Revenue increased to $11.4 million, led by growth from USU
Disciplined cost controls deliver operating income of $0.7 million
Positive Adjusted EBITDA of $1.9 million as compared to $0.4 million
Third consecutive quarter of positive operating cash flow of $0.4 million
PHOENIX, Oct. 31, 2025 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (OTCQB:ASPU) ("AGI" or the "Company"), an education technology holding company, today announced financial results for its first quarter of fiscal year 2026, ended July 31, 2025.
First Quarter Fiscal Year 2026 Summary Results
Three Months Ended July 31,
$ in millions, except per share data
2025
2024
Revenue
$
11.4
$
11.3
Gross Profit1
$
8.4
$
7.5
Gross Margin (%)1
73
%
66
%
Net Income (Loss)
$
0.4
$
(0.1
)
Earnings (Loss) per Share - Basic
$
0.01
$
(0.01
)
Earnings (Loss) per Share - Diluted
$
0.01
$
(0.01
)
EBITDA2
$
1.4
$
1.0
Adjusted EBITDA2
$
1.9
$
0.4
_______________________
1 GAAP gross profit calculation includes marketing and promotional costs, instructional costs and services, and amortization expense of $0.4 million and $0.5 million, respectively for the three months ended July 31, 2025 and 2024. 2 Non-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: "This quarter, we continued to maintain revenue stability while also making further progress executing cost controls to strengthen Aspen Group's financial foundation. Our restructuring initiatives are expected to deliver additional quarterly general and administrative savings of approximately $1.5 million by the third quarter of Fiscal 2026. Our cost control initiatives also resulted in the continuation of positive operating cash flow, building from our success in Fiscal 2025."
Mr. Mathews added, "These actions enhance our liquidity and position us to strategically reinvest in marketing to boost enrollment. While the regulatory review of the merger between Aspen University and United States University continues, we remain confident in our ability to expand student resources and achieve positive operating cash flow in fiscal year 2026."
Fiscal Q1 2026 Financial and Operational Results (compared to Fiscal Q1 2025)
Revenue increased by 1% to $11.4 million compared to $11.3 million. The following table presents the Company's revenue, both per subsidiary and total:
Three Months Ended July 31,
2025
$ Change
% Change
2024
AU
$
4,285,868
$
(506,036
)
(11
)%
$
4,791,904
USU
7,154,598
617,665
9
%
6,536,933
Revenue
$
11,440,466
$
111,629
1
%
$
11,328,837
Aspen University's ("AU") revenue decline of $0.5 million, or 11%, is the result of lower post-licensure enrollments from the effect of decreased marketing spend initiated late in Q1 Fiscal 2023.
United States University ("USU") revenue was up 9% compared to the prior year period. MSN-FNP program enrollments increased sequentially due to strong organic leads during the quarter. Additionally, USU's performance was supported by 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 by tuition increases.
GAAP gross profit increased by $0.8 million to $8.4 million. Consolidated gross margin was 73% compared to 66%, AU's gross margin was 70% versus 61%, and USU's gross margin was 76% versus 71%. 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 increased efficiencies in the use of faculty.
AU instructional costs and services represented 25% of AU revenue, and USU instructional costs and services represented 22% 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 July 31, 2025
Consolidated
AGI Corporate
AU
USU
Net income (loss)
$
406,805
$
(2,457,170
)
$
323,725
$
2,540,250
Net income per share– Basic
$
0.01
Net income per share, Diluted
$
0.01
Three Months Ended July 31, 2024
Consolidated
AGI Corporate
AU
USU
Net (loss) income
$
(127,864
)
$
(2,131,705
)
$
(74,782
)
$
2,078,623
Net loss per share - Basic
$
(0.01
)
Net loss per share - Diluted
$
(0.01
)
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 July 31, 2025
Consolidated
AGI Corporate
AU
USU
EBITDA
$
1,394,277
$
(2,078,673
)
$
777,955
$
2,694,995
EBITDA Margin
12
%
NM
18
%
38
%
Adjusted EBITDA
$
1,876,457
$
(2,047,440
)
$
1,002,955
$
2,920 942
Adjusted EBITDA Margin
16
%
NM
23
%
41
%
NM, Not meaningful
Three Months Ended July 31, 2024
Consolidated
AGI Corporate
AU
USU
EBITDA
$
1,039,102
$
(1,706,887
)
$
529,054
$
2,216,935
EBITDA Margin
9
%
NM
11
%
34
%
Adjusted EBITDA
$
447,615
$
(2,322,995
)
$
316,446
$
2,454,164
Adjusted EBITDA Margin
4
%
NM
7
%
38
%
Adjusted EBITDA improved by $1.4 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 increased 6% year-over-year. Sequentially, new student enrollments 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 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 in the second half of Fiscal 2026 at a level necessary to provide enrollments needed to grow the student body and allow for the generation of positive operating cash flow.
New student enrollments for the past five quarters are shown below:
Q1'25
Q2'25
Q3'25
Q4'25
Q1'26
Aspen University
413
508
359
350
533
USU
410
442
196
258
338
Total
823
950
555
608
871
Total Active Student Body
AGI's active degree-seeking student body for the past five quarters, including AU and USU, is shown below:
Q1'25
Q2'25
Q3'25
Q4'25
Q1'26
Aspen University
4,145
3,827
3,564
3,375
3,140
USU
2,477
2,560
2,475
2,434
2,369
Total
6,622
6,387
6,039
5,809
5,509
Nursing Students
AGI's nursing student body for the past five quarters is shown below:
Q1'25
Q2'25
Q3'25
Q4'25
Q1'26
Aspen University
3,198
2,948
2,745
2,606
2,418
USU
2,254
2,300
2,297
2,254
2,210
Total
5,452
5,248
5,042
4,860
4,628
Liquidity
The Fiscal Q1 2026 ending unrestricted cash balance was $0.5 million. As of October 24, 2025, the Company had $0.6 million of unrestricted cash on hand. In Q2 Fiscal 2026, we implemented a fifth restructuring plan, that 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 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. In Fiscal Q1 2026, we had positive cash flow from operations of $0.4 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, 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; and (3) non-recurring charges. The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA and of net income (loss) margin to the Adjusted EBITDA margin:
Three Months Ended July 31,
2025
2024
Net income (loss)
$
406,805
$
(127,864
)
Interest expense, net
310,391
347,170
Tax expense (benefit)
7,419
(208
)
Depreciation and amortization
669,662
820,004
EBITDA
1,394,277
1,039,102
Provision for credit losses
450,000
450,000
Stock-based compensation
32,180
210,091
Severance
