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Date

Monday, May 11, 2026 at 5 p.m. ET

Call participants

  • President and Chief Executive Officer — Angela Selden
  • Executive Vice President and Chief Financial Officer — Edward Codispoti
  • Chief Strategy and Growth Officer — Gary Jansen

Takeaways

  • Total revenue -- $174.7 million, up 6.2%, and would have increased 8.7% excluding the divested Graduate School USA’s 2025 revenue.
  • Adjusted EBITDA -- $29.2 million, a 37.5% increase including a one-time stock appreciation tax impact in 2026 and $2.2 million Graduate School USA loss in the prior period.
  • Diluted EPS -- $0.94, up 129.3% with net income available to common stockholders of $17.7 million, rising 137.6%.
  • Military Plus revenue -- $89.4 million, up 6.5%; net course registrations were approximately 106,600, with a 4% registration growth and high-teens gains in military families and veterans.
  • Military Plus segment profitability -- Segment income from operations $30.7 million (+27%), adjusted EBITDA margin roughly 36% due to cost discipline and Q1/Q2 marketing spend timing.
  • Health Plus revenue -- $85.4 million, marking 11% growth, driven by 8% enrollment gains and a modest tuition increase; segment income from operations $500,000, up from a $800,000 prior-year loss.
  • Health Plus enrollment and expansion -- Campus and online enrollment rose 7.1% [in Q2], with new Orlando campus ramping and Cincinnati campus relocation expected in 2026; Detroit campus planned for 2027.
  • Cash position and debt -- $221.0 million in cash and equivalents, up 25% sequentially; total debt $90.0 million (down from $96.4 million), resulting in $131.0 million net cash, aided by 375 basis point refinancing.
  • Share repurchase program -- $50.0 million authorization initiated; $1.0 million used to repurchase 17,800 shares for compensation dilution management with capital return flexibility.
  • Full-year 2026 updated guidance -- Revenue $686.0 million-$696.0 million, adjusted EBITDA $93.0 million-$102.0 million, diluted EPS $2.33-$2.68, and CapEx $28.0 million-$32.0 million.
  • Q2 2026 guidance -- Revenue $170.0 million-$172.0 million, adjusted EBITDA $16.5 million-$18.0 million, EPS $0.34-$0.39 per share.
  • Institutional combination progress -- Accreditor (Higher Learning Commission) approved consolidation of APUS, Rasmussen, and Hondros under a single accredited institution, now awaiting Department of Education approval.
  • Military deployments impact -- Active duty registrations for Navy, Air Force, and Marines slowed due to Middle East deployments, partially offset by Army growth and continued high-teens family and veteran segments.
  • Strategic capital deployment -- Prioritizing investments in organic growth, technology integration, new campus openings, and evaluating tuck-in acquisitions, mainly in new and adjacent states.

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Risks

  • CEO Selden said, “Navy, Air Force, and Marine registrations are a headwind in the short term” due to Middle East deployments, with an uptick in leave-of-absence requests for those branches.
  • Military Plus EBITDA margin above long-range targets reflects shifted marketing costs; full-year margins are expected to moderate as $2.2 million incremental Q2 marketing spend is allocated to offset deployment impact.
  • Management indicated that future cohort default rates may require continued monitoring, particularly as student loan repayments resume after an extended suspension period.

Summary

American Public Education (APEI +0.12%) delivered double-digit improvements in profitability and adjusted its guidance upward across key metrics following Q1 results. The company transitioned to a new two-segment reporting structure, implemented after consolidating APUS, Rasmussen, and Hondros institutions, and received key accreditor approval with only Department of Education consent outstanding. Management highlighted enrollment momentum in Health Plus and a strong adjusted EBITDA margin in Military Plus, but acknowledged short-term active duty headwinds in select military branches due to geopolitical deployments. Capital allocation priorities include organic growth investments, accelerated campus openings, and opportunistic tuck-in acquisitions in adjacent states. The share repurchase program began targeting compensation dilution, with financial flexibility maintained by a 25% sequential increase in cash and significant debt reduction.

  • “veterans and family segments continued to demonstrate high-teens registration growth in Q2 as well,” according to CEO Selden, partially offsetting active duty deployments.
  • Chief Strategy and Growth Officer Jansen noted, “Q2 will be a pretty good indication of what the ramp rate will be” at the new Orlando campus, which introduced both a new market and nights-and-weekends Practical Nursing offering.
  • “interest income in 2026 is expected to approximate interest expense given our strong cash balances and improved borrowing rate,” CFO Codispoti said when discussing modeling assumptions post-refinance.
  • The company confirmed that most back-office functions are already centralized, so cost synergies from the institutional merger are expected to be modest initially, with revenue synergies from cross-campus program offerings anticipated beginning in 2027.
  • Referral remains the largest source for new APUS students, insulating the channel from digital search headwinds cited by industry peers, according to Selden.

Industry glossary

  • OPEID: The unique identification number assigned by the U.S. Department of Education for institutional eligibility in federal financial aid programs, relevant to school mergers and regulatory approvals.
  • Trailblazer Initiative: The company's term for its multi-campus opening strategy focused on measured geographic expansion and regulatory navigation.

Full Conference Call Transcript

Angela Selden, president and chief executive officer, Edward Codispoti, executive vice president and chief financial officer, and Gary Jansen, chief strategy and growth officer. Materials for today's call, which is being webcast and open to the public, are available in the Events and Presentations section of the American Public Education, Inc. website. Statements made during this call and in the accompanying presentation regarding American Public Education, Inc. and its subsidiaries that are not historical facts may be forward-looking statements that are based on management's current expectations, assumptions, estimates, and projections.

Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including risks related to potential impacts from government shutdowns or changing federal or state government policies, laws, practices, and actions, including impacts on revenue or the timing of receivables, and other factors identified in our Form 10-K and Form 10-Q under the heading Risk Factors and other SEC filings. Forward-looking statements may sometimes be identified by words like believe, estimate, expect, may, plan, potentially, project, target, outlook, past position, on track, on pace, should, will, would, and similar or opposite words.

Forward-looking statements include, without limitation, statements regarding expectations for registration and enrollment, revenue, earnings, adjusted EBITDA, adjusted EBITDA margin, and other earnings guidance, our foundation for growth, strategic investments, capital allocation and M&A opportunities, operational milestones and timelines, a planned combination of our institutions including the benefit and timeline thereof, governmental and regulatory actions, their impact and our response to those actions, changing market demands and our ability to satisfy such demands, and other company initiatives. As Angie will discuss, beginning with 2026, we are reporting under two new segment structures, Military Plus and Health Plus, following the merger of the legal entities that owned our institutions on 03/02/2026.

Our Form 10-Q for the first quarter reflects this change, and all prior period comparative figures have been recast to reflect the two-segment structure rather than the historical three-segment structure of APUS, Rasmussen University, and Hondros College of Nursing. The call and the presentation contain references to non-GAAP financial measures including adjusted EBITDA and adjusted EBITDA margin. A reconciliation between each non-GAAP financial measure we use and the most directly comparable GAAP measure is located in the appendix to today's presentation and in the earnings release.

Management believes that the presentation of non-GAAP financial information provides useful supplemental information to investors regarding its results of operations that should only be considered in addition to and not a substitute for or superior to any measure of financial performance prepared in accordance with GAAP. I would now like to turn the call over to American Public Education, Inc.'s President and CEO, Angela Selden. Angie, please go ahead.

Angela Selden: Thank you, Shannon. Good afternoon, and thank you very much to each of you for joining us today. I am very pleased to share American Public Education, Inc.'s first quarter 2026 results. Total revenue grew 6.2% year over year, and at the top end of our guidance range. Notably, when we exclude Graduate School USA's 2025 revenue from the prior-year period, the business that we sold in mid-2025, American Public Education, Inc.'s revenue would have grown 8.7%, which we believe is more indicative of the underlying strength of our business. Beyond revenue, we beat guidance on adjusted EBITDA, which grew to $29.2 million, a 37.5% improvement over 2025.

The prior-year period does include $2.2 million of Graduate School USA losses, and the 2026 period includes a one-time favorable impact from the tax treatment of our stock appreciation. Edward Codispoti, American Public Education, Inc.'s CFO, will discuss the details of these matters shortly. We also beat on net income per diluted common share, which was $0.94, up 129% over the prior-year period. Given the strength of our first quarter results and our visibility into the balance of the year, today we are raising our full year 2026 guidance on both revenue and adjusted EBITDA.

Importantly, we are also raising our full year EPS guidance, which at the midpoint represents an 85% increase over 2025, which is in large part a reflection of the 2025 improvements we made to the balance sheet. With those headlines, I want to provide some additional details on our two newly constituted reportable segments and an update on our institutional combination. First, as we discussed on the last earnings call, on 03/02/2026 we combined the legal entities that owned our three institutions into one. Beginning with this quarter, we report under two newly constituted reportable segments: Military Plus, no longer called APU Global, and Health Plus, no longer called RU Health Plus.

Prior period results have been recast to reflect these changes. So let us start with Health Plus. Our Health Plus institutions continue to perform very well. Health Plus revenue grew 11%, consistent with our four-year plan. This was driven by both 8% enrollment growth, which we shared on the previous earnings call, and a modest price increase, demonstrating the durability of demand for prelicensure nursing education. Our campus expansion plans continue with our new Rasmussen Orlando campus now enrolling students and building momentum in its first full quarter of operations.

Additionally, we expect to complete the relocation of the Hondros College of Nursing Cincinnati campus in 2026 to a more attractive location, and our Hondros College of Nursing new Detroit campus to be ready to enroll students in 2027. As we turn our attention to Q2 2026 Health Plus enrollment, we experienced enrollment growth of 7.1%, led by campuses and online health at high single digits. Turning to Military Plus, Military Plus delivered another quarter of revenue growth and exceptional profitability. The 4% registration growth met guidance, highlighted by the continued high-teens registration growth for both military families and veterans. The segment operated at an adjusted EBITDA margin of approximately 36% in the first quarter.

While the EBITDA margin reflected a substantial increase above our long-range targets, a portion of this outperformance was due to shifts in marketing spend between Q1 and Q2, which is also reflected in our Q2 guidance. Growth in our active duty channel in the first quarter was mid-single digits. As we described on our last earnings call, Q1 Coast Guard, the smallest enrollment contributor of the armed services branches we educate, was affected by the then ongoing government shutdown and temporary suspension of the Department of Homeland Security funding. We had estimated that about 1% to 2% of total registrations were postponed. The good news is that DHS and the corresponding education funds are now available as of April 30.

So we expect partial recovery in Q2, and we expect recovery of Coast Guard registrations in Q3 and beyond. I was very proud to have participated in American Military University and American Public University 30th annual commencement on Saturday, May 9. Over 17.7 thousand students, including 23 doctoral students in our Security and Global Studies program, received diplomas. The oldest graduate is 78 years old, and the youngest is 16. Over 92% of our graduates are active duty military, veterans, military spouses, or family members. They represented all 50 states, 30 countries, and six territories. Congratulations to all AMU and APU graduates.

As we turn our attention to Military Plus registration growth in Q2, we are experiencing growth in Army registrations, our largest enrollment branch. This momentum is being offset by a slowdown in Navy, Air Force, and Marines, which we are attributing to the nature of this war in the Middle East, which has deployed and put into combat Navy, Air Force, and Marine service members first. This has been signaled by our internal processes where our students have a mechanism to request a leave of absence accommodation and the ability to select deployment as the reason. We have seen an uptick in these requests for those three service branches.

Offsetting this interruption, our veterans and family segments continued to demonstrate high-teens registration growth in Q2 as well. So while Navy, Air Force, and Marine registrations are a headwind in the short term, we remain confident in our full year guidance. Historically, when our active duty students are deployed or preparing to deploy, their educational progression can be delayed, but these students for the most part return. Additionally, with the performance of Army enrollments, we view this as a timing dynamic rather than a structural demand issue. Additionally, the Q2 adjusted EBITDA percentage reflects investments in incremental advertising of $2.2 million versus 2025 as we focus on mitigating the near-term impact of these deployments.

Now let me turn to the positive progress on our institutional combination. On April 28, we received approval from our accreditor, Higher Learning Commission, to consolidate our APUS, Rasmussen, and Hondros College of Nursing programs, locations, and operations into a single accredited institution operating as the American Public University System, which we will refer to as the System in future communications. Now only one step remains with the Department of Education, which is the department's approval of the combination and the completion of the OPEID merger. We are fully engaged with the department and their process steps and continue to target an effective date for consummation of the combination at the beginning of 2026.

Finally, as we turn our attention to full year 2026 performance, given the strength of our first quarter results and our visibility into the balance of the year, today we are raising our full year 2026 guidance on revenue, adjusted EBITDA, and diluted EPS. I want to reinforce the message I delivered at the end of our last earnings call. 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. Q1 2026 is the first quarter of a four-year execution plan. We remain very confident about the significant runway ahead of us. We are just getting started.

With that, I will turn the call over to Edward to discuss our financial results and our updated 2026 guidance in detail.

Operator: Thank you, Angie.

Edward Codispoti: I will begin with our first quarter results, then review our balance sheet, share an update on our share repurchase program, and conclude with our updated outlook for the second quarter and full year 2026. Total revenue in the first quarter was $174.7 million, compared to $164.6 million in the prior-year period, an increase of $10.2 million or 6.2%. First quarter revenue came in at the high end of our prior guidance range. Excluding $3.7 million of Graduate School USA revenue in the prior-year period, revenue would have grown 8.7% year over year. We believe this comparable growth rate is a cleaner read on underlying top-line momentum. Now let us break down revenue by segment under our new reportable structure.

At Military Plus, first quarter revenue was $89.4 million compared to $83.9 million in the prior-year period, representing 6.5% growth. The Military Plus segment income from operations was $30.7 million compared with $24.1 million in 2025, an increase of 27%. This segment delivered an adjusted EBITDA margin of approximately 36% in the quarter, reflecting the cost discipline work we completed during 2025. Net course registrations at Military Plus for the quarter were approximately 106.6 thousand compared to approximately 102.5 thousand in 2025. At Health Plus, first quarter revenue was $85.4 million, compared to $76.9 million on a recast basis in the prior-year period, representing 11% growth.

This segment delivered income from operations of $500,000 compared to a loss of $800,000 in the prior-year period, reflecting continued enrollment momentum, disciplined cost management, and early benefits from our fill-the-back-row capacity utilization. The 11% revenue growth includes the benefit of a modest tuition increase and continued enrollment momentum. Turning to profitability, first quarter net income available to common stockholders was $17.7 million or $0.94 per diluted share, compared to $7.5 million or $0.41 per diluted share in the prior-year period. This represents a 137.6% increase in net income available to common stockholders and a 129.3% increase in diluted EPS.

In addition to expanding operational margins, our below-the-line results were favorably impacted by an 8% effective tax rate during the quarter driven primarily by higher-than-expected tax deductions as a result of the increase in our stock price. We expect the income tax rate to normalize in future quarters this year. First quarter adjusted EBITDA was $29.2 million, up $8.0 million or 37.5% compared to $21.2 million in the prior-year period. Adjusted EBITDA margin was 16.7%, compared to 12.9% in 2025, representing 381 basis points of margin expansion year over year. This reflects the operating leverage that is beginning to show up in our results.

Please keep in mind that the prior-year period included a Graduate School USA loss of approximately $2.2 million in adjusted EBITDA that did not recur in the current period. Turning to our balance sheet, we ended the first quarter in a very strong position. As of 03/31/2026, our cash, cash equivalents, and restricted cash totaled $221.0 million compared to $176.5 million at 12/31/2025, an increase of $44.5 million or 25% in a single quarter. Total debt under our credit agreement was $90.0 million compared to $96.4 million at 12/31/2025. We had excess cash over debt of $131.0 million, up from $80.1 million at year-end 2025.

As a reminder, in early March we completed a refinancing of our debt that reduced our borrowing rate by approximately 375 basis points and lowered principal from $96.4 million to $90.0 million. In connection with that refinancing, we recognized a $1.7 million noncash write-off of deferred financing costs in the first quarter, consistent with what we previously communicated. For modeling purposes, interest income in 2026 is expected to approximate interest expense given our strong cash balances and improved borrowing rate. Also in March, our board authorized a $50.0 million share repurchase program. During the first quarter, we repurchased approximately 17.8 thousand shares of common stock for a total consideration of approximately $1.0 million.

Consistent with the framework we described last quarter, the share repurchase program is being executed primarily to offset dilution from share-based compensation, with flexibility to repurchase opportunistically subject to market conditions and our disciplined approach to capital allocation. Our strong balance sheet and cash generation continue to provide us with significant financial flexibility for organic growth investments, for opportunistic capital returns, and for the tuck-in M&A opportunities that are part of our four-year strategy. I will now discuss our updated guidance. Based on our first quarter results and our visibility into the second quarter, we are raising our full year 2026 outlook on both revenue and adjusted EBITDA, and we are initiating second quarter 2026 guidance.

Our guidance for the second quarter 2026 is as follows: revenue of $170.0 million to $172.0 million, net income available to common stockholders of $6.5 million to $7.5 million, adjusted EBITDA of $16.5 million to $18.0 million, and diluted earnings per share of $0.34 to $0.39 per share.

For the full year 2026, our updated guidance is as follows: revenue of $686.0 million to $696.0 million, compared with our prior range of $685.0 million to $695.0 million; net income available to common stockholders of $44.9 million to $51.6 million, compared with our prior range of $41.3 million to $47.6 million; adjusted EBITDA of $93.0 million to $102.0 million, compared with our prior range of $91.5 million to $100.5 million; diluted EPS of $2.33 to $2.68 per share, compared with our prior range of $2.15 to $2.47 per share; and CapEx of $28.0 million to $32.0 million, unchanged.

Our updated guidance reflects our confidence in the trajectory of the business, continued enrollment momentum at Health Plus, expanded margins across both segments, and notable progress on each element of the strategic framework we outlined at Investor Day. In summary, the first quarter of 2026 was a very strong quarter for American Public Education, Inc. We exceeded our guidance, raised our outlook for the balance of the year, meaningfully strengthened the balance sheet, and began returning capital to shareholders, all while continuing to execute on the long-term strategy we laid out at Investor Day. With that, I will turn it back to Angie for closing remarks.

Operator: Thank you, Edward.

Angela Selden: In closing, the first quarter was a very strong start to 2026, an early proof that the simplification and strengthening work we completed in 2025 is translating into top-line revenue growth, margin expansion, and EPS growth. Our Health Plus segment continues to demonstrate consistent enrollment and revenue growth, expanding margins, and the durability of demand for nursing and health care education. Our Military Plus segment continues to deliver strong margins and growth, even as we work through temporary active duty headwinds that we believe are event-related rather than structural.

At our November 2025 Investor Day, we laid out a multiyear framework with nine value creation initiatives, five at Military Plus and four at Health Plus, targeting organic revenue of $890.0 million to $950.0 million by 2029, representing an 8% to 9% revenue CAGR with adjusted EBITDA margins of 20% to 21%. With strategic investments in new campuses and potential tuck-in acquisitions, we see a potential path to $1.0 billion in revenue by 2029. That framework is intact. Our Trailblazer new campus opening initiatives are on schedule. Our balance sheet is stronger than it has ever been, and we are only one quarter into a four-year plan.

There is meaningful runway ahead of us, and we are as optimistic today as we have ever been about American Public Education, Inc.'s long-term potential. Our organization is purpose-built to deliver affordable and accessible educational opportunities in fields which are in high demand and resilient to disruption. Nursing education prioritizes in-person bedside care, and our military service members continue to be critical to U.S. defense strategies. We continue to believe that our education supports careers that require human judgment and are AI-resilient. Our platform and sector tailwinds position American Public Education, Inc. to accelerate growth and bring more educational opportunities to a greater audience.

Before we move to questions, I want to thank our investors and analysts for the dialogue and engagement we have had over the past quarter. I also want to thank our entire American Public Education, Inc. team for their commitment to continued student engagement, persistence, and success. We will now open the call for questions.

Operator: If you have dialed in and would like to ask a question, please press 1 on your telephone keypad to raise your hand and join the queue. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your questions. Again, it is 1 to join the queue. Our first question comes from the line of Thomas White with D.A. Davidson. Your line is open.

Thomas White: Great. Good evening. Thanks for taking my questions. Two, if I could. I guess on the planned institutional combination, nice to see the HLC finally sign off on that. Can you update us on how we should expect the benefits of that to work their way through your model over the coming quarters? Is it a situation where we maybe see it in operating expense efficiencies first as you can centralize certain functions, and then maybe followed by revenue synergies? Maybe just an update on the model impact. And then just any early comments on the Orlando campus for Rasmussen?

I realize it is very early still, but just curious how it is tracking versus other campus expansions that you have done over the years at this point. Thanks.

Angela Selden: Great. Thanks very much, Tom, for the questions. First, on the combination. In the back half of 2026, we do not expect significant financial improvements, and that is largely because we currently already operate in a shared services structure where we have marketing, IT, legal, HR, and finance all shared and providing services to each of the education units today. Our main enthusiasm for the combination is both our revenue synergies, which we expect to start seeing in 2027 by bringing Rasmussen expanded program offerings to Hondros' campuses, and also cross-pollinating more programs to their existing campuses.

We also anticipate that as the combination moves forward and we see success in your second question, which is our campus openings, we have the opportunity through the combination to accelerate investments in campus openings once we see that we are proving out the model of investment in and return on those campuses. So for the Orlando 2 campus progress, I am going to turn it over to Gary so he can give you a quick update on that.

Gary Jansen: We are pretty happy with how Orlando 2 opened. I would say that we were a little late in the game, so we only got about half of a quarter of enrollment. Yet, I think we hit our start targets for that campus. Q2 will be a pretty good indication of what the ramp rate will be, but so far, so good, and we are on track. One thing to note: that campus introduced Practical Nursing to the market in Orlando, which we had not offered before, and offered it in the nights-and-weekends mode, which we also had not offered before.

So it is great to see it up and running, and I think we will see good progress in the enrollments in our third quarter.

Thomas White: That is great. Maybe just one quick follow-up if I could. Angie, I think you used the word “accelerated openings.” If Orlando goes well, I think you have talked about two new campuses a year as in the plan. Is it safe to assume that you could accelerate that pace, maybe not this year, but maybe next year depending on how the rest of this year goes? Thanks.

Angela Selden: We really are going to pay careful attention to what we call our Trailblazer Initiative, which is the campus openings. We see that the main obstacle that might prevent us from going faster is whether we are expanding outside of the states where we already operate. Inside the states where we operate, we typically have already overcome the obstacles from a regulatory perspective. As we start to branch out to our adjacent states, there is a journey state by state on that regulatory process. But once we get our toehold in a new state, the expansion then accelerates again.

So we are very confident we are on track right now, and we do hope that the early results will allow us to accelerate.

Operator: And our next question comes from the line of Griffin Boss with B. Riley Securities. Your line is open.

Griffin Boss: Good evening. Thanks for taking my question. Just really one primary one for me. I want to call out the $63.0 million of cash flow from operations in the quarter was stellar, so that is great to see. On that front, can you provide a bit more color on your thought process around future strategic initiatives and investments? You have talked about the campus relocations and the Trailblazer initiative. Where are you primarily focused on deploying the cash and using your strong balance sheet? Is it going to be tuck-in acquisitions? Is it going to be more focused on further campus expansion initiatives? Any added color would be helpful.

Angela Selden: Great question, Griffin. Thank you. First, we are making sure that we are spending into the growth in each one of our currently owned businesses. You heard us investing more in marketing inside of APUS, or the Military Plus division. That is somewhat to offset the near-term headwind from the war in the Middle East. Beyond that, we are absolutely investing in our tech platform. One of the things we have underway is the combination of our nursing schools, and consequently we are moving onto a single tech platform. We are going to talk a little bit more about that in next quarter’s call and what we are doing to innovate around that. We are excited about that initiative.

It does have some largely 2027 impact, but perhaps late 2026 as well. And then our main focus is new campuses, and our main focus is tuck-in acquisitions. We are actively working on that. It is one of Gary’s top priorities. It is a good time to be considering those possibilities, and we look forward to sharing any updates we have in future conversations.

Griffin Boss: Great. Thanks for that color, Angie. That is it for me, and again, great to see the progress. Thank you for taking the question.

Angela Selden: Thanks, Griffin. Appreciate it.

Operator: And our next question comes from the line of Stephen Sheldon with William Blair. Your line is open.

Stephen Sheldon: Hey, and congrats to the team on the results. First one here on the updated 2026 guidance. I am roughly estimating that it implies about 3% top-line growth in the back half of the year if we adjust for the estimated government shutdown drag in late 2025. It looks like it would be more like 8% in the first half, excluding Graduate School USA. Is that mostly reflecting the slowdown in the certain military buckets you mentioned, the Navy, Air Force, and Marines? Anything else to call out there beyond normal conservatism?

Angela Selden: Steven, thanks very much for the question. Are you specifically looking at the Military Plus division, or are you talking about overall guidance?

Stephen Sheldon: Total company revenue guidance.

Gary Jansen: I will have to look at the details, but I do not think we are looking at 3%. I do not think we have given the details of each quarter in the second half. Do not forget we had the shutdown. Are you seeing 3% excluding normalizing for the shutdown in the prior year if we added back the estimated drag from the shutdown in Q4 2025 and then taking out Graduate School USA in the first half of this year, trying to compare it on a pure basis? I think it should be a little bit higher than that. Our current revenue guidance right now is focused on the first half.

In the second half, we are being a little bit more conservative. You are right to say that the Military Plus segment is not showing the 7% growth that we were seeing previously because we are trying to meter the impact of the deployments and see how that plays out. Our guidance does imply continued growth within the Health Plus division, which we are seeing progressing at the rates we were talking about in the first half. So we are moderating in the second half, then seeing what the impact is of the deployments and also trying to understand what the year-over-year comp would be absent the shutdown from last year.

Stephen Sheldon: Okay, got it. I can dig in more with you guys offline. Following up, more from an industry perspective: have you noticed any changes in the type of applicants that are pursuing nursing pathways on the health side, especially on prelicensure nursing? There is a lot of increasing uncertainty in other fields around how AI may negatively impact employment down the road. That does not seem to be much of a perceived risk in health care, including nursing, which has favorable secular trends. That could make it a very attractive pathway to employment. Are you seeing any changes in the profile of applicants given those dynamics?

Angela Selden: We continue to see enthusiasm for the nursing programs. Because we offer three ways to become a nurse—an LPN, a two-year degree RN, or the bachelor’s degree, which is a three-and-a-half-year program—it gives many different types of students with different levels of preparedness the opportunity to become a nurse. We have not seen a slowdown. We have seen a lot of continued interest. As I mentioned, our nursing enrollments are growing at high single digits, so we are very happy with the continued progress we are seeing in our nursing program.

Stephen Sheldon: Good to hear. Thank you.

Angela Selden: Thanks very much.

Operator: Our next question comes from the line of Luke Horton with Northland Securities. Your line is open.

Luke Horton: Hey, guys. Thanks for taking the questions, and congrats on the quarter. Just wanted to circle back on the strategic investments. Could you outline what sort of criteria you would be looking for a potential acquisition? Would you be looking at any smaller two-to-four campuses, or would you wait for a larger kind of needle-mover acquisition? Any criteria that you are evaluating there?

Gary Jansen: Our primary criteria is going into states in which we are not currently operating. We are trying to stay within the Midwest and East Coast for right now. We are looking at states where we currently do not have a license, generally contiguous to where we are operating. We are looking at locations where we believe there is a good supply-demand imbalance in that state, and if we can accelerate our entry into that market by making an acquisition. Those are the primary criteria. If we have a single campus, that is certainly something we will look at.

If it has multiple campuses and we can get lucky enough to hit several of those opportunities in one fell swoop, we would certainly be interested in that as well. But we are not ruling out anything that fits within the larger criteria of a state that we are interested in and the supply-demand imbalance in health care.

Luke Horton: Okay, great. That makes sense. Second one, just on Military Plus with the deployments across Navy, Air Force, Marines. Historically, have you tracked what percentage of students that get deployed actually return and reenroll? And within your guidance, what are you assuming for either a rebound or timing for those enrollments?

Angela Selden: Hi, Luke. Thanks for the question. I do not know that we have tracked in the past the return of those who have flagged themselves as asking for an accommodation for deployment, but we will try to run that down and see if we can get more detail on that. This is a different circumstance. Typically, wars begin with Army moving first, deploying, setting up base camps, and then basically waiting. This was a war that was different than what we have experienced in the last several years, where it was an air and sea war immediately. When Navy, Marines, and Air Force deployed, they were in combat right away.

We saw more people requesting that accommodation for deployment and not taking education while overseas than what we had experienced in past situations. We will try to run that down and see if we can get a stat for you on how many return after deployment. Good question.

Luke Horton: Got it. Great. Thanks, Angie, and thanks, guys.

Angela Selden: Thanks very much.

Operator: And our next question comes from the line of Eric Martinuzzi with Lake Street Capital Markets. Your line is open.

Eric Martinuzzi: I also wanted to follow up on the military enrollments. The conflict started at the end of February. Was your first evidence of the active duty headwinds with your May starts or with your April starts? And did you see a difference between the two?

Angela Selden: Great question, Eric. Our March start was very early in the quarter, and at that point in time we saw very few drops, because you are right, the war began on February 28. But we started to see the accommodation requests coming in for our April start and now for our May start. It did not have as much of an effect in March. We certainly started to see it happening as we headed into the completion of the April and May starts. Gary, do you want to add to that?

Gary Jansen: I think that is right. We saw the uptick in deployment numbers, and then we saw the branches. We asked, “What is going on? Why is that happening?” As Angie pointed out, Army looks a little bit light, but not compared to what we have seen with some good growth rates. We saw the numbers that were lower than what we expected coming in from the branches that were on the front lines of the deployment.

Eric Martinuzzi: The second part is the outlook: does it anticipate status quo? Does it anticipate a recovery at any point?

Gary Jansen: I would say Q2 will be impacted a little bit more than Q1 by the deployments. As Angie pointed out, we did deploy marketing that we think will help. We believe that towards the end of the quarter, namely the last month of the quarter in June, we will see some recovery, and then we believe we will see additional recovery going into Q3. We will have to see how much we have to manage the deployments going forward. It is unknown what happens from here, so I do not want to get too far ahead of ourselves not knowing what will or will not happen with the current situation over there.

Angela Selden: We do believe that the strength we are seeing in veterans and military families gives us a very good foundation for us to invest behind. Those are high-teens growth rates in the second quarter, as we have been sharing for the last several quarters. We are going to invest behind those two segments and really try to offset any of the short-term impact we might get from the three branches who are active and deployed right now.

Eric Martinuzzi: Got it. Makes sense. Thanks for taking my questions.

Angela Selden: Thank you.

Operator: And our next question comes from the line of Raj Sharma with Texas Capital Bank. Your line is open.

Rajiv Sharma: Hello. Thank you for taking my questions. I will try not to beat a dead horse and go back to the military deployments. Historically, a certain number of deployments have resulted in a certain decrease in registrations. If I recall, 50,000 deployed got you 1,500 registrations less. How do you see this particular deployment impacting registrations? Also, how would you allocate the marketing dollars to offset this impact? And is that related to the margin? I have a follow-on question on the margins in Military Plus. Sorry, too many questions rolled into one.

Angela Selden: Of course. Thanks, Raj, for the great question. So 50 thousand deployed active duty—we know that about 10% use their education benefit at any given time. That gives us 5,000 of those people somewhere in their educational journey. We know that we educate 30% of all active duty who are taking classes. So the math that you laid out—1.5 thousand students—is right. Typically, our students in any given quarter are taking about one to two registrations, say 1.5 to 1.6 on average. I think that points to the difference between mid-to-high single-digit registrations and mid-single-digit registrations. We are triangulating this on several measures, and that is another measure I appreciate you bringing up.

Yes, we really believe that when we redirect the marketing dollars we talked about—$2.2 million of incremental spend in Q2 beyond what we had originally planned—towards veterans and families, we will be able to drive more momentum in those segments. We also know that our active duty come to us from referral at about a 40% rate. It does cost us a little bit more to get our veterans and our family members than it would cost us if we were investing that $2.2 million in our active duty, but we believe it is very well timed because we are continuing to deliver on the enrollment targets that we set out for APUS.

You can see our confidence in the business by the fact that we raised guidance on the revenue and the adjusted EBITDA for the full year. We believe we have the mitigation strategies well in hand for APUS.

Rajiv Sharma: Got it. Thanks. That is super helpful. A related question: on your margin slide, Military Plus shows a solid margin increase, 32% to 36%. Are you saying that perhaps that goes back down to 32% by the end of the year because you allocate more advertising and marketing costs?

Edward Codispoti: That is correct, Raj. Great margin improvement, but we do not expect to sustain that throughout the year, in part due to the incremental $2.2 million. Having said that, we are still guiding for the full year in the neighborhood of that 15% EBITDA margin at the company level, which would be an improvement over last year’s 13.2%.

Rajiv Sharma: Perfect. And then, following through to nursing, there is an improvement in the margins there, but sequentially there is a drop from Q4. Is that because nursing is close to breakeven, so it is tough to scale that up quarter to quarter and get a consistent margin increase?

Gary Jansen: It is a good question. If you recall last year, in Q1 and Q2 we had timing differences of instructional materials. There was roughly $2.8 million of instructional materials last year that did not exist in Q1 due to how contracts were written with our vendor at the time, and then it modified the margin in Q2. It is really timing year over year of that $2.8 million that did not exist. Then there are some additional items, a little bit more marketing spend, but that is what drove the margin difference.

You are right, the margin was very low in Q1 from where we had expected to be, and we would expect to see the flow-through margins the remainder of the year much better in Q2 through Q4.

Angela Selden: That is a one-time contract matter, Raj. I think we talked about it last year in Q2, where the contract gave us a quarter for free, basically. So we did not have instructional material costs in Q2 2025.

Rajiv Sharma: Got it. One last question. Can you comment on the Department of Education’s sensitivity to cohort default rates? I presume you are better positioned with a large military focus, but how are you thinking about the upcoming CDR disclosures? Are you well positioned?

Gary Jansen: We are monitoring it. Certainly with the military, we have a lower borrowing rate, but that is not how it is measured—it is the students that did borrow and how many of them are repaying the loans. One of the biggest concerns is the behavior and pattern of people that have not been repaying. We feel we are in good shape based on our third party that helps us with these things, but we are keeping an eye on it because students were asked not to pay their loans for a long period of time and all of a sudden they are being asked to repay. Changing that behavior will take some time.

We feel good about where we are, but it is something we will have to keep on top of as students go into repayment for the first time in a long time.

Rajiv Sharma: Awesome. Thank you so much, and congratulations again on solid consistent results.

Angela Selden: Great. Thank you, Raj.

Operator: And our final question comes from the line of Jasper Bibb with Truist Securities. Your line is open.

Jasper Bibb: Hey, good afternoon, everyone. I was hoping you could talk about how you are approaching student acquisition. Some of your competitors talked about search algorithm changes or the shift to answer engines potentially impacting the top of the funnel. You mentioned earlier on the call your referral rate is super high, so maybe you are dealing with less of that than some of your peers, but I wanted to hear about your experience and how you are managing these changing consumer behaviors.

Angela Selden: Great question, Jasper. Thanks. You are absolutely right. At APUS, because we have such a significant amount of our new students coming from referral, we are not seeing any meaningful change to our acquisition costs or the momentum behind acquisitions, setting aside the three branches of the military currently impacted by deployments. We are very positive about the momentum at APUS. We have not seen a slowdown in our acquisition of new nursing students. I will turn it over to Gary, as he has been working closely with the marketing and enrollment teams based on what you have been hearing in the market from others pointing to this topic.

Gary Jansen: As Angie pointed out, in a small portion of our business we have seen some of that same behavior—the non-health care portion of our online programs at the Health Plus division. A small portion of our health online has seen that algorithms using AI are picking up ways to prioritize keywords. We are aware of it and responding to it. We have deployed resources to address it. We have not seen a material impact because the other portions of our business are growing as we would expect.

It is something we know we have to address just like everyone else, and we feel comfortable we understand the root causes and what we need to do to bring the algorithms back in line.

Jasper Bibb: Appreciate the detail there. Thank you for taking the questions.

Angela Selden: Great. Thanks very much, Jasper.

Operator: That concludes our question and answer session. I will now turn the conference back over to Angela Selden for closing remarks.

Angela Selden: Thank you very much to all who have participated today. We remain very enthusiastic about 2026 and our four-year plan. We have built the foundation for the next several quarters of success, and we see significant momentum ahead of us in top-line revenue, expanding margins, and expansion of our earnings per share contribution. Thank you for joining us today, and we look forward to speaking with you all very soon.

Operator: Ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.