American Public Education APEI Form 10-Q filing Q2 FY2026

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying notes are an integral part of these Consolidated Financial Statements.

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Income

(In thousands, except per share amounts)

The accompanying notes are an integral part of these Consolidated Financial Statements.

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

The accompanying notes are an integral part of these Consolidated Financial Statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

The accompanying notes are an integral part of these Consolidated Financial Statements.

AMERICAN PUBLIC EDUCATION, INC.

Consolidated Statements of Cash Flows

(In thousands)

The accompanying notes are an integral part of these Consolidated Financial Statements.

AMERICAN PUBLIC EDUCATION, INC.

Notes to Consolidated Financial Statements

Note 1. Nature of the Business

American Public Education, Inc., or APEI, together with its subsidiary referred to as the Company, is a provider of online and campus-based postsecondary education to students. Effective March 2, 2026, the Company completed the merger of the legal entities that owned and operated the Company’s three institutions at the time, American Public University System, or APUS, Rasmussen University, or RU, and Hondros College of Nursing, or HCN, with American Public University System, Inc. surviving the merger. On August 4, 2026, the U.S. Department of Education, or ED, approved, and we completed, the Combination of APUS, RU, and HCN into one HLC-accredited institution named American Public University System, or the System.

The Company provides education services through the following reportable segments:

• Military+ Segment, formerly the APUS Segment, provides online postsecondary education directed primarily at the needs of the military, veterans, extended military and veteran families, and other public service and service-minded communities through American Military University and American Public University.
• Health+ Segment, consisting of the businesses that formerly comprised the RU Segment and the HCN Segment, provides nursing- and health sciences-focused education and other postsecondary education, including business, technology, and education, to students through RU and HCN.

The System is licensed or otherwise authorized by state authorities to offer education programs to the extent it believes such licenses or authorizations are required, and the System is certified by ED to participate in student financial aid programs authorized under Title IV of the Higher Education Act of 1965, as amended, or Title IV programs.

The accompanying Consolidated Financial Statements reflect the operations of American Public Training LLC, which is referred to herein as Graduate School USA, or GSUSA, through July 25, 2025, or the GSUSA Sale Date.

Adjustments to reconcile segment results to the Consolidated Financial Statements are included in Corporate and Other. These adjustments include unallocated corporate activity and eliminations, and, prior to the GSUSA Sale Date, the operational activities of GSUSA. Prior period segment disclosures have been recast to conform to the current period presentation.

Please refer to “Note 9. Segment Information” for more information on the Company’s reportable segments.

Note 2. Summary of Significant Accounting Policies

A summary of the Company’s significant accounting policies follows:

Basis of Presentation and Accounting

The Company has prepared the accompanying unaudited, interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP.

Business Combinations

The Company accounts for business combinations in accordance with Financial Accounting Standards Board Accounting Standards Codification 805, Business Combinations, or FASB ASC 805, which requires companies to use the acquisition method for all business combinations. Under ASC 805, the assets and liabilities of an acquired company are reported at business fair value along with the fair value of acquired intangible assets at the date of acquisition. Goodwill

represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets.

Principles of Consolidation

The accompanying unaudited interim consolidated financial statements reflect the accounts of APEI and its wholly owned subsidiary. All material intercompany transactions and balances have been eliminated in consolidation.

The Company’s reportable segments are determined in accordance with FASB ASC 280, Segment Reporting, and are based upon how the chief operating decision maker, or CODM, analyzes performance and makes decisions. The Company organizes its business across two reportable segments: Military+ and Health+. Each segment represents an educational division that provides a variety of postsecondary academic programs.

Unaudited Interim Consolidated Financial Information

The unaudited interim Consolidated Financial Statements do not include all the information and notes required by GAAP for audited annual financial statement presentations. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of the Company’s financial position, results of operations, and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for future periods, including the year ending December 31, 2026. This Quarterly Report on Form 10-Q, or this Quarterly Report, should be read in conjunction with the Consolidated Financial Statements and accompanying notes in its audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, or the Annual Report.

Use of Estimates

In preparing financial statements in conformity with GAAP, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company evaluates these estimates and assumptions on an ongoing basis and bases its estimates on experience, current and expected future conditions and various other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ from those estimates under different assumptions or conditions, and the impact of such differences may be material to the Consolidated Financial Statements.

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments with maturities of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist of demand deposits with financial institutions, money market funds, and U.S. Treasury bills. Cash and cash equivalents are Level 1 assets in the fair value reporting hierarchy.

Restricted Cash

Restricted cash includes funds held for students for unbilled educational services that were received from Title IV programs. As a trustee of these Title IV program funds, the Company is required to maintain and restrict these funds pursuant to the terms of the program participation agreement with ED. Total restricted cash as of June 30, 2026, and December 31, 2025, was $1.2 million and $2.4 million, respectively.

Short-Term Investments

Investments with original maturities ranging from three months to one year are classified as short-term investments. As of June 30, 2026, the Company considered its short-term investments in investment grade commercial paper and U.S. Treasury securities as available-for-sale securities based on the Company’s intent for the respective securities. Available-for-sale securities are carried at fair value on the accompanying Consolidated Balance Sheets, determined using Level 2 of the hierarchy of valuation inputs, with the use of inputs other than quoted prices that are observable for the assets. Unrealized investment gains and losses, net of tax, are reported as a separate component of other comprehensive income. Accretion of discounts and interest are included in interest income (expense), net. Realized gains and losses, if any, are included in gain (loss) on investments.

Assets Held for Sale

Assets held for sale represent excess real property located in Charles Town, West Virginia within the Company’s Military+ Segment. The Company classifies long-lived assets as held for sale when the assets are expected to be sold within the next 12 months and meet the other relevant held for sale criteria. As such, the properties are recorded at the lower of the carrying value or fair value, less costs to sell, until such time the assets are sold.

In the first quarter of 2025, APUS entered into an agreement to sell a building classified in assets held for sale as of December 31, 2024, for $7.0 million, and recorded a loss of $1.5 million, based on the contract amount less estimated costs to sell of $0.4 million. The loss was included in loss on assets held for sale in the accompanying Consolidated Statements of Income for the six months ended June 30, 2025. The sale was completed in June 2025 for net sales proceeds of $6.6 million.

In the first quarter of 2025, APUS completed the sale of an undeveloped parcel of land classified in assets held for sale as of December 31, 2024, for net sales proceeds of $0.5 million.

In the second quarter of 2025, APUS completed the sale of a building classified in assets held for sale as of December 31, 2024, for net sales proceeds of $15.9 million.

Total cash received from the sale of assets held for sale for the six months ended June 30, 2025, was $23.0 million. There were no assets held for sale as of June 30, 2026, and December 31, 2025.

Goodwill and Intangible Assets

Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the assets acquired and liabilities assumed, and the fair value of acquired intangible assets at the date of acquisition. Goodwill is not amortized. The Company accounts for goodwill and indefinite-lived intangible assets in accordance with FASB ASC 350, Intangibles Goodwill and Other, and Accounting Standards Update, or ASU, 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The Company’s goodwill and intangible assets are deductible for tax purposes.

The Company annually assesses goodwill for impairment, or more frequently if events or circumstances indicate that goodwill might be impaired. Goodwill impairment testing consists of an optional qualitative assessment as well as a quantitative test. The quantitative test compares the fair value of a reporting unit to its carrying value. If the carrying value of the reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the carrying value is greater than the fair value, the difference between the two values is recorded as an impairment.

Indefinite-lived and finite-lived intangible assets acquired in business combinations are recorded at fair value on the acquisition date. Finite-lived intangible assets are amortized on a straight-line basis over the estimated useful life of the asset.

The Company reviews its indefinite-lived and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such assets are not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the assets exceeds the fair value of the assets.

For additional details regarding goodwill and intangible assets, please refer to “Note 6. Goodwill and Intangible Assets” to the Consolidated Financial Statements.

Series A Senior Preferred Stock

The Company redeemed all 400 outstanding shares of the Series A Senior Preferred Stock in June 2025. The loss on redemption of $3.5 million was recorded as a reduction to net income available to common stockholders for the three months ended June 30, 2025 and was calculated as the difference between the consideration paid, excluding dividends, and the book value of the Series A Senior Preferred Stock of $39.6 million. Accordingly, there were no dividends declared or paid on the Series A Senior Preferred Stock during the three and six months ended June 30, 2026. During the three and six months ended June 30, 2025, dividends declared and paid on the Series A Senior Preferred Stock were $1.4 million and $2.8 million, respectively.

Fair Value Measurements

The Company measures certain financial assets at fair value for disclosure purposes, as well as on a nonrecurring basis when they are deemed to be other-than-temporary impairments.

Fair value represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:

Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities;

Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or liabilities, either directly or indirectly; or

Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities.

The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Stock-based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC 718, Stock Compensation, which requires companies to expense share-based compensation based on fair value, and ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Stock-based payments may include incentive stock options or non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, performance shares, performance units, cash-based awards, other stock-based awards, including unrestricted shares, or any combination of the foregoing.

Stock-based compensation cost is recognized as an expense generally over a three-year vesting period using the straight-line method for employees and the graded-vesting method for members of the Company’s Board of Directors or the Board, and is measured using the Company’s closing stock price on the date of the grant. An accelerated one-year period is used to recognize stock-based compensation cost for employees who have reached certain service and retirement eligibility criteria on the date of grant. The fair value of each option award is estimated at the date of grant using a Black-Scholes option-pricing model that uses certain assumptions. The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of the Company’s common stock. In addition, the Company determines the risk-free interest rate by selecting the U.S. Treasury constant maturity for the same maturity as the estimated life of the option quoted on an investment basis in effect at the time of grant for that business day.

Estimating the percentage of share-based awards that are expected to vest, and in the case of performance stock units, the level of performance that will be achieved and the number of shares that will be earned, requires judgment. The Company estimates forfeitures of share-based awards at the time of grant and revises such estimates in subsequent periods if actual forfeitures differ from original estimates. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. If actual results differ significantly from these estimates, stock-based compensation expense could be higher or lower and have a material impact on the accompanying Consolidated Financial Statements. Estimates of fair value are subjective and are not intended to predict actual future events, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made under ASC 718.

Stock-based compensation expense for the three and six months ended June 30, 2026, and 2025, was as follows (in thousands):

Incentive-based Compensation

The Company provides incentive-based compensation opportunities to certain employees through cash incentive and equity awards. The expense associated with these awards is reflected within the Company’s operating expenses. For the years ending December 31, 2026, and 2025, the Management Development and Compensation Committee of the Board approved annual incentive arrangements for senior management employees. The aggregate amount of awards payable, if any, is dependent upon the achievement of certain Company financial and operational goals and the satisfaction of individual performance goals. Given that the awards are generally contingent upon achieving annual objectives, final determination of the current year incentive awards cannot be made until after the results for the year are finalized. The Company recognizes the estimated fair value of performance-based restricted stock units by assuming the satisfaction of any performance-based objectives at the “target” level, which is the most probable outcome determined for accounting purposes at the time of grant and multiplying the corresponding number of shares earned based upon such achievement by the closing price of the Company’s stock on the date of grant. To the extent performance goals are not met, compensation cost is not ultimately recognized against the goals and, to the extent previously recognized, compensation cost is reversed. Amounts accrued are subject to change in future interim periods if actual future financial results or operational performance are better or worse than expected. During the three and six months ended June 30, 2026, the Company recognized an aggregate incentive-based compensation expense of $2.7 million and $4.9 million, respectively, compared to an aggregate expense of $2.9 million and $4.7 million for the three and six months ended June 30, 2025, respectively.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, Accounting for Income Taxes. The Company determines its interim tax provision by applying the estimated income tax rate expected for the full calendar year to income before income taxes for the period adjusted for discrete items.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued by the FASB. All ASUs issued subsequent to the filing of the Annual Report on March 12, 2026, were assessed and determined to be either inapplicable or not expected to have a material impact on the Company’s consolidated financial position and/or results of operations.

Note 3. Short-Term Investments

During the three months ended June 30, 2026, the Company began investing in short‑term investments, with original maturities ranging from three months to one year. Short-term investments consist of the following as of June 30, 2026 (dollars in thousands):

There were no realized gains or losses from the sale of short-term investments for the three months ended June 30, 2026. The unrealized losses on the Company’s short-term investments in U.S. Treasury securities as of June 30, 2026 were caused by changes in market values primarily due to interest rate volatility. As of June 30, 2026, there were no securities which were in an unrealized loss position for a period longer than 12 months. There were no impairment charges recorded during the three months ended June 30, 2026. The Company has no allowance for credit losses related to its short-term investments, as all investments are in investment grade securities. Interest income related to the Company’s short-term investments and cash and cash equivalents was $1.9 million and $3.4 million for the three and six months ended June 30, 2026, respectively.

Available-for-sale securities are included in Level 2 and are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Note 4. Revenue

Disaggregation of Revenue

In the following table, revenue, shown net of grants and scholarships, is disaggregated by source. The table also includes a reconciliation of the disaggregated revenue within the reportable segments (in thousands):

For the three and six months ended June 30, 2026, Corporate and Other includes the elimination of intersegment revenue for courses taken by employees of APEI at a reportable segment or by employees of one reportable segment at the other reportable segment.

For the three and six months ended June 30, 2025, Corporate and Other includes tuition and contract training revenue earned by GSUSA and the elimination of intersegment revenue for courses taken by employees of APEI at a reportable segment or by employees of one reportable segment at the other reportable segment.

Contract Balances and Performance Obligations

The Company had no contract assets or deferred contract costs as of June 30, 2026, and December 31, 2025.

The Company recognizes a contract liability, or deferred revenue, when a student begins a course or starts a term. Deferred revenue at June 30, 2026, was $23.9 million and includes $15.1 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $8.8 million in consideration received in advance for future courses or terms, or student deposits. Deferred revenue represents the Company’s performance obligation to transfer future instructional services to students. Deferred revenue at December 31, 2025, was $23.0 million and includes $15.0 million in future revenue that had not yet been earned for courses and terms that were in progress, as well as $8.0 million in student deposits.

The Company has elected, as a practical expedient, not to disclose additional information about unsatisfied performance obligations for contracts with students that have an expected duration of one year or less.

When the Company begins providing performance obligations, a contract receivable is created, resulting in accounts receivable on the accompanying Consolidated Balance Sheets. The Company uses the portfolio approach, a practical expedient, to evaluate if a contract exists and to assess collectability at the time of contract inception based on historical experience. Contracts are subsequently reviewed for collectability if significant events or circumstances indicate a change.

The allowance for doubtful accounts is based on management’s evaluation of the status of existing accounts receivable. Among other factors, management considers the age of the receivable, the anticipated source of payment, and historical allowance considerations. Consideration is also given to any specific known risk areas among the existing accounts receivable balances. Recoveries of receivables previously written off are recorded when received. APUS and RU do not charge interest on past due accounts receivable. HCN charges interest on payment plans when a student graduates or otherwise exits the program. Interest charged by HCN on payment plans was not material for the periods presented.

Note 5. Leases

The Company has operating leases for office space and campus facilities and finance leases for certain copiers and printers. Leases are classified as operating leases unless they meet any of the criteria below to be classified as a finance lease:

• the lease transfers ownership of the asset at the end of the lease;
• the lease grants an option to purchase the asset that the lessee is expected to exercise;
• the lease term reflects a major part of the asset’s economic life;
• the present value of the lease payments equals or exceeds the fair value of the asset; or
• the asset is specialized with no alternative use to the lessor at the end of the term.

Operating Leases

The Company has operating leases for office space and campus facilities. Some leases include options to terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. The Company leases corporate office space in Florida, under an operating lease that expires in January 2029. Excluding a campus being closed in 2026, the Company leases 27 campuses located in eight states for the Health+ Segment under operating leases that expire through January 2037. Prior to the GSUSA Sale Date, GSUSA leased classroom and administrative office space in Washington, D.C. and Honolulu, Hawaii.

Operating lease assets are right-of-use assets, or ROU assets, which represent the right to use an underlying asset for the lease term. Operating lease liabilities represent the obligation to make lease payments arising from the lease. Operating leases are included in the Operating lease assets, net, and Operating lease liabilities, current and long-term, on the accompanying Consolidated Balance Sheets. These assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. When the lease does not provide an implicit interest rate, the Company uses an incremental borrowing rate based on information available at lease commencement to determine the present value of the lease payments. The ROU asset includes all lease payments and excludes lease incentives.

Lease expense for operating leases is recognized on a straight-line basis over the lease term. There are no variable lease payments. Lease expense for the three and six months ended June 30, 2026, was $3.3 million and $6.8 million, respectively, compared to $4.5 million and $9.4 million for the three and six months ended June 30, 2025, respectively. Lease expense for the three and six months ended June 30, 2025, included lease expense for leased classroom and administrative office space leased by GSUSA prior to the GSUSA Sale Date. These costs are primarily related to long-term operating leases but also include amounts for short-term leases with terms greater than 30 days that are not material. Cash paid for amounts included in the present value of operating lease liabilities during the three and six months ended June 30, 2026, was $3.1 million and $6.6 million, respectively, compared to $4.8 million and $9.4 million for the three and six months ended June 30, 2025, respectively, and is included in operating cash flows.

Finance Leases

The Company leases copiers and printers pursuant to leases that are classified as finance leases and that expire in 2027. The Company pledged the assets financed to secure the outstanding leases. As of June 30, 2026, the total finance lease liability was $0.1 million, with an average interest rate of 7.00%. The ROU assets are recorded within Property and equipment, net on the accompanying Consolidated Balance Sheets. Lease amortization expense associated with the Company’s finance leases was

$0.1 million for both the three and six months ended June 30, 2026, and 2025, and is recorded in Depreciation and amortization expense in the accompanying Consolidated Statements of Income.

The following tables present information about the amount and timing of cash flows arising from the Company’s operating and finance leases as of June 30, 2026 (in thousands):

Note 6. Goodwill and Intangible Assets

During the three months ended June 30, 2026, the Company performed a routine qualitative assessment of the Company’s Health+ Segment goodwill and indefinite-lived intangible assets recorded. As part of the assessment, the Company considered the events and circumstances expressly required by ASC 350, in addition to other entity-specific factors. Factors considered included financial and enrollment performance against internal targets, economic factors, and the continued favorable growth outlook for nursing education. After completing the qualitative review of goodwill and indefinite-lived intangible assets, the Company concluded it was more likely than not that the fair value of the Company’s Health+ Segment was more than the respective carrying value, and therefore, no quantitative impairment test and no impairment charge was necessary.

Note 7. Income Per Common Share

Income per common share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income available to common stockholders is net income adjusted for preferred stock dividends declared and loss on redemptions of preferred stock. Diluted income per common share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding, increased by the shares used in the per share calculation by the dilutive effects of restricted stock and option awards. The table below reflects the calculation of income per common share and the weighted average number of common shares outstanding, on an as if converted basis, used in computing basic and diluted income per common share (in thousands, except per share amounts).

There were no anti-dilutive options for the three and six months ended June 30, 2026. For the three and six months ended June 30, 2025, there were 30,000 anti-dilutive stock options and 23,000 anti-dilutive restricted shares, respectively, that were excluded from the calculation of diluted earnings per share.

Note 8. Long-Term Debt

On March 9, 2026, the Company entered into a Credit Agreement with PNC Bank, National Association, as administrative agent, or the Agent, and a syndicate of lenders, or the 2026 Credit Agreement. The 2026 Credit Agreement provides for (i) a $90.0 million senior secured term loan, or the 2026 Term Loan, and (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $40.0 million, or the 2026 Revolving Credit Facility, or, together with the 2026 Term Loan, the 2026 Facilities, $25.0 million of which may be utilized for the issuance of letters of credit. The 2026 Revolving Credit Facility also includes a $5.0 million subfacility for swing line loans. The 2026 Facilities are scheduled to mature on March 9, 2031, or the Maturity Date.

The 2026 Credit Agreement replaces that certain Credit Agreement dated as of September 1, 2021, as amended, by and among the Company, as borrower, the lenders from time to time party thereto and Macquarie Capital Funding, LLC, as administrative agent and collateral agent, or the Prior Credit Agreement. The 2026 Revolving Credit Facility replaces the Company’s prior $20.0 million senior secured revolving credit facility under the Prior Credit Agreement, and the proceeds of the 2026 Term Loan, together with cash on hand, were used to repay the approximately $96.4 million principal amount outstanding under the Company’s prior $175.0 million term loan under the Prior Credit Agreement. In connection with this extinguishment of debt, the Company recorded a loss on extinguishment of debt of $1.7 million, primarily related to the write-off of unamortized deferred financing costs. The loss is included in loss on extinguishment of debt in the accompanying Consolidated Statements of Income for the six months ended June 30, 2026.

Under the 2026 Credit Agreement, outstanding borrowings under the 2026 Facilities bear interest at a rate per annum (subject to increase during an event of default) of a Secured Overnight Financing Rate, or SOFR rate, plus a margin ranging from 1.75% to 2.75%, depending on the Company’s Consolidated Total Net Leverage Ratio (as defined in the 2026 Credit Agreement). A commitment fee ranging from 0.20% to 0.35%, also depending on the Company’s Consolidated Total Net Leverage Ratio, is payable quarterly in arrears based on the average daily unused amount of the commitments under the 2026 Revolving Credit Facility. The Consolidated Total Net Leverage Ratio reflects a ratio of consolidated total indebtedness, net of unrestricted cash and cash equivalents up to $100.0 million, to consolidated EBITDA. As of June 30, 2026, the interest rate applicable to the 2026 Facilities was 5.43%.

Interest expense related to the Company’s credit agreements was $1.4 million and $3.6 million for the three and six months ended June 30, 2026, respectively, compared to $2.4 million and $4.8 million for the three and six months ended June 30, 2025, respectively.

The Company is required to make principal payments of the 2026 Term Loan on the last day of each quarter, which commenced with the quarter ended June 30, 2026, in an amount equal to approximately $1.1 million for the first three quarterly payments, approximately $1.7 million for the following eight quarterly payments and approximately $2.3 million for the final eight quarterly payments prior to the Maturity Date. Quarterly principal payments of the 2026 Term Loan will continue until the Maturity Date, on which date (i) the outstanding principal amount of the 2026 Term Loan, together with accrued and unpaid interest thereon and other amounts owed under the 2026 Credit Agreement, will be required to be paid in full and (ii) the outstanding principal amount of any borrowings under the 2026 Revolving Credit Facility, together with accrued and unpaid interest thereon and any other amounts owed under the 2026 Revolving Credit Facility, will be required to be paid in full. Subject to certain exceptions, the Company is also required to make mandatory prepayments of the 2026 Term Loan with the proceeds of asset sales, casualty and condemnation events, and unpermitted debt issuances. The Company may make voluntary prepayments of the borrowings under the 2026 Facilities at any time without premium or penalty. There were no borrowings outstanding under the 2026 Revolving Credit Facility as of June 30, 2026.

The 2026 Facilities are and will be guaranteed by APUS and certain of the Company’s future subsidiaries that are required to become a party thereto as guarantors, or Guarantors. The obligations of the Company and the Guarantors under the 2026 Credit Agreement are secured by a pledge of substantially all of their respective assets, pursuant to the terms of the Security and Pledge Agreement dated as of March 9, 2026, by and among the Agent, the Company, and the Guarantors from time to time party thereto.

The 2026 Credit Agreement contains customary affirmative and negative covenants, including limitations on the Company’s and its subsidiaries’ ability, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, make capital expenditures, and enter into affiliate transactions, in each case, subject to certain exceptions, as well as customary representations, warranties, events of default, and remedies upon default, including acceleration and rights to foreclose on the collateral securing the 2026 Facilities. In addition, the 2026 Credit Agreement contains financial covenants that require the Company to (i) maintain a Consolidated Total Net Leverage Ratio of no greater than 2.50 to 1.00, (ii) maintain a Consolidated Interest Coverage Ratio of no less than 2.50 to 1.00, and (iii) maintain a minimum balance of domestic unrestricted cash and cash equivalents of $40.0 million. As of June 30, 2026, the Company was in compliance with all financial covenants.

Long-term debt consists of the following as of June 30, 2026, and December 31, 2025 (in thousands):

Scheduled maturities of long-term debt as of June 30, 2026, are as follows (in thousands):

Note 9. Segment Information

The Company’s Chief Executive Officer, as the CODM, organizes the company, manages resource allocations, and measures performance among the Company’s reportable segments. The Company has two reportable segments: Military+ Segment and Health+ Segment. The Company has recast its historical results to reflect this change. For additional details, please refer to “Note 1. Nature of the Business” to the accompanying Consolidated Financial Statements.

Corporate and Other includes unallocated corporate activity and eliminations to reconcile segment results to the Consolidated Financial Statements, and, prior to the GSUSA Sale Date, included GSUSA revenue and expenses. GSUSA did not meet the quantitative thresholds to qualify as a reportable segment.

The CODM reviews information about each reportable segment’s revenue and categorized expenses, and allocates resources to, and measures the performance of, each reportable segment using reportable segment operating income (loss). The CODM does not evaluate reportable segment asset or liability information.

A summary of financial information by reportable segment is as follows (in thousands):

• Unaudited
• (In thousands)
• (In thousands)_

• Unaudited
• (In thousands)
• (In thousands)_

Note 10. Contingencies

The Company accrues for costs associated with contingencies, including, but not limited to, regulatory compliance and legal matters, when such costs are probable and can be reasonably estimated. Liabilities established to provide for contingencies are adjusted as further information develops, circumstances change, or contingencies are resolved. The Company bases these accruals on management’s estimate of such costs, which may vary from the ultimate costs and expenses associated with any such contingency. From time to time, the Company is involved in legal matters in the normal course of its business.

Note 11. Concentration

The Company’s students utilize various payment sources and programs to finance their education expenses, including funds from: the U.S. Department of Defense, or DoD, tuition assistance programs; education benefit programs administered by the U.S. Department of Veterans Affairs, or VA; federal student aid from Title IV programs; and cash and other sources.

 A summary of Military+ Segment revenue derived from students by primary funding source is as follows:

A summary of Health+ Segment revenue by institution, RU and HCN, derived from students by primary funding source is as follows:

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

In this Quarterly Report on Form 10-Q, or this Quarterly Report, “we,” “our,” “us,” the “Company” and similar terms refer to American Public Education, Inc., or APEI, and its subsidiary institutions collectively unless the context indicates otherwise. All quarterly information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is unaudited. The following discussion of our historical results of operations and our liquidity and capital resources should be read in conjunction with the Consolidated Financial Statements and related notes that appear elsewhere in this Quarterly Report and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, or our Annual Report.

Results of Operations

Below we have included a discussion of our operating results and material changes in our operating results during the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025. Our revenue and operating results normally fluctuate as a result of seasonal or other variations in our enrollments and the level of expenses in our reportable segments. Our student population varies as a result of new enrollments, graduations, student attrition, the success of our marketing programs, and other reasons that we cannot always anticipate. We expect quarterly fluctuations in operating results to continue as a result of various enrollment patterns and changes in revenue and expenses.

Military+ Segment net course registrations for the three months ended June 30, 2026, increased to approximately 98,300 from approximately 96,400, an increase of 1,900, or 2.0%, as compared to the prior year period primarily due to increases in military registrations from students utilizing TA and financial aid. Military+ Segment net course registrations for the six months ended June 30, 2026, increased to approximately 204,900 from approximately 198,900, an increase of 6,000, or 3.0%, as compared to the prior year period primarily due to increases in military registrations from students utilizing TA, financial aid, and military-affiliated students utilizing education benefit programs administered by the U.S. Department of Veterans Affairs, or VA. Operating margin increased to 27.7% for the three months ended June 30, 2026, from 26.2% in the prior year period and increased to 31.1% for the six months ended June 30, 2026, from 27.5% in the prior year period. Operating margin for the three months ended June 30, 2026, increased primarily due to the $3.8 million increase in revenue and a $0.8 million decrease in employee compensation costs, partially offset by a $2.0 million increase in advertising costs, as compared to the prior year period. Operating margin for the six months ended June 30, 2026, increased primarily due to the

$9.3 million increase in revenue, a $1.5 million decrease in loss on assets held for sale, and a $0.8 million decrease in employee compensation costs, partially offset by increases of $3.3 million in advertising costs and $1.2 million in bad debt expense, as compared to the prior year period.

Health+ Segment total enrollment for the three months ended June 30, 2026, increased to approximately 19,600 from approximately 18,300, an increase of 1,300, or 6.6%, as compared to the prior year period, driven by an 9.2% increase in on-ground enrollment and a 3.4% increase in online enrollment. Health+ Segment total enrollment for the six months ended June 30, 2026, increased approximately 7.0%, as compared to the prior year period, driven by a 9.0% increase in on-ground enrollment and a 4.6% increase in online enrollment. Health+ Segment operating margin improved to 0.4% for the three months ended June 30, 2026, from negative 3.1%, in the prior year period. The improvement in the operating margin for the three months ended June 30, 2026, was primarily due to the $8.6 million revenue increase, partially offset by increases of $3.1 million in advertising costs, $1.4 million in employee compensation costs, and $1.0 million in information technology costs, as compared to the prior year period. Health+ Segment operating margin improved to 0.5% for the six months ended June 30, 2026, from negative 2.1%, in the prior year period. The improvement in the operating margin for the six months ended June 30, 2026, was primarily due to the $17.0 million revenue increase, partially offset by increases of $4.9 million in advertising costs, $3.2 million in classroom and course materials costs, $2.7 million in employee compensation costs, $1.4 million in bad debt expense, and $1.3 million in technology costs, as compared to the prior year period.

For a more detailed discussion of our results by reportable segment, refer to “Analysis of Operating Results by Reportable Segment” below.

Analysis of Consolidated Statements of Income

The following table sets forth statements of income data as a percentage of revenue for the period indicated:

Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025

Revenue. Our consolidated revenue for the three months ended June 30, 2026, was $171.7 million, an increase of $8.9 million, or 5.5%, compared to $162.8 million for the three months ended June 30, 2025. Revenue increased primarily due to an $8.6 million, or 11.0%, increase in revenue in our Health+ Segment, and a $3.8 million, or 4.7%, increase in revenue in our

Military+ Segment, partially offset by a $3.4 million decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date. Our Health+ Segment revenue increase was primarily due to a 6.6% increase in total student enrollment and the impact of tuition increases in the second half of 2025. Our Military+ Segment revenue increase was primarily due to a 2.0% increase in net course registrations, as compared to the prior year period.

Costs and expenses. Costs and expenses for the three months ended June 30, 2026, were $158.2 million, an increase of $2.5 million, or 1.6%, compared to $155.7 million for the three months ended June 30, 2025. Costs and expenses for the three months ended June 30, 2026, include $0.9 million in professional fees related to the Combination in Corporate and Other. The results in the prior year period included $1.7 million in professional fees in Corporate and Other relating to the Combination and the sale of GSUSA. Costs and expenses for the three months ended June 30, 2026, as compared to the prior year period, excluding the items noted above, increased $3.3 million, or 2.1%, primarily due to increases of $5.1 million in advertising costs to drive increases in registrations and enrollment, $1.3 million in technology costs, and $1.2 million in bad debt expense, partially offset by a decrease of $6.0 million in Corporate and Other due to the sale of GSUSA. Costs and expenses as a percentage of revenue decreased to 92.1% for the three months ended June 30, 2026, from 95.7% for the three months ended June 30, 2025.

Instructional costs and services expenses. Our instructional costs and services expenses for the three months ended June 30, 2026, were $76.6 million, a decrease of $1.8 million, or 2.3%, compared to $78.4 million for the three months ended June 30, 2025. Instructional costs and services expenses decreased primarily due to the $3.0 million decrease in Corporate and Other due to the sale of GSUSA, and a $1.4 million decrease in employee compensation costs in our Military+ Segment primarily due to a change in its part-time faculty compensation plan, partially offset by increases of $1.5 million in employee compensation costs and $0.4 million in classroom and course material costs in our Health+ Segment related to increased enrollment, and $0.5 million in information technology costs in our Health+ Segment. Instructional costs and services expenses as a percentage of revenue decreased to 44.6% for the three months ended June 30, 2026, from 48.2% for the three months ended June 30, 2025.

Selling and promotional expenses. Our selling and promotional expenses for the three months ended June 30, 2026, were $40.1 million, an increase of $5.1 million, or 14.5%, compared to $35.0 million for the three months ended June 30, 2025. Selling and promotional expenses increased primarily due to an increase of $5.1 million in advertising costs across both segments to further drive enrollment. Selling and promotional expenses as a percentage of revenue increased to 23.4% for the three months ended June 30, 2026, from 21.5% for the three months ended June 30, 2025.

General and administrative expenses. Our general and administrative expenses for the three months ended June 30, 2026, were $37.5 million, a decrease of $0.7 million, or 1.7%, compared to $38.1 million for the three months ended June 30, 2025. For the three months ended June 30, 2026 and 2025, general and administrative expenses included $0.9 million and $1.4 million, respectively, in professional fees relating to the Combination in Corporate and Other. General and administrative expenses decreased primarily due to a $1.9 million decrease in Corporate and Other due to the sale of GSUSA, partially offset by a $1.2 million increase in bad debt expense in both segments. Consolidated bad debt expense for the three months ended June 30, 2026, was $5.9 million, or 3.4% of revenue, compared to $4.8 million, or 3.0% of revenue in the prior year period. General and administrative expenses as a percentage of revenue decreased to 21.8% for the three months ended June 30, 2026, from 23.4% for the three months ended June 30, 2025. As we continue to evaluate enhancements to our business capabilities, we may incur additional costs, and our general and administrative expenses will vary from time to time.

Depreciation and amortization expenses. Depreciation and amortization expenses were $4.0 million for the three months ended June 30, 2026, compared to $4.1 million in the prior year period, a decrease of $0.1 million. Depreciation and amortization expenses as a percentage of revenue were 2.3% and 2.5% for the three months ended June 30, 2026, and 2025, respectively.

Stock-based compensation expenses. Stock-based compensation expenses included in instructional costs and services, selling and promotional, and general and administrative expenses were $2.2 million for each of the three months ended June 30, 2026, and 2025, respectively. Stock-based compensation costs included accelerated expense for retirement-eligible employees and performance stock unit incentive costs.

Interest income (expense), net. Interest income, net of interest expense and other income, was $0.6 million for the three months ended June 30, 2026, compared to interest expense, net of interest income and other income of $1.1 million, in the prior year period. The increase in net interest income in the three months ended June 30, 2026, as compared to the prior year period, was primarily due to a decrease in interest expense due to the refinance of corporate debt and an increase in interest income earned on investment securities, for the comparable periods.

Income tax expense. We recognized income tax expense of $4.4 million and $1.4 million for the three months ended June 30, 2026, and 2025, respectively, or an effective tax rate of 31.0% in 2026 and 24.0% in 2025. The effective tax rate in 2026 was impacted by higher non-deductible expenses, when compared to the prior period.

Net income. Our net income was $9.8 million and $4.5 million for the three months ended June 30, 2026, and 2025, respectively, an increase of $5.3 million. This increase was due to the factors discussed above.

Preferred stock dividends. There were no preferred stock dividends for the three months ended June 30, 2026 due to the redemption of all outstanding shares of our Series A Senior Preferred Stock in June 2025. Preferred stock dividends for the three months ended June 30, 2025 were $1.3 million.

Loss on redemption of preferred stock. In June 2025, we redeemed all outstanding shares of Series A Senior Preferred Stock for $43.1 million, excluding unpaid and accrued dividends of $1.4 million, resulting in a loss of $3.5 million related to the redemption premium and fees.

Net income (loss) available to common stockholders. The net income available to common stockholders was $9.8 million for the three months ended June 30, 2026, compared to a net loss available to common stockholders of $0.3 million for the three months ended June 30, 2025, an improvement of $10.1 million. This improvement was due to the factors discussed above.

Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025

Revenue. Our consolidated revenue for the six months ended June 30, 2026, was $346.5 million, an increase of $19.2 million, or 5.9%, compared to $327.3 million for the six months ended June 30, 2025. Revenue increased primarily due to a $17.0 million, or 11.0%, increase in revenue in our Health+ Segment, and a $9.3 million, or 5.6%, increase in revenue in our Military+ Segment, partially offset by a $7.1 million decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date. Our Health+ Segment revenue increase was primarily due to a 7.0% increase in total student enrollment and the impact of tuition increases in the second half of 2025. Our Military+ Segment revenue increase was primarily due to a 3.0% increase in net course registrations, as compared to the prior year period.

Costs and expenses. Costs and expenses for the six months ended June 30, 2026, were $311.3 million, an increase of $3.3 million, or 1.1%, compared to $308.0 million for the six months ended June 30, 2025. Costs and expenses for the six months ended June 30, 2026, include $1.9 million in professional fees related to the Combination in Corporate and Other. The results in the prior year period included $2.7 million in professional fees in Corporate and Other relating to the Combination and the sale of GSUSA, and a $1.5 million loss on assets held for sale in our Military+ Segment. Costs and expenses for the six months ended June 30, 2026, as compared to the prior year period, excluding the items noted above, increased $5.6 million, or 1.8%, primarily due to increases of $8.2 million in advertising costs, $3.1 million in classroom and course materials costs due to increased vendor costs and enrollment, $2.6 million in bad debt expense, and $1.6 million in technology costs, partially offset by a decrease of $12.0 million in Corporate and Other due to the sale of GSUSA. Costs and expenses as a percentage of revenue decreased to 89.8% for the six months ended June 30, 2026, from 94.1% for the six months ended June 30, 2025.

Instructional costs and services expenses. Our instructional costs and services expenses for the six months ended June 30, 2026, were $151.3 million, a decrease of $2.1 million, or 1.4%, compared to $153.4 million for the six months ended June 30, 2025. Instructional costs and services expenses decreased primarily due to the $6.2 million decrease in Corporate and Other due to the sale of GSUSA, a $2.2 million decrease in employee compensation costs in our Military+ Segment primarily due to a change in its part-time faculty compensation plan, and a $0.8 million decrease in occupancy costs in our Health+ Segment related to campus and office space closures in 2025, partially offset by increases of $3.2 million in classroom and course material costs due to increased vendor costs and enrollment, and $2.9 million in employee compensation costs in our Health+ Segment related to increased enrollment. Instructional costs and services expenses as a percentage of revenue decreased to 43.7% for the six months ended June 30, 2026, from 46.9% for the six months ended June 30, 2025.

Selling and promotional expenses. Our selling and promotional expenses for the six months ended June 30, 2026, were $78.0 million, an increase of $7.7 million, or 11.0%, compared to $70.3 million for the six months ended June 30, 2025. Selling and promotional expenses increased primarily due to an increase of $8.2 million in advertising costs across both segments to further drive enrollment, partially offset by a decrease of $2.1 million in Corporate and Other due to the sale of GSUSA. Selling and promotional expenses as a percentage of revenue increased to 22.5% for the six months ended June 30, 2026, from 21.5% for the six months ended June 30, 2025.

General and administrative expenses. Our general and administrative expenses for the six months ended June 30, 2026, were $73.8 million, a decrease of $0.8 million, or 1.0%, compared to $74.6 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, general and administrative expenses included $1.9 million in professional fees relating to the Combination in Corporate and Other. For the six months ended June 30, 2025, general and administrative expenses included $2.7 million in professional fees relating to the Combination in Corporate and Other and the sale of GSUSA. General and administrative expenses decreased primarily due to a $3.5 million decrease in Corporate and Other due to the sale of GSUSA, and a $1.2 million decrease in employee compensation costs in Corporate and Other, partially offset by a $2.6 million increase in bad debt expense in both segments. Consolidated bad debt expense for the six months ended June 30, 2026, was $12.2 million, or 3.5% of revenue, compared to $9.8 million, or 3.0% of revenue in the prior year period. General and administrative expenses as a percentage of revenue decreased to 21.3% for the six months ended June 30, 2026, from 22.8% for the six months ended June 30, 2025. As we continue to evaluate enhancements to our business capabilities, we may incur additional costs, and our general and administrative expenses will vary from time to time.

Depreciation and amortization expenses. Depreciation and amortization expenses were $8.1 million for both the six months ended June 30, 2026, and 2025. Depreciation and amortization expenses as a percentage of revenue were 2.3% for the six months ended June 30, 2026, as compared to 2.5% for the six months ended June 30, 2025.

Loss on assets held for sale. There were no losses on assets held for sale in the six months ended June 30, 2026. For the six months ended June 30, 2025, the $1.5 million non-cash loss on assets held for sale was for real property in Charles Town, West Virginia in our Military+ Segment.

Loss on disposals of long-lived assets. The loss on disposal of long-lived assets was $0.2 million for the six months ended June 30, 2026, as compared to $0.3 million for the six months ended June 30, 2025.

Loss on extinguishment of debt. For the six months ended June 30, 2026, we recorded a $1.7 million loss on extinguishment of debt relating to the refinance of our corporate debt. There was no loss on extinguishment of debt in the prior year.

Stock-based compensation expenses. Stock-based compensation expenses included in instructional costs and services, selling and promotional, and general and administrative expenses were $4.6 million for each of the six months ended June 30, 2026, as compared to $4.5 million for the six months ended June 30, 2025. Stock-based compensation costs included accelerated expense for retirement-eligible employees and performance stock unit incentive costs.

Interest income (expense), net. Net interest expense was $0.1 million and $2.0 million for the six months ended June 30, 2026, and 2025, respectively. Net interest expense in the six months ended June 30, 2026, as compared to the prior year period, decreased primarily due to a decrease in interest expense due to the refinance of corporate debt and an increase in interest income earned on investment securities.

Income tax expense. We recognized income tax expense of $5.9 million and $3.9 million for the six months ended June 30, 2026, and 2025, respectively, or an effective tax rate of 17.7% in 2026 and 22.5% in 2025. The effective tax rate in both periods was positively impacted by excess tax benefits related to stock compensation. The impact in 2026 was more significant due to the increase in share price, compared to the prior period.

Net income. Our net income was $27.5 million and $13.4 million for the six months ended June 30, 2026, and 2025, respectively, an increase of $14.1 million. This increase was due to the factors discussed above.

Preferred stock dividends. There were no preferred stock dividends for the six months ended June 30, 2026 due to the redemption of all outstanding shares of Series A Senior Preferred Stock in June 2025. Preferred stock dividends for the six months ended June 30, 2025 were $2.8 million.

Loss on redemption of preferred stock. In June 2025, we redeemed all outstanding shares of Series A Senior Preferred Stock for $43.1 million, excluding unpaid and accrued dividends of $1.4 million, resulting in a loss of $3.5 million related to the redemption premium and fees.

Net income available to common stockholders. The net income available to common stockholders was $27.5 million for the six months ended June 30, 2026, compared to a net income available to common stockholders of $7.1 million for the six months ended June 30, 2025, an improvement of $20.4 million. This improvement was due to the factors discussed above.

Analysis of Operating Results by Reportable Segment

The following table provides details on our operating results by reportable segment for the respective periods (in thousands):

Military+ Segment

For the three months ended June 30, 2026, the $3.8 million, or 4.7%, increase to approximately $85.5 million in revenue in our Military+ Segment was primarily attributable to higher net course registrations, as compared to the prior year period. Net course registrations increased 2.0% to approximately 98,300 from approximately 96,400 in the prior year period, primarily due to increases in military registrations from students utilizing TA and financial aid. Income from operations before interest and income taxes improved to $23.7 million during the three months ended June 30, 2026, from $21.4 million in the prior year period, an increase of $2.3 million, or 10.6%, due to the $3.8 million increase in revenue and a $0.8 million decrease in employee compensation costs, partially offset by a $2.0 million increase in advertising costs, as compared to the prior year period.

For the six months ended June 30, 2026, the $9.3 million, or 5.6%, increase to approximately $175.0 million in revenue in our Military+ Segment was primarily attributable to higher net course registrations and modest price increases, as compared to the prior year period. Net course registrations increased 3.0% to approximately 204,900 from approximately 198,900 in the prior year period, primarily due to increases in military registrations from students utilizing TA, financial aid, and military-affiliated students utilizing education benefit programs administered by the VA. Income from operations before interest and income taxes improved to $54.4 million during the six months ended June 30, 2026, from $45.6 million in the prior year period, an increase of $8.9 million, or 19.5%, primarily due to the $9.3 million increase in revenue, a $1.5 million decrease in loss on assets held for sale, and a $0.8 million decrease in employee compensation costs, partially offset by a $3.3 million increase in advertising costs and a $1.2 million increase in bad debt expense, as compared to the prior year period.

Health+ Segment

For the three months ended June 30, 2026, the $8.6 million, or 11.0%, increase to approximately $86.2 million in revenue in the Health+ Segment was primarily due to a 6.6% increase in total student enrollment which was driven by an 9.2% increase in on-ground enrollment, and a 3.4% increase in online enrollment, as compared to the prior year period, and the impact of tuition increases in the second half of 2025. Income from operations before interest and income taxes was $0.3 million for the three months ended June 30, 2026, and a loss of $2.4 million for the three months ended June 30, 2025, respectively, an improvement of $2.7 million. The improvement was primarily due to the $8.6 million revenue increase, partially offset by increases of $3.1 million in advertising costs, $1.4 million in employee compensation costs, and $1.0 million in information technology costs, as compared to the prior year period.

For the six months ended June 30, 2026, the $17.0 million, or 11.0%, increase to approximately $171.6 million in revenue in the Health+ Segment was primarily due to a 7.0% increase in total student enrollment which was driven by a 9.0% increase in on-ground enrollment, and a 4.6% increase in online enrollment, as compared to the prior year period, and the

impact of tuition increases in the second half of 2025. Income from operations before interest and income taxes was $0.8 million for the six months ended June 30, 2026, and a loss of $3.2 million for the six months ended June 30, 2025, respectively, an improvement of $4.0 million. The improvement was primarily due to the $17.0 million revenue increase, partially offset by increases of $4.9 million in advertising costs, $3.2 million in classroom and course materials costs, $2.7 million in employee compensation costs, $1.4 million in bad debt expense, and $1.3 million in technology costs, as compared to the prior year period.

Liquidity and Capital Resources

Liquidity

Cash, cash equivalents, and restricted cash were $146.5 million and $176.5 million at June 30, 2026, and December 31, 2025, respectively, representing a decrease of $30.0 million, or 17.0%. The decrease was primarily due to the purchase of approximately $75.9 million in short-term investments, repurchases of common stock, and the additional principal paydown of corporate debt, partially offset by the collection of TA accounts receivable in the Military+ Segment. We have historically financed operating activities and capital expenditures with cash provided by operating activities. We expect to continue to fund our costs and expenses through cash generated from operations for the next twelve months and beyond. For more on our material cash requirements from known contractual and other obligations, please refer to the section entitled “Contractual Obligations” in Item 7 of Part II of our Annual Report.

In the second quarter of 2026, we began purchasing short-term highly liquid available-for-sale debt securities, consisting primarily of investment grade commercial paper and U.S. Treasury securities. The Company’s investment policy limits credit exposure by restricting investments to high-quality issuers and by establishing concentration limits.

We derive a significant portion of our revenue from our participation in ED’s Title IV programs, for which disbursements are governed by federal regulations. We have typically received disbursements under Title IV programs within 30 days of the start of the applicable course or term. Another significant source of revenue is derived from TA from the DoD and programs from the VA. Generally, VA funds are received within 60 days of the start of the courses to which they relate, and TA funds received within 30 days of the invoice date. Military+ generally invoices for TA approximately nine weeks after the start of a course, and may change its billing approach as in the past, which has had the effect of delaying payments from one period into another. For example, in July 2025, Military+ delayed billing to certain branches, further delaying payments until 2026, which could have an adverse impact on Military+’s ability to comply with the 90/10 Rule in 2026 or future years. The change in TA billing practice added to our accounts receivable as of December 31, 2025, and resulted in an increase to our leverage ratio as of December 31, 2025, under our Credit Agreement as defined and discussed in “Note 8. Long-term Debt”. During the six months ended June 30, 2026, Military+ collected approximately $33.3 million from TA related to the 2025 delayed billings.

On March 2, 2026, we completed the first step of the Combination, the Legal Merger, and on August 4, 2026, we completed the second step of the Combination, the Institutional Combination. For the years ended December 31, 2025, and 2024, we incurred $3.5 million and $2.2 million in professional fees, respectively, related to the Combination. For the six months ended June 30, 2026, we incurred $1.9 million in professional fees and expect to incur approximately $1.5 million in professional fees during the remainder of 2026 to complete the Combination.

That certain Credit Agreement dated as of September 1, 2021, as amended, by and among the Company, as borrower, the lenders from time to time party thereto, and Macquarie Capital Funding, LLC, as administrative agent and collateral agent, or the Prior Credit Agreement, contained financial covenants that required us to maintain a Total Net Leverage Ratio (as defined in the Prior Credit Agreement) of no greater than 2.00 to 1.00 and 0.75 to 1.00, respectively, which was subject to certain exceptions. The Total Net Leverage Ratio under the Prior Credit Agreement at December 31, 2025, was negative 0.30 due to the growth in both cash and earnings and the reduction in restricted cash.

On March 9, 2026, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and collateral agent, PNC Capital Markets LLC as joint lead arranger and bookrunner, and a syndicate of lenders, or the Lenders, or the 2026 Credit Agreement. The 2026 Credit Agreement provides for (i) a $90.0 million senior secured term loan, or the 2026 Term Loan, and (ii) a senior secured revolving credit facility in an aggregate principal amount of up to $40.0 million, or the 2026 Revolving Credit Facility, or, together with the 2026 Term Loan, the 2026 Facilities. The 2026 Revolving Credit Facility replaces our prior $20.0 million senior secured revolving credit facility under the Prior Credit Agreement, and the proceeds of the 2026 Term Loan, together with cash on hand, were used to repay the approximately $96.4 million principal amount outstanding under our prior $175.0 million term loan under the Prior Credit Agreement.

The 2026 Credit Agreement contains financial covenants that require us to (i) maintain a Consolidated Total Net Leverage Ratio of no greater than 2.50:1.00, (ii) maintain a Consolidated Interest Coverage Ratio of no less than 2.50:1.00 and (iii) maintain a minimum balance of domestic unrestricted cash and cash equivalents of $40.0 million. The Consolidated Interest Coverage Ratio (as defined in the 2026 Credit Agreement) reflects a ratio of consolidated EBITDA to consolidated interest expense. The Consolidated Total Net Leverage Ratio, under the 2026 Credit Agreement, at June 30, 2026, was negative 0.11. For more information on the 2026 Facilities and their terms, please refer to “Note 8. Long-Term Debt”.

Capital expenditures could be higher in the future as a result of, among other things, additional expenditures for technology or other business capabilities, the maintenance of existing campuses at Health+, the opening or closing of campuses or the consolidation of existing campuses at Health+, the acquisition or lease of existing structures or potential new construction projects, and necessary tenant improvements that arise as a result of our ongoing evaluation of our space needs and opportunities for physical growth. We also expect to continue to explore opportunities to invest in the education industry, which could include purchasing or investing in other education-related companies or companies developing new technologies.

Share Repurchase Program

On March 10, 2026, the Board approved a common stock repurchase program of up to $50 million in the aggregate. The program replaces our prior repurchase authorizations. During the three and six months ended June 30, 2026, the Company repurchased 70,365 and 88,205 shares of common stock, respectively. As of June 30, 2026, there remains $45.0 million available under our share repurchase authorization.

Operating Activities

Net cash provided by operating activities was $75.4 million and $51.8 million for the six months ended June 30, 2026, and 2025, respectively. The increase in cash from operating activities was primarily due to the collection of TA accounts receivable in our Military+ Segment, related to the 2025 change in TA billing approach, our improved financial performance, and other changes in working capital due to the timing of receipts and payments. Accounts receivable at June 30, 2026, decreased approximately $30.2 million compared to December 31, 2025, primarily related to TA collections in our Military+ Segment. Cash flow provided by accounts payable, accrued liabilities, and accrued compensation and benefits at June 30, 2026, were approximately $5.6 million, due primarily to increased advertising accruals at June 30, 2026.

Investing Activities

Net cash used in investing activities was $83.2 million for the six months ended June 30, 2026, compared to $15.4 million of net cash provided by investing activities for the six months ended June 30, 2025, mainly due to purchases of short-term investments of $75.9 million during the three months ended June 30, 2026. For the six months ended June 30, 2025, cash provided by investing activities included $23.0 million in proceeds from the sale of assets held for sale.

Financing Activities

Net cash used in financing activities was $22.2 million and $49.5 million for the six months ended June 30, 2026, and 2025, respectively. The decrease in cash used in financing activities in the current year period is primarily due to the refinancing of our corporate debt which included a $6.5 million net principal paydown and $1.8 million for debt issuance costs. Financing activities for the six months ended June 30, 2025, included our redemption of Series A Senior Preferred Stock in June 30, 2025 for $43.1 million and preferred stock dividends paid of $2.8 million.

Contractual Commitments

We have various contractual obligations consisting of operating leases and purchase obligations. Purchase obligations include agreements with consultants, contracts with third-party service providers, and other future contracts or agreements.

During 2026, the Company entered into two operating lease agreements for new campus locations in Florida and Michigan as part of its continued campus expansion efforts. The leases are expected to commence in the fall of 2026 and spring of 2027, respectively, and have aggregate contractual rental commitments of approximately $8.1 million. The Company will recognize the related right-of-use assets and lease liabilities upon lease commencement in accordance with ASC 842. For a summary of our contractual obligations, please refer to Item 7 of Part II of our Annual Report.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market Risk

We had no material derivative financial instruments or derivative commodity instruments as of June 30, 2026. We maintain our cash and cash equivalents in bank deposit accounts, money market funds, and U.S. Treasury bills, and investment grade commercial paper with original maturities of less than three months. The bank deposits exceed federally insured limits. We have historically not experienced any losses in such accounts. Our short-term investment portfolio includes U.S. treasuries and investment grade commercial paper with original maturities ranging from three months to one year. We believe we are not exposed to any significant credit risk on cash and cash equivalents or our short-term investments. Due to the short-term duration of our investment portfolio, the low yield on the portfolio, and the low risk profile of our investments, a 10% increase or decrease in interest rates would not have a material impact on the fair value of our portfolio.

Interest Rate Risk

We are subject to risk from changes in interest rates primarily relating to our investment of funds in U.S. Treasury securities and investment grade commercial paper issued at a discount to their par value. Our future investment income will vary due to changes in interest rates.

In the normal course of business, we employ established policies and procedures to manage our exposure to changes in interest rates. For every 100 basis points increase in Term Secured Overnight Financing Rate, we would incur an incremental $0.9 million in interest expense per year, excluding any impact offset from the interest rate cap agreement.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) as of June 30, 2026. Based upon the evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2026.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we have been and may be involved in various legal proceedings. We currently have no material legal proceedings pending.

Item 1A. Risk Factors

An investment in our stock involves a high degree of risk. You should carefully consider the risks set forth in the “Risk Factors” section of our Annual Report and the other information set forth in this Quarterly Report on Form 10-Q, our Annual Report, and the additional information in the other reports we file with the SEC. If any of the risks contained in those reports actually occur, our business, results of operations, financial condition, and liquidity could be harmed, the value of our securities could decline, and you could lose all or part of your investment. There have been no material changes in the risk factors set forth in the “Risk Factors” section of our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Repurchases

The table and footnotes below provide details regarding our repurchase programs (unaudited):

(1) On March 10, 2026, our Board approved a common stock repurchase program of up to $50.0 million in the aggregate. This program replaces the prior repurchase authorizations described in footnotes 2 and 3 of this table.

(2) On December 9, 2011, our Board approved a common stock repurchase program under which we could annually purchase up to the cumulative number of shares issued or deemed issued in that year under our equity incentive and stock purchase plans. The authorization under this repurchase program was terminated in connection with our March 2026 purchase authorization as described in footnote 1 of this table.

(3) On May 2, 2019, our Board approved a common stock repurchase program of up to $35.0 million, and on December 5, 2019, our Board approved an additional authorization of up to $25.0 million. Further, on November 27, 2023, our Board approved an additional authorization of up to $10.0 million. The authorization under this program was terminated in connection with our March 2026 purchase authorization as described in footnote 1 of this table.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

The Company and Mark Arnold, President of RU, determined on August 5, 2026, that his employment will end effective August 20, 2026. Subject to his execution and non-revocation of a separation agreement and general release of claims, Mr. Arnold will receive severance benefits under the terms of the American Public Education, Inc. Executive Severance Plan (the “Plan”) consistent with the provisions for a termination of Mr. Arnold’s employment by us without “Cause” or by Mr. Arnold for “Good Reason,” each as defined in the Plan. A copy of the Plan is filed as Exhibit 10.2 to our Current Report on Form 8-K filed on May 15, 2017. We have begun the process of identifying the next leader of our Health+ division.

Rule 10b5-1 Trading Arrangements

During the three months ended June 30, 2026, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, except as described in the table below.

Name and Title Date Adopted Character of Trading Agreement Aggregate Number of Shares of Common Stock to be (Sold) Purchased Pursuant to Trading Agreement Duration

James Kenigsberg Chief Innovation and Technology Officer May 14, 2026 Rule 10b5-1 Trading Arrangement Up to (9,600)(1) 4/30/2027(2)

(1) The figure presented represents shares to be sold upon the vesting of equity awards. The actual number of shares under the trading arrangement may be different than the aggregate number of shares listed due to tax withholdings.

(2) This trading arrangement will expire upon the earlier to occur of the completion of all eligible sales during the final sale period from April 22, 2027 through April 30, 2027, and the date listed in the table.

Item 6. Exhibits

(1) Filed herewith.

(2) Furnished herewith.