Lincoln Educational Services (LINC) Q3 2025: New Campus Expansion Drives 25% Revenue Growth and Raises 2027 Target Above $600M
Lincoln Educational Services delivered another quarter of robust student start growth, campus expansion, and margin improvement, prompting a guidance raise and a new long-term revenue target above $600 million for 2027. Strong demand for skilled trades programs, effective cost leverage from the Lincoln 10.0 hybrid model, and rapid ramp at new campuses all contributed to the outperformance. Management’s tone and capital allocation point to a business model increasingly insulated from sector headwinds and focused on organic execution and high-ROI expansion.
Summary
- Campus Expansion Outpaces Plan: New and relocated campuses are delivering faster-than-expected enrollment and returns.
- Skilled Trades Demand Accelerates: Core transportation and skilled trades programs continue to outgrow legacy segments.
- 2027 Ambition Raised: Leadership targets >$600M revenue and >$90M EBITDA, reflecting conviction in scalable growth.
Performance Analysis
Lincoln Educational Services posted a 25% revenue increase in Q3 2025, with enrollment growth and improved operational leverage at the core. Student starts rose 6% despite a challenging comparison to last year’s 22.5% surge, marking the twelfth consecutive quarter of growth. The company’s average student population grew nearly 20%, while ending population increased 17% to approximately 18,200, demonstrating strong demand and effective scaling of new and existing programs.
Skilled trades and transportation programs drove an 11.8% increase in starts, offsetting a planned 13.7% decline in healthcare and other professional programs, which was mainly due to the discontinuation of smaller, non-core offerings. Revenue per student increased 4.8%, benefiting from both tuition increases and program mix. Adjusted EBITDA jumped 65%, reflecting not only top-line strength but also cost discipline and margin expansion from the Lincoln 10.0 hybrid teaching platform, which has improved instructional and space efficiency.
- Operating Leverage Expands: Adjusted EBITDA margin improved as higher student volumes outpaced expense growth.
- Cash Generation Strengthens: Q3 operating cash flow of $23.9M, with seasonal cash build expected to leave year-end debt-free.
- Capital Deployment Targets Growth: CapEx of $21.7M in Q3 and $68.1M YTD supports new campus buildouts and program expansion.
Healthcare segment contraction was managed proactively, with core licensed practical nursing (LPN) and medical assistant (MA) programs still growing 2% and set to rebound further with the Paramus campus re-enrollment in 2026. The company’s selective program exits are improving profitability and focus.
Executive Commentary
"East Point, Nashville, Levittown, and Houston are generating stronger and faster returns than we anticipated when we made these investments. This both increases conviction in our greenfield and expansion strategy and is accelerating our growth, allowing us to fund our ambitious growth plans from operating cash flow supplemented with our credit facility for seasonal needs."
Scott Shaw, President and CEO
"Adjusted EBITDA grew by 65.1%, reaching $16.9 million, up from $10.2 million last year...these include efficiencies from our Lincoln 10.0 hybrid teaching model, which has contributed to lower instructional costs as a percentage of revenue and improved space utilization."
Brian Myers, Chief Financial Officer
Strategic Positioning
1. Greenfield Campus Acceleration
Lincoln’s new campus strategy is delivering ahead of expectations, with the East Point, Houston, Nashville, and Levittown sites all ramping faster and achieving higher starts than initially forecast. The company is now accelerating the rollout, with the Rowlett, Texas campus (capacity 1,600+) and Hicksville, Long Island set to open by early 2027, targeting $25–30M annualized revenue and $7–10M EBITDA per site within four years.
2. Lincoln 10.0 Hybrid Model Drives Efficiency
The Lincoln 10.0 hybrid teaching platform, a blended in-person and online instructional model, has unlocked significant instructional and space efficiencies. This has enabled the business to scale without proportionate increases in cost, supporting margin expansion and freeing up resources for further growth investments.
3. Selective Program Rationalization and Healthcare Upside
Management is actively pruning underperforming or non-core programs, focusing resources on high-demand skilled trades and core healthcare (LPN and MA). The company is pursuing degree-granting approval to add registered nurse (RN) programs, which would significantly expand the addressable healthcare market. State-by-state regulatory timelines mean this is a medium-term lever, but the groundwork is being laid now.
4. High School and Corporate Partnerships Expand Funnel
High school outreach and the “share” program are gaining traction, doubling enrollments at the Mahwah campus and attracting interest from more districts. Corporate training partnerships, like the expanded CMC Corporation deal, deepen employer relationships and diversify revenue streams.
5. Capital Allocation Discipline and Organic Growth Focus
Lincoln is funding expansion primarily through operating cash flow, with selective use of its credit line for seasonality. The company maintains a 20% IRR hurdle for new investments and is exceeding this on recent projects. While open to M&A, leadership is clear that the new 2027 targets will be achieved organically, not through acquisitions.
Key Considerations
Lincoln’s Q3 results highlight the effectiveness of its growth playbook and the resilience of demand for skilled trades education. The business is executing a multi-pronged strategy that leverages operational improvements, targeted program expansion, and disciplined capital deployment.
Key Considerations:
- Campus Expansion as Growth Engine: New and relocated campuses are consistently outperforming ramp expectations, validating the greenfield thesis and providing a replicable blueprint for future markets.
- Program Mix Optimization: Exiting non-core healthcare and professional programs is sharpening the company’s focus and supporting profitability, while upcoming RN offerings could unlock material new growth.
- Margin Enhancement: The Lincoln 10.0 model is a structural margin lever, driving down instructional costs and supporting scale without commensurate cost increases.
- High School and Corporate Channels: Early traction in high school and employer partnerships is broadening the enrollment funnel, with potential for further acceleration as these channels mature.
- Capital Allocation Rigor: Management’s >20% IRR threshold and preference for organic growth over M&A reduce risk and enhance long-term value creation.
Risks
Regulatory timelines for degree program approvals, particularly RN, are state-by-state and can extend up to four years, potentially delaying healthcare segment upside. Aggressive campus expansion requires sustained enrollment momentum and operational execution. Macroeconomic shifts or policy changes affecting student loans or federal aid could impact demand, though management reports minimal exposure to recent government disruptions. The business is also exposed to execution risk in scaling new campuses and managing program transitions.
Forward Outlook
For Q4 2025, Lincoln guided to:
- Robust student start growth of 15–20% in Q4, driven by new campus ramp and ongoing skilled trades demand
- Year-end net cash position with no debt outstanding
For full-year 2025, management raised guidance:
- Revenue: $505–$510M
- Adjusted EBITDA: $65–$67M (excluding ~$10M pre-opening and expansion costs)
- Net income: $17–$19M
- CapEx: $75–$80M
Leadership expects 2026 adjusted EBITDA to exceed 2025’s level even without add-backs for new campus costs, and projects 2027 revenue and EBITDA to surpass $600M and $90M, respectively, all through organic execution. Key drivers will be continued campus ramp, high school channel growth, and healthcare program expansion.
- 2026 CapEx likely similar or slightly below 2025, with formal guidance in February
- Regulatory progress on RN programs and Paramus LPN restart expected to support healthcare segment rebound in 2026
Takeaways
Lincoln’s results and guidance upgrades signal a business in the midst of a durable, self-funded expansion cycle. The company’s disciplined approach to campus rollout, program mix, and capital allocation is producing tangible growth and margin gains, with further upside as new channels and offerings scale.
- Growth Model Validated: Outperformance at new campuses and high-ROI expansion reinforce the sustainability of the current playbook.
- Margin and Cash Flow Strength: Operational leverage and prudent cost management are translating into higher free cash flow and funding for future investments.
- Medium-Term Catalysts: Watch for regulatory milestones on RN programs, continued high school channel growth, and execution on upcoming campus openings to drive further upside.
Conclusion
Lincoln Educational Services delivered a quarter that exceeded both internal and external expectations, driven by strong demand for skilled trades, operational efficiency, and disciplined expansion. The raised guidance and 2027 targets reflect management’s confidence in the scalability and resilience of the business model, with multiple organic growth levers still to play out.
Industry Read-Through
Lincoln’s momentum and ability to raise long-term targets stand in contrast to challenges faced by several peers in the education sector, where regulatory risk, execution stumbles, and demand volatility have weighed on results. The company’s success in skilled trades, hybrid learning, and high school engagement suggests that career-focused, hands-on training models are gaining share as alternatives to traditional four-year colleges lose appeal. For the broader sector, Lincoln’s capital discipline and organic growth bias provide a template for sustainable value creation in a landscape marked by policy and enrollment uncertainty.