What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-01 compared with 2024-10-31 · 102 added, 239 removed, 288 unchanged (54% of the section changed)

23 unchanged sentences

• the effect on our business and results of operations from fluctuations in the value of foreign currencies;

• risks associated with the incorporation of new technologies (including artificial intelligence) into our programs and processes;

• the fluctuations in revenues due to seasonality;

• the risks associated with disruptions to our computer networks and other cybersecurity incidents, including misappropriation of personal or proprietary information;

• the risks and uncertainties associated with an epidemic, pandemic or other public health emergency including, but not limited to, effects on student enrollment, tuition pricing, and collections in future periods;

• the risks associated with protests, strikes or natural or other disasters;

• our ability to attract and retain key personnel;

• our ability to maintain proper and effective internal controls necessary to produce accurate financial statements on a timely basis;

22 unchanged sentences

We group our institutions by geography in Mexico and Peru for reporting purposes.

Assets Held for Sale

As discussed in Note 3, Assets Held for Sale, of our consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, the Company has undertaken a process to sell two of our subsidiaries in Mexico that operate K-12 educational programs.

As such, these subsidiaries are classified as assets held for sale as of September 30, 2024.

The planned sale of this disposal group does not represent a strategic shift and therefore does not qualify for presentation as a discontinued operation in the consolidated financial statements.

In addition, during 2023 and 2024, several parcels of land and buildings at campuses in Mexico and a parcel of land in the United States met the criteria for classification as held for sale under ASC 360-10-45-9.

The sales of certain real estate in the United States and Mexico were completed during 2024.

The completion of the remaining sales is not expected to have a material effect on our financial results.

Our segments generate revenues by providing an education that emphasizes profession-oriented fields of study with undergraduate and graduate degrees in a wide range of disciplines.

2 unchanged sentences

The demand for higher education is large and growing and is fueled by several demographic and economic factors, including a growing middle class, global growth in services and technology-related industries and recognition of the significant personal and economic benefits gained by graduates of higher education institutions.

The target demographics are primarily 18- to 24-year-olds in the countries

in which we compete.

The target demographics are primarily 18- to 24-year-olds in the countries in which we compete.

We compete with other private higher education institutions on the basis of price, educational quality, reputation and location.

We believe that we compare favorably with competitors because of our focus on quality, professional-oriented curriculum and the competitive advantages provided by our network.

There are a number of private and public institutions in both countries in which we operate, and it is difficult to predict how the markets will evolve and how many competitors there will be in the future.

We believe that we compare favorably with competitors because of our focus on quality, professional-oriented curriculum and the competitive advantages provided by our in-country networks.

There are a number of private and public institutions in both of the countries in which we operate, and it is difficult to predict how the markets will evolve and how many competitors there will be in the future.

We expect competition to increase as the Mexican and Peruvian markets mature.

4 unchanged sentences

Laureate owns two nationally licensed institutions and is present throughout the country with a footprint of over 30 campuses.

Students in our Mexican institutions typically finance their own education.

• In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute approximately 76% of the total higher-education market.

4 unchanged sentences

The Corporate segment also contains the eliminations of inter-segment revenues and expenses.

The following information for our reportable segments is presented as of September 30, 2024:

The following information for our reportable segments is presented as of March 31, 2025:

Institutions Enrollment 2025 YTD Revenues

12 unchanged sentences

key political elections and changes in government policies;

subsequent changes to laws and regulatory regimes;

multiple and possibly overlapping and conflicting tax laws;

11 unchanged sentences

We will continue to develop and implement necessary changes that enable us to comply with such laws and regulations.

See also “Item 1A—Risk Factors—Risks Relating to Our Business—Our institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition and results of operations,” and “Item 1—Business—Industry Regulation” in our 2023 Form 10-K for a detailed discussion of our different regulatory environments.

See “Item 1A—Risk Factors—Risks Relating to Our Business—Our institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition and results of operations,” and “Item 1—Business—Industry Regulation” in our 2024 Form 10-K for a detailed discussion of our different regulatory environments.

Key Business Metric

3 unchanged sentences

Total enrollment is a function of continuing student enrollments, new student enrollments and enrollments from acquisitions, offset by graduations, attrition and enrollment decreases due to dispositions.

Attrition is defined as a student leaving the institution before completion of the program.

defined as a student leaving the institution before completion of the program.

To minimize attrition, we have implemented programs that involve assisting students in remedial education, mentoring, counseling and student financing.

Each of our institutions has an enrollment cycle that varies by geographic region and academic program.

Each institution has a “Primary Intake” period during each academic year in which the majority of the enrollment occurs.

Each institution has a “Primary Intake” period during the academic year in which the majority of the enrollment occurs.

Each institution also has a smaller “Secondary Intake” period.

26 unchanged sentences

dollar and currency exchange rates” in our 2024 Form 10‑K.

average foreign exchange rates to current-year average foreign exchange rates, as applied to local-currency operating results for the current year, and excludes the impact of acquisitions and divestitures.

In order to provide a framework for assessing how our business performed excluding the effects of foreign currency fluctuations, we present organic constant currency in our segment results, which is calculated using the change from prior-year average foreign exchange rates to current-year average foreign exchange rates, as applied to local-currency operating results for the current year, and excludes the impact of acquisitions and divestitures.

Our institutions have a summer break during which classes are generally not in session and minimal revenues are recognized.

9 unchanged sentences

Our consolidated income tax provision is derived based on the combined impact of federal, state and foreign income taxes.

Also, discrete items can arise in the course of our operations that can affect the Company’s effective tax rate for the period.

Also, discrete items can arise in the course of our operations that can further affect the Company’s effective tax rate for the period.

Our tax rate fluctuates from period to period due to changes in the mix of earnings between our tax-paying entities and our loss-making entities for which it is not 'more likely than not' that a tax benefit will be realized on the loss.

See “Item 1A—Risk Factors—Risks Relating to Our Business—We may have exposure to greater-than-anticipated tax liabilities” in our 2024 Form 10-K.

Many countries have enacted legislation and adopted policies to implement the global minimum tax resulting from the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting project.

Significant details and guidance around the global minimum tax provisions are still pending.

For countries that have enacted the global minimum tax, such taxes generally became effective for the Company beginning in 2024.

Income tax expense could be adversely affected as the legislation becomes effective in countries in which we do business.

We will continue to monitor pending legislation and implementation by individual countries in which we operate, and we do not expect the global minimum tax provisions to have a material impact on our results of operations, financial position or cash flows in 2024.

Results of Operations

4 unchanged sentences

Summary Comparison of Consolidated Results

Comparison of Consolidated Results for the Three Months Ended September 30, 2024 and 2023

Better/(Worse)

(in millions) 2024 2023 2024 vs.

Revenues $ 368.6 $ 361.5 2 %

Direct costs 286.0 291.1 2 %

General and administrative expenses 10.6 11.8 10 %

Operating income 72.0 58.7 23 %

Interest expense, net of interest income (2.6) (2.4) (8) %

Other non-operating income 15.4 13.2 17 %

Income from continuing operations before income taxes 84.9 69.5 22 %

Income tax benefit (expense) 0.5 (33.7) 101 %

Income from continuing operations 85.3 35.7 139 %

Income from discontinued operations, net of tax

— 0.2 (100) %

Net income 85.3 36.0 137 %

Net loss attributable to noncontrolling interests 0.1 0.2 50 %

Net income attributable to Laureate Education, Inc.

$ 85.5 $ 36.2 136 %

Comparison of Consolidated Results for the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023

Revenues increased by $7.1 million to $368.6 million for the three months ended September 30, 2024 (the 2024 fiscal quarter) from $361.5 million for the three months ended September 30, 2023 (the 2023 fiscal quarter).

This increase in revenues was attributable to higher average total organic enrollment at our institutions during the 2024 fiscal quarter, which increased revenues by $18.7 million compared to the 2023 fiscal quarter.

In addition, the effect of changes in tuition rates and enrollments in programs at varying price points (product mix), pricing and timing increased revenues by $12.2 million compared to the 2023 fiscal quarter.

These increases in revenues were partially offset by the effect of a net change in foreign currency exchange rates, which decreased revenues by $23.8 million compared to the 2023 fiscal quarter.

Direct costs and general and administrative expenses combined decreased by $6.3 million to $296.6 million for the 2024 fiscal quarter from $302.9 million for the 2023 fiscal quarter.

This decrease in direct costs was primarily driven by the effect of a net change in foreign currency exchange rates that decreased costs by $21.1 million compared to the 2023 fiscal quarter, partially offset by the effect of operational changes, which increased costs by $16.4 million, primarily due to the result of higher enrollment at our institutions.

Other Corporate expenses accounted for a decrease in costs of $1.6 million for the 2024 fiscal quarter compared to the 2023 fiscal quarter.

Operating income increased by $13.3 million to $72.0 million for the 2024 fiscal quarter from $58.7 million for the 2023 fiscal quarter.

The increase in operating income was mainly driven by higher operating income at our Peru segment.

Other non-operating income increased by $2.2 million to $15.4 million for the 2024 fiscal quarter from $13.2 million for the 2023 fiscal quarter.

This increase in other non-operating income was primarily attributable to an increase of $4.7 million in the gain on foreign currency exchange for the 2024 fiscal quarter as compared to the 2023 fiscal quarter, mainly related to intercompany loan arrangements.

In addition, other income was higher by $0.8 million compared to the 2023 fiscal quarter.

These year-over-year increases were partially offset by a year-over-year decrease of $3.3 million in gain on disposal of subsidiaries, which was primarily attributable to the release of an accumulated foreign currency translation gain upon the liquidation of a subsidiary during the 2023 fiscal quarter.

Income tax benefit (expense) changed by $34.2 million to a benefit of $0.5 million for the 2024 fiscal quarter from an expense of $(33.7) million for the 2023 fiscal quarter.

This change was primarily attributable to a discrete tax benefit of approximately $37.9 million that was recorded during the 2024 fiscal quarter related to an entity restructuring.

Comparison of Consolidated Results for the Nine Months Ended September 30, 2024 and 2023

Comparison of Consolidated Results for the Three Months Ended March 31, 2025 and 2024

Better/(Worse)

3 unchanged sentences

General and administrative expenses 11.0 10.3 (7) %

Loss on impairment of assets — 1.6 100 %

Operating income 249.8 228.8 9 %

Operating (loss) income (13.2) 11.1 nm

Interest expense, net of interest income (0.8) (2.8) 71 %

Other non-operating income (expense) 33.8 (47.8) 171 %

Income from continuing operations before income taxes

275.0 170.7 61 %

Other non-operating expense (3.2) (9.2) 65 %

Loss from continuing operations before income taxes

(17.3) (0.9) nm

Income tax expense (2.5) (9.9) 75 %

Income from continuing operations 202.5 69.3 192 %

Loss from continuing operations (19.8) (10.8) (83) %

Income (loss) from discontinued operations, net of tax

0.3 (3.8) 108 %

Net income 202.8 65.5 nm

Net loss (19.6) (10.8) (81) %

Net loss attributable to noncontrolling interests

Net income attributable to Laureate Education, Inc.

$ 202.8 $ 65.7 nm

Comparison of Consolidated Results for the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

Revenues increased by $68.3 million to $1,143.2 million for the nine months ended September 30, 2024 (the 2024 fiscal period) from $1,074.9 million for the nine months ended September 30, 2023 (the 2023 fiscal period).

This increase in revenues was attributable to:

(1) higher average total organic enrollment at our institutions, which increased revenues by $52.8 million compared to the 2023 fiscal period;

(2) the effect of changes in product mix, pricing and timing, which increased revenues by $14.2 million for the 2024 fiscal period;

(3) the effect of a net change in foreign currency exchange rates, which increased revenues by $1.2 million compared to the 2023 fiscal period;

and (4) other Corporate changes, which accounted for an increase in revenues of $0.1 million.

Direct costs and general and administrative expenses combined increased by $49.1 million to $893.5 million for the 2024 fiscal period from $844.4 million for the 2023 fiscal period.

This increase in direct costs was driven by the effect of operational changes, which increased direct costs by $49.8 million compared to the 2023 fiscal period, primarily due to the result of higher enrollment at our institutions.

This increase was partially offset by the effect of a net change in foreign currency exchange rates, which decreased direct costs by $0.6 million compared to the 2023 fiscal period.

Other Corporate expenses accounted for a decrease in costs of $0.1 million for the 2024 fiscal period compared to the 2023 fiscal period.

Operating income increased by $21.0 million to $249.8 million for the 2024 fiscal period from $228.8 million for the 2023 fiscal period.

This increase was a result of higher operating income at both our Mexico and Peru segments.

Other non-operating income (expense) changed by $81.6 million to income of $33.8 million for the 2024 fiscal period from expense of $(47.8) million for the 2023 fiscal period.

This increase in other non-operating income was attributable to a gain on foreign currency exchange for the 2024 fiscal period compared to a loss for the 2023 fiscal period for a change of $88.0 million, mainly related to intercompany loan arrangements.

Additionally, other income was higher by $0.3 million compared to the 2023 fiscal period.

These increases in other non-operating income were partially offset by a loss on disposal of subsidiaries for the 2024 fiscal period compared to a gain for the 2023 fiscal period for a change of $6.7 million related to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries.

Income tax expense decreased by $28.9 million to $72.5 million for the 2024 fiscal period from $101.4 million for the 2023 fiscal period.

This decrease was primarily attributable to a discrete tax benefit of approximately $37.9 million that was recorded during the 2024 fiscal period related to an entity restructuring, partially offset by a tax benefit recorded in the 2023 fiscal period related to the release of a valuation allowance.

Net loss attributable to Laureate Education, Inc.

$ (19.5) $ (10.8) (81) %

nm - percentage changes not meaningful

Comparison of Consolidated Results for the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

Revenues decreased by $39.2 million to $236.2 million for the three months ended March 31, 2025 (the 2025 fiscal quarter) from $275.4 million for the three months ended March 31, 2024 (the 2024 fiscal quarter).

This decrease in revenues was attributable to the effect of a net change in foreign currency exchange rates, which decreased revenues by $37.6 million, mainly due to the weakening of the Mexican peso against the USD compared to the 2024 fiscal quarter.

In addition, the effect of changes in tuition rates and enrollments in programs at varying price points (product mix), pricing and timing decreased revenues by $19.2 million for the 2025 fiscal quarter, mainly due to a decrease of approximately $26 million in revenue from intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal quarter as compared to the 2024 fiscal quarter.

These decreases in revenue were partially offset by higher average total organic enrollment at our institutions, which increased revenues by $17.5 million compared to the 2024 fiscal quarter.

Corporate accounted for the remaining difference of $0.1 million.

Direct costs and general and administrative expenses combined decreased by $14.9 million to $249.4 million for the 2025 fiscal quarter from $264.3 million for the 2024 fiscal quarter.

This decrease in direct costs was driven by the effect of a net change in foreign currency exchange rates, which decreased direct costs by $27.9 million, mainly due to the weakening of the Mexican peso against the USD compared to the 2024 fiscal quarter.

This decrease in direct costs was partially offset by the effect of operational changes, which increased direct costs by $12.7 million compared to the 2024 fiscal quarter, primarily due to the result of higher enrollment at our institutions.

Corporate accounted for the remaining difference of $0.3 million.

Operating (loss) income changed by $24.3 million to a loss of $(13.2) million for the 2025 fiscal quarter from income of $11.1 million for the 2024 fiscal quarter.

This change was primarily driven by a higher operating loss in our Peru segment during the 2025 fiscal quarter compared to the 2024 fiscal quarter due to the unfavorable effect of the timing of the academic calendar.

In addition, our Mexico segment had lower operating income during the 2025 fiscal quarter compared to the 2024 fiscal quarter due to the unfavorable effect of the academic calendar timing combined with the weakening of the Mexican peso against the USD.

Other non-operating expense decreased by $6.0 million to $3.2 million for the 2025 fiscal quarter from $9.2 million for the 2024 fiscal quarter.

This decrease in other non-operating expense was attributable to:

(1) the year-over-year effect of a $3.1 million loss related to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries during the 2024 fiscal quarter;

(2) a decrease in foreign currency exchange loss of $2.4 million compared to the 2024 fiscal quarter;

and (3) a decrease in other expenses of $0.5 million compared to the 2024 fiscal quarter.

Income tax expense decreased by $7.4 million to $2.5 million for the 2025 fiscal quarter from $9.9 million for the 2024 fiscal quarter.

This decrease was primarily attributable to the year-over-year effect of Peru generating a larger loss during the 2025 fiscal quarter versus the 2024 fiscal quarter due to the unfavorable effect of intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal quarter as compared to the 2024 fiscal quarter.

Non-GAAP Financial Measure

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, interest expense and interest income, plus depreciation and amortization, share-based compensation expense and loss on impairment of assets.

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, loss on debt extinguishment, interest expense and interest income, plus depreciation and amortization, share-based compensation expense and loss on impairment of assets.

Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

3 unchanged sentences

Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board of Directors.

The following table presents Adjusted EBITDA and reconciles Net income to Adjusted EBITDA for the three months ended September 30, 2024 and 2023:

Better/(Worse)

(in millions) 2024 2023 2024 vs.

Net income $ 85.3 $ 36.0 137 %

Income from discontinued operations, net of tax — (0.2) (100) %

Income from continuing operations 85.3 35.7 139 %

Income tax (benefit) expense (0.5) 33.7 101 %

Income from continuing operations before income taxes 84.9 69.5 22 %

Gain on disposal of subsidiaries, net — (3.3) (100) %

Foreign currency exchange gain, net (14.5) (9.8) 48 %

Other income, net (0.9) (0.1) nm

Interest expense 5.0 5.2 4 %

Interest income (2.4) (2.8) (14) %

Operating income 72.0 58.7 23 %

Depreciation and amortization 16.6 17.9 7 %

EBITDA 88.6 76.6 16 %

Share-based compensation expense (a)

2.8 1.8 (56) %

Adjusted EBITDA $ 91.4 $ 78.4 17 %

nm - percentage changes not meaningful

(a) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC 718, “Stock Compensation.”

The following table presents Adjusted EBITDA and reconciles Net income to Adjusted EBITDA for the nine months ended September 30, 2024 and 2023:

The following table presents Adjusted EBITDA and reconciles Net loss to Adjusted EBITDA for the three months ended March 31, 2025 and 2024:

Better/(Worse)

(in millions) 2025 2024 2025 vs.

Net income $ 202.8 $ 65.5 nm

(Income) loss from discontinued operations, net of tax (0.3) 3.8 108 %

Income from continuing operations 202.5 69.3 192 %

Net loss $ (19.6) $ (10.8) (81) %

(Income) loss from discontinued operations, net of tax (0.2) 0.1 nm

Loss from continuing operations (19.8) (10.8) (83) %

Income tax expense 2.5 9.9 75 %

Income from continuing operations before income taxes

275.0 170.7 61 %

Loss (gain) on disposal of subsidiaries, net 3.1 (3.6) (186) %

Foreign currency exchange (gain) loss, net (36.4) 51.6 171 %

Other income, net (0.5) (0.2) 150 %

Loss from continuing operations before income taxes

(17.3) (0.9) nm

Loss on disposal of subsidiaries, net — 3.1 100 %

Foreign currency exchange loss, net 3.2 5.6 43 %

Other expense, net — 0.5 100 %

Interest expense 2.4 4.7 49 %

Interest income (1.5) (1.9) (21) %

Operating income 249.8 228.8 9 %

Operating (loss) income (13.2) 11.1 nm

Depreciation and amortization 16.1 18.1 11 %

2 unchanged sentences

2.5 1.4 (79) %

Loss on impairment of assets (b)

Adjusted EBITDA $ 5.4 $ 30.6 (82) %

1 unchanged sentence

(a) Represents non-cash, share-based compensation expense pursuant to the provisions of ASC 718, “Stock Compensation.”

(b) Represents non-cash charges related to impairments of long-lived assets.

Segment Results

4 unchanged sentences

For a further description of our segments, see Overview.

The following tables, derived from our consolidated financial statements included elsewhere in this Form 10-Q, present selected financial information of our segments:

(in millions) % Change

Better/(Worse)

For the three months ended September 30, 2024 2023 2024 vs.

Mexico $ 182.5 $ 185.4 (2) %

Peru 186.1 176.2 6 %

Corporate — — nm

Consolidated Total Revenues $ 368.6 $ 361.5 2 %

Adjusted EBITDA:

Mexico $ 20.0 $ 21.9 (9) %

Peru 79.8 66.3 20 %

Corporate (8.3) (9.9) 16 %

Consolidated Total Adjusted EBITDA $ 91.4 $ 78.4 17 %

The following table, derived from our consolidated financial statements included elsewhere in this Form 10-Q, presents selected financial information of our segments:

(in millions) % Change

Better/(Worse)

For the nine months ended September 30, 2024 2023 2024 vs.

For the three months ended March 31, 2025 2024 2025 vs.

Mexico $ 189.3 $ 214.1 (12) %

9 unchanged sentences

Financial Overview

Comparison of Mexico Results for the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023

Comparison of Mexico Results for the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

(in millions) Revenues Direct Costs Adjusted EBITDA

September 30, 2023 $ 185.4 $ 163.5 $ 21.9

March 31, 2024 $ 214.1 $ 154.2 $ 59.9

Organic enrollment (1)

2 unchanged sentences

Foreign exchange (38.4) (27.3) (11.1)

September 30, 2024 $ 182.5 $ 162.5 $ 20.0

March 31, 2025 $ 189.3 $ 136.3 $ 53.0

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.

Revenues decreased by $24.8 million, a 12% decrease from the 2024 fiscal quarter.

• The revenue decrease was driven by the weakening of the Mexican peso against the USD compared to the 2023 fiscal quarter.

• Revenue for the 2025 fiscal quarter was unfavorably affected by the weakening of the Mexican peso against the USD and approximately $8 million of intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal quarter as compared to the 2024 fiscal quarter.

• Organic enrollment increased during the 2025 fiscal quarter by 8%, increasing revenues by $15.7 million.

• Revenues from our Mexico segment represented 80% of our consolidated total revenues for the 2025 fiscal quarter, compared to 78% for the 2024 fiscal quarter.

Adjusted EBITDA decreased by $1.9 million, a 9% decrease from the 2023 fiscal quarter.

Comparison of Mexico Results for the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

(in millions) Revenues Direct Costs Adjusted EBITDA

September 30, 2023 $ 559.5 $ 450.4 $ 109.1

Organic enrollment (1)

Product mix, pricing and timing (1)

Organic constant currency 49.3 35.3 14.0

Foreign exchange 6.4 1.4 5.0

September 30, 2024 $ 615.2 $ 487.1 $ 128.1

Revenues increased by $55.7 million, a 10% increase from the 2023 fiscal period.

• Organic enrollment increased during the 2024 fiscal period by 9%, increasing revenues by $44.4 million.

• Revenue for the 2024 fiscal period was unfavorably affected by the timing of the academic calendar as compared to the 2023 fiscal period.

• Revenues from our Mexico segment represented 54% of our consolidated total revenues for the 2024 fiscal period, compared to 52% for the 2023 fiscal period.

Adjusted EBITDA increased by $19.0 million, a 17% increase from the 2023 fiscal period.

Adjusted EBITDA decreased by $6.9 million, a 12% decrease from the 2024 fiscal quarter, which was primarily driven by the weakening of the Mexican peso against the USD and the timing of the academic calendar.

Financial Overview

Comparison of Peru Results for the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023

Comparison of Peru Results for the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

(in millions) Revenues Direct Costs Adjusted EBITDA

September 30, 2023 $ 176.2 $ 109.9 $ 66.3

March 31, 2024 $ 61.2 $ 81.9 $ (20.7)

Organic enrollment (1)

2 unchanged sentences

Foreign exchange 0.8 1.2 (0.4)

September 30, 2024 $ 186.1 $ 106.3 $ 79.8

March 31, 2025 $ 46.9 $ 85.7 $ (38.8)

Revenues increased by $9.9 million, a 6% increase from the 2023 fiscal quarter.

Revenues decreased by $14.3 million, a 23% decrease from the 2024 fiscal quarter.

• Revenue for the 2025 fiscal quarter was unfavorably affected by approximately $18 million of intra-year academic calendar timing attributable to later semester start dates in the 2025 fiscal quarter as compared to the 2024 fiscal quarter.

• Organic enrollment increased during the 2025 fiscal quarter by 2%, increasing revenues by $1.8 million.

• Revenues from our Peru segment represented 20% of our consolidated total revenues for the 2025 fiscal quarter compared to 22% for the 2024 fiscal quarter.

Adjusted EBITDA increased by $13.5 million, a 20% increase from the 2023 fiscal quarter.

Comparison of Peru Results for the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

(in millions) Revenues Direct Costs Adjusted EBITDA

September 30, 2023 $ 515.4 $ 308.3 $ 207.1

Organic enrollment (1)

Product mix, pricing and timing (1)

Organic constant currency 17.8 12.5 5.3

Foreign exchange (5.2) (2.2) (3.0)

September 30, 2024 $ 528.0 $ 318.6 $ 209.4

Revenues increased by $12.6 million, a 2% increase from the 2023 fiscal period.

• Organic enrollment increased during the 2024 fiscal period by 2%, increasing revenues by $8.4 million.

• Revenues from our Peru segment represented 46% of our consolidated total revenues for the 2024 fiscal period compared to 48% for the 2023 fiscal period.

Adjusted EBITDA increased by $2.3 million, a 1% increase from the 2023 fiscal period.

Adjusted EBITDA decreased by $18.1 million, an 87% decrease from the 2024 fiscal quarter, primarily due to the unfavorable effect of the academic calendar timing.

Corporate revenues primarily represent miscellaneous other revenues, net of the elimination of intersegment revenues.

Comparison of Corporate Results for the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023

Better/(Worse)

(in millions) 2024 2023 2024 vs.

Revenues $ — $ — nm

Expenses 8.3 9.9 16 %

Adjusted EBITDA $ (8.3) $ (9.9) 16 %

nm - percentage changes not meaningful

Adjusted EBITDA increased by $1.6 million, a 16% increase from the 2023 fiscal quarter, mainly driven by a reduction in labor and professional services costs.

Comparison of Corporate Results for the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

Comparison of Corporate Results for the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

Better/(Worse)

4 unchanged sentences

nm - percentage changes not meaningful

Adjusted EBITDA increased by $0.2 million, a 1% increase from the 2023 fiscal period.

Liquidity and Capital Resources

5 unchanged sentences

If our educational institutions within one country were unable to maintain sufficient liquidity, we would consider using internal cash resources or reasonable short-term working capital facilities to accommodate any short- to medium-term shortfalls.

As of September 30, 2024, our secondary source of liquidity was cash and cash equivalents of $134.4 million.

As of March 31, 2025, our secondary source of liquidity was cash and cash equivalents of $109.8 million.

Our cash accounts are maintained with high-quality financial institutions.

As of September 30, 2024, the Company also maintained a revolving credit facility under its credit agreement (the Amended Credit Agreement) that provided for $145.0 million of revolving credit loans, which matured on October 7, 2024, and $155.0 million of revolving credit loans maturing September 2028 for a $300.0 million aggregate revolving credit facility (the Revolving Credit Facility).

Accordingly, effective October 7, 2024, the borrowing capacity of the Revolving Credit Facility is $155.0 million.

The credit available to be borrowed under the Amended Credit Agreement, whether as revolving loans or term loans, if any, are referred to herein collectively as the “Senior Secured Credit Facility.” In accordance with the terms of the credit agreement, any proceeds drawn on the Revolving Credit Facility may be used for general corporate purposes.

As of September 30, 2024, the Company had borrowed $66.0 million of the available capacity.

If certain conditions are satisfied, the Amended Credit Agreement also provides for an incremental revolving and term loan facilities, at the request of the Company, not to exceed (i) the greater of (a) $172.5 million and (b) 50% of the consolidated EBITDA of the Company, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, on a pro forma basis, does not exceed 2.25x, plus (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

The Company also maintains a revolving credit facility under its credit agreement (the Amended Credit Agreement) that provides for borrowings of up to $155.0 million of revolving credit loans maturing September 2028 (the Revolving Credit Facility).

The credit available to be borrowed under the Amended Credit Agreement, whether as revolving loans or term loans, if any, are referred to herein collectively as the “Senior Secured Credit Facility.” In accordance with the terms of the Amended Credit Agreement, any proceeds drawn on the Revolving Credit Facility may be used for general corporate purposes.

As of March 31, 2025, the Company had borrowed $30.0 million of the available capacity.

If certain conditions are satisfied, the Amended Credit Agreement also provides for an incremental revolving and term loan facilities, at the request of the Company and subject to lender approval, not to exceed (i) the greater of (a) $172.5 million and (b) 50% of the Company’s Consolidated EBITDA, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, on a pro forma basis, does not exceed 2.25x, plus (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

Liquidity Restrictions

Our liquidity is affected by restricted cash balances, which totaled $6.3 million as of September 30, 2024 and $7.5 million as of December 31, 2023.

Restricted cash consisted of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Our liquidity is affected by restricted cash balances, which totaled $7.1 million as of March 31, 2025 and $6.5 million as of December 31, 2024.

Restricted cash mainly consists of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Indefinite Reinvestment of Historical Foreign Earnings

We earn a significant portion of our income from subsidiaries located in countries outside the United States.

As of September 30, 2024, $112.3 million of our total $134.4 million of cash and cash equivalents were held by foreign subsidiaries.

As of March 31, 2025, $102.9 million of our total $109.8 million of cash and cash equivalents were held by foreign subsidiaries.

As of December 31, 2024, $80.1 million of our total $91.4 million of cash and cash equivalents were held by foreign subsidiaries.

1 unchanged sentence

Liquidity Requirements

Our short-term liquidity requirements include:

Our liquidity requirements include:

funding for debt service (including finance leases);

5 unchanged sentences

stock repurchases;

and business development activities.

Long-term liquidity requirements include:

payments on long-term debt (including finance leases);

operating lease obligations;

capital expenditures;

payments of deferred compensation;

stock repurchases;

business development activities;

and payments of other third-party obligations.

As of September 30, 2024, our debt obligations consisted of $66.0 million of borrowings under the Senior Secured Credit Facility and $38.0 million of other debt.

As of March 31, 2025, our debt obligations consisted of $30.0 million of borrowings under the Senior Secured Credit Facility and $33.7 million of other debt.

Other debt includes lines of credit and short-term borrowing arrangements of subsidiaries and notes payable.

In addition, our finance lease obligations and sale-leaseback financings were $50.9 million.

Loan modification

In December 2017, one of our subsidiaries in Mexico entered into an agreement with a bank for a loan of MXN 1,700.0 million (approximately $89.0 million at the time of the loan).

The loan was scheduled to mature in June 2024.

During the second quarter of 2024, our Mexico subsidiary entered into a loan modification agreement with the bank, which extended the maturity of the loan to June 2029.

The loan carries a variable interest rate, plus an applicable margin, which is established based on the ratio of debt to EBITDA, as defined in the agreement (12.24% as of September 30, 2024).

Under the loan modification agreement, quarterly principal repayments will resume in December 2024, beginning at MXN 4.3 million ($0.2 million at September 30, 2024) and increasing to MXN 23.4 million ($1.2 million at September 30, 2024), with a balloon payment of MXN 170.0 million ($8.7 million at September 30, 2024) due at maturity.

As of September 30, 2024 and December 31, 2023, the outstanding balance of this loan was $21.7 million and $29.5 million, respectively.

Under the Amended Credit Agreement, we are subject to a Consolidated Senior Secured Debt to Consolidated EBITDA financial maintenance covenant that applies only to the Revolving Credit Facility (a leverage ratio covenant), as defined in the Amended Credit Agreement, unless certain conditions are satisfied.

The maximum ratio, as defined, is 3.00x as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter.

The agreement also provides that if less than 25% of the Revolving Credit Facility is utilized as of that date, then such financial covenant shall not apply.

As of September 30, 2024, these conditions were satisfied and, therefore, we were not subject to the leverage ratio covenant.

The Amended Credit Agreement provides, solely with respect to the revolving credit facility, that the Company shall not permit its Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, to exceed 3 as of the last day of each quarter commencing with the quarter ending December 31, 2019 and thereafter.

The Amended Credit Agreement also provides that if less than 25% of the revolving credit facility is utilized as of that date, then such financial covenant shall not apply.

As of March 31, 2025, this condition was satisfied and, therefore, we were not subject to the leverage ratio.

In addition, indebtedness at some of our locations contain financial maintenance covenants.

We were in compliance with those covenants as of September 30, 2024.

We were in compliance with those covenants as of March 31, 2025.

We conduct a significant portion of our operations from leased facilities, including many of our higher education facilities and other office locations.

As of September 30, 2024 and December 31, 2023, the present value of operating lease liabilities was $347.3 million and $417.6 million, respectively.

As of March 31, 2025 and December 31, 2024, the present value of operating lease liabilities was $321.3 million and $327.1 million, respectively.

Capital Expenditures

9 unchanged sentences

We believe that our internal sources of cash and our ability to obtain additional third-party financing, subject to market conditions, will be sufficient to fund our investing activities.

Our total capital expenditures, excluding receipts from the sale of subsidiaries and property and equipment, were $34.6 million and $26.7 million during the nine months ended September 30, 2024 and 2023, respectively.

The increase in capital expenditures was primarily due to the purchase of a parcel of land for a new campus.

Additionally, capital expenditures in Mexico were higher due to campus consolidation costs related to the implementation of a real estate optimization plan.

Our total capital expenditures, excluding receipts from the sale of subsidiaries and property and equipment, were $4.6 million and $15.9 million during the three months ended March 31, 2025 and 2024, respectively.

The decrease in capital expenditures was primarily due to the year-over-year effect of the purchase of a parcel of land for a new campus during the 2024 fiscal quarter.

Share Repurchase Programs

On February 22, 2024, the Company announced that its Board of Directors had approved a stock repurchase program to acquire up to $100 million of the Company’s common stock.

This program was completed in September 2024.

On September 13, 2024, the Company announced that its Board of Directors had approved a new stock repurchase program to acquire up to $100 million of the Company’s common stock.

The Company’s repurchases may be made from time to time on

the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act.

On September 13, 2024, the Company announced that its Board of Directors had approved a stock repurchase program to acquire up to $100 million of the Company’s common stock.

The Company’s repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act.

Repurchases may also be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act.

The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program.

As of September 30, 2024, no shares were repurchased under this new program.

As of March 31, 2025, the approximate dollar value of shares yet to be repurchased under this stock repurchase program was $56.1 million.

The Company intends to finance the repurchases with free cash flow, excess cash and liquidity and liquidity on-hand, including available capacity under its Revolving Credit Facility, or a combination thereof.

2 unchanged sentences

The effects of exchange rate changes on cash are presented separately in the consolidated statements of cash flows.

The following table summarizes our cash flows from operating, investing, and financing activities for the nine months ended September 30, 2024 and 2023:

The following table summarizes our cash flows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024:

(in millions) 2025 2024

6 unchanged sentences

Net change in cash and cash equivalents and restricted cash $ 19.1 $ 36.9

Comparison of Cash Flows for the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023

Comparison of Cash Flows for the Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

Operating Activities

Cash provided by operating activities increased by $4.6 million to $192.0 million for the 2024 fiscal period from $187.4 million for the 2023 fiscal period.

This increase in operating cash flows was attributable to higher operating income combined with the net effect of changes in operating assets and liabilities, which increased operating cash by $12.0 million compared to the 2023 fiscal period.

Additionally, cash paid for interest decreased by $3.2 million from $16.3 million for the 2023 fiscal period to $13.1 million for the 2024 fiscal period, mostly due to lower average debt balances.

These increases in operating cash were partially offset by higher cash paid for taxes of $10.6 million, from $120.0 million for the 2023 fiscal period to $130.6 million for the 2024 fiscal period, primarily related to taxes paid during the 2024 fiscal period as a result of the distribution of certain intercompany loans.

Cash provided by operating activities increased by $24.6 million to $57.8 million for the 2025 fiscal quarter from $33.2 million for the 2024 fiscal quarter.

This increase in operating cash flows was attributable to:

(1) the net effect of changes in operating assets and liabilities partially offset by lower operating income, which increased operating cash by $19.8 million compared to the 2024 fiscal quarter;

(2) lower cash paid for taxes of $2.6 million, from $21.1 million for the 2024 fiscal quarter to $18.5 million for the 2025 fiscal quarter;

and (3) lower cash paid for interest of $2.2 million, from $4.2 million for the 2024 fiscal quarter to $2.0 million for the 2025 fiscal quarter.

Investing Activities

Cash used in investing activities increased by $4.3 million to $(30.5) million for the 2024 fiscal period from $(26.2) million for the 2023 fiscal period.

This increase in investing cash outflows was primarily attributable to higher capital expenditures of $7.8 million during the 2024 fiscal period compared to the 2023 fiscal period, mainly driven by the purchase of a parcel of land for a new campus.

This increase in investing cash outflows was partially offset by higher cash proceeds from the sale of property and equipment of $3.0 million, mainly related to the sale of a parcel of land in the United States during the second quarter of 2024.

In addition, the year-over-year change in cash flows related to run out activity from previously sold discontinued operations increased investing cash flows by $0.5 million.

Cash used in investing activities decreased by $11.4 million to $(4.6) million for the 2025 fiscal quarter from $(16.0) million for the 2024 fiscal quarter.

This decrease in investing cash outflows was primarily attributable to lower capital expenditures of $11.3 million during the 2025 fiscal quarter compared to the 2024 fiscal quarter, mainly driven by the purchase of a parcel of land for a new campus during the 2024 fiscal quarter.

Other items accounted for the remaining difference of $0.1 million.

Financing Activities

Cash used in financing activities decreased by $8.5 million to $(111.7) million for the 2024 fiscal period from $(120.2) million for the 2023 fiscal period.

This decrease in financing cash outflows was primarily attributable to lower net payments of long-term debt during the 2024 fiscal period of $110.7 million compared to the 2023 fiscal period.

This decrease in financing cash outflows was partially offset by payments for common stock repurchases of $100.0 million during the 2024 period, as well as

lower proceeds from the exercise of stock options of $3.0 million compared to the 2023 fiscal period.

Cash flow from financing activities changed by $53.0 million to an outflow of $(34.6) million for the 2025 fiscal quarter from an inflow of $18.4 million for the 2024 fiscal quarter.

This decrease in financing cash flows was primarily attributable to $47.0 million of lower net proceeds from long-term debt during the 2025 fiscal quarter compared to the 2024 fiscal quarter.

In addition, payments for common stock repurchases were higher by $6.6 million during the 2025 period compared to the 2024 fiscal quarter.

Other items accounted for the remaining difference of $0.6 million.

6 unchanged sentences

For a complete discussion of our critical accounting policies, see the “Critical Accounting Policies and Estimates” section of the MD&A in our 2024 Form 10-K.

During the nine months ended September 30, 2024, there were no significant changes to our critical accounting policies.

During the three months ended March 31, 2025, there were no significant changes to our critical accounting policies.

Recently Adopted Accounting Standards

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis