FULLTEXT DEL 3 AV 3
10-K – 2026-02-19 – prdo-20251231.htm
Number of shares
remaining available for
future issuances under
equity compensation
plans (excluding
securities reflected in
column (a))
Equity compensation plans approved by stockholders
212,077
(1)
$
11.43
3,256,589
(2)
Total
212,077
$
11.43
3,256,589
(1) Includes outstanding options to purchase shares of our common stock under the Company’s 2016 Incentive Compensation Plan ( the “2016 Plan”) .
(2) Includes shares available for future issuance under the 2016 Plan in addition to the number of shares issuable upon exercise of outstanding options referenced in column (a). In addition to stock options, the 2016 Plan provides for the issuance of stock appreciation rights, restricted stock and units, deferred stock, dividend equivalents, other stock-based awards, performance awards and units, or cash incentive awards. The amount in column (c) is net of 2.4 million shares underlying restricted stock units outstanding as of December 31, 2025, which will be settled in shares of our common stock if the vesting conditions are met and thus reduce the common stock available for future share-based awards under the 2016 Plan by the amount vested. These shares take into account the anticipated vesting levels based on projected attainment of performance conditions for performance-based restricted stock units and have been multiplied by the applicable factor under the 2016 Plan to determine the remaining shares available as of December 31, 2025. Additionally, there were less than 0.1 million shares underlying deferred stock units outstanding under the previous 2008 Plan which will be settled in shares of our common stock if the vesting conditions are met and do not affect the number of shares reflected in column (c) above.
See Note 13 “ Share-Based Compensation ” to our consolidated financial statements for more information regarding the Company’s share-based compensation.
The other information required by this item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with our 2026 Annual Meeting of Stockholders.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATE D TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with our 2026 Annual Meeting of Stockholders.
ITEM 14. PRINCIPAL ACCO UNTANT FEES AND SERVICES
The information required by this item is incorporated herein by reference to our definitive Proxy Statement to be filed in connection with our 2026 Annual Meeting of Stockholders.
63
PART IV
ITEM 15. EXHIBITS AND FINA NCIAL STATEMENT SCHEDULES
1. Financial Statements
The financial statements listed in the Index to Financial Statements on page 68 are filed as part of this Annual Report.
2. Financial Statement Schedules
The financial statement schedule listed in the Index to Financial Statements on page 68 is filed as part of this Annual Report. All other schedules have been omitted because the required information is included in the consolidated financial statements or notes thereto or because they are not applicable or not required.
3. Exhibits
The exhibits listed in the Index to Exhibits on pages 63- 66 are filed as part of this Annual Report.
ITEM 16. FORM 10-K SUMMARY
None.
64
INDEX TO EXHIBITS
Exhibit
Number
Exhibit
Incorporated by Reference to:
2.1
Asset Purchase Agreement dated March 8, 2019 among Trident University International, LLC, TUI Learning, LLC, Athena NewCo, LLC and Career Education Corporation
Exhibit 2.1 to our Form 8-K filed on March 12, 2019
2.2
First Amendment to Asset Purchase Agreement effective February 4, 2020 among Trident University International, LLC, TUI Learning, LLC, Athena NewCo, LLC and Perdoceo Education Corporation
Exhibit 2.2 to our Form 10-K for the year ended December 31, 2019
2.3
Agreement and Plan of Merger dated July 15, 2024 by and among Perdoceo Education Corporation, Lighthouse Merger Sub, Inc., University of St. Augustine Parent Corp. and APH GP LP, solely in its capacity as the Seller Representative
Exhibit 2.1 to our Form 8-K filed on July 16, 2024
3.1
Restated Certificate of Incorporation of Perdoceo Education Corporation (originally incorporated on January 5, 1994)
Exhibit 3.2 to our Form 8-K filed on December 18, 2019
3.2
Certificate of Amendment of the Restated Certificate of Incorporation of Perdoceo Education Corporation dated May 25, 2023
Exhibit 3.1 to our Form 8-K filed on June 1, 2023
3.3
Seventh Amended and Restated By-laws of Perdoceo Education Corporation effective January 1, 2020
Exhibit 3.3 to our Form 8-K filed on December 18, 2019
4.1
Form of specimen stock certificate representing Common Stock
Exhibit 4.1 to our Form 10-K for the year ended December 31, 2019
4.2
Description of Common Stock
Exhibit 4.2 to our Form 10-K for the year ended December 31, 2019
4.3
Credit Agreement dated as of September 8, 2021 among Perdoceo Education Corporation, the subsidiary guarantors from time to time parties thereto, the lenders from time to time parties thereto, and Wintrust Bank, N.A, as administrative agent and letter of credit issuer
Exhibit 10.1 to our Form 8-K filed on September 13, 2021
4.4
First Amendment to Credit Agreement entered into as of April 1, 2022, among Perdoceo Education Corporation, the guarantors and the lenders under the Credit Agreement and Wintrust Bank, N.A., as administrative agent and letter of credit issuer
Exhibit 10.1 to our Form 10-Q for the period ended March 31, 2022
4.5
Second Amendment to Credit Agreement entered into as of January 23, 2024, among Perdoceo Education Corporation, the guarantors and the lenders under the Credit Agreement and Wintrust Bank, N.A., as administrative agent and letter of credit issuer
Exhibit 10.1 to our Form 8-K filed on January 23, 2024
*10.1
Career Education Corporation 2008 Incentive Compensation Plan (“2008 Plan”)
Exhibit 10.1 to our Form 8-K filed on May 16, 2008
*10.2
First Amendment to the 2008 Plan
Exhibit 10.30 to our Form 10-K for the year ended December 31, 2008
65
*10.3
Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan ("2016 Plan")
Exhibit 10.1 to our Form 8-K filed on June 8, 2021
*10.4
2024 Annual Incentive Plan
Exhibit 10.1 to our Form 8-K filed on March 13, 2024
*10.5
2025 Annual Incentive Plan
Exhibit 10.1 to our Form 8-K filed on March 12, 2025
*10.6
Form of Non-Employee Director Option Grant Agreement under the 2008 Plan
Exhibit 10.1 to our Form 10-Q for the period ended June 30, 2011
*10.7
Form of Non-Qualified Stock Option Agreement under the 2008 Plan
Exhibit 10.3 to our Form 8-K filed on February 27, 2009
*10.8
Form of Employee Non-Qualified Stock Option Agreement under the 2008 Plan
Exhibit 10.2 to our Form 8-K filed on March 6, 2012
*10.9
Form of Employee Non-Qualified Stock Option Agreement under the 2008 Plan (used for awards in 2013)
Exhibit 10.3 to our Form 8-K filed on March 8, 2013
*10.10
Form of Employee Non-Qualified Stock Option Agreement under the 2008 Plan (Time-Based) (used for awards commencing in 2014)
Exhibit 10.2 to our Form 8-K filed on March 10, 2014
*10.11
Form of Employee Non-Qualified Stock Option Agreement under the 2016 Plan (Time-Based) (used for awards commencing in May 2016)
Exhibit 10.1 to our Form 8-K filed on May 27, 2016
*10.12
Form of Non-Employee Director Option Grant Agreement under the 2008 Plan (used for awards commencing May 2015)
Exhibit 10.4 to our Form 10-Q for the period ended June 30, 2015
*10.13
Form of Non-Employee Director Non-Qualified Stock Option Agreement under the 2016 Plan (used for awards commencing May 2016)
Exhibit 10.2 to our Form 8-K filed on May 27, 2016
*10.14
Form of Non-Employee Director Deferred Stock Unit Agreement under the 2008 Plan
Exhibit 10.1 to our Form 10-Q for the period ended June 30, 2014
*10.15
Form of Employee Restricted Stock Unit Award Agreement under the 2016 Plan (Time-Based) (used for awards commencing in May 2016)
Exhibit 10.3 to our Form 8-K filed on May 27, 2016
*10.16
Form of Employee Restricted Stock Unit Award Agreement under the 2016 Plan (Performance-Based) (used for awards commencing in May 2016)
Exhibit 10.4 to our Form 8-K filed on May 27, 2016
*10.17
Form of Non-Employee Director Restricted Stock Unit Award Agreement under the 2016 Plan (used for awards commencing May 2020)
Exhibit 10.1 to our Form 8-K filed on June 1, 2020
*10.18
Form of Employee Cash-Settled Restricted Stock Unit Award Agreement under the 2016 Plan (Time-Based) (used for awards commencing in May 2016)
Exhibit 10.5 to our Form 8-K filed on May 27, 2016
66
*10.19
Form of Employee Cash-Settled Restricted Stock Unit Award Agreement under the 2016 Plan (Performance-Based) (used for awards commencing in May 2016)
Exhibit 10.6 to our Form 8-K filed on May 27, 2016
*10.20
Form of Performance Unit Award Agreement under the 2016 Plan (used for awards commencing in March 2017)
Exhibit 10.1 to our Form 8-K filed on March 10, 2017
*10.21
Form of Retention Bonus Award Agreement (used for awards in 2022)
Exhibit 10.2 to our Form 8-K filed on March 11, 2022
*10.22
Form of Restricted Stock Unit Agreement under the 2016 Plan (Time-Based)
Exhibit 10.2 to our Form 8-K filed on March 13, 2024
*10.23
Form of Restricted Stock Unit Agreement under the 2016 Plan (Performance-Based)
Exhibit 10.3 to our Form 8-K filed on March 13, 2024
*10.24
Letter Agreement between Perdoceo Education Corporation and Jeffrey Ayers dated February 21, 2022
Exhibit 20.21 to our Form 10-K for the year ended December 31, 2021
*10.25
Second Amended and Restated Letter Agreement between the Company and Todd Nelson dated November 16, 2023
Exhibit 10.1 to our Form 8-K filed on November 17, 2023
*10.26
Separation and General Release Agreement between the Company and Andrew Hurst dated November 15, 2023
Exhibit 10.2 to our Form 8-K filed on November 17, 2023
*10.27
Form of Indemnification Agreement for Directors and Executive Officers
Exhibit 10.9 to our Form 10-Q for the period ended June 30, 2016
*10.28
Career Education Corporation Executive Severance Plan (Amended and Restated as of November 2, 2015)
Exhibit 10.9 to our Form 10-Q for the period ended September 30, 2015
*10.29
First Amendment and Summary of Material Modifications to the Career Education Corporation Executive Severance Plan & Summary Plan Description
Exhibit 10.2 to our Form 10-Q for the period ended June 30, 2020
10.30
Agreement with the Attorney General of Iowa effective January 2, 2019, including schedule of substantially identical agreements with the attorneys general of other states
Exhibit 10.2 to our Form 10-Q for the period ended March 31, 2019
10.31
Stipulated Order for Permanent Injunction and Monetary Judgment dated October 9, 2019 agreed to by the Federal Trade Commission and Career Education Corporation and certain of its subsidiaries
Exhibit 10.1 to our Form 10-Q for the period ended September 30, 2019
19.1
Perdoceo Education Corporation Policy on Insider Trading and Rule 10b5-1 Arrangements
Exhibit 19.1 to our Form 10-K for the year ended December 31, 2024
+21
Subsidiaries of the Company
+23.1
Consent of Grant Thornton LLP
+31.1
Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
+31.2
Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
67
+32.1
Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
+32.2
Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
*97.1
Perdoceo Education Corporation Clawback Policy
Exhibit 97.1 to our Form 10-K filed on February 21, 2024
+101.INS
InLine XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the InLine XBRL document
+101.SCH
InLine XBRL Taxonomy Extension Schema With Embedded Linkbases Document
+104
The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in Inline XBRL (included in Exhibit 101)
___________________
* Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this Form 10-K.
+Filed herewith.
68
SIGNAT URES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 19th day of February, 2026.
PERDOCEO EDUCATION CORPORATION
By:
/s/ ASHISH R. GHIA
Ashish R. Ghia,
Senior Vice President, Chief Financial Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ TODD S. NELSON
Director, President and Chief Executive Officer
February 19, 2026
Todd S. Nelson
(Principal Executive Officer)
/s/ ASHISH R. GHIA
Senior Vice President, Chief Financial Officer and Treasurer
February 19, 2026
Ashish R. Ghia
(Principal Financial Officer)
/s/ MICHELE A. PEPPERS
Vice President - Accounting & Reporting and Chief Accounting Officer
February 19, 2026
Michele A. Peppers
(Principal Accounting Officer)
/s/ GREGORY L. JACKSON
Chairman of the Board
February 19, 2026
Gregory L. Jackson
/s/ DENNIS H. CHOOKASZIAN
Director
February 19, 2026
Dennis H. Chookaszian
/s/ KENDA B. GONZALES
Director
February 19, 2026
Kenda B. Gonzales
/s/ PATRICK W. GROSS
Director
February 19, 2026
Patrick W. Gross
/s/ WILLIAM D. HANSEN
Director
February 19, 2026
William D. Hansen
/s/ HANNA SKANDERA
Director
February 19, 2026
Hanna Skandera
/s/ LESLIE T. THORNTON
Director
February 19, 2026
Leslie T. Thornton
/s/ ALAN D. WHEAT
Director
February 19, 2026
Alan D. Wheat
69
INDEX TO FINANCIAL STATEMENTS
Page
Financial Statements
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number 248 )
71
Consolidated Balance Sheets as of December 31, 2025 and 2024
74
Consolidated Statements of Income for the Years Ended December 31, 2025, 2024 and 2023
75
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023
75
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023
76
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023
78
Notes to Consolidated Financial Statements
79
Financial Statement Schedule
Schedule II – Valuation and Qualifying Accounts
107
All other financial statement schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or related notes.
70
REPORT OF INDEPEND ENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Perdoceo Education Corporation
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Perdoceo Education Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 19, 2026 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Allowance for credit losses
As described further in Notes 2(c) and 7 to the financial statements, student receivables represent funds owed to the Company in exchange for the educational services provided to the student. Student receivables are reported net of an allowance for credit losses as determined by management at the end of each reporting period. Generally, a student receivable balance is written off once a student is out of school for greater than 90 days and has not made a payment.
Management’s student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables. Their estimation methodology considers a number of quantitative and qualitative factors that, based on collection experience, have an impact on repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact the estimate of the allowance for credit losses. These factors include, but are not limited to internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, the allowance estimation process for student receivables is validated by trend analysis of collections and write-off experience as well as monitoring any emerging factors that impact the ability to collect student receivables.
The principal consideration for our determination that the allowance for credit loss is a critical audit matter is that there is a high degree of auditor judgment and subjectivity in performing procedures and evaluating management’s assumptions, including those relating to the internal repayment history and the ability to complete the federal financial aid process with the student.
71
Our audit procedures related to the allowance for credit losses included the following, among others:
• Assessed the appropriateness of management’s methodology for calculating the allowance including the significant inputs and assumptions utilized, including repayment history and the ability to complete the federal financial aid process with the student,
• Recalculated the estimated allowance rates applied to the respective accounts receivable allowance categories determined according to funding sources and student status,
• Tested the completeness and accuracy of data underlying management’s assertions and calculations for a selection of students, and compared our recalculations to management’s analysis to determine whether management’s conclusions were reasonable, and
• Tested on a sample basis the subsequent cash collections on a student account.
In addition, we tested the design and operating effectiveness of controls relating to establishing the allowance for credit losses.
/s/ GRANT THORNTON LLP
We have served as the Company's auditor since 2015.
Chicago, Illinois
February 19, 2026
72
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
Perdoceo Education Corporation
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Perdoceo Education Corporation (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 19, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting (“Management’s Report”). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Chicago, Illinois
February 19, 2026
73
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED B ALANCE SHEETS
(In thousands, except share and per share amounts)
As of December 31,
2025
2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents, unrestricted
$
110,970
$
109,130
Restricted cash
21,310
22,623
Total cash, cash equivalents and restricted cash
132,280
131,753
Short-term investments
511,211
459,795
Total cash and cash equivalents, restricted cash and short-term investments
643,491
591,548
Student receivables, gross
68,346
63,925
Allowance for credit losses
( 41,149
)
( 41,118
)
Student receivables, net
27,197
22,807
Receivables, other
5,037
5,330
Prepaid expenses
16,881
16,910
Inventories
4,049
3,388
Other current assets
208
171
Total current assets
696,863
640,154
NON-CURRENT ASSETS:
Property and equipment, net of accumulated depreciation of $ 86,908 and $ 67,492 as of December 31, 2025 and 2024, respectively
83,314
95,508
Right of use assets, net - operating
43,290
50,099
Right of use assets, net - finance
10,259
15,375
Goodwill
265,697
258,012
Intangible assets, net of amortization of $ 44,786 and $ 27,725 as of December 31, 2025 and 2024, respectively
77,945
95,006
Student receivables, gross
9,073
8,597
Allowance for credit losses
( 4,262
)
( 2,402
)
Student receivables, net
4,811
6,195
Deferred income tax assets, net
57,438
68,774
Other assets
8,100
7,911
TOTAL ASSETS
$
1,247,717
$
1,237,034
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liabilities - operating
$
6,032
$
7,792
Lease liabilities - finance
5,458
5,466
Accounts payable
14,271
12,805
Accrued expenses:
Payroll and related benefits
44,363
35,059
Advertising and marketing costs
7,838
8,135
Income taxes
5,627
4,926
Other
16,374
21,239
Deferred revenue
37,844
36,740
Total current liabilities
137,807
132,162
NON-CURRENT LIABILITIES:
Lease liabilities - operating
43,752
50,224
Lease liabilities - finance
6,097
11,555
Sale lease-back financing
56,992
-
Construction financing
-
56,500
Other liabilities
30,657
27,057
Total non-current liabilities
137,498
145,336
Commitments and Contingencies (Note 11)
STOCKHOLDERS' EQUITY:
Preferred stock, $ 0.01 par value; 1,000,000 shares authorized; none issued or outstanding
-
-
Common stock, $ 0.01 par value; 300,000,000 shares authorized; 92,072,703 and 91,023,660
shares issued, 62,478,373 and 65,719,224 shares outstanding as of December 31, 2025 and
2024, respectively
921
910
Additional paid-in capital
720,574
707,212
Accumulated other comprehensive income
1,070
166
Retained earnings
718,365
595,672
Treasury stock, at cost, 29,594,330 and 25,304,436 shares as of December 31, 2025 and 2024,
respectively
( 468,518
)
( 344,424
)
Total stockholders' equity
972,412
959,536
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,247,717
$
1,237,034
The accompanying notes are an integral part of these consolidated financial statements.
74
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
For the Year Ended December 31,
2025
2024
2023
REVENUE:
Tuition and fees, net
$
841,402
$
676,071
$
702,920
Other
4,694
5,192
7,084
Total revenue
846,096
681,263
710,004
OPERATING EXPENSES:
Educational services and facilities
197,540
120,860
130,324
General and administrative
410,923
367,052
398,084
Depreciation and amortization
41,627
14,645
16,887
Asset impairment
6
4,453
14,263
Total operating expenses
650,096
507,010
559,558
Operating income
196,000
174,253
150,446
OTHER INCOME:
Interest income
26,310
28,993
19,980
Interest expense
( 6,465
)
( 613
)
( 404
)
Miscellaneous income (expense)
991
( 1,193
)
22,099
Total other income
20,836
27,187
41,675
PRETAX INCOME
216,836
201,440
192,121
Provision for income taxes
56,922
53,850
44,469
NET INCOME
$
159,914
$
147,590
$
147,652
NET INCOME PER SHARE - BASIC:
$
2.47
$
2.25
$
2.22
NET INCOME PER SHARE - DILUTED:
$
2.42
$
2.19
$
2.18
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
64,805
65,646
66,468
Diluted
66,156
67,242
67,826
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Year Ended December 31,
(In Thousands)
2025
2024
2023
NET INCOME
$
159,914
$
147,590
$
147,652
OTHER COMPREHENSIVE INCOME, net of tax:
Foreign currency translation adjustments
45
( 28
)
45
Unrealized gain on investments
859
860
4,736
Total other comprehensive income
904
832
4,781
COMPREHENSIVE INCOME
$
160,818
$
148,422
$
152,433
The accompanying notes are an integral part of these consolidated financial statements.
75
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
Common Stock
Treasury Stock
Issued Shares
$0.01 Par
Value
Purchased Shares
Cost
Additional Paid-in Capital
Accumulated Other Comprehensive (Loss) Income
Retained Earnings
Total
BALANCE, December 31, 2022
89,396
$
894
( 22,221
)
$
( 301,624
)
$
684,183
$
( 5,447
)
$
347,839
$
725,845
Net income
-
-
-
-
-
-
147,652
147,652
Foreign currency translation
-
-
-
-
-
45
-
45
Unrealized gain on investments
-
-
-
-
-
4,736
-
4,736
Total comprehensive income
152,433
Dividends to shareholders, per share $ 0.22
-
-
-
-
-
-
( 14,885
)
( 14,885
)
Treasury stock purchased
-
-
( 540
)
( 8,301
)
-
-
-
( 8,301
)
Treasury stock acquired upon sale of asset
-
-
( 1,800
)
( 22,086
)
-
-
-
( 22,086
)
Share-based compensation expense:
Restricted stock award plans
-
-
-
-
8,064
-
-
8,064
Employee stock purchase plan
-
-
-
-
14
-
-
14
Common stock issued under:
Stock option plans
310
3
-
-
2,276
-
-
2,279
Restricted stock award plans
545
6
( 165
)
( 2,209
)
( 5
)
-
-
( 2,208
)
Employee stock purchase plan
19
-
-
-
266
-
-
266
BALANCE, December 31, 2023
90,270
$
903
( 24,726
)
$
( 334,220
)
$
694,798
$
( 666
)
$
480,606
$
841,421
Net income
-
-
-
-
-
-
147,590
147,590
Foreign currency translation
-
-
-
-
-
( 28
)
-
( 28
)
Unrealized gain on investments
-
-
-
-
-
860
-
860
Total comprehensive income
148,422
Dividends to shareholders, per share $ 0.48
-
-
-
-
-
-
( 32,524
)
( 32,524
)
Treasury stock purchased
-
-
( 385
)
( 6,769
)
-
-
-
( 6,769
)
Share-based compensation expense:
Restricted stock award plans
-
-
-
-
10,174
-
-
10,174
Employee stock purchase plan
-
-
-
-
14
-
-
14
Common stock issued under:
Stock option plans
158
2
-
-
1,971
-
-
1,973
Restricted stock award plans
582
5
( 193
)
( 3,435
)
( 6
)
-
-
( 3,436
)
Employee stock purchase plan
14
-
-
-
261
-
-
261
BALANCE, December 31, 2024
91,024
$
910
( 25,304
)
$
( 344,424
)
$
707,212
$
166
$
595,672
$
959,536
Net income
-
-
-
-
-
-
159,914
159,914
Foreign currency translation
-
-
-
-
-
45
-
45
Unrealized gain on investments
-
-
-
-
-
859
-
859
Total comprehensive income
160,818
Dividends to shareholders, per share $ 0.56
-
-
-
-
-
-
( 37,221
)
( 37,221
)
Treasury stock purchased
-
-
( 4,141
)
( 120,793
)
-
-
-
( 120,793
)
Earnout payments for business acquisition
-
-
158
4,243
-
-
-
4,243
Share-based compensation expense:
Restricted stock award plans
-
-
-
-
11,715
-
-
11,715
Employee stock purchase plan
-
-
-
-
15
-
-
15
Common stock issued under:
Stock option plans
171
2
-
-
1,368
-
-
1,370
Restricted stock award plans
868
9
( 307
)
( 7,544
)
( 9
)
-
-
( 7,544
)
Employee stock purchase plan
10
-
-
-
273
-
-
273
BALANCE, December 31, 2025
92,073
$
921
( 29,594
)
$
( 468,518
)
$
720,574
$
1,070
$
718,365
$
972,412
76
The accompanying notes are an integral part of these consolidated financial statements.
77
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEM ENTS OF CASH FLOWS
(In thousands)
For the Year Ended December 31,
2025
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
159,914
$
147,590
$
147,652
Adjustments to reconcile net income to net
cash provided by operating activities:
Asset impairment
6
4,453
14,263
Gain on sale of asset
-
-
( 22,086
)
Depreciation and amortization expense
41,627
14,645
16,887
Bad debt expense
29,492
33,719
33,215
Compensation expense related to share-based awards
11,730
10,188
8,078
Deferred income taxes
3,830
2,656
3,761
Changes in operating assets and liabilities:
Student receivables, gross
( 4,898
)
( 4
)
15,929
Allowance for credit losses
( 27,601
)
( 27,981
)
( 38,573
)
Receivables, other
( 2,072
)
( 8,052
)
( 3,922
)
Inventories, prepaid expenses, and other current assets
2,510
4,473
( 2,994
)
Other non-current assets
( 383
)
692
478
Accounts payable
1,466
( 727
)
( 4,878
)
Accrued expenses and other non-current liabilities
9,937
( 5,792
)
( 19,235
)
Deferred revenue
1,104
( 10,612
)
( 34,375
)
Right of use asset and lease liability - operating leases
( 1,422
)
( 3,654
)
( 2,175
)
Net cash provided by operating activities
225,240
161,594
112,025
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments
( 392,760
)
( 412,894
)
( 314,279
)
Sales of available-for-sale investments
345,803
447,502
238,184
Purchases of property and equipment
( 8,576
)
( 4,625
)
( 6,411
)
Business acquisitions, net of cash acquired
854
( 137,766
)
-
Sale of equity method investment
1,038
-
-
Earnout payment related to business acquisition
-
-
( 6,000
)
Net cash used in investing activities
( 53,641
)
( 107,783
)
( 88,506
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of treasury stock
( 120,793
)
( 6,769
)
( 8,301
)
Issuance of common stock
1,643
2,234
2,545
Payments of employee tax associated with stock compensation
( 7,544
)
( 3,436
)
( 2,209
)
Payments of cash dividends and dividend equivalents
( 36,855
)
( 31,699
)
( 14,417
)
Release of cash held in escrow
( 300
)
( 276
)
( 1,000
)
Earnout payments for business acquisition
( 1,757
)
-
-
Principal payments for finance leases
( 4,977
)
( 398
)
-
Principal payments for failed sale leaseback
( 489
)
( 735
)
-
Net cash used in financing activities
( 171,072
)
( 41,079
)
( 23,382
)
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
527
12,732
137
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the year
131,753
119,021
118,884
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the year
$
132,280
$
131,753
$
119,021
Supplemental Cash Flow Information:
Income taxes paid
$
49,347
$
46,840
$
41,751
Interest paid on finance leases and failed sale-leaseback
$
6,196
$
81
$
-
Supplemental Non-Cash Disclosures:
Non-cash additions to property and equipment
$
383
$
247
$
329
Right of use assets obtained in exchange for lease liabilities
$
-
$
3,310
$
-
The accompanying notes are an integral part of these consolidated financial statements.
78
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2025, 2024 and 2023
1. DESCRIPTION OF THE COMPANY
Perdoceo’s accredited academic institutions offer a quality postsecondary education to a diverse student population, with fully online, campus-based and hybrid learning programs. The Company’s academic institutions – Colorado Technical University (“ CTU ”), the American InterContinental University System (“ AIUS ” or “ AIU System ”) and University of St. Augustine for Health Sciences (" USAHS" ) – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Our academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. USAHS prepares medical professionals to provide quality medical care to communities across the country primarily through its graduate health sciences degree offerings in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Perdoceo's academic institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers and communities needing a qualified workforce.
As used in these notes to the consolidated financial statements, the terms “we,” “us,” “our,” “the Company,” “Perdoceo” and “PEC” refer to Perdoceo Education Corporation and our wholly-owned subsidiaries.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Principles of Consolidation and Basis of Financial Statement Presentation
These consolidated financial statements presented herein include the accounts of Perdoceo Education Corporation and our wholly-owned subsidiaries (collectively “Perdoceo” or “PEC”) . All inter-company transactions and balances have been eliminated.
On December 2, 2024, the Company acquired the University of St. Augustine for Health Sciences (the " USAHS acquisition "). Results of operations related to the USAHS acquisition are included in the consolidated financial statements from the date of acquisition. See Note 3 " Business Acquisition " for further information.
Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across three reporting segments: CTU, AIUS and USAHS.
During the third quarter of 2025, management of the non-degree professional development and continuing education programs offered by Hippo Education (“ Hippo ”) were transitioned from the CTU segment to the AIUS segment. All prior periods have been recast to reflect this change for comparability, and the results of operations related to Hippo are now reported within the AIUS segment for all periods presented.
b. Management’s Use of Estimates
The preparation of our consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the periods presented. We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. Significant estimates, among others, include the allowance for credit losses, the assumptions surrounding future projections of revenues and expenses used in determining the probable outcome of performance conditions related to performance-based compensation, the assumptions used in determining the discount rate to calculate right of use assets and lease liabilities, assumptions used in calculating income tax related matters including our deferred tax balances and any respective valuation allowance, fair values used in establishing the opening balance sheet for business combinations and fair values used in asset impairment evaluations including goodwill, intangible assets and long-lived assets. Actual results could differ from these estimates.
c. Student Receivables and Allowance for Credit Losses
Student receivables represent funds owed to us in exchange for the educational services provided to a student. Student receivables are reflected net of an allowance for credit losses at the end of the reporting period. Student receivables which are due
79
within one year are recorded as current assets on our consolidated balance sheets, while student receivables which are due more than one year from the balance sheet date are reported as non-current assets within our consolidated balance sheets.
A substantial portion of our student receivables is repaid through the students’ participation in various federal financial aid programs authorized by Title IV of the Higher Education Act of 1965, as amended (“Higher Education Act”) , which we refer to as “ Title IV Programs .” For the years ended December 31, 2025, 2024 and 2023, approx imately 76 %, 77 % and 76 %, respectively, of our institutions’ cash receipts from tuition payments came from Title IV Program funding.
Generally, a student receivable balance is written off once a student is out of school for greater than 90 days and has not made a payment. Although we analyze past due receivables, it is not practical to provide an aging of our non-current student receivable balances as a result of the methodology used in determining our earned student receivable balances. Student receivables are recognized on our consolidated balance sheets as they are deemed earned over the course of a student’s program and/or term, and therefore cash collections are not applied against specifically dated transactions.
We extend unsecured credit to a portion of the students who are enrolled at our academic institutions for tuition and certain other educational costs. Based upon past experience and judgment, we establish an allowance for credit losses with respect to student receivables which we estimate will ultimately not be collectible. As such, our results from operations only reflect the amount of revenue that is estimated to be reasonably collectible. Our standard student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trend analysis of our collections and write-off experience as well as monitoring any emerging factors that we believe impact the ability to collect our student receivables.
d. Revenue Recognition
Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities and are reflected net of scholarships and tuition discounts. Our universities charge tuition and fees at varying amounts and bill students a single charge that covers tuition, certain fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term for our degree programs and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed separately to students. These fees are generally earned over the applicable term and are not considered separate performance obligations.
For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our consolidated balance sheets. For certain of our institutions, students are billed as they enroll in courses, including courses related to future periods. Any billings for future periods would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the course has not yet started. Contract assets related to future periods are offset against the respective deferred revenue associated with the future period.
If a student withdraws from one of our academic institutions prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date. Management reassesses collectability when a student withdraws from the university and has unpaid tuition charges for the current term which the university is entitled to retain per the applicable refund policy. In certain cases, such unpaid charges generally do not meet the threshold of reasonably collectible and are recognized as revenue in accordance with ASC Topic 606 when cash is received and the contract is terminated and neither party has further performance obligations.
Academic terms are determined by start dates, which vary by university and program and are generally 8 - 16 weeks in length. Our non-degree professional development programs are available via subscription-based access for up to 52 weeks or online courses which are generally 12 - 18 weeks in length. Our students pay for their costs through a variety of funding sources, including federal
80
loan and grant programs, institutional payment plans, employer tuition assistance, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments, as well as private loans.
Other revenue, which primarily consists of contract training revenue and miscellaneous non-student related revenue, is billed and recognized as goods are delivered or services are performed.
e. Cash, Cash Equivalents and Restricted Cash
Cash, cash equivalents and restricted cash consist of cash and highly liquid investments with original maturities of three months or less. The carrying amounts of cash, cash equivalents and restricted cash approximate their fair values. Cash held in the Company’s banks accounts is not fully insured by the Federal Deposit Insurance Corporation. The Company has not experienced any material losses in such accounts. The restricted cash balance as of December 31, 2025 was $ 21.3 millio n and primarily relates to a letter of credit USAHS is required to maintain with the Department of Education.
Students at our institutions may receive grants, loans and work-study opportunities to fund their education under Title IV Programs. In certain instances, students may request that we retain a portion of their Title IV funds provided to them in excess of tuition billings and authorize us to apply these funds to historical balances or future charges and/or distribute them directly to the student in certain cases. As of December 31, 2025 and 2024, we held $ 9.3 million and $ 9.4 million, respectively, of these funds on behalf of students within cash and cash equivalents on our consolidated balance sheet, with the offset recorded as prepaid revenue within deferred revenue on our consolidated balance sheets.
f. Investments
Our investments, which primarily consist of non-governmental debt securities and treasury and federal agencies securities are classified as “available-for-sale” and recorded at fair value. The Company measures the fair value of financial instruments under the guidance of ASC Topic 820, Fair Value Measurement . Any unrealized holding gains or temporary unrealized holding losses, net of income tax effects, are reported as a component of accumulated other comprehensive income within stockholders’ equity. Realized gains and losses are computed on the basis of specific identification and are included in other income in our consolidated statements of income. In addition, the Company measures its available for sale securities at the net amount expected to be collected in accordance with ASC Topic 326, Financial Instruments - Credit Losses . The allowance for credit losses for available for sale securities is zero as of December 31, 2025 and 2024.
g. Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation and amortization are recognized using the straight-line method over the estimated useful lives of the related assets for financial reporting purposes and an accelerated method for income tax reporting purposes. Leasehold improvements are amortized on a straight-line basis over the shorter of the life of the lease or the useful life. Assets under construction are recorded in construction-in-progress until they are available for use. Maintenance, repairs, minor renewals and betterments are expensed as incurred, and major improvements, which extend the useful life of the asset, are capitalized.
When the Company is involved in the construction of leased facilities to be used in its operations, upon construction commencement, the Company evaluates whether it, as lessee, controls the asset being constructed, and depending on the extent of involvement in the project, may be the “deemed owner” of the leased asset for accounting purposes during the construction period under a build-to-suit (" BTS ") arrangement. If the Company is the “deemed owner” for accounting purposes during the construction period, upon construction commencement the Company is required to capitalize (i) costs incurred by the Company and (ii) the cash and non-cash assets contributed by the landlord for construction as property and equipment on our consolidated balance sheet as construction-in-progress, with an offsetting financing obligation under construction financing. Upon completion of a construction project, where the Company is the deemed owner, the Company will perform a sale-leaseback analysis to determine if it can derecognize the BTS asset and corresponding financing obligation. If the asset and liability cannot be derecognized, the agreement is treated as a debt-like financing arrangement.
The Company reviews its long-lived assets, including property and equipment and right of use assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be recoverable. Recoverability is measured by a comparison of the assets' carrying amount to their expected future undiscounted net cash flows. If any such assets are considered to be impaired, the impairment to be recognized is measured based on the amount by which the carrying amount of the asset exceeds its fair value.
h. Goodwill and Intangible Assets
Goodwill represents the excess of cost over fair market value of identifiable net assets acquired through business purchases. In accordance with FASB ASC Topic 350 – Intangibles-Goodwill and Other , we review goodwill for impairment on an annual basis or when an event or other circumstances change that would more likely than not reduce the fair value of the asset below its carrying
81
value, by applying a fair-value-based test. In evaluating the recoverability of the carrying value of goodwill, we must make assumptions regarding the fair value of our reporting units, as defined under FASB ASC Topic 350. Goodwill is evaluated by comparing the book value of a reporting unit, including goodwill, with its fair value, as determined by a combination of income and market approach valuation methodologies (“quantitative assessment”) . If the book value of a reporting unit exceeds its fair value, goodwill of the reporting unit is considered to be impaired. The amount of impairment loss is equal to the excess of the book value of the goodwill over the fair value of goodwill. In certain cases, a qualitative assessment may be used to determine if it is more likely than not that a reporting unit’s carrying value exceeds its fair value and if the quantitative assessment is needed.
When performing a qualitative assessment for the annual review of goodwill balances for impairment, management must first consider events and circumstances that may affect the fair value of the reporting unit to determine whether it is necessary to perform the quantitative impairment test. Management focuses on the significant inputs and any events or circumstances that could affect the significant inputs, including, but not limited to, financial performance compared with actual and projected results of relevant prior periods, legal, regulatory, contractual, competitive, economic, political, business or other factors, and industry and market considerations, such as a deteriorating operating environment or increased competition. Management evaluates all events and circumstances, including positive or mitigating factors, that could affect the significant inputs used to determine fair value. If management determines that it is not more likely than not that the goodwill of the reporting unit is impaired based upon its qualitative assessment then it does not need to perform the quantitative assessment.
When performing a quantitative assessment for the annual review of goodwill balances for impairment, we estimate the fair value of each of our reporting units based on projected future operating results and cash flows, market assumptions and/or comparative market multiple methods. Determining fair value requires significant estimates and assumptions based on an evaluation of a number of factors, such as marketplace participants, relative market share, new student interest, student retention, future expansion or contraction expectations, amount and timing of future cash flows and the discount rate applied to the cash flows. Significant management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate future cash flows. Assumptions used in our impairment evaluations, such as forecasted growth rates and our cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans. In addition to cash flow estimates, our valuations are sensitive to the rate used to discount cash flows and future growth assumptions.
Intangible assets include indefinite-lived assets. Indefinite-lived assets include our CTU trade name and accreditation rights, and our USAHS trade name, which were recorded at fair market value upon acquisition and subsequently reviewed on an annual basis for impairment. Accreditation rights represent the ability of our institutions to participate in Title IV Programs.
Definite-lived intangible assets consist of customer relationships, course curriculum, developed technology, accreditation rights and trade names, primarily from recent acquisitions. Customer relationships represent the value of acquired student and third party contracts and are amortized on a straight-line basis over the estimated future benefit period for those contracts. Course curriculum represents the value of acquired curriculum, including lesson plans and syllabi, used to deliver educational services. Acquired course curriculum balances are amortized on a straight-line basis over their useful lives, which are estimated by management based upon, among other things, the expected future utilization period and the nature of the related academic programs. Developed technology represents online auditory and video course program materials related to our non-degree professional development programs and are amortized on a straight-line basis over the expected period of future benefit. Accreditation rights represent federal, state and programmatic accreditation which allows our schools to operate and meet certain regulatory requirements. Accreditation rights are amortized on a straight-line basis over their useful life, which are estimated based upon the average remaining term before a campus would need to reapply for accreditation.
The Company reviews its indefinite-lived intangible assets on an annual basis and both indefinite-lived and definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be recoverable. Recoverability is measured by a comparison of the assets' carrying amount to their expected future undiscounted net cash flows. If such assets are considered to be impaired, the impairment to be recognized is measured based on the amount by which the carrying amount of the asset exceeds its fair value.
See Note 10 “ Goodwill and Other Intangible Assets ” for further discussion.
i. Contingencies
During the ordinary course of business, the Company may be subject to various claims and contingencies. In accordance with FASB ASC Topic 450 – Contingencies , when we become aware of a claim or potential claim, we assess the likelihood of any related loss or exposure. The probability a liability has been incurred, and whether the amount of loss can be reasonably estimated, is analyzed, and if the loss contingency is both probable and reasonably estimable, then we accrue for costs, including direct costs incurred, associated with the loss contingency. If no accrual is made but the loss contingency is reasonably possible, we disclose the nature of the contingency and the related estimate of possible loss or range of loss if such an estimate can be made. For all matters that are currently being reviewed, we expense legal fees, including defense costs, as they are incurred. Loss contingencies include, but are not limited to, possible losses related to legal proceedings and regulatory compliance matters, and our assessment of exposure requires
82
subjective assessment. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved. See Note 11 “ Contingencies ” for additional information.
j. Income Taxes
We are subject to the income tax laws of the U.S. and various state, local and foreign jurisdictions. These tax laws are complex and subject to interpretation. As a result, significant judgments and interpretations are required in determining our income tax provisions (benefits) and evaluating our uncertain tax positions.
We account for income taxes in accordance with FASB ASC Topic 740 – Income Taxes . Topic 740 requires the recognition of deferred income tax assets and liabilities based upon the income tax consequences of temporary differences between financial reporting and income tax reporting by applying enacted statutory income tax rates applicable to future years to differences between the financial statement carrying amounts and the income tax basis of existing assets and liabilities. Topic 740 also requires that deferred income tax assets be reduced by a valuation allowance if it is more likely than not that some portion of the deferred income tax asset will not be realized.
In assessing the need for a valuation allowance and/or release of a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. Topic 740 provides that important factors in determining whether a deferred tax asset will be realized are whether there has been sufficient taxable income in recent years and whether sufficient taxable income is expected in future years in order to use the deferred tax asset. In evaluating the realizability of deferred income tax assets, we consider, among other things, historical levels of taxable income along with possible sources of future taxable income, which include: the expected timing of the reversals of existing temporary reporting differences, the existence of taxable income in prior carryback year(s), the expected impact of tax planning strategies that may be implemented to prevent the potential loss of future income tax benefits, expected future taxable income and earnings history exclusive of the loss that created the future deductible amount, coupled with evidence indicating the loss is not a continuing condition. Changes in, among other things, income tax legislation, statutory income tax rates, or future taxable income levels could materially impact our valuation of income tax assets and liabilities and could cause our income tax provision to vary significantly among financial reporting periods. If, based on the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, we record a valuation allowance, or release all or a portion of the valuation allowance if it is more likely than not the deferred tax assets are expected to be realized. The weight given to the positive and negative evidence is commensurate with the extent to which the evidence may be objectively verified. A high degree of judgment is required to determine if, and the extent to which, valuation allowances should be recorded against deferred tax assets.
Topic 740 further clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in an income tax return. Topic 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
k. Leases
FASB ASC Topic 842 – Leases states that all leases create an asset and a liability for the lessee in accordance with FASB Concept Statements No. 6 Elements of Financial Statements, and thus requires the recognition of a lease liability and a right of use (" ROU ") asset at the lease inception date. We lease most of our administrative and educational facilities under non-cancelable operating or finance leases. In most cases, we are required to make additional payments under facility leases for taxes, insurance and other operating expenses incurred during the lease period, which are typically variable in nature. We determine if a contract contains a lease when the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. Upon such identification and commencement of a lease, we establish an ROU asset and a lease liability within our consolidated balance sheets.
A lease component is defined as an asset within the lease contract that a lessee can benefit from the use of and is not highly dependent or interrelated with other assets in the arrangement. A lease contract may contain multiple lease components. A non-lease component is defined as a component of the lease that transfers a good or service for the underlying asset, such as maintenance services. We have determined that all of our leases contain one lease component related to the building and land. We have determined that treating the land together with the building as one lease component would not result in a significant difference from accounting for them as separate lease components. We elected the practical expedient to include both the lease component and the non-lease component as a single component when accounting for each lease and calculating the resulting lease liability and ROU asset. Any remaining contract consideration, such as property taxes and insurance, that does not meet the definition of a lease component or non-lease component would be allocated to the single lease component based on our election.
The lease liability represents future lease payments for lease and non-lease components discounted for present value. Lease payments that may be included in the lease liability include fixed payments, variable lease payments that are based on an index or rate and payments for penalties for terminating the lease if the lessee is reasonably certain to use a termination option, among others.
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Certain of our leases contain rent escalation clauses that are specifically stated in the lease and these are included in the calculation of the lease liability. Variable lease payments for lease and non-lease components which are not based on an index or rate are excluded from the calculation of the lease liability and are recognized in the statement of income during the period incurred.
The ROU asset consists of the amount of the initial measurement of the lease liability and adjusted for any lease incentives, including rent abatements and tenant improvement allowances, and any initial direct costs incurred by the lessee. The ROU asset is amortized over the remaining lease term on a straight-line basis and recorded within educational services and facilities expense on our consolidated statements of income.
The lease term is determined by taking into account the initial period as stated in the lease contract and adjusted for any renewal options that the company is reasonably certain to exercise as well as any period of time that the lessee has control of the space before the stated initial term of the lease. If we determine that we are reasonably certain to exercise a termination option, the lease term is then adjusted to account for the expected termination date.
We use discount rates to determine the net present value of our gross lease obligations when calculating the lease liability and related ROU asset. In cases in which the rate implicit in the lease is readily determinable, we use that discount rate for purposes of the net present value calculation. In most cases, our lease agreements do not have a discount rate that is readily determinable and therefore we use an estimate of our incremental borrowing rate. Our incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
See Note 9 “ Leases ” for further details.
l. Share-Based Compensation
FASB ASC Topic 718 – Compensation-Stock Compensation requires that all share-based payments to employees and non-employee directors, including grants of stock options, shares or units of restricted stock, and the compensatory elements of employee stock purchase plans, be recognized in the financial statements based on the estimated fair value of the equity or liability instruments issued.
Our share-based awards are measured at fair value and recognized over the requisite service or performance period. The fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option pricing model, based on the market price of the underlying common stock, expected life, expected stock price volatility and expected risk-free interest rate. Expected volatility is computed using a combination of historical volatility for a period equal to the expected term; the risk-free interest rates are based on the U.S. Treasury yield curve, with a remaining term approximately equal to the expected term used in the option pricing model. The fair value of each restricted stock unit award is estimated based on the market price of the underlying common stock on the date of the grant. The fair value of each market-based performance grant is estimated using the Monte Carlo Simulation methodology to assess the grant date fair value. We estimate forfeitures at the time of grant and revise our estimate in subsequent periods if actual forfeitures differ from those estimates. For our performance-based awards, the performance criteria is assessed each reporting period to determine the probability of attainment.
See Note 13 “ Share-Based Compensation ” for further discussion of our share-based compensation plans, the nature of share-based awards issued under the plans and our accounting for share-based awards.
m. Advertising and Marketing Costs
Advertising and marketing costs are expensed as incurred. Advertising and marketing costs, which are included in general and administrative expense on our consolidated statements of income, were $ 112.9 million, $ 101.0 million and $ 102.6 million, for the years ended December 31, 2025, 2024 and 2023, respectively.
n. Inventories
Inventories all relate to finished goods consisting principally of laptops and supplies, and are stated at the lower of cost or net realizable value, determined on a first-in, first-out basis, or market. The cost of inventory is reflected as a component of educational services and facilities expense as the items are used or sold.
3. BUSINESS ACQUISITION
On December 2, 2024, the Company completed the acquisition of the University of St. Augustine for Health Sciences (" USAHS ").
USAHS is among the nation’s reputable universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Founded in 1979, USAHS
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educates students through its network of campuses in San Marcos, California; St. Augustine and Miami, Florida; and Austin and Dallas, Texas and through its online programs.
The purchase price of $ 137.0 million for USAHS was allocated to the fair values of acquired tangible and identifiable intangible assets of $ 268.5 million and assumed liabilities of $ 131.5 million as of December 2, 2024. The purchase price consisted of an initial cash payment made in December 2024, and a working capital true up of $ 0.8 million, which was received from the former owners in April 2025. Based on our purchase price allocation, we have recorded goodwill of $ 24.5 million. Goodwill reflects the inherent value of the acquired workforce as well as revenue growth opportunities following the acquisition. None of this goodwill balance will be deductible for income tax reporting purposes.
The following table summarizes the fair values of assets acquired and liabilities assumed as of acquisition date (dollars in thousands):
USAHS
December 2, 2024
Assets:
Student and other receivables
$
1,771
Prepaid assets
4,727
Property and equipment
78,800
ROU assets
53,271
Intangible assets
Trade name (indefinite-lived)
9,800
Customer relationships ( 2 year life)
14,000
Course curriculum ( 4 year life)
15,500
Accreditation rights ( 12 year life)
25,000
Deferred tax asset, net (1)
40,120
Other assets
977
Goodwill (1)
24,535
Total assets acquired
$
268,501
Liabilities:
Accounts payable and other accrued liabilities
$
9,269
Deferred revenue
10,137
Lease liabilities
55,625
Construction financing
56,500
Total liabilities assumed
$
131,531
Net assets acquired
$
136,970
_______________________________
(1) Goodwill and deferred tax asset, net include an adjustment in the current year of approximately $ 7.5 million upon finalization of the USAHS deferred tax rate applied to the indefinite-lived intangible assets and various adjustments identified while completing USAHS’s final pre-acquisition tax returns.
Pro forma financial information (unaudited)
The following unaudited pro forma summary financial information for the years ended December 31, 2024 and 2023 gives effect to the USAHS acquisition as if it had been completed on January 1, 2023. The unaudited pro forma financial information is provided for illustrative purposes only and does not purport to represent what the actual consolidated results of operations or the consolidated financial position of Perdoceo would have been had the USAHS acquisition been completed on the date noted above, nor are they necessarily indicative of future consolidated results of operations.
The table below is based on available information and certain assumptions the Company believes are reasonable, including adjustments to depreciation, amortization, interest income and interest expense based on the fair value purchase accounting adjustments primarily related to leases and property and equipment. Additionally, for the year ended December 31, 2023, a non-recurring adjustment was made to eliminate $ 241.6 million of asset impairment expense related to USAHS.
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Twelve Months Ended December 31,
in thousands, except per share amounts
2024
2023
Total revenue
$
825,902
$
880,455
Operating income
175,480
174,775
Net income
147,012
161,971
Net income per share - Basic
2.24
2.44
Net income per share - Diluted
2.19
2.39
See Note 17 “ Segment reporting ” for further discussion of USAHS and its financial results.
4. RECENT ACCOUNTING PRONOUNCEMENTS
Recent accounting guidance adopted in 2025
In December 2023, the FASB issued Accounting Standards Update (" ASU ") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The amendments in this ASU require that public business entities on an annual basis 1) disclose specific categories in the rate reconciliation, and 2) provide additional information for reconciling items that meet a quantitative threshold. The amendments require disclosure about income taxes paid by federal, state and foreign taxes, and by individual jurisdictions in which income taxes paid is equal or greater than 5 percent of total income taxes paid. The amendment also requires entities to disclose income or loss from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense or benefit from continuing operations disaggregated by federal, state and foreign. For all public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024; early adoption is permitted. We have evaluated and adopted this guidance. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.
In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions . The amendments in this ASU clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. For all public business entities, ASU 2022-03 is effective for annual periods and interim periods beginning after December 15, 2024; early adoption is permitted. We have evaluated and adopted this guidance. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.
Recent accounting guidance not yet adopted
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software . The amendments in this ASU are intended to improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. The amendments require that an entity capitalize software costs when both management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. For all public business entities, ASU 2025-06 is effective for annual periods and interim periods beginning after December 15, 2027; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and other disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . The amendments in this ASU provide all public business entities with a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the assets when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. For all public business entities, ASU 2025-05 is effective for annual periods and interim periods beginning after December 15, 2025; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and other disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . The amendments in this ASU require public business entities to disclose specific costs and expenses in the notes to financial statements for both interim and annual reporting periods. Key requirements include: 1) disclosing amounts for purchases of inventory, employee compensation, depreciation, and intangible asset amortization in relevant expense categories on the income statement; 2) combining certain disclosures already required under GAAP with new disaggregation requirements; 3) providing a qualitative description of remaining amounts in relevant
86
expense captions that aren't disaggregated quantitatively; and 4) disclosing total selling expenses, with a definition of selling expenses in annual reports. For all public business entities, ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and other disclosures.
5. FINANCIAL INSTRUMENTS
Investments consist of the following as of December 31, 2025 and 2024 (dollars in thousands):
December 31, 2025
Gross Unrealized
Cost
Gain
(Loss)
Fair Value
Short-term investments (available-for-sale):
Non-governmental debt securities
$
329,108
$
1,105
$
( 112
)
$
330,101
Treasury and federal agencies
180,631
529
( 50
)
181,110
Total short-term investments (available-for-sale)
$
509,739
$
1,634
$
( 162
)
$
511,211
December 31, 2024
Gross Unrealized
Cost
Gain
(Loss)
Fair Value
Short-term investments (available-for-sale):
Non-governmental debt securities
$
246,070
$
466
$
( 278
)
$
246,258
Treasury and federal agencies
213,394
258
( 115
)
213,537
Total short-term investments (available-for-sale)
$
459,464
$
724
$
( 393
)
$
459,795
In the table above, unrealized holding gains (losses) relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year , which are recorded within accumulated other comprehensive income on our consolidated balance sheets.
Our non-governmental debt securities primarily consist of corporate bonds, certificates of deposit and commercial paper. Our treasury and federal agencies debt securities primarily consist of U.S. Treasury bills and federal home loan debt securities.
A schedule of available-for-sale investments segregated by their original stated terms to maturity as of December 31, 2025 and 2024 are as follows (dollars in thousands):
Less than
one year
One to
five years
Total
Original stated term to maturity of available-for-sale-
investments as of December 31, 2025
$
35,240
$
475,971
$
511,211
Original stated term to maturity of available-for-sale-
investments as of December 31, 2024
$
57,206
$
402,589
$
459,795
There were no realized gains or losses from the sale of investments for the years ended December 31, 2025, 2024 and 2023.
Fair Value Measurements
FASB ASC Topic 820 – Fair Value Measurement establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
As of December 31, 2025 and 2024, we held investments that are required to be measured at fair value on a recurring basis. These investments (available-for-sale) consist of non-governmental debt securities and treasury and federal agencies securities. Available-for-sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Financial instruments measured at fair value on a recurring basis subject to the disclosure requirements of FASB ASC Topic 820 - Fair Value Measurements at December 31, 2025 and December 31, 2024 were as follows (dollars in thousands):
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As of December 31, 2025
Level 1
Level 2
Total
Cash and cash equivalents - money market funds
$
20,202
$
-
$
20,202
Short-term investments - non-governmental debt securities
-
330,101
330,101
Short-term investments - treasury and federal agencies
-
181,110
181,110
Totals
$
20,202
$
511,211
$
531,413
As of December 31, 2024
Level 1
Level 2
Total
Cash and cash equivalents - money market funds
$
30,189
$
-
$
30,189
Cash and cash equivalents - federal agency debt securities
-
13,078
13,078
Short-term investments - non-governmental debt securities
-
246,258
246,258
Short-term investments - treasury and federal agencies
-
213,537
213,537
Totals
$
30,189
$
472,873
$
503,062
Equity Method Investment
Our investment in an equity affiliate, an international private company, was sold during the fourth quarter of 2025 and a gain on sale of investment of $ 1.0 million was recorded within other miscellaneous income (expense) on our consolidated statement of income for the year ended December 31, 2025.
We made periodic operating maintenance payments to our former equity affiliate. The total related party fees recorded for the years ended December 31, 2025, 2024 and 2023 were as follows (dollars in thousands):
For the year ended December 31, 2025 (1)
$
1,663
For the year ended December 31, 2024
$
1,727
For the year ended December 31, 2023
$
1,672
________________
(1) Maintenance payments incurred up to the date of sale.
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6. REVENUE RECOGNITION
Disaggregation of Revenue
The following tables disaggregate our revenue by major source for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands):
For the Year Ended December 31, 2025
CTU (3)
AIUS (3)
USAHS (4)
Corporate and Other
Total
Tuition and fees, net (1)
$
458,645
$
225,188
$
157,569
$
-
$
841,402
Other revenue (2)
2,957
1,032
7
698
4,694
Total revenue
$
461,602
$
226,220
$
157,576
$
698
$
846,096
For the Year Ended December 31, 2024
CTU (3)
AIUS (3)
USAHS (4)
Corporate and Other
Total
Tuition and fees, net (1)
$
440,183
$
225,852
$
10,036
$
-
$
676,071
Other revenue (2)
3,191
1,220
5
776
5,192
Total revenue
$
443,374
$
227,072
$
10,041
$
776
$
681,263
For the Year Ended December 31, 2023
CTU (3)
AIUS (3)
USAHS (4)
Corporate and Other
Total
Tuition and fees, net (1)
$
452,063
$
250,857
$
-
$
-
$
702,920
Other revenue (2)
4,106
2,200
-
778
7,084
Total revenue
$
456,169
$
253,057
$
-
$
778
$
710,004
__________________
(1) Tuition and fees, net, includes revenue earned for all degree-granting programs as well as revenue earned for non-degree and professional development programs.
(2) Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.
(3) The prior period operating results for CTU and AIUS were recast to reflect the transition of Hippo Education from CTU to AIUS.
(4) USAHS includes revenue beginning on the acquisition date of December 2, 2024.
Performance Obligations
Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities and are reflected net of scholarships and tuition discounts. Our universities charge tuition and fees at varying amounts and bill students a single charge that covers tuition, certain fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term for our degree programs and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed separately to students. These fees are generally earned over the applicable term and are not considered separate performance obligations.
Contract Assets
For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our consolidated balance sheets. For certain of our institutions, students are billed as they enroll in courses, including courses related to future periods. Any billings for future periods would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the course has not yet started. Contract assets related to future periods are offset against the respective deferred revenue associated with the future period.
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Due to the short-term nature of our academic terms, the contract asset balance which exists at the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future periods. The decrease in contract asset balances are a result of one of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their previously billed amount. As of the end of each quarter, a new contract asset is determined on a student-by-student basis based on the most recently started term and a student’s progress within that term as compared to the date at which the student is no longer entitled to a refund under each institution’s refund policy. Contract assets associated with future periods remain as contract assets until the course begins and the student reaches the point in that course that they are no longer entitled to a refund.
The amount of deferred revenue balances which are being offset with contract assets balances as of December 31, 2025 and 2024 were as follows (dollars in thousands):
As of December 31,
2025
2024
Gross deferred revenue
$
80,290
$
61,291
Gross contract assets
( 42,446
)
( 24,551
)
Deferred revenue, net
$
37,844
$
36,740
Deferred Revenue
Changes in our deferred revenue balances for the years ended December 31, 2025 and 2024 were as follows (dollars in thousands):
For the Year Ended December 31, 2025
CTU (2)
AIUS (2)
USAHS (3)
Total
Gross deferred revenue, January 1, 2025
$
33,168
$
26,555
$
1,568
$
61,291
Revenue earned from prior balances
( 29,814
)
( 25,599
)
( 455
)
( 55,868
)
Billings during period (1)
463,059
240,197
157,510
860,766
Revenue earned for new billings during the period
( 428,831
)
( 199,589
)
( 157,114
)
( 785,534
)
Other adjustments
( 162
)
( 91
)
( 112
)
( 365
)
Gross deferred revenue, December 31, 2025
$
37,420
$
41,473
$
1,397
$
80,290
For the Year Ended December 31, 2024
CTU (2)
AIUS (2)
USAHS (3)
Total
Gross deferred revenue, January 1, 2024
$
36,409
$
27,561
$
-
$
63,970
Business acquisition, beginning balance
-
-
10,137
10,137
Revenue earned from prior balances
( 33,472
)
( 26,976
)
( 10,036
)
( 70,484
)
Billings during period (1)
437,961
224,813
-
662,774
Revenue earned for new billings during the period
( 406,711
)
( 198,876
)
-
( 605,587
)
Other adjustments
( 1,019
)
33
1,467
481
Gross deferred revenue, December 31, 2024
$
33,168
$
26,555
$
1,568
$
61,291
_______________
(1) Billings during period includes adjustments for prior billings .
(2) The prior period amounts for CTU and AIUS were recast to reflect the transition of Hippo Education from CTU to AIUS.
(3) USAHS includes deferred revenue starting from the acquisition date on December 2, 2024.
Tuition Refunds
If a student withdraws from one of our academic institutions prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Generally, the amount to be refunded to a student is calculated based upon the percent of the term attended and the amount of tuition and fees paid by the student as of their withdrawal date. In certain circumstances, we have recognized revenue for students who have withdrawn that we are not entitled to retain. We have estimated a reserve for these limited circumstances based on historical evidence in the amount of $ 2.3 m illion and $ 2.1 million as of December 31, 2025 and 2024,
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respectively. Students are typically entitled to a partial refund until approximately a little more than halfway through their term. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date.
Significant Judgments
We analyze revenue recognition on a portfolio approach under ASC Topic 606. Significant judgment is used in determining the appropriate portfolios to assess for meeting the criteria to recognize revenue under ASC Topic 606. We have determined that all of our students can be grouped into one portfolio. Based on our past experience, students at different universities, in different programs or with different funding all behave similarly. Enrollment agreements all contain similar terms, refund policies are similar across all institutions and students work with the university to obtain some type of funding, for example, Title IV Program funds, Veterans Administration funds, military funding, employer tuition assistance or self-pay. We have significant historical data for our students which allows us to analyze collectability. We do not expect that revenue earned for the portfolio is significantly different as compared to revenue that would be earned if we were to assess each student contract separately.
Significant judgment is also required to assess collectability, particularly as it relates to students seeking funding under Title IV Programs. Because students are required to provide documentation, and in some cases extensive documentation, to the Department to be eligible and approved for funding, the timeframe for this process can sometimes span between 90 to 120 days . We monitor the progress of students through the eligibility and approval process and assess collectability for the portfolio each reporting period to monitor that the collectability threshold is met.
For the years ended December 31, 2025, 2024 and 2023, we received a majority of our universities’ cash receipts for tuition payments from various government agencies as well as our corporate engagements. These cash receipts represent a substantial portion of our consolidated revenues and all have low risk of collectability.
7. STUDENT RECEIVABLES
Student receivables represent funds owed to us in exchange for the educational services provided to a student. Student receivables are reflected net of an allowance for credit losses at the end of the reporting period. Student receivables, net, are reflected on our consolidated balance sheets as components of both current and non-current assets.
Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer tuition assistance, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments, as well as private loans. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer tuition assistance. Students who have not applied for any type of financial aid or students whose financial aid may not fully cover the cost of their tuition and fees generally set up a payment plan with the institution and make payments on a monthly basis per the terms of the payment plan. For those balances that are not received during the academic term, the balance is typically due within the current academic year which is approximately 30 weeks in length. Generally, a student receivable balance is written off once a student has been out of school for greater than 90 days and has not made a payment.
Our standard student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trend analysis of our collections and write-off experience as well as monitoring any emerging factors that we believe impact the ability to collect our student receivables.
We have student receivables that are due greater than 12 months from the date of our consolidated balance sheets. As of December 31, 2025 and 2024, the amount of non-current student receivables under payment plans that are longer than 12 months in duration, net of allowance for credit losses, w as $ 4.8 million an d $ 6.2 million, respectively.
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Allowance for Credit Losses
We define student receivables as a portfolio segment under ASC Topic 326 – Financial Instruments – Credit Losses. Changes in our current and non-current allowance for credit losses related to our student receivable portfolio in accordance with the guidance under ASU 2016-13 for the years ended December 31, 2025, 2024 and 2023 were as follows (dollars in thousands):
For the year ended December 31,
2025
2024
2023
Balance, beginning of period
$
43,520
$
37,782
$
43,141
Provision for credit losses
29,492
33,719
33,215
Amounts written-off
( 29,263
)
( 29,606
)
( 40,590
)
Recoveries
1,662
1,625
2,016
Balance, end of period
$
45,411
$
43,520
$
37,782
Fair Value Measurements
The carrying amount reported in our consolidated balance sheets for the current portion of student receivables approximates fair value because of the nature of these financial instruments as they generally have short maturity periods. It is not practicable to estimate the fair value of the non-current portion of student receivables, since observable market data is not readily available, and no reasonable estimation methodology exists.
8. PROPERTY AND EQUIPMENT
The cost basis and estimated useful lives of property and equipment as of December 31, 2025 and 2024 are as follows (dollars in thousands):
December 31,
2025 (1)
2024 (1)
Life
Computer hardware and software
$
58,475
$
53,963
3 - 5 years
Leasehold improvements
39,371
37,237
Shorter of Life of Lease
or Useful Life
Furniture, fixtures and equipment
18,490
15,886
5 - 10 years
Building and improvements (2)
52,445
9,163
15 - 35 years
Other
23
22
5 - 10 years
Construction in progress (2)
1,418
46,729
170,222
163,000
Less-accumulated depreciation
( 86,908
)
( 67,492
)
Total property and equipment, net
$
83,314
$
95,508
___________________
(1) Property and equipment which were fully depreciated and no longer in use by the Company were retired during the years ended December 31, 2025 and 2024; therefore, both the cost of the asset and the related accumulated depreciation balances were reduced to zero for these assets.
(2) Buildings and improvements include a failed sale–leaseback transaction for USAHS.
Depreciation expense for the years ended December 31, 2025, 2024 and 2023 was $ 19.4 m illion, $ 8.7 million and $ 9.3 million, respectively.
For the year ended December 31, 2025, the Company did no t record any asset impairment charges. For the year ended December 31, 2024, the Company recognized asset impairment charges of $ 0.8 million related to software assets that were no longer expected to be utilized. For the year ended December 31, 2023, the Company recorded asset impairment charges totaling $ 2.1 million, primarily related to software assets that were no longer expected to be utilized and leasehold improvements at leased facilities that the Company determined it would no longer use.
9. LEASES
We lease most of our administrative and educational facilities under non-cancelable operating or finance leases expiring at various dates through 2050 . In most cases, we are required to make additional payments under facility leases for taxes, insurance and other operating expenses incurred during the lease period, which are typically variable in nature.
92
We determine if a contract contains a lease when the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish an ROU asset and a lease liability.
Quantitative lease information
Quantitative information related to leases for the years ended December 31, 2025, 2024 and 2023 is presented in the following table (dollars in thousands):
For the Year Ended December 31,
2025
2024
2023
Lease expenses (1)
Operating fixed lease expenses
$
10,330
$
5,213
$
6,410
Finance lease amortization expense
5,116
426
-
Finance lease interest expense
813
81
-
Variable lease expenses
4,483
986
1,401
Sublease income (2)
( 401
)
( 32
)
( 500
)
Total lease expenses
$
20,341
$
6,674
$
7,311
Other information (3)
Gross operating cash flows for operating leases
$
( 15,151
)
$
( 8,961
)
$
( 9,845
)
Gross operating cash flows for finance leases
( 6,737
)
( 81
)
-
Gross financing cash flows for finance leases
( 4,977
)
( 398
)
-
Operating cash flows from subleases (2)
401
32
488
As of December 31, 2025
As of December 31, 2024
As of December 31, 2023
Weighted average remaining lease term (in months) – operating leases
85
92
55
Weighted average remaining lease term (in months) – finance leases
25
37
-
Weighted average discount rate – operating leases
6.3
%
6.1
%
4.9
%
Weighted average discount rate– finance leases
5.9
%
5.9
%
-
_____________
(1) Lea se expense and sublease income represent the amount recorded within our consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability.
(2) For certain of our leased locations we have vacated the facility and have fully or partially subleased the space.
(3) Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs.
Gross Lease Obligations
As of December 31, 2025, future minimum lease payments under leases which are included in lease liabilities on our consolidated balance sheet are as follows (dollars in thousands):
93
Operating Leases Total
Finance Leases Total
Total Lease Liabilities
2026 (1)
$
9,023
$
5,964
$
14,987
2027
10,389
5,325
15,714
2028
7,844
957
8,801
2029
7,113
-
7,113
2030
7,277
-
7,277
2031
7,444
7,444
2032 and thereafter
13,784
-
13,784
Total
$
62,874
$
12,246
$
75,120
Less: imputed interest
13,090
691
13,781
Present value of future minimum lease payments
49,784
11,555
61,339
Less: current lease liabilities
6,032
5,458
11,490
Non-current lease liabilities
$
43,752
$
6,097
$
49,849
_____________
(1) Amounts provided are for unpaid lease obligations remaining as of December 31, 2025.
Significant Judgments and Assumptions
We use discount rates to determine the net present value of our gross lease obligations when calculating the lease liability and related ROU asset. In cases in which the rate implicit in the lease is readily determinable, we use that discount rate for purposes of the net present value calculation. In most cases, our lease agreements do not have a discount rate that is readily determinable and therefore we use an estimate of our incremental borrowing rate. Our incremental borrowing rate is determined at lease commencement or lease modification and represents the rate of interest we would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
We have 15 leased locations related to our ongoing operations which consist of administrative offices and university locations, of which two are either month to month leases or had an initial lease term of less than one year and therefore are not included in the lease liability and ROU asset recorded within our consolidated balance sheet, and one of which is related to a sale-leaseback transaction. For those leases that we are reasonably certain that we will extend or terminate at lease conception or modification, we have taken those factors into account when determining the lease liability recorded within our consolidated balance sheet.
Failed Sale-Leaseback
Upon construction commencement of the new St. Augustine campus in April 2023, USAHS determined that it was the deemed owner for accounting purposes during the construction period under a build to suit (“ BTS ”) arrangement due to the extent of the Company’s involvement in the project. Accordingly, the Company had recognized all cash and non-cash assets contributed by the landlord to the project as of December 31, 2024 as a component of construction in progress with a corresponding construction financing liability. As of December 31, 2024, the Company had recognized $ 56.5 million in construction contributions made by the landlord as construction financing on the consolidated balance sheet. Lease commencement began in January 2025 upon substantial completion of the BTS arrangement with a stated lease term of 25 years from commencement dat e.
Upon lease commencement and shortly after the acquisition of USAHS, the Company determined that it did not meet the criteria under ASC 606-10-25-30 to derecognize the asset as the Company retained control of the asset and the risks and rewards of ownership did not transfer to the landlord. As such the transaction is considered a failed sale leaseback and the Company will retain the asset on its consolidated balance sheet and depreciate the asset over its useful life. A financing obligation liability was recognized in the amount of the net proceeds received in the amount of $ 56.5 million. The Company will not recognize rent expense related to the leased asset. Instead, monthly rent payments under the lease agreement will be recorded as interest expense and a reduction of the outstanding liability.
Amortization expense and interest expense for this failed sale-leaseback was $ 1.2 million and $ 5.4 million, respectively, for the year ended December 31, 2025.
Future minimum lease payments for failed sale-leaseback financing transactions as of December 31, 2025 are as follows:
94
Sale Leaseback Payments
2026
$
5,043
2027
5,143
2028
5,246
2029
5,351
2030
5,458
2031
5,567
2032 and thereafter
122,259
Total
$
154,067
10. GOODWILL AND OTHER INTANGIBLE ASSETS
The carrying value of goodwill w as $ 265.7 m illion and $ 258.0 million as of December 31, 2025 and 2024, respectively.
A reconciliation of the changes in the carrying value of goodwill during the years ended December 31, 2025 and 2024 is as follows (dollars in thousands):
CTU
AIUS
USAHS (1)
Total
Balance as of December 31, 2023
$
130,755
$
110,407
$
-
$
241,162
Business acquisition
-
-
16,850
16,850
Balance as of December 31, 2024
130,755
110,407
16,850
258,012
Business acquisition (1)
-
-
7,685
7,685
Balance as of December 31, 2025
$
130,755
$
110,407
$
24,535
$
265,697
___________________
(1) The positive adjustment for the year ended December 31, 2025 relates to purchase accounting adjustments for the USAHS acquisition finalized during the period.
In assessing the fair value for our reporting units, we performed a qualitative assessment as of October 1, 2025 to determine if we believe it is more likely than not that our reporting units’ carrying values exceed their respective fair values. When performing the qualitative assessment, management first considered events and circumstances that may affect the fair value of the reporting unit to determine whether it is necessary to perform the quantitative impairment test. Management focused on the significant inputs, including its projections of revenue growth, operating expense leverage and the discount rate used in the prior quantitative assessment, and any events or circumstances that could affect the significant inputs. These events and circumstances included, but were not limited to, financial performance, future expectations of financial performance, legal, regulatory, contractual, competitive, economic, political, business or other factors, and industry and market considerations, such as a deteriorating operating environment or increased competition. Management evaluated all events and circumstances, including positive or mitigating factors, that could affect the significant inputs used to determine fair value. In addition, management evaluated the results of its most recent quantitative impairment assessment to determine by how much the previous fair value exceeded the carrying value for each indefinite-lived intangible asset.
The determination of estimated fair value of each reporting unit requires significant estimates and assumptions, and as such, these fair value measurements are categorized as Level 3 per ASC Topic 820. These estimates and assumptions primarily include, but are not limited to, the discount rate, terminal growth rates, operating cash flow projections and capital expenditure forecasts. Due to the inherent uncertainty involved in deriving those estimates, actual results could differ from those estimates. We evaluate the merits of each significant assumption used, both individually and in the aggregate, to assess the fair value of each reporting unit for reasonableness.
95
As of December 31, 2025 and 2024, the net book value of intangible assets other than goodwill are as follows (dollars in thousands):
December 31, 2025
December 31, 2024
Cost
Accumulated Amortization
Accumulated Impairments
Net Book Value
Cost
Accumulated Amortization
Accumulated Impairments
Net Book Value
Amortizable intangible assets:
Course curriculum
$
18,290
$
( 6,571
)
$
-
$
11,719
$
18,290
$
( 2,418
)
$
-
$
15,872
Customer relationships
52,090
( 29,051
)
( 111
)
22,928
52,090
( 19,068
)
( 111
)
32,911
Developed technology
8,820
( 3,307
)
( 5,513
)
-
8,820
( 2,980
)
( 5,513
)
327
Trade names
11,660
( 3,600
)
( 5,205
)
2,855
11,660
( 3,085
)
( 5,205
)
3,370
Accreditation rights
25,000
( 2,257
)
-
22,743
25,000
( 174
)
-
24,826
Net book value, amortizable intangible
assets:
$
115,860
$
( 44,786
)
$
( 10,829
)
$
60,245
$
115,860
$
( 27,725
)
$
( 10,829
)
$
77,306
Non-amortizable intangible assets:
Accreditation rights
$
1,000
$
1,000
Trade names
16,700
16,700
Non-amortizable intangible assets
17,700
17,700
Intangible assets, net
$
77,945
$
95,006
Amortizable intangible assets are amortized on a straight-line basis over their remaining estimated useful lives, which range from less than one year to twelve years . Amortization expense for intangible assets was $ 17.1 million, $ 5.5 million and $ 7.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Future amortization associated with amortizable intangible assets as of December 31, 2025 are as follows (dollars in thousands):
For the Twelve Months Ended
December 31, 2026
$
16,118
December 31, 2027
9,562
December 31, 2028
8,429
December 31, 2029
3,534
December 31, 2030
3,534
December 31, 2031 and thereafter
19,068
Total
$
60,245
As of December 31, 2025, net intangible assets include certain accreditation rights and trade names that are considered to have indefinite useful lives and, in accordance with FASB ASC Topic 350 —Intangibles—Goodwill and Other , are not subject to amortization but rather reviewed for impairment on at least an annual basis by applying a fair-value-based test.
We performed our annual impairment testing of other indefinite-lived intangible asset balances as of October 1, 2025 utilizing the qualitative assessment approach and concluded that no i ndicators existed that would suggest that it is more likely than not that the assets would be impaired. We monitor the operating results and revenue projections related to our indefinite-lived trade names and accreditation rights on a quarterly basis for signs of possible declines in estimated fair value. When performing the qualitative assessment, management considered events and circumstances that may affect the fair value of the intangible assets to determine whether it is necessary to perform the quantitative impairment test. These events and circumstances included, but were not limited to, financial performance, future expectations of financial performance, legal, regulatory, contractual, competitive, economic, political, business, and industry and market considerations. Management evaluated these events and circumstances, including positive or mitigating factors, that could affect the significant inputs used to determine fair value.
11. CONTINGENCIES
An accrual for estimated legal fees and settlements of $ 1.8 milli on and $ 1.2 million at December 31, 2025 and December 31, 2024, respectively, is presented within other current liabilities on our consolidated balance sheets.
We record a liability when we believe that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued and make adjustments as further information develops, circumstances change or contingencies are resolved.
96
Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (1) if the damages sought are indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty as to the outcome of pending appeals, motions or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including estimating a possible eventual loss, if any.
United States of America, ex rel. Fiorisce LLC v. Perdoceo Education Corporation and Colorado Technical University, Inc. On July 19, 2023, we became aware of a complaint originally filed in the U.S. District Court for the District of Colorado on February 25, 2021 and thereafter amended on May 19, 2023 and on May 19, 2025. The original complaint was filed under seal by a former employee of Colorado Technical University through a limited liability company, on behalf of the LLC and the federal government. On July 18, 2023, the district court ordered the complaint unsealed and we were notified that the U.S. Department of Justice (" DOJ" ) had declined to intervene in the action on February 3, 2023. The Company had previously received a Civil Investigative Demand ( "CID" ) related to this complaint on April 8, 2022 from the DOJ and had been cooperating with the DOJ in its review. After the federal government declined to intervene in this case, the Relator elected to pursue the litigation on behalf of the federal government. If the Relator is successful, it would receive a portion of the federal government’s recovery. The second amended complaint alleges violations of the False Claims Act related to the Company’s compliance with federal financial aid credit hour requirements in connection with its use of its learning management system. Relator claims that defendants’ conduct caused the government to make payments of federal funds to defendants which the government would not have made but for defendants’ alleged violation of the law. Relator seeks treble damages plus civil penalties and attorneys’ fees.
United States of America, ex rel. Aidan K. Peters v. Perdoceo Education Corporation, Colorado Technical University, Inc. and CEC Employee Group, LLC. After cooperating with the DOJ in our response to a CID originally received on September 7, 2024, we learned on November 11, 2025, that the DOJ had declined to intervene in a False Claims Act (" FCA ") lawsuit originally filed under seal on November 13, 2023 in the U.S. District Court for the District of Colorado by a former employee of Colorado Technical University on behalf of himself and the federal government. The Relator subsequently elected to pursue the litigation on behalf of the federal government and filed an amended complaint on January 8, 2026. If he is successful, he would receive a portion of the federal government’s recovery. The amended complaint makes a number of allegations that it claims are violations of the FCA arising from the Company’s compliance with the incentive compensation and misrepresentation requirements for Title IV Programs. Relator claims that defendants’ conduct caused the government to make payments of federal funds to defendants which the government would not have made but for defendants’ alleged violation of the law. The amended complaint also asserts a personal claim by the Relator-Plaintiff under the FCA’s anti-retaliation provision. Under the FCA, if a defendant is found to have violated the Act, it can be liable to the United States for treble damages and statutory penalties, and it is liable to the Relator for his reasonable attorneys’ fees and expenses. The anti-retaliation provision of the FCA also allow for potential recovery of double-back pay and attorneys’ fees, and other relief.
Because of the many questions of fact and law that may arise, the outcome of these legal proceedings are uncertain at this point. Based on information available to us at present, we cannot reasonably estimate a range of potential loss, if any, for these actions. Accordingly, we have not recognized any liability associated with these actions.
We receive from time-to-time requests from state attorneys general, federal and state government agencies and accreditors relating to our institutions, to specific complaints they have received from students or former students or to student loan forgiveness claims which seek information about students, our programs, and other matters relating to our activities. These requests can be broad and time consuming to respond to, and there is a risk that they could expand and/or lead to a formal action or claims of non-compliance. We are subject to a variety of other claims, lawsuits, arbitrations and investigations that arise from time to time out of the conduct of our business, including, but not limited to, matters involving prospective students, students or former students, alleged violations of the Telephone Consumer Protection Act, both individually and on behalf of a putative class, and employment matters. Periodically matters arise that we consider outside the scope of ordinary routine litigation incidental to our business. While we currently believe that these matters, individually or in aggregate, will not have a material adverse impact on our business, reputation, financial position, cash flows or results of operations, these matters are subject to inherent uncertainties, and management’s view of these matters may change in the future. Were an unfavorable outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on our business, reputation, financial position, cash flows or results of operations.
97
12. INCOME TAXES
Pretax income exclusively from domestic-based operations for the years ended December 31, 2025, 2024 and 2023 was $ 216.8 million, $ 201.4 million and $ 192.1 million, respectively.
The provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consists of the following (dollars in thousands):
For the Year Ended December 31,
2025
2024
2023
Current provision
Federal
$
42,512
$
40,947
$
32,792
State and local
10,813
10,308
7,903
Foreign
4
18
13
Total current provision
53,329
51,273
40,708
Deferred provision
Federal
1,683
3,375
2,640
State and local
1,910
( 798
)
1,121
Total deferred provision
3,593
2,577
3,761
Total provision for income taxes
$
56,922
$
53,850
$
44,469
The following table shows the principal reasons for the difference between the effective income tax rate and the statutory federal income tax rate:
For the Year Ended December 31,
2025
2024
2023
Amount
Percent
Amount
Percent
Amount
Percent
US federal statutory income tax rate
$
45,536
21.0
%
$
42,302
21.0
%
$
40,345
21.0
%
Domestic federal
Tax Credits
( 368
)
- 0.2
%
( 695
)
- 0.3
%
( 573
)
- 0.3
%
Nontaxable and nondeductible items
2,396
1.1
%
3,394
1.7
%
1,180
0.6
%
Nondeductible compensation
2,162
1.0
%
2,584
1.3
%
2,180
1.1
%
Other
234
0.1
%
810
0.4
%
( 1,000
)
- 0.5
%
Changes in valuation allowances
31
0.0
%
-
0.0
%
-
0.0
%
Other
( 1,433
)
- 0.6
%
( 233
)
- 0.2
%
( 315
)
- 0.2
%
Domestic state and local income taxes, net of federal effect (1)
7,993
3.7
%
6,074
3.0
%
4,930
2.6
%
Foreign tax effects
4
0.0
%
18
0.0
%
13
0.0
%
Changes in unrecognized tax benefits
2,763
1.3
%
2,990
1.5
%
( 1,111
)
- 0.6
%
Total
$
56,922
26.3
%
$
53,850
26.7
%
$
44,469
23.1
%
_______________________
(1) The states that contribute to the majority (greater than 50%) of the tax effect in this category include California, Florida and Illinois for 2025, Illinois for 2024 and Illinois for 2023.
The effective income tax rate for 2024 was 26.7 % compared to 23.1 % for 2023. The increase in the effective income tax rate was primarily due a $ 4.5 million favorable adjustment in 2023 related to the recognition of the tax benefits associated with a previously disclosed prior year ordinary loss attributable to the stock of a worthless subsidiary, which decreased the overall effective tax rate by 2.4 %.
The amounts of cash taxes paid by the Company are as follows (dollars in thousands):
For the Year Ended December 31,
2025
2024
2023
Federal
$
41,841
$
41,400
$
37,970
State
7,506
5,440
3,781
Income Taxes, net of amounts refunded
$
49,347
$
46,840
$
41,751
98
In 2025, 2024 and 2023, there were no individual state jurisdictions with cash taxes paid that equaled or exceeded 5% of total income taxes paid.
A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits as of December 31, 2025, 2024 and 2023 is as follows (dollars in thousands):
2025
2024
2023
Gross unrecognized tax benefits, beginning of the year
$
30,280
$
25,686
$
24,658
Additions for tax positions of prior years
-
-
16
Additions for tax positions related to the current year
5,007
7,641
7,325
Reductions for tax positions of prior years
( 496
)
( 1,127
)
( 5,083
)
Reductions due to lapse of applicable statute of limitations
( 2,214
)
( 1,920
)
( 1,230
)
Subtotal
32,577
30,280
25,686
Interest and penalties
5,625
4,424
3,257
Total gross unrecognized tax benefits, end of the year
$
38,202
$
34,704
$
28,943
The total amount of net unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in future periods was $ 30.2 million and $ 27.4 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, our short and long-term reserves, recorded within current accrued income taxes and other non-current liabilities, respectively, related to FASB’s interpretation No. 48 of ASC Topic 740-10, Accounting for Uncertainty in Income Taxes or (“FIN 48”) , were $ 2.1 million and $ 30.4 million, respectively. We record interest and penalties related to unrecognized tax benefits within provision for income taxes on our consolidated statements of income. The total amount of accrued interest and penalties resulting from such unrecognized tax benefits was $ 5.6 million and $ 4.4 million as of December 31, 2025 and 2024, respectively. For the years ended December 31, 2025, 2024 and 2023, we recognized expenses of less than $ 1.0 million, less than $ 1.0 million and less than $ 0.7 million, respectively, related to interest and penalties from unrecognized tax benefits in our consolidated results of operations.
Perdoceo and its subsidiaries file income tax returns in the U.S. and in various state and local jurisdictions and are routinely examined by tax authorities in these jurisdictions. As of December 31, 2025, the Company's federal income tax returns are open to examinations for the tax years ended December 31, 2022 and forward.
Deferred income tax assets and liabilities result primarily from temporary differences in the recognition of various expenses for tax and financial statement purposes, and from the recognition of the tax benefits of net operating loss and tax credit carryforwards. Components of deferred income tax assets and liabilities as of December 31, 2025 and 2024 are as follows (dollars in thousands):
99
December 31,
2025
2024
Deferred income tax assets:
Accrued occupancy
$
14,658
$
18,419
Compensation and employee benefits
8,960
6,754
Tax net operating loss carry forwards
17,239
17,161
Valuation allowance
( 10,617
)
( 10,861
)
Allowance for doubtful accounts
8,193
7,775
Accrued settlements and legal
186
179
Accrued severance
322
614
Equity method for investments
-
1,180
Equity method for investments valuation allowance
-
( 1,180
)
Capital loss
907
-
Capital loss valuation allowance
( 907
)
-
Capitalized research and development
949
4,908
Deferred rent
13,507
-
Interest expense disallowance carry forward
3,988
4,299
Depreciation
-
4,081
Amortization
22,836
33,148
Other
1,711
1,676
Total deferred income tax assets
81,932
88,153
Deferred income tax liabilities:
Depreciation
8,395
-
Right of use asset, net
12,691
16,041
Available for sale short-term investments
348
80
Other
3,060
3,258
Total deferred income tax liabilities
24,494
19,379
Net deferred income tax assets
$
57,438
$
68,774
As of December 31, 2025, the Company has a gross deferred tax asset before valuation allowance of $ 357.8 million and a gross deferred tax liability of $ 103.4 million. As of December 31, 2024, the Company had a gross deferred tax asset before valuation allowance of $ 373.0 million and a gross deferred tax liability of $ 79.1 million.
Included among the Company’s gross deferred tax assets as of December 31, 2025, was a federal net operating loss (" NOL ") carryforward of $ 17.9 million, tax basis amortizable intangible assets of $ 189.8 million, an interest expense disallowance carryforward of $ 18.1 million and state NOL carryforwards of $ 8.3 million. These acquired tax attributes are all subject to an annual utilization limitation. Excluding the acquired state NOLs mentioned above, we have state NOL carryforwards of approximately $ 212.4 million, which expire between tax years 2025 and 2037 . Of this amount, approximately $ 52.0 million relates to separate state NOL carryforwards and $ 127.2 million relates to combined state NOL carryforwards, which we anticipate will not be utilized. Valuation allowances have been established against the full amounts of the deferred tax balances for these separate and combined state NOL carryforwards.
As of December 31, 2024, a valuation allowance of $ 12.0 million was maintained with respect to our equity investment in CCKF and state NOLs. During the year, the Company incurred a $ 3.8 million capital loss upon the sale of its equity investment in CCKF. In assessing whether the deferred tax asset on the capital loss was realizable, the Company considered the fact that capital losses can only be utilized to offset capital gains and there is neither an opportunity to carry back the capital loss nor are there any material capital gains anticipated within the allowed 5-year carryforward period. Therefore, we determined a full valuation allowance was needed with respect to the capital loss. As of December 31, 2025, our total valuation allowance was $ 11.5 million, primarily associated with our state NOLs attributable to jurisdictions where we no longer maintain active schools. We will continue to evaluate our valuation allowance in future years for any change in circumstances that causes a change in judgment about the realizability of these deferred tax assets.
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13. SHARE-BASED COMPENSATION
Overview of Share-Based Compensation Plans
The Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan (“the “ 2016 Plan ”) became effective (as the Career Education Corporation 2016 Incentive Compensation Plan) on May 24, 2016, and the amendment and restatement of the 2016 Plan became effective on June 3, 2021, upon its approval by the Company’s stockholders. Under the 2016 Plan, Perdoceo may grant to eligible participants awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock, performance units, annual incentive awards, and substitute awards, which generally may be settled in cash or shares of our common stock. Any shares of our common stock that are subject to awards of stock options or stock appreciation rights payable in shares will be counted as 1.0 share for each share issued for purposes of the aggregate share limit and any shares of our common stock that are subject to any other form of award payable in shares will be counted as 1.35 shares for each share issued for purposes of the aggregate share limit. As of December 31, 2025, there were approximately 3.3 million shares of common stock available for future share-based awards under the 2016 Plan, which is net of (i) 0.2 million shares issuable upon exercise of outstanding options and (ii) 2.4 million shares underlying restricted stock units, which will be settled in shares of our common stock if the vesting conditions are met and thus reduce the common stock available for future share-based awards under the 2016 Plan by the amount vested. These shares take into account the anticipated vesting levels based on projected attainment of performance conditions for performance-based restricted stock units and have been multiplied by the applicable factor under the 2016 Plan to determine the remaining shares available as of December 31, 2025. Additionally, as of December 31, 2025 under the Company’s previous 2008 Incentive Compensation Plan, there were less than 0.1 million shares of common stock reserved for issuance upon settlement of underlying outstanding deferred stock units. The vesting of all types of awards is subject to possible acceleration in certain circumstances. If a plan participant terminates employment for any reason other than by death or disability during the vesting period, the right to unvested equity awards is generally forfeited.
As of December 31, 2025, we estimate that compensation expense of approximately $ 18.0 million will be recognized over the next four years for all unvested share-based awards that have been granted to participants. This amount excludes any estimates of forfeitures.
Stock Options. The exercise price of stock options granted under each of the plans is equal to the fair market value of our common stock on the date of grant. Employee stock options generally become exercisable 25 % per year over a four-year service period beginning on the date of grant and expire ten years from the date of grant. Non-employee directors’ stock options expire ten years from the date of grant and generally become 100 % exercisable after the first anniversary of the grant date. Grants of stock options are generally only subject to the service conditions discussed previously.
Stock option activity during the years ended December 31, 2025, 2024 and 2023 under our plans was as follows:
Options
Weighted Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic Value
(in thousands)
Outstanding as of December 31, 2022
851,082
$
9.45
Granted
-
-
Exercised
( 309,819
)
7.35
$
2,860
Forfeited
-
-
Cancelled
-
-
Outstanding as of December 31, 2023
541,263
$
10.65
Granted
-
-
Exercised
( 158,047
)
12.48
$
1,183
Forfeited
-
-
Cancelled
-
-
Outstanding as of December 31, 2024
383,216
$
9.90
Granted
-
-
Exercised
( 171,139
)
8.00
$
3,296
Forfeited
-
-
Cancelled
-
-
Outstanding as of December 31, 2025
212,077
$
11.43
1.62
$
3,795
Exercisable as of December 31, 2025
212,077
$
11.43
1.62
$
3,795
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The following table summarizes information with respect to all outstanding and exercisable stock options under all of our plans as of December 31, 2025:
Options Outstanding
Options Exercisable
Number of
Options
Outstanding
Weighted Average
Exercise Price
Weighted Average
Remaining
Contractual Term
(in Years)
Number
Exercisable
Weighted
Average
Exercise Price
63,387
$
5.96
0.39
63,387
$
5.96
9,308
$
7.22
0.85
9,308
$
7.22
56,355
$
9.69
1.39
56,355
$
9.69
12,972
$
13.80
2.18
12,972
$
13.80
40,085
$
15.39
2.41
40,085
$
15.39
29,970
$
21.29
3.61
29,970
$
21.29
212,077
$
11.43
1.62
212,077
$
11.43
Restricted Stock Units to be Settled in Stock. Restricted stock units to be settled in shares of stock which are not “performance-based” generally vest 25 % per year over a four-year service period. Restricted stock units which are “performance-based” are subject to performance or market conditions that may increase or reduce the number of restricted stock units that vest at the end of the requisite service period or result in all units being forfeited, even if the requisite service period is met, with attainment of performance or market conditions assessed quarterly. The performance-based restricted stock units generally vest three years after the grant date.
The following table summarizes information with respect to all outstanding restricted stock units to be settled in shares of stock under our plans during the years ended December 31, 2025, 2024 and 2023:
Restricted Stock to be Settled in Shares of Stock
Units
Weighted
Average
Grant-Date
Fair Value
Per Unit
Outstanding as of December 31, 2022
1,614,210
$
12.18
Granted (1)
741,223
13.58
Vested
( 530,819
)
14.15
Forfeited
( 293,408
)
12.11
Outstanding as of December 31, 2023 (1)
1,531,206
$
12.19
Granted (1)
495,529
17.94
Vested
( 582,112
)
12.20
Forfeited
( 53,454
)
14.94
Outstanding as of December 31, 2024 (1)
1,391,169
$
14.13
Granted (1)
689,138
19.22
Vested
( 868,499
)
11.90
Forfeited
( 16,224
)
18.16
Outstanding as of December 31, 2025 (1)
1,195,584
$
18.63
_________________
(1) 150,292 , 192,024 and 226,954 of performance-based restricted stock units granted during 2025, 2024 and 2023, respectively, and which are still outstanding as of December 31, 2025, are subject to a 200 % maximum payout based on certain performance metrics.
Deferred Stock Units to be Settled in Stock. Perdoceo granted deferred stock units to our non-employee directors prior to 2017, which will be settled in shares of stock upon each director(s) ceasing to provide services to the Company in the capacity of a director, employee or consultant. As of December 31, 2025, there are 58 thousand deferred stock units outstanding.
Stock-Based Compensation Expense. Total stock-based compensation expense was $ 11.7 million, $ 10.2 million and $ 8.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Share-Based Awards Assumptions
We recognize the value of share-based compensation as expense in our consolidated statements of income during the vesting periods of the underlying share-based awards using the straight-line method. FASB ASC Topic 718 allows companies to estimate forfeitures of share-based awards at the time of grant and revise such estimates in subsequent periods if actual forfeitures differ from original projections.
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The fair value of each share of restricted stock and restricted stock units to be settled in stock is equal to the fair market value of our common stock as of the date of grant, which is the closing price per share of our common stock on NASDAQ.
14. STOCK REPURCHASE PROGRAM
On July 31, 2025, the Board of Directors of the Company approved a stock repurchase program for up to $ 75.0 million, which commenced July 31, 2025 and expires January 31, 2027 . The stock repurchase program replaced the previous stock repurchase program approved on February 20, 2024. The other terms of the stock repurchase program are consistent with the Company’s previous stock repurchase program.
The timing of purchases and the number of shares repurchased under the program is determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, its assessment of alternative uses of capital, regulatory requirements and other factors. Repurchases will be made in open market transactions, including block purchases, conducted in accordance with Rule 10b-18 under the Exchange Act as well as may be made pursuant to trading plans established under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The stock repurchase program does not obligate the Company to purchase shares and the Company may, in its discretion, begin, suspend or terminate repurchases at any time, without any prior notice.
During the year ended December 31, 2025, we repurchased 4.1 million shares of our common stock for approximately $ 120.8 million at an average price of $ 29.17 per share, of which approximately 1.6 million shares of our common stock were purchased under the previous stock repurchase program for approximately $ 46.1 million. During the year ended December 31, 2024, we repurchased 0.4 million shares of our common stock for approximately $ 6.8 million at an average price of $ 17.60 per share. As of December 31, 2025, approximately $ 0.2 million was available under our authorized stock repurchase program to repurchase outstanding shares of our common stock. Shares of stock repurchased under the program are held as treasury shares. These repurchased shares have reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations.
15. WEIGHTED AVERAGE COMMON SHARES
Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that would be outstanding if dilutive stock options were exercised and restricted stock units were settled for common shares during the period.
The weighted average number of common shares used to compute basic and diluted net income per share for the years ended December 31, 2025, 2024 and 2023 were as follows:
For the Year Ended December 31,
2025
2024
2023
Basic common shares outstanding
64,805
65,646
66,468
Common stock equivalents
1,351
1,596
1,358
Diluted common shares outstanding
66,156
67,242
67,826
Certain unexercised stock option awards are excluded from our computations of diluted earnings per share, as these shares were out-of-the-money and their effect would have been anti-dilutive. There were no anti-dilutive options for each of the years ended December 31, 2025 and 2024. For the year ended December 31, 2023, fewer than 0.1 million anti-dilutive shares were excluded from the calculation of diluted earnings per share.
In addition to the common stock issued upon the exercise of employee stock options and the vesting of restricted stock units to be settled in stock, we issued less than 0.1 million shares for each of the years ended December 31, 2025, 2024 and 2023, pursuant to our employee stock purchase plan.
16. EMPLOYEE BENEFIT PLANS
Retirement Savings and Profit Sharing Plans
We maintain a defined contribution 401(k) retirement savings plan which is available to all employees who have worked greater than 1,000 hours within a fiscal year. Under the plan, an eligible employee may elect to defer receipt of a portion of their annual pay, including salary and bonus. During 2025, 2024 and 2023, we contributed this amount to the plan on the employee’s behalf and also made a matching contribution equal to 50 % of the first 2 % and 25 % of the next 4 % of the percentage of annual pay that the employee elected to defer. P articipants are 100 % vested in the company’s matching contribution after two years of service.
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Additionally, USAHS, which was acquired on December 2, 2024, offers a defined contribution 401(K) retirement savings plan to its employees. Under this plan, eligible employee may choose to defer a portion of their annual compensation, including salary and bonus. We make contributions on behalf of employees, including a matching contribution equal to 50 % of the first 6 % of eligible compensation an employee contributes to the benefit plan. For the year ended December 31, 2025, the company match was discretionary and based on USAHS's financial performance.
During the years ended December 31, 2025, 2024 and 2023, we recorded expense under these plans of approximately $ 4.3 million, $ 3.1 millio n, and $ 3.6 million, respectively.
Employee Stock Purchase Plan
We maintain an employee stock purchase plan that allows substantially all full-time and part-time employees to acquire shares of our common stock through payroll deductions over three-month offering periods. The per share purchase price is equal to 95 % of the fair market value of a share of our common stock on the last day of the offering period, and purchases are limited to 10 % of an employee’s salary, up to a maximum of $ 25,000 per calendar year. We are authorized to issue up to 4.0 million shares of common stock under the employee stock purchase plan, and, as of December 31, 2025, 3.5 million shares of common stock have been issued under the plan.
The compensation expense for employee share purchases recorded during the years ended December 31, 2025, 2024 and 2023 in connection with the compensatory elements of our employee stock purchase plan was not significant.
17. SEGMENT REPORTING
Our segments are determined in accordance with FASB ASC Topic 280— Segment Reporting and are based on how the Company's chief operating decision maker (" CODM ") evaluates performance and allocates resources. Perdoceo's CODM as defined under ASC Topic 280 is its President and Chief Executive Officer. Each segment is comprised of an accredited postsecondary education institution that offers a variety of academic programs.
Our three reporting segments are described below.
Colorado Technical University (CTU) is committed to providing industry-relevant higher education to a diverse student population, including non-traditional adult learners seeking career advancement and the military community. CTU utilizes innovative technology and experienced faculty, enabling the pursuit of academic and professional goals for learners. CTU offers academic programs in the career-oriented disciplines of business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of December 31, 2025, students enrolled at CTU represented approximately 67 % of our total enrollments. Approximately 98 % of CTU’s students are enrolled in programs offered fully online. Students at CTU's ground-based campuses take both in-person and virtual classes.
The American InterContinental University System (AIUS or AIU System) is committed to providing industry-relevant higher education opportunities for a diverse student population, including non-traditional adult learners and the military community. AIUS places emphasis on the educational, professional and academic growth of each student. AIUS offers academic programs in the career-oriented disciplines of business studies, information technologies, education, behavioral sciences and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of December 31, 2025, students enrolled at AIUS represented approximately 24 % of our total enrollments. Approximately 97 % of AIUS’ students are enrolled in programs offered fully online. Students at AIUS' ground-based campus take both in-person and virtual classes.
University of St. Augustine for Health Sciences (USAHS) is dedicated to offering graduate education opportunities in health sciences to a diverse range of students. USAHS focuses on developing professional healthcare practitioners through innovative and personalized classroom, clinical, and distance education opportunities. USAHS offers graduate degrees in health sciences, primarily in physical therapy, occupational therapy, speech-language therapy and nursing, along with continuing education programs and prepares professionals to serve and provide quality medical care to communities across the country. Students pursue their degrees through a network of campuses and through its online programs. As of December 31, 2025, students enrolled at USAHS represented approximately 9 % of our total enrollment s.
We evaluate segment performance based on operating results. Specifically, our CODM analyzes segment revenue and operating expenses which are directly attributable to the cost to serve and educate prospective students, when making decisions to allocate resources based on segment performance. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate and Other,” which primarily includes unallocated corporate activity. Substantially all revenue earned by our reporting segments are generated in the United States of America (“ U.S .”) and segment and total assets are substantially held in the
104
U.S. Additionally, interest, net and other miscellaneous income (expense) are not material by segment and are not reviewed by our CODM by segment.
Summary financial information by reporting segment is as follows (dollars in thousands):
Revenue
Operating Income (Loss)
Depreciation
and
Amortization
Capital Expenditures
Total Assets (1)
For the Year Ended December 31, 2025
CTU (2)
$
461,602
$
180,597
$
5,563
$
5
$
172,405
AIUS (2)
226,220
35,950
5,466
148
170,825
USAHS (3)
157,576
3,211
30,316
5,514
287,985
Corporate and Other
698
( 23,758
)
282
2,909
616,502
Total
$
846,096
$
196,000
$
41,627
$
8,576
$
1,247,717
For the Year Ended December 31, 2024
CTU (2)
$
443,374
$
174,686
$
5,618
$
125
$
175,115
AIUS (2)
227,072
32,756
6,186
143
164,985
USAHS (3)
10,041
( 2,640
)
2,516
311
306,552
Corporate and Other
776
( 30,549
)
325
4,046
590,382
Total
$
681,263
$
174,253
$
14,645
$
4,625
$
1,237,034
For the Year Ended December 31, 2023
CTU (2)
$
456,169
$
150,699
$
8,404
$
141
AIUS (2)
253,057
38,592
8,149
704
USAHS (3)
-
-
-
-
Corporate and Other
778
( 38,845
)
334
5,566
Total
$
710,004
$
150,446
$
16,887
$
6,411
__________________
(1) Total assets are presented on a consolidated basis and do not include intercompany receivable or payable activity between institutions and corporate and investments in subsidiaries.
(2) The prior period operating results for CTU and AIUS were recast to reflect the transition of Hippo Education from CTU to AIUS.
(3) USAHS includes results of operations starting from the acquisition date on December 2, 2024 .
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Significant expense category by reporting segment is as follows (dollars in thousands):
For the Year Ended December 31, 2025
Significant expense categories
CTU (1)
AIUS (1)
USAHS (2)
Academics and student related
$
61,323
$
45,639
$
64,465
Advertising and marketing
54,771
42,904
15,183
Admissions
48,092
35,541
5,324
Administrative (3)
89,458
46,555
21,405
Bad debt
19,441
9,607
442
Depreciation and amortization
5,563
5,466
30,316
All other expenses (4)
2,357
4,558
17,230
For the Year Ended December 31, 2024
Significant expense categories
CTU (1)
AIUS (1)
USAHS (2)
Academics and student related
$
59,904
$
45,331
$
5,343
Advertising and marketing
54,662
45,120
1,181
Admissions
46,118
35,141
524
Administrative (3)
78,701
42,021
1,476
Bad debt
19,907
13,612
201
Depreciation and amortization
5,618
6,186
2,516
All other expenses (4)
3,778
6,905
1,440
For the Year Ended December 31, 2023
Significant expense categories
CTU (1)
AIUS (1)
USAHS (2)
Academics and student related
$
67,016
$
51,473
$
-
Advertising and marketing
63,198
39,390
-
Admissions
50,157
41,202
-
Administrative (3)
79,249
54,391
-
Bad debt
20,203
13,028
-
Depreciation and amortization
8,404
8,149
-
All other expenses (4)
17,243
6,832
-
__________________
(1) The prior period operating results for CTU and AIUS were recast to reflect the transition of Hippo Education from CTU to AIUS.
(2) USAHS includes financial information starting from the acquisition date on December 2, 2024.
(3) Administrative expense includes allocations from Corporate and Other.
(4) All other expenses primarily include occupancy and asset impairment.
18. SUBSEQUENT EVENTS
Stock Repurchase Program
On January 2, 2026, the Board of Directors of the Company approved a new common stock repurchase program, authorizing the Company to repurchase up to $ 100.0 million of its outstanding common stock on the open market (including without limitation the use of one or more trading plans adopted pursuant to Rule 10b5-1 promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Ac t”)) (the " Stock Repurchase Program "). This new Stock Repurchase Program, which expires on June 30, 2027 , replaces the previous $ 75.0 million stock repurchase program, which was approved on July 31, 2025.
The timing of purchases and the number of shares repurchased under the Stock Repurchase Program will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, the Company’s assessment of alternative uses of capital, regulatory requirements and other factors. Any such repurchases shall be in accordance with the terms of
106
Rule 10b-18 promulgated under the Exchange Act (including without limitation “block” purchases as defined pursuant thereto) and shall be made in accordance with all applicable laws and regulations in effect from time to time. The Stock Repurchase Program may be modified, suspended or discontinued at any time in the Company's discretion without prior notice, and does not commit the Company to repurchase shares of its common stock. The actual number and value of the shares to be purchased will be determined by the Company at its discretion and will depend on a number of factors including the performance of the price of the Company's common stock, other market conditions, the availability and economics of alternative investment opportunities and other factors the Company deems appropriate.
Letter of Credit Release
On January 16, 2026, USAHS was notified by the Department that they are no longer required to maintain its existing letter of credit in the amount of $ 20.5 million and thus these funds are no longer restricted as of the date of the letter.
PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES
Schedu le II
Valuation and Qualifying Accounts
(dollars in thousands)
Description
Balance,
Beginning of
Period
Additions/Charges to Expense
Deductions/
Other
Balance,
End of
Period
Valuation allowance for deferred tax assets:
For the year ended December 31, 2025
$
12,041
$
-
$
( 517
)
$
11,524
For the year ended December 31, 2024
$
14,022
$
-
$
( 1,981
)
$
12,041
For the year ended December 31, 2023
$
22,536
$
-
$
( 8,514
)
$
14,022
Valuation allowance for credit losses:
For the year ended December 31, 2025
$
43,520
$
29,492
$
( 27,601
)
$
45,411
For the year ended December 31, 2024
$
37,782
$
33,719
$
( 27,981
)
$
43,520
For the year ended December 31, 2023
$
43,141
$
33,215
$
( 38,574
)
$
37,782
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