American Public Education (APEI) Q3 Earnings call transcript Nov 12, 2024
2min read In a recent earnings call, American Public Education, Inc. (APEI) reported a strong third quarter performance, highlighting significant growth and positive trends across its nursing and healthcare institutions, Rasmussen University and Hondros College. The call, led by Angela Selden, President and CEO, and Rick Sunderland, Executive Vice President and CFO, outlined APEI's achievements, financial performance, and strategic initiatives, providing insights into the company's optimistic outlook for the future.
Financial Highlights
APEI's third quarter revenues reached $153.1 million, a 1.5% increase compared to the same period last year, exceeding the company's guidance range. The adjusted EBITDA for the quarter was $12.9 million, above the top end of the guidance range, with a 8.4% adjusted EBITDA margin. The net income for the quarter was $731,000, equaling $0.04 per diluted share.
Enrollment Growth and Student Outcomes
Rasmussen University posted its first year-over-year increase in total enrollment since the APEI acquisition, with a 4% growth in fourth quarter enrollments compared to the same period last year. This achievement occurred despite voluntary campus closings in Wisconsin. The institution's positive trajectory is further underscored by its NCLEX pass rates, with 23 of 25 programs meeting required state thresholds. Additionally, Rasmussen received positive news regarding its campuses in Moorhead, Minnesota, and Overland Park, Kansas, which both received 6-year continuing accreditation.
Hondros College, too, reported strong enrollment growth, with a 19% increase in fourth quarter total student enrollment compared to the same period last year. This marks the 19th consecutive quarter of year-over-year enrollment growth. The college's Detroit, Michigan campus received accreditation, and several Ohio campuses saw improved overall retention rates above the 70% benchmark.
Looking Forward
APEI's full year 2024 revenue guidance is $620 million to $625 million, a 3% to 4% increase from 2023. This optimistic outlook is supported by APEI's strategic focus on nursing and healthcare educational programs, which are expected to contribute significantly to the company's overall growth. With a strong emphasis on expanding nursing campus footprints and improving financial performance, APEI is well-positioned to address the large demand for nursing and other clinical roles in the healthcare sector.
The earnings call also underscored APEI's commitment to strengthening its online curriculum, IT infrastructure, and marketing spend at APUS, its online university serving the military and veterans segment. Despite a modest decline in EBITDA margins due to these investments, APUS is expected to continue growing at a steady rate, driven by its strong reputation and value proposition for students.
Addressing Challenges and Investing for the Future
APEI's strategic initiatives are not without challenges, including investments in technology transition services and compensation costs. However, these investments are seen as crucial for the company's long-term growth and competitiveness. APEI's management team expressed confidence in the company's ability to navigate these challenges and deliver value to its students, stakeholders, and communities.
In conclusion, American Public Education's strong third quarter performance and positive outlook reflect the company's strategic focus on nursing and healthcare education, enrollment growth, and financial performance. With a commitment to driving growth and delivering value, APEI is well-positioned to capitalize on the opportunities ahead and continue its positive trajectory in the years to come.