Adtalem Education (ATGE)2025-01-30 21:20Revenue Growth - Adtalem's revenue increased 13.9%, or $54.5 million, to $447.7 million in Q2 FY2025 compared to the prior year period, driven by increased revenue across all segments [149]. - Chamberlain revenue increased 17.9%, or $27.4 million, to $181.0 million in Q2 FY2025, driven by higher enrollment and tuition rates [151]. - Walden revenue increased 16.7%, or $24.5 million, to $171.3 million in Q2 FY2025, supported by increased enrollment and higher tuition rates [153]. - Fiscal year 2025 consolidated revenue increased by 9.4% to $372.6 million compared to the prior year [160]. Net Income and Earnings - Net income rose 90.2%, or $36.0 million, to $75.9 million in Q2 FY2025, primarily due to increased revenue and decreased litigation reserves [149]. - Diluted earnings per share increased 102.0%, or $1.00, to $1.98 in Q2 FY2025, attributed to the rise in net income and lower diluted shares from share repurchases [149]. - The company reported a net income of $122.0 million for the six months ended December 31, 2024, compared to $50.5 million in the same period of 2023 [219]. - Adjusted earnings per share (non-GAAP) for Q2 2024 was $1.81, up from $1.23 in Q2 2023, reflecting a 47% increase [220]. Enrollment Statistics - Total student enrollment at Chamberlain increased 11.5% for the November 2024 session compared to the same session last year [149]. - Walden's total student enrollment increased 13.2% as of December 31, 2024, compared to December 31, 2023 [149]. Operating Income - Consolidated operating income increased by 100.6%, or $87.3 million, to $174.1 million in the first six months of fiscal year 2025 [168]. - Chamberlain operating income increased 42.5%, or $12.6 million, to $42.2 million in the second quarter of fiscal year 2025 [172]. - Walden operating income increased 126.4%, or $27.3 million, to $48.9 million in the second quarter of fiscal year 2025 [173]. - Adjusted operating income for Chamberlain increased by 30.0% to $70.1 million in the first six months of fiscal year 2025 [168]. Expenses and Costs - Cost of educational services rose by 9.4%, or $31.9 million, to $372.6 million in the first six months of fiscal year 2025 [160]. - Student services and administrative expense increased by 0.8%, or $1.3 million, to $156.9 million in the second quarter of fiscal year 2025 [164]. - As a percentage of revenue, cost of educational services decreased to 43.1% in the first six months of fiscal year 2025 from 44.7% in the prior year [161]. - Student services and administrative expense as a percentage of revenue decreased to 36.5% in the first six months of fiscal year 2025 from 42.2% in the prior year [165]. Share Repurchase and Capital Expenditures - Adtalem repurchased 471,327 shares at an average cost of $79.60 per share during Q2 FY2025, with future repurchases dependent on market conditions [149]. - Capital expenditures for the six months ended December 31, 2024, were $21.1 million, compared to $19.6 million in the same period of 2023, with expectations for full fiscal year 2025 capital spending to be in the range of $55 to $65 million [202]. Tax and Other Financial Metrics - Effective tax rate from continuing operations increased to 22.8% in the three months ended December 31, 2024, compared to 17.1% in the prior year period [179]. - Interest expense decreased to $13.9 million in the second quarter of fiscal year 2025 from $16.7 million in the prior year period [175]. - Other income, net decreased to $2.2 million in the second quarter of fiscal year 2025 from $3.6 million in the prior year period [176]. Indemnification and Restructuring - The company received a $5.6 million indemnification claim in the second quarter of fiscal year 2025 [170]. - Restructuring expenses increased to $2.4 million in the first six months of fiscal year 2025 compared to $0.7 million in the prior year [166].