Second Quarter 2024 Earnings January 30, 2024 ©2024 Adtalem Global Education Inc. All rights reserved Safe FORWARD-LOOKING STATEMENTS ...

To be blunt, buying a Wall Street recommended stock can be a mixed bag. While we trust experts in say the legal and medical fields, it’s a different proposition in the equities space. No matter how smart you are, how many certifications you may have received, or how much time you spent pouring over charts and financials, the harsh reality is this: no one knows what will happen next.So, should you disregard a Wall Street recommended stock? Not necessarily – otherwise, there’d be no point in reading ahead, no ...

Core Insights - Adtalem Global Education Inc. (ATGE) reported strong second-quarter fiscal 2024 results, with earnings and revenues exceeding expectations and showing year-over-year growth [1][2] - The company has raised its fiscal 2024 guidance due to solid enrollment growth and effective execution of its Growth with Purpose strategy [1][8] Earnings & Revenue Discussion - Adjusted earnings per share (EPS) reached $1.23, surpassing the Zacks Consensus Estimate of $1.01 by 21.8% and increasing 51.4% from $1.17 in the same quarter last year [2] - Revenues totaled $393.2 million, exceeding the consensus mark of $374.1 million by 5.1% and reflecting an 8.4% year-over-year increase [2] - Total student enrollment rose 6.2% year over year to 81,772 students, surpassing the predicted enrollment of 77,607 [2] Segment Details - **Chamberlain Segment**: Revenues increased 8.6% to $153.6 million, with total student enrollment up 6.6% to 35,592 students. Adjusted operating income declined 10.8% to $29.6 million [4] - **Walden Segment**: Revenues grew 11.3% to $146.8 million, with total student enrollment rising 7.9% to 40,971 students. Adjusted operating income increased 3.9% to $30.2 million [5] - **Medical and Veterinary Segment**: Revenues grew 3.8% to $92.9 million, but total student enrollment declined 7.5% to 5,209 students [6] Liquidity & Cash Flow - As of December 31, 2023, cash and cash equivalents were $182.9 million, down from $273.7 million at the end of fiscal 2023. Long-term debt increased to $696.4 million [7] - Net cash provided by operating activities for the first six months of fiscal 2024 was $83.1 million, compared to $42.3 million in the prior year [7] Raised Fiscal 2024 Guidance - The company now expects revenues between $1,520 million and $1,560 million, an increase from the previous range of $1,470 million to $1,530 million. Adjusted EPS is projected to be between $4.55 and $4.75, up from $4.25 to $4.45 [8]

Adtalem Global Education (ATGE) came out with quarterly earnings of $1.23 per share, beating the Zacks Consensus Estimate of $1.01 per share. This compares to earnings of $1.17 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 21.78%. A quarter ago, it was expected that this for-profit education company would post earnings of $0.82 per share when it actually produced earnings of $0.93, delivering a surprise of 13.41%.Over the la ...

OAKLAND, Calif.--(BUSINESS WIRE)--Shares of Adtalem Global Education, Inc. dropped over 23% on January 30, 2024, after Safkhet Capital published a report alleging that the company’s business model uses deceptive tactics and pushes students into debt. Gibbs Law Group is investigating a potential Adtalem Securities Class Action Lawsuit on behalf of shareholders who lost money in Adtalem (NYSE: ATGE). What Should ATGE Investors Do? If you invested in Adtalem Global Education, visit our website by clicking ...

CHICAGO--(BUSINESS WIRE)--Adtalem Global Education Inc. (NYSE: ATGE) today reported second quarter fiscal 2024 results (ended Dec. 31, 2023) reflecting accelerated total enrollment and revenue growth, underpinned by strong profitability and high-quality academic outcomes through executing Growth with Purpose strategy. “Adtalem once again performed ahead of expectations this quarter, solidifying our position as a leading healthcare educator,” said Steve Beard, president, and chief executive officer, Adtal ...

CHICAGO--(BUSINESS WIRE)--Adtalem Global Education Inc. (NYSE: ATGE), a national leader in post-secondary education and a leading provider of professional talent to the healthcare industry, announced today it will release its fiscal 2024 second quarter results, ahead of schedule, on Tuesday, January 30, 2024, after financial markets close. The company’s earnings announcement was originally scheduled for Thursday, February 1, 2024. In light of market news today, Adtalem has rescheduled its earnings announce ...

BOSTON, Jan. 30, 2024 (GLOBE NEWSWIRE) -- Block & Leviton is investigating Adtalem Global Education, Inc. (NYSE:ATGE) for potential securities law violations. Investors who have lost money in their Adtalem Global Education, Inc. investment should contact the firm to learn more about how they might recover those losses. For more details, visit https://www.blockleviton.com/cases/atge. What is this all about? Before the market opened on January 30, 2024, CNBC reported that short seller Fahmi Quadir of Safkhet ...

In this articleATGEFahmi Quadir, chief investment officer and founder of Safkhet Captial LP, speaks during the Context Leadership Summit in Las Vegas, Nevada, U.S., on Wednesday, May 9, 2018. Bridget Bennett | Bloomberg | Getty ImagesWASHINGTON — Short seller Fahmi Quadir has found her new target: The $2 billion market cap Adtalem Global Education, a publicly traded, for-profit education company that operates institutions including online college Walden University, the nursing school Chamberlain University ...

Part I [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Adtalem's unaudited consolidated financial statements for Q4 2023 detail an 8.4% revenue increase, higher net income, and decreased total assets [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements highlight revenue growth, increased net income, a decrease in total assets, and improved cash flow from operations Consolidated Statements of Income Highlights (in thousands, except per share data) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Six Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$393,242** | **$362,834** | **$762,087** | **$717,103** | | Operating Income | $58,612 | $45,550 | $86,806 | $69,184 | | **Net Income** | **$39,891** | **$24,653** | **$50,537** | **$25,245** | | Diluted EPS | $0.98 | $0.53 | $1.22 | $0.55 | Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $182,894 | $273,689 | | Total Assets | $2,700,925 | $2,810,541 | | Long-term debt | $696,373 | $695,077 | | Total Liabilities | $1,331,526 | $1,353,205 | | Total Shareholders' Equity | $1,369,399 | $1,457,336 | Consolidated Statements of Cash Flows Highlights (Six Months Ended Dec 31, in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $92,584 | $41,415 | | Net cash used in investing activities | ($30,200) | ($12,922) | | Net cash used in financing activities | ($151,382) | ($166,420) | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes to financial statements detail accounting policies, a revenue recognition revision, debt structure, share repurchases, and a $28.5 million lawsuit settlement - Adtalem revised prior period financial statements to correct an error in revenue recognition related to certain scholarships in its Medical and Veterinary segment, now treated as a material right under ASC 606, resulting in revenue deferral to future periods[31](index=31&type=chunk) - In a lawsuit against Walden University alleging deceptive practices related to its Doctor of Business Administration (DBA) program, the parties agreed to a **$28.5 million** payment to resolve the issues, for which Adtalem recorded a loss contingency accrual[167](index=167&type=chunk) Long-Term Debt Composition (in thousands) | Debt Instrument | Dec 31, 2023 | June 30, 2023 | | :--- | :--- | :--- | | Senior Secured Notes due 2028 | $404,950 | $404,950 | | Term Loan B | $303,333 | $303,333 | | **Total Principal** | **$708,283** | **$708,283** | | Unamortized debt discount and issuance costs | ($11,910) | ($13,206) | | **Long-term debt, net** | **$696,373** | **$695,077** | - Adtalem repurchased **3,509,133 shares** for **$161.2 million** in the six months ended Dec 31, 2023, completing its 13th share repurchase program in January 2024 and authorizing a new **$300 million** program through January 2027[134](index=134&type=chunk)[136](index=136&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=52&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 FY2024 financial performance, highlighting an 8.4% revenue increase, segment growth, regulatory impacts, and liquidity management including share repurchases [Second Quarter Highlights](index=54&type=section&id=Second%20Quarter%20Highlights) Adtalem reported strong Q2 FY2024 results with an 8.4% revenue increase, significant net income growth, positive enrollment trends, and continued share repurchases - Revenue increased by **$30.4 million**, or **8.4%**, in Q2 FY2024 compared to the prior year, driven by growth at Chamberlain, Walden, and Medical and Veterinary segments[183](index=183&type=chunk) Q2 FY2024 Financial Performance vs. Q2 FY2023 (in millions) | Metric | Q2 FY2024 | Q2 FY2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $39.9M | $24.7M | +$15.2M | | Diluted EPS | $0.98 | $0.53 | +$0.45 | | Adjusted Net Income | $50.3M | $53.8M | -$3.5M | | Adjusted Diluted EPS | $1.23 | $1.17 | +$0.06 | - Total student enrollment showed positive momentum, with Chamberlain increasing **6.6%** for the November 2023 session and Walden increasing **7.9%** as of December 31, 2023, compared to the prior year[185](index=185&type=chunk) [Results of Operations](index=56&type=section&id=Results%20of%20Operations) Q2 FY2024 consolidated revenue grew 8.4% driven by enrollment, while operating income increased 28.7% but adjusted operating income decreased 3.0% due to higher costs Revenue Growth by Segment (Q2 FY2024 vs Q2 FY2023, in thousands) | Segment | Q2 FY2024 Revenue | Q2 FY2023 Revenue | Growth $ | Growth % | | :--- | :--- | :--- | :--- | :--- | | Chamberlain | $153,553 | $141,396 | $12,157 | 8.6% | | Walden | $146,808 | $131,940 | $14,868 | 11.3% | | Medical and Veterinary | $92,881 | $89,498 | $3,383 | 3.8% | | **Consolidated** | **$393,242** | **$362,834** | **$30,408** | **8.4%** | - Consolidated operating income increased by **28.7%** to **$58.6 million** in Q2 FY2024, primarily due to higher revenue and significant decreases in business integration expense (down **$7.9 million**) and intangible amortization expense (down **$6.8 million**)[217](index=217&type=chunk)[219](index=219&type=chunk) - Despite higher GAAP operating income, consolidated adjusted operating income fell **3.0%** to **$75.6 million** in Q2 FY2024, reflecting increased operational costs to support growth, higher marketing spend, and increased incentive compensation[219](index=219&type=chunk)[221](index=221&type=chunk) [Liquidity and Capital Resources](index=76&type=section&id=Liquidity%20and%20Capital%20Resources) Adtalem's liquidity, primarily from tuition, saw increased operating cash flow, with major uses including share repurchases and debt prepayments, supported by a revolving credit facility - Net cash provided by operating activities for the first six months of FY2024 was **$83.1 million**, a substantial increase from **$42.3 million** in the same period last year, driven by higher income and favorable changes in working capital[255](index=255&type=chunk) - Significant financing activities in the first six months of FY2024 included the repurchase of **$160.5 million** of common stock, contrasting with **$150.9 million** in debt repayments in the prior-year period[260](index=260&type=chunk) - Subsequent to the quarter end, on January 26, 2024, the company made a **$50.0 million** prepayment on its Term Loan B, reducing the principal balance to **$253.3 million**[263](index=263&type=chunk)[266](index=266&type=chunk) [Regulatory Environment](index=70&type=section&id=Regulatory%20Environment) Adtalem operates in a highly regulated environment, facing a lowered ED financial responsibility score requiring a $157.9 million letter of credit, while monitoring new Gainful Employment rules - Adtalem was notified by the U.S. Department of Education (ED) that its FY2022 financial responsibility composite score was **0.2**, below the required **1.5**, an expected outcome of the Walden acquisition[240](index=240&type=chunk) - As a result of the low composite score, Adtalem's institutions will operate under provisional certification with heightened cash monitoring and were required to post a letter of credit for **$157.9 million**, completed on November 1, 2023[240](index=240&type=chunk) - All of Adtalem's proprietary institutions remain in compliance with the 90/10 Rule for fiscal years 2023 and 2022, with the consolidated percentage of revenue from federal financial aid at **75%** for FY2023[249](index=249&type=chunk)[251](index=251&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=85&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk exposure were reported for the first six months of fiscal year 2024 compared to the prior annual report - There were no material changes to Adtalem's market risk exposure since its last annual report for the fiscal year ended June 30, 2023[283](index=283&type=chunk) [Controls and Procedures](index=86&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of December 31, 2023, with no material changes to internal control over financial reporting - The CEO and CFO concluded that Adtalem's disclosure controls and procedures were effective as of the end of the period, December 31, 2023[284](index=284&type=chunk) - No material changes to the company's internal control over financial reporting occurred during the second quarter of fiscal year 2024[285](index=285&type=chunk) Part II [Legal Proceedings](index=86&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings refer to Note 17, highlighting a $28.5 million settlement agreement in a class action lawsuit against Walden University - For information regarding legal proceedings, the report directs readers to Note 17 of the Consolidated Financial Statements[286](index=286&type=chunk) - A key legal development is a **$28.5 million** settlement agreement reached in a class action lawsuit against Walden University, for which a loss contingency has been accrued[167](index=167&type=chunk) [Risk Factors](index=86&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor addresses the potential impact of short-seller reports, including a recent one that adversely affected share price and could lead to legal or regulatory actions - A new risk factor was added regarding the company's potential vulnerability to short-selling strategies, which can drive down the stock price and create negative market momentum[287](index=287&type=chunk)[288](index=288&type=chunk) - The company specifically mentions a short-seller report published on January 30, 2024, which adversely affected its share price and could lead to costly legal or regulatory actions and distract management[289](index=289&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activity, with 1,350,735 shares repurchased at an average price of $51.31 during the quarter Issuer Purchases of Equity Securities (Q2 FY2024) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2023 | 711,096 | $44.60 | | Nov 2023 | 259,045 | $56.39 | | Dec 2023 | 380,594 | $60.38 | | **Total** | **1,350,735** | **$51.31** | [Other Information](index=87&type=section&id=Item%205.%20Other%20Information) On January 26, 2024, Adtalem amended its Credit Agreement, reducing the Term Loan B interest rate margin and making a $50.0 million prepayment - On January 26, 2024, Adtalem amended its Credit Agreement, resulting in a **0.50%** reduction in the interest rate margin for its Term Loan B borrowings[295](index=295&type=chunk)[296](index=296&type=chunk) - In addition to the repricing, Adtalem repaid **$50.0 million** of its Term Loan B, reducing the outstanding principal to **$253.3 million**[297](index=297&type=chunk)