Adtalem Global Education stock surges 17% on Q3 earnings beat, raised guidance, and enrollment growth

Why Did Adtalem Global Education Stock Jump Over 17%?

Adtalem Global Education Inc. (NYSE: ATGE) surged 17.58 percent on May 9, 2025, closing at $136.25, after the company posted stellar third-quarter fiscal 2025 results and lifted its full-year guidance. The rally was underpinned by strong double-digit revenue growth, sustained momentum in student enrollments, and increased shareholder returns. With investor sentiment buoyed by Adtalem’s continued dominance in U.S. healthcare education, institutional buyers responded positively to the results and revised expectations for future earnings growth.

The company reported revenue of $466.1 million for the quarter ended March 31, 2025, representing a 12.9 percent year-over-year increase. Adjusted earnings per share rose 28 percent year-over-year to $1.92, beating market forecasts and reinforcing the company’s operational execution under its “Growth with Purpose” strategy. Net income reached $60.8 million, up from $36.8 million in the prior-year quarter.

What Is Driving Enrollment Growth at Adtalem’s Universities?

Adtalem’s performance was driven primarily by robust enrollment growth across its flagship institutions—Chamberlain University and Walden University. Total student enrollment across the group rose 9.8 percent year-over-year to 94,223. Chamberlain University, the largest nursing school in the United States, reported a 6.8 percent enrollment increase, reaching a record 40,564 students. Walden University saw a 13.5 percent rise, bringing total enrollment to 48,526 students.

The rise was fueled by strong demand for flexible, career-focused healthcare education. Chamberlain’s programs in pre-licensure and post-licensure nursing saw high intake, while Walden’s growth came from both healthcare and non-healthcare disciplines. This reflects a structural shift in U.S. healthcare education demand, with more students choosing virtual and hybrid models focused on high-employment sectors like nursing, behavioral health, and primary care.

How Did Each Segment Perform in Q3 FY25?

Segment-wise, the company reported growth across all three primary education divisions, although margins varied:

Chamberlain University saw revenue rise to $192.6 million, a 13.1 percent year-on-year increase, while adjusted operating income rose 9.6 percent to $47.5 million. Adjusted EBITDA climbed 12.6 percent to $56.8 million. The EBITDA margin remained strong at 29.5 percent, highlighting the operational leverage from enrollment scale.

Walden University posted the most substantial margin expansion, with revenue up 18.5 percent to $178.4 million. Adjusted operating income jumped 50.6 percent to $48 million, and adjusted EBITDA rose to $54 million, a 50.6 percent improvement. The adjusted EBITDA margin increased to 30.3 percent, supported by higher productivity and reduced litigation costs.

The Medical and Veterinary segment, including Ross University and AUC, posted more modest gains. Revenue grew 3.6 percent to $95 million, with enrollment inching up 1.2 percent. However, adjusted operating income fell 21.9 percent to $17.9 million due to lower operating leverage and declining margins, with adjusted EBITDA slipping to $22.9 million.

What Is the Significance of Residency and Placement Outcomes?

Adtalem’s medical and veterinary institutions continue to play a critical role in addressing national healthcare shortages. AUC and RUSM jointly achieved a 95 percent first-time residency attainment rate for the fourth consecutive year, placing over 615 students in more than 325 unique healthcare facilities. Notably, over 40 percent of these placements were in federally designated Medically Underserved Areas or Populations. Additionally, 55 percent of graduates placed into primary care residencies in Health Professional Shortage Areas.

In veterinary education, Ross University School of Veterinary Medicine was ranked first in total graduate placements into competitive U.S. internships and residencies via the national match program. These outcomes reinforce Adtalem’s value proposition as a critical workforce supplier in areas facing acute professional shortages.

How Is Adtalem Allocating Capital to Maximize Shareholder Returns?

On May 5, 2025, Adtalem announced the completion of its $300 million share repurchase program authorized in January 2024. Following this, the board approved a new $150 million repurchase authorization extending through May 2028. As of March 31, 2025, net leverage stood at just 0.8x, reflecting healthy balance sheet strength and ample flexibility for further capital return.

Free cash flow for the twelve months ending Q3 FY25 totaled $287.2 million, marking a substantial improvement from prior periods. This financial discipline, coupled with margin expansion and enrollment momentum, has enabled consistent value creation.

What Is Adtalem’s Updated Full-Year FY25 Outlook?

In response to its Q3 performance, Adtalem raised its fiscal 2025 guidance. Revenue is now projected in the range of $1.76 billion to $1.775 billion, representing 11 to 12 percent year-over-year growth. Adjusted earnings per share are forecast between $6.40 and $6.60, up from prior estimates and implying a 28 to 32 percent increase over FY24.

The guidance upgrade signals sustained confidence in the enrollment trajectory, margin resilience, and cost control. It also aligns with the company’s broader strategic mission to expand access to high-quality education in critical workforce fields such as nursing and medicine.

How Are Institutional Investors Reacting to Adtalem’s Strategy?

Institutional sentiment around Adtalem Global Education has been increasingly positive, particularly given its consistent outperformance in the education sector. The company’s stock price surge post-earnings suggests a re-rating by institutional holders, many of whom have cited enrollment visibility, strong cash flows, and responsible capital deployment as attractive attributes. Analysts have noted the earnings beat and raised guidance as key catalysts for the share price rally.

Adtalem’s ability to consistently grow top-line revenue, improve operating margins, and deliver shareholder returns despite a competitive education environment has positioned it as a differentiated player within the publicly traded education services sector. The predictable enrollment base and significant exposure to healthcare-related disciplines further enhance its defensive characteristics.

What Are the Key Risks and Future Outlook for Adtalem?

While Adtalem’s performance has been robust, management remains cautious about macroeconomic headwinds, regulatory risks in higher education, and competition from both for-profit and not-for-profit institutions. However, the increasing demand for healthcare professionals in the U.S., including the projected physician shortage of 187,000 by 2037, positions the company for sustained relevance.

Looking ahead, Adtalem is likely to continue expanding its digital offerings, increase investments in clinical partnerships, and leverage its institutional relationships to deepen its healthcare education pipeline. The company’s “Growth with Purpose” strategy remains focused on innovation, access, and outcomes—all of which are resonating strongly with both students and investors.