What changed in this filing

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Item 1A. Risk Factors

2026-02-19 compared with 2025-02-20 · 50 added, 55 removed, 297 unchanged (26% of the section changed)

5 unchanged sentences

Our portfolio, which is composed of five institutions, operates in Mexico and Peru, each of which is subject to complex business, economic, legal, political, tax and foreign currency risks.

We may have difficulty managing and administering our operations in multiple countries, and we may need to expend additional funds to, among other things, staff key management positions, obtain additional information technology infrastructure and successfully implement relevant course and program offerings for each market, which may materially adversely affect our business, financial condition and results of operations.

We may have difficulty managing and administering our operations in multiple countries, and we may need to expend additional funds to, among other things, staff key management positions, obtain, upgrade and implement additional information technology infrastructure, and successfully implement relevant course and program offerings for each market, which may materially adversely affect our business, financial condition and results of operations.

Additional challenges associated with the conduct of our business overseas that may materially adversely affect our operating results include:

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• potential economic and political instability in the countries in which we operate, including student unrest;

• changes in political leadership, whether in Mexico, Peru or the U.S., and subsequent changes to laws and regulatory regimes including new tariffs, trade restrictions and trade policies;

• changes in the political landscape in Mexico, Peru and/or the U.S., and subsequent changes to laws and regulatory regimes including new tariffs, trade restrictions and trade policies;

• fluctuations in exchange rates, possible currency devaluations, inflation and hyperinflation;

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• limitations on the repatriation and investment of funds and foreign currency exchange restrictions;

• acts of terrorism, public health risks, crime and natural disasters, particularly in areas in which we have significant operations.

• acts of terrorism, public health risks or emergencies such as pandemics or epidemics, crime and natural disasters, particularly in areas in which we have significant operations.

Our success in operating our business will depend, in part, on our ability to anticipate and effectively manage these and other risks related to operating in multiple countries.

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Brand value may be severely damaged, even by isolated incidents, particularly if the incidents receive considerable negative publicity.

There has been a marked increase in use of social media platforms and other forms of Internet-based communications that allow individuals access to a broad audience of interested persons.

There has been a marked increase in use of social media platforms and other forms of online communications that allow individuals access to a broad audience of interested persons.

We believe that students and prospective employers value readily available information about our institutions and often act on such information without further investigation or authentication, and without regard to its accuracy.

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In order to maintain and increase our revenues and margins, we must continue to develop our admissions programs and attract new students in a cost-effective manner.

The level of marketing and advertising and types of strategies used are affected by the specific geographic markets, regulatory compliance requirements and the specific individual nature of each institution and its students.

The level of marketing and advertising and types of strategies used are affected by the specific geographic markets, regulatory compliance requirements and the specific nature of each institution and its students.

The complexity of these marketing efforts contributes to their cost.

If we are unable to advertise and market our institutions and programs successfully, our ability to attract and enroll new students could be materially adversely affected and, consequently, our financial performance could suffer.

We use marketing tools such as the Internet, radio, television and print media advertising to promote our institutions and programs.

We use marketing tools such as online, radio, television and print media advertising to promote our institutions and programs.

Our representatives also make presentations at upper secondary schools.

In order to maintain our growth, we will need to attract a larger percentage of students in existing markets and increase our addressable market by adding locations in new markets and rolling out new academic programs.

Any failure to accomplish this may have a material adverse effect on our future growth.

Any failure to accomplish these initiatives may have a material adverse effect on our future growth.

If we do not effectively manage our growth and business, our results of operations may be materially adversely affected.

There is no assurance that we will be able to maintain or accelerate the current growth rate, effectively manage expanding operations, build new campuses, expand capacity at current locations, or achieve planned growth on a timely or profitable basis.

If our revenue growth is less than projected, the costs incurred for these additions and upgrades could have a material adverse effect on our business, financial condition and results of operations.

We may not be able to maintain or accelerate the current growth rate, effectively manage expanding operations or building new campuses, expand capacity at current locations, or achieve planned growth on a timely or profitable basis.

If any expansion initiative underperforms or does not proceed as planned, or our revenue growth is less than projected, the costs incurred for these additions and upgrades could have a material adverse effect on our business, financial condition and results of operations.

Our institutions are subject to uncertain and varying laws and regulations, and any changes to these laws or regulations or their application to us may materially adversely affect our business, financial condition and results of operations.

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Some of our competitors in both the public and private sectors may have greater financial and other resources than we have and have operated in their markets for many years.

Other competitors may include large, well-capitalized companies that may pursue a strategy similar to ours of acquiring or establishing for-profit institutions.

Other competitors may include large, well-capitalized companies that may pursue a strategy similar to ours of expanding campuses, adding on-campus or online programs or acquiring or establishing for-profit institutions.

Public institutions receive substantial government subsidies, and public and private not-for-profit institutions have access to government and foundation grants, tax-deductible contributions and other financial resources generally not available to for-profit institutions.

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Failure to keep pace with changing market needs and technology could harm our ability to attract students.

The success of our institutions depends to a significant extent on the willingness of prospective employers to hire our students upon graduation.

The success of our institutions depends significantly on the willingness of prospective employers to hire our students upon graduation.

Increasingly, employers demand that their employees possess appropriate technological and other appropriate skills, such as communication, critical thinking and teamwork.

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This translation is based on average exchange rates during a reporting period.

While the Mexican peso and the Peruvian nuevo sol strengthened against the U.S.

dollar by the end of 2025 compared to the beginning of the year, the U.S.

dollar has strengthened against those currencies in the recent past.

As the exchange rate of the U.S.

dollar strengthens, as occurred in 2024 and as we expect will continue to occur in 2025 with respect to the Mexican peso, our reported international revenues and earnings are reduced because foreign currencies translate into fewer U.S.

dollar strengthens, our reported international revenues and earnings are reduced because foreign currencies translate into fewer U.S.

For the year ended December 31, 2025, a hypothetical 10% adverse change in average annual foreign currency exchange rates would have decreased our revenue, operating income and Adjusted EBITDA by approximately $170.2 million, $49.7 million and $57.3 million, respectively.

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dollar value of our assets and future cash flows with respect to exchange rate fluctuations.

Given the volatility of exchange rates, there is no assurance that we will be able to effectively manage currency transaction and/or translation risks.

Given the volatility of exchange rates, we may not be able to effectively manage currency transaction and/or translation risks.

Therefore, volatility in currency exchange rates may have a material adverse effect on our business, financial condition, results of operations and cash flows.

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If a country in which we operate is designated as a highly inflationary economy in the future under GAAP, the U.S.

dollar would become the functional currency for our operations in that country.

As a result, all gains and losses resulting from the

remeasurement of the financial results of operations in such country and other transactional foreign exchange gains and losses would be reflected in our earnings, which could result in volatility within our earnings, rather than as a component of our comprehensive income within stockholders’ equity.

would become the functional currency for our operations in that country.

As a result, all gains and losses resulting from the remeasurement of the financial results of operations in such country and other transactional foreign exchange gains and losses would be reflected in our earnings, which could result in volatility within our earnings, rather than as a component of our comprehensive income within stockholders’ equity.

Hyperinflation in any of the countries in which we operate may have a material adverse effect on our business, financial condition, results of operations and cash flows.

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In addition, changes in the valuation of our deferred tax assets and liabilities, or changes in tax laws, regulations and accounting principles, could have a material adverse effect on our future income taxes.

We have not recorded deferred tax liabilities for undistributed foreign earnings because our strategy is to reinvest these earnings outside the United States.

In the ordinary course, we do not record deferred tax liabilities for undistributed foreign earnings because our strategy is to reinvest these earnings outside the United States.

As circumstances change and if some or all of these undistributed foreign earnings are remitted to the United States, we may be required to recognize deferred tax liabilities on any amounts that we are unable to repatriate in a tax-free manner.

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We run the online operations of our institutions on different platforms, which are in various stages of development.

We also periodically implement new or enhanced business processes, enterprise and information systems.

Implementation of such systems requires the commitment of significant personnel, training and financial resources, and entails risks to our business operations.

The performance and reliability of these online operations are critical to the reputation of our institutions and our ability to attract and retain students.

Any computer system error or failure, or a sudden and significant increase in traffic on our institutions’ computer networks or those of our third-party providers, may result in the unavailability of these computer networks.

Any computer system error or failure, delay or unsuccessful implementation of new or enhanced systems, or a sudden and significant increase in traffic on our institutions’ computer networks or those of our third-party providers, may result in the unavailability of these computer networks.

In addition, any significant failure of our computer networks could disrupt our on-campus operations.

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Further, the disaster recovery plans and backup systems that we have in place may not be effective in addressing a natural disaster or catastrophic event that results in the destruction or disruption of any of our critical business or information technology and infrastructure systems.

As a result of any of these events, we may not be able to conduct normal business

operations and may be required to incur significant expenses in order to resume normal business operations.

As a result, our revenues and results of operations may be materially adversely affected.

As a result of any of these events, we may not realize anticipated productivity improvements or cost efficiencies and may experience interruptions in service and operational difficulties, which could result in quality issues, reputational harm and lost market

opportunities.

Further, we may not be able to conduct normal business operations and may be required to incur significant expenses in order to resume normal business operations.

As a result of these risks, our revenues and results of operations may be materially adversely affected.

Any breach, theft or loss of personal information that we collect or any violations of the privacy and information security laws and regulations to which we are subject could materially adversely affect our reputation and operations.

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Although we use security and business controls to limit access and use of personal information, a third party may be able to circumvent those security and business controls, which could result in a breach of student or employee privacy.

See above risk factor regarding threats experienced by us and other global companies as continued targets of cyber security attacks and that, despite having experienced attacks and threats, we are not aware that we have experienced a material cyber-security breach.

The preventative actions we take to reduce the risk of cyber incidents and protect our information may be insufficient.

A user who circumvents security measures could misappropriate personal or proprietary information.

See also “ Connectivity constraints or technology system breaches and/or disruptions to our computer networks could have a material adverse effect on our ability to attract and retain students and subject us to liability, reputational damage or interrupt the operation of our business ” above.

In addition, errors in the storage, use or transmission of personal information could result in a breach of student or employee privacy.

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Other higher education institutions and online educational programs, however, may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively.

If we fail to keep pace with rapidly evolving technological developments in AI, our competitive position and business results may suffer.

If we fail to keep pace with rapidly evolving technological developments in AI or other emerging technologies, our competitive position and business results may suffer.

While AI-powered applications may help provide more tailored or personalized student experiences, if the content, analyses or recommendations that AI applications assist in producing are, or are perceived to be, deficient, inaccurate or biased, our reputation, competitive position and business may be materially and adversely affected.

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Peru and its economy are particularly vulnerable to El Niño, which generally results in an increase in storms, flooding and mudslides.

Depending upon the severity of El Niño and its resulting impact on Peru and its economy, we may experience a range of disruptions, including reductions in enrollment, campus closures and flood-related damage, which could have a material adverse effect on our financial condition and results of operations.

In addition, a number of our institutions in Mexico and Peru are located in areas that are prone to earthquake damage.

For example, in 2017, a magnitude 7.1 earthquake struck

Mexico, causing a temporary suspension of activities at several UVM and UNITEC campuses that lasted 12 days on average, and we incurred significant direct costs for repairs due to the earthquake.

It is possible that one or more of our institutions would be unable to operate for an extended period of time in the event of a hurricane, earthquake or other disaster that causes substantial damage to the area in which an institution is located.

Depending upon the severity of El Niño events and their resulting impact on Peru and its economy, we may experience a range of disruptions, including reductions in enrollment, campus closures and flood-related damage, which could have a material adverse effect on our financial condition and results of operations.

In addition, a number of our institutions in

Mexico and Peru are located in areas that are prone to earthquake damage.

For example, in 2017, a magnitude 7.1 earthquake struck Mexico, causing a temporary suspension of activities at several UVM and UNITEC campuses that lasted 12 days on average, and we incurred significant direct costs for repairs due to the earthquake.

It is possible that one or more of our institutions would be unable to operate for an extended period of time in the event of a hurricane, earthquake, flood, landslide or other disaster that causes substantial damage to the area in which an institution is located.

The failure of one or more of our institutions to operate for a substantial period of time could have a material adverse effect on our results of operations.

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Our business is subject to the risk of litigation by employees, students, suppliers, competitors, minority partners, counterparties in transactions in which we purchase or sell assets or leased property, stockholders, government agencies or others through private actions, class actions, administrative proceedings, regulatory actions or other litigation, some of which may take place in jurisdictions in which local parties may have certain advantages over foreign parties.

The outcome of litigation, particularly class action lawsuits, regulatory actions and intellectual property claims, is difficult to assess or quantify.

Plaintiffs in these

types of lawsuits may seek recovery of very large or indeterminate amounts, or may assert criminal charges, and the magnitude of the potential loss relating to these lawsuits may remain unknown for substantial periods of time.

The outcome of litigation, particularly

class action lawsuits, regulatory actions and intellectual property claims, is difficult to assess or quantify.

Plaintiffs in these types of lawsuits may seek recovery of very large or indeterminate amounts, or may assert criminal charges, and the magnitude of the potential loss relating to these lawsuits may remain unknown for substantial periods of time.

In addition, certain of these lawsuits, if decided adversely to us or settled by us, may result in liability material to our financial statements as a whole or may negatively affect our operating results if changes to our business operation are required.

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As a result of doing business in foreign countries and with foreign partners, we are exposed to a heightened risk of violating anti-corruption laws.

Although we have implemented policies and procedures designed to ensure that we, our employees and other intermediaries comply with the FCPA and other anti-corruption laws to which we are subject, there is no assurance that such policies or procedures will work effectively all of the time or protect us against liability under the FCPA or other laws for actions taken by our employees and other intermediaries with respect to our business or any businesses that we may acquire.

Although we have implemented policies and procedures designed to ensure that we, our employees and other intermediaries comply with the FCPA and other anti-corruption laws to which we are subject, such policies or procedures may not work effectively all of the time or protect us against liability under the FCPA or other laws for actions taken by our employees and other intermediaries with respect to our business or any businesses that we may acquire.

We cannot assure you that all of our local partners will comply with these laws, in which case we could be held liable for actions taken inside or outside of the United States, even though our partners may not be subject to these laws.

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Any investigation of any potential violations of the FCPA or other anti-corruption laws, export control laws and regulations, and economic sanctions laws and regulations by the United States or foreign authorities could also materially adversely affect our business, financial condition, results of operations and liquidity, regardless of the outcome of the investigation.

An epidemic, pandemic or other public health emergency could have a material adverse effect on our business, financial condition, cash flows and results of operations.

An epidemic, pandemic or other public health emergency in the locations in which our students, faculty, and staff live, work and attend classes could have an adverse effect on our business, financial condition, cash flows and results of operations.

An epidemic, pandemic or other public health emergency could adversely affect global economies, market conditions and business operations across industries worldwide, including our industry.

Any general economic slowdown or recession that disproportionately impacts the countries in which our institutions operate could have a material adverse effect on our business, financial condition, cash flows and results of operations.

In the event of a sustained market deterioration, we may need additional liquidity, which would require us to evaluate available alternatives and take appropriate actions.

We have in the past had material weaknesses in our internal control over financial reporting.

We have identified and remediated material weaknesses in the past and may in the future discover areas of our internal financial and accounting controls and procedures that need improvement.

Our internal control over financial reporting will not prevent or detect all errors and all fraud.

A control system, regardless of how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Because of the inherent limitations in all control systems,

no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements, and we or our independent registered public accounting firm may conclude that our internal controls over financial reporting are not effective or our independent registered public accounting firm may not be able to provide us with an unqualified opinion as required by Section 404 of the Sarbanes-Oxley Act.

If that were to happen, investors could lose confidence in our reported financial information, which could lead to a decline in the market price of our common stock and we could be subject to sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities.

Additionally, the existence of any material weakness could require management to devote significant time and incur significant expense to remediate any such material weakness and management may not be able to remediate any such material weakness in a timely manner.

The existence of any material weakness in our internal control over financial reporting also could result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations and cause the holders of our common stock to lose confidence in our reported financial information, all of which could materially adversely affect our business and share price.

If we fail to maintain effective internal control over financial reporting, the accuracy and timing of our financial reporting may be adversely affected.

As a public company, we are required, among other things, to maintain effective internal controls over financial reporting and disclosure controls and procedures.

The process of designing and implementing effective internal controls and disclosure controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environment and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

We cannot assure you that the measures that we have taken, and that we continue to take, will be sufficient to prevent material weaknesses from occurring.

If we fail to establish and maintain effective internal controls, our ability to accurately and timely report our financial results could be adversely affected and may result in a restatement of our annual or interim financial statements, which could cause us to fail to meet our reporting obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.

Risks Relating to Our Indebtedness

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In addition, we rely on intercompany loan repayments and other payments from our operating subsidiaries to meet any existing or future debt service and other obligations, a substantial portion of which are denominated in U.S.

The ability of our operating subsidiaries to pay dividends or to make distributions or other payments to their parent companies or directly to us will depend on their respective operating results and may be restricted by, among other things, the laws of their respective jurisdictions of organization, regulatory requirements, agreements entered into by those operating

subsidiaries and the covenants of any existing or future outstanding indebtedness that we or our subsidiaries may incur.

Further, because most of our income is generated by our operating subsidiaries in non-U.S.

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We may be unable or slow to realize the long-term benefits we expect from actions taken to benefit our students and communities in which we operate, which could materially adversely affect our business, financial condition and results of operations, which in turn could cause our stock price to decline.

If we or our existing investors sell or announce an intention to sell additional shares of our common stock, the market price of our common stock could decline.

The market price of our common stock could decline as a result of sales of a large number of shares of common stock in the market, or the perception that such sales could occur.

These sales, or the possibility that these sales may occur, also might make it more difficult for us to raise capital through future sales of equity securities at a time and at a price that we deem appropriate, or at all.

The amount and frequency of our share repurchases and dividends are affected by a number of factors and may fluctuate.

Although historically we have announced special cash dividend payments and we have currently adopted a share repurchase program, we are not obligated to pay cash dividends or to repurchase a specified number or dollar value of shares under our share repurchase program or at all.

The level of dividends and amount, timing, and purchases under our share repurchase program, if any, are influenced by many factors and may fluctuate based on our operating results, cash flows, and priorities for the use of cash, the market price of our common stock, and, with respect to share repurchases, our possession of potentially material nonpublic information.

In addition, we cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term shareholder value.

The trading price of our common stock is subject to volatility.

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The provision of our amended and restated certificate of incorporation requiring exclusive venue in the Court of Chancery in the State of Delaware for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

Our amended and restated certificate of incorporation requires, to the fullest extent permitted by law, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws or (iv) any action asserting a claim against us governed by the internal affairs doctrine will have to be brought only in the Court of Chancery in the State of Delaware unless we otherwise consent in writing to an alternative form.

directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws or (iv) any action asserting a claim against us governed by the internal affairs doctrine will have to be brought only in the Court of Chancery in the State of Delaware unless we otherwise consent in writing to an alternative form.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.

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Joint and several liability may be imposed if during any of the 12 months preceding the transaction, inter alia , the transferor of Company shares held an indirect or direct interest of more than 10% of the Company’s outstanding shares.

If such a transaction were to occur and the

Peruvian tax authorities sought to collect the Peruvian capital gains taxes from the Company’s Peruvian subsidiaries that were not paid by such transferor, it could have a material adverse effect on our business, financial condition or results of operations.

If such a transaction were to occur and the Peruvian tax authorities sought to collect the Peruvian capital gains taxes from the Company’s Peruvian subsidiaries that were not paid by such transferor, it could have a material adverse effect on our business, financial condition or results of operations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors