What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-04-23 compared with 2025-11-06 · 219 added, 352 removed, 546 unchanged (51% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

December 31, 2024 September 30, 2025

December 31, 2025 March 31, 2026

Current assets:

3 unchanged sentences

Income taxes receivable 2,511 —

Assets held for sale — 2,200

Other current assets 49,090 60,025

22 unchanged sentences

32,000,000 shares authorized;

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

22,968,860 and 22,612,909 shares issued and outstanding at December 31, 2025 and March 31, 2026, respectively

Additional paid-in capital 1,436,795 1,399,393

7 unchanged sentences

(in thousands, except per share data)

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

2024 2025 2024 2025

For the three months ended March 31,

Revenues $ 303,590 $ 305,928

5 unchanged sentences

Income from operations 39,794 41,085

Other income (expense) 2,264 ( 273 ) 3,935 1,623

Other income 2,211 1,205

Income before income taxes 42,005 42,290

10 unchanged sentences

(in thousands)

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

2024 2025 2024 2025

For the three months ended March 31,

Net income $ 29,744 $ 32,809

Other comprehensive income (loss):

Other comprehensive income:

Foreign currency translation adjustments 3,343 15,157

Unrealized gains (losses) on marketable securities, net of tax 25 ( 219 ) 239 ( 219 )

Comprehensive income $ 51,601 $ 32,868 $ 98,357 $ 124,639

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

STRATEGIC EDUCATION, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

For the three months ended September 30, 2024

Common Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Shares Par Value

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

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

Common stock dividends ($ 0.60 per share)

— — — ( 14,792 ) — ( 14,792 )

Foreign currency translation adjustment — — — — 23,828 23,828

Unrealized gains on marketable securities, net of tax 1 —

Net income — — — 27,748 — 27,748

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

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Total

Shares Par Value

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

Exercise of stock options 740 — 39 — — 39

Issuance of restricted stock, net ( 15,715 ) — ( 576 ) — — ( 576 )

Repurchase of common stock ( 428,837 ) ( 4 ) ( 27,151 ) ( 7,460 ) — ( 34,615 )

Common stock dividends ($ 0.60 per share)

— — — ( 14,198 ) — ( 14,198 )

Foreign currency translation adjustment — — — — 6,457 6,457

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

Net income — — — 26,630 — 26,630

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

Comprehensive income $ 33,088 $ 47,966

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

2 unchanged sentences

(in thousands, except share data)

For the nine months ended September 30, 2024

For the three months ended March 31, 2025

Common Stock Additional

14 unchanged sentences

Net income — — — 29,744 — 29,744

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

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

For the three months ended March 31, 2026

Common Stock Additional

12 unchanged sentences

Foreign currency translation adjustment — — — — 15,157 15,157

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

Net income — — — 32,809 — 32,809

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

Balance at March 31, 2026 22,612,909 $ 226 $ 1,399,393 $ 265,792 $ ( 30,958 ) $ 1,634,453

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

2 unchanged sentences

(in thousands)

For the nine months ended September 30,

For the three months ended March 31,

Cash flows from operating activities:

1 unchanged sentence

Adjustments to reconcile net income to net cash provided by operating activities:

Gain on early termination of operating leases, net ( 6,166 ) —

Amortization of deferred financing costs 106 106

18 unchanged sentences

Other investments ( 90 ) ( 138 )

Cash paid for acquisition, net of cash acquired ( 163 ) ( 36 )

Net cash used in investing activities ( 1,701 ) ( 10,175 )

1 unchanged sentence

Common dividends paid ( 14,797 ) ( 13,577 )

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

Net payments for stock awards ( 9,273 ) ( 12,504 )

22 unchanged sentences

Financial Statement Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

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

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.

All information as of, and for the three months ended, March 31, 2025 and 2026 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, 2025 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, 2025.

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.

The results of operations for the three months ended March 31, 2026 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/losses 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 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.

Financial 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.

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 $ 1.9 million of these unpaid obligations as of December 31, 2024 and September 30, 2025, respectively.

The Company had approximately $ 0.3 million and $ 0.3 million of these unpaid obligations as of December 31, 2025 and March 31, 2026, 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 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.

As of December 31, 2025 and March 31, 2026, the Company had approximately $ 8.0 million and $ 9.6 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 September 30, 2024 and 2025 (in thousands):

As of September 30,

As of March 31,

Cash and cash equivalents $ 144,215 $ 150,350

7 unchanged sentences

Management determines the appropriate designation of marketable securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

All of the Company’s marketable securities are designated as either held-to-maturity or available-for-sale.

As of December 31, 2025 and March 31, 2026, all of the Company’s marketable securities are designated as held-to-maturity.

The Company’s held-to-maturity marketable securities consist of term deposits, U.S.

treasury securities, and corporate debt securities, which are carried at amortized cost.

The Company’s available-for-sale marketable securities consisted of corporate debt securities, which were carried at fair value as determined by quoted market prices or other inputs either directly or indirectly observable in the marketplace for identical or similar assets, with unrealized gains and losses, net of tax, recognized as a component of accumulated other comprehensive income (loss) within stockholders’ equity.

Management reviews the fair value of the portfolio at least quarterly, and evaluates individual securities with fair value below amortized cost at the balance sheet date for impairment.

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

Amortization of premiums, accretion of discounts, interest, dividend income and realized gains and losses are included in other income.

The contractual maturity date of available-for-sale securities is based on the days remaining to the effective maturity.

The Company classifies marketable securities as either current or non-current assets based on management’s intent with regard to usage of those funds, which is dependent upon the security’s maturity date and liquidity considerations based on current market conditions.

The Company classifies marketable

securities as either current or non-current assets based on management’s intent with regard to usage of those funds, which is dependent upon the security’s maturity date and liquidity considerations based on current market conditions.

If management intends to hold the securities for longer than one year as of the balance sheet date, they are classified as non-current.

6 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 September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

The Company’s current tuition receivable and allowance for credit losses were as follows as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Tuition receivable $ 127,634 $ 134,155

1 unchanged sentence

Tuition receivable, net $ 78,202 $ 86,190

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

An additional $ 6.2 million and $ 6.2 million of tuition receivable, net, are included in other assets as of December 31, 2025 and March 31, 2026, 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 months ended March 31, 2025 and 2026 (in thousands).

For the three months ended March 31,

Allowance for credit losses, beginning of period $ 46,185 $ 45,465

2 unchanged sentences

Allowance for credit losses, end of period $ 45,570 $ 43,920

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 23,504,950 shares were issued and outstanding as of December 31, 2024 and September 30, 2025, respectively.

The Company has authorized 32,000,000 shares of common stock, par value $ 0.01 , of which 22,968,860 and 22,612,909 shares were issued and outstanding as of December 31, 2025 and March 31, 2026, 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 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.

In February 2026, 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 March 16, 2026.

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 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

Set forth below is a reconciliation of shares used to calculate basic and diluted earnings per share for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

Weighted average shares outstanding used to compute basic earnings per share 23,320 21,620

5 unchanged sentences

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.

As of December 31, 2025 and March 31, 2026, the balance of accumulated other comprehensive loss was $ 46.1 million and $ 31.0 million, respectively.

There were no reclassifications out of accumulated other comprehensive income (loss) to net income for the three months ended March 31, 2025 and 2026.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period reported.

The most significant management estimates include allowances for credit losses, useful lives of property and equipment, incremental borrowing rates, potential sublease income and vacancy periods, accrued expenses, forfeiture rates and the likelihood of achieving performance criteria for stock-based awards, value of free courses earned by students that will be redeemed in the future, valuation of goodwill and intangible assets, and the provision for income taxes.

The most significant management estimates include allowances for credit losses, income tax provisions, the useful lives of property and equipment, redemption rates for scholarship programs and valuation of contract liabilities, the fair value of right-of-use lease assets for facilities that have been vacated, incremental borrowing rates, valuation of deferred tax assets, goodwill, and intangible assets, forfeiture rates and achievability of performance targets for stock-based compensation plans and accrued expenses.

Actual results could differ from those estimates.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires disclosure of specific categories in the effective tax rate reconciliation.

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, 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):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

5 unchanged sentences

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.

7 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 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

The following table presents the Company’s revenues from contracts with customers disaggregated by material revenue category for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

Higher Education Segment

Tuition, net of discounts, grants and scholarships $ 211,746 $ 202,814

8,836 9,752 27,383 27,935

Higher Education Segment 221,008 212,591

1 unchanged sentence

Tuition, net of discounts, grants and scholarships 46,446 51,084

1,975 1,587 5,842 4,696

Total Australia/New Zealand Segment 48,260 51,820

17 unchanged sentences

Revenue derived from course materials is recognized ratably over the duration of the course as the Company provides the student with continuous access to these materials during the term.

For sales of certain other course materials, the Company is considered the agent in the transaction, and as such, the Company recognizes revenue net of amounts owed to the vendor at the time of sale.

For sales of certain other course materials, the Company is considered the agent in the transaction, and as such, the Company recognizes revenue net of amounts owed to the

vendor at the time of sale.

Revenues also include certain academic fees recognized within the quarter of instruction, and certificate revenue and licensing revenue, which are recognized as the services are provided.

6 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 nine months ended September 30,

For the three months ended March 31,

Balance at beginning of period $ 37,118 $ 38,125

7 unchanged sentences

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

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 table below presents activity in the contract liability related to Tuition Cap (in thousands):

For the three months ended March 31,

Balance at beginning of period $ 14,672 $ 18,483

Revenue deferred 1,323 3,124

Benefit redeemed ( 441 ) ( 811 )

Balance at end of period $ 15,554 $ 20,796

The amount estimated to be redeemed in the next 12 months is $ 8.1 million and is included as a current contract liability in the unaudited condensed consolidated balance sheets.

Costs to Obtain a Contract

Certain commissions earned by third-party international agents are considered incremental and recoverable costs of obtaining a contract with customers in the Australia/New Zealand segment.

Certain commissions earned by third-party international agents are considered incremental and recoverable costs of obtaining a contract with customers in the ANZ segment.

These costs are deferred and then amortized over the period of benefit which ranges from one year to two years .

1 unchanged sentence

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 $ 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.

The Company incurred $ 1.5 million and $ 1.6 million of severance and other employee separation charges during the three months ended March 31, 2025 and 2026, 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 nine months ended September 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 three months ended March 31, 2025 and 2026 (in thousands):

Severance Restructuring Liability

2 unchanged sentences

Payments ( 1,285 )

Balance as of September 30, 2024

Balance as of March 31, 2025

Balance as of December 31, 2025 (1)

1 unchanged sentence

Payments ( 1,309 )

Balance as of September 30, 2025 (1)

Balance as of March 31, 2026 (1)

____________________________________

(1) Restructuring liabilities are included in accounts payable and accrued expenses in the unaudited condensed consolidated balance sheets.

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 $ 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.

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

The Company recorded approximately $ 0.1 million and $ 0.2 million of right-of-use lease asset impairment charges during the three months ended March 31, 2025 and 2026, respectively, related to facilities that were consolidated during the period.

The Company also recorded fixed asset impairment charges of approximately $ 0.1 million and $ 0.2 million during the three months ended March 31, 2025 and 2026, respectively.

These right-of-use lease asset impairments and fixed asset impairments are included in Restructuring costs on the unaudited condensed consolidated statements of income.

Marketable Securities

The following is a summary of available-for-sale securities, which are carried at fair value, as of December 31, 2024 (in thousands):

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

Balance as of December 31, 2024

Corporate debt securities $ 500 $ — $ ( 1 ) $ 499

Total $ 500 $ — $ ( 1 ) $ 499

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):

The following is a summary of held-to-maturity securities, which are carried at amortized cost, as of December 31, 2025 and March 31, 2026 (in thousands):

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

4 unchanged sentences

Total $ 12,297 $ 42 $ — $ 12,339

Balance as of September 30, 2025

Balance as of March 31, 2026

Term deposits $ 2,281 $ — $ — $ 2,281

2 unchanged sentences

Total $ 12,275 $ 28 $ — $ 12,303

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 nine months ended September 30, 2024 and 2025.

The unrealized gains and losses on the Company’s investments in marketable securities as of December 31, 2025 and March 31, 2026 were caused by changes in market values primarily due to interest rate changes.

As of March 31, 2026, there were no securities which were in an unrealized loss position for a period longer than 12 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 months ended March 31, 2025 and 2026.

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 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

The following table summarizes the maturities of the Company’s held-to-maturity securities as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Due within one year $ 7,297 $ 7,275

1 unchanged sentence

Total $ 12,297 $ 12,275

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,

The following table summarizes the purchases of and proceeds from marketable securities for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

Purchases of marketable securities

5 unchanged sentences

Total proceeds from marketable securities $ 34,342 $ —

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.

The Company did not sell any available-for-sale or held-to-maturity securities during the three months ended March 31, 2025 and 2026.

The Company did not record any gross realized gains or losses in net income during the three months ended March 31, 2025 and 2026.

Fair Value Measurement

8 unchanged sentences

Money market funds $ 88,239 $ 88,239 $ — $ —

Available-for-sale securities :

Corporate debt securities 499 — 499 —

Total assets at fair value on a recurring basis $ 88,239 $ 88,239 $ — $ —

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

Assets measured at fair value on a recurring basis consist of the following as of March 31, 2026 (in thousands):

Fair Value Measurements at Reporting Date Using

September 30, 2025 Quoted Prices in

March 31, 2026 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 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.

The Company does not hold securities in inactive markets.

The Company records any net unrealized gains and losses for changes in fair value as a component of accumulated other comprehensive income (loss) in stockholders’ equity.

The Company’s other cash and cash equivalents as of December 31, 2025 and March 31, 2026 approximate fair value and are not disclosed in the above tables because of the short-term nature of the financial instruments.

The Company’s held-to-maturity marketable securities, which consist of term deposits, U.S.

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 September 30, 2025 was $ 61.4 million and $ 31.3 million, respectively.

The estimated fair value of the Company’s held-to-maturity marketable securities as of December 31, 2025 and March 31, 2026 was $ 12.3 million and $ 12.3 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 nine months ended September 30, 2024 and 2025.

Goodwill and Intangible Assets

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

The following table presents changes in the carrying value of goodwill by segment for the three months ended March 31, 2025 (in thousands):

Higher Education Australia /

4 unchanged sentences

Currency translation adjustments — 2,827 — 2,827

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):

Balance as of March 31, 2025 $ 632,075 $ 477,635 $ 100,000 $ 1,209,710

The following table presents changes in the carrying value of goodwill by segment for the three months ended March 31, 2026 (in thousands):

Higher Education Australia /

4 unchanged sentences

Currency translation adjustments — 13,143 — 13,143

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

Balance as of March 31, 2026 $ 632,075 $ 523,481 $ 100,000 $ 1,255,556

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 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.

No events or circumstances occurred in the three months ended March 31, 2026 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 months ended March 31, 2025 and 2026.

Intangible Assets

3 unchanged sentences

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

For the nine months ended September 30,

For the three months ended March 31,

Balance at beginning of period $ 245,098 $ 249,243

Additions — —

Impairments — —

Disposals — ( 476 )

Currency translation adjustments 354 1,646

1 unchanged sentence

The Company assesses indefinite-lived intangible assets 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 indefinite-lived intangible asset below its carrying amount.

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 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.

No events or circumstances occurred in the three months ended March 31, 2026 to indicate an impairment to indefinite-lived intangible assets.

There were no impairment charges related to indefinite-lived intangible assets recorded during the three months ended March 31, 2025 and 2026.

Other Current Assets

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

December 31, 2024 September 30, 2025

Other current assets consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Prepaid expenses $ 22,970 $ 27,997

4 unchanged sentences

Other current assets $ 49,090 $ 60,025

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

December 31, 2024 September 30, 2025

Other assets consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Cloud computing arrangements, net of current portion $ 24,941 $ 24,507

2 unchanged sentences

Tuition receivable, net, non-current 6,217 6,169

Other investments 2,786 2,786

Deferred contract costs, net of current portion 2,149 3,052

Other investments 2,786 2,766

Other 4,976 6,018

5 unchanged sentences

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 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.

As of December 31, 2025 and March 31, 2026, $ 13.2 million and $ 12.8 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

2 unchanged sentences

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 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

The following table illustrates changes in the Company’s limited partnership investments for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

Limited partnership investments, beginning of period $ 13,428 $ 9,472

5 unchanged sentences

Non-current tuition receivable, net, represents tuition that the Company expects to collect, but not within the next 12 months.

Deferred Contract Costs

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

Other Investments

1 unchanged sentence

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

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.

Other is comprised primarily of deferred financing costs associated with the Company’s credit facility, deferred accreditation costs associated with the ANZ 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 September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Accounts payable and accrued expenses consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Trade payables $ 55,986 $ 67,013

4 unchanged sentences

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.

(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.

In addition, the Amended Credit Facility provides for a subfacility for borrowings in certain foreign currencies in an amount equal to the U.S.

11 unchanged sentences

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 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.

As of December 31, 2025 and March 31, 2026, 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 three months ended March 31, 2025 and 2026, the Company paid $ 0.1 million and $ 0.1 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 September 30, 2025 (in thousands):

December 31, 2024 September 30, 2025

Other long-term liabilities consist of the following as of December 31, 2025 and March 31, 2026 (in thousands):

December 31, 2025 March 31, 2026

Contract liabilities, net of current portion $ 35,577 $ 37,366

3 unchanged sentences

Contract Liabilities

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.

In connection with its student tuition contracts, the Company has an obligation to provide free or discounted 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.

1 unchanged sentence

Certain of the Company’s lease agreements require the leased premises to be returned in a predetermined condition.

Other is comprised primarily of employee-related obligations and other long-term liabilities.

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 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

The following table sets forth the amount of stock-based compensation expense recorded in each of the expense line items for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

Instructional and support costs $ 2,287 $ 1,744

4 unchanged sentences

Stock-based compensation expense, net of tax $ 4,036 $ 3,981

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.

During the three months ended March 31, 2025 and 2026, the Company recorded income tax expense of $ 12.3 million and $ 9.5 million, respectively.

Income tax expense for the three months ended March 31, 2025 and 2026 include windfall tax impacts of approximately $ 0.5 million and $ 2.6 million, respectively, related to share-based payment arrangements.

The Company had no unrecognized tax benefits as of December 31, 2025 and March 31, 2026.

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 Company paid $ 1.9 million and $ 2.4 million in income taxes during the three months ended March 31, 2025 and 2026, respectively.

The tax years since 2022 remain open for federal tax examination, the tax years since 2021 remain open to examination by certain states, and the tax years since 2021 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 (“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

3 unchanged sentences

Higher Education, Education Technology Services, and Australia/New Zealand.

The USHE segment provides flexible and affordable certificate and degree programs to working adults primarily through Capella University and Strayer University, including the Jack Welch Management Institute MBA, which is a unit of Strayer University.

USHE also operates non-degree web and mobile application development courses through Hackbright Academy and Devmountain, which are units of Strayer University.

The ETS segment primarily develops and maintains relationships with employers to build education benefits programs that provide employees access to affordable and industry-relevant training, certificate, and degree programs.

USHE also operates non-degree web and mobile application development courses through Hackbright Academy and Devmountain, which are offerings of Strayer University.

The ETS segment primarily develops and maintains relationships with employers to build employee education benefits programs that provide employees access to affordable and industry-relevant training, certificate, and degree programs.

The employer relationships developed by the ETS segment are an important source of student enrollment for Capella University and Strayer University, and a significant portion of the revenue attributed to the ETS segment is driven by the volume of enrollment derived from these employer relationships.

1 unchanged sentence

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.

5 unchanged sentences

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 September 30, 2024 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

Revenues $ 207,709 $ 71,948 $ 26,301 $ 305,958

Segment expenses

Direct segment expenses 181,663 52,386 14,511 248,560

Enterprise shared services allocation 14,600 4,716 998 20,314

Segment income from operations $ 11,446 $ 14,846 $ 10,792 $ 37,084

Unallocated expenses

Restructuring costs ( 758 )

Consolidated income from operations $ 36,326

Other income 2,264

Consolidated income before income taxes $ 38,590

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

Revenues $ 213,067 $ 68,589 $ 38,293 $ 319,949

Segment expenses

Direct segment expenses 176,811 50,639 20,873 248,323

Enterprise shared services allocation 13,403 5,465 1,465 20,333

Segment income from operations $ 22,853 $ 12,485 $ 15,955 $ 51,293

Unallocated expenses

Restructuring costs ( 14,251 )

Consolidated income from operations $ 37,042

Other expense ( 273 )

Consolidated income before income taxes $ 36,769

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

A summary of financial information by reportable segment for the three months ended March 31, 2025 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

3 unchanged sentences

Enterprise shared services allocation 15,514 5,105 1,666 22,285

Segment income from operations $ 59,284 $ 26,651 $ 30,914 $ 116,849

Segment income (loss) from operations $ 29,956 $ ( 2,096 ) $ 13,848 $ 41,708

Unallocated expenses

3 unchanged sentences

Consolidated income before income taxes $ 42,005

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

A summary of financial information by reportable segment for the three months ended March 31, 2026 is presented in the following table (in thousands):

Higher Education Australia/New Zealand Education Technology Services Total

3 unchanged sentences

Enterprise shared services allocation 15,470 5,511 2,117 23,098

Segment income from operations $ 73,568 $ 23,145 $ 44,831 $ 141,544

Segment income (loss) from operations $ 25,502 $ ( 2,007 ) $ 19,692 $ 43,187

Unallocated expenses

3 unchanged sentences

Consolidated income before income taxes $ 42,290

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

The following table presents a schedule of significant non-cash items included in segment income (loss) from operations by reportable segment for the three months ended March 31, 2025 and 2026 (in thousands):

For the three months ended March 31,

Depreciation and amortization

11 unchanged sentences

The Company is involved in litigation and other legal proceedings arising out of the ordinary course of its business.

There have been no material developments in the litigation and other legal proceedings that are described in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material developments in the litigation and other legal proceedings that are described in our Annual Report on Form 10-K for the year ended December 31, 2025, other than as described below.

On June 22, 2022, in litigation in which Capella University is not a party, Sweet, et al.

Miguel Cardona and the United States Department of Education , United States District Court for the Northern District of California, Case No.

3:19-cv-03674-WHA, the Department joined a proposed class settlement agreement that resulted in a blanket grant of automatic, presumptive relief for all borrower defense to repayment applications filed by students at any of approximately 150 different listed institutions, including Capella University, through June 22, 2022.

The class settlement agreement also provided certain expedited review of borrower defense claims related to schools excluded from the automatic relief list, as well as for borrowers who applied during the period after execution of the settlement and before final approval (“Post-Class Applicants”).

The district court granted final approval of the settlement on November 16, 2022.

Intervenors, including multiple intervening higher education institutions and companies, appealed the district court’s order.

Intervenors’ request to stay the district court’s final judgment approving the settlement pending resolution of the appeal was denied.

It is unclear whether the Department might seek recovery for the amounts of loans discharged pursuant to the automatic relief provision in the Sweet settlement.

In a July 25, 2022 filing in the same litigation, the Department stated that providing automatic relief to such borrowers “does not constitute the granting or adjudication of a borrower defense pursuant to the Borrower Defense Regulations, and therefore provides no basis to the Department for initiating a borrower defense recoupment proceeding against any institution identified” on the list.

The Department has indicated that any recoupment against institutions “could be imposed only after the Department initiated a separate, future proceeding, in accordance with regulations that require the Department to prove a sufficient basis for liability and provide schools with notice and an opportunity to be heard.” If the Department were to seek recovery for the amounts of automatically discharged loans of Capella University students under the Sweet settlement, Capella University would dispute and defend against such efforts.

At this time, the Company is unable to predict the ultimate outcome of Capella-related borrower defense applications.

If the Department were to successfully seek recovery for the amounts of discharged loans from Capella University in future proceedings, any such recovery could have a material adverse effect on our business.

As a result of the Fifth Circuit’s August 7, 2023 nationwide injunction of the 2022 Borrower Defense to Repayment (“BDTR”) Regulations, the Department announced that while it would not adjudicate any borrower defense applications under the 2022 Borrower Defense to Repayment Regulations unless and until the effective date is reinstated, it will continue to adjudicate applications under a prior version of the rule if required pursuant to a court ordered settlement.

For the Sweet Post-Class Applicants, the Department agreed to adjudicate such claims under the 2016 BDTR Rule, and pursuant to the Sweet settlement terms, if the Department did not adjudicate the applications by January 28, 2026, it would provide the applicants “Full Settlement Relief” (i.e., federal student loan(s) associated with the borrower’s attendance at the school will be discharged, the Department will refund any amounts paid to the Department on those loans, and the credit tradeline for those loans will be deleted from the

borrower’s credit report).

In November 2025, the Department requested an 18-month extension of the January 28, 2026 deadline for the Post-Class Applicants, which was denied by the district court;

the Department requested reconsideration in January 2026, which was also denied.

The Department has appealed to the Ninth Circuit;

an emergency motion to stay the district court order pending appeal was denied in March 2026, and the appeal is proceeding on the merits.

In 2023, the Department informed institutions that it would be notifying most schools of all applications received by the Department from June 23, 2022 to November 15, 2022 (constituting Sweet Post-Class Applicants) in a single send (and anticipated completing notification to all schools by approximately April 2024).

For further discussion of the Sweet litigation, please refer to Note 21, Litigation, in the consolidated financial statements appearing in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025.

In March 2024, the Australian Fair Work Ombudsman (“FWO”) issued a compliance notice to Torrens University (“Torrens”), alleging that Torrens had underpaid an academic employee for work performed between 2018 and 2024 in violation of the Higher Education Industry – Academic Staff Award (the “Award”), which prescribes minimum wages for academic employees under Australian law.

The compliance notice interpreted the Award to require that institutions compensate the academic employee for the marking of student assessments separately from and in addition to standard lecture delivery rates.

On April 24, 2024, Torrens filed suit in the Federal Court of Australia (“Federal Court”) seeking judicial review of the compliance notice, arguing that FWO’s interpretation of the Award was incorrect and that time spent marking student assessments properly constituted “associated working time” and therefore was included within the lecture delivery rate.

On June 16, 2025, the Federal Court set aside the compliance notice, finding that marking student assessments constituted “associated working time” when performed by lecturers in subjects they taught.

The FWO appealed that decision to the Full Federal Court (“Full Court”).

On March 17, 2026, the Full Court allowed the appeal, overturned the June 2025 judgment, and reinstated the compliance notice.

The Full Court concluded that, under the Award, lecture delivery rates compensate only for limited associated working time and that ordinary marking work generally constitutes a separate activity requiring separate payment.

Torrens filed an Application for Special Leave to appeal the Full Court’s decision to the High Court of Australia.

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

At the date of this report, it is not practicable to determine the financial impact arising from this matter.

Accordingly, no provision has been recognized in the condensed consolidated financial statements.

The Company will continue to assess the matter and will recognize a provision if an obligation becomes probable and can be reliably measured.

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

1 unchanged sentence

United States Regulation

One Big Beautiful Bill Act

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.

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.

For graduate students who are not and have not been professional students, the new aggregate graduate loan limit is $100,000, irrespective of any undergraduate borrowing.

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.

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:

(i) working adults in the same field of study in the state where the institution is located, (ii) working adults in the same field of study in the United States, or (iii) all working adults in the state where the institution is located.

If fewer than 50% of students at the institution reside in the institution’s state, then the median earnings will be calculated based on the lesser of the national average for (i) all working adults or (ii) working adults in the same field of study.

Both the undergraduate and graduate/professional accountability provisions apply to the cohort of students who completed the program four years prior, are working, are not enrolled at any institution, and who received Federal Direct Loan funds for enrollment in the program.

If a cohort is less than 30 students, the Secretary of Education may aggregate additional years of programmatic data.

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.

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, 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).

Current borrowers repaying loans under existing repayment options may, depending on the loan repayment type:

(i) continue to repay under the selected plan or choose a new plan within a prescribed period;

or (ii) be required to select from a limited set of plans as of a date certain.

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

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.

Effective July 1, 2026, students with a Student Aid Index that equals or exceeds twice the maximum Pell Grant amount will be ineligible for Pell Grants.

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, 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.

In addition, they must be approved by the state governor, aligned with high-demand, high-skill or high-wage jobs, have at least 70% completion and job placement rates, and tuition must be less than the value-added earnings of graduates who received the Workforce Pell Grant.

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

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

A requirement of the Higher Education Act, commonly referred to as the 90/10 Rule, applies only to proprietary institutions of higher education, which include Capella University and Strayer University.

Under this rule, a proprietary institution is prohibited from deriving more than 90% of its revenues (as revenues are computed under the Department of Education’s methodology) from federal funds on a cash accounting basis (except for certain institutional loans) for any fiscal year.

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.

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.

Proprietary institutions of higher education that violate the 90/10 Rule for two consecutive fiscal years will become ineligible to participate in Title IV programs for at least two fiscal years and will be required to demonstrate compliance with Title IV eligibility and certification requirements for at least two fiscal years prior to resuming Title IV program participation.

In addition, the Department of Education discloses on its website any proprietary institution of higher education that fails to meet the 90/10 requirement and reports annually to Congress the relevant ratios for each proprietary institution of higher education.

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021, which included a change to the 90/10 methodology to include all federal funding.

The Department of Education promulgated new regulations regarding, among other things, the 90/10 rule as part of the Institutional and Programmatic Eligibility negotiated rulemaking and the committee reached consensus on the topic in March 2022.

The Department released final regulations on October 27, 2022.

The regulatory changes require proprietary institutions to count all “federal education assistance funds” as federal revenue in the 90/10 calculation for fiscal years beginning on or after January 1, 2023.

The preamble to the final rule and subsequent sub-regulatory guidance prohibited the inclusion of non-Title IV eligible programs offered in part or in full through distance education or at unapproved locations in the 10% calculation, but this language was effectively rescinded by new interpretive guidance published by the Department on July 7, 2025.

On December 21, 2022, the Department released a list of federal agencies and federal education assistance programs that must be included as federal revenue in the 90/10 calculation.

Such agencies include the U.S.

Department of Defense (military tuition assistance) and the Department of Veterans Affairs (veterans education benefits).

The Department indicated that it will publish periodic updates to the list as needed.

In addition, certain members of Congress have proposed to revise the 90/10 Rule to reduce the limit on federal funding to 85% of total revenue.

In the context of Higher Education Act reauthorization, defense bills and appropriations bills, other members of Congress have proposed legislation that would eliminate the 90/10 Rule.

The Company cannot predict whether or how legislative or regulatory changes will affect the 90/10 Rule.

Accreditation

On March 16, 2026, the Department of Education announced the continued recognition of the Middle States Commission on Higher Education (“Middle States” or “Middle States Commission”) until May 31, 2028.

Middle States accredits Strayer University.

The Middle States Commission will be required to submit two monitoring reports due six and 12 months from the March 16, 2026 letter date.

These monitoring reports are tied to Middle States’s suspended standards and references to diversity, equity, and inclusion.

Borrower Defenses to Repayment

On March 30, 2026, the Department issued an Electronic Announcement regarding borrower defense applications that institutions recently had begun to receive.

The Department informed institutions that these borrower defense applications are unrelated to the Sweet settlement and will be adjudicated under the relevant BDTR rule based on the date loans were first disbursed to the borrower.

Specifically, the Department indicated that it is notifying institutions of applications that will be adjudicated under the 1994 BDTR Rule or the 2016 BDTR Rule.

Under the 1994 BDTR Rule, for Direct Loans disbursed prior to July 1, 2017, a borrower may assert a defense to repayment if the institution committed an act or omission that relates to the making of the loan for enrollment at the school or the provision of educational services for which the loan was provided, and would give rise to a cause of action against the institution under applicable state law.

Under the 2016 BDTR Rule, for Direct Loans disbursed after July 1, 2017, a borrower may assert a defense to repayment if the institution committed an act or omission that relates to the

making of the loan for enrollment at the school or the provision of educational services for which the loan was provided and:

(1) the borrower obtained a state or federal court judgment against the institution;

(2) the institution failed to perform on a contract with the student;

and/or (3) the institution committed a “substantial misrepresentation” on which the borrower reasonably relied to his or her detriment.

The Department indicated in the Electronic Announcement it has attempted to batch the applications in a single send and to issue batches of notifications periodically.

State Authorization Reciprocity Agreement (SARA)

Capella University and Strayer University participate in the State Authorization Reciprocity Agreement (“SARA”), which allows the universities to enroll students in distance education programs in each SARA member state, including 49 states, the District of Columbia, Puerto Rico, and the U.S.

Virgin Islands.

Each of the universities applies separately to non-SARA member states (i.e., California) for authorization to enroll students, if such authorization is required by the state.

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.

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.

Capella University and Strayer University participate in the State Authorization Reciprocity Agreement (“SARA”), enabling enrollment of distance education students in SARA member states.

The universities apply separately to non-SARA states (e.g., California) for required authorization.

Failure to comply with SARA requirements or state licensing for distance education in non-SARA states could result in loss of SARA participation or state authorization for distance education there.

The National Council for State Authorization Reciprocity Agreements (“NC-SARA”) considers potential policy changes each year.

Past proposals, including more stringent standards for participation of for-profit institutions or exclusion of for-profit institutions from participation, were not adopted, but illustrate the risk that future changes could materially adversely affect Capella University, Strayer University, and the Company.

For example, exclusion from SARA would require seeking authorization in each state, increasing costs and risking denials in some jurisdictions.

On January 21, 2026, NC-SARA initiated its 2026 policy manual modification process with a call for proposals for SARA policy changes.

The call for proposals ended February 10, 2026 and yielded 33 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 24, 2026, NC-SARA will hold its public comment forum to seek input on these proposed changes.

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

between March 10, 2026 and April 9, 2026 (now closed), and between June 9, 2026 and July 7, 2026.

NC-SARA’s regional compacts/regional steering committees and the NC-SARA board of directors will vote on each proposal presented by September 2, 2026, and October 28, 2026, respectively.

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

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.

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.

Negotiated Rulemaking

On April 4, 2025, the Department announced its intention to host public hearings and convene one or more negotiated rulemaking committees to prepare proposed Title IV regulations.

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 (“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.

Department of Education released its final rule regarding the implementation of Title IX, which prohibits discrimination on the basis of sex in education programs that receive funding from the federal government (the “2024 Title IX Rule”).

The 2024 Title IX Rule applies to all forms of sex-based harassment (not only sexual harassment);

clarifies that Title IX’s prohibition against sex discrimination includes discrimination on the basis of sex stereotypes, sex characteristics, pregnancy or related conditions, sexual orientation, and gender identity;

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.

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

Capella University and Strayer University were named among nearly 700 schools in one such order on July 15, 2024.

Dep’t of Educ.

5:24-cv-4041 (D.

Except where enjoined, the 2024 Title IX Rule otherwise became effective on August 1, 2024.

On January 9, 2025, in State of Tennessee et al v.

Cardona , 2:24-cv-00072, the U.S.

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 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.

On January 20, 2025, President Trump issued Executive Order 14168 “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government” ordering, among other matters, all agencies to enforce laws governing sex-based rights, protections, opportunities, and accommodations consistent with definitions provided in the executive order.

The executive order defines “sex” as a binary classification that does not include “gender identity” and requires agencies to take various actions consistent with that position.

On April 4, 2025, the Department and the U.S.

Department of Justice jointly announced a “Title IX Special Investigations Team” (the “Title IX SIT”) in response to what the agencies describe as a “staggering” volume of Title IX complaints.

The Title IX SIT is intended to streamline Title IX investigations conducted by the federal government by leveraging teams with personnel from both agencies to coordinate on investigation and enforcement.

The Accountability in Higher Education and Access through Demand-driven Workforce Pell (“AHEAD”) Committee addressed Workforce Pell, institutional and programmatic accountability, and other issues, and met for two multi-day sessions between December 2025 and January 2026.

The committee reached consensus on the Workforce Pell and accountability packages.

On March 9, 2026, the Department published proposed Workforce Pell regulations consistent with the consensus language and accepted public comment through April 8, 2026.

The proposed regulations implement the One Big Beautiful Bill Act’s (“OBBBA”) provisions regarding establishment of a new Workforce Pell program beginning July 1, 2026, that will permit Pell Grants to be used for certain short-term workforce training programs offered by eligible institutions;

and changes to the Pell Grant program such that effective July 1, 2026, eligible students will be ineligible for a Pell Grant if their non-federal aid equals or exceeds their cost of attendance.

The proposed regulations also invite public comment on certain topics, including the framework for measuring workforce program outcomes and approaches to prevent an institution’s “gaming” of the Pell Grant limitation provision.

On April 17, 2026, the Department released proposed regulations on the accountability packages consistent with the consensus language and will accept public comment until May 20, 2026.

The accountability packages implement the OBBBA’s separate accountability framework, effective July 2026, for Federal Direct Loan eligibility at the program level, with separate frameworks based on program type and in certain cases cohort size.

One-year failures of the relevant metrics trigger risk notifications;

the Department is required to provide an appeals process for institutions, with eligibility continuing during appeals.

Programs that fail the relevant metrics in two out of three consecutive years become ineligible for Federal Direct Loans, and ineligible programs may reapply after two years per Secretary-established rules.

The proposed regulations permit an institution with a one-year failure of the relevant metrics to seek a “voluntary program closeout” under which it would meet certain program discontinuation requirements in exchange for retaining Direct Loan eligibility for no more than three years while currently enrolled students complete their program.

Under the proposed regulations, if more than half of an institution’s Title IV recipients or more than half of its Title IV, HEA funds are from low-earning programs in two out of any three consecutive award years, the Department would place the institution on a provisional program participation status and each of the institution’s low-earning outcome programs would be ineligible for all Title IV, HEA funds.

The Company is unable to predict the ultimate outcome of the rulemaking process or what guidance the Department may issue regarding how schools are to implement OBBBA’s legislative changes.

On January 26, 2026, the Department announced its intent to establish the Accreditation, Innovation, and Modernization negotiated rulemaking committee to develop proposed regulations on accreditation-related topics.

The committee convened April 13-17, 2026 and will reconvene May 18-22, 2026.

Under Title VI of the Civil Rights Act of 1964, institutions receiving federal financial assistance are prohibited from discriminating on the basis of race, color, or national origin.

12 unchanged sentences

potential litigation activities, regulatory actions, and sub-regulatory guidance;

and other strategies to end illegal DEI and DEIA discrimination and preferences and comply with federal civil rights laws.

Litigation challenging Executive Order 14173 was brought in federal district court;

after a preliminary injunction was granted enjoining portions of the executive order, an appeals court stayed the injunction pending appeal.

and other strategies to end illegal DEI and DEIA discrimination and preferences and ensure compliance with federal civil rights laws.

On July 29, 2025, the Attorney General released “Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination,” which describes “the significant legal risks of initiatives that involve discrimination based on protected characteristics” and provides “non-binding best practices to help entities avoid the risk of violations.” Separately, the Department of Justice has indicated that, in certain contexts, compliance with federal anti-discrimination laws may be treated as material to the government’s payment decisions for purposes of the False Claims Act in connection with federal grants and contracts.” Various lawsuits challenging Executive Order 14173 were filed in federal district court;

although the U.S.

District Court for the District of Maryland initially granted a preliminary injunction enjoining portions of the executive order, the U.S.

Court of Appeals for the Fourth Circuit stayed the injunction and, on February 6, 2026, vacated the injunction and remanded the case to the district court.

On February 14, 2025, the Department of Education issued a DCL setting forth the anti-discrimination obligations of institutions that receive federal financial assistance.

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

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

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

The DCL further noted that institutions that fail to comply with federal civil rights law may, consistent with applicable law, face potential loss of federal funding.

4 unchanged sentences

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.

Court of Appeals for the Fourth Circuit, but the appeal was dismissed at the Department’s request on January 22, 2026.

Following the dismissal of the appeal, the vacatur of the DCL, FAQs and certification requirement is final and the guidance is unenforceable.

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.

The Department has continued to initiate additional Title VI investigations, which are not predicated on the vacated DCL or FAQs, but instead are based on the Department’s interpretation of existing statutory and regulatory authority.

Australian and New Zealand Regulation

6 unchanged sentences

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.

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, and passed both houses of Parliament on November 28, 2025.

The legislation, 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