Adtalem Education (US:ATGE)2023-08-11 02:20Financial Data and Key Metrics Changes - Full year revenue reached $1.45 billion, up 5% year-over-year [9][23] - Adjusted earnings per share increased by 35% to $4.21 [9][24] - Adjusted EBITDA margin expanded to approximately 24%, a 200 basis point increase compared to fiscal year 2021 [6][9] - Free cash flow for the year was $169 million, a 27% increase year-over-year [28] Business Line Data and Key Metrics Changes - Chamberlain reported fourth quarter revenue of $144.5 million, a 3% increase year-over-year, with total student enrollment up 1.2% [25] - Walden's revenue in the fourth quarter was $138 million, a 0.7% increase, but total student enrollment decreased by 4.8% [26] - Medical and Veterinary segment revenue decreased by 1.5% to $82.1 million, with total student enrollment down 8.2% [27] Market Data and Key Metrics Changes - Total enrollment trends improved throughout the year, with a notable increase in inquiries across all institutions [11][20] - The demand for nursing programs at Chamberlain is outpacing capacity, leading to the opening of a new hybrid campus in Stockbridge, Georgia [13] Company Strategy and Development Direction - The company launched a "Growth with Purpose" strategy aimed at enhancing performance across five pillars: marketing, enrollment, retention, pricing, and programs [7][10] - Investments in adaptive learning technologies are being made to improve student outcomes [17] - The company is focused on addressing the talent deficit in U.S. healthcare through its educational programs [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to total enrollment growth by the end of fiscal year 2024, despite temporary challenges in the Medical and Veterinary segment [16][20] - The company raised its adjusted EPS guidance for fiscal 2024 to a range of $4.20 to $4.40, reflecting positive market signals [20][30] Other Important Information - The company achieved its target of $60 million in cost synergies from the Walden acquisition [24] - The Higher Learning Commission renewed Walden's national accreditation for a 10-year period [14] Q&A Session Summary Question: What were the execution problems in the medical schools and what are the remediation plans? - Management identified three dynamics affecting enrollment: a weaker May intake cycle, a larger graduating cohort, and students preparing for Step 1 USMLE. They are implementing new leadership and strategies to improve conversion rates from inquiries to enrollments [34][35] Question: What are the expected segment growth rates, particularly for Walden? - Management is optimistic about Walden's growth, especially in nursing and behavioral health programs, and expects Chamberlain to benefit from a normalized demand environment [37][38] Question: Why did total enrollment growth at Chamberlain decelerate? - The deceleration was largely driven by a larger-than-typical graduation cohort, which is seen as a positive issue [39][40] Question: Where will the investments be made this year? - Investments will focus on marketing, enrollment, retention, pricing, and new programs, with heavier spending expected in the first half of the fiscal year [42][43] Question: What is the momentum going into the new fiscal year? - Management noted improvements in persistence rates and new enrollment trends, indicating a positive start to the fiscal year [44][45] Question: What drove the raised adjusted EPS guidance? - The raised guidance reflects confidence in market signals for new enrollment and improvements in persistence rates [46][47]