American Public Education (APEI) The 44th Annual William Blair Growth Stock Conference summary

Market positioning and growth strategy

• Operates four educational institutions serving over 125,000 adult learners, focusing on online and campus-based post-secondary education.

• Holds leading positions in educating active duty military, veterans, and new nurses, with strong referral rates and a defensible market moat.

• Addresses a significant supply-demand gap in nursing, with 250,000 new nurse openings annually for the next decade.

• Expanding geographically, adding campuses and states, and leveraging unique program offerings tailored to military and healthcare needs.

• Graduate School USA diversifies revenue away from federal student aid, focusing on federal workforce training.

Financial performance and outlook

• Delivered on financial projections for five consecutive quarters, with annual earnings guidance reinstated for the first time in 14 years.

• Forecasts 3%-5% revenue growth and positive net income for 2024, with adjusted EBITDA guidance raised to $60–$70 million.

• Maintains a strong balance sheet with $153 million in cash and no net debt, and highlights robust free cash flow growth.

• Stock buyback program retired 10% of shares at an average price of $7, reflecting confidence in valuation.

• Sees current valuation as significantly below industry multiples, with further upside as growth restrictions lift.

Operational improvements and efficiency

• Split Rasmussen into campus-based and online units, increasing transparency and driving $10 million in cost reductions.

• Brought marketing in-house, saving $7 million, and plans to internalize IT for further savings by Q3 2024.

• Operational changes expected to yield higher incremental margins as enrollments recover.

• Focused on capital allocation, with attention to preferred equity and debt obligations, and maintaining compliance with Department of Education financial responsibility scores.