Vocational education Universal Technical Institute (NYSE: UTI) reported Q1 CY2025 results topping the market’s revenue expectations, with sales up 12.6% year on year to $207.4 million. The company’s full-year revenue guidance of $830 million at the midpoint came in 1.9% above analysts’ estimates. Its GAAP profit of $0.21 per share was 72.6% above analysts’ consensus estimates.
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Universal Technical Institute (UTI) Q1 CY2025 Highlights:
- Revenue: $207.4 million vs analyst estimates of $196.4 million (12.6% year-on-year growth, 5.6% beat)
- EPS (GAAP): $0.21 vs analyst estimates of $0.12 (72.6% beat)
- Adjusted EBITDA: $28.9 million vs analyst estimates of $22.09 million (13.9% margin, 30.8% beat)
- The company lifted its revenue guidance for the full year to $830 million at the midpoint from $815 million, a 1.8% increase
- EPS (GAAP) guidance for the full year is $1.04 at the midpoint, beating analyst estimates by 4.3%
- EBITDA guidance for the full year is $126 million at the midpoint, above analyst estimates of $123.5 million
- Operating Margin: 8.1%, up from 6.1% in the same quarter last year
- Free Cash Flow was $7.88 million, up from -$8.40 million in the same quarter last year
- New Students: 6,650, up 1,170 year on year
- Market Capitalization: $1.60 billion
"We delivered another strong quarter in Q2 as we continued to advance our North Star Strategy and build on our operational momentum," said Jerome Grant, CEO of Universal Technical Institute, Inc.
Company Overview
Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, Universal Technical Institute’s 18.4% annualized revenue growth over the last five years was solid. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.
We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Universal Technical Institute’s annualized revenue growth of 25.7% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
We can better understand the company’s revenue dynamics by analyzing its number of new students, which reached 6,650 in the latest quarter. Over the last two years, Universal Technical Institute’s new students averaged 38.6% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen. 
This quarter, Universal Technical Institute reported year-on-year revenue growth of 12.6%, and its $207.4 million of revenue exceeded Wall Street’s estimates by 5.6%.
Looking ahead, sell-side analysts expect revenue to grow 8.8% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will face some demand challenges.
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Operating Margin
Universal Technical Institute’s operating margin has been trending up over the last 12 months and averaged 7.8% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports paltry profitability for a consumer discretionary business.
This quarter, Universal Technical Institute generated an operating profit margin of 8.1%, up 2 percentage points year on year. This increase was a welcome development and shows it was more efficient.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Universal Technical Institute’s EPS grew at an astounding 30.5% compounded annual growth rate over the last five years, higher than its 18.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
In Q1, Universal Technical Institute reported EPS at $0.21, up from $0.14 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Universal Technical Institute’s full-year EPS of $1.04 to shrink by 7.9%.
Key Takeaways from Universal Technical Institute’s Q1 Results
We were impressed by how significantly Universal Technical Institute blew past analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 11.4% to $33 immediately after reporting.
Indeed, Universal Technical Institute had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.
