Adtalem's Q2 Earnings & Revenues Top Estimates, 2025 View Up, Stock Up

Core Viewpoint - Adtalem Global Education Inc. (ATGE) reported better-than-expected results for the second quarter of fiscal 2025, with earnings and revenues surpassing estimates and showing year-over-year growth, primarily driven by strong enrollment growth and strategic initiatives [1][3]. Financial Performance - Adjusted earnings were $1.81 per share, exceeding the consensus estimate of $1.39 by 30.2% and increasing 47.2% from $1.23 in the same quarter last year [3]. - Revenues reached $447.7 million, beating the consensus estimate of $429 million by 4.4% and reflecting a year-over-year increase of 13.9% [3]. - Adjusted operating income rose 34.2% to $75.6 million, with an adjusted operating margin expanding by 350 basis points to 22.7% [4]. - Adjusted EBITDA was $125 million, up 35.1% year over year, with an adjusted EBITDA margin expanding 440 basis points to 27.9% [5]. Enrollment Growth - Total student enrollment increased by 11.6% year over year to 91,264 students, surpassing the Zacks model prediction of 88,001 [4]. - Chamberlain University saw revenues increase by 17.9% to $181 million, with enrollment rising 11.5% to 39,691 students [6]. - Walden University generated revenues of $171.3 million, up 16.7% year over year, with enrollment increasing 13.2% to 46,399 students [8]. - The Medical and Veterinary segment experienced a revenue increase of 2.8% to $95.4 million, but total enrollment fell 0.7% to 5,174 students [9]. Liquidity and Cash Flow - As of December 31, 2024, cash and cash equivalents were $193.6 million, down from $219.3 million as of June 30, 2024 [10]. - Long-term debt increased slightly to $649.9 million from $648.7 million [10]. - Cash provided by operating activities totaled $70.3 million for the first six months of fiscal 2025, down from $81.9 million in the prior year [10]. Fiscal 2025 Guidance - For fiscal 2025, ATGE raised its revenue expectations to a range of $1,730-$1,760 million, up from the previous estimate of $1,690-$1,730 million [11]. - Adjusted earnings guidance was also raised to a range of $6.10-$6.30 per share, compared to the earlier prediction of $5.75 to $5.95 [11].