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 June 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 | Maryland | | 52-1975978 | | --- | --- | --- | | (State or other jurisdiction of | | (I.R.S. Employer | | incorporation or organization) | | Identifi ...

Strategic Education Inc. (NASDAQ:STRA) Q2 2023 Earnings Call Transcript July 27, 2023 10:00 AM ET Company Participants Terese Wilke - Director of Investor Relations Karl McDonnell - President and Chief Executive Officer Daniel Jackson - Executive VP and CFO Robert Silberman - Chairman Conference Call Participants Jeff Silber - BMO Capital Markets Jasper Bibb - Truist Securities Alex Paris - Barrington Research Heather Balsky - BofA Operator Welcome to Strategic Education's Second Quarter 2023 Results Confer ...

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, 2023 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) ...

Financial Data and Key Metrics - Revenue in U.S. Higher Education increased by just over 0.5% to $197 million, with revenue per student decreasing slightly due to strong employer-affiliated enrollments [2] - Education, Technology & Services (ETS) division saw a 25% increase in revenue and a 23% increase in operating income, though operating margin contracted slightly to 31.8% from 32.3% [3] - Restructuring costs in the quarter were $5.6 million, primarily due to lease impairment charges [22] Business Line Data and Key Metrics - U.S. Higher Education division grew total enrollment by 2.3%, with employer-affiliated enrollments growing 13% at Capella, 25% at Strayer, and 17% across all U.S. higher education [2] - Sophia total paid subscribers grew 24%, and Sophia revenue increased 36% [3] - SEI enrollments from Workforce Edge increased 230% to 986 enrollments [3] Market Data and Key Metrics - Revenue in Australia and New Zealand decreased by 8% on a constant currency basis due to adjustments in the academic calendar at Torrens University [4] - Enrollment in Australia and New Zealand was down 6.3%, with revenues down 14% (8% on constant currency) [26] Company Strategy and Industry Competition - The company continues to invest in Sophia and Workforce Edge, which are driving growth in the ETS division [3] - The company expects the Australian government's decision to require students on active visas to attend classes full-time by June to be a positive catalyst for ANZ enrollment in the second half of the year [21] Management Commentary on Operating Environment and Future Outlook - The company expects revenue to grow mid-single digits for the full year, with expenses increasing no more than 3% [7] - The company is optimistic about the second half of the year in Australia, as it will be the first fully normalized period for international student immigration since the pandemic [4] Other Important Information - The company announced an Investor Day to be held on November 7 at the Palace Hotel in New York City [5] - The company does not expect to be impacted by regulatory changes related to online program management companies (OPMs) [33] Q&A Session Summary Question: Guidance for 2023 revenues and enrollments - The company expects revenue to grow mid-single digits, with expenses increasing no more than 3% [7] Question: U.S. higher education enrollment trends by program type - FlexPath at Capella continues to be a major source of growth, while Strayer's growth is predominantly at the undergraduate level [8] Question: Enrollment trends in Australia and New Zealand - The company expects the bulk of revenue from ANZ to hit in the back half of the year, particularly in the fourth quarter [20] Question: Impact of restructuring costs - The $5.6 million restructuring costs were in line with expectations, primarily due to lease impairment charges [22] Question: Exposure to VA and TA at Strayer and Capella - The company has more exposure to VA at Strayer than at Capella but does not expect any compliance-related issues on 90-10 [35] Question: Regulatory changes related to OPMs - The company does not work with OPMs and does not expect to be impacted by any regulatory changes [33]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Exact name of registrant as specified in its charter) FORM 10-K (State or other jurisdiction of incorporation or organization) Maryland 52-1975978 (Mark One) (I.R.S. Employer Identification Number) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 F ...

Forward-Looking Statements | --- | --- | |-------------------------|---------------------------------------------------------------------------------------------------------------------------------| | Segment | Description | | U.S. Higher Education | Strayer University, including the Jack Welch Management Institute, Devmountain, and Hackbright Academy, and Capella University | | Education Technology | Services Employer Solutions, Sophia Learning, and Workforce Edge | | Australia/New Zealand | Torrens Univer ...

Financial Data and Key Metrics Changes - The company's revenue for the full year declined 5.8% to just under $1.1 billion, with a fourth-quarter revenue decline of 1% to $270 million, although the rate of decline improved due to strong enrollment results throughout the year [12][13] - The company ended 2022 with $250 million in cash and marketable securities and $100 million in debt, with 23.9 million shares outstanding [8][9] Business Line Data and Key Metrics Changes - Total enrollment across Strategic Education, Inc. was essentially flat at just under 98,000 students, with a decrease of 80 basis points in the US higher education segment [11] - The US Higher Education segment saw revenue growth of almost 1% in the fourth quarter due to flat enrollment and an increase in revenue per student [14] - The Education, Technology and Services (ETS) segment's revenue increased by 20% to approximately $17 million, although operating income decreased slightly due to continued investments in technology and products [16] Market Data and Key Metrics Changes - Employer affiliated enrollments increased by 17% from the prior year, now comprising more than 24% of total US higher education enrollments, up approximately 350 basis points from the prior year [15] - The Australia/New Zealand segment grew by approximately 4% in the fourth quarter, with revenue essentially flat on a constant currency basis [18] Company Strategy and Development Direction - The company expects enrollment and revenue to be up in the mid-single digits for 2023, with adjustments to the academic calendar at Torrens University to accommodate visa processing delays [20] - The company anticipates that the majority of year-over-year expense growth will occur in the first half of the year, flattening out in the second half, with overall expenses expected to be up no more than 3% from the prior year [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that 2022 would be the trough year for earnings, positioning the balance sheet to support upcoming opportunities and return capital to shareholders [9] - Management noted that demand at Strayer and Capella University is among the strongest seen in several years, returning to pre-pandemic levels [14] Other Important Information - Visa processing issues have improved and are close to returning to pre-pandemic levels, with the Australian government mandating that all international students must be in the country attending classes in person by June [19] - The company does not foresee any material impact from China's recent ban on online foreign university studies, as it has relatively few Chinese students in its international cohort [41] Q&A Session Summary Question: Can you repeat the outlook for 2023? - Management expects revenue to be up in the mid-single digits for the full year, with expenses up no more than 3% [24] Question: Where is the demand coming from in US Higher Education? - Demand is consistently high across both Strayer and Capella, with significant new student growth throughout 2022 [25] Question: How are variable expenses managed with enrollment growth? - The bulk of expenses are fixed, and the current expense base can handle many more students, leading to high marginal contributions from incremental enrollments [35][36] Question: What caused the lower margins in the fourth quarter? - Higher than expected bad debt was noted, typical when new students pay at a lower rate than existing students [37] Question: Are visa processing delays impacting international student enrollment? - There has been some impact, but visa approvals are returning to normal, which is seen as a positive for 2023 [39] Question: Will the recent ban on online studies for Chinese students impact the company? - The company does not expect any material impact from this ruling due to the low percentage of Chinese students in its overall international cohort [41]

Financial Data and Key Metrics Changes - Revenue in Q3 2022 was down less than 1% from the prior year, excluding foreign currency fluctuations [8] - The company expects 2022 to be the trough year for revenue and earnings, with substantial increases anticipated in 2023 [19] Business Line Data and Key Metrics Changes - The U.S. Higher Education segment showed significant strength, with inquiries into Strayer and Capella increasing more than 30% from the prior year [8] - Capella's FlexPath program enrollment grew, now comprising approximately 21% of all U.S. higher education enrollments, an increase of 200 basis points from a year ago [10] - The Education Technology Services (ETS) segment grew revenue by 27% in Q3, although operating income remained flat due to ongoing investments [12] Market Data and Key Metrics Changes - The Australia/New Zealand segment experienced a 2% growth in total enrollment and a 1% revenue growth on a constant currency basis [16] - Visa application processing delays continue to impact international student enrollment in Australia/New Zealand, but the company remains optimistic about future growth as these issues are resolved [17] Company Strategy and Development Direction - The company is focused on improving enrollment through corporate partnerships, which have shown significantly higher growth rates compared to non-affiliated enrollments [9] - Investments in ETS are expected to moderate expense growth significantly in 2023, aiming for margins closer to 50% [13] - The launch of SEI's Faculty Action Center at Torrens is anticipated to enhance student satisfaction and retention [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong demand for postsecondary education, even in the face of potential economic downturns [29] - The company does not foresee significant adverse impacts from a recession, provided that labor participation rates remain within a normalized range [32] Other Important Information - The adjusted tax rate for 2022 is expected to be slightly higher, around 31% [35] - The Australian government plans to rescind a waiver for education visa holders in June 2023, which could catalyze a return of international students [46] Q&A Session Summary Question: Insights on U.S. higher education enrollments - Management noted strength across all student types, with FlexPath and nursing programs at Capella being major growth drivers [24][26] Question: Impact of visa application issues on ANZ enrollment - Management indicated significant delays in visa processing, affecting hundreds of interested students, but expects improvements [27][28] Question: Potential impacts of a U.S. recession - Management believes demand for education will remain strong, with only minor impacts expected unless there is a major economic shock [30][32] Question: Modeling inputs for 2023 expectations - Management stated that total enrollment is likely to decline in the mid-single digits for 2022, with expectations for growth in 2023 [34][37] Question: Bad debt trends in the quarter - The increase in bad debt is attributed to a higher proportion of new students, who typically pay at a lower rate [42][44] Question: Regulatory updates and immigration impacts - Management highlighted the upcoming rescindment of the visa waiver in Australia as a positive catalyst for enrollment [46] Question: Effects of labor participation on business metrics - Management indicated that inquiries and applications for new enrollment would likely be adversely impacted by declines in labor participation [48][50]

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, 2022 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 | | --- | ...

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 June 30, 2022 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 | | --- | --- ...