What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-20 · 111 added, 126 removed, 461 unchanged (34% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion of our results of operations and financial condition with the audited historical consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K (Form 10-K).

discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Item 1A.

You should read the following discussion of our financial condition and results of operations with the audited historical consolidated financial statements and related notes included elsewhere in this Form 10-K.

This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the “Item 1A.

Risk Factors” section of this Form 10-K.

32 unchanged sentences

Laureate owns two nationally licensed institutions and is present throughout the country with a footprint of over 30 campuses.

Students in our Mexican institutions typically finance their own education.

• In Peru, private universities are increasingly providing the capacity to meet growing demand and constitute approximately 76% of the total higher-education market.

15 unchanged sentences

price controls and foreign currency exchange restrictions;

potential economic and political instability in the countries in which we operate;

potential economic and political instability in both countries in which we operate;

expropriation of assets by local governments;

key political elections and changes in government policies;

subsequent changes to laws and regulatory regimes;

multiple and possibly overlapping and conflicting tax laws;

and compliance with a wide variety of foreign laws.

See “Item 1A—Risk Factors—Risks Relating to Our Business—We operate a portfolio of degree-granting higher education institutions in Mexico and Peru and are subject to complex business, economic, legal, political, tax and foreign currency risks, which risks may be difficult to adequately address.” We plan to grow organically by:

1) adding new programs and course offerings;

2 unchanged sentences

Our success in growing our business will depend on the ability to anticipate and effectively manage these and other risks related to operating in various countries.

See “Item IA—Risk Factors—Risks Relating to Our Business—If we do not effectively manage our growth and business, our results of operations may be materially adversely affected.”

Regulatory Environment and Other Matters

16 unchanged sentences

Institutions in our Mexico segment have their Primary Intake during the third calendar quarter and a Secondary Intake during the first calendar quarter.

Our institutions in Peru are generally out of

session in January, February and July, while institutions in Mexico are generally out of session in May through July.

Our institutions in Peru are generally out of session in January, February and July, while institutions in Mexico are generally out of session in May through July.

Revenues are recognized when classes are in session.

Principal Components of Income Statement

The majority of our revenue is derived from tuition and educational services.

The majority of our revenue is derived from tuition revenue from enrolled students.

The amount of tuition generated in a given period depends on the price per credit hour and the total credit hours or price per program taken by the enrolled student population.

2 unchanged sentences

Revenues are recognized net of scholarships and other discounts, refunds and waivers.

In addition to tuition revenues, we generate other revenues from student fees and other education-related activities.

In addition to tuition revenues, we generate other revenues from student fees, short courses, and other education-related activities.

These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues.

13 unchanged sentences

See “Item 1A—Risk Factors—Risks Relating to Our Business—Our reported revenues and earnings may be negatively affected by the strengthening of the U.S.

dollar and currency exchange rates.” In order to provide a framework for assessing how our business performed excluding the effects of foreign currency fluctuations, we present organic constant currency in our segment results, which is calculated using the change from prior-year average foreign exchange rates to current-year average foreign exchange rates, as applied to local-currency operating results for the current year, and then excludes the impact of other items, as described in the segment results.

Our institutions have a summer break during which classes are generally not in session and minimal revenues are recognized.

9 unchanged sentences

Our consolidated income tax provision is derived based on the combined impact of federal, state and foreign income taxes.

Also, discrete items can arise in the course of our operations that can further affect the Company’s effective tax rate for the period.

Our tax rate fluctuates from period to period due to changes in the mix of earnings between our tax-paying entities and our loss-making entities for which it is not ‘more likely than not’ that a tax benefit will be realized on the loss.

See “Item 1A—Risk Factors—Risks Relating to Our Business—We may have exposure to greater-than-anticipated tax liabilities.”

Many countries have enacted legislation and adopted policies to implement the global minimum tax resulting from the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting project.

Significant details and guidance around the global minimum tax provisions are still pending.

For countries that have enacted the global minimum tax, such taxes generally became effective for the Company beginning in 2024.

Many countries have enacted legislation and adopted policies to implement the global minimum tax resulting from the Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting project.

Significant details and guidance around compliance with the global minimum tax are still pending.

For countries that have enacted the global minimum tax, such taxes generally became effective for the Company beginning in 2024, with filing requirements expected to begin in 2026.

Income tax expense could be adversely affected as the legislation becomes effective in countries in which we do business.

We will continue to monitor pending legislation and implementation by individual countries in which we operate, and we do not expect the global minimum tax provisions to have a material impact on our results of operations, financial position or cash flows.

We continue to monitor pending legislation and implementation by individual countries in which we operate, and we do not expect the global minimum tax provisions to have a material impact on our results of operations, financial position or cash flows.

Results of Operations

15 unchanged sentences

Interest expense, net of interest income (3.6) (10.0) (11.9) 64 % 16 %

Other non-operating income (expense)

50.5 (72.5) (15.3) 170 % nm

Other non-operating (expense) income

(26.6) 50.5 (72.5) (153) % 170 %

Income from continuing operations before income taxes and equity in net income of affiliates

4 unchanged sentences

Income from continuing operations 283.8 295.7 117.0 (4) % 153 %

Income (loss) from discontinued operations, net of tax

0.7 (9.8) 8.3 107 % nm

(Loss) income from discontinued operations, net of tax

— 0.7 (9.8) (100) % 107 %

Net loss attributable to noncontrolling interests

283.8 296.4 107.3 (4) % 176 %

Net (income) loss attributable to noncontrolling interests

(2.2) 0.1 0.3 nm 67 %

Net income attributable to Laureate Education, Inc.

3 unchanged sentences

Revenues increased by $135.3 million to $1,701.9 million for 2025 from $1,566.6 million for 2024.

The increase was attributable to:

(1) higher average total organic enrollment at our institutions, which increased revenues by $92.4 million compared to 2024;

(2) the effect of changes in tuition rates and enrollments in programs at varying price points (“product mix”), pricing and timing, which increased revenues by $40.5 million compared to 2024;

and (3) the net effect of changes in foreign currency exchange rates, which increased revenues by $2.5 million.

This net effect was the result of an increase in revenues of $45.4 million caused by the strengthening of the Peruvian nuevo sol against the USD compared to 2024, almost entirely offset by a decrease in revenues of $42.9 million caused by the weakening of the Mexican peso against the USD compared to 2024.

These increases were partially offset by changes in Other Corporate and Eliminations which accounted for a decrease in revenues of $0.1 million.

Direct costs and general and administrative expenses combined increased by $78.2 million to $1,270.9 million for 2025 from $1,192.7 million for 2024.

This increase in direct costs was driven by the effect of operational changes, which increased direct costs by $85.4 million compared to 2024, mostly attributable to the effect of higher enrollments at our institutions.

This increase was partially offset by the net effect of changes in foreign currency exchange rates which decreased costs by $6.4 million.

This net effect was the result of a decrease in costs of $33.3 million caused by the weakening of the Mexican peso against the USD compared to 2024, partially offset by an increase in costs of $26.9 million caused by the strengthening of the Peruvian nuevo sol against the USD compared to 2024.

Additionally, other Corporate expenses decreased by $0.8 million.

Operating income increased by $57.1 million to $431.1 million for 2025 from $374.0 million for 2024.

This increase was primarily a result of higher operating income at our Mexico and Peru segments as compared to 2024.

Interest expense, net of interest income decreased by $6.4 million to $3.6 million for 2025 from $10.0 million for 2024.

The decrease in interest expense was primarily attributable to lower average debt balances compared to 2024.

Other non-operating (expense) income changed by $77.1 million to an expense of $(26.6) million for 2025 from income of $50.5 million for 2024.

This change in other non-operating (expense) income was primarily attributable to a loss on foreign currency exchange for 2025 compared to a gain for 2024 for a change of $85.2 million, mainly related to intercompany loan arrangements.

This change was partially offset by:

(1) an increase in other income of $6.8 million compared to 2024 due to the settlement of an insurance claim for business interruption events that occurred in 2019 and early 2020 at an operation that we have subsequently divested;

and (2) a $1.3 million change in loss on disposal of subsidiaries attributable to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries in 2024.

Income tax expense decreased by $1.7 million to $117.3 million for 2025 from $119.0 million for 2024.

The decrease is the net effect of a higher year-over-year discrete tax benefit recorded in 2025 related to the release of a legacy tax liability, mostly offset by higher taxable income during 2025 as compared to 2024, particularly in Peru.

Comparison of Consolidated Results for the Year Ended December 31, 2024 to the Year Ended December 31, 2023

Revenues increased by $82.3 million to $1,566.6 million for 2024 from $1,484.3 million for 2023.

This increase was attributable to higher average total organic enrollment at our institutions, which increased revenues by $73.6 million compared to 2023.

In addition, the effect of changes in tuition rates and enrollments in programs at varying price points (“product mix”), pricing and timing increased revenues by $34.8 million compared to 2023.

In addition, the effect of changes in product mix, pricing and timing increased revenues by $34.8 million compared to 2023.

These increases in revenues were partially offset by the effect of a net change in foreign currency exchange rates, which decreased revenues by $26.3 million, mainly driven by the weakening of the Mexican peso against the USD compared to 2023.

9 unchanged sentences

The decrease in interest expense was primarily attributable to lower average debt balances compared to 2023.

Other non-operating income (expense) changed by $123.0 million to income of $50.5 million for 2024 from expense of $(72.5) million for 2023.

Other non-operating income (expense) changed by $123.0 million to an income of $50.5 million for 2024 from an expense of $(72.5) million for 2023.

This change in other non-operating income was attributable to a gain on foreign currency exchange for 2024 compared to a loss for 2023 for a change of $126.4 million, mainly related to intercompany loan arrangements.

1 unchanged sentence

These increases in non-operating income were partially offset by a loss on disposal of subsidiaries for 2024 compared to a gain for 2023 for a change of $4.9 million, primarily attributable to the release of accumulated foreign currency translation balances upon the liquidation of certain subsidiaries.

Income tax expense dec reased by $18.6 million to $119.0 million for 2024 from $137.6 million for 2023.

Income tax expense decreased by $18.6 million to $119.0 million for 2024 from $137.6 million for 2023.

This decrease was primarily attributable to a discrete tax benefit of approximately $37.9 million that was recorded during 2024 related to an entity restructuring, partially offset by a tax benefit recorded in 2023 of approximately $11.5 million for the release of valuation allowances in Mexico.

1 unchanged sentence

This change was primarily attributable to the year-over-year effect of a reserve recorded in 2023 related to an indemnification claim received, as well as changes in estimates during 2023 regarding the realizability of certain receivables from previous divestitures.

Comparison of Consolidated Results for the Year Ended December 31, 2023 to the Year Ended December 31, 2022

Revenues increased by $242.0 million to $1,484.3 million for 2023 from $1,242.3 million for 2022.

The increase was attributable to:

(1) the effect of a net change in foreign currency exchange rates, which increased revenues by $108.9 million, mainly driven by the strengthening of the Mexican peso against the USD compared to 2022;

(2) higher average total organic enrollment at our institutions, which increased revenues by $79.3 million compared to 2022;

and (3) the effect of changes in product mix, pricing and timing, which increased revenues by $57.9 million compared to 2022.

These increases in revenues were partially offset by other Corporate and Eliminations changes, which accounted for a decrease in revenues of $4.1 million.

Direct costs and general and administrative expenses combined increased by $170.2 million to $1,142.4 million for 2023 from $972.2 million for 2022.

The effect of operational changes, mostly attributable to the effect of higher enrollments at our institutions as well as return-to-campus expenses, increased direct costs by $94.0 million compared to 2022.

Additionally, the effect of a net change in foreign currency exchange rates increased costs by $86.3 million.

These increases in direct costs were partially offset by a decrease in costs of $10.1 million in 2023 related to other Corporate expenses.

Operating income increased by $68.8 million to $338.8 million for 2023 from $270.0 million for 2022.

This increase in operating income was a result of higher operating income at our Mexico and Peru segments, combined with lower operating costs at Corporate, as compared to 2022.

Interest expense, net of interest income increased by $3.0 million to $11.9 million for 2023 from $8.9 million for 2022.

The increase in interest expense was primarily attributable to higher average debt balances compared to 2022.

Other non-operating expense increased by $57.2 million to $72.5 million for 2023 from $15.3 million for 2022.

This increase was attributable to a higher loss on foreign currency exchange of $58.3 million compared to 2022, mainly related to intercompany loan arrangements.

Additionally, other income was lower by $1.1 million compared to 2022.

These increases in non-operating expense were partially offset by a higher gain on disposal of subsidiaries of $2.2 million, primarily attributable to the release of accumulated foreign currency translation gains upon the liquidation of certain subsidiaries.

Income tax expense decreased by $47.8 million to $137.6 million for 2023 from $185.4 million for 2022.

This decrease was primarily attributable to a discrete tax expense recorded in 2022 of approximately $32.5 million for an income tax reserve related to the application of the high-tax exception to global intangible low-taxed income, with the remaining difference mostly related to a benefit recorded in 2023 of approximately $11.5 million for the release of valuation allowances in Mexico.

(Loss) income from discontinued operations, net of tax changed by $18.1 million to a loss of $(9.8) million for 2023 compared to income of $8.3 million for 2022.

This change was primarily attributable to a reserve recorded in 2023 related to an indemnification claim received, as well as changes in estimates during 2023 regarding the realizability of certain receivables from previous divestitures, combined with the year-over-year impact of a gain recognized during 2022 upon completion of the transfer of certain leases related to our former operations in Chile.

Non-GAAP Financial Measure

We define Adjusted EBITDA as net income (loss), before (income) loss from discontinued operations, net of tax, equity in net (income) loss of affiliates, net of tax, income tax expense (benefit), (gain) loss on disposal of subsidiaries, net, foreign currency exchange (gain) loss, net, other (income) expense, net, interest expense, interest income, and loss on debt extinguishment, plus depreciation and amortization, share-based compensation expense, loss on impairment of assets and expenses related to our Excellence-in-Process (EiP) initiative.

Adjusted EBITDA is used in addition to and in conjunction with results presented in accordance with GAAP and should not be relied upon to the exclusion of GAAP financial measures.

8 unchanged sentences

Net income $ 283.8 $ 296.4 $ 107.3 (4) % 176 %

(Income) loss from discontinued operations, net of tax (0.7) 9.8 (8.3) (107) % nm

Loss (income) from discontinued operations, net of tax — (0.7) 9.8 100 % (107) %

Income from continuing operations 283.8 295.7 117.0 (4) % 153 %

6 unchanged sentences

— 1.3 (3.6) 100 % (136) %

Foreign currency exchange (gain) loss, net

(50.7) 75.7 17.4 167 % nm

Foreign currency exchange loss (gain), net

34.6 (50.7) 75.7 (168) % 167 %

Other (income) expense, net

(1.2) 0.3 (0.8) nm (138) %

(7.9) (1.2) 0.3 nm nm

Interest expense 10.7 18.1 21.0 41 % 14 %

8 unchanged sentences

— — 3.1 nm 100 %

EiP implementation expenses (c)

— — 0.8 nm 100 %

Adjusted EBITDA $ 518.9 $ 450.1 $ 418.6 15 % 8 %

2 unchanged sentences

(b) Represents non-cash charges related to impairments of long-lived assets.

(c) EiP implementation expenses were related to our enterprise-wide initiative to optimize and standardize Laureate’s processes, creating vertical integration of procurement, information technology, finance, accounting and human resources.

It included the establishment of regional shared services organizations (SSOs), as well as improvements to the Company's system of internal controls over financial reporting.

The EiP initiative also included other back- and mid-office areas, as well as certain student-facing activities, expenses associated with streamlining the organizational structure, an enterprise-wide program aimed at revenue growth, and certain non-recurring costs incurred in connection with previous dispositions.

The EiP initiative was completed as of December 31, 2021, except for certain EiP expenses during 2022 related to the run out of programs that began in prior periods.

Comparison of Share-based Compensation Expense for the for the Years Ended December 31, 2025 and 2024

Share-based compensation expense increased by $5.5 million to $13.3 million for 2025 from $7.8 million for 2024, which was primarily driven by executive retention awards of restricted stock units that were granted in May 2024 and January 2025 as well as increased expense related to performance-based awards.

Comparison of Depreciation and Amortization for the Years Ended December 31, 2025 and 2024

Depreciation and amortization decreased by $1.4 million to $68.2 million for 2024 from $69.6 million for 2023, which was primarily driven by the effects of changes in foreign currency exchange rates compared to 2023.

Depreciation and amortization increased by $6.3 million to $74.5 million for 2025 from $68.2 million for 2024, which was primarily attributable to equipment purchases and campus improvements in Mexico that resulted in a higher depreciable asset base compared to 2024.

Comparison of Depreciation and Amortization for the Years Ended December 31, 2024 and 2023

Depreciation and amortization increased by $10.5 million to $69.6 million for 2023 from $59.1 million for 2022.

The effects of foreign currency exchange rates increased depreciation and amortization expense by $5.3 million.

The remaining increase in depreciation and amortization expense of $5.2 million was primarily attributed to a higher depreciable asset base in Mexico and Peru.

Segment Results

1 unchanged sentence

Mexico and Peru, as discussed in Overview.

For purposes of the following comparison of results discussion, “ segment direct costs ” represent direct costs incurred by the segment as they are included in Adjusted EBITDA, such that depreciation and amortization expense, loss on impairment of assets, share-based compensation expense and EiP implementation expenses have been excluded.

For purposes of the following comparison of results discussion, “ segment direct costs ” represent direct costs incurred by the segment as they are included in Adjusted EBITDA, such that depreciation and amortization expense, loss on impairment of assets and share-based compensation expense have been excluded.

Organic enrollment is based on average total enrollment for the period.

26 unchanged sentences

Revenues increased by $36.2 million, a 4% increase from 2024.

• Organic enrollment increased during 2024 by 8%, increasing revenues by $59.8 million.

• On an organic constant currency basis, revenue increased by 9% compared to 2024.

• Revenues from our Mexico segment represented 52% of our consolidated total revenues for 2025 compared to 54% for 2024.

Adjusted EBITDA increased by $29.5 million, a 17% increase from 2023, mainly driven by higher revenues.

Adjusted EBITDA increased by $22.9 million, an 11% increase from 2024.

• On an organic constant currency basis, Adjusted EBITDA increased by 17% compared to 2024, primarily driven by revenue growth and productivity gains.

Comparison of Mexico Results for the Year Ended December 31, 2024 to the Year Ended December 31, 2023

7 unchanged sentences

(1) Organic enrollment and product mix, pricing and timing are not separable for the calculation of direct costs and therefore are combined and defined as Organic constant currency for the calculation of Adjusted EBITDA.

(2) Other is composed of acquisition-related contingent liabilities for taxes other-than-income tax, net of changes in recorded indemnification assets.

Revenues increased by $58.6 million, a 7% increase from 2023.

• Organic enrollment increased during 2023 by 10%, increasing revenues by $52.2 million.

• On an organic constant currency basis, revenue increased by 10% compared to 2023.

• Revenues from our Mexico segment represented 54% of our consolidated total revenues for 2024 compared to 53% for 2023.

Adjusted EBITDA increased by $53.6 million, a 43% increase from 2022, mainly driven by higher revenues, partially offset by higher costs associated with return-to-campus expenses.

Adjusted EBITDA increased by $29.5 million, a 17% increase from 2023.

• On an organic constant currency basis, Adjusted EBITDA increased by 19% compared to 2023, primarily driven by higher revenues.

Financial Overview

9 unchanged sentences

Revenues increased by $99.2 million, a 14% increase from 2024.

• Organic enrollment increased during 2024 by 2%, increasing revenues by $13.8 million.

• On an organic constant currency basis, revenue increased by 7% compared to 2024.

• Revenues from our Peru segment represented 48% of our consolidated total revenues for 2025 compared to 46% for 2024.

Adjusted EBITDA decreased by $3.5 million, a 1% decrease from 2023, primarily due to higher marketing and bad debt expenses.

Adjusted EBITDA increased by $45.2 million, a 16% increase from 2024.

• On an organic constant currency basis, Adjusted EBITDA increased by 9% compared to 2024, primarily driven by higher revenues.

Comparison of Peru Results for the Year Ended December 31, 2024 to the Year Ended December 31, 2023

8 unchanged sentences

Revenues increased by $23.5 million, a 3% increase from 2023.

• Organic enrollment increased during 2023 by 6%, increasing revenues by $27.1 million.

• On an organic constant currency basis, revenue increased by 4% compared to 2023.

• Revenues from our Peru segment represented 46% of our consolidated total revenues for 2024 compared to 47% for 2023.

Adjusted EBITDA increased by $20.2 million, an 8% increase from 2022, mainly driven by higher revenues, partially offset by higher costs associated with return-to-campus expenses.

Adjusted EBITDA decreased by $3.5 million, a 1% decrease from 2023.

• On an organic constant currency basis, Adjusted EBITDA decreased by 1% compared to 2023, primarily due to higher marketing and bad debt expenses.

Corporate revenues primarily represent miscellaneous other revenues, net of the elimination of intersegment revenues.

In 2022, corporate revenues also included transition services agreements related to previous divestitures.

Operating results for Corporate for the years ended December 31, 2025, 2024 and 2023 were as follows:

7 unchanged sentences

Comparison of Corporate Results for the Year Ended December 31, 2025 to the Year Ended December 31, 2024

Adjusted EBITDA increased by $5.4 million, a 12% increase from 2023, mainly driven by a decrease in labor costs and other professional fees.

Adjusted EBITDA increased by $0.7 million, a 2% increase from 2024, mainly driven by a decrease in operating expenses.

Comparison of Corporate Results for the Year Ended December 31, 2024 to the Year Ended December 31, 2023

6 unchanged sentences

We anticipate generating sufficient cash flow from operations in the countries in which we operate to satisfy the working capital and financing needs of our organic growth plans for each country.

If our educational institutions within one country were unable to maintain sufficient liquidity, we would consider using internal cash resources or reasonable short-term working capital facilities to accommodate any short- to medium-term shortfalls.

If our educational

institutions within one country were unable to maintain sufficient liquidity, we would consider using internal cash resources or reasonable short-term working capital facilities to accommodate any short- to medium-term shortfalls.

As of December 31, 2025, our cash and cash equivalents were $146.7 million.

1 unchanged sentence

The Company also maintains a revolving credit facility (the "Senior Secured Credit Facility") with a syndicate of financial institutions as a source of liquidity.

The Senior Secured Credit Facility, pursuant to the Third Amended and Restated Credit Agreement, dated as of October 7, 2019 (the “Credit Agreement”, as amended by the First Amendment, dated as of July 20, 2020, the Second Amendment, dated as of December 23, 2022, and, as further amended by the Third Amendment, dated as of September 18, 2023, the “ Amended Credit Agreement ”), provided for borrowings of $145.0 million of revolving credit loans, which matured on October 7, 2024 (the “ Series 2024 Tranche ” ) and $155.0 million of revolving credit loans maturing in September 2028 (the "Series 2028 Tranche") for a $300.0 million aggregate revolving credit facility (the “ Revolving Credit Facility ”) .

Given the maturity date of the Series 2024 Tranche, as of December 31, 2024, the borrowing capacity of the Revolving Credit Facility was $155.0 million.

The Senior Secured Credit Facility, pursuant to the Third Amended and Restated Credit Agreement, dated as of October 7, 2019 (the “Credit Agreement”, as amended by the First Amendment, dated as of July 20, 2020, the Second Amendment, dated as of December 23, 2022, and, as further amended by the Third Amendment, dated as of September 18, 2023, the “ Amended Credit Agreement ”), provides for borrowings of $155.0 million of revolving credit loans maturing in September 2028 (the “ Revolving Credit Facility ”) .

As a subfacility under the Revolving Credit Facility, the Amended Credit Agreement provides for letter of credit commitments in the aggregate amount of $10.0 million.

From time to time, we draw down on the Revolving Credit Facility , and, in accordance with the terms of the credit agreement, any proceeds drawn on the Revolving Credit Facility may be used for general corporate purposes.

As of December 31, 2024, the Company

had no outstanding balance borrowed under the Revolving Credit Facility.

As of December 31, 2025, the Company had no outstanding balance borrowed under the Revolving Credit Facility.

In addition to the Revolving Credit Facility, our subsidiaries had approximately $64.7 million of available borrowing capacity under lines of credit and short-term borrowing arrangements as of December 31, 2025.

If certain conditions are satisfied, the Amended Credit Agreement also provides for incremental revolving and term loan facilities, at the request of the Company and subject to lender approval, not to exceed (i) the greater of (a) $172.5 million and (b) 50% of the Company's Consolidated EBITDA, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, on a pro forma basis, does not exceed 2.25x , plus, (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

If certain conditions are satisfied, the Amended Credit Agreement also provides for incremental revolving and term loan facilities, at the request of the Company and subject to lender approval, not to exceed (i) the greater of (a) $172.5 million and (b) 50% of the Company's Consolidated EBITDA, plus (ii) additional amounts so long as both immediately before and after giving effect to such incremental facilities the Company’s Consolidated Senior Secured Debt to Consolidated EBITDA ratio, as defined in the Amended Credit Agreement, on a pro forma basis, does not exceed 2.25 to 1.00 , plus, (iii) the aggregate amounts of any voluntary repayments of term loans, if any, and aggregate amount of voluntary repayments of revolving credit facilities that are accompanied by a corresponding termination or reduction of revolving credit commitments.

Liquidity Restrictions

1 unchanged sentence

Restricted cash consists of cash equivalents held as assets for a supplemental employment retention agreement for a former executive.

Indefinite Reinvestment of Foreign Earnings

Indefinite Reinvestment of Historical Foreign Earnings

We earn a significant portion of our income from subsidiaries located in countries outside the United States.

2 unchanged sentences

As part of our business strategies, we have determined that the undistributed historical earnings of our foreign operations for which we have not already recorded taxes will be deemed indefinitely reinvested outside of the United States.

Our plans to indefinitely reinvest certain earnings are supported by projected working capital and long-term capital requirements in each foreign subsidiary location in which the earnings are generated.

We have analyzed our domestic operation's cash repatriation strategies, projected cash flows, projected working capital and liquidity, and the expected availability within the debt or equity markets to provide funds for our domestic needs.

Based on our analysis, we believe we have the ability to indefinitely reinvest our historical foreign earnings that would be subject to tax.

If our expectations change based on future developments such that some or all of the undistributed earnings of our foreign subsidiaries may be remitted to the United States in the foreseeable future, we will be required to recognize deferred tax expense and liabilities and pay additional taxes on any amounts that we are unable to repatriate in a tax-free manner.

Liquidity Requirements

Our short-term liquidity requirements include:

Our liquidity requirements include:

funding for debt service (including finance leases);

5 unchanged sentences

stock repurchases;

and business development activities.

Long-term liquidity requirements include:

payments on long-term debt (including finance leases);

operating lease obligations;

payments of deferred compensation;

stock repurchases;

business development activities;

and payments of other third-party obligations.

As of December 31, 2025, our debt obligations consisted of lines of credit and short-term borrowing arrangements of subsidiaries and notes payable, which totaled $65.6 million.

In addition, our finance lease obligations and sale-leaseback financings were $48.4 million.

In addition, our finance lease obligations were $63.5 million.

Senior Secured Credit Facility

As of December 31, 2024, there was no balance outstanding under our Senior Secured Credit Facility.

As of December 31, 2023, there was a $59.0 million balance outstanding under our Senior Secured Credit Facility.

As of December 31, 2025 and 2024, there was no balance outstanding under our Senior Secured Credit Facility.

Other debt includes lines of credit and short-term borrowing arrangements of subsidiaries and notes payable, the significant components of which are described below.

14 unchanged sentences

Based on the operating leases outstanding at December 31, 2025, $98.8 million of minimum lease payments will be required during 2026.

In addition, we had finance lease obligations and sale-leaseback financings of $48.4 million and $57.6 million as of December 31, 2024 and 2023, respectively.

In addition, we had finance lease obligations of $63.5 million and $48.4 million as of December 31, 2025 and 2024, respectively.

Capital Expenditures

3 unchanged sentences

(1) capacity expansion at institutions to support enrollment growth;

(2) new campuses for institutions in our existing markets;

(2) new programs and campuses for institutions in our existing markets;

and (3) information technology to increase efficiency and controls.

4 unchanged sentences

Our total capital expenditures, excluding receipts from the sale of subsidiaries and property and equipment, were $103.0 million, $71.9 million and $56.5 million during 2025, 2024 and 2023, respectively.

The 43% increase in capital expenditures for 2025 compared to 2024 was primarily driven by the purchase of land and construction costs for new campuses in Peru as well as an increase in equipment purchases and campus improvements in Mexico.

The 27% increase in capital expenditures for 2024 compared to 2023 was primarily due to the purchase of a parcel of land and a new campus construction project that began in 2024, combined with higher spending in Mexico for campus consolidation related to the implementation of a real estate optimization plan.

The 6% increase in capital expenditures for 2023 compared to 2022 was primarily due to investment in equipment for health science programs in Peru as well as campus expansion and digital innovation in Mexico.

Stock Repurchase Program

On September 13, 2024, the Company announced that its Board of Directors had approved a new stock repurchase program to acquire up to $100 million of the Company’s common stock .

The Company’s repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

On October 30, 2025, the Company announced that its Board of Directors had approved a $150 million increase to the authorization for the Company’s stock repurchase program.

As of December 31, 2025, the dollar value of shares yet to be repurchased under this stock repurchase program was $30.9 million .

On February 19, 2026, the Company announced that its Board of Directors had approved an additional $150 million increase to the existing authorization for the Company’s stock repurchase program.

After giving effect to this new authorization and taking into account the cumulative repurchases through December 31, 2025, the Company may repurchase up to $180.9 million of its common stock under its stock repurchase program, which has no fixed expiration date.

The Company intends to finance the repurchases with free cash flow, excess cash and liquidity on-hand, including available capacity under its Revolving Credit Facility.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations promulgated under the Exchange Act.

Repurchases may be effected pursuant to a trading plan adopted in accordance with Rule 10b5-1 of the Exchange Act.

The Company’s Board of Directors will review the share repurchase program periodically and may authorize adjustment of its terms and size or suspend or discontinue the program.

As of December 31, 2024, the approximate dollar value of shares yet to be purchased under this stock repurchase program was $98.0 million.

The Company intends to finance the repurchases with free cash flow, excess cash and liquidity on-hand, including available capacity under its Revolving Credit Facility.

In the consolidated statements of cash flows, the changes in operating assets and liabilities are presented excluding the effects of exchange rate changes and reclassifications, as these effects do not represent operating cash flows.

12 unchanged sentences

Operating activities

Cash provided by operating activities increased by $133.5 million to $366.2 million for 2025, compared to $232.7 million for 2024.

This increase in operating cash flows was attributable to:

(1) higher operating income combined with the net effect of changes in operating assets and liabilities increased operating cash flows by $94.5 million compared to 2024;

(2) lower cash paid for taxes of $31.4 million, from $194.8 million in 2024 to $163.4 million in 2025, which was primarily driven by taxes paid during 2024 as a result of the distribution of certain intercompany loans;

and (3) lower cash paid for interest of $7.6 million, from $16.6 million in 2024 to $9.0 million in 2025, mostly due to lower average debt balances in 2025 compared to 2024.

Investing activities

Cash used in investing activities increased by $45.1 million to $(102.6) million for 2025 from $(57.5) million for 2024.

This increase in investing cash outflows was primarily attributable to:

(1) higher capital expenditures of $31.1 million compared to 2024, mainly driven by the purchase of land and construction costs for new campuses in 2025, and (2) a $17.7 million decrease in receipts from the sale of property and equipment in 2025 compared to 2024, primarily related to the sale of certain real estate in the United States and Mexico during 2024.

This increase was partially offset by a $3.7 million year-over-year change in

investing cash flows due to run-out activity from previously sold discontinued operations, primarily related to a payment made in 2024 to settle an indemnification claim in connection with the 2021 sale of the Walden Group.

Financing activities

Cash used in financing activities increased by $55.6 million to $(222.5) million for 2025 from $(166.9) million for 2024.

This increase in financing cash outflows was primarily attributable to an increase in common stock repurchases of $113.1 million during 2025.

This increase was partially offset by $57.5 million of lower net payments of long-term debt during 2025 as compared to 2024.

Comparison of Cash Flows for the Year Ended December 31, 2024 to the Year Ended December 31, 2023

Operating activities

Cash provided by operating activities decreased by $18.1 million to $232.7 million for 2024, compared to $250.8 million for 2023.

3 unchanged sentences

Investing activities

Cash used in investing activities increased by $5.6 million to $(57.5) million for 2024 from $(51.9) million for 2023.

Cash used in investing activities increased by $5.6 million to $(57.5) million for 2024 from $(51.9) million in 2023.

This increase in investing cash outflows was primarily attributable to higher capital expenditures of $15.4 million compared to 2023, mainly driven by the purchase of land and construction costs for a new campus in 2024.

7 unchanged sentences

Other items accounted for the remaining difference of $3.0 million.

Comparison of Cash Flows for the Year Ended December 31, 2023 to the Year Ended December 31, 2022

Operating activities

Cash provided by operating activities increased by $72.6 million to $250.8 million for 2023, compared to $178.2 million for 2022.

This increase in operating cash flows was attributable to higher operating income, combined with the net effect of changes in operating assets and liabilities, which increased operating cash by $93.6 million compared to 2022.

This increase in cash inflows was offset in part by an increase in cash paid for taxes of $17.5 million, from $153.8 million in 2022 to $171.3 million in 2023, which was a result of higher tax prepayments during the 2023 period in Mexico and Peru, partially offset by tax refunds in the United States.

Additionally, cash paid for interest increased by $3.5 million, from $16.8 million in 2022 to $20.3 million in 2023, attributable to higher average debt balances in 2023.

Investing activities

Cash from investing activities decreased by $82.2 million to a cash outflow of $(51.9) million for 2023 from a cash inflow of $30.3 million in 2022.

This decrease in investing cash flows was attributable to lower cash receipts from the sales of discontinued operations and property and equipment of $78.9 million, from $83.4 million, net, during 2022 (primarily related to the receipt of the escrow receivable in connection with the 2021 sale of Walden University and the collection of certain receivables from the 2021 sale of our Brazilian operations) to $4.5 million, net, in 2023 (primarily related to the receipt of an earnout receivable from the sale of our Brazilian operations).

Additionally, cash used for capital expenditures increased by $3.4 million compared to 2022, mainly driven by investment in equipment for health science programs in Peru as well as campus expansion and digital innovation in Mexico.

Other items accounted for the remaining difference of $0.1 million.

Financing activities

Cash used in financing activities decreased by $259.7 million to $(201.9) million for 2023 from $(461.6) million for 2022.

This decrease in financing cash outflows was attributable to the year-over-year effect of $282.2 million of payments made during 2022 for common stock repurchases.

In addition, payments of special dividends and distributions were lower by $140.7 million, from $253.2 million in 2022 to $112.5 million in 2023.

These decreases in financing cash outflows were partially offset by:

(1) higher net payments of long-term debt during 2023 as compared to 2022, for a change of $152.2 million;

(2) lower proceeds from the exercise of common stock options of $10.9 million;

and (3) payment of debt issuance costs of $1.3 million during 2023 in connection with the amendment of our Senior Secured Credit Facility.

Other items accounted for the remaining difference of $1.2 million.

Critical Accounting Policies and Estimates

17 unchanged sentences

This ASU requires entities to calculate goodwill impairment as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

Under the updated guidance, the Company continues to have the option of first performing a qualitative goodwill impairment assessment (i.e., step zero) in order to determine if a quantitative impairment test is necessary.

Under this guidance, the Company continues to have the option of first performing a qualitative goodwill impairment assessment (i.e., step zero) in order to determine if a quantitative impairment test is necessary.

A reporting unit is defined as a component of an operating segment for which discrete financial information is available and regularly reviewed by management of the segment.

54 unchanged sentences

See Note 12, Income Taxes, in our consolidated financial statements included elsewhere in this Form 10-K for details of our deferred taxes and tax contingencies.

Indefinite Reinvestment of Foreign Earnings

Indefinite Reinvestment of Historical Foreign Earnings

We earn substantially all of our income from subsidiaries located in countries outside the United States.

4 unchanged sentences

Revenue Recognition

Our revenues primarily consist of tuition and educational service revenues.

We also generate other revenues from student fees and other education-related activities.

Our revenues primarily consist of tuition revenues from enrolled students.

We also generate other revenues from student fees, short courses, and other education-related activities.

These other revenues are less material to our overall financial results and have a tendency to trend with tuition revenues.

8 unchanged sentences

Share-Based Compensation

We have granted restricted stock, restricted stock units and performance awards for which the vesting is based on our annual performance metrics.

We have granted performance-based restricted stock units for which the vesting is based on our annual performance metrics.

For interim periods, we use our year-to-date actual results, financial forecasts, and other available information to estimate the probability of the award vesting based on the performance metrics.

4 unchanged sentences

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 7. Management’s Discussion and Analysis