ASPU - Earnings call transcript Q3 2021

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Operator

Good afternoon. Welcome to Aspen Group's Fiscal Year 2021 Third 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 anticipated impact on the pre-licensure unit, following the implementation of double cohorts in the main Phoenix campus and of the expansion of the pre-licensure program in new metros, including future revenue growth and operational scale, the expected launch date of the initial core program semester in Nashville, the expected timing and geography of further campus expansion, course starts and revenue growth forecast for the fourth fiscal quarter of 2021, our expectations regarding future course start behavior, expected operating losses of new campuses and the expected time they will achieve profitability, expected increase in gross margins in future quarters, revenue estimates and trends, G&A trends our estimates concerning bookings, LTV, Merck and ARPU, our estimates concerning and experience with our accounts receivable, our expectations regarding EPS loss and adjusted EBITDA loss in the fourth fiscal quarter and our liquidity. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. for and its to and the filings including afternoon. Form risks is Group's Exchange prospectus of ended press the in year release XX, contained with XX-K in supplement discussion dated uncertainties XXXX, XXXX, Aspen related business Commission, April August A XX, fiscal and and the the the this Securities issued

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

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

Michael Mathews

prior of line active with the Quarterly making previously period. body, Good afternoon. our XX% guidance bookings in ended year-over-year. Today, we in increase from our XX% XX% student nursing quarter We year-over-year, delivered a on total students the up XX% earnings increased year our revenue up shared with last call. of

from led driver XX% was every the enrollment primary by quarter, a strong USU, our the increase United the with or University primarily outstanding programs. Unit, Nursing Family or growth growth also FNP Aspen Nurse and quarter delivered MSN Practitioner, in of States enrollment + the unit year-over-year, Other enrollments. saw in Aspen we doctoral While in company, University's growth

list, licensure degree pre-licensure have decision a millennials, enter as from in Aspen's a we these expectations. quarter do unit's nursing want for favorable enrollment to the first large Phoenix several looking growth campuses, students BSN macro to made our not which primarily XX%. are temper moderated year This enrollment unit, pipeline benefit year have exceeded growing at rapidly full has to conscious waiting in continues Demand prerequisite highest a profession. the program nursing we pre-licensure to first students. Phoenix Because LTV trends to our our of growth the students

Looking of meet implementation are into our of unit. that calendar on factors Phoenix double campus to there One program. our demand for cohorts is the pre-licensure positive the will half have second at impact a main year, the pre-licensure X the

semester the February University Aspen its cohort As XXXX first of implemented double start, enrollment.

program. Given that core X year the of Phoenix program Metro cohorts pre-licensure for the at prior to campus, HonorHealth program XX% from equates core over the period BSN cohort increase an main another campus, the entered entered at the the and

on detail cohorts. the further impact provide double me Let of

Aspen University in at per start has campuses annum X days both semester Arizona.

XX% demonstrates for core pre-licensure LTV rate the this first With model. core now students scale on that online program and BSN profitable for double degree run over This from is revenue cohorts $XX,XXX excludes program rate cohorts the for currently Phoenix students revenue. are on of in the year its of both main at double annually revenues which Metro high prior to and introduction enrolled. our subsequent the in from The the year potential our the impact X,XXX program, start prerequisite is over stream campus Phoenix, students the in the an track of X final at University XXX annual approximately up

Tampa, operating factor is losses XXXX, start-up programs pre-licensure campus did we campuses, we opened. as expansion Austin the the the new our launched half experienced is and Phoenix both second In we pre-licensure second in of in new metros. The whereas program the with of of

we Northcrest students these As Nashville begin growth to We're scale. marketing higher program in to program see the in clinical expansion in in most revenue X will where enrollment August programs partnership double of earlier we Tennessee, targeting our in Trustpoint first grows, year and XXXX, Hospital Nashville launch semester initial The General operational began core with benefit pre-licensure the prerequisite month. Medical our Center, is in Hospital. this recent and Nashville,

open, since successfully Nashville launched X the in locations X have we Following states will mid-XXXX.

night targets Aspen Group's The Southern locations part-time program our operational week pre-licensure We online, XXXX. full-time applied University's both working and United and pre-licensure X adults majority pre-licensure BSN needs. to majority Aspen of States the XX offer the strategic on-campus, and by strive cater program weekend learning are having traditional we BSN from which map options, throughout an days to with program students curriculum of differs day format. road Western their together or component,that's offered a day with on-campus

payment to ability addition degree popular. attaining options, life-changing very In our makes affordable work while a tuition the to program and flexible

XXXX are few at X, XX% body, in whom all As RNs is dramatic currently notable FNP The in these quarter rates we a I originally nurses XXXX months starts course USU, our the throughout earlier, infection of both in universities led what especially to student which COVID-XX of RNs. company's primarily the acceleration the nurses' see increase mentioned representing the That headwinds students growth said, lower quarter. with of students, was COVID factor due the than from registered enrollment given in total the at quarter. did the growth or this face enrollment Wave workloads late strong in we FNP of forecasted call and first to

pre-licensure was students, not unaffected. yet nurses, this Our course, are and BSN of program

impact of on have starts our class stated As would body student an call, in working we last effect anticipated nurses. our earnings within this predominantly

fiscal through this of continue expect year. balance We to that the

Given to leave course in-person or requests at clinical of X, for placement with a emergencies, to made their their reduce that that work months, that withdrawal been X upcoming they predominantly X, the pace student preferred starts, X, fell body RN made students of again; or they or wanted First, has class over to requested requests timed they found emotional temporary location, new and pressures we reasons date; time. lack understand the later their rescheduled registrations decisions absence; delay course facility their it especially to accepting and past categories: to of into program we distressed due overwhelmed our a several these for family into students

or than expected approximately historical available result, Unit per July start anticipate of X.X% growth the December anticipate body in quarter, the Nursing to our company's April current in growth quarter, University Aspen to levels, the forecast quarter our X% which in to reduced previous to adults start lower predominantly holiday enrollments and or of USU's course outperform start RN our million. is welcome $XX.X performance, industry. fourth in during $XX,XXX be seasonality news relative of fourth company's a month Nursing As Outside as $XX.X less the and addition XX. Unit. the quarter activity the approximately which to historical for our equates in all into of Consequently, typical has X% to the Aspen COVID should of to + which of we're approximately to decline ending the forecasting as also company's first fiscal to Other seasonally MSN-FNP a rollout + a includes assuming core program would This end metrics XX. scheduled. behavior COVID, saw Aspen in result, by revenue reduced course operating continue the program. the By continued And the to the the to goes XX% relative starts Other Wave the return month. quarter than MSN-FNP registrations due of be XX% of fiscal months, of core our be $XX.X decrease historical X third course approximately our May, revenue to the approximately end performance. fiscal equates we We of student vaccine the November we revenue to expected saw ending similar This USU's XX% vaccine range $XXX,XXX and to a year-over-year compared per million.

proprietary industry-leading Our yields marketing platform Edtech consistently metrics.

which Our cost we that technology refer is our a cost, as and for-profit low education sector key the differentiator of is to in or acquisition enables customer CAC. enrollment per our cornerstone the model

enrollment process most notifies our that higher in enrollment system recommends algorithm Using next enrollment prioritizes where the leads proprietary industry. advanced is and system CRM in a perhaps education is individual the Our them real-time in real-time for the the advisers step. and the

to our CAC database X therefore, a the why lead advisers, have always of is enrollment enrollment This conversion prioritized Our maximize industry. reasons the rates. the key to in lowest remains

As moderated turn, or revenue I average decision to our increase pre-licensure our per to ARPU. year restrained in flatten was previously our year-over-year enrollment bookings XX% This, to stated, due in in growth enrollment and Phoenix. overall first enrollment

X-quarter XX% as increased marketing expected, pre-licensure quarter. universities historically a in X today spending company's enrollment our to the that over margin CAC effect revenue. new As has per my in and XXx. and efficiency past to revenue investment $XX,XXX. materially launched our or remarks cost ratio EBITDA expansion rose average sequential X% marketing there $X,XXX, increased weighted result, and bookings both a increased enrollment marketing the The given while to on to X of marketing X- remained for million, BSN XX% above $XX lag had short-term ARPU representing the to metros said, a effect in complete I'll been the increased basis That in we it discussing per on by MER, our quarters,

was in Austin quarter with and an operating over in our in related the fall. stated, both the encountered to of delay Consequently, about per is we in metros strategic a aggregate in in locations spring, X within $XXX,XXX. that X delay X approval month marketing we began marketing first both it locations full of start-up process Tampa just to staffing X Florida spring, caused other. revenues, minimal previously COVID the in X and each of so we've meant Last metros year, regulatory As this new open those This plan launched our loss restrictions. the

approximately disclosed, the previously each experiences location of operation. in $X operating new first calendar of losses year to we've $XXX,XXX As million

that now that losses which X.X we been and based profit campuses generating more discuss strategic in net open XX% X.X Phoenix, will EBITDA in precedent momentarily, begin and the that as overall Phoenix. on margin pre-licensure the years, demonstrates the X and will respectively, is the in The fact these XX% or a margin pre-licensure Despite the So year over Tampa, campuses and leverage operating mature the delivered Austin have delivered a we investments. do still just Rob anticipate of was news, income EBITDA prioritize set again, $X.X in these million new for the our business why our in X This, quarter. good pre-licensure in business quarter. of

complete of processes The helping company public have performing from CFO has my the and to public former base Financial Before Officer to X to hard conduct of experience, search. our team Group our I The and controllership. with outstanding Officer. Cotroneo, Rob like team we Chief for Chief to our is a an last as interim Head a J. Aspen is oversight, CFO, company greatly Frank auditing and benefited contribution fortunate accounting in including and company building remarks, months. Rob, over while his the and Frank financial I'd big company's finance is my internal infrastructure. brings the accounting, the work finance Accounting upgrade Rob broad thank XX duties Alessi

of interviewed We year. finalize candidates our and end by our the hope far have thus excellent to decision fiscal several

the turn Please financial to to our results over for call I'll go review Rob ahead, Rob. QX. Now

Robert Alessi

third begin our third quarter Mike, Thank were by the expectations versus fourth period. afternoon, I ago good $XX.X the results for for revenues quarter, XX% million, fiscal everyone. you, quarter. year up for XXXX Total a review financial will with and the upcoming followed the of our

businesses, now BSN for account pre-licensure XX% LTV highest FNP Our Aspen and USU, of University's our primarily consolidated program, revenue.

other unit the Aspen growing University's revenues the programs quarter. doctoral company XX% in total of contributed online nursing plus our traditional includes which remaining post-licensure

our to indicated, continues highest XX% enrollments which increased be by by X,XXX. student our in revenue to As programs, overall LTV new driven Mike growth

enrollments. front up The family delivered from the given enrollments, Nursing MSN year-over-year, student to FNP Aspen pandemic. University or attributable + and on X,XXX in especially generated of XX% degree strength new the doctoral nursing professionals FNP demand is XX% practitioner, nurse Other XXX student lines United programs. primarily notable enrollments, States year-over-year, on enrollment new a the the increase University growth

University intentionally of pre-licensure campuses. of explained enrollment Mike of at currently a growth have earlier, full pipeline students. year-over-year These As Phoenix Aspen its slowed prerequisite year campuses online first

this enrollment at and were net revenues costs the period. XX% $XX.X in the General as LTV Texas. third were were against and prior compared year-over-year ago from or The $X.X pre-licensure pre-licensure by $X.X XX% or up year primarily adjusted campuses comparable in to loss in in to XXXX. million Even million, administrative $X,XXX,XXX track quarter primarily $X.X million increased increase year of the highest prior the with third compared at Phoenix revenues for marketing quarter full-time per And for million per the campus quarter, support our an the due costs $X,XXX,XXX, $X.XX the So in in of $X.X share costs or bottom quarter. of $XXX,XXX grow is perspective, loss share of net or $X,XXX,XXX prior basic loss $X.X income prior program as $X.X net $X.X USU's in of period. XX% Total The began million diluted A loss margin $X at of up percent quarter was moderated for or combined revenues. revenues a of total in $X.X adjusted the Gross the G&A of double From the net hiring and the per quarter. continues or pre-licensing of increase or to revenue Adjusted new quarter. million million, of our year XX%. compared was in our for Overall, share million $X.X fiscal programs, share G&A's of half net $X perspective, new the million cohorts million versus growth profit million in were $X.XX. of of revenue, loss from loss of long-term $X.X quarter increase growth hiring main $X.XX to revenue line loss third of $X.XX is the a unit increase revenue, instructional income million in year goal spending period. year University's where Austin, and rate faculty as as in XX% million gross $X.X will company a respectively, targeted for or loss than the costs promotional ago faculty the period. per the planned From Florida to net the was increase was of of to of year spend of net total respectively, that year the approximately net year a that a a quarter ad Aspen quarter February decision versus prior ago a the and to million and percentage result Tampa, net million versus in year well in instructional XX%, and XX%, $X.X income to metros. the the X marketing XX%. less of the in for

prior loss approximately net Finally, EBITDA adjusted of million, loss a year and to EGI capital to the our negative Austin X% related prior loss and Tampa quarter With the generated loss From University net of in loss quarter. $X.X $X.X compared of compared $X.X including Aspen or of adjusted in was a X% of as and in million for year a margin $XXX,XXX unit ramping the $X.X quarter. the million, EBITDA of net growth third third the or net perspective, our $X.X million of up a million included third million million, income $X.X expense margin campuses, a million, $X.X to adjusted in of the quarter $X.X EBITDA in quarter.

$X net Phoenix of of adjusted income program net the University. Aspen adjusted as the generated million EBITDA in and program XX% and of adjusted EBITDA generated income delivered $X.X $X an million of margin. or Pre-licensure $X.X units generated BSN EBITDA pre-licensure at Aspen's XX% million margin million

X new million net Austin $X.X $X.X million Tampa, the loss the net included EBITDA and for EBITDA adjusted million income of loss quarter. of metros, in the generated quarter. third While adjusted of USU and and $X.X

Finally, EGI and corporate of $X.X incurred a million loss EBITDA $X.X to of the quarter forecast. an million loss in adjusted fourth Shifting our quarter.

range XX% of forecast From line revenue expect share loss per expense $X.XX. range million. in anticipate to Note or the the approximately we that to the to $X.XX of $X.XX improved year-over-year the to EPS perspective, to Mike $XX.X loss loss Frank fourth net be in to compensation the and of or severance our the we're previous related includes company's $X.XX be separation XX%, in $XX.X compared bottom in $XX.X from Cotroneo's XX% As $X.XX to estimating This indicated, to agreement. million. for quarter a stock and is adjusted growth to we sequentially to EPS growth QX $X.XX

Now receivable debt on update and I'd bad our an to accounts provide like reserve.

$XX in receivable. approximately our the of subsequently, or off groundbreaking, aware, several multi-payment University. As credits the at million Aspen XXXX date, of accounts XXXX States introduced shareholders plan, of in and And last to are In MPP the of has accounts company's $XXX,XXX or United over at University years Aspen predominantly written University our receivable we've we we've X% approximately to which history, MTP, been result issued that the students. increase

not or which will a that ultimately $X.X than reserve which $XXX,XXX of written $XX X.X% is believe our that $X.X of analysis about million million, includes to date. conservative, history more collection off total that AR currently write-off need this for current bad we we Our is debt suggests million, and to

Okay.

accounts MPP X million long-term that likely specific, to accounting accounting nurse practitioner XX% accounts The of company's this $X.X million over $XX.X offered of. of USU Because X-month fiscal USU's increase. fiscal year AR plan These the to a company's increase aware of from X-year to a that The the year period XXXX XXXX. students, you as short-term To facts plan. few for this receivable receivable. be first this fiscal MPP to discuss XX% during during million, be $X.X company's let's to is recall, majority that will related X- MTP the USU year accounts months Now with of we period from of the million increased increase. receivable increased $XX.X from for with important of

I been just has in majority The collection tracking University these As while past of collection the stated, increase company at through to of students. cash nurse than the the for students is issuing credit receivable of history materially better history our students plus practitioner FNP year MPP USU. the Aspen

performed date. materially issued million. university. $XX approximately we're receivable, have that accounts which In approximately total XXXX, just In accounts recent remain explain. I total me for that remaining other million credit not only words, that million history, accounts well X% today approximately is FNP to perform up credit payment, to a students of total students FNP $X.X have the have XXX the the remaining receivable student receivable issued to XX indicated, of MPP to monthly estimating to in a Let plan. $XXX,XXX the made graduated, we XX% accounts count XX% of longer We while payment Aspen's to X-year X-year as a are XXXX of accounts $X.X makes The no USU or million date. XXX million, of those the student XXX MPP enrolled. receivable Of students. which has And of better to collected students students those the we students, $X.X in active on X.X% $XX of date

a As of strong. that credit offer USU, back shouldn't plan students the quality is surprise we so issued we look at that we come on practitioner X-year that it nurse as payment to

employed up was income the nurse a once to figures students. a event nurse practitioner of averages in X life-changing registered As they income average nurses practitioner, these are double which as U.S. be over a the can Their for becoming

$X.X used ago Moving to was in approximately our in the period. liquidity Cash $X.X million position. for operations the year million versus quarter

in average For period, cash million is $X.X per an of operations the X-month $X.X quarter. our or used million

know, timing be size quarter As can used on materially you in semester affected the cash given our starts. operations of based our for and a

million, $XX quarter unused approximately quarter the we with ended unrestricted of cash. with revolver our Together liquidity million approximately Group the $X Aspen resources. $XX in million ended of with

current improvement upon reimbursed Additionally, allowance balance on tenant our which we completion sheet of the that assets campus other the have $X.X million of will the represents build-out. be

million. of million average year call or common respect end count, by the We That concludes shares $X.X questions. liquidity fiscal of the With quarter, outstanding the at quarter versus quarter. operator ago I turn back will this end the to to either will to about of increase the weighted be XX,XXX,XXX the which reimbursed now the expect our XX,XXX,XXX number basic next, in by remarks. prepared our the our for share $X.X

Operator

[Operator Instructions].

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

Darren Aftahi

A I couple, if may.

comments curious to your about normalizing starts I'm what going Mike, sort of the of confidence beyond April. that's you just core case? gives be sort First,

Michael Mathews

month the half have first seen improvement in in far so of the of Darren, an and so February we March.

fiscal our So fourth -- that our assuming normalcy level quarter will a quarter expect registered back come continues, nurses. of to for that first improvement we sorry,

vaccinated As May. have by be end the the like adults ability knows, everyone the -- to it looks most of

And during of so our quarter. the of that's right first kind beginning

Darren Aftahi

enough. Fair it. Got

Your curious cohort. pre-licensor about, as including think one, obviously I'm EBITDA not margins, that's XX%, double exceptionally we strong.

thinking be is I with am that like the cohorts, other that? Or And where double higher we about think theoretical we margins? probably in mistaken the geographies, with ceiling about thinking business then So there? shouldn't as

Michael Mathews

No.

have of advantage, XX% I Phoenix, campuses currently. but having course, at open the of in margin, think X you're right, Darren. we We're

think up could this that quarter course, first the XXs are of in to the don't in that We XXs, that upper in be we, Now certainly the It's I margin high this we're our the not in end be that now. to into a should -- -- it's the markets. be other to same coming new mid- the possible. our possible definitely for will double margin in margin able cohort in if markets. expect XXs,

Darren Aftahi

that last Got on it. me. Frank's center with X The track And still is departure? then for even service Tampa, in

Michael Mathews

Yes, it is.

Alessi, Rob Accounting fact, our and In of in Chief is in interim Tampa well. recent and Officer Tampa, currently made as we've to relocating X hires process CFO, the

center-based with So we full moving are having in Tampa. our bore corporate

Operator

from line Our of next question comes the Austin Moldow with Canaccord.

Austin Moldow

Can cost you seeing days? per speak you're seeing also And you the talk landscape enrollment the can to new about competitive metros? these at the you're

Michael Mathews

Sure.

that one internal So year our that delivered years aware I forecast. mean, Phoenix, thing or Phoenix of X.X ago, XXX in launched double to double which probably we was in we approximately be approximately enrollments is when first

year be about Austin, enrollments second approximately we that year Phoenix campuses market before our X,XXX Tampa, X. enrollments is tracking The Austin's, consider of to point. in at course, Tier internal do as given month this X, X over at to X on operations really across a delivered forecast, exploded =we point year Phoenix XXX Phoenix was which of in sized in versus our began right a Tier is metro, which we a second as in the which,

in surprisingly, of XXX we Tampa our operations leads its nearly in few marketed ago, have launched, drove few a every similar and Austin well. We leads first in have and the our just way, first to XX expectation weeks will days, we year as in By XX days. that first perform Nashville

to a So phenomenal start. Nashville is off

of our has So markets, closer $X,XXX as more historically, I would other our of in our I program, that our as that range. probably we'll the don't enrollment I we'll a consequence Phoenix, sub-$XXX as guesstimate in In been successful be for in cost explanation pre-licensure range. be markets. other gave in $XXX is think which in of enrollments were more you, that in to we Phoenix, just

Austin Moldow

Got advisor your it. Would investment give on be and to there? expectations for update your count an you able enrollment

Michael Mathews

last the increased And center mean our have Unit beginning I Aspen -- enrollment in at side those markets. we The Nursing X and Yes. enrollment flat new USU year. groups for only the pre-licensure where at been to course, in we've, of allocated + new enrollment our traditional our our remained the our advisers Other in fiscal increase months. X X metro has advisers to of

the been XX% increase So course the the over more than has year. of modest, no

Austin Moldow

question is, your can last update here it. you for a little weekend USU? give new on locations immersion Got And

Michael Mathews

Yes.

a the we to have have X we're their ability to by plan locations. have summer So spring our that in going conduct the to students immersions

And explained the almost close done, the it's is the history, we as course, have and open, back for Tampa. in build-out first we're very, is Phoenix, location done. immersions of we million weekend and to And are in in where have just done Diego Rob that, $X.X We're we'll base, is then going set San very to conducting again finished. fact, close that to the which in get immersion up one, being So been all improvement. Immersions having now our Phoenix actually build-out getting that completed tenant weekend our our is weeks. immersions for be coming New And our location finally,

Operator

comes the with Raj next from Sharma Riley. B. line Our question of

Rajiv Sharma

So Rob, Mike in you are of I costs, just million in you million start-up $X and that for for -- earlier wanted I you said $X.XX line year. they on were X you around quarter. new think some first are estimated the And start-up to to the expect alluded -- the clarification also, costs line about the And you this wanted campuses. $XXX,XXX the next quarter same for with what in

two start-up quarter million in then the the So it on coming and $XXX costs million can $XXX clarify is you is quarter? that there campuses? this that, for And the

Michael Mathews

Well, okay.

our said for XX first breakeven, many toward and that months times the campus X there quickly it on So losses the okay? the heavily new weighted And out. the Raj, operating for takes months, a brand-new of very location to quite first are we've all, full from declined then losses

start to only of that cost our understand this Tampa. we going had and -- spending. $XXX,XXX, So basis Austin now was quarter, We're

We ago Nashville. have started a spending in weeks few

that mode. now So that are have X in X-month start-up we first locations

why about offset sort we'll will have are the that material that's we this X of campus quarter in we third $XXX,XXX our because, all revenues some But immature first lose So which start-up the in campuses Nashville. start we that another phase. in of markets, cost again, opening believe will X earning

Rajiv Sharma

start quarter, In Austin on next the earning Tampa? you'll and

Michael Mathews

Yes.

revenues locations. Tampa quarter. have earning both and enrollments in this year current in become students We've So we're Austin begun already first and in

Rajiv Sharma

cohorts from in And it. then Phoenix, you in double quarter-on-quarter Got it. doing Phoenix? improvement revenues the now double -- to on cohorts Got sequential the having can clarify

Michael Mathews

Yes.

So there's student. the the system any period annum over students, $XX,XXX it's X-year of of per a given a And three semester is -- for student period. attendance three a a cost over the for a year given

So we've it basically by first We additional take in $XX,XXX, that second cohort, semester. three as XX students each an you in that was announced, were for would divide cohort. it approximately

So that would the be math.

Rajiv Sharma

$XX,XXX divided Right. X XX,XXX each by XXx for -- the semester?

Michael Mathews

Correct.

Operator

Our from comes next Mike Securities. question the with Grondahl Northland of line

Michael Pochucha

on Phoenix campuses. first just This the for is on Maybe Mike. Michael off,

more coming expand there so the with further have see continue any like plans the You year Is capacity strong through there, the there first demand to students. you funnel? out can to

Michael Mathews

vicinity HESI entrance finish X,XXX first -- go mean, I of approximately based will of AX and credits, the rate currently somewhere of students. we And we ahead a year those exam. pass on Well, have in completion XX X/X students all the prerequisite

worth years' have university. that students to tells this So the X of us point potential our core math at in currently close we

that enrollments. in we So to to the X Phoenix location have open X, to down third We our in down in order it's first dollars but in it started our slow ago, point. those about do for -- something months wider. to order order not at slow this to get And metro pipeline in why it's we the a that's for plan could potentially year would short-term future, be even on in Phoenix marketing

Michael Pochucha

economics? Got that student differences call size, sort on it. just then competition, of And market? Sort out Any in to of Nashville.

Michael Mathews

view. Neither neither of Yes. from I significant is Nashville mean, metro Austin. like a for-profit competition a any point lot location, has

Tampa So to that, is markets those far, strong more a little are X very, competitive. very thus start. a off

leads. But of first number Nashville, is little couple market of same again, the achieve to promising. Nashville is every there dollars weeks a more spending the extremely of different. we're And So

Operator

the from Street Capital Stephan comes Lake of Jacob question next with Our line Markets.

Unidentified Analyst

Nashville the on campus. So

bigger working than around you it clinical going you Can little be more explain more a are partner, just more X Or to guys campus? need X You is just capacity? partner. do bit with a

Michael Mathews

are ability All student XX,XXX thousand for and that program that's pretty We a of us XXX our campuses in the feet. much look kind core location to square build gives that somewhere of that And size. XX,XXX has similar between range. a

a that. than have of Phoenix again, Now location larger we campus, terms in our main

we're to So that's why to go cohorts. double able

I markets they're say to would Tampa going similar-sized all Nashville Austin, and and So and programs. be similar-sized

Unidentified Analyst

to the Okay. as you as and room USU far FNP And the have guys -- expand in will then program Nashville?

Michael Mathews

we to felt the of point, San program to in at in locations this and at part immersion this we're that going future, plans four we open Austin, USU. any successfully. the this have don't at we'd for because Diego, covering but space At our each We coming to point, Tampa FNP like we're point could pretty months, Phoenix, if weekend country the have like some allocate

Unidentified Analyst

Okay.

to back CapEx little coming a this just bit, the in So $XXX,XXX quarter.

to million terms in -- million of $X campus, just of more is $X that rate? So annualized $XXX,XXX run the national

Michael Mathews

so wouldn't Right. CapEx. And be that's not -- that again,

those that status each expenses and So new that the have we're would expecting this be in at -- opening with point. to expecting -- losses of collectively, all we're operating that markets these an are immature to

Operator

Craig-Hallum Hamblin comes Our from line Jeremy Capital. with the next question of

Jeremy Hamblin

revenue bit follow-up next little about years in in several new But for the campuses ahead on the wanted year drive thinking I just here. the thinking obviously of a fiscal expand around of plan to and your investments campuses, to to 'XX. a terms couple to a base looking question

your cost marketing because going you're upfront like maybe items. line per open curved your instructional EBITDA those Is that growth should is that going promotional upstart both Given assumption? year our costs to around expectations X incur, to of campuses simply associated that probably costs adjusted be fair well which seems it as that to impact with investment a that, the you're as and going

Michael Mathews

I XX% for The of million at I income the margin Well, operations pre-licensure about. of or were Phoenix $X.X would in the delivered results that mean, the units totality what net is we say look talking quarter. the

$XXX,XXX new net-net is million, overcome of still X deliver to income a the were XX% pretty $X operating of which we in So able a expenses markets EBITDA respectable and margin.

why think result, not reason approval future top of a campuses regulatory a than we X years. those past heavier little bit terms is layered in to because And were is plan kind year. of there only which of other, this the each as are in I simply losses the slightly what So plan is on do our original Florida was the delayed

So this blip for every this plan. approach able growing. operating significant great try spring, short-term is going to And be that a suffer as I not to good a a fall. to every kind new is have open we location think us that's good a business We're losses to of

Jeremy Hamblin

to EBITDA. I adjusted I EBITDA loss basis, the my look quarter you've EBITDA, on $XXX,XXX in assumption, guess of opening QX point our but or say, and significant or fiscal backed company-wide we've obviously, you're loss in that you've shouldn't question But this a these I going fiscal But expansion Right. up $XXX,XXX of guess, at opened of campuses, I if adjusted on rounded year made is campuses. continue kind current be let's at in. 'XX QX -- in you're guess as pretty my

X that just and you going up road X then So I as is leverage expectations the you're get Is fair? term, as then and in more you as my to that or probably continue be quickly, pretty going costs near in through. see of leverage gone from closer X probably and have I to the year your it which not that I EBITDA a number of might, you're guess the total X fair would to think just at, X down really start get that XX, flow you'd growth really starting what that has it's way in X programs. I'm these assumption the getting campuses, to to But guess, here investment to

Michael Mathews

what say we're going in the bit to fourth positive you previous this level blip would I I of would a And I negative. an Yes. from is current Jeremy, breakeven to is quarters. view to EBITDA that quarter. be We've in been you, go to a adjusted back this point that to mean, say of

as us you're forecasting I in I company's not the quarters, no. expect So would would not EBITDA, results future -- forecast negative adjusted

Jeremy Hamblin

going wasn't just Okay. not saying negative. It growth. means there Yes, that significant to be I was

then whether Florida come on your whether a you've is some you markets, noted leader particular, as pricing Okay. their to models market. And to back seen did two react in into or more or not to those a moved seen that wanted get competitors And not your on Florida, competitive and you've newer I to And color I entry them price. you've Texas. into want clearly adjust markets? market, the is just

Michael Mathews

NCLEX are of in taken is relationship and if involved. Yes. is are course, say on universities that kind size you the them. where clinical No, There's again, the public a would market marketplace primarily bunch at that scores the what each NCLEX I and as, kind of unique as it's is the of There's with exams our important taken, by there's students. look well No. the associate profits. they're traditional And Florida market. whole because the Who analyzed level its for own that, a really of of the variables partners

the Florida in an and RN. that So it's to That's then of there's way. -- many unusual a NCLEX kind more market X-year associate are graduating that level from in programs, ADN become a taking an students programs

the So to would and of a a X-year associate our us is course, we've market -- the for of degree. pay similar BSN BSN with, student entered for what a cost

don't X-year come unique you're you'll rather get go you income So to that planning an someone, to our allow your associates, RN. as to, of to we're bachelors marketing say and course, which, will traditional go make challenge program when to become into Aspen this than is to higher market to that you

historically again, programs that Florida, that a market so many are unique programs. there are So is a have bit students because only nursing X-year of entered

Operator

no now for Mike questions. to the will remarks. closing There are CEO, turn Matthews, I call and Chairman further back

Michael Mathews

very good to Thank third earnings soon. Group's call you, Have We afternoon. everyone, to speaking Aspen forward you for look attending a quarter today.

Operator

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

disconnect. now may You

Aspen (ASPU) 17 Mar 212021 Q3 Earnings call transcript