Greetings, and welcome to the Adtalem Global Education Fourth Quarter Fiscal Year 2025 Results Call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to your host, Jonathan Spitzer, Vice President of Investor Relations. Thank you. You may begin.

Good afternoon, and welcome to our earnings call for the fourth quarter fiscal year 2025 results. On the call with me today are Steve Beard, Chairman and Chief Executive Officer of Adtalem Global Education; and Bob Phelan, Chief Financial Officer. Before I hand you over to Steve, I will as usual take you through the legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute as forward-looking statements that are based on our 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 a result of new information, future events, changes in assumptions or otherwise. Please see our latest Form 10-K, Form 10-Q for a discussion of risk factors as it relates to forward-looking statements. In today's presentation, we'll use certain non-GAAP financial measures. We refer you to the appendix in the presentation materials available on our Investor Relations website for reconciliations to the most directly comparable GAAP financial measures and related information. You will find a link to the webcast on our Investor Relations website at investors.adtalem.com. After this call, the presentation and webcast will be archived on the website for 30 days. I will now hand you over to Steve.

Thanks, Jay. Good afternoon, everyone, and thank you for joining us today. Fiscal 2025 was a defining year for Adtalem. Our Growth with Purpose strategy delivered outstanding financial results and meaningful student outcomes, exceeding our plan and marking a clear inflection point in our growth trajectory. Now just beyond the midpoint of our 3-year road map, we've established a credible, repeatable methodology for sustainable growth, growth that delivers value to shareholders, opportunity to students and impact to communities. The momentum we're seeing is real, and it's the result of deliberate action. We've reengineered our institutional footprint around a unified model that unlocks operating leverage and accelerates profitability. We're leading the industry in marketing innovation, driving higher conversion at lower acquisition costs. And we're deploying student-facing technologies and AI-powered learning tools grounded in our proprietary data, improving student persistence across the board. This is Growth with Purpose in action. And here's what that translated into for fiscal 2025. Total enrollment grew every quarter, averaging over 10% for the year with all 3 segments contributing. Revenue reached $1.79 billion, up 12.9% year-over-year. Adjusted EBITDA margin expanded 190 basis points to 25.7%. Adjusted earnings per share grew 33% to $6.67. We generated $283 million in free cash flow, and we further strengthened our financial position by reducing our Term Loan B balance by $100 million and lowered our borrowing costs by 75 basis points. Finally, we returned $211 million in excess capital to our shareholders through share repurchases. At the same time, the urgency of America's health care workforce crisis is intensifying. Our education to employment model is meeting this challenge at an unmatched scale, creating direct impact in local communities and health care systems across the country. And at a time when the value proposition of traditional higher education is under increased…

Thank you, Steve, and hello, everyone. Our fourth quarter and full year 2025 results demonstrate the power that our Growth with Purpose strategy yields on both the top and bottom line. We fundamentally transformed the organization through operational excellence, built a strong foundation and created a durable growth engine. We're heading into fiscal 2026 with momentum, building on the last 2 fiscal years that have surpassed our high expectations. Our trajectory has increased the level of operating cash flow, affording us the ability to be disciplined capital allocators. We're deploying capital to high-return growth opportunities, maximizing our existing capacity, and we're starting to bring new capacity to the market, such as through the partnership we announced with SSM Health. We've positioned ourselves to expand our reach through incremental high ROI growth initiatives while also investing to increase student outcomes through our innovative education model and enhancing our student-facing capabilities. I'll now review our financial results and key drivers for the fourth quarter and the full year. Later in my remarks, I'll discuss our expectations and assumptions for fiscal 2026. Starting with the top line. Revenue in the fourth quarter increased by 11.5% to $457.1 million, driven by all 3 segments, but in particular, through the enrollment growth at Walden and Chamberlain. For the full year, revenue was $1.79 billion, up 12.9%. Our enrollment growth throughout the year was strong with an average quarterly growth rate of over 10%. During the quarter, consolidated adjusted EBITDA came in at $110.2 million, up 13.2% compared to the prior year. This growth was led by Walden with Med/Vet contributing, partially offset by Chamberlain. Adjusted EBITDA margin was 24.1% for the quarter, a 30 basis point increase from last year. Adjusted operating income was $87.5 million, up 9.2% compared to the prior year as revenue…

[Operator Instructions] And your first question comes from Jeff Silber with BMO Capital Markets.

I wanted to focus first on your operational performance. The numbers that you've been posting at both Chamberlain and Walden have been really good, much better than I think most people had thought. I know there's not a lot of good industry data, but I'm assuming you're gaining share at both institutions. If you had to pick 1 or 2 things at each institution, what do you think is driving that share gain?

I really think it's the flexibility that our programs bring to the market. That's particularly true as it relates to the BSN product, for example, where we provide folks the opportunity to participate in campus-based programs, fully online programs and hybrid programs. I also think we're really enjoying the benefit of a reputation for commitment to student success and some of the ways that we are supporting our students through their academic journeys is a real differentiator for us relative to other programs in the market. And then I think as people learn more about the strength of our relationships with employers, some of the partnerships that we're standing up, that too is a draw for students who like the idea that their programs come with clear pathways to employment after completion.

All right. That's really helpful. Appreciate it. Maybe I can switch to some of the regulatory and political issues, and thank you for providing some of the color you gave earlier. Maybe I'll focus first on some of the issues with the loan caps and potential changes in loans. And I know you made the announcement yesterday with Sallie Mae that hopefully will offset that a bit. But are you seeing students now asking about it? And I'm specifically interested in some of your longer-term programs like medical school, are students reluctant to sign up now when they know they've got 4 years and things could change?

No, we're not seeing any dampening in demand for our programs at all. We're seeing robust inquiries, both at the medical schools and at the veterinary program. And I don't think we anticipate any dampening in demand. I think there's a clear sense that there will be other financing options for those students, and that's certainly the case with our institutions. So as we think about the elimination of Grad PLUS or we think about some of the loan limits, we feel confident that we'll be able to give students assurance that they'll experience no disruptions in their ability to finance their programs. In addition, as you know, the rules come with some grandfathering provisions that ensure that current students won't experience any interruptions or any challenges in leveraging federal student loans. So as we stand here today, we don't view either the elimination of Grad PLUS or any of the borrowing limits as an impediment to attracting students, getting them through our programs and growing those programs.

And your next question comes from Jack Slevin with Jefferies.

Congrats on another really strong quarter. Maybe I just wanted to take this a little longer term thinking about things. I appreciate the comments around capacity and, obviously, trends continue strong with the guidance in '26. But as you're thinking about maybe a multiyear period, can you just talk through sort of big things that you see as potential sort of large moving pieces or things you need to focus on to maintain a level of growth that's obviously been above sort of historical trends? And I'm thinking about things like it could be expansion to new programs like allied health or more and more of these health system partnerships as those health systems are under pressure in the current regulatory environment and need to sort of flex into permanent hiring more. Just curious if there's any sort of larger tectonic plates that you guys are starting to push around.

Yes. So if I think about long-term trends, I think the place I would begin is with the secular demand trends in the programs we take to market today. What we see as we look across medicine, as we look across nursing, as we look across veterinary medicine and the social behavioral sciences, the demand for professionals, clinicians in those areas is robust and is growing at a pretty aggressive clip. And we expect to enjoy those demand trends for the foreseeable future. At the same time, some of the demographic trends in the existing clinical workforce also help us because there is a fairly large cohort of existing clinicians that we expect to retire and leave the workforce, only making those workforce demands more acute for providers and the need for pull-through from institutions like ours greater. So that's the place I'd start. In addition, as we think about new capacity beyond the existing programs and institutions we take to market today, we're talking to providers all the time about where their needs are most acute, whether that's in allied health or other professions. And as we think about investments over the long term, we consider whether those types of programs would be additive to the mix we have today. But at the end of the day, the large categories that we take to market today enjoy really, really powerful secular demand trends on both the student side and the employer side, which leaves us a ton of room to grow within our existing portfolio.

Got it. Really, really helpful. Then maybe just for one follow-up here, sort of 2 more modeling focused questions. I appreciate the commentary on first half a little better than the second half in terms of the earnings mix. But anything you can share in terms of the investments that are made both in Chamberlain and Walden, how that might pace through the year? And then the second piece being if you can just speak to sort of what the plan is of attack on the buyback front and how that might layer in over time?

I'll start, and then I'll let Bob jump in. So we're still at a point in our 3-year Growth with Purpose strategy that we have a year left of that road map. And that means we'll continue to make investments across the 5 pillars of that strategy, which are just critically important, we think, to the future proofing of that business. So those are going to come in marketing, enrollment, improving the conversion engine for us at the bottom of the funnel, more programs and capabilities to maintain the really robust retention rates that we enjoy across our programs. We're always looking at pricing optimization, and we intend to bring new programs to market. And in this coming fiscal year, that's particularly true at Walden University. Those are going to pace through the year based on our assessment of the most optimal time to take advantage of bringing those investments online. That's particularly true with respect to marketing. But I think we believe that we've got the flexibility to tailor the timing of those investments in ways that have no impact on the way the full year results will shape up relevant to our guide. But Bob, if you want to add any color, that would be great.

The only thing I would add to that is just that in the first quarter, we typically have, on an absolute basis, lower margins just based on where the revenue is for the first quarter and seasonality. And then the only other thing is the shift that we have with some of the Walden revenue for that one week means that you'll have a little bit better margins in the second quarter, and it will pull down the third quarter a little bit, again, just the transfer between the quarters.

And your next question comes from Steven Pawlak with Baird.

Yes. On the marketing front, I'm just wondering if you can provide any color in terms of kind of where the success is there. And is it that you're better at reaching students that are sort of more open to enrolling? Is it that you're positioning programs better from a competitive standpoint? Just any color you could provide on what's driving some of that success.

Yes. I think we're enjoying the further evolution of our brand strategy. I think as we come with follow-on campaigns that build on the initial reset brand campaigns from 1.5 years ago, we're enjoying the benefit of better name awareness, better recognition of the brands. And now we are able to extend that to marketing our institutions on a program level. And in the case of an institution like Chamberlain, we're able to market them on a local market level. And that degree of segmentation allows us to just capture more share. And we're able to do it increasingly on the basis of evidence around student success. The other thing I'd say is that as we speak more about some of these partnerships, I think about the partnership we announced with SSM a week ago, that too is sort of seeping into the awareness that students have about the nature of our programs, and that helps with both attracting inquiries and strengthening our ability to convert those into enrollments. So it's a -- we'll build on our brand thesis here even as we work to strengthen our ability to convert at the bottom of the funnel through performance marketing strategy. So it's an evolution of a theme that I think we've had great success with over the last 2 years.

Okay. And then on Walden, obviously, really good, strong results there. Maybe I'll just approach it this way. So the growth has kind of diverged from Chamberlain, and I know that there was expectations for the tougher comps, and that's kind of why Chamberlain is decelerating. But can you give any color in terms of is there a program difference or anything like that that's driving Walden to continue to accelerate?

I wouldn't attribute the program difference to the difference in acceleration. But to your question, Walden takes over 100 different programs to market. And even in its largest categories, they're more numerous than what you have at Chamberlain, which is a much more narrowly focused and tailored portfolio of nursing and public health programs. I think I wouldn't focus on acceleration or deceleration in any specific period because I think what you've seen over the last couple of cycles is if you look at the performance of those institutions on a year-long basis, you see relatively equivalent rates of performance and enrollment growth over that period. Walden has many, many more intake cycles than Chamberlain. I think they have 8 intakes and Chamberlain has 4 or 5. That has something to do with the ability to sustain momentum over quarterly periods. But on an annual basis, we like where both institutions are performing, and we look forward to actually accelerating that performance across both Chamberlain and Walden given their unique attributes and brand positioning in the market.

I will now hand the floor back to Steve Beard for closing remarks.

I just wanted to take a moment and really thank all of our 10,000 colleagues across Adtalem. It's been a fantastic year, 10 straight quarters of enrollment growth at Chamberlain, 8 straight quarters of enrollment growth at Walden, real momentum in the Med/Vet segment as it relates to enrollment, and that's a real testament to the commitment our folks have to the students we serve and the communities that they go on to serve. So my thanks to everyone at Adtalem for a fantastic year, and I look forward to partnering with you all in fiscal '26.

This concludes today's conference call. All parties may disconnect. Have a good day.