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Item 1. Financial Statements

2025-11-10 compared with 2025-08-06 · 135 added, 137 removed, 556 unchanged (33% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

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

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

ASSETS (Unaudited)

43 unchanged sentences

(In thousands, except per share amounts)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

6 unchanged sentences

Depreciation and amortization 3,946 5,080 12,026 15,440

Loss on sale of subsidiary (Note 2) 3,877 — 3,877 —

Loss on assets held for sale (Note 4) — — 1,527 —

5 unchanged sentences

Income before income taxes 8,628 3,498 25,904 9,989

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

Income tax expense 3,068 1,236 6,955 2,433

Equity investment loss — — — ( 4,407 )

2 unchanged sentences

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

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

(Loss) income per common share:

Net income (loss) available to common stockholders $ 5,560 $ 731 $ 12,697 $ ( 1,448 )

Income (loss) per common share:

Basic $ 0.31 $ 0.04 $ 0.71 $ ( 0.08 )

7 unchanged sentences

(In thousands)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

33 unchanged sentences

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

Other comprehensive loss — — — — — 20 — 20

Other comprehensive income — — — — — 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

Exercise of stock options — — 5,086 — 107 — — 107

Issuance of common stock under employee benefit plans — — 20,409 2 ( 2 ) — — —

Deemed repurchased shares of common and restricted stock for tax withholding — — ( 6,882 ) ( 1 ) ( 205 ) — — ( 206 )

Stock-based compensation — — — — 1,634 — — 1,634

Other comprehensive income — — — — — 1 1

Net income — — — — — — 5,560 5,560

Balance as of September 30, 2025 — — 18,080,212 $ 181 $ 308,290 $ ( 27 ) $ ( 29,108 ) $ 279,336

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

22 unchanged sentences

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

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

Issuance of common stock under employee benefit plans — — 46,511 — — — — —

Deemed repurchased shares of common and restricted stock for tax withholding — — ( 5,650 ) — ( 92 ) — — ( 92 )

Stock-based compensation — — — — 1,761 — — 1,761

Other comprehensive loss — — — — — ( 677 ) ( 677 )

Net income — — — — — — 2,262 2,262

Balance as of September 30, 2024 400 39,691 17,710,887 177 303,670 190 ( 53,310 ) 290,418

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

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

8 unchanged sentences

Loss on disposals of long-lived assets 357 235

Loss on sale of subsidiary 2,764 —

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses ( 990 ) ( 4,651 )

Income tax receivable/payable ( 1,547 ) ( 3,605 )

Income tax receivable ( 6,683 ) ( 4,886 )

Operating leases, net ( 364 ) 2,997

6 unchanged sentences

Investing activities

Cash outlay from the sale of subsidiary ( 709 ) —

Capital expenditures ( 11,796 ) ( 17,728 )

18 unchanged sentences

Nature of the Business

American Public Education, Inc., or APEI, which together with its subsidiaries is referred to as the “Company,” is a provider of online and campus-based postsecondary education and career learning to students through the following subsidiary institutions:

American Public Education, Inc., or APEI, which together with its subsidiaries is referred to as the “Company,” is a provider of online and campus-based postsecondary education to students through the following subsidiary institutions:

• American Public University System, Inc., or APUS, provides online postsecondary education directed primarily at the needs of the military, veterans, extended military families, and other public service and service-minded communities, through American Military University, or AMU, and American Public University, or APU.

5 unchanged sentences

• American Public Training LLC, which is referred to herein as Graduate School USA, or GSUSA, provides career learning and leadership training in-person and online to the federal workforce.

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.

On July 25, 2025, or the GSUSA Sale Date, APEI completed the sale of its membership interest in GSUSA;

therefore, the Consolidated Balance Sheet as of September 30, 2025, no longer includes the accounts of GSUSA.

The accompanying Consolidated Financial Statements include the operations of GSUSA through the GSUSA Sale Date in Corporate and Other.

Please refer to “Note 2.

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.

Summary of Significant Accounting Policies” for more information on APEI’s sale of its membership interest in GSUSA.

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 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.

The Company’s operations are organized into the following reportable segments:

6 unchanged sentences

Adjustments to reconcile segment results to the Consolidated Financial Statements are included in Corporate and Other.

These adjustments include unallocated corporate activity and eliminations, and the operational activities of GSUSA.

GSUSA operates as a stand-alone subsidiary of APEI but does not meet the quantitative thresholds to qualify as a reportable segment and does not have other requisite characteristics as a reportable segment.

Therefore, GSUSA’s results are combined with and presented within Corporate and Other.

These adjustments include unallocated corporate activity and eliminations, and, prior to the GSUSA Sale Date, the operational activities of GSUSA.

Prior to the GSUSA Sale Date, GSUSA operated as a stand-alone subsidiary of APEI but did not meet the quantitative thresholds to qualify as a reportable segment and did not have other requisite characteristics as a reportable segment.

Therefore, GSUSA’s results prior to the GSUSA Sale Date were combined with and presented within Corporate and Other.

Please refer to “Note 9.

7 unchanged sentences

Under ASC 805, the assets and liabilities of an acquired company are reported at business fair value along with the fair value of acquired intangible assets at the date of acquisition.

Business Divestitures

The Company accounts for business divestitures in accordance with FASB ASC 810, Consolidation.

On the GSUSA Sale Date, APEI completed the sale of its membership interest in its wholly owned subsidiary, GSUSA, for $ 0.5 million, subject to customary adjustments, including for net working capital and cash, and recorded a $ 3.9 million loss on sale of subsidiary.

Subsequent to the GSUSA Sale Date, APEI has no continuing involvement in GSUSA.

The sale of its membership interest in GSUSA is not considered a significant shift in the strategic focus of APEI, nor is it considered material to APEI’s operations, cash flows, and financial position, and therefore the sale of GSUSA is not accounted for as a discontinued operation.

Principles of Consolidation

18 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.

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.

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

Restricted cash on the accompanying Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, excluding the restricted certificate of deposit at December 31, 2024, was $ 1.8 million and $ 1.5 million, respectively.

Total restricted cash as of September 30, 2025, and December 31, 2024, was $ 1.8 million and $ 27.0 million, respectively.

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

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

Cash, cash equivalents, and restricted cash $ 193,144 $ 158,941

2 unchanged sentences

Assets Held for Sale

Assets held for sale at December 31, 2024 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 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 assets are sold.

As such, the 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.

For additional details regarding assets held for sale, please refer to “Note 4.

Assets Held for Sale” to the Consolidated Financial Statements.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values.

Goodwill and indefinite-lived intangible assets are not amortized.

12 unchanged sentences

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 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.

The Company applied ASC 323 to investments when 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.

The pro rata share of the operating results of the investee was reported in the accompanying Consolidated Statements of Income as equity investment income or loss.

Investments that did not meet the equity method requirements were accounted for using the cost method under ASC 321 with changes in the fair value of the investment reported in the accompanying Consolidated Statements of Income as equity investment income or loss.

Investments that did not meet the equity method requirements were accounted for using the cost method under

ASC 321 with changes in the fair value of the investment reported in the accompanying Consolidated Statements of Income as equity investment income or loss.

During the first quarter of 2024, the Company evaluated its equity investments for indicators of impairment and concluded the fair value of a cost method investment was less than its carrying amount.

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.

2 unchanged sentences

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.

As a result, the Company no longer has any investments accounted for under ASC 323 and ASC 321 as of September 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 and six months ended June 30, 2025, and 2024 was as follows (in thousands):

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

10 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 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.

During the three and nine months ended September 30, 2025, the Company recognized an aggregate incentive-based compensation expense of $ 2.3 million and $ 7.3 million, respectively, compared to an aggregate expense of $ 1.7 million and $ 5.4 million for the three and nine months ended September 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 June 30, 2025

Three Months Ended September 30, 2025

APUS RU HCN Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 83,137 $ 60,830 $ 18,440 $ 808 $ 163,215

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

APUS RU HCN Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 76,981 $ 52,604 $ 15,493 $ 8,044 $ 153,122

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

APUS RU HCN Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 248,814 $ 179,602 $ 54,250 $ 7,866 $ 490,532

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

APUS RU HCN Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 234,685 $ 158,773 $ 48,349 $ 18,642 $ 460,449

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.

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

Contract Balances and Performance Obligations

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 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.

The Company had no contract assets or deferred contract costs as of September 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, or starts a term, in the case of RU and HCN.

Deferred revenue at September 30, 2025, was $ 24.0 million and included $ 15.7 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $ 8.2 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.

9 unchanged sentences

Recoveries of receivables previously written off are recorded when received.

APUS, RU, and GSUSA do not charge interest on past due accounts receivable.

APUS and RU do not charge interest on past due accounts receivable.

HCN charges interest on payment plans when a student graduates or otherwise exits the program.

1 unchanged sentence

Assets Held for Sale

Assets held for sale at December 31, 2024, represented excess real properties 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.

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.

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

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

5 unchanged sentences

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.

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

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

10 unchanged sentences

The Company leases corporate office space in Florida, under an operating lease that expires in January 2029.

The RU Segment leases administrative office space in Minneapolis, Minnesota, and leases 20 campuses located in six states under operating leases that expire through March 2034.

The RU Segment leases 20 campuses located in six states under operating leases that expire through March 2034 and, until October 31, 2025, administrative office space in Minneapolis, Minnesota.

The HCN Segment leases administrative office space in suburban Columbus, Ohio, and leases eight campuses located in three states under operating leases that expire through December 2034.

GSUSA leases classroom and administrative office space in Washington, D.C.

and Honolulu, Hawaii, under operating leases that expire through September 2036.

Prior to the GSUSA Sale Date, GSUSA leased classroom and administrative office space in Washington, D.C.

and Honolulu, Hawaii.

Operating lease assets are right-of-use assets, or ROU assets, which represent the right to use an underlying asset for the lease term.

6 unchanged sentences

There are no variable lease payments.

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.

Lease expense for the three and nine months ended September 30, 2025, was $ 3.9 million and $ 13.3 million, respectively, compared to $ 4.7 million and $ 14.2 million for the three and nine months ended September 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 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.

Cash paid for amounts included in the present value of operating lease liabilities during the three and nine months ended September 30, 2025, was $ 4.3 million and $ 13.8 million, respectively, compared to $ 4.5 million and $ 12.8 million for the three and nine months ended September 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, 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.

As a result, the Company recorded a lease impairment of $ 0.4 million during the three months ended June 30, 2024, and recorded an additional lease impairment of $ 0.1 million during the three months ended September 30, 2025.

The total loss on leases was $ 0.1 million for the three and nine months ended September 30, 2025, and $ 3.7 million for the nine months ended September 30, 2024, and is included in Loss on leases in the Consolidated Statements of Income.

Finance Leases

1 unchanged sentence

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

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

As of September 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 $ 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):

Lease amortization expense associated with the Company’s finance leases was $ 46,000 and $ 0.1 million for the three and nine months ended September 30, 2025, respectively, compared to $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 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 September 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 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.

During the three months ended September 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.

1 unchanged sentence

After completing the qualitative review of goodwill and indefinite-lived intangible assets for the RU and HCN Segments, the Company concluded it was more likely than not that the fair value of each of the RU and HCN Segments was more than the respective carrying value, and therefore, no quantitative impairment test and no impairment charge was necessary.

The following table summarizes the carrying amount of goodwill by reportable segment (in thousands):

APUS Segment RU Segment HCN Segment Total Goodwill

Goodwill as of December 31, 2024 $ — $ 33,030 $ 26,563 $ 59,593

Impairment — — — $ —

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 June 30, 2025, and December 31, 2024 (in thousands):

Gross Carrying Amount Accumulated Amortization Impairment Net Carrying Amount

Finite-lived intangible assets

Student roster $ 20,000 $ 20,000 $ — $ —

14,563 14,563 — —

Student and customer contracts and relationships 4,614 4,614 — —

Lead conversions 1,500 1,500 — —

Non-compete agreements

Tradename 35 35 — —

Accreditation and licenses 28 28 — —

Total finite-lived intangible assets $ 40,826 $ 40,826 $ — $ —

Indefinite-lived intangible assets

28,498 — 8,000 20,498

Accreditation, licensing, and Title IV 26,186 — 18,500 7,686

Affiliation agreements 37 — — 37

Total indefinite-lived intangible assets

54,721 — 26,500 28,221

Total intangible assets

$ 95,547 $ 40,826 $ 26,500 $ 28,221

All recorded identified intangible assets with a definite useful life related to the acquisitions of RU, HCN, and GSUSA, were fully amortized as of December 31, 2024.

All recorded identified intangible assets with a definite useful life were fully amortized as of December 31, 2024.

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 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 the three and nine months ended September 30, 2024, the Company recorded amortization expense related to definite-lived intangible assets of approximately $ 0.8 million and $ 3.3 million, respectively.

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

(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,

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 and loss on redemptions of preferred stock.

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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

(Unaudited) (Unaudited)

(Loss) income per common share

Income (loss) per common share

Net income $ 5,560 $ 2,262 $ 18,949 $ 3,149

1 unchanged sentence

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

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

Net income (loss) available to common shareholders $ 5,560 $ 731 $ 12,697 $ ( 1,448 )

Basic weighted average shares outstanding 18,070 17,679 17,982 17,604

(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 )

Income (loss) per common share $ 0.31 $ 0.04 $ 0.71 $ ( 0.08 )

Diluted income (loss) per common share

Net income (loss) available to common shareholders $ 5,560 $ 731 $ 12,697 $ ( 1,448 )

Basic weighted average shares outstanding 18,070 17,679 17,982 17,604

1 unchanged sentence

Diluted weighted average shares outstanding 18,755 18,247 18,596 18,076

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,

Diluted income (loss) per common share $ 0.30 $ 0.04 $ 0.68 $ ( 0.08 )

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 income (loss) per share because the effect would have been antidilutive (in thousands).

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

11 unchanged sentences

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

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

As of September 30, 2025, and December 31, 2024, the remaining unamortized deferred financing fees were $ 2.1 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 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 %.

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

As of September 30, 2025, the Facilities’ borrowing rate was 9.93 %.

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 $ 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.

Interest expense, including offsets from the interest rate cap agreement in 2024, was $ 2.5 million and $ 7.3 million for the three and nine months ended September 30, 2025, respectively, compared to $ 1.9 million and $ 5.8 million for the three and nine months ended September 30, 2024, respectively.

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

3 unchanged sentences

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

As of September 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

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

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

Credit agreement $ 96,425 $ 96,425

3 unchanged sentences

Long-Term Debt $ 94,368 $ 93,424

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

Scheduled maturities of long-term debt as of September 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.

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 %.

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, with 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.

6 unchanged sentences

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.

GSUSA does not meet the quantitative thresholds to qualify as a reportable segment.

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

GSUSA did not meet the quantitative thresholds to qualify as a reportable segment.

The CODM reviews information about each reportable segment’s revenue and categorized expenses, and allocates resources to, and measures the performance of, each reportable segment using reportable segment operating income (loss).

1 unchanged sentence

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

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

32 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, loss on leases (in 2024), and depreciation and amortization expense.

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

(3) Includes depreciation and amortization expense.

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

(4) Includes loss on sale of subsidiary and depreciation and amortization expense.

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

34 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(Unaudited) (Unaudited)

5 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(Unaudited) (Unaudited)

4 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(Unaudited) (Unaudited)

4 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, 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.

On December 28, 2022, APEI issued 400 shares 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 for an aggregate purchase price of $ 40.0 million.

On June 23, 2025, or 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.

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

On the Redemption Date, APEI also filed a Certificate of Elimination to its Fifth Amended and Restated Certificate of Incorporation, or 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

Make whole payment 3,993

Early redemption premium 2,915

Liquidation amount $ 46,976

There were no preferred stock dividends declared or paid during the three months ended September 30, 2025, as the Series A Senior Preferred Stock had been redeemed prior to the period.

During the nine months ended September 30, 2025, dividends declared and paid on the Series A Senior Preferred Stock were the $ 1.4 million declared and paid during three months ended March 31, 2025.

The redemption of the Series A Senior Preferred Stock also included payment of $ 1.4 million in accrued and unpaid preferred stock dividends, which was paid during the three months ended June 30, 2025.

During the three and nine months ended September 30, 2024, dividends declared and paid on the Series A Senior Preferred Stock were $ 1.5 million and $ 4.6 million, respectively.

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.

1 unchanged sentence

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 .

Management Transition

Effective October 20, 2025, the Company appointed Edward H.

Codispoti as Chief Financial Officer.

The Company’s former Chief Financial Officer, Richard W.

Sunderland, Jr., is anticipated to remain a non-executive employee of the Company until his expected departure in the first quarter of 2026.

The Company expects to record approximately $ 0.8 million in termination benefits in the fourth quarter of 2025 in connection with Mr.

Sunderland’s departure.

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