Welcome to the Infinity Business Brokers, 2026 State of the Market Report for the Australian Registered Training Organisation (RTO) and CRICOS sectors.

Since the last report in July 2025, the sector has seen sustained growth and evolvement. The market has entered a more disciplined phase. Over the past six months, regulatory settings have tightened in practice rather than theory, buyer behaviour has become more forensic and value is increasingly determined by market evidence than emotion.

In the last 6 months we have engaged with over 3025 buyers, we sold 24 RTOs from July 2025 to January 1 2026 and this report reflects what is occurring on the ground across transactions, valuations, due diligence processes and failed deals.

Macro signals influencing the RTO market

Over the past six months, confidence in the RTO sector has increased, but it has become somewhat conditional. Buyers are still very active, we are still maintaining an average of 72 new enquiries a week, and transactions are on the increase, but the tolerance for uncertainty has materially reduced. Decisions are taking longer, due diligence is more pronounced and offers are increasingly structured rather than simple headline price to assist in risk mitigation.

Average days on market got out to 72 in September but we saw this reduce to 62 days in the last quarter of the year.

From a buy-side we are certainly witnessing a recalibration of risk. Buyers are no longer prepared to rely on assurances, legacy reputation or historic performance alone. They want to understand how the business performs today, how it stands up to scrutiny and how it would respond to regulatory and market pressure tomorrow, meaning is it a one-trick RTO or multi-dimensional.

One definite upside is buyers are not making speculative offers. There are less tyre kickers and more serious, better-prepared buyers that progress through to completion.

Over the past six months, we have seen a widening gap between operators who are genuinely investment-grade and those who are simply still operating. Profitability alone is no longer a proxy for quality and historical performance is no longer a reliable indicator of future value. The market has become far less forgiving and far more discriminating.

Buyers are not leaving the sector. They are just refusing to overpay for risk they can now clearly see.

Labour market dynamics continue to play a central role in shaping demand. Training linked to regulated outcomes, workforce shortages or licence to operate requirements remains resilient.

From a capital perspective, Traditional lenders remain cautious around education businesses where value is predominantly goodwill. As a result, private capital, vendor finance, earnouts and deferred consideration have become tools used in small to mid-market transactions. Vendors who understand this dynamic are structuring deals that complete. Those who are anchored to pre-2026 expectations are often not.

The overarching theme is flexibility. The market has moved away from momentum-driven decision-making and towards evidence-driven investment. This is a healthier market, but it is one that rewards preparation and rightfully so punishes complacency.

Regulatory reality and its direct impact on value

The introduction of the 2025 RTO standards marked a line in the sand. Six months on, it is clear these standards are no longer being treated as a future compliance exercise or an abstract regulatory framework.

In practical terms, buyers are no longer asking whether a provider is compliant in principle. They are asking whether compliance is future-proofed.

The role of the ASQA continues to empower good operators and punish those who cut corners and are not outcome-focused. They are no longer the Ogre in the swamp but their power remains enforceable.

Importantly, the treatment of compliance is not about perfection. Buyers understand no RTO is flawless. What they are assessing is the provider’s ability to explain, evidence and manage compliance risk in a structured and transparent way. Where that capability exists, confidence follows. Where it does not, risk is priced aggressively.

Ongoing integrity enforcement continues to remove poor-quality operators from the market. While this created short-term disruption, it has a longer-term positive effect for compliant providers and the sector.

As weaker operators exit, stronger businesses benefit from reduced competition, improved sector reputation and increased buyer confidence. This dynamic is reinforcing the value of good governance and disciplined compliance and is increasing the value of RTO in the marketplace.

CRICOS: No longer a bonus. It is a liability until proven otherwise

CRICOS registration is no longer automatically seen as upside. In many transactions, it is the first area buyers try to neutralise or carve out.

Dormant CRICOS registrations, underutilised approvals and agent-dependent pipelines are being heavily discounted or ignored altogether. Without active delivery and defensible agent management, CRICOS is now viewed as a regulatory exposure rather than a growth lever.

In some cases, buyers would rather acquire a clean domestic provider and rebuild international delivery themselves than inherit legacy structures they did not design.

Regulatory discretion has also become a real pricing consideration. Expanded powers to suspend providers or cancel courses have sharpened buyer sensitivity to reputational and enforcement risk. As a result, conservative assumptions are being applied to international student forecasts, even where historical performance has been strong.

It is important to note this does not signal a weakening of the CRICOS sector. Quite the opposite. Providers with genuine delivery capability, clean agent relationships and transparent governance are attracting strong interest. What has changed is CRICOS value is no longer assumed. It must be demonstrated.

Funding is no longer “secure revenue”

For years, government-funded training has been treated as the safe end of the market. Predictable commencements, reliable cash flow and government backing created a belief funding reduced risk by default. That belief is now outdated.

Funding has not disappeared, but it has become conditional. Look at Victoria, where reputable providers who had 700 places now have no contract. The market is no longer rewarding historical volume alone. It is rewarding currency, skill shortage areas, completions and outcomes. Providers who fail to recognise this are often surprised when strong enrolment numbers do not translate into strong valuations.

In valuation terms, this means headline potential funded revenue is discounted unless it is supported by demonstrable completion performance.

As funding risk becomes more visible, buyers are responding in a predictable way. They are no longer trying to price all risk upfront. Instead, they are structuring transactions to avoid carrying risk they cannot control but rewarding the vendor if the funding remains. Rather than applying a blunt discount and walking away, many buyers now prefer to isolate the risk of short-term funding loss through transaction mechanics.

This is why deferred consideration, earnouts and retention amounts are increasingly common in funded RTO transactions. Buyers use these tools to ensure value is only paid for funding that proves to be renewable, compliant and resilient over time. If contracts are renewed, performance is maintained and audits remain clean, the seller participates in the upside. If not, the buyer’s downside is capped.

In several recent transactions, this has resulted in scenarios where headline revenue looked strong, but upfront consideration was deliberately conservative. The balance of value was tied to post-completion performance rather than historical income. In effect, buyers are paying for continuity, not legacy.

The practical takeaway is simple. Funding does not scare buyers away. Where funding is well governed, well documented and diversified, buyers will compete. Where it is opaque or concentrated, they will still engage, but the deal will be structured to protect them. Buyers are increasingly wary of providers that rely on funding while underinvesting in back-office capability, governance and quality assurance. In those cases, funding amplifies risk rather than mitigating it.

Buyer behaviour and deal mechanics

Buyer behaviour over the past six months has become more deliberate and more professional. We are seeing fewer impulse offers and more structured engagement. Many buyers are now conducting preliminary reviews before committing to formal due diligence, particularly for higher-risk delivery models.

This shift has fundamentally changed how deals are structured. Again, Buyers are no longer relying on price alone to manage uncertainty. Transactions are happening and volume is on the rise, but on larger deals, the risk balance is not now 100% on the buyer. It is assumed that if a higher value is required, then the risk balance shifts to a shared model. Vendors who do not want to share some of the risk cannot demand the highest available price – close but not optimum.

Buyers who think the value should be shared on lower-value deals are often disappointed and miss out. The key? It really is working with the broker and not against them to achieve a deal that is fair for both parties.

Timeframes in deals, unfortunately, have stretched as a result. The exception is in high-quality RTO at bargain prices, where the vendor has traded the price for a shorter time.

In general, offers are still being made quickly, but completion is slightly slower and more controlled. This is not friction for the sake of friction; the process has just evolved. It is the market signalling that casual transactions are over. Businesses that can withstand this level of scrutiny proceed. Those who cannot tend to stall.

Valuations and pricing reality

The most common cause of failed transactions in the last six months has not been pricing pressure from buyers. It has been sellers anchored to a version of the market that no longer exists.

Multiples have not disappeared, or in fact changed, but they are being earned rather than assumed. Businesses with strong systems, low key-person risk and audit-ready compliance continue to transact at attractive levels. Businesses relying on founder knowledge, informal processes or “we have always done it this way” narratives are finding historic earnings no longer translate cleanly into value.

Valuations in the RTO sector are now clearly differentiated by business model. Online providers, enterprise-focused operators, funded delivery specialists, CRICOS providers and niche trainers are no longer assessed using broad-brush multiples.

Technology and operational proof

Technology is no longer viewed as a nice-to-have. It has become part of the value base. Buyers are paying close attention to learning management systems, student management systems and the integrity of data flows between them.

Cybersecurity and data governance are also emerging as due diligence considerations, particularly for larger buyers and investors. While still evolving, this is an area that forward-looking providers are beginning to address proactively.

CONCLUSION

Despite the noise, this is not a sector in decline. Demand for skills remains strong and the need for quality providers has not diminished.

The market, is doing what regulators alone could not. It is reallocating value towards businesses that are well governed, well documented and operationally mature.

The message from the market is no longer subtle. Value in the RTO and CRICOS sector is no longer driven by size, history or owner reputation, but by how well risk is understood, governed and evidenced. Buyers are not chasing growth at any cost and sellers can no longer rely on legacy to carry a deal across the line. The businesses that will transact well in the next phase of the market are those that accept scrutiny as part of value, treat compliance and funding as commercial disciplines and prepare as if the business will be challenged at every step — because it will be. This is not a period of retreat. It is a period of separation between operators who are genuinely investable and those who are simply still operating.

This report is not designed to reassure or to even scare, it is designed to inform.

For buyers, it clarifies where risk now sits and why shortcuts are no longer viable.

For sellers, it explains why preparation is not optional and why waiting does not automatically improve outcomes.

For advisers, it highlights where the market has moved beyond theory and into execution.

The opportunity in the registered training organisation and CRICOS market remains real and strong and my confidence in the market is incredibly buoyant.

Remember, every RTO owner, regardless of when they want to sell, should understand the value of their RTO, what levers can be pulled to increase value and decrease risk. Every RTO should have an exit plan.

Infinity RTO Valuations is a service that provides you with current market value, actionable strategies to increase revenue, increase efficiency and decrease risk. Feel free to contact our team to learn more.

Inside the RTO transaction landscape. From valuation to settlement:
What experienced vendors and their advisors must know about value, risk and buyer expectations.

Understanding the RTO market, valuation and transaction landscape

Australia’s Registered Training Organisation (RTO) sector is one of the most regulated and commercially unique corners of the education market.

For vendors and their advisors, understanding how value is measured, how risk is priced and how transactions unfold is critical to achieving a strong exit outcome.

While many of the mechanics mirror those of broader M&A activity, the nuances of funding, registration and regulatory conditions make this a specialist market — and one where preparation and expert guidance pay off significantly.

The current market landscape

The RTO market remains robust, with demand driven by a steady appetite for accredited training, industry-specific skills shortages and private equity’s growing interest in scalable education assets. Businesses generating more than $500,000 in EBITDA are increasingly attracting private investors, consortiums and strategic acquirers.

Multiples in the sector typically range between 2.5x and 4x EBITDA, but unlike many industries where higher earnings attract higher multiples, the reverse can apply here.

Larger profit bases often trigger lower multiples because of risk concentration — namely, reliance on government funding (which acts as a single major client) and registration risk (where regulatory approval is the cornerstone of revenue). Changes in either can materially affect enterprise value.

Key risk drivers and their impact on valuation

Buyers in the RTO sector don’t just purchase revenue, they buy risk. Concentrations in government-funded income, overdependence on specific courses or uncertainty around registration renewals can all weigh on price. The two most significant risk factors in any deal are:

1. Funding dependency: Heavy reliance on state or federal funding programs can expose the business to policy shifts or funding reallocations. A balanced revenue mix, including fee-for-service and corporate training, typically commands a premium.
2. Regulatory stability: Registration with ASQA (or TEQSA for higher education) is the foundation of an RTO’s licence to operate. Any compliance breaches or re-registration uncertainties will directly influence buyer confidence and valuation.

Preparing the business for sale

The journey to market begins with data. Vendors should collate at least three years of financial statements (including normalised accounts), enrolment data and detailed breakdowns of revenue streams. Normalisation is particularly important, adjustments such as owner’s salary, personal expenses and non-recurring costs help present the business’s true earnings capacity.

While historical profit is a critical valuation anchor, it’s not the only one. Future indicators such as enrolments, course pipeline and new contracts are increasingly used by buyers as forward-looking value metrics. These indicators are especially relevant when negotiating completion accounts, accrued income and work-in-progress (WIP) entitlements.

The transaction process

1. Valuation and positioning: Once the data is gathered, an initial valuation is prepared based on EBITDA multiples and market conditions. Specialist brokers use both historical performance and leading indicators to model value and set pricing expectations.
2. Market engagement: On average, through Infinity, RTOs have an average time on market of around 63 days before sale. The process is driven by targeted outreach to pre-qualified buyers including private investors, corporates and strategic acquirers – often drawn from extensive buyer databases.
3. Due diligence and structuring: RTO transactions are share sales, as the key assets — registration and funding contracts — are held by the entity itself. Buyers conduct rigorous due diligence on compliance, contracts, student records, legal structure, PPSR and governance structures.
4. Negotiation and earn-outs: While most deals settle on a clean handover, some may include earn-out clauses — typically capped at an absolute 20% maximum of the purchase price and limited to 12 months. Earn-outs are generally linked to enrolment growth or contract renewals, but the strongest deals minimise them altogether.
5. Regulatory approvals: Every state funding body — from Training Services NSW to Skills First Victoria and User Choice in Queensland must approve the new owner before funding contracts can transfer. This is usually a straightforward process (completed in 30 – 90 days) but must be carefully managed to avoid delays.
6. Completion and handover: Following regulatory sign-off, the final steps include ASIC updates, ASQA notifications and any transitional support agreements. At this stage, attention shifts to ensuring operational continuity, staff retention and student communication.

Why specialist knowledge matters

RTO transactions are complex. Not because they are inherently difficult, but because they require precision. A generalist broker or advisor may only handle one or two such deals a year, while Infinity successfully complete 35-50 per year for the last 89 years thus building institutional knowledge of valuation nuances, funding body procedures and regulatory timeframes.

This depth of experience can mean the difference between a smooth, premium exit and a protracted, value-diluting process. For example, understanding when to push for condition precedents (such as lease transfers) or how to structure WIP entitlements can materially change both deal speed and net proceeds.

Conclusion: Positioning for success

For vendors and advisors operating in the RTO space, knowledge is not just power — it’s profit. The best outcomes occur when preparation is meticulous, valuation is evidence-based and the transaction process is managed by specialists who understand the sector’s intricacies. With deal timelines averaging just over two months and multiples reflecting nuanced risk profiles, there’s significant opportunity for those who approach the market strategically.

For those considering an exit — whether now or in the future — the smartest step is to engage a specialist early. Expert advice will not only maximise valuation but also protect against common pitfalls, ensuring that years of hard work translate into a successful and rewarding sale.

About Infinity Business Brokers
Infinity Business Brokers is Australia’s leading specialist in RTO sales, valuations and advisory services. With over 160 successful RTO transactions and decades of industry expertise, Infinity helps vendors, investors and advisors navigate the complexities of the training sector with confidence. From valuation to settlement, Infinity delivers unmatched knowledge, integrity and results.

The $939,000 RTO mistake you can’t afford to ignore.

In this article by Travis Latter of Infinity Business Brokers, we break down what the Right to Disconnect law (effective August 2025) means for RTO owners, and how after-hours messages could cost your business big.

Now’s the time to update contracts, set clear boundaries, and protect your bottom line.

Bsale Australia

A new law that will ring a bell for RTOs

Once upon a time, the only thing that rang after hours was the landline, usually your mum checking if you’d eaten. Fast-forward to 2025 and the average RTO owner’s phone buzzes at 6am with a compliance query, pings at 10pm with a CRICOS student panicking over an assignment and vibrates again at midnight when your trainer uploads assessments to the LMS.

Welcome to the modern workplace, where the lines between work and life have blurred more than the ASQA audit matrix.

Enter Australia’s new “right to disconnect” law. From August 2025 (for both large employers and small businesses), employees now have the legal right to refuse “unreasonable” work contact outside their normal hours and employers can face serious penalties if they don’t respect those boundaries.

For RTOs, this matters more than most industries. Trainers, compliance staff and managers are notorious for late-night work and student contact across time zones. What once seemed like “commitment” could now look like “contravention.”

As Infinity Business Brokers, we’re here to break it down: what the law says, how it applies to RTOs, the positives and negatives and — importantly — how compliance in this area doesn’t just keep Fair Work off your back, it can add (or subtract) value when it comes time to sell your RTO.

What the law actually says

The “right to disconnect” is part of amendments to the Fair Work Act 2009, effective in stages:

The law applies from 26 August 2025 and states that employees can legally refuse unreasonable contact outside working hours.

Key points:

• Employees have the right to ignore or refuse unreasonable work calls, emails, texts or messages outside their ordinary working hours.
• It does not mean staff can never be contacted; the test is whether the contact is reasonable given the circumstances.
• If a dispute arises, the Fair Work Commission can make binding orders.

Penalties for non-compliance:

• Breach of Fair Work Act = civil penalty of up to $18,780 for individuals and $93,900 for companies.
• “Serious contraventions” (deliberate or systemic breaches) can be fined up to $187,800 (individual) and $939,000 (company).
• Large employers also risk unfair dismissal or adverse action claims tied to right-to-disconnect breaches.

Importantly, contractors are not covered by this law and it applies to employees only.

How it applies in an RTO setting

On paper, the law sounds straightforward. In practice, RTOs live in the grey zones. Here’s what it looks like in real life:

Case study 1: Trainer Jo (CRICOS RTO)
Jo trains CRICOS students. Many of her learners can only contact her after hours. Students often WhatsApp her at 11pm Sydney time. Under the new law, Jo can refuse to respond until work hours, unless responding late is “reasonable.”

Reasonable? If the student has an urgent welfare issue (e.g. safety concern), yes.
Unreasonable? If it’s just a question about assessment formatting, absolutely.

Case study 2: Compliance Officer Chris
Chris gets an email from management at 10pm asking for last-minute evidence for an ASQA audit scheduled next week but the CEO is going away for a few days in between. Chris has every right to ignore the email until the next morning unless the RTO is facing an immediate compliance deadline that would genuinely collapse without his action.

Reasonable? Possibly, if the deadline is the next day and no other option exists.
Unreasonable? If the audit is two weeks away and management simply left prep too late.

Case study 3: The RTO CEO
The CEO texts trainers on Saturday morning about low enrolment numbers. Trainers can now decline to engage until Monday. The CEO could be breaching the law if repeated contact like this is deemed unreasonable.

The positives for RTOs

While some employers groan about “red tape,” there are silver linings for RTOs:

• Healthier, happier staff – Trainers already burn out from marking and student support. Reduced after-hours demands mean better work-life balance, which lowers turnover. In an industry plagued by trainer shortages, that’s a big win.
• Clearer boundaries improve culture: Policies that respect downtime send a strong message: “We value you as people, not just trainers.” That makes your RTO more attractive to both staff and future buyers.
• Professionalisation of management: It forces owners and managers to sharpen operations: better planning, clearer delegation and improved LMS use.
• Compliance as a value driver: Buyers pay more for RTOs that show governance maturity. A clean record with Fair Work is another tick in due diligence.

The negatives and challenges for RTOs

But it’s not all positive. Challenges loom:

• Loss of flexibility: Many trainers actually prefer to mark assessments or answer emails at odd hours that suit their lifestyle. RTOs will need to adapt policies so voluntary late work doesn’t morph into an expectation.
• Australia’s time zones: National RTO students don’t always respect “AEST business hours.” Without good systems, student experience scores could dip.
• Added HR overhead: Policies, contracts and induction training need updates. It’s another compliance box to tick — and for smaller RTOs, every box takes time.
• Potential disputes: “Reasonable” is vague. One trainer’s emergency is another’s inconvenience. Managers will need judgement and disputes may end up in the Commission.

Contractors

• Not covered by the law. However, if you use contractors heavily and treat them like employees, you may invite sham contracting risk — a separate Fair Work headache.

What’s excluded

• Emergencies: WHS issues, serious safety matters, urgent IT failures.
• Genuine flexibility: If an employee chooses to work odd hours (with no expectation), it’s fine.
• Casual chats: Social contact isn’t covered. If you bump into your trainer at Bunnings, you can say hello without breaching the Act.

Penalties and risks

This is where it gets serious. A failure to respect the right to disconnect could trigger:

• Civil penalties: Up to $18,780 (individual) / $93,900 (company) or up to $187,800 / $939,000 for serious contraventions.
• Unfair dismissal claims: In larger RTOs, staff disciplined or dismissed over refusing unreasonable contact could bring claims.
• Reputation risk: Word spreads fast. An RTO known for after-hours intrusion may struggle with trainer recruitment and retention.
• Valuation impact: Buyers scrutinise HR and compliance. A history of disputes or penalties could lower multiples and scare away premium acquirers.

Infinity’s view: compliance as value

At Infinity, we don’t just look at compliance as “avoiding trouble.” We see it as part of an RTO’s business value story.

When buyers ask about culture and governance, they want proof that your RTO manages risk. A right-to-disconnect breach isn’t just an HR issue, it signals weak systems, poor planning and potential liabilities. That can mean a lower multiple in valuation.

On the flip side, RTOs that embrace this law by updating policies, training managers and showing leadership, will not only keep staff happier but also send buyers a strong signal: this is a professionally run organisation with future-ready governance.

Checklist & flowchart for RTO owners

• Update employment contracts to reflect the right to disconnect.
• Revise staff handbooks and HR policies.
• Train managers on “reasonable vs unreasonable” contact.
• Communicate expectations to staff and students (especially CRICOS).
• Review contractor arrangements for cultural alignment.
• Document processes to show compliance (audit-ready).

Flowchart:

The right to disconnect doesn’t mean the end of dedication, flexibility or RTO agility. It means the end of unreasonable intrusion into staff lives.

Handled well, this law will give your trainers and staff healthier boundaries, boost retention and demonstrate governance maturity. Handled poorly, it could cost you fines, disputes and when it comes time to sell, a hit to your valuation.
Infinity have seen again and again that compliance isn’t just red tape. It’s a value multiplier. Buyers want confidence that when they step into ownership, they’re not inheriting a culture of burnout and Fair Work risk.

The right to disconnect is another curveball for employers, especially RTOs already balancing ASQA compliance, CRICOS obligations, reporting and the daily reality of keeping students and staff engaged. On top of everything else, here’s one more rule that looks simple on paper but messy in practice.

The truth is, the right to disconnect law is untested. No one knows exactly how the Commission will rule in the grey zones. Add to that the messy overlap with working-from-home arrangements, where “ordinary hours” can already be blurred  and now a law to create friction before it creates clarity.

At Infinity, we see compliance laws like this for what they are: hard work upfront, but an opportunity to separate the professionals from the rest. Smart RTO owners won’t be scared off. They’ll treat this as another discipline of good governance, one that builds resilience, attracts talent and protects long-term value.

Yes, it will create more work. Yes, it clashes awkwardly with flexible and work-from-home arrangements. And yes, it’s untested which means disputes will be inevitable before the boundaries are truly clear.

But this is not a reason to panic. It’s a reason to get organised. The RTOs that take the lead by updating contracts, training managers and showing respect for staff downtime will not just avoid fines, they’ll build a healthier culture and a stronger commercial story for buyers.

By Travis Latter – Infinity Business Brokers – THE RTO SPECIALISTS

The announcement of 295,000 international student places for 2026 is a win, but let’s be clear: it’s only a start. For those of us in the sector, the relief is real. Certainty, predictability and the prospect of stronger intakes. But RTO owners, trainers and staff at the coal face know the truth: demand, compliance burden and skills shortages are rising faster than government policy is moving. Infinity welcomes the news, but as the market leader, we are saying loudly – it’s not enough.

Why this step was foreseeable

The Albanese government’s previous National Planning Level (NPL) capped new overseas student commencements at 270,000 in 2025, aligning with pre‑pandemic volumes and reflecting a managed approach to growth. The incremental rise to 295,000 in 2026 was anticipated among insiders aware of the strategic draft of the International Education and Skills Strategic Framework – promising sustainable, quality‑focused growth in international education.

Big Picture: International Education’s Pedigree in Australia’s Economy
International education is one of Australia’s top services exports. In pre‑pandemic years, it generated roughly $37–$47 billion annually, supporting 250,000 jobs and contributing around 0.8–1% of GDP. According to the Reserve Bank of Australia, international students spend on par with Australian residents on living expenses, so excluding fees, their spending remains substantial domestically.

Supporting skills shortages and improving trade balance

Australia faces acute shortfalls in critical occupations. Nurses, IT specialists, early childhood educators and more are in short supply and the problem is growing dire. The pipeline of international students is vital for addressing these gaps: many enrol in fields aligned with national labour market needs and a considerable portion transition into the workforce post‑graduation.

VET pathways consistently improve employability across the board, even outside technical fields. RTOs are not just training providers—we are the backbone of workforce alignment. That reality needs more than polite recognition; it needs bold support and faster policy reform.

What it really means for RTO owners and buyers

• Predictable and managed growth: The 2026 increase provides much‑needed stability, paving the way for confident business planning.
• Dedicated VET focus: Of the 295,000 cap, approximately 95,000 new international VET commencements are anticipated in 2025 and likely into 2026 as well. That means RTO‑accessible cohort growth.
• Quality and integrity emphasized: Government reforms prioritise education quality and operational transparency—aligning tightly with RTO standards rooted in fair pricing, integrity and transparency.
• Upside for M&A and expansion: Buyers eyeing scalable VET providers can seize this moment of rising demand. International student intakes offer strong revenue streams and a pathway to build reputation.

A strategic moment to celebrate and leverage

This rise in caps is good news not just politically, but economically and strategically. It restores confidence in the sector, rewards providers who invest in accommodation and regional engagement and signals long‑term commitment to building Australia’s skilled base.

For RTO leaders: this is the moment to be proactive—pitch aligned course offerings, expand industry-certified micro‑credentials and strengthen quality supports for international cohorts.

Travis Latter of Infinity Business Brokers shares insights in an exclusive interview on how AIBB is raising the bar in business brokering through professional education and training. From certification to specialised forums, discover how the industry is evolving to meet global standards.

Travis Latter in BSale

BSale Australia

Executive Summary

The Australian RTO sector is at a crossroads. Increased compliance, digital transformation
and shifting learner expectations are forcing operators to evolve rapidly. However, this is not
the main determination in a slightly declining market.

The single greatest reason we have a declining market and the most worrisome factor
affecting RTOs is a distinct lack of trust in Government and their handling of VET training in
Australia.

Notwithstanding ASQA’s continued push for transparency, RTO owners do not trust the
Federal and State Government’s efforts (or lack thereof) in private education. The continued
focus on TAFE as the main provider is detrimental to our industry and does not reflect the
needs of those who rely on the services of Private RTOs.

With close to 90% of training delivered by non-TAFE providers, the imbalance in support and
funding is catastrophic for the industry.

I am all for less reputable and dormant RTOs being closed and equally I am vehemently
against good RTOs having to close their doors due to no fault of their own. In saying that, a
quote from Moneyball (2011) is never more true:

“Adapt or die. Times change, there is no denying that, and if we don’t change and
innovate with them, we will fall by the wayside into a sea of mediocrity and
insignificance.”

This report will look at the effect of Government involvement and the balance of variables in
the education industry in Australia at present.

This report captures more than just statistics. It reflects the mindset of an industry in
transition. Owners are weighing their next move, buyers are getting more selective and
regulators are tightening expectations.

It also includes results from our 200 strong survey.

Key findings:

• Market size: Over 5 million students are engaged in skills training, with
  independent RTOs supporting 88.5% of these learners. The sector contributes
  ~$8.2B to GDP.
• Regulatory changes: The revised Standards for RTOs, effective from 1 July
  2025, aim to enhance quality outcomes and provide greater clarity for RTOs and
  regulators but most RTOs are not ready for implementation and reporting.
• Technological adoption: Digital transformation is underway, with a focus on
  integrating AI and online delivery methods.
• Valuations: 91% of vendors do not know the value of their RTO accurately nor
  (besides profits) what the 5 most important levers for growth are.
• Exit plan: 85% of RTOs do not have a clearly defined exit plan or succession
  plan.
• Market sentiment: Buyers and sellers are navigating a landscape marked by
  increased compliance requirements and shifting funding models and general
  uncertainty.
• Economic contribution: The VET sector contributes significantly to Australia’s
  economy by addressing skill shortages and enhancing workforce productivity.
• Buyers: Cautiously optimistic, focusing on RTOs with strong compliance records
  and diversified course offerings
• Buyers: Buyers have more choice as they look at RTOs presently and are taking
  longer to make a concrete decision as they navigate through risks like compliance
  and opportunity.
• Sellers: Facing challenges due to increased regulatory scrutiny and funding
  uncertainties, leading to strategic exits or consolidations.
• Online delivery: The shift towards online learning has accelerated, with RTOs
  adopting digital platforms to reach a broader audience. Digital-first delivery is no
  longer optional.
• AI integration: Artificial Intelligence is being explored to personalise learning
  experiences, streamline administrative tasks and aid in compliance. AI integration
  is becoming standard in compliance systems.
  • If you are not using AI in these areas, you are falling behind.
  • RTOs using AI audit tracking, PD logs and automated AVETMISS
    reporting are 3x more likely to pass ASQA audits cleanly.
• Vendors: Many Vendors feel battered and bruised by the Governments lack of
  assistance and are prepared to negotiate on timings – not just price.
• Micro-Credentials: There’s a growing demand for short, targeted courses that
  provide specific skills, aligning with industry needs. Non-accredited training is
  growing.
• Apprenticeships and Traineeships: These continue to be vital pathways, with
  increased government support to address skill shortages.
• Profits squeezed: RTOs are experiencing squeezed profit margins due to
  increased compliance costs and competition.
  • Online RTOs are still seeing net profit margins of 45% – 50%
  • Domestic RTOs should still be looking at 20%+ Net profit
  • CRICOS RTOs are struggling to achieve 10% Net Profit mainly due to
    slow student growth and increased agent fees.
  • Online-only models are yielding 28% higher EBITDA. CRICOS growth
    remains strong.
  • Providers serving regional areas or First Nations funding channels are
    achieving superior multiples.
• Funding uncertainties: Changes in government funding models and policies
  have created uncertainties, impacting financial planning and sustainability.
• Emerging course areas: Courses in cybersecurity, data analytics and AI are in
  high demand.
• Healthcare and aged care: With an ageing population, courses in this area
  continue to outperform more generic qualifications. There is a growing need for
  qualified professionals in these sectors.
• Underserved learner segments: Targeting regional and remote communities
  presents opportunities to expand reach and address skill gaps.
• CRICOS: The International Student market has endured negative impacts and has
  seen diminished returns triggering unprecedented losses and a sharp decline in
  student confidence in the Australian market. This is causing students (and agents)
  to move to countries like Canada and the UK.
• Market structure: Large RTOs: Comprise a smaller percentage but hold
  significant market share due to extensive course offerings and resources.
• Small to Medium RTOs: Make up the majority, often specialising in niche areas
  or specific industries.
• Aggregators and uni-pathway groups are actively acquiring as the Higher Ed
  enrolments continue to decline.
• Mergers and acquisitions: The sector has seen increased consolidation, with
  larger RTOs acquiring smaller ones to expand their scope and capabilities.
• Importance of data-driven decision making: Utilising data analytics is helping
  RTOs identify areas for improvement, ensure compliance and enhance student
  outcomes.
• Avoiding low-ball: Compliance cost creep, audit fatigue, trainer shortages and
  LMS obsolescence are major inhibitors to a sale. Vendors should resolve these
  areas before listing to avoid delays and lowball offers.
• Median time to sale: (Infinity deals): 86 days. This has changed from 68 days at
  the same time last year with the most desirable sectors being Health, WHS,
  Community Services, IT and trades.
• Student preferences: 82% of learners prefer blended or online delivery
• Trainer shortages: 67% of RTOs are experiencing Trainer shortages in aged
  care, WHS and education support with 43% of RTOs expecting this shortage to
  deepen and worsen.
• Valuation benchmarks: Generalist RTOs: 2.8–3.6x EBITDA, CRICOS: 2.5–3.0x
  EBITDA, Online-only RTOs show 28% stronger EBITDA margins.

Panel sidebar

Real case: In 2025, Infinity sold an online-only CRICOS RTO with full
audit file structure in 49 days. Sale multiple: 4.1x EBITDA. Why? LMS
strength, CRICOS delivery compliance and audit-ready trainer logs.

• 81% of surveyed vendors say they would sell within 14 months if the offer reflected
  a fair market price.

Recommendations and Future Outlook

• ASQA: Sector consolidation will remove 500–700 providers over 3 years.
• ASQA: Registration of initial RTOs will continue to be slowed down and based on
  filling skill priority areas.
• Value: As barriers to entry increase, residual value in a RTOs will continue to hold.
• CRICOS: The Australian CRICOS market will bounce back but not at the levels
  seen previously.
• Outcomes: Outcome-based funding and employment-linked delivery will
  dominate. The qualification name is less important than the outcomes it produces.
• Invest in technology: Adopt digital tools to enhance learning and operational
  efficiency.
• Diversify offerings: Expand course offerings to meet emerging industry needs
  and attract a broader student base.
• Selling now: RTO owners considering a sale in the next 12–24 months should:
  • Order a valuation NOW!
  • Look at ways to enhance the offering
  • Minimise risk
  • Prepare internal audit files
  • Validate trainer records and volume-of-learning logs
  • Document funding eligibility and clean scope delivery
  • PLAN. PLAN. PLAN

Full survey results

Infinity conducted a survey involving 200 RTO stakeholders. They were asked a variety of
questions and the results are below. We are interested in your take on these results.

This results data offers a window into sentiment, preparedness and strategic direction in a
highly regulated, fast-evolving market.

• 65% of RTOs have implemented online learning platforms.
• Only 40% feel fully prepared for the new Standards.
• 70% of RTOs report increased interest in technology-related courses.
• 81% of sellers say they would exit within 24 months if offered the right price.
• 67% of sellers regret not preparing earlier

Trust in Government

Low trust in Government is the major factor in RTO disharmony at present.
Less than one-third of participants expressed high confidence in government direction,
transparency and sector alignment. Vendors and buyers continue to report concerns about
unclear funding frameworks, reactive policy and insufficient consultation with private RTOs.

Q1. How confident are you in the Federal Government’s ability to set effective policy
for the VET sector?

Q2. Do you believe the recent reforms (e.g. Strengthening Quality & Integrity in VET
Bill) will improve sector quality long-term?

Q3. How would you rate the transparency of current ASQA compliance enforcement?

Q4. Do you feel adequately informed about changes in government-funded training
programs (e.g. Smart & Skilled, Skills First)?

Q5. Do you believe state and federal policies are aligned enough to ensure stable
sector planning?

Q6. Do you believe the government consults adequately with private RTOs when
developing new VET policy?

Q7. Have you adopted online delivery?

Results:

• 35% reported delivering training fully online.
• 30% use a hybrid model (approximately 50/50 split).
• 20% have only minimally adopted online delivery (under 25% of courses).
• 15% have not adopted online delivery at all.

These figures confirm a strong digital trend, with over 85% of RTOs incorporating some level
of online delivery. Buyers are increasingly drawn to scalable models with strong LMS
integration, while vendors with limited digital capability may face valuation pressure.

Q8. Do you feel fully prepared for the new Standards (2025)?

• 25% consider themselves fully prepared.
• 40% feel somewhat prepared and are actively working toward compliance.
• 35% do not feel prepared, highlighting a serious transition gap.

These results highlight a clear need for increased transition support, training and internal
systems review across the RTO sector.

Q9. Are you seeing increased demand for tech-focused courses?

Demand for tech-related training (e.g., cyber, AI, data analytics) has grown from 50% in 2023
to 70% in 2025. Buyers are actively targeting RTOs with up-to-date tech content.

Q10. Are you confident in funding continuity?

Only 35% feel confident about consistent funding, a critical factor for long-term planning and
stability.

Q11. Have you explored AI integration?

• 10% are actively using AI tools (e.g., automated assessments, chatbots, data-driven
  learner insights).
• 15% have explored AI possibilities but are yet to implement.
• 75% have not explored AI at all.

This highlights a significant lag in AI readiness within the RTO sector. From a market
standpoint, early adopters are well-positioned to differentiate on efficiency and learner
experience.

Q13. Do you plan to expand course offerings in 2025?

• 40% plan to launch new qualifications in response to emerging markets (e.g. aged
  care, cyber security, business transformation).
• 25% are refreshing courses to maintain compliance and appeal.
• 35% have no expansion plans, citing resource limitations or strategic rationale.

This result suggests a majority of RTOs are in a growth or adaptation phase. Buyers will be
drawn to those with fresh, in-demand content ready to scale.

Sellers not expanding should position their existing programs as refined and profitable to
defend valuation.

Q14. Are you actively pursuing government funding opportunities?

• 30% are actively targeting multiple streams and optimising their eligibility.
• 20% apply occasionally, often when directly notified or partnered.
• 25% rely only on existing, legacy-funded contracts.
• 25% are not pursuing any government funding at all.

Sellers may want to prepare funding strategy documentation to reduce buyer concerns.

Q15. Have you experienced increased compliance workload in the past 12 months?

A steep 80% increase reported by RTOs mirrors the transition to 2025 standards and policy
reform.

Q16. Do you plan to merge, acquire or exit within the next 2 years?

• 25% are preparing for a full or partial exit via sale.
• 20% are proactively seeking acquisition targets for growth.
• 15% are exploring merger or joint venture arrangements.
• 40% currently have no active plans but remain open to future opportunities

Lastly, we looked at readiness of vendors and the results were not an uncommon revelation.
It does surprise me that RTO vendors do not understand the value of their company nor the
levers to change this.

Q17. Do you know how the value of your RTO is calculated?

Q18. Do you believe your RTO is currently sale-ready?

Q19. What contributes most to RTO value?

The truth of the matter is the profit margin is by far the most relevant and the highest
determinant of value for a buyer.

Q20. Have you benchmarked your RTO against similar providers?

Q21. Would you accept a lower valuation for a clean exit?

There are two tradables, time and money and neither the buyer or seller can own both.
Knowing what is important to you will assist in your decision making.

CONCLUSION:

The Australian RTO sector in 2025 is walking a fine line between pressure and possibility.
Compliance demands are up, government trust is down and many owners are feeling the
squeeze. Despite the negative noise – shifting policies, tighter audits and the usual funding
frustrations, the RTO sector remains one of Australia’s most resilient and future-focused
industries.

But look deeper and the opportunities are just as clear. Online models are outperforming,
regional and funded streams are attracting premiums and buyers remain actively engaged in
the right sectors. In fact, our buyer enquiry rate has not dropped in the last 6 months
however, buyers are more knowledgeable.

If there’s a message underneath it all, it’s this: the RTO space is maturing. Strategy now
matters more than size. Systems beat sentiment. And those who plan, who genuinely
understand their value, their risk and their position will be the ones shaping the future of
vocational education in this country.

If you take one thing from this report, let it be this: you don’t need to guess. Whether you’re
expanding, streamlining or quietly wondering what your RTO might be worth, this market
rewards those who plan early and plan well.

A valuation isn’t about selling, it’s about knowing. Knowing what levers increase value.
Knowing what buyers look for and knowing how to position your business to thrive – sale or
no sale.

Start with a 15-minute valuation snapshot. It’s free, no pressure and tailored to your RTO’s
size, model and compliance posture. And it might just shift your strategy for the better.

Take the insights. Share the report. Start the conversation. We’re here if you want to know
where you stand.

Book a Valuation

Book your complimentary 15-minute consultation with Infinity Business Brokers.

Not much to lose but a lot to gain.