Strategic Education posts $87.6M Q3 operating loss
The quarter paired a $134.1 million non-cash impairment with divergent segment enrollment and a declared quarterly dividend.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Strategic Education, Inc. reported third-quarter 2026 revenue of $325.1 million, up 1.6% from $319.9 million a year earlier. GAAP operating results were a loss of $87.6 million, versus $37.0 million of income, and net results were a loss of $98.3 million versus $26.6 million of income. A non-cash $134.1 million impairment of goodwill and intangibles related to Torrens University followed reassessed near-term ANZ growth expectations amid international student immigration constraints. Adjusted diluted EPS on a constant currency basis was $1.69, versus $1.63.
Education Technology Services revenue rose 11.9% to $42.8 million; Sophia Learning revenue rose 19.8% to $21.3 million. U.S. Higher Education enrollment declined 1.1% to 84,725, while healthcare enrollment grew 9% and represented 54% of segment enrollment. ANZ enrollment fell 9.1% to 17,101, and operating income was $10.8 million versus $12.5 million.
Cash provided by operations for the first nine months was $173.5 million, compared with $159.0 million. As of September 30, 2026, cash, cash equivalents and marketable securities totaled $138.6 million, with no debt outstanding under the revolving credit facility. Strategic Education declared a $0.60 per-share quarterly dividend, payable December 7, 2026, to shareholders of record November 30, 2026.
2 points · 0 major1 major · 2 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointEducation Technology Services revenue increased 11.9% to $42.8 million in Q3 2026.
- Moderate pointNine-month cash from operations was $173.5 million, versus $159.0 million in 2025.
Negative
- Major pointGAAP operations recorded an $87.6 million loss alongside a $134.1 million impairment. 8.1% of market cap
- Moderate pointANZ enrollment declined 9.1% to 17,101 students in Q3 2026.
Filing Explained
The release reports that Strategic Education repurchased 1,261,201 shares for
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Revenue: $325.1 million
Operating loss: $87.6 million
Net loss: $98.3 million
+5 more
8 metrics
Revenue
$325.1 million
Third quarter 2026; up 1.6% from the same period in 2025
Operating loss
$87.6 million
Third quarter 2026; compared with $37.0 million operating income in 2025
Net loss
$98.3 million
Third quarter 2026; compared with $26.6 million net income in 2025
Goodwill and intangible assets impairment
$134.1 million
Non-cash charge in third quarter 2026
Education Technology Services revenue
$42.8 million
Third quarter 2026; increased 11.9% year over year
Cash provided by operations
$173.5 million
First nine months of 2026; compared with $159.0 million in 2025
Quarterly cash dividend
$0.60 per share
Declared for common stock
Diluted loss per share
$4.68 loss per share
Third quarter 2026; compared with $1.15 diluted earnings per share in 2025
Key Terms
constant currency, Adjusted EBITDA, Free Cash Flow, anti-dilutive, +1 more
5 terms
constant currency financial
"revenue on a constant currency basis"
Constant currency is a way of measuring financial results that removes the effects of changes in currency exchange rates. It allows for a clearer comparison of a company's performance over time by showing what the numbers would look like if exchange rates had stayed the same. This helps investors understand whether growth comes from actual business improvements or just currency fluctuations.
Adjusted EBITDA financial
"Adjusted EBITDA ... was $71.0 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Free Cash Flow financial
"We define Free Cash Flow as net cash provided by operating activities"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
anti-dilutive financial
"their impact would have been anti-dilutive due to the net loss"
A claim, security feature, or action described as anti-dilutive prevents or does not cause a reduction in existing shareholders’ per-share values when additional shares could be issued. For example, certain convertible securities or corporate actions are treated as anti-dilutive for earnings-per-share calculations if including them would raise EPS rather than lower it; investors watch this because it affects reported per-share metrics, ownership percentages, and valuation comparisons, like keeping pie slices the same size instead of making them smaller.
goodwill and intangible assets impairment financial
"impairment of goodwill and intangible assets"
Earnings Snapshot
Revenue: $325.1 million
Third quarter 2026
Revenue
$325.1 million
Up 1.6% from $319.9 million in the same period of 2025
Operating income (loss)
$87.6 million loss
Compared with $37.0 million income in the same period of 2025
Net income (loss)
$98.3 million loss
Compared with $26.6 million income in the same period of 2025
Adjusted EBITDA
$71.0 million
Compared with $69.6 million in the same period of 2025
Diluted EPS
$4.68 loss per share
Compared with $1.15 diluted earnings per share in the same period of 2025
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were STRA's third-quarter 2026 revenue and earnings?
STRA reported third-quarter 2026 revenue of $325.1 million, up 1.6% from $319.9 million a year earlier. It recorded a GAAP operating loss of $87.6 million and a net loss of $98.3 million, compared with income of $37.0 million and $26.6 million, respectively.
Why did STRA report an operating loss in Q3 2026?
A $134.1 million non-cash impairment of goodwill and intangible assets related to the Torrens University acquisition followed reassessed near-term ANZ growth expectations amid persistent international student immigration constraints.
When will STRA pay its $0.60 quarterly dividend?
The $0.60 per-share dividend is payable December 7, 2026, to shareholders of record November 30, 2026.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2026
(Exact Name of Registrant as Specified in Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of Principal Executive Offices) (Zip Code)
(703 ) 561-1600
(Registrant’s telephone number, including area code)
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities Registered Pursuant to Section 12(b) of the Exchange Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 5, 2026, Strategic Education, Inc. (“Strategic Education”) issued a press release announcing its financial results for the period ended September 30, 2026. A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.
The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Strategic Education under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number | Description | |||||||
99.1 | Press Release dated November 5, 2026 | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
STRATEGIC EDUCATION, INC. | ||||||||
Date: November 5, 2026 | ||||||||
By: | /s/ Daniel W. Jackson | |||||||
Daniel W. Jackson | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
Exhibit 99.1
STRATEGIC EDUCATION, INC. REPORTS THIRD QUARTER 2026 RESULTS
Education Technology Services revenue up 12% YOY and operating income up 14% YOY
Sophia Learning subscribers up 22% YOY and revenue up 20% YOY
U.S. Higher Education's healthcare portfolio total enrollment increased 9% YOY
HERNDON, Va., November 5, 2026 ― Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended September 30, 2026.
STRATEGIC EDUCATION CONSOLIDATED RESULTS
Three Months Ended September 30
•Revenue increased 1.6% to $325.1 million compared to $319.9 million for the same period in 2025, driven by strength within the Education Technology Services segment, an increase in U.S. Higher Education segment revenue per student, and favorable foreign currency impacts. Revenue on a constant currency basis, which is a non-GAAP financial measure, increased 0.1% to $320.1 million in the third quarter of 2026 compared to $319.9 million for the same period in 2025. 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.
•Loss from operations was $87.6 million, compared to income from operations of $37.0 million or 11.6% of revenue for the same period in 2025. Persistent international student immigration constraints have led us to reassess our near-term growth expectations for ANZ, resulting in a non-cash charge of $134.1 million related to the impairment of goodwill and intangibles associated with the acquisition of Torrens University and related assets. Adjusted income from operations on a constant currency basis, which is a non-GAAP financial measure, was $50.2 million compared to $51.3 million for the same period in 2025. Adjusted income from operations excludes the aforementioned impairment of goodwill and intangible assets. The adjusted operating income margin on a constant currency basis, which is a non-GAAP financial measure, was 15.7% compared to 16.0% for the same period in 2025.
•Net loss was $98.3 million compared to net income of $26.6 million for the same period in 2025. Adjusted net income on a constant currency basis, which is a non-GAAP financial measure, was $36.4 million compared to $37.7 million for the same period in 2025.
•Adjusted EBITDA, which is a non-GAAP financial measure, was $71.0 million compared to $69.6 million for the same period in 2025.
•Diluted loss per share was $4.68 compared to diluted earnings per share of $1.15 for the same period in 2025. Adjusted diluted earnings per share on a constant currency basis, which is a non-GAAP financial measure, increased to $1.69 from $1.63 for the same period in 2025. Adjusted diluted weighted average shares outstanding, which is a non-GAAP financial measure, decreased to 21,461,000 from 23,209,000 for the same period in 2025. During the three months ended September 30, 2026, the Company repurchased 347,472 shares of common stock for $28.5 million, and during the nine months ended September 30, 2026, the Company repurchased 1,261,201 shares of common stock for $101.3 million.
Education Technology Services Segment Highlights
•For the third quarter, average total subscribers at Sophia Learning increased approximately 22% from the same period in 2025, and Sophia Learning revenue increased 19.8% to $21.3 million compared to $17.8 million for the same period in 2025.
•As of September 30, 2026, Workforce Edge had a total of 83 corporate agreements, collectively employing approximately 4,030,000 employees.
1
•ETS revenue increased 11.9% to $42.8 million in the third quarter of 2026 compared to $38.3 million for the same period in 2025, driven by growth in Sophia Learning subscriptions and higher employer affiliated enrollment.
•ETS income from operations was $18.2 million in the third quarter of 2026 compared to $16.0 million for the same period in 2025. The operating income margin was 42.5% compared to 41.7% for the same period in 2025.
U.S. Higher Education Segment Highlights
•For the third quarter, student enrollment within USHE decreased 1.1% to 84,725 compared to 85,640 for the same period in 2025. Our ongoing focus on employers is generating consistent growth in employer affiliated enrollment, but in the third quarter was again offset by a decline in unaffiliated enrollment. Employer affiliated enrollment in the third quarter was 34.7% of USHE enrollment, up from 32.7% during the same period in 2025.
•USHE’s healthcare portfolio generated strong total enrollment growth during the third quarter, increasing 9% from the same period in 2025 and now comprises 54% of USHE total enrollment compared to 49% for the same period in 2025. Of USHE’s total healthcare enrollment, approximately 38% is from employer partners.
•During the third quarter, Strayer University launched an Associate of Applied Science in Radiologic Technology program for enrollment in October 2026. With the addition of this program, USHE has now recently launched several new licensure-track healthcare offerings, including Strayer University's Licensed Practical Nurse Diploma, Capella University's Bachelor of Science in Nursing (Prelicensure), and an expanded Capella University Nurse Practitioner portfolio.
•For the third quarter, FlexPath enrollment was 26% of USHE enrollment compared to 24% for the same period in 2025. Healthcare programs comprise 73% of FlexPath enrollment.
•Revenue increased 0.3% to $213.7 million in the third quarter of 2026 compared to $213.1 million for the same period in 2025, driven by higher third quarter revenue per student.
•Income from operations was $22.0 million in the third quarter of 2026 compared to $22.9 million for the same period in 2025. The operating income margin was 10.3% compared to 10.7% for the same period in 2025.
Australia/New Zealand Segment Highlights
•For the third quarter, student enrollment within ANZ decreased 9.1% to 17,101 compared to 18,808 for the same period in 2025. Lower international enrollment, resulting from regulatory changes in Australia, was partially offset by growing domestic enrollment.
•Revenue was relatively unchanged at $68.6 million in the third quarter of 2026 compared to the same period in 2025, driven by favorable foreign currency impacts and higher revenue per student, offset by lower enrollment. Revenue on a constant currency basis, which is a non-GAAP financial measure, decreased 7.2% to $63.6 million in the third quarter of 2026 compared to $68.6 million for the same period in 2025, driven by lower third quarter student enrollment.
•Income from operations was $10.8 million in the third quarter of 2026 compared to $12.5 million for the same period in 2025. The operating income margin was 15.8% compared to 18.2% for the same period in 2025. Income from operations on a constant currency basis, which is a non-GAAP financial measure, was $10.0 million in the third quarter of 2026 compared to $12.5 million for the same period in 2025. The operating income margin on a constant currency basis, which is a non-GAAP financial measure, was 15.7% compared to 18.2% for the same period in 2025.
BALANCE SHEET AND CASH FLOW
At September 30, 2026, Strategic Education had cash, cash equivalents, and marketable securities of $138.6 million and no debt outstanding under its revolving credit facility. For the first nine months of 2026, cash provided by operations was $173.5 million compared to $159.0 million for the same period in 2025. Capital expenditures for the first nine months of 2026 were $36.8 million compared to $32.0 million for the same period in 2025. Capital expenditures including cloud computing investments, which flow through operating cash flow within other assets, for the first nine months of 2026 were $44.8 million compared to $45.2 million for the same period in 2025. Free cash flow for the first nine months of 2026, which is a non-GAAP financial measure, was $136.7 million compared to $127.0 million for the same period in 2025.
For the third quarter of 2026, consolidated bad debt expense as a percentage of revenue was 4.6% compared to 4.7% of revenue for the same period in 2025.
2
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 December 7, 2026 to shareholders of record as of November 30, 2026.
CONFERENCE CALL WITH MANAGEMENT
Strategic Education will host a conference call to discuss its third quarter 2026 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 www.strategiceducation.com 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 www.strategiceducation.com in the Investor Relations section. Following the call, the webcast will be archived and available at www.strategiceducation.com 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) (www.strategiceducation.com) 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 offering flexible and affordable associate, bachelor’s, master’s, and doctoral programs; and 3) Australia/New Zealand, comprised primarily of Torrens University. 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;
•the impairment of goodwill and indefinite-lived intangible assets in ANZ and any further impairment in the future;
•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 other businesses, including existing educational institutions;
•risks relating to the timing of regulatory approvals;
•Strategic Education’s ability to implement its growth strategy;
3
•risks associated with the ability of Strategic Education’s students to finance their education in a timely manner;
•risks associated with cybersecurity incidents, including but not limited to reputational risks and possible liability under U.S. state and federal privacy statutes and legal actions;
•risks associated with the use of artificial intelligence and related tools;
•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.
For more information contact:
Terese Wilke
Senior Director of Investor Relations
Strategic Education, Inc.
(612) 977-6331
terese.wilke@strategiced.com
4
STRATEGIC EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except per share data)
| For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
| 2025 | 2026 | 2025 | 2026 | ||||||||||||||||||||
| Revenues | $ | 319,949 | $ | 325,067 | $ | 945,010 | $ | 968,259 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Instructional and support costs | 162,724 | 163,644 | 487,163 | 496,287 | |||||||||||||||||||
| General and administration | 105,932 | 110,405 | 316,303 | 324,822 | |||||||||||||||||||
| Restructuring costs | 14,251 | 4,481 | 18,948 | 9,048 | |||||||||||||||||||
| Impairment of goodwill and intangible assets | — | 134,100 | — | 134,100 | |||||||||||||||||||
| Total costs and expenses | 282,907 | 412,630 | 822,414 | 964,257 | |||||||||||||||||||
| Income (loss) from operations | 37,042 | (87,563) | 122,596 | 4,002 | |||||||||||||||||||
| Other income (expense) | (273) | 275 | 1,623 | 2,831 | |||||||||||||||||||
| Income (loss) before income taxes | 36,769 | (87,288) | 124,219 | 6,833 | |||||||||||||||||||
| Provision for income taxes | 10,139 | 11,023 | 35,514 | 35,176 | |||||||||||||||||||
| Net income (loss) | $ | 26,630 | $ | (98,311) | $ | 88,705 | $ | (28,343) | |||||||||||||||
| Earnings (loss) per share: | |||||||||||||||||||||||
| Basic | $ | 1.18 | $ | (4.68) | $ | 3.87 | $ | (1.33) | |||||||||||||||
| Diluted | $ | 1.15 | $ | (4.68) | $ | 3.76 | $ | (1.33) | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 22,584 | 21,028 | 22,937 | 21,343 | |||||||||||||||||||
| Diluted | 23,209 | 21,028 | 23,597 | 21,343 | |||||||||||||||||||
5
STRATEGIC EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| December 31, 2025 | September 30, 2026 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 140,757 | $ | 126,575 | |||||||
| Marketable securities | 7,297 | 4,999 | |||||||||
| Tuition receivable, net | 78,202 | 112,528 | |||||||||
| Income taxes receivable | 2,511 | 5,595 | |||||||||
| Other current assets | 49,090 | 54,925 | |||||||||
| Total current assets | 277,857 | 304,622 | |||||||||
| Property and equipment, net | 107,373 | 111,879 | |||||||||
| Right-of-use lease assets | 91,140 | 83,039 | |||||||||
| Marketable securities, non-current | 5,000 | 7,000 | |||||||||
| Intangible assets | 249,243 | 244,601 | |||||||||
| Goodwill | 1,242,413 | 1,140,542 | |||||||||
| Other assets | 65,514 | 66,354 | |||||||||
| Total assets | $ | 2,038,540 | $ | 1,958,037 | |||||||
| LIABILITIES & STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 105,791 | $ | 124,492 | |||||||
| Contract liabilities | 96,247 | 143,077 | |||||||||
| Lease liabilities | 15,905 | 15,049 | |||||||||
| Total current liabilities | 217,943 | 282,618 | |||||||||
| Deferred income tax liabilities | 35,835 | 34,279 | |||||||||
| Lease liabilities, non-current | 93,216 | 87,863 | |||||||||
| Other long-term liabilities | 45,140 | 44,225 | |||||||||
| Total liabilities | 392,134 | 448,985 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity: | |||||||||||
| Common stock, par value $0.01; 32,000,000 shares authorized; 22,968,860 and 21,882,127 shares issued and outstanding at December 31, 2025 and September 30, 2026, respectively | 230 | 219 | |||||||||
| Additional paid-in capital | 1,436,795 | 1,361,346 | |||||||||
| Accumulated other comprehensive loss | (46,115) | (17,526) | |||||||||
| Retained earnings | 255,496 | 165,013 | |||||||||
| Total stockholders’ equity | 1,646,406 | 1,509,052 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,038,540 | $ | 1,958,037 | |||||||
6
STRATEGIC EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
| For the nine months ended September 30, | |||||||||||
| 2025 | 2026 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 88,705 | $ | (28,343) | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
| Gain on early termination of operating leases | — | (405) | |||||||||
| Amortization of deferred financing costs | 318 | 318 | |||||||||
| Amortization of investment discount/premium | (413) | (8) | |||||||||
| Depreciation and amortization | 35,160 | 33,711 | |||||||||
| Deferred income taxes | 2,917 | (2,058) | |||||||||
| Stock-based compensation | 17,195 | 15,989 | |||||||||
| Impairment of right-of-use lease assets | 4,685 | 401 | |||||||||
| Impairment of goodwill and intangible assets | — | 134,100 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Tuition receivable, net | (36,940) | (34,732) | |||||||||
| Other assets | (12,678) | (4,946) | |||||||||
| Accounts payable and accrued expenses | 9,167 | 18,754 | |||||||||
| Income taxes payable and income taxes receivable | (5,488) | (3,084) | |||||||||
| Contract liabilities | 60,211 | 46,548 | |||||||||
| Other liabilities | (3,837) | (2,747) | |||||||||
| Net cash provided by operating activities | 159,002 | 173,498 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | (32,009) | (36,822) | |||||||||
| Purchases of marketable securities | (25,804) | (7,802) | |||||||||
| Proceeds from marketable securities | 57,575 | 8,306 | |||||||||
| Proceeds from other investments | — | 29 | |||||||||
| Other investments | (265) | (248) | |||||||||
| Cash paid for acquisition, net of cash acquired | (36) | — | |||||||||
| Other investing activities | — | (71) | |||||||||
| Net cash used in investing activities | (539) | (36,608) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Common dividends paid | (43,387) | (40,051) | |||||||||
| Net payments for stock awards | (9,720) | (12,504) | |||||||||
| Repurchase of common stock | (94,316) | (101,273) | |||||||||
| Net cash used in financing activities | (147,423) | (153,828) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 2,815 | 481 | |||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 13,855 | (16,457) | |||||||||
| Cash, cash equivalents, and restricted cash — beginning of period | 146,656 | 149,511 | |||||||||
| Cash, cash equivalents, and restricted cash — end of period | $ | 160,511 | $ | 133,054 | |||||||
7
STRATEGIC EDUCATION, INC.
UNAUDITED SEGMENT REPORTING
(in thousands)
| For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
| 2025 | 2026 | 2025 | 2026 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| U.S. Higher Education | $ | 213,067 | $ | 213,664 | $ | 649,710 | $ | 646,781 | |||||||||||||||
| Australia/New Zealand | 68,589 | 68,562 | 185,993 | 194,766 | |||||||||||||||||||
| Education Technology Services | 38,293 | 42,841 | 109,307 | 126,712 | |||||||||||||||||||
| Consolidated revenues | $ | 319,949 | $ | 325,067 | $ | 945,010 | $ | 968,259 | |||||||||||||||
| Income (loss) from operations: | |||||||||||||||||||||||
| U.S. Higher Education | $ | 22,853 | $ | 22,029 | $ | 73,568 | $ | 79,906 | |||||||||||||||
| Australia/New Zealand | 12,485 | 10,802 | 23,145 | 9,797 | |||||||||||||||||||
| Education Technology Services | 15,955 | 18,187 | 44,831 | 57,447 | |||||||||||||||||||
| Restructuring costs | (14,251) | (4,481) | (18,948) | (9,048) | |||||||||||||||||||
| Impairment of goodwill and intangible assets | — | (134,100) | — | (134,100) | |||||||||||||||||||
| Consolidated income (loss) from operations | $ | 37,042 | $ | (87,563) | $ | 122,596 | $ | 4,002 | |||||||||||||||
8
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 (loss) from operations, operating margin, income (loss) before income taxes, net income (loss), earnings (loss) 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/losses on sale of real estate and early termination of leased facilities, and other costs associated with the Company’s restructuring activities, (2) goodwill and intangible assets impairment charges related to the Company’s acquisition of Torrens University and associated assets in Australia and New Zealand, (3) income/loss recognized from the Company’s investments in partnership interests and other investments, and (4) discrete tax adjustments utilizing an adjusted effective income tax rate of 29.0% for both the three months ended September 30, 2025 and 2026. 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 September 30, 2026 are also presented on a constant currency basis utilizing an exchange rate of 0.65 Australian Dollars to U.S. Dollars, which was the average exchange rate for the same period in 2025. We define EBITDA as net income (loss) before other income (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) and (2) 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.
9
STRATEGIC EDUCATION, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS
(in thousands, except per share data)
| For the three months ended September 30, 2025 Non-GAAP Adjustments | |||||||||||||||||||||||||||||||||||
| As Reported (GAAP) | Restructuring costs(1) | Impairment of goodwill and intangible assets(2) | Loss from other investments(3) | Tax adjustments(4) | As Adjusted (Non-GAAP) | ||||||||||||||||||||||||||||||
| Total costs and expenses | $ | 282,907 | $ | (14,251) | $ | — | $ | — | $ | — | $ | 268,656 | |||||||||||||||||||||||
| Income from operations | $ | 37,042 | $ | 14,251 | $ | — | $ | — | $ | — | $ | 51,293 | |||||||||||||||||||||||
| Operating margin | 11.6 | % | 16.0 | % | |||||||||||||||||||||||||||||||
| Income before income taxes | $ | 36,769 | $ | 14,251 | $ | — | $ | 2,147 | $ | — | $ | 53,167 | |||||||||||||||||||||||
| Net income | $ | 26,630 | $ | 14,251 | $ | — | $ | 2,147 | $ | (5,279) | $ | 37,749 | |||||||||||||||||||||||
| Earnings per share: | |||||||||||||||||||||||||||||||||||
| Diluted | $ | 1.15 | $ | 1.63 | |||||||||||||||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||||||||||||
| Diluted | 23,209 | 23,209 | |||||||||||||||||||||||||||||||||
| For the three months ended September 30, 2026 Non-GAAP Adjustments | |||||||||||||||||||||||||||||||||||
| As Reported (GAAP) | Restructuring costs(1) | Impairment of goodwill and intangible assets(2) | Loss from other investments(3) | Tax adjustments(4) | As Adjusted (Non-GAAP) | ||||||||||||||||||||||||||||||
| Total costs and expenses | $ | 412,630 | $ | (4,481) | $ | (134,100) | $ | — | $ | — | $ | 274,049 | |||||||||||||||||||||||
| Income (loss) from operations | $ | (87,563) | $ | 4,481 | $ | 134,100 | $ | — | $ | — | $ | 51,018 | |||||||||||||||||||||||
| Operating margin | -26.9 | % | 15.7 | % | |||||||||||||||||||||||||||||||
| Income (loss) before income taxes | $ | (87,288) | $ | 4,481 | $ | 134,100 | $ | 759 | $ | — | $ | 52,052 | |||||||||||||||||||||||
| Net income (loss) | $ | (98,311) | $ | 4,481 | $ | 134,100 | $ | 759 | $ | (4,072) | $ | 36,957 | |||||||||||||||||||||||
| Earnings (loss) per share: | |||||||||||||||||||||||||||||||||||
| Diluted | $ | (4.68) | $ | 1.72 | |||||||||||||||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||||||||||||
Diluted(5) | 21,028 | 21,461 | |||||||||||||||||||||||||||||||||
(1)Reflects severance costs, asset impairment charges, gains/losses on sale of real estate and early termination of leased facilities, and other costs associated with the Company’s restructuring activities.
(2)Reflects impairment of goodwill and intangible assets related to the Company’s acquisition of Torrens University and associated assets in Australia and New Zealand.
(3)Reflects income/loss recognized from the Company’s investments in partnership interests and other investments.
(4)Reflects tax impacts of the adjustments described above and discrete tax adjustments related to stock-based compensation and other adjustments, utilizing an adjusted effective income tax rate of 29.0% for both the three months ended September 30, 2025 and 2026.
(5)For the three months ended September 30, 2026, approximately 433,000 incremental shares attributable to stock awards were excluded from the diluted share count for GAAP purposes because their impact would have been anti-dilutive due to the net loss for the period.
10
STRATEGIC EDUCATION, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
Q3 2026 AS ADJUSTED WITH CONSTANT CURRENCY
(in thousands, except per share data)
| As Reported (GAAP) | Non-GAAP adjustments(1) | Constant currency adjustment(2) | As Adjusted with Constant Currency (Non-GAAP) | ||||||||||||||||||||
| Revenues | $ | 325,067 | $ | — | $ | (4,929) | $ | 320,138 | |||||||||||||||
| Total costs and expenses | $ | 412,630 | $ | (138,581) | $ | (4,094) | $ | 269,955 | |||||||||||||||
| Income (loss) from operations | $ | (87,563) | $ | 138,581 | $ | (835) | $ | 50,183 | |||||||||||||||
| Operating margin | -26.9% | 15.7% | |||||||||||||||||||||
| Income (loss) before income taxes | $ | (87,288) | $ | 139,340 | $ | (853) | $ | 51,199 | |||||||||||||||
| Net income (loss) | $ | (98,311) | $ | 135,268 | $ | (606) | $ | 36,351 | |||||||||||||||
| Earnings (loss) per share: | |||||||||||||||||||||||
| Diluted | $ | (4.68) | $ | 1.69 | |||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
Diluted(3) | 21,028 | 21,461 | |||||||||||||||||||||
(1)Reflects non-GAAP adjustments related to restructuring costs, impairment of goodwill and intangible assets, 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 September 30, 2026 at a constant exchange rate of 0.65 Australian Dollars to U.S. Dollars, which was the average exchange rate for the same period in 2025.
(3)For the three months ended September 30, 2026, approximately 433,000 incremental shares attributable to stock awards were excluded from the diluted share count for GAAP purposes because their impact would have been anti-dilutive due to the net loss for the period.
11
STRATEGIC EDUCATION, INC.
UNAUDITED NON-GAAP SEGMENT REPORTING
(in thousands)
| For the three months ended September 30, | For the nine months ended September 30, | ||||||||||||||||||||||
| 2025 | 2026 | 2025 | 2026 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
U.S. Higher Education | $ | 213,067 | $ | 213,664 | $ | 649,710 | $ | 646,781 | |||||||||||||||
Australia/New Zealand | 68,589 | 68,562 | 185,993 | 194,766 | |||||||||||||||||||
Education Technology Services | 38,293 | 42,841 | 109,307 | 126,712 | |||||||||||||||||||
| Consolidated revenues | $ | 319,949 | $ | 325,067 | $ | 945,010 | $ | 968,259 | |||||||||||||||
| Income (loss) from operations: | |||||||||||||||||||||||
U.S. Higher Education | $ | 22,853 | $ | 22,029 | $ | 73,568 | $ | 79,906 | |||||||||||||||
Australia/New Zealand | 12,485 | 10,802 | 23,145 | 9,797 | |||||||||||||||||||
Education Technology Services | 15,955 | 18,187 | 44,831 | 57,447 | |||||||||||||||||||
Restructuring costs | (14,251) | (4,481) | (18,948) | (9,048) | |||||||||||||||||||
Impairment of goodwill and intangible assets | — | (134,100) | — | (134,100) | |||||||||||||||||||
| Consolidated income (loss) from operations | 37,042 | (87,563) | 122,596 | 4,002 | |||||||||||||||||||
| Adjustments to consolidated income (loss) from operations: | |||||||||||||||||||||||
Restructuring costs | 14,251 | 4,481 | 18,948 | 9,048 | |||||||||||||||||||
Impairment of goodwill and intangible assets | — | 134,100 | — | 134,100 | |||||||||||||||||||
| Total adjustments to consolidated income (loss) from operations | 14,251 | 138,581 | 18,948 | 143,148 | |||||||||||||||||||
| Adjusted income from operations by segment: | |||||||||||||||||||||||
U.S. Higher Education | 22,853 | 22,029 | 73,568 | 79,906 | |||||||||||||||||||
Australia/New Zealand | 12,485 | 10,802 | 23,145 | 9,797 | |||||||||||||||||||
Education Technology Services | 15,955 | 18,187 | 44,831 | 57,447 | |||||||||||||||||||
| Total adjusted income from operations | $ | 51,293 | $ | 51,018 | $ | 141,544 | $ | 147,150 | |||||||||||||||
12
STRATEGIC EDUCATION, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
EBITDA AND ADJUSTED EBITDA
(in thousands)
| For the three months ended September 30, | |||||||||||
| 2025 | 2026 | ||||||||||
| Net income (loss) | $ | 26,630 | $ | (98,311) | |||||||
Provision for income taxes | 10,139 | 11,023 | |||||||||
Other (income) expense | 273 | (275) | |||||||||
Depreciation and amortization | 11,962 | 11,590 | |||||||||
EBITDA(1) | 49,004 | (75,973) | |||||||||
Stock-based compensation | 5,868 | 5,730 | |||||||||
Restructuring costs(2) | 12,425 | 4,212 | |||||||||
Cloud computing amortization(3) | 2,321 | 2,965 | |||||||||
Impairment of goodwill and intangible assets(4) | — | 134,100 | |||||||||
Adjusted EBITDA(1) | $ | 69,618 | $ | 71,034 | |||||||
(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/losses on sale of real estate and early termination of leased facilities, and other costs associated with the Company’s restructuring activities. Excludes $1.8 million and $0.3 million of depreciation and amortization expense for the three months ended September 30, 2025 and 2026, respectively.
(3)Reflects amortization expense associated with deferred implementation costs incurred in cloud computing arrangements.
(4)Reflects impairment of goodwill and intangible assets related to the Company’s acquisition of Torrens University and associated assets in Australia and New Zealand.
13
STRATEGIC EDUCATION, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
FREE CASH FLOW
(in thousands)
| For the nine months ended September 30, | |||||||||||
| 2025 | 2026 | ||||||||||
| Net cash provided by operating activities | $ | 159,002 | $ | 173,498 | |||||||
| Purchases of property and equipment | (32,009) | (36,822) | |||||||||
Free cash flow(1) | $ | 126,993 | $ | 136,676 | |||||||
(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.
14