UNIVERSAL TECHNICAL INSTITUTE INC Q2 FY2025 earnings call

• Regulatory developments: Lines of communication with the Department of Education have strengthened, and expansion plans remain on track. - Macro environment: Demand for skilled labor in trades and healthcare is strong, benefiting the business. - Q2 results: Revenue and adjusted EBITDA outperformed forecasts. Revenue was $207.4 million, up nearly 13% y/y. Average full-time active students grew over 10% y/y. - Division highlights: Concorde continued growth with marketing investments, program expansions (e.g., nursing programs, short courses), and campus relocation. UTI saw strong year-over-year improvements with program expansions (e.g., EEIT program), plan to open three campuses in 2026, and optimization efforts. - Leadership changes: Bruce Schuman joined as CFO, Todd Hitchcock promoted to COO, Adrienne DeTray joined as CIO. - North Star Strategy: Operationally, launch at least six new programs annually and open at least two new campuses annually. Financially, aim for revenue over $1 billion by 2029 and adjusted EBITDA margins approaching 20%.

For the second quarter, consolidated revenue increased 12.6% year-over-year to $207.4 million. The Concorde division contributed $73.2 million, an increase of 20.3% over the prior year quarter. The UTI division contributed $134.2 million, an increase of 8.8% over the prior year quarter. Average full-time active students for Concorde increased 15.5% year-over-year to a certain number, and for UTI, it grew 7% year-over-year. New student starts for Concorde rose 15.9% year-over-year, while for UTI, they grew 26.4% year-over-year.

• Raised fiscal 2025 revenue guidance to $825 million to $835 million, reflecting ~13% y/y growth. - Adjusted EBITDA guidance raised to $124 million to $128 million. - New student starts expected to be between 29,000 and 30,000. - Anticipate Q3 and Q4 revenue growth rates in line with full-year guidance, with Q3 starts growth in mid to upper single digits and Q4 likely low single-digit growth. - Full-year net income expected to be in the range of $56 million to $60 million with diluted EPS between $1 and $1.08.

Q: Very strong new starts, any campuses or programs to call out? And what are the tailwinds?

A: Jerome mentioned strong growth in clinical courses on the Concorde side and skilled trades on the UTI side. Tailwinds include more focus on trades over 4-year colleges, job demand, and administration support.

Q: How does enrollment growth break out for UTI and Concorde in the third and fourth quarter? And was the new start guidance driven by one segment?

A: Jerome discussed that Concorde's higher double-digit growth may become challenging due to capacity on clinical courses, and UTI's growth in the rest of the year relates to high school and skilled trades. Guidance was driven by both segments.

Q: Comment on EBITDA trajectory, especially OpEx and CapEx investment?

A: Bruce Schuman mentioned $6 million of growth OpEx in the second half of the year, $55 million CapEx spend for the year with 70% focused on growth, and details on future investment plans.