Lincoln Educational’s second quarter showed notable operational progress, with management highlighting robust student start growth and expanding campus footprints as central drivers. CEO Scott Shaw pointed to nearly 22% student start growth and strong returns from investments in the Lincoln 10.0 hybrid teaching model, as well as successful program replications at new and relocated campuses. While management emphasized momentum in skilled trades programs and efficiencies from digital learning, they were cautious about underperformance in the healthcare segment, citing ongoing restructuring and a slower pace of investment.
Is now the time to buy LINC? Find out in our full research report (it’s free).
Lincoln Educational (LINC) Q2 CY2025 Highlights:
- Revenue: $116.5 million vs analyst estimates of $115.9 million (13.2% year-on-year growth, 0.5% beat)
- Adjusted EPS: $0.09 vs analyst estimates of $0.04 (significant beat)
- Adjusted EBITDA: $10.51 million vs analyst estimates of $9.27 million (9% margin, 13.4% beat)
- The company lifted its revenue guidance for the full year to $495 million at the midpoint from $490 million, a 1% increase
- EBITDA guidance for the full year is $62.5 million at the midpoint, above analyst estimates of $60.53 million
- Operating Margin: 2.5%, up from -1.1% in the same quarter last year
- Enrolled Students: 14,356, in line with the same quarter last year
- Market Capitalization: $601.4 million
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.
Our Top 5 Analyst Questions From Lincoln Educational’s Q2 Earnings Call
- Alexander Peter Paris (Barrington Research) asked about the flat student starts forecast for Q3 and acceleration in Q4; CFO Brian Meyers confirmed Q3 starts would be flat year-over-year due to a high comparison base, but Q4 is expected to return to previous growth levels.
- Rajiv Sharma (Texas Capital) questioned the profitability and future growth prospects of healthcare programs; CEO Scott Shaw explained restructuring efforts, the importance of achieving degree-granting status, and anticipated growth from nursing and related programs in 2026–2027.
- Lucas John Horton (Northland Capital Markets) inquired about which programs and campuses were driving student start outperformance; Shaw identified automotive, HVAC, electrical, and welding across new locations, with East Point highlighted for exceeding enrollment expectations.
- Eric Martinuzzi (Lake Street Capital Markets) asked about improved marketing efficiency; Shaw credited both better messaging and increased market awareness for driving a 13% reduction in marketing cost per start and improved conversion rates.
- Lars Munson (Tibor Capital) pressed on capital returns and investment metrics; CFO Brian Meyers cited the East Point campus’s rapid profitability and projected EBITDA as evidence of strong returns, noting that newer campus investments should deliver increased revenue and cash flow in coming years.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace and profitability of new campus openings and program launches, (2) progress in restructuring and scaling healthcare programs as regulatory milestones are achieved, and (3) ongoing marketing efficiency and student conversion rates. Additionally, we will track whether recent capital investments deliver the expected improvements in margin and returns, particularly as more campuses reach maturity.
Lincoln Educational currently trades at $19.20, down from $23.74 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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