Adtalem Global Education Fiscal Second Quarter 2024 Results; Guidance Raised

Adtalem Global Education Inc. (NYSE: ATGE) today reported second quarter fiscal 2024 results (ended Dec. 31, 2023) reflecting accelerated total enrollment and revenue growth, underpinned by strong profitability and high-quality academic outcomes through executing Growth with Purpose strategy.

“Adtalem once again performed ahead of expectations this quarter, solidifying our position as a leading healthcare educator,” said Steve Beard, president, and chief executive officer, Adtalem Global Education. “Our success was primarily driven by the continued execution of our Growth with Purpose strategy, which has yielded robust organic revenue growth, improved operational efficiencies and outstanding student outcomes. The Company’s foundation remains strong, affording us the opportunity to solidify our market-leading position and evolve the way education is delivered.”

Beard continued, “At a time when post-secondary and professional healthcare education is more critical than ever, we are continuing to invest in expanding our national reach to create additional opportunities for our institutions to connect with prospective students and employers, and provide opportunities for academic achievement and professional success. Reflecting the higher level of sustainable enrollment and our confidence in our ability to continue to deliver strong top- and bottom-line performance, we are raising our fiscal year 2024 guidance. We are increasingly well-positioned to make an outsized positive impact on U.S. healthcare workforce, delivering practice-ready clinicians at scale.”

Financial Highlights

Selected financial data for the three months ended Dec. 31, 2023:

• Revenue of $393.2 million increased 8.4% compared with the prior year.
• Operating income was $58.6 million, compared with $45.6 million in the prior year; adjusted operating income was $75.6 million, compared with $77.9 million in the prior year.
• Net income was $39.9 million, compared with $24.7 million in the prior year; adjusted net income was $50.3 million, compared with $53.8 million in the prior year.
• Diluted earnings per share was $0.98, compared with $0.53 in the prior year; adjusted earnings per share was $1.23, compared with $1.17 in the prior year.
• Adjusted EBITDA was $92.6 million, compared with $90.5 million in the prior year; adjusted EBITDA margin was 23.5%, compared with 25.0% in the prior year.

Business Highlights

• Chamberlain University continues to build a robust pipeline of nurses through programs like its Bachelor of Science in Nursing (BSN) Online Option, which offers flexibility and experiential learning opportunities to students in 32 states. The program has more than 1,100 current enrollees in just three years since launch.
• Walden University remains committed to driving affordability and accessibility for working professionals through its Believe and Achieve™ scholarship, promoting student persistence and graduation by rewarding students for progress towards their degree, with tuition savings with over 15,000 students participating.
• Chamberlain’s Psychiatric-Mental Health Nurse Practitioner program currently enrolls 2,200 students and Walden’s Social Behavioral Health programs enroll 18,000 students, addressing the nation’s growing challenges related to mental health. As one in five U.S. adults experience mental illness each year, according to Substance Abuse and Mental Health Services Administration, our institutions continue to be essential to aid in resolving this issue.
• Ross University School of Veterinary Medicine (RUSVM) continues to amplify its impact and advance One Health through its newest partnership with the Government of St. Kitts and Nevis. Through the partnership they will transform St. Kitts and Nevis into a sustainable island state where RUSVM students and faculty will provide support through research in project areas put forth by the Ministries of Health and Agriculture. Learn more about RUSVM’s commitment to One Health and the role veterinarians play in achieving the best health results for all.
• Ross University School of Medicine’s (RUSM) Return Home clinical offering is fostering a diverse physician pipeline for local communities, with RUSM students now able to complete clinical rotations within the communities they reside through select partner hospitals.

Segment Highlights

Chamberlain

$ in millions		Three Months Ended Dec. 31,
		2023	2022	% Change
Revenue		$153.6	$141.4	8.6%
Operating Income		$29.6	$33.2	(10.8)%
Adj. Operating Income		$29.6	$33.2	(10.8)%
Adj. EBITDA		$36.9	$37.7	(2.2)%
Total Students (1)		35,592	33,390	6.6%

• Total student enrollment increased 6.6% compared with the prior year, driven by continued growth in pre-licensure and post-licensure nursing programs as well as high persistence.

Walden

$ in millions		Three Months Ended Dec. 31,
		2023	2022	% Change
Revenue		$146.8	$131.9	11.3%
Operating Income		$21.6	$12.8	68.8%
Adj. Operating Income		$30.2	$29.0	3.9%
Adj. EBITDA		$34.6	$31.6	9.8%
Total Students (1)		40,971	37,956	7.9%

• Total student enrollment increased 7.9% compared with the prior year, driven by growth in healthcare and non-healthcare programs and higher persistence.

Medical and Veterinary

$ in millions		Three Months Ended Dec. 31,
		2023	2022	% Change
Revenue		$92.9	$89.5	3.8%
Operating Income		$22.0	$22.5	(2.0)%
Adj. Operating Income		$22.1	$22.5	(2.0)%
Adj. EBITDA		$26.4	$25.8	2.3%
Total Students (1)		5,209	5,634	(7.5)%

• Medical and Veterinary schools do not have a new enrollment period starting in Q2 FY 2024. Q2 FY 2024 enrollment period is the same as Q1 FY 2024 enrollment period and corresponding reported enrollment data.

^{(1) Represents total students attending sessions during each institution’s most recent enrollment period in Q2 FY 2024 and Q2 FY 2023.}

Fiscal Year 2024 Outlook

Adtalem guidance for fiscal year 2024, raises revenue guidance to a range of $1,520 million to $1,560 million from $1,470 million to $1,530 million, and raises adjusted earnings per share to be in the range of $4.55 to $4.75 from $4.25 to $4.45.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal 2024 second quarter results today at 4:00 p.m. CT (5:00 p.m. ET).

The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) stating “Adtalem earnings call” or use conference ID: 13743388. The call will be simulcast through the Adtalem investor relations website at: https://investors.adtalem.com.

Adtalem will archive a replay of the call for 30 days. To access the replay, dial +1 877-660-6853 (U.S.) or +1 201-612-7415 (international), conference ID: 13743388, or visit the Adtalem investor relations website.

About Adtalem Global Education

Adtalem Global Education (NYSE: ATGE) is a national leader in post-secondary education and leading provider of professional talent to the healthcare industry. With a dedicated focus on driving strong outcomes that increase workforce preparedness, Adtalem empowers a diverse learner population to achieve their goals and make inspiring contributions to their communities. Adtalem is the parent organization of American University of the Caribbean School of Medicine, Chamberlain University, Ross University School of Medicine, Ross University School of Veterinary Medicine and Walden University. Adtalem’s family of institutions has more than 300,000 alumni and nearly 10,000 employees. Adtalem was named one of America’s Most Responsible Companies in 2021 and 2023 by Newsweek and Statista, and one of America’s Best Employers for Diversity in 2021 and 2022 by Forbes and Statista. Visit Adtalem.com for more information and follow on X, formerly known as Twitter, and LinkedIn.

Forward-Looking Statements

Certain statements contained in this release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements can also be identified by words such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risk and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC), the Form 8-K filed with the SEC today and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.

A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of special items that may be incurred in the future, although these special items could be material to Adtalem's results in accordance with GAAP.

Adtalem Global Education Inc. Consolidated Balance Sheets (unaudited) (in thousands)
		December 31,			June 30,
		2023			2023
Assets:
Current assets:
Cash and cash equivalents		$	182,894		$	273,689
Restricted cash			3,183			1,386
Accounts receivable, net			133,666			102,749
Prepaid expenses and other current assets			58,356			100,715
Total current assets			378,099			478,539
Noncurrent assets:
Property and equipment, net			260,484			258,522
Operating lease assets			176,863			174,677
Deferred income taxes			58,212			56,694
Intangible assets, net			792,328			812,338
Goodwill			961,262			961,262
Other assets, net			65,852			68,509
Assets held for sale			7,825			—
Total noncurrent assets			2,322,826			2,332,002
Total assets		$	2,700,925		$	2,810,541
Liabilities and shareholders' equity:
Current liabilities:
Accounts payable		$	88,093		$	81,812
Accrued payroll and benefits			45,928			52,041
Accrued liabilities			97,675			105,806
Deferred revenue			135,281			153,871
Current operating lease liabilities			31,596			37,673
Total current liabilities			398,573			431,203
Noncurrent liabilities:
Long-term debt			696,373			695,077
Long-term operating lease liabilities			168,603			163,441
Deferred income taxes			27,243			26,068
Other liabilities			40,734			37,416
Total noncurrent liabilities			932,953			922,002
Total liabilities			1,331,526			1,353,205
Commitments and contingencies
Total shareholders' equity			1,369,399			1,457,336
Total liabilities and shareholders' equity		$	2,700,925		$	2,810,541

Adtalem Global Education Inc. Consolidated Statements of Income (unaudited) (in thousands, except per share data)
		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2023				2022				2023				2022
Revenue		$	393,242			$	362,834			$	762,087			$	717,103
Operating cost and expense:
Cost of educational services			172,069				159,303				340,687				318,948
Student services and administrative expense			155,584				141,802				321,679				288,187
Restructuring expense			68				1,363				744				16,428
Business integration expense			6,909				14,816				12,171				24,356
Total operating cost and expense			334,630				317,284				675,281				647,919
Operating income			58,612				45,550				86,806				69,184
Interest expense			(16,693	)			(15,589	)			(32,350	)			(33,349	)
Other income (expense), net			3,563				(1,440	)			5,777				(679	)
Income from continuing operations before income taxes			45,482				28,521				60,233				35,156
Provision for income taxes			(7,769	)			(4,395	)			(10,561	)			(5,517	)
Income from continuing operations			37,713				24,126				49,672				29,639
Discontinued operations:
Income (loss) from discontinued operations before income taxes			2,926				524				1,161				(2,741	)
Gain (loss) on disposal of discontinued operations before income taxes			—				185				—				(3,174	)
(Provision for) benefit from income taxes			(748	)			(182	)			(296	)			1,521
Income (loss) from discontinued operations			2,178				527				865				(4,394	)
Net income and comprehensive income		$	39,891			$	24,653			$	50,537			$	25,245
Earnings (loss) per share:
Basic:
Continuing operations		$	0.95			$	0.53			$	1.22			$	0.65
Discontinued operations		$	0.05			$	0.01			$	0.02			$	(0.10	)
Total basic earnings per share		$	1.00			$	0.54			$	1.24			$	0.56
Diluted:
Continuing operations		$	0.92			$	0.52			$	1.20			$	0.64
Discontinued operations		$	0.05			$	0.01			$	0.02			$	(0.10	)
Total diluted earnings per share		$	0.98			$	0.53			$	1.22			$	0.55
Weighted-average shares outstanding:
Basic shares			39,872				45,425				40,636				45,350
Diluted shares			40,787				46,121				41,486				46,232

Adtalem Global Education Inc. Consolidated Statements of Cash Flows (unaudited) (in thousands)
		Six Months Ended
		December 31,
		2023				2022
Operating activities:
Net income		$	50,537			$	25,245
(Income) loss from discontinued operations			(865	)			4,394
Income from continuing operations			49,672				29,639
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense			13,505				8,113
Amortization and impairments to operating lease assets			17,340				28,612
Depreciation			20,714				21,461
Amortization of intangible assets			20,010				34,704
Amortization and write-off of debt discount and issuance costs			2,310				6,819
Provision for bad debts			23,024				14,275
Deferred income taxes			(343	)			(245	)
Loss on disposals, accelerated depreciation, and impairments to property and equipment			38				3,483
Gain on extinguishment of debt			—				(71	)
(Gain) loss on investments			(575	)			4,950
Unrealized loss on assets held for sale			647				—
Changes in assets and liabilities:
Accounts receivable			(42,429	)			(25,045	)
Prepaid expenses and other current assets			(2,143	)			494
Accounts payable			7,824				13,233
Accrued payroll and benefits			(6,073	)			(25,295	)
Accrued liabilities			25,130				(4,849	)
Deferred revenue			(13,540	)			(28,424	)
Operating lease liabilities			(20,441	)			(25,923	)
Other assets and liabilities			(11,601	)			(13,654	)
Net cash provided by operating activities-continuing operations			83,069				42,277
Net cash provided by (used in) operating activities-discontinued operations			9,515				(862	)
Net cash provided by operating activities			92,584				41,415
Investing activities:
Capital expenditures			(30,328	)			(9,747	)
Proceeds from sale of marketable securities			626				1,256
Purchases of marketable securities			(498	)			(1,257	)
Net cash used in investing activities-continuing operations			(30,200	)			(9,748	)
Payment for working capital adjustment for sale of business			—				(3,174	)
Net cash used in investing activities			(30,200	)			(12,922	)
Financing activities:
Proceeds from exercise of stock options			15,313				1,422
Employee taxes paid on withholding shares			(6,505	)			(4,108	)
Proceeds from stock issued under Colleague Stock Purchase Plan			359				289
Repurchases of common stock for treasury			(160,549	)			—
Payment on equity forward contract			—				(13,162	)
Repayments of long-term debt			—				(150,861	)
Net cash used in financing activities			(151,382	)			(166,420	)
Net decrease in cash, cash equivalents and restricted cash			(88,998	)			(137,927	)
Cash, cash equivalents and restricted cash at beginning of period			275,075				347,937
Cash, cash equivalents and restricted cash at end of period		$	186,077			$	210,010
Non-cash investing and financing activities:
Accrued capital expenditures		$	9,062			$	5,209
Accrued liability for repurchases of common stock		$	2,400			$	—
Accrued excise tax on share repurchases		$	2,358			$	—

Adtalem Global Education Inc. Segment Information (unaudited) (in thousands)
		Three Months Ended																Six Months Ended
		December 31,																December 31,
										Increase/(Decrease)																Increase/(Decrease)
		2023				2022				$				%				2023				2022				$				%
Revenue:
Chamberlain		$	153,553			$	141,396			$	12,157			8.6		%		$	296,149			$	276,801			$	19,348			7.0		%
Walden			146,808				131,940				14,868			11.3		%			288,416				262,841				25,575			9.7		%
Medical and Veterinary			92,881				89,498				3,383			3.8		%			177,522				177,461				61			0.0		%
Total consolidated revenue		$	393,242			$	362,834			$	30,408			8.4		%		$	762,087			$	717,103			$	44,984			6.3		%
Operating income (loss):
Chamberlain		$	29,640			$	33,229			$	(3,589	)		(10.8	)	%		$	53,964			$	59,413			$	(5,449	)		(9.2	)	%
Walden			21,598				12,795				8,803			68.8		%			23,536				15,728				7,808			49.6		%
Medical and Veterinary			22,020				22,462				(442	)		(2.0	)	%			36,383				32,700				3,683			11.3		%
Home Office and Other			(14,646	)			(22,936	)			8,290			36.1		%			(27,077	)			(38,657	)			11,580			30.0		%
Total consolidated operating income		$	58,612			$	45,550			$	13,062			28.7		%		$	86,806			$	69,184			$	17,622			25.5		%

Non-GAAP Financial Measures and Reconciliations

We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in the subsequent GAAP to non-GAAP reconciliation tables:

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business integration expense, intangible amortization expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and (income) loss from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business integration expense, intangible amortization expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and (income) loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business integration expense, intangible amortization expense, litigation reserve, and loss on assets held for sale. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for (income) loss from discontinued operations, interest expense, other expense (income), net, provision for income taxes, depreciation and amortization, stock-based compensation, restructuring expense, business integration expense, litigation reserve, and loss on assets held for sale. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other expense (income), net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.

Free cash flow (most comparable GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.

Net debt – Defined as long-term debt less cash and cash equivalents.

Net leverage – Defined as net debt divided by adjusted EBITDA.

A description of special items in our non-GAAP financial measures described above are as follows:

• Restructuring expense primarily related to real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.
• Business integration expense include expenses related to the Walden acquisition and certain costs related to growth transformation initiatives. We do not include normal, recurring, cash operating expenses in our business integration expense.
• Intangible amortization expense on acquired intangible assets.
• Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, reserves related to significant litigation, impairment of an equity investment, and loss on assets held for sale related to a fair value write-down on assets.
• (Income) loss from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, a (gain) loss on sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices, and the earn-outs we received. 

Adtalem Global Education Inc. Non-GAAP Operating Income by Segment (unaudited) (in thousands)
		Three Months Ended																Six Months Ended
		December 31,																December 31,
										Increase/(Decrease)																Increase/(Decrease)
		2023				2022				$				%				2023				2022				$				%
Chamberlain:
Operating income (GAAP)		$	29,640			$	33,229			$	(3,589	)		(10.8	)	%		$	53,964			$	59,413			$	(5,449	)		(9.2	)	%
Restructuring expense			—				—				—								—				818				(818	)
Adjusted operating income (non-GAAP)		$	29,640			$	33,229			$	(3,589	)		(10.8	)	%		$	53,964			$	60,231			$	(6,267	)		(10.4	)	%
Operating margin (GAAP)			19.3		%		23.5		%										18.2		%		21.5		%
Operating margin (non-GAAP)			19.3		%		23.5		%										18.2		%		21.8		%
Walden:
Operating income (GAAP)		$	21,598			$	12,795			$	8,803			68.8		%		$	23,536			$	15,728			$	7,808			49.6		%
Restructuring expense			(776	)			41				(817	)							(776	)			3,121				(3,897	)
Intangible amortization expense			9,333				16,176				(6,843	)							20,010				34,704				(14,694	)
Litigation reserve			—				—				—								18,500				—				18,500
Adjusted operating income (non-GAAP)		$	30,155			$	29,012			$	1,143			3.9		%		$	61,270			$	53,553			$	7,717			14.4		%
Operating margin (GAAP)			14.7		%		9.7		%										8.2		%		6.0		%
Operating margin (non-GAAP)			20.5		%		22.0		%										21.2		%		20.4		%
Medical and Veterinary:
Operating income (GAAP)		$	22,020			$	22,462			$	(442	)		(2.0	)	%		$	36,383			$	32,700			$	3,683			11.3		%
Restructuring expense			71				87				(16	)							185				6,913				(6,728	)
Adjusted operating income (non-GAAP)		$	22,091			$	22,549			$	(458	)		(2.0	)	%		$	36,568			$	39,613			$	(3,045	)		(7.7	)	%
Operating margin (GAAP)			23.7		%		25.1		%										20.5		%		18.4		%
Operating margin (non-GAAP)			23.8		%		25.2		%										20.6		%		22.3		%
Home Office and Other:
Operating loss (GAAP)		$	(14,646	)		$	(22,936	)		$	8,290			36.1		%		$	(27,077	)		$	(38,657	)		$	11,580			30.0		%
Restructuring expense			773				1,235				(462	)							1,335				5,576				(4,241	)
Business integration expense			6,909				14,816				(7,907	)							12,171				24,356				(12,185	)
Loss on assets held for sale			647				—				647								647				—				647
Adjusted operating loss (non-GAAP)		$	(6,317	)		$	(6,885	)		$	568			8.2		%		$	(12,924	)		$	(8,725	)		$	(4,199	)		(48.1	)	%
Adtalem Global Education:
Operating income (GAAP)		$	58,612			$	45,550			$	13,062			28.7		%		$	86,806			$	69,184			$	17,622			25.5		%
Restructuring expense			68				1,363				(1,295	)							744				16,428				(15,684	)
Business integration expense			6,909				14,816				(7,907	)							12,171				24,356				(12,185	)
Intangible amortization expense			9,333				16,176				(6,843	)							20,010				34,704				(14,694	)
Litigation reserve			—				—				—								18,500				—				18,500
Loss on assets held for sale			647				—				647								647				—				647
Adjusted operating income (non-GAAP)		$	75,569			$	77,905			$	(2,336	)		(3.0	)	%		$	138,878			$	144,672			$	(5,794	)		(4.0	)	%
Operating margin (GAAP)			14.9		%		12.6		%										11.4		%		9.6		%
Operating margin (non-GAAP)			19.2		%		21.5		%										18.2		%		20.2		%

Adtalem Global Education Inc. Non-GAAP Adjusted EBITDA by Segment (unaudited) (in thousands)
		Three Months Ended																Six Months Ended
		December 31,																December 31,
										Increase/(Decrease)																Increase/(Decrease)
		2023				2022				$				%				2023				2022				$				%
Chamberlain:
Operating income (GAAP)		$	29,640			$	33,229			$	(3,589	)		(10.8	)	%		$	53,964			$	59,413			$	(5,449	)		(9.2	)	%
Restructuring expense			—				—				—								—				818				(818	)
Depreciation			5,162				4,099				1,063								9,478				8,580				898
Stock-based compensation			2,089				404				1,685								4,996				2,677				2,319
Adjusted EBITDA (non-GAAP)		$	36,891			$	37,732			$	(841	)		(2.2	)	%		$	68,438			$	71,488			$	(3,050	)		(4.3	)	%
Adjusted EBITDA margin (non-GAAP)			24.0		%		26.7		%										23.1		%		25.8		%
Walden:
Operating income (GAAP)		$	21,598			$	12,795			$	8,803			68.8		%		$	23,536			$	15,728			$	7,808			49.6		%
Restructuring expense			(776	)			41				(817	)							(776	)			3,121				(3,897	)
Intangible amortization expense			9,333				16,176				(6,843	)							20,010				34,704				(14,694	)
Litigation reserve			—				—				—								18,500				—				18,500
Depreciation			2,305				2,269				36								4,467				4,864				(397	)
Stock-based compensation			2,188				286				1,902								4,052				2,191				1,861
Adjusted EBITDA (non-GAAP)		$	34,648			$	31,567			$	3,081			9.8		%		$	69,789			$	60,608			$	9,181			15.1		%
Adjusted EBITDA margin (non-GAAP)			23.6		%		23.9		%										24.2		%		23.1		%
Medical and Veterinary:
Operating income (GAAP)		$	22,020			$	22,462			$	(442	)		(2.0	)	%		$	36,383			$	32,700			$	3,683			11.3		%
Restructuring expense			71				87				(16	)							185				6,913				(6,728	)
Depreciation			3,110				3,031				79								6,054				6,136				(82	)
Stock-based compensation			1,196				229				967								2,836				1,704				1,132
Adjusted EBITDA (non-GAAP)		$	26,397			$	25,809			$	588			2.3		%		$	45,458			$	47,453			$	(1,995	)		(4.2	)	%
Adjusted EBITDA margin (non-GAAP)			28.4		%		28.8		%										25.6		%		26.7		%
Home Office and Other:
Operating loss (GAAP)		$	(14,646	)		$	(22,936	)		$	8,290			36.1		%		$	(27,077	)		$	(38,657	)		$	11,580			30.0		%
Restructuring expense			773				1,235				(462	)							1,335				5,576				(4,241	)
Business integration expense			6,909				14,816				(7,907	)							12,171				24,356				(12,185	)
Loss on assets held for sale			647				—				647								647				—				647
Depreciation			359				1,257				(898	)							715				1,881				(1,166	)
Stock-based compensation			577				1,049				(472	)							1,621				1,541				80
Adjusted EBITDA (non-GAAP)		$	(5,381	)		$	(4,579	)		$	(802	)		(17.5	)	%		$	(10,588	)		$	(5,303	)		$	(5,285	)		(99.7	)	%
Adtalem Global Education:
Net income (GAAP)		$	39,891			$	24,653			$	15,238			61.8		%		$	50,537			$	25,245			$	25,292			100.2		%
(Income) loss from discontinued operations			(2,178	)			(527	)			(1,651	)							(865	)			4,394				(5,259	)
Interest expense			16,693				15,589				1,104								32,350				33,349				(999	)
Other expense (income), net			(3,563	)			1,440				(5,003	)							(5,777	)			679				(6,456	)
Provision for income taxes			7,769				4,395				3,374								10,561				5,517				5,044
Operating income (GAAP)			58,612				45,550				13,062								86,806				69,184				17,622
Depreciation and amortization			20,269				26,832				(6,563	)							40,724				56,165				(15,441	)
Stock-based compensation			6,050				1,968				4,082								13,505				8,113				5,392
Restructuring expense			68				1,363				(1,295	)							744				16,428				(15,684	)
Business integration expense			6,909				14,816				(7,907	)							12,171				24,356				(12,185	)
Litigation reserve			—				—				—								18,500				—				18,500
Loss on assets held for sale			647				—				647								647				—				647
Adjusted EBITDA (non-GAAP)		$	92,555			$	90,529			$	2,026			2.2		%		$	173,097			$	174,246			$	(1,149	)		(0.7	)	%
Adjusted EBITDA margin (non-GAAP)			23.5		%		25.0		%										22.7		%		24.3		%

Adtalem Global Education Inc. Non-GAAP Earnings Disclosure (unaudited) (in thousands, except per share data)
		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2023				2022				2023				2022
Net income (GAAP)		$	39,891			$	24,653			$	50,537			$	25,245
Restructuring expense			68				1,363				744				16,428
Business integration expense			6,909				14,816				12,171				24,356
Intangible amortization expense			9,333				16,176				20,010				34,704
Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, and loss on assets held for sale			647				6,402				19,147				9,226
Income tax impact on non-GAAP adjustments (1)			(4,402	)			(9,111	)			(12,095	)			(18,982	)
(Income) loss from discontinued operations			(2,178	)			(527	)			(865	)			4,394
Adjusted net income (non-GAAP)		$	50,268			$	53,772			$	89,649			$	95,371
(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

		Three Months Ended								Six Months Ended
		December 31,								December 31,
		2023				2022				2023				2022
Diluted earnings per share (GAAP)		$	0.98			$	0.53			$	1.22			$	0.55
Effect on diluted earnings per share:
Restructuring expense			0.00				0.03				0.02				0.36
Business integration expense			0.17				0.32				0.29				0.53
Intangible amortization expense			0.23				0.35				0.48				0.75
Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, and loss on assets held for sale			0.02				0.14				0.46				0.20
Income tax impact on non-GAAP adjustments (1)			(0.11	)			(0.20	)			(0.29	)			(0.41	)
(Income) loss from discontinued operations			(0.05	)			(0.01	)			(0.02	)			0.10
Adjusted earnings per share (non-GAAP)		$	1.23			$	1.17			$	2.16			$	2.06
Diluted shares used in non-GAAP EPS calculation			40,787				46,121				41,486				46,232
Note: May not sum due to rounding. (1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

Adtalem Global Education Inc. Non-GAAP Free Cash Flow Disclosure (unaudited) (in thousands)
		Three Months Ended								Six Months Ended								Twelve Months Ended
		FY24				FY23				FY24				FY23				FY24				FY24				FY23				FY23				FY23
		Q2				Q2				Q2				Q2				Q2				Q1				Q4				Q3				Q2
Net cash provided by (used in) operating activities-continuing operations (GAAP)		$	(7,657	)		$	(49,199	)		$	83,069			$	42,277			$	246,476			$	204,934			$	205,684			$	255,052			$	225,247
Capital expenditures			(15,282	)			(4,196	)			(30,328	)			(9,747	)			(57,589	)			(46,503	)			(37,008	)			(27,861	)			(26,029	)
Free cash flow (non-GAAP)		$	(22,939	)		$	(53,395	)		$	52,741			$	32,530			$	188,887			$	158,431			$	168,676			$	227,191			$	199,218

Adtalem Global Education Inc. Non-GAAP Net Leverage Disclosure (unaudited) (in thousands)
		Twelve Months Ended
		December 31, 2023
Adtalem Global Education:
Net income (GAAP)		$	118,650
Net loss from discontinued operations			3,135
Interest expense			62,101
Other income, net			(13,421	)
Provision for income taxes			15,327
Depreciation and amortization			87,373
Stock-based compensation			19,691
Restructuring expense			3,133
Business integration expense			30,476
Litigation reserve			28,500
Loss on assets held for sale			647
Gain on sale of assets			(13,317	)
Adjusted EBITDA (non-GAAP)		$	342,295
		December 31, 2023
Long-term debt		$	708,283
Less: Cash and cash equivalents			(182,894	)
Net debt (non-GAAP)		$	525,389
Net leverage (non-GAAP)			1.5 x

 

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