Company Overview - Laureate Education, Inc. operates five higher education institutions in Mexico and Peru, enrolling over 470,000 students in various degree programs [25] First Quarter 2025 Highlights - New enrollments decreased by 2% compared to Q1 2024, while total enrollments increased by 4% [4] - Adjusted for semester start date timing, new enrollments increased by 7% and total enrollments by 6% [4] - Revenue for Q1 2025 was $236.2 million, a decrease of 14% from Q1 2024 [6][28] - Adjusted EBITDA for Q1 2025 was $5.4 million, down 82% from $30.6 million in Q1 2024 [8][28] Enrollment Performance - In Peru, new enrollments increased by 6% during the primary intake, while total enrollments grew by 5% [5] - In Mexico, new enrollments rose by 8% and total enrollments by 7% during the secondary intake [5] Financial Performance - Operating loss for Q1 2025 was $(13.2) million, compared to operating income of $11.1 million in Q1 2024, a change of $24.3 million [7] - Net loss for Q1 2025 was $(19.6) million, compared to a net loss of $(10.8) million in Q1 2024 [7] - Basic and diluted loss per share for Q1 2025 was $(0.13), compared to $(0.07) in Q1 2024 [7] Balance Sheet and Capital Structure - As of March 31, 2025, the company had $109.8 million in cash and cash equivalents and gross debt of $114.6 million, resulting in net debt of $4.8 million [9] - The company repurchased approximately $42 million of its common stock during Q1 2025, with $56 million remaining under its stock repurchase program [10] 2025 Outlook - The company updated its 2025 guidance, expecting total enrollments to be between 491,000 and 495,000 students, reflecting a growth of 4%-5% compared to 2024 [15] - Revenue is expected to be in the range of $1,560 million to $1,575 million, indicating growth of 0%-1% on an as-reported basis and 6%-7% on an organic constant currency basis [15] - Adjusted EBITDA is projected to be between $473 million and $480 million, reflecting growth of 5%-7% on an as-reported basis and 11%-13% on an organic constant currency basis [15]

Enrollment Trends - New enrollments decreased by 2%, but increased by 7% when adjusted for semester start dates[4] - Total enrollments increased by 4%, with a 6% increase when adjusted for semester start dates[4] - Full-year 2025 guidance includes total enrollments expected to be between 491,000 and 495,000 students, reflecting a growth of 4%-5%[19] - Total enrollments in Mexico increased by 8% year-over-year, reaching 250,200 as of March 31, 2025[28] - Total enrollments in Peru decreased by 9% year-over-year, totaling 226,800 as of March 31, 2025[28] Financial Performance - Reported revenue for Q1 2025 was $236.2 million, a decrease of 14% compared to Q1 2024[7] - Total revenues for Q1 2025 were $236.2 million, a decrease of 14% compared to $275.4 million in Q1 2024[30] - Revenue for full-year 2025 is expected to be in the range of $1,560 million to $1,575 million, indicating growth of 0%-1% on an as-reported basis[19] - Adjusted EBITDA for Q1 2025 was $5.4 million, down from $30.6 million in Q1 2024, impacted by $23 million due to academic calendar timing[8] - Adjusted EBITDA for Q1 2025 was $5.4 million, down 82% from $30.6 million in Q1 2024[38] - Adjusted EBITDA for full-year 2025 is expected to be between $473 million and $480 million, reflecting growth of 5%-7% on an as-reported basis[19] Losses and Expenses - Operating loss for Q1 2025 was $(13.2) million, compared to operating income of $11.1 million in Q1 2024[7] - Net loss for Q1 2025 was $(19.6) million, compared to a net loss of $(10.8) million in Q1 2024[7] - Basic and diluted loss per share for Q1 2025 was $(0.13), compared to $(0.07) in Q1 2024[30] - The adjusted net loss for Q1 2025 was $16.6 million, significantly higher than the adjusted net loss of $2.1 million in Q1 2024, indicating a substantial decline in performance[40] - The diluted loss per share for Q1 2025 was $0.11, compared to $0.01 in Q1 2024, reflecting a deterioration in earnings per share[40] - For Q1 2025, the company reported a net loss of $19.6 million, compared to a net loss of $10.8 million in Q1 2024, representing an increase of 81.5% year-over-year[40] Cash and Liabilities - As of March 31, 2025, Laureate had $109.8 million in cash and cash equivalents, with net debt of $4.8 million[9] - Cash and cash equivalents increased to $109.8 million as of March 31, 2025, up from $91.4 million at the end of 2024[35] - Total liabilities rose to $950.8 million as of March 31, 2025, compared to $903.5 million at the end of 2024[35] Costs and Expenses - Direct costs for Q1 2025 were $238.4 million, down from $254.0 million in Q1 2024, reflecting a decrease of 6.1%[30] - Interest expense decreased to $2.4 million in Q1 2025 from $4.7 million in Q1 2024, a reduction of 48.9%[30] Foreign Currency Impact - The company experienced a foreign currency exchange loss of $3.2 million in Q1 2025, which contributed to the overall financial results[40] Share Count - The diluted weighted average shares outstanding decreased from 157.0 million in Q1 2024 to 147.6 million in Q1 2025, indicating a reduction in share count[40]

Enrollment and Revenue - The company has approximately 477,000 students enrolled across five institutions in Mexico and Peru, with revenues of $236.2 million for the year-to-date 2025, where Mexico contributes 80% and Peru contributes 20%[71]. - The higher education market in Mexico is characterized by a significant imbalance, with private education providers constituting approximately 39% of the total market, while in Peru, private universities account for about 76%[75]. - The majority of revenue is derived from tuition and educational services, with changes in revenue driven by student enrollment and pricing strategies[78]. - Enrollment is a key business metric, indicating future revenue trends, and is influenced by new enrollments, continuing student enrollments, and attrition rates[74]. - The company emphasizes maintaining and increasing tuition rates and student enrollments to support financial performance amid competitive pressures[66]. - Revenues decreased by $39.2 million to $236.2 million for the three months ended March 31, 2025, a 14% decline compared to $275.4 million in the same period of 2024[87]. - The Mexico segment reported revenues of $189.3 million, a 12% decrease from $214.1 million in the prior year, while the Peru segment's revenues decreased by 23% to $46.9 million[96]. - Organic enrollment in the Mexico segment increased by 8%, contributing an additional $15.7 million in revenues despite the overall decline[101]. Financial Performance - Adjusted EBITDA fell to $5.4 million for the 2025 fiscal quarter, an 82% decrease from $30.6 million in the 2024 fiscal quarter[94]. - The operating loss for the 2025 fiscal quarter was $(13.2) million, a significant decline from an operating income of $11.1 million in the previous year[89]. - The overall net loss attributable to Laureate Education, Inc. was $(19.5) million, an 81% increase in loss compared to $(10.8) million in the previous year[85]. - Income tax expense decreased by $7.4 million to $2.5 million, primarily due to larger losses in Peru during the 2025 fiscal quarter[91]. - The Peru segment's Adjusted EBITDA decreased by 87% to $(38.8) million, largely due to unfavorable academic calendar timing[104]. - Corporate revenues remained minimal at $0.1 million, with Adjusted EBITDA slightly declining by 2% to $(8.8) million[106]. Costs and Expenses - Direct costs are primarily variable and trend with enrollment, including labor, operating costs, and marketing expenses aimed at future enrollments[79]. - The consolidated income tax provision is impacted by federal, state, and foreign income taxes, with the effective tax rate fluctuating based on the mix of earnings[83]. Cash Flow and Capital Management - As of March 31, 2025, the company had cash and cash equivalents of $109.8 million, with $102.9 million held by foreign subsidiaries[114]. - The company generated $57.8 million in cash from operating activities for the three months ended March 31, 2025, an increase of $24.6 million from $33.2 million in the same period of 2024[124]. - Total capital expenditures for the three months ended March 31, 2025, were $4.6 million, a decrease from $15.9 million in the same period of 2024[120]. - Cash used in investing activities decreased by $11.4 million to $(4.6) million for the 2025 fiscal quarter compared to $(16.0) million for the 2024 fiscal quarter[125]. - Cash flow from financing activities resulted in an outflow of $(34.6) million for the 2025 fiscal quarter, a change of $53.0 million from an inflow of $18.4 million in the 2024 fiscal quarter[126]. - The company maintains a revolving credit facility with a borrowing capacity of up to $155.0 million, of which $30.0 million was utilized as of March 31, 2025[111]. - The company had $30.0 million in borrowings under the Senior Secured Credit Facility and $33.7 million in other debt as of March 31, 2025[116]. - The company’s finance lease obligations and sale-leaseback financings amounted to $50.9 million as of March 31, 2025[116]. - Restricted cash balances totaled $7.1 million as of March 31, 2025, up from $6.5 million as of December 31, 2024[113]. Strategic Plans and Risks - The company plans to grow operations organically by adding new programs, expanding target demographics, and increasing capacity at existing and new campus locations[72]. - The company faces risks associated with operating in Mexico and Peru, including economic, political, and regulatory challenges, as well as foreign currency fluctuations[72]. - The decrease in revenues was primarily due to a $37.6 million negative impact from foreign currency exchange rates, mainly from the weakening of the Mexican peso against the USD[87]. - The company announced a stock repurchase program of up to $100 million, with approximately $56.1 million remaining to be repurchased as of March 31, 2025[121].

Financial Data and Key Metrics Changes - For Q4 2024, revenue was $423 million, and adjusted EBITDA was $141 million, representing a 10% year-over-year increase in revenue on an organic constant currency basis, driven by a 5% increase in total enrollment volume [21][22] - Full year 2024 revenue was $1.567 billion, with adjusted EBITDA of $450 million, resulting in an adjusted EBITDA margin of 28.7%, a historic high for the company [23][24] - Full year net income was $296 million, leading to earnings per share of $1.92 [24] Business Line Data and Key Metrics Changes - In Mexico, new enrollments increased by 4% for the year, with revenue growth of 10% driven by an 8% increase in average total enrollments [29] - In Peru, new enrollments increased by 6% for the year, with revenue growth of 4% driven by a 2% increase in average total enrollments [32] Market Data and Key Metrics Changes - The company remains the largest higher education provider in Mexico and Peru, with strong demand for quality higher education driven by rising participation rates and strong wage premiums for graduates [9][14] - The economic outlook for Peru is positive, with GDP growth expected to reach approximately 3% in 2025, while Mexico's GDP growth is anticipated to be around 1% [16][53] Company Strategy and Development Direction - The company plans to open four new campuses for its value brands, with two expected to launch in 2025, marking the first new campus launches since 2019 [13] - Continued investment in digital education is a priority, alongside maintaining a strong focus on academic quality and student outcomes [36][44] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the geopolitical uncertainties in Mexico, noting that while there may be some impact on enrollments, the company has proven resilient in various economic conditions [15][50] - The company anticipates flat to slightly down year-over-year reported revenues for 2025, but expects growth in adjusted EBITDA and unlevered free cash flow due to local currency revenue growth and margin expansion efforts [19][41] Other Important Information - The company returned over $100 million to shareholders in 2024 and has a strong balance sheet with a net debt position of $11 million [8][33] - New non-GAAP metrics for adjusted net income and adjusted earnings per share were introduced to provide a clearer picture of the company's underlying profitability [25][26] Q&A Session Summary Question: Impact of tariffs and economic environment in Mexico - Management acknowledged that while geopolitical discussions around tariffs do not directly impact the business, a slowdown in foreign direct investment has affected GDP growth, which in turn impacts enrollments [47][49] Question: Capital allocation policy - The company aims for a 50% free cash flow conversion on EBITDA and plans to return 50% of available free cash flow to shareholders after supporting growth [54][56] Question: Tax rate and Peru intake - The effective tax rate is expected to be below 40%, and management is optimistic about the upcoming intake period in Peru, despite some lingering effects from the previous recession [60][63][64]