Attractive Factors of the Stock Solid Enrollment Trends in the USHE: Strategic Education has been witnessing strong enrollment growth in its USHE segment for some time now. During the first quarter of 2024, total student enrollment within this segment increased 9.8% to 87,731 from 79,935 reported a year ago. The primary driver was the increase in employer-affiliated enrollments. The employer-affiliated enrollment grew 22% year over year, which showcases continuous strength in Strategic Education's corporate ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2024 or ☐ Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-21039 Strategic Education, Inc. (Exact name of registrant as specified in this charter) | Maryland | | 52-1975978 | | --- | --- ...

Strategic Education, Inc. (NASDAQ:STRA) Q1 2024 Earnings Conference Call April 25, 2024 10:00 AM ET Company Participants Terese Wilke - Director of Investor Relations, Strategic Education Robert Silberman - Chairman Karl McDonnell - President and Chief Executive Officer Daniel Jackson - Executive Vice President and Chief Financial Officer Conference Call Participants Jeffrey Silber - BMO Capital Markets Jasper Bibb - Truist Securities Emily Marzo - BofA Operator Thank you for standing by, and welcome to the ...

STRATEGIC EDUCATION CONSOLIDATED RESULTS Three Months Ended March 31 U.S. Higher Education Segment Highlights STRATEGIC EDUCATION, INC. REPORTS FIRST QUARTER 2024 RESULTS HERNDON, Va., April 25, 2024 — Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended March 31, 2024. "As we begin a new year, we are pleased with strength across our business and proud of the organization's ongoing commitment to the success of our students," said Karl McDonnel ...

Financial Data and Key Metrics - Revenue for the fourth quarter grew 12.5% to $304 million, with operating income more than doubling to $57 million and operating margin increasing by 870 basis points [60] - Full-year revenue grew 7.4%, operating expenses grew 4%, operating income grew 43%, and operating margin increased by 280 basis points [17] - Earnings per share more than doubled to $1.70 per share in Q4 [60] - The company generated $159 million in pretax cash from operations and sold a campus property for $6 million, resulting in $165 million in generated cash [10] - $42 million was paid in taxes, $37 million was invested in capital and growth expenditures, and $40 million of debt was paid down, leaving $208 million in cash and marketable securities at year-end [10][23] Business Segment Performance Education Technology and Services (ETS) - ETS revenue grew 31% in Q4 and 26% for the full year, with operating income increasing 119% in Q4 and 51% for the full year [2] - Sophia Learning, a direct-to-consumer portal, grew revenue by 42% in Q4 and achieved a 50% operating margin, up from 22% in the prior year, with paid subscribers increasing 44% to over 35,000 [61] - Workforce Edge enrollments doubled year-over-year, with 65 corporate partners and enrollments growing 112% to nearly 1,500 students [100] U.S. Higher Education - Total enrollment grew 11% in Q4 and 7% for the full year, with employer-affiliated enrollment growing 24% in Q4 and 19% for the full year [21] - Revenue grew 9% in Q4 and 6% for the full year, while operating income grew 149% in Q4 and 55% for the full year [56] - Corporate partnerships accounted for 70% of incremental enrollment growth, with retention stable at 87.4% [56] Australia New Zealand (ANZ) - Revenue grew 20% in Q4 and 6% for the full year on a constant currency basis [100] - Domestic and international enrollment is roughly 50-50, with domestic new student enrollment up 20% year-over-year in Q3, while international new students declined slightly [36][67] - The company plans to make substantial investments in ANZ in 2024 to support growth [32] Market and Strategic Insights - The company attributes strong enrollment growth to its network of over 1,000 corporate partnerships, which drove outperformance in U.S. Higher Education [77] - Labor force participation rates are a key macro indicator for future demand, as they reflect employment confidence, which is a predictor of working adults returning to school [31] - The company expects consolidated margins to settle in the low to mid-20s, with fluctuations based on investments made in any given quarter or year [18] Management Commentary on Environment and Outlook - Management remains confident in the quality of Torrens University and Media Design School in New Zealand, with plans for substantial investments in 2024 [32] - The company expects investments in 2024 to be weighted toward the second half of the year, with the exception of Australia, where investments will be made throughout the year [33] - The company is well-positioned to support academic institutions, fund opportunities, and return capital to shareholders in 2024 [23] Other Important Information - The company returned $74 million to shareholders through dividends and share repurchases, with a focus on opportunistic share repurchases at a significant discount to intrinsic value [59][29] - The company targets cash conversion or distributable cash at the same level as adjusted net income, with plans to pay down the revolver and maintain a payout ratio of roughly one-third for dividends [68][75] Q&A Summary Question: Enrollment Growth Drivers - The primary driver of enrollment growth is the company's corporate partnerships, which have seen accelerated growth in the back half of the year [77] - Workforce Edge enrollments doubled year-over-year, contributing significantly to growth [14] Question: ANZ Enrollment and Visa Changes - The company does not expect tighter student visa qualification rules in Australia to adversely impact enrollments, as it takes a measured approach to international recruitment [67] - Domestic new student enrollment was up in Q4, while international new students declined slightly, with overall growth expected in the future [98] Question: Capital Deployment and Share Repurchases - The company plans to pay down the revolver, maintain dividend payouts, and consider opportunistic share repurchases based on stock price relative to intrinsic value [74][29] - Cash conversion is expected to align with adjusted net income moving forward [75] Question: Operating Margin Sustainability - Management expects margins to settle in the low to mid-20s, with fluctuations based on investments, and remains confident in the sustainability of gains [18][92] Question: 2024 Outlook - The company remains comfortable with the preliminary 2024 outlook provided at Investor Day, with no significant changes to the growth drivers or segment performance [19][93]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-21039 STRATEGIC EDUCATION, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...

Exhibit 99.1 STRATEGIC EDUCATION, INC. REPORTS FOURTH QUARTER 2023 RESULTS HERNDON, Va., February 29, 2024 — Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended December 31, 2023. "During 2023, we delivered strong enrollment, revenue, and earnings growth and are proud of the organization's ongoing commitment to the success of our students," said Karl McDonnell, Chief Executive Officer of Strategic Education. "As we begin a new year, we look t ...

Strategic Education Inc. (NASDAQ:STRA) Q3 2023 Earnings Conference Call November 2, 2023 10:00 AM ET Company Participants Terese Wilke - Director of Investor Relations Karl McDonnell - President and Chief Executive Officer Daniel Jackson - Executive Vice President and Chief Financial Officer Conference Call Participants Jeff Silber - BMO Capital Markets Jasper Bibb - Truist Securities Heather Balsky - BofA Operator Good day, and thank you for standing by. Welcome to Strategic Education’s Third Quarter 2023 ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 2023 or ☐ Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from to Commission File No. 0-21039 Strategic Education, Inc. (Exact name of registrant as specified in this charter) | Maryland | 52-1975978 | | --- | - ...

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Strategic Education, Inc.'s unaudited condensed consolidated financial statements, reflecting declines in total assets, stockholders' equity, net income, and cash from operations for the first half of 2023 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | June 30, 2023 | | :--- | :--- | :--- | | **Total current assets** | $329,061 | $350,914 | | **Total assets** | $2,161,747 | $2,142,112 | | **Total current liabilities** | $209,944 | $242,087 | | **Total liabilities** | $525,957 | $543,506 | | **Total stockholders' equity** | $1,635,790 | $1,598,606 | Condensed Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q2 2022 | Q2 2023 | H1 2022 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | $273,564 | $287,680 | $532,419 | $544,286 | | **Income from operations** | $21,865 | $16,817 | $35,306 | $15,468 | | **Net income** | $15,220 | $14,231 | $22,249 | $12,203 | | **Diluted EPS** | $0.63 | $0.59 | $0.92 | $0.51 | Condensed Consolidated Cash Flow Highlights (in thousands) | Cash Flow Activity | Six months ended June 30, 2022 | Six months ended June 30, 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $80,676 | $40,737 | | **Net cash used in investing activities** | ($20,811) | ($23,754) | | **Net cash used in financing activities** | ($57,739) | ($44,431) | | **Net decrease in cash** | ($2,855) | ($29,372) | [Nature of Operations](index=8&type=section&id=1.%20Nature%20of%20Operations) Strategic Education, Inc. provides post-secondary education and job-skill development programs through its U.S. Higher Education, Education Technology Services, and Australia/New Zealand segments - The company's mission is to close the skills gap by providing a direct path between learning and employment[21](index=21&type=chunk) - The three reportable segments are U.S. Higher Education (USHE), Education Technology Services, and Australia/New Zealand[22](index=22&type=chunk) [Revenue Recognition](index=12&type=section&id=3.%20Revenue%20Recognition) Revenue is primarily tuition, recognized ratably, with U.S. Higher Education as the largest segment, and a **$45.3 million** contract liability for the Graduation Fund as of June 30, 2023 Revenue by Segment (in thousands) | Segment | Q2 2022 | Q2 2023 | H1 2022 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | **U.S. Higher Education** | $190,026 | $202,679 | $385,792 | $399,574 | | **Australia/New Zealand** | $67,543 | $65,472 | $116,055 | $106,975 | | **Education Technology Services** | $15,995 | $19,529 | $30,572 | $37,737 | | **Consolidated Revenue** | **$273,564** | **$287,680** | **$532,419** | **$544,286** | - The contract liability for the Graduation Fund, which provides free courses to eligible students, was **$45.3 million** at the end of the period, down from **$46.8 million** at the beginning of the year[63](index=63&type=chunk)[65](index=65&type=chunk) [Restructuring and Related Charges](index=14&type=section&id=4.%20Restructuring%20and%20Related%20Charges) The company incurred **$8.4 million** in severance and **$5.1 million** in lease impairment charges for the first half of 2023, partially offset by a **$2.1 million** gain from a campus sale - For the six months ended June 30, 2023, the company incurred **$8.4 million** in severance charges and **$5.1 million** in right-of-use lease asset impairment charges[70](index=70&type=chunk)[71](index=71&type=chunk) - A gain of **$2.1 million** was recognized in Q2 2023 from the sale of property and equipment of a closed campus[71](index=71&type=chunk) [Goodwill and Intangible Assets](index=17&type=section&id=7.%20Goodwill%20and%20Intangible%20Assets) As of June 30, 2023, the company held **$1.24 billion** in goodwill and **$253.4 million** in net intangible assets, with no impairment charges recorded for the first half of 2023 Goodwill by Segment as of June 30, 2023 (in thousands) | Segment | Goodwill Balance | | :--- | :--- | | U.S. Higher Education | $632,075 | | Australia / New Zealand | $505,907 | | Education Technology Services | $100,000 | | **Total** | **$1,237,982** | - No impairment charges for goodwill or intangible assets were recorded during the three and six months ended June 30, 2023[79](index=79&type=chunk)[82](index=82&type=chunk) [Long-Term Debt](index=20&type=section&id=11.%20Long-Term%20Debt) The company has a **$350 million** revolving credit facility with **$101.3 million** outstanding as of June 30, 2023, amended to replace LIBOR, and remains in compliance with all financial covenants - As of June 30, 2023, the company had **$101.3 million** outstanding under its **$350 million** Revolving Credit Facility[97](index=97&type=chunk) - In June 2023, the credit facility was amended to replace LIBOR with alternative benchmark rates, including Term SOFR, for U.S. dollar-denominated loans[98](index=98&type=chunk) [Segment Reporting](index=21&type=section&id=15.%20Segment%20Reporting) This note details segment performance, showing U.S. Higher Education as the largest revenue contributor but with declining operating income, while Education Technology Services grew in both revenue and operating income for the first half of 2023 Segment Income from Operations (in thousands) | Segment | H1 2022 | H1 2023 | | :--- | :--- | :--- | | **U.S. Higher Education** | $27,334 | $16,330 | | **Australia/New Zealand** | $11,572 | $7,109 | | **Education Technology Services** | $10,015 | $11,962 | | **Consolidated Income from Operations** | **$35,306** | **$15,468** | [Regulation](index=23&type=section&id=17.%20Regulation) This section details regulatory updates including the resumption of federal student loan repayments, the amended 90/10 Rule, proposed Gainful Employment and Financial Responsibility rules, and potential changes to SARA - Federal student loan interest began accruing on September 1, 2023, with repayments resuming in October 2023[117](index=117&type=chunk) - The new 90/10 regulations, effective for fiscal years starting January 1, 2023, expand the definition of federal revenue to include military and veterans' education benefits, increasing compliance risk[118](index=118&type=chunk)[119](index=119&type=chunk) - The Department of Education has proposed new rules on Financial Value Transparency and Gainful Employment, which would establish debt-to-earnings and earnings premium tests for programs to maintain Title IV eligibility[123](index=123&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting Q2 2023 revenue growth driven by USHE enrollment, but a decline in operating income due to lower USHE earnings and restructuring costs, alongside strong liquidity and decreased operating cash flow - Q2 2023 USHE enrollment increased **4.7%** to **80,353**, while Australia/New Zealand enrollment decreased **4.6%** to **17,966** compared to Q2 2022[141](index=141&type=chunk)[144](index=144&type=chunk) - For Q2 2023, bad debt expense was **4.4%** of revenue, compared to **3.2%** for the same period in 2022[158](index=158&type=chunk)[203](index=203&type=chunk) Adjusted (Non-GAAP) Results | Metric | Q2 2022 | Q2 2023 | H1 2022 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | **Adjusted Income from Operations ($M)** | $29.5 | $27.2 | $48.9 | $35.4 | | **Adjusted Net Income ($M)** | $20.5 | $19.7 | $33.5 | $25.5 | | **Adjusted Diluted EPS** | $0.85 | $0.82 | $1.39 | $1.06 | - Net cash provided by operating activities for H1 2023 decreased to **$40.7 million** from **$80.7 million** in H1 2022, driven by lower earnings and working capital changes[198](index=198&type=chunk) - In H1 2023, the company paid **$29.5 million** in dividends and repurchased **$10.0 million** of common stock[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from its **$101.3 million** variable-rate debt and foreign currency risk, with **19.7%** of H1 2023 revenue in foreign currencies, where a 10% adverse change would reduce revenue by **$10.7 million** - The company had **$101.3 million** in variable-rate debt outstanding at June 30, 2023. A **100 basis point** rate increase would add **$3.5 million** in annual interest expense if the full **$350 million** facility were utilized[206](index=206&type=chunk) - Revenues from foreign currencies (primarily Australian Dollar) accounted for **19.7%** of consolidated revenues for the first six months of 2023[208](index=208&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the quarter[210](index=210&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter[210](index=210&type=chunk) [PART II — OTHER INFORMATION](index=41&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation, with management believing the outcomes will not materially adversely affect its financial position, results, or cash flows - The company states that the ultimate outcome of current legal matters is not expected to have a material adverse effect on its consolidated financial position[211](index=211&type=chunk) [Risk Factors](index=41&type=page&id=Item%201A.%20Risk%20Factors) This section updates key regulatory risks, including the amended 90/10 Rule which now includes all federal education assistance, and potential changes to SARA that could restrict for-profit institutions' participation - The 90/10 Rule was amended to include all federal education assistance, such as military tuition assistance and veterans' benefits, in the 90% revenue calculation, effective for fiscal years starting on or after January 1, 2023[213](index=213&type=chunk) - In 2022, Strayer University's 90/10 ratio was **80.57%** and Capella University's was **65.30%** under the old formula[213](index=213&type=chunk) - Proposed changes to the State Authorization Reciprocity Agreement (SARA) could eliminate the ability of for-profit institutions to participate, which would require seeking authorization in each state individually and could materially harm the business[221](index=221&type=chunk)[222](index=222&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2023, the company repurchased **129,073** shares for **$10.0 million**, with **$236.8 million** remaining for repurchases through December 31, 2023 Share Repurchases in Q2 2023 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2023 | — | $— | | May 2023 | 44,371 | $78.87 | | June 2023 | 84,702 | $76.73 | | **Total** | **129,073** | **$77.47** | - As of June 30, 2023, **$236.8 million** remained under the share repurchase authorization, which expires on December 31, 2023[223](index=223&type=chunk) [Other Information](index=44&type=section&id=Item%205.%20Other%20Information) The company will hold annual 'Say-on-Pay' votes, amended CEO Karl McDonnell's employment agreement for a five-year term with a base salary of **$961,175**, and reported no Rule 10b5-1 trading plan changes by directors or officers - The company will hold annual 'Say-on-Pay' advisory votes based on the results of the 2023 Annual Meeting of Stockholders[224](index=224&type=chunk) - CEO Karl McDonnell's employment agreement was amended on July 26, 2023, extending his term for five years with a base salary of **$961,175**[225](index=225&type=chunk) - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2023[226](index=226&type=chunk) [Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the amended employment agreement for CEO Karl McDonnell, the revolving credit facility amendment, and CEO/CFO certifications - Key exhibits filed include the amended employment agreement for CEO Karl McDonnell (Exhibit 10.3) and the Fourth Amendment to the Revolving Credit Agreement (Exhibit 10.2)[227](index=227&type=chunk)