Laureate Education, Inc.

Good day and thank you for standing by. Welcome to the second quarter 2023 Laureate Education, Inc. 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 will need to press star 1 1 on your telephone and you will then hear an automated message advising your hand is raised. To withdraw your question, 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 Morse, Senior Vice President, Corporate Finance. Please go ahead.

Good morning, and thank you for joining us on today's call to discuss Laurier Education's second quarter 2023 results. Joining me on the call today are Iliff Sircanson, 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've also posted a supplementary presentation to the website, which you will be referring to during today's call. The call is being webcast and a complete recording will be available after the call. I'd 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. Forward-looking statements are subject to risks and uncertainties that may change at any time. 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, followed with the U.S. Securities and Exchange Commission, our 10Q 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-GET 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 presentation. Let me now turn the call over to Ayla.

Thank you, Adam, and good morning, everyone. Today, I'm pleased to report strong second quarter performance with operating results ahead of our expectations. Year-to-date new and total enrollments continue to trend well, increasing by 13% and 9% respectively compared to June of last year. In addition to favorable volume growth, pricing for our enrollment cycles completed in the first half of the year has been in line with to slightly head off our realized cost of inflation. We also continue to drive operating efficiencies and are on track to deliver more than 100 basis point improvement in adjusted EBITDA margins for the year. In addition to strong operating performance, we are benefiting from favorable currency trends. The Mexico peso and the Peruvian sol have appreciated by 12% and 5% respectively versus the US dollar during the first six months of the year. This is resulting in higher than expected revenue, adjusted EBITDA, and free cash flow generation. Based on these positive operating and foreign currency trends, we are raising the full year 2023 guidance at the midpoint by $70 million for revenue, and $21 million for adjusted EBITDA. L'Oréal's strategic focus on the high-growth markets of Mexico and Peru continue to deliver impressive results and is supported by three key factors. First, the steady increase in participation rates, driving robust demand for higher education in both countries, underpinned by the attractive wage premiums for individuals with higher education degrees and the affordable cost to get them. Second, the vital role of the private sector in advancing higher education due to limited government resources, with private institutions now providing over 50% of the combined university seats in Mexico and Peru. And third, substantial demand for the upskilling of the labor force. We expect the ongoing nearshoring trends to further intensify this demand in Mexico, providing a compelling opportunity for higher education institutions like L'Oréal. L'Oréal institutions are recognized leaders in affordable, quality higher education in both Mexico and Peru. And we distribute our products through face-to-face, online, and hybrid delivery mode. we remain committed to pursuing a financial profile within the next three to five years as follows. First, maintaining our organic revenue growth momentum of at least eight to 10% on a constant currency basis. Second, pursuing a capital light expansion strategy where 40 to 60% of our taught hours are delivered online and thus resulting in capital expenditures as a percentage of revenues to be below 5%. And finally, delivering adjusted EBITDA growth in the low teams on a constant currency basis. This in turn will help drive 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 growth agenda is supported by our leading brands and an unwavering commitment to academic excellence and innovation reflected in a program portfolio designed to meet the job requirements of tomorrow. At Laureate, our dedication goes beyond just academia, and we aim to make a meaningful and positive impact on society. Just to touch on a few recent highlights, UBC has been recognized as one of the top two universities in Peru working towards the United Nations Sustainable Development Goals, according to the latest impact ranking by Times Higher Education. Furthermore, La Republica recently reported that UPC has the highest number of graduates with the best paid careers in the Peruvian labor market. This validation comes from the Ponte and Carrera platform, which is promoted by the Ministry of Labor and Employment as well as the Ministry of Education. In Mexico, we are delighted to introduce our new Institutional Rector at UNITEC, making history with the first woman to hold this prestigious position at that university. Also at UNITEC, our ATICIPAN campus received a certificate of responsibility at the Diamond Award level for environmental balance in the academic institution a category. This accomplishment makes Unitec the first university in Mexico to achieve this level of award. These accomplishments demonstrate our commitment to delivering outstanding educational outcomes and furthering our positive impact in the communities we serve. Let's conclude by prepared remarks, and I will now turn the call over to Rick Bosker, for a more detailed financial overview of the second quarter and year-to-date performance, as well as further details on our improved 2023 full-year outlook. Rick?