Laureate Education (LAUR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $369 million, up 2% as reported and 9% on an organic constant currency basis, with Adjusted EBITDA of $91.4 million, both exceeding prior guidance.

• Net income for Q3 surged to $85.5 million, up 136% year-over-year, aided by a $37.9 million discrete tax benefit.

• Growth was driven by robust new enrollments in Peru (up 12% year-over-year) and solid performance in Mexico, despite FX headwinds and post-election economic softness.

• Full-year constant currency outlook for revenue and Adjusted EBITDA was raised, though currency headwinds from a weaker Mexican peso offset gains on an as-reported basis.

• Completed a $100 million stock repurchase program and authorized a new $100 million buyback, with nearly $3 billion returned to shareholders since 2019.

Financial highlights

• Q3 2024 revenue was $369 million, up 2% as reported and 9% organic constant currency; Adjusted EBITDA was $91.4 million, up 17% as reported and 22% organic constant currency.

• Q3 2024 operating income increased 23% to $72 million; net income margin for Q3 was 23.1%.

• Basic EPS for Q3 was $0.56, up from $0.23 in Q3 2023; year-to-date basic EPS was $1.31, up from $0.42.

• Year-to-date revenue reached $1.143 billion, up 6% year-over-year; Adjusted EBITDA was $309 million, up 8%.

• Cash and cash equivalents stood at $134.4 million, with net debt at $20.4 million as of September 30, 2024.

Outlook and guidance

• Full-year 2024 as-reported revenue expected at $1.551–$1.556 billion (5% growth), Adjusted EBITDA at $447–$451 million (7–8% growth), and total enrollments projected at approximately 470,000, up 5% from 2023.

• 2024 organic constant currency revenue growth expected at 7%, Adjusted EBITDA growth at 9–10%.

• Q4 2024 revenue guidance: $408–$413 million; Adjusted EBITDA: $138–$142 million.

• Adjusted EBITDA to Unlevered Free Cash Flow conversion targeted at ~40%, or ~50% excluding one-time legacy payments.

• Management expects sufficient cash flow and liquidity to meet operating and capital needs for at least the next 12 months.