Welcome to Strategic Education's Third Quarter 2025 Results Conference Call. I will now turn the call over to Therese Wilkie, Senior Director of Investor Relations for Strategic Education. Mrs. Wilkie, please go ahead.

Thank you. Hello, everyone, and welcome to Strategic Education's Conference Call, in which we will discuss Third Quarter 2025 results. With us today are Robert Silverman, Chairman, Carl McDonnell, President and Chief Executive Officer, and Daniel Jackson, Executive Vice President and Chief Financial Officer. Following today's remarks, we will open the call for questions. Please note that this call may include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. five. The statements are based on current expectations and are subject to a number of assumptions, uncertainties, and risks that Strategic Education has identified in today's press release that could cause actual results to differ materially. Further information about these and other relevant uncertainties may be found in Strategic Education's most recent annual report on Form 10-K, the 10-Q to be filed, and other filings with the Securities and Exchange Commission, as well as Strategic Education's future AKs, 10Qs, and 10Ks. Copies of these filings and the full press release are available for viewing on the website at strategiceducation.com. And now, I'd like to turn the call over to Carl. Carl, please go ahead.

Thank you, Therese, and good morning, everyone. On an adjusted, we continue to advance. We did incur ETS's share of operating income, U.S. higher education enrollments. Recently, we commissioned a survey that highlights the ongoing burnout facing the healthcare workforce and the projected shortfall. This research emphasizes the importance of investing in employees' growth and making continuously retained talent. Operating expenses, $23 million, restrictions, $1.1 million shares for $94 million purchase authorization through the end of this year. And finally, as always, I'd like to take this opportunity to thank all of my colleagues here at SEI for their ongoing commitment and support to our students and our employer partners. And with that, Cherie, we'd be happy to take that.

Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. One moment while we compile the Q&A roster. And our first question will come from the line of Jasper Bibb with Truist Securities. Your line is open.

Morning, everyone. Wanted to ask two on U.S. to start. I guess first, what drove the healthy revenue per student gain in the quarter, and what should we expect on our revenue per student basis over the next few quarters? And then second, a lot better margin than we anticipated in the U.S. too. Just hoping to get a bit more detail on the expense reductions there.

Hey, Jasper. It's Dan.

On the revenue per student, essentially remake our entire expensization and operating expenses by the end of 2017.

Okay. No, that's great. Could you maybe frame where you're at on that journey to $100 million in annual operating expenses, and is that only coming out of the U.S. business, or that's company-wide?

It's company-wide. In my prepared remarks, I referenced a restructuring that we completed at the end of the second quarter, beginning of the third quarter, on a run rate basis that equated to probably $30 million.

Okay. That's great. But for U.S., could you maybe frame the relative growth rates for Strayer and Capella at this point? And could you talk about how you're managing each of those businesses in the context of trying to get back to mid-single-digit enrollment growth at the segment level? It sounds like you might already be at mid-single-digit for Capella and Strayer's declining. Is that accurate?

I'd say that Capella has been stronger. We don't necessarily, the last 18 months or so, that's been much more effective at Capella. So we've worked to grow Capella.

And then I wanted to ask about Australia and New Zealand encouraging news on the international student caps. Are you still expecting that business to return to total enrollment growth in 2026?

For it to return in 2026, definitely new student growth when we anniversary the caps. it generally takes, you know, four to six quarters of new student growth clients you've had over the pre-

Okay, got it. Maybe I misremembered the comment from the last call. Last one for me, as you see it today, do you think the 26 for the company level would align with the notional framework you outlined a few years ago at the MS today?

Yeah, we are very anchored on our notional model. Nothing that I see now leads me to believe that we won't be able to hit the

Thank you for taking the questions, guys.

Thank you. As a reminder, if you'd like to ask a question, please press star 11. Our next question will come from the line of Jeff Silber with BMO Capital Markets. Your line is open.

Thanks so much. I wanted to start with Australia and New Zealand. I know many folks on the line don't necessarily follow what's going on on a daily basis. Can you just remind us exactly what has happened, what the changes were compared to what we thought might have happened?

The change is that the Australian government of any new student on the ability to leverage a pretty significant tuition premium for international students, and we at Torrance, for students to enroll at Torrance because they were going to save a significant amount of money, it was like the amount of finance, but regardless, whether it's the offshore students coming in for the first time or the international transfer students, we're going to anniversary these caps mid-26. We've seen pretty strong domestic new student enrollment growth throughout 25. So, when I was answering Jasper's question, I expect that we'll be growing new students in 2026, and hopefully that will translate into total enrollment growth by the end of 26. But by the time we fully anniversary these restrictions heading into 27, we expect that business to be growing.

Okay, that's really helpful. Appreciate it.

Why don't I move back to U.S. higher education, and I appreciate you guys calling out your healthcare exposure. Can you just remind us, I know there seems to be some concern on the street between what they call pre-licensure and post-licensure programs. Can you just remind us of the exposure in those two boxes?

We are not in the pre-licensure field in nursing. We are in the post-licensure with the RN to BSN program.

Okay, great. And just one more. I know also there's some concern on the government shutdown, specifically those companies that might have exposure to military and veteran students. Can you talk about any potential impact you've seen and what you think the impact might be going forward?

Or Dollar General.

I appreciate the caller. Thanks so much. Thank you.

Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Carl McDonald for any closing remarks.

Thank you, everyone. and we look forward to joining you in February to discuss our fourth quarter and full-year results.

This concludes today's program. Thank you all for participating. You may now disconnect.