Laureate Education, Inc.

Good day and thank you for standing by. Welcome to the Laureate Education Incorporated first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To remove yourself from the queue, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Morris, Senior Vice President, Corporate Finance. Please begin.

Good morning, and thank you for joining us on today's call to discuss Laurier Education's first quarter 2023 results. Joining me on the call are Alex Turcanton, President and Chief Executive Officer, and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website, at laureate.net. We have also posted a supplementary presentation to the website, which we'll be referring to during today's call. The call is being webcast, and a complete recording will be available after the call. I would like to remind you that some of the information we are providing today, including but not limited to our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forelooking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, our 10-Q filed earlier this morning, as well as other filings made with the SEC. In addition, All forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-GAAP measures that we discuss, including, among others, adjusted EBITDA and its related margin, total debt, net of cash, and free cash flow, are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentations. Let me now turn the call over to Ilis.

Thank you, Adam, and good morning, everyone. We recently completed our enrollment intake for the first quarter, which includes the primary intake cycle for Peru and a smaller intake for Mexico. 2023 is off to a very good start. New enrollments increased 17% year over year, and total enrollments were up 8%. continuing the growth momentum that we have been experiencing over the past two years. In addition to favorable volume growth, pricing for the intake cycle was also in line with our expectations. We are very encouraged by the strength of the first quarter intake, despite the headwinds from the macroeconomic conditions. It highlights that the consumers in Mexico and Peru are prioritizing higher education when allocating the discretionary spending given the life-changing impact of such education. Today, we are announcing an upward revision to our full year 2023 guidance. Notably, we have increased the lower end of the range for revenue and EBITDA on a constant currency basis, following the strong Q1 results, as well as increasing our overall guidance to reflect more favorable foreign currency rates. Our strategic decision to focus exclusively on the high growth markets of Mexico and Peru continues to deliver strong results for L'Oréal. Specifically, we are benefiting from three structural tailwinds. First, the steady increase in participation rates, which drives robust growth in demand for higher education in Mexico and Peru. The enabler for this increased demand is a significant wage premium earned by people with higher education, as well as the affordable cost to get such degrees. Secondly, the private sector is critical for the advancement of higher education, given limited government resources. On a combined basis, over 50% of the university seats in Mexico and Peru are provided by the private sector, and the private sector counts for the majority of the growth in the market. And thirdly, there is significant need for upskilling of labor in both Mexico and Peru. L'Oreal is a recognized leader for affordable quality higher education in Mexico and Peru, and we distribute our products through face-to-face, online, and hybrid delivery modes. We remain committed to striving to achieve a financial profile within the next three to five years in which, first and foremost, we maintain our organic revenue growth momentum of at least 8 to 10% on a constant currency basis. Secondly, pursue capital light expansion strategy where 40 to 60% of our taught hours are delivered online and thus resulting in capital expenditure as a percentage of revenue to be below 5%. And finally, deliver adjusted EBITDA growth in the low teens on a constant currency basis. This, in turn, will help drive the adjusted EBITDA margin to over 30% on a consolidated basis for L'Oréal and adjusted EBITDA to unleveled free cash flow conversion of 50% or more. Our success continues to be underpinned by our unwavering commitment to academic quality and innovation, along with industry-leading approach to designing strong academic offerings and delivering attractive student outcomes. LauraEd is committed to making a positive impact to society. We recently published our 2022 Impact Report, and I encourage you to go to our website and download a copy to learn more about the impact that our students, faculty, and institutions are having on their communities in Mexico and Peru. Just to touch on a few highlights. UVM and Unitech have both been recognized as socially responsible companies by the Mexican Center of Philanthropy for the 14th and 13th consecutive year, respectively. UPC is among Peru's top two most sustainable universities according to the 2022 Merco ESG Responsibility Ranking, which evaluates Latin America's top 100 sustainable companies based on environmental, social, and corporate governance criteria. UPM was the only university recognized in the 2022 Companies Transforming Peru initiative by providing over 44,000 preventative health services to Puente Piedra, one of the poorest communities in Lima, Peru. We are very proud of all of our institutions and the positive impact they are having. That concludes my prepared remarks, and I will now turn the call over to Rick Bosker for a more detailed financial overview of the first quarter performance, as well as further details on our improved 2023 full-year outlook.