Leases

6 Months Ended

Jun. 30, 2025

The Company has operating leases for office space and campus facilities and finance leases for certain copiers and printers. Leases are classified as operating leases unless they meet any of the criteria below to be classified as a finance lease:

•the lease transfers ownership of the asset at the end of the lease;

•the lease grants an option to purchase the asset that the lessee is expected to exercise;

•the lease term reflects a major part of the asset’s economic life;

•the present value of the lease payments equals or exceeds the fair value of the asset; or

•the asset is specialized with no alternative use to the lessor at the end of the term.

Operating Leases

The Company has operating leases for office space and campus facilities. Some leases include options to terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. The Company leases corporate office space in Florida, under an operating lease that expires in January 2029. The RU Segment leases administrative office space in Minneapolis, Minnesota, and leases 20 campuses located in six states under operating leases that expire through March 2034. The HCN Segment leases administrative office space in suburban Columbus, Ohio, and leases eight campuses located in three states under operating leases that expire through December 2034. GSUSA leases classroom and administrative office space in Washington, D.C. and Honolulu, Hawaii, under operating leases that expire through September 2036.

Operating lease assets are right-of-use assets, or ROU assets, which represent the right to use an underlying asset for the lease term. Operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating leases are included in the Operating lease assets, net, and Operating lease liabilities, current and long-term, on the accompanying Consolidated Balance Sheets. These assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate based on information available at lease commencement to determine the present value of the lease payments. The ROU asset includes all lease payments and excludes lease incentives.

Lease expense for operating leases is recognized on a straight-line basis over the lease term. There are no variable lease payments. Lease expense for the three and six months ended June 30, 2025 was $4.5 million and $9.4 million, respectively, compared to $4.3 million and $9.5 million for the three and six months ended June 30, 2024, respectively. These costs are primarily related to long-term operating leases but also include amounts for short-term leases with terms greater than 30 days that are not material. Cash paid for amounts included in the present value of operating lease liabilities during the three and six months ended June 30, 2025, was $4.8 million and $9.4 million, respectively, compared to $3.7 million and $8.2 million for the three and six months ended June 30, 2024, respectively, and is included in operating cash flows.

Loss on leases

During the three months ended March 31, 2024, the Company elected to terminate its RU Segment lease for a planned Dallas, Texas campus. The Company paid a lease termination fee of $2.2 million and recorded a loss of $2.1 million as a result of this lease termination. Additionally, in the first quarter of 2024, the Company’s RU Segment began consolidating two Minnesota campuses, and, as a result, during the three months ended June 30, 2024, the Company paid a lease termination fee of $1.2 million related to the consolidation. As a result of the consolidation and lease termination, during the three and six months ended June 30, 2024, the Company recorded a loss on leases of $0.4 million and $1.2 million, respectively.

In May 2024, RU notified the Wisconsin Educational Approval Program that it intends to voluntarily close two Wisconsin campuses, effective December 31, 2025, and 2026, respectively. As a result, the Company recorded a lease impairment of $0.4 million during the three months ended June 30, 2024.

During the three and six months ended June 30, 2024, the total loss on leases was $0.8 million and $3.7 million, respectively, and is included in Loss on leases in the Consolidated Statements of Income. There was no loss on leases during the three and six months ended June 30, 2025.

Finance Leases

The Company leases copiers and printers pursuant to leases that are classified as finance leases and that expire in 2027. The Company pledged the assets financed to secure the outstanding leases. As of June 30, 2025, the total finance lease liability was $0.3 million, with an average interest rate of 7.00%. The ROU assets are recorded within Property and equipment, net on the accompanying Consolidated Balance Sheets. Lease amortization expense associated with the Company’s finance leases was $0.1 million for both the three and six months ended June 30, 2025, and 2024, and is recorded in Depreciation and amortization expense in the accompanying Consolidated Statements of Income.

The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of June 30, 2025 (in thousands):


Maturity of Lease Liabilities (Unaudited)	Operating Leases		Finance Leases
2025 (remaining)	$	9,569	$	107
2026	18,316		213
2027	17,204		36
2028	15,887		—
2029	13,694		—
2030	13,946		—
2031 and beyond	39,605		—
Total future minimum lease payments	$	128,221	$	356
Less: imputed interest	(26,948)		(22)
Present value of operating lease liabilities	$	101,273	$	334
Less: lease liabilities, current	(13,251)		(196)
Lease liabilities, long-term	$	88,022	$	138


Balance Sheet Classification (Unaudited)
Current:
Operating lease liabilities, current	$	13,251
Finance lease liabilities, current	196
Long-term:
Operating lease liabilities, long-term	88,022
Finance lease liabilities, long-term	138
Total lease liabilities	$	101,607


Other Information (Unaudited)
Weighted average remaining lease term (in years):
Operating leases	7.66
Finance leases	1.66
Weighted average discount rate:
Operating leases	5.6	%
Finance leases	7.0	%