Thank you for standing by, and welcome to Laureate Education's Third Quarter 2022 Results Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Adam Morse, Senior VP Corporate Finance. Please go ahead.

Good morning, and thank you for joining us on today's call to discuss Laureate Education's Third Quarter 2022 Results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast, and a complete recording will be available after the call. I would like to remind you that, some of the information we're providing today, including but not limited to our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable US securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the US Securities and Exchange Commission our 10-Q filed earlier this morning, as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-GAAP measures that we discuss including and among others adjusted EBITDA, and its related margin, total cash net of debt, and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation. Let me now turn the call over to Eilif.

Thank you, Adam, and good morning, everyone. We recently completed our primary intake cycle in Mexico, and our secondary intake in Peru, and I am pleased to report strong new enrollment trends in both of our markets. In Mexico, new enrollments increased 17% versus third quarter of last year, with double-digit growth in both brands. In Peru, new enrollments grew 8% versus the third quarter of last year, with favorable performance at all three institutions. On the strength of these intakes, we are increasing our full year 2022 outlook. Later in our prepared remarks, Rick will walk you through the updated guidance for the year. We continue to believe that, the best way to create value for all of our stakeholders is to accelerate our revenue growth through a highly focused set of growth initiatives, supported by favorable secular trends for higher education in our markets, including the acceleration of digital learning. Our financial and operational results through the first nine months of the year demonstrate that our growth agenda is taking hold. We are on track to deliver on our medium-term forecast of 8% to 10% top line growth, following the completion of the recent intake and we continue to drive margin expansion. Laureate's success is driven by three key factors: first and foremost, our market-leading brands and their commitment to academic quality; secondly, a focused approach to two scaled markets; and lastly, our strong digital capabilities, with a powerful omni-channel distribution model that allows us to deliver quality education in a variety of formats, including face-to-face, fully online, and hybrid delivery. In addition to delivering on our growth and quality commitments, we continue to prioritize, return of capital for our shareholders. As of September 30, our net cash position was $192 million. On October 12, we paid a special cash distribution of $137 million, or $0.83 per share related to the remaining net proceeds from the sale of Walden University. On October 24, we announced a $112 million, or $0.68 per share, special cash dividend to be paid on November 17. Our cash accretive business model and our strong balance sheet, provide us with a lot of flexibility, as we continue to think through future return of capital strategies and shareholder value optimization efforts. That concludes my prepared remarks, and I will now turn the call over to Rick Buskirk, for a comprehensive financial overview of the third quarter and year-to-date performance, as well as further details on our improved 2022 outlook. Rick?

Thank you, Eilif. As a reminder, campus-based higher education is a seasonal business. The third quarter represents the primary intake cycle for Mexico, a Northern Hemisphere market, and a smaller secondary intake cycle for Peru, which is a Southern Hemisphere market. Although, the third quarter is a large intake period from a P&L perspective, it is seasonally low, as classes are out of session for much of the quarter. Let's start with page 12, which highlights our strong operating and financial performance for the third quarter. New enrollments increased 14% and total enrollments were up 10% when compared to the prior year period. Revenue in the third quarter was $301 million and adjusted EBITDA was $73 million. Both metrics were ahead of the guidance we provided three months ago. Revenue outperformance was driven by new enrollment results, which exceeded expectations for the recent intake cycle. Adjusted EBITDA outperformance followed the revenue trend and was aided by the shifting of some expenses to the fourth quarter of the year. On an organic constant currency basis, revenue for the third quarter was up 11% year-over-year, driven by the growth in total enrollment volume. Adjusted EBITDA for the third quarter was down 8% year-over-year as expected and as we had previously guided. This was due to return to campus expenses in a largely out-of-session quarter, as well as certain timing items. When combined with the first half on an organic constant currency basis, our overall year-to-date performance through September resulted in year-over-year revenue and adjusted EBITDA growth of 13% and 17% respectively. Let me now provide some additional color on the performance of Mexico and Peru, starting with page 15. Please note that, all comparisons versus prior year are on an organic and constant currency basis. Let's start with Mexico. Mexico just completed…

Thank you, Rick. Our year-to-date results demonstrate that we are on track to deliver on our strategic objectives and I remain very encouraged by Laureate's future prospects. We have the right management team, the best brands and a powerful omnichannel distribution network that we believe will allow us to drive revenue growth and support our vision of transforming the lives of students and communities in Mexico and Peru by providing greater access to affordable quality education. Operator, that concludes our prepared remarks and we're now happy to take any questions from the participants.

Thanks for taking my question. The new enrollment results at Mexico were phenomenal. And I'm just wondering if we can get a little bit more color why that strength and is it just easier comps and is this type of momentum expected to continue?

Good morning, Jeff, this is Eilif. We are very pleased with our performance in Mexico and we are particularly pleased that both brands are contributing to strong double-digit growth. You will recall in the past UNITEC, our value brand was really the growth engine in Mexico, while UVM was a slower grower. Now we have been able to get both of these institutions to become robust and sustainable growth engines for the company and we expect that to continue. However, the 17% growth in new enrollment during the quarter was somewhat aided by pent-up demand from 2021 when some of our students deferred due to the COVID pandemic. So that probably gave us a couple of percentage points in incremental growth in Mexico that I wouldn't project to continue.

All right. That's very helpful. You have a slide in your presentation about the progress that the company has been making in terms of teaching hours delivered online. Are you at that 40% to 60% target right now? If not when do you think you're going to get there?

So we are largely at that 40% to 60% right now depending on the brands and continue to -- expect to continue to be in that zone. What is really going on is the working adult students have gone from largely face-to-face a couple of years ago to now being essentially fully online. Post grad is increasingly going online and young student is primarily face-to-face. But instead of being 100% face-to-face they are 70% face-to-face and 30% in the digital format. So it's the combination of those three factors that are giving us that 40% to 60% mix of online delivery at our five institutions.

Okay. That's very helpful. If I could just sneak in one more. If we talk about the pricing environment, I know last quarter you discussed a little bit about some inflationary costs. I'm just wondering are you able to price to recoup the inflation. I'm wondering how did that go to the semester and what should we expect going forward?

Yeah. Hey, Jeff, thanks for the question. This is Rick Buskirk. We've talked about it before that we try to price through our implied inflation in general. And in good years, we try to do implied inflation plus. As I talked about on the last earnings call, we were fortunate this year that albeit we saw 8% inflation in our market, our implied inflation was significantly lower than that because we established labor rate increases in the prior year. And we had fixed costs associated with our real estate mainly in Mexico throughout the year. So our inflation -- implied inflation was around 3% to 4%. We were successful in implementing inflation -- implied inflation pricing in our intakes and we met or exceeded expectations. So we're satisfied with how pricing went. And obviously, we are looking at how that will apply on a go-forward basis into 2023.

Right. That’s great to hear. I'll get back in the queue. Thanks so much.

Thanks, Jeff.

Thank you. [Operator Instructions] Our next question comes from the line of Adam Parrington of Stifel. Please go ahead.

High, it's Adam from Stifel. How much longer do you expect the return to campus cost to last and what is the expected cost over that time period? Is it more or is it less than that?

We were follow back to operations during the second half of -- during the third quarter. So there will be a little bit of annualization effect -- impact in the first half of next year before we have left the cycle.

Got you. Thanks.

Thank you. This does conclude the Q&A session and today's conference call. Thank you for participating. You may now disconnect.

Thank you all.