faculty salaries, staff benefits, and campus operating expenses ran for a full quarter, unlike the September period, which benefited from partial cost absorption. Cost of educational services rose to ₱429 million, while general and administrative expenses remained largely flat at ₱455 million, demonstrating continued cost discipline. 

Although operating income declined quarter‑on‑quarter to ₱498 million, margins remained healthy, and EBITDA stayed comfortably above pre‑pandemic levels, reflecting the benefits of scale across STI’s 63‑school network nationwide.

Non‑Operating Income Normalized

A significant factor behind the quarter‑on‑quarter earnings decline was the normalization of non‑operating income. Rental income fell sharply to ₱12 million from about ₱63 million in the September quarter, while earlier one‑off and timing‑related gains did not recur.

Tax expense also increased as deferred tax benefits recognized earlier in the year tapered off, further weighing on reported net income. These factors, management noted, were largely accounting and timing‑related, with no material impact on cash generation. 

Strong Balance Sheet Provides Flexibility

STI ended December with ₱3.18 billion in cash and cash equivalents, supported by operating cash flows of over ₱1.05 billion for the six‑month period. The group’s debt‑to‑equity ratio remained low at around 0.30, giving it ample headroom to fund campus expansions while maintaining financial stability. 

Unearned tuition and school fees stood at ₱411 million, representing revenues already collected but to be recognized in subsequent quarters, providing further earnings visibility.

Investing for the Next Growth Phase

Capital expenditures during the period focused on new academic centers, facility upgrades, and solar power installations to improve capacity utilization and lower long‑term operating costs. Management expects these investments to support enrollment growth and margin resilience in future school years. 

Outlook: Steady, Not Spectacular — and That’s the Point

While quarterly earnings may fluctuate with the academic calendar, STI’s first‑half results highlight a business that is executing consistently. The group continues to benefit from early enrollment capture, disciplined pricing, and a conservative balance sheet, allowing it to absorb seasonal swings without compromising profitability.

For investors, the message is clear: the September quarter set a high bar, but the December results confirm that STI’s earnings strength is structural rather than cyclical, positioning the company for another solid full‑year performance. 

We’ve been blogging for free. If you enjoy our content, consider supporting us!

Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.

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