Covista Inc. Q4 FY2024 earnings call

• Expanded reach and amplified impact through Growth with Purpose strategy, integrating institutions for efficient operating model. - Data-driven marketing strategies led to double-digit growth in enterprise inquiries. - Total enrollment returned to growth, ending fiscal 2024 with a 10% year-over-year increase in the fourth quarter. - Revenue for fiscal 2024 was $1.58 billion, up 9.2% year-over-year. Adjusted EBITDA margin was ~24%, adjusted earnings per share $5.01, up 19% year-over-year. - Generated $239 million in free cash flow and returned $261 million to shareholders.

Chamberlain University: Fourth quarter revenue was $167 million, a 15.6% increase year-over-year, driven by enrollment growth. Total student enrollment increased 10.4% for the quarter. Adjusted EBITDA was $47.3 million, with a margin of 28.3%. Walden University: Fourth quarter revenue was $156.3 million, a 13.3% increase year-over-year, driven by strong enrollment growth. Total student enrollment accelerated 11.3% year-over-year. Adjusted EBITDA was $41.1 million, with a margin of 26.3%. Medical and Veterinary segment: Fourth quarter revenue was $86.6 million, a 5.4% increase year-over-year. Total student enrollment decreased 2.9% year-over-year, but remediation plans were showing positive results.

• Fiscal year 2025 revenue projected to be $1.66 billion to $1.7 billion, ~5% to 7.5% growth year-over-year. - Adjusted earnings per share projected to be $5.60 to $5.85, ~12% to 17% growth year-over-year. - Anticipate approximately 100 basis points adjusted EBITDA margin expansion from enhanced operational leverage.

Q: How much of the admissions growth was driven by marketing spend and will you still get leverage in FY '25 if you slow down marketing spend?

A: Overall total enrollment gains were driven by a combination of new enrollment and persistence. Think we've got real momentum on the heels of brand campaigns and can sustain enrollment growth without material additional marketing investments beyond ordinary course.

Q: Characterize the current demand environment relative to a more normalized view for students?

A: View is that the demand environment for students normalized last year; there was a one-time reset post-COVID, but now operating in normalized demand environment and expect to continue taking share into fiscal '25.