Strategic Education, Inc. (NASDAQ:STRA) Q1 2024 Earnings Conference Call April 25, 2024 10:00 AM ET

Company Participants

Terese Wilke - Director of Investor Relations, Strategic Education
Robert Silberman - Chairman
Karl McDonnell - President and Chief Executive Officer
Daniel Jackson - Executive Vice President and Chief Financial Officer

Conference Call Participants

Jeffrey Silber - BMO Capital Markets
Jasper Bibb - Truist Securities
Emily Marzo - BofA

Operator

Thank you for standing by, and welcome to the Strategic Education’s First Quarter 2024 Results Conference Call. [Operator Instructions] As a reminder, today’s program is being recorded.

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

Terese Wilke

Thank you. Hello, everyone, and welcome to Strategic Education’s conference call in which we will discuss first quarter 2024 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. Our first quarter 2024 results reflect continued strength across all of our segments. And before we begin, and as is normally the case, I’d like to start by pointing out that all of my references to our financial results are to our adjusted results, and they assume a constant currency for foreign exchange purposes.

For the first quarter, our revenue grew 14% to $292 million. Our operating expenses grew 3%, which was in line with our expectations and our operating income grew by more than 4 times to $36 million. Our operating margin increased 910 basis points. And during the quarter, we generated an incremental $28 million of operating income from $36 million of incremental revenue. That 78% marginal contribution is a bit more than we would normally expect and it reflects the fact that many of our planned investments this year are time to occur in the second half of the year to support our growth initiatives for 2025. During the quarter, we generated $1.11 earnings per share, which was more than a 350% increase.