Covista (CVSA) Baird 2024 Global Consumer, Technology & Services Conference summary

Company Overview and Market Positioning

• Focuses on healthcare education through five post-secondary institutions, including the largest nursing school and the third-largest online nursing school in the U.S., serving over 85,000 students across 27 campuses and robust online platforms.

• Approximately 90-95% of enrollment is in healthcare-related programs, with 95% of programs delivered online and physical campuses in 17 states and the Caribbean.

• Maintains clinical relationships with major U.S. healthcare providers, supporting workforce needs.

• Holds a unique position as the only nationally scaled platform in healthcare education, benefiting from regulatory and accreditation barriers.

• Emphasizes a purpose-driven approach focused on student and societal outcomes, with a strategy to deliver long-term growth and shareholder value.

Growth Strategy and Operational Performance

• Achieved precedent-setting enrollment growth across all institutions and programs, with Q3 2024 total enrollment growth of 7.8% year-over-year.

• Projects consistent mid-single-digit revenue growth and 100 basis points of annual margin expansion.

• Early investments in brand campaigns, student persistence tools, and flexible learning modalities have led to lower enrollment costs, record student retention, and improved outcomes for working adults and diverse populations.

• Integration of Walden University catalyzed a new operating model, centralizing key capabilities and capturing synergies to enhance profitability and free cash flow.

• Plans to optimize pricing, launch new programs (e.g., physician assistant, competency-based learning), expand specialty nursing curricula, and pursue geographic expansion and new campus launches.

Competitive and Regulatory Landscape

• Post-COVID normalization has benefited enrollment trends, with market-responsive programs driving growth.

• Portfolio transition to healthcare-centric institutions enables operational synergies, such as unified platforms and cross-institutional faculty.

• Regulatory risks are limited; gainful employment exposure is mainly theoretical and confined to the veterinary school, with mitigation strategies in place.

• Ross Med's 90/10 ratio is expected to improve through renewed international recruitment.

• NCLEX pass rates rebounded above 80% after a COVID-driven dip, supporting enrollment cap removals.