AMERICAN PUBLIC EDUCATION INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS American Public Education, Inc. and Subsidiaries Page American Public Education, Inc. and Subsidiaries: Report of Independent Registered Public Accounting Firm (PCAOB ID 34 ) 102 Consolidated Balance Sheets as of December 31, 2024 and 2025 104 Consolidated Statements of Income for the years ended December 31, 2023, 2024, and 2025 105 Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2024, and 2025 106 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023, 2024, and 2025 107 Consolidated Statements of Cash Flows for the years ended December 2023, 2024 and 2025 108 Notes to Consolidated Financial Statements 109 101 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of American Public Education, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of American Public Education, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes and the schedule listed in the Index at Item 15(c) (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 12, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill and Intangible Assets — Rasmussen University Reporting Unit — Refer to Notes 2 and 6 to the financial statements. Critical Audit Matter Description In connection with the Company’s September 1, 2021, acquisition of Rasmussen University (“RU”), the Company recorded $217.4 million of goodwill, representing the excess of the purchase price over the amount assigned to new assets acquired, and indefinite-lived intangible assets with an initial fair value of $51.0 million. During the fiscal year ended December 31, 2022, the Company recorded non-cash impairment charges of $131.4 million and $15.5 million, reducing the carrying values of the RU goodwill and indefinite-lived intangible assets to $86.0 million and $35.5 million, respectively. During December 31, 2023, the Company recorded non-cash impairment charges of $53 million and $11 million, reducing the carrying values of RU goodwill and indefinite-lived intangible assets to $33.0 million and $24.5 million, respectively. The Company annually assesses goodwill and indefinite-lived intangible assets, or more frequently if events and circumstances indicate that the estimated fair value may no longer exceed its carrying value. Such factors considered in the Company’s assessment include, but are not limited to, enrollment trends, financial performance, macroeconomic conditions, regulatory environment, as well as industry and market considerations. When a quantitative impairment test is performed, if the fair value 102 of the reporting unit or indefinite-lived intangible assets is less than its carrying amount, an impairment loss is recorded for the excess of the carrying value over the fair value. During the fourth quarter of 2025, the Company completed their annual assessment of goodwill and indefinite-lived intangibles for the RU reporting unit. The annual assessment concluded that the fair value of goodwill and indefinite-lived intangibles for RU exceeded their carrying value, thereby resulting in no impairment loss. Given the significant estimates and assumptions made by management to estimate the fair value of the RU reporting unit, including the fair value of indefinite-lived intangible assets, and the sensitivity of the estimated fair value to changes in those estimates and assumptions, performing audit procedures to evaluate the reasonableness of management's estimates and assumptions utilized in its impairment assessment, particularly the prospective financial information, growth rates, terminal value, discount rates, comparable multiples from publicly traded companies in the higher education market, forecasts of future revenue, the EBITDA margin, and the selection of the royalty rate, required a high degree of auditor judgment and an increased extent of effort, including the need to involve fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures included evaluating management's fair value estimate and significant assumptions, forecasts of future revenue, EBITDA margin, discount rate and royalty rate used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Our audit procedures related to the revenue projections, EBITDA margin, discount rate and royalty rate included the following, among others: • We tested the effectiveness of controls over management’s goodwill and indefinite-live intangible assets impairment evaluation, including those over the determination of the fair value of the RU reporting unit, such as controls related to management’s forecasts of future revenues, EBITDA margin, the selection of the discount rate and selection of the royalty rate. • We evaluated the reasonableness of management’s revenue and EBITDA margin forecasts by comparing management’s forecasts to: ◦ historical results; ◦ prior forecasts; ◦ internal communications to the Company’s management and the board of directors; and ◦ forecasted information included in the Company’s press releases as well as in analyst and industry reports of the Company and companies in its peer group. • We considered the impact of changes in the regulatory environment on management’s forecasts, as well as the Company’s historical enrollments and revenues. • We evaluated the impact of changes in management’s forecasts from the previous annual impairment test date of October 31, 2024, and the annual impairment test date of October 31, 2025. • With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, discount rate, long term growth rate, comparable multiples from publicly traded companies in the higher education market and royalty rates used by testing the underlying source information, the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rate and royalty rate selected by management. • We evaluated the work of management’s expert as audit evidence and assessed the level of knowledge, skill, and ability of the expert in the particular field. • We compared the carrying value for the reporting unit and indefinite-lived intangible assets to amounts recorded by the Company. /s/ Deloitte & Touche LLP McLean, Virginia March 12, 2026 We have served as the Company's auditor since 2018. 103 AMERICAN PUBLIC EDUCATION, INC. Consolidated Balance Sheets As of December 31, 2024 2025 (In thousands, except per share amounts) Assets Current assets: Cash, cash equivalents, and restricted cash (Note 2) $ 158,941 $ 176,499 Accounts receivable, net of allowance of $ 19,280 in 2024 and $ 21,113 in 2025 62,465 65,662 Prepaid expenses 13,748 14,197 Income tax receivable 949 3,458 Assets held for sale (Note 5) 24,469 — Total current assets 260,572 259,816 Property and equipment, net 73,383 70,598 Operating lease assets, net 94,776 57,686 Deferred income taxes 47,311 39,176 Intangible assets, net 28,221 28,221 Goodwill 59,593 59,593 Other assets, net 6,247 6,328 Total assets $ 570,103 $ 521,418 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 7,847 $ 4,822 Accrued compensation and benefits 20,546 22,463 Accrued liabilities 13,735 13,375 Deferred revenue and student deposits 23,474 23,016 Lease liabilities, current 13,553 11,374 Total current liabilities 79,155 75,050 Lease liabilities, long term 93,645 56,921 Long-term debt, net 93,424 94,665 Total liabilities 266,224 226,636 Commitments and contingencies (Note 13) Stockholders’ equity: Preferred Stock, $ .01 par value; authorized shares – 10,000,000 ; Series A Senior Preferred Stock, 400 shares issued or outstanding in 2024, respectively. ($ 117,439 liquidation preference per share, $ 46,976 in aggregate, for 2024, respectively) (Note 12) 39,691 — Common Stock, $ .01 par value; authorized shares – 100,000,000 ; 17,712,575 issued and outstanding in 2024; 18,125,860 issued and outstanding in 2025 177 181 Additional paid-in capital 305,823 311,119 Accumulated other comprehensive loss ( 7 ) ( 18 ) Accumulated deficit ( 41,805 ) ( 16,500 ) Total stockholders’ equity 303,879 294,782 Total liabilities and stockholders’ equity $ 570,103 $ 521,418 The accompanying notes are an integral part of these consolidated statements. 104 AMERICAN PUBLIC EDUCATION, INC. Consolidated Statements of Income Year Ended December 31, 2023 2024 2025 (In thousands, except per share amounts) Revenue $ 600,545 $ 624,559 $ 648,862 Costs and expenses: Instructional costs and services 292,862 295,703 297,020 Selling and promotional 132,955 128,810 137,252 General and administrative 128,239 141,961 144,582 Depreciation and amortization 27,816 19,303 16,148 Impairment of goodwill and intangible assets 64,000 — — Loss on sale of subsidiary (Note 2) — — 3,877 Loss on assets held for sale (Note 5) 2,425 1,618 1,527 Loss on leases (Note 7) — 3,715 77 Loss on disposals of long-lived assets 554 383 444 Total costs and expenses 648,851 591,493 600,927 (Loss) income from operations before interest and income taxes ( 48,306 ) 33,066 47,935 Interest expense, net ( 4,459 ) ( 2,127 ) ( 4,230 ) (Loss) income from operations before income taxes ( 52,765 ) 30,939 43,705 Income tax (benefit) expense ( 10,715 ) 10,419 12,148 Equity investment loss ( 5,236 ) ( 4,407 ) — Net (loss) income ( 47,286 ) 16,113 31,557 Preferred stock dividends 6,008 6,056 2,751 Loss on redemption of preferred stock — — 3,501 Net (loss) income available to common stockholders $ ( 53,294 ) $ 10,057 $ 25,305 Net (loss) income per common share: Basic $ ( 2.94 ) $ 0.57 $ 1.40 Diluted $ ( 2.93 ) $ 0.55 $ 1.36 Weighted average number of shares outstanding: Basic 18,112 17,625 18,011 Diluted 18,193 18,149 18,660 The accompanying notes are an integral part of these consolidated statements. 105 AMERICAN PUBLIC EDUCATION, INC. Consolidated Statements of Comprehensive Income 2023 2024 2025 (In thousands) Net (loss) income $ ( 47,286 ) $ 16,113 $ 31,557 Other comprehensive (loss) income, net of tax: Unrealized gain (loss) on hedging derivatives 924 839 ( 24 ) Tax effect ( 227 ) ( 207 ) 8 Unrealized gain (loss) on hedging derivatives, net of taxes 697 632 ( 16 ) Reclassifications of (gains) loss to net income ( 2,857 ) ( 3,031 ) 7 Tax effect 702 748 ( 2 ) Reclassifications of (gains) loss to net income, net of taxes ( 2,155 ) ( 2,283 ) 5 Total other comprehensive loss $ ( 1,458 ) $ ( 1,651 ) $ ( 11 ) Comprehensive (loss) income $ ( 48,744 ) $ 14,462 $ 31,546 The accompanying notes are an integral part of these consolidated statements. 106 AMERICAN PUBLIC EDUCATION, INC. Consolidated Statements of Stockholders’ Equity (In thousands, except shares) Additional Paid-In Capital Accumulated Other Comprehensive Income (loss) Retained Earnings (Accumulated Deficit) Total Stockholders’ Equity Preferred Stock Common Stock Shares Amount Shares Amount Balance as of December 31, 2022 400 $ 39,691 18,892,791 $ 189 $ 292,854 $ 3,102 $ 13,891 $ 349,727 Preferred Stock Dividends — — — — — — ( 6,008 ) ( 6,008 ) Issuance of common stock under employee benefit plans — — 319,201 3 ( 3 ) — — — Deemed repurchased shares of common and restricted stock for tax withholding — — ( 91,855 ) ( 1 ) ( 1,030 ) — — ( 1,031 ) Stock-based compensation — — — — 7,740 — — 7,740 Repurchased and retired shares of common stock — — ( 1,515,766 ) ( 15 ) — — ( 9,693 ) ( 9,708 ) Other comprehensive loss — — — — — ( 1,458 ) — ( 1,458 ) Net loss — — — — — — ( 47,286 ) ( 47,286 ) Balance as of December 31, 2023 400 39,691 17,604,371 176 299,561 1,644 ( 49,096 ) 291,976 Preferred Stock Dividends — — — — — — ( 6,056 ) ( 6,056 ) Exercise of stock options — — 5,796 — 67 — — 67 Issuance of common stock under employee benefit plans — — 475,740 4 ( 4 ) — — — Deemed repurchased shares of common and restricted stock for tax withholding — — ( 122,186 ) ( 1 ) ( 1,469 ) — — ( 1,470 ) Stock-based compensation — — — — 7,668 — — 7,668 Repurchased and retired shares of common stock — — ( 251,146 ) ( 2 ) — — ( 2,766 ) ( 2,768 ) Other comprehensive loss — — — ( 1,651 ) — ( 1,651 ) Net income — — — — — — 16,113 16,113 Balance as of December 31, 2024 400 39,691 17,712,575 177 305,823 ( 7 ) ( 41,805 ) 303,879 Preferred Stock Dividends — — — — — — ( 2,751 ) ( 2,751 ) Redemption of preferred stock ( 400 ) ( 39,691 ) — — — — — ( 39,691 ) Loss on redemption of preferred stock — — — — — — ( 3,501 ) ( 3,501 ) Exercise of stock options — — 68,813 — 1,210 — — 1,210 Issuance of common stock under employee benefit plans — — 525,859 5 ( 5 ) — — — Deemed repurchased shares of common and restricted stock for tax withholding — — ( 181,387 ) ( 1 ) ( 4,261 ) — — ( 4,262 ) Stock-based compensation — — — — 8,352 — — 8,352 Other comprehensive loss — — — ( 11 ) — ( 11 ) Net income — — — — — — 31,557 31,557 Balance as of December 31, 2025 — $ — 18,125,860 $ 181 $ 311,119 $ ( 18 ) $ ( 16,500 ) $ 294,782 The accompanying notes are an integral part of these consolidated statements. 107 AMERICAN PUBLIC EDUCATION, INC. Consolidated Statements of Cash Flows Year Ended December 31, 2023 2024 2025 Operating activities (In thousands) Net (loss) income $ ( 47,286 ) $ 16,113 $ 31,557 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 27,816 19,303 16,148 Amortization and write-off of debt issuance costs 1,631 1,480 1,341 Stock-based compensation 7,740 7,668 8,352 Equity investment loss 5,236 4,407 — Deferred income taxes ( 16,005 ) 4,049 8,135 Loss on assets held for sale 2,425 1,618 1,527 Loss on disposal of long-lived assets 554 383 444 Loss on sale of subsidiary — — 2,550 Impairment of goodwill and intangible assets 64,000 — — Changes in operating assets and liabilities: Accounts receivable, net of allowance for bad debt ( 8,620 ) ( 11,492 ) ( 5,324 ) Prepaid expenses ( 1,623 ) ( 716 ) ( 761 ) Income tax receivable/payable 2,397 ( 475 ) ( 2,509 ) Operating lease assets, net 3,193 2,723 19 Other assets ( 259 ) ( 1,111 ) ( 1,167 ) Accounts payable 4,855 ( 816 ) ( 1,852 ) Accrued compensation and benefits 1,701 3,835 1,926 Accrued liabilities ( 2,311 ) 2,259 ( 275 ) Deferred revenue and student deposits 70 ( 356 ) 1,854 Net cash provided by operating activities 45,514 48,872 61,965 Investing activities Cash outlay from sale of subsidiary — — ( 2,294 ) Capital expenditures ( 13,895 ) ( 21,082 ) ( 15,864 ) Proceeds from the sale of real property 123 — 22,959 Net cash (used in) provided by investing activities ( 13,772 ) ( 21,082 ) 4,801 Financing activities Cash paid for repurchase of common/restricted stock ( 10,739 ) ( 4,238 ) ( 4,262 ) Preferred stock dividends paid ( 6,005 ) ( 6,056 ) ( 2,751 ) Cash received from exercise of stock options — 67 1,210 Cash paid for redemption of preferred stock — — ( 43,192 ) Cash paid for principal on borrowings and finance leases ( 114 ) ( 2,964 ) ( 213 ) Net cash used in financing activities ( 16,858 ) ( 13,191 ) ( 49,208 ) Net increase in cash, cash equivalents, and restricted cash 14,884 14,599 17,558 Cash, cash equivalents, and restricted cash at beginning of period 129,458 144,342 158,941 Cash, cash equivalents, and restricted cash at end of period $ 144,342 $ 158,941 $ 176,499 Supplemental disclosures of cash flow information Interest paid $ 10,603 $ 10,725 $ 9,644 Income taxes paid $ 2,417 $ 6,304 $ 6,516 The accompanying notes are an integral part of these consolidated statements. 108 Notes to Consolidated Financial Statements Note 1. 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 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. APUS is institutionally accredited by the Higher Learning Commission, or HLC. • Rasmussen College, LLC, which is referred to herein as Rasmussen University, or RU, a nursing- and health sciences-focused institution, provides postsecondary education to students at 18 campuses in five states, and online. RU is institutionally accredited by HLC. • National Education Seminars, Inc., which is referred to herein as Hondros College of Nursing, or HCN, provides nursing education to students enrolled at eight campuses in three states. HCN is institutionally accredited by the Accrediting Bureau for Health Education Schools, or ABHES. • 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. 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 December 31, 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. 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 APUS, RU, and HCN are certified by the U.S. 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 for the periods covered by this Annual Report are organized into the following three reportable segments: • American Public University System Segment, or APUS Segment. This segment reflects the operational activities of APUS. • Rasmussen University Segment, or RU Segment . This segment reflects the operational activities of RU. • Hondros College of Nursing Segment, or HCN Segment. This segment reflects the operational activities of HCN. 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, 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 15. Segment Information” for more information on the Company’s reporting segments. Note 2. Significant Accounting Policies A summary of the Company’s significant accounting policies follows: Basis of presentation and accounting. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. Business combinations. The Company accounts for business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations , or FASB ASC 805, which requires the 109 acquisition method to be used for all business combinations. 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. Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets. 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. The accompanying consolidated financial statements include the accounts of APEI and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. Use of estimates. In preparing financial statements in conformity with GAAP, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company evaluates these estimates and assumptions on an ongoing basis and bases its estimates on experience, current and expected future conditions and various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions, and the impact of such differences may be material to the Consolidated Financial Statements. Cash and cash equivalents. The Company considers all short-term highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of demand deposits with financial institutions, money market funds, and U.S. Treasury bills. Cash and cash equivalents are Level 1 assets in the fair value reporting hierarchy. Restricted cash. Restricted cash includes funds held for students for unbilled educational services that were received from Title IV programs. 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 was 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 Consolidated Balance Sheets as of December 31, 2024 and 2025, excluding the restricted certificate of deposit at December 31, 2024, was $ 1.5 million and $ 2.4 million, respectively. Total restricted cash as of December 31, 2024, and 2025, was $ 27.0 million and $ 2.4 million, respectively. Cash and cash equivalents and restricted cash as of December 31, 2024, and 2025, were as follows (in thousands): December 31, 2024 December 31, 2025 Cash, cash equivalents, and restricted cash $ 158,941 $ 176,499 Less: restricted cash ( 27,015 ) ( 2,404 ) Total unrestricted cash $ 131,926 $ 174,095 Accounts receivable. The Company accounts for receivables in accordance with FASB ASC 310, Receivables. Tuition is recorded as accounts receivable and deferred revenue at the time students begin a course or term. Students may remit tuition payments upon enrollment in a course or term, or they may elect various other payment options with payment terms extending beyond the start of the course or term. These other payment options include ED Title IV programs, U.S. Department of Defense, or DoD, tuition assistance, or TA, programs, U.S. Department of Veterans Affairs, or VA, education benefits programs, payments by sponsors, or alternative loans, that remit payments directly to the subsidiary institution. HCN also offers extended payment plan options. When a student or third-party remits payment after a course or term has begun, accounts receivable is reduced. If payment is made prior to the start of a course or term, the payment is recorded as a student deposit, and the student is provided access to the course when courses start, in the case of APUS, or allowed to start the term, in the case of RU and HCN. If a 110 payment option is confirmed, the student is allowed to start the course or term. Generally, if no receipt is confirmed or payment option secured, the student will be dropped from the course or not allowed to start the term. Therefore, billed accounts receivable represents charges that have been prepared and sent to students or the applicable third-party payor according to the terms agreed upon in advance. TA is billed by branch of service on a course-by-course basis when a student starts a course, whereas Title IV programs are billed based on the courses included in a student’s term. Effective January 1, 2024, APUS revised its billing policy for students utilizing TA, which previously ranged from two weeks to five weeks after course start date to nine weeks after the course start date. Billed accounts receivable are considered past due if the invoice has been outstanding for more than 30 days. Allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s evaluation of the status of existing accounts receivable. Among other factors, management considers the age of the receivable, the anticipated source of payment, and historical allowance considerations. Consideration is also given to any specific known risk areas among the existing accounts receivable balances. Recoveries of receivables previously written off are recorded when received. APUS and RU do not charge interest on past due accounts receivable. HCN charges interest on payment plans when a student leaves the payment plan program upon graduation or exits the program. Interest charged by HCN on payment plans was not material for the periods presented. Assets held for sale. Assets held for sale at December 31, 2024, represented 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. For additional details regarding assets held for sale, please refer to “Note 5. Assets Held For Sale” in these Consolidated Financial Statements. Property and equipment. All property and equipment is carried at cost less accumulated depreciation. Depreciation and amortization are calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvement depreciation is calculated on a straight-line basis over the estimated useful life of the asset or the term of the lease. For tax purposes, different methods are used. Maintenance and repairs are expensed as incurred, while other costs are capitalized if they extend the useful life of the asset. The Company capitalizes certain costs for software development in accordance with FASB ASC 350-40, Accounting for the Costs of Computer Software Developed or Obtained for Internal Use , and these costs are classified as property and equipment in the Consolidated Balance Sheets. These costs are amortized over the estimated useful life of five years . The Company also capitalizes certain costs for academic program development, and these costs are amortized over an estimated life not to exceed three years . Leases. The Company accounts for lease arrangements in accordance with FASB ASC 842, Leases . The Company determines if there is a lease at inception. The Company analyzes each lease arrangement to determine whether it should be classified as an operating lease or a finance lease. Lease assets are right-of-use assets, or ROU assets, which represent the right to use an underlying asset for the lease term. Lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate based on information available at lease commencement to determine the present value of the lease payments. The ROU asset includes all lease payments and excludes lease incentives. Leases with a term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has elected to combine lease and non-lease components as a single component when calculating the ROU asset and lease liability. Goodwill and intangible assets. Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value of acquired intangible assets at the date of acquisition. Goodwill is not amortized. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC 350, Intangibles Goodwill and Other, and Accounting Standards Update, or ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . The Company’s goodwill and intangible assets are deductible for tax purposes. The Company annually assesses goodwill for impairment, or more frequently if events and circumstances indicate that goodwill might be impaired. Goodwill impairment testing consists of an optional qualitative assessment as well as a 111 quantitative test. The quantitative test compares the fair value of a reporting unit to its carrying value. If the carrying value of the reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the carrying value is greater than the fair value, the difference between the two values is recorded as an impairment. Indefinite-lived and finite-lived intangible assets acquired in business combinations are recorded at fair value on the acquisition date. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of the asset. The Company reviews its indefinite-lived and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets. For additional details regarding goodwill and intangible assets, please refer to “Note 6. Goodwill and Intangible Assets” in these Consolidated Financial Statements. Valuation of long-lived assets. The Company accounts for the valuation of long-lived assets under FASB ASC 360, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC 360 requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value, less costs to sell. Investments. 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 applies 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 is generally represented by equity ownership of at least 20 percent but not more than 50 percent. Investments accounted for under the equity method are 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 is reported in the Consolidated Statements of Income as equity investment income or loss. Investments that do not meet the equity method requirements are accounted for using the cost method under ASC 321 with changes in the fair value of the investment reported in the Consolidated Statements of Income as equity investment income or loss. During the third quarter of 2023, 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 and recorded an investment loss of $ 5.2 million in the same period, on a 2012 cost method investment. This investment loss was due to the investee entering into an agreement to be sold which resulted in no sales proceeds to the Company, and the loss reduced the book value of the cost method investment to zero . 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 and recorded an investment loss of $ 3.3 million in the same period, 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. 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 and recorded an investment loss of $ 1.1 million in the same period, on a 2013 equity method investment. The investment loss recorded reduced the book value of the equity method investment to zero . These investment losses are included in equity investment loss on the Consolidated Statements of Income. There were no indicators of impairment during the year ended December 31, 2023. Prior to December 31, 2024, the Company’s equity method and cost method investments were included in Other assets, net on the accompanying Consolidated Balance Sheets. As of December 31, 2024, and 2025, the Company no longer has any investments accounted for under ASC 323 and ASC 321. 112 Derivatives and hedging. Derivative financial instruments are recorded on the Consolidated Balance Sheets as assets or liabilities and re-measured at fair value at each reporting date. For derivatives designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as other comprehensive income and reclassified into earnings in the same period during which the hedged transaction affects earnings. Deferred revenue and student deposits. Deferred revenue and student deposits at December 31, 2024, and 2025, was $ 23.5 million and $ 23.0 million, respectively. Deferred revenue includes payments that have been received from students for courses or terms that are in process, and student deposits represent cash received from students prior to the commencement of a course or term and are refundable to the student in the event the student withdrawals before the start of the course or term. Series A Senior Preferred Stock. Prior to the redemption of all 400 outstanding shares of the Series A Senior Preferred Stock in June 2025, the Company accounted for preferred equity in accordance with FASB ASC 480, Distinguishing Liabilities from Equity, and classified its Series A Senior Preferred Stock as permanent equity on the accompanying Consolidated Balance Sheets. The Series A Senior Preferred Stock was recorded net of issuance costs. Dividends on the Series A Senior Preferred Stock are presented in preferred stock dividends on the Consolidated Statements of Income. The Series A Senior Preferred Stock was a cumulative, perpetual, redeemable instrument. Dividends accrued as contractually obligated and were paid upon approval by the Company’s Board of Directors. Please refer to “Note 12. Preferred Stock” in these Consolidated Financial Statements. Revenue recognition. The Company recognizes revenue in accordance with accounting standard, FASB ASC 606, Revenue from Contracts with Customers . Under ASC 606, revenue is recognized when evidence of a contract exists, delivery has occurred or as instructional services are delivered, the price is determinable, and collectability is reasonably assured. Revenue from fees is recognized as information or services are delivered to students, assuming all other revenue recognition criteria are met. For additional information regarding revenue recognition, please refer to “Note 3. Revenue” in these Consolidated Financial Statements. Advertising costs. Advertising costs are expensed as incurred during the year. Advertising expenses for the years ended December 31, 2023, 2024 and 2025 were $ 82.6 million, $ 78.6 million, and $ 84.4 million, respectively, and are included in selling and promotional expenses in the accompanying Consolidated Statements of Income. Income taxes. Deferred taxes are determined using the liability method, whereby deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. As these differences reverse, they will enter into the determination of future taxable income. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment of such changes. Under FASB ASC 740, Income Taxes , the Company is required to determine whether uncertain tax positions should be recognized within the Company’s financial statements. The Company recognizes interest and penalties, if any, related to uncertain tax positions in income tax expense. Uncertain tax positions are recognized when a tax position, based solely on its technical merits, is determined more likely than not to not be sustained upon examination. Upon determination, uncertain tax positions are recorded in the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. An uncertain tax position is reversed if it no longer meets the more likely than not threshold of being sustained. Stock-based compensation. The Company accounts for stock-based compensation in accordance with FASB ASC 718, Stock Compensation , which requires companies to expense share-based compensation based on fair value, and ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . Stock-based payments may include incentive stock options or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance shares, performance units, cash-based awards, other stock-based awards, including unrestricted shares, or any combination of the foregoing. Stock-based compensation cost is recognized as expense generally over a three-year vesting period using the straight-line method for employees and the graded-vesting method for members of the Company’s Board of Directors. It is measured using the Company’s closing stock price on the date of the grant. An accelerated one-year period is used to recognize stock-based compensation cost for employees who have reached certain service and retirement eligibility criteria on the date of grant. The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model that uses 113 certain assumptions. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of the Company’s common stock. In addition, the Company determines the risk-free interest rate by selecting the U.S. Treasury constant maturity for the same maturity as the estimated life of the option quoted on an investment basis in effect at the time of grant for that business day. Judgment is required in estimating the percentage of share-based awards that are expected to vest, and in the case of performance stock units, or PSUs, the level of performance that will be achieved and the number of shares that will be earned. The Company estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original estimates. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. If actual results differ significantly from these estimates, stock-based compensation expense could be higher or lower and have a material impact on the Company’s consolidated financial statements. 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 . For additional information regarding stock-based compensation, please refer to “Note 11. Stockholders’ Equity” in these Consolidated Financial Statements. Net (loss) income per common share. Net (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. 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. Fair value of financial instruments. The Company measures certain financial assets at fair value for disclosure purposes, as well as on a nonrecurring basis when they are deemed to be other-than-temporary impairments. Fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value: Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities; Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly; or Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company’s cash, cash equivalents, and restricted cash, accounts receivable, accounts payable and accrued liabilities are all short-term in nature. As such, their carrying amounts approximate fair value and fall within Level 1 of the fair value hierarchy. The valuation of the interest rate cap was measured as the present value of all expected future cash flows based on the Term Secured Overnight Financing Rate, or Term SOFR. The present value calculation uses discount rates that have been adjusted to reflect the credit quality of the Company and its counterparty. As such, the Company’s interest rate cap falls within Level 2 of the fair value hierarchy. The carrying value of long-term debt approximates fair value as it is based on a variable rate index. Concentration of credit risk. The Company maintains its cash, cash equivalents, and restricted cash in bank deposit accounts with various financial institutions. Cash, cash equivalents, and restricted cash balances may exceed the FDIC insurance limit. The Company has historically not experienced any losses in such accounts. Recent Accounting Pronouncements. The Company considers the applicability and impact of all ASUs issued by the FASB. ASUs issued but not listed were assessed and determined to be either not applicable or expected to have minimal impact on the Company’s consolidated financial position and/or results of operations. 114 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires, among other things, the following for public business entities: (i) enhanced disclosures of specific categories of reconciling items included in the rate reconciliation, as well as additional information for any of these items meeting certain qualitative and quantitative thresholds; (ii) disclosure of the nature, effect and underlying causes of each individual reconciling item disclosed in the rate reconciliation and the judgment used in categorizing them if not otherwise evident; and (iii) enhanced disclosures for income taxes paid, which includes federal, state, and foreign taxes, as well as for individual jurisdictions over a certain quantitative threshold. The Company adopted this standard effective for the year ended December 31, 2025, using the retrospective approach. The Company’s adoption of this ASU did not have a material impact on its consolidated financial statements and disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures , which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion, within relevant income statement captions. The guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine the impact of adoption on its consolidated financial statements and disclosures. Note 3. Revenue The following is a description of principal activities from which the Company generates its revenue. Instructional services. Instructional services revenue includes tuition and technology and laboratory fees, and prior to the GSUSA Sale Date, contract training. The Company generally recognizes revenue ratably as instructional services are provided over the course or term, which is, for APUS, either an eight- or sixteen-week course and for RU and HCN, a quarterly term, and for GSUSA, the length of the training program. Tuition is charged by course or term, technology fees are charged to APUS students on a per course basis, and technology and laboratory fees are charged to RU and HCN students on a per term basis, when applicable. Generally, instructional services are billed when a course or term begins and paid within thirty days of the bill date. In September 2023, APUS removed the technology fee for undergraduate students. Graduation fees . APUS graduation fee revenue represents a one-time, non-refundable, fee per degree, charged to students upon submission of a program graduation application. In April 2023, the fee was increased from $ 100 to $ 150 . The graduation fee was increased to $ 250 in October 2024, and increased again to $ 350 in February 2026 for bachelor’s and master’s degrees. This fee covers administrative costs associated with completing a review of the student’s academic and financial standing prior to graduation. The Company recognizes revenue once graduation review services are completed. Generally, graduation fees are billed and paid when the student submits the graduation application. Textbook and other course material fees . Textbook and other course materials fees represent revenue and fees related to the sale of textbooks and other course materials to RU and HCN students. Revenue is recognized at the beginning of the term when the textbooks and other course materials fees are billed. Payment is generally received within thirty days of the bill date. Sales tax collected on the sale of textbooks and other course materials is excluded from revenue. Other fees . Other fees revenue represents one-time, non-refundable fees such as application, enrollment, transcript, and other miscellaneous fees. Generally, other fees revenue is recognized when the fee is charged to the student, which coincides with the completion of the specific performance obligation to the student. APUS provides a Preferred Military Rate of $ 250 per credit hour for undergraduate and master’s level courses for all U.S. active-duty service members, National Guard members, Reservists, and military families. Active-duty military students using TA at the undergraduate level are expected to generally have no out-of-pocket expenses. In addition, APUS also provides an APUS-funded 10 % grant for veterans and veteran’s family members, or Veteran Grant, on standard undergraduate, a 15 % Veteran Grant on master’s level courses, and a 10 % Opportunity Grant for undergraduate and master’s level courses. RU also provides an RU-funded tuition grant to support students who are U.S. active-duty military, National Guard, Reserve, retired military and veterans enrolling in a degree, diploma or certificate program. RU also extends the grant to eligible spouses and dependents of active-duty military, retired military, and veterans. HCN provides HCN-funded performance-based grants and offers an HCN-funded institutional affordability grant to students demonstrating financial need to cover the difference between the total cost of tuition and fees less the amount of all eligible financial aid resources. The institutional affordability grant is designed to limit a student’s monthly payment to $ 200 115 through an award of up to $ 200 per month, or $ 600 per term after consideration of financial aid, employer tuition reimbursement, and other financial resources. APUS, RU, and HCN tuition grants and scholarships of $ 80.7 million, $ 29.9 million, and $ 36.5 million were provided for the years ended December 31, 2023, 2024, and 2025, respectively, and are included as a reduction to revenue in the accompanying Consolidated Statements of Income. Disaggregation of Revenue In the following table, revenue, shown net of grants and scholarships, is disaggregated by type of service provided. The table also includes a reconciliation of the disaggregated revenue within the reportable segments (in thousands): Year Ended December 31, 2023 APUS RU HCN Corporate and Other Consolidated Instructional services, net of grants and scholarships $ 300,794 $ 179,699 $ 47,998 $ 26,220 $ 554,711 Graduation fees 1,764 — — — 1,764 Textbook and other course materials — 32,008 8,255 — 40,263 Other fees 745 2,379 683 — 3,807 Total Revenue $ 303,303 $ 214,086 $ 56,936 $ 26,220 $ 600,545 Year Ended December 31, 2024 APUS RU HCN Corporate and Other Consolidated Instructional services, net of grants and scholarships $ 313,924 $ 181,975 $ 55,830 $ 23,958 $ 575,687 Graduation fees 2,454 — — — 2,454 Textbook and other course materials — 32,041 10,187 — 42,228 Other fees 671 2,246 1,273 — 4,190 Total Revenue $ 317,049 $ 216,262 $ 67,290 $ 23,958 $ 624,559 Year Ended December 31, 2025 APUS RU HCN Corporate and Other Consolidated Instructional services, net of grants and scholarships $ 314,776 $ 207,236 $ 62,004 $ 7,806 $ 591,822 Graduation fees 3,882 — — — 3,882 Textbook and other course materials — 35,955 11,712 — 47,667 Other fees 1,184 3,040 1,267 — 5,491 Total Revenue $ 319,842 $ 246,231 $ 74,983 $ 7,806 $ 648,862 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. 116 Contract Balances and Performance Obligations The Company has no contract assets or deferred contract costs as of December 31, 2024, and 2025. 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 December 31, 2024, was $ 23.5 million and includes $ 14.1 million in future revenue that has not yet been earned for courses and terms that are in progress, as well as $ 9.4 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 December 31, 2025, was $ 23.0 million and includes $ 15.0 million in future revenue that has not yet been earned for courses and terms that are in progress as well as $ 8.0 million in student deposits. The Company has elected, as a practical expedient, not to disclose additional information about unsatisfied performance obligations for contracts with students that have an expected duration of one year or less. When the Company begins providing the performance obligations, a contract receivable is created, resulting in accounts receivable on the Company’s Consolidated Balance Sheets. The Company uses the portfolio approach, a practical expedient, to evaluate if a contract exists and to assess collectability at the time of contract inception based on historical experience. Contracts are subsequently reviewed for collectability if significant events or circumstances indicate a change. Refund Policies The Company provides a stated period of time during which students may withdraw from a course for APUS, or a term for RU and HCN, without further financial obligation resulting in a refund liability. If a student withdraws during the academic term, the Company calculates the portion of tuition that is non-refundable based on the tuition refund policy and the applicable state laws and recognizes it as revenue in the period the withdrawal occurs. For GSUSA, a refund was provided only if the student canceled before the start of a course. Refund Liability The Company uses the portfolio approach and applies the expected value method to determine if a refund liability exists. This requires management judgment and the use of estimates and historical data to assess the likelihood and magnitude of a revenue reversal due to a refund liability. Due to the short duration of the courses, and the refund policy described above, any uncertainty regarding a student’s withdrawal is resolved in a short time period. Based on measurement and analysis, the Company determined that a significant reversal in the cumulative amount of revenue recognized is not expected. The Company includes this estimate in the transaction price. The refund liabilities for APUS, which are included in deferred revenue, are not material for all periods presented. APUS updates the measurement of the refund liability at the end of each reporting period for changes in expectations, and if the reversal becomes significant, recognizes corresponding adjustments to revenue. Because RU and HCN’s terms coincide with the Company’s fiscal quarter periods, there are no refund liabilities as of December 31, 2024, and 2025, for RU or HCN. 117 Note 4. Property and Equipment Property and equipment consisted of the following: As of December 31, Useful Life 2024 2025 (in thousands) Land — $ 3,161 $ 3,161 Building and building improvements 15 - 39 years 16,715 16,715 Leasehold improvements up to 20 years 49,828 52,581 Office equipment 5 years 1,879 1,500 Computer equipment 3 - 5 years 25,265 21,595 Furniture and fixtures 5 - 7 years 19,751 16,984 Other capital assets 5 years 81 59 Software development 3 - 5 years 74,173 69,468 Program development 3 years 14,854 12,714 205,707 194,777 Less: accumulated depreciation and amortization ( 132,324 ) ( 124,179 ) $ 73,383 $ 70,598 During the years ended December 31, 2023, 2024, and 2025, the Company disposed of long-lived assets resulting in a loss of $ 0.6 million, $ 0.4 million, and $ 0.4 million, respectively. The disposals and losses were primarily related to assets no longer in use. The losses on long-lived assets are included as loss on disposals of long-lived assets in these Consolidated Financial Statements. During the years ended December 31, 2023, 2024, and 2025, the Company recorded depreciation expense of $ 15.6 million, $ 16.0 million and $ 16.1 million, respectively. Note 5. Assets Held For Sale Assets held for sale at December 31, 2024 represent excess real properties located in Charles Town, West Virginia, for the Company’s APUS Segment. 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, property is recorded at the lower of the carrying value or fair value less the estimated cost to sell until such time the asset is sold. For the year ended December 31, 2023, the Company estimated the fair value of a building and an undeveloped parcel of land designated as held for sale were $ 9.0 million, which, after reduction for the estimated cost to sell of approximately $ 0.4 million, resulted in a loss of $ 2.4 million. The loss is included in loss on assets held for sale in these Consolidated Financial Statements for the year ended December 31, 2023. 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, and recorded a loss of $ 1.6 million. The loss is included in loss on assets held for sale in these Consolidated Financials Statements for the year ended December 31, 2024. 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 the undeveloped parcel of land classified as held for sale in 2023, for $ 0.5 million which approximated its carrying value. APUS completed the sale in February 2025 for net sales proceeds of $ 0.5 million. In the first quarter of 2025, APUS entered into an agreement to sell the building classified in assets held for sale in 2023, 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 year ended December 31, 2025. APUS completed the sale in June 2025 for net sales proceeds of $ 6.6 million. 118 Total cash received from the sale of assets held for sale was $ 23.0 million for the year ended December 31, 2025. Note 6. Goodwill and Intangible Assets Goodwill In connection with the acquisitions of RU, HCN, and GSUSA, the Company applied FASB ASC 805, Business Combinations , using the acquisition method of accounting. The Company recorded $ 217.4 million and $ 38.6 million of goodwill in connection with the RU and HCN acquisitions, respectively, representing the excess of the purchase price over the fair value of assets acquired and liabilities assumed, including identifiable intangible assets. The Company subsequently recorded non-cash impairment charges in 2022 and 2023 for RU, and 2016 and 2019 for HCN, reducing the carrying value of RU and HCN goodwill to $ 33.0 million and $ 26.6 million, respectively. There was no goodwill recorded in connection with the acquisition of GSUSA. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC 350, Intangibles Goodwill and Other , and ASU 2017-04, Intangibles - Goodwill and Other (Topic 350) : Simplifying the Test for Goodwill Impairment. The Company annually assesses goodwill for impairment, or more frequently if events and circumstances indicate that goodwill might be impaired. Goodwill impairment testing consists of an optional qualitative assessment as well as a quantitative test. The quantitative test compares the fair value of the reporting unit to its carrying value. If the carrying value of the reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the carrying value is greater than the fair value, the difference between the two values is recorded as an impairment. During the second quarter of 2023, the Company concluded it was more likely than not that the fair value of the Company’s RU Segment was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023 as compared to prior projections, and the Company’s market value. Therefore, during the second quarter, the Company proceeded with an interim quantitative impairment test for the RU Segment. The implied fair value of RU Segment goodwill was calculated and compared to the recorded goodwill value. As a result, the Company recorded a non-cash impairment charge of $ 53.0 million, and the corresponding tax impact of $ 15.8 million, to reduce the carrying value of RU Segment goodwill to $ 33.0 million. The impairment charge is included as impairment of goodwill and intangible assets in these Consolidated Financial statements. The impairment charge eliminated the difference between the fair value and book value of RU Segment goodwill. During the fourth quarter of 2023, the Company completed its annual assessment of RU Segment goodwill for impairment and determined that the fair value was greater than the carrying value and therefore there was no impairment of RU Segment goodwill as of the valuation date which was October 31. For the years ended December 31, 2024 and 2025, the Company completed its annual assessment of RU goodwill and concluded that RU’s fair value was more than the carrying value; consequently, there was no impairment. For the years ended December 31, 2023, 2024, and 2025, the Company completed its annual assessment of HCN goodwill and concluded that HCN’s fair value was more than the carrying value; consequently, there was no impairment. The Company’s annual assessment during the fourth quarter of 2025 concluded that the fair value of RU and HCN exceeded their carrying values by approximately $ 92.9 million, or 64 %, and $ 27.3 million, or 78 %, respectively. The Company engaged an independent valuation firm to assist with the valuations. The independent valuation firm weights the results of two different valuation methods to determine fair value: (i) discounted cash flow and (ii) guideline public company. Under the discounted cash flow method, fair value was determined by discounting the estimated future cash flows of RU and HCN at their estimated weighted-average cost of capital. Under the guideline public company method, pricing multiples from other public companies in the public higher education market were used to determine the fair value of RU and HCN. Values derived under the two valuation methods were then weighted to estimate RU and HCN’s enterprise values. The income and cost approaches were used, as applicable, to value the RU and HCN’s indefinite-lived intangible assets. 119 Changes in the carrying amount of goodwill by reportable segment during the years ended December 31, 2024, and 2025, are as follows (in thousands): APUS Segment RU Segment HCN Segment Total Goodwill Goodwill as of December 31, 2023 $ — $ 33,030 $ 26,563 $ 59,593 Impairment — — — — Goodwill as of December 31, 2024 $ — $ 33,030 $ 26,563 $ 59,593 Impairment — — — — Goodwill as of December 31, 2025 $ — $ 33,030 $ 26,563 $ 59,593 Intangible Assets In addition to goodwill, in connection with the acquisitions of RU and HCN, the Company recorded identified intangible assets with an indefinite useful life in the aggregate amount of $ 51.0 million and $ 3.7 million, respectively, which includes trade name, accreditation, licensing and Title IV, and affiliate agreements. The Company subsequently recorded non-cash impairment charges of $ 26.5 million in 2022 and 2023 to reduce the carrying value of RU indefinite-lived intangible assets to $ 24.5 million. The Company recorded $ 35.5 million and $ 4.4 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU and HCN, respectively. These identified intangible assets with a definite useful life were amortized on a straight-line basis over estimated useful lives, which were generally two to six years . All recorded identified intangible assets with a definite useful life were fully amortized as of December 31, 2024. During the years ended December 31, 2023 and 2024, the Company recorded amortization expense related to definite lived intangible assets of $ 12.2 million and $ 3.3 million, respectively. During the second quarter of 2023, the Company concluded it was more likely than not the fair value of the Company’s RU Segment intangible assets was less than its carrying amount resulting from RU’s underperformance when compared to 2023 internal targets, projected enrollment trends, the decline in financial performance projected for the remainder of 2023 as compared to prior projections, and the Company’s market value. As a result, the Company completed an impairment test related to the valuation of RU Segment intangible assets during the second quarter. The implied fair value of intangible assets was calculated and compared to the recorded value and it was determined the fair value of the RU Segment trade name was $ 18.5 million, or $ 8.0 million less than its carrying value, and RU Segment accreditation, licensing, and Title IV was $ 6.0 million, or $ 3.0 million less than the carrying value during the second quarter. As a result, the Company recorded a non-cash impairment charge of $ 11.0 million to reduce the carrying values of the RU Segment indefinite-lived intangible assets during 2023. The impairment charge is included as impairment of goodwill and intangible assets in these Consolidated Financial statements. The impairment charge recorded eliminated the difference between the fair value of the trade name and accreditation, licensing, and Title IV indefinite-lived intangible assets, and the book value. For the years ended December 31, 2024 and 2025, the Company’s annual assessment concluded that the fair value of RU’s indefinite lived intangible assets was more than the carrying value; consequently, there was no impairment. For the years ended December 31, 2023, 2024, and 2025, the Company completed its annual assessment of HCN indefinite-lived intangible assets and concluded that the fair value was more than the carrying value; consequently, there was no impairment. The following table represents the balance of the Company’s indefinite-lived intangible assets as of December 31, 2024 and 2025 (in thousands): Indefinite-lived intangible assets Trade name $ 20,498 Accreditation, licensing, and Title IV 7,686 Affiliation agreements 37 Total indefinite-lived intangible assets $ 28,221 Determining fair value requires judgment and the use of significant estimates and assumptions, including fluctuations in enrollments, revenue growth rates, operating margins, discount rates, and future market conditions, among others. Given the 120 current competitive and regulatory environment and the uncertainties regarding the related impact on the business, there can be no assurance that the estimates and assumptions made for purposes of the Company’s interim and annual goodwill and intangible asset impairment tests will prove to be accurate predictions of the future. If the Company’s assumptions are not realized, the Company may record additional goodwill and intangible asset impairment charges in future periods. It is not possible at this time to determine if any such future impairment charge would result or whether such charge would be material. Note 7. Leases The Company has operating leases for office space and campus facilities and finance leases for certain copiers and printers. Leases are classified as operating leases unless they meet any of the criteria below to be classified as a finance lease: • the lease transfers ownership of the asset at the end of the lease; • the lease grants an option to purchase the asset which the lessee is expected to exercise; • the lease term reflects a major part of the asset’s economic life; • the present value of the lease payments equals or exceeds the fair value of the asset; or • the asset is specialized with no alternative use to the lessor at the end of the term. Operating Leases The Company has operating leases for office space and campus facilities. Some leases include options to terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. The Company leases corporate office space in Florida, under an operating lease that expires in January 2029. The RU Segment leases 18 campuses located in five states under operating leases that expire through March 2034. RU closed one campus in Wisconsin in December 2025 and plans to close a second Wisconsin campus in December 2026. The RU Segment leased administrative office space in Minneapolis, Minnesota until October 31, 2025. 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. Prior to the GSUSA Sale Date, GSUSA leased classroom and administrative office space in Washington, D.C. and Honolulu, Hawaii. Operating lease assets are ROU assets, which represent the right to use an underlying asset for the lease term. Operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating leases are included in the Operating lease assets, net, and Operating lease liabilities, current and long-term on the Consolidated Balance Sheets. These assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate based on information available at lease commencement to determine the present value of the lease payments. The ROU asset includes all lease payments and excludes lease incentives. Lease expense for operating leases is recognized on a straight-line basis over the lease term. There are no variable lease payments. Operating lease expense for the years ended December 31, 2023, 2024, and 2025, was $ 20.7 million, $ 18.9 million, and $ 16.9 million, 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 years ended December 31, 2023, 2024, and 2025, was $ 20.2 million, $ 18.5 million, and $ 17.7 million, respectively, and is included in operating cash flows. Loss on leases During the first quarter of 2024, the Company elected to terminate its RU Segment lease for a planned Dallas, Texas campus. 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 RU Segment began consolidating two Minnesota campuses, and, as a result, during the second quarter of 2024, the Company paid a lease termination fee of $ 1.2 million related to the consolidation and recorded $ 1.2 million loss on leases as a result of the lease termination. In May 2024, RU notified the Wisconsin Educational Approval Program that it intended to voluntarily close two Wisconsin campuses, effective December 31, 2025, and 2026, respectively. RU closed the Green Bay campus effective December 31, 2025, as planned, and intends to close the Wausau campus on December 31, 2026. As a result, the Company recorded a lease impairment of $ 0.4 million during the second quarter of 2024, and recorded an additional lease impairment of $ 0.1 million during the third quarter in 2025. 121 The total loss on leases during the years ended December 31, 2024 and 2025, was $ 3.7 million and $ 0.1 million and is included in Loss on leases in the Consolidated Statements of Income. Finance Leases The Company leases copiers and printers pursuant to leases that are classified as finance leases and that expire in 2027. The Company pledged the assets financed to secure the outstanding lease obligations. As of December 31, 2025, the total finance lease liability was $ 0.2 million with an average interest rate of 7.00 %. The ROU assets are recorded within Property and equipment, net on the Consolidated Balance Sheets. Lease amortization expense associated with the Company’s finance leases was $ 0.1 million, $ 0.2 million, and $ 0.2 million for the years ended December 31, 2023, 2024, and 2025, respectively, and is recorded within Depreciation and amortization expense on the 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 December 31, 2025 (dollars in thousands): Maturity of Lease Liabilities Operating Leases Finance Leases 2026 14,601 213 2027 13,957 36 2028 12,560 — 2029 10,913 — 2030 9,305 — 2031 and beyond 20,394 — Total future minimum lease payments $ 81,730 $ 249 Less: imputed interest ( 13,673 ) ( 11 ) Present value of operating lease liabilities $ 68,057 $ 238 Less: lease liabilities, current ( 11,171 ) ( 203 ) Lease liabilities, long-term $ 56,886 $ 35 Balance Sheet Classification Current Operating lease liabilities, current $ 11,171 Finance lease liabilities, current 203 Long-term Operating lease liabilities, long-term 56,886 Finance lease liabilities, long-term 35 Total lease liabilities $ 68,295 Other Information Weighted average remaining lease term (in years) Operating leases 6.14 Finance leases 1.16 Weighted average discount rate Operating leases 5.4 % Finance leases 7.0 % Note 8. Long-Term Debt In connection with the acquisition of RU, or the Rasmussen Acquisition, APEI, as borrower, entered into a Credit Agreement with Macquarie Capital Funding LLC, or the Credit Agreement, as administrative agent and collateral agent, or the Agent, Macquarie Capital USA Inc. and Truist Securities, Inc., as lead arrangers and joint bookrunners, and certain lenders party thereto, or the Lenders. The Credit Agreement provides for (i) a senior secured term loan facility in an aggregate original 122 principal amount of $ 175.0 million, or the Term Loan, with a scheduled maturity date of September 1, 2027 and (ii) a senior secured revolving loan facility in an aggregate commitment amount of $ 20.0 million, or the Revolving Credit Facility, and, together with the Term Loan, is referred to as the Facilities, with a scheduled maturity date of September 1, 2026, the full capacity of which may be utilized for the issuance of letters of credit. The Revolving Credit Facility also includes a $ 5.0 million sub-facility for swing line loans. The Term Loan, the proceeds of which were used as part of the cash consideration for the Rasmussen Acquisition, was fully funded on September 1, 2021, or the RU Closing Date, and is presented net of deferred financing fees on the Consolidated Balance Sheets. Deferred financing fees are being amortized using the effective interest method over the term of the Term Loan. As of December 31, 2024, and 2025, the remaining unamortized deferred financing fees were $ 3.0 million and $ 1.8 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 on the Revolving Credit Facility as of December 31, 2024, and 2025. The Credit Agreement provides the Company with the option, subject to certain conditions, including obtaining commitments from one or more lenders, to increase the total commitments under the Revolving Credit Facility, increase the amount of the Term Loan and/or incur incremental term loan facilities in an aggregate amount not to exceed the sum of (i) the greater of (a) $ 91.0 million and (b) an amount equal to consolidated EBITDA on a pro forma basis for the most recently ended four-quarter period (less the aggregate amount of certain other incremental indebtedness permitted to be incurred by APEI, and plus the aggregate amount of voluntary prepayments of certain other incremental indebtedness permitted to be incurred by APEI) and (ii) an amount (a) in the case of secured incremental facilities that rank pari passu with the Facilities, such that the First Lien Net Leverage Ratio would not be greater than 1.50 to 1.00 and the Total Net Leverage Ratio would not be greater than 2.00 to 1.00, (b) in the case of secured incremental facilities that rank junior to the Facilities, such that the Secured Net Leverage Ratio would not be greater than 1.75 to 1.00 and the Total Net Leverage Ratio would not be greater than 2.00 to 1.00, and (c) in the case of unsecured incremental facilities, such that the Total Net Leverage Ratio would not be greater than 2.00 to 1.00 or the Interest Coverage Ratio would not be less than 2.00 to 1.00. The First Lien Net Leverage Ratio, the Secured Net Leverage Ratio and the Total Net Leverage Ratio are each defined in the Credit Agreement and reflect a ratio of (x) in the case of the First Lien Net Leverage Ratio, consolidated first lien indebtedness (net of unrestricted cash and cash equivalents in excess of $ 50.0 million) to consolidated EBITDA, (y) in the case of the Secured Net Leverage Ratio, consolidated secured indebtedness (net of unrestricted cash and cash equivalents in excess of $ 50.0 million) to consolidated EBITDA, and (z) in the case of the Total Net Leverage Ratio, consolidated total indebtedness to consolidated EBITDA. The Interest Coverage Ratio is also defined in the Credit Agreement and reflects a ratio of consolidated EBITDA to consolidated interest expense. 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 December 31, 2025, the Facilities borrowing rate was 9.53 % excluding any offset from the interest rate cap agreement described below. 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. The Credit Agreement requires APEI to make principal payments of the Term Loan on the last day of each quarter in an amount equal to $ 2.2 million per quarter. During the years ended December 31, 2023, 2024, and 2025, APEI paid $ 9.6 million, $ 9.4 million, and $ 11.1 million, respectively, of interest, amortization of debt issuance costs and unused commitment fees related to its Term Loan and Revolving Credit Facility. 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 until payment of the outstanding principal amount at maturity in September 2027. In addition, as a result of the debt prepayment, the Company wrote off a proportionate amount of unamortized debt issuance costs in the amount of $ 3.9 million. Subject to certain exceptions, including debt prepayments, the Term Loan contains mandatory prepayment requirements, including with respect to excess cash flow, proceeds of certain asset sales, casualty and condemnation events, and unpermitted debt issuances. During second quarter of 2024, as a result of the annual 2023 excess cash flow calculation, APEI paid $ 2.6 million in principal on the Term Loan. APEI had no mandatory prepayment obligation for the years ended December 31, 2024 and 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, or the Collateral Agreement. 123 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 December 31, 2025, the Company was in compliance with all debt covenants. Prior to the redemption of the Company’s Series A Senior Preferred Stock in June 2025, the Company was subject to certain restrictions placed on its indebtedness pursuant to the terms of the Series A Senior Preferred Stock. Long-term debt consists of the following (in thousands): As of December 31, 2024 2025 Credit agreement $ 96,425 $ 96,425 Less: deferred financing fees ( 3,001 ) ( 1,760 ) 93,424 94,665 Less: current portion — — $ 93,424 $ 94,665 Scheduled maturities of long-term debt at December 31, 2025, are as follows (in thousands): Maturities of Long-Term Debt Loan Payments 2027 96,425 Total $ 96,425 Derivatives and Hedging The Company is subject to interest rate risk as all outstanding borrowings under the Credit Agreement are subject to a variable rate of interest. 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 with the same notional value to provide the Company with interest rate protection in the event Term SOFR rate exceeded 1.78 %. The interest rate cap agreement expired on December 31, 2024. 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 to 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. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings. For the year ended December 31, 2024, the Company reclassified $ 3.0 million from other comprehensive income to interest expense. For the year ended December 31, 2025, the amount reclassified from other comprehensive income to interest expense was no t material to the financial statements. 124 Note 9. Income Taxes The components of income tax (benefit) expense were as follows (in thousands): Year Ended December 31, 2023 2024 2025 Current income tax expense: Federal $ 2,384 $ 3,141 $ 1,575 State 2,430 2,688 2,432 4,814 5,829 4,007 Deferred income tax (benefit) expense: Federal ( 12,713 ) 3,722 7,575 State ( 2,816 ) 868 566 ( 15,529 ) 4,590 8,141 Income tax (benefit) expense $ ( 10,715 ) $ 10,419 $ 12,148 The tax effects of principal temporary differences are as follows (in thousands): As of December 31, 2024 2025 Deferred tax assets Goodwill and intangibles $ 41,872 $ 36,521 Operating lease liability 26,638 17,132 Allowance for doubtful accounts 3,737 4,487 Restricted stock 1,801 2,013 Accrued vacation and severance 475 768 Investments 4,098 4,171 Stock compensation expense 38 — Other comprehensive income - unrealized loss on interest rate cap — 6 Other 909 688 Total gross deferred tax assets 79,568 65,786 Valuation allowance ( 4,409 ) ( 4,596 ) Total net deferred tax assets 75,159 61,190 Deferred tax liabilities Income tax deductible capitalized software development costs ( 534 ) ( 3,298 ) Operating lease asset ( 23,668 ) ( 14,552 ) Property and equipment ( 3,597 ) ( 2,837 ) Prepaid expenses ( 49 ) ( 1,032 ) Stock compensation expense — ( 295 ) Total deferred tax liabilities ( 27,848 ) ( 22,014 ) Deferred tax assets, net $ 47,311 $ 39,176 At December 31, 2024 and 2025, the Company had apportioned state net operating loss carryforwards of $ 6.4 million and $ 9.3 million, respectively, and federal capital loss carryforwards of $ 12.8 million in both years, which are available to offset future taxable income. The federal capital loss carryforwards will begin to expire in 2026 while the state net operating loss carryforwards will begin to expire in various years from 2036 through 2045. The amount of state net operating losses that can be carried forward indefinitely is $ 6.7 million. The Company’s utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of Internal Revenue Code of 1986, as amended. 125 Income tax (benefit) expense differs from the amount of tax determined by applying the U.S. federal income tax rates to pretax loss and income due to the application of state apportionment laws, permanent tax differences, and other temporary differences (in thousands): Year Ended December 31, 2023 2024 2025 Amount % Amount % Amount % U.S. federal Statutory tax rate $ ( 12,180 ) 21.00 % $ 5,572 21.00 % $ 9,178 21.00 % State and local income taxes, net of federal income tax effect (1)(2)(3) ( 897 ) 1.55 % 2,991 11.27 % 2,571 5.88 % Changes in Valuation allowance 1,265 ( 2.18 ) % 1,838 6.93 % — — % Nontaxable or nondeductible items Loss on equity investment — — % ( 812 ) ( 3.06 ) % — — % Equity-based compensation benefits 837 ( 1.44 ) % 194 0.73 % ( 1,083 ) ( 2.47 ) % Executive compensation 172 ( 0.31 ) % 395 1.49 % 1,315 3.01 % Other permanent differences 98 ( 0.17 ) % 97 0.37 % 127 0.29 % Other adjustments ( 10 ) 0.02 % 144 0.54 % 40 0.09 % Effective tax rate $ ( 10,715 ) 18.47 % $ 10,419 39.27 % $ 12,148 27.80 % (1) In 2023, state taxes in Minnesota, Florida, Illinois, Georgia, California, and Virginia made up the majority (greater than 50 %) of the tax effect in this category. (2) In 2024, state taxes in Georgia, Florida, Minnesota, Illinois, Maryland, North Carolina, and Texas made up the majority (greater than 50 %) of the tax effect in this category. (3) In 2025, state taxes in Florida, Minnesota, Illinois, Georgia, Mississippi, Maryland, and Texas made up the majority (greater than 50 %) of the tax effect in this category. The Company paid cash taxes for the years ended December 31, 2023, 2024, or 2025 as follows (in thousands): Year Ended December 31, 2023 2024 2025 Cash paid for U.S. federal income taxes, net $ — $ 2,700 $ 4,000 Cash paid for state and local income taxes, net 2,417 3,604 2,516 $ 2,417 $ 6,304 $ 6,516 126 Income taxes paid (net of refunds) exceeded 5 percent of total income taxes paid (net of refunds) in the following jurisdictions (in thousands): Year Ended December 31, 2023 2024 2025 State Georgia $ 267 $ 427 * Minnesota 233 * * Maryland 210 * * Florida 207 * * North Carolina 148 * * Texas 142 * * Pennsylvania 129 * * * Jurisdiction below the threshold for the period presented There were no material uncertain tax positions as of December 31, 2023, 2024, or 2025. Interest and penalties associated with uncertain income tax positions would be classified as income tax expense. The Company has not recorded any material interest or penalties during any of the years presented. The Company is subject to U.S. federal income taxes as well as income tax of multiple state jurisdictions. For U.S. federal and state tax purposes, tax years 2022-2024 remain open to examination. Note 10. Other Employee Benefits The Company has established a tax deferred 401(k) retirement plan that provides retirement benefits to its eligible employees. Participants may elect to contribute up to 60 % of their gross annual earnings not to exceed ERISA and Internal Revenue Service limits. The plan provides for Company discretionary profit-sharing contributions at matching percentages. The Company made discretionary contributions to the plan of $ 6.3 million, $ 6.4 million, and $ 6.6 million for the years ended December 31, 2023, 2024, and 2025, respectively. The Company has an Employee Stock Purchase Plan, or ESPP, with quarterly enrollment periods. Effective December 31, 2023, the Company elected to suspend the ESPP. Beginning January 1, 2024, eligible employees may no longer purchase shares of the Company’s common stock through the ESPP until such time as the Company reinstates the plan. For the year ended December 31, 2023, compensation expense recognized in connection with the ESPP was approximately $ 0.1 million. Note 11. Stockholders’ Equity Stock Incentive Plans The American Public Education, Inc. 2017 Omnibus Incentive Plan, or 2017 Incentive Plan, became effective on May 12, 2017. Grants under the 2017 Incentive Plan generally vest over a period of three years and the Company recognizes compensation expense over that period. The 2017 Incentive Plan includes a provision that allows individuals who have reached certain service and retirement eligibility criteria on the date of grant an accelerated service period of one year . The Company recognizes compensation expense for these individuals over the accelerated one year period. Restricted Stock and Restricted Stock Unit Awards The fair value of the Company’s restricted stock and restricted stock unit awards is calculated based on the closing price of the Company’s stock on the date of grant. The estimated fair value of these awards is recognized as stock-based compensation expense and is expensed over the vesting period using the straight-line method for Company employees and the graded-vesting method for members of the Company’s Board of Directors. 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 127 previously recognized, compensation cost is reversed. The Company also estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original estimates. The table below sets forth the restricted stock and restricted stock unit activity for the year ended December 31, 2023: Number of Shares Weighted Average Grant Price and Fair Value Non vested, December 31, 2022 669,673 $ 22.00 Shares granted 831,746 11.83 Vested shares ( 319,225 ) 22.03 Shares forfeited ( 130,030 ) 17.53 Non vested, December 31, 2023 1,052,164 $ 14.74 The table below sets forth the restricted stock and restricted stock unit activity for the year ended December 31, 2024: Number of Shares Weighted Average Grant Price and Fair Value Non vested, December 31, 2023 1,052,164 $ 14.74 Shares granted 595,976 10.71 Vested shares ( 475,116 ) 14.89 Shares forfeited ( 66,768 ) 14.60 Non vested, December 31, 2024 1,106,256 $ 12.63 The table below sets forth the restricted stock and restricted stock unit activity for the year ended December 31, 2025: Number of Shares Weighted Average Grant Price and Fair Value Non vested, December 31, 2024 1,106,256 $ 12.63 Shares granted 548,171 22.91 Vested shares ( 517,471 ) 13.50 Shares forfeited ( 210,194 ) 16.64 Non vested, December 31, 2025 926,762 $ 17.01 For the years ended December 31, 2023, 2024, and 2025, there were 885,080 , 0 , and 8,477 shares of anti-dilutive restricted stock or restricted stock units, respectively, excluded in the computation of diluted net income per common share. At December 31, 2025, total unrecognized compensation expense in the amount of $ 8.3 million relates to non-vested restricted stock and restricted stock units, which will be recognized over a weighted average period of 1.8 years. As a result of termination of employment, the Company accepted the following common shares for forfeiture: 110,632 shares for $ 1,866,736 in 2023, 33,788 shares for $ 380,948 in 2024, and 179,245 shares for $ 2,932,091 in 2025. Option Awards The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of the Company’s common stock. In addition, the Company determines the risk-free interest rate by selecting the U.S. Treasury 128 constant maturity for the same maturity as the estimated life of the option , quoted on an investment basis in effect at the time of grant for that business day. Estimates of fair value are subjective and are not intended to predict actual future events, and subsequent events are not necessarily indicative of the reasonableness of the original estimates of fair value made under ASC 718 . Options currently outstanding vest ratably over a period of three years and expire ten years from the date of grant. The table below sets forth stock option activity for the year ended December 31, 2023: Number of Options Weighted Average Exercise Price Weighted Average Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2022 133,588 $ 21.04 8.09 $ 37 Options granted 33,762 6.71 10 $ — Awards exercised — — Options forfeited ( 3,968 ) 26.20 Outstanding, December 31, 2023 163,382 $ 17.95 7.73 $ 119 Exercisable, December 31, 2023 83,644 $ 23.16 6.78 $ — The table below sets forth stock option activity for the year ended December 31, 2024: Number of Options Weighted Average Exercise Price Weighted Average Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2023 163,382 $ 17.95 7.73 $ 119 Options granted — — — $ — Awards exercised ( 5,796 ) 11.60 Options forfeited ( 4,616 ) 5.36 Outstanding, December 31, 2024 152,970 $ 18.57 6.64 $ 799 Exercisable, December 31, 2024 116,332 $ 21.10 6.25 $ 397 The table below sets forth stock option activity for the year ended December 31, 2025: Number of Options Weighted Average Exercise Price Weighted Average Contractual Life (years) Aggregate Intrinsic Value (in thousands) Outstanding, December 31, 2024 152,970 $ 18.57 6.64 $ 799 Options granted — — — $ — Awards exercised ( 75,715 ) 18.81 Options forfeited ( 1,600 ) 32.33 Outstanding, December 31, 2025 75,655 $ 18.04 5.07 $ 1,495 Exercisable, December 31, 2025 66,710 $ 19.52 4.78 $ 1,220 129 The following table sets forth the assumptions used in calculating the grant date fair value of each option award granted for the year ended December 31, 2023. There were no options granted during the years ended December 31, 2024 and 2025: Year Ended December 31, 2023 Expected volatility 53.50 % Expected dividends — % Expected term, in years 10 Risk-free interest rate 3.49 % Weighted-average fair value of options granted during the year $ 4.44 For the years ended December 31, 2023, 2024, and 2025, there were 163,382 , 109,638 , and 470 anti-dilutive stock options, respectively, excluded from the calculation of diluted net income per share. At December 31, 2025, total unrecognized compensation expense in the amount of $ 7,472 relates to non-vested stock options, which will be recognized over a weighted average period of 0.2 years. Stock-Based Compensation Expense For the years ended December 31, 2023, 2024, and 2025, the Company recognized stock-based compensation expense as follows (in thousands): Year Ended December 31, 2023 2024 2025 Instructional costs and services $ 895 $ 808 $ 770 Selling and promotional 490 562 759 General and administrative 6,355 6,298 6,823 Total stock-based compensation expense $ 7,740 $ 7,668 $ 8,352 The Company recognized income tax benefits of $ 1.1 million, $ 1.9 million, and $ 3.4 million from vested restricted stock and restricted stock units for the years ended December 31, 2023, 2024, and 2025, respectively. Repurchase The Company’s Board of Directors approved a stock repurchase program for common stock, under which the Company could annually purchase up to the cumulative number of shares issued or deemed issued in that year under the equity incentive and stock purchase plans. Repurchases could be made from time to time in the open market at prevailing market prices or in privately negotiated transactions based on business and market conditions. The stock repurchase program does not obligate the Company to repurchase any shares, may be suspended or discontinued at any time, and is funded using available cash. In November 2023, the Company’s Board of Directors authorized the repurchase of up to $ 10.0 million of shares of the Company’s common stock. Subject to market conditions, applicable legal requirements, and other factors, the repurchases under these authorizations may be made from time to time in the open market or in privately negotiated transactions, in transactions structured through investment banking institutions, or a combination thereof. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of shares under these authorizations. The authorizations do not obligate the Company to acquire any shares, and purchases may be commenced or suspended at any time based on market conditions and other factors the Company deem appropriate. The amount and timing of repurchases are subject to a variety of factors, including liquidity, cash flow, stock price and general business and market conditions. The authorization under this program was in addition to the Company’s repurchase program under which the Company was authorized to annually purchase up to the cumulative number of shares issued or deemed issued in that year under its equity incentive and stock purchase plan. The Company’s credit agreement includes restrictions on its ability to repurchase its common stock. During the years ended December 31, 2023, and 2024, the Company repurchased 1,515,766 and 251,146 shares of common stock for $ 9.7 million and $ 2.8 million, respectively, under the November 2023 and prior repurchase authorizations. 130 Effective February 1, 2024, the Company ceased purchases under the November 2023 purchase authorization, and the Company did not repurchase shares of common stock during the year ended December 31, 2025. As of December 31, 2025, the Company has approximately $ 6.0 million remaining under this share repurchase authorization. During the years ended December 31, 2023, 2024, and 2025, the Company was deemed to have repurchased 91,855 , 122,186 , and 181,387 shares, respectively, of common stock forfeited by employees to satisfy minimum tax-withholding requirements in connection with the vesting of restricted stock grants. These repurchases were not part of the stock repurchase programs authorized by the Company’s Board of Directors as described above. Note 12. 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. 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. 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 year ended December 31, 2025. No shares of preferred stock were issued or outstanding at December 31, 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 Company’s Board of Directors, for each dividend period. During the years ended December 31, 2023, 2024, and 2025, $ 6.0 million, $ 6.1 million, and $ 2.8 million of dividends were declared and paid on the Series A Senior Preferred Stock dividends, 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 for any redemption of the securities prior to June 30, 2025. 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): Series A Senior Preferred Stock (plus accrued and unpaid dividends) 40,068 Make whole payment 3,993 Early redemption premium 2,915 Liquidation Preference $ 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 . Note 13. Contingencies The Company accrues for costs associated with contingencies including, but not limited to, regulatory compliance and legal matters when such costs are probable and can be reasonably estimated. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved. The Company bases these accruals on management’s estimate of such costs, which may vary from the ultimate costs and expenses, associated with any such contingency. From time to time the Company may be involved in legal matters in the normal course of its business. 131 Note 14. Concentration Students utilize various payment sources and programs to finance their education expenses, including funds from: TA programs, VA education benefit programs, and federal student aid from Title IV programs, as well as cash and other sources. As of December 31, 2025, approximately 62 % of APUS students self-reported that they served in the military on active duty at the time of initial enrollment. Active-duty military students generally take fewer courses per year on average than non-military students. A summary of APUS Segment revenue derived from students by primary funding source is as follows: Year Ended December 31, 2023 2024 2025 DoD tuition assistance programs 48 % 46 % 41 % VA education benefits 22 % 24 % 26 % Title IV programs 17 % 17 % 19 % Cash and other sources 13 % 13 % 14 % A summary of RU Segment revenue derived from students by primary funding source is as follows: Year Ended December 31, 2023 2024 2025 Title IV programs 75 % 76 % 78 % Cash and other sources 23 % 22 % 20 % VA education benefits 2 % 2 % 2 % A summary of HCN Segment revenue derived from students by primary funding source is as follows: Year Ended December 31, 2023 2024 2025 Title IV programs 82 % 84 % 85 % Cash and other sources 16 % 15 % 14 % VA education benefits 2 % 1 % 1 % Reductions in or changes to TA, VA education benefits, Title IV programs and other payment sources could have a significant impact on the Company’s operations and financial condition. Note 15. Segment Information The Company’s Chief Executive Officer, as the chief operating decision maker, or the CODM, organizes the company, manages resource allocations, and measures performance among three operating and reportable segments: APUS, RU, and HCN. 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). The CODM does not evaluate reportable segment asset or liability information. 132 A summary of financial information by reportable segment is as follows (in thousands): Year Ended December 31, 2023 2024 2025 APUS Segment Revenue 303,303 317,049 319,842 Instructional costs and services 97,246 103,745 103,920 Selling and promotional 57,580 58,563 62,884 General and administrative 55,992 58,807 56,584 Other (1) 8,059 6,512 5,629 Income from operations before interest and income taxes 84,426 89,422 90,825 RU Segment Revenue 214,086 216,262 246,231 Instructional costs and services 140,861 133,448 139,421 Selling and promotional 66,571 58,682 64,045 General and administrative 25,401 30,324 29,876 Other (2) 84,828 15,606 8,849 (Loss) income from operations before interest and income taxes ( 103,575 ) ( 21,798 ) 4,040 HCN Segment Revenue 56,936 67,290 74,983 Instructional costs and services 38,582 43,795 46,623 Selling and promotional 4,312 6,923 7,773 General and administrative 14,182 15,989 19,285 Other (3) 1,256 1,705 2,156 Loss from operations before interest and income taxes ( 1,396 ) ( 1,122 ) ( 854 ) Corporate and Other Revenue 26,220 23,958 7,806 Instructional costs and services 16,173 14,715 7,056 Selling and promotional 4,492 4,642 2,550 General and administrative 32,664 36,841 38,837 Other (4) 652 1,196 5,439 Loss from operations before interest and income taxes ( 27,761 ) ( 33,436 ) ( 46,076 ) Total reportable segment revenue 574,325 600,601 641,056 Corporate and other revenue 26,220 23,958 7,806 Total consolidated revenue 600,545 624,559 648,862 Total reportable segment (loss) income from operations before interest and income taxes ( 20,545 ) 66,502 94,011 Corporate and other (loss) from operations before interest and income taxes ( 27,761 ) ( 33,436 ) ( 46,076 ) Total consolidated (loss) income from operations before interest and income taxes ( 48,306 ) 33,066 47,935 (1) Includes loss on assets held for sale, loss on disposal of long lived assets and depreciation and amortization expense. (2) Includes impairment of goodwill and intangible assets, loss on leases, loss on disposal of long lived assets and depreciation and amortization expense. (3) Includes loss on disposal of long lived assets and depreciation and amortization expense. (4) Includes loss on sale of subsidiary, loss on disposal of long lived assets, and depreciation and amortization expense. 133 Year Ended December 31, 2023 2024 2025 Depreciation and amortization APUS Segment 5,284 4,828 3,957 RU Segment 20,627 11,577 8,523 HCN Segment 1,253 1,704 2,109 Total reportable segment depreciation and amortization 27,164 18,109 14,589 Corporate and Other 652 1,194 1,559 Total consolidated depreciation and amortization 27,816 19,303 16,148 Interest expense, net APUS Segment 1,882 1,563 1,303 RU Segment 11 ( 6 ) 662 HCN Segment 95 216 306 Total reportable segment interest expense, net 1,988 1,773 2,271 Corporate and Other ( 6,447 ) ( 3,900 ) ( 6,501 ) Total consolidated interest expense, net ( 4,459 ) ( 2,127 ) ( 4,230 ) Income tax (benefit) expense APUS Segment 23,530 24,577 24,311 RU Segment ( 26,103 ) ( 5,519 ) 341 HCN Segment ( 211 ) ( 62 ) ( 197 ) Total reportable segment income tax (benefit) expense ( 2,784 ) 18,996 24,455 Corporate and Other ( 7,931 ) ( 8,577 ) ( 12,307 ) Total consolidated income tax (benefit) expense ( 10,715 ) 10,419 12,148 Note 16. Subsequent Events 2026 Credit Agreement On March 9, 2026, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and a syndicate of lenders, or the 2026 Credit Agreement. The 2026 Credit Agreement provides for (i) a $ 90.0 million senior secured term loan, or the 2026 Term Loan, and (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $ 40.0 million, or the 2026 Revolving Credit Facility and, together with the 2026 Term Loan, the 2026 Facilities. The 2026 Facilities are scheduled to mature on March 9, 2031, and borrowings thereunder are subject to a revolver commitment fee ranging from 0.20 % to 0.35 % and bear interest at a rate (subject to increase during an event of default) of SOFR plus a margin ranging from 1.75 % to 2.75 %, each, depending on the Company’s Consolidated Total Net Leverage Ratio. The Revolving Credit Facility replaces the Company’s existing $ 20.0 million senior secured revolving credit facility and the proceeds of the 2026 Term Loan, together with cash on hand, were used to repay the approximately $ 96.4 million principal amount outstanding under the Company’s existing term loan. Combination of APUS, RU, and HCN On March 2, 2026, the Company completed the merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving the merger, and subsequently notified ED that the merger occurred and resulted in RU and HCN being directly owned by the same legal entity that directly owns APUS. The Company currently expects to complete implementation of step two of the Combination in the third quarter of 2026. Note 17. Quarterly Financial Summary (unaudited) The following unaudited consolidated interim financial information presented should be read in conjunction with other information included in the Company’s Consolidated Financial Statements. In the opinion of management, the following unaudited consolidated financial information reflects all adjustments necessary for the fair presentation of the results of interim periods. Historical results are not necessarily indicative of the results of operations to be expected for future periods. The 134 following tables set forth selected unaudited quarterly financial information for each of the Company’s last eight quarters (in thousands, except per share data): 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 2024 Revenue $ 154,432 $ 152,895 $ 153,122 $ 164,110 Income from operations before income taxes 5,056 1,435 3,498 20,950 Net income (loss) available to common stockholders ( 1,019 ) ( 1,160 ) 731 11,505 Net income (loss) per common share: Basic $ ( 0.06 ) $ ( 0.07 ) $ 0.04 $ 0.65 Diluted $ ( 0.06 ) $ ( 0.06 ) $ 0.04 $ 0.63 2025 Revenue $ 164,551 $ 162,766 $ 163,215 $ 158,330 Income from operations before income taxes 11,359 5,917 8,628 17,801 Net income (loss) available to common stockholders 7,461 ( 324 ) 5,560 12,608 Net income (loss) per common share: Basic $ 0.42 $ ( 0.02 ) $ 0.31 $ 0.70 Diluted $ 0.41 $ ( 0.02 ) $ 0.30 $ 0.67 135 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.