Introduction & Market Context
Adtalem Global Education Inc. (NYSE:ATGE) presented its third-quarter fiscal 2025 results on May 8, showcasing strong performance across its portfolio of healthcare-focused educational institutions. The company, which positions itself as "systemically important" to the U.S. healthcare system, reported significant enrollment growth and financial improvements that exceeded market expectations.
The education provider’s stock closed at $115.88 on the day of the announcement, up 0.99% in regular trading. The shares have shown remarkable strength over the past year, trading near their 52-week high of $117.89 and well above their 52-week low of $62.28.
Adtalem’s results reflect the ongoing demand for healthcare professionals in the United States, with the company’s strategic focus on healthcare education proving effective in driving sustainable growth.
Quarterly Performance Highlights
Adtalem reported impressive financial results for the third quarter of fiscal 2025, with revenue reaching $466.1 million, representing a 12.9% increase compared to the same period last year. This performance exceeded analyst expectations of $441.03 million. The company’s adjusted earnings per share (EPS) of $1.92 surpassed forecasts of $1.70, marking a substantial 28.0% year-over-year improvement.
As shown in the following comprehensive performance summary:
The adjusted EBITDA margin expanded by 150 basis points to 27.4%, demonstrating Adtalem’s ability to generate operational leverage while continuing to invest in strategic growth initiatives. Total (EPA:TTEF) enrollment across all institutions grew by 9.8% year-over-year to 94,223 students, underscoring the strong demand for the company’s educational offerings.
Adtalem’s enrollment growth has shown consistent upward momentum across its institutions, as illustrated in this enrollment trend chart:
The company highlighted that Chamberlain University has now achieved nine consecutive quarters of year-over-year enrollment growth, while Walden University has posted seven straight quarters of enrollment increases. Even the Medical (TASE:BLWV) and Veterinary segment returned to positive territory with 1.2% growth after a slight decline in the previous quarter.
Segment Performance Analysis
Adtalem’s portfolio consists of three main segments: Chamberlain University, Walden University, and Medical & Veterinary schools. Each segment contributed to the company’s overall growth in the quarter.
Chamberlain University, which focuses on nursing education, reported total enrollment of 40,564 students, representing a 6.8% increase year-over-year. The segment generated $192.6 million in revenue and $56.8 million in adjusted EBITDA, maintaining a healthy margin of 29.5%. Growth was driven by both pre-licensure and post-licensure nursing programs.
The detailed performance metrics for Chamberlain are shown here:
Walden University demonstrated the strongest enrollment growth among all segments, with total student numbers increasing by 13.5% year-over-year to 48,526. The segment reported $178.4 million in revenue and $54.0 million in adjusted EBITDA, with a margin of 30.3%. Management noted that growth came from both healthcare and non-healthcare programs.
The performance breakdown for Walden is illustrated in this summary:
The Medical & Veterinary segment, which includes AUC School of Medicine, Ross University School of Medicine, and Ross University School of Veterinary Medicine, reported modest enrollment growth of 1.2% year-over-year to 5,133 students. Revenue for this segment reached $95.0 million, with adjusted EBITDA of $22.9 million and a margin of 24.0%. Management noted that the veterinary school is operating near capacity, while the medical schools are implementing strategic growth initiatives.
The segment’s performance metrics are detailed here:
Strategic Initiatives and Capital Allocation
Adtalem continues to execute its "Growth with Purpose" strategy, which focuses on driving organic revenue growth through marketing, enrollment, retention, pricing, and program initiatives. The company emphasizes its commitment to expanding access to underserved communities and delivering outstanding student outcomes.
The strategic framework guiding Adtalem’s growth initiatives is visualized in this chart:
The company’s strong financial performance has enabled disciplined capital allocation. Adtalem reported $287 million in free cash flow for the trailing twelve months and held $219 million in cash and equivalents as of March 31, 2025. During the quarter, the company repaid $100 million of its Term Loan B balance, strengthening its balance sheet.
The robust cash flow generation is illustrated in this chart:
Additionally, Adtalem announced a new $150 million share repurchase authorization through May 2028, having completed its previous $300 million program in January 2024. The company indicated it would continue to evaluate opportunistic tuck-in acquisitions to expand into in-demand healthcare education markets.
Forward-Looking Statements
Based on the strong performance in the third quarter, Adtalem raised its full-year fiscal 2025 guidance. The company now expects revenue to be between $1,760 million and $1,775 million, with adjusted EPS projected in the range of $6.40 to $6.60.
The updated guidance and underlying themes are presented here:
Management noted that revenue growth is expected to be higher in the first half of fiscal 2025 compared to the second half. The company anticipates adjusted EBITDA margin expansion of more than 150 basis points for the full year, with operational leverage continuing to outpace investments in organic growth initiatives.
CEO Steve Beard emphasized the company’s mission to transform healthcare education, stating, "Adtalem aims to change the face of healthcare for a better tomorrow." CFO Bob Phelan highlighted the company’s commitment to expanding its inclusive access mission while ensuring continued investment in business growth.
With its strong financial position, growing enrollment across all segments, and strategic focus on healthcare education, Adtalem appears well-positioned to capitalize on the ongoing demand for healthcare professionals in the United States. The company’s consistent execution and improved guidance reflect management’s confidence in sustaining the positive momentum through the remainder of fiscal 2025 and beyond.
Full presentation:
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