Detailed narrative
Enrollment Trends and AI Impact
Total student enrollments across Perdoceo's academic institutions grew 0.7% as of June 30, with CTU experiencing its 11th consecutive quarter of growth at 0.6% and the University of St. Augustine for Health Sciences seeing a 6% increase. AIU System, however, saw a 1% decline primarily due to Trident University. The company is actively responding to the evolving landscape of AI-powered search by optimizing content for AI engines and increasing investment in unaffected inquiry channels, noting a modest impact on overall enrollment thus far.
Strategic Investments and Capital Allocation
Perdoceo continues to make purposeful investments in academics, program development, technology, and student support teams to enhance academic outcomes and student experiences. The Board of Directors approved a 13.3% increase in the quarterly dividend, raising it from $0.15 to $0.17 per share, payable in September 2026. This reflects the company's commitment to making dividends a growing and integral part of its capital allocation strategy, alongside share repurchases and evaluating accretive acquisition opportunities.
University of St. Augustine for Health Sciences Performance
The University of St. Augustine for Health Sciences, acquired in 2024, continues to perform strongly, with a 10.2% increase in revenue and a 6% increase in total student enrollments to approximately 4,200 students. This growth was driven by expansion in programs like nursing and speech-language pathology, and the introduction of new modalities for occupational therapy. The university's adjusted operating income increased to $10.7 million from $5.5 million in the prior year, and it is expected to meaningfully contribute to overall revenue and adjusted operating income growth in 2026 and 2027.
CTU Performance and Outlook
Colorado Technical University (CTU) achieved its 11th consecutive quarter of enrollment growth, with total student enrollments up 0.6% to 32,110 students, and revenue rising 0.9% to $115.5 million. While the second half of 2026 may see reported enrollments trend lower due to a record number of graduations and lapping strong prior-year quarters, sustained student retention, expansion of corporate student programs, and increasing prospective student interest are expected to support long-term growth. The institution is also making intentional investments in marketing and refining AI use for student engagement, though legal fees have trended higher.
AIU System Performance and Outlook
The AIU System experienced a 1% decrease in total student enrollments, primarily attributed to lower enrollments at Trident University. However, excluding Trident, AIU System enrollments would have increased. Despite academic calendar-driven variability impacting quarterly comparability, the system expects strong total student enrollment growth in Q3 2026 and anticipates operating income to grow for the full year. AIU System continues to invest in marketing and student support and plans to launch new AI-focused programs in the fall.
Acquisition Strategy
Perdoceo emphasizes its proven capabilities in acquiring and integrating academic institutions, citing the successful integration of the University of St. Augustine for Health Sciences. With a strong balance sheet and disciplined capital allocation, the company is actively evaluating accretive acquisition opportunities to complement its organic growth, particularly in health sciences and other programmatic areas of focus. Management expressed encouragement regarding ongoing dialogues with various academic institutions.