Perdoceo Education Corp’s Earnings Call Highlights Growth

Perdoceo Education Corporation ((PRDO)) has held its Q1 earnings call. Read on for the main highlights of the call.

Perdoceo Education Corporation’s recent earnings call conveyed a largely positive sentiment, underscored by robust revenue growth and increased earnings. The company’s performance was bolstered by the strategic acquisition of St. Augustine and notable enrollment growth at CTU. Despite these achievements, challenges such as declining enrollments at AIUS and rising marketing expenses were acknowledged, yet the overall outlook remains optimistic due to significant financial gains.

Net Income and Earnings Per Share Increase

The first quarter saw an impressive increase in net income, reaching $43.7 million or $0.65 per diluted share, compared to $39.4 million or $0.59 per diluted share in the previous year. Adjusted earnings per diluted share also rose to $0.70 from $0.60, reflecting the company’s strong financial performance.

Revenue Growth

Revenue for the first quarter surged by 26.6% to $213 million, up from $168.3 million in the prior year quarter. This growth was primarily driven by the St. Augustine acquisition and organic growth at CTU, highlighting the company’s successful expansion strategies.

St. Augustine Acquisition Impact

The acquisition of St. Augustine significantly contributed $39.2 million to the company’s revenue. This strategic move is expected to continue positively impacting operating income growth in 2025 and beyond, reinforcing the company’s long-term growth prospects.

Enrollment Increase at CTU

CTU experienced a 10.6% increase in total enrollments compared to the previous year, fueled by high levels of student retention and engagement. This growth underscores the effectiveness of the institution’s student-focused initiatives.

Capital Return to Shareholders

Perdoceo Education Corporation demonstrated its commitment to shareholder value by returning $34.4 million through dividends and stock repurchases, including the buyback of 985,000 shares during the quarter.

Decline in AIUS Enrollments

AIUS reported a 4.5% decline in total student enrollments compared to the prior year quarter. However, the company remains optimistic about growth in the second quarter, suggesting potential recovery and stabilization.

Flat Revenue at AIU System

Despite a relatively flat revenue performance at AIU System for the first quarter, operating income increased by 28% due to lower operating expenses, indicating effective cost management strategies.

Higher Marketing and Advertising Expenses

The quarter saw an increase in marketing and advertising expenses, which impacted operating income despite the revenue growth. The company is likely to address these expenses to optimize profitability.

Forward-Looking Guidance

Looking ahead, Perdoceo Education Corporation anticipates continued revenue and enrollment growth for 2025, driven by high student retention and engagement levels. The company projects adjusted operating income to range between $220 million and $235 million for the year, reflecting confidence in its strategic direction and market position.

In conclusion, Perdoceo Education Corporation’s earnings call reflects a positive trajectory with significant revenue and earnings growth. The strategic acquisition of St. Augustine and enrollment increases at CTU are key drivers of this success, although challenges such as AIUS enrollment declines and rising marketing costs remain. Overall, the company’s forward-looking guidance suggests a promising outlook for continued growth and shareholder value.