American Public Education NASDAQ: APEI reported higher first-quarter 2026 revenue and profitability, raised its full-year outlook and said its newly reorganized business structure is beginning to show operating leverage.
President and Chief Executive Officer Angela Selden said total revenue rose 6.2% year over year to the high end of the company’s guidance range. Excluding the prior-year contribution from Graduate School USA, which the company sold in mid-2025, Selden said revenue would have increased 8.7%, a figure management said better reflects underlying business momentum.
Adjusted EBITDA increased 37.5% to $29.2 million, while net income per diluted common share rose to $0.94, up 129% from the prior-year period. Selden said the company is raising full-year 2026 guidance for revenue, Adjusted EBITDA and diluted EPS “given the strength of our first quarter results and our visibility into the balance of the year.”
New Segment Structure Highlights Military+ and Health+
APEI is now reporting under two business segments: Military+ and Health+. The change follows the March 2, 2026 combination of the legal entities that owned its three institutions. Prior-period results have been recast to reflect the new structure.
Selden said Health+ revenue grew 11% in the quarter, driven by 8% enrollment growth and a modest price increase. The company cited continued demand for pre-licensure nursing education and progress on campus expansion plans.
The new Rasmussen Orlando campus is enrolling students and building momentum, Selden said. The company also expects to complete the relocation of the Hondros College of Nursing Cincinnati campus in the second half of 2026, and expects a new Hondros College of Nursing Detroit campus to be ready to enroll students in the first quarter of 2027.
For the second quarter, Selden said Health+ enrollment grew 7.1%, led by high-single-digit growth in campuses and online health programs.
Military+ also delivered revenue growth and strong profitability. Selden said registration growth of 4% met guidance, with continued high-teens registration growth from military families and veterans. The segment generated an Adjusted EBITDA margin of approximately 36% in the first quarter, though she noted part of the margin strength reflected a shift in marketing spending from the first quarter to the second quarter.
Military Registrations Face Deployment-Related Headwinds
Selden said active-duty registrations grew in the mid-single digits during the first quarter. The company previously said Coast Guard registrations were affected by the government shutdown and the temporary suspension of Department of Homeland Security funding, which postponed an estimated 1% to 2% of total registrations. She said DHS education funds became available again as of April 30, with partial recovery expected in the second quarter and recovery of Coast Guard registrations expected in the third quarter and beyond.
Looking at the second quarter, Selden said Army registrations, the company’s largest branch contributor, are growing. However, that momentum is being offset by slower registrations from the Navy, Air Force and Marines. She attributed the slowdown to combat deployments related to the war in the Middle East, saying internal leave-of-absence requests citing deployment have increased for those branches.
“While Navy, Air Force, and Marine registrations are a headwind in the short term, we remain confident in our full year guidance,” Selden said. She characterized the issue as a timing dynamic rather than a structural demand problem, adding that many active-duty students historically return to their educational programs after deployment or deployment preparation.
During the question-and-answer session, Selden said the company began seeing more deployment accommodation requests with April and May starts, rather than the March start. Chief Strategy and Growth Officer Gary Janson said the company expects the second quarter to be more affected than the first, with some recovery potentially beginning in June and additional recovery in the third quarter.
Financial Results and Balance Sheet Strength
Executive Vice President and Chief Financial Officer Edward Codispoti said first-quarter revenue was $174.7 million, compared with $164.6 million a year earlier. Excluding $3.7 million in prior-year revenue from Graduate School USA, revenue would have grown 8.7%.
- Military+ revenue: $89.4 million, up 6.5% from $83.9 million in the prior-year period.
- Military+ operating income: $30.7 million, up 27% from $24.1 million.
- Military+ net course registrations: approximately 106,600, compared with 102,500 a year earlier.
- Health+ revenue: $85.4 million, up 11% from $76.9 million on a recast basis.
- Health+ operating income: $500,000, compared with an operating loss of $800,000 in the prior-year period.
Codispoti said net income available to common stockholders was $17.7 million, or $0.94 per diluted share, compared with $7.5 million, or $0.41 per diluted share, in the prior-year period. He said results benefited from an 8% effective tax rate, driven primarily by higher-than-expected tax deductions related to the company’s stock price appreciation. The tax rate is expected to normalize in future quarters this year.
Adjusted EBITDA margin rose to 16.7% from 12.9%, representing 381 basis points of year-over-year expansion. Codispoti noted that the prior-year period included a Graduate School USA Adjusted EBITDA loss of approximately $2.2 million that did not recur.
APEI ended the quarter with cash, cash equivalents and restricted cash of $221 million, up from $176.5 million at year-end 2025. Debt under the company’s credit agreement declined to $90 million from $96.4 million. Codispoti said the company had excess cash over debt of $131 million, compared with $80.1 million at year-end.
In March, the company refinanced its debt, reducing its borrowing rate by about 375 basis points and lowering principal to $90 million. The company also repurchased approximately 17,840 shares for about $1 million under a $50 million share repurchase program authorized in March.
Guidance Raised for 2026
APEI issued second-quarter 2026 guidance and raised its full-year outlook. For the second quarter, the company expects revenue of $170 million to $172 million, net income available to common stockholders of $6.5 million to $7.5 million, Adjusted EBITDA of $16.5 million to $18 million and diluted EPS of $0.34 to $0.39.
For full-year 2026, the company now expects:
- Revenue: $686 million to $696 million, up from prior guidance of $685 million to $695 million.
- Net income available to common stockholders: $44.9 million to $51.6 million, up from $41.3 million to $47.6 million.
- Adjusted EBITDA: $93 million to $102 million, up from $91.5 million to $100.5 million.
- Diluted EPS: $2.33 to $2.68, up from $2.15 to $2.47.
- Capital expenditures: $28 million to $32 million, unchanged.
Selden said APEI remains focused on the four-year plan outlined at its November 2025 Investor Day, including targeting organic revenue of $890 million to $925 million by 2029 and Adjusted EBITDA margins of 20% to 21%. She said strategic investments in new campuses and possible tuck-in acquisitions could create a path to $1 billion in revenue by 2029.
Institutional Combination and Growth Investments
APEI received approval from the Higher Learning Commission on April 28 to consolidate APUS, Rasmussen and Hondros College of Nursing programs, locations and operations into a single accredited institution operating as the American Public University System. Selden said the remaining step is approval from the Department of Education and completion of the OPEID merger, which the company continues to target for the beginning of the third quarter of 2026.
In response to an analyst question, Selden said the combination is not expected to produce significant financial improvements in the second half of 2026 because the company already operates with a shared services structure. She said the main benefits are expected to be revenue synergies beginning in 2027, including bringing Rasmussen’s expanded program offerings to Hondros campuses and cross-pollinating more Rasmussen programs across existing campuses.
On capital allocation, Selden said the company is investing in growth across its existing businesses, including additional marketing in Military+ and technology platform work tied to the nursing school combination. She said new campuses and tuck-in acquisitions remain a main focus. Janson said acquisition criteria include entering states where APEI does not currently operate, with a current focus on the Midwest and East Coast, contiguous markets and areas with healthcare supply-demand imbalances.
“The foundation is built, the business is simplified, the balance sheet is strong, and quarter after quarter, we are doing what we said we would do,” Selden said.
About American Public Education NASDAQ: APEI
American Public Education, Inc operates as a provider of online postsecondary education, offering degree and certificate programs through its wholly owned subsidiary, American Public University System (APUS). The company designs and delivers a broad range of undergraduate and graduate programs in fields such as business administration, information technology, criminal justice, homeland security, health sciences, and education. Its curriculum is developed to meet the needs of working adults, military personnel, veterans and civilian students seeking flexible, career-relevant learning opportunities.
APUS is regionally accredited by the Middle States Commission on Higher Education and employs a proprietary online learning platform that supports asynchronous instruction, digital course materials and interactive learning tools.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.
Before you consider American Public Education, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and American Public Education wasn't on the list.
While American Public Education currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
View The Five Stocks Here
Just getting into the stock market? These 10 simple stocks can help beginning investors build long-term wealth without knowing options, technicals, or other advanced strategies.
Get This Free Report
