American Public Education(US:APEI)2025-05-12 22:02Financial Data and Key Metrics Changes - The company reported total revenue of $164.6 million, an increase of 6.6% year-over-year [9][18] - Adjusted EBITDA increased by nearly 25% to $21.2 million, with an adjusted EBITDA margin expanding to 12.9% from 11% in the prior year [9][19] - Net income available to common shareholders was $7.5 million, compared to a net loss of $1 million in the prior year [9][19] Business Line Data and Key Metrics Changes - Rasmussen's revenue increased by 11.5% to $59.3 million, with online enrollment up 11.1% and on-ground enrollment up 3.2% [20][21] - APUS revenue rose to $83.9 million, a 4.1% increase, with net course registrations increasing by 3.5% [20] - Hondros reported a revenue increase of 7.5% to $17.7 million, with total enrollment up 10% [21] Market Data and Key Metrics Changes - Rasmussen's enrollment increased by 7% in Q1 and is expected to grow by 8% in Q2 [12][24] - APUS's second quarter registration guidance is projected to be between 93,500 to 96,100, representing a 4% to 7% increase compared to last year [25] Company Strategy and Development Direction - The company plans to consolidate its three degree-granting institutions into a single entity, which is expected to enhance operational efficiency and address the growing demand for nursing and clinical roles [10][26] - The company is focused on improving operating leverage through increased enrollment and disciplined cost management [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth prospects, citing strong enrollment trends and effective cost management strategies [16][26] - The company is maintaining its full-year revenue guidance of $650 million to $660 million, while increasing adjusted EBITDA guidance to between $77 million and $87 million [11][25] Other Important Information - The company intends to redeem its preferred shares, which is expected to save approximately $6 million in annual dividend expenses starting in 2026 [9][10] - Cash flow from operations was reported at $37 million, an increase from $20.7 million in the prior year [22] Q&A Session Summary Question: Impact of tuition assistance portal downtime on margins and enrollment - Management indicated that the impact was minimal, with registrations increasing by 3.5% in Q1 and guidance for Q2 showing improvement [29][31] Question: Guidance for graduate school EBITDA losses - Management stated that they are unable to provide specific guidance on graduate school losses but are confident in the overall adjusted EBITDA guidance [33][35] Question: Enrollment growth expectations for Rasmussen - Management noted that Rasmussen has seen four consecutive quarters of positive enrollment growth and does not foresee headwinds for the remainder of the year [41][42] Question: Revenue synergies from consolidation - Management has not provided specific revenue synergy numbers but highlighted the benefits of combining nursing programs across institutions [85][86] Question: Interest expense in Q2 - Management confirmed that the higher interest expense includes the preferred redemption premium [90] Question: Fixed versus variable costs at Rasmussen - Management indicated a 60% flow-through rate for revenue increases at Rasmussen, with potential for higher rates as optimization continues [100]