Strategic Education, Inc. (NASDAQ:STRA) Q1 2025 Earnings Conference Call April 24, 2025 10:00 AM ET Company Participants Terese Wilke - Senior Director of Investor Relations Karl McDonnell - President and Chief Executive Officer Daniel Jackson - Chief Financial Officer and Chief Administrative Officer Conference Call Participants Jeffrey Silber - BMO Capital Markets Alexander Paris - Barrington Research Associates, Inc. Jasper Bibb - Truist Securities, Inc. Terese Wilke Hello, everyone, and welcome to Strat ...

INVESTOR PRESENTATION APRIL 2025 Forward-looking statements Statements Under the Private Securities Litigation Reform Act of 1995 Statements in this presentation are "forward-looking statements" under the federal securities laws. Such statements may be identified by the use of words such as "expect," "estimate," "assume," "believe," "anticipate," "may," "will," "forecast," "outlook," "plan," "project," "potential" and other similar words, and include all statements that are not historical facts, including w ...

Financial Data and Key Metrics Changes - SEI's revenue grew by 5% in Q1 2025, with adjusted operating income increasing by 16% [4] - Operating margin increased to 13.6%, and adjusted earnings per share grew 16% to $1.29 compared to $1.11 in Q1 2024 [5] Business Line Data and Key Metrics Changes - Total enrollment in U.S. Higher Education slightly increased, driven by a 7% rise in employer-affiliated enrollment, offset by lower unaffiliated enrollment [5] - U.S. Higher Education revenue grew by 1%, and operating income increased by 7% from the previous year [6] - ANZ total enrollment decreased by 1%, primarily due to lower international enrollment related to regulatory changes [6] - ANZ revenue increased by 6% on a constant currency basis, driven by pricing, despite reporting an operating loss of $2.2 million [7][8] - Education Technology Services (ETS) segment revenue grew by 45%, with operating income increasing by 37% [9] Market Data and Key Metrics Changes - The percentage of total U.S. higher education enrollment from corporate partnerships reached 31%, an increase of 200 basis points from the prior year [6] - Enrollments in Workforce Edge increased nearly 50%, reaching approximately 2,300 students [10] Company Strategy and Development Direction - The company is focusing on expanding corporate partnerships and deepening relationships in Workforce Edge to drive future growth [15] - There is a strategic shift towards increasing domestic enrollment in Australia and New Zealand [25] Management Comments on Operating Environment and Future Outlook - Management noted that the enrollment slowdown is part of normal cyclicality, with expectations for mid-single-digit growth in the future [14] - Confidence was expressed regarding the performance in 2025 aligning with the notional model outlined at Investor Day [31] Other Important Information - The company repurchased approximately 390,000 shares for a total of $32 million during the quarter, with $197 million remaining in share repurchase authorization [10] Q&A Session Summary Question: U.S. Higher Education enrollment growth has slowed; any specific changes? - Management indicated no changes in marketing or advertising, attributing the slowdown to normal cyclicality [14] Question: What is driving the strong EPS numbers? - The strength in Sofia and increased marketing investments were highlighted as key drivers [17] Question: Comments on persistence rates? - Persistence rates were stable, with slight improvements noted [23] Question: Discussion on international enrollment and domestic growth in ANZ? - Management explained that regulatory changes impacted international enrollment, while domestic marketing efforts have been increased [25][27] Question: Adjusted operating expenses were up; any comments? - Management confirmed that spending plans remain on track, with some timing differences in headcount affecting the first quarter [29] Question: Confidence in revenue growth aligning with the notional model? - Management expressed confidence that revenue growth would align with the 4% to 6% target [39]

Strategic Education (STRA) came out with quarterly earnings of $1.30 per share, beating the Zacks Consensus Estimate of $1.01 per share. This compares to earnings of $1.11 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.71%. A quarter ago, it was expected that this for-profit education company would post earnings of $1.19 per share when it actually produced earnings of $1.27, delivering a surprise of 6.72%.Over the last fou ...

Exhibit 99.1 STRATEGIC EDUCATION, INC. REPORTS FIRST QUARTER 2025 RESULTS Three Months Ended March 31 U.S. Higher Education Segment Highlights Education Technology Services Segment Highlights • The Education Technology Services segment (ETS) is comprised primarily of Enterprise Partnerships, Sophia Learning, and Workforce Edge. 1 • Revenue increased 4.6% to $303.6 million compared to $290.3 million for the same period in 2024. Revenue on a constant currency basis, which is a non-GAAP financial measure, incr ...

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Strategic Education (STRA) . This company, which is in the Zacks Schools industry, shows potential for another earnings beat.This for-profit education company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 24.97%.For ...

Strategic Education (STRA) has been beaten down lately with too much selling pressure. While the stock has lost 18% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.Guide to Identifying Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator ...

Strategic Education, Inc. (STRA) , or SEI, reported mixed results for the fourth quarter of 2024. Its adjusted earnings topped the Zacks Consensus Estimate, while revenues missed the same. On a year-over-year basis, the top line grew while the bottom line tumbled.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The quarter witnessed robust employer-affiliated enrollment, strong growth from Sophia Learning subscriptions and another quarter of total enrollment growth in the Australia/New ...

Financial Data and Key Metrics Changes - For the full year 2024, revenue increased by 8% and operating income increased by 26%, resulting in almost 200 basis points of operating margin expansion [6] - Adjusted earnings per share grew by 31% for the year to $4.87 [7] Business Line Data and Key Metrics Changes - In US higher education, revenue increased by 5% for the year, but decreased in the fourth quarter due to higher scholarships and a shift towards employer-affiliated students [8] - The Australia and New Zealand segment saw revenue growth of 11% on a constant currency basis, driven by enrollment growth and higher revenue per student [9] - The education technology services segment achieved record revenue growth of over 30% to exceed $100 million, with operating income increasing by almost 50% [12] Market Data and Key Metrics Changes - US higher education average total enrollment grew by 6% in 2024, with employer-affiliated enrollment growing by 16% [7] - The Australia and New Zealand segment's average total enrollment grew by 5% for the year [8] Company Strategy and Development Direction - The company continues to focus on productivity and disciplined cost management, which allowed expense growth to remain below revenue growth in US higher education [8] - The network of corporate partners is a major competitive strength, with over 70% of incremental total enrollment in US higher education coming through these partnerships [14] - The company plans to market more towards the domestic Australian market to counteract potential enrollment caps [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential, projecting mid-single-digit growth in US higher education and high single-digit growth in Australia and New Zealand [41] - The company is monitoring the evolving political and regulatory environment in Australia, particularly regarding international student immigration [11][22] Other Important Information - The company generated approximately $217 million pretax cash from operations in 2024, with $128 million of distributable free cash flow remaining after taxes and capital expenditures [15] - The company repaid a $61 million balance on its revolver and refinanced a $250 million revolver, ending 2024 with just under $200 million in cash and marketable securities [16] Q&A Session Summary Question: Enrollment trends and growth expectations - Management noted that corporate partnership enrollment remains strong, and while growth may normalize to long-term trends, they expect fluctuations in quarterly performance [20] Question: Regulatory changes in Australia and New Zealand - Management explained that the proposed international student caps were replaced with a ministerial direction focusing on visa processing times, which may impact enrollment later in the year [22][25] Question: Impact of US government changes on business - Management indicated that they have a significant presence among federal government employees and are monitoring the situation as new political appointees are confirmed [27] Question: Adjusted operating expenses and future guidance - Management confirmed that the adjusted operating expense of $271 million in 2024 is expected to be appropriate for 2025, with some seasonality in marketing investments [38] Question: Revenue per student decline in US higher education - Management attributed the decline to a shift towards employer-affiliated students and higher scholarships, expecting revenue per student to remain stable in 2025 [54]

Financial Performance - The company generated revenue of $1.2 billion in 2024[17]. - Capella University derived approximately 66.79% of its cash-basis revenues from federal funds in fiscal year 2023, while Strayer University derived approximately 89.48%[176]. Enrollment Statistics - As of the 2024 fall term, total enrollment in the U.S. Higher Education segment was 88,860 students, with 57% in bachelor's programs and 31% in master's programs[20]. - As of December 31, 2024, the total student enrollment in the Australia/New Zealand segment is 19,825, with 47% in bachelor's programs and 25% in master's programs[58]. - Total estimated number of post-secondary students enrolled in the U.S. as of fall 2023 is approximately 18.4 million, with proprietary institutions accounting for about 0.8 million students[78]. - Total enrollment at proprietary colleges increased by 3.2% in fall 2023, marking a recovery trend post-COVID-19 pandemic[78]. Student Demographics - Approximately 70% of students in the U.S. Higher Education segment were age 31 or older, and 78% of self-reported gender were female[20]. - Approximately 52% of students enrolled in the ANZ institutions are domestic students, while 48% are international students[60]. Institutional Offerings - Capella University offers a variety of undergraduate and graduate programs, with approximately 57% of its students enrolled in master's and doctoral programs[22]. - Strayer University offers a diverse range of programs, including undergraduate and graduate degrees in business, criminal justice, education, health services, information technology, and public administration, primarily online[39]. - The company offers a diversified program portfolio, including Strayer University's undergraduate programs and Capella University's graduate-focused, competency-based programs[85]. Accreditation and Compliance - The Higher Learning Commission reaffirmed Capella University's accreditation, allowing continued participation in Title IV programs[109]. - Strayer University has been institutionally accredited by Middle States since 1981, with the current accreditation period extending into 2025[113]. - Strayer University is required to submit annual reports on student achievement and financial sustainability as part of its accreditation process[115]. - Capella University and Strayer University maintain eligibility for Title IV programs, including Federal Grants and Federal Direct Student Loans[152]. Financial Aid and Scholarships - The company has expanded its offering of student success scholarships to promote affordability and encourage enrollment[37]. - Strayer University provides scholarships and tuition discounts, including a Graduation Fund that offers qualifying students one free course for every three courses completed[51]. - Under the Post-9/11 GI Bill, eligible veterans can receive tuition benefits up to approximately $28,937 for non-public domestic institutions for the 2024-2025 academic year[148]. Operational Strategies - The company operates in three reportable segments: U.S. Higher Education, Australia/New Zealand, and Education Technology Services[17]. - The acquisition of Torrens University and associated assets in Australia and New Zealand is part of the company's growth strategy[15]. - The company is actively building relationships with employers to create education benefits programs, which are a significant source of corporate-funded enrollment[88]. Technology and Innovation - The company aims to enhance student experience through technology, including artificial intelligence and automation, to improve support services[86]. - The company reported a focus on innovation and investment in educational experiences to improve student success and employment outcomes[83]. Sustainability Initiatives - The company is committed to energy-saving initiatives, including the use of LED lighting and water-efficient fixtures across its campuses[96]. - The company securely recycled approximately 50 U.S. short tons of paper between January 2021 and December 2022, with an additional 8 and 7 U.S. short tons recycled in 2023 and 2024, respectively[96]. Employee Engagement - The company employs 3,801 full-time employees worldwide, with 2,906 based in the U.S. and 895 outside the U.S.[87]. - The company has a comprehensive benefits package that includes a 401(k) Plan and Employee Stock Purchase Plan, aimed at promoting financial wellness among employees[92]. - The company prioritizes the development of high-performing employees to foster a strong, diverse succession pipeline[93]. Regulatory Environment - The Department of Education requires institutions to maintain a composite score of at least 1.5 to be deemed financially responsible without further oversight[163]. - Institutions must report triggering events related to financial responsibility within 21 days, which may result in financial protection requirements ranging from 10% to 50% of Title IV funds[167]. - The Department of Education's final regulations regarding Borrower Defense to Repayment (BDTR) became effective on July 1, 2023, establishing a streamlined process for claims[204].