Perdoceo Education (PRDO) Q2 Earnings call transcript Jul 31, 2024
AInvestThursday, Aug 1, 2024 4:23 pm ET
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Perdoceo Education Corporation recently held its second quarter 2024 earnings call, highlighting the company's robust performance and strategic moves in the education sector. The call was led by Todd Nelson, President and CEO, and Ashish Ghia, CFO, who provided insights into the company's operations, financials, and future outlook.

Financial Highlights and Student Retention

The company reported a strong second quarter, with net income of $38.4 million or $0.57 per diluted share, exceeding expectations. Student retention and engagement remained high at both CTU and AIUS, with multi-year highs in retention rates. This positive trend is expected to continue, as faculty and student support teams remain dedicated to serving students and improving academic outcomes.

Marketing Strategies and Enhancements

Perdoceo continues to focus on enhancing marketing strategies and processes to identify prospective students more effectively. This strategic approach, aided by data analytics, has led to a reduction in marketing and admission spends while increasing prospective student inquiry generation.

Dividend Increase and Shareholder Confidence

The Board of Directors recently approved an 18.2% increase in the quarterly per share dividend, marking the first increase since the inaugural dividend payment in 2023. This move reflects shareholder confidence in the company's performance and strategic direction.

Acquisition of University of St. Augustine for Health Sciences

Perdoceo announced its intent to acquire the University of St. Augustine for Health Sciences, marking the company's foray into health sciences and further diversifying its academic program offerings. This acquisition is expected to be immediately accretive to Perdoceo's adjusted operating income beginning in 2025.

Outlook and Challenges

Looking ahead, Perdoceo expects full-year 2024 adjusted operating income to range between $179 million and $190 million, with adjusted earnings per diluted share expected to range between $2.13 and $2.25. The company's strong focus on student retention and engagement, coupled with strategic investments in technology and academics, is expected to support growth in the second half of the year.

However, challenges remain, including the ongoing impact of operational changes at AIU System and the Department of Education's evolving rules and interpretations, which could necessitate further adjustments. Despite these challenges, Perdoceo remains committed to enhancing its value proposition and serving the needs of its students.

In conclusion, Perdoceo Education Corporation's strong second quarter performance, strategic acquisitions, and focus on student retention and engagement position the company well for future growth. The company's ability to adapt and innovate in the face of challenges is a testament to its resilience and commitment to delivering high-quality educational experiences.

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