Revenue up 11.8% YoY

Total enrollment up 7.8% YoY

Diluted earnings per share $0.93; Adjusted EPS $1.50, growth of 32.7% YoY

Third Quarter Highlights

• Revenue $412.7 million, up 11.8% year-over-year
• Total student enrollment 85,809, up 7.8% year-over-year
• Chamberlain University fifth straight quarter of total enrollment growth, up 9.0% year-over-year, highest total enrollment in university history
• Walden University third straight quarter of total enrollment growth, up 8.4% year-over-year
• Investing in Growth with Purpose strategy, GAAP net income $36.8 million, and adjusted EBITDA $107.1 million, up 24.6% year-over-year

Capital Allocation

• Repurchased $91 million of shares
• Net leverage 1.3x as of March 31, 2024

Fiscal Year 2024 Guidance

• Revenue $1,560 million to $1,580 million
• Adjusted earnings per share $4.80 to $5.00

Adtalem Global Education Inc. (NYSE: ATGE), the leading healthcare educator in the United States, today reported third quarter fiscal 2024 results (quarter ended March 31, 2024) reflecting robust operating performance through accelerated total enrollment growth and enhanced profitability.

“Our Growth with Purpose strategy, with its emphasis on operational excellence, continues to accelerate top- and bottom-line performance, permitting us to expand access to high-quality, in-demand programs,” said Steve Beard, president and chief executive officer, Adtalem Global Education.

“The momentum is built on strong enrollments, improved persistence and outstanding academic outcomes. With over 81,000 students graduated in the last three years, we are innately focused on our ability to have an outsized impact on U.S. healthcare.”

Financial Highlights

Selected financial data for the three months ended March 31, 2024:

• Revenue of $412.7 million increased 11.8% compared with the prior year.
• Operating income was $61.7 million, compared with $59.4 million in the prior year; adjusted operating income was $89.8 million, compared with $73.0 million in the prior year.
• Net income was $36.8 million, compared with $45.9 million in the prior year; adjusted net income was $59.4 million, compared with $51.6 million in the prior year.
• Diluted earnings per share was $0.93, compared with $1.00 in the prior year; adjusted earnings per share was $1.50, compared with $1.13 in the prior year.
• Adjusted EBITDA was $107.1 million, compared with $85.9 million in the prior year; adjusted EBITDA margin was 25.9%, compared with 23.3% in the prior year.

Business Highlights

• American University of the Caribbean School of Medicine and Ross University School of Medicine achieved a combined 98% first-time residency attainment rate for 2023-2024 graduates¹, for the second straight year, placing more than 815 students and graduates into over 350 unique healthcare facilities spanning 44 states and territories. Over 500 will enter primary care residencies, poised to enhance healthcare outcomes for some of the more than 83 million Americans in underserved areas lacking adequate access to primary care. Of the more than 815 students and graduates, 189 identify as Black/African American or Hispanic, helping diversify the pipeline of physicians in the U.S. healthcare system where, based on 2021 data, Black Americans make up 13% of the population but only 6% of physicians, and Hispanics represent 19% of the population but only 7% of physicians.
• Scott Liles rejoined Adtalem on April 1 as president of our Medical and Veterinary segment. Liles most recently served as the chief executive officer and executive board member for the Association of Certified Anti-Money Laundering Specialists (ACAMS). Liles was instrumental in returning ACAMS to growth in preparation for Adtalem’s divestiture of its Financial Services segment and in establishing ACAMS as an independent company.
• Chamberlain University continues to expand its specialized nursing education that addresses areas of acute nursing shortages through its Practice Ready. Specialty Focused.™ model and a new partnership with the Emergency Nurses Association (ENA), offering in-depth introduction into emergency nursing. The ENA emergency nursing offering is in addition to partnerships with DaVita® for nephrology, BrightStar Care® for home healthcare as well as the Association of periOperative Registered Nurses for perioperative nursing. Chamberlain’s proprietary specialty model, created with a grant from the American Nurses Foundation, is now offered at all 23 Chamberlain campuses.
• Walden University experienced some of the strongest new enrollment growth in its history, offering flexibility to working adults through part-time, self-paced and Tempo Learning^® competency-based programs.
• Walden University celebrated over 5,500 graduates at its 70th anniversary commencement. College of Nursing and the College of Social and Behavioral Health degrees accounted for more than 60% of the degrees awarded, further showcasing Adtalem's commitment to delivering practice-ready professionals at scale to the U.S. healthcare system.

Segment Highlights

Chamberlain

• Total student enrollment increased 9.0% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs as well as higher persistence.

Walden

• Total student enrollment increased 8.4% compared with the prior year, driven by growth in healthcare programs and high persistence.

Medical and Veterinary

• Total student enrollment decreased 4.5% compared with the prior year, primarily driven by declines at the medical schools.

Fiscal Year 2024 Outlook

Adtalem guidance for fiscal year 2024, raises revenue guidance to a range of $1,560 million to $1,580 million from $1,520 million to $1,560 million, and raises adjusted earnings per share to be in the range of $4.80 to $5.00 from $4.55 to $4.75.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal third quarter 2024 results today at 4:00 p.m. CT (5:00 p.m. ET).

The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) stating “Adtalem earnings call” or use conference ID: 13745553. The call will be simulcast through the Adtalem investor relations website at: https://investors.adtalem.com.

Adtalem will archive a replay of the call for 30 days. To access the replay, dial +1 877-660-6853 (U.S.) or +1 201-612-7415 (international), conference ID: 13745553, or visit the Adtalem investor relations website.

About Adtalem Global Education

Adtalem Global Education (NYSE: ATGE) is the No. 1 provider of healthcare education in the U.S.³ and a systemically important solution for preparing a diverse talent workforce that meets needs of the healthcare industry. We are redefining the education pathway into healthcare and meeting the evolving patient needs for a thriving society. Adtalem recognizes the potential in each individual and guides them to success while maintaining the top-tier standards and rigor needed to fill the workforce deficit, by creating more opportunities to connect practice-ready clinicians with employers at scale. We empower a diverse learner population to achieve their goals and make inspiring contributions to their communities with a family of institutions dedicated to nursing, medicine, veterinary medicine, social work and more. Our community is comprised of approximately 80,000 students, over 300,000 alumni and nearly 10,000 employees. Visit Adtalem.com for more information and follow us on LinkedIn, Instagram and Facebook.

Forward-Looking Statements

Certain statements contained in this release 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 can also be identified by words 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 risk and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. 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.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of special items that may be incurred in the future, although these special items could be material to Adtalem's results in accordance with GAAP.

Non-GAAP Financial Measures and Reconciliations

We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in the subsequent GAAP to non-GAAP reconciliation tables:

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business integration expense, intangible amortization expense, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, net tax benefit related to a valuation allowance release, and loss (income) from discontinued operations.

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, intangible amortization expense, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, net tax benefit related to a valuation allowance release, and loss (income) from discontinued operations.

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

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for loss (income) from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation and amortization, stock-based compensation, restructuring expense, business integration expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. 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.

Free cash flow (most comparable GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.

Net debt – Defined as long-term debt less cash and cash equivalents.

Net leverage – Defined as net debt divided by adjusted EBITDA.

A description of special items in our non-GAAP financial measures described above are as follows:

• Restructuring expense primarily related to real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.
• Business integration expense include expenses related to the Walden acquisition and certain costs related to growth transformation initiatives. We do not include normal, recurring, cash operating expenses in our business integration expense.
• Intangible amortization expense on acquired intangible assets.
• Gain on sale of Adtalem’s Chicago, Illinois, campus facility.
• Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, reserves related to significant litigation, impairment of an equity investment, loss on assets held for sale related to a fair value write-down on assets, and debt modification costs related to refinancing our Term Loan B loan.
• Net tax benefit related to a valuation allowance release.
• Loss (income) from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, a loss on sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices and a tax return to provision adjustment, and the earn-outs we received.