Covista Inc. (CVSA)

CIK: 0000730464. SIC: 8200 Services-Educational Services. Latest 10-K as of: 2025-08-07.

SIC breadcrumb: Services > SIC Major Group 82 > SIC 8200 Services-Educational Services

SEC company page: https://www.sec.gov/edgar/browse/?CIK=730464. Latest filing source: 0001558370-25-010780.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000730464.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000730464.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001104659-26-057163.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto included in this report. It should also be read in conjunction with our consolidated financial statements and the related Management’s Discussion and Analysis of Financial Condition and Results of Operation as contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “2025 Form 10-K), the Cautionary Disclosure Regarding Forward-Looking Statements, the Risk Factors included in the 2025 Form 10-K, and the Financial Aid and Legislative and Regulatory Requirements disclosures set forth in this report. Covista reports on a fiscal year period ending on June 30. Therefore, this Quarterly Report for the quarterly period ended March 31, 2026 is for our third quarter of fiscal year 2026.

Throughout this MD&A, we sometimes use information derived from the Consolidated Financial Statements and the notes thereto but not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these items are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules. See the “Non-GAAP Financial Measures and Reconciliations” section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures.

Certain items presented in tables may not sum due to rounding. Percentages presented are calculated from the underlying numbers in thousands. Discussions throughout this MD&A are based on continuing operations unless otherwise noted.

Available Information

We use our website (www.covista.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, as one means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, you should monitor our website in addition to following press releases, SEC filings, and public conference calls and webcasts. You can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts. You may also access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as well as other reports relating to us that are filed with or furnished to the SEC, free of charge in the investor relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The content of the websites mentioned above is not incorporated into and should not be considered a part of this report.

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Segments

We present three reportable segments as follows:

Chamberlain – This segment includes the operations of Chamberlain, which offers degree and certificate programs in the nursing and health professions postsecondary education industry.

Walden – This segment includes the operations of Walden, which offers degree and certificate programs, including those in nursing, education, counseling, business, information technology, psychology, public health, social work and human services, public administration and public policy, and criminal justice.

Medical and Veterinary – This segment includes the operations of AUC, RUSM, and RUSVM, collectively referred to as the “medical and veterinary schools,” which offers degree and certificate programs in the medical and veterinary postsecondary education industry.

“Home Office” includes activities not allocated to a reportable segment. Financial and descriptive information about Covista’s reportable segments is presented in Note 18 “Segment Information” to the Consolidated Financial Statements.

Third Quarter Highlights

Financial and operational highlights for the third quarter of fiscal year 2026 include:

●

Covista revenue increased 4.5%, or $21.0 million, to $487.0 million in the third quarter of fiscal year 2026 compared to the prior year period driven by increased revenue across all of our segments. Walden revenue for the third quarter of fiscal year 2026 was impacted by a shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026.

●

Net income decreased 31.6%, or $19.2 million, to $41.6 million in the third quarter of fiscal year 2026 compared to the prior year period. While consolidated revenue increased in the third quarter of fiscal year 2026 compared to the prior year period, Walden revenue for the third quarter of fiscal year 2026 was impacted by a shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026. The net income decrease was also driven by a loss from discontinued operations and increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives, partially offset by a reduction in asset impairments.

●

Diluted earnings per share decreased 24.5%, or $0.39, to $1.20 in the third quarter of fiscal year 2026 compared to the prior year period driven by the decrease in net income, partially offset by lower diluted shares due to share repurchases.

●

Adjusted net income decreased 5.8%, or $4.2 million, to $69.0 million in the third quarter of fiscal year 2026 compared to the prior year period. While consolidated revenue increased in the third quarter of fiscal year 2026 compared to the prior year period, Walden revenue for the third quarter of fiscal year 2026 was impacted by a shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026. The adjusted net income decrease was also driven by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.

●

Adjusted earnings per share increased 3.1%, or $0.06, to $1.98 in the third quarter of fiscal year 2026 compared to the prior year period driven by lower diluted shares due to share repurchases, partially offset by the decrease in adjusted net income.

●

For the January 2026 and March 2026 sessions, total student enrollment at Chamberlain decreased 0.7% and increased 0.5%, respectively, compared to the same sessions last year.

●

As of March 31, 2026, total student enrollment at Walden increased 12.3% compared to March 31, 2025.

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●

For the January 2026 semester, total student enrollment at the medical and veterinary schools increased 4.1% compared to the same semester last year.

●

On March 2, 2026, we entered into Amendment No. 5 to Credit Agreement and Incremental Assumption Agreement (the “Term Loan B Amendment”) to incur new term loans under Term Loan B in an aggregate principal amount of $510.0 million with a maturity date of March 2, 2033. In addition, on March 2, 2026, we repaid the previously outstanding $103.3 million principal amount of Term Loan B and the remaining $405.0 million outstanding principal amount of the Senior Secured Notes due 2028. See Note 13 “Debt” to the Consolidated Financial Statements for additional information.

●

Covista repurchased a total of 637,538 shares of its common stock under its share repurchase programs at an average cost of $103.04 per share during the third quarter of fiscal year 2026. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors.

Results of Operations

Revenue

The following tables present revenue by segment detailing the changes from the prior year periods (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended March 31, 2026

​

​

Chamberlain

Walden (1)

Medical and

Veterinary

Consolidated (1)

Fiscal year 2025

​

$

192,592

​

$

178,418

​

$

95,045

​

$

466,055

​

Growth

​

​

4,371

​

​

8,157

​

​

8,447

​

​

20,975

​

Fiscal year 2026

​

$

196,963

​

$

186,575

​

$

103,492

​

$

487,030

​

% change from prior year

​

​

2.3

%

​

4.6

%

​

8.9

%

​

4.5

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Nine Months Ended March 31, 2026

​

​

Chamberlain

Walden

Medical and

Veterinary

Consolidated

Fiscal year 2025

​

$

541,508

​

$

511,237

​

$

278,439

​

$

1,331,184

​

Growth

​

​

18,488

​

​

82,860

​

​

20,171

​

​

121,519

​

Fiscal year 2026

​

$

559,996

​

$

594,097

​

$

298,610

​

$

1,452,703

​

% change from prior year

​

​

3.4

%

​

16.2

%

​

7.2

%

​

9.1

%

(1)

Walden revenue for the third quarter of fiscal year 2026 was impacted by a shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026. Including the $18.0 million revenue timing impact in the third quarter of fiscal year 2026, Walden segment revenue would have increased 14.7%, or $26.2 million, to $204.6 million and consolidated revenue would have increased 8.4%, or $39.0 million, to $505.0 million.

Chamberlain

Chamberlain Student Enrollment:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2026

​

​

​

Session

​

July 2025

​

Sept. 2025

​

Nov. 2025

​

Jan. 2026

​

Mar. 2026

​

​

​

Total students

​

37,697

​

39,846

​

39,278

​

40,145

​

40,767

​

​

​

% change from prior year

​

4.5

%

2.2

%

(1.0)

%

(0.7)

%

0.5

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2025

​

Session

​

July 2024

​

Sept. 2024

​

Nov. 2024

​

Jan. 2025

​

Mar. 2025

​

May 2025

Total students

​

36,061

​

38,987

​

39,691

​

40,445

​

40,564

​

38,891

​

% change from prior year

​

12.1

%

11.7

%

11.5

%

8.7

%

6.8

%

5.8

%

​

Chamberlain revenue increased 2.3%, or $4.4 million, to $197.0 million in the third quarter and increased 3.4%, or $18.5 million, to $560.0 million in the first nine months of fiscal year 2026 compared to the prior year periods. The increase in revenue in the third quarter of fiscal year 2026 was driven by higher tuition rates and increased enrollment in the March

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session as increases in pre-licensure nursing program enrollment more than offset declines in post-licensure nursing program enrollment. The increase in revenue in the first nine months of fiscal year 2026 was driven by higher tuition rates and enrollment. Enrollment increased in pre-licensure nursing programs in all fiscal year 2026 sessions; however, enrollment has declined in post-licensure nursing programs during fiscal year 2026. Chamberlain is achieving pre-licensure growth by optimizing investments in student enrollment and experience while leveraging scale through a national footprint with in-person and online curriculum delivery modalities. Management is focused on optimizing marketing and enrollment operations to address post-licensure enrollment.

Tuition Rates:

Tuition rates in the current fiscal year increased in January 2026 compared to the prior fiscal year for the Bachelor of Science in Nursing (“BSN”) onsite and online degree, Master of Science in Nursing (“MSN”), Master of Social Work (“MSW”) and Master of Public Health (“MPH”) online degree programs. The average increase across all of these programs was approximately 3.3% from the prior year.

Walden

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2025-08-07. Report date: 2025-06-30.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto included in this report. It should also be read in conjunction with the Cautionary Disclosure Regarding Forward-Looking Statements (see the Introduction section preceding Part I), the Risk Factors (see Item 1A. “Risk Factors”), and the Financial Aid and Legislative and Regulatory Requirements (see Item 1. “Business”) disclosures set forth in this report. Adtalem reports on a fiscal year period ending on June 30.

Throughout this MD&A, we sometimes use information derived from the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto but not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these items are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules. See the “Non-GAAP Financial Measures and Reconciliations”

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Table of Contents

section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures.

Certain items presented in tables may not sum due to rounding. Percentages presented are calculated from the underlying numbers in thousands. Discussions throughout this MD&A are based on continuing operations unless otherwise noted. The MD&A should be read in conjunction with the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto.

The following discussion is on the comparison between fiscal year 2025 and fiscal year 2024 results. For a discussion on the comparison between fiscal year 2024 and fiscal year 2023 results, see the MD&A included in Adtalem’s Annual Report on Form 10-K for the fiscal year ended June 30, 2024, as filed with the SEC.

Segments

We present three reportable segments as follows:

Chamberlain – This segment includes the operations of Chamberlain, which offers degree and certificate programs in the nursing and health professions postsecondary education industry.

Walden – This segment includes the operations of Walden, which offers degree and certificate programs, including those in nursing, education, counseling, business, information technology, psychology, public health, social work and human services, public administration and public policy, and criminal justice.

Medical and Veterinary – This segment includes the operations of AUC, RUSM, and RUSVM, collectively referred to as the “medical and veterinary schools,” which offers degree and certificate programs in the medical and veterinary postsecondary education industry.

“Home Office” includes activities not allocated to a reportable segment. Financial and descriptive information about Adtalem’s reportable segments is presented in Note 19 “Segment Information” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”

Fiscal Year 2025 Highlights

Financial and operational highlights for fiscal year 2025 include:

●

Adtalem revenue increased 12.9%, or $203.6 million, to $1,788.3 million in fiscal year 2025 compared to the prior year driven by increased revenue across all of our segments.

●

Net income increased 73.3%, or $100.3 million, to $237.1 million in fiscal year 2025 compared to the prior year. This increase was primarily driven by an increase in revenue along with decreases in interest expense, business integration expense, amortization of acquired intangible assets, and litigation reserves, partially offset by increases in asset impairments, strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, the provision for bad debts, stock-based compensation, and the provision for income taxes.

●

Diluted earnings per share increased 82.3%, or $2.79, to $6.18 in fiscal year 2025 compared to the prior year driven by the increase in net income and lower diluted shares due to share repurchases.

●

Adjusted net income increased 26.7%, or $53.8 million, to $255.6 million in fiscal year 2025 compared to the prior year. This increase was primarily driven by an increase in revenue and a decrease in interest expense, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, the provision for bad debts, stock-based compensation, and the provision for income taxes.

●

Diluted adjusted earnings per share increased 33.1%, or $1.66, to $6.67 in fiscal year 2025 compared to the prior year driven by the increase in adjusted net income and lower diluted shares due to share repurchases.

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Table of Contents

●

For fiscal year 2025, average total student enrollment at Chamberlain increased 9.3% compared to the prior year. For the May 2025 session, total student enrollment at Chamberlain increased 5.8% compared to the same session last year.

●

For fiscal year 2025, average total student enrollment at Walden increased 13.5% compared to the prior year. As of June 30, 2025, total student enrollment at Walden increased 15.0% compared to June 30, 2024.

●

For fiscal year 2025, average total student enrollment at the medical and veterinary schools increased 0.5% compared to the prior year. For the May 2025 semester, total student enrollment at the medical and veterinary schools increased 1.0% compared to the same semester last year.

●

On January 17, 2025, we made a prepayment of $100.0 million on our Term Loan B debt.

●

Adtalem repurchased a total of 2,317,937 shares of its common stock under its share repurchase programs at an average cost of $91.21 per share during fiscal year 2025. On May 5, 2025, Adtalem completed its fourteenth share repurchase program. On May 6, 2025, we announced that the Board of Directors authorized Adtalem’s fifteenth share repurchase program, which allows Adtalem to repurchase up to $150.0 million of its common stock through May 6, 2028. We did not repurchase any shares under the fifteenth share repurchase program as of June 30, 2025 and the timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors.

One Big Beautiful Bill Act

In July 2025, the U.S. Congress passed the One Big Beautiful Bill Act (“OBBBA”). The U.S. Department of Education (“ED”) has announced its intent to conduct negotiated rulemaking regarding the education-related provisions of OBBBA but has yet to issue necessary enabling regulations and guidance with respect to these provisions. Due to the complexity of OBBBA, including yet to be promulgated implementing regulations (including how to implement the “Do No Harm” provision discussed below) and lack of interpretive guidance, the impact of OBBBA on our institutions and our business is not yet fully known.

OBBBA makes several substantial changes to the availability of federal student aid, which many of our students rely on to fund their education, including:

●

increasing the annual unsubsidized loan limit for students in professional programs from $20,500 to $50,000. The annual limit for students in non-professional graduate programs remains at the current level of $20,500; 

●

eventually phasing out of the Grad PLUS loan program, which is available to and used by students at Adtalem’s institutions. Existing Grad PLUS borrowers as of June 30, 2026 are grandfathered for the remaining program length or three years, whichever is shorter;

●

establishing new aggregate federal loan caps for new students starting on or after July 1, 2026 as follows: a $100,000 cap for graduate students and a $200,000 cap for professional students, both excluding undergraduate borrowing, and a $257,500 lifetime borrowing limit on all Title IV student loans, excluding Parent Plus loans;

●

reducing the amount of a loan that a student may borrow for an academic year if the student is enrolled part-time, in proportion to the degree to which the student is not enrolled full-time; and

●

adding “Do No Harm” provisions applicable to all Title IV participating institutions providing that an undergraduate program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA are no greater than earnings of a population with a high school diploma, and a graduate program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA are no greater than the earnings of a population with a bachelor’s degree, in each case for two years in a three-year period.

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We are currently analyzing the changes made by OBBBA and what effect they may have on Adtalem and our programs. These changes could have a material adverse effect on our business, financial condition, cash flows, or results of operations.

Certain aspects of OBBBA may have a positive effect on our business. By applying the same rules to all Title IV participating institutions, OBBBA puts proprietary higher education on a level playing field with other segments of the higher education market regarding such rules.

The federal student aid limits described above apply to all institutions, encouraging other financing sources to enter the student market. We are in discussions with other financing sources who can provide loans to our students. We anticipate that potential relationships with one or more of these financing sources will result in loan programs for our students which will replace some or all the funding which will be limited by OBBBA.

Results of Operations

Revenue

The following table presents revenue by segment detailing the changes from the prior year (in thousands):

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​

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​

​

​

​

​

​

Year Ended June 30, 2025

​

​

Chamberlain

Walden

Medical and

Veterinary

Consolidated

Fiscal year 2024

​

$

633,522

​

$

595,332

​

$

355,798

​

$

1,584,652

​

Growth

​

​

92,252

​

​

98,098

​

​

13,288

​

​

203,638

​

Fiscal year 2025

​

$

725,774

​

$

693,430

​

$

369,086

​

$

1,788,290

​

% change from prior year

​

​

14.6

%

​

16.5

%

​

3.7

%

​

12.9

%

Chamberlain

Chamberlain Student Enrollment:

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​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2025

​

Session

​

July 2024

​

Sept. 2024

​

Nov. 2024

​

Jan. 2025

​

Mar. 2025

​

May 2025

​

Total students

​

36,061

​

38,987

​

39,691

​

40,445

​

40,564

​

38,891

​

% change from prior year

​

12.1

%

11.7

%

11.5

%

8.7

%

6.8

%

5.8

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2024

​

Session

​

July 2023

​

Sept. 2023

​

Nov. 2023

​

Jan. 2024

​

Mar. 2024

​

May 2024

Total students

​

32,175

​

34,889

​

35,592

​

37,196

​

37,985

​

36,750

​

% change from prior year

​

2.6

%

5.2

%

6.6

%

7.0

%

9.0

%

10.4

%

Chamberlain revenue increased 14.6%, or $92.3 million, to $725.8 million in fiscal year 2025 compared to the prior year, driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. Enrollment improvement has primarily been driven by the undergraduate Bachelor of Science in Nursing (“BSN”) and the Master of Science in Nursing (“MSN”) degree programs. Chamberlain is achieving growth by optimizing investments in student enrollment and experience while leveraging scale through a national footprint and providing a full breadth of nursing programs and modalities.

Tuition Rates:

Tuition rates in the current fiscal year increased compared to the prior fiscal year for the BSN onsite and online degree, MSN online degree, and Doctor of Nursing Practice (“DNP”) degree programs. The average increase across all these programs was approximately 4.3% from the prior year.

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Walden

Walden Student Enrollment:

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​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2025

​

​

​

September 30,

​

December 31,

​

March 31,

​

June 30,

​

Period

​

2024

​

2024

​

2025

​

2025

​

Total students

​

45,979

​

46,399

​

48,526

​

48,116

​

% change from prior year

​

12.2

%

13.2

%

13.5

%

15.0

%

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2024

​

​

​

September 30,

​

December 31,

​

March 31,

​

June 30,

​

Period

​

2023

​

2023

​

2024

​

2024

​

Total students

​

40,975

​

40,971

​

42,751

​

41,845

​

% change from prior year

​

0.5

%

7.9

%

8.4

%

11.3

%

Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 16.5%, or $98.1 million, to $693.4 million in fiscal year 2025 compared to the prior year driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. Walden’s improved enrollment has been accelerated by investments in student experience and brand along with providing flexibility to working adults through part-time and Tempo Learning® competency-based programs.

Tuition Rates:

Tuition rates for Walden programs, including general education are charged on a per credit hour basis that varies based on the nature of the program. For other programs such as those with a subscription-based learning modality, tuition is charged on a per term basis. Students are also charged program and clinical fees depending on the specific programs. Some programs require students to attend residencies, skills labs, and pre-practicum labs, for which tuition is charged per event. In most programs, these tuition rates, event charges, and fees increased by approximately 2.0% from the prior year.

Medical and Veterinary

Medical and Veterinary Student Enrollment:

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2025

​

Semester

​

Sept. 2024

​

Jan. 2025

​

May 2025

​

Total students

​

5,174

​

5,133

​

4,773

​

% change from prior year

​

(0.7)

%

1.2

%

1.0

%

​

​

​

​

​

​

​

​

​

​

Fiscal Year 2024

​

Semester

​

Sept. 2023

​

Jan. 2024

​

May 2024

Total students

​

5,209

​

5,073

​

4,726

​

% change from prior year

​

(7.5)

%

(4.5)

%

(2.9)

%

Medical and Veterinary revenue increased 3.7%, or $13.3 million, to $369.1 million in fiscal year 2025 compared to the prior year, driven by tuition rate increases at all three institutions in this segment. Management’s focus is on increasing enrollment and renewing operational effectiveness, specifically around academic support and the enrollment experience.

Tuition Rates:

●

Effective for semesters beginning in September 2024, tuition rates and administrative fees for the beginning basic sciences and clinical rotation portions of AUC’s medical program increased 4.0% and 4.25%, respectively, from the prior academic year.

●

Effective for semesters beginning in September 2024, tuition rates and administrative fees for the beginning basic sciences and clinical rotation portions of RUSM’s medical program increased 4.0% and 4.25%, respectively, from the prior academic year.

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Table of Contents

●

Effective for semesters beginning in September 2024, tuition rates for the pre-clinical and clinical curriculum of RUSVM’s veterinary program increased 2.0% from the prior academic year.

Cost of Educational Services

The cost of educational services expense category includes expenses related to the cost of faculty and staff who support educational operations, facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student education-related support activities, and the provision for bad debts. The following table presents cost of educational services by segment detailing the changes from the prior year (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended June 30, 2025

​

Chamberlain

Walden

Medical and

Veterinary

​

Consolidated

​

Fiscal year 2024

$

277,215

​

$

221,110

$

200,223

$

698,548

​

Cost increase

44,554

​

18,974

​

9,354

72,882

​

Fiscal year 2025

$

321,769

​

$

240,084

$

209,577

$

771,430

​

% change from prior year

​

16.1

%

8.6

%

​

4.7

%

​

10.4

%

Cost of educational services increased 10.4%, or $72.9 million, to $771.4 million in fiscal year 2025 compared to the prior year. This cost increase was primarily driven by an increase in labor and other costs to support increased enrollment and the provision for bad debts.

As a percentage of revenue, cost of educational services was 43.1% in fiscal year 2025 compared to 44.1% in the prior year. The decrease in the percentage was primarily the result of revenue growth accompanied with cost efficiencies.

Student Services and Administrative Expense

The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization of acquired intangible assets. The following table presents student services and administrative expense by segment detailing the changes from the prior year (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended June 30, 2025

​

Chamberlain

Walden

Medical and

Veterinary

Home Office

​

Consolidated

​

Fiscal year 2024

​

$

218,507

​

$

297,819

​

$

84,068

​

$

32,571

​

$

632,965

​

Cost increase

​

32,131

​

26,090

​

6,189

​

4,954

​

69,364

​

Amortization of acquired intangible assets decrease

​

​

—

​

​

(24,424)

​

​

—

​

​

—

​

​

(24,424)

​

Litigation reserve decrease

​

​

—

​

​

(24,050)

​

​

—

​

​

—

​

​

(24,050)

​

Asset impairments increase

​

​

—

​

​

—

​

​

—

​

​

6,442

​

​

6,442

​

Strategic advisory costs increase

​

​

—

​

​

—

​

​

—

​

​

12,000

​

​

12,000

​

Loss on assets held for sale decrease

​

​

—

​

​

—

​

​

—

​

​

(157)

​

​

(157)

​

Debt modification costs decrease

​

​

—

​

​

—

​

​

—

​

​

(136)

​

​

(136)

​

Fiscal year 2025

​

$

250,638

​

$

275,435

​

$

90,257

​

$

55,674

​

$

672,004

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fiscal year 2025 % change:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cost increase

​

​

14.7

%

8.8

%

​

7.4

%

NM

​

​

11.0

%

Amortization of acquired intangible assets decrease

​

—

​

(8.2)

%

—

​

NM

​

(3.9)

%

Litigation reserve decrease

​

—

​

(8.1)

%

—

​

NM

​

(3.8)

%

Asset impairments increase

​

​

—

​

—

​

—

​

NM

​

1.0

%

Strategic advisory costs increase

​

​

—

​

—

​

—

​

NM

​

1.9

%

Loss on assets held for sale decrease

​

—

​

—

​

—

​

NM

​

(0.0)

%

Debt modification costs decrease

​

—

​

—

​

—

​

NM

​

(0.0)

%

Fiscal year 2025 % change

​

14.7

%

(7.5)

%

7.4

%

NM

​

6.2

%

​

40

Table of Contents

Student services and administrative expense increased 6.2%, or $39.0 million, to $672.0 million in fiscal year 2025 compared to the prior year. After excluding amortization of acquired intangible assets, litigation reserves, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs, student services and administrative expense increased 11.0%, or $69.4 million, in fiscal year 2025 compared to the prior year. This cost increase was primarily driven by an increase in marketing expense, investments to support growth initiatives, and stock-based compensation.

As a percentage of revenue, student services and administrative expense was 37.6% in fiscal year 2025 compared to 39.9% in the prior year. The decrease in the percentage was primarily the result of revenue growth accompanied by decreases in amortization of acquired intangible assets and litigation reserves, partially offset by increases in asset impairments and strategic advisory costs.

Restructuring Expense

Restructuring expense was $3.3 million and $1.9 million in fiscal year 2025 and 2024, respectively. This increase was primarily driven by workforce reductions and costs to exit certain course offerings. We continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities.

Business Integration Expense

Business integration expense was $34.2 million in fiscal year 2024. We did not incur business integration expense in fiscal year 2025. In the prior year, we incurred certain costs relating to transformation initiatives to accelerate growth and organizational agility that were included in business integration expense in the Consolidated Statements of Income.

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Table of Contents

Operating Income

The following table presents a reconciliation of operating income to adjusted operating income by segment (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended June 30,

​

​

​

​

​

​

​

​

Increase/(Decrease)

​

​

​

2025

​

2024

​

$

​

%

​

Chamberlain:

​

​

​

​

​

​

​

​

​

​

​

​

Operating income

​

$

151,455

​

$

137,800

​

$

13,655

​

9.9

%

Restructuring expense

​

​

1,912

​

​

—

​

​

1,912

​

​

​

Adjusted operating income

​

$

153,367

​

$

137,800

​

$

15,567

​

11.3

%

Operating margin

​

​

20.9

%

​

21.8

%

​

​

​

​

​

Adjusted operating margin

​

​

21.1

%

​

21.8

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Walden:

​

​

​

​

​

​

​

​

​

​

​

​

Operating income

​

$

177,911

​

$

77,179

​

$

100,732

​

130.5

%

Restructuring expense

​

​

—

​

​

(776)

​

​

776

​

​

​

Amortization of acquired intangible assets

​

​

11,220

​

​

35,644

​

​

(24,424)

​

​

​

Litigation reserve

​

​

(5,550)

​

​

18,500

​

​

(24,050)

​

​

​

Adjusted operating income

​

$

183,581

​

$

130,547

​

$

53,034

​

40.6

%

Operating margin

​

​

25.7

%

​

13.0

%

​

​

​

​

​

Adjusted operating margin

​

​

26.5

%

​

21.9

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Medical and Veterinary:

​

​

​

​

​

​

​

​

​

​

​

​

Operating income

​

$

68,798

​

$

71,065

​

$

(2,267)

​

(3.2)

%

Restructuring expense

​

​

454

​

​

442

​

​

12

​

​

​

Adjusted operating income

​

$

69,252

​

$

71,507

​

$

(2,255)

​

(3.2)

%

Operating margin

​

​

18.6

%

​

20.0

%

​

​

​

​

​

Adjusted operating margin

​

​

18.8

%

​

20.1

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Home Office:

​

​

​

​

​

​

​

​

​

​

​

​

Operating loss

​

$

(56,622)

​

$

(68,990)

​

$

12,368

​

17.9

%

Restructuring expense

​

​

948

​

​

2,204

​

​

(1,256)

​

​

​

Business integration expense

​

​

—

​

​

34,215

​

​

(34,215)

​

​

​

Asset impairments

​

​

6,442

​

​

—

​

​

6,442

​

​

​

Strategic advisory costs

​

​

12,000

​

​

—

​

​

12,000

​

​

​

Loss on assets held for sale

​

​

490

​

​

647

​

​

(157)

​

​

​

Debt modification costs

​

​

712

​

​

848

​

​

(136)

​

​

​

Adjusted operating loss

​

$

(36,030)

​

$

(31,076)

​

$

(4,954)

​

(15.9)

%

​

​

​

​

​

​

​

​

​

​

​

​

​

Adtalem Global Education:

​

​

​

​

​

​

​

​

​

​

​

​

Operating income (GAAP)

​

$

341,542

​

$

217,054

​

$

124,488

​

57.4

%

Restructuring expense

​

​

3,314

​

​

1,870

​

​

1,444

​

​

​

Business integration expense

​

​

—

​

​

34,215

​

​

(34,215)

​

​

​

Amortization of acquired intangible assets

​

​

11,220

​

​

35,644

​

​

(24,424)

​

​

​

Litigation reserve

​

​

(5,550)

​

​

18,500

​

​

(24,050)

​

​

​

Asset impairments

​

​

6,442

​

​

—

​

​

6,442

​

​

​

Strategic advisory costs

​

​

12,000

​

​

—

​

​

12,000

​

​

​

Loss on assets held for sale

​

​

490

​

​

647

​

​

(157)

​

​

​

Debt modification costs

​

​

712

​

​

848

​

​

(136)

​

​

​

Adjusted operating income (non-GAAP)

​

$

370,170

​

$

308,778

​

$

61,392

​

19.9

%

Operating margin (GAAP)

​

​

19.1

%

​

13.7

%

​

​

​

​

​

Adjusted operating margin (non-GAAP)

​

​

20.7

%

​

19.5

%

​

​

​

​

​

Consolidated operating income increased 57.4%, or $124.5 million, to $341.5 million in fiscal year 2025 compared to the prior year. The operating income increase in fiscal year 2025 was primarily driven by an increase in revenue and decreases in business integration expense, amortization of acquired intangible assets, and litigation reserves, partially offset by increases in asset impairments, strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, the provision for bad debts, and stock-based compensation. The decrease in amortization of acquired intangible assets is driven by the decrease in amortization relating to the Walden student relationships intangible asset, which was fully amortized as of June 30, 2024. The decrease in litigation reserves

42

Table of Contents

was due to receiving $5.6 million in fiscal year 2025 from an indemnification claim under the Membership Interest Purchase Agreement with Laureate Education, Inc.

Consolidated adjusted operating income increased 19.9%, or $61.4 million, to $370.2 million in fiscal year 2025 compared to the prior year. The adjusted operating income increase in fiscal year 2025 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, investments to support growth initiatives, the provision for bad debts, and stock-based compensation.

Chamberlain

Segment adjusted operating income increased 11.3%, or $15.6 million, to $153.4 million in fiscal year 2025 compared to the prior year. The adjusted operating income increase in fiscal year 2025 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, stock-based compensation, marketing expense, investments to support growth initiatives, and the provision for bad debts.

Walden

Segment adjusted operating income increased 40.6%, or $53.0 million, to $183.6 million in fiscal year 2025 compared to the prior year. The adjusted operating income increase in fiscal year 2025 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, stock-based compensation, marketing expense, and investments to support growth initiatives.

Medical and Veterinary

Segment adjusted operating income decreased 3.2%, or $2.3 million, to $69.3 million in fiscal year 2025 compared to the prior year. The adjusted operating income decrease in fiscal year 2025 was primarily driven by increases in investments to support initiatives to drive future growth, investments in academic support, and stock-based compensation, partially offset by an increase in revenue.

Interest Expense

Interest expense was $52.3 million and $63.7 million in fiscal year 2025 and 2024, respectively. This decrease was primarily driven by lower interest expense on our Term Loan B due to decreased borrowings and a lower interest rate (as discussed in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”).

Other Income, Net

Other income, net was income of $9.3 million and income of $10.5 million in fiscal year 2025 and 2024, respectively. This decrease was primarily driven by decreases in interest income and investment income.

Provision for Income Taxes

Our effective income tax rate from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including tax on global intangible low-taxed income (“GILTI”), limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, changes in uncertain tax positions, and tax benefits on stock-based compensation awards.

Our effective tax rate from continuing operations was 22.1% and 16.0% in fiscal year 2025 and 2024, respectively. The effective tax rate for fiscal year 2025 increased compared to the prior year primarily due to an increase in the percentage of earnings from operations in higher taxed jurisdictions and a limitation of tax benefits on certain executive compensation. In addition, in fiscal year 2024, the effective tax rate included a benefit from the lapsing of statutes of limitations for unrecognized tax benefits.

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Table of Contents

In July 2025, the U.S. Congress enacted OBBBA, which introduces substantial changes to the federal tax landscape. Key provisions include the permanent renewal of certain measures initially set to expire under the Tax Cuts and Jobs Act, adjustments to the international tax regime, and the reinstatement of beneficial tax treatment for select business-related items. The legislation features staggered effective dates to be phased in through our fiscal year 2027. We are currently evaluating the tax impacts of the changes made by OBBBA which will begin to be reflected in our fiscal year 2026 consolidated financial statements.

Discontinued Operations

We had income from discontinued operations in fiscal year 2025 of $4.4 million and loss from discontinued operations in fiscal year 2024 of $0.9 million. We recorded income within discontinued operations related to the DeVry University earn-out of $7.0 million and $5.5 million in fiscal year 2025 and 2024, respectively. In addition, we continue to incur costs associated with ongoing litigation and settlements related to divestitures, which are classified as expenses within discontinued operations.

Liquidity and Capital Resources

Adtalem’s primary source of liquidity is the cash received from payments for student tuition, fees, books, and other educational materials. These payments include funds originating as financial aid from various federal and state loan and grant programs, student and family educational loans, employer educational reimbursements, scholarships, and student and family financial resources. Adtalem continues to provide financing options for its students, including Adtalem’s credit extension programs.

The pattern of cash receipts during the year is seasonal. Adtalem’s cash collections on accounts receivable peak at the start of each institution’s term. Accounts receivable reach their lowest level at the end of each institution’s term.

Adtalem’s consolidated cash and cash equivalents balance of $199.6 million and $219.3 million as of June 30, 2025 and 2024, respectively, included cash and cash equivalents held at Adtalem’s international operations of $22.9 million and $4.6 million as of June 30, 2025 and 2024, respectively, which is available to Adtalem for general corporate purposes.

Cash Flow Summary

Operating Activities

Net cash provided by operating activities from continuing operations in fiscal year 2025 increased $45.4 million to $333.7 million, compared to $288.4 million in the prior year. This increase was driven by a $124.5 million increase in operating income primarily due to increased revenue from students and a $11.2 million decrease in interest payments. The increase in cash provided by operating activities from continuing operations was partially offset by a $22.9 million increase in net legal settlement payments, a $20.3 million increase in management incentive bonus payments, and a $60.6 million increase in payments to vendors.

Investing Activities

Net cash used in investing activities in fiscal year 2025 and 2024 was $41.9 million and $47.9 million, respectively, and was primarily driven by capital expenditures of $50.3 million and $48.9 million, respectively, partially offset by proceeds of $7.3 million received in fiscal year 2025 from the sale of a building in Naperville, Illinois. The capital expenditures in fiscal year 2025 primarily consisted of spending for information technology investments and Chamberlain’s campus development.

Financing Activities

Net cash used in financing activities in fiscal year 2025 and 2024 was $316.0 million and $301.8 million, respectively, and was primarily driven by share repurchases of $213.1 million and $262.0 million, respectively, and net long-term debt repayments of $100.0 million and $50.0 million, respectively.

44

Table of Contents

On May 6, 2025, we announced that the Board of Directors (the “Board”) Adtalem’s fifteenth share repurchase program, which allows Adtalem to repurchase up to $150.0 million of its common stock through May 6, 2028. As of June 30, 2025, $150.0 million of authorized share repurchases remained under the fifteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 14 “Share Repurchases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our share repurchase programs.

Material Cash Requirements

Long-Term Debt – As of June 30, 2025, we have principal balances of $405.0 million of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028 and $153.3 million of Term Loan B under our Credit Facility, which matures on August 12, 2028 and requires interest payments. As a result of previous Term Loan B prepayments, we are no longer required to make quarterly principal installment payments on the Term Loan B. See Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Notes and our Credit Agreement.

As of June 30, 2025, Adtalem had $179.0 million of letters of credit outstanding in favor of ED. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information.

Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted $67.3 million of surety bonds as of June 30, 2025 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM.

In the event of unexpected market conditions or negative economic changes that could negatively affect Adtalem’s earnings and/or operating cash flow, Adtalem maintained a $400.0 million revolving credit facility with availability of $400.0 million as of June 30, 2025. On August 6, 2025, we entered into Amendment No. 4 to Credit Agreement and Incremental Assumption Agreement (the “Amendment”), which increased the revolving credit facility to $500.0 million. See Note 13 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Amendment.

Operating Lease Obligations – We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheets. In addition, we sublease certain space to third parties, which partially offsets the lease obligations at these facilities. See Note 11 “Leases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our lease agreements.

We believe our cash flows from operations, and our existing cash balances, combined with availability under our credit facility and access to the debt markets, will provide sufficient liquidity to fund our current obligations, projected working capital requirements, capital spending, and anticipated stock repurchases for a period that includes the next twelve months as well as the next several years. However, our ability to maintain sufficient liquidity may be affected by numerous factors, many of which are outside our control. Depending on our liquidity levels, conditions in the capital markets, and other factors, we may from time to time consider the issuance of debt, equity, or other securities, the proceeds of which could provide additional liquidity for our operations.

Critical Accounting Estimates

We describe our significant accounting policies in the Notes to Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting estimates discussed below are those that we believe involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Although management believes its assumptions and estimates are reasonable, actual results could differ from those estimates.

45

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Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts and financing receivable balances as of each balance sheet date. In evaluating the collectability of our accounts and financing receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future. The estimate of our credit losses involves a significant level of uncertainty as it requires significant judgment to estimate the amount we will collect in the future on our accounts and financing receivable balances. See Note 9 “Accounts and Financing Receivables” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our credit losses.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. Upon identifying such an event, if the carrying value of the long-lived asset is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Significant judgment is involved in determining whether a triggering event has occurred, and significant assumptions are used in the estimation of future cash flows and fair values of long-lived assets. Changes in our judgments and assumptions could result in impairments of long-lived assets in future periods.

Goodwill and Intangible Assets

Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31.

We have the option to assess goodwill for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that the reporting unit fair value is more likely than not less than its carrying value, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the reporting unit’s fair value. If the carrying value of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of goodwill. We also have the option to perform a qualitative assessment to test indefinite-lived intangible assets for impairment by determining whether it is more likely than not that the indefinite-lived intangible assets are impaired. If it is determined that the indefinite-lived intangible asset is more likely than not impaired, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the indefinite-lived intangible assets. If the carrying value of the indefinite-lived intangible assets exceeds their fair value, an impairment loss is recognized to the extent the carrying value exceeds fair value.

For intangible assets with finite lives, we evaluate for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Intangible assets with finite lives are amortized over their expected economic lives, which is five years.

All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives.

As part of our annual impairment review of goodwill and indefinite-lived intangible assets, we elected to perform a quantitative assessment of the RUSM reporting unit’s fair value and indefinite-lived intangible assets. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Significant assumptions used in the determination of reporting unit fair value measurements generally include forecasted cash flows, discount rates, terminal growth rates, and earnings multiples. The discounted cash flow method used to determine the fair value of our RUSM reporting unit during fiscal year 2025 reflected our most recent cash flow projections, a discount rate of 13.8%, and a terminal growth rate of 3.0%. The significant assumptions used in the market comparable method include

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Table of Contents

earnings multiples for comparable companies. Each of these inputs can significantly affect the fair values of our reporting units. Based on this quantitative assessment, it was determined that the fair value of the RUSM reporting unit exceeded its carrying value by approximately 165% and therefore no goodwill impairment was identified.

Significant judgments and assumptions were used in determining the fair value of the RUSM reporting unit’s indefinite-lived intangible assets. The relief-from-royalty method of the income approach and the with-and-without method of the income approach used in the determination of the fair values of our RUSM trade name and RUSM Title IV eligibility and accreditation indefinite-lived intangible assets, respectively, during fiscal year 2025 reflected our most recent revenue projections, a discount rate of 13.8%, a royalty rate of 5.5%, and a terminal growth rate of 3.0%. Each of these factors and assumptions can significantly affect the value of the intangible asset. Based on these quantitative assessments, it was determined that the fair values of these indefinite-lived intangible assets in the RUSM reporting unit exceeded their carrying values by over 2,000% and therefore no impairment was identified.

Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates. If economic conditions deteriorate, or operating performance of our reporting units do not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods. See Note 12 “Goodwill and Intangible Assets” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our goodwill and intangible assets impairment analysis.

Income Taxes

Adtalem accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Adtalem also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. Adtalem’s deferred tax assets are reduced by a valuation allowance, when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. To assess whether it is more likely than not that deferred tax assets will be realized and whether a valuation allowance needs to be recorded against them, we consider future reversals of existing taxable temporary differences, expected future earnings, prior earnings history, and tax planning strategies. Such assessments involve significant judgments and are subject to change in the future particularly if earnings are significantly different from expectations.

Adtalem is subject to audit by federal, state, and foreign tax authorities and Adtalem reduces its net tax assets for the estimated additional tax and interest that may result from those tax authorities disputing uncertain tax positions Adtalem has taken. Evaluating the exposure associated with uncertain tax positions involves significant judgment and we record reserves based on our past experience with similar situations and on the technical support for the positions. Our effective tax rate for a given period could be impacted by changes in the measurement of uncertain tax positions.

Contingencies

Adtalem is subject to contingencies, such as various claims and legal actions that arise in the normal conduct of its business. We record an accrual for those matters where management believes a loss is probable and can be reasonably estimated. For those matters for which we have not recorded an accrual, their possible impact on Adtalem’s business, financial condition, or results of operations, cannot be predicted at this time. A significant amount of judgment and the use of estimates are required to quantify our ultimate exposure in these matters. The valuation of liabilities for these contingencies is reviewed on a quarterly basis and any necessary adjustments to the accrual on the Consolidated Balance Sheets are recorded. While we believe that the amount accrued to-date is adequate, future changes in circumstances could impact these determinations. See Note 18 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our loss contingencies.

Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, see Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”

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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 this Annual Report on Form 10-K:

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, strategic advisory costs, tax benefit due to change in unrecognized tax benefits, and (income) loss from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, debt modification costs, strategic advisory costs, tax benefit due to change in unrecognized tax benefits, and (income) loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business integration expense, amortization of acquired intangible assets, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs.

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for (income) loss from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business integration expense, litigation reserve, asset impairments, strategic advisory costs, loss on assets held for sale, and debt modification costs. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with adjusted operating income.

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

●

Restructuring expense primarily related to workforce reductions, costs to exit certain course offerings, and prior real estate consolidations at Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.

●

Business integration expense includes 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 integration expense.

●

Amortization of acquired intangible assets.

●

Amortization of cloud computing implementation assets.

●

Write-off of debt discount and issuance costs related to prepayments of debt, reserves related to significant litigation, asset impairments related to adjusting certain operating lease assets and property and equipment as a result of adjusting carrying values to fair values, loss on assets held for sale related to adjusting those assets to estimated fair value less costs to sell, and debt modification costs related to refinancing our Term Loan B loan.

●

Strategic advisory costs related to expanding capabilities and bringing new capacities to market to further enhance our strategic position. We do not include normal, recurring, cash operating expenses in our strategic advisory costs.

●

Tax benefit due to change in unrecognized tax benefits.

●

(Income) loss from discontinued operations includes expense from ongoing litigation costs and settlements related to divestitures and the earn-outs we received.

The following tables provide a reconciliation from the most directly comparable GAAP measure to these non-GAAP financial measures. The operating income reconciliation is included in the results of operations section within this MD&A.

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Table of Contents

Net income reconciliation to adjusted net income (in thousands):

​

​

​

​

​

​

​

​

​

Year Ended June 30,

​

​

2025

​

2024

Net income (GAAP)

​

$

237,065

​

$

136,777

Restructuring expense

​

​

3,314

​

​

1,870

Business integration expense

​

​

—

​

​

34,215

Amortization of acquired intangible assets

​

​

11,220

​

​

35,644

Write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, and debt modification costs

​

​

3,832

​

​

21,108

Strategic advisory costs

​

​

12,000

​

​

—

Tax benefit due to change in unrecognized tax benefits

​

​

—

​

​

(5,657)

Income tax impact on non-GAAP adjustments (1)

​

​

(7,423)

​

​

(23,104)

(Income) loss from discontinued operations

​

​

(4,388)

​

​

936

Adjusted net income (non-GAAP)

​

$

255,620

​

$

201,789

(1)

Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

Diluted earnings per share reconciliation to adjusted earnings per share (shares in thousands):

​

​

​

​

​

​

​

​

​

Year Ended June 30,

​

​

2025

​

2024

Diluted earnings per share (GAAP)

​

$

6.18

​

$

3.39

Effect on diluted earnings per share:

​

​

​

​

​

​

Restructuring expense

​

​

0.09

​

​

0.05

Business integration expense

​

​

-

​

​

0.85

Amortization of acquired intangible assets

​

​

0.29

​

​

0.88

Write-off of debt discount and issuance costs, litigation reserve, asset impairments, loss on assets held for sale, and debt modification costs

​

​

0.10

​

​

0.52

Strategic advisory costs

​

​

0.31

​

​

-

Tax benefit due to change in unrecognized tax benefits

​

​

-

​

​

(0.14)

Income tax impact on non-GAAP adjustments (1)

​

​

(0.19)

​

​

(0.57)

(Income) loss from discontinued operations

​

​

(0.11)

​

​

0.02

Adjusted earnings per share (non-GAAP)

​

$

6.67

​

$

5.01

Diluted shares used in non-GAAP EPS calculation

​

​

38,334

​

​

40,307

(1)

Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

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Table of Contents

Reconciliation to adjusted EBITDA (in thousands):

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Year Ended June 30,

​

​

​

​

​

​

​

​

Increase/(Decrease)

​

​

​

2025

​

2024

​

$

​

%

​

Chamberlain:

​

​

​

​

​

​

​

​

​

​

​

​

Adjusted operating income (GAAP)

​

$

153,367

​

$

137,800

​

$

15,567

​

11.3

%

Depreciation

​

​

21,687

​

​

18,752

​

​

2,935

​

​

​

Amortization of cloud computing implementation assets

​

​

3,033

​

​

1,332

​

​

1,701

​

​

​

Stock-based compensation

​

​

13,309

​

​

8,303

​

​

5,006

​

​

​

Adjusted EBITDA (non-GAAP)

​

$

191,396

​

$

166,187

​

$

25,209

​

15.2

%

Adjusted EBITDA margin (non-GAAP)

​

​

26.4

%

​

26.2

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Walden:

​

​

​

​

​

​

​

​

​

​

​

​

Adjusted operating income (GAAP)

​

$

183,581

​

$

130,547

​

$

53,034

​

40.6

%

Depreciation

​

​

7,421

​

​

7,389

​

​

32

​

​

​

Amortization of cloud computing implementation assets

​

​

3,002

​

​

1,331

​

​

1,671

​

​

​

Stock-based compensation

​

​

12,477

​

​

7,525

​

​

4,952

​

​

​

Adjusted EBITDA (non-GAAP)

​

$

206,481

​

$

146,792

​

$

59,689

​

40.7

%

Adjusted EBITDA margin (non-GAAP)

​

​

29.8

%

​

24.7

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Medical and Veterinary:

​

​

​

​

​

​

​

​

​

​

​

​

Adjusted operating income (GAAP)

​

$

69,252

​

$

71,507

​

$

(2,255)

​

(3.2)

%

Depreciation

​

​

10,853

​

​

11,983

​

​

(1,130)

​

​

​

Amortization of cloud computing implementation assets

​

​

1,208

​

​

469

​

​

739

​

​

​

Stock-based compensation

​

​

7,486

​

​

4,930

​

​

2,556

​

​

​

Adjusted EBITDA (non-GAAP)

​

$

88,799

​

$

88,889

​

$

(90)

​

(0.1)

%

Adjusted EBITDA margin (non-GAAP)

​

​

24.1

%

​

25.0

%

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Home Office:

​

​

​

​

​

​

​

​

​

​

​

​

Adjusted operating loss

​

$

(36,030)

​

$

(31,076)

​

$

(4,954)

​

(15.9)

%

Depreciation

​

​

741

​

​

1,552

​

​

(811)

​

​

​

Stock-based compensation

​

​

8,318

​

​

5,189

​

​

3,129

​

​

​

Adjusted EBITDA

​

$

(26,971)

​

$

(24,335)

​

$

(2,636)

​

(10.8)

%

​

​

​

​

​

​

​

​

​

​

​

​

​

Adtalem Global Education:

​

​

​

​

​

​

​

​

​

​

​

​

Net income (GAAP)

​

$

237,065

​

$

136,777

​

$

100,288

​

73.3

%

(Income) loss from discontinued operations

​

​

(4,388)

​

​

936

​

​

(5,324)

​

​

​

Interest expense

​

​

52,318

​

​

63,659

​

​

(11,341)

​

​

​

Other income, net

​

​

(9,290)

​

​

(10,542)

​

​

1,252

​

​

​

Provision for income taxes

​

​

65,837

​

​

26,224

​

​

39,613

​

​

​

Depreciation and amortization

​

​

59,165

​

​

78,452

​

​

(19,287)

​

​

​

Stock-based compensation

​

​

41,590

​

​

25,947

​

​

15,643

​

​

​

Restructuring expense

​

​

3,314

​

​

1,870

​

​

1,444

​

​

​

Business integration expense

​

​

—

​

​

34,215

​

​

(34,215)

​

​

​

Litigation reserve

​

​

(5,550)

​

​

18,500

​

​

(24,050)

​

​

​

Asset impairments

​

​

6,442

​

​

—

​

​

6,442

​

​

​

Strategic advisory costs

​

​

12,000

​

​

—

​

​

12,000

​

​

​

Loss on assets held for sale

​

​

490

​

​

647

​

​

(157)

​

​

​

Debt modification costs

​

​

712

​

​

848

​

​

(136)

​

​

​

Adjusted EBITDA (non-GAAP)

​

$

459,705

​

$

377,533

​

$

82,172

​

21.8

%

Adjusted EBITDA margin (non-GAAP)

​

​

25.7

%

​

23.8

%

​

​

​

​

​

​

​

​