Laureate Education, Inc.

Good day and welcome to the Fiscal Year 2024 Laureate Education, Inc. Earnings Conference Call. At this time, all participants will be in a listen-only mode. After the speaker 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. You will then hear an automated message advising your hand is raised. To withdraw your question, 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, Adam Morse, Senior Vice President of Finance. Please go ahead.

Good morning, and thank you for joining us on today's call to discuss Laredo Education's fourth quarter and year-end 2024 results. Joining me on the call today are Iliff Sarkanson, President and Chief Executive Officer, and Rick Buzzkirk, 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 we will 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. Forward-looking 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 a Form 10-K filed with the U.S. Securities and Exchange Commission 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 and among others, adjusted EBITDA and its related margin, adjusted net income, and adjusted earnings per share, 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 Eilis.

Thank you, Adam, and good morning, everyone. I am pleased to report another strong year for Laureate in 2024. We continue to deliver on our commitments to all stakeholders. Through disciplined execution, we achieved robust operating results, driving our margin profile to a new historic high and further reinforcing our dedication to continued growth and enhanced profitability. Our cash-equated business model and strong balance sheet enabled us to return more than $100 million of capital to shareholders in 2024. At the end of the year, we were essentially net debt free and remain well positioned to execute on our growth plans while prioritizing return of excess capital to shareholders. We are the largest higher education provider in both Mexico and Peru, and we have proven that excellence and scale can go hand in hand. In 2024, we continued to strengthen our academic offering and made further investments in our health sciences portfolio. This included the opening of six new medical schools at our campuses throughout Mexico and Peru, along with two new dental schools and one new veterinary school. Our institutions are consistently ranked among the top universities in their respective countries and recognized for their leadership in academic excellence. Today, I am proud to share our latest ratings from QSR, one of the world's leading independent university ranking and rating organizations. For the second consecutive year, all our universities in Mexico and Peru have achieved five-star rating, the highest rating attainable in employability, online learning, inclusiveness, and social impact. In addition to QS star ratings, our institutions continue to earn recognition in the local market for academic excellence and brand leadership. A few examples from this past year include In Peru, for the fourth consecutive year, UPC was ranked the number one education brand in the country by Merco. And even more impressively, it was ranked number 11 among all foreign and domestic consumer goods brands in the country. And we ranked ahead of companies such as Toyota and Microsoft and just behind Google and Nestle. In Mexico, UVM was ranked the number two best private university according to Reader's Digest 2024 rankings, second only to Tech de Monterrey. Additionally, our value brands in both markets, UPN in Peru and Unitec in Mexico, are now ranked in the top 10 in their respective countries by the same ranking agencies. I extend my deepest gratitude to our faculty and staff for their continued commitment to academic excellence, and I congratulate them on these outstanding recognitions. Looking ahead to 2025, we see continued growth opportunities in our local markets, including building and outfitting four new campuses for our value brands, two of which we plan to open during 2025. This represents our first new campus launches since 2019. We are also expanding our reach through continued investment in digital education. We remain confident that the demand for quality higher education in both Mexico and Peru will continue to increase. This demand is fueled by rising participation rates, strong wage premiums for graduates, and the affordability of our programs. Additionally, the private sector, which accounts for over 55% of the combined university seats in the two countries, plays a critical role in the market due to limited public resources. Despite some geopolitical uncertainties in Mexico, particularly the recent tariff threats and the related trade complications for the United States, we remain cautiously optimistic. Mexico has strong historical ties to the United States that are important to both countries. Mexico also favors a more dovish monetary policy, and it maintains a strong fiscal discipline in its 2025 national budget. All these factors provide what we believe to be a solid base for growth in the coming years. In Peru, the economy has recovered from the recent recession which began in mid-2023. GDP growth for 2025 is expected to reach approximately 3%. Peru should benefit from a favorable macro backdrop, including low interest rates, stable inflation, and a currency that is highly correlated to US dollar-denominated commodity prices. We closely monitor political and external developments in both markets, especially as the U.S. and Mexico trade discussions evolve. We do expect continued volatility in the Mexican peso in the coming months. And based on current exchange rates, we anticipate significant foreign currency translation headwinds in our 2025 reported financial results. As a reminder, we are not exposed to any material transaction risks from foreign currency as our revenues and operating expenses are matched in local markets. But as a US dollar denominated reporting company, we are subject to translation impacts. Our guidance indicates that we will be flat to slightly down year over year in reported revenues for 2025. However, we still expect to deliver US dollar reported growth in both adjusted EBITDA and unlevered free cash flow due to the stability of the Peruvian Sol, robust momentum in local currency revenue growth, and our continued margin expansion efforts. That concludes my prepared remarks, and I will now turn the call over to Rick Boskirk for a more comprehensive financial overview of the fourth quarter and the full year 2024 performance, as well as further details on our 2025 outlook.