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Adtalem Global Education Inc. (ATGE)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 delivered solid top-line growth and clean beats vs consensus: revenue $457.1M (+11.5% YoY) and adjusted EPS $1.66; revenue beat by $16.2M (+3.7% vs consensus) and EPS beat by ~$0.13, with enrollment +10.2% YoY to 91,780 . Consensus figures marked with * are from S&P Global.
  • Full-year strength set up FY2026: FY2026 guidance introduced at revenue $1.90–$1.94B and adjusted EPS $7.60–$7.90, implying ~6.0%–8.5% and ~14.0%–18.5% growth, respectively, supported by healthy net leverage of 0.8x and robust FCF generation ($283.4M LTM) .
  • Segment performance remained broad-based: Walden led growth (Q4 revenue +16.6% YoY; total students +15.0%), Chamberlain grew revenue +10.3% YoY with continued enrollment gains (+5.8%), and Medical & Veterinary revenue +4.7% with modest enrollment growth (+1.0%) .
  • Management highlighted durable demand, AI-enabled student success, and employer partnerships (e.g., SSM Health), while addressing regulatory changes via a Sallie Mae LOI; commentary emphasized confidence in sustaining growth trajectory into FY2026 .

What Went Well and What Went Wrong

What Went Well

  • Broad-based growth and enrollment momentum: Q4 revenue +11.5% YoY; total student enrollment +10.2% YoY; Walden +16.6% revenue and +15.0% students; Chamberlain +10.3% revenue and +5.8% students .
  • Clear FY2026 outlook with growth and leverage to invest: Guide of $1.90–$1.94B revenue and $7.60–$7.90 adjusted EPS; net leverage 0.8x at FY-end supports investment and buybacks .
  • Strategic narrative on tech and partnerships: “We’re deploying student-facing technologies and AI-powered learning tools… improving student persistence” (Steve Beard, CEO) ; SSM Health partnership and program expansions underpin capacity and outcomes .

What Went Wrong

  • Margin compression sequentially in Q4: Adjusted EBITDA margin fell to 24.1% from 27.4% in Q3 as the company “strategically increase[d] growth investments” at Chamberlain in the quarter .
  • Chamberlain profitability softer YoY in Q4: Chamberlain adjusted EBITDA declined 4.8% YoY as investments weighed on margin (24.4% vs 28.3% prior year) despite revenue growth .
  • Med/Vet annual profitability lower: FY25 Med/Vet adjusted operating income declined 3.2% YoY amid capacity constraints at Ross Vet, though Q4 improved YoY; management cites near-capacity dynamics and gradual initiatives at medical schools .

Financial Results

Headline P&L vs prior quarters and estimates (Q2 → Q3 → Q4 FY2025)

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Revenue ($M)447.7 466.1 457.1
Diluted EPS (GAAP)1.98 1.59 1.44
Adjusted EPS ($)1.81 1.92 1.66
Adjusted EBITDA Margin (%)27.9% 27.4% 24.1%

Q4 FY2025 actuals vs S&P Global consensus

MetricConsensus*ActualDelta
Revenue ($M)440.93*457.11 +16.18 (+3.7%)*
EPS (Normalized/Adjusted) ($)1.53*1.66 +0.13*

Values marked with * retrieved from S&P Global.

Segment breakdown – Q4 FY2025

SegmentRevenue ($M)Adj. EBITDA ($M)Total Students
Chamberlain184.3 45.0 38,891
Walden182.2 52.7 48,116
Medical & Veterinary90.6 20.0 4,773
Total457.1 110.2 91,780

KPIs and Balance Sheet/CF (FY-end unless noted)

KPIValue
Total Student Enrollment (Q4)91,780 (+10.2% YoY)
Adjusted EBITDA (Q4)$110.2M; margin 24.1%
Free Cash Flow (LTM)$283.4M
Cash & Equivalents (6/30/25)$199.6M
Long-term Debt (6/30/25)$552.7M
Net Leverage (LTM)0.8x
Diluted Shares (Q4)37.584M
FY25 Adjusted EPS$6.67 (+33.1% YoY)

Non-GAAP adjustments – Q4 EPS bridge (per share)

  • Strategic advisory costs +$0.18; amortization of acquired intangibles +$0.07; restructuring +$0.01; other items +$0.01; tax impact −$0.07; discontinued ops +$0.01 → Adjusted EPS $1.66 vs GAAP $1.44 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY2025$1.76–$1.775B (as of Q3) Actual $1.7883B Beat prior guide
Adjusted EPSFY2025$6.40–$6.60 (as of Q3) Actual $6.67 Beat prior guide
RevenueFY2026—$1.90–$1.94B Initiated
Adjusted EPSFY2026—$7.60–$7.90 Initiated

Notes: No FY2026 guidance provided for margins, OpEx, OI&E, or tax rate in the Q4 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 FY2025)Current Period (Q4 FY2025)Trend
AI/technology for student successScaling “tech-enabled” programs; brand and performance marketing progress “AI-powered learning tools” and student-facing technologies improving persistence Improving
Regulatory/loansNo material changes highlighted; steady operating progress Addressed “One Big Beautiful Bill Act”; LOI with Sallie Mae to design alternative financing; confident on access Constructively managed
Employer partnerships/capacityBrand campaigns, enrollment growth; share repurchase authorization SSM Health “Aspiring Nurse Program”; scalable health system pathway model Expanding
Enrollment/persistenceSix–seven straight quarters of growth; residency outcomes strong 10th straight (Chamberlain), 8th straight (Walden); total enrollment +10.2% YoY Sustained strength
Capital allocation & balance sheetNew $150M buyback; net leverage 0.8x (Q3) FY25: $211M buybacks completed; net leverage 0.8x Ongoing discipline
Med/Vet executionEnrollment modest; select margin pressure in Q3 Q4 revenue +4.7% YoY; EBITDA +21.7% YoY; Vet near capacity Stabilizing

Management Commentary

  • “We’re deploying student-facing technologies and AI-powered learning tools… improving student persistence across the board.” — Steve Beard, CEO .
  • “As a leader in healthcare education, we have the ability to provide solutions to ensure students continue to have access… [via] letter of intent with Sallie Mae… alternative financing designed specifically for our student population.” — Steve Beard .
  • “Adjusted EBITDA margin was 24.1% for the quarter… a 30 bps increase from last year. Adjusted operating income… partially offset by investments in our strategic growth initiatives.” — Bob Phelan, CFO .
  • “We expect revenue of $1.9–$1.94 billion and adjusted EPS of $7.60 to $7.90 [for FY2026].” — Steve Beard .
  • “Our balance sheet remains healthy… $200 million in cash and… net leverage of 0.8x.” — Bob Phelan .

Q&A Highlights

  • Share gains drivers: flexibility (campus/online/hybrid BSN), student success differentiation, and employer partnerships driving conversion and enrollment .
  • Regulatory/financing: No demand dampening expected from Grad PLUS elimination/loan caps; Sallie Mae LOI and grandfathering provisions should ensure continuity of access .
  • Multiyear growth vectors: Strong secular demand across nursing, medicine, veterinary, social/behavioral; exploring allied health and further provider partnerships; ample runway within current portfolio .
  • Investment pacing/seasonality: Continued investments across marketing, enrollment, retention, pricing optimization; typical Q1 lower margin seasonality; Walden week-shift boosts Q2, modestly weighs Q3 .
  • Marketing efficacy: Brand evolution, program/local segmentation (esp. Chamberlain), and SSM partnership awareness improving funnel conversion .

Estimates Context

  • Q4 FY2025 beat on revenue and EPS: $457.1M vs $440.9M* (+3.7%); $1.66 vs $1.53* (+$0.13). Top-line outperformance driven by Walden and Chamberlain enrollment growth; sequential margin pressure tied to deliberate growth investments, notably at Chamberlain .
  • Given FY2026 guidance ahead of FY2025 run-rate, sell-side models may raise revenue and adjusted EPS; the company also signaled ~100 bps adjusted EBITDA margin expansion for FY2026, supporting upward estimate revisions on operating leverage (from call commentary) .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Quality beat and confident FY2026 guide: Revenue/EPS beats and guidance suggest sustained demand and operating leverage into next year .
  • Walden strength is durable; Chamberlain investing for growth: Walden outperformed on growth and margin expansion; Chamberlain’s near-term margin compression reflects purposeful spend to drive future growth .
  • Regulatory risk mitigated near term: Management expects continued access via Sallie Mae LOI and grandfathering, limiting enrollment disruption risk .
  • Capital deployment capacity intact: Net leverage at 0.8x and strong FCF underpin ongoing reinvestment and buybacks; FY25 buybacks totaled $211M .
  • Segment balance: Med/Vet showing incremental improvement with Vet near capacity and med schools progressing; watch for capacity additions and partnerships to unlock growth .
  • Trading catalyst: FY2026 revenue/EPS initiation ($1.90–$1.94B; $7.60–$7.90) and AI/partnership narrative likely to frame sentiment into the next few quarters .
  • Monitor margin trajectory: Management indicated ~100 bps adjusted EBITDA margin expansion in FY2026; quarterly cadence affected by seasonality and Walden academic week shift .

Appendix: Additional Context and Prior Quarters

  • Q3 FY2025: Revenue $466.1M (+12.9% YoY), adjusted EPS $1.92, adjusted EBITDA margin 27.4%; guidance raised for FY2025 .
  • Q2 FY2025: Revenue $447.7M (+13.9% YoY), adjusted EPS $1.81, adjusted EBITDA margin 27.9%; guidance raised for FY2025 .
  • FY2025 actuals: Revenue $1.7883B (+12.9% YoY), adjusted EPS $6.67 (+33.1% YoY), adjusted EBITDA $459.7M (25.7% margin) .
  • Liquidity/credit: On Aug 6, 2025, ATGE amended its credit agreement, increasing the revolver commitment to $500M and extending maturity to Aug 6, 2030 with reduced pricing grid .

S&P Global disclaimer: All consensus estimate figures marked with * are values retrieved from S&P Global.