Latest news with #StrategicEducationInc
Globe and Mail
30-07-2025
- Business
- Globe and Mail
Strategic Education, Inc. Reports Second Quarter 2025 Results
Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended June 30, 2025. Three Months Ended June 30 Revenue increased 2.9% to $321.5 million compared to $312.3 million for the same period in 2024, driven by strength within the Education Technology Services segment. Revenue on a constant currency basis, which is a non-GAAP financial measure, increased 3.6% to $323.5 million in the second quarter of 2025 compared to $312.3 million for the same period in 2024. For more details on non-GAAP financial measures used in this press release, refer to the information in the Non-GAAP Financial Measures section of this press release. Income from operations was $45.8 million or 14.2% of revenue, compared to $41.9 million or 13.4% of revenue for the same period in 2024. Adjusted income from operations on a constant currency basis, which is a non-GAAP financial measure, was $49.1 million compared to $43.9 million for the same period in 2024. The adjusted operating income margin on a constant currency basis, which is a non-GAAP financial measure, was 15.2% compared to 14.1% for the same period in 2024. Net income was $32.3 million compared to $29.9 million for the same period in 2024. Adjusted net income on a constant currency basis, which is a non-GAAP financial measure, was $36.2 million compared to $32.3 million for the same period in 2024. Adjusted EBITDA, which is a non-GAAP financial measure, was $68.3 million compared to $63.3 million for the same period in 2024. Diluted earnings per share was $1.37 compared to $1.24 for the same period in 2024. Adjusted diluted earnings per share on a constant currency basis, which is a non-GAAP financial measure, increased to $1.54 from $1.33 for the same period in 2024. Diluted weighted average shares outstanding decreased to 23,516,000 from 24,179,000 for the same period in 2024. During the three months ended June 30, 2025, the Company repurchased 325,844 shares of common stock for $28.0 million, and has repurchased 717,146 shares for $60.0 million through the first six months of 2025. Education Technology Services Segment Highlights The Education Technology Services segment (ETS) is comprised primarily of Enterprise Partnerships, Sophia Learning, and Workforce Edge. For the second quarter, average total subscribers at Sophia Learning increased approximately 40% from the same period in 2024, and Sophia Learning revenue increased 39.8% to $16.4 million compared to $11.7 million for the same period in 2024. As of June 30, 2025, Workforce Edge had a total of 80 corporate agreements, collectively employing approximately 3,870,000 employees. ETS revenue increased 49.6% to $36.7 million in the second quarter of 2025 compared to $24.5 million for the same period in 2024, driven by growth in Sophia Learning subscriptions, higher employer affiliated enrollment, and revenue from new Workforce Edge employer partnerships. ETS income from operations was $15.0 million in the second quarter of 2025 compared to $10.0 million for the same period in 2024. The operating income margin was 41.0% compared to 40.9% for the same period in 2024. U.S. Higher Education Segment Highlights The U.S. Higher Education segment (USHE) is comprised of Capella University and Strayer University. For the second quarter, student enrollment within USHE decreased 0.8% to 86,339 compared to 87,077 for the same period in 2024. Our ongoing focus on employers is generating consistent growth in employer affiliated enrollment, but in the second quarter was again offset by a decline in unaffiliated enrollment. Employer affiliated enrollment in the second quarter hit a new all-time high of 31.8% of USHE enrollment, up from 29.3% during the same period in 2024. USHE's healthcare portfolio generated strong total enrollment growth during the second quarter, increasing 8% from the same period in 2024 and now comprises 47% of USHE total enrollment compared to 43% for the same period in 2024. Of USHE's total healthcare enrollment, approximately 37% is from employer partners. For the second quarter, FlexPath enrollment was 23% of USHE enrollment compared to 22% for the same period in 2024. Healthcare programs comprise 76% of FlexPath enrollment. Revenue decreased 0.5% to $215.6 million in the second quarter of 2025 compared to $216.6 million for the same period in 2024, driven by lower second quarter student enrollment. Income from operations was $20.8 million in the second quarter of 2025 compared to $19.8 million for the same period in 2024. The operating income margin was 9.6% compared to 9.2% for the same period in 2024. Australia/New Zealand Segment Highlights The Australia/New Zealand segment (ANZ) is comprised of Torrens University, Think Education, and Media Design School. For the second quarter, student enrollment within ANZ decreased 3.1% to 18,524 compared to 19,113 for the same period in 2024. Lower international enrollment, resulting from regulatory changes in Australia, was partially offset by progress growing domestic enrollment, which is expected to be a bigger driver of future growth. Revenue decreased 2.8% to $69.1 million in the second quarter of 2025 compared to $71.1 million for the same period in 2024, driven by lower second quarter student enrollment. Revenue on a constant currency basis, which is a non-GAAP financial measure, increased slightly to $71.2 million in the second quarter of 2025 compared to $71.1 million for the same period in 2024, driven by higher second quarter revenue per student. Income from operations was $12.8 million in the second quarter of 2025 compared to $14.1 million for the same period in 2024. The operating income margin was 18.4% compared to 19.8% for the same period in 2024. Income from operations on a constant currency basis, which is a non-GAAP financial measure, was $13.3 million in the second quarter of 2025 compared to $14.1 million for the same period in 2024. The operating income margin on a constant currency basis, which is a non-GAAP financial measure, was 18.6% compared to 19.8% for the same period in 2024. BALANCE SHEET AND CASH FLOW At June 30, 2025, Strategic Education had cash, cash equivalents, and marketable securities of $179.9 million and no debt outstanding under its revolving credit facility. For the first six months of 2025, cash provided by operations was $98.9 million compared to $101.9 million for the same period in 2024. Capital expenditures for the first six months of 2025 were $21.2 million compared to $19.9 million for the same period in 2024. Capital expenditures including cloud computing investments, which flow through operating cash flow within other assets, for the first six months of 2025 were $29.7 million compared to $25.9 million for the same period in 2024. Free cash flow for the first six months of 2025, which is a non-GAAP financial measure, was $77.7 million compared to $82.0 million for the same period in 2024. For the second quarter of 2025, consolidated bad debt expense as a percentage of revenue was 4.0% compared to 4.3% of revenue for the same period in 2024. COMMON STOCK CASH DIVIDEND Strategic Education announced today that it declared a regular, quarterly cash dividend of $0.60 per share of common stock. This dividend will be paid on September 15, 2025 to shareholders of record as of September 5, 2025. Strategic Education will host a conference call to discuss its second quarter 2025 results at 10:00 a.m. (ET) today. This call will be available via webcast. To access the live webcast of the conference call, please go to in the Investor Relations section 15 minutes prior to the start time of the call to register. An earnings release presentation will also be posted to in the Investor Relations section. Following the call, the webcast will be archived and available at in the Investor Relations section. To participate in the live call, investors should register here prior to the call to receive dial-in information and a PIN. About Strategic Education, Inc. Strategic Education, Inc. (NASDAQ: STRA) ( is dedicated to helping advance economic mobility through higher education. We primarily serve working adult students globally through our core focus areas: 1) Education Technology Services, developing and maintaining relationships with employers to build education benefits programs providing employees access to affordable and industry-relevant training, certificate, and degree programs, including through Workforce Edge, a full-service education benefits administration solution for employers, and Sophia Learning, which offers low-cost online general education-level courses that are ACE-recommended for college credit; 2) U.S. Higher Education, including Capella University and Strayer University, each institutionally accredited, and collectively offer flexible and affordable associate, bachelor's, master's, and doctoral programs including the Jack Welch Management Institute at Strayer University, and non-degree web and mobile application development courses through Strayer University's Hackbright Academy and Devmountain; and 3) Australia/New Zealand, comprised of Torrens University, Think Education, and Media Design School that collectively offer certificate and degree programs in Australia and New Zealand. This portfolio of high quality, innovative, relevant, and affordable programs and institutions helps our students prepare for success in today's workforce and find a path to bettering their lives. Forward-Looking Statements This communication contains certain 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as 'expect,' 'estimate,' 'assume,' 'believe,' 'anticipate,' 'may,' 'will,' 'forecast,' 'outlook,' 'plan,' 'project,' 'potential' and other similar words, and include all statements that are not historical facts, including with respect to, among other things, the future financial performance and growth opportunities of Strategic Education; Strategic Education's plans, strategies and prospects; and future events and expectations. The statements are based on Strategic Education's current expectations and are subject to a number of assumptions, uncertainties and risks, including but not limited to: the pace of student enrollment; Strategic Education's continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as other federal laws and regulations, institutional accreditation standards and state regulatory requirements; legislation and other actions by the U.S. Congress, actions by the current administration, rulemaking and other action by the Department of Education or other governmental entities, including without limitation action related to Title IV programs, Department of Education staffing levels, borrower defense to repayment applications, gainful employment or similar measures, 90/10, increased focus by governmental entities on for-profit education institutions, and including actions by governmental entities in Australia and New Zealand; competitive factors; risks associated with the opening of new campuses; risks associated with the offering of new educational programs and adapting to other changes; risks associated with the acquisition of existing educational institutions, including Strategic Education's acquisition of Torrens University and associated assets in Australia and New Zealand; the risk that the benefits of the acquisition of Torrens University and associated assets in Australia and New Zealand may not be fully realized or may take longer to realize than expected; the risk that the acquisition of Torrens University and associated assets in Australia and New Zealand may not advance Strategic Education's business strategy and growth strategy; risks relating to the timing of regulatory approvals; Strategic Education's ability to implement its growth strategy; the risk that the combined company may experience difficulty integrating employees or operations; risks associated with the ability of Strategic Education's students to finance their education in a timely manner; general economic and market conditions; and additional factors described in Strategic Education's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Many of these risks, uncertainties and assumptions are beyond Strategic Education's ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, these forward-looking statements speak only as of the information currently available to Strategic Education on the date they are made, and Strategic Education undertakes no obligation to update or revise forward-looking statements, except as required by law. Actual results may differ materially from those projected in the forward-looking statements. December 31, 2024 June 30, 2 025 ASSETS Current assets: Cash and cash equivalents $ 137,074 $ 133,600 Marketable securities 46,949 31,350 Tuition receivable, net 76,127 97,878 Income taxes receivable — 762 Other current assets 44,793 56,353 Total current assets 304,943 319,943 Property and equipment, net 111,247 111,027 Right-of-use lease assets 103,673 100,049 Marketable securities, non-current 14,981 14,986 Intangible assets 245,098 248,172 Goodwill 1,206,883 1,231,105 Other assets 62,910 66,241 Total assets $ 2,049,735 $ 2,091,523 LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 101,749 $ 99,189 Income taxes payable 2,926 — Contract liabilities 89,563 135,179 Lease liabilities 22,222 20,112 Total current liabilities 216,460 254,480 Deferred income tax liabilities 27,586 27,925 Lease liabilities, non-current 103,004 100,190 Other long-term liabilities 40,186 42,211 Total liabilities 387,236 424,806 Commitments and contingencies Stockholders' equity: Common stock, par value $0.01; 32,000,000 shares authorized; 24,502,385 and 23,948,762 shares issued and outstanding at December 31, 2024 and June 30, 2025, respectively 245 239 Additional paid-in capital 1,532,414 1,489,271 Accumulated other comprehensive loss (88,565 ) (58,869 ) Retained earnings 218,405 236,076 Total stockholders' equity 1,662,499 1,666,717 Total liabilities and stockholders' equity $ 2,049,735 $ 2,091,523 For the six months ended June 30, 2024 2025 Cash flows from operating activities: Net income $ 59,600 $ 62,075 Adjustments to reconcile net income to net cash provided by operating activities: Gain on early termination of operating leases, net (6,166 ) — Amortization of deferred financing costs 280 212 Amortization of investment discount/premium (40 ) (140 ) Depreciation and amortization 22,227 23,198 Deferred income taxes (593 ) (4 ) Stock-based compensation 11,902 11,327 Impairment of right-of-use lease assets — 802 Changes in assets and liabilities: Tuition receivable, net (13,247 ) (20,398 ) Other assets (12,663 ) (13,007 ) Accounts payable and accrued expenses 759 (3,643 ) Income taxes payable and income taxes receivable 74 (3,785 ) Contract liabilities 41,353 44,861 Other liabilities (1,551 ) (2,634 ) Net cash provided by operating activities 101,935 98,864 Cash flows from investing activities: Purchases of property and equipment (19,928 ) (21,151 ) Purchases of marketable securities (8,591 ) (25,804 ) Proceeds from marketable securities 22,525 42,575 Proceeds from other investments 20 — Other investments (96 ) (231 ) Cash paid for acquisition, net of cash acquired (143 ) (16 ) Net cash used in investing activities (6,213 ) (4,627 ) Cash flows from financing activities: Common dividends paid (29,507 ) (29,215 ) Net payments for stock awards (3,514 ) (9,182 ) Repurchase of common stock — (60,032 ) Net cash used in financing activities (33,021 ) (98,429 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (534 ) 2,519 Net increase (decrease) in cash, cash equivalents, and restricted cash 62,167 (1,673 ) Cash, cash equivalents, and restricted cash — beginning of period 181,925 146,656 Non-GAAP Financial Measures In our press release and schedules, we report certain financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America ('GAAP'). We discuss management's reasons for reporting these non-GAAP measures below, and the press release schedules that follow reconcile the most directly comparable GAAP measure to each non-GAAP measure that we reference. Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for total costs and expenses, income from operations, operating margin, income before income taxes, net income, earnings per share or any other comparable financial measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others. Management uses certain non-GAAP measures to evaluate financial performance because those non-GAAP measures allow for period-over-period comparisons of the Company's ongoing operations before the impact of certain items described below. Management believes this information is useful to investors to compare the Company's results of operations period-over-period. These measures are Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, Adjusted Diluted Earnings Per Share (EPS), Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), Adjusted EBITDA, and Free Cash Flow. We define Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, and Adjusted Diluted EPS to exclude (1) severance costs, asset impairment charges, gains on sale of real estate and early termination of leased facilities, and other costs associated with the Company's restructuring activities, (2) income/loss recognized from the Company's investments in partnership interests and other investments, and (3) discrete tax adjustments utilizing adjusted effective income tax rates of 29.5% and 29.0% for the three months ended June 30, 2024 and 2025, respectively. To illustrate currency impacts to operating results, Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, and Adjusted Diluted EPS for the three months ended June 30, 2025 are also presented on a constant currency basis utilizing an exchange rate of 0.66 Australian Dollars to U.S. Dollars, which was the average exchange rate for the same period in 2024. We define EBITDA as net income before other expense, the provision for income taxes, depreciation and amortization, and from this amount in arriving at Adjusted EBITDA we also exclude stock-based compensation expense, amortization expense associated with deferred implementation costs incurred in cloud computing arrangements, and the amounts in (1) above. We define Free Cash Flow as net cash provided by operating activities less purchases of property and equipment. These non-GAAP measures are reconciled to the most directly comparable GAAP measures in the sections that follow. Non-GAAP measures should not be viewed as substitutes for GAAP measures. (1) Reflects severance costs, asset impairment charges, gains on sale of real estate and early termination of leased facilities, and other costs associated with the Company's restructuring activities. (2) Reflects income/loss recognized from the Company's investments in partnership interests and other investments. (3) Reflects tax impacts of the adjustments described above and discrete tax adjustments related to stock-based compensation and other adjustments, utilizing adjusted effective income tax rates of 29.5% and 29.0% for the three months ended June 30, 2024 and 2025, respectively. (1) Reflects non-GAAP adjustments related to restructuring costs, income/loss from other investments, and tax adjustments as described further in the Unaudited Reconciliation of Non-GAAP Financial Measures table above. (2) Reflects an adjustment to translate foreign currency results after the non-GAAP adjustments for the three months ended June 30, 2025 at a constant exchange rate of 0.66 Australian Dollars to U.S. Dollars, which was the average exchange rate for the same period in 2024. (1) Denotes non-GAAP financial measures. Please see the information in the Non-GAAP Financial Measures section of this press release for more detail regarding these adjustments and management's reasons for providing this information. (2) Reflects severance costs, asset impairment charges, gains on sale of real estate and early termination of leased facilities, and other costs associated with the Company's restructuring activities. Excludes $0.7 million of depreciation and amortization expense for the three months ended June 30, 2025 and $0.1 million of stock-based compensation expense for the three months ended June 30, 2024. (1) Denotes a non-GAAP financial measure. Please see the information in the Non-GAAP Financial Measures section of this press release for more detail regarding these adjustments and management's reasons for providing this information.
Fast Company
24-07-2025
- Business
- Fast Company
Looking to retain top talent? Invest in employee education
The term 'skills gap' gained prominence in recent decades. Today, many business leaders are still struggling to keep pace with the skills their organization needs to remain competitive. The 2025 LinkedIn Learning Survey found that 49% of learning and talent development professionals agree their executives 'are concerned that employees do not have the right skills to execute [their] business strategy.' At the same time, half of full-time employees in the U.S. are concerned about gaining the skills they need to advance at their current job, according to a 2024 Workforce Survey commissioned by Strategic Education, Inc. The same survey found that 91% of U.S.-based full-time employees believe employers should invest in employees' continued education, up 8 percentage points from 2022 (83%). HOW EDUCATION BENEFITS CAN BRIDGE THE GAP Subscribe to the Daily newsletter. Fast Company's trending stories delivered to you every day Privacy Policy | Fast Company Newsletters Promoting career advancement through education can be a powerful retention tool that signals to your employees you are invested in their advancement in the organization. Specifically, tuition benefits, in which an employer pays for all or part of an employee's tuition, can help reinforce a message of trust: We believe in your ability to independently excel in a program that is right for you. This investment is also a partnership that, when designed effectively, should mutually benefit both the employer and the employee. In our experience, Strategic Education Inc. has found that the most effective education investments balance the skills gaps within the organization with the upskilling desires of the employee. Here is what they have in common: 1. THEY ALIGN WITH BUSINESS OBJECTIVES Whether it's transferable skills such as communication and technology or more specific credentials or degrees, a strategically built-out tuition benefits program can help prioritize and promote degree and non-degree programs that align with business objectives. At the same time, these programs still give employees the flexibility to select the specific type of program that is right for them. For example, an employer may decide they need to build a pipeline of employees with strong technology skills. They may incentivize enrollment in specific technology programs but allow employees to select among several program options, such as cybersecurity, data analytics, and software development. 2. THEY OFFER MULTIPLE PATHWAYS advertisement As working adults, employees often need the autonomy and flexibility to choose how they pursue an education. Successful tuition programs offer multiple pathways, or educational programs and providers, to earn a degree or certificate and give employees the flexibility to take courses on a schedule that works for them. For those employees who may not have completed a college degree or may need general education requirements, alternative pathways may also be offered. For example, Sophia Learning, an online, on-demand, self-paced learning platform, provides college-level courses that are ACE-recommended for college credit (full disclosure: Sophia Learning is a subsidiary of Strategic Education, Inc.). 3. THEY PROVIDE ENCOURAGEMENT AND SUPPORT Working adults have likely been away from the classroom for quite some time. Successful programs support these learners as they transition into their academic careers. Employers should look for an education benefits provider with dedicated success coaches and tutors who support success through the transition and check in often to provide encouragement and reminders of how continued education can impact their role with the organization. Remember to communicate about the tuition assistance benefit regularly so employees know how they can fully take advantage of it. A NEW ERA OF LEARNING Central to any strong partnership is the ability to meet the needs of both parties. By aligning around business objectives and offering employees multiple pathways and support, business leaders can create powerful, long-lasting partnerships that advance the organization. As workforce needs continue to evolve, it is probably safe to assume that concerns about 'skills gaps' are here to stay, along with the employers' role in skill development.
Yahoo
28-02-2025
- Business
- Yahoo
Strategic Education Inc (STRA) Q4 2024 Earnings Call Highlights: Strong Revenue Growth Amid ...
Release Date: February 27, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Strategic Education Inc (NASDAQ:STRA) reported an 8% increase in revenue and a 26% increase in operating income for the full year 2024. The company's adjusted earnings per share grew by 31% to $4.87. US higher education segment saw a 6% increase in average total enrollment, with employer-affiliated enrollment growing by 16%. The Australia and New Zealand segment experienced a 5% increase in average total enrollment and an 11% revenue growth on a constant currency basis. The education technology services segment had a record year, with revenue growing by more than 30% and operating income by almost 50%. US higher education revenue was down slightly in the fourth quarter due to higher scholarships and a shift towards employer-affiliated students. Enrollment growth slowed in the back half of the year, with some quarters falling below expectations. The regulatory environment in Australia remains uncertain, with potential impacts on international student enrollment due to visa processing changes. Operating expenses were higher in the fourth quarter due to one-time implementation-related costs associated with a new partnership. Revenue per student in US higher education declined more steeply than expected, driven by a shift to employer channels and higher scholarships. Warning! GuruFocus has detected 7 Warning Signs with SVC. Q: Enrollment growth slowed in the latter half of the year. Was this due to tougher comparisons, or are there specific issues with new enrollment or retention? A: (Carl McDonnell, CEO) Our corporate partnership enrollment remains strong, and the demand for non-affiliated enrollment is stable. We anticipated that enrollment would normalize to our long-term trend of about 5%. It will fluctuate quarterly, but we expect it to align with our notional model over the long term. Q: Can you provide more details on the regulatory changes in Australia and New Zealand? A: (Carl McDonnell, CEO) The government proposed international student caps, which lacked parliamentary support. Instead, they issued a ministerial direction to manage international enrollment through visa processing times. We are modeling as if caps are in place, as the government aims to stabilize foreign migration at certain levels. Q: How will the new ministerial directive in Australia affect your enrollment strategy? A: (Carl McDonnell, CEO) Historically, our enrollment was about 50/50 domestic and international. We've shifted marketing efforts to emphasize domestic enrollment. Torrens University has a strong reputation, and we plan to increase marketing to the domestic market to continue growing enrollment despite potential visa delays. Q: What impact did incremental investments in ETS and other segments have on adjusted operating income? A: (Daniel Jackson, CFO) The increase in expenses was largely due to ETS, impacting operating income. The expense base of $271 million is where we need it for 2025, with some seasonality in marketing investments. We expect 200 basis points of margin expansion over the next several years. Q: How should we think about enrollment and revenue growth in 2025? A: (Carl McDonnell, CEO) While we can't predict exact enrollment, we are confident in mid-single-digit growth over the long term. We feel good about our five-year plan and expect to maintain our notional model of 200 basis points of margin expansion. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
