Strategic Education reports Q2 2026: Revenue $337.3M, Operating income $50.5M, Adj. diluted EPS $1.76

Strategic Education reported second-quarter 2026 results with consolidated revenue of $337.3 million and income from operations of $50.5 million. The company posted net income of $37.2 million and adjusted diluted earnings per share of $1.76 on a constant currency basis. Management highlighted Education Technology Services growth, higher US Higher Education revenue per student, and an Australian reserve related to a Fair Work Ombudsman matter.

Financial Highlights

• Revenue: $337.3 million for the three months ended June 30, 2026, up 4.9% year-over-year (constant currency revenue: $330.2 million, up 2.7%).
• Income from operations: $50.5 million (15.0% of revenue) for Q2 2026; adjusted income from operations on a constant currency basis: $52.7 million (adjusted operating margin 16.0%).
• Net income: $37.2 million for Q2 2026; adjusted net income on a constant currency basis: $38.2 million.
• Adjusted diluted earnings per share (constant currency): $1.76 for Q2 2026 (diluted EPS reported: $1.71); diluted weighted average shares: 21.736 million.
• Adjusted EBITDA: $71.7 million for Q2 2026; free cash flow for the six months ended June 30, 2026: $92.4 million.

Business Highlights

• Education Technology Services (ETS) revenue grew 15.4% to $42.4 million in Q2 2026, driven by a 32% increase in Sophia Learning subscribers and growth in Workforce Edge employer partnerships.
• Sophia Learning revenue rose 26.7% to $20.7 million year-over-year; Workforce Edge reported 81 corporate agreements covering ~4,020,000 employees as of June 30, 2026.
• U.S. Higher Education (USHE) enrollment slightly declined 0.5% to 85,894 students, while employer-affiliated enrollment reached a record 34.7% of USHE enrollment; healthcare now comprises 52% of USHE enrollment and grew 11% year-over-year.
• FlexPath enrollment represented 25% of USHE enrollment (up from 23%), with healthcare programs making up 73% of FlexPath enrollment; Capella launched a Bachelor of Science in Nursing (Prelicensure) for July 2026 enrollment.
• Australia/New Zealand enrollment decreased 5.2% to 17,555 students; ANZ revenue benefited from favorable currency and higher revenue per student but management recorded a $13.9 million reserve related to the Australian Fair Work Ombudsman compliance matter.

Original SEC Filing:

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