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Introduction & Market Context
American Public Education , Inc. (NASDAQ:APEI) presented its second quarter 2025 earnings results on August 6, 2025, highlighting revenue growth and improved operational performance across its educational institutions. The company’s stock closed at $30.52 prior to the earnings release, representing a 3.21% increase, and has shown significant momentum over recent months.
The education provider continues to benefit from strong enrollment trends in its military, veteran, and healthcare programs, while simultaneously implementing strategic initiatives to streamline operations and strengthen its financial position.
Quarterly Performance Highlights
APEI reported Q2 2025 revenue of $162.8 million, representing a 7% year-over-year increase. The company posted a narrow net loss available to common stockholders of $0.3 million, a significant improvement from the $1.2 million loss in the same period last year. Diluted earnings per share came in at ($0.02), compared to ($0.06) in Q2 2024.
Adjusted EBITDA showed substantial growth, reaching $15.1 million, a 38% increase year-over-year, while cash holdings grew to $176.6 million, up 13% from the prior year.
As shown in the following executive summary from the presentation:
Enrollment figures were particularly strong across all educational segments. American Public University System (APUS) increased net course registrations by 7.3% year-over-year, while Rasmussen University saw enrollment rise by 10.4%, marking its fifth consecutive quarter of year-over-year growth. Hondros College of Nursing (HCN) continued its impressive performance with enrollment up 17.6%.
The following slide illustrates the registration and enrollment trends across APEI’s educational institutions:
Strategic Initiatives
A key focus of APEI’s presentation was its ongoing strategic simplification efforts. The company is consolidating APUS, Rasmussen, and HCN into a single university system to improve operational efficiency and reduce costs. This includes closing and consolidating campuses and corporate centers, with APUS/APEI corporate buildings sold in June 2025.
Additionally, APEI completed the early redemption of preferred equity and secured the release of a $24.5 million letter of credit, enhancing its financial flexibility. The company also finalized the sale of Graduate School USA on July 25, 2025, further streamlining its operations.
These strategic initiatives are detailed in the following slide:
Segment Performance
APEI’s military and veteran enrollment at APUS continues to show consistent growth over the past two years. The company has successfully implemented select tuition and fee increases in 2024 while maintaining strong registration numbers.
The following chart demonstrates the steady growth in military and veteran enrollments:
In the healthcare segment, both Rasmussen and Hondros College of Nursing have demonstrated strong performance. Rasmussen has achieved five consecutive quarters of year-over-year enrollment growth, with positive campus enrollment growth in Q1, Q2, and Q3 of 2025. HCN has delivered consistent double-digit enrollment growth, as illustrated in this slide:
From a revenue perspective, each segment showed improvement. APUS generated $81.7 million in Q2 2025, up from $79.4 million in Q2 2024. Rasmussen’s revenue grew 12% to $59.5 million, compared to $52.6 million in the prior year. HCN’s revenue increased 10.5% to $18.1 million from $15.8 million in Q2 2024.
Profitability metrics also improved across segments. APUS achieved a 27% EBITDA margin on its Q2 2025 revenue. Rasmussen delivered $0.2 million of EBITDA in Q2 2025, a significant improvement from a $4.7 million loss in Q2 2024. Similarly, HCN generated $0.1 million in EBITDA, compared to a $0.4 million loss in the same period last year.
Financial Position & Guidance
APEI’s balance sheet continues to strengthen, with $176.6 million in cash as of June 30, 2025, up from $156.2 million in 2024. Unrestricted cash, net of debt, increased to $80.9 million from $37.0 million in the prior year. For the first six months of 2025, the company generated net income available to common stockholders of $7.1 million, compared to a loss of $2.2 million in 2024, and free cash flow of $28.7 million, up from $16.6 million.
Looking ahead, APEI provided guidance for both Q3 2025 and the full year. For Q3, the company expects revenue between $159-$161 million and adjusted EBITDA of $15-$17 million. Full-year 2025 guidance includes revenue of $650-$660 million (4-6% higher than 2024), net income of $18-$24 million, and adjusted EBITDA of $81-$88 million (12-22% higher than 2024).
The guidance details are presented in the following slide:
It’s worth noting that the full-year net income guidance includes the loss on the sale of GSUSA and represents a downward revision from the $23-$30 million range provided in the previous quarter.
Forward-Looking Statements
APEI highlighted several investment considerations in its presentation, including its large addressable market, solid return on investment for education, improving performance and operating leverage, and ongoing business simplification efforts.
The company expects free cash flow to be $59-$70 million in 2025, supported by the $24.5 million of restricted cash released in Q2. APEI’s strong cash position and improving operational metrics position it well for continued growth, particularly in its military and healthcare education segments.
As shown in the investment highlights slide:
While APEI faces challenges including the integration of its educational institutions and potential economic uncertainties affecting enrollment, the company’s Q2 2025 results demonstrate progress in its strategic initiatives and financial performance. Investors will be watching closely to see if APEI can maintain its enrollment momentum and successfully complete its consolidation efforts to drive further margin improvement in the coming quarters.
Full presentation:
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