Perdoceo Education's 2026 Q2 Earnings Call: Enrollment Growth Slumps, Financial Guidance Shifts

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $213.4M, up 1.8% YOY
• EPS: $0.75 per diluted share, compared to $0.62 prior year quarter

Guidance:

• Full year 2026 adjusted operating income expected to range between $258M and $263M, up from $237.6M in 2025.
• Adjusted EPS expected to be between $3.10 and $3.16 per diluted share, up 19.9% at midpoint from $2.61 in 2025.
• Q3 2026 adjusted operating income expected to be $64M to $65M, compared to $61M prior year quarter.
• Q3 adjusted EPS expected to be 73 cents to 74 cents per diluted share, compared to 65 cents prior year quarter.
• Full-year revenue expected to increase versus 2025.

Business Commentary:

Financial Performance and Growth:

• Prodocio Education Corporation reported net income for Q2 2026 of $48 million, or $0.75 per diluted share, compared to $41 million, or $0.62 per diluted share, in the prior year quarter.
• The growth was driven by a 1.8% increase in revenue to $213.4 million, strong operating leverage, and disciplined expense management while reinvesting in marketing and technology.

Enrollment Trends and Retention:

• Total student enrollments increased by 0.7% year-over-year as of June 30, with CTU experiencing its 11th consecutive quarter of enrollment growth, increasing 0.6% to 32,110 students.
• The growth was supported by strong retention trends and high levels of prospective student interest, despite some challenges in retention due to the academic calendar at AIU.

Academic Institution Performance:

• The University of St. Augustine for Health Sciences reported a 6% increase in total student enrollments to approximately 4,200 students, with revenue rising by 10.2% to $40.5 million.
• This was attributed to increased brand recognition, new program launches, and the introduction of new modalities, which enhanced flexibility for prospective students.

Dividend Increase and Capital Allocation:

• The Board authorized an increase in the quarterly dividend from $0.15 to $0.17 per share, marking the third increase since the dividend payments were initiated in 2023.
• This decision reflects the company's commitment to making dividends a growing and integral part of its capital allocation strategy, supported by strong financial performance and cash flows.

Impact of Legal Fees and Organic Growth:

• Legal fees at CTU related to previously discussed legal matters increased year-over-year, impacting operating income comparisons.
• Despite this, underlying organic growth trends remained strong, with investments in marketing and student support functions driving long-term growth expectations.

Sentiment Analysis:

Overall Tone: Positive

• Management stated 'Our portfolio of... performed well during the second quarter' and 'we remain optimistic as we move through the remainder of 2026.' They highlighted operating income growth, enrollment growth, strong retention, and a successful acquisition integration. The dividend increase was noted as reflecting 'commitment to making dividends a growing and integral part' of strategy.

Q&A:

• Question from Conference Call Participant (name not specified): Could you provide an update on the impact of AI-powered search on prospective student inquiries?
  Response: The impact has been modest thus far; the majority of inquiries come from channels not directly impacted by the shift to AI-powered search.

• Question from Conference Call Participant (name not specified): What is the expected impact of the academic calendar on AIU system enrollment trends for the remainder of 2026?
  Response: AIU system expects strong enrollment growth in Q3, then lower in Q4 before rebounding in Q1 2027 due to academic calendar-driven variability.

Contradiction Point 1

Financial Performance Metrics and Outlook

Inconsistent portrayal of financial performance and guidance between quarters.

*(Not applicable — no questions were asked by external participants during the call.)* - *(Not applicable — no questions were asked by external participants during the call.)*

2026Q2: Net income for Q2 was $48 million ($0.75 per diluted share), up from $41 million ($0.62 per diluted share) in the prior year quarter. Operating income grew 6.8% to $54.9 million. Revenue increased 1.8% to $213.4 million for the quarter. - [CFO](CFO)

(Not applicable) - *(Not applicable)*

2026Q1: Q1 net income was $54M ($0.85 per diluted share), up 30.8% year-over-year. Revenue grew 4.1% to $221.7M. Operating income grew 22% to $63.1M. - [CFO](CFO)

Contradiction Point 2

Dividend Policy

Contradiction in the timing and scale of dividend increases.

*(Not applicable — no questions were asked by external participants during the call.)* - *(Not applicable — no questions were asked by external participants during the call.)*

2026Q2: The Board authorized a 13.3% increase in the quarterly dividend from $0.15 to $0.17 per share, the third increase since dividends were initiated in 2023. - [Board](Board)

(Not applicable) - *(Not applicable)*

2026Q1: Declared a quarterly dividend of $0.15 per share. - [CFO](CFO)

Contradiction Point 3

Enrollment Growth Trends

Contradiction on whether enrollment growth is accelerating or decelerating.

N/A (No external questions asked) - N/A (No external questions asked)

2026Q2: Total student enrollments grew **0.7%** year-over-year as of June 30. CTU reported its **11th consecutive quarter of enrollment growth (0.6% to 32,110 students)**. - [CEO](CEO)

N/A - N/A (No external questions asked)

20251105-2025 Q3: Total student enrollments grew **15.1%** year-over-year, driven by **6.7% growth at CTU (8th consecutive quarter of growth)**... - [CEO](CEO)

Contradiction Point 4

Financial Performance Outlook

Contradiction in the drivers and magnitude of projected full-year adjusted operating income growth.

N/A (No external questions asked) - N/A (No external questions asked)

2026Q2: Full-year **adjusted operating income** is expected to range between **$258 million and $263 million**, a significant increase from **$237.6 million** in 2025. - [CFO](CFO)

N/A - N/A (No external questions asked)

20251105-2025 Q3: Adjusted operating income expected to be **$234–236 million vs. $188.9 million in 2024**. - [CFO](CFO)