LINCOLN EDUCATIONAL SERVICES CORP (LINC)
SIC breadcrumb: Services > SIC Major Group 82 > SIC 8200 Services-Educational Services
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1286613. Latest filing source: 0001140361-26-007380.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 518,241,000 | USD | 2025 | 2026-03-02 |
| Net income | 19,998,000 | USD | 2025 | 2026-03-02 |
| Assets | 493,164,000 | USD | 2025 | 2026-03-02 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-02. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001286613.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2009 | 2010 | 2011 | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 285,559,000 | 261,853,000 | 263,200,000 | 273,342,000 | 293,095,000 | 335,336,000 | 348,287,000 | 378,070,000 | 440,064,000 | 518,241,000 | ||||
| Net income | -28,304,000 | -11,484,000 | -11,484,000 | 2,015,000 | 48,565,000 | 34,718,000 | 12,634,000 | 25,997,000 | 9,891,000 | 19,998,000 | ||||
| Operating income | -28,914,000 | -4,716,000 | -3,954,000 | 5,238,000 | 14,781,000 | 49,261,000 | 16,278,000 | 33,358,000 | 15,177,000 | 30,312,000 | ||||
| Diluted EPS | -1.21 | -0.48 | -0.48 | 0.08 | 1.49 | 1.04 | 0.36 | 0.85 | 0.32 | 0.64 | ||||
| Operating cash flow | -6,107,000 | -11,321,000 | -1,694,000 | 988,000 | 23,485,000 | 27,447,000 | 882,000 | 25,558,000 | 29,306,000 | 59,311,000 | ||||
| Capital expenditures | 3,596,000 | 4,755,000 | 4,697,000 | 5,385,000 | 5,580,000 | 7,531,000 | 8,986,000 | 40,699,000 | 56,866,000 | 86,633,000 | ||||
| Share buybacks | 26,187,000 | 50,089,000 | 0.00 | 0.00 | 0.00 | 9,445,000 | 891,000 | 0.00 | ||||||
| Assets | 163,207,000 | 155,213,000 | 146,038,000 | 194,763,000 | 245,190,000 | 295,299,000 | 291,566,000 | 345,249,000 | 436,556,000 | 493,164,000 | ||||
| Liabilities | 108,281,000 | 109,400,000 | 106,172,000 | 139,633,000 | 142,141,000 | 153,899,000 | 146,689,000 | 178,445,000 | 258,292,000 | 293,476,000 | ||||
| Stockholders' equity | 54,926,000 | 45,813,000 | 39,866,000 | 43,148,000 | 91,067,000 | 129,418,000 | 144,877,000 | 166,804,000 | 178,264,000 | 199,688,000 | ||||
| Cash and cash equivalents | 21,064,000 | 14,563,000 | 17,571,000 | 23,644,000 | 38,026,000 | 83,307,000 | 46,074,000 | 75,992,000 | 59,273,000 | 28,519,000 | ||||
| Free cash flow | -9,703,000 | -16,076,000 | -6,391,000 | -4,397,000 | 17,905,000 | 19,916,000 | -8,104,000 | -15,141,000 | -27,560,000 | -27,322,000 |
Ratios
| Metric | 2009 | 2010 | 2011 | 2012 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | -9.91% | -4.39% | -4.36% | 0.74% | 16.57% | 10.35% | 3.63% | 6.88% | 2.25% | 3.86% | ||||
| Operating margin | -10.13% | -1.80% | -1.50% | 1.92% | 5.04% | 14.69% | 4.67% | 8.82% | 3.45% | 5.85% | ||||
| Return on equity | -51.53% | -25.07% | -28.81% | 4.67% | 53.33% | 26.83% | 8.72% | 15.59% | 5.55% | 10.01% | ||||
| Return on assets | -17.34% | -7.40% | -7.86% | 1.03% | 19.81% | 11.76% | 4.33% | 7.53% | 2.27% | 4.06% | ||||
| Liabilities / equity | 1.97 | 2.39 | 2.66 | 3.24 | 1.56 | 1.19 | 1.01 | 1.07 | 1.45 | 1.47 | ||||
| Current ratio | 0.97 | 0.94 | 0.88 | 0.88 | 1.11 | 1.85 | 2.07 | 1.83 | 1.23 | 0.86 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001286613.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | 0.00 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.10 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.00 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | -109,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 88,646,000 | 0.57 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | 17,250,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 99,618,000 | 0.07 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 102,522,000 | 6,792,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 103,366,000 | -214,000 | -0.01 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | -214,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 102,914,000 | -0.02 | reported discrete quarter | |
| 2024-Q3 | 2024-06-30 | -682,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 114,410,000 | 0.13 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 119,373,000 | 6,834,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 117,506,000 | 1,944,000 | 0.06 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 1,944,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 116,474,000 | 0.05 | reported discrete quarter | |
| 2025-Q3 | 2025-06-30 | 1,554,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 141,389,000 | 0.12 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 142,872,000 | 12,700,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 143,957,000 | 4,356,000 | 0.14 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001140361-26-020546.
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS All references in this Quarterly Report on Form 10-Q (“Form 10-Q”) to “we,” “our,” “us” and the “Company” refer to Lincoln Educational Services Corporation and its subsidiaries unless the context indicates otherwise. This discussion may contain forward-looking statements, that are based on management's current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects, and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “may,” “will,” “forecast,” “outlook,” “plan,” “project,” or similar words and include, without limitation, statements relating to future enrollment, revenues, revenues per student, earnings growth, operating expenses, capital expenditures, and the effect of pandemics and its ultimate effect on the Company’s business and results. These statements are based on the Company’s current expectations and are subject to a number of assumptions, risks and uncertainties. Additional factors that could cause or contribute to differences between our actual results and those anticipated include, but are not limited to, those described in the “Risk Factors” section of our Form 10-K and in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this Form 10-Q and in our other reports filed with the SEC that advise interested parties of the risks and factors that may affect our business. The Company’s business is organized into two reportable business segments: Campus Operations; and Transitional. The Campus Operations segment includes campuses that are continuing in operation and contribute to the Company’s core operations and performance. The Transitional segment refers to campuses that have been marked for closure and are being taught out. As of March 31, 2026 no campuses were classified in the Transitional segment. We evaluate performance based on operating results. Adjustments to reconcile segment results with consolidated results are included in the caption “Corporate,” which primarily includes unallocated corporate activity. The interim financial statements and related notes thereto appearing elsewhere in this Form 10-Q and the discussions contained herein should be read in conjunction with the annual financial statements and notes thereto included in our Form 10-K, which includes audited Consolidated Financial Statements for the last three fiscal years ended December 31, 2025. General Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our”, and “us”, as applicable) provide diversified career-oriented postsecondary education to recent high school graduates and working adults. The Company, which currently operates 22 campuses in 12 states, recently entered into leases for two new campuses: one in Hicksville, New York, with programs expected to begin by the end of 2026, and one in Rowlett, Texas, a northern suburb of Dallas, where the lease commenced in the fourth quarter of 2025, and programs are expected to begin in the first quarter of 2027. The Company offers programs in skilled trades, automotive, health sciences and information technology. The schools operate under the brands Lincoln Technical Institute, Lincoln College of Technology and Nashville Auto Diesel College. Most of the Company’s campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of our campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of our campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S. Department of Education (the "DOE”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company was incorporated in New Jersey in 2003, as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946. 21 Index Critical Accounting Policies and Estimates For a description of our critical accounting policies and estimates, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” and Note 1 to the Consolidated Financial Statements included in our Form 10-K and Note 1 to the Condensed Consolidated Financial Statements included in this Form 10-Q. Effect of Inflation Inflation has not had a material effect on our operations. Business Strategy We strive to strengthen our position as a leading provider of career‑oriented postsecondary education by continuing to pursue the following strategy: • Expand Geographically. We plan to open new campuses and enter new markets using existing resources or acquisitions. We have signed leases for new campuses in Hicksville, New York, where programs are expected to begin by the end of 2026, and Rowlett, Texas, which is expected to open in the first quarter of 2027. We continue to evaluate opportunities to expand our footprint in markets that support our long-term growth objectives. • Replicate Programs and Expand Existing Areas of Study. We are expanding our program portfolio by introducing in-demand programs across locations. This approach allows us to serve local market needs while leveraging our existing curriculum, faculty expertise, and infrastructure. • Increase Operating Efficiency. We aim to improve margins and scalability by centralizing operations, standardizing curricula, and leveraging technology such as artificial intelligence to streamline campus functions. By continuing to simplify and standardize our operating model, we believe we can enhance efficiency and support sustainable growth across our organization. • Maximize Utilization of Existing Facilities. We focus on increasing facility usage through enrollment growth, the introduction of new programs, and expanded industry partnerships. In addition, our hybrid teaching model provides increased flexibility to align our real estate footprint with evolving instructional needs. • Expand Teaching Platform. We are transitioning to a hybrid teaching platform, Lincoln 10.0, the implementation of which has been substantially completed and is expected to be finalized by the end of 2026 for all planned programs, except for our Licensed Practical Nurse program which should be completed by the end of 2027. This platform is designed to provide greater flexibility, efficiency, and value to students, while supporting a more scalable and standardized academic delivery model. Recent and Planned Campus Openings Campus Location Type Status Opening Date Nashville, TN Campus Relocation Opened March 2025 Levittown, PA Campus Relocation Opened August 2025 Houston, TX New Campus Opened August 2025 Hicksville, NY New Campus In Progress By the end of 2026 Rowlett, TX New Campus In Progress First quarter of 2027 Results of Operations for the Three Months Ended March 31, 2026 The following table sets forth selected Condensed Consolidated Statements of Operations data as a percentage of revenues for each of the periods indicated: Three Months Ended March 31, 2026 2025 Revenue 100 % 100 % Costs and expenses: Educational services and facilities 40.6 % 40.3 % Selling, general and administrative 55.0 % 56.9 % Loss (gain) on sale of assets 0.0 % (0.2 )% Total costs and expenses 95.5 % 97.1 % Operating income 4.5 % 2.9 % Interest expense, net (0.6 )% (0.5 )% Income from operations before income taxes 3.9 % 2.4 % Provision for income taxes 0.9 % 0.8 % Net income 3.0 % 1.7 % 22 Index Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 Consolidated Results of Operations Revenue. Revenue increased $26.5 million, or 22.5% to $144.0 million for the three months ended March 31, 2026, from $117.5 million in the prior year comparable period. Revenue growth was primarily due to a 18.2% increase in average student population driven by 19.5% start growth, with the remainder attributable to tuition increases. Three Months Ended March 31, Consolidated 2026 2025 % change Revenue (millions) $ 144.0 $ 117.5 22.5% Total new student starts 5,509 4,610 19.5% Average student population 18,285 15,469 18.2% End of period student population 18,702 15,904 17.6% Three Months Ended March 31, Consolidated Campus Operations Corporate 2026 2025 2026 2025 2026 2025 REVENUE $ 143,957 $ 117,506 $ 143,957 $ 117,506 $ - $ - COSTS AND EXPENSES: Instructional 27,624 23,015 27,624 23,015 - - Books and tools 9,830 7,709 9,830 7,709 - - Facilities 13,438 13,085 13,438 13,085 - - Depreciation and amortization 7,500 3,600 7,500 3,600 - - Educational services and facilities 58,392 47,409 58,392 47,409 - - Sales and marketing 23,898 19,701 23,898 19,701 - - Student services 7,356 6,237 7,356 6,237 - - Provision for credit losses 13,683 11,835 13,701 11,799 (18 ) 36 Administrative 34,083 28,969 12,873 10,943 21,210 18,026 Depreciation and amortization 132 162 - - 132 162 Selling, general and administrative 79,152 66,904 57,828 48,680 21,324 18,224 Loss (gain) on sale of assets 6 (220 ) 6 (254 ) - 34 Total costs and expenses 137,550 114,093 116,226 95,835 21,324 18,258 OPERATING INCOME (LOSS) $ 6,407 $ 3,413 $ 27,731 $ 21,671 $ (21,324 ) $ (18,258 ) Educational services and facilities expense. Educational services and facilities expense increased by $11.0 million, or 23.2%, to $58.4 million for the three months ended March 31, 2026, compared to $47.4 million for the same period in 2025. This includes $2.9 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett. The increase was primarily driven by costs associated with a larger student population. The remaining increase was attributable to $3.9 million higher depreciation expense, including $0.8 million related to new campuses, largely resulting from capital investments to support our growth initiatives. Selling, general and administrative expense. Selling, general and administrative expense increased by $12.2 million, or 18.3% to $79.2 million for the three months ended March 31, 2026, compared to $66.9 million for the same period in 2025. This includes a $1.9 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett. Selling, general and administrative expenses continued to decline as a percentage of revenue to 55.0% for the three months ended March 31, 2026, compared to 56.9% for the same period in 2025. 23 Index Administrative expenses increased $5.1 million, or 17.7%, primarily driven by costs associated with enrollment growth, due to increased student population, an [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion together with the “Forward-Looking Statements” and the Consolidated Financial Statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that are based on management’s current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors, including those we discuss under “Risk Factors” and “Forward-Looking Statements” and elsewhere in this Annual Report on Form 10-K.
The following generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussion of historical items and year-to-year comparisons between 2024 and 2023 that are not included in this discussion can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024.
GENERAL
Business Activities— Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our”, and “us”, as applicable) provide diversified career-oriented postsecondary education to recent high school graduates and working adults. The Company, which currently operates 22 campuses in 12 states, has entered into leases for two new campuses: one in Hicksville, New York, with programs expected to begin by the end of 2026, and one in Rowlett, Texas, a northern suburb of Dallas, where the lease commenced in the fourth quarter of 2025, and programs are expected to begin in the first quarter of 2027. The Company offers programs in skilled trades, automotive, health sciences and information technology. The schools operate under the brands Lincoln Technical Institute, Lincoln College of Technology and Nashville Auto Diesel College.
Most of the Company’s campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of our campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of our campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S. Department of Education (the “DOE”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company was incorporated in New Jersey in 2003 as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946.
The Company’s business is organized into two reportable business segments: Campus Operations and Transitional. The Company manages its business, evaluates performance and allocates resources based on these reportable business segments.
Campus Operations - The Campus Operations segment includes campuses that are continuing in operation and contribute to the Company’s core operations and performance. All of our campuses continuing in operation are classified in this segment. All of our campuses offer programs across various areas of study.
Transitional – Historically, the Company classified certain campuses as part
of a Transitional segment when such campuses were marked for closure, held for
sale, or taught out. As of December 31, 2025, the Company had no campuses
classified as Transitional. As of December 31, 2024, the net assets for the
Summerlin, Las Vegas campus were classified as held for sale, with operating
results classified within the Transitional segment. The sale of the Summerlin
campus was consummated effective January 1, 2025.
As of December 31, 2025, we had 17,046 students enrolled at 22 campuses. Our average enrollment for the fiscal year ended December 31, 2025 was 16,622 students and our revenues were $518.2 million, which represented an increase of 17.8% over the prior fiscal year. For more information relating to our revenues, profits and financial condition, please refer to our Consolidated Financial Statements included in this Annual Report on Form 10-K.
We believe that we provide our students with the high-quality career-oriented training available for our areas of study in our markets thereby serving students, local employers and their communities. The skills gap continues to expand as talent retires faster than new employees are hired and as the need for education and training increases in all careers with the accelerating pace of technological change.
We offer programs in areas of study that we believe are typically underserved by traditional providers of postsecondary education and for which we believe there exists significant demand among students and employers. Furthermore, we believe our convenient class scheduling, career-focused curricula and emphasis on job placement offer our students valuable advantages that have been previously unaddressed by the traditional academic sector. By combining virtual training with traditional classroom-based training led by experienced instructors, we believe we offer our students a unique opportunity to develop practical job skills in many of the key areas of expected job demand. We believe these job skills enable our students to compete effectively for employment opportunities and to pursue salary and career advancement.
In the last several years, we have further implemented our plan of improving the student experience by adding program offerings, enhancing existing program offerings and expanding geographically with new state of the art campuses. See Part II. Item 8. “Financial Statements and Supplemental Data - Notes to Consolidated Financial Statements – Note 6 Leases and Note 8 Real Estate Transactions.”
35
Index
Our revenues consist primarily of student tuition and fees derived from the programs we offer. Our revenues are reduced by scholarships granted by us to some of our students. We recognize revenues from tuition and one-time fees, such as application fees, ratably over the length of a program, including internships or externships that take place prior to graduation. We also earn revenues from our bookstores, dormitories, cafeterias and contract training services. These non-tuition revenues are recognized upon delivery of goods or as services are performed and represent less than 10% of our revenues.
Our revenues are directly dependent on the average number of students enrolled in our schools and the courses in which they are enrolled. Our average enrollment is impacted by the number of new students starting, re-entering, graduating and withdrawing from our schools. Our diploma/certificate programs range in duration from 27 to 104 weeks, our associate’s degree programs range in duration from 77 to 94 weeks, and students attend classes for different amounts of time per week depending on the school and program in which they are enrolled. Because we start new students every month, our total student population changes monthly. The number of students enrolling or re-entering our programs each month is driven by the demand for our programs, the effectiveness of our marketing and advertising, the availability of financial aid and other sources of funding, the number of recent high school graduates, the job market and seasonality. Our retention and graduation rates are influenced by the quality and commitment of our teachers and student services personnel, the effectiveness of our programs, the placement rate and success of our graduates and the availability of financial aid and other sources of funding. Although similar courses have comparable tuition rates, the tuition rates vary among our numerous programs.
The majority of
students enrolled at our schools rely on funds received under various
government-sponsored student financial aid programs to pay a substantial
portion of their tuition and other education-related expenses. The largest of
these programs are Title IV Programs which represented approximately 85% and 82% of our revenue on a cash basis during fiscal years 2025 and 2024, respectively, while the remainder was primarily derived from state grants
and cash payments made by students. The HEA requires institutions to use the
cash basis of accounting when determining its compliance with the 90/10 Rule. See
Part I, Item 1. “Business - Regulatory Environment.”
We extend credit for tuition and fees to many of our students that attend our campuses. Our credit risk is mitigated by the students’ participation in federally funded financial aid programs unless students withdraw prior to the receipt by us of Title IV Program funds for those students. Under Title IV Programs, the government funds a certain portion of a student’s tuition, with the remainder, referred to as “the gap,” financed by the students themselves under third party private party loans and once these financial options have been fully exhausted, the Company may offer extended payment plans. The gap amount has continued to increase over the last several years as we have raised tuition on average for the last several years by 2-3% per year.
The additional extension of credit that we are providing to students may expose us to greater credit risk and can impact our liquidity. However, we believe that these risks are somewhat mitigated by the following:
●
our internal extension of credit is provided to students only after all other funding resources have been exhausted; thus, by the time this funding is available, students have completed approximately two-thirds of their curriculum and are more likely to graduate and, as a consequence, more likely to pay outstanding tuition amounts;
●
funding for students who interrupt their education is typically covered by Title IV Program funds as long as they have been properly packaged for financial aid.
The operating expenses associated with an existing school do not increase or decrease proportionally as the number of students enrolled at the school increases or decreases. We categorize our operating expenses as:
●
Educational services and facilities. Major components of educational services and facilities expenses include faculty compensation and benefits, expenses of books and tools, facility rent, maintenance, utilities, depreciation and amortization of property and equipment used in the provision of education services and other costs directly associated with teaching our programs excluding student services which is included in selling, general and administrative expenses.
●
Selling, general and administrative. Selling, general and administrative expenses include compensation and benefits of employees who are not directly associated with the provision of educational services (such as executive management and school management, finance and central accounting, legal, human resources and business development), marketing and student enrollment expenses (including compensation and benefits of personnel employed in sales and marketing and student admissions), costs to develop curriculum, costs of professional services, bad debt expense, rent for our corporate headquarters, depreciation and amortization of property and equipment that is not used in the provision of educational services and other costs that are incidental to our operations. Selling, general and administrative expenses also includes the cost of all student services including financial aid and career services. All marketing and student enrollment expenses are recognized in the period incurred.
Real Estate Transactions
Asset Purchase Agreement – Summerlin, Las Vegas
On November 11,
2024, the Company entered into an agreement with DVMD LLS (IntelliTec College)
for the sale of the Summerlin, Las Vegas (“Euphoria”) campus. As a result of
the intended sale, the Company recorded the carrying amount of the net assets
totaling $1.2 million as held for sale on the Consolidated Balance Sheets. The
net assets related to the Summerlin, Las Vegas campus consisted of $2.1 million
in assets and $0.9 million in liabilities. The sale of the Summerlin campus was
consummated effective January 1, 2025.
Purchase and Sale-leaseback Transaction – Philadelphia, Pennsylvania Area Campus
On September 28,
2023, the Company purchased a 90,000 square foot property located at 311
Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million and
subsequently on January 30, 2024 entered into a sale-leaseback transaction for
the same property. During the year ended December 31, 2025, the Company
invested approximately $13.6 million in capital investments.
36
Index
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussions of our financial condition and results of operations are based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the period. On an ongoing basis, we evaluate our estimates and assumptions, including those related to bad debts, goodwill and impairment of long-lived assets and income taxes. Actual results could differ from those estimates. The critical accounting policies discussed herein are not intended to be a comprehensive list of all of our accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not result in significant management judgment in the application of such principles. We believe that the following accounting policies are most critical to us in that they represent the primary areas where financial information is subject to the application of management's estimates, assumptions and judgment in the preparation of our Consolidated Financial Statements.
Revenue recognition. Substantially all of our revenues are considered to be revenues from contracts with students. We determine standalone selling price based on the price at which the distinct services or goods are sold separately. The related accounts receivable balances are recorded in our balance sheets as student accounts receivable. We do not have significant revenue recognized from performance obligations that were satisfied in prior periods, and we do not have any transaction price allocated to unsatisfied performance obligations other than in our unearned tuition. We record revenue for students who withdraw from our schools only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. In addition, to reduce the amount of outstanding accounts receivable balances due from our students, the Company employs a continuous collection effort. Unearned tuition represents contract liabilities primarily related to our tuition revenue. We have elected not to provide disclosure about transaction prices allocated to unsatisfied performance obligations if original contract durations are less than one-year, or if we have the right to consideration from a student in an amount that corresponds directly with the value provided to the student for performance obligations completed to date in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contract with Customers. We have assessed the costs incurred to obtain a contract with a student and determined them to be immaterial.
Allowance for Credit Losses. We define student receivables as a portfolio segment under ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Details considered by management in the estimate include the following:
We extend credit to a portion of the students who are enrolled at our academic institutions for tuition and certain other educational costs. Based upon past experience and judgment, we establish an allowance for credit losses with respect to student receivables which we estimate will ultimately not be collectible. Our standard student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables that considers vintages of receivables to determine a loss rate. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trending analysis and comparing estimated and actual performance. The Company evaluates its provision for credit losses on at least a quarterly basis, considering factors such as micro and macro-economic conditions, the current political climate, and other industry factors.
Management makes a series of assumptions to determine what is believed to be the appropriate level of allowance for credit losses. Management determines a reasonable and supportable forecast based on the expectation of future conditions over a supportable forecast period as described above, as well as qualitative adjustments based on current and future conditions that may not be fully captured in the historical modeling factors described above. All of these estimates are susceptible to significant change.
We monitor our collections and write-off experience to assess whether or not adjustments to our allowance percentage estimates are necessary. Changes in trends in any of the factors that we believe impact the collection of our student receivables, as noted above, or modifications to our collection practices, and other related policies may impact our estimate of our allowance for credit losses and our results from operations.
Because a substantial portion of our revenue is derived from Title IV Programs, any legislative or regulatory action that significantly reduces the funding available under Title IV Programs, or the ability of our students or institutions to participate in Title IV Programs, would likely have a material impact on the realizability of our receivables.
Our bad debt expense as a percentage of revenues for the fiscal years ended December 31, 2025, and 2024 was 11.2% and 12.9%, respectively. A 1% increase in our bad debt expense as a percentage of revenues for the fiscal years ended December 31, 2025, and 2024, would have resulted in an increase in bad debt expense of $5.2 million and $4.4 million, respectively.
We do not believe that there is any direct correlation between tuition increases, the credit we extend to students and our financing commitments. The extended financing plans we offer to our students are made on a student-by-student basis and are predominantly a function of the specific student’s financial condition. We only extend credit to the extent there is a financing gap between the tuition and fees charged for the program and the amount of grants, loans and parental loans each student receives. Each student’s funding requirements are unique. Factors that determine the amount of aid available to a student include whether they are dependent or independent students, Pell Grants awarded, federal Direct Loans awarded, PLUS loans awarded to parents and the student’s personal resources and family contributions. As a result, it is extremely difficult to predict the number of students that will need us to extend credit to them.
Because a substantial portion of our revenues is derived from Title IV Programs, any legislative or regulatory action that significantly reduces the funding available under Title IV Programs or the ability of our students or schools to participate in Title IV Programs could have a material effect on the realizability of our receivables.
Goodwill. Goodwill represents the excess of
purchase price over the fair value of tangible net assets and identifiable
intangible assets of the businesses acquired. The Company tests goodwill for
impairment annually, in the fourth quarter of each year, unless there are
events or changes in circumstances that indicate an impairment may have
occurred. Impairment may result from deterioration in performance, adverse
market conditions, adverse changes in laws or regulations, the restriction of
activities associated with the acquired business, and/or a variety of other
circumstances. If we determine that impairment has occurred, we record a
write-down of the carrying value and charge the impairment as an operating
expense in the period the determination is made.
As of December 31, 2025, goodwill was approximately $10.7 million, or 2.2%, of our total assets.
37
Index
When we perform our annual goodwill impairment assessment we have the option to perform a qualitative assessment based on a number of factors impacting our reporting units. When a qualitative assessment is performed, a number of factors are evaluated to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Our qualitative assessment is subjective. It includes a review of macroeconomic and industry factors, review of financial and non-financial performance measures, including projected student starts and assessment of adverse events that may negatively impact a reporting units carrying value. Adverse events would include, but are not limited to, difficulty in accessing capital, a greater competitive environment, decline in market-dependent multiples or metrics, regulatory or political developments, change in key personnel, strategy, or customers, or litigation. If we conclude based on our qualitative review that it is more likely than not that the fair value of the reporting unit is less than the carrying value, we proceed with a quantitative impairment test.
When we perform our quantitative impairment test we believe that the most critical assumptions and estimates in determining the estimated fair value of our reporting units include, but are not limited to, future tuition revenues, operating costs, working capital changes, capital expenditures and a discount rate. The assumptions used in determining our expected future cash flows consider various factors such as historical operating trends particularly in student enrollment and pricing and long-term operating strategies and initiatives.
If we determine that quantitative tests are necessary, we determine the fair value of each reporting unit using an equal weighting of the discounted cash flow model and the market approach, or if required, we will evaluate other asset value-based approaches. Our judgment is necessary in forecasting future cash flows and operating results, critical assumptions include growth rates, changes in operating costs, capital expenditures, changes in weighted average costs of capital, and the fair value of an asset based on the price that would be received in a current transaction to sell the asset. Additionally, we obtain independent market metrics for the industry and our peers to assist in the development of these key assumptions. This process is consistent with our internal forecasts and operating plans.
For the years ended December 31, 2025 and 2024, there were no impairments related to goodwill.
Impairment of Long-Lived Assets. The Company reviews the carrying value of its long-lived assets and identifiable intangibles for possible impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. For other long-lived assets, including right-of-use (“ROU”) lease assets, the Company evaluates assets for recoverability when there is an indication of potential impairment. Factors the Company considers important, which could trigger an impairment review, include significant changes in the manner of the use of the asset, significant changes in historical trends in operating performance, significant changes in projected operating performance, and significant negative economic trends. If the undiscounted cash flows from a group of assets being evaluated is less than the carrying value of that group of assets, the fair value of the asset group is determined and the carrying value of the asset group is written down to fair value.
When we perform the quantitative impairment test for long-lived assets, we examine estimated future cash flows using Level 3 inputs. These cash flows are evaluated by using weighted probability techniques as well as comparisons of past performance against projections. Assets may also be evaluated by identifying independent market values. If the Company determines that an asset’s carrying value is impaired, it will record a write-down of the carrying value of the asset and charge the impairment as an operating expense in the period in which the determination is made.
For the years ended December 31, 2025 and 2024, there were no impairments related to long-lived assets.
Income taxes. The Company accounts for income taxes in accordance with ASC Topic 740, Income Taxes (“ASC 740”). This statement requires an asset and a liability approach for measuring deferred taxes based on temporary differences between the financial statement and tax bases of assets and liabilities existing at each balance sheet date using enacted tax rates for years in which taxes are expected to be paid or recovered.
In accordance with ASC 740, the Company assesses our deferred tax asset to determine whether all or any portion of the asset is more likely than not unrealizable. A valuation allowance is required to be established or maintained when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. In accordance with ASC 740, our assessment considers whether there has been sufficient income in recent years and whether sufficient income is expected in future years in order to utilize the deferred tax asset. In evaluating the realizability of deferred income tax assets, the Company considers, among other things, historical levels of income, expected future income, the expected timing of the reversals of existing temporary reporting differences, and the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits. Significant judgment is required in determining the future tax consequences of events that have been recognized in our Consolidated Financial Statements and/or tax returns. Differences between anticipated and actual outcomes of these future tax consequences could have a material impact on the Company’s consolidated financial position or results of operations. Changes in, among other things, income tax legislation, statutory income tax rates or future income levels could materially impact the Company’s valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods.
We recognize accrued interest and penalties related to unrecognized tax benefits in income tax expense. During the fiscal years ended December 31, 2025, and 2024, we did not record any interest and penalties expense associated with uncertain tax positions, as we do not have any uncertain tax positions.
Business Strategy
Key elements of our business strategy include:
●
Expand Geographically. We plan to open new
campuses and enter new markets using existing resources or acquisitions. We
opened a new campus in Houston, Texas in August 2025, and
have signed leases for new campuses in Hicksville, New York, where programs are
expected to begin by the end of 2026, and Rowlett, Texas, which is expected to
open in the first quarter of 2027.
38
Index
● Replicate Programs and Expand Existing
Areas of Study. We
are expanding our program portfolio by introducing in-demand offerings at
existing campuses and replicating proven in-demand offerings across locations.
● Increase Operating Efficiency. We aim to improve margins and
scalability by centralizing operations, standardizing curricula, and leveraging
technology such as artificial intelligence to streamline campus functions.
● Maximize Utilization of Existing
Facilities. We focus
on increasing facility usage through enrollment growth, new programs, and
industry partnerships.
● Expand Teaching Platform. We are transitioning to a
hybrid teaching platform, Lincoln 10.0, the implementation of which has been
substantially completed and is expected to be finalized by the end of 2026 for
all planned programs except for Licensed Practical Nursing which will happen in
2027, to offer greater flexibility, efficiency, and value to students.
Recent and Planned Campus Openings
Campus Location
Type
Status
Opening Date
East Point, GA
New Campus
Opened
March 1, 2024
Nashville, TN
Campus Relocation
Opened
March 1, 2025
Levittown, PA
Campus Relocation
Opened
August 1, 2025
Houston, TX
New Campus
Opened
August 1, 2025
Hicksville, NY
New Campus
In Progress
By the end of 2026
Rowlett, TX
New Campus
In Progress
First quarter of 2027
Results of Operations for the Three Years Ended December 31, 2025
The following table sets forth selected consolidated statements of operations data as a percentage of revenues for each of the periods indicated:
Year Ended December 31,
2025
2024
Revenue
100
%
100
%
Costs and
expenses:
Educational
services and facilities
39.6
%
41.3
%
Selling,
general and administrative
54.6
%
55.4
%
(Gain) loss on
sale of assets
(0.1
)%
0.5
%
Gain on
insurance proceeds
0.0
%
(0.6
)%
Impairment of
goodwill and long-lived assets
0.0
%
0
%
Total costs and
expenses
94.2
%
96.6
%
Operating
income
5.8
%
3.4
%
Interest
expense, net
(0.7
)%
(0.1
)%
Pension excise
tax
(0.2
)%
0
%
Income from
operations before income taxes
5.2
%
3.3
%
Provision for
income taxes
1.2
%
1.1
%
Net income
4.0
%
2.2
%
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Consolidated Results of Operations
Revenue. Revenue increased $78.2, or 17.8% to $518.2 million for the fiscal year ended December 31, 2025 from $440.1 million in the prior year. Revenue growth was primarily due to a 15.2% increase in average student population.
Year ended December 31,
Consolidated
2025
2024
Revenue (millions)
$
518.2
$
440.1
Total new student starts
20,906
18,660
Average student population
16,622
14,426
End of period student population
17,046
15,138
Year Ended December 31,
Consolidated
Campus Operations
Transitional
Corporate
2025
2024
2025
2024
2025
2024
2025
2024
REVENUE
$
518,241
$
440,064
$
518,241
$
432,966
$
-
$
7,098
$
-
$
-
COSTS AND EXPENSES:
Instructional
98,460
90,566
98,460
88,207
-
2,359
-
-
Books and tools
36,603
32,146
36,603
31,161
-
985
-
-
Facilities
50,098
46,791
50,098
45,842
-
949
-
-
Depreciation and amortization
20,228
12,256
20,228
12,200
-
56
-
-
Educational services and facilities
205,389
181,759
205,389
177,410
-
4,349
-
-
Sales and marketing
84,551
75,236
84,551
73,532
-
1,704
-
-
Student services
25,424
21,874
25,424
21,012
-
862
-
-
Provision for credit losses
58,085
56,578
58,050
55,600
-
975
35
3
Administrative
114,283
89,415
46,571
41,235
-
1,236
67,712
46,944
Depreciation and amortization
603
700
-
-
-
-
603
700
Selling, general and administrative
282,946
243,803
214,596
191,379
-
4,777
68,350
47,647
(Gain) loss on sale of assets
(406
)
2,119
(442
)
619
-
11
36
1,489
Gain on insurance proceeds
-
(2,794
)
-
-
-
-
-
(2,794
)
Total costs and expenses
487,929
424,887
419,543
369,408
-
9,137
68,386
46,342
OPERATING INCOME (LOSS)
$
30,312
$
15,177
$
98,698
$
63,558
$
-
$
(2,039
)
$
(68,386
)
$
(46,342
)
39
Index
Educational services and facilities expense. Educational services and facilities expense increased $23.6 million, or 13.0% to $205.4 million for the fiscal year ended December 31, 2025 from $181.8 million in the prior year. The increase over the prior year includes approximately $4.3 million reduction related to the Transitional segment, which incurred expenses only in prior year. On a comparable basis, educational services and facilities expense increased by $27.9 million.
The primary driver of the increase was higher costs associated with supporting a larger student population. The remaining increase was attributable to higher depreciation expense, largely resulting from capital investments to support our growth initiatives.
As a percentage of revenue, instructional expenses decreased to 19.0% from 20.6% for the fiscal years ended December 31, 2025, and 2024, respectively. Similarly, educational services and facilities expense as a percentage of revenue declined to 39.6% from 41.3% in the prior year comparable period. Those improvements demonstrate continued margin expansion as we scale operations.
Selling, general and administrative expense. Selling, general and administrative expense increased $39.1 million, or 16.1% to $282.9 million for the fiscal year ended December 31, 2025, from $243.8 million in the prior year. This includes $4.8 million reduction related to the Transitional segment, which had expenses in the prior year but none in the current period. On a comparable basis, selling, general and administrative expense increased $43.9 million.
Administrative expenses rose $24.9 million, or 27.8%, primarily due to increased costs associated with our expanding student population and improved financial performance and a greater number of employee medical claims.
Student services expense increased $3.6 million, or 16.2%, driven by continued investments in staffing and support infrastructure to serve a growing student base.
Marketing expense increased by $5.0 million or 11.6% year over year driven by investments in new programs and initiatives.
Provision for credit losses. While the provision increased in absolute terms, it declined as a percentage of revenue from 12.9% to 11.2% year-over-year.
Selling, general and administrative expense, as a percentage of revenue, was 54.6%, compared to 55.4% in the prior year comparable period.
(Gain) Loss on Sale of Assets. Gain on sale was $0.4 million for the fiscal year ended December 31, 2025, compared to a loss of $2.1 million in the prior year primarily driven by the sale of the Summerlin, Las Vegas campus.
Gain on insurance proceeds. During the year ended December 31, 2024, the Company received gross insurance proceeds in the amount of $2.8 million relating to hail damage at one of our campuses.
Net interest expense. Net interest expense was $3.3 million compared to net interest expense of $0.5 million for the fiscal years ended December 31, 2025 and 2024, respectively, primarily driven by a reduction in interest income resulting from lower average cash balances during the period, as funds were used for capital expenditures, and by higher interest expense on borrowings.
Income taxes. Income tax provision for the year ended December 31, 2025 was $6.1 million, representing effective tax rate of 23.4% of pre-tax income, compared to $4.8 million income tax provision and an effective tax rate of 32.8% the prior year comparable period.
Pension excise tax. The Company terminated its defined benefit pension plan effective December 31, 2024. The plan was settled on December 31, 2025. As a result of the plan termination, the Company received a reversion of excess plan assets of approximately $1.9 million subject to a 50% federal excise tax, which resulted in pension excise tax expense of $0.9 million, recorded in other expense.
40
Index
Segment Results of Operations
The Company’s business is organized into two reportable business segments: Campus Operations and Transitional. These segments are defined below:
Campus Operations – The Campus Operations segment includes all campuses that are continuing in operation and contribute to the Company’s core operations and performance.
Transitional – The Transitional segment refers to campuses that have been marked for closure and are being taught out. As of December 31, 2025, no campuses were classified in the Transitional segment. During the prior year, the Company’s Summerlin, Las Vegas campus was classified in the Transitional segment. The sale of the Summerlin campus was consummated on January 1, 2025.
We evaluate performance based on operating results. Adjustments to reconcile segment results with consolidated results are included in the caption “Corporate,” which primarily includes unallocated corporate activity.
The following table presents selected operating metrics for our two reportable segments for the fiscal years ended December 31, 2025 and 2024:
Year Ended December 31,
2025
2024
% Change
Revenue:
Campus Operations
$
518,241
$
432,966
19.7
%
Transitional
-
7,098
(100.0
)%
Total
$
518,241
$
440,064
17.8
%
Operating Income (loss):
Campus Operations
$
98,698
$
63,558
55.3
%
Transitional
-
(2,039
)
100.0
%
Corporate
(68,386
)
(46,342
)
(47.6
)%
Total
$
30,312
$
15,177
99.7
%
Starts:
Campus Operations
20,906
18,153
15.2
%
Transitional
-
507
(100.0
)%
Total
20,906
18,660
12.0
%
Average Population:
Campus Operations
16,622
14,100
17.9
%
Transitional
-
326
(100.0
)%
Total
16,622
14,426
15.2
%
End of Period Population:
Campus Operations
17,046
14,838
14.9
%
Transitional
-
300
(100.0
)%
Total
17,046
15,138
12.6
%
Year Ended December 31, 2025, Compared to Year Ended December 31, 2024
Campus Operations
Operating income increased $35.1 million, or 55.3% to $98.7 million for the fiscal years ended December 31, 2025, compared to $63.6 million in 2024. The change compared to the prior year was mainly driven by the following factors:
●
Revenue increased $85.3 million, or 19.7% to $518.2 million for the fiscal year ended December 31, 2025 from $432.9 million in the prior year. Revenue growth was primarily due to a 17.9% increase in average student population.
●
Educational services and facilities expense increased $28.0 million, or 15.8% to $205.4 million for the fiscal year ended December 31, 2025 from $177.4 million in the prior year. The primary driver of the increase was attributable to higher costs associated with supporting a larger student population as well as higher depreciation expense, largely resulting from capital investments to support our growth initiatives.
●
Selling, general and administrative expense increased $23.2 million, or 12.1% to $214.7 million for the fiscal year ended December 31, 2025, from $191.4 million in the prior year. The increase was primarily driven by higher sales and marketing expense due to planned investments in new programs and initiatives and higher administrative expenses associated with supporting a larger student population. Additionally, student services costs rose in line with the growing student base.
Transitional
As of December 31, 2025, no campuses were classified in the Transitional segment.
41
Index
In the fourth quarter of 2024, the Board of Directors approved a plan to close the Summerlin, Las Vegas campus. The sale of the Summerlin campus was consummated on January 1, 2025. During the prior year, the Summerlin campus was classified in the Transitional segment.
●
Revenue decreased $7.1 million, or 100% to zero for the fiscal year ended December 31, 2025, from $7.1 million in the prior year.
●
Total operating expenses decreased $9.1 million, or 100% to zero for the fiscal year ended December 31, 2025, from $9.1 million in the prior year.
The change in operating performance was the result of closing the campus and no longer enrolling new students.
Corporate and Other
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $68.3 million for the fiscal year ended December 31, 2025, compared to $46.3 million in the prior year. The increase was primarily driven by higher salaries and benefits due to workforce expansion to support a larger student population and to execute our growth initiatives. Additionally, employee medical claims increased and performance-based incentive compensation increased in line with improved financial performance.
42
Index
LIQUIDITY AND CAPITAL RESOURCES
Our primary
capital requirements are for the maintenance and expansion of our facilities
and the development of new programs. Our principal source of liquidity has been
cash provided by operating activities. The following chart summarizes the
principal elements of our cash flow for each of the three fiscal years in the
period ended December 31, 2025:
Cash Flow Summary
Year Ended December 31,
2025
2024
Net cash provided by operating activities
$
59,311
$
29,306
Net cash (used in) provided by investing activities
$
(86,199
)
$
(46,971
)
Net cash used in financing activities
$
(3,866
)
$
(3,331
)
As of December 31, 2025, the Company had $28.5 million in cash and cash equivalents, compared to $59.3 million in cash and cash equivalents as of December 31, 2024. The change in cash position from the prior year comparable period was primarily driven by increased capital expenditures due to campus expansion.
As of December 31, 2024, the Company had $59.3 million in cash and cash equivalents, compared to $80.3 million in cash and cash equivalents and restricted cash as of December 31, 2023. The change in cash position from the end of the year was driven in part by the payment of incentive compensation during the first quarter and investments in capital expenditures relating to our recently opened East Point, Georgia campus, the new Houston Texas campus, the relocation of each of the Nashville, Tennessee and Levittown, Pennsylvania campuses, and new programs and program expansions. Further, the prior year cash position benefited from $33.3 million in proceeds resulting from the sale of our Nashville, Tennessee property.
On May 7, 2024, the Company announced that its Board of Directors had authorized an extension of its share repurchase program for an additional 12 months through May 24, 2025. During the years ended December 31, 2025 and 2024, the Company did not repurchase any additional shares. As of December 31, 2025, the Company had approximately $29.7 million remaining for additional repurchases under the program.
On December 24, 2024, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”) registering securities for potential future use. Under the Registration Statement, we may sell the securities described in the prospectus from time to time in one or more offerings up to a total dollar amount of $150 million.
Our primary source of cash is tuition collected from our students. The majority of students enrolled at our schools rely on funds received under various government-sponsored student financial aid programs to pay a substantial portion of their tuition and other education-related expenses. The most significant source of student financing is Title IV Programs, which represented approximately 85% of our cash receipts relating to revenues in 2025. Pursuant to applicable regulations, students must apply for a new loan for each academic period. Federal regulations dictate the timing of disbursements of funds under Title IV Programs and loan funds are generally provided by lenders in two disbursements for each academic year. The first disbursement is usually received approximately 31 days after the start of a student’s academic year and the second disbursement is typically received at the beginning of the sixteenth week from the start of the student's academic year. Certain types of grants and other funding are not subject to a 31-day delay. In certain instances, if a student withdraws from a program prior to a specified date, any paid but unearned tuition or prorated Title IV Program financial aid is refunded according to federal, state and accrediting agency standards.
As a result of the significant amount of Title IV Program funds received by our students, we are highly dependent on these funds to operate our business. Any reduction in the level of Title IV Program funds that our students are eligible to receive for tuition payment to us or any restriction on our eligibility to receive Title IV Program funds would have a significant impact on our operations and our financial condition. For more information, See Part I, Item 1A. “Risk Factors - Risks Related to Our Industry”.
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Operating Activities
Operating cash flow results primarily from cash received from our students, offset by changes in working capital demands. Working capital can vary at any point in time based on several factors including seasonality, timing of cash receipts and payments and vendor payment terms.
Net cash provided by operating activities for the years ended
December 31, 2025, and 2024 was $59.3 million and $29.3 million, respectively. The
increase from the prior year was primarily driven by higher net income and
changes in working capital.
Investing Activities
Net cash used in investing activities was $86.2 million for the fiscal year ended December 31, 2025, compared to net cash used in investing activities of $47.0 million for the fiscal year ended December 31, 2024. The primary reason for the decrease in net cash was due to increased investments in capital expenditures in the current year. The December 31, 2024, cash position benefited from several factors including the sale of the Levittown, Pennsylvania property and proceeds received from short-term investments.
We currently lease all of our
campuses, however two are considered finance lease obligations.
Capital
expenditures were 16.7% of revenues in 2025 and are expected to be
approximately 12.1% of revenues in 2026. The increase in capital expenditures
over the prior year was driven by several factors that include but not limited
to the buildout of the Nashville, Tennessee, Levittown, Pennsylvania, Houston,
Texas and Hicksville, New York campuses. In addition, we invested $7.8 million
into expanding programs at the Melrose, Illinois, Allentown, Pennsylvania and
South Plainfield, New Jersey campuses and we invested an additional $22.5
million for educational equipment, real estate improvements, and information
technology across various campuses. We expect to fund future capital
expenditures with cash generated from operating activities and cash on hand.
Financing Activities
Net cash used in financing activities for the fiscal years ended December 31, 2025, and 2024 was $3.9 million and $3.3 million, respectively. The increase in cash used of $0.5 million was primarily driven by $0.4 million lower cash inflows for a tenant allowance relating to one of the Company’s finance leases in the current year.
Credit Facility
On February 16,
2024, the Company entered into a secured credit agreement (as subsequently
amended, the “Fifth Third Credit Agreement”) with Fifth Third Bank, National
Association (the “Bank”), pursuant to which the Company, as borrower, obtained
a revolving credit facility in the aggregate principal amount of $40.0 million
including a $10.0 million letter of credit sublimit and a $20.0 million
accordion feature (as subsequently amended, the “Facility”), the proceeds of
which are to be used for working capital, general corporate and certain other
permitted purposes. The Facility is guaranteed by the Company’s wholly owned subsidiaries and is secured by a first
priority lien in favor of the Bank on substantially all of the personal
property owned by the Company and its subsidiaries. The initial term of the
Facility was 36 months, maturing on February 16, 2027 but, as noted below, the
Facility has since been amended to, among other things, extend the maturity
date to March 7, 2028.
Each advance under the Facility will bear interest on the outstanding principal amount thereof from the date when made at an interest rate determined at the election of the Company at either the Tranche Rate (which is the forward-looking Secured Overnight Financing Rate (SOFR) for one or three months), or the Base Rate (which is a variable per annum rate, as of any date of determination, equal to the Bank’s Prime Rate), plus an Applicable Margin. The Applicable Margin is determined pursuant to a Pricing Grid, which for loans subject to the Tranche Rate varies from 1.75% to 2.50% and for loans subject to the Base Rate varies from 0.75% to 1.50%. The Applicable Margin may change quarterly based on the Total Leverage Ratio at such time. The Total Leverage Ratio is determined with respect to the Company and its subsidiaries on a consolidated basis for an applicable quarterly period by dividing the aggregate principal amount of various forms of borrowed indebtedness as of the last day of a determination period by earnings before interest expense, taxes, depreciation and amortization ("EBITDA") for such period. Interest is paid in arrears, either quarterly or monthly depending on the Company’s interest rate election, with the principal due at maturity.
Under the terms of the Fifth Third Credit Agreement, the Company will pay to the Bank an unused facility fee on the average daily unused balance of the Facility at a rate per annum equal to 0.50%, which fee is payable in arrears on dates when interest is due and payable. For the twelve months ended December 31, 2025 and 2024, the Company paid approximately $0.2 million and $0.2 million, respectively, in unused facility fees, which were expensed as incurred. The Company will also pay to the Bank a letter of credit fee equal to the Applicable Margin for loans subject to the Tranche Rate multiplied by the maximum amount available to be drawn under such letter of credit. For the year ended December 31, 2025 and 2024, the fees were not material.
The Fifth Third Credit Agreement contains customary representations, warranties and affirmative and negative covenants, as well as events of default customary for facilities of this type.
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On July 18, 2024, the Company entered into a first amendment (the “First Amendment”) to the Fifth Third Credit Agreement. Among other things, the First Amendment effects certain modifications to (i) clarify certain representations and affirmative covenants of the Company, (ii) clarify certain conditions to each advance, (iii) clarify and/or replace certain events of default, and (iv) delete or revise certain definitions in order to harmonize them with the other modifications made. The First Amendment also contains customary releases, representations and warranties and reaffirmations consistent with the original terms of the Fifth Third Credit Agreement. Except as set forth above, the First Amendment does not materially alter the Fifth Third Credit Agreement.
On March 11, 2025, the Company entered into a second amendment (the “Second Amendment”) to the Fifth Third Credit Agreement, which increased the aggregate principal amount available under the Facility from $40.0 million to $60.0 million. The Second Amendment also expanded the accordion feature from $20.0 million to $25.0 million and extended the maturity date of the Facility from February 16, 2027 to March 7, 2028. Except as set forth above, the Second Amendment does not materially alter the Fifth Third Credit Agreement.
In connection with the Fifth Third Credit Agreement, total fees paid during 2024 were approximately $0.5 million, which included bank and legal costs, in addition to other customary expenses and reimbursements. These fees were capitalized in the prior year and are being amortized over the term of the Fifth Third Credit Agreement. During the twelve months ended December 31, 2025, the Company incurred additional bank and legal fees of $0.1 million in connection with the Second Amendment. The fees were capitalized and are being amortized over the term of the Second Amendment. For the years ended December 31, 2025 and 2024, interest paid in connection with the Fifth Third Credit Agreement was $0.8 million and $0.2 million, respectively.
As of December 31, 2025, the Company had no debt outstanding under the Facility.
Climate Change
Climate change has not had and is not expected to have a significant impact on our operations.
Contractual Obligations
Current
portion of Long-Term Debt, Long-Term Debt and Lease Commitments. As
of December 31, 2025, we have no debt outstanding. We lease offices,
educational facilities and various items of equipment for varying periods
through the year 2045 at basic annual rental rates (excluding taxes, insurance,
and other expenses under certain leases).
During the fiscal
year ended December 31, 2025, the Company entered into four new operating
leases. The Company obtained the operating right of use (“ROU”) asset in
exchange for an operating lease liability of $27.4 million.
We had no off-balance sheet arrangements as of December 31, 2025, except for existing surety bonds. We are required to post surety bonds on behalf of our campuses and education representatives with multiple states to maintain authorization to conduct our business. At December 31, 2025, we posted surety bonds in the aggregate amount of approximately $20.0 million. These off-balance sheet arrangements do not adversely impact our liquidity or capital resources.
As of December 31, 2025, and 2024, we had outstanding extensions of credit loan principal commitments to our active students of $53.3 million and $44.6 million, respectively. These are institutional loans, extensions of credit and no cash is advanced to students. The full loan amount extension of credit amount is not guaranteed unless the student completes the program. The institutional loans extensions of credit are considered commitments because the students are required to fund their education using these funds and they are not reported in our Consolidated Financial Statements.
SEASONALITY AND OUTLOOK
Seasonality
Our revenue and operating results normally fluctuate as a result of seasonal variations in our business, principally due to changes in total student population. Student population varies due to new student enrollments, graduations and student attrition. Historically, our schools have had lower student populations in our first and second quarters and we have experienced larger class starts in the third quarter and higher student attrition in the first half of the year. The growth that we generally experience in the second half of the year is largely dependent on a successful high school recruiting season. We recruit high school students several months ahead of their scheduled start dates and, as a consequence, while we have visibility on the number of students who have expressed interest in attending our schools, we cannot predict with certainty the actual number of new student enrollments in any given year and the related impact on revenue. Our expenses, however, typically do not vary significantly over the course of the year with changes in our student population and revenue.
Effect of Inflation
Inflation has not had a material effect on our operations.