Finance and Operating Leases

12 Months Ended

Jun. 30, 2026

6. Finance and Operating Leases

Finance Leases

The Company is a lessee under finance leases for computers and peripherals under agreements with Banc of America Leasing & Capital, LLC (“BALC”) and CSI Leasing, Inc. (“CSI Leasing”). As of June 30, 2026 and 2025, the finance lease liability was $116.9 million and $86.9 million, respectively, with lease interest rates ranging from 4.12% to 6.72%. As of June 30, 2026 and 2025, the balance of the associated right-of-use assets was $95.3 million and $69.5 million, respectively. The right-of-use asset is recorded within property and equipment, net on the consolidated balance sheets. Lease amortization expense associated with the Company’s finance leases is recorded within both instructional costs and services and selling, general, and administrative expenses on the consolidated statements of operations.

The Company entered into agreements with BALC and CSI Leasing in April 2020 and August 2022, respectively, to provide financing for its computers and peripherals. Individual leases with BALC include 36-month payment terms, fixed rates ranging from 4.75% to 6.72%, and a $1 purchase option at the end of each lease term. The Company has pledged the assets financed to secure the outstanding leases. Individual leases under the agreement with CSI Leasing include 36-month payment terms, but do not include a stated interest rate. The Company uses its incremental borrowing rate as the implied interest rate and the total lease payments to calculate its lease liability.

The following is a summary, as of June 30, 2026 and 2025, respectively, of the present value of the net minimum lease payments under the Company’s finance leases:


	June 30,
	2026		2025
2026	$	—	$	45,781
2027		64,471		33,864
2028		42,580		12,095
2029		15,356		297
2030		373		—
Total minimum payments		122,780		92,037
Less: imputed interest		(5,848)		(5,154)
Finance lease liability		116,932		86,883
Less: current portion of finance lease liability		(60,477)		(42,316)
Long-term finance lease liability	$	56,455	$	44,567

Operating Leases

The Company is a lessee under operating leases for various facilities to support the Company’s operations. As of June 30, 2026 and 2025, the operating lease liability was $11.1 million and $46.6 million, respectively. As of June 30, 2026 and 2025, the balance of the associated right-of-use assets was $7.3 million and $16.0 million, respectively. The right-of-use asset is recorded within deposits and other assets on the consolidated balance sheets. Lease expense associated with the Company’s operating leases is recorded within both instructional costs and services and selling, general, and administrative expenses on the consolidated statements of operations.

Individual operating leases range in terms of 1 to 7 years and expire on various dates through fiscal year 2034 and the minimum lease payments are discounted using the Company’s incremental borrowing rate.

The following is a summary as of June 30, 2026 and 2025, respectively, of the present value of the minimum lease payments under the Company’s operating leases:


	June 30,
	2026		2025

	(in thousands)
2026	$	—	$	12,957
2027		3,128		8,942
2028		2,066		7,957
2029		1,684		7,776
2030		1,590		7,878
2031		1,406		4,748
Thereafter		2,443		—
Total minimum payments		12,317		50,258
Less: imputed interest		(1,264)		(3,703)
Operating lease liability		11,053		46,555
Less: current portion of operating lease liability		(2,737)		(11,391)
Long-term operating lease liability	$	8,316	$	35,164

The Company was subleasing one of its facilities through December 2025. Sublease income is recorded as an offset to the related lease expense within both instructional costs and services and selling, general, and administrative expenses on the consolidated statements of operations.

In December 2025, the Company signed an agreement with the landlord of its San Francisco lease to terminate the lease prior its expiration date and recorded a lease termination gain of $14.3 million as a result of eliminating its remaining lease liability and right-of-use asset. The lease termination gain is recorded within instructional costs and services within the consolidated statements of operations.

The following is a summary of the Company’s lease cost, weighted-average remaining lease term, weighted-average discount rate and certain other cash flows as it relates to its operating and finance leases for the years ended June 30, 2026, 2025 and 2024:


	Years Ended June 30,
	2026			2025			2024

	(in thousands)
Lease cost

Finance lease cost:
Instructional costs and services:
Amortization of right-of-use assets	$	52,326		$	37,400		$	31,099
Selling, general, and administrative expenses:
Amortization of right-of-use assets	$	918		$	237		$	—
Interest on lease liabilities		5,686			4,280			2,639
Operating lease cost:
Instructional costs and services:
Operating lease cost		3,867			9,154			9,605
Short-term lease cost		82			83			56
Sublease income		(126)			(262)			(328)
Selling, general, and administrative expenses:
Operating lease cost		1,318			4,077			6,019
Short-term lease cost		94			93			150
Sublease income		—			(149)			(491)
Total lease cost	$	64,165		$	54,913		$	48,749

Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	(16,943)		$	(12,396)		$	(14,990)
Financing cash flows from finance leases		(56,856)			(41,469)			(40,919)
Right-of-use assets obtained in exchange for new finance lease liabilities		82,500			68,995			35,652
Right-of-use assets obtained in exchange for new operating lease liabilities		1,325			1,012			864
Weighted-average remaining lease term - finance leases		2.00	yrs.		2.07	yrs.		2.02	yrs.
Weighted-average remaining lease term - operating leases		5.58	yrs.		5.13	yrs.		5.66	yrs.
Weighted-average discount rate - finance leases		4.71	%		5.34	%		5.62	%
Weighted-average discount rate - operating leases		4.05	%		2.95	%		2.92	%