AMERICAN PUBLIC EDUCATION INC

Previous wording

In this Quarterly Report on Form 10-Q, or Quarterly Report, “we,” “our,” “us,” “the Company” and similar terms refer to American Public Education, Inc., or APEI, and its subsidiary institutions collectively unless the context indicates otherwise. All quarterly information in this Management’s Discussion and Analysis is unaudited. The following discussion of our historical results of operations and our liquidity and capital resources should be read in conjunction with the Consolidated Financial Statements and related notes that appear elsewhere in this Quarterly Report and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, or our Annual Report.

Current wording

In this Quarterly Report on Form 10-Q, or Quarterly Report, “we,” “our,” “us,” “the Company” and similar terms refer to American Public Education, Inc., or APEI, and its subsidiary institutions collectively unless the context indicates otherwise. All quarterly information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is unaudited. The following discussion of our historical results of operations and our liquidity and capital resources should be read in conjunction with the Consolidated Financial Statements and related notes that appear elsewhere in this Quarterly Report and the audited financial information and related notes, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and other disclosures, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, or our Annual Report.

Previous wording

•federal appropriations and other budgetary matters, including government shutdowns;

Current wording

•federal appropriations and other budgetary matters, including government shutdowns such as the U.S federal government shutdown that began on October 1, 2025, the estimated impact of such matters on us and our prospective and current students, and our efforts to mitigate this impact;

Previous wording

•our ability to recognize the intended benefits of our cost savings and revenue-generating efforts;

Current wording

•our ability to recognize the intended benefits of our cost savings and reduction and revenue-generating efforts;

Previous wording

•potential changes to the ED’s and other federal government agencies’ structure, policies, priorities, and oversight, including as a result of federal elections and the Trump administration’s stated intention to dismantle ED;

Current wording

•potential changes to the ED’s and other federal government agencies’ structure, policies, priorities, and oversight, including as a result of federal elections and the Trump administration’s stated intention and actions to dismantle ED;

Previous wording

•the loss of our ability to receive funds under TA programs or the reduction, elimination, or suspension of TA, or continued disruption due to systems used to request TA;

Current wording

•the loss of our and our students’ ability to receive funds under TA programs, the reduction, elimination, or suspension of TA, or disruptions due to systems used to request TA, including as a result of the U.S. federal government shutdown that began on October 1, 2025;

Previous wording

•our inability to recognize the benefits of our cost savings efforts;

Current wording

•our inability to recognize the intended benefits of our cost savings and reduction and revenue-generating efforts;

Previous wording

Forward-looking statements should be considered in light of these factors and the factors described elsewhere in this Quarterly Report, including in the “Risk Factors” section of our Annual Report, and in our various filings with the Securities and Exchange Commission, or the SEC. It is important that you read these factors and the other cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report. If any of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance, or achievements may differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. You should also read the more detailed description of our business in our Annual Report when considering forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements herein, which speak only as of the date of this Quarterly Report. We undertake no obligation to publicly update any forward-looking statements after the date of this Quarterly Report, whether as a result of new information, future events, or otherwise, except as required by law.

Current wording

Forward-looking statements should be considered in light of these factors and the factors described elsewhere in this Quarterly Report, in the “Risk Factors” section of this Quarterly Report and our Annual Report, and elsewhere in our various filings with the Securities and Exchange Commission, or the SEC. It is important that you read these factors and the other cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report. If any of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance, or achievements may differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. You should also read the more detailed description of our business in our Annual Report when considering forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements herein, which speak only as of the date of this Quarterly Report. We undertake no obligation to publicly update any forward-looking statements after the date of this Quarterly Report, whether as a result of new information, future events, or otherwise, except as required by law.

Previous wording

We are a provider of online and campus-based postsecondary education to approximately 106,800 students and career learning to approximately 17,000 individuals, through four subsidiary institutions, American Public University System, or APUS, Rasmussen University, or RU, Hondros College of Nursing, or HCN, and Graduate School USA, or GSUSA. Our subsidiary institutions offer purpose-built education programs and career learning designed to prepare individuals for productive contributions to their professions and society, and to offer opportunities designed to advance students in their current professions or to help them prepare for their next career. Our subsidiary institutions are licensed or otherwise authorized by state authorities to offer postsecondary education programs to the extent the institutions believe such licenses or authorizations are required, and APUS, RU, and HCN are certified by ED to participate in Title IV programs.

Current wording

We are a provider of online and campus-based postsecondary education to approximately 107,600 students through three subsidiary institutions, American Public University System, or APUS, Rasmussen University, or RU, and Hondros College of Nursing, or HCN. Our subsidiary institutions offer purpose-built education programs designed to prepare individuals for productive contributions to their professions and society, and to offer opportunities designed to advance students in their current professions or to help them prepare for their next career. Our subsidiary institutions are licensed or otherwise authorized by state authorities to offer postsecondary education programs to the extent the institutions believe such licenses or authorizations are required and are certified by ED to participate in Title IV programs.

Previous wording

•American Public University System, Inc., referred to herein as APUS, provides online postsecondary education to approximately 88,500 adult learners, directed primarily at the needs of the military, veterans, extended military families, and other public service and service-minded communities through two brands: American Military University, or AMU, and American Public University, or APU. As of June 30, 2025, approximately 64% of APUS students self-reported that they served in the military on active duty at the time of initial enrollment.

Current wording

•American Public University System, Inc., referred to herein as APUS, provides online postsecondary education to approximately 89,000 adult learners, directed primarily at the needs of the military, veterans, extended military families, and other public service and service-minded communities through two brands: American Military University, or AMU, and American Public University, or APU. As of September 30, 2025, approximately 63% of APUS students self-reported that they served in the military on active duty at the time of initial enrollment.

Previous wording

•Rasmussen College, LLC, referred to herein as Rasmussen University, or RU, provides nursing- and health sciences-focused postsecondary education to approximately 14,600 students at 20 campuses in six states and online. As of June 30, 2025, on-ground enrollment was 6,400, of which approximately 5,700 students were pursuing nursing degrees at RU, approximately 90% of whom were enrolled in RU’s pre-licensure nursing degree programs. At June 30, 2025, online enrollment was approximately 8,200 students.

Current wording

•Rasmussen College, LLC, referred to herein as Rasmussen University, or RU, provides nursing- and health sciences-focused postsecondary education to approximately 14,900 students at 20 campuses in six states and online. As of September 30, 2025, on-ground enrollment was 6,700, of which approximately 5,900 students were pursuing nursing degrees at RU, approximately 90% of whom were enrolled in RU’s pre-licensure nursing degree programs. At September 30, 2025, online enrollment was approximately 8,200 students.

Previous wording

•National Education Seminars, Inc., referred to herein as Hondros College of Nursing, or HCN, provides nursing education to approximately 3,700 students at eight campuses in three states. HCN’s students are enrolled in its pre-licensure nursing degree programs or its Medical Assisting Diploma program.

Current wording

•National Education Seminars, Inc., referred to herein as Hondros College of Nursing, or HCN, provides nursing education to approximately 3,700 students at eight campuses in three states. HCN’s students are enrolled in its pre-licensure nursing degree programs.

Previous wording

•American Public Training LLC, referred to herein as Graduate School USA, or GSUSA, provides career learning and leadership training in-person and online to the federal workforce. GSUSA operational activities are presented within Corporate and Other. In July 2025, APEI entered into a definitive agreement to sell all its membership interest in GSUSA, and the sale was completed on July 25, 2025.

Current wording

•American Public Training LLC, referred to herein as Graduate School USA, or GSUSA, provides career learning and leadership training in-person and online to the federal workforce. GSUSA operational activities are presented within Corporate and Other. On July 25, 2025, or the GSUSA Sale Date, APEI completed the sale of its membership interest in GSUSA; therefore, the Consolidated Balance Sheet as of September 30, 2025, no longer includes the accounts of GSUSA. The accompanying Consolidated Financial Statements include the operations of GSUSA through the GSUSA Sale Date in Corporate and Other. Please refer to “Note 2. Summary of Significant Accounting Policies” for more information on APEI’s sale of its membership interest in GSUSA.

Previous wording

On January 28, 2025, we announced the planned combination of APUS, RU, and HCN, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions tentatively named (i) APUS Global, comprised of AMU and APU, and (ii) Rasmussen, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs, with final division names to be determined closer to closing of the Combination. The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we needed to receive HLC approval prior to effectuating the Combination. APUS and RU jointly submitted an application for Change of Control, Structure or Organization. For HLC purposes, APUS will be the surviving institution, and the application sought approval for the Combination and the expansion of APUS’s HLC accreditation to include the RU and HCN programs and locations. HLC conducted a site visit in March 2025 related to the joint application. At its June 2025 meeting, HLC approved the Combination and continuation of accreditation upon implementation of the related transactions. We continue to engage with ED and HLC as to their preferred implementation process and timing for the Combination. As previously disclosed, we had anticipated completing the Combination in the third quarter of 2025 subject to obtaining required approvals and ED taking related actions. However, as a result of our ongoing dialogue with ED and HLC, we may seek to postpone implementation of the Combination, which could extend into the second quarter of 2026.

Current wording

On January 28, 2025, we announced the planned combination of APUS, RU, and HCN, or the Combination, which will result in a combined institution named American Public University System comprised of two divisions tentatively named (i) APUS Global, comprised of AMU and APU, and (ii) Rasmussen, comprised of RU’s campus-based and online nursing programs, RU’s healthcare programs, HCN’s campus-based nursing and healthcare programs, and RU’s non-healthcare programs, with final division names to be determined closer to closing of the Combination. The Combination constitutes a Change of Control, Structure or Organization pursuant to HLC policy and, accordingly, we are required to obtain HLC approval prior to effectuating the Combination. In December 2024, APUS and RU jointly submitted an application for Change of Control, Structure or Organization to HLC. For HLC purposes, APUS will be the surviving institution, and the application sought approval for the Combination and the expansion of APUS’s HLC accreditation to include the RU and HCN programs and locations. HLC conducted a site visit in March 2025 related to the joint application. At its June 2025 meeting, HLC approved the Combination and continuation of accreditation upon implementation of the related transactions. Subsequently, ED informed us that we would need to follow a different process to implement the Combination that entails two steps instead of one: (i) merger of the legal entities that own and operate APUS, RU, and HCN, with the APUS entity surviving following the merger, and (ii) combination of the institutions into one HLC-accredited institution. As previously disclosed, ED does not treat the combination of institutions with the same parent as a change in ownership and control for Title IV purposes. Therefore, the first step requires only that notice of the merger be provided to ED, and the second step requires APUS, as the surviving institution, to seek and obtain approval from ED to expand its Title IV certification to cover RU and HCN programs and locations. As a result of this process change, APUS and RU submitted, as required by HLC, a new joint application for Change of Control, Structure or Organization to HLC in September 2025 containing substantially the same information that had been submitted previously and reflecting the two-step process. HLC is expected to review this submission at its February 2026 board meeting. We currently expect implementation of the Combination to be complete by the beginning of the third quarter of 2026.

Previous wording

The OBBBA also establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Federal Direct Loans, requiring that an undergraduate or graduate or professional program be ineligible for Federal Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults aged 25-34 with only a high school diploma or a bachelor’s degree, respectively, either in the state where the institution is located or, if fewer than 50% of students at the institution reside in the institution’s state, the national average. If a program fails the earnings test for one year, institutions must notify students that the program is at risk of losing Federal Direct Loan eligibility.

Current wording

The OBBBA also establishes an accountability framework, effective July 1, 2026, that institutions must satisfy at the program level in order for students in the program to continue to receive Federal Direct Loans, requiring that an undergraduate or graduate or professional program be ineligible for Federal Direct Loans if, in two out of three consecutive years, the median earnings of a cohort of program completers are less than the median earnings of working adults aged 25-34 with only a high school diploma for undergraduate program completers, or a bachelor’s degree for graduate or professional program completers, respectively, either in the state where the institution is located or, if fewer than 50% of students at the institution reside in the institution’s state, the national average. If a program fails the earnings test for one year, institutions must notify students that the program is at risk of losing Federal Direct Loan eligibility.

Previous wording

The OBBBA also changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. The Company anticipates the changes in tax laws will not have a material impact to deferred tax assets and liabilities, and to income taxes payable in the period of enactment. The Company continues to evaluate the impact the new legislation will have on the Consolidated Financial Statements.

Current wording

The OBBBA also changes existing U.S. tax laws, including extending or making permanent certain provisions of the Tax Cuts and Jobs Act, repealing certain clean energy initiatives, in addition to other changes. We currently do not expect the OBBBA to have a material impact on our annual effective tax rate in 2025.

Previous wording

In May 2025, ED released RU from the temporary growth restrictions, imposed in connection with RU’s 2019 change in ownership, which preceded our acquisition of RU, that restricted RU from adding new programs and locations. The timing of the Combination could, however, delay our ability to seek approval from the HLC of new locations or programs.

Current wording

In May 2025, ED released RU from temporary growth restrictions, imposed in connection with RU’s 2019 change in ownership, which preceded our acquisition of RU, that had restricted RU from adding new programs and locations. The timing of the Combination could, however, delay our ability to seek approval from the HLC of new locations or programs.

Previous wording

RU’s Moorhead, Minnesota Associate of Science Professional Nursing, or ADN program, and Practical Nursing Diploma, or PN program, which together contributed approximately 1% of RU’s quarterly revenue, are currently approved by Minnesota Board of Nursing, or MBN, but first-time NCLEX pass rates for each of these programs have been below the required standard for three consecutive years. In August 2024, MBN placed RU’s Moorhead, Minnesota PN program on conditional approval status and issued a corrective action order. The PN program’s NCLEX pass rate was required to meet the state standard by the end of June 2025, measured using cumulative pass rates from the preceding four quarters(i.e., July 2024 to June 2025). The program met the standard and is awaiting the Board’s action at its August 2025 meeting. In June 2025, the MBN issued a stipulation and consent order with RU’s Moorhead, Minnesota ADN program to, among other things, meet applicable NCLEX pass rate standards by the end of 2025 for new candidates taking the licensing exam for the first time. If compliance is not achieved by December 31, 2025, the program will be given until June 30, 2026, to meet the required NCLEX pass rates based on the cumulative results from the first and second calendar quarters of 2026 for candidates, and, if not achieved, MBN may withdrawal program approval.

Current wording

RU’s Moorhead, Minnesota Associate of Science Professional Nursing, or ADN program, and Practical Nursing Diploma, or PN program, which together contributed approximately 1% of RU’s quarterly revenue, are currently approved by Minnesota Board of Nursing, or MBN, but first-time NCLEX pass rates for each of these programs have been below the required standard for three consecutive years. In August 2024, MBN placed RU’s Moorhead, Minnesota PN program on conditional approval status and issued a corrective action order. The PN program’s NCLEX pass rate was required to meet the state standard by the end of June 2025, measured using cumulative pass rates from the preceding four quarters (i.e., July 2024 to June 2025). The program met the standard, and the Board reinstated full approval at its August 2025 meeting. In June 2025, the MBN issued a stipulation and consent order with RU’s Moorhead, Minnesota ADN program to, among other things, meet applicable NCLEX pass rate standards by the end of 2025 for new candidates taking the licensing exam for the first time. If compliance is not achieved by December 31, 2025, the program will be given until June 30, 2026, to meet the required NCLEX pass rates based on the cumulative results from the first and second calendar quarters of 2026 for candidates, and, if not achieved, MBN may withdrawal program approval.

Previous wording

As a requirement for accreditation, ABHES requires institutions to demonstrate at least a 70% retention rate for each program. For institutions not meeting the retention standard, ABHES may provide an opportunity for a program to come into compliance within a specified time period, and may extend such period if a program demonstrates improvement or for other good cause. For the reporting year ended June 30, 2024, HCN’s Cleveland and Dayton PN programs, and the Akron ADN program were below the 70% benchmark for retention. As a result, ABHES placed the Cleveland and Dayton PN programs and Akron ADN program on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate met the standard through the first three quarters of the 2024-2025 reporting year by May 2025. These three programs met the 70% benchmark for the reporting period, and, as a result, at its July 2025 meeting, the ABHES Commission voted to remove retention reporting requirements.

Current wording

As a requirement for accreditation, ABHES requires institutions to demonstrate at least a 70% retention rate for each program. For institutions not meeting the retention standard, ABHES may provide an opportunity for a program to come into compliance within a specified time period and may extend such period if a program demonstrates improvement or for other good cause. For the reporting year ended June 30, 2024, HCN’s Cleveland and Dayton, Ohio PN programs, and the Akron, Ohio ADN program were below the 70% benchmark for retention. As a result, ABHES placed the Cleveland and Dayton, Ohio PN programs and Akron, Ohio ADN program on outcomes reporting status and required HCN to submit reports for each of these programs demonstrating their retention rate met the standard through the first three quarters of the 2024-2025 reporting year by May 2025. These three programs met the 70% benchmark for the reporting period, and, as a result, at its July 2025 meeting, the ABHES Commission voted to remove retention reporting requirements. HCN will report its final retention rates for the 2024-2025 reporting year in November 2025. The Akron and Toledo, Ohio ADN programs are expected to be below the 70% benchmark for retention. HCN expects that, as a result, ABHES will require additional mid-year reporting for those programs in May 2026.

Previous wording

Providing affordable degree and certificate programs is an important element of our competitive strategy. In April 2024, APUS implemented a tuition increase to master’s level students across all categories, including military, non-military and veteran students, and in September 2024, APUS returned the military rate for master’s level students to the $250 per credit hour rate in effect prior to the April 2024 tuition increase. We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities. RU implemented modest tuition increases for all students in select programs in the first quarter of 2024, for new students in select programs in August 2024, and for returning students in select programs in October 2024. RU plans to implement modest tuition increases for new and reentering students in August 2025, for current students in non-prelicensure nursing programs in October 2025, and for prelicensure nursing program students in January 2026. HCN plans to implement a 5% increase in tuition and fees effective in the fourth quarter of 2025, for its ADN and PN programs. The tuition and fee increases at RU and HCN are intended to reflect adjustments to be consistent with the local campus markets. Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

Current wording

Providing affordable degree and certificate programs is an important element of our competitive strategy. In April 2024, APUS implemented a tuition increase to master’s level students across all categories, including military, non-military and veteran students, and in September 2024, APUS returned the military rate for master’s level students to the $250 per credit hour rate in effect prior to the April 2024 tuition increase. We believe that APUS’s tuition and fees remain lower than the average in-state cost at public universities. RU implemented modest tuition increases for all students in select programs in the first quarter of 2024, for new students in select programs in August 2024, and for returning students in select programs in October 2024. RU implemented modest tuition increases for new and reentering students in August 2025. RU implemented modest increases for current students in non-prelicensure nursing programs in October 2025 and will implement a modest tuition increase for prelicensure nursing program students in January 2026. HCN implemented a 5% increase in tuition and fees effective in October 2025 for its ADN and PN programs. The tuition and fee increases at RU and HCN are intended to reflect adjustments to be consistent with the local campus markets. Even with these increases, RU and HCN’s tuition and fees are designed to be affordable and competitive when compared to the tuition and fees at similar institutions offering the same level of flexibility, accessibility, and student experience.

Previous wording

During the six months ended June 30, 2024, our RU Segment consolidated two Minnesota campuses, and in May 2024, RU notified the Wisconsin Educational Approval Program, or EAP, that it intends to voluntarily close its two Wisconsin campuses, effective December 31, 2025, and 2026, respectively. All students enrolled at the two Wisconsin campuses have expected graduation dates on or before the applicable campus closing date. These actions are expected to directly impact approximately 30 students, or less than 1% of RU’s current total enrollment.

Current wording

During the nine months ended September 30, 2024, our RU Segment consolidated two Minnesota campuses, and in May 2024, RU notified the Wisconsin Educational Approval Program, that it intends to voluntarily close its two Wisconsin campuses, effective December 31, 2025, and 2026, respectively. All students enrolled at the two Wisconsin campuses have expected graduation dates on or before the applicable campus closing date. These actions are expected to directly impact approximately 20 students, or less than 1% of RU’s current total enrollment. As a result, we recorded a lease impairment of $0.4 million during the three months ended June 30, 2024, and an additional lease impairment of $0.1 million during the three months ended September 30, 2025.

Previous wording

GSUSA provides contract training to federal government agency customers and through direct enrollment by federal, state, and municipal government employees, contractors, and non-government employees. On July 10, 2025, APEI entered into a definitive agreement to sell all of its membership interest in GSUSA for $0.5 million, subject to customary adjustments, including for net working capital and cash. The sale was completed on July 25, 2025, and is expected to result in a loss on sale between $7.0 million and $8.5 million, subject to post-close adjustments for working capital and cash.

Current wording

On the GSUSA Sale Date, APEI completed the sale of its membership interest in GSUSA for $0.5 million, subject to customary adjustments, including for net working capital and cash, and recorded a $3.9 million loss within loss on sale of subsidiary in our Consolidated Statements of Income.

Previous wording

Adjustments to reconcile segment results to the Consolidated Financial Statements are included in Corporate and Other. These adjustments include unallocated corporate activity and eliminations, and the operational activities of GSUSA.

Current wording

Adjustments to reconcile segment results to the Consolidated Financial Statements are included in Corporate and Other. These adjustments include unallocated corporate activity and eliminations, and, prior to the GSUSA Sale Date, the operational activities of GSUSA.

Previous wording

Consolidated revenue for the three months ended June 30, 2025, increased to $162.8 million from $152.9 million, or by 6.5%, as compared to the prior year period. Our net income for the three months ended June 30, 2025, was $4.5 million, compared to $0.4 million in the prior year period, an increase of $4.1 million. The results for the three months ended June 30, 2025, include $1.7 million in pre-tax professional fees in Corporate and Other relating to the Combination and the sale of GSUSA. The results in the prior year period include a $1.1 million non-cash loss on sale of an equity investment in Corporate and Other, a $0.8 million pre-tax non-cash loss on leases in our RU Segment, $0.5 million in pre-tax severance costs related to the former president of GSUSA in Corporate and Other and the planned closure of the Wisconsin campuses in our RU Segment, and $0.2 million in pre-tax information technology transition service costs in our APUS and HCN Segments, as well as Corporate and Other. Our operating margin improved to 4.3% for the three months ended June 30, 2025, as compared to 1.5% in the prior year period. Excluding the professional fees relating to the Combination in 2025 and the sale of GSUSA, the loss on leases, severance costs and information technology transition service costs in 2024, our operating margin was 5.4% and 2.4% for the three months ended June 30, 2025, and 2024, respectively.

Current wording

Corporate and Other, all on a pre-tax basis. The results for the nine months ended September 30, 2024, include non-cash losses on investments of $4.4 million in Corporate and Other, a $3.7 million pre-tax loss on leases in our RU Segment, $3.1 million in pre-tax information technology transition service costs in our APUS and HCN Segments as well as Corporate and Other, $0.8 million in pre-tax professional fees in Corporate and Other relating to the Combination, and $0.5 million in pre-tax severance costs in Corporate and Other and the planned closure of the Wisconsin campuses in our RU Segment. Our operating margin improved to 5.8% for the nine months ended September 30, 2025, compared to 2.5%, in the prior year period. Excluding the items noted above, our operating margin was 7.8% and 4.3% for the nine months ended September 30, 2025, and 2024, respectively.

Previous wording

APUS net course registrations for the three months ended June 30, 2025, increased to approximately 96,400 from approximately 89,800, an increase of 6,600, or 7.3%, as compared to the prior year period. APUS Segment revenue for the three months ended June 30, 2025, increased to $81.7 million from $77.0 million, or by 6.1%, as compared to the prior year period. The revenue increase for the period was less than the increase in net course registrations due the timing of course starts within the respective periods. APUS net course registrations for the six months ended June 30, 2025, increased to approximately 198,900 from approximately 188,800, an increase of 10,100, or 5.3%, as compared to the prior year period. APUS Segment revenue for the six months ended June 30, 2025, increased to $165.7 million from $157.7 million, or by 5.1%, as compared to the prior year period. APUS Segment operating margin increased to 26.2% for the three months ended June 30, 2025, from 23.7% in the prior year period, and increased to 27.5% for the six months ended June 30, 2025, from 26.2% in the prior year period.

Current wording

APUS net course registrations for the three months ended September 30, 2025, increased to approximately 100,000 from approximately 92,500, an increase of 7,500, or 8.1%, as compared to the prior year period. APUS Segment revenue for the three months ended September 30, 2025, increased to $83.1 million from $77.0 million, or by 8.0%, as compared to the prior year period. APUS net course registrations for the nine months ended September 30, 2025, increased to approximately 298,800 from approximately 281,300, an increase of 17,500, or 6.2%, as compared to the prior year period. APUS Segment revenue for the nine months ended September 30, 2025, increased to $248.8 million from $234.7 million, or by 6.0%, as compared to the prior year period. APUS Segment operating margin increased to 30.4% for the three months ended September 30, 2025, from 27.0% in the prior year period, and increased to 28.5% for the nine months ended September 30, 2025, from 26.5% in the prior year period.

Previous wording

RU total enrollment for the three months ended June 30, 2025, increased to approximately 14,600 from approximately 13,600, an increase of 1,000, or 7.4%, as compared to the prior year period. RU Segment revenue for the three months ended June 30, 2025, increased to $59.5 million from $53.0 million, or by 12.2%, as compared to the prior year period. RU total enrollment for the six months ended June 30, 2025, increased approximately 7.4%, as compared to the prior year period. RU Segment revenue for the six months ended June 30, 2025, increased to $118.8 million from $106.2 million, or by 11.9%, as compared to the prior year period. The revenue increases for the three and six month periods were greater than the enrollment increases for the comparable prior year periods due to tuition increases in the second half of 2024. RU Segment operating margin improved to negative 3.3% for the three months ended June 30, 2025, from negative 16.6% in the prior year period, and improved to negative 1.7% for the six months ended June 30, 2025, from negative 16.8% in the prior year period.

Current wording

RU total enrollment for the three months ended September 30, 2025, increased to approximately 14,900 from approximately 13,500, an increase of 1,400, or 10.4%, as compared to the prior year period. RU Segment revenue for the three months ended September 30, 2025, increased to $60.8 million from $52.6 million, or by 15.6%, as compared to the prior year period. RU total enrollment for the nine months ended September 30, 2025, increased approximately 8.4%, as compared to the prior year period. RU Segment revenue for the nine months ended September 30, 2025, increased to $179.6 million from $158.8 million, or by 13.1%, as compared to the prior year period. The revenue increases for the three and nine month periods were greater than the enrollment increases for the comparable prior year periods due to tuition increases in the second half of 2024. RU Segment operating margin improved to negative 2.0% for the three months ended September 30, 2025, from negative 14.5% in the prior year period, and improved to negative 1.8% for the nine months ended September 30, 2025, from negative 16.0% in the prior year period.

Previous wording

HCN total enrollment for the three months ended June 30, 2025, increased to approximately 3,700 from approximately 3,300, an increase of 400, or 13.5%, as compared to the prior year period. HCN Segment revenue for the three months ended June 30, 2025, increased to $18.1 million from $16.4 million, or by 10.5%, as compared to the prior year period. HCN total enrollment for the six months ended June 30, 2025, increased approximately 11.5%, as compared to the prior year period. HCN Segment revenue for the six months ended June 30, 2025, increased to $35.8 million from $32.9 million, or by 9.0%, as compared to the prior year period. The revenue increase for the three and six month periods were less than the enrollment increase due to the change in course load mix, and higher student enrollment from community partners which is at a lower revenue per student. HCN Segment operating margin improved to negative 2.2% for the three months ended June 30, 2025, from negative 4.5% in the prior year period, and remained unchanged at negative 3.2% for both the six month periods ended June 30, 2025 and 2024.

Current wording

HCN total enrollment for the three months ended September 30, 2025, increased to approximately 3,700 from approximately 3,100, an increase of 600, or 17.6%, as compared to the prior year period. HCN Segment revenue for the three months ended September 30, 2025, increased to $18.4 million from $15.5 million, or by 19.0%, as compared to the prior year period. HCN total enrollment for the nine months ended September 30, 2025, increased approximately 13.5%, as compared to the prior year period. HCN Segment revenue for the nine months ended September 30, 2025, increased to $54.3 million from $48.3 million, or by 12.2%, as compared to the prior year period. The revenue increase for the three month periods was more than the enrollment increase due to fewer students taking a repeat course in the current year as compared to the prior year period. Revenue per student is lower for students taking a repeat course. The revenue increase for the nine month period was less than the enrollment increase due to more students taking a repeat course in the current year as compared to the prior year period. HCN Segment operating margin improved to negative 4.7% for the three months ended September 30, 2025, from negative 5.0% in the prior year period, and improved to negative 3.7% for the nine month periods ended September 30, 2025, from negative 3.8% in the prior year period.

Previous wording

Goodwill and indefinite-lived intangible assets. Goodwill is the excess of the purchase price of an acquired business over the fair value of the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets. Goodwill is not amortized. Goodwill is reported at the reporting unit level that we have defined as our reporting segments. In connection with our acquisitions of RU and HCN, we recorded $217.4 million and $38.6 million of goodwill, respectively, in our RU and HCN Segments. We later recorded non-cash impairment charges reducing the carrying value of RU and HCN Segment goodwill to $33.0 million and $26.6 million, respectively. There was no goodwill recorded in connection with the acquisition of GSUSA. No goodwill is recorded in our APUS Segment.

Current wording

Goodwill and indefinite-lived intangible assets. Goodwill is the excess of the purchase price of an acquired business over the fair value of the assets acquired and liabilities assumed, and the fair value assigned to identifiable intangible assets on the acquisition date. Goodwill is not amortized. Goodwill is reported at the reporting unit level that we have defined as our reporting segments. In connection with our acquisitions of RU and HCN, we recorded $217.4 million and $38.6 million of goodwill, respectively, in our RU and HCN Segments. We later recorded non-cash impairment charges reducing the carrying value of RU and HCN Segment goodwill to $33.0 million and $26.6 million, respectively. There was no goodwill recorded in connection with the acquisition of GSUSA. No goodwill is recorded in our APUS Segment.

Previous wording

In addition to goodwill, in connection with the acquisitions of RU and HCN, we recorded identified intangible assets with an indefinite useful life in the aggregate amount of $51.0 million and $3.7 million, respectively, in our RU and HCN Segments, which included intangible assets related to trade name, accreditation, licensing, and Title IV, and affiliate agreements. We later recorded non-cash impairment charges reducing the carrying value of RU indefinite-lived identified intangible assets to $24.5 million. There were no indefinite useful life intangible assets identified as a result of the acquisition of GSUSA. There are no indefinite-lived intangible assets in our APUS Segment.

Current wording

Segments, which included intangible assets related to trade name, accreditation, licensing, and Title IV, and affiliate agreements. We later recorded non-cash impairment charges reducing the carrying value of RU indefinite-lived identified intangible assets to $24.5 million. There are no indefinite-lived intangible assets in our APUS Segment.

Previous wording

We recorded $35.5 million, $4.4 million, and $1.0 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU, HCN, and GSUSA, respectively. There are no definite-lived intangible assets in our APUS Segment.

Current wording

We recorded $35.5 million and $4.4 million of identified intangible assets with a definite useful life in connection with the acquisitions of RU and HCN, respectively. There are no definite-lived intangible assets in our APUS Segment.

Previous wording

Below we have included a discussion of our operating results and material changes in our operating results during the three and six months ended June 30, 2025, compared to the three and six months ended June 30, 2024. Our revenue and operating results normally fluctuate as a result of seasonal or other variations in our enrollments and the level of expenses in our reportable segments. Our student population varies as a result of new enrollments, graduations, student attrition, the success of our marketing programs, and other reasons that we cannot always anticipate. We expect quarterly fluctuations in operating results to continue as a result of various enrollment patterns and changes in revenue and expenses.

Current wording

Below we have included a discussion of our operating results and material changes in our operating results during the three and nine months ended September 30, 2025, compared to the three and nine months ended September 30, 2024. Our revenue and operating results normally fluctuate as a result of seasonal or other variations in our enrollments and the level of expenses in our reportable segments. Our student population varies as a result of new enrollments, graduations, student attrition, the success of our marketing programs, and other reasons that we cannot always anticipate. We expect quarterly fluctuations in operating results to continue as a result of various enrollment patterns and changes in revenue and expenses.

Previous wording

APUS net course registrations for the three months ended June 30, 2025, increased to approximately 96,400 from approximately 89,800, an increase of 6,600, or 7.3%, as compared to the prior year period. APUS net course registrations for the six months ended June 30, 2025, increased to approximately 198,900 from approximately 188,800, an increase of 10,100, or 5.3%, as compared to the prior year period primarily due to an increase in registrations by students utilizing federal student aid and military-affiliated students utilizing education benefit programs administered by the U.S. Department of Veterans Affairs, or VA. APUS Segment operating margin increased to 26.2% for the three months ended June 30, 2025, from 23.7% in the prior year period and increased to 27.5% from 26.2% for the six months ended June 30, 2025, as compared to the prior year period. The increase in operating margin for the three months ended June 30, 2025, was primarily due to the increase in revenue and a decrease in information technology costs, partially offset by an increase in employee compensation costs, as compared to the prior year period. The increase in operating margin for the six months ended June 30, 2025, was primarily due to an increase in revenue and a decrease in professional fees, partially offset by the increase in employee compensation costs and the loss on assets held for sale, as compared to the prior year period.

Current wording

APUS net course registrations for the three months ended September 30, 2025, increased to approximately 100,000 from approximately 92,500, an increase of 7,500, or 8.1%, as compared to the prior year period primarily due to an increases in military registrations from students utilizing TA and military-affiliated students utilizing education benefit programs administered by the U.S. Department of Veterans Affairs, or VA. APUS net course registrations for the nine months ended September 30, 2025, increased to approximately 298,800 from approximately 281,300, an increase of 17,500, or 6.2%, as compared to the prior year period primarily due to an increase in registrations by military-affiliated students utilizing VA and students utilizing federal student aid. APUS Segment operating margin increased to 30.4% for the three months ended September 30, 2025, from 27.0% in the prior year period and increased to 28.5% from 26.5% for the nine months ended September 30, 2025, as compared to the prior year period. The increase in operating margin for the three months ended September 30, 2025, was primarily due to the increase in revenue as well as a decrease in information technology costs, partially offset by increases in advertising costs, employee compensation costs, and bad debt expense, as compared to the prior year period. The increase in operating margin for the nine months ended September 30, 2025, was primarily due to an increase in revenue and decreases in information technology costs and professional fees, partially offset by increases in employee compensation costs, advertising costs, loss on assets held for sale, and bad debt expense, as compared to the prior year period.

Previous wording

RU total enrollment for the three months ended June 30, 2025, increased to approximately 14,600 from approximately 13,600, an increase of 1,000, or 7.4%, as compared to the prior year period, driven by a 12.2% increase in online enrollment and a 3.2% increase in on-ground enrollment. RU total enrollment for the six months ended June 30, 2025, increased approximately 7.4%, as compared to the prior year period, driven by an 11.6% increase in online enrollment and a 3.2% increase in on-ground enrollment. RU Segment operating margin improved to negative 3.3% for the three months ended June 30, 2025, from negative 16.6%, in the prior year period. The improvement in the operating margin for the three months ended June 30, 2025, was primarily due to the increase in revenue as well as decreases in information technology costs, depreciation and amortization expenses, loss on leases, and occupancy costs, partially offset by an increase in employee compensation costs and classroom and materials costs, as compared to the prior year period. RU Segment operating margin improved to negative 1.7% for the six months ended June 30, 2025, from negative 16.8% in the prior year period. The improvement in the operating margin for the six months ended June 30, 2025, was primarily due to the increase in revenue as well as decreases in loss on leases, information technology costs, depreciation and amortization expenses, occupancy costs, and advertising costs, partially offset by an increase in employee compensation costs, as compared to the prior year period.

Current wording

RU total enrollment for the three months ended September 30, 2025, increased to approximately 14,900 from approximately 13,500, an increase of 1,400, or 10.4%, as compared to the prior year period, driven by an 11.7% increase in on-ground enrollment, and a 10.8% increase in online enrollment. RU total enrollment for the nine months ended September 30, 2025, increased approximately 8.4%, as compared to the prior year period, driven by a 5.9% increase in on-ground enrollment, and an 11.4% increase in online enrollment. RU Segment operating margin improved to negative 2.0% for the three months ended September 30, 2025, from negative 14.5%, in the prior year period. The improvement in the operating margin for the three months ended September 30, 2025, was primarily due to the increase in revenue as well as decreases in information technology costs and depreciation and amortization expenses, partially offset by an increase in employee compensation costs and classroom and course materials costs, bad debt expense, and professional fees as compared to the prior year period. RU Segment operating margin improved to negative 1.8% for the nine months ended September 30, 2025, from negative 16.0% in the prior year period. The improvement in the operating margin for the nine months ended September 30, 2025, was primarily due to the increase in revenue as well as decreases in information technology costs, loss on leases, and depreciation and amortization expenses, partially offset by an increase in employee compensation costs, classroom and course materials costs, and bad debt expense, as compared to the prior year period.

Previous wording

HCN total enrollment for the three months ended June 30, 2025, increased to approximately 3,700 from approximately 3,300, an increase of 400, or 13.5%, as compared to the prior year period. HCN total enrollment for the six months ended June 30, 2025, increased approximately 11.5%, as compared to the prior year period. HCN Segment operating margin improved to negative 2.2% for the three months ended June 30, 2025, from negative 4.5% in the prior year period, and remained unchanged at negative 3.2% for both the six month periods ended June 30, 2025 and 2024. The improvement in the operating margin for the three months ended June 30, 2025, was primarily due to the increase in revenue as well as a decrease in occupancy costs, partially offset by increases in employee compensation costs, classroom and course materials costs, and bad debt expense, as compared to the prior year period.

Current wording

HCN total enrollment for the three months ended September 30, 2025, increased to approximately 3,700 from approximately 3,100, an increase of 600, or 17.6%, as compared to the prior year period. HCN total enrollment for the nine months ended September 30, 2025, increased approximately 13.5%, as compared to the prior year period. HCN Segment operating margin improved to negative 4.7% for the three months ended September 30, 2025, from negative 5.0% in the prior year period, and improved to 3.7% for the nine month period ended September 30, 2025, from negative 3.8% in the prior year period. The improvement in the operating margin for the three and nine months ended September 30, 2025, was primarily due to the increase in revenue partially offset by increases in employee compensation costs, classroom and course materials costs, information technology costs, and bad debt expense, as compared to the prior year period.

Previous wording

Revenue. Our consolidated revenue for the six months ended June 30, 2025, was $327.3 million, an increase of $20.0 million, or 6.5%, compared to $307.3 million for the six months ended June 30, 2024. The increase in revenue was primarily due to a $12.6 million, or 11.9%, increase in revenue in our RU Segment, an $8.0 million, or 5.1% increase in revenue in our APUS Segment, and a $3.0 million, or 9.0%, increase in revenue in our HCN Segment, partially offset by a $3.6 million, or 33.6%, decrease in GSUSA revenue included in Corporate and Other. The RU Segment revenue increase, as compared to the prior year period, was primarily due to a 7.4% increase in total student enrollment and the impact of tuition increases in 2024. The APUS Segment revenue increase was primarily due to a 5.3% increase in net course registrations, as compared to the prior year period. The HCN Segment revenue increase was primarily due to an 11.5% increase in total student enrollment.

Current wording

Revenue. Our consolidated revenue for the three months ended September 30, 2025, was $163.2 million, an increase of $10.1 million, or 6.6%, compared to $153.1 million for the three months ended September 30, 2024. The increase in revenue was primarily due to an $8.2 million, or 15.6%, increase in revenue in our RU Segment, a $6.2 million, or 8.0%, increase in revenue in our APUS Segment, and a $2.9 million, or 19.0%, increase in revenue in our HCN Segment, partially offset by a $7.3 million, or 89.6%, decrease in GSUSA revenue included in Corporate and Other for the period prior to the GSUSA Sale Date. The RU Segment revenue increase was primarily due to a 10.4% increase in total student enrollment and the impact of tuition increases in the second half of 2024. The APUS Segment revenue increase was primarily due to an 8.1% increase in net course registrations, as compared to the prior year period. The HCN Segment revenue increase was primarily due to a 17.6% increase in total student enrollment, as compared to the prior year period.

Previous wording

Costs and expenses. Costs and expenses for the three months ended June 30, 2025, were $155.7 million, an increase of $5.1 million, or 3.4%, compared to $150.7 million for the three months ended June 30, 2024. Costs and expenses for the three months ended June 30, 2025, included $1.7 million in pre-tax professional fees in Corporate and Other relating to the Combination and the sale of GSUSA. Costs and expenses in the prior year period included a $0.8 million loss on leases in our RU Segment, $0.5 million in severance costs related to the former president of GSUSA in Corporate and Other and the planned closure of the Wisconsin campuses in our RU Segment, and $0.2 million in information technology transition service costs in our APUS and HCN Segments as well as Corporate and Other, all on a pre-tax basis. Costs and expenses for the three months ended June 30, 2025, as compared to the prior year period, excluding the items noted above, increased $4.8 million, or 3.2%, due primarily to 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. Costs and expenses as a percentage of revenue decreased to 95.7% for the three months ended June 30, 2025, from 98.5% for the three months ended June 30, 2024.

Current wording

Costs and expenses. Costs and expenses for the three months ended September 30, 2025, were $153.5 million, an increase of $4.5 million, or 3.0%, compared to $149.0 million for the three months ended September 30, 2024. Costs and expenses for the three months ended September 30, 2025, include a $3.9 million loss on sale of subsidiary in Corporate and Other related to the sale of GSUSA, and $0.8 million in professional fees related to the Combination and the sale of GSUSA in Corporate and Other, $0.6 million in severance costs in our HCN Segment and Corporate and Other, and a $0.1 million loss on leases in our RU Segment, all on a pre-tax basis. The results in the prior year period include $1.1 million of information technology transition services costs in all segments as well as Corporate and Other, $0.8 million in professional fees in Corporate and Other relating to the Combination, both on a pre-tax basis. Costs and expenses for the three months ended September 30, 2025, as compared to the prior year period, excluding the items noted above, increased $1.1 million, or 0.8%, due primarily to increases in employee compensation costs, advertising costs, bad debt expense, and classroom and course materials costs, partially offset by decreases in information technology costs, occupancy costs, depreciation and amortization expenses, and professional fees. Costs and expenses as a percentage of revenue decreased to 94.1% for the three months ended September 30, 2025, from 97.3% for the three months ended September 30, 2024.

Previous wording

Instructional costs and services expenses. Our instructional costs and services expenses for the three months ended June 30, 2025, were $78.4 million, an increase of $2.2 million, or 2.9%, compared to $76.2 million for the three months ended June 30, 2024. The increase in instructional costs and services expenses was primarily due to increases in faculty compensation costs in our RU, APUS, and HCN Segments due to an increase in registrations at APUS and enrollments at RU and HCN, and an increase in classroom and course materials costs in our RU and HCN Segments, partially offset by decreases information technology costs in our RU Segment and occupancy costs in our RU and HCN Segments. Instructional costs and services expenses as a percentage of revenue decreased to 48.2% for the three months ended June 30, 2025, from 49.8% for the three months ended June 30, 2024.

Current wording

Instructional costs and services expenses. Our instructional costs and services expenses for the three months ended September 30, 2025, were $74.7 million, a decrease of $0.7 million, or 0.9%, compared to $75.4 million for the three months ended September 30, 2024. The decrease in instructional costs and services expenses was primarily due to the sale of GSUSA and decreases in information technology and occupancy costs in our RU Segment, partially offset by increases in faculty compensation costs and course materials costs in our APUS, RU, and HCN Segments due to an increase in registrations at APUS and enrollments at RU and HCN. Instructional costs and services expenses as a percentage of revenue decreased to 45.8% for the three months ended September 30, 2025, from 49.2% for the three months ended September 30, 2024.

Previous wording

Selling and promotional expenses. Our selling and promotional expenses for the three months ended June 30, 2025, were $35.0 million, an increase of $1.2 million, or 3.6%, compared to $33.8 million for the three months ended June 30, 2024. The increase in selling and promotional expenses was primarily due to increases in employee compensation costs in all our segments, and an increase in advertising costs in our APUS and HCN Segments, partially offset by a decrease in advertising costs in our RU Segment. Selling and promotional expenses as a percentage of revenue decreased to 21.5% for the three months ended June 30, 2025, from 22.1% for the three months ended June 30, 2024.

Current wording

Selling and promotional expenses. Our selling and promotional expenses for the three months ended September 30, 2025, were $36.1 million, an increase of $2.7 million, or 8.0%, compared to $33.5 million for the three months ended September 30, 2024. The increase in selling and promotional expenses was primarily due to increases in advertising costs in all segments, and an increase in employee compensation costs in our RU and HCN segments, partially offset by a decrease in professional fees in our APUS Segment, and the sale of GSUSA. Selling and promotional expenses as a percentage of revenue increased to 22.1% for the three months ended September 30, 2025, from 21.9% for the three months ended September 30, 2024.

Previous wording

General and administrative expenses. Our general and administrative expenses for the six months ended June 30, 2025, were $74.6 million, an increase of $3.9 million, or 5.4%, compared to $70.7 million for the six months ended June 30, 2024. General and administrative expenses for the six months ended June 30, 2025, included $2.7 million in pre-tax professional fees relating to the Combination in Corporate and Other and the sale of GSUSA. General and administrative expenses for the six months ended June 30, 2024, included $2.0 million in information technology transition service costs in our APUS and HCN Segments as well as Corporate and Other, and $0.5 million in severance costs related to the former president of GSUSA in Corporate and Other and the planned campus closures of our campuses located in Wisconsin in our RU Segment, both on a pre-tax basis. The increase in general and administrative expenses was primarily due to increases in employee compensation costs and professional fees in Corporate and Other, and bad debt expense in all of our segments, partially offset by a decrease in information technology costs and employee compensation costs in our APUS and RU Segments. Consolidated bad debt expense for the six months ended June 30, 2025, was $9.8 million, or 3.0% of revenue, compared to $8.5 million, or 2.8% of revenue in the prior year period. General and administrative expenses as a percentage of revenue decreased to 22.8% for the six months ended June 30, 2025, from 23.0% for the six months ended June 30, 2024. As we continue to evaluate enhancements to our business capabilities, we may incur additional costs and that our general and administrative expenses will vary from time to time.

Current wording

General and administrative expenses. Our general and administrative expenses for the three months ended September 30, 2025, were $34.7 million, a decrease of $0.3 million, or 1.0%, compared to $35.0 million for the three months ended September 30, 2024. The decrease in general and administrative expenses is primarily due to decreases in information technology costs in our APUS and RU Segments and Corporate and Other, and the sale of GSUSA, partially offset by increases in employee compensation costs in all segments and Corporate and Other, and an increase in bad debt expense in all segments. Consolidated bad debt expense for the three months ended September 30, 2025, was $5.6 million, or 3.4% of revenue, compared to $4.2 million, or 2.7% of revenue in the prior year period. General and administrative expenses as a percentage of revenue decreased to 21.3% for the three months ended September 30, 2025, from 22.9% for the three months ended September 30, 2024. As we continue to evaluate enhancements to our business capabilities, we may incur additional costs, and our general and administrative expenses will vary from time to time.

Previous wording

Depreciation and amortization expenses. Depreciation and amortization expenses were $4.1 million for three months ended June 30, 2025, compared to $5.2 million in the prior year period, a decrease of $1.1 million, primarily related to the full amortization of all definite lived intangible assets in our RU Segment in 2024. Depreciation and amortization expenses as a percentage of revenue was 2.5% and 3.4% for the three months ended June 30, 2025, and 2024, respectively.

Current wording

Depreciation and amortization expenses. Depreciation and amortization expenses were $3.9 million for three months ended September 30, 2025, compared to $5.1 million in the prior year period, a decrease of $1.1 million, primarily related to the full amortization of all definite lived intangible assets in our RU Segment in 2024. Depreciation and amortization expenses as a percentage of revenue was 2.4% and 3.3% for the three months ended September 30, 2025, and 2024, respectively.

Previous wording

Loss on leases. RU Segment loss on leases was $3.7 million for the six months ended June 30, 2024. There was no loss on leases in the current year period.

Current wording

Loss on leases. RU Segment loss on leases was $0.1 million for the three months ended September 30, 2025. There was no loss on leases in the prior year period.