Earnings call transcript: Legacy Education Q3 2025 sees strong growth

Legacy Education Inc. reported robust financial results for the third quarter of 2025, driven by significant revenue growth and strategic expansions in its educational offerings. The company’s stock surged by 14.14% in aftermarket trading, reflecting positive investor sentiment following the earnings release. Legacy Education’s Q3 revenue increased by 50.7% year-over-year, reaching $18.6 million, while net income rose to $2.8 million, or $0.21 per diluted share. According to InvestingPro data, the company maintains an excellent financial health score of 3.31 (rated as "GREAT"), with a market capitalization of $91.86 million.

Key Takeaways

• Legacy Education’s Q3 revenue grew by 50.7% year-over-year.
• The stock price increased by 14.14% in aftermarket trading.
• Expansion in hybrid learning models and new program offerings contributed to growth.
• The company acquired Contra Costa Medical Career College, adding 468 students.

Company Performance

Legacy Education demonstrated strong performance in Q3 2025, with revenue and net income showing significant year-over-year increases. The company’s focus on expanding its program offerings and integrating advanced simulation technology has positioned it well in the growing healthcare education market. The acquisition of Contra Costa Medical Career College further strengthened its competitive position by increasing student enrollment.

Financial Highlights

• Revenue: $18.6 million, up 50.7% year-over-year
• Net Income: $2.8 million, up 57.1% year-over-year
• Earnings per share: $0.21, up 57.1% year-over-year
• Adjusted EBITDA: $3.9 million, up 60% year-over-year
• Cash and Cash Equivalents: $17.3 million
• Working Capital: $22 million

Market Reaction

Following the earnings announcement, Legacy Education’s stock rose by 14.14% in aftermarket trading, closing at $8.88. This increase reflects investor confidence in the company’s strategic direction and growth potential. The stock’s movement is notable, considering its 52-week range of $3.60 to $10.37. InvestingPro data shows analysts maintain a strong buy consensus with a target range of $10.50-$10.80, suggesting potential upside. The stock has delivered an impressive 84.58% return over the past year.

Outlook & Guidance

Legacy Education plans to continue driving enrollment growth and expanding its program offerings, particularly in the healthcare sector. The company expects ongoing strong demand for its educational programs, supported by a healthcare workforce shortage. Strategic acquisitions remain a focus to enhance its market presence. With a P/E ratio of 14.9 and a PEG ratio of 0.35, InvestingPro analysis suggests the stock is currently trading at attractive valuations relative to its growth potential. Subscribers can access 8 additional ProTips and comprehensive financial analysis through the Pro Research Report.

Executive Commentary

CEO Leanne Roman highlighted the company’s consistent revenue growth, stating, "We’ve achieved double-digit revenue growth for 11 consecutive quarters." She emphasized the company’s focus on allied health education, noting, "Our focus on allied health education continues to resonate in a market hungry and desperate for skilled professionals."

Risks and Challenges

• The healthcare education market is competitive, requiring continuous innovation.
• Economic downturns could impact enrollment and financing options for students.
• Regulatory changes in education and healthcare sectors could pose challenges.
• The integration of acquired campuses requires effective management to ensure seamless operations.

Q&A

During the earnings call, analysts inquired about Q4 seasonality expectations and the company’s M&A strategy. Management confirmed ongoing discussions regarding potential acquisitions and highlighted the strong performance of its nursing and imaging programs. The expansion of the EMT program across campuses was also discussed as a key growth initiative.

Full transcript - Legacy Education Inc (LGCY) Q3 2025:

Conference Operator, Legacy Education: Good day, and welcome to the Legacy Education Third Quarter Fiscal twenty twenty five Earnings Conference Call. Today’s call is being recorded and broadcast live. It will also be archived on the Legacy Education’s website for future reference. To kick off the call, I will turn it over to Nicole Joseph, Senior Vice President of Legacy Education.

Nicole Joseph, Senior Vice President, Legacy Education: Thank you and hello everyone. Legacy Education has issued a news release reporting its financial results and corporate developments for the third quarter and nine months ended 03/31/2025. The release is available in the Investor Relations section of our corporate website at legacyed.com. With us today on the call are Leanne Roman, 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. 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 ks 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 those statements are made and management’s good faith belief as of the time with respect to future events.

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, whether as a result of new information, future events or otherwise, after the date thereof. I will now hand the call over to Leigh Ann Roman, CEO of Legacy Education. Leigh Ann, to you.

Leanne Roman, Chief Executive Officer, Legacy Education: Thank you, Nicole, and good afternoon, everyone. I’m thrilled to welcome you to the Legacy Education’s third quarter fiscal twenty twenty five earnings call. Joining me today is Brandon Pope, our Chief Financial Officer. We’ve had an outstanding quarter. I’m particularly proud to note that we’ve achieved double digit revenue growth for 11 consecutive quarters.

And I’m excited to share our results, which reflect the strength of our business model, consistent execution, the dedication of our team and the growing demand of our career focused healthcare education. Q3 was a record breaking quarter for legacy education with revenue soaring 50.7% year over year to $18,600,000 driven by a remarkable 70.7 percent increase in new student starts and a 49.8% growth in ending enrollment, reaching 3,245 students as of 03/31/2025. These results include the full quarter impact of our acquisition of Contra Costa Medical Career College, which added four sixty eight students and expanded our footprint in high demand healthcare markets. We also surpassed a significant milestone exceeding 3,000 enrolled students as of 01/31/2025, a testament to our team’s execution and the value of our program. Our focus on allied health education continues to resonate in a market hungry and desperate for skilled professionals.

From nursing to diagnostic sonography, surgical technology to dental assisting, our programs are designated to meet employer needs, delivering graduates who are ready to fill critical workforce gaps. Our overall nursing NCLEX pass rate is eighty three percent. We have an average of seventy five six percent placement rate through our accreditor ABHES. These just underscore the quality of our education and the success of our students. Operationally, we’ve made significant strides.

We’ve expanded our hybrid learning models, leveraging advanced simulation technology to enhance training while increasing student flexibility. Our six campuses across California and Lancaster, Bakersfield, Temecula, Salinas, Pasadena and Antioch are strategically located in areas with robust job growth, and we’re seeing strong enrollment trends across all locations. The integration of Contra Costa is progressing smoothly, unlocking new market opportunities, and we’re actively evaluating additional acquisition targets and branch locations to further expand our geographic and programmatic reach. Financially, we delivered robust profitability with net income of $2,800,000 or $0.21 per diluted share and an adjusted EBITDA of $3,900,000 up 60% year over year. Our balance sheet remains strong with $17,300,000 in cash and $22,000,000 in working capital, providing ample liquidity to fuel organic growth, invest in new programs, add branches and pursue strategic acquisitions.

Before I turn it over to Brandon for a deeper dive into the numbers, I want to thank our employees, our students, our shareholders, and partners. Your belief sector and commitment drives our mission to empower students and address the healthcare workforce shortage. With that, I’ll hand it over to Brandon Pope, our CFO, to walk you through our financial performance. Brandon?

Brandon Pope, Chief Financial Officer, Legacy Education: Thank you, Leanne. I’m pleased to report another quarter of exceptional financial performance reflecting our strong operational execution and the scalability of our business model. Let’s dive into the key metrics for Q3 fiscal twenty twenty five ended 03/31/2025 with comparison to Q3 twenty twenty four. The third quarter revenue reached $18,600,000 a 50.7% increase from $12,300,000 last year. This growth was driven by a 49.8% increase in ending enrollment to 3,245 students and a 70.7% surge in new student starts from 07/19 to 12/27 including the impact of Contra Costa Medical College.

Net income increased 57.1% to 2,800,000.0 or $0.21 per diluted share compared to $1,800,000 or $0.19 per diluted share in Q3 twenty twenty four. EBITDA rose $3,800,000 and adjusted EBITDA which excludes non cash compensation climbed 60% to $3,900,000 from $2,400,000 last year. Educational services were $10,100,000 or 54.4% of revenue compared to $6,500,000 or 53.1% of revenue in Q3 twenty twenty four. The increase reflects investment in instructional staff, rent, externship fees in our RN program to support enrollment growth. General and administrative expenses were 4,600,000.0 or 24.9% of revenue up from $3,300,000 or 26.8% of revenue last year driven by higher marketing, professional fees and bad debt expense.

Marketing expenses increased $1,200,000 from $900,000 supporting our student acquisition effort. For the nine months ended 03/31/2025 revenue grew 39% to $46,200,000 from $33,200,000 Net income increased 51.9% to $6,300,000 or $0.51 per diluted share compared to $4,200,000 or $0.43 per diluted share. EBITDA was $8,300,000 and adjusted EBITDA rose 54.2 to $8,600,000 These results reflect a 30.6% increase in new student starts at 2,473. Our liquidity remains robust at $17,300,000 in cash and cash equivalents and $22,000,000 in working capital as of 03/31/2025. Total assets were $67,100,000 and stockholders equity stood at 39,300,000.0 Capital expenditures for the nine months were $800,000 primarily for campus enhancements and technology upgrades.

We generated 4,700,000 in net cash from operating activities and our debt remains minimal at $1,000,000 positioning us well for future investments. I’ll now turn it back to Leanne for strategic outlook and closing remarks.

Leanne Roman, Chief Executive Officer, Legacy Education: Thank you, Brandon. As we look ahead, legacy education is poised for continued momentum. Our strategic priorities remain clear, driving enrollment growth, expanding our program offerings, optimizing operational efficiency and pursuing branching and accretive acquisitions. On enrollment, we’re enhancing our marketing reach and deepening partnerships with health care employers to sustain strong student starts. Our data driven outreach strategies and compelling value proposition are resonating as evidenced by our 70.7% increase in Q3 starts.

We expect this trend to continue as we capitalize on the growing demand for healthcare professionals. Programmatically, we are adding existing programs to locations where there is high employer needs, while we’re also launching new offerings in high demand fields like sterile processing, surgical technician and EMT, completing our existing portfolio. These programs align with employer needs and leverage our advanced simulation technology and externship network to ensure graduate success. Operationally, we’re focused on cost optimization while investing in technology and faculty to enhance the student experience. Our hybrid learning model supported by leading edtech platforms provides flexibility and scalability, positioning us to reach more students efficiently.

Our growth expansion plans through branching and our M and A strategy remain the key growth drivers. The successful integration of Contra Costa demonstrates our ability to execute accretive acquisitions. And we’re actively evaluating opportunities to expand our geographic footprint and program diversity With $17,300,000 in cash and strong cash flow, we have the flexibility to act decisively. Regulatory dynamics continue to evolve, but legacy is well positioned. Our focus on high demand allied health careers, strong placement rates and compliance with Title IV and accreditation standards gives us confidence in navigating the environment, employers’ urgent need for our graduates reinforces the stability and the relevance of our business model.

As we have moved as we move into the final quarter of fiscal twenty twenty five, We are energized by our progress and the opportunities ahead. We’re committed to empowering students, delivering value to our shareholders and solidifying legacy education as a leader in career focused education. I want to turn it back over to the operator now to open up for Q and A.

Conference Operator, Legacy Education: Thank you. We will now be conducting a question and answer session. Session. Our first question comes from the line of Mike Grondahl with Northland Securities. Please proceed.

Mike Grondahl, Analyst, Northland Securities: Hey, thanks a lot. And Leanne and Brandon, congratulations on a really strong quarter. The quarter outperformance, can you talk a little bit about where that came from, whether it was specific campuses or specific programs?

Leanne Roman, Chief Executive Officer, Legacy Education: Hi, Mike. Great to hear from you. Absolutely. So in this quarter, like our top five programs remained strong in the medical assisting, the nursing, cardiac, UT and MRI. We specifically in the third quarter really saw, our ability to be able to add some additional nursing classes as well as some imaging classes that led to, just the fantastic quarter that we experienced.

Mike Grondahl, Analyst, Northland Securities: Got it. So you would kind of say nursing and imaging is where a nice chunk of the upside came from?

Leanne Roman, Chief Executive Officer, Legacy Education: Yes.

Nicole Joseph, Senior Vice President, Legacy Education: Got it. It sure did.

Mike Grondahl, Analyst, Northland Securities: Roughly in those additional classes you created, ballpark how many students you were able to fill?

Leanne Roman, Chief Executive Officer, Legacy Education: About so we added two additional classes in nursing, which led us to close to about 53. And then of those enrollments. And then in our imaging side, those cohorts, we set 20 at a time and we added an additional cohort in the imaging of 20.

Mike Grondahl, Analyst, Northland Securities: Got it. That’s great. April, May, any kind of early color on starts in that window?

Leanne Roman, Chief Executive Officer, Legacy Education: Look at you. You just always want to like push the envelope, don’t you?

Nicole Joseph, Senior Vice President, Legacy Education: Of course. Of course. You guys have a lot of momentum.

Leanne Roman, Chief Executive Officer, Legacy Education: Yes. What I would just remind all of you is that like in terms of in our business in your model is that we do have some the seasonality. And we typically our strongest quarters are the Q1 quarter and the Q3 quarter. Much like that you see Q2 and Q4, we do get impacted by seasonality.

Mike Grondahl, Analyst, Northland Securities: Sure. Sure. And then, hey, one more from me, Leanne and Brandon. CCMCC, it seems to be going really well. What does the acquisition pipeline look like?

Are you working on anything, a couple of things?

Leanne Roman, Chief Executive Officer, Legacy Education: We do have a couple of the acquisition pipeline in our M and A that are beyond adjusting conversations that we are looking at, but nothing more that we can really share at this time. But we definitely have a few that we are talking to.

Mike Grondahl, Analyst, Northland Securities: Talking to a few. Sounds great. Well, hey, congrats on a nice quarter.

Leanne Roman, Chief Executive Officer, Legacy Education: Thank you. Thank you.

Conference Operator, Legacy Education: Thank you. Our next question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please proceed.

Jeffrey Cohen, Analyst, Ladenburg Thalmann: Hi, Leanne and hi, Brandon. Thanks for taking our questions. I guess firstly, I’m going to press a little on Mike’s envelope with his questioning and just reminding you that last year in 2024, your fourth quarter was actually slightly better than the third quarter on the top line. So can you help us frame that and how we should expect Q4? I know the consensus is probably on a down quarter, but it appears to me that the pull through is pretty strong from this quarter reported March.

Brandon Pope, Chief Financial Officer, Legacy Education: Yes, we had a great this is Brandon. I’m glad you’re taking the call. Yes, Q3 is impacted by several things. If you remember, Q2 was a very 3% increase in starts only. Some of those starts came in, in Q3.

Similarly, in Q4 some of those starts that would typically show up in Q4 showed up in Q3 this year. And so it enhances our robust start for Q3. Q4 similar seasonality probably a little less than Q4 of last year.

Jeffrey Cohen, Analyst, Ladenburg Thalmann: Okay. Similar seasonality on a net new basis?

Brandon Pope, Chief Financial Officer, Legacy Education: Yes. Yes. You’re going to see a different seasonality this year than we’ve seen typically based upon what I just mentioned. And it all depends on when it starts happening, what quarter and may typically happen in what quarter. When a student when the course ends another one begins those kinds of things impact seasonality.

There’s a general seasonality and there’s more specific seasonality. We’re going to see that general seasonality in Q4.

Jeffrey Cohen, Analyst, Ladenburg Thalmann: Okay. Got it. Program wise, could you comment about the EMT program as far as number of campuses or number of classes that are existing now in duration and population size specific for, EMT?

Leanne Roman, Chief Executive Officer, Legacy Education: Right. Sure. The EMT program right now is approved in our HDMC locations. And so we have launched it in our Temecula campus right now only. It is a twelve week long course, and we are teaching it primarily on the weekends.

We are geared up to now roll it out among the rest of the HDMC campuses first with Quickly to Follow and our Pasadena campus and Salinas campus. What we wait for here is not only do we need the state approvals, but we also need county approvals. And so as we’re obtaining those county approvals, that’s when we can start rolling those classes out in those locations where we have the approval.

Jeffrey Cohen, Analyst, Ladenburg Thalmann: Super. That’s helpful. And Leanne, did you call out anything related to neuro or neurology as far as any classes that you offer any programs

Leanne Roman, Chief Executive Officer, Legacy Education: No, not to date. We are doing some research in those in terms of new programs, but we don’t have any of those at this point.

Jeffrey Cohen, Analyst, Ladenburg Thalmann: Okay. And it sounds like on the M and A front similar status that you’ll keep us posted on anything that gets to some stage of telling us?

Leanne Roman, Chief Executive Officer, Legacy Education: Yes.

Jeffrey Cohen, Analyst, Ladenburg Thalmann: Okay, perfect. That does it for us. Fantastic quarter. Nice metrics.

Leanne Roman, Chief Executive Officer, Legacy Education: Thanks, Jeff. Thank you. Good to hear from you.

Conference Operator, Legacy Education: Thank you. As there are no further questions, I’ll now turn the call back over to Leanne Roman for closing remarks.

Leanne Roman, Chief Executive Officer, Legacy Education: Thank you, operator, and thank you all for joining us today. As we reflect on our third quarter results, as I previously stated, I’m incredibly proud of what we’ve achieved, not just this quarter, but over the past eleven quarters of the double digit growth. This consistent performance underscores the strength of our strategy and the critical role we play in addressing the health care workforce shortage. At Legacy Education, we are more than just an educational institution. We’re a catalyst for change, empowering students to build rewarding careers and helping employers meet their staffing needs with skilled professionals.

Our commitment to excellence, innovation and student success drives us forward. I’m confident that this momentum will continue as we pursue new opportunities, expand our programs and explore strategic acquisitions. I want to express my deepest and sincere gratitude to our dedicated faculty and staff whose hard work and passion make our success possible. To our students, thank you, thank you, thank you for choosing Legacy Education as your partner and achieving your dreams. And to our shareholders, thank you for your continued support and belief in our vision.

We look forward to sharing more updates with you in the future and to continuing our journey of growth and impact. I hope you have a wonderful rest of the day, and thank you again for being part of the Legacy Education story. Back to you, operator.

Conference Operator, Legacy Education: This concludes today’s Legacy Education third quarter fiscal twenty twenty five earnings conference call. Thank you for joining us and have a great day.

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