American Public Education's second quarter arrived with a structural question that had been hanging over the stock for the better part of two years: would the three-institution combination actually close? The answer landed five business days after the quarter ended. On August 4, 2026, the U.S. Department of Education approved, and APEI completed, the institutional combination of American Public University System, Rasmussen University, and Hondros College of Nursing into one Higher Learning Commission-accredited institution under the American Public University System name. The legal-entity merger had already closed on March 2, 2026; the second step, which was the regulatory gating event, finished the job. A single accredited institution now operates the online military-focused business, the campus-based nursing business, and the online healthcare-and-nursing business - one accreditation, one Title IV certification, one set of regulators to manage. The quarter is the first full report of the post-Combination operating model, and it reads as confirmation that the underlying businesses were never the problem.
The quarter itself is the strongest operating print in the file. Consolidated revenue rose 5.5% to $171.7 million and, excluding the Graduate School USA business that was sold in July 2025, organic revenue growth was 7.7%. Net income was $9.8 million ($0.52 diluted) versus a $4.5 million GAAP net income a year earlier that, after preferred dividends and the preferred-stock redemption loss, translated into a $(0.02) loss available to common stockholders. Adjusted EBITDA grew 36.8% to $20.7 million, a 12% margin versus 9% a year ago. The preferred-stock overhang that had been depressing the common-shareholder line is now gone - the Series A was redeemed in June 2025 - and the comparison is clean.
Both segments contributed. Military+ revenue grew 4.7% to $85.5 million on a 2.0% increase in net course registrations to roughly 98,300; segment operating income improved to $23.7 million from $21.4 million as employee compensation costs declined against a small advertising investment. Health+ revenue grew 11.0% to $86.2 million on a 6.6% enrollment increase, with a 9.2% lift in on-ground enrollment and a 3.4% lift in online; the segment swung to $0.3 million of operating income from a $2.4 million loss a year earlier, as the revenue increase absorbed the cost base. The two segments are now roughly equal in size - $85.5M and $86.2M - and Health+ has crossed into positive territory for the first time as a combined business. Management raised full-year 2026 revenue guidance to $690.0–$698.0 million, net income available to common stockholders to $46.5–$52.5 million, and Adjusted EBITDA to $96.0–$104.0 million, against FY2025 actuals of $648.9 million, $25.3 million, and $85.7 million. The midpoint of the new Adj EBITDA range, roughly $100 million, is more than 15% above the prior year.
The stock trades at roughly $45.13 (8/12/2026 close, the first session after the print), giving APEI a market capitalization near $829 million, an enterprise value of about $693 million, and roughly 7.0x trailing Adjusted EBITDA / 1.0x trailing revenue / 2.6x book. Net cash of about $135.5 million - $222.8M of cash, restricted cash, and short-term investments against $87.3M of total debt - underpins the balance sheet. The investment question is no longer whether the combination will close; it is whether management can compound Health+ into a steady-state mid-single-digit margin business while the Military+ engine continues to grow. The 36.8% Adj EBITDA print is the first evidence the answer is yes, and the raise is the company's own vote of confidence.