American Public Education NASDAQ: APEI raised its full-year 2026 financial outlook after third-quarter revenue and earnings exceeded management’s guidance, as growth in nursing and military-affiliated programs helped offset higher marketing expenses and a revenue timing shift.
The education company reported third-quarter revenue of $169.1 million, up 3.6% from a year earlier and above its guidance range of $164.5 million to $167 million. Net income available to common stockholders rose to $5.9 million, or $0.32 per diluted share, from $5.6 million, or $0.30 per share.
Adjusted EBITDA fell to $17.5 million from $20.7 million, although it exceeded the company’s guidance range of $14 million to $17 million. The adjusted EBITDA margin declined to 10.4% from 12.7%.
President and CEO Angela Selden said the decline in adjusted EBITDA and margin had been anticipated, reflecting increased selling and promotion expenses, marketing optimization investments and a shift of revenue into the fourth quarter. The company also reported higher bad debt expense, partly tied to delays in federal financial aid disbursements following its institutional combination.
Health+ Growth Offsets Military+ Timing Shift
Health+ revenue increased 9% to $86.4 million, driven by growth in campus nursing and a modest tuition increase in the second half of 2025. Selden said online healthcare revenue also grew at a mid-teens rate. The segment’s operating loss narrowed to $1.9 million from $2.1 million.
Military+ revenue slipped to $82.7 million from $83.1 million, as approximately $6 million in revenue shifted from the third quarter to the fourth because of the timing of course starts. Chief Financial Officer Edward Codispoti said approximately $4 million of adjusted EBITDA also shifted between quarters.
Military+ net course registrations rose 3.8% to approximately 103,800, above the company’s guidance range of 101,000 to 103,000. Selden said registrations among veterans and military families grew at double-digit rates, while active-duty registrations returned to growth, led by the Army.
Selling and promotional expenses increased to $41.8 million, or 24.7% of revenue, from $36.1 million, or 22.1% of revenue, a year earlier. General and administrative expenses rose to $39.3 million from $34.7 million, primarily because of higher bad debt and professional services costs related to marketing optimization.
Full-Year Guidance Raised
American Public Education increased its full-year revenue forecast to $695 million to $701 million from $690 million to $698 million. Its revised outlook also calls for:
- Net income available to common stockholders of $48.5 million to $53.2 million, up from $46.5 million to $52.5 million.
- Adjusted EBITDA of $98 million to $105 million, up from $96 million to $104 million.
- Diluted earnings per share of $2.59 to $2.84, up from $2.48 to $2.79.
For the fourth quarter, the company forecast revenue of $179.4 million to $185.4 million and adjusted EBITDA of $30.6 million to $37.6 million. It expects Military+ net registrations of 100,000 to 105,000, an increase of 21.7% to 27.7% from a year earlier, when a partial federal government shutdown affected results.
Management projected Health+ enrollment of approximately 20,100, up about 1%. Chief Strategy and Growth Officer Gary Janson said weakness in non-healthcare online programs was weighing on the overall enrollment figure, while campus and online health programs continued to perform well.
Combination, Campus Plans and Cash Returns
The third quarter marked the beginning of the company’s operations as a single institution accredited by the Higher Learning Commission. Selden said the combination is expected to produce $5 million in annual recurring savings from the integration of Rasmussen University and Hondros College of Nursing in 2027 and beyond, and $9 million in annual recurring savings across Health+ and Military+ in 2028 and beyond. Both targets are included in the company’s existing four-year plan.
Selden said a second Detroit campus is expected to begin educating students in the second quarter of 2027 rather than the first, after the accreditor required a separate approval following the combination. A Fort Lauderdale campus remains on schedule to open in the fourth quarter of 2027. The company continues to target two new smaller-footprint campuses annually over the next four years.
In response to an analyst’s question about delayed financial aid disbursements, Codispoti said the company’s bad debt expense reflected estimates that some students could move onto payment plans if processing was not completed quickly enough. Janson said the underlying system challenges had been resolved, but the time taken to resolve them delayed processing.
The company repurchased 186,032 shares for approximately $9 million during the quarter, bringing year-to-date purchases to about $14 million. Approximately $36 million remained under its $50 million repurchase authorization. Cash, restricted cash and short-term investments totaled $216.4 million at September 30, while outstanding debt was $87.8 million.
About American Public Education (NASDAQ:APEI)
American Public Education, Inc NASDAQ: APEI is an education services company that provides postsecondary instruction and career-focused training through a group of institutions. Its portfolio includes American Public University System, Rasmussen University and Hondros College of Nursing.
American Public University System offers undergraduate and graduate programs primarily through online and distance-learning formats. Its institutions serve military personnel, veterans, working adults and other students, with academic offerings spanning areas such as business, public service, health care, technology, security and liberal arts.
Rasmussen University provides undergraduate and graduate education through online and campus-based programs, with a focus on health sciences, nursing, business, technology and other career-oriented fields.
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
Oil still powers the global economy, but AI is reshaping the energy opportunity. Discover seven stocks spanning traditional energy, infrastructure, and next-generation power.
Get This Free Report
Continue following MarketBeat
Add MarketBeat as your preferred source on Google to see our latest stories in your feed.
