Strategic Education, Inc. Files 2023 Annual Report (10-K)

TL;DR

<b>Strategic Education, Inc. has filed its 2023 10-K annual report detailing its financial performance and business operations.</b>

AI Summary

Strategic Education, Inc. (STRA) filed a Annual Report (10-K) with the SEC on February 29, 2024. Strategic Education, Inc. filed its 10-K report for the fiscal year ending December 31, 2023. The filing covers the period from January 1, 2023, to December 31, 2023. The company's principal executive offices are located at 2303 Dulles Station Boulevard, Herndon, VA 20171. Strategic Education, Inc. was formerly known as Strayer Education Inc., with a name change on May 10, 1996. The report details financial information for the fiscal year 2023.

Why It Matters

For investors and stakeholders tracking Strategic Education, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of Strategic Education, Inc.'s financial health, operational strategies, and risk factors for the fiscal year 2023, which is crucial for investors to assess the company's performance and future prospects. The detailed financial statements and disclosures within the 10-K allow stakeholders to understand the company's revenue streams, profitability, assets, liabilities, and cash flows, enabling informed investment decisions.

Risk Assessment

Risk Level: medium — Strategic Education, Inc. shows moderate risk based on this filing. The company operates in the highly regulated higher education sector, facing risks related to accreditation, government funding, and changing student demographics, which could impact enrollment and revenue.

Analyst Insight

Investors should review the detailed risk factors and financial performance metrics in the 10-K to assess the long-term viability and growth potential of Strategic Education, Inc.

Key Numbers

• 2023-12-31 — Fiscal Year End (CONFORMED PERIOD OF REPORT)
• 2024-02-29 — Filing Date (FILED AS OF DATE)
• 000-21039 — SEC File Number (SEC FILE NUMBER)
• 8200 — Standard Industrial Classification (STANDARD INDUSTRIAL CLASSIFICATION)

Key Players & Entities

• Strategic Education, Inc. (company) — COMPANY CONFORMED NAME
• 2303 Dulles Station Boulevard (address) — BUSINESS ADDRESS
• Herndon (location) — BUSINESS ADDRESS CITY
• VA (location) — BUSINESS ADDRESS STATE
• 20171 (postal_code) — BUSINESS ADDRESS ZIP
• Strayer Education Inc. (company) — FORMER COMPANY
• 19960510 (date) — DATE OF NAME CHANGE
• 20231231 (date) — CONFORMED PERIOD OF REPORT

FAQ

Risk Factors

• Regulatory Compliance [high — regulatory]: The company must comply with extensive federal and state regulations governing higher education, including accreditation standards, student financial aid programs, and data privacy, which could lead to penalties or loss of accreditation.
• Competition and Market Demand [medium — market]: The higher education market is competitive, with changing student preferences and economic conditions impacting enrollment and demand for educational services.
• Technology and Infrastructure [medium — operational]: Reliance on technology for online learning and administrative functions presents risks related to system failures, cybersecurity threats, and the need for continuous investment in IT infrastructure.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-02-29: Filing Date — Date the 10-K was officially filed with the SEC.

Key Financial Figures

• $0.01 — CTION 12(b) OF THE ACT: COMMON STOCK, $0.01 PAR VALUE STRA Nasdaq Global Select Mar
• $1.1 billion — programs. We generated net revenue of $1.1 billion in 2023. For more information regarding

Filing Documents

• stra-20231231.htm (10-K) — 2256KB
• stra-20231231xex1012.htm (EX-10.12) — 122KB
• stra-20231231xex1013.htm (EX-10.13) — 111KB
• stra-20231231xex211.htm (EX-21.1) — 13KB
• stra-20231231xex231.htm (EX-23.1) — 2KB
• stra-20231231xex311.htm (EX-31.1) — 10KB
• stra-20231231xex312.htm (EX-31.2) — 11KB
• stra-20231231xex321.htm (EX-32.1) — 4KB
• stra-20231231xex322.htm (EX-32.2) — 4KB
• stra-20231231xex971.htm (EX-97.1) — 23KB
• stra-20231231_g1.jpg (GRAPHIC) — 239KB
• 0001013934-24-000004.txt (&nbsp;) — 11960KB
• stra-20231231.xsd (EX-101.SCH) — 78KB
• stra-20231231_cal.xml (EX-101.CAL) — 112KB
• stra-20231231_def.xml (EX-101.DEF) — 326KB
• stra-20231231_lab.xml (EX-101.LAB) — 969KB
• stra-20231231_pre.xml (EX-101.PRE) — 644KB
• stra-20231231_htm.xml (XML) — 1655KB

Business

Business 4 Item 1A

Risk Factors

Risk Factors 43 Item 1B Unresolved Staff Comments 57 Item 1C Cybersecurity 57 Item 2

Properties

Properties 58 Item 3

Legal Proceedings

Legal Proceedings 59 Item 4 Mine Safety Disclosures 59 PART II Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 60 Item 6 Reserved 61 Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 61 Item 7A

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 71 Item 8

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 73 Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 113 Item 9A

Controls and Procedures

Controls and Procedures 114 Item 9B Other Information 114 Item 9C Disclosure Regarding Foreign Jurisdiction that Prevent Inspections 114 PART III Item 10 Directors, Executive Officers and Corporate Governance 115 Item 11

Executive Compensation

Executive Compensation 118 Item 12

Security Ownership of Certain Beneficial Owners and Managemen t and R elated Stockholder Matters

Security Ownership of Certain Beneficial Owners and Managemen t and R elated Stockholder Matters 118 Item 13 Certain Relationships and Related Transaction s, and Director Independence 118 Item 14 Principal Accounting Fees and Services 118 PART IV Item 15 Exhibits and Financial Statement Schedules 118 Item 16 Form 10-K Summary 120

SIGNATURES

SIGNATURES 121 2 Table of Contents PART I CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS: This document and the documents incorporated by reference herein include "forward-looking statements," within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including, without limitation, the statements about our plans, strategies, and prospects under the headings "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." We have typically used the words "expect," "estimate," "assume," "believe," "anticipate," "may," "will," "forecast," "outlook," "plan," "project," "potential" and similar expressions in this document and the documents incorporated by reference herein to identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. Actual results could differ materially from those projected in the forward-looking statements. These forward-looking statements are subject to many risks, uncertainties and assumptions, including, among other things: the pace of student enrollment; our continued compliance with Title IV of the Higher Education Act of 1965, as amended (the "Higher Education Act" or "HEA"), 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 U.S. Department of Education ("Department of Education" or the "Department") or other governmental entities, including without limitation action related to borrower defense to repayment applications, gainful employment, 90/10, and increased focus by the U.S. Congress on for-profit education institutions; competitive factors; risks associated with the ultimate impact of COVID-19 on people and economies;

Business

Item 1. Business Overview Strategic Education, Inc. is an education services company that provides access to high-quality education through campus-based and online post-secondary education offerings, as well as through programs to develop job-ready skills for high-demand markets. We operate primarily through our wholly-owned subsidiaries, Capella University and Strayer University, both accredited post-secondary institutions of higher education located in the United States, and Torrens University, an accredited post-secondary institution of higher education located in Australia. Our operations emphasize relationships through our Education Technology Services segment with employers to build employee education benefits programs that provide employees with access to affordable and industry relevant training, certificate, and degree programs. We generated net revenue of $1.1 billion in 2023. For more information regarding our revenues, profits, and financial condition, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements included in this Annual Report on Form 10-K. As of December 31, 2023, our three reportable segments consisted of U.S. Higher Education, Australia/New Zealand, and Education Technology Services. U.S. Higher Education ("USHE") Segment The USHE segment provides flexible and affordable certificate and degree programs to working adults primarily through Capella University and Strayer University (the "USHE Universities"), including the Jack Welch Management Institute MBA, which is a unit of Strayer University. USHE also offers non-degree web and mobile application development courses through Hackbright Academy ("Hackbright") and Devmountain, which are units of Strayer University. Student Profile The following is a breakdown of students by program level enrolled in the USHE Universities as of the 2023 fall term: Program Capella University students Strayer Uni