LINCOLN EDUCATIONAL SERVICES CORP
For the period ended Mar 31, 2026. Filed May 11, 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.
Mar 31, 2026 · Filed May 11, 2026
LINC$17.66+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-10.
0001140361-25-041363
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001140361-26-020546
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 131 previous paragraphs and 75 current paragraphs.
32 unchanged; 31 reworded; 12 added; 59 removed; 9 previous and 0 current paragraphs rearranged.
Tables are not compared: 19 previous and 5 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 (12)
Current report
We strive to strengthen our position as a leading provider of career‑oriented postsecondary education by continuing to pursue the following strategy:
Current report
Educational services and facilities expense. Educational services and facilities expense increased by $11.0 million, or 23.2%, to $58.4 million for the three months ended March 31, 2026, compared to $47.4 million for the same period in 2025. This includes $2.9 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett.
Current report
Administrative expenses increased $5.1 million, or 17.7%, primarily driven by costs associated with enrollment growth, due to increased student population, and growth initiatives.
Current report
Net interest expense. Net interest expense was $0.8 million for the three months ended March 31, 2026, relatively consistent with the prior year comparable period.
Current report
The Company maintains a revolving credit facility to support working capital and general corporate purposes. In April 2026, the Company entered into an amended and restated credit agreement, which increased total borrowing capacity from $60.0 million to $125.0 million and extended the maturity of the Facility from March 7, 2028 to April 11, 2031.
Current report
The proposed RISE regulations were subject to a public notice and comment period, which ended March 2, 2026. The DOE is expected to publish a final version of the regulations with an anticipated effective date of July 1, 2026. The AHEAD Committee reached a consensus on two sets of proposed regulations on December 12, 2025, and January 9, 2026, respectively. The first set of proposed regulations would implement the new Workforce Pell program authorized by the OBBB Act. See 10-K at “Regulatory Environment – Negotiated Rulemaking.” These proposed regulations were published in a notice of proposed rulemaking on March 6, 2026, and subject to a public notice and comment period, which ended April 8, 2026. The second set of proposed regulations would establish new uniform accountability requirements applicable to all educational programs across all education sectors. See 10-K at “Regulatory Environment – Negotiated Rulemaking” and “Regulatory Environment – Gainful Employment and Accountability.” The DOE published these proposed regulations in a notice of proposed rulemaking on April 20, 2026, with a comment period ending on May 20, 2026. The regulations are expected to be published in final form and take effect by July 1, 2026, but we cannot predict the ultimate timing, content, or impact of the final regulations.
Current report
Lastly, on January 27, 2026, the DOE announced a notice of its intent to initiate a rulemaking process with the goal of amending the existing regulations for the DOE’s recognition of accrediting agencies. The negotiated rulemaking committee met from April 13-17, 2026, and is scheduled to continue negotiations from May 18-22, 2026.
Current report
Borrower Defense to Repayment Regulations
Current report
The DOE’s Borrower Defense to Repayment (“BDR”) regulations establish processes for borrowers to receive from the DOE a discharge of the obligation to repay certain Title IV Program loans based on certain acts or omissions by the institution or a covered party. The regulations also establish processes for the DOE to seek recovery from the institution of the amount of discharged loans. See 10-K at “Regulatory Environment – Borrower Defense to Repayment Regulations.”
Current report
Between April 2021 and February 2024, the Company received three separate notifications from the DOE that the DOE was in receipt of borrower defense claims containing allegations concerning our schools and requiring that the DOE undertake a fact-finding process pursuant to DOE regulations. We have completed the process of thoroughly reviewing and responding to each borrower application as well as providing information in response to the DOE’s requests.
Current report
In March 2026, the Company received additional borrower defense claims containing allegations concerning our schools. The DOE subsequently published guidance to all institutions of higher education in late March 2026 and acknowledged that it had notified institutions of the applications before the DOE, it had substantively reviewed them through a fact-finding process and that institutions are not required to respond to the notices (and that there is no negative inference against an institution that does not respond). We have thoroughly reviewed and responded to each application thus far. The DOE also indicated that institutions may receive additional borrower defense applications in the future.
Current report
With respect to the applications sent to us in March 2026, the DOE advised institutions in late March 2026 that it will deny the applications of borrowers that do not satisfy the applicable regulatory standard and that it will approve the application, discharge the relevant loans, and issue refunds of payments to borrowers who satisfy the regulatory standard. We cannot predict how long it will take the DOE to review the applications or the outcome of the DOE review of the applications sent to us in March 2026 or any future applications the DOE sends to us. Moreover, the DOE has noted that it will not determine until a later date whether to engage in a separate proceeding to recoup liabilities from institutions based on approved applications. The DOE advised institutions in late March 2026 that institutions will have the opportunity to contest any recoupment actions in a hearing process and will receive a second notification with the application forms for all loans for which recoupment is requested, all attachments submitted by the borrower, and the rationale for the DOE’s decision to discharge. If the DOE seeks recoupment from us based on any or all approved applications, we would evaluate our legal options for challenging the legal and factual bases for such actions.
Removed paragraphs (59)
Previous report
Key elements of our business strategy include:
Previous report
Revenue. Revenue increased $27.0 million, or 23.6% to $141.4 million for the three months ended September 30, 2025, from $114.4 million in the prior year comparable period. Revenue growth was primarily due to a 17.2% increase in average student population, reflecting 12.0% start growth during the first nine months of 2025 from our campus operations. Additional contributing factors included tuition increases and the timing of books and tools revenue during this quarter.
Previous report
*Excludes 2,764 student starts on July 1, 2025, to align with comparable student start activity in the prior year which occurred in the last week of June 2024
Previous report
Educational services and facilities expense. Educational services and facilities expense increased by $9.2 million, or 19.2%, to $57.3 million for the three months ended September 30, 2025, compared to $48.1 million for the same period in 2024. This increase includes a $1.2 million reduction related to the Transitional segment, which incurred expenses only in the prior year. On a comparable basis, educational services and facilities expense increased by $10.4 million.
Previous report
The primary driver of the increase was higher costs associated with supporting a larger student population, including higher books and tools expense due to the timing of program starts. Additionally, the increase reflects market-based adjustments to instructional compensation to remain competitive and retain talent. The remaining increase was attributable to higher depreciation expense, largely resulting from capital investments to support our growth initiatives.
Previous report
As a percentage of revenue, instructional expenses decreased to 17.5% for the three months ended September 30, 2025, from 19.6% in the prior-year comparable period, reflecting improved operating efficiency. Similarly, educational services and facilities expense as a percentage of revenue declined to 40.5% from 42.0% in the prior year comparable period. These improvements demonstrate continued margin expansion as our campus operations scale.
Previous report
Administrative expenses increased $6.3 million, or 28.3%, primarily due to higher costs associated with our growing student population, increased compensation expenses, including performance-based incentives tied to improved financial performance, and a greater number of employee medical claims.
Previous report
Gain on insurance proceeds. During the three months ended September 30, 2024, the Company received gross insurance proceeds in the amount of $2.8 million relating to hail damage at one of our campuses.
Previous report
Net interest income/(expense). Net interest expense was $1.0 million for the three months ended September 30, 2025, compared to $0.2 million in the same period in 2024. The increase was primarily driven by a reduction in interest income resulting from lower average cash balances during the period, as funds were used for capital expenditures, and by higher interest expense on borrowings.
Previous report
Segment Results of Operations
Previous report
The following table presents selected operating metrics for our two reportable segments for the three months ended September 30, 2025 and 2024:
Previous report
*Excludes 2,764 student starts on July 1, 2025, to align with comparable student start activity in the prior year which occurred in the last week of June 2024
Previous report
Campus Operations
Previous report
Operating income increased $7.8 million, or 50.0% to $23.3 million for the three months ended September 30, 2025, from $15.5 million in the prior year comparable period. The change compared to the prior year comparable period was mainly driven by the following factors:
Previous report
Transitional
Previous report
In the fourth quarter of 2024, the Board of Directors approved a plan to close the Summerlin, Las Vegas campus. The sale of the Summerlin campus was consummated on January 1, 2025. During the prior year, the Summerlin campus was classified in the Transitional segment.
Previous report
Total operating expenses decreased $2.3 million, or 100.0% to zero for the three months ended September 30, 2025, from $2.3 million in the prior year comparable period.
Previous report
The change in operating performance was the result of closing the Summerlin campus and no longer enrolling new students at the campus.
Previous report
Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024
Previous report
Consolidated Results of Operations
Previous report
Educational services and facilities expense. Educational services and facilities expense increased by $14.9 million, or 10.9%, to $151.5 million for the nine months ended September 30, 2025, compared to $136.6 million for the same period in 2024. This increase includes a $3.4 million reduction related to the Transitional segment, which incurred expenses only in prior year. On a comparable basis, educational services and facilities expense increased by $18.3 million.
Previous report
As a percentage of revenue, instructional expenses decreased to 19.0% for the nine months ended September 30, 2025, from 21.2% in the prior year comparable period, reflecting improved operating efficiency. Similarly, educational services and facilities expense as a percentage of revenue declined to 40.4% from 42.6% in the prior year comparable period. These improvements demonstrate continued margin expansion as we scale operations.
Previous report
Selling, general and administrative expense. Selling, general and administrative expense increased $30.1 million, or 16.6%, to $211.8 million for the nine months ended September 30, 2025, compared to $181.7 million for the same period in 2024. This includes a $3.4 million reduction related to the Transitional segment, which had expenses in the prior year but none in the current period.
Previous report
Index
Previous report
Administrative expenses rose $20.0 million, or 30.5%, primarily due to a greater number of employee medical claims and increased costs associated with our expanding student population and improved financial performance.
Previous report
Marketing expense increased by $3.0 million or 8.5% year over year driven by planned investments in new programs and initiatives.
Previous report
Selling, general and administrative expenses, as a percentage of revenue, was 56.4%, compared to 56.7% in the prior year comparable period.
Previous report
(Gain) Loss on Sale of Assets. Gain on sale was $0.5 million for the nine months ended September 30, 2025, compared to a loss of $0.9 million in the prior year.
Previous report
Gain on insurance proceeds. During the nine months ended September 30, 2024, the Company received gross insurance proceeds in the amount of $2.8 million relating to hail damage at one of our campuses.
Previous report
Net interest expense. Net interest expense was $2.4 million for the nine months ended September 30, 2025, compared to net interest expense of $0.1 million for the nine months ended September 30, 2024, primarily driven by a reduction in interest income resulting from lower average cash balances during the period, as funds were used for capital expenditures, and by higher interest expense on borrowings.
Previous report
Segment Results of Operations
Previous report
The following table presents selected operating metrics for our two reportable segments for the nine months ended September 30, 2025 and 2024:
Previous report
Index
Previous report
Campus Operations
Previous report
Operating income increased $26.0 million, or 67.9% to $64.2 million for the nine months ended September 30, 2025, from $38.3 million in the prior year comparable period. The change compared to the prior year was mainly driven by the following factors:
Previous report
Transitional
Previous report
In the fourth quarter of 2024, the Board of Directors approved a plan to close the Summerlin, Las Vegas campus. The sale of the Summerlin campus was consummated on January 1, 2025. During the prior year, the Summerlin campus was classified in the Transitional segment.
Previous report
The change in operating performance was the result of closing the campus and no longer enrolling new students.
Previous report
Corporate and Other
Showing the first 40 of 59 passages. Open the source sections for the rest.
Reworded paragraphs (31)
Previous wording
The following discussion may contain forward-looking statements regarding the Company, our business, prospects, and our results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects, and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “may,” “will,” “forecast,” “outlook,” “plan,” “project,” or similar words and include, without limitation, statements relating to future enrollment, revenues, revenues per student, earnings growth, operating expenses, capital expenditures, and the effect of pandemics and its ultimate effect on the Company’s business and results. These statements are based on the Company’s current expectations and are subject to a number of assumptions, risks and uncertainties. Additional factors that could cause or contribute to differences between our actual results and those anticipated include, but are not limited to, those described in the “Risk Factors” section of our Form 10-K and in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this Form 10-Q and in our other reports filed with the SEC that advise interested parties of the risks and factors that may affect our business.
Current wording
This discussion may contain forward-looking statements, that are based on management's current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects, and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Such statements may be identified by the use of words such as “expect,” “estimate,” “assume,” “believe,” “anticipate,” “may,” “will,” “forecast,” “outlook,” “plan,” “project,” or similar words and include, without limitation, statements relating to future enrollment, revenues, revenues per student, earnings growth, operating expenses, capital expenditures, and the effect of pandemics and its ultimate effect on the Company’s business and results. These statements are based on the Company’s current expectations and are subject to a number of assumptions, risks and uncertainties. Additional factors that could cause or contribute to differences between our actual results and those anticipated include, but are not limited to, those described in the “Risk Factors” section of our Form 10-K and in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. Readers are urged to carefully review and consider the various disclosures made by us in this Form 10-Q and in our other reports filed with the SEC that advise interested parties of the risks and factors that may affect our business.
Previous wording
The Company’s business is organized into two reportable business segments: Campus Operations; and Transitional. The Campus Operations segment includes campuses that are continuing in operation and contribute to the Company’s core operations and performance. The Transitional segment refers to campuses that have been marked for closure and are being taught out. As of September 30, 2025 no campuses were classified in the Transitional segment. In the prior year, the Company’s Summerlin, Las Vegas campus was classified in the Transitional segment and its sale was consummated on January 1, 2025.
Current wording
The Company’s business is organized into two reportable business segments: Campus Operations; and Transitional. The Campus Operations segment includes campuses that are continuing in operation and contribute to the Company’s core operations and performance. The Transitional segment refers to campuses that have been marked for closure and are being taught out. As of March 31, 2026 no campuses were classified in the Transitional segment.
Previous wording
Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our”, and “us”, as applicable) provide diversified career-oriented postsecondary education to recent high school graduates and working adults. The Company, which currently operates 22 campuses in 12 states, has entered into leases for three new campuses: one in Houston, Texas, which opened in the third quarter of 2025, one in Hicksville, New York, with programs expected to begin by the end of 2026, and one in Rowlett, Texas, a northern suburb of Dallas, where the lease is expected to commence in the fourth quarter of 2025, and programs are expected to begin in the first quarter of 2027. The Company entered into the Houston lease, Hicksville lease and Rowlett lease on October 31, 2023, December 12, 2024, and September 12, 2025, respectively. The Company offers programs in skilled trades, automotive, health sciences and information technology. The schools operate under the brands Lincoln Technical Institute, Lincoln College of Technology and Nashville Auto Diesel College.
Current wording
Lincoln Educational Services Corporation and its subsidiaries (collectively, the “Company”, “we”, “our”, and “us”, as applicable) provide diversified career-oriented postsecondary education to recent high school graduates and working adults. The Company, which currently operates 22 campuses in 12 states, recently entered into leases for two new campuses: one in Hicksville, New York, with programs expected to begin by the end of 2026, and one in Rowlett, Texas, a northern suburb of Dallas, where the lease commenced in the fourth quarter of 2025, and programs are expected to begin in the first quarter of 2027. The Company offers programs in skilled trades, automotive, health sciences and information technology. The schools operate under the brands Lincoln Technical Institute, Lincoln College of Technology and Nashville Auto Diesel College.
Previous wording
Most of the Company’s campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of the campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of the campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S. Department of Education (the "DOE”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company was incorporated in New Jersey in 2003, as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946.
Current wording
Most of the Company’s campuses serve major metropolitan markets and each typically offers courses in multiple areas of study. Five of our campuses are destination schools, which attract students from across the United States and, in some cases, from abroad. The Company’s other campuses primarily attract students from their local communities and surrounding areas. All of our campuses are nationally accredited and are eligible to participate in federal financial aid programs administered by the U.S. Department of Education (the "DOE”) and applicable state education agencies and accrediting commissions which allow students to apply for and access federal student loans as well as other forms of financial aid. The Company was incorporated in New Jersey in 2003, as the successor-in-interest to various acquired schools including Lincoln Technical Institute, Inc. which opened its first campus in Newark, New Jersey in 1946.
Previous wording
Expand Geographically. We plan to open new campuses and enter new markets using existing resources or acquisitions. We opened a new campus in Houston, Texas in August 2025, and have signed leases for new campuses in Hicksville, New York, where programs are expected to begin by the end of 2026, and Rowlett, Texas, expected to open in the first quarter of 2027.
Current wording
Expand Geographically. We plan to open new campuses and enter new markets using existing resources or acquisitions. We have signed leases for new campuses in Hicksville, New York, where programs are expected to begin by the end of 2026, and Rowlett, Texas, which is expected to open in the first quarter of 2027. We continue to evaluate opportunities to expand our footprint in markets that support our long-term growth objectives.
Previous wording
Replicate Programs and Expand Existing Areas of Study. We are expanding our program portfolio by introducing in-demand offerings at existing campuses and replicating proven in-demand offerings across locations.
Current wording
Replicate Programs and Expand Existing Areas of Study. We are expanding our program portfolio by introducing in-demand programs across locations. This approach allows us to serve local market needs while leveraging our existing curriculum, faculty expertise, and infrastructure.
Previous wording
Increase Operating Efficiency. We aim to improve margins and scalability by centralizing operations, standardizing curricula, and leveraging technology to streamline campus functions.
Current wording
Increase Operating Efficiency. We aim to improve margins and scalability by centralizing operations, standardizing curricula, and leveraging technology such as artificial intelligence to streamline campus functions. By continuing to simplify and standardize our operating model, we believe we can enhance efficiency and support sustainable growth across our organization.
Previous wording
Maximize Utilization of Existing Facilities. We focus on increasing facility usage through enrollment growth, new programs, and industry partnerships.
Current wording
Maximize Utilization of Existing Facilities. We focus on increasing facility usage through enrollment growth, the introduction of new programs, and expanded industry partnerships. In addition, our hybrid teaching model provides increased flexibility to align our real estate footprint with evolving instructional needs.
Previous wording
Expand Teaching Platform. We are transitioning to a hybrid teaching platform, Lincoln 10.0, the implementation of which has been substantially completed and is expected to be finalized by the end of the year for all planned programs, to offer greater flexibility, efficiency, and value to students.
Current wording
Expand Teaching Platform. We are transitioning to a hybrid teaching platform, Lincoln 10.0, the implementation of which has been substantially completed and is expected to be finalized by the end of 2026 for all planned programs, except for our Licensed Practical Nurse program which should be completed by the end of 2027. This platform is designed to provide greater flexibility, efficiency, and value to students, while supporting a more scalable and standardized academic delivery model.
Previous wording
Results of Operations for the Three and Nine Months Ended September 30, 2025
Current wording
Results of Operations for the Three Months Ended March 31, 2026
Previous wording
Revenue. Revenue increased $54.7 million, or 17.1% to $375.4 million for the nine months ended September 30, 2025, from $320.7 million in the prior year comparable period. Revenue growth was primarily due to a 15.4% increase in average student population.
Current wording
Revenue. Revenue increased $26.5 million, or 22.5% to $144.0 million for the three months ended March 31, 2026, from $117.5 million in the prior year comparable period. Revenue growth was primarily due to a 18.2% increase in average student population driven by 19.5% start growth, with the remainder attributable to tuition increases.
Previous wording
The primary driver of the increase was depreciation expense, largely resulting from capital investments to support our growth initiatives. The remaining increase was attributable to higher costs associated with supporting a larger student population, including market-based adjustments to instructional compensation to remain competitive and retain talent.
Current wording
The increase was primarily driven by costs associated with a larger student population. The remaining increase was attributable to $3.9 million higher depreciation expense, including $0.8 million related to new campuses, largely resulting from capital investments to support our growth initiatives.
Previous wording
Selling, general and administrative expense. Selling, general and administrative expense increased $14.5 million, or 22.8% to $77.8 million for the three months ended September 30, 2025, compared to $63.3 million for the same period in 2024. This includes a $1.1 million reduction related to the Transitional segment, which had expenses in the prior year but none in the current period.
Current wording
Selling, general and administrative expense. Selling, general and administrative expense increased by $12.2 million, or 18.3% to $79.2 million for the three months ended March 31, 2026, compared to $66.9 million for the same period in 2025. This includes a $1.9 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett.
Previous wording
Selling, general and administrative expenses, as a percentage of revenue was 55.0% for the three months ended September 30, 2025, compared to 55.4% for the same period in 2024.
Current wording
Selling, general and administrative expenses continued to decline as a percentage of revenue to 55.0% for the three months ended March 31, 2026, compared to 56.9% for the same period in 2025.
Previous wording
Student services expense increased $1.0 million or 18%, driven by continued investments in staffing and support infrastructure to serve a growing student base.
Current wording
Student services expense increased $1.1 million or 17.9%, driven by continued investments in staffing and support infrastructure to serve a growing student base.
Previous wording
Marketing expense increased by $3.5 million, or 28.5% resulting from planned investments and the timing of the marketing activities.
Current wording
Sales and marketing expense increased by $4.2 million, or 21.3%, including $1.2 million related to our new campuses, resulting from planned investments and the timing of the marketing activities.
Previous wording
Provision for credit losses. While the provision increased in absolute terms, it declined as a percentage of revenue from 13.3% to 12.4% year-over-year.
Current wording
Provision for credit losses. While the provision increased in absolute terms, it declined as a percentage of revenue from 10.1% to 9.5% year-over-year reflecting continuing efficiencies from our financial aid processes and stronger collections.
Previous wording
Income taxes. Income tax provision was $1.5 million for the three months ended September 30, 2025, representing an effective tax rate of 28.2% of pre-tax income, compared to $1.7 million income tax provision and an effective tax rate of 29.7% in the prior year comparable period.
Current wording
Income taxes. Income tax provision was $1.2 million for the three months ended March 31, 2026, representing an effective tax rate of 22.2% of pre-tax income, compared to $0.9 million income tax provision and an effective tax rate of 31.2% in the prior year comparable period.
Previous wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $17.0 million for the three months ended September 30, 2025, compared to $9.0 million in the prior year comparable period. The increase was primarily driven by higher salaries and benefits due to workforce expansion to support a larger student population and to execute our growth initiatives. Additionally, employee medical claims increased, and performance-based incentive compensation increased tied to improved financial performance.
Current wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $21.3 million for the three months ended March 31, 2026, compared to $18.3 million in the prior year comparable period. The increase was primarily driven by higher salaries and benefits due to workforce expansion to support a larger student population and to execute our growth initiatives.
Previous wording
Our primary capital requirements are for maintenance and expansion of our facilities and the development of new programs. Our principal source of liquidity has been cash provided by operating activities. The following chart summarizes the principal elements of our cash flow for each of the nine months ended September 30, 2025 and 2024:
Current wording
Our primary capital requirements are for maintenance and expansion of our facilities and the development of new programs. Our principal source of liquidity has been cash provided by operating activities. The following chart summarizes the principal elements of our cash flow for each of the three months ended March 31, 2026, and 2025:
Previous wording
As of September 30, 2025, the Company had $13.5 million in cash and cash equivalents, compared to $54.0 million in cash and cash equivalents as of September 30, 2024. The change in cash position from the prior year comparable period was primarily driven by increased capital expenditures due to campus expansion.
Current wording
As of March 31, 2026, the Company had $16.7 million in cash and cash equivalents, compared to $28.7 million in cash and cash equivalents as of March 31, 2025. The change in cash position from the prior year comparable period was primarily driven by increased capital expenditures due to campus expansion, partially offset by higher cash inflows from operating activities.
Previous wording
Our primary source of cash is tuition collected from our students. The majority of students enrolled at our schools rely on funds received under various government-sponsored student financial aid programs to pay a substantial portion of their tuition and other education-related expenses. The most significant source of student financing is Title IV Programs, which represented approximately 82% of our cash receipts relating to revenues in 2024. Pursuant to applicable regulations, students must apply for a new loan for each academic period. Federal regulations dictate the timing of disbursements of funds under Title IV Programs and loan funds are generally provided by lenders in two disbursements for each academic year. The first disbursement is usually received approximately 31 days after the start of a student’s academic year and the second disbursement is typically received at the beginning of the sixteenth week from the start of the student's academic year. Certain types of grants and other funding are not subject to a 31-day delay. In certain instances, if a student withdraws from a program prior to a specified date, any paid but unearned tuition or prorated Title IV Program financial aid is refunded according to federal, state and accrediting agency standards.
Current wording
Our primary source of cash is tuition collected from our students. The majority of students enrolled at our schools rely on funds received under various government-sponsored student financial aid programs to pay a substantial portion of their tuition and other education-related expenses. The most significant source of student financing is Title IV Programs, which represented approximately 85% of our cash receipts relating to revenues in 2025. Pursuant to applicable regulations, students must apply for a new loan for each academic period. Federal regulations dictate the timing of disbursements of funds under Title IV Programs and loan funds are generally provided by lenders in two disbursements for each academic year. The first disbursement is usually received approximately 31 days after the start of a student’s academic year and the second disbursement is typically received at the beginning of the sixteenth week from the start of the student's academic year. Certain types of grants and other funding are not subject to a 31-day delay. In certain instances, if a student withdraws from a program prior to a specified date, any paid but unearned tuition or prorated Title IV Program financial aid is refunded according to federal, state and accrediting agency standards.
Previous wording
Net cash provided by operating activities was $15.8 million for the nine months ended September 30, 2025, compared to net cash used in operating activities of $1.0 million in the prior year comparable period. The increase in cash position was primarily driven by changes in working capital and higher net income.
Current wording
Net cash provided by operating activities was $4.6 million for the three months ended March 31, 2026, compared to net cash used in operating activities of $8.4 million in the prior year comparable period. The increase in cash position was primarily driven by changes in working capital and higher net income.
Previous wording
Net cash used in investing activities was $67.6 million for the nine months ended September 30, 2025, compared to $22.2 million net cash used in investing activities in the prior year comparable period primarily driven by higher capital expenditures associated with growth initiatives.
Current wording
Net cash used in investing activities was $14.6 million for the three months ended March 31, 2026, compared to $19.6 million in the prior year comparable period primarily driven by higher capital expenditures associated with growth initiatives.
Previous wording
Capital expenditures for the nine months ended September 30, 2025, were $68.1 million compared to $32.1 million in the prior year comparable period. The increase in planned capital expenditures includes the buildouts to relocate the Nashville, Tennessee, and Levittown, Pennsylvania campuses and the buildout for the new Houston, Texas and Hicksville, New York campuses. In addition, we continue to invest to expand programs at existing campuses which demonstrate high market demand and successful student outcomes. We expect to fund future capital expenditures with cash generated from operating activities and cash on hand.
Current wording
Capital expenditures for the three months were $14.6 million compared to $19.9 million in the prior year comparable period. Thedecrease resulted from a shift in the timing ofplanned capital expenditures which includes the buildout for the new Houston, Texas Rowlett, Texas and Hicksville, New York campuses. In addition, we continue to invest to expand programs at existing campuses which demonstrate high market demand and successful student outcomes. We expect to fund future capital expenditures with cash generated from operating activities and cash on hand.
Previous wording
Net cash provided by financing activities for the nine months ended September 30, 2025, was $6.0 million, compared to $3.1 million of cash used in financing activity in the three and nine months ended September 30, 2024. The increase in cash position was primarily due to net borrowings in the current period.
Current wording
Net cash used in financing activities for the three months ended March 31, 2026, was $1.8 million, compared to $2.6 million in the prior year comparable period. The decrease in cash used was primarily due to higher net borrowings in the current period, partially offset by higher cash outflows related to net share settlement of equity-based compensation.
Previous wording
As of September 30, 2025, the Company had $8.0 million outstanding under the Facility.
Current wording
As of March 31, 2026, the Company had $5.0 million outstanding under the Facility, which has now been repaid in connection with the replacement of the Facility with the Amended and Restated Facility. For additional information regarding the terms of the Company’s credit facility, see Note 7, Long-Term Debt.
Previous wording
Current portion of Long-Term Debt, Long-Term Debt and Lease Commitments. As of September 30, 2025, the Company had $8.0 million in debt outstanding under the Facility. We lease offices, educational facilities and various items of equipment for varying periods through the year 2045 at basic annual rental rates (excluding taxes, insurance, and other expenses under certain leases).
Current wording
Current portion of Long-Term Debt, Long-Term Debt and Lease Commitments. As of March 31, 2026, the Company had $5.0 million in debt outstanding under the Facility. We lease offices, educational facilities and various items of equipment for varying periods through the year 2045 at basic annual rental rates (excluding taxes, insurance, and other expenses under certain leases).
Previous wording
As of September 30, 2025, the Company had outstanding loan principal commitments to our active students of $55.3 million. These are institutional loans, and no cash is advanced to students. The full loan amount is not guaranteed unless the student completes the program. The institutional loans are considered commitments because the students are required to fund their education using these funds and they are not reported on our financial statements.
Current wording
As of March 31, 2026, the Company had outstanding loan principal commitments to our active students of $59.2 million. These are institutional loans, and no cash is advanced to students. The full loan amount is not guaranteed unless the student completes the program. The institutional loans are considered commitments because the students are required to fund their education using these funds and they are not reported on our financial statements.
Previous wording
On July 24, 2025, the DOE announced in the Federal Register its intent to establish two negotiated rulemaking committees. One committee will consider changes to the federal student loan programs and the other committee will consider changes to institutional and programmatic accountability, the Pell Grant Program, and other changes to the Title IV, HEA programs. See Form 10-Q for the quarterly period ended June 30, 2025 at “Regulatory Updates – Negotiated Rulemaking.” This rulemaking is necessary to implement recent statutory changes to the Title IV, HEA programs included in the One Big Beautiful Bill Act (“OBBB Act”), as well as to implement other Trump Administration priorities. As previously disclosed, Congress passed the OBBB Act, which was signed by the President on July 4, 2025, has a general effective date of July 1, 2026 (with exceptions), and enacts several changes to the HEA that will impact us and our schools. See Form 10-Q for quarterly period ended June 30, 2025 at “Regulatory Updates – Congress and Presidential Action.” The committee considering changes to the federal student loan programs began meeting from September 29, 2025, to October 3, 2025 and is scheduled to continue negotiations in early November 2025. The negotiated rulemaking committee considering changes to institutional and programmatic accountability (including measures related to financial value transparency and gainful employment and measures from the OBBB Act related to programs with low earnings), the Pell Grant Program, and other Title IV programs is scheduled to meet in December 2025, and January 2026.
Current wording
In 2025, the DOE announced its intention to establish two negotiated rulemaking committees. The Reimagining and Improving Student Education (RISE) Committee would consider changes to the federal student loan programs and the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee would consider changes to institutional and programmatic accountability, the Pell Grant Program, and other changes to the Title IV Programs. This rulemaking is necessary to implement recent statutory changes to the Title IV and HEA programs included in the One Big Beautiful Bill Act ("OBBB Act") as well as to propose other changes. See 10-K “Regulatory Environment – Negotiated Rulemaking” and “Regulatory Environment – Gainful Employment and Accountability.”
Previous wording
We cannot predict the timing, scope, and final content of any regulations or guidance the DOE might issue as a result of either the OBBB Act and the ongoing negotiated rulemaking processes or during any other process the DOE might complete in the future. We also cannot predict with certainty the extent to which our schools and educational programs will be able to comply with the revised requirements or the extent to which the revisions and reduced aid eligibility will impact our enrollments. Although some or all of future DOE regulations could be favorable to us and our schools, new DOE regulations could increase the possibility that our schools could be subject to additional reporting requirements, to potential liabilities and sanctions, and to potential loss of Title IV eligibility if our efforts to modify our operations to comply with any new requirements are unsuccessful which could have a significant impact on our business and results of operations.
Current wording
We cannot predict the timing and scope of any regulations or guidance the DOE might issue on these or other topics, but new regulations or guidance on these or other topics could increase the possibility that our schools could be subject to additional reporting requirements, additional oversight by DOE and accrediting agencies, and potential liabilities and sanctions such as letter of credit requirements, and potential loss of Title IV eligibility if our efforts to modify our operations to comply with any new requirements are unsuccessful which could have a significant impact on our business and results of operations.
Rearranged previous paragraphs (9)
Previous report — wording carried elsewhere
The Company’s business is organized into two reportable business segments: Campus Operations and Transitional. These segments are defined below:
Previous report — wording carried elsewhere
Campus Operations –The Campus Operations segment includes all campuses that are continuing in operation and contribute to the Company’s core operations and performance.
Previous report — wording carried elsewhere
Transitional – The Transitional segment refers to campuses that have been marked for closure and are being taught out. As of September 30, 2025, no campuses were classified in the Transitional segment. During the prior year, the Company’s Summerlin, Las Vegas campus was classified in the Transitional segment. The sale of the Summerlin campus was consummated on January 1, 2025.
Previous report — wording carried elsewhere
We evaluate performance based on operating results. Adjustments to reconcile segment results with consolidated results are included in the caption “Corporate,” which primarily includes unallocated corporate activity.
Previous report — wording carried elsewhere
Student services expense increased $2.6 million, or 16.1%, driven by continued investments in staffing and support infrastructure to serve a growing student base.
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Provision for credit losses. While the provision increased in absolute terms, it declined as a percentage of revenue from 12.7% to 11.3% year-over-year.
Previous report — wording carried elsewhere
Income taxes. Income tax provision was $2.9 million for the nine months ended September 30, 2025, representing an effective tax rate of 28.4% of pre-tax income, compared to $1.1 million income tax provision and an effective tax rate of 26.4% in the prior year comparable period.
Previous report — wording carried elsewhere
We evaluate performance based on operating results. Adjustments to reconcile segment results with consolidated results are included in the caption “Corporate,” which primarily includes unallocated corporate activity.
Previous report — wording carried elsewhere
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $51.7 million for the nine months ended September 30, 2025, compared to $32.6 million in the prior year comparable period. The increase was primarily driven by higher salaries and benefits due to workforce expansion to support a larger student population and to execute our growth initiatives. Additionally, employee medical claims increased and performance-based incentive compensation increased in line with improved financial performance.