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Strategic Education (STRA) Q4 Earnings Beat, Enrollment Up
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Strategic Education, Inc. (STRA - Free Report) , or SEI, reported impressive results for fourth-quarter 2023. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.
Growth across its three segments, led by continued enrollment growth in the U.S. Higher Education (“USHE”), which was driven significantly by employer-affiliated enrollment, strong growth in the Education Technology Services (earlier known as Alternative Learning) and improving performance in Australia/New Zealand (“ANZ”), drove the result.
Shares of STRA spiked 16.6% on Feb 29 after its solid earnings performance.
Inside the Headlines
SEI reported adjusted earnings of $1.68 per share, which topped the Zacks Consensus Estimate of $1.37 by 22.6% and rose impressively from the year-ago quarter’s levels of 78 cents.
Strategic Education Inc. Price, Consensus and EPS Surprise
Total revenues of $302.7 million surpassed the consensus estimate of $298 million by 1.6% and increased 12.1% from the year-ago quarter’s level. On a constant currency basis, revenues increased 12.5% to $303.6 million in the quarter.
Total enrollment improved 8% to 105,485 students.
Segment Details
USHE: This segment comprises Strayer and Capella Universities. Segment revenues increased 8.9% year over year to $217.6 million, backed by solid enrollment and revenue per student.
Student enrollment increased 10.5% from the year-ago quarter’s level to 86,233 students. FlexPath enrollment was 21% of USHE enrollment compared with 19% in the year-ago quarter.
During the quarter, the adjusted operating margin rose 850 basis points (bps) to 15.1% from the year-ago quarter.
Education Technology Services: This segment includes Employer Solutions, Workforce Edge and Sophia Learning. The segment’s quarterly revenues were $21.9 million, up 30.7% year over year, backed by growth in Sophia Learning subscriptions and employer-affiliated enrollment.
Sophia Learning’s average total subscribers increased by approximately 44% from the prior-year period’s levels. Employer-affiliated enrollment was 27.7% of USHE enrollment compared with 24.7% in the year-ago period.
Its adjusted operating margin was 40.3% in the reported quarter, up 1,620 bps from a year ago.
ANZ: This segment includes Torrens University, Think Education and Media Design School. The segment's revenues were $63.3 million, up 18.2% year over year due to higher revenue per student. On a constant-currency basis, revenues rose 20% year over year.
Student enrollment within ANZ declined 2% to 19,252 during the reported quarter compared with the year-ago quarter.
Its adjusted operating margin was 23.5%, up 490 bps from a year ago.
Operating Highlights
Adjusted operating income was up 109.2% to $56.6 million from $27.2 million in the year-ago quarter. The adjusted operating margin of 18.7% expanded a whopping 860 bps from the year-ago quarter.
Adjusted EBITDA in the reported quarter was $74.4 million, up from $45.2 million in the year-ago quarter.
2023 Highlights
Total revenues were $1.13 billion compared with $1.03 billion in 2022, up 6.3%. On a constant currency basis, revenues increased 7.4% to $1.14 billion in 2023. Total enrollment improved 4.7% to 100,959 students.
Adjusted earnings per share were $3.72 compared with $2.51 in the prior year. Adjusted operating margin improved to 11% from 8.3% in 2022. Adjusted EBITDA also grew to $196.5 million from $163.1 million a year ago.
Financial Details
As of Dec 31, 2023, STRA had cash and cash equivalents of $168.5 million compared with $213.7 million at 2022 end.
Cash provided by operating activities was $117.1 million in 2023 compared with $126.1 million in the comparable year-ago period. Capital expenditures were $36.9 million in 2023 compared with $43.2 million a year ago.
Universal Technical Institute, Inc. (UTI - Free Report) reported impressive first-quarter fiscal 2024 results. Quarterly earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top and the bottom lines increased impressively.
The company outperformed its financial expectations in the first quarter, advancing its growth, diversification and optimization strategy. It reported strong year-over-year new student start growth in the UTI and Concorde segments. The firm made progress with launching and ramping up new programs. The company is optimistic about its fiscal 2024 performance with a solid multi-divisional foundation and ability to deliver on expectations.
Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for second-quarter fiscal 2024. Earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year.
The company’s quarterly results reflect solid enrollment growth along with the efficient execution of its Growth with Purpose strategy. The continuous focus on this growth strategy sparked organic revenue growth, improved operational efficiencies and yielded outstanding academic outcomes. Owing to the quarter’s uptrend, ATGE raised its fiscal 2024 guidance.
Leggett & Platt, Inc. (LEG - Free Report) reported mixed results for fourth-quarter 2023, wherein its earnings met the Zacks Consensus Estimate but sales beat the same.
The top and bottom lines declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.
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Strategic Education (STRA) Q4 Earnings Beat, Enrollment Up
Strategic Education, Inc. (STRA - Free Report) , or SEI, reported impressive results for fourth-quarter 2023. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.
Growth across its three segments, led by continued enrollment growth in the U.S. Higher Education (“USHE”), which was driven significantly by employer-affiliated enrollment, strong growth in the Education Technology Services (earlier known as Alternative Learning) and improving performance in Australia/New Zealand (“ANZ”), drove the result.
Shares of STRA spiked 16.6% on Feb 29 after its solid earnings performance.
Inside the Headlines
SEI reported adjusted earnings of $1.68 per share, which topped the Zacks Consensus Estimate of $1.37 by 22.6% and rose impressively from the year-ago quarter’s levels of 78 cents.
Strategic Education Inc. Price, Consensus and EPS Surprise
Strategic Education Inc. price-consensus-eps-surprise-chart | Strategic Education Inc. Quote
Total revenues of $302.7 million surpassed the consensus estimate of $298 million by 1.6% and increased 12.1% from the year-ago quarter’s level. On a constant currency basis, revenues increased 12.5% to $303.6 million in the quarter.
Total enrollment improved 8% to 105,485 students.
Segment Details
USHE: This segment comprises Strayer and Capella Universities. Segment revenues increased 8.9% year over year to $217.6 million, backed by solid enrollment and revenue per student.
Student enrollment increased 10.5% from the year-ago quarter’s level to 86,233 students. FlexPath enrollment was 21% of USHE enrollment compared with 19% in the year-ago quarter.
During the quarter, the adjusted operating margin rose 850 basis points (bps) to 15.1% from the year-ago quarter.
Education Technology Services: This segment includes Employer Solutions, Workforce Edge and Sophia Learning. The segment’s quarterly revenues were $21.9 million, up 30.7% year over year, backed by growth in Sophia Learning subscriptions and employer-affiliated enrollment.
Sophia Learning’s average total subscribers increased by approximately 44% from the prior-year period’s levels. Employer-affiliated enrollment was 27.7% of USHE enrollment compared with 24.7% in the year-ago period.
Its adjusted operating margin was 40.3% in the reported quarter, up 1,620 bps from a year ago.
ANZ: This segment includes Torrens University, Think Education and Media Design School. The segment's revenues were $63.3 million, up 18.2% year over year due to higher revenue per student. On a constant-currency basis, revenues rose 20% year over year.
Student enrollment within ANZ declined 2% to 19,252 during the reported quarter compared with the year-ago quarter.
Its adjusted operating margin was 23.5%, up 490 bps from a year ago.
Operating Highlights
Adjusted operating income was up 109.2% to $56.6 million from $27.2 million in the year-ago quarter. The adjusted operating margin of 18.7% expanded a whopping 860 bps from the year-ago quarter.
Adjusted EBITDA in the reported quarter was $74.4 million, up from $45.2 million in the year-ago quarter.
2023 Highlights
Total revenues were $1.13 billion compared with $1.03 billion in 2022, up 6.3%. On a constant currency basis, revenues increased 7.4% to $1.14 billion in 2023. Total enrollment improved 4.7% to 100,959 students.
Adjusted earnings per share were $3.72 compared with $2.51 in the prior year. Adjusted operating margin improved to 11% from 8.3% in 2022. Adjusted EBITDA also grew to $196.5 million from $163.1 million a year ago.
Financial Details
As of Dec 31, 2023, STRA had cash and cash equivalents of $168.5 million compared with $213.7 million at 2022 end.
Cash provided by operating activities was $117.1 million in 2023 compared with $126.1 million in the comparable year-ago period. Capital expenditures were $36.9 million in 2023 compared with $43.2 million a year ago.
Zacks Rank & Key Picks
SEI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Universal Technical Institute, Inc. (UTI - Free Report) reported impressive first-quarter fiscal 2024 results. Quarterly earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top and the bottom lines increased impressively.
The company outperformed its financial expectations in the first quarter, advancing its growth, diversification and optimization strategy. It reported strong year-over-year new student start growth in the UTI and Concorde segments. The firm made progress with launching and ramping up new programs. The company is optimistic about its fiscal 2024 performance with a solid multi-divisional foundation and ability to deliver on expectations.
Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for second-quarter fiscal 2024. Earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year.
The company’s quarterly results reflect solid enrollment growth along with the efficient execution of its Growth with Purpose strategy. The continuous focus on this growth strategy sparked organic revenue growth, improved operational efficiencies and yielded outstanding academic outcomes. Owing to the quarter’s uptrend, ATGE raised its fiscal 2024 guidance.
Leggett & Platt, Inc. (LEG - Free Report) reported mixed results for fourth-quarter 2023, wherein its earnings met the Zacks Consensus Estimate but sales beat the same.
The top and bottom lines declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.