10-Q · May 14, 2026
Legacy Education reported strong revenue growth with Q3 fiscal 2026 revenues increasing by 15% to $21.4 million, driven by higher student enrollment. Operating margins decreased slightly, leading to an EPS of $0.21,…
Earnings analysis · 10-K
LGCY earnings analysis
Filed September 24, 2026 · Our reading of the company's report
The latest report
Legacy Education delivered strong fiscal 2026 growth, with revenue up 24.8% to $80.1 million, enrollment up 9% to 3,377 and diluted EPS rising to $0.66. The outlook is supported by the CCMCC acquisition, planned Houston…
Read full summary
Legacy Education delivered strong fiscal 2026 growth, with revenue up 24.8% to $80.1 million, enrollment up 9% to 3,377 and diluted EPS rising to $0.66. The outlook is supported by the CCMCC acquisition, planned Houston expansion and substantial liquidity, but operating margin narrowed to 14.8% and operating cash flow declined sharply because of receivables growth. Sentiment remains bullish on the earnings trajectory, although the newly disclosed material weakness and significant changes to federal student-aid accountability rules materially increase execution and regulatory risk.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.66
- Operating margin
- 14.8%
- Segment
- One reportable segment: career-focused postsecondary education services; fiscal 2026 revenue was $80.1 million.
What stood out
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Strong revenue and enrollment growth
Fiscal 2026 revenue increased 24.8% to $80.1 million from $64.2 million, driven by 3,483 new student starts, a 9% increase in enrollment to 3,377, and a full year of CCMCC revenue versus approximately half a year in fiscal 2025.
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Profit and EPS expanded
Net income rose 21.3% to $9.1 million from $7.5 million, while diluted EPS increased to $0.66 from $0.59. Operating income increased to $11.8 million, although operating margin declined to 14.8% from 15.6%.
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Healthcare-focused institutional platform
The company operates a diversified career-training platform across HDMC, CCC, Integrity and CCMCC, with 2,097, 576, 196 and 508 enrolled students, respectively, as of June 30, 2026.
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Houston expansion provides growth option
Management plans to expand CCC into Houston, Texas, with a projected November 2026 opening subject to approvals. CCC entered a 130-month lease for approximately 28,218 square feet with total base rent of approximately $6.9 million.
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Healthy liquidity and low debt
Liquidity remained solid, with cash and cash equivalents of $22.7 million at June 30, 2026 versus $20.3 million a year earlier. The company stated that available liquidity should fund operations, planned capital expenditures and working capital for at least the next 12 months.
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Investment funded with internal cash
Capital allocation was focused on internal investment and deleveraging: capital expenditures increased to $1.3 million from $0.8 million, principal debt payments were $0.8 million, and the company had no revolving credit facility or other debt facility.
What to watch
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New material weakness in internal controls
Management newly disclosed that internal control over financial reporting was not effective as of June 30, 2026 because policies and procedures were not formally documented across financial close, journal entries, reconciliations, segregation of duties and IT general controls. The company described this as a material weakness creating a reasonable possibility that a material misstatement may not be prevented or detected timely.
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New federal accountability rules threaten aid
The One Big Beautiful Bill Act and related rules became effective July 1, 2026, including student-loan limits and new earnings-accountability measures. The first calculations are expected in early 2027, and programs could lose eligibility for Title IV Direct Loans after failing the measure in two of three consecutive award years; potential loss of eligibility begins as early as July 1, 2028.
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Houston expansion approval and lease risk
The Houston expansion carries execution and regulatory risk: CCC has not yet submitted its application to the Texas Workforce Commission, while the planned campus requires TWC, THECB, Texas Board of Nursing and other approvals. At the same time, CCC entered a 130-month lease with approximately $6.9 million of base rent, despite the projected November 2026 opening remaining subject to approval.
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Receivables growth pressures cash flow
Cash conversion weakened as net cash from operating activities fell to $4.0 million from $7.8 million, primarily because accounts receivable increased by $9.0 million versus $3.9 million in the prior year. The allowance for credit losses increased to $2.0 million from $1.6 million, while provision for credit losses was $4.0 million, or 5.0% of revenue.
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Dependence on federal student aid
Title IV concentration remains material: the fiscal 2025 90/10 percentages were 86.82% for HDMC, 80.35% for CCC, 84.71% for Integrity and 59.80% for CCMCC. Fiscal 2026 calculations are due December 31, 2026 and remain subject to ED review and potential recalculation.
Management's outlook
The 10-K does not provide updated numeric annual guidance. Prior fiscal-year guidance was $80 million-$90 million of revenue and $0.65-$0.75 of EPS; updated outlook should be addressed in the earnings press release or call.
Earlier filings 4
10-Q · February 12, 2026
Legacy Education reported strong Q2 fiscal 2026 results with revenue of $19,184,643 (up $5,549,509 or ~40.7% vs. $13,635,134 in the prior-year quarter) and net income of $2,042,701 (vs. $1,399,046). Diluted EPS was…
10-Q · November 13, 2025
Legacy Education reported Q1 (period ended September 30, 2025) revenue of $19,401,023, up $5,395,932 or 38.5% versus $14,005,091 a year ago, driven by enrollment growth. Gross margin compressed to ~46.8% and operating…
10-K · September 25, 2025
Legacy Education positions itself as a California-focused, career-oriented proprietary college operator targeting healthcare and allied-health programs, with growth driven by program additions, accreditations and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.