Universal Technical Institute Q3 Earnings Call Highlights

Universal Technical Institute Q3 Earnings Call Highlights

Third-quarter results improved: Revenue rose 7.2% year over year to $218.9 million, while average active students increased 5.8% and new starts climbed 10.9% to 6,342. Concorde revenue grew 11.1%, and UTI starts increased 23%. Fiscal 2026 guidance was reduced because UTI’s high school auto-diesel starts are tracking below expectations and students are shifting faster toward shorter skilled-trades programs, which generate less revenue and profit per student. Management attributed about 70% of the baseline adjusted EBITDA reduction to the high school shortfall and 30% to the program mix shift. Expansion remains a long-term focus: UTI plans additional campuses in Salt Lake City, Houston and Phoenix, raised expected fiscal-year capital spending to about $110 million, and reiterated its fiscal 2029 targets of more than $1.2 billion in revenue and adjusted EBITDA approaching $220 million.

Universal Technical Institute NYSE: UTI reported higher third-quarter revenue, student enrollment and new student starts, while lowering its fiscal 2026 outlook to reflect softer-than-expected fourth-quarter starts from its UTI division’s high school channel and a faster-than-anticipated shift toward shorter skilled-trades programs. Revenue rose 7.2% year over year to $218.9 million in the fiscal third quarter, supported by enrollment growth across the company’s UTI and Concorde divisions. Consolidated net income was $2.3 million, or $0.04 per diluted share. Baseline adjusted EBITDA totaled $27.2 million, while reported adjusted EBITDA was $18.2 million after $9 million of strategic growth investments.

“The third quarter was another strong quarter for Universal Technical Institute and reinforces our confidence in both the environment for job demand for our students as well as student interest in our program offerings,” CEO Jerome Grant said.

Enrollment Growth Led by UTI Starts Total average full-time active students increased 5.8% to 25,131, while new student starts rose 10.9% to 6,342. The UTI division drove much of the starts increase, with starts up 23% year over year, according to Grant. UTI average active students increased 4%, while Concorde average active students increased 8.5%, helped by demand in dental programs. Concorde starts were softer during the quarter because of fewer clinical starts compared with the prior-year period, CFO Bruce Schuman said. He noted that start timing can vary based on academic calendars and program cohort schedules and that the effect had been included in the company’s prior outlook. Concorde revenue increased 11.1% to $80.9 million, while UTI revenue rose 5% to $138 million.

Management cited continued employer shortages across transportation, skilled trades and healthcare occupations. Grant said job openings listed on UTI campus job boards for automotive and diesel technicians exceed the number of graduates the company produces by more than two times. He also cited momentum in programs for electricians, HVACR technicians, welders, industrial maintenance professionals and radiology technicians.

High School Execution and Program Mix Pressure Outlook Despite strong lead generation, UTI’s fourth-quarter high school starts, which are primarily tied to automotive and diesel programs, are tracking below the company’s initial expectations. Grant said UTI lead flow is up more than 15% year over year, but the company did not reach all prospective students because it did not have enough admissions representatives in the field. “It’s not a capacity issue,” Grant said in response to an analyst question. “Frankly, it was an execution issue in terms of the number of reps we had in the field on a persistent basis.”