What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-10 compared with 2026-05-11 · 233 added, 124 removed, 185 unchanged (66% of the section changed)

12 unchanged sentences

• our ability to manage, grow, and diversify our business and execute our business initiatives and strategy;

• the impact, timing, projected benefits, and terms of the planned combination of American Public University System, or APUS, Rasmussen University, or RU, and Hondros College of Nursing, or HCN, into one consolidated institution encompassing all APUS, RU, and HCN programs, campuses, and operations, or the Combination;

• legislative and regulatory changes, shifts in regulatory priorities, restrictions on the function, operations, and budgets of federal agencies, including ED, as a result of U.S.

30 unchanged sentences

• our failure to successfully adjust to future market demands;

• risks associated with the Combination, including changes in its anticipated timeline;

• risks associated with the combination of American Public University System, or APUS, Rasmussen University, or RU, and Hondros College of Nursing, or HCN, into one consolidated institution encompassing all APUS, RU, and HCN programs, campuses, and operations, or the Combination;

• our failure to comply with regulatory and accrediting agency requirements or to maintain institutional accreditation, the consequences thereof, and risks related to any actions we may take to prevent or correct such failure;

13 unchanged sentences

We undertake no obligation to publicly update any forward-looking statements after the date of this Quarterly Report, whether as a result of new information, future events, or otherwise, except as required by law.

We are a provider of online and campus-based postsecondary education to approximately 108,900 students through our subsidiary, American Public University System, Inc.

which currently operates three separately accredited institutions, APUS, RU, and HCN.

Our institutions offer purpose-built education programs designed to prepare individuals for productive contributions to their professions and society, and opportunities designed to advance students in their current professions or to help them prepare for their next career.

Our institutions are accredited and licensed or otherwise authorized by state authorities to offer postsecondary education programs to the extent the institution believe such licenses or authorizations are required and

are certified by ED to participate in Title IV programs.

In January 2025, we announced the planned combination of our three institutions, or the Combination, which will result in a combined Higher Learning Commission-accredited institution named American Public University System.

Effective March 2, 2026, or the Merger Date, we completed the merger of the legal entities that owned and operated our three institutions, with American Public University System, Inc.

We are a provider of online and campus-based postsecondary education to approximately 109,000 students through our subsidiary, American Public University System, Inc., which currently operates American Public University System, or the System.

The System offers purpose-built education programs designed to prepare individuals for productive contributions to their professions and society and opportunities designed to advance students in their current professions or to help them prepare for their next career.

The System is accredited and licensed or otherwise authorized by state authorities to offer postsecondary education programs to the extent it believes such licenses or authorizations are required and are certified by ED to participate in

Title IV programs.

In January 2025, we announced the Combination, a process that after two steps resulted in the System, a combined Higher Learning Commission-accredited institution.

Effective March 2, 2026, or the Merger Date, we completed the first step of the Combination, the merger of the legal entities that owned and operated our three institutions, with American Public University System, Inc.

surviving the merger, or the Legal Merger, and we subsequently notified ED that the Legal Merger occurred.

We currently expect the Combination to occur during the third quarter of 2026, subject to obtaining required approvals.

On August 4, 2026, ED approved, and we completed, the second step of the Combination, the combination of APUS, RU, and HCN into one HLC-accredited institution, or the Institutional Combination.

We previously provided our educational services through three reportable segments:

1 unchanged sentence

Beginning in fiscal 2026, in connection with the Combination, we now provide our educational services through the following two reportable segments:

• Military+, which was formerly the APUS Segment, provides online postsecondary education to approximately 89,500 adult learners, 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 operates through two brands:

• Military+ Segment, which was formerly the APUS Segment, provides online postsecondary education to approximately 89,400 adult learners, directed primarily at the needs of the military, veterans, extended military and veteran families, and other public service and service-minded communities through two brands:

American Military University, and American Public University.

As of March 31, 2026, approximately 62% of Military+ students self-reported that they served in the military on active duty at the time of initial enrollment.

• 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.

Health+ provides these education services to approximately 19,400 students at 27 campuses in eight states and online (excluding one campus planned to close during 2026) through RU and HCN.

As of March 31, 2026, on-ground enrollment was approximately 11,000, and online enrollment was approximately 8,400 students.

As of June 30, 2026, approximately 62% of Military+ Segment students self-reported that they served in the military on active duty at the time of initial enrollment.

• Health+ Segment, 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.

Health+ Segment provides these education services to approximately 19,600 students at 27 campuses in eight states and online (excluding one campus being closed as of July 31, 2026) through RU and HCN.

As of June 30, 2026, on-ground enrollment was approximately 11,100, and online enrollment was approximately 8,500 students.

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

2 unchanged sentences

Legislative and Regulatory Activity

The Planned Combination of APUS, RU, and HCN

We were required to obtain HLC approval prior to effectuating the Combination, and pursuant to ED’s requirements, are pursuing the Combination in two steps:

(i) the Legal Merger and (ii) combination of APUS, RU, and HCN into one HLC-accredited institution, or the Institutional Combination.

The Combination of APUS, RU, and HCN

We were required to obtain HLC approval prior to effectuating the Combination, and pursuant to ED’s requirements, undertook the Combination in two steps:

(i) the Legal Merger and (ii) the Institutional Combination.

In February 2026, HLC approved the continuation of accreditation of APUS and RU after the Legal Merger with an acknowledgment that the intent is to consolidate the three institutions into one HLC accreditation.

On April 28, 2026, HLC approved the continuation of accreditation after the Institutional Combination.

On April 28, 2026, HLC approved the continuation of accreditation after the Institutional Combination, and on June 12, 2026, HLC reaffirmed that approval.

HLC has scheduled a site visit in August 2026 in connection with the Legal Merger.

We currently expect to complete implementation of the Institutional Combination in the third quarter of 2026, subject to obtaining required approvals from ED and state agencies.

On August 4, 2026, ED approved, and we completed, the Institutional Combination.

For additional details regarding regulatory treatment of the Combination, see the Regulatory Environment in our Annual Report captioned “Regulatory Environment – Accreditation – Institutional Accreditation” and “Regulatory Environment – Accreditation – The Planned Combination of APUS, RU, and HCN”, and for additional information regarding risks related to the Combination, see the Risk Factor in our Annual Report with the caption beginning “The planned combination of APUS, RU, and HCN...”.

Rasmussen University

In June 2025, the Minnesota Board of Nursing, or MBN, issued a stipulation and consent order requiring RU’s Moorhead, Minnesota ADN program to, among other things, reach applicable NCLEX pass rate standards by June 30, 2026.

The Moorhead, Minnesota ADN program was not anticipated to reach the applicable NCLEX pass rates by June 30, 2026, so on June 1, 2026, RU informed MBN that it intends to voluntarily close its Moorhead, Minnesota ADN program effective December 31, 2027.

All current students enrolled in the Moorhead, Minnesota ADN program currently have expected graduation dates on or before the date RU intends to close the program, and enrollment currently represents approximately 120 students, or less than 1% of Health+’s current total enrollment.

Moorhead ADN students whose expected completion dates extend beyond December 31, 2027, will have several academic pathways available within RU, including:

(i) transferring to the

ADN program at the St.

Cloud campus, which offers the same curriculum, or, if academically eligible, (ii) transferring to the BSN program at the Fargo campus.

Borrower Defense to Repayment Claims

Between January 1, 2026 and April 30, 2026, our institutions received 646 BDTR claims from ED, seeking in the aggregate a discharge of approximately $11.0 million in loans.

Between May 1, 2026 and July 31, 2026, our institutions received 69 BDTR claims from ED, seeking in the aggregate a discharge of approximately $1.5 million in loans.

Each of our institutions disputes the validity of these claims and has filed responses to them with ED.

1 unchanged sentence

For additional information regarding risks related to BDTR claims, see the Risk Factor in our Annual Report captioned “ED rules related to BDTR claims may create significant liability that could have an adverse effect on our business and results of operations”.

The One Big Beautiful Bill Act

On May 1, 2026, ED published a rule, effective July 1, 2026, relating to One Big Beautiful Bill Act, or OBBBA, student loan provisions, defining “professional degree” programs and changing federal student loan programs.

The loan changes could reduce student enrollment, increase reliance on private loans, reduce funding for enrolled students, and increase administrative burdens.

On June 24, 2026, pending resolution of a court challenge, a U.S.

district court preliminarily stayed a portion of the rule’s “professional degree” definition that, among other things, excludes certain advanced nursing degrees.

On June 29, 2026, ED reinstated certain advanced nursing degrees as “professional degree” programs during the stay and announced its continued defense of the rule’s definition.

There is no assurance as to the stay’s duration or any responsive actions ED may take to the court challenge.

On July 1, 2026, ED published a rule for the OBBBA accountability framework, the Student Tuition and Transparency System, or STATS, and Earnings Accountability framework, generally effective July 1, 2027, with certain reporting changes effective July 1, 2026.

Under the rule, for programs to remain eligible for Direct Loans, median annual earnings of graduates must meet specified levels.

Programs failing to meet the standard for two of three consecutive years will lose eligibility, and institutions will also lose Title IV eligibility for programs failing to satisfy the measure if at least half their Title IV recipients and half their Title IV funds come from failing programs.

Institutions will be required to warn those enrolled in or seeking to enroll in failing programs.

Beginning August 31, 2026, ED will amend existing program participation agreements, or PPAs, that condition participation in Title IV programs on compliance with ED regulations and any additional PPA-specified conditions to condition Direct Loan eligibility on incorporation of the STATS and Earnings Accountability framework.

State Authorization/Licensure of Our Institutions

The State of Illinois enacted legislation effective January 2024 that changed the Illinois NCLEX pass rate requirements from a one-year measurement based on first attempts to a three-year average that includes all test attempts, and temporarily removed all nursing programs, including RU’s Illinois ADN program, from probationary status until September 2026, or the probationary status moratorium.

On July 10, 2026, the State of Illinois enacted legislation regarding measurement of NCLEX pass rates and of nursing education programs that fail to satisfy the requisite pass rate following expiry of the probationary status moratorium.

The legislation prevents programs from being placed on probation until calendar year 2026 NCLEX results can be measured and provides that any program with a calendar year 2026 pass rate below the 75% threshold will receive a written warning of noncompliance from the Illinois Department of Financial and Professional Regulation, or IDFPR, rather than being placed on probationary status.

The IDFPR has publicly reported that RU’s Illinois ADN program has not met the required NCLEX pass rate for the prior six years.

RU’s Illinois ADN program is currently approved;

however, there can be no assurance that IDFPR will not seek to impose different or additional requirements as a result of failures to satisfy the required NCLEX pass rate for consecutive years.

Summary of Results

Consolidated revenue for the three months ended March 31, 2026, increased to $174.7 million from $164.6 million, or by 6.2%, as compared to the prior year period.

The growth was primarily driven by higher net course registrations in our Military+ segment and increased enrollment in our Health+ segment, partially offset by the absence of revenue from GSUSA following its sale in July 2025.

Our net income for the three months ended March 31, 2026, was $17.7 million, compared to $8.9 million in the prior year period, an increase of $8.8 million.

The increase in net income for the three months ended March 31, 2026, was primarily related to the increase in revenue of $10.2 million, as compared to the prior year period, partially offset by the extinguishment of debt recognized in the three months ended March 31, 2026 of $1.7 million.

Our operating margin improved to 12.4% for the three months ended March 31, 2026, as compared to 7.4% in the prior year period.

Military+ segment net course registrations for the three months ended March 31, 2026, increased to approximately 106,600 from approximately 102,500, an increase of 4,100, or 4.0%, as compared to the prior year period.

Military+ segment revenue for the three months ended March 31, 2026, increased to $89.4 million from $83.9 million, or by 6.5%, as compared to the prior year period.

Military+ segment operating margin increased to 34.3% for the three months ended March 31, 2026, from 28.7% in the prior year period.

Health+ segment total enrollment for the three months ended March 31, 2026, increased to approximately 19,400 from approximately 18,000, an increase of 1,400, or 7.8%, as compared to the prior year period.

Health+ segment revenue for the three months ended March 31, 2026, increased to $85.4 million from $76.9 million, or by 11.0%, as compared to the prior year period.

Health+ segment operating margin improved to 0.6% for the three months ended March 31, 2026, from negative 1.1% in the prior year period.

Our financial results for the three months ended March 31, 2025, reflect the financial results of GSUSA in Corporate and Other.

Consolidated revenue for the three months ended June 30, 2026, increased to $171.7 million from $162.8 million, or by 5.5%, as compared to the prior year period.

The growth was primarily driven by increased enrollment in our Health+ Segment and higher net course registrations in our Military+ Segment, partially offset by the absence of revenue from GSUSA due to its sale in July 2025.

Our net income for the three months ended June 30, 2026, was $9.8 million, compared to $4.5 million in the prior year period, an increase of $5.3 million.

The increase in net income for the three months ended June 30, 2026, was primarily related to the increase in revenue of $8.9 million, partially offset by an increase in operating expenses of $2.5 million, as compared to the prior year period.

Our operating margin improved to 7.9% for the three months ended June 30, 2026, as compared to 4.3% in the prior year period.

Consolidated revenue for the six months ended June 30, 2026, increased to $346.5 million from $327.3 million, or by 5.9%, as compared to the prior year period.

Our net income for the six months ended June 30, 2026, was $27.5 million, compared to $13.4 million in the prior year period, an increase of $14.1 million.

The increase in net income for the six months ended June 30, 2026, was primarily related to the increase in revenue of $19.2 million, partially offset by an increase in operating expenses of $3.3 million and the extinguishment of debt of $1.7 million, as compared to the prior year period.

Our operating margin improved to 10.2% for the six months ended June 30, 2026, as compared to 5.9% in the prior year period.

Military+ Segment revenue for the three months ended June 30, 2026, increased to $85.5 million from $81.7 million, or by 4.7%, as compared to the prior year period.

Military+ Segment revenue for the six months ended June 30, 2026, increased to $175.0 million from $165.7 million, or by 5.6%, as compared to the prior year period.

Military+ Segment operating margin increased to 27.7% for the three months ended June 30, 2026, from 26.2% in the prior year period, and increased to 31.1% for the six months ended June 30, 2026, from 27.5% in the prior year period.

Health+ Segment revenue for the three months ended June 30, 2026, increased to $86.2 million from $77.7 million, or by 11.0%, as compared to the prior year period.

Health+ Segment total enrollment for the six months ended June 30, 2026, increased approximately 7.0%, as compared to the prior year period.

Health+ Segment revenue for the six months ended June 30, 2026, increased to $171.6 million from $154.6 million, or by 11.0%, as compared to the prior year period.

Health+ Segment operating margin improved to 0.4% for the three months ended June 30, 2026, from negative 3.1% in the prior year period, and increased to 0.5% for the six months ended June 30, 2026, from negative 2.1% in the prior year period.

Our financial results for the three and six months ended June 30, 2025, reflect the financial results of GSUSA in Corporate and Other.

Critical Accounting Estimates

15 unchanged sentences

Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions and estimates.

Actual results may differ and have a material impact on our results of operations and financial position, and subsequent events are not necessarily indicative of the reasonableness of the original assumptions or estimates.

Actual results may differ and have a material impact on our results of operations and

financial position, and subsequent events are not necessarily indicative of the reasonableness of the original assumptions or estimates.

We estimate fair value in our quantitative analysis by weighting the results from two different valuation approaches.

(i) discounted cash flow and (ii) guideline public company.

Under the discounted cash flow method, we determined fair value by discounting the estimated future cash flows of RU and HCN at their estimated weighted-average cost of capital.

Under the discounted cash flow method, we determined fair value by discounting the estimated future cash flows of our Health+ Segment, at their estimated weighted-average cost of capital.

We incorporate the use of projected financial information and a discount rate that are developed using market participant-based assumptions.

The cash-flow projections are based on three-year financial forecasts developed by management that include revenue projections, capital spending trends, and investment in working capital to support anticipated revenue growth, which are updated at least annually and approved by management.

Under the guideline public company method, we used pricing multiples from other public companies in the public higher education market to determine the fair value of RU and HCN.

Values derived under the two valuation methods are then weighted to estimate RU and HCN’s enterprise values.

Under the guideline public company method, we used pricing multiples from other public companies in the public higher education market to determine the fair value of the reporting unit.

Values derived under the two valuation methods are then weighted to estimate the reporting unit enterprise value.

If we determine that the carrying amount of a reporting unit exceeds its fair value, we then calculate the implied fair value of the reporting unit goodwill as compared to its carrying amount to determine the appropriate impairment charge.

1 unchanged sentence

Our methodology for determining fair values remained consistent for the periods presented.

During the three months ended March 31, 2026, in connection with the Combination and just prior to the Merger Date, we completed a quantitative assessment of goodwill and indefinite-lived intangibles for our RU and HCN.

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

Significant assumptions in the forecast used in the discounted cash flow valuation model include continued growth in our RU enrollment and cost containment measures.

HCN’s significant assumptions in the forecast relate to future campus openings and tuition increases.

These assumptions are subject to risks and uncertainties that could negatively impact results, including, but not limited to, changes in the regulatory environment, declines in student enrollment, adverse actions by state boards of nursing (such as enrollment caps), and unplanned increases in expenses.

In addition, we determined the fair value of our RU and HCN indefinite-lived intangible asset was greater than their carrying values.

Therefore, as of the Merger Date, there was no impairment of RU and HCN goodwill and indefinite-lived intangible assets.

In connection with the Combination, we reassessed the reporting unit structure.

As a result, RU and HCN reporting units were combined into a single reporting unit, Health+.

The change did not result in a reallocation of goodwill and had no impact on the total carrying amount of goodwill.

During the three months ended June 30, 2026, in connection with the preparation of this Quarterly Report, we performed a qualitative assessment of our Health+ Segment goodwill and indefinite-lived intangible assets.

As part of the assessment, we 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 our Health+ Segment was more than the respective carrying value, and therefore, no quantitative impairment test and no impairment charge was necessary.

Significant assumptions inherent to valuation methodologies for goodwill and indefinite-lived intangible assets include, but are not limited to, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in the higher education market.

3 unchanged sentences

Results of Operations

Below we have included a discussion of our operating results and material changes in our operating results during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Below we have included a discussion of our operating results and material changes in our operating results during the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025.

Our revenue and operating results normally fluctuate as a result of seasonal or other variations in our enrollments and the level of expenses in our reportable segments.

1 unchanged sentence

We expect quarterly fluctuations in operating results to continue as a result of various enrollment patterns and changes in revenue and expenses.

Military+ net course registrations for the three months ended March 31, 2026, increased to approximately 106,600 from approximately 102,500, an increase of 4,100, or 4.0%, as compared to the prior year period primarily due to increases in military registrations from students utilizing TA and military-affiliated students utilizing education benefit programs administered by the U.S.

Military+ Segment net course registrations for the three months ended June 30, 2026, increased to approximately 98,300 from approximately 96,400, an increase of 1,900, or 2.0%, as compared to the prior year period primarily due to increases in military registrations from students utilizing TA and financial aid.

Military+ Segment net course registrations for the six months ended June 30, 2026, increased to approximately 204,900 from approximately 198,900, an increase of 6,000, or 3.0%, as compared to the prior year period primarily due to increases in military registrations from students utilizing TA, financial aid, and military-affiliated students utilizing education benefit programs administered by the U.S.

Department of Veterans Affairs, or VA.

Military+ operating margin increased to 34.3% for the three months ended March 31, 2026, from 28.7% in the prior year period.

Operating margin for the three months ended March 31, 2026, increased primarily due to the $5.5 million increase in revenue and a $1.5 million decrease in loss on assets held for sale, partially offset by a $1.3 million increase in advertising costs, as compared to the prior year period.

Health+ total enrollment for the three months ended March 31, 2026, increased to approximately 19,400 from approximately 18,000, an increase of 1,400, or 7.8%, as compared to the prior year period, driven by a 10.0% increase in on-ground enrollment, and a 5.0% increase in online enrollment.

Health+ operating margin improved to 0.6% for the three months ended March 31, 2026, from negative 1.1%, in the prior year period.

The improvement in the operating margin for the three months ended March 31, 2026, was primarily due to the $8.4 million revenue increase, partially offset by increases of $2.8

million in classroom and course materials costs, $1.9 million in advertising costs, $1.3 million in employee compensation costs, and $0.8 million in bad debt expense, as compared to the prior year period.

Operating margin increased to 27.7% for the three months ended June 30, 2026, from 26.2% in the prior year period and increased to 31.1% for the six months ended June 30, 2026, from 27.5% in the prior year period.

Operating margin for the three months ended June 30, 2026, increased primarily due to the $3.8 million increase in revenue and a $0.8 million decrease in employee compensation costs, partially offset by a $2.0 million increase in advertising costs, as compared to the prior year period.

Operating margin for the six months ended June 30, 2026, increased primarily due to the

$9.3 million increase in revenue, a $1.5 million decrease in loss on assets held for sale, and a $0.8 million decrease in employee compensation costs, partially offset by increases of $3.3 million in advertising costs and $1.2 million in bad debt expense, as compared to the prior year period.

Health+ Segment total enrollment for the three months ended June 30, 2026, increased to approximately 19,600 from approximately 18,300, an increase of 1,300, or 6.6%, as compared to the prior year period, driven by an 9.2% increase in on-ground enrollment and a 3.4% increase in online enrollment.

Health+ Segment total enrollment for the six months ended June 30, 2026, increased approximately 7.0%, as compared to the prior year period, driven by a 9.0% increase in on-ground enrollment and a 4.6% increase in online enrollment.

Health+ Segment operating margin improved to 0.4% for the three months ended June 30, 2026, from negative 3.1%, in the prior year period.

The improvement in the operating margin for the three months ended June 30, 2026, was primarily due to the $8.6 million revenue increase, partially offset by increases of $3.1 million in advertising costs, $1.4 million in employee compensation costs, and $1.0 million in information technology costs, as compared to the prior year period.

Health+ Segment operating margin improved to 0.5% for the six months ended June 30, 2026, from negative 2.1%, in the prior year period.

The improvement in the operating margin for the six months ended June 30, 2026, was primarily due to the $17.0 million revenue increase, partially offset by increases of $4.9 million in advertising costs, $3.2 million in classroom and course materials costs, $2.7 million in employee compensation costs, $1.4 million in bad debt expense, and $1.3 million in technology costs, as compared to the prior year period.

For a more detailed discussion of our results by reportable segment, refer to “Analysis of Operating Results by Reportable Segment” below.

1 unchanged sentence

The following table sets forth statements of income data as a percentage of revenue for the period indicated:

Three Months Ended March 31,

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

2026 2025 2026 2025

(Unaudited) (Unaudited)

Revenue 100.0 % 100.0 % 100.0 % 100.0 %

5 unchanged sentences

Loss on assets held for sale — — — 0.5

Loss on disposals of long-lived assets 0.1 0.1

Total costs and expenses 92.1 95.7 89.8 94.1

1 unchanged sentence

Loss on extinguishment of debt — — (0.5) —

Interest expense, net (0.4) (0.5)

Interest income (expense), net 0.4 (0.7) — (0.6)

Income from operations before income taxes 8.2 3.6 9.7 5.3

2 unchanged sentences

Preferred stock dividend — 0.8 — 0.8

Loss on redemption of preferred stock — 2.2 — 1.1

Net income available to common stockholders 5.7 % (0.2) % 8.0 % 2.2 %

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Our consolidated revenue for the three months ended March 31, 2026, was $174.7 million, an increase of $10.2 million, or 6.2%, compared to $164.6 million for the three months ended March 31, 2025.

Revenue increased primarily due to an $8.4 million, or 11.0%, increase in revenue in our Health+ segment, a $5.5 million, or 6.5%, increase in revenue in our Military+ segment, partially offset by a $3.7 million decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date.

Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025

Our consolidated revenue for the three months ended June 30, 2026, was $171.7 million, an increase of $8.9 million, or 5.5%, compared to $162.8 million for the three months ended June 30, 2025.

Revenue increased primarily due to an $8.6 million, or 11.0%, increase in revenue in our Health+ Segment, and a $3.8 million, or 4.7%, increase in revenue in our

Military+ Segment, partially offset by a $3.4 million decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date.

Our Health+ Segment revenue increase was primarily due to a 6.6% increase in total student enrollment and the impact of tuition increases in the second half of 2025.

1 unchanged sentence

Costs and expenses.

Costs and expenses for the three months ended March 31, 2026, were $153.1 million, an increase of $0.8 million, or 0.5%, compared to $152.3 million for the three months ended March 31, 2025.

Costs and expenses for the three months ended March 31, 2026, include $0.9 million in professional fees related to the Combination in Corporate and Other.

The results in the prior year period included a $1.5 million loss on assets held for sale in our Military+ segment and $1.0 million in professional fees in Corporate and Other relating to the Combination.

Costs and expenses for the three months ended March 31, 2026, as compared to the prior year period, excluding the items noted above, increased $2.4 million, or 1.6%, primarily due to increases of $2.9 million in advertising costs, $2.7 million in classroom and course materials costs due to increased vendor costs and enrollment, and $1.3 million in bad debt expense, partially offset by decreases of $1.6 million in employee compensation costs, $1.6 million in occupancy costs, and $0.7 million in information technology costs related to our ongoing efforts to reduce operating costs.

Costs and expenses as a percentage of revenue decreased to 87.6% for the three months ended March 31, 2026, from 92.6% for the three months ended March 31, 2025.

Costs and expenses for the three months ended June 30, 2026, were $158.2 million, an increase of $2.5 million, or 1.6%, compared to $155.7 million for the three months ended June 30, 2025.

Costs and expenses for the three months ended June 30, 2026, include $0.9 million in professional fees related to the Combination in Corporate and Other.

The results in the prior year period included $1.7 million in professional fees in Corporate and Other relating to the Combination and the sale of GSUSA.

Costs and expenses for the three months ended June 30, 2026, as compared to the prior year period, excluding the items noted above, increased $3.3 million, or 2.1%, primarily due to increases of $5.1 million in advertising costs to drive increases in registrations and enrollment, $1.3 million in technology costs, and $1.2 million in bad debt expense, partially offset by a decrease of $6.0 million in Corporate and Other due to the sale of GSUSA.

Costs and expenses as a percentage of revenue decreased to 92.1% for the three months ended June 30, 2026, from 95.7% for the three months ended June 30, 2025.

Instructional costs and services expenses.

Our instructional costs and services expenses for the three months ended March 31, 2026, were $74.6 million, a decrease of $0.3 million, or 0.4%, compared to $74.9 million for the three months ended March 31, 2025.

Instructional costs and services expenses decreased primarily due to the $3.2 million decrease in Corporate and Other due to the sale of GSUSA, a $0.9 million decrease in employee compensation costs in our Military+ segment, and a $0.5 million decrease in occupancy costs in our Health+ segment related to campus and office space closures in 2025, partially offset by increases of $2.8 million in classroom and course material costs due to increased vendor costs and enrollment, and $1.4 million in employee compensation costs in our Health+ segment related to increased enrollment.

Instructional costs and services expenses as a percentage of revenue decreased to 42.7% for the three months ended March 31, 2026, from 45.5% for the three months ended March 31, 2025.

Our instructional costs and services expenses for the three months ended June 30, 2026, were $76.6 million, a decrease of $1.8 million, or 2.3%, compared to $78.4 million for the three months ended June 30, 2025.

Instructional costs and services expenses decreased primarily due to the $3.0 million decrease in Corporate and Other due to the sale of GSUSA, and a $1.4 million decrease in employee compensation costs in our Military+ Segment primarily due to a change in its part-time faculty compensation plan, partially offset by increases of $1.5 million in employee compensation costs and $0.4 million in classroom and course material costs in our Health+ Segment related to increased enrollment, and $0.5 million in information technology costs in our Health+ Segment.

Instructional costs and services expenses as a percentage of revenue decreased to 44.6% for the three months ended June 30, 2026, from 48.2% for the three months ended June 30, 2025.

Selling and promotional expenses.

Our selling and promotional expenses for the three months ended March 31, 2026, were $37.9 million, an increase of $2.7 million, or 7.6%, compared to $35.2 million for the three months ended March 31, 2025.

Selling and promotional expenses increased primarily due to an aggregate increase of $3.1 million in advertising costs across both segments to further drive enrollment, partially offset by a decrease of $1.1 million in Corporate and Other due to the sale of GSUSA.

Selling and promotional expenses as a percentage of revenue increased to 21.7% for the three months ended March 31, 2026, from 21.4% for the three months ended March 31, 2025.

Our selling and promotional expenses for the three months ended June 30, 2026, were $40.1 million, an increase of $5.1 million, or 14.5%, compared to $35.0 million for the three months ended June 30, 2025.

Selling and promotional expenses increased primarily due to an increase of $5.1 million in advertising costs across both segments to further drive enrollment.

Selling and promotional expenses as a percentage of revenue increased to 23.4% for the three months ended June 30, 2026, from 21.5% for the three months ended June 30, 2025.

General and administrative expenses.

Our general and administrative expenses for the three months ended March 31, 2026, were $36.3 million, a decrease of $0.1 million, or 0.3%, compared to $36.4 million for the three months ended March 31, 2025.

For the three months ended March 31, 2026 and 2025, general and administrative expenses included $0.9 million and $1.0 million, respectively, in professional fees relating to the Combination in Corporate and Other.

Our general and administrative expenses for the three months ended June 30, 2026, were $37.5 million, a decrease of $0.7 million, or 1.7%, compared to $38.1 million for the three months ended June 30, 2025.

For the three months ended June 30, 2026 and 2025, general and administrative expenses included $0.9 million and $1.4 million, respectively, in professional fees relating to the Combination in Corporate and Other.

General and administrative expenses decreased primarily due to a $1.9 million decrease in Corporate and Other due to the sale of GSUSA, partially offset by a $1.2 million increase in bad debt expense in both segments.

Consolidated bad debt expense for the three months ended March 31, 2026, was $6.3 million, or 3.6% of revenue, compared to $5.0 million, or 3.0% of revenue in the prior year period.

General and administrative expenses as a percentage of revenue decreased to 20.8% for the three months ended March 31, 2026, from 22.1% for the three months ended March 31, 2025.

Consolidated bad debt expense for the three months ended June 30, 2026, was $5.9 million, or 3.4% of revenue, compared to $4.8 million, or 3.0% of revenue in the prior year period.

General and administrative expenses as a percentage of revenue decreased to 21.8% for the three months ended June 30, 2026, from 23.4% for the three months ended June 30, 2025.

As we continue to evaluate enhancements to our business capabilities, we may incur additional costs, and our general and administrative expenses will vary from time to time.

Depreciation and amortization expenses.

Depreciation and amortization expenses were $4.2 million for the three months ended March 31, 2026, compared to $4.0 million in the prior year period, a decrease of $0.2 million.

Depreciation and amortization expenses as a percentage of revenue were 2.4% for the three months ended March 31, 2026, and 2025, respectively.

Loss on extinguishment of debt.

For the three months ended March 31, 2026, we recorded a $1.7 million loss on extinguishment of debt relating to the refinance of our corporate debt.

There was no loss on extinguishment of debt in the prior year.

Depreciation and amortization expenses were $4.0 million for the three months ended June 30, 2026, compared to $4.1 million in the prior year period, a decrease of $0.1 million.

Depreciation and amortization expenses as a percentage of revenue were 2.3% and 2.5% for the three months ended June 30, 2026, and 2025, respectively.

Stock-based compensation expenses.

Stock-based compensation expenses included in instructional costs and services, selling and promotional, and general and administrative expenses were $2.2 million for each of the three months ended June 30, 2026, and 2025, respectively.

Stock-based compensation costs included accelerated expense for retirement-eligible employees and performance stock unit incentive costs.

Interest income (expense), net.

Interest income, net of interest expense and other income, was $0.6 million for the three months ended June 30, 2026, compared to interest expense, net of interest income and other income of $1.1 million, in the prior year period.

The increase in net interest income in the three months ended June 30, 2026, as compared to the prior year period, was primarily due to a decrease in interest expense due to the refinance of corporate debt and an increase in interest income earned on investment securities, for the comparable periods.

Income tax expense.

We recognized income tax expense of $4.4 million and $1.4 million for the three months ended June 30, 2026, and 2025, respectively, or an effective tax rate of 31.0% in 2026 and 24.0% in 2025.

The effective tax rate in 2026 was impacted by higher non-deductible expenses, when compared to the prior period.

Our net income was $9.8 million and $4.5 million for the three months ended June 30, 2026, and 2025, respectively, an increase of $5.3 million.

This increase was due to the factors discussed above.

Preferred stock dividends.

There were no preferred stock dividends for the three months ended June 30, 2026 due to the redemption of all outstanding shares of our Series A Senior Preferred Stock in June 2025.

Preferred stock dividends for the three months ended June 30, 2025 were $1.3 million.

Loss on redemption of preferred stock.

In June 2025, we redeemed all outstanding shares of Series A Senior Preferred Stock for $43.1 million, excluding unpaid and accrued dividends of $1.4 million, resulting in a loss of $3.5 million related to the redemption premium and fees.

Net income (loss) available to common stockholders.

The net income available to common stockholders was $9.8 million for the three months ended June 30, 2026, compared to a net loss available to common stockholders of $0.3 million for the three months ended June 30, 2025, an improvement of $10.1 million.

This improvement was due to the factors discussed above.

Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025

Our consolidated revenue for the six months ended June 30, 2026, was $346.5 million, an increase of $19.2 million, or 5.9%, compared to $327.3 million for the six months ended June 30, 2025.

Revenue increased primarily due to a $17.0 million, or 11.0%, increase in revenue in our Health+ Segment, and a $9.3 million, or 5.6%, increase in revenue in our Military+ Segment, partially offset by a $7.1 million decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date.

Our Health+ Segment revenue increase was primarily due to a 7.0% increase in total student enrollment and the impact of tuition increases in the second half of 2025.

Our Military+ Segment revenue increase was primarily due to a 3.0% increase in net course registrations, as compared to the prior year period.

Costs and expenses.

Costs and expenses for the six months ended June 30, 2026, were $311.3 million, an increase of $3.3 million, or 1.1%, compared to $308.0 million for the six months ended June 30, 2025.

Costs and expenses for the six months ended June 30, 2026, include $1.9 million in professional fees related to the Combination in Corporate and Other.

The results in the prior year period included $2.7 million in professional fees in Corporate and Other relating to the Combination and the sale of GSUSA, and a $1.5 million loss on assets held for sale in our Military+ Segment.

Costs and expenses for the six months ended June 30, 2026, as compared to the prior year period, excluding the items noted above, increased $5.6 million, or 1.8%, primarily due to increases of $8.2 million in advertising costs, $3.1 million in classroom and course materials costs due to increased vendor costs and enrollment, $2.6 million in bad debt expense, and $1.6 million in technology costs, partially offset by a decrease of $12.0 million in Corporate and Other due to the sale of GSUSA.

Costs and expenses as a percentage of revenue decreased to 89.8% for the six months ended June 30, 2026, from 94.1% for the six months ended June 30, 2025.

Instructional costs and services expenses.

Our instructional costs and services expenses for the six months ended June 30, 2026, were $151.3 million, a decrease of $2.1 million, or 1.4%, compared to $153.4 million for the six months ended June 30, 2025.

Instructional costs and services expenses decreased primarily due to the $6.2 million decrease in Corporate and Other due to the sale of GSUSA, a $2.2 million decrease in employee compensation costs in our Military+ Segment primarily due to a change in its part-time faculty compensation plan, and a $0.8 million decrease in occupancy costs in our Health+ Segment related to campus and office space closures in 2025, partially offset by increases of $3.2 million in classroom and course material costs due to increased vendor costs and enrollment, and $2.9 million in employee compensation costs in our Health+ Segment related to increased enrollment.

Instructional costs and services expenses as a percentage of revenue decreased to 43.7% for the six months ended June 30, 2026, from 46.9% for the six months ended June 30, 2025.

Selling and promotional expenses.

Our selling and promotional expenses for the six months ended June 30, 2026, were $78.0 million, an increase of $7.7 million, or 11.0%, compared to $70.3 million for the six months ended June 30, 2025.

Selling and promotional expenses increased primarily due to an increase of $8.2 million in advertising costs across both segments to further drive enrollment, partially offset by a decrease of $2.1 million in Corporate and Other due to the sale of GSUSA.

Selling and promotional expenses as a percentage of revenue increased to 22.5% for the six months ended June 30, 2026, from 21.5% for the six months ended June 30, 2025.

General and administrative expenses.

Our general and administrative expenses for the six months ended June 30, 2026, were $73.8 million, a decrease of $0.8 million, or 1.0%, compared to $74.6 million for the six months ended June 30, 2025.

For the six months ended June 30, 2026, general and administrative expenses included $1.9 million in professional fees relating to the Combination in Corporate and Other.

For the six months ended June 30, 2025, general and administrative expenses included $2.7 million in professional fees relating to the Combination in Corporate and Other and the sale of GSUSA.

General and administrative expenses decreased primarily due to a $3.5 million decrease in Corporate and Other due to the sale of GSUSA, and a $1.2 million decrease in employee compensation costs in Corporate and Other, partially offset by a $2.6 million increase in bad debt expense in both segments.

Consolidated bad debt expense for the six months ended June 30, 2026, was $12.2 million, or 3.5% of revenue, compared to $9.8 million, or 3.0% of revenue in the prior year period.

General and administrative expenses as a percentage of revenue decreased to 21.3% for the six months ended June 30, 2026, from 22.8% for the six months ended June 30, 2025.

As we continue to evaluate enhancements to our business capabilities, we may incur additional costs, and our general and administrative expenses will vary from time to time.

Depreciation and amortization expenses.

Depreciation and amortization expenses were $8.1 million for both the six months ended June 30, 2026, and 2025.

Depreciation and amortization expenses as a percentage of revenue were 2.3% for the six months ended June 30, 2026, as compared to 2.5% for the six months ended June 30, 2025.

Loss on assets held for sale.

There were no losses on assets held for sale in the three months ended March 31, 2026.

For the three months ended March 31, 2025, the $1.5 million non-cash loss on assets held for sale is for real property in Charles Town, West Virginia in our Military+ segment.

There were no losses on assets held for sale in the six months ended June 30, 2026.

For the six months ended June 30, 2025, the $1.5 million non-cash loss on assets held for sale was for real property in Charles Town, West Virginia in our Military+ Segment.

Loss on disposals of long-lived assets.

The loss on disposal of long-lived assets was $0.2 million for the three months ended March 31, 2026, as compared to $0.2 million for the three months ended March 31, 2025.

The loss on disposal of long-lived assets was $0.2 million for the six months ended June 30, 2026, as compared to $0.3 million for the six months ended June 30, 2025.

Loss on extinguishment of debt.

For the six months ended June 30, 2026, we recorded a $1.7 million loss on extinguishment of debt relating to the refinance of our corporate debt.

There was no loss on extinguishment of debt in the prior year.

Stock-based compensation expenses.

Stock-based compensation expenses included in instructional costs and services, selling and promotional, and general and administrative expenses were $2.3 million for each of the three months ended March 31, 2026, and 2025.

Stock-based compensation expenses included in instructional costs and services, selling and promotional, and general and administrative expenses were $4.6 million for each of the six months ended June 30, 2026, as compared to $4.5 million for the six months ended June 30, 2025.

Stock-based compensation costs included accelerated expense for retirement-eligible employees and performance stock unit incentive costs.

Interest expense, net.

Interest expense, net of interest and other income, was $0.7 million and $0.9 million for the three months ended March 31, 2026, and 2025, respectively.

Net interest expense in the three months ended March 31, 2026, as compared to the prior year period, decreased primarily due to a decrease in interest expense due to the refinance of corporate debt and the decrease in market rates paid in the comparable periods.

Interest income (expense), net.

Net interest expense was $0.1 million and $2.0 million for the six months ended June 30, 2026, and 2025, respectively.

Net interest expense in the six months ended June 30, 2026, as compared to the prior year period, decreased primarily due to a decrease in interest expense due to the refinance of corporate debt and an increase in interest income earned on investment securities.

Income tax expense.

We recognized income tax expense of $1.5 million and $2.5 million for the three months ended March 31, 2026, and 2025, respectively, or an effective tax rate of 7.9% in 2026 and 21.7% in 2025.

The effective tax rate in both periods was positively impacted by excess tax benefits related to stock compensation as the first quarter typically includes

the majority of annual vested stock awards.

The impact on the first quarter of 2026 was more significant due to the increase in share price, in comparison to the prior period.

Our net income was $17.7 million and $8.9 million for the three months ended March 31, 2026, and 2025, respectively, an increase of $8.8 million.

We recognized income tax expense of $5.9 million and $3.9 million for the six months ended June 30, 2026, and 2025, respectively, or an effective tax rate of 17.7% in 2026 and 22.5% in 2025.

The effective tax rate in both periods was positively impacted by excess tax benefits related to stock compensation.

The impact in 2026 was more significant due to the increase in share price, compared to the prior period.

Our net income was $27.5 million and $13.4 million for the six months ended June 30, 2026, and 2025, respectively, an increase of $14.1 million.

This increase was due to the factors discussed above.

Preferred stock dividends.

There were no preferred stock dividends for the three months ended March 31, 2026 due to the redemption of all outstanding shares of our Series A Senior Preferred Stock in June 2025.

Preferred stock dividends for the three months ended March 31, 2025 were $1.4 million.

There were no preferred stock dividends for the six months ended June 30, 2026 due to the redemption of all outstanding shares of Series A Senior Preferred Stock in June 2025.

Preferred stock dividends for the six months ended June 30, 2025 were $2.8 million.

Loss on redemption of preferred stock.

Net income available to common stockholders.

The net income available to common stockholders was $17.7 million for the three months ended March 31, 2026, compared to a net income available to common stockholders of $7.5 million for the three months ended March 31, 2025, an improvement of $10.3 million.

The net income available to common stockholders was $27.5 million for the six months ended June 30, 2026, compared to a net income available to common stockholders of $7.1 million for the six months ended June 30, 2025, an improvement of $20.4 million.

This improvement was due to the factors discussed above.

1 unchanged sentence

The following table provides details on our operating results by reportable segment for the respective periods (in thousands):

Three Months Ended March 31,

Military+ $ 89,443 $ 83,946

Health+ 85,356 76,927

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

2026 2025 2026 2025

(Unaudited) (Unaudited)

Military+ Segment $ 85,538 $ 81,731 $ 174,981 $ 165,677

Health+ Segment 86,216 77,655 171,572 154,582

Corporate and Other (23) 3,380 (84) 7,058

1 unchanged sentence

Income (loss) from operations before interest and income taxes:

Military+ $ 30,718 $ 24,126

Health+ 517 (818)

Military+ Segment $ 23,723 $ 21,442 $ 54,441 $ 45,568

Health+ Segment 308 (2,378) 825 (3,196)

Corporate and Other (10,505) (12,039) (20,097) (23,101)

Total income from operations before interest and income taxes $ 13,526 $ 7,025 $ 35,169 $ 19,271

For the three months ended March 31, 2026, the $5.5 million, or 6.5%, increase to approximately $89.4 million in revenue in our Military+ segment was primarily attributable to higher net course registrations, as compared to the prior year period.

Net course registrations increased 4.0% to approximately 106,600 from approximately 102,500 in the prior year period, primarily due to increases in military registrations from students utilizing TA, and military-affiliated students utilizing VA education benefits.

Income from operations before interest and income taxes increased to $30.7 million during the three months ended March 31, 2026, from $24.1 million in the prior year period, an increase of $6.6 million, or 27.3%, primarily due to the $5.5 million revenue increase as well as the $1.5 million decrease in loss on assets held for sale, partially offset by a $1.3 million increase in advertising costs, in each case as compared to the prior year period.

For the three months ended March 31, 2026, the $8.4 million, or 11.0%, increase to approximately $85.4 million in revenue in the Health+ segment was primarily due to a 7.8% increase in total student enrollment which was driven by an 10.0% increase in on-ground enrollment, and a 5.0% increase in online enrollment, as compared to the prior year period, and the impact of tuition increases in the second half of 2025.

Income from operations before interest and income taxes was $0.5 million for the three months ended March 31, 2026, and a loss of $0.8 million for the three months ended March 31, 2025, respectively, an improvement of $1.3 million.

The increase was primarily due to the increase in revenue of $8.4 million, partially offset by increases of $2.8 million in classroom and course materials costs, $1.9 million in advertising costs, $1.4 million in instructional cost and services employee compensation costs, and $0.8 million in bad debt expense, as compared to

the prior year period.

Military+ Segment

For the three months ended June 30, 2026, the $3.8 million, or 4.7%, increase to approximately $85.5 million in revenue in our Military+ Segment was primarily attributable to higher net course registrations, as compared to the prior year period.

Net course registrations increased 2.0% to approximately 98,300 from approximately 96,400 in the prior year period, primarily due to increases in military registrations from students utilizing TA and financial aid.

Income from operations before interest and income taxes improved to $23.7 million during the three months ended June 30, 2026, from $21.4 million in the prior year period, an increase of $2.3 million, or 10.6%, due to the $3.8 million increase in revenue and a $0.8 million decrease in employee compensation costs, partially offset by a $2.0 million increase in advertising costs, as compared to the prior year period.

For the six months ended June 30, 2026, the $9.3 million, or 5.6%, increase to approximately $175.0 million in revenue in our Military+ Segment was primarily attributable to higher net course registrations and modest price increases, as compared to the prior year period.

Net course registrations increased 3.0% to approximately 204,900 from approximately 198,900 in the prior year period, primarily due to increases in military registrations from students utilizing TA, financial aid, and military-affiliated students utilizing education benefit programs administered by the VA.

Income from operations before interest and income taxes improved to $54.4 million during the six months ended June 30, 2026, from $45.6 million in the prior year period, an increase of $8.9 million, or 19.5%, primarily due to the $9.3 million increase in revenue, a $1.5 million decrease in loss on assets held for sale, and a $0.8 million decrease in employee compensation costs, partially offset by a $3.3 million increase in advertising costs and a $1.2 million increase in bad debt expense, as compared to the prior year period.

Health+ Segment

For the three months ended June 30, 2026, the $8.6 million, or 11.0%, increase to approximately $86.2 million in revenue in the Health+ Segment was primarily due to a 6.6% increase in total student enrollment which was driven by an 9.2% increase in on-ground enrollment, and a 3.4% increase in online enrollment, as compared to the prior year period, and the impact of tuition increases in the second half of 2025.

Income from operations before interest and income taxes was $0.3 million for the three months ended June 30, 2026, and a loss of $2.4 million for the three months ended June 30, 2025, respectively, an improvement of $2.7 million.

The improvement was primarily due to the $8.6 million revenue increase, partially offset by increases of $3.1 million in advertising costs, $1.4 million in employee compensation costs, and $1.0 million in information technology costs, as compared to the prior year period.

For the six months ended June 30, 2026, the $17.0 million, or 11.0%, increase to approximately $171.6 million in revenue in the Health+ Segment was primarily due to a 7.0% increase in total student enrollment which was driven by a 9.0% increase in on-ground enrollment, and a 4.6% increase in online enrollment, as compared to the prior year period, and the

impact of tuition increases in the second half of 2025.

Income from operations before interest and income taxes was $0.8 million for the six months ended June 30, 2026, and a loss of $3.2 million for the six months ended June 30, 2025, respectively, an improvement of $4.0 million.

The improvement was primarily due to the $17.0 million revenue increase, partially offset by increases of $4.9 million in advertising costs, $3.2 million in classroom and course materials costs, $2.7 million in employee compensation costs, $1.4 million in bad debt expense, and $1.3 million in technology costs, as compared to the prior year period.

Liquidity and Capital Resources

Cash, cash equivalents, and restricted cash were $221.0 million and $176.5 million at March 31, 2026, and December 31, 2025, respectively, representing an increase of $44.5 million, or 25.2%.

The increase was primarily due to the collection of TA accounts receivable in the Military+ segment, and our improved financial performance, partially offset by cash used to repurchase common stock and the additional principal paydown of corporate debt.

Cash, cash equivalents, and restricted cash were $146.5 million and $176.5 million at June 30, 2026, and December 31, 2025, respectively, representing a decrease of $30.0 million, or 17.0%.

The decrease was primarily due to the purchase of approximately $75.9 million in short-term investments, repurchases of common stock, and the additional principal paydown of corporate debt, partially offset by the collection of TA accounts receivable in the Military+ Segment.

We have historically financed operating activities and capital expenditures with cash provided by operating activities.

1 unchanged sentence

For more on our material cash requirements from known contractual and other obligations, please refer to the section entitled “Contractual Obligations” in Item 7 of Part II of our Annual Report.

In the second quarter of 2026, we began purchasing short-term highly liquid available-for-sale debt securities, consisting primarily of investment grade commercial paper and U.S.

Treasury securities.

The Company’s investment policy limits credit exposure by restricting investments to high-quality issuers and by establishing concentration limits.

We derive a significant portion of our revenue from our participation in ED’s Title IV programs, for which disbursements are governed by federal regulations.

2 unchanged sentences

Generally, VA funds are received within 60 days of the start of the courses to which they relate, and TA funds received within 30 days of the invoice date.

APUS generally invoices for TA approximately nine weeks after the start of a course, and may change its billing approach as in the past, which has had the effect of delaying payments from one period into another.

For example, in July 2025, APUS delayed billing to certain branches, further delaying payments until 2026, which could have an adverse impact on APUS’s ability to comply with the 90/10 Rule in 2026 or future years.

Military+ generally invoices for TA approximately nine weeks after the start of a course, and may change its billing approach as in the past, which has had the effect of delaying payments from one period into another.

For example, in July 2025, Military+ delayed billing to certain branches, further delaying payments until 2026, which could have an adverse impact on Military+’s ability to comply with the 90/10 Rule in 2026 or future years.

The change in TA billing practice added to our accounts receivable as of December 31, 2025, and resulted in an increase to our leverage ratio as of December 31, 2025, under our Credit Agreement as defined and discussed in “Note 8.

Long-term Debt”.

During the three months ended March 31, 2026, APUS collected approximately $33.3 million from TA related to the 2025 delayed billings.

On March 2, 2026, we completed the first step of the Combination, and we anticipate completing the Combination in the third quarter of 2026, subject to obtaining required approvals.

During the six months ended June 30, 2026, Military+ collected approximately $33.3 million from TA related to the 2025 delayed billings.

On March 2, 2026, we completed the first step of the Combination, the Legal Merger, and on August 4, 2026, we completed the second step of the Combination, the Institutional Combination.

For the years ended December 31, 2025, and 2024, we incurred $3.5 million and $2.2 million in professional fees, respectively, related to the Combination.

For the three months ended March 31, 2026, we incurred $0.9 million in professional fees and expect to incur between approximately $1.0 million and $3.0 million in professional fees in 2026 to complete the Combination.

For the six months ended June 30, 2026, we incurred $1.9 million in professional fees and expect to incur approximately $1.5 million in professional fees during the remainder of 2026 to complete the Combination.

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, contained financial covenants that required us to maintain a Total Net Leverage Ratio (as defined in the Prior Credit Agreement) of no greater than 2.00 to 1.00 and 0.75 to 1.00, respectively, which was subject to certain exceptions.

5 unchanged sentences

The Consolidated Interest Coverage Ratio (as defined in the 2026 Credit Agreement) reflects a ratio of consolidated EBITDA to consolidated interest expense.

The Consolidated Total Net Leverage Ratio, under the 2026 Credit Agreement, at March 31, 2026, was negative 0.10.

The Consolidated Total Net Leverage Ratio, under the 2026 Credit Agreement, at June 30, 2026, was negative 0.11.

For more information on the 2026 Facilities and their terms, please refer to “Note 8.

Long-Term Debt”.

Capital expenditures could be higher in the future as a result of, among other things, additional expenditures for technology or other business capabilities, the maintenance of existing campuses at Health+, the opening or closing of campuses or the consolidation of existing campuses at Health+, the acquisition or lease of existing structures or potential new construction

projects, and necessary tenant improvements that arise as a result of our ongoing evaluation of our space needs and opportunities for physical growth.

We also expect to continue to explore opportunities to invest in the education industry, which could include purchasing or investing in other education-related companies or companies developing new technologies.

2 unchanged sentences

The program replaces our prior repurchase authorizations.

For the three months ended March 31, 2026, we repurchased 17,840 shares of common stock for an aggregate purchase price of $1.0 million.

During the three and six months ended June 30, 2026, the Company repurchased 70,365 and 88,205 shares of common stock, respectively.

As of June 30, 2026, there remains $45.0 million available under our share repurchase authorization.

Operating Activities

Net cash provided by operating activities was $63.3 million and $37.0 million for the three months ended March 31, 2026, and 2025, respectively.

Net cash provided by operating activities was $75.4 million and $51.8 million for the six months ended June 30, 2026, and 2025, respectively.

The increase in cash from operating activities was primarily due to the collection of TA accounts receivable in our Military+ Segment, related to the 2025 change in TA billing approach, our improved financial performance, and other changes in working capital due to the timing of receipts and payments.

Accounts receivable at March 31, 2026, decreased approximately $27.0 million compared to December 31, 2025, primarily related to TA collections in our Military+ segment.

Cash flow provided by accounts payable, accrued liabilities, and accrued compensation and benefits at March 31, 2026, were approximately $12.4 million.

Accounts receivable at June 30, 2026, decreased approximately $30.2 million compared to December 31, 2025, primarily related to TA collections in our Military+ Segment.

Cash flow provided by accounts payable, accrued liabilities, and accrued compensation and benefits at June 30, 2026, were approximately $5.6 million, due primarily to increased advertising accruals at June 30, 2026.

Investing Activities

Net cash used in investing activities was $2.5 million for the three months ended March 31, 2026, compared to $3.4 million of net cash used in investing activities for the three months ended March 31, 2025, mainly due to a decrease in capital expenditures in the current year period, when compared to prior year.

Net cash used in investing activities was $83.2 million for the six months ended June 30, 2026, compared to $15.4 million of net cash provided by investing activities for the six months ended June 30, 2025, mainly due to purchases of short-term investments of $75.9 million during the three months ended June 30, 2026.

For the six months ended June 30, 2025, cash provided by investing activities included $23.0 million in proceeds from the sale of assets held for sale.

Financing Activities

Net cash used in financing activities was $16.3 million and $5.0 million for the three months ended March 31, 2026, and 2025, respectively.

The increase in cash used in financing activities in the current year period is primarily due to cash paid for the repurchase of common stock of $8.7 million, mainly relating to the deemed repurchase of our common stock to satisfy minimum tax-withholding requirements in connection with the vesting of restricted stock grants.

In the three months ended March 31, 2026, we also refinanced our corporate debt which included a $6.5 million net principal paydown and $1.1 million for debt issuance costs.

Financing activities for the three months ended March 31, 2025, included preferred stock dividends paid of $1.4 million.

Net cash used in financing activities was $22.2 million and $49.5 million for the six months ended June 30, 2026, and 2025, respectively.

The decrease in cash used in financing activities in the current year period is primarily due to the refinancing of our corporate debt which included a $6.5 million net principal paydown and $1.8 million for debt issuance costs.

Financing activities for the six months ended June 30, 2025, included our redemption of Series A Senior Preferred Stock in June 30, 2025 for $43.1 million and preferred stock dividends paid of $2.8 million.

Contractual Commitments

1 unchanged sentence

Purchase obligations include agreements with consultants, contracts with third-party service providers, and other future contracts or agreements.

During 2026, the Company entered into two operating lease agreements for new campus locations in Florida and Michigan as part of its continued campus expansion efforts.

The leases are expected to commence in the fall of 2026 and spring of 2027, respectively, and have aggregate contractual rental commitments of approximately $8.1 million.

The Company will recognize the related right-of-use assets and lease liabilities upon lease commencement in accordance with ASC 842.

For a summary of our contractual obligations, please refer to Item 7 of Part II of our Annual Report.

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 2. Management’s Discussion and Analysis