Strategic Education(US:STRA)2025-11-06 11:48Revenue Growth - Education Technology Services revenue increased by 46% year-over-year (YOY) to $38.3 million, driven by growth in Sophia Learning subscriptions and new Workforce Edge partnerships [3]. - Total revenue for the third quarter of 2025 was $319.9 million, a 4.6% increase from $306.0 million in the same period in 2024 [3]. - Average total subscribers at Sophia Learning increased approximately 42% YOY, with revenue reaching $17.8 million, up from $12.5 million [3]. - U.S. Higher Education segment revenues rose to $213,067 for the three months ended September 30, 2025, compared to $207,709 in 2024, marking a 2.0% increase [21]. - Revenues for Q3 2025 were reported at $319,949,000, reflecting an increase from $305,958,000 in Q3 2024, representing a growth of 4.4% [27]. - Education Technology Services revenues surged to $38,293,000 in Q3 2025, up from $26,301,000 in Q3 2024, representing a growth of 45.7% [27]. Profitability - Adjusted EBITDA rose to $69.6 million, up from $56.2 million for the same period in 2024 [3]. - Adjusted income from operations for Q3 2025 was $51,692,000, up from $37,084,000 in Q3 2024, indicating a significant increase of 39.4% [27]. - The operating margin improved to 16.1% in Q3 2025 compared to 11.6% in Q3 2024 [27]. - Adjusted EBITDA for Q3 2025 reached $69,618,000, compared to $56,236,000 in Q3 2024, marking an increase of 23.7% [28]. - The operating margin for the three months ended September 30, 2025, improved to 16.0%, up from 11.6% in the same period of 2024 [24]. Net Income - Net income for the third quarter was $26.6 million, compared to $27.7 million in the same period in 2024 [3]. - Net income for Q3 2025 was $26,630,000, a decrease from $27,748,000 in Q3 2024, showing a decline of 4.0% [28]. - Adjusted net income for the three months ended September 30, 2025, was $37,749, compared to $27,945 in 2024, indicating a significant increase of 35.2% [24]. Cash Flow and Dividends - Free cash flow for the first nine months of 2025 was $127.0 million, compared to $124.1 million for the same period in 2024 [7]. - The company declared a quarterly cash dividend of $0.60 per share, payable on December 8, 2025 [9]. - The company paid common dividends totaling $43,387 for the nine months ended September 30, 2025, compared to $44,262 in 2024, indicating a decrease of 2.0% [19]. - Free cash flow for the nine months ended September 30, 2025, was $126,993,000, slightly higher than $124,080,000 for the same period in 2024, reflecting a growth of 2.3% [29]. Operational Performance - Income from operations for the U.S. Higher Education segment was $22.9 million, compared to $11.4 million in the same period in 2024, with an operating income margin of 10.7% [10]. - Income from operations for the three months ended September 30, 2025, was $37,042, a slight increase from $36,326 in the same period of 2024, reflecting a growth of 2.0% [21]. - Restructuring costs for Q3 2025 amounted to $14,251,000, compared to $758,000 in Q3 2024, indicating a significant increase due to ongoing restructuring efforts [27]. Assets and Liabilities - Total assets as of December 31, 2024, were $2,049,735, a decrease from $2,111,963 as of September 30, 2025 [18]. - Total liabilities decreased to $387,236 as of December 31, 2024, from $455,860 as of September 30, 2025, showing a reduction of 15.0% [18]. - Cash, cash equivalents, and restricted cash at the end of the period for September 30, 2025, were $160,511, down from $207,621 at the end of the previous period [19]. Shareholder Information - Diluted earnings per share remained unchanged at $1.15, while adjusted diluted earnings per share on a constant currency basis increased to $1.64 from $1.16 [3]. - The weighted average shares outstanding remained constant at 23,209,000 for both Q3 2024 and Q3 2025, ensuring that earnings per share comparisons are consistent [27].