ATGE Q3 Deep Dive: Enrollment Growth and Operational Challenges Shape Outlook

Vocational education company Adtalem Global Education (NYSE:ATGE) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 10.8% year on year to $462.3 million. The company expects the full year’s revenue to be around $1.92 billion, close to analysts’ estimates. Its non-GAAP profit of $1.75 per share was 10.9% above analysts’ consensus estimates.

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StockStory’s Take

Adtalem’s third quarter results exceeded Wall Street’s revenue and earnings expectations, but the company’s shares declined notably following the release. Management identified strong enrollment growth across Walden University and the Medical and Veterinary segment as key drivers of performance, while also candidly addressing operational missteps in Chamberlain’s marketing and enrollment processes. CEO Stephen Beard called Chamberlain’s slower enrollment growth “an execution issue, and it’s fixable,” attributing the softness to local marketing campaigns that failed to deliver expected results and conversion rates that lagged historical norms. Beard emphasized that these issues were specific to Chamberlain and not indicative of broader competitive or industry trends affecting the portfolio.

Looking ahead, management reaffirmed its full-year guidance, signaling confidence in the company’s ability to resolve current operational hurdles and capitalize on ongoing healthcare workforce shortages. Beard stated, “We’re addressing the execution gaps with rigor and accountability,” and remained optimistic about recovering enrollment momentum at Chamberlain in the second half of the year. Adtalem’s strategy includes continued investment in digital learning platforms, AI-enabled program enhancements, and partnerships—such as the recently announced collaboration with Google Cloud—to further differentiate its offerings and support long-term growth. The company also signaled an ongoing commitment to disciplined capital allocation and expansion into high-demand healthcare education markets.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to strong enrollment trends in Walden and Medical and Veterinary, while acknowledging Chamberlain’s underperformance due to internal execution lapses.

• Walden University momentum: Walden achieved its ninth consecutive quarter of enrollment growth, driven by its digital learning platform and targeted program enhancements. CEO Stephen Beard pointed to ongoing investments in AI-enabled technology and streamlined doctoral programs as factors supporting both strong enrollment and high student persistence rates.
• Chamberlain operational missteps: Chamberlain’s slower enrollment growth stemmed from ineffective local marketing campaigns and below-benchmark conversion rates. Management detailed how these execution issues reduced enrollment efficiency but reiterated that nursing demand remains robust and the platform’s fundamentals are intact.
• Medical & Veterinary steady growth: The Medical and Veterinary segment saw its third consecutive enrollment cycle of growth, with Ross Med and Ross Vet operating near capacity. New partnerships, such as the MedPath program with ScribeAmerica, are positioned to strengthen long-term enrollment pipelines and address the ongoing physician shortage.
• Leadership and process changes: In response to Chamberlain’s challenges, the company has restructured its senior leadership team and streamlined enrollment processes to reduce friction and improve student conversion. A national search for a new Chamberlain president is underway, demonstrating a commitment to accountability and operational improvement.
• Strategic partnerships and technology: Adtalem expanded its AI credentials for healthcare students through a partnership with Google Cloud, aiming to enhance student fluency in AI tools and prepare graduates for technology-enabled healthcare roles. The initiative builds on earlier collaborations, such as with Hippocratic AI, and is designed to provide stackable, career-relevant credentials.

Drivers of Future Performance

Adtalem’s outlook is anchored by ongoing healthcare workforce shortages, continued investment in digital and AI-driven offerings, and efforts to resolve Chamberlain’s operational setbacks.

• Healthcare workforce demand: Management anticipates the persistent national shortage of healthcare professionals to drive sustained demand for nursing, medical, and allied health programs across the company’s brands. The company believes its scale and breadth of programs position it to serve as essential talent infrastructure for the sector.
• Digital and AI program expansion: Continued enhancement of digital learning platforms and the rollout of AI-focused credentials, especially through partnerships with technology leaders, are expected to improve student engagement, differentiation, and employability. Management expects these initiatives to support enrollment growth and margin expansion.
• Chamberlain recovery plan: The company is implementing targeted marketing improvements and enrollment process simplification at Chamberlain, aiming to restore enrollment momentum by late in the year. Management cautioned that recovery will take time, with softness expected in the next two quarters, but expressed confidence in a return to growth and margin improvement as changes take hold.

Catalysts in Upcoming Quarters

Looking ahead, the StockStory analyst team will monitor (1) the trajectory of Chamberlain’s enrollment and margin recovery as operational changes are implemented, (2) the impact of digital and AI program enhancements—particularly through the Google Cloud partnership—on overall enrollment and student outcomes, and (3) the effectiveness of new partnerships in expanding the company’s reach and pipeline. Ongoing capital allocation decisions and the February Investor Day will also offer important updates on strategy execution.

Adtalem currently trades at $135, down from $141.83 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free for active Edge members).

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