Perdoceo Education (PRDO) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial and Operational Highlights 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 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] - 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] 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 | $1.19 | +15.1% | Key Operating Metrics The company's key operating metrics showed significant growth, with total student enrollments increasing by 17.4% year-over-year, primarily due to the inclusion of USAHS and organic growth at CTU and AIUS, driving a 25.7% increase in quarterly revenue Total Student Enrollments Total Student Enrollments as of June 30 | Institution | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | CTU | 31,900 | 29,700 | 7.4% | | AIUS | 10,600 | 9,900 | 7.1% | | USAHS | 4,000 | - | NM | | Total | 46,500 | 39,600 | 17.4% | Revenue - The acquisition of USAHS was completed on December 2, 2024, hence its results are not present in the prior year's comparative period[8] Revenue by Segment ($ 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 | $335,004 | 26.1% | Profitability Analysis Profitability improved year-over-year, with operating income increasing by 11.7% for both the second quarter and year-to-date, and adjusted operating income showing even stronger growth, translating to higher net income and earnings per share Operating Income Operating Income by Segment ($ 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) 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 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 $591.5 million at the end of 2024[20] Selected Cash Flow Items ($ 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 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] - The quarterly dividend was increased by 15.4% to $0.15 per share, marking the second increase since dividends began in 2023[18] - 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] Business Outlook 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 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] 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) 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 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 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 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 | $9,868 | Selected Segment Information The Colorado Technical University (CTU) segment remains the primary driver of profitability with a 39.2% operating margin in Q2 2025, while the newly acquired University of St. Augustine for Health Sciences (USAHS) contributed significantly to revenue but recorded an operating loss during its integration Q2 2025 Segment Performance ($ 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 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 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] 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 |