UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
						SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2025~~2026


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
						SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-33810

AMERICAN PUBLIC EDUCATION, INC.

(Exact name of registrant as specified in its charter)

Delaware			01-0724376
(State or other jurisdiction of			(I.R.S. Employer
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
incorporation or organization)			Identification No.)
111 West Congress Street, Charles Town, West Virginia			25414
(Address of principal executive offices)			(Zip Code)

(304) 724-3700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $.01 par value

APEI

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The total number of shares of common stock outstanding as of ~~November~~May 7, ~~2025~~2026, was 18,~~085~~343,~~030~~488.

AMERICAN PUBLIC EDUCATION, INC.

FORM 10-Q

INDEX

			Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements			3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2319
Item 3. Quantitative and Qualitative Disclosures About Market Risk			4028
Item 4. Controls and Procedures			4129
PART II – OTHER INFORMATION
Item 1. Legal Proceedings			4129
Item 1A. Risk Factors			4129
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4430
Item 3. Defaults Upon Senior Securities			4430
Item 4. Mine Safety Disclosures			4430
Item 5. Other Information			4530
Item 6. Exhibits			4532
SIGNATURES			4633

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Balance Sheets

	As of September 30, 2025		As of December 31, 2024
ASSETS	(Unaudited)
Current assets:
Cash, cash equivalents, and restricted cash (Note 2)	$	193,144	$	158,941
Accounts receivable, net of allowance of $19,837 in 2025 and $19,280 in 2024	43,908		62,465
Prepaid expenses	14,426		13,748
Income tax receivable	7,632		949
Assets held for sale	—		24,469
Total current assets	259,110		260,572
Property and equipment, net	70,739		73,383
Operating lease assets, net	61,596		94,776
Deferred income taxes	40,075		47,311
Intangible assets, net	28,221		28,221
Goodwill	59,593		59,593
Other assets, net	5,962		6,247
Total assets	$	525,296	$	570,103
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,708	$	7,847
Accrued compensation and benefits	30,033		20,546
Accrued liabilities	18,024		13,735
Deferred revenue and student deposits	23,952		23,474
Lease liabilities, current	11,672		13,553
Total current liabilities	91,389		79,155
Lease liabilities, long-term	60,203		93,645
Long-term debt, net	94,368		93,424
Total liabilities	245,960		266,224
Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized; 400 shares issued and outstanding in 2024, ($117,439 liquidation preference per share, $46,976 in aggregate, for 2024) (Note 12)	—		39,691
Common stock, $.01 par value; 100,000,000 shares authorized; 18,080,212 issued and outstanding in 2025; 17,712,575 issued and outstanding in 2024	181		177
Additional paid-in capital	308,290		305,823
Accumulated other comprehensive loss	(27)		(7)
Accumulated deficit	(29,108)		(41,805)
Total stockholders’ equity	279,336		303,879
Total liabilities and stockholders’ equity	$	525,296	$	570,103

(In thousands, except share and per share amounts)


	As of March 31, 2026		As of December 31, 2025
ASSETS	(Unaudited)
Current assets:
Cash, cash equivalents, and restricted cash (Note 2)	$	220,998	$	176,499
Accounts receivable, net of allowance of $21,820 in 2026 and $21,113 in 2025	38,710		65,662
Prepaid expenses	19,152		14,197
Income tax receivable	3,267		3,458
Total current assets	282,127		259,816
Property and equipment, net	68,800		70,598
Operating lease assets, net	54,925		57,686
Deferred income taxes	38,247		39,176
Intangible assets, net	28,221		28,221
Goodwill	59,593		59,593
Other assets, net	6,001		6,328
Total assets	$	537,914	$	521,418
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,138	$	4,822
Accrued compensation and benefits	22,317		22,463
Accrued liabilities	22,643		13,375
Deferred revenue and student deposits	25,193		23,016
Lease liabilities, current	11,182		11,374
Long-term debt, current	5,063		—

Total current liabilities	94,536		75,050
Lease liabilities, long-term	54,010		56,921

Long-term debt, net	83,203		94,665
Total liabilities	231,749		226,636
Commitments and contingencies (Note 9)
Stockholders’ equity:
Common stock, $.01 par value; 100,000,000 shares authorized; 18,411,154 issued and outstanding in 2026; 18,125,860 issued and outstanding in 2025	184		181
Additional paid-in capital	305,750		311,119
Accumulated other comprehensive gain	—		(18)
Accumulated earnings (deficit)	231		(16,500)
Total stockholders’ equity	306,165		294,782
Total liabilities and stockholders’ equity	$	537,914	$	521,418

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

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Income

(In thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025		2024
	2026		2025
	(Unaudited)				~~(Unaudited)~~
Revenue	$	~~163~~174,~~215~~738	$	~~153~~164,~~122~~551	$	~~490,532~~	$	~~460,449~~
Costs and expenses:
Instructional costs and services	74,~~698~~630		7574,~~401~~944		~~228,065~~		~~224,042~~
Selling and promotional	3637,~~139~~867		3335,~~459~~205		~~106,392~~		~~99,753~~
General and administrative	3436,~~689~~290		3536,~~030~~407		~~109,243~~		~~105,733~~
Depreciation and amortization	34,~~946~~154		53,~~080~~992		~~12,026~~		~~15,440~~
Loss on sale of subsidiary (Note 2)	3,877		—		3,877		—
Loss on assets held for sale (Note 2)	—		1,527
Loss on assets held for sale (Note 4)	—		—		1,527		—
Loss on disposals of long-lived assets	154		230
Loss on leases (Note 5)	77		—		77		3,715
Total costs and expenses	153,095		152,305
Loss on disposals of long-lived assets	92		23		357		235
Income from operations before interest and income taxes	21,643		12,246
Total costs and expenses	153,518		148,993		461,564		448,918
Loss on extinguishment of debt (Note 7)	(1,672)		—
Income from operations before interest and income taxes	9,697		4,129		28,968		11,531
Interest expense, net	(725)		(887)
Interest expense, net	(1,069)		(631)		(3,064)		(1,542)
Income before income taxes	19,246		11,359
Income before income taxes	8,628		3,498		25,904		9,989
Income tax expense	1,515		2,466
Income tax expense	3,068		1,236		6,955		2,433
Net income	$	17,731	$	8,893
Equity investment loss	—		—		—		(4,407)
Preferred stock dividends	—		1,432
Net income	$	5,560	$	2,262	$	18,949	$	3,149
Net income available to common stockholders	$	17,731	$	7,461
Preferred stock dividends	—		1,531		2,751		4,597
Income per common share:
Loss on redemption of preferred stock	—		—		3,501		—
Basic	$	0.97	$	0.42
Net income (loss) available to common stockholders	$	5,560	$	731	$	12,697	$	(1,448)
Diluted	$	0.94	$	0.41
Income (loss) per common share:
Weighted average number of common shares:
Basic	$18,282	~~0.31~~	$17,840	~~0.04~~	$	~~0.71~~	$	~~(0.08)~~
Diluted	$18,804	~~0.30~~	$18,417	~~0.04~~	$	~~0.68~~	$	~~(0.08)~~
Weighted average number of common shares:
Basic	18,070		17,679		17,982		17,604
Diluted	18,755		18,247		18,596		18,076

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

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025		2024
	2026		2025
	(Unaudited)				~~(Unaudited)~~
Net income	$	517,~~560~~731	$	28,~~262~~893	$	~~18,949~~	$	~~3,149~~
Other comprehensive gain (loss), net of tax:
Unrealized gain (loss) on hedging derivatives	10		(93)		(36)		444
Unrealized loss on hedging derivatives	—		(63)
Tax effect	~~(9)~~—		2317		11		~~(110)~~
Unrealized gain (loss) on hedging derivatives, net of taxes	1		(70)		(25)		334
Unrealized loss on hedging derivatives, net of taxes	—		(46)
Reclassification of loss (gain) to net income	—		(807)		7		(2,378)
Reclassification of gain to net income	24		7
Tax effect	—(6)		~~200~~(2)		~~(2)~~		~~590~~
Reclassifications of loss (gain) to net income, net of taxes	—		(607)		5		(1,788)
Reclassifications of gain to net income, net of taxes	18		5
Total other comprehensive gain (loss)	118		(~~677~~41)		~~(20)~~		~~(1,454)~~
Comprehensive income (loss)	$	5,561	$	1,585	$	18,929	$	1,695
Comprehensive income	$	17,749	$	8,852

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

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands, except share amounts)

							Additional Paid-in Capital		Accumulated Other Comprehensive Income (loss)		Accumulated Earnings (Deficit)		Total Stockholders’ Equity
	Preferred Stock			Common Stock
	Shares	Amount		Shares	Amount
Balance as of December 31, 2024	400	$	39,691	17,712,575	$	177	$	305,823	$	(7)	$	(41,805)	$	303,879
Balance as of December 31, 2025	—	$	—	18,125,860	$	181	$	311,119	$	(18)	$	(16,500)	$	294,782
Preferred stock dividends	—	—		—	—		—		—		(1,432)		(1,432)
Exercise of stock options	—	—		470	—		17		—		—		17
Exercise of stock options	—	—		14,431	—		143		—		—		143
Issuance of common stock under employee benefit plans	—	—		480,429	5		(5)		—		—		—
Issuance of common stock under employee benefit plans	—	—		480,515	5		(5)		—		—		—
Deemed repurchased shares of common and restricted stock for tax withholding	—	—		(177,765)	(2)		(7,708)		—		—		(7,710)
Deemed repurchased shares of common and restricted stock for tax withholding	—	—		(171,100)	(2)		(3,691)		—		—		(3,693)
Stock-based compensation	—	—		—	—		2,327		—		—		2,327
Stock-based compensation	—	—		—	—		2,263		—		—		2,263
Repurchased and retired shares of common stock	—	—		(17,840)	—		—		—		(1,000)		(1,000)
Other comprehensive loss	—	—		—	—		—		(41)		—		(41)
Other comprehensive gain	—	—		—	—		—		18		—		18
Net income	—	—		—	—		—		—		817,~~893~~731		817,~~893~~731
Balance as of March 31, 2025	400	$	39,691	18,036,421	$	180	$	304,533	$	(48)	$	(34,344)	$	310,012
Balance as of March 31, 2026	—	$	—	18,411,154	$	184	$	305,750	$	—	$	231	$	306,165
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
Exercise of stock options	—	—		5,086	—		107		—		—		107
Issuance of common stock under employee benefit plans	—	—		20,409	2		(2)		—		—		—
Deemed repurchased shares of common and restricted stock for tax withholding	—	—		(6,882)	(1)		(205)		—		—		(206)
Stock-based compensation	—	—		—	—		1,634		—		—		1,634
Other comprehensive income	—	—		—	—		—		1				1
Net income	—	—		—	—		—		—		5,560		5,560
Balance as of September 30, 2025	—	—		18,080,212	$	181	$	308,290	$	(27)	$	(29,108)	$	279,336


							Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Earnings (Deficit)		Total Stockholders’ Equity
	Preferred Stock			Common Stock
	Shares	Amount		Shares	Amount
Balance as of December 31, 2024	400	$	39,691	17,712,575	$	177	$	305,823	$	(7)	$	(41,805)	$	303,879
Preferred stock dividends	—	—		—	—		—		—		(1,432)		(1,432)
Exercise of stock options	—	—		14,431	—		143		—		—		143
Issuance of common stock under employee benefit plans	—	—		480,515	5		(5)		—		—		—
Deemed repurchased shares of common and restricted stock for tax withholding	—	—		(171,100)	(2)		(3,691)		—		—		(3,693)
Stock-based compensation	—	—		—	—		2,263		—		—		2,263
Other comprehensive loss	—	—		—	—		—		(41)		—		(41)
Net income	—	—		—	—		—		—		8,893		8,893
Balance as of March 31, 2025	400	$	39,691	18,036,421	$	180	$	304,533	$	(48)	$	(34,344)	$	310,012

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

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of ~~Stockholders’~~Cash ~~Equity (Unaudited)~~Flows

(In thousands)

(In thousands, except share amounts)


	Three Months Ended March 31,
	2026		2025
	(Unaudited)
Operating activities
Net income	$	17,731	$	8,893
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	4,154		3,992
Loss on extinguishment of debt	1,627		—
Amortization of debt issuance costs	235		348
Stock-based compensation	2,327		2,263
Deferred income taxes	929		1,245
Loss on assets held for sale	—		1,527
Loss on disposals of long-lived assets	154		230
Changes in operating assets and liabilities:
Accounts receivable, net of allowance for bad debt	26,952		20,593
Prepaid expenses	(4,955)		(6,919)
Income tax receivable	191		1,126
Operating leases, net	(289)		(58)
Other assets	285		(405)
Accounts payable	3,316		2
Accrued compensation and benefits	(146)		(2,507)
Accrued liabilities	8,616		5,055
Deferred revenue and student deposits	2,177		1,613
Net cash provided by operating activities	63,304		36,998
Investing activities

Capital expenditures	(2,527)		(3,902)
Proceeds from the sale of real property	—		500
Net cash used in investing activities	(2,527)		(3,402)
Financing activities
Cash paid for repurchase of common stock	(8,710)		(3,693)
Cash received from exercise of stock options	17		143
Preferred stock dividends paid	—		(1,432)


Cash paid for principal on borrowings and finance leases	(96,478)		(53)
Cash received from borrowings	90,000		—
Cash paid for debt issuance costs	(1,107)		—
Net cash used in financing activities	(16,278)		(5,035)
Net increase in cash, cash equivalents, and restricted cash	44,499		28,561
Cash, cash equivalents, and restricted cash at beginning of period	176,499		158,941
Cash, cash equivalents, and restricted cash at end of period	$	220,998	$	187,502

Supplemental disclosure of cash flow information
Interest paid	$	1,762	$	2,398
Income taxes paid	$	396	$	80

							Additional Paid-in Capital		Accumulated Other Comprehensive Income (loss)		Accumulated Deficit		Total Stockholders’ Equity
	Preferred Stock			Common Stock
	Shares	Amount		Shares	Amount
Balance as of December 31, 2023	400	$	39,691	17,604,371	$	176	$	299,561	$	1,644	$	(49,096)	$	291,976
Preferred stock dividends	—	—		—	—		—		—		(1,535)		(1,535)
Issuance of common stock under employee benefit plans	—	—		331,781	3		(3)		—		—		—
Deemed repurchased shares of common and restricted stock for tax withholding	—	—		(113,911)	(1)		(1,339)		—		—		(1,340)
Stock-based compensation	—	—		—	—		1,918		—		—		1,918
Repurchased and retired shares of common stock	—	—		(251,146)	(2)		—		—		(2,766)		(2,768)
Other comprehensive loss	—	—		—	—		—		(294)		—		(294)
Net income	—	—		—	—		—		—		516		516
Balance as of March 31, 2024	400	$	39,691	17,571,095	$	176	$	300,137	$	1,350	$	(52,881)	$	288,473
Preferred stock dividends	—	—		—	—		—		—		(1,531)		(1,531)
Exercise of stock options	—	—		5,796	—		67		—		—		67
Issuance of common stock under employee benefit plans	—	—		94,961	1		—		—		—		1
Deemed repurchased shares of common and restricted stock for tax withholding	—	—		(1,826)	—		(26)		—		—		(26)
Stock-based compensation	—	—		—	—		1,823		—		—		1,823
Other comprehensive loss	—	—		—	—		—		(483)		—		(483)
Net income	—	—		—	—		—		—		371		371
Balance as of June 30, 2024	400	39,691		17,670,026	177		302,001		867		(54,041)		288,695
Preferred stock dividends	—	—		—	—		—		—		(1,531)		(1,531)
Issuance of common stock under employee benefit plans	—	—		46,511	—		—		—		—		—
Deemed repurchased shares of common and restricted stock for tax withholding	—	—		(5,650)	—		(92)		—		—		(92)
Stock-based compensation	—	—		—	—		1,761		—		—		1,761
Other comprehensive loss	—	—		—	—		—		(677)				(677)
Net income	—	—		—	—		—		—		2,262		2,262
Balance as of September 30, 2024	400	39,691		17,710,887	177		303,670		190		(53,310)		290,418

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

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Cash Flows

	Nine Months Ended September 30,
	2025		2024
	(Unaudited)
Operating activities
Net income	$	18,949	$	3,149
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	12,026		15,440
Amortization of debt issuance costs	1,019		1,123
Stock-based compensation	6,135		5,502
Equity investment loss	—		4,407
Deferred income taxes	7,236		816
Loss on assets held for sale	1,527		—
Loss on disposals of long-lived assets	357		235
Loss on sale of subsidiary	2,764		—
Changes in operating assets and liabilities:
Accounts receivable, net of allowance for bad debt	16,430		8,325
Prepaid expenses	(990)		(4,651)
Income tax receivable	(6,683)		(4,886)
Operating leases, net	(364)		2,997
Other assets	(785)		(374)
Accounts payable	1,034		1,797
Accrued compensation and benefits	9,337		5,388
Accrued liabilities	2,734		4,516
Deferred revenue and student deposits	2,790		3,489
Net cash provided by operating activities	73,516		47,273
Investing activities
Cash outlay from the sale of subsidiary	(709)		—
Capital expenditures	(11,796)		(17,728)
Proceeds from the sale of real property	22,959		—
Net cash provided by (used in) investing activities	10,454		(17,728)
Financing activities
Cash paid for repurchase of common stock	(3,929)		(4,225)
Cash received from exercise of stock options	265		67
Preferred stock dividends paid	(2,751)		(4,597)
Cash paid for redemption of preferred stock	(43,192)		—
Cash paid for principal on borrowings and finance leases	(160)		(2,883)
Net cash used in financing activities	(49,767)		(11,638)
Net increase in cash, cash equivalents, and restricted cash	34,203		17,907
Cash, cash equivalents, and restricted cash at beginning of period	158,941		144,342
Cash, cash equivalents, and restricted cash at end of period	$	193,144	$	162,249
Supplemental disclosure of cash flow information
Interest paid	$	7,271	$	8,183
Income taxes paid	$	6,393	$	6,023

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

AMERICAN PUBLIC EDUCATION, INC.

Notes to Consolidated Financial Statements

Note 1. Nature of the Business

American Public Education, Inc., or APEI, ~~which~~ together with its ~~subsidiaries~~subsidiary is 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. surviving the merger. The Company provides education services through the following ~~subsidiary~~reportable ~~institutions~~segments:

•~~American~~Military+, ~~Public~~which ~~University~~was ~~System,~~formerly ~~Inc.,~~the or 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, ~~or AMU,~~ and American Public University~~, or APU~~. ~~APUS is institutionally accredited by the Higher Learning Commission, or HLC.~~

•~~Rasmussen College~~Health+, ~~LLC,~~consisting ~~which~~of isthe ~~referred~~businesses tothat ~~herein~~formerly ascomprised ~~Rasmussen~~the ~~University,~~RU orSegment RUand the HCN Segment, aprovides nursing- and health sciences-focused ~~institution,~~and ~~provides~~other postsecondary education, toincluding ~~students~~business, attechnology, 20and ~~campuses~~education, into ~~six~~students ~~states~~through ~~and online.~~ RU isand ~~institutionally accredited by HLC~~HCN.

~~•National~~Until ~~Education~~the ~~Seminars~~planned combination of APUS, ~~Inc.~~RU, ~~which~~and isHCN ~~referred~~into toone ~~herein~~consolidated asinstitution ~~Hondros~~named ~~College~~American Public University System, or the Combination, is approved by the U.S. Department of ~~Nursing~~Education, or ED, and the U.S. Department of Education expands the scope of APUS’s certification to include RU and HCN, ~~provides~~each ~~nursing~~institution ~~education~~will continue to ~~students~~operate atas ~~eight~~a ~~campuses~~separately inaccredited ~~three~~institution ~~states~~with its own education regulatory approvals. APUS, RU, and HCN isare ~~institutionally~~licensed ~~accredited~~or otherwise authorized by state authorities to offer education programs to the ~~Accrediting~~extent ~~Bureau~~the ~~for~~institutions ~~Health~~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 ~~Schools~~Act of 1965, as amended, or ~~ABHES.~~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, ~~provides~~through ~~career learning and leadership training in-person and online to the federal workforce. On~~ July 25, 2025, or the GSUSA Sale Date~~, APEI completed the sale of its membership interest in GSUSA; therefore, the Consolidated Balance Sheet as of September 30, 2025, no longer includes the accounts of GSUSA~~. The accompanying Consolidated Financial Statements include the operations of GSUSA through the GSUSA Sale Date in Corporate and Other. Please refer to “Note 2. Summary of Significant Accounting Policies” for more information on APEI’s sale of its membership interest in GSUSA.

~~The~~ Adjustments ~~Company’s subsidiary institutions are licensed or otherwise authorized by state authorities~~ to ~~offer~~reconcile ~~education~~segment ~~programs~~results to the ~~extent~~Consolidated ~~the~~Financial ~~institutions~~Statements ~~believe~~are ~~such~~included ~~licenses~~in orCorporate ~~authorizations are required~~ and ~~are~~Other. ~~certified~~These byadjustments ~~the~~include ~~United~~unallocated ~~States~~corporate ~~Department~~activity ofand ~~Education~~eliminations, ~~or ED~~and, prior to ~~participate~~the inGSUSA ~~student~~Sale ~~financial~~Date, ~~aid~~the ~~programs~~operational ~~authorized~~activities ~~under~~of ~~Title~~GSUSA. IVPrior ofperiod ~~the~~segment ~~Higher~~disclosures ~~Education~~have ~~Act~~been ofrecast ~~1965,~~to asconform ~~amended,~~to orthe ~~Title~~current IVperiod ~~programs~~presentation.

~~The~~Please ~~Company’s~~refer ~~operations~~to ~~are~~“Note ~~organized~~8. ~~into~~Segment Information” for more information on the ~~following~~Company’s reportable segments:.

•American Public University System Segment, or APUS Segment. This segment reflects the operational activities of APUS.

•Rasmussen University Segment, or RU Segment. This segment reflects the operational activities of RU.

•Hondros College of Nursing Segment, or HCN Segment. This segment reflects the operational activities of HCN.

Adjustments to reconcile segment results to the Consolidated Financial Statements are included in Corporate and Other. These adjustments include unallocated corporate activity and eliminations, and, prior to the GSUSA Sale Date, the operational activities of GSUSA. Prior to the GSUSA Sale Date, GSUSA operated as a stand-alone subsidiary of APEI but did not meet the quantitative thresholds to qualify as a reportable segment and did not have other requisite characteristics as a reportable segment. Therefore, GSUSA’s results prior to the GSUSA Sale Date were combined with and presented within Corporate and Other.

Please refer to “Note 9. Segment Information” for more information on the Company’s reporting segments.

Note 2. Summary of Significant Accounting Policies

A summary of the Company’s significant accounting policies follows:

Basis of Presentation and Accounting

9The Company has prepared the accompanying unaudited, interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP.

The accompanying unaudited, interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

Business Combinations

The Company accounts for business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations, or FASB ASC 805, which requires companies to use the acquisition method ~~to be used~~ for all business combinations. Under ASC 805, the assets and liabilities of an acquired company are reported at business fair value along with the fair value of acquired intangible assets at the date of acquisition. Goodwill

~~Business Divestitures~~8

~~The~~represents ~~Company accounts for business divestitures in accordance with FASB ASC 810, Consolidation. On~~ the ~~GSUSA~~excess ~~Sale Date, APEI completed the sale~~ of its membership interest in its wholly owned subsidiary, GSUSA, for $0.5 million, subject to customary adjustments, including for net working capital and cash, and recorded a $3.9 million loss on sale of subsidiary. Subsequent to the ~~GSUSA~~purchase ~~Sale~~price ~~Date, APEI has no continuing involvement in GSUSA. The sale~~ of ~~its~~an ~~membership~~acquired ~~interest~~business inover ~~GSUSA is not considered a significant shift in~~ the ~~strategic~~amount ~~focus~~assigned ~~of APEI, nor is it considered material~~ to ~~APEI’s~~the ~~operations,~~assets ~~cash~~acquired ~~flows,~~ and ~~financial~~liabilities ~~position~~assumed, and ~~therefore~~ the ~~sale~~fair ofvalue ~~GSUSA~~assigned isto ~~not~~identifiable ~~accounted~~intangible ~~for as a discontinued operation~~assets.

Principles of Consolidation

The accompanying unaudited interim ~~Consolidated~~consolidated ~~Financial~~financial ~~Statements~~statements ~~include~~reflect the accounts of APEI and its wholly owned ~~subsidiaries~~subsidiary. All material intercompany transactions and balances have been eliminated in consolidation.

The Company’s reportable segments are determined in accordance with FASB ASC 280, Segment Reporting, and are based upon how the chief operating decision maker, or CODM, analyzes performance and makes decisions. The Company organizes its business across two reportable segments: Military+ and Health+. Each segment represents an educational division that provides a variety of postsecondary academic programs.

Unaudited Interim Consolidated Financial Information

The unaudited interim Consolidated Financial Statements do not include all the information and notes required by GAAP for audited annual financial statement presentations. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of the Company’s financial position, results of operations, and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for future periods, including the year ending December 31, ~~2025~~2026. This Quarterly Report on Form 10-Q, or this Quarterly Report, should be read in conjunction with the Consolidated Financial Statements and accompanying notes in its audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2024~~2025, or the Annual Report.

Use of Estimates

In preparing financial statements in conformity with GAAP, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company evaluates these estimates and assumptions on an ongoing basis and bases its estimates on experience, current and expected future conditions and various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions, and the impact of such differences may be material to the Consolidated Financial Statements.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of demand deposits with financial institutions, money market funds, and U.S. Treasury bills. Cash and cash equivalents are Level 1 assets in the fair value reporting hierarchy.

Restricted Cash

Restricted cash includes funds held for students for unbilled educational services that were received from Title IV programs. 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. AsTotal restricted cash as of ~~December~~March 31, ~~2024~~2026, ~~restricted~~and ~~cash~~December 31, ~~included~~2025, awas $253.4 million ~~restricted~~and ~~certificate~~$2.4 ofmillion, ~~deposit to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020~~ respectively.

composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required. In May 2025, the letter of credit was released by ED, and the cash was thereafter no longer restricted. Restricted cash on the accompanying Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, excluding the restricted certificate of deposit at December 31, 2024, was $1.8 million and $1.5 million, respectively. Total restricted cash as of September 30, 2025, and December 31, 2024, was $1.8 million and $27.0 million, respectively.

Cash and cash equivalents and restricted cash as of September 30, 2025, and December 31, 2024, were as follows (in thousands):

	As of September 30, 2025		As of December 31, 2024
	(Unaudited)
Cash, cash equivalents, and restricted cash	$	193,144	$	158,941
Less: restricted cash	(1,799)		(27,015)
Total unrestricted cash	$	191,345	$	131,926

Assets Held for Sale

Assets held for sale ~~at December 31, 2024~~ represent excess real property located in Charles Town, West Virginia ~~for~~of the ~~APUS~~Company’s ~~Segment~~Military+ segment. ~~Long~~The Company classifies long-lived assets ~~are classified~~ 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. As such, the properties are recorded at the lower of the carrying value or fair value, less costs to sell, until such time the assets are sold. The Company completed the sale of its remaining assets held for sale in June 2025. For additional details regarding assets held for sale, please refer to “Note 4. Assets Held for Sale” to the Consolidated Financial Statements.

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.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the ~~tangible and identified intangible~~ assets acquired and liabilities assumed, ~~based~~and onthe ~~their estimated~~ fair ~~values~~value onof ~~the~~acquired ~~acquisition~~intangible ~~date.~~assets ~~Goodwill~~at ~~and~~the ~~indefinite-lived~~date ~~intangible~~of ~~assets~~acquisition. ~~are~~Goodwill is not amortized. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC 350, Intangibles Goodwill and Other, and Accounting Standards Update, or ASU, 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The Company’s goodwill and intangible assets are deductible for tax purposes.

The Company annually assesses goodwill for impairment, or more frequently if events or circumstances indicate that goodwill might be impaired. Goodwill impairment testing consists of an optional qualitative assessment as well as a quantitative test. The quantitative test compares the fair value of a reporting unit to its carrying value. If the carrying value of the reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the carrying value is greater than the fair value, the difference between the two values is recorded as an impairment.

Indefinite-lived and finite-lived intangible assets acquired in business combinations are recorded at fair value on the acquisition date. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of the asset.

The Company ~~annually~~reviews ~~assesses~~its ~~goodwill~~indefinite-lived and finite-lived intangible assets for impairment inwhenever ~~the~~events ~~fourth quarter,~~ or ~~more~~changes ~~frequently~~in ~~if events or~~ circumstances indicate that ~~goodwill might be impaired or~~ the carrying amount of an asset may not be recoverable. ~~Goodwill~~If ~~impairment~~such ~~testing~~assets ~~consists~~are ofnot anrecoverable, ~~optional qualitative assessment as well as~~ a ~~quantitative~~potential ~~test.~~impairment ~~The~~loss ~~quantitative~~is ~~test~~recognized ~~compares the fair value of a reporting unit~~ to ~~its carrying value. If~~ the ~~carrying~~extent ~~value of~~ the ~~reporting unit is greater than zero and its fair value is greater than its~~ carrying amount, ~~there~~of ~~is no impairment. If~~ the ~~carrying~~assets ~~value~~exceeds ~~is greater than~~ the fair value, ~~and~~of ~~such assets are not recoverable,~~ the ~~difference between the two values is recorded as an impairment~~assets.

For additional details regarding goodwill and intangible assets, please refer to “Note 65. Goodwill and Intangible Assets” to the Consolidated Financial Statements.

~~Investments~~Series A Senior Preferred Stock

Prior to December 31, 2024, the Company accounted for its investments in less than majority owned companies in accordance with FASB ASC 323, Investments – Equity Method and Joint Ventures and FASB ASC 321, Investments – Equity Securities. The Company ~~applied~~redeemed ~~ASC~~all ~~323~~400 tooutstanding ~~investments~~shares ~~when it had the ability to exercise significant influence but did not control the operating and financial policies~~ of the ~~company,~~Series ~~which~~A ~~was~~Senior ~~generally~~Preferred ~~represented~~Stock byin ~~equity~~June ~~ownership of at least 20 percent but not more than 50 percent~~2025. ~~Investments~~Accordingly, ~~accounted~~there ~~for under the equity method~~ were ~~initially~~no ~~recorded~~preferred atstock ~~cost~~dividends ~~and~~declared ~~subsequently~~or ~~adjusted~~paid byduring the ~~Company’s~~three ~~share~~months ofended ~~equity~~March 31, in2026. ~~income~~During ~~or losses after~~ the ~~date~~three ofmonths ~~acquisition.~~ended ~~The~~March ~~pro~~31, ~~rata~~2025, ~~share~~dividends ofdeclared ~~the~~and ~~operating~~paid ~~results~~on of the ~~investee~~Series ~~was~~A ~~reported~~Senior inPreferred ~~the~~Stock ~~accompanying Consolidated Statements of Income as equity investment income or loss. Investments that did not meet the equity method requirements~~ were ~~accounted for using the cost method under~~ $1.4 million.

ASC 321 with changes in the fair value of the investment reported in the accompanying Consolidated Statements of Income as equity investment income or loss.

During the first quarter of 2024, the Company evaluated its equity investments for indicators of impairment and concluded the fair value of a cost method investment was less than its carrying amount. As a result, the Company recorded an investment loss of $3.3 million during the first quarter of 2024 on a 2015 cost method investment. This investment loss was due to the investee entering into a new convertible debt agreement that resulted in the conversion of the Company’s preferred stock holdings in the investee into common shares, and the dilution of the Company’s ownership percentage. The investment loss recorded reduced the book value of the cost method investment to zero.

During the second quarter of 2024, the Company sold its remaining equity method investment back to the investee, as it was no longer considered a strategic investment. As a result, the Company recorded an investment loss of $1.1 million during the second quarter of 2024 on a 2013 equity method investment. The investment loss recorded reduced the book value of the equity method investment to zero. As a result, the Company no longer has any investments accounted for under ASC 323 and ASC 321 as of September 30, 2025, and December 31, 2024.

Stock-based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC 718, Stock Compensation, which requires companies to expense share-based compensation based on fair value, and ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Stock-based payments may include incentive stock options or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance shares, performance units, cash-based awards, other stock-based awards, including unrestricted shares, or any combination of the foregoing.

Stock-based compensation cost is recognized as an expense generally over a three-year vesting period using the straight-line method for employees and the graded-vesting method for members of the Company’s Board of Directors, or the Board., Itand is measured using the Company’s closing stock price on the date of the grant. An accelerated one-year period is used to recognize stock-based compensation cost for employees who have reached certain service and retirement eligibility criteria on the date of grant. The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model that uses certain assumptions. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of the Company’s common stock. In addition, the Company determines the risk-free interest rate by selecting the U.S. Treasury constant maturity for the same maturity as the estimated life of the option quoted on an investment basis in effect at the time of grant for that business day.

~~Judgment~~Estimating ~~is required in estimating~~ the percentage of share-based awards that are expected to vest, and in the case of performance stock units, ~~or PSUs,~~ the level of performance that will be achieved and the number of shares that will be earned, requires judgment. The Company estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original estimates. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. 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.~~

1210

~~Stock-based~~intended ~~compensation~~to ~~expense~~predict ~~for~~actual ~~the~~future ~~three~~events, and ~~nine~~subsequent ~~months~~events ~~ended~~are ~~September 30,~~not ~~2025,~~indicative ~~and~~of ~~2024,~~the ~~was~~reasonableness asof ~~follows~~the ~~(in~~original ~~thousands):~~estimates of fair value made under ASC 718.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(Unaudited)				(Unaudited)
Instructional costs and services	$	172	$	189	$	583	$	609
Selling and promotional	122		120		515		389
General and administrative	1,340		1,452		5,037		4,504
Total stock-based compensation expense	$	1,634	$	1,761	$	6,135	$	5,502

Stock-based compensation expense for the three months ended March 31, 2026, and 2025, was as follows (in thousands):


	Three Months Ended March 31,
	2026		2025
	(Unaudited)
Instructional costs and services	$	233	$	239
Selling and promotional	211		204
General and administrative	1,883		1,820
Total stock-based compensation expense	$	2,327	$	2,263

Incentive-based Compensation

The Company provides incentive-based compensation opportunities to certain employees through cash incentive and equity awards. The expense associated with these awards is reflected within the Company’s operating expenses. For the years ending December 31, ~~2025~~2026, and ~~2024~~2025, the Management Development and Compensation Committee of the Board approved annual incentive arrangements for senior management employees. The aggregate amount of awards payable, if any, is dependent upon the achievement of certain Company financial and operational goals and the satisfaction of individual performance goals. Given that the awards are generally contingent upon achieving annual objectives, final determination of the current year incentive awards cannot be made until after the results for the year are finalized. The Company recognizes the estimated fair value of performance-based restricted stock units by assuming the satisfaction of any performance-based objectives at the “target” level, which is the most probable outcome determined for accounting purposes at the time of grant and multiplying the corresponding number of shares earned based upon such achievement by the closing price of the Company’s stock on the date of grant. To the extent performance goals are not met, compensation cost is not ultimately recognized against the goals and, to the extent previously recognized, compensation cost is reversed. 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 ~~and nine~~ months ended ~~September~~March 3031, 2026 and 2025, the Company recognized an aggregate incentive-based compensation expense of $21.39 million and $~~7.3 million, respectively, compared to an aggregate expense of $~~1.78 million ~~and $5.4 million for the three and nine months ended September 30~~, ~~2024,~~ respectively.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, Accounting for Income Taxes. The Company determines its interim tax provision by applying the estimated income tax rate expected for the full calendar year to income before income taxes for the period adjusted for discrete items.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued by the FASB. All ASUs issued subsequent to the filing of the Annual Report on March 612, ~~2025~~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.

Note 3. Revenue

Disaggregation of Revenue

In the following table, revenue, shown net of grants and scholarships, is disaggregated by ~~type of service provided~~source. The table also includes a reconciliation of the disaggregated revenue within the reportable segments (in thousands):

1311

Three Months Ended September 30, 2025

Three Months Ended March 31, 2026

(Unaudited)

APUS

HCN

Corporate and Other

Consolidated

Military+

Health+

Corporate and Other

Consolidated

Instructional services, net of grants and scholarships

8188,~~583~~005

5170,~~256~~920

~~15,138~~(61)

~~808~~158,864

~~148,785~~

Graduation fees

1,~~225~~113

—

—1,113

~~1,225~~

Textbook and other course materials

—

812,~~853~~236

~~2,962~~—

—12,236

~~11,815~~

Other fees

~~329~~325

~~721~~2,200

~~340~~—

—2,525

~~1,390~~

Total Revenue

8389,~~137~~443

6085,~~830~~356

~~18,440~~(61)

~~808~~174,738

~~163,215~~

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

(Unaudited)

APUS

HCN

Corporate and Other

Consolidated

Military+

Health+

Corporate and Other

Consolidated

Instructional services, net of grants and scholarships

7682,~~037~~551

4464,~~263~~115

133,~~014~~678

8150,~~044~~344

~~141,358~~

Graduation fees

~~794~~1,087

—

—1,087

~~794~~

Textbook and other course materials

—

711,~~814~~822

~~2,120~~—

—11,822

~~9,934~~

Other fees

~~150~~308

~~527~~990

~~359~~—

—1,298

~~1,036~~

Total Revenue

7683,~~981~~946

5276,~~604~~927

153,~~493~~678

8164,~~044~~551

~~153,122~~

	Nine Months Ended September 30, 2025
	(Unaudited)
	APUS		RU		HCN		Corporate and Other		Consolidated
Instructional services, net of grants and scholarships	$	244,652	$	151,418	$	44,961	$	7,866	$	448,897
Graduation fees	3,222		—		—		—		3,222
Textbook and other course materials	—		26,168		8,336		—		34,504
Other fees	940		2,016		953		—		3,909
Total Revenue	$	248,814	$	179,602	$	54,250	$	7,866	$	490,532

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.

	Nine Months Ended September 30, 2024
	(Unaudited)
	APUS		RU		HCN		Corporate and Other		Consolidated
Instructional services, net of grants and scholarships	$	232,261	$	133,675	$	40,303	$	18,642	$	424,881
Graduation fees	1,913		—		—		—		1,913
Textbook and other course materials	—		23,507		7,072		—		30,579
Other fees	511		1,591		974		—		3,076
Total Revenue	$	234,685	$	158,773	$	48,349	$	18,642	$	460,449

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.

Corporate and Other includes tuition and contract training revenue earned by GSUSA through the GSUSA Sale Date and the elimination of intersegment revenue for courses taken by employees of one segment at other segments.

Contract Balances and Performance Obligations

The Company had no contract assets or deferred contract costs as of ~~September~~March 3031, ~~2025~~2026, and December 31, ~~2024~~2025.

The Company recognizes a contract liability, or deferred revenue, when a student begins a course, ~~in the case of APUS,~~ or starts a term~~, in the case of RU and HCN~~. Deferred revenue at ~~September~~March 3031, ~~2025~~2026, was $2425.02 million and ~~included~~includes $1516.76 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $8.26 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. Deferred revenue at December 31, ~~2024~~2025, was $23.50 million and ~~included~~includes $1415.10 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $98.40 million in student deposits.

The Company has elected, as a practical expedient, not to disclose additional information about unsatisfied performance obligations for contracts with students that have an expected duration of one year or less.

When the Company begins providing ~~the~~ performance obligations, a contract receivable is created, resulting in accounts receivable on the accompanying Consolidated Balance Sheets. The Company ~~accounts for receivables in accordance with FASB ASC 310, Receivables. The Company~~ uses the portfolio approach, a practical expedient, to evaluate if a contract exists and to assess collectability at the time of contract inception based on historical experience. Contracts are subsequently reviewed for collectability if significant events or circumstances indicate a change.

The allowance for doubtful accounts is based on management’s evaluation of the status of existing accounts receivable. Among other factors, management considers the age of the receivable, the anticipated source of payment, and historical allowance considerations. Consideration is also given to any specific known risk areas among the existing accounts receivable balances. Recoveries of receivables previously written off are recorded when received. APUS and RU do not charge interest on past due accounts receivable. HCN charges interest on payment plans when a student graduates or otherwise exits the program. Interest charged by HCN on payment plans was ~~immaterial~~not material for the periods presented.

~~Note 4. Assets Held for Sale~~12

~~Assets~~Note ~~held for sale at December 31, 2024, represent excess real property located in Charles Town, West Virginia, for the Company’s APUS Segment~~4. Leases

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 is included in loss on assets held for sale in the accompanying Consolidated Statements of Income for the nine months ended September 30, 2025. APUS completed the sale in June 2025 for net sales proceeds of $6.6 million.

In the fourth quarter of 2024, APUS entered into an agreement to sell a building previously in use for $16.6 million. As a result, the building was reclassified to held for sale as of December 31, 2024, at the contract amount less estimated costs to sell of $0.7 million, or $15.9 million. APUS completed the sale in June 2025 for net sales proceeds of $15.9 million.

In the fourth quarter of 2024, APUS entered into an agreement to sell an undeveloped parcel of land for $0.5 million which approximated its carrying value. As a result, the land was classified in assets held for sale as of December 31, 2024. APUS completed the sale in February 2025 for net sales proceeds of $0.5 million.

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

Note 5. Leases

The Company has operating leases for office space and campus facilities and finance leases for certain copiers and printers. Leases are classified as operating leases unless they meet any of the criteria below to be classified as a finance lease:

•the lease transfers ownership of the asset at the end of the lease;

•the lease grants an option to purchase the asset that the lessee is expected to exercise;

•the lease term reflects a major part of the asset’s economic life;

•the present value of the lease payments equals or exceeds the fair value of the asset; or

•the asset is specialized with no alternative use to the lessor at the end of the term.

Operating Leases

The Company has operating leases for office space and campus facilities. Some leases include options to terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. The Company leases corporate office space in Florida, under an operating lease that expires in January 2029. ~~The~~Excluding RUa ~~Segment~~campus ~~leases~~being 20closed ~~campuses located~~ in ~~six states under operating leases that expire through March 2034 and~~2026, ~~until~~the ~~October~~Company ~~31, 2025, administrative office space in Minneapolis, Minnesota. The HCN Segment~~ leases ~~administrative~~27 ~~office~~campuses ~~space~~located in ~~suburban Columbus, Ohio, and leases~~ eight ~~campuses~~states ~~located~~for inthe ~~three~~Health+ ~~states~~segment under operating leases that expire through December 2034. Prior to the GSUSA Sale Date, GSUSA leased classroom and administrative office space in Washington, D.C. and Honolulu, Hawaii.

Operating lease assets are right-of-use assets, or ROU assets, which represent the right to use an underlying asset for the lease term. Operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating leases are included in the Operating lease assets, net, and Operating lease liabilities, current and long-term, on the accompanying Consolidated Balance Sheets. These assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate based on information available at lease commencement to determine the present value of the lease payments. The ROU asset includes all lease payments and excludes lease incentives.

Lease expense for operating leases is recognized on a straight-line basis over the lease term. There are no variable lease payments. Lease expense for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, was $3.95 million ~~and~~compared to $134.39 million, ~~respectively,~~for ~~compared~~the tothree ~~$4.7~~months ~~million~~ended ~~and~~March 31, ~~$14~~2025.2 ~~million~~Lease expense for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, ~~respectively~~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 ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, was $4.3 ~~million and $13~~.85 million, ~~respectively,~~ compared to $4.57 million ~~and $12.8 million~~ for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, ~~respectively,~~ and is included in operating cash flows.

Loss on Leases

During the three months ended March 31, 2024, the Company elected to terminate its RU Segment lease for a planned Dallas, Texas campus. The Company paid a lease termination fee of $2.2 million and recorded a loss of $2.1 million as a result of this lease termination. Additionally, in the first quarter of 2024, the Company’s RU Segment began consolidating two Minnesota campuses, and, as a result, during the three months ended June 30, 2024, the Company paid a lease termination fee of $1.2 million related to the consolidation and recorded a $1.2 million loss on leases as a result of the lease termination.

In May 2024, RU notified the Wisconsin Educational Approval Program that it intends to voluntarily close two Wisconsin campuses, effective December 31, 2025, and 2026, respectively. As a result, the Company recorded a lease impairment of $0.4 million during the three months ended June 30, 2024, and recorded an additional lease impairment of $0.1 million during the three months ended September 30, 2025.

The total loss on leases was $0.1 million for the three and nine months ended September 30, 2025, and $3.7 million for the nine months ended September 30, 2024, and is included in Loss on leases in the Consolidated Statements of Income.

Finance Leases

The Company leases copiers and printers pursuant to leases that are classified as finance leases and that expire in 2027. The Company pledged the assets financed to secure the outstanding leases. As of ~~September~~March 3031, ~~2025~~2026, the total finance lease liability was $0.32 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 ~~and $0.1 million~~ for both the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, ~~respectively, compared to $0.1 million~~ and ~~$0.2 million for the three and nine months ended September 30~~2025, ~~2024,~~ 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 ~~September~~March 3031, ~~2025~~2026 (in thousands):


Maturity of Lease Liabilities (Unaudited)	Operating Leases		Finance Leases
2026 (remaining)	$	10,754	$	160
2027	13,957		36
2028	12,560		—
2029	10,831		—
2030	9,221		—
2031	8,926		—
2032 and beyond	11,468		—
Total future minimum lease payments	$	77,717	$	196
Less: imputed interest	(12,714)		(7)
Present value of operating lease liabilities	$	65,003	$	189
Less: lease liabilities, current	(10,993)		(189)
Lease liabilities, long-term	$	54,010	$	—


Balance Sheet Classification (Unaudited)
Current:
Operating lease liabilities, current	$	10,993
Finance lease liabilities, current	189
Long-term:
Operating lease liabilities, long-term	54,010
Finance lease liabilities, long-term	—
Total lease liabilities	$	65,192


Other Information (Unaudited)
Weighted average remaining lease term (in years):
Operating leases	5.99
Finance leases	0.91
Weighted average discount rate:
Operating leases	5.4	%
Finance leases	7.0	%

Note 5. 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.

Note 6. Income Per Common Share

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 during the period. 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,
	2026		2025
	(Unaudited)
Income per common share
Net income	$	17,731	$	8,893
Preferred stock dividend	—		1,432

Net income available to common stockholders	$	17,731	$	7,461
Basic weighted average shares outstanding	18,282		17,840
Income per common share	$	0.97	$	0.42

Diluted income per common share
Net income available to common stockholders	$	17,731	$	7,461
Basic weighted average shares outstanding	18,282		17,840
Effect of dilutive restricted stock and options	522		577
Diluted weighted average shares outstanding	18,804		18,417
Diluted income per common share	$	0.94	$	0.41

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.

Note 7. Long-Term Debt

On March 9, 2026, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent, or the Agent, and a syndicate of lenders, or the 2026 Credit Agreement. The 2026 Credit Agreement provides for (i) a $90.0 million senior secured term loan, or the 2026 Term Loan, and (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $40.0 million, or the 2026 Revolving Credit Facility, or, together with the 2026 Term Loan, the 2026 Facilities, $25.0 million of which may be utilized for the issuance of letters of credit. The 2026 Revolving Credit Facility also includes a $5.0 million subfacility for swing line loans. The 2026 Facilities are scheduled to mature on March 9, 2031, or the Maturity Date.

The 2026 Credit Agreement replaces 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. The 2026 Revolving Credit Facility replaces the Company’s prior $20.0 million senior secured revolving credit facility under the Prior Credit Agreement, and the proceeds of the 2026 Term Loan, together with cash on hand, were used to repay the approximately $96.4 million principal amount outstanding under the Company’s prior $175.0 million term loan under the Prior Credit Agreement. 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). 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. 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. Subject to certain exceptions, the Company is also required to make mandatory prepayments of the 2026 Term Loan with the proceeds of asset sales, casualty and condemnation events, and unpermitted debt issuances. The Company may make voluntary prepayments of the borrowings under the 2026 Facilities at any time without premium or penalty.

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. The obligations of the Company and the Guarantors under the 2026 Credit Agreement are secured by a pledge of substantially all of their respective assets, pursuant to the terms of the Security and Pledge Agreement dated as of March 9, 2026, by and among the Agent, the Company, and the Guarantors from time to time party thereto.

The 2026 Credit Agreement contains customary affirmative and negative covenants, including limitations on the Company’s and its subsidiaries’ ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, make capital expenditures, and enter into affiliate transactions, in each case, subject to certain exceptions, as well as customary representations, warranties, events of default, and remedies upon default, including acceleration and rights to foreclose on the collateral securing the 2026 Facilities. 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
	(Unaudited)
Credit agreement	$	90,000	$	96,425
Less: Deferred financing fees	(1,734)		(1,760)
Total debt	88,266		94,665
Less: Current portion	(5,063)		—
Long-Term Debt	$	83,203	$	94,665

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


Maturities of Long-Term Debt (Unaudited)	Loan Payments
2026 (remaining)	$	3,375
2027	6,750
2028	6,750
2029	9,000
2030	9,000
2031	55,125
Total	$	90,000

Maturity of Lease Liabilities (Unaudited)	Operating Leases		Finance Leases
2025 (remaining)	$	3,938	$	53
2026	15,168		213
2027	13,957		36
2028	12,560		—
2029	10,913		—
2030	11,099		—
2031 and beyond	18,600		—
Total future minimum lease payments	$	86,235	$	302
Less: imputed interest	(14,647)		(15)
Present value of operating lease liabilities	$	71,588	$	287
Less: lease liabilities, current	(11,473)		(199)
Lease liabilities, long-term	$	60,115	$	88

Note 8. Segment Information

Balance Sheet Classification (Unaudited)
Current:
Operating lease liabilities, current	$	11,473
Finance lease liabilities, current	199
Long-term:
Operating lease liabilities, long-term	60,115
Finance lease liabilities, long-term	88
Total lease liabilities	$	71,875

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 recast its historical results to reflect this change. For additional details, please refer to “Note 1. Nature of the Business” to the accompanying Consolidated Financial Statements.

Other Information (Unaudited)
Weighted average remaining lease term (in years):
Operating leases	6.34
Finance leases	1.41
Weighted average discount rate:
Operating leases	5.4	%
Finance leases	7.0	%

Corporate and Other includes unallocated corporate activity and eliminations to reconcile segment results to the Consolidated Financial Statements, and, prior to the GSUSA Sale Date, included GSUSA revenue and expenses. GSUSA did not meet the quantitative thresholds to qualify as a reportable segment.

Note 6. Goodwill and Intangible Assets

During the three months ended September 30, 2025, in connection with the preparation of this Quarterly Report, the Company performed a qualitative assessment for potential impairment of the RU and HCN Segment goodwill and indefinite-lived intangible assets. 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 RU and HCN’s 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 for the RU and HCN Segments, the Company concluded it was more likely than not that the fair value of each of the RU and HCN Segments was more than the respective carrying value, and therefore, no quantitative impairment test and no impairment charge was necessary.

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. The Company’s annual assessment during the fourth quarter of 2024 concluded that the fair value of RU and HCN exceeded their carrying values by approximately $71.9 million, or 62%, and $8.6 million, or 24%, respectively.

All recorded identified intangible assets with a definite useful life were fully amortized as of December 31, 2024. Finite-lived intangible assets were amortized in a manner that reflected the estimated economic benefit of the intangible assets and were amortized on a straight-line basis. For the three and nine months ended September 30, 2024, the Company recorded amortization expense related to definite-lived intangible assets of approximately $0.8 million and $3.3 million, respectively. For additional information on goodwill and intangible assets, see the Consolidated Financial Statements and accompanying notes in the Annual Report.

Note 7. Income (Loss) Per Common Share

Income (loss) per common share is calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income (loss) available to common stockholders is net income (loss) adjusted for preferred stock dividends declared and loss on redemptions of preferred stock. Diluted income (loss) per common share is calculated by dividing net income (loss) 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 (loss) 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 (loss) per common share (in thousands, expect per share amounts).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(Unaudited)				(Unaudited)
Income (loss) per common share
Net income	$	5,560	$	2,262	$	18,949	$	3,149
Preferred stock dividend	—		1,531		2,751		4,597
Loss on redemption of preferred stock	—		—		3,501		—
Net income (loss) available to common shareholders	$	5,560	$	731	$	12,697	$	(1,448)
Basic weighted average shares outstanding	18,070		17,679		17,982		17,604
Income (loss) per common share	$	0.31	$	0.04	$	0.71	$	(0.08)
Diluted income (loss) per common share
Net income (loss) available to common shareholders	$	5,560	$	731	$	12,697	$	(1,448)
Basic weighted average shares outstanding	18,070		17,679		17,982		17,604
Effect of dilutive restricted stock and options	685		568		614		472
Diluted weighted average shares outstanding	18,755		18,247		18,596		18,076
Diluted income (loss) per common share	$	0.30	$	0.04	$	0.68	$	(0.08)

The table below reflects a summary of securities that could potentially dilute basic income (loss) per common share in future periods that were not included in the computation of diluted income (loss) per share because the effect would have been antidilutive (in thousands).

	Three Months Ended September 30,		Nine Months Ended September 30,
	2025	2024	2025	2024
	(Unaudited)		(Unaudited)
Antidilutive securities:
Stock options	4	104	29	110
Restricted shares	—	—	25	22
Total antidilutive securities	4	104	54	132

Note 8. Long-Term Debt

In connection with the acquisition of RU, APEI, as borrower, entered into a Credit Agreement with Macquarie Capital Funding LLC, or the Credit Agreement, as administrative agent and collateral agent, or the Agent, Macquarie Capital USA Inc.

and Truist Securities, Inc., as lead arrangers and joint bookrunners, and certain lenders party thereto, or the Lenders. The Credit Agreement provides for (i) a senior secured term loan facility in an aggregate original principal amount of $175.0 million, or the Term Loan, with a scheduled maturity date of September 1, 2027 and (ii) a senior secured revolving loan facility in an aggregate commitment amount of $20.0 million, or the Revolving Credit Facility, and, together with the Term Loan, is referred to as the Facilities, with a scheduled maturity date of September 1, 2026, the full capacity of which may be utilized for the issuance of letters of credit. The Revolving Credit Facility also includes a $5.0 million sub-facility for swing line loans. The Term Loan, the proceeds of which were used as part of the cash consideration for the RU acquisition, was fully funded on September 1, 2021, or the RU Closing Date, and is presented net of deferred financing fees on the accompanying Consolidated Balance Sheets. Deferred financing fees are being amortized using the effective interest method over the term of the Term Loan. As of September 30, 2025, and December 31, 2024, the remaining unamortized deferred financing fees were $2.1 million and $3.0 million, respectively. Deferred financing fees of $0.5 million related to the Revolving Credit Facility were recorded as an asset and are being amortized to interest expense over the term of the Revolving Credit Facility. There were no borrowings outstanding under the Revolving Credit Facility as of September 30, 2025, and December 31, 2024.

Outstanding borrowings under the Facilities bear interest at a per annum rate equal to Term Secured Overnight Financing Rate, or Term SOFR, plus 5.50% (plus a credit spread adjustment ranging from 0.11448% to 0.42826% depending on the interest period selected by APEI), and subject to a 0.75% floor after giving effect to such adjustment, which shall increase by an additional 2.00% on all past due obligations if APEI fails to pay any amount when due. As of September 30, 2025, the Facilities’ borrowing rate was 9.93%. An unused commitment fee in the amount of 0.50% is payable quarterly in arrears based on the average daily unused amount of the commitments under the Revolving Credit Facility.

Interest expense, including offsets from the interest rate cap agreement in 2024, was $2.5 million and $7.3 million for the three and nine months ended September 30, 2025, respectively, compared to $1.9 million and $5.8 million for the three and nine months ended September 30, 2024, respectively.

In December 2022, APEI made prepayments totaling $65.0 million on the Term Loan. With this prepayment, APEI is not required to make quarterly principal payments on the Term Loan until payment of the outstanding principal amount at maturity in September 2027, subject to certain exceptions, including with respect to annual excess cash flows, proceeds from the sale of certain assets, casualty and condemnation events, and prohibited debt issuances. APEI had no mandatory prepayment obligation for the year ended December 31, 2024, and no mandatory prepayment obligation related to the sale of assets held for sale in 2025.

The Facilities are and will be guaranteed by APEI’s subsidiaries and certain of APEI’s future subsidiaries that are required to become a party thereto as guarantors, or Guarantors. The obligations of APEI and the Guarantors are secured by a pledge of substantially all of their respective assets, pursuant to the terms of the Collateral Agreement dated as of the RU Closing Date, by and among APEI, the Agent and the Guarantors from time to time party thereto.

The Credit Agreement contains customary affirmative and negative covenants, including limitations on APEI’s and its subsidiaries’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, and enter into affiliate transactions, in each case, subject to certain exceptions, as well as customary representations, warranties, events of default, and remedies upon default, including acceleration and rights to foreclose on the collateral securing the Facilities. In addition, the Credit Agreement contains a financial covenant that requires APEI to maintain a Total Net Leverage Ratio of no greater than 2.00 to 1.00. As of September 30, 2025, the Company was in compliance with all debt covenants.

For additional information on certain restrictions placed on the Company’s indebtedness pursuant to the terms of the Company’s Series A Senior Preferred Stock prior to the redemption on June 23, 2025, please refer to “Note 12. Preferred Stock” to the Consolidated Financial Statements.

Long-term debt consists of the following as of September 30, 2025, and December 31, 2024 (in thousands):

	As of September 30, 2025		As of December 31, 2024
	(Unaudited)
Credit agreement	$	96,425	$	96,425
Deferred financing fees	(2,057)		(3,001)
Total debt	94,368		93,424
Less: Current portion	—		—
Long-Term Debt	$	94,368	$	93,424

Scheduled maturities of long-term debt as of September 30, 2025, are as follows (in thousands):

Maturities of Long-Term Debt (Unaudited)	Loan Payments
2027	$	96,425
Total	$	96,425

Derivatives and Hedging

The Company is subject to interest rate risk, as all outstanding borrowings under the Credit Agreement are subject to a variable rate of interest. On September 30, 2021, the Company entered into an interest rate cap agreement to manage its exposure to the variable rate of interest with a total notional value of $87.5 million. On June 30, 2023, in connection with the transition of the benchmark rate to Term SOFR, the Company entered into a new interest rate cap agreement, designated as a cash flow hedge, with the same notional value, to provide the Company with interest rate protection in the event that the Term SOFR rate exceeded 1.78%. The interest rate cap agreement expired on January 1, 2025.

In January 2025, the Company entered into a new interest rate cap agreement, with a notional value of $50.0 million. This new interest rate cap agreement, designated as a cash flow hedge, provides the Company with interest rate protection in the event that the Term SOFR rate exceeds 5.00%, and is scheduled to expire on June 30, 2026.

Changes in the fair value of the interest rate cap designated as a hedging instrument that effectively offset the variability of cash flows associated with the Company’s variable-rate long-term debt obligations are reported in accumulated other comprehensive income. These amounts subsequently are reclassified into interest expense as a yield adjustment of the hedged interest payments in the same period in which the related interest affects earnings.

Note 9. Segment Information

The Company’s Chief Executive Officer, as the chief operating decision maker, or CODM, organizes the company, manages resource allocations, and measures performance among three operating and reportable segments: APUS, RU, and HCN. Corporate and Other includes unallocated corporate activity and eliminations to reconcile segment results to the Consolidated Financial Statements, and, prior to the GSUSA Sale Date, GSUSA revenue and expenses. GSUSA did not meet the quantitative thresholds to qualify as a reportable segment.

The CODM reviews information about each reportable segment’s revenue and categorized expenses, and allocates resources to, and measures the performance of, each reportable segment using reportable segment operating income (loss). The CODM does not evaluate reportable segment asset or liability information.

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025	2024
	2026		2025
	(In thousands)				~~(In thousands)~~
APUS Segment
Military+ Segment
Revenue	~~83,137~~$	89,443	~~76,981~~$	83,946	~~248,814~~	~~234,685~~
Instructional costs and services	26,~~087~~207		2527,~~353~~311		~~81,916~~	~~78,668~~
Selling and promotional	16,~~809~~936		1415,~~882~~701		~~48,455~~	~~45,309~~
General and administrative	1314,~~954~~391		14,~~765~~234		~~42,996~~	~~44,843~~
Other (1)	1,~~007~~191		12,~~216~~574		~~4,599~~	~~3,722~~
Income from operations before interest and income taxes	~~25,280~~$	30,718	~~20,765~~$	24,126	~~70,848~~	~~62,143~~
RU Segment
Health+ Segment
Revenue	~~60,830~~$	85,356	~~52,604~~$	76,927	~~179,602~~	~~158,773~~
Instructional costs and services	3548,~~923~~446		3444,~~814~~453		~~104,427~~	~~101,292~~
Selling and promotional	1620,~~715~~732		1518,~~846~~399		~~49,517~~	~~47,180~~
General and administrative	712,~~266~~927		612,~~462~~050		~~22,291~~	~~22,120~~
Other (2)	2,~~166~~734		32,~~091~~843		~~6,655~~	~~13,582~~
Loss from operations before interest and income taxes	(1,240)		(7,609)		(3,288)	(25,401)
Income (loss) from operations before interest and income taxes	$	517	$	(818)
HCN Segment
Corporate and Other
Revenue	18,440		15,493		54,250	48,349
Revenue (4)	$	(61)	$	3,678
Instructional costs and services	~~11,762~~(23)		113,~~100~~179		~~34,645~~	~~32,929~~
Selling and promotional	~~2,236~~199		1,~~471~~105		~~5,914~~	~~3,731~~
General and administrative	48,~~778~~972		310,~~182~~123		~~14,137~~	~~12,310~~
Other (3)	~~537~~383		~~511~~333		~~1,575~~	~~1,198~~
Loss from operations before interest and income taxes	~~(873)~~$	(9,592)	~~(771)~~$	(11,062)	~~(2,021)~~	~~(1,819)~~
Corporate and Other
Total reportable segment revenue	$	174,799	$	160,873
Revenue	808		8,044		7,866	18,642
Corporate and Other revenue (4)	(61)		3,678
Instructional costs and services	926		4,134		7,077	11,153
Total consolidated revenue	$	174,738	$	164,551
Selling and promotional	379		1,260		2,506	3,533
Total reportable segment income from operations before interest and income taxes	$	31,235	$	23,308
General and administrative	8,691		10,623		29,819	26,462
Corporate and Other (loss) from operations before interest and income taxes	(9,592)		(11,062)
Other (4)	4,282		283		5,035	886
Total consolidated income from operations before interest and income taxes	$	21,643	$	12,246
Loss from operations before interest and income taxes	(13,470)		(8,256)		(36,571)	(23,392)
Total reportable segment revenue	162,407		145,078		482,666	441,807
Corporate and other revenue	808		8,044		7,866	18,642
Total consolidated revenue	163,215		153,122		490,532	460,449
Total reportable segment income from operations before interest and income taxes	23,167		12,385		65,539	34,923
Corporate and other (loss) from operations before interest and income taxes	(13,470)		(8,256)		(36,571)	(23,392)
Total consolidated income from operations before interest and income taxes	9,697		4,129		28,968	11,531

(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.

(3) Includes depreciation and amortization expense.

~~(4) Includes loss on sale of subsidiary and depreciation and amortization expense.~~17

21(4) Includes the elimination of intersegment revenue for courses taken by employees of one reportable segment at another reportable segment.

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025	2024
	2026		2025
	(In thousands)				~~(In thousands)~~
Depreciation and amortization
APUS Segment	939		1,216		2,951	3,671
Military+ Segment	$	1,055	$	1,029
RU Segment	2,065		3,069		6,342	9,684
Health+ Segment	2,716		2,630
HCN Segment	537		512		1,575	1,199
Total reportable segment depreciation and amortization	$	3,771	$	3,659
Total reportable segment depreciation and amortization	3,541		4,797		10,868	14,554
Corporate and Other	383		333
Corporate and Other	405		283		1,158	886
Total consolidated depreciation and amortization	$	4,154	$	3,992
Total consolidated depreciation and amortization	3,946		5,080		12,026	15,440
Interest expense, net
Interest expense, net
Military+ Segment	$	423	$	319
APUS Segment	401		394		1,082	1,274
Health+ Segment	151		466
RU Segment	87		(9)		601	(19)
Total reportable segment interest expense, net	$	574	$	785
HCN Segment	71		71		241	123
Corporate and Other	(1,299)		(1,672)
Total reportable segment interest expense, net	559		456		1,924	1,378
Total consolidated interest expense, net	$	(725)	$	(887)
Corporate and Other	(1,628)		(1,087)		(4,988)	(2,920)
Income tax expense (benefit)
Total consolidated interest expense, net	(1,069)		(631)		(3,064)	(1,542)
Military+ Segment	$	7,758	$	7,734
Income tax expense (benefit)
Health+ Segment	166		(421)
APUS Segment	8,556		8,580		22,320	23,425
Total reportable segment income tax expense	$	7,924	$	7,313
RU Segment	(394)		(3,051)		(1,161)	(9,148)
Corporate and Other	(6,409)		(4,847)
HCN Segment	(263)		(187)		(603)	(516)
Total consolidated income tax expense	$	1,515	$	2,466
Total reportable segment income tax expense	7,899		5,342		20,556	13,761
Corporate and Other	(4,831)		(4,106)		(13,601)	(11,328)
Total consolidated income tax expense	3,068		1,236		6,955	2,433

Note 109. Contingencies

The Company accrues for costs associated with contingencies, including, but not limited to, regulatory compliance and legal matters, when such costs are probable and can be reasonably estimated. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved. The Company bases these accruals on management’s estimate of such costs, which may vary from the ultimate costs and expenses associated with any such contingency.

From time to time, the Company is involved in legal matters in the normal course of its business.

Note 1110. Concentration

The Company’s students utilize various payment sources and programs to finance their education expenses, including funds from: the U.S. Department of Defense, or DoD, tuition assistance programs~~, or TA~~; education benefit programs administered by the U.S. Department of Veterans Affairs, or VA; federal student aid from Title IV programs; and cash and other sources.

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	Three Months Ended March 31,
	(Unaudited)		~~(Unaudited)~~
	2025	2024	2025	2024
	2026	2025
DoD tuition assistance programs	4245%	4244%	~~43%~~	~~45%~~
VA education benefits	2624%	2524%	~~25%~~	~~24%~~
Title IV programs	1817%	1918%	~~18%~~	~~17%~~
Cash and other sources	14%	14%	~~14%~~	~~14%~~

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

	Three Months Ended September 30,		Nine Months Ended September 30,
	Three Months Ended March 31,
	(Unaudited)		~~(Unaudited)~~
	2025	2024	2025	2024
RU	2026	2025
Title IV programs	7876%	7877%	~~78%~~	~~76%~~
Cash and other sources	2022%	2022%	~~20%~~	~~22%~~
VA education benefits	2%	21%	2%	2%

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


	Three Months Ended March 31,
	(Unaudited)
HCN	2026	2025
Title IV programs	84%	85%
Cash and other sources	15%	14%
VA education benefits	1%	1%

	Three Months Ended September 30,		Nine Months Ended September 30,
	(Unaudited)		(Unaudited)
	2025	2024	2025	2024
Title IV programs	84%	85%	85%	84%
Cash and other sources	15%	14%	14%	15%
VA education benefits	1%	1%	1%	1%

Note 12. Preferred Stock

On December 28, 2022, APEI issued 400 shares of the Series A Senior Preferred Stock, $0.01 par value per share, or Series A Senior Preferred Stock, to affiliates of existing common stockholders of APEI for an aggregate purchase price of $40.0 million. On June 23, 2025, or the Redemption Date, APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $43.1 million, including an early redemption premium of $3.1 million, and excluding $1.4 million in accrued and unpaid dividends. The loss on redemption of $3.5 million was calculated as the difference between the consideration paid, excluding dividends, and the book value of $39.6 million, and was recorded as a reduction to net income available to common stockholders in the accompanying Consolidated Statements of Income for the nine months ended September 30, 2025. No shares of preferred stock were issued or outstanding at September 30, 2025. On the Redemption Date, APEI also filed a Certificate of Elimination to its Fifth Amended and Restated Certificate of Incorporation, or the Charter, with the Secretary of State of the State of Delaware eliminating from the Charter all matters set forth in the Certificate of Designation with respect to the Series A Senior Preferred Stock.

Prior to the Redemption Date, the Series A Senior Preferred Stock had cumulative dividends that accrued daily at the annual rate which was equal to Term SOFR (selected by the Company for each divided period), plus 10.00%, and dividends were paid, after declaration by the Board, for each dividend period. There were no preferred stock dividends declared or paid during the three months ended September 30, 2025, as the Series A Senior Preferred Stock had been redeemed prior to the period. During the nine months ended September 30, 2025, dividends declared and paid on the Series A Senior Preferred Stock were the $1.4 million declared and paid during three months ended March 31, 2025. The redemption of the Series A Senior Preferred Stock also included payment of $1.4 million in accrued and unpaid preferred stock dividends, which was paid during the three months ended June 30, 2025. During the three and nine months ended September 30, 2024, dividends declared and paid on the Series A Senior Preferred Stock were $1.5 million and $4.6 million, respectively.

The Series A Senior Preferred Stock had no voting rights for directors or otherwise, except as required by law or with respect to certain protective provisions. Without the consent of at least 60% of the then outstanding shares of Series A Senior Preferred Stock, with certain exceptions, the Company could not, among other things, (i) incur any indebtedness if such incurrence would cause the Company’s Total Net Leverage Ratio (as defined in the Purchase Agreement) to exceed 0.75:1, (ii) issue any capital stock senior to or pari passu with the Series A Senior Preferred Stock, (iii) declare or pay any cash dividends on the Company’s common stock, or (iv) repurchase more than an aggregate of $30 million of the Company’s common stock.

Note 13. Subsequent Event

Management Transition

Effective October 20, 2025, the Company appointed Edward H. Codispoti as Chief Financial Officer. The Company’s former Chief Financial Officer, Richard W. Sunderland, Jr., is anticipated to remain a non-executive employee of the Company until his expected departure in the first quarter of 2026. The Company expects to record approximately $0.8 million in termination benefits in the fourth quarter of 2025 in connection with Mr. Sunderland’s departure.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Quarterly Report on Form 10-Q, or this Quarterly Report, “we,” “our,” “us,” “the “Company” and similar terms refer to American Public Education, Inc., or APEI, and its subsidiary institutions collectively unless the context indicates otherwise. All quarterly information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is unaudited. The following discussion of our historical results of operations and our liquidity and capital resources should be read in conjunction with the Consolidated Financial Statements and related notes that appear elsewhere in this Quarterly Report and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2024~~2025, or our Annual Report.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements intended to be covered by the safe harbor provisions for forward-looking statements in Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We may use words such as “project,” “believe,” “anticipate,” “plan,” “expect,” “estimate,” “intend,” “should,” “would,” “could,” “potentially,” “will,” or “may,” or other words or expressions that convey future events, conditions, circumstances, or outcomes to identify these forward-looking statements. Forward-looking statements in this Quarterly Report include, without limitation, statements regarding:

•changes in and our efforts and ability to comply with the extensive regulatory framework applicable to our industry, including the 90/10 Rule and financial responsibility standards, as well as state law and regulations and accrediting agency requirements, and the expected impacts of our efforts to comply and any non-compliance;

•federal appropriations and other budgetary matters, including government shutdowns ~~such as the U.S federal government shutdown that began on October 1~~, ~~2025,~~and the estimated impact of such matters on us and our prospective and current students, and our efforts to mitigate ~~this impact~~impacts;

•actions by the U.S. Department of Education, or ED, institutional and programmatic accreditors, and state authorizing agencies and expectations regarding the effects of those actions;

•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 ~~that will be a system~~ 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. presidential and administration transitions and presidential directives regarding governmental actions;

•our ability to maintain, develop, and grow our technology infrastructure, including with respect to any current or planned use of artificial intelligence or transform our technology infrastructure and realize the benefits of any such transformation;

•our cash needs and expectations regarding cash flow from operations, including the impacts of our debt service;

•our ability to undertake initiatives to improve the learning experience, attract students who are likely to persist, and improve student outcomes;

•changes to and expectations regarding our student enrollment, net course registrations, and the composition of our student body, including the pace of such changes;

•our ability to maintain, develop, and grow our technology infrastructure to support our student body and remain competitive;

•our conversion of prospective students to enrolled students and our retention of active students;

•our ability to update and expand the content of existing programs and develop new programs to meet emerging student needs and marketplace demands, and our ability to do so in a cost-effective manner or on a timely basis;

•the branding and marketing of our institutions;

•our ability to leverage our investments in support of our initiatives, students, and institutions;

•our maintenance and expansion of our relationships and partnerships and the development of new relationships and partnerships;

•actions by the Department of Defense, or DoD, or branches of the U.S. Armed Forces, including actions related to ~~the~~ participating in DoD tuition assistance, or TA, programs, our responses to those actions, and expectations regarding the effects of those actions and responses;

•changes in enrollment in postsecondary degree-granting institutions and workforce needs;

•~~our ability to recognize~~ the ~~intended~~competitive ~~benefits~~environment ofin ~~our~~which ~~cost~~we ~~savings and reduction and revenue-generating efforts~~operate;

•our ability to achieve the intended benefits of our cost savings initiatives and revenue-generating efforts;

•the expected benefits of insourcing and outsourcing information technology services to our operations and third-party vendors, respectively;

•the expected impact on our students and our business from campus closures and consolidations;

•our financial performance generally; and

•our expectations and estimates regarding tax and accounting matters.

23Forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance, taking into account information currently available to us, and are not guarantees of future results. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. Risks and uncertainties involved in the forward-looking statements include, among others:

Forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance, taking into account information currently available to us, and are not guarantees of future results. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. Risks and uncertainties involved in forward-looking statements include, among others:

•potential changes to the ED’s and other federal government agencies’ structure, policies, priorities, and oversight, including as a result of federal elections and the Trump administration’s stated intention and actions to dismantle ED;

•any adverse impacts of ~~the U.S. federal~~ government ~~shutdown~~shutdowns ~~that began~~ on ~~October 1, 2025 on~~ APUS’s net course registrations and our results of operations, and our inability to realize the intended benefits of ~~our~~any efforts to mitigate ~~those~~any such impacts;

•our dependence on the effectiveness of our ability to attract students who persist in our institutions’ programs;

•our inability to effectively market our programs or expand into new markets;

•the loss of our and our students’ ability to receive funds under TA programs, the reduction, elimination, or suspension of TA, or disruptions due to systems used to request TA~~, including as a result of the U.S. federal government shutdown that began on October 1, 2025~~;

•our inability to maintain enrollments from military students, including due to changes in military activity and deployments, budgets, and government shutdowns;

•our inability to predict whether ED will grant borrower defense to repayment, or BDTR, claims;

•adverse effects of changes our institutions make to improve the student experience and enhance each institution’s ability to identify and enroll students who are likely to succeed;

•our failure to successfully adjust to future market demands;

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

•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;

•our failure to meet applicable National Council Licensure Examination, or NCLEX, pass rates and other NCLEX standards, and the consequences thereof;

•our failure to comply with the 90/10 Rule;

•our loss of eligibility to participate in student financial aid programs authorized under Title IV of the Higher Education Act of 1965, as amended, or Title IV programs, or ability to process Title IV financial aid;

•our inability to recognize the intended benefits of our cost savings and reduction and revenue-generating efforts;

•economic and market conditions in the United States and abroad and changes in interest rates;

•risks related to business combinations, acquisitions, divestitures, and other strategic transactions, including, as applicable, integration challenges, business disruption, dilution of stockholder value, financial charges, and diversion of management attention;

•risks related to our ~~substantial~~ indebtedness; and

•our dependence on and need to continue to invest in our technology infrastructure.

Forward-looking statements should be considered in light of these factors and the factors described elsewhere in this Quarterly Report, in the “Risk Factors” section of this Quarterly Report and our Annual Report, and elsewhere in our various filings with the Securities and Exchange Commission, or the SEC. It is important that you read these factors and the other cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report. If ~~any~~one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance, or achievements may ~~differ~~vary materially from any future results, performance, or achievements expressed or implied by these forward-looking statements. You should also read the more detailed description of our business in our Annual Report when considering forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements ~~herein~~made by us, which speak only as of the date of this Quarterly Report. 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.

Overview

Background

We are a provider of online and campus-based postsecondary education to approximately ~~107~~108,~~600~~900 students through ~~three~~our subsidiary ~~institutions~~, American Public University System, orInc. ~~APUS,~~which ~~Rasmussen~~currently ~~University,~~operates orthree ~~RU,~~separately ~~and~~accredited ~~Hondros~~institutions, ~~College~~APUS, ~~of Nursing~~RU, orand HCN. Our ~~subsidiary~~ institutions offer purpose-built education programs designed to prepare individuals for productive contributions to their professions and society, and ~~to offer~~ opportunities designed to advance students in their current professions or to help them prepare for their next career. Our ~~subsidiary~~ institutions are accredited and licensed or otherwise authorized by state authorities to offer postsecondary education programs to the extent the ~~institutions~~institution believe such licenses or authorizations are required and ~~are certified by ED to participate in Title IV programs.~~

2420

~~Our~~are ~~Institutions~~certified by ED to participate in Title IV programs.

~~Our~~In ~~wholly~~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 ~~operating~~and ~~subsidiary~~operated our three institutions, ~~include~~with American Public University System, Inc. surviving the ~~following:~~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.

~~•American~~We ~~Public~~previously ~~University~~provided ~~System,~~our ~~Inc.,~~educational ~~referred~~services tothrough ~~herein~~three asreportable ~~APUS,~~segments: ~~provides~~the ~~online~~APUS ~~postsecondary education to approximately 89~~Segment,~~000~~ ~~adult learners, directed primarily at~~ the ~~needs~~RU ~~of the military~~Segment, ~~veterans, extended military families,~~ and ~~other~~the ~~public~~HCN ~~service~~Segment. ~~and~~Beginning ~~service-minded~~in ~~communities~~fiscal ~~through two brands: American Military University~~2026, orin ~~AMU,~~connection ~~and~~with ~~American~~the ~~Public University~~Combination, orwe ~~APU.~~now Asprovide ofour ~~September 30,~~educational ~~2025,~~services ~~approximately~~through ~~63% of APUS students self-reported that they served in~~ the ~~military~~following ontwo ~~active~~reportable ~~duty at the time of initial enrollment.~~segments:

•~~Rasmussen College~~Military+, ~~LLC,~~which ~~referred~~was toformerly ~~herein~~the asAPUS ~~Rasmussen University~~Segment, ~~or RU,~~ provides ~~nursing-~~online ~~and health sciences-focused~~ postsecondary education to approximately 1489,~~900~~500 ~~students~~adult learners, directed primarily at 20the ~~campuses~~needs inof ~~six~~the ~~states~~military, ~~and~~veterans, ~~online.~~extended Asmilitary ofand ~~September 30,~~veteran ~~2025~~families, onand other public service and service-~~ground~~minded ~~enrollment~~communities ~~was~~through 6APUS,~~700,~~ of which ~~approximately~~operates 5through two brands: American Military University,~~900~~ ~~students~~and ~~were~~American ~~pursuing~~Public ~~nursing~~University. ~~degrees~~As atof RUMarch 31, 2026, approximately 9062% of ~~whom~~Military+ ~~were~~students ~~enrolled~~self-reported inthat ~~RU’s~~they ~~pre-licensure~~served ~~nursing~~in ~~degree~~the ~~programs.~~military Aton ~~September 30,~~active ~~2025,~~duty ~~online~~at ~~enrollment~~the ~~was~~time ~~approximately~~of ~~8,200~~initial ~~students~~enrollment.

•~~National~~Health+, ~~Education~~consisting ~~Seminars,~~of ~~Inc.,~~the ~~referred~~businesses tothat ~~herein~~formerly ascomprised ~~Hondros~~the ~~College~~RU ofSegment ~~Nursing,~~and orthe HCN Segment, provides nursing- and health sciences-focused and other postsecondary education, including business, technology, and education. Health+ provides these education services to approximately 319,~~700~~400 students at ~~eight~~27 campuses in ~~three~~eight states. ~~HCN’s~~and ~~students~~online ~~are~~(excluding ~~enrolled~~one incampus ~~its~~planned ~~pre~~to close during 2026) through RU and HCN. As of March 31, 2026, on-~~licensure~~ground ~~nursing~~enrollment ~~degree~~was ~~programs~~approximately 11,000, and online enrollment was approximately 8,400 students.

~~•American~~Adjustments ~~Public~~to ~~Training~~reconcile ~~LLC,~~segment ~~referred~~results to ~~herein~~the asConsolidated ~~Graduate~~Financial ~~School~~Statements ~~USA,~~are orincluded ~~GSUSA,~~in ~~provides~~Corporate ~~career learning~~ and ~~leadership training in-person and online to the federal workforce~~Other. ~~GSUSA~~These ~~operational~~adjustments ~~activities~~include ~~are~~unallocated ~~presented~~corporate ~~within~~activity ~~Corporate~~and eliminations, and, ~~Other.~~prior Onto July 25, 2025, or the GSUSA Sale Date, ~~APEI completed~~ the ~~sale~~operational ofactivities ~~its membership interest in GSUSA; therefore, the Consolidated Balance Sheet as~~ of ~~September~~Graduate ~~30,~~School ~~2025~~USA, noor ~~longer includes the accounts of~~ GSUSA. ~~The~~Prior ~~accompanying~~period ~~Consolidated~~segment ~~Financial~~disclosures ~~Statements~~have ~~include~~been ~~the~~recast ~~operations~~to ofconform ~~GSUSA~~to ~~through~~ the ~~GSUSA~~current ~~Sale~~period ~~Date in Corporate and Other~~presentation. ~~Please refer to “Note 2. Summary of Significant Accounting Policies” for more information on APEI’s sale of its membership interest in GSUSA.~~

The Planned Combination of APUS, RU, and HCN

On January 28, 2025, we announced the planned combination of APUS, RU, and HCN, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions tentatively named (i) APUS Global, comprised of AMU and APU, and (ii) Rasmussen, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs, with final division names to be determined closer to closing of the Combination. The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we are required to obtain HLC approval prior to effectuating the Combination. In December 2024, APUS and RU jointly submitted an application for Change of Control, Structure or Organization to HLC. For HLC purposes, APUS will be the surviving institution, and the application sought approval for the Combination and the expansion of APUS’s HLC accreditation to include the RU and HCN programs and locations. HLC conducted a site visit in March 2025 related to the joint application. At its June 2025 meeting, HLC approved the Combination and continuation of accreditation upon implementation of the related transactions. Subsequently, ED informed us that we would need to follow a different process to implement the Combination that entails two steps instead of one: (i) merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving following the merger, and (ii) combination of the institutions into one HLC-accredited institution. As previously disclosed, ED does not treat the combination of institutions with the same parent as a change in ownership and control for Title IV purposes. Therefore, the first step requires only that notice of the merger be provided to ED, and the second step requires APUS, as the surviving institution, to seek and obtain approval from ED to expand its Title IV certification to cover RU and HCN programs and locations. As a result of this process change, APUS and RU submitted, as required by HLC, a new joint application for Change of Control, Structure or Organization to HLC in September 2025 containing substantially the same information that had been submitted previously and reflecting the two-step process. HLC is expected to review this submission at its February 2026 board meeting. We currently expect implementation of the Combination to be complete by the beginning of the third quarter of 2026.

Legislative and Regulatory Activity

~~U.S.~~The ~~Federal~~Planned ~~Government~~Combination ~~Shutdown~~of APUS, RU, and HCN

OnWe ~~October~~were 1required to obtain HLC approval prior to effectuating the Combination, ~~2025~~and pursuant to ED’s requirements, are pursuing the UCombination in two steps: (i) the Legal Merger and (ii) combination of APUS, RU, and HCN into one HLC-accredited institution, or the Institutional Combination.S. ~~federal~~In ~~government~~February ~~shut~~2026, ~~down~~HLC ~~due~~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. HLC has scheduled a ~~failure~~site byvisit ~~Congress~~in August 2026 in connection with the Legal Merger. We currently expect to ~~pass~~complete ~~appropriations~~implementation ~~legislation,~~of ~~resulting~~the Institutional Combination in, ~~among~~the ~~other~~third ~~things~~quarter of 2026, ~~suspension~~subject to obtaining required approvals from ED and state agencies. For additional details regarding regulatory treatment of the ~~DoD~~Combination, TAsee ~~programs~~the Regulatory Environment in our Annual Report captioned “Regulatory Environment – Accreditation – Institutional Accreditation” and ~~ultimately~~“Regulatory anEnvironment ~~inability~~– Accreditation – The Planned Combination of APUS, ~~students~~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...”

25Borrower Defense to Repayment Claims

~~seeking~~Between toJanuary ~~use TA as a payment source to register or in some cases stay registered for courses. APUS estimates that~~1, as2026 aand ~~result~~April ~~of the shutdown~~30, ~~approximately 12~~2026,~~700~~ ~~APUS~~our ~~course~~institutions ~~registrations~~received ~~were~~646 ~~dropped~~BDTR onclaims ~~October~~from 11ED, ~~2025,~~seeking ~~for~~in ~~students who intended to use TA funds. This is~~ the ~~first~~aggregate ~~time since 2013 that APUS has dropped course registrations as~~ a ~~result~~discharge of aapproximately ~~government shutdown because the Defense Appropriations Bill, which annually funds TA, was not passed before the shutdown~~$11.0 ~~Approximately~~million ~~1,700 course registrations were not dropped for students using TA funds that had been authorized~~ in ~~the prior government fiscal year~~loans. ~~Accordingly, APUS estimates that, as a result of the government shutdown, October 2025 net course registrations declined by approximately 35%, as compared to October 2024.~~

OnEach ~~October~~of ~~24,~~our ~~2025,~~institutions disputes the ~~Navy~~validity ~~announced that TA funding was restored for classes starting on or before December 31, 2025, using TA funds appropriated as part~~ of ~~the~~these ~~One~~claims ~~Big~~and ~~Beautiful~~has ~~Bill~~filed ~~Act,~~responses orto ~~OBBBA~~them TAwith ~~Funds~~ED. ~~Additionally,~~We weare ~~learned~~unable ~~that~~to ~~certain~~predict ~~individuals~~whether ~~responsible~~ED ~~for~~will ~~oversight~~grant ofBDTR ~~the~~relief ~~voluntary~~for ~~education programs at~~ the ~~Army~~claims, ~~Air~~or ~~Force,~~if ~~Navy~~so, ~~and~~whether ~~Marines~~it ~~returned~~will toseek ~~their~~recoupment ~~roles~~from ~~and,~~our ~~in the cases of the Army, Air Force, and Navy, have begun approving TA requests using OBBBA TA Funds~~institutions. AsFor ofadditional ~~November~~information ~~10,~~regarding ~~2025,~~risks ~~APUS~~related ~~estimates that it was able~~ to ~~recover~~BDTR ~~approximately 5~~claims,~~000~~ ~~course~~see ~~registrations for November 2025 course starts by students using TA funds. While~~ the ~~impact~~Risk ofFactor ~~October~~in ~~2025~~our ~~and~~Annual ~~November~~Report ~~2025~~captioned ~~course~~“ED ~~registrations~~rules ~~from~~related ~~students~~to ~~using~~BDTR TAclaims ~~funds~~may ~~are~~create ~~known~~significant ~~generally,~~liability ~~December~~that ~~2025~~could ~~registrations~~have ~~are~~an ~~uncertain.~~adverse ~~Accordingly,~~effect aton ~~this~~our ~~time,~~business ~~the full impact of the shutdown~~ and ~~any mitigating actions on APUS’s operating~~ results ~~for the fourth quarter~~ of ~~2025 is uncertain~~operations”. The first quarter of 2026 revenue will be impacted by the amount of registrations in December 2025 because we recognize revenue at APUS over the length of a course, which is eight weeks for most APUS courses.

We have implemented various cost savings measures, including a reduction in force, hiring freeze, and reduction in travel and discretionary costs, and we are continuing to evaluate additional opportunities to mitigate the adverse impacts of the ongoing government shutdown. However, as the shutdown’s duration, the scope and effectiveness of mitigation measures we have implemented or may still implement, and the aggregate amount and timing of disbursement of OBBBA TA Funds (and other TA funds, if any) are uncertain, we are unable to fully predict the impact the shutdown may have on our operating results. 21

The One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was signed into law. Among other things, the OBBBA amends portions of the Higher Education Act of 1965, as amended, makes changes to the Title IV programs, and restores certain ED regulations related to borrower defense to repayment and closed school discharge.

The OBBBA will overhaul the structure of certain student loan programs. Effective July 1, 2026, it will eliminate Federal Direct PLUS loans for graduate and professional students, with limited grandfathering. The law also: fixes annual and aggregate loan limits for graduate students, with different caps depending on whether they are or have been professional students; creates a lifetime maximum aggregate amount for Title IV loans (other than a loan made to the student as a parent on behalf of a dependent); authorizes institutions to limit the amount of loans a student may borrow in an academic year provided such limit is applied consistently to all students enrolled in a program; and requires the amount of loan funds available under a student’s annual loan eligibility to be reduced proportionately to the degree to which that student is not enrolled on a full-time basis.

The OBBBA also establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Federal Direct Loans, requiring that an undergraduate or graduate or professional program be ineligible for Federal Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults aged 25-34 with only a high school diploma for undergraduate program completers, or a bachelor’s degree for graduate or professional program completers, respectively, either in the state where the institution is located or, if fewer than 50% of students at the institution reside in the institution’s state, the national average. If a program fails the earnings test for one year, institutions must notify students that the program is at risk of losing Federal Direct Loan eligibility.

The OBBBA creates Workforce Pell Grants, effective July 1, 2026, for students enrolled in eligible workforce programs that satisfy certain requirements and limits eligibility for Pell Grants in certain ways.

The OBBBA also changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. We currently do not expect the OBBBA to have a material impact on our annual effective tax rate in 2025.

The OBBBA also appropriated the OBBBA TA Funds, consisting of $100 million in funding for TA that is separate and apart from ordinary course appropriations and are available for use through September 30, 2029.

Finally, the OBBBA delays implementation of the Biden Administration’s borrower defense to repayment, or BDTR, regulations and closed school loan discharge regulations until July 1, 2035. Accordingly, BDTR regulations and closed school loan discharge regulations that were in effect on July 1, 2020, have been reinstated. The 2020 BDTR regulations modify the burden of proof in BDTR claims, include a three-year statute of limitations on claims, end group borrower defense claims, and allow the use of arbitration clauses in student agreements. The 2020 closed school loan discharge regulations modify ED’s requirements with respect to the circumstances under which a borrower is eligible for a loan discharge if an institution or location closes and end automatic loan discharges.

American Public University System

APUS participates in the Department of Defense, or DoD, tuition assistance, or TA, programs, and is required to sign a Memorandum of Understanding, or MOU, outlining certain commitments and agreements between the institution and DoD as a condition to participate in TA. In February 2025, ICP notified APUS that it will conduct a review of APUS compliance with the DoD MOU. On May 14, 2025, DoD issued a report that informed APUS that the review had been completed with no findings.

Rasmussen University

The Florida legislature passed legislation in May 2025 that would have subjected RU nursing programs to additional regulatory scrutiny by the Florida Board of Nursing and the Florida Department of Health. The legislation was vetoed by the governor on July 2, 2025.

In May 2025, ED released RU from temporary growth restrictions, imposed in connection with RU’s 2019 change in ownership, which preceded our acquisition of RU, that had restricted RU from adding new programs and locations. The timing of the Combination could, however, delay our ability to seek approval from the HLC of new locations or programs.

RU’s Moorhead, Minnesota Associate of Science Professional Nursing, or ADN program, and Practical Nursing Diploma, or PN program, which together contributed approximately 1% of RU’s quarterly revenue, are currently approved by Minnesota Board of Nursing, or MBN, but first-time NCLEX pass rates for each of these programs have been below the required standard for three consecutive years. In August 2024, MBN placed RU’s Moorhead, Minnesota PN program on conditional approval status and issued a corrective action order. The PN program’s NCLEX pass rate was required to meet the state standard by the end of June 2025, measured using cumulative pass rates from the preceding four quarters (i.e., July 2024 to June 2025). The program met the standard, and the Board reinstated full approval at its August 2025 meeting. In June 2025, the MBN issued a stipulation and consent order with RU’s Moorhead, Minnesota ADN program to, among other things, meet applicable NCLEX pass rate standards by the end of 2025 for new candidates taking the licensing exam for the first time. If compliance is not achieved by December 31, 2025, the program will be given until June 30, 2026, to meet the required NCLEX pass rates based on the cumulative results from the first and second calendar quarters of 2026 for candidates, and, if not achieved, MBN may withdrawal program approval.

In January 2025, RU’s ADN programs at its Fort Myers, Tampa, and Ocala, Florida campuses received notification from FBN that the programs met NCLEX pass rate requirements, and they were removed from probationary status at FBN’s February 2025 Board meeting. In May 2025, in light of the ADN programs’ removal from probation and RU’s positive working capital, the Florida Commission for Independent Education, or FCIE, moved RU from a provisional license back to a full License by Means of Accreditation. In July 2025, FCIE placed RU on a provisional license due to RU’s application for Substantive Change, Change in Ownership or Control required for the Combination.

Hondros College of Nursing

As a requirement for accreditation, ABHES requires institutions to demonstrate at least a 70% retention rate for each program. For institutions not meeting the retention standard, ABHES may provide an opportunity for a program to come into compliance within a specified time period and may extend such period if a program demonstrates improvement or for other good cause. For the reporting year ended June 30, 2024, HCN’s Cleveland and Dayton, Ohio PN programs, and the Akron, Ohio ADN program were below the 70% benchmark for retention. As a result, ABHES placed the Cleveland and Dayton, Ohio PN programs and Akron, Ohio ADN program on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate met the standard through the first three quarters of the 2024-2025 reporting year by May 2025. These three programs met the 70% benchmark for the reporting period, and, as a result, at its July 2025 meeting, the ABHES Commission voted to remove retention reporting requirements. HCN will report its final retention rates for the 2024-2025 reporting year in November 2025. The Akron and Toledo, Ohio ADN programs are expected to be below the 70% benchmark for retention. HCN expects that, as a result, ABHES will require additional mid-year reporting for those programs in May 2026.

Department of Education

On July 7, 2025, ED issued an interpretative rule that revised a prior interpretation and clarified ED’s classification of revenue received by for-profit schools under the 90/10 Rule under which a for-profit institution is prohibited from deriving more than 90% of its revenue (as computed by ED) on a cash accounting basis from federal funds for any fiscal year. The interpretive rule specifies that for-profit schools will be allowed to count non-federal funds generated from programs offered entirely through distance education, if such programs satisfy certain criteria, as non-federal revenue in their 90/10 calculations, and may revise 90/10 Rule calculations for prior fiscal years to include revenue from distance education programs in the “10%” side of the ratio.

Cohort Default Rate

To remain eligible to participate in Title IV programs, an educational institution’s student loan cohort default rates must remain below certain levels. Pursuant to HEA requirements, if the cohort default rate for any year exceeds 40% in any single year, or exceeds 30% for three consecutive years, an institution loses eligibility to participate in Title IV programs. If an institution’s cohort default rate is equal to or greater than 30% in any year, it must establish a default prevention task force.

In September 2025, ED released final official cohort default rates for institutions for federal fiscal year 2022, with ED reporting a zero percent cohort default rate for each of APUS, RU and HCN. These rates were favorably impacted by regulatory relief provided in connection with the COVID-19 pandemic pursuant to which borrowers with Title IV program student loans were not required to make payments. Interest accrual on forborne federal student loans resumed on September 1, 2023, and payments became due beginning October 1, 2023. In connection with these developments, ED implemented a 12-month “on-ramp” to repayment, running from October 1, 2023, to September 30, 2024, during which borrowers were not placed into default for missed payments. The end of COVID-19 pandemic-related student loan forbearance and the 12-month “on-ramp” period may lead to higher default rates in the future. Additional information regarding student loan default rates, prior year default rates, and potential risks associated with them is available in our Annual Report.

Tuition Increases

Providing affordable degree and certificate programs is an important element of our competitive strategy. In April 2024, APUS implemented a tuition increase to master’s level students across all categories, including military, non-military and veteran students, and in September 2024, APUS returned the military rate for master’s level students to the $250 per credit hour rate in effect prior to the April 2024 tuition increase. We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities. RU implemented modest tuition increases for all students in select programs in the first quarter of 2024, for new students in select programs in August 2024, and for returning students in select programs in October 2024. RU implemented modest tuition increases for new and reentering students in August 2025. RU implemented modest increases for current students in non-prelicensure nursing programs in October 2025 and will implement a modest tuition increase for prelicensure nursing program students in January 2026. HCN implemented a 5% increase in tuition and fees effective in October 2025 for its ADN and PN programs. The tuition and fee increases at RU and HCN are intended to reflect adjustments to be consistent with the local campus markets. Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

Management Transition

Effective October 20, 2025, we appointed Edward H. Codispoti as Chief Financial Officer. Our former Chief Financial Officer, Richard W. Sunderland, Jr., will continue to serve the Company until his expected departure in the first quarter of 2026. We expect to record approximately $0.8 million in the fourth quarter of 2025 in employee compensation costs for post-employment benefits in connection with Mr. Sunderland’s departure.

Reduction in Force

On November 3, 2025, we completed a reduction in force that resulted in the termination of 40 non-faculty employees at APUS, representing approximately 6.5% of the APUS non-faculty workforce. We incurred an aggregate of approximately $0.8 million of pre-tax cash expenses associated with employee severance costs as a result of this reduction in force. The reduction in force is expected to result in pre-tax labor and benefit savings in 2025 of approximately $0.5 million, excluding severance costs, and approximately $2.9 million in savings on an annualized basis.

Campus Closures

During the nine months ended September 30, 2024, our RU Segment consolidated two Minnesota campuses, and in May 2024, RU notified the Wisconsin Educational Approval Program, that it intends to voluntarily close its two Wisconsin campuses, effective December 31, 2025, and 2026, respectively. All students enrolled at the two Wisconsin campuses have expected graduation dates on or before the applicable campus closing date. These actions are expected to directly impact approximately 20 students, or less than 1% of RU’s current total enrollment. As a result, we recorded a lease impairment of $0.4 million during the three months ended June 30, 2024, and an additional lease impairment of $0.1 million during the three months ended September 30, 2025.

Sale of Graduate School USA

On the GSUSA Sale Date, APEI completed the sale of its membership interest in GSUSA for $0.5 million, subject to customary adjustments, including for net working capital and cash, and recorded a $3.9 million loss within loss on sale of subsidiary in our Consolidated Statements of Income.

Reportable Segments

Our operations are organized into three reportable segments:

•American Public University System Segment, or APUS Segment. This segment reflects the operational activities of APUS.

•Rasmussen University Segment, or RU Segment. This segment reflects the operational activities of RU.

•Hondros College of Nursing Segment, or HCN Segment. This segment reflects the operational activities of HCN.

Summary of Results

Consolidated revenue for the three months ended ~~September~~March 3031, ~~2025~~2026, increased to $~~163~~174.27 million from $~~153~~164.16 million, or by 6.62%, as compared to the prior year period. ~~Our~~The ~~net~~growth ~~income for the three months ended September 30, 2025,~~ was ~~$5.6~~primarily ~~million,~~driven ~~compared~~by tohigher ~~$2.3~~net ~~million~~course inregistrations ~~the prior year period, an increase of $3.3 million. The results for the three months ended September 30, 2025, include a $3.9 million loss on sale of a subsidiary~~ in ~~Corporate and Other relating to the sale of GSUSA, $0.8 million in professional fees in Corporate and Other relating to the Combination and the sale of GSUSA, $0.6 million in severance costs in~~ our ~~HCN~~Military+ ~~Segment~~segment and ~~Corporate~~increased ~~and~~enrollment ~~Other, and $0.1 million loss on leases~~ in our RUHealth+ ~~Segment~~segment, ~~all~~partially onoffset aby ~~pre-tax basis. The results in~~ the ~~prior~~absence ~~year period include $1.1 million~~ of ~~information~~revenue ~~technology~~from ~~transition~~GSUSA ~~services~~following ~~costs~~its insale ~~all segments as well as Corporate and Other, $0.8 million~~ in ~~professional~~July ~~fees in Corporate and Other relating to the Combination, both on a pre-tax basis. Our operating margin improved to 5.9% for the three months ended September 30,~~ 2025~~, as compared to 2~~.7% ~~in the prior year period. Excluding the items noted above, our operating margin was 9.2% and 4.0% for the three months ended September 30, 2025, and 2024, respectively.~~

~~Consolidated revenue for the nine months ended September 30, 2025, increased to $490.5 million from $460.4 million, or by 6.5%, as compared to the prior year period.~~ Our net income for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, was $1817.97 million, compared to $38.19 million in the prior year period, an increase of $158.8 million. The ~~results~~increase in net income for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, ~~include~~was aprimarily ~~$3.9~~related ~~million~~to ~~loss~~the onincrease ~~sale~~in revenue of a$10.2 ~~subsidiary~~million, inas ~~Corporate~~compared ~~and Other relating~~ to the ~~sale~~prior ofyear ~~GSUSA~~period, ~~$3.5~~partially ~~million~~offset inby ~~professional~~the ~~fees~~extinguishment inof ~~Corporate~~debt ~~and~~recognized ~~Other~~in ~~relating to~~ the ~~Combination~~three ~~and~~months ~~the~~ended ~~sale~~March ~~of GSUSA~~31, a2026 ~~non-cash~~of $1.57 million. ~~loss~~Our onoperating ~~assets~~margin ~~held~~improved to 12.4% for ~~sale~~the inthree ~~our~~months ~~APUS~~ended ~~Segment~~March 31, ~~and~~2026, ~~$0.6~~as ~~million~~compared into ~~severance~~7.4% ~~costs~~ in ~~our~~the ~~HCN~~prior ~~Segment~~year ~~and~~ period.

29Military+ 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.

~~Corporate~~Health+ ~~and~~segment ~~Other,~~total ~~all~~enrollment ~~on a pre-tax basis. The results~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2026, ~~include~~increased ~~non-cash~~to ~~losses~~approximately on19,400 ~~investments~~from ofapproximately ~~$4.4~~18,000, ~~million~~an inincrease ~~Corporate~~of ~~and Other~~1,400, aor ~~$3.~~7.8%, ~~million~~as ~~pre-tax~~compared ~~loss~~to onthe ~~leases~~prior inyear ~~our RU Segment, $3~~period.1 ~~million~~Health+ insegment ~~pre-tax~~revenue ~~information~~for ~~technology~~the ~~transition~~three ~~service~~months ~~costs~~ended inMarch 31, ~~our~~2026, ~~APUS~~increased ~~and~~to ~~HCN Segments as well as Corporate and Other,~~ $085.84 million infrom ~~pre-tax professional fees in Corporate and Other relating to the Combination, and~~ $076.59 million, inor ~~pre-tax~~by ~~severance~~11.0%, ~~costs~~as incompared ~~Corporate~~to ~~and Other and~~ the ~~planned~~prior ~~closure~~year ~~of the Wisconsin campuses in our RU Segment~~period. ~~Our~~Health+ segment operating margin improved to 50.86% for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, ~~compared~~from tonegative 21.51%, in the prior year period. ~~Excluding the items noted above, our operating margin was 7.8% and 4.3% for the nine months ended September 30, 2025, and 2024, respectively.~~

~~APUS~~Our ~~net~~financial ~~course~~results ~~registrations~~ for the three months ended ~~September 30,~~March ~~2025~~31, ~~increased to approximately 100,000 from approximately 92,500, an increase of 7,500, or 8.1%, as compared to the prior year period. APUS Segment revenue for the three months ended September 30,~~ 2025, ~~increased~~reflect ~~to $83.1 million from $77.0 million, or by 8.0%, as compared to~~ the ~~prior~~financial ~~year~~results ~~period. APUS net course registrations for the nine months ended September 30, 2025, increased to approximately 298,800 from approximately 281,300, an increase~~ of ~~17,500,~~GSUSA or 6.2%, as compared to the prior year period. APUS Segment revenue for the nine months ended September 30, 2025, increased to $248.8 million from $234.7 million, or by 6.0%, as compared to the prior year period. APUS Segment operating margin increased to 30.4% for the three months ended September 30, 2025, from 27.0% in ~~the~~Corporate ~~prior year period,~~ and ~~increased to 28~~Other.~~5% for the nine months ended September 30, 2025, from 26.5% in the prior year period.~~

RU total enrollment for the three months ended September 30, 2025, increased to approximately 14,900 from approximately 13,500, an increase of 1,400, or 10.4%, as compared to the prior year period. RU Segment revenue for the three months ended September 30, 2025, increased to $60.8 million from $52.6 million, or by 15.6%, as compared to the prior year period. RU total enrollment for the nine months ended September 30, 2025, increased approximately 8.4%, as compared to the prior year period. RU Segment revenue for the nine months ended September 30, 2025, increased to $179.6 million from $158.8 million, or by 13.1%, as compared to the prior year period. The revenue increases for the three and nine month periods were greater than the enrollment increases for the comparable prior year periods due to tuition increases in the second half of 2024. RU Segment operating margin improved to negative 2.0% for the three months ended September 30, 2025, from negative 14.5% in the prior year period, and improved to negative 1.8% for the nine months ended September 30, 2025, from negative 16.0% in the prior year period.

HCN total enrollment for the three months ended September 30, 2025, increased to approximately 3,700 from approximately 3,100, an increase of 600, or 17.6%, as compared to the prior year period. HCN Segment revenue for the three months ended September 30, 2025, increased to $18.4 million from $15.5 million, or by 19.0%, as compared to the prior year period. HCN total enrollment for the nine months ended September 30, 2025, increased approximately 13.5%, as compared to the prior year period. HCN Segment revenue for the nine months ended September 30, 2025, increased to $54.3 million from $48.3 million, or by 12.2%, as compared to the prior year period. The revenue increase for the three month periods was more than the enrollment increase due to fewer students taking a repeat course in the current year as compared to the prior year period. Revenue per student is lower for students taking a repeat course. The revenue increase for the nine month period was less than the enrollment increase due to more students taking a repeat course in the current year as compared to the prior year period. HCN Segment operating margin improved to negative 4.7% for the three months ended September 30, 2025, from negative 5.0% in the prior year period, and improved to negative 3.7% for the nine month periods ended September 30, 2025, from negative 3.8% in the prior year period.

Our financial results for the three and nine months ended September 30, 2025, include the financial results of GSUSA through the GSUSA Sale Date, in Corporate and Other.

Critical Accounting Estimates

Goodwill and indefinite-lived intangible assets. Goodwill is the excess of the purchase price of an acquired business over the fair value of the assets acquired and liabilities assumed, ~~and~~including ~~the fair value assigned to~~ identifiable intangible assets ~~on the acquisition date~~. Goodwill is not amortized. Goodwill is reported at the reporting unit level that we have defined as our ~~reporting~~reportable segments. InBefore the Merger Date, in connection with our acquisitions of RU and HCN, we recorded $217.4 million and $38.6 million of goodwill, respectively, in our RUHealth+ ~~and HCN Segments~~segment. We later recorded non-cash impairment charges reducing the carrying value of RUHealth+ ~~and~~segment ~~HCN Segment~~ goodwill to $33.0 million and $26.6 million, ~~respectively.~~for ~~There~~RU ~~was~~and noHCN, ~~goodwill recorded in connection with the acquisition of GSUSA~~respectively. No goodwill iswas recorded in our ~~APUS~~Military+ ~~Segment~~segment.

In addition to goodwill, before the Merger Date, in connection with the acquisitions of RU and HCN, we recorded identified intangible assets with an indefinite useful life in the aggregate amount of $51.0 million and $3.7 million, respectively, in our RUHealth+ segment, which included intangible assets related to trade name, accreditation, licensing, and ~~HCN~~Title IV, and affiliate agreements. We later recorded non-cash impairment charges reducing the carrying value of RU indefinite-lived identified intangible assets to $24.5 million. There were no indefinite-lived intangible assets in our Military+ segment.

30We recorded $35.5 million and $4.4 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU and HCN, respectively. There were no definite-lived intangible assets in our Military+ segment.

~~Segments,~~We ~~which~~test ~~included~~goodwill and indefinite-lived intangible assets ~~related~~for toimpairment ~~trade~~at ~~name,~~least ~~accreditation~~annually, ~~licensing,~~ and ~~Title~~more ~~IV,~~frequently if events and ~~affiliate~~circumstances ~~agreements.~~exist Wethat ~~later~~would ~~recorded~~more ~~non-cash~~likely ~~impairment~~than ~~charges~~not ~~reducing~~reduce the ~~carrying~~fair value of RUthe ~~indefinite-lived~~reporting ~~identified~~unit ~~intangible~~below ~~assets~~its tocarrying ~~$24~~amount.~~5 million.~~ ~~There~~The ~~are~~process noof evaluating goodwill and indefinite-lived intangible assets for impairment is subjective and requires significant judgment and estimates. When performing an optional qualitative analysis, we consider many factors, including general economic conditions, industry and market conditions, certain cost factors, financial performance and key business drivers (for example, student enrollment), long-term operating plans, and potential changes to significant assumptions and estimates used in the most recent fair value analysis. 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 ~~APUS~~results ~~Segment~~of operations and financial position, and subsequent events are not necessarily indicative of the reasonableness of the original assumptions or estimates.

We recorded $35.5 million and $4.4 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU and HCN, respectively. There are no definite-lived intangible assets in our APUS Segment.22

~~Goodwill~~We ~~and~~estimate ~~indefinite-lived~~fair ~~intangible~~value ~~assets~~in ~~are~~our ~~tested~~quantitative ~~for~~analysis ~~impairment~~by atweighting ~~least~~the ~~annually,~~results ~~and~~from ~~more~~two ~~frequently~~different ifvaluation ~~events~~approaches. orThey ~~changes~~are: in(i) ~~circumstances~~discounted ~~exist~~cash ~~that~~flow ~~would~~and ~~more~~(ii) ~~likely~~guideline ~~than~~public ~~not~~company. ~~reduce~~Under the ~~fair~~discounted ~~value~~cash offlow ~~the~~method, ~~reporting~~we ~~unit~~determined ~~below~~fair ~~its~~value ~~carrying~~by ~~amount.~~discounting ~~The~~the ~~process~~estimated offuture ~~evaluating~~cash ~~goodwill~~flows of RU and ~~indefinite-lived~~HCN ~~intangible~~at ~~assets~~their ~~for~~estimated ~~impairment~~weighted-average iscost ~~subjective~~of ~~and~~capital. ~~requires~~We ~~significant~~incorporate ~~judgment~~the ~~and~~use ~~estimates.~~of ~~Impairment~~projected ~~testing~~financial ~~consists~~information ofand ana ~~optional~~discount ~~qualitative~~rate ~~assessment~~that asare ~~well~~developed asusing amarket ~~quantitative~~participant-based ~~test~~assumptions. ~~When~~The ~~performing~~cash-flow aprojections ~~qualitative~~are ~~assessment,~~based weon ~~consider~~three-year ~~many~~financial ~~factors,~~forecasts ~~including~~developed ~~general~~by ~~economic~~management ~~conditions,~~that ~~industry~~include ~~and~~revenue ~~market conditions~~projections, ~~certain~~capital ~~cost~~spending ~~factors~~trends, ~~financial~~and ~~performance~~investment ~~and~~in ~~key~~working ~~business~~capital ~~drivers~~to ~~(for~~support ~~example,~~anticipated ~~student~~revenue ~~enrollment)~~growth, ~~long-term~~which ~~operating~~are ~~plans,~~updated at least annually and ~~potential~~approved ~~changes~~by tomanagement. ~~significant~~Under ~~assumptions~~the ~~and~~guideline ~~estimates~~public company method, we used pricing multiples from other public companies in the ~~most~~public ~~recent~~higher education market to determine the fair value ~~analysis~~of RU and HCN. ~~Unanticipated~~Values ~~events~~derived under the two valuation methods are then weighted to estimate RU and ~~circumstances~~HCN’s ~~may~~enterprise ~~occur~~values. If we determine that ~~may~~the ~~affect~~carrying amount of a reporting unit exceeds its fair value, we then calculate the ~~accuracy~~implied orfair ~~validity~~value of ~~such~~the ~~assumptions~~reporting ~~and~~unit ~~estimates.~~goodwill ~~Actual~~as ~~results~~compared ~~may~~to ~~differ~~its ~~and~~carrying ~~have~~amount ato ~~material~~determine ~~impact~~the orappropriate ~~our~~impairment ~~results~~charge. ofAlthough ~~operations~~we ~~and~~believe ~~financial~~our ~~position~~assumptions are reasonable, actual results may vary significantly and ~~subsequent~~may ~~events~~expose ~~are~~us ~~not~~to ~~necessarily~~material ~~indicative~~impairment ofcharges in the ~~reasonableness~~future. ofOur ~~the~~methodology ~~original~~for ~~assumptions~~determining orfair ~~estimates.~~values remained consistent for the periods presented.

WeDuring ~~estimate~~the ~~fair~~three ~~value~~months inended ~~our~~March 31, ~~quantitative~~2026, ~~analysis~~in byconnection ~~weighting~~with the ~~results~~Combination ~~from two different valuation approaches. They are: (1) discounted cash flow~~ and ~~(2)~~just ~~guideline~~prior ~~public~~to ~~company. Under~~ the ~~discounted~~Merger ~~cash flow method~~Date, ~~fair~~we ~~value~~completed isa ~~determined~~quantitative byassessment ~~discounting~~of ~~the~~goodwill ~~estimated~~and ~~future~~indefinite-lived ~~cash~~intangibles ~~flows~~for ofour RU and HCN. atThe ~~their~~assessment ~~estimated~~concluded ~~weighted-average~~that ~~cost~~the offair ~~capital.~~value Weof ~~incorporate~~goodwill ~~the~~for ~~use~~each of ~~projected~~RU ~~financial information~~ and aHCN ~~discount~~exceeded ~~rate~~its ~~that~~carrying ~~are~~values ~~developed~~by ~~using~~approximately ~~market participant-based assumptions~~$90.8 ~~The~~million, ~~cash-flow~~or ~~projections~~60%, ~~are~~and ~~based~~$26.0 onmillion, ~~three-year~~or ~~financial~~55%, ~~forecasts~~respectively. ~~developed~~Significant byassumptions ~~management~~in ~~that~~the ~~include~~forecast ~~revenue~~used ~~projections,~~in ~~capital~~the ~~spending~~discounted ~~trends,~~cash ~~and~~flow ~~investment~~valuation inmodel ~~working~~include ~~capital~~continued ~~to support anticipated revenue~~ growth, ~~which~~in ~~are~~our ~~updated~~RU atenrollment ~~least annually~~ and ~~approved~~cost bycontainment ~~management~~measures. ~~Under~~HCN’s ~~the~~significant ~~guideline~~assumptions ~~public~~in ~~company~~the ~~method,~~forecast ~~pricing~~relate ~~multiples~~to ~~from~~future ~~other~~campus ~~public~~openings ~~companies~~and intuition ~~the~~increases. ~~public~~These ~~higher~~assumptions ~~education market~~ are ~~used~~subject to ~~determine~~risks ~~the~~and ~~fair~~uncertainties ~~value~~that ofcould RUnegatively ~~and~~impact ~~HCN.~~results, ~~Values~~including, ~~derived~~but ~~under~~not ~~the~~limited ~~two~~to, ~~valuation~~changes ~~methods~~in ~~are~~the ~~then~~regulatory ~~weighted~~environment, todeclines ~~estimate~~in RUstudent ~~and~~enrollment, ~~HCN’s~~adverse ~~enterprise~~actions ~~values.~~by Ifstate weboards ~~determine~~of ~~that~~nursing ~~the~~(such ~~carrying~~as ~~amount~~enrollment ofcaps), aand ~~reporting~~unplanned ~~unit~~increases ~~exceeds~~in ~~its~~expenses. ~~fair~~In ~~value~~addition, we ~~then~~determined ~~calculate~~ the ~~implied~~ fair value of ~~the~~our ~~reporting~~RU ~~unit~~and ~~goodwill~~HCN asindefinite-lived ~~compared~~intangible toasset ~~its~~was ~~carrying~~greater ~~amount~~than totheir ~~determine~~carrying ~~the appropriate impairment charge~~values. ~~Although~~Therefore, weas ~~believe~~of ~~our~~the ~~assumptions~~Merger ~~are reasonable~~Date, ~~actual~~there ~~results~~was ~~may~~no ~~vary significantly and may expose us to material~~ impairment ~~charges~~of inRU ~~the~~and ~~future.~~HCN ~~Our~~goodwill ~~methodology~~and ~~for~~indefinite-lived ~~determining~~intangible ~~fair values remained consistent for the periods presented~~assets.

~~During~~Significant ~~the~~assumptions ~~three~~inherent ~~months~~to ~~ended~~valuation ~~September 30,~~methodologies ~~2025, we completed a qualitative assessment~~ for ~~potential impairment of the RU and HCN Segment~~ goodwill and indefinite-lived intangible assets. ~~As part of the assessment~~include, webut ~~considered~~are ~~the~~not ~~events~~limited ~~and circumstances expressly required by ASC 350~~to, inprospective ~~addition to other entity-specific factors. Factors considered included RU and HCN’s~~ financial ~~and~~information, ~~enrollment~~growth ~~performance~~rates, ~~against~~terminal ~~internal targets~~value, ~~economic~~discount ~~factors~~rates, and ~~the~~comparable ~~continued~~multiples ~~favorable~~from ~~growth~~publicly ~~outlook~~traded ~~for~~companies ~~nursing~~in ~~education.~~the ~~After~~higher ~~completing~~education ~~this~~market. ~~qualitative~~Future ~~assessment~~changes, weincluding ~~concluded~~minor itchanges ~~was~~in ~~more~~the ~~likely~~significant ~~than~~assumption ~~not~~or ~~that~~other ~~the~~factors ~~fair~~including ~~value~~revenue, ofoperating ~~each~~income, ofvaluation ~~the~~multiples, RU and ~~HCN~~other ~~Segments~~inputs ~~was~~to ~~greater than~~ the ~~respective~~valuation ~~carrying~~process ~~value,~~may ~~and~~result ~~therefore~~in nofuture ~~quantitative~~ impairment ~~test~~charges, and nothose ~~impairment~~charges ~~charge~~could ~~was~~be ~~necessary~~material.

~~Significant~~For ~~assumptions~~more ~~inherent to valuation methodologies for goodwill include, but are not limited to, prospective financial~~ information, ~~growth~~regarding ~~rates,~~our ~~terminal~~Critical ~~value,~~Accounting ~~discount~~Policies ~~rates,~~ and ~~comparable~~Use ~~multiples~~of ~~from publicly traded companies in the higher education market. Future changes~~Estimates, ~~including~~see ~~minor changes in~~ the ~~significant~~“Critical ~~assumption~~Accounting orEstimates” ~~other~~section ~~factors~~of ~~including~~“Item ~~revenue,~~7. ~~operating~~Management’s ~~income,~~Discussion ~~valuation multiples,~~ and ~~other~~Analysis ~~inputs~~of toFinancial ~~the~~Condition ~~valuation~~and ~~process~~Results ~~may~~of ~~result~~Operations” in ~~future~~our ~~impairment~~Annual ~~charges, and those charges could be material~~Report.

For more information regarding our Critical Accounting Policies and Use of Estimates, see the “Critical Accounting Policies and Estimates” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

Results of Operations

Below we have included a discussion of our operating results and material changes in our operating results during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2025~~2026, compared to the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~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. Our student population varies as a result of new enrollments, graduations, student attrition, the success of our marketing programs, and other reasons that we cannot always anticipate. We expect quarterly fluctuations in operating results to continue as a result of various enrollment patterns and changes in revenue and expenses.

~~APUS~~Military+ net course registrations for the three months ended ~~September~~March 3031, ~~2025~~2026, increased to approximately ~~100~~106,~~000~~600 from approximately 92102,500, an increase of 74,~~500~~100, or 84.10%, as compared to the prior year period primarily due to an increases in military registrations from students utilizing TA and military-affiliated students utilizing education benefit programs administered by the U.S. Department of Veterans Affairs, or VA. ~~APUS~~Military+ net course registrations for the nine months ended September 30, 2025, increased to approximately 298,800 from approximately 281,300, an increase of 17,500, or 6.2%, as compared to the prior year period primarily due to an increase in registrations by military-affiliated students utilizing VA and students utilizing federal student aid. APUS Segment operating margin increased to 3034.43% for the three months ended ~~September~~March 3031, ~~2025~~2026, from 2728.07% in the prior year period ~~and increased to 28~~.5% ~~from~~Operating ~~26.5% for the nine months ended September 30, 2025, as compared to the prior year period. The increase in operating~~ margin for the three months ended ~~September~~March 3031, ~~2025~~2026, ~~was~~increased primarily due to the $5.5 million increase in revenue asand ~~well~~a as$1.5 amillion decrease in ~~information~~loss ~~technology~~on ~~costs,~~assets ~~partially~~held ~~offset by increases in advertising costs, employee compensation costs, and bad debt expense, as compared to the prior year period. The increase in operating margin~~ for ~~the nine months ended September 30~~sale, ~~2025, was primarily due to an increase in revenue and decreases in information technology costs and professional fees,~~ partially offset by ~~increases~~a in$1.3 ~~employee~~million ~~compensation~~increase ~~costs,~~in advertising costs, ~~loss on assets held for sale, and bad debt expense,~~ as compared to the prior year period.

RUHealth+ total enrollment for the three months ended ~~September~~March 3031, ~~2025~~2026, increased to approximately 1419,~~900~~400 from approximately 1318,~~500~~000, an increase of 1,400, or ~~10.4%, as compared to the prior year period, driven by an 11.~~7~~% increase in on-ground enrollment, and a 10~~.8% ~~increase in online enrollment. RU total enrollment for the nine months ended September 30~~, ~~2025, increased approximately 8.4%,~~ as compared to the prior year period, driven by a 510.90% increase in on-ground enrollment, and ana 115.40% increase in online enrollment. RUHealth+ ~~Segment~~ operating margin improved to ~~negative 2.~~0.6% for the three months ended ~~September 30~~March 31, ~~2025~~2026, from negative 141.51%, in the prior year period. The improvement in the operating margin for the three months ended ~~September~~March 3031, ~~2025~~2026, was primarily due to the increase in revenue as well as decreases in information technology costs and depreciation and amortization expenses, partially offset by an increase in employee compensation costs and classroom and course materials costs, bad debt expense, and professional fees as compared to the prior year period. RU Segment operating margin improved to negative 1.$8~~% for the nine months ended September 30, 2025, from negative 16~~.0%4 inmillion ~~the prior year period. The improvement in the operating margin for the nine months ended September 30, 2025, was primarily due to the increase in~~ revenue ~~as well as decreases in information technology costs~~increase, ~~loss on leases, and depreciation and amortization expenses,~~ partially offset by anincreases ~~increase~~of ~~in employee compensation costs, classroom and course materials costs, and bad debt expense, as compared to the prior year period~~$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.

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

Analysis of Consolidated Statements of Income

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025		2024
	2026		2025
	(Unaudited)				~~(Unaudited)~~
Revenue	100.0	%	100.0	%	~~100.0~~	%	~~100.0~~	%
Costs and expenses:
Instructional costs and services	4542.87		4945.25		~~46.5~~		~~48.7~~
Selling and promotional	2221.17		21.94		~~21.7~~		~~21.7~~
General and administrative	2120.38		22.91		~~22.3~~		~~23.0~~
Depreciation and amortization	2.4		32.34		~~2.5~~		~~3.4~~
Loss on sale of subsidiary	2.4		—		0.8		—
Loss on assets held for sale	—		0.9
Loss on assets held for sale	—		—		0.3		—
Loss on disposals of long-lived assets	0.1		0.1
Loss on leases	—		—		—		0.8
Total costs and expenses	87.6		92.6
Loss on disposals of long-lived assets	0.1		—		0.1		0.1
Income from operations before interest and income taxes	12.4		7.4
Total costs and expenses	94.1		97.3		94.2		97.5
Loss on extinguishment of debt	(1.0)		—
Income from operations before interest and income taxes	5.9		2.7		5.8		2.5
Interest expense, net	(0.4)		(0.5)
Interest expense, net	(0.7)		(0.4)		(0.6)		(0.3)
Income from operations before income taxes	11.0		6.9
Income from operations before income taxes	5.3		2.3		5.2		2.2
Income tax expense	0.9		1.5
Income tax expense	1.9		0.8		1.4		0.5
Net income	10.1		5.4
Equity investment loss	—		—		—		(1.0)
Preferred stock dividend	—		0.9
Net income	3.4		1.5		3.8		0.7
Net income available to common stockholders	10.1	%	4.5	%
Preferred stock dividend	—		1.0		0.6		1.0
Loss on redemption of preferred stock	—		—		0.7		—
Net income (loss) available to common shareholders	3.4	%	0.5	%	2.5	%	(0.3)	%

Three Months Ended ~~September~~March 3031, ~~2025~~2026, Compared to Three Months Ended ~~September~~March 3031, ~~2024~~2025

Revenue. Our consolidated revenue for the three months ended ~~September~~March 3031, ~~2025~~2026, was $~~163~~174.27 million, an increase of $10.12 million, or 6.62%, compared to $~~153~~164.16 million for the three months ended ~~September~~March 3031, ~~2024~~2025. ~~The~~Revenue ~~increase~~increased ~~in revenue was~~ primarily due to an $8.24 million, or 1511.~~6%, increase in revenue in our RU Segment, a $6.2 million, or 8.~~0%, increase in revenue in our ~~APUS~~Health+ ~~Segment~~segment, ~~and~~ a $25.95 million, or 196.05%, increase in revenue in our ~~HCN~~Military+ ~~Segment~~segment, partially offset by a $7.3.7 million, ~~or 89.6%,~~ decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date. ~~The~~Our RUHealth+ ~~Segment~~segment revenue increase was primarily due to a 107.48% increase in total student enrollment and the impact of tuition increases in the second half of ~~2024~~2025. ~~The~~Our ~~APUS~~Military+ ~~Segment~~segment revenue increase was primarily due to ana 84.10% increase in net course registrations, as compared to the prior year period. ~~The HCN Segment revenue increase was primarily due to a 17.6% increase in total student enrollment, as compared to the prior year period.~~

Costs and expenses. Costs and expenses for the three months ended ~~September~~March 3031, ~~2025~~2026, were $153.51 million, an increase of $40.58 million, or 3.0.5%, compared to $~~149~~152.03 million for the three months ended ~~September~~March 3031, ~~2024~~2025. Costs and expenses for the three months ended ~~September~~March 3031, ~~2025~~2026, include a $30.9 million ~~loss on sale of subsidiary~~ in ~~Corporate and Other related to the sale of GSUSA, and $0.8 million in~~ professional fees related to the Combination ~~and the sale of GSUSA~~ in Corporate and Other~~, $0~~.6 ~~million in severance costs in our HCN Segment and Corporate and Other, and a $0.1 million loss on leases in our RU Segment, all on a pre-tax basis.~~ The results in the prior year period ~~include~~included a $1.15 million ofloss ~~information~~on ~~technology~~assets ~~transition~~held ~~services~~for ~~costs~~sale in ~~all~~our ~~segments~~Military+ assegment ~~well as Corporate~~ and ~~Other,~~ $01.80 million in professional fees in Corporate and Other relating to the Combination~~, both on a pre-tax basis~~. Costs and expenses for the three months ended ~~September~~March 3031, ~~2025~~2026, as compared to the prior year period, excluding the items noted above, increased $12.14 million, or 01.86%, ~~due~~ primarily due to increases inof ~~employee~~$2.9 ~~compensation~~million ~~costs,~~in advertising costs, ~~bad~~$2.7 ~~debt~~million ~~expense,~~in ~~and~~ 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 ~~information~~employee ~~technology~~compensation costs, $1.6 million in occupancy costs, ~~depreciation~~ and ~~amortization~~$0.7 ~~expenses,~~million ~~and~~in ~~professional~~information ~~fees~~technology costs related to our ongoing efforts to reduce operating costs. Costs and expenses as a percentage of revenue decreased to 9487.16% for the three months ended ~~September~~March 3031, ~~2025~~2026, from 9792.36% for the three months ended ~~September~~March 3031, ~~2024~~2025.

3324

Instructional costs and services expenses. Our instructional costs and services expenses for the three months ended ~~September~~March 3031, ~~2025~~2026, were $74.76 million, a decrease of $0.73 million, or 0.94%, compared to $7574.49 million for the three months ended ~~September~~March 3031, ~~2024~~2025. ~~The~~Instructional ~~decrease in instructional~~ costs and services expenses ~~was~~decreased primarily due to the $3.2 million decrease in Corporate and Other due to the sale of GSUSA, ~~and~~a ~~decreases~~$0.9 million decrease in ~~information~~employee ~~technology~~compensation costs in our Military+ segment, and a $0.5 million decrease in occupancy costs in our RUHealth+ ~~Segment~~segment related to campus and office space closures in 2025, partially offset by increases inof ~~faculty~~$2.8 ~~compensation~~million ~~costs~~in classroom and course ~~materials~~material costs indue ~~our~~to ~~APUS,~~increased RUvendor costs and enrollment, and ~~HCN~~$1.4 ~~Segments~~million ~~due~~in toemployee ancompensation ~~increase~~costs in ~~registrations~~our atHealth+ ~~APUS~~segment ~~and~~related ~~enrollments~~to atincreased ~~RU and HCN~~enrollment. Instructional costs and services expenses as a percentage of revenue decreased to 4542.87% for the three months ended ~~September~~March 3031, ~~2025~~2026, from 4945.25% for the three months ended ~~September~~March 3031, ~~2024~~2025.

Selling and promotional expenses. Our selling and promotional expenses for the three months ended ~~September~~March 3031, ~~2025~~2026, were $3637.19 million, an increase of $2.7 million, or 87.06%, compared to $3335.52 million for the three months ended ~~September~~March 3031, ~~2024~~2025. ~~The~~Selling ~~increase in selling~~ and promotional expenses ~~was~~increased primarily due to ~~increases~~an inaggregate ~~advertising~~increase ~~costs~~of in$3.1 ~~all~~million ~~segments, and an increase~~ in ~~employee~~advertising ~~compensation~~ costs inacross ~~our~~both RUsegments ~~and~~to ~~HCN~~further ~~segments~~drive enrollment, partially offset by a decrease inof ~~professional~~$1.1 ~~fees~~million in ~~our~~Corporate ~~APUS~~and ~~Segment,~~Other ~~and~~due to the sale of GSUSA. Selling and promotional expenses as a percentage of revenue increased to 2221.17% for the three months ended ~~September~~March 3031, ~~2025~~2026, from 21.94% for the three months ended ~~September~~March 3031, ~~2024~~2025.

General and administrative expenses. Our general and administrative expenses for the three months ended ~~September~~March 3031, ~~2025~~2026, were $3436.73 million, a decrease of $0.31 million, or 1.0.3%, compared to $3536.04 million for the three months ended ~~September~~March 3031, ~~2024~~2025. ~~The~~For ~~decrease~~the inthree months ended March 31, 2026 and 2025, general and administrative expenses isincluded ~~primarily~~$0.9 ~~due~~million toand ~~decreases~~$1.0 inmillion, ~~information~~respectively, ~~technology costs~~ in ~~our~~professional ~~APUS~~fees ~~and~~relating RUto ~~Segments~~the ~~and~~Combination in Corporate and Other,. General and ~~the~~administrative ~~sale~~expenses ofdecreased ~~GSUSA,~~primarily ~~partially~~due ~~offset~~to bya ~~increases~~$1.6 inmillion ~~employee~~decrease ~~compensation~~in ~~costs~~Corporate inand ~~all~~Other ~~segments~~due ~~and~~to ~~Corporate~~the ~~and~~sale ~~Other~~of GSUSA, ~~and~~partially anoffset by a $1.4 million increase in bad debt expense in ~~all~~both segments. Consolidated bad debt expense for the three months ended ~~September~~March 3031, ~~2025~~2026, was $5.6.3 million, or 3.46% of revenue, compared to $45.20 million, or 23.70% of revenue in the prior year period. General and administrative expenses as a percentage of revenue decreased to 2120.38% for the three months ended ~~September~~March 3031, ~~2025~~2026, from 22.91% for the three months ended ~~September~~March 3031, ~~2024~~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 $34.92 million for the three months ended ~~September~~March 3031, ~~2025~~2026, compared to $54.10 million in the prior year period, a decrease of $10.12 million~~, primarily related to the full amortization of all definite lived intangible assets in our RU Segment in 2024~~. Depreciation and amortization expenses as a percentage of revenue ~~was~~were 2.4% ~~and 3.3%~~ for the three months ended ~~September~~March 3031, ~~2025~~2026, and ~~2024~~2025, respectively.

Loss on ~~sale~~extinguishment of ~~subsidiary~~debt. For the three months ended ~~September~~March 3031, ~~2025~~2026, we recorded a $31.97 million ~~pre-tax~~ loss on ~~sale~~extinguishment of ~~subsidiary~~debt relating to the ~~sale~~refinance of ~~GSUSA~~our corporate debt. There was no loss on ~~sale~~extinguishment of ~~subsidiary~~debt in the prior year.

Loss on ~~leases~~assets held for sale. RUThere ~~Segment~~were ~~loss~~no losses on ~~leases~~assets ~~was~~held ~~$0.1~~for ~~million~~sale ~~for~~in the three months ended ~~September~~March 3031, ~~2025~~2026. ~~There~~For ~~was~~the nothree months ended March 31, 2025, the $1.5 million non-cash loss on ~~leases~~assets held for sale is for real property in ~~the~~Charles ~~prior~~Town, ~~year~~West ~~period~~Virginia in our Military+ segment.

Loss on disposals of long-lived assets. The loss on disposal of long-lived assets was $~~92,000~~0.2 million for the three months ended ~~September~~March 3031, ~~2025~~2026, as compared to $~~23,000~~0.2 million for the three months ended ~~September~~March 3031, ~~2024~~2025.

Stock-based compensation expenses. Stock-based compensation expenses included in instructional costs and services, selling and promotional, and general and administrative expenses were $12.63 million ~~and~~for ~~$1.8~~each ~~million~~of ~~for~~ the three months ended ~~September~~March 3031, ~~2025~~2026, and ~~2024, respectively~~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 $10.17 million and $0.69 million for the three months ended ~~September~~March 3031, ~~2025~~2026, and ~~2024~~2025, respectively. ~~The~~Net ~~increase in net~~ interest expense in the three months ended ~~September~~March 3031, ~~2025~~2026, as compared to the prior year period, ~~was~~decreased primarily due to ana ~~increase~~decrease in interest expense due to the ~~expiration~~refinance of ~~the~~corporate ~~interest~~debt ~~rate~~and ~~cap~~the decrease in ~~December~~market ~~2024,~~rates ~~and~~paid ~~a decrease~~ in ~~interest~~the ~~income~~comparable ~~earned~~periods.

Income tax expense. We recognized income tax expense of $3.1.5 million and $1.2.5 million for the three months ended ~~September~~March 3031, ~~2025~~2026, and ~~2024~~2025, respectively, or an effective tax rate of 357.69% in ~~2025,~~2026 and 3521.37% in ~~2024~~2025. The effective tax rate in both periods was ~~negatively~~positively impacted by ~~higher~~excess ~~non-deductible~~tax ~~compensation~~benefits ~~expenses~~related ~~in relation~~ to ~~taxable~~stock ~~income~~compensation inas the ~~periods.~~first quarter typically includes

Net income. Our net income was $5.6 million and $2.3 million for the three months ended September 30, 2025, and 2024, respectively, an increase of $3.3 million. This increase was related to the factors discussed above. 25

34the 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.

~~Preferred~~Net ~~stock dividends~~income. ~~There~~Our ~~were~~net noincome ~~preferred~~was ~~stock~~$17.7 ~~dividends~~million and $8.9 million for the three months ended ~~September~~March 3031, ~~2025~~2026, ~~due~~and to2025, ~~the~~respectively, ~~redemption~~an ofincrease ~~all outstanding shares~~ of ~~our~~$8.8 ~~Series A Senior Preferred Stock in June 2025~~million. ~~Preferred~~This ~~stock~~increase ~~dividends~~was ~~for~~due to the ~~three~~factors ~~months~~discussed ~~ended September 30, 2024 were $1~~above.5 ~~million.~~

~~Net~~Preferred ~~income~~stock ~~available to common stockholders~~dividends. ~~The~~There ~~net~~were ~~income~~no ~~available~~preferred tostock ~~common~~dividends ~~stockholders was $5.6 million~~ for the three months ended ~~September~~March 3031, ~~2025,~~2026 ~~compared~~due to athe ~~net~~redemption ~~income~~of ~~available~~all tooutstanding ~~common~~shares ~~stockholders~~ of $0our Series A Senior Preferred Stock in June 2025.7 ~~million~~Preferred stock dividends for the three months ended ~~September~~March 3031, ~~2024,~~2025 anwere ~~improvement of~~ $41.84 million. ~~This improvement was related to the factors discussed above.~~

~~Nine~~Net ~~Months~~income ~~Ended~~available ~~September~~to 30common stockholders. The net income available to common stockholders was $17.7 million for the three months ended March 31, ~~2025~~2026, ~~Compared~~compared to ~~Nine~~a ~~Months~~net ~~Ended~~income ~~September~~available 30to common stockholders of $7.5 million for the three months ended March 31, ~~2024~~2025, an improvement of $10.3 million. This improvement was due to the factors discussed above.

Revenue. Our consolidated revenue for the nine months ended September 30, 2025, was $490.5 million, an increase of $30.1 million, or 6.5%, compared to $460.4 million for the nine months ended September 30, 2024. The increase in revenue was primarily due to a $20.8 million, or 13.1%, increase in revenue in our RU Segment, a $14.1 million, or 6.0% increase in revenue in our APUS Segment, and a $5.9 million, or 12.2%, increase in revenue in our HCN Segment, partially offset by a $10.9 million, or 57.7%, decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date. The RU Segment revenue increase, as compared to the prior year period, was primarily due to an 8.4% increase in total student enrollment and the impact of tuition increases in the second half of 2024. The APUS Segment revenue increase was primarily due to a 6.2% increase in net course registrations, as compared to the prior year period. The HCN Segment revenue increase was primarily due to a 13.5% increase in total student enrollment.

Costs and expenses. Costs and expenses for the nine months ended September 30, 2025, were $461.6 million, an increase of $12.6 million, or 2.8%, compared to $448.9 million for the nine months ended September 30, 2024. Costs and expenses for the nine months ended September 30, 2025, include a $3.9 million loss on sale of subsidiary in Corporate and Other relating to the sale of GSUSA, $3.5 million in professional fees relating to the Combination and the sale of GSUSA in Corporate and Other, a $1.5 million loss on assets held for sale in our APUS Segment, $0.6 million in severance costs in our HCN Segment and Corporate and Other, and a $0.1 million loss on leases in our RU Segment, all on a pre-tax basis. Costs and expenses for the nine months ended September 30, 2024, include a $3.7 million loss on leases in our RU Segment, $3.1 million in information technology transition service costs in all segments as well as Corporate and Other, $0.8 million in professional fees in Corporate and Other relating to the Combination, $0.5 million in severance costs in Corporate and Other and the planned campus closures of our campuses located in Wisconsin in our RU Segment, all on a pre-tax basis. Costs and expenses for the nine months ended September 30, 2025, as compared to the prior year period, excluding the items noted above, increased $11.3 million, or 2.6%, due primarily to increases in employee compensation costs, advertising costs, bad debt expense, classroom and course materials costs, and professional fees, partially offset by decreases in information technology costs and depreciation and amortization expenses. Costs and expenses as a percentage of revenue decreased to 94.2% for the nine months ended September 30, 2025, from 97.5% for the nine months ended September 30, 2024.

Instructional costs and services expenses. Our instructional costs and services expenses for the nine months ended September 30, 2025, were $228.1 million, an increase of $4.1 million, or 1.8%, compared to $224.0 million for the nine months ended September 30, 2024. The increase in instructional costs and services expenses were primarily due to increases in faculty compensation costs in our APUS, RU, and HCN Segments due to an increase in registrations at APUS and enrollments at RU and HCN, and an increase in classroom and course materials costs in all segments, partially offset by a decrease in information technology costs in our RU Segment and Corporate and Other, a decrease in occupancy costs in our RU and HCN Segments and Corporate and Other, and a decrease in instructional costs and services expenses in Corporate and Other due to the sale of GSUSA. Instructional costs and services expenses as a percentage of revenue decreased to 46.5% for the nine months ended September 30, 2025, from 48.7% for the three months ended September 30, 2024.

Selling and promotional expenses. Our selling and promotional expenses for the nine months ended September 30, 2025, were $106.4 million, an increase of $6.6 million, or 6.7%, compared to $99.8 million for the nine months ended September 30, 2024. The increase in selling and promotional expenses was primarily due to an increase in advertising costs in our APUS and HCN Segments and an increase in employee compensation costs in all segments and Corporate and Other, partially offset by the sale of GSUSA. Selling and promotional expenses as a percentage of revenue was 21.7% for the nine months ended September 30, 2025, and 2024.

General and administrative expenses. Our general and administrative expenses for the nine months ended September 30, 2025, were $109.2 million, an increase of $3.5 million, or 3.3%, compared to $105.7 million for the nine months ended September 30, 2024. General and administrative expenses for the nine months ended September 30, 2025, included $3.5 million in professional fees relating to the Combination and the sale of GSUSA in Corporate and Other, and $0.6 million in severance

costs in our HCN Segment and Corporate and Other, compared to $0.8 million in professional fees in Corporate and Other relating to the Combination and $0.5 million in severance costs in Corporate and Other and the planned campus closures of our campuses located in Wisconsin in our RU Segment, in the prior year period, all on a pre-tax basis. The increase in general and administrative expenses was primarily due to increases in employee compensation costs in all segments and Corporate and Other, bad debt expense in all segments, and professional fees in Corporate and Other, partially offset by a decreases in information technology costs in our APUS and RU Segments and Corporate and Other, professional fees in all segments, and the sale of GSUSA. Consolidated bad debt expense for the nine months ended September 30, 2025, was $15.4 million, or 3.1% of revenue, compared to $12.7 million, or 2.8% of revenue in the prior year period. General and administrative expenses as a percentage of revenue decreased to 22.3% for the nine months ended September 30, 2025, from 23.0% for the nine months ended September 30, 2024. As we continue to evaluate enhancements to our business capabilities, we may incur additional costs and that our general and administrative expenses will vary from time to time.

Depreciation and amortization expenses. Depreciation and amortization expenses were $12.0 million for nine months ended September 30, 2025, compared to $15.4 million in the prior year period, a decrease of $3.4 million primarily related to the full amortization of all definite lived intangible assets in our RU Segment in 2024. Depreciation and amortization expenses as a percentage of revenue was 2.5% and 3.4% for the nine months ended September 30, 2025, and 2024, respectively.

Loss on sale of subsidiary. For the nine months ended September 30, 2025, we recorded a $3.9 million pre-tax loss on sale of subsidiary relating to the sale of GSUSA. There was no loss on sale of subsidiary in the prior year.

Loss on assets held for sale. For the nine months ended September 30, 2025, the $1.5 million pre-tax non-cash loss on assets held for sale is for real property located in Charles Town, West Virginia in our APUS Segment. There was no loss on assets held for sale in the prior year.

Loss on leases. RU Segment loss on leases was $0.1 million and $3.7 million for the nine months ended September 30, 2025 and 2024, respectively.

Loss on disposals of long-lived assets. The loss on disposal of long-lived assets was $0.4 million for the nine months ended September 30, 2025, compared to a loss of $0.2 million for the nine months ended September 30, 2024.

Stock-based compensation expenses. Stock-based compensation expenses included in instructional costs and services, selling and promotional, and general and administrative expenses were $6.1 million and $5.5 million for the nine months ended September 30, 2025, and 2024, respectively. 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 $3.1 million and $1.5 million for the nine months ended September 30, 2025, and 2024, respectively. The increase in net interest expense was primarily due to an increase in interest expense due to the expiration of the interest rate cap in December 2024, and a decrease in interest income earned, as compared to the prior year period.

Income tax expense. We recognized income tax expense of $7.0 million and $2.4 million for the nine months ended September 30, 2025, and 2024, respectively, or an effective tax rate of 26.8% and 43.6%, respectively. The effective tax rate in 2025 was positively impacted by excess tax benefits related to stock compensation. The effective tax rate in 2024 was primarily due to the $4.4 million equity investment loss not deductible for tax purposes, and an increase in non-deductible stock compensation expense in relation to taxable income in the period.

Equity investment loss. There was no equity investment loss for the nine months ended September 30, 2025. The equity investment loss of $4.4 million for nine months ended September 30, 2024 was related to a $3.3 million non-cash investment loss on an equity investment due to the investee entering into a new convertible debt agreements, which resulted in the conversion of our preferred stock holdings in the investee into common shares, and the dilution of our ownership percentage, and a $1.1 million loss on sale of our remaining equity method investment.

Net income. Our net income was $18.9 million and $3.1 million, for the nine months ended September 30, 2025, and 2024, respectively, an increase of $15.8 million. This increase was related to the factors discussed above.

Preferred stock dividends. Preferred stock dividends were $2.8 million and $4.6 million, for the nine months ended September 30, 2025, and 2024, respectively. The decrease in preferred stock dividends was primarily due to the redemption of all outstanding shares of our Series A Senior Preferred Stock in June 2025.

Loss on redemption of preferred stock. In June 2025, we redeemed all outstanding 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 $12.7 million, for the nine months ended September 30, 2025, compared to a net loss available to common stockholders of $1.4 million for the nine months ended September 30, 2024, an improvement of $14.1 million. This improvement was related to the factors discussed above.

Analysis of Operating Results by Reportable Segment

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2025		2024		2025		2024
	2026		2025
	(Unaudited)				~~(Unaudited)~~
Revenue:
APUS Segment	$	83,137	$	76,981	$	248,814	$	234,685
Military+	$	89,443	$	83,946
RU Segment	60,830		52,604		179,602		158,773
Health+	85,356		76,927
HCN Segment	18,440		15,493		54,250		48,349
Corporate and Other	(61)		3,678
Corporate and Other	808		8,044		7,866		18,642
Total revenue	$	174,738	$	164,551
Total revenue	$	163,215	$	153,122	$	490,532	$	460,449
Income (loss) from operations before interest and income taxes:
Income (loss) from operations before interest and income taxes:
Military+	$	30,718	$	24,126
APUS Segment	$	25,280	$	20,765	$	70,848	$	62,143
Health+	517		(818)
RU Segment	(1,240)		(7,609)		(3,288)		(25,401)
Corporate and Other	(9,592)		(11,062)
HCN Segment	(873)		(771)		(2,021)		(1,819)
Total income from operations before interest and income taxes	$	21,643	$	12,246
Corporate and Other	(13,470)		(8,256)		(36,571)		(23,392)
Total income from operations before interest and income taxes	$	9,697	$	4,129	$	28,968	$	11,531

~~APUS Segment~~ Military+

For the three months ended ~~September~~March 3031, ~~2025~~2026, the $65.25 million, or 86.05%, increase to approximately $8389.14 million in revenue in our ~~APUS~~Military+ ~~Segment~~segment was primarily attributable to higher net course registrations, as compared to the prior year period. Net course registrations increased 84.10% to approximately ~~100~~106,~~000~~600 from approximately 92102,500 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 $2530.37 million during the three months ended ~~September~~March 3031, ~~2025~~2026, from $2024.81 million in the prior year period, an increase of $46.56 million, or 2127.73%, ~~and was~~ primarily due to anthe ~~increase~~$5.5 inmillion revenue increase as well as athe $1.5 million decrease in ~~information~~loss ~~technology~~on ~~costs~~assets held for sale, partially offset by ~~increases~~a in$1.3 ~~advertising~~million ~~costs,~~increase ~~employee~~in ~~compensation~~advertising costs, ~~and~~in ~~bad~~each ~~debt~~case ~~expense,~~ as compared to the prior year period.

~~For~~Health+ the nine months ended September 30, 2025, the $14.1 million, or 6.0%, increase to approximately $248.8 million in revenue in our APUS Segment was primarily attributable to higher net course registrations, as compared to the prior year period. Net course registrations increased 6.2% to approximately 298,800 from approximately 281,300 in the prior year period, primarily due to an increase in registrations by military-affiliated students utilizing VA and students utilizing federal student aid. Income from operations before interest and income taxes increased to $70.8 million during the nine months ended September 30, 2025 from $62.1 million in the prior year period, an increase of $8.7 million, or 14.0%, as a result of the increase in revenue and decreases in information technology costs and professional fees, partially offset by increases in employee compensation costs, advertising costs, the loss on assets held for sale, and bad debt expense as compared to the prior year period.

RUFor ~~Segment~~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

~~For the three months ended September 30, 2025, the $8.2 million, or 15.6%, increase to approximately $60.8 million~~ 26

37the prior year period.

in revenue in the RU Segment was primarily due to a 10.4% increase in total student enrollment which was driven by an 11.7% increase in on-ground enrollment, and a 10.8% increase in online enrollment, as compared to the prior year period, and the impact of tuition increases in the second half of 2024. The loss from operations before interest and income taxes was $1.2 million and $7.6 million for the three months ended September 30, 2025, and 2024, respectively, an improvement of $6.4 million, primarily due to the increase in revenue as well as decreases in information technology costs and depreciation and amortization expenses, partially offset by an increase in employee compensation costs and classroom and course materials costs, bad debt expense, and professional fees as compared to the prior year period.

For the nine months ended September 30, 2025, the $20.8 million, or 13.1%, increase to approximately $179.6 million in revenue in the RU Segment was primarily due to a 8.4% increase in total student enrollment which was driven by a 5.9% increase in on-ground enrollment, and an 11.4% increase in online enrollment, as compared to the prior year period, and the impact of tuition increases in the second half of 2024. The loss from operations before interest and income taxes was $3.3 million and $25.4 million for the nine months ended September 30, 2025, and 2024, respectively, an improvement of $22.1 million, primarily due to the increase in revenue as well as decreases in information technology costs, loss on leases, and depreciation and amortization expenses, partially offset by increases in employee compensation costs, classroom and course materials costs, and bad debt expense, as compared to the prior year period.

HCN Segment

For the three months ended September 30, 2025, the $2.9 million, or 19.0%, increase to approximately $18.4 million in revenue in our HCN Segment was primarily due to a 17.6% increase in total student enrollment, as compared to the prior year period. The loss from operations before interest and income taxes was $0.9 million and $0.8 million during the three months ended September 30, 2025, and 2024, respectively, a decline of $0.1 million, primarily due to the increase in revenue offset by increases in employee compensation costs, classroom and course materials costs, information technology costs, and bad debt expense, as compared to the prior year period.

For the nine months ended September 30, 2025, the $5.9 million, or 12.2%, increase to approximately $54.3 million in revenue in our HCN Segment was primarily due to a 13.5% increase in total student enrollment, as compared to the prior year period. The loss from operations before interest and income taxes was $2.0 million and $1.8 million during the nine months ended September 30, 2025, and 2024, respectively, a decline of $0.2 million, primarily due to the increase in revenue offset by increases in employee compensation costs, classroom and course materials costs, information technology costs, and bad debt expense, as compared to the prior year period.

Liquidity and Capital Resources

Liquidity

Cash, cash equivalents, and restricted cash were $~~193~~221.10 million and $~~158~~176.95 million at ~~September~~March 3031, ~~2025~~2026, and December 31, ~~2024~~2025, respectively, representing an increase of $3444.25 million, or 2125.52%. The increase was primarily due to the collection of TA accounts receivable atin ~~APUS,~~ the ~~proceeds~~Military+ ~~from the sale of assets held for sale~~segment, and ~~the~~our improved financial performance ~~at RU~~, partially offset by cash used to ~~redeem~~repurchase ~~our~~common ~~Series~~stock Aand ~~Senior~~the ~~Preferred~~additional ~~Stock~~principal paydown of corporate debt. We have historically financed operating activities and capital expenditures with cash provided by operating activities. We expect to continue to fund our costs and expenses through cash generated from operations for the next twelve months and beyond. 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.

OnWe ~~October~~derive 1,a ~~2025~~significant portion of our revenue from our participation in ED’s Title IV programs, ~~DoD~~for TAwhich disbursements are governed by federal regulations. We have typically received disbursements under Title IV programs ~~were~~within ~~temporarily~~30 ~~suspended~~days asof athe ~~result~~start of the ~~U.S.~~applicable ~~federal~~course ~~government~~or ~~shutdown~~term. ~~APUS~~Another ~~estimates~~significant ~~that,~~source asof arevenue ~~result,~~is ~~approximately~~derived ~~12,700~~from ~~APUS~~TA ~~course~~from ~~registrations~~the ~~were~~DoD ~~dropped~~and onprograms ~~October~~from ~~11,~~the ~~2025~~VA. Generally, ~~for~~VA ~~students~~funds ~~who~~are ~~intended~~received towithin ~~use~~60 TAdays ~~funds.~~of ~~Approximately~~the ~~1,700~~start ~~course~~of ~~registrations~~the ~~were~~courses ~~not~~to ~~dropped~~which ~~for~~they ~~students~~relate, ~~using~~and TA funds ~~that~~received ~~had~~within ~~been~~30 ~~authorized~~days inof the ~~prior~~invoice ~~government~~date. ~~fiscal~~APUS ~~year.~~generally ~~Accordingly,~~invoices ~~APUS~~for ~~estimates~~TA ~~that~~approximately nine weeks after the start of a course, and may change its billing approach as ain ~~result~~the ofpast, which has had the ~~government~~effect ~~shutdown~~of delaying payments from one period into another. For example, ~~October~~in July 2025, ~~net~~APUS ~~course~~delayed ~~registrations~~billing ~~declined~~to bycertain ~~approximately~~branches, ~~35%~~further delaying payments until 2026, aswhich ~~compared~~could have an adverse impact on APUS’s ability to ~~October~~comply ~~2024.~~with Wethe ~~have~~90/10 ~~implemented~~Rule ~~various~~in ~~cost~~2026 ~~savings~~or ~~measures,~~future ~~including~~years. aThe ~~reduction~~change in ~~force,~~TA ~~hiring~~billing ~~freeze~~practice added to our accounts receivable as of December 31, 2025, and ~~reduction~~resulted in ~~travel~~an ~~and~~increase ~~discretionary~~to ~~costs~~our leverage ratio as of December 31, ~~and~~2025, weunder ~~are~~our ~~continuing~~Credit toAgreement ~~evaluate~~as ~~additional~~defined ~~opportunities~~and todiscussed ~~mitigate~~in “Note 7. Long-term Debt”. During the ~~adverse~~three ~~impacts~~months ofended March 31, 2026, APUS collected approximately $33.3 million from TA related to the ~~ongoing~~2025 ~~government~~delayed ~~shutdown~~billings.

On ~~October~~March 242, ~~2025~~2026, ~~the~~we ~~Navy~~completed ~~announced~~the ~~that~~first TAstep ~~funding~~of ~~was~~the ~~restored~~Combination, ~~for~~and ~~classes~~we ~~starting~~anticipate oncompleting orthe ~~before~~Combination ~~December~~in ~~31,~~the ~~2025~~third ~~using~~quarter ~~OBBBA~~of ~~TA Funds. Additionally~~2026, wesubject ~~learned~~to ~~that~~obtaining ~~certain~~required ~~individuals~~approvals. ~~responsible~~For ~~for oversight of~~ the ~~voluntary~~years ~~education~~ended ~~programs~~December ~~at the Army~~31, ~~Air Force~~2025, ~~Navy,~~ and ~~Marines~~2024, ~~returned~~we toincurred ~~their~~$3.5 ~~roles~~million and, in$2.2 ~~the~~million ~~cases~~in ofprofessional ~~the Army~~fees, ~~Air Force~~respectively, ~~and~~related ~~Navy~~to ~~have~~the ~~begun~~Combination. ~~approving~~For TAthe ~~funds~~three ~~using~~months ~~OBBBA~~ended TAMarch ~~Funds.~~31, As2026, ofwe ~~November~~incurred ~~10,~~$0.9 ~~2025,~~million ~~APUS~~in ~~estimates~~professional ~~that~~fees itand ~~was~~expect ~~able~~ to ~~recover~~incur between approximately ~~5,000~~$1.0 ~~course~~million ~~registrations~~and ~~for~~$3.0 ~~November~~million ~~2025~~in ~~course~~professional ~~starts~~fees byin ~~students~~2026 ~~using~~to TAcomplete ~~funds.~~the ~~While~~ Combination.

38That 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. The Total Net Leverage Ratio under the Prior Credit Agreement at December 31, 2025, was negative 0.30 due to the growth in both cash and earnings and the reduction in restricted cash.

~~the~~On ~~impact~~March of9, ~~October~~2026, ~~2025~~we ~~and~~entered ~~November~~into ~~2025~~a ~~course~~Credit ~~registrations~~Agreement ~~from~~with ~~students~~PNC ~~using~~Bank, TANational ~~funds~~Association, ~~are~~as ~~known~~administrative ~~generally~~agent and collateral agent, ~~December~~PNC ~~2025~~Capital ~~registrations~~Markets ~~are~~LLC ~~uncertain.~~as ~~Accordingly,~~joint atlead ~~this~~arranger ~~time~~and bookrunner, ~~the~~and ~~full~~a ~~impact~~syndicate of ~~the~~lenders, ~~shutdown~~or ~~and~~the ~~any~~Lenders, ~~mitigating~~or ~~actions~~the on2026 ~~APUS’s~~Credit ~~operating~~Agreement. ~~results~~The ~~for~~2026 ~~the~~Credit ~~fourth~~Agreement ~~quarter~~provides offor ~~2025~~(i) isa ~~uncertain~~$90.0 ~~The~~million ~~first~~senior ~~quarter~~secured ofterm loan, or the 2026 ~~revenue~~Term ~~will~~Loan, beand ~~impacted~~(ii) bya ~~the~~senior ~~amount~~secured ofrevolving ~~registrations~~credit facility in ~~December~~an ~~2025~~aggregate ~~because~~principal weamount ~~recognize~~of ~~revenue~~up atto ~~APUS~~$40.0 ~~over~~million, or the ~~length~~2026 ofRevolving aCredit ~~course~~Facility, ~~which~~or, istogether ~~eight~~with ~~weeks~~the ~~for~~2026 ~~most~~Term ~~APUS~~Loan, ~~courses~~the 2026 Facilities. ~~However,~~The as2026 ~~the~~Revolving ~~shutdown’s~~Credit ~~duration,~~Facility ~~the~~replaces ~~scope~~our ~~and~~prior ~~effectiveness~~$20.0 ofmillion ~~mitigation~~senior ~~measures~~secured werevolving ~~have~~credit ~~implemented~~facility orunder ~~may~~the ~~still~~Prior ~~implement~~Credit Agreement, and the ~~aggregate~~proceeds ~~amount~~of ~~and~~the ~~timing~~2026 ofTerm ~~disbursement~~Loan, oftogether ~~OBBBA~~with TAcash ~~Funds~~on ~~(and~~hand, ~~other~~were TAused ~~funds,~~to ifrepay ~~any)~~the isapproximately ~~uncertain,~~$96.4 wemillion ~~are~~principal ~~unable~~amount tooutstanding ~~fully~~under ~~predict~~our ~~the~~prior ~~impact~~$175.0 ~~the~~million ~~shutdown~~term ~~may~~loan ~~have~~under onthe ~~our~~Prior ~~operating~~Credit ~~results~~Agreement.

WeThe ~~derive~~2026 aCredit ~~significant~~Agreement ~~portion~~contains offinancial ~~our~~covenants ~~revenue~~that ~~from~~require ~~our~~us ~~participation~~to in(i) ~~ED’s~~maintain ~~Title~~a IVConsolidated ~~programs,~~Total ~~for~~Net ~~which~~Leverage ~~disbursements~~Ratio ~~are governed by federal regulations. We have typically received disbursements under Title IV programs within 30 days~~ of ~~the~~no ~~start~~greater ofthan ~~the applicable course or term~~2. ~~Other significant sources of revenue are derived from TA and VA education benefits~~50:1. ~~Generally~~00, ~~these~~(ii) ~~funds~~maintain ~~are~~a ~~received~~Consolidated ~~within~~Interest 60Coverage ~~days~~Ratio of ~~the~~no ~~start~~less ofthan ~~the courses to which they relate~~2.50:1.00 ~~However,~~and in(iii) ~~September~~maintain ~~2023,~~a ~~APUS~~minimum ~~changed~~balance ~~its approach to invoicing for TA, taking longer to bill TA, which had the effect~~ of ~~delaying~~domestic ~~payments~~unrestricted ~~from~~cash ~~2023~~and tocash ~~2024.~~equivalents ~~Due to this change in the approach to invoicing TA in the fourth quarter~~ of ~~2023, in 2024 APUS collected approximately~~ $2240.10 million ~~from TA related to periods prior to 2024~~. InThe ~~January~~Consolidated ~~2024,~~Interest ~~APUS~~Coverage ~~separately~~Ratio ~~revised~~(as ~~its~~defined ~~billing~~in ~~policy~~the ~~for~~2026 ~~students~~Credit ~~utilizing~~Agreement) TAreflects ~~from~~a ~~two~~ratio ~~weeks~~of toconsolidated ~~five~~EBITDA ~~weeks after course start date~~ to ~~nine~~consolidated ~~weeks~~interest ~~after the course start date~~expense. InThe ~~December~~Consolidated ~~2024,~~Total ~~APUS~~Net ~~again~~Leverage ~~changed its approach to invoicing for TA~~Ratio, ~~taking~~under ~~longer~~the to2026 ~~bill~~Credit TAAgreement, ~~and~~at ~~as a result of this change~~March 31, ~~during the nine months ended September 30~~2026, ~~2025,~~was ~~APUS~~negative ~~collected approximately $32~~0.~~5 million from TA related to periods prior to 2025~~10. ~~The~~For ~~change~~more ininformation ~~billing~~on ~~approach increased operating cash flow and bad debt expense in 2025 and may cause~~ the ~~“90%”~~2026 ~~side~~Facilities ~~of the ratio to increase in 2025 or future years, which could have an adverse impact on our cash flow~~ and ~~results~~their ~~of operations~~terms, asplease ~~well~~refer ~~as APUS’s ability~~ to ~~comply~~“Note ~~with the 90/10 Rule in 2025 or future years~~7. InLong-Term ~~July 2025, APUS again delayed billing to certain branches, further delaying payments until 2026~~Debt”. We estimate that this delay in APUS’s billing approach implemented beginning in July 2025 will result in approximately $33.0 million of receivables that we would have expected to receive in 2025 to be received in 2026.

EDCapital ~~evaluates~~expenditures ~~institutions~~could on an annual basis for compliance with specified financial responsibility standards, including a composite score calculation based on a complex formula using line items from the institution’s audited financial statements. Generally, an institution’s composite score must be athigher ~~least 1.5 for the institution to be deemed financially responsible. A composite score between 1.0 and 1.5 is considered by ED to be~~ in the ~~“zone.”~~future ~~An institution in the “zone” may still participate in Title IV programs~~ as a ~~financially~~result ~~responsible institution through the “zone alternative” as set forth in ED regulations. On April 9~~of, ~~2025,~~among EDother ~~notified us that according to its calculations~~things, weadditional ~~had~~expenditures afor ~~fiscal~~technology ~~year~~or ~~end~~other ~~2023~~business ~~consolidated composite score of 1.3 and our institutions were therefore in the “zone.” On April 13~~capabilities, ~~2025, we timely informed ED that we selected~~ the ~~“zone~~maintenance ~~alternative”~~of asexisting ~~the~~campuses ~~alternative~~at ~~basis on which we establish financial responsibility. As a result~~Health+, ~~APUS, RU and HCN currently operate under~~ the ~~zone~~opening alternative to establish financial responsibility. Under the zone alternative, we are required to: (i) make Title IV disbursements to eligible students and parents under the heightened cash monitoring payment method, or ~~HCM1,~~closing ~~pursuant~~of tocampuses ~~which we would be required to first make disbursements to eligible students and parents and pay any credit balances before we request~~ or ~~receive funds from ED for~~ the ~~amount~~consolidation of ~~those~~existing ~~disbursements;~~campuses ~~(ii)~~at ~~notify~~Health+, ~~ED of certain oversight and financial events; and (iii) require our auditors to express an opinion on our compliance with~~ the ~~requirements~~acquisition ~~under~~or ~~the~~lease ~~zone~~of ~~alternative.~~existing ~~Our~~structures ~~placement~~or onpotential ~~HCM1~~new ~~status~~construction ~~did not have a significant impact on our financial results for the three and nine months ended September 30, 2025, and 2024.~~

As of December 31, 2024, restricted cash included a $25.4 million restricted certificate of deposit to secure a letter of credit for the benefit of ED on behalf of RU in connection with RU’s 2020 composite score, which is used by ED for determining compliance with financial responsibility standards, being below the minimum required. In May 2025, the letter of credit was released by ED, and the related cash was thereby no longer restricted.27

~~Our~~projects, ~~Credit~~and ~~Agreement~~necessary ~~contains~~tenant ~~financial~~improvements ~~covenants~~ that ~~require~~arise usas ~~to maintain~~ a ~~Total~~result ~~Net~~of ~~Leverage~~our ~~Ratio~~ongoing ~~(as~~evaluation ~~defined~~of inour ~~each~~space ~~respective~~needs ~~agreement)~~and ofopportunities nofor ~~greater~~physical ~~than 2~~growth.00 toWe ~~1.00~~also ~~and~~expect ~~0.75~~ to ~~1.00,~~continue ~~respectively, subject~~ to ~~certain~~explore ~~exceptions.~~opportunities ~~Our Total Net Leverage Ratio, under the Credit Agreement, at September 30, 2025, was negative 0.46 due~~ to ~~the~~invest ~~growth~~ in ~~both cash and earnings, and~~ the ~~reduction~~education ~~in restricted cash. The net leverage ratio at December 31~~industry, ~~2024~~which ~~was~~could ~~0.20.~~include ~~While~~purchasing weor doinvesting ~~not anticipate that a higher leverage ratio will have material limitations on our expected operations for 2025, it could result~~ in ~~reduced~~other ~~operational~~education-related ~~flexibility~~companies inor ~~2026~~companies ~~and~~developing ~~future~~new ~~years~~technologies.

~~Capital~~Share ~~expenditures~~Repurchase 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 RU and HCN, the opening of new campuses or the consolidation of existing campuses at RU and HCN, 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.Program

39On March 10, 2026, the Board approved a common stock repurchase program of up to $50 million in the aggregate. 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.

On June 23, 2025, APEI redeemed all 400 outstanding shares of Series A Senior Preferred Stock for $43.1 million, excluding unpaid and accrued dividends of $1.4 million. Accordingly, no shares of preferred stock were issued or outstanding at June 30, 2025. For additional details regarding the redemption of the Series A Senior Preferred Stock, please refer to “Note 12. Preferred Stock” included in our Consolidated Financial Statements.

Operating Activities

Net cash provided by operating activities was $7363.53 million and $4737.30 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, and ~~2024~~2025, respectively. The increase in cash from operating activities was primarily due to the collection of TA accounts receivable atin ~~APUS~~our Military+ segment, related to the 2024 change in TA billing approach, ~~the~~our improved financial performance ~~at RU~~, and other changes in working capital due to the timing of receipts and payments. Accounts receivable at ~~September~~March 3031, ~~2025~~2026, decreased approximately $1827.60 million compared to December 31, ~~2024~~2025, primarily related to TA collections in our ~~APUS~~Military+ ~~Segment~~segment. ~~Accounts~~Cash flow provided by accounts payable, accrued liabilities, and accrued compensation and benefits at ~~September~~March 3031, ~~2025~~2026, were approximately $1312.64 million ~~higher than December 31, 2024~~.

Investing Activities

Net cash ~~provided~~used byin investing activities was $102.5 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, compared to $173.74 million of net cash used in investing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2024. For the nine months ended September 30,~~ 2025, ~~cash~~mainly ~~provided~~due byto ~~investing~~a ~~activities~~decrease ~~includes $23.0 million~~ in ~~proceeds from the sale of assets held for sale. Capital expenditures were $11.8 million and $17.7 million for the nine months ended September 30, 2025, and 2024, respectively. Prior year period~~ capital expenditures ~~were~~in ~~higher than~~ the current year period, ~~primarily~~when ~~due~~compared to ~~campus consolidations at RU and relocations at HCN that occurred in the~~ prior year ~~period~~.

Financing Activities

Net cash used in financing activities was $4916.83 million and $115.60 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2025~~2026, and ~~2024~~2025, respectively. The increase in cash used in ~~financial~~financing activities in the current year period is primarily due to ~~our~~cash ~~redemption~~paid for the repurchase of common stock of $8.7 million, mainly relating to the deemed repurchase of our ~~Series~~common Astock ~~Senior~~to ~~Preferred~~satisfy ~~Stock~~minimum tax-withholding requirements in ~~June~~connection ~~2025~~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 $431.24 million.

Financing activities include preferred stock dividends paid of $2.8 million and $4.6 million for the nine months ended September 30, 2025, and 2024, respectively. Financing activities for the nine months ended September 30, 2024, include $2.8 million paid for the repurchase of 251,146 shares of common stock and $2.6 million in principal payments on our long term debt.

Contractual Commitments

We have various contractual obligations consisting of operating leases and purchase obligations. Purchase obligations include agreements with consultants, contracts with third-party service providers, and other future contracts or agreements. For a summary of our contractual obligations, please refer to Item 7 of Part II of our Annual Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk

We had no material derivative financial instruments or derivative commodity instruments as of ~~September~~March 3031, ~~2025~~2026. We maintain our cash and cash equivalents in bank deposit accounts, money market funds, and short-term U.S. Treasury bills. The bank deposits exceed federally insured limits. We have historically not experienced any losses in such accounts. We believe we are not exposed to any significant credit risk on cash and cash equivalents. Due to the short-term duration of our investment portfolio, the low yield on the portfolio, and the low risk profile of our investments, a 10% increase or decrease in interest rates would not have a material impact on the fair value of our portfolio.

Interest Rate Risk

We are subject to risk from changes in interest rates primarily relating to our investment of funds in short-term U.S. Treasury bills issued at a discount to their par value. Our future investment income will vary due to changes in interest rates.

In the normal course of business, we employ established policies and procedures to manage our exposure to changes in interest rates. For every 100 basis points increase in Term SOFR, we would incur an incremental $1.0 million in interest expense per year, excluding any impact offset from the interest rate cap agreement. To reduce our exposure to market risks from increases in interest rates on our variable rate indebtedness we have entered into hedging arrangements in the form of interest rate cap agreements. As further discussed in “Note 8. Long-Term Debt” included in the Notes to the Consolidated Financial Statements in this Quarterly Report, prior to December 31, 2024, an interest rate cap agreement provided us with interest rate protection in the event the one-month Term SOFR rate increases above 1.78%. In January 2025, upon the expiration of the prior agreement, we entered into a new interest rate cap agreement with a notional value of $50.0 million, which provides us with interest rate protection in the event that the Term SOFR rate exceeds 5.00%. This interest rate cap agreement will expire in June 2026.28

In the normal course of business, we employ established policies and procedures to manage our exposure to changes in interest rates. For every 100 basis points increase in Term Secured Overnight Financing Rate, we would incur an incremental $900,000 in interest expense per year, excluding any impact offset from the interest rate cap agreement.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of ~~September~~March 3031, ~~2025~~2026. Based upon the evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of ~~September~~March 3031, ~~2025~~2026.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we have been and may be involved in various legal proceedings. We currently have no material legal proceedings pending.

Item 1A. Risk Factors

An investment in our stock involves a high degree of risk. You should carefully consider the risks set forth in the “Risk Factors” section of our Annual Report and the other information set forth in this Quarterly Report on Form 10-Q, our Annual Report, and the additional information in the other reports we file with the SEC. If any of the risks contained in those reports actually occur, our business, results of operation, financial condition, and liquidity could be harmed, the value of our securities could decline, and you could lose all or part of your investment. ~~With~~There ~~the exception of the following, there~~ have been no material changes in the risk factors set forth in the “Risk Factors” section of our Annual Report.

Enrollments and course registrations may be adversely affected by a variety of factors not directly related to education programs, including the current government shut down as well as changes in military activity and budgets.29

Events not directly related to education programs, including the current government shutdown, personnel reductions, or a drawdown of U.S. active-duty military forces could lead to a reduction in enrollments and course registrations. For example, Congressional inaction on budgetary matters has led to lapses in funding or has resulted government shutdowns, and policy changes have affected federal student aid programs at the U.S. Department of Defense, or DoD. As discussed in greater detail above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Legislative and Regulatory Activity – U.S. Federal Government Shutdown”, on October 1, 2025, the U.S. federal government shut down due to failure by Congress to pass appropriations legislation, resulting in, among other things, the temporary suspension of DoD

tuition assistance, or TA, programs. However, as the government shutdown’s duration, the scope and effectiveness of mitigation measures we have implemented or may still implement, and the aggregate amount and timing of disbursement of OBBBA TA Funds (and other TA funds, if any) is unknown, we are unable to fully predict the impact the shutdown may have on our operating results. However, the shutdown has had, and may continue to have, an adverse impact on APUS’s and our course registrations, cash flows, results of operations, and financial condition.

There are risks associated with the Combination, including with respect to the anticipated timeline.

We previously disclosed that we had anticipated completing the Combination in the third quarter of 2025 subject to obtaining required approvals and ED taking related actions. At its June 2025 meeting, HLC approved the Combination and continuation of accreditation upon implementation of the related transactions. However, as discussed in greater detail above under “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – The Planned Combination of APUS, RU, and HCN”, ED is requiring us to follow a different process to implement the Combination. As a result of this process change, APUS and RU submitted a new joint application for Change of Control, Structure or Organization to HLC containing substantially the same information that had been submitted previously and reflecting the two-step process. HLC is expected to review this submission at its February 2026 board meeting. We currently expect implementation to be complete by the beginning of the third quarter of 2026, but there can be no assurances of this timing.

For additional information regarding risks related to the Combination, see our Form 10-K and the Risk Factor in that Form 10-K with the caption beginning “The planned combination of APUS, RU, and HCN….”

The postsecondary education regulatory environment has changed and may change in the future as a result of U.S. federal elections.

Changes in Presidential administrations and control of Congress as a result of the outcome of elections or other events has in the past resulted and could in the future result in changes in or new legislation, appropriations, regulations, standards, policies and enforcement actions that could materially affect our business, including material consequences for our institutions’ accreditation, authorization to operate in various states, permissible activities, receipt of funds under student financial assistance programs, and cost of doing business. The Trump administration and current Congress may act to change or eliminate education-related legislation and ED regulations, to enact new legislation to alter existing regulations, and to change existing ED policies and practices with respect to matters related to postsecondary education institutions.

President Trump and members of his administration have also stated that the administration intends to dismantle ED, limiting its functions to only those that are statutorily required or transferring oversight of certain functions to other agencies. On March 11, 2025, ED announced a reduction in force, or RIF, effective March 21, 2025, resulting in office, staff, and program cuts. ED has claimed the RIF will not directly impact students and families and will empower states and localities. On May 22, 2025, a federal judge ordered ED to reverse the RIF, which order ED has appealed. On July 14, 2025, the order was stayed by the U.S. Supreme Court pending disposition of the appeal, thus allowing the RIF to proceed. Relatedly, on March 20, 2025, President Trump signed an Executive Order titled “Improving Education Outcomes by Empowering Parents, States, and Communities”, or the Executive Order, which, among other things, instructed the Secretary of Education to facilitate the closure of ED and maintain certain services, programs, and benefits, including student loans and Pell grants. We cannot predict the extent to which the RIF or the Executive Order will impact our results of operations and business, including as it relates to the Combination.

There have been additional layoffs at ED during the government shutdown that began October 1, 2025, but we cannot predict what additional actions the Trump administration will take with respect to the operations of ED or the response of the staff of ED to any such actions. We also cannot predict the extent to which the Trump administration and Congress, or any future administration or Congress, will act to change or eliminate or to implement new laws, regulations, standards, policies, and practices, nor can we predict the form that new laws, regulations, standards, policies, or practices may take or the extent to which those regulations, practices or policies may impact us or our institutions or federal funds disbursed to schools through Title IV programs or TA, nor can we predict whether any challenges to actions taken by the Trump administration will be successful. For example, even without changes being made to Title IV programs, more general changes or uncertainty at ED could cause disruptions or delays in the processing of Title IV or other necessary interactions with ED. Significant changes to ED or to federal regulation of higher education could have a material adverse impact on our enrollment, revenue, results of operations, and financial condition.

The OBBBA may adversely impact us or our students’ ability to participate in federal student financial aid programs, which could have a significant adverse impact on enrollments and our business, operations, and financial results.

As discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Legislative and Regulatory Activity– The One Big Beautiful Bill Act”, President Trump recently signed into law the OBBBA, which, among other things, makes significant changes to federal student financial aid programs and eligibility requirements for such programs. New caps on federal loans for graduate and professional students and parents of undergraduates may limit borrowing options for our students and the accountability framework and related earnings test may limit the availability of certain programs due to a potential loss of Federal Direct Loan eligibility. These changes may impact our students’ ability to participate in federal student loan programs, which may have a significant adverse impact on enrollments and our business, operations, and financial results. ED is scheduled to conduct negotiated rulemaking related to OBBBA provisions, and we cannot predict the timing or outcome of those negotiations or the rulemaking process.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases

The table and footnotes below provide details regarding our repurchase programs (unaudited):

	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (12)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)(3)
July 1, 2025	—	—		—	579,579	5,979,687
January 1, 2026	—	—		—	—	5,979,687
July 1, 2025 - July 31, 2025	—	—		—	585,438	5,979,687
January 1 - January 31, 2026	—	—		—	66,582	5,979,687
August 1, 2025 - August 31, 2025	—	—		—	604,111	5,979,687
February 1 - February 28, 2026	—	—		—	297,411	5,979,687
September 1, 2025 - September 30, 2025	—	—		—	604,111	5,979,687
March 1 - March 31, 2026	17,840	56.07		17,840	—	48,999,720
Total	—17,840	—$	56.07	—17,840	~~604,111~~—	$	548,~~979~~999,~~687~~720

(1)On ~~December~~March 910, ~~2011~~2026, our Board ~~of Directors, or Board,~~ approved a common stock repurchase program ~~for~~of ~~our common stock, under which we could annually purchase~~ up to ~~the cumulative number of shares issued or deemed issued in each year under our equity incentive and stock purchase plans~~$50.0 ~~Repurchases~~million ~~may be made from time to time~~ in the ~~open market at prevailing market prices or in privately negotiated transactions based on business and market conditions~~aggregate. ~~The~~This ~~stock repurchase~~ program ~~does~~replaces ~~not~~the ~~obligate~~prior ~~us to~~ repurchase ~~any~~authorizations ~~shares,~~described ~~may~~in befootnotes ~~suspended~~3 ~~or discontinued at any time,~~ and is4 ~~funded~~of ~~using~~this ~~our available cash~~table.

(2)On ~~May~~December 29, ~~2019~~2011, our Board ofapproved ~~Directors~~a ~~authorized the repurchase of up to $35.0 million of shares of our~~ common stock, ~~and~~repurchase onprogram ~~December~~under 5,which ~~2019,~~we ~~our~~could ~~Board~~annually ~~approved~~purchase ~~an additional authorization of~~ up to ~~$25.0~~the ~~million~~cumulative ofnumber ~~shares. On November 27, 2023, our Board approved an additional authorization~~ of ~~up to $10.0 million of~~ shares. Weissued ~~may~~or ~~purchase~~deemed ~~shares~~issued ~~at management’s discretion~~ in ~~the~~that ~~open~~year market, in privately negotiated transactions, in transactions structured through investment banking institutions, or a combination of the foregoing. We may from time to time enter into Rule 10b5-1 plans to facilitate repurchases of shares under ~~this~~our ~~authorization.~~equity ~~The~~incentive ~~amount~~ and ~~timing of repurchases are subject to a variety of factors, including liquidity, cash flow,~~ stock ~~price,~~purchase ~~and general business and market conditions~~plans. ~~We have no obligation to repurchase shares and may modify, suspend, or discontinue the repurchase program at any time.~~ The authorization under this repurchase program iswas terminated in ~~addition~~connection towith our ~~repurchase~~March ~~program~~2026 ~~under which we may annually~~ purchase upauthorization toas ~~the~~described ~~cumulative number of shares issued or deemed issued~~ in ~~that~~footnote ~~year~~2 ~~under~~of ~~our~~this ~~equity incentive and stock purchase plan~~table.

(3)~~During~~On ~~the~~May ~~three months ended September 30~~2, ~~2025~~2019, weour ~~were~~Board ~~deemed~~approved toa ~~have~~common ~~repurchased~~stock ~~6,882~~repurchase ~~shares~~program of ~~common~~up ~~stock~~to ~~forfeited~~$35.0 bymillion, ~~employees~~and toon ~~satisfy~~December ~~minimum~~5, ~~tax-withholding~~2019, ~~requirements~~our inBoard ~~connection~~approved ~~with~~an ~~the~~additional ~~vesting~~authorization of ~~restricted~~up ~~stock~~to ~~grants~~$25.0 ~~These~~million. ~~repurchases~~Further, ~~were~~on ~~not~~November ~~part~~27, 2023, our Board approved an additional authorization of ~~the~~up ~~stock~~to ~~repurchase~~$10.0 million. The authorization under this program ~~authorized~~was byterminated in connection with our ~~Board~~March 2026 purchase authorization as described in ~~footnotes~~footnote ~~1 and~~ 2 of this table.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

During the three months ended ~~September~~March 3031, ~~2025~~2026, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, except as described in the table below.

Name and Title

Date Adopted

Character of trading Agreement

Aggregate Number of Shares of Common Stock to be (Sold) Purchased Pursuant to Trading Agreement

Duration

Thomas A. Beckett

SVP, General Counsel and Secretary

Modification (March 16, 2026) (1)

Rule 10b5-1 Trading Arrangement

Up to (14,000) (2)

12/31/2026 (3)


(1) On March 16, 2026, Mr. Beckett modified his Rule 10b5-1 trading arrangement adopted on November 24, 2025, or the Original Beckett Arrangement. A description of the material terms of the Original Beckett Arrangement is incorporated herein by reference from the Annual Report. The modification constituted a termination of the Original Beckett Arrangement and the adoption of a new Rule 10b5-1 trading arrangement, or the Modified Beckett Arrangement, pursuant to Rule 10b5-1 under the Exchange Act. Sales under the Modified Beckett Arrangement will not begin until expiration of the applicable 90-day cooling-off period, or June 15, 2026.
(2) The figure presented represents shares to be sold upon the vesting of equity awards. The actual number of shares under the Modified Beckett Arrangement may be different than the aggregate number of shares listed due to tax withholdings.
(3) The Modified Beckett Arrangement will expire upon the earlier to occur of the completion of all eligible sales during the final sale period from December 15, 2026, through December 31, 2026, and December 31, 2026.

Item 6. Exhibits

Exhibit No.			Exhibit Description
31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)
10.1*			Credit Agreement, dated March 9, 2026, by and among American Public Education, Inc., the Guarantors, the Lenders and Issuing Lenders from time to time party thereto, and PNC Bank, National Association (1)
31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (1)
10.2*			Security and Pledge Agreement, dated March 9, 2026, by and among American Public Education, Inc., the Obligors party thereto, and PNC Bank, National Association (1)
32.1			Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)
31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (2)
31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (2)
32.1			Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3)
EX-101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
EX-101.SCH			Inline XBRL Taxonomy Extension Schema Document
EX-101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
EX-101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
EX-101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
EX-101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

(1)			Filed herewith.
*			Portions of this exhibit have been redacted or omitted in compliance with Regulation S-K Item 601(b) and will be furnished supplementally upon request to the SEC.
(2)			Furnished herewith.
(1)			Incorporated by reference to exhibit filed with Registrant’s Annual Report on Form 10-K (File No. 001-33810), filed with the SEC on March 12, 2026.
(2)			Filed herewith.
(3)			Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

						AMERICAN PUBLIC EDUCATION, INC.
			/s/ Angela Selden			~~November~~May 1011, ~~2025~~2026
			Angela Selden
			President and Chief Executive Officer
			(Principal Executive Officer)
			/s/ Edward H. Codispoti			~~November~~May 1011, ~~2025~~2026
			Edward H. Codispoti
			Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and Principal Accounting Officer)

4633

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