Strategic Education Reports Impressive Revenue Growth and Enrollment Surges

2024-04-26

Strategic Education recently hosted its First Quarter 2024 Results Conference Call, featuring key speakers including Robert Silberman, Karl McDonnell, Daniel Jackson, and Terese Wilke, who delved into various aspects of the company's performance and outlook. The call commenced with Terese Wilke issuing a disclaimer concerning forward-looking statements and the associated risks.

During the first quarter of 2024, Strategic Education disclosed a noteworthy 14% revenue growth, reaching a total of $292 million. The company also witnessed a substantial surge in operating income, skyrocketing by more than 4 times to $36 million. Additionally, the operating margin experienced a significant increase of 910 basis points, while earnings per share soared by over 350%.

The U.S. Higher Education segment saw an 11% revenue growth and an impressive 192% rise in operating income compared to the previous year. The Education, Technology & Services (ETS) segment also performed admirably, boasting a 30% revenue growth and a 74% increase in operating income.

One of the key entities within the company, Sophia Learning, achieved a remarkable 45% revenue growth in the first quarter, attaining a 51% operating margin. Workforce Edge, which collaborates with 68 corporate partners, observed a substantial 62% surge in enrollments into Strayer or Capella University.

Enrollments at Strayer and Capella University within the U.S. Higher Ed sector grew by 10%, with retention rates remaining stable or showing improvement throughout 2023. The uptick in enrollment momentum is credited to robust corporate partnerships and ongoing strategic initiatives. The favorable macroeconomic conditions in the United States, characterized by strong employment confidence, are propelling student enrollments.

However, challenges were identified in international enrollments in Australia, with a decline noted in new Visa applications from international students, albeit offset by an increase in students transferring from existing visas. The company foresees a steady revenue per student in the latter part of the year, with enhancements expected to bolster stability.

In conclusion, Strategic Education's performance in the first quarter exemplified robust growth and promising prospects for the future, underpinned by strategic initiatives, strong partnerships, and an unwavering focus on student success.