Thank you, Operator. Good afternoon, everyone, and thank you for joining us for our second quarter 2026 earnings call. With me on the call today is Todd Nelson, President and Chief Executive Officer, and Ashish Gia, Chief Financial Officer. This conference call is being webcast live within the Investor Relations section of the company's website at prodosioed.com. A webcast replay will also be available on our site for 90 days following the call, and you can always contact the Alpha IR Group for Investor Relations support. Let me remind you that this afternoon's earnings release and remarks made today include forward looking statements as defined in Section 21E of the Securities Exchange Act of 1934 as amended. These statements are based on assumptions made by and information currently available to Pradocio Education Corporation and involve risks, uncertainties that cause actual future results, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these forward looking statements. These risks and uncertainties include but are not limited to those factors identified in Prodocio's most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission, except as expressly required by the securities laws, the company undertakes no obligation to update those factors or any forward-looking statements to reflect future events, developments, or changed circumstances, or for any other reason. In addition, today's remarks refer to non-GAAP financial measures, which are intended to supplement but not substitute for the most directly comparable gap measures. The earnings release that accompanies today's call contains financial and other quantitative information to be discussed today, as well as the reconciliation of the gap to non-gap financial measures and is available within the investor relations page of the company's website. With that, I'd like to turn the call over to Todd Nelson. Todd?
Thank you, Nick. Good afternoon, everyone, and thank you for joining us for our second quarter 2026 earnings call. Our portfolio of academic institutions performed well during the second quarter and remain committed to supporting adult learners by offering flexible education pathways that help working professionals grow in their careers, while also training and educating the healthcare workforce to provide quality medical care across communities nationwide. CTU and AIUS continue to serve a broad population of career-minded students through fully online and hybrid programs, while the University of St. Augustine for Health Sciences prepares graduate-level health science professionals in physical therapy, occupational therapy, speech, language, pathology, and nursing. I'll start by discussing some key highlights for the second quarter. Ashish will then provide more details on our operating and financial performance and discuss the third quarter and full-year 2026 outlook. As always, I want to thank our faculty, student support staff, and employees across the organization for their continued dedication and hard work in serving and educating our students. Operating performance at our academic institutions has been ahead of our expectation for the first half of 2026, with year-to-date operating income growth of 14.4 percent supported by revenue growth of 3 percent. Net income for the second quarter was 48 million dollars or 75 cents per diluted share as compared to 41 million dollars or 62 cents per diluted share in the prior year quarter our academic institutions continue to operate with disciplined expense management while making purposeful investments across academics program development technology and student support teams with that context here are a few additional highlights for the quarter total student enrollments grew just under one percent at the end of the second quarter excluding trident university which is a part of aius all of our academic institutions experienced enrollment growth supported by strong retention trends and healthy level of prospective students looking to pursue a degree at one of our academic institutions asheesh will explain these enrollment trends in more detail. The shift from traditional internet search engines to LLM-based AI-powered search is changing how prospective students research and evaluate their education options. However, our analysis indicates a majority of our prospective student inquiries come from channels that are not directly impacted by this trend. In response to increased prospective student interest, we are growing our investment in those channels not impacted while selectively leveraging generative artificial intelligence to identify and engage prospective students who we believe are more likely to succeed at one of our academic institutions. As a result, while we are seeing some shift in prospective student behavior as AI-powered search grows, the overall impact on enrollment has been modest thus far. We remain focused on keeping our programs visible and accessible as search behavior evolves, actively updating our content so that it is readily accessible to and optimized by AI-powered search while investing in our brands to strengthen the visibility of our academic institutions as these AI engines continue to shape discovery. Through our corporate student programs, we provide accredited degree programs to employees of our partner organizations, supporting their career advancements while helping corporate partners strengthen employee development and retention. Total enrollment for the corporate student programs at CTU and AIUS continue to grow, and this remains a priority as we continue to make strategic investments in technology and personnel to support future enrollment growth. Our capital allocation decisions during the year highlight, amongst other priorities, our continued commitment to returning capital to shareholders. In line with our broader strategy, on August 6th, the Board authorized an increase to our quarterly dividend from $0.15 to $0.17 per share, the third such increase since the dividend payments were initiated in 2023. This reflects our commitment to making dividends a growing and integral part of our capital allocation strategy. Before I pass the call to Ashish, I'd like to take a moment to highlight the successful acquisition and integration of the University of St. Augustine for Health Sciences. We completed the acquisition in 2024 and currently have approximately 4,200 students enrolled at the university. Since the acquisition, St. Augustine has expanded several of its program offerings as it introduced new modalities at existing campus locations, giving prospective students greater flexibility in how they pursue a degree. We believe the university is on track to have strong revenue and adjust to the operating income for the full year of 2026 with further growth expected in 2027. Our success with acquisitions over the past few years, we believe, reflects a capability we have now built, the ability to extend the depth and breadth of our program offerings by acquiring and integrating academic institutions while maintaining their value proposition and creating long-term value. Consistent with our capital allocation strategy, we are evaluating a creative acquisition opportunities to complement our organic growth, and we are very encouraged with our ongoing dialogue with a range of academic institutions across our various programmatic areas of focus, including health sciences. With proven integration capabilities, a strong balance sheet, and disciplined approach to capital allocation, we will act when the right opportunity emerges. In summary, with our academic institution's solid operating results this quarter, we remain optimistic as we move through the remainder of 2026. Ashish will now provide more details on the financial results of our 2026 outlook and total student enrollment trends. Ashish?
Thank you, Todd. I will review the second quarter results and then discuss our balance sheet as well as the third quarter and full year 2026 outlook before handing the call back to Todd for his closing remarks. Please note all comparisons discussed on this call are versus the comparative prior year period unless otherwise stated. In addition, total student enrollment numbers and any referenced student enrollment trends discussed during this call do not include learners pursuing non-degree-seeking and professional development programs and degree-seeking non-Title IV self-paced programs at our universities. Turning to the second quarter, net income for the quarter was $48 million or 75 cents per diluted share as compared to $41 million or 62 cents per diluted share. second quarter revenue increased 1.8 percent to 213.4 million dollars with year-to-date revenue now up three percent as compared to the prior year-to-date operating leverage remains strong as we continue to reinvest a portion of revenue growth in marketing admissions and various student support processes while maintaining disciplined cost management operating income for the quarter grew by 6.8% to $54.9 million, while adjusted operating income, which we believe is more indicative of the underlying operating performance and excludes depreciation and amortization, grew 4.4% to $64.2 million as compared to $61.5 million, resulting in an adjusted earnings per diluted share of $0.80, an increase of 19.4%. From an operations perspective, both CTU and AIU system continued to invest in marketing and admissions to serve the interests from prospective students for their academic programs, while retention levels trended near multi-year highs. These institutions also continued to explore and deploy technology, including AI-based tools designed to strengthen academic outcomes and improve the overall student experience. University of St. Augustine for Health Sciences continue to expand its program offerings through introduction of new modalities at existing campus locations, giving prospective students more flexibility in how they pursue a degree. St. Augustine prepares healthcare practitioners through a combination of on-ground and online offerings, and its selective admissions process generally requiring prospective students to hold an undergraduate degree and complete a comprehensive application admissions process has allowed them to maintain strong academic outcomes and student experiences. As of June 30th, total student enrollments increased by 0.7 percent as compared to the prior year quarter. At CTU, total student enrollments grew 0.6 percent to 32,110 students, an eleventh consecutive quarter of growth, and revenue rose 0.9 percent to $115.5 million, resulting in year-to-date revenue growth of 2.5%. On year-over-year enrollment comparability, please note that CTU will continue to lapse strong record quarters from last year, while also graduating a record number of students in 2026 relative to 2025. These trends should peak in the second half of the year before normalizing in 2027. As a result, while second-half reported enrollments may trend lower as compared to the prior year, we remain encouraged by sustained strength in student retention, ongoing expansion of the corporate student program, and increasing levels of prospective student interest, trends that we believe will continue to support the long-term enrollment growth at CTU. From an operating income perspective, we have continued to reinvest revenue growth into marketing and other student support functions in a disciplined way, and we expect these investments to support long-term growth while further enhancing academic outcomes and student experiences. Additionally, we have made intentional investments in marketing channels that we believe will strengthen brand awareness and visibility, and we also continue to refine our use of AI to more effectively recruit and engage with prospective students. Legal fees at CTU related to previously discussed legal matters, which are not reflective of underlying organic growth, have trended higher as compared to the prior year. Excluding this year-to-date increase in legal fees, both quarter and year-to-date operating income at CTU would have increased versus the prior year, highlighting our balanced approach towards growth-related investments. Now to AIU system. Total student enrollments at AIU system decreased 1%. This decline was expected and primarily due to lower enrollments at Trident University, a part of AIU system. Excluding Trident, AIU system total student enrollments would have increased versus the prior year quarter, despite the academic calendar-driven variability that resulted in lower enrollment days in the first half of the year. Please note that in addition to underlying trends in student retention and engagement, the academic calendar and the number of enrollment days in any given quarter will continue to impact quarterly enrollment comparability at AIUS. With that in mind, we expect AI system to report strong total student enrollment growth in the third quarter, then turn lower in the fourth quarter before rebounding in the first quarter of 2027. While the academic session calendar will impact quarterly enrollment comparability, we expect operating income to grow for the full year. And setting aside this calendar-driven variability, our underlying organic growth trends, namely student retention and interest from prospective students remain strong. AI system continues to invest in marketing and student support functions and will also launch new AI focused programs this fall. Second quarter revenue at AI system decreased 1.8 percent to 57.2 million dollars while operating income increased 9.7 percent to 12.6 million dollars. The revenue decrease was primarily from our non-Title IV and professional development offerings that we continue to optimize. Excluding those, revenue for the year to date would have increased as compared to the prior year, again reflecting underlying organic growth at AIU. As Todd noted, the University of St. Augustine for Health Sciences delivered strong performance this quarter. Reported total student enrollments increased 6% to approximately 4,200 students, and revenue rose 10.2% to $40.5 million, supported by strong execution, brand recognition, and new program launches. Increase in total student enrollments from the prior year was primarily a result of growth in programs such as nursing and speech-language pathology, as well as the introduction of new modalities for the occupational therapy program. The enrollment pipeline for the upcoming fall term, which is traditionally the biggest term of the year, looks strong. Adjusted operating income increased to $10.7 million as compared to an adjusted operating income of $5.5 million in the prior year quarter. The improvement reflected continued enrollment and revenue growth combined with operating leverage as the university continued to scale its operations. With growth in enrollments supported by ongoing expansion of their program offerings through the introduction of new modalities and program versions at current campus locations, as well as consistently high student retention trends, we believe that St. Augustine will meaningfully contribute to the overall revenue and adjusted operating income growth for 2026 and is expected to further grow into 2027. Moving on to corporate and other operating losses for the quarter were 5.9 million dollars as compared to 5.2 million dollars in the prior year turning to income taxes for the second quarter we recorded a provision for income tax of 12.2 million dollars resulting in an effective tax rate of 20.3 percent the tax effects of stock-based compensation and the release of previously recorded tax results reduced the effective tax rate by 0.4 percent and 1.1 percent respectively. Additionally, the rate was positively impacted by 5.8 percent due to the resolution of a state income tax matter. Commensurately, we expect that for the full year 2026, our effective tax rate will be between 23 percent and 24 percent. This includes an estimated benefit for the tax effect of stock-based compensation and the release of previously recorded tax reserves for uncertain tax positions. And from a cash perspective, for 2026, we estimate our cash paid for income taxes to be in the range of 20% to 24% of fee tax income. Turning now to our balance sheet and liquidity position. For the first half, net cash flows provided by operations were $144 million versus $143.9 million the prior year period. Timing of title for drawdowns and working capital mostly offset the increase in cash flows from a year-over-year improvement in adjusted operating income we ended the quarter with 334.8 million dollars in cash cash equivalents restricted cash and available for sale short-term investments we represents an increase of approximately ninety one point three million dollars from our prior year-end position. Uses of cash during the first half were $19.7 million of dividend and dividend equivalent payments, $10.3 million for share repurchases in connection with the payment of taxes due by employees upon stock westing, $15 million return of capital to shareholders in the form of stock repurchases, and $3.3 million of capital expenditures. For full year 2026, we expect capital expenditures to be approximately 1% of revenues. Before turning to our 2026 outlook, let me take a minute to discuss our balanced and consistent approach to capital allocation. We are pleased to announce that consistent with our dividend policy and continued confidence in our long-term outlook, the Board of Directors approved a 13.3% increase to a quarterly dividend payment to $0.17 per share, payable on September 10, 2026, to the holders of record of Pradocio's common stock at the close of business on September 1, 2026. Future quarterly dividend payments are expected to be paid out of free cash flows for the relevant year, subject to board approval and the company's available retained earnings, financial condition, and other relevant factors. Subject to the requirements just mentioned, we continue to expect that quarterly dividend payments will remain an integral and growing component of our balance allocation capital allocation strategy and in line with the most recent board decision we generally expect to review quarterly dividend amounts on an annual basis during the quarter we repurchase 0.2 million shares of our common stock for 6.8 million dollars and an average price of 34.19 cents per share bringing our year-to-date purchase to 0.4 million shares for approximately 15 million dollars We anticipate utilizing the remaining $85 million of our authorized share repurchase program over time, subject to market conditions, organic and inorganic investment opportunities, share valuation, and other factors that guide our disciplined approach to capital allocation. Let us now discuss our outlook for 2026. We now expect the full year 2026 adjusted operating income to range between $258 million and $263 million. This compares to an adjusted operating income of $237.6 million in 2025, with the expected increase primarily due to assumptions for organic revenue growth across our academic institutions, while lower operating expenses in certain categories should offset investments in marketing, academics, and other student support processes. Our outlook range includes the impact of incremental legal fees, and without these incremental costs, the range would have been even higher. Adjusted earnings for deluded share are expected to be between $3.10 and $3.16 versus $2.61 in 2025, a 19.9% increase at the midpoint. As a reminder, GAAP and adjusted EPS calculations include incremental expenses related to depreciation in finance leases for St. Augustine. While these expenses are excluded for the purpose of adjusted operating income, they are part of the adjusted EPS calculations. This outlook reflects our current belief that the consistent high levels of student retention and student engagement that we experience in 2025 will continue through 2026. Prospective student interest in our academic programs will continue to remain at current levels in part supported by incremental marketing investments in brand awareness and visibility. Any changes to the regulatory or legislative environment will not have a meaningful impact on prospective student interest or necessitate any operational changes. Legal fees related to litigation matters remain in line with the company's current expectations and there will not be a material impact on student enrollments due to the elimination of of the Grad Plus Loan program, the new annual and lifetime graduate loan limits, or their ability to finance their education through private lending sources. Full year revenue is expected to increase versus 2025, supported by the rollout of new program modalities within physical and occupational therapy at St. Augustine and continued organic growth at CTU and AIU. At St. Augustine, we expect revenue and total student enrollment growth each quarter resulting in double-digit adjusted operating income growth for the full year. At AIU System, while the academic session calendar will impact quarterly enrollment comparability, we expect operating income to grow for the full year, supported by strong student retention and engagement, and continued investment in marketing and admissions. Supporting our organic growth expectations at CTU are strong levels of prospective student interest in its academic programs, ongoing growth in corporate student program, and investments in marketing, as well as the corporate student program. Partially offsetting these growth trends will be a record number of students expected to graduate in 2026 at CTU, lasting strong enrollment growth from previous quarters, and the increased legal fees related to previously discussed legal matters. For the third quarter of 2026, we expect adjusted operating income to be in the range of $64 million to $65 million as compared to $61 million in the prior year quarter with adjusted earnings per diluted share to range between 73 cents and 74 cents per diluted share versus 65 cents in the third quarter of 2025. Our 2020 outlook also assumes continued investments in technology, data analytics, real estate, academics, and student support processes. We believe these investments have supported improved academic outcomes and enhanced student experiences in addition we plan to continue expanding the corporate student program teams at ctu and ai system to support further growth and engagement please refer to our earnings release file today for important information about key assumptions and factors underlying this discussion from today's call as well as the gap to non-gap reconcilations with that i'll turn the call over to todd for his closing remarks todd Thank you, Ashish.
