Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Perdoceo Education Corporation Second Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Nick Nelson with Alpha IR Group. You may begin. Nicholas

Thank you, operator. Good afternoon, everyone, and thank you for joining us for our second quarter 2025 earnings call. With me on the call today is Todd Nelson, President and Chief Executive Officer; and Ashish Ghia, Chief Financial Officer. This conference call is being webcast live within the Investor Relations section at perdoceoed.com. A webcast replay will also be available on our site, and you can always contact the Alpha IR Group for Investor Relations support. Let me remind you that this afternoon's earnings release and remarks made today include forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions made by and information currently available to Perdoceo Education and involve risks and uncertainties that could cause actual future results, performance, business prospects and opportunities to differ materially from those expressed in or implied by these statements. These risks and uncertainties include, but are not limited to, those factors identified in Perdoceo's most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments or changed circumstances or for any other reason. In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement but not substitute for the most directly comparable GAAP measures. The earnings release that accompanies today's call contains financial and other quantitative information to be discussed today as well as the reconciliation of the GAAP to non-GAAP measures and is available within the Investor Relations page of the company's website. With that, I'd like to turn the call over to Todd Nelson. Todd?

Thank you, Nick. Good afternoon, everyone, and thank you for joining us for our second quarter 2025 earnings call. Our academic institutions remain focused on the goal of changing lives through education and preparing learners for essential skills needed in today's job market. CTU and AIUS offer a wide variety of career-focused programs, which help learners thrive in today's evolving market, while St. Augustine prepares professionals to serve communities across the country with quality medical care. In today's call, I'll start by discussing some key highlights for the quarter, and then Ashish will provide more details on the operating and financial performance and discuss our higher 2025 outlook. As always, I'd like to thank our faculty, student support staff and all of our employees for their outstanding commitment and hard work in serving and educating our students. Second quarter operating performance exceeded our expectations with net income of $41 million or $0.62 per diluted share, while adjusted earnings per diluted share, which excludes certain noncash items, was $0.67. During the quarter, we experienced total enrollment growth across our academic institutions, supported by continuing momentum in student retention and engagement that has been trending near multiyear highs as well as increased interest from prospective students looking to pursue a degree at our academic institutions. Additionally, we believe that our continued investments in student enrollment and student support processes and technology have further enhanced academic outcomes and student experiences. Some key successes and other highlights for the quarter include: first, total enrollment growth grew 17% versus the prior year quarter, supported by 7% growth at both CTU and AIUS as well as the acquisition of St. Augustine. At CTU, this marks 7 consecutive quarters of total student enrollment growth, while total enrollments at AIUS were at the highest level in over a year. We continue to refine our marketing and admission spending strategies and are selectively leveraging generative artificial intelligence to identify and engage with prospective students who we believe are more likely to succeed at one of our academic institutions. We are also investing in upgrading and enhancing our technology with admissions, enrollment and student support processes to ensure that our teams are well equipped to counsel and support the growing number of students enrolled at one of our academic institutions throughout the academic journey. Total enrollments from the corporate student programs at CTU and AIUS continue to grow, and this remains a priority as we continue to make strategic investments in technology and personnel to support further enrollment growth. At St. Augustine, summer term new enrollments increased versus the prior year with just under 4,000 total students enrolled at the university. We also expect new enrollment growth for our fall term, which is traditionally the biggest term of the year. Supporting this new enrollment growth at St. Augustine is the ongoing expansion of their program offering matrix in terms of new modalities and current campus locations with the goal of maximizing the geographical area they serve while providing students with a wider choice of taking their courses between online instruction and an in-person experience at a campus location as well as some hybrid options in between. With fall term total enrollments typically expected to be meaningfully higher than the summer term and supported by consistently high student retention trends, St. Augustine will positively contribute to the overall revenue and adjusted operating income for 2025 and is expected to further grow in 2026. Our capital allocation decisions during the year highlight, amongst other priorities, our continued commitment to returning capital to shareholders. During the first half of 2025, we purchased 1.6 million shares for $46 million at an average price of $28.19 per share. With less than $1 million remaining under our prior $50 million authorization and in line with our broader capital allocation strategy, the Board has approved a new $75 million share repurchase authorization for immediate use. In addition, effective July 31, the Board increased quarterly dividend from $0.13 to $0.15 per share, the second such increase since dividend payments were initiated in 2023. This reflects our commitment to making dividends a growing and integral part of our capital allocation strategy. In summary, we continue to execute against our objectives of responsible and compliant growth. We have experienced good momentum through the fall -- first fall -- first half of 2025 and are optimistic this year will end on a high note, which should set us up well for 2026 and beyond. Before I turn it over to Ashish, a quick note on recent legislative actions. While we continue to evaluate the reconciliation bill, the new rules were in line with our expectations, and we believe the overall impact of our industry should be positive. In addition, we are encouraged by the continuation of this administration's regulatory efforts across numerous federal agencies, including at the Department of Education, and we look forward to the future rule-making efforts that already have been announced. Overall, we believe these regulatory and legislative actions should provide further opportunities for responsible and compliant growth across our academic institutions. Ashish will now provide more details on the quarter, our outlook and enrollment trends. Ashish?

Thank you, Todd. I will start with an overview of the second quarter results and then discuss our balance sheet and full year outlook before handing the call back to Todd for his closing remarks. Please note, all comparisons discussed on this call are versus the comparative prior year period unless otherwise stated. Please also note that total student enrollment numbers discussed on this call or any enrollment trends that are referred to on this call exclude learners pursuing nondegree-seeking and professional development programs and degree-seeking non-Title IV self-paced programs at CTU and AIUS. Finally, a reminder about year-over-year comparability. The financial results for this quarter include the operating performance from the University of St. Augustine for Health Sciences acquisition, which was completed in December of 2024. With that said, let us begin with an overview of our second quarter results. Net income for the quarter was $41 million or $0.62 per diluted share as compared to $38.4 million or $0.57 per diluted share. Second quarter operating income grew by 11.7% to $51.4 million, while adjusted operating income, which we believe is more indicative of the underlying operating performance and excludes certain noncash items, grew 25.4% to $61.5 million as compared to $49.1 million. Finally, adjusted earnings per diluted share was $0.67 as compared to $0.59. Growth across these reported metrics was primarily supported by organic revenue growth at CTU and AIU System. Additionally, from an adjusted operating income and adjusted EPS perspective, the St. Augustine acquisition had and will continue to positively impact year-over-year comparability through 2025. Revenue for the second quarter was $209.6 million, representing an approximately 26% increase as compared to $166.7 million in the prior year quarter. Revenue comparability was positively impacted by $36.7 million attributed to the St. Augustine acquisition. Also supporting revenue growth was total enrollment growth at CTU and AIU System. A note on total student enrollments, which increased 17.4% for the total company as compared to the prior year quarter. At a segment level, CTU increased 7.4% as of June 30, primarily supported by high levels of student retention and engagement, growth within the corporate student program and high levels of prospective student interest. And as Todd mentioned, this represents 7 consecutive quarters of total enrollment growth at CTU, and we expect this growth trend to continue throughout the remainder of 2025. At AIU System, total student enrollments increased by 7.1% as of June 30, driven by the academic calendar at AIU that resulted in a high number of enrollment days in the quarter as well as underlying organic growth. Please note that in addition to underlying trends in student retention and engagement, enrollment days and marketing expenses in any given quarter will also impact total enrollment comparability as was the case for the second quarter. Given that, although we expect total enrollments at AIU System to be slightly lower in the third quarter as compared to the prior year quarter, we will end the year with double-digit enrollment growth, which should positively impact operating performance into 2026. At St. Augustine, during the quarter, we had just under 4,000 average total students enrolled for the ongoing summer term. New enrollments for the summer term were higher as compared to our prior year, primarily due to growth in programs such as nursing and speech language therapy as well as the introduction of new modalities for the doctorate of physical therapy program. As Todd mentioned, we also expect growth for the fall term new enrollments, which is typically the biggest term as it relates to the total number of students enrolled. Please note that St. Augustine has a traditional university calendar with 3 academic terms and multiple campuses for in-person classes in California, Texas and Florida. Commensurately, we may also provide from time to time information about academic term enrollments in addition to the typical quarterly reporting. In summary, we expect total company revenue and total enrollments to increase each remaining quarter versus 2024. Strong levels of prospective student interest and growth in total enrollments from the corporate program at CTU, sustained improvement in student retention and engagement and the St. Augustine acquisition will support this expected growth. Please also note, this expected total enrollment growth in the second half of 2025 should also positively impact operating performance going into 2026. Moving on to our segment results. For the second quarter, revenue at CTU was $118 million or 4.6% higher than the prior year quarter, while operating income for the quarter increased 7.9% to $46.3 million, primarily due to enrollment and revenue growth trends I previously discussed, including sustained demand for our degree programs and continued investment in marketing and admissions to support that demand. At AIU System, second quarter revenue increased 1.9% to $54.7 million compared to the prior year quarter. Excluding a nonrecurring expense benefit recorded in the prior year, current quarter operating income of $12.1 million would have shown an increase versus the prior year quarter of $12.9 million. In the second quarter, St. Augustine recorded revenue of $36.7 million. Excluding depreciation and amortization, the adjusted operating income from St. Augustine was $5.5 million for the quarter and as previously shared, is accretive to our overall adjusted operating results. Moving on to Corporate and Other. Operating losses for the quarter were $5.2 million as compared to $9.8 million in the prior year quarter. The improvement in operating loss was primarily due to acquisition-related expenses incurred in the prior year. Turning to income taxes. For the second quarter, we recorded a provision for income taxes of $15.2 million, bringing our year-to-date effective tax rate to 24.9%. The year-to-date effective tax rate was positively impacted by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which together reduced the effective tax rate by 4.4%. Finally, we expect that for the full year 2025, our effective tax rate will be between 26% and 26.5%, which includes an estimated benefit for the tax effect of stock-based compensation and the release of previously recorded tax reserves for uncertain tax positions. Separately, while we are still evaluating any tax-related impacts from the reconciliation bill, the provisions allowing 100% bonus depreciation and the immediate expensing of domestic research expenditures are expected to reduce our federal cash taxes paid beginning in the current year. Additionally, various tax attributes acquired with the University of St. Augustine acquisition are also expected to reduce our federal cash taxes in 2025. Now to our balance sheet and liquidity. For the year-to-date ended June 30, 2025, net cash flows provided by operations were $143.9 million versus $93 million in the prior year-to-date. This growth versus the prior year was primarily supported by year-over-year improvement in adjusted operating income. We ended the quarter with $659.6 million of cash, cash equivalents, restricted cash and available-for-sale short-term investments. This represents an increase of approximately $68 million from the year-end. Some of the primary uses of cash during the first half were $46.1 million in return of capital to shareholders in the form of stock repurchases, $17.7 million of quarterly dividend and dividend equivalent payments, $27 million for federal and state income tax payments and $4.5 million for capital expenditures. For full year 2025, we continue to foresee capital expenditures to be approximately 1.5% of revenues. Before I share the updated outlook, let me take a minute to discuss capital allocation. We are pleased to announce that consistent with our dividend policy and continued confidence in our long-term outlook, the Board of Directors approved a 15.4% increase to our quarterly dividend payment to $0.15 per share payable on September 12, 2025, to the holders of record of Perdoceo's common stock at the close of business on September 2, 2025. Future quarterly dividend payments are expected to be paid out of free cash flows for the relevant year, subject to Board approval and the company's available retained earnings, financial condition and other relevant factors. Subject to the requirements just mentioned, we continue to expect that quarterly dividend payments will remain an integral and growing component of our balanced capital allocation strategy. And in line with this most recent Board decision, we generally expect to review quarterly dividend amounts on an annual basis. Additionally, during the first half of 2025, we repurchased 1.6 million shares for $46.1 million at an average price of $28.19 per share. With less than $1 million left under our prior authorization, the Board has authorized a new share repurchase program under which the company may repurchase up to $75 million of its outstanding common stock. The new authorization reflects the Board's confidence in the company's long-term strategy, strong balance sheet, cash flow and commitment to delivering value to shareholders. Subject to market conditions, we will remain opportunistic regarding future share repurchases. We'll also continue to maintain a strong balance sheet while actively evaluating diverse strategies to further enhance stockholder value, including acquisitions. At the same time, our balanced approach to capital allocation also includes investments in organic projects, focusing on technology updates that support student success. Now let us discuss our outlook for 2025. With better-than-anticipated operating trends, we are raising our full year adjusted operating income outlook to range between $230 million and $236 million. This compares to an adjusted operating income of $188.9 million in 2024, with the expected increase due to the St. Augustine acquisition as well as organic growth at CTU and AIU System. Adjusted earnings per diluted share are now expected to range between $2.48 and $2.55 versus $2.26 in 2024. Please note that beginning in 2025, the GAAP and adjusted EPS calculations include incremental expenses related to depreciation and finance leases for St. Augustine. These expenses are excluded for the purpose of adjusted operating income. The 2025 adjusted EPS range is impacted by approximately $0.25 per diluted share related to these incremental expenses. This outlook reflects our current belief that the consistently high levels of student retention and student engagement that we experienced in the first half will continue to persist in 2025. Additionally, the higher levels of prospective student interest, which we have experienced since the second half of 2024 will continue through the second half of 2025 and any changes to the regulatory or legislative environment will not have a meaningful impact on prospective student interest levels. Full year revenue will be higher than 2024, primarily due to the recent acquisition of St. Augustine. At CTU, with consistently high levels of prospective student interest supported by strong retention and engagement trends and growth from the corporate student program, we expect revenue and total enrollment growth for each quarter and full year 2025. At AIU System, we may see quarterly variability in total enrollment trends due to the enrollment date comparability. Additionally, for year-end 2025, AIU has an additional academic session starting in December 2025, which will significantly contribute to total enrollment growth when comparing year-over-year total enrollments at December 31 and should positively impact 2026 operating performance. We also expect AIU System to experience revenue growth for the full year 2025 with each quarter generally in line with the prior year. As a reminder, the academic calendar at CTU and AIU System may impact the comparability of revenue days and enrollment results in any given quarter, but not necessarily in the same magnitude or direction. For the third quarter of 2025, we expect adjusted operating income to be in the range of $57 million to $59 million as compared to $47.8 million in the prior year quarter, with adjusted earnings per diluted share to range between $0.60 and $0.62 per diluted share versus $0.59 in the third quarter of 2024. Our 2025 outlook also assumes ongoing investments in technology, data analytics, real estate, academics and student support processes. We believe these investments have been successful in positively impacting academic outcomes and student experiences. Additionally, we will also continue to increase the size of CTU and AIU Systems corporate student program teams. Please refer to our earnings release filed today for important information about the key assumptions and factors underlying this discussion from today's call as well as the GAAP to non-GAAP reconciliations. With that, I will turn the call back over to Todd for his closing remarks. Todd?

Thank you, Ashish. Again, I am pleased with our performance through the first half of 2025 and remain optimistic as we continue to invest in student learning and support processes to further enhance student retention, academic outcomes and experiences. I'd also like to once again thank all of our students and staff for their continued hard work and support. Thank you for joining us, and we look forward to speaking with you again next quarter.

That concludes today's call. Thank you all for joining. You may now disconnect. Everyone, have a great day.