Strategic Education (STRA) Q4 2025 earnings summary

Executive summary

• Fourth quarter 2025 revenue increased 4% year-over-year, with operating income up 35% and EPS rising 38%.

• Full year 2025 revenue grew 4% to $1.3 billion, with total enrollment of 104,820 students as of Q4.

• Technology and AI-driven productivity improvements led to $30 million in expense reductions and contributed to a 35% operating income growth.

• Sophia Learning subscribers rose 47% year-over-year, with revenue up 41%.

• Company repurchased 1.7 million shares for $138.9 million in 2025.

Financial highlights

• 2025 consolidated revenue grew 4.0% year-over-year to $1,268.2 million.

• Adjusted operating income increased 24.7% to $196.1 million; adjusted net income rose 22.9% to $144.6 million.

• Adjusted EPS was $1.75 in Q4 and $6.21 for the year.

• Free cash flow for 2025 was $153.9 million; ended 2025 with $153 million in cash and no debt.

• Paid $2.40 per share in cash dividends during 2025.

Outlook and guidance

• 2026 performance expected to align with the notional model: 4%-6% revenue CAGR and 200 basis points annual AOI margin expansion.

• Employer-affiliated enrollment in U.S. Higher Education rose to 33.5% for 2025.

• Sophia Learning average total subscribers increased approximately 42% year-over-year.

• ETS expected to continue strong growth; Australia likely to return to total enrollment growth by year-end.

• U.S. Higher Education enrollment expected to normalize to mid-single digit growth over time.