Strategic Education, Inc. Reports Third Quarter 2025 Results

HERNDON, Va.--( BUSINESS WIRE)-- Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended September 30, 2025.

STRATEGIC EDUCATION CONSOLIDATED RESULTS

Three Months Ended September 30

Education Technology Services Segment Highlights

U.S. Higher Education Segment Highlights

Australia/New Zealand Segment Highlights

BALANCE SHEET AND CASH FLOW

At September 30, 2025, Strategic Education had cash, cash equivalents, and marketable securities of $182.6 million and no debt outstanding under its revolving credit facility. For the first nine months of 2025, cash provided by operations was $159.0 million compared to $153.4 million for the same period in 2024. Capital expenditures for the first nine months of 2025 were $32.0 million compared to $29.3 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 nine months of 2025 were $45.2 million compared to $41.6 million for the same period in 2024. Free cash flow for the first nine months of 2025, which is a non-GAAP financial measure, was $127.0 million compared to $124.1 million for the same period in 2024.

For the third quarter of 2025, consolidated bad debt expense as a percentage of revenue was 4.7% compared to 4.5% 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 December 8, 2025 to shareholders of record as of December 1, 2025.

CONFERENCE CALL WITH MANAGEMENT

Strategic Education will host a conference call to discuss its third 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 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:

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.

STRATEGIC EDUCATION, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

For the three months ended

September 30,

For the nine months ended

September 30,

2024

2025

2024

2025

Revenues

305,958

319,949

908,474

945,010

Costs and expenses:

Instructional and support costs

162,668

162,724

483,612

487,163

General and administration

106,206

105,932

308,013

316,303

Restructuring costs

758

14,251

(2,757

)

18,948

Total costs and expenses

269,632

282,907

788,868

822,414

Income from operations

36,326

37,042

119,606

122,596

Other income (expense)

2,264

(273

)

3,935

1,623

Income before income taxes

38,590

36,769

123,541

124,219

Provision for income taxes

10,842

10,139

36,193

35,514

Net income

27,748

26,630

87,348

88,705

Earnings per share:

Basic

1.18

3.73

3.87

Diluted

1.15

3.62

3.76

Weighted average shares outstanding:

Basic

23,422

22,584

23,418

22,937

Diluted

24,173

23,209

24,137

23,597

STRATEGIC EDUCATION, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

December 31,

2024

September 30,

2025

ASSETS

Current assets:

Cash and cash equivalents

137,074

151,460

Marketable securities

46,949

21,189

Tuition receivable, net

76,127

114,882

Income taxes receivable

—

2,433

Assets held for sale

—

2,200

Other current assets

44,793

54,266

Total current assets

304,943

346,430

Property and equipment, net

111,247

107,774

Right-of-use lease assets

103,673

95,993

Marketable securities, non-current

14,981

9,989

Intangible assets

245,098

248,925

Goodwill

1,206,883

1,237,065

Other assets

62,910

65,787

Total assets

2,049,735

2,111,963

LIABILITIES & STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued expenses

101,749

113,171

Income taxes payable

2,926

—

Contract liabilities

89,563

151,899

Lease liabilities

22,222

18,412

Total current liabilities

216,460

283,482

Deferred income tax liabilities

27,586

30,919

Lease liabilities, non-current

103,004

99,239

Other long-term liabilities

40,186

42,220

Total liabilities

387,236

455,860

Commitments and contingencies

Stockholders’ equity:

Common stock, par value $0.01; 32,000,000 shares authorized; 24,502,385 and 23,504,950 shares issued and outstanding at December 31, 2024 and September 30, 2025, respectively

245

235

Additional paid-in capital

1,532,414

1,467,401

Accumulated other comprehensive loss

(88,565

)

(52,631

)

Retained earnings

218,405

241,098

Total stockholders’ equity

1,662,499

1,656,103

Total liabilities and stockholders’ equity

2,049,735

2,111,963

STRATEGIC EDUCATION, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the nine months ended

September 30,

2024

2025

Cash flows from operating activities:

Net income

87,348

88,705

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

421

318

Amortization of investment discount/premium

(47

)

(413

)

Depreciation and amortization

33,033

35,160

Deferred income taxes

(2,272

)

2,917

Stock-based compensation

18,789

17,195

Impairment of right-of-use lease assets

—

4,685

Changes in assets and liabilities:

Tuition receivable, net

(27,849

)

(36,940

)

Other assets

(15,877

)

(12,678

)

Accounts payable and accrued expenses

12,878

9,167

Income taxes payable and income taxes receivable

(646

)

(5,488

)

Contract liabilities

57,576

60,211

Other liabilities

(3,762

)

(3,837

)

Net cash provided by operating activities

153,426

159,002

Cash flows from investing activities:

Purchases of property and equipment

(29,346

)

(32,009

)

Purchases of marketable securities

(14,720

)

(25,804

)

Proceeds from marketable securities

29,525

57,575

Proceeds from other investments

—

Other investments

(490

)

(265

)

Cash paid for acquisition, net of cash acquired

(163

)

(36

)

Net cash used in investing activities

(15,174

)

(539

)

Cash flows from financing activities:

Common dividends paid

(44,262

)

(43,387

)

Payments on long-term debt

(61,275

)

—

Net payments for stock awards

(3,514

)

(9,720

)

Repurchase of common stock

(5,000

)

(94,316

)

Net cash used in financing activities

(114,051

)

(147,423

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

1,495

2,815

Net increase in cash, cash equivalents, and restricted cash

25,696

13,855

Cash, cash equivalents, and restricted cash — beginning of period

181,925

146,656

Cash, cash equivalents, and restricted cash — end of period

207,621

160,511

STRATEGIC EDUCATION, INC.

UNAUDITED SEGMENT REPORTING

(in thousands)

For the three months ended

September 30,

For the nine months ended

September 30,

2024

2025

2024

2025

Revenues:

U.S. Higher Education

207,709

213,067

643,558

649,710

Australia/New Zealand

71,948

68,589

190,453

185,993

Education Technology Services

26,301

38,293

74,463

109,307

Consolidated revenues

305,958

319,949

908,474

945,010

Income from operations:

U.S. Higher Education

11,446

22,853

59,284

73,568

Australia/New Zealand

14,846

12,485

26,651

23,145

Education Technology Services

10,792

15,955

30,914

44,831

Restructuring costs

(758

)

(14,251

)

2,757

(18,948

)

Consolidated income from operations

36,326

37,042

119,606

122,596

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/losses 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 September 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 September 30, 2025 are also presented on a constant currency basis utilizing an exchange rate of 0.67 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 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) 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.

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, 2024

Non-GAAP Adjustments

As Reported

(GAAP)

Restructuring

costs (1)

Loss from

other

investments (2)

Tax

adjustments (3)

As Adjusted

(Non-GAAP)

Total costs and expenses

269,632

(758

)

—

268,874

Income from operations

36,326

758

—

37,084

Operating margin

11.9

12.1

Income before income taxes

38,590

758

290

—

39,638

Net income

27,748

758

290

(851

)

27,945

Earnings per share:

Diluted

1.15

1.16

Weighted average shares outstanding:

Diluted

24,173

For the three months ended September 30, 2025

Non-GAAP Adjustments

As Reported

(GAAP)

Restructuring

costs (1)

Loss from

other

investments (2)

Tax

adjustments (3)

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

(1)

(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 September 30, 2024 and 2025, respectively.

STRATEGIC EDUCATION, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Q3 2025 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

319,949

—

1,722

321,671

Total costs and expenses

282,907

(14,251

)

1,323

269,979

Income from operations

37,042

14,251

399

51,692

Operating margin

11.6%

16.1%

Income before income taxes

36,769

16,398

411

53,578

Net income

26,630

11,119

291

38,040

Earnings per share:

Diluted

1.15

1.64

Weighted average shares outstanding:

Diluted

23,209

(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 September 30, 2025 at a constant exchange rate of 0.67 Australian Dollars to U.S. Dollars, which was the average exchange rate for the same period in 2024.

STRATEGIC EDUCATION, INC.

UNAUDITED NON-GAAP SEGMENT REPORTING

(in thousands)

For the three months ended

September 30,

For the nine months ended

September 30,

2024

2025

2024

2025

Revenues:

U.S. Higher Education

207,709

213,067

643,558

649,710

Australia/New Zealand

71,948

68,589

190,453

185,993

Education Technology Services

26,301

38,293

74,463

109,307

Consolidated revenues

305,958

319,949

908,474

945,010

Income from operations:

U.S. Higher Education

11,446

22,853

59,284

73,568

Australia/New Zealand

14,846

12,485

26,651

23,145

Education Technology Services

10,792

15,955

30,914

44,831

Restructuring costs

(758

)

(14,251

)

2,757

(18,948

)

Consolidated income from operations

36,326

37,042

119,606

122,596

Adjustments to consolidated income from operations:

Restructuring costs

758

14,251

(2,757

)

18,948

Total adjustments to consolidated income from operations

758

14,251

(2,757

)

18,948

Adjusted income from operations by segment:

U.S. Higher Education

11,446

22,853

59,284

73,568

Australia/New Zealand

14,846

12,485

26,651

23,145

Education Technology Services

10,792

15,955

30,914

44,831

Total adjusted income from operations

37,084

51,293

116,849

141,544

STRATEGIC EDUCATION, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

EBITDA AND ADJUSTED EBITDA

(in thousands)

For the three months ended

September 30,

2024

2025

Net income

27,748

26,630

Provision for income taxes

10,842

10,139

Other (income) expense

(2,264

)

273

Depreciation and amortization

10,806

11,962

EBITDA (1)

47,132

49,004

Stock-based compensation

6,887

5,868

Restructuring costs (2)

689

12,425

Cloud computing amortization (3)

1,528

2,321

Adjusted EBITDA (1)

56,236

69,618

(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 of depreciation and amortization expense for the three months ended September 30, 2025 and $0.1 million of stock-based compensation expense for the three months ended September 30, 2024.

(3)

Reflects amortization expense associated with deferred implementation costs incurred in cloud computing arrangements.

STRATEGIC EDUCATION, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

FREE CASH FLOW

(in thousands)

For the nine months ended

September 30,

2024

2025

Net cash provided by operating activities

153,426

159,002

Purchases of property and equipment

(29,346

)

(32,009

)

Free cash flow (1)

124,080

126,993

(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.