Adtalem Global Education Third Quarter Fiscal Year 2025 Results; Guidance Raised

Total enrollment up 9.8% YoY

Revenue up 12.9% YoY

Diluted earnings per share $1.59; Adjusted EPS $1.92, growth of 28.0% YoY

Third quarter highlights

• Total student enrollment 94,223, up 9.8% year-over-year
• Revenue $466.1 million, up 12.9% year-over-year
• Chamberlain University achieved ninth straight quarter of total enrollment growth, up 6.8% year-over-year, highest total enrollment in university history
• Walden University achieved seventh straight quarter of total enrollment growth, up 13.5% year-over-year
• Medical & Veterinary segment achieved total enrollment growth, up 1.2% year-over-year
• Robust momentum, GAAP net income $60.8 million; adjusted EBITDA $127.8 million, up 19.3% year-over-year
• Growth with Purpose strategy generating significant returns

Capital allocation

• Completed $300 million January 2024 Board-authorized share repurchase program on May 5, 2025, representing a substantial return for shareholders
• New $150 million Board-authorized share repurchase program through May 2028
• Net leverage 0.8x as of Mar. 31, 2025

Fiscal year 2025 guidance

• Revenue $1,760 million to $1,775 million
• Adjusted earnings per share $6.40 to $6.60

Adtalem Global Education Inc. (NYSE:ATGE), the leading healthcare educator in the United States, today reported third quarter fiscal year 2025 results (ended Mar. 31, 2025). The Company continues to transform higher education by training the next generation of professionals at an industry-leading scale.

"Our focus on delivering flexible, personalized, tech enabled and career relevant programs for today's modern student has driven seven consecutive quarters of enrollment growth," said Steve Beard, chairman and chief executive officer, Adtalem Global Education. "Rooted in operational excellence, our Growth with Purpose strategy continues to fuel sustainable returns. As a trusted pathway for aspiring healthcare professionals, we're investing in innovative programs to meet rising demand, ensuring a skilled workforce that meets the needs of communities across the U.S."

Financial Highlights

Selected financial data for the three months ended Mar. 31, 2025:

• Revenue of $466.1 million increased 12.9% compared with the prior year
• Operating income of $90.5 million, compared with $61.7 million in the prior year; adjusted operating income of $105.4 million, compared with $89.8 million in the prior year
• Net income of $60.8 million, compared with $36.8 million in the prior year; adjusted net income of $73.3 million, compared with $59.4 million in the prior year
• Diluted earnings per share of $1.59, compared with $0.93 in the prior year; adjusted earnings per share of $1.92, compared with $1.50 in the prior year
• Adjusted EBITDA of $127.8 million, compared with $107.1 million in the prior year; adjusted EBITDA margin of 27.4%, compared with 25.9% in the prior year

Business Highlights

• American University of the Caribbean School of Medicine (AUC) and Ross University School of Medicine (RUSM) achieved a combined 95% first-time residency attainment rate for 2024-2025 graduates¹, at least 95% attainment for the fourth consecutive year, placing more than 615 students and graduates into over 325 unique healthcare facilities with more than 130 students and graduates matching into partner clinical hospitals. The U.S. is projected to face a shortage of 187,000 physicians in 2037², exacerbating healthcare gaps, particularly in existing shortage areas. This year, more than 40% of AUC and RUSM residency placements will train in federally designated Medically Underserved Areas / Populations³, expanding access to care in underserved urban and rural communities nationwide. More than 450 students and graduates matched into primary care residencies, with over 55% training in primary care Health Professional Shortage Areas³.
• Ross University School of Veterinary Medicine (RUSVM) ranked first among all universities in total graduates matched into highly competitive internships and residencies in 2025 through the Veterinary Internship and Residency Matching Program. For the last five years, RUSVM has been among the top schools for matching graduates into postgraduate opportunities, providing invaluable clinical experience in specialized fields such as surgery, cardiology, internal medicine and emergency care.
• Walden University celebrated approximately 6,000 graduates at its 72nd commencement. Nursing, social, behavioral and other health degrees accounted for approximately 80% of the degrees awarded, further showcasing Adtalem's commitment to delivering qualified professionals at scale to the U.S. healthcare system.
• Chamberlain University launched "You've Got This, We've Got You," a new brand campaign that focuses on the culture of caring and support at the No. 1 largest nursing school in the U.S.

Segment Highlights

Chamberlain

• Total student enrollment increased 6.8% compared with the prior year, driven by growth in pre-licensure and post-licensure nursing programs.

Walden

• Total student enrollment increased 13.5% compared with the prior year, driven by growth in healthcare and non-healthcare programs.

Medical and Veterinary

• Total student enrollment increased 1.2% compared to the prior year, driven by growth in veterinary.

Fiscal Year 2025 Outlook

Adtalem raises guidance for fiscal year 2025, with revenue in the range of $1,760 million to $1,775 million, approximately 11% to 12% growth year-over-year. Adjusted earnings per share to be in the range of $6.40 to $6.60, approximately 28% to 32% growth year-over-year.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its third quarter fiscal year 2025 results today at 4:00 p.m. CT (5:00 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:13752889. 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: 13752889, 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 practice-ready 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 access is reflected in our expansive network of institutions, serving over 90,000 students and supported by a strong community of approximately 350,000 alumni and nearly 10,000 dedicated employees. Visit 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.

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 integration expense, amortization of acquired intangible assets, write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, strategic advisory costs, and (income) 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 integration expense, amortization of acquired intangible assets, write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, strategic advisory costs, and (income) loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem's operating income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs. 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 (income) 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 integration expense, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs. 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 workforce reductions, costs to exit certain course offerings, and prior real estate consolidations at Adtalem's home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.
• Business 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 integration expense.
• Amortization of acquired intangible assets.
• Amortization of cloud computing implementation assets.
• Write-off of debt discount and issuance costs related to prepayments of debt, reserves related to significant litigation, asset impairments related to adjusting certain operating lease assets and property and equipment as a result of adjusting carrying values to fair values, loss on assets held for sale related to adjusting those assets to estimated fair value less costs to sell, and debt modification costs related to refinancing our Term Loan B loan.
• Strategic advisory costs related to expanding capabilities and bringing new capacities to market to further enhance our strategic position. We do not include normal, recurring, cash operating expenses in our strategic advisory costs.
• (Income) loss from discontinued operations includes expense from ongoing litigation costs and settlements related to divestitures and the earn-outs we received.