Core Points - American Public University System (APUS) has achieved initial accreditation for its Master of Science in Healthcare Administration (MSHA) program from the Commission on Accreditation of Healthcare Management Education (CAHME), highlighting its commitment to excellence in healthcare management education [1][2] - The MSHA program is designed to provide students with a comprehensive understanding of legal and ethical healthcare administration, organizational behavior, technology applications in health information management, and financial management [2][3] - CAHME's accreditation process ensures that programs meet rigorous standards set by leading academics and practitioners, thereby enhancing the quality of healthcare management education globally [3][5] Company Overview - APUS has a 33-year history and serves over 153,000 alumni from more than 80 countries, recognized for its innovative approach to online learning [8] - The institution is in the top 11% for students' return on educational investment compared to 4,500 colleges and universities nationwide, according to the Georgetown University Center on Education and the Workforce [8][10] - APUS is accredited by the Higher Learning Commission (HLC) and is a wholly owned subsidiary of American Public Education, Inc. (Nasdaq: APEI) [9]

Core Points - The American Public University System (APUS) has received specialized accreditation for its Bachelor of Science in Esports Program from the Commission on Sport Management Accreditation (COSMA), making it the first of its kind in the United States [1][3] - The accreditation is valid through February 2030 and applies to APUS's other two sport management programs: Bachelor of Science in Sports Management and Master of Science in Sports Management [2] - The Esports program, launched in March 2022, focuses on various aspects of esports, including event management, player development, media production, and marketing [3][4] Accreditation Details - COSMA has recently expanded its accreditation scope to include Esports Management programs, with APUS being the first to comply with these principles [4] - COSMA is recognized for promoting excellence in sport management education and is the only organization offering discipline-specific accreditation in this field [4] Institutional Background - APUS has a history of 33 years and serves over 153,000 alumni from more than 80 countries, emphasizing affordable and high-quality education [7] - The university ranks in the top 11% for students' return on educational investment among 4,500 colleges and universities in the U.S. [8] - APUS is accredited by the Higher Learning Commission (HLC) and is a subsidiary of American Public Education, Inc. [9]

Core Viewpoint - American Public Education, Inc. (APEI) reported better-than-expected fourth-quarter 2024 results, with adjusted earnings and revenues exceeding the Zacks Consensus Estimate, although the bottom line declined year-over-year [1][4]. Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were 63 cents, surpassing the Zacks Consensus Estimate of 54 cents by 16.7%, but down from 64 cents in the same quarter last year [4]. - Total revenues reached $164.1 million, exceeding the consensus mark of $162 million by 1.6% and growing 7.4% year-over-year [4]. - Total costs and expenses increased by 4.2% year-over-year to $142.6 million, impacting the bottom line [5]. Segment Performance - APUS segment revenues rose to $82.4 million from $79.4 million, driven by registration growth and tuition increases, with total net course registrations increasing by 7.1% to 97,100 [6]. - RU segment reported revenues of $57.5 million, up from $52.6 million, with total student enrollment increasing by 3.5% to 14,600 [7]. - HCN segment revenues grew by 20% year-over-year to $18.9 million, supported by a 19.3% increase in total student enrollment to 3,700 [8]. Yearly Overview - For the full year 2024, APEI reported revenues of $624.6 million, up from $600.5 million in 2023, and adjusted EBITDA increased to $72.3 million from $59.6 million [9]. - The adjusted EPS for the year was 55 cents, a significant improvement from a loss per share of $2.93 in the previous year [9]. Guidance - APEI expects total revenues for Q1 2025 to increase by 4-6% year-over-year to between $161 million and $163 million, with EPS anticipated to be between 9 cents and 17 cents [11]. - For 2025, total revenues are projected to grow by 4-6% year-over-year to $650-$660 million, with adjusted EBITDA expected to be between $75 million and $85 million [13].

Company Overview - American Public Education, Inc. (APEI) has appointed Richard J. Statuto to its Board of Directors, effective March 6, 2025, increasing the total board members to nine [1] - Statuto has over 30 years of leadership experience in the healthcare sector, including roles as President and CEO of Bon Secours Health System and CEO of St. Joseph Health System, both of which generated over $3 billion in revenue [2] Strategic Alignment - APEI's Chairman, Ric Andersen, expressed excitement about Statuto's appointment, highlighting his experience in driving growth at large health systems, which aligns with APEI's strategic objectives [3] - Angela Selden, APEI's President and CEO, noted that Statuto's success in mission-driven healthcare organizations will be crucial in shaping APEI's strategy [3] Leadership and Experience - Statuto has served on several boards, including the Catholic Health Association and the American Heart Association, showcasing his extensive network and leadership in healthcare [2] - He holds an MBA from Xavier University and a bachelor's degree from Vanderbilt University, further emphasizing his educational background [4] Educational Institutions - APEI operates through various institutions, including American Public University System, Rasmussen University, Hondros College of Nursing, and Graduate School USA, focusing on transforming lives and advancing careers [5] - APUS serves approximately 88,000 adult learners worldwide, primarily focusing on active-duty military and veteran students [6] - Rasmussen University, with a history of 125 years, serves around 14,600 students across 20 campuses and online, emphasizing nursing and health sciences [7] - Hondros College of Nursing is the largest educator of PN (LPN) nurses in Ohio, serving approximately 3,700 students [8] - Graduate School USA provides training to the federal workforce, catering to government professionals through customized training [9] Accreditation - APEI's institutions are accredited by recognized agencies, ensuring quality education and compliance with educational standards [10]

Financial Data and Key Metrics Changes - In Q4 2024, total revenue was $164.1 million, an increase of $11.3 million or 7.4% from the prior year [29] - Full year 2024 revenue reached $624 million, exceeding the top end of the original guidance [11] - Adjusted EBITDA for Q4 2024 was $31.4 million, representing a 22.2% increase compared to the prior year [31] - Diluted net income per common share for Q4 2024 was $0.63, slightly down from $0.64 in the prior year [31] - Cash flow from operations for the year was $48.9 million, compared to $45.5 million in the prior year [35] Business Line Data and Key Metrics Changes - At APUS, Q4 2024 revenue increased to $82.4 million, a 3.8% increase year-over-year, with net course registrations up 7% [32] - Rasmussen's Q4 2024 revenue was $57.5 million, a 9.3% increase, with total enrollment increasing 4% to approximately 14,600 students [32] - Hondros College of Nursing saw a 20% increase in revenue in Q4 2024, with total enrollment up 19.3% to approximately 3,700 students [34] Market Data and Key Metrics Changes - Overall net course registrations at APUS increased by 7% year-over-year in Q4 2024, driven by military and military-affiliated registrations [22] - The nursing schools continue to be a significant driver of growth, with an annual shortage of approximately 200,000 nurses in the market [21] Company Strategy and Development Direction - APEI plans to consolidate its three degree-granting institutions into a single entity, American Public University System, targeting completion by Q4 2025 [24] - The company aims to simplify operations and find revenue and cost synergies through this consolidation [12] - APEI is focusing on optimizing marketing spend and enhancing student support to drive enrollment growth [62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, highlighting positive enrollment trends and the achievement of positive EBITDA at Rasmussen [10][17] - The company anticipates 2025 revenue guidance of $650 million to $660 million and adjusted EBITDA of $75 million to $85 million [14][40] - Management acknowledged challenges in the first quarter due to portal maintenance affecting enrollment but expects recovery as the portal is now operational [46] Other Important Information - APEI plans to redeem preferred shares by the end of Q2 2025, which is expected to be accretive to net income and earnings per share [13][41] - The company remains net cash positive with total cash and equivalents of $158.9 million as of December 31, 2024 [36] Q&A Session Summary Question: Impact of portal timing on enrollments in Q1 - Management indicated that the portal outage impacted first quarter guidance, with an expected mid-single digits percentage effect [46] Question: Timeline for Rasmussen to achieve double-digit adjusted EBITDA margins - Management did not provide specific multi-year guidance but expressed confidence in significant revenue flow-through to the bottom line [50] Question: Drivers of EBITDA contraction in Q1 - Increased advertising and higher labor costs were cited as primary drivers for the expected year-over-year EBITDA contraction [52][53] Question: G&A savings from portfolio consolidation - Management anticipates both revenue and cost synergies from the consolidation, with a focus on long-term growth rather than immediate cost reductions [59] Question: Drivers of online growth for Rasmussen - The optimization of marketing spend and a shift towards organic lead generation were highlighted as key factors driving enrollment growth [62]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was $164.1 million, an increase of $11.3 million or 7.4% from the prior year [29] - Full year 2024 revenue reached $624 million, exceeding the top end of the original guidance [11] - Adjusted EBITDA for Q4 2024 was $31.4 million, representing a 22.2% increase compared to the prior year [31] - Diluted net income per common share for Q4 2024 was $0.63, slightly down from $0.64 in the prior year [31] - Cash flow from operations for the year was $48.9 million, up from $45.5 million in the prior year [35] Business Line Data and Key Metrics Changes - APUS revenue in Q4 2024 increased to $82.4 million, a 3.8% rise compared to the prior year [31] - Rasmussen's Q4 2024 revenue was $57.5 million, a 9.3% increase year-over-year, with online enrollment up 9% [32] - Hondros College of Nursing saw a 20% revenue increase in Q4 2024, with total enrollment rising 19.3% [34] - Adjusted EBITDA for Rasmussen in Q4 2024 was $5.5 million, compared to $0.6 million in the prior year [33] Market Data and Key Metrics Changes - Overall net course registrations at APUS increased by 7% year-over-year in Q4 2024 [22] - For the full year 2024, APUS total net course registrations increased by 3% compared to 2023 [23] - Rasmussen experienced a 4% year-over-year enrollment increase in Q4 2024, continuing into Q1 2025 with a 7% increase [16] Company Strategy and Development Direction - APEI plans to consolidate its three degree-granting institutions into a single entity, American Public University System, targeting completion by Q4 2025 [24] - The company aims to simplify operations and find revenue and cost synergies through this consolidation [12] - APEI is focusing on enhancing student outcomes and NCLEX pass rates to improve ROI for students [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory, with 2025 expected to be a year of revenue and adjusted EBITDA growth [14] - The company anticipates 2025 revenue guidance of $650 million to $660 million and adjusted EBITDA of $75 million to $85 million [14][40] - Management acknowledged challenges in the first quarter due to portal maintenance affecting enrollments but expects recovery as systems are restored [46] Other Important Information - APEI's capital expenditures for 2024 were $21.1 million, with free cash flow for the year at $51.2 million [35] - The company remains net cash positive with total cash and equivalents at $158.9 million as of December 31, 2024 [36] Q&A Session Summary Question: Impact of portal timing on enrollments in Q1 - Management indicated that the portal outage impacted first quarter guidance, with an expected mid-single digits percentage effect [45][46] Question: Timeline for Rasmussen to achieve double-digit adjusted EBITDA margins - Management did not provide specific multi-year guidance but expressed confidence in significant revenue flow-through to the bottom line [50] Question: Drivers of EBITDA contraction year-over-year - Increased advertising and higher labor costs were cited as primary drivers for the expected EBITDA contraction in Q1 2025 [52][53] Question: G&A savings from portfolio consolidation - Management anticipates both revenue and cost synergies from the consolidation, with a focus on long-term growth rather than immediate cost reductions [57][60] Question: Drivers of online growth for Rasmussen - The shift to organic lead generation and hyperlocal marketing strategies were highlighted as key factors driving enrollment growth [62][66]

Financial Highlights - Full Year 2024 Revenue reached $624.6 million, a 4% year-over-year increase[9] - Full Year 2024 Adjusted EBITDA was $72.3 million, a 21% year-over-year increase[11,12] - Cash as of December 31, 2024, was $158.9 million, a 10% year-over-year increase[12] - Fourth Quarter 2024 Adjusted EBITDA was $31.4 million, exceeding guidance[13] - Full Year 2024 Net income available to common shareholders was $10.1 million[9,53] Enrollment Trends - APUS delivered 3% year-over-year enrollment growth with an EBITDA margin of 30% on $317 million in revenue[12] - APUS 4Q24 registration growth was 7% compared to 4Q23[13,48] - Rasmussen experienced year-over-year enrollment growth starting in 3Q24 and achieved positive EBITDA in 2H24[12,49] - Hondros enrollments have grown year-over-year for the last 20 consecutive quarters[24,33] 2025 Outlook - The company projects 2025 revenue between $650 million and $660 million[16] - The company projects 2025 Adjusted EBITDA between $75 million and $85 million[16] - The company projects 2025 Net income available to common shareholders between $19 million and $26 million[16] Strategic Initiatives - APEI plans to combine APUS, Rasmussen, and Hondros College of Nursing into American Public University System by year-end 2025[17,19]

Core Insights - American Public Education (APEI) reported revenue of $164.11 million for the quarter ended December 2024, reflecting a year-over-year increase of 7.4% and a surprise of +1.57% over the Zacks Consensus Estimate of $161.57 million [1] - The earnings per share (EPS) for the quarter was $0.63, slightly down from $0.64 in the same quarter last year, but exceeded the consensus EPS estimate of $0.54 by +16.67% [1] Revenue Performance by Segment - Hondros College, Nursing Programs (HCN) generated revenues of $18.94 million, which is a year-over-year increase of +20%, but fell short of the two-analyst average estimate of $19.16 million [4] - American Military & Public University (APUS) reported revenues of $82.36 million, surpassing the average estimate of $82.14 million, with a year-over-year change of +3.8% [4] - Rasmussen University (RU) achieved revenues of $57.49 million, exceeding the two-analyst average estimate of $55.05 million, representing a year-over-year increase of +9.4% [4] Stock Performance - Over the past month, shares of American Public Education have returned -9.4%, compared to a -3.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it may perform in line with the broader market in the near term [3]

Core Viewpoint - American Public Education (APEI) reported quarterly earnings of $0.63 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, but slightly down from $0.64 per share a year ago, indicating a 16.67% earnings surprise [1][2] Financial Performance - The company achieved revenues of $164.11 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.57% and showing an increase from $152.8 million year-over-year [2] - Over the last four quarters, APEI has exceeded consensus EPS estimates three times and topped revenue estimates twice [2] Stock Performance and Outlook - APEI shares have declined approximately 6% since the beginning of the year, contrasting with the S&P 500's decline of 0.7% [3] - The future performance of APEI's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4][5] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $0.31 on revenues of $161 million, and for the current fiscal year, it is $1.35 on revenues of $649.04 million [7] - The estimate revisions trend for APEI is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Schools industry, to which APEI belongs, is currently ranked in the top 15% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Afya (AFYA), is expected to report quarterly earnings of $0.36 per share, with revenues projected to be $140.53 million, down 4.6% from the previous year [9]

Enrollment and Student Retention - The company reported a significant increase in student enrollment, with a growth rate of 15% year-over-year, reaching a total of 50,000 enrolled students[7]. - The company anticipates challenges in attracting and retaining students, particularly among active-duty service members, which may adversely affect enrollments and revenue[22]. - The company is focusing on improving the learning experience and student outcomes to attract students likely to persist in their programs[14]. Financial Performance and Projections - Revenue for the fiscal year was $200 million, representing a 10% increase compared to the previous year[8]. - The company anticipates a 5% increase in revenue for the next fiscal year, driven by new program offerings and market expansion efforts[7]. - The debt service obligations are projected to be $15 million annually, which may impact cash flow management[8]. - The company has incurred substantial indebtedness, and the cost of servicing this debt may adversely affect financial results and operational flexibility[25]. Strategic Initiatives and Partnerships - The company plans to launch three new educational programs in the next quarter, aimed at meeting emerging market demands[7]. - A strategic partnership with a leading technology firm was established to enhance the company's online learning platform, expected to improve user engagement by 20%[8]. - The company is investing $10 million in technology infrastructure to support the integration of artificial intelligence in its educational services[8]. - The company is exploring new partnerships and relationships to support its initiatives and expand its market presence[14]. Operational Changes and Cost Management - A consolidation of campuses is planned, which is expected to reduce operational costs by 12%[7]. - The anticipated completion of the merger with Rasmussen University and Hondros College of Nursing is expected to create a consolidated institution with a broader program offering[7]. - The planned combination of American Public University System, Rasmussen University, and Hondros College of Nursing aims to consolidate operations and enhance program offerings[14]. Regulatory and Compliance Challenges - The company has faced regulatory challenges, particularly related to the "90/10 Rule," which could affect eligibility for federal student financial aid programs[8]. - Compliance with the "90/10 Rule" is critical; failure to meet this requirement for two consecutive years could result in loss of eligibility for federal student financial aid programs[25]. - Legislative and regulatory changes, including actions by the U.S. Department of Education, could significantly impact the company's operations and financial condition[14]. Technology and Cybersecurity - The integration of technology infrastructure, including the use of artificial intelligence, is essential for maintaining competitiveness and enhancing student support[14]. - The company faces risks related to cybersecurity incidents that could compromise sensitive information and damage its reputation[26]. Competitive Environment - The competitive environment in the education market may decrease market share and increase costs associated with student acquisition[22].