Adtalem Global Education Announces Strong Fiscal Year 2024 Performance; Initiates Fiscal Year 2025 Guidance Exceeding June 2023 Investor Day Projections

Total enrollment up 10.0% YoY for fourth quarter 2024

Revenue up 9.2% YoY for fiscal year 2024

Fiscal year 2024 diluted earnings per share $3.39; Adjusted EPS $5.01, growth of 19.0% YoY

Fourth quarter and fiscal year highlights

• Revenue $409.9 million, up 12.4% year-over-year for the fourth quarter, and fiscal year revenue $1,584.7 million, up 9.2% year-over-year
• Total student enrollment 83,321, up 10.0% year-over-year for the fourth quarter
• Chamberlain University sixth straight quarter of total enrollment growth, up 10.4% year-over-year
• Walden University fourth straight quarter of total enrollment growth, up 11.3% year-over-year
• Medical and Veterinary segment third straight enrollment period of sequentially improved year-over-year total enrollment trends
• Execution against Growth with Purpose strategy, fiscal year GAAP net income $136.8 million and fiscal year adjusted EBITDA $377.5 million, up 9.9% year-over-year

Fiscal year capital allocation

• Repurchased $261 million of shares, $212 million remaining under $300 million Board authorized share repurchase program through January 2027
• Repaid $50 million of outstanding Term Loan B balance on Jan. 26, 2024; remaining $253 million Term Loan B balance repriced, reducing interest rate by 50 bps
• Net leverage 1.2x as of June 30, 2024

Fiscal year 2025 guidance

• Revenue $1,660 million to $1,700 million
• Adjusted earnings per share $5.60 to $5.85

Adtalem Global Education Inc. (NYSE:ATGE), the leading healthcare educator in the United States, today reported fourth quarter and fiscal year 2024 results (ended June 30, 2024) demonstrating disciplined operational performance with total enrollment growth resulting in strong earnings and robust cash generation.

"This year was a fundamental chapter in Adtalem's journey, further solidifying our market leading position in healthcare education. Through the rigorous implementation of our Growth with Purpose strategy, we have significantly broadened our impact culminating in 10% enrollment growth during the fourth quarter. This trajectory is a testament to our unwavering commitment to excellence," said Steve Beard, president and chief executive officer, Adtalem Global Education. "We are confident that fiscal year 2025 will set new benchmarks for Adtalem, reflected in the forward-looking guidance we have established today."

Financial Highlights

Selected financial data for the three months ended June 30, 2024:

• Revenue of $409.9 million increased 12.4% compared with the prior year.
• Operating income was $68.5 million, compared with $39.6 million in the prior year; adjusted operating income was $80.1 million, compared with $69.9 million in the prior year.
• Net income was $49.4 million, compared with $22.2 million in the prior year; adjusted net income was $52.8 million, compared with $45.3 million in the prior year.
• Diluted earnings per share was $1.28, compared with $0.50 in the prior year; adjusted earnings per share was $1.37, compared with $1.03 in the prior year.
• Adjusted EBITDA was $97.4 million, compared with $83.3 million in the prior year; adjusted EBITDA margin was 23.8%, compared with 22.8% in the prior year.

Selected financial data for the fiscal year ended June 30, 2024:

• Revenue of $1,584.7 million increased 9.2% compared with the prior year.
• Operating income was $217.1 million, compared with $168.2 million in the prior year; adjusted operating income was $308.8 million, compared with $287.6 million in the prior year.
• Net income was $136.8 million, compared with $93.4 million in the prior year; adjusted net income was $201.8 million, compared with $192.2 million in the prior year.
• Diluted earnings per share was $3.39, compared with $2.05 in the prior year; adjusted earnings per share was $5.01, compared with $4.21 in the prior year.
• Adjusted EBITDA was $377.5 million, compared with $343.4 million in the prior year; adjusted EBITDA margin was 23.8%, compared with 23.7% in the prior year.

Business Highlights

• Today, we announced the intention to expand into the Kansas City market with our 24th Chamberlain location designed to accommodate approximately 550 students, poised to address provider shortages in the area.
• In July, Chamberlain welcomed students at its newly relocated Phoenix campus, featuring a modernized learning environment and expanded SIMCARE CENTER^TM, with location capacity of approximately 1,100 students. This hybrid campus is built to house our second Physician Assistant program location.
• Chamberlain expanded its specialized nursing education Practice Ready. Specialty Focused.™ (PRSF) model through a partnership with the American Association of Critical-Care Nurses (AACN), offering an in-depth introduction to caring for acutely and critically ill patients and their families. The AACN offering joins other specializations in the PRSF model, including emergency nursing, nephrology, home healthcare and perioperative nursing.
• Walden launched the first phase of its website redesign in July, offering students simplified navigation, comprehensive program information and admissions resources. The updates lay the foundation for further enhancements to Walden's digital learning platform, with more planned throughout fiscal year 2025.
• Adtalem is expanding its community impact in Barbados. Thirty registered Barbadian nurses will have the opportunity to pursue the Nurse Practitioner program at Chamberlain University following the signing of a Memorandum of Understanding (MOU). The MOU launches the first-ever Nurse Practitioners program in Barbados, which will commence in September. The Pan American Health Organization, regional office of the World Health Organization (PAHO/WHO) and Ross University School of Medicine have forged an alliance to strengthen health systems in Barbados and the Eastern Caribbean, enhancing the health workforce's capacity to handle emergencies, disasters and non-communicable diseases.

Segment Highlights

Chamberlain

• Total student enrollment increased 10.4% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs.

Walden

• Total student enrollment increased 11.3% compared with prior year, driven by growth in healthcare and non-healthcare programs.

Medical and Veterinary

• Total student enrollment decreased 2.9% compared with the prior year, driven by declines at medical.

Fiscal Year 2025 Outlook

Adtalem initiates guidance for fiscal year 2025, revenue in the range of $1,660 million to $1,700 million, approximately 5% to 7.5% growth year-over-year. Adjusted earnings per share to be in the range of $5.60 to $5.85, approximately 12% to 17% growth year-over-year.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal 2024 fourth quarter and fiscal year results today at 4:30 p.m. CT (5:30 p.m. ET).

The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) and stating "Adtalem earnings call" or by using conference ID: 13747739. The call will be simulcast through the Adtalem investor relations website at: https://investors.adtalem.com.

Adtalem will archive a replay of the call for 30 days. To access the replay, dial +1 877-660-6853 (U.S.) or +1 201-612-7415 (international), conference ID: 13747739, or visit the Adtalem investor relations website.

About Adtalem Global Education

Adtalem Global Education is the leading provider of healthcare education in the U.S., shaping the future of healthcare by preparing a diverse workforce with high-quality academic programs. We innovate education pathways, align with industry needs and empower individuals to reach their full potential. Our commitment to excellence and inclusivity is reflected in our expansive network of institutions, serving over 80,000 students and supported by a strong community of over 300,000 alumni and nearly 10,000 dedicated employees. Discover more Adtalem.com for more information and follow us on LinkedIn, Instagram and Facebook.

Cautionary Disclosure Regarding Forward-Looking Statements

Certain statements contained in this release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem's future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "future," "believe," "expect," "anticipate," "estimate," "plan," "intend," "may," "will," "would," "could," "can," "continue," "preliminary," "range," and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. "Risk Factors" of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of special items that may be incurred in the future, although these special items could be material to Adtalem's results in accordance with GAAP.

¹ Represents total students attending sessions during each institution's most recent enrollment period in Q4 FY 2024 and Q4 FY 2023.

Non-GAAP Financial Measures and Reconciliations

We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem's ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in the subsequent GAAP to non-GAAP reconciliation tables:

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem's net income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem's diluted earnings per share adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem's operating income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem's net income adjusted for loss from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business acquisition and integration expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.

Free cash flow (most comparable GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.

Net debt – Defined as long-term debt less cash and cash equivalents.

Net leverage – Defined as net debt divided by adjusted EBITDA.

A description of special items in our non-GAAP financial measures described above are as follows:

• Restructuring expense primarily related to real estate consolidations at Walden, Medical and Veterinary, and Adtalem's home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.
• Business acquisition and integration expense include expenses related to the Walden acquisition and certain costs related to growth transformation initiatives. We do not include normal, recurring, cash operating expenses in our business acquisition and integration expense.
• Amortization of acquired intangible assets.
• Amortization of cloud computing implementation assets.
• Gain on sale of Adtalem's Chicago, Illinois, campus facility.
• Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, reserves related to significant litigation, impairment of an equity investment, loss on assets held for sale related to a fair value write-down on assets, and debt modification costs related to refinancing our Term Loan B loan.
• Tax benefit due to change in valuation allowance.
• Tax benefit due to change in unrecognized tax benefits.
• Loss from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, a loss on sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices and a tax return to provision adjustment, and the earn-outs we received.