Adtalem Global Education Announces Fiscal Third Quarter 2023 Results

Improving total enrollment trends

Strategic transformation momentum

Narrows guidance for fiscal year 2023

Third quarter highlights

•	Revenue $369.1 million, up 1.3% year-over-year

•	Total student enrollment 79,586, down 3.1% year-over-year, a quarterly sequential improvement of 100 basis points

•	Chamberlain University strong demand in pre-licensure BSN and post-licensure MSN programs

•	Diluted earnings per share $1.00 from $7.04 in the prior year; adjusted earnings per share $1.13, up 34.5% versus prior year

Fiscal year 2023 guidance

•	Revenue $1,400 million to $1,450 million

•	Adjusted earnings per share $4.05 to $4.20

Repurchased $48 million of shares in the third quarter against $300 million Board authorized share repurchase program

CHICAGO Ill. – May 2, 2023 – Adtalem Global Education Inc. (NYSE: ATGE), a national leader in post-secondary education and a leading provider of professional talent to the healthcare industry, today reported academic, operating and financial results for its third quarter fiscal 2023 ended March 31, 2023.

“Our third quarter results showcase our unwavering commitment to provide access to high-quality, post-secondary and graduate level programs to nearly 80,000 diverse students and working adults. We continue to make steady progress in strengthening our operational excellence, supporting our portfolio of programs and solutions in ways that benefit all our stakeholders, especially our students. One testament to these benefits are the first time residency attainment rates for American University of the Caribbean School of Medicine and Ross University School of Medicine students attaining 2023/24 residency positions which, at 97%, are among the highest-ever for these institutions,” said Steve Beard, president and CEO of Adtalem Global Education.

Beard continued, “With market leading scale and a commitment to broad access and quality outcomes, we are addressing critical talent shortages in healthcare for the benefit of communities nationwide. Our strategic vision, disciplined execution, results, and improving industry outlook positions Adtalem to drive long-term sustainable growth.”

Financial Highlights

Selected financial data for the three months ended March 31, 2023:

•	Revenue of $369.1 million increased 1.3% compared with the prior year.

•

Operating income was $59.4 million, compared with $32.9 million in the prior year; adjusted operating income was $73.0 million, a decrease of 4.3% compared with $76.2 million in the prior year. Operating margin was 16.1% compared with 9.0% in the prior year, and adjusted operating margin was 19.8% compared with 20.9% in the prior year.

•	Net income was $45.9 million, compared with $347.7 million in the prior year; adjusted net income was $51.6 million, an increase of 24.7% compared with $41.4 million in the prior year.

•	Diluted earnings per share decreased to $1.00 from $7.04 in the prior year; adjusted earnings per share increased to $1.13, up 34.5% compared with $0.84 in the prior year.

•	Adjusted EBITDA was $85.9 million, a decrease of 6.8% compared with $92.2 million in the prior year; adjusted EBITDA margin was 23.3% compared with 25.3% in the prior year.

Selected financial data for the nine months ended March 31, 2023:

•	Revenue of $1,086.2 million increased 6.4% compared with the prior year.

•

Operating income was $128.6 million, compared with $30.8 million in the prior year; adjusted operating income was $217.6 million, an increase of 22.2% compared with $178.0 million in the prior year. Operating margin improved to 11.8% from 3.0% and adjusted operating margin increased to 20.0% from 17.4% in the prior year.

•	Net income was $71.1 million, compared with $304.2 million in the prior year; adjusted net income was $146.9 million, an increase of 57.3% compared with $93.4 million in the prior year.

•	Diluted earnings per share decreased to $1.54 from $6.15 in the prior year; adjusted earnings per share increased to $3.19, up 70.6% compared with $1.87 in the prior year.

•	Adjusted EBITDA was $260.2 million, an increase of 16.2% compared with $223.9 million in the prior year; adjusted EBITDA margin was 24.0% compared with 21.9% in the prior year.

Business Highlights

•	Chamberlain University’s pre-licensure Bachelor of Science in Nursing (BSN) is accredited by the Higher Learning Commission and Commission on Collegiate Nursing Education. The online option now has over 500 enrollees spread across 22 states in just 2.5 years since launch.

•

First-time residency attainment rates for American University of the Caribbean School of Medicine and Ross University School of Medicine are at 97% for students attaining 2023/24 residency positions, among the highest-ever rates for the institutions, with 66% of those residents going into the all-important primary care specialty.

•

More than 875 students and graduates from Ross University School of Medicine and American University of the Caribbean School of Medicine will enter U.S. residency programs in 2023, representing 29 specialties deployed across 45 states. 26% of the students and graduates entering residency are from underrepresented minorities.

•	Walden University’s Master of Healthcare Administration program achieved Candidate Status from the Commission on Accreditation of Healthcare Management Education (CAHME).

•

Chamberlain University and Ochsner Health, the largest healthcare system and private employer in the state of Louisiana, partnered to launch the new Heart of Healthcare Program which awards up to three years of partial tuition coverage to eligible new students enrolled in the three-year Bachelor of Science in Nursing (BSN) degree program at Chamberlain University College of Nursing at Ochsner Health campus in New Orleans.

Segment Highlights

Chamberlain

•	Revenue in the third quarter increased 5.0% to $149.7 million from $142.6 million in the prior year.

•	Segment operating income increased 7.1% to $39.6 million from $37.0 million in the prior year. Adjusted segment operating income increased 1.7% to $39.6 million from $38.9 million in the prior year.

•	Adjusted EBITDA decreased 1.3% to $44.9 million compared with $45.5 million in the prior year.

•	Total student enrollment increased 2.0% compared with the prior year, driven by growth in pre-licensure and post-licensure nursing programs as well as higher persistence across the segment.

Walden

•	Revenue in the third quarter decreased 4.5% to $132.9 million from $139.1 million in the prior year.

•	Segment operating income increased to $10.3 million compared with segment operating loss of $3.2 million in the prior year. Adjusted segment operating income decreased 4.7% to $24.6 million compared with $25.8 million in the prior year.

•	Adjusted EBITDA decreased 4.9% to $27.8 million compared with $29.3 million in the prior year.

•

Total student enrollment decreased 7.9% compared with the prior year, primarily attributable to declines in non-healthcare programs and to a lesser extent to healthcare programs partially offset by higher persistence across the segment. Elimination of off-cycle start dates adversely impacted year-over-year total enrollment growth by 2.2%.

Medical and Veterinary

•	Revenue in the third quarter increased 4.6% to $86.5 million from $82.7 million in the prior year.

•	Segment operating income increased by 21.4% to $16.5 million from $13.6 million in the prior year. Adjusted segment operating income decreased 6.9% to $16.9 million compared with $18.1 million in the prior year.

•	Adjusted EBITDA decreased 8.4% to $20.7 million compared with $22.6 million in the prior year.

•	Total student enrollment increased 1.6% compared with the prior year, driven by growth in both medical and veterinary programs.

Fiscal Year 2023 Outlook

Adtalem narrowed its guidance for fiscal year 2023 revenue to a range of $1,400 million to $1,450 million from a range of $1,380 million to $1,450 million, and adjusted earnings per share to a range of $4.05 to $4.20 from a range of $3.95 to $4.20.

Conference Call and Webcast Information

Adtalem will hold a conference call to discuss its fiscal 2023 third quarter results today at 4:30 p.m. CDT (5:30 p.m. EDT).

The call can be accessed by dialing +1 877-407-6184 (U.S. participants) or +1 201-389-0877 (international participants) stating “Adtalem earnings call” or use conference ID: 13737030. The call will be simulcast through the Adtalem investor relations website at: https://investors.adtalem.com.

Adtalem will archive a replay of the call for 30 days. To access the replay, dial +1 877-660-6853 (U.S.) or +1 201-612-7415 (international), conference ID: 13737030, or visit the Adtalem investor relations website at: https://investors.adtalem.com.

Investor Day

Adtalem will host an Investor Day on Tuesday, June 20, 2023, at 9:00 a.m. CDT at Adtalem’s Chamberlain University Chicago campus. Advanced registration will be required to attend the event in-person. To register, please visit Adtalem’s Investor Day website.

During the investor event, Adtalem’s executive leadership team will discuss the Company’s strategic priorities, growth strategy, and financial outlook. Investors and analysts will have the opportunity to participate in a Q&A session. In-person participants are invited to join the leadership team to tour the campus.

About Adtalem Global Education

Adtalem Global Education (NYSE: ATGE) is a national leader in post-secondary education and leading provider of professional talent to the healthcare industry. With a dedicated focus on driving strong outcomes that increase workforce preparedness, Adtalem empowers a diverse learner population to achieve their goals and make inspiring contributions to their communities. Adtalem is the parent organization of American University of the Caribbean School of Medicine, Chamberlain University, Ross University School of Medicine, Ross University School of Veterinary Medicine and Walden University. Adtalem’s family of institutions has more than 300,000 alumni and 10,000 employees. Adtalem was named one of America’s Most Responsible Companies in 2021 and 2023 by Newsweek and Statista, and one of America’s Best Employers for Diversity in 2021 and 2022 by Forbes and Statista. Visit Adtalem.com for more information and follow on Twitter and LinkedIn.

Forward-Looking Statements

Certain statements contained in this release are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth, the future impacts of the COVID-19 pandemic, and the expected synergies from the Walden acquisition. Forward-looking statements can also be identified by words such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risk and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) and our other filings with the SEC. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.


	Q3 2023	Q3 2022	% Change
Adtalem Global Education Student Enrollments
Total students⁽¹⁾	79,586	82,174		-3.1	%

Chamberlain University
Total students	34,847	34,158		2.0	%

Walden University
Total students	39,427	42,788		-7.9	%

Medical & Veterinary
Total students	5,312	5,228		1.6	%

(1) Represents total students attending sessions during each institution’s most recent enrollment period in Q3 FY 2023 and Q3 FY 2022

Adtalem Global Education Inc.

Consolidated Balance Sheets

(unaudited)

(in thousands, except par value)


	March 31,			June 30,			March 31,
	2023			2022			2022
Assets:
Current assets:
Cash and cash equivalents	$	315,373		$	346,973		$	788,729
Restricted cash		1,804			964			1,266
Accounts receivable, net		113,284			81,635			96,064
Prepaid expenses and other current assets		102,573			127,532			124,968
Current assets held for sale		—			—			1,432
Total current assets		533,034			557,104			1,012,459
Noncurrent assets:
Property and equipment, net		252,797			289,926			294,538
Operating lease assets		173,271			177,995			186,968
Deferred income taxes		54,494			51,093			47,574
Intangible assets, net		824,641			873,577			896,884
Goodwill		961,262			961,262			961,262
Other assets, net		67,618			119,283			120,145
Noncurrent assets held for sale		—			—			93
Total noncurrent assets		2,334,083			2,473,136			2,507,464
Total assets	$	2,867,117		$	3,030,240		$	3,519,923

Liabilities and shareholders' equity:
Current liabilities:
Accounts payable	$	73,307		$	57,140		$	67,252
Accrued payroll and benefits		56,023			67,792			57,510
Accrued liabilities		86,691			98,124			176,921
Deferred revenue		175,488			149,810			171,937
Current operating lease liabilities		46,411			50,781			51,335
Current liabilities held for sale		—			—			1,417
Total current liabilities		437,920			423,647			526,372
Noncurrent liabilities:
Long-term debt		694,429			838,908			1,225,360
Long-term operating lease liabilities		164,185			177,045			188,955
Deferred income taxes		27,237			25,554			25,862
Other liabilities		32,961			73,700			74,380
Noncurrent liabilities held for sale		—			—			41
Total noncurrent liabilities		918,812			1,115,207			1,514,598
Total liabilities		1,356,732			1,538,854			2,040,970
Commitments and contingencies
Shareholders' equity:
Common stock, $0.01 par value per share, 200,000 shares authorized; 44,232, 45,177, and 45,138 shares outstanding as of March 31, 2023, June 30, 2022, and March 31, 2022, respectively		822			818			818
Additional paid-in capital		564,363			521,848			517,431
Retained earnings		2,381,506			2,310,396			2,303,650
Accumulated other comprehensive loss		(2,227	)		(2,227	)		(3,417	)
Treasury stock, at cost, 37,939, 36,619, and 36,621 shares as of March 31, 2023, June 30, 2022, and March 31, 2022, respectively		(1,434,079	)		(1,339,449	)		(1,339,529	)
Total shareholders' equity		1,510,385			1,491,386			1,478,953
Total liabilities and shareholders' equity	$	2,867,117		$	3,030,240		$	3,519,923

Adtalem Global Education Inc.

Consolidated Statements of Income

(unaudited)

(in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2023			2022			2023			2022
Revenue	$	369,082		$	364,281		$	1,086,185		$	1,021,195
Operating cost and expense:
Cost of educational services		165,820			166,027			484,768			498,497
Student services and administrative expense		144,526			148,863			432,713			433,379
Restructuring expense		1,278			10,518			17,706			16,999
Business acquisition and integration expense		11,346			5,924			35,702			41,537
Gain on sale of assets		(13,317	)		—			(13,317	)		—
Total operating cost and expense		309,653			331,332			957,572			990,412
Operating income		59,429			32,949			128,613			30,783
Interest expense		(14,457	)		(36,585	)		(47,806	)		(109,907	)
Other income (expense), net		3,980			(327	)		3,301			2,435
Income (loss) from continuing operations before income taxes		48,952			(3,963	)		84,108			(76,689	)
(Provision for) benefit from income taxes		(389	)		8,363			(5,906	)		39,597
Income (loss) from continuing operations		48,563			4,400			78,202			(37,092	)
Discontinued operations:
(Loss) income from discontinued operations before income taxes		(3,993	)		3,426			(6,734	)		1,535
(Loss) gain on disposal of discontinued operations before income taxes		(402	)		474,003			(3,576	)		474,003
Benefit from (provision for) income taxes		1,701			(134,089	)		3,222			(134,201	)
(Loss) income from discontinued operations		(2,694	)		343,340			(7,088	)		341,337
Net income	$	45,869		$	347,740		$	71,114		$	304,245

Earnings (loss) per share:
Basic:
Continuing operations	$	1.08		$	0.09		$	1.73		$	(0.75	)
Discontinued operations	$	(0.06	)	$	7.02		$	(0.16	)	$	6.90
Total basic earnings per share	$	1.02		$	7.11		$	1.57		$	6.15
Diluted:
Continuing operations	$	1.06		$	0.09		$	1.70		$	(0.75	)
Discontinued operations	$	(0.06	)	$	6.95		$	(0.15	)	$	6.90
Total diluted earnings per share	$	1.00		$	7.04		$	1.54		$	6.15

Weighted-average shares outstanding:
Basic shares		45,125			48,925			45,276			49,459
Diluted shares		45,801			49,377			46,089			49,459

Adtalem Global Education Inc.

Consolidated Statements of Cash Flows
(unaudited)

(in thousands)


	Nine Months Ended
	March 31,
	2023			2022
Operating activities:
Net income	$	71,114		$	304,245
Loss (income) from discontinued operations		7,088			(341,337	)
Income (loss) from continuing operations		78,202			(37,092	)
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense		10,908			18,604
Amortization and impairments to operating lease assets		37,928			35,251
Depreciation		31,618			33,471
Amortization of intangible assets		48,936			73,967
Amortization and write-off of debt discount and issuance costs		7,974			34,481
Provision for bad debts		23,391			19,552
Deferred income taxes		(1,718	)		3,425
Loss on disposals, accelerated depreciation, and impairments to property and equipment		3,999			2,274
Gain on extinguishment of debt		(71	)		—
Loss on investments		4,122			807
Gain on sale of assets		(13,317	)		—
Changes in assets and liabilities:
Accounts receivable		(43,345	)		(40,520	)
Prepaid expenses and other current assets		7,034			2,398
Accounts payable		12,286			(5,737	)
Accrued payroll and benefits		(11,719	)		(22,416	)
Accrued liabilities		(20,275	)		(92,528	)
Deferred revenue		26,038			92,507
Operating lease liabilities		(37,758	)		(36,159	)
Other assets and liabilities		(14,412	)		(23,514	)
Net cash provided by operating activities-continuing operations		149,821			58,771
Net cash used in operating activities-discontinued operations		(404	)		(6,915	)
Net cash provided by operating activities		149,417			51,856
Investing activities:
Capital expenditures		(19,056	)		(22,249	)
Proceeds from sale of marketable securities		7,635			941
Purchases of marketable securities		(1,508	)		(1,315	)
Proceeds from note receivable related to property sold		46,800			—
Payment for purchase of business, net of cash and restricted cash acquired		—			(1,488,054	)
Cash received on DeVry University loan		—			10,000
Net cash provided by (used in) investing activities-continuing operations		33,871			(1,500,677	)
Net cash used in investing activities-discontinued operations		—			(3,287	)
Proceeds from sale of business, net of cash transferred		—			962,652
Payment for working capital adjustment for sale of business		(3,174	)		—
Net cash provided by (used in) investing activities		30,697			(541,312	)
Financing activities:
Proceeds from exercise of stock options		1,622			8,433
Employee taxes paid on withholding shares		(4,214	)		(2,727	)
Proceeds from stock issued under Colleague Stock Purchase Plan		451			400
Repurchases of common stock for treasury		(44,710	)		(120,000	)
Payment on equity forward contract		(13,162	)		(30,000	)
Proceeds from long-term debt		—			850,000
Repayments of long-term debt		(150,861	)		(687,667	)
Payment of debt discount and issuance costs		—			(49,553	)
Payment for purchase of redeemable noncontrolling interest of subsidiary		—			(1,790	)
Net cash used in financing activities		(210,874	)		(32,904	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		—			12
Net decrease in cash, cash equivalents and restricted cash		(30,760	)		(522,348	)
Cash, cash equivalents and restricted cash at beginning of period		347,937			1,313,616
Cash, cash equivalents and restricted cash at end of period		317,177			791,268
Less: cash, cash equivalents and restricted cash of discontinued operations at end of period		—			1,273
Cash, cash equivalents and restricted cash of continuing operations at end of period	$	317,177		$	789,995
Non-cash investing and financing activities:
Accrued capital expenditures	$	10,474		$	5,408
Accrued liability for repurchases of common stock	$	2,699		$	—
Accrued excise tax on share repurchases	$	361		$	—
Settlement of financing liability with assets	$	38,606		$	—

Adtalem Global Education Inc.

Segment Information

(unaudited)

(in thousands)


	Three Months Ended												Nine Months Ended
	March 31,												March 31,
							Increase/(Decrease)												Increase/(Decrease)
	2023			2022			$				%			2023			2022		$			%
Revenue:
Chamberlain	$	149,737		$	142,550		$	7,187			5.0	%	$	426,538		$	417,310		$	9,228		2.2	%
Walden		132,874			139,081			(6,207	)		(4.5	)%		395,715			348,325			47,390		13.6	%
Medical and Veterinary		86,471			82,650			3,821			4.6	%		263,932			255,560			8,372		3.3	%
Total consolidated revenue	$	369,082		$	364,281		$	4,801			1.3	%	$	1,086,185		$	1,021,195		$	64,990		6.4	%
Operating income (loss):
Chamberlain	$	39,589		$	36,979		$	2,610			7.1	%	$	99,002		$	83,290		$	15,712		18.9	%
Walden		10,343			(3,199	)		13,542		NM				26,071			(17,748	)		43,819	NM
Medical and Veterinary		16,472			13,571			2,901			21.4	%		49,172			45,400			3,772		8.3	%
Home Office and Other		(6,975	)		(14,402	)		7,427			51.6	%		(45,632	)		(80,159	)		34,527		43.1	%
Total consolidated operating income	$	59,429		$	32,949		$	26,480			80.4	%	$	128,613		$	30,783		$	97,830		317.8	%

Non-GAAP Financial Measures and Reconciliations

We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in the subsequent GAAP to non-GAAP reconciliation tables:

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, intangible amortization expense, gain on sale of assets, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, investment impairment, net tax benefit related to a valuation allowance release, and net loss (income) from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, intangible amortization expense, gain on sale of assets, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, investment impairment, net tax benefit related to a valuation allowance release, and net loss (income) from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, intangible amortization expense, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for net loss (income) from discontinued operations, interest expense, other (income) expense, net, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Income taxes, interest expense, and other (income) expense, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income (loss).

Free cash flow (most comparable GAAP measure: net cash provided by operating activities-continuing operations) – Defined as net cash provided by operating activities-continuing operations less capital expenditures.

Net debt – Defined as long-term debt less cash and cash equivalents.

Net leverage – Defined as net debt divided by adjusted EBITDA.

A description of special items in our non-GAAP financial measures described above are as follows:

•	Deferred revenue adjustment related to a revenue purchase accounting adjustment to record Walden’s deferred revenue at fair value.

•	CEO transition costs related to acceleration of stock-based compensation expense.

•	Restructuring expense primarily related to plans to achieve synergies with the Walden acquisition and real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.

•	Business acquisition and integration expense include expenses related to the Walden acquisition and certain costs related to growth transformation initiatives. We do not include normal, recurring, cash operating expenses in our business acquisition and integration expense.

•	Intangible amortization expense on acquired intangible assets.

•	Gain on sale of Adtalem’s Chicago, Illinois, campus facility.

•	Pre-acquisition interest expense related to financing arrangements in connection with the Walden acquisition, write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, and impairment of an equity investment.

•	Net tax benefit related to a valuation allowance release.

•	Net loss (income) from discontinued operations includes the operations of ACAMS, Becker, OCL, including the after-tax gain on the sale of these businesses, and EduPristine operations, in addition to costs related to DeVry University.

Adtalem Global Education Inc.

Non-GAAP Operating Income by Segment

(unaudited)

(in thousands)


	Three Months Ended												Nine Months Ended
	March 31,												March 31,
							Increase/(Decrease)												Increase/(Decrease)
	2023			2022			$				%			2023			2022		$				%
Chamberlain:
Operating income (GAAP)	$	39,589		$	36,979		$	2,610			7.1	%	$	99,002		$	83,290		$	15,712			18.9	%
Restructuring expense		—			1,931			(1,931	)					818			2,266			(1,448	)
Adjusted operating income (non-GAAP)	$	39,589		$	38,910		$	679			1.7	%	$	99,820		$	85,556		$	14,264			16.7	%
Operating margin (GAAP)		26.4	%		25.9	%								23.2	%		20.0	%
Operating margin (non-GAAP)		26.4	%		27.3	%								23.4	%		20.5	%

Walden:
Operating income (loss) (GAAP)	$	10,343		$	(3,199	)	$	13,542		NM			$	26,071		$	(17,748	)	$	43,819		NM
Deferred revenue adjustment		—			—			—						—			8,561			(8,561	)
Restructuring expense		53			2,225			(2,172	)					3,174			4,016			(842	)
Intangible amortization expense		14,232			26,817			(12,585	)					48,936			73,967			(25,031	)
Adjusted operating income (non-GAAP)	$	24,628		$	25,843		$	(1,215	)		(4.7	)%	$	78,181		$	68,796		$	9,385			13.6	%
Operating margin (GAAP)		7.8	%		(2.3	)%								6.6	%		(5.1	)%
Operating margin (non-GAAP)		18.5	%		18.6	%								19.8	%		19.8	%

Medical and Veterinary:
Operating income (GAAP)	$	16,472		$	13,571		$	2,901			21.4	%	$	49,172		$	45,400		$	3,772			8.3	%
Restructuring expense		421			4,569			(4,148	)					7,334			4,757			2,577
Adjusted operating income (non-GAAP)	$	16,893		$	18,140		$	(1,247	)		(6.9	)%	$	56,506		$	50,157		$	6,349			12.7	%
Operating margin (GAAP)		19.0	%		16.4	%								18.6	%		17.8	%
Operating margin (non-GAAP)		19.5	%		21.9	%								21.4	%		19.6	%

Home Office and Other:
Operating loss (GAAP)	$	(6,975	)	$	(14,402	)	$	7,427			51.6	%	$	(45,632	)	$	(80,159	)	$	34,527			43.1	%
CEO transition costs		—			—			—						—			6,195			(6,195	)
Restructuring expense		804			1,793			(989	)					6,380			5,960			420
Business acquisition and integration expense		11,346			5,924			5,422						35,702			41,537			(5,835	)
Gain on sale of assets		(13,317	)		—			(13,317	)					(13,317	)		—			(13,317	)
Adjusted operating loss (non-GAAP)	$	(8,142	)	$	(6,685	)	$	(1,457	)		(21.8	)%	$	(16,867	)	$	(26,467	)	$	9,600			36.3	%

Adtalem Global Education:
Operating income (GAAP)	$	59,429		$	32,949		$	26,480			80.4	%	$	128,613		$	30,783		$	97,830			317.8	%
Deferred revenue adjustment		—			—			—						—			8,561			(8,561	)
CEO transition costs		—			—			—						—			6,195			(6,195	)
Restructuring expense		1,278			10,518			(9,240	)					17,706			16,999			707
Business acquisition and integration expense		11,346			5,924			5,422						35,702			41,537			(5,835	)
Intangible amortization expense		14,232			26,817			(12,585	)					48,936			73,967			(25,031	)
Gain on sale of assets		(13,317	)		—			(13,317	)					(13,317	)		—			(13,317	)
Adjusted operating income (non-GAAP)	$	72,968		$	76,208		$	(3,240	)		(4.3	)%	$	217,640		$	178,042		$	39,598			22.2	%
Operating margin (GAAP)		16.1	%		9.0	%								11.8	%		3.0	%
Operating margin (non-GAAP)		19.8	%		20.9	%								20.0	%		17.4	%

Adtalem Global Education Inc.

Non-GAAP Adjusted EBITDA by Segment

(unaudited)

(in thousands)


	Three Months Ended												Nine Months Ended
	March 31,												March 31,
							Increase/(Decrease)												Increase/(Decrease)
	2023			2022			$				%			2023			2022		$				%
Chamberlain:
Operating income (GAAP)	$	39,589		$	36,979		$	2,610			7.1	%	$	99,002		$	83,290		$	15,712			18.9	%
Restructuring expense		—			1,931			(1,931	)					818			2,266			(1,448	)
Depreciation		4,405			4,738			(333	)					12,985			14,048			(1,063	)
Stock-based compensation		923			1,869			(946	)					3,600			5,104			(1,504	)
Adjusted EBITDA (non-GAAP)	$	44,917		$	45,517		$	(600	)		(1.3	)%	$	116,405		$	104,708		$	11,697			11.2	%
Adjusted EBITDA margin (non-GAAP)		30.0	%		31.9	%								27.3	%		25.1	%

Walden:
Operating income (loss) (GAAP)	$	10,343		$	(3,199	)	$	13,542		NM			$	26,071		$	(17,748	)	$	43,819		NM
Deferred revenue adjustment		—			—			—						—			8,561			(8,561	)
Restructuring expense		53			2,225			(2,172	)					3,174			4,016			(842	)
Intangible amortization expense		14,232			26,817			(12,585	)					48,936			73,967			(25,031	)
Depreciation		2,439			2,573			(134	)					7,303			6,801			502
Stock-based compensation		754			841			(87	)					2,945			2,308			637
Adjusted EBITDA (non-GAAP)	$	27,821		$	29,257		$	(1,436	)		(4.9	)%	$	88,429		$	77,905		$	10,524			13.5	%
Adjusted EBITDA margin (non-GAAP)		20.9	%		21.0	%								22.3	%		22.4	%

Medical and Veterinary:
Operating income (GAAP)	$	16,472		$	13,571		$	2,901			21.4	%	$	49,172		$	45,400		$	3,772			8.3	%
Restructuring expense		421			4,569			(4,148	)					7,334			4,757			2,577
Depreciation		3,231			3,397			(166	)					9,367			10,497			(1,130	)
Stock-based compensation		587			1,075			(488	)					2,291			2,974			(683	)
Adjusted EBITDA (non-GAAP)	$	20,711		$	22,612		$	(1,901	)		(8.4	)%	$	68,164		$	63,628		$	4,536			7.1	%
Adjusted EBITDA margin (non-GAAP)		24.0	%		27.4	%								25.8	%		24.9	%

Home Office and Other:
Operating loss (GAAP)	$	(6,975	)	$	(14,402	)	$	7,427			51.6	%	$	(45,632	)	$	(80,159	)	$	34,527			43.1	%
CEO transition costs		—			—			—						—			6,195			(6,195	)
Restructuring expense		804			1,793			(989	)					6,380			5,960			420
Business acquisition and integration expense		11,346			5,924			5,422						35,702			41,537			(5,835	)
Gain on sale of assets		(13,317	)		—			(13,317	)					(13,317	)		—			(13,317	)
Depreciation		82			633			(551	)					1,963			2,125			(162	)
Stock-based compensation		531			888			(357	)					2,072			2,023			49
Adjusted EBITDA (non-GAAP)	$	(7,529	)	$	(5,164	)	$	(2,365	)		(45.8	)%	$	(12,832	)	$	(22,319	)	$	9,487			42.5	%

Adtalem Global Education:
Net income (GAAP)	$	45,869		$	347,740		$	(301,871	)		(86.8	)%	$	71,114		$	304,245		$	(233,131	)		(76.6	)%
Net loss (income) from discontinued operations		2,694			(343,340	)		346,034						7,088			(341,337	)		348,425
Interest expense		14,457			36,585			(22,128	)					47,806			109,907			(62,101	)
Other (income) expense, net		(3,980	)		327			(4,307	)					(3,301	)		(2,435	)		(866	)
Provision for (benefit from) income taxes		389			(8,363	)		8,752						5,906			(39,597	)		45,503
Operating income (GAAP)		59,429			32,949			26,480						128,613			30,783			97,830
Depreciation and amortization		24,389			38,158			(13,769	)					80,554			107,438			(26,884	)
Stock-based compensation		2,795			4,673			(1,878	)					10,908			12,409			(1,501	)
Deferred revenue adjustment		—			—			—						—			8,561			(8,561	)
CEO transition costs		—			—			—						—			6,195			(6,195	)
Restructuring expense		1,278			10,518			(9,240	)					17,706			16,999			707
Business acquisition and integration expense		11,346			5,924			5,422						35,702			41,537			(5,835	)
Gain on sale of assets		(13,317	)		—			(13,317	)					(13,317	)		—			(13,317	)
Adjusted EBITDA (non-GAAP)	$	85,920		$	92,222		$	(6,302	)		(6.8	)%	$	260,166		$	223,922		$	36,244			16.2	%
Adjusted EBITDA margin (non-GAAP)		23.3	%		25.3	%								24.0	%		21.9	%

Adtalem Global Education Inc.

Non-GAAP Earnings Disclosure

(unaudited)

(in thousands, except per share data)


	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2023			2022			2023			2022
Net income (GAAP)	$	45,869		$	347,740		$	71,114		$	304,245
Deferred revenue adjustment		—			—			—			8,561
CEO transition costs		—			—			—			6,195
Restructuring expense		1,278			10,518			17,706			16,999
Business acquisition and integration expense		11,346			5,924			35,702			41,537
Intangible amortization expense		14,232			26,817			48,936			73,967
Gain on sale of assets		(13,317	)		—			(13,317	)		—
Pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, and investment impairment		—			12,471			9,226			44,105
Net tax benefit related to a valuation allowance release		(6,184	)		—			(6,184	)		—
Income tax impact on non-GAAP adjustments (1)		(4,359	)		(18,769	)		(23,341	)		(60,871	)
Net loss (income) from discontinued operations		2,694			(343,340	)		7,088			(341,337	)
Adjusted net income (non-GAAP)	$	51,559		$	41,361		$	146,930		$	93,401


	Three Months Ended						Twelve Months Ended
	FY23 Q3			FY22 Q3			FY23 Q3			FY23 Q2			FY23 Q1			FY22 Q4			FY22 Q3
Net cash provided by operating activities-continuing operations (GAAP)	$	107,544		$	77,739		$	255,052		$	225,247		$	225,972		$	164,002		$	101,855
Capital expenditures		(9,309	)		(7,477	)		(27,861	)		(26,029	)		(29,914	)		(31,054	)		(33,539	)
Free cash flow (non-GAAP)	$	98,235		$	70,262		$	227,191		$	199,218		$	196,058		$	132,948		$	68,316


	Year Ended
	June 30, 2023
Expected earnings per share, diluted (GAAP)	$2.14 to 2.29
Expected effects on diluted earnings per share:
Restructuring expense		0.38
Integration costs		0.77
Estimated incremental integration costs		0.15
Estimated intangible amortization		1.33
Gain on sale of assets		(0.29	)
Write-off of debt discount and issuance costs, gain on extinguishment of debt, and investment impairment		0.20
Net tax benefit related to a valuation allowance release		(0.13	)
Estimated income tax impact on non-GAAP adjustments(1)		(0.65	)
Net loss from discontinued operations		0.15
Expected adjusted earnings per share, diluted (non-GAAP)(2)	$4.05 to 4.20
Diluted shares used in EPS calculation		46,089


	Twelve Months Ended
	March 31, 2023
Adtalem Global Education:
Net income (GAAP)		$	77,860
Net income from discontinued operations			1,479
Interest expense			67,247
Other income, net			(1,974	)
Provision for income taxes			29,964
Depreciation and amortization			114,964
Stock-based compensation			14,915
Restructuring expense			26,335
Business acquisition and integration expense			47,363
Gain on sale of assets			(13,317	)
Adjusted EBITDA (non-GAAP)		$	364,836

	March 31, 2023
Long-term debt		$	708,283
Less: Cash and cash equivalents			(315,373	)
Net debt (non-GAAP)		$	392,910

Net leverage (non-GAAP)			1.1	x

	Investor Contact Jay Spitzer and Chandrika Nigam Investor.Relations@Adtalem.com +1 312-906-6600


	Media Contact Jacquelyn Manetakis adtalemmedia@Adtalem.com +1 630-303-4438