Revenue from Contracts with Customers

3 Months Ended

Mar. 31, 2026

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company generated 78% of its revenue from U.S. domestic sales for each of the three months ended March 31, 2026 and 2025, respectively. The remaining 22% of revenue was generated from non-U.S. sales for the three months ended March 31, 2026 and 2025.

For each of the three months ended March 31, 2026 and 2025, the Company recognized 54% of its revenue over time as control of the services and goods transferred to the customer, and the remaining 46% at a point in time, when the customer obtained control of the promised goods.

Contract Assets. As of March 31, 2026, the Company recognized a contract asset of $28.5 million related to a contract at a Kaplan International business, of which $5.1 million is included in Other current assets and $23.4

million is included in Deferred Charges and Other Assets. The Company expects to recognize an additional $211.7 million related to the remaining performance obligation in the contract over the next three years. As of December 31, 2025, the contract asset was $36.5 million, of which $4.4 million was included in Other current assets and $32.1 million was included in Deferred Charges and Other Assets. Additional contract assets of $2.7 million and $3.0 million are included in Other current assets on the Company’s Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025, respectively.

Deferred Revenue. The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance which includes some payments that are refundable due to the contractual right of the customer to cancel the agreement. As of March 31, 2026 and December 31, 2025, 15% and 22%, respectively, of the Company’s deferred revenue consisted of prepaid amounts which are refundable. The following table presents the change in the Company’s deferred revenue balance:

	As of
	March 31, 2026		December 31, 2025		%
(in thousands)					Change
Deferred revenue	$	369,183	$	418,090	(12)

The majority of the change in the deferred revenue balance is related to the cyclical nature of services in the Kaplan International division and the reclassification of deferred revenue included in the KLG disposal group (see Note 2), offset by increases in the Supplemental Education division. During the three months ended March 31, 2026, the Company recognized $218.0 million related to the Company’s deferred revenue balance as of December 31, 2025, including $31.2 million of prepaid amounts which were refundable at the prior year-end.

Revenue allocated to remaining performance obligations represents deferred revenue amounts that will be recognized as revenue in future periods. As of March 31, 2026, the deferred revenue balance related to certain medical and nursing qualifications with an original contract length greater than twelve months at Kaplan Supplemental Education was $6.0 million. Kaplan Supplemental Education expects to recognize 56% of this revenue over the next twelve months and the remainder thereafter.

Costs to Obtain a Contract. The following table presents changes in the Company’s costs to obtain a contract asset:

(in thousands)	Balance at Beginning of Period		Costs associated with new contracts		Less: Costs amortized during the period		Other		Balance at End of Period
2026	$	42,404	$	21,832	$	(25,035)	$	(2,627)	$	36,574

The majority of other activity was related to the reclassification of costs to obtain contracts assets included in the KLG disposal group (see Note 2) and currency translation adjustments for the three months ended March 31, 2026.