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Legacy Education Inc. (LGCY)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 2025 revenue rose 40.8% year over year to $17.9M and beat Wall Street consensus by ~6.9% ($17.95M vs. $16.79M*) while diluted EPS of $0.09 missed $0.11* and EBITDA of $2.11M missed $2.26M* .*
  • Sequentially, revenue declined from Q3 ($18.6M to $17.9M) and margins compressed (EBITDA margin ~11.8%* vs. 20.4%* in Q3), as educational services and G&A rose to support enrollment and programs .*
  • Demand remained healthy: new student starts +15.7% YoY in Q4; FY25 ended with 3,101 students (+41.8% YoY), with approvals for new degree/certificate programs; management tone remained confident on continued growth .
  • Liquidity improved: cash and cash equivalents $20.3M at year-end; equity $41.0M, supporting ongoing organic and M&A initiatives ; management highlighted an active acquisition pipeline earlier in the year .
  • Catalyst framing: Revenue beat vs. EPS/EBITDA misses and margin compression; continued enrollment momentum and program expansion vs. near-term seasonal pressure discussed by management heading into Q4 .

Note: We did not locate a Q4 2025 earnings call transcript in our database. The company held a call on Sept 25; we used the 8‑K and press materials for Q4 and Q2/Q3 call transcripts for trend context .

What Went Well and What Went Wrong

What Went Well

  • Revenue outperformed expectations: $17.95M (+40.8% YoY) and above consensus (~$16.79M*), driven by continued enrollment growth and pricing in certain programs .*
  • Enrollment momentum: Q4 new student starts +15.7% YoY; FY25 ended with 3,101 students (+41.8% YoY), underpinning growth into FY26 .
  • Strategic progress: approvals for 3 new degree and 2 certificate programs; management emphasized “record enrollment, expanded program offerings, and strong financial performance,” positioning for growth in 2026 . Quote: “With record enrollment, expanded program offerings, and strong financial performance, Legacy Education is well-positioned to continue its growth trajectory in 2026.” – CEO LeeAnn Rohmann .

What Went Wrong

  • Sequential softness and margin pressure: revenue fell from $18.58M in Q3 to $17.95M in Q4; EBITDA margin compressed (Q4 ~11.8%* vs. Q3 ~20.4%), reflecting higher instructional staffing, rent/externship fees and G&A (marketing, professional fees, bad debt) .
  • Operating costs rose faster than revenue YoY: Q4 G&A up to $6.33M (vs. $3.25M in Q4’24) and educational services $9.45M (vs. $8.55M in Q4’24), contributing to the EPS miss despite higher operating income YoY .
  • Non-GAAP dynamics: Adjusted EBITDA of $2.38M was below Q4’24’s $2.79M given much higher prior-year stock comp adjustments; EBITDA of $2.11M missed ~$2.26M* consensus .*

Financial Results

P&L Summary (GAAP and Non-GAAP)

MetricQ4 2024Q2 2025Q3 2025Q4 2025
Revenue ($)$12,752,420 $13,635,134 $18,577,565 $17,950,235
Operating Income ($)$832,491 $1,657,793 $3,665,997 $1,990,260
EBITDA ($)$908,359 $1,763,632 $3,796,063 $2,114,932
Adjusted EBITDA ($)$2,790,423 $1,872,789 $3,903,427 $2,384,178
Net Income ($)$961,342 $1,399,046 $2,817,465 $1,226,967
Diluted EPS ($)$0.10 $0.10 $0.21 $0.09

Margins

MetricQ2 2025Q3 2025Q4 2025
EBITDA Margin %12.93%*20.43%*11.78%*
EBIT Margin %12.16%*19.73%*11.09%*
Net Income Margin %10.26%*15.17%*6.84%*

Q4 2025 vs. Consensus

MetricConsensus*ActualSurprise
Revenue ($)$16.79M*$17.95M +$1.16M (+6.9%)
EBITDA ($)$2.26M*$2.11M -$0.14M (-6.3%)
Primary EPS ($)$0.11*$0.09 -$0.02

Values with asterisk (*) retrieved from S&P Global.

KPIs and Balance Sheet

KPIQ2 2025Q3 2025Q4 2025
New Student Starts (YoY %)+3.0% +70.7% +15.7%
Ending Student Population2,768 3,245 3,101 (FY-end)
Cash & Cash Equivalents ($)$16.87M $17.33M $20.32M
Working Capital ($)$18.93M $21.95M N/A

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/CommentaryChange
Revenue/SeasonalityQ4 2025None providedManagement cautioned Q4 to reflect general seasonality and “probably a little less than Q4 of last year,” citing timing of starts Qualitative cautious
All other items (margins, OpEx, tax, segments, dividends)FY26/Q1 2026None providedNo formal numeric guidance disclosed in Q4 materials N/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025, Q3 2025)Current Period (Q4 2025)Trend
Enrollment growth & program expansionQ2: +29% revenue; hybrid learning; approvals incl. surgical tech; strong demand in nursing/imaging . Q3: record Q3; starts +70.7%; ending enrollment +49.8%; continued program adds (sterile processing, surgical tech, EMT) .New starts +15.7% YoY; approvals for 3 degree and 2 certificate programs; record FY-ending enrollment 3,101 .Positive but seasonal moderation
M&A pipelineQ2: Active pipeline of quality, accretive targets; environment favorable; expansion beyond CA considered . Q3: Integration of Contra Costa progressing; evaluating additional targets .No Q4 specifics; strategy reiterated (growth, accretive acquisitions) .Ongoing, supportive backdrop
Technology/Delivery modelQ2: Hybrid learning, Blackboard Ultra, simulation tech . Q3: Continued use of advanced simulation; hybrid flexibility .Not reiterated numerically; growth positioning emphasized .Continues as enabler
Regulatory environmentQ2: Monitoring DoE; confident given allied health focus; compliance posture emphasized .No update in Q4 release .Stable confidence
Seasonality commentaryQ3 Q&A: Q4 expected to reflect seasonality; timing of starts pulled into Q3 .Reinforced by sequential margin/volume step-down .Seasonality evident

Management Commentary

  • “With record enrollment, expanded program offerings, and strong financial performance, Legacy Education is well-positioned to continue its growth trajectory in 2026.” – CEO LeeAnn Rohmann .
  • Q3 set-up for Q4 seasonality: “Some of those starts that would typically show up in Q4, showed up in Q3 this year... Q4... probably a little less than Q4 of last year.” – CFO Brandon Pope (Q3 call) .
  • Strategy reiteration (Q3): priorities are driving enrollment, adding programs in high-demand fields (sterile processing, surgical technician, EMT), optimizing costs, and pursuing accretive acquisitions .

Q&A Highlights

  • Program drivers: Q3 upside was led by nursing and imaging; additional nursing and imaging cohorts added (approx. +53 nursing, +20 imaging students) .
  • Seasonality and trajectory: Management flagged that start timing boosted Q3 and would temper Q4 vs. prior year; general seasonality expected in Q4 .
  • EMT rollout: Approved for HDMC locations; launched at Temecula (12-week, weekend format); expansion pending state/county approvals .
  • M&A pipeline: Management “talking to a few” targets, with ongoing evaluation of accretive opportunities .

Note: No Q4 2025 transcript was available in our document set; highlights above reflect the most recent (Q3) Q&A .

Estimates Context

  • Q4 2025: Revenue beat ($17.95M vs. $16.79M*), EBITDA miss ($2.11M vs. $2.26M*), and EPS miss ($0.09 vs. $0.11*). Actuals from company filings; consensus from S&P Global .*
  • FY 2025: Revenue beat ($64.17M vs. $63.00M*), EBITDA miss ($10.43M vs. $10.96M*), and diluted EPS of $0.59 vs. $0.63*. Actuals from company filings; consensus from S&P Global .*
  • Implication: Continued top-line outperformance on enrollment strength, but opex intensity and educational services costs kept profitability slightly below Street expectations.*

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Top-line momentum intact: Q4 revenue beat and strong FY25 growth reflect sustained enrollment/pricing tailwinds in allied health programs .
  • Profitability softer near-term: Q4 margin compression vs. Q3 tied to higher instructional staffing, rent/externship fees, and G&A; watch for operating leverage as new cohorts ramp .
  • Seasonality matters: Management flagged start timing pulling demand into Q3; expect quarterly volatility even with healthy annual trends .
  • Balance sheet optionality: $20.3M cash and solid equity base support program additions and M&A to extend growth runway .
  • Execution focus: Monitoring cost discipline (marketing/bad debt/pro fees) and integration benefits post-CCMCC to stabilize margins .
  • Narrative for the stock: Revenue beats are a positive catalyst; near-term stock reaction may hinge on margin trajectory and visibility into FY26 cost normalization and acquisition cadence .
  • Watch list: Additional program approvals/rollouts, progress on EMT expansion, admissions trends, and any quantified guidance introduced in FY26.

Sources:

  • Q4 2025 press release and 8‑K (incl. detailed financial tables, non-GAAP reconciliations) .
  • Q3 2025 8‑K/press and earnings call transcript .
  • Q2 2025 8‑K/press and earnings call transcript .

Values with asterisk (*) retrieved from S&P Global.