On November 7, 2024, Strategic Education Inc (STRA, Financial) released its 8-K filing detailing the financial results for the third quarter ended September 30, 2024. The company, known for its education services through subsidiaries like Strayer University, Capella University, and Torrens University, reported significant growth across its segments.
Overall Financial Performance
Strategic Education Inc (STRA, Financial) reported a 7.0% increase in revenue, reaching $306.0 million compared to $285.9 million in the same period last year. On a constant currency basis, revenue rose by 6.5% to $304.4 million. The company's income from operations improved to $36.3 million, representing 11.9% of revenue, up from $25.6 million or 9.0% of revenue in the previous year. Net income also saw a substantial increase to $27.7 million from $18.5 million, with adjusted net income at $27.9 million compared to $23.3 million in 2023.
Segment Highlights
The U.S. Higher Education segment, comprising Capella University and Strayer University, saw a 4.8% increase in student enrollment, contributing to a 2.9% rise in revenue to $207.7 million. The Education Technology Services segment experienced a robust 26.2% revenue growth, driven by a 33% increase in Sophia Learning subscriptions and higher employer-affiliated enrollments. The Australia/New Zealand segment reported a 13.7% revenue increase to $71.9 million, supported by a 5.1% rise in student enrollment.
Balance Sheet and Cash Flow
As of September 30, 2024, Strategic Education had cash, cash equivalents, and marketable securities totaling $222.1 million. The company successfully repaid the remaining $61.3 million of its outstanding debt. Cash provided by operations for the first nine months of 2024 was $153.4 million, a significant increase from $87.2 million in the same period of 2023. Capital expenditures were slightly higher at $29.3 million compared to $27.3 million in the previous year.
Key Metrics and Analysis
Adjusted EBITDA for the quarter was $56.2 million, up from $49.5 million in 2023. Diluted earnings per share increased to $1.15 from $0.77, with adjusted diluted earnings per share rising to $1.16 from $0.97. These metrics highlight the company's operational efficiency and ability to generate shareholder value.
“Our third quarter results reflect continued growth across our business, including strong employer affiliated enrollment in the U.S. Higher Education segment; strong growth from Sophia subscriptions in the Education Technology Services segment; and another quarter of total enrollment growth in the Australia/New Zealand segment,” said Karl McDonnell, Chief Executive Officer of Strategic Education.
Conclusion
Strategic Education Inc (STRA, Financial) demonstrated strong financial performance in the third quarter of 2024, driven by increased enrollment and revenue growth across its segments. The company's focus on promoting economic mobility for working adults and its strategic investments in education technology and international markets have positioned it well for continued success. The repayment of debt and improved cash flow further strengthen its financial position, making it an attractive prospect for value investors.
Explore the complete 8-K earnings release (here) from Strategic Education Inc for further details.
