Strategic Education, Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 5 November 2026: press release. Guidance figures: 1 kept. The quarter’s numbers.

Key takeaways

Revenue rose 1.6 percent: Revenue was $325.1 million, up from $319.9 million. Management cited Education Technology Services growth, higher USHE revenue per student, and favorable foreign currency. On a constant currency basis, revenue rose 0.1% to $320.1 million. Source
Operating result turned to loss: Loss from operations was $87.6 million, against income of $37.0 million, or 11.6% of revenue, a year earlier. The loss includes the non-cash ANZ impairment described under changes. Source
Net loss and diluted loss per share: Net loss was $98.3 million, compared with net income of $26.6 million a year earlier. Diluted loss per share was $4.68, compared with diluted earnings per share of $1.15. Source
Adjusted operating income excluding the charge: Adjusted operating income on a constant currency basis was $50.2 million, compared with $51.3 million, with a 15.7% margin against 16.0%. Adjusted EBITDA was $71.0 million, against $69.6 million. Source
ETS revenue up 11.9 percent: ETS revenue was $42.8 million, up from $38.3 million. Management attributed the growth to Sophia Learning subscriptions and higher employer affiliated enrollment. Source
Healthcare reached 54 percent of enrollment: Healthcare portfolio enrollment rose 9% year over year. Healthcare now makes up 54% of USHE total enrollment, up from 49%. Source
ANZ enrollment down 9.1 percent: ANZ enrollment was 17,101, compared with 18,808. Management said lower international enrollment from Australian regulatory changes was partly offset by growing domestic enrollment. Source
Nine-month operating cash rose: Cash provided by operations for the first nine months was $173.5 million, compared with $159.0 million. Free cash flow for the same period was $136.7 million, against $127.0 million. Source

“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.”
Strategic Education, Inc., press release

Guidance

Area	Period	Figure	Against last quarter
Capital return: quarterly dividend Source	Dividend payable December 7, 2026	$0.60 per share	Kept

What changed from last quarter

New: Management reported a non-cash impairment of goodwill and intangibles tied to the Torrens University acquisition, after reassessing near-term ANZ growth expectations. Source
New: Strayer University launched an Associate of Applied Science in Radiologic Technology program, with enrollment starting October 2026. Source
New: Non-GAAP adjustments now also exclude goodwill and intangibles impairment charges tied to the Torrens acquisition. The previous release's definitions did not include this item. Source
Guidance kept: The quarterly dividend stayed at $0.60 per share, the same amount declared in the previous release. Source

Consolidated results and operating loss

Revenue rose 1.6 percent: Revenue was $325.1 million, up from $319.9 million. Management cited Education Technology Services growth, higher USHE revenue per student, and favorable foreign currency. On a constant currency basis, revenue rose 0.1% to $320.1 million. Source
Operating result turned to loss: Loss from operations was $87.6 million, against income of $37.0 million, or 11.6% of revenue, a year earlier. The loss includes the non-cash ANZ impairment described under changes. Source
Net loss and diluted loss per share: Net loss was $98.3 million, compared with net income of $26.6 million a year earlier. Diluted loss per share was $4.68, compared with diluted earnings per share of $1.15. Source
Adjusted operating income excluding the charge: Adjusted operating income on a constant currency basis was $50.2 million, compared with $51.3 million, with a 15.7% margin against 16.0%. Adjusted EBITDA was $71.0 million, against $69.6 million. Source
Adjusted diluted EPS increased: Adjusted diluted earnings per share on a constant currency basis rose to $1.69 from $1.63 a year earlier. Source

Education Technology Services

ETS revenue up 11.9 percent: ETS revenue was $42.8 million, up from $38.3 million. Management attributed the growth to Sophia Learning subscriptions and higher employer affiliated enrollment. Source
ETS operating income and margin: ETS income from operations was $18.2 million, against $16.0 million a year earlier. The operating margin was 42.5%, compared with 41.7%. Source
Sophia Learning revenue grew: Sophia Learning revenue rose 19.8% to $21.3 million from $17.8 million. Average total subscribers increased about 22% year over year. Source
Workforce Edge agreements increased: Workforce Edge had 83 corporate agreements, covering about 4,030,000 employees. The previous release reported 81 agreements and about 4,020,000 employees. Source

“Persistent international student immigration constraints have led us to reassess our near-term growth expectations for ANZ”
Strategic Education, Inc., press release

U.S. Higher Education

USHE enrollment down 1.1 percent: USHE enrollment was 84,725, compared with 85,640, a decrease of 1.1%. Management said employer affiliated growth was again offset by a decline in unaffiliated enrollment. Source
Healthcare reached 54 percent of enrollment: Healthcare portfolio enrollment rose 9% year over year. Healthcare now makes up 54% of USHE total enrollment, up from 49%. Source
Employer affiliated share rose: Employer affiliated enrollment was 34.7% of USHE enrollment, up from 32.7% a year earlier. Source
Revenue per student lifted revenue: USHE revenue was $213.7 million, up 0.3% from $213.1 million, driven by higher revenue per student. Source
USHE operating income and margin: USHE income from operations was $22.0 million, against $22.9 million a year earlier. The operating margin was 10.3%, compared with 10.7%. Source

Australia/New Zealand

ANZ enrollment down 9.1 percent: ANZ enrollment was 17,101, compared with 18,808. Management said lower international enrollment from Australian regulatory changes was partly offset by growing domestic enrollment. Source
ANZ revenue down in constant currency: On a constant currency basis, ANZ revenue fell 7.2% to $63.6 million from $68.6 million. As reported, revenue was $68.6 million, with favorable foreign currency offsetting lower enrollment. Source
ANZ operating income and margin: ANZ income from operations was $10.8 million, against $12.5 million. The operating margin was 15.8%, compared with 18.2%; on a constant currency basis it was 15.7%. Source

Costs and non-GAAP adjustments

Instructional and support costs rose: Instructional and support costs were $163.6 million, against $162.7 million. General and administration costs were $110.4 million, against $105.9 million. Source
Restructuring costs declined: Restructuring costs were $4.5 million, against $14.3 million a year earlier. For the nine months, they were $9.0 million, against $18.9 million. Source
Constant currency rate applied: Constant currency figures use an exchange rate of 0.65 Australian dollars to U.S. dollars, the average for the same period in 2025. Source
Adjusted tax rate set at 29 percent: Adjusted figures use an adjusted effective income tax rate of 29.0% for both the 2025 and 2026 third quarters. Source
Anti-dilutive awards excluded from GAAP shares: GAAP diluted shares were 21,028,000 after excluding about 433,000 stock award shares, because the net loss made them anti-dilutive. Adjusted diluted shares were 21,461,000. Source

Cash flow and balance sheet

Nine-month operating cash rose: Cash provided by operations for the first nine months was $173.5 million, compared with $159.0 million. Free cash flow for the same period was $136.7 million, against $127.0 million. Source
Capital expenditures increased: Capital expenditures for the first nine months were $36.8 million, against $32.0 million a year earlier. Source
Liquidity with no revolver borrowings: Cash, cash equivalents and marketable securities totaled $138.6 million at September 30, 2026, with no debt outstanding under the revolving credit facility. Source
Tuition receivable and contract liabilities rose: Tuition receivable, net, was $112.5 million at September 30, against $78.2 million at December 31, 2025. Contract liabilities rose to $143.1 million from $96.2 million. Source

Share repurchases and dividend

Third-quarter buybacks of $28.5 million: The company repurchased 347,472 shares of common stock for $28.5 million in the third quarter. Source
Diluted share count fell: Adjusted diluted weighted average shares were 21,461,000, down from 23,209,000 a year earlier. Source
Quarterly dividend held at $0.60: The board declared a regular quarterly dividend of $0.60 per share, the same amount as in the previous release. Source

Healthcare, employers and programs

Licensure-track healthcare offerings broadened: Management said USHE has recently launched several licensure-track healthcare offerings, including Strayer's Licensed Practical Nurse Diploma, Capella's prelicensure BSN and an expanded nurse practitioner portfolio. Source
Employer partners in healthcare enrollment: Approximately 38% of USHE's total healthcare enrollment comes from employer partners. Source
FlexPath share of enrollment rose: FlexPath enrollment was 26% of USHE enrollment, up from 24% a year earlier. Source

Coming up, as management said on 5 November 2026

Dividend payment on December 7: The $0.60 per share dividend will be paid December 7, 2026, to holders of record as of November 30, 2026. Source

Figures management reported

Figure	Reported
USHE student enrollment Source	84,725, down 1.1% year over year
ANZ student enrollment Source	17,101, down 9.1% year over year
Sophia Learning average total subscribers Source	Up about 22% year over year
Workforce Edge corporate agreements and employees Source	83 agreements; about 4,030,000 employees
Employer affiliated share of USHE enrollment Source	34.7%, up from 32.7%
Healthcare share of USHE enrollment Source	54%, up from 49%

Risks management discussed

Regulatory: Lower international enrollment in ANZ is attributed to regulatory changes in Australia. Source
Demand: A decline in unaffiliated USHE enrollment again offset growth in employer affiliated enrollment. Source
Financial: Consolidated bad debt expense was 4.6% of revenue in the third quarter, compared with 4.7% a year earlier. Source

Earlier plans management reported on

Not stated: The previous release said Capella launched this program for July 2026 enrollment. The current release lists it among recently launched offerings, without a status statement. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

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.
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.

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;
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.

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

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

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

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

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.

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	Impairment of goodwill and intangible assets	Loss from other investments	Taxadjustments	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	Impairment of goodwill and intangible assets	Loss from other investments	Taxadjustments	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		21,028						21,461

Reflects impairment of goodwill and intangible assets related to the Company’s acquisition of Torrens University and associated assets in Australia and New Zealand.

Reflects income/loss recognized from the Company’s investments in partnership interests and other investments.

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.

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.

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	Constant currency adjustment	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	21,028			21,461

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.

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.

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

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	49,004	(75,973)
Stock-based compensation	5,868	5,730
Restructuring costs	12,425	4,212
Cloud computing amortization	2,321	2,965
Impairment of goodwill and intangible assets	-	134,100
Adjusted EBITDA	$69,618	$71,034

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.

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.

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

Reflects impairment of goodwill and intangible assets related to the Company’s acquisition of Torrens University and associated assets in Australia and New Zealand.

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	$126,993	$136,676

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.

Contacts
Terese Wilke
Senior Director of Investor Relations
Strategic Education, Inc.
(612) 977-6331 terese.wilke@strategiced.com