NASDAQ:LAUR Laureate Education Q2 2023 Earnings Report $20.36 +0.62 (+3.14%) Closing price 04/29/2025 04:00 PM EasternExtended Trading$19.90 -0.45 (-2.23%) As of 04:32 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Laureate Education EPS ResultsActual EPS$0.35Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/ALaureate Education Revenue ResultsActual Revenue$462.10 millionExpected Revenue$435.16 millionBeat/MissBeat by +$26.94 millionYoY Revenue GrowthN/ALaureate Education Announcement DetailsQuarterQ2 2023Date8/3/2023TimeN/AConference Call DateThursday, August 3, 2023Conference Call Time8:15AM ETUpcoming EarningsLaureate Education's Q1 2025 earnings is scheduled for Thursday, May 1, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Laureate Education Q2 2023 Earnings Call TranscriptProvided by QuartrAugust 3, 2023 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:02Welcome to the Second Quarter 2023 Laureate Education, Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Morse, Senior Vice President, Corporate Finance. Operator00:00:38Please go ahead. Speaker 100:00:43Good morning and thank you for joining us on today's call to discuss Laureate Education's Q2 2023 results. Joining me on the call today are Eilif Serkantzen, 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. I'd like to remind you that some of the information we are providing today, including but not limited to, Our financial and operational guidance constitutes forward looking statements within the meaning of applicable U. S. Speaker 100:01:30Securities laws. Forward looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10 ks filed with the U. S. Securities and Exchange Commission, our 10 Q filed earlier this morning as well as other filings made with the SEC. Speaker 100:02:01In addition, all forward looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward looking statements. Additionally, non GAAP measures that we discuss, including, among others, adjusted EBITDA and its related margin, total debt net of cash and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation. Let me now turn the call over to Eilif. Speaker 200:02:34Thank you, Adam, and good morning, everyone. Today, I'm pleased to report strong second quarter performance with operating results ahead of our expectations. Year to date, new and total enrollments continue to trend well, increasing by 13% and 9%, respectively, compared to June of last year. In addition to favorable volume growth, pricing for our enrollment cycles completed in the first half of the year has been in line with to slightly head off our realized cost of inflation. We also continue to drive operating efficiencies and are on track to deliver more than 100 basis point improvement in adjusted EBITDA margins for the year. Speaker 200:03:18In addition to strong operating performance, we are benefiting from favorable currency trends. The Mexico peso and the premiums sold have appreciated by 12% and 5%, respectively, versus the U. S. Dollar during the 1st 6 months of the year. This is resulting in higher than expected revenue, adjusted EBITDA and free cash flow generation. Speaker 200:03:42Based on these positive operating and foreign currency trends, we are raising the full year 2023 guidance at the midpoint by $70,000,000 for revenue and $21,000,000 for adjusted EBITDA. Laureate's strategic focus On the high growth markets of Mexico and Peru continue to deliver impressive results and is supported by 3 key factors. First, the steady increase in participation rates driving robust demand for higher education in both countries underpinned by the attractive wage premiums for individuals with higher education degrees and the affordable cost to get them. 2nd, the vital role of the private sector in advancing higher education due to limited government resources, With private institutions now providing over 50% of the combined university seats in Mexico and Peru. And third, Substantial demand for the upskilling of the labor force. Speaker 200:04:50We expect the ongoing near shoring trends To further intensify this demand in Mexico, providing a compelling opportunity for higher education institutions like Laureate. Laureate institutions are recognized leaders in affordable, quality higher education in both Mexico and Peru. And we distribute our products through face to face, online and hybrid delivery mode. We remain committed to pursuing a financial profile within the next 3 to 5 years as follows: 1st, maintaining our organic revenue growth momentum of at least 8% to 10% on a constant currency basis. 2nd, pursuing a capital light expansion strategy, where 40% to 60% of our taught hours are delivered online And thus resulting in capital expenditures as a percentage of revenues to be below 5%. Speaker 200:05:51And finally, delivering adjusted EBITDA growth in the low teens on a constant currency basis. This in turn will help drive adjusted EBITDA margin To over 30% on a consolidated basis for Laureate and adjusted EBITDA to unlevered free cash flow conversion of 50% or more. Our growth agenda is supported by our leading brands and an unwavering commitment To academic excellence and innovation reflected in a program portfolio designed to meet the job requirements of tomorrow. At Laureate, our dedication go beyond just academia, and we aim to make a meaningful and positive impact on society. Just to touch on a few recent highlights. Speaker 200:06:41UPC has been recognized as one of the top 2 universities in Peru Working towards the United Nations' Sustainable Development Goals according to the latest impact ranking by Times Higher Education. Furthermore, La Republica recently reported that UPC has the highest number of graduates with the best paid careers in the Peruvian labor market. This validation comes from the Ponte and Carrera platform, which is promoted by the Ministry of Labor and Employment as well as the Ministry of Education. In Mexico, we are delighted to introduce our new institutional rector at UNITEC, making history with the 1st woman to hold this prestigious position at that university. Also at UNITEC, our Atissipan Campus received a certificate of responsibility at the Diamond Award level for environmental balance In the academic institution category, this accomplishment makes UNITEC the 1st university in Mexico to achieve this level of award. Speaker 200:07:55These accomplishments demonstrate our commitment to delivering Outstanding educational outcomes and furthering our positive impact in the communities we serve. That concludes my prepared remarks, and I will now turn the call over to Rick Bostgaard for a more detailed financial overview of the 2nd quarter and year to date performance as well as further details on our improved 2023 full year outlook. Rick? Speaker 300:08:22Thank you, Eilif. As a reminder, campus based higher education is a seasonal business. Although the Q2 is not a large intake period, It represents a strong earnings quarter for the company as classes are in session for much of the period. Let's start with Pages 13 14, which highlight our operating and financial performance for the Q2 year to date. Total enrollments increased 9% when compared to the prior year quarter. Speaker 300:08:52This was driven by year to date new enrollment growth of 13%, which included favorable results across all 5 brands. In addition to strong volume growth, pricing performance has been slightly ahead of expectations, allowing us to cover our realized cost of inflation on our expense structure and providing some upside to our outlook. Revenue in the seasonally strong second quarter was $462,000,000 and adjusted EBITDA was $175,000,000 Both metrics were ahead of the guidance that we provided 3 months ago. Revenue outperformance versus expectations was a result of favorable FX rates realized during the quarter And better volume and pricing during Mexico's secondary intake. Adjusted EBITDA outperformance followed the revenue trend and was additionally aided by more than $10,000,000 of expenses that were shifted to the second half of the year. Speaker 300:09:56On an organic constant currency basis, Revenue for the Q2 was up 14% year over year and adjusted EBITDA increased 18%. When combined with the Q1, still on an organic constant currency basis, our overall performance For the first half of twenty twenty three resulted in revenue and adjusted EBITDA growth of 13% 15%, respectively. Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 16. Please note that all comparisons versus prior year are on an organic and constant currency basis. Let's start with Mexico, where our portfolio is working well. Speaker 300:10:46Both our premium and value brand are contributing to top line growth and improved levels of profitability. For the Q2, Mexico's revenue grew 18% versus the prior year period and adjusted EBITDA increased 73% aided by favorable timing impacts. On a year to date basis, Revenue growth of 17% was driven by a 10% increase in total enrollments when adjusted for timing and 7% of price mix. The price mix benefit was the result of pricing that was slightly ahead of our cost inflation during the secondary intake as well as the annualization effect from higher growth rates in undergraduate programs during our primary intake last fall, which created a positive mix effect. Adjusted EBITDA increased 36% year to date versus the prior year period. Speaker 300:11:45This was driven by revenue flow through, productivity gains and timing benefits partially offset by return to campus expenses. We believe that our strategy to expand margins in Mexico to above 25% in the next 3 to 5 years is well underway. Let's now transition to Peru on Slide 17. As a reminder, the primary enrollment intake for Peru Completed this past March and all three brands contributed to double digit growth in new enrollments. For the 2nd quarter, Peru's revenue growth was up 12%. Speaker 300:12:23Adjusted EBITDA increased 7%, reflecting the expected impact of return to campus expenses. On a year to date basis, revenue growth of 11% was driven by a 7% increase in total enrollments And a 4% increase of price mix as we were able to hold pricing at a realized cost of inflation during the primary intake completed in March. Adjusted EBITDA was flat versus prior year to date with the decline in margins as expected As incremental revenue flow through was partially offset by expenses associated with return to face to face classes at our campuses. Let me now briefly discuss our balance sheet position. Laureate ended June with $112,000,000 in cash and $210,000,000 in gross debt or a net debt position of $98,000,000 Our strong balance Moving on to our improved outlook for 2023 starting on Page 19. Speaker 300:13:33We are increasing the overall guidance range for revenue and adjusted EBITDA to reflect more favorable operating and currency trends. The improved outlook results in a $70,000,000 increase in revenue guidance at the midpoint and a $21,000,000 increase in adjusted EBITDA at the midpoint. Based on current spot FX rates, We now expect full year 2023 results to be as follows. Total enrollments to continue to be in the range of $447,000 to $455,000 students reflecting growth of 6% to 7% versus 2022. Revenues to now be in the range of $1,483,000,000 to $1,495,000,000 reflecting growth of 19% to 20% on an as reported basis and 10% on an organic constant currency basis versus for 2022. Speaker 300:14:35Adjusted EBITDA to now be in the range of $419,000,000 to $427,000,000 reflecting growth of 24% to 26% on an as reported basis and 14% to 16% On an organic constant currency basis versus 2022, we are increasing our adjusted EBITDA margin improvement to 110 basis points at the midpoint of our guidance. The 10 basis point increase in margin expectations versus prior guidance is driven by revenue flow through resulting from slightly better pricing in the recent secondary intake for Mexico. Additionally, for 2023, we continue to expect adjusted EBITDA to unlevered free cash flow Conversion to be in the low to mid-forty percent range aided by our margin improvement and continued capital light growth model. Finally, as discussed on our prior call, I wanted to once again highlight a few items related to seasonality in our full year 2023 guidance. First is regarding the first half versus second half revenue expectations. Speaker 300:15:52In Peru, we anticipate revenue growth for the 1st half and second half of twenty twenty three at somewhat similar year over year growth rate. In Mexico, however, We anticipate revenue growth for the second half of twenty twenty three to be lower than the first half. This is driven by last Very strong primary new enrollment intake that was partially aided by students returning from COVID step outs as well as timing for other revenue, including graduation fees. We expect to see a more normal first half and second half growth pattern for Mexico in 2024. Lastly, we expect our cash flow in 2023 to be more heavily weighted towards the second half of the year. Speaker 300:16:37This is due to the timing of tax payments in the Q1 and the seasonality of working capital. Now moving to the Q3 guidance. For the Q3 of 2023, we expect revenue to be in the range of $357,000,000 to $362,000,000 adjusted EBITDA to be in the range of $77,000,000 to $81,000,000 That concludes my prepared remarks. Eilif, I'm handing it back to you for closing comments. Speaker 200:17:11Thank you, Rick. I'm encouraged by our continued strong growth momentum in both Mexico and Peru, driven by our leading brands, strong digital capabilities and focus on academic equality and student outcomes. We believe we are well positioned to capitalize on the growth opportunities ahead of us. Operator, that concludes our prepared remarks, and we're now happy to take any questions from the participants. Operator00:17:39Thank you. At this time, we will conduct the question and answer session. Our first question comes from the line of Jeff Silber with BMO Capital Markets. Your line is open. Speaker 400:18:15Thanks so much and congratulations on another solid quarter. Just a couple of questions on the quarter. In your presentation specifically regarding Mexico, you talk about the impact of the timing Can you just remind us what that means? What impact was it last year? Was it this year? Speaker 400:18:36What you're looking for? Speaker 200:18:38Hey, Jeff, this is Eilif. The intake last year for the C2, the smaller intake, During the quarter, we got a much ramped up in Q2, while this year, just due to the calendar, It went into the 1st week of July. So when you look at the full C2 intake, that is what we are referencing when we are saying timing adjusted. That's just the cut over of Speaker 500:19:04the calendar. Speaker 400:19:06Okay. And roughly how many students are we talking about? Speaker 200:19:10It's a relatively small cycle, Rick. Do you have that handy? Speaker 300:19:17Yes, it's around 6 or 7,000? Yes, 6 or 7,000. Speaker 400:19:22Okay, great. That's helpful. Speaker 300:19:26I'm sorry, go ahead. Sorry, it's around $3,000 to $4,000 $3,000 to $4,000 3,000. Yes. Speaker 400:19:31Okay. I appreciate that. I think, Rick, you talked about in your prepared remarks about shifting $10,000,000 of expenses from the first half to the second half. Where was that? Why was that done? Speaker 300:19:46Yes. So thank you, Jeff, for the question. The majority of that shift was in Mexico and the shift was occurring due to just expense seasonality shifts in professional services, IT projects that simply shifted from the later part of Q2 into Q3 and a little bit into Q4 As we look at the timing of those projects that we are implementing in Mexico. Speaker 400:20:17Okay, great. That's helpful. And In terms of the overall pricing environment, curious if you can remind us what price increases you've seen so far in the first half And what should we expect in the second half, specifically the large intake period in Mexico? Speaker 200:20:36Rich, do you want to take that? Speaker 300:20:38Sure. Consistent with what we said at the beginning of the year, Jeff, we talked about in an environment like So entering the year with inflation around 8%. Our implied cost of inflation was much lower than that At around on average 5% on the cost structure between Mexico and between Peru, slightly higher pricing Our inflation in Mexico because we own the real estate and lower inflation in Peru where we Own the real estate we lease in Mexico and we own in Peru. So we are really focused in an environment with heavy inflation and pressure on the consumer To simply pass around the cost of inflation of that 5% on our expense structure and we were able to do that So in the smaller secondary intake, which is the reason for the favorability, that we're passing through on full year guidance on an FXN basis. Speaker 400:21:44And that will continue in the 3rd quarter and with the big intake period? Speaker 300:21:49Obviously, we're early in on that Intake in the C3, which is the main intake in Mexico and the secondary intake in Peru. But we don't have any expectations to differ significantly from that and what our expectations are factored into our full year guidance and second half guidance. Speaker 400:22:09Okay, fantastic. Thanks so much. Operator00:22:14Thank you. Our next question comes from the line of Lucas Ngannou with Morgan Stanley. Your line is open. Speaker 500:22:35Hey, good morning. Thanks for taking our questions. The first question is related to Mexico margins. The expansion was higher than we expected. You mentioned that part of this was due to the shift in timing of expenses, but I just wanted to understand how much of this 600 basis points expansion was due to what was Structural and how much was due to these particular factors this quarter? Speaker 300:23:05Yes. This is Rick. We continue to be, as we noted in our opening remarks, very encouraged about our opportunity to get Mexican margins at 25% plus In the next 3 to 5 years, we do see margin expansion as we talked about, Notable margin expansion occurring this year in Mexico. We're going to see that our expectation is around 20 2% plus, you saw a little bit heavier than that, occur in the first half simply because of the timing of expenses Shifted a little bit into the second half. But overall, we're very pleased with our margin expansion progression in Mexico. Speaker 300:23:47We will see upside this year. That's notable. Speaker 500:23:54Thanks. And also on Mexico, you mentioned that there was a favorable impact from price and mix. Could you explain again How the mix effect benefited growth? Speaker 300:24:06Sure. So our portfolio in Mexico, you think about it from Two dimensions, right? One dimension is, we have value brands and we have that are priced at about 50% lower Then, Premium Brands and then we also have, face to face and online, which is similarly 50% discount And then there's a third there's actually a third dimension, which is what's really driving it. We have undergraduate pricing, traditional undergraduate pricing versus online pricing. And what really happened last year in C3, as you recall, we had a very Again, successful intake in Mexico in the high teens for our primary intake in Mexico last year. Speaker 300:25:01When that intake happened, we had a significant benefit in terms of the mix effect of undergraduate both in our value brand and our premium brand, particularly in our premium brand in UVM. And when you have that, the relative weighting of Stronger undergraduate, including our premium brand, essentially creates a price mix benefit, where we get higher growth of essentially the enrollment growth that you see in the quarter In the year to date basis. Speaker 500:25:38That's very clear. Thank you, Rick. Operator00:25:43Thank you.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallLaureate Education Q2 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Laureate Education Earnings HeadlinesWhat To Expect From Laureate Education’s (LAUR) Q1 EarningsApril 30 at 6:13 AM | msn.comDeputy Bureau Chief, Media, The Wall Street JournalApril 24, 2025 | wsj.comTrump and Buffett Are Quietly Leading America’s Gold RevivalThe “Buffett Indicator” Predicts Gold Set To Dominate for Next Decade Each time the Buffett Indicator has hit extremes, it’s spelled doom for stocks — and soaring gains for gold. Today, the Indicator is flashing a historic all-time high. Meanwhile, Buffett is quietly hoarding $325 billion in cash — and insiders believe he’s about to make a gold move big enough to shock Wall Street. Garrett Goggin has the names of 4 companies likely to benefit — if you move fast. April 30, 2025 | Golden Portfolio (Ad)6LAUR : Price Over Earnings Overview: Laureate EducationApril 24, 2025 | benzinga.comLaureate Education: An Impressive Turnaround Story But Price Doesn't Compensate For The Risk Associated With ItApril 22, 2025 | seekingalpha.comLaureate Education soars 47% following InvestingPro’s Fair Value analysisApril 18, 2025 | uk.investing.comSee More Laureate Education Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Laureate Education? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Laureate Education and other key companies, straight to your email. Email Address About Laureate EducationLaureate Education (NASDAQ:LAUR), together with its subsidiaries, offers higher education programs and services to students through a network of universities and higher education institutions. The company provides a range of undergraduate and graduate degree programs in the areas of business and management, medicine and health sciences, and engineering and information technology through campus-based, online, and hybrid programs. It also offers specialized courses for technical and vocational training; and senior high school. Its services are provides in Mexico, Peru, and the United States. The company was formerly known as Sylvan Learning Systems, Inc. and changed its name to Laureate Education, Inc. in May 2004. Laureate Education, Inc. was founded in 1989 and is headquartered in Miami, Florida.View Laureate Education ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Alphabet Rebounds After Strong Earnings and Buyback AnnouncementMarkets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Texas Instruments: Earnings Beat, Upbeat Guidance Fuel RecoveryMarket Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial Earnings Upcoming Earnings Monster Beverage (5/1/2025)Airbnb (5/1/2025)Amazon.com (5/1/2025)Apple (5/1/2025)Atlassian (5/1/2025)Amgen (5/1/2025)Strategy (5/1/2025)Linde (5/1/2025)MercadoLibre (5/1/2025)ING Groep (5/1/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 6 speakers on the call. Operator00:00:02Welcome to the Second Quarter 2023 Laureate Education, Inc. Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Morse, Senior Vice President, Corporate Finance. Operator00:00:38Please go ahead. Speaker 100:00:43Good morning and thank you for joining us on today's call to discuss Laureate Education's Q2 2023 results. Joining me on the call today are Eilif Serkantzen, 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. I'd like to remind you that some of the information we are providing today, including but not limited to, Our financial and operational guidance constitutes forward looking statements within the meaning of applicable U. S. Speaker 100:01:30Securities laws. Forward looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10 ks filed with the U. S. Securities and Exchange Commission, our 10 Q filed earlier this morning as well as other filings made with the SEC. Speaker 100:02:01In addition, all forward looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward looking statements. Additionally, non GAAP measures that we discuss, including, among others, adjusted EBITDA and its related margin, total debt net of cash and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation. Let me now turn the call over to Eilif. Speaker 200:02:34Thank you, Adam, and good morning, everyone. Today, I'm pleased to report strong second quarter performance with operating results ahead of our expectations. Year to date, new and total enrollments continue to trend well, increasing by 13% and 9%, respectively, compared to June of last year. In addition to favorable volume growth, pricing for our enrollment cycles completed in the first half of the year has been in line with to slightly head off our realized cost of inflation. We also continue to drive operating efficiencies and are on track to deliver more than 100 basis point improvement in adjusted EBITDA margins for the year. Speaker 200:03:18In addition to strong operating performance, we are benefiting from favorable currency trends. The Mexico peso and the premiums sold have appreciated by 12% and 5%, respectively, versus the U. S. Dollar during the 1st 6 months of the year. This is resulting in higher than expected revenue, adjusted EBITDA and free cash flow generation. Speaker 200:03:42Based on these positive operating and foreign currency trends, we are raising the full year 2023 guidance at the midpoint by $70,000,000 for revenue and $21,000,000 for adjusted EBITDA. Laureate's strategic focus On the high growth markets of Mexico and Peru continue to deliver impressive results and is supported by 3 key factors. First, the steady increase in participation rates driving robust demand for higher education in both countries underpinned by the attractive wage premiums for individuals with higher education degrees and the affordable cost to get them. 2nd, the vital role of the private sector in advancing higher education due to limited government resources, With private institutions now providing over 50% of the combined university seats in Mexico and Peru. And third, Substantial demand for the upskilling of the labor force. Speaker 200:04:50We expect the ongoing near shoring trends To further intensify this demand in Mexico, providing a compelling opportunity for higher education institutions like Laureate. Laureate institutions are recognized leaders in affordable, quality higher education in both Mexico and Peru. And we distribute our products through face to face, online and hybrid delivery mode. We remain committed to pursuing a financial profile within the next 3 to 5 years as follows: 1st, maintaining our organic revenue growth momentum of at least 8% to 10% on a constant currency basis. 2nd, pursuing a capital light expansion strategy, where 40% to 60% of our taught hours are delivered online And thus resulting in capital expenditures as a percentage of revenues to be below 5%. Speaker 200:05:51And finally, delivering adjusted EBITDA growth in the low teens on a constant currency basis. This in turn will help drive adjusted EBITDA margin To over 30% on a consolidated basis for Laureate and adjusted EBITDA to unlevered free cash flow conversion of 50% or more. Our growth agenda is supported by our leading brands and an unwavering commitment To academic excellence and innovation reflected in a program portfolio designed to meet the job requirements of tomorrow. At Laureate, our dedication go beyond just academia, and we aim to make a meaningful and positive impact on society. Just to touch on a few recent highlights. Speaker 200:06:41UPC has been recognized as one of the top 2 universities in Peru Working towards the United Nations' Sustainable Development Goals according to the latest impact ranking by Times Higher Education. Furthermore, La Republica recently reported that UPC has the highest number of graduates with the best paid careers in the Peruvian labor market. This validation comes from the Ponte and Carrera platform, which is promoted by the Ministry of Labor and Employment as well as the Ministry of Education. In Mexico, we are delighted to introduce our new institutional rector at UNITEC, making history with the 1st woman to hold this prestigious position at that university. Also at UNITEC, our Atissipan Campus received a certificate of responsibility at the Diamond Award level for environmental balance In the academic institution category, this accomplishment makes UNITEC the 1st university in Mexico to achieve this level of award. Speaker 200:07:55These accomplishments demonstrate our commitment to delivering Outstanding educational outcomes and furthering our positive impact in the communities we serve. That concludes my prepared remarks, and I will now turn the call over to Rick Bostgaard for a more detailed financial overview of the 2nd quarter and year to date performance as well as further details on our improved 2023 full year outlook. Rick? Speaker 300:08:22Thank you, Eilif. As a reminder, campus based higher education is a seasonal business. Although the Q2 is not a large intake period, It represents a strong earnings quarter for the company as classes are in session for much of the period. Let's start with Pages 13 14, which highlight our operating and financial performance for the Q2 year to date. Total enrollments increased 9% when compared to the prior year quarter. Speaker 300:08:52This was driven by year to date new enrollment growth of 13%, which included favorable results across all 5 brands. In addition to strong volume growth, pricing performance has been slightly ahead of expectations, allowing us to cover our realized cost of inflation on our expense structure and providing some upside to our outlook. Revenue in the seasonally strong second quarter was $462,000,000 and adjusted EBITDA was $175,000,000 Both metrics were ahead of the guidance that we provided 3 months ago. Revenue outperformance versus expectations was a result of favorable FX rates realized during the quarter And better volume and pricing during Mexico's secondary intake. Adjusted EBITDA outperformance followed the revenue trend and was additionally aided by more than $10,000,000 of expenses that were shifted to the second half of the year. Speaker 300:09:56On an organic constant currency basis, Revenue for the Q2 was up 14% year over year and adjusted EBITDA increased 18%. When combined with the Q1, still on an organic constant currency basis, our overall performance For the first half of twenty twenty three resulted in revenue and adjusted EBITDA growth of 13% 15%, respectively. Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 16. Please note that all comparisons versus prior year are on an organic and constant currency basis. Let's start with Mexico, where our portfolio is working well. Speaker 300:10:46Both our premium and value brand are contributing to top line growth and improved levels of profitability. For the Q2, Mexico's revenue grew 18% versus the prior year period and adjusted EBITDA increased 73% aided by favorable timing impacts. On a year to date basis, Revenue growth of 17% was driven by a 10% increase in total enrollments when adjusted for timing and 7% of price mix. The price mix benefit was the result of pricing that was slightly ahead of our cost inflation during the secondary intake as well as the annualization effect from higher growth rates in undergraduate programs during our primary intake last fall, which created a positive mix effect. Adjusted EBITDA increased 36% year to date versus the prior year period. Speaker 300:11:45This was driven by revenue flow through, productivity gains and timing benefits partially offset by return to campus expenses. We believe that our strategy to expand margins in Mexico to above 25% in the next 3 to 5 years is well underway. Let's now transition to Peru on Slide 17. As a reminder, the primary enrollment intake for Peru Completed this past March and all three brands contributed to double digit growth in new enrollments. For the 2nd quarter, Peru's revenue growth was up 12%. Speaker 300:12:23Adjusted EBITDA increased 7%, reflecting the expected impact of return to campus expenses. On a year to date basis, revenue growth of 11% was driven by a 7% increase in total enrollments And a 4% increase of price mix as we were able to hold pricing at a realized cost of inflation during the primary intake completed in March. Adjusted EBITDA was flat versus prior year to date with the decline in margins as expected As incremental revenue flow through was partially offset by expenses associated with return to face to face classes at our campuses. Let me now briefly discuss our balance sheet position. Laureate ended June with $112,000,000 in cash and $210,000,000 in gross debt or a net debt position of $98,000,000 Our strong balance Moving on to our improved outlook for 2023 starting on Page 19. Speaker 300:13:33We are increasing the overall guidance range for revenue and adjusted EBITDA to reflect more favorable operating and currency trends. The improved outlook results in a $70,000,000 increase in revenue guidance at the midpoint and a $21,000,000 increase in adjusted EBITDA at the midpoint. Based on current spot FX rates, We now expect full year 2023 results to be as follows. Total enrollments to continue to be in the range of $447,000 to $455,000 students reflecting growth of 6% to 7% versus 2022. Revenues to now be in the range of $1,483,000,000 to $1,495,000,000 reflecting growth of 19% to 20% on an as reported basis and 10% on an organic constant currency basis versus for 2022. Speaker 300:14:35Adjusted EBITDA to now be in the range of $419,000,000 to $427,000,000 reflecting growth of 24% to 26% on an as reported basis and 14% to 16% On an organic constant currency basis versus 2022, we are increasing our adjusted EBITDA margin improvement to 110 basis points at the midpoint of our guidance. The 10 basis point increase in margin expectations versus prior guidance is driven by revenue flow through resulting from slightly better pricing in the recent secondary intake for Mexico. Additionally, for 2023, we continue to expect adjusted EBITDA to unlevered free cash flow Conversion to be in the low to mid-forty percent range aided by our margin improvement and continued capital light growth model. Finally, as discussed on our prior call, I wanted to once again highlight a few items related to seasonality in our full year 2023 guidance. First is regarding the first half versus second half revenue expectations. Speaker 300:15:52In Peru, we anticipate revenue growth for the 1st half and second half of twenty twenty three at somewhat similar year over year growth rate. In Mexico, however, We anticipate revenue growth for the second half of twenty twenty three to be lower than the first half. This is driven by last Very strong primary new enrollment intake that was partially aided by students returning from COVID step outs as well as timing for other revenue, including graduation fees. We expect to see a more normal first half and second half growth pattern for Mexico in 2024. Lastly, we expect our cash flow in 2023 to be more heavily weighted towards the second half of the year. Speaker 300:16:37This is due to the timing of tax payments in the Q1 and the seasonality of working capital. Now moving to the Q3 guidance. For the Q3 of 2023, we expect revenue to be in the range of $357,000,000 to $362,000,000 adjusted EBITDA to be in the range of $77,000,000 to $81,000,000 That concludes my prepared remarks. Eilif, I'm handing it back to you for closing comments. Speaker 200:17:11Thank you, Rick. I'm encouraged by our continued strong growth momentum in both Mexico and Peru, driven by our leading brands, strong digital capabilities and focus on academic equality and student outcomes. We believe we are well positioned to capitalize on the growth opportunities ahead of us. Operator, that concludes our prepared remarks, and we're now happy to take any questions from the participants. Operator00:17:39Thank you. At this time, we will conduct the question and answer session. Our first question comes from the line of Jeff Silber with BMO Capital Markets. Your line is open. Speaker 400:18:15Thanks so much and congratulations on another solid quarter. Just a couple of questions on the quarter. In your presentation specifically regarding Mexico, you talk about the impact of the timing Can you just remind us what that means? What impact was it last year? Was it this year? Speaker 400:18:36What you're looking for? Speaker 200:18:38Hey, Jeff, this is Eilif. The intake last year for the C2, the smaller intake, During the quarter, we got a much ramped up in Q2, while this year, just due to the calendar, It went into the 1st week of July. So when you look at the full C2 intake, that is what we are referencing when we are saying timing adjusted. That's just the cut over of Speaker 500:19:04the calendar. Speaker 400:19:06Okay. And roughly how many students are we talking about? Speaker 200:19:10It's a relatively small cycle, Rick. Do you have that handy? Speaker 300:19:17Yes, it's around 6 or 7,000? Yes, 6 or 7,000. Speaker 400:19:22Okay, great. That's helpful. Speaker 300:19:26I'm sorry, go ahead. Sorry, it's around $3,000 to $4,000 $3,000 to $4,000 3,000. Yes. Speaker 400:19:31Okay. I appreciate that. I think, Rick, you talked about in your prepared remarks about shifting $10,000,000 of expenses from the first half to the second half. Where was that? Why was that done? Speaker 300:19:46Yes. So thank you, Jeff, for the question. The majority of that shift was in Mexico and the shift was occurring due to just expense seasonality shifts in professional services, IT projects that simply shifted from the later part of Q2 into Q3 and a little bit into Q4 As we look at the timing of those projects that we are implementing in Mexico. Speaker 400:20:17Okay, great. That's helpful. And In terms of the overall pricing environment, curious if you can remind us what price increases you've seen so far in the first half And what should we expect in the second half, specifically the large intake period in Mexico? Speaker 200:20:36Rich, do you want to take that? Speaker 300:20:38Sure. Consistent with what we said at the beginning of the year, Jeff, we talked about in an environment like So entering the year with inflation around 8%. Our implied cost of inflation was much lower than that At around on average 5% on the cost structure between Mexico and between Peru, slightly higher pricing Our inflation in Mexico because we own the real estate and lower inflation in Peru where we Own the real estate we lease in Mexico and we own in Peru. So we are really focused in an environment with heavy inflation and pressure on the consumer To simply pass around the cost of inflation of that 5% on our expense structure and we were able to do that So in the smaller secondary intake, which is the reason for the favorability, that we're passing through on full year guidance on an FXN basis. Speaker 400:21:44And that will continue in the 3rd quarter and with the big intake period? Speaker 300:21:49Obviously, we're early in on that Intake in the C3, which is the main intake in Mexico and the secondary intake in Peru. But we don't have any expectations to differ significantly from that and what our expectations are factored into our full year guidance and second half guidance. Speaker 400:22:09Okay, fantastic. Thanks so much. Operator00:22:14Thank you. Our next question comes from the line of Lucas Ngannou with Morgan Stanley. Your line is open. Speaker 500:22:35Hey, good morning. Thanks for taking our questions. The first question is related to Mexico margins. The expansion was higher than we expected. You mentioned that part of this was due to the shift in timing of expenses, but I just wanted to understand how much of this 600 basis points expansion was due to what was Structural and how much was due to these particular factors this quarter? Speaker 300:23:05Yes. This is Rick. We continue to be, as we noted in our opening remarks, very encouraged about our opportunity to get Mexican margins at 25% plus In the next 3 to 5 years, we do see margin expansion as we talked about, Notable margin expansion occurring this year in Mexico. We're going to see that our expectation is around 20 2% plus, you saw a little bit heavier than that, occur in the first half simply because of the timing of expenses Shifted a little bit into the second half. But overall, we're very pleased with our margin expansion progression in Mexico. Speaker 300:23:47We will see upside this year. That's notable. Speaker 500:23:54Thanks. And also on Mexico, you mentioned that there was a favorable impact from price and mix. Could you explain again How the mix effect benefited growth? Speaker 300:24:06Sure. So our portfolio in Mexico, you think about it from Two dimensions, right? One dimension is, we have value brands and we have that are priced at about 50% lower Then, Premium Brands and then we also have, face to face and online, which is similarly 50% discount And then there's a third there's actually a third dimension, which is what's really driving it. We have undergraduate pricing, traditional undergraduate pricing versus online pricing. And what really happened last year in C3, as you recall, we had a very Again, successful intake in Mexico in the high teens for our primary intake in Mexico last year. Speaker 300:25:01When that intake happened, we had a significant benefit in terms of the mix effect of undergraduate both in our value brand and our premium brand, particularly in our premium brand in UVM. And when you have that, the relative weighting of Stronger undergraduate, including our premium brand, essentially creates a price mix benefit, where we get higher growth of essentially the enrollment growth that you see in the quarter In the year to date basis. Speaker 500:25:38That's very clear. Thank you, Rick. Operator00:25:43Thank you.Read morePowered by