Laureate Education(US:LAUR)2025-10-30 11:11Business Operations - The company operates a portfolio of degree-granting higher education institutions in Mexico and Peru, with approximately 511,400 students enrolled across five institutions[78]. - Private education providers constitute approximately 39% of the total higher education market in Mexico and 76% in Peru, highlighting the role of private institutions in meeting educational demand[87]. - The company plans to grow operations organically by adding new programs, expanding target demographics, and increasing capacity at existing and new campus locations[84]. Financial Performance - For the year-to-date 2025, total revenues reached $1,160.5 million, with Mexico contributing 52% ($601.5 million) and Peru contributing 48% ($558.9 million) to the total[83]. - Revenues increased by $31.6 million to $400.2 million for the three months ended September 30, 2025, representing a 9% increase compared to $368.6 million for the same period in 2024[97]. - For the nine months ended September 30, 2025, revenues increased by $17.3 million to $1,160.5 million, a 2% increase compared to $1,143.2 million in 2024[104]. - Consolidated total revenues for the three months ended September 30, 2025, were $400.2 million, representing a 9% increase from $368.6 million in 2024[117]. - Revenues from the Mexico segment for the three months ended September 30, 2025, were $194.8 million, a 7% increase from $182.5 million in 2024[120]. - Revenues from the Peru segment for the three months ended September 30, 2025, were $205.3 million, a 10% increase from $186.1 million in 2024[127]. Enrollment and Revenue Drivers - Enrollment is a key revenue indicator, with total enrollment influenced by continuing student enrollments, new student enrollments, and attrition[86]. - Revenues are primarily derived from tuition and educational services, with the main drivers of revenue changes being student enrollment and pricing adjustments[90]. - The increase in revenues was driven by higher average total organic enrollment, contributing $22.0 million, and a favorable foreign currency exchange impact of $15.8 million due to the strengthening of the Mexican peso[99]. - The increase in nine-month revenues was driven by higher average total organic enrollment, contributing $67.1 million, but was offset by a $46.0 million decrease due to unfavorable foreign currency exchange rates[106]. Costs and Expenses - Direct costs are variable and trend with enrollment, including labor, operating costs, and marketing expenses aimed at future enrollment growth[91]. - Direct costs and general and administrative expenses rose by $32.1 million to $328.7 million, primarily due to operational changes and higher enrollment, with foreign currency exchange rates increasing costs by $10.4 million[100]. - Operating income decreased by $0.5 million to $71.5 million, attributed to lower income in the Peru segment and higher corporate expenses, partially offset by increased income in the Mexico segment[101]. - Other non-operating expenses changed by $17.6 million to an expense of $(2.2) million, primarily due to a foreign currency exchange loss compared to a gain in the prior year[102]. Income and EBITDA - Net income attributable to Laureate Education, Inc. decreased by 60% to $34.5 million for the three months ended September 30, 2025, down from $85.5 million in 2024[97]. - Adjusted EBITDA for the three months ended September 30, 2025, increased by 4% to $94.8 million from $91.4 million in 2024[113]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $314.7 million, a 2% increase from $308.9 million in 2024[117]. - Adjusted EBITDA for the Mexico segment for the three months ended September 30, 2025, increased by 29% to $25.7 million from $20.0 million in 2024[121]. - Adjusted EBITDA for the Peru segment for the three months ended September 30, 2025, decreased by 2% to $78.1 million from $79.8 million in 2024[128]. Cash Flow and Capital Expenditures - Cash provided by operating activities increased by $80.8 million to $272.8 million for the nine months ended September 30, 2025, compared to $192.0 million for the same period in 2024[152]. - Total capital expenditures for the nine months ended September 30, 2025, were $36.1 million, an increase from $34.6 million in the same period of 2024[148]. - Cash used in investing activities increased to $(35.7) million for the nine months ended September 30, 2025, from $(30.5) million in 2024[153]. - Cash used in financing activities decreased by $14.8 million to $(96.9) million for the nine months ended September 30, 2025, compared to $(111.7) million in 2024[154]. Debt and Financial Position - The company’s debt obligations totaled $41.5 million as of September 30, 2025, in addition to finance lease obligations of $60.9 million[144]. - The company has a revolving credit facility providing borrowings of up to $155.0 million, with no outstanding balance as of September 30, 2025[139]. - The company was in compliance with financial covenants as of September 30, 2025, with a Consolidated Senior Secured Debt to Consolidated EBITDA ratio not exceeding 3[145]. - As of September 30, 2025, the company had cash and cash equivalents totaling $241.0 million, with $161.2 million held by foreign subsidiaries[142]. - Restricted cash balances were $5.5 million as of September 30, 2025, down from $6.5 million as of December 31, 2024[141]. Future Outlook - The company anticipates that cash flow from operations will be sufficient to meet current operating requirements for at least the next 12 months[137]. - The company intends to finance stock repurchases, with approximately $177.4 million available under the stock repurchase program as of October 30, 2025[149].