STRATEGIC EDUCATION, INC. REPORTS THIRD QUARTER 2026 RESULTS
Strategic Education, Inc. (STRA) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 STRATEGIC EDUCATION, INC. REPORTS THIRD QUARTER 2026 RESULTS Education Technology Services revenue up 12% YOY and operating income up 14% YOY Sophia Learning subscribers up 22% YOY and revenue up 20% YOY U.S. Higher Education's healthcare portfolio total enrollment i
How this was made
The 30-second read
Why it matters
The earnings miss and goodwill charge introduce downside risk, but segment growth offers a longer‑term upside narrative.
Market read
The release provides fresh earnings data that can move the stock immediately and informs sector sentiment.
What to watch
Strong subscriber gains in Sophia Learning and healthcare enrollment could offset short‑term earnings pain.
Strategic Education, Inc. Reports Third Quarter 2026 Results
Revenue increased 1.6%, Education Technology Services expanded, and nine-month free cash flow increased, but a $134.1 million ANZ goodwill and intangible-assets impairment produced an $87.6 million operating loss and $98.3 million net loss. ANZ enrollment declined 9.1% amid international student immigration constraints, while USHE enrollment declined 1.1%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $325.1M | – | 1.6% |
| Revenue on a constant currency basis, three months ended September 30, 2026non-GAAP | $320.1M | – | 0.1% |
| Revenue, nine months ended September 30, 2026GAAP | $968.3M | – | – |
| Instructional and support costs, three months ended September 30, 2026GAAP | $163.6M | – | – |
| General and administration, three months ended September 30, 2026GAAP | $110.4M | – | – |
| Restructuring costs, three months ended September 30, 2026GAAP | $4.48M | – | – |
| Impairment of goodwill and intangible assets, three months ended September 30, 2026GAAP | $134.1M | – | – |
| Total costs and expenses, three months ended September 30, 2026GAAP | $412.6M | – | – |
| Income (loss) from operations, three months ended September 30, 2026GAAP | −$87.56M | – | – |
| Operating margin, three months ended September 30, 2026GAAP | -26.9% | – | – |
| Adjusted income from operations, three months ended September 30, 2026non-GAAP | $51.02M | – | – |
| Adjusted income from operations on a constant currency basis, three months ended September 30, 2026non-GAAP | $50.2M | – | – |
| Adjusted operating margin, three months ended September 30, 2026non-GAAP | 15.7% | – | – |
| Income (loss) before income taxes, three months ended September 30, 2026GAAP | −$87.29M | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | $11.02M | – | – |
| Net income (loss), three months ended September 30, 2026GAAP | −$98.31M | – | – |
| Adjusted net income on a constant currency basis, three months ended September 30, 2026non-GAAP | $36.4M | – | – |
| Diluted earnings (loss) per share, three months ended September 30, 2026GAAP | $(4.68) | – | – |
| Adjusted diluted earnings per share on a constant currency basis, three months ended September 30, 2026non-GAAP | $1.69 | – | increased |
| Adjusted EBITDA, three months ended September 30, 2026non-GAAP | $71M | – | – |
| Income (loss) from operations, nine months ended September 30, 2026GAAP | $4.00M | – | – |
| Net income (loss), nine months ended September 30, 2026GAAP | −$28.34M | – | – |
| Diluted earnings (loss) per share, nine months ended September 30, 2026GAAP | $(1.33) | – | – |
| Cash provided by operating activities, nine months ended September 30, 2026GAAP | $173.5M | – | – |
| Capital expenditures, nine months ended September 30, 2026GAAP | $36.8M | – | – |
| Capital expenditures including cloud computing investments, nine months ended September 30, 2026other | $44.8M | – | – |
| Free cash flow, nine months ended September 30, 2026non-GAAP | $136.7M | – | – |
| Cash, cash equivalents, and marketable securities, September 30, 2026GAAP | $138.6M | – | – |
| Consolidated bad debt expense as a percentage of revenue, third quarter 2026GAAP | 4.6% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Education Technology ServicesGrowth in Sophia Learning subscriptions and higher employer affiliated enrollment. | $42.8M | – | 11.9% |
| U.S. Higher EducationHigher third quarter revenue per student. | $213.7M | – | 0.3% |
| Australia/New ZealandFavorable foreign currency impacts and higher revenue per student were offset by lower enrollment. | $68.6M | – | – |
| Australia/New Zealand on a constant currency basisLower third quarter student enrollment. | $63.6M | – | -7.2% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Capital returns
- During the three months ended September 30, 2026, the Company repurchased 347,472 shares of common stock for $28.5 million.
- During the nine months ended September 30, 2026, the Company repurchased 1,261,201 shares of common stock for $101.3 million.
- The Company declared a regular, quarterly cash dividend of $0.60 per share of common stock.
- The dividend will be paid on December 7, 2026 to shareholders of record as of November 30, 2026.
What drove it
- Education Technology Services revenue increased 11.9% to $42.8 million, driven by Sophia Learning subscriptions and higher employer affiliated enrollment.
- Sophia Learning revenue increased 19.8% to $21.3 million, while average total subscribers increased approximately 22%.
- USHE revenue increased 0.3% to $213.7 million, driven by higher third quarter revenue per student.
- USHE healthcare portfolio total enrollment increased 9% and comprised 54% of USHE total enrollment compared to 49% for the same period in 2025.
- Favorable foreign currency impacts contributed to consolidated revenue growth and supported reported ANZ revenue.
Concerns
- Persistent international student immigration constraints led the Company to reassess near-term growth expectations for ANZ and record a $134.1 million impairment of goodwill and intangible assets associated with Torrens University and related assets.
- ANZ enrollment decreased 9.1% to 17,101, with lower international enrollment resulting from regulatory changes in Australia.
- USHE enrollment decreased 1.1% to 84,725 as growth in employer affiliated enrollment was offset by a decline in unaffiliated enrollment.
- ANZ income from operations declined to $10.8 million from $12.5 million, and its operating income margin declined to 15.8% from 18.2%.
- USHE income from operations declined to $22.0 million from $22.9 million, and its operating income margin declined to 10.3% from 10.7%.
What to watch
- ANZ international enrollment and the effect of regulatory changes in Australia.
- Further impairment risk related to ANZ goodwill and indefinite-lived intangible assets.
- Whether employer affiliated enrollment and the healthcare portfolio offset USHE unaffiliated enrollment declines.
- Sophia Learning subscriber growth and Education Technology Services operating-margin performance.
- The adoption and enrollment contribution from recently launched licensure-track healthcare offerings.
Balance sheet and cash flow
- At September 30, 2026, Strategic Education had cash, cash equivalents, and marketable securities of $138.6 million.
- No debt was outstanding under its revolving credit facility at September 30, 2026.
- Net cash provided by operating activities was $173,498 (in thousands) for the nine months ended September 30, 2026, compared to $159,002 (in thousands) for the same period in 2025.
- Free cash flow was $136,676 (in thousands) for the nine months ended September 30, 2026, compared to $126,993 (in thousands) for the same period in 2025.
- Common dividends paid were $40,051 (in thousands) for the nine months ended September 30, 2026.
- Repurchase of common stock was $101,273 (in thousands) for the nine months ended September 30, 2026.
Analysis
Strategic Education reported third-quarter revenue of $325.1 million, up 1.6% from $319.9 million. Revenue on a constant currency basis increased 0.1% to $320.1 million, showing that reported growth was supported by favorable foreign currency impacts. Education Technology Services was the growth engine, with revenue increasing 11.9% to $42.8 million, while U.S. Higher Education revenue increased 0.3% to $213.7 million and ANZ revenue was relatively unchanged at $68.6 million.
The quarter's GAAP results were dominated by a $134.1 million impairment of ANZ goodwill and intangible assets tied to Torrens University and related assets. The charge followed management's reassessment of near-term ANZ growth expectations amid persistent international student immigration constraints. As a result, the Company reported an $87.6 million loss from operations, compared with $37.0 million of income from operations, and a $98.3 million net loss, compared with $26.6 million of net income. Diluted loss per share was $4.68, compared with diluted earnings per share of $1.15.
Underlying adjusted results were substantially more stable. Adjusted income from operations on a constant currency basis was $50.2 million compared with $51.3 million, while adjusted operating income margin was 15.7% compared with 16.0%. Adjusted net income on a constant currency basis was $36.4 million compared with $37.7 million, although adjusted diluted earnings per share on that basis increased to $1.69 from $1.63 as adjusted diluted weighted average shares outstanding decreased to 21,461,000 from 23,209,000. Adjusted EBITDA increased to $71.0 million from $69.6 million.
Segment mix remained favorable in Education Technology Services. Sophia Learning revenue increased 19.8% to $21.3 million and average total subscribers increased approximately 22%. ETS operating income increased to $18.2 million from $16.0 million, with margin improving to 42.5% from 41.7%. In USHE, healthcare portfolio enrollment increased 9% and reached 54% of total enrollment, but total enrollment declined 1.1% to 84,725 as employer affiliated enrollment growth was offset by lower unaffiliated enrollment. ANZ enrollment declined 9.1% to 17,101, and constant-currency revenue declined 7.2% to $63.6 million.
Cash generation remained positive despite the reported net loss. For the first nine months of 2026, operating cash flow increased to $173.5 million from $159.0 million and free cash flow increased to $136.7 million from $127.0 million. The Company had $138.6 million of cash, cash equivalents, and marketable securities and no debt outstanding under its revolving credit facility. It repurchased 1,261,201 shares for $101.3 million during the first nine months and declared a $0.60 per-share quarterly dividend. The release did not provide forward financial guidance.
Not in the filing
stated, not guessed- Forward revenue, margin, expense, tax-rate, earnings, cash-flow, or other financial guidance
- Previous-period outlook for comparison
- Gross profit and gross margin
- Quarterly operating cash flow and quarterly free cash flow
- Named executive commentary or named executive quotes
- Prior-quarter comparisons for reported metrics
- Debt balance other than the statement that no debt was outstanding under the revolving credit facility
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Strategic Education (NASDAQ:STRA) filed a Form 8‑K reporting its third‑quarter 2026 financial results.
Ticker impact
Strategic Education reported Q3 2026 results with revenue up 1.6% to $325.1M, net loss $98.3M and a $134.1M goodwill impairment for Torrens University.
downward pressure as investors price in the widened loss and goodwill charge.
The surprise net loss and impairment are material negative surprises for a mid‑cap education provider.
Market effects
Highlights weakness in the for‑profit education sector and may pressure peers.
U.S. education stocks could see modest pullback.
Limited to education and consumer discretionary themes.
Counterpoint
If the impairment is a one‑off, the stock may rebound on underlying subscriber growth.
Key entities
- CompanyStrategic Education, Inc.
U.S. for‑profit education provider listed on NASDAQ.
