Universal Technical Institute reported a quarter that exceeded Wall Street’s expectations on both revenue and profit, but the market responded negatively, likely reflecting investor concerns about the pace of new student starts and future growth investments. Management attributed the quarter’s performance to ongoing demand for skilled trades, expansion of new programs, and operational execution across both the Universal Technical Institute and Concorde divisions. CEO Jerome Grant highlighted the supportive regulatory environment as a key factor sustaining student demand, while acknowledging a softer trend in new student growth for the quarter. Grant explained that, "new student growth softened this quarter, as previously expected, but we anticipate a strong fourth quarter as our high school population prepares to begin their studies."
Is now the time to buy UTI? Find out in our full research report (it’s free).
Universal Technical Institute (UTI) Q2 CY2025 Highlights:
- Revenue: $204.3 million vs analyst estimates of $200.2 million (15.1% year-on-year growth, 2% beat)
- EPS (GAAP): $0.19 vs analyst estimates of $0.11 (72.7% beat)
- Adjusted EBITDA: $25.27 million vs analyst estimates of $21.55 million (12.4% margin, 17.3% beat)
- The company slightly lifted its revenue guidance for the full year to $832.5 million at the midpoint from $830 million
- EPS (GAAP) guidance for the full year is $1.04 at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $126 million at the midpoint, in line with analyst expectations
- Operating Margin: 6.9%, up from 4.2% in the same quarter last year
- New Students: 5,721, up 154 year on year
- Market Capitalization: $1.44 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Universal Technical Institute’s Q2 Earnings Call
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Michael John Grondahl (Northland Securities) asked about the implications of Concorde’s growth restrictions being lifted a year early. CEO Jerome Grant explained this accelerates program launches and campus expansion, potentially adding “another half a dozen or so, maybe more programs” next year, with updated targets to be provided with future guidance.
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Raj Sharma (Texas Capital) inquired about Universal Technical Institute’s readiness to scale Concorde and UTI campuses. Grant noted that site selection and program portfolios are already prepared, enabling the company to “hit the ground running” as growth restrictions are lifted.
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Jasper James Bibb (Truist) requested details on student interest and the composition of new starts, especially among high school graduates. Grant clarified that about 50% of UTI division starts are high school students, predominantly enrolling in auto/diesel programs, with HVAC and other skilled trades gaining traction.
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Jasper James Bibb (Truist) also asked about Universal Technical Institute’s exposure to short-term training programs benefiting from Pell Grant changes. Grant responded that this segment is currently very small but could expand quickly as the company develops new offerings.
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Bruce Goldfarb (Lake Street Capital Markets) questioned the integration of Universal Technical Institute and Concorde’s systems. Grant stated that aligning ERP, student information, and learning management systems is a multi-year process, but work is underway and should yield operational efficiencies over time.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will monitor (1) the pace of new campus and program launches at both Universal Technical Institute and Concorde, (2) progress on developing and scaling Pell-eligible short-term credentials, and (3) the impact of these growth initiatives on student enrollment and margins. The implementation of system integration projects and further legislative changes affecting financial aid will also be important factors to track.
Universal Technical Institute currently trades at $26.54, down from $33.41 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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