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Covista (CVSA) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q4 FY26)· Consumer Staples· Aug 6, 2026

Source: earnings call transcript

Executive summary

Covista Q4 FY26 — Exceeds Targets, Launches "Purpose at Scale" Strategy

Covista successfully concluded its "Growth with Purpose" strategy, surpassing long-term financial targets through sustained enrollment growth and margin expansion. The company is now embarking on its "Purpose at Scale" strategy, focusing on platform extension, employer integration, and technology to address the structural demand in healthcare workforce education. This new phase is supported by a robust balance sheet and a commitment to continued capital returns.

Highlights

5

  • Full-year revenue grew 9.3% to $1.95 billion, exceeding the high end of raised guidance.

  • Full-year adjusted EPS grew 23.7% to $8.25, exceeding the high end of raised guidance.

  • Achieved 12 consecutive quarters of total enrollment growth across the company.

  • Full-year free cash flow of $393 million, representing a 39% increase year-over-year.

  • Net leverage improved to 0.5x, down from 0.8x at the end of fiscal 2025.

Concerns

2

  • Walden's academic calendar shift will result in one less week in Q2 FY27 and one additional week in Q3 FY27, impacting year-over-year comparisons in those quarters.

  • A higher effective tax rate is anticipated for fiscal 2027 compared to fiscal 2026.

Guidance & targets

CategoryTargetConfidence
Full-year Revenue
$2,050 million to $2,090 million
high materiality
High
Full-year Adjusted EPS
$8.90 to $9.15
high materiality
High
Full-year Adjusted EBITDA Margin Expansion
approximately 0 to 50 basis points
medium materiality
Medium
Chamberlain Total Enrollment Growth Rate
accelerate again
medium materiality
High
Capital Expenditure Run Rate
slightly higher than the annualized fourth quarter fiscal 2026 spend
low materiality
Medium
Effective Tax Rate
higher
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Chamberlain
Fourth quarter revenue increased, driven by pre-licensure nursing and masters program enrollment growth, along with pricing optimization. This marks the second consecutive quarter of positive total enrollment growth. Adjusted EBITDA margin expanded 20 basis points.
Total enrollment growth: 1.6%Pre-licensure BSN total enrollment growth: 16th consecutive quarter
$190.2 million3.2%—24.6%
Walden
Fourth quarter revenue increased significantly, driven by strong enrollment growth. Total student enrollment reached its highest level in Walden's history, with strength across both health care and non-health care programs. Adjusted EBITDA margin expanded 410 basis points due to strong revenue growth and operational efficiencies.
Total student enrollment: 55,000Total student enrollment growth: 14%Double-digit enrollment growth: 9th straight quarter
$210.8 million15.7%—33%
Med/Vet
Fourth quarter revenue increased, with total student enrollment growing, led by medical programs and accelerating new enrollment in both Med and Vet. Adjusted EBITDA margin expanded 30 basis points. Some Q4 enrollments reflect students moving ahead of OB3 loan changes, but the full-year trajectory is embedded in the FY27 guide.
Total student enrollment: 5,100Total student enrollment growth: 7.3%
$100.3 million10.7%—22.4%

CVSA operating KPIs by quarter

CVSA operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q3 FY26This call 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 credentials with Google Cloudexpansion
AI-powered classroomroadmap
New Walden programslaunch

Deals & partnerships

SSM Employer partnership for nursing education

Early results with SSM are strong enough that Covista is expanding its target enrollment there, indicating successful collaboration in meeting nursing pipeline needs.

Advocate Health New collaboration for nursing education

A new collaboration with Advocate Health, the third-largest nonprofit integrated health system, to support building a sustainable nursing workforce. The program, delivered through Chamberlain, funds nursing education, builds clinical readiness, and creates a financially supported pathway into the profession. The first cohort starts in September.

Risks & headwinds

Walden academic calendar shift Q2 and Q3 FY27

1 less week in Q2 FY27, 1 additional week in Q3 FY27

Mitigation:No net impact for the full year comparison of fiscal 2027 to fiscal 2026.

Higher effective tax rate FY27

higher in fiscal 2027 than in fiscal 2026

Stronger comparables for Walden and Med/Vet FY27

stronger comparables

Mitigation:Already contemplated in long-term targets.

Elevated investment levels H1 FY27

higher investment levels

Mitigation:Expected adjusted EBITDA margin improvement to be in the back half of the year.

What to watch in Q1 FY27

Chamberlain total enrollment growth rate

Q1 FY27
Current 1.6% in Q4 FY26
Target accelerate again

Why it matters

Chamberlain's enrollment trajectory is a key indicator of the success of platform extension initiatives and overall growth momentum.

For the first quarter, we expect the total enrollment growth rate to accelerate again, consistent with the sequential improvement we saw from the third quarter to the fourth in fiscal 2026.

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

Q&A highlights

What has been the impact of the OB3 loan changes, particularly after the July 1st deadline, on enrollment and student behavior?

Management does not anticipate headwinds from OB3 changes. They observed some pull-forward activity in Med/Vet enrollments in Q4 FY26, viewing it as a consumer behavior dynamic that shortened the sales cycle for some students. This is seen as a net positive, creating capacity for future demand.

“We view that as a consumer behavior dynamic, not a shift in underlying demand, and the way we encourage investors to think about it is that a portion of the incremental growth coming in the fourth quarter as a shift between 2 periods, right?”

asked by Jack Slevin · answered by Stephen Beard

2 min read 6 chapters

Detailed narrative

"Growth with Purpose" Strategy Success

Covista successfully completed its 3-year "Growth with Purpose" strategy, exceeding long-term targets set at its outset. This included growing revenue from less than $1.5 billion to $1.95 billion, expanding EBITDA margins by 300 basis points, nearly doubling adjusted EPS, and more than doubling free cash flow. The strategy focused on building infrastructure for durable, profitable growth while maintaining focus on student outcomes, culminating in 12 consecutive quarters of total enrollment growth.

"Purpose at Scale" Strategy Launch

The company is now launching its next 3-year strategy, "Purpose at Scale," which carries forward operating discipline and adds three pillars: platform extension, employer integration, and technology. This strategy is underpinned by a structural demand backdrop in healthcare, with over 70% of clinicians and executives reporting staffing shortages affecting care quality. Covista aims to solve this problem by converting demand into qualified clinicians.

Platform Extension Initiatives

Platform extension involves placing programs in more locations, formats, and markets. At Chamberlain, 6 new campuses are in active development, with 3 having full regulatory approval, and Cincinnati and Salt Lake scheduled to open in H1 FY27. Each campus requires $9 million to $12 million in capital, with an expected EBITDA breakeven within 24 months. Walden achieved its highest total enrollment ever, with broad-based growth across all degree levels, including undergraduate growth exceeding 20%, supported by new programs and persistence analytics.

Expanding Employer Partnerships

Covista is expanding its employer partnerships, building on strong early results with SSM, which led to increased enrollment targets. A new collaboration with Advocate Health, the third-largest nonprofit integrated health system, will fund nursing education through Chamberlain. This program is expected to serve hundreds of students annually, creating a more durable enrollment model with lower acquisition costs, as employer commitment leads to higher enrollment rates and persistence.

Technology and AI Investments

The company is investing in enterprise technology, having launched AI credentials with Google Cloud in Q3, adding 9 more certifications in Q4, and enrolling over 9,000 learners. Prototypes of an AI-powered classroom are currently being tested, with first live deployments expected in H2 FY27. Covista is adapting its marketing strategies for the shift from search optimization to AI answer optimization, leveraging trusted brands and strong student outcomes.

Leadership and Strategic Direction

Covista strengthened its leadership with the addition of two new Board members, Emily Chiu and Leslie Storms, bringing relevant operating experience. Rick Sinkfield joined as VP of Expansion, overseeing campus growth, and Scott Liles became Chief Strategy and Performance Officer. The company emphasizes its strong foundation, proven operating model, and balance sheet to fund its growth plans, aiming to extend its leading position in healthcare workforce education and generate durable earnings.

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