Segment Information

9 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

18. Segment Information

We present three reportable segments as follows:

Chamberlain – Offers degree and non-degree programs in the nursing and health professions postsecondary education industry. This segment includes the operations of Chamberlain.

Walden – Offers online certificate programs and bachelor’s, master’s, and doctoral degrees, including those in nursing, education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice. This segment includes the operations of Walden, which was acquired by Adtalem on August 12, 2021.

Medical and Veterinary – Offers degree and non-degree programs in the medical and veterinary postsecondary education industry. This segment includes the operations of AUC, RUSM, and RUSVM, which are collectively referred to as the “medical and veterinary schools.”

These segments are consistent with the method by which the Chief Operating Decision Maker (Adtalem’s President and Chief Executive Officer) evaluates performance and allocates resources. Performance evaluations are based on each segment’s adjusted operating income. Adjusted operating income excludes special items, which consists of restructuring expense, business integration expense, intangible amortization expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. Adtalem’s management excludes these items from its review of the results of the operating segments for purposes of measuring segment profitability and allocating resources. “Home Office and

Other” includes activities not allocated to a reportable segment and is included to reconcile segment results to the Consolidated Financial Statements. Total assets by segment is not presented as our CODM does not review or allocate resources based on segment assets. The accounting policies of the segments are the same as those described in Note 2 “Summary of Significant Accounting Policies.”

Summary financial information by reportable segment is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Revenue:
Chamberlain	$	170,338	$	149,737	$	466,487	$	426,538
Walden		150,607		132,874		439,023		395,715
Medical and Veterinary		91,713		86,471		269,235		263,932
Total consolidated revenue	$	412,658	$	369,082	$	1,174,745	$	1,086,185
Adjusted operating income:
Chamberlain	$	43,349	$	39,589	$	97,313	$	99,820
Walden		31,871		24,628		93,141		78,181
Medical and Veterinary		22,953		16,893		59,521		56,506
Home Office and Other		(8,391)		(8,142)		(21,315)		(16,867)
Total consolidated adjusted operating income		89,782		72,968		228,660		217,640
Reconciliation to Consolidated Financial Statements:
Restructuring expense		(473)		(1,278)		(1,217)		(17,706)
Business integration expense		(18,450)		(11,346)		(30,621)		(35,702)
Intangible amortization expense		(8,286)		(14,232)		(28,296)		(48,936)
Litigation reserve		—		—		(18,500)		—
Loss on assets held for sale		—		—		(647)		—
Debt modification costs		(848)		—		(848)		—
Gain on sale of assets		—		13,317		—		13,317
Total consolidated operating income		61,725		59,429		148,531		128,613
Interest expense		(16,560)		(14,457)		(48,910)		(47,806)
Other income, net		2,871		3,980		8,648		3,301
Total consolidated income from continuing operations before income taxes	$	48,036	$	48,952	$	108,269	$	84,108
Capital expenditures:
Chamberlain	$	9,811	$	4,002	$	20,853	$	6,920
Walden		5,311		1,198		10,872		2,291
Medical and Veterinary		3,648		1,277		6,928		2,192
Home Office and Other		2,916		2,832		13,361		7,653
Total consolidated capital expenditures	$	21,686	$	9,309	$	52,014	$	19,056
Depreciation expense:
Chamberlain	$	5,312	$	4,405	$	14,790	$	12,985
Walden		2,214		2,439		6,681		7,303
Medical and Veterinary		3,174		3,231		9,228		9,367
Home Office and Other		692		82		1,407		1,963
Total consolidated depreciation expense	$	11,392	$	10,157	$	32,106	$	31,618
Intangible amortization expense:
Walden	$	8,286	$	14,232	$	28,296	$	48,936
Total consolidated intangible amortization expense	$	8,286	$	14,232	$	28,296	$	48,936

Adtalem conducts its educational operations in the U.S., Barbados, St. Kitts, and St. Maarten. Revenue by geographic area is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2024		2023		2024		2023
Revenue by geographic area:
Domestic operations	$	320,945	$	282,611	$	905,510	$	822,253
Barbados, St. Kitts, and St. Maarten		91,713		86,471		269,235		263,932
Total consolidated revenue	$	412,658	$	369,082	$	1,174,745	$	1,086,185

No one customer accounted for more than 10% of Adtalem’s consolidated revenue for all periods presented.