Core Viewpoint - Laureate Education, Inc. is set to release its financial results for the quarter ending June 30, 2025, on July 31, 2025, prior to the stock market opening, followed by a conference call to discuss the results and business outlook [1]. Group 1 - The conference call for investors and analysts will take place at 8:30 a.m. ET on the same day as the earnings release [1]. - Interested parties can register to receive dial-in information for the earnings conference call [1]. - A webcast of the conference call, including replays, will be available on the Investor Relations section of the Company's website [2]. Group 2 - Laureate Education, Inc. operates five higher education institutions in Mexico and Peru, with an enrollment of over 470,000 students in various degree programs [3]. - The Company emphasizes academic quality, innovation, and aims for market-leading employability outcomes while making higher education more accessible [3]. - The Company believes that the success of its students contributes to the prosperity of countries and benefits societies [3].

Summary of Laureate Education (LAUR) FY Conference Call Company Overview - **Company**: Laureate Education - **Industry**: Higher Education Services - **Geographic Focus**: Mexico and Peru - **Market Position**: Largest operator of higher education services in both countries, significantly larger than competitors [3][4] Financial Performance - **Revenue**: $1.6 billion with a growth rate of approximately 10% annually [4][28] - **EBITDA Margin**: Close to 30% [4][28] - **Student Enrollment**: Approximately 500,000 students across 50 campuses, averaging 10,000 students per campus [4][5] - **Free Cash Flow**: 50% of EBITDA converts into free cash flow, with plans to return excess cash to shareholders [28][29] Market Dynamics - **Private Sector Role**: 55% of university seats in Mexico and Peru are provided by the private sector, which simplifies the regulatory environment [6] - **Student Segmentation**: Market segmented into premium and value products, with premium offerings costing around $4,500 per year [9][10] - **Growth Drivers**: Rising participation rates in higher education, currently at 36% for ages 18-24 in Mexico and Peru, compared to 62% in the US [18][19] Strategic Focus - **Program Offerings**: Focus on business, health sciences, engineering, and STEM products, with a mix of traditional, hybrid, and fully online delivery methods [5][15] - **Market Expansion**: Plans to launch two new campuses this year and two more next year, targeting top cities for growth [21][25] - **Vocational Training**: Development of technical vocational degrees to address skill shortages, particularly in the employer demand perspective [26] Competitive Advantages - **Brand Strength**: Institutions like UPC in Peru are highly ranked, contributing to strong brand equity [13] - **Accreditation and Quality**: High accreditation levels and quality of education enhance the institution's reputation [13][15] - **Cost Efficiency**: Segmentation allows for cost-effective student acquisition and recruitment [11][12] Economic Resilience - **Bad Debt Management**: Maintains a low bad debt rate of around 2.5% in good economic times, with potential increases during economic downturns [32][33] - **Cash Flow Stability**: The payment structure ensures steady cash collections, contributing to a working capital neutral position [31] Shareholder Returns - **Capital Returned**: Since 2019, $3 billion returned to shareholders through stock buybacks and dividends [29] - **Future Intentions**: Plans to continue returning free cash flow to shareholders, with an expected generation of $235 million in free cash flow this year [29][30]

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Industry Overview - The Zacks Schools industry is experiencing a rebound driven by increased demand for career-focused programs in healthcare, skilled trades, cybersecurity, and IT, supported by a labor market that values job-ready skills and government initiatives promoting non-degree pathways [1][4] - The industry is addressing the critical shortage of healthcare workers through rigorous, workforce-aligned training programs [5] Trends Influencing the Industry - Digital innovation is a key driver of differentiation, with companies investing in adaptive learning tools and scalable online platforms to enhance engagement and support flexible learning for working adults [2][7] - There is a rising demand for workforce-oriented programs, particularly among adult learners and career switchers, as the labor market increasingly values job-ready skills over traditional degrees [4] - The sector is witnessing consolidation, with larger players acquiring niche or financially weaker institutions to expand offerings and improve scale [6] Financial Performance and Market Position - The Zacks Schools industry currently ranks 30 within the broader Zacks Consumer Discretionary sector, placing it in the top 12% of over 250 Zacks industries, indicating strong near-term prospects [10][11] - The industry's earnings estimates for 2025 have increased to $1.38 per share from $1.37 since April 2025, reflecting growing analyst confidence in the group's earnings growth potential [12] Enrollment and Revenue Growth - For-profit providers are expected to see enrollment and revenue growth in 2025, driven by demographic tailwinds, state and federal support for vocational education, and digital innovation [2] - Companies like Stride, Inc., Laureate Education, Inc., and American Public Education, Inc. are positioned to benefit from these trends, with significant enrollment growth reported [21][29][25] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings ratio of 16.86X, compared to the S&P 500's 21.81X and the sector's 19.73X, indicating potential undervaluation [17][20] Company Highlights - Stride, Inc. reported a 20% rise in total enrollment, with a 12.8% increase in General Education and a 32% increase in Career Learning [21] - American Public Education has seen a 60.2% stock increase over the past year, with earnings expected to grow 150.9% in 2025 [25] - Laureate Education's fully online programs account for about 20% of its student base, growing at three to four times the pace of face-to-face programs [28] - Perdoceo Education has benefited from a 10.6% enrollment increase at Colorado Technical University, driven by strong student engagement [32] - Lincoln Educational Services has achieved an 82.4% stock increase over the past year, supported by strong enrollment growth and operational efficiencies [36]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Summary: Laureate Education (LAUR) - LAUR currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] - Over the past week, LAUR shares increased by 2.65%, outperforming the Zacks Schools industry, which rose by 0.41% [5] - In the last month, LAUR's price change was 16%, compared to the industry's 13.14% [5] - Over the past quarter, LAUR shares increased by 10.69%, and over the last year, they gained 39.48%, while the S&P 500 moved -3.42% and 14.16%, respectively [6] - The average 20-day trading volume for LAUR is 794,663 shares, indicating a bullish sign with rising stock prices [7] Earnings Outlook - In the past two months, two earnings estimates for LAUR have increased, while none have decreased, raising the consensus estimate from $1.58 to $1.67 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions [9] Conclusion - Considering the positive momentum indicators and earnings outlook, LAUR is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for near-term investment [11]

Financial Data and Key Metrics Changes - The first quarter revenue was $236 million, with adjusted EBITDA of $5 million, both metrics exceeding previous guidance [18][22] - On an organic constant currency basis, revenue increased by 10% year over year, and adjusted EBITDA rose by 132% [18][22] - The first quarter net loss was $20 million, resulting in a loss per share of $0.13, while the adjusted net loss was $17 million with an adjusted loss per share of $0.11 [18][22] Business Line Data and Key Metrics Changes - In Mexico, new enrollments increased by 8%, with total enrollments up by 7%, driven by strong growth in fully online programs [19][20] - In Peru, new enrollments rose by 6%, with total enrollments up by 5%, reflecting a favorable operating environment post-recession [21][22] - Adjusted for timing of the academic calendar, revenue in Mexico increased by 11% and adjusted EBITDA was up by 22% [20][22] Market Data and Key Metrics Changes - The company noted that participation rates in higher education in Mexico and Peru are growing but remain below developed markets, indicating significant growth opportunities [29] - The macroeconomic backdrop in Peru is stable, with GDP growth projected at approximately 3% for 2025, while Mexico's economic ties to the US provide a solid foundation for growth despite recent trade tensions [9][10] Company Strategy and Development Direction - The company aims to capitalize on the growing demand for quality higher education in Mexico and Peru, leveraging its strong digital capabilities and leading brands [8][29] - The company is committed to returning excess capital to shareholders, with a focus on maintaining a strong balance sheet and efficient operations through campus consolidations in Mexico [22][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model, which has historically performed well during economic downturns [7][9] - The company anticipates continued volatility in the macroeconomic environment but remains optimistic about growth prospects in both markets [10][29] Other Important Information - The company repurchased $42 million of stock during the quarter and has $56 million remaining under its stock repurchase authorization [22][27] - The company expects total enrollments for 2025 to be between 491,000 and 495,000 students, reflecting growth of 4% to 5% versus 2024 [26] Q&A Session Summary Question: Are you seeing any hesitancy from potential students in Mexico? - Management noted robust demand during the recent secondary intake, particularly among working adult students, and expects the primary intake to mirror last year's performance [33][34] Question: Can you clarify the intake cycle and normalization of numbers? - Management confirmed that the intake cycle in Peru was delayed by two weeks, which affected the reported numbers but did not indicate any other normalization [39][40] Question: What is the status of fully digital courses? - Management reported that fully online courses are growing at a double-digit rate, significantly outpacing traditional face-to-face programs, with about 20% of the student population enrolled in digital learning [51][52] Question: What are the plans for capital allocation moving forward? - The company is committed to returning excess cash to shareholders, with plans to continue stock repurchases as guided by their capital allocation strategy [54][55]

Financial Data and Key Metrics Changes - The first quarter revenue was $236 million, with adjusted EBITDA of $5 million, both metrics exceeding previous guidance [16][20] - On an organic constant currency basis, revenue increased by 10% year over year, and adjusted EBITDA rose by 132% [16][20] - The first quarter net loss was $20 million, resulting in a loss per share of $0.13, while the adjusted net loss was $17 million with an adjusted loss per share of $0.11 [16][20] Business Line Data and Key Metrics Changes - In Mexico, new enrollments increased by 8%, with total enrollments up by 7%, driven by strong growth in fully online programs [17][18] - In Peru, new enrollments rose by 6%, with total enrollments up by 5%, reflecting a recovery from the previous recession [19][20] - Adjusted EBITDA in Mexico increased by 22%, while in Peru, it decreased by $2 million due to seasonality [18][20] Market Data and Key Metrics Changes - The company noted a favorable operating environment in Peru, with GDP growth projected at approximately 3% for 2025 [9] - Mexico's economic ties to the US and its fiscal discipline provide a solid foundation for growth despite recent trade tensions [8][9] - The company expects continued volatility in both markets but remains cautiously optimistic about growth opportunities [9][10] Company Strategy and Development Direction - The company aims to capitalize on the growing demand for quality higher education in Mexico and Peru, leveraging its strong digital capabilities [8][10] - The focus is on expanding access to affordable, high-quality education while maintaining a strong balance sheet [10][28] - The company is committed to returning excess capital to shareholders, with a stock repurchase program in place [20][53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business model, which has proven effective during economic downturns [7][8] - The company is tightening its full-year guidance, anticipating a 1,000 student increase in total enrollments and a $10 million increase in revenues [22][24] - The outlook for 2025 includes total enrollments in the range of 491,000 to 495,000 students, with revenue expected to be flat to slightly up [25][26] Other Important Information - The company repurchased $42 million of stock during the quarter, with $56 million remaining under the stock repurchase authorization [20][21] - The first quarter's revenue and adjusted EBITDA were impacted by a shift in the academic calendar, with approximately $26 million of revenue expected to shift to the second half of the year [15][23] Q&A Session Summary Question: Are you seeing any hesitancy from potential students in Mexico? - Management noted robust demand during the recent intake, particularly from working adult students, and expects the primary intake to mirror last year's performance [32][33] Question: Can you clarify the intake cycle and normalization of numbers? - Management confirmed that the intake cycle in Peru started later, affecting the reported numbers, but the adjusted figures reflect a 6% increase in new enrollments [38][40] Question: What is the outlook for fully digital courses? - Fully online courses are growing at a double-digit rate, significantly outpacing traditional face-to-face programs, with about 20% of the student population enrolled in digital learning [50][51] Question: What is the capital allocation strategy moving forward? - The company plans to return excess cash to shareholders, with a commitment to convert 50% of EBITDA into free cash flow [53][54]

This presentation includes statements that express Laureate's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, ''forward-looking statements'' within the meaning of the federal securities laws, which involve risks and uncertainties. Laureate's actual results may vary significantly from the results anticipated in these forward-looking statements. You can identify forward-looking statements becaus ...

Company Overview - Laureate Education, Inc. operates five higher education institutions in Mexico and Peru, enrolling over 470,000 students in various degree programs [25] First Quarter 2025 Highlights - New enrollments decreased by 2% compared to Q1 2024, while total enrollments increased by 4% [4] - Adjusted for semester start date timing, new enrollments increased by 7% and total enrollments by 6% [4] - Revenue for Q1 2025 was $236.2 million, a decrease of 14% from Q1 2024 [6][28] - Adjusted EBITDA for Q1 2025 was $5.4 million, down 82% from $30.6 million in Q1 2024 [8][28] Enrollment Performance - In Peru, new enrollments increased by 6% during the primary intake, while total enrollments grew by 5% [5] - In Mexico, new enrollments rose by 8% and total enrollments by 7% during the secondary intake [5] Financial Performance - Operating loss for Q1 2025 was $(13.2) million, compared to operating income of $11.1 million in Q1 2024, a change of $24.3 million [7] - Net loss for Q1 2025 was $(19.6) million, compared to a net loss of $(10.8) million in Q1 2024 [7] - Basic and diluted loss per share for Q1 2025 was $(0.13), compared to $(0.07) in Q1 2024 [7] Balance Sheet and Capital Structure - As of March 31, 2025, the company had $109.8 million in cash and cash equivalents and gross debt of $114.6 million, resulting in net debt of $4.8 million [9] - The company repurchased approximately $42 million of its common stock during Q1 2025, with $56 million remaining under its stock repurchase program [10] 2025 Outlook - The company updated its 2025 guidance, expecting total enrollments to be between 491,000 and 495,000 students, reflecting a growth of 4%-5% compared to 2024 [15] - Revenue is expected to be in the range of $1,560 million to $1,575 million, indicating growth of 0%-1% on an as-reported basis and 6%-7% on an organic constant currency basis [15] - Adjusted EBITDA is projected to be between $473 million and $480 million, reflecting growth of 5%-7% on an as-reported basis and 11%-13% on an organic constant currency basis [15]

Enrollment Trends - New enrollments decreased by 2%, but increased by 7% when adjusted for semester start dates[4] - Total enrollments increased by 4%, with a 6% increase when adjusted for semester start dates[4] - Full-year 2025 guidance includes total enrollments expected to be between 491,000 and 495,000 students, reflecting a growth of 4%-5%[19] - Total enrollments in Mexico increased by 8% year-over-year, reaching 250,200 as of March 31, 2025[28] - Total enrollments in Peru decreased by 9% year-over-year, totaling 226,800 as of March 31, 2025[28] Financial Performance - Reported revenue for Q1 2025 was $236.2 million, a decrease of 14% compared to Q1 2024[7] - Total revenues for Q1 2025 were $236.2 million, a decrease of 14% compared to $275.4 million in Q1 2024[30] - Revenue for full-year 2025 is expected to be in the range of $1,560 million to $1,575 million, indicating growth of 0%-1% on an as-reported basis[19] - Adjusted EBITDA for Q1 2025 was $5.4 million, down from $30.6 million in Q1 2024, impacted by $23 million due to academic calendar timing[8] - Adjusted EBITDA for Q1 2025 was $5.4 million, down 82% from $30.6 million in Q1 2024[38] - Adjusted EBITDA for full-year 2025 is expected to be between $473 million and $480 million, reflecting growth of 5%-7% on an as-reported basis[19] Losses and Expenses - Operating loss for Q1 2025 was $(13.2) million, compared to operating income of $11.1 million in Q1 2024[7] - Net loss for Q1 2025 was $(19.6) million, compared to a net loss of $(10.8) million in Q1 2024[7] - Basic and diluted loss per share for Q1 2025 was $(0.13), compared to $(0.07) in Q1 2024[30] - The adjusted net loss for Q1 2025 was $16.6 million, significantly higher than the adjusted net loss of $2.1 million in Q1 2024, indicating a substantial decline in performance[40] - The diluted loss per share for Q1 2025 was $0.11, compared to $0.01 in Q1 2024, reflecting a deterioration in earnings per share[40] - For Q1 2025, the company reported a net loss of $19.6 million, compared to a net loss of $10.8 million in Q1 2024, representing an increase of 81.5% year-over-year[40] Cash and Liabilities - As of March 31, 2025, Laureate had $109.8 million in cash and cash equivalents, with net debt of $4.8 million[9] - Cash and cash equivalents increased to $109.8 million as of March 31, 2025, up from $91.4 million at the end of 2024[35] - Total liabilities rose to $950.8 million as of March 31, 2025, compared to $903.5 million at the end of 2024[35] Costs and Expenses - Direct costs for Q1 2025 were $238.4 million, down from $254.0 million in Q1 2024, reflecting a decrease of 6.1%[30] - Interest expense decreased to $2.4 million in Q1 2025 from $4.7 million in Q1 2024, a reduction of 48.9%[30] Foreign Currency Impact - The company experienced a foreign currency exchange loss of $3.2 million in Q1 2025, which contributed to the overall financial results[40] Share Count - The diluted weighted average shares outstanding decreased from 157.0 million in Q1 2024 to 147.6 million in Q1 2025, indicating a reduction in share count[40]