Earnings call transcript: Universal Technical Institute beats Q3 2025 EPS forecast

Universal Technical Institute (UTI) reported stronger-than-expected earnings for Q3 2025, with an EPS of $0.19, surpassing the forecast of $0.11. Revenue also exceeded expectations, reaching $204.3 million compared to the anticipated $200.01 million. Following the earnings announcement, UTI’s stock rose 4.6% in after-hours trading, reflecting investor optimism. According to InvestingPro data, the company maintains a GREAT financial health score of 3.21, with particularly strong growth metrics. InvestingPro subscribers have access to 10+ additional exclusive insights about UTI’s financial health and growth potential.

Key Takeaways

• UTI’s Q3 2025 EPS of $0.19 exceeded forecasts by 72.73%.
• Revenue increased by 15.1% year-over-year to $204.3 million.
• The stock price rose 4.6% in after-hours trading, closing at $33.42.
• UTI plans to open new campuses in Atlanta and San Antonio by 2026.
• The company aims for $1 billion in revenue by fiscal 2029.

Company Performance

Universal Technical Institute demonstrated robust performance in Q3 2025, with significant year-over-year growth. The company’s revenue rose by 15.1%, and net income more than doubled, increasing by 114% to $10.7 million. This growth reflects UTI’s strategic focus on expanding its program offerings and campus locations, as well as a strong demand for skilled trades education. The company’s impressive performance is part of a broader trend, with InvestingPro data showing a 97.52% total return over the past year and a strong 5-year revenue CAGR of 17%.

Financial Highlights

• Revenue: $204.3 million, up 15.1% year-over-year
• Net Income: $10.7 million, up 114% year-over-year
• Earnings per share: $0.19
• Adjusted EBITDA: $25.3 million, up 37.3% year-over-year
• Average Full-Time Active Students: 23,757, up 12.7% year-over-year
• New Student Starts: 5,721, up 2.8% year-over-year

Earnings vs. Forecast

UTI’s Q3 2025 results exceeded expectations, with an EPS of $0.19 compared to the forecasted $0.11, representing a 72.73% surprise. Revenue also beat projections by 2.14%, reaching $204.3 million. This marks a positive deviation from previous quarters, where earnings met or slightly exceeded forecasts.

Market Reaction

Following the earnings release, UTI’s stock saw a 4.6% increase in after-hours trading, closing at $33.42. This upward movement indicates a positive investor response to the earnings beat and the company’s growth prospects. The stock’s performance is noteworthy, given its proximity to the 52-week high of $36.32. Based on InvestingPro’s Fair Value analysis, UTI appears slightly overvalued at current levels, though analyst targets range from $36 to $40, suggesting potential upside. The stock currently trades at a P/E ratio of 31.18, reflecting investor confidence in its growth trajectory. A comprehensive analysis of UTI’s valuation metrics and growth potential is available in the exclusive InvestingPro Research Report.

Outlook & Guidance

UTI provided optimistic guidance for fiscal 2025, projecting revenue between $830 million and $835 million, a 14% increase year-over-year. The company also anticipates net income of $56 million to $60 million and adjusted EBITDA of $124 million to $128 million. UTI’s long-term goal is to achieve $1 billion in revenue by fiscal 2029, supported by new campus openings and program expansions. With a current market capitalization of $1.82 billion and operating with a moderate debt level, the company appears well-positioned to execute its growth strategy. Dive deeper into UTI’s growth metrics and financial health indicators with an InvestingPro subscription, which offers exclusive access to advanced financial metrics and expert analysis.

Executive Commentary

CEO Jerome Grant emphasized the company’s strategic position, stating, "The combination of a supportive regulatory environment, renewed public enthusiasm for skilled trades, and growing employer engagement positions the company at the center of national workforce transformation." He also highlighted the company’s ambitious growth targets, noting, "Our North Star Strategy Phase II currently outlines achieving over $1,000,000,000 in yearly revenue and approaching $200,000,000 in adjusted EBITDA by fiscal twenty twenty nine."

Risks and Challenges

• Market saturation in the education sector could limit growth opportunities.
• Economic downturns may affect enrollment numbers and revenue.
• Regulatory changes could impact operational costs and program offerings.
• Competition from other educational institutions may increase.
• The successful integration of new campuses and programs poses logistical challenges.

Q&A

During the earnings call, analysts inquired about the acceleration of Concord’s growth and the potential for additional campuses in 2026-2027. UTI management confirmed strong fourth-quarter student starts and discussed exploring short-term training programs eligible for Pell Grants, indicating a focus on expanding educational accessibility.

Full transcript - Universal Technical Institute Inc (UTI) Q3 2025:

Conference Operator: Good day, and welcome to Universal Technical Institute’s Third Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad.

To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the call over to your host today, Matt Kempton. Please go ahead.

Matt Kempton, Investor Relations, Universal Technical Institute: Hello, and welcome to Universal Technical Institute’s Fiscal Third Quarter twenty twenty five Earnings Call. Joining me today are our CEO, Jerome Grant and CFO, Bruce Schuman. Following our prepared remarks, we will open the call for your questions. A replay of this call, its transcript, and our investor presentation will be archived on the Investor Relations section of our website at investor.uti.edu, along with our earnings release issued earlier today and furnished to the SEC. During this call, we may make comments that contain forward looking statements as defined in the Private Securities Litigation Reform Act of 1995, which, by their nature, address matters that are in the future and are uncertain.

These statements reflect management’s current beliefs and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. These factors include, but are not limited to, those discussed in our earnings release and SEC filings. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We do not intend to update these forward looking statements as a result of new information or future developments, except as required by law. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of fiscal twenty twenty four.

The information presented today also includes non GAAP financial measures. These should be viewed in addition to and not as a substitute for the company’s reported results in accordance with U. S. GAAP. All non GAAP financial measures referenced in today’s call are reconciled in our earnings press release to the most directly comparable GAAP measure.

For more information regarding definitions of our non GAAP measures, please see our earnings release, financial supplement, and investor presentation. With that, I will turn the call over to Jerome Grant, CEO of Universal Technical Institute, for his prepared remarks. Jerome?

Jerome Grant, CEO, Universal Technical Institute: Thank you, Matt. Good afternoon, everyone, and thank you for joining us to discuss our results for the 2025. We’re excited to be with you today and to share another quarter of strong performance, driven by a keen focus on strategic execution. Before delving into our results for Q3, I want to touch on some of the legislative and regulatory factors we’ve all been keeping a close eye on that may be impacting certain segments of the broader education space, and the landscape we are currently navigating. Let’s start with the general operating environment.

We see the current federal regulatory environment as conducive to to our mission and model. We’re executing in a macro landscape that’s increasingly supportive of skilled trades. We’re having more meaningful conversations with policymakers and employers than ever before, a clear sign of growing momentum. Notably, we are successfully engaging with the Department of Education and other Trump administration offices to explore new avenues for advancing skilled trade growth, as they are focused on bringing more jobs to America. With our North Star strategy closely aligned with the operating landscape, our confidence in the next four years is strong.

Turning now to developments on the legislative side, most notably, I’d like to provide some clarity around how we’re looking at the passing of One Big Beautiful Bill Act. While this legislation introduces significant changes for higher education broadly, many of the limitations mainly focus on more costly four year and graduate programs that we do not offer. Recent discussions that I had in DC show that there’s strong support for accelerating our efforts to address the skilled labor shortage in The US. For example, the bills created new opportunities for some of our students, particularly our short course programs, which may now become Pell eligible. These courses, while currently not significant driver of our revenue, serve as a jumping off point for students to dive deeper into UTI and Concord’s full time programs.

This new legislation provides us with the opportunity to move more aggressively into the short term credential space. Holistically, the regulatory environment and this administration priorities reinforce the appreciation for technical education, and further validates the foundation we have built to deliver value to our students and employers alike. Now, turning to the results for the third quarter. We delivered another strong quarter in Q3, reflecting the consistency of our execution and the resilience of our model. Our results were driven by continued demand for skilled collar jobs and strategic investment to grow our reach.

We remain focused on scaling our new programs, optimizing student outcomes, and investing in our long term growth strategy, delivering results that continue to meet and exceed expectations. Revenue for the third quarter exceeded expectations, increasing 15% year over year to $204,300,000 Net income increased roughly 114% year over year to $10,700,000 with diluted earnings per share of $0.19 Adjusted EBITDA grew over 37% year over year to $25,300,000 Average full time active students grew nearly 13% year over year to 23,757 students, with total new student starts increasing approximately 3% year over year in the quarter. Throughout this quarter, we continue to see validation around the importance of, and our impact in skilled trades education. This year, we marked a major milestone by celebrating UTI’s sixtieth anniversary, and six decades of training America’s workforce. As part of that celebration, we had the honor of ringing the opening bell at the New York Stock Exchange this past May.

UTI also continues to be featured in prominent media outlets, like Forbes, USA Today, and CNBC’s Mad Money. Each of these pieces reflects a shared theme. People are reevaluating the ROI of traditional college degrees, and increasingly recognizing the value of skilled trades and other healthcare education. These stories highlight the lives we’re changing, and reinforce the broader societal shift towards the kinds of careers we train for. On our last call, we announced that our executive leadership team was now fully built out to lead the company through this exciting growth phase.

With that, we shifted our focus to opportunistic talent investments in our commercial engine. As a result of this, we bolstered our ranks by hiring seasoned divisional leadership to oversee marketing, admissions, and business development across both UTI and Concord divisions. These revenue driving positions further prepare us to reach our fullest potential, as we execute on this next phase of our North Star strategy. Now, let’s take a closer look at the division specific highlights for the quarter. Our Concord Career Colleges division maintained its strong top line and student performance in Q3, benefiting from sustained demand for careers in allied health and nursing, and continued operational excellence across our marketing investments.

Concord continues to outpace our expectations, and its performance only serves to bolster our anticipation of meeting or exceeding expectations when they move into the post growth restrictions era. The program initiatives we previously announced are progressing this plan, and remain on track for 2025. To reiterate, these initiatives include increasing the Dallas nursing program capacity capacity by an additional 60 students, launching a new nursing program in Jacksonville, Florida, and rolling out 10 non Title IV short course programs across the Concord campuses. The Heartland co branded campus also remains on track to open in early fiscal twenty twenty six. As you will recall, these campuses are projected to reach an annual revenue run rate of over $4,000,000 once scaled, and will serve as a model for future strategic partnerships.

Regarding our optimization efforts, construction’s underway for our new 60,000 square foot Denver location, where the Aurora campus will be relocated. This reimagined campus is scheduled to open in early twenty twenty six, and will feature larger simulation facilities, expand our dental hygiene capacity, and even space for future program expansions. Now shifting to the UTI division, the UTI division continued to experience strong year over year growth in average full time students, driven by program expansions, and the robust market demand. While new student growth softened this quarter, as previously expected, we anticipate a strong fourth quarter, as our high school population prepares to begin their studies. Now remember, nearly half of UTI’s division starts come in the fourth quarter, and they remain on track for their overall target.

Our efforts to optimize existing UTI campuses, and expand UTI’s campus footprint are underway, and on track for fiscal twenty twenty five, 2026, and 2027. Our eight program expansions launching in 2025 are on track and performing to plan. Most notably, this quarter we added HVACR programs to both Rancho Cucamonga and the Miramar campuses. This brings the HVACR program’s footprint to 11 campuses across seven states. This quarter, we also reached a meaningful milestone in our aviation program.

We proudly graduated our first class from our aviation maintenance programs in Avondale and Long Beach campuses. Just as exciting, our Houston based aviation students took home first place at the twenty twenty five Aerospace Maintenance Competition, which is a national event that tests both technical skill and teamwork against top training institutions in the country. These achievements reflect not just the excellence of our aviation programs, but the caliber of the students we continue to attract. As far as campus launches, we previously announced that we have two new UTI campuses set to open in 2026, pending regulatory approvals. The first, being our fully optimized Atlanta campus, which will offer a comprehensive set of programs, and second, our inaugural skilled trades focused campus in San Antonio.

Both are on schedule and on budget. Once fully ramped, these campuses should contribute significantly to margins, as well as generate upwards of $45,000,000 and $23,000,000 in revenue, respectively. Finally, I’m pleased to say that we’ve identified the fiscal twenty twenty seven UTI campus locations and fiscal twenty twenty six UTI program types for our next tranche of expansions. While we won’t be providing the specifics on this call, these plans are in place, and I look forward to updating everyone very soon. With another quarter of strong execution and a favorable operating environment, I’m pleased to share that we are raising the low end of our fiscal twenty twenty five guidance ranges for both revenue and new student starts.

We now anticipate consolidated revenue between $830,000,000 and $835,000,000 reflecting approximately 14% year over year growth at the midpoint. And new student starts should range between $29,500 and $30,000 With that, I’ll turn the call over to Bruce, our CFO, to review our third quarter financial results and talk through our guidance in more depth.

Bruce Schuman, CFO, Universal Technical Institute: Thank you, Jerome. Our financial performance in Q3 reflects continued solid execution on our strategy as a company. For the third quarter, average full time active students increased 12.7% year over year to 23,757 students. New student starts increased 2.8% year over year to 5,721 starts. The Concord division delivered an 18.8% increase in average full time active students compared to Q3 ’twenty four, while new student starts for the third quarter grew 9.1% year over year.

The strong year over year growth was primarily a result of sustained investments in marketing and admissions, as well as the team’s strong lead conversions. The UTI division drove an 8.9% year over year increase in average full time active students for Q3. New student starts declined slightly in the third quarter, reflecting a 3% year over year decrease. The year over year growth in average full time active students reflects the strong demand for skilled collar graduates and our team’s ability to convert leads. New student starts were softer in Q3 as expected due to having one less start instance in the quarter compared to the prior year period, and we continue to remain confident in our ability to achieve our full year starts guidance as outlined.

Shifting to our financial performance, third quarter revenue on a consolidated basis grew 15.1% year over year to $204,300,000 Concord contributed $72,800,000 an increase of 20.7 over the prior year quarter, while the UTI division contributed $131,500,000 an increase of 12.2% over the prior year quarter. Looking at profitability, consolidated net income for the third quarter was $10,700,000 or $0.19 per diluted share. Adjusted EBITDA for the third quarter increased 37.3% year over year to $25,300,000 These results included $1,700,000 in growth investment spend related to new program launches and new campus build outs. Growth investment spend for the year to date is $2,200,000 At the end of the quarter, we had 54,400,000.0 shares outstanding. Total available liquidity at the end of the third quarter was $236,900,000 including $47,200,000 of short term investments and $119,000,000 of remaining capacity on our revolving credit facility.

We also had a net pay down of $20,000,000 on our revolving credit facility and we’ll continue to closely manage the use of our revolver going forward. Year to date operating cash flow was $40,200,000 and adjusted free cash flow was $15,000,000 Year to date capital expenditures were $25,500,000 reflecting investments in our program and campus expansion initiatives. Driven by our strong third quarter top line performance and sustained operational execution, we are raising our fiscal twenty twenty five guidance ranges for revenue and starts and reiterating our expectations for all other key metrics. Beginning with revenue, we now expect to generate between $830,000,000 and $835,000,000 of revenue for fiscal twenty twenty five, or approximately 14% year over year growth at the midpoint. Total new student starts in fiscal twenty twenty five are now anticipated to range between 29,530.

This updated outlook reflects the strong performance in both divisions, the continued scaling of new programs, and sustained demand across the skilled trades and allied health sectors. We are reaffirming the remainder of our fiscal twenty twenty five guidance ranges. To reiterate, net income is anticipated to be between 56,000,000 and $60,000,000 with diluted earnings per share of $1 to $1.08 for the year. Full year adjusted EBITDA is expected to be between $124,000,000 and $128,000,000 or around a 23% year over year increase at the midpoint. And lastly, full year 2025 adjusted free cash flow is anticipated to range between $62,000,000 and $68,000,000 In line with historical timing, we expect the majority of our cash generation and year over year increase to happen in Q4.

In addition to today’s earnings call transcript, we encourage everyone to review our press release, financial supplement, investor presentation, and the upcoming 10 Q filing. These materials provide the latest updates on our consolidated and segment results, strategic initiatives, and guidance. As always, thank you to our team members, students, partners, and shareholders for your unwavering support. I’ll now turn the call back over to Jerome for his closing remarks.

Jerome Grant, CEO, Universal Technical Institute: Thank you, Bruce. As we move into the remainder of fiscal twenty twenty five, our operational goals remain the same. In addition to maintaining a keen focus on finishing the year strong, organically, we’re continuing our planning and execution on expanding our campus footprint into greenfield locations, broadening the reach of our existing programs, and adding new in demand offerings, as well as deepening industry relationships and growing our partner network. Inorganically, we continue to be open to considering acquisitions that both align with our second phase of our North Star strategy, and provide meaningful value to our shareholders. I want to finish today’s call by both sharing some exciting news, and reiterating the operational and financial aspects of phase two of our North Star strategy.

We are pleased to announce that following discussions with satisfy the agency’s requirements for lifting the core growth restrictions that have restricted our Concord Career Colleges division’s growth since the acquisition. We are now in a position to seek the department’s approval to proceed with our expansion efforts for Concord. This is a significant moment for us, and enables the company to accelerate Concord’s program and campus growth starting next fiscal year, which is one full year ahead of plan. As we noted previously, adjusted EBITDA margins in fiscal twenty twenty six and 2027 will reflect the impact of deliberate investment to support our expanded campus footprint and program portfolio. Although these investments are expected to temporarily moderate margin growth for the next two years, they are foundational to our long term growth strategy.

While we won’t be providing formal guidance on the call today beyond 2025, I think it’s safe to say that with our ability to move forward early with Conferred’s growth initiatives, we expect to see even stronger ramp in revenue and margin expansion beginning in fiscal twenty twenty eight and accelerating through 2029 and beyond. North Star Strategy Phase II currently outlines achieving over $1,000,000,000 in yearly revenue and approaching $200,000,000 in adjusted EBITDA by fiscal twenty twenty nine. With our growth platform now fully unlocked, we’re confident in our ability to achieve, and yes, even exceed those targets. As we close out Q3, I want to underscore how excited we are about what lies ahead. The combination of a supportive regulatory environment, renewed public enthusiasm for skilled trades, and growing employer engagement positions the company at the center of national workforce transformation.

With a robust portfolio of new programs and campuses in development, and a leadership team built for growth, diversification, and optimization, we believe we are just scratching the surface of what our company will achieve. Thank you for your continued support. We’re excited about the momentum we’re building, and look forward to keeping you informed as we execute on our accelerated growth, diversification, and optimization strategy. We encourage everyone to visit one of our 32 campuses. So if you’re interested, please just let us know, we’ll be happy to host you.

I’d now like to turn the call over to the operator for Q and A. Operator?

Conference Operator: Yes, thank you. As mentioned, we will now begin the question and answer session. And the first question comes from Mike Grondahl with Northland Securities.

Mike Grondahl, Analyst, Northland Securities: Hey, thanks guys. Hey Jerome, I wanted to start with Concord. Congrats on getting that approval. There’s been a lot of demand there, a lot of growth. What could Concord look like in three to five years?

And can you move quick enough to get a couple incremental campuses, new campuses at Concord next year?

Jerome Grant, CEO, Universal Technical Institute: Mike, can you hear me, Mike?

Mike Grondahl, Analyst, Northland Securities: Yes.

Jerome Grant, CEO, Universal Technical Institute: Okay, good. We’re having some technical difficulties here in the conference room, I wanted to make sure you could hear me. It’s a great question. I think you know, really what the agreement we came to with Department of Education does is accelerates our plans by a year, really. You know, we expected the growth restrictions to come off next summer.

We’ve got them off this summer. And I think probably the best way to think about it is, what it really means is we’re going to be able to get, say another half a dozen or so, maybe more programs out into the market next year in 2026, when our plan had none. And over the life of the plan, the five year plan, this means a couple of more campuses on the conference side. Can we get them all in in ’twenty six? That’s debatable, right?

That we’re starting our approval process right now. We’ve been doing site selection for quite some time in anticipation of this happening. And we’re going work as hard as we can. But really, the sum total of the upside to this, to the five year plan that we put out was a year’s worth of program launches.

Raj Sharma, Analyst, Texas Capital: Hello?

Mike Grondahl, Analyst, Northland Securities: Yeah, I’m still here. I don’t know who that was.

Jerome Grant, CEO, Universal Technical Institute: That was Matt. Sorry. And a couple of more campuses that we put into it. We’re working through the approval process right now. And what that means is, by the time we get to guidance in November when we report at the end of the fourth quarter, guidance for ’26, we’ll revise that guidance.

And we’ll give you our targets at that time.

Mike Grondahl, Analyst, Northland Securities: Fair, that’s good. As we’re thinking about ’26 and ’27, I think you’re saying EBITDA margin expansion will be muted because of all the investment, but I don’t think we’re going backwards on those in gross dollars. Is that fair? How do you want people to think about that?

Jerome Grant, CEO, Universal Technical Institute: Yeah, I mean, we haven’t given any numbers past 2025. So I want to make sure that you understand that our guidance has been out there. Now, the analysts have taken upon themselves to put some models out there that had the EBITDA margins, you know, roughly flat to slight increase in 2026. And we think the job they did is admirable. There is an opportunity in 2026, should we invest more aggressively in launching campuses and programs that we wouldn’t achieve the same EBITDA in ’26 as we did in ’25.

And really remember, that all has to do with the sort of change in accounting practice, where we no longer take those one time costs out of our adjusted EBITDA. So we’ll be clear on what our strategic investments are going to be in ’twenty six when we give guidance. Just as we were clear in ’twenty five when we said, you know, the second half of the year, we’re gonna spend about $6,000,000 which previously we would have adjusted out of our adjusted EBITDA, but this year we’re not. So next year we’ll be clear about that as well.

Mike Grondahl, Analyst, Northland Securities: Perfect. Hey, sounds good, and thanks. Sure.

Conference Operator: Thank you. And the next question comes from Raj Sharma with Texas Capital.

Raj Sharma, Analyst, Texas Capital: Thank you for taking my questions. Again, solid continued execution. Love it. Congratulations. Thanks Raj.

Jerome Grant, CEO, Universal Technical Institute: Yeah.

Raj Sharma, Analyst, Texas Capital: Sure. Continuing on the Concord acceleration of growth and restrictions being lifted. Can you kind of comment on the UTI’s readiness around faculty hiring sort of, you’ve already talked about regulatory approvals and just sort of site development, how’s that going?

Jerome Grant, CEO, Universal Technical Institute: Yeah, I mean, we’ve been working pretty closely since the administration changed with them on building a model for progressing forward. So we’ve moved pretty far forward in terms of site selection for the first campuses. And our program portfolio was already built, assuming we were going to be able to launch them in 2027. So the number of programs that we’ll launch on the Concord campuses, which we’ll announce as we secure approvals for those, was already in place. So we feel pretty good that we’re hitting the ground running here as fast as we can, because we’ve been in negotiations with them for quite some time.

Raj Sharma, Analyst, Texas Capital: Right, thank you. Thank you for that. And then on the starts, just quickly, I know that softer, but your overall yearly starts are fine in line. So you’re saying Q4 is going to be as strong or if not stronger than you had expected. Is that still so is that a correct understanding?

Jerome Grant, CEO, Universal Technical Institute: Yeah, I mean, for asking about it. Think the way to think about it, number one in terms of looking at starts for Q3, the hard part about looking at starts in any given quarter is that we don’t have the same number of starts in every quarter, every year. And for instance, at UTI, there was one large start that we didn’t have this quarter, the opportunity was not there for upwards of 500 students. And we had hoped to be able to fill that gap with more high school students starting earlier, but our start in June was too early in June. Our large start in June was too early in June to capture that many more high school students.

That being said, we’ve already got our visibility into what’s going on in the fourth quarter, and that’s why we felt good about clipping the bottom end of our range, and saying that we’re going to be closer to that 30,000 than 29, where we had before. So we’re feeling good about the strong double digit, almost mid teen growth rate for the group as a whole, which propels us really nicely into ’26.

Raj Sharma, Analyst, Texas Capital: Got it, got it. And then your capital allocation, you’re generating really good free cash flow. You’ve got greater liquidity. It seems like so then we’re not we’re never happy with what’s going on. What’s next in terms of have you thought of, or can you give us your thoughts on beyond campus expansion?

How are you thinking about capital deployment? Any thoughts on sort of buybacks, M Right and A, debt pay

Jerome Grant, CEO, Universal Technical Institute: now, I mean, we’re very, very focused on generating value through launching campuses and programs. I mean, we’ve already announced two new campuses on the UTI side in 2026. We’re working very diligently on the first set of campuses for Concord now, which actually could increase that either in ’26 or early twenty seven. So, you know, right now most of our capital deployment is really focused on generating and even accelerating the organic growth to get the ’28, ’29 tail on the North Star plan even larger than what we put out in the market.

Bruce Schuman, CFO, Universal Technical Institute: Yeah Roger, this is Bruce. The only thing I would add to that, you see that commitment to growth even in our CapEx forecast, know, full 55,000,000 is invested this year. The majority of that is really focused on that growth spend, new campuses, new programs to make sure we can execute in ’26.

Raj Sharma, Analyst, Texas Capital: Right. You know, like I said, we’re never happy with what’s happening and then we go into the next level of problems. What’s next on your free cash flow? But thank you so much for taking my questions and again, fantastic job, fantastic continued execution.

Jerome Grant, CEO, Universal Technical Institute: I’ll take You, Raj. Sure. Look forward to talking to you. Thank

Conference Operator: you. And the next question comes from Jasper Bibb with Truist.

Jasper Bibb, Analyst, Truist: Hey, good afternoon, everyone. Maybe following up on the new starts. Just hoping you could provide a bit more detail on what you’re seeing as far as student interest levels in the fourth quarter to date. And the high school students that are coming in now, is that still pretty heavily skewed toward auto diesel or you get more traction with HVAC and some of the other skilled trades there?

Jerome Grant, CEO, Universal Technical Institute: So I think the thing to remember, which I said in my comments is that truly 50% of UTI division starts come in the fourth quarter, because about 40 mid 40% of the UTI population is high school students who are coming right out of high school. The high school students coming right out of high school predominantly go into auto diesel. Frankly, in high school they don’t know that much about what skilled trades means in terms of being an electrician or HVAC tech or etcetera. They tend to know, I’d like to fix cars. And so, know, still a large portion of the high school students are going into auto diesel, and they’re filling in quite nicely.

You know, we’re seeing what we expected to see from them in the fourth quarter. The timing of starts gave us that hiccup of why we thought we would moderate in the third quarter. But we feel strong enough that we’re still in that mid teens range for the whole company for the rest of the year to raise the low end of our guidance there as well.

Jasper Bibb, Analyst, Truist: Thanks. And then can you maybe talk about how large the exposure is to short term training programs that could benefit from some of the Pell changes you talked about in the prepared remarks. Know it’s not probably huge, but maybe just like a percent of revenue or something could help contextualize it for us.

Jerome Grant, CEO, Universal Technical Institute: It’s very, very small, right? Right now. And the reason it’s very, very small right now is because none of it was Pell eligible and therefore we didn’t move aggressively into short term credential spaces. Different types of welding certificates or smaller portions of the healthcare space, is that not being Pell eligible, those sorts of certificates, we didn’t move into it. What I was really trying to underscore in my comments was, it gives us an opportunity now beyond what’s on our roadmap to start thinking about shorter, bespoke programs that people can get aid on.

And therefore, we would be able to move quickly into delivering subsets of our curriculum in a full time setting, but just shorter durations that would be PAL eligible.

Jasper Bibb, Analyst, Truist: That makes sense. Last one for me. Can you maybe update us on where you are as far as capacity at Concord and whether some of your programs maybe dental comes to mind or being capacity limited at certain campuses now and whether the growth restrictions left that could help there?

Jerome Grant, CEO, Universal Technical Institute: Yeah, and you know, what I said last quarter is exactly what happened in this quarter, which was we’ve lapped ourselves a year. We had a project over the last year, now a year and a quarter, of really looking at the clinical capacities and making sure that we were moving as far towards that 100% placement as we could in that year timeframe. Because in many of these cases, you need to fill to your capacities, and then you can apply to get the caps lifted. These are soft caps that then can be lifted. And that’s where we found ourselves as we hit the third quarter, as I said in the second quarter, which was, you know, we are approaching the caps in many of them.

That doesn’t necessarily mean it’s capacity, it means that, we were granted the right to have that many students in a course. And now we are aggressively moving forward to get all those caps raised, right? And so that’s gonna give us a new growth opportunity as we move forward for Concord as well. There are very few markets and very few courses where we think there’s any notion of capacity, where the jobs are not there in that specific geography for that specific area. I still think there’s a lot of opportunity.

And now what we’ve proven is that we can fill to the opportunity that’s been giving us. So now we’re gonna raise them.

Bruce Schuman, CFO, Universal Technical Institute: Sounds good. Thank you for taking the questions.

Jerome Grant, CEO, Universal Technical Institute: Thanks, Jasper.

Conference Operator: Thank you. The next question comes from Bruce Goldfarb with Lake Street Capital Markets.

Bruce Schuman, CFO, Universal Technical Institute: For taking my call. Jerome, Bruce, congratulations on the great execution. So, first question is, where are you on potentially consolidating UTI and Concord systems, ERP systems and learning systems?

Jerome Grant, CEO, Universal Technical Institute: Well, that’s great. I mean, one of the things I announced on our last call, not this one, was that we had brought in a new CIO and really focusing on those four big our ERP system, our SIS, our LMS, and our CRM, because that’s a phase of the integration that we have not yet undertaken. And know, work is happening in earnest. This isn’t something that happens over a year or, you know, it’s probably a multi year, three, four year process to get all four systems aligned. But we’ll begin to see those efficiencies as we align those systems.

That work’s happening in earnest right now.

Bruce Schuman, CFO, Universal Technical Institute: Great. And then in terms of the big beautiful bill, I mean,

Jasper Bibb, Analyst, Truist: you talked a little bit

Bruce Schuman, CFO, Universal Technical Institute: of, I think, about the Pell Grants. But any other impacts are positive for UTI or how it’s gonna change the way you guys operate?

Jerome Grant, CEO, Universal Technical Institute: I actually think, you know, in my conversations in Washington, where we were asked for the very first time, how do we get more interest in the skilled trades? One of the things that we made very clear was we need to get more financial support to students for certificate programs, non degree programs, non traditional four year education. And for the Pell eligibility on short courses gets the conversation going even more. And so, we’re real happy with what we’ve seen in that front. As far as any other programs, it wasn’t really part of the Big Beautiful Bill Act.

I think now as they move into the 2026 budget votes in their next session, I think that’s the next opportunity to see more enhancements or speak with their legislation to their urge to get more people into the trade. So our work continues.

Bruce Schuman, CFO, Universal Technical Institute: Great. Thank you. Thanks for taking my questions.

Raj Sharma, Analyst, Texas Capital: Thank you.

Conference Operator: Thank you. And this concludes the question and answer session. I would like to turn the floor over to Jerome Grant for any closing comment.

Jerome Grant, CEO, Universal Technical Institute: Thank you very much, operator. Well, I’d like to thank everyone who attended today. As always, Bruce, Matt, and I are available for follow-up questions over the next few days. And we look forward to speaking with all of you, our investor and analysts, when we report our fourth quarter fiscal twenty twenty five results in mid November. So back to you, operator.

Conference Operator: Thank you. The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.

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