American Public Education (Nasdaq: APEI) reported Q2 2026 revenue of $171.7 million, up 5.5% year over year from $162.8 million, while diluted EPS improved to $0.52 from a loss of $0.02. Net income available to common stockholders reached $9.8 million versus a $0.3 million loss, and adjusted EBITDA rose 36.8% to $20.7 million as Health+ returned to positive operating income and Military+ continued to grow.
Core Financial Results
Revenue increased across both operating segments. Excluding Graduate School USA, which was sold in July 2025, consolidated revenue would have grown 7.8% rather than the reported 5.5%.
Profit growth substantially outpaced revenue growth. Operating income nearly doubled, and the prior-year preferred dividends and preferred-stock redemption loss did not recur, contributing to the larger improvement in income available to common stockholders and diluted EPS.
| Metric | Q2 2026 | Q2 2025 | YoY change |
|---|---|---|---|
| Revenue | $171.7 million | $162.8 million | +5.5% |
| Operating income | $13.5 million | $7.0 million | About +92.5% |
| Operating margin | 7.9% | 4.3% | About +3.6 percentage points |
| GAAP net income | $9.8 million | $4.5 million | About +117% |
| Net income available to common stockholders | $9.8 million | $(0.3) million | Turned positive |
| Diluted EPS | $0.52 | $(0.02) | Turned positive |
| Adjusted EBITDA and margin | $20.7 million; 12% | $15.1 million; 9% | +36.8%; +3 percentage points |
| Operating cash flow | $12.1 million | $14.8 million | About -18.2% |
Adjusted EBITDA is a non-GAAP measure that excludes items including stock compensation, certain professional fees and losses on asset disposals.
Business and Segment Performance
Health+ generated the faster revenue growth and moved from an operating loss to a small profit. Military+ remained the larger source of segment operating income, with its margin expanding despite more moderate top-line growth.
| Segment | Q2 2026 revenue | Primary activity metric | Operating income and margin |
|---|---|---|---|
| Military+ | $85.5 million, +4.7% | 98,300 net course registrations, +2.0% | $23.7 million; 28% margin |
| Health+ | $86.2 million, +11.0% | 19,600 students, +6.6% | $0.3 million; approximately 0% margin |
Health+ revenue growth was primarily driven by higher enrollment and modest tuition increases. Its operating result improved from a $2.4 million loss and a negative 3% margin in Q2 2025. Segment EBITDA rose to $2.7 million from $0.3 million.
Military+ revenue benefited primarily from higher net course registrations. Operating income increased from $21.4 million, while its operating margin rose from 26% to 28%.
Profitability, Cash Flow and the Balance Sheet
Instructional costs and services declined to $76.6 million from $78.4 million even as revenue increased, while general and administrative expenses edged down to $37.5 million from $38.1 million. These reductions more than offset selling and promotional expense growth to $40.1 million from $35.0 million, helping lift the consolidated operating margin.
Net interest also supported earnings, moving to $0.6 million of income from $1.1 million of expense. In addition, Q2 2025 included $1.3 million of preferred dividends and a $3.5 million preferred-stock redemption loss, explaining why income available to common stockholders improved more sharply than GAAP net income.
Operating cash flow declined by $2.7 million to $12.1 million despite higher earnings. At June 30, 2026, cash, cash equivalents, restricted cash and short-term investments totaled $222.8 million, up $46.3 million from December 31, 2025. Current and long-term debt totaled approximately $87.3 million, down from $94.7 million at year-end.
APEI repurchased 70,365 shares during the quarter and 88,205 shares during the first six months of 2026. It had $45.0 million remaining under its repurchase authorization at quarter-end.
Earnings Guidance
APEI raised its full-year 2026 revenue, net income and adjusted EBITDA guidance. The release did not provide the previous guidance ranges, so the size of those increases cannot be quantified.
The Q3 outlook calls for modest revenue growth but lower profit measures than in Q3 2025. By contrast, the full-year ranges remain above the corresponding 2025 results across revenue, net income, adjusted EBITDA and EPS.
| Metric | Q3 2026 guidance | FY2026 guidance |
|---|---|---|
| Military+ net registrations | 101,000–103,000; +1% to +3% YoY | — |
| Health+ enrollment | 19,100; +2.5% YoY | — |
| Revenue | $164.5–$167.0 million vs. $163.2 million in Q3 2025 | $690–$698 million vs. $648.9 million in 2025 |
| Net income available to common stockholders | $3.4–$5.4 million vs. $5.6 million | $46.5–$52.5 million vs. $25.3 million |
| Adjusted EBITDA | $14–$17 million vs. $20.7 million | $96–$104 million vs. $85.7 million |
| Diluted EPS | $0.18–$0.29 vs. $0.30 | $2.48–$2.79 vs. $1.36 |
| Capital expenditures | — | $25–$28 million vs. $15.9 million |
The expected Q3 decline in adjusted EBITDA despite slightly higher revenue is an important near-term profitability issue to monitor. Full-year capital spending is also set to rise materially from 2025.
Management View and Post-Quarter Combination
President and CEO Angela Selden attributed the quarter to continued demand across APEI’s businesses and disciplined execution. She also highlighted the opening of Health+’s Orlando campus as part of the company’s campus expansion strategy.
After the quarter ended, APEI completed the combination of American Public University System, Rasmussen University and Hondros College of Nursing into a single Higher Learning Commission-accredited institution named American Public University System. The release did not quantify the expected financial benefits of this combination.
Recent Insider Transactions
The supplied six-month summary shows net insider purchases and sales of negative 415,182 shares, indicating net selling. The latest records include several stock awards as well as reported sales; stock grants should be distinguished from open-market purchases.
| Date | Insider | Transaction | Price per share | Reported value |
|---|---|---|---|---|
| Aug. 3, 2026 | James Kenigsberg | Stock award | $0.00 | $0 |
| July 1, 2026 | Daniel S. Pianko | Stock award | $55.86 | $61,837 |
| June 22, 2026 | Thomas A. Beckett | Sale | $54.00 | $108,000 |
| June 15, 2026 | Thomas A. Beckett | Sale | $51.39–$53.00 | $414,159 |
| May 22, 2026 | Daniel S. Pianko, Granetta B. Blevins, Anna M. Fabrega, Michael David Braner and Richard J. Statuto | Stock awards | $0.00 | $0 |
| May 13, 2026 | Nuno S. Fernandes | Sale | $53.34 | $240,030 |
The reported transactions do not by themselves establish insiders’ views about APEI’s outlook.
Risks Investors Should Watch
- Near-term profit pressure: Q3 adjusted EBITDA, net income and EPS guidance are all below their Q3 2025 levels even though revenue is expected to increase modestly.
- Dependence on enrollment and persistence: Q2 growth was tied directly to Military+ registrations and Health+ enrollment. Slower student acquisition or persistence could affect both revenue and segment margins.
- Federal funding and regulatory exposure: APEI identified risks related to Title IV programs, military tuition assistance, the 90/10 Rule, accreditation requirements and possible government shutdowns, with particular relevance to Military+ students.
- Execution of the institutional combination: APEI must integrate three previously separate institutions into one accredited institution, and the release did not quantify the expected benefits or costs.
- Cash conversion and investment requirements: Operating cash flow declined in Q2, while full-year capital expenditures are expected to rise to $25–$28 million from $15.9 million in 2025.
Summary
APEI’s Q2 2026 results combined mid-single-digit revenue growth with much faster operating income and adjusted EBITDA growth. Health+ delivered the largest revenue increase and returned to positive operating income, while Military+ remained the main profit contributor. The next points to monitor are the Q3 profitability decline embedded in guidance, execution of the post-quarter institutional combination and whether enrollment growth converts into stronger cash flow as capital spending rises.
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