Greetings, and welcome to the Adtalem Global Education First Quarter 2026 Earnings. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jay Spitzer, VP of Investor Relations. Thank you, Jay. You may begin.

Good afternoon, and welcome to our earnings call for the first quarter fiscal year 2026 results. On the call with me today are Stephen 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 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 that relate to forward-looking statements. In today's presentation, we use certain non-GAAP financial measures. We refer you to the appendix in the presentation material 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 will be webcasted and archived on the website for 30 days. I will now hand you over to Steve.

Thanks, Jay, and good afternoon, everyone. Thanks for joining us today. We delivered an outstanding start to fiscal year 2026. This marks our ninth consecutive quarter of enrollment growth. Total enrollment is up 8% year-over-year to 97,000 students. Revenue grew nearly 11% to $462 million, and we expanded our adjusted EBITDA margins by 100 basis points while delivering adjusted earnings per share of $1.75. That's growth of nearly 36% year-over-year. This performance demonstrates the power of our growth of purpose strategy and the operational excellence we've embedded across the enterprise. Walden grew enrollment for the ninth straight quarter and achieved record total enrollment. Our Medical and Veterinary segment posted its third consecutive enrollment cycle of growth. Chamberlain grew enrollment for the 11th straight quarter, and we're continuing to generate strong free cash flow while maintaining attractively low net leverage. Before I dive into the quarter, let me place our performance in the context of what's happening in health care. The health care workforce crisis continues to intensify. It's being driven by our aging population and accelerating retirements among practicing clinicians. This challenge is particularly acute in rural settings where nursing shortages alone are projected to triple by 2027 according to the National Center for Health Workforce Analysis. The shortage spans the entire health care workforce from physicians to technicians and represents a defining characteristic of health care for the foreseeable future. The industry is working to accelerate modernization through AI to augment practitioner efficiency, but these innovations don't solve the structural workforce challenge, and that's precisely where our opportunity lies. As the largest provider of health care-focused education in the country, we're well positioned to play a vital role as essential talent infrastructure. That opportunity has never been clearer or more compelling. Now, let me address Chamberlain's performance in the…

Thank you, Steve, and hello, everyone. We started the fiscal year with financial strength in line with our expectations as we continue to sustain our momentum. We are generating significant cash flow and have taken proactive actions to strengthen our balance sheet while also increasing our financial flexibility. We are well positioned to continue to execute our growth with purpose strategy and we will continue to be disciplined capital allocators. We are deploying capital to high ROI growth opportunities, focusing on maximizing our existing capacity. Further, our robust financials uniquely provide us with the ability to optimally invest in additional growth opportunities, bringing new capacity to market and providing innovative student-facing technology while continuing to increase our level of profitability. I'll now review our financial results and key drivers for our first quarter performance. Later in my remarks, I'll discuss our expectations and assumptions for the remainder of fiscal year 2026. Starting with the top line. Revenue in the first quarter increased by 10.8% to $462.3 million, driven by all 3 segments, in particular at Walden. Consolidated adjusted EBITDA came in at $112 million, up 15.8% compared to the prior year. This growth was led by Walden with Med/Vet contributing, partially offset by Chamberlain. Adjusted EBITDA margin of 24.2% expanded 100 basis points from last year. Adjusted operating income was $90.3 million, up 19% compared to the prior year as revenue growth and efficiencies generated operational leverage, which was partially offset by investments in our strategic growth initiatives. We continue to balance our strategic growth investments with our more efficient, integrated and scaled operational foundation. Our margin can fluctuate quarter-to-quarter as we remain flexible on how we deploy capital to generate the highest long-term return. Adjusted net income for the quarter was $64.9 million, up 28.5% compared to last year,…

[Operator Instructions] Our first question comes from the line of Jack Slevin with Jefferies.

Nice work on the quarter guys. I want to start the commentary on Chamberlain and all the color you gave. But maybe just to get a little bit more granular there. I just want to understand sort of the range of outcomes that you're thinking about moving forward here given the really strong ramp you've had the last 2 years in enrollment. And sort of are we thinking this is something where we might see sequential declines in enrollment as you sort of get new starts back online? Or I'd just love to think through sort of the range of outcomes that you're thinking about in that second and third quarter guidance as you look at the Chamberlain volumes.

Yes. So I'd encourage you to put the deceleration in post-licensure nursing into a discrete box. We don't believe this represents a go-forward trend in that part of the Chamberlain portfolio. We believe that our market position in post-licensure nursing remains strong. We've historically taken share in RN to BSN and expect to continue to do that. This is really, I think, a misstep on our part in relation to how we thought about marketing in advance of the September enrollment cycle. And so we've taken a hard look at where we went wrong, what we can do to remedy that. And we expect that while we'll see a tail on that deceleration flow through the balance of the year, we will recover, and we will continue to defend our position in post-licensure nursing at the same time, growing really, really attractively what we're doing in pre-licensure nursing, particularly with our BSN online program. So again, this is not a trend that has legs in our view. This is a onetime dislocation that's a result of our execution miss. But because it's within our control, we feel very confident about what that means for purposes of the out periods in post-licensure nursing, and that's why we're confident enough to maintain our guide for the full year.

Okay. Got it. Super helpful. One follow-up on that front. So just to maybe look at the margin in the quarter pulls back a little bit in Chamberlain. Should I think about that as a reaction to some of the trends you were seeing intra-quarter? Or can you sort of spell out what you think about sort of that trajectory going forward on the cost side?

Yes. Look, I think as we begin to recover the top line at Chamberlain to something consistent with what we would expect ordinarily, you'll see the margin expansion over the course of a full year period. So that, too, is a reflection of the temporary pressure on the top line from the performance miss in September. We expect to recover that as we approach the end of the fiscal year.

Got it. Okay. Super helpful. Last one for me and more just sort of out of an abundance of caution given your stock traded off 5% yesterday. Just want to sort of clarify that you feel comfortable with where your systems, backbone and platforms from a technology standpoint are across your business, but probably in Walden would be the most relevant one.

Just want to clarify the question. Just our technology infrastructure generally.

Yes. I guess you had a peer yesterday or someone in the peer set that had sort of large issues around -- yes, do you get the question now?

Yes, perfect. Thank you for the clarification. No, we feel great about the tech stack that we use to support the operations, both on the front end of the funnel as well as everything we deploy in support of the student journey. And in fact, we are really excited about some of the innovations that we're rolling out to both enhance and differentiate that student journey. So certainly sympathetic with what happened with one of our peers, but no analogous dynamic in our model to be concerned about.

Our next question comes from the line of Jeff Silber with BMO Capital Markets.

Sorry to go back to the Chamberlain issue. How do you know that this is not a competitive issue where you're losing share?

Because as recently as 2 quarters ago, we were taking share in RN to BSN. We know -- you know and we know that's not a growth area in the way that it was many years ago, but we believe we still have one of the most attractive brands in RN to BSN. We believe that employers, in particular, are keen to see their RNs make the leap to BSN through Chamberlain's program. So there's nothing we're seeing in the competitive landscape that gives us any concern that we've lost our positioning relative to the alternatives. I just think as we've looked to move from an historical national-based marketing campaign to one that's more market specific, we had a misstep along the way. I think we've diagnosed that well. And I think you'll see the product of that correction over the course of the fiscal year. We intend to defend our position to RN to BSN given our legendary strength there, even as we grow our pre-licensure presence through BSN Online. So I don't believe we are suffering from any adverse competitive dynamics in post-licensure nursing.

Okay. That's really helpful. Last quarter, you announced a partnership with Sallie Mae, and I was just wondering if we can get an update on how that's progressing and when we may see some announcement in terms of the specifics.

Yes. We're working to finalize definitive documentation with Sallie Mae. My hope is that we'll be able to close that relatively soon, and I expect we'll be able to announce that. We're really encouraged by what that means for all the students we have across the portfolio and Sallie Mae's willingness to step up and support the broad program mix we have. But that work continues to be in flight, and we're certain we'll get it locked down soon.

Our next question comes from the line of Alex Paris with Barrington Research.

Add my congrats on the strong quarter. I have a couple of questions that are more industry-oriented. Earlier this year, the Department of Education announced increased verification efforts to root out fraud across all of higher education. I've talked with a couple of other companies in this space, one notably that had some issues with friction because of the fraudsters crowding out well-intentioned students, and that had an impact on new student enrollment. I'm wondering what your thoughts are there and maybe just some additional color about what you have to do now that you didn't have to do before? And are you seeing a spike in increased fraudulent activity in the enrollment process?

Yes. So I'll answer the second part of the question first. We're not seeing any spike in go students or fraudulent enrollments or anything like that. We obviously are subject to the same administrative burdens associated with the department's focus on that as everyone else. But as we sit here today, we don't have any concerns that that's an issue across our program set. But obviously, we continue to monitor it closely.

Yes, I was wondering if that might have been a contributing factor with the new student enrollment challenges at Chamberlain, but [indiscernible].

No. Really, at Chamberlain, 2 issues. One, the marketing mix we deployed in advance of the September cycle wasn't effective as hoped and wasn't executed as well as hoped. And then also at the conversion level, even where we were seeing strong demand with a number of missteps at the conversion level, which resulted in the diminished enrollment growth for that cycle. But I don't believe the verification issue had anything to do with the deceleration in enrollment at Chamberlain.

Okay. Good. And then kind of shifting gears a little bit. I got 2 more. The Google Cloud partnership and these AI credentials that you're talking about for health care professionals, this would be both existing students as well as noncurrent students at Chamberlain and the other brands within the portfolio. Are these 4 credit courses? And as such, are they Title IV eligible given the increased coverage proposed in the Big Beautiful Bill for shorter-term credentials?

Yes. As an initial matter, these are programs that will run alongside our existing degree programs. We're ways away from thinking about how to embed them comprehensively in our programs. Obviously, there are accreditation issues that come with that, but we think that's an opportunity down the road. We view this as a way both to provide a differentiated student experience by creating baseline fluency and AI tools across our student populations and to create stackable credentials that have real currency in the clinical marketplace. So Google has been in the certification and stackable credentials business for a while. It's really exciting to be able to partner with them in a way that brings what we do best together with what they do best. So not wholesale modifications to existing degree programs, but ancillary complementary certificate programs that run alongside our degree programs.

Got you. Is there an additional cost for existing students? And likewise, is there a cost for non-existing students?

No incremental additional cost for students.

Got you. Okay. And then my last question is, again, industry-related. Given one of your competitors made an announcement about the impact of military, active duty, tuition assistance, I'm wondering what your institutional, your enterprise exposure is to military. And I suspect that's primarily GI Bill and VA.

Yes. So active duty military exposure is pretty low, very low actually. Obviously, the platform you're referring to, that's a very large part of their model. So we've not really seen any problems with student disbursements, whether that's veterans benefits or traditional Title IV benefits. Obviously, it's something we continue to monitor as the shutdown drags on. But for the moment, that has not been an issue for our programs.

Yes. That was my related question, government shutdown related. And then last question, kind of just a silly one. The February Investor Day, is that going to be held at your Chicago headquarters or elsewhere?

It won't be in Chicago, TBD. I suspect it will be out East, but we'll have details for you pretty soon here. Stay tuned.

Our next question comes from the line of Steven Pawlak with Baird.

On the marketing missteps at Chamberlain, I guess just kind of maybe piggyback off an earlier question, what gives the confidence that the marketing mix or marketing message in your other programs is appropriate that there isn't -- or that this is sort of contained and now addressed problem?

Yes. So we deploy a central marketing center of excellence that then localizes our marketing programs for each of our institutions. So even though our institutions are like in the sense that they're all postsecondary, the unique marketing strategies across the portfolio do vary quite a bit. So we have every reason to believe that the root causes of the misstep in September with Chamberlain are Chamberlain-specific. And no reason to believe that they present any issue for any of the 4 institutions, and that's obviously borne out by what you see in the enrollment trends across those institutions. So it's a Chamberlain-specific issue. We have a tremendous amount of confidence in the steps we've taken to address it, and we're confident that, that will flow through results of operations over the course of the fiscal year.

Okay. And then on the sort of conversion challenges, is there a particular part of the funnel that students were sort of falling out of? Or was it maybe more the number of steps and sort of the increased friction points that you referenced?

Yes. So any time there's a handoff of a student from one part of the enrollment journey to another, that's an opportunity for leakage. And at Chamberlain, we determined that there are opportunities to simplify and reduce the number of handoffs in a way that diminishes the risk of that kind of leakage. When our students are considering our programs, they're also considering other programs and our ability to stay in front of them to ensure they're getting the information they need to make an informed decision about enrollment. It is critical to preserve the kind of high conversion rates that make all the difference in our model. That just didn't happen in September, but we believe we know what needs to happen for the upcoming enrollment cycles at Chamberlain to change that outcome starting with January.

There are no further questions at this time. I'd like to pass the call back over to Steve Beard for any closing remarks.

I just want to thank the team across the Adtalem family for a really strong and robust start to the fiscal year. This is year 3 of growth with purpose for us. We've been incredibly pleased with the strategy, and we look forward to a strong third year of that strategy, but that is entirely down to the folks that support our students across our 5 institutions. So a sincere thanks to our teams.

That concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.