American Public Education(US:APEI)2025-11-10 23:00Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $163.2 million, an increase of $10.1 million or 7% from the prior year period [19] - Net income available to common shareholders was $5.6 million, nearly seven times higher than the net income of $700,000 in the prior year [20] - EPS increased significantly to $0.30 per diluted share in Q3 2025 versus $0.04 in the prior year [20] - Adjusted EBITDA increased 60% to $20.7 million compared to the prior year period, with an adjusted EBITDA margin of 13% compared to 8% in the prior year [21] Business Line Data and Key Metrics Changes - At APUS, Q3 revenue increased to $83.1 million, an 8% increase compared to the prior year, driven by an 8% increase in net course registrations [22] - Rasmussen's Q3 revenue was $60.8 million, a 16% increase fueled by a 12% increase in on-ground enrollment and an 11% increase in online enrollment [22] - Hondros College of Nursing's Q3 revenue increased 19% to $18.4 million, with total enrollment up 18% to approximately 3,700 students [23] Market Data and Key Metrics Changes - Registrations at APUS increased 8% year-over-year, while enrollments at Rasmussen increased 10% compared to Q3 2024 [8][12] - Enrollments at Hondros College of Nursing continued strong momentum, increasing 18% compared to Q3 2024 [12] Company Strategy and Development Direction - The company is focusing on growing core degree-granting businesses, particularly in military, veteran, nursing, and healthcare communities [9] - APEI is simplifying its operational structure and has submitted a new application for the combination of its institutions, expected to take effect in Q3 2026 [10][34] - The company aims to leverage existing capacity and improve financial results through enrollment growth and operational efficiencies [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the team despite government shutdown uncertainties and highlighted consistent performance over the last 18 months [16] - The company anticipates that the government shutdown will have a temporary impact on enrollments, with expectations of a return to normalcy once the situation stabilizes [32][50] - Management remains optimistic about long-term growth potential and plans to share more details at the upcoming Investor Day [30] Other Important Information - The company completed the sale of Graduate School USA, which was no longer a strategic fit, allowing a focus on core businesses [8][9] - The balance sheet improved with unrestricted cash and equivalents totaling $193.1 million as of September 30, 2025 [10][24] Q&A Session Summary Question: Plans for driving re-enrollments at APUS due to tuition assistance disruption - Management noted that several military branches are using tuition assistance funds to allow service members to register, and they have implemented marketing campaigns to re-engage dropped students [32] Question: Impact of the new process for integrating institutions on expense or revenue synergies - Management confirmed commitment to the integration and stated that the new process is procedural, with expectations for implementation in Q3 2026 [34] Question: Confirmation of a two-month slowdown for APUS registrations - Management acknowledged a slowdown in October but noted a recovery in November, with expectations for a return to normal trajectory in December [37] Question: Details on cost-saving initiatives - Management indicated that they have streamlined operations and reduced variable costs without affecting revenue-generating activities [39] Question: Trends in nursing program demand - Management reported strong growth in nursing enrollments, driven by attractive compensation and job availability in the sector [41] Question: Enrollment trends and demographic changes at Rasmussen - Management highlighted broad-based enrollment growth across campuses, with a particular focus on expanding the BSN student pool [58]