American Public Education(APEI) - 2025 Q2 - Quarterly Results

Overview of Q2 2025 Performance American Public Education (APEI) exceeded Q2 2025 guidance with increased revenue and Adjusted EBITDA, advancing its business simplification and receiving favorable regulatory updates for Rasmussen University Key Second Quarter 2025 Highlights APEI surpassed Q2 2025 guidance with a 6.5% revenue increase and a 38.2% rise in Adjusted EBITDA, while progressing its business simplification strategy and securing favorable regulatory outcomes for Rasmussen University Q2 2025 Financial Highlights vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $162.8 million | $152.9 million | +6.5% | | Net Loss available to common stockholders | ($0.3) million | ($1.2) million | N/A | | Adjusted EBITDA | $15.1 million | $10.9 million | +38.2% | - APEI continued its business simplification strategy with several key transactions: the sale of Graduate School USA (completed July 25, 2025), the redemption of all Series A Senior Preferred Stock, and the sale of two administrative office buildings[1][3][4] - Rasmussen University received positive regulatory updates from the Department of Education in May 2025, which lifted temporary growth restrictions and released a $24.5 million letter of credit, making the cash unrestricted[4] Management Commentary CEO Angela Selden highlighted strong Q2 performance driven by successful execution of growth and simplification strategies, including significant balance sheet improvements and the completion of the Graduate School USA sale - Management attributes the strong Q2 performance, which exceeded expectations, to continued business simplification and enrollment growth across its education units[5] - The company improved its balance sheet by redeeming preferred equity, which will save approximately $6 million in annual cash expenses[5] - The sale of Graduate School USA (GSUSA) was completed on July 25, 2025, marking a key step in the company's simplification efforts[3][5] Financial and Operational Results APEI's Q2 2025 results show increased revenue across segments, improved net loss, and strengthened cash position, alongside broad-based enrollment growth Second Quarter 2025 Financial Results Consolidated revenue for Q2 2025 increased by 6.5% to $162.8 million, driven by growth in the RU, APUS, and HCN segments, while net loss improved despite a one-time preferred stock redemption loss Q2 2025 Revenue by Segment (Year-over-Year) | Segment | Q2 2025 Revenue | Increase from Q2 2024 | | :--- | :--- | :--- | | RU Segment | $59.5 million | +$6.5 million | | APUS Segment | $81.7 million | +$4.7 million | | HCN Segment | $18.1 million | +$1.7 million | - Total costs and expenses increased by 3.4% year-over-year, primarily due to higher employee compensation, professional fees, and classroom materials costs[6] - The Q2 2025 net loss of ($0.3) million included a $3.5 million one-time loss on the redemption of preferred stock[6] Balance Sheet and Liquidity As of June 30, 2025, APEI's cash position significantly strengthened, with total cash, cash equivalents, and restricted cash growing by 11.1% to $176.6 million Cash Position Comparison | Metric | June 30, 2025 | Dec 31, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Cash, Cash Equivalents, and Restricted Cash | $176.6 million | $158.9 million | +11.1% | | Unrestricted Cash and Cash Equivalents | $174.9 million | $131.9 million | +32.6% | Registrations and Enrollment APEI experienced broad-based enrollment growth across all institutions in Q2 2025, with Hondros College of Nursing leading with a 13.5% increase in total student enrollment Q2 2025 Enrollment and Registration (Year-over-Year) | Institution | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | | American Public University System | Net Course Registrations | 96,400 | 89,800 | 7.3% | | Rasmussen University | Total Student Enrollment | 14,600 | 13,600 | 7.4% | | Hondros College of Nursing | Total Student Enrollment | 3,700 | 3,300 | 13.5% | Future Outlook APEI provides guidance for Q3 and full-year 2025, projecting continued revenue and Adjusted EBITDA growth, while adjusting net income guidance for one-time losses Third Quarter 2025 Guidance For Q3 2025, APEI anticipates consolidated revenue between $159.0 million and $161.0 million, with Adjusted EBITDA projected from $15.0 million to $17.0 million, and a net loss between ($2.9) million and ($0.8) million Q3 2025 Guidance | Metric | Guidance Range | YoY % Change | | :--- | :--- | :--- | | Consolidated Revenue | $159.0 million – $161.0 million | 4% to 5% | | Net Loss available to common stockholders | ($2.9) million – ($0.8) million | N/A | | Adjusted EBITDA | $15.0 million – $17.0 million | 16% to 32% | | Diluted EPS | ($0.15) – ($0.04) | N/A | - Enrollment growth is expected to continue in Q3 2025, with APUS net course registrations projected to increase by 5-7%, RU enrollment by 10%, and HCN enrollment by 18% year-over-year[10] Full Year 2025 Guidance APEI reconfirmed full-year 2025 revenue guidance of $650 million to $660 million, updated net income to $18 million to $24 million reflecting one-time losses, and increased Adjusted EBITDA guidance to $81 million to $88 million Full Year 2025 Guidance | Metric | Guidance Range | YoY % Change | | :--- | :--- | :--- | | Consolidated Revenue | $650 million – $660 million | 4% to 6% | | Net Income available to common stockholders | $18 million – $24 million | 84% to 142% | | Adjusted EBITDA | $81 million – $88 million | 12% to 22% | | Capital Expenditure (CapEx) | $18 million – $22 million | (14%) to 4% | - The company reset its full-year net income guidance to account for losses associated with the sale of Graduate School USA and the redemption of preferred equity[4] - Despite the reset to net income, the guidance for full-year 2025 Adjusted EBITDA was increased, signaling strong underlying operational performance[4] Appendix: Financial Statements and Reconciliations This section provides detailed financial statements, including the Consolidated Statement of Income, Consolidated Balance Sheet, and GAAP to Non-GAAP reconciliations for Q2 2025 and future guidance Consolidated Statement of Income For Q2 2025, APEI reported revenue of $162.8 million and net income of $4.5 million, with all segments showing year-over-year revenue growth, resulting in a net loss available to common stockholders of ($0.3) million after one-time adjustments Q2 2025 vs Q2 2024 Income Statement Summary (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue | $162,766 | $152,895 | | Income from operations | $7,025 | $2,220 | | Net income | $4,496 | $371 | | Net loss available to common stockholders | $(324) | $(1,160) | Consolidated Balance Sheet As of June 30, 2025, APEI's balance sheet shows total assets of $537.4 million and total liabilities of $265.1 million, with preferred stock fully removed from equity following its redemption Key Balance Sheet Items (in thousands) | Line Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $537,369 | $570,103 | | Total Liabilities | $265,129 | $266,224 | | Preferred Stock | $0 | $39,691 | | Total Stockholders' Equity | $272,240 | $303,879 | GAAP to Non-GAAP Reconciliation This section reconciles GAAP Net Income to Adjusted EBITDA for Q2 2025, showing adjustments for items like interest, taxes, depreciation, stock compensation, and professional fees, and provides a similar reconciliation for future guidance Q2 2025 GAAP Net Income to Adjusted EBITDA Reconciliation (in thousands) | Line Item | Amount | | :--- | :--- | | Net income | $4,496 | | Add: Income tax expense | $1,421 | | Add: Interest expense, net | $1,108 | | Add: Depreciation and amortization | $4,088 | | EBITDA | $11,113 | | Add: Other professional fees | $1,715 | | Add: Stock compensation | $2,238 | | Add: Other adjustments | $35 | | Adjusted EBITDA | $15,101 | - The full-year 2025 guidance reconciliation shows significant adjustments from projected Net Income to Adjusted EBITDA, including an estimated $8.5 million to $7.0 million loss on the sale of GSUSA, $17.4 million in depreciation & amortization, and $8.9 million in stock compensation[32]