Apollo Education Group Inc (APOL) First Quarter 2015 Earnings Call Transcript

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Operator
Your next question comes from the Nick Nikitas with Robert W. Baird. Your line is open.

Nicholas Nikitas, Robert W. Baird& Co.
Yeah. Good morning. Just looking at the persistent decline and realizing you guys stopped reporting enrollment by degree level, but any commentary you can provide or material differences in retention by degree levels?

Greg Cappelli, Chief Executive Officer, Apollo Education Group, Inc.
That’s a good question. I would say, no, there is not. We don’t have information that suggests why fluctuations between the degree areas at this point.

Nicholas Nikitas, Robert W. Baird & Co.
Okay.

Greg Cappelli, Chief Executive Officer, Apollo Education Group, Inc.
There’s always going to be some movement in any given year or any given quarter, but nothing that stands out materially that I can share with you at this point.

Nicholas Nikitas, Robert W. Baird & Co.
Okay. Then just switching gears to the Global. On a positive note, it sounds like continued solid results there. Outside of Open Colleges, where are you guys seeing the strongest growth?

Greg Cappelli, Chief Executive Officer, Apollo Education Group, Inc.
In all areas to be honest with you.The most mature market is certainly in the U.K., but even in a market that has had declines, they are gaining market share in all areas. Again, one of things that excites me about the U.S. is we have learned some significant things from different parts of the world where they’ve already built college-based systems that are delivering market share gains in their areas like we hope to do in the U.S. throughout our goal platform. Pretty much all of the areas within Apollo Global are now growing. There are some faster. I think Australia is probably our fastest growing right now, but pretty exciting.

Nicholas Nikitas, Robert W. Baird & Co.

Okay. Thanks.

Greg Cappelli, Chief Executive Officer, Apollo Education Group, Inc.

Thank you.

Operator
Your next question comes from the line of Phil Stiller with Citi. Your line is open.

Phil Stiller, Citi
Hi, guys. Sorry, I joined the call late, so apologize if my questions were answered, but I guess last quarter you talked about the revenue per student changes inflecting towards the back half for the year based on some pricing adjustments and then in the Q today there were some reference to changes made in the first quarter. I just want to make sure there were no incremental changes from what we discussed last quarter. Is the expectation still for kind of a positive exit rate for this year?

Brian Swartz, SVP and Chief Financial Officer, Apollo Education Group, Inc.
The answer to your first question is there were nothing new that we didn’t talk about in the October call, it happened during the quarter so you saw it again in the 10-Q which complies with the disclosure requirements and consistency in MD&A, so nothing incremental from what we talked about last quarter, Phil, on the pricing side. The second question, I’m sorry, what was it again?

Phil Stiller, Citi
I guess last quarter you talked about the exit rate being positive year-over-year in the fourth quarter?

Brian Swartz, Senior Vice President and Chief Financial Officer, Apollo Education Group
Yeah. In my prepared remarks I’ve indicated that the second quarter rate of decline in RPS should be consistent with Q1 which was down 8.5% and we would see improvements in the back half getting close towards zero at the end of the year.

Phil Stiller, Citi
Okay. Then the second question is just on the admissions advisory expense was up quite a bit year-over-year. I don’t know if you gave some color on what was driving that?

Brian Swartz, Senior Vice President and Chief Financial Officer, Apollo Education Group
Yeah. This starts to get into the mix between domestic, international operations principally, so what you’re starting to see is that our international operations which, as I mentioned earlier, and in the answer to one of the other questions, are growing, so areas like marketing and admissions advisory and particular academics and instructional, so those are increasing. Obviously UOP is still the majority of our Company today. Much of the growth there, the admissions advisory, much of that growth is for those international operations.

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