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.