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UT

UNIVERSAL TECHNICAL INSTITUTE INC (UTI)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 revenue rose 13.3% year over year to $222.4M, diluted EPS was $0.34, and adjusted EBITDA was $36.8M; results capped a year in which revenue grew 14% to $835.6M and net income reached $63.0M .
  • Actuals beat Wall Street consensus on revenue ($222.4M vs $219.3M*) and EPS ($0.34 vs $0.257*); adjusted EBITDA was roughly in line ($36.8M vs $36.3M*) .
  • FY 2026 guidance introduces an investment-heavy year: revenue $905–$915M, net income $40–$45M, diluted EPS $0.71–$0.80, adjusted EBITDA $114–$119M, adjusted FCF $20–$25M, and new starts 31.5K–33.0K; management stresses baseline adjusted EBITDA would exceed $150M excluding ~$40M planned growth investments .
  • Catalysts: accelerated campus openings (three in FY26; 2–5 per year thereafter), ~20 new programs in FY26, and a long-term target to surpass $1.2B revenue and approach $220M adjusted EBITDA by FY 2029; near-term margin moderation may temper reaction despite quarterly beat .

What Went Well and What Went Wrong

What Went Well

  • 14% FY revenue growth to $835.6M exceeded raised guidance, with FY net income ($63.0M) above the high end; adjusted EBITDA landed mid-range at $126.5M .
  • Student metrics strong: Q4 average full-time active students +8.1% YoY to 25,049 and total new starts +5.4% to 12,109; FY average students +10.5% and new starts +10.8% .
  • Strategic acceleration: plans for three new campuses in FY26 (Fort Myers, Atlanta, San Antonio) and “at least two and up to five” campuses annually thereafter; ~20 programs in FY26; “platform can scale efficiently” .

Selected quotes:

  • CEO: “We exceeded every major operational target we set and even surpassed our twice-raised revenue guidance range with 14% year-over-year growth.”
  • CFO: “Our baseline adjusted EBITDA, excluding planned growth investments, is expected to exceed $150 million.”

What Went Wrong

  • Q4 adjusted EBITDA declined 1.4% YoY to $36.8M; operating income down slightly to $25.0M vs $26.0M as operating expenses grew faster than revenue .
  • FY26 implies margin compression: reported adjusted EBITDA $114–$119M (vs FY25 $126.5M) driven by ~$40M front-loaded growth investments; net income guided down to $40–$45M and diluted EPS $0.71–$0.80 .
  • Adjusted free cash flow $56.0M was below internal expectations due to temporary Department of Education verification delays in cash collections; expected to normalize soon .

Financial Results

Core Financials vs Prior Quarters

MetricQ2 2025Q3 2025Q4 2025
Revenue ($USD Millions)$207.4 $204.3 $222.4
Diluted EPS ($USD)$0.21 $0.19 $0.34
Adjusted EBITDA ($USD Millions)$28.9 $25.3 $36.8
Income from Operations ($USD Millions)$16.9 $14.2 $25.0
Net Income ($USD Millions)$11.4 $10.7 $18.8

Actuals vs Consensus (Q4 2025)

MetricConsensusActual
Revenue ($USD Millions)$219.3*$222.4
Diluted EPS ($USD)$0.257*$0.34
Adjusted EBITDA ($USD Millions)$36.3*$36.8

Values with asterisk retrieved from S&P Global.

Segment Breakdown

SegmentQ2 2025 Revenue ($MM)Q3 2025 Revenue ($MM)Q4 2025 Revenue ($MM)
UTI$134.2 $131.5 $144.6
Concorde$73.2 $72.8 $77.8
SegmentQ2 2025 Adjusted EBITDA ($MM)Q3 2025 Adjusted EBITDA ($MM)Q4 2025 Adjusted EBITDA ($MM)
UTI$28.0 $26.5 $34.2
Concorde$10.9 $8.1 $12.4
Corporate$(10.0) $(9.3) $(9.9)
Consolidated$28.9 $25.3 $36.8

KPIs

KPIQ2 2025Q3 2025Q4 2025
Total New Student Starts6,650 5,721 12,109
Avg Full-Time Active Students24,604 23,757 25,049
End of Period Full-Time Active Students24,851 22,369 27,679

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
New Student StartsFY 202529,000–30,000 29,500–30,000 Raised low end
RevenueFY 2025$825–$835M $830–$835M Raised low end
Adjusted EBITDAFY 2025$124–$128M $124–$128M Maintained
New Student StartsFY 2026N/A31,500–33,000 New
RevenueFY 2026N/A$905–$915M New
Net IncomeFY 2026N/A$40–$45M New
Diluted EPSFY 2026N/A$0.71–$0.80 New
Adjusted EBITDAFY 2026N/A$114–$119M New (reported); baseline >$150M
Adjusted Free Cash FlowFY 2026N/A$20–$25M New
Capex (Cash)FY 2026N/A~$100M New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Campus expansionAnnounced three campuses for 2026; raised FY25 guidance Three FY26 openings (Fort Myers, Atlanta, San Antonio); plan 2–5 campuses per year Accelerating
Concorde growth restrictionsDOE lifted Concorde growth restrictions; accelerates campus/program growth Concorde campuses planned for 2027 (Houston, Atlanta); segment growth led by marketing/admissions Regulatory tailwind
Capex & FCF cadenceYTD capex $14.3M; adjusted FCF $8.0M FY26 capex ~$100M; adjusted FCF $20–$25M; DOE verification delayed cash temporarily Investment ramp
Pricing power—Assumes 2–3% tuition increases, constrained by student funding parameters Modest increases
Student mix & demandNew starts +21.4% in Q2; avg students +10.7% Demand intensifying; local students improve show rates and timelines Healthy demand
AI/technology initiatives—Exploring AI-enabled training and automation partnerships Emerging
DOE verification—Temporary cash timing impact; no front-end productivity issues Resolving

Management Commentary

  • CEO: “Fiscal 2025 was an exceptional year… we exceeded every major operational target… our platform can scale efficiently while maintaining our high quality.”
  • CEO: “We now expect to open at least two and up to five campuses annually, as well as launch approximately 20 new programs annually… Everything is in place for another strong year.”
  • CFO: “Our baseline adjusted EBITDA, excluding planned growth investments, is expected to exceed $150 million… reported adjusted EBITDA is projected between $114 and $119 million, reflecting approximately $40 million in growth investments.”
  • CFO: “Adjusted free cash flow was $56 million, slightly below expectations due to temporary timing impacts from Department of Education verification. We expect these to work through in the next few months.”

Q&A Highlights

  • Starts growth distribution: FY26 starts growth ~8–9% with similar segment profile to FY25; balanced investments across divisions .
  • Campus opening cadence: Clarified 2–5 combined campuses annually across UTI and Concorde; not 10 per year; FY27 leases signed (UTI Salt Lake City, Concorde Houston/Atlanta) .
  • Pricing: Assumes 2–3% tuition increases on average; constrained by student funding limits to avoid widening funding gaps for students .
  • Capex and campus economics: FY25 cash capex ~$42M due to timing; FY26 capex ~ $100M; mature UTI campuses like Atlanta/Salt Lake target $40–$45M revenue with IRRs north of 30% .
  • DOE verification: Temporary cash collection delays; no impact on admissions productivity; normalization underway .

Estimates Context

  • Q4 2025: Actual revenue $222.4M vs consensus $219.3M*; diluted EPS $0.34 vs $0.257*; adjusted EBITDA $36.8M vs $36.3M* — revenue/EPS beat, EBITDA roughly in line .
  • FY 2026: Company guidance revenue $905–$915M vs consensus ~$902.0M*; adjusted EBITDA $114–$119M vs consensus ~$118.6M*; normalized net income consensus ~$56.9M* sits above management’s $40–$45M, reflecting investment timing and non-GAAP differences .
  • Implication: Street may need to recalibrate near-term profitability for FY26 given front-loaded investments, while longer-term targets remain intact (>$1.2B revenue and ~$220M adjusted EBITDA by FY29) .

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Strong Q4 close and FY outperformance set the stage for an investment year in FY26; near-term margin moderation is deliberate and front-loaded to accelerate scale .
  • Revenue/EPS beats vs consensus should support the print; however, FY26 EBITDA/earnings guide reflects heavier growth investments likely to restrain near-term profitability multiples .
  • Demand backdrop remains robust across skilled trades and healthcare; local-market strategy and program diversification support faster starts and improved conversion .
  • Segment momentum: Concorde’s marketing/admissions investments and lifted growth restrictions enable accelerated expansion; UTI segment continues to add programs and campuses .
  • Capital plan: Expect ~$100M FY26 capex and lower adjusted FCF ($20–$25M) as the company builds capacity; liquidity remains solid at $254.5M .
  • Long-term thesis: Multi-year expansion targets to >$1.2B revenue and approach $220M adjusted EBITDA by FY29 underpin medium-term margin recovery and earnings power .
  • Trading setup: Potential near-term debate on margins vs growth; watch FY26 quarterly cadence (net income and adjusted EBITDA strongly negative in H1, improving in Q3, strongest in Q4) for inflection signals .