LAUR Q3 Deep Dive: Online Growth and New Campuses Propel Guidance Upgrade

Higher education company Laureate Education (NASDAQ:LAUR) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 8.6% year on year to $400.2 million. The company’s full-year revenue guidance of $1.68 billion at the midpoint came in 2.7% above analysts’ estimates. Its non-GAAP profit of $0.25 per share was 8.7% above analysts’ consensus estimates.

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StockStory’s Take

Laureate Education delivered a well-received third quarter, as the market responded positively to the company’s 8.6% revenue growth and improved margins in key segments. Management attributed the strong results to double-digit enrollment growth in Peru—particularly in fully online working adult programs—and steady primary intake gains in Mexico, excluding campus closures. CEO Eilif Serck-Hanssen emphasized the importance of new campus launches and expanding digital offerings, noting, "We have a very strong value proposition, which works well in the premium segment, in the value segment as well as a very rapid increase in demand for fully online working adult products."

Looking forward, Laureate Education’s increased full-year guidance reflects confidence in continued enrollment growth, digital expansion, and margin optimization, especially in Mexico. Management described an improving macroeconomic environment in Peru and a constructive policy landscape in Mexico as supportive tailwinds. CFO Rick Buskirk explained that fully online programs in Peru will impact the average revenue per student due to pricing mix, but maintained that overall pricing for face-to-face offerings will remain in line with inflation. Leadership remains focused on disciplined capital allocation and expanding campus and online capacity to drive sustained performance.

Key Insights from Management’s Remarks

Management pointed to the combination of digital program expansion in Peru, new campus launches, and resilient student demand as primary contributors to Q3 growth and margin dynamics.

• Online working adult programs: Rapid expansion of fully online offerings in Peru was a significant growth driver, with management noting a "very rapid increase in demand" from working adults seeking flexible education options. This segment is still small but scaling quickly, and leadership expects it to remain a key contributor going forward.
• New campus openings: The company opened two new campuses—one in Monterrey, Mexico and one in Lima, Peru—marking the first such launches since 2019. Both were delivered on time and within budget, with management highlighting their performance as meeting expectations and signaling additional planned openings.
• Enrollment gains despite macro headwinds: Despite a sluggish macroeconomic backdrop in Mexico, total enrollments increased, with particular strength among traditional undergraduate students. In Peru, recovery from last year’s recession and improved consumer sentiment helped drive double-digit new enrollments.
• Resilient pricing strategies: Management indicated that pricing for traditional face-to-face programs in both countries kept pace with inflation, while online program pricing in Peru was optimized for growth, resulting in a modest reduction in average revenue per student but supporting higher overall enrollments.
• Share buyback expansion: Laureate Education’s Board authorized a $150 million increase to the stock repurchase program, citing a strong balance sheet and cash-generative business model as the basis for continued shareholder returns. This brings the total authorization remaining to $177 million.

Drivers of Future Performance

Laureate Education’s management expects continued growth to be driven by digital program scale-up, new campus projects, and disciplined margin management, while remaining mindful of macroeconomic risks.

• Digital and campus growth: The company is prioritizing expansion of fully online programs in Peru and additional campus openings in both Mexico and Peru, aiming to capture demand from both working adults and traditional students. Management views these initiatives as critical to sustaining enrollment momentum and broadening the addressable market.
• Margin optimization focus: Ongoing productivity gains and operating leverage, particularly in Mexico, are expected to drive adjusted EBITDA margin expansion. Management cited improved efficiency and revenue flow-through as levers for higher profitability, even as investments continue in growth initiatives.
• Macroeconomic and mix risks: While the environment in Peru is strengthening, management acknowledged that further growth in online offerings could dilute average revenue per student due to lower pricing. Additionally, sluggish economic conditions in Mexico and evolving U.S. trade policy remain potential headwinds, though leadership is positioning the business to adapt as needed.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace of adoption and revenue contribution from fully online working adult programs in Peru, (2) execution and enrollment trends at new and planned campus locations, and (3) the impact of ongoing macroeconomic changes in both Mexico and Peru on student demand and pricing. Additionally, we’ll track management’s ability to maintain margin expansion amidst these growth initiatives.

Laureate Education currently trades at $30.34, up from $28.87 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).

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