Strategic Education (STRA) investor relations material

Executive summary

• Q2 2026 revenue grew 4.9% year-over-year to $337.3 million, driven by strong Education Technology Services (ETS) and U.S. Higher Education (USHE) performance, with favorable foreign currency impacts.

• Net income increased to $37.2 million from $32.3 million year-over-year; adjusted diluted EPS rose 16% to $1.76.

• Free cash flow for the first half of 2026 was $92.4 million, and cash, cash equivalents, and marketable securities totaled $133.8 million at quarter-end.

• A $13.9 million reserve was recorded for an Australian Fair Work Ombudsman compliance matter, impacting Australia/New Zealand (ANZ) segment results.

• Quarterly cash dividend of $0.60 per share was declared and paid in Q2 2026.

Financial highlights

• Revenue for Q2 2026 was $337.3 million, up 4.9% year-over-year; adjusted operating income was $52.9 million, up 9.1%.

• Adjusted diluted EPS rose 16% to $1.76; adjusted net income was $38.3 million.

• Operating margin improved by 90 basis points to 16% (constant currency); adjusted EBITDA reached $71.7 million.

• Year-to-date cash flow from operations increased 18% to $117 million; free cash flow for the first half was $92.4 million.

• Diluted weighted average shares outstanding decreased to 21.7 million from 23.5 million year-over-year.

Outlook and guidance

• Revenue growth is expected to revert to a mean of roughly 5% over the next year, with continued investment in technology and branding.

• Confident in achieving 200 basis points of EBIT margin expansion for the year, potentially including the $13.9 million charge.

• Revenue per student is expected to be roughly flat for the full year; employer-affiliated enrollment and healthcare programs are expected to drive growth.