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Item 1. Financial Statements

2025-08-06 compared with 2025-05-12 · 189 added, 127 removed, 504 unchanged (39% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

As of March 31, 2025 As of December 31, 2024

As of June 30, 2025 As of December 31, 2024

ASSETS (Unaudited)

20 unchanged sentences

Deferred revenue and student deposits 24,967 23,474

Income tax payable 177 —

Lease liabilities, current 13,447 13,553

7 unchanged sentences

10,000,000 shares authorized;

400 shares issued and outstanding in 2025 and 2024, respectively ($ 112,471 and $ 117,439 liquidation preference per share, $ 44,988 and $ 46,976 in aggregate, for 2025 and 2024, respectively) (Note 12)

39,691 39,691

400 shares issued and outstanding in 2024, ($ 117,439 liquidation preference per share, $ 46,976 in aggregate, for 2024) (Note 12)

Common stock, $ .01 par value;

11 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(Unaudited) (Unaudited)

Revenue $ 162,766 $ 152,895 $ 327,317 $ 307,327

11 unchanged sentences

Income before income taxes 5,917 1,435 17,276 6,491

Income tax expense 2,466 1,213

Income tax expense (benefit) 1,421 ( 16 ) 3,887 1,197

Equity investment loss — ( 1,080 ) — ( 4,407 )

1 unchanged sentence

Preferred stock dividends 1,319 1,531 2,751 3,066

Net income (loss) available to common stockholders $ 7,461 $ ( 1,019 )

Income (loss) per common share:

Loss on redemption of preferred stock 3,501 — 3,501 —

Net (loss) income available to common stockholders $ ( 324 ) $ ( 1,160 ) $ 7,137 $ ( 2,179 )

(Loss) income per common share:

Basic $ ( 0.02 ) $ ( 0.07 ) $ 0.40 $ ( 0.12 )

7 unchanged sentences

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(Unaudited) (Unaudited)

Net income $ 4,496 $ 371 $ 13,389 $ 887

Other comprehensive (loss) income, net of tax:

Unrealized (loss) gain on hedging derivatives ( 63 ) 396

Other comprehensive gain (loss), net of tax:

Unrealized gain (loss) on hedging derivatives 17 141 ( 46 ) 537

Tax effect 3 ( 35 ) 20 ( 133 )

Unrealized (loss) gain on hedging derivatives, net of taxes ( 46 ) 298

Unrealized gain (loss) on hedging derivatives, net of taxes 20 106 ( 26 ) 404

Reclassification of loss (gain) to net income — ( 784 ) 7 ( 1,571 )

1 unchanged sentence

Reclassifications of loss (gain) to net income, net of taxes — ( 589 ) 5 ( 1,181 )

Total other comprehensive loss ( 41 ) ( 294 )

Comprehensive income $ 8,852 $ 222

Total other comprehensive gain (loss) 20 ( 483 ) ( 21 ) ( 777 )

Comprehensive income (loss) $ 4,516 $ ( 112 ) $ 13,368 $ 110

The accompanying notes are an integral part of these Consolidated Financial Statements.

14 unchanged sentences

Balance as of March 31, 2025 400 $ 39,691 18,036,421 $ 180 $ 304,533 $ ( 48 ) $ ( 34,344 ) $ 310,012

Preferred stock dividends — — — — — — ( 1,319 ) ( 1,319 )

Redemption of preferred stock ( 400 ) ( 39,691 ) — — — — — ( 39,691 )

Loss on redemption of preferred stock — — — — — — ( 3,501 ) ( 3,501 )

Exercise of stock options — — 8,307 — 15 — — 15

Issuance of common stock under employee benefit plans — — 18,157 — — — — —

Deemed repurchased shares of common and restricted stock for tax withholding — — ( 1,286 ) — ( 30 ) — — ( 30 )

Stock-based compensation — — — — 2,238 — — 2,238

Other comprehensive loss — — — — — 20 — 20

Net income — — — — — — 4,496 4,496

Balance as of June 30, 2025 — — 18,061,599 $ 180 $ 306,756 $ ( 28 ) $ ( 34,668 ) $ 272,240

The accompanying notes are an integral part of these Consolidated Financial Statements.

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands, except share amounts)

Additional Paid-in Capital Accumulated Other Comprehensive Income (loss) Accumulated Deficit Total Stockholders’ Equity

10 unchanged sentences

Balance as of March 31, 2024 400 $ 39,691 17,571,095 $ 176 $ 300,137 $ 1,350 $ ( 52,881 ) $ 288,473

Preferred stock dividends — — — — — — ( 1,531 ) ( 1,531 )

Exercise of stock options — — 5,796 — 67 — — 67

Issuance of common stock under employee benefit plans — — 94,961 1 — — — 1

Deemed repurchased shares of common and restricted stock for tax withholding — — ( 1,826 ) — ( 26 ) — — ( 26 )

Stock-based compensation — — — — 1,823 — — 1,823

Other comprehensive loss — — — — — ( 483 ) — ( 483 )

Net income — — — — — — 371 371

Balance as of June 30, 2024 400 $ 39,691 17,670,026 $ 177 $ 302,001 $ 867 $ ( 54,041 ) $ 288,695

The accompanying notes are an integral part of these Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

22 unchanged sentences

Proceeds from the sale of real property 22,950 —

Net cash used in investing activities ( 3,402 ) ( 6,218 )

Net cash provided by (used in) investing activities 15,350 ( 11,416 )

Financing activities

2 unchanged sentences

Preferred stock dividends paid ( 2,751 ) ( 3,066 )

Cash paid for redemption of preferred stock ( 43,096 ) —

Cash paid for principal on borrowings and finance leases ( 107 ) ( 2,801 )

19 unchanged sentences

GSUSA is accredited by the Accrediting Council for Continuing Education and Training, or ACCET.

In July 2025, APEI entered into a definitive agreement to sell all of its membership interest in GSUSA, and the sale was completed on July 25, 2025.

Please refer to “Note 13.

Subsequent Events” for more information.

The Company’s subsidiary institutions are licensed or otherwise authorized by state authorities to offer education programs to the extent the institutions believe such licenses or authorizations are required, and APUS, RU, and HCN are certified by the United States Department of Education, or ED, to participate in student financial aid programs authorized under Title IV of the Higher Education Act of 1965, as amended, or Title IV programs.

39 unchanged sentences

As a trustee of these Title IV program funds, the Company is required to maintain and restrict these funds pursuant to the terms of the program participation agreement with ED.

Restricted cash also includes a $ 24.2 million restricted certificate of deposit to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020 composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required.

Restricted cash on the accompanying Consolidated Balance Sheets as of March 31, 2025, and December 31, 2024, excluding the restricted certificate of deposit, was $ 1.7 million and $ 1.5 million, respectively.

Total restricted cash as of March 31, 2025, and December 31, 2024, was $ 25.9 million and $ 27.0 million, respectively.

Cash and cash equivalents and restricted cash as of March 31, 2025, and December 31, 2024, were as follows (in thousands):

As of March 31, 2025 As of December 31, 2024

As of December 31, 2024, restricted cash included a $ 25.4 million restricted certificate of deposit to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020 composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required.

In May 2025, the letter of credit was released by ED, and the cash was thereafter no longer restricted.

Restricted cash on the accompanying Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024, excluding the restricted certificate of deposit at December 31, 2024, was $ 1.6 million and $ 1.5 million, respectively.

Total restricted cash as of June 30, 2025, and December 31, 2024, was $ 1.6 million and $ 27.0 million, respectively.

Cash and cash equivalents and restricted cash as of June 30, 2025, and December 31, 2024, were as follows (in thousands):

As of June 30, 2025 As of December 31, 2024

Cash, cash equivalents, and restricted cash $ 176,579 $ 158,941

2 unchanged sentences

Assets Held for Sale

Assets held for sale represent excess real property located in Charles Town, West Virginia for the Company’s APUS Segment.

Assets held for sale at December 31, 2024 represent excess real property located in Charles Town, West Virginia for the Company’s APUS Segment.

Long-lived assets are classified as held for sale when the assets are expected to be sold within the next 12 months and meet the other relevant held for sale criteria.

As such, properties are recorded at the lower of the carrying value or fair value, less costs to sell, until such time the asset is sold.

As such, properties are recorded at the lower of the carrying value or fair value, less costs to sell, until such time the assets are sold.

The Company completed the sale of its remaining assets held for sale in June 2025.

Goodwill and Intangible Assets

12 unchanged sentences

For additional details regarding goodwill and intangible assets, please refer to “Note 6.

Goodwill and Intangible Assets” in these Consolidated Financial Statements.

Goodwill and Intangible Assets” to the Consolidated Financial Statements.

Prior to December 31, 2024, the Company accounted for its investments in less than majority owned companies in accordance with FASB ASC 323, Investments – Equity Method and Joint Ventures and FASB ASC 321, Investments – Equity Securities.

The Company applied ASC 323 to investments w hen it has the ability to exercise significant influence but does not control the operating and financial policies of the company, this generally represented by equity ownership of at least 20 percent but not more than 50 percent.

The Company applied ASC 323 to investments w hen it had the ability to exercise significant influence but did not control the operating and financial policies of the company, which was generally represented by equity ownership of at least 20 percent but not more than 50 percent.

Investments accounted for under the equity method were initially recorded at cost and subsequently adjusted by the Company’s share of equity in income or losses after the date of acquisition.

3 unchanged sentences

As a result, the Company recorded an investment loss of $ 3.3 million during the first quarter of 2024 on a 2015 cost method investment.

This investment loss was due to the investee entering into a new convertible debt agreement that resulted in the conversion of the Company’s preferred stock holdings in the investee into common shares, and the dilution of the Company’s ownership percentage.

This investment loss was due to the investee entering into a new convertible debt agreement that resulted in the conversion of the Company’s preferred stock

holdings in the investee into common shares, and the dilution of the Company’s ownership percentage.

The investment loss recorded reduced the book value of the cost method investment to zero.

During the second quarter of 2024, the Company sold its remaining equity method investment back to the investee, as it was no longer considered a strategic investment.

As a result, the Company no longer has any investments accounted for under ASC 323 and ASC 321 as of March 31, 2025, and December 31, 2024.

As a result, the Company recorded an investment loss of $ 1.1 million during the second quarter of 2024 on a 2013 equity method investment.

The investment loss recorded reduced the book value of the equity method investment to zero.

As a result, the Company no longer has any investments accounted for under ASC 323 and ASC 321 as of June 30, 2025, and December 31, 2024.

Stock-based Compensation

14 unchanged sentences

Estimates of fair value are subjective and are not intended to predict actual future events, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made under ASC 718.

Stock-based compensation expense for the three months ended March 31, 2025, and 2024 was as follows (in thousands):

Three Months Ended March 31,

Stock-based compensation expense for the three and six months ended June 30, 2025, and 2024 was as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(Unaudited) (Unaudited)

Instructional costs and services $ 173 $ 197 $ 411 $ 420

8 unchanged sentences

Given that the awards are generally contingent upon achieving annual objectives, final determination of the current year incentive awards cannot be made until after the results for the year are finalized.

The Company recognizes the estimated fair value of performance-based restricted stock units by assuming the satisfaction of any performance-based objectives at the “target” level, which is the most probable outcome determined for accounting purposes at the time of grant and multiplying the corresponding number of shares earned based upon such achievement by the closing price of the Company’s stock on the date of grant.

The Company recognizes the

estimated fair value of performance-based restricted stock units by assuming the satisfaction of any performance-based objectives at the “target” level, which is the most probable outcome determined for accounting purposes at the time of grant and multiplying the corresponding number of shares earned based upon such achievement by the closing price of the Company’s stock on the date of grant.

To the extent performance goals are not met, compensation cost is not ultimately recognized against the goals and, to the extent previously recognized, compensation cost is reversed.

Amounts accrued are subject to change in

future interim periods if actual future financial results or operational performance are better or worse than expected.

During the three months ended March 31, 2025, and 2024, the Company recognized an aggregate incentive-based compensation expense of $ 1.8 million and $ 1.9 million, respectively.

Amounts accrued are subject to change in future interim periods if actual future financial results or operational performance are better or worse than expected.

During the three and six months ended June 30, 2025, the Company recognized an aggregate incentive-based compensation expense of $ 2.9 million and $ 4.7 million, respectively, compared to an aggregate expense of $ 1.9 million and $ 3.8 million for the three and six months ended June 30, 2024, respectively.

The Company accounts for income taxes in accordance with FASB ASC 740, Accounting for Income Taxes .

6 unchanged sentences

The table also includes a reconciliation of the disaggregated revenue within the reportable segments (in thousands):

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

APUS RU HCN Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 81,731 $ 59,521 $ 18,134 $ 3,380 $ 162,766

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

APUS RU HCN Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 77,048 $ 53,034 $ 16,409 $ 6,404 $ 152,895

Six Months Ended June 30, 2025

APUS RU HCN Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 163,069 $ 100,162 $ 29,823 $ 7,058 $ 300,112

Graduation fees 1,997 — — — 1,997

Textbook and other course materials — 17,315 5,374 — 22,689

Other fees 611 1,295 613 — 2,519

Total Revenue $ 165,677 $ 118,772 $ 35,810 $ 7,058 $ 327,317

Six Months Ended June 30, 2024

APUS RU HCN Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 156,224 $ 89,412 $ 27,289 $ 10,598 $ 283,523

Graduation fees 1,119 — — — 1,119

Textbook and other course materials — 15,693 4,952 — 20,645

Other fees 361 1,064 615 — 2,040

Total Revenue $ 157,704 $ 106,169 $ 32,856 $ 10,598 $ 307,327

Corporate and Other includes tuition and contract training revenue earned by GSUSA and the elimination of intersegment revenue for courses taken by employees of one segment at other segments.

Contract Balances and Performance Obligations

The Company has no contract assets or deferred contract costs as of March 31, 2025, and December 31, 2024.

The Company had no contract assets or deferred contract costs as of June 30, 2025, and December 31, 2024.

The Company recognizes a contract liability, or deferred revenue, when a student begins a course, in the case of APUS and GSUSA, or starts a term, in the case of RU and HCN.

Deferred revenue at March 31, 2025, was $ 25.1 million and included $ 15.8 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $ 9.3 million in consideration received in advance for future courses or terms, or student deposits, and represents the Company’s performance obligation to transfer future instructional services to students.

Deferred revenue at June 30, 2025, was $ 25.0 million and included $ 15.6 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $ 9.4 million in consideration received in advance for future courses or terms, or student deposits.

Deferred revenue represents the Company’s performance obligation to transfer future instructional services to students.

Deferred revenue at December 31, 2024, was $ 23.5 million and included $ 14.1 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $ 9.4 million in student deposits.

12 unchanged sentences

Assets held for sale

Assets held for sale at March 31, 2025, and December 31, 2024, represents excess real properties located in Charles Town, West Virginia, for the Company’s APUS Segment.

In the first quarter of 2025, the Company entered into an agreement to sell a building classified in assets held for sale as of December 31, 2024, for $ 7.0 million, and recorded a loss of $ 1.5 million, based on the contract amount less estimated costs to sell of $ 0.4 million.

The loss is included in Loss on assets held for sale in the accompanying Consolidated Statements of Income for the three months ended March 31, 2025.

At March 31, 2025, the carrying value of the building included in Assets held for sale in the accompany Consolidated Balance Sheets is $ 6.6 million.

The sale is expected to close in the third quarter of 2025.

In the fourth quarter of 2024, APUS entered into an agreement to sell a building currently in use for $ 16.6 million.

Assets held for sale at December 31, 2024, represented excess real properties located in Charles Town, West Virginia, for the Company’s APUS Segment.

In the first quarter of 2025, APUS entered into an agreement to sell a building classified in assets held for sale as of December 31, 2024, for $ 7.0 million, and recorded a loss of $ 1.5 million, based on the contract amount less estimated costs to sell of $ 0.4 million.

The loss is included in Loss on assets held for sale in the accompanying Consolidated Statements of Income for the six months ended June 30, 2025.

APUS completed the sale in June 2025 for net sales proceeds of $ 6.6 million.

In the fourth quarter of 2024, APUS entered into an agreement to sell a building previously in use for $ 16.6 million.

As a result, the building was reclassified to held for sale as of December 31, 2024 at the contract amount less estimated costs to sell of $ 0.7 million, or $ 15.9 million.

The sale is expected to close in the third quarter of 2025.

In the fourth quarter of 2024, APUS entered into an agreement to sell the undeveloped parcel of land for $ 0.5 million which approximated its carrying value.

As a result, the land was classified as held for sale as of December 31, 2024.

The sale closed in the first quarter of 2025.

APUS completed the sale in June 2025 for net sales proceeds of $ 15.9 million.

In the fourth quarter of 2024, APUS entered into an agreement to sell an undeveloped parcel of land for $ 0.5 million which approximated its carrying value.

As a result, the land was classified in assets held for sale as of December 31, 2024.

APUS completed the sale in February 2025 for net sales proceeds of $ 0.5 million.

Total cash received from the sale of assets held for sale was $ 23.0 million for the six months ended June 30, 2025.

The Company has operating leases for office space and campus facilities and finance leases for certain copiers and printers.

22 unchanged sentences

There are no variable lease payments.

Lease expense for the three months ended March 31, 2025, and 2024, was $ 4.9 million and $ 5.2 million, respectively.

Lease expense for the three and six months ended June 30, 2025 was $ 4.5 million and $ 9.4 million, respectively, compared to $ 4.3 million and $ 9.5 million for the three and six months ended June 30, 2024, respectively.

These costs are primarily related to long-term operating leases but also include amounts for short-term leases with terms greater than 30 days that are not material.

Cash paid for amounts included in the present value of operating lease liabilities during the three months ended March 31, 2025, and 2024, was $ 4.7 million and $ 4.8 million, respectively, and is included in operating cash flows.

Cash paid for amounts included in the present value of operating lease liabilities during the three and six months ended June 30, 2025, was $ 4.8 million and $ 9.4 million, respectively, compared to $ 3.7 million and $ 8.2 million for the three and six months ended June 30, 2024, respectively, and is included in operating cash flows.

Loss on leases

1 unchanged sentence

The Company paid a lease termination fee of $ 2.2 million and recorded a loss of $ 2.1 million as a result of this lease termination.

Additionally, in the first quarter of 2024, the Company’s RU Segment began consolidating two Minnesota campuses and recorded a loss of $ 0.8 million on the Minnesota campus lease obligations.

Lease losses on lease termination and campus consolidation totaling $ 2.9 million for the three months ended March 31, 2024, are included in Loss on leases in the accompanying Consolidated Statements of Income.

In conjunction with the lease termination and campus consolidation, the Company reduced Operating lease assets, net, and Lease liabilities, current and long term by $ 5.0 million and $ 4.2 million, respectively, during the three months ended March 31, 2024.

There was no loss on leases during the three months ended March 31, 2025.

Additionally, in the first quarter of 2024, the Company’s RU Segment began consolidating two Minnesota campuses, and, as a result, during the three months ended June 30, 2024, the Company paid a lease termination fee of $ 1.2 million related to the consolidation.

As a result of the consolidation and lease termination, during the three and six months ended June 30, 2024, the Company recorded a loss on leases of $ 0.4 million and $ 1.2 million, respectively.

In May 2024, RU notified the Wisconsin Educational Approval Program that it intends to voluntarily close two Wisconsin campuses, effective December 31, 2025, and 2026, respectively.

As a result, the Company recorded a lease impairment of $ 0.4 million during the three months ended June 30, 2024.

During the three and six months ended June 30, 2024, the total loss on leases was $ 0.8 million and $ 3.7 million, respectively, and is included in Loss on leases in the Consolidated Statements of Income.

There was no loss on leases during the three and six months ended June 30, 2025.

Finance Leases

1 unchanged sentence

The Company pledged the assets financed to secure the outstanding leases.

As of March 31, 2025, the total finance lease liability was $ 0.4 million, with an average interest rate of 7.00 %.

As of June 30, 2025, the total finance lease liability was $ 0.3 million, with an average interest rate of 7.00 %.

The ROU assets are recorded within Property and equipment, net on the accompanying Consolidated Balance Sheets.

Lease amortization expense associated with the Company’s finance leases was $ 46,000 and $ 27,000 for the three months ended March 31, 2025, and 2024, respectively, and is recorded in Depreciation and amortization expense in the accompanying Consolidated Statements of Income.

The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of March 31, 2025 (in thousands):

Lease amortization expense associated with the Company’s finance leases was $ 0.1 million for both the three and six months ended June 30, 2025, and 2024, and is recorded in Depreciation and amortization expense in the accompanying Consolidated Statements of Income.

The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of June 30, 2025 (in thousands):

Maturity of Lease Liabilities (Unaudited) Operating Leases Finance Leases

25 unchanged sentences

Goodwill and Intangible Assets

During the three months ended March 31, 2025, in connection with the preparation of this Quarterly Report, the Company performed a qualitative assessment for potential impairment of the RU and HCN Segment goodwill and indefinite-lived intangible assets.

During the three months ended June 30, 2025, in connection with the preparation of this Quarterly Report, the Company performed a qualitative assessment for potential impairment of the RU and HCN Segment goodwill and indefinite-lived intangible assets.

As part of the assessment, the Company considered the events and circumstances expressly required by ASC 350, in addition to other entity-specific factors.

5 unchanged sentences

Impairment — — — $ —

Goodwill as of March 31, 2025 $ — $ 33,030 $ 26,563 $ 59,593

Goodwill and indefinite-lived intangible assets are reviewed for impairment annually and when an event occurs or circumstances change such that it is more likely than not that an impairment may exist.

Goodwill as of June 30, 2025 $ — $ 33,030 $ 26,563 $ 59,593

Goodwill and indefinite-lived intangible assets are reviewed for impairment annually, or more frequently if events or circumstances indicate that goodwill might be impaired or the carrying amount of an asset may not be recoverable.

The Company’s annual assessment during the fourth quarter of 2024 concluded that the fair value of RU and HCN exceeded their carrying values by approximately $ 71.9 million, or 62 %, and $ 8.6 million, or 24 %, respectively.

The following table represents the balance of the Company’s intangible assets as of March 31, 2025, and December 31, 2024 (in thousands):

The following table represents the balance of the Company’s intangible assets as of June 30, 2025, and December 31, 2024 (in thousands):

Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount

18 unchanged sentences

Finite-lived intangible assets were amortized in a manner that reflected the estimated economic benefit of the intangible assets and were amortized on a straight-line basis.

For the three months ended March 31, 2024, the Company recorded amortization expense related to definite-lived intangible assets of approximately $ 1.3 million.

For the three and six months ended June 30, 2024, the Company recorded amortization expense related to definite-lived intangible assets of approximately $ 1.3 million and $ 2.5 million, respectively.

For additional information on goodwill and intangible assets, see the Consolidated Financial Statements and accompanying notes in the Annual Report.

Income (Loss) Per Common Share

Income (loss) per common share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

Net income (loss) available to common stockholders is net income (loss) adjusted for preferred stock dividends declared.

Diluted income (loss) per common share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding, increased by the shares used in the per share calculation by the dilutive effects of restricted stock and option awards.

The table below reflects the calculation of income (loss) per common share and the weighted average

number of common shares outstanding, on an as if converted basis, used in computing basic and diluted income (loss) per common share (in thousands, expect per share amounts).

Three Months Ended March 31,

Income (loss) per common share

Net income (loss) $ 8,893 516

(Loss) Income Per Common Share

(Loss) income per common share is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding during the period.

Net (loss) income available to common stockholders is net (loss) income adjusted for preferred stock dividends declared and loss on redemptions of preferred stock.

Diluted (loss) income per common share is calculated by dividing net (loss) income available to common stockholders by the weighted average number of shares of common stock outstanding, increased by the shares used in the per share calculation by the dilutive effects of restricted stock and option awards.

The table below reflects the calculation of (loss) income per common share and the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted (loss) income per common share (in thousands, expect per share amounts).

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(Unaudited) (Unaudited)

(Loss) income per common share

Net income $ 4,496 $ 371 $ 13,389 $ 887

Preferred stock dividend 1,319 1,531 2,751 3,066

Net income (loss) available to common shareholders 7,461 ( 1,019 )

Loss on redemption of preferred stock 3,501 — 3,501 —

Net (loss) income available to common shareholders $ ( 324 ) $ ( 1,160 ) $ 7,137 $ ( 2,179 )

Basic weighted average shares outstanding 18,034 17,627 17,937 17,568

Income (loss) per common share $ 0.42 $ ( 0.06 )

Diluted income (loss) per common share

Net income (loss) available to common shareholders $ 7,461 $ ( 1,019 )

(Loss) income per common share $ ( 0.02 ) $ ( 0.07 ) $ 0.40 $ ( 0.12 )

Diluted (loss) income per common share

Net (loss) income available to common shareholders $ ( 324 ) $ ( 1,160 ) $ 7,137 $ ( 2,179 )

Basic weighted average shares outstanding 18,034 17,627 17,937 17,568

1 unchanged sentence

Diluted weighted average shares outstanding 18,597 18,134 18,496 17,986

Diluted income (loss) per common share $ 0.41 $ ( 0.06 )

The table below reflects a summary of securities that could potentially dilute basic income (loss) per common share in future periods that were not included in the computation of diluted loss per share because the effect would have been antidilutive (in thousands).

Three Months Ended March 31,

Diluted (loss) income per common share $ ( 0.02 ) $ ( 0.06 ) $ 0.39 $ ( 0.12 )

The table below reflects a summary of securities that could potentially dilute basic (loss) income per common share in future periods that were not included in the computation of diluted loss per share because the effect would have been antidilutive (in thousands).

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(Unaudited) (Unaudited)

Antidilutive securities:

9 unchanged sentences

Deferred financing fees are being amortized using the effective interest method over the term of the Term Loan.

As of March 31, 2025, and December 31, 2024, the remaining unamortized deferred financing fees were $ 2.7 million and $ 3.0 million, respectively.

As of June 30, 2025, and December 31, 2024, the remaining unamortized deferred financing fees were $ 2.4 million and $ 3.0 million, respectively.

Deferred financing fees of $ 0.5 million related to the Revolving Credit Facility were recorded as an asset and are being amortized to interest expense over the term of the Revolving Credit Facility.

There were no borrowings outstanding under the Revolving Credit Facility as of March 31, 2025, and December 31, 2024.

In June 2023, in connection with the cessation of publication of the London Interbank Offered Rate, or LIBOR, the Credit Agreement was amended to change the applicable floating index rate at which interest on borrowings under the Facilities

would accrue from LIBOR to Term Secured Overnight Financing Rate, or Term SOFR (as defined in the Credit Agreement, as amended), a forward-looking term rate.

Outstanding borrowings under the Facilities bear interest at a per annum rate equal to Term SOFR (plus a credit spread adjustment ranging from 0.11448 % to 0.42826 % depending on the interest period selected by APEI and subject to a 0.75 % floor after giving effect to such adjustment) plus 5.50 %, which shall increase by an additional 2.00 % on all past due obligations if APEI fails to pay any amount when due.

As of March 31, 2025, the Facilities’ borrowing rate was 9.94 %.

There were no borrowings outstanding under the Revolving Credit Facility as of June 30, 2025, and December 31, 2024.

Outstanding borrowings under the Facilities bear interest at a per annum rate equal to Term Secured Overnight Financing Rate, or Term SOFR, plus 5.50 % (plus a credit spread adjustment ranging from 0.11448 % to 0.42826 % depending on the interest period selected by APEI), and subject to a 0.75 % floor after giving effect to such adjustment, which shall

increase by an additional 2.00 % on all past due obligations if APEI fails to pay any amount when due.

As of June 30, 2025, the Facilities’ borrowing rate was 9.94 %.

An unused commitment fee in the amount of 0.50 % is payable quarterly in arrears based on the average daily unused amount of the commitments under the Revolving Credit Facility.

Interest expense, including offsets from the interest rate cap agreement in 2024 was $ 2.4 million and $ 1.9 million for the three months ended March 31, 2025, and 2024, respectively.

Interest expense, including offsets from the interest rate cap agreement in 2024 was $ 2.4 million and $ 4.8 million for the three and six months ended June 30, 2025, respectively, compared to $ 1.9 million and $ 3.9 million for the three and six months ended June 30, 2024, respectively.

In December 2022, APEI made prepayments totaling $ 65.0 million on the Term Loan.

With this prepayment, APEI is not required to make quarterly principal payments on the Term Loan until payment of the outstanding principal amount at maturity in September 2027, subject to certain exceptions, including with respect to annual excess cash flows, proceeds from the sale of certain assets, casualty and condemnation events, and prohibited debt issuances.

APEI had no mandatory prepayment obligation for the year ended December 31, 2024.

APEI had no mandatory prepayment obligation for the year ended December 31, 2024, and no mandatory prepayment obligation related to the sale of assets held for sale in 2025.

The Facilities are and will be guaranteed by APEI’s subsidiaries and certain of APEI’s future subsidiaries that are required to become a party thereto as guarantors, or Guarantors.

The obligations of APEI and the Guarantors are secured by a pledge of substantially all of their respective assets, pursuant to the terms of the Collateral Agreement dated as of the RU Closing Date, by and among APEI, the Agent and the Guarantors from time to time party thereto.

Effective May 2025, GSUSA was removed as a Guarantor under the Credit Agreement.

The Credit Agreement contains customary affirmative and negative covenants, including limitations on APEI’s and its subsidiaries’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, and enter into affiliate transactions, in each case, subject to certain exceptions, as well as customary representations, warranties, events of default, and remedies upon default, including acceleration and rights to foreclose on the collateral securing the Facilities.

In addition, the Credit Agreement contains a financial covenant that requires APEI to maintain a Total Net Leverage Ratio of no greater than 2.00 to 1.00.

As of March 31, 2025, the Company was in compliance with all debt covenants.

For additional information on certain restrictions placed on the Company’s indebtedness pursuant to the terms of the Company’s Series A Senior Preferred Stock, please refer to “Note 12.

Preferred Stock” in these Consolidated Financial Statements.

Long-term debt consists of the following as of March 31, 2025, and December 31, 2024 (in thousands):

As of March 31, 2025 As of December 31, 2024

As of June 30, 2025, the Company was in compliance with all debt covenants.

For additional information on certain restrictions placed on the Company’s indebtedness pursuant to the terms of the Company’s Series A Senior Preferred Stock prior to the redemption on June 23, 2025, please refer to “Note 12.

Preferred Stock” to the Consolidated Financial Statements.

Long-term debt consists of the following as of June 30, 2025, and December 31, 2024 (in thousands):

As of June 30, 2025 As of December 31, 2024

Credit agreement $ 96,425 $ 96,425

3 unchanged sentences

Long-Term Debt $ 94,062 $ 93,424

Scheduled maturities of long-term debt as of March 31, 2025, are as follows (in thousands):

Scheduled maturities of long-term debt as of June 30, 2025, are as follows (in thousands):

Maturities of Long-Term Debt (Unaudited) Loan Payments

4 unchanged sentences

On September 30, 2021, the Company entered into an interest rate cap agreement to manage its exposure to the variable rate of interest with a total notional value of $ 87.5 million.

This interest rate cap agreement, designated as a cash flow hedge, provided the Company with interest rate protection in the event the LIBOR rate exceeded 2.0 %.

The interest rate cap was effective October 1, 2021, and was scheduled to expire on January 1, 2025.

In connection with cessation of publication of LIBOR, the Company terminated its existing interest rate cap agreement and entered into a new interest rate cap agreement that transitioned the benchmark rate to Term SOFR, effective June 30, 2023.

The new interest rate cap agreement was structured in a way that there was no change in the value to the Company and provided the Company with interest rate protection in the event that the Term SOFR rate exceeded 1.78 %.

The interest rate cap agreement expired on December 31, 2024.

On June 30, 2023, in connection with the transition of the benchmark rate to Term SOFR, the Company entered into a new interest rate cap agreement, designated as a cash flow hedge, in the same notional value, to provide the Company with interest rate protection in the event that the Term SOFR rate exceeded 1.78 %.

The interest rate cap agreement expired on January 1, 2025.

In January 2025, the Company entered into a new interest rate cap agreement, with a notional value of $ 50.0 million.

This new interest rate cap agreement, designated as a cash flow hedge, provides the Company with interest rate protection in the event that the Term SOFR rate exceeds 5.00 %, and is scheduled expire on June 30, 2026.

Changes in the fair value of the interest rate cap designated as a hedging instrument that effectively offset the variability of cash flows associated with the Company’s variable-rate long-term debt obligations are reported in accumulated other comprehensive income.

2 unchanged sentences

The Company’s Chief Executive Officer, as the chief operating decision maker, or CODM, organizes the company, manages resource allocations, and measures performance among three operating and reportable segments:

APUS, RU, and HCN.

Corporate and Other includes GSUSA revenue and expenses, and unallocated corporate activity and eliminations to reconcile segment results to the Consolidated Financial Statements.

3 unchanged sentences

A summary of financial information by reportable segment is as follows (in thousands):

Three Months Ended March 31,

(In thousands)

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands) (In thousands)

Revenue 81,731 77,048 165,677 157,704

2 unchanged sentences

General and administrative 14,808 14,724 29,042 30,078

1,018 1,263 3,592 2,506

Income from operations before interest and income taxes 21,442 18,291 45,568 41,378

3 unchanged sentences

General and administrative 7,635 8,021 15,025 15,658

2,152 4,246 4,489 10,491

Loss from operations before interest and income taxes ( 1,976 ) ( 8,826 ) ( 2,048 ) ( 17,792 )

3 unchanged sentences

General and administrative 4,699 4,355 9,359 9,128

533 365 1,038 687

Loss from operations before interest and income taxes ( 402 ) ( 744 ) ( 1,148 ) ( 1,048 )

4 unchanged sentences

General and administrative 11,005 7,326 21,128 15,839

420 321 753 603

Loss from operations before interest and income taxes ( 12,039 ) ( 6,501 ) ( 23,101 ) ( 15,136 )

6 unchanged sentences

(1) Includes loss on assets held for sale, loss on disposal of long-lived assets, and depreciation and amortization expense.

(2) Includes loss on disposal of long-lived assets and depreciation and amortization expense.

(2) Includes loss on disposal of long-lived assets, loss on leases (in 2024), and depreciation and amortization expense.

(3) Includes depreciation and amortization expense.

Three Months Ended March 31,

(In thousands)

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands) (In thousands)

Depreciation and amortization

32 unchanged sentences

A summary of APUS Segment revenue derived from students by primary funding source is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Unaudited) (Unaudited)

2025 2024 2025 2024

DoD tuition assistance programs 43 % 45 % 44 % 47 %

3 unchanged sentences

A summary of RU Segment revenue derived from students by primary funding source is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Unaudited) (Unaudited)

2025 2024 2025 2024

Title IV programs 78 % 76 % 77 % 76 %

2 unchanged sentences

A summary of HCN Segment revenue derived from students by primary funding source is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(Unaudited) (Unaudited)

2025 2024 2025 2024

Title IV programs 85 % 83 % 85 % 83 %

2 unchanged sentences

Preferred Stock

On December 28, 2022, APEI issued $ 40 million of the Series A Senior Preferred Stock, $ 0.01 par value per share, to affiliates of existing common stockholders of the Company.

The Series A Senior Preferred Stock has cumulative dividends that accrue daily at the annual rate which is equal to Term SOFR (selected by the Company for each divided period), plus 10.00 %.

On the 30-month anniversary of issuance, the dividend rate spread shall increase by 2.00 % per annum and shall increase by 0.50 % per annum at the beginning of each full fiscal quarter thereafter.

The dividend rate spread increases 6.00 % in the event of default, a change of control, or other non-compliance as noted in the related Certificate of Designation and the purchase agreement for the shares of Series A Senior Preferred Stock, or the Purchase Agreement.

Other than an increase in the dividend rate spread relating to default, in no event will the dividend rate spread exceed SOFR plus 25.00 %.

As of March 31, 2025, the dividend rate was 14.32 % based on a three-month dividend period.

Dividend periods will be monthly, every three months or every six months , at the Company’s option, and the Company currently anticipates using a three-month period.

Dividends will be paid, after declaration by the Board, for each dividend period.

If the Company selects a six-month dividend period, an interim dividend payment will be required for each three-month period therein.

During the three months ended March 31, 2025, and 2024, dividends declared and paid on the Series A Senior Preferred Stock were $ 1.4 million and $ 1.5 million, respectively.

The Series A Senior Preferred Stock has no stated maturity, is not convertible, is not subject to any mandatory redemption, sinking fund or other similar provisions, and will remain outstanding unless redeemed at the Company’s option.

The Company has the right to redeem the Series A Senior Preferred Stock pro rata in whole or in part at the price per share equal to the liquidation preference, or the Liquidation Preference, plus any applicable early premium amount noted in the Certificate of Designation and Purchase Agreement.

The Liquidation Preference of $ 45.0 million and $ 47.0 million as of March 31, 2025, and December 31, 2024, respectively, is based on the occurrence of a liquidation event, which is also considered an event of default as defined in the Certificate of Designation.

The Liquidation Preference includes an early redemption premium amount and a make-whole payment for any redemption of the securities prior to June 30, 2025.

As of March 31, 2025, and December 31, 2024, the make-whole payment included in the Liquidation Preference was $ 2.0 million and $ 4.0 million, respectively.

The make-whole payment included in the Liquidation Preference will be reduced quarterly until June 30, 2025, at which time it will be eliminated.

Events of default trigger an increase of the dividend rate spread of 6.00 % and an early premium amount, as defined in the Certificate of Designation.

The following table lists the components of the liquidation preference for the periods presented below (in thousands):

As of March 31, 2025 As of December 31, 2024

On December 28, 2022, APEI issued $ 40 million of the Series A Senior Preferred Stock, $ 0.01 par value per share, or Series A Senior Preferred Stock, to affiliates of existing common stockholders of APEI.

On June 23, 2025 (the “Redemption Date”), APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $ 43.1 million, including an early redemption premium of $ 3.1 million, and excluding $ 1.4 million in accrued and unpaid dividends.

The loss on redemption of $ 3.5 million was calculated as the difference between the consideration paid, excluding dividends, and the book value of $ 39.6 million, and was recorded as a reduction to net income available to common stockholders in the accompanying Consolidated Statements of Income for the three months ended June 30, 2025.

No shares of preferred stock were issued or outstanding at June 30, 2025.

On the Redemption Date, APEI also filed a Certificate of Elimination to its Fifth Amended and Restated Certificate of Incorporation (the “Charter”) with the Secretary of State of the State of Delaware eliminating from the Charter all matters set forth in the Certificate of Designation with respect to the Series A Senior Preferred Stock.

Prior to the Redemption Date, the Series A Senior Preferred Stock had cumulative dividends that accrued daily at the annual rate which was equal to Term SOFR (selected by the Company for each divided period), plus 10.00 %, and dividends were paid, after declaration by the Board, for each dividend period.

During the three and six months ended June 30, 2024, dividends declared and paid on the Series A Senior Preferred Stock were $ 1.5 million and $ 3.0 million, respectively.

As of December 31, 2024, the liquidation preference of $ 47.0 million was based on the occurrence of a liquidation event, which was also considered an event of default as defined in the Certificate of Designation and included an early redemption premium amount and a make-whole payment.

As of December 31, 2024, the make-whole payment included in the liquidation preference was $ 4.0 million, which was reduced quarterly.

The following table lists the components of the liquidation preference as of December 31, 2024 (in thousands):

Liquidation Amount

Series A Senior Preferred Stock (plus accrued and unpaid dividends) $ 40,068

1 unchanged sentence

Early redemption premium 2,915

Liquidation Preference $ 44,988 $ 46,976

The Series A Senior Preferred Stock has no voting rights for directors or otherwise, except as required by law or with respect to certain protective provisions.

Without the consent of at least 60 % of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, the Company may not, among other things, (i) incur any indebtedness if such incurrence would cause the Company’s Total Net Leverage Ratio (as defined in the Purchase Agreement) to exceed 0.75 :1, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on the Company’s common stock, or (iv) repurchase more than an aggregate of $ 30 million of the Company’s common stock.

Liquidation amount $ 46,976

The Series A Senior Preferred Stock had no voting rights for directors or otherwise, except as required by law or with respect to certain protective provisions.

Without the consent of at least 60 % of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, the Company could not, among other things, (i) incur any indebtedness if such incurrence would cause the Company’s Total Net Leverage Ratio (as defined in the Purchase Agreement) to exceed 0.75 :1, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on the Company’s common stock, or (iv) repurchase more than an aggregate of $ 30 million of the Company’s common stock.

Subsequent Event

On July 10, 2025, APEI entered into a definitive agreement to sell all its membership interest in GSUSA for $ 0.5 million, subject to customary adjustments, including for net working capital and cash.

The sale was completed on July 25, 2025, and is expected to result in a loss on sale between $ 7.0 million and $ 8.5 million, subject to post-close adjustments for working capital and cash .

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements