Adtalem Q1 FY26 presentation: Revenue up 10.8%, maintains strong enrollment growth

Introduction & Market Context

Adtalem Global Education Inc (NYSE:ATGE) presented its first quarter fiscal 2026 earnings on October 30, 2025, highlighting continued growth across its portfolio of healthcare-focused educational institutions. The company positions itself as a "systemically important component of the U.S. healthcare system," with approximately 90% of its student enrollment concentrated in healthcare programs.

Despite beating analyst expectations with strong financial results, Adtalem’s stock saw a slight decline of 0.13% in aftermarket trading, closing at $140.85. This minor pullback comes as the stock trades within its 52-week range of $78.56 to $156.26.

Quarterly Performance Highlights

Adtalem reported robust financial performance for Q1 FY26, with revenue increasing 10.8% year-over-year to $462.3 million, exceeding analyst expectations of $452.29 million. Adjusted earnings per share reached $1.75, representing a 35.7% increase from the previous year and surpassing the forecasted $1.57.

The company’s adjusted EBITDA grew to $112.0 million, a 15.8% increase compared to Q1 FY25, while the adjusted EBITDA margin expanded by 100 basis points to 24.2%.

As shown in the following comprehensive performance summary:

Total enrollment across all Adtalem institutions reached 97,359 students, an 8.0% increase year-over-year. This marks the ninth consecutive quarter of enrollment growth for the company, demonstrating the effectiveness of its "Growth with Purpose" strategy focused on marketing, enrollment, retention, pricing, and program development.

The company’s enrollment trends across its educational portfolio show consistent growth:

Segment Analysis

Chamberlain University, which focuses on nursing education, reported a 6.7% revenue increase to $179.2 million, though its adjusted EBITDA decreased by 5.1% to $35.1 million. Total enrollment grew by 2.2% year-over-year to 39,846 students, marking the eleventh straight quarter of enrollment growth. However, the adjusted EBITDA margin contracted by 240 basis points to 19.6%.

Walden University demonstrated the strongest performance among Adtalem’s segments, with revenue increasing 17.6% to $190.0 million and adjusted EBITDA growing 29.5% to $61.9 million. Total enrollment surged 13.6% to 52,216 students, representing the ninth consecutive quarter of year-over-year growth. The adjusted EBITDA margin expanded by 300 basis points to 32.6%.

The Medical & Veterinary segment, which includes Ross University School of Medicine, Ross University School of Veterinary Medicine, and American University of the Caribbean School of Medicine, reported a 5.9% revenue increase to $93.1 million. Adjusted EBITDA grew 11.6% to $21.4 million, with the margin expanding by 120 basis points to 23.0%. Total enrollment increased 2.4% to 5,297 students.

Strategic Initiatives & Partnerships

Adtalem highlighted several strategic initiatives and partnerships launched during the quarter to strengthen its position in healthcare education:

1. A partnership with Google Cloud to develop AI healthcare credentials

2. Chamberlain University’s collaboration with the American Association of Post-Acute Care Nursing

3. Enhancements to Walden’s professional doctoral programs

4. Expansion of medical education through new partnerships, including AUC’s University of Lancashire campus admittance with University of Wolverhampton

The company continues to focus on its "Growth with Purpose" strategy, emphasizing expanding access to underserved communities while maintaining a commitment to student outcomes.

Financial Outlook & Guidance

Adtalem maintained its full-year fiscal 2026 guidance, projecting revenue between $1,900 million and $1,940 million, representing year-over-year growth of 6.0% to 8.5%. Adjusted EPS is expected to range from $7.60 to $7.90, a 14.0% to 18.5% increase from fiscal 2025.

The company anticipates stronger revenue growth in the first half of fiscal 2026 compared to the second half, with approximately 100 basis points of adjusted EBITDA margin expansion for the full year.

Adtalem’s financial strength is further demonstrated by its robust cash flow generation. Trailing twelve months free cash flow reached $319 million in Q1 FY26, continuing an upward trend from $243 million in Q1 FY25.

The company’s capital allocation strategy includes investing in student growth, returning excess cash to shareholders (repurchasing $8 million of shares in Q1 with $142 million remaining authorization), strengthening its financial position, and pursuing opportunistic mergers and acquisitions.

During the earnings call, CEO Steve Beard emphasized Adtalem’s positioning "to serve as the essential talent infrastructure for America’s healthcare workforce," while CFO Bob Phelan highlighted the priority to "reinvest into our institutions and deliver positive student outcomes."

Despite the overall positive results, analysts noted potential challenges, particularly regarding marketing and enrollment at Chamberlain University, which executives confirmed were isolated issues not indicative of broader company-wide problems.

Full presentation:

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