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Leases

3 Months Ended

Sep. 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 December 2042, 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 assets represent our right to use an underlying asset during the lease term. Operating lease liabilities represent our obligation to make lease payments arising from the lease. 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 September 30, 2025, we entered into one additional operating lease that has not yet commenced. The lease is expected to commence during the fourth quarter of fiscal year 2026, has a 16-year lease term, and will result in an additional operating lease asset and operating lease liability of approximately $4.1 million.

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


	Three Months Ended
	September 30,
	2025		2024
Operating lease cost	$	12,347	$	10,731
Sublease income		(1,072)		(1,496)
Total lease cost	$	11,275	$	9,235

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


	Operating
Fiscal Year	Leases
2026 (remaining)	$	36,536
2027		49,387
2028		45,377
2029		37,074
2030		34,537
Thereafter		159,111
Total lease payments		362,022
Less: lease incentives not yet received		(27,725)
Less: imputed interest		(111,499)
Present value of lease liabilities	$	222,798

Lease term and discount rate were as follows:


	September 30,
	2025
Weighted-average remaining operating lease term (years)		8.2
Weighted-average operating lease discount rate		7.7%

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


	Three Months Ended
	September 30,
	2025		2024
Cash paid for amounts in the measurement of operating lease liabilities (net of sublease and lease incentive receipts)	$	7,843	$	9,381
Operating lease assets obtained in exchange for operating lease liabilities	$	5,784	$	2,114

Adtalem has entered into a sublease with a third party for one of its leased locations 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 September 30, 2025 was as follows (in thousands):


Fiscal Year	Amount
2026 (remaining)	$	976
Total sublease rental income	$	976