American Public Education, Inc.

What they do

APEI operates three subsidiary institutions: American Public University System (APUS), an exclusively online institution serving about 88,700 adult learners, heavily focused on the military and public service communities; Rasmussen University (RU), which provides nursing- and health sciences-focused education to about 15,900 students at 18 campuses across five states and online; and Hondros College of Nursing. The company reports two segments, Military+ and Health+, and describes itself as the number one educator of active-duty military and veterans through APUS and a national leader in pre-licensure nursing education. Programs span certificates, associate, bachelor's, graduate and doctoral degrees.

Revenue drivers

• Military+ segment — Revenue of $85.5 million in Q2 2026, up 4.7% year over year, driven by increased net course registrations of 98,300 (up 2.0%) including students using tuition assistance and VA-administered education benefits. The segment reported a 27.7% operating margin in Q2 2026.
• Health+ segment — Revenue of $86.2 million in Q2 2026, up 11.0% year over year, driven by total enrollment of about 19,600 (up 6.6%, with on-ground up 9.2% and online up 3.4%) and modest tuition increases. Segment operating margin was 0.4% in Q2 2026 versus negative 3.1% a year earlier.
• Tuition and fee revenue from nursing and health sciences programs — Delivered through Rasmussen University's PN diploma, ADN and BSN programs and Hondros College of Nursing, including a newly opened Orlando campus under the company's 'Trailblazer' campus opening strategy.

Recent performance

Q2 2026 consolidated revenue was $171.7 million, up 5.5% from $162.8 million, or up 7.8% excluding Graduate School USA, which was sold in July 2025. Net income available to common stockholders was $9.8 million, or $0.52 per diluted share, versus a loss of $0.3 million a year earlier. Adjusted EBITDA rose 36.8% to $20.7 million from $15.1 million, and cash flows from operations were $12.1 million versus $14.8 million. For the six months ended June 30, 2026, revenue of $346.4 million produced net income of $27.7 million, and total cash, equivalents, restricted cash and short-term investments were $222.8 million at June 30, 2026, up $46.3 million from December 31, 2025.

Strategy

Management completed the combination of APUS, RU and HCN into a single Higher Learning Commission-accredited institution named American Public University System after quarter end. The company is pursuing campus expansion, including the new Health+ Orlando campus under its 'Trailblazer' campus opening strategy, along with cost savings and revenue-generating initiatives. It also bought back stock under a $50 million repurchase authorization approved March 10, 2026, with $45.0 million remaining available at June 30, 2026. Management raised full-year 2026 revenue, net income and adjusted EBITDA guidance and cites demand across its businesses and disciplined execution.

Risks

• Student recruitment and retention — The company must enroll new qualified students cost-effectively and replace students lost to graduation, transfers, withdrawals and military deployments in order to grow revenue.
• Regulatory compliance — APEI operates under extensive regulation including the 90/10 Rule, financial responsibility standards, state law, accrediting agency requirements and actions by the U.S. Department of Education; non-compliance or regulatory changes could harm the business.
• Government funding and budget exposure — Military+ revenue depends on Department of Defense tuition assistance programs, VA-administered education benefits and federal appropriations, including the impact of government shutdowns such as the October to November 2025 shutdown.
• Segment operating margin pressure — The Health+ segment's operating margin was only 0.4% in Q2 2026, with rising advertising, employee compensation, classroom materials, bad debt and technology costs offsetting revenue growth.

Outlook

For Q3 2026, APEI guides Military+ net registrations of 101,000 to 103,000 (up 1.0% to 3.0%), Health+ enrollment of 19,100 (up 2.5%), revenue of $164.5 million to $167.0 million, net income available to common stockholders of $3.4 million to $5.4 million, adjusted EBITDA of $14.0 million to $17.0 million and diluted EPS of $0.18 to $0.29. Management raised full-year 2026 revenue, net income and adjusted EBITDA guidance and states it remains focused on disciplined execution and building on first-half momentum. The company notes these statements are forward-looking and actual results may differ materially.