What Legacy Education (LGCY) Said on Its Q4 Earnings Call

Record fiscal 2026 results: Revenue rose 24.8% to $80.1 million, while adjusted EBITDA increased 24.1% to $13.6 million. Fourth-quarter operating margin expanded to 13%, with net income up 53.3% and diluted EPS rising to $0.13. Expansion plans are accelerating: Legacy plans to open its first non-California campus in Houston in November 2026, targeting 400–600 students within one to two years. The company is also adding capacity, launching new programs and evaluating acquisitions. Enrollment growth continued but timing affected recent starts: Fiscal-year new student starts increased 9% and ending enrollment rose 8.9%, though third- and fourth-quarter starts declined year over year due to program rollouts and nursing-entry changes. Management expects improvement as newer programs mature.

Legacy Education NYSEAMERICAN: LGCY reported record fiscal 2026 revenue and higher profitability, while outlining plans to expand programs, add capacity, enter the Texas market and evaluate acquisitions. For the fiscal year ended June 30, 2026, revenue increased 24.8% to $80.1 million from $64.2 million a year earlier. Revenue from the company’s preexisting brands rose 16.5%, or $9.9 million, while $6 million of the annual increase reflected a full year of results from Contra Costa Medical Career College, compared with six months in fiscal 2025.

“Fiscal 2026 was a record year for Legacy Education,” Chief Executive Officer LeeAnn Rohmann said. She said the company’s results demonstrated both the scalability of its platform and its ability to invest in future growth while expanding earnings. Fourth-Quarter Profitability and Margin Expansion Fourth-quarter revenue rose 12% to $20.1 million, compared with $17.9 million in the prior-year quarter. Revenue from preexisting brands increased 11.3%, according to management. Operating income for the quarter increased 31.3% to $2.6 million, while operating margin improved to 13% from 11.1%. Net income rose 53.3% to $1.9 million, and diluted earnings per share increased to $0.13 from $0.09. Adjusted EBITDA increased 30.6% to $3.1 million in the fourth quarter, with adjusted EBITDA margin rising 220 basis points to 15.5%. CFO Brandon Pope said total costs and expenses increased 9.6%, below the company’s 12% revenue growth, supporting operating leverage during the quarter. Educational services expense increased to $11.3 million, or 56% of revenue, from $9.4 million, or 52.6% of revenue, a year earlier. The increase reflected instructional payroll and staffing, books and supplies, externship costs, and facility and repair expenses. Pope said such expenses can precede revenue because personnel, labs, equipment, curriculum and related readiness requirements must be in place before regulated programs or branches launch. For the full year, operating income increased 18.3% to $11.8 million, net income grew 21.3% to $9.1 million, and diluted EPS rose 11.9% to $0.66. Adjusted EBITDA increased 24.1% to $13.6 million, while adjusted EBITDA margin was 17%.

New student starts rose 9% during fiscal 2026 to 3,483, while ending student population increased 8.9% to 3,377. Active student population across the company’s preexisting brands rose 8.1% to 2,869. During the question-and-answer session, Northland Securities analyst Mike Grondahl noted that starts had declined 12% year over year in the third quarter and were down 4% in the fourth quarter. Rohmann said the company does not view leads as an issue and attributed the trend to timing associated with program rollouts, the ramp of Sterile Processing Technician offerings, and changes to vocational nursing entrance requireme...