Strategic Education (STRA) investor relations material

Executive summary

• Q3 revenue rose 1.6% YoY to $325.1M in current currency; constant-currency revenue was $320.1M, up 0.1%.

• A $134.1M non-cash ANZ impairment drove a reported operating loss of $87.6M and net loss of $98.3M; adjusted operating income was $51.0M.

• ETS and U.S. healthcare growth partly offset enrollment declines in USHE and ANZ; total enrollment fell 2.5% to 101,826.

Financial highlights

• Q3 adjusted operating income was $51.0M; on a constant-currency basis it was $50.2M, down 2.2% YoY.

• Adjusted diluted EPS was $1.72, up 5.5%; on a constant-currency basis it was $1.69, versus $1.63 a year earlier.

• Adjusted net income was $37.0M; constant-currency adjusted net income was $36.4M, versus $37.7M.

• Nine-month revenue was $968.3M; adjusted net income was $106.9M and adjusted diluted EPS was $4.90.

• Nine-month operating cash flow was $173.5M and free cash flow was $136.7M, up from $127.0M.

Outlook and guidance

• FY26 results are unlikely to fall within the notional outlook, reflecting deterioration in Australia’s international enrollment environment since H1.

• 2027 consolidated revenue is expected to be flat YoY; planned growth investment is ~$50M, with productivity savings offsetting nearly half and operating expense growth limited to 2%.

• Investments target ETS, U.S. healthcare and Australia’s domestic market; a return to notional growth rates is anticipated in 2028 and beyond.

• ETS is expected to grow in 2027; Australia’s new-student growth may turn positive in H2 2027 and total enrollment growth in early 2028.

• USHE is expected to achieve net positive new-student growth in 2027 and trend toward mid-single-digit growth through the year.