Laureate Education(LAUR) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Second Quarter 2025 Highlights Laureate Education reported a 5% increase in reported revenue to $524.2 million for Q2 2025, with organic constant currency revenue up 10%, operating income rose to $193.3 million, and Adjusted EBITDA increased to $214.5 million, while net income decreased to $97.4 million due to foreign currency exchange losses, with new enrollments growing by 7% and total enrollments by 6% Second Quarter 2025 Key Financial Highlights | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Reported Change | Organic Constant Currency Change | | :------------------ | :--- | :--- | :--- | :--- | | Revenue | 524.2 | 499.2 | 5% | 10% | | Operating Income | 193.3 | 166.6 | - | - | | Net Income | 97.4 | 128.4 | - | - | | Adjusted EBITDA | 214.5 | 186.9 | - | - | - New enrollments increased 7% and total enrollments increased 6% in Q2 2025[5] - Net income decreased due to a loss on foreign currency exchange during Q2 2025 compared to a gain in Q2 2024[5] Six Months Ended June 30, 2025 Highlights For the first six months of 2025, reported revenue decreased 2% to $760.3 million, but increased 6% on an organic constant currency basis, operating income slightly increased to $180.1 million, and Adjusted EBITDA was $219.8 million, while net income decreased to $77.9 million, primarily due to foreign currency exchange losses, with new enrollments increasing 7% and total enrollments by 6% Six Months Ended June 30, 2025 Key Financial Highlights | Metric | H1 2025 ($M) | H1 2024 ($M) | Reported Change | Organic Constant Currency Change | | :------------------ | :--- | :--- | :--- | :--- | | Revenue | 760.3 | 774.6 | (2)% | 6% | | Operating Income | 180.1 | 177.7 | - | - | | Net Income | 77.9 | 117.5 | - | - | | Adjusted EBITDA | 219.8 | 217.5 | - | - | - New enrollments increased 7% and total enrollments increased 6% for the six months ended June 30, 2025[5] - Net income decreased due to a loss on foreign currency exchange during the six months ended June 30, 2025 compared to a gain in the prior-year period[5] CEO Commentary CEO Eilif Serck-Hanssen expressed satisfaction with solid Q2 operating results and announced an increase in full-year guidance due to improved foreign currency rates, highlighting the company's progress on strategic priorities, strong balance sheet, robust cash flow generation, and commitment to growth initiatives and shareholder returns - Solid operating results for Q2 2025 led to an increase in full-year outlook due to improved foreign currency rates[6] - Company remains on track with strategic priorities, including opening two new campuses in September[6] - Strong balance sheet and cash flow generation support growth initiatives and return of excess capital to shareholders[6] Detailed Financial Performance Second Quarter 2025 Financial Performance Laureate's Q2 2025 revenue increased 5% reported (10% organic constant currency) to $524.2 million, with an $8 million favorable impact from academic calendar timing, operating income grew by $26.7 million to $193.3 million, net income decreased by $31.0 million to $97.4 million, primarily due to a foreign currency exchange loss compared to a gain in the prior year, Adjusted EBITDA increased by $27.6 million to $214.5 million, favorably affected by $7 million from academic calendar timing, and basic and diluted EPS were $0.65 Second Quarter 2025 Financial Performance | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change ($M) | | :------------------ | :--- | :--- | :--- | | Revenue (Reported) | 524.2 | 499.2 | 25.0 | | Operating Income | 193.3 | 166.6 | 26.7 | | Net Income | 97.4 | 128.4 | (31.0) | | Adjusted EBITDA | 214.5 | 186.9 | 27.6 | | Basic & Diluted EPS | 0.65 | 0.83 | (0.18) | - The decrease in net income was attributable to a loss on foreign currency exchange during the second quarter of 2025 compared to a gain during the second quarter of 2024, mainly related to intercompany loan arrangements[7] - Revenue and Adjusted EBITDA were favorably affected by approximately $8 million and $7 million, respectively, of intra-year academic calendar timing[5][7][8] Six Months Ended June 30, 2025 Financial Performance For the six months ended June 30, 2025, reported revenue decreased 2% to $760.3 million (6% increase on organic constant currency basis), unfavorably affected by $18 million due to later semester start dates, operating income slightly increased to $180.1 million, net income decreased by $39.6 million to $77.9 million, primarily due to foreign currency exchange losses, Adjusted EBITDA was $219.8 million, unfavorably affected by $16 million from academic calendar timing, new enrollments increased 7% overall, with Peru up 8% and Mexico up 6%, total enrollments increased 6% overall, with Peru up 6% and Mexico up 7%, and basic and diluted EPS were $0.51 and $0.50, respectively Six Months Ended June 30, 2025 Financial Performance | Metric | H1 2025 ($M) | H1 2024 ($M) | Change ($M) | | :------------------ | :--- | :--- | :--- | | Revenue (Reported) | 760.3 | 774.6 | (14.3) | | Operating Income | 180.1 | 177.7 | 2.4 | | Net Income | 77.9 | 117.5 | (39.6) | | Adjusted EBITDA | 219.8 | 217.5 | 2.3 | | Basic EPS | 0.51 | 0.75 | (0.24) | | Diluted EPS | 0.50 | 0.75 | (0.25) | - The decrease in net income was attributable to a loss on foreign currency exchange during the six months ended June 30, 2025 compared to a gain during the six months ended June 30, 2024, mainly related to intercompany loan arrangements[10] - Revenue and Adjusted EBITDA were unfavorably affected by approximately $18 million and $16 million, respectively, of intra-year academic calendar timing attributable to later semester start dates in 2025 as compared to 2024[5][10][11] H1 2025 Enrollment Growth by Region | Metric | Mexico | Peru | Laureate | | :----- | :----- | :--- | :------- | | New Enrollments Growth | 6% | 8% | 7% | | Total Enrollments Growth | 7% | 6% | 6% | Balance Sheet and Capital Structure As of June 30, 2025, Laureate maintained a strong balance sheet with $135.3 million in cash and cash equivalents and gross debt of $116.1 million, resulting in net cash of $19.2 million, the company repurchased approximately $71 million of common stock during the first six months of 2025, with $27 million remaining under the existing authorization, and total shares outstanding were 147.4 million Balance Sheet Snapshot (June 30, 2025) | Metric | Amount ($ millions) | | :----- | :------------------ | | Cash and cash equivalents | 135.3 | | Gross debt | 116.1 | | Net cash | 19.2 | - Laureate repurchased approximately $71 million of its common stock during the six months ended June 30, 2025, with approximately $27 million of share repurchase authorization remaining[13] - As of June 30, 2025, Laureate had 147.4 million total shares outstanding[14] Outlook and Guidance Fiscal Year 2025 Guidance Update Laureate updated its full-year 2025 outlook, increasing revenue guidance by approximately $55 million and Adjusted EBITDA guidance by approximately $16 million, primarily due to more favorable foreign currency rates, with total enrollments expected to grow 4%-5%, revenues 3%-4% reported (6%-7% organic constant currency), and Adjusted EBITDA 9%-10% reported (11%-13% organic constant currency) - Full-year 2025 guidance increased due to more favorable foreign currency rates, with revenue guidance up $55 million and Adjusted EBITDA guidance up $16 million[15] Updated Full-Year 2025 Guidance | Metric | Range | Growth vs 2024 (Reported) | Growth vs 2024 (Organic Constant Currency) | | :------------------ | :-------------------------- | :-------------------------------- | :----------------------------------------- | | Total Enrollments | 491,000 to 495,000 students | 4%-5% | - | | Revenues | $1,615 million to $1,630 million | 3%-4% | 6%-7% (7%-8% excluding campus consolidations) | | Adjusted EBITDA | $489 million to $496 million | 9%-10% | 11%-13% | Corporate Information Conference Call Laureate hosted an earnings conference call on July 31, 2025, at 8:30 am ET, with interested parties able to register to receive dial-in information, and a webcast replay, press release, and slides available on the Investor Relations section of Laureate's website - Earnings conference call held on July 31, 2025, at 8:30 am ET[19] - Webcast, replays, press release, and related slides are available on Laureate's Investor Relations website (www.laureate.net)[19](index=19&type=chunk) Forward-Looking Statements This section serves as a cautionary note, stating that the press release contains forward-looking statements regarding future events and results, which are subject to risks and uncertainties, actual results may differ materially from these statements, and the company does not undertake to publicly update or revise them, except as required by law - Press release includes forward-looking statements concerning future events or results, identifiable by words such as 'believes,' 'expects,' 'plans,' 'estimates,' or 'anticipates'[20] - Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations[20] - The company does not undertake to publicly update or revise forward-looking statements, except as required by law[20] Presentation of Non-GAAP Measures Laureate uses several non-GAAP financial measures, including Adjusted EBITDA, Adjusted net income, Adjusted EPS, total cash and cash equivalents net of debt (net cash), Free Cash Flow, and Adjusted EBITDA to Unlevered Free Cash Flow Conversion, which are provided to offer better visibility into core operating performance, trends, and underlying earnings, as they exclude items not indicative of core results - Laureate provides non-GAAP measures (Adjusted EBITDA, Adjusted net income, Adjusted EPS, net cash, Free Cash Flow, Adjusted EBITDA to Unlevered Free Cash Flow Conversion) to help understand and evaluate core operating performance and trends[21][27] - Adjusted EBITDA consists of net income (loss) before various non-operating and non-cash items, providing a useful measure for period-to-period comparisons of core business[22][23] - Adjusted net income and Adjusted EPS provide insight into earnings from core operations by excluding items like discrete tax items, foreign currency exchange, and loss on disposal of subsidiaries[24] About Laureate Education, Inc. Laureate Education, Inc. operates five higher education institutions in Mexico and Peru, serving over 470,000 students, focusing on academic quality, innovation, market-leading employability outcomes, and increasing access to higher education - Operates five higher education institutions across Mexico and Peru[28] - Enrolls more than 470,000 students in high-quality undergraduate, graduate, and specialized degree programs through campus-based and online learning[28] - Committed to academic quality, innovation, market-leading employability outcomes, and making higher education more accessible[28] Financial Statements and Reconciliations Key Enrollment Metrics For the six months ended June 30, 2025, Laureate reported a 7% increase in new enrollments and a 6% increase in total enrollments year-over-year, with Mexico seeing new enrollments up 6% and total enrollments up 7%, while Peru experienced new enrollments up 8% and total enrollments up 6% New and Total Enrollments by Segment (YTD Q2 2025 vs YTD Q2 2024) | | YTD 2Q 2025 | YTD 2Q 2024 | Change | As of 06/30/2025 | As of 06/30/2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | New Enrollments | | | | | | | | Mexico | 65,600 | 61,700 | 6 % | | | | | Peru | 63,400 | 58,600 | 8 % | | | | | Laureate | 129,000 | 120,300 | 7 % | | | | | Total Enrollments | | | | | | | | Mexico | | | | 237,600 | 223,000 | 7 % | | Peru | | | | 234,500 | 221,200 | 6 % | | Laureate | | | | 472,100 | 444,200 | 6 % | Consolidated Statements of Operations The consolidated statements of operations show that for Q2 2025, revenue increased by $25.0 million to $524.2 million, while for the six months, revenue decreased by $14.3 million to $760.3 million, net income for Q2 2025 was $97.4 million (EPS $0.65), down from $128.4 million in Q2 2024, and for the six months, net income was $77.9 million (EPS $0.50), down from $117.5 million in the prior year, largely due to foreign currency exchange losses Consolidated Statements of Operations (Key Figures) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change ($M) | H1 2025 ($M) | H1 2024 ($M) | Change ($M) | | :-------------------------------- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | 524.2 | 499.2 | 25.0 | 760.3 | 774.6 | (14.3) | | Operating income | 193.3 | 166.6 | 26.7 | 180.1 | 177.7 | 2.4 | | Net income | 97.4 | 128.4 | (31.0) | 77.9 | 117.5 | (39.6) | | Basic earnings per share | 0.65 | 0.83 | (0.18) | 0.51 | 0.75 | (0.24) | | Diluted earnings per share | 0.65 | 0.83 | (0.18) | 0.50 | 0.75 | (0.25) | Revenue and Adjusted EBITDA by Segment For Q2 2025, Mexico's revenue decreased 1% reported but increased 13% organic constant currency, while Peru's revenue increased 9% reported and 7% organic constant currency, Adjusted EBITDA for Mexico increased 19% reported (37% organic constant currency) and for Peru increased 11% reported (9% organic constant currency), for the six months, Mexico's revenue decreased 6% reported (10% organic constant currency), and Peru's revenue increased 3% reported (1% organic constant currency), Adjusted EBITDA for Mexico increased 2% reported (20% organic constant currency), while Peru's decreased 1% reported (3% organic constant currency), and foreign currency fluctuations had a significant negative impact on reported figures, especially for Mexico Q2 2025 Revenue and Adjusted EBITDA by Segment | Metric | 2025 ($M) | 2024 ($M) | Reported % Change | Organic Constant Currency % Change | FX Impact ($M) | | :------------------ | :--- | :--- | :--- | :--- | :--- | | Revenues | | | | | | | Mexico | 217.4 | 218.6 | (1)% | 13% | (30.5) | | Peru | 306.7 | 280.6 | 9% | 7% | 6.3 | | Total Revenues | 524.2 | 499.2 | 5% | 10% | (24.2) | | Adjusted EBITDA | | | | | | | Mexico | 57.4 | 48.2 | 19% | 37% | (8.7) | | Peru | 167.2 | 150.3 | 11% | 9% | 3.4 | | Total Adjusted EBITDA | 214.5 | 186.9 | 15% | 18% | (5.3) | H1 2025 Revenue and Adjusted EBITDA by Segment | Metric | 2025 ($M) | 2024 ($M) | Reported % Change | Organic Constant Currency % Change | FX Impact ($M) | | :------------------ | :--- | :--- | :--- | :--- | :--- | | Revenues | | | | | | | Mexico | 406.6 | 432.7 | (6)% | 10% | (68.8) | | Peru | 353.6 | 341.9 | 3% | 1% | 7.0 | | Total Revenues | 760.3 | 774.6 | (2)% | 6% | (61.8) | | Adjusted EBITDA | | | | | | | Mexico | 110.4 | 108.1 | 2% | 20% | (19.7) | | Peru | 128.4 | 129.6 | (1)% | (3)% | 2.9 | | Total Adjusted EBITDA | 219.8 | 217.5 | 1% | 9% | (16.8) | Consolidated Balance Sheets As of June 30, 2025, Laureate's total assets increased to $2,035.9 million from $1,862.1 million at December 31, 2024, driven by higher cash and cash equivalents, receivables, property and equipment, and goodwill, total liabilities also increased to $983.2 million, while total stockholders' equity grew to $1,051.4 million Consolidated Balance Sheet (Key Figures) | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | Change ($M) | | :-------------------------------- | :--- | :--- | :--- | | Cash and cash equivalents | 135.3 | 91.4 | 43.9 | | Total assets | 2,035.9 | 1,862.1 | 173.8 | | Total liabilities | 983.2 | 903.5 | 79.7 | | Total stockholders' equity | 1,051.4 | 957.1 | 94.3 | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities significantly increased to $131.8 million from $73.4 million in the prior year, primarily due to changes in working capital and unrealized foreign currency exchange, net cash used in investing activities decreased to $17.7 million, while net cash used in financing activities substantially increased to $73.8 million, mainly due to common stock repurchases Consolidated Statements of Cash Flows (Key Figures) | Metric | H1 2025 ($M) | H1 2024 ($M) | Change ($M) | | :-------------------------------- | :--- | :--- | :--- | | Net cash provided by operating activities | 131.8 | 73.4 | 58.4 | | Net cash used in investing activities | (17.7) | (22.6) | 4.9 | | Net cash used in financing activities | (73.8) | (8.3) | (65.5) | | Net change in Cash and cash equivalents | 44.2 | 39.6 | 4.6 | Non-GAAP Reconciliations This section provides detailed reconciliations from GAAP net income to various non-GAAP measures, including Adjusted EBITDA, Adjusted net income, and Adjusted EPS, for both the three and six months ended June 30, 2025 and 2024, with key adjustments including income tax expense, foreign currency exchange loss/gain, interest expense/income, depreciation and amortization, and share-based compensation Net Income to Adjusted EBITDA Reconciliation Net Income to Adjusted EBITDA Reconciliation (Q2 & H1) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | H1 2025 ($M) | H1 2024 ($M) | | :-------------------------------- | :--- | :--- | :--- | :--- | | Net income | 97.4 | 128.4 | 77.9 | 117.5 | | Plus: Income tax expense | 69.4 | 63.1 | 71.9 | 73.0 | | Plus: Foreign currency exchange loss (gain), net | 25.6 | (27.5) | 28.8 | (21.8) | | Plus: Interest expense | 3.1 | 5.1 | 5.5 | 9.8 | | Less: Interest income | (1.4) | (2.0) | (2.9) | (3.9) | | Plus: Depreciation and amortization | 17.7 | 17.4 | 33.7 | 35.5 | | Plus: Share-based compensation expense | 3.5 | 2.9 | 5.9 | 4.3 | | Adjusted EBITDA | 214.5 | 186.9 | 219.8 | 217.5 | Net Income to Adjusted Net Income and Adjusted EPS Reconciliation (Three Months) Net Income to Adjusted Net Income and Adjusted EPS Reconciliation (Q2) | Metric | Q2 2025 ($M) | Q2 2025 (per share) | Q2 2024 ($M) | Q2 2024 (per share) | | :-------------------------------- | :--- | :--- | :--- | :--- | | Net income | 97.4 | 0.65 | 128.4 | 0.83 | | Plus: Discrete tax items | (4.7) | (0.03) | — | — | | Plus: Foreign currency exchange loss (gain), net | 25.6 | 0.17 | (27.5) | (0.18) | | Adjusted net income | 118.3 | 0.79 | 100.5 | 0.65 | | Diluted weighted average shares outstanding | | 146.8 | | 154.4 | Net Income to Adjusted Net Income and Adjusted EPS Reconciliation (Six Months) Net Income to Adjusted Net Income and Adjusted EPS Reconciliation (H1) | Metric | H1 2025 ($M) | H1 2025 (per share) | H1 2024 ($M) | H1 2024 (per share) | | :-------------------------------- | :--- | :--- | :--- | :--- | | Net income | 77.9 | 0.50 | 117.5 | 0.75 | | Plus: Discrete tax items | (4.7) | (0.03) | — | — | | Plus: Loss on disposal of subsidiaries, net | — | — | 3.1 | 0.02 | | Plus: Foreign currency exchange loss (gain), net | 28.8 | 0.19 | (21.8) | (0.14) | | Adjusted net income | 101.7 | 0.66 | 98.4 | 0.63 | | Diluted weighted average shares outstanding | | 149.8 | | 156.0 |