Adtalem Global Education Inc. Q4 FY2025 earnings call

• Fiscal 2025 was a defining year with Growth with Purpose strategy delivering outstanding financial results. Revenue reached $1.79 billion, up 12.9% Y/Y. Adjusted EBITDA margin expanded 190 basis points to 25.7%. - Reengineered institutional footprint around a unified model for operating leverage and profitability. - Leading in marketing innovation, driving higher conversion at lower acquisition costs. - Deploying student-facing technologies and AI-powered learning tools. - Chamberlain had 5.8% enrollment growth, Walden had 15% enrollment growth in Q4. - Partnership with SSM Health for direct employment pathway for students. - Recognized as opportunity colleges/universities by Carnegie Foundation.

Chamberlain: Fourth quarter revenue was $184.3 million, up 10.3% year-over-year, with total student enrollment up 5.8%. Adjusted EBITDA decreased by 4.8% to $45 million. Walden: Fourth quarter revenue was $182.2 million, up 16.6% year-over-year, with total student enrollment up 15%. Adjusted EBITDA increased by 28% to $52.7 million. Medical and Veterinary: Fourth quarter revenue was $90.6 million, up 4.7% year-over-year, with total student enrollment up 1%. Adjusted EBITDA increased by 21.7% to $20 million.

• Fiscal 2026 guidance: revenue $1.90 billion to $1.94 billion, adjusted EPS $7.60 to $7.90. - Anticipate revenue and EPS growth to be slightly higher in first half of 2026 than second half due to Walden's academic week shift. - Plan to reinvest in student-facing technology and marketing, with revenue growth expected to outpace investment growth, resulting in adjusted EBITDA margin expansion. - New $150 million Board authorization for share repurchases through May 2028.

• Regulatory risks such as loan caps and changes in federal student loans, but management doesn't see dampening demand for programs; grandfathering provisions protect current students. - Political/regulatory changes from acts like the One Big Beautiful Bill Act, but positioned to manage these.

Q: What's driving share gain at Chamberlain and Walden?

A: Flexibility of programs (e.g., BSN options), commitment to student success, and strong relationships with employers.

Q: Long-term growth focus and buyback plan?

A: Secular demand trends in healthcare programs, investments in marketing, enrollment, conversion, programs; buybacks with $150 million authorization through May 2028, with timing tailored to optimal investment times.

Q: Marketing success and Walden's growth?

A: Evolution of brand strategy, better name awareness, segmentation in marketing; Walden's many programs contribute to its growth, with 100+ programs offered.