10-Q · April 23, 2026
Strategic Education reported Q1 2026 revenue of $305.9 million (up from $303.6 million in Q1 2025) and income from operations of $41.1 million (up from $39.8 million). Operating margin ticked up modestly to ~13.4% from…
Earnings analysis · 10-Q
STRA earnings analysis
Filed July 29, 2026 · Our reading of the company's report
The latest report
Strategic Education delivered a solid Q2: revenue increased 4.9% to $337.3 million, GAAP operating margin expanded 0.8 percentage points to 15.0%, and GAAP diluted EPS rose to $1.71 from $1.37. ETS growth and USHE cost…
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Strategic Education delivered a solid Q2: revenue increased 4.9% to $337.3 million, GAAP operating margin expanded 0.8 percentage points to 15.0%, and GAAP diluted EPS rose to $1.71 from $1.37. ETS growth and USHE cost leverage offset modest USHE enrollment pressure, while ANZ profitability was heavily affected by a $13.9 million back-pay reserve and international-enrollment constraints. Cash generation improved, although cash, equivalents, and marketable securities declined to $133.8 million after $72.7 million of first-half share repurchases.
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.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
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
- $1.71
What stood out
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Revenue and profitability improved
Q2 revenue rose 4.9% year over year to $337.3 million from $321.5 million and increased from $305.9 million in Q1 2026. GAAP operating income rose to $50.5 million from $45.8 million, lifting operating margin to 15.0% from 14.2%; GAAP diluted EPS increased to $1.71 from $1.37.
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ETS growth accelerated
ETS was the primary growth engine: revenue increased 15.4% to $42.4 million, while segment operating income grew 30.2% to $19.6 million. Management cited Sophia Learning subscription growth, higher Workforce Edge employer-partnership revenue, and higher employer-affiliated enrollment, which reached 34.7% of USHE enrollment versus 31.8%.
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USHE monetization offset enrollment softness
USHE revenue increased 2.3% to $220.5 million despite a 0.5% enrollment decline to 85,894. Higher revenue per student and lower personnel, bad-debt, and facility costs helped USHE operating income rise 56.0% to $32.4 million.
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Operating cash flow strengthened
Six-month operating cash flow increased to $116.6 million from $98.9 million, supported by higher earnings and favorable working-capital changes. Capital expenditures rose to $24.2 million from $21.2 million, primarily for technology investments; this implies cash generation after capex of $92.4 million based on the disclosed figures.
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Debt-free balance sheet supports returns
Liquidity remained substantial, with $133.8 million of cash, cash equivalents, and marketable securities and no outstanding revolver borrowings at June 30, 2026. The company repurchased $72.7 million of shares in the first half and retained $140.7 million of authorization through December 31, 2026.
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Underlying adjusted earnings rose
Adjusted diluted EPS was $1.76, up from $1.52, and adjusted operating margin was 15.7% versus 15.1%. These results exclude $2.5 million of restructuring costs, while reported results absorbed the ANZ back-pay reserve.
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ANZ revenue growth masked a profit setback
ANZ revenue increased 7.6% to $74.4 million, aided by foreign exchange and revenue per student, but enrollment declined 5.2% to 17,555. A $13.9 million reserve for historical casual-academic back pay reduced ANZ operating income to $1.0 million from $12.8 million.
What to watch
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ANZ employment litigation created $13.9M reserve
The company recorded a $13.9 million reserve in Q2 for estimated 2020-2025 casual academic staff back pay, payroll taxes, benefits, and interest after an adverse Australian Full Court decision. The ultimate loss may differ materially from the reserve because the High Court appeal and potential retrospective remediation remain uncertain.
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International-visa constraints threaten ANZ assets
ANZ enrollment declined 5.2% to 17,555 as a more stringent Australian visa process increased refusals for applicants from certain countries. Continued constraints could pressure the carrying value of ANZ's $526.5 million goodwill and $66.2 million indefinite-lived intangible assets.
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Title IV accountability and funding exposure
Updated U.S. regulatory risks include new program-level accountability requirements: programs can lose Federal Direct Loan eligibility after failing applicable earnings measures in 2 of 3 consecutive years, with most provisions effective July 1, 2027. Strayer derived 87.98% of fiscal-2025 cash-basis revenue from federal education assistance, close to the 90% 90/10 threshold, versus Capella at 68.30%.
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Potential SARA changes could disrupt online reach
NC-SARA's 2026 policy process produced 33 proposed changes, some of which could limit participation following academic-quality, financial-stability, or consumer-protection actions. The regional committees and board are scheduled to vote by September 2, 2026 and October 28, 2026, respectively; exclusion could require state-by-state online authorization.
Management's outlook
The 10-Q contains no explicit quantitative revenue or EPS outlook. Management states it will continue to invest in its strategy and believes existing liquidity, operating cash flow, and its credit facility will meet cash requirements for the next 12 months and beyond.
Earlier filings 4
10-K · February 27, 2026
Strategic Education reported full-year revenue of $1.3 billion in 2025 and continues to operate through three reportable segments: U.S. Higher Education, Australia/New Zealand, and Education Technology Services.…
10-Q · November 6, 2025
Strategic Education reported third-quarter revenue of $319,949,000, up $13,991,000 (+4.6%) versus Q3 2024, while operating income was $37,042,000 (11.6% of revenue) and diluted EPS was $1.15 (flat YoY). Operating cash…
10-Q · July 30, 2025
Strategic Education reported quarter revenue of $321,471,000 (up from $312,266,000 a year ago) and net income of $32,331,000 (versus $29,898,000). Diluted EPS rose to $1.37 from $1.24 in Q2 2024 and operating income…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.