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Hello, and welcome to the Adtalem Global Education Second Quarter Fiscal Year 2023 Earnings Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Chandrika Nigam, please go ahead.

Thank you. I'd like to remind you that this conference call will contain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995 with respect to the future performance and financial condition of Adtalem Global Education that involve risks and uncertainties. Actual results may differ materially from those projected or implied by these forward-looking statements. Potential risks, uncertainties and other factors that could cause results to differ are described more fully in Item 1A Risk Factors of our most recent annual report on Form 10-K filed with the SEC and our other filings with the SEC. Any forward-looking statement made by us is based only on the information currently available to us and speaks only as of the date on which it was made. We undertake no obligation to publicly update any forward-looking statement, whether written or verbal that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law. During today's call, our commentary will refer to non-GAAP financial measures, which are intended to supplement, do not substitute for our most direct comparable GAAP measures. Our press release, which contains the GAAP financial and other quantitative information to be discussed today as well as reconciliation of GAAP to non-GAAP measures is available on our website. Please note that all financial results and comparisons made during today's call are on a continuing operations basis, exclude special items and are in comparison to the prior year period unless otherwise stated. Telephone and webcast replays of today's call are available for 30 days. To access the replays, please refer to today's press release. We'll begin today's presentation with prepared remarks from Steve Beard, Adtalem's President and Chief Executive Officer; and then hear from Bob Phelan, Senior Vice President and Chief Financial Officer. Following the prepared remarks, we will have a question-and-answer session. And with that, I'll now turn the call over to Steve.

Thank you, Chandrika. Good afternoon, everyone, and thank you for taking time to join our second quarter fiscal year 2023 earnings call. Our teams delivered another solid quarter. For the fiscal second quarter, we delivered revenue of $363 million and adjusted earnings per share of $1.17, with adjusted EBITDA margins of 25.4%, reflecting a 220 basis point improvement over the prior year. These results demonstrate our commitment to serving our students and driving operational discipline across the organization, supporting long-term profitable growth as we continue to position Adtalem as a leading provider of professional talent to the health care industry. In the second quarter, we continued to maximize operational effectiveness across our institutions through a range of initiatives. To enhance the student experience, we continue to deploy new capabilities focused on driving improved persistence. We have introduced new affirmative registration tools to aid our students in the process of curating the courses for the upcoming term, providing selections that can be tailored to their individual interests as well as other criteria. This proactive approach also helps our teams prioritize students that might be at risk for not registering for the next term. As a result of these efforts, we're seeing a trend of improving persistence rates across each of our institutions. On the marketing side of the house, we continue to scale our capabilities in branding, paid media and web experience with a goal of further optimizing our marketing spend. In addition, we're adopting an approach to deploying that spend that is better balanced across the top and bottom of the marketing funnel, allowing us to build brand equity even as we drive improved enrollments. These efforts are occurring in the context of a broad range of transformational initiatives aimed at accelerating performance across the critical value-creating activities to drive sustained profitable growth. Moving on to results by segment. Our performance in the second quarter was largely supported by strength in Chamberlain and Med/Vet, partially offset by enrollment headwinds at Walden. Importantly, the margin expansion we delivered during the quarter was a direct result of our focus on cost discipline, coupled with solid execution on capturing synergies in what remains of the Walden integration. Looking at our segments, total enrollment at Chamberlain continued to show modest improvement during the quarter, supported by the success of campus-based BSN programs along with the growth of BSN Online. Qualified medical staff are now needed more than ever due to the national shortage in nurses as evidenced by the recent strike we saw in several New York City-based hospitals. As the leading U.S. nursing educator, we expect Chamberlain to continue to play a key role in filling these gaps and empowering students to make meaningful contributions to the profession. Within Med/Vet, while the second quarter was not an intake period for the segment, we continue to drive our efforts towards improving student enrollment and persistence rates. Now turning to Walden. Walden remains an important catalyst for Adtalem's transformation. We are making consistent progress in our integration efforts and expect to fully realize the benefit of Walden's unique capabilities, breadth of programs and the attractive synergy opportunities the combination affords. We remain confident in our ability to deliver improved enrollments and expect to see improving trends in the latter part of the year. In the meantime, we continue to invest in strengthening the capabilities of our student-facing teams across the segment. While our primary focus has shifted from integration to growth, synergy capture remains on track, and we expect to deliver the anticipated $30 million of cost synergies in year two of the acquisition. Our confidence in the near-term prospects for Walden remain high. We expect the investment to deliver its intended results. And just as importantly, we expect it to play a critical role in helping us realize our ambition of being a category of one in health care education. Moving on to academic highlights. Our commitment to expanding access to quality education and driving superior outcomes for students remains at the core of what we do. This is underscored by several achievements in the quarter. We're pleased to note that Walden continues to rank first in granting research doctoral degrees in health sciences, psychology, social sciences, business, education, and other non-science and engineering degrees. At Chamberlain, we announced the launch of a home health specialty initiative with funds from a $1.2 million grant from the American Nurses Foundation. As part of this initiative, Chamberlain is developing an online didactic course for using these nursing programs in partnership with the country's leading home care and medical staffing franchise BrightStar Care. This course will provide nursing students broader access to home health and other specialties, which are in critical need of staffing. At Walden, we’re quite excited about the Believe & Achieve Scholarship program, which recently launched as a tool to enhance persistence for students enrolling starting in the February 2023 session. The program rewards persistence through the student journey and underscores our commitment to empowering students and ensuring that they realize their academic and professional goals. With that, I’ll address our guidance for the year. We are reaffirming our fiscal 2023 guidance for revenue to be in the range of $1.38 billion to $1.45 billion and adjusted earnings per share of $3.95 to $4.20. For the balance of the year, we remain optimistic that the demand environment will continue to improve modestly. Most critically, we are confident that our strategic investments in brand and student experience coupled with our disciplined operational focus will support maximized value creation for our shareholders. We are optimistic about the future and the foundation we are building for the students we serve. We’re executing on a number of transformational initiatives that will position Adtalem to be a key player in the evolving healthcare industry. These efforts are core to our recently launched Growth with Purpose program, which we’re excited to tell you more about over the coming months. With hundreds of thousands of medical professionals having exited the space in recent years, along with growing demand for better working conditions, we believe that the programs we provide to address critical shortages in healthcare talent are more important than ever. Our initiatives are centered on supporting enrollment, while enhancing student outcomes and propelling our graduates toward gainful employment. This is what drives Adtalem’s impact on our communities, which is central to our Growth with Purpose. We remain enthusiastic about what lies ahead. Now with that, I’ll turn the call over to Bob for a discussion of our financial results.

Thanks, Steve and hello everyone. Today, I’ll review our financial results and key drivers for our performance in the second quarter. Later in my remarks, I’ll discuss our expectations and assumptions for the fiscal year 2023. I’ll begin with a summary of our financial performance starting with the top line. Revenue in the second quarter decreased 2.1% to $363.3 million compared with the prior year. Consolidated adjusted operating income for the quarter was $79.5 million, and adjusted EBITDA was $92.1 million, an increase of 13.2% and 7% respectively. Adjusted EBITDA margin was 25.4% or 220 basis points higher than the prior year. This continued year-over-year margin expansion was driven primarily by operational efficiencies and a realization of cost synergies. Adjusted net income for the quarter was $54.2 million and adjusted earnings per share was $1.17 or 56% higher than the prior year. Next, I’ll discuss financial highlights by segment. The Chamberlain segment reported second quarter revenue of $141.4 million up 1.6% when compared with the prior year. Adjusted EBITDA was $37.7 million, an increase of 17% from $32.2 million in the prior year. The 360 basis point expansion in adjusted EBITDA margins was primarily the result of value capture initiatives and lower labor costs. Total student enrollment during the quarter decreased modestly by less than 1% compared with the prior year due to headwinds experience and post-licensure nursing, partially offset by continued improvement in enrollment and pre-licensure programs. Additionally, improvement in overall persistence across the segment continues to progress as a direct result of our concentrated efforts on the student experience and persistence initiatives. Turning to Walden. Revenue in the second quarter was $131.9 million, down 6.2% from $140.6 million in the prior year. Adjusted EBITDA was $31.6 million or 11.5% lower year-over-year. Total student enrollment decreased 7.8% year-over-year due to downward pressure in our post-licensure nursing programs, which is partially offset by year-over-year improvement in overall student persistence. In the Med Vet segment, revenue in the second quarter decreased 1.6% compared with the prior year to $90 million, while adjusted EBITDA was $26.3 million or 8% higher than the prior year, primarily driven by continued benefit from cost management and synergy realization. Now turning to cash flow, balance sheet and capital structure. Net cash provided by continuing operations year-to-date was $42.3 million and capital expenditures totalled $9.8 million. As a result, free cash flow year-to-date is $32.5 million an increase of $66.3 million compared with the prior year. As a reminder, we define free cash flow as cash provided by continuing operations, less capital expenditures. During the quarter, we continue to progress on our financial strategy by deploying capital to strengthen the balance sheet. We repurchased $50 million of our Term Loan B resulting in gross debt of $708 million and net leverage of 1.4x as of December 31, 2022, remaining well within our targeted range. We have now reduced our outstanding debt by 57% from the same time last year, a reduction of over $940 million. Looking ahead, we intend to continue to strengthen our balance sheet and deploy capital to maximize returns for our shareholders, while also focusing on reinvesting in organic growth opportunities for our businesses. Moving on to our outlook. As Steve mentioned, we are reaffirming our guidance revenue to be within the range of $1.38 billion to $1.45 billion and adjusted diluted earnings per share of $3.95 to $4.20. We also remain on track to deliver $30 million of cost synergies during fiscal year 2023. With respect to our guidance, I’d like to remind you that our guidance is for the full year only and we did not provide specific quarterly guidance. Our results of operations can vary from quarter-to-quarter based on the timing of certain expenses, which are more variable in nature. In Q3, we anticipate a higher level of expenses than in the current quarter as certain costs originally forecasted for Q2 will be recognized in subsequent quarters this year. As such, while we are affirming our guidance range for the full year, we anticipate our mix of earnings by quarter will change due to the shift of certain expenses out of Q2 and into the second half of the year. In closing, I’m pleased with the results we delivered this quarter. Look forward to driving further progress on our goal of leveraging both operational discipline and financial strength to position Adtalem for long-term growth. With that, I’ll now turn the call over to the operator for Q&A.

Thank you. [Operator Instructions] Our first question today is coming from Jeff Meuler from Baird. Your line is now live.

Yes. Thank you. What expenses got pushed back to Q3? And I guess what I’m wondering is was marketing expense pushed back and should we read anything into that in terms of the demand environment taking longer to improve or not?

So to answer the question, marketing was a big piece of that. And no, you shouldn’t read into that. What I would say is it was more around the branding campaign that we’re launching and that is happening more January, February timeframe, originally anticipated to be slightly earlier in the second quarter.

Yes. Jeff, what I would add to that is, as you heard us say, we’re rebalancing our investments across the top and the bottom of the funnel making incrementally more investment in brand. There’s just – with production and some of the other things we’re working on, there have been timing shifts that moved that into the second half of the year.

Got it. And then maybe this is just me miss modeling because you don’t give this level of guidance. But Chamberlain and Walden revenue was better than at least I was expecting. Is that the persistence gains are increasing relative to the rate that you were seeing last quarter or a couple of quarters ago? Or are you starting to see any sort of improvement in new enrollment trends?

So total enrollment improved sequentially at Chamberlain and also at Walden. Persistence is a big piece of that. And as you know, we’ve been focused quite a bit on driving improved persistence because a lot of that is within our control. There is some new enrollment elements of that particularly at Chamberlain when you think about our pre-licensure programs, both campus based BSN and BSN online. But to be fair, persistence – gains in persistence have been really attractive for us and we’re quite excited about that.

That’s great. And then just last med vet, the year-over-year revenue trend I think was worse this quarter. It wasn’t an intake period. Was there any shifting in the timing of the academic calendar relative to last year? Or just any comment on med vet revenue?

No. The intake cycle is the same as it’s been in prior years. So we are obviously focused on our upcoming enrollment cycle at med vet. But enrollment sequentially at med vet obviously year-over-year has been a good story for us. And we’re working hard to ensure that continues.

Yes. I guess I’m asking less about intake. I don’t know if there’s like a different number of academic days that fell into the fiscal quarter this year versus last year that you’re recognizing revenue on. I thought the year-over-year revenue trend was several points worse this quarter than it was last quarter, and it wasn’t clear to me why that would be the case.

Right. Okay. Now what you’re asking is the enrollments were up at the 3.4% I believe that we’ve reported, but the revenue was slightly down and that’s really due to just we had a little bit higher scholarship cost this quarter.

Got it. Okay. Thank you.

Thank you. Next question today is coming from Jeff Silber from BMO Capital Markets. Your line is now live.

Thanks so much. Wanted to go back to Chamberlain. In your comments you talked about pre-licensure enrollment going up, post-licensure enrollment still going down. Can we talk about the rate of change between this last quarter and the second quarter that you just reported. Are pre-licensure enrollments increasing at a faster, slower rate and our post-licensure enrollment decreasing at a faster or slower rate? Any color would be great.

Sure. So as we've suggested before, we're anticipating a sequence of recovery in enrollments across our program mix. As we've said, we believe post-licensure nursing is going to be the last of those elements to recover from an enrollment perspective because of some of the unique attributes of that prospective student population. We have said that we expected recovery at the Med/Vet segment first to be followed by pre-licensure nursing among our large categories with post-licensure nursing lagging behind. So I think what you're seeing is that sequence play out in real-time. So it's not so much that post-licensure nursing is worsening, it's just that sequentially, we're seeing pre-licensure nursing enrollments come back before post-licensure consistent with our expectations.

Okay. That's helpful. And then in terms of new enrollments, were new enrollments up in the quarter for Chamberlain?

Well, as you know, Jeff, we don't report new enrollments. But obviously, the total enrollment number is a mix of new enrollment and persistent.

All right. Let me shift over to Walden then. You talked about the weakness in post-licensure nursing. Again, the same kind of question, is it getting less worse or still kind of stable where it was beforehand?

So if you look at what we've reported from a total enrollment perspective at Walden, what you see is a – I don't love this term but a deworsening of the trend there. And as you know, Walden is all post-licensure nursing. So we're encouraged that on a year-over-year basis, that trend is improving. And again, I think that's consistent with the narrative that we've taken to market about the timing of recovery across our large categories of product.

All right. And then just sticking with Walden, I'm sorry, just one more. I know you don't give specific segment guidance, I understand that. But just from a theoretical perspective, with all the synergies that you're going to be gaining or you have been gaining, should Walden margins expand on a year-over-year basis without actually seeing total enrollment growth? Or do we have to wait for total enrollment growth for that to happen?

I think importantly, the synergies are not just with the Walden segment. So when we're talking about that, we're really talking about it across the entire organization. So we're seeing benefits from cost reductions and the synergies throughout Chamberlain, Met/Vet as well as Walden, all three.

Yes. The important thing to remember, Jeff, is that we used the Walden transaction as a catalyst along with the divestiture of the Financial Services segment to really integrate the remaining postsecondary institutions because they're lifetime businesses. And what you're seeing, obviously, is the elimination of redundancies between Walden and Chamberlain and other institutions, but also the benefit that comes from running all of these like-kind businesses on similar platforms. So part of it, obviously, is cost that comes out of Walden, but there are also costs we can take out of the legacy Adtalem institutions as we run a similar play because we've got similar business models in the portfolio.

All right, great, thank you so much.

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thank you, everyone. Really appreciate the time and attention this evening. Again, a solid quarter for us. We're excited about the trends that we're seeing in the business. We're excited about our ability to expand margins and take advantage of some really attractive operating leverage, and we look forward to checking in with you a quarter from now. Thank you so much.