American Public Education, Inc.

to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Brian Printabo, head of investor relations.

Brian. Thank you, Greg. And good afternoon, everyone. Welcome to American Public Education's conference call to discuss second quarter 2025 results. Joining us on the call today are Angela Seldon, president and chief executive officer, Rick Sunderland, executive vice president and chief financial officer, and Gary Jansen, senior vice president of strategy and growth. Materials for the call today are available in the events and presentation section of APEI's website. Statements made during this conference call and any accompanying presentation regarding APEI and its subsidiaries that are not historical facts may be forward-looking statements based on 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, such as those identified in our form 10K under the heading risk factors, including those related to potential impacts from government shutdowns or changing federal or state government policies, practices and laws, including impacts on revenues or the timing of receivables. Forward-looking statements may sometimes be identified by words like anticipate, believe, seek, could, estimate, expect, can, may, plan, potentially, project, should, will, would and similar or opposite words. Forward-looking statements include without limitation statements regarding expectations for registrations and enrollments, revenue, earnings and adjusted EBITDA and other earnings guidance, our foundation for growth, combination of our institutions, campus and corporate center consolidation, the redemption of our preferred stock, future governmental or regulatory actions and a response to those actions, changing market demands and our ability to satisfy such demands and any other company initiatives. This presentation contains references to non-GAAP financial information, a reconciliation between the non-GAAP financial measures we use and the most directly comparable GAAP measures is located in the appendix of 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 and should only be considered in addition to and not as a substitute or superior to any measure of financial performance paired in accordance with GAAP. Now I'd like to turn the call over to API's president and CEO, Angela Seldon. Angie, please go ahead.

Thank you, Brian. Good afternoon and thank you for joining American Public Education's second quarter 2025 earnings call. We are very pleased with our outperformance in the second quarter of 2025 and notably our accomplishments in simplifying the business and the balance sheet. We have several areas to highlight during today's call. First, APEI outperformed second quarter 2025 financial guidance. In the second quarter, we exceeded the top end of our guidance for revenue, net income, EPS and adjusted EBITDA. Disciplined operations at our education units along with continued enrollment growth have helped to drive improved financial performance. Next, several important simplification milestones were achieved that improve our balance sheet and overall financial position. We completed the sale of two corporate administrative buildings collecting over $22 million. The Department of Education removed restrictions on the $24.5 million letter of credit from the 2021 acquisition of Rasmussen. That cash is now unrestricted on our balance sheet. And finally, we redeemed our preferred equity for a total amount of approximately $43 million, which was fully funded by the proceeds from the building sale and the release of the restricted cash. Going forward, this will allow APEI annually to save $6 million from the elimination of the cash dividend payments. We believe we are now positioned with an improved capital structure and more financial flexibility to invest in growth initiatives. Third, after quarter end on July 25th, 2025, we completed the sale of Graduate School USA. We believe this is a great outcome for APEI, for graduate school, its employees and its students. As we determined that graduate school was no longer a strategic fit for our future growth strategy, we are pleased to find the business a new home, which is more aligned with the graduate school mission and market position, allowing us to focus on growing our core healthcare and military businesses. Next, we are pleased with the double digit enrollment growth at both Rasmussen and Andros of 10% and 18% respectively, further driving expanding margins and greater profitability. Fifth, I'm pleased to announce the appointment of James Kenningsberg as our interim chief innovation and technology officer. APEI is investing in intelligent infrastructure, predictive analytics and personalized digital tools to modernize every part of the learner journey. James will lead our transformation efforts aimed at improving access and student persistence and delivering more responsive, mission aligned educational experiences. James has been an invaluable resource on our APEI board of directors, and he will be stepping away from his board service to focus on this important assignment. James brings more than two decades of experience leading technology strategies in education and has served as a strategic advisor to a number of high growth startup and education focused companies. Next, we continue to move closer to overall simplification regarding the combination of APUS, Rasmussen and Andros into a single accredited institution. We have received HLC and state agency approvals, discussions with the Department of Education and HLC are ongoing regarding the timing to complete the transaction. Finally, in summary, the improvements to the business and finance position provide us an opportunity to strengthen our full year guidance. Our CFO Rick Sunderland will give a deeper dive into updated 2025 guidance, but at a high level. Even with the sale of graduate school, we are maintaining our full year revenue guidance, which now reflects the exclusion of five months of graduate school revenue for the remainder of 2025. And we are increasing adjusted EBITDA guidance expected now to be between $81 million and $88 million. I'd now like to provide some additional details about the two Q 2025 results, starting first with APEI's nursing and healthcare institutions. Rasmussen continues to produce strong results. Rasmussen's enrollment increased from 7% in two Q25 to 10% in three Q25, representing the fifth consecutive quarter of year over year enrollment increases. Our three prime strategy to improve outcomes, manage costs and grow enrollment has continued to produce positive results. As previously discussed, Rasmussen's higher fixed cost structure allows positive enrollment trends to significantly enhance the flow through margin, leading to improved operating leverage and profitability. With our current campus footprint, we believe our strategy to fill the back row continues to effectively increase enrollments and improve EBITDA flow through on each incremental student. At Hondros, as previously reported, two Q25 enrollment was strong with 13% growth as compared to two Q24. Three Q25 enrollment increased to 18% year over year to 3,700 students. We believe that the combination of Rasmussen and Hondros will provide us with a robust platform to further scale enrollments in the increased margins. Turning now to APEI's online university, we are going to be educating our nation's military, veterans and their families called APUS. Overall net course registrations increased 7% year over year and revenue increased over 6%. We expect continued year over year registration growth in the low to mid single digits for the remainder of 2025. In future years, we believe we can accelerate revenue and registration growth at APUS by offering our courses and degree programs to more veterans, more family members of the military and expanding our penetration with the current active duty military students. Overall, given the consistent financial and operational performance we've delivered in the last 18 months, we will host an investor day on November 20th, 2025 to share our outlooks for 2026 and beyond. We remain enthusiastic in our ability to continue delivering results and prioritizing growth drivers, deliver profitability while providing more students accessible and affordable educational opportunities. We look forward to welcoming you, our investors and analysts to New York City. Invitations are forthcoming. In closing, APEI enables students to experience a valuable lifelong return on their educational investment. Our mission remains to power purpose, potential and prosperity for those in service of others. Each of our education units is purpose-built to deliver accessible and affordable higher education across a diverse range of subjects. I'd like to thank each of our employees and our educators that worked tirelessly to make our mission a reality. With that, I will now turn the call over to APEI CFO, Rick Sunderland.