Q2 2026 Lincoln Educational Services Corp Earnings Call Transcript
Key Points
- Revenue grew 22.4% year-over-year, marking more than three consecutive years of double-digit quarterly growth.
- Adjusted EBITDA increased 42.4% to $12.7 million, with margin expansion despite new campus investments.
- Student retention improved by approximately 150 basis points, supporting a 10% increase in ending student population.
- Expanded credit facility to $125 million, boosting total liquidity to $143.2 million for growth initiatives.
- New campus developments (Hicksville, Rowlett, Suitland, Tempe) are on track, with Suitland expected to deliver over 30% IRR and $5 million EBITDA within three years.
- Student start growth slowed to 1% in Q2, below the expected 9% enrollment growth, due to lower conversion rates.
- Higher cost per start due to lower start volume, impacting operational efficiency.
- AI-driven lead generation changes have reduced lead volume and conversion, requiring ongoing adjustments to digital strategies.
- Student loan repayment resumption has led to defaults, preventing some students from starting due to inability to secure financial aid.
- Capital expenditures increased to $95-$100 million, partly due to the Melrose Park property purchase and Suitland campus, potentially impacting near-term cash flow.
Hello and welcome to Lincoln Educational Services second quarter, 2026 earnings call. (Operator Instructions)
I would now like to hand the conference over to Michael Polivio, you may begin.
Thank you, Towanda. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued a news release reporting financial results for the first quarter, excuse me, for the second quarter ending June 30, 2026, as well as recent corporate development. The release is available on the Investor Relations portion of the company's corporate website at www.lincolntech.edu. Joining us today on the call are Scott Shaw, CEO and President; and Brian Meyers, Chief Financial Officer and Executive Vice President.
Today's call is being recorded and is being broadcast live on the company's website. A replay of the call will be archived on the company's website. Statements made by Lincoln's management on today
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