American Public Education (APEI) 6 Aug 24 2024 Q2 Earnings call transcript

In a recent earnings call, American Public Education Inc. (APEI) presented its financial results for the second quarter of 2024, highlighting significant achievements and outlining strategic initiatives to further enhance its operations and financial performance. APEI's focus on education units, particularly Rasmussen and APUS, underscores its commitment to delivering high-quality, accessible education to a diverse student body.

Financial Highlights

APEI reported a 3.9% year-over-year increase in revenue, reaching $152.9 million, driven by growth at APUS, Hondros, and Rasmussen. Adjusted EBITDA for the quarter reached $10.9 million, marking a 24% increase and a significant improvement in adjusted EBITDA margin, which expanded to 7.2% compared to 6% in the prior year quarter.

Rasmussen's Turnaround

Rasmussen University, which APEI acquired in 2021, saw a notable improvement in enrollment and revenue. Despite suspending new enrollments in two Wisconsin campuses to optimize the campus footprint and improve profitability, Rasmussen's online programs experienced double-digit growth, particularly in Nursing and Health Sciences. This progress is expected to continue, with Rasmussen on track to move into positive EBITDA territory by the end of 2024, setting the stage for a stronger profit picture in 2025.

APUS's Continued Growth

American Public University System (APUS), serving military and veterans, showed resilience with net course registrations increasing by 1.7% year-over-year. Revenue growth was attributed to both the overall growth in registrations and higher average revenue per registration from tuition and fee increases. Despite a slight decrease in EBITDA margin, APEI remains optimistic about the future of APUS, particularly as it invests in curriculum optimization, faculty pay increases, and IT infrastructure improvements.

Looking Ahead

APEI's strategic initiatives include expanding Rasmussen's campus footprint once Department of Education growth restrictions are lifted, addressing the critical demand for nursing and other clinical roles in the healthcare sector. APEI's goal is to continue its mission of transforming lives, advancing careers, and improving communities through accessible, affordable higher education and training across a diverse range of subjects.

Conclusion

American Public Education Inc.'s strong financial performance and strategic initiatives demonstrate its commitment to growth and innovation in the education sector. With a focus on repositioning Rasmussen for growth, expanding its impact in addressing the nursing shortage, and maintaining a strong presence in the military and veterans education sector, APEI is poised to continue its positive trajectory in the coming quarters.