Executive Summary

APEI delivered a clean top- and bottom-line beat: revenue $164.6M (+6.6% YoY) and diluted EPS $0.41 vs a loss in Q1’24; management raised FY25 net income and Adjusted EBITDA guidance while keeping revenue unchanged, citing strong enrollment and operating leverage at Rasmussen .
Versus S&P Global consensus, APEI beat Q1’25 revenue by ~$2.8M and Primary EPS by ~$0.48, aided by APUS registrations, Rasmussen retention, and ~$1.4M expense timing shift to Q2; management also embedded a Q2 preferred redemption premium and combination costs into outlook .
Guidance: FY25 net income to $23–30M (raised from $19–26M) and Adj. EBITDA to $77–87M (from $75–85M); FY25 revenue unchanged at $650–660M; Q2 guide includes expected GAAP diluted EPS loss from redemption premium and integration costs .
Catalysts: confirmation of preferred redemption and HLC progress on consolidating APUS/Rasmussen/Hondros; sustained Rasmussen enrollment/EBITDA improvement; watch GSUSA headwinds tied to federal priorities (DOGE), which capped revenue guidance upside .

What Went Well and What Went Wrong

What Went Well
- Broad-based strength: revenue grew 6.6% YoY to $164.6M with contributions from APUS (+$3.3M), Rasmussen (+$6.1M), and Hondros (+$1.2M) .
- Profitability inflection: diluted EPS rose to $0.41 (from -$0.06), Adjusted EBITDA to $21.2M (+25% YoY), with management citing APUS registrations, Rasmussen retention, and disciplined costs; Adj. EBITDA margin expanded to ~12.9% .
- Rasmussen leverage: total enrollment +7.4% YoY to ~14,500; delivered ~$2.1M EBITDA vs a loss in Q1’24, and management sees ~60% flow-through on incremental revenue .
- Quote: “We exceeded…first quarter largely due to strong enrollment trends at Rasmussen…beginning to show the operating leverage benefits of greater enrollment and disciplined operations.” — CEO Angela Selden .
What Went Wrong
- GSUSA (Graduate School) headwinds: rising uncertainty around federal training demand (DOGE) led management to keep FY revenue unchanged despite raising profit metrics and to “explore the best path forward” for GSUSA .
- Q2 optics: guidance embeds ~$2.9M preferred redemption premium and ~$1.7M combination costs, driving a guided GAAP diluted EPS loss in Q2 despite healthy underlying operations .
- Mixed HCN profitability: despite +~10% enrollment (~3,600), HCN posted a small EBITDA loss, with mix shifting toward shorter LPN programs; management expects the APUS/Rasmussen/Hondros consolidation to broaden longer-duration offerings at HCN .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($M)	$153.1	$164.1	$164.6
Diluted EPS ($)	$0.04	$0.63	$0.41
Net income available to common ($M)	$0.731	$11.505	$7.461
Adjusted EBITDA ($M)	$12.9	$31.4	$21.2

Q1 2025 YoY:

Revenue +6.6% YoY; diluted EPS improved from ($0.06) to $0.41; Adjusted EBITDA +~$4.2M YoY .

Consensus vs. actual (S&P Global):

Q1 2025 Revenue: $161.733M* est vs $164.551M actual → Beat ~$2.8M (1.7%)*
Q1 2025 Primary EPS: $0.14* est vs $0.618* actual → Beat ~$0.48*
Q4 2024 Revenue: $161.700M* est vs $164.110M actual → Beat ~$2.41M*
Q4 2024 Primary EPS: $0.53* est vs $0.781* actual → Beat ~$0.25*
Q3 2024 Revenue: $153.650M* est vs $153.122M actual → Miss ~$0.53M*
Q3 2024 Primary EPS: $0.01* est vs $0.172* actual → Beat ~$0.16*
Values retrieved from S&P Global.

Segment breakdown (Q1 2025 vs Q1 2024):

Segment	Revenue Q1 2024 ($M)	Revenue Q1 2025 ($M)	Op Inc (EBIT) Q1 2024 ($M)	Op Inc (EBIT) Q1 2025 ($M)
APUS	$80.656	$83.946	$23.087	$24.126
Rasmussen (RU)	$53.135	$59.251	($8.966)	($0.072)
Hondros (HCN)	$16.447	$17.676	($0.304)	($0.746)
Corporate & Other	$4.194	$3.678	($8.635)	($11.062)

KPIs (enrollment/registrations momentum)

KPI	Q3 2024	Q4 2024	Q1 2025
APUS Net Course Registrations	92,500	97,100	102,500
Rasmussen Total Student Enrollment	13,500	14,600	14,500
Hondros Total Student Enrollment	3,100	3,700	3,600

Balance sheet/liquidity highlights:

Cash, cash equivalents and restricted cash: $187.5M at 3/31/25 vs $158.9M at 12/31/24 (+$28.6M) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Revenue ($M)	FY 2025	$650–$660	$650–$660	Maintained
Net income avail. to common ($M)	FY 2025	$19–$26	$23–$30	Raised
Adjusted EBITDA ($M)	FY 2025	$75–$85	$77–$87	Raised
CapEx ($M)	FY 2025	$18–$22	$18–$22	Maintained
Consolidated Revenue ($M)	Q2 2025	N/A	$160–$162	New
Net loss/income avail. to common ($M)	Q2 2025	N/A	($2.5)–($0.7)	New
Adjusted EBITDA ($M)	Q2 2025	N/A	$11.5–$14.0	New
Diluted EPS ($)	Q2 2025	N/A	($0.13)–($0.04)	New
APUS Net Course Registrations	Q2 2025	N/A	93,500–96,100 (+4–7% YoY)	New
RU Total Student Enrollment	Q2 2025	N/A	~14,600 (+8% YoY)	New
HCN Total Student Enrollment	Q2 2025	N/A	~3,700 (+14% YoY)	New

Guidance context and mechanics:

Q2 net income guide includes ~$2.9M preferred redemption premium and ~$1.7M combination costs; FY net income assumes preferred redemption in Q2 (reducing 2025 dividends by ~$3M and by ~$6M annually thereafter) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Rasmussen turnaround & leverage	Q3: first positive YoY enrollment since acquisition ; Q4: positive EBITDA and enrollment growth; 2H’24 adj. EBITDA positive	Q1: total enrollment +7.4% YoY to ~14,500; EBITDA ~$2.1M; ~60% revenue flow-through to EBITDA	Improving
APUS registrations & TA portal	Q4 guide flagged 2-week TA outage impact for Q1	Outage impact minimal; APUS registrations +3.5% YoY; Q2 guide +4–7% YoY	Improving
GSUSA (Graduate School) headwinds	Q4: stable but small EBITDA loss and budget risk cited	DOGE-driven uncertainty; kept FY revenue unchanged; evaluating GSUSA options	Deteriorating
Institutional consolidation (APUS/RU/HCN)	Announced in Jan; targeting 4Q’25 close	HLC review on June agenda; $4–5M FY25 combo costs; synergy categories outlined	Progressing
Capital structure (preferred redemption)	Intend to redeem by end Q2’25	Q2 guide includes redemption premium; accretive to EPS long term	Progressing
AI/Tech initiatives	—	Targeting AI to reduce development and operating costs; redeploying tech spend for higher ROI	Emerging

Management Commentary

“We exceeded the expectations we set forth for the first quarter largely due to strong enrollment trends at Rasmussen which are beginning to show the operating leverage benefits of greater enrollment and disciplined operations.” — CEO Angela Selden .
“Adjusted EBITDA margin expanded by nearly 200 bps to 12.9%...outperformance to guidance was due in part to military registrations at APUS, student retention at Rasmussen and the timing of approximately $1.4 million of expenses.” — CFO Rick Sunderland .
“We intend to redeem our preferred shares prior to the end of the second quarter…saving approximately $6 million in dividend expense annually beginning in 2026.” — CEO Angela Selden .
“We have closed some underperforming campuses…two corporate buildings held-for-sale with anticipated net proceeds of more than $20 million…expected to close in Q3 ’25.” — CEO Angela Selden ; CFO: proceeds ~ $22M .
On consolidation synergies: Hondros to access Rasmussen’s post-licensure nursing and broader online catalog; cost synergies primarily in selected leadership/academic alignment initially .

Q&A Highlights

GSUSA/DOGE: Management cannot provide granular EBITDA guidance for GSUSA; FY25 Adj. EBITDA and revenue guidance already assume a conservative GSUSA outlook; exploring strategic options .
TA portal impact: Minimal effect on APUS Q1; sequential improvement implied in Q2 registration guide; margin impact negligible .
Q2 optics: Q2 net loss guide reflects ~$2.9M redemption premium and ~$1.7M combination costs; not included in Adj. EBITDA .
Rasmussen profitability drivers: ~60% revenue flow-through; marketing effectiveness (organic leads, hyperlocal tactics), class capacity optimization, campus program mix tweaks .
CapEx cadence: FY25 $18–22M unchanged; quarterly phasing variable by facilities/IT timing .

Estimates Context

S&P Global consensus vs. results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue Consensus Mean ($M)	153.650*	161.700*	161.733*
Revenue Actual ($M)	153.122	164.110	164.551
Primary EPS Consensus Mean ($)	0.01*	0.53*	0.14*
Primary EPS Actual ($)	0.1717*	0.7811*	0.6180*

Values retrieved from S&P Global.
Notes: Company-reported GAAP diluted EPS were $0.04 (Q3’24), $0.63 (Q4’24), and $0.41 (Q1’25) . S&P “Primary EPS” actuals reflect S&P methodology and may differ from reported GAAP.

Implications: Street models likely move higher on FY25 net income/Adj. EBITDA raises and visible enrollment momentum at Rasmussen; headline Q2 GAAP loss should be understood as one-time redemption/integration costs rather than operational deterioration .

Key Takeaways for Investors

Broad-based beat with raised profit guidance underscores operating leverage—especially at Rasmussen—as enrollment momentum builds; APUS remains a stable growth engine with minimal TA outage impact .
Expect transient Q2 GAAP optics (EPS loss) due to preferred redemption premium and consolidation costs; underlying Adj. EBITDA remains solid per guide .
Consolidation of APUS/RU/HCN is on track (HLC June agenda) and should enable cross-selling and longer-duration program mix at HCN; modest near-term cost synergies, larger revenue opportunities medium term .
GSUSA headwinds are the primary offset to otherwise improving fundamentals; management is conservatively modeling revenue and evaluating options .
Balance sheet strength (cash $187.5M) and anticipated building sale proceeds (~$22M) support flexibility; preferred redemption simplifies capital structure and is EPS-accretive long term .
Trading setup: near-term volatility around Q2 headline EPS loss; medium-term thesis supported by sustained Rasmussen improvement, APUS steady growth, and profit guidance raises—watch enrollment cadence and GSUSA trajectory for incremental estimate revisions .

Additional materials reviewed: Q1’25 earnings release (press release and attached financials) ; 8-K with exhibits - -; Q1’25 call transcript -; prior quarter releases/transcripts for trend context - - -; Q1 call scheduling PR .

AMERICAN PUBLIC EDUCATION INC (APEI)·Q1 2025 Earnings Summary