LAUREATE EDUCATION, INC. Q3 FY2026 earnings call

• Strong Intake Results: New enrollments increased 8% year-over-year, driven by successful launches in new campuses (Puebla) and strong demand for fully online programs in Peru.
• Growth Levers: Management highlighted three core drivers: same-store growth via market share gains, geographic expansion into new cities/campuses, and scaling the fully online portfolio for working adults.
• Campus Expansion: Three new campuses opened since start of 2025; Southern Lima campus opening Q1 2027 and Merida campus prior to Sept 2027 intake. A multi-year pipeline is secured for accelerated openings in 2028.
• Macroeconomic Environment: Mexico’s economy shows improvement with record FDI and GDP growth of 2.1%. Peru’s outlook is supported by stable economic policy post-election and strong mining sector demand.
• El Niño Preparedness: Operations in Peru are better prepared for potential El Niño disruptions due to improved government infrastructure and the resilience of hybrid/online delivery models.
• Financial Performance: Q3 revenue was $485M (+6% constant currency) and Adjusted EBITDA was $147M (+14% constant currency), aided by favorable foreign exchange rates.

The provided transcript does not break down revenue or financial performance by specific product segments (e.g., Online vs. Face-to-Face) in absolute dollar terms or percentage contribution. It reports consolidated Total Revenue of $485 million and Adjusted EBITDA of $147 million for Q3 2026. Geographic breakdowns are provided: Mexico contributed to an 8% new enrollment growth and 6% constant-currency revenue growth; Peru contributed to a 9% new enrollment growth and 6% constant-currency revenue growth.

• Full Year 2026 Reaffirmed: Total enrollments expected at 518,000–523,000 students (+4% to +5% YoY).
• Revenue Guidance: Full-year revenue projected at $1.92 billion–$1.93 billion (+13% reported / +6% to +7% constant currency).
• EBITDA Guidance: Full-year Adjusted EBITDA projected at $593 million–$599 million (+14% to +15% reported / +8% to +9% constant currency).
• EPS Guidance: Full-year Adjusted EPS expected at $2.04–$2.10 (+19% to +22% reported).
• Q4 2026 Specifics: Revenue expected at $546 million–$556 million; Adjusted EBITDA at $198 million–$204 million. This reflects a ~$20 million unfavorable academic calendar timing shift and negative FX impact compared to previous guidance.
• Capital Allocation: Board authorized an additional $150 million stock repurchase program, bringing total available authorization to $225 million.

• Foreign Exchange Volatility: Recent weakening of the Mexican Peso and Peruvian Sol against the US Dollar has eroded Q3 FX tailwinds, creating headwinds for Q4 results.
• Academic Calendar Timing: Intra-year shifts in class start dates cause revenue and expense recognition timing differences between quarters, impacting comparability.
• Attrition Rates: Higher attrition in the fourth quarter, particularly among the growing fully online student base in Peru, impacts final enrollment counts.
• New Campus Dilution: Opening new greenfield campuses currently dilutes margins by approximately 50 basis points in Mexico and 25 basis points consolidated due to initial costs before cohorts fill.
• Competitive Pressure: Increased competition in Peru’s online segment, including price cuts by rivals, though Laureate maintains advantage through brand strength and product quality.

Q: Analyst asked about the operational impact of the two other new campuses opened this year (besides Puebla) and their contribution to enrollment growth.

A: CEO clarified that while Puebla performed ahead of expectations, the other two campuses (Lima-Oto and Monterrey) are in their second year of operation. They are contributing normal organic growth rather than 'new' intake impact, as they already hold existing cohorts. These campuses take 4-5 years to fully fill capacity but contribute positively to total enrollment volumes.