Higher education company Laureate Education (NASDAQ: LAUR) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 27.9% year on year to $541.4 million. The company’s full-year revenue guidance of $1.90 billion at the midpoint came in 2.2% above analysts’ estimates. Its non-GAAP profit of $1.15 per share was 45.3% above analysts’ consensus estimates.

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StockStory’s Take

Laureate Education’s fourth quarter reflected strong execution on strategic initiatives, with management highlighting robust student enrollment growth and a continued shift toward online programs as core drivers of performance. The company’s focus on scaling operations in Mexico and Peru, alongside targeted investments in new campus facilities and health science offerings, contributed to improved operating margins. CEO Eilif Serck-Hanssen pointed to the expansion of Laureate’s online education capabilities and the launch of new campuses as key pillars supporting both top-line growth and improved academic outcomes.

Looking ahead, Laureate Education’s guidance is shaped by expectations of continued student growth, further expansion of fully online programs, and disciplined investment in new campus infrastructure. Management sees opportunity in leveraging AI tools to enhance student retention and learning outcomes, while also anticipating stable tuition pricing aligned with inflation. CFO Richard Buskirk emphasized that the company expects margin expansion despite increased costs from campus openings, and that favorable foreign currency trends could provide additional support to reported results in the coming year.

Key Insights from Management’s Remarks

Management attributed the quarter’s outperformance to the combination of enrollment growth, expanded online offerings, and productivity initiatives in both key markets.

• Enrollment momentum in key markets: Management cited rising participation rates in both Mexico and Peru, with total enrollments up driven by strong demand for higher education options tailored to workforce needs.
• Online programs scaling rapidly: The company’s fully online offerings, especially those designed for working adults, saw continued robust growth. Management emphasized this segment’s role in expanding Laureate’s addressable market and reducing geographic limitations.
• Health sciences portfolio investment: Laureate opened a new medical school and veterinary school, addressing long-term demand trends in health professions. These additions have positioned the company to capture more value from high-demand academic fields.
• New campus launches on track: Two new campuses—one in Monterrey, Mexico and another in Lima, Peru—opened on schedule and performed in line with expectations. Management noted that future campus projects are already in the planning phase to alleviate capacity constraints in Peru.
• Productivity and margin gains: The company delivered margin expansion through operating leverage and cost discipline, supported by digital transformation initiatives in both academic delivery and administrative functions.

Drivers of Future Performance

Laureate’s outlook centers on continued enrollment growth, further expansion of digital education, and disciplined capacity expansion to meet demand.

• Digital education investments: Management plans to deepen investment in AI-enabled tools for both online and campus-based students, aiming to enhance academic outcomes and operational efficiency. These technologies are expected to support retention and reduce instructional costs over time.
• Capacity expansion in Peru: New campus projects are intended to relieve enrollment constraints and support ongoing growth in the face-to-face segment, with management noting that additional sites are already being procured for future launches.
• Macroeconomic and regulatory factors: Management acknowledged that economic softness in Mexico and ongoing USMCA trade negotiations may temper near-term growth, but expressed confidence that improving conditions later in the year and into 2027 will provide a more supportive environment for investments and student demand.

Catalysts in Upcoming Quarters

As we look toward the next few quarters, our analysts will be monitoring (1) the pace at which Laureate can alleviate campus capacity constraints in Peru through new site launches, (2) the adoption and impact of AI-enabled digital tools on student outcomes and operational efficiency, and (3) the macroeconomic environment in Mexico, especially in relation to USMCA trade developments. The company’s execution on expanding online offerings and managing cost discipline will also be important markers of progress.

Laureate Education currently trades at $34.01, down from $35.10 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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