American Public Education (NASDAQ:APEI) executives said the company’s efforts in 2025 to “simplify and strengthen” the business helped drive revenue growth, margin expansion, and a stronger balance sheet, even as a 43-day federal government shutdown disrupted tuition assistance (TA) registrations at American Public University System (APUS) during the fourth quarter.
Fourth-quarter results: healthcare strength offsets APUS disruption
For the fourth quarter of 2025, APEI reported consolidated revenue of $158.3 million, down 3.5% from $164.1 million a year earlier. CFO Edward Codispoti said the company exceeded its most recently stated guidance despite the shutdown-related impact at APUS.
- APUS fourth-quarter revenue was $71.0 million, down 13.8% year-over-year, with net course registrations of 82,200, down 15.3%.
- Rasmussen fourth-quarter revenue was $66.6 million, up 15.9%, driven by 8.9% enrollment growth to approximately 15,900 students.
- Hondros College of Nursing fourth-quarter revenue was $20.7 million, up 9.2%, with enrollment of 4,000 students, up 8.1%.
Codispoti said fourth-quarter net income available to common stockholders was $12.6 million, or $0.67 per diluted share, compared with $11.5 million, or $0.63 per diluted share, in the prior-year period. Fourth-quarter adjusted EBITDA was $28.7 million, down from $31.4 million, with an adjusted EBITDA margin of 18.1%.
Government shutdown: registrations delayed, then rebounded
Management said the fourth-quarter headwind at APUS was tied to the federal government shutdown, which created a registration interruption for active duty military students tied to TA funding. CEO Angela Selden noted it had been 12 years since the Defense Appropriations Bill (which funds TA) remained unsigned by Oct. 1.
Executives highlighted what they described as a rebound once the government reopened in December. Selden said the company saw a 41% increase in TA registrations in December compared with December 2024, and emphasized that because many APUS students take one course at a time, the disruption primarily delayed progression rather than stopping it entirely.
During the Q&A, management said APUS had previously guided to a fourth-quarter revenue impact of $20 million to $24 million, but after reviewing results—helped by a stronger-than-expected December—estimated the actual shortfall was closer to $12 million to $15 million.
Chief Strategy and Growth Officer Gary Janson said the December rebound appeared to include both new and continuing students returning after funding resumed, adding that roughly 20,600 TA registrations in October and November were dropped for non-payment during the interruption.
Full-year 2025: revenue up 4%, adjusted EBITDA up 19%
For full-year 2025, APEI reported consolidated revenue of $648.9 million, up 3.9% from 2024. Selden said the company delivered this growth despite the mid-year sale of Graduate School U.S.A., the announced closure of two Rasmussen campuses in Wisconsin, and the APUS registration interruption. Management added that excluding Graduate School U.S.A. from both periods, consolidated revenue growth would have been about 7%.
By segment for the full year:
- APUS revenue was $319.8 million, up 0.9%.
- Rasmussen revenue was $246.2 million, up 13.9%. Codispoti said Rasmussen delivered segment income from operations of $4.1 million versus a $21.8 million loss in 2024.
- Hondros revenue was $75.0 million, up 11.4%.
Adjusted EBITDA for 2025 was $85.7 million, up 18.6% from $72.3 million, with adjusted EBITDA margin expanding 164 basis points to 13.2%. Net income available to common stockholders was $25.3 million, or $1.36 per diluted share, compared with $10.1 million, or $0.55, a year earlier. Codispoti attributed the year-over-year increase to execution, margin expansion, and the absence of preferred dividends following the company’s preferred equity redemption in the second quarter.
Balance sheet actions: refinancing and new buyback authorization
APEI ended 2025 with cash equivalents and restricted cash totaling $176.5 million, up from $158.9 million at year-end 2024. Total debt was $96.4 million, and the company reported a net cash position of $80.1 million.
Codispoti said the company refinanced its debt on March 9, lowering its borrowing rate by approximately 375 basis points at current leverage levels and reducing principal from $96.4 million to $90 million. He said the changes are expected to produce approximately $3.7 million in annual interest expense savings (excluding amortization of debt issuance costs), and that for modeling purposes interest income is expected to be roughly equivalent to interest expense in 2026 given cash balances and the improved borrowing rate. The refinancing will also result in a non-cash write-off of approximately $1.6 million related to deferred financing costs from the previous loan.
The company’s board also authorized a $50 million share repurchase program. Codispoti said the authorization is expected to be used primarily to offset dilution from share-based compensation, while giving the company flexibility to repurchase shares opportunistically depending on market conditions and other capital priorities. He described capital allocation priorities as organic growth first, maintaining a conservative balance sheet, then opportunistic M&A, followed by returning capital to shareholders.
2026 outlook: segment changes, campus openings, and guidance
Selden said the company is progressing toward its institutional combination, noting the Higher Learning Commission approved a key step in late February and that the three institutions’ legal entities were combined into one on March 2. Management said it is working with the Department of Education and HLC to complete remaining steps to operate under one OPE ID, targeting an effective date at the beginning of the third quarter of 2026 for the 2026 financial aid award year.
APEI also announced that beginning in fiscal 2026 it will report results in two segments: APU Global and RU Health Plus. In response to an analyst question, management said it would not break out Rasmussen and Hondros separately going forward.
On expansion, Selden said the company plans to launch two campuses: a Rasmussen campus in Orlando (already enrolling students for the second quarter of 2026) and a Hondros campus in Detroit (anticipated to be prepared to enroll students in the first quarter of 2027). Management said most of the capital expenditures tied to new campus openings should be weighted toward the second half of 2026, primarily the fourth quarter. Executives described new campuses as “CapEx light,” estimating about $3.5 million to open, 8 to 18 months to turn cash flow positive, and at scale about $12 million in revenue with roughly a 35% EBITDA margin.
For 2026, the company guided to:
- Full-year revenue of $685 million to $695 million
- Full-year net income available to common stockholders of $41.3 million to $47.6 million
- Full-year adjusted EBITDA of $91.5 million to $100.5 million
- Full-year diluted EPS of $2.15 to $2.47
- CapEx of $28 million to $32 million
For the first quarter of 2026, APEI guided to revenue of $173 million to $175 million and adjusted EBITDA of $25.5 million to $27.0 million, with net income available to common stockholders of $11.1 million to $12.2 million and diluted EPS of $0.58 to $0.64. Selden noted that the first-quarter 2025 comparison included $3.7 million of Graduate School U.S.A. revenue, which is not included following the unit’s sale in July 2025.
About American Public Education (NASDAQ:APEI)
American Public Education, Inc operates as a provider of online postsecondary education, offering degree and certificate programs through its wholly owned subsidiary, American Public University System (APUS). The company designs and delivers a broad range of undergraduate and graduate programs in fields such as business administration, information technology, criminal justice, homeland security, health sciences, and education. Its curriculum is developed to meet the needs of working adults, military personnel, veterans and civilian students seeking flexible, career-relevant learning opportunities.
APUS is regionally accredited by the Middle States Commission on Higher Education and employs a proprietary online learning platform that supports asynchronous instruction, digital course materials and interactive learning tools.
