Strategic Education(US:STRA)2025-11-06 21:07Enrollment Trends - As of Q3 2025, USHE enrollment decreased by 1.0% to 85,640 compared to 86,533 in Q3 2024[152] - Australia/New Zealand enrollment decreased by 2.1% to 18,808 in Q3 2025 compared to 19,205 in Q3 2024[159] - Employer-affiliated enrollment as a percentage of USHE enrollment increased to 32.7% in Q3 2025 from 29.8% in Q3 2024[153] - Trailing 4-quarter student persistence within USHE was 87.8% in Q2 2025, up from 87.0% in Q2 2024[152] Financial Performance - Revenue for Q3 2025 was $319.9 million, a 4.6% increase from $306.0 million in Q3 2024, driven by higher revenue in the ETS segment and USHE segment[173][175] - Net income for Q3 2025 decreased to $26.6 million from $27.7 million in Q3 2024, with diluted earnings per share remaining at $1.15[174][181] - Consolidated revenue increased to $945.0 million for the nine months ended September 30, 2025, up from $908.5 million in the same period in 2024, driven by a 46.8% increase in ETS segment revenue to $109.3 million[182] - Net income increased to $88.7 million for the nine months ended September 30, 2025, compared to $87.3 million in the same period in 2024[189] Segment Performance - USHE segment revenue increased 2.6% to $213.1 million in Q3 2025, while total enrollment decreased 1.0% to 85,640[175] - ANZ segment revenue decreased 4.7% to $68.6 million in Q3 2025, attributed to unfavorable foreign currency exchange impacts and a decrease in enrollment[175] - ETS segment revenue surged 45.6% to $38.3 million in Q3 2025, driven by new employer partnerships and growth in Sophia Learning subscriptions[175] Costs and Expenses - Consolidated instructional and support costs were $162.7 million in Q3 2025, unchanged from Q3 2024, with costs as a percentage of revenues decreasing to 50.9%[176] - General and administration expenses decreased to $105.9 million in Q3 2025, with expenses as a percentage of revenues decreasing to 33.1%[177] - Restructuring costs increased significantly to $14.3 million in Q3 2025 from $0.8 million in Q3 2024, primarily due to severance and asset impairment charges[178] - Consolidated instructional and support costs increased to $487.2 million, but as a percentage of revenues, it decreased to 51.6% from 53.2%[183] Cash Flow and Investments - Net cash provided by operating activities increased to $159.0 million for the nine months ended September 30, 2025, compared to $153.4 million for the same period in 2024[203] - Net cash used in investing activities decreased to $0.5 million for the nine months ended September 30, 2025, from $15.2 million in 2024[204] - Share repurchases increased significantly to $94.3 million during the nine months ended September 30, 2025, compared to $5.0 million in the same period of 2024[206] Foreign Currency Exposure - Revenues from foreign currencies accounted for 19.7% of consolidated revenues for the nine months ended September 30, 2025, exposing the company to foreign currency risk[211] - A hypothetical 10% adverse change in foreign currency exchange rates would have decreased consolidated revenues by approximately $18.6 million for the nine months ended September 30, 2025[211] Strategic Initiatives - The acquisition of Media Design School at Strayer was completed on September 8, 2025, and it will operate as a wholly owned subsidiary of Strayer University[159] - The company continues to invest in strategies to provide affordable education and support student success[155] - The company emphasizes the importance of employer relationships in driving student enrollment and revenue for its education programs[153]