스트래티직 에듀케이션은 3분기 매출 3억 2,000만 달러로 전년 동기 대비 보합세를 기록했다. 영업이익은 2% 감소한 5,000만 달러, 주당순이익(EPS)은 자사주 매입에 힘입어 4% 증가한 1.69달러였다. 교육기술 서비스(ETS)와 미국 헬스케어 부문은 견조한 성장을 보였으나, 호주 부문은 유학생 비자 규제 강화 여파로 등록생이 9% 감소해 1억 3,400만 달러의 비현금성 손상차손을 인식했다. 경영진은 2027년 연결 매출이 2026년과 유사한 수준을 보일 것으로 예상하며, 약 5,000만 달러 규모의 성장 투자를 계획하고 있다. 호주의 유학생 규제 완화 시기는 여전히 불확실한 상황이다.
핵심 요약
- 3분기 매출은 3억 2,000만 달러로 전년 동기 대비 보합세를 기록했다. 영업이익은 2% 감소한 5,000만 달러, 영업이익률은 30bp 하락한 15.7%를 기록했다.
- 주당순이익(EPS)은 자사주 매입에 따른 유통 주식 수 감소에 힘입어 4% 증가한 1.69달러를 기록했다. 첫 9개월간 잉여현금흐름은 8% 증가한 1억 3,700만 달러였다.
- 교육기술 서비스(ETS) 부문은 매출이 12% 증가한 4,300만 달러, 영업이익이 14% 증가한 1,800만 달러를 기록하며 가장 견조한 실적을 유지했다. 소피아 러닝(Sophia Learning) 매출은 20% 증가했다.
- 미국 고등교육 부문 등록생 수는 1% 감소했으나, 헬스케어 부문 등록생 수는 9% 증가해 해당 부문 등록생의 54%를 차지했다. 학생 유지율은 사상 최고치인 89.2%를 기록했다.
- 호주 부문 등록생 수는 9% 감소하고 매출은 7% 줄었다. 유학생 비자 규제 강화가 수요에 부담으로 작용한 영향이다. 회사는 호주 영업권 및 무형자산에 대해 1억 3,400만 달러의 비현금성 손상차손을 인식했다.
- 경영진은 2027년 연결 매출이 2026년과 유사한 수준에 머물 것으로 예상하고 있으며, 주로 ETS, 미국 헬스케어, 호주 내수 시장을 중심으로 약 5,000만 달러 규모의 성장 투자를 계획하고 있다.
주요 재무 데이터
별도로 명시하지 않는 한, 경영진이 설명한 조정 실적은 호주 부문 손상차손 1억 3,400만 달러를 제외한 불변통화 기준이다.
사업 및 영업 실적
교육기술 서비스(ETS)
소피아 러닝의 매출은 20% 증가한 2,100만 달러를 기록했고, 평균 총 구독자 수는 22% 증가했다. 경영진은 대형 기업 고객 유치에 따른 기저효과를 제외하면 소비자 직접 판매(D2C) 구독 증가율이 20%에 근접한 수준을 유지했다고 밝혔다.
워크포스 에지(Workforce Edge)는 약 400만 명의 직원을 아우르는 83건의 기업 계약으로 분기를 마감했다. 워크포스 에지를 통해 스트레이어 또는 카펠라 대학으로 등록한 학생 수는 4% 증가한 약 4,000명을 기록했다.
회사는 2027년에 ETS 제품 로드맵을 가속화할 계획이다. 경영진은 이러한 투자가 5개년 계획에 따른 높은 매출 성장을 뒷받침하고 소피아의 시장 지위를 방어하며 워크포스 에지의 기업 고객 유치를 강화할 것으로 기대하고 있다.
미국 고등교육
학생당 매출 증가가 등록생 수 1% 감소를 상쇄하면서 부문 매출은 사실상 보합세를 기록했다. 지속적인 성장 투자를 포함한 영업비용은 1% 미만으로 증가했다.
헬스케어는 여전히 주요 성장 동력으로 작용했다. 등록생 수는 9% 증가해 미국 고등교육 전체 등록생의 54%를 차지했으며, 이는 전년 동기의 49%에서 상승한 수치다. 헬스케어 등록생의 약 38%는 고용주 파트너십을 통해 유입됐다.
고용주 연계 학생의 비중은 200bp 상승하며 미국 고등교육 전체 등록생의 35%에 달했다. 한편 학생 유지율은 사상 최고치인 89.2%로 상승했다.
카펠라의 면허 취득 전 간호학 학사(BSN) 과정과 스트레이어의 방사선 기술 응용과학 준학사 과정에 대한 초기 수요는 경영진의 당초 예상을 웃돌았다. 회사는 또한 스트레이어의 실무간호사(LPN) 디플로마 과정과 카펠라의 확장된 전문간호사(Nurse Practitioner) 포트폴리오를 강조했다.
호주
경영진은 등록생 수 감소의 원인이 전적으로 유학생에 있다고 설명했다. 신규 비자 승인이 급격히 둔화되어 일부 달에는 전년 동기 대비 최대 80% 감소하기도 했다. 또한 교육기관을 변경하는 유학생에 대한 신규 비자 요건으로 인해 호주 국내 전학 시장도 사실상 차단됐다.
호주 국내 수요는 상대적으로 견조했다. 호주 국내 신규 등록생은 2분기와 3분기 모두 9% 증가해 호주 전체 신규 등록생의 70% 가까이를 차지했다.
스트래티직 에듀케이션(Strategic Education)은 애들레이드 캠퍼스를 확장하고 추가 보건과학 프로그램을 도입하며 2027년 말에 퍼스 캠퍼스를 개교할 계획이다. 경영진은 호주 부문의 성장 자본이 유학생 규제 완화에 의존하기보다 국내 시장에 집중되고 있다고 밝혔다.
경영진 가이던스
경영진은 상반기 이후 호주의 유학생 등록 환경이 악화됨에 따라 2026년 연간 실적이 당초 회사의 잠정 전망치에 미치지 못할 가능성이 높다고 밝혔다.
- 연결 매출은 2026년과 유사한 보합세를 유지할 가능성이 가장 높다.
- ETS는 성장이 예상되는 반면, 미국 고등교육은 헬스케어 부문의 강세에 힘입어 완만한 성장을 기록할 수 있다.
- 호주의 지속적인 규제가 다른 부문의 성장을 상쇄할 것으로 예상된다.
- 성장 투자는 총 약 5,000만 달러에 달할 것으로 예상된다.
- 2026년에 달성한 생산성 절감 효과가 해당 지출의 절반 가까이를 상쇄해 영업비용 증가율을 2%로 제한할 것으로 예상된다.
- ETS 부문 마진은 약 300~400bp 하락할 수 있으며, 미국 고등교육과 호주 부문의 마진 영향은 더 작을 것으로 예상된다.
- 호주의 신규 학생 증가율은 2027년 하반기에 플러스로 돌아설 수 있으며, 2028년 초에는 전체 등록생 증가로 이어질 가능성이 있다.
경영진은 이러한 투자를 통해 2028년 이후 회사가 기존 목표 성장률로 복귀할 수 있을 것이라는 자신감을 표명했다. 이러한 전망은 ETS, 미국 헬스케어, 호주 국내 등록생 수의 지속적인 견조세에 달려 있다.
위험 요인 및 주시 사항
- 호주의 유학생 등록은 비자 승인 지연과 전학 요건 강화로 인해 여전히 제약을 받고 있다.
- 호주 규제 완화의 시기와 범위는 여전히 불확실하며, 경영진은 이러한 가능성을 전제로 국내 성장 전략을 수립하지 않고 있다.
- 2027년 계획된 투자는 예상되는 성장 효과가 나타나기 전까지 부문별 마진을 축소시킬 것으로 예상된다.
- 기업 연계가 없는 미국 학부 등록생 수는 여전히 압박을 받고 있으나, 경영진은 2027년 동안 감소세가 둔화되어 연말에는 보합 수준에 도달하거나 성장세로 돌아설 수 있을 것으로 기대하고 있다.
- 경영진은 거대언어모델(LLM) 및 검색 답변 엔진 최적화(AEO)와 관련된 학생들의 검색 행태 변화를 모니터링하고 있으나, 현재까지 중대한 부정적 영향은 발견되지 않았다고 밝혔다.
애널리스트 Q&A 주요 내용
경영진은 2027년 미국 고등교육 부문에서 신규 학생 등록 수가 순증할 것으로 예상하고 있다. 또한 헬스케어 및 면허 취득 전 프로그램의 지원에 힘입어 연간 진행에 따라 해당 부문이 한 자릿수 중반대 성장을 향해 나아갈 것으로 내다봤다.
호주 부문에 대해 경영진은 유학생 등록 환경이 정상화에 가까워졌을 수 있으나, 현재 투자 전략은 규제 완화보다는 국내 성장을 전제로 하고 있다고 설명했다.
소피아 러닝의 구독자 증가세 둔화와 관련해 경영진은 이러한 변화가 거의 전적으로 직전 기간에 추가된 대형 기업 고객과의 비교에 기인한다고 설명했다. 해당 고객을 제외하면 소비자 직접 판매(D2C) 구독자 증가율은 20%에 근접한 수준을 유지했다.
경영진은 또한 예비 학생들이 대학을 검색하는 방식이 지속적으로 변화하고 있음에도 불구하고, 입학 등록률과 고객생애가치(LTV) 대비 고객획득비용 지표가 사상 최고치에 근접한 수준이라고 덧붙였다.
실적 발표 콘퍼런스콜 전문
전체 실적 발표 컨퍼런스 콜 녹취록
경영진 발표
Operator
Welcome to Strategic Education's Third Quarter 2026 Results Conference Call. I will now turn the call over to Terese Wilke, Senior Director of Investor Relations for Strategic Education. Mrs. Wilke, please go ahead.
Terese Wilke
Thank you. Hello, everyone, and welcome to Strategic Education's conference call in which we will discuss third quarter 2026 results. With us today are Karl McDonnell, President and Chief Executive Officer; and Daniel Jackson, Executive Vice President and Chief Financial Officer. Following today's remarks, we will open the call for questions.
Please note that this call may include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The statements are based on current expectations and are subject to a number of assumptions, uncertainties and risks that Strategic Education has identified in today's press release that could cause actual results to differ materially.
Further information about these and other relevant uncertainties may be found in Strategic Education's most recent annual report on Form 10-K, the 10-Q to be filed and other filings with the Securities and Exchange Commission as well as Strategic Education's future 8-Ks, 10-Qs and 10-Ks. Copies of these filings and the full press release are available for viewing on our website at strategiceducation.com.
And now I'd like to turn the call over to Karl. Karl, please go ahead.
Karl McDonnell
Thank you, Terese, and good morning, everyone. Our third quarter results reflect continued strength in the parts of SEI where we have been investing for growth, Education Technology Service, our broad employer strategy and our U.S. health care portfolio. The strength in these areas, however, was mostly offset in the third quarter by our Australia segment, where the environment has proved more challenging than we expected.
This morning, I'll briefly review the quarter, and then I'll walk through each of our segments. As I do, I'll discuss the opportunities behind our intent to make 2027 a year of increased growth investments. As always, unless I note otherwise, my comments refer to adjusted results on a constant currency basis, and those results exclude the $134 million noncash impairment of goodwill and intangible assets in Australia that we recorded this quarter and which I will discuss with that segment.
Third quarter revenue was $320 million, essentially flat with the prior year. We did hold operating expense growth to less than 1%, resulting in operating income of $50 million, a 2% decrease, and an operating margin of 15.7%, 30 basis points below the prior year. Earnings per share increased 4% to $1.69, reflecting a lower share count from share repurchases. Through the first 9 months of this year, free cash flow increased 8% to $137 million.
Turning now to our segments. Education Technology Services continued its strong performance. Revenue grew 12% to $43 million. Operating income grew 14% to $18 million and operating margin expanded 80 basis points to 42.5%. Sophia Learning average total subscribers grew 22% and revenue grew 20% to $21 million. Workforce Edge ended the quarter with 83 corporate agreements covering approximately 4 million employees, and enrollments from Workforce Edge into Strayer or Capella grew 4% to roughly 4,000 students.
SEI was recently named to Business Insider's 2027 list of Most Innovative Companies, a recognition that reflects much of the work that is being done within ETS. Given the strong demand across ETS and given our desire to accelerate our product road map to serve that demand, our intent is to increase our growth investments in ETS in 2027. These investments will slightly reduce the ETS segment-level operating margin next year, but will also result in higher revenue growth in our current 5-year plan, defend Sophia's market leadership position and strengthen Workforce Edge's ability to sign new corporate clients.
Turning now to U.S. Higher Education. Total U.S. Higher Education enrollment declined 1% to approximately 84,700 students as growth in employer-affiliated enrollment was offset by lower unaffiliated enrollment. Revenue was essentially flat at $214 million as higher revenue per student offset the enrollment decline. Our productivity initiatives continue to hold operating expense growth to less than 1%, including continued investments in growth. Operating income was $22 million, a 4% decline, and an operating margin of approximately 10%. Student retention reached 89.2%, a new all-time high for U.S. Higher Education.
Our health care portfolio continues to be the strongest source of growth in U.S. Higher Education. Health care enrollment grew 9% in the quarter and now represents 54% of total U.S. Higher Education enrollment, up from 49% a year ago, an increase of 500 basis points over the last year. Health care is also central to our broad employer strategy. Roughly 38% of our health care enrollment comes from employer partners, and employer-affiliated enrollment overall reached 35% of U.S. Higher Education total enrollment, up 200 basis points from the prior year.
We are now extending that portfolio into licensure-track programs. Earlier this year, Capella enrolled the first cohort in its pre-licensure Bachelor of Science in Nursing program and Strayer enrolled its first students in the new Associate of Applied Science in Radiologic Technology. Early demand for both programs has exceeded our initial assumptions. These 2 programs join Strayer's Licensed Practical Nurse Diploma and Capella's expanded Nurse Practitioner portfolio, all aimed at the health care talent our employer partners increasingly need.
To support that demand, we intend to also increase our growth investments in U.S. health care in 2027 with funding for new programs, clinical faculty, expanded clinical and instructional capacity. This will allow programs like pre-licensure nursing and radiologic technology to grow at the pace their demand supports.
Turning to Australia. Total enrollment declined 9% to approximately 17,100 students and revenue declined 7% to $64 million. The Australian team continued to manage costs well with operating expenses down 4%, and operating income was $10 million compared with $12.5 million in the prior year and an operating margin of approximately 16%.
The decline is entirely a function of international enrollment. Over the course of this year, the Australian government restrictions on international students have become materially more severe than we anticipated. New visa approvals for prospective students have slowed sharply, and in some months, declining as much as 80% versus the prior year. And in addition, the government has effectively closed the onshore transfer market by requiring international students already in Australia to obtain a new visa in order to change institutions. Given this environment, we have lowered our near-term growth expectations for the ANZ segment, which resulted in this quarter's $134 million noncash impairment.
Notwithstanding the headwinds on international enrollment, our domestic enrollment continues to fare well. Domestic new enrollment has grown every quarter this year, including 9% in each of the second and third quarters, and domestic students now represent close to 70% of new enrollment in Australia.
The quality of Torrens' academic experience remains strong and has shown significant improvement over the past year. We were pleased to see Torrens University's performance in the 2025 Quality Indicators for Learning and Teaching Student Experience Survey, the most comprehensive national survey of current higher education students in Australia. Torrens achieved widespread momentum across all undergraduate indicators, including a rise to sixth nationally for undergraduate teaching quality, up significantly from 19th the year before. At the post-graduate level, Torrens continues to lead at the top tier of Australian higher education, ranking in the top 4 nationwide for both skills development and peer engagement alongside a seventh place ranking in post-graduate teaching quality.
This performance against national sector benchmarks reinforces Torrens' value proposition and supports student retention and long-term brand equity in industry-aligned education. The quality of Torrens' academic programs, combined with our own success in growing domestic enrollment gives us confidence to increase our growth investments in Australia's domestic market in 2027. We are expanding our existing Adelaide campus and will launch several new health science programs, and we also plan to open a new campus in Perth in late 2027.
Western Australia is the fastest-growing state in the country with population growth 50% higher than the national average. Greater Perth is projected to add more than 0.5 million residents over the next decade, and its economy is concentrated in the sectors where our new programs are focused, namely health care, engineering, construction and defense. Perth will also position Torrens well for international recruitment from Asia when those constraints ease.
Turning now to an update on our outlook versus our notional model. Given our current forecast for the balance of this year and the fact that the international enrollment environment in Australia deteriorated since the first half of the year, it appears unlikely our full year results will fall inside of our notional outlook. In terms of 2027, given that our forward revenue growth is mostly a product of current year enrollment, we think the most likely outcome for consolidated revenue next year is to be flat with this year.
We expect the cost of the growth investments that I have described this morning to be approximately $50 million in 2027. However, the productivity savings achieved this year will offset nearly half of that, such that year-over-year increase in operating expenses will be limited to just 2%. Given that these incremental investments are targeted to support areas of proven strength at SEI, that is our 2 high-growth, high-margin platform businesses, our U.S. health care portfolio and our domestic market growth in Australia, we have a high degree of confidence in their ability to return the company to its notional growth rates in 2028 and beyond.
Regarding capital allocation, in addition to our regular quarterly dividend, we repurchased approximately 347,000 shares during the quarter for a total of $28.5 million. We ended the quarter with $139 million of cash and marketable securities and no debt. And finally, as always, I'd like to take this opportunity to thank all of my colleagues here at SEI for their ongoing commitment and support to our students and our corporate partners.
And with that, Victor, we'd be happy to take questions.
Operator
[Operator Instructions] Our first question will come from the line of Jeff Silber from BMO Capital Markets.
질의응답
Jeffrey Silber
Karl, I really appreciate you giving us some insight into 2027. I was hoping I could just double-click on that a little bit. Is it possible to talk about the different segments? Like, say, overall, you think revenue most likely flat, but could we see growth in ETS offset by declines in the other two? And then from a margin perspective, where do you think you'd have the most impact in terms of declining margins potentially next year?
Karl McDonnell
I think we're going to have -- we're absolutely going to have growth in ETS, Jeff. I suspect we'll have lower growth in U.S. Higher Education, driven by the strength of the health care portfolio that I just described. Overall, that will be offset by the continuation of the restrictions in Australia, although we do expect that with the addition of the Perth campus, the expanded programs in Adelaide, launching several asynchronous online programs throughout Australia, we do expect that new student growth in Australia will be growing year-over-year in the back half of '27.
And just given the headwinds that we've had, it's going to take a few quarters for that to translate into total enrollment growth. So I would expect that probably in the first part of '28. And from a margin standpoint, I would estimate that it could be in the range of 300 to 400 basis points at ETS and a little less than that in U.S. Higher Education and Australia.
Jeffrey Silber
Okay. That's really helpful. I really appreciate that. Moving back to, I guess, the U.S. We had an election earlier this week. I'm not asking you for your crystal ball, but given guys where you're located, you're probably closer to most in terms of what's going on and what potentially could go on. Any changes you're expecting with the changeover in Congress towards Democratic control?
Karl McDonnell
Well, I'd say that in the U.S., we have a high degree of confidence in sort of the regulatory and quality posture of both Strayer and Capella. We try to work constructively with any regulators or members of Congress or the administration regardless of party affiliation, and we look forward to engaging with them once the new Congress is inaugurated in January.
Operator
And our next question will come from the line of Alex Paris from Barrington Research.
Alexander Paris
I too appreciate the granular detail by segment and the look at 2027. I just had a question on unaffiliated enrollment. Obviously, it was down 4%. It's actually an improvement from the second quarter by my math, which -- when it was down 5.5%. But it's been down for 8 consecutive quarters now. And you've consistently said you do anticipate returning to mid-single digits at some point, but it's not an area of focus, I get it. I'm wondering, has there been an impact on the funnel from LLM, AI search and so on? And could that be a contributing factor?
Karl McDonnell
Alex, first of all, on unaffiliated enrollment, that's predominantly undergraduate business. It's an area that's important to us, but it's not one of our main strategic priorities in the way that health care is. You're right that the rate of decline moderated in the third quarter. We expect it to continue to moderate throughout 2027, perhaps even reaching breakeven or growth by the end of 2027.
And then in terms of LLM, it's certainly something that we're watching. But we have -- we've been focused on a quality of demand over quantity of demand for going on 2 years now. So we don't peg rate of increase or decrease in any inquiry volume that we're getting as being most important. We're looking at admission yield and sort of the acquisition cost to lifetime value. And both of those are near all-time highs. Obviously, we want to be relevant and favorably represented in any search medium that people are using, including LLMs. So we have a lot of people that are focused on it. But I can't say that we've really seen any adverse impact from it yet.
Alexander Paris
What are you specifically doing to respond to the changes in the way students look at colleges and universities?
Karl McDonnell
It's a multifunction, multidisciplinary set of initiatives that we have. I don't really want to go into details on this call, but we do have a robust set of things that we're doing that we have a pretty high level of confidence will help position us well, not just in LLMs, but frankly, in any search medium that people may use.
Alexander Paris
Obviously, it's important. But again, just to be clear, you've not really seen any material impact from the AEO as opposed to SEO on unaffiliated enrollment?
Karl McDonnell
Yes. Because -- I mean, put yourself in our position, Alex, it would be next to impossible to ascribe any rate of change to LLM or any other single variable. We're happy with the demand that we're getting. In health care, in particular, it's much stronger than what we expected. The growth of those new programs is far ahead of where we expected them to be by as much as a year perhaps. But we're not ignoring it. We have people that are focused on it. We expect that over time, the evolution will become more apparent. I just would say it's very early, and we haven't been able to ascribe any changes to that specifically.
Alexander Paris
Got you. And then my last question quickly on ANZ. I appreciate you are controlling the controllables, campus expansions, new campuses, a focus on domestic. But is there any light at the end of the tunnel with regulatory? Obviously, this has been going on for a couple of years now. And we thought that there'd be an improvement this year because of the lifting of the caps. But by slow rolling the visas, it's had an even more dramatic effect on international enrollment. Any additional color there would be great.
Karl McDonnell
I was a little surprised, frankly, that the transfer requirement to get a new Visa was implemented. That was not something that we anticipated. It is what it is. Eventually, we're going to get to a new normal, a normalized rate of international enrollment. I think we're much closer to that as opposed to being further away from it. And if we continue to grow domestic growth in the high single digits as we're doing or frankly, even in the low double digits when we add the additional capacity in Adelaide and Perth, eventually, that's going to result in new student growth, which, as I said in my prepared remarks, I think could be in the latter half of next year, leading to total enrollment growth in the first part of '28.
And then if we get an easing of these restrictions, which some people in Australia think will happen over the coming several years, then that will just be added sort of enrollment that we'll get. We're not building a strategy around it. We're accepting it for what it is and building all of our growth capital around the domestic market. And given, as I said, the strong performance of Torrens academically in the federal QILT survey, we think we're well positioned to grow our domestic market share.
Operator
[Operator Instructions] Our next question will come from the line of Jasper Bibb from Truist Securities.
Jasper Bibb
Apologies if I missed it, but I guess I just wanted to understand how you're thinking about EBIT margin expansion in '26 at this point. I guess, for me, it would be helpful if you could kind of frame 4Q expectations so we have the right jumping off point for all the kind of helpful '27 color you gave on the call.
Karl McDonnell
Jasper, yes, it might be a bad connection. I'm not sure I got the full question. I think it was '26 EBIT margin. Was that your question?
Jasper Bibb
Yes, I apologize. I'm switching to speaker phone now. Hopefully, you can hear me better...
Karl McDonnell
Jasper Bibb
I just wanted to understand kind of 4Q expectations so we have the right jumping off point for kind of all the '27 comments you gave earlier on the call.
Daniel Jackson
Jasper, you talking about margin, right?
Jasper Bibb
Yes, margin or, I mean, revenue, if you have it?
Daniel Jackson
Yes. Well, we don't give revenue -- forward-looking revenue, and -- but we have commented on margin, as you know, relative to the notional model of 200 basis points of expansion. Karl just mentioned that we're well off of that at this point. However, as we said last quarter, when you adjust for the FWO reserve we took in the second quarter, we're actually not too far off of the 200 basis points.
Jasper Bibb
Okay. And then I just maybe wanted to -- if we could spend a little bit more time on just kind of what you're seeing in U.S. Higher Ed right now and kind of how that's informing your expectations for '27? Enrollment is down like a little bit, but I think retention is going up. So I would assume new starts in the U.S. might be down more than enrollment right now. I guess, could you just kind of frame what you're seeing in new starts in the U.S. and how that informs your expectations for next year?
Karl McDonnell
Sure. Well, as I said, health care is very strong, growing almost double digits, 9% in the last quarter. It's well over half of our enrollments now. So we're confident that, that's going to continue to grow. And I suspect the growth rate will increase given the strength of the new pre-licensure programs. The undergraduate unaffiliated has been declining. Part of that is just a function that we've been deploying more of our growth capital into health care and not into undergraduate business. As Alex noted, and I confirm that the decline is moderating. We think it will continue to moderate.
So net of everything that we're seeing, I suspect that we're going to have net positive new student enrollment growth in '27. And the division as a whole will sort of mean revert toward mid-single digits as we work our way through the year.
Jasper Bibb
Okay. That makes sense. Maybe last one for me. The subscriptions at Sophia just slowed a little bit from the second quarter. Is that kind of harder comps? Or have you seen any impact on subs growth or retention from kind of the recent changes you made to the platform over the summer?
Karl McDonnell
It's almost entirely a function of anniversarying that large corporate client that we have. If you excluded that corporate client, direct-to-consumer subscription growth is still close to 20% and growing, holding that growth rate. So it's really a function of the anniversarying of that one client that's quite large.
Operator
I'm not showing any further questions at this time. I'd like to turn it back over to Karl McDonnell, CEO, for closing remarks.
Karl McDonnell
Thank you, everybody. We look forward to discussing our fourth quarter results with you in February.
Operator
Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.
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