What changed in this filing

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Item 1. Financial Statements

2026-08-10 compared with 2026-05-11 · 193 added, 97 removed, 425 unchanged (41% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

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

As of June 30, 2026 As of December 31, 2025

ASSETS (Unaudited)

1 unchanged sentence

Cash, cash equivalents, and restricted cash (Note 2) $ 146,548 $ 176,499

Short-term investments (Note 3) 76,256 —

Accounts receivable, net of allowance of $ 21,754 in 2026 and $ 21,113 in 2025

4 unchanged sentences

Property and equipment, net 69,534 70,598

Operating lease assets, net 54,925 57,686

Operating lease assets, net (Note 5) 55,390 57,686

Deferred income taxes 36,613 39,176

Intangible assets, net 28,221 28,221

Goodwill 59,593 59,593

Intangible assets, net (Note 6) 28,221 28,221

Goodwill (Note 6) 59,593 59,593

Other assets, net 5,875 6,328

6 unchanged sentences

Deferred revenue and student deposits 23,928 23,016

Lease liabilities, current 11,182 11,374

Long-term debt, current 5,063 —

Lease liabilities, current (Note 5) 11,109 11,374

Long-term debt, current (Note 8) 5,625 —

Total current liabilities 86,956 75,050

Lease liabilities, long-term 54,010 56,921

Long-term debt, net 83,203 94,665

Lease liabilities, long-term (Note 5) 55,098 56,921

Long-term debt, net (Note 8) 81,635 94,665

Total liabilities 223,689 226,636

3 unchanged sentences

100,000,000 shares authorized;

18,411,154 issued and outstanding in 2026;

18,125,860 issued and outstanding in 2025

18,367,887 and 18,125,860 ;

issued and outstanding in 2026 and 2025

Additional paid-in capital 307,878 311,119

Accumulated other comprehensive gain — ( 18 )

Accumulated earnings (deficit) 231 ( 16,500 )

Accumulated other comprehensive loss ( 7 ) ( 18 )

Retained earnings (deficit) 6,003 ( 16,500 )

Total stockholders’ equity 314,057 294,782

4 unchanged sentences

(In thousands, except per share amounts)

Three Months Ended March 31,

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

2026 2025 2026 2025

(Unaudited) (Unaudited)

Revenue $ 171,731 $ 162,766 $ 346,469 $ 327,317

9 unchanged sentences

Loss on extinguishment of debt (Note 8) — — ( 1,672 ) —

Interest expense, net ( 725 ) ( 887 )

Interest income (expense), net 634 ( 1,108 ) ( 91 ) ( 1,995 )

Income before income taxes 14,160 5,917 33,406 17,276

Income tax expense 1,515 2,466

Income tax expense (Note 2) 4,387 1,421 5,902 3,887

Net income $ 9,773 $ 4,496 $ 27,504 $ 13,389

Preferred stock dividends — 1,319 — 2,751

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

Income per common share:

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

Net income (loss) available to common stockholders $ 9,773 $ ( 324 ) $ 27,504 $ 7,137

Income (loss) per common share (Note 7):

Basic $ 0.53 $ ( 0.02 ) $ 1.50 $ 0.40

7 unchanged sentences

(In thousands)

Three Months Ended March 31,

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

2026 2025 2026 2025

(Unaudited) (Unaudited)

Net income $ 9,773 $ 4,496 $ 27,504 $ 13,389

Other comprehensive gain (loss), net of tax:

Unrealized loss on hedging derivatives — ( 63 )

Tax effect — 17

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

Reclassification of gain to net income 24 7

Tax effect ( 6 ) ( 2 )

Unrealized loss on short-term investments, net of taxes ( 7 ) — ( 7 ) —

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

Unrealized (loss) gain, net of taxes ( 7 ) 20 ( 7 ) ( 26 )

Reclassification of gain to net income, net of taxes — — 18 5

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

Total other comprehensive gain (loss) 18 ( 41 )

Total other comprehensive (loss) gain ( 7 ) 20 11 ( 21 )

Comprehensive income $ 9,766 $ 4,516 $ 27,515 $ 13,368

3 unchanged sentences

(In thousands, except share amounts)

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

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

Preferred Stock Common Stock

6 unchanged sentences

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

Other comprehensive gain — — — — — 18 — 18

Other comprehensive income — — — — — 18 — 18

Net income — — — — — — 17,731 17,731

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

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

Exercise of stock options — — 6,925 — 37 — — 37

Issuance of common stock under employee benefit plans — — 22,742 — — — — —

Deemed repurchased shares of common and restricted stock for tax withholding — — ( 2,569 ) — ( 141 ) — — ( 141 )

Stock-based compensation — — — — 2,232 — — 2,232

Repurchased and retired shares of common stock — — ( 70,365 ) ( 1 ) — — ( 4,001 ) ( 4,002 )

Other comprehensive loss — — — — — ( 7 ) — ( 7 )

Net income — — — — — — 9,773 9,773

Balance as of June 30, 2026 — $ — 18,367,887 $ 183 $ 307,878 $ ( 7 ) $ 6,003 $ 314,057

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

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

Preferred Stock Common Stock

9 unchanged sentences

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

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

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

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

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

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

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

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

Other comprehensive 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

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

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

5 unchanged sentences

Stock-based compensation 4,559 4,501

Accretion of investment discounts ( 348 ) —

Deferred income taxes 2,567 1,354

14 unchanged sentences

Capital expenditures ( 7,266 ) ( 7,600 )

Purchases of short-term investments ( 75,919 ) —

Proceeds from the sale of real property — 22,950

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

Net cash (used in) provided by investing activities ( 83,185 ) 15,350

Financing activities

2 unchanged sentences

Preferred stock dividends paid — ( 2,751 )

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

Cash paid for principal on borrowings and finance leases ( 97,657 ) ( 107 )

2 unchanged sentences

Net cash used in financing activities ( 22,207 ) ( 49,519 )

Net increase in cash, cash equivalents, and restricted cash 44,499 28,561

Net (decrease) increase in cash, cash equivalents, and restricted cash ( 29,951 ) 17,638

Cash, cash equivalents, and restricted cash at beginning of period 176,499 158,941

8 unchanged sentences

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.

Effective March 2, 2026, the Company completed the merger of the legal entities that owned and operated the Company’s three institutions at the time, 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.

On August 4, 2026, the U.S.

Department of Education, or ED, approved, and we completed, the Combination of APUS, RU, and HCN into one HLC-accredited institution named American Public University System, or the System.

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.

• Military+ Segment, 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 American Military University and American Public University.

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

The System is licensed or otherwise authorized by state authorities to offer education programs to the extent it believes such licenses or authorizations are required, and the System is 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.

36 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.

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

Total restricted cash as of June 30, 2026, and December 31, 2025, was $ 1.2 million and $ 2.4 million, respectively.

Short-Term Investments

Investments with original maturities ranging from three months to one year are classified as short-term investments.

As of June 30, 2026, the Company considered its short-term investments in investment grade commercial paper and U.S.

Treasury securities as available-for-sale securities based on the Company’s intent for the respective securities.

Available-for-sale securities are carried at fair value on the accompanying Consolidated Balance Sheets, determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets.

Unrealized investment gains and losses, net of tax, are reported as a separate component of other comprehensive income.

Accretion of discounts and interest are included in interest income (expense), net.

Realized gains and losses, if any, are included in gain (loss) on investments.

Assets Held for Sale

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

Assets held for sale represent excess real property located in Charles Town, West Virginia within 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.

1 unchanged sentence

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.

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

The sale was completed in June 2025 for net sales proceeds of $ 6.6 million.

In the first quarter of 2025, APUS completed the sale of an undeveloped parcel of land classified in assets held for sale as of December 31, 2024, for net sales proceeds of $ 0.5 million.

In the second quarter of 2025, APUS completed the sale of a building classified in assets held for sale as of December 31, 2024, for net sales proceeds of $ 15.9 million.

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

There were no assets held for sale as of June 30, 2026, and December 31, 2025.

Goodwill and Intangible Assets

17 unchanged sentences

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.

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

Accordingly, there were no dividends declared or paid on the Series A Senior Preferred Stock during the three and six months ended June 30, 2026.

During the three and six months ended June 30, 2025, dividends declared and paid on the Series A Senior Preferred Stock were $ 1.4 million and $ 2.8 million, respectively.

Fair Value Measurements

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;

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.

Stock-based Compensation

12 unchanged sentences

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,

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

Stock-based compensation expense for the three and six months ended June 30, 2026, and 2025, was as follows (in thousands):

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

2026 2025 2026 2025

(Unaudited) (Unaudited)

Instructional costs and services $ 195 $ 173 $ 428 $ 411

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 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.

During the three and six months ended June 30, 2026, the Company recognized an aggregate incentive-based compensation expense of $ 2.7 million and $ 4.9 million, respectively, compared to an aggregate expense of $ 2.9 million and $ 4.7 million for the three and six months ended June 30, 2025, respectively.

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

3 unchanged sentences

All ASUs issued subsequent to the filing of the Annual Report on March 12, 2026, were assessed and determined to be either inapplicable or not expected to have a material impact on the Company’s consolidated financial position and/or results of operations.

Short-Term Investments

During the three months ended June 30, 2026, the Company began investing in short‑term investments, with original maturities ranging from three months to one year.

Short-term investments consist of the following as of June 30, 2026 (dollars in thousands):

As of June 30, 2026

Short-term investments Amortized Cost Unrealized Gain Unrealized (Loss) Fair Value

Commercial paper $ 29,113 $ — $ — $ 29,113

Treasury securities 47,154 — ( 11 ) 47,143

Total short-term investments $ 76,267 $ — $ ( 11 ) $ 76,256

There were no realized gains or losses from the sale of short-term investments for the three months ended June 30, 2026.

The unrealized losses on the Company’s short-term investments in U.S.

Treasury securities as of June 30, 2026 were caused by changes in market values primarily due to interest rate volatility.

As of June 30, 2026, there were no securities which were in an unrealized loss position for a period longer than 12 months.

There were no impairment charges recorded during the three months ended June 30, 2026.

The Company has no allowance for credit losses related to its short-term investments, as all investments are in investment grade securities.

Interest income related to the Company’s short-term investments and cash and cash equivalents was $ 1.9 million and $ 3.4 million for the three and six months ended June 30, 2026, respectively.

Available-for-sale securities are included in Level 2 and are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Disaggregation of Revenue

1 unchanged sentence

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

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Military+ Health+ Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 85,538 $ 86,216 $ ( 23 ) $ 171,731

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Military+ Health+ Corporate and Other Consolidated

4 unchanged sentences

Total Revenue $ 81,731 $ 77,655 $ 3,380 $ 162,766

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.

Six Months Ended June 30, 2026

Military+ Health+ Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 172,014 $ 143,851 $ ( 84 ) $ 315,781

Graduation fees 2,354 — — 2,354

Textbook and other course materials — 25,896 — 25,896

Other fees 613 1,825 — 2,438

Total Revenue $ 174,981 $ 171,572 $ ( 84 ) $ 346,469

Six Months Ended June 30, 2025

Military+ Health+ Corporate and Other Consolidated

Instructional services, net of grants and scholarships $ 163,069 $ 129,985 $ 7,058 $ 300,112

Graduation fees 1,997 — — 1,997

Textbook and other course materials — 22,689 — 22,689

Other fees 611 1,908 — 2,519

Total Revenue $ 165,677 $ 154,582 $ 7,058 $ 327,317

For the three and six months ended June 30, 2026, Corporate and Other includes the elimination of intersegment revenue for courses taken by employees of APEI at a reportable segment or by employees of one reportable segment at the other reportable segment.

For the three and six months ended June 30, 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 APEI at a reportable segment or by employees of one reportable segment at the other reportable segment.

Contract Balances and Performance Obligations

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

The Company had no contract assets or deferred contract costs as of June 30, 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 at June 30, 2026, was $ 23.9 million and includes $ 15.1 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $ 8.8 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.

23 unchanged sentences

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

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.

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 January 2037.

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 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.

Lease expense for the three and six months ended June 30, 2026, was $ 3.3 million and $ 6.8 million, respectively, compared to $ 4.5 million and $ 9.4 million for the three and six months ended June 30, 2025, respectively.

Lease expense for the three and six months ended June 30, 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 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.

Cash paid for amounts included in the present value of operating lease liabilities during the three and six months ended June 30, 2026, was $ 3.1 million and $ 6.6 million, respectively, compared to $ 4.8 million and $ 9.4 million for the three and six months ended June 30, 2025, respectively, 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 March 31, 2026, the total finance lease liability was $ 0.2 million, with an average interest rate of 7.00 %.

As of June 30, 2026, the total finance lease liability was $ 0.1 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 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):

Lease amortization expense associated with the Company’s finance leases was

$ 0.1 million for both the three and six months ended June 30, 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 June 30, 2026 (in thousands):

Maturity of Lease Liabilities (Unaudited) Operating Leases Finance Leases

3 unchanged sentences

2029 11,627 —

2030 10,042 —

2032 and beyond 14,202 —

18 unchanged sentences

Goodwill and Intangible Assets

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.

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.

During the three months ended June 30, 2026, the Company performed a routine qualitative assessment of the Company’s Health+ Segment goodwill and indefinite-lived intangible assets recorded.

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 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, the Company concluded it was more likely than not that the fair value of the Company’s Health+ Segment was more than the respective carrying value, and therefore, no quantitative impairment test and no impairment charge was necessary.

Income Per Common Share

1 unchanged sentence

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,

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

2026 2025 2026 2025

(Unaudited) (Unaudited)

Income per common share

1 unchanged sentence

Preferred stock dividend — 1,319 — 2,751

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

Net income available to common stockholders $ 9,773 $ ( 324 ) $ 27,504 $ 7,137

7 unchanged sentences

Diluted income per common share $ 0.52 $ ( 0.02 ) $ 1.46 $ 0.39

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.

There were no anti-dilutive options for the three and six months ended June 30, 2026.

For the three and six months ended June 30, 2025, there were 30,000 anti-dilutive stock options and 23,000 anti-dilutive restricted shares, respectively, that were excluded from the calculation of diluted earnings per share.

Long-Term Debt

6 unchanged sentences

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).

The loss is included in loss on extinguishment of debt in the accompanying Consolidated Statements of Income for the six months ended June 30, 2026.

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.

As of June 30, 2026, the interest rate applicable to the 2026 Facilities was 5.43 %.

Interest expense related to the Company’s credit agreements was $ 1.4 million and $ 3.6 million for the three and six months ended June 30, 2026, respectively, compared to $ 2.4 million and $ 4.8 million for the three and six months ended June 30, 2025, respectively.

The Company is required to make principal payments of the 2026 Term Loan on the last day of each quarter, which commenced with the quarter ended 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.

1 unchanged sentence

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

There were no borrowings outstanding under the 2026 Revolving Credit Facility as of June 30, 2026.

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.

2 unchanged sentences

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

As of June 30, 2026, the Company was in compliance with all financial covenants.

Long-term debt consists of the following as of June 30, 2026, and December 31, 2025 (in thousands):

As of June 30, 2026 As of December 31, 2025

Credit agreement $ 88,875 $ 96,425

3 unchanged sentences

Long-Term Debt $ 81,635 $ 94,665

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

Scheduled maturities of long-term debt as of June 30, 2026, are as follows (in thousands):

Maturities of Long-Term Debt (Unaudited) Loan Payments

3 unchanged sentences

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 two reportable segments:

Military+ Segment and Health+ Segment.

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

6 unchanged sentences

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

Three Months Ended March 31,

(In thousands)

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

2026 2025 2026 2025

Unaudited Unaudited

(In thousands) (In thousands)

Military+ Segment

3 unchanged sentences

General and administrative 14,895 14,808 29,286 29,042

1,114 1,018 2,305 3,592

Income from operations before interest and income taxes $ 23,723 $ 21,442 $ 54,441 $ 45,568

4 unchanged sentences

General and administrative 12,754 12,334 25,681 24,384

2,430 2,685 5,164 5,527

Income (loss) from operations before interest and income taxes $ 308 $ ( 2,378 ) $ 825 $ ( 3,196 )

4 unchanged sentences

General and administrative 9,843 11,005 18,815 21,128

414 420 797 753

Loss from operations before interest and income taxes $ ( 10,505 ) $ ( 12,039 ) $ ( 20,097 ) $ ( 23,101 )

1 unchanged sentence

Corporate and Other revenue (4)

( 23 ) 3,380 ( 84 ) 7,058

Total consolidated revenue $ 171,731 $ 162,766 $ 346,469 $ 327,317

3 unchanged sentences

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

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

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

(3) Includes depreciation and amortization expense.

(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)

(4) Includes the elimination of intersegment revenue for courses taken by employees of APEI at a reportable segment or by employees of one reportable segment at the other reportable segment.

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

2026 2025 2026 2025

Unaudited Unaudited

(In thousands) (In thousands)

Depreciation and amortization

4 unchanged sentences

Total consolidated depreciation and amortization $ 3,953 $ 4,088 $ 8,107 $ 8,080

Interest expense, net

Interest income (expense), net

Military+ Segment $ 465 $ 362 $ 888 $ 681

Health+ Segment 361 218 512 684

Total reportable segment interest expense, net $ 574 $ 785

Total reportable segment interest income (expense), net $ 826 $ 580 $ 1,400 $ 1,365

Corporate and Other ( 192 ) ( 1,688 ) ( 1,491 ) ( 3,360 )

Total consolidated interest expense, net $ ( 725 ) $ ( 887 )

Total consolidated interest income (expense), net $ 634 $ ( 1,108 ) $ ( 91 ) $ ( 1,995 )

Income tax expense (benefit)

16 unchanged sentences

and cash and other sources.

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

Three Months Ended March 31,

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

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

(Unaudited) (Unaudited)

2026 2025 2026 2025

DoD tuition assistance programs 43 % 43 % 44 % 44 %

2 unchanged sentences

Cash and other sources 14 % 14 % 14 % 13 %

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,

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

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

(Unaudited) (Unaudited)

RU 2026 2025 2026 2025

Title IV programs 77 % 78 % 77 % 77 %

1 unchanged sentence

VA education benefits 2 % 2 % 2 % 2 %

Three Months Ended March 31,

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

(Unaudited) (Unaudited)

HCN 2026 2025 2026 2025

3 unchanged sentences

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