Laureate Education(US:LAUR)2022-05-08 08:00Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $210 million, with adjusted EBITDA at $27 million, both exceeding previous guidance [17] - On an organic and constant currency basis, revenue increased by 9% year-over-year, while adjusted EBITDA grew by 37% year-over-year [18] - Adjusted for the timing of the academic calendar in Mexico, revenue was up 13% [20] Business Line Data and Key Metrics Changes - New enrollments increased by 9% year-over-year, and total enrollments were up 11% [7] - Peru's revenue experienced a 17% year-over-year constant currency growth, driven by favorable retention rates and primary new enrollment intake [18] - Mexico's revenue growth for the quarter was 6% on a constant currency basis, with a 13% increase when adjusted for the timing of class starts [20] Market Data and Key Metrics Changes - The company reported strong performance in both Mexico and Peru, benefiting from COVID recovery and increased demand for digital learning [8][9] - Peru's Q1 new enrollments were 49,000, which was 19% greater than pre-COVID Q1 2019 intake [19] Company Strategy and Development Direction - The company aims to deliver affordable, high-quality education and plans to provide 40% to 60% of taught hours online across its institutions [10][9] - The focus remains on enhancing digital capabilities and maintaining strong brand reputation in Mexico and Peru [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth momentum and the ability to manage inflationary pressures due to locked contracts [22][23] - The updated guidance for 2022 reflects expected total enrollment growth of 6% to 7% and revenue growth of 9% to 11% [24] Other Important Information - The company has approximately $40 million remaining in share purchase authorization and plans to utilize this capacity in 2022 [15] - The balance sheet as of March 31 showed a net cash position of $138 million [21] Q&A Session Summary Question: Current percentage of teaching hours delivered online - Management indicated that the current model is geared towards 40% to 60% online teaching hours, which aligns with their expectations [30] Question: COVID-19 situation in Mexico and Peru - Management confirmed that while there are cases, operations continue with full face-to-face schedules and necessary precautions [31] Question: Wage inflation impact - The majority of the cost structure is contractual, providing good visibility and manageable exposure to inflation [32] Question: Insights on upcoming intake period in Mexico - The C3 intake in Mexico is progressing well, with early execution meeting expectations [34] Question: Tuition increases for the fall - Pricing is expected to be at inflation or inflation plus for all brands, with some mix shifts anticipated [35] Question: Discounting or scholarships in Peru - Discounts in Peru were in line with prior periods, with smaller discounts relative to Mexico [38] Question: Free cash flow expectations - Free cash flow is expected to follow intake patterns, with Q1 and Q3 being larger periods for cash flow generation [39] Question: Timing of expenses in Q1 - A shift in the academic calendar resulted in $8 million less revenue being booked in Q1, affecting reported figures [41]