Q2 2026 Perdoceo Education Corp Earnings Call

August 6, 2026

Operator: Ladies and gentlemen, thank you for standing by. Hello, and welcome to Perdoceo Education Corp's Q2 2026 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. Thank you. I would now like to turn the conference over to Nick Nelson. Please go ahead.

Nick Nelson: Thank you, operator. Good afternoon, everyone, thank you for joining us for our Q2 2026 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 of the company's website at perdoceoed.com.

Speaker #2: afternoon, everyone, and thank you for joining us for our second quarter 2026 earnings call. With me on the call today is Todd Nelson, president and chief executive chief financial officer.

Speaker #2: This conference call is being webcast live within the Investor Relations section of the company's website, PERDOCEOED.com. A webcast replay will also be available on our site for 90 days following the call, and you can always contact the Alpha IR Group for investor relations support.

Nick Nelson: A webcast replay will also be available on our site for 90 days following the call. 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 as amended.

Speaker #2: Let me remind you that this afternoon's earnings release and remarks made today include forward-looking statements as to finds in section 21E of the Securities Exchange Act of 1934 as amended.

Speaker #2: These statements are based on assumptions made by, and information currently available to, Perdoceo Education Corporation and involve risks and uncertainties that can cause actual future results, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these forward-looking statements. Thank you, operator.

Nick Nelson: These statements are based on assumptions made by and information currently available to Perdoceo Education Corp, involve risks, uncertainties that could cause actual future results, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these forward-looking statements. 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.

Speaker #2: 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 changed circumstances, or for any other reason.

Nick Nelson: 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 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.

Speaker #2: 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 financial measures and is available within the investor relations page of the company's website.

Nick Nelson: 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 financial 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?

Speaker #2: With that, I'd like to turn the call over to Todd Nelson. Todd?

Speaker #3: Thank you, Nick. Good afternoon, everyone, and thank you for joining us for our second quarter 2026 earnings call. Our portfolio of academic institutions performed well during the second quarter and remained committed to supporting adult learners by offering flexible education pathways that help working professionals grow in their careers.

Todd Nelson: Thank you, Nick. Good afternoon, everyone, and thank you for joining us for our Q2 2026 earnings call. Our portfolio of academic institutions performed well during the Q2 and remain committed to supporting adult learners by offering flexible education pathways that help working professionals grow in their careers, while also training and educating the healthcare workforce to provide quality medical care across communities nationwide.

Speaker #3: While also training and educating the healthcare workforce to provide quality medical care across communities nationwide. CTU and AIUS continue to serve a broad population of career-minded students through fully online and hybrid programs, while the University of St.

Todd Nelson: CTU and AIUS continue to serve a broad population of career-minded students through fully online and hybrid programs, while the University of St. Augustine for Health Sciences prepares graduate-level health science professionals in physical therapy, occupational therapy, speech language pathology, and nursing. I'll start by discussing some key highlights for the Q2. Ashish will then provide more details on our operating and financial performance and discuss the Q3 and full year 2026 outlook.

Todd Nelson: CTU and AIUS continue to serve a broad population of career-minded students through fully online and hybrid programs, while the University of St. Augustine for Health Sciences prepares graduate-level health science professionals in physical therapy, occupational therapy, speech-language pathology, and nursing. I'll start by discussing some key highlights for Q2. Ashish will then provide more details on our operating and financial performance and discuss the Q3 and full-year 2026 outlook.

Speaker #3: Augustine for Health Sciences prepares graduate-level health science professionals in physical therapy, occupational therapy, speech, language pathology, and nursing. I'll start by discussing some key highlights for the second quarter.

Speaker #3: Ashish will then provide more details on our operating and financial performance and discuss the third quarter and full-year 2026 outlook. As always, I want to thank our faculty, student support staff, and employees across the organization for their continued dedication and hard work in serving and educating our students.

Todd Nelson: As always, I want to thank our faculty, student support staff, and employees across the organization for their continued dedication and hard work in serving and educating our students. Operating performance at our academic institutions has been ahead of our expectation for the H1 2026, with year-to-date operating income growth of 14.4%, supported by revenue growth of 3%. Net income for the Q2 was $48 million, or $0.75 per diluted share, as compared to $41 million or $0.62 per diluted share in the prior year quarter. Our academic institutions continue to operate with disciplined expense management while making purposeful investments across academics, program development, technology, and student support teams. With that context, here are a few additional highlights for the quarter. Total student enrollments grew just under 1% at the end of the Q2, excluding Trident University, which is a part of AIUS.

Speaker #3: Operating performance at our academic institutions has been ahead of our expectations for the first half of 2026, with year-to-date operating income growth of 14.4%, supported by revenue growth of 3%.

Speaker #3: Net income for the second quarter was $48 million, or $75 cents, per diluted share, as compared to $41 million or $62 cents, per diluted share in the prior year quarter.

Speaker #3: Our academic institutions continue to operate with disciplined expense management while making purposeful investments across academics, program development, technology, and student support teams. With that context, here are a few additional highlights for the quarter.

Todd Nelson: Our academic institutions continue to operate with disciplined expense management while making purposeful investments across academics, program development, technology, and student support teams. With that context, here are a few additional highlights for the quarter. Total student enrollments grew just under 1% at the end of Q2, excluding Trident University, which is a part of AIUS.

Speaker #3: Total student enrollments grew just under 1% at the end of the second quarter, excluding Triton University which is a part of AIUS, all of our academic institutions, experienced enrollment growth supported by strong retention trends and healthy level of prospective students, looking to pursue a degree at one of our academic institutions.

Todd Nelson: All of our academic institutions experienced enrollment growth supported by strong retention trends and healthy level of prospective students looking to pursue a degree at one of our academic institutions. Ashish will explain these enrollment trends in more detail. The shift from traditional internet search engines to LLM-based AI-powered search is changing how prospective students research and evaluate their education options. Our analysis indicates a majority of our prospective student inquiries come from channels that are not directly impacted by this trend. In response to increased prospective student interest, we are growing our investment in those channels not impacted, while selectively leveraging generative artificial intelligence to identify and engage prospective students who we believe are more likely to succeed at one of our academic institutions.

Speaker #3: Ashish will detail. The shift from traditional internet search engines to LLM-based AI-powered search is changing how prospective students research and evaluate their education options.

Speaker #3: However, our analysis indicates a majority of our prospective student increase comes from channels that are not directly impacted by this trend. In response to increased prospective student interest, we are growing our investment in those channels, not impacted, while selectively leveraging generative artificial intelligence to identify and engage prospective students who we believe are more likely to succeed at one of our academic institutions.

Todd Nelson: Our analysis indicates a majority of our prospective student inquiries come from channels that are not directly impacted by this trend. In response to increased prospective student interest, we are growing our investment in those channels not impacted, while selectively leveraging generative artificial intelligence to identify and engage prospective students who we believe are more likely to succeed at one of our academic institutions.

Speaker #3: As a result, while we are seeing some shift in prospective student behavior as AI-powered search grows, the overall impact on enrollment has been modest thus far.

Todd Nelson: As a result, while we are seeing some shift in prospective student behavior as AI-powered search grows, the overall impact on enrollment has been modest thus far. We remain focused on keeping our programs visible and accessible as search behavior evolves, actively updating our content so that it is readily accessible to and optimized by AI-powered search, while investing in our brands to strengthen the visibility of our academic institutions as these AI engines continue to shape discovery. Through our corporate student programs, we provide accredited degree programs to employees of our partner organizations, supporting their career advancements while helping corporate partners strengthen employee development and retention. Total enrollment for the corporate student programs at CTU and AIUS continue to grow, this remains a priority as we continue to make strategic investments in technology and personnel to support future enrollment growth.

Speaker #3: We remain focused on keeping our programs visible and accessible as search behavior evolves. Actively updating our content so that it is readily accessible to and optimized by AI-powered search, while investing in our brands to strengthen the visibility of our academic institutions as these AI engines continue to shape discovery.

Speaker #3: Through our corporate student programs, we provide accredited degree programs to employees of our partner organizations. Supporting their career advancements while helping corporate partners strengthen employee development and retention.

Todd Nelson: Through our corporate student programs, we provide accredited degree programs to employees of our partner organizations, supporting their career advancements while helping corporate partners strengthen employee development and retention. Total enrollment for the corporate student programs at CTU and AIUS continue to grow, this remains a priority as we continue to make strategic investments in technology and personnel to support future enrollment growth.

Speaker #3: Total enrollment for the corporate student programs at CTU and AIUS continues to grow, and this remains a priority as we continue to make strategic investments in technology and personnel to support future enrollment growth.

Speaker #3: Our capital allocation decisions during the year highlight, amongst other priorities, our continued commitment to returning capital to shareholders. In line with our broader strategy, on August 6th, the board authorized an increase to our quarterly dividend with $0.15 to $0.15 to $0.17 per share the third such increase since the dividend payments were initiated in 2023.

Todd Nelson: Our capital allocation decisions during the year highlight, amongst other priorities, our continued commitment to returning capital to shareholders. In line with our broader strategy, on 6 August, the board authorized an increase to our quarterly dividend from $0.15 to $0.17 per share, the third such increase since the dividend payments were initiated in 2023. This reflects our commitment to making dividends a growing and integral part of our capital allocation strategy. Before I pass the call to Ashish, I'd like to take a moment to highlight the successful acquisition and integration of the University of St. Augustine for Health Sciences. We completed the acquisition in 2024 and currently have approximately 4,200 students enrolled at the university.

Speaker #3: This reflects our commitment to making dividends a growing and integral part of our capital allocation strategy. Before I pass the call to Ashish, I'd like to take a moment to highlight the successful acquisition and integration of the University of St.

Todd Nelson: Before I pass the call to Ashish, I'd like to take a moment to highlight the successful acquisition and integration of the University of St. Augustine for Health Sciences. We completed the acquisition in 2024 and currently have approximately 4,200 students enrolled at the university.

Speaker #3: Augustine for Health Sciences. We completed the acquisition in 2024 and currently have approximately 4,200 students enrolled at the university. Since the acquisition, St. Augustine has expanded several of its program offerings, as it introduced new modalities at existing campus locations, giving prospective students greater flexibility in how they pursue a degree.

Todd Nelson: Since the acquisition, St. Augustine has expanded several of its program offerings as it introduced new modalities at existing campus locations, giving prospective students greater flexibility in how they pursue a degree. We believe the university is on track to have strong revenue and adjusted operating income for the full year of 2026, with further growth expected in 2027. Our success with acquisitions over the past few years, we believe, reflects a capability we have now built, the ability to extend the depth and breadth of our program offerings by acquiring and integrating academic institutions while maintaining their value proposition and creating long-term value. Consistent with our capital allocation strategy, we are evaluating accretive acquisition opportunities to complement our organic growth, and we are very encouraged with our ongoing dialogue with a range of academic institutions across our various programmatic areas of focus, including health sciences.

Speaker #3: We believe the university is on track to have a strong revenue and adjust to the operating income for the full year of 2026, with further growth expected in 2027.

Speaker #3: Our success with acquisitions over the past few years, we believe, reflects a capability we have now built: the ability to extend the depth and breadth of our program offerings by acquiring and integrating academic institutions while maintaining their value proposition and creating long-term value.

Todd Nelson: Our success with acquisitions over the past few years, we believe, reflects a capability we have now built, the ability to extend the depth and breadth of our program offerings by acquiring and integrating academic institutions while maintaining their value proposition and creating long-term value.

Speaker #3: Consistent with our capital allocation strategy, we are evaluating a creative acquisition opportunities to complement our organic growth, and we are very encouraged with our ongoing dialogue with a range of academic institutions across our various programmatic areas of focus.

Todd Nelson: Consistent with our capital allocation strategy, we are evaluating accretive acquisition opportunities to complement our organic growth, and we are very encouraged with our ongoing dialogue with a range of academic institutions across our various programmatic areas of focus, including health sciences.

Speaker #3: Including health sciences. With proven integration capabilities, a strong balance sheet, and a disciplined approach to capital allocation, we will act when the right opportunity emerges.

Todd Nelson: With proven integration capabilities, a strong balance sheet, and disciplined approach to capital allocation, we will act when the right opportunity emerges. In summary, with our academic institutions' solid operating results this quarter, we remain optimistic as we move through the remainder of 2026. Ashish will now provide more details on the financial results, our 2026 outlook, and total student enrollment trends. Ashish?

Speaker #3: In summary, with our academic institutions' solid operating results this quarter, we remain 2026. Ashish will now provide more details on the financial results our 2026 outlook and total student enrollment trends.

Speaker #3: Ashish?

Speaker #2: Thank you, Todd. I will review the second quarter results and then discuss our balance sheet, as well as the third quarter and full-year 2026 outlook, before handing the call back to Todd for his closing remarks.

Ashish Ghia: Thank you, Todd. I will review the Q2 results and then discuss our balance sheet as well as the Q3 and full year 2026 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. In addition, total student enrollment numbers and any referenced student enrollment trends discussed during this call do not include learners pursuing non-degree seeking and professional development programs and degree-seeking non-Title IV self-paced programs at our universities. Turning to the Q2, net income for the quarter was $48 million or $0.75 per diluted share, as compared to $41 million or $0.62 per diluted share.

Ashish Ghia: Thank you, Todd. I will review the Q2 results and then discuss our balance sheet as well as the Q3 and full-year 2026 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.

Speaker #2: Please note, all comparisons discussed on this call are versus the comparative prior year period unless otherwise stated. In addition, total student enrollment numbers and any referenced student enrollment trends discussed during this call do not include learners pursuing non-degree-seeking and professional development programs and degree-seeking non-title IV self-paced programs at our universities.

Ashish Ghia: In addition, total student enrollment numbers and any referenced student enrollment trends discussed during this call do not include learners pursuing non-degree-seeking and professional development programs and degree-seeking non-Title IV self-paced programs at our universities. Turning to the Q2, net income for the quarter was $48 million or $0.75 per diluted share, as compared to $41 million or $0.62 per diluted share.

Speaker #2: Turning to the second quarter, net income for the quarter was $48 million or $75 cents per diluted share, as compared to $41 million or $62 cents per diluted share.

Speaker #2: Second quarter revenue increased $1.8% to $213.4 million, with year-to-date revenue now up 3% as compared to the prior year-to-date. Operating leverage remains strong, as we continue to reinvest a portion of revenue growth in marketing, admissions, and various student support processes, while maintaining disciplined cost management.

Ashish Ghia: Q2 revenue increased 1.8% to $213.4 million, with year-to-date revenue now up 3% as compared to the prior year-to-date. Operating leverage remains strong as we continue to reinvest a portion of revenue growth in marketing, admissions, and various student support processes while maintaining disciplined cost management. Operating income for the quarter grew by 6.8% to $54.9 million, while adjusted operating income, which we believe is more indicative of the underlying operating performance and excludes depreciation and amortization, grew 4.4% to $64.2 million as compared to $61.5 million, resulting in an adjusted EPS of $0.80, an increase of 19.4%.

Speaker #2: Operating income for the quarter grew by $6.8% to $54.9 million, while adjusted operating income, which we believe is more indicative of the underlying operating performance, and excludes depreciation and amortization, grew 4.4% to $64.2 million as compared to $61.5 million.

Ashish Ghia: Operating income for the quarter grew by 6.8% to $54.9 million, while adjusted operating income, which we believe is more indicative of the underlying operating performance and excludes depreciation and amortization, grew 4.4% to $64.2 million as compared to $61.5 million, resulting in an adjusted EPS of $0.80, an increase of 19.4%.

Speaker #2: Resulting in an adjusted earnings per diluted share of $0.80, an increase of 19.4%. From an operations perspective, both CTU and AIU System continue to invest in marketing and admissions to serve the interest from prospective students for their academic programs.

Ashish Ghia: From an operations perspective, both CTU and AIU System continued to invest in marketing and admissions to serve the interests from prospective students for their academic programs, while retention levels trended near multi-year highs. These institutions also continued to explore and deploy technology, including AI-based tools designed to strengthen academic outcomes and improve the overall student experience. University of St. Augustine for Health Sciences continued to expand its program offerings through introduction of new modalities at existing campus locations, giving prospective students more flexibility in how they pursue a degree. St. Augustine prepares healthcare practitioners through a combination of on-ground and online offerings, and a selective admissions process, generally requiring prospective students to hold an undergraduate degree and complete a comprehensive application admissions process, has allowed them to maintain strong academic outcomes and student experiences.

Speaker #2: While retention levels trended near multi-year highs. These institutions also continue to explore and deploy technology, including AI-based tools, designed to strengthen academic outcomes and improve the overall student experience.

Ashish Ghia: University of St. Augustine for Health Sciences continued to expand its program offerings through introduction of new modalities at existing campus locations, giving prospective students more flexibility in how they pursue a degree.

Speaker #2: The University of St. Augustine for Health Sciences continues to expand its program offerings through the introduction of new modalities at existing campus locations, giving prospective students more flexibility in how they pursue a degree.

Speaker #2: St. Augustine prepares healthcare practitioners through a combination of on-ground and online offerings, and its selective admissions process generally requiring prospective students to hold an undergraduate degree and complete a comprehensive application and admissions process, has allowed them to maintain strong academic outcomes and student experiences.

Ashish Ghia: St. Augustine prepares healthcare practitioners through a combination of on-ground and online offerings, and a selective admissions process, generally requiring prospective students to hold an undergraduate degree and complete a comprehensive application admissions process, has allowed them to maintain strong academic outcomes and student experiences.

Speaker #2: As of June 30th, total student enrollments increased by 0.7% as compared to the prior year quarter. At CTU, total student enrollments grew 0.6% to 32,110 students, and 11th consecutive quarter of growth, and revenue rose 0.9% to $115.5 million, resulting in year-to-date revenue growth of 2.5%.

Ashish Ghia: As of 30 June, total student enrollments increased by 0.7% as compared to the prior year quarter. At CTU, total student enrollments grew 0.6% to 32,110 students, an 11th consecutive quarter of growth, and revenue rose 0.9% to $115.5 million, resulting in year-to-date revenue growth of 2.5%. On year-over-year enrollment comparability, please note that CTU will continue to lap strong record quarters from last year, while also graduating a record number of students in 2026 relative to 2025. These trends should peak in H2 before normalizing in 2027. As a result, while H2 reported enrollments may trend lower as compared to the prior year, we remain encouraged by sustained trends in student retention, ongoing expansion of the corporate student program, and increasing levels of prospective student interest, trends that we believe will continue to support the long-term enrollment growth at CTU.

Speaker #2: On year-over-year enrollment comparability, please note that CTU will continue to lapse strong record quarters from last year, while also graduating a record number of students in 2026 relative to 2025.

Speaker #2: These trends should peak in the second half of the year before normalizing in 2027. As a result, while second half reported enrollments may trend lower as compared to the prior year, we remain encouraged by sustained strength in student retention, ongoing expansion of the corporate student program, and increasing levels of prospective student interest.

Ashish Ghia: These trends should peak in H2 before normalizing in 2027. As a result, while H2 reported enrollments may trend lower as compared to the prior year, we remain encouraged by sustained trends in student retention, ongoing expansion of the corporate student program, and increasing levels of prospective student interest, trends that we believe will continue to support the long-term enrollment growth at CTU.

Speaker #2: Trends that we believe will continue to support the long-term enrollment growth at CTU. From an operating income perspective, we have continued to reinvest revenue growth into marketing and other student support functions in a disciplined way, and we expect these investments to support long-term growth while further enhancing academic outcomes and student experiences.

Ashish Ghia: From an operating income perspective, we have continued to reinvest revenue growth into marketing and other student support functions in a disciplined way. We expect these investments to support long-term growth while further enhancing academic outcomes and student experiences. Additionally, we have made intentional investments in marketing channels that we believe will strengthen brand awareness and visibility. We also continue to refine our use of AI to more effectively recruit and engage with prospective students. Legal fees at CTU related to previously disclosed legal matters, which are not reflective of underlying organic growth, have trended higher as compared to the prior year. Excluding this year-over-year increase in legal fees, both quarter and year-to-date operating income at CTU would have increased versus the prior year, highlighting our balanced approach toward growth-related investments. Now to AIU System. Total student enrollments at AIU System decreased 1%.

Speaker #2: Additionally, we have made intentional investments in marketing channels that we believe will strengthen brand awareness and visibility, and we also continue to refine our use of AI to more effectively recruit and engage with prospective students.

Ashish Ghia: We also continue to refine our use of AI to more effectively recruit and engage with prospective students. Legal fees at CTU related to previously disclosed legal matters, which are not reflective of underlying organic growth, have trended higher as compared to the prior year.

Speaker #2: Legal fees at CTU related to previously disclosed legal matters, which are not reflective of underlying organic growth, have trended higher as compared to the prior year.

Speaker #2: Excluding this year-over-year increase in legal fees, both quarter and year-to-date operating income at CTU would have increased versus the prior year, highlighting our balanced approach toward growth-related investments.

Ashish Ghia: Excluding this year-over-year increase in legal fees, both quarter and year-to-date operating income at CTU would have increased versus the prior year, highlighting our balanced approach toward growth-related investments. Now to AIU System. Total student enrollments at AIU System decreased 1%.

Speaker #2: Now to the AIU System. Total student enrollments at the AIU System decreased 1%. This decline was expected and is primarily due to lower enrollments at Trident University, a part of the AIU System.

Ashish Ghia: This decline was expected and primarily due to lower enrollments at Trident University, a part of AIU System. Excluding Trident, AIU System total student enrollments would have increased versus the prior year quarter, despite the academic calendar-driven variability that resulted in lower enrollment days in H1. Please note that in addition to underlying trends in student retention engagement, the academic calendar and the number of enrollment days in any given quarter will continue to impact quarterly enrollment comparability at AIUS. With that in mind, we expect AIU System to report strong total student enrollment growth in Q3, then turn lower in Q4 before rebounding in Q1 2027. While the academic session calendar will impact quarterly enrollment comparability, we expect operating income to grow for the full year.

Speaker #2: Excluding Trident, AIU System total student enrollments would have increased versus the prior year quarter, despite the academic calendar-driven variability that resulted in lower enrollment days in the first half of the year.

Speaker #2: Please note that in addition to underlying trends in student retention and engagement, the academic calendar and the number of enrollment days in any given quarter will continue to impact quarterly enrollment comparability.

Speaker #2: At AIUS. With that in mind, we expect AIU System to report strong total student enrollment growth in the third quarter, then turn lower in the fourth quarter, before rebounding in the first quarter of 2027.

Ashish Ghia: With that in mind, we expect AIU System to report strong total student enrollment growth in Q3, then turn lower in Q4 before rebounding in Q1 2027. While the academic session calendar will impact quarterly enrollment comparability, we expect operating income to grow for the full year.

Speaker #2: While the academic session calendar will impact quarterly enrollment comparability, we expect operating income to grow for the full year. And setting aside this calendar-driven variability, our underlying organic growth trends namely student retention, and interest from prospective students remain strong.

Ashish Ghia: Setting aside this calendar-driven variability, our underlying organic growth trends, namely student retention and interest from prospective students, remain strong. AIU System continues to invest in marketing and student support functions and will also launch new AI-focused programs this fall. Q2 revenue at AIU System decreased 1.8% to $57.2 million, while operating income increased 9.7% to $12.6 million. The revenue decrease was primarily from our non-Title IV and professional development offerings that we continue to optimize. Excluding those, revenue for the year-to-date would have increased as compared to the prior year, again, reflecting underlying organic growth at AIU. As Todd noted, the University of St. Augustine for Health Sciences delivered strong performance this quarter. Reported total student enrollments increased 6% to approximately 4,200 students, and revenue rose 10.2% to $40.5 million, supported by strong execution, brand recognition, and new program launches.

Speaker #2: AIU System continues to invest in marketing and student support functions, and will also launch new AI-focused programs this fall. Second quarter revenue at AIU System decreased 1.8% to $57.2 million, while operating income increased 9.7% to $12.6 million.

Speaker #2: The revenue decrease was primarily from our non-Title IV and professional development offerings that we continue to optimize. Excluding those, revenue for the year-to-date would have increased as compared to the prior year, again reflecting underlying organic growth at AIU.

Ashish Ghia: The revenue decrease was primarily from our non-Title IV and professional development offerings that we continue to optimize. Excluding those, revenue for the year-to-date would have increased as compared to the prior year, again, reflecting underlying organic growth at AIU. As Todd noted, the University of St. Augustine for Health Sciences delivered strong performance this quarter.

Speaker #2: As Todd noted, the University of St. Augustine for Health Sciences delivered strong performance this quarter. Reported total student enrollments increased 6% to approximately 4,200 students, and revenue rose 10.2% to $40.5 million, supported by strong execution, brand recognition, and new program launches.

Ashish Ghia: Reported total student enrollments increased 6% to approximately 4,200 students, and revenue rose 10.2% to $40.5 million, supported by strong execution, brand recognition, and new program launches.

Speaker #2: Increase in total student enrollments from the prior year was primarily a result of growth in programs such as nursing and speech-language pathology, as well as the introduction of new modalities for the occupational therapy program.

Ashish Ghia: Increase in total student enrollments from the prior year was primarily a result of growth in programs such as nursing and speech language pathology, as well as the introduction of new modalities for the occupational therapy program. The enrollment pipeline for the upcoming fall term, which is traditionally the biggest term of the year, looks strong. Adjusted operating income increased to $10.7 million as compared to an adjusted operating income of $5.5 million in the prior year quarter. The improvement reflected continued enrollment and revenue growth, combined with operating leverage as the university continued to scale its operations.

Speaker #2: The enrollment pipeline for the upcoming fall term which is traditionally the biggest term of the year looks strong. Adjusted operating income increased to $10.7 million, as compared to an adjusted operating income of $5.5 million in the prior year quarter.

Ashish Ghia: Adjusted operating income increased to $10.7 million as compared to an adjusted operating income of $5.5 million in the prior year quarter. The improvement reflected continued enrollment and revenue growth, combined with operating leverage as the university continued to scale its operations.

Speaker #2: The improvement reflected continued enrollment and revenue growth, combined with operating leverage, as the university continued to scale its operations. With growth in enrollments, supported by ongoing expansion of their program offerings, through the introduction of new modalities, and program versions at current campus locations, as well as consistently high student retention trends, we believe that St.

Ashish Ghia: With growth in enrollments supported by ongoing expansion of their program offerings through the introduction of new modalities and program versions at current campus locations, as well as consistently high student retention trends, we believe that St. Augustine will meaningfully contribute to the overall revenue and adjusted operating income growth for 2026, and is expected to further grow into 2027. Moving on to corporate and other operating losses for the quarter were $5.9 million as compared to $5.2 million in the prior year. Turning to income taxes. For Q2, we recorded a provision for income tax of $12.2 million, resulting in an effective tax rate of 20.3%. The tax effect of stock-based compensation and the release of previously recorded tax reserves reduced the effective tax rate by 0.4% and 1.1%, respectively.

Speaker #2: Augustine will meaningfully contribute to the overall revenue and adjusted operating income growth for 2026, and is expected to further grow into 2027. Moving on to corporate and other operating losses for the quarter were $5.9 million, as compared to $5.2 million in the prior year.

Ashish Ghia: Moving on to corporate and other operating losses for the quarter were $5.9 million as compared to $5.2 million in the prior year. Turning to income taxes. For Q2, we recorded a provision for income tax of $12.2 million, resulting in an effective tax rate of 20.3%. The tax effect of stock-based compensation and the release of previously recorded tax reserves reduced the effective tax rate by 0.4% and 1.1%, respectively.

Speaker #2: Turning to income taxes. For the second quarter, we recorded a provision for income tax of $12.2 million, resulting in an effective tax rate of 20.3%.

Speaker #2: The tax effect of stock-based compensation and the release of previously recorded tax reserves reduced the effective tax rate by 0.4% and 1.1%, respectively. Additionally, the rate was positively impacted by 5.8% due to the resolution of an estate income tax matter.

Ashish Ghia: Additionally, the rate was positively impacted by 5.8% due to the resolution of a state income tax matter. Commensurately, we expect that for the full year 2026, our effective tax rate will be between 23% and 24%. This includes an estimated benefit for the tax effect of stock-based compensation and the release of previously recorded tax reserves for uncertain tax positions. From a cash perspective for 2026, we estimate our cash paid for income taxes to be in the range of 23% to 24% of pre-tax income. Turning now to our balance sheet and liquidity position. For H1, net cash flows provided by operations were $144 million versus $143.9 million in the prior year period. Timing of Title IV drawdowns and working capital mostly offset the increase in cash flows from a year-over-year improvement in adjusted operating income.

Speaker #2: Commensurately, we expect that for the full year between 23% and 24%. This includes an estimated benefit for the tax effect of stock-based compensation and the release of previously recorded tax reserves for uncertain tax positions.

Speaker #2: And from a cash perspective, for 2026, we estimate our cash paid for income taxes to be in the range of 23% to 24% of pre-tax income.

Speaker #2: Turning now to our balance sheet and liquidity position. For the first half, net cash flows provided by operations were $144 million, versus $143.9 million in the prior year period.

Ashish Ghia: Turning now to our balance sheet and liquidity position. For H1, net cash flows provided by operations were $144 million versus $143.9 million in the prior year period. Timing of Title IV drawdowns and working capital mostly offset the increase in cash flows from a year-over-year improvement in adjusted operating income.

Speaker #2: Timing of Title IV drawdowns and working capital mostly offset the increase in cash flows from a year-over-year improvement in adjusted operating income. We ended the quarter with $734.8 million in cash, cash equivalents restricted cash and available for sale short-term investments, with represents an increase of approximately $91.3 million, from our prior year-end position.

Ashish Ghia: We ended the quarter with $334.8 million in cash equivalents, restricted cash, and available-for-sale short-term investments, which represents an increase of approximately $91.3 million from our prior year-end position. Uses of cash during H1 were $19.7 million of dividend and dividend equivalent payments, $10.3 million for share repurchases in connection with the payment of taxes due by employees upon stock vesting, $15 million return of capital to shareholders in the form of stock repurchases, and $3.3 million of capital expenditures. For full year 2026, we expect capital expenditures to be approximately 1% of revenues. Before turning to our 2026 outlook, let me take a minute to discuss our balanced and consistent approach to capital allocation.

Speaker #2: Uses of cash during the first half were $19.7 million of dividend and dividend equivalent payments, $10.3 million for share repurchases in connection with the payment of taxes due by employees upon stock vesting, $15 million return of capital to shareholders in the form of stock repurchases, and $3.3 million of capital expenditures.

Ashish Ghia: Uses of cash during H1 were $19.7 million of dividend and dividend equivalent payments, $10.3 million for share repurchases in connection with the payment of taxes due by employees upon stock vesting, $15 million return of capital to shareholders in the form of stock repurchases, and $3.3 million of capital expenditures. For full year 2026, we expect capital expenditures to be approximately 1% of revenues. Before turning to our 2026 outlook, let me take a minute to discuss our balanced and consistent approach to capital allocation.

Speaker #2: For full year 2026, we expect capital expenditures to be approximately 1% of revenues. Before turning to our 2026 outlook, let me take a minute to discuss our balanced and consistent approach to capital allocation.

Speaker #2: 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 13.3% increase in the quarterly dividend payment to $0.17 per share, payable on September 10, 2026, to holders of record of Perdoceo's common stock at the close of business on September 1, 2026.

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 13.3% increase to our quarterly dividend payment to $0.17 per share, payable on 10 September 2026, to the holders of record of Perdoceo's common stock at the close of business on 1 September 2026. 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 the most recent board decision, we generally expect to review quarterly dividend amounts on an annual basis.

Speaker #2: 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.

Ashish Ghia: 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 the most recent board decision, we generally expect to review quarterly dividend amounts on an annual basis.

Speaker #2: Subject to the requirements just mentioned, we continue to expect that quarterly dividend payments will remain an integral and growing component of our capital allocation strategy.

Speaker #2: And in line with the most recent Board decision, we generally expect to review quarterly dividend amounts on an annual basis. During the quarter, we repurchased 0.2 million shares of our common stock for $6.8 million at an average price of $34.19 per share, bringing our year-to-date purchase to 0.4 million shares for approximately $15 million.

Ashish Ghia: During the quarter, we repurchased 0.2 million shares of our common stock for $6.8 million at an average price of $34.19 per share, bringing our year-to-date purchase to 0.4 million shares for approximately $15 million. We anticipate utilizing the remaining $85 million of our authorized share repurchase program over time, subject to market conditions, organic and inorganic investment opportunities, share valuation, and other factors that guide our disciplined approach to capital allocation. Let us now discuss our outlook for 2026. We now expect the full year 2026 adjusted operating income to range between $258 million and $263 million. This compares to an adjusted operating income of $237.6 million in 2025, with the expected increase primarily due to assumptions for organic revenue growth across our academic institutions, while lower operating expenses in certain categories should offset investments in marketing, academics, and other student support processes.

Speaker #2: We anticipate utilizing the remaining $85 million of our authorized share repurchase program over time, subject to market conditions, organic and inorganic investment opportunities, share valuation, and other factors that guide our disciplined approach to capital allocation.

Speaker #2: Let us now discuss our outlook for 2026. We now expect full-year 2026 adjusted operating income to range between $258 million and $263 million. This compares to adjusted operating income of $237.6 million in 2025, with the expected increase primarily due to assumptions for organic revenue growth across our academic institutions, while lower operating expenses in certain categories should offset investments in marketing, academics, and other student support processes.

Ashish Ghia: Let us now discuss our outlook for 2026. We now expect the full year 2026 adjusted operating income to range between $258 million and $263 million. This compares to an adjusted operating income of $237.6 million in 2025, with the expected increase primarily due to assumptions for organic revenue growth across our academic institutions, while lower operating expenses in certain categories should offset investments in marketing, academics, and other student support processes.

Speaker #2: Our outlook range includes the impact of incremental legal fees, and without these incremental costs, the range would have been even higher. Adjusted earnings for diluted share are expected to be between $3.10 and $3.16, versus $2.61 in 2025, in 19.9% increase at the midpoint.

Ashish Ghia: Our outlook range includes the impact of incremental legal fees. Without these incremental costs, the range would have been even higher. Adjusted earnings per diluted share are expected to be between $3.10 and $3.16, versus $2.61 in 2025, a 19.9% increase at the midpoint. As a reminder, GAAP and adjusted EPS calculations include incremental expenses related to depreciation and finance leases for St. Augustine. While these expenses are excluded for the purpose of adjusted operating income, they are part of the adjusted EPS calculations. This outlook reflects our current beliefs that the consistent high levels of student retention and student engagement that we experienced in 2025 will continue through 2026. Prospective student interest in our academic programs will continue to remain at current levels, in part supported by incremental marketing investments in brand awareness and visibility.

Speaker #2: As a reminder, GAAP and adjusted EPS calculations include incremental expenses related to depreciation and finance leases for St. Augustine. While these expenses are excluded for the purchase of purpose of adjusted operating income, they are part of the adjusted EPS calculations.

Ashish Ghia: While these expenses are excluded for the purpose of adjusted operating income, they are part of the adjusted EPS calculations. This outlook reflects our current beliefs that the consistent high levels of student retention and student engagement that we experienced in 2025 will continue through 2026. Prospective student interest in our academic programs will continue to remain at current levels, in part supported by incremental marketing investments in brand awareness and visibility.

Speaker #2: This outlook reflects our current beliefs that the consistent high levels of student retention and student engagement that we experienced in 2025 will continue through 2026, prospective student interest in our academic programs will continue to remain at current levels, in part supported by incremental marketing investments in brand awareness and visibility.

Speaker #2: Any changes to the regulatory or legislative environment will not have a meaningful impact on prospective student interest or necessitate any operational changes. Legal fees related to litigation matters remain in line with the company's current expectations, and there will not be a material impact on student enrollments due to the elimination of the grad plus loan program, the new annual and lifetime graduate loan limits, or their ability to finance their education through private lending sources.

Ashish Ghia: Any changes to the regulatory or legislative environment will not have a meaningful impact on prospective student interest or necessitate any operational changes. Legal fees related to litigation matters remain in line with the company's current expectations. There will not be a material impact on student enrollments due to the elimination of the Grad PLUS loan program, the new annual and lifetime graduate loan limits, or their ability to finance their education through private lending sources. Full-year revenue is expected to increase versus 2025, supported by the rollout of new program modalities within Physical and Occupational Therapy at St. Augustine and continued organic growth at CTU and AIU. At St. Augustine, we expect revenue and total student enrollments growth each quarter, resulting in double-digit adjusted operating income growth for the full year.

Speaker #2: Full-year revenue is expected to increase versus 2025, supported by the rollout of new program modalities within physical and occupational therapy at St. Augustine, and continued organic growth at CTU and AIU.

Ashish Ghia: Full-year revenue is expected to increase versus 2025, supported by the rollout of new program modalities within Physical and Occupational Therapy at St. Augustine and continued organic growth at CTU and AIU. At St. Augustine, we expect revenue and total student enrollments growth each quarter, resulting in double-digit adjusted operating income growth for the full year.

Speaker #2: At St. Augustine, we expect revenue and total student enrollments to grow each quarter, resulting in double-digit adjusted operating income growth for the full year. At AIU System, while the academic session calendar will impact quarterly enrollment comparability, we expect operating income to grow for the full year, supported by strong student retention and engagement, along with continued investment in marketing and admissions.

Ashish Ghia: At AIU System, while the academic session calendar will impact quarterly enrollment comparability, we expect operating income to grow for the full year, supported by strong student retention and engagement and continued investment in marketing and admissions. Supporting our organic growth expectations at CTU are strong levels of prospective student interest in its academic programs, ongoing growth in corporate student program, and investments in marketing, as well as the corporate student program. Partially offsetting these growth trends will be a record number of students expected to graduate in 2026 at CTU, lapsing strong enrollment growth from previous quarters, and the increased legal fees related to previously discussed legal matters.

Speaker #2: Supporting our organic growth expectations at CTU are our strong levels of prospective student interest in its academic programs, ongoing growth in the corporate student program, and investments in marketing, as well as the corporate student program.

Ashish Ghia: Supporting our organic growth expectations at CTU are strong levels of prospective student interest in its academic programs, ongoing growth in corporate student program, and investments in marketing, as well as the corporate student program. Partially offsetting these growth trends will be a record number of students expected to graduate in 2026 at CTU, lapsing strong enrollment growth from previous quarters, and the increased legal fees related to previously discussed legal matters.

Speaker #2: Partially offsetting these growth trends will be a record number of students expected to graduate in 2026 at CTU, lapsing strong enrollment growth from previous quarters, and the increased legal fees related to previously discussed legal matters.

Speaker #2: For the third quarter of 2026, we expect adjusted operating income to be in the range of $64 million to $65 million, as compared to $61 million in the prior year quarter, with adjusted earnings per diluted share to range between $0.73 and $0.74 per diluted share, versus $0.65 in the third quarter of 2025.

Ashish Ghia: For Q3 2026, we expect adjusted operating income to be in the range of $64 million to $65 million, as compared to $61 million in the prior year quarter, with adjusted earnings per diluted share to range between $0.73 and $0.74 per diluted share versus $0.65 in Q3 2025. Our 2026 outlook also assumes continued investments in technology, data analytics, real estate, academics, and student support processes. We believe these investments have supported improved academic outcomes and enhanced student experiences. In addition, we plan to continue expanding the corporate student program teams at CTU and AIU System to support further growth and engagement. Please refer to our earnings release filed today for important information about key assumptions and factors underlying this discussion from today's call, as well as the GAAP to non-GAAP reconciliations.

Speaker #2: Our 2026 outlook also assumes continued investments in technology, data analytics, real estate, academics, and student support processes. We believe these investments have supported improved academic outcomes and enhanced student experiences.

Speaker #2: In addition, we plan to continue expanding the corporate student program teams at CTU and AIU System to support further growth and engagement. Please refer to our earnings release file today for important information about key assumptions and factors underlying this discussion from today's call, as well as the GAAP to non-GAAP reconciliations.

Ashish Ghia: In addition, we plan to continue expanding the corporate student program teams at CTU and AIU System to support further growth and engagement. Please refer to our earnings release filed today for important information about key assumptions and factors underlying this discussion from today's call, as well as the GAAP to non-GAAP reconciliations. With that, I'll turn the call over to Todd for his closing remarks. Todd?

Speaker #2: With that, I'll turn the call over to Todd for his closing remarks. Todd.

Ashish Ghia: With that, I'll turn the call over to Todd for his closing remarks. Todd?

Speaker #1: Thank you, Ashish. As I reflect on the second quarter, what stands out is the resilience of our portfolio model of academic institution programs. Perdosio continued to experience overall growth, and we built on an already strong balance sheet, as well as continued to leverage our strong cash position to support various academic and student processes, while evaluating growth opportunities through acquisitions.

Todd Nelson: Thank you, Ashish. As I reflect on Q2, what stands out is the resilience of our portfolio model of academic institution programs. Perdoceo continued to experience overall growth, we built on an already strong balance sheet, as well as continued to leverage our strong cash position to support various academic and student processes while evaluating growth opportunities through acquisitions. I want to close by thanking our faculty and staff, whose dedication to our students is the reason we can deliver results like these. Thank you for your continued interest in Perdoceo, we look forward to updating you again next quarter.

Speaker #1: I want to close by thanking our faculty and staff whose dedication to our students is the reason we can deliver results like these. Thank you for your continued interest in Perdosio, and we look forward to updating you again next quarter.

Todd Nelson: I want to close by thanking our faculty and staff, whose dedication to our students is the reason we can deliver results like these. Thank you for your continued interest in Perdoceo, we look forward to updating you again next quarter.

Operator: The meeting has now concluded. Thank you all for joining, you may now disconnect.

Q2 2026 Perdoceo Education Corp Earnings Call

Request DemoDemo

Perdoceo Education

Earnings