PERDOCEO EDUCATION Corp
For the period ended Mar 31, 2025. Filed May 1, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
PRDO$26.88+1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0000950170-24-125309
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000950170-25-061803
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 99 previous paragraphs and 109 current paragraphs.
47 unchanged; 29 reworded; 33 added; 23 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
the impact of any federal budget reconciliation or other legislative process on the availability of current levels of federal student aid or the conditions associated with participating in such aid programs;
Current report
On December 2, 2024, the Company acquired the University of St. Augustine for Health Sciences (the "USAHS acquisition"). Results of operations related to the USAHS acquisition are included in the consolidated financial statements from the date of acquisition.
Current report
The November 2024 federal elections resulted in a new President and Congress. We cannot predict the actions that the new Administration or Congress may take or their effect on the higher education sector. The new Congress or Administration may delay, block, modify, or eliminate certain Title IV and other regulations applicable to higher education institutions. In addition, the new Administration may interpret, apply, and enforce Title IV and other regulations in a manner different from current Department guidance and practice. We expect to continue to need to operate nimbly, making necessary changes to the extent possible to comply with new rules or interpretations as well as new interpretations of existing rules.
Current report
2025 First Quarter Overview
Current report
During the first quarter ended March 31, 2025 ("current quarter"), our academic institutions remained focused on furthering their goal of changing lives through education and preparing learners for essential skills needed in today’s job market. CTU and AIUS provide learners with relevant knowledge and equip them with essential skills needed to thrive in today’s evolving job market, while USAHS prepares professionals to serve and provide quality medical care to communities across the country. The enrollment trends that we have been experiencing across these academic institutions have reinforced and validated our strategy of prioritizing student experiences and academic outcomes that, we believe, should ultimately support sustainable and responsible growth.
Current report
Total student enrollments increased 16.7% at March 31, 2025 as compared to March 31, 2024. CTU's total student enrollments increased 10.6% as compared to the prior year quarter end, primarily supported by high levels of student retention and engagement, growth within the corporate student program and higher levels of prospective student interest. Total student enrollments decreased 4.5% at AIUS for the current quarter end as compared to the prior year quarter end. Lastly, for USAHS, the spring term which began in January of 2025 has total student enrollments of 4,200 as of the current quarter end. USAHS has a traditional university calendar with three academic terms and multiple campuses for in-person classes in California, Texas and Florida. USAHS continues to expand its program offerings in terms of new modalities and current campus locations, with the goal of maximizing the geographical area they serve while providing students with a wider choice in taking their courses between online instruction and in person instruction at a campus location as well as hybrid options in between.
Current report
For the current quarter, our academic institutions experienced increased levels of prospective student interest and commensurately increased their marketing and admissions spending to effectively and efficiently identify and engage with prospective students looking to pursue a degree at one of our academic institutions. Our academic institutions continuously adjust their marketing strategies to identify prospective students who, we believe, are more likely to succeed in one of their academic programs. Additionally, we maintained our commitment to training and developing our admissions, enrollment, and student support teams, ensuring they are fully prepared to assist the increasing number of students throughout their educational journey at our academic institutions.
Current report
Revenue for the current quarter increased by 26.6% or $44.7 million as compared to the prior year quarter, primarily due to $39.2 million of revenue from the USAHS acquisition which was completed in December 2024 and therefore did not have comparable results in the prior year quarter. CTU also contributed to the increase of revenue due to growth in total student enrollments driven by strong student retention and engagement trends along with increased prospective student interest, while AIUS remained relatively flat as compared to the prior year quarter.
Current report
Operating income for the current quarter increased to $51.7 million as compared to operating income of $46.3 million in the prior year quarter, driven by both CTU and AIUS. The increase in operating income for the current quarter was a result of revenue growth at CTU and lower bad debt expense at AIUS.
Current report
Revenue for the first quarter of 2025 ("current quarter") increased by 26.6% or $44.7 million as compared to the prior year quarter. The increase was primarily driven by the acquisition of USAHS completed in December 2024 that was not part of the comparative prior year quarter as well as an increase in revenue at CTU.
Current report
The educational services and facilities expense for the current quarter increased by 62.6% or $18.7 million, compared to the prior year quarter. The increase was due to a full quarter of expenses related to the USAHS acquisition as compared to no expenses in the prior year quarter for USAHS.
Current report
The general and administrative expense for the current quarter increased by 15.4% or $13.4 million as compared to the prior year quarter driven by increases within all expense categories. The increase was primarily due to a full quarter of expenses related to the USAHS acquisition as compared to no expenses in the prior year quarter.
Current report
Advertising and marketing expense for the current quarter increased by 15.3% or $3.7 million as compared to the prior year quarter. Excluding USAHS expenses, advertising expenses would have remained relatively flat as compared to the prior year quarter.
Current report
Admissions expense for the current quarter increased by 7.5% or $1.6 million as compared to the prior year quarter. Excluding USAHS expenses, admissions expenses would have remained relatively flat as compared to the prior year quarter.
Current report
The administrative expense for the current quarter increased by 20.0% or $7.2 million as compared to the prior year quarter. Excluding USAHS expenses, administrative expenses would have increased by 5.6% or $2.0 million as compared to the prior year quarter, driven by increased corporate overhead expenses.
Current report
(1) USAHS includes results of operations starting from the acquisition date on December 2, 2024.
Current report
Bad debt expense for the current quarter increased by 15.3% or $1.0 million as compared to the prior year quarter. The increase was primarily driven by CTU, which was only partially offset with a decrease at AIUS, due to timing impacts related to student billings versus cash collections.
Current report
Depreciation and Amortization
Current report
Depreciation and amortization expense for the current quarter increased by $8.8 million as compared to the prior year quarter, driven by the USAHS acquisition, which includes amortization for definite-lived intangible assets as well as amortization related to finance leases for ground-based campuses.
Current report
Operating income for the current quarter increased by 11.8% or $5.4 million as compared to the prior year quarter. This improvement was primarily driven by higher revenue, which more than offset the increases in operating expenses, as compared to the prior year quarter.
Current report
(1) USAHS includes results of operations beginning on the acquisition date of December 2, 2024. Operating loss for the current quarter includes $8.9 million of depreciation and amortization expense associated with acquired tangible and intangible assets as well as finance leases.
Current report
(1) Perdoceo completed the acquisition of USAHS on December 2, 2024.
Current report
CTU. Current quarter revenue increased by 5.3% or $6.0 million as compared to the prior year quarter. The increase was primarily driven by total student enrollment growth of 10.6% at March 31, 2025 as compared to the prior year quarter. CTU's total student enrollment growth was supported by high levels of student retention and engagement, growth in the corporate student programs and higher levels of prospective student interest.
Current report
Current quarter operating income for CTU increased by 9.3% or $3.9 million as compared to the prior year quarter driven by the increase in revenue discussed above, which more than offset increased operating expenses.
Current report
AIUS. Current quarter revenue decreased slightly by 0.8% or $0.4 million as compared to the prior year quarter. The decrease was primarily driven by a decrease in total student enrollments of 4.5% at March 31, 2025 as compared to the prior year quarter end.
Current report
Current quarter operating income for AIUS increased by 28.0% or $2.6 million as compared to the prior year quarter, primarily driven by decreased bad debt expense, which more than offset the decrease in revenue.
Current report
USAHS. Revenue for the current quarter was approximately $39.2 million. USAHS reported an operating loss of approximately $0.3 million for the current quarter driven by $8.9 million of depreciation and amortization expense associated with acquired tangible and intangible assets as well as finance leases.
Current report
Principal payments for finance leases and failed sale leaseback. During the quarter ended March 31, 2025, the Company made payments of $1.7 million for finance leases and a failed sale leaseback, both related to USAHS.
Current report
Earnout payments related to business acquisition. During the quarter ended March 31, 2025, the Company made earnout payments of $1.8 million related to the Coding Dojo acquisition.
Current report
Student receivables, net: The increase is driven by timing of student billings for academic terms.
Current report
Deferred revenue: The increase in deferred revenue is partially driven by the USAHS acquisition as well as timing of academic terms and related student billings.
Current report
Sale lease-back financing. The increase in sale lease-back financing liability is primarily due to the recategorization of construction financing upon lease commencement due to a failed sale leaseback transaction.
Current report
Construction financing. The decrease in construction financing liability is primarily due to the recategorization of sale leaseback upon lease commencement.
Removed paragraphs (23)
Previous report
We continue to see one of the most challenging operating environments in recent memory as the Department has undertaken a complete overhaul of almost all of the major regulatory requirements associated with our participation in Title IV Programs and which disproportionally negatively impact the for-profit postsecondary education sector. Additionally, a number of the Department’s regulatory initiatives are explicitly targeted at negatively impacting the proprietary sector of education. In many cases the new regulatory requirements are unclear, require further clarification as to their interpretation or applicability or are subject or will be subject to legal challenges. We expect to continue to need to operate nimbly in this uncertain environment, making necessary changes to the extent possible to comply with the myriad of new vague or unclear rules or interpretations as well as new interpretations of existing rules. For example, in 2023, we materially reduced prospective student enrollment, marketing and outreach processes at AIUS during the year to limit the volume of new federal funding that the institution would receive and to preserve available funding for existing students under the Department’s new 90-10 Rule. Any actions that limit our participation in Title IV Programs or the amount of student financial aid for which our students are eligible would materially impact our student enrollments and profitability and could impact the continued viability of our business as currently conducted.
Previous report
2024 Third Quarter Overview
Previous report
During the third quarter ended September 30, 2024 ("current quarter"), we continued to experience high levels of student retention and engagement at both CTU and AIUS, with student retention remaining at multi-year highs. Our faculty and student support teams remain dedicated to educating and serving our students, and we anticipate that student retention should continue to trend at these levels through the remainder of 2024.
Previous report
Total student enrollments increased 11.0% at September 30, 2024 as compared to September 30, 2023, with both academic institutions contributing to this increase. CTU's total student enrollments increased 13.6% as compared to the prior year quarter end driven by student enrollment growth within our corporate engagement programs as well as a positive timing impact from the academic calendar comparability resulting in more enrollment days for the current year to date as compared to the prior year to date. Total student enrollments increased 4.0% at AIUS for the current quarter end as compared to the prior year quarter end as AIUS' total student enrollment comparability had continued to improve during the current year to date since reverting to normalized levels of operations beginning in the fourth quarter of 2023.
Previous report
We view technology as a catalyst and differentiator for us and remain committed to making selective investments that deliver a more meaningful and relevant educational experience for our learners while continuing to improve the efficiency and effectiveness of our academic institutions’ student support functions. Additionally, we remained focused on investing in and improving processes that support our corporate engagement programs. Lastly, marketing and admissions spend increased during the current quarter as compared to the prior year quarter, driven by AIUS operating at normalized levels during the current year. We continue to adjust our marketing strategies to further improve our focus on identifying prospective students who are more likely to succeed at one of our universities, as well as comply with updated expectations from various federal agencies around prospective student outreach.
Previous report
Revenue for the current quarter decreased by 5.6% or $10.1 million as compared to the prior year quarter, resulting from a decrease in revenue for CTU of 4.0% or $4.8 million and a decrease for AIUS of 9.0% or $5.3 million. The decrease in revenue at CTU was driven by changes within our professional development program offerings as well as a negative timing impact of revenue-earning days due to the academic calendar for the current quarter as compared to the prior year period. CTU's academic calendar may impact the comparability of revenue-earning days and enrollment results in any given quarter, with the impact on revenue and total student enrollments not necessarily having the same magnitude or directional impact. The decrease within AIUS was driven by a lag impact on revenue of the operational changes undertaken during 2023.
Previous report
Operating income for the current quarter increased to $44.8 million as compared to operating income of $43.1 million in the prior year quarter. The increase in operating income for the current quarter was a result of decreased operating expenses, primarily in the areas of asset impairment, academics and administrative expenses, which more than offset the decrease in revenue during the current quarter as compared to the prior year quarter.
Previous report
Legal fee expense associated with (i) responses to the Department of Education (the "Department") relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.
Previous report
Non-cash gain associated with the sale of the LCB tradename in exchange for outstanding shares of Perdoceo's stock.
Previous report
The current quarter and year to date revenue decreased by 5.6% or $10.1 million and 10.2% or $57.3 million, respectively, as compared to the prior year periods, driven by decreases in revenue within both CTU and AIUS. The decline for the current quarter and year to date was primarily driven by the lag impact on revenue due to the operational changes made at AIUS in the prior year as well as changes within our professional development program offerings at CTU. Typically, total student enrollment balances at the end of any given quarter have a lag impact on revenue in the subsequent quarter. Additionally, the current quarter and current year to date had a decrease in revenue-earning days at CTU as compared to the prior year periods due to a timing impact of the academic calendar.
Previous report
The educational services and facilities expense for the current quarter and year to date decreased by 15.6% or $5.2 million and 14.4% or $14.4 million, respectively, as compared to the prior year periods. Academics and student related costs decreased by 14.1% or $4.4 million and 13.1% or $12.1 million for the current quarter and year to date, respectively, as compared to the prior year periods, primarily driven by operational changes made to align with recent student enrollments trends. Occupancy expenses for the current quarter and year to date improved by 33.1% or $0.8 million and 30.5% or $2.4 million, respectively, as compared to the prior year periods, driven by the continued optimization of leased space.
Previous report
The general and administrative expense for the current quarter increased by 1.8% or $1.6 million and decreased by 11.4% or $34.8 million for the current year to date, as compared to the prior year periods. The current quarter increase was primarily driven by increased advertising and marketing expense, which was only partially offset with a decrease in admissions and administrative expenses. The year to date improvement was driven by decreases within all expense categories as compared to comparative prior year period.
Previous report
Advertising and marketing expense for the current quarter increased by 18.6% or $4.2 million and decreased by 7.0% or $5.6 million for the current year to date, as compared to the prior year periods. The current quarter increase was due to increased spending within AIUS to normalized levels versus the prior year which was decreased due to the short-term operational changes. The current year to date improvement was primarily driven by adjustments made to our marketing processes to identify prospective student interest.
Previous report
Admissions expense for the current quarter and year to date decreased by 5.5% or $1.2 million and 13.7% or $9.6 million, respectively, as compared to the prior year periods. Admissions expense for the current quarter decreased within CTU, which more than offset the increase within AIUS as a result of the return to normalized operating levels. The current year to date improvement was primarily driven by decreased expenses within both CTU and AIUS as a result of the operational changes made during the prior year.
Previous report
The administrative expense for the current quarter and year to date decreased by 6.2% or $2.5 million and 11.3% or $14.5 million, respectively, as compared to the prior year periods, primarily driven by operational efficiencies within our academic institutions and decreased legal fees within Corporate and Other for the year to date period.
Previous report
Operating income increased by 4.0% or $1.7 million and 1.9% or $2.6 million for the current quarter and year to date, respectively, as compared to the prior year periods. The current quarter improvement was benefitted by lower academics, admissions and administrative expenses which more than offset the decrease in revenue as compared to the prior year quarter. The year to date improvement was supported by lower operating expenses across all categories which more than offset the decrease in revenue as compared to the prior year period. The current quarter and year to date also included lower asset impairment charges of $7.4 million and $6.2 million, respectively, as compared to the comparative prior year periods.
Previous report
For the quarter and year to date ended September 30, 2024, we recorded a provision for income taxes of $14.1 million reflecting an effective tax rate of 26.9% and $42.1 million reflecting an effective tax rate of 26.6%, respectively, as compared to a provision for income taxes of $6.8 million reflecting an effective tax rate of 14.1% and $39.3 million reflecting an effective tax rate of 23.1% for the respective prior year periods.
Previous report
CTU. Current quarter and year to date revenue decreased by 4.0% or $4.8 million and 6.1% or $22.2 million, respectively, as compared to the prior year periods. The decrease was primarily driven by changes within the professional development program offerings at CTU as well as a negative timing impact of revenue-earning days due to the academic calendar for the current quarter and year to date as compared to the prior year periods. CTU experienced total student enrollment growth of 13.6% at September 30, 2024 as compared to the prior year quarter end which was driven by growth in student enrollments from corporate engagement programs as well as a positive timing impact of the academic calendar on enrollment days. CTU's academic calendar may impact the comparability of revenue-earning days and enrollment results in any given quarter, with the impact on revenue and total student enrollments not necessarily having the same magnitude or directional impact.
Previous report
Current quarter and year to date operating income for CTU increased by 28.1% or $9.7 million and 8.9% or $10.6 million, respectively, as compared to the prior year periods. The improvement in operating income was primarily supported by lower academics and admissions expenses as well as right-sizing of the cost structure to align with more simplified professional development offerings, which more than offset the declines in revenue. The current quarter and year to date also included lower asset impairment charges of $7.4 million and $6.2 million, respectively, as compared to the comparative prior year periods.
Previous report
AIUS. Current quarter and year to date revenue decreased by 9.0% or $5.3 million and 17.8% or $35.0 million, respectively, as compared to the prior year periods. The decreases were driven by a lag impact from the operational changes made during the latter half of 2023. AIUS' experienced total student enrollment growth of 4.0% at September 30, 2024 as compared to the prior year quarter end as the return to normalized operating levels in the fourth quarter of 2023 contributed to increased student enrollments.
Previous report
Current quarter and year to date operating income for AIUS decreased by 41.9% or $6.5 million and 30.0% or $13.4 million, respectively, as compared to the prior year periods, driven by the decrease in revenue discussed above.
Previous report
Right of use asset, net: The decrease is driven by recurring amortization of remaining ROU assets as well as impairment of certain leased assets which the Company made the decision to vacate during the current year to date.
Previous report
Deferred revenue: The increase is primarily related to the timing impact of the academic terms within CTU and AIUS along with an increase in total student enrollments.
Reworded paragraphs (29)
Previous wording
declines in enrollment or interest in our programs or our ability to market to and contact prospective students;
Current wording
declines in enrollment or interest in our programs or our ability to attract or connect with prospective students;
Previous wording
our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the terms of any potential changes to or conditions imposed on our continued participation in the Title IV programs under new program participation agreements, the new 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education (the “Department”)), as well as applicable accreditation standards and state regulatory requirements;
Current wording
our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the new 90-10, gainful employment, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education (the “Department”)), as well as applicable accreditation standards and state regulatory requirements;
Previous wording
Our accredited academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. The Company’s academic institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIUS” or “AIU System”) – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Our academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. Perdoceo's institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.
Current wording
Perdoceo’s accredited academic institutions offer a quality postsecondary education to a diverse student population, with fully online, campus-based and hybrid learning programs. The Company’s academic institutions – Colorado Technical University (“CTU”), the American InterContinental University System (“AIUS” or “AIU System”) and University of St. Augustine for Health Sciences ("USAHS") – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Our academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. USAHS is among the nation's reputable universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Perdoceo's academic institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.
Previous wording
Our reporting segments are determined in accordance with Financial Accounting Standards Board(“FASB”)Accounting Standards Codification(“ASC”)Topic 280 –Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIUS.
Current wording
Our reporting segments are determined in accordance with Financial Accounting Standards Board(“FASB”)Accounting Standards Codification(“ASC”)Topic 280 –Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across three reporting segments: CTU, AIUS and USAHS.
Previous wording
We operate in a highly regulated industry, which has significant impacts on our business and creates risks and uncertainties. In recent years, Congress, the Department, states, accrediting agencies, the Consumer Financial Protection Bureau, the Federal Trade Commission, state attorneys general, consumer advocacy groups and the media have all scrutinized the for-profit postsecondary education sector. Congressional hearings and roundtable discussions were held regarding various aspects of the education industry, including issues surrounding student debt as well as publicly reported student outcomes that may be used as part of an institution’s recruiting and admissions practices, and reports were issued that are highly critical of for-profit colleges and universities. A group of influential U.S. senators, consumer advocacy groups and some media outlets have strongly and repeatedly encouraged the Department, the Department of Defense and the Department of Veterans Affairs and its state approving agencies to take action to limit or terminate the participation of institutions such as ours in existing tuition assistance programs. In several cases, these groups have received significant financial support from third parties critical of our sector and have aligned on messaging that negatively impacts our sector during policy and rulemaking discussions. In addition, the current administration has made student loan forgiveness one of its top domestic policy objectives, and it has been aggressively pursued by the Department in cooperation with special interest groups, other federal agencies, state attorneys general and others. These groups collectively have focused efforts relating to student debt forgiveness on for-profit colleges and universities, encouraging loan discharge applications and complaints by former students.
Current wording
As indicated in “Scrutiny of the For-Profit Postsecondary Education Sector” section within Item 1, "Business" in our Annual Report on Form 10-K for the year ended December 31, 2024, the for-profit industry is scrutinized by various policymakers, agencies and interest groups. Congressional hearings and roundtable discussions were previously held regarding certain aspects of the education industry, including issues surrounding student debt as well as publicly reported student outcomes that may be used as part of an institution’s recruiting and admissions practices, and reports were issued that are highly critical of for-profit colleges and universities. Many of the most highly criticized institutions have been closed now for several years.
Previous wording
We believe it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of our core business. As a general matter, we use non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of our core business, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and to provide estimates of future performance.
Current wording
We believe it is useful to present non-GAAP financial measures which exclude certain non-cash items as a means to understand the performance of our core business. As a general matter, we use non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of our core business, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and to provide estimates of future performance.
Previous wording
We believe certain non-GAAP measures allow us to compare our current operating results with respective historical periods and with the operational performance of other companies in our industry because it does not give effect to potential differences caused by items we do not consider reflective of underlying operating performance. We believe the items we are adjusting for are not normal operating expenses reflective of our underlying business. In evaluating the use of non-GAAP measures, investors should be aware that in the future we may incur expenses similar to the adjustments presented below. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by expenses that are unusual, non-routine or non-recurring. A non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance with and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of our liquidity.
Current wording
We believe certain non-GAAP measures allow us to compare our current operating results with respective historical periods and with the operational performance of other companies in our industry because it does not give effect to potential differences caused by items we do not consider reflective of underlying operating performance. We believe the items we are adjusting for are operating expenses which are not reflective of our underlying business. In evaluating the use of non-GAAP measures, investors should be aware that in the future we may incur expenses similar to the adjustments presented below. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by expenses that are unusual, non-routine or non-recurring. A non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance with and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of our liquidity.
Previous wording
We expect the strong levels of student retention and engagement experienced through the current year to date, to continue through the remainder of 2024 and expect to end the year with total student enrollment growth at both of our academic institutions as of December 31, 2024. Full year revenue is expected to be lower for 2024 primarily due to the lag impact on revenue of lower beginning total student enrollments at AIUS as well as lower revenue due to simplification of our professional development offerings at CTU.
Current wording
We expect the high levels of student retention and student engagement we experienced through the first quarter of 2025, as well as the prospective student interest experienced, to continue through the remainder of 2025. As a result, full year revenue is expected to be higher for 2025 due to the USAHS acquisition as well as growth in revenue and student enrollments within CTU and AIUS.
Previous wording
The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $48.6 million for the current quarter as compared to $47.2 million for the prior year quarter.
Current wording
The Company believes it is useful to present non-GAAP financial measures, which exclude certain non-cash items, as a means to understand the core performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $63.5 million for the current quarter as compared to $49.3 million for the prior year quarter.
Previous wording
Adjusted operating income and adjusted earnings per diluted share for the quarters and years to date ended September 30, 2024 and 2023 is presented below (dollars in thousands, unless otherwise noted):
Current wording
Adjusted operating income and adjusted earnings per diluted share for the quarters ended March 31, 2025 and 2024 is presented below (dollars in thousands, unless otherwise noted):
Previous wording
The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the quarters and years to date ended September 30, 2024 and 2023 (dollars in thousands):
Current wording
The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the quarters ended March 31, 2025 and 2024 (dollars in thousands):
Previous wording
Educational services and facilities expense includes costs attributable to the educational activities of our campuses, including: salaries and benefits of faculty, academic administrators and student support personnel, and costs of educational supplies and facilities, such as rents on leased facilities. Also included in educational services and facilities expense are rents on leased administrative facilities, such as our corporate headquarters, and costs of other goods and services provided by our campuses, including costs of textbooks and laptop computers.
Current wording
Educational services and facilities expense includes costs attributable to the educational activities of our campuses, including: salaries and benefits of faculty, academic administrators and student support personnel, costs of educational supplies and other goods and services, including costs of textbooks and laptops, and rents on leased campus and administrative facilities.
Previous wording
General and administrative expense includes operating expenses associated with, including salaries and benefits of personnel in, corporate and campus administration, marketing, admissions, information technology, financial aid, accounting, human resources, legal and compliance. Other expenses within this expense category include costs of advertising and production of marketing materials and bad debt expense.
Current wording
General and administrative expense includes operating expenses associated with corporate and campus administration, marketing, admissions, information technology, financial aid, accounting, human resources, legal and compliance. Other expenses within this expense category include costs of advertising and production of marketing materials and bad debt expense.
Previous wording
Bad debt expense incurred by each of our segments during the quarters and years to date ended September 30, 2024 and 2023 was as follows (dollars in thousands):
Current wording
Bad debt expense incurred by each of our segments during the quarters ended March 31, 2025 and 2024 was as follows (dollars in thousands):
Previous wording
Bad debt expense for the current quarter increased by 15.0% or $1.1 million and decreased by 19.4% or $5.2 million for the current year to date, as compared to the prior year periods. We regularly evaluate our reserve rates, which includes a quarterly update of our analysis of historical student receivable collectability based on the most recent data available and a review of current known factors which we believe could affect future collectability of our student receivables, such as the number of students that do not complete the financial aid process. We continue to expect quarterly fluctuations in bad debt expense.
Current wording
We regularly evaluate our reserve rates, which includes a quarterly update of our analysis of historical student receivable collectability based on the most recent data available and a review of current known factors which we believe could affect future collectability of our student receivables, such as the number of students that do not complete the financial aid process. We continue to expect quarterly fluctuations in bad debt expense.
Previous wording
The effective tax rate for the quarter and year to date ended September 30, 2024 reflects federal tax credits claimed for the 2023 tax return, which decreased the effective tax rate for the quarter and year to date by 0.4% and 0.1%, respectively. Additionally, the tax effect of stock-based compensation and the release of previously recorded tax reserves reduced the effective tax rate for the quarter and year to date ended September 30, 2024 by 0.2% and 1.4%, respectively. The effective tax rate for the quarter and year to date ended September 30, 2023 was primarily impacted by a $4.5 million favorable discrete adjustment related to the recognition of the tax benefits associated with a previously disclosed prior year ordinary loss attributable to the stock of a worthless subsidiary, which decreased the effective tax rate for the quarter and year to date by 9.3% and 2.6%, respectively. The effective tax rate for the quarter and year to date ended September 30, 2023 reflects federal and state tax credits claimed for the 2022 tax return, which decreased the effective tax rate for the quarter and year to date by 0.6% and 0.2%, respectively. Additionally, the tax effect of stock-based compensation and the release of other previously recorded tax reserves reduced the effective tax rate for the quarter and year to date ended September 30, 2023 by 0.2% and 0.6%, respectively.
Current wording
For the quarter ended March 31, 2025, we recorded a provision for income taxes of $12.8 million or 22.7% as compared to a provision for income taxes of $13.4 million or 25.4% for the prior year quarter. The effective tax rate for the current quarter was benefitted by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which reduced the effective tax rate by 5.5% and 1.3%, respectively. The effective tax rate for the prior year quarter was impacted by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which reduced the effective tax rate by 1.2% and 1.3%, respectively.
Previous wording
For the full year 2024, we expect our effective tax rate to be between 26.0% and 27.0%.
Current wording
For the full year 2025, we expect our effective tax rate to be between 25.5% and 26.5%.
Previous wording
Total student enrollments represent all students who are active as of the last day of the reporting period. Active students are defined as those students who are considered in attendance by participating in class related activities during the previous two weeks. Total student enrollments do not include learners pursuing: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at our universities.
Current wording
Total student enrollments represent all students who are active as of the last day of the reporting period. Active students are defined as those students who are considered in attendance by participating in class related activities during the previous two weeks of the most recent academic term. Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at our universities.
Previous wording
Corporate and Other. This category includes unallocated costs that are incurred on behalf of the entire company. Total Corporate and Other operating loss for the current quarter increased by 20.6% or $1.4 million as compared to the prior year quarter primarily driven by acquisition costs and increased legal fees for the current quarter. The year to date operating loss improved by 18.6% or $5.4 million as compared to the prior year period primarily as a result of lower legal expenses.
Current wording
Corporate and Other. This category includes unallocated costs that are incurred on behalf of the entire company. Total Corporate and Other operating loss for the current quarter increased by 14.7% or $0.8 million as compared to the prior year quarter primarily driven by increased administration costs for the current quarter.
Previous wording
As of September 30, 2024, cash, cash equivalents, restricted cash and available-for-sale short-term investments(“cash balances”) totaled $722.6 million. Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We expect to continue to generate cash during the remainder of 2024. We anticipate that we will be able to satisfy the cash requirements associated with, among other things, our working capital needs, capital expenditures, lease commitments, quarterly dividends payments and pending acquisition through at least the next 12 months primarily with cash generated by operations and existing cash balances.
Current wording
As of March 31, 2025, cash, cash equivalents, restricted cash and available-for-sale short-term investments(“cash balances”) totaled $612.2 million. Restricted cash as of March 31, 2025 was $21.6 million and primarily related to a letter of credit USAHS is required to maintain with the Department of Education. Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We expect to continue to generate cash during the remainder of 2025. We anticipate that we will be able to satisfy the cash requirements associated with, among other things, our working capital needs, capital expenditures, lease commitments and quarterly dividend payments through at least the next 12 months primarily with cash generated by operations and existing cash balances.
Previous wording
We maintain a balanced capital allocation strategy that focuses on maintaining a strong balance sheet and adequate liquidity, while (i) investing in organic projects at our universities, in particular technology-related initiatives which are designed to benefit our students, and (ii) evaluating diverse strategies to enhance stockholder value, including acquisitions, quarterly dividend payments and share repurchases. Ultimately, our goal is to deploy resources in a way that drives long term stockholder value while supporting and enhancing the academic value of our institutions.
Current wording
We maintain a balanced capital allocation strategy that focuses on maintaining a strong balance sheet and adequate liquidity, while (i) investing in organic projects at our universities, in particular technology-related initiatives which are designed to benefit our students, as well as real estate updates, and (ii) evaluating diverse strategies to enhance stockholder value, including acquisitions, quarterly dividend payments and share repurchases. Ultimately, our goal is to deploy resources in a way that drives long term stockholder value while supporting and enhancing the academic value of our institutions.
Previous wording
On February 20, 2024, the Board of Directors of the Company approved a new stock repurchase program for up to $50.0 million which commenced March 1, 2024 and expires September 30, 2025. The new stock repurchase program replaced the previous stock repurchase program. The timing of purchases and the number of shares repurchased under the program will be determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, its assessment of alternative uses of capital, regulatory requirements and other factors.
Current wording
On February 20, 2024, the Board of Directors of the Company approved a stock repurchase program for up to $50.0 million which commenced March 1, 2024 and expires September 30, 2025. The timing of purchases and the number of shares repurchased under the program is determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, its assessment of alternative uses of capital, regulatory requirements and other factors.
Previous wording
During the years to date ended September 30, 2024 and 2023, net cash flows provided by operating activities totaled $144.0 million and $98.8 million, respectively. The increase in net cash flows provided by operating activities for the current year to date as compared to the prior year to datewas primarily driven by timing of working capital payments and Title IV cash drawdowns, as well as certain compensation-related payments.
Current wording
During the quarters ended March 31, 2025 and 2024, net cash flows provided by operating activities totaled $65.1 million and $54.5 million, respectively. The increase in net cash flows from operating activities for the current quarter was driven by increased operating income.
Previous wording
During the year to date ended September 30, 2024, net cash flows provided by investing activities totaled $7.3 million compared to net cash flows used in investing activities of $31.2 million for the prior year to date.
Current wording
During the quarter ended March 31, 2025, net cash flows provided by investing activities totaled $1.2 million compared to net cash flows used in investing activities of $30.8 million for the prior year quarter.
Previous wording
Purchases and Sales of Available-for-Sale Investments. Purchases and sales of available-for-sale investments resulted in a net cash inflow of $10.3 million for the current year to date as compared to a net cash outflow of $26.4 million for the prior year to date.
Current wording
Purchases and Sales of Available-for-Sale Investments. Purchases and sales of available-for-sale investments resulted in a net cash inflow of $2.9 million for the current quarter as compared to a net cash outflow of $29.6 million for the prior year quarter.
Previous wording
Capital Expenditures. Capital expenditures decreased to $3.0 million for the year to date ended September 30, 2024 as compared to $4.8 million for the year to date ended September 30, 2023. For the full year 2024, we expect capital expenditures to be approximately 1.0% of revenue.
Current wording
Capital Expenditures. Capital expenditures increased to $1.7 million for the quarter ended March 31, 2025 as compared to $1.2 million for the quarter ended March 31, 2024. For the full year 2025, we expect capital expenditures to be between 1.0% and 2.0% of revenue.
Previous wording
During the years to date ended September 30, 2024 and 2023, net cash flows used in financing activities totaled $31.5 million and $12.4 million, respectively. Payments to repurchase shares of our common stock were $6.8 million for the year to date ended September 30, 2024 and $2.7 million for the year to date ended September 30, 2023.
Current wording
During the quarters ended March 31, 2025 and 2024, net cash flows used in financing activities totaled $44.4 million and $15.9 million, respectively. Payments to repurchase shares of our common stock were $25.2 million for the quarter ended March 31, 2025 and $6.8 million for the quarter ended March 31, 2024.
Previous wording
Payments of employee tax associated with stock compensation. Payments of employee tax associated with stock compensation were $3.4 million and $2.2 million for the years to date ended September 30, 2024 and 2023, respectively.
Current wording
Payments of employee tax associated with stock compensation. Payments of employee tax associated with stock compensation were $7.5 million and $3.4 million for the quarters ended March 31, 2025 and 2024, respectively.
Previous wording
Payments of cash dividends and dividend equivalents. During the years to date ended September 30, 2024 and 2023, the Company made dividend payments of $23.2 million and $7.2 million, respectively.
Current wording
Payments of cash dividends and dividend equivalents. During the quarters ended March 31, 2025 and 2024, the Company made dividend and dividend equivalent payments of $9.2 million and $7.2 million, respectively.