Laureate Education (LAUR) Q3 Earnings call transcript Oct 31, 2024

In a recent earnings call, Laureate Education, Inc. showcased a strong financial performance for the third quarter of 2024, driven by positive growth trends in Peru and Mexico. The call, led by CEO Eilif Serck-Hanssen and CFO Richard Buskirk, highlighted the company's strategic initiatives and prospects for future growth.

Strong Financial Performance

Laureate Education reported third-quarter revenue of $369 million, exceeding expectations and marking a 9% increase on an organic constant currency basis. Adjusted EBITDA was reported at $91 million, also ahead of the guidance provided earlier in August. The company attributed these positive results to the successful intake cycles in Peru and Mexico, where new enrollments increased by 12% and 4%, respectively.

Growth Opportunities in Peru and Mexico

Peru's macroeconomic conditions have shown significant improvement, with consumer spending increasing due to stable inflation, lower interest rates, and rising wages. This positive economic outlook has led to an expected growth rate of 16% year-over-year for the completion of the intake cycle. In Mexico, the new presidential administration's focus on fiscal discipline and investments in infrastructure development is seen as a catalyst for sustainable growth. Laureate Education is optimistic about its position in this market, with strong visibility for the remainder of the year.

Capital Allocation and Return on Investment

Laureate Education's financial strength was underscored by its strong balance sheet, which positions the company well for continued investment in its operations and shareholder returns. Following the completion of a $100 million stock repurchase program in February, the company announced a new $100 million authorization program in September. This move is part of a larger effort to return excess capital to shareholders, totaling nearly $3 billion since 2019 through a combination of share repurchases, cash distributions, and cash dividends.

Looking Ahead

The earnings call provided valuable insights into Laureate Education's strategic direction and financial health, underscoring its resilience and growth prospects in the face of macroeconomic challenges. The company's focus on local market expansion, particularly in Peru and Mexico, combined with its commitment to returning capital to shareholders, positions it well for continued success. As Laureate Education moves forward, it will be interesting to see how it navigates the evolving educational landscape and capitalizes on the opportunities presented by its strategic initiatives.