Perdoceo Education Corporation Reports 4% Revenue Decline but Increases Operating Income by 15.8%

Perdoceo Education Corporation reported a decrease in total revenue for the fiscal year ended December 31, 2024, amounting to $681.3 million, down 4.0% from $710.0 million in 2023. This decline was primarily driven by a revenue drop of 11.1% at the American InterContinental University System (AIUS), which saw revenues fall to $213.5 million, and a 2.6% decrease at Colorado Technical University (CTU), which generated $456.9 million. The decrease in revenue at CTU was attributed to the simplification of professional development program offerings, while AIUS experienced a lag in revenue recovery following operational changes made in the previous year. The acquisition of the University of St. Augustine for Health Sciences (USAHS) in December 2024 contributed approximately $10 million in revenue for the current year.

Despite the revenue decline, Perdoceo's operating income increased to $174.3 million, a 15.8% rise from $150.4 million in the prior year. This improvement was largely due to reduced operating expenses, which fell by 7.8% to $507.0 million, driven by efficiencies in administrative, admissions, and marketing expenses. The company reported a net income of $147.6 million, slightly down from $147.7 million in 2023, with an effective tax rate of 26.7%. Adjusted operating income, which excludes certain non-cash items, was $192.2 million, compared to $174.9 million in the previous year.

Perdoceo's total student enrollments increased significantly by 20.0% year-over-year, reaching approximately 41,400 students as of December 31, 2024, compared to 34,500 in 2023. This growth was supported by an 8.1% increase in enrollments at CTU and an 11.8% increase at AIUS. The company continues to focus on enhancing student retention and engagement, leveraging technology and data analytics to improve student experiences. Approximately 90% of the enrolled students were in fully online programs, reflecting the company's commitment to providing flexible education options.

Strategically, Perdoceo's acquisition of USAHS expanded its offerings in the health sciences field, which includes programs in physical therapy and nursing. The company aims to optimize student enrollment processes and enhance retention through investments in technology and personalized learning solutions. Looking ahead, Perdoceo anticipates continued growth in student interest and engagement, particularly in light of the recent acquisition and ongoing improvements in its academic programs. The company expects revenue to increase in 2025, driven by the integration of USAHS and organic growth in its existing institutions.

In terms of financial health, Perdoceo reported cash and cash equivalents totaling $591.5 million as of December 31, 2024, a slight decrease from $604.2 million in 2023. The company maintains a strong balance sheet, with a composite score of 3.0, indicating financial responsibility without conditions. However, the company remains vigilant regarding regulatory changes and their potential impact on its operations, particularly concerning Title IV funding, which constitutes a significant portion of its revenue.