8-K: Adtalem Q2 FY26 Earnings Soar, Raises EPS Guidance

Adtalem Global Education reports strong second quarter fiscal year 2026 results with significant revenue and adjusted EPS growth, and raises full-year adjusted EPS guidance.

Summary

• Total student enrollment increased by 6.3% year-over-year to 97,010, marking the tenth consecutive quarter of growth.
• Revenue for the second quarter fiscal year 2026 was $503.4 million, an increase of 12.4% year-over-year.
• Diluted earnings per share reached $2.11, while adjusted earnings per share grew 34.3% year-over-year to $2.43.
• GAAP net income was $76.4 million, and adjusted EBITDA increased by 23.9% year-over-year to $154.9 million.
• Walden University achieved its highest total enrollment in university history, growing 13.0% year-over-year.
• Chamberlain University recorded its fourteenth straight quarter of pre-licensure BSN total enrollment growth.
• The company completed its $150 million Board-authorized share repurchase program and authorized a new $750 million program through December 2028.
• Adtalem repurchased $165 million of shares during the second quarter.
• Net leverage stood at 0.9x as of December 31, 2025.
• Fiscal year 2026 adjusted earnings per share guidance was raised from $7.60-$7.90 to $7.80-$8.00.

Sentiment

Score: 9

Explanation: The filing reports exceptionally strong financial and operational performance, including significant revenue and adjusted EPS growth, consistent enrollment increases, and a raised full-year adjusted EPS guidance. The company is actively returning capital to shareholders through substantial share repurchases, indicating strong management confidence and a healthy financial position.

Positives

• Total student enrollment grew 6.3% year-over-year to 97,010, marking the tenth consecutive quarter of growth.
• Revenue increased by 12.4% year-over-year to $503.4 million.
• Adjusted earnings per share grew significantly by 34.3% year-over-year to $2.43.
• Adjusted EBITDA increased by 23.9% year-over-year to $154.9 million, with an adjusted EBITDA margin of 30.8% (up from 27.9%).
• Walden University achieved 13.0% year-over-year enrollment growth, reaching its highest total enrollment in university history.
• Chamberlain University maintained its fourteenth straight quarter of pre-licensure BSN total enrollment growth.
• The company successfully completed a $150 million share repurchase program and authorized a new $750 million program through December 2028.
• Adtalem returned $165 million of capital to shareholders through share repurchases in the second quarter.
• A healthy net leverage ratio of 0.9x as of December 31, 2025, indicates strong financial management.
• Fiscal year 2026 adjusted EPS guidance was raised from $7.60-$7.90 to $7.80-$8.00, reflecting increased confidence in future performance.
• Chamberlain University's Masters Physician Assistant Studies (MPAS) program achieved a 96% Physician Assistant National Certifying Exam pass rate for its inaugural cohorts.
• Walden University launched seven new degree programs, with over 1,000 students already enrolled.

Negatives

• Chamberlain University's total student enrollment decreased by 1.0% compared with the prior year, primarily due to declines in post-licensure nursing, partially offset by growth in pre-licensure nursing.
• Chamberlain's operating income, adjusted operating income, and adjusted EBITDA all decreased year-over-year.

Risks

• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those described.
• Important factors that could cause actual results to differ materially are disclosed in Item 1A. Risk Factors of the company's most recent Annual Report on Form 10-K and other filings with the SEC.

Future Outlook

Adtalem maintained its fiscal year 2026 revenue guidance in the range of $1,900 million to $1,940 million, projecting approximately 6% to 8.5% growth year-over-year. The company raised its adjusted earnings per share guidance from $7.60-$7.90 to $7.80-$8.00, now expecting approximately 17% to 20% growth year-over-year.

Management Comments

• "As America's largest healthcare educator, we are uniquely positioned to address the growing healthcare workforce gaps at scale."
• "Our second quarter results—our tenth consecutive quarter of enrollment growth, which was up 6.3% to 97,000 students—demonstrates our ability to meet this challenge head on."
• "We are at the forefront, creating a future where barriers to education are removed and where students graduate with AI-fluency."
• "We took significant steps forward this quarter further collaborating with health system partners, expanding our reach, and embedding AI within our programs."
• "As we train more healthcare providers than ever before, we are also delivering strong shareholder returns and leveraged our financial strength to return $165 million of capital back to our owners."

Industry Context

Adtalem, as the largest healthcare educator in the U.S., is strategically positioned to address critical healthcare workforce shortages. Its continued enrollment growth, particularly in key programs like pre-licensure nursing and physician assistant studies, directly responds to high industry demand. The company's focus on collaborating with health system partners and integrating AI into its programs aligns with broader industry trends emphasizing practical skills, accessibility, and technological advancement in healthcare education.

Comparison to Industry Standards

• Adtalem's position as "America's largest healthcare educator" highlights its significant scale and market leadership.
• Chamberlain University's Masters Physician Assistant Studies (MPAS) program achieved a 96% Physician Assistant National Certifying Exam (PANCE) pass rate for its inaugural cohorts (Class of 2024 and 2025), indicating strong program quality and student outcomes, which is a key benchmark in medical education.
• The achievement of a "tenth straight quarter of enrollment growth" and "fourteenth straight quarter of pre-licensure BSN total enrollment growth" demonstrates sustained operational excellence and competitive strength in the education sector.

Legal Proceedings

• Income from discontinued operations includes expense from ongoing litigation costs and settlements related to divestitures and earn-outs received.

Stakeholder Impact

• Shareholders: Positive impact due to strong financial performance, increased adjusted EPS guidance, and significant capital return through share repurchases ($165 million in Q2, new $750 million program).
• Students: Positive impact through expanded program offerings (7 new degree programs at Walden, MPAS expansion at Chamberlain), streamlined scholarship offerings, and a focus on AI-fluency, aiming to improve patient outcomes and address workforce gaps.
• Healthcare Industry/Partners: Positive impact as Adtalem continues to train a large number of healthcare professionals, addressing workforce gaps and collaborating with health system partners.

Next Steps

• Host an Investor Day on Tuesday, February 24, 2026.
• Continue to execute on its 'Growth with Purpose' strategy, expanding reach and transforming higher education.
• Publicly update or revise forward-looking statements only as required by law.

Key Dates

Recommendation

The company demonstrates robust financial health with significant year-over-year growth in revenue, adjusted EPS, and adjusted EBITDA. The consistent enrollment growth, particularly at Walden and in pre-licensure nursing at Chamberlain, indicates strong demand for its healthcare education programs. The raised adjusted EPS guidance for fiscal year 2026, coupled with a healthy net leverage ratio of 0.9x and a substantial new share repurchase program, signals confidence from management and a commitment to shareholder returns. The strategic focus on addressing healthcare workforce gaps and integrating AI positions Adtalem well for future growth. Despite a slight decline in overall Chamberlain enrollment due to post-licensure nursing, the overall picture is overwhelmingly positive, suggesting strong upside potential for investors.

Keywords

Healthcare education, Adtalem, ATGE, Walden University, Chamberlain University, Financial results, Earnings, Enrollment growth, Share repurchase, Adjusted EPS, EBITDA, Nursing education, Medical education, Veterinary education