Laureate Education delivered a robust third-quarter performance, eliciting a positive market reaction driven by the company’s 8.6% revenue growth and improvements in key operational margins. Management attributes this strong performance to significant growth in enrollment, particularly within Peru’s burgeoning market for fully online working adult programs, alongside steady gains in primary intake within Mexico, excluding the impact of temporary campus closures. CEO Eilif Serck-Hanssen emphasized the strategic importance of ongoing campus expansions and the continued development of digital offerings, stating, “We have a very strong value proposition, which works well in the premium segment, in the value segment as well as a very rapid increase in demand for fully online working adult products.”
The company’s third-quarter results revealed key financial highlights. Revenue reached $400.2 million, exceeding analyst estimates of $385.9 million, representing an 8.6% year-over-year increase. Adjusted earnings per share (EPS) amounted to $0.25, surpassing analyst expectations of $0.23, reflecting an 8.7% beat. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled $94.8 million, surpassing estimates of $86.86 million, with a robust 23.7% margin, marking a 9.1% improvement. Furthermore, the company revised its full-year revenue guidance up to $1.68 billion at the midpoint, an increase of 3.8% compared to the previously projected $1.62 billion. The projected EBITDA for the full year stands at $510 million at the midpoint, outperforming analyst estimates of $494.2 million. Operating margin for the quarter was reported at 17.9%, a slight decrease from the 19.5% recorded in the same period last year. As of the end of the third quarter, Laureate Education enrolled a total of 511,400 students, representing a year-over-year increase of 28,100. The company’s market capitalization currently sits at $4.53 billion.
During the earnings call, analysts probed management for specific details regarding the drivers behind the company’s success. Ryan (BMO Capital Markets) sought clarification on the revenue strength observed in Peru, specifically concerning currency dynamics and enrollment patterns. CEO Eilif Serck-Hanssen explained that improved market sentiment, a recovery from recent economic recessionary pressures, and growing demand for digital learning solutions were the primary factors supporting revenue growth. Ryan (BMO Capital Markets) followed up by requesting deeper insight into Mexican enrollment trends, differentiating between face-to-face and fully online working adult program segments. Serck-Hanssen clarified that the third-quarter enrollment gains were largely driven by undergraduate students pursuing traditional on-campus programs, with momentum in the working adult segment concentrated in earlier enrollment cycles. Lucas Nagano (Morgan Stanley) inquired about the contribution of newly launched campus locations to overall Mexican enrollment growth, and Serck-Hanssen detailed that one percentage point of the 4% overall growth was attributable to the opening of its new campuses. Lucas Nagano (Morgan Stanley) additionally explored the impact of a shift towards a higher proportion of online programs on average revenue per student within Peru. CFO Rick Buskirk responded that the prevalence of online programs could reduce average revenue by up to 2% due to the inherent cost structure of online learning, though inflation-indexed pricing remains in place for programs delivered on-campus. No additional questions were recorded from analysts during the call.
Looking ahead, the StockStory team intends to closely monitor several key developments in the coming quarters. These include the pace of adoption and revenue generation from fully online working adult programs in Peru, the execution and enrollment trends observed at both existing and planned campus locations, and the ongoing influence of broader macroeconomic conditions – specifically within Mexico and Peru – on student demand and pricing strategies. Management’s ability to maintain margin expansion while simultaneously scaling these growth initiatives will also be a key focus of observation. As of today’s trading, Laureate Education is trading at $31.35, representing a rise from the $28.87 level observed immediately prior to the release of these earnings results. The question remains: does this movement signify an opportunity for investors?
The StockStory team is actively tracking developments in the markets. Recently, significant stock market fluctuations, stemming from US-China trade tensions, triggered a decline in stock prices. However, strong bank earnings have spurred a subsequent rebound. Investors are advised to stay informed and consider opportunities presented by this dynamic market environment. To capitalize on these possibilities, the StockStory team has curated a list of “Top 6 Stocks for this Week,” emphasizing high-quality stocks with a proven track record of performance. This selective list includes stocks like Nvidia, which has generated a remarkable 1,545% return between March 2020 and March 2025, as well as under-the-radar companies such as Exlservice, which has delivered a five-year return of 354%. Finding the next big winner requires careful research and an informed investment strategy. StockStory is growing and expanding its equity analyst and marketing teams. The firm is seeking innovative individuals passionate about the markets and leveraging the capabilities of Artificial Intelligence. Interested candidates are encouraged to explore the open roles currently available.
