Summary of Lincoln Educational Services FY Conference Call Company Overview - **Company**: Lincoln Educational Services (NasdaqGS:LINC) - **Industry**: Vocational and Technical Education - **Market Position**: Largest provider of automotive and skilled trades education east of the Mississippi, typically ranked as the number one or two provider in its markets [3][21] Core Insights and Arguments - **Skills Gap**: There is a significant skills gap in the labor market, exacerbated by the removal of vocational training from high schools, leading to a shortage of skilled tradespeople [2][3] - **Growth Trends**: The company has experienced growth in high single digits to mid-teens since COVID, as more individuals seek alternatives to traditional college education [4][30] - **Business Model**: The business model is profitable with approximately 30% of additional revenue contributing to the bottom line. The company has $5 million in debt, expected to be zero by year-end, primarily due to leases [5][26] - **New Campus Openings**: Lincoln Tech is expanding its footprint with new campuses, including a recently opened campus in Houston and plans for a new campus in Rowlett, Texas, and Hicksville, Long Island [7][8][9] - **Market Demand**: The demand for trades education is increasing, driven by the retirement of baby boomers and the essential nature of trades jobs during COVID [13][17] Financial Performance - **Revenue Growth**: Revenues increased by 25% in the third quarter, with starts growing by 6% [6][26] - **Future Guidance**: The company raised its revenue guidance to a midpoint of $500 million with an EBITDA of around $66 million for the upcoming year [7][9] - **EBITDA Margins**: Anticipated EBITDA margins to increase by about 150 basis points annually over the next three to four years, aiming for high teens margins [26] Strategic Initiatives - **Hybrid Learning Model**: The introduction of a blended learning model (Lincoln 10.0) allows students to complete 30% of their coursework online, enhancing flexibility and efficiency [6][12] - **Focus on Core Programs**: The company is narrowing its focus to seven to eight core programs to enhance quality and market presence [28] - **Acquisition Strategy**: Preference for opening new campuses over acquisitions due to regulatory ease and operational control, although potential acquisitions in specific trades are considered [10][11] Market Dynamics - **Competition**: The company competes with community colleges and other vocational schools, emphasizing its higher graduation and job placement rates [19][20] - **Institutional Ownership**: Approximately 72-73% of the company is owned by institutional investors, with a focus on attracting more institutional interest [38] Additional Considerations - **Regulatory Environment**: The company operates in a highly regulated industry, with a focus on maintaining compliance and quality outcomes to attract students [24][32] - **Student Demographics**: About 70% of students receive Pell Grants, with an average debt of $14,000 upon graduation, translating to manageable monthly payments [45][46] - **Future Outlook**: The company plans to continue expanding its campus network, aiming for two new campuses annually, and is well-positioned to capitalize on the growing demand for skilled trades education [30][31]

Layoff announcements skyrocketed toward the end of 2025, as generative AI and economic tightening pressure corporations to restructure their workforces. Many companies are cutting costs by trimming middle management and, in certain industries, eliminating entry level roles that can be replaced by AI. But layoffs aren't the only thing experts are concerned about.Generative AI is speeding up how people work, but that efficiency can come at the trade off of maintaining skills and rising up the corporate ladder ...

Financial Performance & Growth Strategy - Lincoln's Q1 2025 revenue reached $117.5 million, marking a $16.2 million increase compared to the previous year[71] - Adjusted EBITDA for Q1 2025 was $10.6 million, a $4.1 million increase year-over-year[71] - The company projects 2027 revenue to reach $550 million and adjusted EBITDA to $60.5 million[9] - Lincoln anticipates net income of approximately $36 million and EPS of $1.13 by 2027[9] - The company's growth strategy includes new program development, strategic acquisitions, and new school construction to expand market share and diversify program offerings[7] Hybrid Learning Model & Campus Expansion - Lincoln's hybrid learning model aims to expand capacity at existing campuses and generate instructional cost savings[13] - New campuses are expected to generate approximately $6 million of EBITDA 36 months after opening[7] - A new campus pro-forma hybrid learning model anticipates approximately $4.5 million of EBITDA loss prior to opening, with profitability within two years of class start and an average population of approximately 700 students by Year 4[15] - Capital expenditures for new and relocated campuses and new programs are projected at $60 million in 2025[90] Market Position & Compliance - Over 95% of Lincoln's students are pursuing careers considered essential critical infrastructure workers by the U S Department of Homeland Security[21] - The company's 90/10 actual ratio is 82% overall, indicating strong revenue from non-federal financial aid sources[50] - Lincoln maintains a composite score of 2.5, reflecting overall financial health[50]

Core Insights - A new study reveals a significant AI skills gap between finance students and seasoned finance professionals, highlighting the need for improved AI readiness in the finance sector [1][3][4] AI Readiness and Skills Gap - Two-thirds (66%) of current corporate finance professionals report using AI at work, while 86% of all respondents believe they will use AI tools in their careers [2] - There is a notable decline in AI skills readiness as professionals gain experience; 89% of finance students feel prepared to use AI, compared to only 54% of professionals with over 10 years of experience [3] - Over half (57%) of finance professionals identify a generational technology divide as a significant issue within their organizations, with the AI skills gap being a major contributor [3] Gender Disparities in AI Adoption - Male finance professionals report higher AI usage (71%) compared to female professionals (61%), indicating a gender gap in technology adoption [5] - Among young finance professionals, only 56% of young women feel prepared to use AI, compared to 69% of young men [6] - In finance education, only 12% of female students expect to rely heavily on AI, versus 68% of male students, reflecting a broader trend in expectations and experience [7] Career Expectations vs. Reality - The top motivators for pursuing a finance career include job stability (63%), high salary (57%), and a clear roadmap for career growth (55%) [8] - There is a disconnect between student expectations and the realities of finance careers; 79% of students expect to work less than 40 hours per week, while 58% of current professionals report working 40 hours or more [9][10] - Only 51% of current professionals believe new graduates are adequately prepared for the realities of finance jobs, emphasizing the need for better training [11] Recommendations for Future Success - To bridge the skills gap, the finance industry must invest in early training programs and modern practices that equip new talent with the necessary skills to thrive in a rapidly evolving environment [12]

Core Insights - A significant shortage of skilled technology talent is impeding companies' ability to achieve strategic goals and modernize operations, with 74% of technology leaders planning to hire for growth but 87% facing challenges in finding qualified candidates [1][3] Group 1: Priorities and Challenges - The top priorities for technology leaders in 2025 include addressing technical debt, modernizing IT operations, and driving innovation, necessitating a strategic hiring and development plan [2][3] - Technical debt is identified as a major barrier by 55% of tech leaders, highlighting the need for specialized skills in areas like AI, cloud architecture, and cybersecurity [3] - 76% of tech leaders report skills gaps within their teams, particularly in digital transformation and enterprise resource planning (ERP), with 75% expecting demand for such skills to grow in 2025 [3][4] Group 2: ERP and Digital Transformation - 92% of tech leaders face challenges in hiring for ERP-related roles, with evolving ERP platforms requiring professionals skilled in dynamic, cloud-based solutions [3][4] - The integration of intelligent and real-time ERP systems is essential for modern IT infrastructure, yet finding qualified professionals remains a significant challenge [3] Group 3: Key Areas of Focus - Key focus areas for technology leaders include cybersecurity, AI and machine learning, technology modernization, and cloud initiatives, which are critical for improving productivity and supporting agile operations [4][5]