Adtalem Education (ATGE)2024-10-29 23:58Financial Data and Key Metrics Changes - Revenue for the quarter reached $417 million, reflecting a 13% increase compared to last year [8] - Adjusted EBITDA margin expanded by 140 basis points, leading to a 39% jump in adjusted earnings per share to $1.29 [8][25] - Adjusted net income for the quarter was $50.5 million, up 28.3% compared to last year [27] Business Line Data and Key Metrics Changes - Chamberlain reported first quarter revenue of $167.9 million, an increase of 17.8% compared to the prior year, driven by a total student enrollment increase of 11.7% [28] - Walden's first quarter revenue was $161.5 million, a 14.1% increase year-over-year, with total student enrollment up 12.2% [31] - Medical and Veterinary segment revenue increased by 3.9% to $88 million, with total enrollment growth trend improving [33] Market Data and Key Metrics Changes - Total enrollment improved for the 10th consecutive quarter, up 11.2% year-over-year, bringing total enrollment to over 90,000 students [9] - Chamberlain's BSN online option is now available in 36 states with over 2,000 students enrolled [14] - Walden remains a national leader in nursing with over 16,000 nursing students currently enrolled [16] Company Strategy and Development Direction - The company has commenced year two of its three-year "Growth with Purpose" strategy, focusing on operational excellence and generating substantial value for stakeholders [7] - Investments in marketing and student support are aimed at maintaining high persistence rates and enhancing the student experience [30][47] - The company is expanding its reach through partnerships and innovative programs, including a new partnership with the Oncology Nursing Society [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future enrollment trends and the strong demand for medical education in the U.S. [20] - The fiscal year 2025 guidance has been raised to project revenue between $1.69 billion and $1.73 billion, with adjusted earnings per share of $5.75 to $5.95 [21][38] - Management noted that the marketing investments are expected to deliver positive returns through increased future demand and strong persistence [30][51] Other Important Information - Free cash flow for the first three months of fiscal year 2025 was $79 million, with a trailing 12-month free cash flow of $243 million [35] - The balance sheet remains healthy, ending the first quarter with $265 million in cash and equivalents [36] - The company repurchased 462,000 shares during the quarter, continuing its share repurchase authorization [37] Q&A Session Summary Question: Growth acceleration at Chamberlain - Management noted positive trends in new enrollment, particularly in the post-licensure RN/BSN category, and believes this trend is sustainable [42][43] Question: Marketing expense allocation - Marketing resources are allocated dynamically based on attractive opportunities, with a significant portion shifted to Q2 [44][45] Question: Revenue growth and operating leverage - Despite increased marketing investments, management indicated that there are additional investments in student support impacting operating leverage [46][47] Question: Full year guidance and risk factors - Management clarified that the full year guidance reflects an improved outlook for revenue, with strong momentum across new enrollment [58][59]