Covista Inc.
For the period ended Sep 30, 2026. Filed Oct 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 29, 2026
CVSA$110.32-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001104659-26-057163
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0001104659-26-120213
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 97 current paragraphs.
43 unchanged; 30 reworded; 23 added; 52 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 41 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
First Quarter Highlights
Current report
The following table presents revenue by segment detailing the changes from the prior year period (in thousands):
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education-related support activities, and provision for credit losses. The following table presents information regarding cost of educational services (in thousands):
Current report
Consolidated cost of educational services increased 10.0%, or $20.0 million, to $220.8 million in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in labor and other costs to support increased enrollment and an increase in provision for credit losses. As a percentage of revenue, consolidated cost of educational services remained consistent at 43.2% in the first quarter of fiscal year 2027 compared to 43.4% in the prior year period. As a result, consolidated gross profit margin remained consistent at 56.8% in the first quarter of fiscal year 2027 compared to 56.6% in the prior year period.
Current report
Segment cost of educational services increased 12.1%, or $10.1 million, to $93.3 million in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in provision for credit losses, labor, rent, facilities, and technology costs. As a percentage of revenue, segment cost of educational services was 48.5% and 46.4% in the first quarter of fiscal year 2027 and 2026, respectively. The increase in the percentage was the result of the increase in cost of educational services, partially offset by revenue growth. As a result of the investments to support enrollment and revenue growth, gross profit margin decreased to 51.5% in the first quarter of fiscal year 2027 compared to 53.6% in the prior year period.
Current report
Segment cost of educational services increased 14.4%, or $9.3 million, to $74.1 million in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in provision for credit losses, labor, and technology costs. As a percentage of revenue, segment cost of educational services remained consistent at 34.2% in the first quarter of fiscal year 2027 compared to 34.1% in the prior year period. As a result, gross profit margin remained consistent at 65.8% in the first quarter of fiscal year 2027 compared to 65.9% in the prior year period.
Current report
Segment cost of educational services increased 1.1%, or $0.6 million, to $53.4 million in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in labor and technology costs, partially offset by a decrease in clinical rotation costs. As a percentage of revenue, segment cost of educational services was 52.1% and 56.7% in the first quarter of fiscal year 2027 and 2026, respectively. The decrease in the percentage was the result of revenue growth, partially offset by the increase in cost of educational services. As a result of the revenue growth, gross profit margin increased to 47.9% in the first quarter of fiscal year 2027 compared to 43.3% in the prior year period.
Current report
Consolidated student services and administrative expense increased 9.6%, or $16.9 million, to $192.6 million in the first quarter of fiscal year 2027 compared to the prior year period. After excluding amortization of acquired intangible assets, strategic advisory costs, and debt modification costs, consolidated student services and administrative expense increased 7.4%, or $13.0 million, in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in marketing expense and investments to support growth initiatives. As a percentage of revenue, consolidated student services and administrative expense was 37.6% and 38.0% in the first quarter of fiscal year 2027 and 2026, respectively. The decrease in the percentage was the result of revenue growth, partially offset by the increase in student services and administrative expense.
Current report
Segment student services and administrative expense increased 2.8%, or $2.0 million, to $72.4 million in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in marketing expense. As a percentage of revenue, segment student services and administrative expense was 37.6% and 39.3% in the first quarter of fiscal year 2027 and 2026, respectively. The decrease in the percentage was the result of revenue growth, partially offset by the increase in student services and administrative expense.
Current report
Segment student services and administrative expense increased 9.8%, or $7.0 million, to $79.0 million in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in marketing expense and investments to support growth initiatives. As a percentage of revenue, segment student services and administrative expense was 36.4% and 37.9% in the first quarter of fiscal year 2027 and 2026, respectively. The decrease in the percentage was the result of revenue growth, partially offset by the increase in student services and administrative expense.
Current report
Segment student services and administrative expense increased 14.0%, or $3.3 million, to $26.8 million in the first quarter of fiscal year 2027 compared to the prior year period. This cost increase was primarily driven by an increase in professional services. As a percentage of revenue, segment student services and administrative expense was 26.2% and 25.3% in the first quarter of fiscal year 2027 and 2026, respectively. The increase in the percentage was the result of the increase in student services and administrative expense, partially offset by revenue growth.
Current report
(1) Consolidated results include Home Office activities not allocated to segments.
Current report
Consolidated operating income increased 14.7%, or $12.6 million, to $98.0 million in the first quarter of fiscal year 2027 compared to the prior year period. Consolidated operating margin increased in the first quarter of fiscal year 2027 to 19.2% compared to 18.5% in the prior year period. The operating income and margin increase in the first quarter of fiscal year 2027 was primarily driven by an increase in revenue, partially offset by an increase in marketing expense, labor and other costs to support increased enrollment, provision for credit losses, strategic advisory costs, and investments to support growth initiatives.
Current report
Consolidated adjusted operating income increased 18.1%, or $16.3 million, to $106.6 million in the first quarter of fiscal year 2027 compared to the prior year period. Consolidated adjusted operating margin increased in the first quarter of fiscal year 2027 to 20.8% compared to 19.5% in the prior year period. The adjusted operating income and margin increase in the first quarter of fiscal year 2027 was primarily driven by an increase in revenue, partially offset by an increase in marketing expense, labor and other costs to support increased enrollment, provision for credit losses, and investments to support growth initiatives.
Current report
Chamberlain and Medical and Veterinary operate physical campus locations and therefore incur costs associated with maintaining and operating those campuses. In contrast, Walden primarily delivers education through an online model and does not incur campus-related operating costs. As a result, the operating margins of Chamberlain and Medical and Veterinary historically have been lower than those of Walden.
Current report
Segment adjusted operating income increased 4.4%, or $1.1 million, to $26.7 million in the first quarter of fiscal year 2027 compared to the prior year period. The adjusted operating income increase in the first quarter of fiscal year 2027 was primarily driven by an increase in revenue, partially offset by an increase in marketing expense, provision for credit losses, labor, rent, facilities, and technology costs. Segment adjusted operating margin decreased in the first quarter of fiscal year 2027 to 13.9% compared to 14.3% in the prior year period. The adjusted operating income margin decrease in the first quarter of fiscal year 2027 was primarily driven by an increase in marketing expense, provision for credit losses, labor, rent, facilities, and technology costs, partially offset by an increase in revenue.
Current report
Segment adjusted operating income increased 16.0%, or $9.0 million, to $65.0 million in the first quarter of fiscal year 2027 compared to the prior year period. Segment adjusted operating margin increased in the first quarter of fiscal year 2027 to 30.0% compared to 29.5% in the prior year period. The adjusted operating income and margin increase in the first quarter of fiscal year 2027 was primarily driven by an increase in revenue, partially offset by an increase in marketing expense, provision for credit losses, labor, technology costs, and investments to support growth initiatives.
Current report
Segment adjusted operating income increased 32.7%, or $5.5 million, to $22.3 million in the first quarter of fiscal year 2027 compared to the prior year period. Segment adjusted operating margin increased in the first quarter of fiscal year 2027 to 21.7% compared to 18.0% in the prior year period. The adjusted operating income and margin increase in the first quarter of fiscal year 2027 was primarily driven by an increase in revenue and a decrease in clinical rotation costs, partially offset by an increase in professional services, technology costs, and labor.
Current report
Interest expense was $9.9 million and $11.1 million in the first quarter of fiscal year 2027 and 2026, respectively. This decrease was primarily driven by decreased borrowings and a lower interest rate on our Term Loan B.
Current report
Other income, net was $1.4 million and $2.5 million in the first quarter of fiscal year 2027 and 2026, respectively. This decrease was primarily driven by an investment loss in the current year period compared to an investment gain in the prior year period.
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(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.
Current report
(1) Represents the income tax impact of non-GAAP continuing operations adjustments that is recognized in our GAAP financial statements.
Current report
(1) Consolidated results include Home Office activities not allocated to segments.
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Previous report
Available Information
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We use our website (www.covista.com) as a routine channel of distribution of company information, including press releases, presentations, and supplemental information, as one means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, you should monitor our website in addition to following press releases, SEC filings, and public conference calls and webcasts. You can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts. You may also access our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as well as other reports relating to us that are filed with or furnished to the SEC, free of charge in the investor relations section of our website as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. The content of the websites mentioned above is not incorporated into and should not be considered a part of this report.
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Third Quarter Highlights
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The following tables present revenue by segment detailing the changes from the prior year periods (in thousands):
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Chamberlain
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Chamberlain revenue increased 2.3%, or $4.4 million, to $197.0 million in the third quarter and increased 3.4%, or $18.5 million, to $560.0 million in the first nine months of fiscal year 2026 compared to the prior year periods. The increase in revenue in the third quarter of fiscal year 2026 was driven by higher tuition rates and increased enrollment in the March
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Walden
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Medical and Veterinary
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Cost of educational services increased 5.4%, or $10.9 million, to $210.7 million in the third quarter and increased 7.8%, or $44.4 million, to $616.9 million in the first nine months of fiscal year 2026 compared to the prior year periods. The cost
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increase in the third quarter and first nine months of fiscal year 2026 was primarily driven by an increase in labor and other costs to support increased enrollment.
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As a percentage of revenue, cost of educational services was 43.3% and 42.5% in the third quarter and first nine months of fiscal year 2026, respectively, compared to 42.9% and 43.0% in the prior year periods. The increase in the percentage for the third quarter of fiscal year 2026 was primarily the result of the $18.0 million impact on Walden revenue due to the shift of one academic week from the third quarter to the second quarter of fiscal year 2026. The decrease in the percentage for the first nine months of fiscal year 2026 was primarily the result of revenue growth accompanied by cost efficiencies.
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Student services and administrative expense increased 5.1%, or $8.9 million, to $184.1 million in the third quarter and increased 10.5%, or $51.5 million, to $542.6 million in the first nine months of fiscal year 2026 compared to the prior year periods. After excluding asset impairments and strategic advisory costs, student services and administrative expense increased 7.6%, or $13.2 million, in the third quarter of fiscal year 2026 compared to the prior year period. After excluding litigation reserve, asset impairments, strategic advisory costs, and debt modification costs, student services and administrative expense increased 8.4%, or $41.2 million, in the first nine months of fiscal year 2026 compared to the prior
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year period. These increases were primarily driven by an increase in marketing expense and investments to support growth initiatives.
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As a percentage of revenue, student services and administrative expense was 37.8% and 37.4% in the third quarter and first nine months of fiscal year 2026, respectively, compared to 37.6% and 36.9% in the prior year periods. The increase in the percentage for the third quarter of fiscal year 2026 was primarily the result of the $18.0 million impact on Walden revenue due to the shift of one academic week from the third quarter to the second quarter of fiscal year 2026. The increase in the percentage for the first nine months of fiscal year 2026 was primarily the result of an increase in strategic advisory costs in the current year period and a reduction in litigation reserves in the prior year period, partially offset by revenue growth in the current year period. The reduction in litigation reserves in fiscal year 2025 represented a $5.6 million receipt in the second quarter of fiscal year 2025 from a claim made for indemnification under the Membership Interest Purchase Agreement with Laureate Education, Inc.
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Consolidated operating income increased 0.9%, or $0.8 million, to $91.3 million in the third quarter and increased 8.8%, or $23.3 million, to $287.9 million in the first nine months of fiscal year 2026 compared to the prior year periods. While consolidated revenue increased in the third quarter of fiscal year 2026 compared to the prior year period, Walden revenue for the third quarter of fiscal year 2026 was impacted by a shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026. The operating income increase in the third quarter of fiscal year 2026 was also driven by a reduction in asset impairments,
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partially offset by increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives. The operating income increase in the first nine months of fiscal year 2026 was primarily driven by an increase in revenue and a reduction in asset impairments, partially offset by a reduction in litigation reserves in the prior year period, and increases in strategic advisory costs, labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
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Consolidated adjusted operating income decreased 3.0%, or $3.1 million, to $102.2 million in the third quarter and increased 12.7%, or $35.9 million, to $318.6 million in the first nine months of fiscal year 2026 compared to the prior year periods. While consolidated revenue increased in the third quarter of fiscal year 2026 compared to the prior year period, Walden revenue for the third quarter of fiscal year 2026 was impacted by a shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026. The adjusted operating income decrease in the third quarter of fiscal year 2026 was also driven by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives. The adjusted operating income increase in the first nine months of fiscal year 2026 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
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Chamberlain
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Segment adjusted operating income increased 0.8%, or $0.4 million, to $47.9 million in the third quarter and decreased 8.8%, or $10.3 million, to $107.3 million in the first nine months of fiscal year 2026 compared to the prior year periods. The adjusted operating income increase in the third quarter of fiscal year 2026 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs of educational services, marketing expense, and investments to support growth initiatives. The adjusted operating income decrease in the first nine months of fiscal year 2026 was primarily driven by increases in labor and other costs of educational services, marketing expense, and investments to support growth initiatives, partially offset by an increase in revenue.
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Walden
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Segment adjusted operating income decreased 11.7%, or $5.6 million, to $42.4 million in the third quarter and increased 29.3%, or $40.1 million, to $176.9 million in the first nine months of fiscal year 2026 compared to the prior year periods. While Walden revenue increased in the third quarter of fiscal year 2026 compared to the prior year period, Walden revenue for the third quarter of fiscal year 2026 was impacted by a shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026. The adjusted operating income decrease in the third quarter of fiscal year 2026 was also driven by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives. The adjusted operating income increase in the first nine months of fiscal year 2026 was primarily driven by an increase in revenue, partially offset by increases in labor and other costs to support increased enrollment, marketing expense, and investments to support growth initiatives.
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Medical and Veterinary
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Segment adjusted operating income increased 20.0%, or $3.6 million, to $21.5 million in the third quarter and increased 16.9%, or $9.1 million, to $63.3 million in the first nine months of fiscal year 2026 compared to the prior year periods. The adjusted operating income increases in the third quarter and first nine months of fiscal year 2026 were primarily driven by an increase in revenue, partially offset by increases in investments to support initiatives to drive growth, investments in academic support, and marketing expense.
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Interest expense was $13.6 million and $35.6 million in the third quarter and first nine months of fiscal year 2026, respectively, compared to $13.1 million and $41.5 million in the prior year periods. The interest expense increase in the third quarter of fiscal year 2026 was primarily driven by an increase in a loss on debt extinguishment from the write-off of debt issuance costs (as discussed in Note 13 “Debt” to the Consolidated Financial Statements). The interest expense decrease in the first nine months of fiscal year 2026 was primarily driven by lower interest expense due to decreased
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borrowings and a lower interest rate on our Term Loan B, and lower outstanding letters of credit balances during the period, partially offset by an increase in a loss on debt extinguishment from the write-off of debt issuance costs.
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Other income, net was $0.2 million and $4.4 million in the third quarter and first nine months of fiscal year 2026, respectively, compared to $1.9 million and $6.8 million in the prior year periods. The decrease in the third quarter of fiscal year 2026 was primarily driven by a decrease in interest income driven by lower invested cash balances and higher investment losses. The decrease in the first nine months of fiscal year 2026 was primarily driven by a decrease in interest income driven by lower invested cash balances, partially offset by higher investment gains.
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In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, which introduced substantial changes to U.S. tax provisions. The most relevant provisions to Covista for fiscal year 2026 include allowing accelerated tax deductions for qualified property and research and development expenditures. The impacts of OBBBA were not material to the income tax provision for the third quarter and nine months ended March 31, 2026.
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Financial Aid
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Like other higher education institutions, Covista’s institutions are dependent upon the timely receipt of federal financial aid funds. All public financial aid programs are subject to political and governmental budgetary considerations. Covista’s institutions and their students participate in a wide range of financial aid programs, including U.S. federal financial aid, state financial aid, Canadian financial aid, private loan programs, tax-favored programs, Covista-provided financial assistance, and employer-provided financial assistance. In the U.S., the Higher Education Act (as reauthorized, the “HEA”) guides the federal government’s support of postsecondary education. Changes to financial aid programs that restrict student eligibility or reduce funding levels could have a material adverse effect on Covista’s business, financial condition, results of operations, and cash flows. See Item 1A. “Risk Factors” in our 2025 Form 10-K for a discussion of student financial aid related risks.
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Legislative and Regulatory Requirements
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Government-funded financial assistance programs are governed by extensive and complex regulations in the U.S. Like any other educational institution, Covista’s institutions’ administration of these programs is periodically reviewed by regulatory agencies and is subject to audit or investigation by other authorities. Any violation could be the basis for penalties or other disciplinary action, including initiation of a suspension, limitation, or termination proceeding.
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Financial Responsibility
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Institutions must pass an ED financial responsibility test, also known as a “composite score,” to maintain eligibility to participate in Title IV aid programs. For Covista’s institutions, this test is calculated at the consolidated Covista level. Applying various financial elements from annual audited financial statements, the score is a composite of three ratios: an equity ratio that measures the institution’s capital resources; a primary reserve ratio that measures an institution’s ability to fund its operations from current resources; and a net income ratio that measures an institution’s ability to operate profitably. A score greater than or equal to 1.5 indicates the institution is considered financially responsible. A score less than 1.5 but greater than or equal to 1.0 is considered financially responsible but requires additional oversight. For example, an institution with a score in this range is subject to heightened cash monitoring and other participation requirements. An institution with a score of less than 1.0 is not considered financially responsible but may continue to participate in the Title IV programs under provisional certification. In addition, this lower score typically requires that the institution be subject to heightened cash monitoring requirements and post a letter of credit (equal to a minimum of 10% of the Title IV aid it received in the institution's most recent fiscal year).
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Prior to fiscal year 2022, Covista’s composite score was greater than 1.5. However, on September 25, 2023, ED notified Covista that its fiscal year 2022 composite score had declined to 0.2. As previously disclosed, this was expected due to the acquisition of Walden and other transactions. ED advised that Covista’s five institutions will be permitted to continue to participate in Title IV under provisional certifications with heightened cash monitoring and continued reporting. Management does not believe these conditions will have a material adverse effect on Covista’s operations. At ED’s request, Covista maintains surety-backed letters of credit in favor of ED totaling $202.6 million representing 10% of the consolidated Title IV funds Covista’s institutions received during fiscal year 2025. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.
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The financial responsibility rules include other mandatory or discretionary triggers that could require an institution to post a letter of credit. ED recently amended the financial responsibility regulation and the changes took effect July 1, 2024. The changes include additional triggers which could require additional letters of credit.
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Program Participation Agreement (“PPA”)
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The HEA specifies the manner in which ED reviews institutions for eligibility and certification to participate in Title IV programs. Every educational institution participating in Title IV programs must be certified to participate through a PPA and certification must be periodically renewed. Such recertification generally is required every six years, but may be required earlier, including when an institution undergoes a change in control. Institutions that violate certain ED Title IV regulations may lose eligibility to participate in Title IV programs or may only continue participation under provisional certification. ED may place an institution on provisional certification status if it finds that the institution does not fully satisfy all of the eligibility and certification standards and in certain other circumstances, such as when an institution is certified for the first time or undergoes a change in control. During the period of provisional certification, the institution must comply with any additional conditions included in the institution’s PPA. In addition, ED may more closely review an institution that is provisionally certified if it applies for recertification or approval to open a new location, add an educational program, acquire another institution, or make any other significant change. Students attending provisionally certified institutions remain eligible to receive Title IV program funds. Provisional certification status also carries fewer due process protections than full certification. If ED determines that a provisionally certified institution is unable to meet its responsibilities under its PPA, it may seek to revoke the institution’s certification to participate in Title IV programs without advance notice or opportunity for the institution to challenge the action.
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In February 2026, ED provisionally recertified Chamberlain’s PPA through December 31, 2028.
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ED provisionally recertified Walden’s Title IV PPA through December 31, 2028.
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In March 2026, ED provisionally recertified AUC’s PPA through December 31, 2028.
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Reworded paragraphs (30)
Previous wording
This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto included in this report. It should also be read in conjunction with our consolidated financial statements and the related Management’s Discussion and Analysis of Financial Condition and Results of Operation as contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “2025 Form 10-K), the Cautionary Disclosure Regarding Forward-Looking Statements, the Risk Factors included in the 2025 Form 10-K, and the Financial Aid and Legislative and Regulatory Requirements disclosures set forth in this report. Covista reports on a fiscal year period ending on June 30. Therefore, this Quarterly Report for the quarterly period ended March 31, 2026 is for our third quarter of fiscal year 2026.
Current wording
This management’s discussion and analysis of financial condition and results of operations (“MD&A”) should be read with and is qualified in its entirety by the Consolidated Financial Statements and the notes thereto included in this report. It should also be read in conjunction with our consolidated financial statements and the related MD&A included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 (the “2026 Form 10-K”). Readers of this report should also refer to the Cautionary Disclosure Regarding Forward-Looking Statements, Item 1A. “Risk Factors,” and the Financial Aid and Legislative and Regulatory Requirements disclosures set forth in Item 1. “Business” of the 2026 Form 10-K, all of which are incorporated herein by this reference. Covista reports on a fiscal year period ending on June 30. Therefore, this Quarterly Report for the quarterly period ended September 30, 2026 is for our first quarter of fiscal year 2027.
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Medical and Veterinary – This segment includes the operations of AUC, RUSM, and RUSVM, collectively referred to as the “medical and veterinary schools,” which offers degree and certificate programs in the medical and veterinary postsecondary education industry.
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Medical and Veterinary – This segment includes the operations of AUC, RUSM, and RUSVM, collectively referred to as the “medical and veterinary schools,” which offer degree and certificate programs in the medical and veterinary postsecondary education industry.
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Financial and operational highlights for the third quarter of fiscal year 2026 include:
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Financial and operational highlights for the first quarter of fiscal year 2027 include:
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session as increases in pre-licensure nursing program enrollment more than offset declines in post-licensure nursing program enrollment. The increase in revenue in the first nine months of fiscal year 2026 was driven by higher tuition rates and enrollment. Enrollment increased in pre-licensure nursing programs in all fiscal year 2026 sessions; however, enrollment has declined in post-licensure nursing programs during fiscal year 2026. Chamberlain is achieving pre-licensure growth by optimizing investments in student enrollment and experience while leveraging scale through a national footprint with in-person and online curriculum delivery modalities. Management is focused on optimizing marketing and enrollment operations to address post-licensure enrollment.
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Chamberlain revenue increased 7.4%, or $13.2 million, to $192.4 million in the first quarter of fiscal year 2027 compared to the prior year period, driven by higher enrollment, average student courseload, and tuition rates. Enrollment increased in pre-licensure nursing programs; however, enrollment has declined in post-licensure nursing programs. Chamberlain is achieving pre-licensure growth by optimizing investments in student enrollment and experience while leveraging scale through a national footprint with in-person and online curriculum delivery modalities. Management is focused on optimizing marketing and enrollment operations to address post-licensure enrollment.
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Tuition rates in the current fiscal year increased in January 2026 compared to the prior fiscal year for the Bachelor of Science in Nursing (“BSN”) onsite and online degree, Master of Science in Nursing (“MSN”), Master of Social Work (“MSW”) and Master of Public Health (“MPH”) online degree programs. The average increase across all of these programs was approximately 3.3% from the prior year.
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Tuition rates in the current fiscal year increased compared to the prior fiscal year for the Bachelor of Science in Nursing (“BSN”) onsite and online degree, Master of Science in Nursing (“MSN”), Master of Social Work (“MSW”) and Master of Public Health (“MPH”) online degree programs. The average increase across all of these programs was approximately 3.4% from the prior year.
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Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 4.6%, or $8.2 million, to $186.6 million in the third quarter and increased 16.2%, or $82.9 million, to $594.1 million in the first nine months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment, higher tuition rates, and an increase in average credit hours per student. Walden revenue for the third quarter of fiscal year 2026 was impacted by the shift of one academic week from the third quarter to the second quarter, which resulted in $18.0 million of revenue being recognized during the second quarter of fiscal year 2026. Walden’s improved enrollment has been accelerated by investments in student experience and brand along with providing flexibility to working adults through part-time and Tempo Learning® competency-based programs.
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Walden total student enrollment represents those students attending instructional sessions as of the dates identified above. Walden revenue increased 14.1%, or $26.7 million, to $216.7 million in the first quarter of fiscal year 2027 compared to the prior year period, driven by an increase in enrollment and higher tuition rates. Walden’s improved enrollment has been accelerated by investments in student experience and brand along with providing flexibility to working adults through part-time and Tempo Learning® competency-based programs.
Previous wording
Tuition rates for Walden programs, including general education are charged on a per credit hour basis that varies based on the nature of the program. For other programs such as those with a subscription-based learning modality, tuition is charged on a per term basis. Students are also charged program and clinical fees depending on the specific programs. Some programs require students to attend residencies, skills labs, and pre-practicum labs, for which tuition is charged per event. In most programs, these tuition rates, event charges, and fees increased by approximately 2.6% from the prior year.
Current wording
Tuition rates for Walden programs, including general education, are charged on a per credit hour basis that varies based on the nature of the program. For other programs such as those with a subscription-based learning modality, tuition is charged on a per term basis. Students are also charged program and clinical fees depending on the specific programs. Some programs require students to attend residencies, skills labs, and pre-practicum labs, for which tuition is charged per event. The average increase in tuition rates, event charges, and fees across all programs was approximately 2.6% from the prior year.
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Medical and Veterinary revenue increased 8.9%, or $8.4 million, to $103.5 million in the third quarter and increased 7.2%, or $20.2 million, to $298.6 million in the first nine months of fiscal year 2026 compared to the prior year periods, driven by an increase in enrollment and higher tuition rates. Management continues to focus on increasing enrollment and driving operational effectiveness, specifically around academic support and the enrollment experience.
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Medical and Veterinary revenue increased 10.0%, or $9.3 million, to $102.5 million in the first quarter of fiscal year 2027 compared to the prior year period, driven by an increase in enrollment and higher tuition rates. Management continues to focus on increasing enrollment and driving operational effectiveness, specifically around academic support and enrollment experience.
Previous wording
The cost of educational services expense category includes expenses related to the cost of faculty and staff who support educational operations, facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student education-related support activities, and provision for bad debts. The following tables present cost of educational services by segment detailing the changes from the prior year periods (in thousands):
Current wording
The cost of educational services expense category includes expenses related to the cost of faculty and staff who support educational operations, facilities, adjunct faculty, supplies, housing, bookstore, other educational materials, student
Previous wording
The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization of acquired intangible assets. The following tables present student services and administrative expense by segment detailing the changes from the prior year periods (in thousands):
Current wording
The student services and administrative expense category includes expenses related to student admissions, marketing and advertising, general and administrative, and amortization of acquired intangible assets. The following table presents information regarding student services and administrative expense (in thousands):
Previous wording
Restructuring expense was $0.9 million and $5.2 million in the third quarter and first nine months of fiscal year 2026, respectively, compared to $0.5 million and $2.9 million in the prior year periods. The increases in fiscal year 2026 were primarily driven by workforce reductions. In addition, we continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities.
Current wording
Restructuring expense was $0.2 million and $0.3 million in the first quarter of fiscal year 2027 and 2026, respectively. We continue to incur restructuring charges or reversals related to exited leased space from previous restructuring activities and workforce reductions.
Previous wording
The following table presents a reconciliation of operating income to adjusted operating income by segment (in thousands):
Current wording
The following table presents a reconciliation of operating income to adjusted operating income (in thousands):
Previous wording
Our effective income tax rate from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including tax on global intangible low-taxed income (“GILTI”), limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in valuation allowance, changes in uncertain tax positions, and tax benefits on stock-based compensation.
Current wording
Our effective income tax rate from continuing operations can differ from the 21% U.S. federal statutory rate due to several factors, including U.S. tax on foreign earnings, limitation of tax benefits on certain executive compensation, the rate of tax applied by state and local jurisdictions, the rate of tax applied to earnings outside the U.S., tax incentives, tax credits related to research and development expenditures, changes in unrecognized tax benefits, and tax benefits on stock-based compensation.
Previous wording
Our effective tax rate from continuing operations was 25.6% and 24.0% in the third quarter and first nine months of fiscal year 2026, respectively, and 23.4% and 22.5% in the third quarter and first nine months of fiscal year 2025, respectively. The effective tax rate for the third quarter of fiscal year 2026 increased compared to the prior year period primarily due to an increase in the limitation of tax benefits on certain executive compensation, partially offset by a decrease in the percentage of earnings from operations in higher taxed jurisdictions. The effective tax rate for the first nine months of fiscal year 2026 increased compared to the prior year period primarily due to an increase in the limitation of tax benefits on certain executive compensation, partially offset by a decrease in the percentage of earnings from operations in higher taxed jurisdictions and an increase in tax benefits on stock-based compensation.
Current wording
Our effective tax rate from continuing operations was 20.1% and 20.6% in the first quarter of fiscal year 2027 and 2026, respectively. The effective tax rate for the first quarter of fiscal year 2027 decreased compared to the prior year period primarily due to an increase in U.S. tax benefits on foreign-derived income, partially offset by a decrease in tax benefits on stock-based compensation.
Previous wording
We had a loss from discontinued operations of $16.3 million and $15.4 million in the third quarter and first nine months of fiscal year 2026, respectively, compared to income of $0.04 million and $4.6 million in the prior year periods. We recorded income within discontinued operations related to the DeVry University earn-out of $0.5 million and $7.0 million in the first nine months of fiscal year 2026 and 2025, respectively. In addition, we continue to have activity associated with ongoing litigation and settlements related to divestitures, which is classified within discontinued operations.
Current wording
We continue to have activity associated with ongoing litigation and settlements related to prior divestitures, which is classified within discontinued operations. We had a loss from discontinued operations of $4.1 million in the first quarter of fiscal year 2027 and income from discontinued operations of $0.8 million in the first quarter of fiscal year 2026.
Previous wording
Covista’s consolidated cash and cash equivalents balance of $147.0 million and $199.6 million as of March 31, 2026 and June 30, 2025, respectively, included cash and cash equivalents held at Covista’s international operations of $3.3 million and $22.9 million as of March 31, 2026 and June 30, 2025, respectively, which is available to Covista for general corporate purposes.
Current wording
Covista’s consolidated cash and cash equivalents balance of $222.2 million and $406.3 million as of September 30, 2026 and June 30, 2026, respectively, included cash and cash equivalents held at Covista’s international operations of $53.0 million and $58.3 million as of September 30, 2026 and June 30, 2026, respectively, which is available to Covista for general corporate purposes.
Previous wording
Net cash provided by operating activities from continuing operations in the nine months ended March 31, 2026 increased $72.6 million to $346.4 million, compared to $273.8 million in the prior year period. This increase was primarily driven by a $125.3 million increase in cash collected from students, a $22.9 million decrease in net legal settlement payments, a $6.8 million decrease in interest payments, and a $2.3 million decrease in income tax payments, partially offset by a $82.1 million increase in payments to employees and vendors.
Current wording
Net cash provided by operating activities from continuing operations in the three months ended September 30, 2026 decreased $16.4 million to $114.3 million, compared to $130.6 million in the prior year period. This decrease was primarily driven by a $51.0 million increase in payments to employees and vendors, partially offset by a $16.1 million increase in cash collected from students and a $13.9 million increase in lease incentives received.
Previous wording
Net cash used in investing activities in the nine months ended March 31, 2026 and 2025 was $55.9 million and $30.3 million, respectively, and was primarily driven by capital expenditures of $50.9 million and $31.3 million, respectively. In addition, during the nine months ended March 31, 2026, we made a $5.0 million minority investment in a business. Capital expenditures for fiscal year 2026 primarily include information technology investments and new campus development at Chamberlain.
Current wording
Net cash used in investing activities in the three months ended September 30, 2026 and 2025 was $37.6 million and $16.0 million, respectively, and was driven by capital expenditures. Capital expenditures for fiscal year 2027 primarily consisted of new campus development at Chamberlain and information technology investments.
Previous wording
Net cash used in financing activities in the nine months ended March 31, 2026 was $342.9 million, primarily driven by share repurchases of $239.9 million, net repayments under long-term debt obligations of $50.8 million, and employee taxes paid on withholding shares of $42.1 million. Net cash used in financing activities in the nine months ended March 31, 2025 was $248.0 million, primarily driven by share repurchases of $146.4 million and net repayments under long-term debt obligations of $100.0 million.
Current wording
Net cash used in financing activities in the three months ended September 30, 2026 was $259.6 million, primarily driven by repayments under long-term debt obligations of $163.0 million, share repurchases of $81.0 million, and employee taxes paid on withholding shares of $16.2 million. Net cash used in financing activities in the three months ended September 30, 2025 was $49.5 million, primarily driven by employee taxes paid on withholding shares of $39.1 million.
Previous wording
On December 15, 2025, we announced that the Board authorized Covista’s sixteenth share repurchase program, which allows Covista to repurchase up to $750.0 million of its common stock through December 15, 2028. As of March 31, 2026, $661.8 million of authorized share repurchases remained under the sixteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 14 “Share Repurchases” to the Consolidated Financial Statements for additional information on our share repurchase programs.
Current wording
On December 15, 2025, we announced that the Board of Directors (the “Board”) authorized Covista’s sixteenth share repurchase program, which allows Covista to repurchase up to $750.0 million of its common stock through December 15, 2028. As of September 30, 2026, $577.8 million of authorized share repurchases remained under the sixteenth share repurchase program. The timing and amount of any future repurchases will be determined based on an evaluation of market conditions and other factors. See Note 14 “Share Repurchases” to the Consolidated Financial Statements for additional information on our share repurchase programs.
Previous wording
Long-Term Debt– As of March 31, 2026, Covista had a Term Loan B principal amount of $510.0 million under its Credit Facility, which matures on March 2, 2033 and requires quarterly interest payments. See Note 13 “Debt” to the Consolidated Financial Statements for additional information on our Credit Facility.
Current wording
Long-Term Debt– As of September 30, 2026, under the Credit Facility, Covista had an outstanding principal amount on its Term Loan B of $510.0 million, which matures on March 2, 2033 and requires quarterly principal payments. See Note 13 “Debt” to the Consolidated Financial Statements for additional information on our Credit Facility.
Previous wording
As of March 31, 2026, Covista had $202.6 million of surety-backed letters of credit outstanding in favor of ED. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.
Current wording
As of September 30, 2026, Covista had $202.6 million of surety-backed letters of credit outstanding in favor of the U.S. Department of Education. See “Off-Balance Sheet Arrangements” in Note 13 “Debt” to the Consolidated Financial Statements for additional information.
Previous wording
As of March 31, 2026, Covista had $76.9 million of surety bonds to satisfy certain state regulatory requirements for licensure.
Current wording
As of September 30, 2026, Covista had $85.0 million of surety bonds to satisfy certain state regulatory requirements for licensure.
Previous wording
In the event of unexpected market conditions or negative economic changes that could negatively affect Covista’s earnings and/or operating cash flow, our Credit Facility includes a $500.0 million revolving credit facility with available capacity of $500.0 million as of March 31, 2026.
Current wording
In the event of unexpected market conditions or negative economic changes that could negatively affect Covista’s earnings and/or operating cash flow, our Credit Facility includes a $500.0 million Revolver with available capacity of $500.0 million as of September 30, 2026.
Previous wording
We have engaged in and continue to engage in the review and planning of strategic alternatives to refinance or otherwise optimize our capital structure, which alternatives may include issuing debt, equity or other securities, or entering into new credit facilities. This review and planning could result in our pursuing one or more significant corporate transactions. There can be no assurance as to when or whether we will determine to pursue any such transaction, whether any such transaction will be successful, or the effects the failure to undertake any such transaction may have on our business, including our ability to achieve our operational, strategic, and financial goals.
Current wording
We have engaged in and continue to engage in the review and planning of strategies to refinance or otherwise optimize our capital structure, which may include issuing debt, equity or other securities, or entering into new credit facilities. This review and planning could result in our pursuing one or more significant corporate transactions. There can be no assurance as to when or whether we will determine to pursue any such transaction, whether any such transaction will be successful, or the effects the failure to undertake any such transaction may have on our business, including our ability to achieve our operational, strategic, and financial goals.
Previous wording
Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Covista’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “potential,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include the risk factors described in Item 1A. “Risk Factors” of our 2025 Form 10-K and that might be contained in this Quarterly Report on Form 10-Q, which should be read in conjunction with the forward-looking statements in this Quarterly Report on Form 10-Q. You should evaluate forward-looking statements in the context of these risks and uncertainties and are cautioned to not place undue reliance on such forward-looking statements. We caution you that these factors may not contain all of the factors that are important to you. We cannot assure you that we will realize the results, performance or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. All forward-looking statements are based on information available to us as of the date any such statements are made, and Covista assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
Current wording
Certain statements contained in this Quarterly Report on Form 10-Q are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact, which includes statements regarding Covista’s future growth. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “future,” “believe,” “project,” “expect,” “anticipate,” “estimate,” “plan,” “intend,” “may,” “will,” “would,” “could,” “can,” “continue,” “preliminary,” “potential,” “range,” and similar terms. These forward-looking statements are subject to risk and uncertainties that could cause actual results to differ materially from those described in the statements. Important factors that could cause actual results to differ materially from the expectations expressed or implied by our forward-looking statements are disclosed in Item 1A. “Risk Factors,” of our 2026 Form 10-K and that might be contained in this Quarterly Report on Form 10-Q, all of which should be read in conjunction with the forward-looking statements in this Quarterly Report on Form 10-Q. You should evaluate forward-looking
Previous wording
Adjusted net income (most comparable GAAP measure: net income) – Measure of Covista’s net income adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, loss on debt extinguishment, litigation reserve, asset impairments, debt modification costs, and loss (income) from discontinued operations.
Current wording
Adjusted net income (most comparable GAAP measure: net income) – Measure of Covista’s net income adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, loss on debt extinguishment, debt modification costs, U.S. tax benefit due to an increase in foreign-derived income, and loss (income) from discontinued operations.
Previous wording
Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Covista’s diluted earnings per share adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, loss on debt extinguishment, litigation reserve, asset impairments, debt modification costs, and loss (income) from discontinued operations.
Current wording
Adjusted earnings per share (most comparable GAAP measure: diluted earnings per share) – Measure of Covista’s diluted earnings per share adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, loss on debt extinguishment, debt modification costs, U.S. tax benefit due to an increase in foreign-derived income, and loss (income) from discontinued operations.
Previous wording
Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Covista’s operating income adjusted for restructuring expense, amortization of acquired intangible assets, litigation reserve, asset impairments, strategic advisory costs, and debt modification costs.
Current wording
Adjusted operating income (most comparable GAAP measure: operating income) – Measure of Covista’s operating income adjusted for restructuring expense, amortization of acquired intangible assets, strategic advisory costs, and debt modification costs.
Previous wording
Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Covista’s net income adjusted for loss (income) from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, litigation reserve, asset impairments, strategic advisory costs, and debt modification
Current wording
Adjusted EBITDA (most comparable GAAP measure: net income) – Measure of Covista’s net income adjusted for loss (income) from discontinued operations, interest expense, other income, net, provision for income taxes, depreciation, amortization of acquired intangible assets, amortization of cloud computing implementation assets, stock-based compensation, restructuring expense, strategic advisory costs, and debt modification costs. Provision for income taxes, interest expense, and other income, net are not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with adjusted operating income.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
statements in the context of these risks and uncertainties and are cautioned to not place undue reliance on such forward-looking statements. We caution you that these factors may not contain all of the factors that are important to you. We cannot assure you that we will realize the results, performance or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. All forward-looking statements are based on information available to us as of the date any such statements are made, and Covista assumes no obligation to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized, except as required by law.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
costs. Provision for income taxes, interest expense, and other income, net are not recorded at the reportable segments, and therefore, the segment adjusted EBITDA reconciliations begin with adjusted operating income.