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Covista (CVSA) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q3 FY26)· Consumer Staples· May 7, 2026

Source: earnings call transcript

Executive summary

Covista Q3 FY26 — Chamberlain Returns to Growth, Raised Full-Year Guidance

Covista reported strong Q3 FY26 results, driven by a successful turnaround at Chamberlain and sustained momentum at Walden, leading to record enrollments. Management raised full-year guidance for both revenue and adjusted EPS, citing operational improvements and robust demand for healthcare education. The company emphasized its strong financial foundation and disciplined capital allocation, including debt refinancing and share repurchases, while investing in strategic growth initiatives like AI and campus expansion.

Highlights

5

  • Total enrollment surpassed 100,000 students, marking the 11th consecutive quarter of growth.

  • Chamberlain returned to positive total enrollment growth of 0.5% ahead of expectations.

  • Walden achieved record enrollment of over 54,000 students, growing 12.3% year-over-year.

  • Full-year revenue guidance was raised to a range of $1.93 billion to $1.945 billion.

  • Full-year adjusted EPS guidance was raised to a range of $7.95 to $8.15.

Concerns

2

  • Walden's Q3 revenue was impacted by an $18 million shift of one academic week into Q2 due to calendar timing.

  • Post-licensure enrollment at Chamberlain was lower, though sequential improvement was noted.

Guidance & targets

CategoryTargetConfidence
Full-year Revenue
$1.93B-$1.945B
high materiality
High
Full-year Adjusted EPS
$7.95-$8.15
high materiality
High
Full-year Adjusted EBITDA Margin
100 bps expansion
medium materiality
High
Chamberlain Q4 Enrollment Growth
Directionally similar to Q3
medium materiality
High
Effective Tax Rate
Higher than fiscal year 2025
low materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Chamberlain
Reflects return to positive total enrollment growth, an important milestone as operational improvements gain traction. Driven largely by pre-licensure, with sequential improvement in post-licensure RN to BSN and continued growth in Master's programs.
Total student enrollment: 40,767Total student enrollment growth: 0.5%Adjusted EBITDA margin: 29.7%Adjusted EBITDA margin expansion: 20 bps
$197M2.3%—$58.5M
Walden
Revenue impacted by $18M shift of 1 academic week to Q2. Excluding this, revenue increased 14.7% YoY to $204.6M. Enrollment growth was broad-based across health care and non-health care programs and continued strong persistence rates.
Total student enrollment: 54,474Total student enrollment growth: 12.3%Adjusted EBITDA (ex-timing impact): $67.8MAdjusted EBITDA growth (ex-timing impact): 25.5%Adjusted EBITDA margin (ex-timing impact): 33.1%Adjusted EBITDA margin expansion (ex-timing impact): 280 bps
$186.6M4.6%—$49.7M
Medical and Veterinary
Growth in both medical and veterinary programs. Focused on operating efficiently while making long-term growth investments and delivering strong academic outcomes.
Total student enrollment: 5,344Total student enrollment growth: 4.1%Adjusted EBITDA growth: 20.1%Adjusted EBITDA margin: 26.5%Adjusted EBITDA margin expansion: 250 bps
$103.5M8.9%—$27.5M

CVSA operating KPIs by quarter

CVSA operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q3 FY26 Jun 2026 Q4 FY26Change vs prior quarter
Total student enrollment Walden
54.474K Total student enrollment grew 12.3% to 54,474 students joining Chamberlain and also setting a record this quarter and marking Walden's 11th consecutive quarter of total enrollment growth. Source: earnings call transcript
<55K Total student enrollment was up 14% to nearly 55,000 students, our 12th consecutive quarter of growth and the highest total enrollment in Walden's history with strength across health care and non-health care programs. Source: earnings call transcript
—
Total student enrollment Medical and Veterinary
5,344 Total student enrollment increased 4.1% to 5,344 students with growth in both our medical and veterinary programs. Source: earnings call transcript
5,100+ Total student enrollment was up 7.3% to over 5,100 students, led by medical with new enrollment accelerating at both Med and Vet. Source: earnings call transcript
—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

ProductTypeDetails
AI Credentialslaunch
Clinical Psychology and Behavioral Analysis Programslaunch
Palliative Care and Special Education Programslaunch

Deals & partnerships

SSM Employer partnership for talent acquisition in healthcare

Relationship continues to thrive, showing increased applications and inquiries around the St. Louis campus. Serves as a proof point for a new and differentiated way of thinking about talent acquisition for healthcare providers.

Google Cloud Co-development of AI-powered classroom and AI credentials

Working on two fronts: co-developing an AI-powered classroom natively inside the student platform for personalized learning, and launching AI credentials across various healthcare disciplines. Initial pilots for the AI classroom launch later this year.

What to watch in Q4 FY26

Chamberlain Enrollment Growth Rate

Q4 FY26
Current 0.5% (Q3 FY26)
Target Directionally similar to Q3

Why it matters

Verifies the sustained effectiveness of Chamberlain's operational improvements and its continued turnaround.

We expect the rate of growth to be directionally similar.

Find out whether CVSA delivers this. Inve re-checks your case every morning.

Q&A highlights

Update on the SSM partnership and other employer partnerships, and conversations with care providers.

The SSM partnership continues to thrive, showing encouraging interest and applications around the St. Louis campus. Several other active conversations are ongoing with hopes to announce new partnerships soon, encouraged by early SSM outcomes.

“So what I can say about SSM is that the relationship continues to thrive the sort of interest, the increase in applications and inquiries around the St. Louis campus have been really encouraging.”

asked by Ryan Griffin · answered by Stephen Beard

2 min read 6 chapters

Detailed narrative

Chamberlain's Turnaround and Operational Improvements

Chamberlain returned to positive total enrollment growth of 0.5% in Q3 FY26, ahead of expectations, reaching its highest enrollment in university history. This turnaround is attributed to operational changes including localized marketing in key metropolitan areas, simplified application processes, rebuilt scholarship programs, and upgraded talent. Management noted sharp improvements in application volumes and funnel conversion rates, which are now consistent with historical levels, signaling stronger momentum for the fall enrollment cycle.

Walden's Sustained Momentum and Program Expansion

Walden continued its strong performance, achieving its 11th consecutive quarter of total enrollment growth, reaching a record 54,474 students, up 12.3% year-over-year. This growth was broad-based across healthcare and non-healthcare programs, supported by strong student persistence rates. Walden also launched new programs in clinical psychology and behavioral analysis, enrolling over 1,400 students, with an additional seven programs approved, including palliative care and special education, demonstrating its competitive advantage in bringing high-demand programs to market quickly.

Medical and Veterinary Segment Performance

The Medical and Veterinary segment delivered robust results with revenue increasing 8.9% and total student enrollment growing 4.1% to 5,344 students. The segment maintained strong academic outcomes, including a 97% first-time residency attainment rate for AUC graduates and over 98% in the most recent cycle. Operational efficiencies, such as cutting application review time by weeks, contributed to strong financial outcomes and a 20.1% increase in adjusted EBITDA.

AI and Technology Initiatives

Covista is advancing its enterprise investments, particularly with Google Cloud, on two fronts. They are co-developing an AI-powered classroom for personalized learning, with initial pilots launching later this year. Additionally, over 4,000 learners have enrolled in newly launched AI credentials across nursing, medicine, and foundational AI, with more certificates planned. The company established the Covista Healthcare Readiness AI Council to ensure clinical grounding for its AI curriculum, which is resonating with health systems.

Capital Allocation and Financial Strength

The company demonstrated strong financial health with trailing 12-month free cash flow growing 17% to $336 million and net leverage declining to 0.7x. During the quarter, Covista refinanced its long-term debt, securing a $510 million Term Loan B with a 50 basis point rate improvement and extending maturity to 2033. The company also repurchased $66 million of its stock, highlighting a balanced approach to capital deployment for growth investments and shareholder returns.

Strategic Vision and Leadership Changes

Covista is transitioning from its 'Growth of Purpose' strategy to 'Purpose at Scale,' built on operational excellence, platform extension, employer integration, and technology focus. Key leadership appointments include Amelia Manning as the new President of Chamberlain and Michael Betz in an expanded role as Chief Growth and Innovation Officer, aimed at strengthening execution and driving future growth.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.