American Public Education, Inc. (NASDAQ:APEI) Q3 2025 Earnings Call Transcript

American Public Education, Inc. (NASDAQ:APEI) Q3 2025 Earnings Call Transcript November 10, 2025

American Public Education, Inc. beats earnings expectations. Reported EPS is $0.3, expectations were $-0.09.

Eric Martinuzzi: Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the American Public Education, Inc. 3Q 2025 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. If you would like to ask a question during this time, if you would like to withdraw your question, thank you. I’d now like to turn the call over to Brian Prenoveau, Investor Relations. Please go ahead. Thank you, and good afternoon, everyone. Welcome to American Public Education’s conference call to discuss third quarter 2025 results.

Brian Prenoveau: Joining me on the call today are Angela Selden, President and Chief Executive Officer, Edward Codispoti, Executive Vice President and Chief Financial Officer, Barry Jansen, Senior Vice President of Growth and Strategy, and Rick Sunderland, Executive Adviser to American Public Education, Inc., also on today’s call and will be available for the Q&A session. Materials for the call today are available in the Events and Presentations section of American Public Education, Inc.’s website. Statements made during this conference call and any accompanying presentation or regarding American Public Education, Inc. and its subsidiaries that are not historical facts may be forward-looking statements based on current expectations, assumptions, estimates, and projections.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, such as those identified in our Form 10-Ks under the heading Risk Factors, including those related to potential impacts from government shutdowns or changing federal or state government policies, practices, and laws, including impacts on revenues or the timing of receivables. Forward-looking statements may sometimes be identified by words like anticipate, believe, seek, could, estimate, expect, and may plan potentially reject should, will, would, and similar or opposite words. Forward-looking statements include, without limitation, statements regarding expectations for registration and enrollments, revenue, earnings, and adjusted EBITDA, and other earnings guidance.

Our foundation for growth, the planned combination of our institutions, governmental and regulatory actions, their impact, our response to those actions, changing market demands, and our ability to satisfy such demands and other company initiatives. This presentation contains references to non-GAAP financial information. A reconciliation between the non-GAAP financial measure we use and the most directly comparable GAAP measure is located in the appendix to today’s and in the earnings release. Management believes that the presentation of non-GAAP financial information provides useful supplemental information to investors regarding its results of operations and should only be considered in addition to and not as a substitute for or superior to any measure of financial performance prepared in accordance with GAAP.

With that said, I’d like to turn the call over to American Public Education, Inc.’s President and Angela Selden. Angie, please go ahead.

Q&A Session

Angela Selden: Thank you, Brian. Good afternoon, and thank you for joining American Public Education’s third quarter 2025 earnings call. Before we begin with the third quarter results, I would like to take this moment to introduce Ed Codispoti, American Public Education, Inc.’s new Chief Financial Officer. Ed joined American Public Education, Inc. on 10/20/2025, and we are very excited to have him on board. Ed joins us from NV5, a leader in technology and engineering consulting solutions. Prior to NV5, Ed was CFO of Illumina Holdings, a higher education company providing learning platforms and technology solutions to universities in Latin America. I will let Ed introduce himself further before he provides the financial overview.

I also want to take this opportunity to thank Rick Sunderland for his dedicated service. Over twelve years, he has been instrumental in building and shaping American Public Education, Inc. During Rick’s tenure, American Public Education, Inc. has navigated significant transformation across the enterprise, including the integration of new institutions and strengthening of the company’s long-term position. Rick has been a steady hand, always steering American Public Education, Inc. in the right direction through periods of growth and change, and his leadership has left a lasting positive impact on the organization. We appreciate that he has agreed to serve as an executive advisor over the next few months to facilitate a smooth transition. We will certainly miss him while also wishing him the best during his next chapter.

Moving on to the third quarter. We have four areas to highlight during today’s call. First, I am very pleased with American Public Education, Inc.’s third quarter 2025 performance. As we have again exceeded our guidance ranges for all metrics, including revenue, net income, EPS, and adjusted EBITDA, through continued registration and enrollment momentum and expanding margins. Registration and enrollment growth has outpaced our forecast and significantly contributed to the outperformance in our financial metrics. Registrations at APUS in the third quarter increased 8% as compared to 3Q 2024. This also represents a sequential acceleration in the rate of growth from 2Q 2025. Enrollments at Rasmussen increased 10% versus 3Q 2024. This represents the fifth consecutive quarter of year-over-year enrollment growth.

I am particularly pleased that on-ground enrollments at Rasmussen are accelerating, taking advantage of our existing capacity or what we call filling the back row. Enrollment at Hondros College of Nursing continued their strong momentum, increasing 18% as compared to 3Q 2024.

Angela Selden: Second, as previously disclosed, we completed the sale of Graduate School USA on 07/25/2025. Early this year, as we prioritized the combination of our degree-granting institutions, we determined that the graduate school training business was no longer a strategic fit within our future growth strategy. We were very pleased to find a new home for the graduate school that is more aligned with its mission and market position, allowing us to focus on growing our core degree-granting businesses, including the military, military-affiliated, veteran, nursing, and other healthcare communities. Third, as we continue our work to simplify the overall operational businesses at American Public Education, Inc., at the ‘5, we received HLC approval and submitted our combination request to the Department of Education.

In Q3 2025, after dialogue with the Department of Education team newly assigned to our transaction, we were informed that we should follow a different process for the planned combination of our institutions rather than the one originally undertaken. As a result, in September, we were required to submit and completed the submission of a new application first to the HLC, which will be reviewed at their board meeting in February 2026. This application contains substantially the same content as our prior submission. We have also provided to the Department of Education our expected timeline for the completion of this newly submitted combination plan to take effect at the beginning of 2026 for the 2026 student financial aid award year. Fourth, our simplification actions have also strengthened our balance sheet and should enable our subsidiary institutions to continue to produce improved financial results.

With the Department of Education removing the restrictions on the $24,500,000 letter of credit, that dated before the close of our acquisition of Rasmussen, that cash now unrestricted on our balance sheet contributes to the unrestricted cash and equivalents totaling $193,100,000 as of 09/30/2025. As a result of our recent redemption of our preferred equity, at the end of the second quarter, we will save approximately $6,000,000 annually from the elimination of the cash dividend payments. Also, the sale of the graduate school eliminated a $28,000,000 lease liability, which will save us approximately $4,000,000 in lease payments annually and also reduces our total liabilities. These changes have improved our cash position and will increase our cash flow by approximately $10,000,000 per year on a pretax basis, which will meaningfully improve net income and earnings per share.

We believe we are now positioned with more financial flexibility and an improved capital structure to more confidently pursue our growth initiatives. Moving now to more details about the third quarter 2025 results. Starting first with American Public Education, Inc.’s nursing and healthcare institutions. Rasmussen continues to produce strong results. Rasmussen’s enrollment increased 10% in 3Q 2025 and 9% in 4Q 2025, representing the fifth and sixth consecutive quarters of year-over-year enrollment increases. As mentioned in previous calls, by leveraging its existing fixed cost structure, Rasmussen has been and will continue to experience increased operating leverage as enrollments continue to increase. Continued enrollment growth will also flow through to EBITDA margins.

Importantly, we are carrying an additional 1,300 enrollments into 4Q 2025 as compared to 4Q 2024, which we will continue to build upon in 2026. With our current campus footprint, we believe our strategy that we call filling the back row by working to ensure each of our classes and sections is maxing out capacity at our current campuses has been successful. With increasing enrollments and improving EBITDA flow through on each incremental student. At Hondros College of Nursing, as previously reported, 3Q 2025 enrollment was strong with 18% growth as compared to 3Q 2024. 4Q 2025 enrollments continue a positive trend, increasing 9% year over year to 4,000 students off of a very strong prior year comp. We believe that the business combination of Rasmussen and Hondros College of Nursing will provide us with an improved platform to add programs, scale enrollment, and increase margins.

Turning to American Public Education, Inc.’s online university educating our nation’s military, veterans, and their families, in the third quarter, overall APUS net course registrations increased 8% year over year. Revenue at APUS also increased over 8%. Turning our attention to Q4. The government shutdown has muted military enrollments at APUS for October and November. We are, however, pleased that several of the military branches are now authorizing tuition assistance benefits through the use of the $100,000,000 of tuition assistance funds that were authorized in the One Big Beautiful Bill Act. Further, those branches have been selectively bringing back furloughed workers to help assist with those TA approvals. Additionally, last night’s Senate vote test vote yielded enough votes for the amended CR to pass the Senate, perhaps even today, and head back to the House for consideration, possible approval, and passage to the president for signature perhaps as early as the end of this week.

It is our understanding that upon presidential signature, workers would be called back from furlough and TA funds would again be available for use during the CR period. We remain confident that TA will continue to be a critical Department of Defense recruiting tool, as it is a benefit to service members in exchange for voluntary enlistment. It is also seen as a force-shaping tool because by offering these educational opportunities, the military can attract and develop human capital with a higher skill set, thus strengthening our U.S. Armed Services Forces. As we await the passage of this CR and the defense appropriations bill, we have implemented various cost-saving measures and are continuing to evaluate additional opportunities to mitigate the adverse impacts.

Overall, across our three education units, we are so pleased with the resilience of our team. Especially given the government shutdown uncertainty. We’ve delivered consistent performance that we’ve demonstrated over the last eighteen months. We are confident in our ability to continue executing and taking advantage of the growth drivers that we believe will accelerate growth and profitability and provide more students with more educational opportunities. We look forward to welcoming investors and analysts to our 11/20/2025 Investor Day at the New York Athletic Club in New York City to provide a longer-term view of American Public Education, Inc.’s growth strategies and financial outlook. American Public Education, Inc. enables students to experience a valuable lifelong return on their educational investment.

Our vision remains to offer education that transforms lives, advances careers, and improves communities by providing online and campus-based post-secondary education to over 107,000 students. Our mission to power purpose, potential, and prosperity for those in service to others reflects our focus on a student population which is resilient in the face of AI transformation and potential threat. Our nursing education prioritizes in-person bedside care, and our military service members continue to be critical active participants in U.S. Military strategies. Each of our education units is purpose-built to deliver accessible and affordable higher education across a diverse range of subjects. I’d like to thank each of our employees and faculty that worked tirelessly to make our mission a reality.

With that, I will now turn the call over to American Public Education, Inc.’s new Chief Financial Officer, Ed Codispoti.

Ed Codispoti: Thank you, Angie. I’m delighted to be on today’s earnings call as I begin my fourth week with the company. As Angie mentioned earlier, I came to American Public Education, Inc. after serving as CFO of NV5 Global, an engineering and technology solutions firm, and before that, I was with Illumina Holdings, a company that owned universities and delivered technology solutions to higher education institutions across Latin America. The CFO role at American Public Education, Inc. is an exciting opportunity to bring together my experience in driving growth and advancing higher education while focusing on meaningful student outcomes. I’d also like to say that I very much appreciate working with Rick Sunderland, who has done such a great job as CFO of American Public Education, Inc.

for over twelve years. The transition so far has been seamless. I look forward to meeting with investors and analysts in the coming weeks and months. Turning now to our quarterly results. Total revenue in the third quarter was $163,200,000, an increase of $10,100,000 or 7% from the prior year period. As you know, we sold Graduate School USA in July. If you exclude Graduate School USA, third quarter revenue of $800,000 and third quarter of prior year revenue of $8,100,000, our revenues would have been 5% higher or aggregate growth of 12%. Total costs and expenses in the third quarter were $153,500,000, an increase of $4,500,000 or 3% as compared to 2024. The increase was primarily driven by a $3,900,000 loss related to the sale of Graduate School USA in July 2025 and a $2,500,000 increase in advertising costs as we invest in student enrollment for growth.

In the third quarter, net income available to common shareholders was $5,600,000, which was almost 7x higher than net income of $700,000 in the prior year. And EPS increased significantly to $0.30 per diluted share in 2025 versus $0.04 in the third quarter of last year. Third quarter adjusted EBITDA increased 60% to $20,700,000 as compared to the prior year period adjusted EBITDA of $12,900,000, driven by increased revenue and margin expansion of 424 basis points. It was above the top end of the guidance range and represented an adjusted EBITDA margin of 13% as compared to 8% in the prior year. Looking now at our segments, at APUS, third quarter revenue increased to $83,100,000, an 8% increase as compared to the prior year period. The increase was driven by third quarter 2025 net course registration, which increased 8% as compared to the prior year period.

EBITDA for APUS was $26,200,000 for the quarter, a 19% increase over the prior year period. At Rasmussen, third quarter revenue was $60,800,000, an increase of 16% as compared to the third quarter of last year. The increase was fueled by a 12% increase in on-ground enrollment and an 11% increase in online enrollment. This enrollment growth brings total Rasmussen student enrollment to 14,900 students and contributed to our EBITDA of $825,000, which grew significantly from the EBITDA loss of $4,500,000 in the prior year period. At Hondros College of Nursing, third quarter revenue was up 19% to $18,400,000 as compared to the prior year period due to continued enrollment growth. For the quarter, Hondros College of Nursing total enrollment increased 18% to approximately 3,700 students, and third quarter EBITDA was a loss of $336,000 compared to the loss of $259,000 in the prior year period.

Our balance sheet and cash flows also improved when compared to the prior year period. Cash flow from operations for the nine months ended September 30, 2025, increased 56% to $73,500,000. Our free cash flow, defined here as adjusted EBITDA less CapEx, nearly doubled for the nine-month period at $45,200,000. As of 09/30/2025, total cash, cash equivalents, and restricted cash increased 22% to $193,100,000, an increase of $34,200,000 from the year ended 2024. Subtracting our $96,400,000 secured note, our net cash position was $96,700,000 at quarter end. Additionally, as noted earlier, at the end of the second quarter, we redeemed all our outstanding preferred stock for $43,100,000 and completed the sale of two corporate administrative buildings in Charlestown, West Virginia, for net proceeds of $22,500,000.

CapEx totaled $11,800,000 in the first nine months of 2025 compared to $17,700,000 in the prior year period. Principal on American Public Education, Inc.’s term loan at September 30 was consistent with the prior quarter at $96,400,000, and our $20,000,000 revolving credit facility remains fully available. I believe this demonstrates the strength of our balance sheet, which we believe positions us well for future growth. Turning now to our fourth quarter and full-year outlook, which covers forward-looking statements subject to the various risks noted earlier. Before I discuss our guidance for the fourth quarter 2025, it would be helpful to refer to Slide 12 of the presentation deck so that we can describe how we have incorporated the government shutdown in our guidance.

Our original revenue guidance for full-year 2025 was within a range of $650,000,000 to $660,000,000. We are pleased that APUS and Rasmussen outperformed with respect to our previous expectations by about $22,000,000. Additionally, we sold Graduate School USA in 2025, and its negative impact on the guidance, including its first-half underperformance, was approximately $18,000,000. If we assume that the shutdown would result in an impact on revenue between $20,000,000 and $24,000,000, our revised guidance for the year would be $640,000,000 to $644,000,000. For the fourth quarter 2025, APUS total net course registrations are expected to be between 65,000 to 74,400 registrations, representing a 33% to 23% decrease when compared to last year, impacted by the government shutdown.

At Rasmussen and Hondros College of Nursing, fourth-quarter student enrollments are actual because the quarterly starts are at these schools. Are known at this time. At Rasmussen, in the fourth quarter, total on-ground enrollment increased 13% to approximately 7,100 students, and total online enrollment increased 6% to approximately 8,800 students, for an aggregate enrollment of approximately 15,900 students. This represents a 9% increase when compared to 2024. At Hondros College of Nursing, fourth-quarter total student enrollment increased 9% year over year to approximately 4,000 students. In 2025, consolidated revenue is expected to be between $150,000,000 and $153,500,000, again impacted by the government shutdown. The company expects fourth-quarter net income available to common stockholders to be between a profit of $5,900,000 and $8,300,000 or between $0.32 and $0.45 per diluted share.

Ed Codispoti: Fourth quarter 2025 adjusted EBITDA is expected to be between $18,500,000 and $22,000,000. Therefore, for the full year 2025, we are changing our anticipated consolidated revenue to a range of $640,000,000 to $644,000,000. Net income available to common shareholders for the year is expected to be between $17,200,000 and $19,600,000. Our full-year 2025 adjusted EBITDA guidance is between $75,000,000 and $79,000,000, and our full-year CapEx is expected to be between $15,000,000 and $17,000,000. The updated full-year adjusted EBITDA and CapEx guidance translates to free cash flow expectations for the full year, defined as adjusted EBITDA less CapEx, to be between $58,000,000 and $64,000,000. I’ll now pass it back to Angie for closing remarks, after which we will begin our question and answer session. Angie?

Angela Selden: Thank you, Ed. Great job on your first call. In closing, we have spent much of this past year setting financial and operating goals and then delivering on those results. Rasmussen and Hondros College of Nursing are delivering consistent positive enrollment growth and profitability. APUS, with the exception of the market anomaly of the government shutdown, continues to deliver growth and high margins. At the beginning of the year, we set expectations for redeeming our preferred equity, selling our corporate buildings, and simplifying our business structure. We have delivered on these actions. Our organization was purpose-built to deliver affordable and accessible educational opportunities in fields that are in high demand.

We believe that our platform and the sector tailwinds set American Public Education, Inc. up to accelerate growth and bring more educational opportunities to a greater audience across the country and across the world. We are as optimistic today as we’ve ever been about the long-term potential of our company, and we look forward to sharing more details about that long-term potential on our November 20 Investor Day in New York City. With that, I would now like to hand the call back to the operator to begin our question and answer session.

Eric Martinuzzi: At this time, I would like to remind everyone, in order to ask a question, your first question comes from the line of Thomas White with D.A. Davidson. Please go ahead.

Thomas White: Great. Thanks for taking my question. Good evening. First off, nice results on the quarter, guys. Congrats to you, Ed, on the new role, and good luck to Rick going forward. I guess just on the tuition assistance disruption at APUS.

Ed Codispoti: Hoping, Andrew, maybe you could just talk a little bit about your plans for driving kind of re-enrollments for the students that were forced to be dropped. And I do not know, do you guys expect that there will be any sort of permanent demand kind of destruction as a result of this? Or is it just temporary? And then I had a follow-up.

Angela Selden: Okay. Great. Thanks, Tom. First, I would say a couple of things are happening. Right? And I like to just emphasize a few. Even though the CR has not yet been approved, we are so pleased that the three largest branches, Army, Air Force, and Navy, are using the One Big Beautiful Bill, $100,000,000 of tuition assistance funds. To allow service members to register even without the approval of this CR. So we have seen more registrations flowing in December than we had in October and November as a result. So we are very pleased that we are starting to see demand come back already in December, even without the passage of the CR and inside the CR is the defense appropriations bill. We have electronic marketing campaigns to every single student who was registered in October and November and who got dropped for nonpayment.

And we fully expect that those folks are going to continue their education. This has only happened once in the last twelve years, which was the last time was in 2013. And the results of that were no decrease in our demand. So we cannot be certain about what our future expectations for TA enrollments are going to be. That data point tells us that this should be a short-term matter and not a long-term decline in our expectations for TA enrollment.

Thomas White: Okay. That’s very helpful. Thanks. And then just maybe one follow-up if I could on the plan to integrate the three institutions. It sounds like maybe there’s been a minor speed bump there. Can you just maybe explain whether the new process does it change at all kind of how you’re thinking about the ultimate benefits of integrating the three institutions either from sort of an expense or revenue synergy standpoint? Thanks.

Angela Selden: Sure. Great question. We remain very committed to the combination of our three institutions and nothing has changed about our conviction around that. I would say that this is a procedural matter. There’s a different form that we needed to complete. And when we submitted to the HLC the second time around, instead of 3,600 pages of documentation, we submitted 4,000 pages of documentation to support the change, but I would say substantially all of what we had in the first submission was reused and reorganized for the second submission. When the Department of Education was reduced in force in 2025, we received a new team assignment. And that team assignment had a different view on which process we should follow than the team we had been working with prior.

And so with that, we needed to recalibrate. We are completely in compliance with that new process. And are still on track with dialogue that we’ve had with the Department of Education for the expectation of a third quarter 2026 implementation in time for the 2026 financial aid award year. So we will continue to brief people if something were to change there, but that’s fully still the timeline we’re operating at.

Gary: And this is Gary. On your second question about synergy opportunities, we’re moving ahead with the opportunity to cross-pollinate the revenue. You’ll hear more about that on the Investor Day. So we’re not sitting back and waiting for the combination to occur to move forward our plans to, you know, expand our campus footprints as well as cross-pollinate programs from Rasmussen into Hondros in the interim period. So we do not see the timing as being an obstacle for that.

Thomas White: Thank you very much.

Angela Selden: Thank you, Tom.

Eric Martinuzzi: Your next question comes from the line of Steven Sheldon with William Blair. Please go ahead.

Steven Sheldon: Hey. Thanks for taking my questions. And first, congrats to you, Rick, on a great run and really look forward to working with you, Ed. So maybe starting here on just the guide for the fourth quarter, just wanted to confirm that you’re assuming effectively a two-month slowdown for APUS registrations here and then kind of, more or less back to normal trajectory in December and into 2026. Are we kind of thinking about that the right way?

Gary: So I would say, slowdown in October where I think we previously announced 1,700 registrations. Of TA flow through, which is a substantial decline. And then about 30%, we were able to recoup for November compared to the prior year about 5,000 registrations. The low end of our guidance does contemplate some shortfall in December as we ramp up not knowing the full timing for the CR. But you know, we’ll see how that flows if we can, you know, get the CR, the CR in place and we continue to see the flow through from the OVBDA then obviously that would be towards the higher end of our guide.

Steven Sheldon: Got it. That’s helpful. And then on the cost savings side, I guess, you talk some about where you’ve been able to cut near-term spending. How much of that could be temporary reductions? Versus cost-cutting that could be more permanent and be something that, you know, help support profit and margin trends heading into 2026. Any detail there?

Gary: Not a lot. But, I mean, we previously said we thought we had opportunities. And certainly, we’ve dialed back our variable costs that we think that we can manage through. We have taken the opportunity to streamline some operations at APUS. So that is an important piece to this. But for the most part, which will be permanent. That’s a permanent reduction in force. But we’ve also made sure that we do not affect the revenue side of the equation. So we wanted to take the cost measures that we could that we thought were discrete and would not harm the business going forward. Things like not overinvesting in military marketing is a good example where, you know, we could dial that back until we had some certainty of reopening. But some will flow through to next year, but not a huge amount.

Steven Sheldon: Got it. Very helpful. And then just one more if I could sneak it in. Just on the nursing side, I guess, can you just talk about how general demand to pursue nursing pathways have changed? It seems like you’ve been putting up very strong growth here at both Hondros and Rasmussen. Yeah, both 3Q and then into 4Q. And, generally, I think it’s becoming even more attractive to learners, to pursue nursing given shortage, increasing pay, limited AI disruption risk. Will be relative to other industries. So is that starting to play out here? Are you seeing any notable uptick in application? And just generally, what are you seeing in terms of the top of funnel demand trends on the nursing side?

Angela Selden: Yeah. I’ll start by saying we’re seeing acceleration. Obviously, we reported that we have a 13% enrollment growth on the campus side of Rasmussen in the fourth quarter, which we’re very pleased to see. We reiterate that the nurses that we primarily educate are first licensure, meaning those folks are becoming nurses for the first time as opposed to post-licensure where they already have a license and are trying to advance their career. I think that there is a challenge across some sectors of the market around investing in that post-licensure degree program because the pay increase maybe isn’t meaningful enough to invest in that post-licensure career in the short term. We’re seeing substantial pay in our markets right now at LPN can make about $66,000 a year in an ADN, so a two-year degree RN can make $88,000.

And so those are very meaningful comp packages for a forty-year career for a single educational degree and license. And so it is attractive from an ROI perspective, especially with the price point of our programs. And you know, there are plenty of open positions for people to obtain jobs. So we also believe that having insourced our marketing in the last eighteen months, we’ve really started to tighten those dials and identify how to reach those students in the local market effectively, and that is also driving the, you know, quarter over quarter, year over year performance improvement in our campus-based nursing program. So we’re very pleased with how that’s performing.

Steven Sheldon: Great to hear. Nice work in the quarter.

Angela Selden: Thank you so much, Steven.

Eric Martinuzzi: The next question comes from the line of Jasper Bibb with Truist Securities. Please go ahead.

Jasper Bibb: Hey. Good afternoon, everyone. Just on the filling the back row strategy, I’m not sure if maybe utilization is the perfect measure here, but is there any way for you to frame for us how much more room you have to drive enrollment into those existing programs and campuses at Rasmussen?

Angela Selden: Great question, Jasper. We’re gonna talk about this next week in our upcoming day where we’re gonna give you a multiyear view of the different capacity opportunities. We’ve clustered our campuses into three segments. Because as we’ve talked in previous calls, our smaller campuses have arguably less total seats available. Our basically single market campus opportunity is the area where we believe there’s the biggest opportunity in terms of filling those campuses. And then our multi-campus clusters in a single market also have significant demand. So we really look forward to sharing that with you on November 20.

Jasper Bibb: Okay. Well, yeah. Looking forward to hearing more detail on that later this month. And then just last one for me. Are you expecting the decline in the registrations at APUS during the fourth quarter should give you a bit more cushion against 90 in the $25 calculation. Imagine from a mix perspective, that that might be helpful.

Angela Selden: What we have seen is interestingly a shift of our primarily of our graduate military students paying their shortfall with cash. So instead of sitting out on the sidelines and not using TA, you know, waiting for TA to come back, we actually see grad military paying cash. And so, you know, every cash payer you can get one of those for every nine, you know, or 8.9 TA or FSA users. So that certainly had in a somewhat unusual way had a positive impact on our 90/10 calculation, yes.

Jasper Bibb: Got it. Thanks for taking the question.

Angela Selden: Great question. Thanks.

Eric Martinuzzi: Your next question comes from the line of Eric Martinuzzi with Lake Street. Please go ahead.

Eric Martinuzzi: Yeah. Just curious to know for the nonmilitary. So the military affiliate and veteran, if those enroll the registration trends are on track for you for those student segments?

Gary: Yeah. Actually, Q3 and year to date, it’s scary, we’ve seen very nice acceleration in the growth of both the extended family segments. As well as the veteran segments. So I would say a lot of the 8% growth that we saw in Q3 was attributable to those two segments where in the military’s, I’ll call it steady Eddie, you know, three, 4% growth. So I think we’re very pleased with the performance year to date and especially in Q3 of those two adjacencies.

Eric Martinuzzi: Gotcha. And then it was great to see the Rasmussen and on-ground 13% enrollment growth. Is that something that you feel is sustainable that there’s a tailwind here macro-wise?

Angela Selden: I’ll start by saying, you know, we’re firing on all cylinders. Now in terms of enrolling in our campuses. Certainly, as we start lapping ourselves, the comps are going to get trickier. But we believe there’s a tremendous amount of opportunity to fill the back row of our Rasmussen campuses. And so we’re focusing on a disproportionate amount of our marketing spend where it makes sense to make sure we’re continuing to deliver on that enrollment momentum. So yeah.

Eric Martinuzzi: Okay. That’s it for me. We’ll keep our fingers crossed for…

Angela Selden: Great. Thanks, Eric. Thank you, Eric. See you next week. Thank you.

Eric Martinuzzi: Next question comes from the line of Griffin Boss with B. Riley. Please go ahead.

Griffin Boss: Hi, good evening. Thanks for taking my questions. Appreciate all the color you’ve given so far. Just one for me. Curious if you could dig in, to kind of where we should expect to see some of these cost-saving initiatives implemented in the fourth quarter. Obviously, looks like you pushed out some CapEx spend, maybe to 2026 or beyond that guidance came down a little bit. But in terms of the OpEx, just curious, I mean, are we going to see kind of a little bit more initiative on like the selling and promotion, you know, marketing expenses? Or where should we see, you know, kind of a relative uptick as a percentage of revenue in some of these areas that maybe you were not able to implement cost-saving initiatives?

Gary: Yeah. I think we talked a little bit about this previously. But definitely, S and P, there will be a little bit of savings there. We want to make sure obviously, the timing of when everything comes back online will dictate that. We are looking at temporary and sometimes more permanent staff reductions in non-student facing functions. And then I would say we talked also about our variable comp that is tied to performance and that is another lever. Also important to note that given our variable cost model at APUS, which is on a per registration basis, that while we may lose x number of registrations, the variable cost for that will also come down. So there are three big buckets there. Outside from the little things that you always look at like external consulting and travel entertainment and the like. So those are the major areas that are contributing to the cost savings.

Griffin Boss: Got it. Okay. Thanks for the color, Will. Great work navigating, has been a tough environment. I look forward to hearing more details next week at the Investor Day.

Angela Selden: Super. See you there, Griffin. Thank you.

Eric Martinuzzi: Your next question comes from the line of Raj Sharma with Texas Capital.

Raj Sharma: Hi. Good afternoon. So thank you for taking my questions. Again, solid performance and resilience in the face of tough testing conditions. Had a question on the it was great that the $100,000,000 tuition assistance fund was you’re able to use that. Any delays in payments from this to you?

Angela Selden: You know, Raj, it’s a good question. We are going to build, you know, according to our stated policy. I think the question is whether or not there are people working on the other end to push the button. But I’ll turn it over to Rick who’s on our call here today. Rick, do you wanna say anything about that?

Rick Sunderland: Yes. Thank you. Raj, it is impacted by staffing at the various branches. It is not there to process the invoices. But the good news is, as was highlighted on the call, I mean, we’ve got a pretty substantial cash reserve to weather the very short-term shutdown feels long, but is actually relatively short. Given the, you know, the month or two of processing that would be otherwise processed.

Raj Sharma: Got it. Thank you, Rick. And then I wanted to understand that now that the government sent assuming when the government shutdown is over, its business as usual in the sense that there likely isn’t any medium-term or permanent damage from this on the enrollment. And then also, any of these registrations that you weren’t able to know, get in October and November, are these sort of lost? Is this lost revenue? Or is there a scenario where service personnel might wanna, you know, double their course load to make up?

Angela Selden: Well, I would say that our forecast, Raj, that what would have otherwise occurred in October, November has just simply shifted on the calendar. Right? We know that the reason why we purpose-built our education model to allow students to take one course at a time is because they don’t often have time to do more than one at a time. And, you know, our flex allows them to pause and then restart. So we may see some people who are, you know, gunning for a promotion or something who wanna move like we saw some of these grad military students who are paying cash to keep going. But I think by and large, we’re forecasting that we’re basically gonna see those shift to when everything restarts in earnest.

Raj Sharma: Got it. Thank you. And then on Rasmussen’s side, the programs that are particularly showing really good momentum beyond ground healthcare, you know, up 13%. Any specific programs there that are doing really well and you expect that enrollment environment to sort of continue?

Gary: Yeah. I would say our allied health programs are rad tech and our surg tech programs are doing good, although they’re pretty capped right now that we’re working on as part of our plans to expand that. It’s really nursing. It’s been across the board, predominantly in our ADN program and BSN. And it’s also important to note that, you know, our growth of 13% includes the closure of two campuses in Wisconsin. Not that they were huge contributors to enrollment, but gives you a sense of how our nursing programs are growing. So we’re really pleased with both our BSN and ADN programs and to a little bit smaller extent and the LPN program. But it’s across the board nursing.

Raj Sharma: Got it. Thank you. That’s it for me, and I look forward to seeing you all at the analyst day.

Angela Selden: Great. See you next week, Raj. Thank you.

Raj Sharma: Yep. Absolutely. Thank you. Take care.

Eric Martinuzzi: The next question comes from the line of Alex Paris with Barrington Research. Please go ahead.

Alex Paris: Hi, guys. Thanks for taking my call and quick welcome to Ed. Look forward to working with you and a so long to Rick. I’ve enjoyed working with you.

Ed Codispoti: Thank you. Looking forward to it.

Alex Paris: Great. And now I know how to pronounce your last name. Now that you have the…

Ed Codispoti: Perfect.

Alex Paris: Just a few follow-ups. First question, on the fourth quarter guidance, just overall revenue and then APUS registrations, what are the assumptions at the low end and the high end? And related question, just to be clear, in October, even though you had to stop out some students, you still kept 1,700 students under TA. Then students that had been previously approved. And then in November, you said you’re able to bring in $5,000 under the $100,000,000 OBBB?

Gary: Yeah. So I’ll answer that, Gary. So you think about November, about 30% of what was the prior year’s registrations made it through. So on the TA registration. Prior year TA registration. So we’re modeling on the low end that that’s probably the same knowing that we’ve seen some improvement that was, you know, OBDA literally those changes got enacted the very end of the enrollment cycle. Some of the branches did keep over open for continued enrollment seven days. So we expect to do better than that. So at the high end, we’re obviously assuming that we’re able to improve upon that numbers. We’re trying to bracket it on what we saw in November on the low end and on the high end what we would expect to see on, you know, normal pacing. Once either the CR goes through or if the OBB funding continues to flow.

Alex Paris: And then what just remind me. What was the October TA registrations as a percent of the prior year? It was, 40% lower. Was under their…

Gary: Oh, a lot. No. It was 1,700 registrations on what we normally would have been, I’m gonna say, this isn’t exactly right, but 17,000. So it’s probably 10%. So it’s a very small number. May try it.

Alex Paris: And then it improved. You got 30%. On a year-over-year basis. You got 30% of what you had in the previous year. As opposed to just 10% in the previous year. And then in December, you’re saying the low end would assume that same 30%. Of the year-ago month. And the high end would be something higher than that.

Gary: That’s correct.

Alex Paris: Okay. Good. Thank you. Question two. Well, that was question one and two, actually. Question three. The Graduate School USA loss, of $3,900,000 was that a lot less than you had forecasted? I thought on the last call you said to assume a $7,000,000 to $8,500,000 loss. On sale?

Angela Selden: Yeah. Rick, do you want to answer that one?

Rick Sunderland: Yeah. Yes. And the answer is yes. Alex, in the prior call, we estimated 6.5 to 8. We came in at 3.9. The difference was the resolution of the this is an accounting matter. The accumulated deficit that existed on the books of Graduate School is a separate company. To eliminate the deficit, we had to record a credit, which was offset to the otherwise, you know, higher number. So that number came down.

Alex Paris: Thank you. And then the last question, again, just a point of clarification. Post-licensure, pre-licensure. Hondros is all pre-licensure or…

Angela Selden: All pre. And then Rasmussen has some post-licensure?

Alex Paris: Yes.

Angela Selden: A small percentage. Yeah. Yeah. Okay. But not so but the post-licensure is contained within what is currently categorized as our online business. Right? Because that’s all delivered without a need for a campus. Yeah.

Alex Paris: Great. Well, thank you very much. I’ll take the rest of my questions offline.

Angela Selden: Okay. Thanks, Alex.

Eric Martinuzzi: And then Pearson comes from next question comes from the line of Luke Horton with Northland Capital Markets. Please go ahead.

Luke Horton: Yeah. Hey, guys. Congrats on the nice quarter. I know we’ve kind of answered most of the questions here, but just wanted to kind of touch back on the strong enrollment trends at Rasmussen, specifically on-ground. Are you seeing a change in student demographic at all? With the students that you’re gaining here? And is this simply just a function of more efficient marketing and macro demand, or is there just anything else you could provide there would be great.

Angela Selden: Yeah. Great question. Nice to hear from you, Luke. We are really trying to expand our marketing reach to not just enroll ADN or the two-year degree RN students, but also the BSN, the four-year, three and a half-year degree RN students. And so we are seeing momentum in both, but we are seeing an acceleration in our BSN students, which we’re really pleased about. It has a longer tail of revenue, you know, often stronger NCLEX results. So we love that we are expanding our pool of BSN students at Rasmussen.

Luke Horton: Okay. I got it. And then just one more, I guess. On the campus-based enrollment. I mean, are you seeing anything from a geographical standpoint? I know you’re mainly Midwest harassment from in Florida to Kansas. Like, are you seeing any specific campuses outperforming on new start ins? Or new student starts at all? Or is it pretty much broad?

Gary: Broad-based? I was gonna say it’s a good question, but I would say it’s broad. I think we’re especially pleased with the I’ll call it Minnesota where as you recall, we ceased enrolling in our ADN program and do what Angie just said, the BSN has been a nice lift there. But, no, it’s been across the board. I mean, it’s been nice to see and in Kansas, in Illinois, Minnesota, as well as in Florida.

Luke Horton: Okay. Great. Awesome. Well, thank you guys for taking the questions, and congrats again on the quarter.

Angela Selden: Thank you, Luke.

Eric Martinuzzi: There are no more questions at this time. I would now like to turn the call back over to Angela Selden for closing remarks. Please go ahead.

Angela Selden: Thank you, Eric. I’d like to thank each of you for joining our earnings conference call today. We look forward to continuing to update you on our ongoing progress and growth as we continue our rapid pace of enrollment growth, revenue growth, and margin expansion. We also look forward to welcoming many of you to New York City next week for our 2025 American Public Education, Inc. Investor Day Conference. If we were unable to answer any of your questions, please reach out to our IR firm, MC Group, whose contact information is on the last page of the PowerPoint, and they will be more than happy to assist in getting us all connected together. So back to you, operator.

Eric Martinuzzi: Ladies and gentlemen, this concludes today’s call. Thank you all for joining, and you may now disconnect.