LINCOLN EDUCATIONAL SERVICES CORP Q4 FY2024 earnings call

• Lincoln 10.0 hybrid teaching model: First phase completed, used by 65% of student population; second phase to begin in 2026, aiming for 95% of students on the model by 2027.
• New campus development: Opened Eastpointe campus, with three new campuses in 2025 (Levittown, Nashville, Houston) and Hicksville campus planned for late 2026.
• Program replication: Added twelve programs, five in 2024, seven more by first half of 2025; exited low ROI programs (cosmetology, culinary, massage therapy) to free up space for high-demand programs.
• Corporate partnerships: Added/expanded/renewed relationships with ten corporations in 2024, including five-year workforce development agreement with Container Maintenance Corporation.

For the fourth quarter, total revenue grew to $119.4 million, a 16.4% increase. Adjusted EBITDA was $19.2 million, up 22%. Full-year 2024 revenue was $440.1 million, a 16.4% year-over-year growth, with adjusted EBITDA reaching $42.3 million, up nearly 60%. Fourth quarter student starts grew nearly 10%, and end-of-quarter student population rose over 14%.

• 2025 revenue guidance: $480 million to $490 million.
• Adjusted EBITDA guidance: $55 million to $60 million.
• Net income guidance: $8 million to $13 million.
• Student start growth: 8% to 12%.
• Capital expenditures: $70 million to $75 million.

• Regulatory uncertainties: Potential delays in Department of Education funding approvals or Title IX/Title IV fund approvals.
• Program performance risks: Exiting low ROI programs and ensuring new programs deliver high returns on investment for students.

Q: Any update on new campus timelines?

A: Nashville welding program already started, Levittown expected in early Q3, Houston on track for end of year; Hicksville campus planned for late 2026.

Q: Impact of Department of Education turmoil?

A: New administration seen as easing regulatory burden, but still monitoring potential delays in funding approvals.

Q: Mix changes in skilled trades?

A: Skilled trades growth consistent, with more replication of those programs; collision demand softened, leading to teaching it out at Melrose facility.

Q: Inclusion of Hicksville campus in 2025 guidance?

A: No, Hicksville campus launch is in late 2026.

Q: Healthcare and other professions starts decline?

A: Exiting programs (cosmetology, culinary, massage therapy), nursing start delays, and program reallocations contributed to declines, but interest remains high for healthcare.