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Overview of Financial Results for Q3 2025

American Public Education, Inc. (Nasdaq: APEI) recently released its financial results for the third quarter of 2025, showcasing performance that surpassed previous expectations. The company, well-known for its commitment to providing quality postsecondary education through online and campus-based programs, serves approximately 108,000 students across its three key subsidiaries: American Public University System, Rasmussen University, and Hondros College of Nursing.

Key Highlights

In the third quarter ending September 30, 2025, APEI reported:

• - Consolidated Revenue: $163.2 million, a year-over-year increase of 7%.
• - Net Income: $5.6 million, an impressive 660% rise compared to $0.7 million in Q3 2024.
• - Adjusted EBITDA: Up 60% to $20.7 million from $12.9 million during the same period last year.
• - Cash Flows from Operations: Increased by 56% to $73.5 million from $47.3 million in the previous year.
• - Strong Balance Sheet: APEI holds $193.1 million in cash and equivalents as of September 30, 2025, with no net debt.

The robust revenue growth was driven primarily by substantial increases in enrollment and course registrations across its various educational institutions. Specifically, Hondros College of Nursing experienced a 19% increase in revenue, while Rasmussen University and American Public University System reported 16% and 8% increases, respectively.

Management Insights

Angela Selden, APEI's President and CEO, expressed her satisfaction with the results, highlighting the company’s ability to not only meet but exceed guidance across all metrics. She noted that Rasmussen University leveraged significant enrollment growth to produce positive EBITDA during the quarter. The management team also acknowledged challenges, including muted military enrollments at APUS due to the ongoing government shutdown impacting tuition assistance benefits, although she remained optimistic following the recent funding authorization for military tuition assistance.

Comprehensive Breakdown of Q3 2025 Financials

The quarterly report indicates that:

• - Total active registrations at American Public University System surged by 8.1% to 100,000, while enrollment at Rasmussen University and Hondros College of Nursing grew by 10.4% and 17.6%, respectively.
• - The total revenue increase of $10.1 million to $163.2 million was also accompanied by a notable 12% growth rate when excluding Graduate School USA (GSUSA), which was divested in July 2025.

On the cost side, APEI's total costs and expenses rose by 3% to $153.5 million, attributed to the professional fees related to the GSUSA sale and severance costs. However, instruction costs showed improvement, indicating a 0.9% decrease as a percentage of revenue due to enhanced operational efficiencies.

Looking Ahead

Looking forward, APEI provided guidance for Q4 and the full year of 2025. They anticipate slight declines in consolidated revenue due to military enrollment challenges, with projections expected between $150.0 million to $153.5 million, reflecting a year-over-year decrease. However, they project continued strength in student enrollment numbers for both Rasmussen and Hondros, which are set to grow by 9%. The management has expressed confidence in their strategic initiatives and cost-saving measures aimed at maintaining a positive revenue trajectory despite current pressures.

Conclusion

With its strong financial performance in Q3 2025, American Public Education, Inc. affirms its position as a key player in the online education sector. By successfully navigating challenges and leveraging growth opportunities, APEI demonstrates its commitment to transforming education and improving the lives of its students and communities. As the educational landscape evolves, APEI's proactive management strategies will be vital in sustaining its momentum in the quarters to come.