Adtalem Global Education Inc.

Greetings and welcome to the Ad Tilum Global Education second quarter fiscal year 2024 earnings call. At this time, all participants are in listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jonathan Spitzer, Vice President of Investor Relations. Thank you, Mr. Spitzer. You may begin.

Good afternoon, and welcome to our earnings call for the second quarter fiscal year 2024 results. On the call with me today are Steve Beard, President and Chief Executive Officer of Ad Town Global Education, and Bob Phelan, Chief Financial Officer. Before I hand you over to Steve, I will as usual take you through our legal, safe harbor, and cost share declarations. Certain statements and projections of future results made in this presentation constitute as forward-looking statements that are based on current, market, competitive, and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We undertake no obligation to update publicly any forward-looking statement after this presentation, whether as a result of new information, future events, changes in assumptions, or otherwise. Please see our latest Form 10-K, Form 10-Q for discussion of risk factors as it relates to forward-looking statements. In today's presentation, we'll use certain non-GAAP financial measures, refer you to the appendix of the presentation materials available on our Investor Relations website for reconciliation to the most directly comparable GAAP financial measures and related information. You'll find a link in the webcast on our Investor Relations website at investors.adtelan.com. After this call, the presentation webcast will be archived on the website for 30 days. I will now hand you over to Steve.

Thanks, Jay. And thank you to everyone for joining us today. We recognize this call was rescheduled on relative short notice, but in light of the short seller report issued this morning, we thought it was important to share our results and outlook with you as soon as possible. Let me briefly address the short report before turning to our results and guidance. As you likely saw, earlier today, a noted short seller issued a 50-plus page report on Attalam. This firm never attempted to engage with us to confirm the veracity of its claims, and importantly, The firm acknowledges holding a short position in Atalem and therefore stands to realize significant gains in the event that Atalem's stock price declines and will do so at the expense of our shareholders. Upon an initial review of the report, we believe that the short seller's claims include a number of statements that are inaccurate and misleading. Many of them also appear to be a rehash of legacy issues the company has addressed previously. Our five institutions have long enjoyed strong academic outcomes. And over the last few years, we've made significant investments in strengthening those outcomes and improving the student experience. For example, we've streamlined the enrollment process and improved the student journey through enhanced adaptive learning technology and student support capabilities. We've also optimized pricing across our portfolio with scholarships, such as the Believe and Achieve Scholarship, which incentivizes and rewards matriculation and student success. We continue to be responsive to the market with the scaling of new programs to meet the needs of a dynamic labor market. Our relationships with our creditors and regulators remain constructive, and we are confident in the long-term viability of our programs. Walden University received a notice of investigation and a request for information from the Department of Education. However, the department has not accused Walden of any wrongdoing. We are fully cooperating with the department's request However, there has been no impact on our programs, students, or operations. Our board of directors and our leadership team are confident in our strategy, our reporting, the breadth and depth of our offering to students, and the outside social impact of our graduates. Our strong academic, operational, and financial performance, which we'll address momentarily, shows that we're on the right path for long-term growth and value creation. As we continue to grow and deliver on our commitments, we will continue to serve and act in accordance with our values and high ethical standards. Now let me turn to our quarterly results. We delivered another strong quarter with robust organic revenue growth, improved operational efficiencies, and high quality student outcomes. Execution against our growth with purpose strategy yielded returns above our expectations with total enrollment of 6.2%. In the quarter, revenue was $393 million, up 8.4% versus the prior year, generating $1.23 of adjusted earnings per share. As you know, growth with purpose is focused on operational excellence, and its continued success flows through our results. We're building momentum across all five pillars of the strategy, affording us the opportunity to solidify our market-leading position and enhance the delivery of our programs. We remain committed to our mission to provide access to high quality education to tens of thousands of individuals of all ages, ethnicities, and backgrounds to achieve their professional ambitions at a time when the value proposition for post-secondary higher education is increasingly questioned. We continue to invest in expanding our market leading reach physically and online, creating additional opportunities where the need far outweighs the current offerings. Our institutions are connecting with prospective students and employers, fostering a culture of belief in achievement and success. Our agility and scale enable us to share resources and cross-curate best practices, driving a superior and differentiated student experience. We continue to find opportunities to further integrate our institutions, reducing student-facing friction. Starting in July, we leveraged Walden's successful practicum management system at Chamberlain University. By November, over 5,000 Chamberlain students had benefited from the system, delivering a major improvement in the student experience, as evidenced by a 5.7% increase in practicum applications submitted on time and an 89% reduction in inbound student support cases to advisors. Moving on to results by segment, our five institutions continue to strike a balance between investing to accelerate near-term performance and expanding profitability over the long term. Chamberlain and Walden were the primary drivers of our strong performance in the quarter, and we remain confident that the financial performance of those institutions will continue into the second half of the year. Our medical schools remain on track against our remediation plans, and we still expect total enrollment trends to improve sequentially over the remainder of the fiscal year. Chamberlain is already the largest nursing school in the country, and its leadership position in nursing education is expanding. Our brand recognition and modern curriculum, combined with a reputation with employers, position us as a leading choice for students. Chamberlain's BSN Online option continues to offer the optimal blend of flexibility and experiential learning to students in 32 states. Over 1,100 students are now enrolled, and we see a robust pipeline for sustainable growth. At our Miramar, Florida campus, The first cohort of our perioperative, practice-ready, specialty-focused students graduated last fall with high praise for the program from our students, faculty, and clinical partners. These alumni are now filling critical perioperative roles across communities in South Florida. Our ability to scale and meet the healthcare market demand is a testament to our new operating model. Now turning to Walden. Total enrollment grew 7.9%. underscoring the success of our work to reestablish a leading position in online education. Our investment in brand and shifts in marketing mix continue to show momentum in new student growth of double digits year over year for the third straight quarter. Expanding our reach goes beyond reinvigorating our brand. Walden continues to offer flexibility to working adults with their competency-based program, Tempo, growing new enrollments by over 50% in the quarter. Our Believe and Achieve scholarship is gaining significant traction, exceeding expectations, with over 15,000 students participating. Believe and Achieve continues to help students accomplish their educational goals with financial incentives linked to persistence. Both Walden and Chamberlain continue to be essential institutions in addressing the nation's challenges related to mental health. According to the Substance Abuse and Mental Health Services Administration, one in five US adults will experience mental illness each year. Chamberlain's Psychiatric Mental Nurse Practitioner Program enrolls 2,200 students, and Walden's Social Behavioral Health Programs enroll 18,000 students. These students represent an important cohort for the future practitioners who will tackle growing demand for behavioral health resources. Ross Vet continues to operate in near capacity, graduating approximately 9% of all U.S. veterinarians. for the most recent academic reporting year of 2021 to 2022. I'd like to congratulate one of our alumni, Aaliyah Harrison, DVM 06, who was recently appointed as the chief medical officer at Banfield Pet Care, a longstanding employer partner of ours. At our medical schools, we're executing on our remediation efforts, and we're encouraged by the restructured enrollment team and new enrollment processes put in place. Leveraging our scale, reach, and reputation, we are creating deep partnerships with local health systems in markets such as Los Angeles, Chicago, Miami, Detroit, and New York through Ross University's School of Medicine's Clinical Return Home Program. Prospective RUSM students are now able to apply and have clarity during the enrollment process to know that they can complete clinical rotations within the communities in which they reside. Keep in mind that our medical schools have a multi-month enrollment process from original inquiry to starting new enrollment. We remain on track to return RUSM and AUC back to growth and expect total enrollment trends to improve over the remainder of the fiscal year. As we execute, we continue to be thoughtful and disciplined about capital allocation, investing in organic growth, and deploying capital. as a result of our significant operating cash generation, strong balance sheet, and low net leverage. In January, we completed our $300 million February 2022 board authorized share repurchase program. Subsequently, we announced a new $300 million board authorized share repurchase program, reflecting the strength of our strategic outlook. Last week, We took additional accretive actions to strengthen our balance sheet by reducing our long-term financial obligations by another $50 million, as well as lowered our term loan B interest rate by 50 basis points. Through active treasury management, we are generating savings that can be redeployed to expand our market-leading position. In summary, our growth with purpose strategy is delivering top and bottom line performance ahead of expectations. We remain confident that these trends will continue during the second half of fiscal year 2024. Accordingly, we are raising our fiscal 2024 guidance, anticipating revenue to be in the range of $1.52 billion to $1.56 billion, and adjusted EPS to be in the range of $4.55 to $4.75. Given the current challenges that US higher education is facing, we have an incredible opportunity to evolve the way education is delivered. Our operating model uniquely positions us to make an outsized impact as a solution that connects students to high-quality education and prepares them to enter the healthcare workforce as practice-ready clinicians. This is what will continue to differentiate us. I'll now turn the call over to Bob for further discussion of our financial results.