Lincoln Educational Services Corporation

Revenue increased 22.4% year over year to $142 million in Q2. Adjusted EBITDA rose 42.4% to $12.7 million, net income was $1.9 million versus $1.5 million last year, and diluted EPS was $0.06. Operating expenses increased $22.6 million to $139.2 million, and ending student population increased by approximately 1.8 thousand students, or 10% year over year, across 22 campuses. Through June, cash flow from operations was $26.6 million versus a use of $8.1 million in the prior-year period, and the company ended with $44.2 million in cash and $99 million of availability under its credit facility, with $26 million of debt outstanding. Full-year guidance was reiterated for revenue of $590 million to $600 million, adjusted EBITDA of $76 million to $80 million, net income of $23 million to $26 million, diluted EPS of $0.74 to $0.83, and student start growth of 10% to 14%. Capital expenditure guidance was increased to $95 million to $100 million from $70 million to $75 million.

Scott Shaw struck an upbeat tone, emphasizing Lincoln’s position in skilled trades, transportation, and health care training and saying the company is benefiting from strong demand for workers in those fields. He framed the quarter as evidence that the company is progressing toward its 2026 goals and 2030 targets, citing the August start class as potentially the company’s largest ever and saying he is confident in 10% to 14% full-year start growth. He also highlighted expansion efforts, including Hicksville, Rowlett, Suitland, and a first campus in Arizona, plus partnerships tied to AI infrastructure and data centers.

Brian Meyers focused on the financial outperformance and balance-sheet flexibility. He said revenue grew 22.4% to $142 million, adjusted EBITDA reached $12.7 million, and operating cash flow improved by nearly $35 million on a six-month basis to $26.6 million; cash ended at $44.2 million with $99 million available under the expanded revolver, and the facility was increased to $125 million. He also noted capex year to date was approximately $33.2 million, that the Melrose Park property was bought for $18.8 million with $15 million of new mortgage financing, and that 2026 capex guidance moved up to $95 million to $100 million because of Melrose Park and Suitland.

Analysts pressed on why Q2 starts slowed to 1% and whether the issue was lead generation, enrollment conversion, AI-driven search changes, or a show-rate problem. Management said the shortfall was driven by a mix of softer lead growth, enrollment-to-start conversion pressure, and some students becoming ineligible for additional Title IV aid after loan defaults; Scott Shaw said Q3 trends look better and the next start class is expected to be strong. Questions also focused on competition from apprenticeships and employers hiring directly, with management saying they have not seen a material impact and that employer demand for graduates remains strong, including an AI-related partner seeking to hire 10 to 20 students a week at $70,000 to $100,000 per graduate.