Language Schools (United States) — NAICS 61163

A Histometrics industry primer for public-market and private investors

Read this as a signpost, not a full primer. NAICS (North American Industry Classification System) code 61163 is an "industry" level that contains exactly one detailed industry beneath it — 611630, also called Language Schools. Because the parent and its single child cover the identical set of businesses, this page is deliberately short: it gives you this level's own federal statistics and then points you to the full 611630 primer for the deep detail. For the complete treatment — how the money works, demand drivers, regulation, the investable universe, and the outlook — see the 611630 primer.

1. Overview

Language schools teach people to speak, read, and write a language other than the one they grew up with — foreign languages such as Spanish or Mandarin, English as a Second Language (ESL) for non-native speakers, and sign languages such as American Sign Language (ASL). NAICS 61163 is the five-digit "industry" bucket the federal government uses to group these establishments, and it flows straight down into the single six-digit industry 611630.[1]

This is a small, fragmented, labor-intensive service business with unusually swingy demand. A large share of the money comes from foreign students who travel to the United States on visas to learn English — a revenue stream that rides on immigration policy, currency rates, and geopolitics. The rest comes from local adult learners, immigrant ESL, corporate training contracts, and test preparation, all while free and cheap language apps compete for the same learners. The right lens is student acquisition, teaching capacity, instructor productivity, class utilization, and regulatory compliance — not manufacturing throughput or retail same-store sales.[1]

2. What's inside — and why this level equals its one child

NAICS is a nested hierarchy: each five-digit "industry" splits into one or more six-digit "national industries." NAICS 61163 is one of the cases where that split does not actually happen — the five-digit code has a single child:

Because there is only one child, 61163 and 611630 are one and the same industry — the same establishments, the same revenue, the same firms. The five-digit level exists only to keep the numbering system consistent; it adds no businesses that 611630 does not already contain. Everything the child primer says about what is excluded — translation and interpreting (NAICS 541930), degree-granting colleges (611310), K–12 world-language teaching (611110), test-prep and tutoring (611691), and the app economy (Duolingo, Babbel, Rosetta Stone software, coded as software publishing, not schools) — applies unchanged at this level.[1]

For all detail beyond the summary below, use the 611630 primer; this page does not repeat it.

3. How big it is (this level's figures)

Our ground-truth federal statistics for NAICS 61163 are identical to the 611630 figures, as they must be for a single-child level. Note the mixed reference years — receipts and concentration come from the 2022 Economic Census, headcount and payroll from 2023 County Business Patterns — so this is not a single-year income statement.

A few things fall out of these numbers. The average establishment employs about 12 people and books on the order of \$0.8–1.0 million in annual receipts[2][3] — these are small businesses. Payroll (\$610 million) runs close to half of receipts (\$1.29 billion),[2][3] which tells you upfront that this is a labor business: you are paying teachers.

The undercount caveat is large here. The \$1.29 billion receipts figure captures only establishments primarily engaged in classroom-style language instruction. It deliberately leaves out the app economy — Duolingo alone reported roughly \$1.04 billion of revenue in FY2025, about the size of the entire NAICS 61163 industry, yet it is coded as software.[8] It also excludes university-run intensive English programs, K–12 language teaching, and all government/military training. And no supplied federal figure measures nonemployer activity — self-employed tutors and informal conversation schools — so those very small, individually owned operators are thinly captured. This code is an accurate measure of a narrow slice: the private, employer-based, classroom language-school business. The broad "language learning market" that market-research firms quote (bundling apps and consumer software) runs into the tens of billions of dollars[20] — a much wider thing than what NAICS 61163 counts.

4. Investable universe — where value concentrates

Because this level is 611630, the investable picture is identical, and it is unusual: there is no clean U.S.-listed pure play in brick-and-mortar language schools. Public exposure is adjacent and indirect, while the recognizable school brands are private.

• Public-market (adjacent) exposure clusters in the digital and diversified names: Duolingo (Nasdaq: DUOL), an app/software business that is the dominant public proxy for consumer language learning but is outside the NAICS code;[8] New Oriental Education & Technology (NYSE: EDU) and China-listed education peers such as Gaotu (GOTU) and TAL Education (TAL), held as American Depositary Receipts (ADRs — certificates that let a U.S. investor hold shares in an overseas company) and carrying China-policy risk;[9] and diversified content/education holdings such as Pearson (NYSE: PSO) and Graham Holdings (NYSE: GHC, a weaker language proxy after selling Kaplan Languages Group effective May 1, 2026).[10][11]
• The actual U.S. industry is private and concentrates in a handful of multi-site platforms atop a long tail of independents: Language Education Holdings (the 2022 combination of Berlitz, ELS, and ILSC),[12] EF Education First,[13] Kaplan Languages Group,[11][14] and groups such as Oxford International, EC English, and inlingua.[15][16][17]

The practical takeaway for a public-market investor: you can buy the digital growth story, a foreign education conglomerate, or a diversified education holding — but not the U.S. classroom-school industry itself. That industry is a private-market game. See the 611630 primer for the full company-by-company universe.

5. How the money works

A language school's revenue is, at bottom, seats filled times price per course-hour, across channels with very different economics: high-ticket but volatile international students on F-1 study visas; steadier local adult learners (enrichment, immigrant ESL); the stickiest, highest-margin corporate/B2B (business-to-business) contracts; and ancillary lines (study-abroad services, university pathways, housing, test prep). Two costs dominate — teachers and real estate — so the make-or-break metric is utilization: paid teaching hours divided by available teacher and classroom hours. A half-empty center still pays rent and core staff, so enrollment dips hit margins hard. The franchise route (Berlitz, inlingua) flips this into an asset-light, recurring-royalty model for the brand owner while the local franchisee carries the teacher and real-estate costs.[18][19] The 611630 primer works these unit economics through in full.

6. What drives demand

The dominant swing factor is international-student flows, and specifically the intensive-English slice, which has been shrinking for years — U.S. intensive English enrollment peaked above 133,000 students in 2015 and fell to about 69,386 across 347 programs in 2024, roughly half the peak.[6] Visa and immigration policy moves enrollment directly (new international enrollment across U.S. higher education fell 17% in fall 2025, with institutions citing visa concerns);[7] a strong U.S. dollar diverts families to the UK, Canada, and Australia;[16] and technology substitution by free apps and AI tutors compresses willingness to pay at the beginner end. Steadier demand comes from immigrant/workforce ESL, corporate globalization, test prep (TOEFL, IELTS), and a structural bright spot in ASL, where interpreter demand is projected to grow much faster than average.[20] Full demand analysis is in the 611630 primer.

7. Regulation

Regulation clusters around enrolling international students, layered over state licensing, consumer protection, and labor law. To enroll foreign students in F-1 status a school must hold SEVP certification — from the Student and Exchange Visitor Program, run by U.S. Immigration and Customs Enforcement (ICE) — which lets it issue the Form I-20 a student needs for an F-1 visa.[15] Any full-time intensive English program enrolling F-1 students must also be accredited (typically by the Commission on English Language Program Accreditation, CEA, or the Accrediting Council for Continuing Education and Training, ACCET) under the Accreditation of English Language Training Programs Act.[15][17] State licensing of private, non-degree schools (for example, California's Bureau for Private Postsecondary Education) sits on top.[19] The through-line: losing accreditation or SEVP certification can destroy an enrollment channel even when the teaching is sound. See the 611630 primer for detail.

8. Consolidation

The industry is highly fragmented. Federal concentration measures for NAICS 61163 make this concrete: the four largest firms account for just 29.2% of receipts, the top eight for 36.1%, the top 20 for 48.1%, and the top 50 for 58.6%, with a Herfindahl-Hirschman Index (HHI, a standard concentration score where higher means more concentrated) of only 266.3[3] — far below the ~1,000–1,500 range at which U.S. antitrust regulators begin to treat a market as concentrated. No one controls this market, though a meaningful multi-site platform layer sits above a very long tail of independents. Two forces reshape it: consolidation (weak enrollment forced the 2018 Embassy English sale to EC and the 2022 Berlitz/ELS/ILSC combination; the 2026 Kaplan Languages Group sale continues the churn)[11][12][16] and digital disruption (apps and online tutoring marketplaces narrow the defensible ground for physical schools to visa-sponsored immersion, accredited degree pathways, and corporate training). The 611630 primer covers competitive dynamics in full.

9. Risks

The same risks apply as at the child level. In brief: immigration and visa policy is the number-one risk — a tightening of F-1 issuance can cut the highest-value channel quickly;[6][7] currency and geopolitics divert students elsewhere and concentrate exposure in a few source countries;[16] technology substitution pressures price and volume at the consumer end; operating leverage runs in reverse because fixed real-estate and core-staff costs turn enrollment dips straight into margin loss; seasonality, instructor risk, and regulatory dependence (loss of accreditation or SEVP) round out the operating risks; and incomplete federal data make market-share and valuation estimates less certain. Full risk detail is in the 611630 primer.

10. How to invest and the outlook

Public-market routes are limited and indirect: the cleanest exposure to the growth in language learning is Duolingo (DUOL) — but you are buying a subscription-software business that competes against traditional schools, not the classroom industry.[8] New Oriental (EDU) and China-listed peers add scale wrapped in China-policy and ADR risk;[9] Pearson (PSO) adds content and assessment; Graham Holdings (GHC) is now only a diversified education holding after the Kaplan Languages Group sale.[10][11] There is no U.S.-listed pure play on domestic language schools. Private-market routes are where the actual industry lives — acquiring a profitable regional school, building a multi-site platform around university pathways, buying a Berlitz/inlingua franchise for an asset-light royalty, or backing a B2B corporate-training or assessment platform — with diligence centered on site-level utilization, instructor dependence, acquisition channels, refund/deferred-revenue exposure, and accreditation and visa compliance.

The outlook (forward-looking judgment, not reported fact): near-term U.S. demand faces tighter international-student visa policy and continued app substitution at the low end, offset by durable niches in immigrant/workforce ESL, corporate training, ASL, and study-abroad test prep. The most likely path is a slow-growing, still-fragmented industry that keeps consolidating, with economic value migrating toward digital delivery and B2B contracts; artificial-intelligence tutoring is the wild card. For investors the through-line is the same on both sides of the market: prize the revenue that visas and apps can't easily take away. For the complete how-to-invest and outlook discussion, see the 611630 primer.

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Sources

1. U.S. Census Bureau, "2022 NAICS Definition: 611630 Language Schools (definition and exclusions); 61163 industry structure," 2022. https://www.census.gov/naics/?details=611630&input=611630&year=2022
2. U.S. Census Bureau, "County Business Patterns, NAICS 611630 / 61163," 2023 (establishments, employment, payroll). https://www.census.gov/programs-surveys/cbp.html
3. U.S. Census Bureau, "Economic Census — Concentration of Largest Firms, NAICS 611630 / 61163 (receipts, firm count, CR ratios, HHI)," 2022. https://data.census.gov/table/ECNSIZE2022.EC2200SIZECONCEN
4. Institute of International Education, "Open Doors — Intensive English Programs (69,386 students / 347 programs in 2024; peak >133,000 in 2015)," 2025. https://opendoorsdata.org/annual-release/intensive-english-programs/
5. Institute of International Education / The PIE News, "New international enrolments in the US down 17% this fall (Open Doors 2025 snapshot)," 2025. https://thepienews.com/new-international-enrolments-in-us-down-17-this-fall/
6. Duolingo, Inc., "FY2025 Form 10-K (revenue ~\$1.04B; ~12.2M paid subscribers)," SEC, 2026. https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm
7. New Oriental Education & Technology Group / Macrotrends, "Revenue ~\$4.9B for year ended May 31, 2025," 2025. https://www.macrotrends.net/stocks/charts/EDU/new-oriental-education-technology/revenue
8. Pearson plc, "Annual Report and Accounts 2025," 2026. https://plc.pearson.com/en-GB/investors/annual-reports
9. Graham Holdings Company, "Form 8-K: Sale of Kaplan Languages Group (effective May 1, 2026)," SEC, 2026. https://www.sec.gov/Archives/edgar/data/104889/000162828026029369/ghc-20260501.htm
10. Quad Partners, "Berlitz, ELS and ILSC Join Language Education Holdings," 2022. https://www.quadpartners.com/news/berlitz-els-and-ilsc-join-language-education-holdings/
11. EF Education First, "EF Celebrates 60 Years of Opening the World Through Education (founded 1965; Hult family)," 2025. https://www.ef.edu/about-us/press/articles/2025/ef-celebrates-60-years-of-opening-the-world-through-education/
12. Kaplan International Languages, "About Kaplan (Kaplan Languages Group; Alpadia, Azurlingua)," 2026. https://www.kaplaninternational.com/about-kaplan
13. U.S. Department of Homeland Security / ICE-SEVP, "SEVP Certification, Form I-20, and the Accreditation of English Language Training Programs Act (2013)," 2025. https://studyinthestates.dhs.gov/schools/certification/start-cert
14. Bridge Education / Inside Higher Ed, "U.S. Intensive English Programs: enrollment decline, Saudi scholarship cuts, and school closures (incl. Embassy English sale to EC, 2018)," 2018–2020. https://bridge.edu/tefl/blog/u-s-intensive-english-programs-short-term-volatility-or-long-term-decline/
15. Commission on English Language Program Accreditation (CEA) / Accrediting Council for Continuing Education and Training (ACCET), "Accreditation of intensive English programs," 2025. https://www.cea-accredit.org/accreditation/faqs
16. U.S. Department of State, EducationUSA, "What Are U.S. English Language Programs? (ESL/IEP overview; Berlitz private-lesson pricing illustrative)," 2026. https://educationusa.state.gov/your-5-steps-us-study/research-your-options/english-language/what-are-english-language-programs
17. FranchiseHelp, "Berlitz International franchise cost and terms (~\$40K fee; \$150K–300K investment; ~10% royalty + ~2% ad fee)," 2025. https://www.franchisehelp.com/franchises/berlitz-international/
18. U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, "Interpreters and Translators — much-faster-than-average projected growth (ASL demand)," 2025. https://www.bls.gov/ooh/media-and-communication/interpreters-and-translators.htm
19. California Bureau for Private Postsecondary Education (BPPE), "Licensing of private postsecondary and vocational schools," 2025. https://www.bppe.ca.gov/
20. Grand View Research / GMInsights, "Language Learning Market size (broad market-research definition, tens of \$ billions)," 2025. https://www.gminsights.com/industry-analysis/language-learning-market