LAUREATE EDUCATION, INC.

Previous wording

We operate a portfolio of degree-granting higher education institutions in Mexico and Peru. Collectively, we have approximately 477,000 students enrolled at five institutions in these two countries. We believe that the higher education markets in Mexico and Peru present an attractive long-term opportunity, primarily because of the large and growing imbalance between the supply and demand for affordable, quality higher education in those markets. We believe that the combination of the projected growth in the middle class, limited government resources dedicated to higher education, and a clear value proposition demonstrated by the higher earnings potential afforded by higher education, creates substantial opportunities for high-quality private institutions to meet this growing and unmet demand. By offering high-quality, outcome-focused education, we believe that we enable students to prosper and thrive in the dynamic and evolving knowledge economy. We have two reportable segments as described below. We group our institutions by geography in Mexico and Peru for reporting purposes.

Current wording

We operate a portfolio of degree-granting higher education institutions in Mexico and Peru. Collectively, we have approximately 472,100 students enrolled at five institutions in these two countries. We believe that the higher education markets in Mexico and Peru present an attractive long-term opportunity, primarily because of the large and growing imbalance between the supply and demand for affordable, quality higher education in those markets. We believe that the combination of the projected growth in the middle class, limited government resources dedicated to higher education, and a clear value proposition demonstrated by the higher earnings potential afforded by higher education, creates substantial opportunities for high-quality private institutions to meet this growing and unmet demand. By offering high-quality, outcome-focused education, we believe that we enable students to prosper and thrive in the dynamic and evolving knowledge economy. We have two reportable segments as described below. We group our institutions by geography in Mexico and Peru for reporting purposes.

Previous wording

•In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute approximately 76% of the total higher-education market. Laureate owns three institutions in Peru, with a footprint of 19 campuses.

Current wording

•In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute approximately 76% of the total higher-education market. Laureate owns three institutions in Peru, with a footprint of 20 campuses.

Previous wording

Revenues decreased by $39.2 million to $236.2 million for the three months ended March 31, 2025 (the 2025 fiscal quarter) from $275.4 million for the three months ended March 31, 2024 (the 2024 fiscal quarter). This decrease in revenues was attributable to the effect of a net change in foreign currency exchange rates, which decreased revenues by $37.6 million, mainly due to the weakening of the Mexican peso against the USD compared to the 2024 fiscal quarter. In addition, the effect of changes in tuition rates and enrollments in programs at varying price points (product mix), pricing and timing decreased revenues by $19.2 million for the 2025 fiscal quarter, mainly due to a decrease of approximately $26 million in revenue from intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal quarter as compared to the 2024 fiscal quarter. These decreases in revenue were partially offset by higher average total organic enrollment at our institutions, which increased revenues by $17.5 million compared to the 2024 fiscal quarter. Corporate accounted for the remaining difference of $0.1 million.

Current wording

Revenues increased by $25.0 million to $524.2 million for the three months ended June 30, 2025 (the 2025 fiscal quarter) from $499.2 million for the three months ended June 30, 2024 (the 2024 fiscal quarter). This increase in revenues was attributable to higher average total organic enrollment at our institutions during the 2025 fiscal quarter, which increased revenues by $32.1 million compared to the 2024 fiscal quarter. In addition, the effect of changes in tuition rates and enrollments in programs at varying price points (product mix), pricing and timing increased revenues by $17.0 million, which included a positive impact of approximately $8 million from intra-year academic calendar timing in Mexico, compared to the 2024 fiscal quarter. These increases in revenues were partially offset by the effect of a net change in foreign currency exchange rates, which decreased revenues by $24.2 million, mainly due to the weakening of the Mexican peso against the USD compared to the 2024 fiscal quarter. Corporate accounted for an increase in revenues of $0.1 million.

Previous wording

Direct costs and general and administrative expenses combined decreased by $14.9 million to $249.4 million for the 2025 fiscal quarter from $264.3 million for the 2024 fiscal quarter. This decrease in direct costs was driven by the effect of a net change in foreign currency exchange rates, which decreased direct costs by $27.9 million, mainly due to the weakening of the Mexican peso against the USD compared to the 2024 fiscal quarter. This decrease in direct costs was partially offset by the effect of operational changes, which increased direct costs by $12.7 million compared to the 2024 fiscal quarter, primarily due to the result of higher enrollment at our institutions. Corporate accounted for the remaining difference of $0.3 million.

Current wording

Direct costs and general and administrative expenses combined decreased by $16.7 million to $580.2 million for the 2025 fiscal period from $596.9 million for the 2024 fiscal period. This decrease was driven by the effect of a net change in foreign currency exchange rates, which decreased direct costs by $48.1 million, mainly due to the weakening of the Mexican peso against the USD compared to the 2024 fiscal period. This decrease was partially offset by the effect of operational changes, which increased direct costs by $32.7 million compared to the 2024 fiscal period, primarily due to the result of higher enrollment at our institutions. Corporate accounted for the remaining difference of $1.3 million.

Previous wording

Other non-operating expense decreased by $6.0 million to $3.2 million for the 2025 fiscal quarter from $9.2 million for the 2024 fiscal quarter. This decrease in other non-operating expense was attributable to: (1) the year-over-year effect of a $3.1 million loss related to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries during the 2024 fiscal quarter; (2) a decrease in foreign currency exchange loss of $2.4 million compared to the 2024 fiscal quarter; and (3) a decrease in other expenses of $0.5 million compared to the 2024 fiscal quarter.

Current wording

Other non-operating (expense) income changed by $46.3 million to an expense of $(28.0) million for the 2025 fiscal period from income of $18.3 million for the 2024 fiscal period. This change was attributable to: (1) a loss on foreign currency exchange during the 2025 fiscal period compared to a gain during the 2024 fiscal period for a change of $50.6 million, mainly related to intercompany loan arrangements; (2) the year-over-year effect of a $3.1 million loss related to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries during the 2024 fiscal period; and (3) a change of $1.2 million to other income for the 2025 fiscal period from other expenses in the 2024 fiscal period.

Previous wording

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, loss on debt extinguishment, interest expense and interest income, plus depreciation and amortization, share-based compensation expense and loss on impairment of assets. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

Current wording

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, interest expense, interest income, and loss on debt extinguishment, plus depreciation and amortization, share-based compensation expense and loss on impairment of assets. Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

Previous wording

The following table presents Adjusted EBITDA and reconciles Net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:

Current wording

The following table presents Adjusted EBITDA and reconciles Net income to Adjusted EBITDA for the three months ended June 30, 2025 and 2024:

Previous wording

The following table, derived from our consolidated financial statements included elsewhere in this Form 10-Q, presents selected financial information of our segments:

Current wording

The following tables, derived from our consolidated financial statements included elsewhere in this Form 10-Q, present selected financial information of our segments:

Previous wording

•Revenue for the 2025 fiscal quarter was unfavorably affected by the weakening of the Mexican peso against the USD and approximately $8 million of intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal quarter as compared to the 2024 fiscal quarter.

Current wording

•Revenue for the 2025 fiscal quarter was unfavorably affected by the weakening of the Mexican peso against the USD.

Previous wording

•Revenues from our Mexico segment represented 80% of our consolidated total revenues for the 2025 fiscal quarter, compared to 78% for the 2024 fiscal quarter.

Current wording

•Revenues from our Mexico segment represented 41% of our consolidated total revenues for the 2025 fiscal quarter compared to 44% for the 2024 fiscal quarter.

Previous wording

•Revenues from our Peru segment represented 20% of our consolidated total revenues for the 2025 fiscal quarter compared to 22% for the 2024 fiscal quarter.

Current wording

•Revenues from our Peru segment represented 59% of our consolidated total revenues for the 2025 fiscal quarter, compared to 56% for the 2024 fiscal quarter.

Previous wording

•Revenue for the 2025 fiscal quarter was unfavorably affected by approximately $18 million of intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal quarter as compared to the 2024 fiscal quarter.

Current wording

•On an organic constant currency basis, revenues increased by 1% and was unfavorably affected by approximately $18 million of intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal period as compared to the 2024 fiscal period.

Previous wording

Adjusted EBITDA decreased by $18.1 million, an 87% decrease from the 2024 fiscal quarter, primarily due to the unfavorable effect of the academic calendar timing.

Current wording

Adjusted EBITDA decreased by $1.2 million, a 1% decrease from the 2024 fiscal period, due to the unfavorable effect of the academic calendar timing.

Previous wording

As of March 31, 2025, our secondary source of liquidity was cash and cash equivalents of $109.8 million. Our cash accounts are maintained with high-quality financial institutions. The Company also maintains a revolving credit facility under its credit agreement (the Amended Credit Agreement) that provides for borrowings of up to $155.0 million of revolving credit loans maturing September 2028 (the Revolving Credit Facility). The credit available to be borrowed under the Amended Credit Agreement, whether as revolving loans or term loans, if any, are referred to herein collectively as the “Senior Secured Credit Facility.” In accordance with the terms of the Amended Credit Agreement, any proceeds drawn on the Revolving Credit Facility may be used for general corporate purposes. As of March 31, 2025, the Company had borrowed $30.0 million of the available capacity.

Current wording

As of June 30, 2025, our secondary source of liquidity was cash and cash equivalents of $135.3 million. Our cash accounts are maintained with high-quality financial institutions. The Company also maintains a revolving credit facility under its credit agreement (the Amended Credit Agreement) that provides for borrowings of up to $155.0 million of revolving credit loans maturing September 2028 (the Revolving Credit Facility). The credit available to be borrowed under the Amended Credit Agreement, whether as revolving loans or term loans, if any, are referred to herein collectively as the “Senior Secured Credit Facility.” In accordance with the terms of the Amended Credit Agreement, any proceeds drawn on the Revolving Credit Facility may be used for general corporate purposes. As of June 30, 2025, the Company had borrowed $12.5 million of the available capacity.

Previous wording

Our liquidity is affected by restricted cash balances, which totaled$7.1 million as of March 31, 2025 and $6.5 million as of December 31, 2024. Restricted cash mainly consists of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Current wording

Our liquidity is affected by restricted cash balances, which totaled$6.7 million as of June 30, 2025 and $6.5 million as of December 31, 2024. Restricted cash mainly consists of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Previous wording

We earn a significant portion of our income from subsidiaries located in countries outside the United States. As of March 31, 2025, $102.9 million of our total $109.8 million of cash and cash equivalents were held by foreign subsidiaries. As of December 31, 2024, $80.1 million of our total $91.4 million of cash and cash equivalents were held by foreign subsidiaries. As part of our business strategies, we have determined that the undistributed historical earnings of our foreign operations for which we have not already recorded taxes will be deemed indefinitely reinvested outside of the United States.

Current wording

We earn a significant portion of our income from subsidiaries located in countries outside the United States. As of June 30, 2025, $129.5 million of our total $135.3 million of cash and cash equivalents were held by foreign subsidiaries. As of December 31, 2024, $80.1 million of our total $91.4 million of cash and cash equivalents were held by foreign subsidiaries. As part of our business strategies, we have determined that the undistributed historical earnings of our foreign operations for which we have not already recorded taxes will be deemed indefinitely reinvested outside of the United States.

Previous wording

As of March 31, 2025, our debt obligations consisted of $30.0 million of borrowings under the Senior Secured Credit Facility and $33.7 million of other debt. Other debt includes lines of credit and short-term borrowing arrangements of subsidiaries and notes payable. In addition, our finance lease obligations and sale-leaseback financings were $50.9 million.

Current wording

As of June 30, 2025, our debt obligations consisted of $12.5 million of borrowings under the Senior Secured Credit Facility and $48.6 million of other debt. Other debt includes lines of credit and short-term borrowing arrangements of subsidiaries and notes payable. In addition, our finance lease obligations and sale-leaseback financings were $55.1 million.

Previous wording

We conduct a significant portion of our operations from leased facilities, including many of our higher education facilities and other office locations. As of March 31, 2025 and December 31, 2024, the present value of operating lease liabilities was $321.3 million and $327.1 million, respectively.

Current wording

We conduct a significant portion of our operations from leased facilities, including many of our higher education facilities and other office locations. As of June 30, 2025 and December 31, 2024, the present value of operating lease liabilities was $334.4 million and $327.1 million, respectively.

Previous wording

Our total capital expenditures, excluding receipts from the sale of subsidiaries and property and equipment, were $4.6 million and $15.9 million during the three months ended March 31, 2025 and 2024, respectively. The decrease in capital expenditures was primarily due to the year-over-year effect of the purchase of a parcel of land for a new campus during the 2024 fiscal quarter.

Current wording

Our total capital expenditures, excluding receipts from the sale of subsidiaries and property and equipment, were $17.9 million and $26.6 million during the six months ended June 30, 2025 and 2024, respectively. The decrease in capital expenditures was primarily due to the year-over-year effect of the purchase of a parcel of land for a new campus during the 2024 fiscal period.

Previous wording

On September 13, 2024, the Company announced that its Board of Directors had approved a stock repurchase program to acquire up to $100 million of the Company’s common stock. The Company’s repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act. Repurchases may also be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program. As of March 31, 2025, the approximate dollar value of shares yet to be repurchased under this stock repurchase program was $56.1 million. The Company intends to finance the repurchases with free cash flow, excess cash and liquidity and liquidity on-hand, including available capacity under its Revolving Credit Facility, or a combination thereof.

Current wording

On September 13, 2024, the Company announced that its Board of Directors had approved a stock repurchase program to acquire up to $100 million of the Company’s common stock. The Company’s repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act. Repurchases may also be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act. The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program. As of June 30, 2025, the approximate dollar value of shares yet to be repurchased under this stock repurchase program was $27.4 million. The Company intends to finance the repurchases with free cash flow, excess cash and liquidity and liquidity on-hand, including available capacity under its Revolving Credit Facility, or a combination thereof.

Previous wording

The following table summarizes our cash flows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes our cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024:

Previous wording

Comparison of Cash Flows for the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

Current wording

Comparison of Cash Flows for the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

Previous wording

Cash provided by operating activities increased by $24.6 million to $57.8 million for the 2025 fiscal quarter from $33.2 million for the 2024 fiscal quarter. This increase in operating cash flows was attributable to: (1) the net effect of changes in operating assets and liabilities partially offset by lower operating income, which increased operating cash by $19.8 million compared to the 2024 fiscal quarter; (2) lower cash paid for taxes of $2.6 million, from $21.1 million for the 2024 fiscal quarter to $18.5 million for the 2025 fiscal quarter; and (3) lower cash paid for interest of $2.2 million, from $4.2 million for the 2024 fiscal quarter to $2.0 million for the 2025 fiscal quarter.

Current wording

Cash provided by operating activities increased by $58.4 million to $131.8 million for the 2025 fiscal period from $73.4 million for the 2024 fiscal period. This increase in operating cash flows was attributable to: (1) the net effect of changes in operating assets and liabilities as well as higher operating income, which increased operating cash by $26.3 million compared to the 2024 fiscal period; (2) lower cash paid for taxes of $28.7 million, from $91.8 million for the 2024 fiscal period to $63.1 million for the 2025 fiscal period, primarily related to taxes paid during the 2024 fiscal period as a result of the distribution of certain intercompany loans; and (3) lower cash paid for interest of $3.4 million, from $8.2 million for the 2024 fiscal period to $4.8 million for the 2025 fiscal period, mostly due to lower average debt balances.

Previous wording

Cash used in investing activities decreased by $11.4 million to $(4.6) million for the 2025 fiscal quarter from $(16.0) million for the 2024 fiscal quarter. This decrease in investing cash outflows was primarily attributable to lower capital expenditures of $11.3 million during the 2025 fiscal quarter compared to the 2024 fiscal quarter, mainly driven by the purchase of a parcel of land for a new campus during the 2024 fiscal quarter. Other items accounted for the remaining difference of $0.1 million.

Current wording

Cash used in investing activities decreased by $4.9 million to $(17.7) million for the 2025 fiscal period from $(22.6) million for the 2024 fiscal period. This decrease in investing cash outflows was primarily attributable to lower capital expenditures of $8.7 million during the 2025 fiscal period compared to the 2024 fiscal period, mainly driven by the purchase of a parcel of land for a new campus during the 2024 fiscal period, which was partially offset by lower year-over-year cash proceeds from the sale of property and equipment of $3.1 million, mainly related to the sale of a parcel of land in the United States during the 2024 fiscal period. Other items accounted for the remaining difference of $0.7 million.

Previous wording

Cash flow from financing activities changed by $53.0 million to an outflow of $(34.6) million for the 2025 fiscal quarter from an inflow of $18.4 million for the 2024 fiscal quarter. This decrease in financing cash flows was primarily attributable to $47.0 million of lower net proceeds from long-term debt during the 2025 fiscal quarter compared to the 2024 fiscal quarter. In addition, payments for common stock repurchases were higher by $6.6 million during the 2025 period compared to the 2024 fiscal quarter. Other items accounted for the remaining difference of $0.6 million.

Current wording

Cash used in financing activities increased by $65.5 million to $(73.8) million for the 2025 fiscal period from $(8.3) million for the 2024 fiscal period. This increase in financing cash outflows was primarily attributable to $66.1 million of lower net proceeds from long-term debt during the 2025 fiscal period compared to the 2024 fiscal period. Other items accounted for the remaining difference of $0.6 million.

Previous wording

The preparation of the consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Our significant accounting policies are discussed in Note 2, Significant Accounting Policies, of the audited consolidated financial statements included in our 2024 Form 10-K. Our critical accounting policies require the most significant judgments and estimates about the effect of matters that are inherently uncertain. As a result, these accounting policies and estimates could materially affect our financial statements and are critical to the understanding of our results of operations and financial condition. For a complete discussion of our critical accounting policies, see the “Critical Accounting Policies and Estimates” section of the MD&A in our 2024 Form 10-K. During the three months ended March 31, 2025, there were no significant changes to our critical accounting policies.

Current wording

The preparation of the consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Our significant accounting policies are discussed in Note 2, Significant Accounting Policies, of the audited consolidated financial statements included in our 2024 Form 10-K. Our critical accounting policies require the most significant judgments and estimates about the effect of matters that are inherently uncertain. As a result, these accounting policies and estimates could materially affect our financial statements and are critical to the understanding of our results of operations and financial condition. For a complete discussion of our critical accounting policies, see the “Critical Accounting Policies and Estimates” section of the MD&A in our 2024 Form 10-K. During the six months ended June 30, 2025, there were no significant changes to our critical accounting policies.