Workflow
Perdoceo Education (PRDO) - 2024 Q4 - Earnings Call Transcript
PRDOPerdoceo Education (PRDO)2025-02-19 03:27
Filings

Financial Data and Key Metrics Changes - The company reported fourth quarter net income of 31.5million,or31.5 million, or 0.47 per diluted share, while adjusted earnings per diluted share was 0.50[18]−Full−yearnetincomewas0.50 [18] - Full-year net income was 147.6 million, or 2.19perdilutedshare,comparedto2.19 per diluted share, compared to 147.7 million, or 2.18perdilutedshareintheprioryear[26]−Adjustedearningsperdilutedshareincreasedto2.18 per diluted share in the prior year [26] - Adjusted earnings per diluted share increased to 2.29 from 2.10intheprioryear[26]−Full−yearoperatingincomeroseto2.10 in the prior year [26] - Full-year operating income rose to 174.3 million, an increase of 23.8millioncomparedtotheprioryear[26]BusinessLineDataandKeyMetricsChanges−AtCTU,totalstudentenrollmentsincreasedby8.123.8 million compared to the prior year [26] Business Line Data and Key Metrics Changes - At CTU, total student enrollments increased by 8.1% compared to the prior year-end [19] - At AIU System, total student enrollments increased by 11.8% as it reverted to normalized operations [19] - Full-year revenue at CTU decreased by 2.6% to 456.9 million, but fourth quarter revenue increased by 9.7% to 114.8million[33][34]−AIUSystem′sfull−yearrevenuedecreasedby11.1114.8 million [33][34] - AIU System's full-year revenue decreased by 11.1% to 213.5 million, while fourth quarter revenue increased by 19.1% to 51.4million[35]MarketDataandKeyMetricsChanges−Thecompanyexperiencedtotalstudentenrollmentgrowththrough2024,supportedbyfederalstudentaidinitiatives[11]−TheacquisitionoftheUniversityofSt.AugustineforHealthSciencesisexpectedtodiversifyandexpandacademicofferingsinthehealthsciencesfield[17]CompanyStrategyandDevelopmentDirection−Thecompanyfocusesonenhancingstudentretentionandengagementwhilemakingselectiveinvestmentsintechnologyanddataanalytics[12]−TheacquisitionofSt.Augustineisexpectedtobeaccretivetooperatingincomein2025andprovidefurthergrowthin2026[17]−Thecompanyaimstomaintainabalancedcapitalallocationstrategy,prioritizinginvestmentsinorganicprojectsandreturningcapitaltoshareholders[46]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedoptimismfor2025,expectingtotalrevenueandenrollmentstoincreasecomparedto2024[32]−Thecompanyanticipatesthathighlevelsofstudentretentionandengagementwillcontinue,offsettingheadwindsfromchangesinfederalstudentloaninitiatives[51]−Theeffectivetaxratefor2025isexpectedtobebetween25.551.4 million [35] Market Data and Key Metrics Changes - The company experienced total student enrollment growth through 2024, supported by federal student aid initiatives [11] - The acquisition of the University of St. Augustine for Health Sciences is expected to diversify and expand academic offerings in the health sciences field [17] Company Strategy and Development Direction - The company focuses on enhancing student retention and engagement while making selective investments in technology and data analytics [12] - The acquisition of St. Augustine is expected to be accretive to operating income in 2025 and provide further growth in 2026 [17] - The company aims to maintain a balanced capital allocation strategy, prioritizing investments in organic projects and returning capital to shareholders [46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, expecting total revenue and enrollments to increase compared to 2024 [32] - The company anticipates that high levels of student retention and engagement will continue, offsetting headwinds from changes in federal student loan initiatives [51] - The effective tax rate for 2025 is expected to be between 25.5% and 26.5% [41] Other Important Information - The company returned approximately 38.5 million to shareholders through dividends and stock buybacks during 2024 [15] - Cash flow from operations for the full year was 161.6million,anincreasefrom161.6 million, an increase from 112 million in the prior year [42] - The company ended the year with 591.5 million in cash and equivalents, excluding the St. Augustine purchase [43] Q&A Session Summary Question: What are the expectations for 2025 in terms of revenue and enrollments? - The company expects total revenue and enrollments to increase in 2025, driven by strong prospective student interest and sustained improvements in retention and engagement [32] Question: How will the acquisition of St. Augustine impact financial performance? - The acquisition is expected to be accretive to operating income in 2025 and contribute positively to cash flow from operations [17][45] Question: What is the outlook for adjusted earnings per diluted share in 2025? - Adjusted earnings per diluted share is expected to range between 2.31 and $2.51, reflecting the impact of incremental expenses related to the acquisition [50]