Stronger profits and $750M buyback fuel Adtalem (NYSE: ATGE) strategy
Adtalem Global Education delivered higher results for the quarter ended December 31, 2025, with revenue of
Diluted earnings per share rose to
Operating cash flow improved to
Positive
- Strong earnings growth: Six‑month diluted EPS increased to $3.77 from $3.15, supported by revenue rising to $965.7 million from $865.1 million and higher operating income.
- Deleveraging and liquidity: Long‑term debt declined to $504.3 million, the revolver was undrawn with $500.0 million available, and operating cash flow improved to $160.3 million for the first half.
- Large shareholder returns: The company repurchased about 1.8 million shares for $172.5 million year‑to‑date and authorized a new $750.0 million buyback program, with $727.5 million of capacity remaining.
Negative
- None.
Insights
Adtalem shows solid revenue growth, rising EPS, deleveraging, and aggressive buybacks.
Adtalem grew quarterly revenue to
Balance sheet metrics moved in a healthier direction. Long‑term debt declined to
Capital allocation was notably shareholder‑friendly. The company repurchased about 1.8 million shares for
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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(Mark One) | |
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the quarterly period ended | |
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or | |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the transition period from _____ to _____ | |
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Commission File Number: | |
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
|
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(Address of principal executive offices) | (Zip Code) |
(
(Registrant’s telephone number; including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, $0.01 par value per share | ATGE | NYSE Texas |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ||||
þ | Accelerated filer | ☐ | ||
Non-accelerated filer | ◻ | Smaller reporting company | ||
| |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of January 23, 2026, there were
Table of Contents
Adtalem Global Education Inc.
Form 10-Q
Table of Contents
| Page | |
| Part I. Financial Information | |
Item 1. | Financial Statements | 1 |
| Consolidated Balance Sheets | 1 |
| Consolidated Statements of Income | 2 |
| Consolidated Statements of Cash Flows | 3 |
| Consolidated Statements of Shareholders’ Equity | 4 |
| Notes to Consolidated Financial Statements | 5 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 42 |
Item 4. | Controls and Procedures | 42 |
| Part II. Other Information | |
Item 1. | Legal Proceedings | 43 |
Item 1A. | Risk Factors | 43 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 43 |
Item 5. | Other Information | 43 |
Item 6. | Exhibits | 45 |
Signature | 46 |
Table of Contents
Part I. Financial Information
Item 1. Financial Statements
Adtalem Global Education Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands, except par value)
| | | | | | |
| | December 31, | | June 30, | ||
| | 2025 | | 2025 | ||
Assets: | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | | | $ | |
Restricted cash | |
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| |
Accounts and financing receivables, net | |
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Prepaid expenses and other current assets | |
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Total current assets | |
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Noncurrent assets: | |
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Property and equipment, net | | | | | | |
Operating lease assets | |
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Deferred income taxes | |
| — | |
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Intangible assets, net | |
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Goodwill | |
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Other assets, net | |
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Total noncurrent assets | |
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Total assets | | $ | | | $ | |
Liabilities and shareholders' equity: | |
| | | | |
Current liabilities: | |
| | | | |
Accounts payable | | $ | | | $ | |
Accrued payroll and benefits | |
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Accrued liabilities | |
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Deferred revenue | |
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Current operating lease liabilities | |
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Total current liabilities | |
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Noncurrent liabilities: | |
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Long-term debt | |
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Long-term operating lease liabilities | |
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Deferred income taxes | |
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Other liabilities | |
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Total noncurrent liabilities | |
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Total liabilities | |
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Commitments and contingencies | |
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Shareholders' equity: | |
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Common stock, $ | |
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Additional paid-in capital | |
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Retained earnings | |
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Accumulated other comprehensive loss | |
| ( | |
| ( |
Treasury stock, at cost, | |
| ( | |
| ( |
Total shareholders' equity | |
| | |
| |
Total liabilities and shareholders' equity | | $ | | | $ | |
See accompanying Notes to Consolidated Financial Statements.
1
Table of Contents
Adtalem Global Education Inc.
Consolidated Statements of Income
(unaudited)
(in thousands, except per share data)
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Revenue | | $ | | | $ | | | $ | | | $ | |
Operating cost and expense: | |
| | | | | |
| | | | |
Cost of educational services | |
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Student services and administrative expense | |
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Restructuring expense | |
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Total operating cost and expense | |
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Operating income | |
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Interest expense | |
| ( | |
| ( | |
| ( | |
| ( |
Other income, net | |
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Income from continuing operations before income taxes | |
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Provision for income taxes | |
| ( | |
| ( | |
| ( | |
| ( |
Income from continuing operations | |
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Discontinued operations: | |
| | | | | |
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Income from discontinued operations before income taxes | |
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Provision for income taxes | |
| ( | |
| ( | |
| ( | |
| ( |
Income from discontinued operations | |
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| | |
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Net income and comprehensive income | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Earnings per share: | |
| | | | | |
| | | | |
Basic: | |
| | | | | |
| | | | |
Continuing operations | | $ | | | $ | | | $ | | | $ | |
Discontinued operations | | $ | | | $ | | | $ | | | $ | |
Total basic earnings per share | | $ | | | $ | | | $ | | | $ | |
Diluted: | |
| | |
| | |
| | |
| |
Continuing operations | | $ | | | $ | | | $ | | | $ | |
Discontinued operations | | $ | | | $ | | | $ | | | $ | |
Total diluted earnings per share | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Weighted-average shares outstanding: | | | | | | | | | | | | |
Basic shares | | | | | | | | | | | | |
Diluted shares | | | | | | | | | | | | |
See accompanying Notes to Consolidated Financial Statements.
2
Table of Contents
Adtalem Global Education Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| | | | | | |
| | Six Months Ended | ||||
| | December 31, | ||||
| | 2025 | | 2024 | ||
Operating activities: | | | | | | |
Net income | | $ | | | $ | |
Income from discontinued operations | |
| ( | |
| ( |
Income from continuing operations | | | | | | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
| | |
| |
Stock-based compensation | |
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Amortization of operating lease assets | | | | | | |
Depreciation | |
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Amortization of acquired intangible assets | |
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Amortization and write-off of debt discount and issuance costs | | | | | | |
Provision for bad debts | | | | | | |
Deferred income taxes | |
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Loss on disposals and impairments of property and equipment | |
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| |
Gain on investments | | | ( | | | ( |
Changes in assets and liabilities: | |
| | |
| |
Accounts and financing receivables | |
| ( | |
| ( |
Prepaid expenses and other current assets | |
| ( | |
| |
Cloud computing implementation assets | |
| ( | |
| ( |
Accounts payable | |
| ( | |
| ( |
Accrued payroll and benefits | | | ( | | | ( |
Accrued liabilities | |
| ( | |
| ( |
Deferred revenue | |
| ( | |
| ( |
Operating lease liabilities | | | ( | | | ( |
Other assets and liabilities | |
| ( | |
| ( |
Net cash provided by operating activities-continuing operations | |
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Net cash provided by operating activities-discontinued operations | |
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Net cash provided by operating activities | |
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Investing activities: | |
| | | | |
Capital expenditures | |
| ( | |
| ( |
Proceeds from sales of marketable securities | |
| | |
| |
Purchases of marketable securities | |
| ( | |
| ( |
Payment for investment in business | |
| ( | |
| — |
Net cash used in investing activities | |
| ( | |
| ( |
Financing activities: | |
| | | | |
Proceeds from exercise of stock options | |
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Employee taxes paid on withholding shares | |
| ( | |
| ( |
Proceeds from stock issued under Colleague Stock Purchase Plan | |
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Repurchases of common stock for treasury | |
| ( | |
| ( |
Borrowings under long-term debt obligations | |
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Repayments under long-term debt obligations | |
| ( | |
| ( |
Payment of debt issuance costs | |
| ( | |
| — |
Net cash used in financing activities | |
| ( | |
| ( |
Net decrease in cash, cash equivalents and restricted cash | |
| ( | |
| ( |
Cash, cash equivalents and restricted cash at beginning of period | |
| | |
| |
Cash, cash equivalents and restricted cash at end of period | | $ | | | $ | |
Non-cash investing and financing activities: | | | | | | |
Accrued capital expenditures | | $ | | | $ | |
Accrued liability for repurchases of common stock | | $ | | | $ | |
Accrued excise tax on share repurchases | | $ | | | $ | |
See accompanying Notes to Consolidated Financial Statements.
3
Table of Contents
Adtalem Global Education Inc.
Consolidated Statements of Shareholders’ Equity
(unaudited)
(in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Accumulated | | | | | | | | | | |
| | | | | | | | Additional | | | | | Other | | | | | | | | | | ||
| | Common Stock | | Paid-In | | Retained | | Comprehensive | | Treasury Stock | | | | |||||||||||
| | Shares | | Amount | | Capital | | Earnings | | Loss | | Shares | | Amount | | Total | ||||||||
September 30, 2024 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
Net income |
| | |
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Stock-based compensation |
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Net activity from stock-based compensation awards |
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| | | | | | | | |
| | ( |
| | ( |
Proceeds from stock issued under Colleague Stock Purchase Plan | | | | | | | | | | | | | | | | | | ( | | | | | | |
Repurchases of common stock for treasury | | | | | | | | | | | | | | | | | | | | | ( | | | ( |
December 31, 2024 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | | | | | | |
September 30, 2025 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
Net income |
| | | | | | | | | | | | | | | | | |
| | |
| | |
Stock-based compensation |
| | | | | | | | | | | | | | | | | | | | |
| | |
Net activity from stock-based compensation awards |
| | | | | | | | | | | | | | | | | | | | ( |
| | ( |
Proceeds from stock issued under Colleague Stock Purchase Plan |
| | | | | | | | | | | | | | | | | ( | | | |
| | |
Repurchases of common stock for treasury | | | | | | | | | | | | | | | | | | | | | ( | | | ( |
December 31, 2025 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | | | | | | |
June 30, 2024 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
Net income |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Stock-based compensation |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Net activity from stock-based compensation awards |
| | |
| | |
| | |
| | |
| | |
| | |
| | ( |
| | ( |
Proceeds from stock issued under Colleague Stock Purchase Plan | | | | | | | | | | | | | | | | | | ( | | | | | | |
Repurchases of common stock for treasury | | | | | | | | | | | | | | | | | | | | | ( | | | ( |
December 31, 2024 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
| | | | | | | | | | | | | | | | | | | | | | | | |
June 30, 2025 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
Net income |
| | | | | | | | | | | | | | | | | |
| | |
| | |
Stock-based compensation |
| | | | | | | | | | | | | | | | | | | | |
| | |
Net activity from stock-based compensation awards |
| | | | | | | | | | | | | | | | | | | | ( |
| | ( |
Proceeds from stock issued under Colleague Stock Purchase Plan |
| | | | | | | | | | | | | | | | | ( | | | |
| | |
Repurchases of common stock for treasury | | | | | | | | | | | | | | | | | | | | | ( | | | ( |
December 31, 2025 | | | | | $ | | | $ | | | $ | | | $ | ( | | | | | $ | ( | | $ | |
See accompanying Notes to Consolidated Financial Statements.
4
Table of Contents
Adtalem Global Education Inc.
Notes to Consolidated Financial Statements
(unaudited)
Table of Contents
Note |
| Page |
1 | Nature of Operations | 6 |
2 | Summary of Significant Accounting Policies | 6 |
3 | Discontinued Operations | 7 |
4 | Revenue | 7 |
5 | Restructuring Expense | 9 |
6 | Other Income, Net | 10 |
7 | Income Taxes | 10 |
8 | Earnings per Share | 11 |
9 | Accounts and Financing Receivables | 11 |
10 | Property and Equipment, Net | 14 |
11 | Leases | 14 |
12 | Goodwill and Intangible Assets | 15 |
13 | Debt | 17 |
14 | Share Repurchases | 20 |
15 | Stock-Based Compensation | 20 |
16 | Fair Value Measurements | 22 |
17 | Commitments and Contingencies | 23 |
18 | Segment Information | 24 |
5
Table of Contents
1. Nature of Operations
In this Quarterly Report on Form 10-Q, Adtalem Global Education Inc., together with its subsidiaries, is collectively referred to as “Adtalem,” “we,” “our,” “us,” or similar references. Adtalem reports on a fiscal year period ending on June 30. Therefore, this Quarterly Report for the quarterly period ended December 31, 2025 is for our second quarter of fiscal year 2026.
Adtalem is the leading healthcare educator in the U.S. Our schools consist of Chamberlain University (“Chamberlain”), Walden University (“Walden”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“RUSVM”). AUC, RUSM, and RUSVM are collectively referred to as the “medical and veterinary schools.” “Home Office” includes activities not allocated to a reportable segment. See Note 18 “Segment Information” for information on our reportable segments.
2. Summary of Significant Accounting Policies
Basis of Presentation
Our significant accounting policies are described in Note 2 “Summary of Significant Accounting Policies” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “2025 Form 10-K”). We have prepared the accompanying unaudited consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (which are normal and recurring in nature) considered necessary for a fair presentation have been included. The year-end balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. We use the same accounting policies in preparing quarterly and annual financial statements. Unless otherwise noted, amounts presented within the Notes to Consolidated Financial Statements refer to our continuing operations. Unless indicated, or the context requires otherwise, references to years refer to Adtalem’s fiscal years. Certain items presented in tables may not sum due to rounding. These consolidated financial statements and accompanying notes should be read in conjunction with our annual consolidated financial statements and the notes thereto included in our 2025 Form 10-K.
Use of Estimates
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. Actual results could differ from those estimates.
Recent Accounting Standards
In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-11: “Interim Reporting (Topic 270): Narrow-Scope Improvements.” The guidance was issued to improve the guidance in Topic 270, Interim Reporting, by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The guidance also provides additional guidance on what disclosures should be provided in interim reporting periods. The guidance is effective on a prospective or retrospective basis for financial statements issued for fiscal years beginning after December 15, 2027, and interim reporting periods within fiscal years beginning after December 15, 2028. Early adoption of the guidance is permitted. We do not expect the guidance will have a material impact on Adtalem’s Consolidated Financial Statements or disclosures.
In September 2025, the FASB issued ASU No. 2025-06: “Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” The guidance was issued to modernize the accounting for software costs. The guidance is effective on a prospective, modified, or a retrospective transition approach for financial statements issued for fiscal years beginning after December 15, 2027, and interim reporting periods within those fiscal years. Early adoption of the guidance is permitted. We are currently evaluating the impact the guidance will have on Adtalem’s Consolidated Financial Statements.
6
Table of Contents
In July 2025, the FASB issued ASU No. 2025-05: “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” The guidance was issued to provide a practical expedient to measure credit losses on current accounts receivable and current contract assets. The guidance is effective prospectively for financial statements issued for fiscal years beginning after December 15, 2025, and interim reporting periods within those fiscal years. Early adoption of the guidance is permitted. We do not expect the guidance will have a material impact on Adtalem’s Consolidated Financial Statements.
In November 2024, the FASB issued ASU No. 2024-03: “Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The guidance was issued to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions as well as disclosures about selling expenses. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2026 and interim reporting periods within fiscal years beginning after December 15, 2027. The amendments should be applied prospectively, however retrospective application is permitted. Early adoption of the amendments is permitted, including adoption in an interim reporting period. The amendments will expand our footnote disclosures to include a disaggregation of expenses in accordance with the amendments but will not otherwise impact Adtalem’s Consolidated Financial Statements.
In December 2023, the FASB issued ASU No. 2023-09: “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The guidance was issued to enhance the transparency and decision usefulness of income tax disclosures by requiring entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2024. The amendments should be applied prospectively, however retrospective application is permitted. Early adoption of the amendments is permitted. The amendments will impact our income tax disclosures but will not otherwise impact Adtalem’s Consolidated Financial Statements.
We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our Consolidated Financial Statements or disclosures.
3. Discontinued Operations
On December 11, 2018, Adtalem sold DeVry University to Cogswell Education, LLC (“Cogswell”) for de minimis consideration. The purchase agreement includes an earn-out entitling Adtalem to payments of up to $
We had income from discontinued operations of $
4. Revenue
Revenue is recognized when control of the promised goods or services is transferred to our customers (students), in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
7
Table of Contents
The following tables disaggregate revenue by source (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended December 31, 2025 | ||||||||||
| | Chamberlain | | Walden |
| Medical and | | Consolidated | ||||
Tuition and fees | | $ | | | $ | |
| $ | | | $ | |
Other | | | | | | | | | | | | |
Total |
| $ | |
| $ | |
| $ | |
| $ | |
| | | | | | | | | | | | |
| | Six Months Ended December 31, 2025 | ||||||||||
| | Chamberlain | | Walden |
| Medical and | | Consolidated | ||||
Tuition and fees |
| $ | |
| $ | |
| $ | |
| $ | |
Other | | | | | | | | | | | | |
Total |
| $ | |
| $ | |
| $ | |
| $ | |
| | | | | | | | | | | | |
| | Three Months Ended December 31, 2024 | ||||||||||
| | Chamberlain | | Walden |
| Medical and | | Consolidated | ||||
Tuition and fees | | $ | |
| $ | |
| $ | | | $ | |
Other | | | | | | | | | | | | |
Total |
| $ | |
| $ | |
| $ | |
| $ | |
| | | | | | | | | | | | |
| | Six Months Ended December 31, 2024 | ||||||||||
| | Chamberlain | | Walden |
| Medical and | | Consolidated | ||||
Tuition and fees | | $ | |
| $ | |
| $ | |
| $ | |
Other | | | | | | | | | | | | |
Total |
| $ | |
| $ | |
| $ | |
| $ | |
In addition, see Note 18 “Segment Information” for a disaggregation of revenue by geographical region.
Performance Obligations and Revenue Recognition
Tuition and fees: The majority of revenue is derived from tuition and fees, which is recognized on a straight-line basis over the academic term as instruction is delivered.
Other: Other revenue consists of housing and other miscellaneous services. Other revenue is recognized over the period in which the applicable performance obligation is satisfied.
Arrangements for payment are agreed to prior to registration of the student’s first academic term. The majority of U.S. students obtain Title IV or other financial aid resulting in institutions receiving a significant amount of the transaction price at the beginning of the academic term. Students not utilizing Title IV or other financial aid funding may pay after the academic term is complete.
Transaction Price
Revenue, or transaction price, is measured as the amount of consideration expected to be received in exchange for transferring goods or services.
Students may receive scholarships, discounts, or refunds, which gives rise to variable consideration. The amounts of scholarships or discounts are generally applied to individual student accounts when such amounts are awarded. Therefore, the transaction price is immediately reduced directly by these scholarships or discounts from the amount of the standard tuition rate charged. Scholarships and discounts that are only applied to future tuition charged are considered a separate performance obligation if they represent a material right in accordance with ASC 606. In those instances, we defer the
8
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value of the related performance obligation associated with the future scholarship or discount based on estimates of future redemption based on our historical experience of student persistence toward completion of study.
Upon withdrawal, a student may be eligible to receive a refund, or partial refund, the amount of which is dependent on the timing of the withdrawal during the academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit Adtalem to retain a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by Adtalem in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. For contracts with similar characteristics and historical data on refunds, the expected value method is applied in determining the variable consideration related to refunds. Estimates of Adtalem’s expected refunds are determined at the outset of each academic term, based upon actual refunds in previous academic terms. Reserves related to refunds are presented as refund liabilities within accrued liabilities on the Consolidated Balance Sheets. All refunds are netted against revenue during the applicable academic term.
Management reassesses collectability on a student-by-student basis throughout the period revenue is recognized. This reassessment is based upon new information and changes in facts and circumstances relevant to a student’s ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis.
Contract Balances
Students are billed at the beginning of each academic term and payment is due at that time. Adtalem’s performance obligation is to provide educational services in the form of instruction during the academic term and to provide for any scholarships or discounts that are deemed a material right under ASC 606. As instruction is provided or the deferred value of material rights are recognized, deferred revenue is reduced. A significant portion of student payments are from Title IV financial aid and other programs and are generally received during the first month of the respective academic term. For students utilizing Adtalem’s credit extension programs (see Note 9 “Accounts and Financing Receivables”), payments are generally received after the academic term, and the corresponding performance obligation, is complete. When payments are received, accounts and financing receivables are reduced.
Deferred revenue within current liabilities is $
The difference between the opening and closing balances of deferred revenue includes decreases from revenue recognized during the period, increases from charges related to the start of academic terms beginning during the period, increases from payments received related to academic terms commencing after the end of the period, and increases from recognizing additional performance obligations for material rights during the period.
5. Restructuring Expense
During the six months ended December 31, 2025, Adtalem recorded restructuring expense primarily driven by workforce reductions and prior real estate consolidations at Adtalem’s home office. We continue to incur restructuring charges or reversals related to exited leased space from previous restructuring actions. During the six months ended December 31, 2024, Adtalem recorded restructuring expense primarily driven by workforce reductions, costs to exit certain course offerings, and prior real estate consolidations at Adtalem’s home office. When estimating costs of exiting lease space, estimates are made which could differ materially from actual results and may result in additional restructuring
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charges or reversals in future periods. Termination benefit charges represent severance pay and benefits for employees impacted by workforce reductions.
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, 2025 | | Six Months Ended December 31, 2025 | ||||||||||||||
| | Real Estate | | Termination | | Total | | Real Estate | | Termination | | Total | ||||||
Chamberlain |
| $ | |
| $ | |
| $ | | | $ | |
| $ | |
| $ | |
Walden |
| | — |
| | |
| | | | | — |
| | |
| | |
Medical and Veterinary |
| | |
| | |
| | | | | |
| | |
| | |
Home Office |
| | |
| | |
| | | | | |
| | |
| | |
Total | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, 2024 | | Six Months Ended December 31, 2024 | ||||||||||||||
| | Real Estate | | Termination | | Total | | Real Estate | | Termination | | Total | ||||||
Chamberlain |
| $ | |
| $ | — |
| $ | | | $ | |
| $ | |
| $ | |
Medical and Veterinary |
| | |
| | — |
| | | | | |
| | — |
| | |
Home Office |
| | |
| | — |
| | | | | |
| | — |
| | |
Total | | $ | | | $ | — | | $ | | | $ | | | $ | | | $ | |
The following table summarizes the separation and restructuring plan activity for fiscal years 2025 and 2026, for which cash payments are required (in thousands):
| | | |
Liability balance as of June 30, 2024 | | $ | — |
Increase in liability (termination and other charges) | | | |
Reduction in liability (payments and adjustments) | | | ( |
Liability balance as of June 30, 2025 | | | — |
Increase in liability (termination and other charges) | | | |
Reduction in liability (payments and adjustments) | | | ( |
Liability balance as of December 31, 2025 | | $ | |
These liability balances are recorded as accrued liabilities on the Consolidated Balance Sheets.
6. Other Income, Net
Other income, net consisted of the following (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Interest and dividend income | | $ | | | $ | | | $ | | | $ | |
Investment gain (loss) | | | | | | ( | | | | | | |
Other income, net | | $ | | | $ | | | $ | | | $ | |
Investment gain (loss) includes trading gains and losses related to the rabbi trust used to fund nonqualified deferred compensation plan obligations.
7. Income Taxes
Our effective tax rate from continuing operations was
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on certain executive compensation, partially offset by a decrease in the percentage of earnings from operations in higher taxed jurisdictions and an increase in tax benefits on stock-based compensation. The income tax provisions reflect the U.S. federal tax rate of
RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. RUSM has an exemption in Barbados until 2039 and RUSVM has an exemption in St. Kitts until 2038.
In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which introduced substantial changes to U.S. tax provisions. The most relevant provisions to Adtalem for fiscal year 2026 include allowing accelerated tax deductions for qualified property and research and development expenditures. The impacts of OBBBA were not material to the income tax provision for the three and six months ended December 31, 2025.
8. Earnings per Share
The following table sets forth the computations of basic and diluted earnings per share and antidilutive shares (in thousands, except per share data):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Numerator: | | | | | | | | | | | | |
Net income: | |
| | |
| | |
| | |
| |
Continuing operations | | $ | | | $ | | | $ | | | $ | |
Discontinued operations | | | | | | | | | | | | |
Net income | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Denominator: | | | | | | | | | | | | |
Weighted-average basic shares outstanding |
| | | |
| |
| | |
| | |
Effect of dilutive stock awards |
| | | |
| |
| | |
| | |
Weighted-average diluted shares outstanding |
| | | |
| |
| | |
| | |
| | | | | | | | | | | | |
Earnings per share: | | | | | | | | | | | | |
Basic: | | | | | | | | | | | | |
Continuing operations | | $ | | | $ | | | $ | | | $ | |
Discontinued operations | | $ | | | $ | | | $ | | | $ | |
Total basic earnings per share | | $ | | | $ | | | $ | | | $ | |
Diluted: | | | | | | | | | | | | |
Continuing operations | | $ | | | $ | | | $ | | | $ | |
Discontinued operations | | $ | | | $ | | | $ | | | $ | |
Total diluted earnings per share | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | |
Weighted-average antidilutive shares | | | | | | | | | | | | |
9. Accounts and Financing Receivables
Our accounts receivables relate to student balances occurring in the normal course of business. Accounts receivables have a term of less than one year and are included in accounts and financing receivables, net on our Consolidated Balance Sheets. Our financing receivables relate to credit extension programs, which provide students with payment terms in excess of one year and are included in accounts and financing receivables, net and other assets, net on our Consolidated Balance Sheets.
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The classification of our accounts and financing receivable balances was as follows (in thousands):
| | | | | | | | | |
| | December 31, 2025 | |||||||
| | | Gross | | | Allowance | | | Net |
Accounts receivables, current | | $ | | | $ | ( | | $ | |
Financing receivables, current | | | | | | ( | | | |
Accounts and financing receivables, current | | $ | | | $ | ( | | $ | |
| | | | | | | | | |
Financing receivables, current | | $ | | | $ | ( | | $ | |
Financing receivables, noncurrent | | | | | | ( | | | |
Total financing receivables | | $ | | | $ | ( | | $ | |
| | | | | | | | | |
| | June 30, 2025 | |||||||
| | | Gross | | | Allowance | | | Net |
Accounts receivables, current | | $ | | | $ | ( | | $ | |
Financing receivables, current | | | | | | ( | | | |
Accounts and financing receivables, current | | $ | | | $ | ( | | $ | |
| | | | | | | | | |
Financing receivables, current | | $ | | | $ | ( | | $ | |
Financing receivables, noncurrent | | | | | | ( | | | |
Total financing receivables | | $ | | | $ | ( | | $ | |
Our financing receivables relate to credit extension programs available to students at Chamberlain, AUC, RUSM, and RUSVM. These credit extension programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, fees, and books, and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM, and RUSVM allow students to finance their living expenses. Repayment plans for financing agreements are developed to address the financial circumstances of the particular student. Interest charges at rates from
Credit Quality
The primary credit quality indicator for our financing receivables is delinquency. Balances are considered delinquent when contractual payments on the loan become past due. We generally write-off financing receivable balances when they are at least 181 days past due. Payments are applied first to outstanding interest and then to the unpaid principal balance.
The credit quality analysis of financing receivables as of December 31, 2025 was as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | |
| | Amortized Cost Basis by Origination Year | | | | ||||||||||||||||
| | Prior | | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Total | |||||||
1-30 days past due |
| $ | | | $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
31-60 days past due | | | | | | | | | | | | | | | | | | | | | |
61-90 days past due | | | | | | | | | | | | | | | | | | | | | |
91-120 days past due | | | | | | | | | | | | | | | | | | | | | |
121-150 days past due | | | | | | | | | | | | | | | | | | | | | |
Greater than 150 days past due | | | | | | | | | | | | | | | | | | | | | |
Total past due | | | | | | | | | | | | | | | | | | | | | |
Current | | | | | | | | | | | | | | | | | | | | | |
Financing receivables, gross | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Gross write-offs | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
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The credit quality analysis of financing receivables as of June 30, 2025 was as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | |
| | Amortized Cost Basis by Origination Year | | | | ||||||||||||||||
| | Prior | | 2021 | | 2022 | | 2023 | | 2024 | | 2025 | | Total | |||||||
1-30 days past due |
| $ | | | $ | |
| $ | |
| $ | |
| $ | |
| $ | |
| $ | |
31-60 days past due | | | | | | | | | | | | | | | | | | | | | |
61-90 days past due | | | | | | | | | | | | | | | | | | | | | |
91-120 days past due | | | | | | | | | | | | | | | | | | | | | |
121-150 days past due | | | | | | | | | | | | | | | | | | | | | |
Greater than 150 days past due | | | | | | | | | | | | | | | | | | | | | |
Total past due | | | | | | | | | | | | | | | | | | | | | |
Current | | | | | | | | | | | | | | | | | | | | | |
Financing receivables, gross | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Gross write-offs | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
Allowance for 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.
For our accounts receivables, we use historical loss rates based on an aging schedule and a student’s status to determine the allowance for credit losses. As these accounts receivables are short-term in nature, management believes a student’s status provides the best credit loss estimate, while also factoring in delinquency. Students still attending classes, recently graduated, or current on payments are more likely to pay than those who are inactive due to being on a leave of absence, withdrawing from school, or not current on payments.
For our financing receivables, we use historical loss rates based on an aging schedule. As these financing receivables are based on long-term financing agreements offered by Adtalem, management believes that delinquency provides the best credit loss estimate. As the financing receivable balances become further past due, it is less likely we will receive payment, causing our estimate of credit losses to increase.
The following tables provide a roll-forward of the allowance for credit losses (in thousands):
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, 2025 |
| Six Months Ended December 31, 2025 | ||||||||||||||
| | Accounts | | Financing | | Total |
| Accounts | | Financing | | Total | ||||||
Beginning balance |
| $ | | | $ | |
| $ | | | $ | | | $ | |
| $ | |
Write-offs | | | ( | | | ( | | | ( | | | ( | | | ( | | | ( |
Recoveries | | | | | | | | | | | | | | | | | | |
Provision for credit losses | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, 2024 | | Six Months Ended December 31, 2024 | ||||||||||||||
| | Accounts | | Financing | | Total | | Accounts | | Financing | | Total | ||||||
Beginning balance |
| $ | | | $ | |
| $ | | | $ | | | $ | |
| $ | |
Write-offs | | | ( | | | ( | | | ( | | | ( | | | ( | | | ( |
Recoveries | | | | | | | | | | | | | | | | | | |
Provision for credit losses | | | | | | | | | | | | | | | | | | |
Ending balance | | $ | | | $ | | | $ | | | $ | | | $ | | | $ | |
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10. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
| | | | | | | | |
| | | | December 31, | | June 30, | ||
| | Useful Life | | 2025 | | 2025 | ||
Land |
| - |
| $ | | | $ | |
Buildings and improvements | | | | | | | | |
Leasehold improvements | | Shorter of asset useful life or lease term | | | | | | |
Furniture and equipment | | | | | | | | |
Software | | | | | | | | |
Construction in progress | | - | | | | | | |
Property and equipment, gross | | | | | | | | |
Accumulated depreciation | | | |
| ( | |
| ( |
Property and equipment, net | | | | $ | | | $ | |
11. Leases
We determine if a contract contains a lease at inception. We have entered into operating leases for academic sites, housing facilities, and office space which expire at various dates through December 2042, most of which include options to
Operating lease assets represent our right to use an underlying asset during the lease term. Operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. Operating lease assets are adjusted for any prepaid or accrued lease payments, lease incentives, initial direct costs, and impairments. Our incremental borrowing rate is utilized in determining the present value of the lease payments based upon the information available at the commencement date. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease. Operating lease expense is recognized on a straight-line basis over the lease term.
As of December 31, 2025, we entered into
The components of lease cost were as follows (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, |
| December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Operating lease cost | | $ | | | $ | | | $ | | | $ | |
Sublease income | |
| ( | |
| ( | |
| ( | |
| ( |
Total lease cost | | $ | | | $ | | | $ | | | $ | |
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Maturities of lease liabilities as of December 31, 2025 were as follows (in thousands):
| | | |
| | Operating | |
Fiscal Year | | Leases | |
2026 (remaining) | | $ | |
2027 | | | |
2028 | | | |
2029 | | | |
2030 | | | |
Thereafter | | | |
Total lease payments | |
| |
Less: lease incentives not yet received | | | ( |
Less: imputed interest | | | ( |
Present value of lease liabilities | | $ | |
Lease term and discount rate were as follows:
| | | |
| | December 31, | |
| | 2025 | |
Weighted-average remaining operating lease term (years) | | | |
Weighted-average operating lease discount rate | | | |
Supplemental disclosures of cash flow information related to leases were as follows (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Cash paid for amounts in the measurement of operating lease liabilities (net of sublease and lease incentive receipts) | | $ | | | $ | | | $ | | | $ | |
Operating lease assets obtained in exchange for operating lease liabilities | | $ | | | $ | | | $ | | | $ | |
12. Goodwill and Intangible Assets
Goodwill balances by reportable segment were as follows (in thousands):
| | | | | | |
| | December 31, | | June 30, | ||
| | 2025 | | 2025 | ||
Chamberlain | | $ | | | $ | |
Walden | | | | | | |
Medical and Veterinary | | | | | | |
Total | | $ | | | $ | |
Indefinite-lived intangible assets consisted of the following (in thousands):
| | | | | | |
| | December 31, | | June 30, | ||
| | 2025 | | 2025 | ||
Title IV eligibility and accreditations | | $ | | | $ | |
Trade name | |
| | |
| |
Total | | $ | | | $ | |
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Amortizable intangible assets consisted of the following (in thousands):
| | | | | | | | | | | | | | |
| | December 31, 2025 | | June 30, 2025 | | | ||||||||
| | Gross Carrying | | Accumulated | | Gross Carrying | | Accumulated | | Weighted-Average | ||||
| | Amount | | Amortization | | Amount | | Amortization | | Amortization Period | ||||
Curriculum | | $ | | | $ | ( |
| $ | | | $ | ( |
| |
Total | | $ | | | $ | ( |
| $ | | | $ | ( |
| |
Amortization expense on finite-lived intangible assets was $
| | | |
Fiscal Year | | Walden | |
2026 (remaining) | | $ | |
2027 | |
| |
Total | | $ | |
Curriculum is amortized on a straight-line basis.
Indefinite-lived intangible assets related to trade names and Title IV eligibility and accreditations are not amortized, as there are no legal, regulatory, contractual, economic, or other factors that limit the useful life of these intangible assets to the reporting entity.
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.
Adtalem has
During the second quarter of fiscal year 2026, Adtalem performed an assessment to determine whether there were indicators of a triggering event which could indicate the carrying value of the reporting units may not be supported by the fair value. No indicators of a triggering event for potential impairment were noted in the second quarter of fiscal year 2026.
If economic conditions deteriorate or operating performance of our reporting units does not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods.
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13. Debt
Long-term debt consisted of the following senior secured credit facilities (in thousands):
| | | | | | |
| | December 31, | | June 30, | ||
| | 2025 | | 2025 | ||
Senior Secured Notes due 2028 | | $ | | | $ | |
Term Loan B | |
| | |
| |
Total principal | |
| | |
| |
Unamortized debt discount and issuance costs | |
| ( | |
| ( |
Long-term debt | | $ | | | $ | |
Scheduled future maturities of long-term debt were as follows (in thousands):
| | | |
| | Maturity | |
Fiscal Year | | Payments | |
2026 (remaining) | | $ | |
2027 | |
| |
2028 | |
| |
2029 | |
| |
Total | | $ | |
Senior Secured Notes due 2028
On March 1, 2021, Adtalem issued $
The Notes were issued at
We may redeem the Notes, in whole or in part, at any time on or after March 1, 2024 at redemption prices equal to
On April 11, 2022, we repaid $
Accrued interest on the Notes of $
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Credit Agreement
On August 12, 2021, in connection with the Walden acquisition, Adtalem entered into a credit agreement (the “Credit Agreement”) that provides for (1) a $
On June 27, 2023, Adtalem entered into Amendment No. 1 to Credit Agreement, identifying the Secured Overnight Financing Rate (“SOFR”) as the benchmark rate to replace LIBOR for eurocurrency rate loans within the Credit Agreement effective the first quarter of fiscal year 2024.
Term Loan B
Prior to January 26, 2024, borrowings under the Term Loan B bore interest at a rate per annum equal to, at our option, SOFR plus an applicable margin ranging from
On January 26, 2024, we entered into Amendment No. 2 to Credit Agreement, which resulted in a
On August 21, 2024, we entered into Amendment No. 3 to Credit Agreement, which resulted in a further
As of December 31, 2025, the interest rate for borrowings under the Term Loan B facility was
Revolver
Borrowings under the Revolver bear interest at a rate per annum equal to SOFR, subject to a SOFR floor of
On August 6, 2025, we entered into Amendment No. 4 to Credit Agreement and Incremental Assumption Agreement (the “Amendment”), to (i) increase available commitments under our revolving facility by $
The Credit Agreement requires payment of a commitment fee equal to
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Debt Discount and Issuance Costs
The Term Loan B was issued at a price of
| | | | | | | | | | | | |
| | Notes | | Term Loan B | | Revolver | | Total | ||||
Unamortized debt discount and issuance costs as of June 30, 2025 | | $ | | | $ | | | $ | | | $ | |
Capitalized debt issuance costs | |
| | |
| | |
| | |
| |
Amortization of debt discount and issuance costs | |
| ( | |
| ( | |
| ( | |
| ( |
Debt discount and issuance costs write-off | | | | | | ( | | | ( | | | ( |
Unamortized debt discount and issuance costs as of December 31, 2025 | | $ | | | $ | | | $ | | | $ | |
Off-Balance Sheet Arrangements
As of December 31, 2025, Adtalem had $
As of December 31, 2025, Adtalem had posted $
Interest Expense
Interest expense consisted of the following (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Notes interest expense | | $ | | | $ | | | $ | | | $ | |
Term Loan B interest expense | | | | | | | | | | | | |
Revolver interest expense | | | | | | | | | | | | |
Term Loan B debt discount and issuance costs write-off | | | | | | | | | | | | |
Revolver debt issuance costs write-off | | | | | | | | | | | | |
Amortization of debt discount and issuance costs | | | | | | | | | | | | |
Letters of credit fees | | | | | | | | | | | | |
Other | | | | | | | | | | | | |
Total | | $ | | | $ | | | $ | | | $ | |
Covenants and Guarantees
The Credit Agreement and Notes contain customary covenants, including restrictions on our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interest on assets, make
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acquisitions, loans, advances or investments, or sell or otherwise transfer assets. Obligations under the Credit Agreement are secured by a first-priority lien on substantially all of the assets of Adtalem and certain of its domestic wholly-owned subsidiaries. The Credit Agreement contains customary events of default for facilities of this type. If an event of default under the Credit Agreement occurs and is continuing, the commitments thereunder may be terminated and the principal amount outstanding thereunder, together with all accrued and unpaid interest and other amounts owed thereunder, may be declared immediately due and payable.
Under the terms of the Credit Agreement, Adtalem is required to maintain a Total Net Leverage Ratio (as defined in the Credit Agreement) of equal to or less than
14. Share Repurchases
On January 19, 2024, we announced that the Board of Directors (the “Board”) authorized Adtalem’s fourteenth share repurchase program, which allowed Adtalem to repurchase up to $
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Total number of share repurchases | | | | | | | | | | | | |
Total cost of share repurchases | | $ | | | $ | | | $ | | | $ | |
Average price paid per share | | $ | | | $ | | | $ | | | $ | |
As of December 31, 2025, $
15. Stock-Based Compensation
Adtalem’s current stock-based incentive plan is its Fourth Amended and Restated Incentive Plan of 2013, which is administered by the Compensation Committee of the Board. Under the plan, employees and Board members are eligible to receive stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), and other forms of stock awards. As of December 31, 2025,
Stock-based compensation expense is recognized on a straight-line basis over the requisite service period. We account for forfeitures of unvested awards in the period they occur. Adtalem issues new shares of common stock to satisfy stock option exercises, RSU vests, and PSU vests. Stock-based compensation expense is included in student services and administrative expense in the Consolidated Statements of Income. There was
Stock Options
Beginning in fiscal year 2023, the Compensation Committee of the Board determined to no longer grant stock options. Prior to fiscal year 2023, we granted stock options generally with a
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| | | | | | | | | | |
| | | | | | Weighted-Average | | | ||
| | Number of | | | | Remaining | | Aggregate | ||
| | Stock | | Weighted-Average | | Contractual Life | | Intrinsic Value | ||
| | Options | | Exercise Price | | (in years) | | (in thousands) | ||
Outstanding as of June 30, 2025 |
| | | $ | |
| | | | |
Exercised |
| ( | | | |
| | | | |
Outstanding as of December 31, 2025 |
| | |
| |
| | $ | | |
Exercisable as of December 31, 2025 |
| | | $ | |
| | $ | | |
The fair value of stock options that vested during the six months ended December 31, 2025 and 2024 was $
RSUs
We grant RSUs generally with a
| | | | | |
| | | | Weighted-Average | |
| | Number of | | Grant Date | |
| | RSUs | | Fair Value | |
Unvested as of June 30, 2025 |
| | | $ | |
Granted |
| | |
| |
Vested |
| ( | |
| |
Forfeited |
| ( | |
| |
Unvested as of December 31, 2025 |
| | | $ | |
The weighted-average grant date fair value per share of RSUs granted in the six months ended December 31, 2025 and 2024 was $
PSUs
We grant PSUs with an approximate
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that vest under our PSUs is based on metrics approved by the Compensation Committee of the Board.
| | | | | |
| | | | Weighted-Average | |
| | Number of | | Grant Date | |
| | PSUs | | Fair Value | |
Unvested as of June 30, 2025 |
| | | $ | |
Incremental PSUs granted based on achievement of metrics |
| | |
| |
Granted |
| | |
| |
Vested |
| ( | |
| |
Forfeited |
| ( | |
| |
Unvested as of December 31, 2025 |
| | | $ | |
The weighted-average grant date fair value per share of PSUs granted in the six months ended December 31, 2025 and 2024 was $
16. Fair Value Measurements
Fair value is defined under GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. The following fair value hierarchy prioritizes the inputs in valuation methodologies used to measure fair value:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 – Unobservable inputs for the asset or liability. These fair value measurements require significant judgment.
The valuation methodologies used for our assets and liabilities measured at fair value and their classification in the valuation hierarchy are described below.
The carrying value of our cash, cash equivalents, and restricted cash approximates fair value because of their short-term nature and is classified as Level 1.
Adtalem maintains a rabbi trust with investments in stock and bond mutual funds to fund obligations under our nonqualified deferred compensation plan. The fair value of the investments in the rabbi trust included in prepaid expenses and other current assets on the Consolidated Balance Sheets as of December 31, 2025 and June 30, 2025 was $
The carrying value of the credit extension programs, which approximates their fair value, is included in accounts and financing receivables, net and other assets, net on the Consolidated Balance Sheets as of December 31, 2025 and June 30, 2025 of $
Adtalem has a nonqualified deferred compensation plan for highly compensated employees and its Board members. The participant’s “investments” are in a hypothetical portfolio of investments which are tracked by an administrator. Changes in the fair value of the nonqualified deferred compensation obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. Total liabilities under the plan included in accrued liabilities on the Consolidated Balance Sheets as of December 31, 2025 and June 30, 2025 were $
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because its inputs are derived principally from observable market data by correlation to the hypothetical portfolio of investments.
As of both December 31, 2025 and June 30, 2025, the principal balance of our Notes was $
During the second quarter of fiscal year 2026, we made a $
Adtalem has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets, and assets of businesses where the long-term value of the operations are deemed to be impaired. Goodwill and indefinite-lived intangible assets are not amortized, but are reviewed for impairment annually or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2025. See Note 12 “Goodwill and Intangible Assets” for additional information on the impairment review, including valuation techniques and assumptions.
17. Commitments and Contingencies
Adtalem is subject to lawsuits, administrative proceedings, regulatory reviews, and investigations associated with financial assistance programs and other matters arising in the conduct of its business and certain of these matters are discussed below. Descriptions of certain matters from prior SEC filings may not be carried forward in this report to the extent we believe such matters no longer are required to be disclosed or there has not been, to our knowledge, significant activity relating to them. As of December 31, 2025, we adequately reserved for matters that management has determined a loss is probable and that loss 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. The continued defense, resolution, or settlement of any of the following matters could require us to expend significant resources and could have a material adverse effect on our business, financial condition, results of operations, and cash flows, and result in the imposition of significant restrictions on us and our ability to operate.
As previously disclosed, pursuant to the terms of the Stock Purchase Agreement (“SPA”) by and between Adtalem and Cogswell, dated as of December 4, 2017, as amended, Adtalem sold DeVry University to Cogswell and Adtalem agreed to indemnify DeVry University for certain losses up to $
In late January 2024 and early February 2024, ED sent notices to Chamberlain, RUSM, RUSVM, and Walden that it had received Borrower Defense to Repayment (“BDR”) applications filed by students between June 23, 2022 and November 15, 2022, which ED subsequently sent to each institution for awareness and optional response. Without a similar notice, in June 2025, AUC also received BDR claims that had been filed during the same 2022 timeframe. Each application seeks forgiveness of federal student loans made to these students. In the notices received, ED indicated that: (1) the notification was occurring prior to any substantive review of the application as well as its adjudication; (2) it would send the applications to each institution in batches of
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to all applications received; they believe that none properly stated an eligible claim for loan forgiveness. To date, none of Adtalem’s institutions have received an ED notice of BDR application approvals or recoupment intent.
18. Segment Information
We present
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.
These segments are consistent with the method by which Adtalem’s Chief Operating Decision Maker (“CODM”) evaluates performance and allocates resources. Adtalem’s CODM is our Chief Executive Officer. Our measure of segment profitability utilized by our CODM is adjusted operating income. Our CODM uses this measure to assess the operating results and performance of our segments, perform analytical comparisons to budget, and allocate resources to each segment during monthly operating reviews and annual budget process. Adjusted operating income excludes Home Office expense, restructuring expense, amortization of acquired intangible assets, litigation reserve, strategic advisory costs, and debt modification costs because these are not associated with the ongoing operations of the segments. “Home Office” includes activities not allocated to a reportable segment and is included to reconcile segment results to the Consolidated Financial Statements. Total assets by segment are not presented as our CODM does not review or allocate resources based on segment assets. The accounting policies of the segments are the same as those described in Note 2 “Summary of Significant Accounting Policies.”
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Summary financial information by reportable segment is as follows (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Revenue: |
| | |
| | |
| | |
| | |
Chamberlain | | $ | | | $ | | | $ | | | $ | |
Walden | | | | | | | | | | | | |
Medical and Veterinary | | | | | | | | | | | | |
Total consolidated revenue | | $ | | | $ | | | $ | | | $ | |
Cost of educational services: | |
| | |
| | |
| | | | |
Chamberlain | | $ | | | $ | | | $ | | | $ | |
Walden | | | | | | | | | | | | |
Medical and Veterinary | | | | | | | | | | | | |
Other segment expenses(1): | |
| | |
| | |
| | | | |
Chamberlain | | $ | | | $ | | | $ | | | $ | |
Walden | | | | | | | | | | | | |
Medical and Veterinary | | | | | | | | | | | | |
Adjusted operating income: | |
| | |
| | |
| | | | |
Chamberlain | | $ | | | $ | | | $ | | | $ | |
Walden | | | | | | | | | | | | |
Medical and Veterinary | | | | | | | | | | | | |
Total segment adjusted operating income | | | | | | | | | | | | |
Reconciliation to Consolidated Financial Statements: | | | | | | | | | | | | |
Home Office expense | |
| ( | |
| ( | |
| ( | |
| ( |
Restructuring expense | |
| ( | |
| ( | |
| ( | |
| ( |
Amortization of acquired intangible assets | | | ( | |
| ( | | | ( | |
| ( |
Litigation reserve | | | — | |
| | | | — | |
| |
Strategic advisory costs | | | ( | | | — | | | ( | |
| — |
Debt modification costs | | | — | |
| — | | | — | |
| ( |
Total consolidated operating income | | | | | | | | | | | | |
Interest expense | |
| ( | |
| ( | |
| ( | |
| ( |
Other income, net | |
| | |
| | |
| | |
| |
Total consolidated income from continuing operations before income taxes | | $ | | | $ | | | $ | | | $ | |
Depreciation: | |
| | | | | |
| | | | |
Chamberlain | | $ | | | $ | | | $ | | | $ | |
Walden | | | | | | | | | | | | |
Medical and Veterinary | | | | | | | | | | | | |
Home Office | |
| | |
| | |
| | |
| |
Total consolidated depreciation | | $ | | | $ | | | $ | | | $ | |
Amortization of acquired intangible assets: | |
| | | | | |
| | | | |
Walden | | $ | | | $ | | | $ | | | $ | |
Total consolidated amortization of acquired intangible assets | | $ | | | $ | | | $ | | | $ | |
| (1) |
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Adtalem conducts its educational operations in the U.S., Barbados, St. Kitts, and St. Maarten.
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Revenue by geographic area: |
| | |
| | | | | | | | |
Domestic operations | | $ | | | $ | | | $ | | | $ | |
Barbados, St. Kitts, and St. Maarten | |
| | |
| | |
| | |
| |
Total consolidated revenue | | $ | | | $ | | | $ | | | $ | |
| | | | | | |
| | December 31, | | June 30, | ||
| | 2025 | | 2025 | ||
Long-lived assets by geographic area: |
| | | | | |
Domestic operations | | $ | | | $ | |
Barbados, St. Kitts, and St. Maarten | |
| | |
| |
Total consolidated long-lived assets | | $ | | | $ | |
No one customer accounted for more than 10% of Adtalem’s consolidated revenue for all periods presented.
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 the Cautionary Disclosure Regarding Forward-Looking Statements, the Risk Factors included in or incorporated by reference in this report (see Item 1A. “Risk Factors”), and the Financial Aid and Legislative and Regulatory Requirements disclosures set forth in this report. Adtalem reports on a fiscal year period ending on June 30. Therefore, this Quarterly Report for the quarterly period ended December 31, 2025 is for our second 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. The MD&A should be read in conjunction with the Consolidated Financial Statements and the notes thereto.
Available Information
We use our website (www.adtalem.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, investors should monitor our website in addition to following press releases, SEC filings, and public conference calls and webcasts. Investors and others 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 Adtalem’s reportable segments is presented in Note 18 “Segment Information” to the Consolidated Financial Statements.
Second Quarter Highlights
Financial and operational highlights for the second quarter of fiscal year 2026 include:
| ● | Adtalem revenue increased 12.4%, or $55.7 million, to $503.4 million in the second quarter of fiscal year 2026 compared to the prior year period driven by increased revenue across all of our segments. |
| ● | Net income increased 0.7%, or $0.5 million, to $76.4 million in the second quarter of fiscal year 2026 compared to the prior year period. This increase was primarily driven by an increase in revenue and a decrease in interest expense, partially offset by increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives. |
| ● | Diluted earnings per share increased 6.6%, or $0.13, to $2.11 in the second quarter of fiscal year 2026 compared to the prior year period driven by lower diluted shares due to share repurchases. |
| ● | Adjusted net income increased 26.7%, or $18.5 million, to $87.9 million in the second quarter of fiscal year 2026 compared to the prior year period. 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, and investments to support growth initiatives. |
| ● | Adjusted earnings per share increased 34.3%, or $0.62, to $2.43 in the second quarter of fiscal year 2026 compared to the prior year period driven by the increase in adjusted net income and lower diluted shares due to share repurchases. |
| ● | For the November 2025 session, total student enrollment at Chamberlain decreased 1.0% compared to the same session last year. |
| ● | As of December 31, 2025, total student enrollment at Walden increased 13.0% compared to December 31, 2024. |
| ● | Adtalem repurchased a total of 1,727,565 shares of its common stock under its share repurchase programs at an average cost of $95.45 per share during the second 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. |
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 commenced 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
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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 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 academic 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 and its implementing regulations are no greater than earnings of a population with a high school diploma, and a graduate or professional program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA and its implementing regulations 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. |
We continue to analyze the changes made by OBBBA, including the regulations being promulgated to implement it, 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.
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Results of Operations
Revenue
The following tables present revenue by segment detailing the changes from the prior year periods (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended December 31, 2025 |
| ||||||||||
| | Chamberlain |
| Walden |
| Medical and |
| Consolidated |
| ||||
Fiscal year 2025 | | $ | 180,986 | | $ | 171,306 | | $ | 95,437 | | $ | 447,729 | |
Growth | | | 2,846 | | | 46,256 | | | 6,554 | | | 55,656 | |
Fiscal year 2026 | | $ | 183,832 | | $ | 217,562 | | $ | 101,991 | | $ | 503,385 | |
% change from prior year | | | 1.6 | % | | 27.0 | % | | 6.9 | % | | 12.4 | % |
| | | | | | | | | | | | | |
| | Six Months Ended December 31, 2025 |
| ||||||||||
| | Chamberlain |
| Walden |
| Medical and |
| Consolidated |
| ||||
Fiscal year 2025 | | $ | 348,916 | | $ | 332,819 | | $ | 183,394 | | $ | 865,129 | |
Growth | | | 14,117 | | | 74,703 | | | 11,724 | | | 100,544 | |
Fiscal year 2026 | | $ | 363,033 | | $ | 407,522 | | $ | 195,118 | | $ | 965,673 | |
% change from prior year | | | 4.0 | % | | 22.4 | % | | 6.4 | % | | 11.6 | % |
Chamberlain
Chamberlain Student Enrollment:
| | | | | | | | | | | | | |
| | Fiscal Year 2026 | | | | | | | | ||||
Session | | July 2025 | | Sept. 2025 | | Nov. 2025 | | | | | | | |
Total students | | 37,697 | | 39,846 | | 39,278 | | | | | | | |
% change from prior year | | 4.5 | % | 2.2 | % | (1.0) | % | | | | | | |
| | | | | | | | | | | | | |
| | 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 1.6%, or $2.8 million, to $183.8 million in the second quarter and increased 4.0%, or $14.1 million, to $363.0 million in the first six months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment in the September session and higher tuition rates. Enrollment increased in pre-licensure nursing programs; however, this growth was offset by a decline in post-licensure nursing program enrollment. Chamberlain is achieving pre-licensure 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. Management is focused on optimizing marketing and enrollment operations to address post-licensure enrollment.
Tuition Rates:
Tuition rates in the current fiscal year increased compared to the prior fiscal year for the Bachelor of Science in Nursing (“BSN”) onsite and online degree, Master of Science in Nursing (“MSN”) online degree, and Doctor of Nursing Practice (“DNP”) degree programs. The average increase across all of these programs was approximately 4.6% from the prior year.
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Walden
Walden Student Enrollment:
| | | | | | | | | | ||
| | Fiscal Year 2026 | | | | | | ||||
| | Sept. 30, | | Dec. 31, | | | | | | ||
Period | | 2025 | | 2025 | | | | | | ||
Total students | | 52,216 | | 52,435 | | | | | | ||
% change from prior year | | 13.6 | % | 13.0 | % | | | | | ||
| | | | | | | | | | ||
| | Fiscal Year 2025 | | ||||||||
| | Sept. 30, | | Dec. 31, | | Mar. 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 | % | ||
Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 27.0%, or $46.3 million, to $217.6 million in the second quarter and increased 22.4%, or $74.7 million, to $407.5 million in the first six months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. In addition, Walden recognized one additional week of revenue during the second quarter of fiscal year 2026 compared to the prior year period due to the timing of its academic calendar. 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 2026 | | | | | | ||
Semester | | Sept. 2025 | | | | | | ||
Total students | | 5,297 | | | | | | ||
% change from prior year | | 2.4 | % | | | | | ||
| | | | | | | | ||
| | 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 | % | ||
Medical and Veterinary revenue increased 6.9%, or $6.6 million, to $102.0 million in the second quarter and increased 6.4%, or $11.7 million, to $195.1 million in the first six months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment and higher tuition rates. Management continues to focus on increasing enrollment and renewing operational effectiveness, specifically around academic support and the enrollment experience.
Tuition Rates:
| ● | Effective for semesters beginning in September 2025, tuition rates and administrative fees for the basic sciences and clinical rotation portions of AUC’s medical program increased 4.5% from the prior academic year. |
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| ● | Effective for semesters beginning in September 2025, tuition rates and administrative fees for the basic sciences and clinical rotation portions of RUSM’s medical program increased 4.5% and 4.6%, respectively, from the prior academic year. |
| ● | Effective for semesters beginning in September 2025, tuition rates for the pre-clinical and clinical curriculum of RUSVM’s veterinary program increased 3.0% 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 tables present cost of educational services by segment detailing the changes from the prior year periods (in thousands):
| | | | | | | | | | | | | |
| | Three Months Ended December 31, 2025 |
| ||||||||||
|
| Chamberlain |
| Walden |
| Medical and |
| Consolidated | | ||||
Fiscal year 2025 |
| $ | 77,317 | | $ | 57,713 |
| $ | 51,606 | | $ | 186,636 | |
Cost increase |
|
| 8,751 | |
| 9,020 |
|
| 1,018 | |
| 18,789 | |
Fiscal year 2026 |
| $ | 86,068 | | $ | 66,733 |
| $ | 52,624 | | $ | 205,425 | |
% change from prior year |
| | 11.3 | % |
| 15.6 | % | | 2.0 | % | | 10.1 | % |
| | | | | | | | | | | | | |
| | Six Months Ended December 31, 2025 |
| ||||||||||
|
| Chamberlain |
| Walden |
| Medical and |
| Consolidated | | ||||
Fiscal year 2025 |
| $ | 153,723 | | $ | 115,694 |
| $ | 103,214 | | $ | 372,631 | |
Cost increase |
|
| 15,543 | |
| 15,791 | |
| 2,227 | |
| 33,561 | |
Fiscal year 2026 |
| $ | 169,266 | | $ | 131,485 |
| $ | 105,441 | | $ | 406,192 | |
% change from prior year |
| | 10.1 | % |
| 13.6 | % | | 2.2 | % | | 9.0 | % |
Cost of educational services increased 10.1%, or $18.8 million, to $205.4 million in the second quarter and increased 9.0%, or $33.6 million, to $406.2 million in the first six months of fiscal year 2026 compared to the prior year periods. These cost increases were primarily driven by an increase in labor and other costs to support increased enrollment.
As a percentage of revenue, cost of educational services was 40.8% and 42.1% in the second quarter and first six months of fiscal year 2026, respectively, compared to 41.7% and 43.1% in the prior year periods. The decreases in the percentages were primarily the result of revenue growth accompanied by cost efficiencies.
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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 tables present student services and administrative expense by segment detailing the changes from the prior year periods (in thousands):
| | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, 2025 |
| |||||||||||||
|
| Chamberlain |
| Walden |
| Medical and |
| Home Office | | Consolidated | | |||||
Fiscal year 2025 | | $ | 61,366 | | $ | 64,695 | | $ | 22,312 | | $ | 8,528 | | $ | 156,901 | |
Cost increase | |
| 2,575 | |
| 4,929 | |
| 2,020 | |
| 2,706 | |
| 12,230 | |
Litigation reserve impact | | | — | | | 5,550 | | | — | | | — | | | 5,550 | |
Strategic advisory costs increase | | | — | | | — | | | — | | | 8,110 | | | 8,110 | |
Fiscal year 2026 | | $ | 63,941 | | $ | 75,174 | | $ | 24,332 | | $ | 19,344 | | $ | 182,791 | |
| | | | | | | | | | | | | | | | |
Fiscal year 2026 % change: | |
| | | | | |
| | | | | | | | |
Cost increase | | | 4.2 | % |
| 7.6 | % | | 9.1 | % |
| NM | | | 7.8 | % |
Litigation reserve impact | | | — | | | 8.6 | % | | — | | | NM | | | 3.5 | % |
Strategic advisory costs increase | | | — | | | — | | | — | | | NM | | | 5.2 | % |
Fiscal year 2026 % change | |
| 4.2 | % |
| 16.2 | % |
| 9.1 | % |
| NM | |
| 16.5 | % |
| | | | | | | | | | | | | | | | |
| | Six Months Ended December 31, 2025 |
| |||||||||||||
|
| Chamberlain |
| Walden |
| Medical and |
| Home Office | | Consolidated | | |||||
Fiscal year 2025 | | $ | 125,058 | | $ | 128,390 | | $ | 43,931 | | $ | 18,595 | | $ | 315,974 | |
Cost increase | |
| 9,278 | |
| 13,173 | |
| 3,939 | |
| 1,529 | |
| 27,919 | |
Litigation reserve impact | | | — | | | 5,550 | | | — | | | — | | | 5,550 | |
Strategic advisory costs increase | | | — | | | — | | | — | | | 9,794 | | | 9,794 | |
Debt modification costs decrease | | | — | | | — | | | — | | | (712) | | | (712) | |
Fiscal year 2026 | | $ | 134,336 | | $ | 147,113 | | $ | 47,870 | | $ | 29,206 | | $ | 358,525 | |
| | | | | | | | | | | | | | | | |
Fiscal year 2026 % change: | |
| | | | | |
| | | | | | | | |
Cost increase | | | 7.4 | % |
| 10.3 | % | | 9.0 | % |
| NM | | | 8.8 | % |
Litigation reserve impact | |
| — | |
| 4.3 | % |
| — | |
| NM | |
| 1.8 | % |
Strategic advisory costs increase | |
| — | |
| — | |
| — | |
| NM | |
| 3.1 | % |
Debt modification costs decrease | |
| — | |
| — | |
| — | |
| NM | |
| (0.2) | % |
Fiscal year 2026 % change | |
| 7.4 | % |
| 14.6 | % |
| 9.0 | % |
| NM | |
| 13.5 | % |
Student services and administrative expense increased 16.5%, or $25.9 million, to $182.8 million in the second quarter and increased 13.5%, or $42.6 million, to $358.5 million in the first six months of fiscal year 2026 compared to the prior year periods. After excluding litigation reserve and strategic advisory costs, student services and administrative expense increased 7.8%, or $12.2 million, in the second quarter of fiscal year 2026 compared to the prior year period. After excluding litigation reserve, strategic advisory costs, and debt modification costs, student services and administrative expense increased 8.8%, or $27.9 million, in the first six months of fiscal year 2026 compared to the prior year period. These increases were primarily driven by an increase in marketing expense and investments to support growth initiatives.
As a percentage of revenue, student services and administrative expense was 36.3% and 37.1% in the second quarter and first six months of fiscal year 2026, respectively, compared to 35.0% and 36.5% in the prior year periods. The increases in the percentages were primarily the result of an increase in strategic advisory costs in the current year period and a reduction in litigation reserves in the prior year period, partially offset by revenue growth in the current year period. The reduction in litigation reserves in fiscal year 2025 represented a $5.6 million receipt in the second quarter of fiscal year 2025 from a claim made for indemnification under the Membership Interest Purchase Agreement with Laureate Education, Inc.
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Restructuring Expense
Restructuring expense was $4.1 million and $4.4 million in the second quarter and first six months of fiscal year 2026, respectively, compared to $0.3 million and $2.4 million in the prior year periods. The increases in fiscal year 2026 were primarily driven by workforce reductions. In addition, we continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities.
Operating Income
The following table presents a reconciliation of operating income to adjusted operating income by segment (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||||||||||||||
| | December 31, | | December 31, | ||||||||||||||||||||
| | | | | | | | Increase/(Decrease) | | | | | | | | | Increase/(Decrease) | | ||||||
| | 2025 | | 2024 | | $ | | % | | | 2025 | | 2024 | | $ | | % | | ||||||
Chamberlain: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | $ | 31,998 | | $ | 42,226 | | $ | (10,228) | | (24.2) | % | | $ | 57,606 | | $ | 68,200 | | $ | (10,594) | | (15.5) | % |
Restructuring expense | | | 1,825 | | | 77 | | | 1,748 | | | | | | 1,825 | | | 1,935 | | | (110) | | | |
Adjusted operating income | | $ | 33,823 | | $ | 42,303 | | $ | (8,480) | | (20.0) | % | | $ | 59,431 | | $ | 70,135 | | $ | (10,704) | | (15.3) | % |
Operating margin | | | 17.4 | % | | 23.3 | % | | | | | | | | 15.9 | % | | 19.5 | % | | | | | |
Adjusted operating margin | | | 18.4 | % | | 23.4 | % | | | | | | | | 16.4 | % | | 20.1 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Walden: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | $ | 75,226 | | $ | 48,898 | | $ | 26,328 | | 53.8 | % | | $ | 128,495 | | $ | 88,735 | | $ | 39,760 | | 44.8 | % |
Restructuring expense | | | 429 | | | — | | | 429 | | | | | | 429 | | | — | | | 429 | | | |
Amortization of acquired intangible assets | | | 2,805 | | | 2,805 | | | — | | | | | | 5,610 | | | 5,610 | | | — | | | |
Litigation reserve | | | — | | | (5,550) | | | 5,550 | | | | | | — | | | (5,550) | | | 5,550 | | | |
Adjusted operating income | | $ | 78,460 | | $ | 46,153 | | $ | 32,307 | | 70.0 | % | | $ | 134,534 | | $ | 88,795 | | $ | 45,739 | | 51.5 | % |
Operating margin | | | 34.6 | % | | 28.5 | % | | | | | | | | 31.5 | % | | 26.7 | % | | | | | |
Adjusted operating margin | | | 36.1 | % | | 26.9 | % | | | | | | | | 33.0 | % | | 26.7 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Medical and Veterinary: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income | | $ | 24,599 | | $ | 21,463 | | $ | 3,136 | | 14.6 | % | | $ | 41,327 | | $ | 36,134 | | $ | 5,193 | | 14.4 | % |
Restructuring expense | | | 436 | | | 56 | | | 380 | | | | | | 480 | | | 115 | | | 365 | | | |
Adjusted operating income | | $ | 25,035 | | $ | 21,519 | | $ | 3,516 | | 16.3 | % | | $ | 41,807 | | $ | 36,249 | | $ | 5,558 | | 15.3 | % |
Operating margin | | | 24.1 | % | | 22.5 | % | | | | | | | | 21.2 | % | | 19.7 | % | | | | | |
Adjusted operating margin | | | 24.5 | % | | 22.5 | % | | | | | | | | 21.4 | % | | 19.8 | % | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Home Office: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating loss | | $ | (20,709) | | $ | (8,717) | | $ | (11,992) | | (137.6) | % | | $ | (30,837) | | $ | (18,961) | | $ | (11,876) | | (62.6) | % |
Restructuring expense | | | 1,365 | | | 189 | | | 1,176 | | | | | | 1,631 | | | 366 | | | 1,265 | | | |
Strategic advisory costs | | | 8,110 | | | — | | | 8,110 | | | | | | 9,794 | | | — | | | 9,794 | | | |
Debt modification costs | | | — | | | — | | | — | | | | | | — | | | 712 | | | (712) | | | |
Adjusted operating loss | | $ | (11,234) | | $ | (8,528) | | $ | (2,706) | | (31.7) | % | | $ | (19,412) | | $ | (17,883) | | $ | (1,529) | | (8.6) | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Adtalem Global Education: | | | | | | | | | | | | | | | | | | | | | | | | |
Operating income (GAAP) | | $ | 111,114 | | $ | 103,870 | | $ | 7,244 | | 7.0 | % | | $ | 196,591 | | $ | 174,108 | | $ | 22,483 | | 12.9 | % |
Restructuring expense | | | 4,055 | | | 322 | | | 3,733 | | | | | | 4,365 | | | 2,416 | | | 1,949 | | | |
Amortization of acquired intangible assets | | | 2,805 | | | 2,805 | | | — | | | | | | 5,610 | | | 5,610 | | | — | | | |
Litigation reserve | | | — | | | (5,550) | | | 5,550 | | | | | | — | | | (5,550) | | | 5,550 | | | |
Strategic advisory costs | | | 8,110 | | | — | | | 8,110 | | | | | | 9,794 | | | — | | | 9,794 | | | |
Debt modification costs | | | — | | | — | | | — | | | | | | — | | | 712 | | | (712) | | | |
Adjusted operating income (non-GAAP) | | $ | 126,084 | | $ | 101,447 | | $ | 24,637 | | 24.3 | % | | $ | 216,360 | | $ | 177,296 | | $ | 39,064 | | 22.0 | % |
Operating margin (GAAP) | | | 22.1 | % | | 23.2 | % | | | | | | | | 20.4 | % | | 20.1 | % | | | | | |
Adjusted operating margin (non-GAAP) | | | 25.0 | % | | 22.7 | % | | | | | | | | 22.4 | % | | 20.5 | % | | | | | |
Consolidated operating income increased 7.0%, or $7.2 million, to $111.1 million in the second quarter and increased 12.9%, or $22.5 million, to $196.6 million in the first six months of fiscal year 2026 compared to the prior year periods.
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The operating income increases in the second quarter and first six months of fiscal year 2026 were primarily driven by an increase in revenue, partially offset by a reduction in litigation reserves in the prior year period, and increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
Consolidated adjusted operating income increased 24.3%, or $24.6 million, to $126.1 million in the second quarter and increased 22.0%, or $39.1 million, to $216.4 million in the first six months of fiscal year 2026 compared to the prior year periods. The adjusted operating income increases in the second quarter and first six months of fiscal year 2026 were primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
Chamberlain
Segment adjusted operating income decreased 20.0%, or $8.5 million, to $33.8 million in the second quarter and decreased 15.3%, or $10.7 million, to $59.4 million in the first six months of fiscal year 2026 compared to the prior year periods. The adjusted operating income decreases in the second quarter and first six months of fiscal year 2026 were primarily driven by increases in labor and other costs of educational services, marketing expense, and investments to support growth initiatives, partially offset by an increase in revenue.
Walden
Segment adjusted operating income increased 70.0%, or $32.3 million, to $78.5 million in the second quarter and increased 51.5%, or $45.7 million, to $134.5 million in the first six months of fiscal year 2026 compared to the prior year periods. The adjusted operating income increases in the second quarter and first six months of fiscal year 2026 were primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
Medical and Veterinary
Segment adjusted operating income increased 16.3%, or $3.5 million, to $25.0 million in the second quarter and increased 15.3%, or $5.6 million, to $41.8 million in the first six months of fiscal year 2026 compared to the prior year periods. The adjusted operating income increases in the second quarter and first six months of fiscal year 2026 were primarily driven by an increase in revenue, partially offset by increases in investments to support initiatives to drive growth and investments in academic support.
Interest Expense
Interest expense was $10.9 million and $22.0 million in the second quarter and first six months of fiscal year 2026, respectively, compared to $13.9 million and $28.4 million in the prior year periods. The interest expense decreases in the second quarter and first six months of fiscal year 2026 were primarily driven by lower interest expense on our Term Loan B due to decreased borrowings and a lower interest rate, and lower outstanding letters of credit balances during the period (as discussed in Note 13 “Debt” to the Consolidated Financial Statements).
Other Income, Net
Other income, net was $1.7 million and $4.2 million in the second quarter and first six months of fiscal year 2026, respectively, compared to $2.2 million and $4.9 million in the prior year periods. These decreases were primarily driven by decreases in interest and dividend income, partially offset by higher investment gains.
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.
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Our effective tax rate from continuing operations was 25.2% and 23.2% in the second quarter and first six months of fiscal year 2026, respectively, and 22.8% and 22.0% in the second quarter and first six months of fiscal year 2025, respectively. The effective tax rate for the second quarter of fiscal year 2026 increased compared to the prior year period primarily due to an increase in the limitation of tax benefits on certain executive compensation, partially offset by a decrease in the percentage of earnings from operations in higher taxed jurisdictions. The effective tax rate for the first six months of fiscal year 2026 increased compared to the prior year period primarily due to an increase in the limitation of tax benefits on certain executive compensation, partially offset by a decrease in the percentage of earnings from operations in higher taxed jurisdictions and an increase in tax benefits on stock-based compensation.
In July 2025, OBBBA was signed into law, which introduced substantial changes to U.S. tax provisions. The most relevant provisions to Adtalem for fiscal year 2026 include allowing accelerated tax deductions for qualified property and research and development expenditures. The impacts of OBBBA were not material to the income tax provision for the second quarter and six months ended December 31, 2025.
Discontinued Operations
We had income from discontinued operations of $0.2 million and $1.0 million in the second quarter and first six months of fiscal year 2026, respectively, compared to $4.7 million and $4.6 million in the prior year periods. We recorded income within discontinued operations related to the DeVry University earn-out of $0.5 million and $7.0 million in the second quarter and first six months of fiscal year 2026 and 2025, 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.
Financial Aid
Like other higher education institutions, Adtalem’s institutions are dependent upon the timely receipt of federal financial aid funds. All public financial aid programs are subject to political and governmental budgetary considerations. Adtalem’s institutions and their students participate in a wide range of financial aid programs, including U.S. federal financial aid, state financial aid, Canadian financial aid, private loan programs, tax-favored programs, Adtalem-provided financial assistance, and employer-provided financial assistance. In the U.S., the Higher Education Act (as reauthorized, the “HEA”) guides the federal government’s support of postsecondary education. Changes to financial aid programs that restrict student eligibility or reduce funding levels could have a material adverse effect on Adtalem’s business, financial condition, results of operations, and cash flows. See Item 1A. “Risk Factors” in our 2025 Form 10-K for a discussion of student financial aid related risks.
Legislative and Regulatory Requirements
Government-funded financial assistance programs are governed by extensive and complex regulations in the U.S. Like any other educational institution, Adtalem’s institutions’ administration of these programs is periodically reviewed by regulatory agencies and is subject to audit or investigation by other authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding.
Financial Responsibility
Institutions must pass an ED financial responsibility test, also known as a “composite score,” to maintain eligibility to participate in Title IV aid programs. For Adtalem’s institutions, this test is calculated at the consolidated Adtalem level. Applying various financial elements from annual audited financial statements, the score is a composite of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A score greater than or equal to 1.5 indicates the institution is considered financially responsible. A score less than 1.5 but greater than or equal to 1.0 is considered financially responsible but requires additional oversight. For example, an institution with a score in this range is subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is not considered financially responsible but may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject
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to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year).
Prior to fiscal year 2022, Adtalem’s composite score was greater than 1.5. However, on September 25, 2023, ED notified Adtalem that its fiscal year 2022 composite score had declined to 0.2. As previously disclosed, this was expected due to the acquisition of Walden and other transactions. ED advised that Adtalem’s five institutions will be permitted to continue to participate in Title IV under provisional certifications with heightened cash monitoring and continued reporting. Management does not believe these conditions will have a material adverse effect on Adtalem’s operations. At ED’s request, Adtalem maintains three surety-backed letters of credit in favor of ED totaling $202.6 million representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2025. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.
The financial responsibility rules include other mandatory or discretionary triggers that could require an institution to post a letter of credit. ED recently amended the financial responsibility regulation and the changes took effect July 1, 2024. The changes include additional triggers which could require additional letters of credit.
Program Participation Agreement (“PPA”)
The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution participating in Title IV programs must be certified to participate through a PPA and certification must be periodically renewed. Such recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in control. Institutions that violate certain ED Title IV regulations may lose eligibility to participate in Title IV programs or may only continue participation under provisional certification. ED may place an institution on provisional certification status if it finds that the institution does not fully satisfy all of the eligibility and certification standards and in certain other circumstances, such as when an institution is certified for the first time or undergoes a change in control. During the period of provisional certification, the institution must comply with any additional conditions included in the institution’s PPA. In addition, ED may more closely review an institution that is provisionally certified if it applies for recertification or approval to open a new location, add an educational program, acquire another institution, or make any other significant change. Students attending provisionally certified institutions remain eligible to receive Title IV program funds. Provisional certification status also carries fewer due process protections than full certification. If ED determines that a provisionally certified institution is unable to meet its responsibilities under its PPA, it may seek to revoke the institution’s certification to participate in Title IV programs without advance notice or opportunity for the institution to challenge the action.
Chamberlain was most recently recertified and issued an unrestricted PPA in September 2020, with a reapplication date of June 30, 2024. The lengthy PPA recertification process is such that ED allows unhampered continued access to Title IV funding after PPA expiration, so long as materially complete applications are submitted at least 90 days in advance of expiration. A complete application for Chamberlain’s PPA recertification was timely submitted to ED.
ED provisionally recertified Walden’s Title IV PPA through December 31, 2028.
ED provisionally recertified AUC and RUSM’s Title IV PPAs through March 31, 2025. Materially complete applications for AUC and RUSM’s PPA recertification were timely submitted to ED. ED has provisionally recertified RUSVM’s Title IV PPA through March 31, 2027.
The provisional nature of the PPAs stemmed from Adtalem’s composite score declining and failing to meet ED’s standards of financial responsibility as described above.
Walden, AUC, RUSM, and RUSVM’s provisional PPAs included financial requirements, such as letter of credit and heightened cash monitoring, and AUC, RUSM, and RUSVM’s provisional PPAs require additional reporting. We do not believe these requirements will have a material effect on Adtalem’s financial condition or results of operations. With the approval of its change in ownership, Walden has the ability to request ED approval for new programs.
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Gainful Employment
The HEA requires certificate programs at all Title IV institutions and degree programs at proprietary Title IV institutions to prepare students for gainful employment in a recognized occupation. In October 2023, ED released new Financial Value Transparency (“FVT”) and Gainful Employment (“GE”) rules effective July 1, 2024. GE programs must meet a debt-to-earnings test in which graduates’ annual debt payments must not exceed 8% of their annual earnings or 20% of their discretionary earnings. GE programs must also meet an earnings premium test in which graduates’ earnings must exceed those of a typical high school graduate. Under the regulation, programs that fail either metric must provide warnings to students and prospective students that the program is at risk of losing Title IV eligibility and programs that fail the same measure in two out of three consecutive years lose Title IV eligibility. The GE regulation also includes a transparency framework in which debt-to-earnings, earnings premium, and a wide range of other program outcomes for all Title IV programs are disclosed on a website hosted by ED. Because there are many factors and unknowns, including the earnings of program graduates, Adtalem is reviewing the regulation to determine what impact, if any, the regulation will have on its programs. In addition, multiple parties sought to block enforcement of the FVT/GE rule under the Administrative Procedure Act and other legal theories. On October 2, 2025, a federal district judge ruled in ED’s favor, upholding the FVT/GE rules. The decision is subject to appeal. On February 14, 2025, ED extended the institutional reporting deadline for 2023-2024 and earlier award years until September 30, 2025. The reporting deadline for the 2024-2025 award year was October 1, 2025. On July 25, 2025, ED announced its intent to establish negotiated rulemaking committees in advance of issuing draft regulations on various topics, including FVT/GE. The negotiating committee addressing FVT/GE met in December 2025 and January 2026. ED’s initial proposal includes amendments to the FVT/GE rules including elimination of debt to earnings.
Do No Harm
The recently enacted Do No Harm provisions of OBBBA provide 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 or professional program may lose Title IV eligibility if the earnings of a programmatic cohort of its completers as defined in OBBBA and its implementing regulations 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. These provisions are applicable to all Title IV participating institutions. Regulations to define how Do No Harm will be implemented, including the definition of completer, the populations to be used to measure the difference between earnings of completers and earnings of others, have yet to be promulgated. On July 25, 2025, ED announced its intent to establish negotiated rulemaking committees to implement Do No Harm and other provisions of OBBBA. The negotiating committee met in December 2025 and January 2026.
The 90/10 Rule
An ED regulation known as the 90/10 Rule affects only proprietary institutions participating in Title IV programs, including each of Adtalem’s institutions. Under this regulation, an institution that derives more than 90% of its revenue on a cash basis from Title IV student financial assistance programs in two consecutive fiscal years loses eligibility to participate in Title IV programs. The following table shows the 90/10 rates for each Adtalem institution for fiscal year 2025 and fiscal year 2024. We are also providing a consolidated rate for Adtalem even though it is not subject to 90/10 requirements.
| | | | | | ||
| | Fiscal Year |
| ||||
| | 2025 | | 2024 |
| ||
Chamberlain University |
| 70 | % | 68 | % | ||
Walden University |
| 82 | % | 82 | % | ||
American University of the Caribbean School of Medicine |
| 86 | % | 87 | % | ||
Ross University School of Medicine |
| 86 | % | 87 | % | ||
Ross University School of Veterinary Medicine |
| 77 | % | 78 | % | ||
Consolidated |
| 78 | % | 77 | % | ||
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Borrower Defense to Repayment
Under the HEA, ED is authorized to specify acts or omissions of an institution that a borrower may assert as a Borrower Defense to Repayment (“BDR”) of their Title IV loans made under the Federal Direct Loan Program. The 2022 BDR regulations were scheduled to go into effect on July 1, 2023 that included a lower threshold for establishing misrepresentation, no statute of limitation for claims submission, expanded reasons to file a claim including aggressive or deceptive recruitment tactics and omission of fact, weakened due processes afforded to institutions, and reinstated provisions for group discharges. ED also included a six-year statute of limitations for recovery of funds from institutions. These changes would increase financial liability risk and reputational risk for Adtalem. However, the updated rules were delayed by litigation from another party and the July 2025 enactment of OBBBA restored the 2019 BDR regulations and delayed the 2022 regulations until July 1, 2035. Consequently, on August 8, 2025, the parties in the litigation dismissed the appeal of the preliminary injunction order, returning the merits of the case to the district court.
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 $56.3 million and $199.6 million as of December 31, 2025 and June 30, 2025, respectively, included cash and cash equivalents held at Adtalem’s international operations of $5.7 million and $22.9 million as of December 31, 2025 and June 30, 2025, 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 the six months ended December 31, 2025 increased $94.2 million to $160.1 million, compared to $66.0 million in the prior year period. This increase was primarily driven by a $81.0 million increase in cash collected from students, a $22.9 million decrease in net legal settlement payments, and a $9.2 million decrease in interest payments, partially offset by a $11.7 million increase in payments to employees and vendors and a $6.2 million increase in income tax payments.
Investing Activities
Net cash used in investing activities in the six months ended December 31, 2025 and 2024 was $35.6 million and $20.2 million, respectively, and was primarily driven by capital expenditures of $30.6 million and $21.1 million, respectively. In addition, during the six months ended December 31, 2025 we made a $5.0 million minority investment in a business. Capital expenditures for fiscal year 2026 are expected to include information technology investments and new campus development at Chamberlain.
Financing Activities
Net cash used in financing activities in the six months ended December 31, 2025 was $267.2 million, primarily driven by share repurchases of $172.4 million, net repayments under long-term debt obligations of $50.0 million, and employee taxes paid on withholding shares of $42.0 million. Net cash used in financing activities in the six months ended December 31, 2024 was $75.9 million, primarily driven by share repurchases of $74.1 million.
On December 15, 2025, we announced that the Board authorized Adtalem’s sixteenth share repurchase program, which allows Adtalem to repurchase up to $750.0 million of its common stock through December 15, 2028. As of December 31,
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2025, $727.5 million of authorized share repurchases remained under the sixteenth 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 for additional information on our share repurchase programs.
Material Cash Requirements
Long-Term Debt – As of December 31, 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 $103.3 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 for additional information on the Notes and our Credit Facility.
As of December 31, 2025, Adtalem had $202.6 million of letters of credit outstanding in favor of ED. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.
As of December 31, 2025, Adtalem had posted $74.9 million of surety bonds to satisfy certain state regulatory requirements for licensure.
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 $500.0 million revolving credit facility with availability of $500.0 million as of December 31, 2025.
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 for additional information on our lease obligations.
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.
We have engaged in and continue to engage in the review and planning of strategic alternatives to refinance or otherwise optimize our capital structure, which alternatives may include issuing debt, equity or other securities, or entering into new credit facilities. This review and planning could result in our pursuing one or more significant corporate transactions. There can be no assurance as to when or whether we will determine to pursue any such transaction, whether any such transaction will be successful, or the effects the failure to undertake any such transaction may have on our business, including our ability to achieve our operational, strategic, and financial goals.
Critical Accounting Estimates
There have been no material changes in our critical accounting estimates as disclosed in our 2025 Form 10-K.
Recent Accounting Pronouncements
For information regarding recent accounting pronouncements, see Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements.
Cautionary Disclosure Regarding Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements generally can be identified by
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the use of forward-looking terminology such as “future,” “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “potential,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our 2025 Form 10-K and that might be contained in this Quarterly Report on Form 10-Q, which should be read in conjunction with the forward-looking statements in this Quarterly Report on Form 10-Q. You should evaluate forward-looking statements in the context of these risks and uncertainties and are cautioned to not place undue reliance on such forward-looking statements. We caution you that these factors may not contain all of the factors that are important to you. We cannot assure you that we will realize the results, performance or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. All forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
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 Quarterly Report on Form 10-Q:
Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, write-off of debt discount and issuance costs, litigation reserve, debt modification costs, and income 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, amortization of acquired intangible assets, strategic advisory costs, write-off of debt discount and issuance costs, litigation reserve, debt modification costs, and income from discontinued operations.
Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, amortization of acquired intangible assets, litigation reserve, strategic advisory costs, and debt modification costs.
Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for income 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, litigation reserve, strategic advisory costs, 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. |
| ● | Amortization of acquired intangible assets. |
| ● | Amortization of cloud computing implementation assets. |
| ● | 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. |
| ● | Reserves related to significant litigation. |
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| ● | Write-off of debt discount and issuance costs related to prepayments of debt and the amendment of the revolving loan facility. |
| ● | Debt modification costs related to refinancing our Term Loan B loan. |
| ● | Income 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.
Net income reconciliation to adjusted net income (in thousands):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Net income (GAAP) | | $ | 76,376 | | $ | 75,856 | | $ | 138,208 | | $ | 122,021 |
Restructuring expense | | | 4,055 | | | 322 | | | 4,365 | | | 2,416 |
Amortization of acquired intangible assets | | | 2,805 | | | 2,805 | | | 5,610 | | | 5,610 |
Strategic advisory costs | | | 8,110 | | | — | | | 9,794 | | | — |
Write-off of debt discount and issuance costs, litigation reserve, and debt modification costs | | | 687 | | | (5,550) | | | 982 | | | (4,838) |
Income tax impact on non-GAAP adjustments (1) | | | (3,922) | | | 645 | | | (5,146) | | | (687) |
Income from discontinued operations | | | (205) | | | (4,680) | | | (975) | | | (4,600) |
Adjusted net income (non-GAAP) | | $ | 87,906 | | $ | 69,398 | | $ | 152,838 | | $ | 119,922 |
| (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):
| | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | ||||||||
| | December 31, | | December 31, | ||||||||
| | 2025 | | 2024 | | 2025 | | 2024 | ||||
Diluted earnings per share (GAAP) | | $ | 2.11 | | $ | 1.98 | | $ | 3.77 | | $ | 3.15 |
Effect on diluted earnings per share: | | | | | | | | | | | | |
Restructuring expense | | | 0.11 | | | 0.01 | | | 0.12 | | | 0.06 |
Amortization of acquired intangible assets | | | 0.08 | | | 0.07 | | | 0.15 | | | 0.14 |
Strategic advisory costs | | | 0.22 | | | - | | | 0.27 | | | - |
Write-off of debt discount and issuance costs, litigation reserve, and debt modification costs | | | 0.02 | | | (0.14) | | | 0.03 | | | (0.12) |
Income tax impact on non-GAAP adjustments (1) | | | (0.11) | | | 0.02 | | | (0.14) | | | (0.02) |
Income from discontinued operations | | | (0.01) | | | (0.12) | | | (0.03) | | | (0.12) |
Adjusted earnings per share (non-GAAP) | | $ | 2.43 | | $ | 1.81 | | $ | 4.17 | | $ | 3.09 |
Diluted shares | | | 36,230 | | | 38,401 | | | 36,644 | | | 38,755 |
| (1) | Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements. |
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Reconciliation to adjusted EBITDA (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
| | Three Months Ended | | Six Months Ended | |||||||||||||||||||||||||||||||||||
| | December 31, | | December 31, | |||||||||||||||||||||||||||||||||||
| | | | | | | | Increase/(Decrease) | | | | | | | | | Increase/(Decrease) | | |||||||||||||||||||||
| | 2025 | | 2024 | | $ | | % | | | 2025 | | 2024 | | $ | | % | | |||||||||||||||||||||
Chamberlain: | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Adjusted operating income (GAAP) | | $ | 33,823 | | $ | 42,303 | | $ | (8,480) | | (20.0) | % | | $ | 59,431 | | $ | 70,135 | | $ | (10,704) | | (15.3) | % | |||||||||||||||
Depreciation | | | 5,706 | | | 5,466 | | | 240 | | | | | | 11,081 | | | 10,834 | | | 247 | | | | |||||||||||||||
Amortization of cloud computing implementation assets | | | 2,020 | | | 815 | | | 1,205 | | | | | | 3,547 | | | 1,467 | | | 2,080 | | | | |||||||||||||||
Stock-based compensation | | | 3,674 | | | 3,993 | | | (319) | | | | | | 6,244 | | | 7,112 | | | (868) | | | | |||||||||||||||
Adjusted EBITDA (non-GAAP) | | $ | 45,223 | | $ | 52,577 | | $ | (7,354) | | (14.0) | % | | $ | 80,303 | | $ | 89,548 | | $ | (9,245) | | (10.3) | % | |||||||||||||||
Adjusted EBITDA margin (non-GAAP) | | | 24.6 | % | | 29.1 | % | | | | | | | | 22.1 | % | | 25.7 | % | | | | | | |||||||||||||||
Walden: | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Adjusted operating income (GAAP) | | $ | 78,460 | | $ | 46,153 | | $ | 32,307 | | 70.0 | % | | $ | 134,534 | | $ | 88,795 | | $ | 45,739 | | 51.5 | % | |||||||||||||||
Depreciation | | | 2,074 | | | 1,795 | | | 279 | | | | | | 4,014 | | | 3,477 | | | 537 | | | | |||||||||||||||
Amortization of cloud computing implementation assets | | | 1,901 | | | 778 | | | 1,123 | | | | | | 3,105 | | | 1,479 | | | 1,626 | | | | |||||||||||||||
Stock-based compensation | | | 4,237 | | | 3,326 | | | 911 | | | | | | 6,890 | | | 6,066 | | | 824 | | | | |||||||||||||||
Adjusted EBITDA (non-GAAP) | | $ | 86,672 | | $ | 52,052 | | $ | 34,620 | | 66.5 | % | | $ | 148,543 | | $ | 99,817 | | $ | 48,726 | | 48.8 | % | |||||||||||||||
Adjusted EBITDA margin (non-GAAP) | | | 39.8 | % | | 30.4 | % | | | | | | | | 36.5 | % | | 30.0 | % | | | | | | |||||||||||||||
Medical and Veterinary: | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Adjusted operating income (GAAP) | | $ | 25,035 | | $ | 21,519 | | $ | 3,516 | | 16.3 | % | | $ | 41,807 | | $ | 36,249 | | $ | 5,558 | | 15.3 | % | |||||||||||||||
Depreciation | | | 3,007 | | | 2,744 | | | 263 | | | | | | 5,827 | | | 5,313 | | | 514 | | | | |||||||||||||||
Amortization of cloud computing implementation assets | | | 705 | | | 315 | | | 390 | | | | | | 1,116 | | | 598 | | | 518 | | | | |||||||||||||||
Stock-based compensation | | | 2,682 | | | 2,158 | | | 524 | | | | | | 4,092 | | | 3,765 | | | 327 | | | | |||||||||||||||
Adjusted EBITDA (non-GAAP) | | $ | 31,429 | | $ | 26,736 | | $ | 4,693 | | 17.6 | % | | $ | 52,842 | | $ | 45,925 | | $ | 6,917 | | 15.1 | % | |||||||||||||||
Adjusted EBITDA margin (non-GAAP) | | | 30.8 | % | | 28.0 | % | | | | | | | | 27.1 | % | | 25.0 | % | | | | | | |||||||||||||||
Home Office: | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Adjusted operating loss | | $ | (11,234) | | $ | (8,528) | | $ | (2,706) | | (31.7) | % | | $ | (19,412) | | $ | (17,883) | | $ | (1,529) | | (8.6) | % | |||||||||||||||
Depreciation | | | 167 | | | 185 | | | (18) | | | | | | 328 | | | 369 | | | (41) | | | | |||||||||||||||
Stock-based compensation | | | 2,646 | | | 1,990 | | | 656 | | | | | | 4,306 | | | 3,975 | | | 331 | | | | |||||||||||||||
Adjusted EBITDA | | $ | (8,421) | | $ | (6,353) | | $ | (2,068) | | (32.6) | % | | $ | (14,778) | | $ | (13,539) | | $ | (1,239) | | (9.2) | % | |||||||||||||||
Adtalem Global Education: | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||
Net income (GAAP) | | $ | 76,376 | | $ | 75,856 | | $ | 520 | | 0.7 | % | | $ | 138,208 | | $ | 122,021 | | $ | 16,187 | | 13.3 | % | |||||||||||||||
Income from discontinued operations | | | (205) | | | (4,680) | | | 4,475 | | | | | | (975) | | | (4,600) | | | 3,625 | | | | |||||||||||||||
Interest expense | | | 10,917 | | | 13,909 | | | (2,992) | | | | | | 22,007 | | | 28,391 | | | (6,384) | | | | |||||||||||||||
Other income, net | | | (1,704) | | | (2,235) | | | 531 | | | | | | (4,190) | | | (4,881) | | | 691 | | | | |||||||||||||||
Provision for income taxes | | | 25,730 | | | 21,020 | | | 4,710 | | | | | | 41,541 | | | 33,177 | | | 8,364 | | | | |||||||||||||||
Depreciation and amortization | | | 18,385 | | | 14,903 | | | 3,482 | | | | | | 34,628 | | | 29,147 | | | 5,481 | | | | |||||||||||||||
Stock-based compensation | | | 13,239 | | | 11,467 | | | 1,772 | | | | | | 21,532 | | | 20,918 | | | 614 | | | | |||||||||||||||
Restructuring expense | | | 4,055 | | | 322 | | | 3,733 | | | | | | 4,365 | | | 2,416 | | | 1,949 | | | | |||||||||||||||
Litigation reserve | | | — | | | (5,550) | | | 5,550 | | | | | | — | | | (5,550) | | | 5,550 | | | | |||||||||||||||
Strategic advisory costs | | | 8,110 | | | — | | | 8,110 | | | | | | 9,794 | | | — | | | 9,794 | | | | |||||||||||||||
Debt modification costs | | | — | | | — | | | — | | | | | | — | | | 712 | | | (712) | | | | |||||||||||||||
Adjusted EBITDA (non-GAAP) | | $ | 154,903 | | $ | 125,012 | | $ | 29,891 | | 23.9 | % | | $ | 266,910 | | $ | 221,751 | | $ | 45,159 | | 20.4 | % | |||||||||||||||
Adjusted EBITDA margin (non-GAAP) | | | 30.8 | % | | 27.9 | % | | | | | | | | 27.6 | % | | 25.6 | % | | | | | | |||||||||||||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in Adtalem’s market risk exposure during the first six months of fiscal year 2026 from those set forth in Item 7A. “Quantitative and Qualitative Disclosures About Market Risk” contained in our 2025 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on an evaluation of our disclosure controls and procedures (as such term is defined in Exchange Act Rule 13a-15(e)) that was conducted under the supervision and with the participation of Adtalem’s management, including our Chief
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Executive Officer and Chief Financial Officer, our Chief Executive Officer and Chief Financial Officer concluded that Adtalem’s disclosure controls and procedures were effective as of December 31, 2025.
Changes in Internal Control over Financial Reporting
There were no changes during the second quarter of fiscal year 2026 in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
Part II. Other Information
Item 1. Legal Proceedings
For information regarding legal proceedings, see Note 17 “Commitments and Contingencies” to the Consolidated Financial Statements included in Item 1. “Financial Statements.”
Item 1A. Risk Factors
There have been no material changes to Adtalem’s risk factors from those set forth since Item 1A. “Risk Factors” contained in our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
The table below reflects shares of common stock we repurchased during the second quarter of the fiscal year ended June 30, 2026.
| | | | | | | | | | |
Period | | Total Number of Shares Purchased | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||
October 1, 2025 - October 31, 2025 | | 13,959 | | $ | 100.27 | | 13,959 | | $ | 141,006,386 |
November 1, 2025 - November 30, 2025 | | 905,602 | | $ | 94.31 | | 905,602 | | $ | 55,602,868 |
December 1, 2025 - December 31, 2025 | | 808,004 | | $ | 96.66 | | 808,004 | | $ | 727,502,227 |
Total | | 1,727,565 | | $ | 95.45 | | 1,727,565 | | | |
(1) | See Note 14 “Share Repurchases” to the Consolidated Financial Statements for additional information on our share repurchase programs. |
Other Purchases of Equity Securities
| | | | | | | | | |
Period | | Total Number of Shares Purchased (1) | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |
October 1, 2025 - October 31, 2025 | | 1,469 | | $ | 148.62 | | NA | | NA |
November 1, 2025 - November 30, 2025 | | 27,551 | | $ | 96.10 | | NA | | NA |
December 1, 2025 - December 31, 2025 | | — | | $ | — | | NA | | NA |
Total | | 29,020 | | $ | 98.76 | | NA | | NA |
(1) | Represents shares purchased by Adtalem for payment of employee withholding taxes on stock awards vesting pursuant to the terms of Adtalem’s stock incentive plans. |
Item 5. Other Information
On
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On
On
On
On
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Item 6. Exhibits
| | |
10.1*, ** | | Form of Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2026) |
10.2*, ** | | Form of Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2026) |
10.3*, ** | | Form of Performance-Based Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2026) |
10.4*, ** | | Form of Performance-Based Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2026) |
19.2** | | Insider Sales and Ownership Policy Addendum |
31.1** | | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended |
31.2** | | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended |
32.1** | | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
101.INS | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Designates management contracts and compensatory plans or arrangements.
** Filed or furnished herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | |
| Adtalem Global Education Inc. | |
| | |
Date: January 28, 2026 | By: | /s/ Robert J. Phelan |
| | Robert J. Phelan |
| | Senior Vice President and Chief Financial Officer |
| | (Principal Financial Officer) |
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FAQ
How did Adtalem (ATGE) perform financially in the quarter ended December 31, 2025?
What were Adtalem (ATGE) results for the first six months of fiscal 2026?
Which segments drove Adtalem (ATGE) revenue growth this quarter?
How much debt does Adtalem (ATGE) have and what are its key facilities?
What share repurchase activity did Adtalem (ATGE) report for the quarter and year‑to‑date?
What was Adtalem (ATGE) operating cash flow for the first half of fiscal 2026?
