STRA - Earnings call transcript Q2 2024 | Strategic Education, Inc.

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Operator

Welcome to Strategic Education's Second Quarter 2024 Results Conference Call. [Operator Instructions].

As reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program Terese Wilk, Director of Investor Relations for Strategic Education. Ms. ahead. go please Wilke,

Terese Wilke

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

Litigation The to that may include based Securities a forward-looking Following today's differ identified the Act open the call will Reform harbor to call could for of are Strategic and on statements that are made current results this pursuant has subject number the XXXX. risks remarks, materially. expectations to we questions. in Education safe uncertainties release actual provisions Please and today's press note of of statements assumptions, cause that Private

Education's about Exchange as these Form report annual found and other the the please and relevant release viewing most uncertainties to filings to filed the Karl, the over for of are other Strategic ahead. now on Education's Strategic available future full on these and filings be Commission may with call XX-Ks. XX-Qs in at like well to press strategiceducation.com. And and Further Karl. I'd turn as be recent XX-K, XX-Q the X-Ks, go website information Copies Securities and

Karl McDonnell

and everyone. you, morning, good Thank Terese,

foreign pointing results to for constant by we to our But second are as Our start they all to and exchange across that is I'd purposes. quarter our that assume XXXX my results begin, references and before like results the strength our segments. all reflect adjusted currency of financial continued normally of case, out

$XXX SEI's revenue For the million. quarter, X% grew to second

grew grew operating was XX% expectations, and expenses million. our income with in operating line more which $XX to than our X%, by Our

increased operating points. basis Our margin XXX

prior generated $X.XX which increase a than XX% we was from During share, per more year. earnings the quarter, the

Employer Total year. affiliated again to Higher strong our enrollment Education double U.S. prior once another employer than our partnerships. quarter again, quarter driven more Higher XX% grew at in the Enrollment Education rate continued now strength reflecting by for in with growth, growing enrollment. second of affiliated total Turning corporate the that from U.S. segments. delivered X%

higher the partnerships year. our grew from percentage increased education to of second XXX points During coming higher stable In from total X% retention XX%. operating at U.S. quarter, income the at higher education the basis enrollment and and the quarter, U.S. corporate education remained prior revenue grew XX.X%. U.S. XXX% Student

Sophia to Technology year. also prior Education grew both gain Our Edge Workforce XX% increased see the quarter, second with Segment operating market continuing Services share. XX% the strength and In from revenue continued to income and ETS

the college component its Learning, key Sophia a a quarter and in of which portal the generated partnerships, classes our second level direct-to-consumer many is revenue XX% corporate strategic which XX% margin grew by operating XX% a from margin our up of prior year. of also is in

XX,XXX Average subscribers more total to grew than paid paid subscribers. XX%

million employees. partnerships ETS has X.X new partners who the more employ now During collectively and corporate XX corporate Workforce XX Quarter, added total than Edge

approximately into Capella or students. Edge to enrollments Workforce grew either XX% Strayer University X,XXX

of that traction strong with to within combined our the investments half Edge. from our XXXX second These division, November. Including communicated segments, higher to decided we planned accelerated model in than previous last full investments Given increase rest be the Australia investments spend a expenses will our the year we support basis, previously ETS increased other of our on growth that Workforce our means Sophia have plans marketing in in and slightly both notional operating of our

increasing total XX,XXX enrollment Students. just X% another growth with prior segment Zealand the posted over year New Our from of enrollment Australia quarter to

increased and enrollment contributed revenue resumption campus. of student. as lap a from student the on international continuing driven second per the XX% The the the load Australian strong courses Revenue Enrollment take constant Higher we Student currency a increase In course by year higher students basis per in X% grew revenue on to predominantly to quarter, more driven was enrollment. prior requirement by for

constant expenses back-to-school currency in ANZ's quarter operating On second high the I point note basis, Summer. year operating income revenue the of a growth from quarter, the Australian ANZ to quarter sequentially prior quarter $XX year. the of after increased generally is with should last second a loss for from and million an the that X%

successful again, to are In my continue year for we like with our within to once towards colleagues XXXX. Thank pleased a full And commitment students. very of SCI to strong their work I'd the business our and closing, ongoing results across all

we'd Jonathan, happy questions. that, take with And be to

Operator

[Operator Instructions].

from question comes first Capital line Jeff of Our BMO Markets. Silber the from

Jeffrey Silber

you help told you Karl, operating And us your out what year? put we in the than last you us of should think year? you last investments slightly can because will Can us year. be expect mentioned remind you this increased you what what expenses higher quantify model notional

Daniel Jackson

by additional would Dan. balance [indiscernible] hundred What through it's a million. operating investment we that was Jeff, basis the we million $XXX and $XXX of year, that, the points. between be of expand likely couple And thought to probably it's said margin below given this

Jeffrey Silber

or in more education? Or most spending both we be will expect ANZ? should And higher in of U.S. that also ETS

Daniel Jackson

be half but Ed. Higher expense across like ANZ and year all to ETFs the more to of It's U.S. definitely the going in relative growth X, latter

Jeffrey Silber

see issues we it strong anything on? specific the And in Any really higher that, enrollment leverage going should timing the results when in Great. had looking pretty then just you education. but there up, I was Was know of? be aware Okay. quarter, U.S. operating outsized. margin at goes you

Karl McDonnell

had have Ed. expense high than pointed yourself, that and We quite Higher out variable what you Other Jeff, we've No. much don't in U.S. enrollment revenue. that

we that when impacts favorably. the it growth levels So margin see quite . had, revenue the obviously we've of

Jeffrey Silber

probably this [ fast to ] Okay. past the just saw of in some from know question. sneak you ask on have going But of Fair the of cycle, enough. the impact If those some yet. I as doesn't delays? I'm you year to it Obviously, enrollment do more. with could any impact expect delays the an we back one I maybe in of have half

Karl McDonnell

Well, as have as said, impact [ not yet. ] seen from we delays you of any fast just

in of enrollment so We but impact, have intake any it our if any largest the so haven't quarter be midst had are to remains we'll seen far. . we

Operator

the Jasper And next question from comes Bibb of our from Truist. line

Jasper Bibb

margin would talked in growth of model the to at of back growth the half seems that the revenue it on and sense. the makes X%, contemplated a to start flat year. notional But notional like revenue about also and the pou all the updating model imply year, that X%

clear, frame and So to growth revenue are second And be model? way like? the to growth you look might for notional revenue half any what also 'XX updating the

Karl McDonnell

Sure. revenue what thought don't an year. is since half back on because, update control. Well, we it to something important We provide we expenses our be the in of we don't was outlook obviously, revenue that's going know Frankly, the our to

normally run higher over to businesses We investments. had growth. we me would revenue I rate these saw think long notional just we to and support surprising expect note, always basis. have term. make to be say on it to substantially revenue a we've U.S. growth not that moderate plans can Jasper, would enrollment that we those level we in enrollment expect our that what that Higher and roughly that would if down than notionally We particularly X% XX% ed, enrollment

Jasper Bibb

would, into this towards international wanted sense. and students think, if July, makes I to for point? seeing ability That you're government at then get double vis-a-vis Australia, curious I rules in new far than any to did impact your what the I early that's as the having And ask see as on announced more immigration there enrollments in country.

Karl McDonnell

sources seen have Australia in of I that lengthen of Visas there's remind owners timing to actually that the We growth would students. international started our has again. for But Approvals two

are share very other we've charge. that's because by a high-quality need tuition Visa Immigrated seen to who host get to significant after Australia. are we what on to area market favorable are have their who able at who a frankly, institution institutions students who we students the There's in university. there's very a X But months and offshore product, another Torrens, And then have where vis-a-vis Australia also already transfer gains Visa into an primarily,

I growth the expect international continue rest year. part next into that to So of and of would this year

Jasper Bibb

. me. question know a broader following Chevron Education Last changing typically industry it. primarily you I the for framework has this making. decision? the rule Got see if regulatory regulated question, Department Maybe through curious

Robert Silberman

to terms regulated will so, by Rob. students supported mean is if understand don't it a won't the our I generous this that favorable in and Frankly, by taxpayer. it Parameters. are change sector we I very are our that but change, and Operating really know operate Jasper, credit we appropriately universities borne heavily it our

and we're of regulation the decision, of And will the about and types regulations priority what of to so or addressed that making the doesn't is legislative which the regulations those going the we branch Executive federal Branch affect between in really protect regulations government think Chevron relative how taxpayer. the has The interest operate. be how

maintaining these to And the important universities of concerned source control the what of going that or We're overarching the to as meet it's are. run Frankly, balance. mechanisms the us to regardless the well, of that are people about regulations intent

Operator

Heather Balsky [Operator question . Instructions]And line next the our of comes from from BofA.

Emily Marzo

you're starting to Balsky. Heather Emily the second first to Starting half. rate half tough half the comparisons -- the a from U.S., so enrollment second the and in starting growth is lap your the the you're This second you the so and the far? for momentum seeing Could with Marzo thoughts on share in half

Karl McDonnell

the can't quarter, We still pleased results. still Students. with obviously, I obviously in we're half first Well, half comment that second Enrolling were on because

robust. demand healthy the I'd environment say and remains

the said I channel strong. quite As prepared my in affiliated is remarks, enrollment corporate

been I We continue the clients what higher we we had What quarter. that revenue every segment we've planned expect, corresponding in again the add Ed higher growth would than new U.S. note and significantly for. enrollment has to that particularly

of would enrollment And be, expect to U.S. and XX% higher of time, X% so that into revenue time growth. of to I we over when and on Predict would period sort the down can't Normalize both range ed period some

Emily Marzo

enrollment. affiliate as that And affiliated now students of with noncorporate exact in reach think coming than that of number incremental would enrollment U.S. And more ed in the corporate Basically I enrollment have corporate front just note how Xx is our higher X from the much I a is don't X could but partnerships? in X of do grew partners. me, affiliate where follow-up, corporate you

. continue see well partnerships, that above that getting grow. a Over period, number we percent will XX%. As multiyear continue to to mix add I large could

Operator

session CEO, today's McDonnell, . Karl further This to of back program does and the to remarks. program. President hand any conclude question-and-answer the I'd like for

Karl McDonnell

forward look we Thank discussing quarter you, and Thank to Jonathan, and joining you, you. everyone, for November. . in our thank third us, results

Operator

and ladies for your gentlemen, the program. in conference. participation you, Thank conclude today's This does

now may Good disconnect. day. You

Strategic Education (STRA) 31 Jul 242024 Q2 Earnings call transcript