Revenue of $11.2 million; USU increases 9% year-over-year
Disciplined cost controls deliver operating income of $1.0 million
Positive Adjusted EBITDA of $2.5 million versus $1.5 million; Adjusted EBITDA margin of 22% versus 14%
Fourth consecutive quarter of positive operating cash flow of $0.5 million
PHOENIX, Dec. 15, 2025 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (OTCQB:ASPU) ("AGI" or the "Company"), an education technology holding company, today announced financial results for its second quarter of fiscal year 2026 ended October 31, 2025.
Second Quarter Fiscal Year 2026 Summary Results
Three Months Ended October 31,
Six Months Ended October 31,
$ in millions, except per share data
2025
2024
2025
2024
Revenue
$
11.2
$
11.5
$
22.7
$
22.8
Gross Profit1
$
8.4
$
8.1
$
16.7
$
15.6
Gross Margin (%)1
75
%
71
%
74
%
69
%
Net Income (Loss)
$
0.7
$
(1.1
)
$
1.1
$
(1.2
)
Earnings (Loss) per Share - Basic
$
0.02
$
(0.04
)
$
0.03
$
(0.05
)
Earnings (Loss) per Share - Diluted
$
0.01
$
(0.04
)
$
0.02
$
(0.05
)
EBITDA2
$
1.6
$
0.1
$
3.0
$
1.2
Adjusted EBITDA2
$
2.5
$
1.5
$
4.3
$
2.0
_______________
1GAAP gross profit calculation includes marketing and promotional costs, instructional costs and services, and amortization expense of $0.4 million and $0.5 million; and $0.8 million and $0.9 million for the three and six months ended October 31, 2025 and 2024, respectively.
2Non-GAAP financial measures. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 4.
Michael Mathews, Chairman and CEO of AGI, stated: "In the quarter, we delivered solid top-line stability coupled with material margin expansion, producing our third consecutive quarter of net income. Our continued disciplined execution, cost controls and restructuring initiatives keep Aspen Group on track to achieve approximately $1.5 million of additional quarterly G&A savings by the third quarter of fiscal year 2026. Our strategy to sustain profitability and cash flow from operations is working and positions us to boost enrollments through strategic reinvestments in marketing. We remain committed to our objectives of expanding student resources and achieving positive operating cash flow for fiscal year 2026."
Fiscal Q2 2026 Financial and Operational Results (compared to Fiscal Q2 2025)
Revenue declined by 2% to $11.2 million compared to $11.5 million. The following table presents the Company's revenue, both per subsidiary and total:
Three Months Ended October 31,
2025
$ Change
% Change
2024
AU
$
3,938,503
$
(835,190
)
(17)%
$
4,773,693
USU
7,280,742
594,656
9%
6,686,086
Revenue
$
11,219,245
$
(240,534
)
(2)%
$
11,459,779
Aspen University's ("AU") revenue decline of 17% year-over year is the result of lower post-licensure enrollments from the effect of decreased marketing spend initiated in the second half of Fiscal 2023.
United States University ("USU") revenue increased by 9% to $7.3 million. Despite the maintenance level of marketing spend, USU experienced growth this quarter due to continued organic lead flow, strong demand from existing students returning from inactive status and higher revenue per student driven by more students entering their second year of the MSN-FNP program, which includes clinical rotations, and tuition increases.
GAAP gross profit increased by $0.2 million to $8.4 million. Consolidated gross margin was 75% compared to 71%, AU's gross margin was 72% versus 67%, and USU's gross margin was 76% versus 74%. GAAP gross profit and gross margin increased primarily due to higher revenue at USU related to increased revenue per student combined with reduced cost of revenue at AU and USU driven by more efficient allocation of faculty resources.
AU instructional costs and services represented 22% of AU revenue, and USU instructional costs and services represented 21% of USU revenue. AU marketing and promotional costs represented 1% of AU revenue, while USU marketing and promotional costs represented less than 1% of USU revenue.
The following tables present the Company's net income (loss), both per subsidiary and total:
Three Months Ended October 31, 2025
Consolidated
AGI Corporate
AU
USU
Net income (loss)
$
651,738
$
(2,800,567
)
$
428,780
$
3,023,525
Per share information available to common stockholders:
Earnings per share - Basic
$
0.02
Earnings per share - Diluted
$
0.01
Three Months Ended October 31, 2024
Consolidated
AGI Corporate
AU
USU
Net income (loss)
$
(1,057,420
)
$
(1,611,277
)
$
(1,866,384
)
$
2,420,241
Per share information available to common stockholders:
Loss per share - Basic
$
(0.04
)
Loss per share - Diluted
$
(0.04
)
The following tables present the Company's Non-GAAP measures, both per subsidiary and total. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 4.
Three Months Ended October 31, 2025
Consolidated
AGI Corporate
AU
USU
EBITDA
$1,631,062
$(2,425,361)
$871,880
$3,184,543
EBITDA Margin
15%
NM
22%
44%
Adjusted EBITDA
$2,468,810
$(2,343,696)
$1,341,195
$3,471,311
Adjusted EBITDA Margin
22%
NM
34%
48%
_______________
NM - Not meaningful
Three Months Ended October 31, 2024
Consolidated
AGI Corporate
AU
USU
EBITDA
$126,190
$(1,179,476)
$(1,264,051)
$2,569,717
EBITDA Margin
1%
NM
(26)%
38%
Adjusted EBITDA
$1,549,020
$(2,161,445)
$910,733
$2,799,732
Adjusted EBITDA Margin
14%
NM
19%
42%
Adjusted EBITDA improved by $0.9 million primarily due to increased revenue per student at USU, increased instructional efficiencies at AU and USU and a decrease in general and administrative costs attributed to our restructurings.
Operating Metrics
New Student Enrollments
On a Company-wide basis, new student enrollments decreased 29% year-over-year. Sequentially, new student enrollments at USU increased due to continued strong organic lead flow, existing students returning from inactive status, and students enrolling in advance of Q2 Fiscal 2026 price increases. New student enrollments at both AU and USU were negatively impacted by the on-going maintenance level of marketing spend. As a result of the restructurings and increased instructional efficiencies, we anticipate the resumption of marketing spend at a level necessary to provide enrollments needed to grow the student body and allow for the generation of positive operating cash flow following the repayment of the 15% Debentures.
New student enrollments for the past five quarters are shown below:
Q2'25
Q3'25
Q4'25
Q1'26
Q2'26
AU
508
359
350
338
297
USU
442
196
258
338
378
Total
950
555
608
676
675
Total Active Student Body
Total active student body for the past five quarters is shown below:
Q2'25
Q3'25
Q4'25
Q1'26
Q2'26
AU
3,827
3,564
3,375
3,140
2,771
USU
2,560
2,475
2,434
2,369
2,302
Total
6,387
6,039
5,809
5,509
5,073
Nursing Students
Nursing student body for the past five quarters is shown below:
Q2'25
Q3'25
Q4'25
Q1'26
Q2'26
AU
2,948
2,745
2,606
2,418
2,122
USU
2,300
2,297
2,254
2,210
2,153
Total
5,248
5,042
4,860
4,628
4,275
Liquidity
The Q2 Fiscal 2026 ending unrestricted cash balance was $0.3 million. As of December 12, 2025, the Company had $0.4 million of unrestricted cash on hand. On September 15, 2025, we implemented a fifth restructuring plan, which will result in additional cash benefits for the Company starting in Q3 Fiscal 2026. The restructuring resulted in the elimination of approximately 75 positions within AU and AGI. The resulting additional on-going quarterly compensation-related savings will be approximately $1.5 million beginning in Q3 Fiscal 2026.
Our restructuring efforts were designed to achieve break-even to positive annual operating cash flows, which will permit the resumption of marketing spend at a level that we expect will renew growth in our post-licensure nursing student body following the repayment of the 15% Debentures. In Q2 Fiscal 2026, we had positive cash flow from operations of $0.5 million.
Cost reductions associated with the restructuring plans and other corporate cost reductions ensure that the Company will have sufficient cash to meet its working capital needs for the next 12 months.
Non-GAAP Financial Measures
This press release includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to net income (loss), operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of AGI nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.
Our management uses and relies on EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. We believe that management, analysts, and shareholders benefit from referring to the following non-GAAP financial measures to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.
We have included a reconciliation of our non-GAAP financial measures to the most comparable financial measures calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between AGI and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.
AGI defines Adjusted EBITDA as EBITDA excluding: (1) provision for credit losses; (2) stock-based compensation; (3) severance, if applicable; (4) lease modifications, if applicable; (5) impairments of right-of-use assets and tenant leasehold improvements, if applicable; (6) change in fair value of put warrant liability, if applicable; and (7) other non-recurring charges (income). The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA and of net income (loss) margin to Adjusted EBITDA Margin.
EBITDA Margin is defined as EBITDA divided by revenue. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue. We believe these margins are useful for management, analysts and investors as this measure allows for a more meaningful comparison between our performance and that of our competitors. Adjusted EBITDA margin has certain limitations in that it does not take into account the impact to our consolidated statement of operations of certain expenses.
Three Months Ended October 31,
2025
2024
Net income (loss)
$
651,738
$
(1,057,420
)
Interest expense, net
295,530
342,490
Tax expense, net
42,504
46,225
Depreciation and amortization
641,290
794,895
EBITDA
1,631,062
126,190
Provision for credit losses
450,000
450,000
Stock-based compensation
30,486
98,245
Severance
232,659
35,522
Impairments of right-of-use assets and tenant leasehold improvements
—
1,848,209
Change in fair value of put warrant liability
—
(1,085,145
)
Non-recurring charges - Other
124,603
75,999
Adjusted EBITDA
$
2,468,810
$
1,549,020
