Perdoceo Education (NASDAQ:PRDO) reported higher third-quarter revenue and earnings as enrollment grew across its academic institutions and disciplined spending helped lift operating income.
The education company reported net income of $44.4 million, or $0.70 per diluted share, compared with $39.9 million, or $0.60 per share, a year earlier. Revenue increased 1.9% to $215.9 million, while operating income rose 8.1% to $55.1 million.
Adjusted operating income increased 8.4% to $66.1 million, and adjusted earnings per share rose 18.5% to $0.77, Chief Financial Officer Ashish Ghia said. The adjusted operating income measure excludes depreciation, amortization and legal fees related to merger and acquisition activity.
President and CEO Todd Nelson said prospective student interest remained strong and retention continued to trend near multiyear highs. Total student enrollment increased 1.6% at the end of the quarter.
Enrollment Trends Differ Across Institutions
At Colorado Technical University, or CTU, enrollment was relatively flat at 31,870 students, while year-to-date revenue grew 1.7%. Ghia said the university was comparing its results against strong enrollment quarters a year earlier and was graduating a record number of students in 2026.
Ghia expects CTU enrollment to remain relatively flat through year-end before growing in 2027. Third-quarter operating income was $44.9 million, reflecting investments in admissions and marketing as well as higher legal expenses related to previously disclosed matters. Excluding the year-over-year increase in legal fees, CTU operating income would have risen, he said.
AIU System enrollment increased 7.5% to 10,830 students, and operating income rose 24.9% to $11.6 million. Ghia cautioned that academic calendar timing and the number of enrollment days affect quarterly comparisons. He expects AIU to report lower enrollment in the fourth quarter before rebounding in the first quarter of 2027.
At the University of St. Augustine for Health Sciences, enrollment rose 3.2% to approximately 4,560 students, and revenue increased 9.8% to $41.7 million. Adjusted operating income grew to $11.7 million from $7.2 million a year earlier.
Ghia attributed St. Augustine’s enrollment growth primarily to programs including nursing and speech-language pathology, along with new ways of delivering its occupational therapy program. He said the university benefited from enrollment and revenue growth and operating efficiencies as it expanded.
South University Acquisition Details
Perdoceo expects to close its pending acquisition of South University as early as April 2027, subject to customary closing conditions, including regulatory and accreditor approvals. Nelson said South serves approximately 10,500 students across 11 campuses and online.
Ghia said Perdoceo will fund the all-cash transaction from available balances, without third-party financing. The company expects to pay approximately $130 million to $150 million at closing, subject to adjustments, followed by $18 million in deferred consideration over 24 months.
The agreement also provides for up to $56 million in earnout payments over three years, contingent on specified EBITDA thresholds for fiscal years 2027 through 2029. Perdoceo expects the acquisition to add to adjusted operating income beginning in 2027.
Outlook and Capital Returns
For 2026, Perdoceo expects adjusted operating income of $260 million to $263 million, compared with $237.9 million in 2025. For the fourth quarter, it forecasts adjusted operating income of $56.9 million to $59.9 million and adjusted earnings of $0.68 to $0.72 per diluted share.
The outlook assumes continued strong retention and prospective student interest. It also assumes no material enrollment impact from the elimination of the Grad PLUS loan program, graduate borrowing limits or students’ ability to finance their education through private lenders, Ghia said.
Perdoceo ended the quarter with approximately $777 million in cash equivalents, restricted cash and available-for-sale short-term investments. Third-quarter operating cash flow was $79.7 million, up from $41.2 million a year earlier. Ghia said year-to-date cash flow benefited from earlier Title IV cash collections and improved adjusted operating income.
The company repurchased approximately 610,000 shares for $19.9 million during the quarter. Its board also declared a quarterly dividend of $0.17 per share, payable December 11 to shareholders of record on November 27. Approximately $65 million remained under the share repurchase authorization, Ghia said.
About Perdoceo Education (NASDAQ:PRDO)
Perdoceo Education Corporation (NASDAQ: PRDO) is a provider of postsecondary education focused primarily on online learning. Through its institutions, the company offers career-oriented academic programs designed for working adults and other nontraditional students.
Perdoceo’s education brands include American InterContinental University and Colorado Technical University, which offer associate, bachelor’s, master’s and doctoral degree programs in areas such as business, information technology, healthcare, criminal justice and engineering.
