American Public Education, Inc. 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- American Public Education (APEI) reported second quarter 2026 total revenue of $171.7 million, a 5.5% year-over-year increase, or 7.8% excluding $3.4 million of Graduate School USA revenue from the prior year period.
- Adjusted EBITDA grew 36.8% to $20.7 million, exceeding guidance, with an adjusted EBITDA margin of 12%, up 275 basis points from 9.3% in the prior year period.
- Net income available to common stockholders was $9.8 million, or $0.52 per diluted share, compared to a loss of $0.3 million, or $0.02 per diluted share, in the prior year period.
- Health Plus segment revenue grew 11% to $86.2 million, driven by 7% enrollment growth to approximately 19,600 students and a price increase; segment income from operations improved to $0.3 million from a loss of $2.4 million the prior year.
- Military Plus segment revenue grew 4.7% to $85.5 million with net course registrations increasing 2% to approximately 98,300 students; segment income from operations increased 10.6% to $23.7 million with margin expansion of 150 basis points to 29.4%.
- APEI completed its institutional combination on August 4, 2026, unifying American Public University System, Rasmussen University, and Hondros College of Nursing under a single Higher Learning Commission accreditation and Department of Education approval for federal student aid.
- The combination lifted previous growth restrictions on Rasmussen enrollments.
- APEI announced development of a new AI-enabled student lifecycle platform with Salesforce, expected to begin delivering value in early 2027, initially rolling out in the Health Plus division.
- Cash, cash equivalents, restricted cash, and short-term investments totaled $222.8 million as of June 30, 2026, up 26.2% from December 31, 2025.
- Year-to-date cash flows from operations increased 45.6% to $75.4 million.
- APEI has an active $50 million share repurchase program with $45 million remaining.
- Management noted ongoing headwinds in active duty military enrollments due to Middle East conflict deployments, particularly in Navy, Air Force, and Marine branches, but Army enrollments remain strong.
- The company’s Trailblazer initiative to open two new campuses annually is on track, with the first 2027 campus lease signed in Fort Lauderdale, Florida.
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Transcript
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Thank you for standing by. My name is Jonathan, and I will be your conference operator today. At this time, I would like to welcome everyone to the APEI second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I would now like to turn the call over to Jack Landry, Investor Relations.
Please go ahead. Thank you, and good afternoon, everyone.
Welcome to American Public Education's conference call to discuss second quarter 2026 results. Joining me on the call today are Angela Selden, President and Chief Executive Officer of APEI, and Chancellor of the American Public University System, Edward Codispoti, Executive Vice President and Chief Financial Officer, and Gary Jansen, Chief Strategy and Growth Officer. Materials for today's call, which is being webcast and is open to the public, are available in the Events and Presentations section of APEI's website. Statements made during this call and in the accompanying presentation regarding APEI and subsidiaries that are not historical facts may be forward-looking statements that are based on management's current expectations, assumptions, estimates, and projections.
Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expressed or implied by such statements, including risks related to potential impacts from government shutdowns or changing federal or state government policies, laws, practices, and actions, including impacts on revenues or the timing of receivables and other factors identified in our Form 10-K and Form 10-Q under the heading Risk Factors and other SEC filings. Forward-looking statements may sometimes be identified by words like believe, estimate, expect, may, plan, potentially, project, target, outlook, path, position, on track, on base, should, will, would, and similar or opposite words.
Forward-looking statements include, without limitation, statements regarding expected operational efficiencies, technology platform implementations, marketing efficiency initiatives, expectations regarding the resilience of our programs to market or technological disruption, expectations for registration and enrollments, revenue, earnings, adjusted EBITDA, adjusted EBITDA margin, and other earnings guidance, our foundation for growth and our current and future growth initiatives, strategic investments, capital allocation, and M&A opportunities, operational milestones and timelines, the completed combination of our institutions, governmental and regulatory actions, their impact, and our response to those actions, changing market demands, and our ability to satisfy such demands and other company initiatives. The call and the presentation contain references to non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDA margin. A reconciliation between each non-GAAP financial measure we use and the most directly comparable GAAP measure is located in the appendix to today's presentation and in the earnings release.
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