LINCOLN EDUCATIONAL SERVICES CORP
For the period ended Sep 30, 2026. Filed Nov 9, 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 Nov 9, 2026
LINC$22.00+24.6%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-10.
0001140361-26-031995
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0001140361-26-042810
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 91 previous paragraphs and 86 current paragraphs.
42 unchanged; 38 reworded; 5 added; 9 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 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 (5)
Current report
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
Current report
During the three and nine months ended September 30, 2026, we repurchased 871,135 shares of our Common Stock for an aggregate purchase price of approximately $21.0 million, excluding excise tax, under our share repurchase program, of which $1.7 million was settled on October 1, 2026. As of September 30, 2026, $8.7 million remained available under the program. Under the First Amendment to Amended and Restated Credit Agreement and Waiver (the “Amendment and Waiver”), future share repurchases are permitted provided that no default or event of default is continuing or would result and that our total liquidity after the transaction would exceed $25 million, as discussed elsewhere and below.
Current report
During the three months ended September 30, 2026, and subsequently on October 2, 2026, we repurchased shares of our Common Stock while advances under the Amended and Restated Facility were outstanding, which repurchases were not in compliance with the conditions stated in the Amended and Restated Credit Agreement and, as such, constituted an event of default. On November 6, 2026, we entered into the Amendment and Waiver under which, among other things, the lenders waived such event of default. In addition, the Amendment and Waiver permits future share repurchases provided that no default or event of default is continuing or would result and that our total liquidity after the transaction would exceed $25.0 million, and adds a Daily Simple SOFR borrowing option allowing daily borrowing with the ability to repay such borrowings without premium, penalty or breakage fees.
Current report
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 Accreditation, Innovation, and Modernization (AIM) Committee met from April 13-17, 2026, and from May 18-21, 2026. The AIM Committee reached consensus on the proposed regulations on May 21, 2026. The proposed regulations would revise the federal recognition criteria for accrediting agencies related to topics including transfer of credit, application of student achievement and outcomes standards, faculty sufficiency and integrity, institutional facilities, and due process during appeals of adverse actions, and would institute other changes to the accreditation regulations that could affect institutions accredited by federally recognized accrediting agencies, including our schools. The DOE published a notice of proposed rulemaking on August 20, 2026, and the comment period expired on September 21, 2026. Subsequently, the DOE published the final regulations on October 30, 2026, with an effective date of July 1, 2027. We are still evaluating the final regulation and cannot predict the impact of this regulation on our schools.
Current report
The new regulation discussed above, and any future regulations or guidance on these or other topics, could increase the possibility that our schools could be subject to additional reporting requirements and additional oversight by DOE and accrediting agencies. The DOE has indicated it intends to engage in further rulemaking on topics which may include, but not be limited to, rules governing change of ownership, cash management, administrative capability standards, program length requirements, financial responsibility requirements, the 90/10 rule, and campus safety and security reporting requirements. However, we cannot predict whether or when the DOE may engage in rulemaking on these or other topics, nor the timing, scope, and impact of any future regulations or guidance the DOE might issue on these or other topics.
Removed paragraphs (9)
Previous report
Provision for credit losses. While the provision increased by $2.9 million, it was slightly lower as a percentage of revenue at 11.2% compared to 11.3% in the prior year.
Previous report
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025
Previous report
Net interest expense. Net interest expense was $1.9 million for the six months ended June 30, 2026, compared to net interest expense of $1.4 million for the six months ended June 30, 2025, primarily driven by higher interest expense on borrowings.
Previous report
In 2025, the DOE announced its intention to establish two negotiated rulemaking committees: the Reimagining and Improving Student Education (RISE) Committee and the Access through Demand-driven Workforce Pell (AHEAD) Committee. The RISE Committee considered changes to federal student loan programs and the Accountability in Higher Education, and the AHEAD Committee considered changes to institutional and programmatic accountability, the Pell Grant Program, and Title IV Programs. This rulemaking was 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 report
The proposed RISE regulations were subject to a public notice and comment period, which ended March 2, 2026, and the DOE published the final version of the regulations on May 1, 2026, with a general effective date of July 1, 2026. Among other topics, the new regulations place a $20,000 annual limit and a $65,000 aggregate limit on PLUS loans that parents may borrow for undergraduate programs and impose a requirement to prorate loans to students attending on a less than full-time basis. We are evaluating these and other new limits and cannot currently predict the extent to which these new limits may impact our schools, programs, enrollments, and revenues, but the reduction in availability of funding could impact the ability of some of our prospective students to enroll and finance their education without access to loans in excess of the new loan limits.
Previous report
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 implements the new Workforce Pell program authorized by the OBBB Act. See 10-K at “Regulatory Environment – Negotiated Rulemaking.” Under these regulations, short-term workforce programs (as defined in the regulations) will be eligible to disburse Pell Grants if they meet various requirements such as applicable program length requirements, certain limitations on outsourcing instruction to ineligible providers, and obtaining requisite DOE and state approval in the state in which the institution is located.
Previous report
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 the regulations in final form on July 1, 2026. The regulations eliminate the “debt-to-earnings” measures under the gainful employment regulations. Instead, the regulations establish and describe an earnings premium framework for undergraduate certificate and degree programs that would compare graduate earnings to those of holders of high school diplomas and for graduate programs that would compare graduate earnings to those of bachelor’s degree holders. Under the framework described in the regulations, an educational program would lose access to the Direct Loan program if it fails to achieve a positive earnings premium for two out of three consecutive years.
Previous report
The regulations outlining the new accountability framework, known as the Student Tuition and Transparency System (“STATS”) and Earnings Accountability rule, address several other topics including, for example, the complex rules for the earnings calculations and premiums, data and calculation appeals, warning and disclosure requirements for programs that fail the earnings test and that are at risk of losing eligibility, sanctions for programs that fail the earnings tests, informational reporting requirements, requirements for DOE to publicly disclose certain institutional data, requirements for institutions to certify program compliance, and provisional certification requirements for institutions with failing programs exceeding new administrative capability thresholds. The regulations have a general effective date of July 1, 2027, with some portions taking effect on August 31, 2026. The first earnings test calculations are expected to occur in early 2027, and July 1, 2028, is expected to be the first date on which a program could fail the earnings test for two consecutive years.
Previous report
We cannot predict how our educational programs will perform under the new metrics, but our failure to comply with the new regulations, including the failure of some of our educational programs to comply with the earnings tests, and the potential loss of Direct Loan and potentially all Title IV eligibility for impacted programs, could have a significant impact on our business and results of operations. We cannot predict whether the DOE could publish amended regulations in the future under current or future leadership that make the accountability regulations stricter or seek to reinstitute the old gainful employment requirements. We also cannot predict the outcome or impact of any litigation that might seek to challenge the legality and enforceability of the final regulations.
Reworded paragraphs (38)
Previous 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, which 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, which 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 their ultimate effects 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 June 30, 2026 no campuses were classified in the Transitional segment.
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, in addition to campuses that are held-for-sale. As of September 30, 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, recently entered into leases for three new campuses: one in Hicksville, New York, with programs expected to begin by the end of 2026; one in Rowlett, Texas, a northern suburb of Dallas, with programs expected to begin in the first quarter of 2027; and one in Suitland, Maryland, located in the Washington, D.C. metropolitan area with programs expected to begin in the fourth 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.
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 23 campuses in 12 states, recently opened its new campus in Hicksville, New Yorkin November 2026 and has recently entered into leases for three new campuses: one in Rowlett, Texas, a northern suburb of Dallas, with programs expected to begin in the first half of 2027; one in Suitland, Maryland, located in the Washington, D.C. metropolitan area with programs expected to begin in the fourth quarter of 2027; and one in Tempe, Arizona, located in the Phoenix metropolitan area, with programs expected to begin in the first quarter of 2028. 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
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; Rowlett, Texas, which is expected to open in the first quarter of 2027, and Suitland, Maryland, with programs expected to begin in the fourth quarter of 2027. We continue to evaluate opportunities to expand our footprint in markets that support our long-term growth objectives.
Current wording
Expand Geographically. We plan to open new campuses and enter new markets using existing resources or acquisitions. We opened new campuses in Hicksville, New York in November 2026 and in Houston, Texas in August 2025, and have signed leases for new campuses in Rowlett, Texas, which is expected to open in the first quarter of 2027; Suitland, Maryland, with programs expected to begin in the fourth quarter of 2027; and Tempe, Arizona, for which we entered into in August 2026, with programs expected to begin in the first quarter of 2028. We continue to evaluate opportunities to expand our footprint in markets that support our long-term growth objectives.
Previous wording
Results of Operations for the Three and Six Months Ended June 30, 2026
Current wording
Results of Operations for the Three and Nine Months Ended September 30, 2026
Previous wording
Revenue. Revenue increased $26.1 million, or 22.4% to $142.6 million for the three months ended June 30, 2026, from $116.5 million in the prior year comparable period. Revenue growth was primarily due to a 14.5% increase in average student population, with the remainder attributable to tuition increases.
Current wording
Revenue. Revenue increased $17.8 million, or 12.6%, to $159.2 million for the three months ended September 30, 2026, from $141.4 million in the prior year comparable period. Revenue growth was primarily due to a 10.9% increase in average student population.
Previous wording
** 2025 figures include 2,764 student starts on July 1, 2025, to align with comparable student start activity in the current year during the last week of June 2026, returning to our typical start schedule.*
Current wording
2025 figures exclude 2,764 student starts on July 1, 2025, which are reflected in the three months ended June 30, 2025, to align with comparable student start activity in the current year during the last week of June 2026, returning to our typical start schedule.
Previous wording
Educational services and facilities expense. Educational services and facilities expense increased by $12.8 million, or 27.4%, to $59.6 million for the three months ended June 30, 2026, compared to $46.8 million for the prior year comparable period. This includes a $2.9 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett.
Current wording
Educational services and facilities expense. Educational services and facilities expense increased by $9.8 million, or 17.2%, to $67.1 million for the three months ended September 30, 2026, compared to $57.3 million for the prior year comparable period. This includes a $3.1 million increase in costs related to our new campuses in Houston, Hicksville, Rowlett and Suitland.
Previous wording
The primary driver of the increase was attributable to higher costs associated with supporting a larger student population. The remaining increase was attributable to higher depreciation expense, largely resulting from capital investments to support our growth initiatives.
Current wording
The increase was primarily due to costs associated with a larger student population, higher books and tools expense from increased laptop pricing, and higher depreciation resulting from capital investments to support our growth initiatives.
Previous wording
Educational services and facilities expense as a percentage of revenue increased to 41.8% from 40.2% in the prior year comparable period.
Current wording
Educational services and facilities expense as a percentage of revenue increased to 42.2% from 40.5% in the prior year comparable period.
Previous wording
Selling, general and administrative expense. Selling, general and administrative expense increased $12.6 million, or 18.8% to $79.7 million for the three months ended June 30, 2026, compared to $67.1 million in the prior year comparable period. This includes a $2.1 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett.
Current wording
Selling, general and administrative expense. Selling, general and administrative expense increased $6.5 million, or 8.4%, to $84.3 million for the three months ended September 30, 2026, compared to $77.8 million in the prior year comparable period. The increase was primarily driven by a larger student population and higher sales and marketing expense. This includes a $1.6 million increase in costs related to our new campuses.
Previous wording
Sales and marketing expense increased by $5.9 million, or 31.1%, including $1.2 million related to our new campuses, due to higher student acquisition costs.
Current wording
Sales and marketing expense increased by $3.5 million, or 13.9%, including $0.5 million related to our new campuses, due to higher student acquisition costs.
Previous wording
Selling, general and administrative expenses continued to decline as a percentage of revenue, at 55.9% for the three months ended June 30, 2026, compared to 57.6% for the same period in 2025.
Current wording
Selling, general and administrative expenses continued to decline as a percentage of revenue, at 53.0% for the three months ended September 30, 2026, compared to 55.0% for the same period in 2025.
Previous wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $39.6 million for the six months ended June 30, 2026, compared to $34.7 million in the prior year comparable period. The increase was primarily driven by higher salaries and benefits to support a larger student population and the execution of our growth initiatives.
Current wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $17.1 million for the three months ended September 30, 2026, compared to $17.0 million in the prior year comparable period, remaining relatively consistent year over year.
Previous wording
Revenue. Revenue increased $52.5 million, or 22.4% to $286.5 million for the six months ended June 30, 2026, from $234.0 million in the prior year comparable period. Revenue growth was primarily due to a 16.3% increase in average student population, with the remainder attributable to tuition increases.
Current wording
Revenue. Revenue increased $70.3 million, or 18.7%, to $445.7 million for the nine months ended September 30, 2026, from $375.4 million in the prior year comparable period. Revenue growth was primarily due to a 14.4% increase in average student population.
Previous wording
*** 2025 figures include 2,764 student starts on July 1, 2025, to align with comparable student start activity in the current year during the last week of June 2026, returning to our typical start schedule.
Current wording
2025 figures exclude 2,764 student starts on July 1, 2025, which are reflected in the three months ended June 30, 2025, to align with comparable student start activity in the current year during the last week of June 2026, returning to our typical start schedule.
Previous wording
Educational services and facilities expense. Educational services and facilities expense increased by $23.8 million, or 25.3%, to $118.0 million for the six months ended June 30, 2026, compared to $94.2 million for the prior year comparable period. This includes a $5.7 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett.
Current wording
Educational services and facilities expense. Educational services and facilities expense increased by $33.7 million, or 22.2%, to $185.1 million for the nine months ended September 30, 2026, compared to $151.5 million for the prior year comparable period. This includes an $8.9 million increase in costs related to our new campuses in Houston, Hicksville, Rowlett and Suitland.
Previous wording
The increase was primarily driven by costs associated with a larger student population as well as higher books and tools expense primarily due to the timing of program starts. The remaining increase was attributable to $3.1 million in higher depreciation expense, including $0.8 million related to new campuses, largely resulting from capital investments to support our growth initiatives.
Current wording
The increase was primarily driven by costs associated with supporting a larger student population, including market-based adjustments to instructional compensation to remain competitive and retain talent and higher depreciation expense, largely resulting from capital investments to support our growth initiatives.
Previous wording
Educational services and facilities expense as a percentage of revenue increased to 41.2% from 40.3% in the prior year comparable period.
Current wording
Educational services and facilities expense as a percentage of revenue increased to 41.5% from 40.4% in the prior year comparable period.
Previous wording
Selling, general and administrative expense. Selling, general and administrative expense increased $24.8 million, or 18.5%, to $158.8 million for the six months ended June 30, 2026, compared to $134.0 million for the prior year comparable period. This includes a $4.0 million increase in costs related to our new campuses in Houston, Hicksville, and Rowlett.
Current wording
Selling, general and administrative expense. Selling, general and administrative expense increased $31.4 million, or 14.8%, to $243.1 million for the nine months ended September 30, 2026, compared to $211.8 million for the prior year comparable period, primarily driven by a larger student population, higher sales and marketing expense. This includes a $5.5 million increase in costs related to our new campuses.
Previous wording
Selling, general and administrative expenses continued to decline as a percentage of revenue to 55.4% for the six months ended June 30, 2026, compared to 57.3% for the same period in 2025.
Current wording
Selling, general and administrative expenses declined as a percentage of revenue at 54.6% for the nine months ended September 30, 2026, compared to 56.4% for the same period in 2025.
Previous wording
Sales and marketing expense increased by $10.1 million, or 26.1%, including $2.4 million related to our new campuses, due to higher student acquisition costs.
Current wording
Sales and marketing expense increased by $13.7 million, or 21.5%, including $2.9 million related to our new campuses, due to higher student acquisition costs.
Previous wording
Provision for credit losses. While the provision increased in absolute terms, it declined as a percentage of revenue from 10.7% to 10.4% year-over-year reflecting continuing efficiencies from our financial aid processes and stronger collections.
Current wording
While the provision for credit losses increased in absolute terms by $4.5 million, it declined as a percentage of revenue from 11.3% to 10.6% year-over-year reflecting continuing efficiencies from our financial aid processes and stronger collections.
Previous wording
Income taxes. Income tax provision was $0.3 million for the three months ended June 30, 2026, representing an effective tax rate of 13.9% of pre-tax income, compared to an income tax provision of $0.5 million and an effective tax rate of 25.1% for the prior year comparable period. The lower effective tax rate in the current period was primarily due to a discrete tax benefit related to restricted stock vesting.
Current wording
Income taxes. Income tax provision was $3.4 million for the nine months ended September 30, 2026, representing an effective tax rate of 23.7% of pre-tax income, compared to $2.9 million income tax provision and an effective tax rate of 28.4% in the prior year comparable period. The decrease in effective tax rate was primarily due to a discrete tax benefit related to restricted stock vesting.
Previous wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $18.2 million for the three months ended June 30, 2026, compared to $16.4 million in the prior year comparable period. The increase was primarily driven by higher salaries and benefits to support a larger student population and the execution of our growth initiatives.
Current wording
This category includes unallocated expenses incurred on behalf of the entire Company. Corporate and other expenses were $56.8 million for the nine months ended September 30, 2026, compared to $51.7 million in the prior year comparable period. The increase was primarily driven by higher salaries and benefits to support a larger student population and the execution of 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 six months ended June 30, 2026, and 2025:
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 nine months ended September 30, 2026, and 2025:
Previous wording
As of June 30, 2026, the Company had $44.2 million in cash and cash equivalents, compared to $16.7 million in cash and cash equivalents as of June 30, 2025. The change in cash position from the prior year comparable period was primarily driven by higher net cash provided by operating activities, along with increased net borrowings under the Company's financing arrangements, partially offset by continued capital expenditures related to campus expansion.
Current wording
As of September 30, 2026, the Company had $20.6 million in cash and cash equivalents, compared to $13.5 million in cash and cash equivalents as of September 30, 2025. The change in cash position from the prior year comparable period was primarily driven by higher net cash provided by operating activities, reflecting higher net income and favorable changes in working capital, along with proceeds from the Mortgage Loan, partially offset by repurchases of our Common Stock and higher net share settlements for equity-based compensation.
Previous wording
Operating cash flow is generated primarily from cash received from our students, offset by changes in working capital demands. Working capital can vary at any point in time based on several factors including seasonality, timing of cash receipts and payments and vendor payment terms.
Current wording
Operating cash flow results primarily from cash received from our students, offset by changes in working capital demands. Working capital can vary at any point in time based on several factors including seasonality, timing of cash receipts and payments and vendor payment terms.
Previous wording
Net cash provided by operating activities for the six months ended June 30, 2026 was $26.7 million, compared to net cash used in operating activities of $8.1 million in the prior year comparable period, primarily driven by favorable changes in working capital, depreciation and amortization, andthe provision for credit losses, as well as higher net income.
Current wording
Net cash provided by operating activities for the nine months ended September 30, 2026 was $61.5 million, compared to $15.8 million in the prior year comparable period, primarily driven by changes in working capital due to timing, higher depreciation and amortization, a higher provision for credit losses and higher net income.
Previous wording
Net cash used in investing activities was $29.1 million for the six months ended June 30, 2026 compared to $45.8 million in the prior year comparable period, primarily related to capital expenditures associated with growth initiatives.
Current wording
Net cash used in investing activities was $66.8 million for the nine months ended September 30, 2026 compared to $67.6 million in the prior year comparable period, primarily related to capital expenditures associated with growth initiatives.
Previous wording
Capital expenditures for the six months ended June 30, 2026 were $29.1 million compared to $46.3 million in the prior year comparable period. The decrease resulted from a shift in the timing of planned capital expenditures which includes the buildout for the new Rowlett, Texas and Hicksville, New York campuses. In addition, we continue to invest to expand programs at existing campuses that demonstrate high market demand and successful student outcomes. We expect to fund future capital expenditures with cash generated from operating activities, cash on hand, and utilization of the credit facility.
Current wording
Capital expenditures for the nine months ended September 30, 2026 were $67.4 million, compared to $68.1 million in the prior year comparable period. Current period capital expenditures primarily related to the buildout of our new campuses in Houston, Texas, Hicksville, New York, Rowlett, Texas, Suitland, Maryland, and Tempe, Arizona, as well as the acquisition of our previously leased Melrose Park, Illinois campus. We also continue to invest in expanding programs at existing campuses that demonstrate high market demand and successful student outcomes. We expect to fund future capital expenditures with cash generated from operating activities, cash on hand and availability under our credit facility.
Previous wording
Net cash provided by financing activities for the six months ended June 30, 2026 was $18.1 million, compared to $11.3 million in the prior year comparable period, primarily due to an increase in net borrowings in the current period, partially offset by higher net share settlements for equity-based compensation.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2026 was $2.6 million, compared to net cash provided by financing activities of $6.0 million in the prior year comparable period, primarily due to repurchases of our Common Stock of $19.3 million and higher net share settlements for equity-based compensation, partially offset by proceeds of $15.0 million from the Mortgage Loan and higher net borrowings under our revolving credit facility.
Previous wording
Melrose Park Property Acquisition
Current wording
Melrose Park Property Acquisition and Mortgage Loan
Previous wording
On July 7, 2026, the Company completed the acquisition of our Melrose Park, Illinois campus building, funded primarily through a mortgage loan, converting the location from a leased to an owned facility. See Note 13, Subsequent Events, to the Condensed Consolidated Financial Statements for further discussion. We do not expect this transaction to have a material impact on our future results of operations.
Current wording
On July 7, 2026, the Company completed the acquisition of its previously leased Melrose Park, Illinois campus property for a purchase price of $18.8 million, converting the location from a leased to an owned facility. The purchase was funded with a $15.0 million mortgage loan from Provident Bank (the “Mortgage Loan”) and cash on hand. The Mortgage Loan bears interest at a fixed rate of 5.95% per annum for the first five years, is payable in monthly installments of principal and interest of approximately $0.1 million, and matures on July 1, 2036. As of September 30, 2026, the outstanding principal balance of the Mortgage Loan was $15.0 million. See Note 7, Long-Term Debt, to the Condensed Consolidated Financial Statements for additional details. We do not expect this transaction to have a material impact on our future results of operations.
Previous wording
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 credit facility from March 7, 2028 to April 11, 2031.
Current wording
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 (the “Amended and Restated Credit Agreement”), which increased total borrowing capacity under the revolving credit facility (the “Amended and Restated Facility”) from $60.0 million to $125.0 million and extended its maturity from March 7, 2028 to April 11, 2031.
Previous wording
As of June 30, 2026, the Company had $26.0 million outstanding under the credit facility. For additional information regarding the terms of the facility, see Note 7, Long-Term Debt.
Current wording
As of September 30, 2026, the Company had $10.0 million outstanding under the credit facility. For additional information regarding the terms of the facility, see Note 7, Long-Term Debt.
Previous wording
Current portion of Long-Term Debt, Long-Term Debt and Lease Commitments. As of June 30, 2026, the Company had $26.0 million in debt outstanding under the revolving credit facility. The Company leases 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 September 30, 2026, the Company had $25.0 million of debt outstanding, consisting of $10.0 million under the revolving credit facility and $15.0 million under the Mortgage Loan, of which $0.3 million is due within the next twelve months. See Note 7 – Long-Term Debt for additional information. The Company leases 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 June 30, 2026, the Company had outstanding loan principal commitments to our active students of $62.1 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 September 30, 2026, the Company had outstanding loan principal commitments to our active students of $68.9 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.
Rearranged current paragraphs (1)
Current report — wording carried from 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.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The increase was primarily driven by a larger student population, higher sales and marketing expense, and an increased provision for credit losses.
Previous report — wording carried elsewhere
Income taxes. Income tax provision was $1.6 million for the six months ended June 30, 2026, representing an effective tax rate of 19.8% of pre-tax income, compared to an income tax provision of$1.4 million and an effective tax rate of 28.6% in the prior year comparable period.