Q4 2025 Legacy Education Inc Earnings Call

September 25, 2025

Operator: Earnings Conference Call. Today's call is being recorded and broadcasted live. It will also be archived on the Legacy Education website for future reference. To kick off our call, I will turn it over to Nicole Joseph, Senior Vice President of Legacy Education Inc.

Nicole Joseph: Thank you. Hello, everyone. Legacy Education has issued a news release reporting its financial results and corporate developments for the Q4 and full fiscal year ended 30 June 2025. The release is available in the investor relations section of our corporate website at legacyed.com. With us today on the call are LeeAnn Rohmann, Chief Executive Officer, and Brandon Pope, Chief Financial Officer. On today's earnings call, statements made by Legacy's management regarding the company's business, which are not historical facts, may be forward-looking statements as identified in federal securities laws. The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions, are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance.

Nicole Joseph ]: Thank you. Hello, everyone. Legacy Education has issued a news release reporting its financial results and corporate developments for the Q4 and full fiscal year ended 30 June 2025. The release is available in the investor relations section of our corporate website at legacyed.com. With us today on the call are LeeAnn Rohmann, Chief Executive Officer, and Brandon Pope, Chief Financial Officer. On today's earnings call, statements made by Legacy's management regarding the company's business, which are not historical facts, may be forward-looking statements as identified in federal securities laws. The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions, are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance.

Nicole Joseph: The company cautions you that these statements reflect current expectations about the company's future performance or events and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the company's control, that may influence the accuracy of the statements and projection upon which the statements are based. Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the Risk Factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements are based on the information available at the time of those statements are made and management's good faith belief as of the time with respect to future events.

Nicole Joseph ]: The company cautions you that these statements reflect current expectations about the company's future performance or events and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the company's control, that may influence the accuracy of the statements and projection upon which the statements are based. Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the Risk Factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements are based on the information available at the time of those statements are made and management's good faith belief as of the time with respect to future events.

Nicole Joseph: All forward-looking statements are qualified in their entirety by this cautionary statement. Legacy undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise after the date thereof. I will now hand the call over to LeeAnn Rohmann, CEO of Legacy Education. LeeAnn, to you.

Nicole Joseph ]: All forward-looking statements are qualified in their entirety by this cautionary statement. Legacy undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise after the date thereof. I will now hand the call over to LeeAnn Rohmann, CEO of Legacy Education. LeeAnn, to you.

LeeAnn Rohmann: Thanks, Nicole. Good afternoon, everyone. Welcome to Legacy Education's Q4 and Fiscal Year 2025 Earnings Call. I'm joined by Brandon Pope, our Chief Financial Officer. Fiscal 2025 has been a pivotal year for Legacy Education, reinforcing our leadership in the essential healthcare education sector by delivering outstanding financial results and advancing initiatives that profoundly impact on our students, employers, and communities. In a sector grappling with over 1.8 million annual job openings through 2032, as projected by the Bureau of Labor Statistics, Legacy is at the vanguard, equipping individuals with the skills to thrive in high-demand healthcare roles. Our commitment to excellence in education not only drives personal success for our students, but also bolsters the nation's healthcare infrastructure, addressing acute workforce shortages with urgency and innovation.

LeeAnn Rohmann: Starting with the Q4, we delivered revenue of $17.9 million, up 40.8% year-over-year, fueled by a 15.7% increase in new student starts. This performance capped a transformative fiscal year where revenue climbed 39.5% to $64.2 million, propelled by a 41.8% surge in enrollment to 3,101 students and a 26.9% rise in new student starts to 3,194. These achievements represent our 12th consecutive quarter of double-digit revenue growth, demonstrating our team's exceptional execution and the enduring demand for our programs.

LeeAnn Rohmann: Our graduate success stories underscore our impact with an 81.8% NCLEX pass rate in nursing and placement rates that are averaging 74.3% through ACCET and 74.6% through ABHES, our accrediting agencies. We're producing job-ready professionals in fields like nursing, diagnostic medical sonography, and surgical technology, just to name a few. The seamless integration of the Contra Costa Medical Career College has amplified our reach, adding 468 students and diversifying our offerings. We are energized by our strategic developments this year, which are accelerating our momentum. We've secured approvals for three new degree programs and two certificate programs, expanding our curriculum to meet evolving market needs. Achieving initial accreditation from the National League for Nursing Commission for Nursing Education Accreditation, otherwise known as NLN CNEA for our RN-BSN track, is a game changer.

LeeAnn Rohmann: It's enhancing our nursing education portfolio and opening doors for more students to advance their careers. Additionally, I'm excited that we have strengthened our governance by appointing two new board members and establishing an advisory board, bringing fresh expertise to guide our expansion and innovation efforts. These milestones are propelling us forward with renewed vigor. Our six California campuses located in Lancaster, Bakersfield, Temecula, Salinas, Pasadena, and Antioch, are ideally positioned in thriving healthcare hubs, supported by our cutting-edge hybrid learning model that blends advanced simulation technology with hands-on training for optimal accessibility and outcomes. We're actively exploring additional branches and acquisitions to extend our transformative education even further. Financially, Q4 net income reached $1.2 million, up 27.6%. On expenses, I want to directly address one item. In Q4, we increased our AR reserve by approximately $700,000.

LeeAnn Rohmann: This was to address the fact that we saw a softness in student payments related to our graduate students only. This $700,000 G&A expense charge is tied to graduated borrowers who fell behind in payments. I want to be clear, we're not writing this off. Instead, we're taking an increased reserve to be proactive and conservative by addressing this in Q4. We want to demonstrate our commitment to transparency, discipline, and protecting long-term shareholder value. Brandon will cover this further in his remarks. Even with this charge in Q4, we capped off a year of record growth and momentum. For the full year, net income grew $7.5 million or $0.59 per diluted share, and adjusted EBITDA increased 31.3% to $11 million.

LeeAnn Rohmann: Our robust balance sheet, featuring $20.3 million in cash and negligible debt, empowers us to invest boldly in growth. I am immensely proud of our dedicated team for their role in these accomplishments, which extend beyond numbers to real-world change. With that, I want to pass this over to Brandon for a deeper dive into our financials. Brandon.

Brandon Pope: Thank you, LeeAnn. In fiscal 2025 marked a year of exceptional financial and operational progress, highlighting our disciplined approach and scalable model. I'll begin with Q4 results, followed by full year compared to fiscal 2024, drawing from our press release in Form 10-K. Our Q4 2025 financial highlights begin with revenue, which rose 40.8% to $17.9 million from $12.8 million, driven by increased enrollment. Net income increased to $1.2 million from $1 million last year. EBITDA was $2.1 million, up 133% from $0.9 million last year.

Brandon Pope: In expenses, educational services is $9.4 million versus $8.5 million due to our increased staffing required to support increased enrollment, increased rents, increased externship fees, and our investment into our new programs. General and administrative was $6.3 million versus $3.3 million in prior year, reflecting our investment in marketing, professional fees, as well as the increased AR reserve LeeAnn mentioned earlier. We increased our AR reserve from 5.0% to 9.8% due to our annual AR reserve analysis that indicated a slowness in graduate student payments. Although we have improved efficiencies in financial aid processing and active student payments while in school, we took a very conservative reserve to address this analysis.

Brandon Pope: For fiscal year 2025, financial operating results include revenue growth at 39.5% to $64.2 million from $46 million in the prior year, supported by a 41.8% enrollment increase to 3,101 students and a 26.9% rise in new student starts to 3,194. Net income is up 47 percent, 0.3 percent to $7.5 million or $0.59 per diluted share from $5.1 million or $0.53 per diluted share last year. EBITDA is up 61% to $10.4 million from $6.5 million, and adjusted EBITDA is up $31.3 million to $11 million from $8.4 million last year.

Brandon Pope: In expenses, educational expenses was $34.2 million versus $26.4 million due to our increased staffing required to support increased enrollment, increased rent, externships, and again, our investment into our new programs. General and administrative, $19.3 million versus $13.0 million, again, due to increased marketing and professional fees and the aforementioned bad debt expense. Our balance sheet, we have cash and cash equivalents exceeding $20 million to $20.3 million. Working capital is $23.9 million. Our total assets are $69.2 million, and stockholders' equity at $41 million. Cash flow was $7.8 million generated from operating activities with minimal debt. Our solid financial position fuels strategic initiatives like program expansion and acquisition. I'll now turn it over to Leighanne, CEO, for our strategic outlook and closing remarks.

LeeAnn Rohmann: Thank you, Brandon. As you can see, Legacy Education is energized and ideally positioned to harness the vibrant opportunities in the healthcare education sector, indispensable for tackling workforce gaps and enhancing community health. Our strategic roadmap is geared towards amplifying our influence and achieving enduring growth. We're gonna continue the enrollment momentum through sophisticated digital marketing and robust employer collaborations. We'll capitalize on our 26.9% student starts growth, focusing on our high-potential regions. We're gonna continue with our curriculum expansion. We're thrilled to roll out our newly approved 3 degree and 2 certificate programs alongside the prestigious NLN CNEA accreditation for our RN-BSN track. These breakthroughs are supercharging our nursing offerings and attracting top talent. We will continue to add new programs that are needed for the areas that we serve.

LeeAnn Rohmann: In our operational innovation, we continue with our hybrid model, enriching it with state-of-the-art simulation and edtech boosts efficiency and student success while scaling seamlessly. With our governance and expansion, I can't tell you how excited I am about the two new dynamic board members and our freshly formed advisory board. We're infusing expert insights to propel branching and M&A, targeting accretive opportunities to widen our footprint, all backed by our strong balance sheet. In this resilient sector, our adherence to Title IV funding requirements, strong compliance culture, a focus on superior outcomes, and market-aligned programs equip us to thrive amid regulatory shifts. Compliance is not just a requirement for us, it's a competitive advantage. As Washington advances the One Big Beautiful Bill, comprehensive legislation aimed at expanding access, workforce development, and funding pathways, we believe Legacy Education is uniquely positioned to benefit.

LeeAnn Rohmann: With our scale, our compliance record, and proven ability to deliver job-ready graduates, we stand at the intersection of policy support and market demand. The combination of the operational execution, compliance strength, human impact, and policy tailwinds give us confidence that as we've moved into 2026, this will fuel our optimism for continued excellence. I'll turn the call over to the operator for some Q&As at this time. Operator?

Operator: Thank you, Leighanne. We will begin the question and answer session where selected analysts and investors will be invited to ask questions. Our first question comes from Mike Grondahl with Northland Securities. You may proceed with your question.

Operator: Thank you, LeeAnn. We will begin the question and answer session where selected analysts and investors will be invited to ask questions. Our first question comes from Mike Grondahl with Northland Securities. You may proceed with your question.

Mike Grondahl: Hey, Leighanne and Brandon. Hey, what was the starts number in the quarter? I got the ending enrollment of 3,101. What was the starts number just for the quarter?

Mike Grondahl: Hey, LeeAnn and Brandon. Hey, what was the starts number in the quarter? I got the ending enrollment of 3,101. What was the starts number just for the quarter?

Brandon Pope: 7:23.

Brandon Pope: 723.

LeeAnn Rohmann: 723, Mike, and it's great to hear from you out there.

Mike Grondahl: Okay. The new programs, the three new degree programs and the two certification programs, when do those start? Is there a rough range of revenue that cohort might deliver in 2026 or 2027? How do we think about those?

LeeAnn Rohmann: Mike, we don't give forward projections, but what I can tell you is that we did indicate in the press release that, you know, we anticipate starting these programs in October. And we have built a pro forma budget around those.

Mike Grondahl: Got it. Is I don't wanna forward guidance or anything, but like, could those programs start 100 students next year? A couple hundred? Just, I guess the size.

LeeAnn Rohmann: Sure.

Mike Grondahl: The capacity that you've created, maybe that would be helpful too.

LeeAnn Rohmann: Sure. We basically average in terms of in our starts for our degree-granting programs that we can set up to 30 students in those starts. For each of our degree programs on the campuses to which we started, you know, you can reference the fact that, you know, when we open a class, we can set up to 30 students in those. In each of those degree-granting classes, we can do something very similar to that in our certificate programs.

Mike Grondahl: Got it. How many starting dates throughout the year? Is there just one, or would these have a second start date?

LeeAnn Rohmann: Those typically, and this information, our starts are located like on our website and part of like where the public can see. You know, we typically start our degree programs, a couple of times a year. About every four to six months, we start our degree programs, and we start our certificate programs roughly about every eight weeks.

Mike Grondahl: Okay. That's helpful. The $700,000 reserve you talked about. Can you give us a little bit of color? What is the outstanding balance that you took that against? Is that, you know, multiple millions of dollars? You took a $700,000 reserve. What was the balance? How, you know, roughly how many students in that cohort? A little more color there would be helpful.

Brandon Pope: Yeah. We do our, we do analysis annually, do analysis of all of our students, whether they're active, inactive, actually do it at sometimes even at a program level. We'd also do it on a grad level. Our experience is that grad students pay pretty timely. We don't really focus our efforts on that collection rate too much. We focus it on active students within our financial aid processing and payments while they're in school. We did this analysis, we determined that there is a significant or not significant, a amount of graduate students who still are making payments. Part of that is reflective in our balance sheet in the long-term area, which increased about $600,000 to basically $1.9 million, I believe.

Brandon Pope: That is what that's based on. Total, all grad students is about two and a half million dollars. We reserved some of that regarding the students that are late or slowing in their payments. That's about what that reserve analysis indicated for us. Again, it is something that we look at. We'll probably look at every quarter now versus annually and see if we see any trends like that. It's a very conservative reserve estimate. That's why we didn't write it off. We just reserved for it. We have internal expectations of having a process within us to address this particular thing. Like anything we do, we'll attack that vigorously.

Brandon Pope: We believe that we will, at least, get enough to recover that reserve, if not more. We thought it'd be important to take a conservative approach to that reserve.

Mike Grondahl: Okay. One more. Just the tax rate came in at about 45%. I think we were at 28%. Any reason for the tax rate being so high, how does it look going forward?

Brandon Pope: Yeah. The tax rate, it wasn't 45%, it was 31%, 32%. It had to do with a return to provision adjustment last year. Last year was approximately 28%. Really, as we did a return to provision adjustment, it should have been closer to 30 and some change. So this increase this year is the representative of that. For this fiscal year, it'd be around 30%.

Mike Grondahl: Okay. Okay. Thank you.

LeeAnn Rohmann: Thank you, Mike. Great questions.

Operator: Our next question comes from Jeffrey Cohen from Ladenburg Thalmann. You may proceed with your question.

Jeffrey Cohen: Hi, LeeAnn and Brandon.

LeeAnn Rohmann: Hi, Jeff.

Jeffrey Cohen: How are you?

LeeAnn Rohmann: Good. How are you?

Jeffrey Cohen: Pretty good. A few questions. Firstly, I was hoping I'd hear the word cardiac or neuro. Any commentary there at all?

LeeAnn Rohmann: They are active programs of which you know that we've already been enrolling in, and we have added to our additional campuses. Cardiac is really doing well for us.

Jeffrey Cohen: Got it. With now your seven facilities, are you capacity constrained at any point? I mean, the growth rate is the growth rate, but are you shy on square footage? Do you need more buildings or square footage to accommodate the organic growth?

LeeAnn Rohmann: Where we have gotten the approvals in the Central Coast College, remember we added 25,000 square feet to that, we are definitely well-positioned there. As you saw where Brandon talked about the increase in expenses and some of that was due to rent. That is where we have taken in our existing Lancaster, Temecula locations, and we have added additional square footage to support the lab additions that we are putting into for these new program approvals. The way that we're delivering the education in the hybrid model, with we've taken on additional square footage for the labs, but we've got things very well under control as it relates to the students are learning online and just coming into the labs.

Jeffrey Cohen: Okay, I got it. I guess maybe a question for Brandon on Q4, I understand the AR is $700,000, but were there any one-timers in effect for that G&A numbers a little bit higher than what we thought? Was there any one-time or seasonal call-outs there to speak of?

Brandon Pope: Yeah, there's some seasonality in that in professional fees that relates to legal, regulatory, audit, and we also had some enhancements in our SIS system, things of that nature that are somewhat one time are seasonal in nature. That included in our re-reflected in our margin.

Jeffrey Cohen: Got it. I know I'm gonna get no forward-looking statements out of you as far as revenues go, but maybe, Brandon, you could remind us of the seasonality of your business and how that relates to each quarter, and particularly the upcoming Q1, which is September quarter.

Brandon Pope: Yeah. You know, as you know, we can't really do that, but there's certainly seasonality involved when it comes to our Q1 and Q2. Our Q1, generally, it's a pretty solid quarter. Our Q2, which is into summer, very seasonal because of the holidays. Generally, that's a depressed quarter. We have a pretty robust Q3 and a middle-of-the-road Q4. That seasonality will still continue. We, you know, again, our growth rate, you can kinda presume a continued growth rate in within the seasonality.

Jeffrey Cohen: Okay. I think that helps. No, I think that does it for us on the question front. It's a solid readout, and thank you for the commentary.

LeeAnn Rohmann: Thank you, John.

LeeAnn Rohmann: Thank you, Jeffrey.

Brandon Pope: Thank you.

Mike Grondahl: As there are no further questions, I will now turn the call back to LeighAnn Roman for closing remarks.

LeeAnn Rohmann: Thank you, operator, and thank you all for joining us. Fiscal 2025 was a landmark year for Legacy Education. With strong financials and the strategic leaps that affirm our commitment in a crucial sector. Beyond the metrics, we're catalyzing change, empowering thousands of students for fulfilling healthcare careers, and fortifying essential services nationwide. I'd like to thank our passionate team, our students, and our stakeholders. They're the driving force behind this success. To our investors, your confidence inspires us. We're poised to innovate, expand, and deliver exceptional value, shaping a brighter future in healthcare education. I wanna thank you again for being part of the Legacy Education journey and wish you a great rest of the day.

Mike Grondahl: Ladies and gentlemen, this concludes today's call. Thank you for joining us, and have a great day.

Speaker #1: Conference call. Today's call is being recorded and broadcasted live. It will also be archived on the Legacy Education website for future reference. To kick off our call, I will turn it over to Nicole Joseph, Senior Vice President of Legacy Education Incorporated.

Speaker #2: Thank you, and hello everyone. Legacy Education has issued a news release reporting its financial results, and corporate development for the fourth quarter in full fiscal year ended June 30, 2025.

Speaker #2: The release is available in the investor relations section of our corporate website at legacyed.com. With us today on the call are LeeAnn Rohmann, Chief Executive Officer and Brandon Pope, Chief Financial Officer.

Speaker #2: On today's earnings call, statements made by Legacy's management regarding the company's business, which are not historical facts, may be forward-looking statements as identified in federal securities laws.

Speaker #2: The words "may", "will", "expect", "believe", "anticipate", "project", "plan", "intend", "estimate", and "continue", as well as similar expressions, are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance.

Speaker #2: The company cautions you that these statements reflect current expectations about the company's future performance or events and are subject to a number of uncertainties risk and other influences.

Speaker #2: Many of which are beyond the company's control. That may influence the accuracy of the statements and projection upon which the statements are based. Factors that may affect the company's results include but are not limited to the risk and uncertainties discussed in the risk factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q.

Speaker #2: Filed with a securities exchange commission. Forward-looking statements are based on the information available at the time of those statements. Are made and management's good faith belief as of the time with respect to future events.

Speaker #2: All forward-looking statements are qualified in their entirety by this cautionary statement, and Legacy undertakes no obligation to publicly revise or update any forward-looking statements.

Speaker #2: Whether as a result of new information, future events, or otherwise, after the date thereof. I will now hand the call over to LeeAnn Rohmann, CEO of Legacy Education.

Speaker #2: LeeAnn, to you.

Speaker #3: Thanks, Nicole, and good afternoon everyone. Welcome to Legacy Education's fourth quarter and fiscal year 2025 earnings call. I'm joined by Brandon Pope, our Chief Financial Officer.

Speaker #3: Fiscal 2025 has been a pivotal year for Legacy Education. Reinforcing our leadership in the essential healthcare education sector by delivering outstanding financial results and advancing initiatives that profoundly impact on our students, employers, and communities.

Speaker #3: In a sector grappling with over 1.8 million annual job openings through 2032, as projected by the Bureau of Labor and Statistics, Legacy is at the vanguard equipping individuals with the skills to thrive and high-demand healthcare roles.

Speaker #3: Our commitment to excellence in education not only drives personal success for our students but also bolsters the nation's healthcare infrastructure addressing acute workforce shortages, with urgency and innovation.

Speaker #3: Starting with the fourth quarter, we delivered revenue of $17.9 million, up 40.8% year over year. Fueled by a 15.7% increase in new student starts.

Speaker #3: This performance caps a transformative fiscal year where revenue climbed 39.5% to $64.2 million, propelled by a 41.8% surge in enrollment. The 3,101 students and a 26.9% rise in new student starts to 3,194.

Speaker #3: These achievements represent our 12th consecutive quarter of double-digit revenue growth, demonstrating our team's exceptional execution and the enduring demand for our programs. Our graduate success stories underscore our impact with an 81.8% NCLEX pass rate in nursing and placement rates that are averaging 74.3% throughout that and 74.6% throughout HESS, our accrediting agency.

Speaker #3: We're producing job-ready professionals in fields like nursing, diagnostic medical sonography, and surgical technology just to name a few. The seamless integration of the Contra Costa Medical Career College has amplified our reach adding 468 students and diversifying our offerings.

Speaker #3: We are energized by our strategic developments this year, which are accelerating our momentum we've secured approvals for three new degree programs and two certificate programs.

Speaker #3: Expanding our curriculum to meet evolving market needs. Achieving additional initial accreditation from the National League for Nursing Commission for nursing education accreditation otherwise known as NLN-CNEA for our RN to BSN track is a game changer.

Speaker #3: It's enhancing our nursing education portfolio and opening doors for more students to advance their careers. Additionally, I'm excited that we have strengthened our governance by appointing two new board members and establishing an advisory board bringing fresh expertise to guide our expansion and innovation efforts.

Speaker #3: These milestones are propelling us forward with renewed vigor. Our six California campuses located in Lancaster, Bakersfield, Temecula, Salinas, Pasadena, and Antioch are ideally positioned and thriving healthcare hubs.

Speaker #3: Supported by our cutting-edge hybrid learning model that blends advanced simulation technology with hands-on training for optimal accessibility and outcomes. We're actively exploring additional branches and acquisitions to extend our transformative education even further.

Speaker #3: Financially, Q4 net income reached $1.2 million, up 27.6%. On expenses, I want to directly address one item. In Q4, we increased our AR reserve by approximately $700,000.

Speaker #3: This was to address the fact that we saw a softness in student payments related to our graduate students only. This $700,000 G&A expense charge is tied to graduated borrowers who fell behind in payments.

Speaker #3: I want to be clear: we're not writing this off. Instead, we're taking an increased reserve to be proactive and conservative by addressing this in the fourth quarter.

Speaker #3: We want to demonstrate our commitment to transparency, discipline, and protecting long-term shareholder value. Brandon will cover this further in his remarks. Even with this charge in Q4, we capped off a year of record growth and momentum.

Speaker #3: For the full year, net income grew 7.5 million, or 59 cents per diluted share, and adjusted EBITDA increased 31.3% to $11 million. Our robust balance sheet featuring 20.3 million in cash and negligible debt empowers us to invest boldly in growth.

Speaker #3: I am immensely proud of our dedicated team for their role in these accomplishments. Which extend beyond numbers to real-world change. With that, I want to pass this over to Brandon for a deeper dive into our financials.

Speaker #3: Brandon, thank you again. In fiscal 2025, marked a year of exceptional financial and operational progress, highlighting our disciplined approach and scalable model. I'll begin with Q4 results followed by a full year compared to fiscal 2024, drawing from our press release in Form 10-K.

Speaker #3: Our fourth quarter 2025 financial highlights begin with revenue, which rose 40.8% to 17.9 million, from 12.8 million, driven by increased enrollment. Net income increased 1.0 or increased to 1.2 million from 1 million last year.

Speaker #3: An EBITDA was 2.1 million up 133% from 0.9 million last year. In expenses, educational services is 9.4 million versus 8.5 million due to our increased staffing required to support increased enrollment, increased rents, increased externship fees, and our investment into our new programs.

Speaker #3: General and administrative was 6.3 million versus 3.3 million a prior year, reflecting our investment in marketing, professional fees, as well as the increased AR reserve LeeAnn mentioned earlier.

Speaker #3: We increased our AR reserve from 5.0% to 9.8% due to our annual AR reserve analysis that indicated a slowness in graduate student payments. Although we have improved efficiencies and financial aid processing and active student payments while in school, we took a very conservative reserve to address this analysis.

Speaker #3: For fiscal year 2025, financial operating results include revenue growth of 39.5% to 64.2 million from 46 million in the prior year, supported by a 41.8% enrollment increase to 3,101 students in a 26.9% rise in new student starts.

Speaker #3: The 3,194. Net income is up 47%, 0.3% to 7.5 million or 59 cents per diluted share from 5.1 million or 53 cents per diluted share last year.

Speaker #3: EBITDA is up 61% to 10.4 million from 6.5 million and adjusted EBITDA is up 31.3 million to 11 million, from 8.4 million last year.

Speaker #3: In expenses, educational expenses was 34.2 million versus 26.4 million due to our increased staffing required to support increased enrollment, increased rents, externships, and again, our investment into our new programs.

Speaker #3: General administrative, 19.3 million versus 13.0 million again due to increased marketing and professional fees and the aforementioned bad debt expense. Balance sheet, we have cash and cash equivalents exceeding 20 million to 20.3 million, working capital is 23.9 million.

Speaker #3: Our total assets are 69.2 million and stockholders' equity at 41 million. Cash flow was 7.8 million generated from operating activities with minimal debt. Our solid financial position fuels strategic initiatives like program expansion and acquisitions.

Speaker #3: I'll now turn it over to LeeAnn, CEO for our strategic outlook and closing remarks.

Speaker #2: Thank you, Brandon. As you can see, legacy education is energized, and ideally positioned to harness the vibrant opportunities in the healthcare education sector, indispensable for tackling workforce gaps and enhancing community health.

Speaker #2: Our strategic roadmap is geared toward amplifying or our influence and achieving enduring growth. We're going to continue the enrollment momentum through sophisticated digital marketing and robust employer collaborations will capitalize on our 26.9% student starts growth, focusing on our high potential regions.

Speaker #2: We're going to continue with our curriculum expansion; we're thrilled to roll out our newly approved three-degree and two-certificate programs alongside the prestigious NLNC and EA accreditation for our RN to BSN track.

Speaker #2: These breakthroughs are supercharging our nursing offerings and attracting top talent. We will continue to add new programs that are needed for the areas that we serve.

Speaker #2: In our operational innovation, we continue with our hybrid model enriching it with state-of-the-art simulation and edtech booths efficiency and student success while scaling seamlessly.

Speaker #2: With our governance and expansion, I can't tell you how excited I am about the two new dynamic board members and our freshly formed advisory board; we're infusing expert insights to propel branching and M&A targeting accretive opportunities to widen our footprint, all backed by our strong balance sheet.

Speaker #2: In this resilient sector, our adherence to Title IV funding requirements—strong compliance culture, a focus on superior outcomes, and market-aligned programs—equip us to thrive amid regulatory shifts.

Speaker #2: Compliance is not just a requirement for us; it's a competitive advantage. As Washington advances the One Big Beautiful Bill, comprehensive legislation aimed at expanding access, workforce development, and funding pathways—we believe legacy education is uniquely positioned to benefit with our scale, our compliance record, and proven ability to deliver job-ready graduates—we stand at the intersection of policy support and market demand.

Speaker #2: The combination of the operational execution, compliance strength, human impact, and policy tailwinds give us confidence that as we've moved into 2026, this will fuel our optimism for continued excellence.

Speaker #2: I'll turn the call over to the operator for some Q&As at this time. Operator?

Speaker #3: Thank you, LeeAnn. We will begin the question-and-answer session where selected analysts and investors will be invited to ask questions. Our first question comes from Mike Rundle with Northland Securities.

Speaker #3: You may proceed with your question.

Speaker #4: The alien in Brandon. Hey, what was the starts number in the quarter? I got the ending enrollment of 3,101, but what was the starts number just for the quarter?

Speaker #3: 723.

Speaker #2: 723, Mike. And it's great to hear from you out there.

Speaker #4: Okay. And the new programs, the three new degree programs, and the two certification programs—when do those start, and is there a rough range of revenue that cohort might deliver in 26 or 27?

Speaker #4: How do we think about those?

Speaker #2: So Mike, we don't give forward projections, but what I can tell you is that we did indicate in the press release that we anticipate starting these programs in October.

Speaker #2: And we have built a performing budget around those.

Speaker #4: Got it. I don't want to forward guidance or anything, but could those programs start 100 students next year? A couple hundred? I guess the size or the capacity that you've created—maybe that would be helpful too.

Speaker #2: Sure. So we basically average in terms of in our starts for our degree-granting programs, that we can set up to 30 students in those starts.

Speaker #2: And so for each of our degree programs on the campuses to which we started, you can reference the fact that when we open a class, we can set up to 30 students in those in each of those degree-granting classes.

Speaker #2: We can do something very similar to that in our certificate programs.

Speaker #4: Got it. And how many starting dates throughout the year? Is there just one, or would these have a second start date?

Speaker #2: Those typically—and this information—our starts are located on our website, and part of where the public can see. We typically start our degree programs a couple of times a year.

Speaker #2: So about every four to six months, we start our degree programs. And we start our certificate programs roughly about every eight weeks.

Speaker #4: Okay. That's helpful. And then the $700,000 reserve, you talked about. Can you give us a little bit of color? What is the outstanding balance that you took that against?

Speaker #4: Is that multiple millions of dollars? You took a $700,000 reserve. What was the balance? Roughly, how many students in that cohort? A little more color there would be helpful.

Speaker #5: Yeah. We do analysis annually and do analysis of all of our students whether they're active, inactive, and actually do it sometimes even at a program level.

Speaker #5: And we'd also do it on a grad level in our experiences that grad students pay pretty timely. And so we don't really focus our efforts on that collection rate too much.

Speaker #5: We focus in on active students within our financial aid processing and payments while they're in school. But we did this analysis. We determined that there is a significant—or not significant—amount of graduate students who still make—who are making payments—part of that is reflective in our balance sheet in the long term area, which increased about $600,000 to basically $1.9 million, I believe, and that is what that's based on.

Speaker #5: Total, all grad students is about two, two and a half million dollars. We reserve some of that regarding the students that are slowing in their payments.

Speaker #5: So that's about what that reserve analysis indicated for us. Again, it is something that we look at. We'll probably look at every quarter now versus annually, and see if we see any trends like that.

Speaker #5: It's a very conservative reserve estimate. That's why we didn't write it off. We just reserved for it. We have an internal expectation of having a process within us to address this particular thing.

Speaker #5: And like anything we do, we'll attack that vigorously. And we believe that we will at least get enough to recover that reserve, if not more.

Speaker #5: But we thought it would be important to take a conservative approach to that reserve.

Speaker #4: Okay. And then one more, just the tax rate came in at about 45%. I think we were at 28%. Any reason for the tax rate being so high and how does it look going forward?

Speaker #5: Yeah. The tax rate is—it wasn't 45. It was 31, 32 percent. And that was—I had to do with a return to provision adjustment last year.

Speaker #5: Last year was approximately 28%. And really, as we do the return of provision adjustment, it should have been closer to 30, 30 and some change.

Speaker #5: And so this increase this year is representative of that. For this fiscal year, it'd be around 30%.

Speaker #4: Okay. Okay. Thank you.

Speaker #2: Thank you, Mike. Great questions.

Speaker #6: Our next question comes from Jeffrey Cohen from Leidenburg Tallman. You may proceed with your question.

Speaker #7: Go ahead, LeeAnn and Brandon. How are you?

Speaker #2: Good. How are you?

Speaker #7: Pretty good. So a few questions. Firstly, I was hoping I'd hear the word cardiac or neuro. Any commentary there at all?

Speaker #2: They are active programs of which you know that we've already been enrolling in. And we've added to our additional campuses. So cardiac is really doing well for us.

Speaker #7: Got it. So with now your seven facilities, are you capacity-constrained at any point? I mean, the growth rate is the growth rate, but are you shy on square footage?

Speaker #7: Do you need more buildings or square footage to accommodate the organic growth?

Speaker #2: So we are—so where we have gotten the approvals and the central coast campus, remember, we added 25,000 square feet to that. And so we are definitely well-positioned there.

Speaker #2: As you saw, where Brandon talked about the increased and expenses and some of that was due to rent, that is where we have taken.

Speaker #2: And our existing landcaster Temecula locations—and we have added additional square footage to support the lab additions that we are putting into for these new program approvals.

Speaker #2: The way that we're delivering the education and the hybrid model with—we've taken on additional square footage for the labs—but we've got things very well under control as it relates to the students are learning online and just coming in for the labs.

Speaker #7: Okay. I got it. And I guess maybe a question for Brandon. On Q4, I understand the AR 700K, but were there any one-timers in effect for that G&A numbers that little bit higher than what we thought?

Speaker #7: Was there any one-timer seasonal callouts there to speak of?

Speaker #5: Yeah. There's some seasonality in that in professional fees that relates to legal regulatory audits. And we also had some enhancements in our SIS system, things of that nature that are somewhat one-time or seasonal in nature that included in our margin reflective in our margin.

Speaker #7: Got it. And I know I'm going to get no forward-looking statement out of you as far as revenues go, but maybe Brandon, you could remind us of the seasonality of your business and how that relates to each quarter and particularly the upcoming Q1, which is September quarter.

Speaker #5: Yeah. As you know, we can't really do that, but there's certainly seasonality involved when it comes to our first and second quarter. Our first quarter, generally, it's a pretty solid quarter.

Speaker #5: Our second quarter was in December, very seasonal because of the holidays. Generally, that's a depressed quarter. And then we have a pretty robust Q3 in the middle road Q4.

Speaker #5: So that seasonality will still continue. But again, our growth rate can kind of—you can kind of presume a continued growth rate in within the seasonality.

Speaker #7: Okay. I think that helps. And no, I think that those is for us on the question front. It's a solid readout. And thank you for the commentary.

Speaker #2: Thank you, John.

Speaker #5: Thank you.

Speaker #6: Has there been no further questions? I will now turn the call back to LeeAnn Rohmann for closing remarks.

Speaker #2: Thank you, operator. And thank you all for joining us. Fiscal 2025 was a landmark year for Legacy Education. With strong financials and the strategic leaps that affirm our commitment and a crucial sector, beyond the metrics, we're catalyzing change and powering thousands of students for fulfilling healthcare careers and fortifying essential services nationwide.

Speaker #2: I'd like to thank our passionate team, our students, and our stakeholders; they're the driving force behind this success and to our investors. Your confidence inspires us.

Speaker #2: We're poised to innovate, expand, and deliver exceptional value. Shaping a brighter future in healthcare I want to thank you again for being part of the Legacy Education journey, and wish you a great rest of the day.

Q4 2025 Legacy Education Inc Earnings Call

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