Vocational education Universal Technical Institute (NYSE:UTI) announced better-than-expected revenue in Q1 CY2025, with sales up 12.6% year on year to $207.4 million. The company’s full-year revenue guidance of $830 million at the midpoint came in 2% above analysts’ estimates. Its GAAP profit of $0.21 per share was 72.6% above analysts’ consensus estimates.
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Revenue: $207.4 million vs analyst estimates of $201.7 million (12.6% year-on-year growth, 2.8% beat)
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EPS (GAAP): $0.21 vs analyst estimates of $0.12 (72.6% beat)
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Adjusted EBITDA: $28.9 million vs analyst estimates of $22.09 million (13.9% margin, 30.8% beat)
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The company lifted its revenue guidance for the full year to $830 million at the midpoint from $815 million, a 1.8% increase
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EPS (GAAP) guidance for the full year is $1.04 at the midpoint, beating analyst estimates by 4.3%
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EBITDA guidance for the full year is $126 million at the midpoint, above analyst estimates of $123.5 million
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Operating Margin: 8.1%, up from 6.1% in the same quarter last year
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Free Cash Flow was -$11.74 million compared to -$8.4 million in the same quarter last year
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New Students: 6,650, up 1,170 year on year
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Market Capitalization: $1.78 billion
Universal Technical Institute delivered results above Wall Street’s expectations in Q1, propelled by strong demand for skilled trades and healthcare programs. CEO Jerome Grant attributed the quarter’s performance to ongoing marketing investments, expansion of in-demand program offerings, and effective admissions strategies, especially in the Concorde division. Grant emphasized that the company’s focus on operational discipline and a favorable labor market for graduates helped drive both revenue and margin expansion.
Looking ahead, management highlighted the company’s continued commitment to growth through new campus openings, program launches, and investment in technology infrastructure. Grant noted the importance of ongoing regulatory dialogue and said, “Our expansion plans remain firmly on track, and depending on how circumstances evolve, we may actually be positioned to accelerate the growth of our Concorde and UTI divisions.” CFO Bruce Schuman underscored that strategic investments in campus build-outs and program expansions will drive long-term growth, though they may moderate near-term margin improvement.
Universal Technical Institute’s management identified surging demand for skilled trades and healthcare education as key factors behind the quarter’s above-consensus performance. The company’s multi-year strategy to diversify its program portfolio and expand geographically is central to sustaining this momentum.
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Marketing and Admissions Investments: Enhanced marketing and admissions efforts in the Concorde division resulted in higher lead conversion and new student enrollment, particularly in clinical healthcare programs.
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Skilled Trades Expansion: The addition of new skilled trades programs, such as HVACR and Electrical Electronics and Industrial Technology (EEIT), at UTI campuses is attracting more adult learners and driving faster-than-expected enrollment growth.
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Campus and Program Growth: Management detailed ongoing campus expansions, including the planned opening of a new co-branded Heartland Dental campus in Florida and a skilled trades-focused campus in San Antonio, signaling a push to serve broader workforce needs.
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Leadership Changes: The company appointed Bruce Schuman as CFO and Todd Hitchcock as COO, strengthening operational oversight and aligning leadership for the next phase of strategic growth.
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Regulatory and Industry Tailwinds: Grant described favorable regulatory engagement and a societal shift toward valuing skilled trades over traditional four-year degrees, both of which are supporting enrollment and employer demand for graduates.
Management’s outlook for the rest of the year is shaped by sustained demand for skilled trades and healthcare workers, alongside investments in new programs and campus infrastructure.
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Program Portfolio Diversification: Continued expansion into high-demand trades and healthcare fields is expected to drive steady enrollment growth and broaden the student base.
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Strategic Capital Investments: Planned investments in new campuses and technology platforms may temporarily limit margin expansion in 2026 and 2027, but management expects these moves to support accelerated growth and operating leverage beyond 2028.
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Regulatory and Market Conditions: The company sees minimal risk from tariffs but will monitor for any regulatory changes. Management believes ongoing labor shortages in key sectors and positive policy trends will remain supportive, though shifts in the macroeconomic environment could pose risks.
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Mike Grondahl (Northland Securities): Asked which programs or campuses contributed most to strong new student starts. Management credited increased marketing on the healthcare side and cited skilled trades as outperforming initial expectations.
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Jasper Bibb (Truist): Inquired about enrollment growth distribution between UTI and Concorde for the second half and the impact of recent investments on EBITDA growth rates. Management noted high school-driven enrollment seasonality and signaled increased investment would temporarily moderate EBITDA growth.
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Bruce Goldfarb (Lake Street Capital): Queried trends in employer demand for graduates and the level of M&A activity. Management reported robust demand in both transportation and healthcare sectors, with M&A opportunities somewhat reduced compared to prior periods.
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Griffin Boss (B. Riley): Sought details on the mix of operating versus capital expenditures driving EBITDA trends in 2026 and 2027. CFO Bruce Schuman highlighted significant growth OpEx and CapEx targeted toward program and campus expansion.
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Raj Sharma (Texas Capital Bank): Asked if higher enrollment was due to marketing or macroeconomic factors and probed on military enrollment and Concorde growth restrictions. Management attributed gains primarily to marketing and execution, with military outreach and regulatory developments also playing roles.
Over the next few quarters, the StockStory team will be watching (1) the pace of new campus and program rollouts, especially in skilled trades and healthcare, (2) the impact of ongoing marketing and technology investments on student enrollment and retention, and (3) any changes in regulatory policy or macroeconomic conditions that could alter labor market dynamics. Execution on planned expansions and the ability to maintain enrollment momentum will be key signposts.
Universal Technical Institute currently trades at a forward EV-to-EBITDA ratio of 14.8×. Should you load up, cash out, or stay put? See for yourself in our free research report.
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