Strategic Education (STRA) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 4.6% year-over-year to $303.6 million, with constant currency revenue up 5.3%, driven by strong Education Technology Services and stable U.S. Higher Education performance.

• Net income was stable at $29.7 million; adjusted net income increased to $31.2 million and adjusted diluted EPS to $1.30, up 17.1% year-over-year.

• Employer partnerships and Sophia Learning subscriptions were key growth drivers, with employer-affiliated enrollment reaching 31.2% of total.

• SEI serves over 108,000 students globally and maintains a strong focus on quality, student outcomes, and long-term value creation.

Financial highlights

• Adjusted operating income rose 16.4% to $41.7 million, with adjusted operating margin improving to 13.7%.

• Adjusted EBITDA grew to $60.0 million from $54.3 million year-over-year.

• Cash, cash equivalents, and marketable securities totaled $197.6 million as of March 31, 2025.

• Share repurchases totaled $32 million in Q1 2025, with $196.5 million remaining authorized.

• Quarterly cash dividend of $0.60 per share was declared and paid.

Outlook and guidance

• Enrollment is expected to normalize to mid-single digit growth, consistent with long-term plans.

• Management anticipates continued growth in Education Technology Services and employer partnerships, with sufficient liquidity and no outstanding debt.

• Confident in achieving 2025 performance in line with the notional model, including 4-6% revenue growth and 200 basis points of adjusted operating income margin expansion.

• Forward-looking statements highlight growth opportunities and ongoing compliance with regulatory requirements in the U.S., Australia, and New Zealand.