Laureate Education, Inc. Class A Stock

Good day, and thank you for standing by. Welcome to Laureate Education's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead.

Good morning, and thank you for joining us on today's call to discuss Laureate Education's Second Quarter 2026 results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast and a complete recording will be available after the call.

I would like to remind you that some of the information we are providing today, including, but not limited to, our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, our 10-Q filed earlier this morning as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements.

Additionally, non-GAAP measures that we discuss, including and among others, adjusted EBITDA and its related margin, adjusted net income and adjusted earnings per share, total debt net of cash and cash equivalents and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation.

Let me now turn the call over to Eilif.

Thank you, Adam, and good morning, everyone. I am pleased to report strong execution across the board for the second quarter and first half of 2026. Through year-to-date June, new and total enrollments were up 10% and 6%, respectively, versus the comparable period in prior year, driving 7% growth in revenue on a timing adjusted and constant currency basis. In addition to favorable operating results, we have also benefited from improved currency over the past few months. As a result, we are raising our full year 2026 outlook at the midpoint by $28 million for revenue, $8 million for adjusted EBITDA and $0.03 per share for adjusted earnings per share.

The operating momentum of our business as well as a strong balance sheet and free cash flow generation continue to support our commitment to return excess capital to shareholders. Through the first half of the year, we repurchased $181 million worth of our shares. And today, we are announcing an additional $150 million increase to our stock repurchase program.

Throughout the first half of the year, we continue to advance on key priorities, which include the opening of new campuses and investment in digital leadership. The 2 new campuses we opened last year in Monterrey, Mexico and Lima Peru, Ate District continue to perform in line with our expectations. Our new campus opening for this year in Puebla, Mexico is off to a strong start with enrollments already well underway for our primary intake in September.

Looking beyond these projects, we have a clear multiyear road map of attractive new campus expansion opportunities across both Mexico and Peru and have already secured multiple sites to support that growth pipeline in the years to come. We do expect 2 new campus projects to be operational next year, one in Southern Lima, which is on track to open during the first quarter of 2027 and one in Merida, Mexico, which we anticipate being open in time for our primary intake in September of 2027. Further momentum for new campus openings are planned for 2028 and beyond.

On the digital front, AI is becoming a core capability across our organization and an increasingly important driver of our long-term strategy. We are modernizing not only how and what we teach but also how we operate, translating technology-enabled efficiencies into greater affordability, broader access to high-quality education and further progress towards Laureate's mission. By enabling AI throughout the student journey, we aim to deliver more personalized learning experiences, strengthen student support and improve academic outcomes. At the same time, we are equipping our faculty and staff with AI-enabled tools that allow them to focus on activities that create the greatest value for our students.

To support this transformation, we are investing in our data and IT infrastructure and collaborating with leading technology companies. By leveraging their expertise and capabilities, we are orchestrating and building an integrated ecosystem of AI-powered learning, cloud and education solutions for our more than 500,000 students, faculty and staff across Mexico and Peru.

From a geopolitical and macroeconomic perspective, the backdrop in Mexico and Peru remains stable, and we are confident in the long-term fundamentals of both markets. In Mexico, the existing USMCA trade agreement remains in place through 2036 and continues to provide Mexico with reliable and preferential access to the U.S. and Canadian markets, supporting investments in economic cross-border opportunities across North America. Although the USMCA agreement wasn't extended during the first mandatory joint review in July of this year, the absence of consensus simply activates the annual review mechanism beginning in 2027.

Mexico continues to play a central role in the regional economy as the United States' largest trading partner. And the record export level from Mexico into the United States during May shows that trade and supply chain integration between the 2 countries remain very strong. Future bilateral discussion will focus on improving market access, strengthening regional production and addressing select tariffs.

In Peru, the political outlook has become more stable following the recent national elections. President Keiko Fujimori is expected to pursue a more market-oriented agenda, which could strengthen business confidence, encourage private investment and support further economic growth, reinforcing Peru's long-standing position as one of Latin America's more established and resilient market economies.

That concludes my prepared remarks, and I will now turn the call over to Rick Buskirk for a more detailed financial overview of our second quarter and year-to-date performance as well as further details on our 2026 full year outlook. Rick?

Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. Campus-based higher education is a seasonal business. While the second and fourth quarters are not major enrollment intake periods, they are the strongest in terms of revenue and adjusted EBITDA as students are in session and academic activity is at its peak.

The timing of the start of our classes can shift year-over-year depending on various factors such as when public universities begin classes or when holidays occur. This, in turn, affects the timing of enrollments and revenue recognition and quarter-over-quarter comparability.

In terms of seasonality for 2026, we will have some intra-year calendar timing impacts as outlined on Slide 22 in our presentation. As I review our operating results, I will provide some additional color on these timing-related impacts.

Let's start with Page 10 and 11, which highlight our operating and financial performance for the second quarter and year-to-date June. Total enrollments increased by 6% when compared to the prior year quarter, driven by year-to-date new enrollment growth of 10%. Revenue in the seasonally strong second quarter was $616 million and adjusted EBITDA was $251 million. Both metrics were ahead of the guidance provided 3 months ago, driven by favorable currency translation and operational outperformance. On a constant currency basis, both revenue and adjusted EBITDA for the second quarter increased by 8% year-over-year.

Second quarter net income was $137 million, resulting in earnings per share of $0.98 per share on a reported basis. Second quarter adjusted net income was $140 million and adjusted earnings per share was $1 per share. When combined with the first quarter on a constant currency basis and adjusted for academic calendar timing, our overall performance for the first half of 2026 was strong and resulted in revenue and adjusted EBITDA growth of 7% versus the prior year period.

Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 13. Please note that all comparisons versus prior year are on a constant currency basis. Let's start with Mexico. Mexico's new enrollments increased by 7% on a year-to-date basis versus the prior year period, led by strong growth in working adult-focused fully online programs. Total enrollments increased 5%. Mexico's revenue for the second quarter increased by 10% compared to the prior year period, and adjusted EBITDA was up 9%, which included costs associated with launching our new campus in Puebla. On a year-to-date basis and adjusted for timing of the academic calendar, Mexico's revenue grew 6%, resulting from a 5% increase in average total enrollments and 1% price mix.

Overall pricing was in line to slightly above inflation for our traditional face-to-face students, partially offset from a mix perspective by higher growth in working adult fully online programs. We were a little less aggressive with our pricing for our fully online programs, but still had an increase year-over-year as we continue to focus on driving strong volume growth in those programs.

On a year-to-date basis and adjusted for timing of the academic calendar, adjusted EBITDA decreased by 2% versus the prior year period, reflecting the timing of investments and the ramp-up of our new Puebla campus. As discussed on our prior call, we expect margin accretion this year to be weighted towards the second half of 2026 in that market.

Let's now transition to Peru on Slide 14. Peru's primary enrollment cycle concluded in mid-April with total enrollment growth of 8% year-to-date, supported by strong demand from our fully online programs serving working adults. In the second quarter, Peru's revenue increased 6% and adjusted EBITDA was up 7% versus prior year. On a year-to-date basis and adjusted for timing of the academic calendar, Peru's revenue increased 7% versus the prior year period and adjusted EBITDA increased by 13%. You will note that through year-to-date June, our growth in total enrollments and revenue are at similar rates due to the rapid scaling of fully online offerings. As discussed on our prior calls, our series of planned new campus launches for face-to-face students will start to ramp in 2027.

Pricing during the primary intake was largely in line with inflation for our traditional face-to-face programs, but that was offset by the price/mix impact from fully online.

Let me now briefly discuss our balance sheet position. Our balance sheet remains strong. Laureate ended June with $223 million in gross debt and $162 million in cash for a net debt position of $61 million. Through June of this year, we repurchased $181 million of common stock under our previously announced share repurchase program. Today, we announced that our Board has authorized a $150 million increase to our share repurchase program. This authorization is supported by our strong balance sheet, cash accretive business model and disciplined capital allocation.

Moving on to our outlook for 2026, starting on Page 17. Today, we are increasing our full year guidance at the midpoint by $28 million for revenue, $8 million for adjusted EBITDA and $0.03 per share for adjusted earnings per share. Our updated 2026 outlook reflects an improved operational outlook as well as more favorable foreign currency exchange rates.

Based on our assumed FX rates, we now expect our full year 2026 results to be as follows: total enrollments to be in the range of 518,000 to 523,000 students, reflecting growth of 4% to 5% versus 2025. Revenues to be in the range of $1.920 billion to $1.930 billion, reflecting growth of 13% on an as-reported basis and growth of 6% to 7% on a constant currency basis versus 2025. Adjusted EBITDA to be in the range of $593 million to $599 million, reflecting growth of 14% to 15% on an as-reported basis and 8% to 9% on a constant currency basis versus 2025. This would result in an increase in adjusted EBITDA margins of approximately 50 basis points at the midpoint of guidance on a reported basis. The margin expansion expected for the second half of the year will be driven by timing of investments and the opening and scaling of new campuses.

For 2026, we still expect adjusted EBITDA to unlevered free cash flow conversion of approximately 50% on a reported basis, supporting our continued emphasis on return of capital to shareholders. Lastly, adjusted earnings per share guidance for 2026 is now expected to be in the range of $2.04 to $2.10 per share, reflecting growth of 19% to 22% versus 2025 on a reported basis. This outlook assumes a weighted average share count of approximately 139 million shares, only reflecting the impact of share repurchases through June.

Now moving to the third quarter guidance, which includes an expected $29 million of favorable intra-year academic calendar timing impact as illustrated on Page 22 of our presentation. For the third quarter of 2026, we expect revenue to be in the range of $471 million to $476 million and adjusted EBITDA of approximately $134 million to $137 million.

Eilif, I'm now handing it back to you for your closing comments.

Thank you, Rick. As we enter the second half of 2026 and prepare for our next major intake cycle, I remain confident in the momentum that we have built and our ability to continue to execute on our growth agenda. We are investing where we see the greatest opportunities to create long-term value, including expanding our academic portfolio, building strategic AI partnerships, scaling our digital offerings and selectively growing our campus network in attractive high-growth markets. At the same time, our disciplined operating model continues to drive margin expansion, strong cash flow generation and the financial flexibility to invest in future growth while returning excess capital to shareholders.

Operator, that concludes our prepared remarks, and we're now happy to take any questions from the participants.

[Operator Instructions] Our first question comes from the line of Jeff Sibler of BMO Markets.

My first question is regarding Mexico. You've got a primary intake period coming up in a few months, probably enrolling students already. Can you give us any color in terms of how that's going?

Jeff, this is Eilif. I'll just do a quick reminder. We did our March intake, which is a secondary intake in Mexico, which was consistent with last year's trend at about 4%. Then we had a -- that was about 25% of the intake for the year. We did expect some improvement, and we saw that in the June intake. That's largely a working adult intake, represents about 15% of the annual intake, and we were growing 12% in that intake, which was consistent with our expectations of an improving operating environment in Mexico. When it comes to the main intake in Mexico, which I think your question was about, that's about 60% of the annual intake. That's happening in September. We are about halfway through that. We have about 50% completion of that intake. And it is tracking along with my expectations, and that's as much as I'm going to comment on that intake.

Okay. I appreciate that. And then maybe a big picture question. A number of the U.S. schools have been talking about changes in the way that students are looking for schools, switching away from traditional search engines going towards AI. I'm wondering if you're seeing that in Mexico and Peru? And if so, if there's any change in your marketing strategy there?

Yes. We have -- I would say that we were at the cutting edge of driving that change in the market. We have partnered with Google over the years and several other key strategic digital and AI partners. And we've been recognized now for 2 years in a row by BCG and Google as being in the top decile when it comes to AI and digital marketing capabilities in the way that we are embracing AI in our recruiting and onboarding effort. And it has given us a very strong competitive advantage, where we have seen an explosive growth in our lead generation capability and significant improvement in conversion, which has taken down our cost of acquisition and also enabled us to consistently take market share in Mexico. So very, very pleased with those capabilities. And in Peru, we are deploying that same center of expertise that was developed in Mexico to roll out those capabilities there as well.

Our next question comes from Marcelo Santos of JPMorgan.

I have 2. The first is a bit more long-term strategic. You have a lot of plans to open campuses. You're deploying distance learning. So how do you see the sustainability of growth in the coming years given these initiatives? Could you give us some broad views on how do you expect to grow? I'm not asking for a specific guidance, but I'm just asking for a broad outlook. And the second question is, I think you had higher -- better retention rates in Mexico in the second quarter. What were the actions that led to this improvement in retention rates?

Great, Marcelo. I'll start kicking off on the growth algorithm. And we have a really deep and robust pipeline of growth opportunities in our core markets in Mexico and Peru. And really, there are 3 drivers of our growth in both markets. One is the rising participation rates. The rising participation rates, there's a lot of headroom there in Mexico. The participation rates are about 36% versus Peru high 40s and the United States mid-60s. So it shows you the significant opportunity for that participation rate to increase, which over the last 10 years has consistently given us very predictable and consistent growth, and I expect that to continue.

The second big growth driver is the fully online working adult product, where we are marketing fully online to students aged 25 to 50. And those are largely degree completion, but also increasingly becoming postgraduate degrees. And we're really following the U.S. model there of high-quality personalized fully online experience, but targeting only that working adult consumer where online is a very good product. And in Mexico, we have about 90,000 fully online working adult students and growing in high single digits. In Peru, we have about 20,000 -- 25,000 students, and it is growing at a much higher rate, but from a smaller base and are an important long-term growth driver for both countries.

And I can see you taking it -- if you're looking at 5-plus years, I can see the penetration of the fully online in Peru to kind of catch up with Mexico. So very excited about the depth of that growth lever. And then third, new campuses. In Lima, we are largely -- sorry, in Peru, we are largely a Lima operator. So there are some interesting secondary cities and also still several ZIP codes in Lima, where we don't have our full portfolio of products.

So there is more growth with campuses in Lima and in large secondary cities like [indiscernible] in Mexico, which is a much larger country. Mexico, you have 135 million people. In Peru, you have 35 million people. You have 20 cities in Mexico with multimillion population centers, over 1 million population centers, which is ideal for our product portfolio. And so we have a very, very robust pipeline of campus expansion opportunities.

Last year, we opened UNITEC in Monterrey. This year, we opened UNITEC in Puebla. And we have announced Merida is going to be our new campus expansion opportunity for UNITEC. And we are seeing double-digit campus expansion opportunities in Mexico alone in order to get the coverage that makes sense given our very strong brand portfolio in Mexico. So those are the 3 -- in our core business, it is participation rate, it is online penetration and it is new campuses in new ZIP code and new cities. And so I would say those are the core growth drivers to support our guidance.

And let me just -- before covering your retention question, Rick, why don't you add anything on the growth algorithm that...

No, I think that was well said [indiscernible] on the growth algorithm.

Very good, do you want to take the retention question on?

Sure. Great. On the retention, you're exactly right. We are seeing some improved retention rates in Mexico. We're very pleased with that. We spent several years focused in dissecting the entire enrollment to graduation process that our students go through, particularly on our growing online segment and have started deconstructing that digital journey that they follow and really putting in different elements to reduce friction and support their learning, including experimenting with an AI tutor.

And as a result of that, we are seeing improved attrition, and we expect attrition despite online growing faster to face-to-face, which generally has a higher attrition rate. As a total consolidated in Mexico, we expect attrition improvement on a full year basis. So we're very pleased with the results, and it's been an effort that we've been very focused on, and we're seeing good results, particularly in our fully online product.

Our next question comes from Alex Paris of Barrington Research.

I'm glad to be on the call today after having recently initiated at -- still learning, and I appreciate your responses to the prior questions, some of which I was going to ask myself. But I thought -- and by the way, I don't know if it's just my line or in general, but it sounds like your line is cutting out from time to time, and I'm having a little trouble following it. But again, just back to the 3 core growth drivers, obviously.

Can you repeat the question? I'm sorry about that. We're just having a technical difficulty. If you could just repeat it real quick, please?

Okay. Yes, we were having -- I'm having a technical difficulty hearing you guys as well. I don't know where the problem is. But my question was just more to follow on to the 3 core growth drivers, participation, fully online and new campuses. I think you covered it well, but I thought since online is an important growth driver, maybe we can dig down into that a little bit more with additional color. How is it priced relative to campus-based programs? I realize it's priced at a discount. And what is its contribution to adjusted operating income, for example, or operating income?

Great. This is Eilif again. I apologize for the technical difficulties that we seem to be having. So I've switched over to a cell phone line now. Can you hear me okay?

Yes, I can.

Perfect. So in terms of online, it's a very attractive business model. The price point of an online offering versus the face-to-face counterpart is about 40% below face-to-face. And that gives us a contribution margin in the mid-50s, which is similar to a campus performance. So similar margin contribution, 40% lower price. And of course, an ROIC that is very, very superior because there is no CapEx in online, and it's benefiting from the strong brand portfolio that we have in both Mexico and Peru. So hopefully, that answered your question.

It definitely did. And then going back to a previous question, how do you market in Mexico and Peru? Is it like in the U.S., largely focused on digital marketing and Google search and et cetera?

Well, it depends. You should think about our business in 2 different lines. We have young students who we are recruiting from high schools and they live at home. So we know exactly where they are. So the cost of acquisition for our traditional undergraduates are very, very low. We develop relationships with the high schools and the students through their middle school and high school experience. We do gamification. We do English training. We do career advising. We provide them with apps to help them in the learning experience. And then we maintain those relationships until their senior year in high school, and then we recruit them based on the campus that makes most sense vis-a-vis the ZIP code where they live. And we have about 400,000 young students in Mexico and Peru that is recruited in that manner.

Then we have 100,000 working adult fully online students. And the marketing to entice that clientele is very different. You're testing that very broadly. It's largely a lead generation. It is -- a lot of it is organically generated through proprietary information sites, outreach to cover the Jeff's question earlier, we are increasingly using AI tools to reach and understand and deliver an offering that is personalized and makes sense for that particular lead or that particular individual. But we're also using search and all of the traditional tools that you are familiar with here in the United States.

Our next question comes from Mauricio Cepeda of Morgan Stanley.

We have 2 questions here. The first one about the Mexico margin expansion throughout time. So we saw that Mexico improved a lot of the margin in the past from this campus consolidation actions, the fixed cost dilution, some operating efficiencies. But as those benefits mature and it seems that they mature a little bit already, what would be the main sources for this next wave of margin expansion? And over which time frame should they become visible? And the second question is -- sorry, sorry, go on.

No, go ahead. I was jumping in, but let's get both questions out and then we'll take them one at a time.

Okay. Okay. So it's pretty straightforward about the online penetration, right? So we see that online penetration is increasing. And of course, because of the average price, it somehow dilutes the tuition. But at which level do you think they will begin offsetting the enrollment and margin benefits? And what early indicators are you monitoring for the cannibalization for higher acquisition costs or competitive price pressure?

Very good. In terms of the margin expansion for Mexico, I will hand that over to Rick, and then I will pick it up again on the online penetration.

Yes, as you said, we have had tremendous success in expanding margins in Mexico from around 20% to 26% historically. We have a great operating model on a go-forward basis now set with a very centralized cost structure. So we see notable opportunities to continue on a healthy operating leverage and flow-through margin of incremental revenue as well as we do still have some targeted efficiencies that we're working on to streamline operations across the different lines. So we do expect to continue to expand margins when you adjust for rent because we lease our properties in Mexico, and we own them in Peru. It's about a 6% plus delta.

So as we've said historically, we are working on closing that gap and management believes we can close a substantial part of that gap in the next 3 to 5 years. And so what we've said on a consolidated basis is it is the target of Laureate to continue to see margin expansion, and we expect to see margin expansion in the range of 30% plus per year. So that's where we're at.

30 basis points.

Yes, 30 basis points.

So that's -- so margin expansion for Mexico coming to flow through and additional productivity opportunities and will be the source of -- the biggest source of the 30 basis points or more margin expansion for the consolidated business. On your second point on online penetration, this is the way I would think about it, Mauricio. In the United States, 25% of all students are working adult fully online students. So it is a segment that makes a tremendous amount of sense for that working adult students, and it is at scale.

In Mexico, it is at 14%, and in Peru, it's less than 5%. And so you would expect online penetration in Mexico and Peru at least to get to the U.S. It really should become significantly larger than in the U.S. because the mix of 25- to 50-year olds in Mexico and Peru that doesn't have a degree is much bigger than the mix of 25- to 50-year olds in the U.S. that doesn't have an undergraduate degree. So the fishing tongs are much bigger in Mexico and Peru on a relative basis for that working adult student than it is in the United States.

So will it go to 25%, Will it go to 35? Will it go to 45? I don't know. But we're just at the beginning of a very exciting journey to deliver high-quality education in a flexible manner to that working adult professional that is looking to get into management or get in from -- move from a local company to an international company and create a significant increased earnings potential. I'll pause there and see if that answered your question.

Yes. The point is that I believe it's kind of a given, right? I think the distance learning is really penetrating everywhere. But the point is that, well, the market growth seems positive, but are you going to monitor for cannibalization because maybe younger students will go for it, too. And at the end of the day, there will be a ticket dilution even if you keep the margin, so it can decrease your bottom line growth, right? So are you monitoring for it, which is the, let's say, the saturation point? Are you -- is there any kind of monitoring in general that you're.

Yes. We are monitoring this very, very carefully. And as I said, I really believe online is a terrific tool for the working adult students. I don't think it makes a lot of sense for the average 17-, 18-year-old to sit in his or her bedroom to get an online undergraduate degree. Very few 17-, 18-year-olds are going to be successful doing that. So we are monitoring all of our students that are in the online program. And the vast majority, 95-plus percent of our students that are in a location where we have a campus and are below 25 years old or below -- in the early 20s will be in a campus setting. So very few 18-, 19-, 20-, 21-, 22-year-old students in our network will be in an online operation. There will be some very unique circumstances where -- for that to be facilitated.

So we are marketing face-to-face or hybrid to young students and the price point on face-to-face versus hybrid is essentially the same because it is the students themselves that decide how much hybridity to do depending on their flexibility if they're working part time alongside the studies. But the fully online, that is where we are marketing to working adults, 25- to 50-year-olds, and that is where we are offering a significantly lower price point because the cost of delivery is lighter and the self-discipline and the ability to work independent is very different. So we are not following -- maybe where you're coming from is -- some of the more challenging experiences in Brazil. We're not following that model at all, we are following the model that we have seen in the United States that has worked really, really well for us in Mexico that we are deploying now in Peru and very similar to what you would be seeing in Europe and also in other Latin American countries.

I think Brazil is the outlier because Brazil has had some very unique challenges with overcapacity following the unwinding of FIAs and unfortunately, went down the path with the train the consumer that if you can't afford a face-to-face, you should still go for DL. And it has been a challenge and regulatory steps are now being taken to try to clean that up. But that -- those dynamics doesn't exist in our markets. And certainly, we are not promoting to go down that path. To the contrary, we are very disciplined. We have a great product for young students that involves the campus experience. And then we have a very high-quality online product with a lot of flexibility and a lot of built-in digital and AI tools that is designed to support that working adult professional that is balancing studies, a job and a family.

[Operator Instructions] I am showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Q1 2026 Laureate Education, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead.

Good morning, and thank you for joining us on today's call to discuss Laureate Education's First Quarter 2026 Results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer. Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast, and a complete recording will be available after the call.

I'd like to remind you that some of the information we are providing today, including, but not limited to, our financial and operational guidance constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected.

Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, our 10-Q filed earlier this morning as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-GAAP measures that we discuss, including and among others, adjusted EBITDA and its related margin, adjusted net income, adjusted earnings per share, total debt net of cash and cash equivalents and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation.

Let me now turn the call over to Eilif.

Thank you, Adam, and good morning, everyone. 2026 is off to a good start, and we are encouraged by the results from our recently completed enrollment intake cycles, which included Peru's primary intake and a smaller secondary intake for Mexico. Enrollment results came in line with our expectations for both markets with year-over-year new enrollment growth of 13% in Peru and 4% in Mexico through completion of the intake cycles by the middle of April.

With the intakes now finalized, we have good visibility into the remainder of the year, and we are reaffirming our full year guidance for enrollments, revenue and adjusted EBITDA. We are increasing our guidance for adjusted earnings per share to reflect the $105 million in share buybacks completed during the first quarter, and we anticipate further share buybacks through the remainder of 2026 as return of excess capital remains a priority for the company.

The enrollment intake results for the first cycle were in line with the macroeconomic trends we discussed during our last call for both Mexico and Peru. In addition, Peru is benefiting from continued strong penetration for our online offerings for working adult students. As a reminder, our business model is loosely correlated with economic cycles. In periods of robust GDP growth, such as the current environment in Peru, we have historically benefited from strong enrollment momentum. During a softer macroeconomic backdrop, as we are currently experiencing in Mexico, our growth tends to moderate a bit, but we are still doing well as families continue to prioritize spending on higher education due to the strong value proposition.

In Mexico, GDP growth for 2026 is expected to remain relatively modest, albeit slightly better than 2025. President Sheinbaum's pragmatic leadership has helped preserve stability in the U.S.-Mexico relationship, providing for a constructive backdrop for the upcoming USMCA trade negotiations. Many economists are projecting an increase in economic activity for Mexico starting in the second half of 2026, setting the stage for a more robust GDP growth in 2027.

In Peru, the economy continues to perform solidly, bolstered by robust domestic demand, new mining projects and strong commodity prices. The Peruvians just elected a new Congress, which reaffirmed a business-friendly center right majority and their presidential run-off election is set for June. Regardless of the outcome of the presidential election, Peru has historically demonstrated economic strength and stability, underpinned by strong underlying governmental institutions, a representative Congress, an independent Central Bank and a history of strong fiscal discipline.

The foundation of our strong track record of performance is our mission, a mission to deliver affordable, high-quality education to prepare students for successful career and lifelong achievement while building pride, trust and respect within the communities we serve. We remain committed to transparency and accountability, measuring the outcomes that matter most and continuously improving how we track and report these results to all of our stakeholders. Earlier this month, we published our 2025 impact report. I encourage you to visit our website and download a copy to learn more about the impact of the outstanding work of our students, faculty and institutions are currently doing in their communities throughout Mexico and Peru.

Let me briefly highlight some of the most important measurable outcomes we delivered. Half of our newly enrolled students are first-generation university attendees for whom a degree leads to their first professional role and a long-term economic upward mobility for their families. 9 out of 10 of our job seeking graduates secure employment within 12 months of graduation, underscoring the relevance of our programs, strong alignment with industry needs and the expertise and commitment of our faculty and staff to prepare students for successful careers. And graduates of Laureate Universities in on-campus programs recover the nominal cost of their education in approximately 3 years through increased earnings compared to high school graduates of the same age and the payback period is even shorter for working adults in our fully online programs. These measurable outcomes align perfectly with our mission, which is focused on quality, affordability and lifelong achievement.

This concludes my prepared remarks, and I will now turn the call over to Rick Buskirk for a more detailed financial overview of our first quarter performance as well as further details on our 2026 full year outlook. Rick?

Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. First, campus-based higher education is a seasonal business. The first and third quarters represent our 2 largest intake periods, which traditionally account for approximately 80% of our total new enrollment activity for the year. From a P&L perspective, both are seasonally low periods as classes are out of session for most of those months. In contrast, the second and fourth quarters are not large enrollment intake periods, but generate higher revenue and adjusted EBITDA for the year. In addition, in terms of seasonality for 2026, we will have some intra-year calendar timing as outlined on Slide 22 in our presentation.

For the first quarter specifically, approximately $9 million of revenue and related profitability is expected to shift out of the first quarter to the second half of the year. As I review our operating results for the first quarter, I will provide some additional color on these and other timing-related impacts and discuss enrollments in context of the cycle completion through mid-April.

Let me now move to the operating and financial performance for the first quarter, starting on Page 11. Enrollment results for the cycle were in line with our expectations in both markets. New and total enrollment volumes increased 9% and 6%, respectively, through completion of the intake cycle in April as compared to the corresponding intake period in the prior year.

Revenue in the seasonally low first quarter was $273 million with adjusted EBITDA of negative $2 million. Both metrics were ahead of the guidance provided 3 months ago due to favorable FX rates as well as some timing of expenses, which benefited adjusted EBITDA. On a constant currency basis and adjusted for the academic calendar shift discussed earlier, revenue for the first quarter was up 5% year-over-year and adjusted EBITDA was essentially flat, with a slight $2 million decrease from prior year due to timing of expenses and investments for new campuses in a low seasonal quarter.

First quarter net loss was $22 million, resulting in a loss per share of $0.15. First quarter adjusted net loss was $24 million and adjusted loss per share was $0.17. Given some timing items affecting both revenue and adjusted EBITDA for the quarter, we are providing an outlook for both the first half and second half of 2026 to help investors better understand the trend line in the business. I'll discuss that a bit further when we review guidance in a few minutes.

Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 13. Please note that all comparisons versus the prior year quarter are on a constant currency basis. Let's start with Mexico. The first quarter reflects a smaller secondary intake as Mexico's primary enrollment cycle occurs in September, aligned with the Northern Hemisphere calendar. Mexico's new and total enrollments increased 4% versus the comparable intake cycle period through April in the prior year. These results are a continuation of the performance we saw during the primary intake last September and are aligned with the softer macroeconomic conditions we are currently experiencing in that market. Overall, pricing for the intake was in line with inflation for our traditional face-to-face programs. We were a little less aggressive with pricing for online, but still with an increase year-over-year as we continue to focus on driving strong volume growth in those programs.

Adjusted for academic calendar timing, Mexico's first quarter revenue increased 2% versus the prior year period, with volume growth offset by timing of other revenue items. Revenue growth in Mexico for the first half of the year is expected to be fairly consistent with guided total company growth rate expectations for the year as those timing items will wash out in the second quarter. Adjusted EBITDA was down 16% year-over-year in the first quarter, largely reflecting the out-of-session period, investments in new campuses and other timing items.

Let's now transition to Peru on Slide 14. The first quarter represents the primary intake for Peru as they are a Southern Hemisphere institution. Peru's new enrollments increased 13% versus last year's comparable intake led by strong growth in working adult-focused fully online programs. Total enrollments were up 8% for the cycle. The rapid scaling of fully online offerings will drive the majority of our enrollment growth in Peru this year as our series of planned new campus launches for face-to-face students won't start to ramp until 2027 and beyond. As discussed in our prior call, this will create a price mix impact on average revenue per student in 2026, resulting in similar revenue and volume growth rates this year in that market.

Pricing during the intake was largely in line with inflation for traditional face-to-face programs. For online programs, given that we are still in an early-stage market, we are keeping prices relatively flat for the time being as we continue to focus on scaling that business and further enhancing our market-leading position. Adjusted for timing of the academic calendar, Peru's revenue for the seasonally low first quarter increased by 13% versus the prior year period and was aided by timing of other revenue during the seasonally low quarter. Adjusted EBITDA for the quarter was negative $35 million as Peru is out of session for most of the quarter as it is in their summer period. Adjusted for timing of the academic calendar, this represents $5 million improvement versus the prior year period.

Let me now briefly discuss our balance sheet position. Laureate ended March with $217 million in gross debt and $157 million in cash for a net debt position of $60 million. Our balance sheet remains strong. During the first quarter, we repurchased $105 million of stock and at quarter end had $76 million remaining under our stock repurchase authorization. Supported by a strong balance sheet and our cash accretive business model, we remain committed to continuing to return excess capital to shareholders.

Moving on to our outlook for 2026, starting on Page 18. We remain excited about the growth opportunities in Mexico and Peru and expect continued operating momentum in both markets during 2026. Following the results from our recently completed intake, today, we are reaffirming our guidance for total enrollments, revenue and adjusted EBITDA and are increasing our adjusted earnings per share guidance by $0.05 per share to reflect the impact of share repurchases during the first quarter. We did recognize a slight foreign currency translation benefit versus expectations in the first quarter, but are maintaining our existing FX rate assumptions for the year given some of the recent volatility in currency rates caused by global events.

With that context, let me now move to our guidance ranges. Based on our assumed FX rates, we expect full year 2026 results to be as follows: total enrollments to still be in the range of 516,000 to 521,000 students, reflecting growth of 4% to 5% versus 2025. Revenues to be in the range of $1.890 billion to $1.905 billion, reflecting growth of 11% to 12% on an as-reported basis and 6% to 7% on a constant currency basis versus 2025. Adjusted EBITDA to be in the range of $583 million to $593 million, reflecting growth of 12% to 14% on an as-reported basis and 7% to 9% on a constant currency basis versus 2025. This would result in an increase in adjusted EBITDA margins of approximately 50 basis points at the midpoint of guidance on a reported basis.

For 2026, we expect adjusted EBITDA to unlevered free cash flow conversion of approximately 50% on a reported basis, supporting our continued emphasis on return of capital to shareholders. Adjusted earnings per share guidance for 2026 is now expected at $2 to $2.08 per share, reflecting growth of 16% to 21% versus 2025 on a reported basis. This guidance reflects a diluted weighted average share count of approximately 141 million shares, incorporating the impact of share repurchases completed during the first quarter.

Now moving to guidance for the second quarter implied first and second half of the year. For the second quarter of 2026, we expect revenue between $597 million and $601 million, adjusted EBITDA between $239 million to $243 million. This would result in first and second half of 2026 trends as shown on Slide #26. Let me just highlight a few points. Constant currency revenue growth rate expectations for the first and second half of the year are pretty similar with a slight uptick in the second half as we expect to start to see some macro recovery in Mexico. From an EBITDA perspective, you will note that our margin accretion is weighted towards the second half of the year. That is resulting from timing of investments as well as the new campus for Mexico that will open starting in September.

That concludes my remarks. Eilif, I'm handing it back to you for closing comments.

Thank you, Rick. The key points of promotable differentiation for Laureate are our leading brands, strong culture of innovation and student centricity and track record of delivering quality education at scale. These assets drive our long-term value creation for all our stakeholders. I'm honored to be part of an organization so deeply committed to expanding the middle class in Mexico and Peru through high-quality, affordable higher education. I extend my sincere gratitude to the faculty and staff, past and present, whose dedication has been essential to our success.

Operator, that concludes our prepared remarks, and we are now happy to take any questions from the participants.

[Operator Instructions] Our first question comes from the line of Jeff Silber of BMO Capital Markets.

This is Ryan on for Jeff. The new enrollment in Peru was really solid this quarter. I understand it was within your expectation, but certainly a lot better than ours. Wondering if it gives you a little bit more tension towards the upper end of the enrollment range.

This is Eilif. Yes, we are very pleased with the performance in Peru. It's driven by our focused effort to penetrate the fully online working adult market as well as benefiting from robust macro conditions in Peru. But we have really -- over the last 18 months -- 18, 24 months, we have launched a broad suite of fully online products. We have done a great job in executing operationally to deliver quality experience for our students. And our commercial efforts has also really resonated with the consumers given the convenient product and the strong value proposition.

And then just for a follow-up, has your view on the macro changed at all since last quarter? And has the recent geopolitical volatility in the U.S. dampened the consumer in Mexico and Peru at all?

No, not really. I mean the Peruvian economy is really driven by natural resources, mining, farming, fishing, tourism and a very broad set of trading partners, both the Americas, Asia, China and Europe. So that has benefited from really stable macro conditions. And Mexico is more closely tied to the U.S. The U.S. has also been fairly resilient given some of the geopolitical challenges. And we are seeing improvements in GDP. We are seeing improvements in consumer confidence, and we are seeing improvement in employment, albeit all at relatively small marginal magnitudes, but the trend lines are encouraging.

Our next question comes from the line of Marcelo Santos of JP Morgan.

I have two. The first is the expansion of online education in Peru, how is that going through the market? I mean it's a new -- recently new development? And how is market discipline around it? Like where you see your competitors? You commented on what you're doing, but I just want to know how the market is behaving. The second question is like your student enrollment outlook is ahead of what you posted in the -- is below what you posted in the first quarter, right, and what you're promising. Is that because you expect kind of a slowdown in Mexico? [Technical Difficulty] That would be my questions.

This is Eilif. Marcelo, I'll start with the Peru online market and then Rick will take the guidance and the enrollment outlook. In terms of the online performance in Peru, very consistent with what I shared with Ryan in the prior question. The market is responding very favorable to our product offering. Of course, we are seeing competitors launching similar products, following our lead. But the market is very disciplined.

This is fully online offering is really dedicated for the working adult 25 to 50-year-old students. It's largely driven by degree completion. There is no meaningful cannibalization between the working adult students that want a fully online experience versus young students who want and need a campus experience where they are supervised by faculty and staff and collaborating and getting durable life skills in addition to the academic experience on the ground. So I view the fishing pond, so to speak, between the young students in the campus setting, very distinct and separate from the fully online offering which are providing enormous convenience and flexibility for the working adult students.

Yes. And Marcelo, just -- this is Rick. Just to comment on -- we still feel on the enrollment expectations for the year and the full year. We still feel comfortable with the guidance on the full year of 4% to 5% revenue growth. Yes, on a weighted basis, we were higher in the first intake this year, but that is driven by Peru, and we still have the secondary impact or the impact from the primary intake of Mexico in the second half.

So when you weigh those together, we're still looking at the enrollment volume growth of 4% to 5%. The only other data point that I would add to you is the growth, we're very pleased, as Eilif said, with the trend rate of expanding and fully online. Fully online does come with a higher attrition rate as expected and will create a bit of a difference between our new enrollment and our total enrollment growth for the full year relative to some of our historical trends. But overall, very positive, and we feel very comfortable about our enrollment outlook for the year.

[Operator Instructions] Our next question comes from Lucas Nagano of Morgan Stanley.

First question is about the intake in Mexico. If it's fully comparable in terms of campuses. How much of the 2% intake growth was due to the UNITEC campus launch and how much was dragged by the closure of UPN campuses?

Lucas, at C1 in Mexico, the intake -- the first quarter intake in Mexico is a secondary intake. So it is primarily non-traditional students, so largely working adults. So a big portion of it is online. So the growth really is -- you can view it essentially all as organic.

Got it. And about the 50 basis point increase in margin outlook, is it more concentrated in Mexico, Peru or both? Because Mexico may have some more opportunity to raise margins as the new campus matures, but Peru may -- we think it may experience some benefit from online.

This is Rick. We expect -- in short, we expect margin expansion in both markets. We expect margin expansion in Peru. Peru ended the year last year right at about 40%. So you will see some margin accretion happen in that market as well as Mexico, we do expect to continue to expand our operating leverage, as we've talked about in the past and see margin expansion in Mexico. That's despite the fact that we are investing in new campuses that do have a drag -- slight drag of 50 basis points in Mexico, we're still able to beat that drag and expand margins. So we feel very good that we'll get expansion in both markets.

What you will see, as we called out in the script, is you will see on top of what I just mentioned on a segment level, that margin expansion will largely come in the second half as we are making investments in some of these new campuses, including Puebla that will launch in the second half, and we're not generating revenue off. So you'll see more revenue expansion come in the second half of the year versus the first half.

So I would just supplement that by saying, had it not been for the new campus investments largely in Mexico that we are launching this year, the campus -- the EBITDA margin expansion instead of being 50 basis points would have been 75 basis points. And that delta of 25 basis points is largely attributable to Mexico. So we're seeing continued margin expansion opportunity in Peru from scale, and we are seeing significant margin opportunity in Mexico, both from scale and continued operational efficiencies.

Thank you. I'm showing no further questions at this time. I'd like to thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Fiscal Year 2025 Laureate Education, Inc. Earnings Conference Call.

[Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead.

Good morning, and thank you for joining us on today's call to discuss Laureate Education's Fourth Quarter and Year-End 2025 Results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer.

Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we will be referring to during today's call. The call is being webcast and a complete recording will be available after the call.

I would like to remind you that some of the information we are providing today, including, but not limited to, our financial and operational guidance, constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected. Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission earlier this morning as well as other filings made with the SEC.

In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements. Additionally, non-GAAP measures that we discuss, including and among others, adjusted EBITDA and its related margin, adjusted net income and adjusted earnings per share, total cash and equivalents, net of total debt and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation.

Let me now turn the call over to Eilif.

Thank you, Adam, and good morning, everyone. Laureate delivered another strong year of performance in 2025 with sustained revenue growth and expanding margins. Full year revenue reached $1.7 billion, and adjusted EBITDA was $519 million, both exceeding the guidance we provided last October. Throughout 2025, we continue to execute on both our growth agenda and our productivity initiatives, which resulted in top line growth of 9% and a historical high margin of 30.5% for the full year. We maintained strong financial discipline throughout the year and closed 2025 with a net cash position. Our cash accretive business model enabled us to return $217 million of capital to shareholders last year through our stock repurchase program. We remain well positioned to continue to invest in future growth and innovation while maintaining our commitment to returning excess capital to shareholders.

Today, we are also pleased to announce that our Board of Directors has authorized an additional $150 million increase to our stock repurchase program, underscoring our focus on long-term value creation for shareholders. With nearly 500,000 students across Mexico and Peru, we have proven that excellence and scale can go hand-in-hand. The scale that we have achieved provides significant competitive advantages in terms of our ability to invest in growth, innovation and academic excellence. In 2025, we continue to strengthen our academic offerings and made further investments in our campus networks, including the opening of 2 new campuses for our value brands, one in Monterrey, Mexico and one in Lima's Ate District. Both projects opened on time and on budget, and they performed as expected during their first year of ramp.

We also made further investments in our Health Sciences portfolio last year, including the opening of a new medical school and a new veterinary school. Health Science programs remain a key focus for our institutions given the long-term demand and workforce needs for graduates in that field of study. Laureate also continues to lead the way in innovation, both inside and outside the classroom. The significant investments we have made in online capabilities position us as the leader in online education in both markets. We now serve more than 100,000 students in our fully online programs focused on working adults.

Within our back office, our innovation capabilities have been acknowledged by industry leaders such as Google, who recently recognized Laureate Mexico as the most advanced company in digital marketing maturity across all industries in Spanish-speaking Latin America. These type of recognitions highlight Laureate's deep digital expertise, which in turn has put us at a significant competitive advantage when it comes to embedding AI tools into our student life cycle journey.

Our investments, combined with innovation mindset continue to drive improvements in our academic quality and student outcomes. Throughout the network, our institutions continue to be recognized as leaders in the sector.

We are pleased to share the latest results from QS Stars, one of the world's leading independent university ranking and ratings organizations. For the third consecutive year, all our universities in Mexico and Peru have achieved 5-star rating, the highest rating attainable in employability, online learning and social impact. Our institutions also received strong market recognition for academic excellence and brand leadership.

A few examples from this past year include: in Peru, UPC ranked the #1 education brand for the fifth consecutive year by MERCO and received a 5-star global university rating by QS Stars. In Mexico, UVM was ranked the second best private university by Reader's Digest 2025 ranking, second only to Tec de Monterrey. Our value brands in both markets, UPN in Peru and UNITEC in Mexico, were ranked in the top 10 in their respective countries by the same ranking agencies. I extend my deepest gratitude to our faculty and staff for their commitment to academic excellence and congratulate them on these outstanding recognitions.

Looking ahead, we remain confident that the demand for quality higher education in both Mexico and Peru will continue to increase. This demand is fueled by rising participation rate, strong wage premiums for graduates and the affordability of our programs. Additionally, the private sector, which accounts for over 55% of the combined university seats in the 2 countries, plays a critical role in the market due to limited public resources.

For 2026, our guidance called for U.S. dollar reported revenue growth of 11% to 12%, of which approximately 5 points is attributable to the more favorable FX environment. Further, we expect 50 basis points of margin expansion during 2026, reflecting continued operating leverage from growth initiatives despite some incremental costs associated with the opening of new campus locations.

We see sustained growth opportunities in both markets, including building additional new campuses for our value brands in new cities and site locations over the next 5-year period and have already begun to procure land for some of these new sites.

Additionally, we are expanding our addressable market through continued AI-enabled investments in digital education with a significant focus on fully online segment for working adults. Many of our AI tools that we have developed for the online portfolio are also being deployed to our face-to-face students and short course upskilling efforts.

From a macroeconomic perspective, we expect Mexico's GDP growth for 2026 to be relatively modest, albeit slightly better than 2025. The key upcoming event to watch is the USMCA trade negotiations. President Sheinbaum's pragmatic approach to managing the U.S.-Mexico relationship has helped maintain a constructive tone as discussions are being kicked off. Many economists anticipate a favorable outcome and are projecting an increase in economic activity for Mexico starting in the second half of 2026, setting the stage for a more robust GDP growth in 2027.

In Peru, the economy continues to perform solidly with strong domestic demand and a favorable macro environment. Supportive monetary conditions, strong commodity prices and new mining projects should continue to underpin strong economic activity throughout the year, even against the backdrop of a presidential election. From a supply and demand perspective in Peru, we continue to rapidly scale our fully online offerings, but are somewhat capacity constrained in our face-to-face campus operations. We expect that to be alleviated following the launch of our second new campus that opens in March of 2027 in South Lima with additional new campus projects beyond that already in the pipeline.

That concludes my prepared remarks, and I will now turn the call over to Rick Buskirk for a more comprehensive financial overview of the fourth quarter and full year 2025 performance as well as further details on our 2026 outlook. Rick?

Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. Campus-based higher education is a seasonal business. Although the fourth quarter is not a large intake period, it represents a strong earnings quarter for the company as classes are in session for much of the period. In addition, the timing of the start of our classes can shift year-over-year depending on various factors such as when public universities begin classes or when holidays occur. This, in turn, affects the timing of enrollments and revenue recognition and quarter-over-quarter comparability. In 2025, the beginning of classes, particularly in Peru, started later versus 2024, extending the enrollment cycle into mid-April and beyond the first quarter cutoff. As a result, we had an intra-year shift in timing that resulted in approximately $25 million of revenue and $21 million in adjusted EBITDA to be shifted from earlier in the year to the fourth quarter.

Let's start with Pages 11 and 12 of the supplementary presentation, which highlights our operating and financial performance for the fourth quarter and full year. Revenue in the fourth quarter was $541 million and adjusted EBITDA was $204 million. Both metrics were ahead of the guidance we provided 3 months ago, aided primarily by improved currency rates. On an organic constant currency basis and adjusted for the academic calendar shift discussed earlier, revenue in the fourth quarter was up 10% year-over-year and adjusted EBITDA increased by 14%. Fourth quarter net income was $172 million, resulting in earnings per share of $1.17 per share on a reported basis. Fourth quarter adjusted net income was $112 million, and adjusted earnings per share was $0.76 per share, an increase of 46% as compared to the fourth quarter of prior year.

Now moving to full year results. For 2025, new enrollments increased 8% versus prior year, and total enrollments were up 5%. Full year revenue was $1.702 billion and adjusted EBITDA was $519 million. This resulted in an adjusted EBITDA margin of 30.5%, which is a new historic high for Laureate. On an organic constant currency basis, revenue for the year increased by 8% and adjusted EBITDA was up 13%, resulting in a 131 basis point improvement in margins, led by a 164 basis point increase in Mexico. Our continued focus on productivity is yielding strong results. Full year 2025 net income was $284 million, resulting in earnings per share of $1.89 per share on a reported basis. Adjusted net income was $256 million and adjusted earnings per share was $1.72 per share, an increase of 22% as compared to prior year.

Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 14. Please note that all comparisons versus prior year are on an organic and constant currency basis. Let's start with Mexico. New enrollments increased 5% for the year, led by growth in fully online programs focused on working adults across both our premium and value brands. Total enrollments in 2025 increased 4% compared to the prior year or 5% same-store. As Eilif referenced earlier, Mexico's macroeconomic environment has recently been characterized by slower growth. Our results underscore the resilience of our operating model and the value proposition we offer to students and their families.

Mexico's revenue for the fourth quarter increased 12% compared to the prior year period. Adjusted EBITDA for the fourth quarter was up 10% year-over-year. For full year 2025, revenue growth of 9% was driven by a 6% increase in average total enrollments and 3% of price/mix. Overall, pricing for the year was in line with our cost of inflation for our traditional face-to-face students. Adjusted EBITDA increased 17% in 2025 versus the prior year period, expanding Mexico's margins by 164 basis points to 26.1%, driven by strong operating leverage from revenue growth and productivity gains.

Let's now transition to Peru on Slide 15. New enrollments increased 13% for the year, driven by double-digit growth in our fully online programs that serve working adults as we continue to scale in that segment. Total enrollments for the year increased by 7% compared to the prior year. Revenue growth for the fourth quarter was 22% and adjusted EBITDA increased 49% year-over-year, primarily due to the timing of the academic calendar I referenced earlier. When adjusted for the timing of the academic calendar, fourth quarter revenue increased 8%, while adjusted EBITDA was up 16%. For full year 2025, revenue in Peru increased 7% year-over-year, driven by a 6% increase in average total enrollments.

Overall, pricing was in line with our cost of inflation for traditional face-to-face students. We are seeing a price/mix impact on average revenue per student due to the higher growth rate of our fully online programs, which are offered at a lower price point. We expect that mix impact to continue in 2026 as we scale up our online segment in Peru. Adjusted EBITDA increased 9% versus the prior year with a margin expansion of 54 basis points.

Let me now briefly turn to our balance sheet. Laureate ended the year with $147 million in cash and $129 million in gross debt for a net cash position of $18 million. During 2025, we repurchased $217 million of common stock under our existing authorization. Since 2019, total capital returned to shareholders has exceeded $3 billion through share purchases, cash distributions and cash dividends. Today, we announced that our Board has authorized a $150 million increase to our share repurchase program. This authorization is supported by our strong balance sheet, cash accretive business model and disciplined capital allocation. As a result of this upsizing, a total of $181 million is available under the current authorization as of year-end 2025. We expect to continue returning excess capital to shareholders in 2026.

Let's now transition to our discussion on guidance. We remain excited about the growth opportunities in Mexico and Peru and expect continued operating momentum in both markets during 2026. A little context by market before getting into the ranges, reiterating some of what Eilif discussed earlier. In Mexico, the macroeconomic conditions are expected to remain soft for much of 2026, aligned with the operating environment in 2025. We expect improved conditions in the second half of the year and as we head into 2027 following the conclusion of the renegotiated USMCA agreement.

In Peru, we intend to continue to rapidly scale our fully online offerings. As we are in the process of building incremental face-to-face capacity with our series of planned new campus launches, strong fully online growth is expected to continue to create a price/mix impact on average revenue per student. Lastly, we are operating in an FX environment where the Mexican peso and the Peruvian sol have appreciated significantly against the U.S. dollar versus the same time last year. This FX environment is currently expected to create some favorable foreign currency translation effects for us as we start the year.

With that context, let me now move to our guidance ranges. Based on our assumed FX rates, we expect full year 2026 results to be as follows: total enrollments to be in the range of 516,000 to 521,000 students, reflecting growth of 4% to 5% versus 2025, revenues to be in the range of $1.890 billion to $1.905 billion, reflecting growth of 11% to 12% on an as-reported basis and 6% to 7% on an organic constant currency basis versus 2025. Adjusted EBITDA to be in the range of $583 million to $593 million, reflecting growth of 12% to 14% on an as-reported basis and 7% to 9% on an organic constant currency basis versus 2025. This would result in an increase in adjusted EBITDA margins of approximately 50 basis points at the midpoint of our guidance on a reported basis.

For 2026, we expect adjusted EBITDA to unlevered free cash flow conversion of approximately 50% on a reported basis, supporting our continued emphasis on return of capital to shareholders. Lastly, today, we are introducing adjusted earnings per share guidance for 2026 with adjusted earnings per share to be expected to be in the range of $1.95 to $2.03 per share, reflecting growth of 13% to 18% versus 2025 on a reported basis. This non-GAAP measure is intended to provide greater transparency into our underlying profitability and improve comparability across periods.

Now turning to our first quarter guidance. As a reminder, Q1 is a seasonally low quarter as classes are largely out of session in January and much of February. In addition, in terms of the seasonality for 2026, we will have some intra-year calendar timing as outlined on Slide 22 of our presentation. For the first quarter specifically, approximately $9 million of revenue and related profitability is expected to shift out of the first quarter to later in the year. With that context, for the first quarter of 2026, we expect revenue between $261 million and $265 million and adjusted EBITDA between negative $20 million to negative $17 million, reflecting growth in fixed costs and investments in our new campuses during a largely out-of-session period.

That concludes my prepared remarks. Eilif, I'm handing it back to you for closing comments.

Thank you, Rick. 2025 was another strong year for Laureate, in which we continue to deliver on our commitments through disciplined execution, focused growth and innovation investments and sustained operational excellence. We see attractive growth opportunities across Mexico and Peru in the years to come and remain committed to executing on our growth agenda. As an established emerging market company with developed market governance, we look forward to another year of value creation for all stakeholders in 2026, guided by our mission to expand access to high-quality, affordable higher education and to positively impact the students and communities we serve.

Operator, that concludes our prepared remarks, and we're now happy to take any questions from the participants.

[Operator Instructions] Our first question will be coming from the line of Jeff Silber of BMO Capital Markets.

You mentioned in your prepared remarks potential new campus openings. And I'm just curious, one, how far in advance do you have to make that decision in order to make sure that you've got the capacity? And two, how do you decide whether you're going to create your own versus potentially buying a campus that already exists?

Jeff, this is Eilif. In terms of timing, it takes about 18 to 24 months to launch a new campus, and that includes the time to find the land, get the licenses, the permits, the zoning, build the campus and then launch [indiscernible] date. In terms of buy versus build, it really is an IRR question. Typically, we have been building, then we get it exactly to the stack. It takes a little longer to ramp versus buying. But typically, it's more economical for us to just build the campus. We have the playbook and then we get the operating model just the way that we want it.

Okay. That's helpful. And then also, you talked about AI and how you're using it in your business. The market is very jittery these days about AI disruption. Do you see any parts of your business that might be at risk from AI disruption?

I think AI is going to be our friend. AI is going to improve retention. It is going to improve the learning outcomes. It is going to continue for us to expand the quality -- access to quality education in the markets where we are serving. And I think the focus for us is to make sure that we are launching the programs for where tomorrow's jobs reside. And I think that is the #1 priority for us. And then that's followed closely by making sure that we are leveraging AI to continue to improve outcomes and reduce cost of education.

And our next question will be coming from the line of Marcelo Santos of JPMorgan.

I have also 2. The first question is on the guidance for 2026. In terms of FX-neutral revenue growth, it implies some deceleration versus what was presented in 2025. Could you just please comment what are the sources, the ups and downs that lead to this slight deceleration in the FX neutral? That's the first question. And the second question is just asking about the expansion of distance learning in Peru. I wanted to ask about the market. Are you noticing a ticket discipline in the market? Or are you noticing like the other players who are launching being more aggressive? Just wanted your comment to see how the market is developing with this new technology.

Great. Rick, do you want to take the guidance? And I'll take the online.

Sure. Marcelo, just to start off, we have shown a consistent ability to continue, as you know, to grow the business in both strong economic times as well as softer macroeconomic times, showing the resiliency of our business model and our ability to expand margins. Specific to 2026, in Mexico, as we noted in our opening remarks, the softer macroeconomic conditions are impacting our outlook. And as a reminder, the primary intake last September for Mexico was up 2% reported, 4% same-store, excluding closures for new enrollments and 4% for total enrollments.

The results from that intake carry much of our volume for 2026 in Mexico until we hit the primary intake again in Q3 in the fall. So we do expect macro conditions to be better in the second half of the year following the conclusion of USMCA. That may benefit this year's primary intake, but it happens later in the year and be felt more in 2027. So that's Mexico.

In Peru, though the macroeconomic backdrop is stronger, we've been very successful historically of filling up capacity in that market and are more capacity constrained. And as a result, we're addressing that through a series of new campus launches, including one in which we'll launch in March of next year.

So those 2 factors are creating a slight deceleration year-over-year, but we're still very, very encouraged about it. And on top of that, we're expanding, as you saw, margins by 50 basis points. That 50 basis point margin expansion is including the netting effect of investments in these new campuses, which creates an offset around 25 basis points. So we're absorbing that 25 basis points within the 50 basis points margin expansion. So again, a little deceleration, but we feel great about this business and our ability to grow in good economic times and slower economic times, and that's some more clarity for you.

I'll pause there, and see if you have any more questions.

And my next question is on guidance.

Great, Marcelo. Your second question was on online or distance learning in Peru. That is accelerating really, really well for us. The market is very receptive to the innovative product portfolio that we have launched over the last couple of years. We are growing robustly in that market. And as I think I've mentioned before, it is a product that is designed for the working adult consumer. So it is very distinct and separate for the face-to-face undergraduate programs that we are selling to young students, high school leavers. And for that reason, there's very little cannibalization between these 2 product offerings.

In terms of pricing, we have done our price volume elasticity studies. And so we have been a little bit more cautious in taking pricing increases in the working adult segment in favor of rapid growth in that market. So ARPS are flattish in the online segment, but the growth is very, very robust.

And our next question will be coming from the line of Lucas Nagano of Morgan Stanley.

The first one is related to the adjusted EPS guidance. So the question is below the EBITDA line, there is any implied change -- material change in your assumptions versus 2025, either in capital structure or taxes? And the second question is about the capacity constraint in Peru. To what extent should it affect new enrollments and price/mix this year based on what you said these drivers should be addressed next year with the new campuses?

Yes, sure. And in terms of our adjusted EPS guidance, we're happy to provide that. Number one, it's an important metric for us as we continue to move forward. It's a high-quality company. Relative to last year, I think you'll see a small increase in G&A as we bring new campuses online. I think you will also see that taxes should be generally in line, slightly improved. And then lastly, you'll see a little bit higher interest income because of the funding of our new campuses in Peru.

Sorry, I think in your second question, was related to...

Second question on capacity constraints. We are running higher utilization in Mexico than in Peru. The same-store has a little bit more restrictions. It's not material at this point, but it's one of the reasons why we're adding more capacity with new campus launches still in Lima for our value brand as well as adding more classrooms to existing campuses in Peru.

And Lucas, just to follow on to what Eilif said, I think you saw very strong fully online growth last year in Peru. As a result, we had 7% volume growth, 7% revenue growth. If you look at average enrollment, it was 6%. So it's about 1% price/mix. I think you'll see a big impact of price/mix as well this year in Peru as we continue to really provide some leadership position in the fully online segment and go after that. That pattern should recur in 2026.

And our next question will be coming from Eduardo Resende of UBS.

I got just one question from my side. Talking about the softer economic activity expected in Peru this year, especially with discussions regarding USMCA, do you see any risk of this potentially impacting the company's ongoing investment plans in the country? And how do you see tuitions evolving the scenario and your capacity to pass through the costs in Mexico this year? So that's all from my side.

Thank you, Eduardo. So the softer economic conditions in Mexico is really a continuation of what we have seen since the second half of 2024. And it was driven by some uncertainties following the election, the uncertainty around tariffs and the trade situation between Mexico and the United States. And so that softer GDP production in 2025, it was below 1%. In 2026, it's expected to be somewhere between 1.4%, 1.5% GDP.

And then the expectation is that post USMCA, there will be an uptick in direct foreign investment again into Mexico as we saw in 2023, that is going to then drive GDP growth up into the 2 to 3 percentage point range. So how I would describe 2026 is a continuation of 2025 was slightly lower. And during 2025, we saw volume production of 3% to 4% growth, and we saw pricing consistent with inflation. And it is that kind of momentum that I expect continuing into 2026 with potentially some upside in the second half of 2026 when there's clarity on USMCA and hence, the level of private investment in the country.

And I am showing no further questions. I thank you for all participating on today's conference call. This concludes today's call. You may now disconnect.

Good day and thank you for standing by. Welcome to the Laureate Education Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Adam Morse, Senior Vice President of Finance. Please go ahead.

Good morning and thank you for joining us on today's call to discuss Laureate Education's third quarter and year-to-date 2025 results. Joining me on the call today are Eilif Serck-Hanssen, President and Chief Executive Officer; and Rick Buskirk, Chief Financial Officer.

Our earnings press release is available on the Investor Relations section of our website at laureate.net. We have also posted a supplementary presentation to the website, which we'll be referring to during today's call.

The call is being webcast, and a complete recording will be available after the call. I would like to remind you that some of the information we are providing today, including, but not limited to, our financial and operational guidance constitutes forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking statements are subject to risks and uncertainties that may change at any time, and therefore, our actual results may differ materially from those we expected.

Important factors that could cause actual results to differ materially from our expectations are disclosed in our annual report on Form 10-K filed with the U.S. Securities and Exchange Commission, our 10-Q filed earlier this morning as well as other filings made with the SEC. In addition, all forward-looking statements are based on current expectations as of the date of this conference call, and we undertake no obligation to update any forward-looking statements.

Additionally, non-GAAP measures that we discuss, including and among others, adjusted EBITDA and its related margin, adjusted net income and adjusted earnings per share, total cash and equivalents, net of total debt and free cash flow are also detailed and reconciled to their GAAP counterparts in our press release or supplementary presentation.

Let me now turn the call over to Eilif.

Thank you, Adam, and good morning, everyone. Today, we are pleased to report strong operating and financial performance for the third quarter, along with the results of our recently completed intake cycles. Third quarter revenue was $400 million and adjusted EBITDA was $95 million. Both metrics were ahead of the guidance we provided in July.

Favorable results for the quarter were driven by improved foreign currency rates and double-digit growth in Peru's secondary intake, led by fully online working adult programs as we continue to scale in that segment, albeit from a smaller base. The primary intake in Mexico was up 4%, excluding campus closures and in line with our expectations.

The solid results during the intake were against the backdrop of a softer macroeconomic environment, reinforcing the resiliency of our business model. During the intake cycle, we also opened 2 new campuses for our value brand institutions, one in Monterrey, Mexico and one in Lima's Ate District in Peru. Both campuses opened on time, on budget and performed as expected. These campus openings were our first new campus launches since 2019. We also have 2 additional new campus projects underway, one in each market and expect these to open late next year or early in 2027.

Beyond that, we have identified numerous other cities and site locations in both Mexico and Peru that are ripe for development over the next several years. The completion of the intake cycle provides us with strong visibility for the remainder of the year, and we are announcing an increase to our full year 2025 outlook, which Rick will cover in more detail later in his prepared remarks.

Our balance sheet remains exceptionally strong. And today, we are also pleased to announce that our Board has authorized a $150 million increase to our stock repurchase program, underscoring our disciplined approach to capital allocation and focus on long-term value creation for our shareholders.

From a macro perspective, Peru's economy continues to perform well, driven by robust domestic demand, new mining projects, strong commodity prices, rising wages and low inflation. GDP growth for this year is projected at approximately 3% with a similar pace expected to continue through 2026, reinforcing the country's path towards sustainable growth.

In Mexico, President Sheinbaum's administration marked its first year in office with a public approval rating above 70%. The government has maintained fiscal discipline, advanced industrial modernization and promoted infrastructure investments through stronger public-private collaboration. U.S. trade policy uncertainties have caused the current macroeconomic environment to be a bit sluggish. However, Sheinbaum's pragmatic approach to managing the U.S.-Mexico relationship has helped maintain a constructive tone ahead of the upcoming U.S. MCA review.

Most economists anticipate an increase in economic activity in the second half of 2026 and into 2027 following completion of these trade negotiations. That concludes my prepared remarks, and I'm now handing the call over to Rick for the financial overview of the third quarter as well as guidance for the fourth quarter and the full year 2025. Rick?

Thank you, Eilif. Before I discuss our financial performance for the quarter, let me provide a few important reminders on seasonality. Campus-based higher education is a seasonal business. Although the third quarter is a large intake period, from a P&L perspective, it is seasonally low as classes are out of session for much of the quarter.

In addition, the timing of the start of our classes can shift year-over-year depending on various factors such as when public universities begin classes or when holidays occur. This, in turn, affects the timing of enrollments and revenue recognition and quarter-over-quarter comparability. In 2025, the beginning of classes, particularly in Peru, started later versus 2024, extending the enrollment cycle into mid-April and beyond the first quarter cutoff. As a result, we expect approximately $26 million of revenue and $23 million in adjusted EBITDA will shift from the first quarter to the second half of the year, primarily to the fourth quarter.

As we review our operating results, I will provide additional color on these timing-related impacts. Let's start with Page 10 and 11 of the supplementary presentation, which highlight our operating and financial performance for the third quarter and year-to-date. For the quarter, new and total enrollment volumes increased 7% and 6%, respectively, versus the third quarter of the prior year. Third quarter revenue was $400 million and adjusted EBITDA was $95 million. Both metrics were ahead of the guidance we provided 3 months ago, aided by the favorable secondary intake in Peru, favorable price/mix and improved currency rates.

On an organic constant currency basis and adjusted for the academic calendar shift discussed earlier, revenue for the seasonally low third quarter was up 6% year-over-year and adjusted EBITDA increased by 3%. Third quarter net income was $34 million, resulting in earnings per share of $0.23 per share on a reported basis. Third quarter adjusted net income was $37 million and adjusted earnings per share was $0.25 per share, an increase of 14% as compared to Q3 of the prior year.

Now turning to year-to-date performance. On an organic constant currency basis and adjusted for academic calendar timing, results for the 9 months of 2025 were strong, with revenue and adjusted EBITDA growth of 8% and 13%, respectively, versus the prior year period.

Let me now provide some additional color on the performance of Mexico and Peru, starting with Page 13. Please note that all comparisons versus prior year are on an organic and constant currency basis. Beginning with Mexico. Mexico's new enrollments for the third quarter increased 2% versus the prior year period on a reported basis or 4% excluding campus closures during their primary intake.

Total enrollment volume for the third quarter increased 4% compared to the prior year period on a reported basis or 5% when adjusted for the impact of campus closures. As Eilif noted earlier, the macroeconomic environment in Mexico is currently a bit sluggish. The growth we delivered during this intake cycle demonstrates the resiliency of our business model and the value proposition our institutions offer to parents and students.

Mexico's revenue for the third quarter increased 5% compared to the prior year period, and adjusted EBITDA was up 25%. Overall, pricing for the intake was in line with inflation for our traditional face-to-face students. On a year-to-date basis, Mexico's revenue grew 8% and adjusted EBITDA increased 21% versus the prior year period. The resulting margin increase of 240 basis points was led by productivity gains and revenue flow-through.

Let's now transition to Peru on Slide 14. New enrollments in Peru increased by 21% for the third quarter compared to the previous year. Results were driven by strong growth in our fully online programs that serve working adults as we continue to scale in that segment. Total enrollments were up 8% versus the third quarter of the prior year, supported by a strengthening macroeconomic backdrop and the expansion of our fully online programs.

Adjusted for timing of the academic calendar, Peru's revenue for the third quarter increased 8% year-over-year, driven by higher enrollment volumes. Overall, pricing for the secondary intake was in line with inflation for our traditional face-to-face students. Going forward, we do expect a price mix impact on average revenue per student due to the higher growth rate of our fully online programs. Adjusted for timing of the academic calendar, adjusted EBITDA declined 2% versus the comparable period in the prior year. This was due to timing of expenses, which we expect to be offset in the fourth quarter.

On a year-to-date basis and adjusted for timing of the academic calendar, Peru's revenue increased 7% versus the prior year period. Adjusted EBITDA increased 5% and was impacted by the timing of certain expenses, which we are expected to normalize in the fourth quarter.

Let me now transition to our balance sheet position. Laureate ended September with $241 million in cash and $102 million in gross debt for a net cash position of $139 million. Through September of this year, we repurchased $71 million of common stock under our previously announced $100 million repurchase program.

Our strong balance sheet, cash accretive model and disciplined capital allocation supported our Board's decision to authorize a $150 million increase in our stock repurchase program. In total, $177 million remains available under our current upsized authorization. Upon completion of this authorization, we will have returned more than $3 billion of capital to shareholders since 2019 through a combination of share repurchases, cash distributions and cash dividends.

Moving on to our outlook, starting on Page 18. Today, we are announcing an increase in our full year 2025 guidance at the midpoint by $61 million for revenue and $17 million for adjusted EBITDA. Our improved outlook for 2025 is resulting from the favorable secondary intake in Peru and better price/mix and favorable currency movements in the Mexican peso and Peruvian sol.

Based on our assumed spot FX rates, we now expect full year 2025 results to be as follows: total enrollments to be approximately 494,000 students, reflecting growth of approximately 5% versus 2024. Revenues to be in the range of $1.681 billion to $1.686 billion, reflecting growth of 7% to 8% on an as-reported basis and approximately 8% on an organic constant currency basis versus 2024.

Adjusted EBITDA to now be in the range of $508 million to $512 million, reflecting growth of 13% to 14% on an as-reported basis and 12% to 13% on an organic constant currency basis versus 2024. Adjusted EBITDA margin expansion of approximately 150 basis points, primarily driven by Mexico's continued margin optimization and operating leverage. Adjusted EBITDA to Unlevered Free Cash Flow Conversion of approximately 50%, reflecting our strong cash accretive business model and disciplined capital approach.

Now moving to the fourth quarter guidance. For the fourth quarter of 2025, we expect revenue to be in the range of $521 million to $526 million, adjusted EBITDA to be in the range of $194 million to $198 million. Our fourth quarter outlook reflects the catch-up benefit from the intra-year academic calendar changes in Peru. That concludes my prepared remarks. Eilif, I'm handing it back to you for closing comments.

Thank you, Rick. Our operations in both Mexico and Peru continue to perform very well, resulting in strong performance on a year-to-date basis and causing us to guide to an improved outlook for the remainder of the year.

With leading brands, strong digital capabilities, disciplined capital allocation and a strong balance sheet, we are very well positioned to execute on our growth agenda and advance our mission of transforming lives across Mexico and Peru through high-quality, affordable education.

Operator, that concludes our prepared remarks, and we are now happy to take any questions from the participants.

[Operator Instructions] And our first question comes from Jeff Silber of BMO Capital Markets.

This is Ryan on for Jeff. On Peru, revenue for the quarter was really strong, especially in the context of the $7 million of revenue falling out from the calendar timing. I was just trying to understand some of the moving pieces with FX enrollment and pricing versus your initial forecast.

Well, we are benefiting in Peru, of course, having the recession behind us, which means that we are seeing a little bit of a catch-up on delayed demand or deferred demand from last year. But we're also just seeing strong consumer sentiment. We have a very strong value proposition, which works well in the premium segment, in the value segment as well as a very rapid increase in demand for fully online working adult products.

In terms of pricing for face-to-face, we have been pricing in line with inflation with the working adult product that's fully online. We have adjusted pricing to optimize our revenue production, but it has been from a relatively small base. It shouldn't have a material impact on the overall price dynamics in the market. But net-net, on the fully online product, we have taken a slight reduction in headline pricing.

Appreciate that. And just for the follow-up on the Mexican new enrollment growth for the quarter. I was hoping you could parse apart the plus 2% or the plus 4%, I guess, on an organic basis. I think last quarter, you had highlighted some working adult strength. So I was just wondering how that evolved. And then if you could give us anything on how the face-to-face new enrollment evolved in Mexico as well for the intake cycle.

Yes. So the third quarter is really the main enrollment. So the focus is really young students. And what we call C1, cycle 1 and cycle 2 in first and second quarter are primarily working adult markets. So the vast majority of the volume momentum is driven by traditional 18- to 24-year-old undergraduate students in Mexico for third quarter.

[Operator Instructions] And our next question comes from Lucas Nagano of Morgan Stanley.

We have a question about the intake in Mexico. If you could quantify the contribution, the percentage points from the new campus launched this quarter? In other words, how much did it grow without the new campus?

So we had 4% growth when excluding campus closures and 1 point of that came from new campus launches. So 3% same store.

Perfect. And also, you mentioned that going forward, you expect pricing in Peru in line with inflation. How much should the average revenue per student be impacted due to the mix of [indiscernible] fully online?

Rick, do you want to take the mix impact?

I mean overall inflation in Peru is trending very well. It's a headline around 2%. So that's as a starting point of what our target would be to match that in the market. And then mix impact could be upwards of 2% as we continue to aggressively go after the fully online working adult segment. And as a reminder, we're just getting started in Peru. We have over 100,000 students approximately in Mexico. We have a fraction of that in Peru, and we're starting to really see solid growth in that segment as we've seen posted in Q3 of this year.

Thank you. This concludes our question-and-answer session and also today's conference call. Thank you for participating, and you may now disconnect.