Covista Raises FY2027 Outlook as Q1 Enrollment and Revenue Grow

Covista (NYSE: CVSA) raised its fiscal 2027 revenue and adjusted earnings outlook after first-quarter enrollment growth across all three business segments lifted revenue by 10.7% and adjusted earnings per share by 25.1%.

For the year, the healthcare education provider now expects revenue of $2.06 billion to $2.095 billion, representing approximate growth of 5.5% to 7%. Its previous range was $2.05 billion to $2.09 billion. Covista also increased its adjusted EPS forecast to $9.00 to $9.20 from $8.90 to $9.15, implying growth of about 9% to 11.5%.

Revenue for the fiscal first quarter ended September 30, 2026, rose to $511.5 million from $462.3 million a year earlier. Total enrollment increased 7.6% to 104,713, with growth at Chamberlain University, Walden University and the Medical and Veterinary segment.

Adjusted EBITDA advanced 17.1% to $131.2 million, while the adjusted EBITDA margin expanded 140 basis points to 25.6%, reflecting revenue growth and operating efficiencies. Adjusted EPS climbed to $2.19 from $1.75, partly supported by a year-over-year reduction of about 2.5 million in average diluted shares outstanding.

On a GAAP basis, net income rose 9% to $67.4 million, and diluted EPS increased to $1.95 from $1.67. GAAP operating income grew 14.7% to $98 million, with operating margin rising to 19.2% from 18.5%.

Walden leads enrollment and profit growth

Walden University remained the largest contributor to the quarter’s expansion. Revenue increased 14.1% to $216.7 million as enrollment rose 12.8% to a record 58,881 students, supported by healthcare and non-healthcare programs. Adjusted EBITDA grew 16.1% to $71.9 million, and the segment’s margin widened 60 basis points to 33.2%.

Covista said Walden has now recorded 13 consecutive quarters of year-over-year total enrollment growth. Programs introduced ahead of the 2026 academic year have enrolled more than 2,000 students, and the university launched four additional programs during the quarter.

Chamberlain University’s revenue rose 7.4% to $192.4 million, while enrollment increased 1.3% to 40,351, driven by pre-licensure nursing. Adjusted EBITDA gained 7.1% to $37.6 million, but the margin edged down 10 basis points to 19.5% as investments in marketing and strategic growth initiatives offset operating leverage from higher revenue.

Chamberlain opened campuses in Cincinnati and Salt Lake City during the quarter. A 27th campus in Nashville is expected to begin classes in January 2027. The university also opened a second physician assistant program in Phoenix at full capacity.

The Medical and Veterinary segment reported revenue of $102.5 million, up 10%, as enrollment grew 3.5% to 5,481 across both medical and veterinary programs. Adjusted EBITDA increased 27.9% to $27.4 million, and the margin expanded 370 basis points to 26.7% on revenue growth and operating efficiencies.

Cash flow supports campus investment and buybacks

Trailing 12-month operating cash flow was $454.4 million, while capital expenditures totaled $99.3 million, resulting in non-GAAP free cash flow of $355.2 million. Free cash flow was up 11% from the comparable prior-year period despite higher growth-related spending on new campuses.

Covista repurchased $84 million of shares during the quarter. The company had $578 million remaining under its $750 million authorization and reported a non-GAAP net leverage ratio of 0.5 times as of September 30.

For fiscal 2027, management expects adjusted EBITDA margin expansion of zero to 50 basis points, supported by operational efficiencies. Capital spending is expected to run slightly above the annualized fourth-quarter fiscal 2026 level and to be higher in the first half of fiscal 2027 than in the second half.

The outlook also incorporates the shift of one Walden academic week from the second quarter into the third quarter, which Covista said will have no net effect on full-year results. The company cautioned that its guidance and growth expectations are forward-looking and subject to risks and uncertainties that could cause actual performance to differ materially.