Laureate Education ((LAUR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Laureate Education’s latest earnings call painted a generally positive picture, underscored by an impressive financial and operational performance. The company achieved record-high margins and robust enrollment growth across its institutions, bolstered by significant academic recognitions. However, challenges such as foreign currency translation impacts and economic headwinds in Peru were also highlighted. Despite these hurdles, the company’s strategic initiatives and strong market position suggest a positive outlook.
Record High Adjusted EBITDA Margin
Laureate Education celebrated a new historic high adjusted EBITDA margin of 28.7% for 2024. This was achieved through a commendable organic constant currency growth of 7% in revenue and 9% in adjusted EBITDA, setting a new benchmark for the company’s financial performance.
Strong Enrollment Growth
The company reported a 5% increase in both new and total enrollments for the year 2024, driven significantly by expansions in fully online programs. This growth underscores the company’s strategic focus on digital education and its capacity to attract a larger student base.
Recognition for Academic Excellence
Laureate’s universities in Mexico and Peru received five-star ratings from QSR, with UPC in Peru being ranked as the number one education brand for the fourth consecutive year. This recognition reflects the company’s dedication to academic excellence and its impact on institutional reputation.
Expansion in Health Sciences
The company expanded its health sciences portfolio in 2024 by opening six new medical schools, two dental schools, and one veterinary school. These additions enhance Laureate’s commitment to providing comprehensive education in the health sciences sector.
Capital Returns to Shareholders
In 2024, Laureate Education returned over $100 million of capital to shareholders while maintaining a net debt-free position. This move demonstrates the company’s solid financial health and commitment to delivering value to its investors.
Foreign Currency Translation Headwinds
The company anticipated significant foreign currency translation headwinds in 2025, largely due to volatility in the Mexican peso, which could impact reported revenue. Managing these fluctuations remains a priority for maintaining financial stability.
Challenges in Peru
Despite its successes, Laureate faced challenges in Peru, where adjusted EBITDA decreased by 1% for 2024. This decline was attributed to higher bad debt and economic challenges stemming from a prior recession.
One-time Revenue Loss in Mexico
A one-time revenue loss of $13 million is expected in 2025 due to campus consolidation initiatives in Mexico. This strategic move aims to optimize operations despite the short-term financial impact.
Forward-Looking Guidance
Looking ahead to 2025, Laureate Education expects total enrollments to rise by 4% to 5%, reaching between 489,000 and 495,000 students. Revenue is projected to range from $1.545 billion to $1.570 billion, while adjusted EBITDA is anticipated to grow by 4% to 6% on an as-reported basis and 11% to 13% in constant currency terms. Adjusted EBITDA margins are expected to improve by 150 basis points, driven by revenue growth and strategic initiatives. The company remains cautiously optimistic despite geopolitical uncertainties in Mexico.
In conclusion, Laureate Education’s earnings call reflects a strong overall sentiment, highlighted by record-high financial metrics and strategic growth initiatives. Despite facing some economic challenges, the company’s forward-looking guidance suggests continued expansion and improvement in margins, reinforcing its robust market position.
