Thank you for standing by. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to today's American Public Education second quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. And if you'd like to withdraw your question, simply press star one again. I would now like to turn the call over to Brian Prinevo, Head of Investor Relations.

Brian? Thank you, Greg, and good afternoon, everyone. Welcome to American Public Education's conference call to discuss second quarter 2025 results. Joining us on the call today are Angela Selden, President and Chief Executive Officer, Rick Sunderland, Executive Vice President and Chief Financial Officer, and Gary Jansen, Senior Vice President of Strategy and Growth. Materials for the call today are available in the events and presentation section of apei's website statements made during this conference call and any accompanying presentation regarding apei and its subsidiaries that are not historical facts may be forward-looking statements based on current expectations assumptions estimates and projections forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, such as those identified in our Form 10-K under the heading Risk Factors, including those related to potential impacts from government shutdowns or changing federal or state government policies, practices and laws, including impacts on revenues or the timing of receivables. Forward-looking statements may sometimes be identified by words like anticipate believe seek could estimate expect can may plan potentially project should will would and similar or opposite words we're looking statements include without limitation statements regarding expectations for registrations and enrollments revenue earnings and adjusted EBITDA and other earnings guidance our foundation for growth combination of our institutions campus and corporate center consolidation, the redemption of our preferred stock, future governmental or regulatory actions, and a response to those actions, changing market demands, and our ability to satisfy such demands and any other company initiatives. This presentation contains references to non-GAAP financial information. A reconciliation between the non-GAAP financial measures we use and the most directly comparable GAAP measures is located in the appendix of today's presentation and in the earnings release. Management believes that the presentation of non-GAAP financial information provides useful supplemental information to investors regarding its results of operations and should only be considered in addition to and not as a substitute for or superior to any measure of financial performance prepared in accordance with GAAP. Now, I'd like to turn the call over to API's President and CEO, Angela Selden. Angie, please go ahead.

Thank you, Brian. Good afternoon, and thank you for joining American Public Education's second quarter 2025 earnings call. We are very pleased with our outperformance in the second quarter of 2025, and notably our accomplishments in simplifying the business and the balance sheet. We have several areas to highlight during today's call. First, APEI outperformed second quarter 2025 financial guidance. In the second quarter, we exceeded the top end of our guidance for revenue, net income, EPS, and adjusted EBITDA. Disciplined operations at our education units, along with continued enrollment growth, have helped to drive improved financial performance. Next, several important simplification milestones were achieved that improve our balance sheet and overall financial position. We completed the sale of two corporate administrative buildings collecting over $22 million. The Department of Education removed restrictions on the $24.5 million letter of credit from the 2021 acquisition of Rasmussen. that cash is now unrestricted on our balance sheet. And finally, we redeemed our preferred equity for a total amount of approximately $43 million, which was fully funded by the proceeds from the building sale and the release of the restricted cash. Going forward, this will allow APEI annually to save $6 million from the elimination of the cash dividend payments. We believe we are now positioned with an improved capital structure and more financial flexibility to invest in growth initiatives. Third, after quarter end on July 25, 2025, we completed the sale of Graduate School USA. We believe this is a great outcome for APEI, for Graduate School, its employees, and its students. As we determined that Graduate School was no longer a strategic fit for our future growth strategy, we are pleased to find the business a new home, which is more aligned with the graduate school mission and market position, allowing us to focus on growing our core healthcare and military businesses. Next, we are pleased with the double-digit enrollment growth at both Rasmussen and Hondros of 10% and 18% respectively, further driving expanding margins and greater profitability. Fifth, I'm pleased to announce the appointment of James Königsberg as our Interim Chief Innovation and Technology Officer. APEI is investing in intelligent infrastructure, predictive analytics, and personalized digital tools to modernize every part of the learner journey. James will lead our transformation efforts aimed at improving access and student persistence and delivering more responsive mission-aligned educational experiences james has been an invaluable resource on our apei board of directors and he will be stepping away from his board service to focus on this important assignment james brings more than two decades of experience leading technology strategies in education and has served as a strategic advisor to a number of high-growth startup and education-focused companies. Next, we continue to move closer to overall simplification regarding the combination of APUS, Rasmussen, and Hondros into a single accredited institution. We have received HLC and state agency approvals. Discussions with the Department of Education and HLC are ongoing regarding the timing to complete the transaction. Finally, in summary, the improvements to the business and finance position provide us an opportunity to strengthen our full-year guidance. Our CFO, Rick Sunderland, will give a deeper dive into updated 2025 guidance, but at a high level. Even with the sale of graduate school, we are maintaining our full-year revenue guidance, which now reflects the exclusion of five months of graduate school revenue for the remainder of 2025. And we are increasing adjusted EBITDA guidance, expected now to be between $81 million and $88 million. I'd now like to provide some additional details about the 2Q2025 results, starting first with APEI's nursing and healthcare institutions. Rasmussen continues to produce strong results. Rasmussen's enrollment increased from 7% in 2Q25 to 10% in 3Q25, representing the fifth consecutive quarter of year-over-year enrollment increases. Our three-pronged strategy to improve outcomes, manage costs, and grow enrollment has continued to produce positive results. As previously discussed, Rasmussen's higher fixed cost structure allows positive enrollment trends to significantly enhance the flow-through margin, leading to improved operating leverage and profitability. With our current campus footprint we believe our strategy to fill the back row continues to effectively increase enrollments and improve EBITDA flow through on each incremental student at Hondros as previously reported 2Q25 enrollment was strong with 13 percent growth as compared to 2Q24. 3Q25 enrollment increased to 18% year over year to 3,700 students. We believe that the combination of Rasmussen and Hondros will provide us with a robust platform to further scale enrollments and increase margins. Turning now to APEI's online university educating our nation's military, veterans, and their families, called APUS. Overall net course registrations increased 7% year-over-year and revenue increased over 6%. We expect continued year-over-year registration growth in the low to mid-single digits for the remainder of 2025. In future years, we believe we can accelerate revenue and registration growth at APUS by offering our courses and degree programs to more veterans, more family members of the military, and expanding our penetration with the current active duty military students. Overall, given the consistent financial and operational performance we've delivered in the last 18 months, we will host an Investor Day on November 20, 2025, to share our outlook for 2026 and beyond. We remain enthusiastic in our Our ability to continue delivering results and prioritizing growth drivers deliver profitability while providing more students accessible and affordable educational opportunities. We look forward to welcoming you, our investors and analysts, to New York City. Invitations are forthcoming. In closing, APEI enables students to experience a valuable, lifelong return on their educational investment. Our mission remains to power purpose, potential, and prosperity for those in service of others. Each of our education units is purpose-built to deliver accessible and affordable higher education across a diverse range of subjects. I'd like to thank each of our employees and our educators that work tirelessly to make our mission a reality. With that, I will now turn the call over to APEI CFO, Rick Sunderland.

Rick Sunderland Thank you, Angie. Total revenue in the second quarter was $162.8 million, an increase of $9.9 million, or 6.5 percent, from the prior year period. Second quarter revenue growth was driven by increased revenue at Rasmussen, APUS, and Hyndros, partially offset by lower revenue at graduate school. Total costs and expenses in the second quarter were $155.7 million, an increase of $5.1 million, or 3.4%, as compared to the second quarter of 2024, and include $1.7 million in professional fees in general and administrative expenses related to the combination of APOS, Rasmussen, and Honduras, and the sale of graduate school. The increase is primarily driven by increases in employee compensation costs, professional fees, and classroom and course materials costs, partially offset by decreases in information technology costs, depreciation and amortization expenses, and occupancy costs. In the second quarter, net loss available to common shareholders was a net loss of 0.3 million compared to a net loss of 1.2 million in the prior year. As noted earlier, the second quarter loss included a $3.5 million loss on the redemption of our preferred stock. Second quarter diluted net loss per common share was a loss of $0.02 compared to a loss per diluted share of $0.06 in the prior year period. Second quarter adjusted EBITDA was $15.1 million, a $4.2 million, or 38% increase over the prior year period. This was above the top end of the guidance range and represented an adjusted EBITDA margin of 9.3 percent as compared to 7.1 percent in the prior year. At APUS, second quarter revenue increased to 81.7 million, a 6.1 percent increase as compared to the prior year period. Second quarter net course registrations increased 7.3 percent as compared to the prior year. For the quarter, APUS EBITDA was $22.4 million, and EBITDA margin was 27.4 percent, as compared to 25.3 percent in the prior year. At RAS lesson, second quarter revenue was $59.5 million, an increase of 12.2 percent, as compared to the second quarter of 2024. In the second quarter, online enrollment increased 12.2 percent, on-ground enrollment increased 3.2 percent, and total enrollment grew 7.4 percent to approximately 14,600 students as compared to the prior year period. In the second quarter, Rasmussen delivered positive EBITDA of $0.2 million as compared to an EBITDA loss of $4.7 million in the prior year. At Honduras, second quarter revenue was up 10.5% to $18.1 million as compared to the prior year period due to continued enrollment growth. For the quarter, Hondros' total enrollment increased 13.5% to approximately 3,700 students. At Hondros, the second quarter EBITDA was $0.1 million as compared to an EBITDA loss of $0.4 million in the prior year period. Revenue at graduate school included in corporate and other was $3.4 million as compared to $6.4 million in the prior year period. For the quarter, graduate school EBITDA was a loss of $2.5 million compared to an EBITDA loss of $0.7 million in the prior year period. As noted earlier, in July we completed the sale of graduate school. Cash flow from operations for the first six months of 2025 was $51.8 million compared to $33.2 million in the prior year. At June 30, 2025, total cash, cash equivalents, and restricted cash was $176.6 million, an increase of $17.6 million from year-end 2024. Restricted cash included a $24.5 million restricted certificate of deposit to secure a letter of credit related to Rasmussen's composite score prior to our acquisition. In May, the letter of credit was released by Ed, and therefore the cash is no longer restricted. At June 30, 2025, total unrestricted cash and cash equivalents was $174.9 million compared to $131.9 million at December 31, 2024, an increase of $43 million. Additionally, as noted earlier, in the second quarter, we redeemed all our outstanding preferred stock for $43.1 million and completed the sale of two corporate administrative office buildings in Charlestown, West Virginia, for net proceeds of $22.5 million. Today, with these changes, including the sale of graduate school, we believe we are well-positioned to invest in the continued growth of our schools. CapEx totaled $7.6 million in the first half of 2025, compared to $11.4 million in the prior period. Principal and API's term loan at June 30th was unchanged at $96.4 million, and our $20 million revolving credit facility remains fully available. With unrestricted cash of $174.9 million, APEI continues to be net cash positive. Turning now to our third quarter and full year outlook, which covers forward-looking statements subject to the various risks noted earlier. For the third quarter 2025, AQS total net course registrations are expected to be between 97 000 to 99 000 registrations representing a five percent to seven percent increase when compared to last year at rasmussen and hondras third quarter student enrollments are actual because of the quarterly starts at these schools at rasmussen third quarter total on-ground enrollment increased 11.7 percent to approximately 6 700 students and total online enrollment increased 10.8% to approximately 8,200 students for an aggregate enrollment of approximately 14,900 students. This represents a 10.4% increase when compared to the third quarter of 2024. At Hondros, third quarter student enrollment increased 17.6% year-over-year to approximately 3,700 students. In the third quarter of 2025, consolidated revenue is expected to be between $159 million and $161 million. The company expects third quarter net loss available to common shareholders to be between a loss of $2.9 million and $0.8 million or between a loss of $0.15 and $0.04 per diluted share. This includes an anticipated $7 million to $8.5 million loss related to the sale of graduate school third quarter adjust 2025 adjusted evita is expected to be between 15 million and 17 million for the full year 2025 there is no change to our anticipated consolidated revenue of between 650 million and 660 million net income available to common shareholders for the year is expected to be between 18 million and 24 million this guidance takes into account the loss on the preferred equity redemption and losses associated with the sale of graduate school we are increasing our full year 2025 adjusted EBITDA guidance to be between 81 million and 88 million full year capex is expected to be between 18 million and 22 million the updated full year adjusted EBITDA and capex guidance translates to free cash flow expectations for the year defined as adjusted EBITDA less capex to be between 59 million and 70 million. I will now pass it back to Angie for closing remarks, after which we will begin our question and answer session.

Thank you, Rick. Prior to concluding our prepared remarks and opening the call to questions, I do want to take a moment to thank Steve Summers, who is leaving after five years with APEI. He has been instrumental in leading corporate strategy, driving investor relations, and leading graduate school to an outcome where it can thrive strategically with its new owners. Steve has been a great partner and advocate for me and for APEI. We wish him all the best in his next endeavors. Today, we welcome Gary Jansen to our APEI earnings team. Gary has played a critical role at APEI for over 18 years and now leads growth and strategy for APEI. We have spent much of the past year setting expectations for our investors and other stakeholders and then delivering on those results. Rasmussen is delivering consistent, positive enrollment growth and profitability. APUS continues to deliver consistent growth and a high margin of profitability. We set expectations for redeeming our preferred equity, selling corporate buildings, simplifying our business structure, and we continue to deliver on those promises. Our enterprise was purpose-built to deliver affordable and accessible educational opportunities in fields which are in high demand. We believe that this platform and the sector tailwinds set APEI up to accelerate growth and bring more educational opportunities to a greater audience across the country. We are as optimistic today as we've ever been about the long-term potential of our company. And with that, I would now like to hand the call back to Greg, the operator, to begin our question and answer session. Greg?

Thank you, Angie. At this time, I would like to remind everyone in order to ask a question, simply press star and the number one on your telephone keypad. Once again, star one. And we will pause just a moment to compile the Q&A roster. All right, looks like our first question today comes from the line of Raj Sharma with Texas Capital. Raj, please go ahead.

Yeah, thank you for taking my questions and congratulations on solid ongoing execution and solid results. Really very appreciated. I had a question on the military business. I know that you've commented in the past that the military had a great enrollment and best in 10 years and the prospects there seem good and you seem to have raised the guidance on APIS. Is there any more color on what you're seeing out there in terms of potential enrollments and also any more clarity on the tuition assistance that was supposed to be from the big beautiful bill, the $100 million from the Department of Defense, any clarity on how that flows through the system?

Great question, Raj. Thanks. I'm going to hand it to Rick for him to answer. Go ahead.

You want me to talk about the big, beautiful bill? Yeah. So, Raj, it's in the bill. It's in the big, beautiful bill. It's also in the National Defense Authorization Act, right? One authorizes, I believe, the other appropriates. And so the funds are there available. I think that, Raj, combined with the military meeting its annual recruiting goals early this year, and by the way, I don't think they've actually met their recruiting goals in recent years, so not only did they meet them, but they met them early in the year, sets us up as the largest provider of active duty military education to benefit from those funds. One thing to understand is the $100 million is authorized through September of 2029. So it's a four-year authorization. And I think we've talked about how the funds could be spent over a number of years with the increased funding levels then benefiting all education providers with us being the largest in any individual year. So we are seeing strength in military registrations, and you can comment on that. I think it has everything to do with the reputation and the quality and the outcomes of American Military University. But having the funding there just supports additional interest in and registrations with AMU and APU.

Yeah, I'll just click down on the question around how can we benefit from the $100 million. As Rick mentioned, it's spread over four years. You know, we have the estimated 30% share of all active duty take courses from anyone. So if you take $100 million, $30 million, if it's all spread equally across providers, it would be $30 million for us over four years. But our team on the ground has not yet been able to determine how that $100 million is going to be distributed, made accessible, or in any other way added to, you know, the dollars available for education providers. So right now it's our belief that it's really about allowing more active duty to enroll because they haven't demonstrated an increase in the reimbursement rate. They haven't demonstrated an increase in the total number of classes or the total dollar reimbursement on an annual basis yet. But there is talks that those things are under consideration. But no more information has been provided, Raj, since the last call we had, earnings call we had, to provide that information. So we're all waiting for more information.

That's right. I'd like to add one point. So there have been times, Raj, when we've been asked whether that funding is at risk. And I think we have evidence now that the funding is not only at risk, but it's going to be elevated.

Not only not at risk.

Not only not at risk, but it's going to be elevated, right, demonstrating directly the Department of Defense's commitment to education and military, which we said it's an all-volunteer force. they recruit on, we'll give you a skill and we'll give you an education, and they're putting money behind the second of the two.

Got it. That's super helpful. Thank you. And then just lastly, I noticed that Rasmussen's margins, a great performance on the enrollment increases, Rasmussen's margins were down sequentially Q2 versus Q1, you know, on flat revenues. anything in particular going on there and then I have a follow-on question on just overall it seems like Rasmussen and Honduras are at break-even levels and so you're you should be seeing as you've talked about in the past you know operating leverage kicking in in a bigger way is a lot of the increase in the EBITDA coming from largely or you know projected to be coming from that and or is GNA also kind of coming down or changing the GNA levels? So, I'm sorry, long-winded two questions.

Yeah, let me start with the first one, and then you may have to clarify the second one. So, the first one, sequentially, you're correct. The margin is lower in Q2. In the first quarter uh they implemented a new what would you call that the provider it's not the lms but it's a course delivery yeah it's a course materials for the nursing program yeah rush a new vendor a new provider of course materials for the nursing program and the management team at rass thank them negotiated what i'll describe as a discount in the first quarter the first quarter of that new vendor relationships. And so when we get to the second quarter, the costs there are fully loaded. You should consider that to be kind of the run rate cost as it relates to course materials. The other element sequentially would be all the schools and ATI have their annual salary increases, merit increases beginning April 1st. So, the second quarter has a load of salaries that reflects the new compensation for all employees.

Got it. Thank you. And then, so the second part was, you know, the break-even. I mean, you've been talking about filling in seats, you know, the extra seats, and that would drive the margins or drive profits down to the bottom line. Is that what's happening? Rasmussen is at breakeven. Honduras is at breakeven. And operating leverage here kicks in in a bigger way, improving profitability moving forward. Is that what's happening? And or also is GNA, do you expect GNA levels to stay here or come down?

Yeah. Well, there's no question. So, we just do quarter to quarter Q1 to 24 to Q1 to 25, right? There's almost a $4.85 million change in EBITDA there, and the EBITDA flow through is about 75, 76%. The same is true in Q2, where we are at minus 4.7 for the second quarter, and we're positive 0.2 in the second quarter, and the flow through, again, is above 75%. So, there's such a dramatic flow through on that next dollar of revenue now that we will expect continued acceleration as the enrollments continue to grow at Rasmussen. um the other part of your question is about uh gna uh we pay very careful attention to our non-student facing investments and um and we do not anticipate big step fixed increases in those um expenditures uh for the remainder of 2025. um the only thing that will increase will be those things that are tied to, you know, volume increases in the students, like faculty, for example, of whoops and materials, et cetera.

And I would add, Raj, you were focused on GNA. We're focused on every part of the P&L, right? In S&P, we're seeing continued improvement, meaning reductions in our advertising costs at RAS while seeing improvements in lead flow, right? And and you've got the enrollment growth so I would I'd want to call out the efficiency we continue to experience in in marketing across the enterprise and specifically at RAS got it thank you super helpful thank you again I'll take it offline a great great continued execution congratulations thank you thank you so much Raj thank you very much yeah absolutely thanks Raj and our next question comes from the line of max michaels with lake street capital markets max please go ahead hey guys thanks for taking my question and uh congratulations on the sale of um graduate usa

as well as uh cleaning up the balance sheet a little bit here a quick question on rasmussen real quick now with the department of ed re unlocking basically that 24 and a half million dollars and you guys talked about the restriction you had on from adding new programs and locations Do you guys have internal expectations around new program ads and campus expansions at the company?

Yeah, that's a great question. We have locked in November 20th of this year for an investor meeting that we're hosting in New York City. And we're really excited to share a multi-year view of our campus opening strategy, our program addition strategy. So, we look forward to hosting Lake Street to share that multi-year view with you.

Okay. Thank you, guys. And then just maybe a quick question around the NCLEX scores here. I know you guys don't share the data anymore, but how would you say those trended in Q2?

We do not have all Q2 results in, but they're pacing as we had expected. So we don't have any concerns at this point, but we're still awaiting a few, oddly, a few campus-state combinations to report their results. So we're paying careful attention to that. We know they're not posted publicly yet either. So there's a slowdown in posting results. We're not sure why.

And then last one from you guys, just with the Department of Ed releasing that letter of credit, so $24.5 million, And that $22 million coming in from the sale of the administrative buildings and then the $6 million in savings you guys are getting from cleaning up the preferred. How would you rank maybe investment going forward in 2025 in terms of the company?

Yeah, thank you for that question. So let me rank them, and Angie can correct my ranking if she doesn't agree. First of all, and I've been saying this, we intend to invest in our growth initiatives. So that would be healthcare expansion, which we've talked about, and technology. And we introduced a change in the technology structure at API. We're interested in tuck-in acquisitions, and I would generally characterize that as campus, single or small campus type acquisitions. You all know we have to keep a minimum amount of cash for regulatory compliance, and we do pay attention to our leverage ratio. And last on my list would be stock repurchases and or dividends. What were the stock repurchases in Q2? We didn't do any in Q2. Not in Q2. We have an open authorization, but we have not done that. Remember, it was just in May that the LC was released, and we're looking at our strategy. We're doing that work now. uh and more of that will come uh in november the priority was the redemption of the preferred yeah we we got the preferred redemption done awesome guys thanks for taking my questions thank you very much yes thanks max and our next question comes from the line of stephen sheldon with william blair stephen please go ahead hey team you have matt filik on for stephen sheldon great work this quarter, and thank you for taking my questions.

When you're able to consolidate the educational units into one platform, can you talk about some of the revenue and cost synergies that provides for the business?

You bet. And Matt, you know, we'll be able to give you more precise numbers and expectations on that in the November investor meeting. But directionally, When you think about the full ladder of nursing curriculum that Rasmussen offers, we'll be able to transfer access to that curriculum directly to all the 800 campuses and the 3,700 students and 6,000 alumni that can benefit from the advancement of post-licensure nursing education that's available from Rasmussen. Additionally, the combination will allow our campus-based students and their friends and family to have access to the entire course catalog from APUS and the course catalog from Rasmussen. So today, as we've spoken in the past, Hondros has two programs it offers. APUS offers 200 programs. Rasmussen offers over 60 programs. And so from any place, a student may find an APEI school. So the marketing dollar we spend, whether they land at APUS, they land at Hondros, or they land at Raffleson, they'll now have access to over 250 different choices for educational opportunities for themselves. Certainly, the pre-licensure nursing is much more geographically oriented, but for those people who are interested in online education, they're going to have a very robust portfolio of choices.

Great. That's super helpful, Angie. And then I just had a quick follow up for Rick. You guys have done a really nice job showing up the balance sheet and Rick appreciate the additional detail on the capital deployment outlook from here, but was wondering if you could maybe just remind us how much cash do you feel you need on hand to run the business? And then what does pro former cash look like after the sale of Graduate School USA?

The answer to the question about how much cash do you use to run the business depends on how we're going to use the cash, right? And that's all part of the multi-year planning process that we're going through. When I say how we use the cash, we want to maintain our composite score above the 1.5 and different uses have different impacts on that composite score. but we do feel uh confident that the amount of cash we have now will allow for the types of activities that i spoke about a few few minutes ago um the second i'm sorry what was the second question yeah just wondering on what performance looks like well it's a it's a it's a real thank you for the question it's really interesting As we said, there's a loss associated with the sale. Some of that is actually cash, is a cash loss in the sense of paying some closing costs. But what we really did, and when we focused on the balance sheet, is we had a present valued $28 million lease liability associated with the facility in Washington, D.C. And with the sale of graduate school, that liability conveyed to the buyer. And so we, when we talk about cleaning up the balance sheet, there's an element to that, which is releasing our, you know, relieving ourselves of a very large lease liability for a facility in Washington, D.C.

Got it. Yep. That makes sense. Thanks for the added color there. Thank you, team. And again, nice work this quarter.

Thank you, Matt. Matt.

Thanks, Matt. And our next question comes from the line of Luke Horton with Northland Securities. Luke, please go ahead.

Yeah. Hey, guys. Thanks for taking the questions and congrats on the great quarter.

I just wanted to clarify on the GSUSA sale.

So, your revenue guidance for the year was reiterated, but that's excluding, if we call it kind of 7 million revs that they've done in the, the GSUSA has done in the first half of the year and annualized that. It's really like a kind of a revenue raised guidance. Just wanted to clarify that wasn't initially part of the range.

That's correct. We had, when we gave the original guidance, we had no buyer for graduate school. So we gave a full year guidance that included a full year of revenue for graduate school. So now we are reiterating guidance and we are eliminating the five remaining months, August through December, of revenue that we would have otherwise collected from graduate school if we had still owned them. So you're correct about what you said.

Okay, awesome. And then just on the institution consolidation, just want to check timelines still remain intact here, kind of effective, or I guess done by 3Q, effective by year end. And then I guess specific to that on the marketing channel, I guess, how does that kind of streamline the marketing and user or student acquisition being under one umbrella and being able to offer those courses or the broad catalog of courses to all students?

Yeah, great question. So, timeline-wise, we're really happy that we've got all the approvals lined up, right? We've got our accreditor approvals. We've got our state approvals. We have been in active dialogue with our accreditor, HLC, and the Department of Education on trying to finalize the timeline. Frankly, the department is very busy right now and have fewer people to do the work than they've enjoyed in the past. And so, they're trying to find a timeline that works for HLC, for APEI, and for the department. So, we're waiting on a confirmation of a timeline from Ed. And then to answer your question on what happens in the future system, what we're excited about is that we'll have a system landing page. We'll have a place where people who might be interested in knowing more about our university system can go. We'll have places for them to explore each of the different divisions, which will be APUS Global, our military business and our healthcare business. And so you're right that they'll be able to see from that single landing page, all the different choices that they can consider. Certainly as it relates to our campus-based nursing programs, we expect that they will not be coming in at the high level APUS landing page, but instead they'll be coming in at the local market nursing brand. So they'll come in at the RAS nursing brand or the Hondros nursing brand. We're not changing those brands because that'll be much more of a local market kind of boots on the ground marketing approach. And so we're going to have the opportunity to market to students either way, either at the top of our brand tree or at the bottom where, you know, where the campuses will be visible with the name brands that they'll see in the local markets.

Yeah, I would add marketing is already a shared service, right? And so, we do experience the efficiency of that cost across the enterprise. But everything Angie said is correct.

But we don't really share the leads today.

That's what you're saying is, yeah, we share the expertise, but we don't share the leads as you were describing.

Okay. Got it. Yeah, that's helpful. Definitely appreciate the contact there, and congratulations on another great quarter.

Thank you so much. Great to hear from you.

Great. Thanks, Luke. And our final question today comes from the line of Jasper Bibb with Truist Securities. Jasper, please go ahead.

Hey, good afternoon, everyone. Just one for me tonight. I joined a little late, so apologies if this is already covered in the third remarks. But if not, just hoping you could comment on the big, beautiful bill. I'm curious if you see any exposure to new accountability standards there across any of your portfolio schools or any other potential implications from the bill to highlight for us.

Yeah. Thanks, Jasper. We are very pleased with the minimal impact that the big, beautiful bill has on our business. The positive, if you didn't hear our commentary on the question from Raj, there was additional funding put into TA of $100 million that came through the bill that we believe will flow through and widen the TAM, make a bigger TAM for our active-duty military students. So we believe that that is a benefit to us. And the other components of the big, beautiful bill we don't see as having a negative impact on our students or on our business. And I'll turn it over to Rick for anything.

You mentioned the accountability standards, right? to hear the sort of the prior, the legacy gainful employment metrics, which we've always done very well with. When you build universities that deliver good outcomes, high quality, at a very affordable price, and in very, you know, relevant degrees and growing, you know, industries like nursing, you're going to do well against gainful employment. So, we don't see much impact there. The other impacts that get some discussion have to do with the lifetime caps on various loan categories. And when you run universities that are very affordable, your students aren't borrowing debt at the levels where they should be significantly impacted by that. I'm sure there are probably a few, but it's really not an important element to our business.

Okay, great. Well, I figured that was the case. Thank you for taking the questions and looking forward to the investor day.

Looking forward to seeing you, Jasper. Thanks for the question.

Yeah, thank you, Jasper. And that does conclude our question and answer session. I'd now like to turn the call back to Angie for closing remarks.

You bet. Thank you very much, Greg. And thank you to all of you who have joined the call today. We really look forward to seeing all of you in New York City on November 20th for our first Investor Day, where we're going to share with you updates on our progress, focus on our growth, but certainly a multi-year view of how we intend to grow top line and bottom line results for our business. So, we hope that you'll join us for that Investor Day in New York City. And if there are questions you have that we didn't answer for you today, always feel free to reach out to the MZ Group. Brian Prennevo is on our call here today. They're our IR firm, and they'll be more than happy to get you connected with any of us, Gary, Rick, or Angie, in order to be able to be sure that we can answer your questions. So, thank you so much for the time today.

We look forward to speaking with you very soon. and ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may now disconnect your lines at this time. Have a wonderful day.