ATGE - Earnings call transcript Q2 2025 | Adtalem Global Education Inc.

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Operator

Greetings, and welcome to the Adtalem Global Education Second Quarter 2025 Earnings Call. [Operator Instructions] I will now turn the conference over to your host, Jay Spitzer, Vice President of Investor Relations. Thank you.

You may begin.

Jonathan Spitzer

Good afternoon, and welcome to our earnings call for the second quarter fiscal year 2025 Results.

me of Steve Bob Adtalem Financial with Chief Chairman Phelan, call Officer. Officer Executive Global the today Beard, are and Chief On Education, and

could risks take Steve, hand on declarations. cautionary our results obligations vary uncertainties this as factors We to a are and presentation our and and of changes results materially. update a competitive forward-looking will over constitute I see future to Form statements legal regulatory to after relate current Please of are events, in Before new latest as whether harbor for cause market, discussion statement in you XX-K, to of actual Certain subject usual otherwise. XX-Q statements. expectations undertake based made you assumptions projections and forward-looking to information, future risk safe that publicly to no any I presentation, or that result and forward-looking Form this statements

certain measures. directly comparable Investor measures use reconciliations most Relations the we our presentation, related information. for and non-GAAP website on you today's We to GAAP presentation available financial In for materials the refer financial

webcast the investors.adtalem.com. will webcast You Relations be at Investor to the you over After hand will now website on presentation will this the on archived for website XX call, I find link a our days. Steve. to

Stephen Beard

clinicians across preparing meeting the urgent who our of we're of on, results and Through family by crisis challenges. exceptional to Adtalem workforce is challenge X nation's generation how delivering communities share the transforming health this good excited the education Thank I'm serve will most and of care in Today, you, our America country. everyone. afternoon, process. remains institutions, health next head care in The

share consecutive $XXX by margin isn't Total XXth results quarter our XXX improving that We points driving to a XX,XXX students, adjusted was to Revenue accelerating. second EBITDA adjusted now expanded $X.XX Our XX% our increase grew and for over enrollment up per by per the XX% quarter. year-over-year, serve in share. just working, XX.X% million. strategy earnings it's basis validate

just numbers. And social to health while workers percentage impact. achieving and Every where desperately unwavering maintaining student needed. of this quality more aren't mental These real our professionals growth inclusive access, growth They entering nurses, they're means we're represent communities doctors, and point academic success. commitment

impact. me of concrete largest level Let school how some XX.X% share the of up innovating Chamberlain country's our expand we're enrollment. to is University, another examples to nursing record total

than to with offered online XX goal of now clinical in more by closer Our XXXX. the our continues more offering students we're end And our University Bringing hub making of a our across states, BSN nursing XX has XX experience metropolitan if XX the clinical in enrollment drive campus up XX.X%. students states. and with XX accessible. year education Walden physical hubs programs quality locations, areas program qualified add locations fiscal to you to

seeing to new Get is resonating we're campaign Our launch early student encouraging December, engagement. in since W

our new half nearly scholarship, and areas. provides as mental award of undergraduate Americans complete success. student persistence We're our graduation also through their innovative In degrees, and live like workforce health, expanding which as our offerings who financial support also shortage believe for in where students clarity rewards underscoring achieve for well access

we top in aspiring mental practitioners nurse Our And practitioners in impact is and and today, health psychiatric XXXX particularly combined. graduated programs. have nurse XX striking. programs X,XXX mental over Walden other together Chamberlain more our all health

seeing period, In demand that but initiatives and isn't are up quarter with encouraging we're an year-over-year. medical enrollment veterinary second working segment, enrollment our January signs our the new

education. of showing student the positive growth efforts us near We're integration leading hospital are and our USMLE and prep partners Our also in term. health for the clinical return home positioning offering care results, with our enrollment AI

tools in AI clinicians patient Karen Hippocratic difference Spencer, and care make Cox a care. skilled pioneering with and Dr. that X leaders, real AI infant can producing Chamberlain Casey diabetes is partnership are Dr. AI in of Our for practical our applications and already safety

continue accelerate Michael Betts, Customer innovation higher Walden that while next leadership of now as former Adtalem's our experience who University all exactly succeeds enter institutions our XXXX. this integration pleased transformation Chief and need and will phase efforts, and Michael strategy He our and in role vision AI to expanded Digital Officer, on serve digital Steven Officer. University, across I'm Tom, operations. To Chief Walden strategic taking President will the of announce Michael his late we departed guiding of digital education. we brings also as this execution successful

We Given raising billion now guidance. and per revenue our expect share $X.XX $X.XX we're to performance, billion $X.XX our adjusted $X.XX. XXXX with of fiscal earnings between strong

be me results. what Let clear drives these about

addressing most high their we're outcomes. shortages our allocation. resource impact scaling framework, systematically integrity, patients and Our excellence value access improvement it's we're to while change to about important, continuous the and operational careers. process its us growth millions of maintaining we delivering strategy they'll critical of with student serve At lives. students our how efficiently in how disciplined excellence purpose it quality our more rigor It's This enables workforce fundamentally throughout Those to shareholders. And and expand core, it's an is to guides execution, while do. rigorous operational education everything

Adtalem's potential Every see to change day, the face of I health care.

the make scale, and importantly, to mission-driven the it innovation team have We happen. most the

our to invest returns growth look in we'll the ahead, we As while delivering shareholders expect. continue

that, with it our for turn into to dive over I'll results. And a Bob deeper financial

Robert Phelan

everyone. hello, you, Thank Steve, and

investing unlocked growth financial and execution organic cash our us Consistent the our second has balance of our business returns our providing robust growth, our returning yields. that the cash owners. ability in generation, strategy sustainable and to growth Our balance returns showcase strategy quarter to sheet with for purpose results ,strengthening

the our results expectations for drivers discuss for with of XXXX. will and strategic quarter. begin initiatives in by enhanced the Revenue line. driven our my XX.X% our and through financial to top of remarks, the quarter review our by performance as second enrollment key Chamberlain million increased assumptions X at remainder $XXX.X I'll I our a and fiscal the second trajectory. year growth Walden, in all Later in particular, segments, with in Starting

and from the which operational last point EBITDA segments $XXX to all Consolidated operating investments million, increase at profit growth by compared of was generated revenue $XXX.X in strategic leverage partially efficiencies up in Walden and EBITDA compared offset million, led XX.X%, basis X from the year. year came income was resulting XX.X% an Adjusted year up in margin prior a growth to initiatives. as prior XXX adjusted adjusted Chamberlain, in by XX.X% our

was with debt repurchased XX.X Adjusted attributed year XX.X% was compared offset to income shares interest partially quarter a million year. up than adjusted lower XX.X% last borrowing taxes. costs, growth our actions operating higher compared or million shares from lower for increase the per for a lower We the prior or last income quarter resulting $X.XX second $XX.X to outstanding common in of stock the by within net a XXX,XXX our outstanding diluted X.X of share earnings and quarter, expense million, our resulting income year. reduce to Adjusted and provision

growth revenue nursing quarter quarter XX.X% of highlights compared the in to prior was year, the second basis year as primarily prior quarter. in the our which to strong for in growth. the XX.X% of leverage at of financial on enrollment. by focus and points reported in-demand great increased higher prior Next, improving by support driven I'll Total operational segment. triple enrollments digits and second consecutive post-licensure Adjusted the quarter. pre-licensure over with than our when ongoing our discuss and quarter million online XX.X% offering, increase student $XXX the the of by the example academic students outcomes. growth compared the $XX.X enrollments million, XXX an Adjusted A eighth increased both program outpaced is to year-over-year our enrollment EBITDA BSN year, into quarter during margin XX.X% our grew investments Chamberlain EBITDA

at on from moving first Chamberlain provide this I'd year-over-year color investment. the leading to year, marketing dynamic investment leverage In to increased Before we marketing of purposefully quarter Chamberlain, fiscal position. our our our on additional like

quarter, This profile. flat year-over-year EBITDA has Chamberlain in our year-over-year in quarterly was our which fluctuations investment marketing adjusted resulted margin

capital flexibility fluctuations result. at in times, be quarterly will deploying a as to attractive rates have be generate margin returns. continue there to And We opportunistic when the to

Walden. to Turning

driven expanded Second $XXX.X million of leverage, strong in accelerated XX.X% Adjusted quarter rates. by basis EBITDA growth nursing also was the increase to enrollment our growing Within prior with outpaces and $XX.X to and enrollments. in margin as levels health student revenue prior a our the and our compared by and long-term XX.X% efficiencies operational margin support in programs, of an and programs year, the Total care million, up year persistence to led the versus by with additional by enrollment year health student growth, points adjusted increased creating high of and from commensurate XX.X% continued the versus healthy excellence social the EBITDA quarter, prior particularly XX.X% quarter. care growth robust high contribution degrees non-health was new undergrad behavioral XXX in the focused the enrollment. masters investments generates student-facing that

X.X% segment, veterinary revenue quarter second the medical the to million. For increased in and $XX.X

We EBITDA the while generally capture current XX%. continues EBITDA lower compared As the student quarter no existing application margin X.X% to cost operate seat our structure points medical by remain We to schools. the capacity available focused for student making high increased the Steve well year long-term represented leverage Adjusted to versus with mentioned, at believe capacity. basis at And student a XX there prospective our enrollment by Vet near first in to operating enrollment a investments Adjusted Ross quarter. ratio. in million. level change is that we're medical second our with school the institutions prior to positioned to the was line on demand on total growth $XX.X

application students creating to we member student experience website, remain a the process, first institution's becoming map XXX,XXX out to a institutions, education through alumni all community. of all visit they Across our from them the navigating focused strong their way prospective a as on approximately pathway assisting our seamless

and cash to sheet. shifting flow Now balance

operational impact enhance our We through reach investments robust trailing our enhance to On and from expand organic care student a deployment. continuing free our strong to to basis, cash disciplined XX-month commitment strength while performance, health generation flow financial by $XXX amplified outcomes. continue and cash million was capital

the Our remains a low second cash net adjusted with leverage of and million $XXX EBITDA quarter ending sheet healthy, in balance X.Xx.

quarter $XX our which balance during XX, our letters on shares the outstanding at XXX,XXX remaining. million was share. of credit approximately to by continuing a net a authorization, reduced December repurchased million. $XX existing On a repurchase $XXX share execute We has

$XXX which end, we interest million on million. After XX, $XXX balance, is IV credit of quarter million. which further XX% letter the repaying new XXXX, balance represents strengthened B the our reduces Loan funding January our higher outstanding Title Term our Our $XXX.X balance sheet, rate of on to

set of an first It's efficiencies year strategy, expectations year XXXX. relentlessly of been we half our ahead heading greater execute our as the growth into with exemplary creating scale. fiscal and purpose original

range we growth the As billion, to with year-over-year. the are a XX% of guidance to adjusted raising X% approximately in share $X.XX XX.X% revenue to $X.XX growth billion result, of With to earnings year-over-year. now our approximately $X.XX, per XX.X% $X.XX

For basis expansion an new the the EBITDA We effective than XXXX. approximately points anticipate incremental guidance continued margin in XXX year. revenue year efficiencies year, tax for In adjusted is along rate XX% turn, level, fiscal leverage. adjusted fiscal of anticipate we operating our with now resulting of in full greater

to approach balanced our for to value aiming generate long-term deploy maximize high continue returns stakeholders. will to allocation, all capital capital and to We

optimal As our our deliver top expanding access positive and on priority student capacity we our mission inclusive remains as institutions reinvest into a execute of this achieve part approach, to outcomes. to

to with for the call And I'll now that, turn Q&A. over the operator

Operator

Instructions] And our with you. Research. comes question Alex from Thank [Operator Barrington Paris first

Alexander Paris

another on strong quarter. Congratulations

going XXX heard EBITDA First is was adjusted expansion. you guidance ask raised basis The question. going revenue the to of to to you from and in I the Bob, get greater points question relating guidance, leverage I than that margin operating result and

leverage XXX operating Investor XXXX basis XXXX, in thinking do to points we sort plus? Just back and that Day expect of beyond in

Robert Phelan

anticipate plus points 'XX, basis Yes. we've say still above that's do fiscal just I raised and in XXX what here fiscal we would in 'XX.

Alexander Paris

changes the regulatory second, late last we the Got remiss an And your or was I'd the to I had had Since terms election. coming be feelings we've then, in in if didn't great. then in Trump you. likely that ask about And Administration regard call conference environment. with not October. and That's of

Stephen Beard

now. and a also we overhang not We shortages about our the address near know about and is in the her will and team in I students Well, we think position look to is the consensus, but we're think general subject getting industry Alex, be but that settled chronic lighter, opportunities forward that about speculate future regulatory her to accountability, health We her transparency expanding that think to that how into to the role. to serve care. with engaging about workforce in how is

So but to with more count, we're engaging to that new the looking on come forward secretary.

Alexander Paris

then just the miscellaneous vet trends look enrollment question. plans. I to get a there's That's a hear I I regard did second data an the the not trimester great. Med you wondering the last say in if quarter it's on basis. And ause basis because on semester January a can remediation or positive. update we question, guess was that just enrollment With

Stephen Beard

do. They

We by. continue to be encouraged

we've across fantastic we strength expanding . competitive our got And medicine, But obviously, those and for health. medicine, all strategies products. positions veterinary of we've of behavioral moat are what nursing think got long-standing in

Operator

Our Steven Pawlak with from comes Baird. next question

Steven Pawlak

and the that I for guess, half growth guidance good, half been driving revenue to implied what you consider in that that terms about and are But talked step-down implied growth, the On or we rate? second of what's are need performance. sort second in the first factors of half really contemplating of some maybe the factors, has you obviously,

Stephen Beard

let I'll some color. and start, Bob I'll additional add

that we've second a guide, quarter the think in Obviously, we are got risk-adjusted more comps do on in the you we position the a That's the basis. I part know this when year. raise half challenging we So are as to of dynamic. of

so would And we that thoughtful, adjust the and clear quarter half information quarter But at to incrementally jump were the get commentary, in half, obviously slower subsequent of but we beginning know new quarters, color. difficult I comps we be that in before of got just further. any be the we're and with free the year. prudent to year the if first. But the Bob's second back signaled and the we'll that, in looking we've feel than more additional fiscal last fiscal in Bob,

Robert Phelan

No. back of is a strong do The the year. add still only thing would half we that have I

terms of growth, slightly the the strong first the still at we X% a half. it provided, XX% to to does for of to year, So below although have getting . back guidance in we're the us half require where

Steven Pawlak

provide -- growth to terms kind being these on strategy? incremental? in with incremental Anything what's is then of maybe digital of with. transformation color guess, accelerate is of And that like digital Okay. the of beyond what's done, that sort you purpose guess of initiatives? And alluded can there is it you some there opportunity I is a, I to the And

Stephen Beard

question. the appreciate I Yes,

X we're get more have year articulated half So dependency. the driving back we initiatives in which X-year as And more we've with we're a strategy. strategy, and of of purpose, as the into incrementally tech that a growth of

digital as he it but comes center and leader runs consumer services it those responsibility as only so our a of institutions. for not And a have was someone excellence technologist, a an marketing who of at at time to X he a really comes our take opportune Michael of it as actually is because

to we the are initiatives And assurance an so ones we're back-half purpose execute the core well initiatives a that, first to technologist all be that better able data tech-focused product tech that And take the than both that half going as . that us as charge operator or he'll stack perspective growth against those ran and strategy. are in well of to gives that this our engineering, bring of as innovation of it'll of and our greater activities. our our science, which particularly

Operator

that, parties with call. for And All today's may disconnect. Instructions] will your participation. we now conclude you conference Thank [Operator

Adtalem Global Education (ATGE) 30 Jan 252025 Q2 Earnings call transcript