Universal Technical Institute Q3 FY2025 slides: North Star Strategy aims for $1B revenue

Universal Technical Institute, Inc. (NYSE:UTI) released its Q3 FY2025 investor presentation on August 6, 2025, highlighting the company’s successful transformation journey and ambitious growth plans. The presentation comes after UTI reported strong Q2 results that exceeded analyst expectations, with the stock trading near its 52-week high.

Transformation Journey

UTI has undergone a remarkable transformation since 2018, evolving from a struggling technical education provider to a diversified workforce solutions company. The company’s revenue has more than doubled during this period, while profitability has dramatically improved.

As shown in the following chart detailing UTI’s multi-year transformation:

The company has executed a strategic evolution that includes program and curricula additions, new campus openings, marketing and admissions optimization, and strategic acquisitions. Revenue has grown from $317 million in 2018 to $733 million in 2024, with projections reaching $830-835 million for fiscal 2025. During the same period, UTI has transformed from a net loss of $33 million in 2018 to an expected net income of $56-60 million in 2025.

Financial Performance

UTI’s financial performance continues to exceed expectations. In Q2 FY2025, the company reported earnings per share of $0.21, significantly outperforming the forecasted $0.12. Revenue reached $207.4 million, beating the expected $196.52 million, representing a 12.6% year-over-year increase.

The company’s fiscal 2025 guidance demonstrates continued strong growth across all key metrics:

For fiscal 2025, UTI expects:

• Revenue of $830-835 million
• Net income of $56-60 million
• Diluted EPS of $1.00-$1.08
• New student starts of 29.5k-30.0k
• Adjusted EBITDA of $124-128 million
• Adjusted free cash flow of $62-68 million

This guidance represents significant growth from fiscal 2022, with revenue nearly doubling and net income more than doubling over the three-year period.

North Star Strategy

Central to UTI’s future growth is its "North Star Strategy," which aims to drive the company toward more than $1 billion in annual revenue and approximately $200 million in Adjusted EBITDA by fiscal 2029.

The strategy’s key components and projected financial impact are illustrated in this chart:

The North Star Strategy focuses on:

• Opening new campuses
• Expanding programs at existing locations
• Introducing new program offerings
• Optimizing operations for growth and scale
• Strategic acquisitions

According to Jerome Grant, CEO, during the recent earnings call: "We’re seeing that the interest is higher. More local and more adult, which is actually good for mature decision making and the ability to start faster." CFO Bruce Schuman expressed confidence in achieving a 20% EBITDA margin by 2029.

Diversified Educational Platform

UTI has successfully diversified its educational offerings across two major divisions: Transportation and Skilled Trades (UTI) and Healthcare (Concorde). This diversification provides multiple growth avenues and reduces sector-specific risks.

The company’s comprehensive program offerings across both divisions are shown here:

The UTI division generated $486 million in revenue in FY2024 with approximately 14,000 average students across 15 campuses in 9 states. Programs include automotive, diesel, motorcycle, marine, welding, aviation maintenance, and robotics.

The Concorde division, focused on healthcare education, contributed $246 million in revenue in FY2024 with approximately 8,000 average students across 17 campuses in 8 states. Programs include dental hygiene, medical assisting, nursing, healthcare administration, and therapy assistant training.

Both divisions maintain impressive metrics, with graduation rates of approximately 70% for UTI and 73% for Concorde, and employment rates of 82% and 85% respectively.

Industry Partnerships

A key competitive advantage for UTI is its extensive network of industry partnerships, which enhance program quality and employment opportunities for graduates.

The following image showcases UTI’s impressive roster of industry partners:

These partnerships span automotive manufacturers (Ford, BMW (ETR:BMWG), Porsche), healthcare providers (HCA (NYSE:HCA) Florida Healthcare, Kaiser Permanente), and other industry leaders. These relationships provide students with industry-relevant training and create direct employment pathways for graduates.

Financial Outlook and Reconciliation

To provide investors with a clear understanding of its financial performance, UTI includes detailed reconciliations of its non-GAAP financial measures:

The adjusted EBITDA reconciliation shows the components contributing to UTI’s improving profitability, with adjusted EBITDA reaching $102.9 million in fiscal 2024, up from $64.2 million in fiscal 2023.

Similarly, the adjusted free cash flow reconciliation demonstrates UTI’s improving cash generation:

Adjusted free cash flow increased to $73.5 million in fiscal 2024 from $49.1 million in fiscal 2023, with projections of $62-68 million for fiscal 2025.

Growth Investments and Future Outlook

UTI plans significant growth investments in fiscal 2026-2027, which may temporarily moderate margin expansion but are expected to drive long-term growth. The company is targeting approximately 10% revenue CAGR through fiscal 2029, with adjusted EBITDA margin expanding to nearly 20%.

The company’s expansion strategy includes new campuses in Fort Myers, FL (Concorde), Atlanta, GA (UTI), and San Antonio, TX (UTI), along with numerous program additions across existing campuses.

While UTI’s outlook remains strongly positive, investors should consider potential risks including supply chain disruptions affecting campus expansions, economic downturns impacting enrollment, competitive pressures, and regulatory changes in education policies.

Following the Q2 earnings announcement, UTI’s stock rose 9.76% in after-hours trading to $32.51, reflecting investor confidence in the company’s strategy and execution. With its diversified educational platform, strong industry partnerships, and clear growth strategy, UTI appears well-positioned to achieve its ambitious financial targets.

Full presentation:

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