Q2 2024 Strategic Education Inc Earnings Call Transcript
Key Points
- Strategic Education Inc (STRA) reported a 9% increase in revenue to $313 million for the second quarter of 2024.
- Operating income grew by more than 60% to $44 million, with an increase in operating margin by 460 basis points.
- U.S. higher education segment saw an 8% growth in total enrollment, with employer-affiliated enrollments growing by 17%.
- Education technology services segment experienced a 26% increase in revenue, with Sophia Learning's revenue growing by 40%.
- Australia and New Zealand segment posted a 10% revenue growth on a constant currency basis, driven by higher enrollment and revenue per student.
- Operating expenses are expected to be slightly higher than previously planned due to increased investments in the second half of 2024.
- The operating margin expansion is likely to be below the initially projected 200 basis points, expected to be between 150 and 175 basis points.
- There is uncertainty regarding the impact of FAFSA delays on future enrollment, particularly in the largest enrollment intake quarter.
- The timing of visa approvals for international students in Australia has started to lengthen, potentially affecting new enrollments.
- Revenue growth in the U.S. higher education segment is expected to moderate to a notional level of 5% to 10% over the long term.
Welcome to Strategic Education's Second Quarter 2024 Results Conference Call. (Operator Instructions) As a reminder, today's program is being recorded.
And now I'd like to introduce your host for today's program, Terese Wilke, Director of Investor Relations for Strategic Education. Miss Wilke, please go ahead.
Thank you. Hello, everyone, and welcome to Strategic Education's conference call, in which we will discuss second 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
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