Adtalem Global Education Inc

Previous wording

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, 2024 is for our second quarter of fiscal year 2025.

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 March 31, 2025 is for our third quarter of fiscal year 2025.

Previous wording

Financial and operational highlights for the second quarter of fiscal year 2025 include:

Current wording

Financial and operational highlights for the third quarter of fiscal year 2025 include:

Previous wording

Chamberlain revenue increased 17.9%, or $27.4 million, to $181.0 million in the second quarter and increased 17.8%, or $52.8 million, to $348.9 million in the first six months of fiscal year 2025 compared to the prior year periods, driven by an increase in enrollment and higher tuition rates. Enrollment has improved in all graduate and doctoral programs, the undergraduate Bachelor of Science in Nursing (“BSN”) programs, and the Registered Nurse to Bachelor of Science in Nursing (“RN-BSN”) online degree program. 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 13.1%, or $22.3 million, to $192.6 million in the third quarter and increased 16.1%, or $75.0 million, to $541.5 million in the first nine months of fiscal year 2025 compared to the prior year periods, driven by an increase in enrollment and higher tuition rates. Enrollment improvement has primarily been driven by the undergraduate Bachelor of Science in Nursing (“BSN”) degree and the Master of Science in Nursing (“MSN”) degree 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.

Previous wording

Tuition rates in the current fiscal year increased compared to the prior fiscal year for the following programs: BSN onsite and online degree, RN-BSN online degree, Master of Science in Nursing (“MSN”) online degree, Family Nurse Practitioner (“FNP”) online degree, Doctor of Nursing Practice (“DNP”) online degree program, and Master of Public Health (“MPH”) online degree. The average increase across all these programs was approximately 4% from the prior year.

Current wording

Tuition rates in the current fiscal year increased compared to the prior fiscal year for the BSN onsite and online degree, MSN online degree, and Doctor of Nursing Practice (“DNP”) degree programs. The average increase across all these programs was approximately 4.6% from the prior year.

Previous wording

Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 16.7%, or $24.5 million, to $171.3 million in the second quarter and increased 15.4%, or $44.4 million, to $332.8 million in the first six months of fiscal year 2025 compared to the prior year periods, 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 18.5%, or $27.8 million, to $178.4 million in the third quarter and increased 16.4%, or $72.2 million, to $511.2 million in the first nine months of fiscal year 2025 compared to the prior year periods, 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.

Previous wording

Tuition rates for Walden programs, including general education are charged on a per credit hour basis that varies based on the nature of the program. For other programs such as those with a subscription-based learning modality, tuition is charged on a per term basis. Students are also charged program and clinical fees depending on the specific programs. Some

Current wording

Tuition rates for Walden programs, including general education are charged on a per credit hour basis that varies based on the nature of the program. For other programs such as those with a subscription-based learning modality, tuition is charged on a per term basis. Students are also charged program and clinical fees depending on the specific programs. Some programs require students to attend residencies, skills labs, and pre-practicum labs, for which tuition is charged per event. In most programs, these tuition rates, event charges, and fees increased by approximately 2% from the prior year.

Previous wording

Medical and Veterinary revenue increased 2.8%, or $2.6 million, to $95.4 million in the second quarter and increased 3.3%, or $5.9 million, to $183.4 million in the first six months of fiscal year 2025 compared to the prior year periods, driven by tuition rate increases at all three institutions in this segment, partially offset by decreased enrollment at RUSM. Management’s focus is on increasing enrollment and renewing operational effectiveness, specifically around academic support, the enrollment experience, and marketing.

Current wording

Medical and Veterinary revenue increased 3.6%, or $3.3 million, to $95.0 million in the third quarter and increased 3.4%, or $9.2 million, to $278.4 million in the first nine months of fiscal year 2025 compared to the prior year periods, driven by tuition rate increases at all three institutions in this segment. Management’s focus is on increasing enrollment and renewing operational effectiveness, specifically around academic support and the enrollment experience.

Previous wording

Cost of educational services increased 8.5%, or $14.6 million, to $186.6 million in the second quarter and increased 9.4%, or $31.9 million, to $372.6 million in the first six months of fiscal year 2025 compared to the prior year periods. These cost increases were primarily driven by an increase in labor and other costs to support increased enrollment and an increase in the provision for bad debts.

Current wording

Cost of educational services increased 14.0%, or $24.5 million, to $199.9 million in the third quarter and increased 10.9%, or $56.5 million, to $572.5 million in the first nine months of fiscal year 2025 compared to the prior year periods. These cost increases were primarily driven by an increase in labor and other costs to support increased enrollment and an increase in the provision for bad debts.

Previous wording

As a percentage of revenue, cost of educational services was 41.7% and 43.1% in the second quarter and first six months of fiscal year 2025, respectively, compared to 43.8% and 44.7% in the prior year periods. The decreases in the percentages were primarily the result of revenue growth accompanied with cost efficiencies.

Current wording

As a percentage of revenue, cost of educational services was 42.9% and 43.0% in the third quarter and first nine months of fiscal year 2025, respectively, compared to 42.5% and 43.9% in the prior year periods. The increase in the percentage for the third quarter of fiscal year 2025 was primarily the result of an increase in the provision for bad debts, partially offset by revenue growth accompanied with cost efficiencies. The decrease in the percentage for the first nine months of fiscal year 2025 was primarily the result of revenue growth accompanied with cost efficiencies, partially offset by an increase in the provision for bad debts.

Previous wording

Student services and administrative expense increased 0.8%, or $1.3 million, to $156.9 million in the second quarter and decreased 1.8%, or $5.7 million, to $316.0 million in the first six months of fiscal year 2025 compared to the prior year periods. Excluding amortization of acquired intangible assets, litigation reserves, and loss on assets held for sale, student services and administrative expense increased 9.0%, or $14.0 million, in the second quarter of fiscal year 2025 compared to the prior year period. Excluding amortization of acquired intangible assets, litigation reserves, loss on assets held for sale, and debt modification costs, student services and administrative expense increased 10.2%, or $32.7 million, in the first six months of fiscal year 2025 compared to the prior year period. These increases were primarily driven by an increase in marketing expense and investments to support growth initiatives.

Current wording

debt modification costs, student services and administrative expense increased 8.5%, or $13.3 million, in the third quarter of fiscal year 2025 compared to the prior year period. After excluding amortization of acquired intangible assets, litigation reserves, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs, student services and administrative expense increased 9.6%, or $45.9 million, in the first nine months of fiscal year 2025 compared to the prior year period. These increases were primarily driven by an increase in marketing expense, investments to support growth initiatives, and stock-based compensation.

Previous wording

As a percentage of revenue, student services and administrative expense was 35.0% and 36.5% in the second quarter and first six months of fiscal year 2025, respectively, compared to 39.6% and 42.2% in the prior year periods. The decreases in the percentage were primarily the result of revenue growth accompanied by decreases in amortization of acquired intangible assets and litigation reserves.

Current wording

As a percentage of revenue, student services and administrative expense was 37.6% and 36.9% in the third quarter and first nine months of fiscal year 2025, respectively, compared to 38.0% and 40.7% in the prior year periods. The decreases in the percentages were primarily the result of revenue growth accompanied by decreases in amortization of acquired intangible assets and litigation reserves, partially offset by increases in asset impairments and strategic advisory costs.

Previous wording

Restructuring expense in the second quarter and first six months of fiscal year 2025 was $0.3 million and $2.4 million, respectively, compared to $0.1 million and $0.7 million in the prior year periods. These increases were primarily driven by workforce reductions, costs to exit certain course offerings, and prior real estate consolidations at Adtalem’s home office in the second quarter and first six months of fiscal year 2025. We continue to incur restructuring expense or reversals related to exited leased space from previous restructuring activities.

Current wording

Restructuring expense in the third quarter and first nine months of fiscal year 2025 was $0.5 million and $2.9 million, respectively, compared to $0.5 million and $1.2 million in the prior year periods. The increase in the first nine months of fiscal year 2025 was primarily driven by workforce reductions and costs to exit certain course offerings. We continue to incur restructuring expense or reversals related to exited leased space from previous restructuring activities.

Previous wording

Business integration expense in the second quarter and first six months of fiscal year 2024 was $6.9 million and $12.2 million, respectively. We did not incur business integration expense during the second quarter and first six months of fiscal year 2025. In the prior year, we incurred costs associated with integrating Walden into Adtalem. In addition, we initiated transformation initiatives to accelerate growth and organizational agility and certain costs relating to the transformation were included in business integration expense in the Consolidated Statements of Income.

Current wording

Business integration expense in the third quarter and first nine months of fiscal year 2024 was $18.5 million and $30.6 million, respectively. We did not incur business integration expense during the third quarter and first nine months of fiscal year 2025. In the prior year, we incurred costs associated with integrating Walden into Adtalem. In addition, we initiated transformation initiatives to accelerate growth and organizational agility and certain costs relating to the transformation were included in business integration expense in the Consolidated Statements of Income.

Previous wording

Consolidated operating income increased 77.2%, or $45.3 million, to $103.9 million in the second quarter and increased 100.6%, or $87.3 million, to $174.1 million in the first six months of fiscal year 2025 compared to the prior year periods. The operating income increases in the second quarter and first six months of fiscal year 2025 were primarily driven by an increase in revenue and decreases in business integration expense, amortization of acquired intangible assets, litigation reserve, and loss on assets held for sale, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, and provision for bad debts. The decreases in amortization of acquired intangible assets are driven by the decreases in amortization relating to the Walden student relationships intangible asset, which was fully amortized as of June 30, 2024. The decrease in litigation reserves includes

Current wording

income increase in the first nine months of fiscal year 2025 was primarily driven by an increase in revenue and decreases in business integration expense, amortization of acquired intangible assets, and litigation reserves, partially offset by increases in asset impairments, strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, the provision for bad debts, and stock-based compensation. The decreases in amortization of acquired intangible assets are driven by the decreases in amortization relating to the Walden student relationships intangible asset, which was fully amortized as of June 30, 2024. The decrease in litigation reserves includes 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

Medical and Veterinary operating income decreased 2.5%, or $0.6 million, to $21.5 million in the second quarter and decreased 0.7%, or $0.2 million, to $36.1 million in the first six months of fiscal year 2025 compared to the prior year periods. Segment adjusted operating income decreased 2.6%, or $0.6 million, to $21.5 million in the second quarter and decreased 0.9%, or $0.3 million, to $36.2 million in the first six months of fiscal year 2025 compared to the prior year periods. The adjusted operating income decreases in the second quarter and first six months of fiscal year 2025 were primarily driven by increases in investments to support initiatives to drive future growth and provision for bad debts, partially offset by increases in revenue.

Current wording

Medical and Veterinary operating income decreased 21.8%, or $5.0 million, to $17.8 million in the third quarter and decreased 8.8%, or $5.2 million, to $53.9 million in the first nine months of fiscal year 2025 compared to the prior year periods. Segment adjusted operating income decreased 21.9%, or $5.0 million, to $17.9 million in the third quarter and decreased 9.0%, or $5.4 million, to $54.2 million in the first nine months of fiscal year 2025 compared to the prior year periods. The adjusted operating income decreases in the third quarter and first nine months of fiscal year 2025 were primarily driven by increases in investments to support initiatives to drive future growth, investments in academic support, and the provision for bad debts, partially offset by increases in revenue.

Previous wording

Interest expense in the second quarter and first six months of fiscal year 2025 was $13.9 million and $28.4 million, respectively, compared to $16.7 million and $32.4 million in the prior year periods. The interest expense decreases in the second quarter and first six months of fiscal year 2025 was primarily driven by lower interest expense on our Term Loan B due to decreased borrowings and a lower interest rate (as discussed in Note 13 “Debt” to the Consolidated Financial Statements).

Current wording

Interest expense in the third quarter and first nine months of fiscal year 2025 was $13.1 million and $41.5 million, respectively, compared to $16.6 million and $48.9 million in the prior year periods. The interest expense decreases in the third quarter and first nine months of fiscal year 2025 was primarily driven by lower interest expense on our Term Loan B due to decreased borrowings and a lower interest rate (as discussed in Note 13 “Debt” to the Consolidated Financial Statements).

Previous wording

Other income, net in the second quarter and first six months of fiscal year 2025 was income of $2.2 million and income of $4.9 million, respectively, compared to income of $3.6 million and income of $5.8 million in the prior year periods. These decreases were primarily the result of decreases in interest income and investment income.

Current wording

Other income, net in the third quarter and first nine months of fiscal year 2025 was income of $1.9 million and income of $6.8 million, respectively, compared to income of $2.9 million and income of $8.6 million in the prior year periods. These decreases were primarily driven by decreases in interest income and investment income.

Previous wording

Our effective income tax rate (“ETR”) from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including tax on global intangible low-taxed income (“GILTI”), limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, changes in uncertain tax positions, and tax benefits on stock-based compensation awards.

Current wording

Our effective income tax rate from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including tax on global intangible low-taxed income (“GILTI”), limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, changes in uncertain tax positions, and tax benefits on stock-based compensation awards.

Previous wording

Our effective tax rate from continuing operations was 22.8% and 22.0% in the three and six months ended December 31, 2024, respectively, and 17.1% and 17.5% in the three and six months ended December 31, 2023, respectively. The effective tax rate for the three and six months ended December 31, 2024 increased compared to the prior year periods primarily due to an increase in the percentage of earnings from operations in higher taxed jurisdictions and a limitation of tax benefits on certain executive compensation.

Current wording

Our effective tax rate from continuing operations was 23.4% and 22.5% in the three and nine months ended March 31, 2025, respectively, and 22.1% and 19.5% in the three and nine months ended March 31, 2024, respectively. The effective tax rate for the three and nine months ended March 31, 2025 increased compared to the prior year periods primarily due to an increase in the percentage of earnings from operations in higher taxed jurisdictions and a limitation of tax benefits on certain executive compensation.

Previous wording

Income from discontinued operations in the second quarter and first six months of fiscal year 2025 was $4.7 million and $4.6 million, respectively, compared to $2.2 million and $0.9 million in the prior year periods. We recorded income within discontinued operations related to the DeVry University earn-out of $7.0 million and $5.5 million in the second quarter and first six months of fiscal year 2025 and 2024, respectively. In addition, we continue to incur costs associated with ongoing litigation and settlements related to the DeVry University divestiture, which was completed during fiscal year 2019, and are classified as expense within discontinued operations.

Current wording

We had income from discontinued operations in the third quarter of fiscal year 2025 of $0.04 million and income of $4.6 million in the first nine months of fiscal year 2025, compared to a loss in the third quarter of fiscal year 2024 of $0.6 million and income of $0.2 million in the first nine months of fiscal year 2024. We recorded income within discontinued operations related to the DeVry University earn-out of $7.0 million and $5.5 million in the first nine months of fiscal year 2025 and 2024, 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 must pass a U.S. Department of Education (“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 a U.S. Department of Education (“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

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. A letter of credit in the amount of $157.9 million, representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2022, was delivered to ED on November 1, 2023 with an expiration date of December 31, 2024. On December 3, 2024, ED requested Adtalem amend the letter of credit to $179.0 million, representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2024 with an expiration date of January 31, 2026. As requested, Adtalem delivered this amended letter of credit to ED on December 13, 2024. Adtalem satisfied this request by securing a $99.0 million letter of credit under its Revolver and an $80.0 million surety-backed letter of credit. Management does not believe these conditions will have a material adverse effect on Adtalem’s operations.

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. A letter of credit in the amount of $157.9 million, representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2022, was delivered to ED on November 1, 2023 with an expiration date of December 31, 2024. On December 3, 2024, ED requested Adtalem amend the letter of credit to $179.0 million, representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2024 with an expiration date of January 31, 2026. As requested, Adtalem delivered this amended letter of credit to ED on December 13, 2024. Adtalem satisfied this request by securing a $99.0 million letter of credit under its Revolver and an $80.0 million surety-backed letter of credit. In February 2025, Adtalem replaced the $99.0 million letter of credit under its Revolver with a $99.0 million surety-backed letter of credit. Management does not believe these conditions will have a material adverse effect on Adtalem’s operations.

Previous wording

ED approved Walden’s change in ownership application and issued Walden a provisional PPA through June 30, 2025, with its application for PPA recertification due March 31, 2025.

Current wording

ED approved Walden’s change in ownership application and issued Walden a provisional PPA through June 30, 2025, with its application for PPA recertification due March 31, 2025. A complete application for Walden’s PPA recertification has been timely submitted to ED.

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, heightened cash monitoring, and additional reporting. We do not believe these requirements will have a material effect on

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 are seeking to block enforcement of the FVT/GE rule under the Administrative Procedure Act and other legal theories.

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 are seeking to block enforcement of the FVT/GE rule under the Administrative Procedure Act and other legal theories. On February 14, 2025, ED extended the institutional reporting deadline until September 30, 2025.

Previous wording

Adtalem’s consolidated cash and cash equivalents balance of $194.0 million and $219.3 million as of December 31, 2024 and June 30, 2024, respectively, included cash and cash equivalents held at Adtalem’s international operations of $5.8 million and $4.6 million as of December 31, 2024 and June 30, 2024, respectively, which is available to Adtalem for general corporate purposes.

Current wording

Adtalem’s consolidated cash and cash equivalents balance of $219.0 million and $219.3 million as of March 31, 2025 and June 30, 2024, respectively, included cash and cash equivalents held at Adtalem’s international operations of $4.1 million and $4.6 million as of March 31, 2025 and June 30, 2024, respectively, which is available to Adtalem for general corporate purposes.

Previous wording

Net cash used in investing activities during the six months ended December 31, 2024 and 2023 was $20.2 million and $19.5 million, respectively, and was primarily driven by capital expenditures of $21.1 million and $19.6 million, respectively. The capital expenditures in fiscal year 2025 primarily consisted of spending for information technology investments and Chamberlain’s campus development. For the remainder of fiscal year 2025, we expect capital spending on information technology, new campus development at Chamberlain, and facility improvements at the medical and veterinary schools. Management anticipates full fiscal year 2025 capital spending to be in the $55 to $65 million range. The source of funds for this capital spending will be from operations or the Credit Facility (as defined and discussed in Note 13 “Debt” to the Consolidated Financial Statements).

Current wording

Net cash used in investing activities in the nine months ended March 31, 2025 and 2024 was $30.3 million and $32.2 million, respectively, and was primarily driven by capital expenditures of $31.3 million and $32.3 million, respectively. The capital expenditures in fiscal year 2025 primarily consisted of spending for information technology investments and Chamberlain’s campus development. For the remainder of fiscal year 2025, we expect capital spending on information technology, new campus development at Chamberlain, and facility improvements at the medical and veterinary schools. Management anticipates full fiscal year 2025 capital spending to be in the $40 to $50 million range. The source of funds for this capital spending will be from operations or the Credit Facility (as defined and discussed in Note 13 “Debt” to the Consolidated Financial Statements).

Previous wording

On March 1, 2022, we announced that the Board authorized Adtalem’s thirteenth share repurchase program, which allowed Adtalem to repurchase up to $300.0 million of its common stock through February 25, 2025. On January 16, 2024, Adtalem completed its thirteenth share repurchase program. On January 19, 2024, we announced that the Board authorized Adtalem’s fourteenth share repurchase program, which allows Adtalem to repurchase up to $300.0 million of its common stock through January 16, 2027. As of December 31, 2024, $140.1 million of authorized share repurchases were remaining under the fourteenth 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

On March 1, 2022, we announced that the Board authorized Adtalem’s thirteenth share repurchase program, which allowed Adtalem to repurchase up to $300.0 million of its common stock through February 25, 2025. On January 16, 2024, Adtalem completed its thirteenth share repurchase program. On January 19, 2024, we announced that the Board authorized Adtalem’s fourteenth share repurchase program, which allows Adtalem to repurchase up to $300.0 million of its common stock through January 16, 2027. As of March 31, 2025, $62.5 million of authorized share repurchases were remaining under the fourteenth share repurchase program. On May 5, 2025, Adtalem completed its fourteenth share repurchase program. On May 6, 2025, we announced that the Board of Directors 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. 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

On March 1, 2021, we issued $800.0 million aggregate principal amount of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028. On August 12, 2021, Adtalem entered into its new credit agreement (the “Credit Agreement”) that provides for (1) a $850.0 million senior secured term loan (“Term Loan B”) with a maturity date of August 12, 2028 and (2) a $400.0 million senior secured revolving loan facility (“Revolver”) with a maturity date of August 12, 2026. We refer to the Term Loan B and Revolver collectively as the “Credit Facility.” As of December 31, 2024, the principal balance of the Notes and Term Loan B was $405.0 million and $253.3 million, respectively. On January 17, 2025, we made an additional prepayment of $100.0 million on the Term Loan B, reducing the principal balance on the Term Loan B to $153.3 million as of January 17, 2025. See Note 13 “Debt” to the Consolidated Financial Statements for additional information on the Notes and our Credit Agreement.

Current wording

On March 1, 2021, we issued $800.0 million aggregate principal amount of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028. On August 12, 2021, Adtalem entered into its new credit agreement (the “Credit Agreement”) that provides for (1) a $850.0 million senior secured term loan (“Term Loan B”) with a maturity date of August 12, 2028 and (2) a $400.0 million senior secured revolving loan facility (“Revolver”) with a maturity date of August 12, 2026. We refer to the Term Loan B and Revolver collectively as the “Credit Facility.” As of March 31, 2025, the principal balance of the Notes and Term Loan B was $405.0 million and $153.3 million, respectively. See Note 13 “Debt” to the Consolidated Financial Statements for additional information on the Notes and our Credit Agreement.

Previous wording

In the event of unexpected market conditions or negative economic changes that could negatively affect Adtalem’s earnings and/or operating cash flow, Adtalem maintains a $400.0 million revolving credit facility with availability of $301.0 million as of December 31, 2024.

Current wording

In the event of unexpected market conditions or negative economic changes that could negatively affect Adtalem’s earnings and/or operating cash flow, Adtalem maintains a $400.0 million revolving credit facility with availability of $400.0 million as of March 31, 2025.

Previous wording

Long-Term Debt– As of December 31, 2024, we have principal balances of $405.0 million of Notes and $253.3 million of Term Loan B, which requires interest payments. With previous Term Loan B prepayments, we are no longer required to make quarterly principal installment payments on the Term Loan B. On January 17, 2025, we made an additional prepayment of $100.0 million on the Term Loan B, reducing the principal balance on the Term Loan B to $153.3 million as of January 17, 2025. See Note 13 “Debt” to the Consolidated Financial Statements for additional information on the Notes and our Credit Agreement.

Current wording

Long-Term Debt– As of March 31, 2025, we have principal balances of $405.0 million of Notes and $153.3 million of Term Loan B, which requires interest payments. With 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 Agreement.

Previous wording

Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted $63.9 million of surety bonds as of December 31, 2024 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM.

Current wording

Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted $66.5 million of surety bonds as of March 31, 2025 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM.

Previous wording

Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our 2024 Form 10-K and that might be contained in this Quarterly Report on Form 10-Q, which should be read in conjunction with the forward-looking statements in this Quarterly Report on Form 10-Q. These forward-looking statements are based on

Current wording

Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our 2024 Form 10-K and that might be contained in this Quarterly Report on Form 10-Q, which should be read in conjunction with the forward-looking statements in this Quarterly Report on Form 10-Q. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.

Previous wording

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, debt modification costs, loss on assets held for sale, and income from discontinued operations.

Current wording

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, strategic advisory costs, and (income) loss from discontinued operations.

Previous wording

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, debt modification costs, loss on assets held for sale, and income from discontinued operations.

Current wording

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, strategic advisory costs, and (income) loss from discontinued operations.

Previous wording

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, debt modification costs, and loss on assets held for sale. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

Current wording

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

Previous wording

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for income from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business integration expense, litigation reserve, loss on assets held for sale, and debt modification costs. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.

Current wording

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for (income) loss from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business integration expense, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.