10-K: Covista Inc. Reports Strong Revenue Growth in FY2026

Covista Inc. announced a 9.3% increase in revenue to $1.95 billion for fiscal year 2026, driven by strong enrollment growth across its educational segments.

Summary

• Covista Inc. reported a 9.3% increase in revenue, reaching $1.95 billion for the fiscal year ended June 30, 2026, compared to the previous year.
• Net income rose by 6.1% to $251.6 million, with diluted earnings per share increasing by 13.9% to $7.04.
• Adjusted net income saw a 15.3% increase to $294.7 million, and adjusted diluted earnings per share grew by 23.7% to $8.25.
• Student enrollment increased across all segments: Chamberlain University (1.1%), Walden University (13.2%), and Medical and Veterinary schools (4.5%).
• The company secured an amendment to its credit agreement, increasing its revolving facility by $100 million and extending its maturity date to August 2030.
• Covista repurchased approximately 2.4 million shares of its common stock during fiscal year 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this filing as generally positive, reflecting solid revenue growth and improved profitability, though with some ongoing operational costs and regulatory considerations.

Positives

• Revenue increased by 9.3% to $1.95 billion in fiscal year 2026.
• Net income grew by 6.1% to $251.6 million.
• Diluted earnings per share increased by 13.9% to $7.04.
• Adjusted net income increased by 15.3% to $294.7 million.
• Walden University experienced a significant 13.2% increase in average student enrollment.
• The company successfully amended its credit agreement, increasing its revolving facility and extending its maturity.
• Covista continues to manage its debt effectively, repaying a significant portion of its Term Loan B and Senior Secured Notes.

Negatives

• Chamberlain University saw a decline in enrollment in post-licensure nursing programs.
• Restructuring expenses increased to $6.3 million, primarily due to workforce reductions.
• Strategic advisory costs increased to $18.6 million, impacting operating expenses.
• The company reported a loss from discontinued operations of $15.8 million in fiscal year 2026.

Risks

• The company is subject to extensive federal and state regulations in the postsecondary education industry, with potential for audits, investigations, and penalties.
• A decline in the company's composite financial responsibility score could lead to provisional certification and heightened oversight from the Department of Education.
• Changes in financial aid programs, regulations, or funding levels could materially affect eligibility, participation, and costs.
• Failure to maintain institutional accreditation or state authorizations could result in loss of eligibility for Title IV programs.
• Cybersecurity threats and data breaches pose a risk to sensitive information and operations.
• Increased competition from traditional and online educational institutions could impact enrollment and pricing.
• The company's significant reliance on Title IV federal financial aid programs (78% of revenue) makes it vulnerable to regulatory changes or funding reductions.

Future Outlook

The company expects its cash flows from operations, existing cash balances, and availability under its credit facility to provide sufficient liquidity for the next twelve months and several years. Management is also reviewing strategies to refinance or optimize its capital structure.

Management Comments

• Covista's purpose is to open doors and unlock potential for its students through educational programs across nursing, medicine, veterinary medicine, the social and behavioral sciences, and more.
• The company's strategy, 'Purpose at Scale,' is centered on expanding access to healthcare education and helping address the U.S. healthcare workforce shortage.
• Management is focused on optimizing marketing and enrollment operations to address post-licensure enrollment declines at Chamberlain.
• Covista believes its investments in student experience and brand, along with flexibility for working adults, have accelerated Walden's enrollment growth.
• Management continues to focus on increasing enrollment and driving operational effectiveness in academic support and enrollment experience for the medical and veterinary schools.

Industry Context

StockSavvy.ai notes that Covista operates in the highly regulated postsecondary education sector, particularly in healthcare fields. The company's growth strategy, 'Purpose at Scale,' directly addresses the critical shortage of healthcare professionals in the U.S., aligning with broader industry trends and government initiatives.

Comparison to Industry Standards

• Chamberlain University is noted as having the largest pre-licensure program in the U.S. based on total enrollments in Fall 2025, according to AACN data.
• Chamberlain also had the largest BSN and MSN programs in the U.S. based on total enrollments in Fall 2025, according to AACN data.
• Walden University is identified as a leading conferrer of doctoral degrees in nursing, public health, public policy, business/management, education, and psychology, and masters degrees in nursing, psychology, social work, human services, education, and counseling.
• The company's cohort default rates for all its institutions are 0.0% for the fiscal years 2020, 2021, and 2022, which is significantly lower than the national average for Title IV institutions during those periods.

Management Changes

Legal Proceedings

• Covista is subject to numerous lawsuits, administrative proceedings, regulatory reviews, and investigations related to financial assistance programs and other business conduct.
• The company has received Borrower Defense to Repayment (BDR) applications from students, which it believes do not properly state eligible claims for loan forgiveness.
• Covista is responding to BDR claims and believes none of its institutions have received ED notices of BDR application approvals or recoupment intent.

Stakeholder Impact

• Shareholders may benefit from increased revenue, net income, and EPS, as well as share repurchases.
• Students benefit from increased enrollment capacity and educational programs, though some face higher tuition rates.
• Employees are supported by a comprehensive total rewards program, including retirement savings and benefits.
• Regulators (ED, state agencies) are key stakeholders due to the company's heavy reliance on federal and state financial aid programs.

Next Steps

• Continue to optimize marketing and enrollment operations to address post-licensure enrollment at Chamberlain.
• Further leverage scale through national footprint and hybrid delivery modalities for pre-licensure growth at Chamberlain.
• Continue to drive growth and operational effectiveness in academic support and enrollment experience for medical and veterinary schools.
• Evaluate and potentially pursue strategies to refinance or optimize the company's capital structure.
• Continue to monitor and adapt to evolving regulatory requirements in the postsecondary education sector.

Key Dates

Recommendation

The company demonstrates solid revenue growth and improved profitability, with strong enrollment in key segments like Walden University. However, the increasing strategic advisory costs, restructuring expenses, and the ongoing regulatory scrutiny inherent in the education sector warrant a cautious 'hold' rating. While the company is managing its debt well and has strong liquidity, the potential impact of regulatory changes and competition requires monitoring.

Keywords

Covista Inc., Chamberlain University, Walden University, Medical Education, Veterinary Education, Healthcare Education, Student Enrollment, Financial Aid