Lincoln Educational Services Corporation (LINC) Earnings Call Transcript & Summary

Hello, and welcome to the Lincoln Educational Services Second Quarter 2026 Earnings Call. [Operator Instructions] I would now like to hand the conference over to Michael Polyviou. You may begin.

Thank you, Towanda. Good morning, everyone. Before the market opened today, Lincoln Educational Services issued a news release reporting financial results for the first quarter -- excuse me, for the second quarter ending June 30, 2026, as well as recent corporate development. The release is available on the Investor Relations portion of the company's corporate website at www.lincolntech.edu. Joining us today on the call are Scott Shaw, CEO and President; and Brian Meyers, Chief Financial Officer and Executive Vice President. Today's call is being recorded and is being broadcast live on the company's website. A replay of the call will be archived on the company's website. Statements made by Lincoln's management on today's call regarding the company's business that are not historical facts may be forward-looking statements as the term is identified in federal securities laws. The words may, will, expect, believe, anticipate, project, plan, intend, estimate and continue as well as similar expressions are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance. The company cautions you that these statements reflect certain expectations about the company's future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond the company's control, and may influence the accuracy of the statement and projection upon which the segmented statements are based. Factors that may affect the company's results include, but are not limited to, the risks and uncertainties discussed in the Risk Factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements are based on the information available at the time those statements are made and management's good faith belief as of the time with respect to future events. All forward-looking statements are qualified in their entirety by this cautionary statement, and Lincoln undertakes no obligation to publicly revise or update any forward-looking statement, whether as a result of new information, future events or otherwise after the date thereof. One other housekeeping matter. During the Q&A portion of the call today, we would ask questioners to limit themselves to two questions and then re-queue to ask any additional questions. In advance, we thank you for our operation. Now I'd like to the call over to Scott Shaw, CEO and President of Lincoln Educational Services. Scott, please go ahead.

Thank you, Michael, and good morning, everyone. Thank you for joining us today to recap the progress Lincoln has made towards achieving our goals for 2026 as well as continued progress towards the 2030 targets we communicated earlier this year. We had a strong second quarter as we generated 22.4% revenue growth, 42.4% adjusted EBITDA growth and increased net income 25% over prior year quarter levels. We also realized a $22 million improvement in operating cash flow for the quarter and further boosted our liquidity and resources to execute our growth strategies with the expansion of our credit facility. As a result of our performance during the quarter and first half of the year and current trends, we are reiterating our full year guidance while we increase our capital expenditure outlook to advance strategic growth initiatives. Brian will share -- sorry, Brian will review our guidance in full during his comments. Lincoln Tech is leading the way in an evolving skilled trades marketplace as we have for the past 80 years. As a recognized leader of education and training services for safe and demand rewarding careers in the skilled trades, transportation and health care fields, we are benefiting from the continuously expanding interest across America as the demand for skilled workers exceeds supply. We have focused our strategies on simplifying operations to maximize graduate opportunities and skilled trades, which have the highest demand. Our focused programs are for trades expected to remain in high demand as the effects of artificial intelligence deployment impacts white collar and other jobs across the country. During the first quarter of this year, we achieved student start growth of nearly 20%, and we expected second quarter start growth to moderate to approximately half this rate, while enrollments for the quarter did grow at approximately 9%, our start growth slowed to 1%. Throughout the quarter, we identified changes in our leads and took action to ensure that prospective students were receiving accurate information to make the best decision for their future. With that said, the environment is dynamic as students utilize new AI tools in search for new career opportunities. The good news is that our strong brand and outcomes continues to drive up our organic leads and changes we are making to our website and other digital communications will further enable the large language models to better recognize and highlight our differentiation and superior outcomes. As we look to our second half, we see positive signs that our actions are improving our lead generation results. As per our start calendar, we had very few classes starting in July, but we have a very robust August, which we are expecting to be our company's largest in history. Given what we have achieved in the first half of the year, and what looks like a return to robust growth in the third quarter, we remain confident in our full year student start growth guidance of 10% to 14%. A contributing factor to August projected strong starts is our reinvigorated high school recruiting platform. Last summer, we started an overhaul and expansion of our high school recruiting team, given renewed interest by students, parents and even guidance counselors in the skilled trades. At present, we expect our high school starts in the third quarter to be up more than 15%. While we see improvement this year from these investments, we expect even more growth next year as the teams build on their relationships and reach even more prospective students. During the quarter, we continued to execute our new campus development projects in Hicksville, New York and Rowlett, Texas. Hicksville remains on schedule to begin enrollment during the fourth quarter of this year, while Rowlett should begin enrolling students in the first quarter of next year. Our efforts to identify suitable facilities in our underserved markets remain at a high pace. And during the quarter, we added another leg to our new market development strategy with the signing of a lease for our focused program campus in Suitland, Maryland. At 36,000 square feet of space, the Suitland campus is approximately 50% of the size of our traditional campus facility and will initially offer electrical systems technology and heating, ventilation and air conditioning programs to meet the exploding demand for employees trained in the skilled trade areas in the metropolitan Washington, D.C. area. The Suitland campus is our second in Maryland, and we are hopeful it will generate similar marketing synergies that we continue to generate in the Metropolitan Atlanta market with our East Point and [ Marietta campuses. The focused program development strategy being deployed in Suitland expected to involve a $10 million capital investment versus our traditional campus development investment of approximately $25 million and should produce about $5 million of EBITDA within three years. We are already building out the facility and planned to open during the fourth quarter of 2027. With the development of the Focus campus initiative, we've increased our expansion opportunities within and beyond the top 25 MSAs. I'm also pleased to announce that we are finalizing a lease for a 90,000 square foot facility in [ Tempe, Arizona, which is our first campus in Arizona. We expect it to open by the first quarter of 2028 to serve the greater Phoenix market. This campus will be similar to our Hicksville and Rowlett campuses, offering automotive, electrical, HVAC and welding. Meanwhile, our other growth initiatives continue to progress. We've recently added another member to our corporate development team and are advancing discussions with several corporations involved in developing the data center infrastructure needed to support the growing demands of AI organizations. Not only are our employees trained and electrical, HVAC and welding needed to build the centers, the electrical and HVAC trades are needed to maintain the centers to high-performance standards. Given Lincoln Tech's track record at enrolling, supporting, graduating and placing students, we are excited about helping corporations maximize their potential through providing exceptionally trained skilled trade employees. Our leadership in skilled trades training is increasingly being recognized by third parties. For instance, in July, our Melrose Park, Illinois campus was included in USA TODAY's America's top vocational schools for 2026. It was the second year in a row Melrose Park achieved inclusion in the list and comes after 81% of the campuses 600 graduates were hired for careers in their field. The USA TODAY survey evaluates career training schools based on five criteria, including graduation rate graduate salaries, diversity within the student body, anticipated years to pay off the program costs and social mobility. In addition, our Grand Prairie Texas campus was named a School of Excellence by the Accrediting Commission of Career Schools and Colleges, recognizing the campus' outstanding performance during its reaccreditation renewal. Earlier, I mentioned the success of our direct high school student recruiting efforts. In addition, we continue to generate substantial interest in our high school share program, where students attend Lincoln classes during their junior and senior years and then continue after high school to gain their certificate in less time, which accelerates their entry into a rewarding career. The list of interested school districts gets longer as we await funding decisions on some two dozen requested share proposals we have submitted to districts. If the proposals are accepted and funded, this will be another positive contributor to 2027. We continue to realize operating efficiencies across our Lincoln 10.0 hybrid teaching platform by providing students flexibility to those needing to balance work and life while earning their certificate or degree. We have achieved this flexibility by combining hands-on learning at campus facilities with a component of classroom work delivered through online instruction, which reduces the time needed to complete many of our curriculum and accelerates our graduates to their highly rewarding careers. While our Lincoln 10.0 hybrid teaching platform continues to realize instructional efficiencies for the company, our instructors and our students, we're also continuing to invest some of the savings gained from these efficiencies back into our campuses with expanded programs, processes and staffing to continuously drive improved student outcomes. Emotional and life support to help students face the challenges they experienced in pursuing a new career while holding down a job and/or raising a family are offered, and we believe this service is positively impacting our student retention rate at our programs open for more than a year, helping to build our already high graduation rate. Striving to provide the best education and training for safe, rewarding and in-demand careers continues to drive our entire organization forward. Achieving this quest has put us in a position to approach $600 million in revenue for the full year. Our momentum as well as the availability of resources from our recently increased credit facility brings us another step closer to achieving our 2030 objectives of $850 million in revenue and $150 million of EBITDA as we continue to expand our leadership position. After 80 years of providing high-quality, life-changing career education, we have amassed an unmatched combination of longevity, scale and proven experience. By continuing to execute our strategies to expand our network of schools and replicating our most in-demand programs at our existing campuses, we are providing a unique proven model to help America close its chronic and severe skills gap by meeting the growing demand for more talented men and women to enter the skilled trades. We have aggressively worked to increase the visibility of our message by those who can benefit from our training and career preparation and are constantly assessing how we can improve on our delivery. We've made substantial progress on this front in the past several weeks and are excited about the prospects for the second half of the year. Before I turn the call over to Brian, I'd like to note we will be continuing our investor outreach efforts over the next few months by attending conferences and conducting non-deal road shows and other events with our covering analysts. We will be participating at the Barrington and Lake Street conferences in September as well as a fireside chat with Northland. Now I'll turn the call over to Brian Meyers, so he can review the financial highlights for the second quarter and first half of 2026 and review our reiterated 2026 guidance. Brian?

Thank you, Scott, and good morning, everyone. I'll begin with a few recent developments, then review our second quarter 2026 financial results and discuss our outlook for the remainder of the year. As a reminder, during last year's second quarter earnings call, we noted that a change for our Lincoln 10.0 academic calendar shifted a star class that would typically have occurred in late June to July 1, 2025. To provide a more consistent comparison, we adjusted our second quarter 2025 student start to include that class. Accordingly, the second quarter 2026 starts discussed today are compared with those adjusted numbers. Starting with recent developments. As discussed on our last call, we have amended our credit facility in April significantly increasing our financial flexibility by more than doubling the revolving credit facility capacity to $125 million. As Scott mentioned, in June, we expanded our growth initiatives to include a new focused program campus model when we announced the lease of our new facility in Suitland, Maryland, which further expands our presence in Washington, D.C. metropolitan area. Subsequent to year-end, we also completed quarter end. We also completed the acquisition of the building housing our Melrose Park, Illinois campus, which we had previously leased. I'll provide more details on these transactions shortly. Now let's turn to our second quarter financial results. Our growing student population continue to drive strong revenue growth and EBITDA margin expansion in the second quarter. Operating income and net income also increased, although as previously communicated at a slower rate than our EBITDA due to the higher depreciation expense of our recent capital investments. Demand for our programs remains strong with our ending student population increasing by approximately 1,800 students or 10% year-over-year across our 22 campuses. Revenue increased 22.4% to $142.6 million during the quarter, marking more than three consecutive years of sustained double-digit quarterly revenue growth. The increase is primarily driven by a 14.5% growth in our average student population. As Scott noted, while we are reiterating our full year student stock growth guidance, our start rate was lower than expected during the second quarter. Despite high double -- high single-digit enrollments in line with our expectations heading into the quarter, a lower percentage of converted to starts. As a result, student starts increased 1% during the quarter and the lower stock volume contributed to a higher cost per start. In response, we have implemented actions to improve conversion to enrollment to start. While student start growth was softer than expected during the quarter, the impact was largely offset by a stronger retention among existing students. Through June, student attrition has improved by approximately 150 basis points compared with the prior year. These favorable retention trends kept our student population in line with expectations and supported our 22.4% revenue increase during the quarter. They also contributed to the strong student population, which is up over 10% compared to last year as we enter the third quarter supporting continued revenue growth. Looking ahead, we believe the actions we have taken, which Scott reviewed are gaining traction and early third quarter performance is encouraging. We currently expect student starts to return to low double-digit year-over-year growth in the third quarter, supported by improved lead trends, our investment in high school recruitment and strong enrollment conversion metrics. As Scott mentioned, these encouraging trends could result in one of the largest start classes in the company's history this month. We were also seeing a greater percentage of students at our upcoming Star class complete the financial aid package process earlier in the enrollment cycle. Historically, since our package earlier have converted their stocks at a higher rate. This encouraging trend combined with our broader initiatives to improve enrollment to stock conversion supports our confidence in our third quarter's student start outlook. It also reinforces our full year stock growth guidance of 10% to 14%. Operating expenses increased $22.6 million to $139.2 million, broadly in line with our revenue growth. These increased expenses were consistent with our budgeted expectations, reflecting our larger student population, continuing investments in growth initiatives, higher depreciation associated with our new facilities and the timing of book and toll expense. Adjusted EBITDA increased 42.4% to $12.7 million. As a reminder, our calculation of adjusted EBITDA no longer add back the losses related to new campuses in their preopening and initial year of operations. We incurred new campus losses of $3.1 million in the second quarter compared to losses of $1.3 million in the prior year quarter. Despite these additional investments, our adjusted EBITDA margin expanded slightly compared to the prior year. Net income was $1.9 million, up from $1.5 million in the prior year. Diluted EPS was $0.06 based on approximately 31.4 million weighted average diluted shares outstanding. As a reminder, due to the seasonality of our business, we typically generate most of our annual profits during the second half of the year. Year-to-date, capital expenditures totaled approximately $33.2 million, of which $29.1 million is reflected in the statement of cash flows. Spending that occurred in the second quarter was below plan primarily due to the timing of permits and weather-related delays, which shifted a significant portion of the planned expenditures into the third quarter. We do not anticipate these timing differences to result in any significant delays to our opening of our new campuses. Turning now to the balance sheet and financing activities. Building on the positive operating cash flow we generated in the first quarter, cash flow from operations totaled $26.6 million for the 6 months ended June 30, 2026, and compared with a use of $8.1 million in the prior year period, an improvement of nearly $35 million. We ended the quarter in a strong financial position with $44.2 million in cash and $99 million of availability under our expanded credit facility. This represents total liquidity of $143.2 million with $26 million of debt outstanding under the facility. The Focus Program campus model, we are creating in Suitland, Maryland, requires an estimate of $10 million in capital investments, which is less than half of the traditional campus build-out is projected to deliver an IRR of over 30% with a [indiscernible] to payback than our larger model campus due to a shorter construction time. At full ramp, the Suitland campus is expected to generate more than $50 million in revenue and $5 million in adjusted EBITDA and EBITDA. This compared to a traditional campus requiring approximately $25 million capital investments and generating $30 million in revenue and $10 million in EBITDA at full ramp. The acquisition in July of our Melrose Park, Illinois property for $18.8 million was funded with $15 million in new mortgage financing. When the property became available, we took the opportunity to secure an important long-term CapEx assets while improving our cash flow as the mortgage payments are now lower than our previously rent expense. Turning to our full year outlook. We are reiterating our guidance for all metrics except capital expenditures. We continue to expect revenue of $590 million to $600 million, adjusted EBITDA of $76 million to $80 million, net income of $23 million to $26 million, diluted EPS of $0.74 to $0.83 and student stock growth of 10% to 14%. As mentioned earlier, beginning in 2026, our calculation of adjusted EBITDA no longer excludes preopening and first year losses from new campuses. More quarterly, our guidance now includes approximately $10 million in new campus losses, which continues to be in line with our expectations and excludes only noncash stock-based compensation. As we go to our capital expenditures guidance, we are increasing it from $70 million to $75 million to $95 million to $100 million. The increase reflects the $18 million purchase of the Melrose Park property and the anticipated 2026 spend of our Suitland, Maryland campus. Growth initiatives represent approximately 75% of our planned capital expenditures, underscoring our continued focus on expanding capacity and supporting future enrollment. As additional campus locations are announced, we will update our capital expenditure plans accordingly. In closing, we remain focused on executing our growth strategies and achieving our 2030 objectives of $850 million in revenue and $150 million of adjusted EBITDA. We appreciate the dedication of our team and their continued commitment to delivering our high-quality education and strong outcomes for our students. With that, we'll turn the call over to the operator for questions. Operator?

[Operator Instructions] Our first question comes from the line of Alex Paris with Barrington Research.

I have a couple and they are related. First question, given the announcements of UTI in the trade school space last week also, you deferred by having a stronger health -- high school start season. than they. But I'm also wondering about shift from auto diesel to skilled trades, which your competitor noted last week. And then also, our employers hiring more potential students directly. Some of these announcements that we have all seen in the press, quasi apprenticeship programs, they get paid while they're getting their training, maybe you can compare and contrast the two different approaches.

Sure. So first on high school, I mean, as I mentioned in my remarks, I mean, last year, we made a concerted effort to invest more in our high school market. We have about 20% of our students that are historically coming to us right out of high school. Some of our competitors have more than that. So we saw an opportunity to gain more growth by expanding that, especially in a time when the high school students and faculty and parents and guidance counselors are all more receptive to our message. So we did change our approach. We bolstered our team, and we continue to invest in that place -- in high school recruiting efforts. And we expect, as I said, to have really strong August start. A lot of that growth is coming from high school, and we expect that to continue. And we expect, frankly, next year to have more growth because the high school marketplace really requires talented individuals that remain employed with you as they build relationships at these high schools and the longer and stronger those relationships are, the more success you will have. And we're starting to see that. And with regards to skilled trades versus automotive, I mean, for the last, frankly, a couple of years, we've been seeing a continual shift with more interest in the skilled trades. And I think we've shared this a little bit, but today, when you look at our population, we're about 60% skilled trades, 20% health care and 20% automotive. And our skilled trades, I mean, we've been doing sealed trades for 80 years. HVAC started back in 1946. So I think we have a really good handle on the trades and our trades are, frankly, our most profitable business, both as a margin as well as absolute dollar contributions to the bottom line. So as that trend has continued, that has benefited us, frankly, as an organization. And part of our focused campus model is frankly to help leverage that opportunity because it's a lot easier for us to find facilities that we can open up an HVAC and electrical programs than facilities that have automotive and welding as well. That requires some additional height capacity and other things for those other two programs. So anyway, long story short, trades are very important to us. Trades are critical to our further growth, and we do quite well with them. And then I forget, Alex, you had a third part to your question.

Apprenticeship.

Apprenticeship.

Yes, apprenticeship. Historically, your competition came from community colleges, but their capacity constrained. I'm wondering what sort of competition you're seeing from employers directly hiring and training.

Yes. So I've read about it. We haven't seen the impact of that or really taking hold at any material way as far as how it might be impacting us. We are certainly having more and more discussions with our existing employers as well as finding new employers because I'm fully on board that companies should be supporting students while they're with us and certainly after us with helping them with their financing of their indication. But we're also just seeing such strong demand on the back side. I mean we're forming a new -- we formed a new partnership with an organization that supports AI. They started off they want to hire 10 students a week from us, but they want to ramp it up to 20 as quickly as possible, and they're paying between $70,000 and $100,000 for our graduates, which is just an incredible opportunity for people. The only reason why I just mentioned that is that there is going to be more and more opportunity, I think, to tap into our existing employers and future companies that we connect with to help finance our students' education. But long story short, we have not seen anything that indicates that somehow the apprenticeship model is, I'll say, taking a big piece of the pie in any stretch of imagination.

Okay. And then my related follow-up and last question, I promise, is I think there's some deliberate language in the press release, our start growth for the quarter has slowed to 1% as fewer enrolled students than expected attended the first-day class. This is what we've set called the show rate. You have a conversion from a lead to an application and then a conversion from an application to a start. So it sounds like that's where the issue is. Can you explain that a little bit? And what are you doing differently with enrollment counselors to improve that enrolled student to start.

Sure. Yes. So as we said there, we had about 9% increase in enrollment. And unfortunately, based off the start rates had held to where they've been historically, we would have had 9% growth in our starts. The softness comes from multiple sources. One Brian mentioned, we're doing a much better job with packaging our students, getting on the financial aid. The sooner students know what they how they're going to pay for their education, the more certain they are to start with us. So we're definitely working on that. We're also working with our admissions folks as well as some of our educators to stay in contact with students, stitching events, making sure that they know that this is a good opportunity for them that they can complete the education so that they end up starting with us. There are also other touch points we are enhancing and making more broadly available to students. But I also will tell you, there was an event that kind of kicked in and happened and impacted us, and it will exist going forward, but I'm anticipating that it will be less. And what happened is, as you know, the government did require students to start repaying their loans back in May. And what that has resulted in is now that we're more than, let's say, 9, 10 months later, those students, some of them have defaulted. And defaulted students are not allowed or do not have the ability to take on any more title or funds. So we did see a few percentage points of our students no longer be able to start with us because as we were packaging them, they couldn't get a more financial aid, which, as you know, we have a lot of adult students that have gone to community colleges or other paths. And unfortunately, I guess they got conditioned like a lot of people over the last 5 years that you didn't have to repay your debt. And then when the government required them to repay their debts, they ended up defaulting. So I'm assuming that, that wave -- initial wave is going to be the biggest impact there, and then that should lessen over time. But that was also one of the factors, Alex, that softened our start rate in the second quarter.

Our next question comes from the line of Luke Horton with Northland Capital Markets.

Did want to touch back on the student starts growth for the quarter? And can you just talk about the dynamic of the increasing usage of AI search. How much of the start softness in the quarter do you think was directly attributed to that? And then also, I guess, kind of how much of a headwind from that are you baking into the back half of the year here?

Sure. So the AI, it's tough to know exactly what the exact impact was. I mean, we certainly saw some of our lead volume slow down a bit in the quarter. AI incredible technology, but in many regards, it's as good as the prompts you give it. And when we do a lot of searching on our own, just to understand how they interpret what people are typing in. The good news is we see that Lincoln Tech pops up more times than not as a great opportunity for people. However, with that said, we also see that sometimes the AI models are simplistic and what they look at is the cost in which case they may highlight a community college over us. Now as we all know, there's a lot of benefits for coming to a school like ours. First, our graduation rates are 2x to 3x that of community college if you're an adult looking to change your life, you might have to wait until September or January to start in a community college versus start within 30 days of reaching out to us. These models don't tell you that you may have to start off just taking Gen Ed courses before you can get into the skilled trade programs that you want. My point being is they're not necessarily getting the full picture. So what we're doing is trying to change what's available on our website so that these large language models can give students a better insight into what a career or opportunity Lincoln versus other things. And we're starting to see some improvement in the leads because of that and some additional attraction to us. At the end of the day, though, we have a superior product, and we know our product, frankly, today is better than it's ever been. The challenge as you -- we are facing and some others is just getting in front of the people to make sure that they understand that. And so we're going to continue to work with our vendors, continue to tweak our websites to make all the data is readily available as possible for the large language models to read. And as we just said, we do see a much stronger August than we've ever seen before. So I interpret that as we are making progress, but there's still more work to be done.

Got it. Okay. And then lastly for me, just on revenue growth of north of 22% on enrollment growth of about 9%, it kind of implies a meaningful revenue per student uptick. I guess could you just kind of walk us through, I guess, how much of that gap is tuition pricing? Or if you guys have pricing power here with just kind of the strong demand versus program mix shift or anything else that we could be missing on that front?

Hi, Luke. Yes, so tuition increases are 2% to 3% historically. We look at all our programs and programs that are a little bit more demand, get a little bit higher tuition going forward and some are -- there's competition, everything else, it could be a little bit lower. So it is -- it does average 2% to 3%. But what happened in the quarter is that we got a benefit from that one start that happened in July of last year that we pro forma-ed for into 2025 into the second quarter. So we got a couple of days of revenue from that, but we also got all the book and tool revenue from that, a lot of the tool revenue we earn when we give it out. So about half of the -- I'll say, the increase came from that additional start class, the shift in start class the other half was for tuition increases that helped our revenue per student.

But just to be clear, our tuition increases on average is around 2% to 3% kind of across the board for all of our programs.

[Operator Instructions] Our next question comes from the line of Steven Frankel with Rosenblatt Securities.

Scott, I'd like to go back at this Q2 start issue 1 more time. And maybe going parse it this way. How much of the shortfall was a leads issue versus a process issue, like you talked about maybe either default or not getting financial aid done at the right time?

Yes. So well, as I said, from a numbers perspective, we had 9% increase in enrollment. So if the start rate had held, we would have had 9% growth in starts, and that was kind of rise in line with what we anticipated. With that said, we also were anticipating, frankly, more enrollment growth from the lead volume that we had been seeing in the prior quarter. So overall, some -- the leads started to lessen within the quarter which frankly lessened the absolute number of enrollments were hoping to possibly achieve. But as far as the exact number, again, the 9% to 1%, those are process. Those are the fact that some of the defaulted students couldn't start from -- they defaulted someone from taking out loans at another institution and then the processing of the financial aid for our students just to get more through the door as well as there's always something else that I'm just basing that off of what we know. But certainly, there could be some changes because of the AI that maybe the students that we have enrolled have some different perspectives on things. We were not 100% sure. All I can tell you is that the growth that we're seeing and anticipating in Q3 certainly tells me that we've solved part of that problem. And we're going to continue to work to make sure that we can be as robust as possible because we just know from talking to employers that demand is greater than it's ever been. And from, frankly, talking to prospective students, we know there's a strong interest.

Okay. And then in terms of that Q3 strength. High school is typically what percentage of the overall starts in Q3?

About 40%.