Executive Summary

Q2 FY2025 delivered solid growth amid expected seasonality: revenue grew 29.2% year-over-year to $13.64M, net income was $1.40M, and diluted EPS was $0.10 .
Enrollment growth and the CCMCC acquisition drove performance; student population reached 2,768 (+44.8% YoY), with new student starts up 3.0% .
Management highlighted ongoing program expansions (surgical technology, sterile processing, pharmacy tech, dental assistant) and robust demand; Pasadena campus disruption from nearby fires was managed with minimal downtime .
No formal quantitative guidance was issued; management expects full acquisition impact in upcoming quarters and emphasized M&A pipeline strength .

What Went Well and What Went Wrong

What Went Well
- Enrollment growth and acquisition synergies: Ending enrollment rose to 2,768 (+44.8% YoY), supported by CCMCC adding 389 students; new starts +3.0% YoY .
- Program expansion approvals: Surgical technology, sterile processing, pharmacy tech, and dental assistant rolled out; early enrollments underway (surge tech, dental assisting) .
- Operational resilience: Pasadena campus shifted to online within days due to nearby fires; minimal instructional downtime and strong community support .
What Went Wrong
- Seasonal margin compression: Operating margin was 12.2% vs 19.1% in Q1, consistent with Q2 seasonality; educational services and G&A grew faster than revenue .
- Higher operating cost intensity: Educational services expense +35.3% YoY to $7.48M and G&A +32.5% YoY to $4.35M, reflecting staffing, rent/externship fees, marketing, and public company costs .
- Limited contribution window from CCMCC: Only ~2 weeks consolidated in Q2; full financial impact deferred to subsequent quarters .

Financial Results

Sequential performance (oldest → newest)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$14.01	$13.64	$18.58
Operating Income ($USD Millions)	$2.67	$1.66	$3.67
Net Income ($USD Millions)	$2.09	$1.40	$2.82
Diluted EPS ($USD)	$0.21	$0.10	$0.21
EBITDA ($USD Millions)	$2.75	$1.76	$3.80
EBITDA Margin %	19.7% (calc)	12.9% (calc)	20.5% (calc)
Operating Margin %	19.1% (calc)	12.2% (calc)	19.7% (calc)
Net Income Margin %	14.9% (calc)	10.3% (calc)	15.2% (calc)

Year-over-year comparison (Q2 2024 → Q2 2025)

Metric	Q2 2024	Q2 2025
Revenue ($USD Millions)	$10.55	$13.64
Operating Income ($USD Millions)	$1.64	$1.66
Net Income ($USD Millions)	$1.29	$1.40
Diluted EPS ($USD)	$0.13	$0.10
EBITDA ($USD Millions)	$1.70	$1.76
Adjusted EBITDA ($USD Millions)	$1.70	$1.87

Estimates vs Actuals (Q2 2025)

Metric	Actual	Consensus
Revenue ($USD Millions)	$13.64	N/A (S&P Global data unavailable)
Diluted EPS ($USD)	$0.10	N/A (S&P Global data unavailable)
EBITDA ($USD Millions)	$1.76	N/A (S&P Global data unavailable)

Note: Consensus estimates were unavailable via S&P Global at time of request due to API rate limits. Values intended for consensus are typically retrieved from S&P Global.

Segment breakdown

Segment	Description
Single reportable segment	Education services delivered across campuses; CODM manages operations as a whole

KPIs and balance sheet (oldest → newest)

KPI	Q1 2025	Q2 2025	Q3 2025
Student Population (#)	2,539	2,768	3,245
New Student Starts YoY (%)	+23.3%	+3.0%	+70.7%
Ending Enrollment (#)	N/A	2,768	3,245
Cash and Equivalents ($USD Millions)	$21.49	$16.87	$17.33
Working Capital ($USD Millions)	N/A	$18.93	$21.95

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	FY2025/Q3 trajectory	None provided	None provided; management expects fuller CCMCC impact in upcoming quarters; emphasizes enrollment/program expansion and M&A pipeline	Maintained (no formal quantitative guidance)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025 and Q3 2025)	Current Period (Q2 2025)	Trend
Demand and enrollment	“Continuing high demand” with revenue +35.1%, starts +23.3%, student population 2,539	Enrollment +44.8% YoY; starts +3.0%; student pop 2,768; robust leads into Jan/Feb	Strengthening, with Q3 surge in starts (+70.7%)
Program expansion (healthcare)	Focus on higher-earning programs	New approvals: surgical tech, sterile processing, pharm tech, dental assisting; enrollments underway	Ongoing expansion; Q3 record growth supports scale
Technology/Hybrid learning	Not highlighted	Full implementation of Blackboard Ultra; advanced simulation in nursing/imaging	Building capability to enhance student outcomes
Regulatory environment	Not highlighted	Monitoring DoE; confidence in allied health focus amid gainful employment/borrower defense discussions	Stable-to-improving outlook per management tone
M&A pipeline	IPO-funded growth capital	Strong pipeline of mom-and-pop institutions; increased seller willingness post-election	Expanding pipeline; integration of CCMCC continues
Operations resilience	N/A	Rapid response to Pasadena fires; <1 week online transition	Positive operational execution

Management Commentary

“We’re energized by the strategic investments we’ve made in our team, facilities and programs… we’ve surpassed 3,000 enrolled students as of January 31, 2025” — LeeAnn Rohmann, CEO .
“We continue to scale up our nursing, medical assisting and imaging programs… integrating advanced simulation technology” .
“M&A continues to be a strong pipeline… many quality institutions are accretive; we’re assessing expansion outside California” .
“Trends into January/February: leads look good… demand has stayed very robust” .

Q&A Highlights

Regulatory backdrop: Management not concerned about funding; expects potential streamlining in gainful employment/borrower defense reporting under current administration .
Program specifics: Surgical technology is a new associate degree offering at Salinas; sourced via CCMCC acquisition .
M&A environment: Pipeline building with increased seller openness post-election; focus on accretive targets and geographic/program expansion .
Enrollment mix: Stronger-than-anticipated enrollments in cardiac sonography, MRI, and nursing (VN, RN) in the December quarter .
Near-term demand: Robust demand and improving lead trends; confidence into Q3 .

Estimates Context

S&P Global Wall Street consensus for Q2 FY2025 (Revenue, EPS, EBITDA) was unavailable due to API rate limit at time of retrieval; as a result, quantitative comparisons to consensus cannot be provided. We attempted to fetch: “Primary EPS Consensus Mean”, “Revenue Consensus Mean”, “EBITDA Consensus Mean”, “Primary EPS - # of Estimates”, “Revenue - # of Estimates” for Q2 2025.
Without consensus, we cannot designate beats/misses; directional narrative centers on YoY growth, seasonal sequential decline, and anticipated acquisition contribution .

Key Takeaways for Investors

Q2 delivered solid YoY growth (+29.2% revenue, +8.5% net income) despite seasonal headwinds; margins compressed sequentially but remain healthy relative to YoY .
Enrollment expansion and CCMCC contribution (389 students) underpin revenue growth; full acquisition impact expected in subsequent quarters .
Program growth in high-demand healthcare (cardiac sonography, MRI, nursing) and new program approvals support sustained revenue and mix shift toward higher-earning offerings .
Operational execution and resilience demonstrated by rapid fire-related response at Pasadena; technology deployment (Blackboard Ultra, simulations) enhances delivery .
Liquidity remains solid ($16.87M cash, $18.93M working capital at Q2), supporting growth investments and M&A pipeline .
Regulatory posture viewed constructively by management; note 90/10 ratios (FY2024) remain below thresholds but are elevated (HDMC 87.55%; CCC 79.51%; Integrity 84.19%), requiring continued vigilance .
Near-term trading implications: anticipate stronger sequential performance into Q3 (record revenue $18.58M, starts +70.7%) and continued enrollment/program momentum; watch for explicit guidance and integration updates as potential catalysts .

Legacy Education Inc. (LGCY)·Q2 2025 Earnings Summary