Adtalem Global Education reported 1.3% higher revenue for its first fiscal quarter despite declining enrollment at Walden University, its online program. Revenue reached $273.5 million for the quarter ended December 31, beating analyst estimates.

Walden University’s enrollment declined 6% year over year to 92,570 students, attributed to strategy changes aimed at improving student outcomes. The impacts of those changes will take time, the company said, but they remain confident in their ability to grow Walden profitably long-term.

Adtalem’s medical and veterinary schools drove quarterly gains, with 9% and 13% revenue increases, respectively. Revenue was up 4% at the company’s undergraduate health programs. Those gains offset the drop at Walden along with revenue declines in Adtalem’s global, accountancy, and technology programs.

Operating income was $19.3 million for the quarter, a 14% increase from the prior year period. Adjusted EBITDA grew 10% to $36.7 million, outpacing revenue growth. Strong results from Adtalem’s medical schools contributed to margin expansion across key metrics.

While Walden’s enrollment continues declining, the company affirmed goals around improving student retention, increasing graduation rates, and developing high-quality new academic programs. They aim to reach scale in operating leverage and see additional revenue synergies in the future when Walden’s revamped strategy shows full impact.

Adtalem ended the quarter with $444 million in cash and cash equivalents along with a net debt leverage ratio of 2.8x EBITDA. The company used excess cash to pay down debt by $24 million during the quarter and $73 million over the past year. Reduced leverage provides flexibility to pursue additional growth strategies if needed.

Adtalem reported steady growth and margin expansion in its first quarter despite headwinds at Walden University. Results were driven by its medical and health programs while the company works to stabilize Walden’s enrollment and financial performance over time. With a strong balance sheet and additional initiatives underway, Adtalem appears well-positioned for success despite short-term challenges. Progress at Walden will determine how quickly and how high the company can climb from here.

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