# EDGAR Filing Document

**Accession Number:** 0001013934
**File Stem:** 0001157523-23-000331
**Filing Date:** 2023-2
**Character Count:** 57483
**Document Hash:** c0e12295f32402eeca606eddf3c1cf62
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001157523-23-000331.hdr.sgml**: 20230222

**ACCESSION NUMBER**: 0001157523-23-000331

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 13

**CONFORMED PERIOD OF REPORT**: 20230222

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230222

**DATE AS OF CHANGE**: 20230222

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Strategic Education, Inc.
- **CENTRAL INDEX KEY:** 0001013934
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-EDUCATIONAL SERVICES [8200]
- **IRS NUMBER:** 521975978
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-21039
- **FILM NUMBER:** 23653079

**BUSINESS ADDRESS:**
- **STREET 1:** 2303 DULLES STATION BOULEVARD
- **CITY:** HERNDON
- **STATE:** VA
- **ZIP:** 20171
- **BUSINESS PHONE:** 703-561-1600

**MAIL ADDRESS:**
- **STREET 1:** 2303 DULLES STATION BOULEVARD
- **CITY:** HERNDON
- **STATE:** VA
- **ZIP:** 20171

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** STRAYER EDUCATION INC
- **DATE OF NAME CHANGE:** 19960510

### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### Washington, D.C. 20549

### FORM 8-K

#### CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): **February 22, 2023**

### Strategic Education, Inc.
(Exact Name of Registrant as Specified in Charter)

---

| | | |
|:---|:---|:---|
| **Maryland** | **0-21039**<br>| **52-1975978**<br>|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |

---

**2303 Dulles Station Boulevard Herndon, VA 20171** (Address of Principal Executive Offices) (Zip Code)

**(703) 561-1600** (Registrant's telephone number, including area code)

**N/A**

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ &nbsp;&nbsp;&nbsp;&nbsp; Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ &nbsp;&nbsp;&nbsp;&nbsp; Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ &nbsp;&nbsp;&nbsp;&nbsp; Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ &nbsp;&nbsp;&nbsp;&nbsp; Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities Registered Pursuant to Section 12(b) of the Exchange Act:

---

| | | |
|:---|:---|:---|
| **Title of each class**  | **Trading Symbol(s)**  | **Name of each exchange on which registered**  |
| **Common Stock, $0.01 par value**  | **STRA**  | **Nasdaq Global Select Market**  |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

**Item 2.02.**&nbsp;&nbsp;&nbsp;&nbsp; Results of Operations and Financial Condition.

On February 22, 2023, Strategic Education, Inc. ("Strategic Education") issued a press release announcing its financial results for the period ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 hereto and is hereby incorporated by reference into this Item 2.02.

The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by Strategic Education under the Securities Act of 1933, as amended.

**Item 9.01.**&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; **Financial Statements and Exhibits.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) Exhibits.

---

| | |
|:---|:---|
| Exhibit Number | Description |
| [99.1](a53335282ex99_1.htm) | [Press Release dated February 22, 2023](a53335282ex99_1.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

------

#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | STRATEGIC EDUCATION, INC. | STRATEGIC EDUCATION, INC. |
| Date: February 22, 2023 |  |  |
|  | By: | /s/ Daniel W. Jackson |
|  |  | Daniel W. Jackson |
|  |  | Executive Vice President and Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**<br>

# **Strategic Education, Inc. Reports Fourth Quarter 2022 Results** 
HERNDON, Va.--(BUSINESS WIRE)--February 22, 2023--Strategic Education, Inc. (Strategic Education) (NASDAQ: STRA) today announced financial results for the period ended December 31, 2022.

"We are pleased with our progress in 2022 toward a return to growth and are very proud of the organization's ongoing commitment to the success of our students," said Karl McDonnell, Chief Executive Officer of Strategic Education. "As we begin a new year, we are focused on continued recovery and investing in opportunities for growth within our diversified portfolio of offerings, including strength within our Education Technology Services segment, with the mission to promote economic mobility for working adults."

 **<u>STRATEGIC EDUCATION CONSOLIDATED RESULTS</u>**

 **Three Months Ended December 31**

* Revenue decreased 0.8% to $269.9 million compared to $272.1 million for the same period in 2021. 

* Income from operations was $27.6 million or 10.2% of revenue, compared to $27.9 million or 10.2% of revenue for the same period in 2021. Adjusted income from operations, which is a non-GAAP financial measure, was $27.2 million compared
 to $37.8 million for the same period in 2021. The adjusted operating income margin, which is a non-GAAP financial measure, was 10.1% compared to 13.9% for the same period in 2021. [Adjusted results for 2021 exclude an adjustment for
 foreign currency exchange impacts and are therefore not directly comparable to adjusted results previously reported for the three months ended December 31, 2021.] For more details on non-GAAP financial measures, refer to the information
 in the Non-GAAP Financial Measures section of this press release. 

* Net income was $18.3 million compared to $21.7 million for the same period in 2021. Adjusted net income, which is a non-GAAP financial measure, was $18.7 million compared to $27.7 million for the same period in 2021. 

* Adjusted EBITDA, which is a non-GAAP financial measure, was $45.2 million compared to $56.1 million for the same period in 2021. 

* Diluted earnings per share was $0.77 compared to $0.90 for the same period in 2021. Adjusted diluted earnings per share, which is a non-GAAP financial measure, decreased to $0.78 from $1.15 for the same period in 2021. Adjusted diluted
 earnings per share on a constant currency basis, which is a non-GAAP financial measure, was $0.83. Diluted weighted average shares outstanding decreased to 23,911,000 from 24,098,000 for the same period in 2021. 

 **Year Ended December 31**

* Revenue decreased 5.9% to $1,065.5 million compared to $1,131.7 million in 2021. Adjusted revenue, which is a non-GAAP financial measure, decreased 6.2% to $1,065.5 million compared to $1,135.3 million in 2021. [Adjusted results for
 2021 exclude an adjustment for foreign currency exchange impacts and are therefore not directly comparable to adjusted results previously reported for the twelve months ended December 31, 2021.] For more details on non-GAAP financial
 measures, refer to the information in the Non-GAAP Financial Measures section of this press release. 

------

* Income from operations was $70.8 million or 6.6% of revenue, compared to $73.9 million or 6.5% of revenue in 2021. Adjusted income from operations, which is a non-GAAP financial measure, was $88.3 million in 2022 compared to $165.7
 million in 2021. The adjusted operating income margin, which is a non-GAAP financial measure, was 8.3% compared to 14.6% in 2021. 

* Net income was $46.7 million in 2022 compared to $55.1 million in 2021. Adjusted net income, which is a non-GAAP financial measure, was $60.3 million compared to $116.6 million in 2021. 

* Adjusted EBITDA, which is a non-GAAP financial measure, was $163.1 million compared to $237.7 million in 2021. 

* Diluted earnings per share was $1.94 compared to $2.28 in 2021. Adjusted diluted earnings per share, which is a non-GAAP financial measure, decreased to $2.51 from $4.83 in 2021. Adjusted diluted earnings per share on a constant
 currency basis, which is a non-GAAP financial measure, was $2.59. Diluted weighted average shares outstanding decreased to 23,998,000 from 24,122,000 in 2021. 

 **U.S. Higher Education Segment Highlights**

* The U.S. Higher Education segment (USHE) is comprised of Strayer University and Capella University. 

* For the fourth quarter, student enrollment within USHE decreased 0.8% to 78,062 compared to 78,721 for the same period in 2021. Full-year 2022 student enrollment within USHE decreased 6.5% compared to 2021. 

* For the fourth quarter, FlexPath enrollment was 19% of USHE enrollment compared to 18% for the same period in 2021. 

* Revenue increased 0.5% to $199.7 million in the fourth quarter of 2022 compared to $198.6 million for the same period in 2021, driven by higher revenue-per-student. 

* Income from operations was $13.2 million in the fourth quarter of 2022 compared to $19.9 million for the same period in 2021. The operating income margin was 6.6%, compared to 10.0% for the same period in 2021. 

 **Education Technology Services Segment Highlights**

* The Education Technology Services segment (ETS) is comprised primarily of Employer Solutions, Sophia Learning, and Workforce Edge. 

* For the fourth quarter, employer affiliated enrollment was 24.7% of USHE enrollment compared to 21.7% for the same period in 2021. Full-year 2022 employer affiliated enrollment was 24.4% of USHE enrollment compared to 21.0% in 2021. 

* For the fourth quarter, Sophia Learning had an increase in average total subscribers of approximately 29% from the same period in 2021. 

* As of December 31, 2022, Workforce Edge had a total of 54 corporate agreements, collectively employing approximately 1,310,000 employees. 

* Revenue increased 20.4% to $16.7 million in the fourth quarter of 2022 compared to $13.9 million for the same period in 2021, driven by growth in Sophia Learning subscriptions and employer affiliated enrollment. 

* Income from operations was $4.0 million in the fourth quarter of 2022 compared to $5.1 million for the same period in 2021. The operating income margin was 24.1%, compared to 36.5% for the same period in 2021. 

 **Australia/New Zealand Segment Highlights**

* The Australia/New Zealand segment (ANZ) is comprised of Torrens University, Think Education, and Media Design School. 

------

* For the fourth quarter, student enrollment within ANZ increased 3.7% to 19,651 compared to 18,942 for the same period in 2021. Full-year 2022 student enrollment within ANZ increased 0.2% compared to 2021. 

* Revenue decreased 10.2% to $53.5 million in the fourth quarter of 2022 compared to $59.6 million for the same period in 2021. Revenue on a constant currency basis increased 0.6% to $59.9 million in the fourth quarter of 2022 compared
 to $59.6 million for the same period in 2021. 

* Income from operations was $10.0 million or 18.6% of revenue, compared to $12.8 million or 21.6% of revenue for the same period in 2021. Income from operations and the operating income margin on a constant currency basis were $11.6
 million or 19.3% of revenue in the fourth quarter of 2022, compared to $12.8 million or 21.6% of revenue for the same period in 2021. 

 **<u>Balance Sheet and Cash Flow</u>**

At December 31, 2022, Strategic Education had cash, cash equivalents, and marketable securities of $235.9 million, and $101.4 million outstanding under its revolving credit facility. Cash provided by operations in 2022 was $126.1 million compared to $180.5 million in 2021. Capital expenditures for 2022 were $43.2 million compared to $49.4 million in 2021. Capital expenditures for 2023 are expected to be approximately $45 million.

For the fourth quarter of 2022, consolidated bad debt expense as a percentage of revenue was 4.9%, compared to 4.5% of revenue for the same period in 2021.

 **<u>COMMON STOCK CASH DIVIDEND</u>**

Strategic Education announced today that it declared a regular, quarterly cash dividend of $0.60 per share of common stock. This dividend will be paid on March 13, 2023 to shareholders of record as of March 6, 2023.

 **<u>CONFERENCE CALL WITH MANAGEMENT</u>**

Strategic Education will host a conference call to discuss its fourth quarter 2022 results at 5:00 p.m. (ET) today. This call will be available via webcast. To access the live webcast of the conference call, please go to www.strategiceducation.com in the Investor Relations section 15 minutes prior to the start time of the call to register. An earnings release presentation will also be posted to www.strategiceducation.com in the Investor Relations section. Following the call, the webcast will be archived and available at www.strategiceducation.com in the Investor Relations section. To participate in the live call, investors should register here prior to the call to receive dial-in information and a PIN.

 **About Strategic Education, Inc.**

Strategic Education, Inc. (NASDAQ: STRA) (www.strategiceducation.com) is dedicated to helping advance economic mobility through higher education. We primarily serve working adult students globally through our core focus areas: 1) U.S. Higher Education, including Strayer University and Capella University, each institutionally accredited, and collectively offer flexible and affordable associate, bachelor's, master's, and doctoral programs including the Jack Welch Management Institute at Strayer University, and non-degree web and mobile application development courses through Strayer University's Hackbright Academy and Devmountain; 2) Education Technology Services, developing and maintaining relationships with employers to build education benefits programs providing employees access to affordable and industry-relevant training, certificate, and degree programs, including through Workforce Edge, a full-service education benefits administration solution for employers, and Sophia Learning, enabling education benefits programs through low-cost online general education-level courses that are ACE-recommended for college credit; and 3) Australia/New Zealand, comprised of Torrens University, Think Education, and Media Design School that collectively offer certificate and degree programs in Australia and New Zealand. This portfolio of high quality, innovative, relevant, and affordable programs and institutions helps our students prepare for success in today's workforce and find a path to bettering their lives.

------

 **Forward-Looking Statements**

This communication contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by the use of words such as "expect," "estimate," "assume," "believe," "anticipate," "may," "will," "forecast," "outlook," "plan," "project," "potential" and other similar words, and include all statements that are not historical facts, including with respect to, among other things, the future financial performance and growth opportunities of Strategic Education; Strategic Education's plans, strategies and prospects; and future events and expectations. The statements are based on Strategic Education's current expectations and are subject to a number of assumptions, uncertainties and risks, including but not limited to:

* the pace of student enrollment; 

* Strategic Education's continued compliance with Title IV of the Higher Education Act, and the regulations thereunder, as well as other federal laws and regulations, institutional accreditation standards and state regulatory
 requirements; 

* rulemaking and other action by the Department of Education or other governmental entities, including without limitation action related to borrower defense to repayment applications, and increased focus by the U.S. Congress on
 for-profit education institutions; 

* competitive factors; 

* risks associated with the further spread of COVID-19, including the ultimate impact of COVID-19 on people and economies; 

* the impact of regulatory measures or voluntary actions that may be put in place to limit the spread of COVID-19, including restrictions on business operations or social distancing requirements; 

* risks associated with the opening of new campuses; 

* risks associated with the offering of new educational programs and adapting to other changes; 

* risks associated with the acquisition of existing educational institutions, including Strategic Education's acquisition of Torrens University and associated assets in Australia and New Zealand; 

* the risk that the benefits of the acquisition of Torrens University and associated assets in Australia and New Zealand may not be fully realized or may take longer to realize than expected; 

* the risk that the acquisition of Torrens University and associated assets in Australia and New Zealand may not advance Strategic Education's business strategy and growth strategy; 

* risks relating to the timing of regulatory approvals; 

* Strategic Education's ability to implement its growth strategy; 

* the risk that the combined company may experience difficulty integrating employees or operations; 

* risks associated with the ability of Strategic Education's students to finance their education in a timely manner; 

* general economic and market conditions; and 

* additional factors described in Strategic Education's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. 

Many of these risks, uncertainties and assumptions are beyond Strategic Education's ability to control or predict. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. Furthermore, these forward-looking statements speak only as of the information currently available to Strategic Education on the date they are made, and Strategic Education undertakes no obligation to update or revise forward-looking statements, except as required by law. Actual results may differ materially from those projected in the forward-looking statements.

------

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| | | | | |
|:---|:---|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME** <br> **(in thousands, except per share data)**  |
|  | **For the three months ended <br> December 31,**  | **For the three months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  |
|  | **2021**  | **2022**  | **2021**  | **2022**  |
| Revenues  | $272099  | $269938  | $1131686  | $1065480  |
| Costs and expenses:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Instructional and support costs  | 148867  | 152167  | 608261  | 597321  |
| &nbsp;&nbsp;&nbsp;&nbsp; General and administration  | 85391  | 90558  | 361345  | 379817  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of intangible assets  | 3764  | 3396  | 51495  | 14350  |
| &nbsp;&nbsp;&nbsp;&nbsp; Merger and integration costs  | 7141  | 184  | 11201  | 1117  |
| &nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs  | (928 )  | (4014 )  | 25472  | 2115  |
| Total costs and expenses  | 244235  | 242291  | 1057774  | 994720  |
| &nbsp;&nbsp;&nbsp;&nbsp; Income from operations  | 27864  | 27647  | 73912  | 70760  |
| Other income (expense)  | 1611  | (58 )  | 2687  | (1191 )  |
| &nbsp;&nbsp;&nbsp;&nbsp; Income before income taxes  | 29475  | 27589  | 76599  | 69569  |
| Provision for income taxes  | 7795  | 9260  | 21512  | 22899  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net income  | $21680  | $18329  | $55087  | $46670  |
| Earnings per share:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Basic  | $0.91  | $0.78  | $2.30  | $1.97  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | $0.90  | $0.77  | $2.28  | $1.94  |
| Weighted average shares outstanding:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Basic  | 23924  | 23421  | 23955  | 23679  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | 24098  | 23911  | 24122  | 23998  |

---

------

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| | | |
|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS** <br> **(in thousands, except share and per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS** <br> **(in thousands, except share and per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS** <br> **(in thousands, except share and per share data)**  |
|  | **December 31, <br> 2021**  | **December 31,** <br> **2022**  |
| **ASSETS**  |  |  |
| Current assets:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents  | $268918  | $213667  |
| &nbsp;&nbsp;&nbsp;&nbsp; Marketable securities  | 6501  | 9156  |
| &nbsp;&nbsp;&nbsp;&nbsp; Tuition receivable, net  | 51277  | 62953  |
| &nbsp;&nbsp;&nbsp;&nbsp; Income taxes receivable  | 313  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other current assets  | 40777  | 43285  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current assets  | 367786  | 329061  |
| Property and equipment, net  | 150589  | 132845  |
| Right-of-use lease assets  | 149587  | 125248  |
| Marketable securities, non-current  | 23377  | 13123  |
| Intangible assets, net  | 276380  | 260541  |
| Goodwill  | 1285864  | 1251277  |
| Other assets  | 52297  | 49652  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total assets  | $2305880  | $2161747  |
| **LIABILITIES & STOCKHOLDERS' EQUITY**  |  |  |
| Current liabilities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued expenses  | $95518  | $90588  |
| &nbsp;&nbsp;&nbsp;&nbsp; Income taxes payable  | —  | 6989  |
| &nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities  | 73232  | 88488  |
| &nbsp;&nbsp;&nbsp;&nbsp; Lease liabilities  | 27005  | 23879  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total current liabilities  | 195755  | 209944  |
| Long-term debt  | 141630  | 101396  |
| Deferred income tax liabilities  | 44595  | 34605  |
| Lease liabilities, non-current  | 162821  | 134006  |
| Other long-term liabilities  | 47089  | 46006  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities  | 591890  | 525957  |
| Commitments and contingencies  |  |  |
| Stockholders' equity:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common stock, par value $0.01; 32,000,000 shares authorized; 24,592,098 and 24,402,891 shares issued and outstanding at December 31, 2021 and December 31, 2022, respectively  | 246  | 244  |
| &nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital  | 1529969  | 1510924  |
| &nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income (loss)  | 9203  | (35068 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Retained earnings  | 174572  | 159690  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total stockholders' equity  | 1713990  | 1635790  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total liabilities and stockholders' equity  | $2305880  | $2161747  |

---

------

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| | | |
|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** <br> **(in thousands)**  |
|  | **For the year ended <br> December 31,**  | **For the year ended <br> December 31,**  |
|  | **2021**  | **2022**  |
| Cash flows from operating activities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Net income  | $55087  | $46670  |
| &nbsp;&nbsp;&nbsp;&nbsp; Adjustments to reconcile net income to net cash provided by operating activities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Loss on sale of marketable securities  | 781  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of property and equipment  | (2656 ) | (2886 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of deferred financing costs  | 552  | 552  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of investment discount/premium  | 70  | 32  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization  | 103416  | 63124  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred income taxes  | (7710 ) | (8667 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation  | 18149  | 21792  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of right-of-use lease assets  | 18876  | 1185  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Changes in assets and liabilities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tuition receivable, net  | (196 ) | (12558 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets  | (6964 ) | 3584  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued expenses  | (6700 ) | (4339 ) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Income taxes payable and income taxes receivable  | 1196  | 7580  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contract liabilities  | 13995  | 18960  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other liabilities  | (7369 )  | (8977 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash provided by operating activities  | 180527  | 126052  |
| Cash flows from investing activities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cash paid for acquisition, net of cash acquired  | —  | (800 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Purchases of property and equipment  | (49433 ) | (43170 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from marketable securities  | 9300  | 6420  |
| &nbsp;&nbsp;&nbsp;&nbsp; Proceeds from sale of property and equipment  | 8331  | 6525  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other investments  | (1292 )  | (335 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in investing activities  | (33094 )  | (31360 )  |
| Cash flows from financing activities:  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Common dividends paid  | (59045 ) | (59240 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Net payments for stock awards  | (2938 ) | (3004 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Payments on long-term debt  | —  | (40000 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Repurchase of common stock  | (5905 )  | (40116 )  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cash used in financing activities  | (67888 )  | (142360 )  |
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash  | (2353 )  | (4090 )  |
| Net increase (decrease) in cash, cash equivalents, and restricted cash  | 77192  | (51758 ) |
| Cash, cash equivalents, and restricted cash — beginning of period  | 202020  | 279212  |
| Cash, cash equivalents, and restricted cash — end of period  | $279212  | $227454  |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED SEGMENT REPORTING** <br> **(in thousands)**  |
|  | **For the three months ended <br> December 31,**  | **For the three months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  |
|  | **2021**  | **2022**  | **2021**  | **2022**  |
| Revenues:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. Higher Education  | $198623  | $199688  | $829270  | $770979  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand  | 59575  | 53515  | 250124  | 230747  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education Technology Services  | 13901  | 16735  | 52292  | 63754  |
| Consolidated revenues  | $272099  | $269938  | $1131686  | $1065480  |
| Income from operations:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. Higher Education  | $19933  | $13219  | $104914  | $38605  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand  | 12839  | 9967  | 35855  | 30473  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education Technology Services  | 5069  | 4027  | 21311  | 19264  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of intangible assets  | (3764 ) | (3396 ) | (51495 ) | (14350 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Merger and integration costs  | (7141 ) | (184 ) | (11201 ) | (1117 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs  | 928  | 4014  | (25472 )  | (2115 )  |
| Consolidated income from operations  | $27864  | $27647  | $73912  | $70760  |

---

------

 **Non-GAAP Financial Measures**

In our press release and schedules, we report certain financial measures that are not required by, or presented in accordance with, accounting principles generally accepted in the United States of America ("GAAP"). We discuss management's reasons for reporting these non-GAAP measures below, and the press release schedules that follow reconcile the most directly comparable GAAP measure to each non-GAAP measure that we reference. Although management evaluates and presents these non-GAAP measures for the reasons described below, please be aware that these non-GAAP measures have limitations and should not be considered in isolation or as a substitute for revenue, total costs and expenses, income from operations, operating margin, income before income taxes, net income, earnings per share or any other comparable financial measure prescribed by GAAP. In addition, we may calculate and/or present these non-GAAP financial measures differently than measures with the same or similar names that other companies report, and as a result, the non-GAAP measures we report may not be comparable to those reported by others.

Management uses certain non-GAAP measures to evaluate financial performance because those non-GAAP measures allow for period-over-period comparisons of the Company's ongoing operations before the impact of certain items described below. Management believes this information is useful to investors to compare the Company's results of operations period-over-period. These measures are Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), Adjusted EBITDA and Adjusted Diluted Earnings Per Share (EPS). We define Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, and Adjusted Diluted EPS to exclude (1) a purchase accounting adjustment to record acquired contract liabilities at fair value as a result of the Company's acquisition of Torrens University and associated assets in Australia and New Zealand, and amortization and depreciation expense related to intangible assets and software assets associated with the Company's merger with Capella Education Company and the Company's acquisition of Torrens University and associated assets in Australia and New Zealand, (2) transaction and integration expenses associated with the Company's merger with Capella Education Company and the Company's acquisition of Torrens University and associated assets in Australia and New Zealand, (3) severance costs and right-of-use lease asset impairment charges associated with the Company's restructuring, (4) income/loss recognized from the Company's investments in partnership interests and other investments, and (5) discrete tax adjustments utilizing adjusted effective income tax rates of 25.5% and 30.0% for the three months ended December 31, 2021 and 2022, respectively, and adjusted effective income tax rates of 28.5% and 30.4% for the twelve months ended December 31, 2021 and 2022, respectively. To illustrate currency impacts to operating results, Adjusted Revenue, Adjusted Total Costs and Expenses, Adjusted Income from Operations, Adjusted Operating Margin, Adjusted Income Before Income Taxes, Adjusted Net Income, and Adjusted Diluted EPS for the three and twelve months ended December 31, 2022 are also presented on a constant currency basis utilizing an exchange rate of 0.73 and 0.75 Australian Dollars to U.S. Dollars, respectively, which was the average exchange rate for the same periods in 2021. We define EBITDA as net income before other income (loss), the provision for income taxes, gains on sale of property and equipment, depreciation and amortization, and from this amount in arriving at Adjusted EBITDA we also exclude stock-based compensation expense, amortization expense associated with deferred implementation costs incurred in cloud computing arrangements, a purchase accounting adjustment to record acquired contract liabilities at fair value, and the amounts in (2) and (3) above. These non-GAAP measures are reconciled to the most directly comparable GAAP measures in the sections that follow. Non-GAAP measures should not be viewed as substitutes for GAAP measures.

------

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED REVENUE, ADJUSTED TOTAL COSTS AND EXPENSES, ADJUSTED INCOME FROM OPERATIONS, ADJUSTED OPERATING MARGIN, ADJUSTED INCOME BEFORE INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED EPS** <br> **(in thousands, except per share data)**  |
|  |  | **For the three months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2021** <br> **Non-GAAP Adjustments**  |  |
|  | **As Reported <br> (GAAP)**  | **Purchase <br> accounting <br> adjustments<sup>(1)</sup>**  | **Merger and <br> integration <br> costs<sup>(2)</sup>**  | **Restructuring <br> costs<sup>(3)</sup>**  | **Income from <br> other <br> investments<sup>(4)</sup>**  | **Tax <br> adjustments<sup>(5)</sup>**  | **As Adjusted <br> (Non-GAAP)**  |
| Revenues  | $272099  | $—  | $—  | $—  | $—  | $—  | $272099  |
| Total costs and expenses  | $244235  | $(3764 ) | $(7141 ) | $928  | $—  | $—  | $234258  |
| Income from operations  | $27864  | $3764  | $7141  | $(928 ) | $—  | $—  | $37841  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Operating margin*  | *10.2%*  |  |  |  |  |  | *13.9%*  |
| Income before income taxes  | $29475  | $3764  | $7141  | $(928 ) | $(2330 ) | $—  | $37122  |
| Net income  | $21680  | $3764  | $7141  | $(928 ) | $(2330 ) | $(1663 ) | $27664  |
| **Earnings per share:**  | **Earnings per share:**  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | $0.90  |  |  |  |  |  | $1.15  |
| **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | 24098  |  |  |  |  |  | 24098  |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **For the three months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the three months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | |
|  | <br> **As Reported <br> (GAAP)**  | **Purchase <br> accounting <br> adjustments<sup>(1)</sup>**  | **Merger and <br> integration <br> costs<sup>(2)</sup>**  | **Restructuring <br> costs<sup>(3)</sup>**  | **Income from <br> other <br> investments<sup>(4)</sup>**  | **Tax <br> adjustments<sup>(5)</sup>**  | <br> **As Adjusted <br> (Non-GAAP)**  |
| Revenues  | $269938  | $—  | $—  | $—  | $—  | $—  | $269938  |
| Total costs and expenses  | $242291  | $(3396 ) | $(184 ) | $4014  | $—  | $—  | $242725  |
| Income from operations  | $27647  | $3396  | $184  | $(4014 ) | $—  | $—  | $27213  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Operating margin*  | *10.2%*  |  |  |  |  |  | *10.1%*  |
| Income before income taxes  | $27589  | $3396  | $184  | $(4014 ) | $(401 ) | $—  | $26754  |
| Net income  | $18329  | $3396  | $184  | $(4014 ) | $(401 ) | $1246  | $18740  |
| **Earnings per share:**  | **Earnings per share:**  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | $0.77  |  |  |  |  |  | $0.78  |
| **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | 23911  |  |  |  |  |  | 23911  |

---

------

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **For the twelve months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2021** <br> **Non-GAAP Adjustments**  | |
|  | <br> **As Reported <br> (GAAP)**  | **Purchase <br> accounting <br> adjustments<sup>(1)</sup>**  | **Merger and <br> integration <br> costs<sup>(2)</sup>**  | **Restructuring <br> costs<sup>(3)</sup>**  | **Income from <br> other <br> investments<sup>(4)</sup>**  | **Tax <br> adjustments<sup>(5)</sup>**  | <br> **As Adjusted <br> (Non-GAAP)**  |
| Revenues  | $1131686  | $3646  | $—  | $—  | $—  | $—  | $1135332  |
| Total costs and expenses  | $1057774  | $(51495 ) | $(11201 ) | $(25472 ) | $—  | $—  | $969606  |
| Income from operations  | $73912  | $55141  | $11201  | $25472  | $—  | $—  | $165726  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Operating margin*  | *6.5%*  |  |  |  |  |  | *14.6%*  |
| Income before income taxes  | $76599  | $55141  | $11201  | $25472  | $(5300 ) | $—  | $163113  |
| Net income  | $55087  | $55141  | $11201  | $25472  | $(5300 ) | $(24975 ) | $116626  |
| **Earnings per share:**  | **Earnings per share:**  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | $2.28  |  |  |  |  |  | $4.83  |
| **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | 24122  |  |  |  |  |  | 24122  |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | | **For the twelve months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | **For the twelve months ended December 31, 2022** <br> **Non-GAAP Adjustments**  | |
|  | <br> **As Reported <br> (GAAP)**  | **Purchase <br> accounting <br> adjustments<sup>(1)</sup>**  | **Merger and <br> integration <br> costs<sup>(2)</sup>**  | **Restructuring <br> costs<sup>(3)</sup>**  | **Income from <br> other <br> investments<sup>(4)</sup>**  | **Tax <br> adjustments<sup>(5)</sup>**  | <br> **As Adjusted <br> (Non-GAAP)**  |
| Revenues  | $1065480  | $—  | $—  | $—  | $—  | $—  | $1065480  |
| Total costs and expenses  | $994720  | $(14350 ) | $(1117 ) | $(2115 ) | $—  | $—  | $977138  |
| Income from operations  | $70760  | $14350  | $1117  | $2115  | $—  | $—  | $88342  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Operating margin*  | *6.6%*  |  |  |  |  |  | *8.3%*  |
| Income before income taxes  | $69569  | $14350  | $1117  | $2115  | $(579 ) | $—  | $86572  |
| Net income  | $46670  | $14350  | $1117  | $2115  | $(579 ) | $(3419 ) | $60254  |
| **Earnings per share:**  | **Earnings per share:**  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | $1.94  |  |  |  |  |  | $2.51  |
| **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | 23998  |  |  |  |  |  | 23998  |

---

(1) <br> Reflects a purchase accounting adjustment to record acquired contract liabilities at fair value as a result of the Company's acquisition of Torrens University and associated assets in
 Australia and New Zealand, and amortization and depreciation expense of intangible assets and software assets acquired through the Company's merger with Capella Education Company and the Company's acquisition of Torrens University
 and associated assets in Australia and New Zealand.

(2) <br> Reflects transaction and integration expenses associated with the Company's merger with Capella Education Company, including premerger litigation settlement, net of insurance recovery,
 and the Company's acquisition of Torrens University and associated assets in Australia and New Zealand.

(3) <br> Reflects severance costs and right-of-use lease asset impairment charges associated with the Company's restructuring.

(4) <br> Reflects income/loss recognized from the Company's investments in partnership interests and other investments.

(5) <br> Reflects tax impacts of the adjustments described above and discrete tax adjustments related to stock-based compensation and other adjustments, utilizing adjusted effective income tax
 rates of 25.5% and 30.0% for the three months ended December 31, 2021 and 2022, respectively, and adjusted effective income tax rates of 28.5% and 30.4% for the twelve months ended December 31, 2021 and 2022, respectively.

------

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **2022 AS ADJUSTED WITH CONSTANT CURRENCY** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **2022 AS ADJUSTED WITH CONSTANT CURRENCY** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **2022 AS ADJUSTED WITH CONSTANT CURRENCY** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **2022 AS ADJUSTED WITH CONSTANT CURRENCY** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **2022 AS ADJUSTED WITH CONSTANT CURRENCY** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **2022 AS ADJUSTED WITH CONSTANT CURRENCY** <br> **(in thousands, except per share data)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **2022 AS ADJUSTED WITH CONSTANT CURRENCY** <br> **(in thousands, except per share data)**  |
|  | **For the three months ended December 31, 2022**  | **For the three months ended December 31, 2022**  | **For the three months ended December 31, 2022**  | **For the twelve months ended December 31, 2022**  | **For the twelve months ended December 31, 2022**  | **For the twelve months ended December 31, 2022**  |
|  | **As Adjusted <br> (Non-GAAP)**  | **Constant <br> currency** <br> **adjustment<sup>(1)</sup>**  | **As Adjusted <br> with Constant <br> Currency <br> (Non-GAAP)**  | **As Adjusted <br> (Non-GAAP)**  | **Constant <br> currency <br> adjustment<sup>(1)</sup>**  | **As Adjusted <br> with Constant <br> Currency <br> (Non-GAAP)**  |
| Revenues  | $269938  | $6424  | $276362  | $1065480  | $18645  | $1084125  |
| Total costs and expenses  | $242725  | $4810  | $247535  | $977138  | $15816  | $992954  |
| Income from operations  | $27213  | $1614  | $28827  | $88342  | $2829  | $91171  |
| &nbsp;&nbsp;&nbsp;&nbsp; *Operating margin*  | *10.1%*  |  | *10.4%*  | *8.3%*  |  | *8.4%*  |
| Income before income taxes  | $26754  | $1636  | $28390  | $86572  | $2846  | $89418  |
| Net income  | $18740  | $1146  | $19886  | $60254  | $1958  | $62212  |
| **Earnings per share:**  | **Earnings per share:**  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | $0.78  |  | $0.83  | $2.51  |  | $2.59  |
| **Weighted average shares outstanding:**  | **Weighted average shares outstanding:**  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Diluted  | 23911  |  | 23911  | 23998  |  | 23998  |

---

(1) <br> Reflects an adjustment to translate foreign currency results for the three and twelve months ended December 31, 2022 at a constant exchange rate of 0.73 and 0.75 Australian Dollars to
 U.S. Dollars, respectively, which was the average exchange rate for the same periods in 2021.

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED NON-GAAP SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED NON-GAAP SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED NON-GAAP SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED NON-GAAP SEGMENT REPORTING** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED NON-GAAP SEGMENT REPORTING** <br> **(in thousands)**  |
|  | **For the three months ended <br> December 31,**  | **For the three months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  |
|  | **2021**  | **2022**  | **2021**  | **2022**  |
| Revenues:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. Higher Education  | $198623  | $199688  | $829270  | $770979  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand  | 59575  | 53515  | 250124  | 230747  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education Technology Services  | 13901  | 16735  | 52292  | 63754  |
| Consolidated revenues  | 272099  | 269938  | 1131686  | 1065480  |
| Adjustments to consolidated revenues:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. Higher Education  | —  | —  | —  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand<sup>(1)</sup>  | —  | —  | 3646  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education Technology Services  | —  | —  | —  | —  |
| Total adjustments to consolidated revenues  | —  | —  | 3646  | —  |
| Adjusted revenues by segment:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. Higher Education  | 198623  | 199688  | 829270  | 770979  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand  | 59575  | 53515  | 253770  | 230747  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education Technology Services  | 13901  | 16735  | 52292  | 63754  |
| Adjusted consolidated revenues  | $272099  | $269938  | $1135332  | $1065480  |
| Income from operations:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. Higher Education  | $19933  | $13219  | $104914  | $38605  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand  | 12839  | 9967  | 35855  | 30473  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education Technology Services  | 5069  | 4027  | 21311  | 19264  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of intangible assets  | (3764 ) | (3396 ) | (51495 ) | (14350 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Merger and integration costs  | (7141 ) | (184 ) | (11201 ) | (1117 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs  | 928  | 4014  | (25472 )  | (2115 )  |
| Consolidated income from operations  | 27864  | 27647  | 73912  | 70760  |
| Adjustments to consolidated income from operations:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand<sup>(1)</sup>  | —  | —  | 3646  | —  |
| &nbsp;&nbsp;&nbsp;&nbsp; Amortization of intangible assets  | 3764  | 3396  | 51495  | 14350  |
| &nbsp;&nbsp;&nbsp;&nbsp; Merger and integration costs  | 7141  | 184  | 11201  | 1117  |
| &nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs  | (928 )  | (4014 )  | 25472  | 2115  |
| Total adjustments to consolidated income from operations  | 9977  | (434 )  | 91814  | 17582  |
| Adjusted income from operations by segment:  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp; U.S. Higher Education  | 19933  | 13219  | 104914  | 38605  |
| &nbsp;&nbsp;&nbsp;&nbsp; Australia/New Zealand  | 12839  | 9967  | 39501  | 30473  |
| &nbsp;&nbsp;&nbsp;&nbsp; Education Technology Services  | 5069  | 4027  | 21311  | 19264  |
| Total adjusted income from operations  | $37841  | $27213  | $165726  | $88342  |

---

(1) <br> Adjustments to the Australia/New Zealand segment revenue and income from operations for the twelve months ended December 31, 2021 include a purchase accounting adjustment of $3.6
 million to record acquired contract liabilities at fair value as a result of the Company's acquisition of Torrens University and associated assets in Australia and New Zealand.

------

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| | | | | |
|:---|:---|:---|:---|:---|
| **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED EBITDA** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED EBITDA** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED EBITDA** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED EBITDA** <br> **(in thousands)**  | **STRATEGIC EDUCATION, INC.** <br> **UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES** <br> **ADJUSTED EBITDA** <br> **(in thousands)**  |
|  | **For the three months ended <br> December 31,**  | **For the three months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  | **For the twelve months ended <br> December 31,**  |
|  | **2021**  | **2022**  | **2021**  | **2022**  |
| Net income  | $21680  | $18329  | $55087  | $46670  |
| &nbsp;&nbsp;&nbsp;&nbsp; Provision for income taxes  | 7795  | 9260  | 21512  | 22899  |
| &nbsp;&nbsp;&nbsp;&nbsp; Other (income) loss  | (1611 ) | 58  | (2687 ) | 1191  |
| &nbsp;&nbsp;&nbsp;&nbsp; Gain on sale of property and equipment  | (1975 ) | (2886 ) | (2656 ) | (2886 ) |
| &nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization  | 15228  | 13931  | 103416  | 63124  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; EBITDA <sup>(1)</sup>  | 41117  | 38692  | 174672  | 130998  |
| &nbsp;&nbsp;&nbsp;&nbsp; Stock-based compensation  | 5435  | 5583  | 18852  | 21792  |
| &nbsp;&nbsp;&nbsp;&nbsp; Merger and integration costs <sup>(2)</sup>  | 7141  | 184  | 11201  | 1170  |
| &nbsp;&nbsp;&nbsp;&nbsp; Restructuring costs <sup>(3)</sup>  | 1026  | (1128 ) | 25472  | 2521  |
| &nbsp;&nbsp;&nbsp;&nbsp; Cloud computing amortization <sup>(4)</sup>  | 1347  | 1898  | 3848  | 6640  |
| &nbsp;&nbsp;&nbsp;&nbsp; Contract liability adjustment <sup>(5)</sup>  | —  | —  | 3646  | —  |
| Adjusted EBITDA <sup>(1)</sup>  | $56066  | $45229  | $237691  | $163121  |

---

(1) <br> Denotes non-GAAP financial measures. Please see the information in the Non-GAAP Financial Measures section of this press release for more detail regarding these adjustments and
 management's reasons for providing this information.

(2) <br> Reflects transaction and integration charges associated with the Company's merger with Capella Education Company, including premerger litigation settlement, net of insurance recovery,
 and the Company's acquisition of Torrens University and associated assets in Australia and New Zealand. Excludes $0.1 million of depreciation and amortization for the twelve months ended December 31, 2022.

(3) <br> Reflects severance costs and right-of-use lease asset impairment charges associated with the Company's restructuring. Includes $0.7 million of stock-based compensation benefit related
 to forfeitures of stock-based awards for the twelve months ended December 31, 2021. Excludes $2.0 million and $2.7 million of gain on sale of property and equipment for the three and twelve months ended December 31, 2021,
 respectively, and $2.9 million of gain on the sale of property and equipment for the three and twelve months ended December 31, 2022. Excludes $2.7 million and $2.5 million of depreciation and amortization expense for the twelve
 months ended December 31, 2021 and 2022, respectively.

(4) <br> Reflects amortization expense associated with deferred implementation costs incurred in cloud computing arrangements.

(5) <br> Reflects a purchase accounting adjustment to record acquired contract liabilities at fair value as a result of the Company's acquisition of Torrens University and associated assets in
 Australia and New Zealand.

## Contacts
Terese Wilke <br> Director of Investor Relations <br> Strategic Education, Inc. <br> (612) 977-6331 <br> terese.wilke@strategiced.com