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PE

PERDOCEO EDUCATION Corp (PRDO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid top-line and earnings growth: revenue rose 24.8% to $211.9M and GAAP diluted EPS was $0.60; adjusted EPS was $0.65, up from $0.59 YoY, on strength in CTU enrollments and USAHS contribution .
  • The quarter was a beat vs Wall Street consensus: revenue beat by ~$4.9M ($211.9M vs $207.0M*) and EPS beat by $0.04 ($0.65 vs $0.61*), with one estimate on both metrics*.
  • Management nudged FY 2025 guidance higher and introduced Q4 guidance: FY adjusted operating income to $234–$236M (from $230–$236M) and FY adjusted EPS to $2.54–$2.56 (from $2.48–$2.55); Q4 adjusted EPS guided to $0.53–$0.55 .
  • Catalysts: USAHS integration and program modality expansion, CTU corporate program momentum, continued AI-enabled marketing/admissions, and disciplined capital returns (0.7M shares repurchased; $0.15 dividend declared) .

What Went Well and What Went Wrong

What Went Well

  • Strong enrollment and revenue growth: total student enrollments +15.1% YoY to 46,520; revenue +24.8% YoY to $211.9M, supported by CTU growth and USAHS acquisition .
  • Non-GAAP operating performance improved: adjusted operating income +27.4% YoY to $61.0M; adjusted EPS up to $0.65 from $0.59, aided by USAHS and CTU momentum .
  • Strategic tech/AI in admissions: “integrating artificial intelligence to help identify and engage prospective students” (Todd Nelson), reinforcing demand-gen efficiency .

What Went Wrong

  • Operating margin compression YoY: total operating margin fell to 24.1% from 26.4% on higher G&A and D&A tied to USAHS .
  • AIUS enrollments were down 2.9% YoY this quarter due to enrollment day comparability, though management expects double-digit growth in Q4 .
  • Quarterly cash from operations declined YoY to $41.2M (from $51.0M) on working capital timing; capex stepped up with USAHS and tech investments .

Financial Results

Consolidated Performance vs Prior Year and Prior Quarter

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$169.8 $209.6 $211.9
Operating Income ($USD Millions)$44.8 $51.4 $51.0
Operating Margin %26.4% 24.5% 24.1%
Net Income ($USD Millions)$38.3 $41.0 $39.9
Diluted EPS ($USD)$0.57 $0.62 $0.60
Adjusted EPS ($USD)$0.59 $0.67 $0.65
Adjusted Operating Income ($USD Millions)$47.8 $61.5 $61.0
Cash from Operations ($USD Millions, quarter)$51.0 $78.8 $41.2

Segment Revenue

Segment Revenue ($USD Thousands)Q3 2024Q2 2025Q3 2025
CTU$112,275 $117,970 $117,069
AIUS$57,354 $54,723 $56,667
USAHS-$36,697 $37,971
Total$169,828 $209,581 $211,872

Segment Operating Income

Segment Operating Income ($USD Thousands)Q3 2024Q2 2025Q3 2025
CTU$44,742 $46,262 $47,762
AIUS$8,520 $12,080 $9,257
USAHS-$(1,694) $66
Corporate & Other$(8,468) $(5,249) $(6,126)
Total$44,794 $51,399 $50,959

KPIs – Student Enrollments

KPI (as-of date)Mar 31, 2025Jun 30, 2025Sep 30, 2025
CTU33,400 31,900 32,000
AIUS10,600 10,600 10,100
USAHS4,200 4,000 4,420
Total48,200 46,500 46,520

Actual vs Consensus (S&P Global)

MetricQ3 2025 ConsensusQ3 2025 ActualSurprise# of Estimates
Revenue ($USD Millions)$207.0*$211.9 +$4.91*
Primary EPS ($USD)$0.61*$0.65*+$0.041*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Operating Income ($M)FY 2025$230.0–$236.0 $234.0–$236.0 Raised (low end)
Adjusted EPS ($)FY 2025$2.48–$2.55 $2.54–$2.56 Raised (both ends; narrowed)
Operating Income ($M)FY 2025$187.8–$193.8 $192.2–$194.2 Raised
Depreciation & Amortization ($M)FY 2025$42.2 $41.8 Lowered
GAAP EPS ($)FY 2025$2.29–$2.36 $2.35–$2.37 Raised (low end)
Adjusted Operating Income ($M)Q4 2025N/A$47.9–$49.9 New
Adjusted EPS ($)Q4 2025N/A$0.53–$0.55 New
Dividend per Share ($)Q4 2025$0.15 (declared 7/31) $0.15 (declared 10/31; payable 12/12) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/technology in admissions/marketingContinued investment in student resources/technology (Q1) ; “invest[ing] in academic, student support and learning technologies” (Q2) “Integrating artificial intelligence to help identify and engage prospective students” Strengthening
Corporate student programsRobust participation at CTU/AIUS (Q1) “Total enrollments from corporate student programs… continue to increase; remain a priority” Improving
USAHS program/modalitiesUSAHS executing vs long-term goals (Q2) New modalities for DPT; nursing and speech-language growth; ~4,400 fall students Expanding
Regulatory/macro assumptionsOutlined in outlook assumptions (Q1/Q2) Similar assumptions reiterated in outlook Stable
Tax rate/cash taxesFY ETR ~26–26.5% (Q1) ; bonus depreciation benefits (Q2) impliedYTD ETR ~26.2%; FY 26–26.5%; bonus depreciation reduces cash taxes; USAHS attributes lower cash taxes Favorable
Capital returnsBuybacks and dividend increased to $0.15 (Q2) 0.7M shares repurchased; $0.15 dividend declared; ~$54.3M buyback authorization remaining Ongoing

Management Commentary

  • “Operating performance across our academic institutions was ahead of our expectations… sustained levels of high student retention and engagement” (Todd Nelson) .
  • “We are integrating artificial intelligence to help identify and engage prospective students who we believe are more likely to succeed” (Todd Nelson) .
  • “Revenue was favorably impacted by $38 million attributed to St. Augustine and total enrollment growth at CTU” (Ashish Ghia) .
  • “We expect adjusted operating income at St. Augustine to grow in 2026 as compared to 2025” (Todd Nelson) .
  • “Board… declared a quarterly dividend payment of $0.15 per share… we view quarterly dividend payments as an integral and growing part of our balanced capital allocation strategy” (Ashish Ghia) .

Q&A Highlights

  • No formal Q&A section was included in the provided transcripts; prepared remarks covered guidance, tax rate, capital returns, and segment trends .
  • Clarifications embedded in remarks: FY adjusted EPS includes ~$0.24/diluted share of incremental St. Augustine depreciation/lease expenses; FY ETR ~26–26.5% with cash tax benefits from bonus depreciation and USAHS attributes .
  • Outlook drivers: retention/engagement levels near multi-year highs; prospective interest sustained; AIUS expected to show double-digit enrollment growth in Q4 given calendar/session effects .

Estimates Context

  • Q3 2025 beat: revenue $211.9M vs $207.0M* consensus; Primary EPS $0.65 vs $0.61* consensus, with one estimate on both metrics*. Management raised FY adjusted OI and adjusted EPS ranges, implying estimate revisions likely to move higher for FY and Q4. Values retrieved from S&P Global.* .
  • Note on definitions: Company-reported GAAP diluted EPS was $0.60 and adjusted EPS was $0.65; S&P Global “Primary EPS” actual registered $0.65*, which aligns with adjusted or normalized presentation in SPGI datasets .

Key Takeaways for Investors

  • Quality beat and guidance raise: positive estimate revision setup for FY and Q4 driven by USAHS and CTU momentum .
  • Enrollment engine remains strong: CTU +6.7% and USAHS fall intake healthy; AIUS variability is calendar-related with expected Q4 growth .
  • Margin optics: GAAP operating margin compressed YoY on higher D&A and G&A (USAHS), but adjusted operating metrics expanded; monitor mix and amortization trajectory .
  • Cash generation intact: YTD CFO $185.1M; quarterly CFO softer on timing; capex modest (~1.5% of revenue) .
  • Capital returns consistent: $20.6M buybacks in Q3, $0.15 dividend declared; ~$54.3M authorization remaining supports TSR .
  • Regulatory/tax backdrop favorable per outlook assumptions; bonus depreciation and acquired tax attributes reduce cash taxes .
  • 2026 setup: USAHS adjusted OI expected to grow; continued AI-enabled marketing/admissions and corporate program expansion should underpin enrollments .

Additional source documents read:

  • Q3 2025 earnings press release (Nov 4, 2025)
  • Q3 2025 8‑K Item 2.02 and exhibits (Nov 4, 2025)
  • Q3 2025 earnings call transcripts (Nov 4, 2025)
  • Prior quarter press releases for trend analysis: Q2 2025 (Jul 31, 2025) ; Q1 2025 (May 1, 2025)