Lincoln Educational Services (LINC) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $114.4 million, up 14.8–15.0% year-over-year, driven by a 10.6% rise in average student population and 21.1% growth in student starts.

• Net income for Q3 2024 was $4.0 million, with adjusted EBITDA of $10.2 million, and EPS of $0.13, all showing significant year-over-year increases.

• The East Point, Georgia campus outperformed expectations, enrolling 600 students, generating $5 million in revenue since March 2024, and contributing positive EBITDA.

• Corporate partnerships expanded, including new agreements with Hyundai, Genesis, and Tesla, and a $6 million workforce development deal with Container Maintenance Corporation.

• Full-year 2024 guidance was raised for revenue, adjusted EBITDA, adjusted net income, and student starts, with long-term targets reaffirmed for 2027.

Financial highlights

• Q3 2024 revenue was $114.4 million, up $14.8 million (14.8%) year-over-year, with adjusted EBITDA of $10.2 million, a 67% increase, and net income of $4.0 million.

• For the nine months ended September 30, 2024, revenue totaled $320.7 million, up 16.4% year-over-year, and adjusted EBITDA reached $23.1 million.

• Adjusted EBITDA margin improved to 8.9% from 6.2% in Q3 2023.

• Cash and cash equivalents were $54 million at quarter end, with total liquidity exceeding $90 million and no debt.

• Generated $5.6 million in cash from operations in Q3, compared to a $6.8 million use in the prior year.

Outlook and guidance

• 2024 revenue guidance raised to $430–$435 million, adjusted EBITDA to $41–$43 million, adjusted net income to $16–$18 million, and student start growth to 13–15%.

• Capital expenditures for 2024–2025 projected at $75 million, with $50–$55 million in 2024 focused on new and relocating campuses and program launches.

• Long-term targets reaffirmed: $550 million revenue and $90 million adjusted EBITDA by 2027.