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LAUREATE EDUCATION, INC. (LAUR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered revenue of $423.4M (+3% YoY) and Adjusted EBITDA of $141.1M (+7% YoY), with diluted EPS of $0.62; on organic constant currency, revenue grew 10% and Adjusted EBITDA 14% as enrollment and price/mix improved .
  • Versus prior quarter, revenue rose from $368.6M to $423.4M and Adjusted EBITDA from $91.4M to $141.1M, with margin expansion to 33.3% in Q4 (from 24.8% in Q3) .
  • Q4 revenue beat the company’s guidance range of $408–$413M, while Adjusted EBITDA came in near the high end of $138–$142M; FY24 finished at $1.5666B revenue and $450.1M Adjusted EBITDA, in line with updated guidance .
  • 2025 outlook assumes FX translation headwinds from a weaker MXN yet still targets Adjusted EBITDA growth to $467–$477M (+4–6% as-reported; +11–13% constant currency), ~150 bps margin expansion, and ~50% Adjusted EBITDA-to-unlevered FCF conversion, with Q1 seasonality and academic calendar shifts depressing Q1 results (Rev $221–$226M, Adj. EBITDA -$7 to -$4) .

What Went Well and What Went Wrong

What Went Well

  • Strong YoY performance: Q4 revenue +3% reported (+10% organic CC) and Adjusted EBITDA +7% reported (+14% organic CC) with margin expansion to 33.3% .
  • Mexico strength: Q4 Mexico revenue +15% organic CC and Adjusted EBITDA +29% organic CC; management highlighted productivity gains and momentum to exceed the 25% margin target in Mexico over time .
  • Strategic execution and capital returns: FY24 Adjusted EBITDA margin reached a historic high (28.7%); $102M of share repurchases in 2024 with $98M authorization remaining; balance sheet essentially net-debt free at year-end ($11M) .
  • Management quote: “We delivered strong performance in 2024, with continued revenue growth and margin expansion… we still expect to deliver U.S. dollar-reported growth in both Adjusted EBITDA and unlevered free cash flow in 2025” .

What Went Wrong

  • FX headwinds: The weakening MXN created a translation drag on as-reported results in H2 2024 and will likely pressure 2025 as-reported revenue despite constant currency growth .
  • Peru margin pressure: Q4 Peru Adjusted EBITDA declined 9% YoY (11% on timing-adjusted organic CC) due to higher bad debt and discounting after earlier macro softness, though revenue grew 5% YoY .
  • Seasonality and calendar timing: Q1 is seasonally weak and 2025 calendar shifts will move ~$27M revenue from Q1 to Q4, depressing Q1 profitability (Adj. EBITDA guided negative) .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

MetricQ4 2023Q3 2024Q4 2024
Revenues ($USD Millions)$409.4 $368.6 $423.4
Diluted EPS ($USD)$0.26 $0.56 $0.62
Adjusted EBITDA ($USD Millions)$131.3 $91.4 $141.1
Adjusted EBITDA Margin (%)32.1% 24.8%33.3%
Income from Continuing Ops Margin (%)11.7% 23.1%22.0%

Notes:

  • Organic constant currency Q4 growth: Revenues +10% and Adjusted EBITDA +14% .
  • Q4 diluted EPS of $0.62; FY24 diluted EPS $1.92, Adjusted EPS $1.35 (new metric) .

Segment Breakdown (Q4 YoY)

Segment MetricQ4 2023Q4 2024Reported YoYOrganic CC YoY
Mexico Revenues ($USD Millions)$223.1 $226.1 +1% +15%
Mexico Adjusted EBITDA ($USD Millions)$67.9 $78.4 +15% +29%
Peru Revenues ($USD Millions)$186.3 $197.2 +6% +5%
Peru Adjusted EBITDA ($USD Millions)$79.8 $74.0 -7% -9%

KPIs

KPIQ4 ContextFY 2024
New Enrollments (000s)11 (seasonally small intake) 252.4 (+5% YoY)
Total Enrollments (000s)472 (+5% YoY) 472 (+5% YoY)
Mexico Total Enrollments (000s)259 (+7% YoY) 258.5 (+7% YoY)
Peru Total Enrollments (000s)214 (+3% YoY) 213.5 (+3% YoY)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance / ActualChange
Revenues ($USD Billions)FY 2024$1.566–$1.581 (Q1’24) $1.551–$1.556 (Q3’24) Lowered as-reported due to MXN headwinds
Revenues ($USD Billions)FY 2024—Actual: $1.5666 Finished above updated range midpoint
Adjusted EBITDA ($USD Millions)FY 2024$446–$456 (Q1’24) $447–$451 (Q3’24) Narrowed; slightly higher midpoint
Adjusted EBITDA ($USD Millions)FY 2024—Actual: $450.1 In-line with Q3 updated range
Revenues ($USD Millions)Q4 2024$408–$413 (Q3’24) Actual: $423.4 Beat guidance (above range)
Adjusted EBITDA ($USD Millions)Q4 2024$138–$142 (Q3’24) Actual: $141.1 Near high end
Total Enrollments (000s)FY 2025—489–495 (+4–5%) New FY 2025 outlook
Revenues ($USD Billions)FY 2025—$1.545–$1.570 (flat to -1% reported; +6–7% organic CC; +7–8% excl. consolidation) New FY 2025 outlook; FX translation headwind
Adjusted EBITDA ($USD Millions)FY 2025—$467–$477 (+4–6% reported; +11–13% organic CC) Margin accretion ~150 bps
Revenues ($USD Millions)Q1 2025—$221–$226 Seasonality + academic calendar timing
Adjusted EBITDA ($USD Millions)Q1 2025—-$7 to -$4 Seasonally weak quarter

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
FX/MXN headwindsRaised FY24 guidance on favorable FX; warned FX sensitivity MXN weakened; narrowed FY24 as-reported ranges; improved constant currency outlook Expect significant 2025 FX translation headwinds, but Adj. EBITDA and FCF growth still expected Deteriorating FX; stronger local ops offset
Academic calendar timingQ1 impacted revenue/EBITDA; timing noted Deferral of costs from Q3 to Q4; timing impacts noted 2025 calendar shift: ~$27M revenue from Q1 to Q4; Q1 guided negative EBITDA Structural timing shift in 2025
Peru macroSofter macro; discounts & scholarships; recovery expected in H2 Recovery driving new enrollments +12% (to +16% post-cycle); Q3 strength Continued stabilization; Q4 revenue +5% YoY; margin pressure from bad debt Improving macro; near-term margin drag
Mexico macro/policyFavorable backdrop (nearshoring, stimulus) Post-election softness; judicial reforms; policy watch Tariff threats and trade complications monitored; guidance based on ~1% GDP Cautious stance; demand resilient
Capital returns$33M buybacks in Q1; $100M program Completed $100M program; new $100M authorization $102M repurchases in FY24; $98M authorization remaining Continuing returns; strong balance sheet
Digital/health sciences expansion——Opened 6 medical schools, 2 dental, 1 veterinary; expanding digital education Accelerating program expansion

Management Commentary

  • CEO framing: “We delivered strong performance in 2024, with continued revenue growth and margin expansion… we still expect to deliver U.S. dollar-reported growth in both Adjusted EBITDA and unlevered free cash flow in 2025… Returning excess capital to shareholders this year will remain a priority” .
  • CFO on new metrics: “We are also introducing new non-GAAP metrics for adjusted net income and adjusted earnings per share… For 2024, Adjusted net income was $209M and Adjusted EPS was $1.35” .
  • CFO on Mexico consolidation and 2025 guidance mechanics: Campus consolidations imply ~$13M revenue impact in 2025, with margin optimization and operating leverage driving ~150 bps margin expansion at midpoint .
  • CEO on macro and FX: “We anticipate significant foreign currency translation headwinds in our 2025 reported financial results… we still expect to deliver U.S. dollar-reported growth in both adjusted EBITDA and unlevered free cash flow” .

Q&A Highlights

  • Mexico macro/tariffs: Management views tariff noise as indirect; noted softer H2 GDP from slower FDI/CapEx, yet demand holds due to strong value proposition . Guidance assumes ~1% GDP growth in 2025 with volatility; more bullish beyond 2025 .
  • Capital allocation policy: Target ~50% unlevered FCF conversion after ~5% of revenue CapEx to support growth; intent to return excess cash to shareholders .
  • Tax rate: Reported effective tax 29%; adjusting for noncash FX and discrete tax item ($38M) implies ~40% run-rate ETR going forward .

Estimates Context

  • Attempted to fetch Wall Street consensus estimates (EPS, revenue, EBITDA, target price) for Q4 2024 via S&P Global but the request limit was exceeded, so consensus figures were unavailable at time of analysis. As a result, beat/miss vs Street cannot be assessed in this report. We will update when S&P Global data access is restored [functions.GetEstimates error].
  • Company guidance comparisons and actuals are used to assess performance directionality (e.g., Q4 revenue beat vs internal guidance; Adjusted EBITDA at high end) .

Financial Tables – Additional FY Context

MetricFY 2023FY 2024
Revenues ($USD Billions)$1.4843 $1.5666
Adjusted EBITDA ($USD Millions)$418.6 $450.1
Adjusted EBITDA Margin (%)28.2% 28.7%
Diluted EPS ($USD)$0.68 $1.92
Adjusted EPS ($USD)—$1.35

Guidance Details – Upcoming Quarter and Year

MetricPeriodOutlook
Revenues ($USD Millions)Q1 2025$221–$226
Adjusted EBITDA ($USD Millions)Q1 2025-$7 to -$4
Total Enrollments (000s)FY 2025489–495 (+4–5% YoY)
Revenues ($USD Billions)FY 2025$1.545–$1.570 (flat to -1% reported; +6–7% organic CC; +7–8% excl. campus consolidation)
Adjusted EBITDA ($USD Millions)FY 2025$467–$477 (+4–6% reported; +11–13% organic CC)
Margin CommentaryFY 2025~150 bps Adjusted EBITDA margin accretion at midpoint; FX translation headwind

Key Takeaways for Investors

  • Q4 beat on revenue vs guidance and landed at the high end for Adjusted EBITDA; FY24 closed strong with historic-high EBITDA margin, underpinning confidence in margin trajectory despite FX drag in 2025 .
  • Expect near-term volatility: Q1 2025 will be seasonally and timing-depressed; calendar shifts move ~$27M revenue to Q4; traders should anticipate a weak Q1 print followed by recovery later in the year .
  • FX is the swing factor: Weaker MXN likely caps USD-reported revenue in 2025, but underlying local growth (6–7% organic CC) and margin initiatives support EBITDA and FCF growth; watch MXN and campus consolidation execution .
  • Mexico execution is the margin lever: Continued productivity gains and margin optimization suggest further accretion; Peru’s recovery should sustain top-line, with bad debt normalization key for margin stabilization .
  • Capital returns remain a catalyst: Strong balance sheet (net debt ~$11M) and ~$98M remaining buyback authorization support shareholder returns; monitor buyback pace and potential incremental authorizations .
  • Non-GAAP clarity: New Adjusted EPS/Adjusted net income metrics aid comparability; investors should track both GAAP EPS ($1.92 FY24) and Adjusted EPS ($1.35 FY24) given FX/discrete tax effects .
  • Without Street consensus, focus on internal guidance vs actuals; once S&P Global access resumes, reassess beats/misses and estimate revisions trajectory to refine positioning [functions.GetEstimates error].

Sources: Q4 2024 8-K and Exhibit 99.1 press release ; Q4 2024 earnings call transcript ; Q3/Q1 2024 filings and presentations for trend analysis .