STRA · Strategic Education, Inc.

Strategic Education's Q1 2026 results showed modest consolidated revenue growth of 0.8% to $305.9 million, primarily propelled by the Education Technology Services (ETS) segment, which delivered 21% revenue growth to $41.5 million and a 42% jump in operating income to $19.7 million, expanding margins to 47.4% from 40.3%. Key ETS drivers included 40% YoY growth in Sophia Learning subscribers and 32% revenue increase to $19.5 million, alongside new Workforce Edge partnerships reaching 82 corporate agreements covering 4 million employees. This performance offset headwinds in U.S. Higher Education (USHE), where revenue fell 3.8% to $212.6 million amid a 0.8% enrollment decline to 87,165, though employer-affiliated enrollment reached a record 34.5% and healthcare programs grew 10% to 51% of total USHE enrollment. Australia/New Zealand (ANZ) revenue rose 7.4% to $51.8 million on favorable FX, but declined 4% on a constant currency basis due to lower enrollment from regulatory changes. Operating income improved to $41.1 million (13.4% margin) from $39.8 million (13.1%), with net income up to $32.8 million and diluted EPS at $1.48, aided by a reduced share count after repurchasing 493,105 shares for $40 million. Balance sheet remains strong with $162.6 million in cash and equivalents, no debt, and robust operating cash flow of $87.4 million. The company declared a $0.60 per share dividend, signaling confidence in cash generation. No forward guidance was provided in the release.