ASPU - Earnings call transcript Q2 2021

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Operator

Good afternoon. Welcome to Aspen Group’s Fiscal Year 2021 Second Quarter Earnings Call. Please note that the company's remarks made during this call, including answers to questions, include forward-looking statements, which are subject to various risks and uncertainties. These include statements relating to the expansion of the highest LTV programs; revenue estimates and trends; future earnings and cash flow; G&A trends, including our main Phoenix campus and other campuses with initial operating losses at our new campuses; enrollment growth; the impact on bookings; our estimate concerning LTV and ARPU; the impact of the COVID-19 vaccine rollout on future class starts in the fourth quarter; and future accounts receivable estimates. Actual results may differ materially from the results predicted, sand reported results should not be considered as an indication of future performance. Commission and its to XX-K prospectus the and risks is Group’s filed of press Securities in the contained supplement Exchange discussion uncertainties this Aspen related business with release A issued in afternoon. and in the

measures be for one any the disclaims any update adjusted the this on conference by will XX-Q adjusted under Please Reconciliation Aspen the course of the Group's provided available of to a to remind filed in discuss forward-looking Presentations I'd company the a income and conference developments. this Company aspu.com the talking EPS company Also, non-GAAP obligation call the share, the like as and and about available at most note adjusted financial slides you tables result There page EBITDA Group today. transcript that performance. the which directly Aspen EBITDA, earnings in the comparable company's of Info. statement will are website. future financial per that company's loss net to press in GAAP during measures year in loss the release call, website and issued are are

Now, Chairman I Mathews, the Officer. to Aspen over and Michael will turn call Group's Executive Chief

Michael Mathews

of and million top-line function was million X% Achieving a afternoon. we or growth. estimate for the in Good revenue three year-over-year, consensus million This beat $X.X key or delivered quarter QX the revenue million revenue second record increase million. top-line of Today, an performance quarter of $XX factors. of a XX% record $XX by was $XX.X $X.X

record had Aspen X,XXX last for first quarterly over universities. at at reported both enrollments we quarterly as time month, enrollments the we University. achieved First, We

year-over-year. we XXXX year. Last Additionally, an USU marketing of flat relatively the XXX was kept fiscal year, throughout spending enrollments, XX% increase which delivered

primarily FNP and and Doctoral LTV planned Pre-Licensure BSN which business, significant USU, unit we increases highest our our our have units, advertising are spending year and our Aspen executed this Aspen While in unit.

these units revenue beat. three in driving enrollment So high in one key factor was growth LTV record the

key key now second LTV of the those revenue The FNP; businesses, Pre-Licensure milestone two achieved is factor revenue two XX% and our in as highest Aspen’s of business the businesses USU, growth quarter. delivered BSN the company's primarily the

third The factor in was favorable key the beat revenue seasonality.

across of first The result now combined of $XX the that million growth, QX total million. performance and is the of currently for the internal forecast. given Our than has full and million million were revenue, $XX.X stronger year quarter a quarter in second revenue fiscal quarter with the XX% quarter over year a back-to-school company, a quarter students of through in starts expected incremental second Course seasonal given we August have for both specifically unit quarter strong or consensus is revenues estimate of QX which $XX.X month versus consensus the $XX of in the been every historically million mentality half planned of delivered $XX.X million, implies the our a October. $XX.X than second stronger enrollments revenue $XXX,XXX is

affected, full are $XX.X during of addition we falls it we confirming in effects quarter QX a seasonal Other Aspen the we wave factor, we than seasonally to are While believe COVID, is now slightly And forecast. X, especially will third seeing to what see expected revenue the in in not third few call holiday usual we see Nursing + that There's the consensus all month. slowdown are over our seasonal believe usual lower the year overwhelmed the the million QX, has the given company provides question of months. unit. of predominant for partly the registrations highlight just typical Accordingly, the in and effects the only is revenue demographic ends major no QX been that confirm student seasonal it our also analyst quarter metros. existing some the in But states consensus revenue past we important guidance, our in estimate given the we're in as course reflected country

So this isn't unexpected.

back may of QX X-week and a a in effect wave enrollment, QX. in June enrollments we recall, April saw only You where COVID saw to and a slowing we for March similar period, during have X, bounce May

of the winter our registration the and season, in rollout course same fourth we and anticipating recovery quarter. as through vaccines move With trend enrollment we are and the

than QX, by EAs we in Doctoral make and which three and comments in with revenues slowness this staff to course unit. units, of which seasonal grew EAs was unit saw in our spend Recall Aspen this quarter So step-up advertising expected our registrations effects, company, this seeing we increase. we're in and Enrollment the COVID majority EAs, more expected, advertising our enrollments for seasonality completed favorable important of short-term the will with directed by quarter University's spending with increases to quarters line two $X.X some to million, about BSN the across from deliver due XX additional QX $XXX,XXX the highest million Pre-Licensure; in We summary, and USU, expectations. QX revenue growth spending total adding Coming spending from in net-net is to Three our XXX FNP; XX% LTV in the discussion, this spending $X.X primarily back approximately to every we to Advisor spending. sequentially have grew anticipation of planning. the been that in in

rate rate to we plan fiscal over years, company's flat or CAGR the maintain for is advertising coming First, business XX% compound continue year. given essentially as annual the last an accomplished our cannot we growth spend

lead know, marketing a as between and lag growth. spend Second, you relationship revenue there is

investment revenue in this set upcoming the not benefit QX strong and XXXX. quarter, the While in fiscal company do seeing up the and increased we will on in our revenue growth for of current plan the form enrollments

that and XX% to increase pre-licensure $XXX,XXX note the approximately Third, sequential new metros, directed Tampa. two was of advertising our Austin

revenue first strong as given we're in increased XX% marketing revenues generating to to to XX ratio Jumping student progress The operating company's $XXX,XXX revenue making metros. of percentage result, basis in sequential X% As both weighted company's compared metrics average universities MER year efficiency $XX.X summary, as representing only CAC for enrollment total increased or to the or enrollment increase, our to marketing year-over-year or average per leads of on XX% remained our ARPU cost per year-over-year. a times. Therefore, cost a the and enrollment increase both XX%. XX,XXX, over a spend declined of The delivered a XX% above sequential fiscal enrollment of even per million, enrollment advertising In an which prerequisite company-wide last quarter. $X,XXX. year for bookings from per $X,XXX the average of our

the business. by XX% sequentially Finally, today remarks body total our X,XXX just student the students company's to nursing XX,XXX on active active over of my an year-over-year overall student XX% to body or XX,XXX from I'll growing Pre-Licensure body. grew giving our XX,XXX. BSN complete update by active With student company's

rapidly over is Phoenix aware, grown the past have our everyone years. three campuses As very metro

$XX,XXX we per two-year two XXX our years of those As program. in per the in per had to quarter, second $X,XXX students student year of final which in year final program, the the year end compared core of drives nearly per of student approximately one revenues

to students we in our short in students be approximately double their very first addition, Phoenix order prerequisite have X,XXX by February. this to to cohorts begin enrolled Phoenix In these metro. times wait airport, have currently year program, in In will core campus we the starting main the coming ensure moving

program increase starting than semester will as starts reminder, approximately six students fiscal main increase per million annum, in annual rather fourth will Phoenix capacity of approximately to rate into each a a have semester the we by XX So XX at campus approximately starting revenue each that by start. run our quarter. our semester, our This $X.X total students XX% core we

Frank percentile. QX, momentarily, walk XX%. a our EBITDA As in margin will margin Pre-Licensure XXs increased that second through was you the business the reminder, Phoenix in And quarter, our for into as EBITDA

further this quarters. coming to is So that the revenue cause increase incremental projected margin to in

In margin. fact, possibility ultimately that of reach the EBITDA out longer business our could a Pre-Licensure XX% realm Phoenix of it's no

Another Pre-Licensure metro we this: Phoenix in look With overcome a at in the at year of launched Tampa. annualized recently we new this our XXs, in metros way revenues incremental that projected first our Austin the operating $X.X will two margin million nearly losses of and aggregate margin incremental

for year our receiving next I've pre-licensure XXXX. decided we next once very in far number end announce to Finally, receive hold the we're of until of expansion planning all the toward the metro competitive on for pre-licensure a inquiries fiscal to marketing our this and We're announcing to back along about metro reasons year with been on We're begin spring. approvals. calendar regulatory plan

On corporate operational and new treasury accounting Frank functions for resources, the improved savings. company, front, corporate support build-out service internal in up and location. has been accounts payable, operations of the our of many and Tampa of and heading center brings a synergies the center that allows service together payroll functions, the This human the namely cost

be in cost have an very to relocating Tampa to year, a area. with and take advantage to progress. these effort day-to-day we in Frank number from positions Over to Tampa the the and recruited moved this its will lower Tampa continue the to York successfully New last of work of group have

his stock remarks. may and my these facilitate to sales you That in move by will weeks see coming be Tampa. to some Frank, completes Finally, small the

over financial Frank Now to I'll call for to our turn QX. the review results

Frank Cotroneo

for quarter. including afternoon, the financial Mike, prior unique our you, commentary $X.X year or on indicated, input which reviewing $XX million XXXX second $X.X our record results transpired events, by begin To XX% fiscal million. increased Mike on I'll financial providing good Revenue in non-cash second or begin, the XX% during quarter. the a progress, the over Thank quarter, over everyone. and quarter the to some revenue million the financial increased as prior

was our have a quarter Year-to-date, enrollment. second typically momentum we quarter and no Aspen Group, consistent strong The in seen is exception. seasonally for this

deficit no nurses this the nursing the X of major drivers school economy tailwind programs the and see will million this seats across a for our in caused One with need the available We of by is that combined evidence abate. country. shortage of nurse demand

this particular, young Additionally, lost have and more career on been controlled augmented lines first, fiscal nurses clinics. two that these impact the of in nurse adults of in a new are by in now for we of nursing now COVID. service have and and working come at population enrollment felt are the year, the jobs a a of to QX to looking QX second, increasing family tailwinds in and the groups: who degree; In pre-licensure number degree for looking an BSN attain private Aspen front higher-paying and nurses practitioner pandemic, industry work

our to a As result, of are degree highest two two continue our be these They also fastest-growing programs. LTV programs programs. two

Mike company XX% of family for our BSN quarter. As USU, which primarily nurse is combined our mentioned, in revenues Pre-Licensure Aspen practitioner University and accounted program program from total revenue the

Aspen's for the remaining Nursing and Doctoral revenue + accounted the of for quarter. units Other XX%

businesses select The future. of revenue, achieve our in flow from demand and on a two the will backdrop, in grow two campuses, programs years success of opening strategy will, With our while programs campaigns enrollment percentage of intention higher flow company of to two coming of goal the total in in growth. a principal growth growth Aspen businesses stronger these campuses a drivers these programs over are and immersions to revenue year. into other expansion. over new sustainable deliver to booking our new two steady trajectory expect strong revenue the half total we marketing continue to of revenue the earnings embed of the stated every And in next as X This revenue maintaining gross metros, Given effective year company these the investment time, to two into second increase core resources place FNP years. and long-term Aspen fiscal provide pre-licensure the cash over our the BSN from XX% these students this and margin of free increasing

from profit across margin The decision the Aspen of to was marketing increased LTV prior begin XX% invest XX% year QX XX% to markets. $X.X and by spending and ago. support ago in revenue, in Marketing was build new reduction in the million quarter highest pipeline this strategic students XX% quarter. two our to marketing which gross spend, $X.X quarter even million programs increased the $X.X from stronger to Tampa campuses in up year-over-year of million an year to sequential Austin and Group's in gross a a XX% from and our

As spend $XXX,XXX. the highlighted to of mentioned, to spend. over will of the a of that efficiency due is approximately run. spending expansion increase marketing predominantly Mike The long be delivering and continue in advertising primary increase factor sequential total was spend advertising be represents gross that our advertising XX% It should margin

be and that able our highest leverage LTV than value nursing as a a student the nurse $X,XXX total to per the LTV higher, a student creates LTV you to when of students an programs pre-licensure other of student. grow of Aspen the student and family and nursing percentage below traditional a lifetime continue especially X.X We of This student a other in online programs traditional to acquire in consider LTV higher source higher times is significant practitioner our Aspen business. with X.X of as these cost times is revenue,

company stated our in USU, As highest of beyond XX% to LTV quarters. expect increase we businesses, total coming level the revenue the which I two pre-licensure, primarily business family practitioner earlier, nurse and the is

profitability achieving result, grow. a levels and to mature levels new and our as continue As anticipate historical campuses gross these margin programs above revenue we from

excluding XX% the QX cost XX% Aspen XX% QX of Aspen the XX% Austin amortization, support both and increase Instructional faculty Total across equaled XXXX and in revenue. campus and revenues of second marketing revenue, just USU's revenues XX% year. of due XXXX costs Faculty while leadership quarter million I spoke costs new or versus was second universities, for pre-licensure of for increases or XX% to to our of $X.X increased of adjunct revenue Tampa. instructional increased to and University depreciation to hiring USU of about. which XX% costs last full-time in marketing from quarter increased new for due from $X.X XX% costs year, in is The for the enrollment to and versus marketing spend, last University million campuses

Aspen represented services of quarter. for USU’s University’s the revenue instructional instructional XX% while Aspen the costs costs of equaled University's and USU’s quarter XX% for and revenue

million, For an consolidated $X.X Aspen Group quarter, second over $XX.X of G&A increase year. prior was the million

the quarter. For of represented prior compared XX% year second revenue this to quarter, XX% in the

of plan compensation of was the trading I On vesting and thresholds of first trades quarter. accelerated in performance-based of primary is for for structured consecutive conference quarter $X.X performance-based four-year the bonus The at reason increase grants value. equity plan for calls The specific stock leadership's our with first restricted vesting to to above AGI's shares second million the align price provided AGI's this earnings performance program. stock-based when thresholds from two tranches of The call, detail shareholders, is XX common shareholder sustainable at target price days. the which or interest drive on

vested the XX% at quarter. trades and $X in of consecutive And the second The achieved again, $XX set $XX at above million. tranche September the $XX.XX. total is On the in second thresholds XX% XX% XX% the when XXX,XXX $X, stock compensation or non-cash vests reported the was at Xnd, stock-based at is $X.X at XX for XXst, a expense or August shares. Two remaining XX% quarter, the vested on or tranche accordingly, $XX.XX. trading vesting reminder, days. total Vesting As were grant these $XX,

operations this as what $X.XX element strategy. growth The OpEx personnel OpEx is specifically quarter, in our investment and the our EA Advisors expansion decided grow projects and Enrollment center, heading second clinical infrastructure of we growth support center, costs enrollment of to Growth approximately to was XX enrollment EAs Academic our key million expand defined In we XXX from investment to every our Advisors our OpEx. across of specifically, our and staff represents Financial related G&A growth personnel. call In Aid our to company. EAs, unit

accomplish the our our spending increased with marketing This the for the in of the year fiscal growth done is drive remainder and goals now fiscal in the fully year marketing, first for our typically universities. and year. happens spend support for conjunction fiscal staffed student are course to investment We of enrollment to revenue registrations the year. year supporting roles enrollment in to both and staff enrollments, higher of pipeline activity enrollment strengthen into increasing this which the at will and and across other back This lead will our fiscal next half end

Lastly, and these to new Florida. removing of faculty new our Texas after the the these Austin, in in recurring personnel accelerated third an quarter, expense for in or million. versus consolidated recurring and Tampa, growth our growth. $X.X operations XX% stock-based year-over-year the the and we growth of in million quarter, revenue positions $X.X support began In line the target G&A investments, investing the G&A, million increase launch reason compensation second new for markets. the approximately G&A expense below OpEx represents is campus investment was campus This and leadership to revenue at form which grow increase with company This $X.X of $X.XX came of million and in campuses our the of in

January XX, million This $XX.XX X.X This converted million of of $XX notes reflects million is discount acceleration convertible XXXX, announced per a XXXX, a stock. conversion by price company issued original of the of into secured on and we the convertible the share expense. the had the shares on stock XX, threshold On $X.X non-cash $XX million interest September common quarter's achieved notes. of charge issuance expense

expense debt removed result, annual associated of and Aspen $XXX,XXX P&L. the from the interest As a Group

a USU million year-over-year related marketing, of of $X.X compared non-cash $X.X discussed loss the related for to the $X.X $X.XX campus increased for compared would year $X.X is been compared in of as ago a EBITDA previously and to a charge $XXX,XXX net as the OpEx a perspective, compared million adjusted Without campuses, second university margin or a income million non-cash generated have a this $XXX,XXX and conversion quarter quarter investments second compared our million to $X.XX These net in non-GAAP XX% QX of is in income growth million ago. previously approximately year earnings of to XX% adjusted an was $X.X compared two From for measures: was a Net XXXX namely items EBITDA discussed. discussed, includes Adjusted $XXX,XXX of Adjusted to of million for or the income discussed. now $X.X $X.X in convertible is a loss margin net of items, of net loss of call, Group XXXX. million million or the vesting new as new G&A RSU $X.X conversion, corporate $X.X negative unique of quarter for growth In non-cash $X.X loss of including per which XXXX. Aspen This $X.X a EBITDA adjusted XX% loss an million, share losses million of debt-free. generated comparable EBITDA EBITDA of million X% items costs the positive charge positive positive introduced applicable per increase loss the in per year or earlier. approximately $X.X earnings million $XXX,XXX $X.X quarter current net XXXX. increase net for negative result million This and margin debt in expense notes. about $X.X of $XX share we of loss was AGI about about X% the year increase million. reflect per shareholders AGI $X.X Following positive net $XXX,XXX, negative net to EBITDA minus in loss million the or million previously these Adjusted as million $X.X million and QX minus new incurred the investments QX $X.X generated to two to prior positive share XXXX. share loss University loss the of the reported corporate loss in to The $X.X period. was Aspen net year a million two and share. second fiscal period. the was of margin per $X.XX, period. adjusted the net Adjusted million previous in prior $X.XX our was a $X.X QX

EBITDA, new the $X.X highest EBITDA the EBITDA business million of margin margin start-up XX% That $X.X company, University remains million unit EBITDA for business including the an new XXXX. and of Aspen or million BSN which at campuses. for of $X.X of or QX adjusted Aspen's that XX%, operating of million given operated XX% Note pre-licensure $X.X generated of margin margin consolidated even the campuses. consequently pre-revenue expenses the the accounted

XX% the fiscal generated cohorts if campus operation year, you EBITDA exclude double quarter margin as And expenses, earlier. the in or rise adjusted $X.X operation As to for the million Pre-Licensure has margin once XXs. $X.X an Mike of margin the second further EBITDA have margin would discussed XXXX. million potential USU mentioned earlier, begin new the that in EBITDA we Phoenix for or February, of and XX% next

effect the introduction economic this there. us performance the to sheet, and I demonstrate the to allow feel the evolve of the a same-store to them to as from start-up without discuss switch to standalone I'd get metric steady of We necessary sales. Before business and will with to the they of investments state metric, the new that units breakeven campuses new like balance

consolidated in same-store years. use throughout growth campuses next EPS reported loss investments, loss the X $X.XX have of execute start-up instead the Without XX Using United We the will of our represented this to would quarters EPS instead this Southern $X.XX as sales of reported. an $X.XX in in open States and we strategy loss the loss $X.XX. metric EPS concept, $X.XX future second long-term new loss the quarter, of campuses been these adjusted

Turning balance to sheet. the

revenue million approximately this cash and months. restricted X Included cash with and $XX.X will ended in the coming $X.X Group compared $X in $X.X period unearned as cash million that This in quarter in in year same equivalents which be in compared in operations is at the year. earned the in equivalents of million of fiscal of $X.X million company $X.X fiscal million $XX.X last The unearned $X.X second and year-end cash. XXXX. million and the was is used million restricted cash cash of million to revenue quarter to restricted cash, using Aspen in cash XXXX

Regarding and doubtful continue allowance growth our accounts of accounts, evaluate accounts allowance our our of for accounts business. change receivable our we doubtful the to context and mix in for and the revenue student our our in increase in

allowance, This $XXX,XXX quarter, allowance we the which to balance. for replacement added $XXX,XXX included our of of receivable write-offs

payment We adjust and revenue our will in line continue improvements student with growth to in expected allowance performance.

count, share quarter started shares XX,XXX,XXX outstanding. basic our Regarding with the we

result X.X the convertible well million ended a the million employee into of quarter outstanding. exercises notes of as the stock $XX As options, XX,XXX,XXX conversion we shares basic as of shares with

the when RSU over performance want price the vest compensation X stock next or of unamortized non-cash trading of vesting maintains the date shareholders consecutive tranche one quarter. record If could there the at days a I and remainder will that remind threshold grant any is that final the to company remaining the expense that Aspen's years. $XX, Finally, XX in stock-based of as vesting remaining above at

for and impact will not on it in As numbers it has expense, reported seen while a earnings concludes in today. Thank operator holidays. the EBITDA operating joining loss turn non-cash the you our questions. is negatively to and this happy now and This material quarter, item the a impact call I net back will our my us this remarks. quarter, performance. all safe prepared Stay ongoing for

Operator

[Operator Instructions].

Aftahi Partners. from Our Capital ROTH first comes question with Darren

Darren Aftahi

Congratulations on quarter. the

doing You're well.

I if may. couple, a Just

curious, thought with And both those any if Tampa any the is Phoenix it's early accelerating about cohorts, time Austin. of P&L the growth BSN your in of I'm kind With mirror that's the the then potential going over there of the know the program forward? just and reason campus? double case, is But I schools wouldn't there

Michael Mathews

you? How Mike Darren, Good are afternoon, Mathews. it's

Darren Aftahi

Hi, Mike, good.

Michael Mathews

the little part understanding bit think in early You question, broke I a of you're your have up I of asking. but what an

a we is to for us a relationship the there with sent one and One, HonorHealth, their metro. campuses have for are is schools two a And in that metro long us number than reasons. kind we of perfect thing very So metro are one be but lists of aware second, world the of the only scenario Phoenix also the this have on. number wait employees public the not enrolled full, that Phoenix amazing where early of institutions, nursing in HonorHealth rather

there's any reason reason I in metros this our margin new you don't -- worst Phoenix to But is us maturity, our don't Tampa describe I guides point, upper both why, I Nursing once XXs. is semesters year as well say of which would what So expect I to case, move six in XXs and mid the perhaps Board operation, per example, what to operation. see would be semesters homeruns, four the currently. year, the the once the But to would campuses, that, we to those they no as be reach in why Austin per into for Austin at

Darren Aftahi

look helpful. CAC the of And kind early? and both at Great. steady like state at kind of USU businesses, your CAC feel where still do of shakes Or just out we too as you then on is Aspen it this That's point?

Michael Mathews

No.

to experience that way. going $X,XXX have I we in USU enough kind now give each $XXX is or that confident think range, take that we're pretty remain years of of

Aspen of course, units. be the pretty know, consistent average range probably we you our a And will University, and a as range. now $X,XXX, it's $X,XXX three that to is of like feel weighted So each of

our and is traditional + business original got our Nursing And you've then, our Aspen which Doctoral then So business. campus Other, Aspen Pre-Licensure got business. of you've course,

put range. I reason same those that we of you each under has $X,XXX, been for in don't any when together average see us weighted continue can't why So

Operator

with next Our Securities. from question Northland Mike come Grondahl will

Mike Grondahl

early Yes. and are successful? kind do what on? it Thanks, And in efficient the you Frank. that Mike for medians of think how and marketing Austin, was Tampa using you marketing? incremental you measuring The sort or How of were

Michael Mathews

Mike Mathews. is This

and We advertising marketing are in Phoenix. as we methodology Austin using the and use in exact same Tampa

would So compilation different there's marketing I it's a three -- strategies. of really Actually, four. say,

We corporate force. have sales a

calls outside So community an metros. we That clinical major that's schools of prospective as have on our in partners. salesperson each well colleges, as high

first. the that's So

The we've advertising of programs. that is original all in second Internet done traditional our

The works those I've channels publicly really social well we radio, said And media, for as that before, then with that is traditional radio. us. augment third three

our it's was and going as demand We're quite in far Phoenix not both So behind. in seeing Austin not in successfully. it's strategy, while marketing as that's and locations. its of successful months, couple it's Tampa, good first

Mike Grondahl

Got it. and kind out of newer might different we still find Or you of being them only can as cities? be were there we then sort location? about when the Southern you think that in about And talked about implying two might the spring, one locations,

Michael Mathews

which designed announce start to Yes. We next just annum, campus, about We annum, campus two talking the do intent marketing per an to calendar were second fall. planning in new and sometime the start campuses summer year metros still spring. next in we're have we'll is to that per -- or two

So per change. No year. it's two

Operator

Martinuzzi next question Street. Our Lake will with Eric come from

Eric Martinuzzi

a million XX.X%? QX and $XX.X QX wanted totaling the correct, this just year to million QX would I outlook Yes. the to and top-line was FY at QX. that for $XX.X out have Do I clarify be 'XX full

Michael Mathews

that second Good to year, going afternoon, in just the at that yes. the consensus estimates for revenue number the Eric, we're of reiterating it's maintain this Mike. half point, we're current Yes,

Eric Martinuzzi

we've do to spend thing about, and talked on invest we XX% invested Enrollment but Advisors marketing on -- the guidance, up We've you Advisors. on keep hey, the -- the CAGR, here marketing at it's how Enrollment already obviously, the the not And and talked in we got marketing. this you in going know I Okay. amped

are incremental Just the assumption to able we could in the we incremental conversion, if million along of $XX incremental XX% top-line, that, million EBITDA so broad bring strokes, revs on that see of EBITDA? would an $XX million an equals an drive is incremental $XX that then adjusted

Michael Mathews

is would again, company company. I a as don't what guidance a Eric, we Yes, -- that, provide say as

expect our EBITDA into But prefer years, exactly in So margin fiscal the to not grow specific would to future I get leverage the do be. what we about double-digits.

course, say the now, right so range. has been And in I that hovering positive EBITDA of will because

particularly we This second year -- QX. in of half expect went to but we quarter, of improve, things course, the negative, to in the

Eric Martinuzzi

Well, terrific. growth it. that congratulations revenue on Got quarter, XX% is the second

Operator

come Moldow will with Austin question next Our Canaccord. from

Austin Moldow

of give you are thoughts change on And Given expect sort currently how BSN administration, particularly share the as secondarily, can landscape you business? the you expand XX/XX rule, your your on where us you regulatory you can to that change? of

Michael Mathews

Mathews. Yes. Austin, afternoon, Mike Good it's

first. So I'll the take first question

government XXs the end the total audit In both revenue. we our were stand on revenue percentile XXXX XX/XX over of terms we of of of in filed universities at the year fiscal in low the And the where October. rule, terms percent

who from our a range. range. because plan, a sort much both to far a we're brethren method cry payment for-profit monthly less And our it's very always expect such that So in sit XX% payment plus at XX% or in be schools, predominant of we

like that behave very for my regulation, gainful expectation though, every office, similarly Biden the takes it and example, makes good employment and once good from I the felt always a some felt as gainful Obama have to employment sector, governmental a the university, should And every we apply that the of was just it in, for-profit not college will did. Now for-profit. sense. Us regulations, Education they regulation, of view, point Department put from administration the perspective,

country, would do to from great just shortage. if you and in nursing you our employed nook and are XX% because registered about -- like of may of our in nurses and so be profession, So our the because cranny the students gainfully essentially every perspective, of

never reinstituted. concerns any the they employment we passing So be regulations about have gainful should would

Austin Moldow

I just you as on, a buildout? X phase you us CRM give it of your quick update think, can put lastly, And

Michael Mathews

mean, I lot really not a right Yes. I'm now. prepared talk to that about

We it, the haven't of universities company tool, that are tracking it's in that play first would those history retention whatever that call advisors issue be. ensure the then retention contact student system our looks for will overcome our in see the we if those that offense, of is career. I might occur, of working is the proactively to for be playing is X on the to able negative that so. of concept happen carefully, our CRM When could to been student a student student's basically to system -- whole and academic designed body, it's system. you potential do in with And events as one or that offense which And a order a essentially phase events that

far humbly history. So and that this you that X.X system in is the I away sophisticated the be CRM tell And year, most once system over will industry's system next should in that it be ready would years. place,

Operator

from Our next Craig-Hallum Hamblin question come with will Capital. Jeremy

Jeremy Hamblin

in in year. cost about appropriate wanted in second instructional I fiscal campuses. the have make your to investment new the the opening of the marketing, here half needs you to investments ask Obviously,

first at campus on You're the a marketing your you're spend in in half marketing believe. stay half and what back going your costs I get XX% promotional calendar kind in will the on probably I that what that 'XX, XX% here the to your I just some expect in for on looking of of imagine wanted if of have we of additional And just confirmation year, to range, or sense instructional targets are that. open but can QX?

Michael Mathews

asked. afternoon, That's Matthews. glad I'm really Jeremy, you Mike great a it's question. Good

say during So let early it's our we me essentially several increase our much usually in then a few and of QX, marketing and select typically from we years, than spending marketing center quarter a and grow then everyone for our in during last QX. quarter, year, certain year, kept perspective. prepare spending the Every completed -- And more for other where the just we we as we over fiscal enrollment our center year enrollment flat last year. spending I spurt people that a growth had last the the a trickle pretty guided

So we from is that not the growth the that of any up the rate had half What grow the years second spend flatten revenues in this that the allow that QX, than the to we going catch do this so sort XX% we've of to now spending and for more QX jump. spend rate of to was can we beauty to that that but the are. in done of say, what to quarter out spend year basically big where plan We're past And we sort is doing we like, the invest. and year.

say so time to of the be And I'm we years, I -- a that approximately just we as to very on previous similar done in said a breakeven. ago to should that hopeful hopeful an fiscal basis is we range QX, in sort QX we'll our Mr. and by that which get company Cooperman adjusted want in remain to breakeven we've QX, as that that will quarter be result I in QX, is EPS

improvement all fourth our operating of we metrics significant a our results. our see you'll as deliver and bottom-line So in metrics quarter

Jeremy Hamblin

I around can little assume gotten even a pre-licensure becomes drift portion business, that could back here Great. That's about that, to the portion? your helpful $XX,XXX, as to think of just your as your $XX,XXX what the greater you Aspen think, that come fair wanted bit also total of I into to business a achieve of the side color. University ARPU. you've kind And in question, we now company up range, up is further

Michael Mathews

our thinking of Yes. is high way. units. No, the majority you're as our during in mentioned about right remarks, earnings LTV spending the that increase, The vast three I absolutely

USU, got is which You've business. the primarily FNP

Aspen, the And those pre-licensure you businesses traditional All unit. X, higher Nursing nicely as than Other X Aspen times LTV are doctoral course, Aspen. of is the + got at which growing have very business X, well. You've our at business

continue So three businesses, a of majority our you'll yes. our of -- these mathematically, continue enrollments yes, as no LTV into up, question, flow will trickle to highest result the yes, to ARPU

Jeremy Hamblin

Austin competitor, it of a a been on that like entry model announce fairly response in even their me company, pricing looks in right they've almost to to then And Okay. maybe a some they've terms company. have in And that sense made it competitive How space. away public maybe had just for by what private your acquired into large separate note, you changes color Florida that they potentially marketplace, provide seeing you're or to But in set several Any to the crowded be could there? little campuses. you the to as looks Phoenix wanted on compares that? more a where bit a get

Michael Mathews

There competitive proved business nursing Yes. our incredibly to a what in different that is will very mean the pretty the United going that enter in environment. So completely environment, that Phoenix, in every Texas market right? States arguably think clearly we've is metro. almost for is to sort model is I competitors. Austin, most of a no work schools. competitive a competitive would we metro I kind of an And are you private I have different metro say that

why Texas just You in publics have we into we but much of came when isn't there one well, the the Baylor as of Scott launched & there recommended, the reasons Austin there. is because White state competition

a terribly So nice of being really in we have competitive. not it advantage Austin

But in good yes, in for they're metros a they're them not. a in good competitor College, school, of of you and mentioned a to good number I competition the I more just that competition, major And It's Phoenix. Rasmussen there the school or wish school, described, than luck. competitive and is than Austin, much Tampa nursing you the be ours, example. As Florida, private more don't market, consider Tampa

Operator

[Rafe with question next will Advisor]. come [RYS Our Savitz] from

Unidentified Analyst

new Mike, deeper Can the the maybe what another to the little pay affiliation great how a local us remind cost congrats then quarter. and on a these to back? as new And time bit your campus pre-licensure you with campuses, dive you is overall you that about think launch on launch hospitals?

Michael Mathews

Yes.

a first. of I'll view, question from just your answer financial last So point

X.X operating to on a even probably That's it And XX new for and metro we on in about perhaps case only years expect breakeven basis. broke million basis. We take months, basically at an Phoenix, we to an after scenario. a $X.X operating least year, burned best

these and it's to new the in loss, my XXX say it, in of XX terms and call XX markets, months that best between XXX would probably would So I guess. that be range

first your was I apologize, question what again? sorry, [Rafe]. And

Unidentified Analyst

Yes, model intend affiliation future your you And just -- I hospitals, that all guess that markets? with works? relationship how that to the into take the just a is

Michael Mathews

Yes, that. about sorry

Yes. Okay.

-- accommodate going in we've metros that of with have well, that that to of band year per a we've a institutions quarter and we institution unless largest, the that have been not consortiums We're different. where And of enter of each kind a the little three a tight the able And or there gone states is on are of per market healthcare that kind the strong that as we placements whomever basis. in very determine what market to healthcare to is market. with work sophisticated into every most number to-date. accomplish they're relationship to some the some able most So together

in of we those the manage So proper each what metro. move into two we we have ensure as new placements to order aspects that are

Unidentified Analyst

say that Or is you placement, when during training that And is a the…? a afterwards? job kind potentially of

Michael Mathews

the their those Yes. the training. No, our students out final That's X-year -- are clinical that core program in during that's take the Yes. field. rotations

Unidentified Analyst

Got it.

nurse more Okay. is broadly, the practitioner in And what the what's business, at then I guess the going USU to the And there USU? capacity market? opportunity

Michael Mathews

is for able -- capacity from. not leads because generate it's us be really to advertising the us Internet unlimited really Well, for to there's enough for impressions us

requires would a perspective. it FNP that of what and program, I to from get a a planning you operating, a pre-licensure publisher you is clinical But web whether USU, whenever or program into say sophistication. Aspen program not concerned we're in tremendous it's So about amount at that the

us business, continue things to have a to we for And do obviously number to to faculty necessary. quite We well. so of have the that grow hire

space We weekend to of our basically that that. have order to each which of clinical rotation field clinical we're multiple locations we to finds students. to have for accomplish for available experience an and have yes And -- office in have immersions, moving the campuses

clinical is a program very effort. the sophisticated running So

grow that growth making sure can that be we're far, it -- how of bit just doing would of perspective. quite operating the in terms we a little And But sort quickly that so we is limitation be an manage a would from well. of

Unidentified Analyst

I if bit challenge you're building, talking improve ask a talk currently Can little your new the you're goal was started CRM that? And in just business? in had about the retention rates about referenced, you the a you that When business. it. Got really, could facing one to more. that you Is

Michael Mathews

now this online some in an type college representation body. student every that to say country would I [Rafe], their has of

And student so on that a you when the doing. whenever is have don't they're online, student how data have you And a fully online is that is them. you student real-time see challenge

management you online. things situation an counselor And retention time in-person. with success very with You're make and There's going of have fully that in time these no different members. So a that's work issues, faculty might this they pull into, contact tech hey, online could then so an to ed there's this or algorithm rate increase There's not have progress, if guidance student. is factors right? a have. of to that There's if person him there's college a it's go designed an in that tells that relationship data our on, types infrastructure a potentially failure be an her, materially. academic many number go all real the person in or into job-related it There's issues have advisor, to of and success able

today, pretty in these We're a school, across institutions range. imagine, online XX,XXX I across for-profit are sector. -- XX,XXX be or to these of managing imagine, all if imagine large. that it's the interesting online school we're programs students non-profits, the online OPMs, the a program and yes, imagine all companies But managers, system would any this big So mean you're a that has or

Unidentified Analyst

like of tools Absolutely. best-of-breed to It bringing market? you're the sounds kind e-com education

Michael Mathews

and where it's we fruition. beginning, the Yes. infrastructure. I essentially and company vertically -- helped to history that hasn't not excited off. to in that it from vision just you we're company our the say so would tech it's I'm that we're ed was to shepherd in the our far system, people a proud higher education It first coming of existed. And build is have all integrated to finish what us [Rafe], And that to ultimately and are,

Operator

will from question next Sharma Securities. Riley B. Raj come Our with

Raj Sharma

expect certain impact of you to out you a do how the for again? Phoenix ask so that the impact How does now? -- have to do that guidance? year, cohorts. on the how guidance second just can explain wanted why you economics I double Could bit? laid a this explain And -- you you that half And a the little little

Michael Mathews

Raj. Yes, good afternoon,

evening these which, semester of our way inaugural semester on starts, per of course, side operations evening There's Scottsdale. starts. then our have campuses, we the and weekend annum. Phoenix, in first have Phoenix two have the by HonorHealth So we day North X campus there's X starts -- Both semester of campus locations works, X we we implement and the airport our

the we in the airport Elwood X years of first by inaugural operation for are campus campus. our our our So call what

had final X students in have the XX start We program. core at approximately year

complete it's then nursing they credits. all to matriculate first it's all student it's And to the the first. okay? online, and is HESI Once AX for X-year Now needs order understand entrance year, we have have about phase to core phase your courses completes pass first a essentially those everyone to XX to us, complete program. credits, effort, that X X in the $X,XXX final nursing exam schools, our and into the prerequisite year, the all it's schools, that So credits, prerequisite XX

X announced at both is that cohort What HonorHealth inaugural semesters campus, well doing in we just Elwood every we've program Elwood have double been been XX last our our we've X-year our basically we're the planning as students is our campus. hour what around semester, per enrolling So final campus. a into as core to annum,

each we're sorry, semester. XX, start going than So -- we're students rather rather XX XX of going that the at start students to have to XX than semester, have

So rate And math then $X.X of facility that question? we're run core the answer the Elwood of by our XX%. going start that annualized by to million revenue Does students the basically that so. grow the is about doing number on in

Raj Sharma

Yes.

that impact, right? -- change margins. that and to XX% Does start in new cohorts profile? But talked close up, the until know that start that -- does doing so with does to doesn't obviously, XX%, So also you -- million that revenues finish EBITDA $XX these campus you graduate I to that about

Michael Mathews

good yes, -- actually question. No,

no. So,

hit basically we've always order to pre-licensure a there. whenever that guidance So in top-line cohort assumed to move million in run we've business, provided double would a get rate revenue that our $XX we to

just in is exactly We the $XX moving we're into to to to to of coming this had wanted double first the everyone final public maturation that we stage moving of -- by this exactly know planned in get implementing to years. how that in our So campus number couple cohorts it. million we're our originally

Raj Sharma

different it. CAC my Got costs seeing Got it. other around cost you And Phoenix? in in they -- then acquisition, question saw CACs. Tampa Austin was the are than and Are you of the any

Michael Mathews

little now, than was out bit in Tampa, the we started It's far in say. early last to new just the But was Right pretty so little Phoenix CAC Tampa is Tampa, it launches. is of higher. X and a Austin similar a

far. thus to And Tampa lowest CAC early be Phoenix a Austin, but little followed so like it's the to by say, by looks will it followed me

Raj Sharma

again, viewing is, last bigger versus growth Michael, the on my Is question, of do you you're all of sort growth -- the you in philosophical profitability. kind look the and to quarters? by the upon you excellent few then that? at have And the changed is still Has touch end that that, last Could how question profitability are -- fiscal of that getting year? how you

Michael Mathews

Yes.

these that in as that's though drive basis. XX high it'd XXs, going in still hopeful flow. we marketing burn only us we to point an QX couple drive can like are range, plus and to XX, our see, the from be on like or be $XXX,XXX keep huge had spend adjusted of naturally sequentially, you that margins And to profitability in we of gross million a breakeven cash basis. $X.X positive is on of in As LTV did cash even we view, minus a jump want I to businesses to going EPS of the And a -- And rate, operating this to like now. we're sort CAGR said of to earlier, it cents an feel perfect world,

just we're as cash manage and and keep as try trying to we go. high-growth can we're burn -- So we quiet as that

Raj Sharma

we sense profitability. course, -- that a to the to be on of to love is the Yes, I'm we understand handle that trying on way the a structured, it of And also get path and your just growth. growth your business -- given seems

more profitable that the I'm but a just ability growth a show lot and necessarily on a business worried not you on seems have So have also lot more than have -- you about the that, control control to to model.

Michael Mathews

do. we Yes, Yes.

let when think, We view, order the have allowed proven to naturally And of we revenue And inevitability. us move that about is, cash over the which I looking big that and pretty path in for. years couple try number we a positive, increase so in our a rate we've out of to becoming an catch has the our -- up. growth we're flow that spending the quarters of down then is maintain make flatten far subsequent we're to intelligent for,

Operator

over now turn closing queue any I in would the the call to remarks. back to no questions management like further for showing I'm this time. at

Michael Mathews

mid-March. next chatting We're Thanks, everyone, you in today. Good with to for joining our us call afternoon. earnings forward looking in

Operator

concludes conference you participation. this gentlemen, your for call. and Thank today's Ladies

disconnect. may You now

Aspen (ASPU) 15 Dec 202021 Q2 Earnings call transcript