STI Education Systems Q2 profit: P641M (up 30% y/y)

STI Education Systems [STI 1.41 ?0.7%; 88% avgVol] [link] posted a Q2/24 net income of P641 million, up 30% from its Q2/23 net income of P492 million. Gross revenues were up 22% to P283.5 million, “driven by a remarkable increase in the student population” and compounded by tuition fee increases. Together, these factors caused STI’s gross profit to increase 23% y/y to P217 million. STI said that its cash and cash equivalents improved 14% to P268 million thanks to “the Group’s profitable operations and improved collection efficiency.” 

MB BOTTOM-LINE:  STI uses a non-standard fiscal year which is “linked to the academic cycle”, with Q1 starting in September (with the start of the school year) and Q4 ending in June (at the end of the school year). I got a couple of questions about non-standard fiscal years coming out of yesterday’s post about Figaro [FCG 0.77 ?2.7%; 214% avgVol], talking about their Q2 earnings report at a time when investors might be expecting to talk about annual earnings reports. For STI, it makes total sense to me why they’d configure their fiscal year in this way. It makes way less sense to me why FCG would do it, but after following the Liu Family’s exploits on the PSE for so many years, I’ve just come to expect something a little different from that group, seemingly for the sake of being different. OK, enough about the boring stuff, what about this business? This business is kicking ass. They’re profitable, well-positioned, and improving across all internal business KPIs and external metrics of corporate health. From a share perspective, the stock is up a little over 5% so far in 2025, but it’s up 99% over the past 12 months, and up 308% over the past three years. I got involved with this stock way back in the old days after COVID when I thought that it would grow into an online education behemoth. That never came to be. I was 100% wrong about why STI would be a successful investment, and yet, still “right’ from a portfolio return perspective. Happy accident.