The company also disclosed that CFO Robert Phelan plans to retire after nearly seven years, with a successor search under way. Phelan will remain in the role until a replacement is named.
Enrollment growth supported the quarter. Management linked demand to health-care staffing needs and said capacity, rather than interest, was the main constraint. Chamberlain’s Cincinnati campus opened in August, Salt Lake City began classes during the quarter, and Nashville was expected to open in January. Covista also opened its second physician-assistant program in Phoenix at full capacity and said a third location was being developed.
The company is using employer partnerships and capital spending to expand capacity. A collaboration with Advocate Health began in Wisconsin, while a partnership with SSM Health exceeded expectations and led to higher enrollment targets. Covista said it would continue investing in campuses before enrollment builds. It ended the quarter with $222 million in cash and net leverage of 0. 5 times, and repriced its $510 million term loan to SOFR plus 2%.
Management cautioned that first-quarter margin performance should not be projected across the year. It reiterated a full-year adjusted margin improvement expectation of up to 50 basis points, compared with the 140-basis-point gain in the quarter. Walden’s academic calendar will shift one week from the second quarter into the third compared with the prior year, making second-quarter growth lower and third-quarter growth higher without changing the full-year outlook. Covista also expects higher capital expenditures and a higher adjusted effective tax rate in fiscal 2027.
Beard said some Medical and Veterinary families delay enrollment while evaluating how to finance the full four-year journey, with consumer education planned over the next several enrollment cycles. He also described the shift toward AI search as a real structural change but said the company had not seen meaningful pressure in inquiries, applications or new enrollment. Covista is monitoring its visibility and sentiment in large-language-model results as it pursues its Purpose at Scale strategy. The higher guidance therefore arrives alongside continued expansion costs, timing effects at Walden and a pending finance-leadership transition.