Legacy Education (NYSEAMERICAN:LGCY) reported sharp year-over-year gains in revenue and profitability for its second quarter of fiscal 2026, driven by higher new student starts, program expansion, and what management described as disciplined cost controls. Executives also highlighted progress on new program rollouts, a completed campus integration, and an active acquisition pipeline that they hope will yield a deal announcement before the end of the fiscal year.
Quarterly results driven by enrollment growth
CEO LeeAnn Rohmann said the company delivered “exceptional execution” in the quarter ended December 31, 2025, citing continued demand for healthcare education and Legacy’s focus on “scaling quality” and training “job-ready graduates.” Rohmann framed the opportunity around U.S. healthcare labor needs, referencing Bureau of Labor Statistics projections that healthcare occupations are expected to be the fastest growing major sector from 2024 to 2034, with about 1.9 million openings projected each year on average.
- Revenue increased 40.7% year over year to $19.2 million.
- Adjusted EBITDA rose 61.6% to $3.0 million, according to Rohmann (CFO Brandon Pope later stated adjusted EBITDA increased to $3.3 million).
- Net income increased 46% to $2.0 million, or $0.15 per diluted share (up from $0.10).
- Ending population grew 16.8% to 3,234.
Pope said revenue growth was driven by a 49.4% increase in new student starts to 593 from 397 in the prior-year quarter. He reported EBITDA increased 54.8% to $2.7 million, while adjusted EBITDA rose 61.6% to $3.3 million, with adjusted EBITDA margin improving to 15.8% from 13.7%.
First-half performance and expense trends
For the six months ended December 31, 2025, Legacy reported revenue of $38.6 million, up 39.6% from $27.6 million, driven by a 37.2% increase in new student starts to 1,710. Adjusted EBITDA increased 30.3% to $6.1 million, and net income rose 21.2% to $4.2 million. Diluted EPS was $0.30 compared with $0.29 a year earlier.
On expenses for the second quarter, Pope said educational services costs totaled $10.3 million, or 53.6% of revenue, compared with $7.5 million, or 54.9% of revenue, in the prior-year quarter. He attributed the margin improvement primarily to operating efficiencies and compensation, partially offset by increases in externship fees and non-cash compensation. General and administrative expenses were $6.1 million, or 31.8% of revenue, versus $4.3 million, or 31.9% of revenue, last year, with efficiencies in professional fees and insurance offset by increased bad debt expense. Pope said bad debt expense remained consistent at 5% of revenue.
Pope also discussed taxes, noting the effective tax rate for the quarter was 28.9%, up from 27.3% last year, and said the rate can fluctuate based on the timing of tax benefits tied to stock option exercises.
Program expansion, hybrid delivery, and accreditation updates
Management emphasized growth initiatives across program launches and delivery models. Rohmann said Legacy launched an MRI program at its Central Coast College campus with 33 new starts in the quarter and plans to begin enrolling students in a Cardiac Sonography program in the second half of the fiscal year. She also said the company received accreditation approval for a fourth Sterile Processing Program and has begun enrolling on all four campuses, with revenue impact expected in the second half. Surgical Technology programs were described as gaining momentum, with first cohorts set to begin in the second half.
Rohmann said the company began introducing a hybrid delivery model at Contra Costa Medical Career College in Surgical Technology and Diagnostic Medical Sonography, allowing Legacy to add an additional cohort start in both programs. During the Q&A, Rohmann said the hybrid format is full-time in terms of commitment, with theory delivered online and students coming to campus for lab a couple of days a week. She added that student demand for hybrid has been positive and that flexibility may open access for students who previously thought they could not participate due to work.
On campus updates, Rohmann said integration of Contra Costa Medical Career College is complete and enrollment has reached all-time highs of over 500 students. She also said the Integrity College of Health campus in Pasadena received a six-year grant of reaccreditation from ABHES, which she described as the longest grant period awarded by the accreditor.
Balance sheet, acquisition pipeline, and operational priorities
Pope said Legacy ended the quarter with $21.1 million in cash, working capital exceeding $27 million, and “little debt” totaling $600,000. He noted accounts receivable reserve rates increased to 11.5% from 9.5% last quarter due to the timing of quarterly write-offs after implementing a quarterly reserve analysis. Operating cash flow was $2.1 million, which he said reflected the timing of Title IV disbursements and performance-based compensation.
Looking ahead, Rohmann outlined strategic priorities that include sustaining enrollment growth through digital and referral channels, strengthening employer relationships and high school partnerships, and fully deploying four new allied health programs. She also said the company is pursuing additional regulatory approvals, including registered nursing authorization across multiple campuses and targeted surgical program specialties.
On acquisitions, Rohmann said the pipeline remains “robust,” with single- and multi-campus opportunities in California and adjacent markets, and reiterated a goal of announcing the next deal within the current fiscal year. In response to an analyst question, she said the company is evaluating opportunities both inside and outside California, with many of the opportunities being multi-campus. Rohmann also said Legacy brought back Joe Bartolome as Senior Vice President of Operations, describing him as a proven multi-campus operator who will oversee scalable growth, including potential branch locations and acquisition integration.
Rohmann added that the company is monitoring Department of Education rulemaking and potential impacts, while stating that accreditations and federal Title IV approvals remain intact and that Legacy’s focus on outcomes and transparency aligns with the direction of policy.
About Legacy Education (NYSEAMERICAN:LGCY)
The Company owns and operates the following career institutions that focus on real-life training by utilizing educational practices in different job markets: High Desert Medical College (“HDMC”), Central Coast College (“CCC”), and Integrity College of Health (“Integrity”). HDMC has three campuses located in Lancaster, California, Bakersfield, California and Temecula, California. HDMC offers the following certificate or degree programs: ultrasound technician (“UT”), vocational nursing (“VN”), VN Associate of Applied Science, Associate Degree of Nursing, nursing assistant, Magnetic Resonance Imaging (“MRI”) Associate of Applied Science, cardiac sonography, pharmacy technician, dental assisting, clinical medical assisting and medical administrative assisting programs (including medical billing and coding programs), veterinary assistant, UT Associate of Applied Science degree, phlebotomy technician and nursing assistant avocational courses, and a number of continuing education programs.
