Eric Martinuzzi: Okay. And the last question is on the Concorde expansion of the existing footprint. I think there was some Department of Ed hurdles, not hurdles, but anniversaries you needed to celebrate with sort of post-acquisition that you needed to own it for 12 months or so, prove that you’re a responsible owner. And then you could invest in growing the number of students at given campuses, are we at that point yet?
Jerome Grant: All right, well, let me let me sharpen that a bit, is that, we are absolutely growing the number of students at the Concorde campuses. One of the reasons for the momentum we’re seeing is that we’re seeing some extremely positive response to increased investment in marketing and admissions and so, Concorde’s doing quite well in terms of their growth on their campuses. What we aren’t able to do, due to the growth restrictions imposed by the Department of Education post-merger, which is a standard operating practice in a merger, is we’re not allowed to open a new campus. And we’re not allowed to start new programs that weren’t previously approved before the merger. And so, what that really means is, you won’t see a new Concorde campus until late ’26 or ’27 When those growth restrictions, are scheduled to be are scheduled to be lifted, but in the meantime, we’re working very diligently on filling those Concorde classes, beyond where they had been filled before.
You talk about margin expansion, and we’ve said this in the past, the fastest way to margin expansion is to fill more seats in a classroom, right, that are — that may be empty. And so, we’re working very hard to continue to expand those margins by expanding the representation in each classroom.
Eric Martinuzzi: Yes, congrats on the quarter and the bright outlook for this year and ’25.
Jerome Grant: Great, thanks Eric.
Troy Anderson: Thanks, Eric.
Operator: And the next question comes from Raj Sharma with B. Riley. Please go ahead.
Raj Sharma: Hi, thank you for taking my questions again. Solid results, beating rays. If I can start, could you explain the cadence of the new starts growth is going from the high teens in the first half to, I think you indicated mid-single-digits in second half, is that, why is that drop happening again? Is that the new program ramps that have happened in the first half and not happening in second half?
Troy Anderson: Yes, correct Raj, this is Troy. The few factors, one is we do start to lap the UTI program expansions that started launching in July of last year. We’ll still have some growth there on a year-over-year basis, as they launch throughout the quarter and of course the first set of starts, aren’t usually as robust. We try and temper those a little bit just to get, work out some of the kinks. We also have just some seasonality effect of the Concorde clinical programs, as far as the number of starts available given the programmatic accreditors and the frequency of starts that we can have, within a given clinical program. And so, we have some fluctuation with that on a year-over-year basis and across the quarters. And then we implemented a number of initiatives, Jerome talked earlier about the reps in both military and high school hitting their stride.
Again, we’re now coming to the end of year two, so we’re getting to a point where 34.24 they’re still driving increased productivity, but it’s less on a relative basis than it was earlier in the year. We had implemented some pretty major changes in our adult transformation — or transformation in our adult lead flow and enrollment process that really was throughout 2023. So again as we get into the back half of the year that’s a much more mature process. And so just a number of different factors, frankly that kind of all roll together that we are getting a lift in the front half of the year, because of those things still generating significantly more year-over- year and that becomes more normalized in the back half of the year.
Raj Sharma: Thank you, that’s helpful. And then for the fiscal ’25 guidance, are you what I think you’re assuming mid-single-digit starts?
Jerome Grant: Yes, our core projection, just clarification on that, the our baseline start growth we’ve always said we believe we can generate low to mid-single-digit growth rate in starts, in any given environment. And so that’s always our baseline starting point. We do have a little bit of flow through on the new programs that, would be a bit incremental to that and we’re launching for UTI, HVAC, our programs here in the latter part of the year and into next year. The dental hygiene programs that, we touched upon are prepared to marks launching and those are by the way only one start a year. And as we mentioned about 50 starts per year, so not huge drivers, but so we have some of that flow through from the new programs in addition to the baseline growth, but not significant.
Troy Anderson: And then the last — point is as you said in the past is that it really takes about 36 months for new campuses to ramp and Miramar and Austin hit that point throughout 2025. So that’s the building blocks to what we said would likely be a double-digit increase in revenue and 100 basis points at least 100 basis points in margin expansion.
Raj Sharma: Great, that’s really helpful. And then just what is causing the EBITDA margin to expand next year is that purely operating leverage?
Troy Anderson: Well it’s operating leverage we’ve again we added we had the growth and diversification strategy and now you hear us say growth, diversification and optimization. We’ve always had programs to optimize our operating model, but now we’re driving a new level of that with our workforce optimization, more efficiency, productivity from a workforce perspective, more space, better space utilization. So that we can expand programs in the future, which also drives some educational delivery optimization. So it’s a combination of operating leverage as well as just getting more efficient, as we continue to grow and scale and drive more optimization across the footprint, both in the UTI side as well as on the Concorde side.
And again, we’ve always said too with the Concorde acquisition, which at the time of acquisition was an 8% margin this year it’ll be about 10%. And we said we would drive that toward mid-teens through growth and through driving some of the consistent practices that we’ve previously implemented at UTI with centralization and more efficiency in various ways. And so that’s also contributing towards that.
Raj Sharma: Thank you again. Great color and solid results and great execution. Thank you again. I’ll take my questions offline.
Troy Anderson: Thank you.
Jerome Grant: Thank you Raj.
Operator: The next question comes from Steve Frankel with Colliers. Please go ahead.
