Adtalem Global Education (ATGE) Q2 2025 Earnings Report

Financial and operating metrics highlights (QQ2 2025):
- Revenue: $447.73 million; YoY +13.86%; QoQ +7.27% (fourQuarters data supports sustaining mid-teens growth trajectory).
- Gross Profit: $273.287 million; gross margin 61.04% (GM rose ~23.56% YoY; QoQ +18.10%).
- Operating Income: $103.87 million; operating margin ~23.20% (ratio 0.23199). Adjusted operating income: $101.40 million; YoY +34.2%.
- EBITDA: Adjusted EBITDA $125.0 million; margin 27.9% (up 440 bps YoY).
- Net Income: $75.856 million; net margin ~16.94%; YoY net income +90.16%; QoQ +64.31%.
- Earnings per Share (diluted): $1.98; GAAP EPS $2.03; Weighted avg shares (diluted) ~38.4 million.
- Free Cash Flow ( trailing 12 months): $232 million; FCF for the quarter: -$29.699 million; Operating cash flow: -$19.019 million; Capex: $10.68 million; Free cash flow per share negative due to seasonality and investment cadence.
- Balance sheet and liquidity: Cash and cash equivalents $193.958 million; total debt $864.608 million; net debt $670.65 million; adjusted EBITDA net leverage 1.1x; cash balance of $194 million; letters of credit outstanding at $179 million (10% of Title IV funding).
- Enrollments by segment: Chamberlain up 11.5% YoY; Walden up 13.2% YoY; Medical & Veterinary enrollment flat quarter-over-quarter; January enrollment demand cited as positive by management.
- Segment performance:
• Chamberlain: Revenue $181.0 million (+17.9% YoY); Adjusted EBITDA $52.6 million (+42.5% YoY); Adjusted EBITDA margin 29.1% (up ~510 bps).
• Walden: Revenue $171.3 million (+16.7% YoY); Adjusted EBITDA $52.1 million (+50.2%); Adjusted EBITDA margin 30.4% (up ~680 bps).
• Medical & Veterinary: Revenue $95.4 million (+2.8% YoY); Adjusted EBITDA $26.7 million (+1.3%); Margin 28% (down ~40 bps).
- Guidance and outlook: Revenue guidance raised to $1.73–$1.76 billion; Adjusted EPS guidance $6.10–$6.30; anticipated >100 bps of annual adjusted EBITDA margin expansion in FY2025; adjusted effective tax rate guided to ~23%.
- Key strategic shifts: AI integration in healthcare education; digital transformation led by Michael Betz (Chief Digital Officer); marketing efficiency improvements; continued investment in capacity and student outcomes; ongoing share repurchases (471k shares in Q2).