PERDOCEO EDUCATION Corp

Previous wording

our ability to successfully defend litigation and other claims brought against us; and

Current wording

our ability to successfully defend litigation and other claims brought against us;

Previous wording

We encourage you to review "Regulatory Updates" below, and Item 1, “Business,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 to learn more about our highly regulated industry and related risks and uncertainties, in addition to the MD&A in our 2026 Quarterly Reports on Form 10-Q.

Current wording

We encourage you to review Item 1, “Business,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 to learn more about our highly regulated industry and related risks and uncertainties, in addition to the MD&A in our 2026 Quarterly Reports on Form 10-Q.

Previous wording

We believe it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of our core business. As a general matter, we use non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of our core business, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and to provide estimates of future performance.

Current wording

We believe it is useful to present non-GAAP financial measures which exclude certain significant cash and non-cash items as a means to understand the performance of our core business. As a general matter, we use non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of our core business, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and to provide estimates of future performance.

Previous wording

During the quarter ended June 30, 2026 ("current quarter"), our academic institutions remained focused on enhancing student experiences and academic outcomes while aligning their academic programs with the current demands of the workforce. We continued to make purposeful investments in marketing and admissions to efficiently serve prospective student interest in our academic institutions.

Current wording

During the quarter ended September 30, 2026 ("current quarter"), our academic institutions remained focused on enhancing student experiences and academic outcomes and we continued to make purposeful investments in marketing and admissions to efficiently serve prospective student interest in our academic institutions.

Previous wording

Total student enrollments increased 0.6% at CTU as compared to the prior year quarter end, supported by strong levels of student retention and engagement, growth within the corporate student program and consistent levels of prospective student interest. Offsetting some of these enrollment trends at CTU is an increase in the number of students graduating during 2026 as compared to 2025 as well as record prior year comparisons. Total student enrollments increased 6.0% at USAHS for the current quarter end as compared to the prior year quarter end, driven by growth in the nursing and speech language pathology programs and the introduction of new modalities for the occupational therapy program, as well as underlying student retention and engagement trends. Lastly, for AIUS, total student enrollments decreased 1.0% for the current quarter end as compared to the prior year quarter end, driven by a decrease at Trident University.

Current wording

Total student enrollments increased 7.5% within AIUS at the current quarter end as compared to the prior year quarter end, driven by a positive timing impact of the academic calendar as well as underlying organic growth trends, including strong student retention and interest from prospective students. The academic calendar and the number of enrollment days in any given quarter can affect quarterly comparability at AIUS. Total student enrollments increased 3.2% within USAHS at the current quarter end as compared to the prior year quarter end, driven by growth in the nursing and speech language pathology programs and the introduction of new modalities for the occupational therapy program, as well as underlying student retention and engagement trends. Lastly, total student enrollments remained relatively flat at CTU as compared to the prior year quarter end. Total student enrollments at CTU were supported by strong levels of student retention and engagement, growth within the corporate student program and consistent levels of prospective student interest, which was offset with an increase in the number of students graduating during 2026 as compared to 2025 as well as record prior year comparisons.

Previous wording

Through our corporate student programs, we provide accredited degree opportunities to employees of our partner organizations, supporting their career advancement while helping corporate partners strengthen employee development and retention. We continue to make strategic investments in technology and talent to expand these programs and enhance academic outcomes across our institutions.

Current wording

We have continued to make investments in technology to improve student experiences across our academic institutions and enhance operating effectiveness within our functional areas. We are also selectively leveraging generative artificial intelligence to identify and engage with prospective students who, we believe, are more likely to succeed at one of our academic institutions. Additionally, through our corporate student programs, we provide accredited degree opportunities to employees of our partner organizations, supporting their career advancement while helping corporate partners strengthen employee development and retention. We continue to make strategic investments in technology and talent to expand these programs and enhance academic outcomes across our institutions.

Previous wording

Operating income for the current quarter increased by 6.8% to $54.9 million as compared to operating income of $51.4 million in the prior year quarter, driven by increased operating income within USAHS and AIUS. The increase in operating income for the current quarter was a result of revenue growth and continued disciplined management of operating expenses.

Current wording

Operating income for the current quarter increased by 8.1% to $55.1 million as compared to operating income of $51.0 million in the prior year quarter, driven by increased operating income within USAHS and AIUS. The increase in operating income for the current quarter was a result of revenue growth and continued disciplined management of operating expenses, partially offset with increased legal fees associated with M&A activities and previously disclosed legal matters.

Previous wording

The Company believes it is useful to present non-GAAP financial measures, such as adjusted operating income and adjusted earnings per diluted share, which exclude certain non-cash items, as a means to better understand the core performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $64.2 million for the current quarter as compared to $61.5 million for the prior year quarter.

Current wording

The Company believes it is useful to present non-GAAP financial measures, such as adjusted operating income and adjusted earnings per diluted share, which exclude certain cash and non-cash items, as a means to better understand the core performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $66.1 million for the current quarter as compared to $61.0 million for the prior year quarter.

Previous wording

The educational services and facilities expense for the current year to date decreased by 0.8% or $0.8 million as compared to the prior year period. This decrease was primarily driven by lower academics and student related costs at AIUS, as a result of lower total student enrollments as compared to the prior year period.

Current wording

The educational services and facilities expense for the current quarter and year to date decreased by 2.4% or $1.2 million and 1.4% or $2.0 million, respectively, as compared to the prior year periods. The improvement was primarily driven by lower academics and student related expenses at both AIUS and USAHS, as compared to the prior year periods.

Previous wording

The general and administrative expense for the current quarter and year to date increased by 0.5% or $0.4 million and 0.9% or $1.7 million, respectively, as compared to the prior year periods, primarily driven by increased advertising and marketing expense for both comparative periods as well as increased administrative expense for the current year to date as compared to the prior year period. Partially offsetting these increases were decreases in bad debt expense as compared to the prior year periods.

Current wording

The general and administrative expense for the current quarter and year to date increased by 1.6% or $1.7 million and 1.1% or $3.4 million, respectively, as compared to the prior year periods, primarily driven by higher administrative and advertising and marketing expenses for both comparative periods. These increases were partially offset by lower bad debt expense for both comparative periods.

Previous wording

Bad debt expense for the current quarter and year to date decreased by 11.5% or $0.6 million and 18.7% or $2.4 million, respectively, as compared to the prior year periods. The decrease for the current quarter was primarily due to lower bad debt expense at AIUS and USAHS, which more than offset higher bad debt expense at CTU. The year to date decrease was primarily driven by lower bad debt expense across all three academic institutions as compared to the prior year period.

Current wording

Bad debt expense for the current quarter and year to date decreased by 38.5% or $3.0 million and 26.2% or $5.5 million, respectively, as compared to the prior year periods. The decrease for the current quarter was driven by lower bad debt expense at CTU and AIUS. The year to date decrease was a result of lower bad debt expense across all three academic institutions as compared to the prior year period.

Previous wording

Depreciation and amortization expense for the current quarter and year to date decreased by $0.8 million and $3.3 million, respectively, as compared to the prior year periods, primarily driven by decreases across all three academic institutions, with the year to date decrease primarily driven by leased assets within USAHS.

Current wording

Depreciation and amortization expense for the current quarter and year to date decreased by $0.6 million and $3.9 million, respectively, as compared to the prior year periods, primarily driven by decreases across all three academic institutions, with the year to date decrease primarily driven by leased assets within USAHS.

Previous wording

Operating income for the current quarter and year to date increased by 6.8% or $3.5 million and 14.4% or $14.9 million, respectively, as compared to the prior year periods. This improvement was primarily driven by increased revenue, as well as disciplined management of operating expenses, particularly in the current year to date, as compared to the prior year periods.

Current wording

Operating income for the current quarter and year to date increased by 8.1% or $4.1 million and 12.3% or $19.0 million, respectively, as compared to the prior year periods. This improvement was primarily driven by increased revenue as well as disciplined management of operating expenses, partially offset with increased legal fees.

Previous wording

For the quarter and year to date ended June 30, 2026, we recorded a provision for income taxes of $12.2 million reflecting an effective tax rate of 20.3% and $26.4 million reflecting an effective tax rate of 20.6%, respectively, as compared to a provision for income taxes of $15.2 million reflecting an effective tax rate of 27.0% and $28.0 million reflecting an effective tax rate of 24.9% for the respective prior year periods. The effective tax rate for the current quarter and year to date was benefited by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which, when combined, reduced the effective tax rate by 7.3% and 7.0%, respectively. The effective tax rate for the prior year quarter and year to date was benefited by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which, when combined, reduced the effective tax rate by 2.0% and 4.4%, respectively. For the full year 2026, we expect our effective tax rate to be between 23.0% and 24.0%.

Current wording

For the quarter and year to date ended September 30, 2026, we recorded a provision for income taxes of $16.4 million reflecting an effective tax rate of 27.0% and $42.9 million reflecting an effective tax rate of 22.7%, respectively, as compared to a provision for income taxes of $16.2 million reflecting an effective tax rate of 28.9% and $44.2 million reflecting an effective tax rate of 26.2% for the respective prior year periods. The effective tax rate for the current year to date was benefited by the resolution of a state income matter which decreased the year to date effective tax rate by 1.8%. For the full year 2026, we expect our effective tax rate to be between 23.0% and 23.5%.

Previous wording

CTU. Current quarter and year to date revenue increased by 0.9% or $1.1 million and 2.5% or $5.7 million, respectively, as compared to the prior year periods. The improvement in revenue was primarily driven by increase in total student enrollment of 0.6% at June 30, 2026 as compared to the prior year quarter end. CTU's total student enrollment growth was supported by high levels of student retention and engagement, growth in the corporate student program and higher levels of prospective student interest. Offsetting some of these enrollment trends at CTU is an increase in the number of students graduating during 2026 as compared to 2025 as well as record prior year comparisons.

Current wording

CTU. Current quarter and year to date revenue increased by 0.3% or $0.3 million and 1.7% or $6.1 million, respectively, as compared to the prior year periods. Total student enrollment at September 30, 2026 remained relatively flat as compared to the prior year quarter end. Total student enrollment was supported by higher levels of student retention and engagement, growth in the corporate student programs and higher level of prospective student interest. Offsetting some of these enrollment trends is an increase in the number of students graduating during 2026 as compared to 2025 as well as record prior year comparisons.

Previous wording

Current quarter operating income for CTU decreased by 5.1% or $2.4 million as compared to the prior year period. The decrease was primarily driven by increased legal fees related to previously disclosed legal matters, partially offset by the increase in revenue as discussed above, as compared to the prior year period. Current year to date operating income increased by 1.5% or $1.4 million as compared to the prior year period. The increase was primarily driven by higher revenue as discussed above and lower bad debt expense, which more than offset increased legal fees during the current year to date.

Current wording

Current quarter and year to date operating income decreased by 6.1% or $2.9 million and 1.0% or $1.5 million, respectively, as compared to the prior year periods. The decrease was primarily driven by increased legal fees related to previously disclosed legal matters, partially offset by the increases in revenue as discussed above, as compared to the prior year periods.

Previous wording

Current quarter and year to date operating income for AIUS increased by 9.7% or $1.1 million and 10.8% or $2.5 million, respectively, as compared to the prior year period, driven by lower operating expenses across most expense categories as compared to the prior year periods, which more than offset the decrease in revenue.

Current wording

Current quarter and year to date operating income for AIUS increased by 24.9% or $2.3 million and 14.9% or $4.8 million, respectively, as compared to the prior year period, driven by lower operating expenses across most expense categories as compared to the prior year periods, which more than offset the decrease in revenue.

Previous wording

USAHS. Current quarter and year to date revenue increased by 10.2% or $3.8 million and 10.0% or $7.6 million, respectively, as compared to the prior year periods, primarily driven by total student enrollment growth of 6.0% at June 30, 2026, as compared to the prior year quarter end.

Current wording

USAHS. Current quarter and year to date revenue increased by 9.8% or $3.7 million and 9.9% or $11.3 million, respectively, as compared to the prior year periods, supported by total student enrollment growth of 3.2% at September 30, 2026, as compared to the prior year quarter end.

Previous wording

Current quarter and year to date operating income increased by $5.3 million and $12.0 million, respectively, as compared to the prior year periods, primarily driven by the increase in revenue as discussed above.

Current wording

Current quarter and year to date operating income increased by $4.6 million and $16.5 million, respectively, as compared to the prior year periods, primarily driven by the increase in revenue as discussed above, as well as continued leverage of operating efficiencies.

Previous wording

Corporate and Other. This category includes unallocated costs that are incurred on behalf of the entire company. Total Corporate and Other operating loss for the current quarter and year to date increased by 11.4% or $0.6 million and 8.7% or $1.0 million, respectively, as compared to the prior year periods, primarily driven by increased administrative costs for both comparative periods.

Current wording

Corporate and Other. This category includes unallocated costs that are incurred on behalf of the entire company. Total Corporate and Other operating loss for the current quarter remained relatively flat as compared to the prior year quarter. The year to date operating loss increased by 4.6% or $0.8 million as compared to the prior year period, primarily driven by increased legal fees associated with M&A activity.

Previous wording

As of June 30, 2026, cash, cash equivalents, restricted cash and available-for-sale short-term investments(“cash balances”) totaled $734.8 million. Restricted cash as of June 30, 2026 was $0.8 million and primarily related to escrow balances for Hippo Education and required letters of credit for USAHS. Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We expect to continue to generate cash during the remainder of 2026. We anticipate that we will be able to satisfy the cash requirements associated with, among other things, our working capital needs, capital expenditures, lease commitments, share repurchases and quarterly dividend payments through at least the next 12 months primarily with cash generated by operations and existing cash balances.

Current wording

As of September 30, 2026, cash, cash equivalents, restricted cash and available-for-sale short-term investments(“cash balances”) totaled $776.9 million. Restricted cash as of September 30, 2026 was $0.3 million and related to required letters of credit for USAHS. Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We expect to continue to generate cash during the remainder of 2026. We anticipate that we will be able to satisfy the cash requirements associated with, among other things, our working capital needs, capital expenditures, lease commitments, share repurchases, quarterly dividend payments and acquisitions through at least the next 12 months primarily with cash generated by operations and existing cash balances.

Previous wording

On August 6, 2026 the Board of Directors declared a quarterly dividend of $0.17 per share, an increase of 13.3% as compared to the prior quarter, which will be paid on September 10, 2026 for holders of record of common stock as of September 1, 2026. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company's available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral and growing part of its balanced capital allocation strategy that also prioritizes investments in student support and technology projects, while also evaluating acquisitions and share repurchases.

Current wording

On November 5, 2026 the Board of Directors declared a quarterly dividend of $0.17 per share, which will be paid on December 11, 2026 to holders of record of common stock as of November 27, 2026. Any decision to pay future cash dividends, however, will be made by the Board of Directors and depend on the Company's available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments and share repurchases to be an integral and growing part of its balanced capital allocation strategy that also prioritizes investments in student support and technology projects, while also evaluating acquisition opportunities.

Previous wording

The discussion above reflects management’s expectations regarding liquidity; however, as a result of the significance of the Title IV Program funds received by our students, we are highly dependent on these funds to operate our business. Any reduction in the level of Title IV funds that our students are eligible to receive or any impact on timing or our ability to receive Title IV Program funds, or any requirement to post a significant letter of credit to the Department, may have a significant impact on our operations and our financial condition. In addition, our financial performance is dependent on the level of student enrollments which could be impacted by external factors. See Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The discussion above reflects management’s expectations regarding liquidity; however, as a result of the significance of the Title IV Program funds received by our students, we are highly dependent on these funds to operate our business. Any reduction in the level of Title IV funds that our students are eligible to receive or any impact on timing or our ability to receive Title IV Program funds, or any requirement to post a significant letter of credit to the Department, may have a significant impact on our liquidity, operations and our financial condition. In addition, our financial performance is dependent on the level of student enrollments which could be impacted by external factors. See Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

During the years to date ended June 30, 2026 and 2025, net cash flows provided by operating activities totaled $144.0 million and $143.9 million, respectively.

Current wording

During the years to date ended September 30, 2026 and 2025, net cash flows provided by operating activities totaled $223.8 million and $185.1 million, respectively. The increase in net cash flows from operating activities for the year to date was driven by increased operating income as well as a positive timing impact from Title-IV cash collections.

Previous wording

During the years to date ended June 30, 2026 and 2025, net cash flows used in investing activities totaled $65.8 million and $7.3 million, respectively.

Current wording

During the years to date ended September 30, 2026 and 2025, net cash flows used in investing activities totaled $88.2 million and $29.8 million, respectively.

Previous wording

Purchases and Sales of Available-for-Sale Investments. Purchases and sales of available-for-sale investments resulted in a net cash outflow of $62.5 million and $3.6 million for the years to date ended June 30, 2026 and 2025, respectively.

Current wording

Purchases and Sales of Available-for-Sale Investments. Purchases and sales of available-for-sale investments resulted in a net cash outflow of $82.8 million and $24.3 million for the years to date ended September 30, 2026 and 2025, respectively.

Previous wording

Capital Expenditures. Capital expenditures decreased to $3.3 million for the year to date ended June 30, 2026 as compared to $4.5 million for the year to date ended June 30, 2025. For the full year 2026, we expect capital expenditures to be approximately 1.0% of revenue.

Current wording

Capital Expenditures. Capital expenditures decreased to $5.4 million for the year to date ended September 30, 2026 as compared to $6.3 million for the year to date ended September 30, 2025. For the full year 2026, we expect capital expenditures to be approximately 1.0% of revenue.

Previous wording

During the years to date ended June 30, 2026 and 2025, net cash flows used in financing activities totaled $46.8 million and $74.7 million, respectively. Payments to repurchase shares of our common stock were $15.0 million and $46.1 million for the years to date ended June 30, 2026 and 2025, respectively.

Current wording

During the years to date ended September 30, 2026 and 2025, net cash flows used in financing activities totaled $79.0 million and $106.3 million, respectively. Payments to repurchase shares of our common stock were $34.8 million and $66.7 million for the years to date ended September 30, 2026 and 2025, respectively.

Previous wording

Payments of cash dividends and dividend equivalents. During the years to date ended June 30, 2026 and 2025, the Company made dividend and dividend equivalent payments of $19.7 million and $17.7 million, respectively.

Current wording

Payments of cash dividends and dividend equivalents. During the years to date ended September 30, 2026 and 2025, the Company made dividend and dividend equivalent payments of $30.3 million and $27.4 million, respectively.

Previous wording

Principal payments for finance leases and failed sale-leaseback. During the year to date ended June 30, 2026, the Company made principal payments of $2.7 million for finance leases, and during the year to date June 30, 2025, principal payments of $2.9 million were made for finance leases and failed sale-leaseback transactions, both related to USAHS.

Current wording

Principal payments for finance leases and failed sale-leaseback. During the year to date ended September 30, 2026, the Company made principal payments of $4.0 million for finance leases, and during the year to date September 30, 2025, principal payments of $4.2 million were made for finance leases and failed sale-leaseback transactions, both related to USAHS.

Previous wording

Restricted cash: The decrease is driven by the release of a letter of credit related to USAHS with the Department.

Current wording

Restricted cash: The decrease is driven by the release of a letter of credit related to USAHS with the Department and the release of escrow balances for a previous acquisition.