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HERNDON, Va. - Strategic Education, Inc. (NASDAQ:STRA) reported fourth-quarter earnings that fell short of analyst expectations, sending shares tumbling 15.7% in early trading.
The education services provider posted adjusted earnings per share of $1.27, missing the consensus estimate of $1.43. Revenue for the quarter came in at $311.5 million, below analyst projections of $315.58 million and representing a modest 2.9% increase YoY.
Strategic Education’s U.S. Higher Education segment, which includes Capella University and Strayer University, saw revenue decline 1.5% to $214.3 million despite a 3% rise in student enrollment to 88,860. The segment’s operating income margin contracted sharply to 8.3% from 15.1% in the year-ago quarter.
"During 2024, we delivered strong performance consistent with our notional operating model including enrollment, revenue, and earnings growth," said CEO Karl McDonnell. However, the fourth quarter results suggest challenges in translating enrollment gains into revenue growth.
The company’s Education Technology Services segment was a bright spot, with revenue surging 39.3% to $30.5 million, driven by growth in Sophia Learning subscriptions and employer partnerships.
For the full year 2024, Strategic Education reported a 7.7% increase in revenue to $1.22 billion and adjusted earnings per share of $4.87, up from $3.72 in 2023.
The company declared a quarterly cash dividend of $0.60 per share, payable on March 17, 2025.
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