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01/11 16:17
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial metrics, such as increased EBITDA, cash flow, and unrestricted cash. Despite some negative aspects like reduced Graduate School revenue and unclear military funding distribution, the overall sentiment is positive. The consolidation plan, breakeven status of Rasmussen and Hondros, and increased guidance for EBITDA and net income further support this view. The Q&A reveals potential growth through consolidation and military enrollments, although some management responses lacked clarity. Overall, the positive aspects outweigh the negatives, suggesting a likely stock price increase.
Total Revenue $162.8 million, an increase of $9.9 million or 6.5% from the prior year period. Driven by increased revenue at Rasmussen, APUS, and Hondros, partially offset by lower revenue at Graduate School.
Total Costs and Expenses $155.7 million, an increase of $5.1 million or 3.4% compared to the prior year. Increase driven by employee compensation costs, professional fees, and classroom/course materials costs, partially offset by decreases in IT costs, depreciation, and occupancy costs.
Net Loss Available to Common Shareholders $0.3 million compared to $1.2 million in the prior year. Includes a $3.5 million loss on the redemption of preferred stock.
Adjusted EBITDA $15.1 million, a $4.2 million or 38% increase over the prior year period. Adjusted EBITDA margin was 9.3% compared to 7.1% in the prior year.
APUS Revenue $81.7 million, a 6.1% increase compared to the prior year. Net course registrations increased 7.3% year-over-year. EBITDA was $22.4 million with a margin of 27.4% compared to 25.3% in the prior year.
Rasmussen Revenue $59.5 million, an increase of 12.2% compared to the prior year. Online enrollment increased 12.2%, on-ground enrollment increased 3.2%, and total enrollment grew 7.4% to approximately 14,600 students. Delivered positive EBITDA of $0.2 million compared to an EBITDA loss of $4.7 million in the prior year.
Hondros Revenue $18.1 million, a 10.5% increase compared to the prior year. Total enrollment increased 13.5% to approximately 3,700 students. EBITDA was $0.1 million compared to an EBITDA loss of $0.4 million in the prior year.
Graduate School Revenue $3.4 million compared to $6.4 million in the prior year. EBITDA loss of $2.5 million compared to an EBITDA loss of $0.7 million in the prior year.
Cash Flow from Operations $51.8 million for the first 6 months of 2025 compared to $33.2 million in the prior year.
Unrestricted Cash and Cash Equivalents $174.9 million at June 30, 2025, compared to $131.9 million at December 31, 2024, an increase of $43 million.
Intelligent Infrastructure and Digital Tools: APEI is investing in intelligent infrastructure, predictive analytics, and personalized digital tools to modernize the learner journey. This includes improving access, student persistence, and delivering responsive educational experiences.
Healthcare and Military Market Focus: APEI is focusing on growing its core healthcare and military businesses, with double-digit enrollment growth at Rasmussen (10%) and Hondros (18%). APUS also saw a 7% increase in net course registrations.
Simplification Milestones: APEI completed the sale of two corporate buildings for $22 million, redeemed $43 million in preferred equity, and released $24.5 million in restricted cash, improving financial flexibility and saving $6 million annually in dividend payments.
Enrollment Growth: Rasmussen and Hondros achieved double-digit enrollment growth, enhancing margins and profitability. APUS also reported consistent growth in course registrations and revenue.
Graduate School Sale: APEI sold Graduate School USA, deeming it no longer a strategic fit, to focus on its core healthcare and military education markets.
Institutional Consolidation: APEI is progressing towards combining APUS, Rasmussen, and Hondros into a single accredited institution, with approvals from HLC and state agencies.
Government Shutdowns and Policy Changes: Potential impacts from government shutdowns or changing federal or state government policies, practices, and laws could affect revenues or the timing of receivables.
Graduate School Sale Loss: The sale of Graduate School resulted in a $7 million to $8.5 million loss, impacting financial performance.
Employee Compensation and Professional Fees: Increased costs in employee compensation and professional fees contributed to higher expenses, which could pressure margins.
Preferred Stock Redemption Loss: A $3.5 million loss was incurred on the redemption of preferred stock, affecting net income.
Integration of Institutions: Ongoing discussions with the Department of Education and HLC regarding the timing of the combination of APUS, Rasmussen, and Hondros into a single accredited institution could pose operational and regulatory challenges.
Graduate School EBITDA Loss: Graduate School incurred an EBITDA loss of $2.5 million in the quarter, reflecting operational inefficiencies prior to its sale.
Revenue Guidance: For the third quarter of 2025, consolidated revenue is expected to be between $159 million and $161 million. For the full year 2025, consolidated revenue is anticipated to be between $650 million and $660 million.
Net Income Guidance: Net income available to common shareholders for the full year 2025 is expected to be between $18 million and $24 million. Third quarter net loss available to common shareholders is expected to be between a loss of $2.9 million and $0.8 million.
Adjusted EBITDA Guidance: Full year 2025 adjusted EBITDA guidance has been increased to be between $81 million and $88 million. Third quarter adjusted EBITDA is expected to be between $15 million and $17 million.
Enrollment Growth Projections: APUS total net course registrations for the third quarter of 2025 are expected to be between 97,000 to 99,000 registrations, representing a 5% to 7% increase year-over-year. Rasmussen's third quarter total enrollment is projected to increase by 10.4% year-over-year to approximately 14,900 students. Hondros' third quarter student enrollment is expected to increase by 17.6% year-over-year to approximately 3,700 students.
Capital Expenditures (CapEx): Full year 2025 CapEx is expected to be between $18 million and $22 million.
Free Cash Flow Expectations: Free cash flow for the full year 2025, defined as adjusted EBITDA less CapEx, is expected to be between $59 million and $70 million.
Strategic Focus Areas: APEI plans to focus on growing its core healthcare and military businesses, modernizing the learner journey through intelligent infrastructure and predictive analytics, and completing the combination of APUS, Rasmussen, and Hondros into a single accredited institution.
Cash Dividend Payments: APEI announced the elimination of cash dividend payments, saving $6 million annually. This was achieved through the redemption of preferred equity for approximately $43 million, funded by proceeds from the sale of corporate buildings and the release of restricted cash.
The earnings call revealed mixed sentiments. Strong enrollment growth and positive guidance for adjusted EBITDA and free cash flow are countered by a projected net loss in Q3 and concerns about APUS registration declines. Cost-saving measures and a lack of specific details on capacity growth and future profit impacts add uncertainty. Overall, the neutral sentiment reflects balanced positive and negative factors, with no clear catalyst for significant stock movement.
The earnings call shows strong financial metrics, such as increased EBITDA, cash flow, and unrestricted cash. Despite some negative aspects like reduced Graduate School revenue and unclear military funding distribution, the overall sentiment is positive. The consolidation plan, breakeven status of Rasmussen and Hondros, and increased guidance for EBITDA and net income further support this view. The Q&A reveals potential growth through consolidation and military enrollments, although some management responses lacked clarity. Overall, the positive aspects outweigh the negatives, suggesting a likely stock price increase.
The earnings call reveals strong financial performance with increased revenue, EBITDA, and cash flow, alongside strategic initiatives like the consolidation of institutions and redemption of preferred shares. Despite some operational risks and unclear guidance on certain aspects, the overall sentiment is positive due to improved profitability and strategic cost reductions. The anticipated savings from preferred share redemption and asset sales further bolster this outlook, suggesting a likely positive stock reaction.
The earnings call highlights strong financial performance with increased revenue, improved profitability, and expanded margins. Despite some uncertainties in graduate school guidance and consolidation synergies, the overall sentiment is bolstered by positive enrollment trends, especially in nursing, and strategic cost management. The Q&A section reveals confidence in handling potential challenges, such as the portal outage and economic cyclicality. With optimistic guidance and strategic initiatives, the stock is likely to experience a positive movement in the short term.
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