Vocational education Universal Technical Institute (NYSE: UTI) announced better-than-expected revenue in Q4 CY2025, with sales up 9.6% year on year to $220.8 million. The company expects the full year’s revenue to be around $910 million, close to analysts’ estimates. Its GAAP profit of $0.23 per share was 66.3% above analysts’ consensus estimates.
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Universal Technical Institute (UTI) Q4 CY2025 Highlights:
- Revenue: $220.8 million vs analyst estimates of $217.5 million (9.6% year-on-year growth, 1.6% beat)
- EPS (GAAP): $0.23 vs analyst estimates of $0.14 (66.3% beat)
- Adjusted EBITDA: $27.15 million vs analyst estimates of $23.94 million (12.3% margin, 13.4% beat)
- The company reconfirmed its revenue guidance for the full year of $910 million at the midpoint
- EBITDA guidance for the full year is $116.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 7.1%, down from 13.6% in the same quarter last year
- Free Cash Flow was -$19.16 million, down from $19.62 million in the same quarter last year
- New Students: 5,449, up 136 year on year
- Market Capitalization: $1.57 billion
"We entered the year on strong operational and financial footing, and the first quarter tracked in line with our plans and exceeded our expectations for disciplined execution on our North Star strategy," said Jerome Grant, CEO of Universal Technical Institute, Inc.
Company Overview
Founded in 1965, Universal Technical Institute (NYSE: UTI) is a leading provider of technical training programs, specializing in automotive, diesel, collision repair, motorcycle, and marine technicians.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Universal Technical Institute grew its sales at a 24.2% annual rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Universal Technical Institute’s recent performance shows its demand has slowed as its annualized revenue growth of 13.6% over the last two years was below its five-year trend. 
Universal Technical Institute also discloses its number of new students, which reached 5,449 in the latest quarter. Over the last two years, Universal Technical Institute’s new students averaged 11% year-on-year growth. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen. 
This quarter, Universal Technical Institute reported year-on-year revenue growth of 9.6%, and its $220.8 million of revenue exceeded Wall Street’s estimates by 1.6%.
Looking ahead, sell-side analysts expect revenue to grow 8.8% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Universal Technical Institute’s operating margin has shrunk over the last 12 months and averaged 8.9% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.
In Q4, Universal Technical Institute generated an operating margin profit margin of 7.1%, down 6.5 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Universal Technical Institute’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.
In Q4, Universal Technical Institute reported EPS of $0.23, down from $0.40 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Universal Technical Institute’s full-year EPS of $0.97 to shrink by 16.7%.
Key Takeaways from Universal Technical Institute’s Q4 Results
It was good to see Universal Technical Institute beat analysts’ EPS expectations this quarter. We were also glad its EBITDA outperformed Wall Street’s estimates. On the other hand, its number of new students missed. Overall, this print had some key positives. The stock remained flat at $27.89 immediately after reporting.
So do we think Universal Technical Institute is an attractive buy at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
