LINC

Lincoln Educational’s second quarter was marked by robust revenue growth, but the market responded negatively due to slower-than-expected student start growth. Management pointed to a combination of process issues, including financial aid packaging delays and students defaulting on existing loans, as key contributors. CEO Scott Shaw explained, “We had about a 9% increase in enrollment. Unfortunately, based off of start rates had held to where they have been historically, we would have had 9% growth in our starts.” The company also cited evolving student search behavior, such as increased use of AI tools, as a factor in lead conversion challenges. Is now the time to buy LINC? Find out in our full research report (it’s free). Revenue: $142.6 million vs analyst estimates of $138.9 million (22.4% year-on-year growth, 2.6% beat) EPS (GAAP): $0.06 vs analyst estimates of -$0.01 (significant beat) Adjusted EBITDA: $12.72 million vs analyst estimates of $10.75 million (8.9% margin, 18.3% beat) The company reconfirmed its revenue guidance for the full year of $595 million at the midpoint EPS (GAAP) guidance for the full year is $0.78 at the midpoint, roughly in line with what analysts were expecting EBITDA guidance for the full year is $78 million at the midpoint, in line with analyst expectations Operating Margin: 2.3%, in line with the same quarter last year Enrolled Students: up 4,548 year on year Market Capitalization: $949.7 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Alex Paris (Barrington Research): Asked about the impact of apprenticeship models and direct employer hiring on student demand. CEO Scott Shaw replied that, while employer interest is rising, apprenticeship programs have not materially affected Lincoln’s enrollment pipeline. Luke Horton (Northland Capital Markets): Inquired about the extent to which AI-driven search changes contributed to the slowdown in student starts. Shaw acknowledged the impact but emphasized ongoing website and content updates to improve AI-driven lead generation. Luke Horton (Northland Capital Markets): Followed up regarding the drivers behind revenue per student growth. CFO Brian K. Meyers explained that tuition increases averaged 2–3% and that changes in the timing of start classes and tool revenue also played a role. Steven Frankel (Rosenblatt Securities): Pressed on whether the start growth shortfall was due to lead or process issues. Shaw clarified that while leads decelerated, most of the gap was due to process and financial aid packaging challenges, not regional or program concentration. Eric Martinuzzi (Lake Street Capital Markets): Queried about regional or program-specific start weakness and retention improvements. Shaw confirmed the softness was system-wide and attributed retention gains to expanded student support services and initiatives. Looking forward, our analyst team will be watching (1) whether recent improvements in student start conversion are sustained into the third quarter and beyond, (2) the impact of high school recruitment investments on new student growth, and (3) the execution and ramp-up of new campus openings in markets like Suitland and Tempe. Adaptation to AI-driven marketing and ongoing retention improvements also remain key signposts for progress. Lincoln Educational currently trades at $30.12, down from $40.99 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 10:00 a.m. ET Chief Executive Officer and President - Scott Shaw Executive Vice President and Chief Financial Officer - Brian K. Meyers Investor Relations - Michael Polyviou Operator: Hello, and welcome to Lincoln Educational Services second quarter 26 earnings call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you would need to press 11 on your telephone. You would then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. I would now like to hand the conference over to Michael Polyviou. You may begin. Michael Polyviou: Thank you, Towanda. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued a news release reporting financial results for the first quarter excuse me, for the second quarter ending 06/30/2026 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, CEO and president, and Brian K. Meyers, Chief Financial Officer and Executive Vice President. Today's call is being recorded. It 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 that 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 statement and projection upon which the segment 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 that time with respect to future events. All forward looking statements are qualified in their entirety by this cautionary statement. And 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. 1 other housekeeping matter. During the Q&A portion of the call today, we would ask questioners to limit themselves to 2 questions and then requeue to ask any additional questions. In advance, we thank you for your cooperation. Now I would like to turn the call over to Scott Shaw, CEO and president of Lincoln Educational Services. Scott, please go ahead. Scott Shaw: Thank you, Michael, and good morning, everyone. Thank you for joining us today to recap the progress Lincoln has made towards achieving our goals for 2026 as well as continued progress towards the 2030 targets we communicated earlier this year. We had a strong second quarter as we generated 22.4% revenue growth 42.4% adjusted EBITDA growth and increased net income 25% over prior year quarter levels. We also realized a $22 million improvement in operating cash flow for the quarter and further our liquidity and resources to execute our growth strategies with the expansion of our credit facility. As a result of our performance during the quarter and first half of the year and current trends, we are reiterating our full year guidance while we increase our capital expenditure outlook to advance strategic growth initiatives. Brian will-- sorry, Brian will review our guidance in full during his comments. Lincoln Tech is leading the way in an evolving skilled trades marketplace as we have for the past 80 years. As a recognized leader of education and training services for safe in demand rewarding careers in the skilled trades, transportation, and health care fields, we are benefiting from the continuously expanding interest across America as the demand for skilled workers exceeds supply. We have focused our strategies on simplifying operations to maximize graduate opportunities in skilled trades which have the highest demand. Our focused programs are for trades expected to remain in high demand as the effects of artificial intelligence deployment impacts white collar and other jobs across the country. During the first quarter of this year, we achieved student start growth of nearly 20% and we expected second quarter start growth to moderate to approximately half this rate. While enrollments for the quarter did grow at approximately 9%, our starts growth slowed to 1%. Throughout the quarter, we identified changes in our leads and took action to ensure that prospective students were receiving accurate information to make the best decision for their future. With that said, the environment is dynamic as students utilize new AI tools in search for new career opportunities. The good news is that our strong brand and outcomes continues to drive up our organic leads and changes we are making to our website and other digital communications will further enable the large language models to better recognize and highlight our differentiation and superior outcomes. As we look to our second half, we see positive signs that our efforts are improving our lead generation results. As per our start calendar, we had very few classes starting in July. But we have a very robust August, which we are expecting to be our company's largest in history. Given what we have achieved in the first half of the year and what looks like a return to robust growth in the third quarter, we remain confident in our full year student start growth guidance of 10% to 14%. A contributing factor to August projected strong starts is our reinvigorated high school recruiting platform. Last summer, we started an overhaul and expansion of our high school recruiting team given renewed interest by students, parents, and even guidance counselors in the skilled trades. At present, we expect our high school starts in the third quarter to be up more than 15%. While we see improvement this year from these investments, we expect even more growth next year as the teams build on their relationships and reach even more prospective students. During the quarter, we continued to execute our new campus development project in Hicksville, New York and Rowlett, Texas. Hicksville remains on schedule to begin enrollment during the fourth quarter of this year While Rowlett should begin enrolling students in the first quarter of next year. Our efforts to identify suitable facilities in our underserved markets remain at a high pace. And during the quarter, we have added another leg to our new market development strategy with the signing of a lease for our focused program campus in Suitland, Maryland. At 36 thousand square feet of space, the Suitland campus is approximately 50% of the size of our traditional campus facility and will initially offer electrical systems technology and heating, ventilation, and air conditioning programs to meet the exploding demand for employees trained in these skilled trade areas in the Metropolitan Washington DC area. The Suitland campus is our second in Maryland and we are hopeful it will generate similar marketing synergies that we continue to generate in the Metropolitan Atlanta market with our East Point and Marietta campuses. The focused program development strategy being deployed in Suitland is expected to involve a $10 million capital investment versus our traditional campus development investment of approximately $25 million. And should produce about $5 million of EBITDA within 3 years. We are already building out the facility and plan to open during the fourth quarter of 27. With the development of the focused campus initiative, we have increased our expansion opportunities within and beyond the top 25 MSAs. I am also pleased to announce that we are finalizing a lease for a 90 thousand-square-foot in Tempe, Arizona, which is our first campus in Arizona. We expect it to open by the first quarter of 28 to serve the greater Phoenix market. This campus will be similar to our Hicksville and Rowlett campuses, offering automotive, electrical, HVAC, and welding. Meanwhile, our other growth initiatives continue to progress. We have recently added another member to our corporate development team and are advancing corporations involved in developing the data center infrastructure needed to support the growing demands of AI organizations. Not only are employees trained in electrical, HVAC, and welding needed to build the centers, the electrical and HVAC trades are needed to maintain the centers to high-performance standards. Given Lincoln Tech's track record at enrolling, supporting, graduating, and placing students, we are excited about helping corporations maximize their potential through providing exceptionally trained skilled trade employees. Our leadership in skilled trades training is increasingly being recognized by third parties. For instance, in July, our Melrose Park, Illinois campus was included in USA Today's America's Top vocational schools for 2026. It was the second year in a row Melrose Park achieved inclusion in the list and comes after 81% of the campus's 600 graduates were hired for careers in their field. The USA TODAY survey evaluates career training schools based on 5 criteria, including graduation rate, graduate salaries, diversity within the student body, anticipated years to pay off the program cost, and social mobility. In addition, our Grand Prairie, Texas campus was named a school of excellence by the Accrediting Commission of Career Schools and Colleges recognizing the campus' outstanding performance during its reaccreditation renewal. Earlier, I mentioned the success of our direct high school student recruiting efforts. In addition, we continue to generate substantial interest in our high school SHARE program where 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 a rewarding career. The list of interested school districts gets longer as we await funding decisions on some 2-dozen requested share proposals we have submitted to districts. If the proposals are accepted and funded, this will be another positive contributor to 2027. We continue to realize operating efficiencies across our 10.0 hybrid teaching platform by providing students flexibility to those needing to balance work and life while earning their certificate or degree. We have achieved this flexibility by combining hands on learning at campus facility with a component of classroom work delivered through online instruction, which reduces the time needed to complete many of our curriculums and accelerates our graduates to their highly rewarding careers. While our Lincoln 10.0 hybrid teaching platform continues to realize instructional efficiencies for the company, our instructors, and our students, we are also continuing to invest some of the savings gained from these inefficiencies back into our campuses with expanded programs, processes, and staffing to continuously drive improved student outcomes. Emotional and life support to help students face the challenges they experience in pursuing a new career while holding down a job and or raising a family are offered, and we believe this service is positively impacting our student retention rate at our programs open for more than a year, helping to build our already high graduation rate. Striving to provide the best education and training for safe, rewarding, and in demand careers continues to drive our entire organization forward. Achieving this quest has put us in a position to approach $600 million in revenue for the full year. Our momentum as well as the availability of resources from our recently increased credit facility brings us another step closer to achieving our 2030 objectives. of $850 million in revenue and $150 million of EBITDA as we continue to expand our leadership position. After 80 years of providing high quality, life changing career education, we have amassed an unmatched combination of longevity, scale, and proven experience. By continuing to execute our strategies to expand our network of schools, and replicating our most in demand programs at our existing campuses, we are providing a unique proven model to help America close its chronic and severe skills gap by meeting the growing demand for more talented men and women to enter the skilled trades. We have aggressively worked to increase the visibility of our message by those who can benefit from our training and career preparation and are constantly assessing how we can improve on our delivery. We have made substantial progress on this front in the past several weeks, and are excited about the prospects for the second half of the year. Before I turn the call over to Brian, I would like to note we will be continuing our outreach efforts over the next few months by attending conferences and conducting non deal roadshows and other events with our covering analysts. We will be participating at the Barrington and Lake Street conferences in September as well as a fireside chat with Northland. Now I will turn the call over to Brian K. Meyers so he can review the financial highlights for the second quarter and first half of 26 and review our reiterated 2026 guidance. Brian? Brian K. Meyers: Thank you, Scott, and good morning, everyone. I will begin with a few recent developments then review our second quarter 26 financial results and discuss our outlook for the remainder of the year. As a reminder, during last year's second quarter earnings call, we noted that a change to our Lincoln 10.0 academic calendar shifted a start class that would typically have occurred in late June to July 1, 2025. To provide a more consistent comparison, we adjusted our second quarter 25 student start to include that class. Accordingly, the second quarter 26 starts discussed today are compared with those adjusted numbers. Starting with recent developments, as discussed on our last call, we have amended our credit facility in April, significantly increasing our financial flexibility by more than doubling the revolving credit facility capacity to $125 million. As Scott mentioned, in June, we expanded our growth initiatives to include a new focus program campus model when we announced the lease of our new facility in Suitland, Maryland, which further expands our presence in Washington DC Metropolitan Area. Subsequent to quarter-end, We also completed the acquisition of the building housing our Melrose Park, Illinois campus which we had previously leased. I will provide more details on these transactions shortly. Now let's turn to our second quarter financial results. Our growing student population continue to drive strong revenue growth and EBITDA margin expansion in the second quarter. Operating income and net income also increased although as previously communicated, at a slower rate than our EBITDA, due to the higher depreciation expense of our recent capital investments. Demand for our programs remained strong with our ending student population increasing by approximately 1.8 thousand students, or 10% year-over-year across our 22 campuses. Revenue increased 22.4% to $142 million during the quarter, marking more than 3 consecutive years of sustained double digit quarterly revenue growth. The increase was primarily driven by a 14.5% growth in our average student population. As Scott noted, while we are reiterating our full year student start growth guidance, our start rate was lower than expected during the second quarter. Despite high single-digit enrollments in line with our expectation heading into the quarter, a lower percentage converted to starts. As a result, student starts increased 1% during the quarter and the lower staff volume contributed to a higher cost per start. In response, we have implemented actions to improve conversion from enrollment to start. While student start growth was softer than expected during the quarter, the impact was largely offset by a stronger retention among existing students. Through June, student attrition has improved by approximately 150 basis points compared with the prior year. These favorable retention trends kept our student population in line with expectations and supported our 22.4% revenue increase during the quarter. They also contributed to the strong student population, which is up over 10% compared to last year as we enter the third quarter supporting continued revenue growth. Looking ahead, we believe the actions we have taken, which Scott reviewed, are gaining traction. An early third quarter performance is encouraging. We currently expect student starts to return to low double digit year over year growth in the third quarter. Supported by improved lead trends our investment in high school recruitment, and strong enrollment conversion metrics. As Scott mentioned, these encouraging trends could result in 1 of the largest start classes in the company's history this month. We are also seeing a greater percentage of students at our upcoming start class complete the financial aid package process earlier in the enrollment cycle. Historically, students who are packaged earlier have converted to starts at a higher rate. This encouraging trend combined with our broader initiatives to improve enrollment to start conversion supports our confidence in our third quarter student start outlook. It also reinforces our full year start growth guidance of 10% to 14%. Operating expenses increased $22.6 million to $139.2 million broadly in line with our revenue growth. These increased expenses were consistent with our budgeted expectations reflecting our larger student population continuing investments in growth initiatives, higher depreciation associated with our new facilities, and the timing of booking tool expense. Adjusted EBITDA increased 42.4% to $12.7 million As a reminder, our calculation of adjusted EBITDA no longer adds back the losses related to new campuses in their preopening initial year of operations. We incurred new campus losses of $3.1 million in the second quarter compared to losses of $1.3 million in the prior year quarter. Despite these additional investments, our adjusted EBITDA margin expanded slightly compared to the prior year. Net income was $1.9 million, up from $1.5 million in the prior year. Diluted EPS was $0.06 based on approximately 31.4 million weighted average diluted shares outstanding. As a reminder, due to the seasonality of our business, we typically generate most of our annual profits during the second half of the year. Year to date capital expenditures totaled approximately $33.2 million, of which $29.1 million is reflected in the statement of cash flows. Spending that occurred in the second quarter was below plan primarily due to the timing of permits and weather related delays. Shifted a significant portion of the planned expenditures into the third quarter. We do not anticipate these timing differences to result in any significant delays in our opening of our new campuses. Turning now to the balance sheet and financing activities. Building on the positive operating cash flow we generated in the first quarter, cash flow from operations totaled $26.6 million for the 6 months ended 06/30/2026, compared with a use of $8.1 million in the prior year period. An improvement of nearly $35 million We ended the quarter in a strong financial position with $44.2 million in cash and $99 million of availability under our expanded credit facility. This represents total liquidity of $143.2 million, with $26 million of debt outstanding under the facility. The focus program campus model we are creating in Suitland, Maryland requires an estimate of $10 million in capital investments, which is less than half of the traditional campus build-out is projected to deliver an IRR of over 30% with a faster payback than our larger model campus due to shorter construction time. At full ramp, the Suitland campus is expected to generate more than $15 million in revenue and $5 million in adjusted EBITDA. in EBITDA. This compares to a traditional campus requiring approximately $25 million in capital investments and generating $30 million in revenue and $10 million in EBITDA at full ramp. The acquisition in July of our Melrose Park, Illinois property for $18.8 million was funded with $15 million in new mortgage financing. When the property became available, we took the opportunity to secure an important long term campus asset while improving our cash flow as the mortgage payments are now lower than our previous rent expense. Turning to our full year outlook, we are reiterating our guidance for all metrics, except capital expenditures. We continue to expect revenue of $590 million to $600 million adjusted EBITDA of $76 million to $80 million net income of $23 million to $26 million diluted EPS of $0.74 to $0.83 and student start growth of 10% to 14%. As mentioned earlier, beginning in 2026, calculation of adjusted EBITDA no longer excludes preopening and first year losses from new campuses. Accordingly, our guidance now includes approximately $10 million in new campus losses, which continues to be in line with our expectations and excludes only noncash stock based compensation. With regard to our capital expenditures, guidance, we are increasing it from $70 million to $75 million to $95 million to $100 million. increase reflects the $18 million purchase of the Melrose Park property and the anticipated 2026 spend of our Suitland, Maryland campus. Growth initiatives represent approximately 75% of our planned capital expenditures underscoring our continued focus on expanding capacity and supporting future enrollment. As additional campus locations are announced, we will update our capital expenditure plans accordingly. In closing, we remain focused on executing our growth strategies achieving our 2030 objectives of $850 million in revenue and $150 million of adjusted EBITDA. We appreciate the dedication of our team and their continued commitment to delivering high quality education and strong outcomes for our students. With that, we will turn the call over to the operator for questions. Operator? Operator: Thank you. Ladies and gentlemen, as a reminder to ask the question, please press 11 on your telephone, then wait for your name to be announced. To withdraw your question, please press 11 again. Please limit yourself to 1 question and 1 follow-up. Our first question comes from the line of Alex Paris with Barrington Research. Your line is open. Alex Paris: Hi, good morning guys. Thanks for taking my questions. Scott Shaw: Sure, good morning, Alex. Brian K. Meyers: Good morning. Morning. Alex Paris: I have a couple, and they are related. First question, given the announcements of UTI in the trade school space last week also, you differed by having a stronger health, high school start season. Than they, But I am also wondering about shift from auto diesel to skilled trades, which your competitor noted last week. And then also, our employers hiring more potential students directly? Some of these announcements that we have all seen in the press You know, quasi apprenticeship programs, you know, they get paid while they are getting their training. Maybe you can compare and contrast the 2 different approaches. Scott Shaw: Sure. So first on high school, I mean, as I mentioned in my remarks, I mean, last year, we made a concerted effort to invest more in our high school market. We have about 20% of our students that are historically coming to us right out of high school. Some of our competitors have more than that, so we saw an opportunity to gain more growth by expanding that. Especially in a time when, the high school students and faculty and parents and guidance counselors are all more receptive to our message. So we did change our approach. We bolstered our team, and we continue to invest in that place in the high school recruiting efforts. And we expect I said, to have really strong August start. A lot of that growth is coming from high school and we expect that to continue. And we expect, frankly, next year to have even more growth the high school marketplace really requires, talented individuals that remain employed with you as they build relationships at these high schools. And the longer and stronger those relationships are, the more success you will have. And we are starting to see that. And with regards to skilled trades versus automotive, I mean, for the last, frankly, couple years, we have been seeing a continual shift with more interest in the skilled trades. And, I think we have shared this a little bit, but today, when you look at our population, we are about 60% skilled trades. 20% health care, and 20% automotive. And our skilled trades means we have been doing skilled trades for 80 years. You know, HVAC started back in 1.95 thousand. So I think we have a really good handle on the trades, and our trades are, frankly, our most profitable business both as a margin as well as absolute dollar contributions, to the bottom line. So as that trend has continued, that has benefited us you know, frankly, as an organization. And part of our focus campus model is frankly to help leverage that opportunity because it is a lot easier and, for us to find facilities that we can open up HVAC and electrical programs in then facilities that have automotive and welding as well. Require some additional, height capacity and other things. For those other 2 programs. So, anyway, long story short, trades are very important to us. Trades are critical, to our further growth, and we do quite well with them. And then I forget, Alex. a third part to your question? Alex Paris: Apprenticeship. Scott Shaw: Oh, the apprenticeship. Mm-mm. Yeah. Yeah. Apprenticeship. Alex Paris: Competition you know, historically, your competition came from community colleges with their capacity constraint. I am wondering what sort of competition you are seeing from employers directly hiring. And training. Scott Shaw: Yeah. So, I have read about it we have not seen the impact of that or really taking hold at any material way, as far as how it might be impacting us. We are certainly having more and more discussions with our existing employers as well as finding new employers, because I am fully on board that, companies should be supporting students while they are with us and certainly after us with helping them with their financing of their education. But we are also just seeing such strong demand, on the back side. We are forming a new we formed a new partnership with an organization that is supports AI. They started off with they want to hire 10 students a week from us, but they want to ramp it up to 20 as quickly as possible. And they are paying between $70 thousand and $100 thousand for our graduates, which is just incredible opportunity for people. The only reason why I just mentioned that is that there is going to be more and more opportunity, I think, to tap into our existing employers and future companies that we connect with to help finance our students' education. But long story short, we have not seen anything that indicates that somehow the apprenticeship model is I will say, taking a big piece of the pie in any stretch of imagination. Alex Paris: Okay. And then my related follow-up and last question, I promise. Is I think there is some deliberate language in the press release. Our start growth for the quarter is slowed to 1% as fewer enrolled students than expected attended the first day of class. Is what we have historically called the show rate the show rate, you have a conversion from a lead to an application and then a conversion from an application to a start. So it sounds like that is where the issue is you explain that a little bit? And what are you doing differently with enrollment counselors to improve that enrolled student to start? Scott Shaw: Sure. Yeah. So as we said there, we had about a 9% increase in enrollment. And unfortunately, based off of start rates had held to where they have been historically, we would have had 9% growth in our, starts. The softness you know, comes from multiple sources. 1, Brian mentioned, we are doing a much better job with packaging our students, getting them the financial aid. The sooner students know what they-- how they are going to pay for their education, the more certain they are to start with us. So we are definitely working on that. We are also working with our admissions folks as well as some of our educators to stay in contact with students stitch in events, making sure that they know that this is a good opportunity for them, that they can complete the education, so that they, end up starting with us. There are also other touch points we are enhancing and making more broadly available to students. But I also will tell you there was an event, that kind of kicked in and happened and impacted us. And it will exist going forward, but I am anticipating that it will be less. And what happened is as you know, the government did require students to start repaying their loans back in May. And what that has resulted in, is now that we are, more than let's say, 10 months later, those students, some of them have defaulted. And defaulted students are not allowed or do not have the ability to take on any more Title IV funds. So we did see a few percentage points of our students no longer be able to start with us because as we were packaging them, they could not get any more financial aid. Because as you know, we have a lot of adult students that have gone community colleges or other paths. And, unfortunately, I guess they got conditioned like a lot of people over the last 5 years that you have to repay your debt. And then when the government required them to repay their debts, they ended up defaulting. So I am assuming that, that wave, initial wave is gonna be the biggest impact there, and then that should lessen over time. But that was also 1 of the factors, Alex, that softened our start rate in the second quarter. Alex Paris: Thank you very much. I appreciate the additional color and allowing my questions. Scott Shaw: Yeah. No problem. Thank you. Operator: Our next question comes from the line of Lucas John Horton with Northland Capital Markets. Luke Horton: Yes. Hey, guys. Thanks for taking the questions. I did want to touch back on the student starts growth for the quarter. And can you just talk about the dynamic of the increasing usage of AI search how much of the start softness in the quarter do you think was directly attributed to that And then also, I guess, kind of how much of a headwind from that are you baking into the back half of the year here? Scott Shaw: Sure. So, you know, the AI, tough to know exactly what the exact impact was. I mean, we certainly saw some of our lead volume slow down a bit in the quarter. AI is incredible technology, but in many regards, it is as good as the prompts you give it. And what we do a lot of searching on our own just to understand how they interpret what people are typing in. The good news is we see that Lincoln Tech pops up more times than not as a great opportunity for people. However, with that said, we also see that sometimes the AI models are simplistic, and what they look at is cost, in which case they may highlight a community college over us. Now as we all know, there is a lot of benefits for coming to a school like ours. First, our graduation rates are 2 to 3 times that of community college. If you are an adult looking to change your life, you might have to wait till September or January to start as a community college versus start within 30 days of reaching out to us. You know, these models do not tell you that you may have to start off just taking gen ed courses before you can get into the skilled trade programs that you want. My point being is they are not getting the full picture. So what we are doing is trying to change what is available on our website so that these large language models can give students a better insight into what a career or opportunity is at Lincoln versus other things. And we are starting to see some improvement in the leads because of that. And some, additional attraction to us. At the end of the day, though, you know, we have a superior product and we know our product, frankly, today is better than it is ever been. The challenge as you, as we are facing and some others is just getting in front of people to make sure that they understand that. So we are gonna continue to work with our vendors, continue to tweak our websites to make all the data as readily available, possible for these large language models to read. And, you know, as we just said, we do see a much stronger August than we have ever seen before. So I interpret that as we are making progress, but there is still more work to be done. Luke Horton: Got it. Okay. And then lastly for me, just on revenue growth of north of 22%, on enrollment growth of about 9%, It kind of implies a meaningful revenue per student uptick, I guess. Could you just kinda walk us through, I guess, how much of that gap is tuition or if you guys have pricing power here with just kind of the strong demand versus program mix shift or anything else that we could be missing on that front? Brian K. Meyers: Hi, Luke. Yeah. So, tuition increases are 2% to 3%. Scott Shaw: Historically, you know, we look at all our programs and programs that are a little bit more demand, it a little bit higher tuition going forward, and some are, you know, where there is competition every else, it could be a little bit lower. So it is it does average 2% to 3%. But what happened in the quarter is that we got a benefit from that 1 start that happened in July of last year that we pro forma-ed for, into 2025 into the second quarter. So we got a couple of days of revenue from that. We also got all the books and tool revenue from that. A lot of the tool revenue we earn when we give it out. So that about half of the, I will say, the increase came from that additional STAR class, the shift in the start class and the other half Was for, tuition increases that helped our revenue per student. But just to be clear, our tuition increases on average is around 2% to 3%, kind of across the board for all of our programs. Yep. Luke Horton: Okay. Got it. Makes sense. Thank you, guys. Scott Shaw: Yep. No problem. Thank you, Lucas. Operator: Please stand by for our next question. Our next question comes from the line of Steven Frankel with Rosenblatt Securities. Line is open. Steven Frankel: Good morning, Scott. I would like to go back to this Q2 start issue 1 more time and maybe go and parse it this way. How much of the shortfall was a leads issue versus a process issue. Analyst: Like, you talked about maybe the either default or not getting financial aid done at the right time. Scott Shaw: Yeah. So, well, as I said, from a numbers perspective, we had 9% increase enrollment. So if the start rate had held, we would have had 9% growth in starts. And that was kind of right in line with what we anticipated. With that said, we also were anticipating, frankly, more, enrollment growth from the lead volume that we had been seeing in the prior quarter. So overall, some of the leads started to lessen within the quarter, which frankly lessened the number of enrollments we were hoping to possibly achieve. But as far as the exact number again, the 9% to 1%, those are processed. Those are the fact that some of the defaulted students could not start, from you know, they defaulted from taking out loans at another institution. And then, you know, the processing of the financial aid for our students just to get more through the door. As well as, you know, there is always something else that, you know, I am just basing that off of what we know. But, certainly, there could be some changes because of the, AI that maybe the students that we have enrolled have some different perspectives on things. Well, we are not 100% sure. All I can tell you is that, the growth that we are seeing and anticipating in Q3 certainly tells me that we have solved part of that problem, and we are gonna continue to work to make sure that we can be as robust as possible because we just know from talking to employers that demand is greater than it is ever been And from frankly talking to prospective students, we know there is a strong interest. Steven Frankel: Okay. And then in terms of that Q3 strength, high school is typically what percentage of The overall starts in Q3. Scott Shaw: About 40%. Steven Frankel: K. And are the leads back to growing where you want them in Q3? Scott Shaw: Or do you still have this AI leads issue that you have to work through? there is still AI issues we have to work through. I mean, again, changes happen all the time. Sometimes Google will change their algorithms and everything's moving smoothly, and then you have to figure out how you readjust to it. Our world was turned upside down during COVID. We figured out how to, you know, adjust to it. This is just another 1 of those instances where the playing field changed and we are taking action to correct it. And we are very confident that we can overcome it simply because our product is so strong, and I believe our brand is so strong. So it is an opportunity ahead of us but, you know, things are not, I cannot say that things are the same as what they were 12 months ago. But I do anticipate things getting better. I mean, also, these AI models have to generate income as well. I mean, we are already seeing that chat GB is starting to offer paid advertising. And I think as they start I will say, behaving much more like Google, we will certainly have a benefit from that and be able to, I will say, have a more level playing field going forward. Okay. Steven Frankel: But just to sum up, your leads are now back to growing year over year as you look at Q3 and into Q4? Scott Shaw: Yeah. Yeah. I mean, our leads grew. Do not forget. Our leads grew also in the second quarter. it is just that the rate of growth was less. We continue to see continued progress across the board. Steven Frankel: Okay. Great. I will jump back in the queue. Scott Shaw: Thank you. Yeah. No problem. Operator: Our next question comes from the line of Eric Martinuzzi with Lake Street Capital Markets. Your line is open. Eric Martinuzzi: Yeah. Following up on the new student starts the curious to know if this was kind of system-wide or if you noticed any concentrations in certain regions of the of the company's operations. Scott Shaw: Yeah. Good question. No. It was basically system wide. With that said, our East Point campus just continues to be you know, robustly growing. But, overall, it was kind of across the board and across the board by program. There was not anything to discern, Eric, from what was happening as if there was regional or programmatic issues of any kind? Eric Martinuzzi: Mhmm. And then you did call out and highlight the retention. Anything that you have been able to determine as far as what is behind the better than expected retention? Scott Shaw: Oh, sure. I mean, we have put in a number of programs to help improve our goal is to get to 70% graduation rates. We are about 200 basis points this year higher in our retention than we were last year. And it all comes down to providing better customer service. We have put more student service advisers in all of our campuses. So that they can interact with students and help them when, you know, frankly, life gets in the way. Sometimes they might have a car breakdown. They cannot get to school, so we help them find a car pool. Other issues might pop up. And just by being attentive and on top of it and making sure that students know that we are there to support them, gives them a lot more confidence, and makes them more successful. But, yeah, we have a number of initiatives that our education team has been implementing over the last 14 months. To make this happen, and we anticipate further growth and improvement next year. Eric Martinuzzi: Got it. Thanks. Scott Shaw: Sure. Operator: Our next question comes from the line of Griffin Boss with B. Riley Securities. Your line is open. Griffin Boss: Hi, good morning. Thanks for taking my questions. First, I want to start off. Scott, you talked about the opportunity to partner with more AI companies, in order to help supply that funnel of labor required for not only data center build out but data center maintenance over the next few years. Can you just dig more into that opportunity and that employer pipeline? Scott Shaw: Sure. So, I mean, Johnson Controls has been a longtime partner of ours, and we have done things with them with their fires and alarm systems, and now we are doing things with them for both the building of data centers as well as training for the maintenance of those data centers. So since that is a name that we have always talked about, I am happy to share that. But we also have a number of other companies that have come to us that, well, let's say for competitive reasons, I am not gonna give their names out at this point, who are looking to hire students. We have another organization in the AI field that is looking to, frankly, pay us, frankly, a fair amount of money per student that we place with them. We have another organization that is looking to create a specialized training program so that our students can slide more easily into their organization. All around, AI infrastructure. So it is just that we are reaching out to more companies as well as more companies are coming to us as they see the value of our, I will say, national somewhat national footprint, but also the program is the same across our platform, which makes it very easy for these larger companies to understand what the quality is of our students and what their skill sets are. So it is it is just a very robust market, which is fortunate for us and for our students. Griffin Boss: Got it. Thanks for the color, Scott. Scott Shaw: Yeah. That will be exciting to see more developments in the coming quarters. Griffin Boss: And then just 1 more follow-up for me and maybe for Brian here. Given the higher CapEx ex expectation for the year, how if at all, does that change how you are thinking about the carryover of that revolver from quarter to quarter historically? You have kinda looked to, you know, pay down any outstanding amounts at the end of the year. Is that gonna change, or is that still the expectation going forward? Scott Shaw: Go ahead. Brian K. Meyers: So now with the I will say this. We announced that we are gonna have a mortgage outstanding of $15 million that we took, so that will be outstanding at the end of the year. And now, you know, while we will be slightly free cash flow negative, so I would say about maybe, you know, at the end of the year about, like, $20 million worth of well, actually, give me 1 second. Scott Shaw: I cannot go with that. You are about, like, $20 million or so outstanding on the credit agreement. Including the $15 million. Yeah. Right. Right. Griffin Boss: Understood. Okay for that, Brian. Appreciate you, both taking my questions. Brian K. Meyers: Yep. Scott Shaw: No problem. Operator: Our next question comes from the line of Alex Paris with Barrington Research. Thanks. Eric Wold: Good morning. I wanna go back to the, you know, the conversion rate from enrollment to start. So what level would you say you are back to now in terms of, you know, start to enrollment kind of ratio versus where it is been historically? And kind of what are you assuming in the back half of the year guidance, you are reaffirmed guidance, you assume that kind of that conversion rate kind of gets back to historical levels, or you think there is still be some pressure on that in the back half of the year? Scott Shaw: We think that it will, certainly get better than we had in second quarter. I can tell you our next start frankly, occurs tomorrow. And so then a week from tomorrow, we will know exactly what the numbers are. But I can tell you that as we have gone through orientation over the last week, we are not seeing, I will say, as much fall off as what we saw in the second quarter. So to me, that gives me greater confidence that things are moving in the right direction and that we will have this robust start in August. So it is just a matter of, like, a lot of things, just constantly staying on top of things. And not taking anything for granted and really making sure that we are communicating with our students, frankly, in a more robust way. In order to drive that start rate back up. Eric Wold: Got it. And then any update on did you kind of expanding kind of the breadth of kind of slots during the week for the hybrid offering, kinda get more options, more availability for students that may not be able to have a work with the current general. Scott Shaw: I apologize. Could you say the question again? I did not hear it all. I apologize. Eric Wold: Sure. Any update on kind of offering additional slots with the new hybrid offering in 2 additional periods of the week that may work with students? Yeah. Scott Shaw: That can work with the current Yeah. So we have a few, you know, we have 3 sessions a day, so with the morning, afternoon, and evening. And we do have 2 campuses now, maybe 3, have a weekend shift utilizing Friday, Saturday, Sunday. Just because there was a need and opportunity to do so. So it is still, as I said, maybe at 2 or 3 campuses with 1 program, but we have that flexibility as demand or we reach, capacity at certain locations with certain programs, we still have that lever to open up, to enable us to grow without spending more capital. You know, with that said, I did highlight our East Point campus, and we are in the next, hopefully, 30 days, gonna open up an additional 15 thousand square feet that we had to build out at that campus, which will add about 500 students of capacity. We just see that campus continue to be extremely robust frankly, despite the fact that there is been some new competition come into the marketplace. If anything, we have seen their marketing spend drive more leads to us. Because it just highlights to me that there is such a untapped large market out there for students to go into the trades. They just need to be made aware of these opportunities. So more marketing dollars that go towards it, I think, helps the whole industry. Just like these advertising for apprenticeships and other programs that are out there, just brings more awareness overall. And there is such a shortage and such a need, that, I see it just frankly benefiting us. I mean, it is -- I do not know. Today, remain as robust as exciting as I have ever seen them. Perfect. Thank you. Sure. Operator: Thank you. Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Scott for closing remarks. Scott Shaw: Thank you, operator, and thank you all for joining us today as we reviewed our strong progress. While Lincoln is benefiting from both macro operating environment trends and our own consistent execution of growth initiatives, at our existing campuses and new facilities, we are also demonstrating our ability to react quickly and successfully to changing dynamics within the market. I could not be more bullish on the need for skilled trade professionals and desire by prospective students to enter the field. Our investments in our operations, our students, and our organization continue to create numerous opportunities to generate increasing levels of shareholder returns over several years. Of course, our success is only made possible by the commitment and dedication of our faculty and staff and the success of our students. I would like to thank our shareholders for their support and our entire team for their dedication to achieving our goals. Thank you all again, have a great day. Operator: That concludes today's conference call. You may now disconnect. Before you buy stock in Lincoln Educational Services, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lincoln Educational Services wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $399,832!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,374,595!* Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 10, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Lincoln Educational Services. The Motley Fool has a disclosure policy. Lincoln Educational Services (LINC) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Lincoln Educational Services Corporation? Here are five stocks we like better. Strong second-quarter financial performance: Revenue rose 22.4% to $142.6 million, while Adjusted EBITDA increased 42.4% to $12.7 million. Average student population grew 14.5%, although student-start growth was limited to 1%. Enrollment challenges are expected to ease: Financial-aid issues, prior student-loan defaults and slower lead growth tied to AI-based search tools weighed on starts. Lincoln expects low-double-digit start growth in the third quarter, supported by improved conversion, high-school recruiting and better retention. Expansion and investment continue: Lincoln signed plans for new campuses in Maryland and Arizona, raised its 2026 capital-expenditure forecast to $95 million–$100 million, and reiterated full-year guidance of $590 million–$600 million in revenue and $76 million–$80 million in Adjusted EBITDA. Fed Rate Cuts on the Horizon: Why These 2 Stocks Stand to Benefit Lincoln Educational Services (NASDAQ:LINC) reported second-quarter revenue growth of 22.4% and Adjusted EBITDA growth of 42.4%, while reiterating its full-year financial and student-start outlook despite a slower-than-expected increase in student starts during the period. Revenue for the quarter ended June 30 rose to $142.6 million, driven primarily by a 14.5% increase in average student population. The company said its ending student population increased by about 1,800 students, or 10% year over year, across its 22 campuses. → MarketBeat Week in Review – 08/03 - 08/07 Adjusted EBITDA increased to $12.7 million from the prior-year quarter, while net income rose to $1.9 million from $1.5 million. Diluted earnings per share were $0.06 on approximately 31.4 million weighted average diluted shares outstanding. Lincoln said student starts grew 1% in the second quarter, below its expectations, even though enrollments increased about 9%. CEO and President Scott Shaw said the lower conversion of enrolled students into starts was influenced by several factors, including financial-aid processing and some prospective students being unable to access additional Title IV funding after defaulting on previous student loans. → Quantum Earnings Week: Winners and Losers Are Finally Emerging The company also experienced slower lead-volume growth during the quarter as prospective students increasingly use artificial intelligence-based search tools to research education and career options. Shaw said Lincoln is modifying its website and digital communications to help large language models better identify the company’s programs, graduation outcomes and other differences relative to alternatives such as community colleges. “Our product is so strong, and I believe our brand is so strong,” Shaw said during the question-and-answer session. “It’s an opportunity ahead of us.” → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War Management said lead volumes continued to grow during the second quarter, though at a slower rate, and it has seen signs of improvement entering the third quarter. Lincoln expects student starts to return to low-double-digit year-over-year growth in the third quarter, aided by stronger lead trends, enrollment conversion efforts and high-school recruiting. August is expected to be the company’s largest start period in its history, according to Shaw. High-school starts are projected to increase more than 15% in the third quarter, with high-school students expected to account for roughly 40% of overall third-quarter starts. Meanwhile, student attrition through June improved by approximately 150 basis points from the prior year. Shaw attributed the retention improvement to investments in student service advisors and initiatives intended to help students manage personal and logistical challenges while completing their programs. Lincoln continued to advance new-campus development projects in Hicksville, New York, and Rowlett, Texas. The Hicksville location remains on track to begin enrolling students in the fourth quarter of 2026, while Rowlett is expected to begin enrollment in the first quarter of 2027. The company also signed a lease for a 36,000-square-foot focused-program campus in Suitland, Maryland. The campus, which is planned to open in the fourth quarter of 2027, will initially offer electrical and electrical systems technology, as well as heating, ventilation and air conditioning programs. Management estimates the Suitland project will require about $10 million of capital investment, compared with roughly $25 million for a traditional campus. At full ramp, the location is expected to generate more than $15 million in revenue and $5 million in Adjusted EBITDA, with a projected internal rate of return above 30%. Shaw also said Lincoln is finalizing a lease for a 90,000-square-foot campus in Tempe, Arizona, its first location in the state. The campus is expected to open by the first quarter of 2028 and offer automotive, electrical, HVAC and welding programs for the greater Phoenix market. The company is also pursuing relationships with corporations involved in building and maintaining data-center infrastructure. Shaw said demand for workers trained in electrical, HVAC and welding is rising as data centers are built and maintained to support artificial intelligence applications. Lincoln said it generated $26.6 million of operating cash flow during the first six months of 2026, compared with cash used in operations of $8.1 million in the prior-year period. The company ended the quarter with $44.2 million in cash and $99 million of availability under its expanded credit facility, for total liquidity of $143.2 million. Debt outstanding under the facility was $26 million. In April, Lincoln more than doubled its revolving credit facility capacity to $125 million. After the quarter ended, the company acquired the building housing its Melrose Park, Illinois, campus for $18.8 million. The acquisition was funded with $15 million in new mortgage financing, and CFO and Executive Vice President Brian Meyers said the mortgage payments are lower than the campus’ prior rent expense. The company raised its full-year capital expenditure forecast to $95 million to $100 million from $70 million to $75 million. The revised outlook reflects the Melrose Park property acquisition and anticipated spending for the Suitland campus. Growth initiatives account for about 75% of planned capital expenditures, management said. Lincoln reiterated its 2026 guidance, including: Revenue of $590 million to $600 million. Adjusted EBITDA of $76 million to $80 million. Net income of $23 million to $26 million. Diluted EPS of $0.74 to $0.83. Student-start growth of 10% to 14%. The company said its 2026 Adjusted EBITDA outlook includes approximately $10 million of losses from new campuses in pre-opening and first-year operations. Lincoln continues to target $850 million in revenue and $150 million in Adjusted EBITDA by 2030. Lincoln Educational Services Corporation is a publicly traded provider of career-focused post-secondary vocational education in the United States. Operating under the Lincoln Tech and Lincoln Culinary Institute brands, the company delivers hands-on technical instruction across high-growth industries. Its mission centers on equipping students with practical skills and industry credentials designed to meet employer needs. The company's program offerings span automotive technology, skilled trades, health sciences, information technology, culinary arts and public safety. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Lincoln Educational Services Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: $142.6 million, up 22.4% year-over-year. Adjusted EBITDA: $12.7 million, up 42.4% year-over-year. Net Income: $1.9 million, up from $1.5 million in the prior year quarter. Diluted EPS: $0.06 per share. Student Population: Increased by approximately 1,800 students, or 10% year-over-year. Student Starts: Increased 1% during the quarter. Average Student Population Growth: 14.5% increase. Operating Expenses: Increased $22.6 million to $139.2 million. Cash Flow from Operations: $26.6 million for the six months ended June 30, 2026, compared with a use of $8.1 million in the prior year period. Capital Expenditures: Year-to-date totaled approximately $33.2 million. Cash Position: $44.2 million in cash and $99 million of availability under its credit facility, representing total liquidity of $143.2 million. Debt: $26 million outstanding under the credit facility. Full-Year Revenue Guidance: $590 million to $600 million. Full-Year Adjusted EBITDA Guidance: $76 million to $80 million. Full-Year Net Income Guidance: $23 million to $26 million. Full-Year Diluted EPS Guidance: $0.74 to $0.83. Full-Year Student Start Growth Guidance: 10% to 14%. Capital Expenditures Guidance: Increased from $70 million to $75 million to $95 million to $100 million. Warning! GuruFocus has detected 4 Warning Signs with LINC. Is LINC fairly valued? Test your thesis with our free DCF calculator. Release Date: August 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue grew 22.4% year-over-year, marking more than three consecutive years of double-digit quarterly growth. Adjusted EBITDA increased 42.4% to $12.7 million, with margin expansion despite new campus investments. Student retention improved by approximately 150 basis points, supporting a 10% increase in ending student population. Expanded credit facility to $125 million, boosting total liquidity to $143.2 million for growth initiatives. New campus developments (Hicksville, Rowlett, Suitland, Tempe) are on track, with Suitland expected to deliver over 30% IRR and $5 million EBITDA within three years. Student start growth slowed to 1% in Q2, below the expected 9% enrollment growth, due to lower conversion rates. Higher cost per start due to lower start volume, impacting operational efficiency. AI-driven lead generation changes have reduced lead volume and conversion, requiring ongoing adjustments to digital strategies. Student loan repayment resumption has led to defaults, preventing some students from starting due to inability to secure financial aid. Capital expenditures increased to $95-$100 million, partly due to the Melrose Park property purchase and Suitland campus, potentially impacting near-term cash flow. Q: Can you explain the slowdown in student start growth to 1% during the second quarter, despite enrollments growing 9%, and what actions are being taken to improve the conversion rate from enrollment to start?A: Scott Shaw (CEO and President): The shortfall was due to a lower percentage of enrolled students converting to starts. We identified several factors, including students who had defaulted on prior federal loans and were no longer eligible for Title IV funds, as well as a need to improve the financial aid packaging process. We are working to get students packaged earlier in the enrollment cycle, increasing communication touchpoints, and enhancing our orientation processes. Early signs in the third quarter are encouraging, with a very robust August start class expected, which could be the largest in company history. Q: How is the increasing use of AI search tools impacting lead generation, and what is the company doing to adapt?A: Scott Shaw (CEO and President): We saw a slowdown in lead volume during the quarter, which we attribute partly to AI models providing simplistic comparisons that may highlight lower-cost options like community colleges without factoring in our higher graduation rates, faster start times, and better career outcomes. We are actively modifying our website and digital communications to ensure large language models can better recognize and highlight our differentiation and superior outcomes. We are already seeing improvements in lead trends and believe we can overcome this challenge as our brand and product remain strong. Q: Can you provide more detail on the new "focused program campus" model, specifically the Suitland, Maryland campus, and its expected financial returns?A: Brian Meyers (CFO and Executive Vice President): The Suitland campus is a 36,000 square foot facility, about half the size of a traditional campus, and will initially offer electrical and HVAC programs. It requires an estimated $10 million in capital investment versus $25 million for a traditional campus. At full ramp, it is expected to generate over $50 million in revenue and $5 million in adjusted EBITDA, with an IRR of over 30% and a shorter payback period due to reduced construction time. Q: What is driving the strong improvement in student retention, and how is this impacting financial results?A: Scott Shaw (CEO and President): We have implemented several initiatives, including adding more student service advisers at all campuses to provide better customer service and support students facing personal challenges. Through June, student attrition improved by approximately 150 basis points year-over-year. This stronger retention kept our student population in line with expectations and supported the 22.4% revenue increase during the quarter, despite the softer start growth. Q: Can you elaborate on the opportunities with corporations involved in developing data center infrastructure for AI?A: Scott Shaw (CEO and President): We are advancing discussions with several corporations, including a new partnership with an organization that wants to hire 10 students a week, ramping to 20, and is paying between $70,000 and $100,000 for our graduates. We are also working with Johnson Controls on training for building and maintaining data centers. The demand for skilled trades like electrical, HVAC, and welding is critical for both the construction and ongoing maintenance of these facilities, presenting a significant growth opportunity for us. Q: What is the company's outlook for the third quarter and full year 2026, given the mixed second-quarter performance?A: Brian Meyers (CFO and Executive Vice President): We are reiterating our full-year guidance for revenue of $590 million to $600 million, adjusted EBITDA of $76 million to $80 million, net income of $23 million to $26 million, diluted EPS of $0.74 to $0.83, and student start growth of 10% to 14%. We expect student starts to return to low double-digit year-over-year growth in the third quarter, supported by improved lead trends, investments in high school recruitment, and strong enrollment conversion metrics. We are increasing our capital expenditure guidance from $70-$75 million to $95-$100 million to reflect the Melrose Park property purchase and Suitland campus spend. Q: How is the company's high school recruiting strategy evolving, and what impact is it having on starts?A: Scott Shaw (CEO and President): We made a concerted effort to overhaul and expand our high school recruiting team last summer. Historically, about 20% of our students come directly from high school, and we saw an opportunity to grow this. We expect high school starts in the third quarter to be up more than 15%, contributing to our robust August start class. We expect even more growth next year as the team builds stronger relationships with students, parents, and guidance counselors. Q: Can you discuss the competitive landscape, particularly regarding competition from employers hiring directly and offering apprenticeship programs?A: Scott Shaw (CEO and President): We have not seen any material impact from employer-sponsored apprenticeship models. While we are having more discussions with employers about supporting students financially, the demand for our graduates remains incredibly strong. We believe the overall marketing spend by competitors and other industry players actually helps raise awareness for the skilled trades, which ultimately benefits us due to the massive shortage of skilled workers. Q: What is driving the revenue growth of 22.4% when student population growth was only 14.5%?A: Brian Meyers (CFO and Executive Vice President): The revenue growth was driven by a combination of factors. About half of the increase came from the benefit of a start class that shifted into the second quarter of 2025, which we pro-forma-ed for comparison, bringing in additional book and tool revenue. The other half was due to tuition increases, which average 2% to 3% across our programs. Q: Can you provide an update on the new campus developments and the company's expansion strategy?A: Scott Shaw (CEO and President): The Hicksville, New York campus remains on schedule to begin enrollment in Q4 2026, and the Rowlett, Texas campus should begin enrolling in Q1 2027. We are also finalizing a lease for a 90,000 square foot facility in Tempe, Arizona, our first campus in the state, expected to open by Q1 2028. Additionally, we are expanding our East Point, Georgia campus by 15,000 square feet to add about 500 students of capacity due to robust demand. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

What a time it’s been for Lincoln Educational. In the past six months alone, the company’s stock price has increased by a massive 114%, setting a new 52-week high of $53.30 per share. This was partly thanks to its solid quarterly results, and the run-up might have investors contemplating their next move. Is there a buying opportunity in Lincoln Educational, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free. Despite the momentum, we don’t have much confidence in Lincoln Educational. Here are three reasons why there are better opportunities than LINC, plus one stock we’d rather own. Revenue growth can be broken down into changes in price and volume (for companies like Lincoln Educational, our preferred volume metric is enrolled students). While both are important, the latter is the most critical to analyze because prices have a ceiling. Lincoln Educational’s enrolled students came in at 18,702 in the latest quarter, and over the last two years, averaged 13.7% year-on-year growth. This performance was underwhelming and suggests it might have to lower prices or invest in product improvements to accelerate growth, factors that can hinder near-term profitability. Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king. Over the last two years, Lincoln Educational’s demanding reinvestments to stay relevant have drained its resources, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 4.8%, meaning it lit $4.84 of cash on fire for every $100 in revenue. We like to invest in businesses with high returns, but the trend in a company’s ROIC can also be an early indicator of future business quality. Unfortunately, Lincoln Educational’s ROIC has decreased significantly over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between. Lincoln Educational doesn’t pass our quality test. Following the recent rally, the stock trades at 62.2× forward P/E (or $53.30 per share). This valuation tells us a lot of optimism is priced in - we think other companies feature superior fundamentals at the moment. We’d suggest looking at one of our all-time favorite software stocks. WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Lincoln Educational (NASDAQ:LINC) and the rest of the consumer discretionary - education services stocks fared in Q1. The Consumer Discretionary sector, by definition, is made up of companies selling non-essential goods and services. When economic conditions deteriorate or tastes shift, consumers can easily cut back or eliminate these purchases. For long-term investors with five-year holding periods, this creates a structural challenge: the sector is inherently hit-driven, with low switching costs and fickle customers. As a result, only a handful of companies can reliably grow demand and compound earnings over long periods, which is why our bar is high and High Quality ratings are rare. Education services companies provide postsecondary instruction, professional certifications, test preparation, and corporate training, both online and in-person. Tailwinds include lifelong-learning demand driven by rapid technological change, employer-sponsored upskilling programs, and growing acceptance of online credentials. Headwinds are substantial: heavy regulatory oversight—particularly around student-loan eligibility and enrollment practices—can abruptly alter business models. Reputational risk from scrutiny over student outcomes and debt burdens constrains marketing strategies. Competition from free or low-cost digital alternatives (MOOCs, employer-built academies) pressures pricing. The 5 consumer discretionary - education services stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.9%. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Established in 1946, Lincoln Educational (NASDAQ:LINC) is a provider of specialized technical training in the United States, offering career-oriented programs to provide practical skills required in the workforce. Lincoln Educational reported revenues of $144 million, up 22.5% year on year. This print exceeded analysts’ expectations by 5.7%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS and adjusted operating income estimates. “The first quarter financial and operating results illustrate the substantial progress made towards achieving our objective of providing the best education and training for in-demand careers while generating consistent, increasing returns to our shareholders,” said Scott Shaw, CEO and President. Lincoln Educational pulled off the biggest analyst estimate beat, fastest revenue growth, and highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 3.1% since reporting and currently trades at $46.14. Is now the time to buy Lincoln Educational? Access our full analysis of the earnings results here, it’s free. Founded in 1998 by Douglas L. Becker and based in Miami, Laureate Education (NASDAQ:LAUR) is a global network of higher education institutions. Laureate Education reported revenues of $272.6 million, up 15.4% year on year, outperforming analysts’ expectations by 2.2%. The business had a strong quarter with a beat of analysts’ EPS and EBITDA estimates. The market seems happy with the results as the stock is up 16.4% since reporting. It currently trades at $36.79. Is now the time to buy Laureate Education? Access our full analysis of the earnings results here, it’s free. Formed through the merger of Strayer Education and Capella Education in 2018, Strategic Education (NASDAQ:STRA) is a career-focused higher education provider. Strategic Education reported revenues of $305.9 million, flat year on year, falling short of analysts’ expectations by 1.2%. It was a slower quarter as it posted a significant miss of analysts’ EPS and revenue estimates. Strategic Education delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 7.4% since the results and currently trades at $77.44. Read our full analysis of Strategic Education’s results here. Formerly known as DeVry Education Group, Covista (NYSE:CVSA) is a global provider of workforce solutions and educational services. Covista reported revenues of $487 million, up 4.5% year on year. This number beat analysts’ expectations by 2.7%. It was a strong quarter as it also put up a solid beat of analysts’ adjusted operating income and EPS estimates. The stock is up 12.2% since reporting and currently trades at $131.27. Read our full, actionable report on Covista here, it’s free. Founded in 1986, Bright Horizons (NYSE:BFAM) is a global provider of child care, early education, and workforce support solutions. Bright Horizons reported revenues of $712.2 million, up 7% year on year. This result met analysts’ expectations. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ adjusted operating income estimates but full-year revenue guidance meeting analysts’ expectations. The stock is down 20.5% since reporting and currently trades at $64.86. Read our full, actionable report on Bright Horizons here, it’s free. Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure? These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Want to invest in winners with rock-solid fundamentals? Check out our Strong Momentum Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate. StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.

Find your next quality investment with Simply Wall St's easy and powerful screener, trusted by over 7 million individual investors worldwide. Lincoln Educational Services (LINC) has drawn fresh attention after its first quarter 2026 financial results significantly exceeded market expectations. This has highlighted operational strength and raised questions about how the stock’s valuation reflects this performance. See our latest analysis for Lincoln Educational Services. At a share price of $47.43, Lincoln Educational Services has seen short term share price pressure, with a 7 day share price return down 5.27% and a 30 day share price return down 4.18%, even as the 90 day share price return of 27.23% and very large 3 year total shareholder return suggest momentum over a longer horizon has been strong. This keeps the recent earnings beat and insider selling by Juniper Investment Company in sharp focus for investors assessing how much optimism is already reflected in the valuation. If the recent move in Lincoln Educational Services has you thinking about what else is moving, it could be a good time to scan 20 top founder-led companies With earnings beating expectations and the stock still trading below the US$57.40 analyst price target, Lincoln Educational Services looks interesting. However, the key question is whether this represents genuine undervaluation or whether the market is already pricing in future growth. At a last close of $47.43 against a narrative fair value of $57.40, Lincoln Educational Services is framed as undervalued, with that gap hinging on ambitious growth and margin assumptions. Read the complete narrative. Curious what sits behind that fair value jump? The narrative leans heavily on steady revenue expansion, higher margins, and a rich future earnings multiple. The exact mix of growth rates, profitability targets, and discounting assumptions is where the story really gets interesting. Result: Fair Value of $57.40 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, there is still real execution risk, particularly related to significant campus expansion spending and potential changes to U.S. federal student aid that could affect enrollment and margins. Find out about the key risks to this Lincoln Educational Services narrative. While the SWS DCF model suggests Lincoln Educational Services is trading about 17.9% below an estimated fair value of $57.80, the current P/E of 67.1x is far above the US Consumer Services industry at 16.6x, the peer average at 53.3x, and a fair ratio of 24.4x. That gap points to meaningful valuation risk if sentiment cools or growth expectations shift. How comfortable are you with paying such a premium for this earnings profile? See what the numbers say about this price — find out in our valuation breakdown. Seeing mixed signals so far? Take a moment to review the underlying risks and potential rewards yourself, then weigh up the 4 key rewards and 1 important warning sign. If this story has sharpened your thinking, do not stop here, widen your watchlist with a few focused stock ideas curated by the Simply Wall St Screener. Spot companies that combine attractive pricing with quality fundamentals by scanning 48 high quality undervalued stocks for potential value ideas before others catch on. Prioritise resilience by checking 63 resilient stocks with low risk scores and focus on businesses with lower risk scores that could help steady your overall portfolio. Hunt for lesser known opportunities with solid financial profiles through the screener containing 20 high quality undiscovered gems so you are not only looking where everyone else is. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include LINC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Lincoln Educational’s first-quarter results were well received by the market, with management pointing to strong student start growth and operational efficiency as key drivers. CEO Scott Shaw specifically highlighted that 19.5% growth in student starts was split between organic expansion at existing campuses and contributions from newer locations. Shaw attributed the momentum to rising demand for skilled trades education, noting, “We are clearly benefiting from the expanding interest across America in skilled trades training as employer demand for skilled workers continues to exceed supply.” Is now the time to buy LINC? Find out in our full research report (it’s free). Revenue: $144 million vs analyst estimates of $136.2 million (22.5% year-on-year growth, 5.7% beat) EPS (GAAP): $0.14 vs analyst estimates of $0.04 (significant beat) Adjusted EBITDA: $15.48 million vs analyst estimates of $12.39 million (10.8% margin, 25% beat) The company lifted its revenue guidance for the full year to $595 million at the midpoint from $585 million, a 1.7% increase EPS (GAAP) guidance for the full year is $0.78 at the midpoint, beating analyst estimates by 14.6% EBITDA guidance for the full year is $78 million at the midpoint, above analyst estimates of $74.04 million Operating Margin: 4.5%, up from 2.9% in the same quarter last year Enrolled Students: up 2,798 year on year Market Capitalization: $1.56 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Lucas John Horton (Northland Capital Markets) asked about the split between organic and new campus-driven growth, with CEO Scott Shaw stating that about half of student start growth is expected to remain organic for the year. Lucas John Horton (Northland Capital Markets) inquired about new program opportunities, such as aviation or robotics. Shaw responded that while plumbing is often suggested, the company is currently exploring areas like mechatronics and industrial automation as potential additions. Eric Martinuzzi (Lake Street Capital) questioned whether new facilities would expand health care offerings. Shaw said the company is open to adding health care programs at new campuses once profitability targets are met, highlighting recent progress in nursing. Eric Martinuzzi (Lake Street Capital) sought clarity on the recovery of the Paramus nursing program and state oversight. Shaw confirmed a full green light from regulators and noted NCLEX pass rates above state benchmarks. Griffin Boss (B. Riley Securities) asked if the expanded credit facility would speed up the campus rollout plan. Shaw replied that while the plan remains at two new campuses per year, the added flexibility could allow acceleration if suitable sites become available. In the coming quarters, our analyst team will be closely following (1) execution and enrollment trends at new and relocated campuses, especially as Hicksville and Roulette approach their opening dates; (2) the trajectory of health care program profitability and enrollment recovery, particularly for nursing; and (3) the company’s ability to leverage its expanded credit facility to accelerate growth. We will also monitor the impact of operational efficiencies on margins and student outcomes. Lincoln Educational currently trades at $49.10, up from $44.75 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

First quarter saw employer-sponsored program grants from Delta Dental, Matco Tools, The Gene Haas Foundation and more. Parsippany, NJ, May 13, 2026 (GLOBE NEWSWIRE) -- The Lincoln Foundation for Education Inc. (LiFE), a nonprofit 501(c)(3) organization, received nearly a quarter of a million dollars in first‑quarter donations from employers and partners including Matco Tools, Delta Dental, The Gene Haas Foundation, TechSource Tools, 7x24 Exchange’s Empire State Chapter, BrassCraft, and the Darren Drake Foundation. These contributions will fund scholarships and awards for new and current Lincoln Tech students nationwide. Additional support from WM and 7x24 Exchange will benefit Lincoln’s Student Sensitivity Fund, which provides food assistance, transportation support, and help with essential school-related expenses. “We are very grateful to our partners for supporting LiFE and helping Lincoln Tech students pursue in‑demand careers,” said Sheri D. Leach, President of LiFE. “Together, we’re helping meet the growing need for skilled professionals across the country. Together we are fueling futures and funding dreams.” Funding Highlights: $100,000 from Matco Tools for Automotive, Collision Repair, and Diesel students nationwide $75,000 from Delta Dental for Dental Assistant students in Iselin, NJ $15,000 from The Gene Haas Foundation for Advanced Manufacturing students in Mahwah, NJ $15,000 from TechSource Tools supporting students across all programs $15,000 from WM to help students manage unplanned expenses that can disrupt their education $10,000 from 7x24 Exchange’s Empire State Chapter for scholarships and Student Sensitivity Fund support $11,000 from BrassCraft for Computerized Manufacturing students in Grand Prairie, TX Grant from the Darren Drake Foundation supporting multiple skilled trades programs in Mahwah, NJ About The Lincoln Foundation for Education Inc. The Lincoln Foundation for Education, Inc. (LiFE) has a mission to provide financial aid and assistance, grants, scholarships, and awards to those individuals pursuing post-secondary education in technical or vocational education at LTI and other similar institutions. The ultimate objective is to provide industry and community organizations, who wish to support both the growth of individuals and the development of a qualified workforce, the ability to contribute aid to promising students who do not have sufficient financial resources to attend or graduate from a post-secondary vocational institution in a timely manner with minimal educational debt. LiFE sees higher education as a catalyst, an agent of change for individuals, families, communities, and local economies. We envision a community that recognizes the importance of educational attainment and assures positive outcomes are accessible to all regardless of economic circumstance. For more information, visit lincolnfoundationedu.org. CONTACT: Sheri D. Leach, VP Student Affordability The Lincoln Foundation for Education, Inc. (973) 766-9679 [email protected]