Yahoo Finance Strategic Education (STRA) Shares Up on Earnings & Revenue Beat
Strategic Education, Inc. STRA, or SEI, reported stellar results for first-quarter 2024. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.
The quarterly results reflect solid growth across the company’s three reportable segments, attributable to continued enrollment growth in the U.S. Higher Education (“USHE”) segment, especially employer-affiliated enrollments, and total enrollment improvement in the Australia/New Zealand (“ANZ”) segment. Moreover, the Education Technology Services segment portrayed solid performance, mainly driven by the growth in Sophia Learning subscriptions.
Also, lower costs and expenses, mainly lower restructuring costs, and amortization expenses of intangible assets aided the bottom line of the company.
Shares of this education services holding company spiked 16.3% on Apr 25 after its solid earnings performance.
Inside the Headlines
SEI reported adjusted earnings of $1.11 per share, which topped the Zacks Consensus Estimate of 60 cents by 85% and rose impressively from the year-ago quarter’s 24 cents.
Strategic Education Inc. Price, Consensus and EPS Surprise
Strategic Education Inc. price-consensus-eps-surprise-chart | Strategic Education Inc. Quote
Total revenues of $290.3 million surpassed the consensus estimate of $274 million by 5.9% and increased 13.1% from the year-ago quarter’s level. On a constant currency basis, revenues increased 13.9% to $292.3 million in the quarter.
In the first quarter, total enrollment improved 8.8% to 107,928 students.
Segmental Details
USHE: This segment comprises Strayer and Capella Universities. The segment’s revenues increased 11.3% year over year to $219.2 million, backed by solid enrollment.
Student enrollment increased 9.8% from the year-ago quarter’s level to 87,731 students. FlexPath enrollment was 23% of USHE enrollment compared with 21% in the year-ago quarter.
During the quarter, the adjusted operating margin rose 790 basis points (bps) to 12.8% from the year-ago quarter.
Education Technology Services: This segment includes Employer Solutions, Workforce Edge and Sophia Learning. The segment’s quarterly revenues were $23.6 million, up 29.8% year over year, backed by solid growth in Sophia Learning subscriptions and employer-affiliated enrollment.
Sophia Learning’s average total subscribers increased by approximately 42% from the year-ago period’s levels. Employer-affiliated enrollment was 29.2% of USHE enrollment compared with 26.3% in the year-ago period.
Its adjusted operating margin was 42.7% in the reported quarter, up by a whopping 1,090 bps from a year ago.
ANZ: This segment includes Torrens University, Think Education and Media Design School. The segment's revenues were $47.4 million, up 14.1% year over year driven by higher enrollment and revenue-per-student. On a constant-currency basis, revenues rose 19.1% to $49.4 million year over year.
Student enrollment within ANZ rose 4.8% to 20,197 students during the reported quarter compared with the year-ago quarter.
This segment reported an operating loss of $2.3 million in the reported quarter.
Operating Highlights
Adjusted operating income was up 337% to $35.8 million from $8.2 million in the year-ago quarter. The adjusted operating margin of 12.4% expanded a whopping 920 bps from the year-ago quarter.
Adjusted EBITDA in the reported quarter was $54.3 million, up from $27.2 million in the year-ago quarter.
Financial Details
As of Mar 31, 2024, SEI had cash and cash equivalents of $222.1 million, up from $168.5 million in 2023 end. Long-term debt at the end of the first quarter of 2024 was $61.3 million, down from $61.4 million in 2023 end.
Cash provided by operating activities was $77.6 million in the first quarter of 2024, up from $35.2 million in the comparable year-ago period. In the first quarter, capital expenditures were $9.2 million compared with $8.3 million a year ago.
Zacks Rank & Recent Consumer Discretionary Releases
Strategic Education currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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