Universal Technical Institute Inc

Good afternoon, and welcome to the Universal Technical Institute fourth quarter and full year 2025 earnings conference call. All participants will be in listen-only mode. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Matt Kempton, Vice President, Corporate Finance and Investor Relations. Please go ahead.

Hello and welcome to Universal Technical Institute's fiscal fourth quarter and full year 2025 earnings call. Joining me today are our CEO, Jerome Grant, and CFO, Bruce Schumann. Following our prepared remarks, we will open the call for your questions. A replay of this call, its transcript, and our investor presentation will be archived on the investor relations section of our website at investor.uti.edu, along with their earnings release issued earlier today and furnished to the SEC. During this call, we may make comments that contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which, by their nature, address matters that are in the future and are uncertain. These statements reflect management's current beliefs and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. These factors include, but are not limited to, those discussed in our earnings release and SEC filings. These statements do not guarantee future performance, and therefore, undue reliance should not be placed upon them. We do not intend to update these forward-looking statements as a result of new information or future developments, except as required by law. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of fiscal 2024. The information presented today also includes non-GAAP financial measures. These should be viewed in addition to and not as a substitute for the company's reported results prepared in accordance with U.S. GAAP. All non-GAAP financial measures referenced in today's call are reconciled in our earnings press release to the most directly comparable GAAP measure. For more information regarding definitions of our non-GAAP measures, please see our earnings release, financial supplement, and investor presentation. With that, I will turn the call over to Jerome Grant, CEO of Universal Technical Institute, for his prepared remarks. Jerome?

Thank you, Matt. Good afternoon, everyone, and thank you for joining us. We launched our North Star strategy in 2020 with a focus on growth, diversification, and optimization. The first phase of the strategy successfully concluded with the close of fiscal year 2024. In that first phase, we saw our student population more than double from 10,000 to over 22,000. Revenue grew from just over $300 million to $733 million and adjusted EBITDA increased from $14 million to $103 million. All of this was accomplished while improving student outcomes and employer satisfaction. Fiscal 2025 marked the first year of the next phase of our North Star Strategy, a year that demonstrated the strength of our strategy, the depth of our execution, and capitalized on the momentum we built as a diversified, growth-oriented education company. We entered the first year of our North Star Strategy Phase 2 with high expectations, and we delivered results that exceeded such expectations. Revenue surpassed our twice-raised guidance range, reaching $836 million, or 14% year-over-year growth. To reiterate, we raised our top-line guidance twice throughout the first half of the year and raised the lower end of our range in the last quarter. So, the BEC today isn't just against our original forecast. It's against numbers we already raised intra-year. Our baseline adjusted EBITDA for the year was $133 million before incurring strategic growth investments of $6.5 million, netting us a reported adjusted EBITDA number of $126.5 million. As important, average full-time active students rose more than 10%, with new student starts increasing nearly 11% year-over-year. These results underscore both the resiliency of demand for skilled trades and healthcare careers and the effectiveness of our multi-divisional model. In just a few minutes, Bruce will delve further into the details of our Q4 and full fiscal year 2025 performance. Operationally, fiscal 2025 was equally strong. Once again, we executed at a high level on all three pillars of our growth, diversification, and optimization strategy. As committed, we successfully launched 19 new programs across our two divisions, extending our reach into fast-growing sectors and expanding access for students nationwide. These included nine full-length programs, eight within UTI and one within Concord, along with 10 shorter cash pay courses designed to serve working adults and regional employers seeking rapid training options. We also further enhanced our operational foundation, aligning brands, streamlining marketing admissions, and optimizing our campuses, such as the UTI Dallas campus and Concord Denver location. Together, these initiatives have delivered meaningful efficiency gains while enabling us to scale faster and smarter in the future. This first year of the second phase of our North Star strategy proved that our platform works, our transformation is durable, and that we are ready for the next chapter of UTI's evolution, exactly as we drew it up years ago. With an outstanding year of execution laying the foundation, we are set up to deliver strong growth over the next four years. Frankly, we couldn't be in a better position to kick off fiscal 2026, which will be the true inflection point for our continued growth as accelerated by our North Star strategy. As we transition our focus to 2026 I'd like to take a moment to express my gratitude to our team, our students, and our partners around the country. Without all of you, none of these successes would be possible. As we now enter fiscal 2026, our operational priorities are clear. Expand our campus footprint, launch new programs at scale, and continue to grow our student base while maintaining quality and performance discipline. We are on track to open three new campuses during fiscal 2026. First, the Heartland Dental co-branded campus in Fort Myers, Florida, which expands Concord's healthcare reach and will serve as a model for future co-branded opportunities, is set to open next week. The UTI Atlanta campus is a comprehensive greenfield site that will serve one of the nation's fastest growing metropolitan areas and support programs in automotive, diesel, skilled trades, and aviation technologies. The UTI San Antonio campus, which is our first skilled trades and aviation focused location, adds capacity in a state where demand for technical education continues to significantly outpace supply. Alongside those openings, now that the path is clear to execute Concord's growth strategy, We expect to launch approximately 20 new programs across our two divisions in fiscal 2026, which is significantly more than previously planned. These additions are tightly aligned with employer demand and will build on the success of our fiscal 2025 North Star Phase II rollout. Financially, we expect revenue for fiscal year 2026 to be between $905 million and $915 million, representing approximately a 9% year-over-year growth at the midpoint. I want to be deliberate here. Without our planned growth investments this year, our baseline adjusted EBITDA guidance is expected to be north of $150 million. Yet, As we will be including approximately $40 million in planned growth investments as part of our now accelerated growth timeline, we project that we will be printing adjusted EBITDA between $114 and $119 million. To you, our investors, the scale of these growth investments should not come as a surprise, as we've been signaling our advantageous position to accelerate our growth throughout the past year. These investments represent the front-loaded expenses of launching campuses, hiring faculty, and building capacity for long-term scale. To move on, new student starts are expected to range between 31,500 and 33,000. This near double-digit growth is driven by healthy demand trends, expanding program capacity, and improved marketing and admissions ecosystem that's producing higher quality leads and better conversion rates. In short, fiscal 2026 will be a year of investment, expansion, and activation. We're taking the platform we've built over the last three years and moving it fully into growth mode. While these investments, as we've outlined in the past, will temporarily moderate our reported margins, they're essential to establishing the next level of scale. We've often said that UTI's growth story is not linear, and that remains true. Fiscal 2026 and 2027 are our build years. The returns begin ramping quite rapidly in fiscal 2028 and beyond. Years 2 through 5 of our North Star Phase 2 represent the next chapter of UTI's transformation, focused on accelerating growth, expanding access, and scaling impact. And to remind everyone here, thanks to our diligent execution and new level of collaboration in Washington, we're actually one year ahead of schedule. This gives us an additional year to build momentum and execute. As a result, this means that operationally over the next several years, we now plan to open a minimum of two new campuses and up to five new campuses annually. as well as launching approximately 20 new programs annually across both UTI and Concord divisions, depending on regulatory approvals. With respect to campus locations, I'm sure you all read our recent announcement outlining the first three campuses we plan to launch in 2027. As our 2027 plans continue to evolve, you'll hear more from us. The programs we launch will continue to target areas of national workforce shortage from nursing and dental hygiene to diesel, renewable energy, and advanced manufacturing, reinforcing UTI's position as a leader in closing America's skill gap. We expect the financial impact of these initiatives to compound steadily and show strong momentum by the end of fiscal 2029. As previously noted, revenue growth should continue to average about 10% over this time period. Strategic operating and capital investment should be relatively consistent between 2026 and 2029, enabling margin expansion to begin slowly in 2027 before ramping more rapidly in 2028 and especially 2029. As a result of this acceleration, we now anticipate generating more than $1.2 billion in annual revenue and approaching $220 million in adjusted EBITDA in fiscal 2029. This rapid expansion in the last two years of the phase is driven by both maturity of our campuses and program replications launched in 2026 and 2027. Please refer to our investor deck for more details. To put that scale into perspective, by the end of fiscal year 2029, we now expect our revenue to nearly double and our adjusted EBITDA to be more than double what they were in 2024. Phase two is not just an extension of our growth story, but a transformation of our scale, reach, and impact. And it sets the stage for what comes next. Even by 2029, we won't have made more than a dent in America's skilled workforce gap, which means there's still an enormous runway in front of us. As Ford's CEO just last weekend noted, the industry is struggling to fill thousands of high-paying technician roles, underscoring how substantial the demand remains. So, as I look ahead, I couldn't be more confident in where we're headed. We're executing from the strongest operational and financial position in our company's history, and we're building something that's designed to endure, thrive, and grow well past 2029. In fact, we're already starting to think about 2030 and beyond, building on that durable, repeatable growth engine that we've created. That could mean continuing our organic expansion, accelerating structured B2B partnerships with employers, the military, and state workforce initiatives, including opportunities around AI-enabled training and automation, or even pursuing strategic acquisitions that broaden our reach into new geographies and product sets. We have the platform, the balance sheet, and the team to do all of it. With that, I'll turn the call over to Bruce, our CFO, to review our fiscal 2025 financials and provide you with further details on our guidance.