Image source: The Motley Fool.
Date
Monday, Nov. 10, 2025 at 10 a.m. ET
Call participants
- Chief Executive Officer — Scott M. Shaw
- Executive Vice President and Chief Financial Officer — Brian K. Meyers
Need a quote from a Motley Fool analyst? Email [email protected]
Takeaways
- Q4 starts guidance -- The company is forecasting 15%-20% starts growth for the upcoming quarter, reflecting expected continued enrollment momentum.
- 2027 revenue outlook -- Updated long-term revenue guidance was raised to $600 million, now including all announced campus expansions and program additions.
- Healthcare segment mix -- Healthcare and Other Professions currently represent 20% of total student population, with LPN and Medical Assisting comprising more than 80% of this segment.
- Core healthcare program growth -- Licensed Practical Nurse (LPN) and Medical Assisting programs grew by 2% in the third quarter, offsetting declines in Massage and Culinary programs.
- New campus expansion -- The East Point, Georgia campus will add about 500 student capacity via a new buildout, and the upcoming Rowlett, Texas campus will support about 1,600 students at full capacity.
- Tuition increase -- Tuition was raised 3% or less, depending on program, with net average revenue per student growing approximately 4% due to combined effects of pricing, program mix, and book and tool revenue timing.
- Average campus ramp-up -- New campuses are anticipated to enroll 850-1,000 students within 18-24 months, with East Point reaching about 700-800 enrollments at that interval.
- Veteran enrollment -- About 5%-6% of current students are veterans using GI Bill benefits, a decrease attributed to degree program limitations in diploma/hybrid delivery models; degree-granting status in target states is underway to reverse this trend.
- Regulatory environment -- Management stated, "I do not see anything that's going to derail us from what our plans are and where we are going as a company" regarding changes in federal regulations.
- High school market opportunity -- Increased interest from high school graduates was highlighted as a focus area for expansion, especially in 2026 and beyond, supported by current investments.
Summary
Lincoln Educational Services (LINC +13.65%) reported continued growth in its core Transportation and Skilled Trades as well as Healthcare segments, with specific expansion in nursing programs contingent on regulatory approvals in several states. Management updated its long-term revenue guidance to $600 million to reflect additional campus developments and new program launches, including large-scale facilities capable of future expansions. Tuition and average revenue per student increased modestly, aided by annual pricing adjustments, program mix, and the timing of book and tool revenue recognition. The company outlined that veteran enrollment has declined due to accreditation constraints but plans to address this with degree-granting initiatives, particularly in New Jersey and New York. No significant regulatory threats were reported by management, who emphasized stable performance across markets and signaled further investments to capitalize on high school graduate demand in upcoming years.
- CEO Shaw said the company intends to complement that in the future with its end, pending regulatory approvals that could require 12-48 months to complete.
- CFO Meyers clarified that Massage and Culinary programs are not being pursued, leading to their contribution being phased out and segment growth relying mainly on LPN and Medical Assisting.
- Management said campus capacity planning now targets larger, 90,000 square foot facilities, including undeveloped space for future programs, based on rapid initial fill-up of newer locations.
- Skilled trades replication is described as more cost effective than automotive, leading to higher program proliferation in this area, although both segments report positive organic growth.
- CFO Meyers explained that the recent 4% average revenue per student increase includes "2%-3% is tuition increases" and benefits from program mix and book/tool revenue timing.
Industry glossary
- LPN (Licensed Practical Nurse): Entry-level nursing position requiring completion of a practical nursing program and certification.
- MA (Medical Assisting): Allied health professional trained to provide clinical and administrative support in healthcare settings.
Full Conference Call Transcript
Eric Martinuzzi: What kind of drove this strong performance? I mean, kind of a little bit from campus level or from program mix perspective. Just looking at the updated guide for 2025 starts, I mean, this implies nearly a 30% starts growth in Q4. So a little bit for the quarter, kind of what drove the beat and then the expectation in Q4 of that strong starts from a campus level or program mix perspective.
Scott M. Shaw: Right. So at the low end of the range, we would
Brian K. Meyers: That's actually a 15% stock growth for Q4. And at the high end of the range, it will be about 20% stock growth for Q4. So not exactly 30%, but with that being said, we are forecasting robust stock growth for Q4.
Eric Martinuzzi: Which is what we guided to before, just based off of the trends we are seeing, which we are seeing strong interest overall as well as the performance of our new campuses and programs. Okay. And then you guys did mention kind of building out some more square footage at East Point. Could we get a sense of kind of student this adds? Is this a meaningful expansion here? Just of trying to right size the space? Oh sure. So we are probably adding one frankly, about a 500 student capacity.
Brian K. Meyers: With this addition. Okay. Awesome. And then just lastly on the
Eric Martinuzzi: Healthcare side, you guys talked about expanding to RN programs beyond just the LPN. I guess, you said in the near future, I guess, could you just walk us through the timeline of this or from a regulatory perspective, what needs to be done here? And then would that give you accreditation to offer these across all campuses or is it a state by state accreditation? Yes, it's a good question. So it is a long and it is state by state. Today where we have our LPN program, we are not degree granting. And in order to offer an RN, we have to become degree granting.
So we have applications in to become degree granting in, excuse me, New Jersey, New York, Connecticut. And so that process could take anywhere from twelve months to frankly forty-eight months, depending on the state. We are obviously pushing to make it happen as quickly as possible, but we know that our LPN students, a large percentage of them are going on to become RNs as well as naturally the RN career itself is the largest in the healthcare sector. And in these states and particularly New Jersey, it's one of the highest as a low greatest shortfall of nurses to population. So we feel really good about the opportunity.
It's the process of getting through the regulatory hurdles to get there. But we are also looking in certain other states where we have degree granting already but do not have an LPN program, we are evaluating putting an RN program there. But there's been nothing decided as of yet. Okay. Got it. Awesome. Well, thanks for the color there and congrats again on a nice quarter guys. Great. Thanks. Appreciate it. One moment for our next question.
Operator: Our next question comes from Eric Martinuzzi with Lake Street Capital Markets. Your line is open.
Eric Martinuzzi: The 2027 new guide I just wanted to make sure I am apples to apples with the old guide. Think the $550 million excluded
Brian K. Meyers: Atlanta Houston and then the program
Operator: Expansions
Brian K. Meyers: At
Operator: Levittown and Nashville.
Brian K. Meyers: Can you clarify that? Go ahead, Brian. Yes. So no, it always included
Scott M. Shaw: It did not include Houston because when we first put that out, Houston was not announced yet. Really only included for new campuses, the East Point. So it included revenue from East Point. Now the $600 million that includes everything announced as of today.
Brian K. Meyers: For revenue.
Eric Martinuzzi: Okay. So that would be assuming
Scott M. Shaw: Hicksville and Rowlett are
Operator: Online
Brian K. Meyers: They would contribute towards that.
Eric Martinuzzi: $600 million. Okay. Right. Because Rowlett coming online '27 correct. Okay. All right. And then the decline in the hop starts, you have
Scott M. Shaw: Clarified that was tied to the
Brian K. Meyers: Premise and we are going to get the green light for premise in 2026. And then the massaging culinary
Scott M. Shaw: Is kind of, we are choosing not to pursue those.
Eric Martinuzzi: At what point do we get back to
Brian K. Meyers: Kind of organic positive growth? And were we
Scott M. Shaw: Positive ex the Paramus and Massage and Culinary here in Q3?
Eric Martinuzzi: Yes. So as I mentioned, the two core programs which represent more than 80% of the students in healthcare are LPN and medical assisting. And those two programs grew at 2%.
Scott M. Shaw: In the third quarter.
Eric Martinuzzi: I would anticipate next year that we should be positive again, especially with the opening of nursing at our Paramus campus. So in 2026, certainly those two programs will continue to grow.
Brian K. Meyers: Got it. Thanks for taking my questions.
Eric Martinuzzi: Yes, no problem Eric. Thanks.
Operator: One moment for our next question. Our next question comes from Raj Sharma with Tech Capital. Your line is open.
Rajiv Sharma: Hi. Thank you for taking my questions. Congratulations on
Scott M. Shaw: Solid results again, given where some of the other players in the education space are talking about. So
Rajiv Sharma: So it seems like on healthcare starts, there's a lot of noise. There are programs that are going out, there are programs that are coming back in. And I know that so what
Scott M. Shaw: What starts and what kind of growth do you expect? Know you just said about 2% Is that overall your other noise kind of goes away in the healthcare arena?
Rajiv Sharma: And now you are left with LP and can you talk about
Brian K. Meyers: Just ongoing
Rajiv Sharma: In the next couple of years what should we expect from the healthcare and nursing segment? Sure. So
Scott M. Shaw: Again, let's just put this all in perspective. Today, the healthcare and other segment is 20% of our population. So the bulk of what we are doing all in the automotive and skilled trades and those are the programs today that we are replicating. As we said in the call, the core programs in healthcare LPN and MA are still growing. We would anticipate that to continue into the future. We are going to complement that in the future with our end. But again, we are too early in the game to say where things are going.
All I can share with you is that all of our guidance and all the information that we are sharing incorporates all these changes that are taking place. And the overall message is that our business is very, very robust and our growth rates will reflect that. I do not know if that helps you. Yes, got it. Thanks Scott. And then just following on
Rajiv Sharma: I know Brian had touched on the guidance for fiscal twenty-six. So the way I read it is you are talking about the EBITDA guidance, the apples to apples would be the 65%, seven this year would have been 75-77 at least. For 20 Correct.
Scott M. Shaw: Right. Are you saying anything about starts for next year revenue growth? Do you see anything
Brian K. Meyers: In the horizon on the horizon that would disrupt the current starch growth
Scott M. Shaw: For transportation or healthcare?
Rajiv Sharma: No. I mean, as I think we said in our remarks, things are frankly very robust, have been very steady. And we are seeing just strong conversions and strong interest. Both also as we said from the adult market and the high school market. And I will just highlight that the high school market is seeing increased interest and that's an exciting opportunity for us and we are going to capitalize on that more so in 2026 given investments we are making today and then that will even grow even more I believe into 2027.
Brian K. Meyers: Got it.
Scott M. Shaw: Great. And then just lastly,
Rajiv Sharma: On the regulatory horizon, there's anything that
Brian K. Meyers: Any sort of developments that we should be on the lookout
Rajiv Sharma: For? I mean anything happening in the negotiated rulemaking
Scott M. Shaw: That we should be on the watch out for?
Rajiv Sharma: Sure. There's nothing that I am aware of that affects Lincoln Tech. That's out there. Obviously, have to stay on top of it, who's Things change in this environment. Very quickly. But as of right now, Raj, I do not see anything that's going to derail us from what our plans are and where we are going as a company.
Brian K. Meyers: Got it. Great. Thank you so much. Taking my questions. Again, on the beaten race.
Rajiv Sharma: Thanks. We appreciate that.
Operator: One moment for our next question. Our next question comes from Steven Frankel with Rosenblatt Securities. Your line is open.
Steven Frankel: Good afternoon. Thank you.
Scott M. Shaw: What
Brian K. Meyers: Did you learn from Eastpoint that
Scott M. Shaw: Maybe you are going to change as you open this new, campus in Are there are the anything that you take away from the early days of East Point that says, well, maybe we could do these things to get an even faster start?
Steven Frankel: Yes. I think that the biggest thing we took away is we made Eastpoint I'll say, very efficient. It was less than 60,000 square feet. And it filled up so quickly that in planning our next campuses we already realized that we should be looking at large square footage. So as our more recent campuses, even our relocations, Philadelphia is at 90,000 Houston is at around 90,000 and as we will be around 90,000. And I'll also highlight that within that 90,000, we've about 10,000 to 12,000 of undeveloped space for future programs.
So we just decided given the success that we were seeing that we should build facilities that could accommodate more in those local markets as well as build in some opportunity for future expansion opportunities for us. So that's the biggest lesson. The others are operationally, we opened a new campus in about eighteen years. Up before our campuses open up. Mean, Point was a market where we already had a presence with our campus in Marietta. Houston is a market where our name isn't as well known. So we are spending a little bit more to make it well known, but we are starting to see similar results as in East Point.
So things are going well and we constantly learn as we open up new programs and replicate in each market.
Brian K. Meyers: Great. And then from a
Steven Frankel: 3,000 foot view, have you seen any material
Scott M. Shaw: Decline in interest for legacy auto diesel programs
Brian K. Meyers: Or does that continue to be a healthy portion of the scope trade mix?
Steven Frankel: We are still seeing positive growth, but certainly the skilled trades are growing faster at this point. Things fluctuate. Obviously, if you look at our numbers overall or I would say we've replicated the skill trades the most simply because it's the most cost effective for us to do that. So we have more skilled trades programs today than we have auto programs. But we are still seeing, as I've mentioned, our organic growth has been
Scott M. Shaw: Frankly
Steven Frankel: Very strong due to improvements in the Lincoln 10, and due to increased marketing efforts to get the word out and frankly the receptivity that's out there. So skilled trades are definitely growing more for Lincoln than auto. But we are seeing positive growth in frankly all segments.
Brian K. Meyers: Great. Thank you, Scott.
Operator: One moment for our next question. Our next question comes from Griffin Taylor Boss with B. Riley Securities. Your line is open.
Griffin Taylor Boss: Hi, good morning. Thanks for taking my questions. So start off, you can sort of back out an average tuition per student. That came in very strong in the quarter. Think Brian mentioned something about structurally higher tuition, curious if you could expand on that as
Brian K. Meyers: Is this higher average tuition per student, just pricing? Or is it also program mix?
Scott M. Shaw: It's a good question. For the quarter, got the benefit of timing of books and tools. I think I might have mentioned that in my prepared remarks. And also, when we give out tools, we earn the revenue when it was given out, but we also have the expense. So that big start that happened at July 1, we did have pickup in revenue there, but also we have an offsetting expense on that as well. So we benefited from that
Brian K. Meyers: Q3 as well.
Griffin Taylor Boss: But just to be clear, we raised tuition 3% or less. It varies by program and that happens just once a year. So usually at the beginning of the year. So the changes that Brian's mentioning are either could be somewhat program mix or as he said, we got the benefit of all these starts and so one student start we book a lot of the books and tools revenue at that point. So that can distort it slightly.
Brian K. Meyers: Right. Because overall, it was about 4%. So as Scott was saying, about I would say, 2% to 3% is tuition increases. We do benefit from a little bit of our program mix, which was slightly higher. With our starts, but then some of it was due to the book and tool revenue.
Griffin Taylor Boss: Got it. That's great color. Thank you so much. And just last one for me. Can you remind us what maybe the average ramp up period is for new campus? Obviously, you talk a lot about revenue and EBITDA expectations, but you mentioned the new Rowlett campus will have 1,600 student capacity. What's the how long does it take you to fill those seats? When you open up a campus, do you expect to have a certain amount of capacity initially that maybe increases over time? How do you think about that?
Scott M. Shaw: Sure. So I mean, just looking at East Point as an example, obviously a very strong performer for us. Within the first eighteen months, it has about 700,000 to eight students. We would anticipate that our other campuses will perform similarly in the first eighteen to twenty-four months. When we say it has about 1,600 student capacity, to get our return on investment that we are looking for, we do not need that frankly. We are basing that off of closer to let's say eight fifty to maybe 1,000 students. So I hope that helps you.
Griffin Taylor Boss: Yes, absolutely. Thank you, Scott. Thank you, Brian for taking my questions. Appreciate
Brian K. Meyers: No problem. Thanks.
Operator: One moment for our next question. Next question comes from Alexander Peter Paris with Barrington Research. Your line is open.
Alexander Peter Paris: Hey, guys. Just a quick follow-up. I meant to ask on the previous. In light of Veterans Day tomorrow you mentioned. Just curious what is Lincoln's overall military exposure as a percent of total enrollment and what is the character of that military enrollment? Is it military tuition assistance for duty? Or is it Veterans Administration, GI Bill?
Scott M. Shaw: Yes, it's a good question. Well, as you as a reminder, we started as a military training organization by our founder to train vets from World War II. And unfortunately, we are down to only about 56% of our students today are military. And part of that is because when we move to the Lincoln 10 model, you are not allowed to provide housing benefits to our military through the GI Bill if it's a diploma hybrid program unless you have a degree program. So our initiative to get degrees in a number of states where we do not have degrees will enable us to start re-enrolling veterans in that area.
So it is they're all using their GI benefits, so these are people that have left the military. And we would anticipate as we get, as I said degree granting, particularly in the states of New Jersey and New York that will start seeing frankly a growth again in our veteran population.
Alexander Peter Paris: Okay. So to be clear, it's veterans and that's what I thought. You do not do a material amount of active duty?
Scott M. Shaw: Yes.
Alexander Peter Paris: Correct. And the veterans. Again, that's
Scott M. Shaw: And GI Bill funds are flowing. Had been an issue for another one of your competitors American public, yes.
Alexander Peter Paris: Yes, that is correct. That's what I tried to say in my remarks. Mean for us for Lincoln, for what we do, who we serve, the shutdown and the changes that are taking place in Washington, have not negatively impacted our business and that's why we are able to get those strong results that we've been achieving today and how that's why I believe that we'll continue to achieve
Scott M. Shaw: These strong results going forward.
Alexander Peter Paris: Excellent. Keep up the good work. That's all I had.
Scott M. Shaw: Thanks, Alex. Appreciate it.
Operator: And I'm not showing any further questions at this time. I'd like to turn the call back over to Scott Shaw for any closing remarks.
Scott M. Shaw: Great. Thank you, operator, and thank you all for joining us today as we reviewed our continued progress, growth and increased financial guidance for the full year. As more and more high school graduates and adults seek a time-efficient, cost-effective path to develop skills that can serve them a lifetime, interest in our programs continues to grow. And with our student start growth, new campus development, and increasing level of operating efficiencies, we believe we have numerous opportunities to generate increasing levels of shareholder returns over several years.
Our success is only made possible by the commitment and dedication of our staff to our students and their success, and we will continue to share with the world that middle skills careers like the ones we offer lead to rewarding, productive, and fulfilling careers that our nation desperately needs. I'd like to thank our shareholders for their support and our entire team for their dedication to achieving our goals. I hope to see you during my time on the road visiting shareholders, employers, and politicians as I share the Lincoln Tech story. Thank you all again. And have a great day. Bye-bye.
Operator: Ladies and gentlemen, this does conclude today's presentation. Thank you for your participation. You may now disconnect and have a wonderful day.