Legacy Education Q3 Earnings Call Highlights

Key Points

• Legacy Education posted record third-quarter results, with revenue up 15% to $21.4 million and adjusted EBITDA rising to $4.4 million. Net income increased to $3 million, supported by stronger student demand and 1,078 new student starts.
• Management highlighted improving operating leverage as educational services expense fell to 51.7% of revenue from 54.4% a year earlier. The company said it is investing in marketing, infrastructure, and compliance to support future growth while scaling profitably.
• Growth plans include program expansions, new space, and a potential new branch, with campus additions in Lancaster, Temecula, Salinas, and Pasadena already underway. Legacy also said it is pursuing selective acquisitions and has a next branch location identified, pending regulatory approvals.

Legacy Education NYSEAMERICAN: LGCY reported higher revenue and earnings for its fiscal third quarter, with management saying the healthcare education company is benefiting from continued demand for workforce training in nursing, imaging, sonography, surgical technology and other medical support fields.

Chief Executive Officer LeeAnn Rohmann said the quarter ended March 31, 2026, was another “record-breaking” period for the company and framed the results around profitable growth, operating leverage and investment in future capacity.

“Put simply, Legacy is not only growing, Legacy is scaling,” Rohmann said on the earnings call. She said healthcare workforce shortages remain structural and are being driven by demographic shifts, an aging population, increased healthcare utilization and greater clinical complexity.

Revenue rises 15% in the quarter

Legacy reported third-quarter revenue of $21.4 million, up 15% from $18.6 million in the prior-year period. Rohmann said the increase was driven primarily by expanded program offerings, improved retention and stronger execution across the company’s existing campus platform.

For the quarter, adjusted EBITDA increased to $4.4 million from $3.9 million a year earlier. Net income rose to $3 million from $2.8 million, while diluted earnings per share increased to $0.22 from $0.21.

Chief Financial Officer Brandon Pope said the quarter was supported by 1,078 new student starts and a 9.4% increase in student population, which rose to 3,550 from 3,245. Adjusted EBITDA margin was 20.6%, and the company’s effective tax rate was 28.7%, compared with 28.6% in the prior-year quarter.

For the first nine months of fiscal 2026, revenue increased 29.7% to $60 million from $46.2 million. New student starts over the nine-month period rose 12.7% to 2,788 from 2,473. Net income increased 15.1% to $7.3 million from $6.3 million, while diluted EPS rose to $0.52 from $0.51.

Operating leverage improves in educational services

Management highlighted improvement in educational services expenses as a percentage of revenue as evidence that the company’s model is scaling. In the third quarter, educational services expense was $11 million, or 51.7% of revenue, compared with $10.1 million, or 54.4% of revenue, a year earlier.

Pope said the 270-basis-point improvement was primarily due to operating efficiencies and compensation, offset by increases in externship fees and non-cash compensation.

General and administrative expenses increased to $6.2 million, or 28.8% of revenue, from $4.6 million, or 24.9% of revenue, in the prior-year quarter. Pope attributed the increase to marketing investments supporting current and future student starts, bad debt expense associated with higher revenue and enrollment levels, and infrastructure investments tied to program growth, branch readiness, compliance, software systems and operational scalability. Bad debt expense remained consistent at 5% of revenue.

Rohmann said healthcare education requires capacity investments before revenue is fully realized, including faculty, curriculum, labs, equipment, compliance approvals, technology systems, facilities and clinical partnerships.

Program expansion and new space support growth plans

During the quarter, Legacy added surgical technology cohorts across Contra Costa Medical Career College in Salinas and High Desert Medical College campuses in Lancaster and Temecula, generating 26 enrollments. The company also added sterile processing across HDMC campuses and the Integrity College of Health campus in Pasadena, generating 49 enrollments, according to Rohmann’s prepared remarks.

Rohmann said delayed state approvals shortened the company’s marketing runway for those classes, limiting the time available to enroll students. In response to an analyst question, she said the state approvals are now in place and the programs are continuing to ramp.

The company is also preparing the Salinas campus for cardiac sonography and MRI program expansion in the fourth quarter.

Legacy expanded facility capacity in Lancaster by adding 6,000 square feet, bringing the campus to 32,000 square feet. Rohmann said the added space has already been used to move imaging programs. In Temecula, the company secured a total of 53,000 square feet that will be assumed in stages: 5,000 square feet now, 31,000 square feet in June and 17,000 square feet in January 2028. The company currently occupies 16,000 square feet in Temecula.

In the question-and-answer portion of the call, Rohmann said Lancaster and Temecula each have more than 800 students, and the expansions could support growth toward roughly 1,000 to 1,200 students at each location over the next 12 to 24 months, depending on new programs and ramp-up timing.

Branch expansion and acquisitions remain priorities

Rohmann said Legacy has identified its next branch location, signed a letter of intent for a facility and is finalizing applications with applicable state and federal regulatory agencies. She said the planned location is outside California and remains subject to approvals.

In response to analyst questions, Rohmann said the potential new branch would include approximately 25,000 square feet and could launch with close to 17 programs, excluding nursing, which would require additional approvals and a longer ramp. She said the site could eventually support 600 to 800 students over a couple of years and has potential for additional square footage at the same facility.

Legacy also continues to evaluate selective acquisitions. Rohmann said the company is not seeking to “simply buy revenue,” but is looking for institutions or programs where Legacy can improve execution, strengthen outcomes, expand capabilities and create long-term value.

Balance sheet remains a focus

As of March 31, 2026, Legacy had $21.7 million in cash and equivalents, working capital of $30.9 million and debt of $600,000. Stockholders’ equity increased to $49.5 million.

Pope said operating cash flow remained positive at $2.9 million, reflecting the timing of Title IV disbursements and income tax payments during the quarter. He said the company’s liquidity, low leverage and profitability give it flexibility to fund organic growth, new programs, branch development and potential acquisitions.

Rohmann also pointed to recent accreditation developments, including a six-year reaccreditation grant for Integrity College of Health in Pasadena from ABHES and a five-year reaccreditation renewal for Contra Costa Medical Career College through ACCET.

“We are not sacrificing profitability to grow,” Rohmann said. “We are using profitability to build a larger, stronger, more scalable healthcare education platform.”

About Legacy Education NYSEAMERICAN: LGCY

The Company owns and operates the following career institutions that focus on real-life training by utilizing educational practices in different job markets: High Desert Medical College (“HDMC”), Central Coast College (“CCC”), and Integrity College of Health (“Integrity”). HDMC has three campuses located in Lancaster, California, Bakersfield, California and Temecula, California. HDMC offers the following certificate or degree programs: ultrasound technician (“UT”), vocational nursing (“VN”), VN Associate of Applied Science, Associate Degree of Nursing, nursing assistant, Magnetic Resonance Imaging (“MRI”) Associate of Applied Science, cardiac sonography, pharmacy technician, dental assisting, clinical medical assisting and medical administrative assisting programs (including medical billing and coding programs), veterinary assistant, UT Associate of Applied Science degree, phlebotomy technician and nursing assistant avocational courses, and a number of continuing education programs.

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