Covista (CVSA) 2027 財年第一季業績電話會議：上調財測指引

重點摘要

• 2027 財年第一季營收年增 10.7% 至 5.115 億美元，得益於三大營運部門的全面成長。
• 總招生人數成長 7.6% 至近 105,000 名學生，標誌著 Covista 連續第 13 個季度實現招生人數成長。
• 調整後 EBITDA 成長 17.1% 至 1.312 億美元，調整後 EBITDA 利潤率擴張 140 個基點至 25.6%。
• 調整後 EPS 上升 25.1% 至 2.19 美元，得益於獲利提升、流通股數減少及利息費用下降。
• 管理層上調 2027 財年營收指引至 20.6 億至 20.95 億美元，並將調整後 EPS 指引上調至 9.00 至 9.20 美元。
• Covista 在本季回購了 8,400 萬美元的股票，同時繼續以營運現金流資助新校區、新課程與技術發展。

核心財務數據

平均稀釋後股數年減約 250 萬股至 3,460 萬股。利息費用從 1,110 萬美元降至 990 萬美元。

Covista 以平均每股 127.63 美元的價格回購了約 66 萬股，總計 8,400 萬美元。在 7.5 億美元的授權額度中，該公司仍有 5.78 億美元剩餘額度。

業務與營運表現

Walden

Walden 仍是最大成長貢獻來源。營收成長 14.1% 至 2.167 億美元，總招生人數成長 12.8% 至近 59,000 人，創下該大學歷史新高。

招生人數現已連續 13 個季度成長，其中包括連續 10 個季度雙位數成長。調整後 EBITDA 成長 16.1% 至 7,190 萬美元，利潤率擴張 60 個基點至 33.2%。

管理層指出各學位級別表現廣泛強勁，特別是博士與學士課程。在強勁的學生留存率以及「Your Career, Our Job」行銷活動支援下，學士課程招生人數增長超過 20%。

Chamberlain

Chamberlain 營收成長 7.4% 至 1.924 億美元。總招生人數成長 1.3% 至 40,000 多名學生，標誌著連續第三個季度成長。

執照前 BSN 招生人數成長 13.2%，連續第 17 個季度成長。營收亦得益於每位學生修習學分數增加、課程組合改善及定價提升。

調整後 EBITDA 成長 7.1% 至 3,760 萬美元，利潤率大致穩定在 19.5%。業績中包含約 300 萬美元的新校區成本。管理層表示，若扣除這些成本，調整後 EBITDA 本應增長近 16% 至 4,060 萬美元。

辛辛那提校區於 8 月啟用，鹽湖城校區在本季開課，納許維爾校區預計於 1 月啟用。Chamberlain 還在鳳凰城開設了第二個醫師助理課程，且已被報滿。

醫療與獸醫部門

部門營收成長 10% 至 1.025 億美元，招生人數成長 3.5%。調整後 EBITDA 大幅成長 27.9% 至 2,740 萬美元，利潤率擴張 370 個基點至 26.7%。

管理層表示，在聯邦貸款計畫變更前，部分學生選擇透過 5 月入學提前開課，導致 9 月班級人數減少。因此，該公司將 5 月和 9 月的入學週期合併看待。管理層預期貸款政策變更不會影響長期需求，儘管部分學生與家長在評估融資方案時仍持觀望態度。

雇主合作夥伴關係與技術

Covista 已在威斯康辛州展開與 Advocate Health 的合作，並計劃擴展至芝加哥地區的所有三個 Chamberlain 校區。該公司亦調升了與 SSM Health 合作夥伴關係下的招生目標。

管理層表示，這些合作安排能為醫療體系提供專屬人才庫，降低 Covista 的招生成本，並為學生提供額外的財務支持。

Covista 的 AI 智慧教室已從原型階段邁入開發與測試階段。該公司亦密切關注 Chamberlain 與 Walden 在大型語言模型搜尋結果中的呈現情況。管理層指出，迄今該轉變未對諮詢量、申請量或新招生人數造成重大阻礙。

管理層指引

管理層將指引調升歸因於第一季業績超越內部預期，但對剩餘三個季度仍保持審慎態度。

隨著對校區容量與技術的投資，該公司預期資本支出將維持在高於 2026 財年的水準，支出將集中在上半年。Covista 亦繼續預期調整後有效稅率將高於 2026 財年。

與去年相比，Walden 正常化的學術日曆將把約 1,800 萬美元的營收與調整後 EBITDA 從第二季移至第三季。管理層預期這將對第二季的年成長造成壓力，並有利於第三季，對全年無影響。

風險與關注領域

• Chamberlain 1.3% 的招生人數成長略低於管理層預期，主因是 9 月返校的舊生較少，且取得執照後的 RN 轉 BSN 課程依然疲軟。
• 在新建校區產生顯著招生收益之前，隨著 Covista 提前投資，新校區費用預期將有所增加。
• 聯邦貸款計畫的變更導致醫療與獸醫部門的招生時間出現轉移，並使部分意向學生及家長對融資方案有所猶豫。
• Walden 學術日曆的正常化將導致營收、調整後 EBITDA 及利潤率出現顯著的季度波動。
• 向 AI 搜尋轉變可能會改變學生的搜尋與獲取模式，但管理層表示迄今尚未影響招生指標。
• 財務長 Robert Phelan 計劃在繼任者任命後退休。Covista 表示正在積極展開遴選，Phelan 將留任至交接完成。

分析師問答亮點

管理層表示，第一季調整後 EPS 表現並非反映費用遞延至後續季度。獲利改善主要由強於預期的營收所推動，同時公司在此期間亦進行了額外投資。

針對 Chamberlain，管理層預期未來幾個季度招生人數成長將會改善。執照前 BSN 預計仍將是主要成長引擎，並獲得學生留存率計畫以及旨在提升 RN 轉 BSN 定價競爭力之改動的支援。

管理層警告切勿將第一季 140 個基點的利潤率擴張年化計算。由於校區投資及 Walden 的季度日曆效應，全年調整後 EBITDA 利潤率擴張目標仍維持在 0-50 個基點。

每生平均營收得益於課程組合、定價以及學分數增加的綜合效益。管理層亦表示，應收帳款的增加與營收成長大致吻合，儘管百分比上略高一些。

完整法說會逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Greetings, and welcome to the Covista Fiscal First Quarter 2027 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Jeremy Cohen, Vice President of Investor Relations.

Jeremy Cohen

Good afternoon, and welcome to Covista's earnings call for the first quarter of fiscal year 2027. On the call with me today are Steve Beard, Chairman and Chief Executive Officer of Covista; and Bob Phelan, Chief Financial Officer.

Before I hand you over to Steve, I will take you through the legal safe harbor and cautionary declarations.

Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on our current market, competitive and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We undertake no obligation to update publicly any forward-looking statement after this presentation, whether because of new information, future events, changes in assumptions or otherwise. Please see our latest Form 10-K for a discussion of risk factors as they relate to forward-looking statements.

In today's presentation, we will use certain non-GAAP financial measures, and we refer you to the appendix in the presentation materials available on our Investor Relations website for reconciliations to the most directly comparable GAAP financial measures and related information.

You will find a link to the webcast on our Investor Relations website at investors.covista.com. After this call, the presentation and webcast will be archived on the website for 30 days. I will now hand you over to Steve.

Stephen Beard

Thanks, Jeremy. Good afternoon, everyone, and thank you for joining us. Four weeks ago, in my letter to shareholders, I said we'd explain our economics plainly, so I'll start there. We're running ahead of the fiscal 2027 guidance we set, and that bodes well for our Purpose at Scale growth strategy. Today, we serve nearly 105,000 students, up 7.6% from a year ago and our 13th consecutive quarter of total enrollment growth. In the first quarter, revenue grew 10.7% to $512 million. Adjusted EBITDA grew 17.1% to $131 million and adjusted earnings per share grew 25.1% to $2.19 per share.

Our role for capital is simple. $1 stays in the business only if it earns more there than it would in your hands. This quarter, we repurchased $84 million of stock and funded new campuses, programs and technology from operating cash. That performance ran ahead of our plan, and we're raising our fiscal 2027 guidance for both revenue and adjusted earnings per share. We're taking a prudent view of the remaining quarters, and we'll update you as the year progresses.

The demand backdrop underpinning Purpose at Scale is durable. We see no reduction in demand for health care workers, from employers or from the talent who wants to choose these purposeful careers. Recent analysis shows that health care accounted for about 3 out of every 4 U.S. jobs created over the past year. That dynamic is highly encouraging for our business model, but what deserves more attention is the human toll of health care jobs going unfilled.

Recently, we published the Covista Healthcare Workforce Index. The analysis projects that without action, the health care workforce shortage is on track to nearly double by 2040. Yet the data also shows that investment in attracting, developing and retaining talent could close over half of that gap by 2040. In our view, talent isn't scarce. American nursing schools turned away roughly 93,000 qualified applications last year, and about 30,000 more applicants were turned away from U.S. medical schools. They weren't turned away for a lack of ability, but for a lack of faculty, clinical site availability and lack of space from caps written into state and accreditor policy. The binding constraint here is capacity, not interest.

Through Purpose at Scale, we're attracting and developing more future clinicians and partnering with leading health systems to keep them. Three things make this franchise durable. About 90% of our students study health care where the demand is driven by licensure and patient need. The constraint in our market is capacity, and we fund ours from operating cash at 0.5x net leverage. And a significant portion of our students now arrive through employers who help pay for their education.

Now let me turn to the segments, starting with Chamberlain. Total enrollment grew 1.3%, our third straight quarter of growth, and revenue grew 7.4%. The difference between the 2 is threefold: better mix, more credit hours per student and pricing. Total enrollment growth was led by pre-licensure BSN and application growth remains strong heading into our November session. As you know, no university confers more nursing degrees than Chamberlain, and we're building on that. That means adding seats, partnerships and investing in the support that helps students get from enrollment all the way through to graduation.

Chamberlain is also expanding into new markets with new programs, delivering on its platform extension strategy. The Cincinnati campus opened in August. Salt Lake City started classes this week, and Nashville is expected to open in January. We also opened our second physician assistant program in Phoenix at full capacity with a third location already in the works.

Chamberlain entered fiscal 2027 on an improved foundation. And while its path isn't perfectly linear, we're executing on several growth levers at once, and each of them is gaining traction. We're adding seats, we're deepening our health system partnerships, and we're investing more in student success, all of which puts Chamberlain on a sustainable growth trajectory.

Turning to Walden. We achieved double-digit total enrollment growth for the tenth straight quarter and set another enrollment record. Sustaining that over multiple years takes execution across every part of the portfolio and the team keeps delivering. It also means stronger comparables ahead, which we've already contemplated into our long-range planning. The strength remains broad-based at Walden across all degree levels with doctoral and undergraduate programs leading the way and strong persistence continues to compound that new enrollment growth.

Our new marketing campaign at Walden is "Your Career, Our Job", and it's working. It shows undergraduates that Walden delivers on its promise with support from choosing a career through coaching and personalized tools that map coursework to specific jobs. Undergraduate enrollment, a priority we called out at Investor Day, grew by more than 20% in the first quarter.

Turning to our Medical and Veterinary segment, it had another strong quarter. Total enrollment grew 3.5% with both medical and veterinary contributing. Disciplined operations continue to turn enrollment growth into healthy revenue and profit. As we flagged last quarter, some students used our multiple intake cycles to start a term early ahead of changes to federal loan programs. That shift lifted the May cycle and made the September class a bit smaller. So the right way to read the business is May and September combined. On that blended basis, we delivered very strong results.

Interest in medicine and veterinary medicine remain durable, and we don't expect the loan changes to affect long-term demand. There are more than 2 applicants for every U.S. MD seat, while first year U.S. class sizes have grown less than 2% a year for 2 decades. In that pool of prospective students, U.S. medical schools overlook a group who have proven they can succeed with us. We're leveraging the evolving landscape as an opportunity to enhance our prospective student journey, reducing friction and driving engagement throughout the process. Students are enrolling and performing and our class mix has improved as a result, in line with our core customer strategy.

Let's bring this concept to life. Among students who sat for USMLE Step 1, recent data shows that Ross Med and AUC students passed on their first attempt at rates comparable to or higher than U.S. MD students with similar MCAT scores in most score ranges. On the vet side, we continue to operate near capacity. Leading indicators for the veterinary licensing exam continue to strengthen, underscoring that we're serving our students well and driving student success.

Turning to employer integration. Our collaboration with Advocate Health, the third largest nonprofit integrated health system in the country, started in Wisconsin last month. We'll expand that relationship to all 3 of our Chicagoland campuses. Chicago is one of the largest markets for both Advocate and Chamberlain, and the plan has always been to expand over our overlapping geographies. In addition, our partnership with SSM Health has outperformed, and we've raised enrollment targets with them.

The model we continue to advance makes sense for health systems, for Covista and for our students. Health systems get a differentiated and proprietary pipeline. We get more durable enrollment at a lower cost of acquisition and students get financial support on their way into the profession.

Turning to technology. Our enterprise technology investments continue to advance. The AI-powered classroom has moved beyond the prototype stage and is now in full development and testing, bringing together all of our capabilities along with those of our leading technology partners. We're designing it specifically around the needs of our students and faculty. At our scale, we believe this creates an opportunity to deliver a more personalized learning journey and a differentiated student experience from first inquiry all the way through to licensure.

On the shift to LLM search, as we said, this is a real dynamic for any company that serves consumers. Fortunately, our institutions start from a position of strength. We have strong brands, great student outcomes and prepare students for careers in health care fields where there are real shortages of workers. As a result, our institutions continue to compete strong in visibility, share of voice and sentiment, and our data shows continued improvement in leadership where it matters.

We're building on this foundation by further improving discoverability and positive sentiment of our institutions. We analyze tens of thousands of answers to measure how our institutions appear and how they're described and whether they're recommended all the way down to the program level. From there, we develop new content to ensure that the LLMs have the latest and greatest information about the quality and value of our programs.

So to summarize, Purpose at Scale starts from a position of strength. Over the next 3 years, we'll continuously layer in the 4 priorities we presented at Investor Day that enhance our trajectory and widen our competitive moat. That means operational excellence in everything we do, platform extension through new campuses and programs, employer integration through more and deeper health system partnerships and a technology focus that brings education powered by AI. Just as importantly, we generate the cash to fund these priorities and still return capital to shareholders at the same time.

We are America's largest health care educator, and that scale is a real advantage. But scale isn't the point. What you should leave with from this call is that we're deploying capital to extend our lead and build the company in our sector in a way that compounds intrinsic value per share the longest and most attractively.

I want to thank you all for your continued support. And with that, I'll turn it over to Bob to walk through the financials in more detail.

Robert Phelan

Thank you, Steve, and hello, everyone. We began our next strategic chapter, Purpose at Scale, with strong results that demonstrate the durability of our operating model. I'll now review our first quarter results and key drivers. Later in my remarks, I'll discuss our updated expectations for fiscal 2027.

Starting with the top line. First quarter revenue increased 10.7% to $511.5 million with strong growth from all 3 segments. Total company enrollment was up 7.6%, with all 3 segments contributing, and that growth carried through to the bottom line. Adjusted EBITDA was $131.2 million, up 17.1% compared with the prior year. Growth was led by Walden and Med & Vet with Chamberlain contributing even as that segment invests in new campuses. Adjusted EBITDA margin of 25.6% expanded 140 basis points from the prior year as revenue growth and efficiencies across our platform generated operating leverage, partially offset by investments in our strategic growth initiatives.

Adjusted net income increased 16.8% to $75.8 million and adjusted earnings per share was $2.19, up 25.1% compared with the prior year. Our earnings per share growth continues to benefit from a lower share count and lower interest expense. Diluted shares outstanding averaged 34.6 million in the quarter, about 2.5 million lower than the prior year, reflecting our share repurchase activity. Interest expense declined to $9.9 million from $11.1 million, reflecting our actions to reduce debt and lower our borrowing costs.

Next, I'll discuss the first quarter financial highlights by segment. Chamberlain reported first quarter revenue of $192.4 million, an increase of 7.4% compared with the prior year, driven by enrollment growth in pre-licensure nursing along with higher credit hours per student and pricing optimization. Total student enrollment increased 1.3% to over 40,000 students. Chamberlain's third consecutive quarter of growth and pre-licensure BSN total enrollment grew for the 17th consecutive quarter. Chamberlain adjusted EBITDA increased 7.1% to $37.6 million and adjusted EBITDA margin of 19.5% was essentially in line with the prior year. Chamberlain's first quarter results include approximately $3 million of costs related to new campuses as we invest ahead of any significant enrollment. Excluding these additional costs, Chamberlain adjusted EBITDA would have increased nearly 16% to $40.6 million.

Turning to Walden. First quarter revenue increased 14.1% to $216.7 million, driven by strong enrollment growth. Total student enrollment grew 12.8% to nearly 59,000 students, the highest total enrollment in university history. Walden has now grown enrollment for 13 consecutive quarters, including 10 straight quarters of double-digit growth. The strength remains broad-based across health care and non-health care programs. Adjusted EBITDA increased 16.1% to $71.9 million, and adjusted EBITDA margin expanded 60 basis points to 33.2% as operating leverage from the enrollment growth more than offset continued investments in marketing.

For the Medical and Veterinary segment, first quarter revenue increased 10% to $102.5 million. Total student enrollment increased 3.5% with growth at both our medical and veterinary schools. Adjusted EBITDA increased 27.9% to $27.4 million, and adjusted EBITDA margin expanded 370 basis points to 26.7%, which reflects the high operating leverage inherent to this segment as we grow enrollments.

Shifting to cash flow and the balance sheet. Free cash flow over the trailing 12 months was $355 million, up 11.4% from the comparable prior year period, reflecting strong operating performance and high cash conversion. That growth came even as capital expenditures over the same period rose to $99 million from $56 million as we invest in new campus capacity and technology. We ended the quarter with $222 million of cash and cash equivalents and net leverage of 0.5x. During the quarter, we repriced our $510 million Term Loan B, reducing the interest rate spread by 25 basis points to SOFR plus 2%.

We also returned $84 million to shareholders through share repurchases in the quarter, buying back approximately 660,000 shares at an average price of $127.63. We have $578 million remaining under our $750 million repurchase authorization. We will continue to take a disciplined returns-focused approach to capital allocation, prioritizing reinvestment in our institutions and being opportunistic about returning excess cash to shareholders.

Turning to our outlook. Based on the strength of our first quarter performance and our expectations for the balance of the year, we are raising both our revenue and adjusted earnings per share guidance for fiscal 2027. The increase reflects first quarter results ahead of our plan. We're taking a prudent view of the remaining 3 quarters. We now expect revenue in the range of $2.06 billion to $2.095 billion or approximately 5.5% to 7% growth year-over-year, up from our prior range of $2.05 billion to $2.09 billion. At the midpoint, that's an increase of $7.5 million. We now expect adjusted earnings per share in the range of $9 to $9.20 or approximately 9% to 11.5% growth year-over-year, up from our prior range of $8.90 to $9.15. At the midpoint, that's an increase of $0.07.

A few assumptions frame the updated guidance. First, we continue to invest in new campuses ahead of enrollment. We will continue to keep you apprised of the expenses before those campuses carry meaningful enrollment. Second, on a quarterly phasing, as a reminder, Walden returns this fiscal year to a normalized academic calendar. That means this year for Walden, we will have 1 less week in the second quarter and 1 additional week in the third quarter compared with fiscal 2026. Last year, that shifted $18 million of revenue and adjusted EBITDA from the third quarter into the second quarter. As a result of that changing back, it will have a pronounced impact for the year-over-year comparison in the second quarter and benefit the third quarter with no net impact on the full year. That means second quarter growth will be well below our full year rate and third quarter growth well above it.

We continue to expect 0 to 50 basis points of adjusted EBITDA margin expansion for the full year, and that includes our continued investment in new campus capacity. That compares with 140 basis points in the first quarter. We continue to expect capital expenditures to be above fiscal 2026 levels as we bring new capacity to market and invest in technology with higher spending weighted towards the first half of the year. We also continue to expect a higher adjusted effective tax rate in fiscal 2027 than in fiscal 2026.

Overall, the first quarter demonstrated our operating model working at scale. Enrollment growth is flowing through to profit, converting to cash and that cash is funding the new campuses and technology behind Purpose at Scale, while we continue to return capital to shareholders.

And before I turn the call back to Steve, I want to share a personal update, something I don't normally include in our earnings calls. After nearly 7 years at Covista and 5 as our CFO, I have decided to retire from Covista. Serving this company and leading this team has been one of the great privileges of my career. Together, we navigated one of the most consequential periods in Covista's transformation, completed Growth with Purpose ahead of our fiscal 2026 and long-term targets and now enter Purpose at Scale from a position of strength. We've accomplished a lot in the last 5 years, but at this inflection point, the timing is right for a transition, and I'm ready for my next challenge. I will remain in my role until a successor has been named, and I'm fully committed to a smooth transition. To our Board, investors and analysts, thank you for your trust, your thoughtful questions and your partnership over the years.

With that, I will turn it back to Steve.

Stephen Beard

Thanks, Bob. Before we open the call to Q&A, I just want to take a moment to thank Bob for his service at Covista. Bob has been an exceptional and trusted partner to me, the company and the Board of Directors. And he's done so through one of the most important periods in the history of the company. Covista finished Growth with Purpose ahead of both our fiscal 2026 and long-term targets and enters Purpose at Scale with a robust balance sheet and real financial strength. More importantly, Bob built a finance organization with the depth to carry us forward, and we're deeply grateful for his leadership and the excellence he brought to the team and to the function. As Bob mentioned, he'll continue in his role until a successor has been named. We have an active search underway. I'm confident in the continuity of our financial operations and reporting through this transition. And with that, we'll open the call to Q&A.

Operator

[Operator Instructions] And our first question comes from the line of Jeff Silber with BMO Capital Markets.

分析師問答

Jeffrey Silber

First of all, Bob, I just wanted to thank you for all your help over the years and wish you best of luck.

Robert Phelan

Thank you. Appreciate it.

Jeffrey Silber

Yes, of course. Moving back to, I guess, the quarterly results. I know in your prepared remarks, you addressed the loan caps. You didn't think there was an issue in the Med & Vet business. But I know there was some confusion early on, on nursing, whether it was going to be considered graduate or professional. And I know it ended up being in the professional bucket. But do you think there was any impact on enrollment because of that confusion?

Stephen Beard

No, I don't think so, Jeff. What we've referred to previously was primarily related to the Medical and Veterinary segment, where we did see 2 dynamics play out at once. First, we saw some pull forward in enrollments where students sought to get ahead of the loan changes. And we talked about that a couple of quarters ago and what that meant for enrollment. The other thing that we've cited is a bit of hesitancy on the part of students and families to make the leap until they fully understand all of their options to finance the entirety of the 4-year student journey in medical school. And so we believe there is still an opportunity on the consumer education side of things to ensure that students and their families are as well versed in all of the options they have for financing their journey, and we hope to overcome any remaining hesitancy through that consumer education over the next few enrollment cycles.

Jeffrey Silber

Okay. Great. That's very helpful. And then just moving back to the quarterly results. I know you don't give specific quarter-to-quarter guidance, but the adjusted EPS beat was pretty sizable versus consensus. Were there any expenses that might have been shifted into the second quarter or future quarters? And if so, which of the 3 segments did that occur?

Robert Phelan

Sure. I can take that. And I would say, no, there were not any expenses shifted. If anything, we made some additional investments in the first quarter. So really the outperformance largely driven by the revenue overperformance that we had.

Operator

The next question comes from the line of Alex Paris with Barrington Research.

Alexander Paris

Congrats on the beat and raise. And Bob, I'll echo Jeff's thoughts. Appreciate all your help and wish you nothing but luck going forward.

Robert Phelan

Thank you.

Alexander Paris

So my questions are likely related, I think. First off, I wanted to talk about Chamberlain enrollment up 1.3%. I was expecting a little bit more of a step function from Q4 to Q1. I guess the first question is, can we get a little additional color there? And what drove enrollment in Q1?

Stephen Beard

Yes. So Chamberlain grew total enrollment by 1.3%, and I think that was incrementally short of what we expected. It's important to note, though, that new student enrollment grew at a very healthy rate, led by pre-licensure BSN, which we believe is the critical growth area of the program mix at Chamberlain. The shortfall was really twofold. A bit of it was in continuing students. We had fewer of them return in September than we forecast. And then we had some lingering softness in post-licensure RN to BSN. On the first count, we expect that's easily corrected with some additional persistence efforts across certain of our students. And then on RN to BSN, we've got strategies and tactics in place to position that product more competitively from a pricing perspective. So as we go through the balance of the fiscal year, we expect to pick up incremental additional lift for the total enrollment story from those 2 areas. And we remain confident in the total enrollment story for Chamberlain over the course of the fiscal year.

Alexander Paris

Okay. Great. I was going to ask. I expected a step function, but I also expect a continued accelerating growth, maybe not as much of a step function in Q1, but the balance of the year. So we're starting off at up 1.3%. We would expect that to improve in terms of year-over-year growth rate in subsequent quarters. Is that accurate?

Stephen Beard

That's correct. And we still expect our most significant products to lead the way. Pre-licensure BSN total enrollment was up 13.2%, which was the 17th straight quarter of growth in that category. That will continue to be the growth engine for us, but we do expect improvement in post-licensure programs, RN to BSN in particular, and we do expect to address any issues around persistence and continuing students. So we are very, very confident about Chamberlain's trajectory over the next several quarters.

Alexander Paris

Okay. And then the related question is guidance. You beat on revenue versus consensus by $20 million in the first quarter. The revenue guidance midpoint to midpoint is $8 million. Likewise, on adjusted EPS, you beat by $0.36 versus consensus, but the increase is $0.07 midpoint to midpoint. I think Bob said that you're taking a prudent view on the balance of the quarters. What does that mean? And what is leading to your prudence on the subsequent 3 quarters?

Stephen Beard

Yes. So by way of a headline, we guide to the full year, not to the quarters. We set a range that we had a high degree of confidence in, and we raised it after 1 quarter. And obviously, as we've done every year that this team has been in place, we'll continue to revisit that as we get better visibility into the year. We come in with 7.5% more students than we had a year ago. That base drives revenue. And so as we progress through the year, as we look at what the art of the possible is, we will adjust the guide accordingly.

As for how we think about it in this particular instance, while we had a really strong beat and we're proud of that, as you know, we're monitoring a couple of dynamics that are puts and takes across the reported financials. You know about the Walden calendar shift, no full year impact, but there is a quarter-over-quarter impact with that $18 million of revenue and EBITDA that moves from Q2 to Q3.

We're investing ahead of revenue at Chamberlain with our campus expansion, and we expect those start-up costs to rise over the course of the year. Nashville opens in January, and we've got more sites that we're working on. So we're monitoring that and the implications for the full year as well.

Bob has talked about this. We've got a slightly higher tax rate for FY '27 that we're navigating as we think about full year results. And Q1 carried more of the year's earnings in our plan anyway. So again, we're pleased with the additional momentum in Q1. We're pleased to be able to raise the full year guide in Q1. It bodes well for the rest of the year. And again, if we think the opportunity is north of where we've got it now, we'll adjust accordingly next quarter.

Operator

The next question comes from the line of Jack Slevin with Jefferies.

Jack Slevin

Congrats on the really strong quarter, and I'll echo everyone's thank you to Bob. I appreciate all of the work over the time covering. If I just want to jump back in and maybe I'll take it a little more broadly on the margin front. I guess thinking about how that paces in the guidance and as you think about investments in the business, I guess I'd love to just dig in on -- is there a cadence that we should be thinking about acceleration in some of those Chamberlain investments that might weigh down on margin a little later? Or is the trajectory from 1Q a pretty decent way to think about that? Or any other specific call-outs around how you'll be managing the cost base and investments over the next couple of quarters would be great.

Stephen Beard

Yes. I'm going to let Bob answer that question, but before he does, just point out that one of the things we really like about our model is the inherent operating leverage and the really robust free cash flow that allows us lots of optionality around how to deploy that cash, including making investments in new campus expansion. But Bob, do you want to talk about how that investment flows over the course of the year?

Robert Phelan

Yes. So one of the things that you mentioned is should you be taking the first quarter and kind of extrapolating that? I would say, no. The way I would look at it is more of a -- we are sticking with the -- up to 50 basis points of improvement for the full year. And as we've said before, there's always going to be some fluctuations quarter-to-quarter. And in particular, what I would just point out is that for Walden, given the shift that we've talked about, that you would expect to have some lower margin rates year-over-year in the second quarter because of the shift. Third quarter, you would then recover that and you would expect to have higher margin rates. But for the full year, we do expect to still be within that range of up to 50 basis points of improvement.

Jack Slevin

Okay. Understood. That's helpful. And then if I look -- not a perfect metric, but revenue per student was quite strong in both Chamberlain and in Med & Vet in the quarter. Is there anything you can speak to on sort of what's driving that? I'm not sure if it's mix or core price or across the business, maybe how you're approaching price through this year would be helpful.

Stephen Beard

Yes. It's a combination of things. I'll start and Bob will keep me honest. We've got mix that's driving some of that revenue delta. We've got pricing driving some of it, and we've got credit loads, which were up in the quarter, which drives some of that revenue spread as well.

Robert Phelan

No, that's exactly it. Nothing else to add on that.

Operator

The next question comes from the line of Jasper Bibb with Truist Securities.

Jasper Bibb

First, I'll add my congrats on the retirement, Bob. It's been a pleasure working with you.

Robert Phelan

Thank you.

Jasper Bibb

And then just for my first question, I know we kind of talked about this a little bit in the prepared remarks, but this week, kind of the big topic around a lot of consumer businesses has been this search versus AI kind of debate. Can you just provide, like, a little bit more detail on what you're seeing in student acquisition costs and kind of how you're adapting in the current environment?

Stephen Beard

Yes. So as we've said before, the shift to AI search is real, and we believe it changes the way in which students find every school, including ours. We had, for a variety of reasons, an opportunity to get out ahead of this, particularly as a result of some of the rebranding work we did and moving from Adtalem to Covista. And while there's lots more work to be done, we feel pretty good about how we've navigated it thus far. It hasn't really resulted in any real headwinds from an inquiry, application, or new enrollment perspective. We've read, obviously, the commentary from other peers who have had to make increased investments in paid search to offset what they think they may have lost from the LLMs. But as we sit here today, we feel pretty good about the work we've done to navigate this dynamic.

We've invested heavily in monitoring systems that allow us to test where our brands and programs show up in LLM search and also to be able to test whether they show up in a positive light. So where our brands are most authoritative, and we have obviously the most brand equity at Chamberlain, descriptions are about 90% positive for that institution in most LLM search, slightly below that for Walden, which is more of a fighter brand, but we view that as an incredible opportunity for upside at Walden given how well that institution performs on its own.

So no implications for total enrollment for us. We continue to monitor the behavior of the LLMs, and we continue to work hard to get the right kind of content into the marketplace that is tailor-made for where those LLMs go to search for their data and ultimately make their recommendations.

Jasper Bibb

That's super helpful. And another really nice quarter for Walden. You've had a great run there. I know you don't give segment guidance, but just any color on how you're thinking about the next 3 quarters of Walden in the context of, kind of, your updated guidance would be helpful.

Stephen Beard

Yes. So we remain pleased with the performance at Walden. The team continues to do an excellent job. Record enrollment this quarter, up almost 13%. We feel really good about that. We also feel really good about some of the strength they're seeing in the relatively small portion of the portfolio that's not health care. Education, in particular, doing really quite well, which we think is an important dynamic because Chamberlain's status as a comprehensive university, we believe, is a real source of strength for it.

Walden also continues to enjoy really, really strong persistence, which creates a flywheel effect for the strong new enrollment. And so even though that institution faces ever increasingly challenging comps cycle over cycle, we remain impressed with their ability to meet that challenge and to lap them in a very impressive way. So we can't do anything but be highly complimentary about the work at Walden.

Jasper Bibb

Got it. Just last one for me. I just had a working capital question. The receivables balance picked up a little bit sequentially. Is there anything that kind of specific that drove that? Or is it more of a timing thing?

Robert Phelan

Yes. I think if you're referring to what's in the Q and sequentially, I mean, when you look from June 30 to September 30, it's not really comparable. What you really should take a look at is last year's number. And you'll still see an increase. But if you look at last year compared to this year at September 30, what you'll see is a smaller increase. So again, sequentially, it's different because of the timing of when the sessions, the academic sessions are. But we did have an increase in the receivables, largely speaking, commensurate with the revenue increase we had, but a little bit higher than that percentage.

Operator

This concludes the question-and-answer session. And I'd like to turn the call back over to Steve Beard for closing remarks.

Stephen Beard

I'd just like to thank everyone for participating in the call and listening in. One thing I want to highlight, on Monday, our first student started classes at Salt Lake City and shortly afterwards, the first Advocate students in Chicago began their journey with us. It's really gratifying to see the Purpose at Scale strategy in action, and none of it happens without the incredible work of our faculty advisers and staff who show up for our students every day. I want to close out, again, expressing my appreciation for Bob Phelan, his partnership, his steady stewardship of the financial operation and the company and being an incredible thought partner for me over the course of the last 5 years. And with that, we'll close for the evening, and we look forward to talking to you next quarter.

Operator

Thank you. This does conclude today's conference. You may disconnect your lines at this time, and we thank you for your participation.