Perdoceo Education Corporation

Good afternoon. Thank you for attending today's Per Docio Education Corporation third quarter 2022 earnings conference call. My name is Hannah and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call. I would now like to pass the conference over to our host, David Schneider with Investor Relations. Please go ahead.

Thank you, Hannah. Good afternoon, everyone, and thank you for joining us for our third quarter 2022 earnings call. With me on the call today is Todd Nelson, Executive Chairman, Andrew Hurst, President and Chief Executive Officer, and Ashish Gia, Chief Financial Officer. This conference call is being webcast live within the investor relations section at ProdocioED.com. A webcast replay will also be available on our site, and you can always contact the Alpha IR Group for investor relations support. Let me remind you that this afternoon's earnings release and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions made by and information currently available to Cordocio Education and involve risks and uncertainties that could cause actual future results, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include, but are not limited to, those factors identified in Prodocio's annual report on Form 10-K for the year ended December 31, 2021, and subsequent filings within the Securities and Exchange Commission. Except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments, or change circumstances or for any other reason. In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The earnings release that accompanies today's call contains financial and other quantitative information to be discussed today. as well as the reconciliation of the GAAP to non-GAAP measures and is available within the investor relations page of the company's website. With that, I would like to turn the call over to Andrew Hurst. Andrew?

Thank you, Davis. Good afternoon to everyone and thank you for joining us. Overall, we are pleased with our operating results and continued progress during the quarter. I would like to thank our faculty, student support staff, and all our other employees for their hard work, dedication, and diligence in serving and educating our students. Third quarter operating results came in ahead of our expectations in part due to better than expected improvements in student engagement and retention as overall macroeconomic and governmental responses generally wind down from the pandemic. Operating expenses were also lower than expected, further helping the results for the quarter. And we have continued to invest in data analytics and technology upgrades while maintaining appropriate levels of academic and student support services that we believe are positively impacting academic outcomes and student experiences. Let me touch upon some of the key operational highlights from the quarter. First, We experienced better than expected improvement in student retention and engagement as the lingering impact from the pandemic and overall macroeconomic policies continue to wind down. Our student support teams have been leveraging technology and data analytics to serve students more efficiently, and we continue to grow our corporate population. We are pleased with the progress and expect year-end total enrollments at CTU to grow versus the prior year while AIUS is expected to show a decline. Second, adjustments to our marketing processes that began in the third quarter of 2021 are now fully annualized. Recall that these marketing changes were made to refine our process to identify prospective students who are more likely to succeed at one of our academic institutions. We are now fully realizing some of the intended benefits namely stronger engagement from prospective students and improved retention. Third, we continue to focus on our corporate partnership program at both institutions, and the teams are successfully engaging with employers who provide tuition assistance programs, which allows for a debt-free education for their employees. Now, let me touch upon some of the financial results for the third quarter. we reported net income of $22.1 million or 32 cents per diluted share. While adjusted earnings per diluted share, which excludes certain significant and non-cash items was 39 cents. As expected, total student enrollments at our institutions declined by 2.1% compared to the prior year quarter end. But this was an improvement from the 7% decline in the second quarter. By segment, total students increased by 2.7% at CTU, but decreased by 9.5% at the AIU system. A quick note on our technology investments. We are making necessary investments to upgrade our student serving systems and to continue to leverage data analytics and machine learning to enable timely and relevant engagement with our students. We launched a new student relationship system that provides assistance and insights in the advising process, enabling us to effectively engage with students with the appropriate support at the right time. We continue to make meaningful updates to our mobile applications for both students and faculty. We have upgraded our mobile technology framework, allowing for better performance and increased stability. These upgrades also provide more flexibility with third-party plug-ins, enabling consistency amongst newer devices. Overall, app usage is high at both institutions with an approximate 90% adoption rate. Lastly, after being successfully launched at AIUS, we have also completed the chatbot integration with Messenger at CTU, allowing students to receive real-time support. With that said, I would now like to turn the call over to Ashish for a deeper review of our operating performance for the quarter.