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Leases

12 Months Ended

Jun. 30, 2025

11. 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 August 2040, 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 finance 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.

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


	Year Ended June 30,
	2025		2024		2023
Operating lease cost	$	45,942	$	44,365	$	48,181
Sublease income		(5,315)		(9,107)		(13,329)
Total lease cost	$	40,627	$	35,258	$	34,852

Maturities of lease liabilities as of June 30, 2025 were as follows (in thousands):


	Operating
Fiscal Year	Leases
2026	$	49,747
2027		49,516
2028		44,941
2029		36,607
2030		33,720
Thereafter		130,941
Total lease payments		345,472
Less: lease incentives not yet received		(24,572)
Less: imputed interest		(99,569)
Present value of lease liabilities	$	221,331

Lease term and discount rate were as follows:


	June 30, 2025
Weighted-average remaining operating lease term (years)		7.6
Weighted-average operating lease discount rate		7.6%

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


	Year Ended June 30,
	2025		2024		2023
Cash paid for amounts in the measurement of operating lease liabilities (net of sublease receipts)	$	35,975	$	41,063	$	58,198
Operating lease assets obtained in exchange for operating lease liabilities	$	46,982	$	34,719	$	32,476

Adtalem has an agreement at one of its operating lease locations to sublease the space to a third party that expires in 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, 2025, was as follows (in thousands):


Fiscal Year	Amount
2026	$	2,038
Total sublease rental income	$	2,038