Experience Co (ASX:EXP): What could change the travel story from here?

Experience Co (ASX:EXP) is Australia’s largest commercial parasailing operator and a growing adventure tourism group operating tandem skydives, reef and rainforest tours and other activities targeting primarily domestic and international tourists. A pure play on discretionary adventure spending, its fortunes rise and fall with the travel cycle, weather and consumer confidence, and its FY26 result showed the business is still working to translate the tourism recovery into higher earnings.

Mixed FY26

For the year to June 2026, as reported on 27 August 2026, Experience Co increased revenue from continuing operations by about 2% to A$129.6 million, but underlying EBITDA fell 8% to A$17.6 million and underlying net profit fell 30% to A$2.0 million. The company posted a small statutory loss after tax of A$0.3 million. In short, revenue grew while cost pressures squeezed profitability.

Both divisions moved in different directions. Skydiving revenue fell 2% to A$63.8 million, with tandem passenger numbers falling to about 117,000 from 119,000 due to lower inbound demand and weather conditions. Adventure Experiences – the reef, rainforest and tourism business – increased revenue by 6% to A$65.8 million and now makes up the majority of the group’s EBITDA, underlining its growing importance to the overall structure.

Balance and forecast

Experience Co ended the year with net debt of about A$10.7 million, about 0.76 times EBITDA, with cash of A$5.4 million and an undrawn credit facility of A$15.8 million, leaving it modest. Management struck a cautious tone, noting that the group’s earnings recovery would likely take longer than previously expected, citing ongoing pricing pressures and operational challenges.

This candor matters: it signals that adventure tourism’s post-pandemic recovery has not been straightforward, and that restoring profitability, not just revenue growth, is the real challenge ahead. Payroll and insurance costs, aircraft and equipment maintenance, and the fixed costs of operating landing zones and tourism operations all factor into a business where revenues can be highly seasonal and weather-dependent, so even solid revenue doesn’t automatically translate into higher profits.

Why is this important for investors

Experience Co gives investors direct access to the inbound and domestic travel circuit to Australia. If international visitor numbers continue to recover in key destinations such as Cairns and Reef, both divisions will benefit, with the Adventure Experiences segment providing some diversification away from weather-sensitive skydiving. The company’s relatively moderate debt load gives it the ability to invest or absorb shocks.

Catalysts to watch include inbound tourist trends, tandem skydiving volumes, cost control and profit recovery, as well as any portfolio movements such as acquisitions or divestitures as the group refines its structure towards higher-margin experiences.

Risks to weigh

The risks have been evident since FY26. Earnings are highly sensitive to discretionary spending, international travel patterns and weather, all of which are beyond the company’s control. Cost inflation has squeezed margins even as revenue grew, and management noted a longer turnaround time. Skydiving is dependent on weather conditions and safety, and any disruptions can quickly wreak havoc on operations.

For investors, the question posed in the headline is really about the cycle: Experience Co has the assets and market position to benefit from sustained travel growth, but FY26 is a reminder that cost discipline and a more stable environment are needed before earnings growth turns into a real new chapter of growth.