PRDO Q1 Earnings Call: Enrollment Gains, St. Augustine Acquisition Drive Guidance Increase

May 15, 2025 at 17:17 PM EDT

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Higher education company Perdoceo Education (NASDAQ: PRDO) announced better-than-expected revenue in Q1 CY2025, with sales up 26.6% year on year to $213 million. Its non-GAAP profit of $0.70 per share was 6.1% above analysts’ consensus estimates.

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Perdoceo Education (PRDO) Q1 CY2025 Highlights:

Revenue: $213 million vs analyst estimates of $208 million (26.6% year-on-year growth, 2.4% beat)
Adjusted EPS: $0.70 vs analyst estimates of $0.66 (6.1% beat)
Adjusted EBITDA: $66.39 million vs analyst estimates of $62.1 million (31.2% margin, 6.9% beat)
Management raised its full-year Adjusted EPS guidance to $2.48 at the midpoint, a 2.9% increase
Operating Margin: 24.3%, down from 28.5% in the same quarter last year
Free Cash Flow Margin: 29.8%, down from 31.7% in the same quarter last year
Market Capitalization: $2.03 billion

StockStory’s Take

Perdoceo Education’s first quarter results reflected solid execution on enrollment growth and the initial impact of its recent St. Augustine acquisition. Management attributed the quarter’s revenue outperformance primarily to higher student retention and engagement at Colorado Technical University (CTU) and American InterContinental University System (AIUS), as well as increased new enrollments at St. Augustine. CEO Todd Nelson highlighted that targeted marketing investments and a focus on student outcomes have reinforced these trends, stating, “We entered 2025 with student retention and engagement near multi-year highs.”

Looking ahead, Perdoceo raised its full-year profit forecast, citing continued strong enrollment momentum and operational contributions from St. Augustine. CFO Ashish Ghia explained that technology and support staff investments are expected to sustain retention levels for the remainder of 2025, while ongoing expansion of corporate student programs is seen as a key driver of organic growth. Management acknowledged some variability at AIUS, but expects total enrollments to increase in coming quarters, supporting the updated guidance.

Key Insights from Management’s Remarks

Perdoceo Education’s first quarter benefited from increased student engagement and the inclusion of St. Augustine, which helped drive higher-than-expected revenue and profits. The company’s management emphasized several qualitative business drivers and operational shifts that shaped the quarter:

St. Augustine acquisition impact: The integration of St. Augustine, acquired in December, provided a significant boost to revenue and adjusted operating income, with management expecting further contributions in 2026.
Enrollment growth at CTU: CTU saw a 10.6% rise in total student enrollments, attributed to high retention, increased engagement, and growth within its corporate student program.
Targeted marketing investments: Perdoceo increased marketing and admissions spending to identify and engage prospective students who are likely to succeed, adjusting strategies based on ongoing student interest.
Operational efficiency at AIUS: While revenue at AIUS was flat, operating income improved due to lower operating expenses, demonstrating effective cost management despite a 4.5% drop in enrollments.
Hybrid and flexible learning expansion: St. Augustine expanded its program modalities, offering a mix of online, in-person, and hybrid formats. This flexibility is designed to increase geographic reach and appeal to a broader student population.

Drivers of Future Performance

Management expects growth in revenue and adjusted profit in the coming quarters, driven by sustained enrollment momentum and the ongoing integration of St. Augustine. The company’s forward outlook is shaped by several strategic priorities and market dynamics:

Sustained student retention: Management believes persistent high student retention and engagement will underpin revenue stability across CTU and AIUS.
Corporate program expansion: Growth in corporate student programs at CTU is expected to support organic enrollment increases, with additional investments in technology and personnel planned.
Regulatory and market variability: While management anticipates regulatory changes will not materially affect demand in 2025, it acknowledges that enrollment trends at AIUS could fluctuate due to academic calendar differences and marketing shifts.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will watch for (1) continued enrollment growth at CTU and across the St. Augustine campuses, (2) evidence that marketing investments are translating to higher student retention and engagement, and (3) successful integration of St. Augustine’s programs into Perdoceo’s broader platform. Any regulatory changes or shifts in student demand will also be important markers for the company’s execution.

Perdoceo Education currently trades at a forward EV-to-EBITDA ratio of 12.9×. Should you double down or take your chips? The answer lies in our free research report.

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