Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA)
today announced financial results for the period ended September
30, 2023.
“We are pleased with the strength of our Q3 2023 results across
all three segments, led by continued enrollment growth in the U.S.
Higher Education segment, driven significantly by employer
affiliated enrollment; strong growth in the Education Technology
Services segment; and improving performance in the Australia/New
Zealand segment,” said Karl McDonnell, Chief Executive Officer of
Strategic Education. “Our team remains focused on delivering
overall enrollment, revenue, and earnings growth in 2023 and
supporting our mission to drive economic mobility for working
adults.”
STRATEGIC EDUCATION CONSOLIDATED
RESULTS
Three Months Ended September 30
- Revenue increased 8.7% to $285.9 million compared to $263.1
million for the same period in 2022. Revenue on a constant currency
basis increased 9.6% to $288.4 million in the third quarter of 2023
compared to $263.1 million for the same period in 2022.
- Income from operations was $25.6 million or 9.0% of revenue,
compared to $7.8 million or 3.0% of revenue for the same period in
2022. Adjusted income from operations, which is a non-GAAP
financial measure, was $32.6 million compared to $12.2 million for
the same period in 2022. The adjusted operating income margin,
which is a non-GAAP financial measure, was 11.4% compared to 4.6%
for the same period in 2022. For more details on non-GAAP financial
measures, refer to the information in the Non-GAAP Financial
Measures section of this press release.
- Net income was $18.5 million compared to $6.1 million for the
same period in 2022. Adjusted net income, which is a non-GAAP
financial measure, was $23.3 million compared to $8.0 million for
the same period in 2022.
- Adjusted EBITDA, which is a non-GAAP financial measure, was
$49.5 million compared to $31.6 million for the same period in
2022.
- Diluted earnings per share was $0.77 compared to $0.25 for the
same period in 2022. Adjusted diluted earnings per share, which is
a non-GAAP financial measure, increased to $0.97 from $0.33 for the
same period in 2022. Adjusted diluted earnings per share on a
constant currency basis, which is a non-GAAP financial measure, was
$0.99. Diluted weighted average shares outstanding decreased
slightly to 23,870,000 from 23,902,000 for the same period in
2022.
U.S. Higher Education Segment Highlights
- The U.S. Higher Education segment (USHE) is comprised of
Strayer University and Capella University.
- For the third quarter, student enrollment within USHE increased
9.9% to 82,548 compared to 75,144 for the same period in 2022.
- For the third quarter, FlexPath enrollment was 22% of USHE
enrollment compared to 21% for the same period in 2022.
- Revenue increased 8.8% to $201.8 million in the third quarter
of 2023 compared to $185.5 million for the same period in 2022,
driven by higher third quarter enrollment.
- Income from operations was $10.4 million or 5.2% of revenue in
the third quarter of 2023 compared to a loss from operations of
$1.9 million for the same period in 2022.
Education Technology Services Segment Highlights
- The Education Technology Services segment (ETS) is comprised
primarily of Enterprise Partnerships, Sophia Learning, and
Workforce Edge.
- For the third quarter, employer affiliated enrollment was 27.8%
of USHE enrollment compared to 25.3% for the same period in
2022.
- For the third quarter, average total subscribers at Sophia
Learning increased approximately 38% from the same period in
2022.
- As of September 30, 2023, Workforce Edge had a total of 60
corporate agreements, collectively employing approximately
1,410,000 employees.
- Revenue increased 26.7% to $20.8 million in the third quarter
of 2023 compared to $16.4 million for the same period in 2022,
driven by growth in Sophia Learning subscriptions and employer
affiliated enrollment.
- Income from operations was $8.3 million in the third quarter of
2023 compared to $5.2 million for the same period in 2022. The
operating income margin was 39.9%, compared to 31.8% for the same
period in 2022.
Australia/New Zealand Segment Highlights
- The Australia/New Zealand segment (ANZ) is comprised of Torrens
University, Think Education, and Media Design School.
- For the third quarter, student enrollment within ANZ decreased
1.2% to 18,279 compared to 18,493 for the same period in 2022.
- Revenue increased 3.4% to $63.3 million in the third quarter of
2023 compared to $61.2 million for the same period in 2022, driven
by higher revenue-per-student. Revenue on a constant currency basis
increased 7.4% to $65.7 million in the third quarter of 2023
compared to $61.2 million for the same period in 2022, driven by
higher revenue-per-student.
- Income from operations was $13.9 million in the third quarter
of 2023 compared to $8.9 million for the same period in 2022. The
operating income margin was 21.9%, compared to 14.6% for the same
period in 2022. Income from operations on a constant currency basis
was $14.3 million in the third quarter of 2023 compared to $8.9
million for the same period in 2022. The operating income margin on
a constant currency basis was 21.8%, compared to 14.6% for the same
period in 2022.
Balance Sheet and Cash
Flow
At September 30, 2023, Strategic Education had cash, cash
equivalents, and marketable securities of $198.6 million. During
the third quarter, the company repaid $40 million of outstanding
debt on its revolving credit facility, leaving $61.2 million
outstanding on the facility. For the first nine months of 2023,
cash provided by operations was $87.2 million compared to $124.7
million for the same period in 2022. Capital expenditures for the
first nine months of 2023 were $27.3 million compared to $32.5
million for the same period in 2022. Capital expenditures for 2023
are expected to be approximately $40 million.
For the third quarter of 2023, consolidated bad debt expense as
a percentage of revenue was 5.2%, compared to 4.5% of revenue for
the same period in 2022.
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 4, 2023 to shareholders of record
as of November 27, 2023.
CONFERENCE CALL WITH
MANAGEMENT
Strategic Education will host a conference call to discuss its
third quarter 2023 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.
INVESTOR AND ANALYST DAY
Strategic Education will hold its 2023 Investor and Analyst Day
on Tuesday, November 7, 2023 at 8:00 a.m. (ET) at the Lotte New
York Palace Hotel in New York City. The presentation will be
available via webcast. To access the live webcast of the Investor
and Analyst Day, please go to www.strategiceducation.com in the
Investor Relations section 15 minutes prior to the start time of
the event to register. Following the event, the webcast and
presentation will be archived and available at
www.strategiceducation.com in the Investor Relations section.
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)
U.S. Higher Education, including Strayer University and Capella
University, each institutionally accredited, and collectively offer
flexible and affordable associate, bachelor’s, master’s, and
doctoral programs including the Jack Welch Management Institute at
Strayer University, and non-degree web and mobile application
development courses through Strayer University’s Hackbright Academy
and Devmountain; 2) 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,
enabling education benefits programs through low-cost online
general education-level courses that are ACE-recommended for
college credit; and 3) Australia/New Zealand, comprised of Torrens
University, Think Education, and Media Design School that
collectively offer certificate and degree programs in Australia and
New Zealand. 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;
- rulemaking and other action by the Department of Education or
other governmental entities, including without limitation action
related to borrower defense to repayment applications, and
increased focus by the U.S. Congress on for-profit education
institutions;
- competitive factors;
- risks associated with the further spread of COVID-19, including
the ultimate impact of COVID-19 on people and economies;
- 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 existing educational
institutions, including Strategic Education’s acquisition of
Torrens University and associated assets in Australia and New
Zealand;
- the risk that the benefits of the acquisition of Torrens
University and associated assets in Australia and New Zealand may
not be fully realized or may take longer to realize than
expected;
- the risk that the acquisition of Torrens University and
associated assets in Australia and New Zealand may not advance
Strategic Education’s business strategy and growth strategy;
- risks relating to the timing of regulatory approvals;
- Strategic Education’s ability to implement its growth
strategy;
- the risk that the combined company may experience difficulty
integrating employees or operations;
- risks associated with the ability of Strategic Education’s
students to finance their education in a timely manner;
- 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 STATEMENTS OF INCOME
(in thousands, except per
share data)
For the three months ended
September 30,
For the nine months ended
September 30,
2022
2023
2022
2023
Revenues
$
263,123
$
285,936
$
795,542
$
830,222
Costs and expenses:
Instructional and support costs
153,162
155,735
445,154
470,152
General and administration
97,753
97,598
289,259
292,066
Amortization of intangible assets
3,522
3,382
10,954
10,364
Merger and integration costs
269
330
933
1,335
Restructuring costs
610
3,262
6,129
15,208
Total costs and expenses
255,316
260,307
752,429
789,125
Income from operations
7,807
25,629
43,113
41,097
Other income (expense)
(262
)
842
(1,133
)
4,411
Income before income taxes
7,545
26,471
41,980
45,508
Provision for income taxes
1,453
8,012
13,639
14,846
Net income
$
6,092
$
18,459
$
28,341
$
30,662
Earnings per share:
Basic
$
0.26
$
0.79
$
1.19
$
1.31
Diluted
$
0.25
$
0.77
$
1.18
$
1.28
Weighted average shares outstanding:
Basic
23,550
23,365
23,765
23,415
Diluted
23,902
23,870
24,026
23,952
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in thousands, except share
and per share data)
December 31, 2022
September 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
213,667
$
167,707
Marketable securities
9,156
28,960
Tuition receivable, net
62,953
97,429
Income taxes receivable
—
7,850
Other current assets
43,285
48,689
Total current assets
329,061
350,635
Property and equipment, net
132,845
117,872
Right-of-use lease assets
125,248
110,789
Marketable securities, non-current
13,123
1,914
Intangible assets, net
260,541
249,514
Goodwill
1,251,277
1,228,431
Other assets
49,652
54,945
Total assets
$
2,161,747
$
2,114,100
LIABILITIES &
STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses
$
90,588
$
102,122
Income taxes payable
6,989
—
Contract liabilities
88,488
140,248
Lease liabilities
23,879
23,121
Total current liabilities
209,944
265,491
Long-term debt
101,396
61,247
Deferred income tax liabilities
34,605
28,254
Lease liabilities, non-current
134,006
121,395
Other long-term liabilities
46,006
42,959
Total liabilities
525,957
519,346
Commitments and contingencies
Stockholders’ equity:
Common stock, par value $0.01; 32,000,000
shares authorized; 24,402,891 and 24,419,092 shares issued and
outstanding at December 31, 2022 and September 30, 2023,
respectively
244
244
Additional paid-in capital
1,510,924
1,513,023
Accumulated other comprehensive loss
(35,068
)
(62,878
)
Retained earnings
159,690
144,365
Total stockholders’ equity
1,635,790
1,594,754
Total liabilities and stockholders’
equity
$
2,161,747
$
2,114,100
STRATEGIC EDUCATION,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
For the nine months ended
September 30,
2022
2023
Cash flows from operating activities:
Net income
$
28,341
$
30,662
Adjustments to reconcile net income to net
cash provided by operating activities:
Gain on sale of property and equipment
—
(2,136
)
Amortization of deferred financing
costs
414
416
Amortization of investment
discount/premium
29
(40
)
Depreciation and amortization
49,193
44,881
Deferred income taxes
(9,213
)
(5,947
)
Stock-based compensation
16,209
15,202
Impairment of right-of-use lease
assets
1,185
5,135
Changes in assets and liabilities:
Tuition receivable, net
(33,320
)
(35,113
)
Other assets
417
(12,456
)
Accounts payable and accrued expenses
6,768
11,119
Income taxes payable and income taxes
receivable
4,498
(14,669
)
Contract liabilities
65,437
52,836
Other liabilities
(5,226
)
(2,717
)
Net cash provided by operating
activities
124,732
87,173
Cash flows from investing activities:
Purchases of property and equipment
(32,508
)
(27,318
)
Purchases of marketable securities
—
(16,904
)
Proceeds from marketable securities
2,600
8,175
Proceeds from sale of property and
equipment
—
5,890
Proceeds from other investments
—
457
Other investments
(223
)
(314
)
Cash paid for acquisition, net of cash
acquired
(193
)
(448
)
Net cash used in investing activities
(30,324
)
(30,462
)
Cash flows from financing activities:
Common dividends paid
(44,600
)
(44,139
)
Payments on long-term debt
—
(40,000
)
Net payments for stock awards
(2,973
)
(4,925
)
Repurchase of common stock
(36,916
)
(9,999
)
Net cash used in financing activities
(84,489
)
(99,063
)
Effect of exchange rate changes on cash,
cash equivalents, and restricted cash
(10,729
)
(3,657
)
Net decrease in cash, cash equivalents,
and restricted cash
(810
)
(46,009
)
Cash, cash equivalents, and restricted
cash — beginning of period
279,212
227,454
Cash, cash equivalents, and restricted
cash — end of period
$
278,402
$
181,445
STRATEGIC EDUCATION,
INC.
UNAUDITED SEGMENT
REPORTING
(in thousands)
For the three months ended
September 30,
For the nine months ended
September 30,
2022
2023
2022
2023
Revenues:
U.S. Higher Education
$
185,499
$
201,828
$
571,291
$
601,402
Australia/New Zealand
61,177
63,264
177,232
170,239
Education Technology Services
16,447
20,844
47,019
58,581
Consolidated revenues
$
263,123
$
285,936
$
795,542
$
830,222
Income (loss) from operations:
U.S. Higher Education
$
(1,948
)
$
10,412
$
25,386
$
26,742
Australia/New Zealand
8,934
13,875
20,506
20,984
Education Technology Services
5,222
8,316
15,237
20,278
Amortization of intangible assets
(3,522
)
(3,382
)
(10,954
)
(10,364
)
Merger and integration costs
(269
)
(330
)
(933
)
(1,335
)
Restructuring costs
(610
)
(3,262
)
(6,129
)
(15,208
)
Consolidated income from operations
$
7,807
$
25,629
$
43,113
$
41,097
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 revenue, 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 Revenue, Adjusted Total Costs and Expenses, Adjusted
Income from Operations, Adjusted Operating Margin, Adjusted Income
Before Income Taxes, Adjusted Net Income, Earnings Before Interest,
Taxes, Depreciation and Amortization (EBITDA), Adjusted EBITDA and
Adjusted Diluted Earnings Per Share (EPS). We define Adjusted
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 to
exclude (1) amortization and depreciation expense related to
intangible assets and software assets associated with the Company’s
acquisition of Torrens University and associated assets in
Australia and New Zealand, (2) integration expenses associated with
the Company’s merger with Capella Education Company and the
Company’s acquisition of Torrens University and associated assets
in Australia and New Zealand, (3) severance costs, lease and fixed
asset impairment charges, gains on sale of real estate and early
termination of leased facilities, and other costs associated with
the Company’s restructuring activities, (4) income/loss recognized
from the Company’s investments in partnership interests and other
investments, and (5) discrete tax adjustments utilizing an adjusted
effective income tax rate of 33.0% and 30.0% for the three months
ended September 30, 2022 and 2023, respectively. To illustrate
currency impacts to operating results, Adjusted 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, 2023 are also presented on a constant currency basis
utilizing an exchange rate of 0.68 Australian Dollars to U.S.
Dollars, which was the average exchange rate for the same period in
2022. We define EBITDA as net income before other income (loss),
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 (2) and (3) above. 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 REVENUE, 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, 2022
Non-GAAP Adjustments
As Reported
(GAAP)
Amortization of intangible
assets(1)
Merger and integration
costs(2)
Restructuring costs(3)
Income from other
investments(4)
Tax
adjustments(5)
As Adjusted
(Non-GAAP)
Revenues
$
263,123
$
—
$
—
$
—
$
—
$
—
$
263,123
Total costs and expenses
$
255,316
$
(3,522
)
$
(269
)
$
(610
)
$
—
$
—
$
250,915
Income from operations
$
7,807
$
3,522
$
269
$
610
$
—
$
—
$
12,208
Operating margin
3.0
%
4.6
%
Income before income taxes
$
7,545
$
3,522
$
269
$
610
$
(39
)
$
—
$
11,907
Net income
$
6,092
$
3,522
$
269
$
610
$
(39
)
$
(2,478
)
$
7,976
Earnings per share:
Diluted
$
0.25
$
0.33
Weighted average shares
outstanding:
Diluted
23,902
23,902
For the three months ended
September 30, 2023
Non-GAAP Adjustments
As Reported (GAAP)
Amortization of intangible
assets(1)
Merger and integration
costs(2)
Restructuring
costs(3)
Income from other
investments(4)
Tax adjustments(5)
As Adjusted (Non-GAAP)
Revenues
$
285,936
$
—
$
—
$
—
$
—
$
—
$
285,936
Total costs and expenses
$
260,307
$
(3,382
)
$
(330
)
$
(3,262
)
$
—
$
—
$
253,333
Income from operations
$
25,629
$
3,382
$
330
$
3,262
$
—
$
—
$
32,603
Operating margin
9.0
%
11.4
%
Income before income taxes
$
26,471
$
3,382
$
330
$
3,262
$
(215
)
$
—
$
33,230
Net income
$
18,459
$
3,382
$
330
$
3,262
$
(215
)
$
(1,957
)
$
23,261
Earnings per share:
Diluted
$
0.77
$
0.97
Weighted average shares
outstanding:
Diluted
23,870
23,870
(1)
Reflects amortization and depreciation
expense of intangible assets and software assets acquired through
the Company’s acquisition of Torrens University and associated
assets in Australia and New Zealand.
(2)
Reflects integration expenses associated
with the Company’s merger with Capella Education Company and the
Company’s acquisition of Torrens University and associated assets
in Australia and New Zealand.
(3)
Reflects severance costs, lease and fixed
asset impairment charges, gains on sale of real estate and early
termination of leased facilities, and other costs associated with
the Company’s restructuring activities.
(4)
Reflects income/loss recognized from the
Company’s investments in partnership interests and other
investments.
(5)
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 33.0% and 30.0% for the three months ended
September 30, 2022 and 2023, respectively.
STRATEGIC EDUCATION,
INC.
UNAUDITED RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
Q3 2023 AS ADJUSTED WITH
CONSTANT CURRENCY
(in thousands, except per
share data)
As Adjusted
(Non-GAAP)
Constant currency
adjustment(1)
As Adjusted with Constant
Currency
(Non-GAAP)
Revenues
$
285,936
$
2,453
$
288,389
Total costs and expenses
$
253,333
$
2,029
$
255,362
Income from operations
$
32,603
$
424
$
33,027
Operating margin
11.4
%
11.5
%
Income before income taxes
$
33,230
$
464
$
33,694
Net income
$
23,261
$
325
$
23,586
Earnings per share:
Diluted
$
0.97
$
0.99
Weighted average shares
outstanding:
Diluted
23,870
23,870
(1)
Reflects an adjustment to translate
foreign currency results for the three months ended September 30,
2023 at a constant exchange rate of 0.68 Australian Dollars to U.S.
Dollars, which was the average exchange rate for the same period in
2022.
STRATEGIC EDUCATION,
INC.
UNAUDITED NON-GAAP SEGMENT
REPORTING
(in thousands)
For the three months ended
September 30,
For the nine months ended
September 30,
2022
2023
2022
2023
Revenues:
U.S. Higher Education
$
185,499
$
201,828
$
571,291
$
601,402
Australia/New Zealand
61,177
63,264
177,232
170,239
Education Technology Services
16,447
20,844
47,019
58,581
Consolidated revenues
263,123
285,936
795,542
830,222
Income (loss) from operations:
U.S. Higher Education
$
(1,948
)
$
10,412
$
25,386
$
26,742
Australia/New Zealand
8,934
13,875
20,506
20,984
Education Technology Services
5,222
8,316
15,237
20,278
Amortization of intangible assets
(3,522
)
(3,382
)
(10,954
)
(10,364
)
Merger and integration costs
(269
)
(330
)
(933
)
(1,335
)
Restructuring costs
(610
)
(3,262
)
(6,129
)
(15,208
)
Consolidated income from operations
7,807
25,629
43,113
41,097
Adjustments to consolidated income from
operations:
Amortization of intangible assets
3,522
3,382
10,954
10,364
Merger and integration costs
269
330
933
1,335
Restructuring costs
610
3,262
6,129
15,208
Total adjustments to consolidated income
from operations
4,401
6,974
18,016
26,907
Adjusted income (loss) from operations by
segment:
U.S. Higher Education
(1,948
)
10,412
25,386
26,742
Australia/New Zealand
8,934
13,875
20,506
20,984
Education Technology Services
5,222
8,316
15,237
20,278
Total adjusted income from operations
$
12,208
$
32,603
$
61,129
$
68,004
STRATEGIC EDUCATION,
INC.
UNAUDITED RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
(in thousands)
For the three months ended
September 30,
2022
2023
Net income
$
6,092
$
18,459
Provision for income taxes
1,453
8,012
Other (income) loss
262
(842
)
Depreciation and amortization
15,757
14,685
EBITDA (1)
23,564
40,314
Stock-based compensation
5,612
4,077
Merger and integration costs (2)
269
330
Restructuring costs (3)
510
2,922
Cloud computing amortization (4)
1,644
1,894
Adjusted EBITDA (1)
$
31,599
$
49,537
(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 integration charges associated
with the Company’s merger with Capella Education Company and the
Company’s acquisition of Torrens University and associated assets
in Australia and New Zealand.
(3)
Reflects severance costs, lease and fixed
asset impairment charges, gains on sale of real estate and early
termination of leased facilities, and other costs associated with
the Company’s restructuring activities. Excludes $0.1 million of
depreciation and amortization expense for the three months ended
September 30, 2022 and 2023 and $0.3 million of stock-based
compensation expense for the three months ended September 30,
2023.
(4)
Reflects amortization expense associated
with deferred implementation costs incurred in cloud computing
arrangements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102397409/en/
Terese Wilke Director of Investor Relations Strategic Education,
Inc. (612) 977-6331 terese.wilke@strategiced.com
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