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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

​

FORM 10-K

(Mark One)
☑ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the fiscal year ended June 30, 2024
| or
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| For the transition period from _____to _____
​ | Commission File Number: 001-13988

​

Adtalem Global Education Inc.

(Exact name of registrant as specified in its charter)

​

Delaware | 36-3150143
(State or other jurisdiction of | (I.R.S. Employer
incorporation or organization) | Identification No.)
500 West Monroe Street |
Chicago, Illinois | 60661
(Address of principal executive offices) | (Zip Code)

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Registrant’s telephone number; including area code (312) 651-1400

Securities registered pursuant to Section 12(b) of the Act:

| ​ |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common stock, $0.01 par value per share | ATGE | New York Stock Exchange
Common stock, $0.01 par value per share | ATGE | Chicago Stock Exchange

​

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ◻

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ◻ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | þ | Accelerated filer | ◻
Non-accelerated filer | ◻ | Smaller reporting company | ☐
​ |  | Emerging growth company | ☐

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. þ

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. þ

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

As of December 31, 2023, the aggregate market value of the registrant’s outstanding common equity held by non-affiliates was $2,277,779,425, based on the closing price of the registrant’s common stock on December 29, 2023, the last trading day of the registrant’s most recently completed second fiscal quarter.

As of July 31, 2024, there were 37,689,832 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates information by reference to the registrant’s definitive proxy statement with respect to the 2024 annual meeting of shareholders (the “Proxy Statement”), to be filed with the Securities and Exchange Commission within 120 days after the close of the fiscal year ended June 30, 2024.

​

​

​

Adtalem Global Education Inc.

Form 10-K

Table of Contents

|  | Page
PART I |  |
Item 1. | Business | 1
Item 1A. | Risk Factors | 16
Item 1B. | Unresolved Staff Comments | 29
Item 1C | Cybersecurity | 29
Item 2. | Properties | 31
Item 3. | Legal Proceedings | 32
Item 4. | Mine Safety Disclosures | 32
​ | Information About Our Executive Officers | 32
​ | ​ | ​
PART II |  |
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 34
Item 6. | [Reserved] | 36
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 36
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | 53
Item 8. | Financial Statements and Supplementary Data | 53
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 102
Item 9A. | Controls and Procedures | 102
Item 9B. | Other Information | 103
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 103
​ | ​ | ​
PART III |  |
Item 10. | Directors, Executive Officers and Corporate Governance | 103
Item 11. | Executive Compensation | 104
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 104
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 104
Item 14. | Principal Accountant Fees and Services | 104
​ | ​ | ​
PART IV |  |
Item 15. | Exhibits and Financial Statement Schedules | 104
Item 16. | Form 10-K Summary | 108
​ | Signatures | 109

​

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Table of Contents

Cautionary Disclosure Regarding Forward-Looking Statements

Certain statements contained in this Annual Report on Form 10-K are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Adtalem’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors,” which should be read in conjunction with the forward-looking statements in this Annual Report on Form 10-K. These forward-looking statements are based on information available to us as of the date any such statements are made, and Adtalem assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.

PART I

Item 1. Business

Overview

In this Annual Report on Form 10-K, Adtalem Global Education Inc., together with its subsidiaries, is collectively referred to as “Adtalem,” “we,” “our,” “us,” or similar references. Adtalem was incorporated under the laws of the State of Delaware in August 1987. Our executive offices are located at 500 West Monroe Street, Chicago, Illinois, 60661, and the telephone number is (312) 651-1400.

Adtalem is the leading healthcare educator in the U.S and a systemically important solution for preparing a diverse talent workforce that meets the needs of the healthcare industry. The purpose of Adtalem is to empower students to achieve their goals, find success, and make inspiring contributions to our global community.

The Adtalem family of institutions offers programs with a focus in healthcare, including nursing, medicine, veterinary medicine, social and behavioral sciences, and more. Adtalem operates through five institutions: Chamberlain University (“Chamberlain”), Walden University (“Walden”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“RUSVM”), which comprises more than 80,000 students learning at multiple campuses and online. Adtalem’s institutions have an alumni community of over 300,000.

Adtalem is a mission driven organization, committed to advancing health equity, addressing social determinates of health and delivering highly qualified healthcare clinicians to urban and rural communities as a scaled provider of workers to the U.S. healthcare system.

Adtalem remains focused on expanding access to aspiring students through a seamless student experience, leveraging innovative learning technologies, diversifying into new program areas, and integrating our five institutions, providing the infrastructure necessary to meet the needs of where, when, and how students learn best.

Adtalem aims to create value for society and its stakeholders by offering responsive educational programs that are supported by exceptional services to its students and delivered with integrity and accountability. Towards this vision, Adtalem is proud to play a vital role in expanding access to higher education.

On August 12, 2021, Adtalem completed its $1.5 billion acquisition of all the issued and outstanding equity interest in Walden e-Learning, LLC, a Delaware limited liability company (“e-Learning”), and its subsidiary, Walden University, LLC, a Florida limited liability company, from Laureate Education, Inc. (“Laureate” or “Seller”).

On March 10, 2022, Adtalem completed the sale of Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Becker Professional Education (“Becker,”) and OnCourse Learning (“OCL”) for $962.7 million, net of cash

1

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of $21.5 million, subject to post-closing adjustments. On June 17, 2022, Adtalem completed the sale of EduPristine for de minimis consideration.

Segments Overview

We present three reportable segments as follows:

Chamberlain – Offers degree and certificate programs in the nursing and health professions postsecondary education industry.

Walden – Offers degree and certificate programs, including those in nursing, education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice.

Medical and Veterinary – Offers degree and certificate 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.”

Chamberlain

Chamberlain was founded in 1889 as Deaconess College of Nursing and acquired by Adtalem in 2005. In May 2017, Chamberlain College of Nursing broadened its reach in healthcare education through the establishment of Chamberlain University and now offers its programs through its College of Nursing and College of Health Professions.

Chamberlain’s nursing degree offerings include a three-year onsite and online pre-licensure Bachelor of Science in Nursing (“BSN”) degree, an online post-licensure BSN degree completion option for Registered Nurses (“RN-BSN”), an online Master of Science in Nursing (“MSN”) degree, including Nurse Practitioner tracks and other specialties, and the online Doctor of Nursing Practice (“DNP”) degree.

Through its College of Health Professions, Chamberlain offers an online Master of Public Health (“MPH”) degree program, an online Master of Social Work (“MSW”) degree program, and an onsite Master of Physician Assistant Studies (“MPAS”) degree program at the Chicago, Illinois campus.

Chamberlain provides an educational experience distinguished by a high level of care for students, academic excellence, and integrity delivered through its 23 campuses and online. Chamberlain is committed to graduating health professionals who are empowered to transform healthcare worldwide. Chamberlain had 36,750 students enrolled in the May 2024 session, an increase of 10.4% compared to the same session last year.

Chamberlain’s pre-licensure BSN program enables students to complete their degree in three years of full-time study as opposed to the typical four-year BSN program with summer breaks. Beginning in September 2019, Chamberlain began offering an evening/weekend BSN option at select campuses. In September 2020, Chamberlain launched its online BSN option that offers a blend of flexibility, interactivity, and experiential learning.

Students who already have passed their National Council Licensure Examination (“NCLEX”) exam and achieved RN designation through a diploma or associate degree can complete their BSN degree online through Chamberlain’s RN-BSN completion option in three semesters of full-time study, although most students enroll part-time while they continue working as nurses.

The online MSN degree program offers five non-direct-care specialty tracks: Nurse Educator, Nurse Executive, Nursing Informatics, Population Health, and Healthcare Policy. The accelerated MSN program offers a Clinical Nurse Leadership concentration. The accelerated RN-MSN program offers associate or diploma-prepared RNs an opportunity to earn an MSN versus a BSN with the option of completing the Advanced Generalist concentration in one year of full-time study and the Clinical Nurse Leadership concentration in one and a half years of full-time study.

Chamberlain also offers four direct-care nurse practitioner tracks: Family Nurse Practitioner (“FNP”), Adult-Gerontology Acute Care Nurse Practitioner (“AGACNP”), Adult-Gerontology Primary Care Nurse Practitioner

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(“AGPCNP”), and Psychiatric-Mental Health Nurse Practitioner (“PMHNP”). The FNP, AGPCNP, AGACNP, and PMHNP, programs are designed to be completed in two and a half years of part-time study.

The online DNP degree program is based on the eight essentials of doctoral education outlined by the American Association of Colleges of Nursing (“AACN”). The program can be completed in five to six semesters of study.

Chamberlain’s College of Health Professions MPH degree program focuses on preparing students through interdisciplinary coursework to become public health practitioners serving communities and populations to promote healthy communities and to work to address health problems and health-related issues such as disease, poverty, health access disparities, and violence. The MSW degree program aims to develop and empower students to be agents of social change in their communities and throughout the world. The MSW degree program prepares students for generalist or specialized practice and offers three tracks, including Crisis and Response Interventions, Trauma, and Medical Social Work. The program offers both a traditional and advanced standing option. The advanced standing option is for students who have completed a baccalaureate degree in social work. The MPAS degree program prepares students for the practice of general medicine as Physician Assistants in collaboration with a licensed physician and healthcare team and is designed to be completed in two years.

Student Admissions and Admissions Standards

Pre-Licensure BSN Program

The Chamberlain undergraduate pre-licensure admission process comprises two phases: Academic Eligibility and Clinical Clearance. Applicants must complete both to be eligible for admission. Determining Academic Eligibility is the role of the Chamberlain BSN Unified Admission Committee. The committee reviews applicants using a weighted evaluation system that considers several factors which may include previous coursework, grade point average, ACT/SAT scores and Health Education Systems, Inc. (“HESI”) Admission Assessment (A2) scores. All applicants deemed academically eligible by the committee must initiate drug, background, and fingerprint screenings, and clear all screenings within 120 days of the session start date. Applicants who enroll in the original session applied for may be granted full acceptance by signing a self-attestation and disclosure indicating their ability to clear all screenings within 120 days of the session start date. Chamberlain enrolls students in its pre-licensure program at least three times per year, during the January, May, and September sessions and select campuses may offer additional opportunities to start.

RN-BSN Option

Admission to the RN-BSN option requires a nursing diploma or Associate Degree in Nursing from an accredited institution, a minimum grade point average of 2.0, and a current, active, unrestricted RN license in the U.S. or other jurisdiction that is an associate member of the National Council of State Boards of Nursing (“NCSBN”). Chamberlain enrolls students in its RN-BSN program six times per year, during the January, March, May, July, September, and November sessions.

Graduate Programs

To enroll in graduate programs, students must have the requisite undergraduate academic degree from an accredited institution and a specified minimum grade point average. Applicants to some programs are also required to provide additional materials and information such as recommendation letters or background checks and/or interview with and be approved by faculty.

Chamberlain enrolls students in its graduate nursing, MPH, and MSW programs six times per year, during the January, March, May, July, September, and November sessions. Chamberlain enrolls students in its graduate MPAS program once a year in the September session.

Walden

For more than 50 years, Walden has provided an engaging learning experience for working professionals. Walden’s mission is to provide a diverse community of career professionals with the opportunity to transform themselves as scholar-practitioners so that they can effect positive social change. Walden seeks to empower students to use their new knowledge

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to think creatively about problem-solving for social good. This mission of education as applied to promoting social good has allowed Walden to attract an extraordinary community of students and faculty members who share a commitment to using knowledge to create real and lasting positive social change.

Founded in 1970 and first accredited by the Higher Learning Commission (“HLC”) in 1990, Walden has a strong legacy of providing innovative and alternative degree programs for adult students. Walden has grown to support more than 100 degree and certificate programs—including programs at the bachelor’s, master’s, education specialist, and doctoral levels—with over 350 specializations and concentrations. As of June 30, 2024, total student enrollment at Walden was 41,845, an increase of 11.3% compared to June 30, 2023. A primarily graduate institution, Walden has ranked #1 among 380 accredited institutions for awarding research doctorates to African American students and #1 in awarding graduate degrees in multiple disciplines to African American students. Walden has ranked #3 for awarding research doctoral degrees in psychology, public health, and social service professions to Hispanic students.

In addition, Walden has rich experience in delivering innovative accelerated programs through distance delivery. Walden also has experience in delivering accelerated course-based programs where students can customize modalities to speed their time to completion and degree completion programs (for example, the RN-BSN). Walden currently offers more than 25 programs/specializations and 1 certificate in a direct assessment competency-based education format through its Tempo® Learning modality. Through a culture of assessment and continuous improvement, Walden has developed the organization and resources required to deliver a quality academic learning experience to working adults via distance delivery. All Walden academic programs are delivered in an online format.

Walden’s colleges and programs are structured within two main divisions – the Division of Health Care Access and Quality and the Division of Social Support for Healthy Communities.

Walden believes this organizational structure supports its mission via a focused effort promoting healthy communities and healthy people, as identified through the U.S. Department of Health and Human Services’ Office of Disease Prevention and Health Promotion’s national effort in this area known as Healthy People 2030, supported by the Social Determinants of Health Framework.

Student Admissions and Admissions Standards

Walden has a long-standing commitment to providing educational opportunities to a diverse group of learners across all degree levels. Walden’s programs are enriched by the cultural, economic, and educational backgrounds of its students and instructors. In the admissions process, Walden selects individuals who can benefit from a distributed educational or online learning approach and who will use their Walden education to contribute to their academic or professional communities.

For admissions review to take place, applicants must submit an online application for their intended program of study and an official transcript with a qualifying admitting degree from a U.S. school accredited by a regional, professional/specialized, or national accrediting organization recognized by the Council for Higher Education Accreditation or the ED, or from an appropriately accredited non-U.S. institution. Additional materials or requirements to submit may vary depending on the academic program.

All applicants to the bachelor’s program are required to have earned, at a minimum, a recognized high school diploma, high school equivalency certificate, or other state-recognized credential of high school completion. Applicants with degrees and coursework from a non-U.S. institution have their academic record evaluated for comparability to a U.S. degree or coursework by our Global Transcript Evaluation (“GTE”) service offered by Walden or any credential evaluation service that is a member of the National Association of Credential Evaluation Services (“NACES”) or member of Association of International Credential Evaluators (“AICE”).

Applicants may be offered conditional admission to Walden with a stipulation for academic performance at the level of a grade point average of 3.0 or higher for master’s and doctoral students or a grade point average of 2.0 or higher for undergraduate students, the successful completion of academic progress requirements during the initial term(s) of enrollment, the completion of prerequisites, and/or other stipulations (including receipt of official records).

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Medical and Veterinary

Together, AUC, RUSM, and RUSVM, along with the Medical Education Readiness Program (“MERP”) and the Veterinary Preparation Program, had 4,726 students enrolled in the May 2024 semester, a decrease of 2.9% compared to the same semester last year.

AUC and RUSM

AUC, founded in 1978 and acquired by Adtalem in 2011, provides medical education and confers the Doctor of Medicine degree. AUC is located in St. Maarten and is one of the most established international medical schools in the Caribbean, having produced over 7,500 graduates from over 78 countries since its founding. The mission of AUC is to train tomorrow’s physicians, whose service to their communities and their patients is enhanced by international learning experiences, a diverse learning community, and an emphasis on social accountability and engagement.

RUSM, founded in 1978 and acquired by Adtalem in 2003, provides medical education and confers the Doctor of Medicine degree. RUSM is located in Barbados and has graduated more than 15,000 physicians since inception. The mission of RUSM is to deliver an innovative and experiential medical education program in an inclusive environment of scholars that fosters professional growth and leadership for a diverse pool of students to become ethical, compassionate, patient-centric, culturally competent physicians who advance healthcare in local and global communities.

AUC’s and RUSM’s programs consist of three academic semesters per year, which begin in January, May, and September, allowing students to begin their basic science instruction at the most convenient time for them.

Initially, AUC and RUSM students complete a program of concentrated study of medical sciences after which eligible students sit for U.S. Medical Licensing Examination (“USMLE”), Step 1, which assesses whether students understand and can apply scientific concepts that are basic to the practice of medicine. Under AUC and RUSM direction, students then complete the remainder of their program by participating in clinical rotations conducted at over 40 affiliated teaching hospitals or medical centers connected with accredited graduate medical education programs in the U.S., Canada, and the U.K. Towards the end of the clinical training and prior to graduation, AUC and RUSM students take USMLE, Step 2 CK (Clinical Knowledge), which assesses ability to apply medical knowledge, skills, and understanding of clinical science essential for the provision of patient care under supervision and includes emphasis on health promotion and disease prevention. Successfully passing USMLE, Step 2 Clinical Skills previously was a requirement for graduation and for certification by the Educational Commission for Foreign Medical Graduates (“ECFMG”) to enter the U.S. residency match. USMLE Step 2 Clinical Skills has been discontinued indefinitely. ECFMG has developed alternative pathways to replace this requirement, for which AUC’s and RUSM’s graduates are generally eligible.

Upon successful completion of their medical degree requirements, students apply for a residency position in their area of specialty through the National Residency Matching Program (“NRMP”). This process is also known as “The Match”® and utilizes an algorithm to “match” applicants to programs using the certified rank order lists of the applicants and program directors.

Of first-time eligible AUC graduates, 97% and 98% attained residency positions in 2023 and 2024, respectively.

Of first-time eligible RUSM graduates, 98% and 98% attained residency positions in 2023 and 2024, respectively.

In September 2019, AUC opened its medical education program in the U.K. in partnership with University of Central Lancashire (“UCLAN”). The program offers students a Post Graduate Diploma in International Medical Sciences from UCLAN, followed by their Doctor of Medicine degree from AUC. Students are eligible to do clinical rotations at AUC’s clinical sites, which include hospitals in the U.S., Canada, and the U.K. This program is aimed at preparing students for USMLEs.

MERP is a 15-week medical school preparatory program focused on enhancing the academic foundation of prospective AUC and RUSM students and providing them with the skills they need to be successful in medical school and to achieve their goals of becoming physicians. Upon successful completion of the MERP program, students are guaranteed admission to AUC or RUSM.

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RUSVM

RUSVM, founded in 1982 and acquired by Adtalem in 2003, provides veterinary education and confers the Doctor of Veterinary Medicine, as well as Masters of Science and Ph.D. degrees. RUSVM is accredited by the American Veterinary Medical Association (“AVMA”). RUSVM is located in St. Kitts and has graduated nearly 6,000 veterinarians since inception. The mission of RUSVM is to provide the best learning environment to prepare students to become members and leaders of the worldwide public and professional healthcare team, advancing human and animal health–One Health–through research and knowledge exchange.

The RUSVM program is structured to provide a veterinary education that is comparable to educational programs at U.S. veterinary schools. RUSVM students complete a seven-semester, pre-clinical curriculum at the campus in St. Kitts. After completing their pre-clinical curriculum, RUSVM students enter a clinical clerkship under RUSVM direction lasting approximately 45 weeks at clinical affiliates located in the U.S., Canada, Australia, Ireland, New Zealand, and the U.K.

RUSVM offers a one-semester Veterinary Preparatory Program (“Vet Prep”) designed to enhance the pre-clinical science knowledge and study skills that are critical to success in veterinary school.

Student Admissions and Admissions Standards

AUC, RUSM, and RUSVM employ regional admissions representatives in locations throughout the U.S. and Canada who provide information to students interested in their respective programs. A successful applicant must have completed the required prerequisite courses and, for AUC and RUSM U.S. students, taken the Medical College Admission Test (“MCAT”), while RUSVM applicants are strongly encouraged but not required to have completed the Graduate Record Exam (“GRE”). Candidates for admission must interview with an admissions representative and all admission decisions are made by the admissions committees of the medical and veterinary schools. AUC allows several entrance examinations for its international students.

Market Trends and Competition

Chamberlain

Chamberlain competes in the U.S. nursing education market, which has more than 2,000 programs leading to RN licensure. These include four-year educational institutions, two-year community colleges, and less-than-2-year schools. The market consists of two distinct segments: pre-licensure nursing programs that prepare students to take the NCLEX-RN licensure exam and post-licensure nursing programs that allow existing RNs to advance their education.

In the pre-licensure nursing market, capacity limitations and restricted new student enrollment are common among traditional four-year educational institutions and community colleges. Chamberlain has 23 campuses located in 15 states and an online BSN program offered in 33 states. In Fall 2023, according to data obtained from the American Association of Colleges of Nursing (“AACN”), Chamberlain had the largest pre-licensure program in the U.S. based on total enrollments.

In post-licensure nursing education, there are more than 700 institutions offering RN-BSN programs and more than 600 institutions offering MSN programs. Chamberlain’s RN-BSN degree completion option has received three certifications from Quality Matters, an independent global organization leading quality assurance in online teaching and learning environments. Chamberlain has earned the Online Learning Support, Online Teaching Support, and Online Learner Success certifications.

In Fall 2023, according to AACN data, Chamberlain had the largest DNP, MSN, and FNP programs in the U.S based on total enrollments.

Walden

The market for fully online higher education, in which Walden competes, remains a competitive and growing space. As a comprehensive university offering degrees at the bachelor’s, master’s and doctoral level, in addition to certificates and a school of lifelong learning, the competition varies depending on the degree level and the discipline. While Walden’s

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target market of working professionals 25 years and older was once underserved, it now has a variety of options to meet the growing need for higher education.

Walden has degree programs in nursing, education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice. Walden competes both with other comprehensive universities and also more narrowly focused schools, which may only offer a few degree programs. Given the growing and ever-changing market, Walden competes with a wide variety of higher education institutions as well as other education providers.

Walden competes with traditional public and private non-profit institutions and for-profit schools. As more campus-based institutions offer online programs, the competition for online higher education has been growing. Typically, public universities charge lower tuitions compared with Walden due to state subsidies, government grants, and access to other financial resources. On the other hand, tuition at private non-profit institutions is higher than the average tuition rates at Walden. Walden competes with other educational institutions principally based on price, quality of education, reputation, learning modality, educational programs, and student services.

Walden has over 50 years of experience offering high quality distance education. Walden remains a leader in many areas and is one of the leading doctoral degree conferrers in nursing, public health, public policy, business/management, education, and psychology and one of the leading conferrers of master’s degrees in nursing, psychology, social work, human services, education, and counseling.

Medical and Veterinary

AUC and RUSM compete with U.S. schools of medicine, U.S. colleges of osteopathic medicine, and Caribbean medical schools as well as with international medical schools recruiting U.S. students who may be eligible to receive funding from ED Title IV programs. RUSVM competes with U.S.-based and international AVMA accredited schools.

There has been some recent expansion in the U.S. medical education and veterinary education enrollment capacities because of the growing supply/demand imbalance for medical doctors and veterinarians. Despite this expansion, management believes the imbalance will continue to spur demand for medical and veterinary education.

Accreditation and Other Regulatory Approvals

Educational institutions and their individual programs are awarded accreditation by achieving a level of quality that entitles them to the confidence of the educational community and the public they serve. Accredited institutions are subject to periodic review by accrediting bodies to ensure continued high performance and institutional and program improvement and integrity, and to confirm that accreditation requirements continue to be satisfied.

Chamberlain

Chamberlain is institutionally accredited by the HLC, an institutional accreditation agency recognized by ED. In addition to institutional accreditation, Chamberlain has also obtained programmatic accreditation for specific programs. BSN, MSN, DNP, and post-graduate Advanced Practice Registered Nurses (“APRN”) certificate programs are accredited by the Commission on Collegiate Nursing Education (“CCNE”). Chamberlain’s MPH program is accredited by the Council on Education for Public Health. Chamberlain’s MSW program is accredited by the CSWE’s Commission on Accreditation. The Accreditation Review Commission on Education for the Physician Assistant (“ARC-PA”) has granted Accreditation-Provisional status to the Master of Physician Assistant Studies program. Accreditation-Provisional is an accreditation status granted when the plans and resource allocation, if fully implemented as planned, of a proposed program that has not yet enrolled students appear to demonstrate the program’s ability to meet the ARC-PA Standards or when a program holding Accreditation-Provisional status appears to demonstrate continued progress in complying with the Standards as it prepares for the graduation of the first class (cohort) of students. Accreditation-Provisional does not ensure any subsequent accreditation status. It is limited to no more than five years from matriculation of the first class. Additionally, Chamberlain is an accredited provider of nursing continuing professional development credits by the American Nursing Credentialing Center.

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Walden

Walden is also institutionally accredited by the HLC. In addition to its institutional accreditation, a number of Walden’s programs have obtained programmatic accreditation. The BS in Information Technology program is accredited by the Accreditation Board for Engineering and Technology. A number of business programs (BS in Business Administration, Master of Business Administration, MS in Finance, Doctor of Business Administration, and Ph.D. in Management) are accredited by the Accreditation Council for Business Schools and Programs (“ACBSP”). The BS and MS in Accounting programs are accredited by ACBSP’s Separate Accounting Accreditation. The BSN, MSN, Post-Master’s APRN certificates, and DNP programs are accredited by CCNE. The MS in Addiction Counseling, MS in School Counseling, MS in Clinical Mental Health Counseling, MS in Marriage, Couple, and Family Counseling, and Ph.D. in Counselor Education and Supervision programs are accredited by the Council for Accreditation of Counseling and Related Education Programs. Walden’s initial teacher preparation programs, BS in Elementary Education and Master of Arts in Teaching with a specialization in Special Education, and advanced educator preparation programs, education specialist in Educational Leadership and Administration and MS in Education with a specialization in Educational Leadership and Administration, in the Richard W. Riley College of Education and Human Sciences are accredited by the Council for the Accreditation of Educator Preparation. The MPH and Doctor of Public Health programs are accredited by the Council on Education for Public Health. The Bachelor of Social Work and MSW programs are accredited by the CSWE. Additionally, Walden is an accredited provider of continuing education credits by the American Nursing Credentialling Center.

Medical and Veterinary

The Government of St. Maarten authorizes AUC to confer the Doctor of Medicine degree. AUC is accredited by the Accreditation Commission on Colleges of Medicine (“ACCM”). The ACCM is an international medical school accrediting organization for countries that do not have a national medical school accreditation body. The U.S. Department of Education National Committee on Foreign Medical Education and Accreditation (“NCFMEA”) has affirmed that the ACCM has established and enforces standards of educational accreditation that are comparable to those promulgated by the U.S. Liaison Committee on Medical Education (“LCME”). In addition, AUC is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, and New York, where robust processes are in place to evaluate and approve an international medical school’s programs. AUC students can join residency training programs in all 50 states. AUC has also been deemed acceptable by the Graduate Medical Council (“GMC”), the accrediting body in the U.K., which allows AUC graduates to apply for residency programs in the U.K.

RUSM’s primary accreditor is Caribbean Accreditation Authority for Education in Medicine and other Health Professions (“CAAM-HP”). CAAM-HP is authorized to accredit medical programs by the government of Barbados. On July 26, 2018, Barbados authorized RUSM to confer the Doctor of Medicine degree. The NCFMEA has affirmed that CAAM-HP has established and enforces standards of educational accreditation that are comparable to those promulgated by the LCME. In addition, RUSM is authorized to place students in clinical rotations in the majority of U.S. states, including California, Florida, New Jersey, and New York, where robust processes are in place to evaluate and accredit an international medical school’s programs. RUSM students can join residency training programs in all 50 states.

RUSVM has been recognized by the government of the Federation of St. Christopher and Nevis (“St. Kitts”) and is chartered to confer the Doctor of Veterinary Medicine degree. The Doctor of Veterinary Medicine degree is accredited by the American Veterinary Medical Association Council on Education (“AVMA COE”). RUSVM has affiliations with many AVMA-accredited U.S. and international colleges of veterinary medicine so that RUSVM students can complete their final three clinical semesters of study in the U.S. or abroad. RUSVM has received accreditation for its Postgraduate Studies program from the St. Christopher & Nevis Accreditation Board. The Postgraduate Studies program offers Master of Science and Ph.D. degrees in all research areas supported by RUSVM. Areas of emphasis are guided by RUSVM's themed research centers.

Financial Aid

Like other higher education companies, Adtalem is dependent upon the timely receipt of federal financial aid funds. All public financial aid programs are subject to political and governmental budgetary considerations. Adtalem’s institutions and their students participate in a wide range of financial aid programs, including U.S. federal financial aid, state financial aid, Canadian financial aid, private loan programs, tax-favored programs, Adtalem-provided financial assistance, and

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employer-provided financial assistance. In the U.S., the Higher Education Act (as reauthorized, the “HEA”) guides the federal government’s support of postsecondary education. If there are changes to financial aid programs that restrict student eligibility or reduce funding levels, Adtalem’s financial condition and cash flows could be materially and adversely affected. See Item 1A. “Risk Factors” for a discussion of student financial aid related risks.

Legislative and Regulatory Requirements

Government-funded financial assistance programs are governed by extensive and complex regulations in the U.S. Like any other educational institution, Adtalem’s institutions’ administration of these programs is periodically reviewed by regulatory agencies and is subject to audit or investigation by other authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding.

Our domestic postsecondary institutions are subject to extensive federal and state regulations. The HEA and the related ED regulations govern all higher education institutions participating in Title IV programs and provide for a regulatory triad by mandating specific regulatory responsibilities for each of the following: (1) the federal government through ED, (2) the accrediting agencies recognized by ED, and (3) state higher education regulatory bodies. Therefore, to be eligible to participate in Title IV programs, a postsecondary institution must be accredited by an agency recognized by ED, must comply with the HEA and all applicable regulations thereunder, and must be authorized to operate by the appropriate higher education authority in each state in which the institution operates, as applicable.

In addition to governance by the regulatory triad, there has been increased focus by members of the U.S. Congress and federal agencies, including ED, the Consumer Financial Protection Bureau (“CFPB”), and the Federal Trade Commission (“FTC”), on the role that proprietary educational institutions play in higher education. We expect that this regulatory environment will continue for the foreseeable future.

Changes in or new interpretations of applicable laws, rules, or regulations could have a material adverse effect on our eligibility or cost to participate in Title IV programs, to meet accreditation standards or comply with state authorization requirements. The failure to maintain or renew any required regulatory approvals, accreditation, or state authorizations could have a material adverse effect on us. ED regulations regarding financial responsibility provide that, if any one of our Title IV participating institutions (“Title IV institutions”) is unable to pay its obligations under its program participation agreement (“PPA”) as a result of operational issues and/or an enforcement action, our other Title IV institutions, regardless of their compliance with applicable laws and regulations, would not be able to maintain their Title IV eligibility without assisting in the repayment of the non-compliant institution’s Title IV obligations. As a result, even though Adtalem’s Title IV institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Adtalem’s other Title IV institutions and Adtalem as a whole and could result in the imposition of significant restrictions on the ability of Adtalem’s other Title IV institutions and Adtalem as a whole to operate. For further information, see “A bankruptcy filing by us or by any of our Title IV institutions, or a closure of one of our Title IV institutions, would lead to an immediate loss of eligibility to participate in Title IV programs” under subsection “Risks Related to Adtalem’s Regulated Industry” in Item 1A. “Risk Factors.”

Financial Responsibility

Institutions must pass a financial responsibility test defined by the U.S. Department of Education (“ED”), also known as a “composite score,” to maintain eligibility to participate in Title IV aid programs. For Adtalem’s institutions, this test is calculated at the consolidated Adtalem level. Applying various financial elements from the fiscal year audited financial statements, the score is a composite of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A score greater than or equal to 1.5 indicates the institution is considered financially responsible. Scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible but require additional oversight. For example, institutions with scores in this range are subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is not considered financially responsible but may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year).

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For the past several years, Adtalem’s composite score was greater than 1.5. However, on September 25, 2023, ED notified Adtalem that its fiscal year 2022 composite score had declined to 0.2. As previously disclosed, this was expected due to the acquisition of Walden and other transactions. ED advised that Adtalem’s five institutions will be permitted to continue to participate in Title IV under provisional certifications with heightened cash monitoring and continued reporting. A letter of credit in the amount of $157.9 million, representing 10% of the consolidated Title IV funds Adtalem’s institutions received during fiscal year 2022, was delivered to ED on November 1, 2023. Management does not believe these conditions will have a material adverse effect on Adtalem’s operations.

The financial responsibility rules include other mandatory or discretionary triggers that could require an institution to post a letter of credit. ED recently amended the financial responsibility regulation and the changes took effect July 1, 2024. The changes include additional triggers which could require additional letters of credit.

Program Participation Agreement (“PPA”)

All institutions must apply periodically for continued certification to participate in Title IV programs. Such recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in control. ED may place an institution on provisional certification status if it finds that the institution does not fully satisfy all of the eligibility and certification standards and in certain other circumstances, such as when an institution is certified for the first time or undergoes a change in control. During the period of provisional certification, the institution must comply with any additional conditions included in the institution’s PPA. In addition, ED may more closely review an institution that is provisionally certified if it applies for recertification or approval to open a new location, add an educational program, acquire another institution, or make any other significant change. Students attending provisionally certified institutions remain eligible to receive Title IV program funds. If ED determines that a provisionally certified institution is unable to meet its responsibilities under its PPA, it may seek to revoke the institution’s certification to participate in Title IV programs without advance notice or opportunity for the institution to challenge the action.

Chamberlain was most recently recertified and issued an unrestricted PPA in September 2020, with a reapplication date of June 30, 2024. The lengthy PPA recertification process is such that ED allows unhampered continued access to Title IV funding after PPA expiration, so long as materially complete applications are submitted at least 90 days in advance of expiration. A complete application for Chamberlain’s PPA recertification has been timely submitted to ED.

During the fourth quarter of fiscal year 2024, ED provisionally recertified AUC and RUSM’s Title IV PPAs through March 31, 2025. RUSVM has been notified that its application to renew its participation in Title IV programs has been completed and approved by ED.

During the first quarter of fiscal year 2025, ED approved Walden’s change in ownership application and issued Walden a provisional PPA through June 30, 2025.

The provisional nature of the PPAs stemmed from Adtalem’s composite score declining and failing to meet ED’s standards of financial responsibility as defined above. See “Financial Responsibility” in Item 1. “Business” for additional information.

Walden, AUC, and RUSM’s provisional PPAs included financial requirements, such as letter of credit, heightened cash monitoring, and additional reporting. We do not believe these requirements will have a material effect on Adtalem’s financial position or results of operations. Walden also is subject to common restrictions following an acquisition limiting changes to its educational programs, including a prohibition on the addition of new programs or locations that had not been approved by ED prior to the change in ownership for a period established by ED. With the approval of its change in ownership, Walden has the ability to request ED approval for new programs.

ED has recently allowed reductions in our letters of credit totaling $90.8 million. On January 31, 2024, ED allowed a $76.2 million letter of credit in favor of ED to expire without any requirement for Adtalem to renew it. On April 26, 2024, ED indicated that it would permit Adtalem to reduce its $84.0 million surety-backed letter of credit in favor of ED on behalf of Walden, which allows Walden to participate in Title IV programs, to $69.4 million, which took effect on June 24, 2024, and was extended through December 31, 2024. In addition, Adtalem had a letter of credit outstanding under its Revolver in the amount of $157.9 million as of June 30, 2024, in favor of ED, which allows Adtalem institutions to

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participate in Title IV programs. As of June 30, 2024, Adtalem had $227.3 million of letters of credit outstanding in favor of ED. See Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Notes and our Credit Agreement.

Gainful Employment

The HEA requires certificate programs at all Title IV institutions and degree programs at proprietary Title IV institutions to prepare students for gainful employment in a recognized occupation. In October 2023, ED released new Financial Value Transparency (“FVT”) and Gainful Employment (“GE”) rules effective July 1, 2024. GE programs must meet a debt-to-earnings test in which graduates’ annual debt payments must not exceed 8% of their annual earnings or 20% of their discretionary earnings. GE programs must also meet an earnings premium test in which graduates’ earnings must exceed those of a typical high school graduate. Under the regulation, programs that fail either metric must provide warnings to students and prospective students that the program is at risk of losing Title IV eligibility, and programs that fail the same measure in two out of three consecutive years lose Title IV eligibility. The GE regulation also includes a transparency framework in which debt-to-earnings, earnings premium, and a wide range of other program outcomes for all Title IV programs are disclosed on a website hosted by ED. Because there are many factors and unknowns, including the future earnings of program graduates, Adtalem is reviewing the regulation to determine what impact, if any, the regulation will have on its programs. In addition, multiple parties are seeking to block enforcement of the FVT/GE rule under the Administrative Procedure Act and other legal theories.

The “90/10 Rule”

An ED regulation known as the “90/10 Rule” affects only proprietary institutions participating in Title IV programs, including each of Adtalem’s institutions. An institution that does not meet the 90% threshold for two consecutive fiscal years loses its eligibility to participate in Title IV programs. Previously, an institution could not derive more than 90% of its revenue on a cash basis from Title IV financial aid funds. In March 2021, the American Rescue Plan Act amended the 90/10 calculation to require no more than 90% of revenue at proprietary institutions be derived from any federal education assistance funds, including but not limited to previously excluded U.S. Department of Veterans Affairs benefits and Department of Defense tuition assistance funds. This change was subject to negotiated rulemaking with the final rule published by ED in October 2022. The amended rule applies to an institution’s fiscal years beginning on or after January 1, 2023. For Adtalem’s institutions, the updated 90/10 rule is therefore effective with the calculation for fiscal year 2024.

The following table shows the 90/10 rates for each Adtalem institution for fiscal years 2023 and 2022 based on the old 90/10 rules still in effect for those periods. Final rates for fiscal year 2024 are not yet available. We are including Walden’s amounts for the full fiscal year 2022 even though Walden was under Adtalem’s ownership for only a portion of that fiscal year. We are also providing a consolidated rate for Adtalem even though it is not subject to 90/10 requirements.

​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year |
​ | ​ | 2023 | ​ | 2022 |
Chamberlain University |  | 65 | % | 65 | %
Walden University | ​ | 78 | % | 73 | %
American University of the Caribbean School of Medicine |  | 81 | % | 81 | %
Ross University School of Medicine |  | 87 | % | 85 | %
Ross University School of Veterinary Medicine |  | 79 | % | 81 | %
Consolidated |  | 75 | % | 72 | %

Certification Procedures

The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution participating in the Title IV programs must be certified to participate through a PPA and certification must be periodically renewed. Institutions that violate certain ED Title IV regulations or the terms of the PPA may lose eligibility to participate in Title IV programs or may only continue participation under provisional certification. Provisional certification status also carries fewer due process protections than full certification. As a result, ED may revoke an institution’s certification more easily than if it is fully certified. Provisional certification does not otherwise limit access to Title IV program funds by students attending the institution, but ED has discretion to limit institutional growth.

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Borrower Defense to Repayment

Under the HEA, ED is authorized to specify acts or omissions of an institution that a borrower may assert as a Defense to Repayment of their Title IV loans made under the Federal Direct Loan Program. New Borrower Defense to Repayment regulations were scheduled to go into effect on July 1, 2023 that include a lower threshold for establishing misrepresentation, no statute of limitation for claims submission, expanded reasons to file a claim including aggressive or deceptive recruitment tactics and omission of fact, weakened due processes afforded to institutions, and reinstated provisions for group discharges. ED also included a six-year statute of limitations for recovery of funds from institutions. These changes would increase financial liability and reputational risk for Adtalem. However, the updated rules have not yet been implemented due to pending litigation from another party based on the Administrative Procedure Act and other legal theories.

Incentive Compensation

An educational institution participating in Title IV programs may not pay any commission, bonus, or other incentive payments to any person involved in student recruitment or awarding of Title IV program funds, if such payments are based directly or indirectly in any part on success in enrolling students or obtaining student financial aid. The law and regulations governing this requirement have not established clear criteria for compliance in all circumstances, which increased the uncertainty about what constitutes incentive compensation and which employees are covered by the regulation.

Administrative Capability

The HEA directs ED to assess the administrative capability of each institution to participate in Title IV programs. The failure of an institution to satisfy any of the criteria may cause ED to determine that the institution lacks administrative capability and, therefore, subject the institution to additional scrutiny, provisional certification, or revocation of eligibility for Title IV programs. ED recently amended the administrative capability regulations and the changes took effect July 1, 2024. The changes include additional tests of administrative capability that Adtalem’s institutions must meet. Management does not expect that Adtalem’s institutions will fail to meet these requirements.

State Authorization

Institutions that participate in Title IV programs must be authorized to operate by the appropriate postsecondary regulatory authority in each state where the institution has a physical presence.

In the U.S., each Chamberlain location is approved to grant degrees by the respective state in which it is located. Chamberlain has obtained licensure in each state which requires such licensure and where students are enrolled. Chamberlain also meets state licensure requirements as a participant in the National Council for State Authorization Reciprocity Agreements (“NC-SARA”). Walden is registered in its home state of Minnesota with the Minnesota Office of Higher Education. Walden does not participate in NC-SARA but maintains licenses or exemptions in each state which requires such licensure and where students are enrolled. AUC, RUSM, and RUSVM clinical programs are accredited as part of their programs of education by their respective accrediting bodies, approved by the appropriate boards in those states that have a formal process to do so, and are reported to ED as required.

Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted $44.3 million of surety bonds as of June 30, 2024 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM.

Certain states have standards of financial responsibility that differ from those prescribed by federal regulation. When an Adtalem institution is unable to meet those state’s requirements, it may be required to cease operations in that state.

Cohort Default Rate (“CDR”)

All institutions that participate in Title IV programs must meet a CDR test for former students who entered repayment on Title IV loans received while enrolled at the institution. The rate represents the percent of students defaulting on one or more Title IV loans within three years of entering repayment during a federal fiscal year. Institutions may lose Title IV eligibility if the most recent CDR exceeds 40% or if each of the three most recent CDRs exceed 30%.

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The three-year CDRs for Adtalem’s institutions are shown below for the three most recent cohort years. According to ED, the default rate for all Title IV institutions nationally was 0.0% for the fiscal year 2020 cohort, 2.3% for the fiscal year 2019 cohort, and 7.3% for the fiscal year 2018 cohort. The default rate has been declining over the past few years due to COVID relief measures which included a freeze on loan payments and suspension of default statuses.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Cohort Default Rate |
​ | ​ | 2020 | ​ | 2019 |  | 2018 |
Chamberlain University | ​ | 0.0 | % | 0.5 | % | 2.6 | %
Walden University | ​ | 0.0 | % | 1.1 | % | 4.7 | %
American University of the Caribbean School of Medicine | ​ | 0.0 | % | 0.2 | % | 0.7 | %
Ross University School of Medicine | ​ | 0.0 | % | 0.2 | % | 0.9 | %
Ross University School of Veterinary Medicine | ​ | 0.0 | % | 0.2 | % | 0.4 | %

Satisfactory Academic Progress

In addition to the requirements that educational institutions must meet, student recipients of financial aid must maintain satisfactory academic progress toward completion of their program of study and an appropriate grade point average.

Change of Ownership or Control

Any material change of ownership or change of control of Adtalem, depending on the type of change, may have significant regulatory consequences for each of our Title IV institutions. Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors, reauthorization by each institution’s state licensing agencies, and/or providing financial protections. If Adtalem experiences a material change of ownership or change of control, then our Title IV institutions may cease to be eligible to participate in Title IV programs until recertified by ED. There is no assurance that such recertification would be obtained. After a material change in ownership or change of control, most institutions will participate in Title IV programs on a provisional basis for a period of one to three years.

In addition, each Title IV institution is required to report any material change in stock ownership to its principal institutional accrediting body and would generally be required to obtain approval prior to undergoing any transaction that affects, or may affect, its corporate control or governance. In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, and that evaluation may include a comprehensive review.

In addition, some states in which our Title IV institutions are licensed require approval (in some cases, prior approval) of changes of ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change of ownership or control.

Refer to the risk factor titled “If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditation and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business” under subsection “Risks Related to Adtalem’s Regulated Industry” in Item 1A. “Risk Factors.”

Seasonality

The seasonal pattern of Adtalem’s enrollments and its educational programs’ starting dates affect the timing of cash flows with higher cash inflows at the beginning of academic sessions.

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Human Capital

As of June 30, 2024, Adtalem had the following number of employees:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Full-Time | ​ | Part-Time | ​ | Temporary | ​ | Visiting | ​ | ​
​ | ​ | Staff | ​ | Staff | ​ | Staff | ​ | Professors | ​ | Total
Chamberlain | ​ | 1,426 | ​ | 14 | ​ | 163 | ​ | 2,680 | ​ | 4,283
Walden | ​ | 1,174 | ​ | 14 | ​ | 1 | ​ | 2,269 | ​ | 3,458
Medical and Veterinary | ​ | 747 | ​ | 17 | ​ | 58 | ​ | 86 | ​ | 908
Home Office | ​ | 1,277 | ​ | 7 | ​ | 5 | ​ | — | ​ | 1,289
Total | ​ | 4,624 | ​ | 52 | ​ | 227 | ​ | 5,035 | ​ | 9,938

Our management believes that Adtalem has good relations with its employees.

We continue to regularly gather feedback from our employees. During fiscal year 2024, we conducted an engagement survey to gain insight into how our employees perceive their work environment. The engagement survey includes 18 dimensions comprised of 55 questions. Two of the key dimensions are engagement and enablement. Engagement is the “want to” of work, or more specifically, whether employees are committed to the organization and if they are willing to put in extra effort for the good of the organization. Enablement is the “can do” of work, meaning employee skills and abilities are fully utilized in their roles and whether the organization environment supports them in getting their work done. Regarding key dimensions in the survey (engagement, enablement, collaboration, and diversity, equity, and inclusion) Adtalem consistently aligns with or outpaces similar organizations in ratings. We partner with Korn Ferry for high performing organization and global industry norm benchmark data. Selected results from our 2024 engagement survey as compared to global industry norm benchmark data were as follows:

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Favorability | ​ | ​ | Global | ​
Topic | ​ | (top 2 ratings) | ​ | ​ | Industry | ​
Engagement Fall 2023 engagement survey favorability in the dimension of engagement | ​ | 66 | % | ​ | 71 | %
Enablement Fall 2023 engagement survey favorability in the dimension of enablement | ​ | 70 | % | ​ | 72 | %
Collaboration Fall 2023 engagement survey favorability in the dimension of collaboration | ​ | 73 | % | ​ | 67 | %
Diversity, Equity, and Inclusion Fall 2023 engagement survey favorability in the dimension of diversity, equity, and inclusion | ​ | 82 | % | ​ | 79 | %

In January 2024, we moved to a new vendor for lifecycle surveys. This vendor is our current payroll and HRIS vendor UKG. UKG partners with Mercer for survey questions and benchmark data. The lifecycle survey gathers feedback at 30 days and at six months for regular new hires. We also send out an exit survey to regular colleagues that voluntarily resign. Mercer does not have specific exit benchmark data for comparison. The overall experience results of these surveys were as follows:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year 2024 | ​ | ​ | Fiscal Year 2023 | ​
​ | ​ | Favorability | ​ | ​ | Mercer Benchmark | ​ | ​ | Favorability | ​
Survey | ​ | (top 2 ratings) | ​ | ​ | (top 2 ratings) | ​ | ​ | (top 2 ratings) | ​
30-Day check-in | ​ | 93 | % | ​ | 73 | % | ​ | 92 | %
6-Month check-in | ​ | 85 | % | ​ | 75 | % | ​ | 86 | %
Exit survey | ​ | 68 | % | ​ | n/a | ​ | ​ | 56 | %

Diversity, Equity, and Inclusion (“DEI”) continue to be core tenets of our culture at Adtalem. We continuously measure representation amongst our employee population. As shown in the table below, our total female representation and people of color representation stayed relatively the same from the prior year.

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As of June 30, 2024 and 2023, our employee diversity was as follows:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Female | ​ | ​ | People of Color (U.S. Only) | ​
Level | ​ | June 30, 2024 | ​ | ​ | June 30, 2023 | ​ | ​ | June 30, 2024 | ​ | ​ | June 30, 2023 | ​
All Levels | ​ | 72 | % | ​ | 71 | % | ​ | 37 | % | ​ | 37 | %
Management | ​ | 70 | % | ​ | 70 | % | ​ | 34 | % | ​ | 34 | %
Director | ​ | 66 | % | ​ | 67 | % | ​ | 23 | % | ​ | 24 | %
Executive | ​ | 50 | % | ​ | 47 | % | ​ | 21 | % | ​ | 23 | %
Segment | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Chamberlain | ​ | 87 | % | ​ | 80 | % | ​ | 36 | % | ​ | 38 | %
Walden | ​ | 74 | % | ​ | 72 | % | ​ | 32 | % | ​ | 34 | %
Medical and Veterinary | ​ | 60 | % | ​ | 60 | % | ​ | 59 | % | ​ | 57 | %
Home Office | ​ | 60 | % | ​ | 61 | % | ​ | 40 | % | ​ | 39 | %

Adtalem offers a comprehensive benefits package including wellness programs for eligible employees. The wellness strategy entitled Live Well takes a holistic approach to wellbeing through four pillars: physical, social, financial, and emotional. Our health benefits remain competitive with generous paid time off, retirement plan, domestic partner benefits, adoption assistance, paid parent leave for both mothers and fathers, among others. We recently launched enhancements to our Employee Assistance Program and our mental health and well-being application, entitled Headspace Care. Employee participation for certain programs is listed below:

​ | ​ | ​ | ​ | ​ | ​
Wellness Pillar | ​ | Segment: U.S. Regular Employees | ​ | Participation | ​
Financial | ​ | Retirement planning (auto enrollment feature for new hires) | ​ | 98 | %
Emotional* | ​ | Mental health wellbeing - Headspace Care utilization | ​ | 20 | %
Physical | ​ | Employees completing annual physicals | ​ | 84 | %

*EAP standard utilization is 3-5%

Finally, Adtalem provides additional opportunities for employees to pursue their educational goals through our Education Assistance program. This program offers both tuition discounts and tuition reimbursement at multiple nationally and regionally accredited higher education institutions. We will continue to offer resources to maintain an engaged, healthy, and motivated workforce focused on meeting business goals.

Intellectual Property

Adtalem owns and uses numerous trademarks and service marks, such as “Adtalem,” “American University of the Caribbean,” “Chamberlain College of Nursing,” “Ross University,” “Walden University” and others. All trademarks, service marks, certification marks, patents, and copyrights associated with its businesses are owned in the name of Adtalem Global Education Inc. or a subsidiary of Adtalem Global Education Inc. Adtalem vigorously defends against infringements of its trademarks, service marks, certification marks, patents, and copyrights.

Available Information

We use our website (www.adtalem.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, as one means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor our website in addition to following press releases, SEC filings, and public conference calls, and webcasts. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts. You may also access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as well as other reports relating to us that are filed with or furnished to the Securities and Exchange Commission (“SEC”), free of charge in the investor relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The content of the websites mentioned above is not incorporated into and should not be considered a part of this report.

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Item 1A. Risk Factors

Adtalem’s business operations are subject to numerous risks and uncertainties, some of which are not entirely within our control. Investors should carefully consider the risk factors described below and all other information contained in this Annual Report on Form 10-K before making an investment decision with respect to Adtalem’s common stock. If any of the following risks are realized, Adtalem’s business, results of operations, financial condition, and cash flows could be materially and adversely affected, and as a result, the price of Adtalem’s common stock could be materially and adversely affected. Management cannot predict all the possible risks and uncertainties that may arise. Risks and uncertainties that may affect Adtalem’s business include the following:

Risks Related to Adtalem’s Regulated Industry

We are subject to regulatory audits, investigations, lawsuits, or other proceedings relating to compliance by the institutions in the Adtalem portfolio with numerous laws and regulations in the U.S. and foreign jurisdictions applicable to the postsecondary education industry.

Due to the regulated nature of proprietary postsecondary institutions, we are subject to audits, compliance reviews, inquiries, complaints, investigations, claims of non-compliance, and lawsuits by federal and state governmental agencies, regulatory agencies, accrediting agencies, present and former students and employees, shareholders, and other third parties, any of whom may allege violations of any of the legal and regulatory requirements applicable to us. If the results of any such claims or actions are unfavorable to us or one or more of our institutions, we may be required to pay monetary judgments, fines, or penalties, be required to repay funds received under Title IV programs or state financial aid programs, have restrictions placed on or terminate our schools’ or programs’ eligibility to participate in Title IV programs or state financial aid programs, have limitations placed on or terminate our schools’ operations or ability to grant degrees and certificates, have our schools’ accreditations restricted or revoked, or be subject to civil or criminal penalties. ED regulations regarding financial responsibility provide that, if any one of our Title IV institutions is unable to pay its obligations under its Program Participation Agreement (“PPA”) as a result of operational issues and/or an enforcement action, our other Title IV institutions, regardless of their compliance with applicable laws and regulations, would not be able to maintain their Title IV eligibility without assisting in the repayment of the non-compliant institution’s Title IV obligations. As a result, even though Adtalem’s Title IV institutions are operated through independent entities, an enforcement action against one of our institutions could also have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of Adtalem’s other Title IV institutions.

The ongoing regulatory effort aimed at proprietary postsecondary institutions of higher education could be a catalyst for additional legislative or regulatory restrictions, investigations, enforcement actions, and claims.

The proprietary postsecondary education sector has at times experienced scrutiny from federal legislators, agencies, and state legislators and attorneys general. An adverse disposition of these existing inquiries, administrative actions, or claims, or the initiation of other inquiries, administrative actions, or claims, could, directly or indirectly, have a material adverse effect on our business, financial condition, result of operations, and cash flows and result in significant restrictions on us and our ability to operate.

Adverse publicity arising from investigations, claims, or actions brought against us or other proprietary higher education institutions may negatively affect our reputation, business, or stock price, or attract additional investigations, lawsuits, or regulatory action.

Adverse publicity regarding any past, pending, or future investigations, claims, settlements, and/or actions against us or other proprietary postsecondary education institutions could negatively affect our reputation, student enrollment levels, revenue, profit, and/or the market price of our common stock. Unresolved investigations, claims, and actions, or adverse resolutions or settlements thereof, could also result in additional inquiries, administrative actions or lawsuits, increased scrutiny, the withholding of authorizations, and/or the imposition of other sanctions by state education and professional licensing authorities, taxing authorities, our accreditors and other regulatory agencies governing us, which, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

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Government and regulatory agencies and third parties have initiated, and could initiate additional investigations, claims, or actions against us, which could require us to pay monetary damages, halt certain business practices, or receive other sanctions. The defense and resolution of these matters could require us to expend significant resources.

Due to the regulatory and enforcement efforts at times directed at proprietary postsecondary higher education institutions and adverse publicity arising from such efforts, we may face additional government and regulatory investigations and actions, lawsuits from private plaintiffs, and shareholder class actions and derivative claims. We may incur significant costs and other expenses in connection with our response to, and defense, resolution, or settlement of, investigations, claims, or actions, or group of related investigations, claims, or actions, which, individually or in the aggregate, could be outside the scope of, or in excess of, our existing insurance coverage and could have a material adverse effect on our financial condition, results of operations, and cash flows. As part of our resolution of any such matter, or group of related matters, we may be required to comply with certain forms of injunctive relief, including altering certain business practices, or pay substantial damages, settlement costs, fines, and/or penalties. In addition, findings or claims or settlements thereof could serve as a basis for additional lawsuits or governmental inquiries or enforcement actions, including actions under ED’s Defense to Repayment regulations. Such actions, individually or combined with other proceedings, could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Additionally, an adverse allegation, finding or outcome in any of these matters could also materially and adversely affect our ability to maintain, obtain, or renew licenses, approvals, or accreditation, and maintain eligibility to participate in Title IV, Department of Defense and Veterans Affairs programs or serve as a basis for ED to discharge certain Title IV student loans and seek recovery for some or all of its resulting losses from us under Defense to Repayment regulations, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

ED has issued regulations setting forth new standards and procedures related to borrower defenses to repayment of Title IV loan obligations, and ED’s right of recoveries against institutions following a successful borrower defense and institutional financial responsibility. It is possible that a finding or allegation arising from current or future legal proceedings or governmental administrative actions may create significant liability under the proposed regulations.

Under the Higher Education Act (“HEA”), ED is authorized to specify in regulations which acts or omissions of an institution of higher education a borrower may assert as a Defense to Repayment of a Direct Loan made under the Federal Direct Loan Program. See “Borrower Defense to Repayment” in Item 1. “Business” for additional information.

Although legal action has for the time being blocked implementation of new Defense to Repayment regulations, the outcome of any legal proceeding instituted by a private party or governmental authority, facts asserted in pending or future lawsuits, and/or the outcome of any future governmental inquiry, lawsuit, or enforcement action (including matters described in Note 21 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”) could serve as the basis for claims by students or ED under the Defense to Repayment regulations, the posting of substantial letters of credit, or the termination of eligibility of our institutions to participate in the Title IV program based on ED’s institutional capability assessment, any of which could, individually or in the aggregate, have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

While we intend to defend ourselves vigorously in all pending and future legal proceedings, we may settle certain matters. Moreover, regardless of the merits of our actions and defenses, if we are unable to resolve certain legal proceedings or regulatory actions, indirect consequences arising from unproven allegations or appealable regulatory findings may have adverse consequences to us.

We may settle certain matters due to uncertainty in potential outcome, for strategic reasons, as a part of a resolution of other matters, or in order to avoid potentially worse consequences in inherently uncertain judicial or administrative processes. The terms of any such settlement could have a material adverse effect on our business, financial condition, operations, and cash flows, and result in the imposition of significant restrictions on us and our ability to operate. Additionally, although inconsistent with its usual practices, ED has broad discretion to impose significant limitations on us and our business operations arising from acts it determines are in violation of their regulations. As a result, foreseeable and unforeseeable consequences of prior and prospective adjudicated or settled legal proceedings and regulatory matters

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could have a material adverse effect on our business, financial condition, results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

Within Title IV regulations, pending or future lawsuits, investigations, program reviews, and other events could each trigger, automatically or in some cases at ED’s discretion, the posting of letters of credit or other securities.

ED has recently allowed Adtalem to reduce its outstanding letters of credit by $90.8 million. Nevertheless, ED regulations could require Adtalem to post multiple and substantial letters of credit or other securities in connection with, among other things, certain pending and future claims, investigations, and program reviews, regardless of the merits of our actions or available defenses, or, potentially, the severity of any findings or facts stipulated. The aggregate amount of these letters of credit or other required security could materially and adversely limit our borrowing capacity under our credit agreement and our ability to make capital expenditures and other investments aimed at growing and diversifying our operations, sustain and fund our operations, and make dividend payments to shareholders. Adtalem’s credit agreement allows Adtalem to post up to $400.0 million in letters of credit. In the event Adtalem is required to post letters of credit in excess of the $400.0 million limit, Adtalem would be required to seek an amendment to its credit agreement or seek an alternative means of providing security required by ED. Adtalem may not be able to obtain the excess letters of credit or security or may only be able to obtain such excess letters of credit or security at significant cost.

We are subject to risks relating to regulatory matters. If we fail to comply with the extensive regulatory requirements for our operations, we could face fines and penalties, including loss of access to federal and state student financial aid for our students, loss of ability to enroll students in a state, and significant civil liability.

As a provider of higher education, we are subject to extensive regulation. These regulatory requirements cover virtually all phases and aspects of our U.S. postsecondary operations, including educational program offerings, facilities, civil rights, safety, public health, privacy, instructional and administrative staff, administrative procedures, marketing and recruiting, financial operations, payment of refunds to students who withdraw, acquisitions or openings of new schools or programs, addition of new educational programs, and changes in our corporate structure and ownership.

In particular, the HEA subjects schools that participate in the various federal student financial aid programs under Title IV, which includes all Adtalem Title IV institutions, to significant regulatory scrutiny. Adtalem’s Title IV institutions collectively receive 75% of their revenue from Title IV programs. As a result, the suspension, limitation, or termination of the eligibility of any of our institutions to participate in Title IV programs could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

To participate in Title IV programs, an institution must receive and maintain authorization by the appropriate state education agencies, be accredited by an accrediting agency recognized by ED, and be certified by ED as an eligible institution, which ultimately is accomplished through the execution of a PPA.

Our institutions that participate in Title IV programs each do so pursuant to a PPA that, among other things, includes commitments to abide by all applicable laws and regulations, such as Incentive Compensation and Substantial Misrepresentation. Alleged violations of such laws or regulations may form the basis of civil actions for violation of state and/or federal false claims statutes predicated on violations of a PPA, including pursuant to lawsuits brought by private plaintiffs on behalf of governments (qui tam actions), that have the potential to generate very significant damages linked to our receipt of Title IV funding from the government over a period of several years.

Government budgetary pressures and changes to laws governing financial aid programs could reduce our student enrollment or delay our receipt of tuition payments.

Our Title IV institutions collectively receive 75% of their revenue from Title IV programs. As a result, any reductions in funds available to our students or any delays in payments to us under Title IV programs could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

Action by the U.S. Congress to revise the laws governing the federal student financial aid programs or reduce funding for those programs could reduce Adtalem’s student enrollment and/or increase its costs of operation. Political and

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budgetary concerns significantly affect Title IV programs. The U.S. Congress enacted the HEA to be reauthorized on a periodic basis, which most recently occurred in August 2008.

A comprehensive HEA reauthorization bill has not yet been introduced. However, standalone bills impacting Title IV federal financial aid programs have been introduced in both chambers of Congress. Some of these bills could be included in a larger legislative package, which could include the HEA. When the HEA is reauthorized, existing programs and participation requirements are subject to change. Additionally, funding for student financial assistance programs may be impacted during appropriations and budget actions.

The U.S. Congress can change the laws affecting Title IV programs in annual federal appropriations bills and other laws it enacts between the HEA reauthorizations. At this time, Adtalem cannot predict any or all of the changes that the U.S. Congress may ultimately make. Since a significant percentage of Adtalem’s revenue is tied to Title IV programs, any action by the U.S. Congress that significantly reduces Title IV program funding or the ability of Adtalem’s degree-granting institutions or students to participate in Title IV programs could have a material adverse effect on Adtalem’s business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Certain provisions in proposed legislation, if enacted, or implementation of existing or future law by a current or future administration, could have a material adverse effect on our business, including but not limited to legislation that limits the enrollment of U.S. citizens in foreign medical schools and legislation that could require institutions to share in the risk of defaulted federal student loans.

Additionally, a shutdown of government agencies, such as ED, responsible for administering student financial aid programs under Title IV could lead to delays in student eligibility determinations and delays in origination and disbursement of government-funded student loans to our students.

Our ability to comply with some ED regulations is affected by economic forces affecting our students and graduates that are not entirely within our control.

Our ability to comply with several ED regulations is not entirely within our control. In particular, our ability to participate in federal Title IV programs is dependent on the ability of our past students to avoid default on student loans, obtain employment, and pay for a portion of their education with private funds. These factors are influenced by broader economic drivers, including the personal or family wealth of our students, the overall employment outlook for their area of study, and the availability of private financing sources. An economic downturn could impact these factors, which could have a material adverse effect on our business, financial condition, results of operation, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Institutions may lose Title IV eligibility if the most recent cohort default rate on student loans exceeds 40% or if each of the three most recent cohort default rates exceed 30%. According to ED, the default rate for all Title IV institutions nationally was 0.0% for the fiscal year 2020 cohort and 2.3% for the fiscal year 2019 cohort. The cohort default rates for Adtalem’s institutions were 0.0% for 2020 and none were greater than 1.1% for the fiscal year 2019 cohort.

ED rules prohibiting “substantial misrepresentation” create exposure to litigation arising from student and prospective student complaints and enforcement actions by ED that could restrict or eliminate our eligibility to participate in Title IV programs.

ED regulations in effect for federal Stafford loans prohibit any “substantial misrepresentation” by our Title IV institutions, employees, and agents regarding the nature of the institution’s educational programs, its financial charges, or the employability of its graduates. These regulations may, among other things, subject us to claims of sanctions for statements containing errors made to non-students, including any member of the public, impose liability on us for the conduct of others and expose us to liability even when no actual harm occurs. A “substantial misrepresentation” is any misrepresentation on which the person to whom it was made could reasonably be expected to rely, or has reasonably relied, to that person’s detriment. It is possible that despite our efforts to prevent misrepresentations, our employees or service providers may make statements that could be construed as substantial misrepresentations. As a result, we may face complaints from students and prospective students over statements made by us and our agents in advertising and marketing, during the enrollment, admissions and financial aid process, and throughout attendance at any of our Title IV institutions, which would expose us to increased risk of enforcement action and applicable sanctions or other penalties, including potential Defense to Repayment liabilities, and increased risk of private qui tam actions under the Federal False Claims

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Act. If ED determines that an institution has engaged in substantial misrepresentation, ED may (1) fine the institution; (2) discharge students’ debt and hold the institution liable for the discharged debt under the HEA and the Defense to Repayment regulations; and/or (3) suspend or terminate an institution’s participation in Title IV programs. Alternatively, ED may impose certain other limitations on the institution’s participation in Title IV programs, which could include the denial of applications for approval of new programs or locations, a requirement to post a substantial letter of credit, or the imposition of one of ED’s heightened cash monitoring processes. Any of the foregoing actions could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

A failure to demonstrate financial responsibility or administrative capability may result in the loss of eligibility to participate in Title IV programs.

All of our Title IV institutions are subject to meeting financial and administrative standards. These standards are assessed through annual compliance audits, periodic renewal of institutional PPAs, periodic program reviews, and ad hoc events which may lead ED to evaluate an institution’s financial responsibility or administrative capability. See “Financial Responsibility” and “Administrative Capability” in Item 1. “Business” for additional information.

If ED does not recertify any one of our institutions to continue participating in Title IV programs, students at that institution would lose their access to Title IV program funds. Alternatively, ED could recertify our institutions but require our institutions to accept significant limitations as a condition of their continued participation in Title IV programs.

ED certification to participate in Title IV programs lasts a maximum of six years, and institutions are thus required to seek recertification from ED on a regular basis in order to continue their participation in Title IV programs. An institution must also apply for recertification by ED if it undergoes a change in control, as defined by ED regulations.

Each of our Title IV institutions operates under a PPA. There can be no assurance that ED will recertify an institution after its PPA expires or that ED will not limit the period of recertification to participate in Title IV programs to less than six years, place the institution on provisional certification, or impose conditions or other restrictions on the institution as a condition of granting our application for recertification. If ED does not renew or withdraws the certification to participate in Title IV programs for one or more of our institutions at any time, students at such institution would no longer be able to receive Title IV program funds. Alternatively, ED could (1) renew the certifications for an institution, but restrict or delay receipt of Title IV funds, limit the number of students to whom an institution could disburse such funds, or place other restrictions on that institution, or (2) delay recertification after an institution’s PPA expires, in which case the institution’s certification would continue on a month-to-month basis, any of which could have a material adverse effect on the businesses, financial condition, results of operations, and cash flows of the institution or Adtalem as a whole and could result in the imposition of significant restrictions on the ability of the institution or Adtalem as a whole to operate. See “Program Participation Agreement” in Item 1. “Business” for additional information.

If we fail to maintain our institutional accreditation or if our institutional accrediting body loses recognition by ED, we would lose our ability to participate in Title IV programs.

The loss of institutional accreditation by any of our Title IV institutions would leave the affected institution ineligible to participate in Title IV programs and would have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. In addition, an adverse action by any of our institutional accreditors other than loss of accreditation, such as issuance of a warning, could have a material adverse effect on our business. Increased scrutiny of accreditors by ED in connection with ED’s recognition process may result in increased scrutiny of institutions by accreditors or have other consequences.

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If regulators do not approve, or delay their approval, of transactions involving a material change of ownership or change of control of Adtalem, the eligibility of our institutions to participate in Title IV programs, our institutions’ accreditations and our institutions’ state licenses may be impaired in a manner that materially and adversely affects our business.

Any material change of ownership or change of control of Adtalem, depending on the type of change, may have significant regulatory consequences for each of our Title IV institutions. Such a change of ownership or control could require recertification by ED, the reevaluation of accreditation by each institution’s accreditors, reauthorization by each institutions’ state licensing agencies, and/or providing financial protections. If Adtalem experiences a material change of ownership or change of control, then our Title IV institutions may cease to be eligible to participate in Title IV programs until recertified by ED. The continuing participation of each of our Title IV institutions in Title IV programs is critical to our business. Any disruption in an institution’s eligibility to participate in Title IV programs would materially and adversely impact our business, financial condition, results of operations, and cash flow.

In addition, each Title IV institution is required to report any material change in stock ownership to its principal institutional accrediting body and would generally be required to obtain approval prior to undergoing any transaction that affects, or may affect, its corporate control or governance. In the event of any such change, each of our institution’s accreditors may undertake an evaluation of the effect of the change on the continuing operations of our institution for purposes of determining if continued accreditation is appropriate, which evaluation may include a comprehensive review. If our accreditors determine that the change is such that prior approval was required, but was not obtained, many of our accreditors’ policies require the accreditor to consider withdrawal of accreditation. If certain accreditation is suspended or withdrawn with respect to any of our Title IV institutions, they would not be eligible to participate in Title IV programs until the accreditation is reinstated or is obtained from another appropriate accrediting body. There is no assurance that reinstatement of accreditation could be obtained on a timely basis, if at all, and accreditation from a different qualified accrediting authority, if available, would require a significant amount of time. Any material disruption in accreditation would materially and adversely impact our business, financial condition, results of operations, and cash flow.

In addition, some states in which our Title IV institutions are licensed require approval (in some cases, advance approval) of changes in ownership or control in order to remain authorized to operate in those states, and participation in grant programs in some states may be interrupted or otherwise affected by a change in ownership or control.

A bankruptcy filing by us or by any of our Title IV institutions, or a closure of one of our Title IV institutions, would lead to an immediate loss of eligibility to participate in Title IV programs.

In the event of a bankruptcy filing by Adtalem, all of our Title IV institutions would lose their eligibility to participate in Title IV programs, pursuant to statutory provisions of the HEA, notwithstanding the automatic stay provisions of federal bankruptcy law, which would make any reorganization difficult to implement. Similarly, in the event of a bankruptcy filing by any of Adtalem’s subsidiaries that own a Title IV institution, such institution would lose its eligibility to participate in Title IV programs. In the event of any bankruptcy affecting one or more of our Title IV institutions, ED could hold our other Title IV institutions jointly liable for any Title IV program liabilities, whether asserted or unasserted at the time of such bankruptcy, of the institution whose Title IV program eligibility was terminated.

Further, in the event that an institution closes and fails to pay liabilities or other amounts owed to ED, ED can attribute the liabilities of that institution to other institutions under common ownership. If any one of our Title IV institutions were to close or have unpaid ED liabilities, ED could seek to have those liabilities repaid by one of our other Title IV institutions.

Excessive student loan defaults could result in the loss of eligibility to participate in Title IV programs.

Our Title IV institutions may lose their eligibility to participate in Title IV programs if their student loan default rates are greater than standards set by ED. An educational institution may lose its eligibility to participate in some or all Title IV programs, if, for three consecutive federal fiscal years, 30% or more of its students who were required to begin repaying their student loans in the relevant federal fiscal year default on their payment by the end of the next two federal fiscal years. In addition, an institution may lose its eligibility to participate in some or all Title IV programs if its default rate for a federal fiscal year was greater than 40%. If any of our Title IV institutions lose eligibility to participate in Title IV programs because of high student loan default rates, it would have a material adverse effect on our business, financial

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condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. See “Cohort Default Rate” in Item 1. “Business” for additional information. Nevertheless, Adtalem’s cohort default rates are far below such thresholds as discussed in “Cohort Default Rate” in Item 1. “Business.”

Our Title IV institutions could lose their eligibility to participate in federal student financial aid programs if the percentage of their revenue derived from those programs were too high.

Our Title IV institutions may lose eligibility to participate in Title IV programs if, on a cash basis, the percentage of the institution’s revenue derived from Title IV programs for two consecutive fiscal years is greater than 90% (the “90/10 Rule”). Further, if an institution exceeds the 90% threshold for any single fiscal year, ED could place that institution on provisional certification status for the institution’s following two fiscal years. See “The 90/10 Rule” in Item 1. “Business” for additional information.

If we fail to maintain any of our state authorizations, we would lose our ability to operate in that state and to participate in Title IV programs in that state.

Our Title IV institutions must be authorized to operate by the appropriate postsecondary regulatory authority in each state in which the institution is located. See “State Authorization” in Item 1. “Business” for a description of Adtalem’s current U.S. approvals.

The loss of state authorization would, among other things, render the affected institution ineligible to participate in Title IV programs, at least at those state campus locations, and otherwise limit that school’s ability to operate in that state. If these pressures and uncertainty continue in the future, or if one or more of our institutions are unable to offer programs in one or more states, it could have a material adverse impact on our enrollment, revenue, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

Our ability to place our medical schools’ students in hospitals in the U.S. may be limited by efforts of certain state government regulatory bodies, which may limit the growth potential of our medical schools, put our medical schools at a competitive disadvantage to other medical schools, or force our medical schools to substantially reduce their class sizes.

AUC and RUSM enter into affiliation agreements with hospitals across the U.S. to place their third and fourth year students in clinical programs at such hospitals. Certain states with regulatory programs that require state approval of clinical education programs may preclude, limit, or impose onerous requirements on Adtalem’s entry into affiliation agreements with hospitals in their states. If states limit access to affiliation arrangements, our medical schools may be at a competitive disadvantage to other medical schools, and our medical schools may be required to substantially restrict their enrollment due to limited clinical opportunities for enrolled students. The impact on enrollment, and the potential for enrollment growth, of such restrictions on our medical schools’ clinical placements could have a material adverse effect on our business, financial conditions, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

Budget constraints in states that provide state financial aid to our students could reduce the amount of such financial aid that is available to our students, which could reduce our enrollment and adversely affect our 90/10 Rule percentage.

Some states may reduce or eliminate various student financial assistance programs or establish minimum performance measures as a condition of participation. If our students who receive this type of assistance cannot secure alternate sources of funding, they may be forced to withdraw, reduce the rate at which they seek to complete their education, or replace the source with more expensive forms of funding, such as private loans. Other students who would otherwise have been eligible for state financial assistance may not be able to enroll without such aid. This reduced funding could decrease our enrollment and adversely affect our business, financial condition, results of operations, and cash flows.

In addition, the reduction or elimination of these non-Title IV sources of student funding may adversely affect our 90/10 rate.

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We could be subject to sanctions if we fail to calculate accurately and make timely payment of refunds of Title IV program funds for students who withdraw before completing their educational program.

The HEA and ED regulations require us to calculate refunds of unearned Title IV program funds disbursed to students who withdraw from their educational program. If refunds are not properly calculated or timely paid, we may be required to post a letter of credit with ED or be subject to sanctions or other adverse actions by ED, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

A failure of our vendors to comply with applicable regulations in the servicing of our students and institutions could subject us to fines or restrictions on or loss of our ability to participate in Title IV programs.

We contract with unaffiliated entities for student software systems and services related to the administration of portions of our Title IV and financing programs. Because each of our institutions may be jointly and severally liable for the actions of third-party servicers and vendors, failure of such servicers to comply with applicable regulations could have a material adverse effect on our institutions, including fines and the loss of eligibility to participate in Title IV programs, which could have a material adverse effect on our enrollment, revenue, and results of operations and cash flows and result in the imposition of significant restrictions on us and our ability to operate. If any of our third-party servicers discontinues providing such services to us, we may not be able to replace such third-party servicer in a timely, cost-efficient, or effective manner, or at all, and we could lose our ability to comply with collection, lending, and Title IV requirements, which could have a material adverse effect on our enrollment, revenue, and results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

We provide financing programs to assist some of our students in affording our educational offerings. These programs are subject to various federal and state rules and regulations. Failure to comply with these regulations could subject us to fines, penalties, obligations to discharge loans, and other injunctive requirements.

If we, or one of the companies that service our credit programs, do not comply with laws applicable to the financing programs that assist our students in affording our educational offerings, including Truth in Lending and Fair Debt Collections Practices laws and the Unfair, Deceptive or Abusive Acts or Practices provisions of Title X of the Dodd-Frank Act, we could be subject to fines, penalties, obligations to discharge the debts, and other injunctive requirements, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate. Additionally, an adverse allegation, finding or outcome in any of these matters could also materially and adversely affect our ability to maintain, obtain or renew licenses, approvals or accreditation and maintain eligibility to participate in Title IV programs or serve as a basis for ED to discharge certain Title IV student loans and seek recovery for some or all of its resulting losses from us, any of which could have a material adverse effect on our business, financial condition, results of operations, and cash flows and result in the imposition of significant restrictions on us and our ability to operate.

Release of confidential information could subject us to civil penalties or cause us to lose our eligibility to participate in Title IV programs.

As an educational institution participating in federal and state student assistance programs and collecting financial receipts from enrollees or their sponsors, we collect and retain certain confidential information. Such information is subject to federal and state privacy and security rules, including the Family Education Right to Privacy Act, the Health Insurance Portability and Accountability Act, and the Fair and Accurate Credit Transactions Act. Release or failure to secure confidential information or other noncompliance with these rules could subject us to fines, loss of our capacity to conduct electronic commerce, and loss of eligibility to participate in Title IV programs, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

We could be subject to sanctions if we fail to accurately and timely report sponsored students’ tuition, fees, and enrollment to the sponsoring agency.

A significant portion of our enrollment is sponsored through various federal and state supported agencies and programs, including the U.S. Department of Defense, the U.S. Department of Labor, and the U.S. Department of Veterans Affairs. As a recipient of funds, we are subject to periodic reviews and audits. Inaccurate or untimely reporting or administration

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of funds to students could result in suspension or termination of our eligibility to participate in these federal and state programs and have a material adverse impact on enrollment and revenue, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our enrollment may be adversely affected by presentations of data that are not representative of actual educational costs for our prospective students.

ED and other public policy organizations are concerned with the affordability of higher education and have developed various tools and resources to help students find low-cost educational alternatives. These resources primarily rely on and present data for first-time, full-time residential students, which is not representative of most of our prospective students. These presentations may influence some prospective students to exclude our institutions from their consideration, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Risks Related to Adtalem’s Business

Student enrollment at our schools is affected by legislative, regulatory, and economic factors that may change in ways we cannot predict. These factors outside our control limit our ability to assess our future enrollment effectively.

Our future revenue and growth depend on a number of factors, including many of the regulatory risks discussed above and business risks discussed below. Despite ongoing efforts to provide more scholarships to prospective students, and to increase quality and build our reputation, negative perceptions of the value of a college degree, increased reluctance to take on debt, and the resulting lower student consumer confidence may continue to impact enrollment in the future. In addition, technological innovations in the delivery of low-cost education alternatives and increased competition could negatively affect enrollment.

We are subject to risks relating to enrollment of students. If we are not able to continue to successfully recruit and retain our students, our revenue may decline.

Our undergraduate and graduate educational programs are concentrated in selected areas of medical and healthcare. If applicant career interests or employer needs shift away from these fields, and we do not anticipate or adequately respond to that trend, future enrollment and revenue may decline and the rates at which our graduates obtain jobs involving their fields of study could decline.

If our graduates are unable to find appropriate employment opportunities or obtain professional licensure or certification, we may not be able to recruit new students.

If employment opportunities for our graduates in fields related to their educational programs decline or they are unable to obtain professional licenses or certifications in their chosen fields, future enrollment and revenue may decline as potential applicants choose to enroll at other educational institutions or providers.

We face heightened competition in the postsecondary education market from both public and private educational institutions.

Postsecondary education in our existing and new market areas is competitive. We compete with traditional public and private two-year and four-year colleges, other proprietary schools, and alternatives to higher education. Some of our competitors, both public and private, have greater financial and nonfinancial resources than us. Some of our competitors, both public and private, are able to offer programs similar to ours at a lower tuition level for a variety of reasons, including the availability of direct and indirect government subsidies, government and foundation grants, large endowments, tax-deductible contributions, and other financial resources not available to proprietary institutions, or by providing fewer student services or larger class sizes. An increasing number of traditional colleges and community colleges are offering distance learning and other online education programs, including programs that are geared towards the needs of working adults. This trend has been accelerated by private companies that provide and/or manage online learning platforms for traditional colleges and community colleges. As the proportion of traditional colleges providing alternative learning modalities increases, we will face increasing competition for students from traditional colleges, including colleges with well-established reputations for excellence. As the online and distance learning segment of the postsecondary education market matures, we believe that the intensity of the competition we face will continue to increase. This intense competition

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could make it more challenging for us to enroll students who are likely to succeed in our educational programs, which could adversely affect our new student enrollment levels and student persistence and put downward pressure on our tuition rates, any of which could materially and adversely affect our business, financial condition, results of operations, and cash flows.

Outbreaks of communicable infections or diseases, or other public health pandemics in the locations in which we, our students, faculty, and employees live, work, and attend classes, could substantially harm our business.

Disease outbreaks and other public health conditions in the locations in which we, our students, faculty, and employees live, work, and attend classes could have a significant negative impact on our revenue, profitability, and business. We will continue to evaluate, and if appropriate, adopt other measures in the future required for the ongoing safety of our students and employees. If our business experiences prolonged occurrences of adverse public health conditions and the reinstatement of stay-at-home orders, we believe it could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Natural disasters or other extraordinary events or political disruptions may cause us to close some of our schools or suffer casualty losses.

We may experience business interruptions or casualty losses resulting from natural disasters, inclement weather, transit disruptions, political disruptions, or other events in one or more of the geographic areas in which we operate, particularly in the West Coast and Gulf States of the U.S., and the Caribbean. These events could impair the value of our assets and/or cause us to close schools, temporarily or permanently, and could affect student recruiting opportunities in those locations, causing enrollment and revenue to decline, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

The personal information that we collect may be vulnerable to breach, theft, or loss that could adversely affect our reputation and operations.

Possession and use of personal information in our operations subjects us to risks and costs that could harm our business. We collect, use, and retain large amounts of personal information regarding our students and their families, including social security numbers, tax return information, personal and family financial data, and credit card numbers. We also collect and maintain personal information of our employees and contractors in the ordinary course of our business. Some of this personal information is held and managed by certain of our vendors. Confidential information also may become available to third parties inadvertently when we integrate or convert computer networks into our network following an acquisition or in connection with system upgrades from time to time.

Due to the sensitive nature of the information contained on our networks, such as students’ financial information and grades, our networks may be targeted by hackers. Attacks could have a significant negative impact on our systems and operations. Anyone who circumvents security measures could misappropriate proprietary or confidential information or cause interruptions or malfunctions in our operations. Although we use security and business controls to limit access and use of personal information, a third-party may be able to circumvent those security and business controls, which could result in a breach of privacy. In addition, errors in the storage, use, or transmission of personal information could result in a breach of privacy. Possession and use of personal information in our operations also subjects us to legislative and regulatory burdens that could require notification of data breaches and restrict our use of personal information. We cannot assure that a breach, loss, or theft of personal information will not occur. A breach, theft, or loss of personal information regarding our students and their families, employees, or contractors that is held by us or our vendors could have a material adverse effect on our reputation and results of operations and result in liability under state and federal privacy statutes and legal actions by federal or state authorities and private litigants, any of which could have a material adverse effect on our business and result in the imposition of significant restrictions on us and our ability to operate.

System disruptions and vulnerability from security risks to our computer network or information systems could severely impact our ability to serve our existing students and attract new students.

The performance and reliability of our computer networks and system applications, especially online educational platforms and student operational and financial aid packaging applications, are critical to our reputation and ability to

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attract and retain students. System errors, disruptions or failures, including those arising from unauthorized access, computer hackers, computer viruses, denial of service attacks, and other security threats, could adversely impact our delivery of educational content to our students or result in delays and/or errors in processing student financial aid and related disbursements. Such events could have a material adverse effect on the reputation of our institutions, our financial condition, results of operations, and cash flows. We may be required to expend significant resources to protect against system errors, failures or disruptions, or the threat of security breaches, or to repair or otherwise mitigate problems caused by any actual errors, disruptions, failures, or breaches. We cannot ensure that these efforts will protect our computer networks, or fully mitigate the resulting impact of interruptions or malfunctions in our operations, despite our regular monitoring of our technology infrastructure security and business continuity plans.

A breach of our information technology systems could subject us to liability, reputational damage or interrupt the operation of our business.

We rely upon our information technology systems and infrastructure for operating our business. We could experience theft of sensitive data or confidential information or reputational damage from malware or other cyber-attacks, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. Similarly, data privacy breaches by those who access our systems may pose a risk that sensitive data, including intellectual property, trade secrets or personal information belonging to us, our employees, students, or business partners, may be exposed to unauthorized persons or to the public. Cyber-attacks are increasing in their frequency, sophistication and intensity, and have become increasingly difficult to detect and respond to. There can be no assurance that our mitigation efforts to protect our data and information technology systems will prevent breaches in our systems (or that of our third-party providers) that could adversely affect our operations and business and result in financial and reputational harm to us, theft of trade secrets and other proprietary information, legal claims or proceedings, liability under laws that protect the privacy of personal information, and regulatory penalties.

Government regulations relating to the internet could increase our cost of doing business and affect our ability to grow.

The use of the internet and other online services has led to and may lead to the adoption of laws and regulations in the U.S. or foreign countries and to changing interpretations of existing laws and regulations. These laws, regulations, and interpretations may relate to issues such as online privacy, copyrights, trademarks and service marks, sales taxes, value-added taxes, withholding taxes, cost of internet access, and services, allocation, and apportionment of income amongst various state, local, and foreign jurisdictions, fair business practices, and the requirement that online education institutions qualify to do business as foreign corporations or be licensed in one or more jurisdictions where they have no physical location or other presence. New laws, regulations, or interpretations related to doing business over the internet could increase our costs and materially and adversely affect our enrollment, which could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

Our ability to open new campuses, offer new programs, and add capacity is dependent on regulatory approvals and requires financial and human resources.

As part of our strategy, we intend to open new campuses, offer new educational programs, and add capacity to certain existing locations. Such actions require us to obtain appropriate federal, state, and accrediting agency approvals. In addition, adding new locations, programs, and capacity may require significant financial investments and human resource capabilities. The failure to obtain appropriate approvals or to properly allocate financial and human resources could adversely impact our future growth.

We may not be able to attract, retain, and develop key employees necessary for our operations and the successful execution of our strategic plans.

We may be unable to attract, retain, and develop key employees with appropriate educational qualifications and experience. In addition, we may be unable to effectively plan and prepare for changes in key employees. Such matters may cause us to incur higher wage expense and/or provide less student support and customer service, which could adversely affect enrollment, revenue, and expense. A significant amount of our compensation for key employees is tied to our financial performance. We may require new employees in order to execute some of our strategic plans. Uncertainty

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regarding our future financial performance may limit our ability to attract new employees with competitive compensation or increase our cost of recruiting and retaining such new employees.

We may not be able to successfully integrate acquisitions.

As part of our strategy, we are actively exploring acquisition opportunities primarily in the U.S. We have acquired and may in the future acquire additional education institutions or education related businesses aligned to our strategy. Any acquisition involves significant risks and uncertainties, including, but not limited to:

| · | Inability to successfully integrate the acquired operations and personnel into our business and maintain uniform standards, controls, policies, and procedures;

| · | Failure to secure applicable regulatory approvals;

| · | Assumption of known and unknown liabilities;

| · | Diversion of significant attention of our senior management from day-to-day operations;

| · | Issues not discovered in our due diligence process, including compliance issues, commitments, and/or contingencies; and

| · | Financial commitments, investments in foreign countries, and compliance with debt covenants and ED financial responsibility scores.

Expansion into new international markets will subject us to risks inherent in international operations.

To the extent that we expand internationally, we will face risks that are inherent in international operations including, but not limited to:

| · | Compliance with foreign laws and regulations;

| · | Management of internal operations;

| · | Foreign currency exchange rate fluctuations;

| · | Ability to protect intellectual property;

| · | Monetary policy risks, such as inflation, hyperinflation, and deflation;

| · | Price controls or restrictions on exchange of foreign currencies;

| · | Political and economic instability in the countries in which we operate;

| · | Potential unionization of employees under local labor laws;

| · | Multiple and possibly overlapping and conflicting tax laws;

| · | Inability to cost effectively repatriate cash balances; and

| · | Compliance with U.S. laws and regulations such as the Foreign Corrupt Practices Act.

Proposed changes in, or lapses of, U.S. tax laws regarding earnings from international operations could adversely affect our financial results.

Our effective tax rate could be subject to volatility or be adversely impacted by changes to federal tax laws governing the taxation of foreign earnings of U.S. based companies. For example, recent changes to U.S. tax laws significantly impacted how U.S. multinational corporations are taxed on foreign earnings. Numerous countries are evaluating their existing tax laws, due in part to recommendations made by the Organization for Economic Co-operation and Development’s (“OECD’s”) Base Erosion and Profit Shifting (“BEPS”) project. This project includes a two-pillar approach to global taxation focusing on global project allocation (Pillar One) and a global minimum tax rate of 15% (Pillar Two). Certain jurisdictions in which we operate enacted legislation consistent with one or more of the OECD Pillar Two model rules, which, in general, are expected to be applicable for our fiscal year 2025. We are continuing to evaluate emerging developments related to the Pillar Two model rules and related legislation in jurisdictions in which we operate. These changes increase tax uncertainty and may adversely impact our effective tax rate in future years. We will continue to monitor pending legislation and implementation by individual countries and evaluate the potential impact on our financial statements. A significant portion of the additional provisions for income taxes we have made due to the enactment of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) is payable by us over a period of up to eight years. As a result, our cash flows from operating activities will be adversely impacted until the additional tax provisions are paid in full. In addition, Adtalem has benefitted from the ability to enter into international intercompany arrangements without incurring

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U.S. taxation due to a law, which expires in fiscal year 2026, deferring U.S. taxation of “foreign personal holding company income” such as foreign income from dividends, interest, rents, and royalties. If this law is not extended, or a similar law adopted, our consolidated tax provision would be impacted beginning in our fiscal year 2027, and we may not be able to allocate international capital optimally without realizing U.S. income taxes, which would increase our effective income tax rate and adversely impact our earnings and cash flows.

Changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our results.

Our future effective tax rates could be subject to volatility or adversely affected by: earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated earnings in countries where we have higher statutory rates; changes in the valuation of our deferred tax assets and liabilities; expiration of or lapses in various tax law provisions; tax treatment of stock-based compensation; costs related to intercompany or other restructurings; or other changes in tax rates, laws, regulations, accounting principles, or interpretations thereof. In addition, we are subject to examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. Although we have accrued tax and related interest for potential adjustments to tax liabilities for prior years, there can be no assurance that the outcomes from these continuous examinations will not have a material effect, either positive or negative, on our business, financial condition, and results of operations.

Our goodwill and intangible assets potentially could be impaired if our business results and financial condition were materially and adversely impacted by risks and uncertainties.

Adtalem’s market capitalization can be affected by, among other things, changes in industry or market conditions, changes in results of operations, and changes in forecasts or market expectations related to future results. If our market capitalization were to remain below its carrying value for a sustained period of time or if such a decline becomes indicative that the fair values of our reporting units have declined below their carrying values, an impairment test may result in a non-cash impairment charge. As of June 30, 2024, intangible assets from business combinations totaled $776.7 million and goodwill totaled $961.3 million. Together, these assets equaled 63% of total assets as of such date. If our business results and financial condition were materially and adversely impacted, then such intangible assets and goodwill could be impaired, requiring a possible write-off of up to $776.7 million of intangible assets and up to $961.3 million of goodwill.

We cannot guarantee that our share repurchase program will be utilized to the full value approved or that it will enhance long-term stockholder value. Repurchases we consummate could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance.

Our Board authorized a share repurchase program pursuant to which we may repurchase up to $300.0 million of our common stock through January 16, 2027. As of June 30, 2024, $211.6 million of authorized share repurchases were remaining under this share repurchase program. The manner, timing and amount of any share repurchases may fluctuate and will be determined by us based on a variety of factors, including the market price of our common stock, our priorities for the use of cash to support our business operations and plans, general business and market conditions, tax laws, and alternative investment opportunities. The share repurchase program authorization does not obligate us to acquire any specific number or dollar value of shares. Further, our share repurchases could have an impact on our share trading prices, increase the volatility of the price of our common stock, or reduce our available cash balance. Our share repurchase program may be modified, suspended or terminated at any time, which may result in a decrease in the trading prices of our common stock. Even if our share repurchase program is fully implemented, it may not enhance long-term stockholder value.

We and our subsidiaries may not be able to generate sufficient cash to service all of our indebtedness and may not be able to refinance our debt obligations.

Our ability to make scheduled payments on or to refinance our debt obligations depends on our and our subsidiaries’ financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business, competitive, legislative, regulatory, and other factors beyond our control. As a result, we may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on

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our indebtedness. In addition, because we conduct a significant portion of our operations through our subsidiaries, repayment of our indebtedness is also dependent on the generation of cash flow by our subsidiaries and their ability to make such cash available to us by dividend, debt repayment, or otherwise. Our subsidiaries are distinct legal entities and other than the guarantors on our indebtedness, they do not have any obligation to pay amounts due on the Notes or to make funds available for that purpose or for other obligations. Pursuant to applicable state limited liability company laws and other laws and regulations, our non-guarantor subsidiaries may not be able to, or may not be permitted to, make distributions to us in order to enable us to make payments in respect of the Notes (as defined in Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”) and our Term Loan B (as defined in Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”). In the event that we do not receive distributions from our non-guarantor subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.

In addition, there can be no assurance that our business will generate sufficient cash flow from operations, or that future borrowings will be available to us under our Revolver (as defined in Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”) in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

If we cannot make scheduled payments on our indebtedness, we will be in default, and holders of the Notes could declare all outstanding principal and interest to be due and payable, the lenders under the credit facilities could terminate their commitments to loan money, our secured lenders (including the lenders under the credit facilities and the holders of the Notes) could foreclose against the assets securing their loans and the Notes and we could be forced into bankruptcy or liquidation.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Cyber Risk Management Strategy

Adtalem recognizes the importance of safeguarding sensitive information pertaining to our students, employees, institutions, and operations. Our Cyber Risk Management Framework is designed to fortify our defenses against potential cyber threats and to protect the integrity, confidentiality, and availability of critical data.

Program Highlights

Our program is anchored by our Enterprise Information Security Framework (“EISF”), which adheres to the guidelines set forth by the National Institute of Standards and Technology (“NIST”) 800-53 Framework. To enhance comprehensiveness, our policies also harmonize with other leading frameworks such as the ISO 27001 Standard, Family Educational Rights and Privacy Act of 1974 (“FERPA”), Payment Card Industry Data Security Standard (“PCI DSS”), Gramm-Leach-Bliley Act (“GLBA”), California Consumer Privacy Act (“CCPA”), General Data Protection Regulation (“GDPR”), and other pertinent local, state, national, and international regulations governing data privacy and information security.

Our Chief Information Security Officer (“CISO”) manages Adtalem’s enterprise-wide cybersecurity program and reports to Adtalem’s Chief Financial Officer. The CISO has been responsible for assessing and managing material risks from cybersecurity threats at Adtalem since 2018. The CISO has over twenty years of information technology and cybersecurity experience, including executive leadership roles at Fortune 500 organizations within regulated sectors

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including financial services and healthcare. The CISO leads a team of experienced subject matter experts with focus on strategy formulation, architecture design, incident response, colleague training, risk management, and governance functions. This team includes diverse industry backgrounds spanning Financial Services, Healthcare, and Government.

The CISO team is supported by a Security Operations team reporting into the Information Technology (“IT”) function. This IT team provides engineering and technical expertise. The team is further supported by a 24x7 Security Operations Center (“SOC”). Adtalem has a Cyber Incident Response Plan (“Response Plan”) that delineates the requirements of notification, classification, analysis, and communication of cybersecurity incidents based on the identified severity level. The Response Plan includes initial steps to convene a response team, contain the incident, consider insurance notification requirements, determine the type of incident and escalation, consider the communications protocol and possible disclosure requirements, and consider involving law enforcement. The Response Plan also provides for a lessons learned review to identify improvements that could be made. Adtalem’s Legal and Compliance teams also provide incident response support to the CISO and manage cybersecurity-related legal and compliance issues. Processes are in place to escalate cybersecurity incidents promptly so that decisions regarding public disclosure and regulatory reporting can be made by management in a timely manner.

An integral component of Adtalem’s Response Plan is our Privacy Incident Response Plan (the “Privacy Response Plan”) which addresses privacy of our students’ records, including under the Family Education Rights and Privacy Act of 1974. The Privacy Response Plan requires annual training for our employees on how to recognize and report potential privacy incidents.

We regularly conduct Cyber Incident Response Plan (the “Incident Response Plan”) tabletop exercises, including simulations of malware and ransomware attacks. Our IT environment and cybersecurity-related controls are reviewed by our internal audit function and external third parties. We sponsor third-party assessments, including cyber risk reviews and penetration testing, to evaluate our cybersecurity program independently.

Adtalem subjects its systems to penetration testing to identify potential exposures, ensuring that our infrastructure maintains an acceptable level of cyber risk. In addition, Adtalem leverages third-party experts to enhance its cybersecurity program and Incident Response Plan. Our organization has not identified or discovered any cybersecurity threats over the past three fiscal years that have materially impacted or are reasonably likely to materially impact our business strategy, operations, or financial condition. Expenses related to cybersecurity incidents have been immaterial.

Our year-round cybersecurity awareness program mandates training for all system users, covering essential topics such as safeguarding sensitive information, identifying phishing attempts, securing mobile devices, and understanding the risks associated with artificial intelligence (“AI”) platforms. Recognizing the importance of third-party risk, our strategic sourcing protocols mandate detailed cybersecurity assessments for potential third-party suppliers. New engagements with third parties are contingent upon affirmative evaluations or adherence to risk mitigation/acceptance protocols. Contracts with third parties include provisions for breach notification, investigation, root cause analysis, and remediation.

We maintain a cybersecurity insurance policy covering costs that we may incur in connection with incidents. Our policy limits are commensurate with the size and the nature of our operations. However, Adtalem may incur expenses and losses related to a cyber incident that are not covered by insurance or are in excess of our insurance coverage.

Governance

Cybersecurity is acknowledged as an important enterprise risk at Adtalem. Our Audit and Finance Committee (“AFC”), comprised entirely of independent directors, is responsible for oversight of risks from cybersecurity threats. The Chair of our AFC has received a CERT certificate in Cybersecurity Oversight from Carnegie Mellon University in partnership with the National Association of Corporate Directors. Our CISO briefs the AFC on cybersecurity matters, including the evolving threat landscape and Adtalem’s threat mitigation efforts, four times a year. At each quarterly meeting, the Chair of our AFC also briefs the full Board on cybersecurity matters discussed at AFC meetings. Cybersecurity risks are also reviewed and discussed with the AFC and the full Board as part of our annual enterprise risk management (“ERM”) assessment. In February 2024, our full Board reviewed and discussed best practices for cybersecurity and cybersecurity disclosures with an external third party. The subsequent Board discussion included a focus on the cyber threat landscape, responses to cyberattacks, risks posed by third-party vendors, and best practices to address cyber risks.

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Item 2. Properties

Adtalem’s leased facilities are occupied under leases whose remaining terms range from 1 to 15 years. Some of our leases contain provisions giving Adtalem the right to terminate early or renew its lease for additional periods at various rental rates, although generally at rates higher than are currently being paid. Adtalem’s owned facilities total 883,000 square feet worldwide. No facility that is owned by Adtalem is subject to a mortgage or other indebtedness.

Adtalem is subleasing space, in full or in part, at four facilities. Three of these facilities are subleased to DeVry University and/or Carrington College (a business formerly owned by Adtalem), which Adtalem remains as the primary lessee. These sublease agreements were entered into at comparable market rates and all sublease terms expire by December 2025.

Chamberlain

Chamberlain currently operates 23 campuses in 15 states, of which 3 are in Adtalem owned locations and 20 in leased facilities. Chamberlain’s total portfolio of academic and administrative operations comprise approximately 1.0 million square feet.

Walden

Walden operates online and does not have any campus space. Walden leases office space in Minneapolis, Minnesota with 10,000 square feet.

Medical and Veterinary

AUC

AUC’s nine-acre campus is located in St. Maarten. The campus is owned and includes 240,000 square feet of academic, student-life, and student residence facilities. In addition to classrooms and auditoriums, educational facilities include a gross anatomy lab, a multi-purpose learning lab, library and learning resource centers, offices, cafeteria, and recreational space facilities. The AUC campus is also supported by administrative staff located in office space in Miramar, Florida.

RUSM

RUSM’s campus is located in Barbados and is comprised of 494,000 square feet of leased facilities. Educational facilities include 120,000 square feet of classrooms, labs for anatomy and radiology imaging, simulation, physiology and pathology, exam rooms, private and group study, and faculty and administrative space. A residential village includes 7,000 square feet of administrative student services space surrounded by shopping and recreational facilities and over 400 multi-bedroom student units totaling 367,000 square feet. The RUSM campus is also supported by administrative staff located in office space in Miramar, Florida.

RUSVM

RUSVM’s 50-acre campus is located in St. Kitts. The campus is owned and includes 253,000 square feet. Educational facilities include an anatomy/clinical building, pathology building, research building with state-of-the-art necropsy lab, classroom buildings, administration building, bookstore, cafeteria, and a library/learning resource center. Animal care facilities include kennels, an aviary, and livestock barns. Student-life and student residence facilities are also located on the campus. The RUSVM campus is also supported by administrative staff located in office space in North Brunswick, New Jersey.

Home Office

Adtalem’s headquarters leased facility in Chicago, Illinois has 57,000 square feet. Adtalem also leases office space in Columbia, Maryland with 53,000 square feet and Washington, D.C. with 9,000 square feet.

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Item 3. Legal Proceedings

For a discussion of legal proceedings, see Note 21 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”

​

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Item 4. Mine Safety Disclosures

Not applicable.

​

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Information About Our Executive Officers

Our executive officers are as follows, along with each executive officer’s position, age, and business experience as of the date of this filing:

|  | ​ |  |
--- | --- | --- | --- | ---
Name and Current Position |  | Age |  | Business Experience
Stephen W. Beard President and Chief Executive Officer ​ | ​ | 53 | ​ | Mr. Beard joined Adtalem in February 2018 as Senior Vice President, Secretary and General Counsel. In January 2019, Mr. Beard was appointed Chief Operating Officer and General Counsel. In February 2020, Mr. Beard assumed responsibilities for our former Financial Services segment and was relieved of his General Counsel responsibilities. In September 2021, Mr. Beard was appointed Adtalem’s President and Chief Executive Officer. Prior to joining Adtalem, Mr. Beard held a variety of leadership roles at Heidrick & Struggles, International from 2003 through 2018 and was most recently Executive Vice President, Chief Administrative Officer and General Counsel.
Douglas G. Beck Senior Vice President, General Counsel, Corporate Secretary and Institutional Support Services ​ | ​ | 57 | ​ | Mr. Beck joined Adtalem in June 2021 as Senior Vice President, General Counsel and Corporate Secretary. In January 2023, Mr. Beck assumed responsibilities for our institutional support services. Prior to joining Adtalem, Mr. Beck held a variety of leadership roles at Hub Group from 2011 through 2021 and was most recently Executive Vice President, General Counsel and Secretary. Previously, Mr. Beck served in a legal capacity in a number of other companies across a variety of industries including Alberto Culver, Navistar, and Allegiance Healthcare.
Michael Betz President, Walden University | ​ | 51 | ​ | Mr. Betz joined Adtalem in May 2022 as President of Walden University. Prior to joining Adtalem, Mr. Betz served in a variety of leadership roles at McKinsey & Co. from 2017 through 2022 where he most recently served as partner and was a leader in McKinsey’s higher education and growth transformation practices.
Dr. Karen Cox President, Chamberlain University |  | 64 |  | Dr. Cox joined Adtalem in August 2018 as President of Chamberlain University. Prior to joining Adtalem, Dr. Cox served as Executive Vice President and Chief Operating Officer of Children’s Mercy – Kansas City an independent, academic medical center in Missouri, from 2006 through August 2018. Prior to that role, Dr. Cox was Senior Vice President for Patient Care Services and Chief Nursing Officer from 2004 through 2006.

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|  | ​ |  |
--- | --- | --- | --- | ---
Name and Current Position |  | Age |  | Business Experience
Manjunath Gangadharan Vice President, Chief Accounting Officer ​ | ​ | 42 | ​ | Mr. Gangadharan joined Adtalem in April 2022 as Vice President, Chief Accounting Officer. Prior to joining Adtalem, Mr. Gangadharan served as Vice President, Corporate Controller at Culligan International since April 2021. Previously, Mr. Gangadharan served as the Chief Accounting Officer at Groupon Inc. since February 2020 and prior to that served in various leadership roles at Groupon including as Senior Director, North America Controller and Head of Global Payroll and Shared Services from May 2019 to February 2020; Director of Corporate Accounting from April 2018 to May 2019; and International Goods Controller from December 2016 to April 2018.
Maurice Herrera Senior Vice President, Chief Marketing Officer ​ | ​ | 54 | ​ | Mr. Herrera joined Adtalem in October 2021 as Senior Vice President, Chief Marketing Officer. Prior to joining Adtalem, Mr. Herrera served as Senior Vice President, Americas Chief Marketing Officer at Avis Budget from 2018 through 2021. Previously, Mr. Herrera served as Senior Vice President, Head of Marketing at Weight Watchers from 2014 through 2018.
Scott Liles President, Medical and Veterinary | ​ | 58 | ​ | Mr. Liles joined Adtalem in April 2024 as President, Medical and Veterinary. Prior to joining Adtalem, Mr. Liles served as Chief Executive Officer of the Association of Certified Anti-Money Laundering Specialists (“ACAMS”) since March 2022 and President and Managing Director of ACAMS from November 2020 through February 2022. Previously, Mr. Liles served as President, Spire Insurance at Nationwide Insurance from November 2018 through November 2020 and President for Nationwide Pet from 2012 through 2018.
Robert J. Phelan Senior Vice President, Chief Financial Officer ​ | ​ | 59 | ​ | Mr. Phelan joined Adtalem in February 2020 as Vice President, Chief Accounting Officer. Effective April 24, 2021, Mr. Phelan served as Interim Chief Financial Officer and was appointed Senior Vice President, Chief Financial Officer in October 2021. Prior to joining Adtalem, Mr. Phelan served as Senior Vice President, Finance - Corporate Controller / Risk Management / Asset Protection at Sears Holdings Corporation (“Sears”), the parent company of Kmart Holdings Corporation and Sears, Roebuck and Co., an integrated retailer with a national network of stores, since June 2018. Previously, Mr. Phelan was the Senior Vice President, Finance - Treasurer & Chief Audit Executive at Sears from July 2016 through May 2018. Mr. Phelan also served as Senior Vice President and President – Inventory & Space Management at Sears from September 2007 through June 2016.
Blake Simpson Senior Vice President, Chief Communications Officer and Corporate Affairs Officer | ​ | 49 | ​ | Ms. Simpson joined Adtalem in December 2022 as Senior Vice President, Chief Communications Officer and Corporate Affairs Officer. Prior to joining Adtalem, Ms. Simpson served as Senior Vice President, Global Communications, Impact, Events, Access, Creative at Under Armour, Inc. from 2020 through 2022. Previously, Ms. Simpson served as Vice President of Public Affairs and Communications at CKE Restaurants, Inc. from 2018 through 2020.

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|  | ​ |  |
--- | --- | --- | --- | ---
Name and Current Position |  | Age |  | Business Experience
Steven Tom Senior Vice President, Chief Customer Officer ​ | ​ | 43 | ​ | Mr. Tom joined Adtalem in August 2021 as Senior Vice President, Chief Customer Officer when Adtalem acquired Walden University from Laureate Education. Prior to joining Adtalem, Mr. Tom served as Chief Transformation Officer and Senior Vice President, Student Experience at Walden University from 2018 through 2021, leading digital transformation, student experience, information technology, analytics, data science, and student support. Prior to that role, Mr. Tom was Vice President at Laureate Education leading technology innovation and digital experience from 2016 through 2018. Previously, Mr. Tom served as Senior Vice President of Analytics, Innovation and Learning at TESSCO Technologies from 2011 through 2016.
Evan Trent Senior Vice President, Chief Strategy and Transformation Officer ​ | ​ | 45 | ​ | Mr. Trent joined Adtalem in August 2019 as Vice President, Strategy and Corporate Development. In July 2022, Mr. Trent was appointed Senior Vice President, Chief Strategy and Transformation Officer. Prior to joining Adtalem, Mr. Trent served as Chief Operating Officer at HBR Consulting from 2018 through 2019. Previously, Mr. Trent served as Vice President, Strategy and Corporate Development at Heidrick & Struggles from 2014 through 2018.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Adtalem’s common stock is listed on the New York Stock Exchange and Chicago Stock Exchange under the symbol “ATGE.” The stock transfer agent and registrar for Adtalem’s common stock is Computershare Investor Services, LLC.

Holders

There were 194 current holders of record of Adtalem’s common stock as of July 31, 2024. The number of holders of record does not include beneficial owners of its securities whose shares are held by various brokerage firms, other financial institutions, Adtalem’s 401(k) Retirement Plan, and its Colleague Stock Purchase Plan.

Dividends

Adtalem did not pay any dividends in fiscal year 2022, 2023, or 2024. Adtalem does not expect to pay any cash dividends in the foreseeable future. Any future payment of dividends will be at the discretion of the Adtalem Board of Directors (the “Board”) and will be dependent on projections of future earnings, cash flow, financial requirements of Adtalem, and other factors as the Board deems relevant.

Recent Sales of Unregistered Securities

There were no unregistered sales of equity securities during fiscal year 2024.

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Issuer Purchases of Equity Securities

The following information describes Adtalem’s stock repurchases during the fourth quarter of the fiscal year ended June 30, 2024, which includes the market price of the shares, commissions, and excise tax.

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Period | ​ | Total Number of Shares Purchased | ​ | Average Price Paid per Share | ​ | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | ​ | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
April 1, 2024 - April 30, 2024 | ​ | 165,377 | ​ | $ | 51.94 | ​ | 165,377 | ​ | $ | 211,563,176
May 1, 2024 - May 31, 2024 | ​ | — | ​ | $ | — | ​ | — | ​ | $ | 211,563,176
June 1, 2024 - June 30, 2024 | ​ | — | ​ | $ | — | ​ | — | ​ | $ | 211,563,176
Total | ​ | 165,377 | ​ | $ | 51.94 | ​ | 165,377 | ​ | ​ | ​

(1) | See Note 16 “Share Repurchases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our share repurchase programs.

Other Purchases of Equity Securities

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Period | ​ | Total Number of Shares Purchased (1) | ​ | Average Price Paid per Share | ​ | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | ​ | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
April 1, 2024 - April 30, 2024 | ​ | — | ​ | $ | — | ​ | NA | ​ | NA
May 1, 2024 - May 31, 2024 | ​ | 5,268 | ​ | $ | 65.04 | ​ | NA | ​ | NA
June 1, 2024 - June 30, 2024 | ​ | 12,137 | ​ | $ | 66.72 | ​ | NA | ​ | NA
Total | ​ | 17,405 | ​ | ​ | 66.21 | ​ | NA | ​ | NA

(1) | Represents shares delivered back to Adtalem for payment of withholding taxes from employees for vesting restricted stock units and shares swapped for payment on exercise of incentive stock options pursuant to the terms of Adtalem's stock incentive plans.

Performance Graph

The following graph compares the cumulative total returns of Adtalem’s common stock, the NYSE Composite Index (U.S. Companies), and a Peer Group (as defined below) for the period from June 30, 2019 through June 30, 2024, assuming an investment of $100 in each on June 30, 2019 and also assumes the reinvestment of dividends. Additionally, the Peer Group is weighted by the market capitalization of each component company. The stock price performance on the following graph is not necessarily indicative of future stock performance.

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Comparison of Five-Year Cumulative Total Return

Among Adtalem Global Education Inc., NYSE Composite Index, and a Peer Group

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2019 | ​ | 2020 | ​ | 2021 | ​ | 2022 | ​ | 2023 | ​ | 2024
Adtalem Global Education Inc. | ​ | 100 | ​ | 69 | ​ | 79 | ​ | 80 | ​ | 76 | ​ | 151
NYSE Composite Index (U.S. Companies) | ​ | 100 | ​ | 94 | ​ | 133 | ​ | 119 | ​ | 134 | ​ | 156
Peer Group (1) | ​ | 100 | ​ | 73 | ​ | 75 | ​ | 79 | ​ | 83 | ​ | 118

Source data: Zacks Investment Research

(1) The self-determined “Peer Group” consists of the following companies selected on the basis of similarity in nature of their businesses: American Public Education, Inc. (APEI), Graham Holdings Company (GHC), Grand Canyon Education, Inc. (LOPE), Laureate Education, Inc. (LAUR), Perdoceo Education Corporation (formerly known as Career Education Corporation) (PRDO), and Strategic Education, Inc. (formerly known as Strayer Education, Inc.) (STRA).

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto. It should also be read in conjunction with the Cautionary Disclosure Regarding Forward-Looking Statements (see the Introduction section preceding Part I), the Risk Factors (see Item 1A. “Risk Factors”), and the Financial Aid and Legislative and Regulatory Requirements (see Item 1. “Business”) disclosures set forth in this report.

Throughout this MD&A, we sometimes use information derived from the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto but not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain of these items are considered “non-GAAP financial measures” under the Securities and Exchange Commission (“SEC”) rules. See the “Non-GAAP Financial Measures and Reconciliations”

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section for the reasons we use these non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures.

Certain items presented in tables may not sum due to rounding. Percentages presented are calculated from the underlying numbers in thousands. Discussions throughout this MD&A are based on continuing operations unless otherwise noted. The MD&A should be read in conjunction with the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” and the notes thereto.

The following discussion is on the comparison between fiscal year 2024 and fiscal year 2023 results. For a discussion on the comparison between fiscal year 2023 and fiscal year 2022 results, see the MD&A included in Adtalem’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023, as filed with the SEC.

Revision of Previously Issued Consolidated Financial Statements

This MD&A has been amended to give effect to the revision discussed in Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”

Segments

We present three reportable segments as follows:

Chamberlain – Offers degree and certificate programs in the nursing and health professions postsecondary education industry.

Walden – Offers degree and certificate programs, including those in nursing, education, counseling, business, psychology, public health, social work and human services, public administration and public policy, and criminal justice.

Medical and Veterinary – Offers degree and certificate 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.”

“Home Office” includes activities not allocated to a reportable segment.

Fiscal Year 2024 Highlights

Financial and operational highlights for fiscal year 2024 include:

| ● | Adtalem revenue increased 9.2%, or $133.8 million, to $1,584.7 million in fiscal year 2024 compared to the prior year driven by increased revenue across all of our segments.

| ● | Net income increased 46.5%, or $43.4 million, to $136.8 million in fiscal year 2024 compared to the prior year. This increase was primarily driven by an increase in revenue along with decreases in amortization of acquired intangible assets, restructuring expense, business acquisition and integration expense, and write-off of debt discount and issuance costs in fiscal year 2024, partially offset by increases in labor and other costs to support increased enrollment, investments to support growth initiatives, incentive compensation expense, provision for bad debts, and the provision for income taxes, and a decrease in gain on sale of assets.

| ● | Diluted earnings per share increased 65.4%, or $1.34, to $3.39 in fiscal year 2024 compared to the prior year driven by the increase in net income and lower diluted shares due to share repurchases.

| ● | Adjusted net income increased 5.0%, or $9.6 million, to $201.8 million in fiscal year 2024 compared to the prior year. This increase was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, investments to support growth initiatives, incentive compensation expense, provision for bad debts, and provision for income taxes.

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| ● | Diluted adjusted earnings per share increased 19.0%, or $0.80, to $5.01 in fiscal year 2024 compared to the prior year driven by the increase in adjusted net income and lower diluted shares due to share repurchases.

| ● | For fiscal year 2024, average total student enrollment at Chamberlain increased 6.9% compared to the prior year. For the May 2024 session, total student enrollment at Chamberlain increased 10.4% compared to the same session last year.

| ● | For fiscal year 2024, average total student enrollment at Walden increased 6.9% compared to the prior year. As of June 30, 2024, total student enrollment at Walden increased 11.3% compared to June 30, 2023.

| ● | For fiscal year 2024, average total student enrollment at the medical and veterinary schools decreased 5.1% compared to the prior year. For the May 2024 semester, total student enrollment at the medical and veterinary schools decreased 2.9% compared to the same semester last year.

| ● | On January 26, 2024, we made a prepayment of $50.0 million on our Term Loan B debt.

| ● | Adtalem repurchased a total of 5,446,113 shares of its common stock under its share repurchase programs at an average cost of $47.96 per share during fiscal year 2024. On January 16, 2024, Adtalem completed its thirteenth share repurchase program. On January 19, 2024, we announced that the Board of Directors authorized Adtalem’s fourteenth share repurchase program, which allows repurchase of up to $300.0 million of its common stock through January 16, 2027. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors.

Results of Operations

Revenue

The following table presents revenue by segment detailing the changes from the prior year (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2024 |
​ | ​ | Chamberlain |  | Walden |  | Medical and Veterinary |  | Consolidated |
Fiscal year 2023 | ​ | $ | 571,034 | ​ | $ | 533,725 | ​ | $ | 346,067 | ​ | $ | 1,450,826 | ​
Growth | ​ | ​ | 62,488 | ​ | ​ | 61,607 | ​ | ​ | 9,731 | ​ | ​ | 133,826 | ​
Fiscal year 2024 | ​ | $ | 633,522 | ​ | $ | 595,332 | ​ | $ | 355,798 | ​ | $ | 1,584,652 | ​
% change from prior year | ​ | ​ | 10.9 | % | ​ | 11.5 | % | ​ | 2.8 | % | ​ | 9.2 | %

Chamberlain

Chamberlain Student Enrollment:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year 2024 | ​
Session | ​ | July 2023 | ​ | Sept. 2023 | ​ | Nov. 2023 | ​ | Jan. 2024 | ​ | Mar. 2024 | ​ | May 2024 | ​
Total students | ​ | 32,175 | ​ | 34,889 | ​ | 35,592 | ​ | 37,196 | ​ | 37,985 | ​ | 36,750 | ​
% change from prior year | ​ | 2.6 | % | 5.2 | % | 6.6 | % | 7.0 | % | 9.0 | % | 10.4 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year 2023 | ​
Session | ​ | July 2022 | ​ | Sept. 2022 | ​ | Nov. 2022 | ​ | Jan. 2023 | ​ | Mar. 2023 | ​ | May 2023 |
Total students | ​ | 31,371 | ​ | 33,153 | ​ | 33,390 | ​ | 34,760 | ​ | 34,847 | ​ | 33,284 | ​
% change from prior year | ​ | (4.1) | % | (4.0) | % | (0.8) | % | 1.8 | % | 2.0 | % | 1.2 | %

Chamberlain revenue increased 10.9%, or $62.5 million, to $633.5 million in fiscal year 2024 compared to the prior year, driven by an increase in enrollment and higher tuition rates. Enrollment has improved in all graduate and doctoral programs and the undergraduate Bachelor of Science in Nursing (“BSN”) programs. In the March and May 2024 sessions, the Registered Nurse to Bachelor of Science in Nursing (“RN-BSN”) online degree program also saw increased total enrollment. Chamberlain is achieving growth through leveraging scale and national footprint and providing a full breadth of nursing programs and modalities.

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Tuition Rates:

Tuition for the BSN onsite and online degree program ranges from $705 to $753 per credit hour. Tuition for the RN-BSN online degree program is $635 per credit hour. Tuition for the online Master of Science in Nursing (“MSN”) degree program is $695 per credit hour. Tuition for the online Family Nurse Practitioner (“FNP”) degree program is $710 per credit hour. Tuition for the online Doctor of Nursing Practice (“DNP”) degree program is $806 per credit hour. Tuition for the online Master of Public Health (“MPH”) degree program is $590 per credit hour. Tuition for the online Master of Social Work (“MSW”) degree program is $695 per credit hour. Tuition for the onsite Master of Physician Assistant Studies (“MPAS”) is $8,000 per session. In most cases, these tuition rates represent increases of approximately 0% to 8% with an average of approximately 4% from the prior year. These tuition rates do not include the cost of course fees, books, supplies, transportation, clinical fees, living expenses, or other fees as listed in the Chamberlain academic catalog.

Walden

Walden Student Enrollment:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year 2024 | ​
​ | ​ | September 30, | ​ | December 31, | ​ | March 31, | ​ | June 30, | ​
Period | ​ | 2023 | ​ | 2023 | ​ | 2024 | ​ | 2024 | ​
Total students | ​ | 40,975 | ​ | 40,971 | ​ | 42,751 | ​ | 41,845 | ​
% change from prior year | ​ | 0.5 | % | 7.9 | % | 8.4 | % | 11.3 | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year 2023 | ​
​ | ​ | September 30, | ​ | December 31, | ​ | March 31, | ​ | June 30, | ​
Period | ​ | 2022 | ​ | 2022 | ​ | 2023 | ​ | 2023 | ​
Total students | ​ | 40,772 | ​ | 37,956 | ​ | 39,427 | ​ | 37,582 | ​
% change from prior year | ​ | (9.2) | % | (7.8) | % | (7.9) | % | (4.8) | %

Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 11.5%, or $61.6 million, to $595.3 million in fiscal year 2024 compared to the prior year driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. Walden’s performance turnaround in enrollment in fiscal year 2024 has been accelerated by investments in student experience and brand along with providing flexibility to working adults through part-time and Tempo Learning® competency-based programs.

Tuition Rates:

On a per credit hour basis, tuition for Walden programs range from $130 per credit hour to $1,060 per credit hour, with the wide range due to the nature of the programs. General education courses are charged at $340 per credit hour. Other programs such as those with a subscription-based learning modality or those billed on a subscription period or term basis range from $1,550 to $7,325 per term. Students are charged a program fee that ranges from $50 to $230 per term as well as a clinical fee of $160 per course for specific programs. Some programs require students to attend residencies, skills labs, and pre-practicum labs, which are charged at a range of $1,000 to $2,550 per event. In most cases, these tuition rates, event charges, and fees represent increases of approximately 0% to 4% with an average of approximately 2% from the prior year. These tuition rates, event charges, and fees do not include the cost of books or personal technology, supplies, transportation, or living expenses.

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Medical and Veterinary

Medical and Veterinary Student Enrollment:

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year 2024 | ​
Semester | ​ | Sept. 2023 | ​ | Jan. 2024 | ​ | May 2024 | ​
Total students | ​ | 5,209 | ​ | 5,073 | ​ | 4,726 | ​
% change from prior year | ​ | (7.5) | % | (4.5) | % | (2.9) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fiscal Year 2023 | ​
Semester | ​ | Sept. 2022 | ​ | Jan. 2023 | ​ | May 2023 |
Total students | ​ | 5,634 | ​ | 5,312 | ​ | 4,869 | ​
% change from prior year | ​ | 3.4 | % | 1.6 | % | (8.2) | %

Medical and Veterinary revenue increased 2.8%, or $9.7 million, to $355.8 million in fiscal year 2024 compared to the prior year, driven by tuition rate increases at all three institutions in this segment, partially offset by decreased enrollment at all three institutions.

Management’s focus is on increasing enrollment and renewing operational effectiveness, specifically around academic support, the enrollment experience, and marketing.

Tuition Rates:

| ● | Effective for semesters beginning in September 2023, for students first enrolled prior to May 2022, tuition rates for the beginning basic sciences and clinical rotation portions of AUC’s medical program are $26,680 and $31,328, respectively, per semester, which represents a 6.8% and 12.0% increase, respectively, from the prior academic year. Effective for semesters beginning in September 2023, for students first enrolled in May 2022 and after, tuition rates for the beginning basic sciences and clinical rotation portions of AUC’s medical program are $21,568 and $28,146, respectively, per semester, which represents a 6.8% and 12.0% increase, respectively, from the prior academic year. In addition, students first enrolled in May 2022 and after are charged administrative fees of $5,430 and $3,841 for the basic sciences and clinical rotation portions of the program, respectively, per semester, which represents a 6.8% and 12.0% increase, respectively, from the prior academic year.

| ● | Effective for semesters beginning in September 2023, for students first enrolled prior to May 2022, tuition rates for the beginning basic sciences and clinical rotation portions of RUSM’s medical program are $27,547 and $30,397, respectively, per semester. These tuition rates represent a 6.0% increase from the prior academic year. Effective for semesters beginning in September 2023, for students first enrolled in May 2022 and after, tuition rates for the beginning basic sciences and clinical rotation portions of RUSM’s medical program are $23,284 and $27,447, respectively, per semester. In addition, students first enrolled in May 2022 and after are charged administrative fees ranging from $5,883 to $6,662 for the basic sciences portion of the program and $3,420 for the clinical rotation portion of the program, per semester. These tuition rates and fees represent a 6.0% increase from the prior academic year.

| ● | Effective for semesters beginning in September 2023, for students who first enrolled prior to September 2018, tuition rates for the pre-clinical (semesters 1-7) and clinical curriculum (semesters 8-10) of RUSVM’s veterinary program are $22,334 and $28,034, respectively, per semester. Effective for semesters beginning in September 2023, for students first enrolled in September 2018 and after, tuition rates for the pre-clinical and clinical curriculum of RUSVM’s veterinary program are $24,044 per semester. All of these tuition rates represent a 6.0% increase from the prior academic year.

The respective tuition rates for AUC, RUSM, and RUSVM do not include the cost of transportation, living expenses, or health insurance.

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Cost of Educational Services

The largest component of cost of educational services is the cost of faculty and staff who support educational operations. This expense category also includes the costs of facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student education-related support activities, and the provision for bad debts. We have not experienced significant inflationary pressures on wages or other costs of delivering our educational services; however, should inflation persist in the overall economy, cost increases could affect our results of operations in the future. The following table presents cost of educational services by segment detailing the changes from the prior year (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2024 |
​ |  | Chamberlain |  | Walden |  | Medical and Veterinary | ​ | Consolidated | ​
Fiscal year 2023 |  | $ | 248,727 | ​ | $ | 199,625 |  | $ | 200,134 |  | $ | 648,486 | ​
Cost increase |  |  | 28,488 | ​ |  | 21,485 | ​ |  | 89 |  |  | 50,062 | ​
Fiscal year 2024 |  | $ | 277,215 | ​ | $ | 221,110 |  | $ | 200,223 |  | $ | 698,548 | ​
% change from prior year |  | ​ | 11.5 | % |  | 10.8 | % | ​ | 0.0 | % | ​ | 7.7 | %

Cost of educational services increased 7.7%, or $50.1 million, to $698.5 million in fiscal year 2024 compared to the prior year. This cost increase was primarily driven by an increase in labor and other costs to support increased enrollment, and an increase in provision for bad debts at Chamberlain and Walden.

As a percentage of revenue, cost of educational services was 44.1% in fiscal year 2024 compared to 44.7% in the prior year. The decrease in the percentage was primarily the result of revenue growth accompanied with cost efficiencies.

Student Services and Administrative Expense

The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization expense of acquired intangible assets. We have not experienced significant inflationary pressures on wages or other costs of providing services to our students and educational institutions; however, should inflation persist in the overall economy, cost increases could affect our results of operations in the future. The following table presents student services and administrative expense by segment detailing the changes from the prior year (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2024 |
​ |  | Chamberlain |  | Walden |  | Medical and Veterinary |  | Home Office | ​ | Consolidated | ​
Fiscal year 2023 | ​ | $ | 186,805 | ​ | $ | 294,974 | ​ | $ | 78,598 | ​ | $ | 25,632 | ​ | $ | 586,009 | ​
Cost increase | ​ |  | 31,702 | ​ |  | 19,940 | ​ |  | 5,470 | ​ |  | 5,444 | ​ |  | 62,556 | ​
Amortization of acquired intangible assets decrease | ​ | ​ | — | ​ | ​ | (25,595) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (25,595) | ​
Litigation reserve increase | ​ | ​ | — | ​ | ​ | 8,500 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 8,500 | ​
Loss on assets held for sale increase | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 647 | ​ | ​ | 647 | ​
Debt modification costs increase | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 848 | ​ | ​ | 848 | ​
Fiscal year 2024 | ​ | $ | 218,507 | ​ | $ | 297,819 | ​ | $ | 84,068 | ​ | $ | 32,571 | ​ | $ | 632,965 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Fiscal year 2024 % change: | ​ |  | ​ | ​ | ​ | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cost increase | ​ | ​ | 17.0 | % |  | 6.8 | % | ​ | 7.0 | % |  | NM | ​ | ​ | 10.7 | %
Amortization of acquired intangible assets decrease | ​ |  | — | ​ |  | (8.7) | % |  | — | ​ |  | NM | ​ |  | (4.4) | %
Litigation reserve increase | ​ |  | — | ​ |  | 2.9 | % |  | — | ​ |  | NM | ​ |  | 1.5 | %
Loss on assets held for sale increase | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | NM | ​ |  | 0.1 | %
Debt modification costs increase | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | NM | ​ |  | 0.1 | %
Fiscal year 2024 % change | ​ |  | 17.0 | % |  | 1.0 | % |  | 7.0 | % |  | NM | ​ |  | 8.0 | %

Student services and administrative expense increased 8.0%, or $47.0 million, to $633.0 million in fiscal year 2024 compared to the prior year. Excluding amortization of acquired intangible assets, litigation reserve, loss on assets held for

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sale, and debt modification costs, student services and administrative expense increased 10.7%, or $62.6 million, in fiscal year 2024 compared to the prior year. This cost increase was primarily driven by an increase in incentive compensation expense, marketing expense, and investments to support growth initiatives.

As a percentage of revenue, student services and administrative expense was 39.9% in fiscal year 2024 compared to 40.4% in the prior year. The decrease in the percentage was primarily the result of efficiencies in marketing spend and a decrease in amortization of acquired intangible assets.

Restructuring Expense

Restructuring expense was $1.9 million and $18.8 million in fiscal year 2024 and 2023, respectively. This decrease was primarily driven by higher real estate consolidations in fiscal year 2023 at Walden, Medical and Veterinary, and Adtalem’s home office resulting in impairments on operating lease assets and property and equipment. We continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities.

Business Acquisition and Integration Expense

Business acquisition and integration expense was $34.2 million and $42.7 million in fiscal year 2024 and 2023, respectively. These are costs associated with integrating Walden into Adtalem. In addition, during fiscal year 2023, we initiated transformation initiatives to accelerate growth and organizational agility. Certain costs relating to this transformation are included in business acquisition and integration expense in the Consolidated Statements of Income. We may incur additional integration costs in fiscal year 2025, but at a decreasing rate.

Gain on Sale of Assets

On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep Foundation (“DePaul College Prep”) for $52.0 million. Adtalem received $5.2 million of cash at the time of closing and held a mortgage, secured by the property, from DePaul College Prep for $46.8 million. The mortgage was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. DePaul College Prep had an option to make prepayments. Due to Adtalem’s involvement with financing the sale, the transaction did not qualify as a sale for accounting purposes at the time of closing. Adtalem continued to maintain the assets associated with the sale on the Consolidated Balance Sheets. We recorded a note receivable of $40.3 million and a financing payable of $45.5 million at the time of the sale, which were classified as other assets, net and other liabilities, respectively, on the Consolidated Balance Sheets. On February 23, 2023, DePaul College Prep paid the mortgage in full. Upon receiving full repayment of the mortgage, Adtalem no longer is involved in the financing of the sale and therefore derecognized the note receivable, the financing payable, and the assets associated with the campus facility, which resulted in recognizing a gain on sale of assets of $13.3 million in fiscal year 2023. This gain was recorded at Adtalem’s home office, which is classified as “Home Office” in Note 22 “Segment Information” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”

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Operating Income

The following table presents a reconciliation of operating income (GAAP) to adjusted operating income (non-GAAP) by segment (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Increase/(Decrease) | ​
​ | ​ | 2024 | ​ | 2023 | ​ | $ | ​ | % | ​
Chamberlain: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (GAAP) | ​ | $ | 137,800 | ​ | $ | 134,685 | ​ | $ | 3,115 | ​ | 2.3 | %
Restructuring expense | ​ | ​ | — | ​ | ​ | 818 | ​ | ​ | (818) | ​ | ​ | ​
Adjusted operating income (non-GAAP) | ​ | $ | 137,800 | ​ | $ | 135,503 | ​ | $ | 2,297 | ​ | 1.7 | %
Operating margin (GAAP) | ​ | ​ | 21.8 | % | ​ | 23.6 | % | ​ | ​ | ​ | ​ | ​
Operating margin (non-GAAP) | ​ | ​ | 21.8 | % | ​ | 23.7 | % | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Walden: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (GAAP) | ​ | $ | 77,179 | ​ | $ | 35,880 | ​ | $ | 41,299 | ​ | 115.1 | %
Restructuring expense | ​ | ​ | (776) | ​ | ​ | 3,245 | ​ | ​ | (4,021) | ​ | ​ | ​
Amortization of acquired intangible assets | ​ | ​ | 35,644 | ​ | ​ | 61,239 | ​ | ​ | (25,595) | ​ | ​ | ​
Litigation reserve | ​ | ​ | 18,500 | ​ | ​ | 10,000 | ​ | ​ | 8,500 | ​ | ​ | ​
Adjusted operating income (non-GAAP) | ​ | $ | 130,547 | ​ | $ | 110,364 | ​ | $ | 20,183 | ​ | 18.3 | %
Operating margin (GAAP) | ​ | ​ | 13.0 | % | ​ | 6.7 | % | ​ | ​ | ​ | ​ | ​
Operating margin (non-GAAP) | ​ | ​ | 21.9 | % | ​ | 20.7 | % | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Medical and Veterinary: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (GAAP) | ​ | $ | 71,065 | ​ | $ | 59,649 | ​ | $ | 11,416 | ​ | 19.1 | %
Restructuring expense | ​ | ​ | 442 | ​ | ​ | 7,687 | ​ | ​ | (7,245) | ​ | ​ | ​
Adjusted operating income (non-GAAP) | ​ | $ | 71,507 | ​ | $ | 67,336 | ​ | $ | 4,171 | ​ | 6.2 | %
Operating margin (GAAP) | ​ | ​ | 20.0 | % | ​ | 17.2 | % | ​ | ​ | ​ | ​ | ​
Operating margin (non-GAAP) | ​ | ​ | 20.1 | % | ​ | 19.5 | % | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Home Office: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating loss (GAAP) | ​ | $ | (68,990) | ​ | $ | (62,044) | ​ | $ | (6,946) | ​ | (11.2) | %
Restructuring expense | ​ | ​ | 2,204 | ​ | ​ | 7,067 | ​ | ​ | (4,863) | ​ | ​ | ​
Business acquisition and integration expense | ​ | ​ | 34,215 | ​ | ​ | 42,661 | ​ | ​ | (8,446) | ​ | ​ | ​
Loss on assets held for sale | ​ | ​ | 647 | ​ | ​ | — | ​ | ​ | 647 | ​ | ​ | ​
Debt modification costs | ​ | ​ | 848 | ​ | ​ | — | ​ | ​ | 848 | ​ | ​ | ​
Gain on sale of assets | ​ | ​ | — | ​ | ​ | (13,317) | ​ | ​ | 13,317 | ​ | ​ | ​
Adjusted operating loss (non-GAAP) | ​ | $ | (31,076) | ​ | $ | (25,633) | ​ | $ | (5,443) | ​ | (21.2) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adtalem Global Education: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (GAAP) | ​ | $ | 217,054 | ​ | $ | 168,170 | ​ | $ | 48,884 | ​ | 29.1 | %
Restructuring expense | ​ | ​ | 1,870 | ​ | ​ | 18,817 | ​ | ​ | (16,947) | ​ | ​ | ​
Business acquisition and integration expense | ​ | ​ | 34,215 | ​ | ​ | 42,661 | ​ | ​ | (8,446) | ​ | ​ | ​
Amortization of acquired intangible assets | ​ | ​ | 35,644 | ​ | ​ | 61,239 | ​ | ​ | (25,595) | ​ | ​ | ​
Litigation reserve | ​ | ​ | 18,500 | ​ | ​ | 10,000 | ​ | ​ | 8,500 | ​ | ​ | ​
Loss on assets held for sale | ​ | ​ | 647 | ​ | ​ | — | ​ | ​ | 647 | ​ | ​ | ​
Debt modification costs | ​ | ​ | 848 | ​ | ​ | — | ​ | ​ | 848 | ​ | ​ | ​
Gain on sale of assets | ​ | ​ | — | ​ | ​ | (13,317) | ​ | ​ | 13,317 | ​ | ​ | ​
Adjusted operating income (non-GAAP) | ​ | $ | 308,778 | ​ | $ | 287,570 | ​ | $ | 21,208 | ​ | 7.4 | %
Operating margin (GAAP) | ​ | ​ | 13.7 | % | ​ | 11.6 | % | ​ | ​ | ​ | ​ | ​
Operating margin (non-GAAP) | ​ | ​ | 19.5 | % | ​ | 19.8 | % | ​ | ​ | ​ | ​ | ​

Consolidated operating income increased 29.1%, or $48.9 million, to $217.1 million in fiscal year 2024 compared to the prior year. The operating income increase in fiscal year 2024 was primarily driven by an increase in revenue and decreases in restructuring expense, business acquisition and integration expense, and amortization of acquired intangible assets, partially offset by increases in litigation reserves, labor and other costs to support increased enrollment, incentive compensation expense, marketing expense, and provision for bad debts, and the gain on sale of assets in fiscal year 2023. The decrease in amortization of acquired intangible assets is driven by the decrease in amortization relating to the Walden student relationships intangible asset. This intangible asset is amortized based on the estimated retention of the students and considers the revenue and cash flow associated with these existing students, which are concentrated at the beginning of the asset’s useful life.

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Consolidated adjusted operating income increased 7.4%, or $21.2 million, to $308.8 million in fiscal year 2024 compared to the prior year. The adjusted operating income increase in fiscal year 2024 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, incentive compensation expense, marketing expense, and provision for bad debts.

Chamberlain

Chamberlain operating income increased 2.3%, or $3.1 million, to $137.8 million in fiscal year 2024 compared to the prior year. Segment adjusted operating income increased 1.7%, or $2.3 million, to $137.8 million in fiscal year 2024 compared to the prior year. The adjusted operating income increase in fiscal year 2024 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, incentive compensation expense, marketing expense, and provision for bad debts.

Walden

Walden operating income increased 115.1%, or $41.3 million, to $77.2 million in fiscal year 2024 compared to the prior year. Segment adjusted operating income increased 18.3%, or $20.2 million, to $130.5 million in fiscal year 2024 compared to the prior year. The adjusted operating income increase in fiscal year 2024 was primarily driven by the increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, incentive compensation expense, and provision for bad debts.

Medical and Veterinary

Medical and Veterinary operating income increased 19.1%, or $11.4 million, to $71.1 million in fiscal year 2024 compared to the prior year. Segment adjusted operating income increased 6.2%, or $4.2 million, to $71.5 million in fiscal year 2024 compared to the prior year. The adjusted operating income increase in fiscal year 2024 was primarily driven by an increase in revenue and a decrease in provision for bad debts.

Interest Expense

Interest expense was $63.7 million and $63.1 million in fiscal year 2024 and 2023, respectively. This increase was primarily driven by the increase in letter of credit fees (as discussed in Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”), partially offset by lower write-offs on debt discount and issuance costs on Term Loan B in the current year compared to the prior year.

Other Income, Net

Other income, net was income of $10.5 million and income of $7.0 million in fiscal year 2024 and 2023, respectively. The other income, net increase in fiscal year 2024 was primarily driven by $5.0 million of expense in fiscal year 2023 for an impairment of an equity investment.

(Provision for) Benefit from Income Taxes

Our effective income tax rate (“ETR”) from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including tax on global intangible low-taxed income (“GILTI”), limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, liabilities for uncertain tax positions, and tax benefits on stock-based compensation awards.

Our effective tax rate from continuing operations was 16.0% and 9.2% in fiscal year 2024 and 2023, respectively. In fiscal year 2024, our effective tax rate increase was primarily due to an increase in the percentage of earnings operations in higher taxed jurisdictions and a limitation of tax benefits on certain executive compensation. The rate increase was partially offset due to the lapsing of statues of limitations for unrecognized tax benefits in fiscal year 2024. In addition, in fiscal year 2023, we released a valuation allowance on certain deferred tax assets based on our reassessment of the amount of state net operating loss carryforwards that are more likely than not to be realized.

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Discontinued Operations

Beginning in the second quarter of fiscal year 2022, ACAMS, Becker, OCL, and EduPristine operations were classified as discontinued operations. In addition, we continue to incur costs associated with ongoing litigation and settlements related to the DeVry University and Carrington College divestitures, which were completed during fiscal year 2019, and are classified as expense within discontinued operations.

Loss from discontinued operations in fiscal year 2024 was $0.9 million. This loss consisted of the following: (i) loss of $0.8 million driven by ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, partially offset by income from the DeVry University earn-out; and (ii) provision for income taxes of $0.2 million associated with the items listed above.

Loss from discontinued operations in fiscal year 2023 was $8.4 million. This loss consisted of the following: (i) loss of $8.5 million driven by ongoing litigation costs and settlements related to the DeVry University divestiture, partially offset by income from the DeVry University earn-out; (ii) loss on the sale of ACAMS, Becker, and OCL of $3.6 million for working capital adjustments to the initial sales prices and a tax return to provision adjustment; and (iii) benefit from income taxes of $3.6 million associated with the items listed above.

Liquidity and Capital Resources

Adtalem’s primary source of liquidity is the cash received from payments for student tuition, fees, books, and other educational materials. These payments include funds originating as financial aid from various federal and state loan and grant programs, student and family educational loans, employer educational reimbursements, scholarships, and student and family financial resources. Adtalem continues to provide financing options for its students, including Adtalem’s credit extension programs.

The pattern of cash receipts during the year is seasonal. Adtalem’s cash collections on accounts receivable peak at the start of each institution’s term. Accounts receivable reach their lowest level at the end of each institution’s term.

Adtalem’s consolidated cash and cash equivalents balance of $219.3 million and $272.2 million as of June 30, 2024 and 2023, respectively, included cash and cash equivalents held at Adtalem’s international operations of $4.6 million and $7.2 million as of June 30, 2024 and 2023, respectively, which is available to Adtalem for general corpora te purposes.

Cash Flow Summary

Operating Activities

The following table provides a summary of cash flows from operating activities (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023
Income from continuing operations | ​ | $ | 137,713 | ​ | $ | 101,752
Non-cash items | ​ |  | 203,567 | ​ |  | 196,725
Changes in assets and liabilities | ​ |  | (52,913) | ​ |  | (103,787)
Net cash provided by operating activities-continuing operations | ​ | $ | 288,367 | ​ | $ | 194,690

Net cash provided by operating activities from continuing operations in fiscal year 2024 was $288.4 million compared to $194.7 million in the prior year. The increase was driven by an increase in income from continuing operations, net of lower non-cash items, and changes in working capital. The increase of $6.8 million in non-cash items between fiscal year 2024 and 2023 was primarily driven by increases in provision for bad debts, deferred income taxes, and gain on sale of assets, which were partially offset by decreases in impairments to operating lease assets and amortization of intangible assets. The increase of $50.9 million in cash generated from changes in assets and liabilities between fiscal year 2024 and 2023 was primarily due to timing differences in accounts and financing receivables, prepaid assets, cloud computing implementation assets, accounts payable, accrued payroll and benefits, accrued liabilities, accrued interest, and deferred revenue.

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Investing Activities

Capital expenditures were $48.9 million and $26.0 million in fiscal year 2024 and 2023, respectively. The capital expenditures in fiscal year 2024 primarily consisted of spending for information technology investments and Chamberlain’s campus development. For fiscal year 2025, we expect capital spending on information technology, new campus development at Chamberlain, and facility improvements at the medical and veterinary schools. Management anticipates fiscal year 2025 capital spending to be in the $55 to $75 million range. The source of funds for this capital spending will be from operations or the Credit Facility (as defined and discussed in Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data”).

During fiscal year 2024 and 2023, we received proceeds from the sale of marketable securities held in a Rabbi Trust of $1.7 million and $7.6 million, respectively, and made additional investments in marketable securities held by the Rabbi Trust of $0.7 million and $1.5 million, respectively.

On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep for $52.0 million. Adtalem received $5.2 million of cash at the time of closing and held a mortgage loan, secured by the property, from DePaul College Prep for $46.8 million. The mortgage loan was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. The buyer had an option to make prepayments. On February 23, 2023, DePaul College Prep paid the mortgage loan in full. The $46.8 million received during fiscal year 2023 is classified as an investing activity in the Consolidated Statements of Cash Flows.

During fiscal year 2023, we paid $3.2 million for a working capital adjustment to the initial sales prices for ACAMS, Becker, and OCL.

Financing Activities

The following table provides a summary of cash flows from financing activities (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023
Repurchases of common stock for treasury | ​ | $ | (261,966) | ​ | $ | (123,133)
Payment on equity forward contract | ​ | ​ | — | ​ | ​ | (13,162)
Net repayments of long-term debt | ​ | ​ | (50,000) | ​ | ​ | (150,861)
Other | ​ |  | 10,168 | ​ |  | (1,359)
Net cash used in financing activities | ​ | $ | (301,798) | ​ | $ | (288,515)

On March 1, 2022, we announced that the Board authorized Adtalem’s thirteenth share repurchase program, which allows Adtalem to repurchase up to $300.0 million of its common stock through February 25, 2025. On January 16, 2024, Adtalem completed its thirteenth share repurchase program. On January 19, 2024, we announced that the Board authorized Adtalem’s fourteenth share repurchase program, which allows Adtalem to repurchase up to $300.0 million of its common stock through January 16, 2027. As of June 30, 2024, $211.6 million of authorized share repurchases were remaining under the fourteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 16 “Share Repurchases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our share repurchase programs.

On March 14, 2022, we entered into an ASR agreement to repurchase $150.0 million of common stock. We received an initial delivery of 4,709,576 shares of common stock representing approximately 80% of the total shares expected to be delivered at the time of executing the ASR based on the per share price on the day prior to the execution date. The final number of shares to be repurchased was based on the volume-weighted average price of Adtalem’s common stock during the term of the ASR agreement, less a discount and subject to adjustments pursuant to the terms of the ASR agreement. The ASR agreement ended on October 14, 2022. Based on the volume-weighted average price of Adtalem’s common stock during the term of the ASR agreement, Adtalem owed the counter party 332,212 shares of common stock. We elected to settle the contract in cash instead of delivering shares by making a cash payment of $13.2 million on November 2, 2022.

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On March 1, 2021, we issued $800.0 million aggregate principal amount of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028. On August 12, 2021, Adtalem entered into its new credit agreement (the “Credit Agreement”) that provides for (1) a $850.0 million senior secured term loan (“Term Loan B”) with a maturity date of August 12, 2028 and (2) a $400.0 million senior secured revolving loan facility (“Revolver”) with a maturity date of August 12, 2026. We refer to the Term Loan B and Revolver collectively as the “Credit Facility.” The Revolver will be used to finance ongoing working capital and for general corporate purposes. During fiscal year 2022, we made a prepayment of $396.7 million on the Term Loan B. With that prepayment, we are no longer required to make quarterly installment payments. On April 11, 2022, we repaid $373.3 million of Notes at a price equal to 100% of the principal amount of the Notes. During June 2022, we repurchased on the open market an additional $20.8 million of Notes at a price equal to approximately 90% of the principal amount of the Notes. During the first quarter of fiscal year 2023, we repurchased on the open market an additional $0.9 million of Notes at a price equal to approximately 92% of the principal amount of the Notes. On September 22, 2022, November 22, 2022, and January 26, 2024, we made additional prepayments of $100.0 million, $50.0 million, and $50.0 million, respectively, on the Term Loan B. As of June 30, 2024, the principal balance of the Notes and Term Loan B was $405.0 million and $253.3 million, respectively. See Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Notes and our Credit Agreement.

In the event of unexpected market conditions or negative economic changes that could negatively affect Adtalem’s earnings and/or operating cash flow, Adtalem maintains a $400.0 million revolving credit facility with availability of $242.1 million as of June 30, 2024.

Material Cash Requirements

Long-Term Debt – As of June 30, 2024, we have principal balances of $405.0 million of Notes and $253.3 million of Term Loan B, which requires interest payments. With the Term Loan B prepayments noted above, we are no longer required to make quarterly principal installment payments on the Term Loan B. In addition, we maintain a $400.0 million revolving credit facility with availability of $242.1 million as of June 30, 2024.

ED has recently allowed reductions in our letters of credit totaling $90.8 million. On January 31, 2024, ED allowed a $76.2 million letter of credit in favor of ED to expire without any requirement for Adtalem to renew it. On April 26, 2024, ED indicated that it would permit Adtalem to reduce its $84.0 million surety-backed letter of credit in favor of ED on behalf of Walden, which allows Walden to participate in Title IV programs, to $69.4 million, which took effect on June 24, 2024, and was extended through December 31, 2024. In addition, Adtalem had a letter of credit outstanding under its Revolver in the amount of $157.9 million as of June 30, 2024, in favor of ED, which allows Adtalem institutions to participate in Title IV programs. As of June 30, 2024, Adtalem had $227.3 million of letters of credit outstanding in favor of ED. See Note 14 “Debt” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on the Notes and our Credit Agreement.

Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted $44.3 million of surety bonds as of June 30, 2024 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM.

Operating Lease Obligations – We have operating lease obligations for the minimum payments required under various lease agreements which are recorded on the Consolidated Balance Sheets. In addition, we sublease certain space to third parties, which partially offsets the lease obligations at these facilities. See Note 12 “Leases” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our lease agreements.

Critical Accounting Estimates

We describe our significant accounting policies in the Notes to Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.” The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Critical accounting estimates discussed below are those that we believe involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial

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condition or results of operations. Although management believes its assumptions and estimates are reasonable, actual results could differ from those estimates.

Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts and financing receivable balances as of each balance sheet date. In evaluating the collectability of our accounts and financing receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future. The estimate of our credit losses involves a significant level of uncertainty as it requires significant judgment to estimate the amount we will collect in the future on our accounts and financing receivable balances. See Note 10 “Accounts and Financing Receivables” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our credit losses.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations. Upon identifying such an event, if the carrying value of the long-lived asset is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Significant judgement is involved in determining whether a triggering event has occurred, and significant assumptions are used in the estimation of future cash flows and fair values of long-lived assets. Changes in our judgments and assumptions could result in impairments of long-lived assets in future periods.

Goodwill and Intangible Assets

Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31.

We have the option to assess goodwill for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that the reporting unit fair value is more likely than not less than its carrying value, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the reporting unit’s fair value. If the carrying value of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of goodwill. We also have the option to perform a qualitative assessment to test indefinite-lived intangible assets for impairment by determining whether it is more likely than not that the indefinite-lived intangible assets are impaired. If it is determined that the indefinite-lived intangible asset is more likely than not impaired, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the indefinite-lived intangible assets. If the carrying value of the indefinite-lived intangible assets exceeds its fair value, an impairment loss is recognized to the extent the carrying value exceeds fair value.

For intangible assets with finite lives, we evaluate for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Intangible assets with finite lives are amortized over their expected economic lives, ranging from three to five years.

All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives.

Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Significant assumptions used in the determination of reporting unit fair value measurements generally include forecasted cash flows, discount rates, terminal growth rates, and earnings multiples. The discounted cash flow models used to determine the fair value of our AUC reporting unit during fiscal year 2024 reflected our most recent cash

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flow projections, a discount rate of 12.5%, and a terminal growth rate of 3.0%. Each of these inputs can significantly affect the fair values of our reporting units. Based on this quantitative assessment, it was determined that the fair value of the AUC reporting unit exceeded its carrying value by approximately 20% and therefore no goodwill impairment was identified.

Significant judgments and assumptions were used in determining the fair value of intangible assets. The with and without method of the income approach and the relief from royalty model used in the determination of the fair values of our AUC Title IV eligibility and trade name intangible assets, respectively, during fiscal year 2024 reflected our most recent revenue projections, a discount rate of 12.5%, a royalty rate of 5.5%, and a terminal growth rate of 3.0%. Each of these factors and assumptions can significantly affect the value of the intangible asset. Based on these quantitative assessments, it was determined that the fair values of these indefinite-lived intangible assets in the AUC reporting unit exceeded their carrying values by at least 23% and therefore no impairment was identified.

Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates. If economic conditions deteriorate, interest rates rise, or operating performance of our reporting units do not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods. See Note 13 “Goodwill and Intangible Assets” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our goodwill and intangible assets impairment analysis.

Income Taxes

Adtalem accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Adtalem also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. Adtalem’s deferred tax assets are reduced by a valuation allowance, when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. To assess whether it is more likely than not that deferred tax assets will be realized and whether a valuation allowance needs to be recorded against them, we consider future reversals of existing taxable temporary differences, expected future earnings, prior earnings history, and tax planning strategies. Such assessments involve significant judgements and are subject to change in the future particularly if earnings are significantly different from expectations.

Adtalem is subject to audit by federal, state, and foreign tax authorities and Adtalem reduces its net tax assets for the estimated additional tax and interest that may result from those tax authorities disputing uncertain tax positions Adtalem has taken. Evaluating the exposure associated with uncertain tax positions involves significant judgment and we record reserves based on our past experience with similar situations and on the technical support for the positions. Our effective tax rate for a given period could be impacted by changes in the measurement of uncertain tax positions.

Contingencies

Adtalem is subject to contingencies, such as various claims and legal actions that arise in the normal conduct of its business. We record an accrual for those matters where management believes a loss is probable and can be reasonably estimated. For those matters for which we have not recorded an accrual, their possible impact on Adtalem’s business, financial condition, or results of operations, cannot be predicted at this time. A significant amount of judgment and the use of estimates are required to quantify our ultimate exposure in these matters. The valuation of liabilities for these contingencies is reviewed on a quarterly basis and any necessary adjustments to the accrual on the Consolidated Balance Sheets is recorded. While we believe that the amount accrued to-date is adequate, future changes in circumstances could impact these determinations. See Note 21 “Commitments and Contingencies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data” for additional information on our loss contingencies.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 2 “Summary of Significant Accounting Policies” to the Consolidated Financial Statements in Item 8. “Financial Statements and Supplementary Data.”

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Non-GAAP Financial Measures and Reconciliations

We believe that certain non-GAAP financial measures provide investors with useful supplemental information regarding the underlying business trends and performance of Adtalem’s ongoing operations as seen through the eyes of management and are useful for period-over-period comparisons. We use these supplemental non-GAAP financial measures internally in our assessment of performance and budgeting process. However, these non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. The following are non-GAAP financial measures used in this Annual Report on Form 10-K:

Adjusted net income (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Adtalem’s diluted earnings per share adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, gain on sale of assets, write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, debt modification costs, tax benefit due to change in valuation allowance, tax benefit due to change in unrecognized tax benefits, and loss from discontinued operations.

Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Adtalem’s operating income adjusted for restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion.

Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Adtalem’s net income adjusted for loss from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, business acquisition and integration expense, litigation reserve, loss on assets held for sale, debt modification costs, and gain on sale of assets. This measure is applied on a consolidated and segment basis, depending on the context of the discussion. Provision for income taxes, interest expense, and other income, net is not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with operating income.

A description of special items in our non-GAAP financial measures described above are as follows:

| ● | Restructuring expense primarily related to real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office. We do not include normal, recurring, cash operating expenses in our restructuring expense.

| ● | Business acquisition and integration expense include expenses related to the Walden acquisition and certain costs related to growth transformation initiatives. We do not include normal, recurring, cash operating expenses in our business acquisition and integration expense.

| ● | Amortization of acquired intangible assets.

| ● | Amortization of cloud computing implementation assets.

| ● | Gain on sale of Adtalem’s Chicago, Illinois, campus facility.

| ● | Write-off of debt discount and issuance costs and gain on extinguishment of debt related to prepayments of debt, reserves related to significant litigation, impairment of an equity investment, loss on assets held for sale related to a fair value write-down on assets, and debt modification costs related to refinancing our Term Loan B loan.

| ● | Tax benefit due to change in valuation allowance.

| ● | Tax benefit due to change in unrecognized tax benefits.

| ● | Loss from discontinued operations includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, a loss on sale of ACAMS, Becker, and OCL for working capital adjustments to the initial sales prices and a tax return to provision adjustment, and the earn-outs we received.

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The following tables provide a reconciliation from the most directly comparable GAAP measure to these non-GAAP financial measures. The operating income reconciliation is included in the results of operations section within this MD&A.

Net income reconciliation to adjusted net income (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023
Net income (GAAP) | ​ | $ | 136,777 | ​ | $ | 93,358
Restructuring expense | ​ | ​ | 1,870 | ​ | ​ | 18,817
Business acquisition and integration expense | ​ | ​ | 34,215 | ​ | ​ | 42,661
Amortization of acquired intangible assets | ​ | ​ | 35,644 | ​ | ​ | 61,239
Gain on sale of assets | ​ | ​ | — | ​ | ​ | (13,317)
Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs | ​ | ​ | 21,108 | ​ | ​ | 19,226
Tax benefit due to change in valuation allowance | ​ | ​ | — | ​ | ​ | (6,184)
Tax benefit due to change in unrecognized tax benefits | ​ | ​ | (5,657) | ​ | ​ | —
Income tax impact on non-GAAP adjustments (1) | ​ | ​ | (23,104) | ​ | ​ | (31,997)
Loss from discontinued operations | ​ | ​ | 936 | ​ | ​ | 8,394
Adjusted net income (non-GAAP) | ​ | $ | 201,789 | ​ | $ | 192,197

(1) | Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

Diluted earnings per share reconciliation to adjusted earnings per share (shares in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023
Diluted earnings per share (GAAP) | ​ | $ | 3.39 | ​ | $ | 2.05
Effect on diluted earnings per share: | ​ | ​ | ​ | ​ | ​ | ​
Restructuring expense | ​ | ​ | 0.05 | ​ | ​ | 0.41
Business acquisition and integration expense | ​ | ​ | 0.85 | ​ | ​ | 0.94
Amortization of acquired intangible assets | ​ | ​ | 0.88 | ​ | ​ | 1.34
Gain on sale of assets | ​ | ​ | - | ​ | ​ | (0.29)
Write-off of debt discount and issuance costs, gain on extinguishment of debt, litigation reserve, investment impairment, loss on assets held for sale, and debt modification costs | ​ | ​ | 0.52 | ​ | ​ | 0.42
Tax benefit due to change in valuation allowance | ​ | ​ | - | ​ | ​ | (0.14)
Tax benefit due to change in unrecognized tax benefits | ​ | ​ | (0.14) | ​ | ​ | -
Income tax impact on non-GAAP adjustments (1) | ​ | ​ | (0.57) | ​ | ​ | (0.70)
Loss from discontinued operations | ​ | ​ | 0.02 | ​ | ​ | 0.18
Adjusted earnings per share (non-GAAP) | ​ | $ | 5.01 | ​ | $ | 4.21
Diluted shares used in non-GAAP EPS calculation | ​ | ​ | 40,307 | ​ | ​ | 45,600

(1) | Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.

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Reconciliation to adjusted EBITDA (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Increase/(Decrease) | ​
​ | ​ | 2024 | ​ | 2023 | ​ | $ | ​ | % | ​
Chamberlain: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (GAAP) | ​ | $ | 137,800 | ​ | $ | 134,685 | ​ | $ | 3,115 | ​ | 2.3 | %
Restructuring expense | ​ | ​ | — | ​ | ​ | 818 | ​ | ​ | (818) | ​ | ​ | ​
Depreciation | ​ | ​ | 18,752 | ​ | ​ | 17,175 | ​ | ​ | 1,577 | ​ | ​ | ​
Amortization of cloud computing implementation assets | ​ | ​ | 1,332 | ​ | ​ | 89 | ​ | ​ | 1,243 | ​ | ​ | ​
Stock-based compensation | ​ | ​ | 8,303 | ​ | ​ | 4,719 | ​ | ​ | 3,584 | ​ | ​ | ​
Adjusted EBITDA (non-GAAP) | ​ | $ | 166,187 | ​ | $ | 157,486 | ​ | $ | 8,701 | ​ | 5.5 | %
Adjusted EBITDA margin (non-GAAP) | ​ | ​ | 26.2 | % | ​ | 27.6 | % | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Walden: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (GAAP) | ​ | $ | 77,179 | ​ | $ | 35,880 | ​ | $ | 41,299 | ​ | 115.1 | %
Restructuring expense | ​ | ​ | (776) | ​ | ​ | 3,245 | ​ | ​ | (4,021) | ​ | ​ | ​
Amortization of acquired intangible assets | ​ | ​ | 35,644 | ​ | ​ | 61,239 | ​ | ​ | (25,595) | ​ | ​ | ​
Litigation reserve | ​ | ​ | 18,500 | ​ | ​ | 10,000 | ​ | ​ | 8,500 | ​ | ​ | ​
Depreciation | ​ | ​ | 7,389 | ​ | ​ | 9,419 | ​ | ​ | (2,030) | ​ | ​ | ​
Amortization of cloud computing implementation assets | ​ | ​ | 1,331 | ​ | ​ | 73 | ​ | ​ | 1,258 | ​ | ​ | ​
Stock-based compensation | ​ | ​ | 7,525 | ​ | ​ | 3,861 | ​ | ​ | 3,664 | ​ | ​ | ​
Adjusted EBITDA (non-GAAP) | ​ | $ | 146,792 | ​ | $ | 123,717 | ​ | $ | 23,075 | ​ | 18.7 | %
Adjusted EBITDA margin (non-GAAP) | ​ | ​ | 24.7 | % | ​ | 23.2 | % | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Medical and Veterinary: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating income (GAAP) | ​ | $ | 71,065 | ​ | $ | 59,649 | ​ | $ | 11,416 | ​ | 19.1 | %
Restructuring expense | ​ | ​ | 442 | ​ | ​ | 7,687 | ​ | ​ | (7,245) | ​ | ​ | ​
Depreciation | ​ | ​ | 11,983 | ​ | ​ | 12,438 | ​ | ​ | (455) | ​ | ​ | ​
Amortization of cloud computing implementation assets | ​ | ​ | 469 | ​ | ​ | 37 | ​ | ​ | 432 | ​ | ​ | ​
Stock-based compensation | ​ | ​ | 4,930 | ​ | ​ | 3,003 | ​ | ​ | 1,927 | ​ | ​ | ​
Adjusted EBITDA (non-GAAP) | ​ | $ | 88,889 | ​ | $ | 82,814 | ​ | $ | 6,075 | ​ | 7.3 | %
Adjusted EBITDA margin (non-GAAP) | ​ | ​ | 25.0 | % | ​ | 23.9 | % | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Home Office: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating loss (GAAP) | ​ | $ | (68,990) | ​ | $ | (62,044) | ​ | $ | (6,946) | ​ | (11.2) | %
Restructuring expense | ​ | ​ | 2,204 | ​ | ​ | 7,067 | ​ | ​ | (4,863) | ​ | ​ | ​
Business acquisition and integration expense | ​ | ​ | 34,215 | ​ | ​ | 42,661 | ​ | ​ | (8,446) | ​ | ​ | ​
Loss on assets held for sale | ​ | ​ | 647 | ​ | ​ | — | ​ | ​ | 647 | ​ | ​ | ​
Debt modification costs | ​ | ​ | 848 | ​ | ​ | — | ​ | ​ | 848 | ​ | ​ | ​
Gain on sale of assets | ​ | ​ | — | ​ | ​ | (13,317) | ​ | ​ | 13,317 | ​ | ​ | ​
Depreciation | ​ | ​ | 1,552 | ​ | ​ | 2,344 | ​ | ​ | (792) | ​ | ​ | ​
Stock-based compensation | ​ | ​ | 5,189 | ​ | ​ | 2,716 | ​ | ​ | 2,473 | ​ | ​ | ​
Adjusted EBITDA (non-GAAP) | ​ | $ | (24,335) | ​ | $ | (20,573) | ​ | $ | (3,762) | ​ | (18.3) | %
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adtalem Global Education: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (GAAP) | ​ | $ | 136,777 | ​ | $ | 93,358 | ​ | $ | 43,419 | ​ | 46.5 | %
Loss from discontinued operations | ​ | ​ | 936 | ​ | ​ | 8,394 | ​ | ​ | (7,458) | ​ | ​ | ​
Interest expense | ​ | ​ | 63,659 | ​ | ​ | 63,100 | ​ | ​ | 559 | ​ | ​ | ​
Other income, net | ​ | ​ | (10,542) | ​ | ​ | (6,965) | ​ | ​ | (3,577) | ​ | ​ | ​
Provision for income taxes | ​ | ​ | 26,224 | ​ | ​ | 10,283 | ​ | ​ | 15,941 | ​ | ​ | ​
Operating income (GAAP) | ​ | ​ | 217,054 | ​ | ​ | 168,170 | ​ | ​ | 48,884 | ​ | ​ | ​
Depreciation and amortization | ​ | ​ | 78,452 | ​ | ​ | 102,814 | ​ | ​ | (24,362) | ​ | ​ | ​
Stock-based compensation | ​ | ​ | 25,947 | ​ | ​ | 14,299 | ​ | ​ | 11,648 | ​ | ​ | ​
Restructuring expense | ​ | ​ | 1,870 | ​ | ​ | 18,817 | ​ | ​ | (16,947) | ​ | ​ | ​
Business acquisition and integration expense | ​ | ​ | 34,215 | ​ | ​ | 42,661 | ​ | ​ | (8,446) | ​ | ​ | ​
Litigation reserve | ​ | ​ | 18,500 | ​ | ​ | 10,000 | ​ | ​ | 8,500 | ​ | ​ | ​
Loss on assets held for sale | ​ | ​ | 647 | ​ | ​ | — | ​ | ​ | 647 | ​ | ​ | ​
Debt modification costs | ​ | ​ | 848 | ​ | ​ | — | ​ | ​ | 848 | ​ | ​ | ​
Gain on sale of assets | ​ | ​ | — | ​ | ​ | (13,317) | ​ | ​ | 13,317 | ​ | ​ | ​
Adjusted EBITDA (non-GAAP) | ​ | $ | 377,533 | ​ | $ | 343,444 | ​ | $ | 34,089 | ​ | 9.9 | %
Adjusted EBITDA margin (non-GAAP) | ​ | ​ | 23.8 | % | ​ | 23.7 | % | ​ | ​ | ​ | ​ | ​

​

​

​

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Adtalem is not dependent upon the price levels, nor affected by fluctuations in pricing, of any particular commodity or group of commodities.

The financial position and results of operations of AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. Substantially all of their financial transactions are denominated in the U.S. dollar.

The interest rate on Adtalem’s Term Loan B is based upon the Secured Overnight Financing Rate (“SOFR”) for eurocurrency rate loans. As of June 30, 2024, Adtalem had $253.3 million in outstanding borrowings under the Term Loan B with an interest rate of 8.84%. Based upon borrowings of $253.3 million, a 100 basis point increase in short-term interest rates would result in $2.5 million of additional annual interest expense.

Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

| Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) | 54
Consolidated Balance Sheets as of June 30, 2024 and 2023 | 57
Consolidated Statements of Income for the years ended June 30, 2024, 2023, and 2022 | 58
Consolidated Statements of Comprehensive Income for the years ended June 30, 2024, 2023, and 2022 | 59
Consolidated Statements of Cash Flows for the years ended June 30, 2024, 2023, and 2022 | 60
Consolidated Statements of Shareholders’ Equity for the years ended June 30, 2024, 2023, and 2022 | 61
Notes to Consolidated Financial Statements | 62

​

​

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Adtalem Global Education Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Adtalem Global Education Inc. and its subsidiaries (the “Company”) as of June 30, 2024 and 2023, and the related consolidated statements of income, of comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended June 30, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management

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and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment Assessments – American University of the Caribbean School of Medicine (“AUC”) Reporting Unit Goodwill and AUC Title IV Eligibility and Accreditations

As described in Notes 2 and 13 to the consolidated financial statements, as of June 30, 2024, the Company’s consolidated goodwill balance was $961 million and the Company’s consolidated indefinite-lived intangible assets balance was $753 million. The goodwill and Title IV eligibility and accreditations indefinite-lived intangible asset associated with the AUC reporting unit were $68 million and $100 million, respectively. Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Management performs a quantitative assessment of the reporting unit’s and indefinite-lived intangible asset’s fair value if it is determined that the fair value is more likely than not less than the carrying value, or if management does not elect the option to perform an initial qualitative assessment. Fair value is estimated by management using a discounted cash flow model and the market multiple valuation approach for the AUC reporting unit and a with and without method in a discounted cash flow model for the AUC Title IV eligibility and accreditations. The significant assumptions used by management when estimating the fair value for the AUC reporting unit and Title IV eligibility and accreditations are risk-adjusted discount rates, terminal growth rate, earnings multiples for comparable companies, forecasted revenue with and without the accreditations in place and forecasted earnings before interest, taxes, depreciation and amortization (“EBITDA”) with and without the accreditations in place.

The principal considerations for our determination that performing procedures relating to the impairment assessments of the AUC reporting unit goodwill and AUC Title IV eligibility and accreditations is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the AUC reporting unit and AUC Title IV eligibility and accreditation indefinite-lived intangible asset; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to (a) risk-adjusted discount rate, forecasted revenue, forecasted EBITDA, and earnings multiples for comparable companies for the goodwill impairment assessment and (b) risk-adjusted discount rate, forecasted revenue with and without the accreditations in place, and forecasted EBITDA with the accreditations in place for the Title IV eligibility and accreditations; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s AUC goodwill and AUC Title IV eligibility and accreditation impairment assessments, including controls over the valuation of the AUC reporting unit and Title IV eligibility and accreditations. These procedures also included, among others, (i) testing management’s process for developing the fair value estimates of the AUC reporting unit and AUC Title IV eligibility and accreditation indefinite-lived intangible asset; (ii) evaluating the appropriateness of the discounted cash flow model and the market multiple valuation approach for the AUC reporting unit and the with and without method in a discounted cash flow model for the AUC Title IV eligibility and accreditations; (iii) testing the completeness and accuracy of underlying data used in the valuation methods; and (iv) evaluating the reasonableness of the significant assumptions used by management related to risk-adjusted discount rates, forecasted revenue, forecasted

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EBITDA, earnings multiples for comparable companies, forecasted revenue with and without the accreditations in place, and forecasted EBITDA with the accreditations in place. Evaluating management’s assumptions related to forecasted revenue, forecasted EBITDA, forecasted revenue with and without the accreditations in place and forecasted EBITDA with the accreditations in place involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the AUC business; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s discounted cash flow model, the market multiple valuation approach, and the with and without method in a discounted cash flow model, and (ii) the reasonableness of the risk-adjusted discount rates and earnings multiples for comparable companies assumptions.

​

/s/ PricewaterhouseCoopers LLP

Chicago, Illinois

August 6, 2024

We have served as the Company’s auditor since 1991.

​

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Adtalem Global Education Inc.

Consolidated Balance Sheets

(in thousands, except par value)

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2024 | ​ | 2023
Assets: | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 219,306 | ​ | $ | 272,194
Restricted cash | ​ |  | 1,896 | ​ |  | 2,881
Accounts and financing receivables, net | ​ |  | 126,833 | ​ |  | 102,749
Prepaid expenses and other current assets | ​ |  | 70,050 | ​ |  | 102,473
Total current assets | ​ |  | 418,085 | ​ |  | 480,297
Noncurrent assets: | ​ |  | ​ | ​ |  | ​
Property and equipment, net | ​ | ​ | 248,524 | ​ | ​ | 244,649
Operating lease assets | ​ |  | 176,755 | ​ |  | 174,677
Deferred income taxes | ​ |  | 49,088 | ​ |  | 56,694
Intangible assets, net | ​ |  | 776,694 | ​ |  | 812,338
Goodwill | ​ |  | 961,262 | ​ |  | 961,262
Other assets, net | ​ | ​ | 103,184 | ​ | ​ | 80,624
Assets held for sale | ​ |  | 7,825 | ​ |  | —
Total noncurrent assets | ​ |  | 2,323,332 | ​ |  | 2,330,244
Total assets | ​ | $ | 2,741,417 | ​ | $ | 2,810,541
​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities and shareholders' equity: | ​ |  | ​ | ​ | ​ | ​
Current liabilities: | ​ |  | ​ | ​ | ​ | ​
Accounts payable | ​ | $ | 102,626 | ​ | $ | 81,812
Accrued payroll and benefits | ​ |  | 71,373 | ​ |  | 52,041
Accrued liabilities | ​ |  | 96,957 | ​ |  | 105,806
Deferred revenue | ​ |  | 185,272 | ​ |  | 153,871
Current operating lease liabilities | ​ |  | 31,429 | ​ |  | 37,673
Total current liabilities | ​ |  | 487,657 | ​ |  | 431,203
Noncurrent liabilities: | ​ |  | ​ | ​ |  | ​
Long-term debt | ​ |  | 648,712 | ​ |  | 695,077
Long-term operating lease liabilities | ​ |  | 167,712 | ​ |  | 163,441
Deferred income taxes | ​ |  | 29,526 | ​ |  | 26,068
Other liabilities | ​ |  | 38,675 | ​ |  | 37,416
Total noncurrent liabilities | ​ |  | 884,625 | ​ |  | 922,002
Total liabilities | ​ |  | 1,372,282 | ​ |  | 1,353,205
Commitments and contingencies | ​ |  | ​ | ​ |  | ​
Shareholders' equity: | ​ |  | ​ | ​ |  | ​
Common stock, $0.01 par value per share, 200,000 shares authorized; 37,681 and 42,310 shares outstanding as of June 30, 2024 and June 30, 2023, respectively | ​ |  | 832 | ​ |  | 822
Additional paid-in capital | ​ |  | 611,949 | ​ |  | 568,761
Retained earnings | ​ |  | 2,540,509 | ​ |  | 2,403,750
Accumulated other comprehensive loss | ​ |  | (2,227) | ​ |  | (2,227)
Treasury stock, at cost, 45,513 and 39,922 shares as of June 30, 2024 and June 30, 2023, respectively | ​ |  | (1,781,928) | ​ |  | (1,513,770)
Total shareholders' equity | ​ |  | 1,369,135 | ​ |  | 1,457,336
Total liabilities and shareholders' equity | ​ | $ | 2,741,417 | ​ | $ | 2,810,541

​

See accompanying Notes to Consolidated Financial Statements.

​

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Adtalem Global Education Inc.

Consolidated Statements of Income

(in thousands, except per share data)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Revenue | ​ | $ | 1,584,652 | ​ | $ | 1,450,826 | ​ | $ | 1,381,842
Operating cost and expense: | ​ |  | ​ | ​ |  | ​ | ​ | ​ | ​
Cost of educational services | ​ |  | 698,548 | ​ |  | 648,486 | ​ |  | 659,776
Student services and administrative expense | ​ |  | 632,965 | ​ |  | 586,009 | ​ |  | 566,494
Restructuring expense | ​ |  | 1,870 | ​ |  | 18,817 | ​ |  | 25,628
Business acquisition and integration expense | ​ |  | 34,215 | ​ |  | 42,661 | ​ |  | 53,198
Gain on sale of assets | ​ |  | — | ​ |  | (13,317) | ​ |  | —
Total operating cost and expense | ​ |  | 1,367,598 | ​ |  | 1,282,656 | ​ |  | 1,305,096
Operating income | ​ |  | 217,054 | ​ |  | 168,170 | ​ |  | 76,746
Interest expense | ​ |  | (63,659) | ​ |  | (63,100) | ​ |  | (129,348)
Other income, net | ​ |  | 10,542 | ​ |  | 6,965 | ​ |  | 1,108
Income (loss) from continuing operations before income taxes | ​ |  | 163,937 | ​ |  | 112,035 | ​ |  | (51,494)
(Provision for) benefit from income taxes | ​ |  | (26,224) | ​ |  | (10,283) | ​ |  | 15,539
Income (loss) from continuing operations | ​ |  | 137,713 | ​ |  | 101,752 | ​ |  | (35,955)
Discontinued operations: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
Loss from discontinued operations before income taxes | ​ |  | (762) | ​ |  | (8,464) | ​ |  | (986)
(Loss) gain on disposal of discontinued operations before income taxes | ​ | ​ | — | ​ | ​ | (3,576) | ​ | ​ | 473,483
(Provision for) benefit from income taxes | ​ |  | (174) | ​ |  | 3,646 | ​ |  | (125,551)
(Loss) income from discontinued operations | ​ |  | (936) | ​ |  | (8,394) | ​ |  | 346,946
Net income | ​ | $ | 136,777 | ​ | $ | 93,358 | ​ | $ | 310,991
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Earnings (loss) per share: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
Continuing operations | ​ | $ | 3.49 | ​ | $ | 2.27 | ​ | $ | (0.74)
Discontinued operations | ​ | $ | (0.02) | ​ | $ | (0.19) | ​ | $ | 7.17
Total basic earnings per share | ​ | $ | 3.47 | ​ | $ | 2.08 | ​ | $ | 6.43
Diluted: | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
Continuing operations | ​ | $ | 3.42 | ​ | $ | 2.23 | ​ | $ | (0.74)
Discontinued operations | ​ | $ | (0.02) | ​ | $ | (0.18) | ​ | $ | 7.17
Total diluted earnings per share | ​ | $ | 3.39 | ​ | $ | 2.05 | ​ | $ | 6.43
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average shares outstanding: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic shares | ​ | ​ | 39,413 | ​ | ​ | 44,781 | ​ | ​ | 48,388
Diluted shares | ​ | ​ | 40,307 | ​ | ​ | 45,600 | ​ | ​ | 48,388

​

See accompanying Notes to Consolidated Financial Statements.

​

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Adtalem Global Education Inc.

Consolidated Statements of Comprehensive Income

(in thousands)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Net income and comprehensive income before reclassification | ​ | $ | 136,777 | ​ | $ | 93,358 | ​ | $ | 310,991
Reclassification adjustment for realized loss on foreign currency translation adjustments | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 296
Reclassification adjustment for loss on interest rate swap | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,695
Comprehensive income | ​ | $ | 136,777 | ​ | $ | 93,358 | ​ | $ | 317,982

​

See accompanying Notes to Consolidated Financial Statements.

​

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Adtalem Global Education Inc.

Consolidated Statements of Cash Flows

(in thousands)

​

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income | ​ | $ | 136,777 | ​ | $ | 93,358 | ​ | $ | 310,991
Loss (income) from discontinued operations | ​ |  | 936 | ​ |  | 8,394 | ​ |  | (346,946)
Income (loss) from continuing operations | ​ | ​ | 137,713 | ​ | ​ | 101,752 | ​ | ​ | (35,955)
Adjustments to reconcile net income to net cash provided by operating activities: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Stock-based compensation | ​ |  | 25,947 | ​ |  | 14,299 | ​ |  | 22,611
Amortization and impairments to operating lease assets | ​ | ​ | 32,641 | ​ | ​ | 48,470 | ​ | ​ | 44,748
Depreciation | ​ |  | 39,676 | ​ |  | 41,376 | ​ |  | 44,574
Amortization of acquired intangible assets | ​ |  | 35,644 | ​ |  | 61,239 | ​ |  | 97,274
Amortization and write-off of debt discount and issuance costs | ​ | ​ | 5,663 | ​ | ​ | 9,129 | ​ | ​ | 42,654
Provision for bad debts | ​ | ​ | 53,175 | ​ | ​ | 32,999 | ​ | ​ | 27,141
Deferred income taxes | ​ |  | 11,073 | ​ |  | (5,087) | ​ |  | (544)
Loss on disposals, accelerated depreciation, and impairments to property and equipment | ​ |  | 466 | ​ |  | 3,999 | ​ |  | 3,501
Gain on extinguishment of debt | ​ |  | — | ​ |  | (71) | ​ |  | (2,072)
(Gain) loss on investments | ​ | ​ | (1,365) | ​ | ​ | 3,689 | ​ | ​ | 3,271
Gain on sale of assets | ​ | ​ | — | ​ | ​ | (13,317) | ​ | ​ | —
Unrealized loss on assets held for sale | ​ | ​ | 647 | ​ | ​ | — | ​ | ​ | —
Changes in assets and liabilities: | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Accounts and financing receivables | ​ |  | (76,355) | ​ |  | (56,309) | ​ |  | (41,391)
Prepaid expenses and other current assets | ​ |  | (8,781) | ​ |  | 9,324 | ​ |  | (2,827)
Cloud computing implementation assets | ​ | ​ | (27,154) | ​ | ​ | (13,873) | ​ | ​ | —
Accounts payable | ​ |  | 18,330 | ​ |  | 24,744 | ​ |  | (15,724)
Accrued payroll and benefits | ​ | ​ | 19,422 | ​ | ​ | (15,683) | ​ | ​ | (12,118)
Accrued liabilities | ​ |  | 27,422 | ​ |  | 241 | ​ |  | (16,305)
Deferred revenue | ​ |  | 40,622 | ​ |  | 5,807 | ​ |  | 70,355
Operating lease liabilities | ​ | ​ | (36,692) | ​ | ​ | (59,188) | ​ | ​ | (49,147)
Other assets and liabilities | ​ |  | (9,727) | ​ |  | 1,150 | ​ |  | (16,044)
Net cash provided by operating activities-continuing operations | ​ |  | 288,367 | ​ |  | 194,690 | ​ |  | 164,002
Net cash provided by (used in) operating activities-discontinued operations | ​ |  | 7,408 | ​ |  | (2,776) | ​ |  | (153,401)
Net cash provided by operating activities | ​ |  | 295,775 | ​ |  | 191,914 | ​ |  | 10,601
Investing activities: | ​ |  | ​ | ​ | ​ | ​ | ​ |  | ​
Capital expenditures | ​ |  | (48,893) | ​ |  | (26,014) | ​ |  | (31,054)
Proceeds from sales of marketable securities | ​ | ​ | 1,732 | ​ | ​ | 7,635 | ​ | ​ | 3,447
Purchases of marketable securities | ​ |  | (689) | ​ |  | (1,508) | ​ |  | (3,624)
Proceeds from note receivable related to property sold | ​ |  | — | ​ |  | 46,800 | ​ |  | —
Payment for purchase of business, net of cash and restricted cash acquired | ​ |  | — | ​ |  | — | ​ |  | (1,488,054)
Cash received on DeVry University loan | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 10,000
Net cash (used in) provided by investing activities-continuing operations | ​ |  | (47,850) | ​ |  | 26,913 | ​ |  | (1,509,285)
Net cash used in investing activities-discontinued operations | ​ |  | — | ​ |  | — | ​ |  | (3,287)
Proceeds from sale of business, net of cash transferred | ​ |  | — | ​ |  | — | ​ |  | 960,768
Payment for working capital adjustment for sale of business | ​ |  | — | ​ |  | (3,174) | ​ |  | —
Net cash (used in) provided by investing activities | ​ |  | (47,850) | ​ |  | 23,739 | ​ |  | (551,804)
Financing activities: | ​ |  | ​ | ​ | ​ | ​ | ​ |  | ​
Proceeds from exercise of stock options | ​ |  | 17,089 | ​ |  | 2,625 | ​ |  | 8,879
Employee taxes paid on withholding shares | ​ |  | (7,731) | ​ |  | (4,592) | ​ |  | (2,834)
Proceeds from stock issued under Colleague Stock Purchase Plan | ​ |  | 810 | ​ |  | 608 | ​ |  | 535
Repurchases of common stock for treasury | ​ |  | (261,966) | ​ |  | (123,133) | ​ |  | (120,000)
Payment on equity forward contract | ​ | ​ | — | ​ | ​ | (13,162) | ​ | ​ | (30,000)
Proceeds from issuance of long-term debt | ​ |  | 1,896 | ​ |  | — | ​ |  | 850,000
Repayments of long-term debt | ​ |  | (51,896) | ​ |  | (150,861) | ​ |  | (1,079,713)
Payment of debt discount and issuance costs | ​ |  | — | ​ |  | — | ​ |  | (49,553)
Payment for purchase of redeemable noncontrolling interest of subsidiary | ​ |  | — | ​ |  | — | ​ |  | (1,790)
Net cash used in financing activities | ​ |  | (301,798) | ​ |  | (288,515) | ​ |  | (424,476)
Net decrease in cash, cash equivalents and restricted cash | ​ |  | (53,873) | ​ |  | (72,862) | ​ |  | (965,679)
Cash, cash equivalents and restricted cash at beginning of period | ​ |  | 275,075 | ​ |  | 347,937 | ​ |  | 1,313,616
Cash, cash equivalents and restricted cash at end of period | ​ | $ | 221,202 | ​ | $ | 275,075 | ​ | $ | 347,937
Supplemental cash flow disclosure: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest paid | ​ | $ | 57,842 | ​ | $ | 53,126 | ​ | $ | 107,093
Income taxes paid, net | ​ | $ | 31,475 | ​ | $ | 12,312 | ​ | $ | 94,355
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | $ | 8,718 | ​ | $ | 5,125 | ​ | $ | 4,321
Accrued liability for repurchases of common stock | ​ | $ | — | ​ | $ | 2,995 | ​ | $ | —
Accrued excise tax on share repurchases | ​ | $ | 3,338 | ​ | $ | 1,126 | ​ | $ | —
Settlement of financing liability with assets | ​ | $ | — | ​ | $ | 38,606 | ​ | $ | —

​

​

See accompanying Notes to Consolidated Financial Statements.

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Adtalem Global Education Inc.

Consolidated Statements of Shareholders’ Equity

(in thousands)

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Accumulated | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | Additional | ​ | ​ | ​ | ​ | Other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Common Stock | ​ | Paid-In | ​ | Retained | ​ | Comprehensive | ​ | Treasury Stock | ​ | ​ | ​
​ | ​ | Shares | ​ | Amount | ​ | Capital | ​ | Earnings | ​ | Loss | ​ | Shares | ​ | Amount | ​ | Total
June 30, 2021 | ​ | 81,099 | ​ | $ | 811 | ​ | $ | 519,826 | ​ | $ | 1,999,405 | ​ | $ | (9,218) | ​ | 31,846 | ​ | $ | (1,217,307) | ​ | $ | 1,293,517
Net income | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | 310,991 |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | 310,991
Reclassification adjustment for realized gain on foreign currency translation adjustments | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 296 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 296
Reclassification adjustment for loss on interest rate swap |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 6,695 | ​ | ​ |  | ​ | ​ |  | ​ | 6,695
Stock-based compensation |  | ​ |  | ​ | ​ |  | ​ | 23,247 |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | 23,247
Net activity from stock-based compensation awards |  | 697 |  | ​ | 7 |  | ​ | 8,872 |  | ​ | ​ |  | ​ | ​ |  | 82 |  | ​ | (2,834) |  | ​ | 6,045
Proceeds from stock issued under Colleague Stock Purchase Plan |  | ​ |  | ​ | ​ |  | ​ | (97) |  | ​ | ​ |  | ​ | ​ |  | (19) |  | ​ | 692 |  | ​ | 595
Repurchases of common stock for treasury |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | 4,710 |  | ​ | (120,000) |  | ​ | (120,000)
Equity forward contract |  | ​ |  | ​ | ​ |  | ​ | (30,000) |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | (30,000)
June 30, 2022 |  | 81,796 |  | ​ | 818 |  | ​ | 521,848 |  | ​ | 2,310,396 |  | ​ | (2,227) |  | 36,619 |  | ​ | (1,339,449) |  | ​ | 1,491,386
Net income |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | 93,358 |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | 93,358
Stock-based compensation |  | ​ |  | ​ | ​ |  | ​ | 14,299 |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | 14,299
Net activity from stock-based compensation awards |  | 436 |  | ​ | 4 |  | ​ | 2,621 |  | ​ | ​ |  | ​ | ​ |  | 115 |  | ​ | (4,592) |  | ​ | (1,967)
Proceeds from stock issued under Colleague Stock Purchase Plan |  | ​ |  | ​ | ​ |  | ​ | (7) |  | ​ | (4) |  | ​ | ​ |  | (19) |  | ​ | 687 |  | ​ | 676
Settlement of equity forward contract |  | ​ |  | ​ | ​ |  | ​ | 30,000 |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | (43,162) |  | ​ | (13,162)
Repurchases of common stock for treasury |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | 3,207 |  | ​ | (127,254) |  | ​ | (127,254)
June 30, 2023 |  | 82,232 |  | ​ | 822 |  | ​ | 568,761 |  | ​ | 2,403,750 |  | ​ | (2,227) |  | 39,922 |  | ​ | (1,513,770) |  | ​ | 1,457,336
Net income |  | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | 136,777 |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | 136,777
Stock-based compensation |  | ​ |  | ​ | ​ |  | ​ | 25,947 |  | ​ | ​ |  | ​ | ​ |  | ​ |  | ​ | ​ |  | ​ | 25,947
Net activity from stock-based compensation awards |  | 962 | ​ | ​ | 10 | ​ | ​ | 17,078 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 165 | ​ | ​ | (7,731) |  | ​ | 9,357
Proceeds from stock issued under Colleague Stock Purchase Plan |  | ​ |  | ​ | ​ |  | ​ | 163 | ​ | ​ | (18) | ​ | ​ | ​ | ​ | (20) | ​ | ​ | 756 |  | ​ | 901
Repurchases of common stock for treasury |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | 5,446 | ​ | ​ | (261,183) |  | ​ | (261,183)
June 30, 2024 | ​ | 83,194 | ​ | $ | 832 | ​ | $ | 611,949 | ​ | $ | 2,540,509 | ​ | $ | (2,227) | ​ | 45,513 | ​ | $ | (1,781,928) | ​ | $ | 1,369,135

​

See accompanying Notes to Consolidated Financial Statements.

​

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Adtalem Global Education Inc.

Notes to Consolidated Financial Statements

Table of Contents

​ | ​ | ​
Note | ​ | Page
1 | Nature of Operations | 63
2 | Summary of Significant Accounting Policies | 63
3 | Acquisitions | 68
4 | Discontinued Operations | 70
5 | Revenue | 71
6 | Restructuring Expense | 73
7 | Other Income, Net | 74
8 | Income Taxes | 74
9 | Earnings per Share | 77
10 | Accounts and Financing Receivables | 78
11 | Property and Equipment, Net | 80
12 | Leases | 81
13 | Goodwill and Intangible Assets | 83
14 | Debt | 85
15 | Redeemable Noncontrolling Interest | 90
16 | Share Repurchases | 90
17 | Accumulated Other Comprehensive Loss | 91
18 | Stock-Based Compensation | 91
19 | Employee Benefit Plans | 93
20 | Fair Value Measurements | 94
21 | Commitments and Contingencies | 95
22 | Segment Information | 97
23 | Revision of Previously Issued Consolidated Financial Statements (Unaudited) | 99

​

​

​

​

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1. Nature of Operations

In this Annual Report on Form 10-K, Adtalem Global Education Inc., together with its subsidiaries, is collectively referred to as “Adtalem,” “we,” “our,” “us,” or similar references.

Adtalem is a leading healthcare educator in the U.S. Our schools consist of Chamberlain University (“Chamberlain”), Walden University (“Walden”), American University of the Caribbean School of Medicine (“AUC”), Ross University School of Medicine (“RUSM”), and Ross University School of Veterinary Medicine (“RUSVM”). AUC, RUSM, and RUSVM are collectively referred to as the “medical and veterinary schools.” See Note 22 “Segment Information” for information on our reportable segments.

Beginning in the second quarter of fiscal year 2022, Adtalem eliminated its Financial Services segment when the Association of Certified Anti-Money Laundering Specialists (“ACAMS”), Becker Professional Education (“Becker”), OnCourse Learning (“OCL”), and EduPristine were classified as discontinued operations. In accordance with U.S. generally accepted accounting principles (“GAAP”), we have classified the ACAMS, Becker, OCL, and EduPristine entities as “Discontinued Operations” in all periods presented as applicable. As a result, all financial results, disclosures, and discussions of continuing operations in this Annual Report on Form 10-K exclude ACAMS, Becker, OCL, and EduPristine operations, unless otherwise noted. On March 10, 2022, we completed the sale of ACAMS, Becker, and OCL and on June 17, 2022, we completed the sale of EduPristine. In addition, we continue to incur costs associated with ongoing litigation and settlements related to the DeVry University divestiture, which was completed during fiscal year 2019, and are classified as expense within discontinued operations. See Note 4 “Discontinued Operations” for additional information.

2. Summary of Significant Accounting Policies

For each accounting topic that is addressed in its own note, the description of the accounting policy may be found in the related note. Other significant accounting policies are described below.

Principles of Consolidation

The Consolidated Financial Statements include the accounts of Adtalem and its subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. We have prepared the Consolidated Financial Statements in accordance with GAAP. Unless otherwise noted, amounts presented within the Notes to Consolidated Financial Statements refer to our continuing operations. Unless indicated, or the context requires otherwise, references to years refer to Adtalem’s fiscal years. Certain items presented in tables may not sum due to rounding. Prior periods amounts have been revised to conform with the current period presentation.

Business acquisition and integration expense was $34.2 million, $42.7 million, and $53.2 million in fiscal year 2024, 2023, and 2022, respectively. These are transaction costs associated with acquiring Walden and costs associated with integrating Walden into Adtalem. In addition, during fiscal year 2023, we initiated transformation initiatives to accelerate growth and organizational agility. Certain costs relating to this transformation are included in business acquisition and integration expense in the Consolidated Statements of Income.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less. The carrying value of cash and cash equivalents approximate fair value. We maintain cash and cash equivalent balances that exceed federally insured limits. We have not experienced any losses on our cash and cash equivalents.

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Restricted Cash

Restricted cash represents amounts received from federal and state governments under various student aid grant and loan programs and such restricted funds are held in separate bank accounts. Once the financial aid authorization and disbursement process for the student has been completed, the funds are transferred to unrestricted accounts, and these funds then become available for use in Adtalem’s operations. This authorization and disbursement process that precedes the transfer of funds generally occurs within the period of the academic term for which such funds were authorized.

Restricted cash also includes an imprest cash balance used for Adtalem’s self-insured employee medical benefits program.

Property and Equipment

Property and equipment is recorded at cost less accumulated depreciation. Cost includes additions and those improvements that enhance performance, increase the capacity, or lengthen the useful lives of the assets. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing computer software applications for internal use, are capitalized. Assets under construction are reflected in construction in progress until they are placed into service for their intended use. Depreciation is recognized on a straight-line basis over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the asset or lease term. Repairs and maintenance costs are expensed as incurred. Upon sale or retirement of an asset, the accounts are relieved of the cost and the related accumulated depreciation, with any resulting gain or loss included in income. See Note 11 “Property and Equipment, Net” for additional information, including useful lives by asset category.

Goodwill and Intangible Assets

Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. Our annual testing date is May 31.

We have the option to assess goodwill for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that the reporting unit fair value is more likely than not less than its carrying value, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the reporting unit’s fair value. If the carrying value of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of goodwill. We also have the option to perform a qualitative assessment to test indefinite-lived intangible assets for impairment by determining whether it is more likely than not that the indefinite-lived intangible assets are impaired. If it is determined that the indefinite-lived intangible asset is more likely than not impaired, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the indefinite-lived intangible assets. If the carrying value of the indefinite-lived intangible assets exceeds its fair value, an impairment loss is recognized to the extent the carrying value exceeds fair value.

For intangible assets with finite lives, we evaluate for potential impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Intangible assets with finite lives are amortized over their expected economic lives, ranging from three to five years.

All intangible assets and certain goodwill are being amortized for tax reporting purposes over statutory lives.

Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates, which could lead to future

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impairments of goodwill or intangible assets. See Note 13 “Goodwill and Intangible Assets” for additional information on our goodwill and intangible assets impairment analysis.

Capitalized Curriculum Development

Certain costs incurred to create course and educational material for a program offering are capitalized as curriculum development assets within other assets, net on the Consolidated Balance Sheets. Costs are capitalized for new programs or products, or the content being developed enhances, updates, or improves current programs, curriculum, or products, so long as the cost incurred extends the useful life of the existing curriculum and course content. Costs that are capitalized include payroll and payroll-related costs for employees who spend time producing content and external vendor costs related to the project. Adtalem begins capitalizing costs during the content development phase, which includes time to develop course materials based on the requirements defined in the planning phase. Curriculum development assets are amortized on a straight-line basis over the estimated useful life, which is generally three to five years, and amortization is included within cost of education services in the Consolidated Statements of Income.

Cloud Computing Arrangements

For cloud computing arrangements that are a service contract, we capitalize certain implementation costs incurred, including external costs and certain internal costs (including payroll and payroll-related costs of employees), during the development stage of implementing the cloud computing hosting arrangement. Capitalized costs related to cloud computing arrangements are included within prepaid expenses and other current assets and other assets, net on the Consolidated Balance Sheets. We expense costs as incurred during the preliminary planning and post-implementation stages. Capitalized implementation costs are amortized on a straight-line basis over the contractual term of the cloud computing arrangement, which includes renewal options that are reasonably certain to be exercised, which is generally five years.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying value is no longer recoverable based upon the undiscounted future cash flows of the asset or asset group, the amount of the impairment is the difference between the carrying amount and the fair value of the asset or asset group. Events that may trigger an impairment analysis could include a decision by management to exit a market or a line of business or to consolidate operating locations.

Treasury Stock

Shares that are repurchased by Adtalem under its share repurchase programs are recorded as treasury stock at cost and result in a reduction in shareholders’ equity. See Note 16 “Share Repurchases” for additional information.

From time to time, shares of our common stock are delivered back to Adtalem under a swap arrangement resulting from employees’ exercise of stock options pursuant to the terms of the Adtalem’s stock-based incentive plans (see Note 18 “Stock-Based Compensation”). In addition, shares of our common stock are delivered back to Adtalem for payment of withholding taxes from employees for vesting of stock-based compensation awards. These shares are recorded as treasury stock at cost and result in a reduction in shareholders’ equity.

Treasury shares are reissued at market value, less a 10% discount, to the Adtalem Colleague Stock Purchase Plan in exchange for employee payroll deductions. The 10% discount is considered compensatory and recorded as an expense in the Consolidated Statements of Income. When treasury shares are reissued, Adtalem uses an average cost method to reduce the treasury stock balance. Gains on the difference between the average cost and the reissuance price, less the amount recorded as expense, are credited to additional paid-in capital. Losses on the difference are charged to additional paid-in capital to the extent that previous net gains from reissuance are included therein, otherwise such losses are charged to retained earnings.

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Earnings per Share

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS is computed by dividing net income by diluted weighted-average number of shares outstanding during the period. Diluted EPS considers the impact of potentially dilutive shares, except in periods in which there is a loss from continuing operations, because the inclusion of the potential common shares would have an antidilutive effect. Dilutive shares are computed using the treasury stock method and reflect the additional shares that would be outstanding if dilutive stock-based grants were exercised or vested during the period.

Income Taxes

Adtalem accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Adtalem also recognizes future tax benefits associated with tax loss and credit carryforwards as deferred tax assets. Adtalem’s deferred tax assets are reduced by a valuation allowance, when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Adtalem measures deferred tax assets and liabilities using enacted tax rates in effect for the year in which Adtalem expects to recover or settle the temporary differences. The effect of a change in tax rates on deferred taxes is recognized in the period that the change is enacted. Adtalem reduces its net tax assets for the estimated additional tax and interest that may result from tax authorities disputing uncertain tax positions Adtalem has taken.

Restructuring Charges

Restructuring charges include costs for severance and related benefits for workforce reductions, impairments on operating lease assets, losses on disposals of property and equipment related to campus and administrative office consolidations, and contract termination costs (see Note 6 “Restructuring Expense”). When estimating the costs of exiting lease space, estimates are made which could differ materially from actual results and result in additional restructuring charges or reversals in future periods.

Advertising Costs

Advertising costs are expensed when incurred and totaled $227.9 million, $219.4 million, and $190.7 million for the years ended June 30, 2024, 2023, and 2022, respectively. Advertising costs are included in student services and administrative expense in the Consolidated Statements of Income.

Foreign Currency Translation

The financial position and results of operations of the AUC, RUSM, and RUSVM Caribbean operations are measured using the U.S. dollar as the functional currency. As such, there is no translation gain or loss associated with these operations. EduPristine’s operations and Becker’s and ACAMS’s international operations were measured using the local currency as the functional currency. Assets and liabilities of these entities are translated to U.S. dollars using exchange rates in effect at the balance sheet dates. Income and expense items are translated at monthly average exchange rates. The resulting translation adjustments are recorded as foreign currency translation adjustments in the Consolidated Statements of Comprehensive Income. Translation adjustments for foreign subsidiaries whose functional currencies were previously their respective currencies are suspended in accumulated other comprehensive loss on the Consolidated Balance Sheets. Transaction gains or losses during each of the fiscal years presented were not material.

Recent Accounting Standards

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2022-02: “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The guidance was issued as improvements to Accounting Standards Codification (“ASC”) 326. The vintage disclosure changes are relevant to Adtalem and require an entity to disclose current-period gross write-offs by year of origination for financing receivables. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The amendments should be applied prospectively. We adopted this

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guidance on July 1, 2023. The amendments impacted our disclosures and did not otherwise impact Adtalem’s Consolidated Financial Statements.

In November 2023, the FASB issued ASU No. 2023-07: “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The guidance was issued to improve disclosures about reportable segments and addresses requests from investors for additional, more detailed information about a reportable segment’s expenses by requiring entities to provide disclosures of significant segment expenses and other segment items. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments should be applied retrospectively. Early adoption of the amendments is permitted, including adoption in an interim period. The amendments will impact our segment disclosures but will not otherwise impact Adtalem’s Consolidated Financial Statements.

In December 2023, the FASB issued ASU No. 2023-09: “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The guidance was issued to enhance the transparency and decision usefulness of income tax disclosures by requiring entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2024. The amendments should be applied prospectively and retrospective application is permitted. Early adoption of the amendments is permitted. The amendments will impact our income tax disclosures but will not otherwise impact Adtalem’s Consolidated Financial Statements.

We reviewed all other recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a significant impact on our Consolidated Financial Statements.

Revision to Previously Issued Financial Statements

During the fourth quarter of fiscal year 2024, Adtalem identified an error in the presentation of capitalized cloud computing implementation costs in its previously issued financial statements. In accordance with Accounting Standards Codification (“ASC”) 350-40 “Intangibles, Goodwill and Other, Internal-Use Software,” capitalized cloud computing implementation costs should be presented in the same line item in the Consolidated Balance Sheets as a prepayment of the fees for the associated hosting arrangement, and the cash flows from capitalized implementation costs should be presented in the same manner as cash flows for the fees associated with the hosting arrangement. Adtalem previously presented capitalized cloud implementation costs in property and equipment, net rather than as prepaid expenses and other current assets and other assets, net on the Consolidated Balance Sheets. Adtalem previously presented the cash flows from capitalized implementation costs as capital expenditures within investing activities rather than within cash flows from operating activities in the Consolidated Statements of Cash Flows. Adtalem assessed the materiality of this error individually and in the aggregate with other previously identified errors to prior periods’ Consolidated Financial Statements in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99 “Materiality” and SAB 108 “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” codified in ASC 250 “Accounting Changes and Error Corrections.” Adtalem concluded that the errors were not material to prior periods and therefore, amendments of previously filed reports are not required. However, Adtalem determined it was appropriate to revise its previously issued financial statements. In accordance with ASC 250, Adtalem corrected prior periods presented herein by revising the financial statement line item amounts previously disclosed in SEC filings in order to achieve comparability in the Consolidated Financial Statements. The Consolidated Balance Sheets as of June 30, 2023 and the Consolidated Statements of Cash Flows for the year ended June 30, 2023 have been revised in this Annual Report on Form 10-K, and the impact of this revision of Adtalem’s previously reported annual Consolidated Financial Statements are detailed below. In connection with this revision, Adtalem also corrected other immaterial errors in the prior periods, including certain errors that had previously been adjusted for in the period identified. We have also revised impacted amounts within the accompanying Notes to Consolidated Financial Statements.

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The following table summarizes the effect of the revision on the affected line items within the Consolidated Balance Sheets (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 273,689 | ​ | $ | (1,495) | ​ | $ | 272,194
Restricted cash | ​ | ​ | 1,386 | ​ | ​ | 1,495 | ​ | ​ | 2,881
Prepaid expenses and other current assets | ​ | ​ | 100,715 | ​ | ​ | 1,758 | ​ | ​ | 102,473
Total current assets | ​ | ​ | 478,539 | ​ | ​ | 1,758 | ​ | ​ | 480,297
Noncurrent assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 258,522 | ​ | ​ | (13,873) | ​ | ​ | 244,649
Other assets, net | ​ | ​ | 68,509 | ​ | ​ | 12,115 | ​ | ​ | 80,624
Total noncurrent assets | ​ | ​ | 2,332,002 | ​ | ​ | (1,758) | ​ | ​ | 2,330,244

The following table summarizes the effect of the revision on the affected line items within the Consolidated Statements of Cash Flows (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to reconcile net income to net cash provided by operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation | ​ | $ | 41,575 | ​ | $ | (199) | ​ | $ | 41,376
Changes in assets and liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cloud computing implementation assets | ​ | ​ | — | ​ | ​ | (13,873) | ​ | ​ | (13,873)
Accounts payable | ​ | ​ | 21,666 | ​ | ​ | 3,078 | ​ | ​ | 24,744
Net cash provided by operating activities-continuing operations | ​ | ​ | 205,684 | ​ | ​ | (10,994) | ​ | ​ | 194,690
Net cash provided by operating activities | ​ | ​ | 202,908 | ​ | ​ | (10,994) | ​ | ​ | 191,914
Investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | ​ | (37,008) | ​ | ​ | 10,994 | ​ | ​ | (26,014)
Net cash provided by investing activities-continuing operations | ​ | ​ | 15,919 | ​ | ​ | 10,994 | ​ | ​ | 26,913
Net cash provided by investing activities | ​ | ​ | 12,745 | ​ | ​ | 10,994 | ​ | ​ | 23,739
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | ​ | 8,203 | ​ | ​ | (3,078) | ​ | ​ | 5,125

​

​

3. Acquisitions

Walden University

On August 12, 2021, Adtalem completed the acquisition of 100% of the equity interest of Walden for $1,488.1 million, net of cash and restricted cash of $83.4 million. Adtalem funded the purchase with the $800.0 million in Notes (as defined in Note 14 “Debt”), the $850.0 million Term Loan B (as defined in Note 14 “Debt”), and available cash on hand. Walden offers more than 100 online certificate, bachelor’s, master’s, and doctoral degrees. The acquisition furthers Adtalem’s growth strategy as a leading healthcare educator in the U.S.

The operations of Walden are included in Adtalem’s Walden reportable segment (see Note 22 “Segment Information”). The results of Walden’s operations have been included in the Consolidated Financial Statements of Adtalem since the date of acquisition. For fiscal year 2022, this included revenue of $485.4 million and net loss of $3.9 million from the operations of Walden. In addition, we incurred acquisition-related costs of $22.3 million in fiscal year 2022, which were included in business acquisition and integration expense in the Consolidated Statements of Income.

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The following table summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):

​

​ | ​ | ​ | ​
​ | ​ | August 12,
​ | ​ | 2021
Assets acquired: | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 65,010
Restricted cash | ​ | ​ | 18,389
Accounts and financing receivables | ​ | ​ | 22,091
Prepaid expenses and other current assets | ​ | ​ | 8,819
Property and equipment | ​ |  | 25,882
Operating lease assets | ​ | ​ | 6,096
Deferred income taxes | ​ | ​ | 59
Intangible assets | ​ |  | 833,351
Goodwill | ​ |  | 651,052
Other assets, net | ​ |  | 21,316
Total assets acquired | ​ |  | 1,652,065
Liabilities assumed: | ​ |  | ​
Accounts payable | ​ |  | 31,971
Accrued payroll and benefits | ​ |  | 25,639
Accrued liabilities | ​ |  | 1,620
Deferred revenue | ​ | ​ | 10,958
Current operating lease liabilities | ​ | ​ | 1,983
Long-term operating lease liabilities | ​ | ​ | 4,343
Other liabilities | ​ | ​ | 4,098
Total liabilities assumed | ​ |  | 80,612
Net assets acquired | ​ | $ | 1,571,453

​

The fair value of the assets acquired includes accounts receivable of $22.1 million. The gross amount due under contracts is $37.9 million, of which $15.8 million was expected to be uncollectible.

Goodwill, which represents the excess of the purchase price over the fair value of the net assets acquired, was all assigned to the Walden reporting unit and reportable segment. The entire goodwill amount is tax deductible. Factors that contributed to a purchase price resulting in the recognition of goodwill includes Walden’s strategic fit into Adtalem’s healthcare educator strategy, the reputation of the Walden brand as a leader in online education industry, and potential future growth opportunity. Of the $833.4 million of acquired intangible assets, $495.8 million was assigned to Title IV eligibility and accreditations and $119.6 million was assigned to trade names, each of which has been determined not to be subject to amortization. The values and estimated useful lives of other intangible assets acquired were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​
​ | ​ | August 12, 2021
​ | ​ | Value | ​ | Estimated
​ | ​ | Assigned | ​ | Useful Life
Student relationships | ​ | $ | 161,900 | ​ | 3 years
Curriculum |  | $ | 56,091 |  | 5 years

​

The Title IV eligibility and accreditations intangible asset was valued using the with and without method of the income approach. The student relationships intangible asset was valued using the multi-period excess earnings method. The trade name intangible asset was valued using the relief-from-royalty method. The curriculum intangible asset was valued using the cost to replace method. Significant judgments and assumptions were used in these valuations. We applied judgment which involved the use of significant assumptions with respect to the discount rate and recovery period for the Title IV eligibility and accreditations intangible asset and royalty rate and discount rate for the trade name intangible asset. We also applied judgment which involved the use of assumptions, including the discount rate and EBITDA margin for the student relationships intangible asset and labor rates and hours and obsolescence rate for the curriculum intangible asset.

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The following unaudited pro forma financial information summarizes our results of operations as though the acquisition occurred on July 1, 2020 (in thousands):

​

​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2022
Revenue | ​ | $ | 1,451,081
Net income | ​ | $ | 385,110

​

The unaudited pro forma financial information includes adjustments to reflect the additional amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied from July 1, 2020, with the consequential tax effects. The unaudited pro forma financial information also includes adjustments to reflect the additional interest expense on the debt we issued to fund the acquisition (see Note 14 “Debt” for additional information). As the ticking fees are representative of the historical interest expense incurred by Adtalem on the Term Loan B from the period of February 12, 2021 to August 12, 2021 and the unaudited pro forma financial information for fiscal year 2021 has been adjusted to include interest expense assuming the Term Loan B had been entered into as of July 1, 2020, we have made a further adjustment to remove the ticking fees recognized in the unaudited pro forma financial information for fiscal year 2022 (see Note 14 “Debt” for additional information on ticking fees). Had the Term Loan B been drawn upon on July 1, 2020, none of the ticking fees would have been incurred and, accordingly, the inclusion of such amounts would be duplicative to the interest expense incurred by Adtalem on a pro forma basis. The acquisition transaction costs we incurred in connection with the Walden acquisition are reflected in the unaudited pro forma financial information results for fiscal year 2021.

This unaudited pro forma financial information is for informational purposes only. It does not reflect the integration of the business or any synergies that may result from the acquisition. As such, it is not indicative of the results of operations that would have been achieved had the acquisition been consummated on July 1, 2020. In addition, the unaudited pro forma financial information amounts are not indicative of future operating results.

4. Discontinued Operations

On December 11, 2018, Adtalem completed the sale of DeVry University to Cogswell Education, LLC (“Cogswell”) for de minimis consideration. As the sale represented a strategic shift that had a major effect on Adtalem’s operations and financial results, DeVry University is presented in Adtalem’s Consolidated Financial Statements as a discontinued operation. The purchase agreement includes an earn-out entitling Adtalem to payments of up to $20.0 million over a ten-year period payable based on DeVry University’s financial results. Adtalem received $5.5 million, $4.1 million, and $2.9 million during fiscal year 2024, 2023, and 2022, respectively, related to the earn-out. We have received a total of $12.5 million related to the earn-out thus far. In connection with the closing of the sale, Adtalem loaned to DeVry University $10.0 million under the terms of the promissory note, dated as of December 11, 2018 (the “DeVry Note”). The DeVry Note bore interest at a rate of 4% per annum, payable annually in arrears, and had a maturity date of January 1, 2022. We received the loan repayment of $10.0 million during the third quarter of fiscal year 2022.

On March 10, 2022, Adtalem completed the sale of ACAMS, Becker, and OCL to Wendel Group and Colibri Group (“Purchaser”), pursuant to the Equity Purchase Agreement (“Purchase Agreement”) dated January 24, 2022. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, Adtalem sold the issued and outstanding shares of ACAMS, Becker, and OCL to the Purchaser for $962.7 million, net of cash of $21.5 million, subject to certain post-closing adjustments. In addition, on June 17, 2022, Adtalem completed the sale of EduPristine for de minimis consideration, which resulted in a transfer of $1.9 million in cash. We recorded a loss of $3.6 million in fiscal year 2023 for post-closing working capital adjustments to the initial sales prices for ACAMS, Becker, and OCL and a tax return to provision adjustment, which is included in (loss) gain on disposal of discontinued operations before income taxes in the Consolidated Statements of Income. These divestitures are the culmination of a long-term strategy to sharpen the focus of our portfolio and enhance our ability to address the growing and unmet demand for healthcare professionals in the U.S. As these sales represented a strategic shift that had a major effect on Adtalem’s operations and financial results, these businesses previously included in our former Financial Services segment are presented in Adtalem’s Consolidated Financial Statements as discontinued operations.

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The following is a summary of income statement information reported as discontinued operations, which includes expense from ongoing litigation costs and settlements related to the DeVry University and Carrington College divestitures, ACAMS, Becker, OCL, and EduPristine operations through the date of each respective sale, the gain on disposal of these entities, a loss from post-closing working capital adjustments to the initial sales prices and a tax return to provision adjustment, and the earn-outs we received (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Revenue | ​ | $ | — | ​ | $ | — | ​ | $ | 153,762
Operating cost and expense: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cost of educational services | ​ |  | — | ​ |  | — | ​ |  | 26,996
Student services and administrative expense | ​ |  | 762 | ​ |  | 8,464 | ​ |  | 126,252
Restructuring expense | ​ |  | — | ​ |  | — | ​ |  | 1,500
Total operating cost and expense | ​ |  | 762 | ​ |  | 8,464 | ​ |  | 154,748
Loss from discontinued operations before income taxes | ​ |  | (762) | ​ |  | (8,464) | ​ |  | (986)
(Loss) gain on disposal of discontinued operations before income taxes | ​ | ​ | — | ​ | ​ | (3,576) | ​ | ​ | 473,483
(Provision for) benefit from income taxes | ​ |  | (174) | ​ |  | 3,646 | ​ |  | (125,551)
(Loss) income from discontinued operations | ​ | $ | (936) | ​ | $ | (8,394) | ​ | $ | 346,946

​

​

5. Revenue

Revenue is recognized when control of the promised goods or services is transferred to our customers (students), in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The following tables disaggregate revenue by source (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2024
​ | ​ | Chamberlain | ​ | Walden |  | Medical and Veterinary | ​ | Consolidated
Tuition and fees |  | $ | 633,522 |  | $ | 595,332 |  | $ | 342,389 |  | $ | 1,571,243
Other | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 13,409 | ​ | ​ | 13,409
Total |  | $ | 633,522 |  | $ | 595,332 |  | $ | 355,798 |  | $ | 1,584,652

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2023
​ | ​ | Chamberlain | ​ | Walden |  | Medical and Veterinary | ​ | Consolidated
Tuition and fees | ​ | $ | 571,034 |  | $ | 533,725 |  | $ | 334,323 |  | $ | 1,439,082
Other | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 11,744 | ​ | ​ | 11,744
Total |  | $ | 571,034 |  | $ | 533,725 |  | $ | 346,067 |  | $ | 1,450,826

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2022
​ | ​ | Chamberlain | ​ | Walden |  | Medical and Veterinary | ​ | Consolidated
Tuition and fees | ​ | $ | 557,536 |  | $ | 485,393 |  | $ | 328,382 |  | $ | 1,371,311
Other | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 10,531 | ​ | ​ | 10,531
Total |  | $ | 557,536 |  | $ | 485,393 |  | $ | 338,913 |  | $ | 1,381,842

​

In addition, see Note 22 “Segment Information” for a disaggregation of revenue by geographical region.

Performance Obligations and Revenue Recognition

Tuition and fees: The majority of revenue is derived from tuition and fees, which is recognized on a straight-line basis over the academic term as instruction is delivered.

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Other: Other revenue consists of housing and other miscellaneous services. Other revenue is recognized over the period in which the applicable performance obligation is satisfied.

Arrangements for payment are agreed to prior to registration of the student’s first academic term. The majority of U.S. students obtain Title IV or other financial aid resulting in institutions receiving a significant amount of the transaction price at the beginning of the academic term. Students not utilizing Title IV or other financial aid funding may pay after the academic term is complete.

Transaction Price

Revenue, or transaction price, is measured as the amount of consideration expected to be received in exchange for transferring goods or services.

Students may receive discounts, scholarships, or refunds, which gives rise to variable consideration. The amounts of discounts or scholarships are generally applied to individual student accounts when such amounts are awarded. Therefore, the transaction price is immediately reduced directly by these discounts or scholarships from the amount of the standard tuition rate charged. Scholarships and discounts that are only applied to future tuition charged are considered a separate performance obligation if they represent a material right in accordance with ASC 606. In those instances, we defer the value of the related performance obligation associated with the future scholarship or discount based on estimates of future redemption based on our historical experience of student persistence toward completion of study. The contract liability associated with these material rights is presented as deferred revenue within current liabilities and other liabilities within noncurrent liabilities on the Consolidated Balance Sheets based on the amounts expected to be redeemed in the next 12 months. The contract liability amount associated with these material rights within current liabilities is $24.1 million and $10.6 million as of June 30, 2024 and 2023, respectively, and the amount within noncurrent liabilities is $19.6 million and $10.4 million as of June 30, 2024 and 2023, respectively. The noncurrent contract liability associated with these material rights is expected to be earned over approximately the next four fiscal years.

Upon withdrawal, a student may be eligible to receive a refund, or partial refund, the amount of which is dependent on the timing of the withdrawal during the academic term. If a student withdraws prior to completing an academic term, federal and state regulations and accreditation criteria permit Adtalem to retain a set percentage of the total tuition received from such student, which varies with, but generally equals or exceeds, the percentage of the academic term completed by such student. Payment amounts received by Adtalem in excess of such set percentages of tuition are refunded to the student or the appropriate funding source. For contracts with similar characteristics and historical data on refunds, the expected value method is applied in determining the variable consideration related to refunds. Estimates of Adtalem’s expected refunds are determined at the outset of each academic term, based upon actual refunds in previous academic terms. Reserves related to refunds are presented as refund liabilities within accrued liabilities on the Consolidated Balance Sheets. All refunds are netted against revenue during the applicable academic term.

Management reassesses collectability on a student-by-student basis throughout the period revenue is recognized. This reassessment is based upon new information and changes in facts and circumstances relevant to a student’s ability to pay. Management also reassesses collectability when a student withdraws from the institution and has unpaid tuition charges. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue on a cash basis.

Contract Balances

Students are billed at the beginning of each academic term and payment is due at that time. Adtalem’s performance obligation is to provide educational services in the form of instruction during the academic term and to provide for any scholarships or discounts that are deemed a material right under ASC 606. As instruction is provided or the deferred value of material rights are redeemed, deferred revenue is reduced. A significant portion of student payments are from Title IV financial aid and other programs and are generally received during the first month of the respective academic term. For students utilizing Adtalem’s credit extension programs (see Note 10 “Accounts and Financing Receivables”), payments are generally received after the academic term, and the corresponding performance obligation, is complete. When payments are received, accounts and financing receivables is reduced.

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Deferred revenue within current liabilities is $185.3 million and $153.9 million as of June 30, 2024 and 2023, respectively, and deferred revenue within noncurrent liabilities is $19.6 million and $10.4 million as of June 30, 2024 and 2023, respectively. Revenue of $153.9 million and $149.8 million was recognized during fiscal year 2024 and 2023, respectively, that was included in the deferred revenue balance at the beginning of fiscal year 2024 and 2023, respectively.

The difference between the opening and closing balances of deferred revenue includes decreases from revenue recognized during the period, increases from charges related to the start of academic terms beginning during the period, increases from payments received related to academic terms commencing after the end of the period, and increases from recognizing additional performance obligations for material rights during the period.

6. Restructuring Expense

During fiscal year 2024, Adtalem recorded restructuring expense primarily driven by prior real estate consolidations at Adtalem’s home office. We continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities. During fiscal year 2023, Adtalem recorded restructuring expense primarily driven by real estate consolidations at Walden, Medical and Veterinary, and Adtalem’s home office resulting in impairments on operating lease assets and property and equipment. During fiscal year 2022, Adtalem recorded restructuring expense primarily driven by workforce reductions and contract terminations related to synergy actions with regards to the Walden acquisition and Medical and Veterinary and Adtalem’s home office real estate consolidations. When estimating costs of exiting lease space, estimates are made which could differ materially from actual results and may result in additional restructuring charges or reversals in future periods. Termination benefit charges represent severance pay and benefits for employees impacted by workforce reductions. Adtalem’s home office is classified as “Home Office” in Note 22 “Segment Information.” Restructuring expense by segment were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2024
​ | ​ | Real Estate and Other | ​ | Termination Benefits | ​ | Total
Walden | ​ | $ | (776) |  | $ | — |  | $ | (776)
Medical and Veterinary | ​ | ​ | 402 |  | ​ | 40 |  | ​ | 442
Home Office | ​ | ​ | 2,204 |  | ​ | — |  | ​ | 2,204
Total | ​ | $ | 1,830 | ​ | $ | 40 | ​ | $ | 1,870

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2023
​ | ​ | Real Estate and Other | ​ | Termination Benefits | ​ | Total
Chamberlain | ​ | $ | 818 |  | $ | — |  | $ | 818
Walden | ​ | ​ | 3,191 |  | ​ | 54 |  | ​ | 3,245
Medical and Veterinary | ​ | ​ | 7,071 |  | ​ | 616 |  | ​ | 7,687
Home Office | ​ | ​ | 6,117 |  | ​ | 950 |  | ​ | 7,067
Total | ​ | $ | 17,197 | ​ | $ | 1,620 | ​ | $ | 18,817

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, 2022
​ | ​ | Real Estate and Other | ​ | Termination Benefits | ​ | Total
Chamberlain | ​ | $ | 835 |  | $ | 2,003 |  | $ | 2,838
Walden | ​ | ​ | — |  | ​ | 4,053 |  | ​ | 4,053
Medical and Veterinary | ​ | ​ | 7,675 |  | ​ | 2,116 |  | ​ | 9,791
Home Office | ​ | ​ | 5,977 |  | ​ | 2,969 |  | ​ | 8,946
Total | ​ | $ | 14,487 | ​ | $ | 11,141 | ​ | $ | 25,628

​

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The following table summarizes the separation and restructuring plan activity for fiscal years 2023 and 2024, for which cash payments are required (in thousands):

​

​ | ​ | ​ | ​
Liability balance as of June 30, 2022 | ​ | $ | 813
Increase in liability (separation and other charges) | ​ |  | 1,620
Reduction in liability (payments and adjustments) | ​ |  | (1,692)
Liability balance as of June 30, 2023 | ​ |  | 741
Increase in liability (separation and other charges) | ​ |  | 40
Reduction in liability (payments and adjustments) | ​ |  | (781)
Liability balance as of June 30, 2024 | ​ | $ | —

​

These liability balances are recorded as accrued liabilities on the Consolidated Balance Sheets.

7. Other Income, Net

Other income, net consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Interest and dividend income | ​ | $ | 9,177 | ​ | $ | 10,654 | ​ | $ | 4,379
Investment gain (loss) | ​ |  | 1,365 | ​ |  | (3,689) | ​ |  | (3,271)
Other income, net | ​ | $ | 10,542 | ​ | $ | 6,965 | ​ | $ | 1,108

​

Investment gain (loss) includes trading gains and losses related to the rabbi trust used to fund nonqualified deferred compensation plan obligations (see Note 19 “Employee Benefit Plans” for additional information). In addition, investment gain (loss) includes an impairment of $5.0 million in fiscal year 2023 on an equity investment with no readily determinable fair value (see Note 20 “Fair Value Measurements” for additional information).

8. Income Taxes

Income from continuing operations before income taxes, classified by source of income, was as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Domestic | ​ | $ | 89,752 | ​ | $ | 51,422 | ​ | $ | (112,151)
Foreign | ​ |  | 74,185 | ​ |  | 60,613 | ​ |  | 60,657
Total | ​ | $ | 163,937 | ​ | $ | 112,035 | ​ | $ | (51,494)

​

The components of the provision for (benefit from) income taxes were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ |  | 2024 | ​ | 2023 | ​ | 2022
Current tax provision (benefit): |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. federal | ​ | $ | 11,243 | ​ | $ | 13,761 | ​ | $ | (6,767)
State and local | ​ |  | 3,489 | ​ |  | 824 | ​ |  | 4,154
Foreign | ​ |  | 419 | ​ |  | 614 | ​ |  | 725
Total current | ​ |  | 15,151 | ​ |  | 15,199 | ​ |  | (1,888)
Deferred tax provision (benefit): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. federal | ​ |  | 4,870 | ​ |  | (1,099) | ​ |  | (6,425)
State and local | ​ |  | 2,745 | ​ |  | (4,347) | ​ |  | (6,597)
Foreign | ​ |  | 3,458 | ​ |  | 530 | ​ |  | (629)
Total deferred | ​ |  | 11,073 | ​ |  | (4,916) | ​ |  | (13,651)
Provision for (benefit from) income taxes | ​ | $ | 26,224 | ​ | $ | 10,283 | ​ | $ | (15,539)

​

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The effective tax rate differs from the statutory tax rates as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30, |
​ | ​ | 2024 | ​ | ​ | 2023 | ​ | ​ | 2022 |
Income tax at statutory rate | ​ | $ | 34,427 | ​ | 21.0 | % | ​ | $ | 23,527 | ​ | 21.0 | % | ​ | $ | (10,814) | ​ | 21.0 | %
Lower rates on foreign operations | ​ |  | (11,419) |  | (7.0) | % | ​ |  | (11,668) |  | (10.4) | % | ​ |  | (12,879) |  | 25.0 | %
State income taxes | ​ |  | 4,557 |  | 2.8 | % | ​ |  | 2,719 |  | 2.4 | % | ​ |  | (661) |  | 1.3 | %
Loss on investment in subsidiary | ​ |  | — |  | — | % | ​ |  | — |  | — | % | ​ |  | (1,669) |  | 3.2 | %
Deferred tax benefit from acquisitions and divestitures | ​ |  | — |  | — | % | ​ |  | — |  | — | % | ​ |  | (1,153) |  | 2.2 | %
Research and development tax credits | ​ | ​ | (1,589) | ​ | (1.0) | % | ​ | ​ | (1,862) | ​ | (1.7) | % | ​ | ​ | — |  | — | %
Change in valuation allowance | ​ | ​ | (621) | ​ | (0.4) | % | ​ | ​ | (9,769) | ​ | (8.7) | % | ​ | ​ | 5,406 |  | (10.5) | %
Reduction in state loss carryforwards | ​ | ​ | — | ​ | — | % | ​ | ​ | 2,340 | ​ | 2.1 | % | ​ | ​ | (5,882) |  | 11.4 | %
Permanent non-deductible items | ​ |  | 2,293 |  | 1.4 | % | ​ |  | 1,630 |  | 1.5 | % | ​ |  | 2,788 |  | (5.4) | %
Foreign tax provisions under GILTI | ​ | ​ | 4,908 | ​ | 3.0 | % | ​ |  | 3,569 | ​ | 3.2 | % | ​ |  | 8,581 | ​ | (16.7) | %
Change in unrecognized tax benefits | ​ | ​ | (6,849) | ​ | (4.2) | % | ​ |  | 791 | ​ | 0.7 | % | ​ |  | 56 | ​ | (0.1) | %
Other | ​ |  | 517 |  | 0.3 | % | ​ |  | (994) |  | (0.9) | % | ​ |  | 688 |  | (1.3) | %
Provision for (benefit from) income taxes | ​ | $ | 26,224 |  | 16.0 | % | ​ | $ | 10,283 |  | 9.2 | % | ​ | $ | (15,539) |  | 30.2 | %

​

Deferred income tax assets and liabilities result primarily from temporary differences in the recognition of various expenses for tax and financial statement purposes, and from the recognition of the tax benefits of net operating loss carryforwards. The components of the deferred income tax assets and liabilities were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2024 | ​ | 2023
Employee benefits | ​ | $ | 15,866 | ​ | $ | 11,719
Stock-based compensation | ​ |  | 7,664 | ​ |  | 7,310
Receivable reserve | ​ |  | 9,028 | ​ |  | 6,246
Capitalized research and experimental costs | ​ |  | 9,322 | ​ |  | 8,075
Operating lease liabilities | ​ | ​ | 42,526 | ​ | ​ | 41,235
Other reserves | ​ |  | 12,439 | ​ |  | 6,246
Loss and credit carryforwards, net | ​ |  | 15,426 | ​ |  | 19,259
Less: valuation allowance | ​ |  | — | ​ |  | (621)
Gross deferred tax assets | ​ |  | 112,271 | ​ |  | 99,469
Depreciation | ​ |  | (8,298) | ​ |  | (5,643)
Deferred taxes on unremitted foreign earnings | ​ | ​ | (210) | ​ | ​ | (428)
Amortization of intangible assets | ​ |  | (50,035) | ​ |  | (31,294)
Operating lease assets | ​ | ​ | (34,166) | ​ | ​ | (31,478)
Gross deferred tax liability | ​ |  | (92,709) | ​ |  | (68,843)
Net deferred tax asset | ​ | $ | 19,562 | ​ | $ | 30,626

​

As of June 30, 2024, Adtalem had $164.4 million of gross, post apportioned state net operating loss carryforwards, and $13.0 million of gross foreign net operating loss carryforwards in St. Maarten. As of June 30, 2023, Adtalem had $190.8 million of gross, post apportioned state net operating loss carryforwards, and $17.3 million of foreign net operating loss carryforwards in St. Maarten and other jurisdictions.

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Adtalem has the following tax net operating loss (tax effected), interest (tax effected), and credit carryforwards as of June 30, 2024 (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, | ​ | Years of Expiration
​ | ​ | 2024 | ​ | Beginning | ​ | Ending
U.S. interest expense carryforwards | ​ | $ | 506 |  | no expiration
U.S. credit carryforwards | ​ | ​ | 672 | ​ | 2027 | ​ | 2030
State net operating loss carryforwards | ​ |  | 9,053 |  | 2025 |  | 2043
State interest expense carryforwards | ​ | ​ | 592 | ​ | no expiration
State credit carryforwards | ​ | ​ | 130 | ​ | no expiration
Foreign net operating loss carryforwards | ​ |  | 4,473 |  | 2030 |  | 2033
Total loss and credit carryforwards, net | ​ | $ | 15,426 |  | ​ | ​ | ​

​

Two of Adtalem’s businesses benefit from local tax incentives: RUSM, which operates in Barbados and RUSVM, which operates in St. Kitts. RUSM and RUSVM each have agreements with their respective domestic governments that exempt them from local income taxation. RUSM has an exemption in Barbados until 2039. RUSVM has an exemption in St. Kitts until 2037.

Adtalem does not assert that the accumulated undistributed earnings of its foreign subsidiaries are indefinitely reinvested in foreign jurisdictions. Adtalem has accrued immaterial applicable state income and foreign withholding taxes on such undistributed earnings.

Adtalem reviews the realizability of its deferred tax assets and related valuation allowances on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset are considered, along with any other positive or negative evidence. A valuation allowance is established when, based on the weight of available evidence, it is more likely than not that all or a portion of a deferred tax asset will not be realized. Based on our review of all available positive and negative evidence, it is more likely than not that we will recognize all deferred tax assets and, therefore, we do not have a valuation allowance on our deferred tax assets as of June 30, 2024. The valuation allowance on our deferred tax assets was $0.6 million as of June 30, 2023 and mainly related to foreign net operating loss carryforwards. The valuation allowance decreased by $0.6 million in fiscal year 2024 compared to fiscal year 2023 and decreased by $9.8 million in fiscal year 2023 compared to fiscal year 2022. Insufficient projected taxable income in certain jurisdictions may give rise to the need for a valuation allowance. We will continue to evaluate the need for valuation allowances and, as circumstances change, the valuation allowance may change. The changes in our valuation allowances were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Balance at beginning of period | ​ | $ | 621 | ​ | $ | 10,390 | ​ | $ | 4,985
Charged to costs and expenses | ​ |  | — | ​ |  | (2,677) | ​ |  | 5,522
Deductions | ​ |  | (621) | ​ |  | (7,092) | ​ |  | (117)
Balance at end of period | ​ | $ | — | ​ | $ | 621 | ​ | $ | 10,390

​

Our effective tax rates from continuing operations were 16.0%, 9.2%, and 30.2% in fiscal year 2024, 2023, and 2022, respectively. In fiscal year 2024, our effective tax rate increase was primarily due to an increase in the percentage of earnings from operations in higher taxed jurisdictions and a limitation of tax benefits on certain executive compensation. The rate increase was partially offset due to the lapsing of statues of limitations for unrecognized tax benefits in fiscal year 2024. In addition, in fiscal year 2023, we released a valuation allowance on certain deferred tax assets based on our reassessment of the amount of state net operating loss carryforwards that are more likely than not to be realized. The income tax expenses in fiscal years 2024 and 2023 and the income tax benefit in fiscal year 2022 reflect the U.S. federal tax rate of 21% adjusted for taxes related to global intangible low-taxed income (“GILTI”), limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, liabilities for uncertain tax positions, and tax benefits on stock-based compensation.

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As of June 30, 2024 and 2023, the total amount of gross unrecognized tax benefits for uncertain tax positions was $6.7 million and $13.1 million, respectively, which if recognized, would impact the effective tax rate. We expect that our unrecognized tax benefits will decrease during the next 12 months due to the settlement of various audits and the lapsing of statutes of limitation. We estimate this decrease to be immaterial. Adtalem classifies interest and penalties on tax uncertainties as a component of the provision for income taxes. The total amount of interest and penalties accrued as of June 30, 2024 and 2023 was $1.2 million and $1.6 million, respectively. Interest and penalties expense recognized during the years ended June 30, 2024, 2023, and 2022 were a net decrease of $0.4 million, a net increase of $0.7 million, and a net increase of $0.3 million, respectively. The changes in our unrecognized tax benefits were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Balance at beginning of period | ​ | $ | 13,128 | ​ | $ | 11,645 | ​ | $ | 9,836
Increases from positions taken during prior periods | ​ |  | 953 | ​ |  | 1,299 | ​ |  | 1,074
Decreases from positions taken during prior periods | ​ |  | (1,248) | ​ |  | — | ​ |  | (1,737)
Increases from positions taken during the current period | ​ |  | 554 | ​ |  | 665 | ​ |  | 2,845
Reductions due to lapse of statute | ​ |  | (6,664) | ​ |  | (481) | ​ |  | (373)
Balance at end of period | ​ | $ | 6,723 | ​ | $ | 13,128 | ​ | $ | 11,645

​

Adtalem files tax returns in the U.S. federal jurisdiction and in various state and foreign jurisdictions based on existing tax laws and incentives. Adtalem remains generally subject to examination in the U.S. for years beginning on or after July 1, 2020; in various states for years beginning on or after July 1, 2019; and in our significant foreign jurisdictions for years beginning on or after July 1, 2017.

9. Earnings per Share

The following table sets forth the computations of basic and diluted earnings per share and antidilutive shares (in thousands, except per share data):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Numerator: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net income (loss): | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Continuing operations | ​ | $ | 137,713 | ​ | $ | 101,752 | ​ | $ | (35,955)
Discontinued operations | ​ | ​ | (936) | ​ | ​ | (8,394) | ​ | ​ | 346,946
Net income | ​ | $ | 136,777 | ​ | $ | 93,358 | ​ | $ | 310,991
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Denominator: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average basic shares outstanding | ​ | ​ | 39,413 |  | ​ | 44,781 |  | ​ | 48,388
Effect of dilutive stock awards | ​ | ​ | 894 |  | ​ | 743 |  | ​ | —
Effect of ASR | ​ | ​ | — |  | ​ | 76 |  | ​ | —
Weighted-average diluted shares outstanding | ​ | ​ | 40,307 |  | ​ | 45,600 |  | ​ | 48,388
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Earnings (loss) per share: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Basic: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Continuing operations | ​ | $ | 3.49 | ​ | $ | 2.27 | ​ | $ | (0.74)
Discontinued operations | ​ | $ | (0.02) | ​ | $ | (0.19) | ​ | $ | 7.17
Total basic earnings per share | ​ | $ | 3.47 | ​ | $ | 2.08 | ​ | $ | 6.43
Diluted: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Continuing operations | ​ | $ | 3.42 | ​ | $ | 2.23 | ​ | $ | (0.74)
Discontinued operations | ​ | $ | (0.02) | ​ | $ | (0.18) | ​ | $ | 7.17
Total diluted earnings per share | ​ | $ | 3.39 | ​ | $ | 2.05 | ​ | $ | 6.43
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Weighted-average antidilutive shares | ​ | ​ | 115 | ​ | ​ | 403 | ​ | ​ | 1,869

​

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As a result of incurring a net loss from continuing operations in fiscal year 2022, potential common stock of 416 thousand shares were excluded from diluted loss per share because the effect would have been antidilutive. As further described in Note 16 “Share Repurchases,” on March 14, 2022, we entered into an accelerated share repurchase (“ASR”) agreement to repurchase $150.0 million of common stock. For purposes of calculating earnings per share, Adtalem reflected the ASR agreement as a repurchase of Adtalem common stock and as a forward contract indexed to its own common stock. Based on the volume-weighted average price of Adtalem’s common stock per the terms of the ASR agreement, common stock of 76 thousand shares were contingently issuable by Adtalem under the ASR agreement and were included in the diluted earnings per share calculation for fiscal year 2023 because the effect would have been dilutive. As of October 14, 2022, the ASR agreement is no longer outstanding. Diluted earnings per share was computed using the treasury stock method for stock awards. Certain shares related to stock awards were excluded from the computation of earnings per share because the effect would have been antidilutive.

10. Accounts and Financing Receivables

Our accounts receivables relate to student balances occurring in the normal course of business. Accounts receivables have a term of less than one year and are included in accounts and financing receivables, net on our Consolidated Balance Sheets. Our financing receivables relate to credit extension programs where the student is provided payment terms in excess of one year with their respective school and are included in accounts and financing receivables, net and other assets, net on our Consolidated Balance Sheets.

The classification of our accounts and financing receivable balances was as follows (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2024
​ | ​ | ​ | Gross | ​ | ​ | Allowance | ​ | ​ | Net
Accounts receivables, current | ​ | $ | 159,406 | ​ | $ | (35,336) | ​ | $ | 124,070
Financing receivables, current | ​ | ​ | 5,239 | ​ | ​ | (2,476) | ​ | ​ | 2,763
Accounts and financing receivables, current | ​ | $ | 164,645 | ​ | $ | (37,812) | ​ | $ | 126,833
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financing receivables, current | ​ | $ | 5,239 | ​ | $ | (2,476) | ​ | $ | 2,763
Financing receivables, noncurrent | ​ | ​ | 36,214 | ​ | ​ | (10,082) | ​ | ​ | 26,132
Total financing receivables | ​ | $ | 41,453 | ​ | $ | (12,558) | ​ | $ | 28,895

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2023
​ | ​ | ​ | Gross | ​ | ​ | Allowance | ​ | ​ | Net
Accounts receivables, current | ​ | $ | 129,318 | ​ | $ | (29,190) | ​ | $ | 100,128
Financing receivables, current | ​ | ​ | 4,757 | ​ | ​ | (2,136) | ​ | ​ | 2,621
Accounts and financing receivables, current | ​ | $ | 134,075 | ​ | $ | (31,326) | ​ | $ | 102,749
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Financing receivables, current | ​ | $ | 4,757 | ​ | $ | (2,136) | ​ | $ | 2,621
Financing receivables, noncurrent | ​ | ​ | 36,368 | ​ | ​ | (9,332) | ​ | ​ | 27,036
Total financing receivables | ​ | $ | 41,125 | ​ | $ | (11,468) | ​ | $ | 29,657

​

Our financing receivables relate to credit extension programs available to students at Chamberlain, AUC, RUSM, and RUSVM. These credit extension programs are designed to assist students who are unable to completely cover educational costs consisting of tuition, fees, and books, and are available only after all other student financial assistance has been applied toward those purposes. In addition, AUC, RUSM, and RUSVM allow students to finance their living expenses. Repayment plans for financing agreements are developed to address the financial circumstances of the particular student. Interest charges at rates from 3.0% to 12.0% per annum accrue each month on the unpaid balance once a student withdraws or graduates from a program. Most students are required to begin repaying their loans while they are still in school with a minimum payment level designed to demonstrate their capability to repay, which reduces the possibility of over borrowing. Payments may increase upon completing or departing school. After a student leaves school, the student typically will have a monthly installment repayment plan.

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Credit Quality

The primary credit quality indicator for our financing receivables is delinquency. Balances are considered delinquent when contractual payments on the loan become past due. We write-off financing receivable balances when they are at least 181 days past due. Payments are applied first to outstanding interest and then to the unpaid principal balance.

The credit quality analysis of financing receivables as of June 30, 2024 was as follows (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized Cost Basis by Origination Year | ​ | ​ | ​
​ | ​ | Prior | ​ | 2020 | ​ | 2021 | ​ | 2022 | ​ | 2023 | ​ | 2024 | ​ | Total
1-30 days past due |  | $ | 552 | ​ | $ | — |  | $ | 214 |  | $ | 111 |  | $ | 1,188 |  | $ | 1,146 |  | $ | 3,211
31-60 days past due | ​ | ​ | 213 | ​ | ​ | 90 | ​ | ​ | 65 | ​ | ​ | 37 | ​ | ​ | 567 | ​ | ​ | 1,488 | ​ | ​ | 2,460
61-90 days past due | ​ | ​ | 174 | ​ | ​ | — | ​ | ​ | 5 | ​ | ​ | 110 | ​ | ​ | 370 | ​ | ​ | 257 | ​ | ​ | 916
91-120 days past due | ​ | ​ | — | ​ | ​ | 11 | ​ | ​ | 434 | ​ | ​ | 20 | ​ | ​ | 206 | ​ | ​ | 791 | ​ | ​ | 1,462
121-150 days past due | ​ | ​ | 51 | ​ | ​ | 88 | ​ | ​ | 63 | ​ | ​ | 314 | ​ | ​ | 268 | ​ | ​ | 91 | ​ | ​ | 875
Greater than 150 days past due | ​ | ​ | 2,556 | ​ | ​ | 466 | ​ | ​ | 1,366 | ​ | ​ | 1,300 | ​ | ​ | 1,920 | ​ | ​ | 987 | ​ | ​ | 8,595
Total past due | ​ | ​ | 3,546 | ​ | ​ | 655 | ​ | ​ | 2,147 | ​ | ​ | 1,892 | ​ | ​ | 4,519 | ​ | ​ | 4,760 | ​ | ​ | 17,519
Current | ​ | ​ | 6,014 | ​ | ​ | 748 | ​ | ​ | 3,944 | ​ | ​ | 1,897 | ​ | ​ | 4,549 | ​ | ​ | 6,782 | ​ | ​ | 23,934
Financing receivables, gross | ​ | $ | 9,560 | ​ | $ | 1,403 | ​ | $ | 6,091 | ​ | $ | 3,789 | ​ | $ | 9,068 | ​ | $ | 11,542 | ​ | $ | 41,453
Gross write-offs | ​ | $ | 1,145 | ​ | $ | 279 | ​ | $ | 509 | ​ | $ | 597 | ​ | $ | 729 | ​ | $ | 2 | ​ | $ | 3,261

The credit quality analysis of financing receivables as of June 30, 2023 was as follows (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amortized Cost Basis by Origination Year | ​ | ​ | ​
​ | ​ | Prior | ​ | 2019 | ​ | 2020 | ​ | 2021 | ​ | 2022 | ​ | 2023 | ​ | Total
1-30 days past due |  | $ | 186 | ​ | $ | 79 |  | $ | 115 |  | $ | 137 |  | $ | 735 |  | $ | 1,944 |  | $ | 3,196
31-60 days past due | ​ | ​ | 61 | ​ | ​ | 34 | ​ | ​ | — | ​ | ​ | 359 | ​ | ​ | 573 | ​ | ​ | 1,103 | ​ | ​ | 2,130
61-90 days past due | ​ | ​ | 97 | ​ | ​ | 39 | ​ | ​ | 110 | ​ | ​ | 65 | ​ | ​ | 559 | ​ | ​ | 368 | ​ | ​ | 1,238
91-120 days past due | ​ | ​ | 2 | ​ | ​ | 17 | ​ | ​ | 2 | ​ | ​ | 13 | ​ | ​ | 77 | ​ | ​ | 200 | ​ | ​ | 311
121-150 days past due | ​ | ​ | 62 | ​ | ​ | 37 | ​ | ​ | 26 | ​ | ​ | 45 | ​ | ​ | 147 | ​ | ​ | 129 | ​ | ​ | 446
Greater than 150 days past due | ​ | ​ | 2,641 | ​ | ​ | 734 | ​ | ​ | 708 | ​ | ​ | 2,071 | ​ | ​ | 1,457 | ​ | ​ | 381 | ​ | ​ | 7,992
Total past due | ​ | ​ | 3,049 | ​ | ​ | 940 | ​ | ​ | 961 | ​ | ​ | 2,690 | ​ | ​ | 3,548 | ​ | ​ | 4,125 | ​ | ​ | 15,313
Current | ​ | ​ | 6,199 | ​ | ​ | 1,112 | ​ | ​ | 820 | ​ | ​ | 5,350 | ​ | ​ | 2,608 | ​ | ​ | 9,723 | ​ | ​ | 25,812
Financing receivables, gross | ​ | $ | 9,248 | ​ | $ | 2,052 | ​ | $ | 1,781 | ​ | $ | 8,040 | ​ | $ | 6,156 | ​ | $ | 13,848 | ​ | $ | 41,125

​

Allowance for Credit Losses

The allowance for credit losses represents an estimate of the lifetime expected credit losses inherent in our accounts and financing receivable balances as of each balance sheet date. In evaluating the collectability of our accounts and financing receivable balances, we utilize historical events, current conditions, and reasonable and supportable forecasts about the future.

For our accounts receivables, we primarily use historical loss rates based on an aging schedule and a student’s status to determine the allowance for credit losses. As these accounts receivables are short-term in nature, management believes a student’s status provides the best credit loss estimate, while also factoring in delinquency. Students still attending classes, recently graduated, or current on payments are more likely to pay than those who are inactive due to being on a leave of absence, withdrawing from school, or not current on payments.

For our financing receivables, we primarily use historical loss rates based on an aging schedule. As these financing receivables are based on long-term financing agreements offered by Adtalem, management believes that delinquency provides the best credit loss estimate. As the financing receivable balances become further past due, it is less likely we will receive payment, causing our estimate of credit losses to increase.

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The following tables provide a roll-forward of the allowance for credit losses (in thousands):

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Accounts | ​ | Financing | ​ | Total
June 30, 2021 |  | $ | 11,559 | ​ | $ | 16,832 |  | $ | 28,391
Write-offs | ​ | ​ | (15,980) | ​ | ​ | (5,287) | ​ | ​ | (21,267)
Recoveries | ​ | ​ | 11,488 | ​ | ​ | 35 | ​ | ​ | 11,523
Provision for credit losses | ​ | ​ | 23,830 | ​ | ​ | 3,311 | ​ | ​ | 27,141
June 30, 2022 | ​ | ​ | 30,897 | ​ | ​ | 14,891 | ​ | ​ | 45,788
Write-offs | ​ | ​ | (43,273) | ​ | ​ | (7,653) | ​ | ​ | (50,926)
Recoveries | ​ | ​ | 12,207 | ​ | ​ | 590 | ​ | ​ | 12,797
Provision for credit losses | ​ | ​ | 29,359 | ​ | ​ | 3,640 | ​ | ​ | 32,999
June 30, 2023 | ​ | ​ | 29,190 | ​ | ​ | 11,468 | ​ | ​ | 40,658
Write-offs | ​ | ​ | (54,897) | ​ | ​ | (3,261) | ​ | ​ | (58,158)
Recoveries | ​ | ​ | 10,806 | ​ | ​ | 1,413 | ​ | ​ | 12,219
Provision for credit losses | ​ | ​ | 50,237 | ​ | ​ | 2,938 | ​ | ​ | 53,175
June 30, 2024 | ​ | $ | 35,336 | ​ | $ | 12,558 | ​ | $ | 47,894

​

Other Financing Receivables

In connection with the sale of DeVry University, Adtalem loaned $10.0 million to DeVry University under the terms of the DeVry Note. The DeVry Note bore interest at a rate of 4% per annum, payable annually in arrears, and had a maturity date of January 1, 2022. We received the loan payment of $10.0 million during the third quarter of fiscal year 2022.

On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep Foundation (“DePaul College Prep”). In connection with the sale, Adtalem held a mortgage from DePaul College Prep for $46.8 million. The mortgage was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. The carrying value of the DePaul College Prep loan receivable was included in other assets, net on the Consolidated Balance Sheets and was determined by discounting the future cash flows using an average of current rates for similar arrangements, which was estimated at 7% per annum. On February 23, 2023, DePaul College Prep paid the mortgage in full, which resulted in derecognition of the note receivable from the Consolidated Balance Sheets.

11. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | June 30,
​ | ​ | Useful Life | ​ | 2024 | ​ | 2023
Land |  | - |  | $ | 31,776 | ​ | $ | 35,956
Buildings and improvements | ​ | 10 - 31 years | ​ | ​ | 200,274 | ​ | ​ | 206,349
Leasehold improvements | ​ | Shorter of asset useful life or lease term | ​ | ​ | 114,019 | ​ | ​ | 99,777
Furniture and equipment | ​ | 3 - 8 years | ​ | ​ | 103,961 | ​ | ​ | 125,594
Software | ​ | 3 - 5 years | ​ | ​ | 113,219 | ​ | ​ | 92,212
Construction in progress | ​ | - | ​ | ​ | 11,554 | ​ | ​ | 23,390
Property and equipment, gross | ​ | ​ | ​ | ​ | 574,803 | ​ | ​ | 583,278
Accumulated depreciation | ​ | ​ | ​ |  | (326,279) | ​ |  | (338,629)
Property and equipment, net | ​ | ​ | ​ | $ | 248,524 | ​ | $ | 244,649

​

Depreciation expense was $39.7 million, $41.4 million, and $44.6 million for the years ended June 30, 2024, 2023, and 2022, respectively.

During the second quarter of fiscal year 2024, management committed to a plan to sell a building owned by Adtalem located in Naperville, Illinois, and the building met criteria to be classified as assets held for sale. As a result, the building’s carrying value of $8.4 million was adjusted to its estimated fair value less cost to sell of $7.8 million, and the resulting $0.6 million charge was recognized within student services and administrative expense in the Consolidated Statements of

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Income for the year ended June 30, 2024. In addition, the building is presented as assets held for sale on the Consolidated Balance Sheets as of June 30, 2024.

On July 31, 2019, Adtalem sold its Chicago, Illinois, campus facility to DePaul College Prep for $52.0 million. Adtalem received $5.2 million of cash at the time of closing and held a mortgage, secured by the property, from DePaul College Prep for $46.8 million. The mortgage was due on July 31, 2024 as a balloon payment and bore interest at a rate of 4% per annum, payable monthly. The buyer had an option to make prepayments. Due to Adtalem’s involvement with financing the sale, the transaction did not qualify as a sale for accounting purposes. Adtalem continued to maintain the assets associated with the sale on the Consolidated Balance Sheets. We recorded a note receivable of $40.3 million and a financing payable of $45.5 million at the time of the sale, which were classified as other assets, net and other liabilities, respectively, on the Consolidated Balance Sheets. See Note 10 “Accounts and Financing Receivables” for a discussion on the discounting of the note receivable. On February 23, 2023, DePaul College Prep paid the mortgage in full. The $46.8 million received during fiscal year 2023 is classified as an investing activity in the Consolidated Statements of Cash Flows. Upon receiving full repayment of the mortgage, Adtalem no longer is involved in the financing of the sale and therefore derecognized the note receivable, the financing payable, and the assets associated with the campus facility, which resulted in recognizing a gain on sale of assets of $13.3 million in fiscal year 2023. This gain was recorded at Adtalem’s home office, which is classified as “Home Office” in Note 22 “Segment Information.”

12. Leases

We determine if a contract contains a lease at inception. We have entered into operating leases for academic sites, housing facilities, and office space which expire at various dates through November 2039, most of which include options to terminate for a fee or extend the leases for an additional five-year period. The lease term includes the noncancelable period of the lease, as well as any periods for which we are reasonably certain to exercise extension options. We elected to account for lease and non-lease components (e.g., common-area maintenance costs) as a single lease component for all operating leases. Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. We have not entered into any financing leases.

Operating lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets represent our right to use an underlying asset during the lease term. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. Operating lease assets are adjusted for any prepaid or accrued lease payments, lease incentives, initial direct costs, and impairments. Our incremental borrowing rate is utilized in determining the present value of the lease payments based upon the information available at the commencement date. Our incremental borrowing rate is determined using a secured borrowing rate for the same currency and term as the associated lease. Operating lease expense is recognized on a straight-line basis over the lease term.

As of June 30, 2024, we had entered into three additional operating leases that have not yet commenced. The first lease is expected to commence during the first quarter of fiscal year 2025, has a 10-year lease term, and will result in an additional operating lease asset and operating lease liability of approximately $1.3 million. The second lease is expected to commence during the second quarter of fiscal year 2025, has a 15-year lease term, and will result in an additional operating lease asset and operating lease liability of approximately $6.3 million. The third lease is expected to commence during the second quarter of fiscal year 2025, has a 15-year lease term, and will result in an additional operating lease asset and operating lease liability of approximately $4.0 million.

The components of lease cost were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Operating lease cost | ​ | $ | 44,365 | ​ | $ | 48,181 | ​ | $ | 55,257
Sublease income | ​ |  | (9,107) | ​ |  | (13,329) | ​ |  | (13,920)
Total lease cost | ​ | $ | 35,258 | ​ | $ | 34,852 | ​ | $ | 41,337

​

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Maturities of lease liabilities as of June 30, 2024 were as follows (in thousands):

​

​ | ​ | ​ | ​
​ | ​ | Operating
Fiscal Year | ​ | Leases
2025 | ​ | $ | 44,419
2026 | ​ | ​ | 44,406
2027 | ​ | ​ | 43,012
2028 | ​ | ​ | 36,054
2029 | ​ | ​ | 26,313
Thereafter | ​ | ​ | 89,337
Total lease payments | ​ |  | 283,541
Less: tenant improvement allowance not yet received | ​ | ​ | (8,631)
Less: imputed interest | ​ | ​ | (75,769)
Present value of lease liabilities | ​ | $ | 199,141

​

Lease term and discount rate were as follows:

​

​ | ​ | ​ | ​
​ | ​ | June 30, 2024
Weighted-average remaining operating lease term (years) | ​ | ​ | 6.8
Weighted-average operating lease discount rate | ​ | ​ | 7.4%

​

Supplemental disclosures of cash flow information related to leases were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Cash paid for amounts in the measurement of operating lease liabilities (net of sublease receipts) | ​ | $ | 41,063 | ​ | $ | 58,198 | ​ | $ | 52,540
Operating lease assets obtained in exchange for operating lease liabilities | ​ | $ | 34,719 | ​ | $ | 32,476 | ​ | $ | 49,136

​

Adtalem maintains agreements to sublease either a portion or the full leased spac e at four of its operating lease locations. Most of these subleases are a result of Adtalem retaining leases associated with restructured lease activities at DeVry University and Carrington College prior to their divestitures during fiscal year 2019. All sublease expirations with DeVry University and Carrington College coincide with Adtalem’s original head lease expiration dates. At that time, Adtalem will be relieved of its obligations. In addition, Adtalem has entered into subleases with non-affiliated entities for vacated or partially vacated space from restructuring activities. Adtalem’s sublease agreements expire at various dates through December 2025. We record sublease income as an offset against our lease expense recorded on the head lease. For leases which Adtalem vacated or partially vacated space, we recorded estimated restructuring charges in prior periods. Actual results may differ from these estimates, which could result in additional restructuring charges or reversals in future periods. Future minimum sublease rental income under these agreements as of June 30, 2024, were as follows (in thousands):

​

​ | ​ | ​ | ​
Fiscal Year | ​ | Amount
2025 | ​ | $ | 5,255
2026 | ​ |  | 2,038
Total sublease rental income | ​ | $ | 7,293

​

​

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13. Goodwill and Intangible Assets

Goodwill balances by reporting unit were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2024 | ​ | 2023
Chamberlain | ​ | $ | 4,716 | ​ | $ | 4,716
Walden | ​ | ​ | 651,052 | ​ | ​ | 651,052
AUC | ​ |  | 68,321 | ​ |  | 68,321
RUSM | ​ |  | 180,089 | ​ |  | 180,089
RUSVM | ​ |  | 57,084 | ​ |  | 57,084
Total | ​ | $ | 961,262 | ​ | $ | 961,262

​

Goodwill balances by reportable segment were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2024 | ​ | 2023
Chamberlain | ​ | $ | 4,716 | ​ | $ | 4,716
Walden | ​ | ​ | 651,052 | ​ | ​ | 651,052
Medical and Veterinary | ​ | ​ | 305,494 | ​ | ​ | 305,494
Total | ​ | $ | 961,262 | ​ | $ | 961,262

​

Amortizable intangible assets consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30, 2024 | ​ | June 30, 2023 | ​ | ​
​ | ​ | Gross Carrying | ​ | Accumulated | ​ | Gross Carrying | ​ | Accumulated | ​ | Weighted-Average
​ | ​ | Amount | ​ | Amortization | ​ | Amount | ​ | Amortization | ​ | Amortization Period
Student relationships | ​ | $ | 161,900 | ​ | $ | (161,900) |  | $ | 161,900 | ​ | $ | (137,476) |  | 3 Years
Curriculum | ​ |  | 56,091 | ​ |  | (32,257) |  |  | 56,091 | ​ |  | (21,037) |  | 5 Years
Total | ​ | $ | 217,991 | ​ | $ | (194,157) |  | $ | 217,991 | ​ | $ | (158,513) |  | ​

​

Indefinite-lived intangible assets consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2024 | ​ | 2023
Walden trade name | ​ | $ | 119,560 | ​ | $ | 119,560
AUC trade name | ​ | ​ | 17,100 | ​ | ​ | 17,100
RUSM trade name | ​ | ​ | 3,500 | ​ | ​ | 3,500
RUSVM trade name | ​ | ​ | 1,600 | ​ | ​ | 1,600
Chamberlain Title IV eligibility and accreditations | ​ |  | 1,200 | ​ |  | 1,200
Walden Title IV eligibility and accreditations | ​ | ​ | 495,800 | ​ | ​ | 495,800
AUC Title IV eligibility and accreditations | ​ |  | 100,000 | ​ |  | 100,000
RUSM Title IV eligibility and accreditations | ​ |  | 11,600 | ​ |  | 11,600
RUSVM Title IV eligibility and accreditations | ​ |  | 2,500 | ​ |  | 2,500
Total | ​ | $ | 752,860 | ​ | $ | 752,860

​

Indefinite-lived intangible asset balances by reportable segment were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2024 | ​ | 2023
Chamberlain | ​ | $ | 1,200 | ​ | $ | 1,200
Walden | ​ | ​ | 615,360 | ​ | ​ | 615,360
Medical and Veterinary | ​ | ​ | 136,300 | ​ | ​ | 136,300
Total | ​ | $ | 752,860 | ​ | $ | 752,860

​

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Amortization expense for amortized intangible assets was $35.6 million, $61.2 million, and $97.3 million for the years ended June 30, 2024, 2023, and 2022, respectively. Future intangible asset amortization expense, by reporting unit, is expected to be as follows (in thousands):

​

​ | ​ | ​ | ​
Fiscal Year | ​ | Walden
2025 | ​ | $ | 11,220
2026 | ​ |  | 11,220
2027 | ​ |  | 1,394
Total | ​ | $ | 23,834

​

Curriculum is amortized on a straight-line basis. Student relationships is amortized based on the estimated retention of the students and considers the revenue and cash flow associated with these existing students.

Indefinite-lived intangible assets related to trade names and Title IV eligibility and accreditations are not amortized, as there are no legal, regulatory, contractual, economic, or other factors that limit the useful life of these intangible assets to the reporting entity.

Goodwill and indefinite-lived intangible assets are not amortized, but are tested for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist. There were no triggering events in fiscal year 2024 and our annual testing date is May 31.

Adtalem has five reporting units that contain goodwill and indefinite-lived intangible assets. These reporting units constitute components for which discrete financial information is available and regularly reviewed by segment management. We have the option to assess goodwill for impairment by first performing a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is determined that the reporting unit fair value is more likely than not less than its carrying value, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the reporting unit’s fair value. If the carrying value of a reporting unit containing the goodwill exceeds the fair value of that reporting unit, an impairment loss is recognized equal to the difference between the carrying value of the reporting unit and its fair value, not to exceed the carrying value of goodwill. We also have the option to perform a qualitative assessment to test indefinite-lived intangible assets for impairment by determining whether it is more likely than not that the indefinite-lived intangible assets are impaired. If it is determined that the indefinite-lived intangible asset is more likely than not impaired, or if we do not elect the option to perform an initial qualitative assessment, we perform a quantitative assessment of the indefinite-lived intangible assets. If the carrying value of the indefinite-lived intangible assets exceeds its fair value, an impairment loss is recognized to the extent the carrying value exceeds fair value.

As of May 31, 2024, we elected to perform a qualitative assessment for all reporting units, except AUC. We analyzed qualitative factors, including results of operations and business conditions of the four reporting units where a qualitative assessment was performed, significant changes in cash flows of the reporting unit level or individual indefinite-lived intangible asset level, if applicable, as well as how much previously calculated fair values exceeded carrying values to determine if it is more likely than not that the goodwill or indefinite-lived intangible assets were impaired. Based on the qualitative assessment of the four reporting units, it was determined that it was more likely than not that the fair values of the reporting units or individual indefinite-lived intangible assets exceeded the respective carrying values.

As of May 31, 2024, we did not elect to perform a qualitative assessment for the AUC trade name and AUC Title IV eligibility and accreditation indefinite-lived intangible assets, and therefore performed a quantitative assessment of the respective fair values. In determining fair value of the AUC trade name indefinite-lived intangible asset, we used the relief-from-royalty method. The significant assumptions used in this valuation approach are the risk-adjusted discount rate of 12.5%, forecasted revenue, a terminal revenue growth rate of 3.0%, and a royalty rate of 5.5%. In determining fair value of the AUC Title IV eligibility and accreditation indefinite-lived intangible asset, we used the with and without method in a discounted cash flow model. The significant assumptions used in this valuation approach are the risk-adjusted discount rate of 12.5%, forecasted revenue with and without the accreditations in place, and forecasted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) with and without the accreditations in place. Based on these quantitative assessments, it was determined that the fair values of these indefinite-lived intangible assets in the AUC reporting unit exceeded their carrying values and therefore no impairment was identified.

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As of May 31, 2024, we did not elect to perform a qualitative assessment for our AUC reporting unit and therefore performed a quantitative assessment of the reporting unit’s fair value. In determining fair value of the AUC reporting unit, we used the discounted cash flow model and the market multiple valuation approach. The significant assumptions used in the discounted cash flow model are the risk-adjusted discount rate of 12.5%, forecasted revenue and EBITDA, and a terminal growth rate of 3.0%. The significant assumptions used in the market multiple valuation approach include earnings multiples for comparable companies. Based on this quantitative assessment, it was determined that the fair value of the AUC reporting unit exceeded its carrying value and therefore no goodwill impairment was identified.

Determining the fair value of a reporting unit or an intangible asset involves the use of significant estimates and assumptions. Management bases its fair value estimates on assumptions it believes to be reasonable at the time, but such assumptions are subject to inherent uncertainty. Actual results may differ from those estimates. If economic conditions deteriorate, interest rates rise, or operating performance of our reporting units do not meet expectations such that we revise our long-term forecasts, we may recognize impairments of goodwill and other intangible assets in future periods.

14. Debt

Long-term debt consisted of the following senior secured credit facilities (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | June 30,
​ | ​ | 2024 | ​ | 2023
Senior Secured Notes due 2028 | ​ | $ | 404,950 | ​ | $ | 404,950
Term Loan B | ​ |  | 253,333 | ​ |  | 303,333
Total principal | ​ |  | 658,283 | ​ |  | 708,283
Unamortized debt discount and issuance costs | ​ |  | (9,571) | ​ |  | (13,206)
Long-term debt | ​ | $ | 648,712 | ​ | $ | 695,077

​

Scheduled future maturities of long-term debt were as follows (in thousands):

​

​ | ​ | ​ | ​
​ | ​ | Maturity
Fiscal Year | ​ | Payments
2025 | ​ | $ | —
2026 | ​ |  | —
2027 | ​ |  | —
2028 | ​ |  | 404,950
2029 | ​ |  | 253,333
Total | ​ | $ | 658,283

​

Senior Secured Notes due 2028

On March 1, 2021, Adtalem issued $800.0 million aggregate principal amount of 5.50% Senior Secured Notes due 2028 (the “Notes”), which mature on March 1, 2028, pursuant to an indenture, dated as of March 1, 2021 (the “Indenture”), by and between Adtalem and U.S. Bank National Association, as trustee and notes collateral agent. The Notes were sold within the U.S. only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the U.S. to non-U.S. persons in reliance on Regulation S under the Securities Act.

The Notes were issued at 100.0% of their par value. The Notes bear interest at a rate of 5.50% per year, payable semi-annually in arrears on March 1 and September 1 of each year, commencing on September 1, 2021, to holders of record on the preceding February 15 and August 15, as the case may be. The Notes are guaranteed by certain of Adtalem’s subsidiaries that are borrowers or guarantors under its senior secured credit facilities and certain of its other senior indebtedness, subject to certain exceptions (the “Guarantors”). As of August 12, 2021, the Notes were secured, subject to permitted liens and certain other exceptions, by first priority liens on the same collateral that secures the obligations under Adtalem’s senior secured credit facilities.

At any time prior to March 1, 2024, we could have redeemed all or a part of the Notes at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus a make-whole premium set forth in the Indenture and

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accrued and unpaid interest, if any, to, but not including, the redemption date. We may redeem the Notes, in whole or in part, at any time on or after March 1, 2024 at redemption prices equal to 102.75%, 101.375%, and 100% of the principal amount of the Notes redeemed if the redemption occurs during the twelve-month periods beginning on March 1 of the years 2024, 2025, and 2026 and thereafter, respectively, in each case plus accrued and unpaid interest, if any, thereon to, but not including, the applicable redemption date. In addition, at any time prior to March 1, 2024, Adtalem could have redeemed up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 105.5% of the aggregate principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but not including, the redemption date, with the net cash proceeds from one or more qualifying equity offerings.

On April 11, 2022, we repaid $373.3 million of Notes at a price equal to 100% of the principal amount of the Notes. During June 2022, we repurchased on the open market an additional $20.8 million of Notes at a price equal to approximately 90% of the principal amount of the Notes, resulting in a gain on extinguishment of debt of $2.1 million recorded within interest expense in the Consolidated Statements of Income for the year ended June 30, 2022. This debt was subsequently retired. During the first quarter of fiscal year 2023, we repurchased on the open market an additional $0.9 million of Notes at a price equal to approximately 92% of the principal amount of the Notes, resulting in a gain on extinguishment of debt of $0.1 million recorded within interest expense in the Consolidated Statements of Income for the year ended June 30, 2023. This debt was subsequently retired. The principal balance of the Notes is $405.0 million as of June 30, 2024.

Accrued interest on the Notes of $7.4 million is recorded within accrued liabilities on the Consolidated Balance Sheets as of each of June 30, 2024 and 2023.

Credit Agreement

On August 12, 2021, in connection with the Walden acquisition, Adtalem entered into its new credit agreement (the “Credit Agreement”) that provides for (1) a $850.0 million senior secured term loan (“Term Loan B”) with a maturity date of August 12, 2028 and (2) a $400.0 million senior secured revolving loan facility (“Revolver”) with a maturity date of August 12, 2026. We refer to the Term Loan B and Revolver collectively as the “Credit Facility.” The Revolver has availability for letters of credit and currencies other than U.S. dollars of up to $400.0 million.

On June 27, 2023, Adtalem entered into Amendment No. 1 to Credit Agreement, identifying the Secured Overnight Financing Rate (“SOFR”) as the benchmark rate to replace LIBOR for eurocurrency rate loans within the Credit Agreement effective the first quarter of fiscal year 2024.

Term Loan B

Prior to January 26, 2024, borrowings under the Term Loan B bore interest at Adtalem’s option at a rate per annum equal to SOFR, subject to a SOFR floor of 0.75%, plus an applicable margin ranging from 4.00% to 4.50% for eurocurrency term loan borrowings or 3.00% to 3.50% for alternative base rate (“ABR”) borrowings depending on Adtalem’s net first lien leverage ratio for such period. On January 26, 2024, we repriced our Term Loan B loan resulting in a 0.50% reduction in our margin interest rate. As of January 26, 2024, borrowings under the Term Loan B bear interest at Adtalem’s option at a rate per annum equal to SOFR, subject to a SOFR floor of 0.75%, plus an applicable margin ranging from 3.50% to 4.00% for eurocurrency term loan borrowings or 2.50% to 3.00% for ABR borrowings depending on Adtalem’s net first lien leverage ratio for such period.

As of June 30, 2024, the interest rate for borrowings under the Term Loan B facility was 8.84%, which approximated the effective interest rate. The Term Loan B originally required quarterly installment payments of $2.125 million beginning on March 31, 2022. On March 11, 2022, we made a prepayment of $396.7 million on the Term Loan B. With that prepayment, we are no longer required to make quarterly installment payments. We made additional Term Loan B prepayments of $100.0 million, $50.0 million, and $50.0 million on September 22, 2022, November 22, 2022, and January 26, 2024, respectively. The principal balance of the Notes is $253.3 million as of June 30, 2024.

Revolver

Borrowings under the Revolver bear interest at a rate per annum equal to SOFR, subject to a SOFR floor of 0.75%, plus an applicable margin ranging from 3.75% to 4.25% for SOFR borrowings or 2.75% to 3.25% for ABR borrowings

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depending on Adtalem’s net first lien leverage ratio for such period. There were no borrowings under the Revolver during the year ended June 30, 2024, 2023, and 2022.

The Credit Agreement requires payment of a commitment fee equal to 0.25% as of June 30, 2024, of the unused portion of the Revolver. The commitment fee expense is recorded within interest expense in the Consolidated Statements of Income. The amount unused under the Revolver was $242.1 million as of June 30, 2024.

Prior Credit Agreement

On April 13, 2018, Adtalem entered into a credit agreement (the “Prior Credit Agreement”) that provided for (1) a $300.0 million senior secured term loan (“Prior Term Loan B”), which was set to mature on April 13, 2025 and (2) a $300.0 million revolving facility (“Prior Revolver”), which was set to mature on April 13, 2023. We refer to the Prior Term Loan B and Prior Revolver collectively as the “Prior Credit Facility.”

Prior Term Loan B

For eurocurrency rate loans, Prior Term Loan B interest was equal to LIBOR or a LIBOR-equivalent rate plus 3%. For base rate loans, Prior Term Loan B interest was equal to the base rate plus 2%. The Prior Term Loan B required quarterly installment payments of $750,000, with the balance due at maturity on April 13, 2025.

On March 24, 2020, we executed a pay-fixed, receive-variable interest rate swap agreement (the “Swap”) with a multinational financial institution to mitigate risks associated with the variable interest rate on our Prior Term Loan B debt. We paid interest at a fixed rate of 0.946% and received variable interest of one-month LIBOR (subject to a minimum of 0.00%), on a notional amount equal to the amount outstanding under the Prior Term Loan B. The effective date of the Swap was March 31, 2020 and settlements with the counterparty occurred on a monthly basis. The Swap was set to terminate on February 28, 2025.

During the operating term of the Swap, the annual interest rate on the amount of the Prior Term Loan B was fixed at 3.946% (including the impact of the 3% interest rate margin on LIBOR loans) for the applicable interest rate period.

The Swap was designated as a cash flow hedge and as such, changes in its fair value were recognized in accumulated other comprehensive loss on the Consolidated Balance Sheets and were reclassified into the Consolidated Statements of Income within interest expense in the periods in which the hedged transactions affected earnings.

On July 29, 2021, prior to refinancing our Credit Agreement (as discussed above), we settled and terminated the Swap for $4.5 million, which resulted in a charge to interest expense for the year ended June 30, 2022.

Prior Revolver

Prior Revolver interest was equal to LIBOR or a LIBOR-equivalent rate for eurocurrency rate loans or a base rate, plus an applicable margin based on Adtalem’s consolidated leverage ratio, as defined in the Prior Credit Agreement. The applicable margin ranged from 1.75% to 2.75% for eurocurrency rate loans and from 0.75% to 1.75% for base rate loans.

Debt Discount and Issuance Costs

The Term Loan B was issued at a price of 99% of its principal amount, resulting in an original issue discount of 1%. The debt discount and issuance costs related to the Notes and Term Loan B are presented as a direct deduction from the face amount of the debt, while the debt issuance costs related to the Revolver are classified as other assets, net on the Consolidated Balance Sheets. The debt discount and issuance costs are amortized as interest expense over seven years for the Notes and Term Loan B and over five years for the Revolver. The remaining $6.0 million of unamortized debt issuance costs related to the Prior Credit Facility and the $10.3 million of debt issuances costs associated with an unused bridge facility, which was in place should the permanent financing not have been obtained, were expensed in interest expense in the Consolidated Statements of Income for the year ended June 30, 2022. In addition, based on the $396.7 million prepayment on the Term Loan B and $394.1 million prepayment on the Notes during fiscal year 2022, we expensed $12.5 million and $6.8 million, respectively, in interest expense in the Consolidated Statements of Income for the year ended

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June 30, 2022, which was the proportionate amount of the remaining unamortized debt discount and issuance costs related to the Term Loan B and Notes as of the prepayment dates. In addition, based on the $150.0 million and $50.0 million prepayments on the Term Loan B during fiscal year 2023 and 2024, respectively, we expensed $4.3 million and $1.1 million in interest expense in the Consolidated Statements of Income for the years ended June 30, 2023 and 2024, respectively, which was the proportionate amount of the remaining unamortized debt discount and issuance costs related to the Term Loan B as of the prepayment dates. The following table summarizes the unamortized debt discount and issuance costs activity for fiscal year 2024 (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Notes | ​ | Term Loan B | ​ | Revolver | ​ | Total
Unamortized debt discount and issuance costs as of June 30, 2023 | ​ | $ | 5,592 | ​ | $ | 7,614 | ​ | $ | 6,355 | ​ | $ | 19,561
Amortization of debt discount and issuance costs | ​ |  | (1,146) | ​ |  | (1,376) | ​ |  | (2,028) | ​ |  | (4,550)
Debt discount and issuance costs write-off | ​ | ​ | — | ​ | ​ | (1,113) | ​ | ​ | — | ​ | ​ | (1,113)
Unamortized debt discount and issuance costs as of June 30, 2024 | ​ | $ | 4,446 | ​ | $ | 5,125 | ​ | $ | 4,327 | ​ | $ | 13,898

​

Off-Balance Sheet Arrangements

The U.S. Department of Education (“ED”) has recently allowed reductions in our letters of credit totaling $90.8 million. On January 31, 2024, ED allowed a $76.2 million letter of credit in favor of ED to expire without any requirement for Adtalem to renew it. On April 26, 2024, ED indicated that it would permit Adtalem to reduce its $84.0 million surety-backed letter of credit in favor of ED on behalf of Walden, which allows Walden to participate in Title IV programs, to $69.4 million, which took effect on June 24, 2024, and was extended through December 31, 2024. In addition, Adtalem had a letter of credit outstanding under its Revolver in the amount of $157.9 million as of June 30, 2024, in favor of ED, which allows Adtalem institutions to participate in Title IV programs. As of June 30, 2024, Adtalem had $227.3 million of letters of credit outstanding in favor of ED.

Many states require private-sector postsecondary education institutions to post surety bonds for licensure. In the U.S., Adtalem has posted $44.3 million of surety bonds as of June 30, 2024 with regulatory authorities on behalf of Chamberlain, Walden, AUC, RUSM, and RUSVM.

Interest Expense

Interest expense consisted of the following (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Notes interest expense | ​ | $ | 22,272 | ​ | $ | 22,301 | ​ | $ | 39,371
Term Loan B interest expense | ​ | ​ | 26,324 | ​ | ​ | 26,831 | ​ | ​ | 33,413
Term Loan B ticking fees | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 5,330
Prior Term Loan B interest expense | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 1,272
Term Loan B debt discount and issuance costs write-off | ​ | ​ | 1,113 | ​ | ​ | 4,282 | ​ | ​ | 12,471
Notes issuance costs write-off | ​ | ​ | — | ​ | ​ | 15 | ​ | ​ | 6,771
Gain on extinguishment of debt | ​ | ​ | — | ​ | ​ | (71) | ​ | ​ | (2,072)
Unused bridge fee | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 10,329
Prior Credit Facility issuance costs write-off | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,000
Swap settlement | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 4,525
Amortization of debt discount and issuance costs | ​ | ​ | 4,550 | ​ | ​ | 4,832 | ​ | ​ | 7,083
Letters of credit fees | ​ | ​ | 8,639 | ​ | ​ | 3,847 | ​ | ​ | 3,968
Other | ​ | ​ | 761 | ​ | ​ | 1,063 | ​ | ​ | 887
Total | ​ | $ | 63,659 | ​ | $ | 63,100 | ​ | $ | 129,348

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Covenants and Guarantees

The Credit Agreement and Notes contain customary covenants, including restrictions on our restricted subsidiaries’ ability to merge and consolidate with other companies, incur indebtedness, grant liens or security interest on assets, make acquisitions, loans, advances or investments, or sell or otherwise transfer assets.

Under the terms of the Credit Agreement, beginning on the fiscal quarter ending December 31, 2021 and through December 31, 2023, Adtalem was required to maintain a Total Net Leverage Ratio of equal to or less than 4.00 to 1.00, which changed to 3.25 to 1.00 for the fiscal quarter ending March 31, 2024 and thereafter. The Total Net Leverage Ratio under the Credit Agreement is defined as the ratio of (a) the aggregate principal amount of Consolidated Debt (as defined in the Credit Agreement) of Adtalem and its subsidiaries as of the last day of the most recently ended Test Period (as defined in the Credit Agreement) minus Unrestricted Cash (as defined in the Credit Agreement) and Permitted Investments (as defined in the Credit Agreement) of the Borrower and its subsidiaries for such Test Period to (b) EBITDA (as defined in the Credit Agreement) for such Test Period. EBITDA for purposes of these restrictive covenants includes incremental adjustments beyond those included in traditional EBITDA calculations. Specifically, the Credit Agreement EBITDA definition includes the pro forma impact of EBITDA to be received from certain acquisition-related synergies and cost optimization activities, subject to a 20% cap.

Obligations under the Credit Agreement are secured by a first-priority lien on substantially all of the assets of Adtalem and certain of its domestic wholly owned subsidiaries (the “Subsidiary Guarantors”), which Subsidiary Guarantors also guarantee the obligations of Adtalem under the Credit Agreement, subject to certain exceptions. The Credit Agreement contains customary affirmative and negative covenants customary for facilities of its type, which, among other things, generally limit (with certain exceptions): mergers, amalgamations, or consolidations; the incurrence of additional indebtedness (including guarantees); the incurrence of additional liens; the sale, assignment, lease, conveyance or transfer of assets; certain investments; dividends and stock redemptions or repurchases in excess of certain amounts; transactions with affiliates; engaging in materially different lines of business; payments and modifications of indebtedness or the governing documents of Adtalem or any Subsidiary Guarantor; and other activities customarily restricted in such agreements.

The Credit Agreement contains customary events of default for facilities of this type. If an event of default under the Credit Agreement occurs and is continuing, the commitments thereunder may be terminated and the principal amount outstanding thereunder, together with all accrued and unpaid interest and other amounts owed thereunder, may be declared immediately due and payable.

The Term Loan B requires mandatory prepayments equal to the net cash proceeds from an asset sale or disposition which is not reinvested in assets within one-year from the date of disposition if the asset sale or disposition is in excess of $20.0 million, among other mandatory prepayment terms (see the Credit Agreement, as filed under Form 8-K dated August 12, 2021, for additional information and term definitions). With the $396.7 million prepayment on March 11, 2022 on the Term Loan B, the $394.1 million prepayment on the Notes during the fourth quarter of fiscal year 2022, and the $100.0 million prepayment on September 22, 2022 on the Term Loan B, we satisfied the mandatory prepayment requirement resulting from the sale proceeds received from the sale of our previous Financial Services segment. No other mandatory prepayments have been required since the execution of the Credit Agreement.

The Notes contain covenants that limit the ability of Adtalem and each of the Guarantors to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the Guarantors to make dividends or other payments to Adtalem; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Indenture and the Notes also provide for certain customary events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Notes to become or be declared due and payable or would allow the trustee or the holders of at least 25% in principal amount of the then outstanding Notes to declare the principal of and accrued and unpaid interest, if any, on all the Notes to be due and payable by notice in writing to Adtalem and, upon such declaration, such principal and accrued and unpaid interest, if any, will be due and payable immediately.

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Adtalem was in compliance with the Credit Agreement debt covenants and the Notes covenants as of June 30, 2024.

15. Redeemable Noncontrolling Interest

Prior to the third quarter of fiscal year 2022, Adtalem maintained a 69% ownership interest in EduPristine with the remaining 31% owned by Kaizen Management Advisors (“Kaizen”), an India-based private equity firm. Beginning on March 26, 2020, Adtalem had the right to exercise a call option and purchase any remaining EduPristine stock from Kaizen. Likewise, Kaizen had the right to exercise a put option and sell up to 33% of its remaining ownership interest in EduPristine to Adtalem. Beginning on March 26, 2022, Kaizen had the right to exercise a put option and sell its remaining ownership interest in EduPristine to Adtalem. During fiscal year 2022, Adtalem purchased the remaining ownership interest in EduPristine from Kaizen for $1.8 million, resulting in Adtalem owning 100% of EduPristine. Subsequently, Adtalem sold EduPristine in its entirety on June 17, 2022 (see Note 4 “Discontinued Operations” for additional information).

Since the put option was out of the control of Adtalem, authoritative guidance required the redeemable noncontrolling interest, which included the value of the put option, to be presented outside of the equity section of the Consolidated Balance Sheets.

16. Share Repurchases

Open Market Share Repurchase Programs

On March 1, 2022, we announced that the Board authorized Adtalem’s thirteenth share repurchase program, which allowed Adtalem to repurchase up to $300.0 million of its common stock through February 25, 2025. On January 16, 2024, Adtalem completed its thirteenth share repurchase program. On January 19, 2024, we announced that the Board authorized Adtalem’s fourteenth share repurchase program, which allows Adtalem to repurchase up to $300.0 million of its common stock through January 16, 2027. Adtalem made share repurchases under its share repurchase programs as follows, which includes the market price of the shares, commissions, and excise tax (in thousands, except shares and per share data):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Total number of share repurchases | ​ | ​ | 5,446,113 | ​ | ​ | 3,207,036 | ​ | ​ | —
Total cost of share repurchases | ​ | $ | 261,183 | ​ | $ | 127,254 | ​ | $ | —
Average price paid per share | ​ | $ | 47.96 | ​ | $ | 39.68 | ​ | $ | —

​

As of June 30, 2024, $211.6 million of authorized share repurchases were remaining under the fourteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. These repurchases may be made through open market purchases, accelerated share repurchases, privately negotiated transactions, or otherwise. Repurchases will be funded through available cash balances and ongoing business operating cash generation and may be suspended or discontinued at any time. Shares of stock repurchased under the programs are held as treasury shares. Repurchases under our share repurchase programs reduce the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

ASR Agreement

On March 14, 2022, we entered into an ASR agreement to repurchase $150.0 million of common stock. We received an initial delivery of 4,709,576 shares of common stock representing approximately 80% of the total shares expected to be delivered at the time of executing the ASR based on the per share price on the day prior to the execution date. This initial delivery of shares reduced the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations. The final number of shares to be repurchased was based on the volume-weighted average price of Adtalem’s common stock during the term of the ASR agreement, less a discount and subject to adjustments pursuant to the terms of the ASR agreement. See Note 9 “Earnings per Share” for information on the ASR impact to earnings per share for fiscal year 2023. The ASR agreement ended on October 14, 2022. Based on the volume-weighted average price of Adtalem’s common stock during the term of the ASR agreement, Adtalem owed the counter party 332,212 shares of common stock. We elected to settle the contract in cash instead of delivering shares by making a cash payment of $13.2 million on November 2, 2022.

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On March 14, 2022, we recorded the $150.0 million purchase price of the ASR as a reduction to shareholders’ equity, consisting of a $120.0 million increase in treasury stock and a $30.0 million reduction in additional paid-in capital, which represented an equity forward contract, on the Consolidated Balance Sheets. During the second quarter of fiscal year 2023, the $30.0 million initially recorded as a reduction in additional paid-in capital was reclassified to treasury stock and an additional $13.2 million was recorded in treasury stock, which represented our final cash settlement payment.

17. Accumulated Other Comprehensive Loss

The following table shows the changes in accumulated other comprehensive loss by component (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Foreign currency translation adjustments | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning balance | ​ | $ | (2,227) | ​ | $ | (2,227) | ​ | $ | (2,523)
Reclassification from other comprehensive income | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 296
Ending balance | ​ | $ | (2,227) | ​ | $ | (2,227) | ​ | $ | (2,227)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Interest rate swap | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Beginning balance, gross | ​ | $ | — | ​ | $ | — | ​ | $ | (8,926)
Beginning balance, tax effect | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,231
Beginning balance, net of tax | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (6,695)
Reclassification from other comprehensive income | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 6,695
Ending balance | ​ | $ | — | ​ | $ | — | ​ | $ | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total ending balance | ​ | $ | (2,227) | ​ | $ | (2,227) | ​ | $ | (2,227)

​

​

18. Stock-Based Compensation

Adtalem’s current stock-based incentive plan is its Fourth Amended and Restated Incentive Plan of 2013, which is administered by the Compensation Committee of the Board. Under the plan, directors, key executives, and managerial employees are eligible to receive stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), and other forms of stock awards. As of June 30, 2024, 2,106,199 shares of common stock were available for future issuance under this plan.

Stock-based compensation expense is recognized on a straight-line basis over the required service period. Adtalem accounts for stock-based compensation granted to retirement eligible employees that fully vests upon an employee’s retirement under the non-substantive vesting period approach. Under this approach, the entire stock-based compensation expense is recognized at the grant date for stock-based grants issued to retirement eligible employees. For non-retirement eligible employees, stock-based compensation expense is recognized over the requisite service period. We account for forfeitures of unvested awards in the period they occur. Adtalem issues new shares of common stock to satisfy stock option exercises, RSU vests, and PSU vests.

Stock-based compensation expense, which is included in student services and administrative expense, and the related income tax benefit were as follows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Stock-based compensation | ​ | $ | 25,947 | ​ | $ | 14,299 | ​ | $ | 22,611
Income tax benefit | ​ |  | (8,594) | ​ |  | (3,938) | ​ |  | (3,658)
Stock-based compensation, net of tax | ​ | $ | 17,353 | ​ | $ | 10,361 | ​ | $ | 18,953

​

There was no capitalized stock-based compensation cost as of each of June 30, 2024 and 2023.

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Stock Options

Beginning in fiscal year 2023, the Compensation Committee of the Board determined to no longer grant stock options. Prior to fiscal year 2023, we granted stock options generally with a four-year graduated vesting from the grant date and expire ten years from the grant date. The following table summarizes stock option activity for the year ended June 30, 2024:

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | Weighted-Average | ​ | ​
​ | ​ | Number of | ​ | ​ | ​ | Remaining | ​ | Aggregate
​ | ​ | Stock | ​ | Weighted-Average | ​ | Contractual Life | ​ | Intrinsic Value
​ | ​ | Options | ​ | Exercise Price | ​ | (in years) | ​ | (in thousands)
Outstanding as of June 30, 2023 |  | 1,045,801 | ​ | $ | 36.02 |  | ​ | ​ | ​ | ​
Exercised |  | (494,314) | ​ | ​ | 34.57 |  | ​ | ​ | ​ | ​
Expired |  | (1,144) | ​ | ​ | 28.32 |  | ​ | ​ | ​ | ​
Outstanding as of June 30, 2024 |  | 550,343 | ​ |  | 37.34 |  | 6.0 | ​ | $ | 16,989
Exercisable as of June 30, 2024 |  | 410,668 | ​ | $ | 38.07 |  | 5.7 | ​ | $ | 12,376

​

The fair value of stock options that vested during the years ended June 30, 2024, 2023, and 2022 was $1.9 million, $2.1 million, and $4.7 million, respectively. As of June 30, 2024, $0.4 million of unrecognized stock-based compensation expense related to unvested stock options is expected to be recognized over a remaining weighted-average period of 1.3 years. The total intrinsic value of stock options exercised for the years ended June 30, 2024, 2023, and 2022 was $10.0 million, $1.1 million, and $6.9 million, respectively. The tax benefit from options exercised for the years ended June 30, 2024, 2023, and 2022 was $2.5 million, $0.3 million, and $1.8 million, respectively.

The fair value of Adtalem’s stock options was estimated using a binomial model. This model uses historical cancellation and exercise experience of Adtalem to determine the option value. It also considers the illiquid nature of employee options during the vesting period.

The weighted-average estimated grant date fair value of options granted at market price under Adtalem’s stock-based incentive plans during the year ended June 30, 2022 was $14.72. No stock options were granted during fiscal years 2024 and 2023. The fair value of Adtalem’s stock option grants was estimated assuming the following weighted-average assumptions:

​

​ | ​ | ​ | ​
​ | ​ | Fiscal Year | ​
​ | ​ | 2022 | ​
Expected life (in years) |  | 6.56 |
Expected volatility |  | 39.99 | %
Risk-free interest rate |  | 0.94 | %
Dividend yield |  | 0.00 | %

​

The expected life of the options granted is based on the weighted-average exercise life with age and salary adjustment factors from historical exercise behavior. Adtalem’s expected volatility is computed by combining and weighting the implied market volatility, the most recent volatility over the expected life of the option grant, and Adtalem’s long-term historical volatility.

RSUs

Prior to fiscal year 2023, we granted RSUs generally with a four-year graduated vesting from the grant date. Beginning in fiscal year 2023, we grant RSUs generally with a three-year graduated vesting from the grant date. We also regularly grant RSUs to our Board members with a one-year cliff vest from the grant date. The fair value per share of RSUs is the

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closing market price of our common stock on the grant date. The following table summarizes RSU activity for the year ended June 30, 2024:

​

​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted-Average
​ | ​ | Number of | ​ | Grant Date
​ | ​ | RSUs | ​ | Fair Value
Unvested as of June 30, 2023 |  | 737,733 | ​ | $ | 37.22
Granted |  | 399,220 | ​ |  | 44.24
Vested |  | (340,923) | ​ |  | 38.00
Forfeited |  | (40,189) | ​ |  | 38.53
Unvested as of June 30, 2024 |  | 755,841 | ​ | $ | 40.51

​

The weighted-average grant date fair value per share of RSUs granted in the years ended June 30, 2024, 2023, and 2022 was $44.24, $39.90, and $35.57 respectively. The grant date fair value of RSUs that vested during the years ended June 30, 2024, 2023, and 2022 was $13.0 million, $9.4 million, and $7.9 million, respectively. As of June 30, 2024, $14.5 million of unrecognized stock-based compensation expense related to unvested RSUs is expected to be recognized over a remaining weighted-average period of 1.6 years.

PSUs

We issue PSUs generally with a three-year cliff vest from the grant date. The fair value per share of PSUs is the closing market price of our common stock on the grant date. We estimate the number of shares that will vest under our PSU awards when recognizing stock-based compensation expense for each reporting period. The final number of shares that vest under our PSUs is based on metrics approved by the Compensation Committee of the Board. The following table summarizes PSU activity for the year ended June 30, 2024:

​

​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Weighted-Average
​ | ​ | Number of | ​ | Grant Date
​ | ​ | PSUs | ​ | Fair Value
Unvested as of June 30, 2023 |  | 490,300 | ​ | $ | 35.17
Granted (1) |  | 336,900 | ​ |  | 50.02
Vested |  | (126,918) | ​ |  | 29.92
Forfeited |  | (70,512) | ​ |  | 35.60
Unvested as of June 30, 2024 |  | 629,770 | ​ | $ | 43.77
(1) Includes incremental PSUs awarded upon achievement of metrics.

​

The weighted-average grant date fair value per share of PSUs granted in the years ended June 30, 2024, 2023, and 2022 was $50.02, $40.43, and $33.84, respectively. The grant date fair value of PSUs that vested during the years ended June 30, 2024, 2023, and 2022 was $4.1 million, $3.4 million, and $2.6 million, respectively. As of June 30, 2024, $15.5 million of unrecognized stock-based compensation expense related to unvested PSUs is expected to be recognized over a remaining weighted-average period of 1.6 years.

19. Employee Benefit Plans

401(k) Retirement Plan

All U.S. employees who meet certain eligibility requirements can participate in Adtalem’s 401(k) Retirement Plan. Adtalem makes a matching employer contribution into the 401(k) Retirement Plan of 100% up to the first 6% of the participant’s eligible compensation. Expense for the matching employer contributions under the plan was $19.7 million, $17.9 million, and $18.4 million for the years ended June 30, 2024, 2023, and 2022, respectively.

Colleague Stock Purchase Plan

Under provisions of Adtalem’s current Colleague Stock Purchase Plan, any eligible employee may authorize Adtalem to withhold up to $25,000 of annual wages to purchase common stock of Adtalem. Adtalem implemented a new Colleague

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Stock Purchase Plan approved by stockholders at Adtalem’s annual meeting of stockholders held on November 6, 2019 which allows for the issuance of 500,000 shares. Currently, employees can purchase Adtalem’s common stock at 90% of the prevailing market price on the purchase date. Adtalem subsidizes the remaining 10% and pays all brokerage commissions and administrative fees associated with the plan. These expenses were insignificant for the years ended June 30, 2024, 2023, and 2022. Total shares issued under the plans were 19,666, 18,463, and 18,328 for the years ended June 30, 2024, 2023, and 2022, respectively. These plans are intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. Currently, Adtalem is re-issuing treasury shares to satisfy colleague share purchases under this plan.

Nonqualified Deferred Compensation Plan

Adtalem has a nonqualified deferred compensation (“NDCP”) plan for highly compensated employees and its Board members. The plan allows participants to make tax-deferred contributions that cannot be made under the 401(k) Retirement Plan because of Internal Revenue Service limitations. The plan permits the deferral of up to 50% of a participant’s salary and up to 100% of a participant’s bonus or board fee. Adtalem currently matches up to 6% of the total eligible compensation of participants who make contributions under the plan. Amounts contributed and deferred under the plan are credited or charged with the performance of investment options offered under the plan as elected by the participants. The participant’s “investments” are in a hypothetical portfolio of investments which are tracked by an administrator. Total liabilities under the NDCP plan included in accrued liabilities on the Consolidated Balance Sheets as of June 30, 2024 and 2023 were $12.2 million and $12.6 million, respectively. The increase or decrease in the fair value of the liabilities under the NDCP plan is included in student services and administrative expense in the Consolidated Statements of Income.

We have elected to fund our NDCP plan obligations through a rabbi trust. The rabbi trust is subject to creditor claims in the event of insolvency, but the assets held in the rabbi trust are not available for general corporate purposes. Amounts in the rabbi trust are placed in investments whose performance is generally consistent with the investments chosen by participants under their NDCP plan accounts, which are designated as trading securities and carried at fair value. The fair value of the investments in the rabbi trust included in prepaid expenses and other current assets on the Consolidated Balance Sheets as of June 30, 2024 and 2023 was $13.2 million and $12.5 million, respectively. We record trading gains and losses in other income, net in the Consolidated Statements of Income.

20. Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The guidance specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The guidance establishes fair value measurement classifications under the following hierarchy:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Observable inputs other than prices included in Level 1, such as quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

When available, Adtalem uses quoted market prices to determine fair value, and such measurements are classified within Level 1. In cases where market prices are not available, Adtalem makes use of observable market-based inputs to calculate fair value, in which case the measurements are classified within Level 2. If quoted or observable market prices are not available, fair value is based upon internally developed models that use, where possible, current market-based parameters such as interest rates and yield curves. These measurements are classified within Level 3.

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Fair value measurements are classified according to the lowest level input or value-driver that is significant to the valuation. A measurement may therefore be classified within Level 3 even though there may be significant inputs that are readily observable.

The carrying value of our cash, cash equivalents, and restricted cash approximates fair value because of their short-term nature and is classified as Level 1.

Adtalem maintains a rabbi trust with investments in stock and bond mutual funds to fund obligations under a nonqualified deferred compensation plan. The fair value of the investments in the rabbi trust included in prepaid expenses and other current assets on the Consolidated Balance Sheets as of June 30, 2024 and 2023 was $13.2 million and $12.5 million, respectively. These investments are recorded at fair value based upon quoted market prices using Level 1 inputs.

The carrying value of the credit extension programs, which approximates its fair value, is included in accounts and financing receivables, net and other assets, net on the Consolidated Balance Sheets as of June 30, 2024 and 2023 of $28.9 million and $29.7 million, respectively, and is classified as Level 2. See Note 10 “Accounts and Financing Receivables” for additional information on these credit extension programs.

Adtalem has a nonqualified deferred compensation plan for highly compensated employees and its Board members. The participant’s “investments” are in a hypothetical portfolio of investments which are tracked by an administrator. Changes in the fair value of the nonqualified deferred compensation obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. Total liabilities under the plan included in accrued liabilities on the Consolidated Balance Sheets as of June 30, 2024 and 2023 were $12.2 million and $12.6 million, respectively. The fair value of the nonqualified deferred compensation obligation is classified as Level 2 because their inputs are derived principally from observable market data by correlation to the hypothetical investments.

As of June 30, 2024 and 2023, borrowings under our long-term debt agreements were $658.3 million and $708.3 million, respectively. The fair value of the Notes was $389.5 million as of June 30, 2024, which is based upon quoted market prices and is classified as Level 1. The fair value of the Term Loan B was $254.9 million as of June 30, 2024, which is based upon quoted market prices in a non-active market and is classified as Level 2. See Note 14 “Debt” for additional information on our long-term debt agreements.

As of June 30, 2024 and 2023, there were no assets or liabilities measured at fair value using Level 3 inputs.

We recorded an impairment of $5.0 million on an equity investment with no readily determinable fair value within other income, net in the Consolidated Statements of Income for the year ended June 30, 2023 as the carrying value was no longer recoverable. Since initial recognition of the investment, there had been no upward or downward adjustments as a result of observable price changes. Following the impairment, the carrying amount of $5.0 million was reduced to zero.

Adtalem has elected not to measure any assets or liabilities at fair value other than those required to be measured at fair value on a recurring basis. Assets measured at fair value on a nonrecurring basis include goodwill, intangible assets, and assets of businesses where the long-term value of the operations have been impaired. Goodwill and indefinite-lived intangible assets are not amortized, instead must be reviewed annually for impairment or more frequently if circumstances arise indicating potential impairment. This impairment review was most recently completed as of May 31, 2024. See Note 13 “Goodwill and Intangible Assets” for additional information on the impairment review, including valuation techniques and assumptions.

21. Commitments and Contingencies

Adtalem is subject to lawsuits, administrative proceedings, regulatory reviews and investigations associated with financial assistance programs and other matters arising in the conduct of its business and certain of these matters are discussed below. Descriptions of certain matters from prior SEC filings may not be carried forward in this report to the extent we believe such matters no longer are required to be disclosed or there has not been, to our knowledge, significant activity relating to them. As of June 30, 2024, we have adequately reserved for matters that management has determined a loss is probable and that loss can be reasonably estimated. For those matters for which we have not recorded an accrual, their possible impact on Adtalem’s business, financial condition, or results of operations, cannot be predicted at this time. The continued defense, resolution, or settlement of any of the following matters could require us to expend significant

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resources and could have a material adverse effect on our business, financial condition, results of operations, and cash flows, and result in the imposition of significant restrictions on us and our ability to operate.

On January 12, 2022, Walden was served with a complaint filed in the United States District Court for the District of Maryland by Aljanal Carroll, Claudia Provost Charles, and Tiffany Fair against Walden for damages, injunctive relief, and declaratory relief on behalf of themselves and all other similarly-situated individuals alleging violations of Title VI of the Civil Rights Act of 1964, the Equal Credit Opportunity Act, the Minnesota Prevention of Consumer Fraud Act, the Minnesota Uniform Deceptive Trade Practices Act, Minnesota statutes prohibiting false statements in advertising, and for common law fraudulent misrepresentation. Plaintiffs allege that Walden has targeted, deceived, and exploited Black and female Doctor of Business Administration (“DBA”) students by knowingly misrepresenting and understating the number of “capstone” credits required to complete the DBA program and obtain a degree. On March 23, 2022, Walden filed a Motion to Dismiss the Plaintiffs’ claims for failure to state a claim upon which relief can be granted. On November 27, 2022, the Court denied Walden’s motion to dismiss the complaint. Plaintiffs filed an amended complaint to add an additional plaintiff, Tareion Fluker. Walden answered the amended complaint on February 2, 2023. The parties participated in a non-binding mediation on May 4, 2023 and settlement discussions continued. At a second non-binding mediation held on September 21, 2023, the parties agreed on a $28.5 million payment to resolve the issues in the case, subject to agreement on non-financial terms. The parties subsequently agreed to the non-financial terms including an agreement by Walden to implement certain website disclosures and verifications and to make certain programmatic changes. A settlement agreement has been executed by the parties. The settlement agreement in no way constitutes an admission of wrongdoing or liability by Walden. Plaintiffs filed a motion for preliminary approval of the settlement agreement on March 28, 2024. On April 17, 2024, the District Court preliminarily approved the settlement, which includes the provisional certification of the settlement class (the “Class”). The Class opt-out deadline was June 19, 2024. On June 17, 2024, 25 former Walden students claimed that they should be included as members of the Class. Walden is investigating their claims. The opt-out deadline will be extended in relation to any additional former Walden students who are added to the Class. The Court had scheduled a fairness hearing on October 17, 2024 to determine, among other things, whether the requirements for certification of the Class have been met, whether the settlement should be approved as fair and reasonable, and whether the order and final judgment approving the settlement should be entered. The fairness hearing will be rescheduled to a later date. Regardless of whether any additional members are added to the class, the amount of the $28.5 million payment will be unaffected. We recorded a $28.5 million loss contingency accrual for this matter within accrued liabilities on the Consolidated Balance Sheets as of June 30, 2024. In January 2024, Adtalem made a claim for indemnification under the Membership Interest Purchase Agreement with Laureate Education, Inc. (“Laureate”), dated September 11, 2020, pursuant to which Adtalem purchased Walden. If a settlement is approved by the Court, Adtalem expects to receive $5.5 million from Laureate in connection with such indemnification claim.

On June 6, 2022, plaintiff Rajesh Verma filed a lawsuit on behalf of himself and a class of similarly situated individuals in the Circuit Court of the Fourth Judicial Circuit, Duval County Florida, against Walden alleging that Walden was placing telephonic sales calls to persons on the National Do-Not-Call Registry, in violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227, et seq. Although originally filed in state court, Walden removed the case to federal court and filed a motion to dismiss plaintiff’s complaint. On August 26, 2022, plaintiff filed a motion to remand Count I of the complaint to state court. On March 2, 2023, plaintiff filed an amended complaint to add a Florida state law claim against Walden under the Florida Telephone Solicitation Act (“FTSA”). On March 16, 2023, Walden filed its answer to the amended complaint. On March 29, 2023, Walden’s motion to dismiss plaintiff’s complaint and plaintiff’s motion to remand Count I of the complaint were denied. A non-binding mediation was held on September 18, 2023. The parties reached a settlement for an immaterial amount subject to Court approval. On November 27, 2023, the parties filed a motion for preliminary approval of the settlement agreement. On May 20, 2024, the Court granted preliminary approval to the settlement. The final settlement approval hearing is scheduled for October 29, 2024.

As previously disclosed, pursuant to the terms of the Stock Purchase Agreement (“SPA”) by and between Adtalem and Cogswell, dated as of December 4, 2017, as amended, Adtalem sold DeVry University to Cogswell and Adtalem agreed to indemnify DeVry University for certain losses up to $340.0 million (the “Liability Cap”). Adtalem has previously disclosed DeVry University related matters that have consumed a portion of the Liability Cap.

In late January 2024 and early February 2024, ED sent notice to Chamberlain, RUSM, RUSVM, and Walden that it had received approximately 3,225, 1,700, 1,900, and 7,740 borrower defense to repayment applications filed by students at Chamberlain, RUSM, RUSVM, and Walden respectively between June 23, 2022 and November 15, 2022. Each application

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seeks forgiveness of federal student loans made to these students. In the notices received, ED indicated that: (1) the notification was occurring prior to any substantive review of the application as well as its adjudication; (2) it would send the applications to each institution in batches of 500 per week; (3) it is optional for institutions to respond to the applications; and (4) not responding will result in no negative inference by ED. ED has also explained that it will separately decide whether to seek recoupment on any approved claim and that any recoupment actions ED chooses to initiate will have their own notification and response processes, which include an opportunity to provide additional evidence to the institutions. ED has indicated that an institution will learn of ED’s determination to forgive student loans only if it approves a borrower defense to repayment application and ED seeks recoupment. Chamberlain, RUSM, RUSVM, and Walden have responded to all of the applications received and they believe that none properly stated a claim for loan forgiveness.

22. Segment Information

We present three reportable segments as follows:

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

Walden – Offers degree and certificate programs, 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. See Note 3 “Acquisitions” for additional information on the acquisition.

Medical and Veterinary – Offers degree and certificate 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.”

Certain expenses previously allocated to ACAMS, Becker, OCL, and EduPristine within our former Financial Services segment during the first quarter of fiscal year 2022 have been reclassified to Home Office based on discontinued operations reporting guidance regarding allocation of corporate overhead. Beginning in the second quarter of fiscal year 2022, these costs are being allocated to the Chamberlain, Walden, and Medical and Veterinary segments.

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 deferred revenue adjustment, CEO transition costs, restructuring expense, business acquisition and integration expense, amortization of acquired intangible assets, 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” 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.”

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Revenue: |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Chamberlain | ​ | $ | 633,522 | ​ | $ | 571,034 | ​ | $ | 557,536
Walden | ​ | ​ | 595,332 | ​ | ​ | 533,725 | ​ | ​ | 485,393
Medical and Veterinary | ​ | ​ | 355,798 | ​ | ​ | 346,067 | ​ | ​ | 338,913
Total consolidated revenue | ​ | $ | 1,584,652 | ​ | $ | 1,450,826 | ​ | $ | 1,381,842
Adjusted operating income: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Chamberlain | ​ | $ | 137,800 | ​ | $ | 135,503 | ​ | $ | 127,252
Walden | ​ | ​ | 130,547 | ​ | ​ | 110,364 | ​ | ​ | 104,582
Medical and Veterinary | ​ | ​ | 71,507 | ​ | ​ | 67,336 | ​ | ​ | 69,148
Home Office | ​ |  | (31,076) | ​ |  | (25,633) | ​ |  | (33,380)
Total consolidated adjusted operating income | ​ | ​ | 308,778 | ​ | ​ | 287,570 | ​ | ​ | 267,602
Reconciliation to Consolidated Financial Statements: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred revenue adjustment | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (8,561)
CEO transition costs | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (6,195)
Restructuring expense | ​ |  | (1,870) | ​ |  | (18,817) | ​ |  | (25,628)
Business acquisition and integration expense | ​ | ​ | (34,215) | ​ |  | (42,661) | ​ |  | (53,198)
Amortization of acquired intangible assets: | ​ | ​ | (35,644) | ​ |  | (61,239) | ​ |  | (97,274)
Litigation reserve | ​ | ​ | (18,500) | ​ |  | (10,000) | ​ |  | —
Loss on assets held for sale | ​ | ​ | (647) | ​ |  | — | ​ |  | —
Debt modification costs | ​ | ​ | (848) | ​ |  | — | ​ |  | —
Gain on sale of assets | ​ | ​ | — | ​ |  | 13,317 | ​ |  | —
Total consolidated operating income | ​ | ​ | 217,054 | ​ | ​ | 168,170 | ​ | ​ | 76,746
Interest expense | ​ |  | (63,659) | ​ |  | (63,100) | ​ |  | (129,348)
Other income, net | ​ |  | 10,542 | ​ |  | 6,965 | ​ |  | 1,108
Total consolidated income (loss) from continuing operations before income taxes | ​ | $ | 163,937 | ​ | $ | 112,035 | ​ | $ | (51,494)
Capital expenditures: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Chamberlain | ​ | $ | 26,293 | ​ | $ | 13,934 | ​ | $ | 15,235
Walden | ​ | ​ | 5,889 | ​ | ​ | 1,084 | ​ | ​ | 5,393
Medical and Veterinary | ​ | ​ | 5,708 | ​ | ​ | 3,358 | ​ | ​ | 3,277
Home Office | ​ |  | 11,003 | ​ |  | 7,638 | ​ |  | 7,149
Total consolidated capital expenditures | ​ | $ | 48,893 | ​ | $ | 26,014 | ​ | $ | 31,054
Depreciation: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Chamberlain | ​ | $ | 18,752 | ​ | $ | 17,175 | ​ | $ | 18,547
Walden | ​ | ​ | 7,389 | ​ | ​ | 9,419 | ​ | ​ | 9,255
Medical and Veterinary | ​ | ​ | 11,983 | ​ | ​ | 12,438 | ​ | ​ | 13,890
Home Office | ​ |  | 1,552 | ​ |  | 2,344 | ​ |  | 2,882
Total consolidated depreciation | ​ | $ | 39,676 | ​ | $ | 41,376 | ​ | $ | 44,574
Amortization of acquired intangible assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Walden | ​ | $ | 35,644 | ​ | $ | 61,239 | ​ | $ | 97,274
Total consolidated amortization of acquired intangible assets | ​ | $ | 35,644 | ​ | $ | 61,239 | ​ | $ | 97,274

​

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

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Year Ended June 30,
​ | ​ | 2024 | ​ | 2023 | ​ | 2022
Revenue by geographic area: |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Domestic operations | ​ | $ | 1,228,854 | ​ | $ | 1,104,759 | ​ | $ | 1,042,929
Barbados, St. Kitts, and St. Maarten | ​ |  | 355,798 | ​ |  | 346,067 | ​ |  | 338,913
Total consolidated revenue | ​ | $ | 1,584,652 | ​ | $ | 1,450,826 | ​ | $ | 1,381,842
Long-lived assets by geographic area: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Domestic operations | ​ | $ | 283,597 | ​ | $ | 256,268 | ​ | $ | 289,129
Barbados, St. Kitts, and St. Maarten | ​ |  | 149,507 | ​ |  | 163,058 | ​ |  | 178,792
Total consolidated long-lived assets | ​ | $ | 433,104 | ​ | $ | 419,326 | ​ | $ | 467,921

​

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

23. Revision of Previously Issued Consolidated Financial Statements (Unaudited)

As described in Note 2 “Summary of Significant Accounting Policies,” Adtalem identified an error in the presentation of capitalized cloud computing implementation costs in its previously issued financial statements. Adtalem assessed the materiality of this error individually and in the aggregate with other previously identified errors to prior periods’ Consolidated Financial Statements and concluded the errors were not material to prior periods and therefore, amendments of previously filed reports are not required. The errors impacted the unaudited Consolidated Balance Sheets and unaudited Consolidated Statements of Cash Flows as of and for the nine months ended March 31, 2024 and 2023, as of and for the six months ended December 31, 2023 and 2022, and as of and for the three months ended September 30, 2023 and 2022. In each of Adtalem’s fiscal year 2025 interim Form 10-Qs, the impact of this revision will be incorporated into the prior periods, as applicable. In connection with this revision, Adtalem also corrected other immaterial errors in the prior periods, including certain errors that had previously been adjusted for in the period identified.

The following tables summarize the effect of the revision on the affected line items within the Consolidated Balance Sheets (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Prepaid expenses and other current assets | ​ | $ | 59,401 | ​ | $ | 4,183 | ​ | $ | 63,584
Total current assets | ​ | ​ | 387,634 | ​ | ​ | 4,183 | ​ | ​ | 391,817
Noncurrent assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 272,792 | ​ | ​ | (33,135) | ​ | ​ | 239,657
Other assets, net | ​ | ​ | 67,768 | ​ | ​ | 28,952 | ​ | ​ | 96,720
Total noncurrent assets | ​ | ​ | 2,327,400 | ​ | ​ | (4,183) | ​ | ​ | 2,323,217

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Prepaid expenses and other current assets | ​ | $ | 58,356 | ​ | $ | 3,010 | ​ | $ | 61,366
Total current assets | ​ | ​ | 378,099 | ​ | ​ | 3,010 | ​ | ​ | 381,109
Noncurrent assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 260,484 | ​ | ​ | (25,187) | ​ | ​ | 235,297
Other assets, net | ​ | ​ | 65,852 | ​ | ​ | 22,177 | ​ | ​ | 88,029
Total noncurrent assets | ​ | ​ | 2,322,826 | ​ | ​ | (3,010) | ​ | ​ | 2,319,816

​

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 262,438 | ​ | $ | (1,612) | ​ | $ | 260,826
Restricted cash | ​ | ​ | 1,988 | ​ | ​ | 1,612 | ​ | ​ | 3,600
Prepaid expenses and other current assets | ​ | ​ | 60,750 | ​ | ​ | 2,103 | ​ | ​ | 62,853
Total current assets | ​ | ​ | 472,928 | ​ | ​ | 2,103 | ​ | ​ | 475,031
Noncurrent assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 264,766 | ​ | ​ | (18,097) | ​ | ​ | 246,669
Other assets, net | ​ | ​ | 67,634 | ​ | ​ | 15,994 | ​ | ​ | 83,628
Total noncurrent assets | ​ | ​ | 2,321,233 | ​ | ​ | (2,103) | ​ | ​ | 2,319,130

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 315,373 | ​ | $ | (1,613) | ​ | $ | 313,760
Restricted cash | ​ | ​ | 1,804 | ​ | ​ | 1,613 | ​ | ​ | 3,417
Prepaid expenses and other current assets | ​ | ​ | 102,573 | ​ | ​ | 514 | ​ | ​ | 103,087
Total current assets | ​ | ​ | 533,034 | ​ | ​ | 514 | ​ | ​ | 533,548
Noncurrent assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 252,797 | ​ | ​ | (6,234) | ​ | ​ | 246,563
Other assets, net | ​ | ​ | 67,618 | ​ | ​ | 5,720 | ​ | ​ | 73,338
Total noncurrent assets | ​ | ​ | 2,334,083 | ​ | ​ | (514) | ​ | ​ | 2,333,569

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2022
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 207,776 | ​ | $ | (1,492) | ​ | $ | 206,284
Restricted cash | ​ | ​ | 2,234 | ​ | ​ | 1,492 | ​ | ​ | 3,726
Prepaid expenses and other current assets | ​ | ​ | 113,564 | ​ | ​ | 1,081 | ​ | ​ | 114,645
Total current assets | ​ | ​ | 423,116 | ​ | ​ | 1,081 | ​ | ​ | 424,197
Noncurrent assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 275,617 | ​ | ​ | (3,275) | ​ | ​ | 272,342
Other assets, net | ​ | ​ | 116,613 | ​ | ​ | 3,043 | ​ | ​ | 119,656
Total noncurrent assets | ​ | ​ | 2,419,922 | ​ | ​ | (232) | ​ | ​ | 2,419,690
Total assets | ​ | ​ | 2,843,038 | ​ | ​ | 849 | ​ | ​ | 2,843,887
Liabilities and shareholders' equity: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred revenue | ​ | ​ | 115,658 | ​ | ​ | 5,177 | ​ | ​ | 120,835
Total current liabilities | ​ | ​ | 371,462 | ​ | ​ | 5,177 | ​ | ​ | 376,639
Noncurrent liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Other liabilities | ​ | ​ | 61,901 | ​ | ​ | 9,177 | ​ | ​ | 71,078
Total noncurrent liabilities | ​ | ​ | 948,854 | ​ | ​ | 9,177 | ​ | ​ | 958,031
Total liabilities | ​ | ​ | 1,320,316 | ​ | ​ | 14,354 | ​ | ​ | 1,334,670
Shareholders' equity: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Retained earnings | ​ | ​ | 2,349,146 | ​ | ​ | (13,505) | ​ | ​ | 2,335,641
Total shareholders' equity | ​ | ​ | 1,522,722 | ​ | ​ | (13,505) | ​ | ​ | 1,509,217
Total liabilities and shareholders' equity | ​ | ​ | 2,843,038 | ​ | ​ | 849 | ​ | ​ | 2,843,887

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2022
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 327,515 | ​ | $ | (1,681) | ​ | $ | 325,834
Restricted cash | ​ | ​ | 2,480 | ​ | ​ | 1,681 | ​ | ​ | 4,161
Noncurrent assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | ​ | 281,581 | ​ | ​ | (416) | ​ | ​ | 281,165
Other assets, net | ​ | ​ | 120,630 | ​ | ​ | 416 | ​ | ​ | 121,046

​

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The following tables summarize the effect of the revision on the affected line items within the Consolidated Statements of Cash Flows (in thousands):

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended March 31, 2024
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to reconcile net income to net cash provided by operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation | ​ | $ | 32,106 | ​ | $ | (2,227) | ​ | $ | 29,879
Changes in assets and liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cloud computing implementation assets | ​ | ​ | — | ​ | ​ | (19,262) | ​ | ​ | (19,262)
Accounts payable | ​ | ​ | 10,841 | ​ | ​ | 1,791 | ​ | ​ | 12,632
Net cash provided by operating activities-continuing operations | ​ | ​ | 246,809 | ​ | ​ | (19,698) | ​ | ​ | 227,111
Net cash provided by operating activities | ​ | ​ | 255,205 | ​ | ​ | (19,698) | ​ | ​ | 235,507
Investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | ​ | (52,014) | ​ | ​ | 19,698 | ​ | ​ | (32,316)
Net cash used in investing activities-continuing operations | ​ | ​ | (51,886) | ​ | ​ | 19,698 | ​ | ​ | (32,188)
Net cash used in investing activities | ​ | ​ | (51,886) | ​ | ​ | 19,698 | ​ | ​ | (32,188)
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | ​ | 11,086 | ​ | ​ | (4,869) | ​ | ​ | 6,217

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months Ended December 31, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to reconcile net income to net cash provided by operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation | ​ | $ | 20,714 | ​ | $ | (1,333) | ​ | $ | 19,381
Changes in assets and liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cloud computing implementation assets | ​ | ​ | — | ​ | ​ | (11,314) | ​ | ​ | (11,314)
Accounts payable | ​ | ​ | 7,824 | ​ | ​ | 1,931 | ​ | ​ | 9,755
Net cash provided by operating activities-continuing operations | ​ | ​ | 83,069 | ​ | ​ | (10,716) | ​ | ​ | 72,353
Net cash provided by operating activities | ​ | ​ | 92,584 | ​ | ​ | (10,716) | ​ | ​ | 81,868
Investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | ​ | (30,328) | ​ | ​ | 10,716 | ​ | ​ | (19,612)
Net cash used in investing activities-continuing operations | ​ | ​ | (30,200) | ​ | ​ | 10,716 | ​ | ​ | (19,484)
Net cash used in investing activities | ​ | ​ | (30,200) | ​ | ​ | 10,716 | ​ | ​ | (19,484)
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | ​ | 9,062 | ​ | ​ | (5,009) | ​ | ​ | 4,053

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to reconcile net income to net cash provided by operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation | ​ | $ | 9,778 | ​ | $ | (440) | ​ | $ | 9,338
Changes in assets and liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cloud computing implementation assets | ​ | ​ | — | ​ | ​ | (4,224) | ​ | ​ | (4,224)
Accounts payable | ​ | ​ | (2,870) | ​ | ​ | 52 | ​ | ​ | (2,818)
Net cash provided by operating activities-continuing operations | ​ | ​ | 90,726 | ​ | ​ | (4,612) | ​ | ​ | 86,114
Net cash provided by operating activities | ​ | ​ | 99,685 | ​ | ​ | (4,612) | ​ | ​ | 95,073
Investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | ​ | (15,046) | ​ | ​ | 4,612 | ​ | ​ | (10,434)
Net cash used in investing activities-continuing operations | ​ | ​ | (14,946) | ​ | ​ | 4,612 | ​ | ​ | (10,334)
Net cash used in investing activities | ​ | ​ | (14,946) | ​ | ​ | 4,612 | ​ | ​ | (10,334)
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | ​ | 9,217 | ​ | ​ | (3,130) | ​ | ​ | 6,087

​

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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended March 31, 2023
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to reconcile net income to net cash provided by operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation | ​ | $ | 31,618 | ​ | $ | (112) | ​ | $ | 31,506
Changes in assets and liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cloud computing implementation assets | ​ | ​ | — | ​ | ​ | (6,234) | ​ | ​ | (6,234)
Accounts payable | ​ | ​ | 12,286 | ​ | ​ | 1,483 | ​ | ​ | 13,769
Net cash provided by operating activities-continuing operations | ​ | ​ | 149,821 | ​ | ​ | (4,863) | ​ | ​ | 144,958
Net cash provided by operating activities | ​ | ​ | 149,417 | ​ | ​ | (4,863) | ​ | ​ | 144,554
Investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | ​ | (19,056) | ​ | ​ | 4,863 | ​ | ​ | (14,193)
Net cash provided by investing activities-continuing operations | ​ | ​ | 33,871 | ​ | ​ | 4,863 | ​ | ​ | 38,734
Net cash provided by investing activities | ​ | ​ | 30,697 | ​ | ​ | 4,863 | ​ | ​ | 35,560
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | ​ | 10,474 | ​ | ​ | (1,483) | ​ | ​ | 8,991

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Six Months Ended December 31, 2022
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Adjustments to reconcile net income to net cash provided by operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation | ​ | $ | 21,461 | ​ | $ | (34) | ​ | $ | 21,427
Changes in assets and liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cloud computing implementation assets | ​ | ​ | — | ​ | ​ | (3,275) | ​ | ​ | (3,275)
Accounts payable | ​ | ​ | 13,233 | ​ | ​ | 475 | ​ | ​ | 13,708
Net cash provided by operating activities-continuing operations | ​ | ​ | 42,277 | ​ | ​ | (2,834) | ​ | ​ | 39,443
Net cash provided by operating activities | ​ | ​ | 41,415 | ​ | ​ | (2,834) | ​ | ​ | 38,581
Investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | ​ | (9,747) | ​ | ​ | 2,834 | ​ | ​ | (6,913)
Net cash used in investing activities-continuing operations | ​ | ​ | (9,748) | ​ | ​ | 2,834 | ​ | ​ | (6,914)
Net cash used in investing activities | ​ | ​ | (12,922) | ​ | ​ | 2,834 | ​ | ​ | (10,088)
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | ​ | 5,209 | ​ | ​ | (475) | ​ | ​ | 4,734

​

​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2022
​ | ​ | As Reported | ​ | Adjustment | ​ | As Revised
Operating activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Changes in assets and liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cloud computing implementation assets | ​ | $ | — | ​ | $ | (416) | ​ | $ | (416)
Accounts payable | ​ | ​ | 8,711 | ​ | ​ | 243 | ​ | ​ | 8,954
Net cash provided by operating activities-continuing operations | ​ | ​ | 91,476 | ​ | ​ | (173) | ​ | ​ | 91,303
Net cash provided by operating activities | ​ | ​ | 91,346 | ​ | ​ | (173) | ​ | ​ | 91,173
Investing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Capital expenditures | ​ | ​ | (5,551) | ​ | ​ | 173 | ​ | ​ | (5,378)
Net cash used in investing activities-continuing operations | ​ | ​ | (5,503) | ​ | ​ | 173 | ​ | ​ | (5,330)
Net cash used in investing activities | ​ | ​ | (6,314) | ​ | ​ | 173 | ​ | ​ | (6,141)
Non-cash investing and financing activities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Accrued capital expenditures | ​ | ​ | 4,713 | ​ | ​ | (243) | ​ | ​ | 4,470

​

​

​

​

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on an evaluation of our disclosure controls and procedures (as such term is defined in Exchange Act Rule 13a-15(e)) that was conducted under the supervision and with the participation of Adtalem’s management, including our Chief Executive Officer and Chief Financial Officer, our Chief Executive Officer and Chief Financial Officer concluded that Adtalem’s disclosure controls and procedures were effective as of June 30, 2024.

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Management’s Annual Report on Internal Control over Financial Reporting

The management of Adtalem prepared and is responsible for the consolidated financial statements and all related financial information contained in this report. This responsibility includes establishing and maintaining adequate internal control over financial reporting, as defined by Rules 13a-15(f) of the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management regularly monitors our internal controls over financial reporting, and actions are taken to correct any deficiencies as they are identified.

As of June 30, 2024, Adtalem’s management has assessed the effectiveness of its internal control over financial reporting, using the criteria specified by the Committee of Sponsoring Organizations of the Treadway Commission’s 2013 report Internal Control — Integrated Framework. Based upon this assessment, Adtalem’s management concluded that as of June 30, 2024, Adtalem’s internal control over financial reporting was effective.

The effectiveness of Adtalem’s internal control over financial reporting as of June 30, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their attestation report included in Item 8. “Financial Statements and Supplementary Data” of this report.

Changes in Internal Control over Financial Reporting

There were no changes during the fourth quarter of fiscal year 2024 in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 9B. Other Information

During the quarter ended June 30, 2024, none of our directors or officers adopted, modified, or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

| (a) | Information Regarding Directors and Executive Officers. The information required by this Item 10 relating to directors and nominees for election to the Board of Directors is incorporated by reference to the Proxy Statement. The information required by this Item 10 with respect to our executive officers is set forth in “Information About Our Executive Officers” at the end of Part I of this Annual Report on Form 10-K.

| (b) | Compliance with Section 16(a) of the Exchange Act. If applicable, the information required by this Item 10 with respect to compliance with Section 16(a) of the Exchange Act contained under the caption “Delinquent Section 16(a) Reports” in the Proxy Statement is incorporated by reference to the Proxy Statement.

| (c) | Code of Business Conduct and Ethics. In accordance with the information required by this Item 10 relating to the code of ethics required by Item 406 of Regulation S-K, Adtalem has a Code of Conduct and Ethics, which applies to its directors, officers (including the Chief Executive Officer, the Chief Financial Officer, and the Chief Accounting Officer), and all other employees. The full text of the Code is available on Adtalem’s website. Adtalem

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|  | intends to satisfy the SEC’s requirements regarding amendments to, or waivers from, the Code by posting such information on its website.

| (d) | Procedures for Shareholders to Recommend Director Nominees. There have been no material changes to the procedures by which security holders may recommend nominees to our Board.

| (e) | Audit Committee Information. The information required by this Item 10 relating to Adtalem’s audit and finance committee financial experts and identification of the Adtalem’s audit committee is incorporated by reference to the Proxy Statement.

Item 11. Executive Compensation

The information required by this Item 11 regarding director and executive officer compensation, the Compensation Committee Report, the risks arising from our compensation policies and practices for employees, pay ratio disclosure, and compensation committee interlocks and insider participation is incorporated by reference to the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information contained under the heading “Voting Securities and Principal Holders” and “Executive Compensation Tables – Equity Compensation Plan Information” in the Proxy Statement is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item 13 is incorporated by reference to the Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information required by this Item 14 regarding fees we paid to our principal accountant and the pre-approval policies and procedures established by the Audit and Finance Committee of our Board contained under the headings “Audit Fees and Other Fees” and “Pre-Approval Policies” in the Proxy Statement is incorporated herein by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) The following documents are filed as part of this report:

1. | Financial Statements

Consolidated Financial Statements filed as part of this report are listed under Item 8. “Financial Statements and Supplementary Data.”

2. | Financial Statement Schedules

All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and accompanying notes included in this Form 10-K.

3. | Exhibits

Exhibit Number | ​ | Exhibit Description | ​ | Filed Herewith | ​ | Incorporated by Reference to:
--- | --- | --- | --- | --- | --- | ---
2.1 | ​ | Stock Purchase Agreement, by and between the Registrant and Cogswell Education, LLC, dated December 4, 2017 (the “Cogswell Agreement”) | ​ | ​ | ​ | Exhibit 2.1 to the Registrant’s Form 8-K dated December 4, 2017
2.2 | ​ | Amendment No. 1 to the Cogswell Agreement, dated August 2, 2018 | ​ | ​ | ​ | Exhibit 2.1 to the Registrant’s Form 8-K dated August 3, 2018

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Exhibit Number | ​ | Exhibit Description | ​ | Filed Herewith | ​ | Incorporated by Reference to:
--- | --- | --- | --- | --- | --- | ---
2.3 | ​ | Amendment No. 2 to the Cogswell Agreement dated as of December 11, 2018 | ​ | ​ | ​ | Exhibit 2.3 to the Registrant’s Form 8-K dated December 12, 2018
2.4 | ​ | Amendment No. 3 to the Cogswell Agreement, dated as of December 11, 2018 | ​ | ​ | ​ | Exhibit 2.4 to the Registrant’s Form 8-K dated December 12, 2018
2.5 | ​ | Membership Interest Purchase Agreement, by and between the Registrant and San Joaquin Valley College, Inc., dated June 28, 2018 | ​ | ​ | ​ | Exhibit 2.1 to the Registrant’s Form 8-K dated June 29, 2018
2.6 | ​ | Membership Interest Purchase Agreement by and between the Registrant and Laureate Education, Inc., dated as of September 11, 2020 | ​ | ​ | ​ | Exhibit 2.1 to the Registrant’s Form 8-K dated September 16, 2020
2.7 | ​ | Waiver and Amendment to Membership Interest Purchase Agreement by and between the Registrant and Laureate Education, Inc., dated as of July 21, 2021 | ​ | ​ | ​ | Exhibit 2.1 to the Registrant’s Form 8-K dated July 27, 2021
2.8 | ​ | Equity Purchase Agreement, by and among McKissock, LLC, Avalon Acquiror, Inc. and the Registrant, dated as of January 24, 2022 | ​ | ​ | ​ | Exhibit 2.1 to the Registrant’s Form 8-K dated January 25, 2022
2.9 | ​ | Equity Purchase Agreement Side Letter, by and among McKissock, LLC, Avalon Acquiror, Inc. and the Registrant, dated as of March 10, 2022 | ​ | ​ | ​ | Exhibit 2.2 to the Registrant’s Form 10-Q for the quarter ended March 31, 2022
3.1 | ​ | Restated Certificate of Incorporation of the Registrant, dated May 23, 2017 | ​ | ​ | ​ | Exhibit 3.2 to the Registrant’s Form 8-K dated May 22, 2017
3.2 | ​ | Amendment to Restated Certificate of Incorporation of the Registrant, dated November 8, 2023 | ​ | X | ​ |
3.3 | ​ | Amended and Restated By-Laws of the Registrant, as amended November 27, 2023 | ​ | ​ | ​ | Exhibit 3.1 to the Registrant’s Form 8-K dated November 29, 2023
4.1 | ​ | Description of Registrant’s Securities | ​ | X | ​ | ​
4.2 | ​ | Indenture, dated as of March 1, 2021, by and between Adtalem Escrow Corporation, as predecessor to the Registrant, as issuer, the parties that are signatories thereto as Subsidiary Guarantors, as subsidiary guarantors, and U.S. Bank National Association, as trustee and notes collateral agent (the “Note Indenture”) (which Note Indenture includes as Exhibit A, the Form of 5.500% Senior Notes due 2028) | ​ | ​ | ​ | Exhibit 4.1 to the Registrant’s Form 8-K dated March 1, 2021
4.3 | ​ | Supplemental Indenture, dated as of August 12, 2021, by and between the Registrant, as issuer, the parties that are signatories thereto as Subsidiary Guarantors, as subsidiary guarantors, and U.S. Bank National Association, as trustee and notes collateral agent, pursuant to which Registrant assumed the obligations of Adtalem Escrow Corporation under the Note Indenture | ​ | ​ | ​ | Exhibit 4.2 to the Registrant’s Form 8-K dated August 12, 2021
4.4 | ​ | Credit Agreement, dated as of August 12, 2021, by and between the Registrant, as borrower, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent and collateral agent (the “Credit Agreement”) | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8-K dated August 12, 2021
4.5 | ​ | Amendment No. 1 to Credit Agreement | ​ | ​ | ​ | Exhibit 4(e) to the Registrant’s Form 10-K for the year ended June 30, 2023
4.6 | ​ | Amendment No. 2 to Credit Agreement | ​ | ​ | ​ | Exhibit 4(a) to the Registrant’s Form 10-Q for the quarter ended March 31, 2024

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Exhibit Number | ​ | Exhibit Description | ​ | Filed Herewith | ​ | Incorporated by Reference to:
--- | --- | --- | --- | --- | --- | ---
10.1* | ​ | Registrant’s Fourth Amended and Restated Incentive Plan of 2013 | ​ | ​ | ​ | Exhibit 10(f) to the Registrant’s Form 10-Q for the quarter ended September 30, 2022
10.2* | ​ | Registrant’s Nonqualified Deferred Compensation Plan | ​ | ​ | ​ | Exhibit 4.3 to the Registrant’s Form S-8 dated August 27, 2014
10.3* | ​ | Registrant’s Retirement Plan | ​ | ​ | ​ | Exhibit 10(d) to the Registrant’s Form 10-K for the year ended June 30, 2022
10.4* | ​ | Amendment One to the Registrant’s Retirement Plan | ​ | ​ | ​ | Exhibit 10(e) to the Registrant’s Form 10-K for the year ended June 30, 2022
10.5* | ​ | Amendment Two to the Registrant’s Retirement Plan | ​ | ​ | ​ | Exhibit 10(f) to the Registrant’s Form 10-K for the year ended June 30, 2022
10.6* | ​ | Amendment Three to the Registrant’s Retirement Plan | ​ | ​ | ​ | Exhibit 10(g) to the Registrant’s Form 10-K for the year ended June 30, 2022
10.7* | ​ | Form of Nonqualified Stock Option Agreement for Executive Officers | ​ | ​ | ​ | Exhibit 10(o) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.8* | ​ | Form of Nonqualified Stock Option Agreement for Employees | ​ | ​ | ​ | Exhibit 10(p) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.9* | ​ | Form of Incentive Stock Option Agreement for Executive Officers | ​ | ​ | ​ | Exhibit 10(q) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.10* | ​ | Form of Incentive Stock Option Agreement for Employees | ​ | ​ | ​ | Exhibit 10(r) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.11* | ​ | Form of Full Value Share Award Agreement for Executive Officers | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8-K dated May 8, 2014
10.12* | ​ | Form of Full Value Share Award Agreement for Directors | ​ | ​ | ​ | Exhibit 10(t) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.13* | ​ | Form of Full Value Share Award Agreement for Employees | ​ | ​ | ​ | Exhibit 10(u) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.14* | ​ | Form of Performance Share Award Agreement for Executive Officers | ​ | ​ | ​ | Exhibit 10(v) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.15* | ​ | Form of Performance Share Award Agreement for Employees | ​ | ​ | ​ | Exhibit 10(w) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.16* | ​ | Form of Restricted Cash Award Agreement for Employees | ​ | ​ | ​ | Exhibit 10(x) to the Registrant’s Form 10-K for the year ended June 30, 2014
10.17* | ​ | Form of Nonqualified Stock Option Award Agreement for Executive Officers (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(a) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021
10.18* | ​ | Form of Incentive Stock Option Award Agreement for Executive Officers (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(b) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021

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Exhibit Number | ​ | Exhibit Description | ​ | Filed Herewith | ​ | Incorporated by Reference to:
--- | --- | --- | --- | --- | --- | ---
10.19* | ​ | Form of Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(c) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021
10.20* | ​ | Form of Restricted Stock Unit Award Agreement for Directors (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(d) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021
10.21* | ​ | Form of Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(e) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021
10.22* | ​ | Form of Performance-Based Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(f) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021
10.23* | ​ | Form of Performance-Based Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(g) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021
10.24* | ​ | Form of Restricted Cash Award Agreement for Employees (for awards granted in fiscal year 2022) | ​ | ​ | ​ | Exhibit 10(h) to the Registrant’s Form 10-Q for the quarter ended September 30, 2021
10.25* | ​ | Form of Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2023) | ​ | ​ | ​ | Exhibit 10(a) to the Registrant’s Form 10-Q for the quarter ended September 30, 2022
10.26* | ​ | Form of Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2023) | ​ | ​ | ​ | Exhibit 10(b) to the Registrant’s Form 10-Q for the quarter ended September 30, 2022
10.27* | ​ | Form of Performance-Based Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2023) | ​ | ​ | ​ | Exhibit 10(c) to the Registrant’s Form 10-Q for the quarter ended September 30, 2022
10.28* | ​ | Form of Performance-Based Restricted Stock Unit Award Agreement for Employees (for awards granted in fiscal year 2023) | ​ | ​ | ​ | Exhibit 10(d) to the Registrant’s Form 10-Q for the quarter ended September 30, 2022
10.29* | ​ | Form of Restricted Cash Award Agreement for Employees (for awards granted in fiscal year 2023) | ​ | ​ | ​ | Exhibit 10(e) to the Registrant’s Form 10-Q for the quarter ended September 30, 2022
10.30* | ​ | Form of Performance-Based Restricted Stock Unit Award Agreement for Executive Officers (for awards granted in fiscal year 2024) | ​ | ​ | ​ | Exhibit 10(a) to the Registrant’s Form 10-Q for the quarter ended December 31, 2023
10.31* | ​ | Form of Indemnification Agreement between the Registrant and its Directors | ​ | ​ | ​ | Exhibit 10(f) to the Registrant’s Form 10-K for the year ended June 30, 2010
10.32* | ​ | Executive Employment Agreement between the Registrant and Gregory S. Davis, dated July 7, 2016 | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8-K dated January 1, 2017
10.33* | ​ | Executive Employment Agreement between the Registrant and Steven Riehs, dated May 17, 2013 | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8-K dated May 22, 2013
10.34* | ​ | Executive Employment Agreement between the Registrant and Donna N. Jennings-Howell, dated October 12, 2009 | ​ | ​ | ​ | Exhibit 10(jj) to the Registrant’s Form 10-K for the year ended June 30, 2018
10.35* | ​ | Executive Employment Agreement between the Registrant and Michael O. Randolfi | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8-K dated August 27, 2019
10.36* | ​ | Executive Employment Agreement between the Registrant and Karen S. Cox, dated June 15, 2018 | ​ | ​ | ​ | Exhibit 10(nn) to the Registrant’s Form 10-K for the year ended June 30, 2020

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Exhibit Number | ​ | Exhibit Description | ​ | Filed Herewith | ​ | Incorporated by Reference to:
--- | --- | --- | --- | --- | --- | ---
10.37* | ​ | Executive Employment Agreement between the Registrant and Douglas G. Beck, dated May 6, 2021 | ​ | ​ | ​ | Exhibit 10(gg) to the Registrant’s Form 10-K for the year ended June 30, 2021
10.38* | ​ | Executive Employment Agreement effective September 8, 2021, between the Registrant and Stephen W. Beard | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8-K dated August 6, 2021
10.39* | ​ | Executive Employment Agreement effective October 18, 2021, between the Registrant and Robert J. Phelan | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8-K dated November 15, 2021
10.40* | ​ | Separation Agreement and Release dated April 10, 2024 between the Registrant and Dr. John Danaher | ​ | ​ | ​ | Exhibit 10.1 to the Registrant’s Form 8K/A dated September 6, 2023
10.41* | ​ | Executive Employment Agreement between the Registrant and Maurice Herrera | ​ | ​ | ​ | Exhibit 10(qq) to the Registrant’s Form 10-K for the year ended June 30, 2022
10.42* | ​ | Executive Employment Agreement between the Registrant and Steven Tom | ​ | ​ | ​ | Exhibit 10(rr) to the Registrant’s Form 10-K for the year ended June 30, 2023
10.43* | ​ | Executive Employment Agreement between the Registrant and Michael Betz | ​ | X | ​ | ​
19.1 | ​ | Insider Trading Policy | ​ | X | ​ | ​
21.1 | ​ | Subsidiaries of the Registrant | ​ | X | ​ | ​
23.1 | ​ | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm | ​ | X | ​ | ​
31.1** | ​ | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended | ​ | X | ​ | ​
31.2** | ​ | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended | ​ | X | ​ | ​
32.1** | ​ | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ​ | X | ​ | ​
97.1 | ​ | Incentive Compensation Recovery Policy | ​ | X | ​ | ​
101.INS | ​ | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ​ | X | ​ | ​
101.SCH | ​ | Inline XBRL Taxonomy Extension Schema Document | ​ | X | ​ | ​
101.CAL | ​ | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ​ | X | ​ | ​
101.DEF | ​ | Inline XBRL Taxonomy Extension Definition Linkbase Document | ​ | X | ​ | ​
101.LAB | ​ | Inline XBRL Taxonomy Extension Label Linkbase Document | ​ | X | ​ | ​
101.PRE | ​ | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ​ | X | ​ | ​
104 | ​ | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ​ | ​ | ​ | ​

* Designates management contracts and compensatory plans or arrangements.

** Filed or furnished herewith.

Item 16. Form 10-K Summary

None

​

​

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

| ​ | ​
​ | Adtalem Global Education Inc.
| ​ | ​
Date: August 6, 2024 | By: | /s/ Robert J. Phelan
​ | ​ | Robert J. Phelan
​ | ​ | Senior Vice President and Chief Financial Officer
​ | ​ | (Principal Financial Officer)

​

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature | ​ | Title | ​ | Date
/s/ Stephen W. Beard | ​ | President and Chief Executive Officer | ​ | August 6, 2024
Stephen W. Beard | ​ | (Principal Executive Officer) | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Robert J. Phelan | ​ | Senior Vice President and Chief Financial Officer | ​ | August 6, 2024
Robert J. Phelan | ​ | (Principal Financial Officer) | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Manjunath Gangadharan | ​ | Vice President and Chief Accounting Officer | ​ | August 6, 2024
Manjunath Gangadharan | ​ | (Principal Accounting Officer) | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Michael W. Malafronte | ​ | Chairman of the Board | ​ | August 6, 2024
Michael W. Malafronte | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ William W. Burke | ​ | Director | ​ | August 6, 2024
William W. Burke | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Mayur Gupta | ​ | Director | ​ | August 6, 2024
Mayur Gupta | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Donna J. Hrinak | ​ | Director | ​ | August 6, 2024
Donna J. Hrinak | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Georgette Kiser | ​ | Director | ​ | August 6, 2024
Georgette Kiser | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ William Krehbiel | ​ | Director | ​ | August 6, 2024
William Krehbiel | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Sharon O’Keefe | ​ | Director | ​ | August 6, 2024
Sharon O’Keefe | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Kenneth J. Phelan | ​ | Director | ​ | August 6, 2024
Kenneth J. Phelan | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Betty Vandenbosch | ​ | Director | ​ | August 6, 2024
Betty Vandenbosch | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​
/s/ Lisa W. Wardell | ​ | Director | ​ | August 6, 2024
Lisa W. Wardell | ​ | ​ | ​ | ​

​

​

​

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