管理層發言
Good day, and thank you for standing by. Welcome to Laureate Education's Second Quarter 2026 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead.
Good morning, and thank you for joining us on today's call to discuss Laureate Education's Second Quarter 2026 results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast and a complete recording will be available after the call. I would like to remind you that some of the information we are providing today, including, but not limited to, our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected.
Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, our 10-Q filed earlier this morning as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-GAAP measures that we discuss, including and among others, adjusted EBITDA and its related margin, adjusted net income and adjusted earnings per share, total debt net of cash and cash equivalents and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation. Let me now turn the call over to Eilif.
Thank you, Adam, and good morning, everyone. I am pleased to report strong execution across the board for the second quarter and first half of 2026. Through year-to-date June, new and total enrollments were up 10% and 6%, respectively, versus the comparable period in prior year, driving 7% growth in revenue on a timing adjusted and constant currency basis. In addition to favorable operating results, we have also benefited from improved currency over the past few months. As a result, we are raising our full year 2026 outlook at the midpoint by $28 million for revenue, $8 million for adjusted EBITDA and $0.03 per share for adjusted earnings per share. The operating momentum of our business as well as a strong balance sheet and free cash flow generation continue to support our commitment to return excess capital to shareholders. Through the first half of the year, we repurchased $181 million worth of our shares.
And today, we are announcing an additional $150 million increase to our stock repurchase program. Throughout the first half of the year, we continue to advance on key priorities, which include the opening of new campuses and investment in digital leadership. The two new campuses we opened last year in Monterrey, Mexico and Lima, Peru, Ate District continue to perform in line with our expectations. Our new campus opening for this year in Puebla, Mexico is off to a strong start with enrollments already well underway for our primary intake in September. Looking beyond these projects, we have a clear multiyear road map of attractive new campus expansion opportunities across both Mexico and Peru and have already secured multiple sites to support that growth pipeline in the years to come. We do expect two new campus projects to be operational next year, one in Southern Lima, which is on track to open during the first quarter of 2027 and one in Merida, Mexico, which we anticipate being open in time for our primary intake in September of 2027.
Further momentum for new campus openings are planned for 2028 and beyond. On the digital front, AI is becoming a core capability across our organization and an increasingly important driver of our long-term strategy. We are modernizing not only how and what we teach but also how we operate, translating technology-enabled efficiencies into greater affordability, broader access to high-quality education and further progress towards Laureate's mission. By enabling AI throughout the student journey, we aim to deliver more personalized learning experiences, strengthen student support and improve academic outcomes. At the same time, we are equipping our faculty and staff with AI-enabled tools that allow them to focus on activities that create the greatest value for our students. To support this transformation, we are investing in our data and IT infrastructure and collaborating with leading technology companies.
By leveraging their expertise and capabilities, we are orchestrating and building an integrated ecosystem of AI-powered learning, cloud and education solutions for our more than 500,000 students, faculty and staff across Mexico and Peru. From a geopolitical and macroeconomic perspective, the backdrop in Mexico and Peru remains stable, and we are confident in the long-term fundamentals of both markets. In Mexico, the existing USMCA trade agreement remains in place through 2036 and continues to provide Mexico with reliable and preferential access to the U.S. and Canadian markets, supporting investments in economic cross-border opportunities across North America. Although the USMCA agreement wasn't extended during the first mandatory joint review in July of this year, the absence of consensus simply activates the annual review mechanism beginning in 2027. Mexico continues to play a central role in the regional economy as the United States' largest trading partner.
And the record export level from Mexico into the United States during May shows that trade and supply chain integration between the two countries remain very strong. Future bilateral discussion will focus on improving market access, strengthening regional production and addressing select tariffs. In Peru, the political outlook has become more stable following the recent national elections. President Keiko Fujimori is expected to pursue a more market-oriented agenda, which could strengthen business confidence, encourage private investment and support further economic growth, reinforcing Peru's long-standing position as one of Latin America's more established and resilient market economies. That concludes my prepared remarks, and I will now turn the call over to Rick Buskirk for a more detailed financial overview of our second quarter and year-to-date performance as well as further details on our 2026 full year outlook. Rick?
Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. Campus-based higher education is a seasonal business. While the second and fourth quarters are not major enrollment intake periods, they are the strongest in terms of revenue and adjusted EBITDA as students are in session and academic activity is at its peak. The timing of the start of our classes can shift year-over-year depending on various factors such as when public universities begin classes or when holidays occur. This, in turn, affects the timing of enrollments and revenue recognition and quarter-over-quarter comparability. In terms of seasonality for 2026, we will have some intra-year calendar timing impacts as outlined on Slide 22 in our presentation. As I review our operating results, I will provide some additional color on these timing-related impacts.
Let's start with Page 10 and 11, which highlight our operating and financial performance for the second quarter and year-to-date June. Total enrollments increased by 6% when compared to the prior year quarter, driven by year-to-date new enrollment growth of 10%. Revenue in the seasonally strong second quarter was $616 million and adjusted EBITDA was $251 million. Both metrics were ahead of the guidance provided three months ago, driven by favorable currency translation and operational outperformance. On a constant currency basis, both revenue and adjusted EBITDA for the second quarter increased by 8% year-over-year. Second quarter net income was $137 million, resulting in earnings per share of $0.98 per share on a reported basis. Second quarter adjusted net income was $140 million and adjusted earnings per share was $1 per share. When combined with the first quarter on a constant currency basis and adjusted for academic calendar timing, our overall performance for the first half of 2026 was strong and resulted in revenue and adjusted EBITDA growth of 7% versus the prior year period.
Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 13. Please note that all comparisons versus prior year are on a constant currency basis. Let's start with Mexico. Mexico's new enrollments increased by 7% on a year-to-date basis versus the prior year period, led by strong growth in working adult-focused fully online programs. Total enrollments increased 5%. Mexico's revenue for the second quarter increased by 10% compared to the prior year period, and adjusted EBITDA was up 9%, which included costs associated with launching our new campus in Puebla. On a year-to-date basis and adjusted for timing of the academic calendar, Mexico's revenue grew 6%, resulting from a 5% increase in average total enrollments and 1% price mix. Overall pricing was in line to slightly above inflation for our traditional face-to-face students, partially offset from a mix perspective by higher growth in working adult fully online programs.
We were a little less aggressive with our pricing for our fully online programs, but still had an increase year-over-year as we continue to focus on driving strong volume growth in those programs. On a year-to-date basis and adjusted for timing of the academic calendar, adjusted EBITDA decreased by 2% versus the prior year period, reflecting the timing of investments and the ramp-up of our new Puebla campus. As discussed on our prior call, we expect margin accretion this year to be weighted towards the second half of 2026 in that market. Let's now transition to Peru on Slide 14. Peru's primary enrollment cycle concluded in mid-April with total enrollment growth of 8% year-to-date, supported by strong demand from our fully online programs serving working adults. In the second quarter, Peru's revenue increased 6% and adjusted EBITDA was up 7% versus prior year. On a year-to-date basis and adjusted for timing of the academic calendar, Peru's revenue increased 7% versus the prior year period and adjusted EBITDA increased by 13%.
You will note that through year-to-date June, our growth in total enrollments and revenue are at similar rates due to the rapid scaling of fully online offerings. As discussed on our prior calls, our series of planned new campus launches for face-to-face students will start to ramp in 2027. Pricing during the primary intake was largely in line with inflation for our traditional face-to-face programs, but that was offset by the price/mix impact from fully online. Let me now briefly discuss our balance sheet position. Our balance sheet remains strong. Laureate ended June with $223 million in gross debt and $162 million in cash for a net debt position of $61 million. Through June of this year, we repurchased $181 million of common stock under our previously announced share repurchase program. Today, we announced that our Board has authorized a $150 million increase to our share repurchase program.
This authorization is supported by our strong balance sheet, cash accretive business model and disciplined capital allocation. Moving on to our outlook for 2026, starting on Page 17. Today, we are increasing our full year guidance at the midpoint by $28 million for revenue, $8 million for adjusted EBITDA and $0.03 per share for adjusted earnings per share. Our updated 2026 outlook reflects an improved operational outlook as well as more favorable foreign currency exchange rates. Based on our assumed FX rates, we now expect our full year 2026 results to be as follows: total enrollments to be in the range of 518,000 to 523,000 students, reflecting growth of 4% to 5% versus 2025. Revenues to be in the range of $1.920 billion to $1.930 billion, reflecting growth of 13% on an as-reported basis and growth of 6% to 7% on a constant currency basis versus 2025. Adjusted EBITDA to be in the range of $593 million to $599 million, reflecting growth of 14% to 15% on an as-reported basis and 8% to 9% on a constant currency basis versus 2025.
This would result in an increase in adjusted EBITDA margins of approximately 50 basis points at the midpoint of guidance on a reported basis. The margin expansion expected for the second half of the year will be driven by timing of investments and the opening and scaling of new campuses. For 2026, we still expect adjusted EBITDA to unlevered free cash flow conversion of approximately 50% on a reported basis, supporting our continued emphasis on return of capital to shareholders. Lastly, adjusted earnings per share guidance for 2026 is now expected to be in the range of $2.04 to $2.10 per share, reflecting growth of 19% to 22% versus 2025 on a reported basis. This outlook assumes a weighted average share count of approximately 139 million shares, only reflecting the impact of share repurchases through June. Now moving to the third quarter guidance, which includes an expected $29 million of favorable intra-year academic calendar timing impact as illustrated on Page 22 of our presentation.
For the third quarter of 2026, we expect revenue to be in the range of $471 million to $476 million and adjusted EBITDA of approximately $134 million to $137 million. Eilif, I'm now handing it back to you for your closing comments.
Thank you, Rick. As we enter the second half of 2026 and prepare for our next major intake cycle, I remain confident in the momentum that we have built and our ability to continue to execute on our growth agenda. We are investing where we see the greatest opportunities to create long-term value, including expanding our academic portfolio, building strategic AI partnerships, scaling our digital offerings and selectively growing our campus network in attractive high-growth markets. At the same time, our disciplined operating model continues to drive margin expansion, strong cash flow generation and the financial flexibility to invest in future growth while returning excess capital to shareholders. Operator, that concludes our prepared remarks, and we're now happy to take any questions from the participants.
分析師問答
Our first question comes from the line of Jeff Sibler of BMO Markets.
My first question is regarding Mexico. You've got a primary intake period coming up in a few months, probably enrolling students already. Can you give us any color in terms of how that's going?
Jeff, this is Eilif. I'll just do a quick reminder. We did our March intake, which is a secondary intake in Mexico, which was consistent with last year's trend at about 4%. That intake was about 25% of the intake for the year. We did expect some improvement, and we saw that in the June intake. That's largely a working adult intake, represents about 15% of the annual intake, and we were growing 12% in that intake, which was consistent with our expectations of an improving operating environment in Mexico. When it comes to the main intake in Mexico, which I think your question was about, that's about 60% of the annual intake. That's happening in September. We are about halfway through that. We have about 50% completion of that intake. And it is tracking along with my expectations, and that's as much as I'm going to comment on that intake.
Okay. I appreciate that. And then maybe a big picture question. A number of the U.S. schools have been talking about changes in the way that students are looking for schools, switching away from traditional search engines going towards AI. I'm wondering if you're seeing that in Mexico and Peru? And if so, if there's any change in your marketing strategy there?
Yes. I would say that we were at the cutting edge of driving that change in the market. We have partnered with Google over the years and several other key strategic digital and AI partners. We've been recognized now for two years in a row by BCG and Google as being in the top decile when it comes to AI and digital marketing capabilities in the way that we are embracing AI in our recruiting and onboarding effort. It has given us a very strong competitive advantage, where we have seen explosive growth in our lead generation capability and significant improvement in conversion, which has taken down our cost of acquisition and also enabled us to consistently take market share in Mexico. So very pleased with those capabilities. In Peru, we are deploying that same center of expertise that was developed in Mexico to roll out those capabilities there as well.
Our next question comes from Marcelo Santos of JPMorgan.
I have two. The first is a bit more long-term strategic. You have a lot of plans to open campuses. You're deploying distance learning. So how do you see the sustainability of growth in the coming years given these initiatives? Could you give us some broad views on how do you expect to grow? I'm not asking for a specific guidance, but I'm just asking for a broad outlook. And the second question is, I think you had higher — better retention rates in Mexico in the second quarter. What were the actions that led to this improvement in retention rates?
Great, Marcelo. I'll start kicking off on the growth algorithm. We have a really deep and robust pipeline of growth opportunities in our core markets in Mexico and Peru. There are three drivers of our growth in both markets. One is the rising participation rates. There's a lot of headroom there in Mexico. The participation rates are about 36% versus Peru high 40s and the United States mid-60s. So it shows you the significant opportunity for that participation rate to increase, which over the last 10 years has consistently given us very predictable and consistent growth, and I expect that to continue. The second big growth driver is the fully online working adult product, where we are marketing fully online to students aged 25 to 50. Those are largely degree completion, but also increasingly postgraduate degrees. We're really following the U.S. model there of high-quality personalized fully online experience, but targeting only that working adult consumer where online is a very good product.
In Mexico, we have about 90,000 fully online working adult students and growing in high single digits. In Peru, we have about 20,000 to 25,000 students, and it is growing at a much higher rate from a smaller base and is an important long-term growth driver for both countries. I can see over five-plus years the penetration of fully online in Peru catching up with Mexico. Very excited about the depth of that growth lever. Third, new campuses. In Peru, we are largely a Lima operator. There are interesting secondary cities and also still several ZIP codes in Lima where we don't have our full portfolio of products. So there is more growth with campuses in Lima and in large secondary cities like Guadalajara in Mexico, which is a much larger country. Mexico has 135 million people. In Peru, you have 35 million people. There are 20 cities in Mexico with multimillion population centers, over one million population centers, which are ideal for our product portfolio.
So we have a very robust pipeline of campus expansion opportunities. Last year, we opened UNITEC in Monterrey. This year, we opened UNITEC in Puebla. We have announced Merida as our new campus expansion opportunity for UNITEC. We are seeing double-digit campus expansion opportunities in Mexico alone to get the coverage that makes sense given our very strong brand portfolio in Mexico. So those are the three core growth drivers: participation rate, online penetration and new campuses in new ZIP codes and new cities. Those are the core growth drivers to support our guidance. Rick, why don't you add anything on the growth algorithm?
No, I think that was well said. Go ahead on the retention question.
Very good. Do you want to take the retention question on?
Sure. On retention, you're exactly right. We are seeing some improved retention rates in Mexico. We're very pleased with that. We spent several years focused on dissecting the entire enrollment-to-graduation process that our students go through, particularly on our growing online segment, and have started deconstructing that digital journey that they follow and really putting in different elements to reduce friction and support their learning, including experimenting with an AI tutor. As a result of that, we are seeing improved attrition, and we expect attrition improvement despite online growing faster relative to face-to-face, which generally has a higher attrition rate. As a total consolidated in Mexico, we expect attrition improvement on a full year basis. We're very pleased with the results, and it's been an effort that we've been very focused on, and we're seeing good results, particularly in our fully online product.
Our next question comes from Alex Paris of Barrington Research.
I'm glad to be on the call today after having recently initiated at — still learning, and I appreciate your responses to the prior questions, some of which I was going to ask myself. But I thought — and by the way, I don't know if it's just my line or in general, but it sounds like your line is cutting out from time to time, and I'm having a little trouble following it.
Can you repeat the question? I'm sorry about that. We're just having a technical difficulty. If you could just repeat it real quick, please?
Okay. Yes, we were having technical difficulty hearing you guys as well. I don't know where the problem is. But my question was just more to follow on to the three core growth drivers, participation, fully online and new campuses. I think you covered it well, but since online is an important growth driver, maybe we can dig down into that a little bit more with additional color. How is it priced relative to campus-based programs? I realize it's priced at a discount. And what is its contribution to adjusted operating income, for example, or operating income?
Great. This is Eilif again. I apologize for the technical difficulties that we seem to be having. I've switched over to a cell phone line now. Can you hear me okay? In terms of online, it's a very attractive business model. The price point of an online offering versus the face-to-face counterpart is about 40% below face-to-face. That gives us a contribution margin in the mid-50s, which is similar to a campus performance. So similar margin contribution, 40% lower price. And of course, an ROIC that is very superior because there is no CapEx in online, and it's benefiting from the strong brand portfolio that we have in both Mexico and Peru.
It definitely did. And then going back to a previous question, how do you market in Mexico and Peru? Is it like in the U.S., largely focused on digital marketing and Google search and etc?
Well, it depends. You should think about our business in two different lines. We have young students who we are recruiting from high schools and they live at home. So we know exactly where they are. The cost of acquisition for our traditional undergraduates is very low. We develop relationships with the high schools and the students through their middle school and high school experience. We do gamification. We do English training. We do career advising. We provide them with apps to help them in the learning experience. Then we maintain those relationships until their senior year in high school, and then we recruit them based on the campus that makes most sense vis-a-vis the ZIP code where they live. We have about 400,000 young students in Mexico and Peru that are recruited in that manner. Then we have 100,000 working adult fully online students. The marketing to entice that clientele is very different. It's largely lead generation. A lot of it is organically generated through proprietary information sites and outreach. To cover the earlier question, we are increasingly using AI tools to reach and understand and deliver an offering that is personalized and makes sense for that particular lead or individual. But we're also using search and all of the traditional tools that you are familiar with in the United States.
Our next question comes from Mauricio Cepeda of Morgan Stanley.
We have two questions here. The first about the Mexico margin expansion over time. We saw that Mexico improved a lot of the margin in the past from campus consolidation actions, fixed cost dilution, and operating efficiencies. But as those benefits mature and it seems that they have matured a little bit already, what would be the main sources for this next wave of margin expansion? Over which time frame should they become visible? The second question is about online penetration. We see that online penetration is increasing and because of the average price it dilutes tuition. At which level do you think they will begin offsetting the enrollment and margin benefits? What early indicators are you monitoring for cannibalization, higher acquisition costs or competitive price pressure?
Very good. In terms of the margin expansion for Mexico, I will hand that over to Rick, and then I will pick it up again on the online penetration.
Yes, as you said, we have had tremendous success in expanding margins in Mexico from around 20% to 26% historically. We have a great operating model on a go-forward basis now set with a very centralized cost structure. So we see notable opportunities to continue on a healthy operating leverage and flow-through margin of incremental revenue as well as we do still have some targeted efficiencies that we're working on to streamline operations across the different lines. So we do expect to continue to expand margins when you adjust for rent because we lease our properties in Mexico, and we own them in Peru. There's about a six percent-plus delta. As we've said historically, we are working on closing that gap and management believes we can close a substantial part of that gap in the next three to five years. On a consolidated basis, management's target is to continue to see margin expansion, and we expect to see margin expansion in the range of 30 basis points or more per year.
On your point on online penetration, this is the way I would think about it, Mauricio. In the United States, about 25% of all students are working adult fully online students. In Mexico, it is about 14%, and in Peru, it's less than 5%. You would expect online penetration in Mexico and Peru at least to get to the U.S. level. It could become significantly larger than in the U.S. because the mix of 25- to 50-year-olds in Mexico and Peru without a degree is much bigger than in the U.S. The fishing grounds are much bigger in Mexico and Peru for that working adult student. Will it go to 25% or 35% or 45%? I don't know. We're at the beginning of a very exciting journey to deliver high-quality education in a flexible manner to working adults looking to get into management or move from a local company to an international company and create significantly increased earnings potential.
Yes. The point is that distance learning is penetrating everywhere, but the point is that you will monitor for cannibalization because maybe younger students will go for it too, and at the end of the day there will be ticket dilution even if you keep margin, so it can decrease your bottom line growth. Are you monitoring for it? Is there any kind of saturation point monitoring in general?
Yes. We are monitoring this very carefully. I believe online is a terrific tool for working adult students. I don't think it makes a lot of sense for the average 17- or 18-year-old to sit in his or her bedroom to get an online undergraduate degree. Very few 17- and 18-year-olds are going to be successful doing that. So we are monitoring all of our students that are in the online program. The vast majority, 95-plus percent of our students who are in a location where we have a campus and are below 25 years old will be in a campus setting. Very few 18- to 22-year-old students in our network will be in a fully online operation. There will be some unique circumstances where that is facilitated. We are marketing face-to-face or hybrid to young students and the price point on face-to-face versus hybrid is essentially the same because students decide how much hybridity to do depending on their flexibility if they are working part time alongside studies.
The fully online offering is where we are marketing to working adults, 25- to 50-year-olds, and we are offering a significantly lower price point because the cost of delivery is lighter and the ability to work independently is different. We are not following some of the more challenging experiences seen in other markets. We are very disciplined. We have a great product for young students that involves the campus experience. Then we have a very high-quality online product with a lot of built-in digital and AI tools designed to support working adult professionals balancing studies, a job and a family.
I am showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.