LEASES

9 Months Ended

Sep. 30, 2026

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 the 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 Condensed Consolidated Statements of Operations. 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 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 is recognized on a straight-line basis over the lease term for operating leases.

The following table presents components of lease cost and classification on the Condensed Consolidated Statements of Operations:


		Three Months Ended September 30,				Nine Months Ended September 30,
in thousands	Consolidated Statement of Operations Classification	2026		2025		2026		2025
Operating lease cost	Selling, general and administrative	$	5,580	$	5,114	$	17,322	$	15,085
Finance lease cost
Amortization of leased assets	Educational services and facilities		418		418		1,253		1,253
Interest on lease liabilities	Interest expense		587		596		1,769		1,769
Variable lease cost	Selling, general and administrative		238		234		744		695
		$	6,823	$	6,362	$	21,088	$	18,802

The net change in ROU asset and operating lease liability is included in the net change in other assets in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025.

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:


	Nine Months Ended September 30,
	2026		2025
Cash flow information:
Cash paid for amounts included in the measurement of lease liabilities
Operating Cash Flows - operating leases	$	13,887		12,509
Operating Cash Flows - finance leases	$	1,769		1,769
Financing Cash Flows - finance leases	$	340		(1,945	)

Non-cash activity:
Lease liabilities arising from obtaining right-of-use assets
Operating leases	$	8,622	$	12,309

During the nine months ended September 30, 2026, the Company entered into two new operating leases. The Suitland, Maryland lease commenced during the period, and the Tempe, Arizona lease which had not commenced as of September 30, 2026. Additionally, there were two operating lease modifications during the nine months ended September 30, 2026 relating to other campuses.

On June 30, 2026, the Company entered into a lease for approximately 36,000 square feet of space in Suitland, Maryland, located in the Washington, D.C. metropolitan area, to serve as the Company's second campus in the region. The lease commenced in September 2026, with an initial lease term of 15 years and 7 months.

On August 11, 2026, the Company entered into a lease for approximately 90,000 square feet of space in Tempe, Arizona, located in the Phoenix metropolitan area, to serve as the Company’s first campus in Arizona. The lease term commenced in October 2026, with an initial lease term of 13 years and 1 month.

On July 7, 2026, the Company acquired its previously leased campus property in Melrose Park, Illinois. In connection with the acquisition, the Company derecognized the related operating lease right-of-use asset and lease liability of $9.6 million and $11.0 million, respectively. In accordance with ASC 842-20, the difference between the purchase price and the carrying amount of the lease liability was recorded as an adjustment to the carrying amount of the acquired property, and no gain or loss was recognized.

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


	As of September 30,
	2026			2025
Weighted-average remaining lease term
Operating leases		13 years			16 years
Finance leases		15 years			13 years

Weighted-average discount rate
Operating leases		6.64	%		6.60	%
Finance leases		7.66	%		7.67	%

Maturities of lease liabilities by fiscal year for our leases as of September 30, 2026 are as follows:


Year ending December 31,	Operating Leases			Finance Leases
2026 (excluding the nine months ending September 30, 2026)	$	5,374		$	708
2027		21,400			2,918
2028		22,440			3,023
2029		20,589			3,132
2030		17,654			3,244
2031		16,495			3,361
Thereafter		143,131			36,812
Total lease payments		247,083			53,198
Less: imputed interest		(82,262	)		(22,421	)
Present value of lease liabilities	$	164,821		$	30,777