Lincoln Educational Services Q4 Earnings Call Highlights

Lincoln Educational Services (NASDAQ:LINC) executives highlighted strong fourth-quarter and full-year 2025 results, continued enrollment momentum, and an expanded campus growth pipeline during the company’s earnings call. Management also introduced 2026 guidance and discussed demand trends across skilled trades education, employer partnerships, and high school-focused recruiting initiatives.

Management cites sustained demand for skilled trades and continued start growth

CEO Scott Shaw said Lincoln is benefiting from broad-based interest in skilled trades training as demand for skilled workers continues to exceed supply and as prospective students weigh alternatives to traditional four-year degrees. Shaw also pointed to concerns about artificial intelligence’s impact on some white-collar roles and growing awareness of “robust salaries” in skilled trades as factors supporting demand.

Shaw said student placement outcomes for Lincoln graduates in fields such as HVAC, electrical, automotive technician, welding, and healthcare “hit recent highs” and “show no signs of letting up.”

For the fourth quarter, Shaw reported student start growth of 15.7%, marking the company’s 13th consecutive quarter of year-over-year start growth. He said starts at programs operating for more than one year grew 4% on a same-campus, same-program basis, and described core growth as a major contributor to higher profitability during the quarter.

Campus relocations and greenfield growth broaden footprint

Shaw described 2025 as “the most ambitious expansion” in the company’s recent history, including major relocations and a new market entry:

• Nashville, Tennessee: Lincoln relocated its long-operating Nashville campus to a new facility and introduced HVAC and electrical programs to the market, renaming the campus Nashville Auto Diesel College. The company plans to host an Investor Day at the new Nashville campus on March 19.
• Philadelphia area: Lincoln relocated its Philadelphia automotive technician program to a 90,000-square-foot facility in Levittown, Pennsylvania, and added newly opened HVAC, electrical, and welding programs alongside automotive training.
• Houston, Texas: The company opened a new campus in Houston, with classes beginning in late September. Shaw said early enrollments at campuses opened in 2025 are meeting or exceeding expectations and are expected to support continued start growth in 2026.

Looking ahead, management said Lincoln aims to initiate two new campus projects per year. For 2026, the company is developing new campuses in Hicksville, New York (targeted to open in the fourth quarter of 2026) and Rowlett, Texas (expected to begin classes in the first quarter of 2027). Both are planned to offer HVAC, electrical, automotive technician, and welding programs.

Shaw also provided an update on the East Point, Atlanta campus opened in 2024. After demand exceeded initial expectations, the company signed a lease in 2025 to build out an additional 10,000 square feet of space and expects to complete the expansion in 2026.

Program mix: strong transportation and skilled trades growth; healthcare expected to rebound

CFO Brian Meyers said fourth-quarter comparisons exclude the company’s “transitional segment,” which consisted of the former Summerlin Las Vegas campus sold in late 2024.

Meyers said transportation and skilled trades—about 80% of student population—generated start growth of 23.4% in the quarter, including organic growth of approximately 7.5%. Healthcare and other professions (about 20% of population) saw starts decline 2%, which management said was in line with expectations and reflected the exit of the culinary program in December 2024.

In Q&A, management said enrollments for nursing students at the Paramus campus resumed recently following a pause in new nursing starts that had weighed on healthcare trends. Shaw said Paramus ended 2025 with “maybe 40 students” in the LPN program versus more than 250 students before the enrollment pause, and he said he anticipates that enrollment will “start ramping up again.”

Shaw also said Lincoln has been exiting programs that do not provide the strongest return on investment, including hospitality-related offerings such as culinary, as well as cosmetology. He added that recent Department of Education data related to gainful employment thresholds showed that all of Lincoln’s programs “clearly pass the threshold.”

Financial results: revenue growth, margin expansion, and improved bad debt trends

For the fourth quarter, Meyers reported revenue increased $25.2 million, or 21.4%, to $142.9 million, driven by a 17% increase in average student population and a 3.7% increase in revenue per student. Lincoln enrolled nearly 4,000 new students during the quarter.

Average student population increased 17%, while year-end population rose nearly 15% to about 17,000 students, representing more than 2,200 additional students versus the prior year.

Total operating expenses were $125.1 million, up $19 million, reflecting higher costs to support a larger student population and growth initiatives. Depreciation expense increased $3.5 million due to recent capital investments. Meyers noted operating leverage in several expense lines, including improvements in education, service, and facility expenses (excluding depreciation) to 33% of revenue from 34.7%, which he attributed to instructional efficiencies from the company’s hybrid teaching model.

SG&A improved to 49.8% of revenue from 51.6%, supported in part by lower bad debt expense as a percentage of revenue, which declined to 10.9% from 13.1%. Meyers attributed the bad debt improvement to enhancements to the financial aid process and stronger collections.

Adjusted EBITDA increased 51.2% to $29.1 million (including the transitional segment), with adjusted EBITDA margin expanding more than 400 basis points to 20.4%. Net income increased to $12.7 million, or $0.40 per diluted share, while adjusted net income was $15.8 million, or $0.50 per diluted share on 31.4 million diluted shares outstanding.

For the full year, revenue increased 19.7% to $518.2 million, driven by 17.9% growth in average student population. Total starts rose to approximately 21,000, up 15.2%, with organic growth accounting for more than half of the increase. Adjusted EBITDA rose 60% to $67.1 million (including the transitional segment), and adjusted net income increased 64% to $28.4 million.

Operating cash flow was $59.3 million, more than double the prior year, and Lincoln ended 2025 with nearly $29 million in cash and about $90 million in total liquidity, with no debt outstanding.

2026 guidance and changes to adjusted EBITDA definition

For 2026, the company guided to:

• Revenue: $580 million to $590 million
• Adjusted EBITDA: $72 million to $76 million
• Net income: $20 million to $23 million
• Diluted EPS: $0.64 to $0.74
• Student start growth: 8% to 13%
• Capital expenditures: $70 million to $75 million

Meyers said the company is changing how it calculates adjusted EBITDA beginning in 2026. Historically, Lincoln excluded pre-opening costs and first-year net operating losses from new campuses, as well as pre-launch expenses from program replications. Starting in 2026, adjusted EBITDA will include those items and will “reflect only the add back of non-cash stock-based compensation.” Meyers said these previously excluded expenses totaled about $10 million in each of 2024 and 2025 and are expected to be similar in 2026, with the company planning to disclose expected and actual amounts each quarter for added transparency.

Meyers also said adjusted EBITDA growth is expected to outpace revenue growth in 2026 due to operating leverage, while net income growth is projected to lag due to higher depreciation. Depreciation is expected to increase to $33 million in 2026 from $20.8 million in 2025, reflecting capital investments tied to new campuses, relocations, and program expansions.

On margins, Shaw said he expects EBITDA margins to continue to increase by roughly 150 to 250 basis points per year as utilization rises, noting the company is around 60% capacity utilization and can potentially add capacity through additional shifts.

About Lincoln Educational Services (NASDAQ:LINC)

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.