Adtalem Education (ATGE) - 2025 Q4 - Annual Results

Performance Highlights Adtalem Global Education reported exceptional results for fiscal year 2025, driven by strong year-over-year growth in total enrollment (up 10.2% in Q4) and revenue (up 12.9% for the full year), with Adjusted EPS increasing 33.1% to $6.67 Fiscal Year 2025 Key Performance Indicators | Metric | Fiscal Year 2025 | YoY Growth | | :--- | :--- | :--- | | Revenue | $1,788.3 million | 12.9% | | Diluted EPS | $6.18 | - | | Adjusted EPS | $6.67 | 33.1% | | Adjusted EBITDA | $459.7 million | 21.8% | Fourth Quarter 2025 Key Performance Indicators | Metric | Fourth Quarter 2025 | YoY Growth | | :--- | :--- | :--- | | Revenue | $457.1 million | 11.5% | | Total Student Enrollment | 91,780 | 10.2% | | Adjusted EBITDA | $110.2 million | 13.2% | - The company's strong performance is attributed to its 'Growth with Purpose' strategy, focusing on disciplined investments, positive student outcomes, and strategic partnerships to create pathways from education to employment in the healthcare sector[7] Financial Highlights For the full fiscal year 2025, Adtalem's revenue grew 12.9% to $1.79 billion, and net income increased significantly to $237.1 million from $136.8 million in the prior year, with Adjusted EBITDA margin expanding to 25.7% Fiscal Year 2025 Financial Results ($ in millions) | Metric | FY 2025 | FY 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $1,788.3 | $1,584.7 | 12.9% | | Operating Income | $341.5 | $217.1 | 57.3% | | Net Income | $237.1 | $136.8 | 73.3% | | Diluted EPS | $6.18 | $3.39 | 82.3% | | Adjusted EPS | $6.67 | $5.01 | 33.1% | | Adjusted EBITDA | $459.7 | $377.5 | 21.8% | Fourth Quarter 2025 Financial Results ($ in millions) | Metric | Q4 2025 | Q4 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $457.1 | $409.9 | 11.5% | | Operating Income | $76.9 | $68.5 | 12.3% | | Net Income | $54.2 | $49.4 | 9.7% | | Diluted EPS | $1.44 | $1.28 | 12.5% | | Adjusted EPS | $1.66 | $1.37 | 21.2% | | Adjusted EBITDA | $110.2 | $97.4 | 13.2% | Business and Segment Highlights All three operating segments demonstrated enrollment growth in Q4 2025, with Walden University leading at 15.0%, followed by Chamberlain University at 5.8% and Medical and Veterinary at 1.0%, supported by strategic partnerships and accreditations Business Highlights Adtalem advanced its strategic goals through key partnerships and academic achievements, including a nursing talent pipeline program, 'Opportunity Colleges and Universities' recognition, and prestigious accreditations for its programs - Chamberlain University and SSM Health launched the 'Aspiring Nurse Program' to fund nursing education and create a talent pipeline, aiming to graduate over 400 new nurses annually[8][10][11] - Walden University and Chamberlain University were recognized as 'Opportunity Colleges and Universities' in the 2025 Carnegie Classification for delivering strong economic outcomes for graduates[11] - Walden University's Doctor of Social Work (DSW) program became one of only four in the U.S. to be accredited by the Council on Social Work Education (CSWE)[11] - The Medical and Veterinary schools graduated over 1,100 students in fiscal year 2025 and launched a partnership with Massachusetts General Hospital to offer a Master's in Healthcare Data Analytics[11] Chamberlain Segment Performance Chamberlain University's revenue grew 14.6% to $725.8 million for the full fiscal year, driven by a 5.8% increase in total student enrollment in Q4, indicating strong annual performance despite quarterly fluctuations in adjusted operating income - Total student enrollment increased 5.8% year-over-year in Q4 to 38,891, driven by growth in both pre-licensure and post-licensure nursing programs[12] Chamberlain Financial Performance ($ in millions) | Period | Revenue | % Change | Adj. Operating Income | % Change | Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Q4 2025 | $184.3 | 10.3% | $35.7 | (11.7)% | $45.0 | (4.8)% | | FY 2025 | $725.8 | 14.6% | $153.4 | 11.3% | $191.4 | 15.2% | Walden Segment Performance Walden University was a key growth driver, with a 15.0% year-over-year increase in Q4 student enrollment, fueling a 16.5% rise in full-year revenue to $693.4 million and significant operating leverage with adjusted operating income surging by 40.6% - Total student enrollment surged 15.0% year-over-year in Q4 to 48,116, with growth across both healthcare and non-healthcare programs[13] Walden Financial Performance ($ in millions) | Period | Revenue | % Change | Adj. Operating Income | % Change | Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Q4 2025 | $182.2 | 16.6% | $46.8 | 25.1% | $52.7 | 28.0% | | FY 2025 | $693.4 | 16.5% | $183.6 | 40.6% | $206.5 | 40.7% | Medical and Veterinary Segment Performance The Medical and Veterinary segment achieved a 1.0% increase in Q4 student enrollment, leading to a 3.7% rise in full-year revenue to $369.1 million, though full-year adjusted operating income and adjusted EBITDA saw slight declines - Total student enrollment saw a modest increase of 1.0% year-over-year in Q4 to 4,773[14] Medical and Veterinary Financial Performance ($ in millions) | Period | Revenue | % Change | Adj. Operating Income | % Change | Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Q4 2025 | $90.6 | 4.7% | $15.1 | 25.8% | $20.0 | 21.7% | | FY 2025 | $369.1 | 3.7% | $69.3 | (3.2)% | $88.8 | (0.1)% | Capital Allocation and Financial Position Adtalem maintained a disciplined capital allocation strategy in fiscal 2025, completing a $211 million share repurchase authorization, initiating a new $150 million authorization, and improving its debt profile to achieve a low net leverage ratio of 0.8x - Completed a prior share repurchase authorization by buying back $211 million of shares[5] - A new $150 million share repurchase authorization was approved by the Board, extending through May 2028[5] - Strengthened the balance sheet by repricing a $253 million Term Loan B to reduce the interest rate by 75 bps and repaying $100 million of the outstanding balance[5] - Ended the fiscal year with a net leverage ratio of 0.8x[5][50] Fiscal Year 2026 Outlook Adtalem has initiated guidance for fiscal year 2026, projecting continued strong growth with revenue expected between $1.90 billion and $1.94 billion, and adjusted earnings per share forecasted to be in the range of $7.60 to $7.90 Fiscal Year 2026 Guidance ($ in millions) | Metric | Guidance Range | YoY Growth (%) | | :--- | :--- | :--- | | Revenue | $1,900 - $1,940 | 6.0% - 8.5% | | Adjusted EPS | $7.60 - $7.90 | 14.0% - 18.5% | Consolidated Financial Statements The consolidated financial statements for the year ended June 30, 2025, show a stable balance sheet with total assets of $2.75 billion, a 12.9% revenue increase to $1.79 billion, and strong operating cash flow of $337.9 million supporting share repurchases and debt repayments Consolidated Balance Sheet Highlights (as of June 30, 2025, $ in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $199,601 | $219,306 | | Total Assets | $2,752,352 | $2,741,417 | | Long-term debt | $552,669 | $648,712 | | Total Liabilities | $1,318,727 | $1,372,282 | | Total Shareholders' Equity | $1,433,625 | $1,369,135 | Consolidated Income Statement Highlights (Year Ended June 30, $ in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $1,788,290 | $1,584,652 | | Operating Income | $341,542 | $217,054 | | Net Income | $237,065 | $136,777 | | Diluted EPS | $6.18 | $3.39 | Consolidated Cash Flow Highlights (Year Ended June 30, $ in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $337,899 | $295,775 | | Net cash used in investing activities | ($41,921) | ($47,850) | | Net cash used in financing activities | ($316,016) | ($301,798) | Non-GAAP Financial Measures and Reconciliations Adtalem uses non-GAAP measures such as Adjusted Net Income, Adjusted EPS, Adjusted Operating Income, and Adjusted EBITDA to provide insight into underlying business performance by excluding items like restructuring expenses, amortization of acquired intangibles, and business integration costs - The company provides non-GAAP metrics to supplement GAAP results, offering a view of ongoing operations by excluding special items such as restructuring, acquisition-related costs, and certain litigation reserves[33][34][35] FY 2025 GAAP to Non-GAAP Reconciliation Summary ($ in millions) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Operating Income | $341.5 | $28.7 | $370.2 | | Net Income | $237.1 | $18.5 | $255.6 | | Diluted EPS | $6.18 | $0.49 | $6.67 | FY 2025 Adjusted EBITDA Reconciliation Summary ($ in thousands) | Metric | Amount | | :--- | :--- | | Net Income (GAAP) | $237,065 | | Plus: Interest, Taxes, D&A, etc. | $140,289 | | Plus: Other Adjustments | $82,351 | | Adjusted EBITDA (Non-GAAP) | $459,705 |