Legacy Education Q3 FY 2025 Earnings Overview
Reflecting on a great quarter by Legacy Education (hard-to-model microcap write-up)
Legacy Education’s earnings have come out, and, to no surprise for my paying subscribers, the company did quite well—the stock is up 13.5% on the day as of my posting this. Let’s look at the quarter.
Third Quarter Fiscal 2025 Financial Highlights:
Revenue grew 50.7% to $18.6m
The number of new student starts increased by 70.7%
EBITDA of $3.8m and adjusted EBITDA of $3.9m
Net income of $2.8m (up 57% YoY)
Diluted earnings per share of $0.21 (only a 10% increase YoY due to the dilution by the IPO. The company itself doesn’t use a lot of dilution to finance acquisitions)
Student population of 3,245 (including Contra Costa Medical Career College ("CCMCC")), a 49.8% increase from the third fiscal quarter of 2024
The good (the quarterly call and financial report were both relatively short, so not that much info, but still some interesting information):
The company now has $17.33m of cash with under $1m of debt — lots of dry powder for acquisitions (more on that later).
Cash from operations grew 78.3% YoY.
“Our focus on allied health education continues to resonate in a market hungry and desperate for skilled professionals.“
The company is expanding hybrid learning capabilities → crucial for long-term scaling.
The Contra Costa acquisition seems to have been accretive (as I have analysed in my earlier write-up).
The company is actively looking at new M&A opportunities and seems to be in the talking stages with some of its potential targets.
Acquisitions continue to be seen as the main avenue of growth, in addition to some cost optimisations.
“We’re also launching new offerings in high-demand fields like sterile processing, surgical technician and EMT“.
Once approvals are obtained, the EMT program will be rolled out across more campuses; it’s currently only at Temecula.
This quarter, some growth came from extra added nursing and imaging classes (the management seems opportunistic to use bursts of high demand for specific programs to increase revenues).
Areas of slight concern & next steps