Strategic Education Inc. (NASDAQ:STRA) Q3 2023 Earnings Conference Call November 2, 2023 10:00 AM ET

Company Participants

Terese Wilke - Director of Investor Relations

Karl McDonnell - President and Chief Executive Officer

Daniel Jackson - Executive Vice President and Chief Financial Officer

Conference Call Participants

Jeff Silber - BMO Capital Markets

Jasper Bibb - Truist Securities

Heather Balsky - BofA

Operator

Good day, and thank you for standing by. Welcome to Strategic Education’s Third Quarter 2023 Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to turn the call over to Terese Wilke, Director of Investor Relations for Strategic Education. Ms. Wilke, please go ahead.

Terese Wilke

Thank you. Hello, everyone, and welcome to Strategic Education’s conference call in which we will discuss third quarter 2023 results. With us today are Robert Silberman, Chairman; Karl McDonnell, President and Chief Executive Officer; and Daniel Jackson, Executive Vice President and Chief Financial Officer. Following today’s remarks, we will open the call for questions.

Please note that this call may include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements are based on current expectations and are subject to a number of assumptions, uncertainties and risks that Strategic Education has identified in today’s press release that could cause actual results to differ materially. Further information about these and other relevant uncertainties may be found in Strategic Education’s most recent Annual Report on Form 10-K, the 10-Q to be filed and other filings with the Securities and Exchange Commission as well as Strategic Education’s future 8-Ks, 10-Qs and 10-Ks. Copies of these filings and the full press release are available for viewing on the website at strategiceducation.com.

And now I’d like to turn the call over to Karl. Karl, please go ahead.

Karl McDonnell

Thank you, Terese, and good morning, everyone. SEI’s third quarter financial results that we released this morning reflect strong continued momentum as our performance has substantially improved over the course of the past year. Let me just say at the outset, all of my remarks with respect to our financial results are referred to in constant currency.

For the third quarter, SEI’s revenue increased 10% from the prior year and was another strong quarter of sequential revenue growth. The revenue growth was driven by continued strong enrollment within US Higher Education, another strong quarter of growth in our Education, Technology & Services segment and improved revenue per student in our Australian/New Zealand segment. Our operating expenses increased just 2% from the prior year, in line with our expectations, and our operating income more than doubled from $12 million to $33 million. And lastly, on the use of cash item, we did repay $40 million of outstanding debt on our revolver, leaving us with $61 million of debt on the revolver.