Lincoln Educational’s second quarter was marked by robust revenue growth, but the market responded negatively due to slower-than-expected student start growth. Management pointed to a combination of process issues, including financial aid packaging delays and students defaulting on existing loans, as key contributors. CEO Scott Shaw explained, “We had about a 9% increase in enrollment. Unfortunately, based off of start rates had held to where they have been historically, we would have had 9% growth in our starts.” The company also cited evolving student search behavior, such as increased use of AI tools, as a factor in lead conversion challenges.
Is now the time to buy LINC? Find out in our full research report (it’s free for active Edge members).
Lincoln Educational (LINC) Q2 CY2026 Highlights:
- Revenue: $142.6 million vs analyst estimates of $138.9 million (22.4% year-on-year growth, 2.6% beat)
- EPS (GAAP): $0.06 vs analyst estimates of -$0.01 (significant beat)
- Adjusted EBITDA: $12.72 million vs analyst estimates of $10.75 million (8.9% margin, 18.3% beat)
- The company reconfirmed its revenue guidance for the full year of $595 million at the midpoint
- EPS (GAAP) guidance for the full year is $0.78 at the midpoint, roughly in line with what analysts were expecting
- EBITDA guidance for the full year is $78 million at the midpoint, in line with analyst expectations
- Operating Margin: 2.3%, in line with the same quarter last year
- Enrolled Students: up 4,548 year on year
- Market Capitalization: $949.7 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Lincoln Educational’s Q2 Earnings Call
- Alex Paris (Barrington Research): Asked about the impact of apprenticeship models and direct employer hiring on student demand. CEO Scott Shaw replied that, while employer interest is rising, apprenticeship programs have not materially affected Lincoln’s enrollment pipeline.
- Luke Horton (Northland Capital Markets): Inquired about the extent to which AI-driven search changes contributed to the slowdown in student starts. Shaw acknowledged the impact but emphasized ongoing website and content updates to improve AI-driven lead generation.
- Luke Horton (Northland Capital Markets): Followed up regarding the drivers behind revenue per student growth. CFO Brian K. Meyers explained that tuition increases averaged 2–3% and that changes in the timing of start classes and tool revenue also played a role.
- Steven Frankel (Rosenblatt Securities): Pressed on whether the start growth shortfall was due to lead or process issues. Shaw clarified that while leads decelerated, most of the gap was due to process and financial aid packaging challenges, not regional or program concentration.
- Eric Martinuzzi (Lake Street Capital Markets): Queried about regional or program-specific start weakness and retention improvements. Shaw confirmed the softness was system-wide and attributed retention gains to expanded student support services and initiatives.
Catalysts in Upcoming Quarters
Looking forward, our analyst team will be watching (1) whether recent improvements in student start conversion are sustained into the third quarter and beyond, (2) the impact of high school recruitment investments on new student growth, and (3) the execution and ramp-up of new campus openings in markets like Suitland and Tempe. Adaptation to AI-driven marketing and ongoing retention improvements also remain key signposts for progress.
Lincoln Educational currently trades at $30.12, down from $40.99 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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