third quarter 2026
Filed Nov 5, 2026Strategic 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.