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

Rhea-AI Summary

Adtalem Global Education (ATGE) reported strong Q2 FY2025 results with significant growth across key metrics. Total enrollment reached 91,264, up 11.6% year-over-year, while revenue increased 13.9% to $447.7 million. The company achieved diluted earnings per share of $1.98 and adjusted EPS of $1.81, representing 47.2% growth.

Notable highlights include Chamberlain University's eighth consecutive quarter of enrollment growth (up 11.5%) and Walden University's sixth straight quarter of growth (up 13.2%). The company demonstrated strong financial management by repurchasing $38 million in shares and repaying $100 million of Term Loan B.

Based on these results, Adtalem raised its FY2025 guidance, projecting revenue between $1,730-$1,760 million and adjusted earnings per share of $6.10-$6.30, representing growth of 21.5-25.5% year-over-year.

Positive

• Revenue increased 13.9% YoY to $447.7 million
• Total enrollment up 11.6% YoY to 91,264 students
• Adjusted EBITDA grew 35.1% YoY to $125.0 million
• Net income increased to $75.9 million from $39.9 million YoY
• Improved net leverage to 1.1x
• Raised FY2025 guidance for revenue and EPS
• Strong enrollment growth in both Chamberlain (11.5%) and Walden (13.2%)

Negative

• Medical and Veterinary segment operating income declined 2.5% YoY
• Medical and Veterinary enrollment slightly down 0.7% YoY

Insights

Financial Analyst

ATGE delivered outstanding Q2 FY25 results that significantly exceeded expectations, prompting management to raise full-year guidance. The new outlook of $6.10-$6.30 adjusted EPS represents 21.5-25.5% YoY growth, demonstrating management's confidence in sustained momentum.

The results reveal three key strategic advantages:

• Market Leadership: ATGE's dominance in psychiatric-mental health education, producing more MSN-PMHNP graduates than the top 20 programs combined, positions it perfectly in an undersupported healthcare sector
• Operational Excellence: Adjusted EBITDA margin expansion of 440 basis points to 27.9% showcases successful execution of the Growth with Purpose strategy
• Financial Strength: With net leverage at 1.1x and $140 million remaining in share repurchase authorization, ATGE maintains significant financial flexibility while returning capital to shareholders

Segment performance is particularly impressive in the core healthcare education units. Chamberlain's 17.9% revenue growth and 42.5% adjusted EBITDA growth, coupled with Walden's 16.7% revenue growth and 50.2% adjusted EBITDA growth, indicate strong operational leverage and pricing power. The successful scaling of online nursing programs and strategic clinical partnerships are creating sustainable competitive advantages in addressing critical healthcare workforce shortages.

Total enrollment up 11.6% YoY

Revenue up 13.9% YoY

Diluted earnings per share $1.98; Adjusted EPS $1.81, growth of 47.2% YoY

Second quarter highlights

• Total student enrollment 91,264, up 11.6% year-over-year
• Revenue $447.7 million, up 13.9% year-over-year
• Chamberlain University achieved eighth straight quarter of total enrollment growth, up 11.5% year-over-year, highest total enrollment in university history
• Walden University achieved sixth straight quarter of total enrollment growth, up 13.2% year-over-year
• Strong momentum, GAAP net income $75.9 million and adjusted EBITDA $125.0 million, up 35.1% year-over-year
• Growth with Purpose strategy generating significant and sustainable returns

Capital allocation

• Repurchased $38 million of shares, $140 million remaining under $300 million Board authorized share repurchase program through January 2027
• Repaid $100 million of outstanding Term Loan B balance on Jan. 17, 2025
• Net leverage 1.1x as of Dec. 31, 2024

Fiscal year 2025 guidance

• Revenue $1,730 million to $1,760 million
• Adjusted earnings per share $6.10 to $6.30

CHICAGO--(BUSINESS WIRE)-- Adtalem Global Education Inc. (NYSE: ATGE), the leading healthcare educator in the United States, today reported second quarter fiscal year 2025 results (ended Dec. 31, 2024), expanding the Company’s societal and healthcare impact at an industry-leading pace.

"Growth with Purpose, our operational excellence strategy, has delivered exceptional results—marked by six straight quarters of enrollment growth—while advancing our mission to develop skilled healthcare professionals," said Steve Beard, chairman and chief executive officer, Adtalem Global Education. "By optimizing the student experience and with a commitment to student outcomes, we're successfully scaling critical care education. These consistent and sustainable results give us confidence to raise our expectations for fiscal 2025."

Financial Highlights

Selected financial data for the three months ended Dec. 31, 2024:

• Revenue of $447.7 million increased 13.9% compared with the prior year
• Operating income of $103.9 million, compared with $58.6 million in the prior year; adjusted operating income of $101.4 million, compared with $75.6 million in the prior year
• Net income of $75.9 million, compared with $39.9 million in the prior year; adjusted net income of $69.4 million, compared with $50.3 million in the prior year
• Diluted earnings per share of $1.98, compared with $0.98 in the prior year; adjusted earnings per share of $1.81, compared with $1.23 in the prior year
• Adjusted EBITDA of $125.0 million, compared with $92.6 million in the prior year; adjusted EBITDA margin of 27.9%, compared with 23.5% in the prior year

Business Highlights

• Adtalem produced more graduates with Psychiatric-Mental Health Nurse Practitioner (MSN-PMHNP) degrees than the top 20 programs combined, according to the most recently published 2023 data from the American Association of Colleges of Nursing. Adtalem is addressing critical U.S. healthcare issues, as The National Institute for Health Care Management estimates that approximately 49% of Americans live in a mental health workforce shortage area. As of Dec. 31, 2024, Chamberlain University enrolled over 3,000 MSN-PMHNP students, with Walden University enrolling over 6,600. Further, Walden University currently has over 21,000 students enrolled in Social and Behavioral Sciences programs.
• Chamberlain University continues to build a robust pipeline of nurses through programs including its Bachelor of Science in Nursing (BSN) Online Option, which offers flexibility and experiential learning opportunities to students in 36 states. The program boasts over 2,500 current enrollees since launching four years ago and operates 44 clinical hub locations at partner healthcare sites.
• Walden University launched "Get the W," a new brand campaign that celebrates the wins that drive our students and graduates to make a meaningful impact in healthcare and beyond.
• Ross University School of Veterinary Medicine (RUSVM) hosted the West Indies Veterinary Conference 2024, a prominent event in the global veterinary community that brings together hundreds of veterinary professionals, including over 300 RUSVM alumni. The event featured continuing education, including lectures and master classes on topics ranging from wound care to business management.

Segment Highlights

Chamberlain
$ in millions		Three Months Ended December 31,
		2024	2023	% Change
Revenue		$181.0	$153.6	17.9%
Operating Income		$42.2	$29.6	42.5%
Adj. Operating Income		$42.3	$29.6	42.7%
Adj. EBITDA		$52.6	$36.9	42.5%
Total Students (1)		39,691	35,592	11.5%

• Total student enrollment increased 11.5% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs.

Walden
$ in millions		Three Months Ended December 31,
		2024	2023	% Change
Revenue		$171.3	$146.8	16.7%
Operating Income		$48.9	$21.6	126.4%
Adj. Operating Income		$46.2	$30.2	53.1%
Adj. EBITDA		$52.1	$34.6	50.2%
Total Students (1)		46,399	40,971	13.2%

• Total student enrollment increased 13.2% compared with the prior year, driven by growth in healthcare and non-healthcare programs.

Medical and Veterinary
$ in millions		Three Months Ended December 31,
		2024	2023	% Change
Revenue		$95.4	$92.9	2.8%
Operating Income		$21.5	$22.0	(2.5)%
Adj. Operating Income		$21.5	$22.1	(2.6)%
Adj. EBITDA		$26.7	$26.4	1.3%
Total Students (1)		5,174	5,209	(0.7)%

• Medical and Veterinary schools do not have a new enrollment period starting in the second quarter fiscal year 2025. Second quarter fiscal year 2025 enrollment period is the same as first quarter fiscal year 2025 enrollment period and corresponding reported enrollment data.

Fiscal Year 2025 Outlook

Adtalem raises guidance for fiscal year 2025, with revenue in the range of $1,730 million to $1,760 million, approximately 9.0% to 11.0% growth year-over-year. Adjusted earnings per share to be in the range of $6.10 to $6.30, approximately 21.5% to 25.5% growth year-over-year.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its second 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: 13750710. 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: 13750710, 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 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.

¹ Represents total students attending sessions during each institution’s most recent enrollment period in Q2 FY 2025 and Q2 FY 2024.

Adtalem Global Education Inc. Consolidated Balance Sheets (unaudited) (in thousands)
		December 31,				June 30,
		2024				2024
Assets:
Current assets:
Cash and cash equivalents		$	193,958			$	219,306
Restricted cash			1,461				1,896
Accounts and financing receivables, net			146,973				126,833
Prepaid expenses and other current assets			64,693				70,050
Total current assets			407,085				418,085
Noncurrent assets:
Property and equipment, net			245,878				248,524
Operating lease assets			188,800				176,755
Deferred income taxes			28,413				49,088
Intangible assets, net			771,084				776,694
Goodwill			961,262				961,262
Other assets, net			112,608				103,184
Assets held for sale			7,825				7,825
Total noncurrent assets			2,315,870				2,323,332
Total assets		$	2,722,955			$	2,741,417
Liabilities and shareholders' equity:
Current liabilities:
Accounts payable		$	66,920			$	102,626
Accrued payroll and benefits			50,999				71,373
Accrued liabilities			62,479				96,957
Deferred revenue			171,523				185,272
Current operating lease liabilities			32,633				31,429
Total current liabilities			384,554				487,657
Noncurrent liabilities:
Long-term debt			649,924				648,712
Long-term operating lease liabilities			182,051				167,712
Deferred income taxes			32,367				29,526
Other liabilities			35,149				38,675
Total noncurrent liabilities			899,491				884,625
Total liabilities			1,284,045				1,372,282
Commitments and contingencies
Total shareholders' equity			1,438,910				1,369,135
Total liabilities and shareholders' equity		$	2,722,955			$	2,741,417

Adtalem Global Education Inc. Consolidated Statements of Income (unaudited) (in thousands, except per share data)
		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2024				2023				2024				2023
Revenue		$	447,729			$	393,242			$	865,129			$	762,087
Operating cost and expense:
Cost of educational services			186,636				172,069				372,631				340,687
Student services and administrative expense			156,901				155,584				315,974				321,679
Restructuring expense			322				68				2,416				744
Business integration expense			—				6,909				—				12,171
Total operating cost and expense			343,859				334,630				691,021				675,281
Operating income			103,870				58,612				174,108				86,806
Interest expense			(13,909	)			(16,693	)			(28,391	)			(32,350	)
Other income, net			2,235				3,563				4,881				5,777
Income from continuing operations before income taxes			92,196				45,482				150,598				60,233
Provision for income taxes			(21,020	)			(7,769	)			(33,177	)			(10,561	)
Income from continuing operations			71,176				37,713				117,421				49,672
Discontinued operations:
Income from discontinued operations before income taxes			6,271				2,926				6,164				1,161
Provision for income taxes			(1,591	)			(748	)			(1,564	)			(296	)
Income from discontinued operations			4,680				2,178				4,600				865
Net income and comprehensive income		$	75,856			$	39,891			$	122,021			$	50,537
Earnings per share:
Basic:
Continuing operations		$	1.90			$	0.95			$	3.12			$	1.22
Discontinued operations		$	0.13			$	0.05			$	0.12			$	0.02
Total basic earnings per share		$	2.03			$	1.00			$	3.25			$	1.24
Diluted:
Continuing operations		$	1.85			$	0.92			$	3.03			$	1.20
Discontinued operations		$	0.12			$	0.05			$	0.12			$	0.02
Total diluted earnings per share		$	1.98			$	0.98			$	3.15			$	1.22
Weighted-average shares outstanding:
Basic shares			37,435				39,872				37,578				40,636
Diluted shares			38,401				40,787				38,755				41,486

Adtalem Global Education Inc. Consolidated Statements of Cash Flows (unaudited) (in thousands)
		Six Months Ended
		December 31,
		2024				2023
Operating activities:
Net income		$	122,021			$	50,537
Income from discontinued operations			(4,600	)			(865	)
Income from continuing operations			117,421				49,672
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation			20,918				13,505
Amortization and impairments to operating lease assets			14,092				17,340
Depreciation			19,993				19,381
Amortization of acquired intangible assets			5,610				20,010
Amortization of debt discount and issuance costs			2,226				2,310
Provision for bad debts			28,719				23,024
Deferred income taxes			23,516				(343	)
Loss on disposals of property and equipment			114				38
Gain on investments			(442	)			(575	)
Unrealized loss on assets held for sale			—				647
Changes in assets and liabilities:
Accounts and financing receivables			(46,493	)			(52,716	)
Prepaid expenses and other current assets			6,829				(2,143	)
Cloud computing implementation assets			(14,071	)			(11,314	)
Accounts payable			(34,588	)			9,755
Accrued payroll and benefits			(20,311	)			(6,073	)
Accrued liabilities			(29,066	)			25,130
Deferred revenue			(12,028	)			(13,540	)
Operating lease liabilities			(10,594	)			(20,441	)
Other assets and liabilities			(5,888	)			(1,314	)
Net cash provided by operating activities-continuing operations			65,957				72,353
Net cash provided by operating activities-discontinued operations			4,340				9,515
Net cash provided by operating activities			70,297				81,868
Investing activities:
Capital expenditures			(21,094	)			(19,612	)
Proceeds from sales of marketable securities			2,426				626
Purchases of marketable securities			(1,548	)			(498	)
Net cash used in investing activities			(20,216	)			(19,484	)
Financing activities:
Proceeds from exercise of stock options			9,833				15,313
Employee taxes paid on withholding shares			(12,198	)			(6,505	)
Proceeds from stock issued under Colleague Stock Purchase Plan			567				359
Repurchases of common stock for treasury			(74,066	)			(160,549	)
Proceeds from issuance of long-term debt			9,873				—
Repayments of long-term debt			(9,873	)			—
Net cash used in financing activities			(75,864	)			(151,382	)
Net decrease in cash, cash equivalents and restricted cash			(25,783	)			(88,998	)
Cash, cash equivalents and restricted cash at beginning of period			221,202				275,075
Cash, cash equivalents and restricted cash at end of period		$	195,419			$	186,077
Non-cash investing and financing activities:
Accrued capital expenditures		$	5,085			$	4,053
Accrued liability for repurchases of common stock		$	400			$	2,400
Accrued excise tax on share repurchases		$	301			$	2,358

Adtalem Global Education Inc. Segment Information (unaudited) (in thousands)
		Three Months Ended															Six Months Ended
		December 31,															December 31,
										Increase/(Decrease)															Increase/(Decrease)
		2024				2023				$				%			2024				2023				$				%
Revenue:
Chamberlain		$	180,986			$	153,553			$	27,433			17.9	%		$	348,916			$	296,149			$	52,767			17.8	%
Walden			171,306				146,808				24,498			16.7	%			332,819				288,416				44,403			15.4	%
Medical and Veterinary			95,437				92,881				2,556			2.8	%			183,394				177,522				5,872			3.3	%
Total consolidated revenue		$	447,729			$	393,242			$	54,487			13.9	%		$	865,129			$	762,087			$	103,042			13.5	%
Operating income (loss):
Chamberlain		$	42,226			$	29,640			$	12,586			42.5	%		$	68,200			$	53,964			$	14,236			26.4	%
Walden			48,898				21,598				27,300			126.4	%			88,735				23,536				65,199			277.0	%
Medical and Veterinary			21,463				22,020				(557	)		(2.5	)%			36,134				36,383				(249	)		(0.7	)%
Home Office			(8,717	)			(14,646	)			5,929			40.5	%			(18,961	)			(27,077	)			8,116			30.0	%
Total consolidated operating income		$	103,870			$	58,612			$	45,258			77.2	%		$	174,108			$	86,806			$	87,302			100.6	%

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, litigation reserve, debt modification costs, loss on assets held for sale, and income 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, litigation reserve, debt modification costs, loss on assets held for sale, and income 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, debt modification costs, and loss on assets held for sale. 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 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, 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.
• Reserves related to significant litigation, debt modification costs related to refinancing our Term Loan B loan, and loss on assets held for sale related to a fair value write-down on assets.
• Income from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University divestiture and the earn-outs we received.

Adtalem Global Education Inc. Non-GAAP Operating Income by Segment (unaudited) (in thousands)
		Three Months Ended															Six Months Ended
		December 31,															December 31,
										Increase/(Decrease)															Increase/(Decrease)
		2024				2023				$				%			2024				2023				$				%
Chamberlain:
Operating income (GAAP)		$	42,226			$	29,640			$	12,586			42.5	%		$	68,200			$	53,964			$	14,236			26.4	%
Restructuring expense			77				—				77							1,935				—				1,935
Adjusted operating income (non-GAAP)		$	42,303			$	29,640			$	12,663			42.7	%		$	70,135			$	53,964			$	16,171			30.0	%
Operating margin (GAAP)			23.3	%			19.3	%										19.5	%			18.2	%
Operating margin (non-GAAP)			23.4	%			19.3	%										20.1	%			18.2	%
Walden:
Operating income (GAAP)		$	48,898			$	21,598			$	27,300			126.4	%		$	88,735			$	23,536			$	65,199			277.0	%
Restructuring expense			—				(776	)			776							—				(776	)			776
Amortization of acquired intangible assets			2,805				9,333				(6,528	)						5,610				20,010				(14,400	)
Litigation reserve			(5,550	)			—				(5,550	)						(5,550	)			18,500				(24,050	)
Adjusted operating income (non-GAAP)		$	46,153			$	30,155			$	15,998			53.1	%		$	88,795			$	61,270			$	27,525			44.9	%
Operating margin (GAAP)			28.5	%			14.7	%										26.7	%			8.2	%
Operating margin (non-GAAP)			26.9	%			20.5	%										26.7	%			21.2	%
Medical and Veterinary:
Operating income (GAAP)		$	21,463			$	22,020			$	(557	)		(2.5	)%		$	36,134			$	36,383			$	(249	)		(0.7	)%
Restructuring expense			56				71				(15	)						115				185				(70	)
Adjusted operating income (non-GAAP)		$	21,519			$	22,091			$	(572	)		(2.6	)%		$	36,249			$	36,568			$	(319	)		(0.9	)%
Operating margin (GAAP)			22.5	%			23.7	%										19.7	%			20.5	%
Operating margin (non-GAAP)			22.5	%			23.8	%										19.8	%			20.6	%
Home Office:
Operating loss (GAAP)		$	(8,717	)		$	(14,646	)		$	5,929			40.5	%		$	(18,961	)		$	(27,077	)		$	8,116			30.0	%
Restructuring expense			189				773				(584	)						366				1,335				(969	)
Business integration expense			—				6,909				(6,909	)						—				12,171				(12,171	)
Loss on assets held for sale			—				647				(647	)						—				647				(647	)
Debt modification costs			—				—				—							712				—				712
Adjusted operating loss (non-GAAP)		$	(8,528	)		$	(6,317	)		$	(2,211	)		(35.0	)%		$	(17,883	)		$	(12,924	)		$	(4,959	)		(38.4	)%
Adtalem Global Education:
Operating income (GAAP)		$	103,870			$	58,612			$	45,258			77.2	%		$	174,108			$	86,806			$	87,302			100.6	%
Restructuring expense			322				68				254							2,416				744				1,672
Business integration expense			—				6,909				(6,909	)						—				12,171				(12,171	)
Amortization of acquired intangible assets			2,805				9,333				(6,528	)						5,610				20,010				(14,400	)
Litigation reserve			(5,550	)			—				(5,550	)						(5,550	)			18,500				(24,050	)
Loss on assets held for sale			—				647				(647	)						—				647				(647	)
Debt modification costs			—				—				—							712				—				712
Adjusted operating income (non-GAAP)		$	101,447			$	75,569			$	25,878			34.2	%		$	177,296			$	138,878			$	38,418			27.7	%
Operating margin (GAAP)			23.2	%			14.9	%										20.1	%			11.4	%
Operating margin (non-GAAP)			22.7	%			19.2	%										20.5	%			18.2	%

Adtalem Global Education Inc. Non-GAAP Adjusted EBITDA by Segment (unaudited) (in thousands)
		Three Months Ended															Six Months Ended
		December 31,															December 31,
										Increase/(Decrease)															Increase/(Decrease)
		2024				2023				$				%			2024				2023				$				%
Chamberlain:
Operating income (GAAP)		$	42,226			$	29,640			$	12,586			42.5	%		$	68,200			$	53,964			$	14,236			26.4	%
Restructuring expense			77				—				77							1,935				—				1,935
Depreciation			5,466				4,786				680							10,834				8,902				1,932
Amortization of cloud computing implementation assets			815				376				439							1,467				576				891
Stock-based compensation			3,993				2,089				1,904							7,112				4,996				2,116
Adjusted EBITDA (non-GAAP)		$	52,577			$	36,891			$	15,686			42.5	%		$	89,548			$	68,438			$	21,110			30.8	%
Adjusted EBITDA margin (non-GAAP)			29.1	%			24.0	%										25.7	%			23.1	%
Walden:
Operating income (GAAP)		$	48,898			$	21,598			$	27,300			126.4	%		$	88,735			$	23,536			$	65,199			277.0	%
Restructuring expense			—				(776	)			776							—				(776	)			776
Amortization of acquired intangible assets			2,805				9,333				(6,528	)						5,610				20,010				(14,400	)
Litigation reserve			(5,550	)			—				(5,550	)						(5,550	)			18,500				(24,050	)
Depreciation			1,795				1,926				(131	)						3,477				3,900				(423	)
Amortization of cloud computing implementation assets			778				379				399							1,479				567				912
Stock-based compensation			3,326				2,188				1,138							6,066				4,052				2,014
Adjusted EBITDA (non-GAAP)		$	52,052			$	34,648			$	17,404			50.2	%		$	99,817			$	69,789			$	30,028			43.0	%
Adjusted EBITDA margin (non-GAAP)			30.4	%			23.6	%										30.0	%			24.2	%
Medical and Veterinary:
Operating income (GAAP)		$	21,463			$	22,020			$	(557	)		(2.5	)%		$	36,134			$	36,383			$	(249	)		(0.7	)%
Restructuring expense			56				71				(15	)						115				185				(70	)
Depreciation			2,744				2,972				(228	)						5,313				5,864				(551	)
Amortization of cloud computing implementation assets			315				138				177							598				190				408
Stock-based compensation			2,158				1,196				962							3,765				2,836				929
Adjusted EBITDA (non-GAAP)		$	26,736			$	26,397			$	339			1.3	%		$	45,925			$	45,458			$	467			1.0	%
Adjusted EBITDA margin (non-GAAP)			28.0	%			28.4	%										25.0	%			25.6	%
Home Office:
Operating loss (GAAP)		$	(8,717	)		$	(14,646	)		$	5,929			40.5	%		$	(18,961	)		$	(27,077	)		$	8,116			30.0	%
Restructuring expense			189				773				(584	)						366				1,335				(969	)
Business integration expense			—				6,909				(6,909	)						—				12,171				(12,171	)
Loss on assets held for sale			—				647				(647	)						—				647				(647	)
Debt modification costs			—				—				—							712				—				712
Depreciation			185				359				(174	)						369				715				(346	)
Stock-based compensation			1,990				577				1,413							3,975				1,621				2,354
Adjusted EBITDA (non-GAAP)		$	(6,353	)		$	(5,381	)		$	(972	)		(18.1	)%		$	(13,539	)		$	(10,588	)		$	(2,951	)		(27.9	)%
Adtalem Global Education:
Net income (GAAP)		$	75,856			$	39,891			$	35,965			90.2	%		$	122,021			$	50,537			$	71,484			141.4	%
Income from discontinued operations			(4,680	)			(2,178	)			(2,502	)						(4,600	)			(865	)			(3,735	)
Interest expense			13,909				16,693				(2,784	)						28,391				32,350				(3,959	)
Other income, net			(2,235	)			(3,563	)			1,328							(4,881	)			(5,777	)			896
Provision for income taxes			21,020				7,769				13,251							33,177				10,561				22,616
Operating income (GAAP)			103,870				58,612				45,258							174,108				86,806				87,302
Depreciation and amortization			14,903				20,269				(5,366	)						29,147				40,724				(11,577	)
Stock-based compensation			11,467				6,050				5,417							20,918				13,505				7,413
Restructuring expense			322				68				254							2,416				744				1,672
Business integration expense			—				6,909				(6,909	)						—				12,171				(12,171	)
Litigation reserve			(5,550	)			—				(5,550	)						(5,550	)			18,500				(24,050	)
Loss on assets held for sale			—				647				(647	)						—				647				(647	)
Debt modification costs			—				—				—							712				—				712
Adjusted EBITDA (non-GAAP)		$	125,012			$	92,555			$	32,457			35.1	%		$	221,751			$	173,097			$	48,654			28.1	%
Adjusted EBITDA margin (non-GAAP)			27.9	%			23.5	%										25.6	%			22.7	%

Adtalem Global Education Inc. Non-GAAP Earnings Disclosure (unaudited) (in thousands, except per share data)
		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2024				2023				2024				2023
Net income (GAAP)		$	75,856			$	39,891			$	122,021			$	50,537
Restructuring expense			322				68				2,416				744
Business integration expense			—				6,909				—				12,171
Amortization of acquired intangible assets			2,805				9,333				5,610				20,010
Litigation reserve, debt modification costs, and loss on assets held for sale			(5,550	)			647				(4,838	)			19,147
Income tax impact on non-GAAP adjustments (1)			645				(4,402	)			(687	)			(12,095	)
Income from discontinued operations			(4,680	)			(2,178	)			(4,600	)			(865	)
Adjusted net income (non-GAAP)		$	69,398			$	50,268			$	119,922			$	89,649

(1)	Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2024				2023				2024				2023
Diluted earnings per share (GAAP)		$	1.98			$	0.98			$	3.15			$	1.22
Effect on diluted earnings per share:
Restructuring expense			0.01				0.00				0.06				0.02
Business integration expense			-				0.17				-				0.29
Amortization of acquired intangible assets			0.07				0.23				0.14				0.48
Litigation reserve, debt modification costs, and loss on assets held for sale			(0.14	)			0.02				(0.12	)			0.46
Income tax impact on non-GAAP adjustments (1)			0.02				(0.11	)			(0.02	)			(0.29	)
Income from discontinued operations			(0.12	)			(0.05	)			(0.12	)			(0.02	)
Adjusted earnings per share (non-GAAP)		$	1.81			$	1.23			$	3.09			$	2.16
Diluted shares used in non-GAAP EPS calculation			38,401				40,787				38,755				41,486

Note: May not sum due to rounding.
(1)	Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

Adtalem Global Education Inc. Non-GAAP Free Cash Flow Disclosure (unaudited) (in thousands)
		Twelve Months Ended
		FY24				FY24				FY24				FY25				FY25
		Q2				Q3				Q4				Q1				Q2
Net cash provided by (used in) operating activities-continuing operations (GAAP)		$	227,600			$	276,843			$	288,367			$	291,820			$	281,971
Capital expenditures			(38,713	)			(44,137	)			(48,893	)			(48,873	)			(50,375	)
Free cash flow (non-GAAP)		$	188,887			$	232,706			$	239,474			$	242,947			$	231,596

Adtalem Global Education Inc. Non-GAAP Net Leverage Disclosure (unaudited) (in thousands)
		Twelve Months Ended
		December 31, 2024
Adtalem Global Education:
Net income (GAAP)		$	208,261
Income from discontinued operations			(2,799	)
Interest expense			59,700
Other income, net			(9,646	)
Provision for income taxes			48,840
Depreciation and amortization			66,875
Stock-based compensation			33,360
Restructuring expense			3,542
Business integration expense			22,044
Litigation reserve			(5,550	)
Debt modification costs			1,560
Adjusted EBITDA (non-GAAP)		$	426,187
		December 31, 2024
Long-term debt		$	658,283
Less: Cash and cash equivalents			(193,958	)
Net debt (non-GAAP)		$	464,325
Net leverage (non-GAAP)			1.1 x

 

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Investor Contact

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+1 312-906-6600

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Source: Adtalem Global Education Inc.

FAQ

What was Adtalem's (ATGE) revenue growth in Q2 FY2025?

Adtalem reported revenue of $447.7 million in Q2 FY2025, representing a 13.9% increase year-over-year.

How much did ATGE's adjusted earnings per share grow in Q2 FY2025?

Adjusted earnings per share grew 47.2% year-over-year to $1.81, compared to $1.23 in the prior year.

What is Adtalem's (ATGE) updated guidance for fiscal year 2025?

Adtalem raised its FY2025 guidance, projecting revenue of $1,730-$1,760 million and adjusted EPS of $6.10-$6.30.

How many shares did ATGE repurchase in Q2 FY2025?

Adtalem repurchased $38 million of shares, with $140 million remaining under the $300 million Board authorized share repurchase program through January 2027.

What was Adtalem's (ATGE) total student enrollment in Q2 FY2025?

Total student enrollment reached 91,264, representing an 11.6% increase year-over-year.