10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM          TO             

Commission File Number: 0-23245

PERDOCEO EDUCATION CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	36-3932190
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
231 N. Martingale Road Schaumburg, Illinois	60173
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (847) 781-3600

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PRDO	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  

Indicate by check mark whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act.    Yes  ☐    No  ☒

Number of shares of registrant’s common stock, par value $0.01, outstanding as of May 3, 2021: 70,439,842

PERDOCEO EDUCATION CORPORATION

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income (Unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
Item 4.	Controls and Procedures	24
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 6.	Exhibits	26
SIGNATURES		28

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
(In Thousands, Except Share and Per Share Amounts)	2021			2020
ASSETS	(unaudited)
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	86,031		$	105,684
Restricted cash		4,000			4,000
Total cash, cash equivalents and restricted cash		90,031			109,684
Short-term investments		360,986			300,676
Total cash and cash equivalents, restricted cash and short-term investments		451,017			410,360
Student receivables, gross		82,592			84,599
Allowance for credit losses		(41,110	)		(39,917	)
Student receivables, net		41,482			44,682
Receivables, other		2,684			2,873
Prepaid expenses		10,023			8,209
Inventories		594			596
Other current assets		253			341
Total current assets		506,053			467,061
NON-CURRENT ASSETS:
Property and equipment, net of accumulated depreciation of $104,548 and $101,380    as of March 31, 2021 and December 31, 2020, respectively		25,696			27,761
Right of use asset, net		42,425			44,773
Goodwill		118,312			118,312
Intangible assets, net of amortization of $5,011 and $4,178 as of March 31, 2021 and December 31, 2020, respectively		14,689			15,522
Student receivables, gross		3,970			3,533
Allowance for credit losses		(2,675	)		(2,230	)
Student receivables, net		1,295			1,303
Deferred income tax assets, net		35,584			40,351
Other assets		6,311			6,434
TOTAL ASSETS	$	750,365		$	721,517
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability-operating	$	9,677		$	9,789
Accounts payable		10,767			13,259
Accrued expenses:
Payroll and related benefits		15,207			22,661
Advertising and marketing costs		11,643			10,249
Income taxes		6,627			1,402
Other		12,294			11,921
Deferred revenue		37,004			34,534
Total current liabilities		103,219			103,815
NON-CURRENT LIABILITIES:
Lease liability-operating		40,423			43,405
Other liabilities		18,378			18,390
Total non-current liabilities		58,801			61,795
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock, $0.01 par value; 300,000,000 shares authorized; 87,795,103    and 87,264,910 shares issued, 70,432,568 and 70,062,364 shares    outstanding as of March 31, 2021 and December 31, 2020, respectively		878			873
Additional paid-in capital		662,485			658,423
Accumulated other comprehensive income		14			364
Retained earnings		173,088			142,335
Treasury stock, at cost; 17,362,535 and 17,202,546 shares as of March 31, 2021    and December 31, 2020, respectively		(248,120	)		(246,088	)
Total stockholders' equity		588,345			555,907
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	750,365		$	721,517

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	For the Quarter Ended March 31,
(In Thousands, Except Per Share Amounts)	2021			2020
REVENUE:
Tuition and fees	$	182,831		$	170,394
Other		807			600
Total revenue		183,638			170,994
OPERATING EXPENSES:
Educational services and facilities		28,974			26,911
General and administrative		110,045			103,529
Depreciation and amortization		4,002			2,639
Asset impairment		-			612
Total operating expenses		143,021			133,691
Operating income		40,617			37,303
OTHER INCOME:
Interest income		359			1,487
Interest expense		(109	)		(41	)
Miscellaneous income (expense)		142			(13	)
Total other income		392			1,433
PRETAX INCOME		41,009			38,736
Provision for income taxes		10,245			9,604
INCOME FROM CONTINUING OPERATIONS		30,764			29,132
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(11	)		(26	)
NET INCOME		30,753			29,106
NET INCOME PER SHARE - BASIC:	$	0.44		$	0.42
NET INCOME PER SHARE - DILUTED:	$	0.43		$	0.41
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		70,149			69,839
Diluted		71,482			71,714

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	For the Quarter Ended March 31,
(In Thousands)	2021			2020
NET INCOME	$	30,753		$	29,106
OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments		(129	)		(48	)
Unrealized loss on investments		(221	)		(839	)
Total other comprehensive loss		(350	)		(887	)
COMPREHENSIVE INCOME	$	30,403		$	28,219

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

	Common Stock				Treasury Stock								Accumulated Other
(In Thousands)	Issued Shares		$0.01 Par Value		Purchased Shares			Cost			Additional Paid-in Capital		Comprehensive Income (Loss)			Retained Earnings		Total
BALANCE, January 1, 2021		87,265	$	873		(17,203	)	$	(246,088	)	$	658,423	$	364		$	142,335	$	555,907
Net income		-		-		-			-			-		-			30,753		30,753
Foreign currency translation		-		-		-			-			-		(129	)		-		(129	)
Unrealized loss on investments		-		-		-			-			-		(221	)		-		(221	)
Share-based compensation expense		-		-		-			-			3,753		-			-		3,753
Common stock issued		530		5		(160	)		(2,032	)		309		-			-		(1,718	)
BALANCE, March 31, 2021		87,795	$	878		(17,363	)	$	(248,120	)	$	662,485	$	14		$	173,088	$	588,345
	Common Stock				Treasury Stock								Accumulated Other
(In Thousands)	Issued Shares		$0.01 Par Value		Purchased Shares			Cost			Additional Paid-in Capital		Comprehensive Income (Loss)			Retained Earnings		Total
BALANCE, January 1, 2020		85,953	$	860		(15,802	)	$	(227,315	)	$	639,335	$	344		$	18,071	$	431,295
Net income		-		-		-			-			-		-			29,106		29,106
Foreign currency translation		-		-		-			-			-		(48	)		-		(48	)
Unrealized loss on investments		-		-		-			-			-		(839	)		-		(839	)
Treasury stock purchased		-		-		(1,284	)		(17,309	)		-		-			-		(17,309	)
Share-based compensation expense		-		-		-			-			3,212		-			-		3,212
Common stock issued		256		2		(62	)		(687	)		411		-			-		(274	)
BALANCE, March 31, 2020		86,209	$	862		(17,148	)	$	(245,311	)	$	642,958	$	(543	)	$	47,177	$	445,143

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Quarter Ended March 31,
(In Thousands)	2021			2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	30,753		$	29,106
Adjustments to reconcile net income to net
cash provided by operating activities:
Asset impairment		-			612
Depreciation and amortization expense		4,002			2,639
Bad debt expense		13,719			12,862
Compensation expense related to share-based awards		3,753			3,212
Deferred income taxes		4,767			9,468
Changes in operating assets and liabilities		(12,286	)		(13,131	)
Net cash provided by operating activities		44,708			44,768
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(126,009	)		(111,753	)
Sales of available-for-sale investments		64,408			52,893
Purchases of property and equipment		(1,042	)		(1,015	)
Business acquisition		-			(34,065	)
Net cash used in investing activities		(62,643	)		(93,940	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		314			413
Purchase of treasury stock		-			(17,309	)
Payments of employee tax associated with stock compensation		(2,032	)		(687	)
Net cash used in financing activities		(1,718	)		(17,583	)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		(19,653	)		(66,755	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period		109,684			108,687
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period	$	90,031		$	41,932
Supplemental non-cash disclosure:
Amounts placed in escrow during the period to secure indemnification obligations from business acquisition	$	-		$	4,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE COMPANY

Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. Our accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Our universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIU continue to show innovation in higher education, advancing personalized learning technologies like their intellipath^® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “the Company,” “Perdoceo” and “PEC” refer to Perdoceo Education Corporation and our wholly-owned subsidiaries.

2. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the quarter ended March 31, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.

The unaudited condensed consolidated financial statements presented herein include the accounts of Perdoceo Education Corporation and our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.

         Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIU.

3. RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting guidance adopted in 2021

In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions, including the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items and the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in this ASU also simplify the accounting for income taxes by requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax and requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. For all public business entities, ASU 2019-12 is effective for annual periods and interim periods beginning after December 15, 2020. We have evaluated and adopted this guidance effective January 1, 2021. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

5

4. FINANCIAL INSTRUMENTS

Investments consist of the following as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	March 31, 2021
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	139	$	1	$	-		$	140
Non-governmental debt securities		354,136		145		(208	)		354,073
Treasury and federal agencies		6,770		5		(2	)		6,773
Total short-term investments (available for sale)	$	361,045	$	151	$	(210	)	$	360,986

	December 31, 2020
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	139	$	1	$	-		$	140
Non-governmental debt securities		288,578		331		(176	)		288,733
Treasury and federal agencies		11,799		6		(2	)		11,803
Total short-term investments (available for sale)	$	300,516	$	338	$	(178	)	$	300,676

In the table above, unrealized holding gains (losses) relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year.

Our non-governmental debt securities primarily consist of commercial paper and certificates of deposit. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. We do not intend to sell our investments in these securities prior to maturity and it is not likely that we will be required to sell these investments before recovery of the amortized cost basis.  

Fair Value Measurements

FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of March 31, 2021, we held investments that are required to be measured at fair value on a recurring basis. These investments (available for sale) consist of municipal bonds, non-governmental debt securities and treasury and federal agencies securities. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

All of our available for sale investments were measured under Level 2 as of March 31, 2021 and December 31, 2020. Additionally, money market funds of $20.9 million and $1.7 million included within cash and cash equivalents on our condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively, were measured under Level 1 and certificates of deposit, commercial paper and treasury bills of $5.5 million and $5.1 million included within cash and cash equivalents on our condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively, were measured under Level 2.

Equity Method Investment

Our investment in an equity affiliate, which is recorded within other noncurrent assets on our condensed consolidated balance sheets, represents an international investment in a private company. As of March 31, 2021, our investment in an equity affiliate equated to a 30.7%, or $3.2 million, non-controlling interest in CCKF, a Dublin-based educational technology company providing intelligent systems to power the delivery of individualized and personalized learning.

During the quarters ended March 31, 2021 and 2020, we recorded approximately $0.2 million of gain and $0.1 million of gain, respectively, related to our proportionate investment in CCKF within miscellaneous income (expense) on our unaudited condensed consolidated statements of income.

We make periodic operating maintenance payments related to proprietary rights that we use in our intellipath^® personalized learning technology. The total fees paid during the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

6

	Maintenance Fee Payments
For the quarter ended March 31, 2021	$	423
For the quarter ended March 31, 2020 (1)	$	1,443

________________________

(1)During the first quarter of 2020, the Company prepaid maintenance payments for the full year 2020, of which approximately $0.4 million was recognized as expense for the quarter ended March 31, 2020.

Credit Agreement

On December 27, 2018, the Company; its wholly-owned subsidiary, CEC Educational Services, LLC; and the subsidiary guarantors thereunder, entered into a credit agreement with BMO Harris Bank N.A. (“BMO Harris”), in its capacities as the sole lender, the letter of credit issuer thereunder and the administrative agent for the lenders which from time to time may be parties to the credit agreement. The credit agreement provides the Company with the benefit of a $50.0 million revolving credit facility and is scheduled to mature on January 20, 2022. The loans and letter of credit obligations under the credit agreement are required to be 100% secured with cash and marketable securities deposited with the bank. As of March 31, 2021 and December 31, 2020, there were no outstanding borrowings under the revolving credit facility.

5. REVENUE RECOGNITION

Disaggregation of Revenue

The following tables disaggregate our revenue by major source for the quarters ended March 31, 2021 and 2020 (dollars in thousands):

	For the Quarter Ended March 31, 2021								For the Quarter Ended March 31, 2020
	CTU		AIU		Corporate and Other(3)		Total		CTU		AIU		Corporate and Other(3)		Total
Tuition	$	99,605	$	74,498	$	-	$	174,103	$	97,551	$	64,545	$	-	$	162,096
Technology fees		5,483		2,795		-		8,278		5,120		2,657		-		7,777
Other miscellaneous fees(1)		292		158		-		450		372		149		-		521
Total tuition and fees		105,380		77,451		-		182,831		103,043		67,351		-		170,394
Other revenue(2)		442		26		339		807		545		45		10		600
Total revenue	$	105,822	$	77,477	$	339	$	183,638	$	103,588	$	67,396	$	10	$	170,994

__________________

(1) Other miscellaneous fees include student activity fees and graduation fees.

(2) Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.

(3) Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue.

Performance Obligations

Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities. Our universities charge tuition and fees at varying amounts, depending on the university, the type of program and specific curriculum. Our universities bill students a single charge that covers tuition, fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed to students. These fees are earned over the applicable term and are not considered separate performance obligations.

Other revenue, which consists of contract training revenue, bookstore sales and miscellaneous non-student related revenue, is billed and recognized as goods are delivered or services are performed. Contract training revenue results from individual training courses that are stand-alone courses and not part of a degree or certificate program. Bookstore sales are primarily initiated by the student and are not included in the enrollment agreement at the onset of a student’s entrance to the institution. These types of sales constitute a separate performance obligation from classroom instruction.

Our institutions’ academic year is generally at least 30 weeks in length but varies both by institution and program of study and is divided by academic terms. Academic terms are determined by regulatory requirements mandated by the federal government and/or applicable accrediting body, which also vary by university and program. Academic terms are determined by start dates, which vary by university and program and are generally 8-12 weeks in length.

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Contract Assets

For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our condensed consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our condensed consolidated balance sheets. For AIU’s Trident programs, students are billed as they register for courses, including courses related to future terms. Any billings for future terms would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the academic term has not yet started. Contract assets related to future terms are offset against the deferred revenue associated with the respective future term.

Due to the short-term nature of our academic terms, the contract asset balance which exists at the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future terms. The decrease in contract asset balances are a result of one of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their previously billed amount. As of the end of each quarter, a new contract asset is determined on a student by student basis based on the most recently started term and a student’s progress within that term as compared to the date at which the student is no longer entitled to a refund under each institution’s refund policy. Contract assets associated with future terms remain as contract assets until the academic term begins and the student reaches the point in that academic term that they are no longer entitled to a refund.

The amount of deferred revenue balances which are being offset with contract assets balances as of March 31, 2021 and December 31, 2020 were as follows (dollars in thousands):

	As of
	March 31, 2021			December 31, 2020
Gross deferred revenue	$	58,022		$	85,402
Gross contract assets		(21,018	)		(50,868	)
Deferred revenue, net	$	37,004		$	34,534

Deferred Revenue

Changes in our deferred revenue balances for the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	For the Quarter Ended									For the Quarter Ended
	March 31, 2021									March 31, 2020
	CTU			AIU			Total			CTU			AIU			Total
Gross deferred revenue, January 1	$	28,522		$	56,880		$	85,402		$	27,845		$	35,359		$	63,204
Business acquisition, beginning balance		-			-			-			-			13,395			13,395
Revenue earned from prior balances		(25,689	)		(42,403	)		(68,092	)		(25,149	)		(31,518	)		(56,667	)
Billings during period(1)		101,784			52,561			154,345			103,044			46,648			149,692
Revenue earned for new billings during the period		(79,691	)		(35,048	)		(114,739	)		(77,894	)		(35,833	)		(113,727	)
Other adjustments		210			896			1,106			140			883			1,023
Gross deferred revenue, March 31	$	25,136		$	32,886		$	58,022		$	27,986		$	28,934		$	56,920

______________

1) Billings during period includes adjustments for prior billings.

Cash Receipts

Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer reimbursement, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer reimbursements. Students who

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have not applied for any type of financial aid generally set up a payment plan with the university and make payments on a monthly basis per the terms of the payment plan.

If a student withdraws from one of our universities prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Generally, the amount to be refunded to a student is calculated based upon the percent of the term attended and the amount of tuition and fees paid by the student as of their withdrawal date. In certain circumstances, we have recognized revenue for students who have withdrawn that we are not entitled to retain. We have estimated a reserve for these limited circumstances based on historical evidence in the amount of $2.3 million as of March 31, 2021 and December 31, 2020. Students are typically entitled to a partial refund until approximately halfway through their term. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date.

Management reassesses collectability when a student withdraws from the university and has unpaid tuition charges for the current term which the university is entitled to retain per the applicable refund policy. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue in accordance with ASC Topic 606 when cash is received and the contract is terminated and neither party has further performance obligations. We have no remaining performance obligations for students who have withdrawn from our universities, and once the refund calculation is performed and funds are returned to the student, if applicable under our refund policy, no further consideration is due back to the student. We recognized $0.4 million and $0.3 million of revenue for the quarters ended March 31, 2021 and 2020, respectively, for payments received from withdrawn students.

6. STUDENT RECEIVABLES

Student receivables represent funds owed to us in exchange for the educational services provided to a student. Student receivables are reflected net of an allowance for credit losses at the end of the reporting period. Student receivables, net, are reflected on our condensed consolidated balance sheets as components of both current and non-current assets. We do not charge interest or fees on any of our payment plans.

Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer reimbursement, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer reimbursements. Students who have not applied for any type of financial aid generally set up a payment plan with the institution and make payments on a monthly basis per the terms of the payment plan. For those balances that are not received during the academic term, the balance is typically due within the current academic year which is approximately 30 weeks in length. Generally, a student receivable balance is written off once a student is out of school and it reaches greater than 90 days past due.

Our standard student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trend analysis and comparing estimated and actual performance.

Student Receivables Under Extended Payment Plans

We have an immaterial amount of student receivables that are due greater than 12 months from the date of our condensed consolidated balance sheets. As of March 31, 2021 and December 31, 2020, the amount of non-current student receivables under payment plans that are longer than 12 months in duration, net of allowance for credit losses, was $1.3 million for each period.

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Allowance for Credit Losses

We define student receivables as a portfolio segment under ASC Topic 326 – Financial Instruments – Credit Losses. Changes in our current and non-current allowance for credit losses related to our student receivable portfolio in accordance with the guidance under ASU 2016-13 for the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	For the Quarter Ended March 31,
	2021			2020
Balance, beginning of period	$	42,147		$	31,964
Beginning balance related to business acquisition		-			2,174
Provision for credit losses		13,724			12,862
Amounts written-off		(13,067	)		(11,601	)
Recoveries		981			696
Balance, end of period	$	43,785		$	36,095

Fair Value Measurements

The carrying amount reported in our condensed consolidated balance sheets for the current portion of student receivables approximates fair value because of the nature of these financial instruments as they generally have short maturity periods. It is not practicable to estimate the fair value of the non-current portion of student receivables, since observable market data is not readily available, and no reasonable estimation methodology exists.

7. LEASES

We lease most of our administrative and educational facilities under non-cancelable operating leases expiring at various dates through 2032. Lease terms generally range from five to ten years with one to four renewal options for extended terms. In most cases, we are required to make additional payments under facility operating leases for taxes, insurance and other operating expenses incurred during the operating lease period, which are typically variable in nature.

We determine if a contract contains a lease when the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish a right of use (“ROU”) asset and a lease liability.

Quantitative information related to leases is presented in the following table (dollars in thousands):

	For the Quarter Ended March 31, 2021			For the Quarter Ended March 31, 2020
Lease expenses (1)
Fixed lease expenses - operating	$	3,015		$	3,148
Variable lease expenses - operating		1,513			1,915
Sublease income		(499	)		(788	)
Total lease expenses	$	4,029		$	4,275
Other information
Gross operating cash flows for operating leases (2)	$	(5,221	)	$	(6,190	)
Operating cash flows from subleases (2)	$	530		$	676
	As of March 31, 2021			As of March 31, 2020
Weighted average remaining lease term (in months) – operating leases		73			74
Weighted average discount rate – operating leases		5.0	%		5.0	%

__________________

(1) Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period.

(2) Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs.

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Subleases

For certain of our leased locations we have vacated the facility and have fully or partially subleased the space. For each sublease that has been entered into, we remain the guarantor under the lease and therefore become the intermediate lessor. We have three subleases within three leased facilities with terms ranging from less than one year to two years. We have recognized sublease income of $0.5 million and $0.8 million for the quarters ended March 31, 2021 and 2020, respectively, as an offset to lease expense on our unaudited condensed consolidated statements of income.

8. CONTINGENCIES

An accrual for estimated legal fees and settlements of $0.5 million and $1.0 million at March 31, 2021 and December 31, 2020, respectively, is presented within other current liabilities on our condensed consolidated balance sheets.

We record a liability when we believe that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued and make adjustments as further information develops, circumstances change or contingencies are resolved. Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (1) if the damages sought are indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty as to the outcome of pending appeals, motions or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any.

We receive informal requests from state attorneys general and other government agencies relating to specific complaints they have received from students or former students which seek information about the student, our programs and other matters relating to our activities in the relevant state. These requests can be broad and time consuming to respond to, and there is a risk that they could expand and/or lead to a formal inquiry or investigation into our practices in a particular state. We are subject to a variety of other claims, lawsuits, arbitrations and investigations that arise from time to time out of the conduct of our business, including, but not limited to, matters involving prospective students, students or graduates, alleged violations of the Telephone Consumer Protection Act, both individually and on behalf of a putative class, and employment matters. Periodically matters arise that we consider outside the scope of ordinary routine litigation incidental to our business. While we currently believe that these matters, individually or in aggregate, will not have a material adverse impact on our financial position, cash flows or results of operations, these matters are subject to inherent uncertainties, and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on our business, reputation, financial position and cash flows.  

9. INCOME TAXES  

The determination of the annual effective tax is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which we operate and the ongoing development of tax planning strategies during the year. In addition, our provision for income taxes can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

The following is a summary of our provision for income taxes and effective tax rate from continuing operations:

	For the Quarter Ended March 31,
(Dollars in Thousands)	2021			2020
Pretax income	$	41,009		$	38,736
Provision for income taxes	$	10,245		$	9,604
Effective rate		25.0	%		24.8	%

As of December 31, 2020, a valuation allowance of $29.0 million was maintained with respect to our foreign tax credits not supported by an Overall Domestic Loss (“ODL”) account balance and state net operating losses. After considering both positive and negative evidence related to the realization of the deferred tax assets, we have determined that it is necessary to continue to maintain a $29.0 million valuation allowance against our non-ODL supported foreign tax credits and state net operating losses as of March 31, 2021.

The effective tax rate for the quarter ended March 31, 2021 was benefitted by the release of previously recorded tax reserves, which reduced the effective tax rate by 1.3%. The effective tax rate for the quarter ended March 31, 2020 was benefitted by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which reduced the effective tax rate by 1.9%.

We estimate that it is reasonably possible that the gross liability for unrecognized tax benefits for a variety of uncertain tax positions will decrease by up to $1.5 million in the next twelve months as a result of the completion of various tax audits currently in

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process and the expiration of the statute of limitations in several jurisdictions. The income tax rate for the quarter ended March 31, 2021 does not take into account the possible reduction of the liability for unrecognized tax benefits. The impact of a reduction to the liability will be treated as a discrete item in the period the reduction occurs. We recognize interest and penalties related to unrecognized tax benefits in tax expense. As of March 31, 2021, we had accrued $1.8 million as an estimate for reasonably possible interest and accrued penalties.

Our tax returns are routinely examined by federal, state and local tax authorities and these audits are at various stages of completion at any given time. The Internal Revenue Service has completed its examination of our U.S. income tax returns through our tax year ended December 31, 2014.

10. SHARE-BASED COMPENSATION

Overview

The Company’s 2016 Incentive Compensation Plan (the “2016 Plan”) was approved by stockholders in May 2016. Under the 2016 Plan, Perdoceo may grant to eligible participants awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock, performance units, annual incentive awards, and substitute awards, which generally may be settled in cash or shares of our common stock. The vesting of all types of awards is subject to possible acceleration in certain circumstances. If a plan participant terminates employment for any reason other than by death or disability during the vesting period, the right to unvested awards is generally forfeited.

Restricted Stock Units

For the quarters ended March 31, 2021 and 2020, the Company granted approximately 0.3 million and 0.2 million restricted stock units, respectively, to be settled in shares of stock which are not “performance-based,” with a grant-date fair value of approximately $3.6 million and $3.5 million, respectively.

Additionally, for the quarters ended March 31, 2021 and 2020, the Company granted approximately 0.4 million and 0.3 million restricted stock units, respectively, to be settled in shares of stock which are “performance-based,” with a grant-date fair value of approximately $4.2 million and $3.9 million, respectively. The performance-based restricted stock units are subject to performance conditions which are determined at the time of grant and typically cover a three-year performance period. These performance conditions may result in all units being forfeited even if the requisite service period is met.

Stock Options

There were no stock options granted during each of the quarters ended March 31, 2021 and 2020.

Share-Based Compensation Expense

Total share-based compensation expense for the quarters ended March 31, 2021 and 2020 for all types of awards was as follows (dollars in thousands):

	For the Quarter Ended March 31,
Award Type	2021		2020
Stock options	$	160	$	405
Restricted stock units settled in stock		3,588		2,803
Restricted stock units settled in cash		-		(240	)
Total share-based compensation expense	$	3,748	$	2,968

As of March 31, 2021, we estimate that compensation expense of approximately $23.0 million will be recognized over the next four years for all unvested share-based awards that have been granted to participants. This amount excludes any estimates of forfeitures.

11. WEIGHTED AVERAGE COMMON SHARES

Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that would be outstanding if dilutive stock options were exercised and restricted stock units were settled for common shares during the period.

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The weighted average number of common shares used to compute basic and diluted net income per share for the quarters ended March 31, 2021 and 2020 were as follows (shares in thousands):

	For the Quarter Ended March 31,
	2021		2020
Basic common shares outstanding		70,149		69,839
Common stock equivalents		1,333		1,875
Diluted common shares outstanding		71,482		71,714

For the quarters ended March 31, 2021 and 2020, certain unexercised stock option awards are excluded from our computations of diluted earnings per share, as these shares were out-of-the-money and their effect would have been anti-dilutive. The anti-dilutive options that were excluded from our computations of diluted earnings per share were 0.5 million and 0.6 million shares for the quarters ended March 31, 2021 and 2020, respectively.

12. SEGMENT REPORTING

Our segments are determined in accordance with FASB ASC Topic 280—Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment is comprised of an accredited postsecondary education institution that offers a variety of academic programs. These segments are organized by key market segments and to enhance brand focus within each segment to more effectively execute our business plan. As of March 31, 2021, our two segments are:

♦ Colorado Technical University (CTU) is committed to providing industry-relevant higher education to a diverse student population through innovative technology and experienced faculty, enabling the pursuit of personal and professional goals. CTU is focused on serving adult, non-traditional students seeking career advancement, as well as the employer’s needs for a well-educated workforce. The university offers academic programs in the career-oriented disciplines of business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of March 31, 2021, students enrolled at CTU represented approximately 62% of our total enrollments. Approximately 95% of CTU’s students are enrolled in programs offered fully online. CTU’s campus-based and blended-format students are currently pursuing their education solely through CTU’s online platform as a result of the COVID-19 pandemic.

♦ The American InterContinental University System (AIU) is comprised of two universities: American InterContinental University and Trident University International (“Trident” or “TUI”). AIU is committed to providing quality and accessible higher education opportunities for a diverse student population, including adult or other non-traditional learners and the military community. AIU places emphasis on the educational, professional and personal growth of each student, and pursues this aim with a commitment to institutional integrity and ethics. AIU offers academic programs in the career-oriented disciplines of business studies, information technologies, education, health sciences and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of March 31, 2021, students enrolled at AIU represented approximately 38% of our total enrollments. Approximately 97% of AIU’s students are enrolled in programs offered fully online. Substantially all of AIU’s campus-based and blended-format students are currently pursuing their education solely through AIU’s online platform as a result of the COVID-19 pandemic.

Summary financial information by reporting segment is as follows (dollars in thousands):

	For the Quarter Ended March 31,
	Revenue										Operating Income (Loss)
	2021		% of Total			2020		% of Total			2021			2020
CTU	$	105,822		57.6	%	$	103,588		60.6	%	$	36,143		$	34,619
AIU (1)		77,477		42.2	%		67,396		39.4	%		11,323			9,376
Corporate and Other (2)		339	NM				10	NM				(6,849	)		(6,692	)
Total	$	183,638		100.0	%	$	170,994		100.0	%	$	40,617		$	37,303

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	Total Assets as of  (3)
	March 31, 2021		December 31, 2020
CTU	$	102,237	$	96,922
AIU		129,961		141,602
Corporate and Other (2)		518,167		482,993
Total	$	750,365	$	721,517

(1) AIU’s revenue and operating income for the quarter ended March 31, 2020, include results of operations related to Trident from the March 2, 2020 date of acquisition and therefore do not reflect a full quarter of activity for Trident.

(2) Corporate and Other includes results of operations and total assets for closed campuses.

(3) Total assets do not include intercompany receivable or payable activity between institutions and corporate and investments in subsidiaries.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion below and other items in this Quarterly Report on Form 10-Q contain “forward-looking statements,” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current expectations regarding our future growth, results of operations, cash flows, performance and business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. We have tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “expect,” “plan,” “seek,” “should,” ”will,” “continue to,” “outlook,” “focused on” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to us and are subject to various risks, uncertainties, and other factors, including, but not limited to, those matters discussed in Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2020 that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Among the factors that could cause actual results to differ materially from those expressed in, or implied by, our forward-looking statements are the following:

• declines in enrollment or interest in our programs;

• our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the 90-10, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education (the “Department”)), as well as applicable accreditation standards and state regulatory requirements;

• the impact of various versions of “borrower defense to repayment” regulations;

• rulemaking by the Department or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions;

• the success of our initiatives to improve student experiences, retention and academic outcomes;

• our continued eligibility to participate in educational assistance programs for veterans and other military personnel;

• increased competition;

• the impact of management changes; and

• changes in the overall U.S. economy which may continue to be impacted by the global COVID-19 pandemic.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. The MD&A is intended to help investors understand the results of operations, financial condition and present business environment. The MD&A is organized as follows:

• Overview

• Consolidated Results of Operations

• Segment Results of Operations

• Summary of Critical Accounting Policies and Estimates

• Liquidity, Financial Position and Capital Resources

OVERVIEW

Our academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. Our accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Our universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIU continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

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On March 2, 2020, the Company acquired substantially all of the assets of Trident University International (“Trident University”), an accredited university offering online undergraduate, master’s and doctoral programs with a strong focus on graduate programs. Trident University’s operations were brought within the AIU segment, preserving the “Trident” name and programs as part of American InterContinental University’s operations. Results of operations related to the acquisition of substantially all of the assets of Trident University (the “Trident acquisition”) are included in the consolidated financial statements from the date of acquisition. Effective November 5, 2020, AIU implemented a university system model, the American InterContinental University System, which is comprised of two universities: American InterContinental University and Trident University International (“Trident” or “TUI”). The system structure provides a new framework for American InterContinental University and Trident to continue to serve their unique student populations while benefitting from one university system. 

Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIU. These segments are organized by key market segments and to enhance brand focus within each segment to more effectively execute our business plan.

Regulatory Environment and Political Uncertainty

We operate in a highly regulated industry, which has significant impacts on our business and creates risks and uncertainties. In recent years, Congress, the Department, states, accrediting agencies, the CFPB, the FTC, state attorneys general and the media have scrutinized the for-profit postsecondary education sector. Congressional hearings and roundtable discussions were held regarding various aspects of the education industry and reports were issued that are highly critical of for-profit colleges and universities. A group of influential U.S. senators, consumer advocacy groups and some media outlets have strongly and repeatedly encouraged the Departments of Education, Defense and Veterans Affairs to take action to limit or terminate the participation of for-profit educational institutions, including Perdoceo, in existing tuition assistance programs.

The results of the 2020 Presidential and Congressional elections are likely to significantly impact legislative and regulatory actions affecting our business. A loss or material reduction in Title IV Programs or the amount of student financial aid for which our students are eligible would materially impact our student enrollments and profitability and could impact the continued viability of our business as currently conducted.

We encourage you to review Item 1, “Business,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K to learn more about our highly regulated industry and related risks and uncertainties, in addition to the MD&A and Risk Factors in our 2021 Quarterly Reports on Form 10-Q.

Note Regarding Non-GAAP measures

We believe it is useful to present non-GAAP financial measures which exclude certain significant and non-cash items as a means to understand the performance of our core business. As a general matter, we use non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of our core business, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and to provide estimates of future performance.

We believe certain non-GAAP measures allow us to compare our current operating results with respective historical periods and with the operational performance of other companies in our industry because it does not give effect to potential differences caused by items we do not consider reflective of underlying operating performance. In evaluating the use of non-GAAP measures, investors should be aware that in the future we may incur expenses similar to the adjustments presented below. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by expenses that are unusual, non-routine or non-recurring. A non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance with and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of our liquidity.

Non-GAAP financial measures, when viewed in a reconciliation to respective GAAP financial measures, provide an additional way of viewing the Company's results of operations and the factors and trends affecting the Company's business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the respective financial results presented in accordance with GAAP.

2021 First Quarter Overview

Our financial results for the first quarter ended March 31, 2021 (“current quarter”) reflected improvements in revenue and operating income as compared to the prior year quarter. Additionally, total student enrollments improved as compared to the prior year

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quarter end. The financial results include the Trident acquisition commencing on the March 2, 2020 date of acquisition and therefore the quarter ended March 31, 2020 reflects one month of financial results for Trident as compared to a full quarter of results for Trident for the current quarter. During the current quarter we continued to make targeted investments within our student support processes as well as other initiatives.

Total student enrollments increased 9.7% as of March 31, 2021 as compared to March 31, 2020, with CTU increasing by 12.8% and AIU increasing by 5.0%. We believe our investments in technology and student-serving functions have positively contributed to student experiences and student learning. Both CTU and AIU have continued to increase their student-serving staff and leverage data analytics and technology to enhance the effectiveness of their services to students. Additionally, CTU’s academic calendar redesign positively impacted the total student enrollments as of March 31, 2021 due to a session start date on March 30^th this year as compared to a session start date that was in April in the prior year.

During the current quarter we made investments in two initiatives, both of which are designed to allow students to use their employer’s or their own resources to complete their program with little or no debt. One investment relates to expanding our corporate partnership program within CTU. This additional staff should be fully trained and integrated in the second half of the year. Our corporate partnership team identifies, contacts and supports corporations, leveraging their tuition assistance programs to provide debt-free education to their employees through one of our universities. An additional investment that we focused on during the quarter relates to implementing workforce development training programs, which are shorter duration programs. We identified several non-degree, online courses that we believe will offer learning opportunities where one can develop skills and knowledge in a specific endeavor or area of interest. Our training programs are designed to assist adult learners in obtaining additional credentials that are job-focused and can help workers increase skills and prepare for changes in the workplace. We expect to begin offering these programs before the end of the second quarter. We plan to grow these programs first at Trident and then possibly across our other universities.

With respect to the COVID-19 pandemic, we have not experienced any material disruptions to date as our strong balance sheet and technology infrastructure provided us with the ability to adapt our operations in response. While we continue to monitor for future impacts of a potential worsening of global economic conditions on our university operations, we are also monitoring for changes in prospective student interest or student engagement levels as social distancing requirements are relaxed and the U.S. economy continues to reopen.

Financial Highlights

Revenue for the first quarter ended March 31, 2021 increased $12.6 million or 7.4% as compared to the prior year quarter, reflecting revenue growth at both CTU and AIU as a result of the positive enrollment results discussed above and, for AIU, the Trident acquisition. Operating income for the current quarter increased to $40.6 million as compared to operating income of $37.3 million for the prior year quarter. The growth in revenue along with operating efficiencies was partially offset with increases in all general and administrative expense categories primarily due to the Trident acquisition and investments in student-serving functions.

Revenue within our CTU segment increased $2.2 million or 2.2% for the first quarter of 2021 as compared to the prior year quarter reflecting the increase in total student enrollments. Operating income for CTU increased by $1.5 million to $36.1 million for the current quarter as compared to operating income of $34.6 million for the prior year quarter driven by the increase in revenue as well as operating efficiencies partially offset with increased expenses relating to marketing and admissions.

Revenue within our AIU segment increased $10.1 million or 15.0% for the first quarter of 2021 as compared to the prior year quarter due to the Trident acquisition as well as organic total student enrollment growth. Operating income for AIU increased by $1.9 million to $11.3 million for the current quarter as compared to the prior year quarter driven by the increase in revenue as well as operating efficiencies, partially offset with increased expenses within all general and administrative categories primarily as a result of the Trident acquisition and investments in student-serving functions.

Within our Corporate and Other category, operating loss of $6.8 million increased from $6.7 million in the prior year quarter as the reduction in operating losses associated with closed campuses was offset with increased employee related and other corporate support expenses.

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income for the total company was $44.6 million for the current quarter as compared to $39.9 million in the prior year quarter with the improvement primarily driven by revenue gowth at both CTU and AIU and efficiencies within operating processes partially offset with increases in all general and administrative expense categories primarily due to the Trident acquisition and investments in student-serving functions.

Beginning in 2021, we no longer adjust operating income or earnings per diluted share for expenses related to vacated facilities at closed campuses as these expenses are expected to be immaterial. The prior period amounts were recast to maintain comparability to 2021 non-GAAP measures.

Adjusted operating income and adjusted earnings per diluted share for the quarters ended March 31, 2021 and 2020 is presented below (dollars in thousands, unless otherwise noted):

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	ACTUAL
	For the Quarter Ended March 31,
Adjusted Operating Income	2021		2020 (3)
Operating income	$	40,617	$	37,303
Depreciation and amortization (1)		4,002		2,639
Adjusted Operating Income	$	44,619	$	39,942
	ACTUAL
	For the Quarter Ended March 31,
Adjusted Earnings Per Diluted Share	2021		2020 (3)
Reported Earnings Per Diluted Share	$	0.43	$	0.41
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets (1)		0.01		-
Total pre-tax adjustments	$	0.01	$	-
Tax effect of adjustments (2)		-		-
Total adjustments after tax		0.01		-
Adjusted Earnings Per Diluted Share	$	0.44	$	0.41

_________________

(1) Amortization for acquired intangible assets relate to definite-lived intangible assets associated with the Trident acquisition.

(2) The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

(3) 2020 results include the Trident acquisition commencing on the March 2, 2020 date of acquisition.

Regulatory Updates

On March 11, 2021, President Biden signed a multi-faceted legislative package that includes new economic stimulus measures broadly targeting various aspects of the U.S. economy. Congress included in this legislation a modification to the 90-10 Rule applicable to for-profit institutions that alters the measurement under the rule from the percentage of Title IV Program tuition revenue an institution receives to the percentage of “federal educational assistance” an institution receives. While the required ratio to maintain Title IV Program eligibility will remain at below 90%, specific details on the modified rule and what constitutes “federal educational assistance” are expected to be determined pursuant to a negotiated rulemaking process. The legislation directs the Department to commence negotiated rulemaking no earlier than October 1, 2021 and specifies that the modified rule shall apply for institutional fiscal years beginning on or after January 1, 2023 to provide institutions time to evaluate and comply with the modified rule. See Item 1, “Business – Student Financial Aid and Related Federal Regulation – Compliance with Federal Regulatory Standards and Effect of Federal Regulatory Violations – ’90-10 Rule’” in our Annual Report on Form 10-K for the year ended December 31, 2020 for more information about the 90-10 Rule.

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CONSOLIDATED RESULTS OF OPERATIONS

The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the quarters ended March 31, 2021 and 2020 (dollars in thousands):

	For the Quarter Ended March 31,
		2021		% of Total Revenue				2020		% of Total Revenue			2021 vs 2020 % Change
TOTAL REVENUE	$	183,638					$	170,994						7.4	%
OPERATING EXPENSES
Educational services and facilities (1)		28,974			15.8	%		26,911			15.7	%		7.7	%
General and administrative: (2)
Advertising and marketing		36,794			20.0	%		35,057			20.5	%		5.0	%
Admissions		25,840			14.1	%		24,693			14.4	%		4.6	%
Administrative		33,687			18.3	%		30,917			18.1	%		9.0	%
Bad debt		13,724			7.5	%		12,862			7.5	%		6.7	%
Total general and administrative expense		110,045			59.9	%		103,529			60.5	%		6.3	%
Depreciation and amortization		4,002			2.2	%		2,639			1.5	%		51.6	%
Asset impairment		-			0.0	%		612			0.4	%	NM
OPERATING INCOME		40,617			22.1	%		37,303			21.8	%		8.9	%
PRETAX INCOME		41,009			22.3	%		38,736			22.7	%		5.9	%
PROVISION FOR INCOME TAXES		10,245			5.6	%		9,604			5.6	%		6.7	%
Effective tax rate		25.0	%					24.8	%
INCOME FROM CONTINUING OPERATIONS		30,764			16.8	%		29,132			17.0	%		5.6	%
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(11	)		0.0	%		(26	)		0.0	%		-57.7	%
NET INCOME	$	30,753			16.7	%	$	29,106			17.0	%		5.7	%

(1) Educational services and facilities expense includes costs attributable to the educational activities of our universities, including: salaries and benefits of faculty, academic administrators and student support personnel, and costs of educational supplies and facilities, such as rents on leased facilities and certain costs of establishing and maintaining computer laboratories. Also included in educational services and facilities expense are rents on leased administrative facilities, such as our corporate headquarters, and costs of other goods and services provided by our campuses, including costs of textbooks and laptop computers.

(2) General and administrative expense includes operating expenses associated with, including salaries and benefits of personnel in, corporate and campus administration, marketing, admissions, information technology, financial aid, accounting, human resources, legal and compliance. Other expenses within this expense category include costs of advertising and production of marketing materials and bad debt expense.

Revenue

Revenue for the first quarter of 2021 (“current quarter”) increased 7.4% or $12.6 million as compared to the prior year quarter supported by a 9.7% increase in total student enrollments. The current quarter revenue increase was also benefitted by three months of revenue related to Trident as compared to only one month of revenue in the prior year quarter.

Educational Services and Facilities Expense (dollars in thousands)

	For the Quarter Ended March 31,
		2021		2020	2021 vs 2020 % Change
Educational services and facilities:
Academics & student related	$	23,833	$	21,512	10.8%
Occupancy		5,141		5,399	-4.8%
Total educational services and facilities	$	28,974	$	26,911	7.7%

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The educational services and facilities expense for the current quarter increased by 7.7% or $2.1 million as compared to the prior year quarter. Academics and student related costs increased by 10.8% or $2.3 million for the current quarter as compared to the prior year quarter, primarily as a result of the Trident acquisition. Occupancy expenses for the current quarter improved by 4.8% or $0.3 million as compared to the prior year quarter, primarily driven by decreases associated with our closed campuses as those leased facilities reach the end of their lease terms.

General and Administrative Expense (dollars in thousands)

	For the Quarter Ended March 31,
		2021		2020	2021 vs 2020 % Change
General and administrative:
Advertising and marketing	$	36,794	$	35,057	5.0%
Admissions		25,840		24,693	4.6%
Administrative		33,687		30,917	9.0%
Bad debt		13,724		12,862	6.7%
Total general and administrative expense	$	110,045	$	103,529	6.3%

The general and administrative expense for the current quarter increased by 6.3% or $6.5 million as compared to the prior year quarter, driven by increases in administration, advertising and marketing, admissions and bad debt expenses. The administrative expense increased by 9.0% or $2.8 million for the current quarter as compared to the prior year quarter, primarily driven by increased employee related and other corporate support expenses within Corporate and Other as compared to the prior year quarter, as well as increases within AIU primarily related to the Trident acquisition.

The advertising and marketing expense for the current quarter increased by 5.0% or $1.7 million as compared to the prior year quarter, due to increased spending to address prospective student interest. This increase supported the positive total student enrollment growth within both CTU and AIU. Admissions expense increased by 4.6% or $1.1 million for the current quarter as compared to the prior year quarter, primarily as a result of the Trident acquisition.

Bad debt expense incurred by each of our segments during the quarters ended March 31, 2021 and 2020 was as follows (dollars in thousands):

	For the Quarter Ended March 31,
		2021		% of Segment Revenue				2020		% of Segment Revenue			2021 vs 2020 % Change
Bad debt expense:
CTU	$	6,323			6.0	%	$	6,683			6.5	%		-5.4	%
AIU		7,415			9.6	%		6,201			9.2	%		19.6	%
Corporate and Other		(14	)	NM				(22	)	NM			NM
Total bad debt expense	$	13,724			7.5	%	$	12,862			7.5	%		6.7	%

Bad debt expense increased by 6.7% or $0.9 million for the current quarter as compared to the prior year quarter, in line with the increase in revenue. Bad debt as a percentage of revenue remained flat at 7.5% for the current quarter and prior year quarter. AIU’s 40 basis point increase as a percentage of revenue was offset with CTU’s 50 basis point decrease as a percentage of revenue as we continue to see quarterly fluctuations in bad debt expense. We regularly monitor our reserve rates, which includes a review of our analysis of historical student receivable collectability which we update quarterly based on the most recent data available, along with current known factors which we believe could affect future collectability of our student receivables, including the number of students that do not complete the financial aid process. Our student support teams have maintained their focus on financial aid documentation collection and are counseling students through the Title IV process so that they are better prepared to start school. We have also focused on emphasizing employer-paid and other direct-pay education programs such as corporate partnerships as students within these programs typically have lower bad debt expense associated with them.

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Operating Income

Operating income increased by 8.9% or $3.3 million for the current quarter as compared to the prior year quarter. The increase was primarily due to the increased revenue for the current quarter as compared to the prior year quarter but also reflects efficiencies within operating processes. Partially offsetting the revenue growth and efficiencies within operating processes were increased expenses within all general and administrative expense categories primarily due to the Trident acquisition as well as investments in student-serving functions. Depreciation and amortization expense also increased as compared to the prior year quarter as a result of increased investments in technology initiatives and the Trident acquisition.

Provision for Income Taxes

For the quarter ended March 31, 2021, we recorded a provision for income taxes of $10.2 million or 25.0% as compared to a provision for income taxes of $9.6 million or 24.8% for the prior year quarter. The effective tax rate for the quarter ended March 31, 2021 was benefitted by the release of previously recorded tax reserves, which reduced the effective tax rate by 1.3%. The effective tax rate for the quarter ended March 31, 2020 was benefitted by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which reduced the effective tax rate by 1.9%. For the full year 2021, we expect our effective tax rate to be between 26.0% and 27.0%.

SEGMENT RESULTS OF OPERATIONS

The following tables present unaudited segment results for the reported periods (dollars in thousands):

	For the Quarter Ended March 31,
	REVENUE							OPERATING INCOME (LOSS)									OPERATING MARGIN
		2021		2020	% Change				2021			2020		% Change				2021			2020
REVENUE:
CTU	$	105,822	$	103,588		2.2	%	$	36,143		$	34,619			4.4	%		34.2	%		33.4	%
AIU (1)		77,477		67,396		15.0	%		11,323			9,376			20.8	%		14.6	%		13.9	%
Corporate and other (2)		339		10	NM				(6,849	)		(6,692	)		-2.3	%	NM			NM
Total	$	183,638	$	170,994		7.4	%	$	40,617		$	37,303			8.9	%		22.1	%		21.8	%

__________________

(1) AIU’s revenue and operating income for the quarter ended March 31, 2020, include results of operations related to Trident from the March 2, 2020 date of acquisition and therefore do not reflect a full quarter of activity for Trident.

(2) Results of operations for closed campuses are included within Corporate and Other.

Total student enrollments represent all students who are active as of the last day of the reporting period. Active students are defined as those students who are considered in attendance by participating in class related activities.

Beginning in the first quarter of 2021, we redesigned CTU’s academic calendar to strategically place breaks between sessions and provide more opportunities for students to continue with their academic programs. We believe this redesign will improve student experiences and engagement. CTU’s academic calendar redesign, along with the previous academic calendar redesign at AIU, may impact the comparability of revenue-earning days and enrollment days as well as new enrollment results between periods and new enrollment results may not be reflective of operating performance and enrollment growth. As a result, we no longer report new student enrollment results and focus our discussions on total student enrollments.

	TOTAL STUDENT ENROLLMENTS
	As of March 31,
		2021	2020	% Change
CTU		27,300	24,200		12.8	%
AIU		16,800	16,000		5.0	%
Total		44,100	40,200		9.7	%

CTU. Current quarter revenue increased by 2.2% or $2.2 million due to total student enrollment growth as compared to the prior year quarter. CTU experienced an increase in total student enrollments of 12.8% as of the end of the quarter as compared to the prior year quarter end. CTU’s academic calendar redesign positively impacted the total student enrollments as of March 31, 2021 due to a session start date on March 30^th this year as compared to a session start date that was in April in the prior year.

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Current quarter operating income for CTU increased by 4.4% or $1.5 million as compared to the prior year quarter driven by the increase in revenue as well as efficiencies within operating processes, which were partially offset with increased advertising and marketing and admissions expense for the current quarter as compared to the prior year quarter.

AIU. Current quarter revenue increased by 15.0% or $10.1 million driven by the Trident acquisition as well as total student enrollment growth of 5.0% as of the end of the quarter as compared to the prior year quarter end. The current quarter benefitted from a full quarter of revenue related to Trident as compared to one month in the prior year quarter. AIU’s increase in total student enrollments reflects consistent levels of prospective student interest which were well-served by AIU’s student enrollment and support teams.

Current quarter operating income for AIU increased by 20.8% or $1.9 million as compared to the prior year quarter, primarily driven by the increase in revenue as well as efficiencies within operating processes, which were partially offset with increases in all general and administrative expenses categories during the current quarter as compared to the prior year quarter primarily due to the Trident acquisition which has a full quarter of operating expenses during the current quarter as compared to one month in the prior year quarter.

Corporate and Other. This category includes unallocated costs that are incurred on behalf of the entire company and remaining expenses associated with closed campuses. Total Corporate and Other operating loss for the current quarter increased by 2.3% or $0.2 million as compared to the prior year quarter, primarily as a result of increased employee related and other corporate support expenses which more than offset the decreased operating losses associated with our closed campuses.

SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A detailed discussion of the accounting policies and estimates that we believe are most critical to our financial condition and results of operations that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties is included under the caption “Summary of Critical Accounting Policies and Estimates” included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2020. Note 2 “Summary of Significant Accounting Policies” of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2020 also includes a discussion of these and other significant accounting policies, and Note 3 "Recent Accounting Pronouncements" in this Form 10-Q describes accounting policies adopted in 2021.

LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

As of March 31, 2021, cash, cash equivalents, restricted cash and available-for-sale short-term investments (“cash balances”) totaled $451.0 million. Restricted cash as of March 31, 2021 was $4.0 million and relates to amounts held in an escrow account to secure post-closing indemnification obligations of the seller pursuant to the Trident acquisition. Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We expect to continue to generate cash during 2021. We anticipate that we will be able to satisfy the cash requirements associated with, among other things, our working capital needs, capital expenditures and lease commitments through at least the next 12 months primarily with cash generated by operations and existing cash balances.

Our credit agreement allows us to borrow up to a maximum amount of $50.0 million and is scheduled to mature on January 20, 2022. The credit agreement contains customary affirmative, negative and financial maintenance covenants, including a requirement to maintain a balance of cash, cash equivalents and marketable securities in our domestic accounts with the bank of at least $50.0 million at all times. Amounts borrowed under the credit agreement are required to be 100% secured with deposits of cash and marketable securities with the bank. Under the credit agreement, the Company’s ability to make restricted payments, including payments in connection with an acquisition or a repurchase of shares of our common stock, is subject to limitations. Taking into consideration restricted payments already made by the Company during the term of the credit agreement, the Company may make up to an additional $184.4 million of restricted payments through January 20, 2022.

We maintain a balanced capital allocation strategy that focuses on maintaining a strong balance sheet and adequate liquidity, while (i) prudently investing in organic growth projects at our universities, such as student-serving initiatives and new academic program development, and (ii) evaluating diverse strategies to enhance stockholder value, including acquisitions of quality educational institutions or programs and share repurchases. Ultimately, our goal is to deploy resources in a way that drives long term stockholder value while supporting and enhancing the academic value of our institutions.

On November 4, 2019, the Board of Directors of the Company approved a stock repurchase program which authorizes the Company to repurchase up to $50.0 million of our common stock from time to time depending on market conditions and other considerations. The program expires on December 31, 2021. Since the November 4, 2019 inception date, the Company repurchased approximately 1.6 million shares for $21.7 million.

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The discussion above reflects management’s expectations regarding liquidity; however, as a result of the significance of the Title IV Program funds received by our students, we are highly dependent on these funds to operate our business. Any reduction in the level of Title IV funds that our students are eligible to receive or any impact on timing or our ability to receive Title IV Program funds, or any requirement to post a significant letter of credit to the Department, may have a significant impact on our operations and our financial condition. In addition, our financial performance is dependent on the level of student enrollments which could be impacted by external factors. See Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2020.

Sources and Uses of Cash

Operating Cash Flows

During the quarters ended March 31, 2021 and 2020, net cash flows provided by operating activities totaled $44.7 million and $44.8 million, respectively.

Our primary source of cash flows from operating activities is tuition collected from our students. Our students derive the ability to pay tuition costs through the use of a variety of funding sources, including, among others, federal loan and grant programs, state grant programs, private loans and grants, institutional payment plans, private and institutional scholarships and cash payments. For the quarter ended March 31, 2021, approximately 81% of our institutions’ aggregate cash receipts from tuition payments came from Title IV Program funding as compared to 80% for the full year of 2020. This percentage differs from the Title IV Program percentage calculated under the 90-10 Rule due to the treatment of certain funding types and certain student level limitations on what and how much to count as prescribed under the rule.

For further discussion of Title IV Program funding and other funding sources for our students, see Item 1, “Business - Student Financial Aid and Related Federal Regulation,” in our Annual Report on Form 10-K for the year ended December 31, 2020.

Our primary uses of cash to support our operating activities include, among other things, cash paid and benefits provided to our employees for services, to vendors for products and services, to lessors for rents and operating costs related to leased facilities, to suppliers for textbooks and other institution supplies, and to federal, state and local governments for income and other taxes.

Investing Cash Flows

During the quarters ended March 31, 2021 and 2020, net cash flows used in investing activities totaled $62.6 million and $93.9 million, respectively. The prior year quarter included a payment of $34.1 million for the Trident acquisition.

Purchases and Sales of Available-for-Sale Investments. Purchases and sales of available-for-sale investments resulted in a net cash outflow of $61.6 million and $58.9 million for the quarters ended March 31, 2021 and 2020, respectively.

Capital Expenditures. Capital expenditures were $1.0 million for each of the quarters ended March 31, 2021 and 2020. Capital expenditures represented less than 1.0% of total revenue for each of the quarters ended March 31, 2021 and 2020. For the full year 2021, we expect capital expenditures to be approximately 1.5% to 2.0% of revenue.

Financing Cash Flows

During the quarters ended March 31, 2021 and 2020, net cash flows used in financing activities totaled $1.7 million and $17.6 million, respectively. The prior year quarter included $17.3 million of payments to repurchase shares of our common stock.

Payments of employee tax associated with stock compensation. Payments of employee tax associated with stock compensation were $2.0 million for the quarter ended March 31, 2021 and $0.7 million for the quarter ended March 31, 2020.

Changes in Financial Position

          Selected condensed consolidated balance sheet account changes from December 31, 2020 to March 31, 2021 were as follows (dollars in thousands):

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	March 31,		December 31,
	2021		2020		% Change
ASSETS
CURRENT ASSETS:
Total cash and cash equivalents, restricted cash and short-term investments	$	451,017	$	410,360		10	%
NON-CURRENT ASSETS:
Deferred income tax assets, net		35,584		40,351		-12	%
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued expenses - payroll and related benefits		15,207		22,661		-33	%
Accrued expenses - income taxes		6,627		1,402		373	%

           Total cash and cash equivalents, restricted cash and short-term investments: The increase is primarily driven by cash provided by operating activities as a result of the increase in total revenue within CTU and AIU during the current quarter, partially offset with cash outflows related to the payment of annual incentive compensation.

Deferred income tax assets, net: The decrease reflects the usage of deferred tax assets associated with the offset of income taxes payable.

Accrued expenses - payroll and related benefits: The decrease is driven primarily by the payments during the current quarter of annual incentive compensation.

Accrued expenses – income taxes: The increase is driven by the exhaustion of previous net operating losses which the Company utilized to offset its income taxes payable in prior periods. With the exhaustion of net operating losses, the Company began making income tax payments with respect to the first quarter of 2021.     

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks, primarily changes in interest rates. We use various techniques to manage our interest rate risk. We have no derivative financial instruments or derivative commodity instruments, and believe the risk related to cash equivalents and available for sale investments is limited due to the adherence to our investment policy, which focuses on capital preservation and liquidity. In addition, we use asset managers who conduct initial and ongoing credit analysis on our investment portfolio and monitor that investments are in compliance with our investment policy. Despite the investment risk mitigation strategies we employ, we may incur investment losses as a result of unusual and unpredictable market developments and may experience reduced investment earnings if the yields on investments deemed to be low risk remain low or decline.

Interest Rate Exposure

Our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell investments that have declined in market value due to changes in interest rates. At March 31, 2021, a 10% increase or decrease in interest rates applicable to our investments or borrowings would not have a material impact on our future earnings, fair values or cash flows.

Any outstanding borrowings under our revolving credit facility bear annual interest at fluctuating rates under either the Base Rate Loan or as determined by the London Interbank Offered Rate (“LIBOR”) for the relevant currency, plus the applicable rate based on the type of loan. Under the credit agreement, if LIBOR cannot be determined or an announcement is made about a specific date after which LIBOR will no longer be used for determining interest rates for loans, an alternative to LIBOR or a mechanism to establish an alternate rate is specified. As of March 31, 2021, we had no outstanding borrowings under this facility.

Our financial instruments are recorded at their fair values as of March 31, 2021 and December 31, 2020. We believe that the exposure of our consolidated financial position and results of operations and cash flows to adverse changes in interest rates applicable to our investments or borrowings is not significant.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We completed an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q (“Report”) under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief

24

Financial Officer concluded that, as of March 31, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that (i) the information required to be disclosed by us in this Report was recorded, processed, summarized and reported within the time periods specified in the rules and forms provided by the U.S. Securities and Exchange Commission (“SEC”), and (ii) information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Our management does not expect that our disclosure controls and procedures or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Note 8 “Contingencies” to our unaudited condensed consolidated financial statements is incorporated herein by reference.

Item 1A. Risk Factors

In addition to the information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Part I, Item 1A “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, which was filed with the Securities and Exchange Commission on February 24, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On November 4, 2019, the Board of Directors of the Company approved a stock repurchase program which authorizes the Company to repurchase up to $50.0 million of the Company’s outstanding common stock. The timing of purchases and the number of shares repurchased pursuant to the program will be determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, its assessment of alternative uses of capital, regulatory requirements and other factors. Repurchases will be made in open market transactions, including block purchases, conducted in accordance with Rule 10b-18 under the Exchange Act as well as may be made pursuant to trading plans established under Rule 10b5-1 under the Exchange Act,  which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The stock repurchase program does not obligate the Company to purchase shares and the Company may, in its discretion, begin, suspend or terminate repurchases at any time, without any prior notice. The program expires on December 31, 2021. As of March 31, 2021, approximately $28.2 million was available under the stock repurchase program.

The following table sets forth information regarding purchases made by us of shares of our common stock on a monthly basis during the quarter ended March 31, 2021:

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
December 31, 2020							$	28,231,593
January 1, 2021—January 31, 2021		-	$	-		-		28,231,593
February 1, 2021—February 28, 2021		-		-		-		28,231,593
March 1, 2021—March 31, 2021		159,989		12.70		-		28,231,593
Total		159,989				-

(1) Includes 159,989 shares delivered back to the Company for payment of withholding taxes from employees for vesting restricted stock units pursuant to the terms of the Company’s 2016 Incentive Compensation Plan.

(2) On November 4, 2019, the Board of Directors of the Company approved a stock repurchase program of up to $50.0 million which expires December 31, 2021.

Item 6. Exhibits

The exhibits required to be filed by Item 601 of Regulation S-K are listed in the “Exhibit Index,” which is attached hereto and incorporated by reference herein.

26

	INDEX TO EXHIBITS
Exhibit Number	Exhibit	Incorporated by Reference to:
*10.1	2021 Annual Incentive Award Program pursuant to the Career Education Corporation 2016 Incentive Compensation Plan	Exhibit 10.1 to our Form 8-K filed on March 9, 2021
+31.1	Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
+31.2	Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
+32.1	Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
+32.2	Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
+101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
+101.SCH	Inline XBRL Taxonomy Extension Schema Document
+101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
+101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
+101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
+101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
+104	The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline XBRL (included in Exhibit 101)
	____
	* Management contract or compensatory plan or arrangement required to be filed as an Exhibit on this Form 10-Q.
	+Filed herewith.

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PERDOCEO EDUCATION CORPORATION
Date: May 6, 2021	By:	/s/ TODD S. NELSON
		Todd S. Nelson President and Chief Executive Officer (Principal Executive Officer)
Date: May 6, 2021	By:	/s/ ASHISH R. GHIA
		Ashish R. Ghia Senior Vice President and Chief Financial Officer (Principal Financial Officer)

28

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Todd S. Nelson, President and Chief Executive Officer of Perdoceo Education Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Perdoceo Education Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2021

/s/ TODD S. NELSON

Todd S. Nelson

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Ashish R. Ghia, Senior Vice President and Chief Financial Officer of Perdoceo Education Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Perdoceo Education Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2021

/s/ ASHISH R. GHIA     

Ashish R. Ghia

Senior Vice President and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Perdoceo Education Corporation (the “Company”) for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd S. Nelson, President and Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ TODD S. NELSON     

Todd S. Nelson

President and Chief Executive Officer

May 6, 2021

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Perdoceo Education Corporation (the “Company”) for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ashish R. Ghia, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i) the Report fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ ASHISH R. GHIA     

Ashish R. Ghia

Senior Vice President and Chief Financial Officer

May 6, 2021

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	May 03, 2021
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2021
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Trading Symbol	PRDO
Title of 12(b) Security	Common Stock, $0.01 par value
Security Exchange Name	NASDAQ
Entity Registrant Name	PERDOCEO EDUCATION CORP
Entity Central Index Key	0001046568
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		70,439,842
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-23245
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	36-3932190
Entity Address, Address Line One	231 N. Martingale Road
Entity Address, City or Town	Schaumburg
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60173
City Area Code	847
Local Phone Number	781-3600

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands		Mar. 31, 2021	Dec. 31, 2020
CURRENT ASSETS:
Cash and cash equivalents, unrestricted		$ 86,031	$ 105,684
Restricted cash		4,000	4,000
Total cash, cash equivalents and restricted cash		90,031	109,684
Short-term investments		360,986	300,676
Total cash and cash equivalents, restricted cash and short-term investments		451,017	410,360
Student receivables, gross		82,592	84,599
Allowance for credit losses		(41,110)	(39,917)
Student receivables, net		41,482	44,682
Receivables, other		2,684	2,873
Prepaid expenses		10,023	8,209
Inventories		594	596
Other current assets		253	341
Total current assets		506,053	467,061
NON-CURRENT ASSETS:
Property and equipment, net of accumulated depreciation of $104,548 and $101,380 as of March 31, 2021 and December 31, 2020, respectively		25,696	27,761
Right of use asset, net		42,425	44,773
Goodwill		118,312	118,312
Intangible assets, net of amortization of $5,011 and $4,178 as of March 31, 2021 and December 31, 2020, respectively		14,689	15,522
Student receivables, gross		3,970	3,533
Allowance for credit losses		(2,675)	(2,230)
Student receivables, net		1,295	1,303
Deferred income tax assets, net		35,584	40,351
Other assets		6,311	6,434
TOTAL ASSETS	[1]	750,365	721,517
CURRENT LIABILITIES:
Lease liability-operating		9,677	9,789
Accounts payable		10,767	13,259
Accrued expenses:
Payroll and related benefits		15,207	22,661
Advertising and marketing costs		11,643	10,249
Income taxes		6,627	1,402
Other		12,294	11,921
Deferred revenue		37,004	34,534
Total current liabilities		103,219	103,815
NON-CURRENT LIABILITIES:
Lease liability-operating		40,423	43,405
Other liabilities		18,378	18,390
Total non-current liabilities		58,801	61,795
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding
Common stock, $0.01 par value; 300,000,000 shares authorized; 87,795,103 and 87,264,910 shares issued, 70,432,568 and 70,062,364 shares outstanding as of March 31, 2021 and December 31, 2020, respectively		878	873
Additional paid-in capital		662,485	658,423
Accumulated other comprehensive income		14	364
Retained earnings		173,088	142,335
Treasury stock, at cost; 17,362,535 and 17,202,546 shares as of March 31, 2021 and December 31, 2020, respectively		(248,120)	(246,088)
Total stockholders' equity		588,345	555,907
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 750,365	$ 721,517

[1] Total assets do not include intercompany receivable or payable activity between institutions and corporate and investments in subsidiaries.

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Statement Of Financial Position [Abstract]
Property and equipment, accumulated depreciation	$ 104,548	$ 101,380
Intangible assets, amortization	$ 5,011	$ 4,178
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	87,795,103	87,264,910
Common stock, shares outstanding	70,432,568	70,062,364
Treasury stock, shares	17,362,535	17,202,546

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
REVENUE:
Total revenue		$ 183,638	$ 170,994
OPERATING EXPENSES:
Educational services and facilities		28,974	26,911
General and administrative		110,045	103,529
Depreciation and amortization		4,002	2,639
Asset impairment			612
Total operating expenses		143,021	133,691
Operating income		40,617	37,303
OTHER INCOME:
Interest income		359	1,487
Interest expense		(109)	(41)
Miscellaneous income (expense)		142	(13)
Total other income		392	1,433
PRETAX INCOME		41,009	38,736
Provision for income taxes		10,245	9,604
INCOME FROM CONTINUING OPERATIONS		30,764	29,132
LOSS FROM DISCONTINUED OPERATIONS, net of tax		(11)	(26)
NET INCOME		$ 30,753	$ 29,106
NET INCOME PER SHARE - BASIC:		$ 0.44	$ 0.42
NET INCOME PER SHARE - DILUTED:		$ 0.43	$ 0.41
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic		70,149	69,839
Diluted		71,482	71,714
Tuition and Fees [Member]
REVENUE:
Total revenue		$ 182,831	$ 170,394
Other [Member]
REVENUE:
Total revenue	[1]	$ 807	$ 600

[1] Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
NET INCOME	$ 30,753	$ 29,106
OTHER COMPREHENSIVE (LOSS) INCOME, net of tax:
Foreign currency translation adjustments	(129)	(48)
Unrealized loss on investments	(221)	(839)
Total other comprehensive loss	(350)	(887)
COMPREHENSIVE INCOME	$ 30,403	$ 28,219

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings (Accumulated Deficit) [Member]
BALANCE at Dec. 31, 2019	$ 431,295	$ 860	$ (227,315)	$ 639,335	$ 344	$ 18,071
BALANCE, shares at Dec. 31, 2019		85,953,000
BALANCE, shares at Dec. 31, 2019			(15,802,000)
Net income (loss)	29,106					29,106
Foreign currency translation	(48)				(48)
Unrealized gain (loss) on investments	(839)				(839)
Treasury stock purchased	(17,309)		$ (17,309)
Treasury stock purchased, shares			(1,284,000)
Share-based compensation expense	3,212			3,212
Common stock issued	(274)	$ 2	$ (687)	411
Common stock issued, shares		256,000	(62,000)
BALANCE at Mar. 31, 2020	445,143	$ 862	$ (245,311)	642,958	(543)	47,177
BALANCE, shares at Mar. 31, 2020		86,209,000
BALANCE, shares at Mar. 31, 2020			(17,148,000)
BALANCE at Dec. 31, 2020	$ 555,907	$ 873	$ (246,088)	658,423	364	142,335
BALANCE, shares at Dec. 31, 2020	87,264,910	87,265,000
BALANCE, shares at Dec. 31, 2020	(17,202,546)		(17,203,000)
Net income (loss)	$ 30,753					30,753
Foreign currency translation	(129)				(129)
Unrealized gain (loss) on investments	(221)				(221)
Share-based compensation expense	3,753			3,753
Common stock issued	(1,718)	$ 5	$ (2,032)	309
Common stock issued, shares		530,000	(160,000)
BALANCE at Mar. 31, 2021	$ 588,345	$ 878	$ (248,120)	$ 662,485	$ 14	$ 173,088
BALANCE, shares at Mar. 31, 2021	87,795,103	87,795,000
BALANCE, shares at Mar. 31, 2021	(17,362,535)		(17,363,000)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 30,753	$ 29,106
Adjustments to reconcile net income to net cash provided by operating activities:
Asset impairment		612
Depreciation and amortization expense	4,002	2,639
Bad debt expense	13,719	12,862
Compensation expense related to share-based awards	3,753	3,212
Deferred income taxes	4,767	9,468
Changes in operating assets and liabilities	(12,286)	(13,131)
Net cash provided by operating activities	44,708	44,768
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments	(126,009)	(111,753)
Sales of available-for-sale investments	64,408	52,893
Purchases of property and equipment	(1,042)	(1,015)
Business acquisition		(34,065)
Net cash used in investing activities	(62,643)	(93,940)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock	314	413
Purchase of treasury stock		(17,309)
Payments of employee tax associated with stock compensation	(2,032)	(687)
Net cash used in financing activities	(1,718)	(17,583)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(19,653)	(66,755)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period	109,684	108,687
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period	$ 90,031	41,932
Supplemental non-cash disclosure:
Amounts placed in escrow during the period to secure indemnification obligations from business acquisition		$ 4,000

XML

Description of the Company

3 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of the Company

1. DESCRIPTION OF THE COMPANY

Perdoceo’s academic institutions offer a quality postsecondary education primarily online to a diverse student population, along with campus-based and blended learning programs. Our accredited institutions – Colorado Technical University (“CTU”) and the American InterContinental University System (“AIU”) – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. Our universities offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIU continue to show innovation in higher education, advancing personalized learning technologies like their intellipath^® learning platform and using data analytics and technology to support students and enhance learning. Perdoceo is committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “the Company,” “Perdoceo” and “PEC” refer to Perdoceo Education Corporation and our wholly-owned subsidiaries.

XML

Basis of Presentation

3 Months Ended

Mar. 31, 2021

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

2. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments, including normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the quarter ended March 31, 2021 are not necessarily indicative of the results that may be expected for the full year ending December 31, 2021.

The unaudited condensed consolidated financial statements presented herein include the accounts of Perdoceo Education Corporation and our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.

         Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIU.

XML

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2021

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements

3. RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting guidance adopted in 2021

In December 2019, the FASB issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU simplify the accounting for income taxes by removing certain exceptions, including the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operations and income or a gain from other items and the exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. The amendments in this ASU also simplify the accounting for income taxes by requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax and requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. For all public business entities, ASU 2019-12 is effective for annual periods and interim periods beginning after December 15, 2020. We have evaluated and adopted this guidance effective January 1, 2021. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

XML

Financial Instruments

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Financial Instruments

4. FINANCIAL INSTRUMENTS

Investments consist of the following as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	March 31, 2021
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	139	$	1	$	-		$	140
Non-governmental debt securities		354,136		145		(208	)		354,073
Treasury and federal agencies		6,770		5		(2	)		6,773
Total short-term investments (available for sale)	$	361,045	$	151	$	(210	)	$	360,986

	December 31, 2020
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	139	$	1	$	-		$	140
Non-governmental debt securities		288,578		331		(176	)		288,733
Treasury and federal agencies		11,799		6		(2	)		11,803
Total short-term investments (available for sale)	$	300,516	$	338	$	(178	)	$	300,676

In the table above, unrealized holding gains (losses) relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year.

Our non-governmental debt securities primarily consist of commercial paper and certificates of deposit. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities. We do not intend to sell our investments in these securities prior to maturity and it is not likely that we will be required to sell these investments before recovery of the amortized cost basis.  

Fair Value Measurements

FASB ASC Topic 820 – Fair Value Measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of March 31, 2021, we held investments that are required to be measured at fair value on a recurring basis. These investments (available for sale) consist of municipal bonds, non-governmental debt securities and treasury and federal agencies securities. Available for sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

All of our available for sale investments were measured under Level 2 as of March 31, 2021 and December 31, 2020. Additionally, money market funds of $20.9 million and $1.7 million included within cash and cash equivalents on our condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively, were measured under Level 1 and certificates of deposit, commercial paper and treasury bills of $5.5 million and $5.1 million included within cash and cash equivalents on our condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020, respectively, were measured under Level 2.

Equity Method Investment

Our investment in an equity affiliate, which is recorded within other noncurrent assets on our condensed consolidated balance sheets, represents an international investment in a private company. As of March 31, 2021, our investment in an equity affiliate equated to a 30.7%, or $3.2 million, non-controlling interest in CCKF, a Dublin-based educational technology company providing intelligent systems to power the delivery of individualized and personalized learning.

During the quarters ended March 31, 2021 and 2020, we recorded approximately $0.2 million of gain and $0.1 million of gain, respectively, related to our proportionate investment in CCKF within miscellaneous income (expense) on our unaudited condensed consolidated statements of income.

We make periodic operating maintenance payments related to proprietary rights that we use in our intellipath^® personalized learning technology. The total fees paid during the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	Maintenance Fee Payments
For the quarter ended March 31, 2021	$	423
For the quarter ended March 31, 2020 (1)	$	1,443

________________________

(1)During the first quarter of 2020, the Company prepaid maintenance payments for the full year 2020, of which approximately $0.4 million was recognized as expense for the quarter ended March 31, 2020.

Credit Agreement

On December 27, 2018, the Company; its wholly-owned subsidiary, CEC Educational Services, LLC; and the subsidiary guarantors thereunder, entered into a credit agreement with BMO Harris Bank N.A. (“BMO Harris”), in its capacities as the sole lender, the letter of credit issuer thereunder and the administrative agent for the lenders which from time to time may be parties to the credit agreement. The credit agreement provides the Company with the benefit of a $50.0 million revolving credit facility and is scheduled to mature on January 20, 2022. The loans and letter of credit obligations under the credit agreement are required to be 100% secured with cash and marketable securities deposited with the bank. As of March 31, 2021 and December 31, 2020, there were no outstanding borrowings under the revolving credit facility.

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Revenue Recognition

3 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Revenue Recognition

5. REVENUE RECOGNITION

Disaggregation of Revenue

The following tables disaggregate our revenue by major source for the quarters ended March 31, 2021 and 2020 (dollars in thousands):

	For the Quarter Ended March 31, 2021								For the Quarter Ended March 31, 2020
	CTU		AIU		Corporate and Other(3)		Total		CTU		AIU		Corporate and Other(3)		Total
Tuition	$	99,605	$	74,498	$	-	$	174,103	$	97,551	$	64,545	$	-	$	162,096
Technology fees		5,483		2,795		-		8,278		5,120		2,657		-		7,777
Other miscellaneous fees(1)		292		158		-		450		372		149		-		521
Total tuition and fees		105,380		77,451		-		182,831		103,043		67,351		-		170,394
Other revenue(2)		442		26		339		807		545		45		10		600
Total revenue	$	105,822	$	77,477	$	339	$	183,638	$	103,588	$	67,396	$	10	$	170,994

__________________

(1) Other miscellaneous fees include student activity fees and graduation fees.

(2) Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.

(3) Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue.

Performance Obligations

Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities. Our universities charge tuition and fees at varying amounts, depending on the university, the type of program and specific curriculum. Our universities bill students a single charge that covers tuition, fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed to students. These fees are earned over the applicable term and are not considered separate performance obligations.

Other revenue, which consists of contract training revenue, bookstore sales and miscellaneous non-student related revenue, is billed and recognized as goods are delivered or services are performed. Contract training revenue results from individual training courses that are stand-alone courses and not part of a degree or certificate program. Bookstore sales are primarily initiated by the student and are not included in the enrollment agreement at the onset of a student’s entrance to the institution. These types of sales constitute a separate performance obligation from classroom instruction.

Our institutions’ academic year is generally at least 30 weeks in length but varies both by institution and program of study and is divided by academic terms. Academic terms are determined by regulatory requirements mandated by the federal government and/or applicable accrediting body, which also vary by university and program. Academic terms are determined by start dates, which vary by university and program and are generally 8-12 weeks in length.

Contract Assets

For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our condensed consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our condensed consolidated balance sheets. For AIU’s Trident programs, students are billed as they register for courses, including courses related to future terms. Any billings for future terms would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the academic term has not yet started. Contract assets related to future terms are offset against the deferred revenue associated with the respective future term.

Due to the short-term nature of our academic terms, the contract asset balance which exists at the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future terms. The decrease in contract asset balances are a result of one of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their previously billed amount. As of the end of each quarter, a new contract asset is determined on a student by student basis based on the most recently started term and a student’s progress within that term as compared to the date at which the student is no longer entitled to a refund under each institution’s refund policy. Contract assets associated with future terms remain as contract assets until the academic term begins and the student reaches the point in that academic term that they are no longer entitled to a refund.

The amount of deferred revenue balances which are being offset with contract assets balances as of March 31, 2021 and December 31, 2020 were as follows (dollars in thousands):

	As of
	March 31, 2021			December 31, 2020
Gross deferred revenue	$	58,022		$	85,402
Gross contract assets		(21,018	)		(50,868	)
Deferred revenue, net	$	37,004		$	34,534

Deferred Revenue

Changes in our deferred revenue balances for the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	For the Quarter Ended									For the Quarter Ended
	March 31, 2021									March 31, 2020
	CTU			AIU			Total			CTU			AIU			Total
Gross deferred revenue, January 1	$	28,522		$	56,880		$	85,402		$	27,845		$	35,359		$	63,204
Business acquisition, beginning balance		-			-			-			-			13,395			13,395
Revenue earned from prior balances		(25,689	)		(42,403	)		(68,092	)		(25,149	)		(31,518	)		(56,667	)
Billings during period(1)		101,784			52,561			154,345			103,044			46,648			149,692
Revenue earned for new billings during the period		(79,691	)		(35,048	)		(114,739	)		(77,894	)		(35,833	)		(113,727	)
Other adjustments		210			896			1,106			140			883			1,023
Gross deferred revenue, March 31	$	25,136		$	32,886		$	58,022		$	27,986		$	28,934		$	56,920

______________

1) Billings during period includes adjustments for prior billings.

Cash Receipts

Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer reimbursement, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer reimbursements. Students who

have not applied for any type of financial aid generally set up a payment plan with the university and make payments on a monthly basis per the terms of the payment plan.

If a student withdraws from one of our universities prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Generally, the amount to be refunded to a student is calculated based upon the percent of the term attended and the amount of tuition and fees paid by the student as of their withdrawal date. In certain circumstances, we have recognized revenue for students who have withdrawn that we are not entitled to retain. We have estimated a reserve for these limited circumstances based on historical evidence in the amount of $2.3 million as of March 31, 2021 and December 31, 2020. Students are typically entitled to a partial refund until approximately halfway through their term. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date.

Management reassesses collectability when a student withdraws from the university and has unpaid tuition charges for the current term which the university is entitled to retain per the applicable refund policy. Such unpaid charges do not meet the threshold of reasonably collectible and are recognized as revenue in accordance with ASC Topic 606 when cash is received and the contract is terminated and neither party has further performance obligations. We have no remaining performance obligations for students who have withdrawn from our universities, and once the refund calculation is performed and funds are returned to the student, if applicable under our refund policy, no further consideration is due back to the student. We recognized $0.4 million and $0.3 million of revenue for the quarters ended March 31, 2021 and 2020, respectively, for payments received from withdrawn students.

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Student Receivables

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Student Receivables

6. STUDENT RECEIVABLES

Student receivables represent funds owed to us in exchange for the educational services provided to a student. Student receivables are reflected net of an allowance for credit losses at the end of the reporting period. Student receivables, net, are reflected on our condensed consolidated balance sheets as components of both current and non-current assets. We do not charge interest or fees on any of our payment plans.

Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer reimbursement, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments. Cash receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer reimbursements. Students who have not applied for any type of financial aid generally set up a payment plan with the institution and make payments on a monthly basis per the terms of the payment plan. For those balances that are not received during the academic term, the balance is typically due within the current academic year which is approximately 30 weeks in length. Generally, a student receivable balance is written off once a student is out of school and it reaches greater than 90 days past due.

Our standard student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trend analysis and comparing estimated and actual performance.

Student Receivables Under Extended Payment Plans

We have an immaterial amount of student receivables that are due greater than 12 months from the date of our condensed consolidated balance sheets. As of March 31, 2021 and December 31, 2020, the amount of non-current student receivables under payment plans that are longer than 12 months in duration, net of allowance for credit losses, was $1.3 million for each period.

Allowance for Credit Losses

We define student receivables as a portfolio segment under ASC Topic 326 – Financial Instruments – Credit Losses. Changes in our current and non-current allowance for credit losses related to our student receivable portfolio in accordance with the guidance under ASU 2016-13 for the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	For the Quarter Ended March 31,
	2021			2020
Balance, beginning of period	$	42,147		$	31,964
Beginning balance related to business acquisition		-			2,174
Provision for credit losses		13,724			12,862
Amounts written-off		(13,067	)		(11,601	)
Recoveries		981			696
Balance, end of period	$	43,785		$	36,095

Fair Value Measurements

The carrying amount reported in our condensed consolidated balance sheets for the current portion of student receivables approximates fair value because of the nature of these financial instruments as they generally have short maturity periods. It is not practicable to estimate the fair value of the non-current portion of student receivables, since observable market data is not readily available, and no reasonable estimation methodology exists.

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Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

7. LEASES

We lease most of our administrative and educational facilities under non-cancelable operating leases expiring at various dates through 2032. Lease terms generally range from five to ten years with one to four renewal options for extended terms. In most cases, we are required to make additional payments under facility operating leases for taxes, insurance and other operating expenses incurred during the operating lease period, which are typically variable in nature.

We determine if a contract contains a lease when the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish a right of use (“ROU”) asset and a lease liability.

Quantitative information related to leases is presented in the following table (dollars in thousands):

	For the Quarter Ended March 31, 2021			For the Quarter Ended March 31, 2020
Lease expenses (1)
Fixed lease expenses - operating	$	3,015		$	3,148
Variable lease expenses - operating		1,513			1,915
Sublease income		(499	)		(788	)
Total lease expenses	$	4,029		$	4,275
Other information
Gross operating cash flows for operating leases (2)	$	(5,221	)	$	(6,190	)
Operating cash flows from subleases (2)	$	530		$	676
	As of March 31, 2021			As of March 31, 2020
Weighted average remaining lease term (in months) – operating leases		73			74
Weighted average discount rate – operating leases		5.0	%		5.0	%

__________________

(1) Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period.

(2) Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs.

Subleases

For certain of our leased locations we have vacated the facility and have fully or partially subleased the space. For each sublease that has been entered into, we remain the guarantor under the lease and therefore become the intermediate lessor. We have three subleases within three leased facilities with terms ranging from less than one year to two years. We have recognized sublease income of $0.5 million and $0.8 million for the quarters ended March 31, 2021 and 2020, respectively, as an offset to lease expense on our unaudited condensed consolidated statements of income.

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Contingencies

3 Months Ended

Mar. 31, 2021

Loss Contingency [Abstract]

Contingencies

8. CONTINGENCIES

An accrual for estimated legal fees and settlements of $0.5 million and $1.0 million at March 31, 2021 and December 31, 2020, respectively, is presented within other current liabilities on our condensed consolidated balance sheets.

We record a liability when we believe that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued and make adjustments as further information develops, circumstances change or contingencies are resolved. Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (1) if the damages sought are indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty as to the outcome of pending appeals, motions or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any.

We receive informal requests from state attorneys general and other government agencies relating to specific complaints they have received from students or former students which seek information about the student, our programs and other matters relating to our activities in the relevant state. These requests can be broad and time consuming to respond to, and there is a risk that they could expand and/or lead to a formal inquiry or investigation into our practices in a particular state. We are subject to a variety of other claims, lawsuits, arbitrations and investigations that arise from time to time out of the conduct of our business, including, but not limited to, matters involving prospective students, students or graduates, alleged violations of the Telephone Consumer Protection Act, both individually and on behalf of a putative class, and employment matters. Periodically matters arise that we consider outside the scope of ordinary routine litigation incidental to our business. While we currently believe that these matters, individually or in aggregate, will not have a material adverse impact on our financial position, cash flows or results of operations, these matters are subject to inherent uncertainties, and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on our business, reputation, financial position and cash flows.  

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Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

9. INCOME TAXES  

The determination of the annual effective tax is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which we operate and the ongoing development of tax planning strategies during the year. In addition, our provision for income taxes can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

The following is a summary of our provision for income taxes and effective tax rate from continuing operations:

	For the Quarter Ended March 31,
(Dollars in Thousands)	2021			2020
Pretax income	$	41,009		$	38,736
Provision for income taxes	$	10,245		$	9,604
Effective rate		25.0	%		24.8	%

As of December 31, 2020, a valuation allowance of $29.0 million was maintained with respect to our foreign tax credits not supported by an Overall Domestic Loss (“ODL”) account balance and state net operating losses. After considering both positive and negative evidence related to the realization of the deferred tax assets, we have determined that it is necessary to continue to maintain a $29.0 million valuation allowance against our non-ODL supported foreign tax credits and state net operating losses as of March 31, 2021.

The effective tax rate for the quarter ended March 31, 2021 was benefitted by the release of previously recorded tax reserves, which reduced the effective tax rate by 1.3%. The effective tax rate for the quarter ended March 31, 2020 was benefitted by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which reduced the effective tax rate by 1.9%.

We estimate that it is reasonably possible that the gross liability for unrecognized tax benefits for a variety of uncertain tax positions will decrease by up to $1.5 million in the next twelve months as a result of the completion of various tax audits currently in

process and the expiration of the statute of limitations in several jurisdictions. The income tax rate for the quarter ended March 31, 2021 does not take into account the possible reduction of the liability for unrecognized tax benefits. The impact of a reduction to the liability will be treated as a discrete item in the period the reduction occurs. We recognize interest and penalties related to unrecognized tax benefits in tax expense. As of March 31, 2021, we had accrued $1.8 million as an estimate for reasonably possible interest and accrued penalties.

Our tax returns are routinely examined by federal, state and local tax authorities and these audits are at various stages of completion at any given time. The Internal Revenue Service has completed its examination of our U.S. income tax returns through our tax year ended December 31, 2014.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Compensation

10. SHARE-BASED COMPENSATION

Overview

The Company’s 2016 Incentive Compensation Plan (the “2016 Plan”) was approved by stockholders in May 2016. Under the 2016 Plan, Perdoceo may grant to eligible participants awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock, performance units, annual incentive awards, and substitute awards, which generally may be settled in cash or shares of our common stock. The vesting of all types of awards is subject to possible acceleration in certain circumstances. If a plan participant terminates employment for any reason other than by death or disability during the vesting period, the right to unvested awards is generally forfeited.

Restricted Stock Units

For the quarters ended March 31, 2021 and 2020, the Company granted approximately 0.3 million and 0.2 million restricted stock units, respectively, to be settled in shares of stock which are not “performance-based,” with a grant-date fair value of approximately $3.6 million and $3.5 million, respectively.

Additionally, for the quarters ended March 31, 2021 and 2020, the Company granted approximately 0.4 million and 0.3 million restricted stock units, respectively, to be settled in shares of stock which are “performance-based,” with a grant-date fair value of approximately $4.2 million and $3.9 million, respectively. The performance-based restricted stock units are subject to performance conditions which are determined at the time of grant and typically cover a three-year performance period. These performance conditions may result in all units being forfeited even if the requisite service period is met.

Stock Options

There were no stock options granted during each of the quarters ended March 31, 2021 and 2020.

Share-Based Compensation Expense

Total share-based compensation expense for the quarters ended March 31, 2021 and 2020 for all types of awards was as follows (dollars in thousands):

	For the Quarter Ended March 31,
Award Type	2021		2020
Stock options	$	160	$	405
Restricted stock units settled in stock		3,588		2,803
Restricted stock units settled in cash		-		(240	)
Total share-based compensation expense	$	3,748	$	2,968

As of March 31, 2021, we estimate that compensation expense of approximately $23.0 million will be recognized over the next four years for all unvested share-based awards that have been granted to participants. This amount excludes any estimates of forfeitures.

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Weighted Average Common Shares

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Weighted Average Common Shares

11. WEIGHTED AVERAGE COMMON SHARES

Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that would be outstanding if dilutive stock options were exercised and restricted stock units were settled for common shares during the period.

The weighted average number of common shares used to compute basic and diluted net income per share for the quarters ended March 31, 2021 and 2020 were as follows (shares in thousands):

	For the Quarter Ended March 31,
	2021		2020
Basic common shares outstanding		70,149		69,839
Common stock equivalents		1,333		1,875
Diluted common shares outstanding		71,482		71,714

For the quarters ended March 31, 2021 and 2020, certain unexercised stock option awards are excluded from our computations of diluted earnings per share, as these shares were out-of-the-money and their effect would have been anti-dilutive. The anti-dilutive options that were excluded from our computations of diluted earnings per share were 0.5 million and 0.6 million shares for the quarters ended March 31, 2021 and 2020, respectively.

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Segment Reporting

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

12. SEGMENT REPORTING

Our segments are determined in accordance with FASB ASC Topic 280—Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment is comprised of an accredited postsecondary education institution that offers a variety of academic programs. These segments are organized by key market segments and to enhance brand focus within each segment to more effectively execute our business plan. As of March 31, 2021, our two segments are:

♦ Colorado Technical University (CTU) is committed to providing industry-relevant higher education to a diverse student population through innovative technology and experienced faculty, enabling the pursuit of personal and professional goals. CTU is focused on serving adult, non-traditional students seeking career advancement, as well as the employer’s needs for a well-educated workforce. The university offers academic programs in the career-oriented disciplines of business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of March 31, 2021, students enrolled at CTU represented approximately 62% of our total enrollments. Approximately 95% of CTU’s students are enrolled in programs offered fully online. CTU’s campus-based and blended-format students are currently pursuing their education solely through CTU’s online platform as a result of the COVID-19 pandemic.

♦ The American InterContinental University System (AIU) is comprised of two universities: American InterContinental University and Trident University International (“Trident” or “TUI”). AIU is committed to providing quality and accessible higher education opportunities for a diverse student population, including adult or other non-traditional learners and the military community. AIU places emphasis on the educational, professional and personal growth of each student, and pursues this aim with a commitment to institutional integrity and ethics. AIU offers academic programs in the career-oriented disciplines of business studies, information technologies, education, health sciences and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of March 31, 2021, students enrolled at AIU represented approximately 38% of our total enrollments. Approximately 97% of AIU’s students are enrolled in programs offered fully online. Substantially all of AIU’s campus-based and blended-format students are currently pursuing their education solely through AIU’s online platform as a result of the COVID-19 pandemic.

Summary financial information by reporting segment is as follows (dollars in thousands):

	For the Quarter Ended March 31,
	Revenue										Operating Income (Loss)
	2021		% of Total			2020		% of Total			2021			2020
CTU	$	105,822		57.6	%	$	103,588		60.6	%	$	36,143		$	34,619
AIU (1)		77,477		42.2	%		67,396		39.4	%		11,323			9,376
Corporate and Other (2)		339	NM				10	NM				(6,849	)		(6,692	)
Total	$	183,638		100.0	%	$	170,994		100.0	%	$	40,617		$	37,303

	Total Assets as of  (3)
	March 31, 2021		December 31, 2020
CTU	$	102,237	$	96,922
AIU		129,961		141,602
Corporate and Other (2)		518,167		482,993
Total	$	750,365	$	721,517

(1) AIU’s revenue and operating income for the quarter ended March 31, 2020, include results of operations related to Trident from the March 2, 2020 date of acquisition and therefore do not reflect a full quarter of activity for Trident.

(2) Corporate and Other includes results of operations and total assets for closed campuses.

(3) Total assets do not include intercompany receivable or payable activity between institutions and corporate and investments in subsidiaries.

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Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Summary of Investments

Investments consist of the following as of March 31, 2021 and December 31, 2020 (dollars in thousands):

	March 31, 2021
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	139	$	1	$	-		$	140
Non-governmental debt securities		354,136		145		(208	)		354,073
Treasury and federal agencies		6,770		5		(2	)		6,773
Total short-term investments (available for sale)	$	361,045	$	151	$	(210	)	$	360,986

	December 31, 2020
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Municipal bonds	$	139	$	1	$	-		$	140
Non-governmental debt securities		288,578		331		(176	)		288,733
Treasury and federal agencies		11,799		6		(2	)		11,803
Total short-term investments (available for sale)	$	300,516	$	338	$	(178	)	$	300,676

Schedule of Maintenance Fee Payment to CCKF

We make periodic operating maintenance payments related to proprietary rights that we use in our intellipath^® personalized learning technology. The total fees paid during the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	Maintenance Fee Payments
For the quarter ended March 31, 2021	$	423
For the quarter ended March 31, 2020 (1)	$	1,443

________________________

(1)During the first quarter of 2020, the Company prepaid maintenance payments for the full year 2020, of which approximately $0.4 million was recognized as expense for the quarter ended March 31, 2020.

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2021

Revenue From Contract With Customer [Abstract]

Summary of Disaggregation of Revenue by Major Source

The following tables disaggregate our revenue by major source for the quarters ended March 31, 2021 and 2020 (dollars in thousands):

	For the Quarter Ended March 31, 2021								For the Quarter Ended March 31, 2020
	CTU		AIU		Corporate and Other(3)		Total		CTU		AIU		Corporate and Other(3)		Total
Tuition	$	99,605	$	74,498	$	-	$	174,103	$	97,551	$	64,545	$	-	$	162,096
Technology fees		5,483		2,795		-		8,278		5,120		2,657		-		7,777
Other miscellaneous fees(1)		292		158		-		450		372		149		-		521
Total tuition and fees		105,380		77,451		-		182,831		103,043		67,351		-		170,394
Other revenue(2)		442		26		339		807		545		45		10		600
Total revenue	$	105,822	$	77,477	$	339	$	183,638	$	103,588	$	67,396	$	10	$	170,994

__________________

(1) Other miscellaneous fees include student activity fees and graduation fees.

(2) Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.

(3) Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue.

Summary of Deferred Revenue Balances Offset with Contract Assets

The amount of deferred revenue balances which are being offset with contract assets balances as of March 31, 2021 and December 31, 2020 were as follows (dollars in thousands):

	As of
	March 31, 2021			December 31, 2020
Gross deferred revenue	$	58,022		$	85,402
Gross contract assets		(21,018	)		(50,868	)
Deferred revenue, net	$	37,004		$	34,534

Changes in Deferred Revenue Balances

Changes in our deferred revenue balances for the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	For the Quarter Ended									For the Quarter Ended
	March 31, 2021									March 31, 2020
	CTU			AIU			Total			CTU			AIU			Total
Gross deferred revenue, January 1	$	28,522		$	56,880		$	85,402		$	27,845		$	35,359		$	63,204
Business acquisition, beginning balance		-			-			-			-			13,395			13,395
Revenue earned from prior balances		(25,689	)		(42,403	)		(68,092	)		(25,149	)		(31,518	)		(56,667	)
Billings during period(1)		101,784			52,561			154,345			103,044			46,648			149,692
Revenue earned for new billings during the period		(79,691	)		(35,048	)		(114,739	)		(77,894	)		(35,833	)		(113,727	)
Other adjustments		210			896			1,106			140			883			1,023
Gross deferred revenue, March 31	$	25,136		$	32,886		$	58,022		$	27,986		$	28,934		$	56,920

______________

1) Billings during period includes adjustments for prior billings.

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Student Receivables (Tables)

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Changes in Current and Non-Current Receivables Allowance

We define student receivables as a portfolio segment under ASC Topic 326 – Financial Instruments – Credit Losses. Changes in our current and non-current allowance for credit losses related to our student receivable portfolio in accordance with the guidance under ASU 2016-13 for the quarters ended March 31, 2021 and 2020 were as follows (dollars in thousands):

	For the Quarter Ended March 31,
	2021			2020
Balance, beginning of period	$	42,147		$	31,964
Beginning balance related to business acquisition		-			2,174
Provision for credit losses		13,724			12,862
Amounts written-off		(13,067	)		(11,601	)
Recoveries		981			696
Balance, end of period	$	43,785		$	36,095

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Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Schedule of Quantitative Information and Other Information Related to Leases

Quantitative information related to leases is presented in the following table (dollars in thousands):

	For the Quarter Ended March 31, 2021			For the Quarter Ended March 31, 2020
Lease expenses (1)
Fixed lease expenses - operating	$	3,015		$	3,148
Variable lease expenses - operating		1,513			1,915
Sublease income		(499	)		(788	)
Total lease expenses	$	4,029		$	4,275
Other information
Gross operating cash flows for operating leases (2)	$	(5,221	)	$	(6,190	)
Operating cash flows from subleases (2)	$	530		$	676
	As of March 31, 2021			As of March 31, 2020
Weighted average remaining lease term (in months) – operating leases		73			74
Weighted average discount rate – operating leases		5.0	%		5.0	%

__________________

(1) Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period.

(2) Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs.

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Summary of Provision for Income Taxes and Effective Tax Rate from Continuing Operations

The following is a summary of our provision for income taxes and effective tax rate from continuing operations:

	For the Quarter Ended March 31,
(Dollars in Thousands)	2021			2020
Pretax income	$	41,009		$	38,736
Provision for income taxes	$	10,245		$	9,604
Effective rate		25.0	%		24.8	%

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Summary of Total Stock Based Compensation Expense

Total share-based compensation expense for the quarters ended March 31, 2021 and 2020 for all types of awards was as follows (dollars in thousands):

	For the Quarter Ended March 31,
Award Type	2021		2020
Stock options	$	160	$	405
Restricted stock units settled in stock		3,588		2,803
Restricted stock units settled in cash		-		(240	)
Total share-based compensation expense	$	3,748	$	2,968

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Weighted Average Common Shares (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Summary of Weighted Average Numbers of Common Shares Used to Compute Basic and Diluted Net Income Per Share

The weighted average number of common shares used to compute basic and diluted net income per share for the quarters ended March 31, 2021 and 2020 were as follows (shares in thousands):

	For the Quarter Ended March 31,
	2021		2020
Basic common shares outstanding		70,149		69,839
Common stock equivalents		1,333		1,875
Diluted common shares outstanding		71,482		71,714

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Summary Financial Information by Reporting Segment

Summary financial information by reporting segment is as follows (dollars in thousands):

	For the Quarter Ended March 31,
	Revenue										Operating Income (Loss)
	2021		% of Total			2020		% of Total			2021			2020
CTU	$	105,822		57.6	%	$	103,588		60.6	%	$	36,143		$	34,619
AIU (1)		77,477		42.2	%		67,396		39.4	%		11,323			9,376
Corporate and Other (2)		339	NM				10	NM				(6,849	)		(6,692	)
Total	$	183,638		100.0	%	$	170,994		100.0	%	$	40,617		$	37,303

	Total Assets as of  (3)
	March 31, 2021		December 31, 2020
CTU	$	102,237	$	96,922
AIU		129,961		141,602
Corporate and Other (2)		518,167		482,993
Total	$	750,365	$	721,517

(1) AIU’s revenue and operating income for the quarter ended March 31, 2020, include results of operations related to Trident from the March 2, 2020 date of acquisition and therefore do not reflect a full quarter of activity for Trident.

(2) Corporate and Other includes results of operations and total assets for closed campuses.

(3) Total assets do not include intercompany receivable or payable activity between institutions and corporate and investments in subsidiaries.

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Basis of Presentation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2021 Segment
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of reporting segments	2

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Financial Instruments - Summary of Investments (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Short-term, Municipal Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Total short-term investments (available for sale), Cost	$ 139	$ 139
Total short-term investments (available for sale), Gross Unrealized Gain	1	1
Total short-term investments (available for sale), Fair value	140	140
Short-term, Non-governmental Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Total short-term investments (available for sale), Cost	354,136	288,578
Total short-term investments (available for sale), Gross Unrealized Gain	145	331
Total short-term investments (available for sale), Gross Unrealized (Loss)	(208)	(176)
Total short-term investments (available for sale), Fair value	354,073	288,733
Short-term, Treasury and Federal Agencies [Member]
Schedule of Available-for-sale Securities [Line Items]
Total short-term investments (available for sale), Cost	6,770	11,799
Total short-term investments (available for sale), Gross Unrealized Gain	5	6
Total short-term investments (available for sale), Gross Unrealized (Loss)	(2)	(2)
Total short-term investments (available for sale), Fair value	6,773	11,803
Short-term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Total short-term investments (available for sale), Cost	361,045	300,516
Total short-term investments (available for sale), Gross Unrealized Gain	151	338
Total short-term investments (available for sale), Gross Unrealized (Loss)	(210)	(178)
Total short-term investments (available for sale), Fair value	$ 360,986	$ 300,676

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Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Financial Instruments [Line Items]
Period cash equivalents and short-term investments have been in continuous unrealized gain (loss) position, years, maximum	1 year
Credit Agreement [Member] | Revolving Credit Facility [Member] | BMO Harris Bank N.A. ("BMO Harris") [Member]
Financial Instruments [Line Items]
Revolving credit facility	$ 50,000,000.0
Percentage of cash and marketable securities deposited with bank collateral for securitization	100.00%
Credit facility borrowings	$ 0		$ 0
Revolving credit facility maturity date	Jan. 20, 2022
CCKF [Member]
Financial Instruments [Line Items]
Percentage of investment in equity affiliate	30.70%
Non controlling interest	$ 3,200,000
CCKF [Member] | Maximum [Member]
Financial Instruments [Line Items]
Gain from investment in affiliate	200,000	$ 100,000
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Financial Instruments [Line Items]
Total short-term investments (available for sale), Fair value	20,900,000		1,700,000
Certificate Of Deposit Commercial Paper And Treasury Bills [Member] | Level 2 [Member]
Financial Instruments [Line Items]
Total short-term investments (available for sale), Fair value	$ 5,500,000		$ 5,100,000

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Financial Instruments - Schedule of Maintenance Fee Payment to CCKF (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Related Party Transactions [Abstract]
Maintenance Fee Payments	$ 423	$ 1,443	[1]

[1] During the first quarter of 2020, the Company prepaid maintenance payments for the full year 2020, of which approximately $0.4 million was recognized as expense for the quarter ended March 31, 2020

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Financial Instruments - Schedule of Maintenance Fee Payment to CCKF (Parenthetical) (Detail) $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Related Party Transactions [Abstract]
Maintenance expense recognized	$ 0.4

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Revenue Recognition - Summary of Disaggregation of Revenue by Major Source (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Disaggregation Of Revenue [Line Items]
Total revenue		$ 183,638	$ 170,994
University Group [Member] | CTU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		105,822	103,588
University Group [Member] | AIU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[1]	77,477	67,396
Corporate and Other [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[2],[3]	339	10
Tuition [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		174,103	162,096
Tuition [Member] | University Group [Member] | CTU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		99,605	97,551
Tuition [Member] | University Group [Member] | AIU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		74,498	64,545
Technology Fees [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		8,278	7,777
Technology Fees [Member] | University Group [Member] | CTU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		5,483	5,120
Technology Fees [Member] | University Group [Member] | AIU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		2,795	2,657
Other Miscellaneous Fees [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[4]	450	521
Other Miscellaneous Fees [Member] | University Group [Member] | CTU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[4]	292	372
Other Miscellaneous Fees [Member] | University Group [Member] | AIU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[4]	158	149
Tuition and Fees [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		182,831	170,394
Tuition and Fees [Member] | University Group [Member] | CTU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		105,380	103,043
Tuition and Fees [Member] | University Group [Member] | AIU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue		77,451	67,351
Other [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[5]	807	600
Other [Member] | University Group [Member] | CTU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[5]	442	545
Other [Member] | University Group [Member] | AIU [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[5]	26	45
Other [Member] | Corporate and Other [Member]
Disaggregation Of Revenue [Line Items]
Total revenue	[3],[5]	$ 339	$ 10

[1] AIU’s revenue and operating income for the quarter ended March 31, 2020, include results of operations related to Trident from the March 2, 2020 date of acquisition and therefore do not reflect a full quarter of activity for Trident.

[2] Corporate and Other includes results of operations and total assets for closed campuses.

[3] Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue.

[4] Other miscellaneous fees include student activity fees and graduation fees.

[5] Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Revenue Recognition [Line Items]
Length of academic year	210 days
Revenue recognized estimated reserve based on historical evidence	$ 2.3		$ 2.3
ASC Topic 606 [Member]
Revenue Recognition [Line Items]
Revenue recognized for payments received from withdrawn students	$ 0.4	$ 0.3
Minimum [Member]
Revenue Recognition [Line Items]
Length of academic terms	56 days
Maximum [Member]
Revenue Recognition [Line Items]
Length of academic terms	84 days

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Revenue Recognition - Summary of Deferred Revenue Balances Offset with Contract Assets (Detail) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Revenue Recognition [Abstract]
Gross deferred revenue	$ 58,022	$ 85,402	$ 56,920	$ 63,204
Gross contract assets	(21,018)	(50,868)
Deferred revenue, net	$ 37,004	$ 34,534

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Revenue Recognition - Changes in Deferred Revenue Balances (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Deferred Revenue Arrangement [Line Items]
Business acquisition, beginning balance			$ 13,395
Gross deferred revenue, beginning balance		$ 85,402	63,204
Revenue earned from prior balances		(68,092)	(56,667)
Billings during period	[1]	154,345	149,692
Revenue earned for new billings during the period		(114,739)	(113,727)
Other adjustments		1,106	1,023
Gross deferred revenue, ending balance		58,022	56,920
University Group [Member] | CTU [Member]
Deferred Revenue Arrangement [Line Items]
Gross deferred revenue, beginning balance		28,522	27,845
Revenue earned from prior balances		(25,689)	(25,149)
Billings during period	[1]	101,784	103,044
Revenue earned for new billings during the period		(79,691)	(77,894)
Other adjustments		210	140
Gross deferred revenue, ending balance		25,136	27,986
University Group [Member] | AIU [Member]
Deferred Revenue Arrangement [Line Items]
Business acquisition, beginning balance			13,395
Gross deferred revenue, beginning balance		56,880	35,359
Revenue earned from prior balances		(42,403)	(31,518)
Billings during period	[1]	52,561	46,648
Revenue earned for new billings during the period		(35,048)	(35,833)
Other adjustments		896	883
Gross deferred revenue, ending balance		$ 32,886	$ 28,934

[1] Billings during period includes adjustments for prior billings.

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Student Receivables - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Financing Receivable, Recorded Investment, Past Due [Line Items]
Approximate length of current academic year	30 weeks
Student receivables, net of allowance for doubtful accounts	$ 1.3	$ 1.3
Minimum [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Student receivables write-off period, days past due	90 days

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Student Receivables - Changes in Current and Non-Current Receivables Allowance (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Receivables [Abstract]
Balance, Beginning of Period	$ 42,147	$ 31,964
Beginning balance related to business acquisition		2,174
Provision for credit losses	13,724	12,862
Amounts Written-off	(13,067)	(11,601)
Recoveries	981	696
Balance, End of Period	$ 43,785	$ 36,095

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Leases - Additional Information (Detail) $ in Thousands		3 Months Ended
		Mar. 31, 2021 USD ($) Lease Facility	Mar. 31, 2020 USD ($)
Lessee Lease Description [Line Items]
Operating leases expiration date		2032
Number of subleases | Lease		3
Number of facilities leased | Facility		3
Sublease income | $	[1]	$ 499	$ 788
Minimum [Member]
Lessee Lease Description [Line Items]
Lease term range, years		5 years
Number of renewal options for extended terms		1 year
Operating sublease term		1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Lease term range, years		10 years
Number of renewal options for extended terms		4 years
Operating sublease term		2 years

[1] Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period.

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Leases - Schedule of Quantitative Information Related to Leases (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020
Lease expenses
Fixed lease expenses - operating	[1]	$ 3,015	$ 3,148
Variable lease expenses - operating	[1]	1,513	1,915
Sublease income	[1]	(499)	(788)
Total lease expenses	[1]	4,029	4,275
Other information
Gross operating cash flows for operating leases	[2]	(5,221)	(6,190)
Operating cash flows from subleases	[2]	$ 530	$ 676
Weighted average remaining lease term (in months) - operating leases		73 months	74 months
Weighted average discount rate - operating leases		5.00%	5.00%

[1] Lease expense and sublease income represent the amount recorded within our unaudited condensed consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period.

[2] Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs.

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Contingencies - Additional Information (Detail) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Other Accrued Expenses [Member]
Loss Contingencies [Line Items]
Accrual for legal fees and settlements	$ 0.5	$ 1.0

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Income Taxes - Summary of Provision for Income Taxes and Effective Tax Rate from Continuing Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Tax Disclosure [Abstract]
Pretax income	$ 41,009	$ 38,736
Provision for income taxes	$ 10,245	$ 9,604
Effective rate	25.00%	24.80%

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Income Tax Disclosure [Abstract]
Deferred tax assets valuation allowance	$ 29.0		$ 29.0
Decrease in effective tax rate	1.30%	1.90%
Decrease in unrecognized tax positions	$ 1.5
Interest and penalties	$ 1.8

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Share-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted ( in shares)	0	0
Estimated pretax compensation expense	$ 23.0
Expiration period in years	4 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted ( in shares)	300,000	200,000
Granted, Units fair value	$ 3.6	$ 3.5
Performance-based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted, Units fair value	$ 4.2	$ 3.9
Granted ( in shares)	400,000	300,000
Service period in years	3 years

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Share-Based Compensation - Summary of Total Stock Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 3,748	$ 2,968
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	160	405
Restricted Stock Units Settled in Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 3,588	2,803
Restricted Stock Units Settled in Cash [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense		$ (240)

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Weighted Average Common Shares - Summary of Weighted Average Numbers of Common Shares Used to Compute Basic and Diluted Net Income Per Share (Detail) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share [Abstract]
Basic common shares outstanding	70,149	69,839
Common stock equivalents	1,333	1,875
Diluted common shares outstanding	71,482	71,714

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Weighted Average Common Shares - Additional Information (Detail) - shares shares in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Employee Stock Option [Member]
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive awards excluded from computations of diluted earnings per share	0.5	0.6

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Segment Reporting - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2021 Segment
Segment Reporting Information [Line Items]
Number of reporting segments	2
CTU [Member]
Segment Reporting Information [Line Items]
Students enrolled expressed as percentage of enrollment	62.00%
CTU [Member] | Fully Online [Member]
Segment Reporting Information [Line Items]
Percentage of enrollment	95.00%
AIU [Member]
Segment Reporting Information [Line Items]
Students enrolled expressed as percentage of enrollment	38.00%
Acquisition date	Mar. 02, 2020
AIU [Member] | Fully Online [Member]
Segment Reporting Information [Line Items]
Percentage of enrollment	97.00%

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Segment Reporting - Summary Financial Information by Reporting Segment (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Segment Reporting Information [Line Items]
Revenue		$ 183,638	$ 170,994
Percentage of total revenue		100.00%	100.00%
Operating Income (Loss)		$ 40,617	$ 37,303
Total Assets	[1]	750,365		$ 721,517
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Revenue	[2],[3]	339	10
Operating Income (Loss)	[2]	(6,849)	(6,692)
Total Assets	[1],[2]	518,167		482,993
CTU [Member] | University Group [Member]
Segment Reporting Information [Line Items]
Revenue		$ 105,822	$ 103,588
Percentage of total revenue		57.60%	60.60%
Operating Income (Loss)		$ 36,143	$ 34,619
Total Assets	[1]	102,237		96,922
AIU [Member] | University Group [Member]
Segment Reporting Information [Line Items]
Revenue	[4]	$ 77,477	$ 67,396
Percentage of total revenue	[4]	42.20%	39.40%
Operating Income (Loss)	[4]	$ 11,323	$ 9,376
Total Assets	[1]	$ 129,961		$ 141,602

[1] Total assets do not include intercompany receivable or payable activity between institutions and corporate and investments in subsidiaries.

[2] Corporate and Other includes results of operations and total assets for closed campuses.

[3] Revenue recorded within Corporate and Other relates to miscellaneous non-student related revenue.

[4] AIU’s revenue and operating income for the quarter ended March 31, 2020, include results of operations related to Trident from the March 2, 2020 date of acquisition and therefore do not reflect a full quarter of activity for Trident.