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Jun 30, 2020
Perdoceo Q2 2020 Earnings Report
Perdoceo's financial performance improved in Q2 2020. Revenue increased, operating income turned positive, and earnings per share showed a significant gain compared to the prior year quarter.
Key Takeaways
Perdoceo Education Corporation reported a strong second quarter with revenue increasing by 12.5% to $176.0 million. Operating income rose to $37.4 million, and earnings per diluted share reached $0.40. Enrollment growth contributed significantly to these positive results.
Revenue increased by 12.5% to $176.0 million, driven by growth in both universities.
Operating income increased to $37.4 million, a significant improvement from $0.2 million in the prior year quarter.
Earnings per diluted share was $0.40, compared to a loss per diluted share of $0.01 in the prior year quarter.
Total student enrollments increased by 20.1%, supported by new student enrollment growth at both universities.
Perdoceo
Perdoceo
Perdoceo Revenue by Segment
Revenue by Segment
CTU Revenue
CapyFin.comAIUS Revenue
CapyFin.com Forward Guidance
The Company is providing the following outlook, subject to the key assumptions identified below. The outlook reflects the Company’s expectation of achieving growth in new and total student enrollments at both universities for the full year 2020. Further, for the third quarter of 2020, the Company expects growth in new student enrollments as compared to the prior year quarter for both universities, with the number of AIU’s enrollment days for the third and fourth quarters of 2020 relatively comparable to the respective prior year periods.
Positive Outlook
- Prospective student interest in the Company’s programs remains consistent with recent experience
- Initiatives and investments in student-serving operations continue to positively impact enrollment trends
- No material changes in the current legal or regulatory environment, and excludes legal and regulatory liabilities and other related impacts which are not probable and estimable at this time, and any impact of new or proposed regulations, including the “borrower defense to repayment” regulations
- No significant operating impacts from the settlements with the U.S. Federal Trade Commission and state attorneys general or other legal or regulatory matters
- No significant operating or financial impacts from the COVID-19 pandemic beyond known costs which have been incorporated in the outlook
Challenges Ahead
- Operating income, which is the most directly comparable GAAP measure to adjusted operating income, and earnings per diluted share may not follow the same trends stated in the outlook above because of adjustments made for certain significant and non-cash items such as lease expenses for vacated space offset with any sublease income as well as depreciation, amortization, asset impairment charges, significant restructuring charges and significant legal settlements.
- The operating income, adjusted operating income, earnings per share, adjusted earnings per share and enrollment outlook provided above for 2020 are based on the following key assumptions and factors, among others
- earnings per diluted share outlook assumes an effective income tax rate of approximately 26% for the third quarter and the full year
- any future impact from the Company’s stock repurchase program is excluded
- actual results could differ materially from these estimates. In addition, decisions the Company makes in the future as it continues to evaluate diverse strategies to enhance shareholder value may impact the outlook provided above.
Revenue & Expenses
Visualization of income flow from segment revenue to net income