Executive Summary
Adtalem Global Education delivered a solid third quarter in FY2025, with revenue of $466.1 million, up 12.9% year over year, driven by broad-based enrollment strength across all segments. Chamberlain University and Walden University contributed the majority of the growth, while the Medical and Veterinary segment returned to growth but faced near-term margin compression due to strategic investments. Adjusted EBITDA rose 19.3% to $127.8 million, driving an adjusted EBITDA margin of 27.4%, and adjusted earnings per share (EPS) increased 28% to $1.92. The company reiterated a constructive long-term outlook, raised full-year revenue guidance to $1.76–$1.775 billion and kept adjusted EPS guidance at $6.40–$6.60, signaling confidence in sustained operating leverage and the ability to fund expansion initiatives.
Management emphasized Growth with Purpose, highlighting capacity expansion, AI-driven curricula partnerships, and investments in student outcomes as key pillars for the next stage of growth. The quarter also featured a disciplined capital return program, with a $300 million share repurchase completed and a new $150 million authorization through May 2028, underscoring confidence in the business model and long-term value creation. Despite near-term margin headwinds in the Medical & Veterinary segment (adjusted EBITDA margin at 24% vs 29%+ in other segments), management remains focused on achieving greater-than-150bp full-year adjusted EBITDA margin expansion in 2025, supported by operating leverage and ongoing efficiency initiatives. Investors should monitor: (i) enrollment momentum in Chamberlain and Walden, (ii) margin trajectory in Medical & Veterinary as growth investments scale, (iii) the pace of Q4 investments, and (iv) regulatory and policy developments in DC that could influence student affordability and program outcomes.
Key Performance Indicators
QoQ: -12.86% | YoY:12.23%
QoQ: -19.81% | YoY:65.21%
QoQ: -19.21% | YoY:72.63%
Key Insights
Revenue: $466.1 million in Q3 2025; YoY growth 12.9% (Q3 revenue $466.1m vs. prior year). QoQ growth 4.0% (per quarterly disclosures).
Gross profit: $266.2 million; gross margin 57.1%.
Operating income: $90.51 million; operating margin 19.42%.
Adjusted EBITDA: $127.8 million; adjusted EBITDA margin 27.4% (up 150bp YoY).
Net income: $60.83 million; net margin 13.05%.
Earnings per share: GAAP EPS $1.64; diluted EPS $1.59; adjusted EPS $1.92 (YoY +28%).
Cash flow: Net cash provided by operati...
Financial Highlights
Revenue: $466.1 million in Q3 2025; YoY growth 12.9% (Q3 revenue $466.1m vs. prior year). QoQ growth 4.0% (per quarterly disclosures).
Gross profit: $266.2 million; gross margin 57.1%.
Operating income: $90.51 million; operating margin 19.42%.
Adjusted EBITDA: $127.8 million; adjusted EBITDA margin 27.4% (up 150bp YoY).
Net income: $60.83 million; net margin 13.05%.
Earnings per share: GAAP EPS $1.64; diluted EPS $1.59; adjusted EPS $1.92 (YoY +28%).
Cash flow: Net cash provided by operating activities $207.9 million; free cash flow $197.7 million; trailing-12-month free cash flow $287 million.
Balance sheet: cash and cash equivalents $219.0 million; total debt $780.5 million; net debt $561.5 million; net debt/adjusted EBITDA ~0.8x; cash at end of period $221.2 million.
Share count and returns: diluted shares 38.2 million; 791,000 shares repurchased in the quarter; completed $300 million buyback and launched a new $150 million program through 2028.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
466.06M |
12.94% |
4.09% |
| Gross Profit |
266.19M |
10.10% |
-2.60% |
| Operating Income |
90.51M |
12.23% |
-12.86% |
| Net Income |
60.83M |
65.21% |
-19.81% |
| EPS |
1.64 |
72.63% |
-19.21% |
Key Financial Ratios
operatingProfitMargin
19.4%
operatingCashFlowPerShare
$5.6
freeCashFlowPerShare
$5.32
Management Commentary
Theme: Growth momentum and strategic execution
- Quote: Steve Beard, CEO: “Revenue grew by 13% to $466 million. Total enrollment climbed to 9.8% year-over-year, marking seven consecutive quarters of growth.” This underscores broad-based demand across Chamberlain, Walden, and Medical & Veterinary segments.
- Quote: Steve Beard, CEO: “We now expect revenue of $1.76 billion to $1.775 billion, and we expect adjusted EPS of $6.40 to $6.60.” Management raises full-year guidance, signaling confidence in operating leverage and growth investments.
- Theme: Margin dynamics and investments
- Quote: Bob Phelan, CFO: “Consolidated adjusted EBITDA margin of 27.4% expanded 150 basis points from last year.” and “we expect adjusted EBITDA margin expansion in fiscal year 2025 to be greater than 150 basis points.” This highlights ongoing efficiency gains despite near-term investments in growth.
- Theme: Segments and program innovation
- Quote: Steve Beard, CEO: “Walden enrollment rose 13.5% … Get the W campaign, paired with digital innovations, has boosted inquiries and conversion rates. Predictive analytics and advanced learning tools are enhancing retention and academic outcomes.” This points to the effectiveness of digital tools and analytics in retention and enrollment.
- Theme: Regulatory environment and policy tone
- Quote: Steve Beard, CEO: “The new administration is focused on career-focused education with clear return on investment. We view the regulatory environment as generally positive for our space.” This provides management’s view on DC policy risk and opportunity.
Revenue grew by 13% to $466 million. Total enrollment climbed to 9.8% year-over-year, marking seven consecutive quarters of growth.
— Steve Beard
Walden’s 72nd commencement celebrated 6,000 graduates, including 2,500 nurses and 2,100 social behavioral and health professionals. Proof of our ability to deliver talent where it's needed most.
— Steve Beard
Forward Guidance
Management guidance for FY2025 indicates revenue in the range of $1.76–$1.775 billion, representing ~11–12% year-over-year growth, and adjusted EPS of $6.40–$6.60 (roughly 28–32% growth). The company anticipates greater-than-150bp margin expansion for 2025, aided by scale benefits and efficiency improvements while increasing growth investments in Q4 to prepare for fiscal 2026. The trajectory is supported by: (i) continued enrollment momentum across Chamberlain (+6.8% QoQ), Walden (+13.5% YoY), and Medical & Veterinary (+1.2%), (ii) a strong balance sheet with net leverage ~0.8x, (iii) a robust free cash flow profile (~$287m LTM), and (iv) a disciplined capital return program (completed $300m buyback; new $150m authorization).
Investors should monitor: (1) execution of capacity expansion and de novo program initiatives (particularly in veterinary and certain high-demand nursing/healthcare tracks), (2) the margin path in Medical & Veterinary as investments phase in, and (3) potential regulatory developments around student loans and program accountability, which management characterized as generally constructive for the sector.