Laureate Education, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Strong execution across the board for Q2 and first half of 2025; new and total enrollments up 7% and 6% respectively vs prior year, driving 9% revenue growth on timing adjusted and constant currency basis.
• Advancing operating efficiency efforts, on track to expand adjusted EBITDA margins by approx. 150 basis points in 2025. Raising full year 2025 outlook at midpoint by $55M for revenue and $16M for adjusted EBITDA.
• Two new campus openings in September on track; two additional new campus projects underway, with numerous other sites in Mexico and Peru for development over next 5 years.
• Monitored geopolitical developments in Mexico and Peru; Mexico resilient with solid financial systems, Peru's economy left recession with solid momentum.
• Academic teams in Mexico and Peru strengthening brands; UVM Mexico celebrated 65th anniversary and reaccredited, UPC Peru ranked top in Times Higher Education Impact rankings.

Segment Performance

• Mexico: Through June, new enrollments increased by 6%, total enrollments up 7%. Second quarter revenue increased 9% vs prior year period, adjusted EBITDA up 19%. Year-to-date, revenue grew 10% (7% increase in average total enrollments and 3% price mix), adjusted EBITDA up 20%.
• Peru: Primary enrollment cycle concluded with total enrollment growth of 6%. Second quarter revenue increased 7% year-over-year, adjusted EBITDA up 9%. Year-to-date, revenue increased 7%, adjusted EBITDA up 10%.

Guidance

• Raising full year 2025 outlook at midpoint by $55M for revenue and $16M for adjusted EBITDA. Total enrollments expected to be in range of 491,000 - 495,000 students (4%-5% growth vs 2024). Revenue in range of $1.615B - $1.630B (3%-4% as-reported growth, 6%-7% organic constant currency growth). Adjusted EBITDA in range of $489M - $496M (9%-10% as-reported growth, 11%-13% organic constant currency growth).
• Third quarter 2025 expected revenue in range of $375M - $379M, adjusted EBITDA in range of $78M - $82M, including $7M of unfavorable intra-year academic calendar timing.

Risks

• Global operating environment remains complex; momentum of GDP growth in Mexico depends on outcome of pending U.S.-Mexico trade renegotiations.

Q: Lucas Dai Nagano: Question related to online learning in Peru and new campuses?

A: Eilif Serck-Hanssen: In Peru, fully online working adult product growing double digits, mirroring Mexico's fully online development. Opening new campuses in Monterrey, Mexico (UNITEC brand) and Lima's Ate District, Peru (UPN brand) in September; two more campuses underway. CapEx as percentage of revenues expected to be around 5% to support growth with 6%+ enrollments growth resulting in 8%-10% revenue growth annually.