Universal Technical Institute(UTI) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q1 2025 grew over 15% year-over-year to $201.4 million [8][36] - Average full-time active students increased 11% year-over-year to 25,062 students [9][32] - Net income increased to$ 22.2 million with diluted earnings per share of $0.40 [9][37] - Adjusted EBITDA improved 45% year-over-year to$ 35.5 million [9][37] Business Line Data and Key Metrics Changes - Concorde division revenue increased by 17.9% year-over-year to $70 million, with new student starts up 26% [36][33] - UTI division revenue increased by 14% year-over-year to$ 131.5 million, with new student starts growing 19% [36][34] Market Data and Key Metrics Changes - Total new student starts increased year-over-year by over 22% for the quarter [9] - The UTI division experienced an 8% increase in average full-time active students [34] Company Strategy and Development Direction - The company is focused on growth, diversification, and optimization strategies, with plans to launch a minimum of 6 new programs each year across both divisions [29][30] - The company is entering Phase 2 of its North Star Strategy, which includes opening at least 2 new campuses annually starting in 2026 [30][44] - The company is exploring strategic acquisition opportunities, particularly in healthcare to enhance its Concorde portfolio [48][66] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering year-over-year growth throughout 2025, despite some operational challenges due to external factors like regulatory changes and market conditions [12][14] - The demand for skilled professionals is growing, and the company is well-positioned to support the next generation of skilled workers [49][96] Other Important Information - The company is making progress on its CFO search and expects to find a suitable candidate soon [16] - The company has a strong financial profile with total available liquidity of $246 million at the end of the quarter [38] Q&A Session Summary Question: Clarification on new campuses - The Atlanta campus is the first in Georgia, and it is a greenfield expansion [54][58] Question: North Star 2 strategy and EBITDA margin expansion - The EBITDA margin expansion will not be linear, with more strategic investments expected in the coming years [63][64] Question: M&A activity and price expectations - There is a notable uptick in M&A activity, with more reasonable price expectations from sellers [102][104] Question: New enrollment growth rates for UTI and Concorde - Concorde is expected to continue outperforming UTI in terms of enrollment growth [111][113] Question: Operating expenses and guidance for Q2 - Q2 operating expenses are expected to increase by about$ 10 million due to deferred investments from Q1 [84][116]