Perdoceo Education Corporation

Good afternoon, everyone, and welcome to the Prodocio Education Corporation fourth quarter and full year 2023 earnings conference call. Today's call is being recorded. I would now like to turn the call over to Davis Schneider with Investor Relations. Please go ahead, sir.

Thank you, Lisa. Good afternoon, everyone, and thank you for joining us for our fourth quarter 2023 earnings call. With me on the call today is Todd Nelson, 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 Prodocio 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 most recent annual report on Form 10-K, and subsequent filings with 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'd like to turn the call over to Chief Executive Officer Todd Nelson. Todd?

Thank you, Davis. Good afternoon, everyone, and thank you for joining us for our fourth quarter 2023 earnings call. I'd like to begin by thanking our faculty, student support staff, and all other employees for their ongoing commitment and work in serving and educating our students. We ended 2023 on a strong note as it relates to student retention and engagement, and I am proud of the entire Prodocio team as they executed on our priorities and delivered on our commitment of further enhancing student experiences, retention, and academic outcomes. Before I go into some details for the fourth quarter and full year, here are some of the key observations and highlights. First, as we exit 2023, student retention and engagement are the highest that they have been over the past few years across both our academic institutions, and we expect to operate at these improved levels through 2024. Additionally, short-term operational changes that were undertaken at AIUS during 2023 to comply with new regulations are now behind us, and we have mostly reverted to normalized levels of operations beginning in the fourth quarter of 2023. Next, 2023 ending total student enrollments reflected a 3.2% growth at CTU, and as expected, a 39.3% decline at AIOS due to the operating changes undertaken. However, as Ashish will share with you shortly, we expect to mostly offset any lag impact of this planned decline on 2024 operating results. Next, marketing and admission spend and commensurately prospective student inquiry generation was lower in 2023 as compared to 2022 due to the short-term operational changes made at AIUS as well as adjustments made to our processes around generating prospective student inquiries in order to comply with updated expectations from various federal agencies around prospective student outreach. This impact was partially offset by increased operating efficiency within our student enrollment onboarding processes. Our institutions remain focused on and continued investments in personnel and processes to support their respective corporate engagement programs. Lastly, we used approximately $22.7 million of cash for dividends and stock buyback during 2023. Returning past the shareholders via quarterly dividends is expected to be an integral and growing part of our capital allocation strategy. Now to our operating results. Fourth quarter and full year results came in ahead of our expectations. We reported fourth quarter net income of $17.2 million or 26 cents per diluted share, while adjusted earnings per diluted share, which excludes certain significant and non-cash items, was 27 cents. A quick note on total enrollment. At CTU, total student enrollments increased by 3.2% as compared to the prior year end. At AIU system, total student enrollments decreased by 39.3 as compared to the prior year, which is in line with our expectations that we discussed on last quarter's conference call. AAU system mostly reverted to normalized operations during the fourth quarter, and as a result, we expect total enrollments in subsequent quarters during 2024 to experience double-digit growth as compared to the low point in fourth quarter 2023. A few operational updates before I turn the call over to Ashish. First, aided by data analytics, we continue to adjust our marketing strategies to further improve our focus on identifying prospective students who are most likely to succeed at one of our universities, as well as comply with updated expectations with various federal agencies around prospective student outreach. While these marketing adjustments may have impacted new student enrollments, improved student engagement across their entire academic life cycle has mostly offset any negative impacts on total enrollments. Second, our students' corporate engagement programs remain a focus and priority and both institutions continue to make investments in staff and technology to further grow their programs in an efficient and effective manner. Third, we continue to place an emphasis on investing in and utilizing technology to elevate the academic experiences of our students and improve the efficiency and effectiveness of our institution's diverse student support functions. For example, we've made investments toward enhancing student tools, the student portal, and the overall classroom experience at our institutions and are actively exploring integration of generative AI into our institution's various student processes. We continue to view technology as a catalyst and a differentiator, but us remain committed to making selective investments that deliver a more meaningful and relevant education experience for our learners. 2023 was a strong year of execution against our key objectives of enhancing student experiences, retention, and academic outcomes. During the year, our institutions made further improvements to student-focused operations, all of which were ultimately focused on serving and educating our students in an effective and efficient manner. With that said, I'd like to now turn the call over to Ashish for a deeper review of our operating performance. Ashish?