Lincoln Educational Services Corporation (NASDAQ:LINC) Q3 2025 Earnings Call Transcript

Lincoln Educational Services Corporation (NASDAQ:LINC) Q3 2025 Earnings Call Transcript November 10, 2025

Lincoln Educational Services Corporation beats earnings expectations. Reported EPS is $0.1213, expectations were $0.12.

Operator: Good day, and thank you for standing by. Welcome to the Third Quarter 2025 Lincoln Educational Services Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Michael Polyviou. You may begin.

Michael Polyviou: Thank you, Kevin. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued a news release reporting financial results for the third quarter ended September 30, 2025, as well as recent corporate developments. 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, President and CEO, and Brian Meyers, Chief Financial Officer. 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’s call regarding the company’s business that are not historical facts may be forward-looking statements as the term is identified in federal securities laws.

The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions, are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance. The company cautions you that these statements reflect certain expectations about the company’s future performance or events and are subject to a number of uncertainties, risks, and other influences, many of which are beyond the company’s control and may influence the accuracy of the statements and projections upon which the segmented statements are based. Factors that may affect the company’s results include, but are not limited to, the risks and uncertainties discussed in the Risk Factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities and Exchange Commission.

Forward-looking statements are based on information available at the time those statements are made and management’s good faith belief as of the time with respect to future events. All forward-looking statements are qualified in their entirety by the cautionary statement. Lincoln undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise, after the date thereof. One other housekeeping matter. During the Q&A portion of the call today, we would ask them to limit themselves to 2 questions and then requeue as an addition. In advance, we thank you for your cooperation. Now I’d like to turn the call over to Scott Shaw, President and CEO of Lincoln Educational Services.

Scott, please go ahead.

Scott Shaw: Thank you, Michael, and good morning, everyone. Thank you for joining us today for our review of another exceptional quarter of operating and financial performance for Lincoln Tech. Our third quarter student start growth of 6% exceeded our internal forecast and marked the 12th consecutive quarter we grew student starts over the prior year’s period. We also continue to realize double-digit growth rates in total student population, total revenue, and consolidated adjusted EBITDA over the prior year periods, while also recording the third consecutive quarter of declining year-over-year bad debt levels. We generated $0.12 a share in net income while continuing to invest in our highly successful and expanding growth strategies, and once again are increasing our guidance for full-year financial results.

Brian will provide the details on the guidance. Lincoln has earned a well-deserved reputation for setting the standard of excellence in helping American corporations and organizations in their constant search for employees trained and skilled in trades such as HVAC installation and repair, residential and commercial real estate electrical systems, installation and repair, automotive and diesel systems maintenance and repair, welding, and nursing and other health care professions. Careers in these fields offer graduates secure, rewarding, and advancement opportunities likely to remain in strong long-term demand despite advancements in artificial intelligence. Recently, our growth has accelerated due to the nation’s increased interest in skilled trade careers and through our successful development of greenfield campuses and the expansion of successful programs to existing campuses.

Since the beginning of 2024, we have opened new campuses in East Point, Georgia, and Houston, Texas, while relocating outdated and space-constrained campuses in Nashville and Philadelphia to new and expanded state-of-the-art facilities. As we reported during our second quarter call, East Point’s start rate after 18 months of operation achieved a level we plan to achieve after 3 years of operation. Due to this exceptional growth, we have secured an additional 15,000 square feet of space immediately adjacent to our current facility to meet the increasing demand. Meanwhile, in Nashville, the start of existing programs at the new campus exceeded our expectations. The expanded campus enabled the addition of electrical and HVAC programs, which also added to the momentum.

In Levittown, Pennsylvania, we completed the transfer of our automotive program from Philadelphia and have started our first classes in HVAC, welding, and electrical. Finally, we began our first classes in our new Houston, Texas campus during the third quarter, and the response is also exceeding our pre-opening expectations. East Point, Nashville, Levittown, and Houston are generating stronger and faster returns than we anticipated when we made these investments. This both increases conviction in our greenfield and expansion strategy and is accelerating our growth, allowing us to fund our ambitious growth plans from operating cash flow supplemented with our credit facility for seasonal needs. New campus development has driven about half of our recent start growth, and the implementation of our innovative Lincoln 10.0 hybrid teaching platform, increasing returns from marketing efforts, and the expansion or addition of programs have generated good, solid organic growth at existing campuses.

As a result, we are realizing increasing levels of instructional efficiencies, space efficiencies, and organizational productivity through Lincoln 10.0 and other initiatives. Brian will provide more details on the progress we are making by leveraging our operating expenses to generate cash flow that is funding our expanded growth objectives in a few minutes. As the overall national growth and new job creation slow, interest in skilled trade training as an alternative to the traditional 4-year college education continues to expand. The federal government’s actions impacting student loans have further fueled this interest, and our team is executing our updated growth strategies for the benefit of our students, corporate partners, instructors, and shareholders.

Last week, we announced plans to expand Lincoln’s presence in Texas by developing a new state-of-the-art campus in Rowlett, Texas, a northern suburb of Dallas. This new campus, our 24th nationwide, is located near major interstate highways 635 and 30 and will complement our highly successful Lincoln Tech campus in Grand Prairie, Texas, which is west of Dallas. The new 88,000 square foot campus will have a capacity for over 1,600 students and will offer automotive, welding, electrical, and HVAC training when it opens at the beginning of 2017. We have found that by having 2 strategically located campuses in growing metropolitan markets, we are able to leverage resources and enhance our ability to serve students, instructors, and corporate partners.

In Atlanta, our 2 campuses, located in Marietta and East Point, have both benefited from marketing and other corporate resources, resulting in higher-than-expected starts at both campuses. We are hoping to generate similar leveraging opportunities in the Dallas market when the Rowlett campus opens. Similarly, our new campus under development in Hicksville, Long Island, is progressing towards opening in late 2026 and will be our second campus in the metropolitan New York City area, where we have successfully operated our Queens campus for over 20 years. With each new campus, our objective is to achieve $25 million to $30 million in annualized revenue and $7 million to $10 million in EBITDA for the fourth year of operation, if not sooner. In addition to new campus development, program expansion or replication at existing campuses is contributing to Lincoln’s growth.

We added or expanded 6 programs at existing campuses during 2024 and are well on the way to adding 5 more this year. In total, these 11 programs are a key contributor to our start growth. Lincoln’s partnerships with corporations throughout America have long been a contributor to our success. Our tailored training for these companies helps them close the workforce skills gap while providing graduates with secure, rewarding career opportunities with advancement potential. This year, many potential partners have extended decision-making timelines largely due to ongoing economic uncertainty. However, during the third quarter, we did expand our innovative training program with CMC Corporation, under which we are training their employees at their facilities rather than at Lincoln campuses.

We signed our original 5-year agreement with the company in 2023 and believe our extended partnership with CMC illustrates the contribution we are making to closing their workforce skills gap. Another key growth initiative at Lincoln involves our health care programs. Our new leadership for this segment is hard at work developing changes to our instructional model and improving operating effectiveness and efficiency. One area of focus is to expand our offerings beyond the current LPN certificate so that students can earn RN degrees. Such a development would substantially increase our addressable market in the nursing field. Meanwhile, last quarter, we talked about our efforts to regain enrollment status at our Paramus Nursing program. We have now exceeded the graduation benchmark in this program for the past 12 months and have received approval from the State Board of Nursing to begin reenrolling students starting in January of 2026.

This is great news and is a testament to our ability to deliver quality nursing training across New Jersey. New Jersey, like most of the nation, faces a severe shortage of nurses at all levels, and we look forward to doing our part to lessen the shortage and bring greater and better nursing care to the state. We also introduced you to our high school share program during our last call and have made some substantial progress with this initiative. For instance, at our Mahwah, New Jersey campus, the number of students enrolled through high school shares has doubled from last year. More and more school districts in New Jersey, as well as other states where Lincoln operates, have inquired about implementing a share program at their schools. Under this program, students attend Lincoln classes during their junior and senior years and then continue after high school to gain their certificate in less time, which accelerates their entry into rewarding careers.

With school districts under constant budgetary challenges, our initiative enables the continuation of skilled trades training within the high school while building our enrollment. We are quite excited about the potential for this initiative. It, along with additional investments in our high school outreach programs, leads us to be optimistic about our opportunities to enroll more high school students graduating in the spring and summer of 2026. In addition to these initiatives, we are also exploring expansion efforts through corporate development activities, including acquisitions and joint ventures. Recently, several start-ups targeting skilled trades have contacted Lincoln to explore ways we could facilitate their strategy through our capabilities.

These discussions are in the early stage and require little, if any, of our development resources, but do illustrate the expanded interest in increasing skilled trades training in America to address the continuing skills gap. While there is a decided focus on growth at Lincoln, we continue to make investments in people and processes to ensure that we deliver an exceptional learning experience for our students. We want to be the best, and we want the best for our students. To achieve this goal, we are constantly evaluating new software, curriculum, and training aids. In addition, we want our instructors to have industry-recognized credentials that ensure they have the most up-to-date knowledge in their field, so our students have an edge on their competition.

With technology ever changing, we are constantly in pursuit of what will help our students master the skills they desire to become the technicians, welders, and health care providers that will lead the next generation of skilled, hands-on professionals. We believe one way to measure the effectiveness of our investments in people and processes is our graduation rate, as well as the employment of our graduates in their field of training. Despite our growth in students, both metrics remain strong, and we are constantly evaluating ways to build on this success rate. For nearly 80 years, Lincoln has remained focused on delivering high-quality, life-changing career education, and no one else has our combination of longevity, scale, and proven experience.

By continuing to expand our network of schools, replicating our most in-demand programs at our existing campuses while building new campuses in new and existing markets, we believe we will comfortably surpass the objectives established last year of approximately $550 million in revenue and approximately $90 million of adjusted EBITDA in 2027. Therefore, today, we are increasing our targets, which Brian will review in more detail in a few moments. While we are always evaluating acquisitions that make strategic and financial sense for our company and our shareholders, our new 2027 milestones will be achieved organically through our existing operations and new campuses developed internally. As I’ve discussed before, our country’s existing severe skills gap will likely get worse before getting better, and we believe there are many significant underserved markets in America where employers and employees will benefit from our innovative and proven approach to skilled trades training.

Despite all this positive news and solid execution, it appears that the market still does not understand who we are and what we can become. Furthermore, while others in our sector have had their businesses negatively impacted by internal execution challenges and the external environment, we at Lincoln Tech have not. Consequently, I want to bring additional clarity to our story. First, while the government shutdown has been the longest in history, our students have continued to receive timely disbursements of federal aid used to finance their education at our schools. The U.S. Department of Education reminded the higher education community of the minimal impact on students at the beginning of the shutdown, and our businesses have not been affected.

Second, we continue to see strong interest in our programs, and the current environment for us has not lessened. Third, the decline in our Healthcare segment is not meaningful, nor is it a concern. We have been rationalizing our program offerings for the past several years to focus resources on our most in-demand programs to meet market demand as well as to ensure that we have the industry-leading curricula and training experiences that will set our students apart and give them an edge in the employment market. Within our reported Healthcare segment, there are non-healthcare programs such as culinary and IT, as well as small allied health programs such as patient care tech and dental assisting. We are selectively exiting these noncore programs, and we’ll continue to do so when we see better opportunities for the classroom space.

Our focus currently is on our licensed practical nursing and medical assisting programs. And during this quarter, these grew by 2%, and this is without LPN starts at our Paramus campus, which will restart in a few months. As we have mentioned in the past, we are continuing to work on plans to offer registered nursing programs in the not-so-distant future. Fourth, growth initiatives are meeting and exceeding our expectations and guidance. We are replicating our most successful programs wherever there is demand and we have space, and we are opening new campuses that our research tells us are underserved. In simple terms, we are constantly looking to double down on our success. Our minimum expectation is for all of these investments to achieve a threshold 20% IRR on a fully burdened basis, including all direct costs needed to open and operate these facilities.

I’m very proud to say that to date, we have exceeded this threshold. Fifth, we’ve been investing in our team to ensure that we have the talent to not only deliver on what we have announced to date, but also to enable us to capitalize on new opportunities as they arise. One clear example of this is our significant refocus on growing our high school student population. Our recent high school results, along with the increased outreach by numerous high schools around the country who are asking for ways for us to help with vocational training, are clear indicators that the stigma of career technical training is lessening. Students, parents, and even high school guidance counselors are more interested in the trades than ever before. To tap into this opportunity, over the past 7 months, we have hired new talent and are reinvigorating our high school recruiting strategy, and we are already seeing good results.

As many of you know, I have been with Lincoln Tech for nearly 25 years, and I believe that our organization has never been stronger nor has had as many growth opportunities as we have today. Moreover, we have consistently proven to ourselves that we can capture opportunities. We have achieved what we have set out to achieve and continue to find new opportunities. Recent survey results show that our employees have never been more engaged and satisfied. We are all working for the common good of our students so that they can graduate, launch their careers, and find satisfaction and pride. As obstacles arise, and they always do, we find solutions. Our business is strong and our company is vibrant. Finally, I’d like to note, we will be continuing our investor outreach during the remainder of the fourth quarter.

This week, we have several virtual meetings scheduled by ThinkEquity. Next week, we will be attending the Southwest IDEAS Conference in Dallas. And later this month, we will be in Montreal on November 26 with Barrington. Next month, Brian will be attending Northland’s Virtual Conference on December 16. Additionally, we will be hosting an Investor Analyst Day at our new Nashville campus on March 19, 2026, to showcase the site and review our long-term growth plan and operating objectives. I urge you to contact Michael Polyviou if you would like to attend. Finally, with Veterans Day being observed tomorrow, I want to extend our appreciation to our military members and their families for their valued service and sacrifice to our country. Now I’ll turn the call over to Brian Meyers, so he can review some of our recent financial highlights and guidance.

Brian?

Brian Meyers: Thanks, Scott, and good morning, everyone. Lincoln delivered another strong quarter with several key metrics once again exceeding our internal forecast. Continued momentum in enrollment growth, combined with improved operating efficiencies, was the primary driver of this performance. These results reflect the strength of our model and our continued focus on operational execution. Before I get into the quarter’s financial results, a couple of reminders about our year-over-year comparisons: first, the financial comparisons in my remarks exclude the Transitional segment, which consists of our former Summerlin Las Vegas campus, which we sold in late 2024. Second, as noted on last quarter’s earnings call, our reported Q2 starts include an adjustment for the 2,764 students that start on July 1 to align with the prior year class start timing.

For this quarter’s comparison, we have excluded those starts to maintain consistency with the prior year. With those points in mind, let’s turn to the quarter’s financial highlights. Revenue for the quarter was $141.4 million, an increase of 25.4%. The strong performance reflects the continued momentum in student starts year-to-date. Turning to student starts. Starts for the quarter were approximately 6,400, representing a 6% growth. We had originally expected starts to be relatively flat, given the strong 22.5% growth in last year’s third quarter. Achieving a 6% growth over such a high comparative base underscores the persistent demand we are seeing for our programs. The outperformance was mainly in skilled trades, which experienced better-than-anticipated starts, particularly in our new programs and replications.

Revenue per student increased by 4.8%, reflecting both tuition increases and the timing of book and tool revenue. The average student population grew by nearly 20% and the ending population increased by about 17%. As we closed the quarter with over 2,500 more students than the prior year, the ending population climbed to about 18,200 compared to 15,600 in the prior year. Breaking down the composition of this quarter’s start growth. Transportation and skilled trade programs delivered an 11.8% increase in starts, driven by continued strong demand as well as successful program additions and expansions. Excluding the program launches in 2024 and 2025, we still achieved a robust 7.9% growth. As anticipated, our health care and other professional programs experienced a 13.7% decline in starts.

Approximately half of this decline resulted from the discontinuation of the smaller programs, which we have determined are no longer part of our core program offering. We continue to refine our program offerings to align with areas of strongest student interest and employer demand. As we sunset smaller programs, we will strengthen our core offerings while improving our profitability, particularly in our licensed practical nurse and medical assistant. In addition, as Scott mentioned, we are pursuing degree-granting approval to offer a registered nurse program. Also, as noted, we will commence new enrollments in our LPM program at our Paramus campus beginning in January 2026. Turning to expenses. Total expenses were $135.1 million compared to $106.3 million in the prior year.

The increase was in line with our internal expectations and primarily driven by direct costs associated with the larger student population as well as ongoing investment in our growth initiatives. From a profitability standpoint, our adjusted EBITDA grew by 65.1%, reaching $16.9 million, up from $10.2 million last year, which includes the Transitional segment. This improvement continues to highlight the operating leverage generated by several key initiatives. As Scott mentioned, these include efficiencies from our Lincoln 10.0 hybrid teaching model, which has contributed to lower instructional costs as a percentage of revenue and improved space utilization. In addition, we are seeing improvement in bad debt expenses, which have declined as a percentage of revenue for three consecutive quarters.

Net income for the quarter was $3.8 million compared to $4 million, including Transitional. Adjusted net income was $6.3 million or $0.20 per diluted share compared to $4.1 million or $0.13 per diluted share, representing an increase of $2.2 million or 54.9%. Looking at our balance sheet. We ended the quarter with $65.5 million in total liquidity. This quarter, we generated $23.9 million in cash from operations. On a year-to-date basis, cash from operations totaled $15.8 million as reflected on our cash flow statement. Due to our seasonality, most of our income and cash are generated in the second half of the year, with the highest level typically in Q4. We finished the quarter with $8 million in outstanding borrowings and $13.5 million in cash on hand.

Based on historical trends and an outlook for a strong fourth quarter cash flow, we are forecasting to end the year without any debt outstanding and a higher net cash balance. Now turning to capital expenditures. We continue to execute on our key expansion projects. The total capital expenditures were approximately $21.7 million for the quarter and $68.1 million for the first nine months of the year, as reflected on the cash flow statement. The majority of our quarter’s spending was tied to our growth initiatives, including two recent campus relocations and the build-out of our new Houston campus, which opened during Q3. As Scott mentioned, we are excited to announce our fourth greenfield campus in Rowlett, Texas. The build-out is expected to take approximately one year with an anticipated opening in the first quarter of 2027.

We view the expansion as an important step in our growth strategy and are encouraged by the strong performance of our prior greenfield campuses. While new campuses require meaningful upfront investment and take approximately two years before they become operational, they are an exceptional growth driver for Lincoln. These investments are expected to generate internal rates of return exceeding our 20% threshold. Our East Point campus, now in its second year of operation, is well on its way to delivering returns significantly above this threshold. Looking ahead to the remainder of 2025. Based on our performance and strong momentum across our core growth drivers, we are raising our full-year guidance across all metrics. We now expect revenue ranging from $505 million to $510 million, adjusted EBITDA in the range of $65 million to $67 million, net income ranging from $17 million to $19 million, student starts growth of 15% to 16% and capital expenditures unchanged at $75 million to $80 million.

As a reminder, our guidance excludes stock-based compensation, one-time noncash pension termination expense expected in Q4, pre-opening and net operating losses from new and relocated campuses, and program expansions. For more detailed guidance, please refer to our earnings release, which was filed earlier today. Beginning in 2026, we will no longer adjust our EBITDA for preopening costs and net operating losses from new campuses and program expansions as we currently do. Going forward, adjusted EBITDA will reflect only the add-back of noncash stock-based compensation and other nonrecurring items. In our discussions of operating expenses, we’ll continue to call out the losses incurred from campuses that have not yet commenced operation to provide investors with a clear understanding of the profitability of our current operations in future periods.

While we will provide formal 2026 guidance during our fourth quarter earnings call in February, we can communicate today that based on our current growth, improving profitability and current investment plans, we expect our 2026 adjusted EBITDA under the revised methodology to exceed our 2025 guidance of $65 million to $67 million, which excludes approximately $10 million of add-backs for new campuses and program expansions. Finally, looking ahead, we remain confident in our long-term growth trajectory. With respect to our previously communicated 2027 financial objective of $550 million in revenue and $90 million in adjusted EBITDA, we now expect to exceed both of these targets. Based on our current performance trends and strategic initiatives, we are projecting to achieve more than $600 million in revenue and over $90 million in adjusted EBITDA by 2027 without the benefit of adding back approximately $10 million of expenses for new campuses and program expansions that were included in our original long-term plan.

In closing, as our nation observes Veterans Day, I also want to extend our sincere gratitude to all members of our Lincoln community, students, instructors, and alumni who have served or are serving in the armed forces. And with that, I’ll turn the call back over to the operator for your questions. Operator?

Q&A Session

Operator: [Operator Instructions] Our first question comes from Alex Paris with Barrington Research.

Alexander Paris: I just wanted to ask a couple more clarifying questions on 2026. Actually, Brian’s final comments in his prepared comments. So this year, in 2025, the adjusted EBITDA guidance of $65 million to $67 million. That includes the impact or the add-back of roughly $10 million in pre-opening costs and so on?

Brian Meyers: Correct. You’re talking about in 2025?

Alexander Paris: Yes, in 2025. And then you said regarding 2026, it sounded like you’re forecasting maybe another $10 million of preopening costs.

Brian Meyers: Correct. And even without those add-backs, we’ll be able to exceed the $90 million that we originally had in our plan with the add-back of that $10 million.

Alexander Paris: And you’ll exceed the $65 million to $67 million that you’re going to do in 2025 based on guidance?

Brian Meyers: Correct.

Alexander Paris: This is my follow-up question. What about CapEx for 2026? I think you said $70 million to $80 million this year to my notes here somewhere.

Brian Meyers: We haven’t put anything out yet for 2026. We’ll announce that in February. It will probably be similar or maybe slightly down from this year.

Operator: Our next question comes from Luke Horton with Northland Capital Markets.

Lucas John Horton: Congrats again on a nice quarter. Just wondering if we could get a sense of what drove this strong performance? I mean, a little bit from a campus level or from a program mix perspective. Just looking at the updated guide for 2025 starts, I mean, this implies nearly a 30% start growth in 4Q. So, a little bit for the quarter, what drove the beat, and then the expectation in 4Q of that strong start from a campus-level or program mix perspective?

Brian Meyers: Right. So at the low end of the range, that’s actually a 15% stock growth for Q4. And at the high end of the range, it will be about a 20% stock growth for Q4. So, not exactly 30%, but with that being said, we are forecasting robust stock growth for Q4.

Scott Shaw: Which is what we guided to before, just based on the trends we’re seeing, as we are seeing strong interest overall, as well as the performance of our new campuses and programs.

Lucas John Horton: And then you guys did mention building out some more square footage at East Point. Can we get a sense of student capacity with these ads? Is this a meaningful expansion here, just trying to rightsize the space?

Scott Shaw: Sure. So we’re probably adding, frankly, about 500 student capacity with this addition.

Lucas John Horton: And then just lastly, on the health care side, you guys talked about expanding to RN programs beyond just the LPN. You said in the near future, I guess, could you just walk us through the timeline of this, or from a regulatory perspective, what needs to be done here? And then would that give you accreditation to offer these across all campuses? Or is it a state-by-state accreditation?

Scott Shaw: Yes, it’s a good question. So it’s a long process, and it is step-by-step. Today, where we have our LPN program, we’re not degree-granting. And in order to offer an RN, we have to become degree-granting. So we have applications to become degree-granting in New Jersey, New York, and Connecticut. And so that process could take anywhere from 12 months to, frankly, 48 months, depending on the state. We’re obviously pushing to make it happen as quickly as possible. But we know that our LPN students, a large percentage of them are going on to become RNs as well, as naturally the RN career itself is the largest in the health care sector. And in these states, and particularly New Jersey, is one of the highest that has the greatest shortfall of nurses to population.

So we feel really good about the opportunity. It’s the process of getting through the regulatory hurdles to get there. But we’re also looking in certain other states where we have degree-granting already, but don’t have an LPN program; we’re evaluating putting an RN program there. But there’s been nothing decided as of yet.

Operator: Our next question comes from Eric Martinuzzi with Lake Street Capital Markets.

Eric Martinuzzi: The 2027 new guide, I just wanted to make sure I’m apples-to-apples with the old guide. I think the $550 million excluded Atlanta, Houston, and then the program expansions at Levittown and Nashville. Can you clarify that?

Scott Shaw: Go ahead, Brian.

Brian Meyers: No, it always included — it didn’t include Houston because when we first put that out, Houston, what wasn’t announced yet. It was really only included for the new campuses, the East Point. So it included revenue from East Point. Now exceeding $600 million, that includes everything announced as of today for revenue.

Eric Martinuzzi: So that would be assuming Pikesville and Rowlett are online, they would contribute towards that 600?

Brian Meyers: Correct. [indiscernible] online first quarter of ’27. Correct.

Eric Martinuzzi: And then the decline in the hop starts. You clarified that that was tied to Paramus, and we’re going to get the green light for Paramus in 2026. And then the massage and culinary, we’re choosing not to pursue those. At what point do we get back to organic positive growth? And were we positive ex the Paramus and the massage and culinary here in Q3?

Scott Shaw: Yes. So as I mentioned, the two core programs that represent more than 80% of the students in health care are LPN and medical assisting. And those two programs grew at 2% in the third quarter. I would anticipate next year that we should be positive again, especially with the opening of nursing at our Paramus campus. So in 2026, certainly, those two programs will continue to grow.

Operator: Our next question comes from Raj Sharma with Texas Capital.

Rajiv Sharma: Congratulations on solid results again, especially given where some of the other players in the education space are talking about. So it seems like in the healthcare starts, there’s a lot of noise. There are programs that are going out, and the programs are coming back in. So what starts, and what kind of growth do you expect? I know you just said about 2%. Is that overall, your other noise goes away in the health care arena, and now you’re left with LP, and can you talk about just ongoing in the next couple of years, what should we expect from the health care and nursing segment?

Scott Shaw: Sure. So again, let’s just put this all in perspective. Today, the health care and other segments are 20% of our population. So the bulk of what we’re doing is all in the automotive and skilled trades, and those are the programs today that we’re replicating. As we said in the call, the core programs in health care, LPN, and MA are still growing, and we would anticipate that to continue into the future. We are going to complement that in the future with an RN. But again, it’s too early in the game to say where things are going. All I can share with you is that all of our guidance and all the information that we’re sharing incorporates all these changes that are taking place. And the overall message is that our business is very, very robust and our growth rates will reflect that. I don’t know if that helps you.

Rajiv Sharma: Yes. And then just following on, I know Brian had touched on the guidance of fiscal ’26. So the way I read it is you’re talking about the EBITDA guidance, the apples-to-apples would be the $65 million, $67 million this year would have been $75 million, $77 million at least for fiscal ’24. Are you saying anything about start of next year’s revenue growth? Do you see anything on the horizon that would disrupt the current starts growth for transportation or health care?

Scott Shaw: No. I mean, as I think we said in our remarks, things are, frankly, very robust, have been very steady, and we’re seeing just strong conversions and strong interest, both also, as we said, from the adult market and the high school market. And I’ll just highlight that the high school market is seeing increased interest, and that’s an exciting opportunity for us, and we’re going to capitalize on that more so in 2026, given the investments we’re making today. And then that will grow even more, I believe, into 2027.

Rajiv Sharma: And then just lastly, on the regulatory horizon, any developments that we should be on the lookout for? I mean, anything happening in the negotiated rulemaking that we should be on the watch out for?

Scott Shaw: Sure. There’s nothing that I’m aware of that affects Lincoln Tech that’s out there. Obviously, we have to stay on top of it because things change in this environment very quickly. But as of right now, Raj, I don’t see anything that’s going to derail us from what our plans are and where we’re going as a company.

Operator: [Operator Instructions] Our next question comes from Steve Frankel with Rosenblatt Securities.

Steven Frankel: What did you learn from East Point that maybe you’re going to change as you open this new campus in Texas? Is there anything that you take away from the early days of East Point that says, well, maybe we could do these things to get an even faster start?

Scott Shaw: Yes. I think that the biggest thing we took away is that we made East Point very efficient. It was less than 60,000 square feet, and it filled up so quickly that in planning our next campuses, we already realized that we should be looking at larger square footage, as our more recent campuses, even our relocations, Philadelphia is at 90,000, Houston is at around 90,000. And as we mentioned, Roulette will be around 90,000. And I also highlight that within that 90,000, we have about 10,000 to 12,000 of undeveloped space for future programs. So we just decided, given the success that we were seeing, that we should build facilities that could accommodate more in those local markets, as well as build in some opportunity for future expansion opportunities for us.

So that’s the biggest lesson. The others are operational. We hadn’t opened a new campus in about 18 years. And I think that we’ve now figured out what the model is and when to staff it, and how to get the excitement within the market up before our campuses open up. I mean, East Point was a market where we already had a presence with our campus in Marietta. Houston is a market where our name isn’t as well-known. So we’re spending a little bit more to make it well known, but we’re starting to see similar results as in East Point. So things are going well, and we constantly learn as we open up new programs and replicate in each market.

Steven Frankel: And then from a 30,000-foot view, have you seen any material decline in interest for legacy auto diesel programs? Or does that continue to be a healthy portion of the skilled trade mix?

Scott Shaw: We’re still seeing positive growth, but certainly, the skilled trades are growing faster at this point. Things fluctuate. Obviously, if you look at our numbers overall or I would say we’ve replicated the skilled trades the most. Simply because it’s the most cost-effective for us to do that. So we have more skilled trades programs today than we have auto programs. But we are still seeing, as I’ve mentioned, our organic growth has been, frankly, very strong due to improvements in the Lincoln 10.0 and due to increased marketing efforts to get the word out, and frankly, the receptivity that’s out there. So skilled trades are definitely growing more for Lincoln than auto, but we’re seeing positive growth in, frankly, all segments.

Operator: Our next question comes from Griffin Boss with B. Riley Securities.

Griffin Boss: So I’ll just start off, you sort of back out an average tuition per student. That came in very strong in the quarter. I think Brian mentioned something about structurally higher tuition. But curious if you could expand on that. Is this higher average tuition per student just pricing? Or is it also program mix?

Brian Meyers: It’s a good question. For the quarter, we got the benefit of the timing of books and tools. I think I might have mentioned that in my prepared remarks. When we give out tools, we earn the revenue when it was given out, but we also have the expense. So, that big start that happened on July 1, we did have a pickup in revenue there, but we also have an offsetting expense on that as well. We benefited from that for Q3 as well.

Scott Shaw: But just to be clear, we raised tuition by 3% or less. It varies by program, and that happens just once a year, so usually at the beginning of the year. So the changes that Brian is mentioning could either be a somewhat program mix or, as he said, we got the benefit of all these starts. And so when students start, we book a lot of the books and tools revenue at that point. So that can distort it slightly.

Brian Meyers: Right. Because overall, it was about 4%. So as Scott was saying, about, I would say, 2% to 3% is tuition increases. We do benefit from a little bit of our program mix being slightly higher with our starts, but then some of it was due to the book and tool revenue.

Griffin Boss: And then just last one for me. Can you remind us what maybe the average ramp-up period is for new campuses? Obviously, you talk a lot about revenue and EBITDA expectations, but you mentioned that this new Routed campus will have 1,600 student capacity. How long does it take you to fill those seats? When you open up a campus, do you expect to have a certain amount of capacity initially that maybe increases over time? How do you think about that?

Scott Shaw: Sure. So I mean, just looking at East Point as an example, obviously, a very strong performer for us. Within the first 18 months, it has about 700 to 800 students. We would anticipate that our other campuses will perform similarly in the first 18 to 24 months. When we say it has about 1,600 student capacity to get our return on investment that we’re looking for, we don’t need that many. Frankly, we’re basing that off of closer to, let’s say, 850 to maybe 1,000 students. So I hope that helps you.

Operator: Our next question comes from Alex Paris with Barrington Research.

Alexander Paris: Just a quick follow-up. I meant to ask on the previous — In light of Veterans Day tomorrow, you mentioned military. Just curious, what is Lincoln’s overall military exposure as a percent of total enrollment? And what is the character of that military enrollment? Is it military tuition assistance for active duty? Or is it the Veterans Administration GI bill?

Scott Shaw: Yes, it’s a good question. Well, as a reminder, we started as a military training organization by our founder to train vets from World War II. And unfortunately, we’re down to only about 5% to 6% of our students today who are military. And part of that is because when we move to the Lincoln 10.0 model, you’re not allowed to provide housing benefits to our military through the GI bill if it’s a diploma hybrid program unless you have a degree program. So our initiative to get degrees in a number of states where we don’t have degrees will enable us to start reenrolling veterans in those areas. So they’re all using their GI benefits. So these are people who have left the military. And we would anticipate as we get, as I said, degree branding, particularly in the states of New Jersey and New York, that we’ll start seeing, frankly, a growth again in our veteran population.

Alexander Paris: So to be clear, it’s veterans, and that’s what I thought. You don’t have a material amount of active duty. And GI bill funds are flowing. It had been an issue for another one of your competitors, the American public.

Scott Shaw: Yes, that is correct. That’s what I tried to say in my remarks, I mean for us, for Lincoln, for what we do, who we serve, the shutdown and the changes that are taking place in Washington have not negatively impacted our business, and that’s why we’re able to get those strong results that we’ve been achieving to date and that’s why I believe that we’ll continue to achieve these strong results going forward.

Operator: And I’m not showing any further questions at this time. I’d like to turn the call back over to Scott Shaw for any closing remarks.

Scott Shaw: Great. Thank you, operator, and thank you all for joining us today as we reviewed our continued progress, growth, and increased financial guidance for the full year. As more and more high school graduates and adults seek a time-efficient, cost-effective path to develop skills that can serve them a lifetime, interest in our programs continues to grow. And with our student start growth, new campus development, and increasing level of operating efficiencies, we believe we have numerous opportunities to generate increasing levels of shareholder returns over several years. Our success is only made possible by the commitment and dedication of our faculty and staff to our students and their success, and we will continue to share with the world that middle skills careers like the ones we offer lead to rewarding, productive, and fulfilling careers that our nation desperately needs.

I’d like to thank our shareholders for their support and our entire team for their dedication to achieving our goals. I hope to see you during my time on the road visiting shareholders, employers, and politicians as I share the Lincoln Tech story. Thank you all again, and have a great day. Bye-bye.

Operator: Ladies and gentlemen, this does conclude today’s presentation. We thank you for your participation. You may now disconnect and have a wonderful day.