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Mar 31, 2020
Strategic Education Q1 2020 Earnings Report
Reported strong results, demonstrating resilience in the face of the COVID-19 pandemic. Revenue and income from operations increased.
Key Takeaways
Strategic Education, Inc. reported a 7.6% increase in revenue and a significant increase in income from operations for the first quarter of 2020. The company is adapting to the challenges of the COVID-19 pandemic by ensuring student and employee well-being and providing financial relief to impacted students and partners.
Revenue increased by 7.6% to $265.3 million.
Income from operations was $44.0 million, representing 16.6% of revenue.
Diluted earnings per share increased to $1.60 from $0.52.
Strayer University and Capella University saw increased student enrollment.
Forward Guidance
Strategic Education expects COVID-19 to negatively impact revenue-per-student and bad debt expense over the next three to four quarters. They anticipate some expense savings in 2020 to partially offset this decline.
Positive Outlook
- The company maintains over $500 million in cash and $250 million of undrawn credit.
- Projected continued quarterly cash generation.
- Existing financial resources are sufficient to support ongoing operations.
- The company does not plan to seek COVID-19 related financial support from the Federal government.
- Capital expenditures for 2020 are now expected to be at the lower end of our previous estimate of between $40 million and $45 million.
Challenges Ahead
- COVID-19 crisis will likely negatively impact revenue-per-student.
- COVID-19 crisis will likely negatively impact bad debt expense over the next three to four quarters.
- The Company also decided to pause planned 2020 new campus expansion for campus projects that have not yet started.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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