UNIVERSAL TECHNICAL INSTITUTE INC Q4 FY2024 earnings call

Key Points - Fiscal 2024 was a strong year with revenues growing ~21% y-o-y to $733 million, average full-time active students up 10% y-o-y, net income at $42 million, adjusted EBITDA up 60% to $103 million, and total new student starts up ~19% y-o-y. - Core expansion initiatives included increasing program capacity on campuses, adding programs to existing locations, and launching new in-demand programs. - Focus on optimizing workforce and facilities, adjusting marketing and admissions investments. - Positive media recognition for skilled collar jobs, with UTI and Concorde graduates featured. - Concorde division highlights: strong growth across programs, ongoing expansion strategies (Dallas Nursing Program, San Diego Dental Hygiene Program, Jacksonville Nursing Program), and partnership with Heartland Dental. - UTI division highlights: double-digit revenue growth, expanding HVACR programs, unification of MIT operations, addition of EV programs to campuses, and being named Schools of Excellence by ACCSC.

In fiscal 2024, the Concorde division contributed $246.3 million in revenue, a 38.3% year-over-year increase. The UTI division contributed $486.4 million in revenue, a 13.3% year-over-year increase. Consolidated revenue for fiscal 2024 was $732.7 million, up 20.6% year-over-year. Concorde's growth was driven by increased marketing investments and strong performance across programs, while UTI benefited from expanded programs and market demand for skilled collar workers.

Fiscal 2025 Guidance - Revenue expected between $800 million and $815 million, ~10% y-o-y growth at midpoint. - Adjusted EBITDA expected between $120 million and $124 million. - New student starts expected to range from 28,000 to 29,000. - First quarter expected high-single to low-double-digit revenue growth, with mid-single to double-digit growth in remaining quarters (Q2 lowest, Q4 highest). - Net income expected $52 million to $56 million, diluted EPS $0.93 to $1.01. - Adjusted free cash flow expected $58 million to $62 million, assuming ~$55 million in CapEx spend. - Plan to launch at least six new programs each year on Concorde and/or UTI campuses, open at least two new campuses annually starting fiscal 2026.

Risks - Factors discussed in earnings release and SEC filings that may cause actual results to differ from forward-looking statements. - Regulatory changes that could impact the proprietary school industry. - Market dynamics affecting demand for skilled trades and health care education.

Q: Mike Grondahl asked about leads, conversions, and marketing funnel.

A: Jerome Grant said they accelerated marketing investment in Concorde, saw great results, and continue to invest, already seeing positive Q1 results.

Q: Eric Martinuzzi inquired about the 2025 guide upside.

A: Jerome Grant said it's due to more bullish Concorde starts and more new programs than initially planned.

Q: Eric Martinuzzi asked about election impact on fundamentals.

A: Jerome Grant said focus on outcomes, shift in lobbying emphasis from central government to states.

Q: Raj Sharma asked about SG&A expenses and program additions.

A: Jerome Grant said no significant SG&A change, continuing to explore health care program areas at Concorde.

Q: Jasper Bibb asked about EBITDA margin and program launches.

A: Jerome Grant said Concorde likely has stronger margin expansion due to fewer new campus investments, and there are nine full-length programs launching in 2025.

Q: Alexander Paris asked about marketing costs and regulatory.

A: Jerome Grant said continuing to get efficiencies in marketing and admission spend, and UTI has ~15% military/veteran students, with no programs at risk under current regulatory framework.