LEASES

12 Months Ended

Dec. 31, 2025

6. LEASES

The Company enters into contracts to utilize office space, educational facilities, and various items of equipment under lease agreements and accounts for them in accordance with ASC 842, Leases (“ASC 842”). To determine whether a contract contains a lease, the Company assesses whether there is an identified asset and whether the Company has the right to control its use throughout the period of use. The Company classifies leases as either operating or finance leases at lease commencement date in accordance with ASC 842. As required under ASC 842, the Company recognizes a ROU asset and a corresponding lease liability on the balance sheet, measured at the present value of lease payments over the term of the lease. An operating lease ROU asset represents the Company’s right to use the underlying asset during the lease term and the corresponding lease liability represents its obligation to make lease payments. Operating lease ROU assets and liabilities are amortized over the lease term, with lease expense recognized on a straight-line basis within operating expenses in the Consolidated Statement of Operations and Comprehensive Income. Finance lease arrangements result in separate recognition of interest expense on the lease liability using the effective interest method and amortization expense of the ROU asset on a straight-line basis over the lease term, in addition to principal payments.

As all of the Company’s operating leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available on the commencement date in determining the present value of lease payments. We estimate the incremental borrowing rate based on a yield curve analysis, utilizing the interest rate derived from the fair value analysis of our credit facility and adjusting it for factors that appropriately reflect the profile of secured borrowing over the expected term of the lease. The operating lease ROU assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Our leases have remaining lease terms of 1 year to 20 years. Lease terms may include options to extend the lease term used in determining the lease obligation when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments are recognized on a straight-line basis over the lease term for operating leases.

On September 28, 2023, the Company purchased a 90,000 square foot property located at 311 Veterans Highway, Levittown, Pennsylvania for approximately $10.2 million. On January 30, 2024, the Company entered into a sale-leaseback transaction for this property. See Note 8, “Real Estate Transactions”. As of December 31, 2023, this property was classified as held-for-sale on the Consolidated Balance Sheets.

On October 18, 2023, the Company entered into a lease for approximately 120,000 square feet of space. to serve as the Company’s new Nashville, Tennessee campus. The lease term commenced on November 1, 2023, with an initial lease term of 15 years. The lease contains two five-year renewal options. See Note 8, “Real Estate Transactions”.

On October 31, 2023, the Company entered into a lease for approximately 100,000 square feet of space to serve as the Company’s new campus in Houston, Texas. The lease term commenced on January 2, 2024, with an initial lease term of 21 years and 6 months. The lease contains three five-year renewal options.

On December 12, 2024, the Company entered into a lease for approximately 65,000 square feet of space to serve as the Company’s campus in Hicksville, New York. The lease term commenced on September 1, 2025, after the landlord completed preparation of the space, with an initial lease term of 15 years and 9 months. The lease contains a renewal option allowing for either a 10-year renewal or two five-year renewals. See Note 8, “Real Estate Transactions”.

On September 12, 2025, the Company entered into a lease for approximately 88,000 square feet of space to serve as the Company's campus in Rowlett, a northern suburb of Dallas, Texas. The lease term commenced on November 1, 2025, with an initial lease term of 15 years and five months. The Company will not take possession of the premises until the lease commencement date.

During the fiscal year ended December 31, 2025, the Company entered into four new operating leases. The Company obtained the operating right of use (“ROU”) asset in exchange for an operating lease liability of $27.4 million.

The following table presents components of lease cost and classification on the Consolidated Statement of Operations and Comprehensive Income:


		Year Ended December 31,
in thousands	Consolidated Statement of Operations and Comprehensive Income Classification		2025		2024		2023
Operating Lease Cost	Selling, general and administrative	$	20,716	$	19,665	$	19,235
Finance lease cost
Amortization of leased assets	Educational services and facilities		1,670		1,622		175
Interest on lease Liabilities	Interest expense		2,362		2,155		224
Variable lease cost	Selling, general and administrative		931		423		475
		$	25,679	$	23,865	$	20,109

The net change in ROU asset and operating lease liability is included in the net change in other assets in the Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2025, 2024, and 2023.

The net change in ROU asset and finance lease liability is split between principal payments, interest expense and amortization expense. Principal payments are classified in the financing section, interest expense is included in net income and amortization expense is broken out separately in the operating section of the Consolidated Statements of Cash Flows.

Supplemental cash flow information and non-cash activity related to our leases are as follows:


	Year Ended December 31,
	2025			2024		2023
Cash flow information:
Cash paid for amounts included in the measurement of lease liabilities
Operating Cash Flows - operating leases	$	14,149		$	17,989	$	16,103
Operating Cash Flows - finance leases	$	2,362		$	2,155	$	-
Financing Cash Flows - finance leases	$	(1,856	)	$	495	$	-

Non-cash activity:
Lease liabilities arising from obtaining right-of-use assets
Operating leases	$	27,362		$	59,061	$	10,477
Finance leases	$	-		$	12,570	$	15,971

Weighted-average remaining lease term and discount rate for our leases are as follows:


	As of
	Year Ended December 31,
	2025			2024
Weighted-average remaining lease term
Operating leases		13 years			13 years
Finance leases		16 years			16 years

Weighted-average discount rate
Operating leases		6.63	%		6.6	%
Finance leases		7.67	%		7.69	%

Maturities of lease liabilities by fiscal year for our leases as of December 31, 2025, are as follows:


	Operating Leases			Finance Leases
Year ending December 31,
2026	$	21,199		$	2,817
2027		21,416			2,918
2028		22,314			3,023
2029		20,621			3,132
2030		17,918			3,244
Thereafter		157,660			40,173
Total lease payments		261,128			55,307
Less: imputed interest		(88,381	)		(24,190	)
Present value of lease liabilities	$	172,747		$	31,117