Strategic Education (STRA) investor relations material

Executive summary

• Q3 2025 revenue increased up to $321.7 million, rising 4.6–5.1% year-over-year, led by strong Education Technology Services (ETS) and higher U.S. higher education revenue per student, while Australia/New Zealand (ANZ) faced declines due to regulatory and currency impacts.

• Adjusted operating income rose up to $51.7 million, up 39–39.4% year-over-year, with a 400 basis point margin expansion; adjusted EPS increased 41–41.4% to $1.64 from $1.16.

• Net income for Q3 2025 was $26.6 million, slightly down from $27.7 million year-over-year; adjusted net income rose to $38 million.

• Total enrollment was 104,448, down 1.2% year-over-year, with U.S. higher education enrollment declining 1% and ANZ down 2.1%.

• Strong cash position of $183 million and free cash flow of $127 million for the nine months ended September 30, 2025; annual cash dividend of $2.40 per share maintained.

Financial highlights

• ETS revenue grew 45.6–46% to $38.3 million, with operating income up 47.8–48% to $16 million and margin at 41.7%.

• U.S. higher education revenue increased 2.6–3% to $213.1 million, with operating income nearly doubling to $22.9–23 million and a 520 basis point margin increase.

• ANZ revenue decreased 2–4.7% to $68.6–$70.3 million, with operating income down to $12.5–13 million.

• Adjusted EBITDA rose to $69.6 million from $56.2 million year-over-year.

• Free cash flow for the first nine months was $127 million, up from $124.1 million year-over-year.

Outlook and guidance

• Management expects continued benefit from higher revenue per student in U.S. higher education and ongoing ETS growth.

• Domestic enrollment growth in ANZ is expected to offset international declines, with new student growth anticipated in 2026.

• Company remains on track to achieve long-term financial targets, with sufficient liquidity and no concerns about meeting 2026 goals.

• Focus remains on quality, student outcomes, and economic mobility.