Universal Technical Institute : Document (Universal Technical Institute Inc. UTI US Q2 2026 Earnings Call 6 May 2026 4 30 PM ET)

About this update from Universal Technical Institute Inc

06-Ma y-2026 Universal Technical Ins titute, Inc. (UTI) Q2 2026 Earnings Call CORPORATE PARTICIPANTS Matt Kempton Vice President-Corporate Finance & Investor Relations, Universal Technical Institute, Inc. Jerome A. Grant Chief Executive Officer & Director, Universal Technical Institute, Inc. Bruce Schuman Executive Vice President & Chief Financial Officer, Universal Technical Institute, Inc. ..................................................................................................................................................................................................................................................................... OTHER PARTICIPANTS Mike Grondahl Analyst, Northland Securities, Inc. Rajiv Sharma Analyst, Texas Capital Securities Max Michaelis Analyst, Lake Street Capital Markets LLC Jasper Bibb Analyst, Truist Securities, Inc. Steven Frankel Analyst, Rosenblatt Securities, Inc. ..................................................................................................................................................................................................................................................................... MANAGEMENT DISCUSSION SECTION Operator : Good day, and welcome to the Universal Technical Institute Second Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Matt Kempton, Vice President of Corporate Finance and Investor Relations. Please go ahead. ..................................................................................................................................................................................................................................................................... Matt Kempton Vice President-Corporate Finance & Investor Relations, Universal Technical Institute, Inc. Hello, and welcome to Universal Technical Institute's fiscal second quarter 2026 earnings call. Joining me today are our CEO, Jerome Grant; and CFO, Bruce Schuman. Following our prepared remarks, we will open the call for your questions. A replay of this call, its transcript and our investor presentation and will be archived on the Investor Relations section of our website at investor.uti.edu along with our earnings release issued earlier today and furnished to the SEC. During this call, we may make comments that contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which by their nature, address matters that are in the future and are uncertain. These statements reflect management's current beliefs and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. These factors include, but are not limited to those discussed in our earnings release and SEC filings. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. We do not intend to update these forward-looking statements as a result of new information or future developments except as required by law. Please note, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of fiscal 2025. The information presented today also includes non-GAAP financial measures. These should be viewed in addition to and not as a substitute for the company's reported results prepared in accordance with US GAAP. All non-GAAP financial measures referenced in today's call are reconciled in our earnings press release to the most directly comparable GAAP measure. For more information regarding definitions of our non-GAAP measures, please see our earnings release, financial supplement and investor presentation. With that, I will turn the call over to Jerome Grant, CEO of Universal Technical Institute, for his prepared remarks. Jerome? ..................................................................................................................................................................................................................................................................... Jerome A. Grant Chief Executive Officer & Director, Universal Technical Institute, Inc. Thank you, Matt. Good afternoon, everyone, and thank you for joining us. Before I dive into the details of our second quarter results, I want to take a moment to give you some insight into how we're thinking about the business right now. The first half of the year has played out quite well and in some areas better than we originally anticipated. As always, a huge thank you to our team industry partners and over 26,000 active students for being a part of this and driving these strong outcomes. Let me tell you, demand is strong. Our model is working and we have exceptionally clear visibility into the returns on our strategic North Star investments. We're seeing increasing validation that these investments are driving the outcomes we expected. With that in mind, I'll walk you through our Q2 performance and execution, before I take you on the journey of opportunities ahead of us. And in a few minutes, our CFO, Bruce Schuman will dive deeper into our financials. Building on what's been a strong start to the year, we saw some key leading indicators come in at or above our expectations, further reinforcing our confidence in the trajectory of our business. We delivered yet another quarter of strong operational performance supported by sustained demand across both of our divisions and continued execution against our North Star strategy. Total new student starts increased 14% year-over-year in the quarter with meaningful contributions from both divisions. The UTI division delivered approximately 15% growth, while the Concorde division grew 13%, highlighting the consistency and durability of demand across both our trades and healthcare. Average full time active students grew 7%, reflecting continued momentum as we scale both new and existing campuses. [ph] Core (00:04:34) growth and program expansion performance translated into continued top line strength with revenue of $221 million, up nearly 7% year-over-year. Our baseline adjusted EBITDA came in at $25 million, including approximately $11 million of growth investments. Our reported adjusted EBITDA was just over $14 million, in line with expectations. Our performance in the first half of the year has reinforced our confidence in our full year outlook, and as such, we're reaffirming our guidance on all metrics. Bruce will walk you through the guidance in more detail shortly. We believe this reaffirmed strong outlook for 2026 reflects our confidence in the performance of the business, while also setting us up brilliantly for the final three years of this phase of our North Star strategy. It's not just the macro demand environment that gives us this confidence, but also how we're executing against a model that is proving to be both repeatable and scalable. Our campus launched playbook continues to deliver consistent results, and importantly, those results are trending in line or ahead of our expectations. At UTI San Antonio, which opened in March, each of the first two starts exceeded our plan by nearly 60%. Based on early performance, we now expect the campus to ramp to scale at or better than originally modeled with a projected mature run rate of approximately 800 students. In Atlanta, we're preparing to launch our first comprehensive UTI campus in the state. This campus is expected to serve over 1,500 students at scale. We're already seeing great traction with strong interest in early enrollments pacing well in preparation for the planned start in July. Although these are exciting results in 2026, more importantly, they are early leading indicators critical to ensuring the success of this multi-year strategy. They validate not only demand, but also our ability to execute faster and fill campuses more efficiently than originally modeled. Giving us increased confidence looking at our broader new campus pipeline. Looking ahead to fiscal 2027, we remain on track with our four previously announced locations across the country and are excited to see those launch next year. These campuses include a comprehensive UTI Campus in Salt Lake City, expected to serve 1,500 students as well as Concorde campuses in Houston, Atlanta and the Phoenix metro area, each with projected run rates of approximately 600 students. Throughout all of this, the North Star operational targets we'd previously outlined remain unchanged. We plan to open them a minimum of two and up to five new campuses annually, as well as launch 12 to 20 new programs across the UTI and Concorde divisions each fiscal year. In fiscal 2026, we'll have opened three new campuses and are on track to launch 20 new programs with at least 10 coming from each division. On the UTI side, we have two campuses and 12 programs lined up this year. The new programs span HVACR, Aviation Maintenance and our electrical suite, which includes industrial maintenance, robotics and automation and wind and turbine technology. Most recently, the UTI Sacramento campus graduated its first HVACR class in January, and the UTI Austin campus successfully delivered its first EV courses in February. On the Concorde side, we've opened one new campus, and across our existing campuses we'll launch at least 10 new programs in 2026, including high demand fields such as radiation technology, surgical technology and diagnostic medical scenography. Beyond program replications and new campuses, we're also continuing to focus on optimizing our existing footprint. As you may recall, we recently expanded the UTI Dallas campus to serve an additional 600 students and incorporate HVACR, aviation and electrical programs, in addition to auto, diesel and welding. Since launching last quarter, all of the program enrollments and starts have exceeded expectations and the second half of the year looks to be just as promising. In addition to expanding capacity for popular programs such as aviation and HVACR, welding and the dental hygiene at legacy campuses, we're increasing focused on how UTI and Concorde divisions can collaborate more closely across areas such as marketing, admissions and operations. Through cross-brand collaborations fueled by rapid AI technology advancements, we believe we can potentially unlock incremental margin expansion in the coming years while simultaneously enhancing execution across the company. And while on the topic of artificial intelligence, I want to focus on some extremely important opportunities ahead of us for our company. As many of you know from the stories in the media, each quarter as US jobs data is published, we are in the early stages of a generational shift in the labor market, driven in large part by artificial intelligence. The longstanding dynamic between white collar and skilled collar jobs opportunities has been disrupted. AI is reshaping the economy, but not only in the way many initially expected, as white collar work is becoming increasingly automated, especially at the entry levels, demand for trades and healthcare professions is accelerating. Beyond this shift, it's important to realize that there are also new AI enabling opportunities and roles essential to building, maintaining and operating the infrastructure that supports this new economy. From data centers and energy systems to advanced manufacturing and healthcare delivery, the physical and technical workforce required to support AI driven growth has expanded rapidly. This is exactly where we are positioned. We're not only training students for today's jobs, we're preparing them for the future AI-enabled workforce that's being built right now. Importantly, we believe that this trend is not cyclical, it's structural. We believe this dynamic will continue to drive demand for our programs for years to come. Supported by both powerful macroeconomic tailwinds and long-term partnerships, the opportunity in front of us continues to expand. We maintain strong relationships with leading industry partners, including for example, a nearly 30 year partnership with Porsche. This quarter we reached a memorable milestone with them, as of February, UTI is now graduated over a thousand technicians from the Porsche training centers which we run that are serving more than 200 porsche stores nationwide. We also recently announced a new three year partnership with Fuji Auto Spray (sic) [Fuji Spray Auto] (00:11:28), who will provide professional grade equipment for the collision, repair and aviation programs and the UTI campuses across the US. Longstanding industry partnerships are a cornerstone of the success of our graduates and our company, and we continue to pursue additional such opportunities across automotive, aviation, healthcare and other high demand industries. Similarly, we're actively exploring potential B2B opportunities with military programs, state workforce initiatives and employers to help address critical labor shortages across the economy. As we look ahead, our confidence in the business continues to strengthen as our North Star strategy moves into full implementation mode. We have built a durable and repeatable growth engine supported by strong demand, disciplined execution, a very healthy balance sheet and meaningful long-term macro tailwinds. Organically, we will continue to optimize our campuses and program portfolio, drive operational excellence and expand both capacity and program offerings to meet demand. At the same time, we'll continue to evaluate inorganic opportunities that align with our strategy, particularly in healthcare, where we see significant long-term potential. Our priorities remain focused on executing our North Star strategy with discipline, as well as deploying capital with purpose to position the divisions to deliver sustained growth and value. And we are already starting to discuss what 2029 and onwards looks like for the company. We will share more on that as our plans unfold. With that, I'll turn the call over to Bruce, our CFO, to review our second quarter financials and provide you with additional details on our guidance. Bruce? ..................................................................................................................................................................................................................................................................... Bruce Schuman Executive Vice President & Chief Financial Officer, Universal Technical Institute, Inc. Thank you, Jerome. I'll start by saying we're pleased with how the business has performed through the first half of the year. The results we're reporting today reflect a strong start to fiscal 2026 with solid revenue growth, continued momentum in enrollments and leading indicators across the business that remain very encouraging. In the second quarter, total average full-time active students grew 7.2% year-over-year to 26,385, while total new student starts increased 13.8% to 7,569. In line with the expectations we outlined last quarter and reflective of recently launched new campuses and programs starting to ramp. The Concorde division grew average full-time active students 10.2% year-over-year for the second quarter, driven by consistent demand trends across our dental and allied health programs. Within the UTI division average full-time active students grew 5.3% year-over-year, reflecting steady performance across the program portfolio, underpinned by strong demand and recently optimized campus capacity.

View stock analysis, news, and events for Universal Technical Institute Inc