Laureate Education ((LAUR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Laureate Education’s recent earnings call reflected a predominantly positive sentiment, highlighting robust revenue and EBITDA performance, alongside growth in enrollments and strategic expansion in stock repurchases. The company did, however, acknowledge challenges such as timing impacts in Peru and economic sluggishness in Mexico.
Strong Third Quarter Revenue and EBITDA
Laureate Education reported impressive financial results for the third quarter, with revenue reaching $400 million and adjusted EBITDA at $95 million. These figures surpassed the guidance provided earlier, showcasing the company’s strong operational performance.
Positive Enrollment Growth
The company experienced significant enrollment growth, with new enrollment volumes increasing by 7% and total enrollment volumes by 6% compared to the same period last year. This growth underscores the effectiveness of Laureate’s strategies in attracting and retaining students.
Stock Repurchase Program Expansion
In a move that underscores its disciplined approach to capital allocation, Laureate’s Board authorized a $150 million increase to the stock repurchase program. This expansion highlights the company’s commitment to enhancing shareholder value.
Revenue Growth in Mexico and Peru
Year-to-date, Mexico’s revenue grew by 8%, with adjusted EBITDA increasing by 21%. Similarly, Peru’s revenue increased by 7%, with adjusted EBITDA up by 5%, both adjusted for timing impacts. These results reflect the company’s strong market position in these regions.
Impact of Timing on Peru’s Revenue and EBITDA
The company noted that approximately $26 million of revenue and $23 million in adjusted EBITDA shifted from the first quarter to the second half of the year due to timing differences. This shift highlights the importance of timing in financial reporting.
Pricing Pressure from Online Programs in Peru
Laureate anticipates a negative price mix impact due to the higher growth rate of fully online programs in Peru. This could potentially affect the average revenue per student, posing a challenge to the company’s pricing strategy.
Macroeconomic Sluggishness in Mexico
The macroeconomic environment in Mexico is described as sluggish, influenced by uncertainties in U.S. trade policy. This sluggishness presents a challenge for Laureate as it navigates economic headwinds in the region.
Forward-Looking Guidance
Looking ahead, Laureate Education raised its full-year 2025 guidance, with expected revenue between $1.681 billion and $1.686 billion, and adjusted EBITDA projected to be between $508 million and $512 million. The company also anticipates a strong fourth quarter, benefiting from an academic calendar shift, with revenue projected between $521 million and $526 million and adjusted EBITDA between $194 million and $198 million. The expansion of the stock repurchase program further underscores the company’s focus on capital allocation and long-term shareholder value.
In summary, Laureate Education’s earnings call conveyed a positive outlook, driven by strong financial performance and strategic initiatives. While challenges in Peru and Mexico were noted, the company’s proactive measures and forward-looking guidance reflect confidence in continued growth and shareholder value enhancement.