Detailed narrative
Fiscal 2026 Performance Highlights
Fiscal 2026 was a record year for Legacy Education, with total revenue increasing 24.8% to $80.1 million. Organic revenue from pre-existing brands grew 16.5%, contributing $9.9 million of the $15.9 million annual increase. The company successfully integrated Contra Costa Medical Career College, which added $6 million in revenue compared to the prior year. New student starts rose 9% to 3,483, and the active student population increased 8.9% to 3,377, with pre-existing brands seeing an 8.1% increase to 2,869 students.
Operating Leverage and Margin Expansion
The fourth quarter demonstrated significant operating leverage, with revenue growing 12% to $20.1 million, while adjusted EBITDA increased 30.6% to $3.1 million. This resulted in a 220 basis point expansion in adjusted EBITDA margin to 15.5%. The company achieved this by disciplined spending, marketing efficiency, and active management of receivables, allowing earnings to grow faster than revenue even with continued investment in future capacity.
Strategic Growth Pillars
Legacy Education is pursuing growth through three main pillars: expanding existing programs and campuses (e.g., Surgical Technology at High Desert Medical College, Sterile Processing Technician Program ramp-up, vocational nursing entrance requirement changes), adding new capacity and geography (e.g., Houston branch opening in November 2026, expanded capacity at High Desert Medical College, new program approvals at Contra Costa Medical Career College), and strategic expansion via acquisitions supported by stronger operating infrastructure.
Financial Strength and Capital Allocation
The company ended fiscal 2026 with a strong financial position, including $22.7 million in cash and cash equivalents, $33.4 million in working capital, and minimal debt. This financial flexibility supports organic growth initiatives and active evaluation of acquisition opportunities, with a disciplined capital allocation framework focused on student opportunity, employer demand, academic quality, scalable capacity, and long-term financial returns.
Accreditation and Infrastructure
Legacy's growth platform is supported by strong institutional accreditation, with Integrity College of Health receiving a six-year grant from ABHES and Contra Costa Medical Career College a five-year grant from ACCSC. The company is also building its business intelligence capabilities to enhance visibility and accountability across enrollment, retention, academic execution, and other key operating measures as the organization scales.
New Student Starts Trend
While overall FY26 new student starts increased 9%, the company experienced a 12% year-over-year decline in Q3 and a 4% decline in Q4. Management attributes this to the maturation of new programs like Surgical Technology and Sterile Processing, and changes in vocational nursing entrance requirements, expecting a rebalancing as these programs mature and the pipeline builds.