Education Technology Services revenue up 21% YOY and operating income up 42% YOY

Sophia Learning subscribers up 40% YOY and revenue up 32% YOY

HERNDON, Va.: Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended March 31, 2026.

STRATEGIC EDUCATION CONSOLIDATED RESULTS

Three Months Ended March 31

• Revenue increased 0.8% to $305.9 million compared to $303.6 million for the same period in 2025, driven by strength within the Education Technology Services segment and favorable foreign currency impacts. Revenue on a constant currency basis, which is a non-GAAP financial measure, decreased 1.0% to $300.4 million in the first quarter of 2026 compared to $303.6 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.

• Income from operations was $41.1 million or 13.4% of revenue, compared to $39.8 million or 13.1% of revenue for the same period in 2025. Adjusted income from operations on a constant currency basis, which is a non-GAAP financial measure, was $42.8 million compared to $41.7 million for the same period in 2025. The adjusted operating income margin on a constant currency basis, which is a non-GAAP financial measure, was 14.3% compared to 13.7% for the same period in 2025.

• Net income was $32.8 million compared to $29.7 million for the same period in 2025. Adjusted net income on a constant currency basis, which is a non-GAAP financial measure, was $31.3 million compared to $31.2 million for the same period in 2025.

• Adjusted EBITDA, which is a non-GAAP financial measure, was $62.2 million compared to $60.0 million for the same period in 2025.

• Diluted earnings per share was $1.48 compared to $1.24 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 $1.41 from $1.30 for the same period in 2025. Diluted weighted average shares outstanding decreased to 22,171,000 from 24,065,000 for the same period in 2025. During the three months ended March 31, 2026, the Company repurchased 493,105 shares of common stock for $40.0 million.

Education Technology Services Segment Highlights

• For the first quarter, average total subscribers at Sophia Learning increased approximately 40% from the same period in 2025, and Sophia Learning revenue increased 32.1% to $19.5 million compared to $14.7 million for the same period in 2025.

• As of March 31, 2026, Workforce Edge had a total of 82 corporate agreements, collectively employing approximately 4,010,000 employees.

• ETS revenue increased 21.0% to $41.5 million in the first quarter of 2026 compared to $34.3 million for the same period in 2025, driven by growth in Sophia Learning subscriptions, higher employer affiliated enrollment, and revenue from new Workforce Edge employer partnerships.

• ETS income from operations was $19.7 million in the first quarter of 2026 compared to $13.8 million for the same period in 2025. The operating income margin was 47.4% compared to 40.3% for the same period in 2025.

U.S. Higher Education Segment Highlights

• For the first quarter, student enrollment within USHE decreased 0.8% to 87,165 compared to 87,854 for the same period in 2025. Our ongoing focus on employers is generating consistent growth in employer affiliated enrollment, but in the first quarter was again offset by a decline in unaffiliated enrollment. Employer affiliated enrollment in the first quarter hit a new all-time high of 34.5% of USHE enrollment, up from 31.2% during the same period in 2025.

• USHE’s healthcare portfolio generated strong total enrollment growth during the first quarter, increasing 10% from the same period in 2025 and now comprises 51% of USHE total enrollment compared to 47% for the same period in 2025. Of USHE’s total healthcare enrollment, approximately 38% is from employer partners.

• For the first quarter, FlexPath enrollment was 25% of USHE enrollment compared to 24% for the same period in 2025. Healthcare programs comprise 75% of FlexPath enrollment.

• Revenue decreased 3.8% to $212.6 million in the first quarter of 2026 compared to $221.0 million for the same period in 2025, driven by lower first quarter student enrollment and revenue per student.

• Income from operations was $25.5 million in the first quarter of 2026 compared to $30.0 million for the same period in 2025. The operating income margin was 12.0% compared to 13.6% for the same period in 2025.

Australia/New Zealand Segment Highlights

• For the first quarter, student enrollment within ANZ decreased 2.5% to 19,570 compared to 20,082 for the same period in 2025. Lower international enrollment, resulting from regulatory changes in Australia, was partially offset by progress growing domestic enrollment.

• Revenue increased 7.4% to $51.8 million in the first quarter of 2026 compared to $48.3 million for the same period in 2025, driven by favorable foreign currency impacts. Revenue on a constant currency basis, which is a non-GAAP financial measure, decreased 4.0% to $46.3 million in the first quarter of 2026 compared to $48.3 million for the same period in 2025, driven by lower first quarter student enrollment and revenue per student.

• Loss from operations was $2.0 million in the first quarter of 2026 compared to loss from operations of $2.1 million for the same period in 2025. Loss from operations on a constant currency basis, which is a non-GAAP financial measure, was $2.4 million in the first quarter of 2026 compared to loss from operations of $2.1 million for the same period in 2025. First quarter operating losses at ANZ are the result of revenue seasonality associated with the Australian summer months.

BALANCE SHEET AND CASH FLOW

At March 31, 2026, Strategic Education had cash, cash equivalents, and marketable securities of $162.6 million and no debt outstanding under its revolving credit facility. For the first three months of 2026, cash provided by operations was $87.4 million compared to $67.7 million for the same period in 2025. Capital expenditures for the first three months of 2026 were $10.1 million compared to $10.3 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 three months of 2026 were $12.1 million compared to $14.8 million for the same period in 2025. Free cash flow for the first three months of 2026, which is a non-GAAP financial measure, was $77.3 million compared to $57.3 million for the same period in 2025.

For the first quarter of 2026, consolidated bad debt expense as a percentage of revenue was 3.7% compared to 4.2% 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 June 1, 2026 to shareholders of record as of May 22, 2026.

CONFERENCE CALL WITH MANAGEMENT

Strategic Education will host a conference call to discuss its first 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;

• 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.

STRATEGIC EDUCATION, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
	December 31, 2025				March 31, 2026
ASSETS
Current assets:
Cash and cash equivalents	$	140,757			$	150,350
Marketable securities		7,297				7,275
Tuition receivable, net		78,202				86,190
Income taxes receivable		2,511				-
Other current assets		49,090				60,025
Total current assets		277,857				303,840
Property and equipment, net		107,373				106,322
Right-of-use lease assets		91,140				90,319
Marketable securities, non-current		5,000				5,000
Intangible assets		249,243				250,413
Goodwill		1,242,413				1,255,556
Other assets		65,514				66,926
Total assets	$	2,038,540			$	2,078,376
LIABILITIES & STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	105,791			$	115,096
Income taxes payable		-				1,490
Contract liabilities		96,247				132,024
Lease liabilities		15,905				14,316
Total current liabilities		217,943				262,926
Deferred income tax liabilities		35,835				39,287
Lease liabilities, non-current		93,216				94,884
Other long-term liabilities		45,140				46,826
Total liabilities		392,134				443,923
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 32,000,000 shares authorized; 22,968,860 and 22,612,909 shares issued and outstanding at December 31, 2025 and March 31, 2026, respectively		230				226
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