Aspen Group Reports Third Consecutive Quarter of Net Income for Second Quarter Fiscal 2026 | ASPU Stock News

Continued profitability expansion with net income of $0.7 million versus net loss of $(1.1) million in Q2 FY2025, and up from net income of $0.4 million in Q1 FY2026Revenue of $11.2 million; USU increases 9% year-over-yearDisciplined cost controls deliver operating income of $1.0 millionPositive 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 USUNet income (loss)$651,738 $(2,800,567) $428,780 $3,023,525Per share information available to common stockholders: Earnings per share - Basic$0.02 Earnings per share - Diluted$0.01 Three Months Ended October 31, 2024 Consolidated AGI Corporate AU USUNet income (loss)$(1,057,420) $(1,611,277) $(1,866,384) $2,420,241Per share information available to common stockholders: Loss per share - Basic$(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 USUEBITDA$1,631,062 $(2,425,361) $871,880 $3,184,543EBITDA Margin15% NM 22% 44%Adjusted EBITDA$2,468,810 $(2,343,696) $1,341,195 $3,471,311Adjusted EBITDA Margin22% NM 34% 48%_______________NM - Not meaningful Three Months Ended October 31, 2024 Consolidated AGI Corporate AU USUEBITDA$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 Q2'26AU508 359 350 338 297USU442 196 258 338 378Total950 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 Q2'26AU3,827 3,564 3,375 3,140 2,771USU2,560 2,475 2,434 2,369 2,302Total6,387 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 Q2'26AU2,948 2,745 2,606 2,418 2,122USU2,300 2,297 2,254 2,210 2,153Total5,248 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 Net income (loss) Margin 6% (9)% EBITDA Margin 15% 1% Adjusted EBITDA Margin 22% 14% The following tables present a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA and of net income (loss) margin to EBITDA margin and Adjusted EBITDA margin by business unit: Three Months Ended October 31, 2025 Consolidated AGI Corporate AU USUNet income (loss)$651,738 $(2,800,567) $428,780 $3,023,525Interest expense, net 295,530 295,530 — —Tax expense, net 42,504 11,789 26,840 3,875Depreciation and amortization 641,290 67,887 416,260 157,143EBITDA 1,631,062 (2,425,361) 871,880 3,184,543Provision for credit losses 450,000 — 225,000 225,000Stock-based compensation 30,486 30,170 — 316Severance 232,659 51,495 174,514 6,650Non-recurring charges - Other 124,603 — 69,801 54,802Adjusted EBITDA$2,468,810 $(2,343,696) $1,341,195 $3,471,311 Net income (loss) Margin6% NM 11% 42%EBITDA Margin15% NM 22% 44%Adjusted EBITDA Margin22% NM 34% 48%_______________NM - Not meaningful Three Months Ended October 31, 2024 Consolidated AGI Corporate AU USUNet income (loss)$(1,057,420) $(1,611,277) $(1,866,384) $2,420,241Interest expense, net 342,490 342,490 — —Tax expense, net 46,225 15,479 25,900 4,846Depreciation and amortization 794,895 73,832 576,433 144,630EBITDA 126,190 (1,179,476) (1,264,051) 2,569,717Provision for credit losses 450,000 — 225,000 225,000Stock-based compensation 98,245 94,819 1,954 1,472Severance 35,522 8,357 23,622 3,543Impairments of right-of-use assets and tenant leasehold improvements 1,848,209 — 1,848,209 —Change in fair value of put warrant liability (1,085,145) (1,085,145) — —Non-recurring charges - Other 75,999 — 75,999 —Adjusted EBITDA$1,549,020 $(2,161,445) $910,733 $2,799,732 Net income (loss) Margin(9)% NM (39)% 36%EBITDA Margin1% NM (26)% 38%Adjusted EBITDA Margin14% NM 19% 42% Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including the expected general and administrative savings to be achieved by the third quarter of the fiscal year ending April 30, 2026 (“Fiscal 2026”), increased marketing spend, our refinancing of our 15% Debentures, and achieving positive operating cash flow for Fiscal 2026, the future boost of enrollment including growth in the post-licensing nursing student body and our liquidity. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include the continued demand of nursing students for the new programs, student attrition, national and local economic factors including the impact of tariffs on the economy and affordability in general, competition from nursing schools in local markets, the competitive impact from the trend of major non-profit universities using online education and consolidation among our competitors, the impact, if any from any future U.S. government shutdowns, and our ability to refinance our outstanding convertible debentures. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. About Aspen Group, Inc. Aspen Group, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again. Investor Relations Contact Kim RogersManaging DirectorHayden IR385-831-7337 Kim@HaydenIR.com GAAP Financial Statements ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS October 31, 2025 April 30, 2025 (Unaudited) Assets Current assets: Cash and cash equivalents$261,918 $736,871 Restricted cash 338,002 338,002 Accounts receivable, net of allowance of $5,862,014 and $5,731,139, respectively 16,712,629 17,167,346 Prepaid expenses 340,630 443,366 Other current assets 841,072 518,171 Total current assets 18,494,251 19,203,756 Property and equipment: Computer equipment and hardware 897,124 894,251 Furniture and fixtures 1,974,271 1,974,271 Leasehold improvements 5,621,087 5,621,087 Instructional equipment 529,299 529,299 Software 7,886,764 7,527,066 16,908,545 16,545,974 Less: accumulated depreciation and amortization (11,157,520) (9,907,309)Total property and equipment, net 5,751,025 6,638,665 Goodwill 5,011,432 5,011,432 Intangible assets, net 7,900,000 7,900,000 Courseware and accreditation, net 227,952 256,994 Long-term contractual accounts receivable 21,904,037 19,846,823 Operating lease right-of-use assets, net 6,447,146 7,250,407 Deposits and other assets 644,796 657,850 Total assets$66,380,639 $66,765,927 (Continued) ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (CONTINUED) October 31, 2025 April 30, 2025 (Unaudited) Liabilities and Stockholders’ Equity Liabilities: Current liabilities: Accounts payable$3,319,147 $2,055,173 Accrued expenses 2,738,900 2,483,520 Advances on tuition 1,416,428 2,235,332 Deferred tuition 2,373,652 2,535,533 Due to students 2,062,410 2,115,581 Current portion of long-term debt 6,277,684 2,000,000 Operating lease obligations, current portion 3,059,767 2,811,471 Other current liabilities 747,604 185,296 Total current liabilities 21,995,592 16,421,906 Long-term debt, net — 5,224,524 Operating lease obligations, less current portion 10,754,124 12,398,678 Put warrant liabilities 1,427,521 1,427,521 Other long-term liabilities 77,402 327,402 Total liabilities 34,254,639 35,800,031 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value; 1,000,000 shares authorized, 10,000 issued and 10,000 outstanding at both October 31, 2025 and April 30, 2025 10 10 Common stock, $0.001 par value; 85,000,000 shares authorized, 30,063,203 and 28,389,531 issued and outstanding at October 31, 2025 and April 30, 2025, respectively 30,063 28,390 Additional paid-in capital 122,252,421 122,152,533 Accumulated deficit (90,156,494) (91,215,037)Total stockholders’ equity 32,126,000 30,965,896 Total liabilities and stockholders’ equity$66,380,639 $66,765,927 ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) Three Months Ended October 31, Six Months Ended October 31, 2025 2024 2025 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited)Revenue$11,219,245 $11,459,779 $22,659,711 $22,788,616 Operating expenses: Cost of revenue (exclusive of depreciation and amortization shown separately below) 2,479,617 2,885,895 5,164,669 6,233,120 General and administrative 6,658,746 7,237,555 13,569,883 14,564,889 Impairments of right-of-use assets and tenant leasehold improvements — 1,848,209 — 1,848,209 Provision for credit losses 450,000 450,000 900,000 900,000 Depreciation and amortization 641,290 794,895 1,310,952 1,614,899 Total operating expenses 10,229,653 13,216,554 20,945,504 25,161,117 Operating income (loss) 989,592 (1,756,775) 1,714,207 (2,372,501) Other income (expense): Interest expense (295,530) (342,490) (605,921) (689,660)Change in fair value of put warrant liability — 1,085,145 — 1,906,132 Other income, net 180 2,925 180 16,762 Total other (expense) income, net (295,350) 745,580 (605,741) 1,233,234 Income (loss) before income taxes 694,242 (1,011,195) 1,108,466 (1,139,267) Income tax expense 42,504 46,225 49,923 46,017 Net income (loss) 651,738 (1,057,420) 1,058,543 (1,185,284) Dividends attributable to preferred stock (63,519) (7,057) (105,864) (148,209) Net income (loss) available to common stockholders$588,219 $(1,064,477) $952,679 $(1,333,493) Per share information available to common stockholders: 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) Weighted average number of common stock outstanding: Basic 29,902,903 26,692,457 29,480,057 26,308,766 Diluted 39,985,232 26,692,457 40,245,130 26,308,766 ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) Six Months Ended October 31, 2025 2024 (Unaudited) (Unaudited)Cash flows from operating activities: Net income (loss)$1,058,543 $(1,185,284)Adjustments to reconcile net income (loss) to net cash provided by operating activities: Provision for credit losses 900,000 900,000 Depreciation and amortization 1,310,952 1,614,899 Stock-based compensation 62,666 190,836 Change in fair value of put warrant liability — (1,906,132)Amortization of warrant-based cost — 7,000 Amortization of debt issuance costs 35,440 — Non-cash lease (benefit) expense (536,382) 107,696 Impairments of right-of-use assets and tenant leasehold improvements — 1,848,209 Changes in operating assets and liabilities: Accounts receivable (2,502,497) (762,744)Prepaid expenses 102,736 (171,330)Other current assets (322,901) 799,264 Deposits and other assets 13,054 25,695 Accounts payable 1,263,974 (1,072,854)Accrued expenses 255,380 430,795 Due to students (53,171) (264,878)Advances on tuition and deferred tuition (980,785) (965,151)Other current liabilities 562,308 424,954 Other long-term liabilities (250,000) — Net cash provided by operating activities 919,317 20,975 Cash flows from investing activities: Purchases of courseware and accreditation (31,700) (33,110)Purchases of property and equipment (362,570) (565,068)Net cash used in investing activities (394,270) (598,178) Cash flows from financing activities: Repayment of portion of 15% Senior Secured Debentures (1,000,000) (721,066)Payments of debt issuance costs — (155,376)Net cash used in financing activities (1,000,000) (876,442) (Continued) ASPEN GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)(Unaudited) Six Months Ended October 31, 2025 2024 (Unaudited) (Unaudited)Net decrease in cash, cash equivalents and restricted cash$(474,953) $(1,453,645)Cash, cash equivalents and restricted cash at beginning of period 1,074,873 2,619,427 Cash, cash equivalents and restricted cash at end of period$599,920 $1,165,782 Supplemental disclosure of cash flow information: Cash paid for interest$605,921 $689,660 Cash paid for income taxes$49,923 $46,017 Supplemental disclosure of non-cash investing and financing activities: Accrued dividends$63,519 $7,057 Common stock issued for accrued dividends$144,757 $200,988 The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying consolidated balance sheet to the total amounts shown in the accompanying unaudited consolidated statements of cash flows: October 31, 2025 2024 (Unaudited) (Unaudited) Cash and cash equivalents$261,918 $827,780 Restricted cash 338,002 338,002 Total cash, cash equivalents and restricted cash$599,920 $1,165,782