Good day and thank you for standing by. Welcome to the Laureate Education Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead.

Good morning and thank you for joining us on today's call to discuss Laureate Education's third quarter and year-to-date 2025 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'll 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 are providing today, including, but not limited to, our financial and operational guidance constitutes forward-looking statements within the meaning of applicable U.S. 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 U.S. 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, adjusted net income and adjusted earnings per share, total cash and equivalents, net of total 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. Today, we are pleased to report strong operating and financial performance for the third quarter, along with the results of our recently completed intake cycles. Third quarter revenue was $400 million and adjusted EBITDA was $95 million. Both metrics were ahead of the guidance we provided in July. Favorable results for the quarter were driven by improved foreign currency rates and double-digit growth in Peru's secondary intake, led by fully online working adult programs as we continue to scale in that segment, albeit from a smaller base. The primary intake in Mexico was up 4%, excluding campus closures and in line with our expectations. The solid results during the intake were against the backdrop of a softer macroeconomic environment, reinforcing the resiliency of our business model. During the intake cycle, we also opened 2 new campuses for our value brand institutions, one in Monterrey, Mexico and one in Lima's Ate District in Peru. Both campuses opened on time, on budget and performed as expected. These campus openings were our first new campus launches since 2019. We also have 2 additional new campus projects underway, one in each market and expect these to open late next year or early in 2027. Beyond that, we have identified numerous other cities and site locations in both Mexico and Peru that are ripe for development over the next several years. The completion of the intake cycle provides us with strong visibility for the remainder of the year, and we are announcing an increase to our full year 2025 outlook, which Rick will cover in more detail later in his prepared remarks. Our balance sheet remains exceptionally strong. And today, we are also pleased to announce that our Board has authorized a $150 million increase to our stock…

Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. Campus-based higher education is a seasonal business. 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. In addition, the timing of the start of our classes can shift year-over-year depending on various factors such as when public universities begin classes or when holidays occur. This, in turn, affects the timing of enrollments and revenue recognition and quarter-over-quarter comparability. In 2025, the beginning of classes, particularly in Peru, started later versus 2024, extending the enrollment cycle into mid-April and beyond the first quarter cutoff. As a result, we expect approximately $26 million of revenue and $23 million in adjusted EBITDA will shift from the first quarter to the second half of the year, primarily to the fourth quarter. As we review our operating results, I will provide additional color on these timing-related impacts. Let's start with Page 10 and 11 of the supplementary presentation, which highlight our operating and financial performance for the third quarter and year-to-date. For the quarter, new and total enrollment volumes increased 7% and 6%, respectively, versus the third quarter of the prior year. Third quarter revenue was $400 million and adjusted EBITDA was $95 million. Both metrics were ahead of the guidance we provided 3 months ago, aided by the favorable secondary intake in Peru, favorable price/mix and improved currency rates. On an organic constant currency basis and adjusted for the academic calendar shift discussed earlier, revenue for the seasonally low third quarter was up 6% year-over-year and adjusted EBITDA increased by 3%. Third quarter net income was $34 million, resulting in earnings per share of…

Thank you, Rick. Our operations in both Mexico and Peru continue to perform very well, resulting in strong performance on a year-to-date basis and causing us to guide to an improved outlook for the remainder of the year. With leading brands, strong digital capabilities, disciplined capital allocation and a strong balance sheet, we are very well positioned to execute on our growth agenda and advance our mission of transforming lives across Mexico and Peru through high-quality, affordable education. Operator, that concludes our prepared remarks, and we are now happy to take any questions from the participants.

[Operator Instructions] And our first question comes from Jeff Silber of BMO Capital Markets.

This is Ryan on for Jeff. On Peru, revenue for the quarter was really strong, especially in the context of the $7 million of revenue falling out from the calendar timing. I was just trying to understand some of the moving pieces with FX enrollment and pricing versus your initial forecast.

Well, we are benefiting in Peru, of course, having the recession behind us, which means that we are seeing a little bit of a catch-up on delayed demand or deferred demand from last year. But we're also just seeing strong consumer sentiment. We have a very strong value proposition, which works well in the premium segment, in the value segment as well as a very rapid increase in demand for fully online working adult products. In terms of pricing for face-to-face, we have been pricing in line with inflation with the working adult product that's fully online. We have adjusted pricing to optimize our revenue production, but it has been from a relatively small base. It shouldn't have a material impact on the overall price dynamics in the market. But net-net, on the fully online product, we have taken a slight reduction in headline pricing.

Appreciate that. And just for the follow-up on the Mexican new enrollment growth for the quarter. I was hoping you could parse apart the plus 2% or the plus 4%, I guess, on an organic basis. I think last quarter, you had highlighted some working adult strength. So I was just wondering how that evolved. And then if you could give us anything on how the face-to-face new enrollment evolved in Mexico as well for the intake cycle.

Yes. So the third quarter is really the main enrollment. So the focus is really young students. And what we call C1, cycle 1 and cycle 2 in first and second quarter are primarily working adult markets. So the vast majority of the volume momentum is driven by traditional 18- to 24-year-old undergraduate students in Mexico for third quarter.

[Operator Instructions] And our next question comes from Lucas Nagano of Morgan Stanley.

We have a question about the intake in Mexico. If you could quantify the contribution, the percentage points from the new campus launched this quarter? In other words, how much did it grow without the new campus?

So we had 4% growth when excluding campus closures and 1 point of that came from new campus launches. So 3% same store.

Perfect. And also, you mentioned that going forward, you expect pricing in Peru in line with inflation. How much should the average revenue per student be impacted due to the mix of [indiscernible] fully online?

Rick, do you want to take the mix impact?

I mean overall inflation in Peru is trending very well. It's a headline around 2%. So that's as a starting point of what our target would be to match that in the market. And then mix impact could be upwards of 2% as we continue to aggressively go after the fully online working adult segment. And as a reminder, we're just getting started in Peru. We have over 100,000 students approximately in Mexico. We have a fraction of that in Peru, and we're starting to really see solid growth in that segment as we've seen posted in Q3 of this year.

Thank you. This concludes our question-and-answer session and also today's conference call. Thank you for participating, and you may now disconnect.