Record net income of $1.4 million versus net loss of $(1.0) million in Q3 FY2025
Operating expenses reduced 18% year-over-year, driving operating income of $1.7 million and 17% operating margin
Adjusted EBITDA of $3.0 million (29% margin), up from $1.7 million (15% margin) in the prior-year quarter 2
Fifth consecutive quarter of positive operating cash flow, reaching $1.0 million
PHOENIX, March 16, 2026 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (OTCQB:ASPU) ("AGI" or the "Company"), an education technology holding company, today announced financial results for its third quarter of fiscal year 2026 ended January 31, 2026.
Third Quarter Fiscal Year 2026 Summary Results
Three Months Ended January 31,
Nine Months Ended January 31,
$ in millions, except per share data
2026
2025
2026
2025
Revenue
$
10.4
$
10.9
$
33.0
$
33.7
Gross Profit1
$
7.9
$
7.5
$
24.7
$
23.1
Gross Margin (%)1
76
%
68
%
75
%
69
%
Net Income (Loss)
$
1.4
$
(1.0
)
$
2.5
$
(2.2
)
Earnings (Loss) per Share - Basic
$
0.04
$
(0.04
)
$
0.08
$
(0.09
)
Earnings (Loss) per Share - Diluted
$
0.03
$
(0.04
)
$
0.06
$
(0.09
)
EBITDA2
$
2.3
$
0.1
$
5.4
$
1.3
Adjusted EBITDA2
$
3.0
$
1.7
$
7.3
$
3.7
_______________________ 1 GAAP gross profit calculation includes marketing and promotional costs, instructional costs and services, and amortization expense of $0.4 million and $0.4 million; and $1.1 million and $1.4 million for the three and nine months ended January 31, 2026, and 2025, respectively.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, Executive Chairman of AGI, stated: "I am pleased to announce we delivered record net income of $1.4 million in the quarter, marking another quarter of improved profitability and operating discipline. This is our fourth consecutive quarter of net income and continued margin expansion. Importantly, USU delivered its sixth consecutive quarter of year-over-year revenue growth, driven primarily by strong organic lead flow and disciplined marketing spend. We are beginning to see the full benefit of the restructuring plan implemented in the fall of 2025, which followed the announcement of our intent to merge Aspen University and United States University with USU as the surviving entity, pending regulatory approval. Third-quarter G&A expense declined by more than $900,000 year-over-year, driving operating margin expansion to 17% from 3% and supporting our fourth consecutive quarter of net income. Over the past several years, we streamlined operations and repositioned the business following a period of revenue contraction. With revenue stabilizing and operating leverage improving, we remain on track to generate continued positive operating cash flow in fiscal 2026 and deliver our most profitable year in over a decade."
Mr. Mathews continued, "In addition, the Company is actively evaluating refinancing alternatives for its debt, which matures in May 2026, with an outstanding balance of approximately $5.8 million. Management has begun discussions with potential financing sources and is exploring options to extend maturities, improve the Company's capital structure, and support continued operational momentum."
Fiscal Q3 2026 Financial and Operational Results (compared to Fiscal Q3 2025)
Revenue declined by 5% to $10.4 million compared to $10.9 million. The following table presents the Company's revenue, both per subsidiary and total:
Three Months Ended January 31,
2026
$ Change
% Change
2025
AU
$
3,610,097
$
(820,392
)
(19
)%
$
4,430,489
USU
6,780,000
266,521
4
%
6,513,479
Revenue
$
10,390,097
$
(553,871
)
(5
)%
$
10,943,968
Aspen University's ("AU") revenue decline of 19% 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 and the discontinuation of new student enrollments associated with the pending merger with USU.
United States University ("USU") revenue increased by 4% year-over-year. 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 $0.5 million to $7.9 million. Consolidated gross margin was 76% compared to 68%, AU's gross margin was 75% versus 67%, and USU's gross margin was 78% versus 70%. GAAP gross profit and gross margin increased primarily due to higher revenue at USU related to increased revenue per student related to tuition increases and more students entering their second year of the MSN-FNP program, combined with reduced cost of revenue at AU and USU driven by more efficient allocation of faculty resources.
AU instructional costs and services represented 19% of AU revenue, and USU instructional costs and services represented 20% 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 January 31, 2026
Consolidated
AGI Corporate
AU
USU
Net income (loss)
$
1,434,676
$
(2,096,379
)
$
884,626
$
2,646,429
Net income per share - Basic
$
0.04
Net income per share - Diluted
$
0.03
Three Months Ended January 31, 2025
Consolidated
AGI Corporate
AU
USU
Net income (loss)
$
(979,487
)
$
(3,285,923
)
$
314,813
$
1,991,623
Net loss per share - Basic
$
(0.04
)
Net 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 January 31, 2026
Consolidated
AGI Corporate
AU
USU
EBITDA
$2,344,635
$(1,748,547)
$1,285,576
$2,807,606
EBITDA Margin
23%
NM
36%
41%
Adjusted EBITDA
$2,965,614
$(1,629,147)
$1,540,691
$3,054,070
Adjusted EBITDA Margin
29%
NM
43%
45%
________________________________NM - Not meaningful
Three Months Ended January 31, 2025
Consolidated
AGI Corporate
AU
USU
EBITDA
$ 113,803
$(2,870,669)
$841,789
$2,142,683
EBITDA Margin
1%
NM
19%
33%
Adjusted EBITDA
$1,659,599
$(1,828,933)
$1,104,551
$2,383,981
Adjusted EBITDA Margin
15%
NM
25%
37%
Adjusted EBITDA improved by $1.3 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. Third quarter Adjusted EBITDA includes a one-time reversal of compensation accruals of approximately $0.4 million.
Operating Metrics
New Student Enrollments
Total new student enrollments decreased by 16% year over year in Fiscal Q3 2026. New student enrollments at both AU and USU were negatively impacted by the ongoing maintenance level of marketing spend. Additionally, AU enrollments were impacted by the discontinuation of new student enrollments associated with the pending merger with USU. Year-over-year enrollment at USU increased by 4%, despite low marketing spend, as the result of strong organic lead flow. Sequentially, USU enrollment declined due to the third quarter being our seasonally slowest period. As a result of the restructurings and increased instructional efficiencies, we anticipate increasing marketing spend, following the refinancing of the 15% Debentures, to a level necessary to achieve the enrollments needed to grow the student body.
New student enrollments for the past five quarters are shown below:
Q3'25
Q4'25
Q1'26
Q2'26
Q3'26
AU
290
249
335
270
203
USU
196
258
338
378
204
Total
486
507
673
648
407
Total Active Student Body
AGI's active degree-seeking student body for the past five quarters, including AU and USU, is shown below:
Q3'25
Q4'25
Q1'26
Q2'26
Q3'26
AU
3,564
3,375
3,140
2,771
2,386
USU
2,475
2,434
2,369
2,302
2,096
Total
6,039
5,809
5,509
5,073
4,482
Nursing Students
Nursing student body for the past five quarters is shown below:
Q3'25
Q4'25
Q1'26
Q2'26
Q3'26
AU
2,745
2,606
2,418
2,122
1,815
USU
2,297
2,254
2,210
2,153
1,899
Total
5,042
4,860
4,628
4,275
3,714
Liquidity
The Fiscal Q3 2026 ending unrestricted cash balance was $0.6 million. As of March 6, 2026, the Company had $0.4 million of unrestricted cash on hand. On September 15, 2025, we implemented a fifth restructuring plan, which resulted in additional cash benefits for the Company in Fiscal Q3 2026. As a result of the restructuring, approximately 75 positions were eliminated within AU and AGI. The resulting additional ongoing quarterly compensation-related savings are expected to be approximately $1.5 million, as evidenced by the $1.2 million sequential reduction in G&A in Fiscal Q3 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 following the refinancing of the 15% Debentures. In Fiscal Q3 2026, we had positive cash flow from operations of $1.0 million.
Cost reductions from restructuring plans and other corporate initiatives support the Company's expectation that it will have sufficient cash to meet its working capital needs for the next 12 months. Additionally, the Company initiated the process to refinance its 15% Debentures, which it expects to complete by the maturity date.
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 January 31,
2026
2025
Net income (loss)
$
1,434,676
$
(979,487
)
Interest expense, net
276,364
353,629
Tax expense, net
15,519
3,751
Depreciation and amortization
618,076
735,910
EBITDA
2,344,635
113,803
Provision for credit losses
450,000
450,000
Stock-based compensation
8,097
107,012
Severance
90,629
35,421
Change in fair value of put warrant liability
—
935,363
Non-recurring charges - Other
72,253
18,000
Adjusted EBITDA
$
2,965,614
$
1,659,599
Net income (loss) Margin
14
%
(9
)%
EBITDA Margin
23
%
1
%
Adjusted EBITDA Margin
