STRA - Earnings call 3 2023 | Strategic Education, Inc.

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Operator

Good day, and thank you for standing by. Welcome to Strategic Education's Third Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. to Investor call Relations like Wilke, to now of Director for would turn over the Terese I Strategic Education. Ms. ahead. go please Wilke,

Terese Wilke

Thank Chief discuss and welcome in and Robert Vice Silberman, With you. President Education's McDonnell, are and Hello, call President Daniel Karl conference Executive and us to today Officer. which Officer; quarter Chief third Strategic will Financial Chairman; XXXX Executive results. we everyone, Jackson,

forward-looking that we the be Private cause based remarks, on call Strategic on open the and made I'd at please most XX-Qs Exchange may materially. this of X-Ks, filings and Further Education's with as on found results safe call the Securities about Strategic assumptions, Education of will filings the that to these include uncertainties current filed Act Securities of number information future other be as Strategic full the well XX-K, relevant note to today's Following strategiceducation.com. and XXXX. are Commission for release expectations to harbor Form ahead. other Copies go may are and could in the report The Education's and viewing for And the statements has identified these press Reform now call turn like available to Karl, press to of the over and actual to pursuant a XX-Ks. and annual recent website today's risks XX-Q Karl. statements questions. Please subject provisions differ uncertainties in Litigation are that release

Karl McDonnell

as performance the that we SEI's everyone. strong has morning, substantially the quarter released continued year. course good past of results reflect over and financial Terese, you, Thank improved this morning our momentum third

results the Let outset, my financial with say in me at respect referred to constant to our all are currency. remarks just of

by continued revenue increased revenue the our & Education, driven strong strong Technology year of and another our For SEI's U.S. Higher Australian/New Services another growth. sequential revenue The quarter, per and the segment. within quarter growth segment of Education, prior in was Zealand from third quarter XX% in student was revenue strong growth enrollment improved

Our the outstanding more from line to lastly, revolver, our doubled debt from $XX and our X% in repay $XX of of increased with million operating $XX debt did prior expectations, on revolver. our income on than million. with cash million operating on use expenses $XX the item, the we leaving us just million of And year,

segments. Education know U.S. to driven the affiliated double exceptionally more new education enrollments, is twice to Strayer our one last to in of and from our Total key both turning our overall employer nearly basis believe, enrollment I which enrollment Higher the Capella and what points employer our grew years XX%, XX% affiliated X which now all up it year growth of remains than owners rate. is very continues which, universities Employer and strong, was strategies. affiliated in by U.S. is ago. was increases student U.S. perform higher Now XXX Overall continue predominantly enrollments, growth, demand well. healthy have

our trailing at retention remained X-year with Finally, rate student stable XX.X%. persistent

XX%, Learning noted. Our ETS ETS products enrollment, build investments well. to by to income very notwithstanding XX% and continues out $XX segment Education, Services continuing affiliated increased in growth I just million, to Technology ETS ongoing as & revenue also Sophia driven and services. perform operating subscriptions increased employer

X,XXX we Workforce Edge on far share or this the and increased students more gain University. Strayer Sophia clients. we education platform. Edge benefits paid XX,XXX from in market thus XX either Workforce Capella to average have now continues corporate management space the subscribers than now year, have XX%, with at subscribers And

its strong increased to $XX total quarter, New driven XX% ANZ and segment X% Australia increased $XX by income operating basis decrease increases million to had a the to student. revenue in enrollment. in operating Zealand a per XX.X%. Revenue X% and also Our margin notwithstanding points million, XXX slight increased

that, returning Overall, all optimistic of enrollment we to be commitment growth University to pleased Torrens I'd I'd And be students, with XXXX. thank colleagues hosting very in New be for to details about happy that were Michelle, to Day owners take questions. found like And these X always, and be on Webcast our as my Investor to November their continue in ongoing We to our like results. will can City. remind we our York an website. on with we'd

Operator

to is our Jeff Capital Instructions] of Silber [Operator going question with And BMO come line the from first Markets.

Jeffrey Silber

with I enrollment and know than Higher can segment. affiliated I any to types drill grad? employer down little we wanted a you've between call the undergrad program University mentioned had out? was U.S. the better expected. more Strayer But Education bit growth And The start and enrollment. to much Capella specific we

Karl McDonnell

-- really the employer growing driver rates of set well are to Capella and I at year, just At which a strong. even in health the broad-based predominantly have the pretty growth all increased continues accounts areas But all the remain is I'd of study. care that say of to enrollment, say, been exceptionally FlexPath given that's very been the is that's at All enrollment. Capella, we're strong. growth undergraduate, across have Strayer, our affiliated Jeff, that seeing employer programs primary

Jeffrey Silber

be bit to July helpful. get the I students impact a into campus foreign think That's is? what it but little new Can we you on rule do can over X. of that? correctly, come on bit regarding the going little early, was to that color may know back I remember a If segment. I coming effect Maybe be Okay. there a switch ANZ

Karl McDonnell

Prior per our have in it's also definitely student the the they this per anymore. X, a that is retain their could tuition It's not at able of a still of And driven our full did take byproducts driven And revenue rule student. to with one the course July revenue to of increase having X helped Australia take load take. obviously. students and by lower that's to that that courses slight They're tuition. things, by year. we do students beginning of course Well, Visa. And driven load. by amount a But

led increase the what per in over to revenue our that's student there. So

Jeffrey Silber

Okay. helpful. really That's

know you Any an thunder, me. final Just Analyst want will Investor for one be be we your to you're Day. color what and great. I steal Are but having one long-term I providing be don't expecting? to would targets? going

Karl McDonnell

Yes.

X-year on our performance our We first expect pass And which will with little to year do a both more we year for this provide a full intend outlook, include to XXXX. at specificity. comment

Operator

question from Bibb Jasper with Securities. come line the next Our Instructions] to going of Truist [Operator is

Jasper Bibb

to for ask wanted updated Just about 'XX. expectations

the I cadence outlined you OpEx last any XQ think how thoughts think to just expectations call, some relative growth second that should and view revenue we of prior would but great. half on be about

Daniel Jackson

Jasper, it's Dan.

going on Day. said, Tuesday Investor at to just actually get our Karl we're into that As

So probably at believe to the better beginning year. than with to of still then, we other wait laid say, until out we track the we're what on

Jasper Bibb

makes sense. Definitely

Following discussion. up Higher Ed U.S. the on

perspective to of kind years student trends you're any as Just last marketing relative what a curious from and seeing the there? yield far interest of couple as levels

Karl McDonnell

We've in seen both. improvements

in universities improvements in a robust also effectively healthy would Interest But I say is ability We advertise. a been I'd say. very macro than our to long the continue seen it's see relatively into time, environment. that high, higher to demand we've

really is things. growth our so product a of many And

teams. We have high-performing

ever reasons the of a they've enrollments Capella interest strongest, part to study that have University. broken the frankly, a lot of I'd that's potentially high such one students either And why the corporate-affiliated record, at not predominant We of but say Strayer are been. levels really growth. seeing to on of wanting again, or be we're our And

Jasper Bibb

Makes employment to in that enrollment the I get Ed, what did you over outcome your assessment just the earnings the and hoping your of for we Higher was sense. a certain With Higher final levels U.S. couple in could do Ed next for mean respect gainful years? think U.S. there, longer September. business to programs period rule get of

Karl McDonnell

obviously University. on to programs either have carefully impact have it's We rule. any not or sure going reviewed to anticipate the enrollment. Yes. Capella any I'm don't failing at Strayer We've

we're that quite rule. So comfortable with

Jasper Bibb

one to a quarter. talked in segment Last there. Great. XX% strong you've the at objective XX% know about really me. to ETS margins for get longer-term were I

ahead, as Or sustainable? do been expect about the out running looking couple think margins to level should ETS back normalize this that last we range quarters? you've to of margin you So XX%-ish low

Karl McDonnell

over couple last of that lot been Well, ETS. a making the years, we've in of we've said investments

that been the now. we margin we made made investments. So depressed fair generate starting years of revenue investments a The preceding to in are actually has amount those deliberately while

to still relatively believed hover grow So high ETS this would we've can expect a would say XX%. we always margins. rates business And that over time, is margins at with very I around high that I

Operator

BofA. And Heather from our the going question is line with come of next to Balsky

Heather Balsky

to hoping from coming fourth down, if the you are demand the now I -- of could obviously quarter? Australia/New the year-over-year do with you're talk and part Zealand versus to fourth you is, you I are enrollment pick started you period guess, quarter guess, where the we're about pre-COVID? up enrollment, guess, to, back early enrollment is in be think seeing And where regards The coming a just What up. was I going in declines trend. I

Karl McDonnell

Yes.

is our third What our more X decline quarter, It's of small new term slight strong a number. still digits. be the in So big was fourth for 'XX, market requiring quarter, domestic double had post-July on from actually up campus double focused relatively international, for But which which than first so us. academic student pretty any growth in the relatively have and new we there. largest first Torrens doesn't given forth. students on term is term. to It of it's a the We did a all, not the in really we're alarm digits, rule, It's in year.

we'll see new very and XXXX. domestic that growth both So I in remain Torrens confident at student

Heather Balsky

the me year? think growth last here, do next you the Great. had And case? seeing higher at in you spoke enrollment That's higher education, pace think you're for mid-single-digit please given Is I helpful. you a XXXX. still And that be about momentum could correct

Daniel Jackson

Yes, reference for enrollment was a just asking about? Heather, SEI, ANZ. total not what to that you're mid-single Is digit

Heather Balsky

business. Total yes. Yes,

Daniel Jackson

and Yes. what bit quarter, on earlier in to we'll And yes, the out the just for we on Tuesday third we end think have the say I a Investor said, laid at as of more of Day. track we're we ahead as year, -- our little

Operator

back for closing Thank to hand And McDonnell like I Karl the you. would conference remarks. to

Karl McDonnell

Day New then. Thank not, speaking our see we'll you with in Investor look you next everybody. many if And Hopefully, you our to week. to webcast, on forward you, invite of in participate York we and we

Operator

you call. Thank This participating. concludes today's for conference

You may now disconnect.

Strategic Education (STRA) 2 Nov 232023 Q3 Earnings call transcript