Adtalem Stock Gains on Q3 Earnings & Revenue Beat, FY25 View Up

Adtalem Global Education Inc. ATGE posted impressive third-quarter fiscal 2025 results, wherein adjusted earnings and revenues topped the Zacks Consensus Estimate and increased year over year.

The quarter’s performance was driven by robust performance across all the company’s reportable segments, resulting in top-line growth. The segments’ performances were mainly backed by increased enrollment and higher tuition rates. Also, ATGE’s focus on strategic investments to boost student experience is boding well.

Following the results, shares of this leading education provider gained 2.4% in the after-hours trading session yesterday.

Adtalem's operational excellence strategy, Growth with Purpose, has driven seven consecutive quarters of enrollment growth while supporting its mission to develop skilled healthcare professionals. Owing to the trend of results and favorable aspects, the company remains optimistic about ending fiscal 2025 on a stronger note.

ATGE’s Earnings & Revenue Discussion

The company’s adjusted earnings per share (EPS) of $1.92 topped the Zacks Consensus Estimate of $1.63 by 17.8%. In the year-ago quarter, it reported an adjusted EPS of $1.50.

Revenues of $466.1 million also surpassed the consensus mark of $444 million by 4.9% and grew 12.9% year over year. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Adtalem Global Education Inc. Price, Consensus and EPS Surprise

Adtalem Global Education Inc. price-consensus-eps-surprise-chart | Adtalem Global Education Inc. Quote

In the fiscal third quarter, enrollment of total students rose 9.8% year over year to 94,223 students. Our Zacks model predicted a total student enrollment of 88,056 for the quarter.

Adjusted operating income increased 17.4% from the prior-year quarter’s level to $105.4 million. Adjusted operating margin expanded 80 basis points (bps) to 22.6%.

Adjusted EBITDA was $127.8 million, up 19.3% from the prior-year quarter’s level. Adjusted EBITDA margin expanded 150 bps year over year to 27.4%. We expected the adjusted EBITDA margin to be 24.7% for the reported quarter.

Adtalem's Segment Details

Chamberlain: Revenues in the segment were up 13.1% from the year-ago quarter’s level, totaling $192.6 million. Total student enrollment increased 6.8% to 40,564 students, driven by growth in pre-licensure and post-licensure nursing programs.

Adjusted operating income increased 9.6% from the prior-year quarter’s level to $47.5 million. Adjusted operating margin contracted 70 bps to 24.7%. Adjusted EBITDA was $56.8 million, up 12.6% from the prior-year quarter’s level. Adjusted EBITDA margin contracted 10 bps to 29.5%.

Walden: The segment generated revenues of $178.4 million, up 18.5% year over year. Total student enrollment in the quarter increased 13.5% year over year to 48,526 students, driven by investments in student experience, accompanied by providing flexibility to working adults through part-time and Tempo Learning competency-based programs.

Adjusted operating income surged 50.6% from the prior-year quarter’s figure to $48 million. Adjusted operating margin expanded 570 bps to 26.9%. Adjusted EBITDA was $54 million, significantly up 50.6% from the prior-year quarter’s level. Adjusted EBITDA margin rose 650 bps to 30.3%.

Medical and Veterinary: Revenues in the segment increased 3.6% to $95 million from the year-ago quarter’s figure. Total student enrollment inched up 1.2% from the prior-year quarter’s level to 5,133 students.

Adjusted operating income declined 21.9% from the prior-year quarter’s figure to $17.9 million. Adjusted operating margin contracted 610 bps to 18.9%. Adjusted EBITDA was $22.9 million, down 15.3% from the prior-year quarter’s level. Adjusted EBITDA margin contracted 540 bps to 24%.

Liquidity & Cash Flow of ATGE

As of March 31, 2025, Adtalem had cash and cash equivalents of $219 million compared with $219.3 million as of June 30, 2024. Long-term debt was $552.2 million, down from $648.7 million at fiscal 2024-end.

For the first nine months of fiscal 2025, cash provided by operating activities (continuing operations) totaled $273.8 million, up from $227.1 million in the year-ago period. Free cash flow at the end of the fiscal third quarter was $287 million, up from $233 million a year ago.

Adtalem Raises Fiscal 2025 Guidance

For fiscal 2025, ATGE now expects revenues in the range of $1,760-$1,775 million (compared with $1,730-$1,760 million expected earlier). It now expects adjusted earnings to be in the band of $6.40-$6.60 per share compared with the earlier prediction of $6.10-$6.30.

ATGE’s Zacks Rank & Peer Releases

Adtalem currently carries a Zacks Rank #3 (Hold).

Universal Technical Institute, Inc. UTI reported impressive second-quarter fiscal 2025 results. Both earnings and revenues surpassed the Zacks Consensus Estimate and increased on a year-over-year basis.

The company achieved strong growth in the fiscal second quarter, driven by its strategy, focused on expansion, diversification and optimization. Both divisions saw year-over-year improvements in key financial and operational areas. Higher revenues, an increase in active students and strong new enrollments contributed to the bottom-line growth. Owing to strong performance, Universal Technical has raised its guidance for fiscal 2025 while remaining aligned with long-term growth objectives.

Strategic Education, Inc. STRA, or SEI, reported impressive results for the first quarter of 2025. Its adjusted earnings and revenues topped the Zacks Consensus Estimate. On a year-over-year basis, both the top and bottom lines increased.

Strategic Education’s quarter witnessed robust employer-affiliated enrollment, strong growth from Sophia Learning subscriptions and continued enrollment growth in the U.S. Higher Education (USHE) segment. Sophia Learning’s average total subscribers increased approximately 37% from the year-ago period’s level. Employer-affiliated enrollment reached a record high of 31.2% of USHE enrollment, up from 29.2% in the year-ago period.

A Key Schools Pick

Laureate Education, Inc. LAUR presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has a trailing four-quarter earnings surprise of 56.1%, on average. Its shares have gained 24.3% in the year-to-date period. The Zacks Consensus Estimate for Laureate’s 2025 sales and EPS indicates growth of 0.3% and 23.7%, respectively, from the year-ago period’s levels.

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This article originally published on Zacks Investment Research (zacks.com).

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