Q1 2024 Laureate Education Inc Earnings Call Transcript
Key Points
- Laureate Education Inc (LAUR) announced an upward revision to its full year 2024 guidance by $13 million for Revenues and $5 million for Adjusted EBITDA, reflecting favorable foreign currency rates.
- Enrollment results for the first quarter were in line with expectations, with new and total enrollment volumes increasing by 1% and 5% respectively, led by growth in Mexico.
- The company is experiencing robust operating performance in Mexico, with strong growth prospects bolstered by nearshoring and a favorable macroeconomic environment.
- Laureate Education Inc (LAUR) is well positioned in the attractive private education markets of Mexico and Peru, with leading brand positioning and a strong emphasis on health sciences, STEM, and business courses.
- The company has a robust, profitable, and capital-light business model, supported by stable retention levels and a private pay model, which results in strong cash flow generation.
- Market conditions in Peru are softer, with the country experiencing its first economic contraction in over 20 years outside of the COVID-19 pandemic, affecting enrollment and pricing.
- The primary intake cycle in Peru, which contributes roughly two-thirds of the new enrollment activity for the year, is expected to mute growth aspirations for most of 2024.
- There is a lag effect in Peru, where economic recovery is expected in the second half of 2024, potentially delaying the impact on enrollment growth.
- In Peru, the company faced increased costs due to inflation and higher provisions for doubtful debts, which negatively impacted EBITDA in the first quarter.
- Restructuring activities in Mexico, intended to optimize margins, are expected to incur costs and are now planned for the second quarter, potentially affecting short-term financial performance.
Good day and thank you for standing by. Welcome to the Laureate Education First Quarter 2024 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead.
Good morning and thank you for joining us on today's call to discuss Laureate Education's first quarter 2024 results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website at laureate.net.
We've also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast and a complete recording will be available after the call.
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