Q2 2025 Perdoceo Education Corp Earnings Call

July 31, 2025

Corporation second quarter tiny tiny five earnings conference call.

All lines have been placed on mute to prevent any background noise I would now like to turn the conference over to Nick Nelson with Alpha IR Group you may begin.

Thank you operator, good afternoon, everyone and thank you for joining us for our second quarter 2025 earnings call with me on the call today is Todd Nelson, President and Chief Executive Officer, and Ashish Ghia Chief Financial Officer.

This conference call is being webcast live within the within the Investor Relations section at <unk> Dot com.

Webcast replay will also be available on our site.

Can always contact the Alpha IR group for Investor Relations support.

Let me remind you that this afternoon's earnings release and remarks made today include forward looking statements as defined in section 21 E of the Securities Exchange Act of $19 34. These statements are based on assumptions made by and information currently available to <unk> education and involve risks and uncertainties that could cause.

Actual future results performance business prospects and opportunities to differ materially from those expressed in or implied by these statements.

These risks and uncertainties include but are not limited to those factors identified in <unk>. Most recent annual report on Form 10-K, and subsequent filings with the Securities and Exchange Commission, except as expressly required by the.

The securities laws. The company undertakes no obligation to update those factors or any forward looking statements to reflect future events developments or changed circumstances or for any other reason.

In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures.

Our earnings release that accompanies today's call contains financial and other quantitative information to be discussed today as well as the reconciliation of the GAAP to non-GAAP measures and is available within the Investor Relations page of the Companys website with that I'd like to turn the call over to Todd Nelson Todd.

Thank you Nick.

Good afternoon, everyone and thank you for joining us for our second quarter 2025 earnings call.

Our academic institutions remained focus on the goal of changing lives through education, and preparing learners for essential skills needed in today's job market.

<unk> and <unk> offer a wide variety.

A career focused programs, which help learners thrive in today's evolving market.

August day, and prepares professionals to serve communities across the country with quality medical care.

In today's call I'll start by discussing some key highlights for the quarter and then Ashish will provide more details on the operating and.

In financial performance and discuss our higher 2025 outlook.

As always I'd like to thank our faculty students support staff and all of our employees for their outstanding commitment and hard work in serving and educating our students.

Second quarter operating performance exceeded our expectations with net income of $41 million or <unk> 62.

<unk> diluted share.

While adjusted earnings per diluted share, which excludes certain noncash items was <unk> 67.

During the quarter, we experienced total enrollment growth across our academic institutions supported by continuing momentum in student retention and engagement that has been trending near multiyear highs.

As well as increased interest from prospective students looking to pursue a degree at our academic institutions.

Additionally, we believe that our continued investments in student enrollment and student support processes and technology have further enhance academic outcomes and student experiences.

Some key successes in other highlights for the quarter include first total enrollment growth grew 17% versus the prior year quarter.

Nick Nelson: Everyone to PERDOCEO EDUCATION Corp Q4 2025 earnings conference call. All lines have been placed immediately to prevent any background noise. I would now like to turn the conference over to Nick Nelson with Alpha IR Group. You may begin.

Sure Walter.

Adjusted earnings per diluted share, which excludes certain noncash items was 67.

Supported by 7% growth at both <unk> and <unk> as well as the acquisition of St. Augustine.

At <unk>. This marks seven consecutive quarters of total student enrollment growth, while total enrollments at <unk> were at the highest level in over a year.

Operator: Thank you, operator. Good afternoon, everyone, and thank you for joining us for our Q2 2025 earnings call. With me on the call today is Todd Nelson, President and Chief Executive Officer, and Ashish Ghia, Chief Financial Officer. This conference call is being webcast live within the investor relations section at Perdoceo Education Corporation. A webcast replay will also be available on our site, and you can always contact the Alpha IR Group for investor relations support. Let me remind you that this afternoon's earnings release and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions made by and information currently available to Perdoceo Education Corporation and involve risks and uncertainties that could cause factual future results, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these statements.

As well as increased interest from prospective students looking to pursue a degree at our academic institutions.

We continue to refine our marketing and admissions spending strategies and.

And are selectively leveraging generative artificial intelligence to identify and engage with prospective students who we believe are more likely to succeed at one of our academic institutions.

Additionally, we believe that our continued investments in student enrollment and student support processes and technology have further enhance academic outcomes and student experiences.

We are also investing in upgrading and enhancing our technology with admissions and enrollment and student support processes to ensure that our teams are well equipped to counsel and support the growing number of students enrolled at one of our academic institutions throughout the academic journey.

Some key successes in other highlights for the quarter include first total enrollment growth grew 17% versus the prior year quarter.

Supported by 7% growth at both <unk> and <unk> as well as the acquisition of St. Augustine.

Total enrollments from the corporate student programs at <unk> and <unk> continue to grow.

At <unk>. This marks seven consecutive quarters of total student enrollment growth, while total enrollments at <unk> were at the highest level in over a year.

And this remains a priority as we continue to make strategic investments in technology and personnel to support further enrollment growth.

We continue to refine our marketing and admission spending strategies and.

Operator: These risks and uncertainties include, but are not limited to, those factors identified in Perdoceo's most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments, or change circumstances, or for any other reason. In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The earnings release that accompanies today's call contains financial and other quantitative information to be discussed today, as well as the reconciliation of the GAAP to non-GAAP measures, and is available within the investor relations page of the company's website. With that, I'd like to turn the call over to Todd Nelson. Todd.

And are selectively leveraging generative artificial intelligence to identify and engage with prospective students who we believe are more likely to succeed at one of our academic institutions.

At St. Augustine Summer term, new enrollments increased versus the prior year with just under 4000 total students enrolled at the University.

We also expect new enrollment growth for our fall term, which is traditionally the biggest term of the year.

Supporting this new enrollment growth at St. Augustine is the ongoing expansion of their program offering matrix in terms of new modalities and current campus locations with the goal of maximizing the geographical area. They serve while providing students with a wider choice of taking their courses between online instruction.

Total enrollments from the corporate and student programs at <unk> and <unk> continue to grow.

In an in person experience at a campus location.

This remains a priority as we continue to make strategic investments in technology and personnel to support further enrollment growth.

As well as some hybrid options in between.

With fall term total enrollments typically expect it to be meaningfully higher than the summer term and supported by consistently high student retention trends.

At St. Augustine Summer term, new enrollments increased versus the prior year with just under 4000 total students enrolled at the University.

Todd Nelson: Thank you, Nick. Good afternoon, everyone, and thank you for joining us for our Q2 2025 earnings call. Our academic institutions remain focused on the goal of changing lives through education and preparing learners for essential skills needed in today's job market. CTU and AIU offer a wide variety of career-focused programs which help learners thrive in today's evolving market, while St. Augustine prepares professionals to serve communities across the country with quality medical care. In today's call, I will start by discussing some key highlights for the quarter. Then Ashish Ghia will provide more details on the operating and financial performance and discuss our higher 2025 outlook. As always, I would like to thank our faculty, student support staff, and all of our employees for their outstanding commitment and hard work in serving and educating our students.

St. Augustine will positively contribute to the overall revenue and adjusted operating income for 2025 and is expected to further grow in 2026.

We also expect new enrollment growth for our fall term, which is traditionally the biggest term of the year.

Our capital allocation decisions during the year highlight amongst other priorities our continued commitment to returning capital to shareholders during.

During the first half of 2025, we purchased one 6 million shares for $46 million at an average price of $28 19 per share.

<unk>.

An in person experience at a campus location as well as some hybrid options in between.

With less than $1 million remaining under our prior $50 million authorization and in line with our broader capital allocation strategy.

We'll fall term total enrollments typically expect it to be meaningfully higher than the summer term and supported by consistently high student retention trends.

The board has approved a new $75 million share repurchase authorization for immediate use.

St. Augustine will positively contribute to the overall revenue and adjusted operating income for 2025 and is expected to further grow in 2026.

In addition, effective July 31, the board increased quarterly dividend from 13 to 15 <unk> per share the second such increase since dividend payments were initiated in 2023. This reflects our commitment to making dividends a growing an integral part of our capital allocation strategy.

Todd Nelson: Q2 operating performance exceeded our expectations with net income of $41,000,000 or $0.62 per diluted share, while adjusted earnings per diluted share, which excludes certain non-cash items, was $0.67. During the quarter, we experienced total enrollment growth across our academic institutions, supported by continuing momentum in student retention and engagement that has been trending near multi-year highs, as well as increased interest from prospective students looking to pursue a degree at our academic institutions. Additionally, we believe that our continued investments in student enrollment and student support processes and technology have further enhanced academic outcomes and student experiences. Some key successes and other highlights for the quarter include: first, total enrollment growth grew 17% versus the prior year quarter, supported by 7% growth at both CTU and AIU, as well as the acquisition of St. Augustine.

Our capital allocation decisions during the year highlight amongst other priorities our continued commitment to returning capital to shareholders during.

During the first half of 2025, we purchased one 6 million shares for $46 million at an average price of $28 19 per share.

In summary, we continue to execute execute against our objectives are responsible and compliant role.

We've experienced good momentum through the fall first of all first half of 2025 and are optimistic this year will end on a high note, which should set us up well for 2026 and beyond.

With less than $1 million remaining under our prior 50 million authorization and in line with our broader capital allocation strategy.

Before I turn it over to Ashish a quick note on recent legislation legislative actions.

The board has approved a new $75 million share repurchase authorization for immediate use.

While we continue to evaluate the reconciliation bill the new rules were in line with our expectations and we believe the overall impact of our industry should be positive in.

In addition, effective July 31, the board increased quarterly dividend from 13 to 15 per share. The second such increase since dividend payments were initiated in 2023. This reflects our commitment to making dividends a growing an integral part of our capital allocation strategy.

In addition, we are encouraged by the continuation of this administration's deregulatory efforts across numerous federal agencies, including at the Department of Education, and we look forward to the future rulemaking efforts that already have been announced overall, we believe these regulatory and legislative.

In summary.

We continue to execute against our objectives are responsible and compliant role.

We've experienced good momentum through the fall first of all first half of 2025 and are optimistic this year will end on a high note, which should set us up well for 2026 and beyond.

Todd Nelson: At CTU, this marks seven consecutive quarters of total student enrollment growth, while total enrollments at AIU were at the highest level in over a year. We continue to refine our marketing and admissions spending strategies and are selectively leveraging generative artificial intelligence to identify and engage with prospective students who we believe are more likely to succeed at one of our academic institutions. We are also investing in upgrading and enhancing our technology with admissions, enrollment, and student support processes to ensure that our teams are well equipped to counsel and support the growing number of students enrolled at one of our academic institutions throughout the academic journey. Total enrollments from the corporate and student programs at CTU and AIU continue to grow. This remains a priority as we continue to make strategic investments in technology and personnel to support further enrollment growth. At St.

These actions should provide further opportunities for responsible and compliant growth across our academic institutions.

Ashish will now provide more details on the quarter, our outlook and enrollment trends Ashish.

Before I turn it over to Ashish a quick note on recent legislation legislative actions, while we continue to evaluate the reconciliation bill.

Thank you Todd.

We'll start with an overview of the second quarter results and then discuss our balance sheet and full year outlook before handing the call back to Todd for his closing remarks.

The new rules were in line with our expectations and we believe the overall impact of our industry should be positive.

Please note all comparisons discussed on this call are versus the comparative prior year period, unless otherwise stated.

Please also note that total student enrollment numbers discussed on this call or any enrollment trends that are referred to on this call exclude learners pursuing non degree seeking and professional development programs.

These actions should provide further opportunities for responsible and compliant growth across our academic institutions.

And degree seeking non title for self based programs at <unk> and <unk>.

Ashish will now provide more details on the quarter, our outlook and enrollment trends Ashish.

Finally, a reminder, about year over year comparable <unk> the financial results for this quarter include the operating performance from the University of St. Augustine for Health Sciences acquisition, which was completed in December of 2024.

Thank you Todd.

Todd Nelson: Augustine, summer term new enrollments increased versus the prior year, with just under 4,000 total students enrolled at the university. We also expect new enrollment growth for our fall term, which is traditionally the biggest term of the year. Supporting this new enrollment growth at St. Augustine is the ongoing expansion of their program offering matrix in terms of new modalities and current campus locations, with the goal of maximizing the geographical area they serve while providing students with a wider choice of taking their courses between online instruction and in-person experience at a campus location, as well as some hybrid options in between. With fall term total enrollments typically expected to be meaningfully higher than the summer term and supported by consistently high student retention trends, St. Augustine will positively contribute to the overall revenue and adjusted operating income for 2025 and is expected to further grow in 2026.

I will start with an overview of the second quarter results and then discuss our balance sheet and full year outlook before handing the call back to Todd for his closing remarks.

With that said, let us begin with an overview of our second quarter results.

Please note all comparisons discussed on this call are versus the comparative prior year period, unless otherwise stated.

Net income for the quarter was $41 million or <unk> 62 cents per diluted share as compared with $38 4 million or.

Please also note that total student enrollment numbers discussed on this call or any enrollment trends that I referred to on this call exclude learners pursuing non degree seeking and professional development programs.

A <unk> 57 per diluted share.

Second quarter operating income grew by 11, 7% to $51 4 million.

Adjusted operating income, which we believe is more indicator of the underlying operating performance and.

And degree seeking non title for cell based programs at <unk> and <unk>.

And exclude certain noncash items grew 25, 4% to 61 5 million as compared to $49 1 million.

Finally, a reminder, about year over year comparability the financial results for this quarter include the operating performance from the University of St. Augustine for Health Sciences acquisition, which was completed in December of 2024.

Finally, adjusted earnings per diluted share was <unk> 67, as compared to 59.

With that said, let us begin with an overview of our second quarter results.

Growth across these reported metrics was primarily supported by organic revenue growth at <unk> and <unk> system.

Net income for the quarter was $41 million or <unk> 62 cents per diluted share as compared with $38 4 million or <unk> 57 per diluted share.

Todd Nelson: Our capital allocation decisions during the year highlight, amongst other priorities, our continued commitment to returning capital to shareholders. During the first half of 2025, we purchased 1.6 million shares for $46,000,000 at an average price of $28.19 per share. With less than 1 million remaining under our prior $50 million authorization and in line with our broader capital allocation strategy, the board has approved a new $75 million share repurchase authorization for immediate use. In addition, effective July 31, the board increased quarterly dividends from $0.13 to $0.15 per share, the second such increase since dividend payments were initiated in 2023. This reflects our commitment to making dividends a growing and integral part of our capital allocation strategy. In summary, we continue to execute against our objectives of responsible and compliant growth.

Additionally from an adjusted operating income and adjusted EPS perspective, the St. Augustine acquisition had and will continue to positively impact year over year comparable to 2025.

Second quarter operating income grew by 11, 7% to $51 4 million, while adjusted operating income, which we believe is more indicator of the underlying operating performance and.

Okay.

Revenue for the second quarter was $209 6 million.

Representing an approximately 26% increase as compared to $166 7 million in the prior year quarter.

And exclude certain noncash items grew 25, 4% to 61 $5 million as compared to $49 1 million.

Revenue comparability was positively impacted by $36 7 million attributed to the St. Augustine acquisition.

Finally.

Adjusted earnings per diluted share was <unk> 67, as compared to 59.

Also supporting revenue growth was total enrollment growth at <unk> and AI system.

Growth across these reported metrics was primarily supported by organic revenue growth at <unk> and <unk> system.

Yeah.

A note on total student enrollments, which increased 17, 4% for the total company as compared to the prior year quarter.

Additionally from an adjusted operating income and adjusted EPS perspective, the St. Augustine acquisition had and will continue to positively impact year over year comparatively through 2025.

At a segment level <unk> increased seven 4% as of June 30, primarily supported by high levels of retention and engagement growth within the corporate student program and high levels of prospective student interest.

Okay.

Revenue for the second quarter was $209 6 million.

Todd Nelson: We have experienced good momentum through the fall, first half of 2025, and are optimistic this year will end on a high note, which should set us up well for 2026 and beyond. Before I turn it over to Ashish Ghia, a quick note on recent legislative actions. While we continue to evaluate the reconciliation bill, the new rules were in line with our expectations, and we believe the overall impact of our industry should be positive. In addition, we are encouraged by the continuation of this administration's deregulatory efforts across numerous federal agencies, including at the Department of Education, and we look forward to the future rulemaking efforts that already have been announced. Overall, we believe these regulatory and legislative actions should provide further opportunities for responsible and compliant growth across our academic institutions. Ashish will now provide more details on the quarter, our outlook, and enrollment trends. Ashish?

And as Todd mentioned this represents seven consecutive quarters of total enrollment growth at <unk> and we expect this growth trend to continue throughout the remainder of 2025.

Representing an approximately 26% increase as compared to $166 7 million in the prior year quarter.

Revenue comparability was positively impacted by $36 7 million attributed to the St. Augustine acquisition.

AI assistant total student enrollments increased by seven 1% as of June 30, driven by the academic calendar at ARU.

Also supporting revenue growth was total enrollment growth at <unk> and AI system.

That resulted in a high number of enrollment days in the quarter as well as underlying organic growth.

A note on total student enrollments, which increased 17, 4% for the total company as compared to the prior year quarter.

Please note that in addition to underlying trends in student retention and engagement enrollment and marketing expenses in any given quarter will also impact total enrollment compatibility as was the case for the second quarter.

At a segment level <unk> increased seven 4% as of June 30, primarily supported by high levels of student retention engagement growth within the corporate student program and high levels of prospective student interest.

Given that although we expect total enrollments at AIA system to be slightly lower in the third quarter as compared to the prior year quarter. We will end the year with double digit enrollment growth, which should positively impact operating performance into 2026.

And as Todd mentioned this represents seven consecutive quarters of total enrollment growth at <unk> and we expect this growth trend to continue throughout the remainder of 2025.

At St. Augustine during the quarter, we had just under 4000 average total students enrolled for the ongoing summer term.

At AIG system total student enrollments increased by seven 1% as of June 30, driven by the academic calendar at ARU that resulted in a high number of enrollment days in the quarter as well as underlying organic growth.

Ashish Ghia: Thank you, Todd. I will start with an overview of the second quarter results and then discuss our balance sheet and full-year outlook before handing the call back to Todd for his closing remarks. Please note all comparisons discussed on this call are versus the comparative prior year period, unless otherwise stated. Please also note that total student enrollment numbers discussed on this call or any enrollment trends that are referred to on this call exclude learners pursuing non-degree-seeking and professional development programs and degree-seeking non-Title IV self-paced programs at CTU and AIU. Finally, a reminder about year-over-year comparability. The financial results for this quarter include the operating performance from the University of St. Augustine for Health Sciences acquisition, which was completed in December of 2024. With that said, let us begin with an overview of our second quarter results.

New enrollments for the summer term were higher as compared to our prior year, primarily due to growth in programs, such as nursing and speech language therapy as well as the introduction of new modalities for the Doctor of physical therapy program.

Please note that in addition to underlying trends in student retention and engagement enrollment data and marketing expenses in any given quarter will also impact total enrollment compatibility as was the case for the second quarter.

As Todd mentioned, we also expect growth for the full term new enrollments, which is typically the biggest term as it relates to the total number of students enrolled.

Given that although we expect total enrollments at AI system to be slightly lower in the third quarter as compared to the prior year quarter. We will end the year with double digit enrollment growth, which should positively impact operating performance into 2026.

Please note that St. Augustine has a traditional university calendar with three academic terms and multiple campuses for in person classes in California, Texas, and Florida Commensurately. We may also provide from time to time information about academic term enrollments. In addition to the typical.

Yeah.

At St. Augustine during the quarter, we had just under 4000 average total students enrolled for the ongoing summer term.

Quarterly reporting.

New enrollments for the summer term were higher as compared to prior year, primarily due to growth in programs, such as nursing and speech language therapy as well as the introduction of new modalities for the Doctor of physical therapy program.

In summary, we expect total company revenue and total enrollments to increase each remaining quarter versus 2024.

Ashish Ghia: Net income for the quarter was $41,000,000 or $0.62 per diluted share, as compared to $38.4 million or $0.57 per diluted share. Second quarter operating income grew by 11.7% to $51.4 million, while adjusted operating income, which we believe is more indicative of the underlying operating performance and excludes certain non-cash items, grew 25.4% to $61.5 million as compared to $49.1 million. Finally, adjusted earnings per diluted share was $0.67 as compared to $0.59. Growth across these reported metrics was primarily supported by organic revenue growth at CTU and AIU system. Additionally, from an adjusted operating income and adjusted EPS perspective, the St. Augustine acquisition had and will continue to positively impact year-over-year comparability through 2025. Revenue for the second quarter was $209.6 million, representing an approximately 26% increase as compared to $166.7 million in the prior year quarter.

Strong levels of prospective student interest and growth in total enrollments from the corporate program at CCC Du sustained.

As Todd mentioned, we also expect growth for the full term new enrollments, which is typically the biggest term as it relates to the total number of students enrolled.

Sustained improvement in student retention and engagement and the St. Augustine acquisition will support this expected growth.

Please also note this expected total enrollment growth in the second half of 2020 Fi should also positively impact operating performance going into 2026.

Yes.

Moving on to our segment results for.

For the second quarter revenue at <unk> was $118 million or four 6% higher than the prior year quarter, while operating income for the quarter increased seven 9% to $46 $3 million.

Quarterly reporting.

In summary, we expect total company revenue and total enrollments to increase each remaining quarter versus 2024.

Primarily due to enrollment and revenue growth trends I previously discussed include.

Strong levels of prospective student interest and growth in total enrollments from the corporate program at CCC Du sustained.

Including sustained demand for our degree programs and continued investment in marketing and admissions to support that demand.

Sustained improvement in student retention and engagement and the St. Augustine acquisition will support this expected growth.

Okay.

At AIG system second quarter revenue increased one 9% to $54 7 million.

Please also note this expected total enrollment growth in the second half of 2020 Fi should also positively impact operating performance going into 2026.

Compared to the prior year quarter.

Excluding a nonrecurring expense benefit recorded in the prior year current quarter operating income of $12 1 million would have shown an increase versus the prior year quarter of $12 9 million.

Yes.

Moving on to our segment results for.

Ashish Ghia: Revenue comparability was positively impacted by $36.7 million attributed to the St. Augustine acquisition. Also supporting revenue growth was total enrollment growth at CTU and AIU system. A note on total student enrollments, which increased 17.4% for the total company as compared to the prior year quarter. At a segment level, CTU increased 7.4% as of June 30, primarily supported by high levels of student retention and engagement, growth within the corporate student program, and high levels of prospective student interest.

For the second quarter revenue at <unk> was $118 million or four 6% higher than the prior year quarter, while operating income for the quarter increased seven 9% to $46 $3 million.

In the second quarter, St. Augustine recorded revenue of $36 $7 million excluding.

Excluding depreciation and amortization.

Primarily due to enrollment and revenue growth trends I previously discussed include.

Adjusted operating income from St. Augustine was $5 5 million for the quarter and as previously shared is accretive to our overall adjusted operating results.

Including sustained demand for our degree programs and continued investment in marketing and admissions to support that demand.

Okay.

Moving on to corporate and other operating losses for the quarter were $5 2 million as compared to $9 8 million in the prior year quarter.

At <unk> system second quarter revenue increased one 9% to $54 7 million compared.

Compared to the prior year quarter.

Excluding a nonrecurring expense benefit recorded in the prior year current quarter operating income of $12 $1 million would have shown an increase versus the prior year quarter of $12 9 million.

The improvement in operating loss was primarily due to acquisition related expenses incurred in the prior year.

Ashish Ghia: As Todd Nelson mentioned, this represents seven consecutive quarters of total enrollment growth at Colorado Technical University, and we expect this growth trend to continue throughout the remainder of 2025. At American InterContinental University system, total student enrollments increased by 7.1% as of June 30, driven by the academic calendar at American InterContinental University that resulted in a high number of enrollment days in the quarter, as well as underlying organic growth. Please note that in addition to underlying trends in student retention and engagement, enrollment days and marketing expenses in any given quarter will also impact total enrollment comparability, as was the case for the second quarter.

Turning to income taxes.

For the second quarter, we recorded a provision for income taxes of $15 2 million.

In the second quarter, St. Augustine recorded revenue of $36 7 million <unk>.

Bringing our year to date effective tax rate to 24, 9%.

Excluding depreciation and amortization the adjusted operating income from St. Augustine was $5 5 million for the quarter.

The year to date effective tax rate was positively impacted by the tax effect of stock based compensation and the release of previously recorded tax reserves, which together reduced the effective tax rate by four 4%.

And as previously shared is accretive to our overall adjusted operating results.

Moving on to corporate and other operating losses for the quarter were $5 2 million as compared to $9 8 million in the prior year quarter.

Finally, we expect that for the full year 2025, our effective tax rate will be between 26% and 26, 5%, which includes an estimated benefit for the tax effect of stock based compensation and the release of previously recorded tax reserves for uncertain tax positions.

Ashish Ghia: Given that, although we expect total enrollments at American InterContinental University system to be slightly lower in the third quarter as compared to the prior year quarter, we will end the year with double-digit enrollment growth, which should positively impact operating performance into 2026. At University of St. Augustine for Health Sciences, during the quarter, we had just under 4,000 average total students enrolled for the ongoing summer term. New enrollments for the summer term were higher as compared to a prior year, primarily due to growth in programs such as nursing and speech-language therapy, as well as the introduction of new modalities for the doctorate of physical therapy program. As Todd Nelson mentioned, we also expect growth for the fall term new enrollments, which is typically the biggest term as it relates to the total number of students enrolled. Please note that University of St.

The improvement in operating loss was primarily due to acquisition related expenses incurred in the prior year.

Turning to income taxes.

For the second quarter, we recorded a provision for income taxes of $15 $2 million.

Separately, while we are still evaluating any tax related impacts from the reconciliation bill the <unk>.

Bringing our year to date effective tax rate to 24, 9%.

Provisions allowed 100% bonus depreciation.

In the immediate expensing of domestic research expenditures are expected to reduce our federal cash taxes paid beginning in the current year.

Additionally, various tax attributes acquired with the University of St. Augustine acquisition are also expected to reduce our federal cash taxes in 2025.

Ashish Ghia: Augustine for Health Sciences has a traditional university calendar with three academic terms and multiple campuses for in-person classes in California, Texas, and Florida. Commensurately, we may also provide, from time to time, information about academic term enrollments in addition to the typical quarterly reporting. In summary, we expect total company revenue and total enrollments to increase each remaining quarter versus 2024. Strong levels of prospective student interest and growth in total enrollments from the corporate program at Colorado Technical University, sustained improvement in student retention and engagement, and the University of St. Augustine for Health Sciences acquisition will support this expected growth. Please also note this expected total enrollment growth in the second half of 2025 should also positively impact operating performance going into 2026. Moving on to our segment results.

Now to our balance sheet and liquidity for.

For the year to date ended June 32025, net cash flows provided by operations were $143 $9 million versus $93 million in the prior year to date.

Separately, while we are still evaluating any tax related impacts from the reconciliation bill.

This growth versus the priority of primarily supported by Euro <unk> improvement in adjusted operating income.

Provisions allowed 100% bonus depreciation.

And the immediate expensing of domestic research expenditures are expected to reduce our federal cash taxes paid beginning in the current year.

We ended the quarter with $659 6 million of cash cash equivalents restricted cash and available for sale short term investments.

Additionally, various tax attributes acquired with the University of St. Augustine acquisition are also expected to reduce our federal cash taxes in 2025.

This represents an increase of approximately $68 million from the year end.

Some of the primary uses of cash during the first half were.

Yeah.

$46 $1 million in return of capital to shareholders in the form of stock repurchases.

Now to our balance sheet and liquidity for.

For the year to date ended June 32025, net cash flows provided by operations were $143 $9 million versus $93 million in the prior year to date.

$17 $7 million of quarterly dividend and dividend equivalent payments.

$27 million for federal and state income tax payments.

Ashish Ghia: For the second quarter, revenue at CTU was $118 million, or 4.6% higher than the prior year quarter, while operating income for the quarter increased 7.9% to $46.3 million, primarily due to enrollment and revenue growth trends I previously discussed, including sustained demand for our degree programs and continued investment in marketing and admissions to support that demand. At AIU system, second quarter revenue increased 1.9% to $54.7 million compared to the prior year quarter. Excluding a non-recurring expense benefit recorded in the prior year, current quarter operating income of $12.1 million would have shown an increase versus the prior year quarter of $12.9 million. In the second quarter, University of St. Augustine for Health Sciences recorded revenue of $36.7 million. Excluding depreciation and amortization, the adjusted operating income from University of St.

This growth versus the prior year, primarily supported by Euro <unk> improvement in adjusted operating income.

And $4 5 million.

For capital expenditures.

For full year 2025, we continue to foresee capital expenditures to be approximately one 5% of revenues.

We ended the quarter with $659 6 million of cash cash equivalents restricted cash and available for sale short term investments.

Before I share the updated outlook let.

Let me take a minute to discuss capital allocation we.

This represents an increase of approximately $68 million from the year end.

We are pleased to announce that consistent with our dividend policy and continued confidence in our long term outlook. The board of directors approved a 15, 4% increase to our quarterly dividend payment to <unk> 15 per share payable.

Some of the primary uses of cash during the first half were.

Yeah.

$46 $1 million in return of capital to shareholders in the form of stock repurchases.

Payable on September 12, 2025 to holders of record of <unk> common stock at the close of business on September <unk> 2025.

$17 7 million of quarterly dividend and dividend equivalent payments.

$27 million for federal and state income tax payments.

Future quarterly dividend payments are expected to be paid out of free cash flows for the relevant year subject to board approval and the Companys available retained earnings financial condition and other relevant factors.

And $4 5 million.

For capital expenditures.

For full year 2025, we continue to foresee capital expenditures to be approximately one 5% of revenues.

Subject to the requirements just mentioned, we continue to expect the quarterly dividend payments will remain an integral and growing component of our balanced capital allocation strategy.

Before I share the updated outlook let.

Ashish Ghia: Augustine for Health Sciences was $5.5 million for the quarter, and as previously shared, is accretive to our overall adjusted operating results. Moving on to corporate and other, operating losses for the quarter were $5.2 million as compared to $9.8 million in the prior year quarter. The improvement in operating loss was primarily due to acquisition-related expenses incurred in the prior year. Turning to income taxes, for the second quarter, we recorded a provision for income taxes of $15.2 million, bringing our year-to-date effective tax rate to 24.9%. The year-to-date effective tax rate was positively impacted by the tax effect of tax-based compensation and the release of previously recorded tax reserves, which together reduced the effective tax rate by 4.4%.

Let me take a minute to discuss capital allocation we.

And in line with this most recent board decision, we generally expect to review quarterly dividend amount on an annual basis.

Payable on September 12, 2025 to holders of record of <unk> common stock at the close of business on September <unk> 2025.

During the first half of 2025, we repurchased one 6 million shares for $46 1 million at an average price of $28 19 per share.

With less than a $1 million left under our prior authorization. The board has authorized a new share repurchase program under which the company may repurchase up to $75 million.

Subject to the requirements just mentioned, we continue to expect the quarterly dividend payments will remain an integral and growing component of our balanced capital allocation strategy.

Of its outstanding common stock.

The new authorization reflects the boards confidence in the company's long term strategy strong balance sheet fashionable and commitment to delivering value to shareholders.

And in line with this most recent board decision, we generally expect to review quarterly dividend amount on an annual basis.

Ashish Ghia: Finally, we expect that for the full year 2025, our effective tax rate will be between 26% and 26.5%, which includes an estimated benefit for the tax effect of tax-based compensation and the release of previously recorded tax reserves for uncertain tax positions. Separately, while we are still evaluating any tax-related impacts from the reconciliation bill, the provisions allowing 100% bonus depreciation and the immediate expensing of domestic research expenditures are expected to reduce our federal cash taxes paid beginning in the current year. Additionally, various tax attributes acquired with the University of St. Augustine for Health Sciences acquisition are also expected to reduce our federal cash taxes in 2025. Now to our balance sheet and liquidity. For the year-to-date ended June 30, 2025, net cash flows provided by operations were $143.9 million versus $93 million in the prior year to date.

Subject to market conditions, we will remain opportunistic regarding future share repurchases.

Yeah.

Additionally, during the first half of 2025, we repurchased one 6 million shares for $46 1 million at an average price of plenty of $1 19 per share.

We will also continue to maintain a strong balance sheet, while actively evaluating diverse strategies to further enhance stockholder value including acquisitions.

At the same time, our balanced approach to capital allocation also includes investments in organic projects focusing on technology update that supports student success.

With less than a $1 million left under our prior authorization. The board has authorized a new share repurchase program under which the company may repurchase up to $75 million of.

Now, let's discuss our outlook for 2025.

Its outstanding common stock.

Yeah.

With better than anticipated operating trends, we are raising our full year adjusted operating income outlook to a range between $230 million and $236 million.

The new authorization reflects the boards confidence in the company's long term strategy strong balance sheet cash flow and commitment to delivering value to shareholders.

Subject to market conditions, we will remain opportunistic regarding future share repurchases.

This compares to an adjusted operating income of $188 9 million in 2024 with the expected increase due to the St. Augustine acquisition as well as organic growth at <unk> and <unk> system.

We will also continue to maintain a strong balance sheet, while actively evaluating diverse strategies to further enhance stockholder value including acquisitions.

Adjusted earnings per diluted share.

At the same time, our balanced approach to capital allocation also includes investments in organic projects focusing on technology update that support student success.

I'd now expected to range between $2 48, and $2 55.

Ashish Ghia: This growth versus the prior year was primarily supported by year-over-year improvement in adjusted operating income. We ended the quarter with $659.6 million of cash, cash equivalents, restricted cash, and available for sale short-term investments. This represents an increase of approximately $68 million from the year-end. Some of the primary uses of cash during the first half were $46.1 million in return of capital to shareholders in the form of stock repurchases, $17.7 million of quarterly dividend and dividend equivalent payments, $27 million for federal and state income tax payments, and $4.5 million for capital expenditures. For full year 2025, we continue to foresee capital expenditures to be approximately 1.5% of revenues. Before I share the updated outlook, let me take a minute to discuss capital allocation.

This is $2 26 in 2024.

Please note that beginning in 2025, the GAAP and adjusted EPS calculations include incremental expenses related to depreciation and finance leases for St. Augustine.

Now, let's discuss our outlook for 2025.

With better than anticipated operating trends, we are raising our full year adjusted operating income outlook to a range between $230 million and $236 million.

These expenses are excluded for the purpose of adjusted operating income the.

The 20% adjusted EPS range is impacted by approximately <unk> 25 per diluted share related to these incremental expenses.

This compares to an adjusted operating income of $188 $9 million in 2024 with the expected increase due to the St. Augustine acquisition as well as organic growth at <unk> and <unk> system.

This outlook reflects our current belief that the consistently high levels of student retention and student engagement that we experienced in the first half will continue to persist in 2025.

Adjusted earnings per diluted share.

Now expected to range between $2 48, and $2 55.

Additionally, the higher levels of prospective student interest, which we have experienced since the second half of 2024 will continue through the second half of 2025.

Versus $2 26 in 2024.

Please note that beginning in 2025, the GAAP and adjusted EPS calculations include incremental expenses related to depreciation and finance leases for St. Augustine.

And any changes to the regulatory or legislative environment will not have a meaningful impact on prospective student interest levels.

These expenses are.

Excluded for the purpose of adjusted operating income.

Full year revenue will be higher than 2024, primarily due to the recent acquisition of St. Augustine.

Ashish Ghia: We are pleased to announce that, consistent with our dividend policy and continued confidence in our long-term outlook, the Board of Directors approved a 15.4% increase to our quarterly dividend payment to $0.15 per share, payable on September 12, 2025, to the holders of record of PERDOCEO's common stock at the close of business on September 2, 2025. Future quarterly dividend payments are expected to be paid out of free cash flows for the relevant year, subject to board approval and the company's available retained earnings, financial condition, and other relevant factors. Subject to the requirements just mentioned, we continue to expect that quarterly dividend payments will remain an integral and growing component of our balanced capital allocation strategy. In line with this most recent board decision, we generally expect to review quarterly dividend amounts on an annual basis.

The 20% to adjusted EPS range is impacted by approximately 25 per diluted share related to these incremental expenses.

At CPU with consistently high levels of prospective student interest supported by strong retention and engagement trends and growth from the corporate suite program.

This outlook reflects our current belief that the consistently high levels of student retention and student engagement that we experienced in the first half will continue to persist in 2025.

We expect revenue and total enrollment growth for each quarter and full year 2025.

Additionally, the higher levels of prospective student interest, which we have experienced since the second half of 2024 will continue through the second half of 2025.

At AIG system, we may see quarterly variability in total enrollment trends due to the enrolment day comparatively.

Additionally for year end 2025, <unk> has an additional academic session starting in December 2025.

And any changes to the regulatory or legislative environment will not have a meaningful impact on prospective student interest levels.

Which will significantly contribute to total enrollment growth when comparing year over year total enrollments at December 31, and should positively impact 2026 operating performance.

Full year revenue will be higher than 2024, primarily due to the recent acquisition of St. Augustine.

We also expect AI system experienced revenue growth for the full year 2025, we each quarter generally in line with the prior year.

At CPU with consistently high levels of prospective student interest supported by strong retention and engagement trends and growth from the corporate student program.

As a reminder, the academic calendar of CPU and AIG system may impact the comparability of revenue days and enrollment results in any given quarter.

Ashish Ghia: Additionally, during the first half of 2025, we repurchased 1.6 million shares for $46.1 million at an average price of $28.19 per share. With less than $1 million left under our prior authorization, the board has authorized a new share repurchase program under which the company may repurchase up to $75 million of its outstanding common stock. The new authorization reflects the board's confidence in the company's long-term strategy, strong balance sheet, cash flow, and commitment to delivering value to shareholders. Subject to market conditions, we will remain opportunistic regarding future share repurchases. We will also continue to maintain a strong balance sheet while actively evaluating diverse strategies to further enhance stockholder value, including acquisitions. At the same time, our balanced approach to capital allocation also includes investments in organic projects focusing on technology updates that support student success. Now, let us discuss our outlook for 2025.

We expect revenue and total enrollment growth for each quarter and full year 2025.

At AIG system, we may see quarterly variability in total enrollment trends due to the enrolment the comparability.

But not necessarily in the same magnitude or direction.

For the third quarter of 2025, we expect adjusted operating income to be in the range of $57 million to $59 million as compared to $47 8 million in the prior year quarter with adjusted earnings per diluted share to range between 60% and 62 cents per diluted share.

Additionally for year end 2025, <unk> has an additional academic session starting in December 2025.

Which will significantly contribute to total enrollment growth when comparing year over year total enrollments at December 31, and should positively impact 2026 operating performance.

Versus 59 in the third quarter of 2024.

We also expect AI system experienced revenue growth for the full year 2025, we each quarter generally in line with the prior year.

Our 2025 outlook also assumes ongoing investments in technology data analytics, and real estate academics and student support processes.

As a reminder, the academic calendar of TCU and AIG system may impact the comparability of revenue days and enrollment results in any given quarter.

We believe these investments have been successful in positively impacting academic outcomes and student experiences. Additionally.

But not necessarily in the same magnitude or direction.

Additionally, we will also continue to increase the size of CPU and AIG systems corporate student program teams.

Please refer to our earnings release filed today for important information about the key assumptions and factors underlying this discussion from today's call as well as the GAAP to non-GAAP reconciliations.

Ashish Ghia: With better than anticipated operating trends, we are raising our full-year adjusted operating income outlook to range between $230 million and $236 million. This compares to an adjusted operating income of $188.9 million in 2024, with the expected increase due to the University of St. Augustine for Health Sciences acquisition, as well as organic growth at Colorado Technical University and American InterContinental University system. Adjusted earnings per diluted share are now expected to range between $2.48 and $2.55 versus $2.26 in 2024. Please note that beginning in 2025, the GAAP and adjusted EPS calculations include incremental expenses related to depreciation and finance leases for University of St. Augustine for Health Sciences. These expenses are excluded for the purpose of adjusted operating income. The 2025 adjusted EPS range is impacted by approximately $0.25 per diluted share related to these incremental expenses.

With that I will turn the call back over to Todd for his closing remarks.

Versus 59 in the third quarter of 2024.

Our 2025 outlook also assumes ongoing investments in technology data analytics, and real estate academics and student support processes.

Sure.

Thank you Ashish again, I am pleased with our performance through the first half of 2025 and remain optimistic as we continue to invest in student learning and support processes to further enhance student retention academic outcomes and experiences.

We believe these investments have been successful in positively impacting academic outcomes and student experiences. Additionally.

I'd also like to once again, thank all of our students and staff for the continued hard work and support.

Additionally, we will also continue to increase the size of CPU and AI systems corporate student program teams.

Thank you for joining us and we look forward to speaking with you again next quarter.

With that I will turn the call back over to Todd for his closing remarks Todd.

Yeah.

Ashish Ghia: This outlook reflects our current belief that the consistently high levels of student retention and student engagement that we experienced in the first half will continue to persist in 2025. Additionally, the higher levels of prospective student interest, which we have experienced since the second half of 2024, will continue through the second half of 2025. Any changes to the regulatory or legislative environment will not have a meaningful impact on prospective student interest levels. Full-year revenue will be higher than 2024, primarily due to the recent acquisition of University of St. Augustine for Health Sciences.

I'd also like to once again, thank you.

All of our students and staff for the continued hard work and support.

Thank you for joining us and we look forward to speaking with you again next quarter.

That concludes today's call. Thank you all for joining you may now disconnect everyone have a great day.

Yeah.

Ashish Ghia: At Colorado Technical University, with consistently high levels of prospective student interest, supported by strong retention and engagement trends, and growth from the corporate student program, we expect revenue and total enrollment growth for each quarter in full year 2025. At American InterContinental University system, we may see quarterly variability in total enrollment trends due to the enrollment day comparability. Additionally, for year-end 2025, American InterContinental University has an additional academic session starting in December 2025, which will significantly contribute to total enrollment growth when comparing year-over-year total enrollments at December 31 and should positively impact 2026 operating performance. We also expect AIU system to experience revenue growth for the full year 2025, with each quarter generally in line with the prior year.

Ashish Ghia: As a reminder, the academic calendar at CTU and AIU system may impact the comparability of revenue days and enrollment results in any given quarter, but not necessarily in the same magnitude or direction. For the third quarter of 2025, we expect adjusted operating income to be in the range of $57 million to $59 million, as compared to $47.8 million in the prior year quarter, with adjusted earnings per diluted share to range between $0.60 and $0.62 per diluted share versus $0.59 in the third quarter of 2024. Our 2025 outlook also assumes ongoing investments in technology, data analytics, real estate, academics, and student support processes. We believe these investments have been successful in positively impacting academic outcomes and student experiences. Additionally, we will also continue to increase the size of CTU and AIU systems' corporate student program teams.

Ashish Ghia: Please refer to our earnings release file today for important information about the key assumptions and factors underlying this discussion from today's call, as well as the GAAP to non-GAAP reconciliations. With that, I will turn the call back over to Todd for his closing remarks. Todd?

Todd Nelson: Thank you, Ashish Ghia. Again, I am pleased with our performance through the first half of 2025 and remain optimistic as we continue to invest in student learning and support processes to further enhance student retention, academic outcomes, and experiences. I'd also like to once again thank all of our students and staff for their continued hard work and support. Thank you for joining us, and we look forward to speaking with you again next quarter.

Q2 2025 Perdoceo Education Corp Earnings Call

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