Adtalem Global Education Inc.

Previous wording

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto included in this report. It should also be read in conjunction with the Cautionary Disclosure Regarding Forward-Looking Statements, the Risk Factors included in or incorporated by reference in this report (see Item 1A. “Risk Factors”), and the Financial Aid and Legislative and Regulatory Requirements disclosures set forth in this report. Adtalem reports on a fiscal year period ending on June 30. Therefore, this Quarterly Report for the quarterly period ended September 30, 2025 is for our first quarter of fiscal year 2026.

Current wording

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto included in this report. It should also be read in conjunction with the Cautionary Disclosure Regarding Forward-Looking Statements, the Risk Factors included in or incorporated by reference in this report (see Item 1A. “Risk Factors”), and the Financial Aid and Legislative and Regulatory Requirements disclosures set forth in this report. Adtalem reports on a fiscal year period ending on June 30. Therefore, this Quarterly Report for the quarterly period ended December 31, 2025 is for our second quarter of fiscal year 2026.

Previous wording

Financial and operational highlights for the first quarter of fiscal year 2026 include:

Current wording

Financial and operational highlights for the second quarter of fiscal year 2026 include:

Previous wording

In July 2025, the U.S. Congress passed the One Big Beautiful Bill Act (“OBBBA”). The U.S. Department of Education (“ED”) has commenced negotiated rulemaking regarding the education-related provisions of OBBBA but has yet to issue necessary enabling regulations and guidance with respect to these provisions. Due to the complexity of OBBBA, including yet to be promulgated implementing regulations (including how to implement the “Do No Harm” provision discussed below) and lack of interpretive guidance, the impact of OBBBA on our institutions and our business is not yet fully known.

Current wording

In July 2025, the U.S. Congress passed the One Big Beautiful Bill Act (“OBBBA”). The U.S. Department of Education (“ED”) has commenced negotiated rulemaking regarding the education-related provisions of OBBBA but has yet to issue necessary enabling regulations and guidance with respect to these provisions. Due to the complexity of OBBBA, including

Previous wording

We continue to analyze the changes made by OBBBA and what effect they may have on Adtalem and our programs. These changes could have a material adverse effect on our business, financial condition, cash flows, or results of operations.

Current wording

We continue to analyze the changes made by OBBBA, including the regulations being promulgated to implement it, and what effect they may have on Adtalem and our programs. These changes could have a material adverse effect on our business, financial condition, cash flows, or results of operations.

Previous wording

Chamberlain revenue increased 6.7%, or $11.3 million, to $179.2 million in the first quarter of fiscal year 2026 compared to the prior year period, driven by an increase in enrollment and higher tuition rates. Increased enrollment was driven by growth in pre-licensure nursing programs, partially offset by a decline in post-licensure nursing programs. Chamberlain is achieving growth by optimizing investments in student enrollment and experience while leveraging scale through a national footprint and providing a full breadth of nursing programs and modalities.

Current wording

Chamberlain revenue increased 1.6%, or $2.8 million, to $183.8 million in the second quarter and increased 4.0%, or $14.1 million, to $363.0 million in the first six months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment in the September session and higher tuition rates. Enrollment increased in pre-licensure nursing programs; however, this growth was offset by a decline in post-licensure nursing program enrollment. Chamberlain is achieving pre-licensure growth by optimizing investments in student enrollment and experience while leveraging scale through a national footprint and providing a full breadth of nursing programs and modalities. Management is focused on optimizing marketing and enrollment operations to address post-licensure enrollment.

Previous wording

Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 17.6%, or $28.4 million, to $190.0 million in the first quarter of fiscal year 2026 compared to the prior year period, driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. Walden’s improved enrollment has been accelerated by investments in student experience and brand along with providing flexibility to working adults through part-time and Tempo Learning® competency-based programs.

Current wording

Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 27.0%, or $46.3 million, to $217.6 million in the second quarter and increased 22.4%, or $74.7 million, to $407.5 million in the first six months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. In addition, Walden recognized one additional week of revenue during the second quarter of fiscal year 2026 compared to the prior year period due to the timing of its academic calendar. Walden’s improved enrollment has been accelerated by investments in student experience and brand along with providing flexibility to working adults through part-time and Tempo Learning® competency-based programs.

Previous wording

Medical and Veterinary revenue increased 5.9%, or $5.2 million, to $93.1 million in the first quarter of fiscal year 2026 compared to the prior year period, driven by an increase in enrollment and higher tuition rates. Management’s focus is on increasing enrollment and renewing operational effectiveness, specifically around academic support and the enrollment experience.

Current wording

Medical and Veterinary revenue increased 6.9%, or $6.6 million, to $102.0 million in the second quarter and increased 6.4%, or $11.7 million, to $195.1 million in the first six months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment and higher tuition rates. Management continues to focus on increasing enrollment and renewing operational effectiveness, specifically around academic support and the enrollment experience.

Previous wording

The cost of educational services expense category includes expenses related to the cost of faculty and staff who support educational operations, facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student

Current wording

The cost of educational services expense category includes expenses related to the cost of faculty and staff who support educational operations, facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student education-related support activities, and the provision for bad debts. The following tables present cost of educational services by segment detailing the changes from the prior year periods (in thousands):

Previous wording

Cost of educational services increased 7.9%, or $14.8 million, to $200.8 million in the first quarter of fiscal year 2026 compared to the prior year period. This cost increase was primarily driven by an increase in labor and other costs to support increased enrollment.

Current wording

Cost of educational services increased 10.1%, or $18.8 million, to $205.4 million in the second quarter and increased 9.0%, or $33.6 million, to $406.2 million in the first six months of fiscal year 2026 compared to the prior year periods. These cost increases were primarily driven by an increase in labor and other costs to support increased enrollment.

Previous wording

As a percentage of revenue, cost of educational services was 43.4% and 44.6% in the first quarter of fiscal year 2026 and 2025, respectively. The decrease in the percentage was primarily the result of revenue growth accompanied with cost efficiencies.

Current wording

As a percentage of revenue, cost of educational services was 40.8% and 42.1% in the second quarter and first six months of fiscal year 2026, respectively, compared to 41.7% and 43.1% in the prior year periods. The decreases in the percentages were primarily the result of revenue growth accompanied by cost efficiencies.

Previous wording

The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization of acquired intangible assets. The following table presents student services and administrative expense by segment detailing the changes from the prior year period (in thousands):

Current wording

The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization of acquired intangible assets. The following tables present student services and administrative expense by segment detailing the changes from the prior year periods (in thousands):

Previous wording

Student services and administrative expense increased 10.5%, or $16.7 million, to $175.7 million in the first quarter of fiscal year 2026 compared to the prior year period. After excluding strategic advisory costs and debt modification costs, student services and administrative expense increased 9.9%, or $15.7 million, in the first quarter of fiscal year 2026 compared to the prior year period. This cost increase was primarily driven by an increase in marketing expense and investments to support growth initiatives.

Current wording

Student services and administrative expense increased 16.5%, or $25.9 million, to $182.8 million in the second quarter and increased 13.5%, or $42.6 million, to $358.5 million in the first six months of fiscal year 2026 compared to the prior year periods. After excluding litigation reserve and strategic advisory costs, student services and administrative expense increased 7.8%, or $12.2 million, in the second quarter of fiscal year 2026 compared to the prior year period. After excluding litigation reserve, strategic advisory costs, and debt modification costs, student services and administrative expense increased 8.8%, or $27.9 million, in the first six months of fiscal year 2026 compared to the prior year period. These increases were primarily driven by an increase in marketing expense and investments to support growth initiatives.

Previous wording

As a percentage of revenue, student services and administrative expense was 38.0% and 38.1% in the first quarter of fiscal year 2026 and 2025, respectively.

Current wording

As a percentage of revenue, student services and administrative expense was 36.3% and 37.1% in the second quarter and first six months of fiscal year 2026, respectively, compared to 35.0% and 36.5% in the prior year periods. The increases in the percentages were primarily the result of an increase in strategic advisory costs in the current year period and a reduction in litigation reserves in the prior year period, partially offset by revenue growth in the current year period. The reduction in litigation reserves in fiscal year 2025 represented a $5.6 million receipt in the second quarter of fiscal year 2025 from a claim made for indemnification under the Membership Interest Purchase Agreement with Laureate Education, Inc.

Previous wording

Restructuring expense was $0.3 million and $2.1 million in the first quarter of fiscal year 2026 and 2025, respectively. This decrease was primarily driven by reduced workforce reductions in the current year period and costs to exit certain course offerings in the prior year period, which were not repeated in the current year period. We continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities.

Current wording

Restructuring expense was $4.1 million and $4.4 million in the second quarter and first six months of fiscal year 2026, respectively, compared to $0.3 million and $2.4 million in the prior year periods. The increases in fiscal year 2026 were primarily driven by workforce reductions. In addition, we continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities.

Previous wording

Consolidated operating income increased 21.7%, or $15.2 million, to $85.5 million in the first quarter of fiscal year 2026 compared to the prior year period. The operating income increase in the first quarter of fiscal year 2026 was primarily driven by an increase in revenue and a decrease in restructuring expense, partially offset by increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.

Current wording

The operating income increases in the second quarter and first six months of fiscal year 2026 were primarily driven by an increase in revenue, partially offset by a reduction in litigation reserves in the prior year period, and increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.

Previous wording

was primarily driven by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives, partially offset by an increase in revenue.

Current wording

Segment adjusted operating income decreased 20.0%, or $8.5 million, to $33.8 million in the second quarter and decreased 15.3%, or $10.7 million, to $59.4 million in the first six months of fiscal year 2026 compared to the prior year periods. The adjusted operating income decreases in the second quarter and first six months of fiscal year 2026 were primarily driven by increases in labor and other costs of educational services, marketing expense, and investments to support growth initiatives, partially offset by an increase in revenue.

Previous wording

Segment adjusted operating income increased 13.9%, or $2.0 million, to $16.8 million in the first quarter of fiscal year 2026 compared to the prior year period. The adjusted operating income increase in the first quarter of fiscal year 2026 was primarily driven by an increase in revenue, partially offset by increases in investments to support initiatives to drive growth and investments in academic support.

Current wording

Segment adjusted operating income increased 16.3%, or $3.5 million, to $25.0 million in the second quarter and increased 15.3%, or $5.6 million, to $41.8 million in the first six months of fiscal year 2026 compared to the prior year periods. The adjusted operating income increases in the second quarter and first six months of fiscal year 2026 were primarily driven by an increase in revenue, partially offset by increases in investments to support initiatives to drive growth and investments in academic support.

Previous wording

Interest expense was $11.1 million and $14.5 million in the first quarter of fiscal year 2026 and 2025, respectively. This decrease was primarily driven by lower interest expense on our Term Loan B due to decreased borrowings and a lower interest rate, and lower balances on our outstanding letters of credit (as discussed in Note 13 “Debt” to the Consolidated Financial Statements).

Current wording

Interest expense was $10.9 million and $22.0 million in the second quarter and first six months of fiscal year 2026, respectively, compared to $13.9 million and $28.4 million in the prior year periods. The interest expense decreases in the second quarter and first six months of fiscal year 2026 were primarily driven by lower interest expense on our Term Loan B due to decreased borrowings and a lower interest rate, and lower outstanding letters of credit balances during the period (as discussed in Note 13 “Debt” to the Consolidated Financial Statements).

Previous wording

Our effective tax rate from continuing operations was 20.6% and 20.8% in the first quarter of fiscal year 2026 and 2025, respectively. The effective tax rate for the first quarter of fiscal year 2026 decreased compared to the prior year period primarily due to an increase in tax benefits on stock-based compensation, partially offset by a limitation of tax benefits on certain executive compensation.

Current wording

Our effective tax rate from continuing operations was 25.2% and 23.2% in the second quarter and first six months of fiscal year 2026, respectively, and 22.8% and 22.0% in the second quarter and first six months of fiscal year 2025, respectively. The effective tax rate for the second quarter of fiscal year 2026 increased compared to the prior year period primarily due to an increase in the limitation of tax benefits on certain executive compensation, partially offset by a decrease in the percentage of earnings from operations in higher taxed jurisdictions. The effective tax rate for the first six months of fiscal year 2026 increased compared to the prior year period primarily due to an increase in the limitation of tax benefits on certain executive compensation, partially offset by a decrease in the percentage of earnings from operations in higher taxed jurisdictions and an increase in tax benefits on stock-based compensation.

Previous wording

In July 2025, OBBBA was signed into law, which introduced substantial changes to U.S. tax provisions. The most relevant provisions to Adtalem for fiscal year 2026 include allowing accelerated tax deductions for qualified property and research and development expenditures. The impacts of OBBBA were not material to the income tax provision for the first quarter of fiscal year 2026.

Current wording

In July 2025, OBBBA was signed into law, which introduced substantial changes to U.S. tax provisions. The most relevant provisions to Adtalem for fiscal year 2026 include allowing accelerated tax deductions for qualified property and research and development expenditures. The impacts of OBBBA were not material to the income tax provision for the second quarter and six months ended December 31, 2025.

Previous wording

We had income from discontinued operations of $0.8 million in the first quarter of fiscal year 2026 and loss from discontinued operations of $0.1 million in the first quarter of fiscal year 2025. We continue to incur costs associated with ongoing litigation and settlements related to divestitures, which are classified as expenses within discontinued operations.

Current wording

We had income from discontinued operations of $0.2 million and $1.0 million in the second quarter and first six months of fiscal year 2026, respectively, compared to $4.7 million and $4.6 million in the prior year periods. We recorded income within discontinued operations related to the DeVry University earn-out of $0.5 million and $7.0 million in the second quarter and first six months of fiscal year 2026 and 2025, respectively. In addition, we continue to incur costs associated with ongoing litigation and settlements related to divestitures, which are classified as expenses within discontinued operations.

Previous wording

institutions and their students participate in a wide range of financial aid programs, including U.S. federal financial aid, state financial aid, Canadian financial aid, private loan programs, tax-favored programs, Adtalem-provided financial assistance, and employer-provided financial assistance. In the U.S., the Higher Education Act (as reauthorized, the “HEA”) guides the federal government’s support of postsecondary education. Changes to financial aid programs that restrict student eligibility or reduce funding levels could have a material adverse effect on Adtalem’s business, financial condition, results of operations, and cash flows. See Item 1A. “Risk Factors” in our 2025 Form 10-K for a discussion of student financial aid related risks.

Current wording

Like other higher education institutions, Adtalem’s institutions are dependent upon the timely receipt of federal financial aid funds. All public financial aid programs are subject to political and governmental budgetary considerations. Adtalem’s institutions and their students participate in a wide range of financial aid programs, including U.S. federal financial aid, state financial aid, Canadian financial aid, private loan programs, tax-favored programs, Adtalem-provided financial assistance, and employer-provided financial assistance. In the U.S., the Higher Education Act (as reauthorized, the “HEA”) guides the federal government’s support of postsecondary education. Changes to financial aid programs that restrict student eligibility or reduce funding levels could have a material adverse effect on Adtalem’s business, financial condition, results of operations, and cash flows. See Item 1A. “Risk Factors” in our 2025 Form 10-K for a discussion of student financial aid related risks.

Previous wording

Institutions must pass an ED financial responsibility test, also known as a “composite score,” to maintain eligibility to participate in Title IV aid programs. For Adtalem’s institutions, this test is calculated at the consolidated Adtalem level. Applying various financial elements from annual audited financial statements, the score is a composite of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A score greater than or equal to 1.5 indicates the institution is considered financially responsible. A score less than 1.5 but greater than or equal to 1.0 is considered financially responsible but requires additional oversight. For example, an institution with a score in this range is subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is not considered financially responsible but may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year).

Current wording

Institutions must pass an ED financial responsibility test, also known as a “composite score,” to maintain eligibility to participate in Title IV aid programs. For Adtalem’s institutions, this test is calculated at the consolidated Adtalem level. Applying various financial elements from annual audited financial statements, the score is a composite of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A score greater than or equal to 1.5 indicates the institution is considered financially responsible. A score less than 1.5 but greater than or equal to 1.0 is considered financially responsible but requires additional oversight. For example, an institution with a score in this range is subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is not considered financially responsible but may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject

Previous wording

Prior to fiscal year 2022, Adtalem’s composite score was greater than 1.5. However, on September 25, 2023, ED notified Adtalem that its fiscal year 2022 composite score had declined to 0.2. As previously disclosed, this was expected due to the acquisition of Walden and other transactions. ED advised that Adtalem’s five institutions will be permitted to continue to participate in Title IV under provisional certifications with heightened cash monitoring and continued reporting. Management does not believe these conditions will have a material adverse effect on Adtalem’s operations. At ED’s request, Adtalem maintains two surety-backed letters of credit in favor of ED totaling $179.0 million representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2024. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.

Current wording

Prior to fiscal year 2022, Adtalem’s composite score was greater than 1.5. However, on September 25, 2023, ED notified Adtalem that its fiscal year 2022 composite score had declined to 0.2. As previously disclosed, this was expected due to the acquisition of Walden and other transactions. ED advised that Adtalem’s five institutions will be permitted to continue to participate in Title IV under provisional certifications with heightened cash monitoring and continued reporting. Management does not believe these conditions will have a material adverse effect on Adtalem’s operations. At ED’s request, Adtalem maintains three surety-backed letters of credit in favor of ED totaling $202.6 million representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2025. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.

Previous wording

The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution participating in Title IV programs must be certified to participate through a PPA and certification must be periodically renewed. Such recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in control. Institutions that violate certain ED Title IV regulations may lose eligibility to participate in Title IV programs or may only continue participation under provisional certification. ED may place an institution on provisional certification status if it finds that the institution does not fully satisfy all of the eligibility and certification standards and in certain other circumstances, such as when an institution is certified for the first time or undergoes a change in control. During the period of provisional certification, the institution must comply with any additional conditions included in the institution’s PPA. In addition, ED may more closely review an institution that is provisionally certified if it applies for recertification or approval to open a new location, add an

Current wording

The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution participating in Title IV programs must be certified to participate through a PPA and certification must be periodically renewed. Such recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in control. Institutions that violate certain ED Title IV regulations may lose eligibility to participate in Title IV programs or may only continue participation under provisional certification. ED may place an institution on provisional certification status if it finds that the institution does not fully satisfy all of the eligibility and certification standards and in certain other circumstances, such as when an institution is certified for the first time or undergoes a change in control. During the period of provisional certification, the institution must comply with any additional conditions included in the institution’s PPA. In addition, ED may more closely review an institution that is provisionally certified if it applies for recertification or approval to open a new location, add an educational program, acquire another institution, or make any other significant change. Students attending provisionally certified institutions remain eligible to receive Title IV program funds. Provisional certification status also carries fewer due process protections than full certification. If ED determines that a provisionally certified institution is unable to meet its responsibilities under its PPA, it may seek to revoke the institution’s certification to participate in Title IV programs without advance notice or opportunity for the institution to challenge the action.

Previous wording

ED provisionally recertified AUC and RUSM’s Title IV PPAs through March 31, 2025. Complete applications for AUC and RUSM’s PPA recertification were timely submitted to ED. ED has provisionally recertified RUSVM’s Title IV PPA through March 31, 2027.

Current wording

ED provisionally recertified AUC and RUSM’s Title IV PPAs through March 31, 2025. Materially complete applications for AUC and RUSM’s PPA recertification were timely submitted to ED. ED has provisionally recertified RUSVM’s Title IV PPA through March 31, 2027.

Previous wording

Walden, AUC, RUSM, and RUSVM’s provisional PPAs included financial requirements, such as letter of credit, heightened cash monitoring, and additional reporting. We do not believe these requirements will have a material effect on Adtalem’s financial position or results of operations. With the approval of its change in ownership, Walden has the ability to request ED approval for new programs.

Current wording

Walden, AUC, RUSM, and RUSVM’s provisional PPAs included financial requirements, such as letter of credit and heightened cash monitoring, and AUC, RUSM, and RUSVM’s provisional PPAs require additional reporting. We do not believe these requirements will have a material effect on Adtalem’s financial condition or results of operations. With the approval of its change in ownership, Walden has the ability to request ED approval for new programs.

Previous wording

The HEA requires certificate programs at all Title IV institutions and degree programs at proprietary Title IV institutions to prepare students for gainful employment in a recognized occupation. In October 2023, ED released new Financial Value Transparency (“FVT”) and Gainful Employment (“GE”) rules effective July 1, 2024. GE programs must meet a debt-to-earnings test in which graduates’ annual debt payments must not exceed 8% of their annual earnings or 20% of their discretionary earnings. GE programs must also meet an earnings premium test in which graduates’ earnings must exceed those of a typical high school graduate. Under the regulation, programs that fail either metric must provide warnings to students and prospective students that the program is at risk of losing Title IV eligibility and programs that fail the same measure in two out of three consecutive years lose Title IV eligibility. The GE regulation also includes a transparency framework in which debt-to-earnings, earnings premium, and a wide range of other program outcomes for all Title IV programs are disclosed on a website hosted by ED. Because there are many factors and unknowns, including the earnings of program graduates, Adtalem is reviewing the regulation to determine what impact, if any, the regulation will have on its programs. In addition, multiple parties sought to block enforcement of the FVT/GE rule under the Administrative Procedure Act and other legal theories. On October 2, 2025, a federal district judge ruled in ED’s favor, upholding the FVT/GE rules. The decision is subject to appeal. On February 14, 2025, ED extended the institutional reporting deadline for 2023-2024 and earlier award years until September 30, 2025. The reporting deadline for the 2024-2025 award year was October 1, 2025. On July 25, 2025, ED announced its intent to establish negotiated rulemaking committees in advance of issuing draft regulations on various topics, including FVT/GE. The negotiating committee addressing FVT/GE is scheduled to meet in December 2025 and January 2026. ED may propose to amend or rescind the FVT/GE rules.

Current wording

The HEA requires certificate programs at all Title IV institutions and degree programs at proprietary Title IV institutions to prepare students for gainful employment in a recognized occupation. In October 2023, ED released new Financial Value Transparency (“FVT”) and Gainful Employment (“GE”) rules effective July 1, 2024. GE programs must meet a debt-to-earnings test in which graduates’ annual debt payments must not exceed 8% of their annual earnings or 20% of their discretionary earnings. GE programs must also meet an earnings premium test in which graduates’ earnings must exceed those of a typical high school graduate. Under the regulation, programs that fail either metric must provide warnings to students and prospective students that the program is at risk of losing Title IV eligibility and programs that fail the same measure in two out of three consecutive years lose Title IV eligibility. The GE regulation also includes a transparency framework in which debt-to-earnings, earnings premium, and a wide range of other program outcomes for all Title IV programs are disclosed on a website hosted by ED. Because there are many factors and unknowns, including the earnings of program graduates, Adtalem is reviewing the regulation to determine what impact, if any, the regulation will have on its programs. In addition, multiple parties sought to block enforcement of the FVT/GE rule under the Administrative Procedure Act and other legal theories. On October 2, 2025, a federal district judge ruled in ED’s favor, upholding the FVT/GE rules. The decision is subject to appeal. On February 14, 2025, ED extended the institutional reporting deadline for 2023-2024 and earlier award years until September 30, 2025. The reporting deadline for the 2024-2025 award year was October 1, 2025. On July 25, 2025, ED announced its intent to establish negotiated rulemaking committees in advance of issuing draft regulations on various topics, including FVT/GE. The negotiating committee addressing FVT/GE met in December 2025 and January 2026. ED’s initial proposal includes amendments to the FVT/GE rules including elimination of debt to earnings.

Previous wording

The recently enacted Do No Harm provisions of OBBBA provide that an undergraduate program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA are no greater than earnings of a population with a high school diploma, and a graduate or professional program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA and its implementing regulations are no greater than the earnings of a population with a bachelor’s degree, in each case for two years in a three-year period. These provisions are

Current wording

The recently enacted Do No Harm provisions of OBBBA provide that an undergraduate program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA are no greater than earnings of a population with a high school diploma, and a graduate or professional program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA and its implementing regulations are no greater than the earnings of a population with a bachelor’s degree, in each case for two years in a three-year period. These provisions are applicable to all Title IV participating institutions. Regulations to define how Do No Harm will be implemented, including the definition of completer, the populations to be used to measure the difference between earnings of completers and earnings of others, have yet to be promulgated. On July 25, 2025, ED announced its intent to establish negotiated rulemaking committees to implement Do No Harm and other provisions of OBBBA. The negotiating committee met in December 2025 and January 2026.

Previous wording

An ED regulation known as the 90/10 Rule affects only proprietary institutions participating in Title IV programs, including each of Adtalem’s institutions. An institution that does not meet the 90% threshold for two consecutive fiscal years loses its eligibility to participate in Title IV programs. Previously, an institution could not derive more than 90% of its revenue on a cash basis from Title IV financial aid funds. In March 2021, the American Rescue Plan Act amended the 90/10 calculation to require no more than 90% of revenue at proprietary institutions be derived from any federal education assistance funds, including but not limited to previously excluded U.S. Department of Veterans Affairs benefits and Department of Defense tuition assistance funds. This change was subject to negotiated rulemaking with the final rule published by ED in October 2022. The amended rule applies to an institution’s fiscal years beginning on or after January 1, 2023. For Adtalem’s institutions, the updated 90/10 rule is therefore effective with the calculation for fiscal year 2024. The following table shows the 90/10 rates for each Adtalem institution for fiscal year 2024 based on the new 90/10 rules and fiscal year 2023 based on the old 90/10 rules that were still in effect for that period. Final rates for fiscal year 2025 are not yet available. We are also providing a consolidated rate for Adtalem even though it is not subject to 90/10 requirements.

Current wording

An ED regulation known as the 90/10 Rule affects only proprietary institutions participating in Title IV programs, including each of Adtalem’s institutions. Under this regulation, an institution that derives more than 90% of its revenue on a cash basis from Title IV student financial assistance programs in two consecutive fiscal years loses eligibility to participate in Title IV programs. The following table shows the 90/10 rates for each Adtalem institution for fiscal year 2025 and fiscal year 2024. We are also providing a consolidated rate for Adtalem even though it is not subject to 90/10 requirements.

Previous wording

Adtalem’s consolidated cash and cash equivalents balance of $264.7 million and $199.6 million as of September 30, 2025 and June 30, 2025, respectively, included cash and cash equivalents held at Adtalem’s international operations of

Current wording

Adtalem’s consolidated cash and cash equivalents balance of $56.3 million and $199.6 million as of December 31, 2025 and June 30, 2025, respectively, included cash and cash equivalents held at Adtalem’s international operations of $5.7 million and $22.9 million as of December 31, 2025 and June 30, 2025, respectively, which is available to Adtalem for general corporate purposes.

Previous wording

Net cash provided by operating activities from continuing operations in the three months ended September 30, 2025 increased $41.1 million to $130.6 million, compared to $89.6 million in the prior year period. This increase was primarily driven by a $15.2 million increase in operating income mainly due to increased revenue from students, a $5.4 million decrease in interest payments, a $3.8 million decrease in payments to vendors, and a $2.9 million increase in cash collected from students mainly related to future performance obligations.

Current wording

Net cash provided by operating activities from continuing operations in the six months ended December 31, 2025 increased $94.2 million to $160.1 million, compared to $66.0 million in the prior year period. This increase was primarily driven by a $81.0 million increase in cash collected from students, a $22.9 million decrease in net legal settlement payments, and a $9.2 million decrease in interest payments, partially offset by a $11.7 million increase in payments to employees and vendors and a $6.2 million increase in income tax payments.

Previous wording

Net cash used in investing activities in the three months ended September 30, 2025 and 2024 was $16.0 million and $9.5 million, respectively, and was primarily driven by capital expenditures of $16.0 million and $10.4 million, respectively. Capital expenditures for fiscal year 2026 are expected to include information technology investments and new campus development at Chamberlain.

Current wording

Net cash used in investing activities in the six months ended December 31, 2025 and 2024 was $35.6 million and $20.2 million, respectively, and was primarily driven by capital expenditures of $30.6 million and $21.1 million, respectively. In addition, during the six months ended December 31, 2025 we made a $5.0 million minority investment in a business. Capital expenditures for fiscal year 2026 are expected to include information technology investments and new campus development at Chamberlain.

Previous wording

Net cash used in financing activities in the three months ended September 30, 2025 was $49.5 million, primarily driven by employee taxes paid on withholding shares of $39.1 million. Net cash used in financing activities in the three months ended September 30, 2024 was $34.1 million, primarily driven by share repurchases of $33.2 million.

Current wording

Net cash used in financing activities in the six months ended December 31, 2025 was $267.2 million, primarily driven by share repurchases of $172.4 million, net repayments under long-term debt obligations of $50.0 million, and employee taxes paid on withholding shares of $42.0 million. Net cash used in financing activities in the six months ended December 31, 2024 was $75.9 million, primarily driven by share repurchases of $74.1 million.

Previous wording

On May 6, 2025, we announced that the Board authorized Adtalem’s fifteenth share repurchase program, which allows Adtalem to repurchase up to $150.0 million of its common stock through May 6, 2028. As of September 30, 2025, $142.4 million of authorized share repurchases remained under the fifteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 14 “Share Repurchases” to the Consolidated Financial Statements for additional information on our share repurchase programs.

Current wording

2025, $727.5 million of authorized share repurchases remained under the sixteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 14 “Share Repurchases” to the Consolidated Financial Statements for additional information on our share repurchase programs.

Previous wording

Long-Term Debt– As of September 30, 2025, we have principal balances of $405.0 million of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028 and $153.3 million of Term Loan B under our Credit Facility, which matures on August 12, 2028 and requires interest payments. As a result of previous Term Loan B prepayments, we are no longer required to make quarterly principal installment payments on the Term Loan B. On October 29, 2025, we made an additional prepayment of $50.0 million on the Term Loan B, reducing the principal balance on the Term Loan B to $103.3 million. See Note 13 “Debt” to the Consolidated Financial Statements for additional information on the Notes and our Credit Facility.

Current wording

Long-Term Debt– As of December 31, 2025, we have principal balances of $405.0 million of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028 and $103.3 million of Term Loan B under our Credit Facility, which matures on August 12, 2028 and requires interest payments. As a result of previous Term Loan B prepayments, we are no longer required to make quarterly principal installment payments on the Term Loan B. See Note 13 “Debt” to the Consolidated Financial Statements for additional information on the Notes and our Credit Facility.

Previous wording

As of September 30, 2025, Adtalem had $179.0 million of letters of credit outstanding in favor of ED. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.

Current wording

As of December 31, 2025, Adtalem had $202.6 million of letters of credit outstanding in favor of ED. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.

Previous wording

As of September 30, 2025, Adtalem had posted $61.9 million of surety bonds to satisfy certain state regulatory requirements for licensure.

Current wording

As of December 31, 2025, Adtalem had posted $74.9 million of surety bonds to satisfy certain state regulatory requirements for licensure.

Previous wording

Operating Lease Obligations– We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheets. In addition, we sublease certain space to third

Current wording

Operating Lease Obligations– We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheets. In addition, we sublease certain space to third parties, which partially offsets the lease obligations at these facilities. See Note 11 “Leases” to the Consolidated Financial Statements for additional information on our lease obligations.

Previous wording

We believe our cash flows from operations, and our existing cash balances, combined with availability under our credit facility and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending, and anticipated stock repurchases for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside our control. Depending on our liquidity levels, conditions in the capital markets, and other factors, we may from time to time consider the issuance of debt, equity, or other securities, the proceeds of which could provide additional liquidity for our operations.

Current wording

We believe our cash flows from operations, and our existing cash balances, combined with availability under our credit facility and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending, and anticipated stock repurchases for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside our control.