0001261654-25-000019
SEC filingRevenue grew 15.1% driven by student population increases; operating margin expanded 270 bps to 6.9%.
For the three months ended June 30, 2025, total revenue increased 15.1% to $204.3 million from $177.5 million in the prior-year quarter. The growth was primarily driven by higher average full-time active students across both segments – UTI saw an 8.9% increase while Concorde posted an 18.8% increase. Income from operations rose to $14.2 million (6.9% of revenue) compared to $7.4 million (4.2% of revenue) last year, reflecting the benefit of operating leverage on the higher student base. Net income more than doubled to $10.7 million from $5.0 million, yielding EPS of $0.xx (not disclosed). The effective tax rate was 25.7% versus 26.2% in the prior year.
Educational services and facilities expenses increased to $105.6 million from $95.3 million, driven by higher compensation and occupancy costs to support greater student volume and new program launches. Selling, general and administrative expenses rose to $84.5 million from $74.7 million, reflecting increased advertising and marketing spend as well as higher provisions for credit losses. Despite the absolute increases, both expense categories declined as a percentage of revenue – educational services and facilities from 53.7% to 51.7%, and SG&A from 42.1% to 41.4%.
UTI segment revenue grew 12.2% to $131.5 million, led by a 8.9% rise in average full-time active students. The segment benefited from the launch of 12 new programs (three in late fiscal 2024 and nine in fiscal 2025), including the Battery Hybrid EV and HVACR programs. New campus announcements in Atlanta and San Antonio signal continued expansion. Advertising and marketing expense as a percentage of UTI revenue was 11.4%, up slightly from 11.2%.
Concorde segment revenue increased 20.7% to $72.8 million, outpacing UTI on a percentage basis. This was driven by a 18.8% jump in average full-time active students, reflecting successful new program launches (five programs at three campuses) and the introduction of cash-pay short programs. Concorde also signed a lease for a co-branded campus with Heartland Dental in Fort Myers, Florida, expected to open in early fiscal 2026. Advertising and marketing expense as a percentage of Concorde revenue was 10.3%, versus 10.1% a year ago.
Management’s North Star strategy focuses on three pillars: growth (deeper penetration of existing markets and entry into new ones), diversification (new locations, programs, and student lifetime value offerings), and optimization (operational efficiency). The nine-month period saw execution on this strategy with multiple new campus announcements and program launches. Revenue for the nine months ended June 30, 2025 was $613.2 million, up 14.3%.
The company’s cash and equivalents stood at $70.7 million, with available liquidity of $119.0 million under the Revolving Credit Facility. A Quick Ratio covenant breach at June 30, 2025 (0.62 versus required 0.65) was addressed with a waiver from the lender; management attributed the breach to paying down the revolver and investing in held-to-maturity securities. The company guided that it expects its cash flow, cash on hand, investments, and credit facility to meet working capital, capital expenditure, and growth needs through the fiscal year and beyond. No specific numerical guidance was provided.
Operating cash flow (CFO) of $40.2M significantly exceeded net income of $44.3M, reflecting strong cash conversion despite a large working capital outflow. The primary non-cash add-backs were depreciation & amortization ($24.5M), amortization of right-of-use assets ($17.5M), and provision for credit losses ($15.1M). Working capital was a net use of cash, driven by a $25.5M decrease in deferred revenue and a $21.9M increase in receivables, partially offset by a $6.5M increase in payables. Capex of $25.5M was elevated relative to the prior year ($16.8M), resulting in free cash flow (CFO minus capex) of $14.7M. The company used cash to repay $50.0M net on its revolving credit facility and made no share repurchases or dividend payments during the period. Investing activities also included $54.6M in purchases of held-to-maturity investments, partially offset by $1.9M in maturities. Overall, cash generation improved markedly year-over-year, but capex intensity and debt reduction consumed a significant portion of operating cash flow.