Strategic Education, Inc.

What they do

SEI delivers campus-based and online post-secondary education to working adults primarily through its wholly-owned subsidiaries Capella University and Strayer University in the U.S., and Torrens University in Australia. It also operates an Education Technology Services segment that builds employer education benefits programs, including Workforce Edge and Sophia Learning. As of December 31, 2025, the company reported three segments: U.S. Higher Education, Australia/New Zealand, and Education Technology Services. The USHE segment enrolled 85,306 students across Capella and Strayer in the 2025 fall term.

Revenue drivers

• U.S. Higher Education (USHE) — Provides certificate and degree programs through Capella and Strayer, including the Jack Welch Management Institute MBA; enrolled 85,306 students in the 2025 fall term, with 52% bachelor's and 34% master's students.
• Education Technology Services (ETS) — Includes Sophia Learning, which offers low-cost online general education courses, and Workforce Edge, a benefits administration solution; ETS revenue was $42.4 million in Q2 2026, up 15.4% year over year.
• Australia/New Zealand — Operates Torrens University, an accredited post-secondary institution in Australia; results in the quarter included a $13.9 million reserve for an Australian Fair Work Ombudsman compliance matter.

Recent performance

For the second quarter of 2026, revenue increased 4.9% to $337.3 million compared to $321.5 million a year earlier, driven by ETS strength, higher USHE revenue per student, and favorable foreign currency. Income from operations was $50.5 million, or 15.0% of revenue, versus $45.8 million and 14.2% in the prior-year period. Net income was $37.2 million compared to $32.3 million, and diluted EPS was $1.71 versus $1.37. USHE enrollment decreased 0.5% to 85,894, while employer-affiliated enrollment reached a record 34.7% of USHE enrollment. ETS operating income was $19.6 million with a 46.2% margin, up from 41.0%.

Strategy

Management continues to focus on employer relationships, with employer-affiliated USHE enrollment at a new all-time high of 34.7% in Q2 2026, and USHE's healthcare portfolio now 52% of total enrollment. Capella launched a Bachelor of Science in Nursing (Prelicensure) program for July 2026 enrollment. Sophia Learning subscribers grew approximately 32% year over year, and Workforce Edge had 81 corporate agreements employing approximately 4,020,000 employees as of June 30, 2026. The company repurchased 913,729 shares for $72.7 million in the first half of 2026.

Risks

• Regulatory and Title IV compliance — The company must maintain continued compliance with Title IV of the Higher Education Act and related regulations, institutional accreditation standards, and state regulatory requirements.
• Enrollment volatility — USHE enrollment decreased 0.5% year over year in Q2 2026, with growth in employer-affiliated enrollment offset by declines in unaffiliated enrollment.
• Foreign regulatory matter — A $13.9 million reserve was recorded in Q2 2026 related to an Australian Fair Work Ombudsman compliance matter initially disclosed in the April 23, 2026 10-Q.
• Government rulemaking — Risks include actions by the U.S. Department of Education and other governmental entities related to borrower defense, gainful employment, 90/10 rules, and increased focus on for-profit education institutions.

Outlook

No specific forward guidance figures were provided in the excerpted materials. The company highlights continued focus on employer-affiliated enrollment growth, healthcare program expansion, and ETS segment momentum. Management noted the Australian Fair Work Ombudsman reserve and ongoing regulatory compliance as items to monitor. Diluted weighted average shares decreased to 21,736,000 from 23,516,000 due to share repurchases.