Adtalem Global Education Inc. (ATGE) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with a 12% revenue increase and a 34.3% rise in EPS. Despite increased investments impacting margins, strategic growth initiatives and robust enrollment in key segments like Walden and Medical/Veterinary are promising. Share repurchase plans and optimistic guidance further boost sentiment. Although some uncertainties exist, such as regulatory risks and vague partnership timelines, the overall outlook remains positive, particularly given the company's market cap and recent financial achievements.
Key Financial Performance
Revenue Revenue grew 12% to $503 million, driven by all three segments. Excluding a one-week academic calendar shift, revenue was up 8.4% year-over-year. The shift added $18 million to Q2 revenue.
Adjusted EBITDA Adjusted EBITDA grew to $155 million, a 23.9% increase compared to the prior year. Adjusted EBITDA margin expanded by 290 basis points to 30.8%. Excluding the one-week shift, the margin was up 30 basis points year-over-year.
Adjusted Earnings Per Share (EPS) Adjusted EPS was $2.43, a 34.3% increase compared to the prior year. This was attributed to operating income growth, lower interest expenses, and reduced outstanding debt.
Adjusted Net Income Adjusted net income for the quarter was $87.9 million, up 26.7% compared to last year. This was driven by operating income growth and lower interest expenses, partially offset by higher income taxes.
Operating Cash Flow Trailing 12 months operating cash flow was $428 million, up $146 million year-over-year, driven by strong cash flow generation and a healthy balance sheet.
Chamberlain Revenue Chamberlain reported revenue of $183.8 million, a 1.6% increase year-over-year, driven by pricing optimization. Total student enrollment declined by 1%, with growth in pre-licensure programs offset by declines in post-licensure programs.
Walden Revenue Walden's revenue was $217.6 million, a 27% increase year-over-year. Excluding the one-week shift, revenue was up 16.5%. Total student enrollment grew 13%, marking the 10th consecutive quarter of growth.
Medical and Veterinary Segment Revenue Revenue for this segment was $102 million, a 6.9% increase year-over-year. Adjusted EBITDA increased by 17.6% to $31.4 million, with a margin increase of 280 basis points to 30.8%.
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Operating Highlights
New Programs at Walden: Launched programs such as the Master in Applied Behavioral Analysis and the Master's degree in Clinical Psychology, attracting over 1,200 students in less than a year. Additional programs are in the development pipeline.
PhD Completion Program: Introduced the Walden University PhD completion program to help doctoral students finish their degrees.
Enrollment Growth: Achieved 10th consecutive quarter of enrollment growth, with total enrollment increasing by 6% to 97,000 students.
Chamberlain Expansion: Expanded reach as a national leader in nursing, growing enrollment by 6,000 students over 3 years to reach 40,000 students.
Revenue Growth: Revenue grew 12% to $503 million in Q2 2026.
Operational Efficiencies: Adjusted EBITDA grew to $155 million, with a margin of 30.8%, up 290 basis points from last year.
Health Care Workforce Focus: Positioned as a leader in addressing U.S. health care workforce shortages, with plans for capacity expansion and new revenue streams to be detailed at the upcoming Investor Day.
Capital Allocation: Deployed $165 million to share repurchases, with $728 million remaining in authorization.
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Risk or Challenges
Enrollment Challenges at Chamberlain: Chamberlain's total enrollment declined by 1% this quarter, with growth in pre-licensure programs offset by declines in post-licensure programs. This represents a temporary pause in growth trajectory, which could impact revenue and market position if not addressed.
Healthcare Workforce Shortages: The intensifying healthcare workforce crisis in the U.S., particularly in rural and underserved urban areas, poses a challenge to Adtalem's ability to meet demand and scale effectively.
Operational Gaps in Marketing and Enrollment: Previously identified gaps in marketing effectiveness and enrollment funnel conversion at Chamberlain could hinder future enrollment growth if not resolved.
Revenue Dependency on Calendar Shifts: Walden's revenue growth this quarter was partially driven by a one-week academic calendar shift, which could create uneven revenue recognition and impact financial predictability.
Increased Investments Impacting Margins: Investments in strategic growth initiatives and student support have led to lower adjusted EBITDA margins in some segments, such as Chamberlain, which could pressure profitability if not offset by revenue growth.
Regulatory and Competitive Risks: Forward-looking statements highlight risks related to market, competitive, and regulatory uncertainties that could materially impact future results.
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Guidance & Outlook
Revenue Growth: The company expects to achieve full-year revenue growth of 6% to 8.5%.
Adjusted Earnings Per Share (EPS) Growth: Guidance for adjusted EPS growth has been raised to 17% to 20% for fiscal year 2026.
Chamberlain Enrollment: Q3 total enrollment is expected to remain soft, but application momentum is anticipated to translate into new enrollment growth for the fall cycle.
Walden Enrollment: Walden University achieved record total enrollments of 52,400 students, with new programs already enrolling over 1,200 students in less than a year. Additional programs are in the development pipeline.
Medical and Veterinary Segment: Enrollment indicators show momentum, and innovative pathways are being created to expand access to MD programs. Operational excellence in the enrollment funnel is expected to sustain growth.
Capacity Expansion Plans: The company plans to outline a multi-year growth framework, including capacity expansion and new revenue streams, at the upcoming Investor Day on February 24.
Adjusted EBITDA Margin: The company aims to expand its fiscal year 2026 adjusted EBITDA margin by approximately 100 basis points.
Capital Allocation: The company has a disciplined approach to capital allocation, with $728 million remaining in its share repurchase authorization and plans to invest in high ROI growth opportunities.
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Shareholder Return Plan
Share Repurchases: This quarter, we deployed $165 million to share repurchases, and we have approximately $728 million remaining on our current authorization. We'll continue to take a disciplined returns-focused approach to capital allocation.
New Share Repurchase Authorization: We repurchased 1.7 million shares of our common stock at an average price of $95 within the quarter, completing our prior $150 million authorization. Subsequently, we announced a new $750 million Board authorization through December 2028, which has $728 million available as of December 31.
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Key Q&A
Q:What is driving the growth at Walden, and are they taking market share from other schools?
A:The growth at Walden is consistent across the board, with pronounced growth in behavioral sciences programs, nursing programs, and the MSN credential. There are also great returns on investments in education programs and traction in expanding undergraduate enrollments.
Q:What is the update on the partnership with Sallie Mae regarding loan caps?
A:The company is working with Sallie Mae on definitive documentation for the partnership. Sallie Mae is assembling a syndicate of capital sources to provide loan dollars. The partnership is progressing, and an announcement will be made once documentation is complete.
Q:What is contributing to the double-digit growth at Chamberlain, and what is the typical lead time for changes to take effect?
A:The growth is attributed to addressing gaps in marketing effectiveness and enrollment funnel conversion, as well as personnel changes. Leading indicators like application volumes for pre-licensure and post-licensure nursing programs are positive. The fall cycle is the largest for Chamberlain, and while total enrollment is expected to be flat for the fiscal year, positive year-over-year growth is anticipated by the fall cycle.
Q:What would need to happen for the company to meet or exceed the high end of its revenue guidance?
A:Meeting or exceeding the high end of the guidance would require a quicker-than-anticipated recovery at Chamberlain and additional acceleration in the Med/Vet segment. Walden is already operating at an optimal pace.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the timeline for the definitive documentation with Sallie Mae and used vague language like 'more to come' without offering concrete updates. Additionally, while discussing the high-end revenue guidance, the response lacked clarity on specific actions or metrics that would drive the upside.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AUC physician
America health
Application volume
Atlanta Kansas
BSN Masters
BSN RN
Capstone
Chamberlain
MD
Purpose
Walden enrollment
campus
capital allocation
care system
care workforce
crisis
cycle
development
enrollment funnel
fall
focus student
framework
funnel conversion
gap
health care
leader
learning
marketing
model
momentum enrollment
power
precision
program student
reach
record enrollment
student experience
student program
trajectory enrollment
year
ATGE Transcript
Adtalem Global Education Inc. (ATGE) Q2 2026 Earnings Call Transcript
Positive1-28
The earnings call highlights strong financial performance with a 12% revenue increase and a 34.3% rise in EPS. Despite increased investments impacting margins, strategic growth initiatives and robust enrollment in key segments like Walden and Medical/Veterinary are promising. Share repurchase plans and optimistic guidance further boost sentiment. Although some uncertainties exist, such as regulatory risks and vague partnership timelines, the overall outlook remains positive, particularly given the company's market cap and recent financial achievements.
Adtalem Global Education Inc. (ATGE) Q1 2026 Earnings Call Transcript
Positive10-30
The earnings call indicates strong financial performance with revenue and EBITDA growth in medical and veterinary segments. The Q&A session reveals confidence in addressing enrollment issues and a promising partnership with Sallie Mae. Despite temporary margin pressures, the company's guidance remains optimistic. The strategic partnership announcements and commitment to enhancing technology and AI credentials further bolster a positive outlook. With a market cap of approximately $2.48 billion, these factors suggest a positive stock price movement in the short term.
Adtalem Global Education Inc. (ATGE) Q4 2025 Earnings Call Transcript
Positive8-8
The earnings call reveals strong financial performance, with 12.9% revenue growth and a 33% increase in adjusted EPS. The company announced a new $150 million share repurchase program, which is generally positive. Despite some capacity constraints and economic uncertainties, management's responses in the Q&A were clear and positive, emphasizing robust demand and strategic investments. The market cap suggests moderate reaction, leading to a 'Positive' prediction of 2% to 8% stock price increase.
Adtalem Global Education Inc. (ATGE) Q3 2025 Earnings Call Transcript
Positive5-9
The earnings call summary shows strong financial performance with revenue and EBITDA growth, positive shareholder return plans, and strategic initiatives like AI integration. The Q&A section highlights management's confidence in overcoming margin challenges and expanding enrollment. The new share repurchase program and positive guidance further enhance sentiment. Despite some uncertainties in the education sector, the company's strong results and optimistic outlook suggest a positive stock price reaction, especially given the market cap size.
ATGE Slides
ATGE Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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Why do some answers appear as “Unclear” or “Inaudible”?
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Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
