American Public Education, Inc. Q4 FY2025 earnings call

At the beginning of 2025, APEI set out to simplify and strengthen. APUS delivered full-year 2025 revenue growth despite fourth quarter registration interruption. Nursing and healthcare institutions had outstanding years. APEI's full-year consolidated revenue grew 4% despite mid-year sale of Graduate School USA, closure of two Rouseson campuses, and APUS registration interruption. APEI's full year adjusted EBITDA beat revised and initial guidance. Achieved commitments like redeeming preferred equity, selling corporate buildings, and having Department of Education lift letter of credit and growth restrictions. In fourth quarter 2025, consolidated revenue exceeded guidance. Nursing and healthcare institutions showed strength with Rasmussen growing 16% and enrollments increasing 9% year over year, Hondros with strong results. APUS navigated 43-day federal government shutdown, saw 41% increase in TA registrations in December. Progress on institutional combination with Higher Learning Commission approval and legal entity combination. Launching two campuses in 2026, one Rasmussen in Orlando enrolling students in Q2 2026 and one Hondros in Detroit to enroll in Q1 2027.

APUS delivered full-year 2025 revenue growth despite a fourth quarter registration interruption. APUS's student base including veterans, extended military families, and military service members showed demand in line with expectations. Rasmussen's full year 2025 revenue increased 14% and Hondros' full year revenue increased 11%. APEI's full-year consolidated revenue grew 4% to $649 million versus 2024. Excluding graduate school from both 2024 and 2025, consolidated revenue would have increased about 7%. APEI's full year adjusted EBITDA reached $85.7 million, up 19% as compared to 2024. Fourth quarter 2025 consolidated revenue was $158.3 million. APUS fourth quarter revenue was $71 million, down 13.8% compared to prior year. Rasmussen fourth quarter revenue was $66.6 million, up 15.9%. Hondros' College of Nursing fourth quarter revenue was $20.7 million, up 9.2%. Full-year APUS revenue was $319.8 million, up 0.9% year over year. Rasmussen revenue was $246.2 million, up 13.9% year over year. Hondros' revenue was $75 million, up 11.4% year over year. Full-year adjusted EBITDA reached $85.7 million, up 18.6% compared to 2024. Net income available to common stockholders for full year 2025 was $25.3 million, or $1.36 per diluted share, up 152% from 2024.

APEI 2026 revenue will be between $685 million and $695 million. Adjusted EBITDA will be between $91.5 million and $100.5 million. Q1 2026 revenue will be between $173 million and $175 million. Adjusted EBITDA will be $25.5 million to $27.0 million. Full year 2026 net income available to common stockholders between $41.3 million and $47.6 million. diluted earnings per share between $2.15 per share and $2.47 per share. capex between $28 million and $32 million.

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 are subject to risks and insurgencies that can cause actual results to differ materially from those expressed or implied by such statements.

Q: Hi, good evening. Thanks for taking my questions and spectacular results amid what was a tough macro with the government shutdown in the fourth quarter. So I just want to start off on the CapEx cadence and step up given these new campus openings. So is that going to be linear throughout the year or is that going to ramp towards the back half of the year as that Honduras campus gets ready to start enrollments?

A: TAB, Mark McIntyre, yeah Griffin we would we expect on the campus opening that most of the capex related to the new campuses would be in the fourth quarter, maybe a little bit in the third quarter, but good question it'll be mostly in the second half of the year.

Q: Hi, good evening, everyone. Maybe following up on an earlier question, I wanted to ask what your 26 guidance and visions as far as on-ground health care growth or maybe any additional detail on what you're seeing in health care students' mammoth here would be great.

A: Hi, Jasper. Thanks very much for the question. I'll start by saying We continue to see strong interest in our campus programs, and specifically our pre-licensure nursing campus programs. I'll turn it over to Gary, and he'll give you a little bit more detail on that. Yeah, I think we said we would see somewhat linear growth in relationship to our longer-term strategic plan. So I think we're targeting high single-digit growth in our healthcare platform entirely. We intend to grow, not obviously, but we intend to grow our campuses at a slightly faster rate than the online in the healthcare division. So that is our target rate. And then obviously getting APHIS to be growing, you know, at a similar rate, maybe lower, slightly lower than the healthcare platform.

Q: Hey everyone, you have Matt Filek on for Steven Sheldon. Congrats on a strong finish to the year and thank you for taking my questions. Wanted to start with a quick follow up on filling the back row. Think you have previously said that nursing campus utilization is currently around 60%, but your target is closer to 90% and was wondering if you can share anything on the rough timeline and cadence to getting to that 90% target level across your nursing campuses.

A: Yeah. Hi, Matt. Great question. It's our favorite topic. So we signaled when we did Investor Day that we would be at approaching that 90% when we get to year four. And we also signaled that we expect a rather smooth progression over the four years. So we think that that's just going to be, you know, basically consuming capacity and adding students on a rather smooth trajectory over the next four years.