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What changed in Adtalem Global Education Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Adtalem Global Education Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+406 added−689 removedSource: 10-K (2024-08-06) vs 10-K (2023-08-10)

Top changes in Adtalem Global Education Inc.'s 2024 10-K

406 paragraphs added · 689 removed · 320 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

102 edited+47 added−144 removed38 unchanged
Biggest changeAs institution’s 90/10 compliance must be calculated using the financial results of an entire fiscal year, we are including Walden’s amounts for the full fiscal year 2022 in the table below, including the portion of the year not under Adtalem’s ownership. ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year ​ ​ 2022 ​ 2021 Chamberlain University 65 % 66 % Walden University ​ 73 % n/a ​ American University of the Caribbean School of Medicine 81 % 80 % Ross University School of Medicine 85 % 85 % Ross University School of Veterinary Medicine 81 % 82 % Consolidated 72 % 73 % 17 Table of Contents Incentive Compensation An educational institution participating in Title IV programs may not pay any commission, bonus, or other incentive payments to any person involved in student recruitment or awarding of Title IV program funds, if such payments are based directly or indirectly in any part on success in enrolling students or obtaining student financial aid.
Biggest changeIncentive Compensation An educational institution participating in Title IV programs may not pay any commission, bonus, or other incentive payments to any person involved in student recruitment or awarding of Title IV program funds, if such payments are based directly or indirectly in any part on success in enrolling students or obtaining student financial aid.
RN-to-BSN Option Admission to the RN-to-BSN option requires a nursing diploma or Associate Degree in Nursing from an accredited institution, a minimum grade point average of 2.0, and a current, active, unrestricted RN license in the U.S. or other jurisdiction that is an associate member of the National Council of State Boards of Nursing (“NCSBN”).
RN-BSN Option Admission to the RN-BSN option requires a nursing diploma or Associate Degree in Nursing from an accredited institution, a minimum grade point average of 2.0, and a current, active, unrestricted RN license in the U.S. or other jurisdiction that is an associate member of the National Council of State Boards of Nursing (“NCSBN”).
This program offers both tuition discounts and tuition reimbursement at multiple nationally and regionally accredited higher education institutions. We will continue to offer resources to maintain an engaged, healthy, motivated workforce focused on meeting business goals.
This program offers both tuition discounts and tuition reimbursement at multiple nationally and regionally accredited higher education institutions. We will continue to offer resources to maintain an engaged, healthy, and motivated workforce focused on meeting business goals.
Refer to the risk factor titled “ If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditation and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business” under subsection “Risks Related to Adtalem’s Highly Regulated Industry” in Item 1A.
Refer to the risk factor titled “ If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditation and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business” under subsection “Risks Related to Adtalem’s Regulated Industry” in Item 1A.
In addition to governance by the regulatory triad, there has been increased focus by members of the U.S. Congress and federal agencies, including ED, the Consumer Financial Protection Bureau (“CFPB”), and the Federal Trade Commission (“FTC”), on the role that proprietary educational institutions play in higher education. We expect that this challenging regulatory environment will continue for the foreseeable future.
In addition to governance by the regulatory triad, there has been increased focus by members of the U.S. Congress and federal agencies, including ED, the Consumer Financial Protection Bureau (“CFPB”), and the Federal Trade Commission (“FTC”), on the role that proprietary educational institutions play in higher education. We expect that this regulatory environment will continue for the foreseeable future.
Adtalem vigorously defends against infringements of its trademarks, service marks, certification marks, patents, and copyrights. Available Information We use our website (www.adtalem.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
Adtalem vigorously defends against infringements of its trademarks, service marks, certification marks, patents, and copyrights. Available Information We use our website (www.adtalem.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, as one means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
For further information, see “ A bankruptcy filing by us or by any of our Title IV Institutions, or a closure of one of our Title IV Institutions, would lead to an immediate loss of eligibility to participate in Title IV programs ” under subsection “Risks Related to Adtalem’s Highly Regulated Industry” in Item 1A.
For further information, see “ A bankruptcy filing by us or by any of our Title IV institutions, or a closure of one of our Title IV institutions, would lead to an immediate loss of eligibility to participate in Title IV programs ” under subsection “Risks Related to Adtalem’s Regulated Industry” in Item 1A.
Under AUC and RUSM direction, students then complete the remainder of their program by participating in clinical rotations conducted at over 40 affiliated teaching hospitals or medical centers connected with accredited medical education programs in the U.S., Canada, and the U.K.
Under AUC and RUSM direction, students then complete the remainder of their program by participating in clinical rotations conducted at over 40 affiliated teaching hospitals or medical centers connected with accredited graduate medical education programs in the U.S., Canada, and the U.K.
Chamberlain’s RN-to-BSN degree completion option has received three certifications from Quality Matters, an independent global organization leading quality assurance in online teaching and learning environments. Chamberlain has earned the Online Learning Support, Online Teaching Support, and Online Learner Success certifications.
Chamberlain’s RN-BSN degree completion option has received three certifications from Quality Matters, an independent global organization leading quality assurance in online teaching and learning environments. Chamberlain has earned the Online Learning Support, Online Teaching Support, and Online Learner Success certifications.
Riley College of Education and Human Sciences are accredited by the Council for the Accreditation of Educator Preparation. The MPH and Doctor of Public Health programs are accredited by the Council on Education for Public Health. The Bachelor of Social Work and MSW programs are accredited by the Council on Social Work Education.
Riley College of Education and Human Sciences are accredited by the Council for the Accreditation of Educator Preparation. The MPH and Doctor of Public Health programs are accredited by the Council on Education for Public Health. The Bachelor of Social Work and MSW programs are accredited by the CSWE.
Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors, reauthorization by each institutions’ state licensing agencies, and/or providing financial protections.
Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors, reauthorization by each institution’s state licensing agencies, and/or providing financial protections.
RUSVM has affiliations with 31 AVMA-accredited U.S. and international colleges of veterinary medicine so that RUSVM students can complete their final three clinical semesters of study in the U.S. or abroad. RUSVM has received accreditation for its Postgraduate Studies program from the St. Christopher & Nevis Accreditation Board.
RUSVM has affiliations with many AVMA-accredited U.S. and international colleges of veterinary medicine so that RUSVM students can complete their final three clinical semesters of study in the U.S. or abroad. RUSVM has received accreditation for its Postgraduate Studies program from the St. Christopher & Nevis Accreditation Board.
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The content of the websites mentioned above is not incorporated into and should not be considered a part of this report. 22 Table of Contents
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The content of the websites mentioned above is not incorporated into and should not be considered a part of this report. 15 Table of Contents
In addition, some states in which our Title IV Institutions are licensed require approval (in some cases, advance approval) of changes in ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change in ownership or control.
In addition, some states in which our Title IV institutions are licensed require approval (in some cases, prior approval) of changes of ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change of ownership or control.
While Walden’s target market of working professionals 25 years and older was once underserved, it now has a variety of options to meet the growing need for higher education. Walden has degree programs in nursing, education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice.
While Walden’s 6 Table of Contents target market of working professionals 25 years and older was once underserved, it now has a variety of options to meet the growing need for higher education. Walden has degree programs in nursing, education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice.
Walden has ranked #2 for awarding research doctoral degrees in psychology, public health, and social service professions to Hispanic students. In addition, Walden has rich experience in delivering innovative accelerated programs through distance delivery.
Walden has ranked #3 for awarding research doctoral degrees in psychology, public health, and social service professions to Hispanic students. In addition, Walden has rich experience in delivering innovative accelerated programs through distance delivery.
Walden seeks to empower students to use their new knowledge to think creatively about problem-solving for social good. This mission of education as applied to promoting social good has allowed Walden to attract an extraordinary community of students and faculty members who share a commitment to using knowledge to create real and lasting positive social change.
Walden seeks to empower students to use their new knowledge 3 Table of Contents to think creatively about problem-solving for social good. This mission of education as applied to promoting social good has allowed Walden to attract an extraordinary community of students and faculty members who share a commitment to using knowledge to create real and lasting positive social change.
Applying various financial elements from the fiscal year audited financial statements, the test is based upon a composite score of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably.
Applying various financial elements from the fiscal year audited financial statements, the score is a composite of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably.
For admissions review to take place, applicants must submit an online application for their intended program of study and an official transcript with a qualifying admitting degree from a U.S. school accredited by a regional, professional/specialized, or national accrediting organization recognized by the Council for Higher Education Accreditation or the U.S.
For admissions review to take place, applicants must submit an online application for their intended program of study and an official transcript with a qualifying admitting degree from a U.S. school accredited by a regional, professional/specialized, or national accrediting organization recognized by the Council for Higher Education Accreditation or the ED, or from an appropriately accredited non-U.S. institution.
A successful applicant must have completed the required prerequisite courses and, for AUC and RUSM, taken the Medical College Admission Test (“MCAT”), while RUSVM applicants are strongly encouraged but not required to have completed the Graduate Record Exam (“GRE”).
A successful applicant must have completed the required prerequisite courses and, for AUC and RUSM U.S. students, taken the Medical College Admission Test (“MCAT”), while RUSVM applicants are strongly encouraged but not required to have completed the Graduate Record Exam (“GRE”).
Successfully passing USMLE Step 2 Clinical Skills previously was a requirement for graduation and for certification by the Educational Commission for Foreign Medical Graduates (“ECFMG”) to enter the U.S. residency match. USMLE Step 2 Clinical Skills has been discontinued indefinitely. ECFMG has developed alternative pathways to replace this requirement, for which AUC and RUSM are generally eligible.
Successfully passing USMLE, Step 2 Clinical Skills previously was a requirement for graduation and for certification by the Educational Commission for Foreign Medical Graduates (“ECFMG”) to enter the U.S. residency match. USMLE Step 2 Clinical Skills has been discontinued indefinitely. ECFMG has developed alternative pathways to replace this requirement, for which AUC’s and RUSM’s graduates are generally eligible.
On July 26, 2018, Barbados authorized RUSM to confer the Doctor of Medicine degree. The NCFMEA has affirmed that CAAM-HP has established and enforces standards of educational accreditation that are comparable to those promulgated 12 Table of Contents by the LCME.
On July 26, 2018, Barbados authorized RUSM to confer the Doctor of Medicine degree. The NCFMEA has affirmed that CAAM-HP has established and enforces standards of educational accreditation that are comparable to those promulgated by the LCME.
In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, which evaluation may include a comprehensive review.
In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, and that evaluation may include a comprehensive review.
We recently launched enhancements to our Employee Assistance Program and our mental health and well-being application, entitled Ginger. Employee participation for certain programs is listed below: ​ ​ ​ ​ ​ ​ Wellness Pillar ​ Segment: U.S.
We recently launched enhancements to our Employee Assistance Program and our mental health and well-being application, entitled Headspace Care. Employee participation for certain programs is listed below: ​ ​ ​ ​ ​ ​ Wellness Pillar ​ Segment: U.S.
In addition, AUC is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, and New York, where robust processes are in place to evaluate and approve an international medical school’s programs. AUC students can join residency training programs in all 50 states.
Liaison Committee on Medical Education (“LCME”). In addition, AUC is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, and New York, where robust processes are in place to evaluate and approve an international medical school’s programs. AUC students can join residency training programs in all 50 states.
AUC and RUSM AUC, founded in 1978 and acquired by Adtalem in 2011, provides medical education and confers the Doctor of Medicine degree. AUC is located in St. Maarten and is one of the most established international medical schools in the Caribbean, producing over 7,500 graduates from over 78 countries.
AUC and RUSM AUC, founded in 1978 and acquired by Adtalem in 2011, provides medical education and confers the Doctor of Medicine degree. AUC is located in St. Maarten and is one of the most established international medical schools in the Caribbean, having produced over 7,500 graduates from over 78 countries since its founding.
MERP is a 15-week medical school preparatory program focused on enhancing the academic foundation of prospective AUC and RUSM students and providing them with the skills they need to be successful in medical school and to achieve their goals of becoming physicians. Upon successful completion of the MERP program, students are guaranteed admission to AUC or RUSM.
MERP is a 15-week medical school preparatory program focused on enhancing the academic foundation of prospective AUC and RUSM students and providing them with the skills they need to be successful in medical school and to achieve their goals of becoming physicians.
Students who already have passed their NCLEX exam and achieved RN designation through a diploma or associate degree can complete their BSN degree online through Chamberlain’s RN-to-BSN completion option in three semesters of full-time study, although most students enroll part-time while they continue working as nurses.
Students who already have passed their National Council Licensure Examination (“NCLEX”) exam and achieved RN designation through a diploma or associate degree can complete their BSN degree online through Chamberlain’s RN-BSN completion option in three semesters of full-time study, although most students enroll part-time while they continue working as nurses.
Chamberlain has 23 campuses located in 15 states. In Fall 2022, according to data obtained from the American Association of Colleges of Nursing (“AACN”), Chamberlain had the largest pre-licensure program in the U.S based on total enrollments. In post-licensure nursing education, there are more than 700 institutions offering RN-to-BSN programs and more than 600 institutions offering MSN programs.
In Fall 2023, according to data obtained from the American Association of Colleges of Nursing (“AACN”), Chamberlain had the largest pre-licensure program in the U.S. based on total enrollments. In post-licensure nursing education, there are more than 700 institutions offering RN-BSN programs and more than 600 institutions offering MSN programs.
Accreditation-Provisional does not ensure any subsequent accreditation status. It is limited to no more than five years from matriculation of the first class. Additionally, Chamberlain is an accredited provider of nursing continuing professional development credits by the American Nursing Credentialing Center. Walden Walden is institutionally accredited by the HLC, an institutional accreditation agency recognized by ED.
Accreditation-Provisional does not ensure any subsequent accreditation status. It is limited to no more than five years from matriculation of the first class. Additionally, Chamberlain is an accredited provider of nursing continuing professional development credits by the American Nursing Credentialing Center. 7 Table of Contents Walden Walden is also institutionally accredited by the HLC.
To be eligible to participate in Title IV programs, a postsecondary institution must be accredited by an accrediting body recognized by ED, must comply with the HEA and all applicable regulations thereunder, and must be authorized to operate by the appropriate postsecondary regulatory authority in each state in which the institution operates, as applicable.
Therefore, to be eligible to participate in Title IV programs, a postsecondary institution must be accredited by an agency recognized by ED, must comply with the HEA and all applicable regulations thereunder, and must be authorized to operate by the appropriate higher education authority in each state in which the institution operates, as applicable.
In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year). For the past several years, Adtalem’s composite score has exceeded the required minimum of 1.5.
In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year). 9 Table of Contents For the past several years, Adtalem’s composite score was greater than 1.5.
Adtalem aims to create value for society and its stakeholders by offering responsive educational programs that are supported by exceptional services to its students and delivered with integrity and accountability. Towards this vision, Adtalem is proud to play a vital role in expanding access to higher education along with other institutions in the public, independent, and private sectors.
Adtalem aims to create value for society and its stakeholders by offering responsive educational programs that are supported by exceptional services to its students and delivered with integrity and accountability. Towards this vision, Adtalem is proud to play a vital role in expanding access to higher education.
Regular Employees ​ Participation ​ Financial ​ Retirement planning (auto enrollment feature for new hire) ​ 92 % Emotional* ​ Mental health wellbeing - Ginger utilization ​ 18 % Physical ​ Employees completing annual physicals ​ 84 % *EAP standard utilization is 3-5% Finally, Adtalem provides additional opportunities for employees to pursue their educational goals through our Education Assistance program.
Regular Employees ​ Participation ​ Financial ​ Retirement planning (auto enrollment feature for new hires) ​ 98 % Emotional* ​ Mental health wellbeing - Headspace Care utilization ​ 20 % Physical ​ Employees completing annual physicals ​ 84 % *EAP standard utilization is 3-5% Finally, Adtalem provides additional opportunities for employees to pursue their educational goals through our Education Assistance program.
The accelerated RN-to-MSN program offers associate or diploma-prepared RNs an opportunity to earn an MSN versus a BSN with the option of completing the Advanced Generalist concentration requiring 45 credit hours and 144 practicum hours completed in one year of full-time study and the Clinical Nurse Leadership concentration requiring 52 credit hours and 432 practicum hours completed in one and a half years of full-time study.
The accelerated RN-MSN program offers associate or diploma-prepared RNs an opportunity to earn an MSN versus a BSN with the option of completing the Advanced Generalist concentration in one year of full-time study and the Clinical Nurse Leadership concentration in one and a half years of full-time study.
Only) ​ Level ​ June 30, 2023 ​ ​ June 30, 2022 ​ ​ June 30, 2023 ​ ​ June 30, 2022 ​ All Levels ​ 71 % ​ 75 % ​ 37 % ​ 36 % Management ​ 70 % ​ 71 % ​ 34 % ​ 31 % Director ​ 67 % ​ 68 % ​ 24 % ​ 23 % Executive ​ 47 % ​ 42 % ​ 23 % ​ 21 % Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chamberlain ​ 80 % ​ 87 % ​ 38 % ​ 36 % Walden ​ 72 % ​ 70 % ​ 34 % ​ 34 % Medical and Veterinary ​ 60 % ​ 59 % ​ 57 % ​ 54 % Home Office ​ 61 % ​ 60 % ​ 39 % ​ 39 % Adtalem offers a comprehensive benefits package including wellness programs for eligible employees.
Only) ​ Level ​ June 30, 2024 ​ ​ June 30, 2023 ​ ​ June 30, 2024 ​ ​ June 30, 2023 ​ All Levels ​ 72 % ​ 71 % ​ 37 % ​ 37 % Management ​ 70 % ​ 70 % ​ 34 % ​ 34 % Director ​ 66 % ​ 67 % ​ 23 % ​ 24 % Executive ​ 50 % ​ 47 % ​ 21 % ​ 23 % Segment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chamberlain ​ 87 % ​ 80 % ​ 36 % ​ 38 % Walden ​ 74 % ​ 72 % ​ 32 % ​ 34 % Medical and Veterinary ​ 60 % ​ 60 % ​ 59 % ​ 57 % Home Office ​ 60 % ​ 61 % ​ 40 % ​ 39 % Adtalem offers a comprehensive benefits package including wellness programs for eligible employees.
On August 12, 2021, Adtalem completed the acquisition of all the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company (“e-Learning”), and its subsidiary, Walden University, LLC, a Florida limited liability company (together with e-Learning, “Walden”), from Laureate Education, Inc.
On August 12, 2021, Adtalem completed its $1.5 billion acquisition of all the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company (“e-Learning”), and its subsidiary, Walden University, LLC, a Florida limited liability company, from Laureate Education, Inc. (“Laureate” or “Seller”).
Virgin Islands. 10 Table of Contents In Fall 2022, according to AACN data, Chamberlain had the largest DNP, MSN, and FNP programs in the U.S based on total enrollments. Walden The market for fully online higher education, in which Walden competes, remains a highly competitive and growing space.
In Fall 2023, according to AACN data, Chamberlain had the largest DNP, MSN, and FNP programs in the U.S based on total enrollments. Walden The market for fully online higher education, in which Walden competes, remains a competitive and growing space.
On July 1, 2023, new Defense to Repayment regulations went into effect that include a lower threshold for establishing misrepresentation, provides for no statute of limitation for claims submission, expands reasons to file a claim including aggressive or deceptive recruitment tactics and omission of fact, weakens due processes afforded to institutions, and reinstates provisions for group discharges.
New Borrower Defense to Repayment regulations were scheduled to go into effect on July 1, 2023 that include a lower threshold for establishing misrepresentation, no statute of limitation for claims submission, expanded reasons to file a claim including aggressive or deceptive recruitment tactics and omission of fact, weakened due processes afforded to institutions, and reinstated provisions for group discharges.
The program requires 43 credit hours. The MSW degree program aims to develop and empower students to be agents of social change in their communities and throughout the world. The MSW degree program prepares students for generalist or specialized practice and offers three tracks, including Crisis and Response Interventions, Trauma, and Medical Social Work.
The MSW degree program aims to develop and empower students to be agents of social change in their communities and throughout the world. The MSW degree program prepares students for generalist or specialized practice and offers three tracks, including Crisis and Response Interventions, Trauma, and Medical Social Work. The program offers both a traditional and advanced standing option.
Walden For more than 50 years, Walden has provided an engaging learning experience for working professionals. Walden’s mission is to provide a diverse community of career professionals with the opportunity to transform themselves as scholar-practitioners so that they can effect positive social change.
Chamberlain enrolls students in its graduate MPAS program once a year in the September session. Walden For more than 50 years, Walden has provided an engaging learning experience for working professionals. Walden’s mission is to provide a diverse community of career professionals with the opportunity to transform themselves as scholar-practitioners so that they can effect positive social change.
However, an institution with a score of less than 1.0 may continue to participate in the Title IV programs under provisional certification.
An institution with a score of less than 1.0 is not considered financially responsible but may continue to participate in the Title IV programs under provisional certification.
Walden competes with other educational institutions principally based on price, quality of education, reputation, learning modality, educational programs, and student services. Walden has over 50 years of experience offering high quality distance education with a mission to provide access to higher education for working professionals.
Walden competes with other educational institutions principally based on price, quality of education, reputation, learning modality, educational programs, and student services. Walden has over 50 years of experience offering high quality distance education.
Nursing degree offerings include a three-year onsite and online Bachelor of Science in Nursing (“BSN”) degree, an online Registered Nurse (“RN”) to BSN (“RN-to-BSN”) degree completion option, an online Master of Science in Nursing (“MSN”) degree, including Family Nurse Practitioner (“FNP”) and other specialties, and the online Doctor of Nursing Practice (“DNP”) degree.
Chamberlain’s nursing degree offerings include a three-year onsite and online pre-licensure Bachelor of Science in Nursing (“BSN”) degree, an online post-licensure BSN degree completion option for Registered Nurses (“RN-BSN”), an online Master of Science in Nursing (“MSN”) degree, including Nurse Practitioner tracks and other specialties, and the online Doctor of Nursing Practice (“DNP”) degree.
Medical and Veterinary AUC and RUSM compete with approximately 150 U.S. schools of medicine, 48 U.S. colleges of osteopathic medicine, and more than 40 Caribbean medical schools as well as with international medical schools recruiting U.S. students who may be eligible to receive funding from ED Title IV programs.
Medical and Veterinary AUC and RUSM compete with U.S. schools of medicine, U.S. colleges of osteopathic medicine, and Caribbean medical schools as well as with international medical schools recruiting U.S. students who may be eligible to receive funding from ED Title IV programs. RUSVM competes with U.S.-based and international AVMA accredited schools.
Accredited institutions are subject to periodic review by accrediting bodies to ensure continued high performance and institutional and program improvement and integrity, and to confirm that accreditation requirements continue to be satisfied.
Accredited institutions are subject to periodic review by accrediting bodies to ensure continued high performance and institutional and program improvement and integrity, and to confirm that accreditation requirements continue to be satisfied. Chamberlain Chamberlain is institutionally accredited by the HLC, an institutional accreditation agency recognized by ED.
Like any other educational institution, Adtalem’s administration of these programs is periodically reviewed by various regulatory agencies and is subject to audit or investigation by other governmental authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding. U.S.
Like any other educational institution, Adtalem’s institutions’ administration of these programs is periodically reviewed by regulatory agencies and is subject to audit or investigation by other authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding. Our domestic postsecondary institutions are subject to extensive federal and state regulations.
Chamberlain also offers four direct-care nurse practitioner tracks: FNP, Adult-Gerontology Acute Care Nurse Practitioner (“AGACNP”), Adult-Gerontology Primary Care Nurse Practitioner (“AGPCNP”), and Psychiatric-Mental Health Nurse Practitioner (“PMHNP”). The FNP and AGPCNP programs require 45 credit hours and 650 lab and clinical hours and are designed to be completed in two and a half years of part-time study.
Chamberlain also offers four direct-care nurse practitioner tracks: Family Nurse Practitioner (“FNP”), Adult-Gerontology Acute Care Nurse Practitioner (“AGACNP”), Adult-Gerontology Primary Care Nurse Practitioner 2 Table of Contents (“AGPCNP”), and Psychiatric-Mental Health Nurse Practitioner (“PMHNP”). The FNP, AGPCNP, AGACNP, and PMHNP, programs are designed to be completed in two and a half years of part-time study.
Walden also has experience in delivering accelerated course-based programs where students can combine customized and classroom modalities to speed their time to completion (for example, the Accelerated Master of Science in Education) and degree completion programs (for example, the RN-to-BSN). Walden currently offers 17 programs/specializations and 2 certificates in a direct assessment competency-based education format through its Tempo® Learning modality.
Walden also has experience in delivering accelerated course-based programs where students can customize modalities to speed their time to completion and degree completion programs (for example, the RN-BSN). Walden currently offers more than 25 programs/specializations and 1 certificate in a direct assessment competency-based education format through its Tempo® Learning modality.
Changes in or new interpretations of applicable laws, rules, or regulations could have a material adverse effect on our eligibility to participate in Title IV programs, accreditation, authorization to operate in various states, permissible activities, and operating costs. The failure to maintain or renew any required regulatory approvals, accreditation, or state authorizations could have a material adverse effect on us.
Changes in or new interpretations of applicable laws, rules, or regulations could have a material adverse effect on our eligibility or cost to participate in Title IV programs, to meet accreditation standards or comply with state authorization requirements. The failure to maintain or renew any required regulatory approvals, accreditation, or state authorizations could have a material adverse effect on us.
As of June 30, 2023, total student enrollment at Walden was 4 Table of Contents 37,582, a decrease of 4.8% compared to June 30, 2022. A primarily graduate institution, Walden has ranked #1 among 380 accredited institutions for awarding research doctorates to African American students and #1 in awarding graduate degrees in multiple disciplines to African American students.
As of June 30, 2024, total student enrollment at Walden was 41,845, an increase of 11.3% compared to June 30, 2023. A primarily graduate institution, Walden has ranked #1 among 380 accredited institutions for awarding research doctorates to African American students and #1 in awarding graduate degrees in multiple disciplines to African American students.
BSN, MSN, DNP, and post-graduate Advanced Practice Registered Nurses (“APRN”) certificate programs are accredited by the Commission on Collegiate Nursing Education (“CCNE”). Chamberlain’s MPH program is accredited by the Council on Education for Public Health. Chamberlain’s MSW program is accredited by the Council on Social Work Education’s Commission on Accreditation.
In addition to institutional accreditation, Chamberlain has also obtained programmatic accreditation for specific programs. BSN, MSN, DNP, and post-graduate Advanced Practice Registered Nurses (“APRN”) certificate programs are accredited by the Commission on Collegiate Nursing Education (“CCNE”). Chamberlain’s MPH program is accredited by the Council on Education for Public Health. Chamberlain’s MSW program is accredited by the CSWE’s Commission on Accreditation.
The MS in Project Management program is accredited by the Project Management Institute Global Accreditation Center for Project Management Education Programs. Additionally, Walden is an accredited provider of continuing education credits by the American Nursing Credentialling Center. Medical and Veterinary The Government of St. Maarten authorizes AUC to confer the Doctor of Medicine degree.
Additionally, Walden is an accredited provider of continuing education credits by the American Nursing Credentialling Center. Medical and Veterinary The Government of St. Maarten authorizes AUC to confer the Doctor of Medicine degree. AUC is accredited by the Accreditation Commission on Colleges of Medicine (“ACCM”).
Bachelor’s All applicants are required to have earned, at a minimum, a recognized high school diploma, high school equivalency certificate, or other state-recognized credential of high school completion.
Additional materials or requirements to submit may vary depending on the academic program. All applicants to the bachelor’s program are required to have earned, at a minimum, a recognized high school diploma, high school equivalency certificate, or other state-recognized credential of high school completion.
AUC’s and RUSM’s programs consist of three academic semesters per year, which begin in January, May, and September, allowing students to begin their basic science instruction at the most convenient time for them.
AUC’s and RUSM’s programs consist of three academic semesters per year, which begin in January, May, and September, allowing students to begin their basic science instruction at the most convenient time for them. Initially, AUC and RUSM students complete a program of concentrated study of medical sciences after which eligible students sit for U.S.
A minimum score of 1.5 is necessary to meet ED’s financial standards. Institutions with scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible but require additional oversight. These institutions are subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is considered not financially responsible.
A score greater than or equal to 1.5 indicates the institution is considered financially responsible. Scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible but require additional oversight. For example, institutions with scores in this range are subject to heightened cash monitoring and other participation requirements.
Despite this expansion, management believes the imbalance will continue to spur demand for medical and veterinary education. Accreditation and Other Regulatory Approvals Educational institutions and their individual programs are awarded accreditation by achieving a level of quality that entitles them to the confidence of the educational community and the public they serve.
Accreditation and Other Regulatory Approvals Educational institutions and their individual programs are awarded accreditation by achieving a level of quality that entitles them to the confidence of the educational community and the public they serve.
The Postgraduate Studies program offers Master of Science and Ph.D. degrees in all research areas supported by RUSVM. Areas of emphasis are guided by RUSVM's themed research centers. Regulatory Environment Financial Aid All financial aid and assistance programs are subject to political and governmental budgetary considerations.
The Postgraduate Studies program offers Master of Science and Ph.D. degrees in all research areas supported by RUSVM. Areas of emphasis are guided by RUSVM's themed research centers. Financial Aid Like other higher education companies, Adtalem is dependent upon the timely receipt of federal financial aid funds. All public financial aid programs are subject to political and governmental budgetary considerations.
The program can be completed in five to six semesters of study. Chamberlain’s College of Health Professions MPH degree program focuses on preparing students to become public health practitioners to work with communities and populations globally to promote healthy communities and to prevent community health problems such as disease, poverty, health access disparities, and violence through interdisciplinary coursework.
Chamberlain’s College of Health Professions MPH degree program focuses on preparing students through interdisciplinary coursework to become public health practitioners serving communities and populations to promote healthy communities and to work to address health problems and health-related issues such as disease, poverty, health access disparities, and violence.
The market consists of two distinct segments: pre-licensure nursing programs that prepare students to take the NCLEX-RN licensure exam and post-licensure nursing programs that allow existing RNs to advance their education. In the pre-licensure nursing market, capacity limitations and restricted new student enrollment are common among traditional four-year educational institutions and community colleges.
These include four-year educational institutions, two-year community colleges, and less-than-2-year schools. The market consists of two distinct segments: pre-licensure nursing programs that prepare students to take the NCLEX-RN licensure exam and post-licensure nursing programs that allow existing RNs to advance their education.
(“Laureate” or “Seller”) in exchange for a purchase price of $1.5 billion in cash (the “Acquisition”). On March 10, 2022, we completed the sale of Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Becker Professional Education (“Becker,”) and OnCourse Learning (“OCL”) for $962.7 million, net of cash of $21.5 million, subject to post-closing adjustments.
On March 10, 2022, Adtalem completed the sale of Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Becker Professional Education (“Becker,”) and OnCourse Learning (“OCL”) for $962.7 million, net of cash 1 Table of Contents of $21.5 million, subject to post-closing adjustments. On June 17, 2022, Adtalem completed the sale of EduPristine for de minimis consideration.
Every educational institution participating in the Title IV programs must be certified to participate and is required to periodically renew this certification. Institutions that violate certain ED Title IV regulations, including its financial responsibility and administrative capability regulations, may lose their eligibility to participate in Title IV programs or may only continue participation under provisional certification.
Every educational institution participating in the Title IV programs must be certified to participate through a PPA and certification must be periodically renewed. Institutions that violate certain ED Title IV regulations or the terms of the PPA may lose eligibility to participate in Title IV programs or may only continue participation under provisional certification.
Department of Education National Committee on Foreign Medical Education and Accreditation (“NCFMEA”) has affirmed that the ACCM has established and enforces standards of educational accreditation that are comparable to those promulgated by the U.S. Liaison Committee on Medical Education (“LCME”).
The ACCM is an international medical school accrediting organization for countries that do not have a national medical school accreditation body. The U.S. Department of Education National Committee on Foreign Medical Education and Accreditation (“NCFMEA”) has affirmed that the ACCM has established and enforces standards of educational accreditation that are comparable to those promulgated by the U.S.
The BSN program enables students to complete their BSN degree in three years of full-time study as opposed to the typical four-year BSN program with summer breaks. Beginning in September 2019, Chamberlain also 2 Table of Contents began offering an evening/weekend BSN option at select campuses.
Chamberlain’s pre-licensure BSN program enables students to complete their degree in three years of full-time study as opposed to the typical four-year BSN program with summer breaks. Beginning in September 2019, Chamberlain began offering an evening/weekend BSN option at select campuses. In September 2020, Chamberlain launched its online BSN option that offers a blend of flexibility, interactivity, and experiential learning.
The American Rescue Plan Act of 2021 (the “Rescue Act”) enacted on March 11, 2021 amended the 90/10 rule to require that a proprietary institution derive no more than 90% of its revenue from federal education assistance funds, including but not limited to previously excluded U.S. Department of Veterans Affairs and military tuition assistance benefits.
In March 2021, the American Rescue Plan Act amended the 90/10 calculation to require no more than 90% of revenue at proprietary institutions be derived from any federal education assistance funds, including but not limited to previously excluded U.S. Department of Veterans Affairs benefits and Department of Defense tuition assistance funds.
Applicants may be offered conditional admission to Walden with a stipulation for academic performance at the level of a cumulative grade point average of 3.0 or higher for master’s and doctoral students or a cumulative grade point average 5 Table of Contents of 2.0 or higher for undergraduate students, the successful completion of academic progress requirements during the initial term(s) of enrollment, the completion of prerequisites, and/or other stipulations (including receipt of official records).
Applicants may be offered conditional admission to Walden with a stipulation for academic performance at the level of a grade point average of 3.0 or higher for master’s and doctoral students or a grade point average of 2.0 or higher for undergraduate students, the successful completion of academic progress requirements during the initial term(s) of enrollment, the completion of prerequisites, and/or other stipulations (including receipt of official records). 4 Table of Contents Medical and Veterinary Together, AUC, RUSM, and RUSVM, along with the Medical Education Readiness Program (“MERP”) and the Veterinary Preparation Program, had 4,726 students enrolled in the May 2024 semester, a decrease of 2.9% compared to the same semester last year.
The committee reviews applicants using a weighted 3 Table of Contents evaluation system that considers several factors which may include previous coursework, grade point average, ACT/SAT scores and Health Education Systems, Inc. (“HESI”) Admission Assessment (A2) scores.
The committee reviews applicants using a weighted evaluation system that considers several factors which may include previous coursework, grade point average, ACT/SAT scores and Health Education Systems, Inc. (“HESI”) Admission Assessment (A2) scores. All applicants deemed academically eligible by the committee must initiate drug, background, and fingerprint screenings, and clear all screenings within 120 days of the session start date.
The MPAS degree program prepares students for the practice of general medicine as Physician Assistants in collaboration with a licensed physician and healthcare team. The program requires 109 credit hours, including 1,440 of direct patient care and is designed to be completed in two years.
The advanced standing option is for students who have completed a baccalaureate degree in social work. The MPAS degree program prepares students for the practice of general medicine as Physician Assistants in collaboration with a licensed physician and healthcare team and is designed to be completed in two years.
Default rates for Chamberlain, Walden, AUC, RUSM, and RUSVM students are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Cohort Default Rate ​ ​ 2019 ​ 2018 Chamberlain University ​ 0.5 % 2.6 % Walden University ​ 1.1 % 4.7 % American University of the Caribbean School of Medicine ​ 0.2 % 0.7 % Ross University School of Medicine ​ 0.2 % 0.9 % Ross University School of Veterinary Medicine ​ 0.2 % 0.4 % 19 Table of Contents Satisfactory Academic Progress In addition to the requirements that educational institutions must meet, student recipients of financial aid must maintain satisfactory academic progress toward completion of their program of study and an appropriate grade point average.
The default rate has been declining over the past few years due to COVID relief measures which included a freeze on loan payments and suspension of default statuses. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cohort Default Rate ​ ​ 2020 ​ 2019 2018 Chamberlain University ​ 0.0 % 0.5 % 2.6 % Walden University ​ 0.0 % 1.1 % 4.7 % American University of the Caribbean School of Medicine ​ 0.0 % 0.2 % 0.7 % Ross University School of Medicine ​ 0.0 % 0.2 % 0.9 % Ross University School of Veterinary Medicine ​ 0.0 % 0.2 % 0.4 % Satisfactory Academic Progress In addition to the requirements that educational institutions must meet, student recipients of financial aid must maintain satisfactory academic progress toward completion of their program of study and an appropriate grade point average.
Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted $31.9 million of surety bonds with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM. 20 Table of Contents Certain states have set standards of financial responsibility that differ from those prescribed by federal regulation.
In the U.S., Adtalem has posted $44.3 million of surety bonds as of June 30, 2024 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM. Certain states have standards of financial responsibility that differ from those prescribed by federal regulation.
The overall experience results of these surveys are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2023 ​ ​ Fiscal Year 2022 ​ ​ ​ Favorability ​ ​ Favorability ​ Survey ​ (top 2 ratings) ​ ​ (top 2 ratings) ​ Preboarding (week one) ​ 92 % ​ 89 % Quality of hire (3 months) ​ 75 % ​ 68 % Onboarding (6 months) ​ 86 % ​ 85 % Exit survey ​ 56 % ​ 45 % Diversity, Equity, and Inclusion (“DEI”) continue to be core tenets of our culture at Adtalem.
The overall experience results of these surveys were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2024 ​ ​ Fiscal Year 2023 ​ ​ ​ Favorability ​ ​ Mercer Benchmark ​ ​ Favorability ​ Survey ​ (top 2 ratings) ​ ​ (top 2 ratings) ​ ​ (top 2 ratings) ​ 30-Day check-in ​ 93 % ​ 73 % ​ 92 % 6-Month check-in ​ 85 % ​ 75 % ​ 86 % Exit survey ​ 68 % ​ n/a ​ ​ 56 % Diversity, Equity, and Inclusion (“DEI”) continue to be core tenets of our culture at Adtalem.
The purpose of Adtalem is to empower students to achieve their goals, find success, and make inspiring contributions to our global community. Adtalem’s institutions offer a wide array of programs, with a primary focus on healthcare programs.
The purpose of Adtalem is to empower students to achieve their goals, find success, and make inspiring contributions to our global community. The Adtalem family of institutions offers programs with a focus in healthcare, including nursing, medicine, veterinary medicine, social and behavioral sciences, and more.
The failure of an institution to satisfy any of the criteria used to assess administrative capability may cause ED to determine that the institution lacks administrative capability and, therefore, subject the institution to additional scrutiny or deny its eligibility for Title IV programs. ED has proposed rules to amend the administrative capability regulations.
The failure of an institution to satisfy any of the criteria may cause ED to determine that the institution lacks administrative capability and, therefore, subject the institution to additional scrutiny, provisional certification, or revocation of eligibility for Title IV programs. ED recently amended the administrative capability regulations and the changes took effect July 1, 2024.
Adtalem believes its institutions are in compliance with all state requirements as an out-of-state institution. AUC and RUSM clinical programs are accredited as part of their programs of medical education by their respective accrediting bodies, approved by the appropriate boards in those states that have a formal process to do so, and are reported to ED as required.
AUC, RUSM, and RUSVM clinical programs are accredited as part of their programs of education by their respective accrediting bodies, approved by the appropriate boards in those states that have a formal process to do so, and are reported to ED as required. Many states require private-sector postsecondary education institutions to post surety bonds for licensure.
Students are eligible to do clinical rotations at AUC’s clinical sites, which include hospitals in the U.S., the U.K., and Canada. This program is aimed at preparing students for USMLEs.
The program offers students a Post Graduate Diploma in International Medical Sciences from UCLAN, followed by their Doctor of Medicine degree from AUC. Students are eligible to do clinical rotations at AUC’s clinical sites, which include hospitals in the U.S., Canada, and the U.K. This program is aimed at preparing students for USMLEs.
Candidates for admission must interview with an admissions representative and all admission decisions are made by the admissions committees of the medical and veterinary schools. AUC allows several entrance examinations for its international students.
Candidates for admission must interview with an admissions representative and all admission decisions are made by the admissions committees of the medical and veterinary schools. AUC allows several entrance examinations for its international students. Market Trends and Competition Chamberlain Chamberlain competes in the U.S. nursing education market, which has more than 2,000 programs leading to RN licensure.
RUSVM students complete a seven-semester, pre-clinical curriculum at the campus in St. Kitts. After completing their pre-clinical curriculum, RUSVM students enter a clinical clerkship under RUSVM direction lasting approximately 45 weeks at one of 31 clinical affiliates located in the U.S., Canada, Australia, Ireland, New Zealand, and the U.K.
After completing their pre-clinical curriculum, RUSVM students enter a clinical clerkship under RUSVM direction lasting approximately 45 weeks at clinical affiliates located in the U.S., Canada, Australia, Ireland, New Zealand, and the U.K. RUSVM offers a one-semester Veterinary Preparatory Program (“Vet Prep”) designed to enhance the pre-clinical science knowledge and study skills that are critical to success in veterinary school.
Initially, AUC and RUSM students complete a program of concentrated study of medical sciences after which they sit for Step 1 of the USMLE, which assesses whether students understand and can apply scientific concepts that are basic to the practice of medicine.
Medical Licensing Examination (“USMLE”), Step 1, which assesses whether students understand and can apply scientific concepts that are basic to the practice of medicine.
Adtalem’s executive offices are located at 500 West Monroe Street, Chicago, Illinois, 60661, and the telephone number is (312) 651-1400. Adtalem is a national leader in post-secondary education and a leading provider of professional talent to the healthcare industry.
Our executive offices are located at 500 West Monroe Street, Chicago, Illinois, 60661, and the telephone number is (312) 651-1400. Adtalem is the leading healthcare educator in the U.S and a systemically important solution for preparing a diverse talent workforce that meets the needs of the healthcare industry.
Chamberlain enrolls students in its RN-to-BSN program six times per year, during the January, March, May, July, September, and November sessions.
Chamberlain enrolls students in its RN-BSN program six times per year, during the January, March, May, July, September, and November sessions. Graduate Programs To enroll in graduate programs, students must have the requisite undergraduate academic degree from an accredited institution and a specified minimum grade point average.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeUnresolved investigations, claims, and actions, or adverse resolutions or settlements thereof, could also result in additional inquiries, administrative actions or lawsuits, increased scrutiny, the withholding of authorizations, and/or the imposition of other sanctions by state education and professional licensing authorities, taxing authorities, our accreditors and other regulatory agencies governing us, which, individually or 25 Table of Contents in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
Biggest changeUnresolved investigations, claims, and actions, or adverse resolutions or settlements thereof, could also result in additional inquiries, administrative actions or lawsuits, increased scrutiny, the withholding of authorizations, and/or the imposition of other sanctions by state education and professional licensing authorities, taxing authorities, our accreditors and other regulatory agencies governing us, which, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. 16 Table of Contents Government and regulatory agencies and third parties have initiated, and could initiate additional investigations, claims, or actions against us, which could require us to pay monetary damages, halt certain business practices, or receive other sanctions.
These new laws, regulations, and interpretations may relate to issues such as online privacy, copyrights, trademarks and service marks, sales taxes, value-added taxes, withholding taxes, cost of internet access, and services, allocation, and apportionment of income amongst various state, local, and foreign jurisdictions, fair business practices, and the requirement that online education institutions qualify to do business as foreign corporations or be licensed in one or more jurisdictions where they have no physical location or other presence.
These laws, regulations, and interpretations may relate to issues such as online privacy, copyrights, trademarks and service marks, sales taxes, value-added taxes, withholding taxes, cost of internet access, and services, allocation, and apportionment of income amongst various state, local, and foreign jurisdictions, fair business practices, and the requirement that online education institutions qualify to do business as foreign corporations or be licensed in one or more jurisdictions where they have no physical location or other presence.
A breach, theft, or loss of personal information regarding our students and their families, customers, employees, or contractors that is held by us or our vendors could have a material adverse effect on our reputation and results of operations and result in liability under state and federal privacy statutes and legal actions by federal or state authorities and private litigants, any of which could have a material adverse effect on our business and result in the imposition of significant restrictions on us and our ability to operate.
A breach, theft, or loss of personal information regarding our students and their families, employees, or contractors that is held by us or our vendors could have a material adverse effect on our reputation and results of operations and result in liability under state and federal privacy statutes and legal actions by federal or state authorities and private litigants, any of which could have a material adverse effect on our business and result in the imposition of significant restrictions on us and our ability to operate.
Due to the highly regulated nature of proprietary postsecondary institutions, we are subject to audits, compliance reviews, inquiries, complaints, investigations, claims of non-compliance, and lawsuits by federal and state governmental agencies, regulatory agencies, accrediting agencies, present and former students and employees, shareholders, and other third parties, any of whom may allege violations of any of the legal and regulatory requirements applicable to us.
Due to the regulated nature of proprietary postsecondary institutions, we are subject to audits, compliance reviews, inquiries, complaints, investigations, claims of non-compliance, and lawsuits by federal and state governmental agencies, regulatory agencies, accrediting agencies, present and former students and employees, shareholders, and other third parties, any of whom may allege violations of any of the legal and regulatory requirements applicable to us.
Risks and uncertainties that may affect Adtalem’s business include the following: Risks Related to Adtalem’s Highly Regulated Industry We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Adtalem portfolio with numerous laws and regulations in the U.S. and foreign jurisdictions applicable to the postsecondary education industry.
Risks and uncertainties that may affect Adtalem’s business include the following: Risks Related to Adtalem’s Regulated Industry We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Adtalem portfolio with numerous laws and regulations in the U.S. and foreign jurisdictions applicable to the postsecondary education industry.
ED regulations could require Adtalem to post multiple and substantial letters of credit or other securities in connection with, among other things, certain pending and future claims, investigations, and program reviews, regardless of the merits of our actions or available defenses, or, potentially, the severity of any findings or facts stipulated.
Nevertheless, ED regulations could require Adtalem to post multiple and substantial letters of credit or other securities in connection with, among other things, certain pending and future claims, investigations, and program reviews, regardless of the merits of our actions or available defenses, or, potentially, the severity of any findings or facts stipulated.
We rely upon our information technology systems and infrastructure for operating our business. We could experience theft of sensitive date or confidential information or reputational damage from malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers.
We rely upon our information technology systems and infrastructure for operating our business. We could experience theft of sensitive data or confidential information or reputational damage from malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers.
These regulations may, among other things, subject us to sanctions for statements containing errors made to non-students, including any member of the public, impose liability on us for the conduct of others and expose us to liability even when no actual harm occurs.
These regulations may, among other things, subject us to claims of sanctions for statements containing errors made to non-students, including any member of the public, impose liability on us for the conduct of others and expose us to liability even when no actual harm occurs.
As a result, we may face complaints from students and prospective students over statements made by us and our agents in advertising and marketing, during the enrollment, admissions and financial aid process, and throughout attendance at any of our Title IV Institutions, which would expose us to increased risk of enforcement action and applicable sanctions or other penalties, including potential Defense to Repayment liabilities, and increased risk of private qui tam actions under the Federal False Claims Act.
As a result, we may face complaints from students and prospective students over statements made by us and our agents in advertising and marketing, during the enrollment, admissions and financial aid process, and throughout attendance at any of our Title IV institutions, which would expose us to increased risk of enforcement action and applicable sanctions or other penalties, including potential Defense to Repayment liabilities, and increased risk of private qui tam actions under the Federal False Claims 19 Table of Contents Act.
If any of our third-party servicers discontinues providing such services to us, we may not be able to replace such third-party servicer in a timely, cost-efficient, or effective 33 Table of Contents manner, or at all, and we could lose our ability to comply with collection, lending, and Title IV requirements, which could have a material adverse effect on our enrollment, revenue, and results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
If any of our third-party servicers discontinues providing such services to us, we may not be able to replace such third-party servicer in a timely, cost-efficient, or effective manner, or at all, and we could lose our ability to comply with collection, lending, and Title IV requirements, which could have a material adverse effect on our enrollment, revenue, and results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
Alleged violations of such laws or regulations may form the basis of civil actions for violation of state and/or federal false claims statutes predicated on violations of a PPA, including pursuant to lawsuits brought by private 27 Table of Contents plaintiffs on behalf of governments (qui tam actions), that have the potential to generate very significant damages linked to our receipt of Title IV funding from the government over a period of several years.
Alleged violations of such laws or regulations may form the basis of civil actions for violation of state and/or federal false claims statutes predicated on violations of a PPA, including pursuant to lawsuits brought by private plaintiffs on behalf of governments (qui tam actions), that have the potential to generate very significant damages linked to our receipt of Title IV funding from the government over a period of several years.
To participate in Title IV programs, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an accrediting commission recognized by ED, and be certified by ED as an eligible institution, which ultimately is accomplished through the execution of a PPA.
To participate in Title IV programs, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an accrediting agency recognized by ED, and be certified by ED as an eligible institution, which ultimately is accomplished through the execution of a PPA.
Some of our competitors, both public and private, are able to offer programs similar to ours at a lower tuition level 35 Table of Contents for a variety of reasons, including the availability of direct and indirect government subsidies, government and foundation grants, large endowments, tax-deductible contributions, and other financial resources not available to proprietary institutions, or by providing fewer student services or larger class sizes.
Some of our competitors, both public and private, are able to offer programs similar to ours at a lower tuition level for a variety of reasons, including the availability of direct and indirect government subsidies, government and foundation grants, large endowments, tax-deductible contributions, and other financial resources not available to proprietary institutions, or by providing fewer student services or larger class sizes.
We may experience business interruptions resulting from natural disasters, inclement weather, transit disruptions, political disruptions, or other events in one or more of the geographic areas in which we operate, particularly in the West Coast and Gulf States of the U.S., and the Caribbean.
We may experience business interruptions or casualty losses resulting from natural disasters, inclement weather, transit disruptions, political disruptions, or other events in one or more of the geographic areas in which we operate, particularly in the West Coast and Gulf States of the U.S., and the Caribbean.
Government regulations relating to the internet could increase our cost of doing business and affect our ability to grow. The use of the internet and other online services has led to and may lead to the adoption of new laws and regulations in the U.S. or foreign countries and to new interpretations of existing laws and regulations.
Government regulations relating to the internet could increase our cost of doing business and affect our ability to grow. The use of the internet and other online services has led to and may lead to the adoption of laws and regulations in the U.S. or foreign countries and to changing interpretations of existing laws and regulations.
This intense competition could make it more challenging for us to enroll students who are likely to succeed in our educational programs, which could adversely affect our new student enrollment levels and student persistence and put downward pressure on our tuition rates, any of which could materially and adversely affect our business, financial condition, results of operations, and cash flows.
This intense competition 24 Table of Contents could make it more challenging for us to enroll students who are likely to succeed in our educational programs, which could adversely affect our new student enrollment levels and student persistence and put downward pressure on our tuition rates, any of which could materially and adversely affect our business, financial condition, results of operations, and cash flows.
Government budgetary pressures and changes to laws governing financial aid programs could reduce our student enrollment or delay our receipt of tuition payments. Our Title IV Institutions collectively receive 72% of their revenue from Title IV programs.
Government budgetary pressures and changes to laws governing financial aid programs could reduce our student enrollment or delay our receipt of tuition payments. Our Title IV institutions collectively receive 75% of their revenue from Title IV programs.
If any of our Title IV Institutions lose eligibility to participate in Title IV programs because of high student loan default rates, it would have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
If any of our Title IV institutions lose eligibility to participate in Title IV programs because of high student loan default rates, it would have a material adverse effect on our business, financial 21 Table of Contents condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
In addition, Adtalem has benefitted from the ability to enter into international intercompany arrangements without incurring U.S. taxation due to a law, which expires in fiscal year 2026, deferring U.S. taxation of “foreign personal holding company income” such as foreign income from dividends, interest, rents, and royalties.
In addition, Adtalem has benefitted from the ability to enter into international intercompany arrangements without incurring 27 Table of Contents U.S. taxation due to a law, which expires in fiscal year 2026, deferring U.S. taxation of “foreign personal holding company income” such as foreign income from dividends, interest, rents, and royalties.
Pursuant to applicable state limited liability company laws and other laws and regulations, our non-guarantor subsidiaries may not be able to, or may not be permitted to, make distributions to us in order 39 Table of Contents to enable us to make payments in respect of the Notes (as defined in Note 14 “Debt” to the Consolidated Financial Statements in Item 8.
Pursuant to applicable state limited liability company laws and other laws and regulations, our non-guarantor subsidiaries may not be able to, or may not be permitted to, make distributions to us in order to enable us to make payments in respect of the Notes (as defined in Note 14 “Debt” to the Consolidated Financial Statements in Item 8.
As a result, foreseeable and unforeseeable consequences of prior and prospective adjudicated or settled legal proceedings and regulatory matters could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
As a result, foreseeable and unforeseeable consequences of prior and prospective adjudicated or settled legal proceedings and regulatory matters 17 Table of Contents could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
If any of the following risks are realized, Adtalem’s business, results of operations, financial condition, and cash flows could be materially and adversely affected, and as a result, the price of Adtalem’s common stock could be materially and adversely 24 Table of Contents affected. Management cannot predict all the possible risks and uncertainties that may arise.
If any of the following risks are realized, Adtalem’s business, results of operations, financial condition, and cash flows could be materially and adversely affected, and as a result, the price of Adtalem’s common stock could be materially and adversely affected. Management cannot predict all the possible risks and uncertainties that may arise.
In the event of any bankruptcy affecting one or more of our Title IV Institutions, ED 31 Table of Contents could hold our other Title IV Institutions jointly liable for any Title IV program liabilities, whether asserted or unasserted at the time of such bankruptcy, of the institution whose Title IV program eligibility was terminated.
In the event of any bankruptcy affecting one or more of our Title IV institutions, ED could hold our other Title IV institutions jointly liable for any Title IV program liabilities, whether asserted or unasserted at the time of such bankruptcy, of the institution whose Title IV program eligibility was terminated.
If these or other states continue to limit access to affiliation arrangements, our medical schools may be at a competitive disadvantage to other medical schools, and our medical schools may be required to substantially restrict their enrollment due to limited clinical opportunities for enrolled students.
If states limit access to affiliation arrangements, our medical schools may be at a competitive disadvantage to other medical schools, and our medical schools may be required to substantially restrict their enrollment due to limited clinical opportunities for enrolled students.
If our business results and financial condition were materially and adversely impacted, then such intangible assets and goodwill could be impaired, requiring a possible write-off of up to $812.3 million of intangible assets and up to $961.3 million of goodwill.
If our business results and financial condition were materially and adversely impacted, then such intangible assets and goodwill could be impaired, requiring a possible write-off of up to $776.7 million of intangible assets and up to $961.3 million of goodwill.
Certain provisions in proposed legislation, if enacted, or implementation of existing or future law by a current or future administration, could have a material adverse effect on our business, including but not limited to legislation that limits the enrollment of U.S. citizens in foreign medical schools and legislation that could require institutions to share in the risk of defaulted federal student loans, and legislation that limits the percentage of revenue derived from federal funds.
Certain provisions in proposed legislation, if enacted, or implementation of existing or future law by a current or future administration, could have a material adverse effect on our business, including but not limited to legislation that limits the enrollment of U.S. citizens in foreign medical schools and legislation that could require institutions to share in the risk of defaulted federal student loans.
These events could cause us to close schools, temporarily or permanently, and could affect student recruiting opportunities in those locations, causing enrollment and revenue to decline, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
These events could impair the value of our assets and/or cause us to close schools, temporarily or permanently, and could affect student recruiting opportunities in those locations, causing enrollment and revenue to decline, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
As a result, we may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on our indebtedness.
As a result, we may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on 28 Table of Contents our indebtedness.
The performance and reliability of our computer networks and system applications, especially online educational platforms and student operational and financial aid packaging applications, are critical to our reputation and ability to attract and retain students.
The performance and reliability of our computer networks and system applications, especially online educational platforms and student operational and financial aid packaging applications, are critical to our reputation and ability to 25 Table of Contents attract and retain students.
We face heightened competition in the postsecondary education market from both public and private educational institutions. Postsecondary education in our existing and new market areas is highly competitive and is becoming increasingly so. We compete with traditional public and private two-year and four-year colleges, other proprietary schools, and alternatives to higher education.
We face heightened competition in the postsecondary education market from both public and private educational institutions. Postsecondary education in our existing and new market areas is competitive. We compete with traditional public and private two-year and four-year colleges, other proprietary schools, and alternatives to higher education.
In addition, the reduction or elimination of these non-Title IV sources of student funding may adversely affect our 90/10 Rule percentage. We could be subject to sanctions if we fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program.
In addition, the reduction or elimination of these non-Title IV sources of student funding may adversely affect our 90/10 rate. 22 Table of Contents We could be subject to sanctions if we fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program.
Uncertainty regarding our future financial performance may limit our ability to attract new employees with competitive compensation or increase our cost of recruiting and retaining such new employees. 37 Table of Contents We may not be able to successfully identify, pursue, or integrate acquisitions. As part of our strategy, we are actively considering acquisition opportunities primarily in the U.S.
Uncertainty 26 Table of Contents regarding our future financial performance may limit our ability to attract new employees with competitive compensation or increase our cost of recruiting and retaining such new employees. We may not be able to successfully integrate acquisitions. As part of our strategy, we are actively exploring acquisition opportunities primarily in the U.S.
For example, recent changes to U.S. tax laws significantly impacted how U.S. multinational corporations are taxed on foreign earnings. Numerous countries are evaluating their existing tax laws, due in part to recommendations made by the Organization for Economic Co-operation and Development’s (“OECD’s”) Base Erosion and Profit Shifting (“BEPS”) project, including the imposition of a global minimum tax.
For example, recent changes to U.S. tax laws significantly impacted how U.S. multinational corporations are taxed on foreign earnings. Numerous countries are evaluating their existing tax laws, due in part to recommendations made by the Organization for Economic Co-operation and Development’s (“OECD’s”) Base Erosion and Profit Shifting (“BEPS”) project.
These factors are heavily influenced by 28 Table of Contents broader economic drivers, including the personal or family wealth of our students, the overall employment outlook for their area of study, and the availability of private financing sources.
These factors are influenced by broader economic drivers, including the personal or family wealth of our students, the overall employment outlook for their area of study, and the availability of private financing sources.
If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and to participate in Title IV programs in that state. Our Title IV Institutions must be authorized to operate by the appropriate postsecondary regulatory authority in each state in which the institution is located.
If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and to participate in Title IV programs in that state. Our Title IV institutions must be authorized to operate by the appropriate postsecondary regulatory authority in each state in which the institution is located. See “State Authorization” in Item 1.
Such events could have a material adverse effect on the reputation of our institutions, our financial 36 Table of Contents condition, results of operations, and cash flows.
Such events could have a material adverse effect on the reputation of our institutions, our financial condition, results of operations, and cash flows.
Inaccurate or untimely reporting could result in suspension or termination of our eligibility to participate in these federal and state programs and have a material adverse impact on enrollment and revenue, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
Inaccurate or untimely reporting or administration 23 Table of Contents of funds to students could result in suspension or termination of our eligibility to participate in these federal and state programs and have a material adverse impact on enrollment and revenue, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We may not be able to attract, retain, and develop key employees necessary for our operations and the successful execution of our strategic plans . We may be unable to attract, retain, and develop key employees with appropriate educational qualifications and experience.
We may not be able to attract, retain, and develop key employees necessary for our operations and the successful execution of our strategic plans . We may be unable to attract, retain, and develop key employees with appropriate educational qualifications and experience. In addition, we may be unable to effectively plan and prepare for changes in key employees.
As of June 30, 2023, intangible assets from business combinations totaled $812.3 million and goodwill totaled $961.3 million. Together, these assets equaled 63% of total assets as of such date.
As of June 30, 2024, intangible assets from business combinations totaled $776.7 million and goodwill totaled $961.3 million. Together, these assets equaled 63% of total assets as of such date.
An economic downturn could impact these factors, which could have a material adverse effect on our business, financial condition, results of operation, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. ED rules prohibiting “substantial misrepresentation” are very broad.
An economic downturn could impact these factors, which could have a material adverse effect on our business, financial condition, results of operation, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
AUC and RUSM enter into affiliation agreements with hospitals across the U.S. to place their third and fourth year students in clinical programs at such hospitals. Certain states with regulatory programs that require state approval of clinical education programs have in recent years precluded, limited, or imposed onerous requirements on Adtalem’s entry into affiliation agreements with hospitals in their states.
AUC and RUSM enter into affiliation agreements with hospitals across the U.S. to place their third and fourth year students in clinical programs at such hospitals. Certain states with regulatory programs that require state approval of clinical education programs may preclude, limit, or impose onerous requirements on Adtalem’s entry into affiliation agreements with hospitals in their states.
As a result, even though Adtalem’s Title IV Institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Adtalem’s other Title IV Institutions and Adtalem as a whole and could result in the imposition of significant restrictions on the ability for Adtalem’s other Title IV Institutions and Adtalem as a whole to operate.
As a result, even though Adtalem’s Title IV institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Adtalem’s other Title IV institutions.
Under the Higher Education Act (“HEA”), ED is authorized to specify in regulations, which acts or omissions of an institution of higher education a borrower may assert as a Defense to Repayment of a Direct Loan made under the Federal Direct Loan Program.
Under the Higher Education Act (“HEA”), ED is authorized to specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a Defense to Repayment of a Direct Loan made under the Federal Direct Loan Program. See “Borrower Defense to Repayment” in Item 1. “Business” for additional information.
“Financial Statements and Supplementary Data”) could serve as the basis for claims by students or ED under the Defense to Repayment regulations, the posting of substantial letters of credit, or the termination of eligibility of our institutions to participate in the Title IV program based on ED’s institutional capability assessment, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. 26 Table of Contents While we intend to defend ourselves vigorously in all pending and future legal proceedings, we may settle certain matters.
“Financial Statements and Supplementary Data”) could serve as the basis for claims by students or ED under the Defense to Repayment regulations, the posting of substantial letters of credit, or the termination of eligibility of our institutions to participate in the Title IV program based on ED’s institutional capability assessment, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
The outcome of any legal proceeding instituted by a private party or governmental authority, facts asserted in pending or future lawsuits, and/or the outcome of any future governmental inquiry, lawsuit, or enforcement action (including matters described in Note 21 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8.
Although legal action has for the time being blocked implementation of new Defense to Repayment regulations, the outcome of any legal proceeding instituted by a private party or governmental authority, facts asserted in pending or future lawsuits, and/or the outcome of any future governmental inquiry, lawsuit, or enforcement action (including matters described in Note 21 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8.
Due to the regulatory and enforcement efforts at times directed at proprietary postsecondary higher education institutions and adverse publicity arising from such efforts, we may face additional government and regulatory investigations and actions, lawsuits from private plaintiffs, and shareholder class actions and derivative claims.
The defense and resolution of these matters could require us to expend significant resources. Due to the regulatory and enforcement efforts at times directed at proprietary postsecondary higher education institutions and adverse publicity arising from such efforts, we may face additional government and regulatory investigations and actions, lawsuits from private plaintiffs, and shareholder class actions and derivative claims.
Moreover, regardless of the merits of our actions and defenses, if we are unable to resolve certain legal proceedings or regulatory actions, indirect consequences arising from unproven allegations or appealable regulatory findings may have adverse consequences to us.
While we intend to defend ourselves vigorously in all pending and future legal proceedings, we may settle certain matters. Moreover, regardless of the merits of our actions and defenses, if we are unable to resolve certain legal proceedings or regulatory actions, indirect consequences arising from unproven allegations or appealable regulatory findings may have adverse consequences to us.
If this law is not extended, or a similar law adopted, our consolidated tax provision would be impacted beginning in our fiscal year 2027, and we may not be able to allocate international capital optimally without realizing U.S. income taxes, which would increase our effective income tax rate and adversely impact our earnings and cash flows. 38 Table of Contents Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results.
If this law is not extended, or a similar law adopted, our consolidated tax provision would be impacted beginning in our fiscal year 2027, and we may not be able to allocate international capital optimally without realizing U.S. income taxes, which would increase our effective income tax rate and adversely impact our earnings and cash flows.
In particular, in the U.S., the HEA subjects schools that participate in the various federal student financial aid programs under Title IV, which includes Chamberlain, Walden, AUC, RUSM, and RUSVM, to significant regulatory scrutiny. Adtalem’s Title IV Institutions collectively receive 72% of their revenue from Title IV programs.
In particular, the HEA subjects schools that participate in the various federal student financial aid programs under Title IV, which includes all Adtalem Title IV institutions, to significant regulatory scrutiny. Adtalem’s Title IV institutions collectively receive 75% of their revenue from Title IV programs.
The loss 32 Table of Contents of state authorization would, among other things, render the affected institution ineligible to participate in Title IV programs, at least at those state campus locations, and otherwise limit that school’s ability to operate in that state.
“Business” for a description of Adtalem’s current U.S. approvals. The loss of state authorization would, among other things, render the affected institution ineligible to participate in Title IV programs, at least at those state campus locations, and otherwise limit that school’s ability to operate in that state.
If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditations and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business.
Increased scrutiny of accreditors by ED in connection with ED’s recognition process may result in increased scrutiny of institutions by accreditors or have other consequences. 20 Table of Contents If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditations and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business.
Our Board authorized a share repurchase program pursuant to which we may repurchase up to $300.0 million of our common stock through February 25, 2025. As of June 30, 2023, $172.7 million of authorized share repurchases were remaining under this share repurchase program.
Our Board authorized a share repurchase program pursuant to which we may repurchase up to $300.0 million of our common stock through January 16, 2027. As of June 30, 2024, $211.6 million of authorized share repurchases were remaining under this share repurchase program.
Within Title IV regulations, pending or future lawsuits, investigations, program reviews, and other events could each trigger, automatically or in some cases at ED’s discretion, the posting of letters of credit or other securities.
Within Title IV regulations, pending or future lawsuits, investigations, program reviews, and other events could each trigger, automatically or in some cases at ED’s discretion, the posting of letters of credit or other securities. ED has recently allowed Adtalem to reduce its outstanding letters of credit by $90.8 million.
Any of the foregoing actions could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.
Any of the foregoing actions could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs.
Disease outbreaks and other public health conditions in the locations in which we, our students, faculty, and employees live, work, and attend classes could have a significant negative impact on our revenue, profitability, and business.
Disease outbreaks and other public health conditions in the locations in which we, our students, faculty, and employees live, work, and attend classes could have a significant negative impact on our revenue, profitability, and business. We will continue to evaluate, and if appropriate, adopt other measures in the future required for the ongoing safety of our students and employees.
Student enrollment at our schools is affected by legislative, regulatory, and economic factors that may change in ways we cannot predict. These factors outside our control limit our ability to assess our future enrollment effectively. Our future revenue and growth depend on a number of factors, including many of the regulatory risks discussed above and business risks discussed below.
Risks Related to Adtalem’s Business Student enrollment at our schools is affected by legislative, regulatory, and economic factors that may change in ways we cannot predict. These factors outside our control limit our ability to assess our future enrollment effectively.
At this time, Adtalem cannot predict any or all of the changes that the U.S. Congress may ultimately make. Since a significant percentage of Adtalem’s revenue is tied to Title IV programs, any action by the U.S.
Congress can change the laws affecting Title IV programs in annual federal appropriations bills and other laws it enacts between the HEA reauthorizations. At this time, Adtalem cannot predict any or all of the changes that the U.S. Congress may ultimately make. Since a significant percentage of Adtalem’s revenue is tied to Title IV programs, any action by the U.S.
Investors should carefully consider the risk factors described below and all other information contained in this Annual Report on Form 10-K before making an investment decision with respect to Adtalem’s common stock.
Item 1A. Risk Factors Adtalem’s business operations are subject to numerous risks and uncertainties, some of which are not entirely within our control. Investors should carefully consider the risk factors described below and all other information contained in this Annual Report on Form 10-K before making an investment decision with respect to Adtalem’s common stock.
Congress to revise the laws governing the federal student financial aid programs or reduce funding for those programs could reduce Adtalem’s student enrollment and/or increase its costs of operation. Political and budgetary concerns significantly affect Title IV programs. The U.S. Congress enacted the HEA to be reauthorized on a periodic basis, which most recently occurred in August 2008.
Congress to revise the laws governing the federal student financial aid programs or reduce funding for those programs could reduce Adtalem’s student enrollment and/or increase its costs of operation. Political and 18 Table of Contents budgetary concerns significantly affect Title IV programs. The U.S.
If our business experiences prolonged occurrences of adverse public health conditions and the reinstatement of stay-at-home orders, we believe it could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
If our business experiences prolonged occurrences of adverse public health conditions and the reinstatement of stay-at-home orders, we believe it could have a material adverse effect on our business, financial condition, results of operations, and cash flows. Natural disasters or other extraordinary events or political disruptions may cause us to close some of our schools or suffer casualty losses.
In addition, an adverse action by any of our institutional accreditors other than loss of accreditation, such as issuance of a warning, could have a material adverse effect on our business. Increased scrutiny of accreditors by the Secretary of Education in connection with ED’s recognition process may result in increased scrutiny of institutions by accreditors or have other consequences.
In addition, an adverse action by any of our institutional accreditors other than loss of accreditation, such as issuance of a warning, could have a material adverse effect on our business.
These standards are assessed through annual compliance audits, periodic renewal of institutional PPAs, periodic program reviews, and ad hoc events which may lead ED to evaluate an institution’s financial responsibility or administrative capability.
All of our Title IV institutions are subject to meeting financial and administrative standards. These standards are assessed through annual compliance audits, periodic renewal of institutional PPAs, periodic program reviews, and ad hoc events which may lead ED to evaluate an institution’s financial responsibility or administrative capability. See “Financial Responsibility” and “Administrative Capability” in Item 1. “Business” for additional information.
Budget constraints in states that provide state financial aid to our students could reduce the amount of such financial aid that is available to our students, which could reduce our enrollment and adversely affect our 90/10 Rule percentage . Some states are experiencing budget deficits and constraints.
Budget constraints in states that provide state financial aid to our students could reduce the amount of such financial aid that is available to our students, which could reduce our enrollment and adversely affect our 90/10 Rule percentage . Some states may reduce or eliminate various student financial assistance programs or establish minimum performance measures as a condition of participation.
Further, if an institution exceeds the 90% threshold for any single fiscal year, ED could place that institution on provisional certification status for the institution’s following two fiscal years. In October 2022, ED published new 90/10 rules effective for fiscal years beginning on or after January 1, 2023.
Further, if an institution exceeds the 90% threshold for any single fiscal year, ED could place that institution on provisional certification status for the institution’s following two fiscal years. See “The 90/10 Rule” in Item 1. “Business” for additional information.
We are required to periodically report tuition, fees, and enrollment to the sponsoring agencies. As a recipient of funds, we are subject to periodic reviews and audits.
As a recipient of funds, we are subject to periodic reviews and audits.
Alternatively, ED could recertify our institutions but require our institutions to accept significant limitations as a condition of their continued participation in Title IV programs.
If ED does not recertify any one of our institutions to continue participating in Title IV programs, students at that institution would lose their access to Title IV program funds. Alternatively, ED could recertify our institutions but require our institutions to accept significant limitations as a condition of their continued participation in Title IV programs.
When the HEA is reauthorized, existing programs and participation requirements are subject to change. Additionally, funding for student financial assistance programs may be impacted during appropriations and budget actions. The U.S. Congress can change the laws affecting Title IV programs in annual federal appropriations bills and other laws it enacts between the HEA reauthorizations.
Some of these bills could be included in a larger legislative package, which could include the HEA. When the HEA is reauthorized, existing programs and participation requirements are subject to change. Additionally, funding for student financial assistance programs may be impacted during appropriations and budget actions. The U.S.
In the 118 th Congress, a comprehensive HEA reauthorization bill has not been introduced. However, standalone bills impacting Title IV federal financial aid programs have been introduced in both chambers of Congress. Some of these bills could be included in a larger legislative package, which could include the HEA.
Congress enacted the HEA to be reauthorized on a periodic basis, which most recently occurred in August 2008. A comprehensive HEA reauthorization bill has not yet been introduced. However, standalone bills impacting Title IV federal financial aid programs have been introduced in both chambers of Congress.
We have acquired and expect to acquire additional education institutions or education related businesses that complement our strategic direction.
We have acquired and may in the future acquire additional education institutions or education related businesses aligned to our strategy.
Our Title IV Institutions could lose their eligibility to participate in federal student financial aid programs if the percentage of their revenue derived from those programs were too high.
See “Cohort Default Rate” in Item 1. “Business” for additional information. Nevertheless, Adtalem’s cohort default rates are far below such thresholds as discussed in “Cohort Default Rate” in Item 1. “Business.” Our Title IV institutions could lose their eligibility to participate in federal student financial aid programs if the percentage of their revenue derived from those programs were too high.
While we believe there were no compromises to our operations as a result of this attack, other similar attacks could have a significant negative impact on our systems and operations. Anyone who circumvents security measures could misappropriate proprietary or confidential information or cause interruptions or malfunctions in our operations.
Due to the sensitive nature of the information contained on our networks, such as students’ financial information and grades, our networks may be targeted by hackers. Attacks could have a significant negative impact on our systems and operations. Anyone who circumvents security measures could misappropriate proprietary or confidential information or cause interruptions or malfunctions in our operations.
The share repurchase program authorization does not obligate us to acquire any specific number or dollar value of shares.
The share repurchase program authorization does not obligate us to acquire any specific number or dollar value of shares. Further, our share repurchases could have an impact on our share trading prices, increase the volatility of the price of our common stock, or reduce our available cash balance.
These resources primarily rely on and present data for first-time, full-time residential students, which is not representative of most of our prospective students.
These resources primarily rely on and present data for first-time, full-time residential students, which is not representative of most of our prospective students. These presentations may influence some prospective students to exclude our institutions from their consideration, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.
These presentations may influence some prospective students to exclude our institutions from their consideration, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows. 34 Table of Contents Risks Related to Adtalem’s Business Outbreaks of communicable infections or diseases, or other public health pandemics in the locations in which we, our students, faculty, and employees live, work, and attend classes, could substantially harm our business.
Outbreaks of communicable infections or diseases, or other public health pandemics in the locations in which we, our students, faculty, and employees live, work, and attend classes, could substantially harm our business.
As a result, we face increased exposure to litigation arising from student and prospective student complaints and enforcement actions by ED that could restrict or eliminate our eligibility to participate in Title IV programs.
The cohort default rates for Adtalem’s institutions were 0.0% for 2020 and none were greater than 1.1% for the fiscal year 2019 cohort. ED rules prohibiting “substantial misrepresentation” create exposure to litigation arising from student and prospective student complaints and enforcement actions by ED that could restrict or eliminate our eligibility to participate in Title IV programs.
ED has proposed changes to the certification rules. The earliest any amended rules will be effective is July 1, 2024. 30 Table of Contents If we fail to maintain our institutional accreditation or if our institutional accrediting body loses recognition by ED, we would lose our ability to participate in Title IV programs.
See “Program Participation Agreement” in Item 1. “Business” for additional information . If we fail to maintain our institutional accreditation or if our institutional accrediting body loses recognition by ED, we would lose our ability to participate in Title IV programs.
Removed
Risk Factors Summary of Risk Factors The summary of risks below provides an overview of the principal risks we are exposed to in the normal course of our business activities: Risks Related to Adtalem’s Highly Regulated Industry ● We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Adtalem portfolio with numerous laws and regulations in the U.S. and foreign jurisdictions applicable to the postsecondary education industry. ● The ongoing regulatory effort aimed at proprietary postsecondary institutions of higher education could be a catalyst for additional legislative or regulatory restrictions, investigations, enforcement actions, and claims. ● Adverse publicity arising from investigations, claims, or actions brought against us or other proprietary higher education institutions may negatively affect our reputation, business, or stock price, or attract additional investigations, lawsuits, or regulatory action. ● Government and regulatory agencies and third parties have initiated, and could initiate additional investigations, claims, or actions against us, which could require us to pay monetary damages, halt certain business practices, or receive other sanctions.
Added
Institutions may lose Title IV eligibility if the most recent cohort default rate on student loans exceeds 40% or if each of the three most recent cohort default rates exceed 30%. According to ED, the default rate for all Title IV institutions nationally was 0.0% for the fiscal year 2020 cohort and 2.3% for the fiscal year 2019 cohort.
Removed
The defense and resolution of these matters could require us to expend significant resources. ● The U.S. Department of Education (“ED”) has issued regulations setting forth new standards and procedures related to borrower defenses to repayment of Title IV loan obligations, and ED’s right of recoveries against institutions following a successful borrower defense and institutional financial responsibility.
Added
Our future revenue and growth depend on a number of factors, including many of the regulatory risks discussed above and business risks discussed below.

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Item 2. Properties

Properties — owned and leased real estate

8 edited+1 added−3 removed0 unchanged
Biggest changeThe RUSM campus is also supported by administrative staff located in office space in Miramar, Florida. RUSVM RUSVM’s 50-acre campus is located in St. Kitts. The campus is owned and includes approximately 253,000 square feet. Educational facilities include an anatomy/clinical building, pathology building, research building with state-of-the-art necropsy lab, classroom buildings, administration building, bookstore, cafeteria, and a library/learning resource center.
Biggest changeThe campus is owned and includes 253,000 square feet. Educational facilities include an anatomy/clinical building, pathology building, research building with state-of-the-art necropsy lab, classroom buildings, administration building, bookstore, cafeteria, and a library/learning resource center. Animal care facilities include kennels, an aviary, and livestock barns. Student-life and student residence facilities are also located on the campus.
Item 2. Properties Adtalem’s leased facilities are occupied under leases whose remaining terms range from 1 to 12 years. Some of our leases contain provisions giving Adtalem the right to terminate early or renew its lease for additional periods at various rental rates, although generally at rates higher than are currently being paid.
Item 2. Properties Adtalem’s leased facilities are occupied under leases whose remaining terms range from 1 to 15 years. Some of our leases contain provisions giving Adtalem the right to terminate early or renew its lease for additional periods at various rental rates, although generally at rates higher than are currently being paid.
Adtalem is subleasing space, in full or in part, at an additional seven facilities, of which five are subleased to DeVry University and/or Carrington College (a business formerly owned by Adtalem). Adtalem remains the primary lessee on the seven underlying leases.
Adtalem’s owned facilities total 883,000 square feet worldwide. No facility that is owned by Adtalem is subject to a mortgage or other indebtedness. Adtalem is subleasing space, in full or in part, at four facilities. Three of these facilities are subleased to DeVry University and/or Carrington College (a business formerly owned by Adtalem), which Adtalem remains as the primary lessee.
Medical and Veterinary AUC AUC’s nine-acre campus is located in St. Maarten. The campus is owned and includes approximately 240,000 square feet of academic, student-life, and student residence facilities. In addition to classrooms and auditoriums, educational facilities include a gross anatomy lab, a multi-purpose learning lab, library and learning resource centers, offices, cafeteria, and recreational space facilities.
In addition to classrooms and auditoriums, educational facilities include a gross anatomy lab, a multi-purpose learning lab, library and learning resource centers, offices, cafeteria, and recreational space facilities. The AUC campus is also supported by administrative staff located in office space in Miramar, Florida.
Educational facilities include 120,000 square feet of classrooms, labs for anatomy and radiology imaging, simulation, physiology and pathology, exam rooms, private and group study, and faculty and administrative space. A residential village includes 7,000 square feet of administrative student services space surrounded by shopping and recreational facilities and over 400 multi-bedroom student units totaling 367,000 square feet.
RUSM RUSM’s campus is located in Barbados and is comprised of 494,000 square feet of leased facilities. Educational facilities include 120,000 square feet of classrooms, labs for anatomy and radiology imaging, simulation, physiology and pathology, exam rooms, private and group study, and faculty and administrative space.
These lease and sublease agreements were entered into at comparable market rates and the terms range from one to three years. Chamberlain Chamberlain’s home office is located in Chicago, Illinois. Chamberlain currently operates 23 campuses in various U.S. locations, of which 3 are in Adtalem owned locations and 20 in leased facilities.
These sublease agreements were entered into at comparable market rates and all sublease terms expire by December 2025. Chamberlain Chamberlain currently operates 23 campuses in 15 states, of which 3 are in Adtalem owned locations and 20 in leased facilities. Chamberlain’s total portfolio of academic and administrative operations comprise approximately 1.0 million square feet.
The AUC campus is also supported by administrative staff located in office space in Miramar, Florida. RUSM RUSM’s campus is located in Barbados and is comprised of approximately 490,000 square feet of leased facilities.
A residential village includes 7,000 square feet of administrative student services space surrounded by shopping and recreational facilities and over 400 multi-bedroom student units totaling 367,000 square feet. The RUSM campus is also supported by administrative staff located in office space in Miramar, Florida. RUSVM RUSVM’s 50-acre campus is located in St. Kitts.
Home Office Adtalem’s home office staff is located in a leased facility in Chicago, Illinois utilizing approximately 57,000 square feet of office space.
The RUSVM campus is also supported by administrative staff located in office space in North Brunswick, New Jersey. Home Office Adtalem’s headquarters leased facility in Chicago, Illinois has 57,000 square feet. Adtalem also leases office space in Columbia, Maryland with 53,000 square feet and Washington, D.C. with 9,000 square feet. 31 Table of Contents
Removed
Adtalem’s owned facilities total approximately 883,000 square feet worldwide. No facility that is owned by Adtalem is subject to a mortgage or other indebtedness. Adtalem is leasing space to DeVry University at one facility owned by Adtalem.
Added
Walden Walden operates online and does not have any campus space. Walden leases office space in Minneapolis, Minnesota with 10,000 square feet. Medical and Veterinary AUC AUC’s nine-acre campus is located in St. Maarten. The campus is owned and includes 240,000 square feet of academic, student-life, and student residence facilities.
Removed
Chamberlain’s total portfolio of academic and administrative operations comprise approximately 1.0 million square feet. 40 Table of Contents Walden Walden’s home office is located in a leased facility in Columbia, Maryland utilizing approximately 34,000 square feet of office space. In addition, Walden has office space in Minneapolis, Minnesota utilizing approximately 10,000 square feet.
Removed
Animal care facilities include kennels, an aviary, and livestock barns. Student-life and student residence facilities are also located on the campus. The RUSVM campus is also supported by administrative staff located in office space in North Brunswick, New Jersey.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

15 edited+3 added−3 removed4 unchanged
Biggest changePrior to that role, Mr. Danaher was President, Education from 2013 through 2017. Manjunath Gangadharan Vice President, Chief Accounting Officer ​ ​ 41 ​ Mr. Gangadharan joined Adtalem in April 2022 as Vice President, Chief Accounting Officer. Prior to joining Adtalem, Mr. Gangadharan served as Vice President, Corporate Controller at Culligan International since April 2021. Previously, Mr.
Biggest changeGangadharan served as Vice President, Corporate Controller at Culligan International since April 2021. Previously, Mr.
Beck held a variety of leadership roles at Hub Group from 2011 through 2021 and was most recently Executive Vice President, General Counsel and Secretary. Previously, Mr. Beck served in a legal capacity in a number of other companies across a variety of industries including Alberto Culver, Navistar, and Allegiance Healthcare. Michael Betz President, Walden University ​ 50 ​ Mr.
Beck held a variety of leadership roles at Hub Group from 2011 through 2021 and was most recently Executive Vice President, General Counsel and Secretary. Previously, Mr. Beck served in a legal capacity in a number of other companies across a variety of industries including Alberto Culver, Navistar, and Allegiance Healthcare. Michael Betz President, Walden University ​ 51 ​ Mr.
Betz joined Adtalem in May 2022 as President of Walden University. Prior to joining Adtalem, Mr. Betz served in a variety of leadership roles at McKinsey & Co. from 2017 through 2022 where he most recently served as partner and was a leader in McKinsey’s higher education and growth transformation practices. Dr. Karen Cox President, Chamberlain University 63 Dr.
Betz joined Adtalem in May 2022 as President of Walden University. Prior to joining Adtalem, Mr. Betz served in a variety of leadership roles at McKinsey & Co. from 2017 through 2022 where he most recently served as partner and was a leader in McKinsey’s higher education and growth transformation practices. Dr. Karen Cox President, Chamberlain University 64 Dr.
Phelan was the Senior Vice President, Finance - Treasurer & Chief Audit Executive at Sears from July 2016 through May 2018. Mr. Phelan also served as Senior Vice President and President – Inventory & Space Management at Sears from September 2007 through June 2016. Blake Simpson Senior Vice President, Chief Communications Officer and Corporate Affairs Officer ​ 48 ​ Ms.
Phelan was the Senior Vice President, Finance - Treasurer & Chief Audit Executive at Sears from July 2016 through May 2018. Mr. Phelan also served as Senior Vice President and President – Inventory & Space Management at Sears from September 2007 through June 2016. Blake Simpson Senior Vice President, Chief Communications Officer and Corporate Affairs Officer ​ 49 ​ Ms.
Beck Senior Vice President, General Counsel, Corporate Secretary and Institutional Support Services ​ ​ 56 ​ Mr. Beck joined Adtalem in June 2021 as Senior Vice President, General Counsel and Corporate Secretary. In January 2023, Mr. Beck assumed responsibilities for our institutional support services. Prior to joining Adtalem, Mr.
Beck Senior Vice President, General Counsel, Corporate Secretary and Institutional Support Services ​ ​ 57 ​ Mr. Beck joined Adtalem in June 2021 as Senior Vice President, General Counsel and Corporate Secretary. In January 2023, Mr. Beck assumed responsibilities for our institutional support services. Prior to joining Adtalem, Mr.
In September 2021, Mr. Beard was appointed Adtalem’s President and Chief Executive Officer. Prior to joining Adtalem, Mr. Beard held a variety of leadership roles at Heidrick & Struggles, International from 2003 through 2018 and was most recently Executive Vice President, Chief Administrative Officer and General Counsel. Douglas G.
Beard was appointed Adtalem’s President and Chief Executive Officer. Prior to joining Adtalem, Mr. Beard held a variety of leadership roles at Heidrick & Struggles, International from 2003 through 2018 and was most recently Executive Vice President, Chief Administrative Officer and General Counsel. Douglas G.
Beard President and Chief Executive Officer ​ ​ 52 ​ Mr. Beard joined Adtalem in February 2018 as Senior Vice President, Secretary and General Counsel. In January 2019, Mr. Beard was appointed Chief Operating Officer and General Counsel. In February 2020, Mr. Beard assumed responsibilities for our former Financial Services segment and was relieved of his General Counsel responsibilities.
Beard joined Adtalem in February 2018 as Senior Vice President, Secretary and General Counsel. In January 2019, Mr. Beard was appointed Chief Operating Officer and General Counsel. In February 2020, Mr. Beard assumed responsibilities for our former Financial Services segment and was relieved of his General Counsel responsibilities. In September 2021, Mr.
In July 2022, Mr. Trent was appointed Senior Vice President, Chief Strategy and Transformation Officer. Prior to joining Adtalem, Mr. Trent served as Chief Operating Officer at HBR Consulting from 2018 through 2019. Previously, Mr. Trent served as Vice President, Strategy and Corporate Development at Heidrick & Struggles from 2014 through 2018. ​ PART II
Trent joined Adtalem in August 2019 as Vice President, Strategy and Corporate Development. In July 2022, Mr. Trent was appointed Senior Vice President, Chief Strategy and Transformation Officer. Prior to joining Adtalem, Mr. Trent served as Chief Operating Officer at HBR Consulting from 2018 through 2019. Previously, Mr.
Herrera joined Adtalem in October 2021 as Senior Vice President, Chief Marketing Officer. Prior to joining Adtalem, Mr. Herrera served as Senior Vice President, Americas Chief Marketing Officer at Avis Budget from 2018 through 2021. Previously, Mr. Herrera served as Senior Vice President, Head of Marketing at Weight Watchers from 2014 through 2018.
Maurice Herrera Senior Vice President, Chief Marketing Officer ​ ​ 54 ​ Mr. Herrera joined Adtalem in October 2021 as Senior Vice President, Chief Marketing Officer. Prior to joining Adtalem, Mr. Herrera served as Senior Vice President, Americas Chief Marketing Officer at Avis Budget from 2018 through 2021. Previously, Mr.
Item 4. Mine Safety Disclosures Not applicable. ​ ​ 41 Table of Contents Information About Our Executive Officers Our executive officers are as follows, along with each executive officer’s position, age, and business experience as of the date of this filing: ​ Name and Current Position Age Business Experience Stephen W.
Item 4. Mine Safety Disclosures Not applicable. ​ ​ Information About Our Executive Officers Our executive officers are as follows, along with each executive officer’s position, age, and business experience as of the date of this filing: ​ Name and Current Position Age Business Experience Stephen W. Beard President and Chief Executive Officer ​ ​ 53 ​ Mr.
Gangadharan served as the Chief Accounting Officer at Groupon Inc. since February 2020 and prior to that served in various leadership roles at Groupon including as Senior Director, North America Controller and Head of Global Payroll and Shared Services from May 2019 to February 2020; Director of Corporate Accounting from April 2018 to May 2019; and International Goods Controller from December 2016 to April 2018. 42 Table of Contents ​ Name and Current Position Age Business Experience Maurice Herrera Senior Vice President, Chief Marketing Officer ​ ​ 53 ​ Mr.
Gangadharan served as the Chief Accounting Officer at Groupon Inc. since February 2020 and prior to that served in various leadership roles at Groupon including as Senior Director, North America Controller and Head of Global Payroll and Shared Services from May 2019 to February 2020; Director of Corporate Accounting from April 2018 to May 2019; and International Goods Controller from December 2016 to April 2018.
Phelan served as Interim Chief Financial Officer and was appointed Senior Vice President, Chief Financial Officer in October 2021. Prior to joining Adtalem, Mr.
Phelan Senior Vice President, Chief Financial Officer ​ ​ 59 ​ Mr. Phelan joined Adtalem in February 2020 as Vice President, Chief Accounting Officer. Effective April 24, 2021, Mr. Phelan served as Interim Chief Financial Officer and was appointed Senior Vice President, Chief Financial Officer in October 2021. Prior to joining Adtalem, Mr.
Prior to that role, Mr. Tom was Vice President at Laureate Education leading technology innovation and digital experience from 2016 through 2018. Previously, Mr.
Prior to that role, Mr. Tom was Vice President at Laureate Education leading technology innovation and digital experience from 2016 through 2018. Previously, Mr. Tom served as Senior Vice President of Analytics, Innovation and Learning at TESSCO Technologies from 2011 through 2016. Evan Trent Senior Vice President, Chief Strategy and Transformation Officer ​ ​ 45 ​ Mr.
Simpson served as Vice President of Public Affairs and Communications at CKE Restaurants, Inc. from 2018 through 2022 and as Director Corporate Communications at Gap Inc. from 2015 through 2018. Steven Tom Senior Vice President, Chief Customer Officer ​ ​ 42 ​ Mr.
Simpson served as Vice President of Public Affairs and Communications at CKE Restaurants, Inc. from 2018 through 2020. 33 Table of Contents ​ Name and Current Position Age Business Experience Steven Tom Senior Vice President, Chief Customer Officer ​ ​ 43 ​ Mr.
Cox was Senior Vice President for Patient Care Services and Chief Nursing Officer from 2004 through 2006. John Danaher President, Medical and Veterinary ​ ​ 64 ​ Mr. Danaher joined Adtalem in August 2021 as President, Medical and Veterinary. Prior to joining Adtalem, Mr. Danaher served as President, Global Clinical Solutions at Elsevier from 2017 through 2021.
Cox was Senior Vice President for Patient Care Services and Chief Nursing Officer from 2004 through 2006. 32 Table of Contents ​ Name and Current Position Age Business Experience Manjunath Gangadharan Vice President, Chief Accounting Officer ​ ​ 42 ​ Mr. Gangadharan joined Adtalem in April 2022 as Vice President, Chief Accounting Officer. Prior to joining Adtalem, Mr.
Removed
Cheryl James Senior Vice President, Chief Human Resources Officer ​ 60 ​ Ms. James joined Adtalem in February 2022 as Senior Vice President, Chief Human Resources Officer. Prior to joining Adtalem, Ms. James served as Chief Human Resources Officer at Hillrom from 2020 through 2022. Prior to that role, Ms.
Added
Herrera served as Senior Vice President, Head of Marketing at Weight Watchers from 2014 through 2018. Scott Liles President, Medical and Veterinary ​ 58 ​ Mr. Liles joined Adtalem in April 2024 as President, Medical and Veterinary. Prior to joining Adtalem, Mr.
Removed
James was VP, HR, Global Surgical Solutions, APAC & Corporate Functions from 2019 through 2020 and VP, HR, International & Corporate Functions from 2015 through 2019. Robert J. Phelan Senior Vice President, Chief Financial Officer ​ ​ 58 ​ Mr. Phelan joined Adtalem in February 2020 as Vice President, Chief Accounting Officer. Effective April 24, 2021, Mr.
Added
Liles served as Chief Executive Officer of the Association of Certified Anti-Money Laundering Specialists (“ACAMS”) since March 2022 and President and Managing Director of ACAMS from November 2020 through February 2022. Previously, Mr. Liles served as President, Spire Insurance at Nationwide Insurance from November 2018 through November 2020 and President for Nationwide Pet from 2012 through 2018. Robert J.
Removed
Tom served as Senior Vice President of Analytics, Innovation and Learning at TESSCO Technologies from 2011 through 2016. 43 Table of Contents ​ Name and Current Position Age Business Experience Evan Trent Senior Vice President, Chief Strategy and Transformation Officer ​ ​ 44 ​ Mr. Trent joined Adtalem in August 2019 as Vice President, Strategy and Corporate Development.
Added
Trent served as Vice President, Strategy and Corporate Development at Heidrick & Struggles from 2014 through 2018. ​ PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+1 added−1 removed1 unchanged
Biggest changeThe following graph is not “soliciting material,” is not deemed filed with the Securities and Exchange Commission, and is not incorporated by reference in any of our filings under the Securities Act of 1933 or the Exchange Act of 1934, whether made before or after the data of this Form 10-K and irrespective of any general incorporation language in any such filing. 45 Table of Contents Comparison of Five-Year Cumulative Total Return Among Adtalem Global Education Inc., NYSE Composite Index, and a Peer Group ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ 2018 ​ 2019 ​ 2020 ​ 2021 ​ 2022 ​ 2023 Adtalem Global Education Inc. ​ 100 ​ 94 ​ 65 ​ 74 ​ 75 ​ 71 NYSE Composite Index (U.S.
Biggest changeThe stock price performance on the following graph is not necessarily indicative of future stock performance. 35 Table of Contents Comparison of Five-Year Cumulative Total Return Among Adtalem Global Education Inc., NYSE Composite Index, and a Peer Group ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ ​ 2019 ​ 2020 ​ 2021 ​ 2022 ​ 2023 ​ 2024 Adtalem Global Education Inc. ​ 100 ​ 69 ​ 79 ​ 80 ​ 76 ​ 151 NYSE Composite Index (U.S.
Dividends Adtalem did not pay any dividends in fiscal year 2022 or 2023. Adtalem does not expect to pay any cash dividends in the foreseeable future.
Dividends Adtalem did not pay any dividends in fiscal year 2022, 2023, or 2024. Adtalem does not expect to pay any cash dividends in the foreseeable future.
Performance Graph The following graph compares the cumulative total returns of Adtalem’s common stock, the NYSE Composite Index (U.S. Companies), and a Peer Group (as defined below) for the period from June 30, 2018 through June 30, 2023, assuming an investment of $100 in each on June 30, 2018 and also assumes the reinvestment of dividends.
Performance Graph The following graph compares the cumulative total returns of Adtalem’s common stock, the NYSE Composite Index (U.S. Companies), and a Peer Group (as defined below) for the period from June 30, 2019 through June 30, 2024, assuming an investment of $100 in each on June 30, 2019 and also assumes the reinvestment of dividends.
(APEI), Graham Holdings Company (GHC), Grand Canyon Education, Inc. (LOPE), Laureate Education, Inc. (LAUR), Perdoceo Education Corporation (formerly known as Career Education Corporation) (PRDO), and Strategic Education, Inc. (formerly known as Strayer Education, Inc.) (STRA). Item 6. Selected Financial Data Not required. ​ ​
(APEI), Graham Holdings Company (GHC), Grand Canyon Education, Inc. (LOPE), Laureate Education, Inc. (LAUR), Perdoceo Education Corporation (formerly known as Career Education Corporation) (PRDO), and Strategic Education, Inc. (formerly known as Strayer Education, Inc.) (STRA). Item 6. [Reserved] ​
Security Holders There were 217 current holders of record of Adtalem’s common stock as of August 4, 2023. The number of holders of record does not include beneficial owners of its securities whose shares are held by various brokerage firms, other financial institutions, Adtalem’s 401(k) Retirement Plan, and its Colleague Stock Purchase Plan.
Holders There were 194 current holders of record of Adtalem’s common stock as of July 31, 2024. The number of holders of record does not include beneficial owners of its securities whose shares are held by various brokerage firms, other financial institutions, Adtalem’s 401(k) Retirement Plan, and its Colleague Stock Purchase Plan.
Any future payment of dividends will be at the discretion of the Adtalem Board of Directors (the “Board”) and will be dependent on projections of future earnings, cash flow, financial requirements of Adtalem, and other factors as the Board deems relevant. Recent Sales of Unregistered Securities None. Securities Authorized for Issuance Under Equity Compensation Plans See Item 12.
Any future payment of dividends will be at the discretion of the Adtalem Board of Directors (the “Board”) and will be dependent on projections of future earnings, cash flow, financial requirements of Adtalem, and other factors as the Board deems relevant.
Companies) ​ 100 ​ 107 ​ 100 ​ 143 ​ 128 ​ 144 Peer Group (1) ​ 100 ​ 113 ​ 82 ​ 85 ​ 90 ​ 94 Source data: Zacks Investment Research (1) The self-determined “Peer Group” consists of the following companies selected on the basis of similarity in nature of their businesses: American Public Education, Inc.
Companies) ​ 100 ​ 94 ​ 133 ​ 119 ​ 134 ​ 156 Peer Group (1) ​ 100 ​ 73 ​ 75 ​ 79 ​ 83 ​ 118 Source data: Zacks Investment Research (1) The self-determined “Peer Group” consists of the following companies selected on the basis of similarity in nature of their businesses: American Public Education, Inc.
Issuer Purchases of Equity Securities The following information describes Adtalem’s stock repurchases during the fourth quarter of the fiscal year ended June 30, 2023, which includes the market price of the shares, commissions, and excise tax. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Purchased ​ Average Price Paid per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) ​ Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) April 1, 2023 - April 30, 2023 ​ 629,432 ​ $ 39.75 ​ 629,432 ​ $ 227,212,317 May 1, 2023 - May 31, 2023 ​ 638,097 ​ ​ 42.20 ​ 638,097 ​ ​ 200,282,566 June 1, 2023 - June 30, 2023 ​ 710,617 ​ ​ 38.75 ​ 710,617 ​ ​ 172,746,398 Total ​ 1,978,146 ​ $ 40.18 ​ 1,978,146 ​ $ 172,746,398 (1) See Note 16 “Share Repurchases” to the Consolidated Financial Statements in Item 8.
Recent Sales of Unregistered Securities There were no unregistered sales of equity securities during fiscal year 2024. 34 Table of Contents Issuer Purchases of Equity Securities The following information describes Adtalem’s stock repurchases during the fourth quarter of the fiscal year ended June 30, 2024, which includes the market price of the shares, commissions, and excise tax. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Purchased ​ Average Price Paid per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) ​ Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) April 1, 2024 - April 30, 2024 ​ 165,377 ​ $ 51.94 ​ 165,377 ​ $ 211,563,176 May 1, 2024 - May 31, 2024 ​ — ​ $ — ​ — ​ $ 211,563,176 June 1, 2024 - June 30, 2024 ​ — ​ $ — ​ — ​ $ 211,563,176 Total ​ 165,377 ​ $ 51.94 ​ 165,377 ​ ​ ​ (1) See Note 16 “Share Repurchases” to the Consolidated Financial Statements in Item 8.
“Financial Statements and Supplementary Data” for additional information on our share repurchase programs . 44 Table of Contents Other Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Purchased (1) ​ Average Price Paid per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs April 1, 2023 - April 30, 2023 ​ 438 ​ $ 37.91 ​ NA ​ NA May 1, 2023 - May 31, 2023 ​ 6,153 ​ ​ 41.97 ​ NA ​ NA June 1, 2023 - June 30, 2023 ​ 2,686 ​ ​ 38.56 ​ NA ​ NA Total ​ 9,277 ​ $ 40.79 ​ NA ​ NA (1) Represents shares delivered back to Adtalem for payment of withholding taxes from employees for vesting restricted stock units and shares swapped for payment on exercise of incentive stock options pursuant to the terms of Adtalem's stock incentive plans.
Other Purchases of Equity Securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period ​ Total Number of Shares Purchased (1) ​ Average Price Paid per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ​ Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs April 1, 2024 - April 30, 2024 ​ — ​ $ — ​ NA ​ NA May 1, 2024 - May 31, 2024 ​ 5,268 ​ $ 65.04 ​ NA ​ NA June 1, 2024 - June 30, 2024 ​ 12,137 ​ $ 66.72 ​ NA ​ NA Total ​ 17,405 ​ ​ 66.21 ​ NA ​ NA (1) Represents shares delivered back to Adtalem for payment of withholding taxes from employees for vesting restricted stock units and shares swapped for payment on exercise of incentive stock options pursuant to the terms of Adtalem's stock incentive plans.
Additionally, the Peer Group is weighted by the market capitalization of each component company. The stock price performance on the following graph is not necessarily indicative of future stock performance.
Additionally, the Peer Group is weighted by the market capitalization of each component company.
Removed
“Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” in Part III of this Annual Report on Form 10-K.
Added
“Financial Statements and Supplementary Data” for additional information on our share repurchase programs .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

106 edited+29 added−159 removed29 unchanged
Biggest changeEarnings per share reconciliation to adjusted earnings per share (shares in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2023 ​ 2022 ​ 2021 Earnings per share, diluted (GAAP) ​ $ 2.05 ​ $ 6.43 ​ $ 1.36 Effect on diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred revenue adjustment ​ ​ - ​ ​ 0.18 ​ ​ - CEO transition costs ​ ​ - ​ ​ 0.13 ​ ​ - Restructuring expense ​ ​ 0.41 ​ ​ 0.53 ​ ​ 0.13 Business acquisition and integration expense ​ ​ 0.94 ​ ​ 1.09 ​ ​ 0.61 Intangible amortization expense ​ ​ 1.34 ​ ​ 1.99 ​ ​ - Gain on sale of assets ​ ​ (0.29) ​ ​ - ​ ​ - Pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, and investment impairment ​ ​ 0.42 ​ ​ 1.00 ​ ​ 0.52 Net tax benefit related to a valuation allowance release ​ ​ (0.14) ​ ​ - ​ ​ - Income tax impact on non-GAAP adjustments (1) ​ ​ (0.70) ​ ​ (1.06) ​ ​ (0.32) Net loss (income) from discontinued operations attributable to Adtalem ​ ​ 0.18 ​ ​ (7.17) ​ ​ (0.13) Adjusted earnings per share, diluted (non-GAAP) ​ $ 4.21 ​ $ 3.11 ​ $ 2.18 Diluted shares used in non-GAAP EPS calculation ​ ​ 45,600 ​ ​ 48,804 ​ ​ 51,645 (1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements. 74 Table of Contents Reconciliation to adjusted EBITDA (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ Increase/(Decrease) ​ ​ ​ 2023 ​ 2022 ​ $ ​ % ​ Chamberlain: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 134,685 ​ $ 124,414 ​ $ 10,271 ​ 8.3 % Restructuring expense ​ ​ 818 ​ ​ 2,838 ​ ​ (2,020) ​ ​ ​ Depreciation ​ ​ 17,264 ​ ​ 18,547 ​ ​ (1,283) ​ ​ ​ Stock-based compensation ​ ​ 4,719 ​ ​ 6,707 ​ ​ (1,988) ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 157,486 ​ $ 152,506 ​ $ 4,980 ​ 3.3 % Adjusted EBITDA margin (non-GAAP) ​ ​ 27.6 % ​ 27.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Walden: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) (GAAP) ​ $ 35,880 ​ $ (5,306) ​ $ 41,186 ​ NM ​ Deferred revenue adjustment ​ ​ — ​ ​ 8,561 ​ ​ (8,561) ​ ​ ​ Restructuring expense ​ ​ 3,245 ​ ​ 4,053 ​ ​ (808) ​ ​ ​ Intangible amortization expense ​ ​ 61,239 ​ ​ 97,274 ​ ​ (36,035) ​ ​ ​ Litigation reserve ​ ​ 10,000 ​ ​ — ​ ​ 10,000 ​ ​ ​ Depreciation ​ ​ 9,492 ​ ​ 9,255 ​ ​ 237 ​ ​ ​ Stock-based compensation ​ ​ 3,861 ​ ​ 3,029 ​ ​ 832 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 123,717 ​ $ 116,866 ​ $ 6,851 ​ 5.9 % Adjusted EBITDA margin (non-GAAP) ​ ​ 23.2 % ​ 24.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Medical and Veterinary: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 59,649 ​ $ 59,357 ​ $ 292 ​ 0.5 % Restructuring expense ​ ​ 7,687 ​ ​ 9,791 ​ ​ (2,104) ​ ​ ​ Depreciation ​ ​ 12,475 ​ ​ 13,890 ​ ​ (1,415) ​ ​ ​ Stock-based compensation ​ ​ 3,003 ​ ​ 3,896 ​ ​ (893) ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 82,814 ​ $ 86,934 ​ $ (4,120) ​ (4.7) % Adjusted EBITDA margin (non-GAAP) ​ ​ 23.9 % ​ 25.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home Office and Other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss (GAAP) ​ $ (62,044) ​ $ (101,719) ​ $ 39,675 ​ 39.0 % CEO transition costs ​ ​ — ​ ​ 6,195 ​ ​ (6,195) ​ ​ ​ Restructuring expense ​ ​ 7,067 ​ ​ 8,946 ​ ​ (1,879) ​ ​ ​ Business acquisition and integration expense ​ ​ 42,661 ​ ​ 53,198 ​ ​ (10,537) ​ ​ ​ Gain on sale of assets ​ ​ (13,317) ​ ​ — ​ ​ (13,317) ​ ​ ​ Depreciation ​ ​ 2,344 ​ ​ 2,882 ​ ​ (538) ​ ​ ​ Stock-based compensation ​ ​ 2,716 ​ ​ 2,784 ​ ​ (68) ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ (20,573) ​ $ (27,714) ​ $ 7,141 ​ 25.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adtalem Global Education: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Adtalem (GAAP) ​ $ 93,358 ​ $ 310,991 ​ $ (217,633) ​ (70.0) % Net loss (income) from discontinued operations attributable to Adtalem ​ ​ 8,394 ​ ​ (346,946) ​ ​ 355,340 ​ ​ ​ Interest expense ​ ​ 63,100 ​ ​ 129,348 ​ ​ (66,248) ​ ​ ​ Other income, net ​ ​ (6,965) ​ ​ (1,108) ​ ​ (5,857) ​ ​ ​ Provision for (benefit from) income taxes ​ ​ 10,283 ​ ​ (15,539) ​ ​ 25,822 ​ ​ ​ Operating income (GAAP) ​ ​ 168,170 ​ ​ 76,746 ​ ​ 91,424 ​ ​ ​ Depreciation and amortization ​ ​ 102,814 ​ ​ 141,848 ​ ​ (39,034) ​ ​ ​ Stock-based compensation ​ ​ 14,299 ​ ​ 16,416 ​ ​ (2,117) ​ ​ ​ Deferred revenue adjustment ​ ​ — ​ ​ 8,561 ​ ​ (8,561) ​ ​ ​ CEO transition costs ​ ​ — ​ ​ 6,195 ​ ​ (6,195) ​ ​ ​ Restructuring expense ​ ​ 18,817 ​ ​ 25,628 ​ ​ (6,811) ​ ​ ​ Business acquisition and integration expense ​ ​ 42,661 ​ ​ 53,198 ​ ​ (10,537) ​ ​ ​ Litigation reserve ​ ​ 10,000 ​ ​ — ​ ​ 10,000 ​ ​ ​ Gain on sale of assets ​ ​ (13,317) ​ ​ — ​ ​ (13,317) ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 343,444 ​ $ 328,592 ​ $ 14,852 ​ 4.5 % Adjusted EBITDA margin (non-GAAP) ​ ​ 23.7 % ​ 23.8 % ​ ​ ​ ​ ​ ​ 75 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ Increase/(Decrease) ​ ​ ​ 2022 ​ 2021 ​ $ ​ % ​ Chamberlain: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 124,414 ​ $ 128,851 ​ $ (4,437) ​ (3.4) % Restructuring expense ​ ​ 2,838 ​ ​ — ​ ​ 2,838 ​ ​ ​ Depreciation ​ ​ 18,547 ​ ​ 16,123 ​ ​ 2,424 ​ ​ ​ Stock-based compensation ​ ​ 6,707 ​ ​ 5,181 ​ ​ 1,526 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 152,506 ​ $ 150,155 ​ $ 2,351 ​ 1.6 % Adjusted EBITDA margin (non-GAAP) ​ ​ 27.4 % ​ 26.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Walden: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss (GAAP) ​ $ (5,306) ​ $ — ​ $ (5,306) ​ NM ​ Deferred revenue adjustment ​ ​ 8,561 ​ ​ — ​ ​ 8,561 ​ ​ ​ Restructuring expense ​ ​ 4,053 ​ ​ — ​ ​ 4,053 ​ ​ ​ Intangible amortization expense ​ ​ 97,274 ​ ​ — ​ ​ 97,274 ​ ​ ​ Depreciation ​ ​ 9,255 ​ ​ — ​ ​ 9,255 ​ ​ ​ Stock-based compensation ​ ​ 3,029 ​ ​ — ​ ​ 3,029 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 116,866 ​ $ — ​ $ 116,866 ​ NM ​ Adjusted EBITDA margin (non-GAAP) ​ ​ 24.1 % ​ N/A ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Medical and Veterinary: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 59,357 ​ $ 60,199 ​ $ (842) ​ (1.4) % Restructuring expense ​ ​ 9,791 ​ ​ — ​ ​ 9,791 ​ ​ ​ Depreciation ​ ​ 13,890 ​ ​ 14,431 ​ ​ (541) ​ ​ ​ Stock-based compensation ​ ​ 3,896 ​ ​ 3,321 ​ ​ 575 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 86,934 ​ $ 77,951 ​ $ 8,983 ​ 11.5 % Adjusted EBITDA margin (non-GAAP) ​ ​ 25.7 % ​ 23.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home Office and Other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss (GAAP) ​ $ (101,719) ​ $ (78,651) ​ $ (23,068) ​ (29.3) % CEO transition costs ​ ​ 6,195 ​ ​ — ​ ​ 6,195 ​ ​ ​ Restructuring expense ​ ​ 8,946 ​ ​ 6,869 ​ ​ 2,077 ​ ​ ​ Business acquisition and integration expense ​ ​ 53,198 ​ ​ 31,593 ​ ​ 21,605 ​ ​ ​ Depreciation ​ ​ 2,882 ​ ​ 3,334 ​ ​ (452) ​ ​ ​ Stock-based compensation ​ ​ 2,784 ​ ​ 4,322 ​ ​ (1,538) ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ (27,714) ​ $ (32,533) ​ $ 4,819 ​ 14.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adtalem Global Education: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to Adtalem (GAAP) ​ $ 310,991 ​ $ 70,027 ​ $ 240,964 ​ 344.1 % Net income from discontinued operations attributable to Adtalem ​ ​ (346,946) ​ ​ (6,579) ​ ​ (340,367) ​ ​ ​ Interest expense ​ ​ 129,348 ​ ​ 41,365 ​ ​ 87,983 ​ ​ ​ Other income, net ​ ​ (1,108) ​ ​ (6,732) ​ ​ 5,624 ​ ​ ​ (Benefit from) provision for income taxes ​ ​ (15,539) ​ ​ 12,318 ​ ​ (27,857) ​ ​ ​ Operating income (GAAP) ​ ​ 76,746 ​ ​ 110,399 ​ ​ (33,653) ​ ​ ​ Depreciation and amortization ​ ​ 141,848 ​ ​ 33,888 ​ ​ 107,960 ​ ​ ​ Stock-based compensation ​ ​ 16,416 ​ ​ 12,824 ​ ​ 3,592 ​ ​ ​ Deferred revenue adjustment ​ ​ 8,561 ​ ​ — ​ ​ 8,561 ​ ​ ​ CEO transition costs ​ ​ 6,195 ​ ​ — ​ ​ 6,195 ​ ​ ​ Restructuring expense ​ ​ 25,628 ​ ​ 6,869 ​ ​ 18,759 ​ ​ ​ Business acquisition and integration expense ​ ​ 53,198 ​ ​ 31,593 ​ ​ 21,605 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 328,592 ​ $ 195,573 ​ $ 133,019 ​ 68.0 % Adjusted EBITDA margin (non-GAAP) ​ ​ 23.8 % ​ 21.7 % ​ ​ ​ ​ ​ ​ ​ ​
Biggest changeDiluted earnings per share reconciliation to adjusted earnings per share (shares in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2024 ​ 2023 Diluted earnings per share (GAAP) ​ $ 3.39 ​ $ 2.05 Effect on diluted earnings per share: ​ ​ ​ ​ ​ ​ Restructuring expense ​ ​ 0.05 ​ ​ 0.41 Business acquisition and integration expense ​ ​ 0.85 ​ ​ 0.94 Amortization of acquired intangible assets ​ ​ 0.88 ​ ​ 1.34 Gain on sale of assets ​ ​ - ​ ​ (0.29) Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs ​ ​ 0.52 ​ ​ 0.42 Tax benefit due to change in valuation allowance ​ ​ - ​ ​ (0.14) Tax benefit due to change in unrecognized tax benefits ​ ​ (0.14) ​ ​ - Income tax impact on non-GAAP adjustments (1) ​ ​ (0.57) ​ ​ (0.70) Loss from discontinued operations ​ ​ 0.02 ​ ​ 0.18 Adjusted earnings per share (non-GAAP) ​ $ 5.01 ​ $ 4.21 Diluted shares used in non-GAAP EPS calculation ​ ​ 40,307 ​ ​ 45,600 (1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements. 51 Table of Contents Reconciliation to adjusted EBITDA (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ Increase/(Decrease) ​ ​ ​ 2024 ​ 2023 ​ $ ​ % ​ Chamberlain: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 137,800 ​ $ 134,685 ​ $ 3,115 ​ 2.3 % Restructuring expense ​ ​ — ​ ​ 818 ​ ​ (818) ​ ​ ​ Depreciation ​ ​ 18,752 ​ ​ 17,175 ​ ​ 1,577 ​ ​ ​ Amortization of cloud computing implementation assets ​ ​ 1,332 ​ ​ 89 ​ ​ 1,243 ​ ​ ​ Stock-based compensation ​ ​ 8,303 ​ ​ 4,719 ​ ​ 3,584 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 166,187 ​ $ 157,486 ​ $ 8,701 ​ 5.5 % Adjusted EBITDA margin (non-GAAP) ​ ​ 26.2 % ​ 27.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Walden: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 77,179 ​ $ 35,880 ​ $ 41,299 ​ 115.1 % Restructuring expense ​ ​ (776) ​ ​ 3,245 ​ ​ (4,021) ​ ​ ​ Amortization of acquired intangible assets ​ ​ 35,644 ​ ​ 61,239 ​ ​ (25,595) ​ ​ ​ Litigation reserve ​ ​ 18,500 ​ ​ 10,000 ​ ​ 8,500 ​ ​ ​ Depreciation ​ ​ 7,389 ​ ​ 9,419 ​ ​ (2,030) ​ ​ ​ Amortization of cloud computing implementation assets ​ ​ 1,331 ​ ​ 73 ​ ​ 1,258 ​ ​ ​ Stock-based compensation ​ ​ 7,525 ​ ​ 3,861 ​ ​ 3,664 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 146,792 ​ $ 123,717 ​ $ 23,075 ​ 18.7 % Adjusted EBITDA margin (non-GAAP) ​ ​ 24.7 % ​ 23.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Medical and Veterinary: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 71,065 ​ $ 59,649 ​ $ 11,416 ​ 19.1 % Restructuring expense ​ ​ 442 ​ ​ 7,687 ​ ​ (7,245) ​ ​ ​ Depreciation ​ ​ 11,983 ​ ​ 12,438 ​ ​ (455) ​ ​ ​ Amortization of cloud computing implementation assets ​ ​ 469 ​ ​ 37 ​ ​ 432 ​ ​ ​ Stock-based compensation ​ ​ 4,930 ​ ​ 3,003 ​ ​ 1,927 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 88,889 ​ $ 82,814 ​ $ 6,075 ​ 7.3 % Adjusted EBITDA margin (non-GAAP) ​ ​ 25.0 % ​ 23.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home Office: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss (GAAP) ​ $ (68,990) ​ $ (62,044) ​ $ (6,946) ​ (11.2) % Restructuring expense ​ ​ 2,204 ​ ​ 7,067 ​ ​ (4,863) ​ ​ ​ Business acquisition and integration expense ​ ​ 34,215 ​ ​ 42,661 ​ ​ (8,446) ​ ​ ​ Loss on assets held for sale ​ ​ 647 ​ ​ — ​ ​ 647 ​ ​ ​ Debt modification costs ​ ​ 848 ​ ​ — ​ ​ 848 ​ ​ ​ Gain on sale of assets ​ ​ — ​ ​ (13,317) ​ ​ 13,317 ​ ​ ​ Depreciation ​ ​ 1,552 ​ ​ 2,344 ​ ​ (792) ​ ​ ​ Stock-based compensation ​ ​ 5,189 ​ ​ 2,716 ​ ​ 2,473 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ (24,335) ​ $ (20,573) ​ $ (3,762) ​ (18.3) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adtalem Global Education: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income (GAAP) ​ $ 136,777 ​ $ 93,358 ​ $ 43,419 ​ 46.5 % Loss from discontinued operations ​ ​ 936 ​ ​ 8,394 ​ ​ (7,458) ​ ​ ​ Interest expense ​ ​ 63,659 ​ ​ 63,100 ​ ​ 559 ​ ​ ​ Other income, net ​ ​ (10,542) ​ ​ (6,965) ​ ​ (3,577) ​ ​ ​ Provision for income taxes ​ ​ 26,224 ​ ​ 10,283 ​ ​ 15,941 ​ ​ ​ Operating income (GAAP) ​ ​ 217,054 ​ ​ 168,170 ​ ​ 48,884 ​ ​ ​ Depreciation and amortization ​ ​ 78,452 ​ ​ 102,814 ​ ​ (24,362) ​ ​ ​ Stock-based compensation ​ ​ 25,947 ​ ​ 14,299 ​ ​ 11,648 ​ ​ ​ Restructuring expense ​ ​ 1,870 ​ ​ 18,817 ​ ​ (16,947) ​ ​ ​ Business acquisition and integration expense ​ ​ 34,215 ​ ​ 42,661 ​ ​ (8,446) ​ ​ ​ Litigation reserve ​ ​ 18,500 ​ ​ 10,000 ​ ​ 8,500 ​ ​ ​ Loss on assets held for sale ​ ​ 647 ​ ​ — ​ ​ 647 ​ ​ ​ Debt modification costs ​ ​ 848 ​ ​ — ​ ​ 848 ​ ​ ​ Gain on sale of assets ​ ​ — ​ ​ (13,317) ​ ​ 13,317 ​ ​ ​ Adjusted EBITDA (non-GAAP) ​ $ 377,533 ​ $ 343,444 ​ $ 34,089 ​ 9.9 % Adjusted EBITDA margin (non-GAAP) ​ ​ 23.8 % ​ 23.7 % ​ ​ ​ ​ ​ ​ ​ ​ 52 Table of Contents
This loss consisted of the following: (i) loss of $8.5 million driven by ongoing litigation costs and settlements related to the DeVry University divestiture, partially offset by income from the DeVry University earn-out; (ii) a loss on the sale of ACAMS, Becker, and OCL of $3.6 million for working capital adjustments to the initial sales price and a tax return to provision adjustment; and (iii) a benefit from income taxes of $3.6 million associated with the items listed above.
This loss consisted of the following: (i) loss of $8.5 million driven by ongoing litigation costs and settlements related to the DeVry University divestiture, partially offset by income from the DeVry University earn-out; (ii) loss on the sale of ACAMS, Becker, and OCL of $3.6 million for working capital adjustments to the initial sales prices and a tax return to provision adjustment; and (iii) benefit from income taxes of $3.6 million associated with the items listed above.
Credit Losses The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts receivable balances as of each balance sheet date. In evaluating the collectability of all our accounts receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future.
Credit Losses The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts and financing receivable balances as of each balance sheet date. In evaluating the collectability of our accounts and financing receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future.
Tuition Rates: On a per credit hour basis, tuition for Walden programs range from $130 per credit hour to $1,060 per credit hour, with the wide range due to the nature of the programs. General education courses are charged at $333 per credit hour.
Tuition Rates: On a per credit hour basis, tuition for Walden programs range from $130 per credit hour to $1,060 per credit hour, with the wide range due to the nature of the programs. General education courses are charged at $340 per credit hour.
“Financial Statements and Supplementary Data.” Non-GAAP Financial Measures and Reconciliations We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons.
“Financial Statements and Supplementary Data.” 49 Table of Contents Non-GAAP Financial Measures and Reconciliations We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons.
If economic conditions deteriorate, interest rates continue to rise, or operating performance of our reporting units do not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods. See Note 71 Table of Contents 13 “Goodwill and Intangible Assets” to the Consolidated Financial Statements in Item 8.
If economic conditions deteriorate, interest rates rise, or operating performance of our reporting units do not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods. See Note 13 “Goodwill and Intangible Assets” to the Consolidated Financial Statements in Item 8.
“Financial Statements and Supplementary Data” for additional information on our credit losses. 70 Table of Contents Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
“Financial Statements and Supplementary Data” for additional information on our credit losses. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income (loss).
This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.
The respective tuition rates for AUC, RUSM, and RUSVM do not include the cost of transportation, living expenses, or health insurance. Cost of Educational Services The largest component of cost of educational services is the cost of faculty and staff who support educational operations.
The respective tuition rates for AUC, RUSM, and RUSVM do not include the cost of transportation, living expenses, or health insurance. 40 Table of Contents Cost of Educational Services The largest component of cost of educational services is the cost of faculty and staff who support educational operations.
Intangible assets with finite lives are amortized over their expected economic lives, ranging from 3 to 5 years. All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions.
Intangible assets with finite lives are amortized over their expected economic lives, ranging from three to five years. All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives. Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions.
See the “Non-GAAP Financial Measures and Reconciliations” section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures. Certain items presented in tables may not sum due to rounding. Percentages presented are calculated from the underlying numbers in thousands.
See the “Non-GAAP Financial Measures and Reconciliations” 36 Table of Contents section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures. Certain items presented in tables may not sum due to rounding. Percentages presented are calculated from the underlying numbers in thousands.
Based on this quantitative assessment, it was determined that the fair value of the Walden reporting unit exceeded its carrying value by approximately 15% and therefore no goodwill impairment was identified. Significant judgments and assumptions were used in determining the fair value of intangible assets.
Based on this quantitative assessment, it was determined that the fair value of the AUC reporting unit exceeded its carrying value by approximately 20% and therefore no goodwill impairment was identified. Significant judgments and assumptions were used in determining the fair value of intangible assets.
This gain was recorded at Adtalem’s home office, which is classified as “Home Office and Other” in Note 22 “Segment Information” to the Consolidated Financial Statements in Item 8.
This gain was recorded at Adtalem’s home office, which is classified as “Home Office” in Note 22 “Segment Information” to the Consolidated Financial Statements in Item 8.
The estimate of our credit losses involves a significant level of uncertainty as it requires significant judgment to estimate the amount we will collect in the future on our account receivable balances. See Note 10 “Accounts Receivable and Credit Losses” to the Consolidated Financial Statements in Item 8.
The estimate of our credit losses involves a significant level of uncertainty as it requires significant judgment to estimate the amount we will collect in the future on our accounts and financing receivable balances. See Note 10 “Accounts and Financing Receivables” to the Consolidated Financial Statements in Item 8.
Some programs require students to attend residencies, skills labs, and pre-practicum labs, which are charged at a range of $1,000 to $2,550 per event. In most cases, these tuition rates, event charges, and fees represent increases of approximately 3.0% to 6.6% from the prior year.
Some programs require students to attend residencies, skills labs, and pre-practicum labs, which are charged at a range of $1,000 to $2,550 per event. In most cases, these tuition rates, event charges, and fees represent increases of approximately 0% to 4% with an average of approximately 2% from the prior year.
The Revolver will be used to finance ongoing working capital and for general corporate purposes. During fiscal year 2022, we made a prepayment of $396.7 million on the Term Loan B. With that prepayment, we are no longer required to make quarterly installment payments.
We refer to the Term Loan B and Revolver collectively as the “Credit Facility.” The Revolver will be used to finance ongoing working capital and for general corporate purposes. During fiscal year 2022, we made a prepayment of $396.7 million on the Term Loan B. With that prepayment, we are no longer required to make quarterly installment payments.
In the U.S., Adtalem has posted $31.9 million of surety bonds with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM. Operating Lease Obligations – We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheets.
In the U.S., Adtalem has posted $44.3 million of surety bonds as of June 30, 2024 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM. Operating Lease Obligations – We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheets.
During fiscal year 2023 and 2022, we received proceeds from the sale of marketable securities held in a Rabbi Trust of $7.6 million and $3.4 million, respectively, and made additional investments in marketable securities held by this trust of $1.5 million and $3.6 million, respectively.
During fiscal year 2024 and 2023, we received proceeds from the sale of marketable securities held in a Rabbi Trust of $1.7 million and $7.6 million, respectively, and made additional investments in marketable securities held by the Rabbi Trust of $0.7 million and $1.5 million, respectively.
Other programs such as those with a subscription-based learning modality or those billed on a subscription period or term basis range from $1,500 to $7,180 per term. Students are charged a technology fee that ranges from $50 to $230 per term as well as a clinical fee of $150 per course for specific programs.
Other programs such as those with a subscription-based learning modality or those billed on a subscription period or term basis range from $1,550 to $7,325 per term. Students are charged a program fee that ranges from $50 to $230 per term as well as a clinical fee of $160 per course for specific programs.
Each of these factors and assumptions can significantly affect the value of the intangible asset. Based on these quantitative assessments, it was determined that the fair values of these indefinite-lived intangible assets in the Walden reporting unit exceeded their carrying values by approximately 10% and no impairment was identified.
Each of these factors and assumptions can significantly affect the value of the intangible asset. Based on these quantitative assessments, it was determined that the fair values of these indefinite-lived intangible assets in the AUC reporting unit exceeded their carrying values by at least 23% and therefore no impairment was identified.
If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group.
Upon identifying such an event, if the carrying value of the long-lived asset is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group.
The with and without method of the income approach and the relief from royalty model used in the determination of the fair values of our Walden Title IV eligibility and trade name intangible assets, respectively, during 2023 reflected our most recent revenue projections, a discount rate of 12.5%, a royalty rate of 2.25% and terminal growth rates of 3%.
The with and without method of the income approach and the relief from royalty model used in the determination of the fair values of our AUC Title IV eligibility and trade name intangible assets, respectively, during fiscal year 2024 reflected our most recent revenue projections, a discount rate of 12.5%, a royalty rate of 5.5%, and a terminal growth rate of 3.0%.
As of June 30, 2023, $172.7 million of authorized share repurchases were remaining under the current share repurchase program. The timing and amount of any 68 Table of Contents future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 16 “Share Repurchases” to the Consolidated Financial Statements in Item 8.
As of June 30, 2024, $211.6 million of authorized share repurchases were remaining under the fourteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 16 “Share Repurchases” to the Consolidated Financial Statements in Item 8.
“Financial Statements and Supplementary Data”) by entering into its new credit agreement (the “Credit Agreement”) that provides for (1) a $850.0 million senior secured term loan (“Term Loan B”) with a maturity date of August 12, 2028 and (2) a $400.0 million senior secured revolving loan facility (“Revolver”) with a maturity date of August 12, 2026.
On August 12, 2021, Adtalem entered into its new credit agreement (the “Credit Agreement”) that provides for (1) a $850.0 million senior secured term loan (“Term Loan B”) with a maturity date of August 12, 2028 and (2) a $400.0 million senior secured revolving loan facility (“Revolver”) with a maturity date of August 12, 2026.
Management anticipates fiscal year 2024 capital spending to be in the $50 to $60 million range. The source of funds for this capital spending will be from operations or the Credit Facility (as defined and discussed in Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”).
The source of funds for this capital spending will be from operations or the Credit Facility (as defined and discussed in Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”).
The discounted cash flow models used to determine the fair value of our Walden reporting unit during 2023 reflected our most recent cash flow projections, a discount rate of 12.5% and terminal growth rates of 3%. Each of these inputs can significantly affect the fair values of our reporting units.
The discounted cash flow models used to determine the fair value of our AUC reporting unit during fiscal year 2024 reflected our most recent cash 48 Table of Contents flow projections, a discount rate of 12.5%, and a terminal growth rate of 3.0%. Each of these inputs can significantly affect the fair values of our reporting units.
These tuition rates represent a 5.0% increase from the prior academic year. Effective for semesters beginning in September 2022, for students first enrolled in May 2022 and after, tuition rates for the beginning basic sciences and final clinical rotation portions of RUSM’s medical program are $21,966 and $25,893, respectively, per semester.
These tuition rates represent a 6.0% increase from the prior academic year. Effective for semesters beginning in September 2023, for students first enrolled in May 2022 and after, tuition rates for the beginning basic sciences and clinical rotation portions of RUSM’s medical program are $23,284 and $27,447, respectively, per semester.
The following are non-GAAP financial measures used in this Annual Report on Form 10-K: Adjusted net income (most comparable GAAP measure: net income attributable to Adtalem) – Measure of Adtalem’s net income attributable to Adtalem adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, intangible amortization expense, gain on sale of assets, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, net tax benefit related to a valuation allowance release, and net loss (income) from discontinued operations attributable to Adtalem.
The following are non-GAAP financial measures used in this Annual Report on Form 10-K: Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.
In the event of unexpected market conditions or negative economic changes, including those caused by COVID-19, that could negatively affect Adtalem’s earnings and/or operating cash flow, Adtalem maintains a $400.0 million revolving credit facility with availability of $323.8 million as of June 30, 2023.
In the event of unexpected market conditions or negative economic changes that could negatively affect Adtalem’s earnings and/or operating cash flow, Adtalem maintains a $400.0 million revolving credit facility with availability of $242.1 million as of June 30, 2024.
Adtalem’s consolidated cash and cash equivalents balance of $273.7 million and $347.0 million as of June 30, 2023 and 2022, respectively, included cash and cash equivalents held at Adtalem’s international operations of $7.2 million and $34.2 million as of June 30, 2023 and 2022, respectively, which is available to Adtalem for general corpora te purposes.
Adtalem’s consolidated cash and cash equivalents balance of $219.3 million and $272.2 million as of June 30, 2024 and 2023, respectively, included cash and cash equivalents held at Adtalem’s international operations of $4.6 million and $7.2 million as of June 30, 2024 and 2023, respectively, which is available to Adtalem for general corpora te purposes.
As of June 30, 2023, total student enrollment at Walden decreased 4.8% compared to June 30, 2022. ● For fiscal year 2023, average total student enrollment at the medical and veterinary schools decreased 1.0% compared to the prior year .
As of June 30, 2024, total student enrollment at Walden increased 11.3% compared to June 30, 2023. ● For fiscal year 2024, average total student enrollment at the medical and veterinary schools decreased 5.1% compared to the prior year .
Walden Walden Student Enrollment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2023 ​ ​ ​ September 30, ​ December 31, ​ March 31, ​ June 30, ​ Period ​ 2022 ​ 2022 ​ 2023 ​ 2023 ​ Total students ​ 40,772 ​ 37,956 ​ 39,427 ​ 37,582 ​ % change from prior year ​ (9.2) % (7.8) % (7.9) % (4.8) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2022 ​ ​ ​ September 30, ​ December 31, ​ March 31, ​ June 30, ​ Period ​ 2021 ​ 2021 ​ 2022 ​ 2022 ​ Total students ​ 44,886 ​ 41,158 ​ 42,788 ​ 39,470 ​ 51 Table of Contents Walden total student enrollment represents those students attending instructional sessions as of the dates identified above.
Walden Walden Student Enrollment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2024 ​ ​ ​ September 30, ​ December 31, ​ March 31, ​ June 30, ​ Period ​ 2023 ​ 2023 ​ 2024 ​ 2024 ​ Total students ​ 40,975 ​ 40,971 ​ 42,751 ​ 41,845 ​ % change from prior year ​ 0.5 % 7.9 % 8.4 % 11.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2023 ​ ​ ​ September 30, ​ December 31, ​ March 31, ​ June 30, ​ Period ​ 2022 ​ 2022 ​ 2023 ​ 2023 ​ Total students ​ 40,772 ​ 37,956 ​ 39,427 ​ 37,582 ​ % change from prior year ​ (9.2) % (7.8) % (7.9) % (4.8) % Walden total student enrollment represents those students attending instructional sessions as of the dates identified above.
“Financial Statements and Supplementary Data” and the notes thereto but not presented in accordance with U.S. generally 46 Table of Contents accepted accounting principles (“GAAP”). Certain of these items are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules.
Throughout this MD&A, we sometimes use information derived from the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto but not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these items are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules.
In addition, we continue to incur costs associated with ongoing litigation and settlements related to the DeVry University divestiture, which was completed during fiscal year 2019, and are classified as expense within discontinued operations. Net loss from discontinued operations in the year ended June 30, 2023 was $8.4 million.
In addition, we continue to incur costs associated with ongoing litigation and settlements related to the DeVry University and Carrington College divestitures, which were completed during fiscal year 2019, and are classified as expense within discontinued operations. Loss from discontinued operations in fiscal year 2024 was $0.9 million.
Adjusted EBITDA (most comparable GAAP measure: net income attributable to Adtalem) – Measure of Adtalem’s net income attributable to Adtalem adjusted for net loss (income) from discontinued operations attributable to Adtalem, interest expense, other income, net, provision for (benefit from) income taxes, depreciation and amortization, stock-based compensation, deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, litigation reserve, and gain on sale of assets.
Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for loss from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business acquisition and integration expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets.
Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8.
“Financial Statements and Supplementary Data” for additional information on our loss contingencies. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements, see Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8.
These tuition rates represent a 5.0% increase from the prior academic year. Effective for semesters beginning in September 2022, for students first enrolled in May 2022 and after, tuition rates for the beginning basic sciences and final clinical rotation portions of AUC’s medical program are $20,202 and $25,116, respectively, per semester.
Effective for semesters beginning in September 2023, for students first enrolled in May 2022 and after, tuition rates for the beginning basic sciences and clinical rotation portions of AUC’s medical program are $21,568 and $28,146, respectively, per semester, which represents a 6.8% and 12.0% increase, respectively, from the prior academic year.
We recorded a note receivable of $40.3 million and a financing payable of $45.5 million at the time of the sale, which were classified as other assets, net and other liabilities, respectively, on the Consolidated Balance Sheets. On February 23, 2023, DePaul College Prep paid the mortgage in full.
Adtalem continued to maintain the assets associated with the sale on the Consolidated Balance Sheets. We recorded a note receivable of $40.3 million and a financing payable of $45.5 million at the time of the sale, which were classified as other assets, net and other liabilities, respectively, on the Consolidated Balance Sheets.
We received an initial delivery of 4,709,576 shares of common stock. The ASR agreement ended on October 14, 2022. Based on the volume-weighted average price of Adtalem’s common stock during the term of the ASR agreement, Adtalem owed the counter party 332,212 shares of common stock.
Based on the volume-weighted average price of Adtalem’s common stock during the term of the ASR agreement, Adtalem owed the counter party 332,212 shares of common stock.
On April 11, 2022, we repaid $373.3 million of Notes at a price equal to 100% of the principal amount of the Notes.
On April 11, 2022, we repaid $373.3 million of Notes at a price equal to 100% of the principal amount of the Notes. During June 2022, we repurchased on the open market an additional $20.8 million of Notes at a price equal to approximately 90% of the principal amount of the Notes.
Chamberlain Chamberlain operating income increased 8.3%, or $10.3 million, to $134.7 million in fiscal year 2023 compared to the prior year. Segment adjusted operating income increased 6.5%, or $8.3 million, to $135.5 million in fiscal year 2023 compared to the prior year.
Chamberlain Chamberlain operating income increased 2.3%, or $3.1 million, to $137.8 million in fiscal year 2024 compared to the prior year. Segment adjusted operating income increased 1.7%, or $2.3 million, to $137.8 million in fiscal year 2024 compared to the prior year.
Medical and Veterinary Medical and Veterinary operating income increased 0.5%, or $0.3 million, to $59.6 million in fiscal year 2023 compared to the prior year. Segment adjusted operating income decreased 2.6%, or $1.8 million, to $67.3 million in fiscal year 2023 compared to the prior year.
Medical and Veterinary Medical and Veterinary operating income increased 19.1%, or $11.4 million, to $71.1 million in fiscal year 2024 compared to the prior year. Segment adjusted operating income increased 6.2%, or $4.2 million, to $71.5 million in fiscal year 2024 compared to the prior year.
Critical accounting estimates discussed below are those that we believe involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Management has discussed our critical accounting estimates with the Audit and Finance Committee of the Board.
Critical accounting estimates discussed below are those that we believe involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial 47 Table of Contents condition or results of operations. Although management believes its assumptions and estimates are reasonable, actual results could differ from those estimates.
For the May 2023 session, total student enrollment at Chamberlain increased 1.2% compared to the same session last year. ● For fiscal year 2023, average total student enrollment at Walden decreased 7.5% compared to the prior year .
For the May 2024 session, total student enrollment at Chamberlain increased 10.4% compared to the same session last year. ● For fiscal year 2024, average total student enrollment at Walden increased 6.9% compared to the prior year .
As of June 30, 2023, the amount of debt outstanding under the Notes and Credit Facility was $708.3 million. See Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Notes and our Credit Agreement.
See Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Notes and our Credit Agreement.
Adjusted earnings per share (most comparable GAAP measure: earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, intangible amortization expense, gain on sale of assets, pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, net tax benefit related to a valuation allowance release, and net loss (income) from discontinued operations attributable to Adtalem. 72 Table of Contents Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, intangible amortization expense, litigation reserve, and gain on sale of assets.
Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.
Tuition for the online Family Nurse Practitioner (“FNP”) degree program is $690 per credit hour. Tuition for the online Doctor of Nursing Practice (“DNP”) degree program is $800 per credit hour. Tuition for the online Master of Public Health (“MPH”) degree program is $550 per credit hour.
Tuition for the online Master of Science in Nursing (“MSN”) degree program is $695 per credit hour. Tuition for the online Family Nurse Practitioner (“FNP”) degree program is $710 per credit hour. Tuition for the online Doctor of Nursing Practice (“DNP”) degree program is $806 per credit hour.
These tuition rates do not include the cost of course fees, books, supplies, transportation, clinical fees, living expenses, or other fees as listed in the Chamberlain academic catalog.
In most cases, these tuition rates represent increases of approximately 0% to 8% with an average of approximately 4% from the prior year. These tuition rates do not include the cost of course fees, books, supplies, transportation, clinical fees, living expenses, or other fees as listed in the Chamberlain academic catalog.
Financing Activities The following table provides a summary of cash flows from financing activities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2023 ​ 2022 Repurchases of common stock for treasury ​ $ (123,133) ​ $ (120,000) Payment on equity forward contract ​ ​ (13,162) ​ ​ (30,000) Net repayments of long-term debt ​ ​ (150,861) ​ ​ (229,713) Payment of debt discount and issuance costs ​ ​ — ​ ​ (49,553) Payment for purchase of redeemable noncontrolling interest of subsidiary ​ ​ — ​ ​ (1,790) Other ​ (1,359) ​ 6,580 Net cash used in financing activities ​ $ (288,515) ​ $ (424,476) On November 8, 2018, we announced that the Board authorized Adtalem’s eleventh share repurchase program, which allowed Adtalem to repurchase up to $300.0 million of its common stock through December 31, 2021.
Financing Activities The following table provides a summary of cash flows from financing activities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2024 ​ 2023 Repurchases of common stock for treasury ​ $ (261,966) ​ $ (123,133) Payment on equity forward contract ​ ​ — ​ ​ (13,162) Net repayments of long-term debt ​ ​ (50,000) ​ ​ (150,861) Other ​ 10,168 ​ (1,359) Net cash used in financing activities ​ $ (301,798) ​ $ (288,515) On March 1, 2022, we announced that the Board authorized Adtalem’s thirteenth share repurchase program, which allows Adtalem to repurchase up to $300.0 million of its common stock through February 25, 2025.
Tuition for the online Master of Social Work (“MSW”) degree program is $695 per credit hour. Tuition for the onsite Master of Physician Assistant Studies (“MPAS”) is $8,000 per session. Some of these tuition rates increased by 3% to 4% from the prior year.
Tuition for the online Master of Public Health (“MPH”) degree program is $590 per credit hour. Tuition for the online Master of Social Work (“MSW”) degree program is $695 per credit hour. Tuition for the onsite Master of Physician Assistant Studies (“MPAS”) is $8,000 per session.
This income consisted of the following: (i) loss of $1.0 million driven by ongoing litigation costs and settlements related to the DeVry University divestiture, partially offset by the operating results related to ACAMS, Becker, OCL, and EduPristine, and income from the DeVry University earn-out; (ii) a gain on the sale of ACAMS, Becker, OCL, and EduPristine of $473.5 million; and (iii) a provision for income taxes of $125.6 million associated with the items listed above.
This loss consisted of the following: (i) loss of $0.8 million driven by ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, partially offset by income from the DeVry University earn-out; and (ii) provision for income taxes of $0.2 million associated with the items listed above.
While we believe that the amount accrued to-date is adequate, future changes in circumstances could impact these determinations. See Note 21 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our loss contingencies.
The valuation of liabilities for these contingencies is reviewed on a quarterly basis and any necessary adjustments to the accrual on the Consolidated Balance Sheets is recorded. While we believe that the amount accrued to-date is adequate, future changes in circumstances could impact these determinations. See Note 21 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8.
Adtalem received $5.2 million of cash at the time of closing and held a mortgage loan, secured by the property, from DePaul College Prep for $46.8 million. The mortgage loan was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. The buyer had an option to make prepayments.
The mortgage loan was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. The buyer had an option to make prepayments. On February 23, 2023, DePaul College Prep paid the mortgage loan in full.
Adtalem received $5.2 million of cash at the time of closing and held a mortgage, secured by the property, from DePaul College Prep for $46.8 million. The mortgage was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. DePaul College Prep had an option to make prepayments.
The mortgage was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. DePaul College Prep had an option to make prepayments. Due to Adtalem’s involvement with financing the sale, the transaction did not qualify as a sale for accounting purposes at the time of closing.
A description of special items in our non-GAAP financial measures described above are as follows: ● Deferred revenue adjustment related to a revenue purchase accounting adjustment to record Walden’s deferred revenue at fair value. ● CEO transition costs related to acceleration of stock-based compensation expense. ● Restructuring expense primarily related to plans to achieve synergies with the Walden acquisition and real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office.
A description of special items in our non-GAAP financial measures described above are as follows: ● Restructuring expense primarily related to real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office.
The decrease of $9.8 million in cash generated from changes in assets and liabilities was primarily due to timing differences in accounts receivable, prepaid assets, prepaid income taxes, accounts payable, accrued payroll and benefits, accrued liabilities, accrued interest, and deferred revenue. Investing Activities Capital expenditures in fiscal year 2023 were $37.0 million compared to $31.1 million in the prior year.
The increase of $50.9 million in cash generated from changes in assets and liabilities between fiscal year 2024 and 2023 was primarily due to timing differences in accounts and financing receivables, prepaid assets, cloud computing implementation assets, accounts payable, accrued payroll and benefits, accrued liabilities, accrued interest, and deferred revenue. 45 Table of Contents Investing Activities Capital expenditures were $48.9 million and $26.0 million in fiscal year 2024 and 2023, respectively.
These are transaction costs associated with acquiring Walden and costs associated with integrating Walden into Adtalem. In addition, during fiscal year 2023, we initiated transformation initiatives to accelerate growth and organizational agility. Certain costs relating to this transformation are included in business acquisition and integration costs in the Consolidated Statements of Income.
Business Acquisition and Integration Expense Business acquisition and integration expense was $34.2 million and $42.7 million in fiscal year 2024 and 2023, respectively. These are costs associated with integrating Walden into Adtalem. In addition, during fiscal year 2023, we initiated transformation initiatives to accelerate growth and organizational agility.
In addition, in fiscal year 2023, we recorded a net tax benefit of $6.4 million for the release of a valuation allowance on certain deferred tax assets based on our reassessment of the amount of state net operating loss carryforwards that are more likely than not to be realized.
In addition, in fiscal year 2023, we released a valuation allowance on certain deferred tax assets based on our reassessment of the amount of state net operating loss carryforwards that are more likely than not to be realized. 44 Table of Contents Discontinued Operations Beginning in the second quarter of fiscal year 2022, ACAMS, Becker, OCL, and EduPristine operations were classified as discontinued operations.
Cash Flow Summary Operating Activities The following table provides a summary of cash flows from operating activities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2023 ​ 2022 Income (loss) from continuing operations ​ $ 101,752 ​ $ (35,955) Non-cash items ​ 196,924 ​ 283,158 Changes in assets and liabilities ​ (92,992) ​ (83,201) Net cash provided by operating activities-continuing operations ​ $ 205,684 ​ $ 164,002 Net cash provided by operating activities from continuing operations in fiscal year 2023 was $205.7 million compared to $164.0 million in the prior year.
Cash Flow Summary Operating Activities The following table provides a summary of cash flows from operating activities (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2024 ​ 2023 Income from continuing operations ​ $ 137,713 ​ $ 101,752 Non-cash items ​ 203,567 ​ 196,725 Changes in assets and liabilities ​ (52,913) ​ (103,787) Net cash provided by operating activities-continuing operations ​ $ 288,367 ​ $ 194,690 Net cash provided by operating activities from continuing operations in fiscal year 2024 was $288.4 million compared to $194.7 million in the prior year.
Adtalem reduces its net tax assets for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions Adtalem has taken. Contingencies Adtalem is subject to contingencies, such as various claims and legal actions that arise in the normal conduct of its business.
Adtalem is subject to audit by federal, state, and foreign tax authorities and Adtalem reduces its net tax assets for the estimated additional tax and interest that may result from those tax authorities disputing uncertain tax positions Adtalem has taken.
Other Income, Net Other income, net in fiscal year 2023 was $7.0 million compared to $1.1 million in the prior year. The increase in other income, net was primarily the result of an increase in interest income, partially offset by a $5.0 million investment impairment of an equity investment.
Other Income, Net Other income, net was income of $10.5 million and income of $7.0 million in fiscal year 2024 and 2023, respectively. The other income, net increase in fiscal year 2024 was primarily driven by $5.0 million of expense in fiscal year 2023 for an impairment of an equity investment.
In addition, students first enrolled in May 2022, and after, pay administrative fees of $5,086 and $3,427 for the basic sciences and final clinical rotation portions of the program, respectively, per semester. ● Effective for semesters beginning in September 2022, for students who first enrolled prior to May 2022, tuition rates for the beginning basic sciences and final clinical rotation portions of RUSM’s medical program are $25,988 and $28,676, respectively, per semester.
In addition, students first enrolled in May 2022 and after are charged administrative fees of $5,430 and $3,841 for the basic sciences and clinical rotation portions of the program, respectively, per semester, which represents a 6.8% and 12.0% increase, respectively, from the prior academic year. ● Effective for semesters beginning in September 2023, for students first enrolled prior to May 2022, tuition rates for the beginning basic sciences and clinical rotation portions of RUSM’s medical program are $27,547 and $30,397, respectively, per semester.
Medical and Veterinary Schools Medical and Veterinary Schools Student Enrollment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2023 ​ Semester ​ Sept. 2022 ​ Jan. 2023 ​ May 2023 ​ Total students ​ 5,634 ​ 5,312 ​ 4,869 ​ % change from prior year ​ 3.4 % 1.6 % (8.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2022 ​ Semester ​ Sept. 2021 ​ Jan. 2022 ​ May 2022 Total students ​ 5,449 ​ 5,228 ​ 5,304 ​ % change from prior year ​ (6.9) % (1.2) % 3.5 % Medical and Veterinary revenue increased 2.1%, or $7.2 million, to $346.1 million in fiscal year 2023 compared to the prior year, driven by tuition rate increases at all three institutions in this segment, partially offset by an average total student enrollment decline of 1.0% compared to the prior year and the higher use of scholarships to attract and retain students at AUC and RUSM.
These tuition rates, event charges, and fees do not include the cost of books or personal technology, supplies, transportation, or living expenses. 39 Table of Contents Medical and Veterinary Medical and Veterinary Student Enrollment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2024 ​ Semester ​ Sept. 2023 ​ Jan. 2024 ​ May 2024 ​ Total students ​ 5,209 ​ 5,073 ​ 4,726 ​ % change from prior year ​ (7.5) % (4.5) % (2.9) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2023 ​ Semester ​ Sept. 2022 ​ Jan. 2023 ​ May 2023 Total students ​ 5,634 ​ 5,312 ​ 4,869 ​ % change from prior year ​ 3.4 % 1.6 % (8.2) % Medical and Veterinary revenue increased 2.8%, or $9.7 million, to $355.8 million in fiscal year 2024 compared to the prior year, driven by tuition rate increases at all three institutions in this segment, partially offset by decreased enrollment at all three institutions.
We record an accrual for those matters where management believes a loss is probable and can be reasonably estimated. For those matters for which we have not recorded an accrual, their possible impact on Adtalem’s business, financial condition, or results of operations, cannot be predicted at this time.
For those matters for which we have not recorded an accrual, their possible impact on Adtalem’s business, financial condition, or results of operations, cannot be predicted at this time. A significant amount of judgment and the use of estimates are required to quantify our ultimate exposure in these matters.
The eleventh share repurchase program commenced in January 2019 and was completed in January 2021. On February 4, 2020, we announced that the Board authorized Adtalem’s twelfth share repurchase program, which allowed Adtalem to repurchase up to $300.0 million of its common stock through December 31, 2021.
On January 16, 2024, Adtalem completed its thirteenth share repurchase program. On January 19, 2024, we announced that the Board authorized Adtalem’s fourteenth share repurchase program, which allows Adtalem to repurchase up to $300.0 million of its common stock through January 16, 2027.
Fiscal Year Ended June 30, 2022 Revenue The following table presents revenue by segment detailing the changes from the prior year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2023 ​ ​ Chamberlain Walden Medical and Veterinary Consolidated Fiscal year 2022 ​ $ 557,536 ​ $ 485,393 ​ $ 338,913 ​ $ 1,381,842 ​ Organic growth (decline) ​ ​ 13,498 ​ ​ (15,818) ​ ​ 7,154 ​ ​ 4,834 ​ Effect of acquisitions ​ ​ — ​ ​ 64,150 ​ ​ — ​ ​ 64,150 ​ Fiscal year 2023 ​ $ 571,034 ​ $ 533,725 ​ $ 346,067 ​ $ 1,450,826 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal year 2023 % change: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Organic growth (decline) ​ ​ 2.4 % ​ (3.3) % ​ 2.1 % ​ 0.3 % Effect of acquisitions ​ ​ — ​ ​ 13.2 % ​ — ​ ​ 4.6 % Fiscal year 2023 % change ​ ​ 2.4 % ​ 10.0 % ​ 2.1 % ​ 5.0 % 50 Table of Contents Chamberlain Chamberlain Student Enrollment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2023 ​ Session ​ July 2022 ​ Sept. 2022 ​ Nov. 2022 ​ Jan. 2023 ​ Mar. 2023 ​ May 2023 ​ Total students ​ 31,371 ​ 33,153 ​ 33,390 ​ 34,760 ​ 34,847 ​ 33,284 ​ % change from prior year ​ (4.1) % (4.0) % (0.8) % 1.8 % 2.0 % 1.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2022 ​ Session ​ July 2021 ​ Sept. 2021 ​ Nov. 2021 ​ Jan. 2022 ​ Mar. 2022 ​ May 2022 Total students ​ 32,729 ​ 34,539 ​ 33,648 ​ 34,141 ​ 34,158 ​ 32,891 ​ % change from prior year ​ 1.6 % (2.8) % (2.1) % (4.5) % (4.3) % (5.8) % Chamberlain revenue increased 2.4%, or $13.5 million, to $571.0 million in fiscal year 2023 compared to the prior year, driven by an increase in fee revenue along with lower scholarships and discounts.
Results of Operations Revenue The following table presents revenue by segment detailing the changes from the prior year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2024 ​ ​ Chamberlain Walden Medical and Veterinary Consolidated Fiscal year 2023 ​ $ 571,034 ​ $ 533,725 ​ $ 346,067 ​ $ 1,450,826 ​ Growth ​ ​ 62,488 ​ ​ 61,607 ​ ​ 9,731 ​ ​ 133,826 ​ Fiscal year 2024 ​ $ 633,522 ​ $ 595,332 ​ $ 355,798 ​ $ 1,584,652 ​ % change from prior year ​ ​ 10.9 % ​ 11.5 % ​ 2.8 % ​ 9.2 % Chamberlain Chamberlain Student Enrollment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2024 ​ Session ​ July 2023 ​ Sept. 2023 ​ Nov. 2023 ​ Jan. 2024 ​ Mar. 2024 ​ May 2024 ​ Total students ​ 32,175 ​ 34,889 ​ 35,592 ​ 37,196 ​ 37,985 ​ 36,750 ​ % change from prior year ​ 2.6 % 5.2 % 6.6 % 7.0 % 9.0 % 10.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal Year 2023 ​ Session ​ July 2022 ​ Sept. 2022 ​ Nov. 2022 ​ Jan. 2023 ​ Mar. 2023 ​ May 2023 Total students ​ 31,371 ​ 33,153 ​ 33,390 ​ 34,760 ​ 34,847 ​ 33,284 ​ % change from prior year ​ (4.1) % (4.0) % (0.8) % 1.8 % 2.0 % 1.2 % Chamberlain revenue increased 10.9%, or $62.5 million, to $633.5 million in fiscal year 2024 compared to the prior year, driven by an increase in enrollment and higher tuition rates.
Discussions throughout this MD&A are based on continuing operations unless otherwise noted. The MD&A should be read in conjunction with the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto. Segments We present three reportable segments as follows: Chamberlain – Offers degree and non-degree programs in the nursing and health professions postsecondary education industry.
Discussions throughout this MD&A are based on continuing operations unless otherwise noted. The MD&A should be read in conjunction with the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto. The following discussion is on the comparison between fiscal year 2024 and fiscal year 2023 results.
Adtalem had a surety-backed letter of credit outstanding of $84.0 million as of June 30, 2023 in favor of the ED on behalf of Walden, which allows Walden to participate in Title IV programs.
In addition, Adtalem had a letter of credit outstanding under its Revolver in the amount of $157.9 million as of June 30, 2024, in favor of ED, which allows Adtalem institutions to participate in Title IV programs. As of June 30, 2024, Adtalem had $227.3 million of letters of credit outstanding in favor of ED.
For students who entered RUSVM before September 2018, tuition rates for the pre-clinical and clinical curriculum are $21,069 and $26,449, respectively, per semester effective September 2022. All of these tuition rates represent a 5.0% increase from the prior academic year.
Effective for semesters beginning in September 2023, for students first enrolled in September 2018 and after, tuition rates for the pre-clinical and clinical curriculum of RUSVM’s veterinary program are $24,044 per semester. All of these tuition rates represent a 6.0% increase from the prior academic year.
The decrease in amortization expense is driven by the decrease in amortization relating to the student relationships intangible asset. This intangible asset is amortized based on the estimated retention of the students and considers the revenue and cash flow associated with these existing students, which are concentrated at the beginning of the asset’s useful life.
This intangible asset is amortized based on the estimated retention of the students and considers the revenue and cash flow associated with these existing students, which are concentrated at the beginning of the asset’s useful life. 43 Table of Contents Consolidated adjusted operating income increased 7.4%, or $21.2 million, to $308.8 million in fiscal year 2024 compared to the prior year.
Student Services and Administrative Expense The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization expense of finite-lived intangible assets related to business acquisitions.
The decrease in the percentage was primarily the resul t of revenue growth accompanied with cost efficiencies. Student Services and Administrative Expense The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization expense of acquired intangible assets.
Enrollment has begun to recover in several graduate and doctoral programs and the undergraduate Bachelor of Science-Nursing (“BSN”) programs. These improvements have been partially offset by a decrease in total student enrollment in the Registered Nurse to Bachelor of Science in Nursing (“RN-to-BSN”) online degree program.
Enrollment has improved in all graduate and doctoral programs and the undergraduate Bachelor of Science in Nursing (“BSN”) programs. In the March and May 2024 sessions, the Registered Nurse to Bachelor of Science in Nursing (“RN-BSN”) online degree program also saw increased total enrollment.
The following table presents student services and administrative expense by segment detailing the changes from the prior year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2023 ​ Chamberlain Walden Medical and Veterinary Home Office and Other ​ Consolidated ​ Fiscal year 2022 ​ $ 175,516 ​ $ 283,967 ​ $ 67,436 ​ $ 39,575 ​ $ 566,494 ​ Cost increase (decrease) ​ 11,289 ​ 9,890 ​ 11,162 ​ (7,748) ​ 24,593 ​ Effect of acquisitions ​ — ​ 27,152 ​ — ​ — ​ 27,152 ​ Intangible amortization expense ​ ​ — ​ ​ (36,035) ​ ​ — ​ ​ — ​ ​ (36,035) ​ Litigation reserve ​ ​ — ​ ​ 10,000 ​ ​ — ​ ​ — ​ ​ 10,000 ​ CEO transition costs ​ ​ — ​ ​ — ​ ​ — ​ ​ (6,195) ​ ​ (6,195) ​ Fiscal year 2023 ​ $ 186,805 ​ $ 294,974 ​ $ 78,598 ​ $ 25,632 ​ $ 586,009 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal year 2023 % change: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost increase ​ ​ 6.4 % 3.5 % ​ 16.6 % NM ​ ​ 4.3 % Effect of acquisitions ​ — ​ 9.6 % — ​ NM ​ 4.8 % Effect of intangible amortization expense ​ — ​ (12.7) % — ​ NM ​ (6.4) % Effect of litigation reserve ​ — ​ 3.5 % — ​ NM ​ 1.8 % Effect of CEO transition costs ​ — ​ — ​ — ​ NM ​ (1.1) % Fiscal year 2023 % change ​ 6.4 % 3.9 % 16.6 % NM ​ 3.4 % Student services and administrative expense increased 3.4%, or $19.5 million, to $586.0 million in fiscal year 2023 compared to the prior year.
The following table presents student services and administrative expense by segment detailing the changes from the prior year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2024 ​ Chamberlain Walden Medical and Veterinary Home Office ​ Consolidated ​ Fiscal year 2023 ​ $ 186,805 ​ $ 294,974 ​ $ 78,598 ​ $ 25,632 ​ $ 586,009 ​ Cost increase ​ 31,702 ​ 19,940 ​ 5,470 ​ 5,444 ​ 62,556 ​ Amortization of acquired intangible assets decrease ​ ​ — ​ ​ (25,595) ​ ​ — ​ ​ — ​ ​ (25,595) ​ Litigation reserve increase ​ ​ — ​ ​ 8,500 ​ ​ — ​ ​ — ​ ​ 8,500 ​ Loss on assets held for sale increase ​ ​ — ​ ​ — ​ ​ — ​ ​ 647 ​ ​ 647 ​ Debt modification costs increase ​ ​ — ​ ​ — ​ ​ — ​ ​ 848 ​ ​ 848 ​ Fiscal year 2024 ​ $ 218,507 ​ $ 297,819 ​ $ 84,068 ​ $ 32,571 ​ $ 632,965 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal year 2024 % change: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost increase ​ ​ 17.0 % 6.8 % ​ 7.0 % NM ​ ​ 10.7 % Amortization of acquired intangible assets decrease ​ — ​ (8.7) % — ​ NM ​ (4.4) % Litigation reserve increase ​ — ​ 2.9 % — ​ NM ​ 1.5 % Loss on assets held for sale increase ​ — ​ — ​ — ​ NM ​ 0.1 % Debt modification costs increase ​ — ​ — ​ — ​ NM ​ 0.1 % Fiscal year 2024 % change ​ 17.0 % 1.0 % 7.0 % NM ​ 8.0 % Student services and administrative expense increased 8.0%, or $47.0 million, to $633.0 million in fiscal year 2024 compared to the prior year.
As a percentage of revenue, student services and administrative expense was 40.4% in fiscal year 2023 compared to 41.0% in the prior year.
This cost increase was primarily driven by an increase in incentive compensation expense, marketing expense, and investments to support growth initiatives. As a percentage of revenue, student services and administrative expense was 39.9% in fiscal year 2024 compared to 40.4% in the prior year.
The capital expenditures in fiscal year 2023 primarily consisted of spending for Chamberlain’s new campus development and improvements and Adtalem’s home office, including information technology investments. Capital spending for fiscal year 2024 will support continued investment for new campus development at Chamberlain, maintenance at the medical and 67 Table of Contents veterinary schools, and information technology.
The capital expenditures in fiscal year 2024 primarily consisted of spending for information technology investments and Chamberlain’s campus development. For fiscal year 2025, we expect capital spending on information technology, new campus development at Chamberlain, and facility improvements at the medical and veterinary schools. Management anticipates fiscal year 2025 capital spending to be in the $55 to $75 million range.
The operating income reconciliation is included in the results of operations section within this MD&A. 73 Table of Contents Net income attributable to Adtalem reconciliation to adjusted net income (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2023 ​ 2022 ​ 2021 Net income attributable to Adtalem (GAAP) ​ $ 93,358 ​ $ 310,991 ​ $ 70,027 Deferred revenue adjustment ​ ​ — ​ ​ 8,561 ​ ​ — CEO transition costs ​ ​ — ​ ​ 6,195 ​ ​ — Restructuring expense ​ ​ 18,817 ​ ​ 25,628 ​ ​ 6,869 Business acquisition and integration expense ​ ​ 42,661 ​ ​ 53,198 ​ ​ 31,593 Intangible amortization expense ​ ​ 61,239 ​ ​ 97,274 ​ ​ — Gain on sale of assets ​ ​ (13,317) ​ ​ — ​ ​ — Pre-acquisition interest expense, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, and investment impairment ​ ​ 19,226 ​ ​ 48,804 ​ ​ 26,746 Net tax benefit related to a valuation allowance release ​ ​ (6,184) ​ ​ — ​ ​ — Income tax impact on non-GAAP adjustments (1) ​ ​ (31,997) ​ ​ (51,683) ​ ​ (16,297) Net loss (income) from discontinued operations attributable to Adtalem ​ ​ 8,394 ​ ​ (346,946) ​ ​ (6,579) Adjusted net income (non-GAAP) ​ $ 192,197 ​ $ 152,022 ​ $ 112,359 (1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.
Net income reconciliation to adjusted net income (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ 2024 ​ 2023 Net income (GAAP) ​ $ 136,777 ​ $ 93,358 Restructuring expense ​ ​ 1,870 ​ ​ 18,817 Business acquisition and integration expense ​ ​ 34,215 ​ ​ 42,661 Amortization of acquired intangible assets ​ ​ 35,644 ​ ​ 61,239 Gain on sale of assets ​ ​ — ​ ​ (13,317) Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs ​ ​ 21,108 ​ ​ 19,226 Tax benefit due to change in valuation allowance ​ ​ — ​ ​ (6,184) Tax benefit due to change in unrecognized tax benefits ​ ​ (5,657) ​ ​ — Income tax impact on non-GAAP adjustments (1) ​ ​ (23,104) ​ ​ (31,997) Loss from discontinued operations ​ ​ 936 ​ ​ 8,394 Adjusted net income (non-GAAP) ​ $ 201,789 ​ $ 192,197 (1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.
The following table presents cost of educational services by segment detailing the changes from the prior year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2023 ​ Chamberlain Walden Medical and Veterinary ​ Consolidated ​ Fiscal year 2022 $ 254,768 ​ $ 202,680 $ 202,328 $ 659,776 ​ Cost decrease (6,041) ​ (26,066) ​ (2,194) (34,301) ​ Effect of acquisitions — ​ 23,011 — 23,011 ​ Fiscal year 2023 $ 248,727 ​ $ 199,625 $ 200,134 $ 648,486 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fiscal year 2023 % change: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost decrease ​ (2.4) % (12.9) % ​ (1.1) % ​ (5.2) % Effect of acquisitions ​ — ​ 11.4 % ​ — ​ ​ 3.5 % Fiscal year 2023 % change ​ (2.4) % (1.5) % ​ (1.1) % ​ (1.7) % Cost of educational services decreased 1.7%, or $11.3 million, to $648.5 million in fiscal year 2023 compared to the prior year.
The following table presents cost of educational services by segment detailing the changes from the prior year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2024 ​ Chamberlain Walden Medical and Veterinary ​ Consolidated ​ Fiscal year 2023 $ 248,727 ​ $ 199,625 $ 200,134 $ 648,486 ​ Cost increase 28,488 ​ 21,485 ​ 89 50,062 ​ Fiscal year 2024 $ 277,215 ​ $ 221,110 $ 200,223 $ 698,548 ​ % change from prior year ​ 11.5 % 10.8 % ​ 0.0 % ​ 7.7 % Cost of educational services increased 7.7%, or $50.1 million, to $698.5 million in fiscal year 2024 compared to the prior year.
“Financial Statements and Supplementary Data.” Operating Income The following table presents operating income by segment detailing the changes from the prior year (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, 2023 ​ ​ Chamberlain Walden Medical and Veterinary Home Office and Other ​ Consolidated Fiscal year 2022 ​ $ 124,414 ​ $ (5,306) ​ $ 59,357 ​ $ (101,719) ​ $ 76,746 Organic change ​ ​ 8,251 ​ ​ (8,206) ​ ​ (1,812) ​ ​ 7,747 ​ ​ 5,980 Effect of acquisitions ​ — ​ 13,988 ​ — ​ — ​ 13,988 Deferred revenue adjustment change ​ ​ — ​ ​ 8,561 ​ ​ — ​ ​ — ​ ​ 8,561 CEO transition costs change ​ ​ — ​ ​ — ​ ​ — ​ ​ 6,195 ​ ​ 6,195 Restructuring expense change ​ ​ 2,020 ​ ​ 808 ​ ​ 2,104 ​ ​ 1,879 ​ ​ 6,811 Business acquisition and integration expense change ​ ​ — ​ ​ — ​ ​ — ​ ​ 10,537 ​ ​ 10,537 Intangible amortization expense change ​ ​ — ​ ​ 36,035 ​ ​ — ​ ​ — ​ ​ 36,035 Litigation reserve change ​ ​ — ​ ​ (10,000) ​ ​ — ​ ​ — ​ ​ (10,000) Gain on sale of assets change ​ ​ — ​ ​ — ​ ​ — ​ ​ 13,317 ​ ​ 13,317 Fiscal year 2023 ​ $ 134,685 ​ $ 35,880 ​ $ 59,649 ​ $ (62,044) ​ $ 168,170 55 Table of Contents The following table presents a reconciliation of operating income (GAAP) to adjusted operating income (non-GAAP) by segment (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ Increase/(Decrease) ​ ​ ​ 2023 ​ 2022 ​ $ ​ % ​ Chamberlain: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 134,685 ​ $ 124,414 ​ $ 10,271 ​ 8.3 % Restructuring expense ​ ​ 818 ​ ​ 2,838 ​ ​ (2,020) ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 135,503 ​ $ 127,252 ​ $ 8,251 ​ 6.5 % Operating margin (GAAP) ​ ​ 23.6 % ​ 22.3 % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 23.7 % ​ 22.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Walden: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (loss) (GAAP) ​ $ 35,880 ​ $ (5,306) ​ $ 41,186 ​ NM ​ Deferred revenue adjustment ​ ​ — ​ ​ 8,561 ​ ​ (8,561) ​ ​ ​ Restructuring expense ​ ​ 3,245 ​ ​ 4,053 ​ ​ (808) ​ ​ ​ Intangible amortization expense ​ ​ 61,239 ​ ​ 97,274 ​ ​ (36,035) ​ ​ ​ Litigation reserve ​ ​ 10,000 ​ ​ — ​ ​ 10,000 ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 110,364 ​ $ 104,582 ​ $ 5,782 ​ 5.5 % Operating margin (GAAP) ​ ​ 6.7 % ​ (1.1) % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 20.7 % ​ 21.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Medical and Veterinary: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 59,649 ​ $ 59,357 ​ $ 292 ​ 0.5 % Restructuring expense ​ ​ 7,687 ​ ​ 9,791 ​ ​ (2,104) ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 67,336 ​ $ 69,148 ​ $ (1,812) ​ (2.6) % Operating margin (GAAP) ​ ​ 17.2 % ​ 17.5 % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 19.5 % ​ 20.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home Office and Other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss (GAAP) ​ $ (62,044) ​ $ (101,719) ​ $ 39,675 ​ 39.0 % CEO transition costs ​ ​ — ​ ​ 6,195 ​ ​ (6,195) ​ ​ ​ Restructuring expense ​ ​ 7,067 ​ ​ 8,946 ​ ​ (1,879) ​ ​ ​ Business acquisition and integration expense ​ ​ 42,661 ​ ​ 53,198 ​ ​ (10,537) ​ ​ ​ Gain on sale of assets ​ ​ (13,317) ​ ​ — ​ ​ (13,317) ​ ​ ​ Adjusted operating loss (non-GAAP) ​ $ (25,633) ​ $ (33,380) ​ $ 7,747 ​ 23.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adtalem Global Education: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 168,170 ​ $ 76,746 ​ $ 91,424 ​ 119.1 % Deferred revenue adjustment ​ ​ — ​ ​ 8,561 ​ ​ (8,561) ​ ​ ​ CEO transition costs ​ ​ — ​ ​ 6,195 ​ ​ (6,195) ​ ​ ​ Restructuring expense ​ ​ 18,817 ​ ​ 25,628 ​ ​ (6,811) ​ ​ ​ Business acquisition and integration expense ​ ​ 42,661 ​ ​ 53,198 ​ ​ (10,537) ​ ​ ​ Intangible amortization expense ​ ​ 61,239 ​ ​ 97,274 ​ ​ (36,035) ​ ​ ​ Litigation reserve ​ ​ 10,000 ​ ​ — ​ ​ 10,000 ​ ​ ​ Gain on sale of assets ​ ​ (13,317) ​ ​ — ​ ​ (13,317) ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 287,570 ​ $ 267,602 ​ $ 19,968 ​ 7.5 % Operating margin (GAAP) ​ ​ 11.6 % ​ 5.6 % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 19.8 % ​ 19.4 % ​ ​ ​ ​ ​ Consolidated operating income increased 119.1%, or $91.4 million, to $168.2 million in fiscal year 2023 compared to the prior year.
“Financial Statements and Supplementary Data.” 42 Table of Contents Operating Income The following table presents a reconciliation of operating income (GAAP) to adjusted operating income (non-GAAP) by segment (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended June 30, ​ ​ ​ ​ ​ ​ ​ ​ Increase/(Decrease) ​ ​ ​ 2024 ​ 2023 ​ $ ​ % ​ Chamberlain: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 137,800 ​ $ 134,685 ​ $ 3,115 ​ 2.3 % Restructuring expense ​ ​ — ​ ​ 818 ​ ​ (818) ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 137,800 ​ $ 135,503 ​ $ 2,297 ​ 1.7 % Operating margin (GAAP) ​ ​ 21.8 % ​ 23.6 % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 21.8 % ​ 23.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Walden: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 77,179 ​ $ 35,880 ​ $ 41,299 ​ 115.1 % Restructuring expense ​ ​ (776) ​ ​ 3,245 ​ ​ (4,021) ​ ​ ​ Amortization of acquired intangible assets ​ ​ 35,644 ​ ​ 61,239 ​ ​ (25,595) ​ ​ ​ Litigation reserve ​ ​ 18,500 ​ ​ 10,000 ​ ​ 8,500 ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 130,547 ​ $ 110,364 ​ $ 20,183 ​ 18.3 % Operating margin (GAAP) ​ ​ 13.0 % ​ 6.7 % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 21.9 % ​ 20.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Medical and Veterinary: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 71,065 ​ $ 59,649 ​ $ 11,416 ​ 19.1 % Restructuring expense ​ ​ 442 ​ ​ 7,687 ​ ​ (7,245) ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 71,507 ​ $ 67,336 ​ $ 4,171 ​ 6.2 % Operating margin (GAAP) ​ ​ 20.0 % ​ 17.2 % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 20.1 % ​ 19.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Home Office: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating loss (GAAP) ​ $ (68,990) ​ $ (62,044) ​ $ (6,946) ​ (11.2) % Restructuring expense ​ ​ 2,204 ​ ​ 7,067 ​ ​ (4,863) ​ ​ ​ Business acquisition and integration expense ​ ​ 34,215 ​ ​ 42,661 ​ ​ (8,446) ​ ​ ​ Loss on assets held for sale ​ ​ 647 ​ ​ — ​ ​ 647 ​ ​ ​ Debt modification costs ​ ​ 848 ​ ​ — ​ ​ 848 ​ ​ ​ Gain on sale of assets ​ ​ — ​ ​ (13,317) ​ ​ 13,317 ​ ​ ​ Adjusted operating loss (non-GAAP) ​ $ (31,076) ​ $ (25,633) ​ $ (5,443) ​ (21.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adtalem Global Education: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating income (GAAP) ​ $ 217,054 ​ $ 168,170 ​ $ 48,884 ​ 29.1 % Restructuring expense ​ ​ 1,870 ​ ​ 18,817 ​ ​ (16,947) ​ ​ ​ Business acquisition and integration expense ​ ​ 34,215 ​ ​ 42,661 ​ ​ (8,446) ​ ​ ​ Amortization of acquired intangible assets ​ ​ 35,644 ​ ​ 61,239 ​ ​ (25,595) ​ ​ ​ Litigation reserve ​ ​ 18,500 ​ ​ 10,000 ​ ​ 8,500 ​ ​ ​ Loss on assets held for sale ​ ​ 647 ​ ​ — ​ ​ 647 ​ ​ ​ Debt modification costs ​ ​ 848 ​ ​ — ​ ​ 848 ​ ​ ​ Gain on sale of assets ​ ​ — ​ ​ (13,317) ​ ​ 13,317 ​ ​ ​ Adjusted operating income (non-GAAP) ​ $ 308,778 ​ $ 287,570 ​ $ 21,208 ​ 7.4 % Operating margin (GAAP) ​ ​ 13.7 % ​ 11.6 % ​ ​ ​ ​ ​ Operating margin (non-GAAP) ​ ​ 19.5 % ​ 19.8 % ​ ​ ​ ​ ​ Consolidated operating income increased 29.1%, or $48.9 million, to $217.1 million in fiscal year 2024 compared to the prior year.
These tuition rates represented a 2.4% increase from the prior academic year. ● For students who entered the RUSVM program in September 2018 or later, the tuition rate for the pre-clinical (Semesters 1-7) and clinical curriculum (Semesters 8-10) was $21,603 per semester effective September 2021.
These tuition rates and fees represent a 6.0% increase from the prior academic year. ● Effective for semesters beginning in September 2023, for students who first enrolled prior to September 2018, tuition rates for the pre-clinical (semesters 1-7) and clinical curriculum (semesters 8-10) of RUSVM’s veterinary program are $22,334 and $28,034, respectively, per semester.
This segment includes the operations of the American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“RUSVM”), which are collectively referred to as the “medical and veterinary schools.” “Home Office and Other” includes activities not allocated to a reportable segment.
Medical and Veterinary – Offers degree and certificate programs in the medical and veterinary postsecondary education industry. This segment includes the operations of AUC, RUSM, and RUSVM, which are collectively referred to as the “medical and veterinary schools.” “Home Office” includes activities not allocated to a reportable segment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSubstantially all of their financial transactions are denominated in the U.S. dollar. As of June 30, 2023, the interest rate on Adtalem’s Term Loan B was based upon LIBOR for eurocurrency rate loans or an alternative base rate for periods typically ranging from one to three months.
Biggest changeSubstantially all of their financial transactions are denominated in the U.S. dollar. The interest rate on Adtalem’s Term Loan B is based upon the Secured Overnight Financing Rate (“SOFR”) for eurocurrency rate loans. As of June 30, 2024, Adtalem had $253.3 million in outstanding borrowings under the Term Loan B with an interest rate of 8.84%.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Adtalem is not dependent upon the price levels, nor affected by fluctuations in pricing, of any particular commodity or group of commodities. However, more than 50% of Adtalem’s costs are in the form of wages and benefits.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Adtalem is not dependent upon the price levels, nor affected by fluctuations in pricing, of any particular commodity or group of commodities. The financial position and results of operations of AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency.
As of June 30, 2023, Adtalem had $303.3 million in outstanding borrowings under the Term Loan B with an interest rate of 9.19%. Based upon borrowings of $303.3 million, a 100 basis point increase in short-term interest rates would result in $3.0 million of additional annual interest expense.
Based upon borrowings of $253.3 million, a 100 basis point increase in short-term interest rates would result in $2.5 million of additional annual interest expense.
Removed
Changes in employment market conditions or escalations in employee benefit costs could cause Adtalem to experience cost increases at levels beyond what it has historically experienced.
Removed
We have not yet experienced significant inflationary pressures on wages or other costs of delivering our educational services; however, should inflation persist in the overall economy, cost increases could affect our results of operations in the future. 76 Table of Contents The financial position and results of operations of AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency.
Removed
On June 27, 2023, Adtalem entered into Amendment No. 1 to Credit Agreement, identifying the Secured Overnight Financing Rate (“SOFR”) as the replacement benchmark rate for eurocurrency rate loans within the Credit Agreement. Beginning with the next interest rate reset in July 2023, the base rate will change to SOFR.
Removed
Adtalem’s cash is held in accounts at various large, financially secure depository institutions. Although the amount on deposit at a given institution typically will exceed amounts subject to guarantee, Adtalem has not experienced any deposit losses to date, nor does management expect to incur such losses in the future.

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