Legacy Education Q4 2026 Earnings Call Transcript

On Thursday, Legacy Education (AMEX: LGCY ) discussed fourth-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. 1 million, driven by strong organic growth and the integration of Contra Costa Medical Career College.

9% increase from fiscal 2025. 1 million, showcasing the scalability of their platform. Strategic initiatives include expanding existing programs, opening a Houston campus, and actively evaluating acquisition opportunities for geographic and programmatic expansion. 7 million in cash, minimal debt, and multiple growth avenues, focusing on scalability and disciplined investment.

Full Transcript OPERATOR Good day and welcome to the Legacy Education Incorporated fourth quarter and fiscal year 2026 earnings conference call. Today's call is being recorded and broadcast live. It will also be archived on the Legacy Education website for future reference. To kick off the call, I will turn it over to Nicole Joseph, Senior Vice President of Marketing for Legacy Education Incorporated.

Nicole Casali Joseph, Vice President Marketing Thank you and hello everyone. Legacy Education has issued a news release reporting its financial results and corporate developments for the fourth quarter and fiscal year ended June 30, 2026. 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.

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 projections 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 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 LeeAnn Rohmann, CEO of Legacy Education. LeeAnn, to you.

LeeAnn Rohmann, Founder and Chief Executive Officer Thank you, Nicole, and good afternoon, everyone. Fiscal 2026 was a record year for Legacy Education. It was also a year in which our results, operating execution and balance sheet gave us greater capacity to pursue the next stage of growth. The central message for today's call is straightforward.

Fiscal 2026 demonstrated the strength and scalability of our operating platform. We produced strong organic revenue growth across our preexisting brands, successfully integrated Contra Costa Medical Career College and finished the year with clear operating leverage. We entered fiscal 2027 with meaningful growth already embedded in the existing platform, additional capacity and programs coming online, a new geographic market under development and acquisition opportunities under active evaluation. 5%.

We ended the year with a larger student population, expanded our program portfolio and campus capacity, advanced, strengthened our operating infrastructure and finished the year with the financial resources to continue investing in growth. We also finished the year with a strong fourth quarter. Revenue increased 12% and adjusted EBITDA increased more than 30%. Adjusted EBITDA margin expanded 220 basis points.

That combination of growth and margin expansion is an important proof point of the scalability of the platform. I will organize my remarks around four themes: the strength of fiscal 2026, the operating leverage we demonstrated in the fourth quarter, the growth opportunities we see entering fiscal 2027 and the financial strength supporting our plans. 2 million. 5% year over year.

6 million reflected the comparison between a full year of Contra Costa Medical Career College in fiscal 2026 and six months in fiscal 2025. Put differently, roughly 62% of the year-over-year revenue increase came from the preexisting platform. That is an important proof point. Fiscal 2026 growth was supported by both successful integration and meaningful organic revenue growth.

New student starts increased 9% to 3,483. 9% from fiscal 2025. 1% to 2,869 students. We view that active population growth, together with the revenue performance of the existing platform, as a stronger indicator of the underlying operating momentum entering fiscal 2027.

Earnings increased across operating income, net income, EBITDA, adjusted EBITDA and diluted earnings per share. The breadth of that performance matters because it shows that growth in the platform translated into growth in earnings while we continued investing for the future. Adjusted EBITDA margin was 17% even as we invested in new programs, expanded facilities, strengthened staffing and infrastructure, and prepared for future growth. That is the operating balance we intend to maintain as Legacy scales.

These results reflected broad execution across a larger classroom. We integrated a full year of Contra Costa Medical Career College, supported a larger student population, expanded program offerings and continued building the academic and operating capabilities required of a growing public company. They also reinforce the relevance of our focus. Legacy prepares students for careers in nursing and allied health fields where employers continue to need skilled, job-ready professionals.

Our programs are practical, career-focused and aligned with essential health care roles. That alignment remains a durable source of student interest and employer demand. The fourth quarter provided the clearest evidence of operating leverage while we continued funding growth. 3% and the operating margin expanded 190 basis points.

The quarter demonstrated that the core platform continued to grow while producing greater operating leverage. 5%. Those results show the earnings power of a larger platform as revenue scales across our existing infrastructure. The key point is that the fourth quarter combined double-digit revenue growth with faster growth in earnings and meaningful margin expansion.

While we continue to invest in future capacity, the quality of the quarter is important. We did not achieve growth by pulling back from the future. Educational services expense included the faculty, instructional resources, books, supplies, externships, facilities and program support required for a larger platform and for capacity that can generate future revenue. Disciplined spending, marketing efficiency and active management of the receivables also supported the quarter's operating leverage.

The objective is not simply to become larger; it is to become larger while strengthening the economics of the platform. That is the operating model we are pursuing: support students and academic quality, invest deliberately in future capacity, and create greater operating leverage as the platform scales. We entered fiscal 2027 with multiple tangible growth engines already underway. We think about those opportunities in three pillars: expanding the existing platform, adding new capacity and geography, and pursuing strategic expansion supported by our stronger operating infrastructure.

Pillar 1: Expanding the Existing Platform. We continue to see meaningful runway in programs and campuses we already operate and understand well. Surgical Technology is currently operating at two of our three High Desert Medical College campuses, with the third campus expected to begin the program by the end of the first quarter of fiscal 2027, subject to final operational readiness. This represents additional growth within an existing program and an existing campus footprint.

The Sterile Processing Technician program also continues to ramp. This has been an important contributor to our program mix, and continued cohort development and broader use of existing capacity provide additional enrollment and revenue opportunity as the program matures across the platform. In Vocational Nursing, we revamped the entrance requirements across our campuses with a greater focus on student readiness and fit at the application stage. These changes are designed to strengthen student readiness and support retention, progression and graduation.

We view that as an important opportunity to improve the quality and durability of enrollment within an established program. Pillar 2: Add Capacity, Programs and Geography. We are expanding where Legacy can serve students and where existing demand can support additional scale. After the end of the fiscal year, we executed a lease for 28,000 square feet in Houston, Texas, for a planned Central Coast College branch.

CCC currently projects to open the Houston branch in November 2026, subject to receipt of the required regulatory and accreditation approvals. This move is intended to establish Legacy's first campus outside of California, and it represents an important step in accelerating our geographic expansion. We also expanded capacity at High Desert Medical College. Lancaster added 6,000 square feet, and we're phasing additional capacity in Temecula so that growth can be aligned with program and enrollment demand.

At Contra Costa Medical Career College, we received approvals for three additional programs: Associate of Applied Science in Magnetic Resonance Imaging, Associate of Applied Science in Cardiac Sonography, and Veterinary Assistant Certificate. These approvals expand the future program pipeline, with launch timing based on operational readiness and applicable requirements. Pillar 3: Strategic Expansion and Operating Infrastructure. We are actively evaluating acquisition opportunities that can expand Legacy's geographic reach, program portfolio, student base and long-term earnings capacity.

We apply clear academic, strategic, regulatory, cultural and financial criteria to each opportunity. At the same time, we're continuing to build Legacy's business intelligence to give leadership more consistent visibility into enrollment, retention, academic execution, registrar activity, career services and other key operating measures as the organization grows—better visibility and accountability to support more consistent execution across the platform. Our growth platform is also supported by strong institutional accreditation.

Integrity College of Health received a six-year grant from ABHES, and Contra Costa Medical Career College received a five-year grant from asset, the maximum terms granted by the respective accreditors. All four Legacy institutions maintain current institutional accreditation. Taken together, these three pillars give us multiple avenues for growth—more opportunity inside the existing platform, new capacity and geography, and strategic expansion through acquisitions and stronger operating infrastructure. Importantly, these are parallel growth paths rather than a strategy dependent on any single initiative.

Now, our ability to make these investments is supported by a strong financial position. 3 million one year earlier. Excuse me. 8 million and debt remained minimal.

We have no revolving line of credit or other debt. This balance sheet gives us flexibility to invest in programs, facilities, technology, faculty, student support, regulatory readiness and selective expansion without depending on significant financial leverage. Our capital allocation framework remains disciplined and growth-oriented. Our financial strength supports both the organic opportunities already underway and the acquisition opportunities we are actively evaluating.

We intend to deploy capital where we see clear relationship among student opportunity, employer demand, academic quality, scalable capacity and long-term financial return. In short, fiscal 2026 strengthened both our operating platform and our capacity to invest. We enter fiscal 2027 with growth opportunities inside existing business, additional programs and capacity coming online, geographic expansion underway, an active acquisition strategy and the financial resources to execute with discipline. With that, I'll turn the call over to Brandon Pope for a detailed review of our fourth quarter and full year financial results.

Brandon Pope (Chief Financial Officer) Brandon, thank you, LeeAnn, and good afternoon everyone. Legacy Education delivered a strong finish to a record fiscal year. LeeAnn outlined the strategic growth opportunities ahead and I will focus on the financial evidence supporting that strategy: fourth quarter operating leverage, full-year earnings growth, cash flow, and our year-end financial position, beginning with our fourth quarter fiscal 2026 results. 9 million in the prior year.

6 million from 2 million. 1%. 2 million. 09.

1 million. 3%. 6% prior year. The reduction is primarily due to tax benefits related to stock option exercises and beneficial tax treatment of stock option grants.

6% of revenue in the prior quarter. The increase primarily reflected instructional payroll and staffing, books and supplies and externship cost, and facility and repair costs. 1 million, book supplies and externship-related costs increased 358,000, and facility and repair costs increased 204,000. These expenses supported a larger student population and the academic capacity required for expanding and developing programs.

Their timing can precede enrollment and revenue because personnel, labs, equipment, curriculum, and operating readiness must be in place before a regulated program or branch can launch. 4% of revenue. This level of G&A spending supported the infrastructure of a larger public company while contributing to the quarter's operating leverage. 2 million and bad debt expense was 1 million or 5% of revenue.

These levels reflect continued discipline in student acquisition and receivables management. 6% while revenue increased 12%. This operating leverage supported the quarter's higher operating margin and adjusted EBITDA margin. 2 million.

5%. Six million reflected the comparison between a full year of Contra Costa Medical Career College in fiscal 2026 and six months in fiscal 2025. As a result, roughly 62% of the incremental revenue came from pre-existing. 8 million from 10 million.

8%. Fiscal 2026 included investments in staffing, facilities, programs, technology, professional services, and public company infrastructure designed to support a larger operating platform and future growth. 5 million. 59.

4 million.