What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-11 compared with 2025-11-10 · 165 added, 334 removed, 357 unchanged (58% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

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

As of March 31, 2026 As of December 31, 2025

ASSETS (Unaudited)

5 unchanged sentences

Income tax receivable 3,267 3,458

Assets held for sale — 24,469

Total current assets 282,127 259,816

13 unchanged sentences

Lease liabilities, current 11,182 11,374

Long-term debt, current 5,063 —

Total current liabilities 94,536 75,050

4 unchanged sentences

Stockholders’ equity:

Preferred stock, $ .01 par value;

10,000,000 shares authorized;

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

Common stock, $ .01 par value;

3 unchanged sentences

Additional paid-in capital 305,750 311,119

Accumulated other comprehensive loss ( 27 ) ( 7 )

Accumulated deficit ( 29,108 ) ( 41,805 )

Accumulated other comprehensive gain — ( 18 )

Accumulated earnings (deficit) 231 ( 16,500 )

Total stockholders’ equity 306,165 294,782

4 unchanged sentences

(In thousands, except per share amounts)

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

2025 2024 2025 2024

(Unaudited) (Unaudited)

Three Months Ended March 31,

Revenue $ 174,738 $ 164,551

4 unchanged sentences

Depreciation and amortization 4,154 3,992

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

Loss on assets held for sale (Note 2) — 1,527

Loss on leases (Note 5) 77 — 77 3,715

Loss on disposals of long-lived assets 154 230

1 unchanged sentence

Income from operations before interest and income taxes 21,643 12,246

Loss on extinguishment of debt (Note 7) ( 1,672 ) —

Interest expense, net ( 725 ) ( 887 )

1 unchanged sentence

Income tax expense 1,515 2,466

Equity investment loss — — — ( 4,407 )

Net income $ 17,731 $ 8,893

Preferred stock dividends — 1,432

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

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

Income (loss) per common share:

Net income available to common stockholders $ 17,731 $ 7,461

Income per common share:

Basic $ 0.97 $ 0.42

7 unchanged sentences

(In thousands)

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

2025 2024 2025 2024

(Unaudited) (Unaudited)

Three Months Ended March 31,

Net income $ 17,731 $ 8,893

Other comprehensive gain (loss), net of tax:

Unrealized gain (loss) on hedging derivatives 10 ( 93 ) ( 36 ) 444

Unrealized loss on hedging derivatives — ( 63 )

Tax effect — 17

Unrealized gain (loss) on hedging derivatives, net of taxes 1 ( 70 ) ( 25 ) 334

Reclassification of loss (gain) to net income — ( 807 ) 7 ( 2,378 )

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

Reclassification of gain to net income 24 7

Tax effect ( 6 ) ( 2 )

Reclassifications of loss (gain) to net income, net of taxes — ( 607 ) 5 ( 1,788 )

Reclassifications of gain to net income, net of taxes 18 5

Total other comprehensive gain (loss) 18 ( 41 )

Comprehensive income (loss) $ 5,561 $ 1,585 $ 18,929 $ 1,695

Comprehensive income $ 17,749 $ 8,852

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

2 unchanged sentences

(In thousands, except share amounts)

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

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

Preferred Stock Common Stock

1 unchanged sentence

Balance as of December 31, 2025 — $ — 18,125,860 $ 181 $ 311,119 $ ( 18 ) $ ( 16,500 ) $ 294,782

Preferred stock dividends — — — — — — ( 1,432 ) ( 1,432 )

Exercise of stock options — — 470 — 17 — — 17

2 unchanged sentences

Stock-based compensation — — — — 2,327 — — 2,327

Other comprehensive loss — — — — — ( 41 ) — ( 41 )

Repurchased and retired shares of common stock — — ( 17,840 ) — — — ( 1,000 ) ( 1,000 )

Other comprehensive gain — — — — — 18 — 18

Net income — — — — — — 17,731 17,731

Balance as of March 31, 2026 — $ — 18,411,154 $ 184 $ 305,750 $ — $ 231 $ 306,165

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

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

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

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

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

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

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

Other comprehensive income — — — — — 20 — 20

Net income — — — — — — 4,496 4,496

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

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

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

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

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

Other comprehensive income — — — — — 1 1

Net income — — — — — — 5,560 5,560

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

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

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands, except share amounts)

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

Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Earnings (Deficit) Total Stockholders’ Equity

Preferred Stock Common Stock

2 unchanged sentences

Preferred stock dividends — — — — — — ( 1,432 ) ( 1,432 )

Issuance of common stock under employee benefit plans — — 331,781 3 ( 3 ) — — —

Deemed repurchased shares of common and restricted stock for tax withholding — — ( 113,911 ) ( 1 ) ( 1,339 ) — — ( 1,340 )

Stock-based compensation — — — — 1,918 — — 1,918

Repurchased and retired shares of common stock — — ( 251,146 ) ( 2 ) — — ( 2,766 ) ( 2,768 )

Other comprehensive loss — — — — — ( 294 ) — ( 294 )

Net income — — — — — — 516 516

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

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

Exercise of stock options — — 14,431 — 143 — — 143

4 unchanged sentences

Net income — — — — — — 8,893 8,893

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

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

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

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

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

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

Net income — — — — — — 2,262 2,262

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

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

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

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating activities

2 unchanged sentences

Depreciation and amortization 4,154 3,992

Loss on extinguishment of debt 1,627 —

Amortization of debt issuance costs 235 348

Stock-based compensation 2,327 2,263

Equity investment loss — 4,407

Deferred income taxes 929 1,245

1 unchanged sentence

Loss on disposals of long-lived assets 154 230

Loss on sale of subsidiary 2,764 —

Changes in operating assets and liabilities:

10 unchanged sentences

Investing activities

Cash outlay from the sale of subsidiary ( 709 ) —

Capital expenditures ( 2,527 ) ( 3,902 )

Proceeds from the sale of real property — 500

Net cash provided by (used in) investing activities 10,454 ( 17,728 )

Net cash used in investing activities ( 2,527 ) ( 3,402 )

Financing activities

2 unchanged sentences

Preferred stock dividends paid — ( 1,432 )

Cash paid for redemption of preferred stock ( 43,192 ) —

Cash paid for principal on borrowings and finance leases ( 96,478 ) ( 53 )

Cash received from borrowings 90,000 —

Cash paid for debt issuance costs ( 1,107 ) —

Net cash used in financing activities ( 16,278 ) ( 5,035 )

9 unchanged sentences

Nature of the Business

American Public Education, Inc., or APEI, which together with its subsidiaries is referred to as the “Company,” is a provider of online and campus-based postsecondary education 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 20 campuses in six 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 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 September 30, 2025, no longer includes the accounts of GSUSA.

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

Please refer to “Note 2.

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

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

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

• 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.

American Public Education, Inc., or APEI, together with its subsidiary referred to as the Company, is a provider of online and campus-based postsecondary education to students.

Effective March 2, 2026, the Company completed the merger of the legal entities that owned and operated the Company’s three institutions, American Public University System, or APUS, Rasmussen University, or RU, and Hondros College of Nursing, or HCN, with American Public University System, Inc.

surviving the merger.

The Company provides education services through the following reportable segments:

• Military+, which was formerly the APUS Segment, provides online postsecondary education directed primarily at the needs of the military, veterans, extended military and veteran families, and other public service and service-minded communities, through APUS, which includes American Military University and American Public University.

• Health+, consisting of the businesses that formerly comprised the RU Segment and the HCN Segment, provides nursing- and health sciences-focused and other postsecondary education, including business, technology, and education, to students through RU and HCN.

Until the planned combination of APUS, RU, and HCN into one consolidated institution named American Public University System, or the Combination, is approved by the U.S.

Department of Education, or ED, and the U.S.

Department of Education expands the scope of APUS’s certification to include RU and HCN, each institution will continue to operate as a separately accredited institution with its own education regulatory approvals.

APUS, RU, and HCN 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 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 accompanying Consolidated Financial Statements reflect the operations of American Public Training LLC, which is referred to herein as Graduate School USA, or GSUSA, through July 25, 2025, or the GSUSA Sale Date.

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.

Prior period segment disclosures have been recast to conform to the current period presentation.

Please refer to “Note 8.

Segment Information” for more information on the Company’s reporting segments.

Segment Information” for more information on the Company’s reportable segments.

Summary of Significant Accounting Policies

1 unchanged sentence

Basis of Presentation and Accounting

The accompanying unaudited, interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

The Company has prepared the accompanying unaudited, interim consolidated financial statements 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 acquisition method to be used for all 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 companies to use the acquisition method 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.

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.

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.

Principles of Consolidation

The accompanying unaudited interim Consolidated Financial Statements include the accounts of APEI and its wholly owned subsidiaries.

The accompanying unaudited interim consolidated financial statements reflect the accounts of APEI and its wholly owned subsidiary.

All material intercompany transactions and balances have been eliminated in consolidation.

The Company’s reportable segments are determined in accordance with FASB ASC 280, Segment Reporting, and are based upon how the chief operating decision maker, or CODM, analyzes performance and makes decisions.

The Company organizes its business across two reportable segments:

Military+ and Health+.

Each segment represents an educational division that provides a variety of postsecondary academic programs.

Unaudited Interim Consolidated Financial Information

15 unchanged sentences

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

As of December 31, 2024, restricted cash included a $ 25.4 million restricted certificate of deposit to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020

composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required.

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

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

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

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

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

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

restricted cash ( 1,799 ) ( 27,015 )

Total unrestricted cash $ 191,345 $ 131,926

Total restricted cash as of March 31, 2026, and December 31, 2025, was $ 3.4 million and $ 2.4 million, respectively.

Assets Held for Sale

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

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

Assets held for sale represent excess real property located in Charles Town, West Virginia of the Company’s Military+ segment.

The Company classifies long-lived assets 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, the properties are recorded at the lower of the carrying value or fair value, less costs to sell, until such time the assets are sold.

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

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

Assets Held for Sale” to the Consolidated Financial Statements.

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

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

The sale was completed in June 2025 for net sales proceeds of

$ 6.6 million.

There were no assets held for sale as of March 31, 2026, and December 31, 2025.

Goodwill and Intangible Assets

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

Goodwill and indefinite-lived intangible assets are not amortized.

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) :

1 unchanged sentence

The Company’s goodwill and intangible assets are deductible for tax purposes.

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 annually assesses goodwill and intangible assets for impairment in the fourth quarter, or more frequently if events or circumstances indicate that goodwill might be impaired or the carrying amount of an asset may not be recoverable.

The Company annually assesses goodwill for impairment, or more frequently if events or circumstances indicate that goodwill might be impaired.

Goodwill impairment testing consists of an optional qualitative assessment as well as a quantitative test.

1 unchanged sentence

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, and such assets are not recoverable, the difference between the two values is recorded as an 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 5.

Goodwill and Intangible Assets” to the Consolidated Financial Statements.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Series A Senior Preferred Stock

The Company redeemed all 400 outstanding shares of the Series A Senior Preferred Stock in June 2025.

Accordingly, there were no preferred stock dividends declared or paid during the three months ended March 31, 2026.

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

Stock-based Compensation

2 unchanged sentences

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 an 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, or the Board.

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.

3 unchanged sentences

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.

Estimating the percentage of share-based awards that are expected to vest, and in the case of performance stock units, the level of performance that will be achieved and the number of shares that will be earned, requires judgment.

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 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.

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

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

2025 2024 2025 2024

(Unaudited) (Unaudited)

If actual results differ significantly from these estimates, stock-based compensation expense could be higher or lower and have a material impact on the accompanying 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.

Stock-based compensation expense for the three months ended March 31, 2026, and 2025, was as follows (in thousands):

Three Months Ended March 31,

Instructional costs and services $ 233 $ 239

11 unchanged sentences

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

During the three and nine months ended September 30, 2025, the Company recognized an aggregate incentive-based compensation expense of $ 2.3 million and $ 7.3 million, respectively, compared to an aggregate expense of $ 1.7 million and $ 5.4 million for the three and nine months ended September 30, 2024, respectively.

During the three months ended March 31, 2026 and 2025, the Company recognized an aggregate incentive-based compensation expense of $ 1.9 million and $ 1.8 million, respectively.

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

4 unchanged sentences

Disaggregation of Revenue

In the following table, revenue, shown net of grants and scholarships, is disaggregated by type of service provided.

In the following table, revenue, shown net of grants and scholarships, is disaggregated by source.

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

Three Months Ended September 30, 2025

APUS RU HCN Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 81,583 $ 51,256 $ 15,138 $ 808 $ 148,785

Graduation fees 1,225 — — — 1,225

Textbook and other course materials — 8,853 2,962 — 11,815

Other fees 329 721 340 — 1,390

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

Three Months Ended September 30, 2024

APUS RU HCN Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 76,037 $ 44,263 $ 13,014 $ 8,044 $ 141,358

Graduation fees 794 — — — 794

Textbook and other course materials — 7,814 2,120 — 9,934

Other fees 150 527 359 — 1,036

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

Nine Months Ended September 30, 2025

APUS RU HCN Corporate and Other Consolidated

Three Months Ended March 31, 2026

Military+ Health+ Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 88,005 $ 70,920 $ ( 61 ) $ 158,864

3 unchanged sentences

Total Revenue $ 89,443 $ 85,356 $ ( 61 ) $ 174,738

Nine Months Ended September 30, 2024

APUS RU HCN Corporate and Other Consolidated

Three Months Ended March 31, 2025

Military+ Health+ Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 82,551 $ 64,115 $ 3,678 $ 150,344

3 unchanged sentences

Total Revenue $ 83,946 $ 76,927 $ 3,678 $ 164,551

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.

For the three months ended March 31, 2026, Corporate and Other includes the elimination of intersegment revenue for courses taken by employees of one reportable segment at another reportable segment.

For the three months ended March 31, 2025, Corporate and Other includes tuition and contract training revenue earned by GSUSA and the elimination of intersegment revenue for courses taken by employees of one segment at other segments.

Contract Balances and Performance Obligations

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

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

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

The Company had no contract assets or deferred contract costs as of March 31, 2026, and December 31, 2025.

The Company recognizes a contract liability, or deferred revenue, when a student begins a course or starts a term.

Deferred revenue at March 31, 2026, was $ 25.2 million and includes $ 16.6 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $ 8.6 million in consideration received in advance for future courses or terms, or student deposits.

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

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

Deferred revenue at December 31, 2025, was $ 23.0 million and includes $ 15.0 million in future revenue that had not yet been earned for courses and terms that were 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 accompanying Consolidated Balance Sheets.

The Company accounts for receivables in accordance with FASB ASC 310, Receivables .

When the Company begins providing performance obligations, a contract receivable is created, resulting in accounts receivable on the accompanying 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.

6 unchanged sentences

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

Interest charged by HCN on payment plans was immaterial for the periods presented.

Assets Held for Sale

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

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

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

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.

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

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

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

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

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

Interest charged by HCN on payment plans was not material for the periods presented.

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

10 unchanged sentences

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

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

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

Excluding a campus being closed in 2026, the Company leases 27 campuses located in eight states for the Health+ segment 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.

8 unchanged sentences

There are no variable lease payments.

Lease expense for the three and nine months ended September 30, 2025, was $ 3.9 million and $ 13.3 million, respectively, compared to $ 4.7 million and $ 14.2 million for the three and nine months ended September 30, 2024, respectively.

Lease expense for the three months ended March 31, 2026, was $ 3.5 million compared to $ 4.9 million for the three months ended March 31, 2025.

Lease expense for the three months ended March 31, 2025, included lease expense for leased classroom and administrative office space leased by GSUSA prior to the GSUSA Sale Date.

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

Cash paid for amounts included in the present value of operating lease liabilities during the three and nine months ended September 30, 2025, was $ 4.3 million and $ 13.8 million, respectively, compared to $ 4.5 million and $ 12.8 million for the three and nine months ended September 30, 2024, respectively, and is included in operating cash flows.

Loss on Leases

During the three months ended March 31, 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 Company’s RU Segment began consolidating two Minnesota campuses, and, as a result, during the three months ended June 30, 2024, the Company paid a lease termination fee of $ 1.2 million related to the consolidation and recorded a $ 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 intends to voluntarily close two Wisconsin campuses, effective December 31, 2025, and 2026, respectively.

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

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

Cash paid for amounts included in the present value of operating lease liabilities during the three months ended March 31, 2026, was $ 3.5 million, compared to $ 4.7 million for the three months ended March 31, 2025, and is included in operating cash flows.

Finance Leases

1 unchanged sentence

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

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

As of March 31, 2026, 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 accompanying Consolidated Balance Sheets.

Lease amortization expense associated with the Company’s finance leases was $ 46,000 and $ 0.1 million for the three and nine months ended September 30, 2025, respectively, compared to $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2024, and is recorded in Depreciation and amortization expense in the accompanying Consolidated Statements of Income.

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

Lease amortization expense associated with the Company’s finance leases was $ 46,000 for both the three months ended March 31, 2026, and 2025, and is recorded in Depreciation and amortization expense in the accompanying Consolidated Statements of Income.

The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of March 31, 2026 (in thousands):

Maturity of Lease Liabilities (Unaudited) Operating Leases Finance Leases

3 unchanged sentences

2029 10,831 —

2029 10,913 —

2030 11,099 —

2032 and beyond 11,468 —

18 unchanged sentences

Goodwill and Intangible Assets

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

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

Factors considered included RU and HCN’s financial and enrollment performance against internal targets, economic factors, and the continued favorable growth outlook for nursing education.

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

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

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

During the three months ended March 31, 2026, in connection with the Combination and just prior to the merger of the legal entities that owned and operated the Company’s three institutions, the Company completed a quantitative assessment of goodwill and indefinite-lived intangibles for the Company’s prior reportable segments RU and HCN.

The assessment concluded that the fair value of goodwill for RU and HCN exceeded their carrying values by approximately $ 90.8 million, or 60 %, and $ 26.0 million, or 55 %, respectively.

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

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

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

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

Income (Loss) Per Common Share

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

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

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

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

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

2025 2024 2025 2024

(Unaudited) (Unaudited)

Income (loss) per common share

Income Per Common Share

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

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

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

and option awards.

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

Three Months Ended March 31,

Income per common share

Net income $ 17,731 $ 8,893

Preferred stock dividend — 1,432

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

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

Net income available to common stockholders $ 17,731 $ 7,461

Basic weighted average shares outstanding 18,282 17,840

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

Diluted income (loss) per common share

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

Income per common share $ 0.97 $ 0.42

Diluted income per common share

Net income available to common stockholders $ 17,731 $ 7,461

Basic weighted average shares outstanding 18,282 17,840

1 unchanged sentence

Diluted weighted average shares outstanding 18,804 18,417

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

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

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

2025 2024 2025 2024

(Unaudited) (Unaudited)

Antidilutive securities:

Stock options 4 104 29 110

Restricted shares — — 25 22

Total antidilutive securities 4 104 54 132

Diluted income per common share $ 0.94 $ 0.41

There were no anti-dilutive options for the three months ended March 31, 2026.

For the three months ended March 31, 2025, there were 73,000 anti-dilutive stock options that were excluded from the calculation of diluted earnings per share.

Long-Term Debt

In connection with the acquisition of RU, 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 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 RU acquisition, was fully funded on September 1, 2021, or the RU Closing Date, and is presented net of deferred financing fees on the accompanying Consolidated Balance Sheets.

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

As of September 30, 2025, and December 31, 2024, the remaining unamortized deferred financing fees were $ 2.1 million and $ 3.0 million, respectively.

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

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

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

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

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

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

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

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

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

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

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

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

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

Preferred Stock” to the Consolidated Financial Statements.

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

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

On March 9, 2026, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent, or the 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, or, together with the 2026 Term Loan, the 2026 Facilities, $ 25.0 million of which may be utilized for the issuance of letters of credit.

The 2026 Revolving Credit Facility also includes a $ 5.0 million subfacility for swing line loans.

The 2026 Facilities are scheduled to mature on March 9, 2031, or the Maturity Date.

The 2026 Credit Agreement replaces that certain Credit Agreement dated as of September 1, 2021, as amended, by and among the Company, as borrower, the lenders from time to time party thereto and Macquarie Capital Funding, LLC, as administrative agent and collateral agent, or the Prior Credit Agreement.

The 2026 Revolving Credit Facility replaces the Company’s prior $ 20.0 million senior secured revolving credit facility under the Prior Credit Agreement, 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 prior $ 175.0 million term loan under the Prior Credit Agreement.

In connection with this extinguishment of debt, the Company recorded a loss on extinguishment of debt of $ 1.7 million, primarily related to the write-off of unamortized deferred financing costs.

The loss is included in loss on extinguishment of debt in the accompanying Consolidated Statements of Income for the three months ended March 31, 2026.

Under the 2026 Credit Agreement, outstanding borrowings under the 2026 Facilities bear interest at a rate per annum (subject to increase during an event of default) of a Secured Overnight Financing Rate, or SOFR rate, plus a margin ranging from 1.75 % to 2.75 %, depending on the Company’s Consolidated Total Net Leverage Ratio (as defined in the 2026 Credit Agreement).

A commitment fee ranging from 0.20 % to 0.35 %, also depending on the Company’s Consolidated Total Net Leverage Ratio, is payable quarterly in arrears based on the average daily unused amount of the commitments under the 2026 Revolving Credit Facility.

The Consolidated Total Net Leverage Ratio reflects a ratio of consolidated total indebtedness, net of unrestricted cash and cash equivalents up to $ 100.0 million, to consolidated EBITDA.

As of March 31, 2026, the interest rate applicable to the 2026 Facilities was 5.42 %.

Interest expense was $ 2.0 million for the three months ended March 31, 2026, compared to $ 2.4 million for the three months ended March 31, 2025.

The Company is required to make principal payments of the 2026 Term Loan on the last day of each quarter, commencing with the quarter ending June 30, 2026, in an amount equal to approximately $ 1.1 million for the first three quarterly payments, approximately $ 1.7 million for the following eight quarterly payments and approximately $ 2.3 million for the final eight quarterly payments prior to the Maturity Date.

Quarterly principal payments of the 2026 Term Loan will continue until the Maturity Date, on which date (i) the outstanding principal amount of the 2026 Term Loan, together with accrued and unpaid interest thereon and other amounts owed under the 2026 Credit Agreement, will be required to be paid in full and (ii) the outstanding principal amount of any borrowings under the 2026 Revolving Credit Facility, together with accrued and unpaid interest thereon and any other amounts owed under the 2026 Revolving Credit Facility, will be required to be paid in full.

Subject to certain exceptions, the Company is also required to make mandatory prepayments of the 2026 Term Loan with the proceeds of asset sales, casualty and condemnation events, and unpermitted debt issuances.

The Company may make voluntary prepayments of the borrowings under the 2026 Facilities at any time without premium or penalty.

The 2026 Facilities are and will be guaranteed by APUS and certain of the Company’s future subsidiaries that are required to become a party thereto as guarantors, or Guarantors.

The obligations of the Company and the Guarantors under the 2026 Credit Agreement are secured by a pledge of substantially all of their respective assets, pursuant to the terms of the Security and Pledge Agreement dated as of March 9, 2026, by and among the Agent, the Company, and the Guarantors from time to time party thereto.

The 2026 Credit Agreement contains customary affirmative and negative covenants, including limitations on the Company’s and its subsidiaries’ ability, 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, make capital expenditures, 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 2026 Facilities.

In addition, the 2026 Credit Agreement contains financial covenants that require the Company to (i) maintain a Consolidated Total Net Leverage Ratio of no greater than 2.50 to 1.00, (ii) maintain a Consolidated Interest Coverage Ratio of no less than 2.50 to 1.00, and (iii) maintain a minimum balance of domestic unrestricted cash and cash equivalents of $ 40.0 million.

As of March 31, 2026, the Company was in compliance with all financial covenants.

Long-term debt consists of the following as of March 31, 2026, and December 31, 2025 (in thousands):

As of March 31, 2026 As of December 31, 2025

Credit agreement $ 90,000 $ 96,425

3 unchanged sentences

Long-Term Debt $ 83,203 $ 94,665

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

Scheduled maturities of long-term debt as of March 31, 2026, are as follows (in thousands):

Maturities of Long-Term Debt (Unaudited) Loan Payments

2027 $ 96,425

2026 (remaining) $ 3,375

Total $ 90,000

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 that the Term SOFR rate exceeded 1.78 %.

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

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

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

Segment Information

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

APUS, RU, and HCN.

Corporate and Other includes 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.

The Company’s Chief Executive Officer, as the CODM, organizes the company, manages resource allocations, and measures performance among the Company’s reportable segments.

In connection with the planned Combination, the Company now has two reportable segments:

Military+ and Health+.

The Company has recast its historical results to reflect this change.

For additional details, please refer to “Note 1.

Nature of the Business” to the accompanying Consolidated Financial Statements.

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

2 unchanged sentences

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

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

2025 2024 2025 2024

(In thousands) (In thousands)

Three Months Ended March 31,

(In thousands)

Military+ Segment

Revenue $ 89,443 $ 83,946

2 unchanged sentences

General and administrative 14,391 14,234

1,007 1,216 4,599 3,722

Income from operations before interest and income taxes $ 30,718 $ 24,126

Revenue 60,830 52,604 179,602 158,773

Instructional costs and services 35,923 34,814 104,427 101,292

Selling and promotional 16,715 15,846 49,517 47,180

General and administrative 7,266 6,462 22,291 22,120

2,166 3,091 6,655 13,582

Loss from operations before interest and income taxes ( 1,240 ) ( 7,609 ) ( 3,288 ) ( 25,401 )

Health+ Segment

Revenue $ 85,356 $ 76,927

2 unchanged sentences

General and administrative 12,927 12,050

537 511 1,575 1,198

Loss from operations before interest and income taxes ( 873 ) ( 771 ) ( 2,021 ) ( 1,819 )

Income (loss) from operations before interest and income taxes $ 517 $ ( 818 )

Corporate and Other

Revenue 808 8,044 7,866 18,642

$ ( 61 ) $ 3,678

Instructional costs and services ( 23 ) 3,179

1 unchanged sentence

General and administrative 8,972 10,123

4,282 283 5,035 886

Loss from operations before interest and income taxes $ ( 9,592 ) $ ( 11,062 )

8 unchanged sentences

(3) Includes depreciation and amortization expense.

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

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

2025 2024 2025 2024

(In thousands) (In thousands)

(4) Includes the elimination of intersegment revenue for courses taken by employees of one reportable segment at another reportable segment.

Three Months Ended March 31,

(In thousands)

Depreciation and amortization

APUS Segment 939 1,216 2,951 3,671

RU Segment 2,065 3,069 6,342 9,684

HCN Segment 537 512 1,575 1,199

Military+ Segment $ 1,055 $ 1,029

Health+ Segment 2,716 2,630

Total reportable segment depreciation and amortization $ 3,771 $ 3,659

2 unchanged sentences

Interest expense, net

APUS Segment 401 394 1,082 1,274

RU Segment 87 ( 9 ) 601 ( 19 )

HCN Segment 71 71 241 123

Military+ Segment $ 423 $ 319

Health+ Segment 151 466

Total reportable segment interest expense, net $ 574 $ 785

2 unchanged sentences

Income tax expense (benefit)

APUS Segment 8,556 8,580 22,320 23,425

RU Segment ( 394 ) ( 3,051 ) ( 1,161 ) ( 9,148 )

HCN Segment ( 263 ) ( 187 ) ( 603 ) ( 516 )

Military+ Segment $ 7,758 $ 7,734

Health+ Segment 166 ( 421 )

Total reportable segment income tax expense $ 7,924 $ 7,313

8 unchanged sentences

The Company’s students utilize various payment sources and programs to finance their education expenses, including funds from:

Department of Defense, or DoD, tuition assistance programs, or TA;

Department of Defense, or DoD, tuition assistance programs;

education benefit programs administered by the U.S.

2 unchanged sentences

and cash and other sources.

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

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

(Unaudited) (Unaudited)

2025 2024 2025 2024

A summary of Military+ revenue derived from students by primary funding source is as follows:

Three Months Ended March 31,

DoD tuition assistance programs 45 % 44 %

2 unchanged sentences

Cash and other sources 14 % 14 %

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

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

(Unaudited) (Unaudited)

2025 2024 2025 2024

A summary of Health+ revenue by institution, RU and HCN, derived from students by primary funding source is as follows:

Three Months Ended March 31,

Title IV programs 76 % 77 %

1 unchanged sentence

VA education benefits 2 % 1 %

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

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

(Unaudited) (Unaudited)

2025 2024 2025 2024

Three Months Ended March 31,

HCN 2026 2025

Title IV programs 84 % 85 %

1 unchanged sentence

VA education benefits 1 % 1 %

Preferred Stock

On December 28, 2022, APEI issued 400 shares of the Series A Senior Preferred Stock, $ 0.01 par value per share, or Series A Senior Preferred Stock, to affiliates of existing common stockholders of APEI for an aggregate purchase price of $ 40.0 million.

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

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 nine months ended September 30, 2025.

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

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

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

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

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

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

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

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

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

Subsequent Event

Management Transition

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

Codispoti as Chief Financial Officer.

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

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

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

Sunderland’s departure.

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

What changed 10-Q

Item 1. Financial Statements