Strategic Education, Inc. Reports Fourth Quarter 2025 Results
HERNDON, Va.--( BUSINESS WIRE)-- Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended December 31, 2025.
STRATEGIC EDUCATION CONSOLIDATED RESULTS
Year Ended December 31
Three Months Ended December 31
Education Technology Services Segment Highlights
U.S. Higher Education Segment Highlights
Australia/New Zealand Segment Highlights
BALANCE SHEET AND CASH FLOW
At December 31, 2025, Strategic Education had cash, cash equivalents, and marketable securities of $153.1 million and no debt outstanding under its revolving credit facility. Cash provided by operations in 2025 was $198.2 million compared to $169.3 million in 2024. Capital expenditures for 2025 were $44.3 million compared to $40.6 million in 2024. Capital expenditures including cloud computing investments, which flow through operating cash flow within other assets, for 2025 were $61.0 million compared to $56.8 million in 2024. Free cash flow for 2025, which is a non-GAAP financial measure, was $153.9 million compared to $128.8 million in 2024.
For the fourth quarter of 2025, consolidated bad debt expense as a percentage of revenue was 3.8% 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 March 16, 2026 to shareholders of record as of March 9, 2026.
CONFERENCE CALL WITH MANAGEMENT
Strategic Education will host a conference call to discuss its fourth quarter 2025 results at 5:00 p.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
December 31,
For the twelve months ended
December 31,
2024
2025
2024
2025
Revenues
$
311,456
$
323,210
$
1,219,930
$
1,268,220
Costs and expenses:
Instructional and support costs
166,884
159,948
650,496
647,111
General and administration
104,145
108,666
412,158
424,969
Restructuring costs
4,405
2,961
1,648
21,909
Total costs and expenses
275,434
271,575
1,064,302
1,093,989
Income from operations
36,022
51,635
155,628
174,231
Other income
1,869
1,539
5,804
3,162
Income before income taxes
37,891
53,174
161,432
177,393
Provision for income taxes
12,555
15,265
48,748
50,779
Net income
$
25,336
$
37,909
$
112,684
$
126,614
Earnings per share:
Basic
$
1.08
$
1.71
$
4.81
$
5.57
Diluted
$
1.05
$
1.66
$
4.67
$
5.41
Weighted average shares outstanding:
Basic
23,370
22,184
23,406
22,749
Diluted
24,149
22,819
24,140
23,402
STRATEGIC EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
December 31,
2024
December 31,
2025
ASSETS
Current assets:
Cash and cash equivalents
$
137,074
$
140,757
Marketable securities
46,949
7,297
Tuition receivable, net
76,127
78,202
Income taxes receivable
—
2,511
Other current assets
44,793
49,090
Total current assets
304,943
277,857
Property and equipment, net
111,247
107,373
Right-of-use lease assets
103,673
91,140
Marketable securities, non-current
14,981
5,000
Intangible assets
245,098
249,243
Goodwill
1,206,883
1,242,413
Other assets
62,910
65,514
Total assets
$
2,049,735
$
2,038,540
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
101,749
$
105,791
Income taxes payable
2,926
—
Contract liabilities
89,563
96,247
Lease liabilities
22,222
15,905
Total current liabilities
216,460
217,943
Deferred income tax liabilities
27,586
35,835
Lease liabilities, non-current
103,004
93,216
Other long-term liabilities
40,186
45,140
Total liabilities
387,236
392,134
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 32,000,000 shares authorized; 24,502,385 and 22,968,860 shares issued and outstanding at December 31, 2024 and December 31, 2025, respectively
245
230
Additional paid-in capital
1,532,414
1,436,795
Accumulated other comprehensive loss
(88,565
)
(46,115
)
Retained earnings
218,405
255,496
Total stockholders’ equity
1,662,499
1,646,406
Total liabilities and stockholders’ equity
$
2,049,735
$
2,038,540
STRATEGIC EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the year ended
December 31,
2024
2025
Cash flows from operating activities:
Net income
$
112,684
$
126,614
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on early termination of operating leases
(6,166
)
(2,196
)
Amortization of deferred financing costs
674
425
Amortization of investment discount/premium
(290
)
(432
)
Depreciation and amortization
44,378
48,410
Deferred income taxes
(150
)
7,733
Stock-based compensation
25,571
22,954
Impairment of right-of-use lease assets
677
4,685
Changes in assets and liabilities:
Tuition receivable, net
221
(1,086
)
Other assets
(11,622
)
(7,593
)
Accounts payable and accrued expenses
11,577
4,222
Income taxes payable and income taxes receivable
1,067
(5,563
)
Contract liabilities
(2,948
)
6,062
Other liabilities
(6,342
)
(6,037
)
Net cash provided by operating activities
169,331
198,198
Cash flows from investing activities:
Purchases of property and equipment
(40,580
)
(44,252
)
Purchases of marketable securities
(54,117
)
(28,094
)
Proceeds from marketable securities
31,025
79,078
Proceeds from sale of property and equipment
—
2,200
Proceeds from other investments
20
—
Other investments
(531
)
(390
)
Cash paid for acquisition, net of cash acquired
(177
)
(36
)
Net cash provided by (used in) investing activities
(64,360
)
8,506
Cash flows from financing activities:
Common dividends paid
(58,971
)
(57,543
)
Payments on long-term debt
(61,275
)
—
Net payments for stock awards
(3,318
)
(9,720
)
Payments of deferred financing costs
(1,698
)
—
Repurchase of common stock
(11,510
)
(138,892
)
Net cash used in financing activities
(136,772
)
(206,155
)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(3,468
)
2,306
Net increase (decrease) in cash, cash equivalents, and restricted cash
(35,269
)
2,855
Cash, cash equivalents, and restricted cash — beginning of period
181,925
146,656
Cash, cash equivalents, and restricted cash — end of period
$
146,656
$
149,511
STRATEGIC EDUCATION, INC.
UNAUDITED SEGMENT REPORTING
(in thousands)
For the three months ended
December 31,
For the twelve months ended
December 31,
2024
2025
2024
2025
Revenues:
U.S. Higher Education
$
214,332
$
218,529
$
857,890
$
868,239
Australia/New Zealand
66,666
65,591
257,119
251,584
Education Technology Services
30,458
39,090
104,921
148,397
Consolidated revenues
$
311,456
$
323,210
$
1,219,930
$
1,268,220
Income from operations:
U.S. Higher Education
$
17,881
$
28,304
$
77,165
$
101,872
Australia/New Zealand
10,743
12,309
37,394
35,454
Education Technology Services
11,803
13,983
42,717
58,814
Restructuring costs
(4,405
)
(2,961
)
(1,648
)
(21,909
)
Consolidated income from operations
$
36,022
$
51,635
$
155,628
$
174,231
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 27.5% and 29.0% for the three months ended December 31, 2024 and 2025, respectively, and an adjusted effective income tax rate of 29.0% for both the twelve months ended December 31, 2024 and 2025. 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 and twelve months ended December 31, 2025 are also presented on a constant currency basis utilizing an exchange rate of 0.65 and 0.66 Australian Dollars to U.S. Dollars, respectively, which were the average exchange rates for the same periods in 2024. We define EBITDA as net income before other income, 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 December 31, 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
$
275,434
$
(4,405
)
$
—
$
—
$
271,029
Income from operations
$
36,022
$
4,405
$
—
$
—
$
40,427
Operating margin
11.6
%
13.0
%
Income before income taxes
$
37,891
$
4,405
$
193
$
—
$
42,489
Net income
$
25,336
$
4,405
$
193
$
850
$
30,784
Diluted earnings per share
$
1.05
$
1.27
Weighted average diluted shares outstanding
24,149
24,149
For the three months ended December 31, 2025
Non-GAAP Adjustments
As Reported
(GAAP)
Restructuring
costs (1)
Income from
other
investments (2)
Tax
adjustments (3)
As Adjusted
(Non-GAAP)
Total costs and expenses
$
271,575
$
(2,961
)
$
—
$
—
$
268,614
Income from operations
$
51,635
$
2,961
$
—
$
—
$
54,596
Operating margin
16.0
%
16.9
%
Income before income taxes
$
53,174
$
2,961
$
(63
)
$
—
$
56,072
Net income
$
37,909
$
2,961
$
(63
)
$
(996
)
$
39,811
Diluted earnings per share
$
1.66
$
1.74
Weighted average diluted shares outstanding
22,819
22,819
For the twelve months ended December 31, 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
$
1,064,302
$
(1,648
)
$
—
$
—
$
1,062,654
Income from operations
$
155,628
$
1,648
$
—
$
—
$
157,276
Operating margin
12.8
%
12.9
%
Income before income taxes
$
161,432
$
1,648
$
2,660
$
—
$
165,740
Net income
$
112,684
$
1,648
$
2,660
$
684
$
117,676
Diluted earnings per share
$
4.67
$
4.87
Weighted average diluted shares outstanding
24,140
24,140
For the twelve months ended December 31, 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
$
1,093,989
$
(21,909
)
$
—
$
—
$
1,072,080
Income from operations
$
174,231
$
21,909
$
—
$
—
$
196,140
Operating margin
13.7
%
15.5
%
Income before income taxes
$
177,393
$
21,909
$
4,347
$
—
$
203,649
Net income
$
126,614
$
21,909
$
4,347
$
(8,279
)
$
144,591
Diluted earnings per share
$
5.41
$
6.18
Weighted average diluted shares outstanding
23,402
23,402
(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 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 27.5% and 29.0% for the three months ended December 31, 2024 and 2025, respectively, and an adjusted effective income tax rate of 29.0% for both the twelve months ended December 31, 2024 and 2025.
STRATEGIC EDUCATION, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
2025 AS ADJUSTED WITH CONSTANT CURRENCY
(in thousands, except per share data)
For the three months ended December 31, 2025
As Reported
(GAAP)
Non-GAAP
adjustments (1)
Constant
currency
adjustment (2)
As Adjusted
with Constant
Currency
(Non-GAAP)
Revenues
$
323,210
$
—
$
(140)
$
323,070
Total costs and expenses
$
271,575
$
(2,961)
$
(240)
$
268,374
Income from operations
$
51,635
$
2,961
$
100
$
54,696
Operating margin
16.0%
16.9%
Income before income taxes
$
53,174
$
2,898
$
99
$
56,171
Net income
$
37,909
$
1,902
$
70
$
39,881
Diluted earnings per share
$
1.66
$
1.75
Weighted average diluted shares outstanding
22,819
22,819
For the twelve months ended December 31, 2025
As Reported
(GAAP)
Non-GAAP
adjustments (1)
Constant
currency
adjustment (2)
As Adjusted
with Constant
Currency
(Non-GAAP)
Revenues
$
1,268,220
$
—
$
5,808
$
1,274,028
Total costs and expenses
$
1,093,989
$
(21,909)
$
4,910
$
1,076,990
Income from operations
$
174,231
$
21,909
$
898
$
197,038
Operating margin
13.7%
15.5%
Income before income taxes
$
177,393
$
26,256
$
955
$
204,604
Net income
$
126,614
$
17,977
$
677
$
145,268
Diluted earnings per share
$
5.41
$
6.21
Weighted average diluted shares outstanding
23,402
23,402
(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 and twelve months ended December 31, 2025 at a constant exchange rate of 0.65 and 0.66 Australian Dollars to U.S. Dollars, respectively, which were the average exchange rates for the same periods in 2024.
STRATEGIC EDUCATION, INC.
UNAUDITED NON-GAAP SEGMENT REPORTING
(in thousands)
For the three months ended
December 31,
For the twelve months ended
December 31,
2024
2025
2024
2025
Revenues:
U.S. Higher Education
$
214,332
$
218,529
$
857,890
$
868,239
Australia/New Zealand
66,666
65,591
257,119
251,584
Education Technology Services
30,458
39,090
104,921
148,397
Consolidated revenues
311,456
323,210
1,219,930
1,268,220
Income from operations:
U.S. Higher Education
$
17,881
$
28,304
$
77,165
$
101,872
Australia/New Zealand
10,743
12,309
37,394
35,454
Education Technology Services
11,803
13,983
42,717
58,814
Restructuring costs
(4,405
)
(2,961
)
(1,648
)
(21,909
)
Consolidated income from operations
36,022
51,635
155,628
174,231
Adjustments to consolidated income from operations:
Restructuring costs
4,405
2,961
1,648
21,909
Total adjustments to consolidated income from operations
4,405
2,961
1,648
21,909
Adjusted income from operations by segment:
U.S. Higher Education
17,881
28,304
77,165
101,872
Australia/New Zealand
10,743
12,309
37,394
35,454
Education Technology Services
11,803
13,983
42,717
58,814
Total adjusted income from operations
$
40,427
$
54,596
$
157,276
$
196,140
STRATEGIC EDUCATION, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
EBITDA AND ADJUSTED EBITDA
(in thousands)
For the three months ended
December 31,
For the twelve months ended
December 31,
2024
2025
2024
2025
Net income
$
25,336
$
37,909
$
112,684
$
126,614
Provision for income taxes
12,555
15,265
48,748
50,779
Other income
(1,869
)
(1,539
)
(5,804
)
(3,162
)
Depreciation and amortization
11,345
13,250
44,378
48,410
EBITDA (1)
47,367
64,885
200,006
222,641
Stock-based compensation
6,782
5,759
25,571
22,954
Restructuring costs (2)
4,154
2,238
1,123
18,441
Cloud computing amortization (3)
1,762
2,456
7,143
9,150
Adjusted EBITDA (1)
$
60,065
$
75,338
$
233,843
$
273,186
(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 $0.2 million of depreciation and amortization expense for the three and twelve months ended December 31, 2024 and $0.7 million and $3.2 million of depreciation and amortization expense for the three and twelve months ended December 31, 2025, respectively. Excludes $0.1 million and $0.3 million of stock-based compensation expense for the three and twelve months ended December 31, 2024, respectively, and $0.2 million of stock-based compensation expense for the twelve months ended December 31, 2025.
(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 twelve months ended
December 31,
2024
2025
Net cash provided by operating activities
$
169,331
$
198,198
Purchases of property and equipment
(40,580
)
(44,252
)
Free cash flow (1)
$
128,751
$
153,946
(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.