What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-07-30 · 204 added, 156 removed, 694 unchanged (34% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

December 31, 2024 June 30, 2025

December 31, 2024 September 30, 2025

Current assets:

3 unchanged sentences

Income taxes receivable — 2,433

Assets held for sale — 2,200

Other current assets 44,793 54,266

22 unchanged sentences

32,000,000 shares authorized;

24,502,385 and 23,948,762 shares issued and outstanding at December 31, 2024 and June 30, 2025, respectively

24,502,385 and 23,504,950 shares issued and outstanding at December 31, 2024 and September 30, 2025, respectively

Additional paid-in capital 1,532,414 1,467,401

7 unchanged sentences

(in thousands, except per share data)

For the three months ended June 30, For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

19 unchanged sentences

(in thousands)

For the three months ended June 30, For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

8 unchanged sentences

(in thousands, except share data)

For the three months ended June 30, 2024

For the three months ended September 30, 2024

Common Stock Additional

4 unchanged sentences

Shares Par Value

Balance at March 31, 2024 24,607,939 $ 246 $ 1,519,291 $ 183,800 $ ( 60,754 ) $ 1,642,583

Balance at June 30, 2024 24,622,994 $ 246 $ 1,526,037 $ 198,908 $ ( 47,091 ) $ 1,678,100

Stock-based compensation — — 6,887 — — 6,887

Exercise of stock options 2,628 — 173 — — 173

Issuance of restricted stock, net 12,427 — — — — —

Repurchase of common stock ( 53,555 ) — ( 3,330 ) ( 1,670 ) — ( 5,000 )

Common stock dividends ($ 0.60 per share)

3 unchanged sentences

Net income — — — 27,748 — 27,748

Balance at June 30, 2024 24,622,994 $ 246 $ 1,526,037 $ 198,908 $ ( 47,091 ) $ 1,678,100

For the three months ended June 30, 2025

Balance at September 30, 2024 24,569,439 $ 246 $ 1,529,594 $ 210,194 $ ( 23,238 ) $ 1,716,796

For the three months ended September 30, 2025

Common Stock Additional

4 unchanged sentences

Shares Par Value

Balance at March 31, 2025 24,261,716 $ 243 $ 1,502,852 $ 225,440 $ ( 85,221 ) $ 1,643,314

Balance at June 30, 2025 23,948,762 $ 239 $ 1,489,271 $ 236,076 $ ( 58,869 ) $ 1,666,717

Stock-based compensation — — 5,818 50 — 5,868

7 unchanged sentences

Net income — — — 26,630 — 26,630

Balance at June 30, 2025 23,948,762 $ 239 $ 1,489,271 $ 236,076 $ ( 58,869 ) $ 1,666,717

Balance at September 30, 2025 23,504,950 $ 235 $ 1,467,401 $ 241,098 $ ( 52,631 ) $ 1,656,103

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except share data)

For the six months ended June 30, 2024

For the nine months ended September 30, 2024

Common Stock Additional

8 unchanged sentences

Issuance of restricted stock, net 211,314 2 ( 3,833 ) — — ( 3,831 )

Repurchase of common stock ( 53,555 ) — ( 3,330 ) ( 1,670 ) — ( 5,000 )

Common stock dividends ($ 1.80 per share)

3 unchanged sentences

Net income — — — 87,348 — 87,348

Balance at June 30, 2024 24,622,994 $ 246 $ 1,526,037 $ 198,908 $ ( 47,091 ) $ 1,678,100

For the six months ended June 30, 2025

Balance at September 30, 2024 24,569,439 $ 246 $ 1,529,594 $ 210,194 $ ( 23,238 ) $ 1,716,796

For the nine months ended September 30, 2025

Common Stock Additional

12 unchanged sentences

Foreign currency translation adjustment — — — — 36,153 36,153

Unrealized losses on marketable securities, net of tax — — — — ( 219 ) ( 219 )

Net income — — — 88,705 — 88,705

Balance at June 30, 2025 23,948,762 $ 239 $ 1,489,271 $ 236,076 $ ( 58,869 ) $ 1,666,717

Balance at September 30, 2025 23,504,950 $ 235 $ 1,467,401 $ 241,098 $ ( 52,631 ) $ 1,656,103

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

For the six months ended June 30,

For the nine months ended September 30,

Cash flows from operating activities:

26 unchanged sentences

Common dividends paid ( 44,262 ) ( 43,387 )

Payments on long-term debt ( 61,275 ) —

Net payments for stock awards ( 3,514 ) ( 9,720 )

2 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents, and restricted cash 1,495 2,815

Net increase (decrease) in cash, cash equivalents, and restricted cash 62,167 ( 1,673 )

Net increase in cash, cash equivalents, and restricted cash 25,696 13,855

Cash, cash equivalents, and restricted cash — beginning of period 181,925 146,656

19 unchanged sentences

All intercompany accounts and transactions have been eliminated in the consolidated financial statements.

All information as of, and for the three and six months ended, June 30, 2024 and 2025 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated financial position, results of operations, and cash flows of the Company.

All information as of, and for the three and nine months ended, September 30, 2024 and 2025 is unaudited but, in the opinion of management, contains all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the condensed consolidated statements of financial position, results of operations, and cash flows of the Company.

The condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited consolidated financial statements at that date.

Certain amounts in the prior period have been reclassified to conform to the current period’s presentation.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted.

These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for the full fiscal year.

Below is a description of the nature of the costs included in the Company’s operating expense categories.

6 unchanged sentences

General and administration expense also includes the facilities occupancy and other related costs attributable to such functions.

Restructuring costs include severance and other personnel-related expenses from voluntary and involuntary employee terminations, asset impairment charges, gains on sale of real estate and early termination of leased facilities, and other costs associated with the Company’s restructuring activities.

Restructuring costs include severance and other personnel-related expenses from voluntary and involuntary employee terminations, asset impairment charges, gains/losses on sale of real estate and early termination of leased facilities, and other costs associated with the Company’s restructuring activities.

See Note 4 for additional information.

2 unchanged sentences

The financial statements of its foreign subsidiaries are maintained in their functional currencies.

The functional currency of each of the foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business.

statements of foreign subsidiaries are translated into USD using the exchange rates applicable to the dates of the financial statements.

The functional currency of each

of the foreign subsidiaries is the currency of the economic environment in which the subsidiary primarily does business.

Financial statements of foreign subsidiaries are translated into USD using the exchange rates applicable to the dates of the financial statements.

Assets and liabilities are translated into USD using the period-end spot foreign exchange rates.

8 unchanged sentences

higher education institution during the academic term.

The Company had approximately $ 1.8 million and $ 2.1 million of these unpaid obligations as of December 31, 2024 and June 30, 2025, respectively.

The Company had approximately $ 1.8 million and $ 1.9 million of these unpaid obligations as of December 31, 2024 and September 30, 2025, respectively.

In Australia and New Zealand, advance tuition payments from international students are required to be restricted until a student commences his or her course.

In addition, a portion of tuition prepayments from students enrolled in a vocational education and training program are held in trust by a third-party law firm to adhere to tuition protection requirements.

As of December 31, 2024 and June 30, 2025, the Company had approximately $ 7.3 million and $ 8.8 million, respectively, of restricted cash related to these requirements in Australia and New Zealand.

As of December 31, 2024 and September 30, 2025, the Company had approximately $ 7.3 million and $ 6.6 million, respectively, of restricted cash related to these requirements in Australia and New Zealand.

These balances are recorded as restricted cash and included in other current assets in the unaudited condensed consolidated balance sheets.

1 unchanged sentence

The Company holds these funds in an interest-bearing account, which is included in other assets in the unaudited condensed consolidated balance sheets.

The following table illustrates the reconciliation of cash, cash equivalents, and restricted cash shown in the unaudited condensed consolidated statements of cash flows as of June 30, 2024 and 2025 (in thousands):

As of June 30,

As of September 30,

Cash and cash equivalents $ 195,889 $ 151,460

15 unchanged sentences

The amount of an impairment related to a credit loss, or securities that management intends to sell before recovery, is recognized in earnings.

The amount of an

impairment on debt securities related to other factors is recorded consistent with changes in the fair value of all other available-for-sale securities as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

The amount of an impairment on debt securities related to other factors is recorded consistent with changes in the fair value of all other available-for-sale securities as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

The cost of securities sold is based on the specific identification method.

10 unchanged sentences

In the event that current collection trends differ from historical trends, an adjustment is made to the allowance for credit losses and bad debt expense.

The Company’s current tuition receivable and allowance for credit losses were as follows as of December 31, 2024 and June 30, 2025 (in thousands):

December 31, 2024 June 30, 2025

The Company’s current tuition receivable and allowance for credit losses were as follows as of December 31, 2024 and September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Tuition receivable $ 127,012 $ 164,649

1 unchanged sentence

Tuition receivable, net $ 76,127 $ 114,882

An additional $ 7.0 million and $ 6.4 million of tuition receivable, net, are included in other assets as of December 31, 2024 and June 30, 2025, respectively, because these amounts are expected to be collected after 12 months.

The following table illustrates changes in the Company’s current and non-current allowance for credit losses for the three and six months ended June 30, 2024 and 2025 (in thousands).

For the three months ended June 30, For the six months ended June 30,

An additional $ 7.0 million and $ 6.4 million of tuition receivable, net, are included in other assets as of December 31, 2024 and September 30, 2025, respectively, because these amounts are expected to be collected after 12 months.

The following table illustrates changes in the Company’s current and non-current allowance for credit losses for the three and nine months ended September 30, 2024 and 2025 (in thousands).

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

3 unchanged sentences

Allowance for credit losses, end of period $ 45,536 $ 45,697 $ 45,536 $ 45,697

Assets Held for Sale

The Company classifies assets and liabilities as held for sale (a “disposal group”) when management, having the authority to approve the action, commits to a plan to sell the disposal group, the sale is probable to be completed within one year, and the disposal group is available for immediate sale in its present condition.

The Company also considers whether an active program to locate a buyer has been initiated, whether the disposal group is marketed actively for sale at a price that is reasonable in relation to its current fair value, and whether actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The Company initially measures a disposal group that is classified as held for sale at the lower of its carrying amount or fair value less costs to sell.

Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met.

Gains are not recognized until the date of sale.

Assets are not depreciated or amortized while they are classified as held for sale.

Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group as assets held for sale and liabilities held for sale in its unaudited condensed consolidated balance sheets.

Over the last several years, the Company has been evaluating its owned and leased real estate portfolio to identify underutilized facilities to either downsize or exit.

One facility identified is an owned U.S.

Higher Education campus, which the Company has been marketing for sale and expects to close within the next twelve months.

The long-lived assets being marketed for sale consist of land, buildings, and building improvements.

The Company determined that it met all of the criteria to classify these assets as held for sale as of September 30, 2025.

The Company recorded a $ 0.3 million loss related to the assets classified as held for sale in the third quarter of 2025 as the fair value of the assets, less the estimated costs to sell, was less than the carrying amount of the net assets.

Fair value was determined based upon a third-party appraisal of the property.

The loss is included in Restructuring costs on the unaudited condensed consolidated statements of income.

Goodwill and Intangible Assets

5 unchanged sentences

Authorized Stock

The Company has authorized 32,000,000 shares of common stock, par value $ 0.01 , of which 24,502,385 and 23,948,762 shares

were issued and outstanding as of December 31, 2024 and June 30, 2025, respectively.

The Company has authorized 32,000,000 shares of common stock, par value $ 0.01 , of which 24,502,385 and 23,504,950 shares were issued and outstanding as of December 31, 2024 and September 30, 2025, respectively.

The Company also has authorized 8,000,000 shares of preferred stock, none of which is issued or outstanding.

Before any preferred stock may be issued, the Board of Directors must establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, and the terms or conditions of the redemption of the preferred stock.

In April 2025, the Company’s Board of Directors declared a regular, quarterly cash dividend of $ 0.60 per share of common stock.

The dividend was paid on June 2, 2025.

In July 2025, the Company’s Board of Directors declared a regular, quarterly cash dividend of $ 0.60 per share of common stock.

The dividend was paid on September 15, 2025.

Net Income Per Share

5 unchanged sentences

Stock awards are excluded from the computation of diluted earnings per share when their effect would be anti-dilutive.

Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three and six months ended June 30, 2024 and 2025 (in thousands):

For the three months ended June 30, For the six months ended June 30,

Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2024 and 2025 (in thousands):

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

5 unchanged sentences

Comprehensive Income

Comprehensive income includes net income and all changes in the Company’s equity during a period from non-owner sources, which for the Company consists of unrealized gains and losses on available-for-sale marketable securities, net of tax, and foreign currency translation adjustments.

As of December 31, 2024 and June 30, 2025, the balance of accumulated other comprehensive loss was $ 88.6 million, net of tax of $ 0.1 million, and $ 58.9 million, net of tax of $ 0.1 million, respectively.

There were no reclassifications out of accumulated other comprehensive income (loss) to net income for the three and six months ended June 30, 2024 and 2025.

Comprehensive income includes net income and all changes in the Company’s equity during a period from non-owner sources, which for the Company consists of foreign currency translation adjustments and unrealized gains and losses on available-for-sale marketable securities, net of tax.

As of December 31, 2024 and September 30, 2025, the balance of accumulated other comprehensive loss was $ 88.6 million, net of tax of $ 0.1 million, and $ 52.6 million, respectively.

During the three and nine months ended September 30, 2025, approximately $ 0.2 million, net of tax of $ 0.1 million, of unrealized gains (losses) on marketable securities was reclassified out of accumulated other comprehensive income (loss) to Other income (expense) on the unaudited consolidated statements of income.

There were no reclassifications out of accumulated other comprehensive income (loss) to net income for the three and nine months ended September 30, 2024.

Use of Estimates

6 unchanged sentences

Further, the standard requires certain disclosures of state versus federal income tax expense and taxes paid.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

Early adoption is permitted, and the amendments should be applied on a prospective basis although retrospective application is permitted.

Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statement disclosures.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and will be adopted by the Company in its Form 10-K for the year ending December 31, 2025.

ASU 2023-09 is expected to result in expanded tax rate reconciliations and income taxes paid disclosures but is not anticipated to otherwise impact the Company’s consolidated financial statements.

The Company will apply the amendments retrospectively.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

4 unchanged sentences

The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

ASU 2025-06 eliminates the existing guidance that categorizes software development into distinct project stages and replaces it with a recognition threshold based on management’s authorization and commitment to fund the project, along with the probability of completion and intended use.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual periods.

Early adoption is permitted, and the amendments can be applied prospectively or retrospectively.

The Company is currently evaluating the impact that ASU 2025-06 will have on its consolidated financial statements and related disclosures.

Other ASUs recently issued by the FASB but not yet effective are not expected to have a material effect on the Company’s consolidated financial statements.

4 unchanged sentences

Torrens University offers the majority of its education programs on a trimester system having three primary academic terms, which all occur within the calendar year.

The following table presents the Company’s revenues from contracts with customers disaggregated by material revenue category for the three and six months ended June 30, 2024 and 2025 (in thousands):

For the three months ended June 30, For the six months ended June 30,

The following table presents the Company’s revenues from contracts with customers disaggregated by material revenue category for the three and nine months ended September 30, 2024 and 2025 (in thousands):

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

21 unchanged sentences

Any cash received prior to the start of an academic term or program is recorded as a contract liability.

Some students may be eligible for scholarship awards, the estimated value of which will be realized in the future and is deducted from revenue when earned, based on historical student attendance and completion

Contract liabilities are recorded as a current or long-term liability in the unaudited condensed consolidated balance sheets based on when the benefits are expected to be realized.

10 unchanged sentences

The Company defers the value of the related performance obligation associated with the credits estimated to be redeemed in the future based on the underlying revenue transactions that result in progress by the student toward earning the benefit.

The Company’s estimate of the benefits that will be redeemed in the future is based on its historical experience of student persistence toward completion of a course of study within this program and similar programs.

The Company’s estimate of the benefits that will be redeemed in the future is based on its historical experience of student persistence toward completion of a

course of study within this program and similar programs.

Each quarter, the Company assesses its assumptions underlying these estimates, and to date, any adjustments to the estimates have not been material.

2 unchanged sentences

The table below presents activity in the contract liability related to the Learn and Earn Scholarship (in thousands):

For the six months ended June 30,

For the nine months ended September 30,

Balance at beginning of period $ 44,480 $ 37,118

7 unchanged sentences

Each quarter, the Company assesses its assumptions underlying these estimates.

As of December 31, 2024 and June 30, 2025, the Company had $ 14.7 million and $ 16.3 million, respectively, of contract liabilities in the unaudited condensed consolidated balance sheets related to tuition cap benefits that are estimated to be redeemed in the future.

As of December 31, 2024 and September 30, 2025, the Company had $ 14.7 million and $ 17.1 million, respectively, of contract liabilities in the unaudited condensed consolidated balance sheets related to tuition cap benefits that are estimated to be redeemed in the future.

The amount estimated to be redeemed in the next 12 months is $ 6.8 million and is included as a current contract liability in the unaudited condensed consolidated balance sheets.

4 unchanged sentences

The Company incurs severance and other employee separation costs related to employee terminations that are not tied to a formal restructuring plan.

The Company incurred $ 1.0 million and $ 1.3 million of severance and other employee separation charges during the three and six months ended June 30, 2024, respectively, and $ 1.3 million and $ 2.8 million during the three and six months ended June 30, 2025, respectively, related to the elimination of certain positions.

The Company incurred $ 0.6 million and $ 1.9 million of severance and other employee separation charges during the three and nine months ended September 30, 2024, respectively, and $ 8.1 million and $ 10.9 million during the three and nine months ended September 30, 2025, respectively, related to the elimination of certain positions.

These severance and other employee separation charges are included in Restructuring costs on the unaudited condensed consolidated statements of income.

The following details the changes in the Company’s severance and other employee separation costs restructuring liabilities during the six months ended June 30, 2024 and 2025 (in thousands):

The following details the changes in the Company’s severance and other employee separation costs restructuring liabilities during the nine months ended September 30, 2024 and 2025 (in thousands):

Severance Restructuring Liability

2 unchanged sentences

Payments ( 2,593 )

Balance as of June 30, 2024

Balance as of September 30, 2024

Balance as of December 31, 2024 (1)

1 unchanged sentence

Payments ( 10,459 )

Balance as of June 30, 2025 (1)

Balance as of September 30, 2025 (1)

____________________________________

1 unchanged sentence

The Company evaluates its owned and leased real estate portfolio on an ongoing basis, which has resulted in the consolidation and sale of underutilized facilities.

The Company recorded approximately $ 0.7 million and $ 0.8 million of right-of-use lease asset charges during the three and six months ended June 30, 2025, respectively, related to facilities that were consolidated during the period.

The Company also recorded fixed asset impairment charges of approximately $ 0.7 million and $ 0.8 million during the three and six months ended June 30, 2025, respectively.

There were no right-of-use lease asset charges or fixed asset impairment charges during the three and six months ended June 30, 2024.

The Company recorded a net benefit related to the early termination and related extinguishment of lease liabilities of approximately $ 6.2 million during the six months ended June 30, 2024.

These right-of-use lease asset and fixed asset impairment charges and net benefits from early lease terminations are included in Restructuring costs on the unaudited condensed consolidated statements of income.

The Company recorded approximately $ 3.9 million and $ 4.7 million of right-of-use lease asset charges during the three and nine months ended September 30, 2025, respectively, related to facilities that were consolidated during the period.

The Company also recorded fixed asset impairment charges of approximately $ 1.5 million and $ 2.3 million during the three and nine months ended September 30, 2025, respectively.

As stated in Note 2, the Company also recorded a $ 0.3 million loss related to assets classified as held for sale during the third quarter of 2025.

There were no right-of-use lease asset charges or fixed asset impairment charges during the three and nine months ended September 30, 2024.

The Company recorded a net benefit related to the early termination and related extinguishment of lease liabilities of approximately $ 6.2 million during the nine months ended September 30, 2024.

These right-of-use lease asset and fixed asset impairment charges, loss on assets classified as held for sale, and net benefits from early lease terminations are included in Restructuring costs on the unaudited condensed consolidated statements of income.

Marketable Securities

4 unchanged sentences

Total $ 500 $ — $ ( 1 ) $ 499

The Company did not have any marketable securities classified as available-for-sale as of June 30, 2025.

The following is a summary of held-to-maturity securities, which are carried at amortized cost, as of December 31, 2024 and June 30, 2025 (in thousands):

The Company did not have any marketable securities classified as available-for-sale as of September 30, 2025.

The following is a summary of held-to-maturity securities, which are carried at amortized cost, as of December 31, 2024 and September 30, 2025 (in thousands):

Amortized Cost Gross Unrealized Gain Gross Unrealized (Losses) Estimated Fair Value

4 unchanged sentences

Total $ 61,431 $ 18 $ ( 26 ) $ 61,423

Balance as of June 30, 2025

Balance as of September 30, 2025

Term deposits $ 16,206 $ — $ — $ 16,206

2 unchanged sentences

Total $ 31,178 $ 75 $ — $ 31,253

The unrealized gains and losses on the Company’s investments in marketable securities as of December 31, 2024 and June 30, 2025 were caused by changes in market values primarily due to interest rate changes.

As of June 30, 2025, there were no securities which were in an unrealized loss position for a period longer than twelve months.

The unrealized gains and losses on the Company’s investments in marketable securities as of December 31, 2024 and September 30, 2025 were caused by changes in market values primarily due to interest rate changes.

As of September 30, 2025, there were no securities which were in an unrealized loss position for a period longer than twelve months.

The Company does not intend to sell these securities, and it is not more likely than not that the Company will be required to sell these securities prior to the recovery of their amortized cost basis, which may be at maturity.

As such, no impairment charges were recorded during the three and six months ended June 30, 2024 and 2025.

As such, no impairment charges were recorded during the three and nine months ended September 30, 2024 and 2025.

The Company has no allowance for credit losses related to its marketable securities as all investments are in investment grade securities.

The following table summarizes the maturities of the Company’s marketable securities as of December 31, 2024 and June 30, 2025 (in thousands):

December 31, 2024 June 30, 2025

The following table summarizes the maturities of the Company’s marketable securities as of December 31, 2024 and September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Available-for-sale securities Held-to-maturity securities Available-for-sale securities Held-to-maturity securities

2 unchanged sentences

Total $ 499 $ 61,431 $ — $ 31,178

The following table summarizes the purchases of and proceeds from marketable securities for the six months ended June 30, 2024 and 2025 (in thousands):

For the six months ended June 30,

The following table summarizes the purchases of and proceeds from marketable securities for the nine months ended September 30, 2024 and 2025 (in thousands):

For the nine months ended September 30,

Purchases of marketable securities

5 unchanged sentences

Total proceeds from marketable securities $ 29,525 $ 57,575

The Company did not sell any available-for-sale or held-to-maturity securities during the three and six months ended June 30, 2024 and 2025.

The Company did not record any gross realized gains or losses in net income during the three and six months ended June 30, 2024 and 2025.

The Company did not sell any available-for-sale or held-to-maturity securities during the three and nine months ended September 30, 2024 and 2025.

The Company did not record any gross realized gains or losses in net income during the three and nine months ended September 30, 2024 and 2025.

Fair Value Measurement

11 unchanged sentences

Total assets at fair value on a recurring basis $ 92,915 $ 92,416 $ 499 $ —

Assets measured at fair value on a recurring basis consist of the following as of June 30, 2025 (in thousands):

Assets measured at fair value on a recurring basis consist of the following as of September 30, 2025 (in thousands):

Fair Value Measurements at Reporting Date Using

June 30, 2025 Quoted Prices in

September 30, 2025 Quoted Prices in

Active Markets

7 unchanged sentences

• Money market funds – Classified in Level 1 is excess cash the Company holds in money market funds, which are included in cash and cash equivalents in the accompanying unaudited condensed consolidated balance sheets.

The Company’s other cash and cash equivalents as of December 31, 2024 and June 30, 2025 approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments.

The Company’s other cash and cash equivalents as of December 31, 2024 and September 30, 2025 approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments.

• Available-for-sale securities – Classified in Level 2 and valued using readily available pricing sources for comparable instruments utilizing observable inputs from active markets.

3 unchanged sentences

treasury securities, and corporate debt securities, are not included in the tables above as they are carried at amortized cost and not measured at fair value on a recurring basis.

The estimated fair value of the Company’s held-to-maturity marketable securities as of December 31, 2024 and June 30, 2025 was $ 61.4 million and $ 46.4 million, respectively.

The estimated fair value of the Company’s held-to-maturity marketable securities as of December 31, 2024 and September 30, 2025 was $ 61.4 million and $ 31.3 million, respectively.

These securities are valued using readily available pricing sources for comparable instruments utilizing observable inputs from active markets and are classified in Level 2 of the fair value hierarchy.

The Company did not change its valuation techniques associated with recurring fair value measurements from prior periods and did not transfer assets or liabilities between levels of the fair value hierarchy during the six months ended June 30, 2024 and 2025.

Goodwill and Intangible Assets

The following table presents changes in the carrying value of goodwill by segment for the six months ended June 30, 2024 (in thousands):

The following table presents changes in the carrying value of goodwill by segment for the nine months ended September 30, 2024 (in thousands):

Higher Education Australia /

4 unchanged sentences

Currency translation adjustments — 8,711 — 8,711

Balance as of June 30, 2024 $ 632,075 $ 508,887 $ 100,000 $ 1,240,962

The following table presents changes in the carrying value of goodwill by segment for the six months ended June 30, 2025 (in thousands):

Balance as of September 30, 2024 $ 632,075 $ 528,524 $ 100,000 $ 1,260,599

The following table presents changes in the carrying value of goodwill by segment for the nine months ended September 30, 2025 (in thousands):

Higher Education Australia /

4 unchanged sentences

Currency translation adjustments — 30,182 — 30,182

Balance as of June 30, 2025 $ 632,075 $ 499,030 $ 100,000 $ 1,231,105

Balance as of September 30, 2025 $ 632,075 $ 504,990 $ 100,000 $ 1,237,065

The Company assesses goodwill at least annually for impairment during the fourth quarter, or more frequently if events occur or circumstances change between annual tests that would more likely than not reduce the fair value of the respective reporting unit below its carrying amount.

No events or circumstances occurred in the three and six months ended June 30, 2025 to indicate an impairment to goodwill at any of the Company’s segments.

There were no impairment charges related to goodwill recorded during the three and six months ended June 30, 2024 and 2025.

No events or circumstances occurred in the three and nine months ended September 30, 2025 to indicate an impairment to goodwill at any of the Company’s segments.

There were no impairment charges related to goodwill recorded during the three and nine months ended September 30, 2024 and 2025.

Intangible Assets

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The following table presents changes in the carrying value of indefinite-lived intangible assets (in thousands):

For the six months ended June 30,

For the nine months ended September 30,

Balance at beginning of period $ 251,623 $ 245,098

Additions — —

Impairments ( 800 ) —

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In the second quarter of 2024, the Company recorded a $ 0.8 million indefinite-lived intangible asset impairment charge, which is included in Restructuring costs on the unaudited condensed consolidated statements of income.

No events or circumstances occurred in the six months ended June 30, 2025 to indicate an impairment to indefinite-lived intangible assets.

There were no impairment charges related to indefinite-lived intangible assets recorded during the three and six months ended June 30, 2025.

No events or circumstances occurred in the three and nine months ended September 30, 2025 to indicate an impairment to indefinite-lived intangible assets.

There were no impairment charges related to indefinite-lived intangible assets recorded during the three and nine months ended September 30, 2025.

Other Current Assets

Other current assets consist of the following as of December 31, 2024 and June 30, 2025 (in thousands):

December 31, 2024 June 30, 2025

Other current assets consist of the following as of December 31, 2024 and September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Prepaid expenses $ 20,841 $ 25,939

Restricted cash 9,082 10,883

Cloud computing arrangements 9,402 10,563

Restricted cash 9,082 8,551

Deferred contract costs 3,258 4,890

Other 2,210 4,323

Other current assets $ 44,793 $ 54,266

Other assets consist of the following as of December 31, 2024 and June 30, 2025 (in thousands):

December 31, 2024 June 30, 2025

Other assets consist of the following as of December 31, 2024 and September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Cloud computing arrangements, net of current portion $ 18,328 $ 25,011

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Other investments 2,786 2,786

Deferred contract costs, net of current portion 808 2,710

Other 4,842 4,401

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In 2020, pursuant to the terms of the perpetual license agreement associated with the Jack Welch Management Institute, the Company made a final one-time cash payment of approximately $ 25.3 million for the right to continue to use the Jack Welch name and likeness.

As of December 31, 2024 and June 30, 2025, $ 14.7 million and $ 13.9 million, respectively, of this payment is included in the prepaid expenses, net of current portion balance, as the payment is being amortized over an estimated useful life of 15 years.

As of December 31, 2024 and September 30, 2025, $ 14.7 million and $ 13.5 million, respectively, of this payment is included in the prepaid expenses, net of current portion balance, as the payment is being amortized over an estimated useful life of 15 years.

Equity Method Investments

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The Company’s investments range from 3 % to 5 % of any partnership’s interest and are accounted for under the equity method.

The following table illustrates changes in the Company’s limited partnership investments for the three and six months ended June 30, 2024 and 2025 (in thousands):

For the three months ended June 30, For the six months ended June 30,

The following table illustrates changes in the Company’s limited partnership investments for the three and nine months ended September 30, 2024 and 2025 (in thousands):

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

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These investments are accounted for at cost less impairment as they do not have readily determinable fair value.

Other is comprised primarily of deferred financing costs associated with the Company’s credit facility, deferred contract costs related to commissions paid in the Australia/New Zealand segment to third-party international recruitment agents, and refundable security deposits associated with the Company’s leased campus and office space.

Deferred Contract Costs

The Company defers certain commissions paid in the Australia/New Zealand segment to third-party international recruitment agents and amortizes these costs over the period of benefit.

Other is comprised primarily of deferred financing costs associated with the Company’s credit facility, deferred accreditation costs associated with the Australia/New Zealand segment, and refundable security deposits associated with the Company’s leased campus and office space.

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following as of December 31, 2024 and June 30, 2025 (in thousands):

December 31, 2024 June 30, 2025

Accounts payable and accrued expenses consist of the following as of December 31, 2024 and September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Trade payables $ 55,733 $ 61,939

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Long-Term Debt

On October 18, 2024, the Company entered into an amended credit facility (“Amended Credit Facility”), which provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $ 250 million.

On October 18, 2024, the Company entered into an amended credit facility (the “Amended Credit Facility”), which provides for a senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $ 250 million.

The Amended Credit Facility provides the Company with an option, subject to obtaining additional loan commitments and satisfaction of certain conditions, to increase the commitments under the Revolving Credit Facility or establish one or more incremental term loans (each, an “Incremental Facility”) in the future in an aggregate amount of up to the sum of (x) the greater of (A) $ 300 million and (B) 100 % of the Company’s consolidated EBITDA (earnings before interest, taxes, depreciation, amortization, and noncash charges, such as stock-based compensation) calculated on a trailing four-quarter basis and on a pro forma basis, and (y) if such Incremental Facility is incurred in connection with a permitted acquisition or other permitted investment, any amounts so long as the Company’s leverage ratio (calculated on a trailing four-quarter basis) on a pro forma basis will be no greater than 1.75 :1.00.

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Coverage ratio is defined as the ratio of trailing four-quarter EBITDA and rent expense to trailing four-quarter interest and rent expense.

As of December 31, 2024 and June 30, 2025, the Company was in compliance with all covenants of the Amended Credit Facility and had no borrowings outstanding under the Revolving Credit Facility.

During the six months ended June 30, 2024 and 2025, the Company paid $ 2.4 million and $ 0.3 million, respectively, of interest and unused commitment fees related to its Revolving Credit Facility.

As of December 31, 2024 and September 30, 2025, the Company was in compliance with all covenants of the Amended Credit Facility and had no borrowings outstanding under the Revolving Credit Facility.

During the nine months ended September 30, 2024 and 2025, the Company paid $ 3.1 million and $ 0.4 million, respectively, of interest and unused commitment fees related to its Revolving Credit Facility.

Other Long-Term Liabilities

Other long-term liabilities consist of the following as of December 31, 2024 and June 30, 2025 (in thousands):

December 31, 2024 June 30, 2025

Other long-term liabilities consist of the following as of December 31, 2024 and September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Contract liabilities, net of current portion $ 34,505 $ 35,418

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Contract Liabilities

In connection with its student tuition contracts, the Company has an obligation to provide free classes in the future should certain eligibility conditions be maintained.

In connection with its student tuition contracts, the Company has an obligation to provide free tuition in the future should certain eligibility conditions be maintained.

Long-term contract liabilities represent the amount of revenue under these arrangements that the Company expects will be realized after one year.

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Equity Awards

The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three and six months ended June 30, 2024 and 2025 (in thousands):

For the three months ended June 30, For the six months ended June 30,

The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three and nine months ended September 30, 2024 and 2025 (in thousands):

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

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Stock-based compensation expense, net of tax $ 5,052 $ 4,324 $ 13,787 $ 12,677

During the six months ended June 30, 2024 and 2025, the Company recorded income tax expense of $ 25.4 million and $ 25.4 million, respectively.

Income tax expense for the six months ended June 30, 2024 and 2025 include shortfall tax impacts of approximately $ 1.2 million and windfall tax impacts of approximately $ 0.4 million, respectively, related to share-based payment arrangements.

The Company had no unrecognized tax benefits as of December 31, 2024 and June 30, 2025.

Interest and penalties, including

those related to uncertain tax positions, are included in the provision for income taxes in the unaudited condensed consolidated statements of income.

The Company paid $ 25.9 million and $ 29.2 million in income taxes during the six months ended June 30, 2024 and 2025, respectively.

During the nine months ended September 30, 2024 and 2025, the Company recorded income tax expense of $ 36.2 million and

$ 35.5 million, respectively.

Income tax expense for the nine months ended September 30, 2024 and 2025 include shortfall tax impacts of approximately $ 1.2 million and windfall tax impacts of approximately $ 0.4 million, respectively, related to share-based payment arrangements.

The Company had no unrecognized tax benefits as of December 31, 2024 and September 30, 2025.

Interest and penalties, including those related to uncertain tax positions, are included in the provision for income taxes in the unaudited condensed consolidated statements of income.

The Company paid $ 39.5 million and $ 38.1 million in income taxes during the nine months ended September 30, 2024 and 2025, respectively.

The tax years since 2021 remain open for federal tax examination, the tax years since 2020 remain open to examination by certain states, and the tax years since 2019 remain open to examination by foreign taxing jurisdictions in which the Company is subject to taxation.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBB”) , which includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The Company currently does not expect the OBBB to have a material impact on its annual effective tax rate in 2025.

On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (“OBBBA”), which includes significant tax related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The Company has analyzed and accounted for the impacts of OBBBA within the quarter and determined there is no material impact on its annual effective tax rate in 2025.

Segment Reporting

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ETS also supports employer partners through Workforce Edge, a platform which provides employers a full-service education benefits administration solution, and Sophia Learning, which offers low-cost online general education-level courses recommended by the American Council on Education for credit at other colleges and universities.

The ANZ segment is comprised of Torrens University, Think Education, and Media Design School in Australia and New Zealand, which collectively offer certificate and degree programs in business, design, education, hospitality, healthcare, and technology through campuses in Australia, New Zealand, and online.

The ANZ segment is comprised of Torrens University, Think Education, and Media Design School at Strayer (“MDS”) in Australia and New Zealand, which collectively offer certificate and degree programs in business, design, education, hospitality, healthcare, and technology through campuses in Australia, New Zealand, and online.

On September 8, 2025, MDS became a wholly owned subsidiary and international additional location of Strayer University included within Strayer’s Middle States Commission on Higher Education accreditation.

The New Zealand Qualifications Authority approved the transaction and MDS will continue to operate as a New Zealand private tertiary institution.

This change does not affect the Company’s segment reporting.

The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer.

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On a monthly basis, the CODM reviews budget-to-actual, latest forecast-to-actual, and year-over-year actual variances when reviewing segment performance and making decisions about the allocation of resources to each segment.

A summary of financial information by reportable segment for the three months ended June 30, 2024 is presented in the following table (in thousands):

A summary of financial information by reportable segment for the three months ended September 30, 2024 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

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Consolidated income from operations $ 36,326

Other expense ( 123 )

Other income 2,264

Consolidated income before income taxes $ 38,590

A summary of financial information by reportable segment for the three months ended June 30, 2025 is presented in the following table (in thousands):

A summary of financial information by reportable segment for the three months ended September 30, 2025 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

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Consolidated income before income taxes $ 36,769

A summary of financial information by reportable segment for the six months ended June 30, 2024 is presented in the following table (in thousands):

A summary of financial information by reportable segment for the nine months ended September 30, 2024 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

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Consolidated income before income taxes $ 123,541

A summary of financial information by reportable segment for the six months ended June 30, 2025 is presented in the following table (in thousands):

A summary of financial information by reportable segment for the nine months ended September 30, 2025 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

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Consolidated income before income taxes $ 124,219

The following table presents a schedule of significant non-cash items included in segment income from operations by reportable segment for the three and six months ended June 30, 2024 and 2025 (in thousands):

For the three months ended June 30, For the six months ended June 30,

The following table presents a schedule of significant non-cash items included in segment income from operations by reportable segment for the three and nine months ended September 30, 2024 and 2025 (in thousands):

For the three months ended September 30, For the nine months ended September 30,

2024 2025 2024 2025

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Other than as set forth below, there have been no material changes to the laws and regulations affecting the Company’s higher education institutions that are described in our Annual Report on Form 10-K for the year ended December 31, 2024.

United States Regulation

One Big Beautiful Bill Act

On July 4, 2025, President Trump signed the OBBB, which includes, among other things, amendments to portions of the Higher Education Act of 1965 and the Internal Revenue Code of 1986, as amended.

On July 4, 2025, President Trump signed OBBBA, which includes, among other things, amendments to portions of the Higher Education Act of 1965 and the Internal Revenue Code of 1986, as amended.

Various portions of the bill may go through negotiated rulemaking prior to implementation, and it is impossible to predict the outcome of those negotiations or the rulemaking process.

OBBB makes a variety of changes to federal student aid programs, including loan limits, accountability measures for programs based on low earning outcomes, loan repayment, Pell Grant eligibility, and regulatory changes.

OBBB eliminates, effective July 2026, Federal Direct PLUS loans for graduate and professional students, with some limited grandfathering for current graduate and professional student borrowers.

OBBBA makes a variety of changes to federal student aid programs, including loan limits, accountability measures for programs based on low earning outcomes, loan repayment, Pell Grant eligibility, and regulatory changes.

OBBBA eliminates, effective July 2026, Federal Direct PLUS loans for graduate and professional students, with some limited grandfathering for current graduate and professional student borrowers.

The law also sets new annual and aggregate loan limits for such borrowers, with some limited grandfathering.

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With respect to graduate students who are or have been professional students, the aggregate graduate loan limit is $200,000 minus the amounts borrowed for the professional degree program.

OBBB also created a lifetime maximum aggregate amount for Title IV loans that a student may borrow of $257,500 (other than a loan made to the student as a parent borrower on behalf of a dependent student).

OBBB provides institutions the opportunity to limit the amount of loans a student may borrow in an academic year as long as any such limit is applied consistently to all students enrolled in such program of study.

Additionally, OBBB requires that the amount of loan funds available under a student’s annual loan eligibility must be reduced in direct proportion to the degree to which that student is not enrolled on a full-time basis during an academic year.

OBBB creates an accountability framework, effective July 2026, that institutions must satisfy at the program level in order for students to continue to receive Federal Direct Loans for such programs.

OBBB requires that an undergraduate program become ineligible for Federal Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults aged 25-34 with only a high school diploma, either in the state where the institution is located or, if fewer than 50% of students at the institution reside in the institution’s state, the national

OBBB requires that a graduate or professional program become ineligible for Federal Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults aged 25–34 with only a bachelor’s degree.

OBBBA also created a lifetime maximum aggregate amount for Title IV loans that a student may borrow of $257,500 (other than a loan made to the student as a parent borrower on behalf of a dependent student).

OBBBA provides institutions the opportunity to limit the amount of loans a student may borrow in an academic year as long as any such limit is applied consistently to all students enrolled in such program of study.

Additionally, OBBBA requires that the amount of loan funds available under a student’s annual loan eligibility must be reduced in direct proportion to the degree to which that student is not enrolled on a full-time basis during an academic year;

the Department plans to release a schedule of reductions for public comment later this year, which institutions will be required to use for students who enrolled less than full-time for academic years 2026-27 and beyond.

OBBBA creates an accountability framework, effective July 2026, that institutions must satisfy at the program level in order for students to continue to receive Federal Direct Loans for such programs.

OBBBA requires that an undergraduate program become ineligible for Federal Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults aged 25-34 with only a high school diploma, either in the state where the institution is located or, if fewer than 50% of students at the institution reside in the institution’s state, the national average.

OBBBA requires that a graduate or professional program become ineligible for Federal Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults aged 25–34 with only a bachelor’s degree.

Comparator median earnings for graduate or professional programs will be calculated based on Bureau of the Census data for working adults aged 25-34 with only a bachelor’s degree, and will be the lesser of:

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If a program fails the earnings test for one year, institutions must notify students that the program is at risk of losing Federal Direct Loan eligibility.

OBBB requires that an institutional appeals process be established by the Secretary of Education, and a program’s Federal Direct Loan eligibility will continue during such appeal.

OBBBA requires that an institutional appeals process be established by the Secretary of Education, and a program’s Federal Direct Loan eligibility will continue during such appeal.

Programs that lose eligibility under the accountability framework may reapply for eligibility after two years, consistent with requirements that will be established by the Secretary of Education.

Among other things related to loan repayment plans, OBBB requires that for new loans issued on or after July 2026, borrowers choose between two plans:

Among other things related to loan repayment plans, OBBBA requires that for new loans issued on or after July 2026, borrowers choose between two plans:

a Standard Repayment Plan (with fixed monthly payments and fixed terms ranging from 10-25 years) or a new Income-Based Repayment Assistance Plan (RAP).

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For example, borrowers currently on an Income-Contingent Repayment (ICR) plan must transition to a different plan by July 1, 2028.

OBBB also eliminates unemployment and economic hardship deferments for loans issued on or after July 1, 2027, and reduces the permitted forbearance period to 9 months per 24-month period.

OBBBA also eliminates unemployment and economic hardship deferments for loans issued on or after July 1, 2027, and reduces the permitted forbearance period to 9 months per 24-month period.

Additionally, borrowers will be permitted to rehabilitate defaulted loans twice beginning July 2027, rather than only once under the current rule.

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A student will also be ineligible for a Federal Pell Grant during any period for which the student receives grant aid from a non-federal source (including states, institutional aid, or private sources) in an amount that equals or exceeds the student’s cost of attendance.

Additionally, OBBB creates Workforce Pell Grants effective July 2026 for students enrolled in eligible workforce programs.

Additionally, OBBBA creates Workforce Pell Grants effective July 2026 for students enrolled in eligible workforce programs.

Eligible workforce programs must meet a specific definition, including that they are accredited, short-term, career-focused programs (150 to 600 clock hours of instruction over 8 to 15 weeks), which prepare students to pursue one or more certificate or degree programs.

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Workforce Pell Grants may not be combined with a regular Pell grant.

OBBB amends the Higher Education Act to delay the effective date of the 2022 borrower defense to repayment rules, including the closed school discharge provisions, until July 1, 2035.

OBBBA amends the Higher Education Act to delay the effective date of the 2022 borrower defense to repayment rules, including the closed school discharge provisions, until July 1, 2035.

The 2019 version of those rules, which took effect July 1, 2020, is instead reinstated.

The Department of Education has scheduled two negotiated rulemaking committees to meet to consider regulations to implement provisions of OBBBA and related Trump administration priorities, as detailed in the “Negotiated Rulemaking” section below.

The Company is unable to predict the outcomes of those negotiations or what guidance the Department may issue regarding how schools are to implement the legislation.

The 90/10 Rule

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Historically, by statute, only Title IV funds have been considered within the 90% metric;

however, as described below, that changed for fiscal years beginning on or after January 1, 2023.

however, as described below, that changed for fiscal years beginning

on or after January 1, 2023.

A proprietary institution of higher education that violates the 90/10 Rule for any fiscal year will be placed on provisional certification for up to two fiscal years.

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On January 21, 2025, SARA’s coordinating entity, the National Council for State Authorization Reciprocity Agreements (“NC-SARA”), initiated its 2025 policy manual modification process with a call for proposals for SARA policy changes.

The call for proposals ended February 7, 2025 and yielded 32 proposed changes to NC-SARA policies, some of which, if adopted, could significantly alter the distance education reciprocity agreements.

Such proposals included circumstances under which an institution may be denied participation in SARA or have its participation limited as a result of investigations or adverse actions against it related to the institution’s academic quality, financial stability, or student consumer protection issues.

On April 25, 2025, NC-SARA held its public comment forum to seek input on these potential changes.

In addition to the public comment forum, NC-SARA permitted submission of written comments in two rounds:

between March 6, 2025 and April 7, 2025 and between June 9, 2025 and July 7, 2025 (both now closed).

NC-SARA’s regional compacts/regional steering committees and the NC-SARA board of directors will vote on each proposal presented by September 2, 2025, and October 23, 2025, respectively.

In September 2025, NC-SARA announced that all four regional compacts had approved nine policy changes, which will be considered by the NC-SARA board on October 23, 2025.

We cannot predict whether NC-SARA will adopt any of these proposals.

The adoption of certain proposals, including those described above to the extent they affect the ability of institutions to participate in the agreements, could have a material adverse effect on Capella University, Strayer University, and the Company.

The adoption of certain proposals, including any that affect the ability of institutions to participate in the agreements, could have a material adverse effect on Capella University, Strayer University, and the Company.

Negotiated Rulemaking

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The Department hosted public hearings on April 29, 2025 and May 1, 2025 and accepted written comments through May 5, 2025.

The Department held negotiated rulemaking on proposed changes to the Public Service Loan Forgiveness program June 30 through July 2, 2025.

The negotiating committee did not reach consensus on changes, and as a result the Department will be able to propose its own regulatory language.

On July 24, 2025, the Department of Education announced its intention to establish two negotiated rulemaking committees to prepare proposed regulations implementing the OBBB.

The Department held negotiated rulemaking on proposed changes to the Public Service Loan Forgiveness (“PSLF”) program June 30 through July 2, 2025.

The negotiating committee did not reach consensus on changes, and as a result the Department proposed its own regulatory language on August 18, 2025, with public comments due September 17, 2025.

On July 24, 2025, the Department of Education announced its intention to establish two negotiated rulemaking committees to prepare proposed regulations implementing OBBBA and related Trump administration priorities.

One committee will address federal student loan-related changes and is scheduled to meet for two multi-day sessions between September 2025 and November 2025.

A second committee will address Workforce Pell, institutional and programmatic accountability, and other issues, and is scheduled to meet for two multi-day sessions between December 2025 and January 2026.

The Company is unable to predict the outcomes of those negotiations or what guidance the Department may issue regarding how schools are to implement the legislation.

On April 19, 2024, the U.S.

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and eliminates the requirement for live hearings with an opportunity for cross-examination at the post-secondary level.

Multiple states have joined lawsuits against the Department

challenging the 2024 Title IX Rule, and federal district courts have granted preliminary injunctions enjoining the Department from enforcing the final rule in Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.

Multiple states have joined lawsuits against the Department challenging the 2024 Title IX Rule, and federal district courts have granted preliminary injunctions enjoining the Department from enforcing the final rule in Alabama, Alaska, Arkansas, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.

Certain courts have issued orders expanding the injunction to named schools, irrespective of where those schools are located;

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District Court for the Eastern District of Kentucky granted summary judgment against the U.S.

Department of Education, vacating the 2024 Title IX Rule as unlawful.

The Department did not appeal this decision before the March 10, 2025 appeal deadline passed;

however, a nonprofit legal organization is seeking to intervene in support of the 2024 Title IX Rule.

Department of Education, vacating the 2024 Title IX Rule as unlawful nationwide.

On February 4, 2025, the Department’s Office for Civil Rights issued a Dear Colleague Letter (“DCL”) confirming that it will enforce Title IX under the 2020 Title IX Rule, and that open investigations initiated under the 2024 Title IX Rule should be reevaluated for consistency with the 2020 Title IX Rule.

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The DCL asserts that the SFFA decision applies more broadly to prohibit using race in decisions related to admissions, hiring, promotion, compensation, financial aid, scholarships, prizes, administrative support, discipline, housing, graduation ceremonies, and all other aspects of student, academic, and campus life.

The DCL further states that programs and activities that treat students differently on the basis of race to achieve “nebulous” diversity, racial balancing, social justice, or equity goals are illegal.

The DCL further states that programs and activities that treat students differently on the basis of race to achieve “nebulous” diversity, racial balancing,

social justice, or equity goals are illegal.

The Department informed institutions that the Department intended to take appropriate measures to assess compliance with the applicable statutes and regulations beginning February 28, 2025.

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On February 28, 2025, the Department issued additional guidance in a Frequently Asked Questions (“FAQs”) document clarifying aspects of the DCL.

Multiple lawsuits have been filed seeking to enjoin and vacate the DCL and FAQs alleging that they are unconstitutional, violate the Administrative Procedure Act, and are vague and disrupt educational practices, including by

limiting academic freedom.

Capella University and Strayer University are not parties to the lawsuits.

In August 2025, the U.S.

District Court for the District of Maryland vacated the DCL, FAQs, and a related certification requirement.

The Department subsequently confirmed it would not take any enforcement action or otherwise implement the guidance until further notice.

On October 15, 2025, the Department filed a notice of appeal to the U.S.

Court of Appeals for the Fourth Circuit.

The Company is unable to predict the ultimate outcome of the litigation.

On March 14, 2025, the Department announced that its Office for Civil Rights has opened investigations into dozens of higher education institutions for alleged Title VI violations;

the Department has continued to initiate additional Title VI investigations.

Australian and New Zealand Regulation

Torrens University of Australia (“Torrens”) is one of 44 universities in Australia.

It is a private, for-profit entity and is registered with the Tertiary Education Quality and Standards Agency (“TEQSA”).

As a self-accrediting university, it is not required to have its individual courses of study accredited by TEQSA.

Torrens is also registered with the Australian Skills Quality Authority (“ASQA”) as a Registered Training Organisation (“RTO”) and is thus entitled to offer vocational and training courses.

On September 3, 2025, Torrens completed its re-registration process with TEQSA and received a registration renewal from TEQSA for the maximum period of seven years , with two conditions.

On December 19, 2024, the Australian Federal Government introduced Ministerial Direction 111, which seeks to limit the number of international students, and is expected to draw student allocations determined by the Government on a prioritization approach.

On August 4, 2025, the Australian Federal Government announced that the National Planning Level for international students for 2026 would be increased over 2025, contingent upon institutions fulfilling certain conditions, and that Ministerial Direction 111 would be replaced with an updated ministerial direction to reflect 2026 arrangements.

On October 9, 2025, the Education Legislation Amendment (Integrity and Other Measures) Bill 2025 was introduced into the House of Representatives of the Australian Parliament.

The Bill, which does not address numerical limits on international students, contains several measures to reform key legislative frameworks for education providers and aims to strengthen the integrity and regulation of the international education sector within Australia as well as transnational education and offshore delivery.

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-Q

Item 1. Financial Statements