Group 1 - The perception of college degrees is shifting, with them becoming less of a guarantee for prosperity and more associated with debt [1] - Observing megatrends can provide insights into societal advancements and potential investment opportunities [1] - The importance of fundamentals, quality of leadership, and product pipeline is emphasized for identifying investment opportunities [1] Group 2 - The focus has been on marketing and business strategy for medium-sized companies and startups, indicating a trend towards supporting smaller enterprises [1] - Experience in evaluating startups and emerging industries/technologies highlights a commitment to understanding innovative sectors [1]

Core Insights - The analyst has a strong background in equity research and investment analysis, with a focus on the U.S. equity market and consumer staples sector, indicating a belief in the resilience of defensive stocks for long-term investment opportunities [1]. Group 1: Analyst Background - The analyst holds certifications as FMVA and FPWMP, which provide skills in financial statement analysis, valuation modeling, and investment portfolio construction [1]. - Participation in the CFA Research Challenge has equipped the analyst with practical experience in equity analysis and industry research [1]. - The analyst graduated with a CGPA of 3.6 in Finance from Alexandria University in 2024, showcasing a solid academic foundation [1]. Group 2: Professional Experience - The analyst has worked with a confidential client, preparing investment reports across various sectors, including healthcare, consumer staples, and industrials, enhancing the ability to evaluate companies across diverse industries [1]. - In 2023, the analyst joined AIESEC, further developing leadership, communication, and teamwork skills through global exchange and project collaboration [1].

Company Performance - Perdoceo Education reported quarterly earnings of $0.67 per share, exceeding the Zacks Consensus Estimate of $0.65 per share, and up from $0.60 per share a year ago, representing an earnings surprise of +3.08% [1] - The company posted revenues of $209.58 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.29%, and an increase from year-ago revenues of $166.74 million [2] - Over the last four quarters, Perdoceo Education has consistently surpassed consensus EPS estimates and revenue estimates [2] Stock Performance - Perdoceo Education shares have gained approximately 8.2% since the beginning of the year, matching the S&P 500's gain of 8.2% [3] - The current Zacks Rank for Perdoceo Education is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $206.34 million, and for the current fiscal year, it is $2.49 on revenues of $832.34 million [7] - The outlook for the industry, particularly the Schools sector, is favorable, as it ranks in the top 13% of over 250 Zacks industries, suggesting potential for outperformance [8]

Financial Data and Key Metrics Changes - Net income for Q2 2025 was $41 million or $0.62 per diluted share, compared to $38.4 million or $0.57 per diluted share in the prior year [5][13] - Adjusted earnings per diluted share increased to $0.67 from $0.59, reflecting a growth of 13.6% [13][27] - Revenue for Q2 2025 was $209.6 million, representing a 26% increase from $166.7 million in the prior year [14][28] Business Line Data and Key Metrics Changes - Total enrollment growth across academic institutions was 17%, with CTU and AIU each growing by 7% [5][15] - CTU's revenue increased by 4.6% to $118 million, while operating income rose by 7.9% to $46.3 million [18] - AIU's revenue increased by 1.9% to $54.7 million, with operating income of $12.1 million [19] Market Data and Key Metrics Changes - St. Augustine recorded revenue of $36.7 million in Q2 2025, contributing positively to overall results [19] - Total enrollments at St. Augustine were just under 4,000 for the summer term, with expectations for growth in the fall term [16][17] Company Strategy and Development Direction - The company is focused on enhancing student retention and engagement through investments in technology and support processes [5][30] - A new $75 million share repurchase authorization was approved, reflecting confidence in the company's long-term strategy [10][25] - The company plans to continue expanding its program offerings and geographical reach, particularly at St. Augustine [9][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, citing strong prospective student interest and enrollment growth [11][28] - The full-year adjusted operating income outlook was raised to between $230 million and $236 million, up from $188.9 million in 2024 [26][30] - The company expects continued growth in revenue and total enrollments for the remainder of 2025 [17][28] Other Important Information - The effective tax rate for the year to date was 24.9%, with expectations for it to be between 26% and 26.5% for the full year [20][21] - The company is committed to returning capital to shareholders through dividends and share repurchases [10][24] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating a focus on the prepared remarks rather than a Q&A session.

Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Financial statements for the period ended June 30, 2025, reflect significant revenue and net income growth, driven by the USAHS acquisition, with increased assets and equity supported by strong operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$1.29 billion**, driven by cash, while liabilities grew due to deferred revenue, and stockholders' equity rose to **$984.6 million** Condensed Consolidated Balance Sheet Highlights (In Thousands) | Account | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $721,207 | $640,154 | | **Total Assets** | **$1,294,387** | **$1,237,034** | | **Total current liabilities** | $168,799 | $132,162 | | **Total Liabilities** | $309,756 | $277,498 | | **Total Stockholders' Equity** | **$984,631** | **$959,536** | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For Q2 2025, revenue grew **25.7%** to **$209.6 million** and net income increased **6.8%** to **$41.0 million**, with year-to-date revenue reaching **$422.6 million** and net income **$84.7 million** Financial Performance Summary (In Thousands, Except Per Share) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $209,581 | $166,740 | $422,585 | $335,004 | | **Operating Income** | $51,399 | $46,006 | $103,126 | $92,284 | | **Net Income** | $41,028 | $38,429 | $84,716 | $77,871 | | **Net Income Per Share - Diluted** | $0.62 | $0.57 | $1.27 | $1.16 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, operating cash flow significantly increased to **$143.9 million**, investing activities used **$7.3 million**, and financing activities used **$74.7 million** for repurchases and dividends Year-to-Date Cash Flow Summary (In Thousands) | Cash Flow Category | YTD Ended June 30, 2025 | YTD Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $143,905 | $93,017 | | **Net cash used in investing activities** | $(7,254) | $(60,137) | | **Net cash used in financing activities** | $(74,727) | $(23,012) | | **Net increase in cash** | $61,924 | $9,868 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail key accounting policies, the December 2024 USAHS acquisition, segment revenue contributions, stock repurchases, and legal contingencies, with CTU remaining the largest revenue and operating income contributor - On December 2, 2024, the Company completed the acquisition of the University of St. Augustine for Health Sciences (USAHS) for a purchase price of **$137.0 million**, resulting in goodwill of **$17.0 million**[24](index=24&type=chunk)[26](index=26&type=chunk) YTD 2025 Revenue by Segment (In Thousands) | Segment | Tuition and fees, net | Other revenue | Total revenue | | :--- | :--- | :--- | :--- | | **CTU** | $236,025 | $1,524 | $237,549 | | **AIUS** | $108,322 | $460 | $108,782 | | **USAHS** | $75,876 | $4 | $75,880 | | **Corporate and Other** | - | $374 | $374 | | **Total** | **$420,223** | **$2,362** | **$422,585** | - The company is involved in a False Claims Act lawsuit and received a Civil Investigative Demand (CID) from the DOJ regarding CTU's compensation practices and Fast Track credit program. The outcome is uncertain, and no liability has been recognized[63](index=63&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - During the six months ended June 30, 2025, the company repurchased **1.6 million shares** for **$46.1 million**. A new **$75.0 million** stock repurchase program was approved on July 31, 2025[83](index=83&type=chunk)[94](index=94&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q2 revenue growth to the USAHS acquisition and organic growth, with total student enrollment up **17.4%** YoY, while discussing a new federal law impacting student aid and maintaining a strong liquidity position and capital allocation strategy [2025 Second Quarter Overview](index=34&type=section&id=2025%20Second%20Quarter%20Overview) Q2 2025 saw a **17.4%** increase in total student enrollments across all institutions, with revenue up **25.7%** to **$209.6 million** and operating income rising to **$51.4 million**, resulting in adjusted operating income of **$61.5 million** Total Student Enrollments by Segment (as of June 30) | Segment | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **CTU** | 31,900 | 29,700 | 7.4% | | **AIUS** | 10,600 | 9,900 | 7.1% | | **USAHS** | 4,000 | - | NM | | **Total** | **46,500** | **39,600** | **17.4%** | - Q2 2025 revenue increased by **25.7%** (**$42.8 million**) YoY, primarily due to **$36.7 million** from the USAHS acquisition and growth at CTU and AIUS[111](index=111&type=chunk) Adjusted Operating Income Reconciliation (Q2, In Thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Operating income (GAAP)** | $51,399 | $46,006 | | Depreciation and amortization | $10,148 | $3,069 | | **Adjusted Operating Income (Non-GAAP)** | **$61,547** | **$49,075** | [Recent Legislative Development](index=36&type=section&id=Recent%20Legislative%20Development) A new law signed on July 4, 2025, will significantly reform federal student aid programs effective July 1, 2026, introducing new loan limits and an earnings-based eligibility requirement, which the company believes will be less restrictive - A new law signed on July 4, 2025, will introduce major changes to federal student aid programs, including new loan limits and an earnings-based eligibility requirement, effective July 1, 2026[117](index=117&type=chunk) - The Act introduces a new earnings-based eligibility requirement for federal loan access that applies to all higher education institutions, which the company believes will be less restrictive than current gainful employment rules[122](index=122&type=chunk)[125](index=125&type=chunk) - The Department of Education will establish two negotiated rulemaking committees in Fall 2025 to implement the statutory changes, with new regulations likely not effective until July 1, 2027[129](index=129&type=chunk)[130](index=130&type=chunk) [Consolidated and Segment Results of Operations](index=39&type=section&id=Consolidated%20and%20Segment%20Results%20of%20Operations) Consolidated Q2 2025 revenue increased **25.7%** due to the USAHS acquisition and organic growth, while operating expenses rose **82.6%** due to USAHS, which contributed **$36.7 million** in revenue but incurred an operating loss of **$1.7 million** Q2 2025 Segment Performance (In Thousands) | Segment | Revenue | Operating Income (Loss) | Operating Margin | | :--- | :--- | :--- | :--- | | **CTU** | $117,970 | $46,262 | 39.2% | | **AIUS** | $54,723 | $12,080 | 22.1% | | **USAHS** | $36,697 | $(1,694) | -4.6% | | **Corporate and other** | $191 | $(5,249) | NM | - The increase in Educational services and facilities expense (up **82.6%** in Q2) was primarily due to a full quarter of expenses related to the USAHS acquisition[134](index=134&type=chunk) - USAHS's operating loss was primarily driven by **$7.2 million** in depreciation and amortization expenses related to acquired assets and finance leases for the quarter[154](index=154&type=chunk) [Liquidity, Financial Position and Capital Resources](index=43&type=section&id=Liquidity,%20Financial%20Position%20and%20Capital%20Resources) The company ended the quarter with **$659.6 million** in cash and investments, H1 2025 operating cash flow of **$143.9 million**, and continues its capital allocation strategy with a new **$75.0 million** repurchase program and a **15.4%** dividend increase - As of June 30, 2025, the company held **$659.6 million** in cash, cash equivalents, restricted cash, and short-term investments[157](index=157&type=chunk) - On July 31, 2025, the Board approved a new stock repurchase program for up to **$75.0 million**, expiring January 31, 2027[160](index=160&type=chunk) - The Board declared a quarterly dividend of **$0.15 per share**, a **15.4%** increase, payable on September 12, 2025[161](index=161&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure on its investment portfolio, which management considers limited due to its capital preservation policy, with a 100 basis point change not expected to materially impact earnings or cash flows - The company's main market risk is interest rate exposure on its investments, but it does not use derivative instruments and considers the risk to be limited[175](index=175&type=chunk) - A hypothetical **100 basis point (1%)** change in average interest rates would not have a material impact on the company's future earnings, fair values, or cash flows[177](index=177&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - As of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[178](index=178&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[179](index=179&type=chunk) Part II [Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference Note 9, detailing ongoing legal matters, including a False Claims Act lawsuit and a Civil Investigative Demand from the DOJ concerning Colorado Technical University - Information regarding legal proceedings is detailed in Note 9 "Contingencies" of the financial statements[183](index=183&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details its year-to-date stock repurchase activity, with **1,635,000 shares** repurchased, and approximately **$1.0 million** remaining available under the existing program as of June 30, 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - 30, 2025 | - | - | | May 1 - 31, 2025 | 240,000 | $31.11 | | June 1 - 30, 2025 | 410,000 | $32.74 | - As of June 30, 2025, approximately **$990,720** remained available for repurchase under the stock repurchase program authorized on February 20, 2024[186](index=186&type=chunk)[188](index=188&type=chunk) [Other Information](index=49&type=section&id=Item%205.%20Other%20Information) During Q2 2025, several executive officers, including the CEO and CFO, adopted pre-arranged Rule 10b5-1 stock trading plans to sell company shares over a future period - CEO Todd Nelson adopted a Rule 10b5-1 trading plan on May 29, 2025, to sell up to **291,346 shares** between September 2025 and April 2026[193](index=193&type=chunk) - CFO Ashish Ghia adopted a Rule 10b5-1 trading plan on May 8, 2025, to sell up to **53,081 shares** (including vested options) between August 2025 and February 2026[191](index=191&type=chunk)

[Second Quarter 2025 Financial and Operational Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Operational%20Highlights) Perdoceo Education Corporation reported robust Q2 and year-to-date 2025 results, driven by significant revenue and enrollment growth, enhanced by the USAHS acquisition, and a strong commitment to shareholder returns [Overview of Q2 2025 Performance](index=1&type=section&id=Overview%20of%20Q2%202025%20Performance) Perdoceo Education Corporation reported strong second quarter and year-to-date 2025 results, highlighted by significant growth in revenue and student enrollment, largely driven by the acquisition of the University of St. Augustine (USAHS), alongside a strong commitment to shareholder returns - The President and CEO highlighted **strong prospective student interest** and **student retention trending near multi-year highs**, alongside continued investment in academic and student support technologies[2](index=2&type=chunk) - The company ended the quarter with a strong liquidity position of **$659.6 million** in cash, cash equivalents, restricted cash, and available-for-sale short-term investments[4](index=4&type=chunk) Q2 2025 vs. Q2 2024 Key Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $209.6M | $166.7M | +25.7% | | Operating Income | $51.4M | $46.0M | +11.7% | | Adjusted Operating Income | $61.5M | $49.1M | +25.4% | | Earnings Per Diluted Share | $0.62 | $0.57 | +8.8% | | Adjusted EPS | $0.67 | $0.59 | +13.6% | YTD 2025 vs. YTD 2024 Key Metrics | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $422.6M | $335.0M | +26.1% | | Operating Income | $103.1M | $92.3M | +11.7% | | Adjusted Operating Income | $125.1M | $98.4M | +27.2% | | Earnings Per Diluted Share | $1.27 | $1.16 | +9.5% | | Adjusted EPS | $1.37 | $1.19 | +15.1% | [Key Operating Metrics](index=2&type=section&id=Key%20Operating%20Metrics) The company's key operating metrics showed significant growth, with total student enrollments increasing by 17.4% year-over-year, primarily due to the inclusion of USAHS and organic growth at CTU and AIUS, driving a 25.7% increase in quarterly revenue [Total Student Enrollments](index=2&type=section&id=Total%20Student%20Enrollments) Total Student Enrollments as of June 30 | Institution | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | CTU | 31,900 | 29,700 | 7.4% | | AIUS | 10,600 | 9,900 | 7.1% | | USAHS | 4,000 | - | NM | | **Total** | **46,500** | **39,600** | **17.4%** | [Revenue](index=2&type=section&id=Revenue) - The acquisition of USAHS was completed on December 2, 2024, hence its results are not present in the prior year's comparative period[8](index=8&type=chunk) Revenue by Segment ($ in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | CTU | $117,970 | $112,828 | 4.6% | $237,549 | $226,397 | 4.9% | | AIUS | $54,723 | $53,722 | 1.9% | $108,782 | $108,227 | 0.5% | | USAHS | $36,697 | - | NM | $75,880 | - | NM | | **Total** | **$209,581** | **$166,740** | **25.7%** | **$422,585** | **$335,004** | **26.1%** | [Profitability Analysis](index=3&type=section&id=Profitability%20Analysis) Profitability improved year-over-year, with operating income increasing by 11.7% for both the second quarter and year-to-date, and adjusted operating income showing even stronger growth, translating to higher net income and earnings per share [Operating Income](index=3&type=section&id=Operating%20Income) Operating Income by Segment ($ in thousands) | Segment | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | CTU | $46,262 | $42,890 | 7.9% | $92,359 | $85,046 | 8.6% | | AIUS | $12,080 | $12,926 | -6.5% | $23,964 | $22,212 | 7.9% | | USAHS | ($1,694) | - | NM | ($2,024) | - | NM | | **Total** | **$51,399** | **$46,006** | **11.7%** | **$103,126** | **$92,284** | **11.7%** | Adjusted Operating Income ($ in thousands) | Period | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **For the Quarter Ended June 30** | $61,547 | $49,075 | 25.4% | | **For the Year to Date Ended June 30** | $125,081 | $98,369 | 27.2% | [Net Income and Earnings Per Share (EPS)](index=4&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share%20(EPS)) Net Income and EPS Performance | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $41.0M | $38.4M | $84.7M | $77.9M | | Diluted EPS | $0.62 | $0.57 | $1.27 | $1.16 | | Adjusted Diluted EPS | $0.67 | $0.59 | $1.37 | $1.19 | [Financial Position and Cash Flow](index=5&type=section&id=Financial%20Position%20and%20Cash%20Flow) The company's financial health remains robust, with a total cash and investment balance of $659.6 million as of June 30, 2025, and cash flow from operating activities demonstrating significant strength, increasing 104.5% in the second quarter - As of June 30, 2025, cash, cash equivalents, restricted cash, and available-for-sale short-term investments totaled **$659.6 million**, an increase from **$591.5 million** at the end of 2024[20](index=20&type=chunk) Selected Cash Flow Items ($ in thousands) | Item | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $78,778 | $38,525 | 104.5% | $143,905 | $93,017 | 54.7% | | Capital expenditures | $2,752 | $824 | 234.0% | $4,489 | $2,022 | 122.0% | [Capital Allocation](index=5&type=section&id=Capital%20Allocation) Perdoceo is actively returning capital to shareholders, with the Board of Directors increasing the quarterly dividend by 15.4% to $0.15 per share and authorizing a new $75.0 million stock repurchase program - A new stock repurchase program for up to **$75.0 million** was approved, effective July 31, 2025, and set to expire on January 31, 2027[17](index=17&type=chunk) - The quarterly dividend was increased by **15.4%** to **$0.15 per share**, marking the second increase since dividends began in 2023[18](index=18&type=chunk) - During the first half of 2025, the company repurchased **1.6 million shares** for **$46.1 million** at an average price of **$28.19 per share**[16](index=16&type=chunk) [Business Outlook](index=6&type=section&id=Business%20Outlook) The company provides a positive outlook for Q3 and full year 2025, projecting continued growth in key profitability metrics based on stable student interest and regulatory environment [Full Year and Third Quarter 2025 Guidance](index=6&type=section&id=Full%20Year%20and%20Third%20Quarter%202025%20Guidance) The company has issued a positive outlook for the third quarter and full year of 2025, anticipating year-over-year growth in key profitability metrics including operating income, adjusted operating income, and adjusted earnings per diluted share, based on consistent student interest and no significant adverse regulatory changes - The outlook assumes consistent student interest, no significant negative impact from federal legislative or regulatory changes, and an effective income tax rate of approximately **26.5%** for the full year[22](index=22&type=chunk) Q3 2025 Outlook vs. Q3 2024 Actual | Metric | Q3 2025 Outlook | Q3 2024 Actual | | :--- | :--- | :--- | | Operating Income | $46.8M - $48.8M | $44.8M | | Adjusted Operating Income | $57.0M - $59.0M | $47.8M | | Earnings Per Diluted Share | $0.55 - $0.57 | $0.57 | | Adjusted EPS | $0.60 - $0.62 | $0.59 | Full Year 2025 Outlook vs. Full Year 2024 Actual | Metric | FY 2025 Outlook | FY 2024 Actual | | :--- | :--- | :--- | | Operating Income | $187.8M - $193.8M | $174.3M | | Adjusted Operating Income | $230.0M - $236.0M | $188.9M | | Earnings Per Diluted Share | $2.29 - $2.36 | $2.19 | | Adjusted EPS | $2.48 - $2.55 | $2.26 | [Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited consolidated financial statements for Q2 and YTD 2025 reflect strong asset growth, increased profitability, and robust cash flow, supported by segment performance [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows total assets of $1.29 billion, up from $1.24 billion at year-end 2024, driven by growth in cash and student receivables, with total stockholders' equity also increasing to $984.6 million Key Balance Sheet Items ($ in thousands) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total cash, restricted cash & short-term investments | $659,589 | $591,548 | | Total current assets | $721,207 | $640,154 | | Total assets | $1,294,387 | $1,237,034 | | Total current liabilities | $168,799 | $132,162 | | Total liabilities | $309,756 | $277,498 | | Total stockholders' equity | $984,631 | $959,536 | [Condensed Consolidated Statements of Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the second quarter of 2025, the company reported net income of $41.0 million on revenues of $209.6 million, with year-to-date net income of $84.7 million on revenues of $422.6 million, reflecting a slight increase in operating expenses primarily due to the USAHS acquisition Q2 Income Statement Highlights ($ in thousands) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenue | $209,581 | $166,740 | | Total operating expenses | $158,182 | $120,734 | | Operating income | $51,399 | $46,006 | | Net income | $41,028 | $38,429 | YTD Income Statement Highlights ($ in thousands) | Item | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Total revenue | $422,585 | $335,004 | | Total operating expenses | $319,459 | $242,720 | | Operating income | $103,126 | $92,284 | | Net income | $84,716 | $77,871 | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash provided by operating activities was a strong $143.9 million, a significant increase from the prior year, while the company utilized cash in investing and financing activities, including treasury stock purchases and dividend payments YTD Cash Flow Summary ($ in thousands) | Activity | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $143,905 | $93,017 | | Net cash used in investing activities | ($7,254) | ($60,137) | | Net cash used in financing activities | ($74,727) | ($23,012) | | **Net increase in cash** | **$61,924** | **$9,868** | [Selected Segment Information](index=13&type=section&id=Selected%20Segment%20Information) The Colorado Technical University (CTU) segment remains the primary driver of profitability with a 39.2% operating margin in Q2 2025, while the newly acquired University of St. Augustine for Health Sciences (USAHS) contributed significantly to revenue but recorded an operating loss during its integration Q2 2025 Segment Performance ($ in thousands) | Segment | Revenue | Operating Income (Loss) | Operating Margin | | :--- | :--- | :--- | :--- | | CTU | $117,970 | $46,262 | 39.2% | | AIUS | $54,723 | $12,080 | 22.1% | | USAHS | $36,697 | ($1,694) | NM | YTD 2025 Segment Performance ($ in thousands) | Segment | Revenue | Operating Income (Loss) | Operating Margin | | :--- | :--- | :--- | :--- | | CTU | $237,549 | $92,359 | 38.9% | | AIUS | $108,782 | $23,964 | 22.0% | | USAHS | $75,880 | ($2,024) | NM | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=15&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section details the reconciliation of GAAP to non-GAAP financial measures, providing adjusted metrics for a clearer understanding of core operational performance [Reconciliation Details](index=15&type=section&id=Reconciliation%20Details) The company provides non-GAAP metrics, primarily Adjusted Operating Income and Adjusted Earnings Per Diluted Share, to better reflect core operational performance by removing non-cash expenses such as depreciation and amortization of acquired intangible assets, which for Q2 2025, added $10.1 million to operating income and $0.05 to diluted EPS - The company believes non-GAAP measures are useful for investors to understand core performance by excluding items like depreciation and amortization, which it does not consider reflective of underlying operating performance[47](index=47&type=chunk) Q2 2025 GAAP to Non-GAAP Reconciliation | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Income | $51.4M | +$10.1M (D&A) | $61.5M | | Diluted EPS | $0.62 | +$0.05 | $0.67 | YTD 2025 GAAP to Non-GAAP Reconciliation | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Income | $103.1M | +$22.0M (D&A) | $125.1M | | Diluted EPS | $1.27 | +$0.10 | $1.37 |

Core Viewpoint - The comparison between Perdoceo Education (PRDO) and Lincoln Educational Services Corporation (LINC) indicates that PRDO currently offers better value for investors based on various financial metrics [1]. Group 1: Company Overview - Both PRDO and LINC have a Zacks Rank of 2 (Buy), suggesting positive earnings estimate revisions and improving earnings outlooks for both companies [3]. - Value investors analyze a range of traditional figures and metrics to assess whether a company is undervalued at its current share price levels [4]. Group 2: Valuation Metrics - PRDO has a forward P/E ratio of 13.25, while LINC has a significantly higher forward P/E of 32.01 [5]. - The PEG ratio for PRDO is 0.88, indicating a more favorable valuation compared to LINC's PEG ratio of 2.13 [5]. - PRDO's P/B ratio stands at 2.23, compared to LINC's P/B ratio of 4.10, further supporting PRDO's superior valuation metrics [6]. - Based on these valuation figures, PRDO is rated with a Value grade of A, while LINC has a Value grade of C [6].

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps investors identify effective metrics for momentum, addressing the challenges in defining momentum [2] Group 2: Perdoceo Education (PRDO) Analysis - Perdoceo Education currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy), indicating strong potential for performance [3][4] - Over the past week, PRDO shares increased by 0.93%, outperforming the Zacks Schools industry, which rose by 0.82% [6] - In the last month, PRDO's price change was 24.06%, significantly higher than the industry's 10.56% [6] - Over the past quarter, PRDO shares rose by 21.61%, and over the last year, they gained 34.19%, while the S&P 500 saw movements of -2.55% and 11.45%, respectively [7] Group 3: Trading Volume and Earnings Outlook - PRDO's average 20-day trading volume is 573,071 shares, which serves as a bullish indicator when combined with rising stock prices [8] - Recent earnings estimate revisions for PRDO show one upward revision for the full year, increasing the consensus estimate from $2.41 to $2.49 [10] - For the next fiscal year, there has been one upward estimate revision with no downward revisions, indicating positive earnings outlook [10] Group 4: Conclusion - Given the positive momentum indicators and earnings outlook, PRDO is positioned as a strong buy candidate for investors seeking short-term opportunities [12]

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 - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting the use of a specific screening strategy to identify stocks with strong fundamentals and positive price momentum [1][2]. Group 1: Stock Screening Strategy - The "Recent Price Strength" screen is designed to identify stocks with sufficient fundamental strength to maintain their recent uptrend, focusing on those trading in the upper portion of their 52-week high-low range, indicating bullishness [3]. - Perdoceo Education (PRDO) is highlighted as a strong candidate for trend investing, having increased by 19.5% over the past 12 weeks, reflecting investor confidence [4]. - PRDO has also shown a price increase of 24.2% over the last four weeks, indicating that the upward trend is still intact [5]. Group 2: Fundamental Strength - PRDO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are critical for near-term price movements [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), suggesting high optimism from the brokerage community regarding its near-term performance [7]. - The price trend for PRDO is expected to remain positive, supported by its strong fundamentals and market position [8].