This article first appeared on GuruFocus .
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Full-Year Revenue:Increased 24.8% to $80.1 million from $64.2 million.
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Pre-Existing Brand Revenue:Grew 16.5% year over year, contributing $9.9 million of the $15.9 million annual revenue increase.
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Contra Costa Contribution:$6 million increase from a full year in fiscal 2026 versus six months in fiscal 2025.
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Q4 Revenue:Increased 12% to $20.1 million from $17.9 million; pre-existing brands grew 11.3%.
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Full-Year Operating Income:Increased 18.3% to $11.8 million from $10 million; operating margin 14.8%.
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Q4 Operating Income:Increased 31.3% to $2.6 million from $2 million; operating margin expanded 190 basis points to 13% from 11.1%.
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Full-Year Net Income:Increased 21.3% to $9.1 million from $7.5 million.
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Q4 Net Income:Increased 53.3% to $1.9 million from $1.2 million.
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Full-Year Diluted EPS:Increased 11.9% to $0.66 from $0.59.
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Q4 Diluted EPS:Increased 44.4% to $0.13 from $0.09.
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Full-Year EBITDA:Increased 19.4% to $12.5 million from $10.4 million.
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Full-Year Adjusted EBITDA:Increased 24.1% to $13.6 million from $11 million; adjusted EBITDA margin 17%.
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Q4 EBITDA:Increased 32.6% to $2.8 million from $2.1 million.
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Q4 Adjusted EBITDA:Increased 30.6% to $3.1 million from $2.4 million; margin expanded 220 basis points to 15.5% from 13.3%.
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Educational Services Expense:Full year $42.9 million, or 53.6% of revenue, versus $34.2 million, or 53.4% of revenue.
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General and Administrative Expense:Full year $24.2 million, or 30.2% of revenue, versus $19.1 million, or 29.8% of revenue; Q4 $5.9 million, or 29.4% of revenue.
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Marketing Expense:Full year 7.4% of revenue; Q4 $1.2 million.
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Bad-Debt Expense:Full year $4 million, or 5% of revenue; Q4 $1 million, or 5% of revenue.
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Effective Tax Rate:Q4 27.3% versus 45.6% prior year.
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Operating Cash Flow:$4 million for fiscal 2026.
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Capital Expenditures:$1.3 million versus $844,000 in fiscal 2025.
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Cash and Cash Equivalents:$22.7 million at June 30, 2026, versus $20.3 million a year earlier.
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Working Capital:$33.4 million; current assets $45.8 million; current liabilities $12.4 million.
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Total Assets:$78.5 million; total liabilities $25.8 million.
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Stockholders' Equity:$52.8 million.
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Debt:Minimal at year end; no revolving line of credit or other debt facilities.
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Net Accounts Receivable:$19.9 million at year end.
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New Student Starts:Increased 9% to 3,483.
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Ending Student Population:3,377 students, up 8.9% from fiscal 2025; pre-existing brands up 8.1% to 2,869 students.
Release Date: September 24, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Fiscal 2026 revenue increased 24.8% to a record $80.1 million, with 62% of the increase driven by organic growth in pre-existing brands.
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Fourth-quarter operating leverage was evident: revenue rose 12%, adjusted EBITDA surged 30.6%, and adjusted EBITDA margin expanded 220 basis points to 15.5%.
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Student population grew 8.9% to 3,377, with active population in pre-existing brands up 8.1%, indicating underlying momentum.
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Strong balance sheet with $22.7 million in cash, $33.4 million working capital, $52.8 million stockholders' equity, and minimal debt, providing flexibility for growth investments.
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Multiple growth initiatives underway, including expansion of Surgical Technology and Sterile Processing programs, a new Houston branch campus, and active evaluation of accretive acquisitions.
Negative Points
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New student starts declined 4% year over year in the fourth quarter, following a 12% drop in the prior quarter, signaling enrollment challenges.
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Bad-debt expense remained elevated at 5% of revenue for both the quarter and full year, reflecting ongoing credit risk.
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Operating cash flow was only $4 million for fiscal 2026, impacted by growth in accounts receivable, which reached $19.9 million.
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Educational-services and G&A expenses increased, with G&A rising to 30.2% of revenue, partly due to public-company infrastructure costs.
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The Houston campus opening and program expansions are subject to regulatory and accreditation approvals, creating timing uncertainty.
Q & A Highlights
Q: Mike Grondahl of Northland Securities asked about student start trends, noting that third-quarter starts were down 12% year over year and fourth-quarter starts were still down 4% year over year. When does management expect starts to return to year-over-year growth, and what will drive it? A: CEO LeeAnn Rohmann said leads are not the issue. The recovery is tied to program maturity, specifically Surgical Technology ramping up, Sterile Processing Technician continuing to scale, and the new Vocational Nursing entrance requirements. She noted Surgical Technology is only now rolling out at the third HighDesert campus in the first quarter of fiscal 2027 due to lab and equipment readiness, and she expects starts to balance out as these programs mature.
Q: Mike Grondahl asked whether the September quarter could look similar to June, with improvement from there. A: CEO LeeAnn Rohmann agreed, saying that is "spot on." She attributed the pattern to the timing of starts based on program calendars and program readiness.
Q: Mike Grondahl asked how investors should think about the potential opening and ramp of the planned Houston branch campus. A: CEO LeeAnn Rohmann said that because Houston will be a branch of Central Coast College, Legacy expects to launch multiple programs at once upon approval, which is targeted for November 2026. The Houston location will offer all programs currently approved at Central Coast except nursing and the certified nurse assistant program. She said Legacy is already building its presence in what she described as a strong market that needs its programs.
Q: Jeffrey Cohen of Ladenburg Thalmann asked about the potential student population at the Houston location over the coming one to two years, both in-house and virtual. A: CEO LeeAnn Rohmann said that given the market and the number of approved programs that will be rolled out, Legacy is comfortable projecting between 400 and 600 students at the Houston location after a one- to two-year period.
Q: Jeffrey Cohen asked whether Houston is the specific target of interest or whether Texas as a whole could be a target for broader expansion. A: CEO LeeAnn Rohmann said Legacy is learning about Texas and sees the state as an opportunity to expand beyond what it has started, though the response was partially obscured by technical difficulties.
Q: Jeffrey Cohen asked CFO Brandon Pope for commentary on operating expenses and margin expectations for fiscal 2027 as the business continues to grow. A: CFO Brandon Pope said Legacy expects margins to continue to increase and to grow accretively, with most of that improvement likely in the second half of fiscal 2027.
Q: Mike Grondahl asked about the status of acquisitions, noting management said opportunities are "actively under review," and whether that means Legacy is getting closer to a deal. A: CEO LeeAnn Rohmann said she has expanded as much as she can on the topic but confirmed Legacy is active and engaged in acquisitions and actively reviewing opportunities. She said the company looks forward to announcing something once a target meets its criteria, is accretive, and is a good fit.
Q: Analysts asked about the drivers of the fourth quarter's operating leverage, in which revenue rose 12% while total costs and expenses rose only 9.6%. A: CFO Brandon Pope said the quarter benefited from disciplined spending, marketing efficiency, and active management of receivables. Educational-services expense rose on instructional payroll, books and supplies, externship costs, and facility and repair costs to support a larger student population and capacity for future programs, while G&A was 29.4% of revenue and bad-debt expense was 5% of revenue.
Q: Analysts asked about the composition of fiscal 2026 revenue growth and how much came from organic operations versus the Contra Costa acquisition. A: CEO LeeAnn Rohmann and CFO Brandon Pope said revenue rose 24.8% to $80.1 million from $64.2 million. Of the $15.9 million increase, $9.9 million, or roughly 62%, came from pre-existing brands, which grew 16.5%, while $6 million reflected a full year of Contra Costa Medical Career College in fiscal 2026 versus six months in fiscal 2025.
Q: Analysts asked about the company's financial position and capacity to fund growth entering fiscal 2027. A: CFO Brandon Pope said Legacy ended fiscal 2026 with $22.7 million in cash and cash equivalents, $33.4 million in working capital, $52.8 million in stockholders' equity, and minimal debt with no revolving line of credit or other debt facility. He said this gives Legacy flexibility to fund planned growth while managing the pace of investment against approval timing, enrollment opportunity, and expected long-term returns.
Q: Analysts asked about the growth pillars management sees entering fiscal 2027. A: CEO LeeAnn Rohmann outlined three pillars: expanding the existing platform, including Surgical Technology and Sterile Processing Technician programs and Vocational Nursing entrance requirement changes; adding capacity, programs, and geography, including the Houston branch and expanded HighDesert capacity; and pursuing strategic expansion through acquisitions supported by stronger operating infrastructure and business intelligence.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
