American Public Education, Inc. ((APEI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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American Public Education, Inc. (APEI) delivered a strong earnings report for the second quarter of 2025, with several key achievements in financial performance and strategic alignment. The company exceeded financial guidance and achieved significant enrollment growth, particularly in its Rasmussen and Hondros divisions. Additionally, APEI made notable improvements to its balance sheet and increased its adjusted EBITDA guidance for the year. However, the company did report a net loss, albeit reduced from the previous year, and faced increased costs and expenses. Despite these challenges, the highlights of the call, particularly the strategic achievements and financial outperformance, significantly outweighed the lowlights.
Exceeding Financial Guidance
APEI outperformed its second quarter 2025 financial guidance, surpassing the top end of expectations for revenue, net income, EPS, and adjusted EBITDA. This performance underscores the company’s strong financial management and strategic execution.
Double-Digit Enrollment Growth
The company’s Rasmussen and Hondros divisions achieved impressive double-digit enrollment growth of 10% and 18% respectively. This growth has been a key driver of expanding margins and increased profitability, highlighting the effectiveness of APEI’s enrollment strategies.
Balance Sheet Improvements
APEI successfully completed the sale of two corporate administrative buildings, collecting over $22 million. This, along with the redemption of preferred equity for approximately $43 million, has strengthened the company’s balance sheet, saving $6 million annually from eliminated dividend payments.
Increased Adjusted EBITDA Guidance
Despite the sale of Graduate School USA, APEI increased its full-year adjusted EBITDA guidance to a range of $81 million to $88 million. This adjustment reflects the company’s confidence in its ongoing financial performance and strategic initiatives.
Strong Cash Flow
Cash flow from operations for the first half of 2025 was robust at $51.8 million, a significant increase from $33.2 million in the prior year. This strong cash flow supports APEI’s operational and strategic objectives.
Improved Revenue Across Key Segments
Second quarter revenue saw a 6.5% increase, with notable improvements in the Rasmussen, APUS, and Hondros segments. This revenue growth is indicative of the company’s successful market strategies and operational efficiencies.
Net Loss Reduction
APEI reported a reduced net loss of $0.3 million in the second quarter, an improvement from a $1.2 million loss in the previous year. This reduction highlights the company’s progress in managing its financial challenges.
Loss on Graduate School Sale
The sale of Graduate School USA resulted in an anticipated loss of $7 million to $8.5 million. Despite this, the transaction aligns with APEI’s strategic focus on its core educational offerings.
Increased Costs and Expenses
Total costs and expenses rose by 3.4% in the second quarter compared to the same period in 2024, driven by higher employee compensation costs and professional fees. This increase reflects the company’s investment in talent and services to support its growth.
Forward-Looking Guidance
APEI’s forward-looking guidance remains optimistic, with the company maintaining its full-year revenue guidance, adjusted for the Graduate School sale. The increased adjusted EBITDA guidance to $81-$88 million reflects confidence in ongoing financial performance. Additionally, Rasmussen’s consistent enrollment growth and APUS’s course registration increase are expected to contribute to continued low-to-mid single-digit growth for the rest of 2025. The company is well-positioned for growth investments, supported by its enhanced capital structure and financial flexibility.
In summary, American Public Education, Inc.’s second quarter earnings call highlighted strong financial performance and strategic achievements. Despite some challenges, such as a net loss and increased expenses, the company’s enrollment growth, balance sheet improvements, and increased guidance paint a positive outlook. APEI’s strategic focus and financial management continue to position it well for future growth.