American Public Education, Inc. (APEI) Earnings Call Transcript & Summary

All right. I am so excited to welcome all of you to our APEI 2025 Investor Day. Can someone join David in the table over. He's all by himself over here. There are so many of you. I've had the good fortune of meeting in person. But I feel like I've met almost all of you because we've had Zooms for a long time. And so it is surprising sometimes when you realize it's been years and you haven't met each other in person. But I'm really excited for our meeting today and can't wait to share the story of where we're headed. But for those I haven't spent a lot of time with, I want to give you a little bit of background about who I am. Basically, I am a product of a small town in Central Wisconsin. And I was part of a family where my dad actually completed his undergrad degree through the GI bill. He was an Air Force veteran and was able to leverage those benefits after he left the services and then I was born. But what's really interesting as well is that he also served as the Head of HR. There's a very large VA hospital in Tomah, Wisconsin, which is where I grew up. And I distinctly remember even when we were having family dinners that he would come home and tell us how frustrated he was that he couldn't get enough nurses in the VA hospital in Tomah, Wisconsin. And so that problem obviously continues to plague us even here today and something exciting as a tailwind that we're about to talk about. My mom was a teacher. She was a preschool teacher, ran a school there as well. And what -- so the environment I grew up in was an environment of my parents in service to others. My dad was in service to his colleagues at the VA hospital, my mom in service to her children in her school. And it was really an important backdrop. So people have also asked me, how did you come to APEI? How did this happen? And I said, when I first was introduced to APEI, I was astonished at the value proposition. And for those of you who know me, I used to call APEI and still do, higher education's best kept secret. So more of you know the secret here today than you did 6 years ago when I first joined. But what made me think that were a couple of incredible facts, which are still true today, and you'll hear about this in a few minutes. 72% today of our APUS students graduate with no student debt from APUS, 72%. And that's because of our deep affiliation with the Department of Defense and active duty military. I was astonished. Also, Hondros, which we owned at the time before I joined, had a value proposition that was incredible for nurses, where in 12 to 18 months, you could complete your degree, you could get a very well-paying job, even better these days. And in 12 to 18 months, you would have a full ROI on your educational investment and a career that would last for 40 years. So when I was introduced to APEI, I said, my gosh, this story has to be told. We have to get this news out to the world because this is an incredible way for us to support our society. And so many of you know that story. So today's meeting here is to tell you about the next chapter of where APEI is headed. But before we tell you any of that stuff, of course, I have to give you the forward-looking statement disclaimer, right, because we'll be saying some things here today that our legal team wants to make sure you're reminded of forward-looking statements. But back to this idea of APEI being higher education's best kept secret. I think when you look at higher education today, there are many institutions who are now pretty unsure of who they are and who they serve. And at the same time, as the world starts to get more complicated and changing, students are looking at the places they graduated from and wondering now today, what those schools actually stand for. I'm here to tell you today that our purpose is clear, and it remains clear that we don't have those problems here. We educate people who serve. We support military learners, veterans, nurses, frontline professionals, all who keep this country moving. This is not a marketing message. It's the foundation of our identity, and it's the core of our value. A lot of institutions talk about online learning. It became very in vogue after COVID when people had to scramble to find different learning modalities. But very few institutions have the discipline, the commitment and the mobility and the flexibility to support a military learner. For nearly 35 years, APUS has earned the trust of the Department of Defense and the veteran community. If you think about that for a minute, trust is not something you can borrow, and it's not something you can buy. It's built slowly. And once you have it, it becomes a long-term advantage that competitors simply cannot match. You see that same strength for us in health care. Rasmussen around for 125 years. Hondros around for almost 20 years. We train nurses in a moment when the country needs them more than ever. The nursing shortage will define the next decade. Some institutions teach online, some in the campuses, but we offer both. We believe that gives us flexibility, the opportunity to scale, and it provides our partners with a very reliable, consistent pipeline of high-quality graduates. It also puts us, as many of you know, at the center of one of the most essential workforce transitions in America. There's another point, though, that I want to make sure we all remember. The careers that we support rely on human judgment and compassion and real presence. These are roles that are aligned with the future of work and remain largely protected from automation and from AI. That gives us a rare position. We serve fields that are stable and enduring, and we are using technology ourselves to make learning more personal and more efficient. Technology gives us the opportunity for growth, resilience and room to innovate. But you're all here today because we're going to talk about our next chapter. We are just at the beginning of this growth path for APEI. The progress that you're going to learn more about today reflects the first stage of a larger shift, where our business will use data, technology and to drive efficiency and improve the economics of how we serve our students. We all know there's more value to unlock, and we have a long runway ahead. So when we look at what is the core of APEI, it's about purpose, it's about resilience and it's about discipline. These results that we'll talk with you about today and the future that we're about to unfold happen when purpose, resilience and discipline come together. When you know who you serve, when you operate with clarity, when you support essential careers and when you run the enterprise with a long-term view, you create something very rare. So APEI has a mission that matters. It's a company that compounds value over time. When students today are questioning the value of higher education, our purpose is unmistakable and tied to real workforce needs. We serve those essential AI-resilient careers. We have strong financial discipline, and we are still very early in our growth story. So my hope is that you leave here today learning something new about us, but more important that you leave here today striving to know even more. So before we get started, I want to send a big congratulations and thank you to our team at MZ. Roy is here today. Brian is somewhere here. Brian? Brian is in the back, who helped make this event happen and also our great team at APEI, Jess and David and A.J. and Desy, who helped to make this meeting happen. They are all here to support you. So if you need anything, please don't hesitate to reach out to them, and they'll be happy to assist you in any way. All right. So with that, let's dive in. How many of you know the APEI story? Raise your hand. Okay. There's a lot of you. So we're going to move quickly here, but we wanted to make sure that for those of you who don't, we can do a quick grounding in who we are. We have 3 institutions today, and we transform lives, advance careers and improve communities. Our education is purpose-built. It is specifically built for active duty military, veterans, military families, nurses and health professionals. We're proud of the accessible, meaning easy for people to enroll, affordable, 72% of APUS students graduate with no debt, post-secondary education. And this year, we are educating 108,000 students. You can see APUS is our educator of active duty military and veterans, and we have 2 universities today, Rasmussen and Hondros College of Nursing, which together comprise our multistate nursing and health sciences program. So why are you all sitting in this room here today? I know you all have a lot of ideas about why. Let me just tell you a few. We believe that this purpose-built platform that educates those in service to others is a critical differentiator to those that you may compare us to in the market. We prioritize execution that delivers continuous improvement in student outcomes. And today, when we talk about student outcomes, we mean -- how well do we retain students? Do they graduate? How quickly do they consume courses? You'll hear that from Nuno because APUS offers a nontraditional educational experience where students can take one class at a time. It's not like when you went to college and you did 4 quarters or 4 classes in the fall and 4 classes in the spring. It's a very different learning model. So those metrics matter. George, where is George talk to him this morning about NCLEX. That's another metric that matters. So we prioritize the focus on the metrics that matter. We're really proud of the results that we've produced, especially in 2025. And we are very confident that that's a springboard for where we're headed in '26 and beyond. We are strengthening our business by simplifying. We talked a lot this year on the investor calls about simplification, closing corporate offices, selling graduate school, redeeming the preferred, all things that strengthened our balance sheet and simplified our operating model. Our planned efforts to explore new markets and add new programs is a pretty exciting part of what we're going to talk with you about today. We've got a military family segment. We call it the USAA strategy that Nuno is going to talk about, which is showing great promise, very connected to the primary markets that we currently serve today. And we also have a very exciting opportunity to grow Rasmussen and Hondros several different ways, more programs to existing campuses, more campuses in existing states, new states and new markets. And so we're really excited to talk with you about all of that as well. And finally, our strong balance sheet. You all have probably peeked around the corner. We'll talk about that in just a minute. But the significant amount of cash that we are able to generate gives us that platform to be able to do some really thoughtful things. And so we're really excited to have Ed talk today a little bit about where we're focused on investing that capital, but it is a daily choice. It really is because we want to make sure that, that next dollar we invest is the best return on investment for all of you. And so with that, I want to turn then to a quick primer, not too much time because you're all pretty familiar with us. Who is APUS? #1 educator of active duty military, #1 educator of veterans, fully online school, one class at a time. That's why when you hear us talk about enrollment momentum at APUS, that's why we talk about registrations. Because Eric, you could be taking 1 class every 8 weeks, and I could be taking 2 or 3. So we are not equal students in terms of counting revenue. So we count revenue at APUS through registrations. APUS has a very robust course catalog. We offer students a lot of choice, 200 degree and certificate programs. 89,000 students were taking classes with us in 2025, and we have 160,000 alumni. Those aren't 160,000 people that have taken a class with us. That's 160,000 people who have graduated at APUS, an incredible number. Rasmussen and Hondros is our nursing platform and health sciences platform. We are a leading educator in the associates' degree, the LPN and the BSN. Sometimes those acronyms are confusing, so let me just clear it up quickly. Two of those acronyms lead to an RN license. Any you want to tell me what the 2 are? Oh, no, it's okay. Thank you, George. ADN Associates degree, that's the 2-year degree. And a BSN is the Bachelor's degree, all right? So basically, it's the same nursing content and the Bachelor's degree tacks on the Gen Ed so that you get a 4-year undergraduate degree, but you sit for the same license. It's a really important differentiation. And why our students choose an ADN is because it is a great return on educational investment for them. They can do their 2 years of nursing and they can sit for the RN license, and they are off to the races making $90,000 a year for 2 years of education for the rest of their life, incredible value proposition. LPN, 1-year degree, they are making $62,000 a year right now for a 1-year investment in nursing education. So we have students coming to us who believe that, that's an incredible return on their educational investment. You've all heard this many times, Rasmussen operates both online with our post-licensure nursing and health sciences, many other degrees. Mark is going to talk a little bit about that in a minute. But we have 26 campuses where we deliver our first licensure nursing education. Across those 2 organizations, 60 degrees and certificate programs, the full ladder of nursing, 20 health -- 20 health sciences programs and 20,000 students between Rasmussen and Hondros today. Great. Let's talk about how Rasmussen and Hondros compare now from a revenue perspective to APUS. And we're pleased to say that they're roughly equal now. This number, obviously, on a trailing 12-month basis does not include graduate school, the business that we sold, it creates a little confusion in the pie. So this is net of graduate school. All right. So why do we do this? Tuition assistance has been on everyone's mind in this room for the last 3 months, all right? And let's tell you what that is, all right? The Department of Defense has many ways where they can attract volunteer service members to serve our country. One of the most effective ways for them to attract volunteer service members is through tuition assistance. In exchange for your service to our country, you can get a subsidized, I'm not going to say free, subsidized education, all right? You can choose from 2,350 schools to get that education. Why do almost 30% of those students choose us? Because we offer the same -- tuition at the same reimbursement rate that they get for any program they may take anywhere. So that's where 72% of our students pay 0 out-of-pocket. Because if you're an active duty military using tuition assistance or TA, we will be sure that you are not paying any out-of-pocket cost at APUS for that degree. And why does it -- why besides recruiting, does that matter to the Armed services? Because they are trying to build a smarter, more flexible, more creative, more capable service force. So they believe that higher education, an investment that they're making because they're the ones who pay for the service members' education reinforces the capabilities of our armed services. So it's a smart investment that the Department of Defense is making on behalf of their service members. So we talk a lot about TA. It's a big focus for us. It's the roots of APUS, but I'm here to tell you today, we got some big markets to go after. Because if you look at the relative size of tuition assistance, which is active duty military or 2.1 million potential students, we've got 3x as many students we can go after who are in the age range of 18 to 55 who have the opportunity to take additional education as veterans. And oh, by the way, we are the #1 educator of veterans. We have the right to win there. And then this new segment, Nuno is going to talk about where we're seeing substantial growth is our USAA segment, the people who understand who APUS is because they are part of this military and veteran community. They are members of the family. Nuno is going to talk about how we're winning with them. You all have probably -- you're probably done with hearing about TA, but I'm just going to tell you, it's a big budget that they invest every year. Those of you who have asked about the One Big beautiful bill and the $100 million, we are so happy that, that was in that bill because it allowed during the shutdown for Navy and Army and Air Force to actually use those $100 million of already appropriated funds to let people keep it -- let people take courses during the time when the rest of the government was shut down. So we were really excited about the fact that they invested more in the TA funds through the One Big Beautiful Bill. Great. So now we're moving on. Nuno is going to fill all of this out. So I'm not going to steal his thunder. I've talked a lot about zero out-of-pocket costs, but I'm just going to reinforce these outcomes that are so distinctive to APUS, not just the 72%, which I've said several times already, 40% of our students who are active-duty military come from referral. What does that mean? We are not paying marketing costs to get those students. And Nuno is going to show you the different segments, which are equally stunning. 30% of our students, think about this, 30% of our 160,000 alumni have come back for a second degree. No marketing cost, incredible statement about the quality of the education we offer at APUS. Why nursing and health care? You all know this. I don't need to tell you about these tailwinds, right? Nursing employment is expected to increase 6%. We've got 50% of the nursing -- eligible nurses ready to retire, preparing to retire in the next 3 years, 200,000 openings each year for the next 10 years for nursing. And I told you about this median salary, which changed after COVID. People were not making this much money before COVID. LPNs were continuing through to get their RN license, which we're not seeing at Hondros anymore. They're stopping off at the LPN, because they can walk away with $62,000 a year salaries for 1 year of education. But we know we've got a great platform and a place to jump off of with 8 states and 26 campuses between Rasmussen and Hondros. Mark is going to cover a lot of this today. Why do we win at Rasmussen and Hondros. We have an entry point for any student. Because of that nursing ladder, if your best entry point is an LPN, we've got it. If you've already got an undergrad in nursing, you've got your BSN, we've got an MSN for you. If you've got an ADN, you're a 2-year degree and you want to get your bachelors, we've got that, too. So no matter where you're entering, we can turn that lead into a converted student. And so we have an offer for everyone. We talked about these different growth levers Mark is going to take you through. And one of the things that we're really excited about with regard to the combination of Rasmussen and Hondros is that ladder of nursing and health sciences programs only exists today at Ras, okay? We have 20 allied health programs. We have 10 nursing programs. Hondros has 2. So all of that curriculum when we combine can be sold into those locations, those students that all exist in the Hondros campuses. All right. I know you knew all this already. I get it. You're all sitting at the edge of your seat because you've already read ahead, you flipped ahead through the deck and you know it's coming, all right. But I do want to say where are we going from here, right? So first, what I want to do is say we're going to introduce a new APEI. So we decided that at this moment in our history, it was critical that we modernize the way we present ourselves to the public markets and to our students, to our employees, to all of you. The brand is important, and it's distinctive. The stake in the P represents our stake in our military and our health care communities. The I, which is the little part of the P that swings up is an arrow towards future growth. So we couldn't be more excited about what the APEI -- the new APEI brand stands for. We're also introducing new divisions. We don't have to say Ras and Hondros anymore. We're actually combining things like you've all been asking us to do for a long time. We're introducing APUS Global. This is important. All right? You say, wait a minute, why are you going global? Well, we already are. And Nuno is going to talk a little bit about the fact that today already, we educate people in 80 countries. 80 countries and all 50 states. So what we're going to do is extend our reach at APUS. He'll talk a little bit about how we're going to bring multilingual programs into the U.S. and to other markets. But distinctively, if you look at either side of the APUS global logo, you'll still see APU, which is a student brand and AMU, American Military University. Those brands remain the same, and those are the brands that our students are going to be enrolling into. Same at RU Health Plus. The RU obviously stands for Rasmussen. The health incorporates Hondros. And the Plus says we actually do some other things besides health. And Mark is going to tell you why those things at our Rasmussen campuses are really important. So it allows us, though, to create one division, APEI's healthcare platform. And much like APUS Global's brand, you have the Ras Insignia on the left and you have the Hondros Insignia on the right. So when students are enrolling, especially at Rasmussen because it's such a local market experience for students, we're giving them the opportunity to continue to be a Rasmussen student or a Hondros student, but we're going to be talking with you in the future about RU Health Plus. But make no mistake, from my opening remarks, our vision, our mission, our values and our purpose, educating those in service to others remains exactly the same. All right. So here's the big reveal. [ Matt's ] already told me he's right ahead. So we are very excited about what we're going to share with you today because our plans suggest that in 2029, we will deliver between $890 million and $925 million of organic revenue that does not include strategic investments in campuses or other perhaps tuck-in acquisitions. So we have reserved the opportunity to have those wonderful opportunities to be part of our future. And we believe that 1 or 2 of those could actually propel us to $1 billion in revenue by 2029. As all of you have asked us over the last several earnings calls, what's your flow-through margin? And I'm here to tell you today that with a $900 million organic revenue target, we're going to generate between $182 million and $192 million worth of adjusted EBITDA, which is a 20% to 21% enterprise margin. And we have confidence that those strategic investments will allow us to maintain our margins at that level. So while you see a 9% to 10% revenue CAGR, we are going to see a 24% to 26% adjusted EBITDA CAGR. by 2029. So how about a round of applause? That's like exciting, right? All right. Okay. The rest of the day is going to give you some details on all of that, all right? So we're really happy to introduce now the team who's going to do that. Oh, sorry, I thought that was a built. First, I'm really pleased to introduce Ed Codispoti, who is 4 weeks at APEI. So among other remarkable things, he's standing up in front of you today to tell the story of where we're headed 4 weeks in. So he's a very courageous man, and we're really happy to have you on board. Nuno Fernandes has been leading the incredible transformation at APUS and has so much exciting information to share with you about where APUS is headed. And we have 2 folks from Rasmussen here today, Mark Arnold, who's our new President, who he would have been the new guy on the block until Ed showed up, right? So he's been here for less -- a little less than a year. And then Dwayne, Dwayne is over here, yes, who is the old guy on the block. He's been with Rasmussen for 19 years. And so they're here to tell the story of where our RU Health Plus division is headed. So what do we have in front of us here? We're probably off schedule. I'm notorious for that. But we're going to jump into APUS. We're going to jump into RU Health Plus. We're going to take a quick break. And during that break, I would encourage you -- I know you probably saw the student panels over in the break room. There is a QR code on those student panels. And if you scan them, there a video will come up and you'll be able to hear that student story, and some of them will actually bring you to tears. And I'm here to say that we -- those student stories are the reason we do what we do every day, and it's worth grabbing a couple of those and just really understanding the lives of people that we touch. Ed will, after the break, do the financial outlook. I'll give you a quick wrap-up. And then we'd like to spend as much of the last part of our time together with a panel Q&A. And we are going to include more of our esteemed colleagues in the panel when we get to that point. So I'd ask -- I know you may have a few questions for us right now, but I would ask if you could write them down, and we'll collect those questions as we head to the panel discussion, make sure we can get to as many of those questions as we can. So with that, I'm going to introduce APUS Global and Nuno Fernandes. As I said, I could not be more excited to have Nuno having joined our organization just a little over 3 years ago, and you'll see the imprint and the impact that he's had on our organization. But it's not a surprise. He actually came from a financial background. He spent the first decade at a Global 500 organization, leading sales and marketing. In 2012, he headed into higher education, first as the Chief Marketing Officer at Illumina, which is an ed tech company, owned universities, also provided OPM services to many institutions in Latin America. And in 2018, he actually became the CEO and President of that company. He's growth-minded. You'll see that in the first 3 minutes. He's also financially driven. And throughout his career, he has built a track record of delivering profitable growth, margin expansion and market share improvements. I am just so honored to introduce Nuno Fernandes. [Presentation]

Well, good morning, everyone. Welcome to New York. For those of you joining remotely, also welcome to the event. I'm Nuno Fernandez, Angie just introduced me. I'm the President of APUS. I started in September 2022. And a little bit about why I'm here. I had dinner with Angie when we were doing the process of interim process and 2 things attracted me to this organization. One is professional and one was personal, and I'm going to describe the professional one first. The professional one first is that I immediately saw the opportunity to continue expanding APUS in terms of revenue, profitability and social impact. And I believe my instincts were correct. I'm going to show you some data today that I think proves that I was right. But also personally and probably most importantly, I was born in Portugal, and my grandparents were completely illiterate. This means that they didn't know how to read or write. And my parents were first generation in our family to attend college. My father became a lawyer, my mother became a teacher actually. And I could witness firsthand how education transformed their lives and consequently, my life as well. And it's really incredible to think that had they not attended university, I would not be here with you today. I would probably still be living in that small village where I was born. So that's the impact of education that is the impact of what we do, and I could witness personally how impactful that is. But also, additionally, my father before becoming a lawyer, he served this country, Portugal in the special forces as a Ranger for many years. And when your father is a Ranger, you learn a few things. You learn how to do pushups when you're 3 years old. But you also learn to have the utmost respect for everyone that serves. So I was born with that respect, and I was raised with respecting everyone that serves this country. So when I was confronted with the opportunity to lead a school that wants to increase access to quality and affordable education to those who serve or to those who have served, I thought how cool would it be to do to many families, what happened to my family. And that's why I'm here. So today, I look forward to spending time together telling you about the successes we've had over the last 3 years, but more importantly, about where we're heading and all the exciting projects we have ahead of us. So I will start by just with some few highlights about APUS and how unique APUS is. So APUS was founded as AMU, American Military University 34 years ago by a man. His name was Jim Mather. And he had the dream was very simple. His dream was he wanted to offer education with no out-of-pocket costs for active duty military. As a fun fact, we have a few, the university started on a picnic table in the founder's basement. And the first class had 5 people, 2 of them from Holland that no one ever knew how they got here. When APUS opened its doors, they had 4 employees, the founder, a Dean, a Secretary and a COO, which is kind of a fancy name for the guy that was doing all the work. That's it for employees. But today, APUS is the leading educator of military and veterans in the United States. We have almost 90,000 students, more than 160,000 graduates and 25% of our faculty and staff are military or veterans. APUS has been recognized as a center of excellence for cybersecurity by the NSA and Department of Homeland Security. And just recently, last year, we placed 6 in an asset challenge of how to build a robot that wants to go to the moon based on AI. And we placed 6 out of some household names that you might recognize like Harvard, for example. We were the winners of the CCME award. This is the Council of College and Military Educators. Last year, we won this award for the second time. It's important to say that once you win this award, you cannot win it again for 8 years. Otherwise, I believe we will get it probably every year. And we also recognized by the National Department of Transportation for our defense and transport impact. Additionally, we work with a lot of great partners on the B2B area. You see some names there on the screen, Boeing, UPS, FedEx. And this is a channel that has been growing and been getting more and more important for APUS. So we're very honored and proud to work with such powerful partners. But also, I'd like to share some additional highlights about what makes APUS so unique. And this is very important. I want to spend some time here. I think it's important for you to understand why APUS is very hard to replicate and copy. We're very unique because -- we have a purpose-built platform that has been -- that we've been developing over the last 2 decades to serve the military. And this is incredibly hard to replicate simply because you cannot buy it off the shelf. You cannot go to market and say, give me a platform that serves the military. You cannot buy it. You have to customize it, you have to invest a lot of time, a lot of money. And then you're going to do that to serve a population that is going to pay you a very affordable low tuition. So it's something that is very hard for the universities to replicate. We have an academic model. Angie briefly touched on this, that has monthly starts, and that has a very generous credit transfer policy. So we recognize, for example, military service. We give them credit for their service. It's very unique about APUS as well. And we offer 0 out-of-pocket costs for all undergraduate active duty students. That means that they study for free with no cost. It's paid by the tuition assistance that the Department of Defense gives them. And here, I want to spend just a few seconds explaining our tuition model because it's going to be relevant for the rest of our presentation. We essentially have a 3-tiered tuition model. We have a price for military students, which matches the Department of Defense tuition assistance. We have a special price for veterans. And then we match that price of military and veterans, we match their price for their extended families. This is what Angie was referring to as the USAA model, which is if you are a veteran, if you are a military person, your extended family as the same price that you would have even if you are not a student at APUS. That's a new channel that we started in 2024, and it's growing significantly, and I'll share some data today, but it's something that for us, it's been very interesting because we always -- we were always debating how can we compete in the "civilian market", in the nonmilitary market. And we found a way that is logical for us to compete, which is we found a way to compete that makes sense with our DNA, which is to serve the extended families of the military and veterans. And we've been doing this very successfully, although it's a new channel for us. We also offer career services for life. And why is this important? It's important because a lot of our military students, eventually, they want to transition to the civilian life, right? And when they transition, they're going to look for a job. They want to know how to do an interview. They want to be prepped. They want to look for job opportunities. So we offer them career services for life with no cost. And finally, a large point of differentiation that we have is our military outreach team, which is essentially a large team that is out there visiting the main military installations and building relationships with service members and their education service officers. All these things produce some results that are incredible. We have 72% of our students graduating with no student debt. We have 40% of our students on the military side coming from referrals. I've been in education for more than 12 years now, and I've never seen a referral rate this high. I'm not saying it's the highest, but I've never seen a highest -- high referral rate than this one. 40% of our students, they come with no marketing costs associated, and this translates into high conversion rates and lower acquisition costs. But also 30%, think about this, 1/3 of our students, 1/3 of our military student veterans students, they come back for a second degree, 1/3. They like it so much that they decide to do a second one. And this speaks highly about the satisfaction and the loyalty that they have towards our brand. Now over the years, we have served hundreds of thousands of students. We have more than 160,000 graduates in the 50 states and 80 countries around the world. Many of our students, I would say the large majority of our students, they evolve to being promoted in the military or they evolve like to meet management positions once they transition to the civilian life. Many of them become entrepreneurs in small businesses, and we have a lot of stories to share, actually some beautiful ones. But at the same time, we're very proud of our overachievers, and we also have a lot of them. And these are 3 examples of overachievers, 3 individuals that are notable graduates. General Caine is the highest ranked individual in the U.S. military and one could argue in the world. Nicole was the first woman flying the Thunderbirds, and JD is the Chief Medical Officer of NASA. Now 2 things are interesting about this individual is that they chose APUS for their graduate studies. This is not -- they didn't choose APUS for their undergraduate studies. They chose APUS for their graduate studies. And not only they were students, but for a period of time, General Caine and JD were also faculty. This is not uncommon. A lot of our students, they want to give back to the community. And the way they decide to do this is by being part-time faculty. And they've been part-time faculty for a long period of time. They no longer do that, but it's not uncommon. And in fact, a lot of our faculty are working practitioners in the fields that they teach, which is something that is a very high value for our students. Now -- when you look at APUS market leadership, and let's start with the market share in the military market. And I'm going to say this, over the last 5 years alone, APUS has gained 1,090 basis points of market share or 60% more. So I'm going to say this again because 1,090 basis points of market share and 60% or a 60% improvement. APUS and UGC UMGC stands for University of Maryland Global Campus, which is the second largest player in this market. They hold almost 50% of this audience. And one could ask, why is that? There are about 2,500 universities and colleges that could serve this audience. Why is it that only 2 of these schools have 50% of the market. We believe the reason for this concentration is that it is very hard, sometimes impossible for most universities to be competitive in the military space while being profitable. For us, we were built and engineered around tuition assistance. So for us to charge $250 per credit hour is not the exception. That's the norm. So where others struggle, we thrive because we were built and engineered around that tuition assistant value, and we are able to deliver excellent quality education with 30% plus EBITDA margins. I can share a quick story that just happened last year when actually I was receiving the CCME award in 2024. And I was invited to a panel with 2 other presidents. One of the presidents was President of a private school, a very large one, and the other was President of a state school. And we were talking to a military audience, right? And they spend, I'm going to say, 80% of their time arguing that it's almost impossible for them to serve the students because with $250 per credit hour, they cannot do it in a profitable way. And when I was asked the question, I said, we're fine. Our numbers are public. You can see our numbers. We're fine. Of course, if the tuition assistance value goes up, we'll all benefit from it, but we are delivering excellent education as 30% plus EBITDA margins. So we were engineered around that tuition rate, while others have to adapt to serve that audience. And I believe that's why there's so much concentration, and I believe that's why APUS continues to gain market share in this segment because we were purpose-built to serve it. Having said that, I think there are significant growth opportunities. You might have heard or read in the news, that this year, for the first time in a while, the enlistments targets were achieved, right? So that will eventually translate into more people entering the system in terms of education. And it is also clear from conversations with high-ranked senior officials, and we have 2 3-star generals on our Board actually. And when we talk with these high-ranked senior officials, it is clear that the needs of our armed forces are evolving. The modern warfare is not what it used to be, and it will not be what it used to be. It's going to be around cyber, AI, quantum computers, homeland security, supply chain management and many other aspects. So the theory that we have is that the military will need more education. The military will need to learn all these new skills. The military will need to learn all these new these new things that will define the future of warfare, and we are here to serve them. So we are uniquely positioned to continue expanding in this market, as you can see. And I believe that organically, you will continue to see an increase in our market share over time. Now when you look at the veteran market, it's very different, right? The veteran market, it is much larger. Angie said, and it's there on the screen, there's 6.2 million veterans between the ages 18 and 54. But the veteran market is a lot more interesting for many universities because they pay with the GI bill. And what that means is that they don't have the same caps that the tuition assistance does. So they are able to pay higher tuition rates, which opens the market for more universities that can indeed compete at a profitable -- in a profitable way with veterans. However, even in those circumstances, -- and I would argue that when you look at our marketing cost vis-a-vis the other competitors, we are incredibly efficient. Even under those circumstances, APUS is the #1. And that speaks highly about the loyalty that these students have towards us because a lot of these students were military and eventually, they transition to being veterans. And we are the leading educator of this audience as well. And finally, to conclude this chapter, just some -- a few additional highlights. So of course, not surprisingly, our population is heavily skewed towards military and veterans, but 16% of our students are nonmilitary. And this is the sum of civilians and extended families. Extended families is growing very rapidly. I will address that momentarily. The TAMs are quite large, 2.1 million for military. Currently, only 10% of this population is using tuition assistance. Only 10% of the 2.1 million is currently enrolled in higher education is in tuition assist. So it's a major opportunity for APUS if that percentage expands in the future. There are 6.2 million -- sorry, I apologize, there are 6.2 million veterans, as I said. And the size of the extended families, these are 20 million people between the ages 18 and 45 that do not have a higher education degree. There are siblings, spouses, partners, parents, children, which is what we call extended families, anyone that is directly connected to the military person or to the veteran. Something quite extraordinary about APUS, and I mentioned this before, are the student referrals. I don't want to repeat myself, but these are probably the highest numbers I've ever seen in my career, and it's not even a cold second. It's not even a cool second. There might be larger numbers, I've never seen them. But also the number of students that come back for a second degree, and I've also mentioned these, it's very impressive in the military and veteran side. But also when you look at extended families and nonmilitary, it's actually equally impressive, not as impressive, but equally impressive. And the growth. In the military, year-to-date, this is year-to-date September, so 25 September versus 24 September. With the military, our growth year-to-date was 3%'s very stable, mature market. But look at the growth we're having with veterans, 15% and look at the growth we were having with extended families, 22%, 22%. We are serving an audience that is deeply connected with the military and veteran lifestyle. And again, as I said, we found a way of addressing the "civilian market" in a way that makes sense for us and that it is very close to our DNA. Now for the balance of our time together, I want to focus on 3 topics. And really, that's it. If you can leave here today with these 3 ideas, I did a good job. And hopefully, you'll be as excited as I will try to be when I present them. The first one is I want to show you the great work that the management team has done over the last 3 years, where we delivered 12 consecutive quarters of growth, 12 consecutive quarters of growth, margin expansion, market share expansion and student satisfaction expansion, 12 quarters of consecutive growth. Then I want to talk about the value creation initiatives we have for the next 4 years. And we have 4 value creation initiatives that are based on growth, and one value creation initiative that is based on margin expansion. And finally, my last chapter is how all these things come together in a 4-year plan that we believe is ambitious but realistic, and I'm excited to close with that. So moving on to some financial highlights over the last 3 years, this is for the period '22, '24. Registrations increased by 8%. Revenue increased by 11%. Why is that? Well, it's because the mix is changing, and we're bringing students that have a higher tuition. So consequently, the revenue increased more than the registrations. The average value of per student increased 3% for the same period of time. But look at what happened to the EBITDA margin. The EBITDA margin increased by 740 basis points -- 740 basis points. And we have now been operating at 30% plus EBITDA margins for 3 years. So a question you might be asking yourselves is, okay, what happened to the EBITDA? Why did it increase so much? And this was very intentional, and it was achieved through proactive strategic and tactical initiatives that we've done. We've improved processes. We continue implementing our digital transformation efforts. We rationalized resources, and we have been optimizing our marketing investments, and our CMO is here today, and we've been doing a fantastic job of doing more for less on the marketing front. All of this allowed to scale our model to produce 30% EBITDA margins for 3 years -- for 3 consecutive years now. In other words, I believe that these margins are not only sustainable, but we believe they can be improved over time, and I'm going to present that when we get to the 4-year plan. Now on the revenue side, why -- what triggered the 11% growth? A few things. The new student retention has improved by 270 basis points. This is the result of a lot of initiatives, and we can talk about that more in the Q&A if that's of interest to you. But we have a lot of smart, experienced people inside APUS working on improving our retention levels and working with students. That retention -- those initiatives also triggered a higher course consumption. Angie explained that our students consume course per course every month they start. And we have increased our course consumption, meaning how many courses a student consumes per year, 11%. But also on the student satisfaction side, we start measuring NPS in 2023, the Net Promoter Score. And our Net Promoter Score is 65. The industry average is 32. For those of you familiar with Net Promoter Score, a Net Promoter Score of 65 is considered excellent in the scale of Net Promoter Scores, right? So we're very happy with this. Our growth for the period, our primary audiences has been 10% with Active duty and for veterans has been 18% for that audience. But what is most interesting, I believe, the most interesting thing about this slide that I'd like for you to keep in mind, if possible, is that we are proving that operational excellence, growth, margin expansion and high student satisfaction can coexist. And I would argue that not only they can coexist, but they need to coexist because if one of them fails and everything else fails. But we've increased revenue, we've increased retention. We've increased course consumption. We increased EBITDA, we increased market share. And our students are as happy as they've ever been measured by the Net Promoter Score, and we have almost 200,000 surveys done over the last 2 years. So we're excited to continue delivering exactly that. So now as Angie said, I'm a growth-minded executive. I like growth, but I like profitable growth. And something that I'm very excited about is that we have 4 levers where we have high confidence that we can execute on them to continue delivering profitable growth and creating shareholder value in the near future. And we can continue to scale our model and produce more growth and sustain the high margins that we've been operating with the last -- over the last 3 years. So there's 4 value creation -- 4 plus 1 value creation is 4 on the revenue side and 1 on the cost side. The first one is to continue maximizing market share and penetration in the military, and I'm going to talk about -- more about each one of them momentarily. The second one is to continue expanding with veterans and extended families. It seems logical. The third one is through new program expansion, something I'm very excited about. And the fourth one is through global expansion in English and in Spanish, and this one is actually really exciting as well, and I'm going to talk about that in a second. But also, while these 4 levers are focused on growth, the last one at the bottom is focused on scale and cost efficiency. And the idea is that we will continue to accelerate our digital transformation and AI implementation. And I will elaborate more on this momentarily as well. So let me start with the growth in the military. As I said, we have a military outreach team. This team is fantastic. They're out there every day talking to the installations, talking to potential leads, talking to the education service officers. And we want to continue expanding this team, getting more geographic coverage, getting more penetration and building trust. This is a team that builds trust, and it's very unique in our industry. Second, we want to continue creating content that is highly relevant for the military market. As I said in the beginning, the warfare strategy, the future of warfare is changing. So we want to continue creating programs that are going to satisfy those needs. And this is something that only APUS is doing, for example, creating concentration in drones and manned vehicles, modern warfare, things like that, that it's very hard for other schools to build. For example, APUS had a homeland security degree before 9/11. I think we were the only school that had such a degree before 9/11. Third, we want to unlock the potential of almost 1 million followers on social media. As a fun fact, our social media follower base was 300,000 in 2022. Over the last 3 years, we multiplied by 3, a bit more than 3 actually. We're close to 1 million now. We have 1 million followers on all the social media channels. And we believe that this is a channel that has been underutilized from a marketing perspective in terms of lead gen. So we work with the marketing teams to continue generating interest and low-cost leads and low-cost acquisition. And also, we will continue our marketing and optimization efforts that we've been doing very successfully with our marketing team. And the idea is to continue promoting the TA benefits and user expansion. As I said, only 10% of active duty today utilizes TA. So this is a tremendous opportunity, not only for us, but for them, they have this benefit, they should take advantage of it. In terms of growth with veterans and families, we want to continue communicating the message that we have this benefit. The extended families benefit is something unique to APUS. We want to continue communicating it. And we want to use our outreach team that is out there to promote this message in face-to-face interactions with the service members. And we want to maximize our student alumni network. So think about it, we have 90,000 students, 160,000 graduates. That's almost 300,000 people that we can simply communicate your family has this benefit as well. It's a very low-cost initiative that is promoting this benefit to all of them and the families can take advantage of a low tuition that most likely they will not find anywhere else. And finally, with our marketing team, we're doing some exciting things. Karmela can talk about that later. But we are working, for example, with large language models and podcasts to find ways of creating additional demand creation and maximizing decision-making process. We were one of the pioneers in APUS to enter podcast as a marketing channel end of last year. We selected a few podcasts that made sense for our audience. And just this year, in Q1 and Q2, 10% of all new students were originated by the podcast channel. We were one of the pioneers doing that in education, and it's working really well for us. Now in terms of program expansion, this is very interesting because APUS, Angie mentioned this briefly, we have more than 1,000 courses in our inventory. So if you think about these as LEGO bricks, right? We have 1,000 courses, we have 1,000 bricks that we can customize and build different things. So for us, it's very easy, very fast and very -- and we can do it very efficiently to build new programs, utilizing the courses we have just by adding others, right? So over the next 3 years, we'll be expanding our portfolio significantly in English with 23 high demand or high potential programs. And we'll also be expanding our portfolio in Spanish with 30 translations of existing programs. And I'm going to address that in the next slide. Now I want to take a moment here because I come from a product management background. That's what I did for a long part of my career. In fact, the first time when I came to the U.S. in 2008, I was the Senior Vice President of Product Management and Marketing for the company I was working for. And we've developed at APUS a product management approach to creating new academic programs. So what this means is that we look at things like the market demand, the intensity of competition, the size of the opportunity, the employability outcomes, the unique selling points. We look at these really in a sophisticated way, almost like you look at consumer goods. So when we launch a program in market, we're very, very certain that, that program is going to be successful. At the same time, along the process, we say, you know what, this program does not have the capacity to be successful, so we stop it. So for us, product management is something that we take very seriously, and we approach it in a very sophisticated way, especially considering the education industry that usually is not very sophisticated for that kind of stuff. So the fourth VCI and global expansion. This is a true diversification strategy. And this opportunity leverages one of our biggest strengths, which is our scalable model. It's very easy for us to enter new geographies, new audiences with a very low cost. At the same time, we believe that we have a unique strength inside APUS, which is our management team, myself, Karmela, Eddie, many others in the management team, we have more than 40 years of experience working in international markets and successful delivering growth, profitable growth and market share gains. So I can tell you from my experience with Latin America, I tried for many years to find an American partner that was able to deliver education with the price point that was needed for that industry. And unfortunately, unfortunately, I never found a partner that was willing to adjust the price to serve those audiences. However, we don't have to adjust anything. Our price is already there. Our price is already competitive. So that's the beauty of APUS. Also, we know that the nonmilitary market in the U.S. is highly competitive. But that's not the case when you look outside the United States. In developing countries, online education is growing at 10% to 15% per year steadily, and we believe this will continue to happen over the next 10 years. And the middle class is rapidly expanding. And when the middle class expands, one of the things that expands with it is the demand for higher education. And also, as you know, it's been all over the news. The recent barriers for Visa for immigration is triggering, we believe, a demand for online options that are quality-driven and affordable. So there's a lot of aspirational pull towards American degrees. We believe there's a hidden demand that we can offer, and we are excited about trying to expand into new audiences. As again, as I said, our model allows us to do this for a very -- in a very efficient way and for a very low cost. And finally, the last VCI is focused on cost optimization and margin expansion. And our digital transformation philosophy is actually very simple. We want to do more for less. What this means is that we want to use technology, AI, RPA, process transformation to deliver better student satisfaction, more revenue and lower cost. And me coming from an ad tech background, this is something that gets me really excited, and I know that James is also really excited about it as well. So we have some initiatives on the marketing and enrollment side. I can comment, for example, I mentioned the LLMs. You probably played around with ATLAS, the new browser from OpenAI. So we believe that, that type of search will be the future of how people will consume products. So we are working to being relevant in that space from the very beginning. So if someone asks OpenAI, please tell me a really good and affordable MBA. We want to be sure that our name comes first. So we're seeing these as sort of the new SEO, and we're working with marketing to position ourselves successfully. On the teaching and learning side, we're working with AI for content production, and we're working with AI for faculty scheduling. What we believe will occur is that over time, we'll be able to have a faculty serving more students on average than what they do today. And this will generate lower delivery costs. On the student side, we have a lot of things going on. We have 24/7 student support inside the classroom with virtual tutors, and we have 24/7 self-service platforms. We believe this will generate high retention levels, higher course consumption, higher student satisfaction and also lower costs. So in summary, technology will allow us to do more for less. And this is nothing new for APUS. This is something that we started in 2023. You saw how the EBITDA has been performing. One of the reasons of why the EBITDA has been performing so well is the digital transformation efforts that we started about 3 years ago. As an interesting data point to close this chapter, as an interesting data point, because of our digital transformation work and our process optimization, today, we have less staff at APUS than what we had in 2021. Today, we have less people working at APUS as a staff than what we had in 2021 with a lot more revenue and a lot more EBITDA. So this is an example of the efforts that we've been trying to implement and we will continue to implement. So as I conclude my presentation, I'd like to show how all of this comes together in terms of numbers, which I know are top of mind for you. So as a summary of the impact of our value creation initiatives over the next 4 years, APUS is expected to deliver between $91 million and $106 million in additional revenue. This is an average growth rate between 7% and 8%. And we will continue to see a slight optimization on the EBITDA side, where we expect 8% to 9% EBITDA growth to deliver between $33 million and $38 million of additional EBITDA. And this means that by 2029, we would end the year with an adjusted EBITDA margin of 31%. So as I finish my presentation, it's my last slide, I want to leave with 3 simple but powerful messages. First, our management team over the last 3 years has delivered 12 quarters of consecutive growth, margin expansion, market share expansion, and our students are as happy as they've ever been. Second, we have -- our model allows us to scale into new markets, into new geographies and to expand and enter high potential markets around the world. And we have 4 value creation initiatives that we believe will deliver a lot of value for our shareholders in the next 4 years. And third, we have a plan -- high confidence plan that generates about $100 million of additional revenue and puts us on a path to a 31% EBITDA margin by 2029. So thank you for your time today. Thank you for the opportunity to share the APUS story. We're truly excited to continue creating value for you and to support your investments for many years to come. Thank you.

Pretty exciting stuff at APUS. Thank you very much, Nuno. I'm now honored to introduce Mark Arnold, who is our President of Rasmussen University today and will be overseeing our RU Health Plus division going forward when we are able to complete the combination of institutions. Mark has a really wonderful background that we think is uniquely aligned with where we're headed. He's spent almost his entire career in health care. and he'll tell you a little bit about how he knows a bit about what it is to sit in your chair. He was a consultant. He followed different institutions who provided health care services and then ran 2 different organizations that had bricks-and-mortar based or campus-based delivery operations in the health care space. So he really understands what it means to have to ring out that next dollar profitability out of the campus locations. He joined us in January of '25. So he's just about to lap his first year. And we're so excited to have him here today to bring his expertise. So welcome, Mark Arnold. [Presentation]

Good morning. I think that the video there to kind of tie the legacy theme together. Our theme this year was about helping our students create a legacy of opportunity. We help create that legacy opportunity, help them create their own legacies. And our students really embrace that. You heard it a little bit in the video. As Angie mentioned about the QR codes and the student experiences that you can click on outside of the room here, some of these stories really do bring in tears. And what our students have overcome is really pretty incredible and really something that's worth listening to. Angie gave a little bit of my background. Most of my background has been in health care. And from that background, I felt firsthand the workforce shortages that we're going to talk more about today. During COVID, I was running an outpatient mental health business. trying to expand. We went from 16 to 51 clinics, went from 1 to 4 states in a 2-year period. And my biggest challenge was I couldn't hire enough mental health therapists. I couldn't hire enough nurse practitioners. I have more demand than I had the ability to meet in our communities. And the only thing holding us back from even greater growth was our ability to hire quality health care professionals. Same thing when I helped run one of the largest radiology companies in the country. We grew pretty significantly from 2011 to 2020. I had 122 locations in 22 states. Same challenge. I couldn't hire enough radiology techs in our markets. I couldn't hire nurses in some of our markets where we offered interventional procedures. So these challenges aren't new. These challenges have existed for a long time. And I've lived it on that side of the table and recognize firsthand just how important it is what we do at Rasmussen and Hondros today and the opportunity for us to continue to grow. So I'm going to try to catch us up a little bit because I know we're running a little bit behind. But to give you a little bit of background on Hondros and Rasmussen and kind of where we came from because I think a lot of people don't realize Rasmussen has been around for 125 years. It's our 125th anniversary this year. The organization was founded in 1900 Walter Rasmussen saw a huge need for skilled workers at that point in time. And think back to 1900, women didn't make up a very large portion of the workforce. And in 1900, he saw a chance to create educational opportunities for women that could help fill that upskill women with -- and help them fill that labor shortage. And so Rasmussen was founded in St. Paul, Minnesota as Rasmussen Practical School business in 1900, continued to grow, was HLC accredited in 2001 and in 2005, launched its first nursing program, and I want to come back to that in a minute. Hondros, a lot newer organization, founded in 2007 as Hondros College of Nursing really was acquired by APEI in 2013, but continued to grow and expand first in Ohio, then into Indiana in 2020 and into Michigan in 2022. But what's unique on here, and you'll see this, we're calling this market inflection point, kind of that mid-2000s time period. I was sitting on that side of the table then. I was a Wall Street analyst covering health care service organizations. And if any of you were following the health care space in the 2005 to 2010 time frame, every single investment thesis centered around the aging baby boomers and the expected increase in health care utilization that was going to be a result of the first baby boomers retiring around that 2010, 2011 time. So no coincidence that Rasmussen and Hondros started their nursing programs in that 2005 to 2007 time period. So Andrew introduced RU Health Plus, the name of our new division, combining Rasmussen and Hondros earlier. Why are we doing this? It's pretty simple, to be honest. There's this huge nursing opportunity. We're going to talk a lot about that today, but significant tailwinds behind it. The demand is large. It's growing. And as Angie mentioned, there's a great ROI for students in this field, whether they're in the PN programs, the different RN programs, the ADN and BSN and then the other opportunities to ladder into some of these advanced degrees. And you're seeing scope of practice continue to be expanded for nurses, which creates more opportunities for them to come back and get advanced degrees to advance their careers as well. We're differentiated, both Rasmussen and Hondros, we differentiate at the local level, and we do it through access, and we do it through superior service to our students. You noticed I didn't mention price, a little bit different than Nuno's presentation, but we really do differentiate around access to our programs and superior service to our students. And as Angie mentioned, at Rasmussen, we have an entry point for any student interested in a degree in health care. Now most of our students don't come to us and say, I want to be or get an associate's degree in nursing -- degree or a bachelor's degree or a PN degree. They come to us and say, I want to be a nurse. And we have to work with them to figure out what's the right program for them based on where they are in their life, their skills, their ability to hit certain test scores, et cetera. But we help them find the right program for them. And sometimes that's not even a nursing program. Sometimes it's an allied health program or another health science program. And we talked about our campuses. We'll show that here in a minute. But there's some significant revenue and cost synergies that come about from us combining as well. Hondros doesn't have all of those programs. It can't say it has it's that entry point for all students, but it can in the future. And the combination will allow us to bring those programs from Rasmussen to Hondros and really provide that same opportunity in those markets. And Hondros is in some pretty big metropolitan markets in Ohio, Michigan and Indiana. So -- and then the cost savings opportunities, we've captured some of these efficiencies already, but there'll be more to come as we're able to bring -- come together as an organization, particularly when we're able to bring our systems together under one common system in the future. So this creates additional just operating efficiencies as we go. Angie talked about this demand -- the demand for nursing, but it's worth us highlighting this a little bit more. Over 200,000 annual job openings are expected for the foreseeable future in the nursing space. 50% of the nursing workforce today is over the age of 50. So not only do we have an aging demographic overall that's increasing health care utilization and the demand for health care services, we have a nursing demographic that's aging at an even faster rate. It's going to require even more trained nurses to fill that gap. And almost 40% of nurses, almost 40% expect to leave the field in the next 5 years. That's a crazy number. So it just highlights how big of an opportunity there is for us in the nursing space here, and you're going to hear a lot about that in our growth initiatives. Mentioned our 26 campuses, you can see that footprint here. It really is a jumping off point for growth for us. But I think what also is highlighted on here is just how much room we have to continue to grow, both in our existing states and existing markets, but also all of the white space on here. And we'll talk a little bit about campus expansion later in the presentation. We've talked about our ladder of nursing programs. But this, I think, visually just highlights to you that opportunity that I mentioned that exists where Rasmussen has this full ladder today, but we can bring that full ladder to Hondros markets and Hondros students as well. And one thing to note on here, the top of the ladder, Rasmussen has these programs, but we've been limited in our ability to grow them because we aren't Title IV eligible at this point for the top 2. That's because of the multiple changes of control at Rasmussen over the last 7 years. Those growth restrictions got lifted earlier this year. We have our application into the Department of Education to give us or to grant us that eligibility, which should happen. It would have already probably happened without the government shutdown, but should happen here shortly, and that will allow us to continue to grow those programs at Rasmussen into the future as well. So key takeaways today. I want to tell you a little bit more about who we are and really talk a little bit more about our business because it is a little bit -- can be a little bit confusing. I think it's easy -- it's helpful for you guys to understand the Rasmussen business today, both our campus-based programs as well as our online programs and how these things come together with Hondros as well. We're going to talk a lot about executing on this nursing opportunity. And then a little bit at the end just to kind of bring it all together and how we're going to deliver on our 4-year plan. So jumping in, introducing our RU Health Plus. We are a national leader in first licensure or pre-licensure nursing. We offer that full array of ADN, BSN and PN programs. That's not something that most nursing schools do. Most traditional 4-year institutions offer BSN programs. Most community colleges and technical colleges may offer an ADN or a PN program, maybe both. Most of our for-profit competitors are a little bit more focused on the BSN market, particularly in the RN to BSN world. But we offer both the campus space and the online programs that really meet that full gamut and specifically in the pre-licensure space, we provide that access to that full array of programs. We have about 10,000 nursing students today combined between Rasmussen and Hondros. That number is growing. And we talked a lot about this comprehensive ladder of programs, both the pre-licensure and the post-licensure nursing programs. And then not to be overlooked, but our allied health programs are growing as well. We have over 15 allied health programs today. Some of these we'll talk about are on our campuses, some are online, but this is a growth opportunity for us as well. I mentioned that we differentiate on access and customer service to our students. And that really does go to the core of what we do to make accessing this education both possible and achievable. And at Hondros, we have quarterly starts. At Rasmussen, it's actually twice a quarter. So we have our traditional quarterly starts and then a midterm start that allows students to come on board and jump start their program to accelerate getting that completed. We provide immediate entry into our nursing programs. Traditional -- most traditional 4-year schools have very limited immediate access, direct entry into their programs. Most nursing students have to enroll and then hope that they're able to get into the nursing program after they've enrolled in the school in many traditional 4-year schools. Not the case at Hondros and Rasmussen at RU Health Plus. Today, you get immediate entry into those nursing programs. And then we mentioned that service focus. It starts with our admissions representatives and how they work with the students to get them enrolled, goes to our advisers and our faculty as well. But it's really with that student-centric and service-minded focus that our staff and faculty operate. We're going to introduce to you today kind of the 3 segments of our business, what we're calling our campus health care business. That's the on-ground nursing and allied health programs. Our online health care programs because a significant amount of our online students are in health science programs today. And then our online plus segment, which is all of the non-health care programs, kind of the legacy programs of Rasmussen that are still a significant piece of our business and how they all kind of come together, but we'll spend more time on the next few slides on that. And then one other note, and Nuno talked about this at APUS, but it's true at Rasmussen and specifically today and a bit at Hondros as well, but we have a lot of alliance partnerships and corporate partnerships as well. Over 900 new students annually come to us through those alliance partnerships. It's a great way for us to market our services across organizations. This includes many health care institutions as well. And that includes both employees of those institutions that have come to us for health care degrees, but also for business, human resources, IT degrees as well. I think the last couple -- the last reason as we talk about why we're coming together as RU Health Plus and kind of where we're at today. The last 2 years, we've really created a foundation for future growth. The last couple of years have been returning to growth in enrollment at Rasmussen. We now have 6 straight quarters of year-over-year enrollment growth, and it's accelerating. At Hondros, 23 straight quarters of enrollment growth. We spent a lot of effort and energy on improving our student nursing outcomes and have seen a pretty significant improvement in that across the board. And in 2025, you saw that dramatic improvement in profitability. And really, the last couple of years have been really building this value proposition built around access and service and return on educational investment. So telling you a little bit more about these 3 segments. This just visually allows you to kind of get a sense as to the size of each one of them. So the yellow on the bottom is our campus -- our campuses, our campus-based programs. And combined with the middle blue section, which is our online health business, we have almost 14,000 students in kind of these nursing and allied health programs today. This is average active enrollment for 2025. So it's not our current enrollment, it's our average for the year. We thought it was just easier to show that to you. And as you can see here, it's accelerating. We're seeing growth accelerate in our campuses. We're seeing growth really accelerate in our online health programs and seeing really solid mid-single-digit growth in our online plus the non-health care programs as well. So a little bit more about each one of these segments. Our campus nursing and health programs. We've talked about being that national leader in first licensure nursing, including the ADN, BSN and PN programs. The chart on the right gives you a breakdown of the current mix of our pre-licensure nursing students. So about half are ADN students today, associates degree students pursuing an RN licensure. About 14% BSN pursuing that RN licensure. Now that number is going to grow for a couple of reasons. One, we don't offer BSN today in those Hondros markets. So that's an opportunity. But two, this wasn't really a big focus of Rasmussen going back 5 years ago. So BSN is growing at a pretty fast clip for us at Rasmussen as well. So you'll see further growth of the BSN program, both at Rasmussen, but then specifically at Hondros as well. So this will change a little bit over time, but still a big focus on ADN. And then at Hondros, the PN program is a key driver and the largest piece of their business today. We have these other allied health programs. In particular, I'll call out a few of them, medical assisting. You'd be shocked when you walk into health systems, sometimes they say the bigger need for them -- when you ask them what their biggest need is, many of them start with medical assistance. And the answer -- you ask why. They're looking for ways to deliver services at a lower cost, and it's hard to find medical assistance. Now the problem is they don't pay very well for medical assistance. So part of the reason they have such a difficulty hiring them is the opportunity isn't quite as strong. So we don't view this as the big growth opportunity for us, but it is something that is part of the history of Rasmussen, and we have 10 programs across the country. And these are all starting to grow a little bit more here in the last couple of quarters. So we do still see this as a key part of our program offering in the future. Rad tech, I have a huge history and a large background in this space. huge unmet need. We have 4 programs today. We just actually got approval for our fourth program in the Tampa metro market here just a few weeks ago. But we're expanding our caps in this space and have an opportunity to continue to grow this both in existing campuses, but also bringing this to some additional campuses in some of the larger metropolitan markets. Same thing with surgical tech and then a couple of other programs in physical therapy and medical lab tech as well. Online health, this segment has about 3,100 students today. So these are preparing students for careers in nursing and health care. So you see there on the chart on the right, this is where our fully online post-licensure nursing students sit is in our online health programs. But you can also see here that post-licensure nursing is a relatively small piece of this overall pie today, but an opportunity for us to continue to grow. But a pretty significant health science offering here. And this is growing at double-digit rates this segment. This includes programs in health care administration, medical technology, health, wellness and public health and pharmacy as well. And then finally, our online plus programs. So these are the programs we have in kind of 4 schools today, school of business, education and criminal justice, technology and design. And these are many of the legacy programs that Rasmussen offered in the past on campus going back 25, 30 years ago, but now fully online for quite some time. We have over 5,000 students in this segment. It continues to grow at a mid-single-digit rate. And these -- like many of our programs across all of these segments, they're designed for students to seamlessly advance to that next credential degree, to ladder to that next credential degree. About 13% of our new enrollments are previous graduates seeking additional credentials. Let's talk a little bit more about how these segments fit together because I think that's a key piece. And it is really an advantage. We call it our Rasmussen advantage, but it's also an opportunity for us. Our Rasmussen campuses really drive online growth and vice versa. So here are some statistics that I think help reinforce that. In states with campuses generate 7x to 30x more online leads per capita. In those same states, our conversion rate is 3x what it is in those -- on those leads and what it is in states that we don't have campuses. And interestingly, 40% of all of our online students live within a 30-minute drive of one of our -- so there's this great synergy that's created through the combination of these businesses, and it goes both directions. And it really comes back to brand awareness, our ability to leverage those brand awareness dollars that we spend across a wider array of programs, that reputation that we've built locally in these markets that strengthens who we are and our name recognition in those markets. It shows up in these numbers, which brings down our average acquisition cost for both programs. And this is a great opportunity for us as we take these programs to Hondros markets as well because that doesn't exist today. And it's a great opportunity for us to grow in those Hondros markets, but also as we expand our campus footprint, the online growth can follow that. So how are we going to execute on our nursing opportunity? We're going to spend the good part of the presentation here talking about this, and Dwayne will be up here shortly to comment on some of these pieces. But a couple of items here. So one, we've been restricted in growing new programs and new campuses. And that's going to be a part of our growth story. But a bigger part is just adding more students to our existing campuses. So some of the challenges we had in the past have limited our ability to do that. As I mentioned, the last 2 years have been kind of building that foundation. We're in a really great spot today to add more students and what we're calling fill the back row, but our approach to adding more students to our existing campuses, nursing students specifically. We have this opportunity to cross-pollinate programs from Rasmussen to Hondros, which will help drive growth in particularly those nursing programs and help drive our growth as well. We have the opportunity to add new campuses and enter new markets and also adding new programs, which is something we haven't been able to do for quite some time. And then a bigger opportunity than that is new partnerships. So we'll talk a little bit about our hand-in-hand initiative here in a minute around building health care partnerships. What does that mean? By 2029, gives us a path to $485 million to $505 million of revenue and driving EBITDA margins for the Healthcare division to 18% to 20%. So I mentioned a couple of these already, but these are our 4 health care value creation initiatives. One, fill the back row, which is really around leveraging our existing capacity in campuses, specifically for those nursing and allied health programs. The second is leveraging the ladder. It's taking advantage of that ladder of nursing programs that we have today and how we can really continue to push people up that ladder to provide those opportunities and take advantage of that opportunity, both at the Hondros campuses, but even at our Rasmussen campuses, where I think we can do a better job of executing on this. The hand-in-hand partnerships, these are health care partnerships that we're pursuing and working on, and Dwayne will speak more to that. And then what we're calling our Trailblazer expansion initiative, which is our campus expansion growth, and we'll come back and talk about that as well. So with that, I'd like to introduce Dwayne Bertotto. Dwayne is our Chief Operating Officer at Rasmussen and knows way more about this business than I do. So really happy for him to be up here this year. Thank you.

Good morning. Angie, you referred to me as the old man. So I think you did -- I think it's weather tested as of late. But a little about myself. My name is Dwayne Bertotto. I'm our Chief Operations Officer at Rasmussen University. I've been with the university for quite a while. I've had 19 years of experience in higher education. 18 of those with Rasmussen. For the past 14 years, I've served in an executive leadership role focused on enrollment growth. So retention and our enrollment -- front end of our business and our admissions processes. I did leave Rasmussen a couple of years ago for 4 months, a short stint. I left for an opportunity. I came back with a couple of conversations with Angie and a dinner, which I'm starting to see as a theme to know as well. But I came back to lead these initiatives that I'm going to share with you today. So fill the back row, Mark kind of tees what we're doing with fill the back row. He spoke recently here about the headwinds that we had over the last couple of years at Rasmussen based upon some of those growth restrictions. Our team really weathered through those growth restrictions. And in 2023, when I came back, we created a motto, informal model about returning to excellence. In 2024, we approved our financials by the end of the year. And what that gave us the ability to do is take a more proactive approach in 2025 to our operations and start creating strong plans that are going to give us strong organic growth. So I want to start a little bit with a visual. There are a couple of markets that we operate in today. Major markets where most of our campuses are at. Those are cities that can host up to about 2 campuses, very large cities. That's where a significant amount of our population resides. We have 2 super school clusters in Minneapolis and Chicagoland. In the future, we may have more, but these are metropolitan areas that we feel like they have 3 or more campuses. And then we have a number of schools that are in smaller markets. These are cities that will support one campus. The green on the chart represents our current enrollment as of Q4 2025. The blue represents the capacity that we have available to us in our physical campuses. This is estimated based upon square footage, parking, a number of different things that come into play. Today, we believe that we are utilizing somewhere around 2/3 of the capacity at our campuses. Our goal by 2029 is to be able to move that towards 90% or an additional 5,900 students where we sit today. So how are we going to do that, is that we have 2 areas that we're focused on and fill the back row. The first is about a cross-pollination of existing programs that we have today that will be entered going into existing campuses. The second one is focusing on enrollment caps that we have in a couple of our programs. So in 2025, we started early last year identifying and doing the work behind the scenes to be able to expand these 4 programs, our BSN, and ADN program, a PN program and our rad tech program into 7 campuses. We've made really good progress on that. And as of 3 weeks ago, we had approval for our first BSN expansion and our rad tech expansion at one of our campuses. And we've activated and we actually started enrolling in those campuses. So we'll have students that will be starting in January at those 2 campuses and those programs. The second is -- this cap expansion. So we have a few nursing programs that do have caps that are placed on them by state regulations, boards of nursing. We also have our premium allied health programs that most of those have caps that are brought on by the accreditor. Once we start hitting those caps and we can show that there's a market need for those programs, we can show that we have clinical access, we can show we can get faculty in those programs. We're in a position where we're able to ask to increase those caps. This has been something that, I would say, over the last 3 or 4 years has been a bit stagnant. In 2025, we've made some really, really good progress. We've already accomplished a few of our goals on these caps. And in 2026, we're looking at expansion of our ADN program in 2 campuses, caps and then the caps in our rad tech program at 2 additional. Outside of that, in 2029, we've identified a great deal of expansion opportunities, again, of existing programs and existing campuses. This is a lot -- is very heavy Hondros as we come together as RU Health Plus being able to expand the BSN programs and some of these premium allied health programs in rad tech and surg tech. But as you can see, there's a large amount of opportunity for expansion in the footprints that we live in today. The second component to filling the back row is about my team and my team executing at the highest level. And 2025 has really allowed us to be able to start looking at what we're doing. The last 2 years, I'll admit, it's been -- we were grabbing growth where we could grab growth. And that put us in a position that we can do what we're doing today. And now we're taking a more surgical approach. So when we identify with our teams what keeps us at a campus from growing and filling that back row, these are the 5 things that we came up with. We need clinical opportunities. We need faculty staffing, inquiry generation, our admissions operations, which includes staffing and conversion and then, of course, student success and retention, so we can retain those students. So what we did is that we created a rubric for each one of our campuses to look at these 5 areas, and we've gauged each one of these campuses to allow us to know where their weak spot is or their strengths. So this is just an illustration of a sample that I put together. And what we can see here is that we have a campus that has strong inquiry generation, but we are not in a good spot when it comes to clinical health or our clinical opportunities. So the plan that we're putting forth for this campus is going to focus heavily on acquiring more clinical sites and strengthening those relationships. These initiatives are going to be owned by our 3 Vice Presidents in each one of our regions and our campus executive directors. The way I look at it is kind of fine-tuning a golf swing, looking at specifically what's going on, making those adjustments so that we can get better overall. So this is in play now. This rubric has been created and our campuses are currently working with our Vice Presidents on making these execution plans for early 2026. So what does this mean? The importance of this work is really based upon incremental enrollments inside of the university. We're at a point now where as we bring in additional enrollments that we see strong flow-through to the bottom line. So this is an example of -- for every 100 students that we're bringing in can create $2 million in additional revenue. If we have an expected flow-through margin of 50%, we're going to be creating $1 million dropping to the bottom line. How do we get to that? So our revenue model is such that our nursing tuition equates to about $20,000 annually for a student. The program length is about 18 to 24 months. When we leverage our fixed costs, which our occupancy, our campus management teams, central operations and then APEI shared services, we see strong impact to our bottom line. The second initiative that we've talked about, and you've seen this slide is our ladder. So I want to point out a couple of things on this. First of all, it was mentioned earlier about 13% of our students that start with us each term have earned a degree earlier or before, and they're coming back for additional learning. We think there's a great opportunity to increase that. This last year, we launched our alumni Association, which Rasmussen has not had. In the video, you probably saw one of our graduate speakers with an alumni pin on. We feel like this is an opportunity for us to tap into. Mark and I have attended multiple different alumni events over the last year in Chicago. We met a woman there that she's earned 3 degrees from Rasmussen up to her master's degree in education. And I think her quote was if there was another one, she would come back and get that one as well. So we're trying to tap into that portion of it. The other thing I want to point out is our ADN population. A slide earlier showed the pie chart about the heavy amount of students that we have in our ADN program. It sits at the bottom of this ladder. It is an entry point that has a lot of learning above it. So tapping into those ADN graduates to come back for a BSN degree masters or becoming a practicing nurse in the future in some capacity is a major opportunity for us. And then I think it's a really good visual to look at what is going to be the future with Hondros. Today, they offer these 2 programs. We're excited to be able to move into the BSN world and give access to our online nursing suite postgraduate to Hondros, and we feel like we'll have a lot of growth from that. Finally, before I pass this back to Mark, I want to talk about hand-in-hand. And what hand-in-hand is what we're -- our relationship building inside of our communities with large health systems. We're -- the current model we have found when speaking with these health systems, it's broken. It's not producing strong outcomes for students, and it's not producing strong outcomes for these hospital systems that are really plagued by staffing shortages. The traditional model, very transactional. So they would get -- host students that would come off for clinicals. They would get low stickiness. We met with a hospital system last week. They talked even about a student not knowing there was job opportunities, a clinical student, not knowing there was job opportunities inside of the hospital, just a lack of communication when it comes to recruiting. These nurses are entering the job force, and they've learned in a very generic way, and they're not job-ready because most of our hospital systems and partners have specific skills they want to see from those students. And then finally, it's -- there's a lot of cost for students in the nursing school, but it's costing these hospital systems a tremendous amount as well as they're using agencies to staff and lots of bonuses to capture nurses. So what our vision is, and I apologize, I won't behind. What our vision is, is a new connected model, a significant opportunity to create a better financial model that have students that are more clinically ready when they go into these hospital systems. We're flipping the script is what we're calling it. And what it looks like is a student that begins their education with us has the opportunity to enter into some sort of a program or relationship with one of our partners. And they start learning the partner way. So an example for this is when we met last week is an Alaris pump is a pump that administers medication through IVs. They have specific rules and safeguards that this organization wants us to take and utilize in our skills labs and our simulation labs. So these are the types of things when they get that nurse back into the hospital system, they've already learned the way that, that hospital system has done it. So they're learning the partner way. They graduate and they're onboarded and they jump start more quickly. It reduces the orientation period for that student attracting them. At the end of the day, we still have this opportunity on the ladder. So when students want to come back to us, they know us, they're comfortable with us, and they can come back through that partnership and be able to pursue higher degrees. So what's the value for the partner? Our partners will have students that will have that customized experience. They learn that way. There's familiarity because of a lot of the clinical instruction that happens is actually being instructed by employees of that hospital that are in adjunct roles with Rasmussen. So it creates familiarity and culture, which, in turn, ends up decreasing overall attrition of nurses and turnover. It creates a preferred hiring pipeline that's very, very consistent and predictable. For our students then, they get this opportunity to say, I know where my clinicals are going to be for the next 3 to 4 quarters. It helps them plan. Again, many of our students working adults, they have families at home. So this is a big value add to them. They have that employment secured prior to graduation. They have apprenticeship opportunities. And then there's employee tuition support that normally comes along with these hospital systems to help them afford their degree. Overall, to Rasmussen, it means that we have access to their employee base, which is important to us. And then there's co-branding activities available to us. So when we're working on helping solve this nursing shortage in a certain city or a town, we have the ability to partner with them and just grow the nursing piece overall. So I'm going to pass this back to Mark to talk about our new campus expansion.

Thanks, Dwayne. I'm glad he's better at executing operationally than he is on improving his golf swing. Our Trailblazer expansion, this is our campus expansion program, and I'll go through this pretty quick. But we are in a position now where we can actually focus on growing and building new campuses. And we've been working on this for a while. Our plan is going to be measured. We're going to do this in a strategic and achievable way where we don't overextend ourselves. So our target is to add 2 new campuses a year starting in 2026. It takes about 18 to 24 months to develop a new campus and go through the regulatory process in the state through the regulatory process with our accreditors and the Department of Education. So that's the typical time line. So if we're opening 2 in 2026, you can imagine we've been working on this really throughout 2025. Capital requirements. We expect a new campus to be about a $3.5 million capital investment to be funded from our operating cash flow, although we do have that balance sheet to provide us the flexibility to spend more if we need to and expected returns. We expect to be cash flow breakeven in about 18 months, full capacity in, call it, 48 to 60 months. Revenue at scale of these new campuses is about $12 million. And if we hit those numbers, our EBITDA margin should be somewhere around 35%. So generate a really strong IRR if we're able to accomplish that, and we believe these are achievable numbers. So finally, kind of how do we evaluate markets. We're not going to get into specifics and tell you which markets we're going to go into for competitive reasons. But these are really the key drivers, the things that we're looking at to make those decisions. The size of that market, the total addressable market of potential nursing students in that area, presence of competitors in that marketplace. Most of our competition is local in our campuses, and that is a combination depending on where we are in the country, typically of community colleges and technical schools, some local nursing schools, for your institutions and in some cases, some national for-profit competitors. We're looking at employment demand in those markets because it's not the same everywhere. Probably one of the biggest ones, our ability to find faculty, nursing faculty. This is a challenge anywhere you go, we need to be proactive on it, but it's something we look at when we're looking at new campus locations. The regulatory landscape is a big one. There are certain states where you will not see us. And -- but every state is different. And so you need to understand that and factor that into our analysis of new markets. And then not to be overlooked the availability of clinical partners. We have to have those clinical partners to allow our students to have the clinical experiences that are part of and a key part of their nursing program. So we factor -- all 6 of these things together to really identify the right type of market for us. And there's a few other ones that are center around operational -- our ability to operationally execute that could factor in as well. But we're really excited about the ability to add new campuses here going forward. So finally, delivering this 4-year plan, I'm going to give you a quick high-level overview. I'm going to note right away, the boxes in the middle are not to scale. That's intentional. But we're showing some pretty significant growth here at RU Health Plus. So going from kind of the midpoint of our guidance today, revenue of around $320 million this year to projected revenue in 2029 of $485 million to $505 million. So this is 11% to 12% compound annual growth rate on revenue. The 3 boxes in the middle represent kind of those value creation initiatives that we talked about. While they're not to scale, you can guess that the biggest one is going to be taking advantage of our existing operations, filling that back row, filling up some of our unused capacity, bringing programs to Hondros markets. Those are bigger opportunities in the short term. But going forward, as we add new programs and new campuses, it's going to contribute to our growth a little bit here in this 4-year time window, but really help make sure that we have the ability to continue to grow beyond it. And then on the EBITDA side, similarly here, the midpoint of our guidance this year, we saw a nice return to profitability at Rasmussen this year, $14 million of adjusted EBITDA is our projection, but growing pretty dramatically here. And this just highlights the assets we have in place today and our ability to leverage that with a pretty strong flow-through margin that gets us to EBITDA of $85 million to $100 million by 2029. So thank you for your time today. I'm going to turn it back over to Angie.

Okay. We're going to do a quick break, 10 minutes. And Ed and I are going to work hard to get us back on track so we can give you plenty of time for Q&A. I do want to point out some esteemed guests. We have our Chairman of our Board, Daniel Pianko, who is in the back room. So if anyone wants to pop in and say hello to him, he'll be at the break. And I also want to -- I think he may have left -- there you are. James Kenigsberg, one of our esteemed Board members who has our great good fortune, stepped into a leadership role at APEI, leading our technology innovation organization, and we couldn't be more excited about James, and you'll get to meet him at the panel, along with we've got some other folks in our panel that I'll introduce afterwards. But 10 minutes. We'll be back in this room. A quick overview on how Ed will bring this all together for us, and then we're off to the races on our panel discussion. So thank you very much. We'll see you in 10. [Break]

Okay, everyone. If I could ask to have you take your seats. We're going to try and get ourselves back on schedule so we can have a very robust panel discussion. So next up, I'd like to introduce APEI's newest team member, Ed Codispoti. He seems to have a lot of connections in this room. And so I hope by your showing up today here, it says that we made a good choice, and I know that we did. I'm thrilled to have Ed join our team. He is an experienced public company CFO. The bonus for us was that he actually spent several years in higher education actually with Nuno at Illumina. So the 2 of them know each other. In fact, Nuno turned us on to Ed. So we're very grateful for that introduction. And so we've got a team of folks that already know how to work together, but more importantly, that Ed brings familiarity with the higher education space as well. And I'll turn it over to Ed, and he'll give you a little bit of overview on his background. No video this time, though. This is the boring finance guy. So no video.

Thank you, everyone. Good morning. Like Angie said, a lot of familiar faces here, which is great. So I've only been here a month, if you can believe that. In that short month, earnings release, preparing for Investor Day and many, many other things. So it's been a little bit of a blur, but very grateful and excited to be here. Rick Sunderland is also here, who was APEI's CFO for the last 12 years and just very grateful to Rick in helping me transition. It's a heavy lift, and he's been so, so helpful. So thank you, Rick. A little bit about me. I have over 25 years of financial leadership experience, mostly in public companies, more recently at a company called NV5 Global, which is an engineering and technology firm. Very acquisitive company. We did about -- over the course of 6 years, while I was there, we did about 45 acquisitions and grew significantly, grew that top line significantly. Before that, as Angie said, I was at Illumina with Nuno and others. And at Illumina, I just fell in love with the higher education industry. I realize that the financial decisions that are made can really impact students and affect lives. And so just a wonderful industry that I enjoy very much. And so when Angie reached out and we sat down and talked about the role, it just made so much sense for me, right? Because APEI, I know from researching leading into that meeting that they've been growing the top line significantly, expanding margins, cash flows and to combine that with what I was looking for was just a great fit. And so grateful to be here with existing investors and analysts. It's a great opportunity given that I've been here such a short period of time to meet you, and I'm sure there's some prospective investors here in the room or also listening that I can meet as well. So great morning so far. You've heard from our team members. You've heard details behind each of the business units of how we're going to drive growth. This is a good kind of segue into what does that mean on a consolidated basis. When you pull that all together, how does it look? And so what is our growth story? And before I get into the numbers on this slide, if you heard our Q3 release, you know that we grew 7% overall. And if you back out the impact of the July 25 sale of a graduate school, that was actually a 12% growth. What this slide is showing is enrollment and revenue for the enrollment, it's September '25 to September of '24. And the revenue is a TTM period through September '25 to '24. So as you can see, APUS grew 8% in enrollment and 5% growth. That was really just by gaining market share, as Nuno was alluding to earlier. Rasmussen grew 10% enrollment and 12% revenue, addressing all the initiatives that Mark spoke about, primarily filling the back row and taking advantage of that capacity. And Hondros College of Nursing grew 18% enrollment and 14%, primarily through new campuses that were added in prior periods and the benefits of that. So that results in a 7% growth. If you back out graduate school, that's equivalent to about a 9% growth. In this next slide, you can see our trend -- our growth trend over a longer period of time, starting with 2022. When you look at it on an annual basis and then TTM for the last period, it's about a 3% CAGR. We started with $606 million and then running up to $655 million. And the margin expanded 410 basis points over that time period. But the bigger story is in the bottom chart, which looks at our growth on a trailing 12-month basis for each of the periods. And that's where you see the acceleration. We started with a 2% increase from '23 to '24 and then a 7% increase in the most recent period. And the margins in this case, expanded 530 basis points. Here, you can see that our balance sheet is extremely strong and stable. We have about $191.3 million in unrestricted cash. Debt, $96.4 million has been relatively stable. It's been at that level for the last 2 years. Prior to that, another $3 million higher, but relatively stable. With that stability, you have the backdrop of EBITDA increasing. And so our leverage has gone from 1.7x in 2022 to 1.1x currently. That's a gross leverage, right, because we have more unrestricted cash than we have debt. So in reality, our excess cash is $94.9 million. And there are several points here that are very worth highlighting because they're recent and they've even -- they've really stabilized and strengthened that balance sheet even more. The first is that in the second quarter of this year, we redeemed our preferred equity, which is going to save us $6 million of annual cash outlay going forward. The other point I want to make is that when we sold Graduate School USA, we eliminated a $28 million liability from the balance sheet, which saves us $4 million annually on a pretax basis. And then finally, we released $24.5 million of collateral for letters of credit that was previously held as restricted cash. So all of those things have strengthened our balance sheet. Let's take a look at cash flow now. On a free cash flow basis. Look at this graph. We started with $13.4 million for the TTM period in 2023. That grew 64% to the following period, TTM '24, and then 173% to get us to $60 million of free cash flow in the 2025 TTM period. That represents about a 10% free cash flow yield. So strong balance sheet, and we're generating free cash flow. So we've talked about our past performance, the revenue growth, the margin expansion, the cash flow yield, what does that look like in the future? Angie touched on this earlier today, but it's worth bringing up again since we're pulling all the numbers together. You can see that the revenue targets have been laid out for 2029. Our targeted organic revenue is between $890 million and $925 million. And with tuck-in acquisitions and other strategic investments, we aim to achieve a revenue of $1 billion by 2029. This would represent a CAGR of between 9% and 12%, not necessarily linear because we're investing in new campuses along the way and all of that. So a bit of a compounding effect. But nonetheless, a target that we're very focused on. On an adjusted EBITDA basis, we're targeting a CAGR of between 24% and 27% over the next 4 years, which would represent adjusted EBITDA of between -- on the low end, $182 million and on the high end, $200 million. So basically getting us close to that 20% EBITDA margin. Now let's talk about capital allocation. We, as a company, have a very disciplined and balanced approach. And of course, we have many different options in terms of our capital allocation to invest in. And we evaluate the rate of return of each of those opportunities so that we can maximize the return to shareholders. We estimate that over the next 4 years, what this $300 million to $400 million represents is we have our 5-year model. We've built in assumptions for CapEx, for example. So our CapEx is relatively light. We're a CapEx-light business. We, on a regular maintenance run rate, might spend between $18 million and $22 million of CapEx. Our new campuses that we've discussed earlier would cost about $3.5 million per campus, where we've factored in 2 of those campuses per year. The $300 million to $400 million left over is after all of that has been factored in. And so we would deploy that into a number of different ways. One would be to fund the business. And when I say fund the business, those would be things like intelligent systems, campus modernization. The next category would be growth initiatives. So again, new campuses like we just spoke about and program expansion, and those new campuses would be anything above and beyond those that we've spoken about already. And tuck-in acquisitions, we would be opportunistic. Why would we invest in a tuck-in acquisition? It could be geographic in nature, right, to take advantage of geographies where we don't have a presence where there's a demand for our programs or it could be a state that's highly regulated, and it's an easier way to enter that market. But when it's all said and done, we're going to continue to evaluate those investments based on the rates of return. And it's possible that at some point, we would return money to shareholders through a buyback. So pulling it all together, again, summarizing as we wrap up the financial section, we're targeting an organic revenue growth of 9% to 12%, and we're focused on a target of $1 billion if you include those strategic investments that we just mentioned and EBITDA margins of 20% to 21% when we get out to that 2029 period. We believe we're well positioned for continued future growth, and we're very excited about the next 4 years. I know I am, as we look towards executing these initiatives. So thank you very much for your time. Again, very excited to be here and excited about the prospects for the next 4 years. I'll turn it back over to Angie.

Okay. That was the punch line right there. I'm just going to try and pull it all together in just a couple of minutes. In the meantime, we should probably start mobilizing for the panel. So we'll ask our panelists to come up, and they're going to be redoing the stage real quick. First up, what is APUS going to do in the next 4 years? We have to continue to maximize that 10% of students today use TA. What a wonderful opportunity to get more students to take tuition assistance and to gain share from the 70% of folks who are already using TA today who actually don't take their classes from APUS. So tremendous room to grow with our active duty military. The growth in veterans and military families is enormous. You saw that the markets are huge. Our slice of the pie is very small. And the newly discovered USAA strategy around wrapping our tuition benefits around those military families has yielded some near-term incredible growth numbers from that new segment called military families. Nuno talked about 23 degree programs that he's adding in English and many of them oriented around supporting that strengthening of the armed services and the military force, which is a significant differentiator for us. And at the same time, converting 30 programs to Spanish so that we can enter Spanish-speaking markets, but also offer Spanish programs to our colleagues here in the United States. And then obviously, the final part is to use AI because as we know, with a very steady growth business that APUS represents, being able to ring out profitability through technology optimization in the areas he discussed is critically important. And so that AI enablement of our tech platform will be a big driver of profitability at APUS. Now let's talk about RU Health Plus, fill the back row. I had a chance to talk with a lot of you folks during the break, and it is a big deal. And you saw those numbers, you did the math. It's a big part of our next 4 years, along with leveraging the latter. We also know that these partnerships, which Dwayne spent a minute talking about, I'm pretty excited about because today, as you think about it, we sell in eaches. We have to recruit one student at a time. We have to spend marketing dollars for each one. And when we create these partnerships with health systems, now we're saying, we'll do a whole cohort for you. We'll do 25, 30, 40, 48 students for you with a customized experience around the systems that they use, the methods, the quality, et cetera. And so those partnerships are really a great opportunity for us to not be selling in eaches anymore, but being able to sell in bundles. And then finally, the Trailblazer expansion, which we all know is a wonderful opportunity, both in the states we already operate as well as in new states is a great way for us to build scale, which, as you saw from Hondros, 23 consecutive quarters of year-over-year revenue growth, Hondros has opened 4 campuses during that period of time. Rasmussen has been under growth restrictions for 5 years and has not been able to open a single campus. There is a correlation between the growth at Hondros and their new campuses and the slower growth that has happened at Rasmussen because of their -- the limits on their ability to open campuses. But we are here to say that fill the back row is a really big deal, and we are going to work really hard to maximize the throughput of each of the Ras and Hondros campuses. So Ed went through these numbers. I just want to bring to your attention that a $900 million revenue business in 2029 with a 20% EBITDA margin and $300 million to $400 million worth of cash generated not already used for normal CapEx deployment is a really exciting story, and we're so happy to have been able to share it with you today. So with that, we're going to bring up our panelists. I'd like to introduce some folks that you haven't yet had the opportunity to meet today. Rick Sunderland, we're so honored to have him still here helping us. He's helping make sure we have a very smooth transition. We couldn't be more grateful, Rick, for your 12 years of service. I call him my wingman. It's hard to not have him right here next to me. So I get a little weepy about that. So we're just thrilled to have him here today. Karmela Gaffney, who's our Chief Marketing Officer, Nuno gave her a shout out. She has a tremendous background, not just in the LatAm markets, but in higher education, and we couldn't be more grateful for her to be here today and be able to answer any questions you might have around marketing. And then Gary Janson, many of you have had the opportunity to meet him. Over the last several months and years. Gary is our Head of Strategy and Growth, and he really is the guy who peeks around the corner for us every single day and helps make sure we're taking advantage of that next best opportunity and that we're dodging that little pothole that might be coming our way. So in addition to those 3 who are coming up, I introduced James Kenigsberg before. Again, James was the co-founder of 2U and the Chief Technology Officer there. So his expertise in higher education, seeing and operating businesses that supported, I don't know, 40 institutions, along with the fact that he is just a modern technologist by heart, by mind, and he is in the flow of everything that's going on in technology today, has a team of people that follow him everywhere that we are now the beneficial recipients of. We just could not be more grateful for James stepping away from our Board and stepping into helping us strengthen our technology organization at APEI. So with that, everyone come up. We're going to get rid of this podium, and we're going to be here to answer all your questions. So we're switching mics.

Eric, he's got it. He's right in there. Number one. All right, over to you. Introduce yourself.

I am Eric Martinuzzi. I'm with Lake Street Capital Markets. I appreciate all the detail. It's really great to dive in deep on the story. One of the things, Angie, that we talked a little bit about -- you talked about the strategic investments, and I know that M&A is something that is an option, obviously, on the Rasmussen side or on the RU Health Plus side, we had the Hondros was 2013 and Rasmussen was 2021. Where is -- is this kind of a, hey, if something walked in the door, we take a look at it? Or is there an active M&A strategy on the RU Health Plus?

Great question. So we are looking, but we are not pursuing, all right? We want to make sure we understand where the opportunities are. But as you can see, we can build a $900 million business with $180 million to $200 million of EBITDA and do it by just doing a great job doing what we do every day. And so if something were to come our way and it made strategic sense, we would take a look. We have our ear to the market to make sure we don't miss any of those opportunities, but it's not something that we're here to say today, we're about to announce an acquisition coming up in 2026. Anybody questions?

Jasper Bibb with Truist Securities. I think going back to maybe it was like a 10% target enrollment CAGR for Rasmussen. Could you maybe piece out for us how much of that is like maybe same-store isn't the right way to say it, but enrollments at existing campuses versus new campuses or program expansions? Because I think going back to one of those slides, you had maybe it was 60% utilization. So it seems like you have a lot of capacity to grow in all those aspects. I was just hoping you could piece out the assumptions for us.

Thanks, Jasper.

I'll break it out a little bit. You can expect that a good chunk is coming from the existing campuses. We have capacity at all of our campuses today. So some have more than others, but we have capacity across all of our campuses. So that's a key point of our growth that you're seeing in there. The new campuses, we showed you the time line to build. We're planning to open 2 a year starting next year and the breakeven point on those campuses. So just based on those assumptions, they're going to contribute more to growth in the future on the end of that investment period and even into beyond the 2029 investment period or the strategic plan period. So most of that growth is going to come from our existing campuses, whether it be from just pure organic growth or from program expansion.

And if I could add, Jasper, because certainly, we've got a lot of folks, including Mark with expertise around how you bring out profitability in these physical footprints. So the capacity that we estimated is standard and customary operating procedures, right? It's not adding nights and weekends programs. It's not reconfiguring the way in which curriculum is taught either on the campus or changing the mix of how the education is taught to perhaps move some of the more didactic courses online. So that's just the assumption of operating the way we operate today. So we believe those 2 horizons are also in front of us to be able to bring out even more profitability out of those campuses. Great. Next question.

Matt Filek, William Blair. Thank you for having us and really appreciate all the detail today. On the nursing side of the business, I believe when you acquired Rasmussen, the margins were in the 13% to 14% range and the longer-term margin guidance for nursing is now near 20%. So I was just wondering if you could maybe give us a little more detail on the biggest drivers to getting that margin expansion? And then do you kind of see 20% as where margins top out just given the in-person component for nursing compared to something like APUS that's fully online?

Yes. So I think you've seen this year, the flow-through margins of our existing campuses. And when you think about the vast majority of Mark was talking about our growth is going to be coming from our existing footprint. We feel pretty confident that those margins will continue to contribute that 20% when we modeled it out. So in fact, the campus, new campuses are probably going to depress those margins a little bit, but the flow-through is really strong, and we see that continuing. There will be some more investment to make sure we hit the top line growth, which is really important to hit those margins. So the 70% we saw this year is probably a little aggressive compared to what we'll see in the out years.

I guess the only thing I'd add is there's a reason we're focusing on filling the back row. And I think -- I wasn't here at the time of the acquisition. A lot of us weren't here at that point in time. But we're really confident in what we have in the plan. And if we just execute on it, we think those margins are very achievable.

Raj is next?

I'm Raj Sharma, Texas Capital, and I'm an analyst and cover APEI for several years. Thank you for doing this. This is fantastic. It's been a long time coming. And really seeing you guys all guys and gals all up there and understanding the business units has been fantastic. I have 2 questions. One on -- can you talk a little bit about the employment side on graduation, the placement and any relationships you've built, obviously, on the Rasmussen and Hondros side, any relationships you've built with the employers, the hospitals, sort of the emphasis on that?

Dwayne, do you want to take that?

Great question. So we have a career service department that works closely with our students. I would tell you on the nursing and the allied health side, it's -- those services are there. I would say they're less necessary than some of the other programs that we're offering. Many of our students upon graduation are already taking offers from hospital systems and clinical systems. So it's very, very aggressive. We have a lot of our partnerships that are attending things like our pinning ceremonies as nursing are graduating, and we're bringing them into orientation early on. So what we're seeing now in these partnerships is how do I get earlier access to those students because if I wait until graduation, I waited too long to get them.

And I'll just add. So at APUS, vast majority of the students are working adults, right? So they're not looking for employment. They're looking for promotion or continuing in their existing positions if they're in the military. Then at Hondros, we actually have reported placement rates. We have to hit a 70% benchmark at our locations. And as Dwayne said, it's the same thing there. We actually have to track that, track their wages at Hondros, but it's very similar. There are plenty of jobs available in nursing careers in the markets...

Can I have one more follow-up. So I saw on the M&A -- on the capital allocation slide, you were going to spend money on general business and then M&A options. But share buybacks seem to be low on the total pole. Is there...

Well, let me tackle that one, right? So we still have -- today, we have a $26 million share buyback that's available for use. And that comes from 2 different places, but it's available today. We don't need any authorization from the Board. As you can see, our goal is really to have a disciplined process for how we use cash and capital. And we want to make sure that, that dollar we spend is going to create the best ROI. So I can tell you that share buybacks are a frequent conversation and certainly not something that is off the table. We want to just balance that in conjunction with all of the other choices that we're making around the ways in which we can scale and grow the business. But we do have that authorization already available for $26 million of share buyback. Tom?

Tom White, D.A. Davidson. Two quickies, if I could. One, extended family opportunity at APUS, it seems like there's a lot of growth there. Maybe just talk about how penetrated you are and where that could reasonably get to and maybe whether you have to sort of maybe adjust or evolve your offering in the coming?

Yes. So well, thank you for the question. The extended family initiative started in Q3 of 2024. So it's fairly new. And it was the result of strategizing around the fact of how could we compete in the "civilian market" in a way that makes sense for APUS because the extended families are closely connected to our DNA, right? They have a military background or a veteran background. So you saw the numbers. We're getting double-digit growth with that audience, but it's a fairly new initiative. We believe we will continue to perform well. We're very optimistic. We are working closely with marketing on many efforts to promote those. For example, the podcasting initiative that I mentioned in the beginning, a lot of that -- a lot of those podcasting efforts are around promoting the extended families' benefit. But if you ask in terms of how much we've penetrated that market, I'd say that it's still very small. We've shown a TAM of 20 million people between ages 18 and 45 that don't have a degree. So the market is very large, and we're just starting.

Okay. And then just one on tuition assistance. So the $250 per credit hour, I don't think it's changed here for a couple of decades. I don't know how should we think about the potential for that to get adjusted upward and just the impact to your model?

Yes. So there's been a lot of -- I would say, a lot of noise around that from several universities. As I mentioned, a lot of universities, they believe that they cannot operate efficiently and in a profitable way with that value. There's been some discussions in the big beautiful bill that there was a provision there that at some point, people thought that it was going to be used for that, but it wasn't. And that provision actually was used during the shutdown to fund tuition assistance for the students by the Navy, the Army and the Air Force. At this point, we don't really -- we don't have any information that the value is going to change or not. The numbers we presented today do not include any changes in the value moving forward. If those changes occur, then we'll adjust the values accordingly.

Can I add that?

Absolutely.

So any increase, and it's been a quarter century, right? So it's a long time. Any increase would obviously have a very positive impact on the financials of APUS. But I would also say aligned with what Nuno said, it might increase the competitive landscape in that market. So there's a large economic benefit and then maybe there's a competitive element to it also.

Luke Horton with Northland Securities. I just wanted to touch on the kind of significant opportunity on filling the back row. I think it was kind of going to 90% capacity utilization by 2029. Just wondering what is the biggest governor to adding these students? Are there initiatives that are being implemented now, so we might see that accelerate in outer years? Or just how do you kind of think about that?

I'll start and then maybe Dwayne can jump in and Karmela. Dwayne described the kind of 5 elements. I think it was 5 growth drivers to making that successful operationally. So it's -- it really is that combination of inquiry generation and Karmela can comment a little bit more on that. Clinical excellence or clinical access our admissions teams, student advising and what am I missing?

Retention, admissions, [indiscernible] inquiry gen and faculty staffing.

Faculty staffing, which is not one that I should miss because that is a big one. But those are really the 5 things that we have to execute on to hit those numbers. So -- and I wouldn't say that one is more important than the other. They're all important for us to execute on. And I mean, obviously, the one that's easiest for you guys to look at is inquiry generation, right? But we do need to deliver on those other 4 equally in order to drive it. So Karmela?

Just from an acquisition standpoint, we've made huge strides in the last 2.5 years on the marketing side, looking at not just quantity of leads, but the quality of prospective students coming in, those that have a propensity to enroll and those who have a propensity to be successful. So when you look at it from the standpoint of consideration all the way through commencement, how do you keep the student for persisting, that's what we're focusing on as well as looking at different geographies. So we have a huge advantage. We have a proprietary system internally that we utilize as far as modeling for our marketing efforts as well as utilizing external third-party data sources to monitor where is that next best dollar spent so that we can continue to invest and grow in the campuses.

Last thing I want to answer the part of the question, do we have anything started? We do. So one of the slides I spoke about was cross-pollination programs. Prior to this year, when it was owned, it was owned by multiple different people. And I think that we didn't get the acceleration. So Mark and myself put somebody in charge now. We have a Vice President that's in charge of that. And some of those slides when I told you that we've been able to start recruiting early on that BSN program at one of our campuses in rad tech is specifically based upon the work that, that person is doing. From a clinical standpoint, which is an area that we always need to be focused on, we centralized our clinical operations, so we have consistent interaction with our clinical partners. That is one of the most important things to them. They open up their doors to Rasmussen and Hondros. We want to make sure that we're good guests. And by having that centralized is that we're delivering a consistent clinical experience. And we're not on what I would consider their naughty list, if you will.

Okay. Jasper.

Yes, Jasper Bibb with Truist Securities. I was hoping you could give us a bit more detail on the international expansion at APUS. Maybe how large that business is today? I think you sketched out a bunch of target countries you wanted to be in, some in Europe, Colombia, Mexico. Can you give us any context on where you're up and running there today to the markets that you still want to enter, what the associated costs or gating factors might be to standing up operations in Colombia, Mexico, some of those countries?

Thank you. So I'll divide in Spanish-speaking and then English-speaking, right? So on the Spanish speaking, we're going to be focused on Mexico and Colombia for different reasons. Those are the 2 most mature markets in terms of online education in LatAm, and they are also markets that are growing at double digit in terms of interest in online education, especially with graduate programs, which is what we will offer. We will not have direct operations ourselves. We are working with the partner. So the partner is going to be doing the marketing efforts, of course, with our supervision. They're going to be doing the enrollment efforts, of course, with our supervision. And then there's a revenue share model in place where we share the revenue with the partner. So that's for the Spanish-speaking part of the world. For the English-speaking part of the world, we are in negotiations with a similar partner where we plan to also have a partner to explore in Europe, certainly, the U.K., Germany, probably France, countries where there's a large affinity with American culture and sort of an aspirational side to that. And also in the Middle East, we're exploring the UAE, Saudi Arabia and Qatar as being markets that we're going to explore as well.

Just a quick follow-up. Like in the context of the '29 plan, like how big do you think the international portfolio is going to be from a registration enrollment perspective, either as a share of total enrollments, just absolute numbers? Is there any context you could give around that?

We are optimistic in terms of international, but we're being conservative. So I would say that if the numbers we shared today, they would not be significantly different without -- if you take out the international component.

Okay. We're going to go to Griffin, and then I have a question for James.

Griffin Boss with B. Riley Securities. So just a quick one for me, jumping back to RU Health Plus. Mark, you talked about the revenue at scale in these new campuses that you expect to build out $12 million. Just curious what you mean by at scale, what capacity does that -- do you underwrite there? Is that the 2/3 capacity you have today? Is that 90% capacity utilization?

It's a great question. Without getting into too specific detail, it has us up in that higher utilization level, so that 80% to 90% level. And as Angie mentioned earlier, again, it assumes how we're delivering today and doesn't account for changes that we could make to our delivery model that could expand capacity. And so that's true with our existing campuses, but it's also true with our -- as we think through the economics of those new campuses as well. So we've got some flexibility to -- related to all those. But as we think about what a campus looks like, the footprint of that campus, the makeup of the inside of that campus, that's what gets us to those numbers and assumes it's fairly well utilized at that point.

Great. Okay. I'm going to pop in with a question. I know we got 2 over here. One of the big benefits of bringing James from the Board into APEI is to accelerate the digital transformation that's necessary at APUS and the platform modernization, meaning technical as well as the campus experience at Rasmussen and Hondros, taking advantage of all the modern technology capabilities. AI is the buzz, right? James, tell us how you're thinking about tech for APEI in the next 4 years.

Best question today, by the way. I mean I was speaking to someone during the break, and I think I said nothing online is small and great. If you think about all the things you use are -- require scale. And that's where technology comes in. You can teach a classroom of 20 students and do a fairly decent job. But if you want to teach a classroom of 20,000 students, you need technology to do that. Sort of in my career, I specialized in working with very slow-growing businesses like research nonprofit universities, for example, at 2U and working with sort of trying to innovate a very slow -- we used to say that innovation in universities is like a total being robbed by 2 snails and when the cops came and ask what happened that I don't know because everything happened so fast. And that's kind of transformation of higher education. And so I've been spending the last 2 decades of my life trying to build intelligent systems, whether it is sort of -- the way I see it, there is a student life cycle from an IP address of you being interested in sort of bettering your life in some fashion and then you graduating and us sort of becoming your continuum of education because as people live longer, we need to -- and the world changes around us, we need to keep coming back. And all that is really stands on a great data strategy because you mentioned AI, and I always push back because I say AI is just frosting on top of your data strategy cake. And my goal is to build out a data strategy where -- which combines all of the strength of APEI and all of the sort of vertical businesses inside of it, but also lets each individual degree be individual in a way as well. We're creating a single source of record for APEI, which I'm very excited about. And when that all comes together, AI will just set us free, whether it is doing simple things like having AI help us read transcripts and tell us what people's GPAs are, which today requires humans to do that, to helping us score our prospects better, understand our vendors, understand our data a lot better. And that's really my goal. And all the like glitzy stuff will follow. Obviously, we will help faculty. I think AI is a huge multiplier for faculty. We are experimenting with some now. Students, we're experimenting with bots and things of that nature. We have a bot that I think a student like pinked 120 times studying for a test, things like that. And so we're experimenting with that, but I'm mostly excited about our data strategy and how it all comes together.

Great. Okay. Over to the room, yes.

Scott Schneeberger with Oppenheimer. Two questions. I'll ask them upfront, but feel free to ask me to repeat. First one, just could you speak a little bit to the restricted cash, its reduction, where that's going, the opportunity to deploy? And then the second question is just speaking a little bit about how you think about online versus campus. You have really nice free cash flow conversion. Can you just juxtapose yourself versus the industry and how you think about that strategically as far as building that metric?

With respect to the restricted cash, that was -- we had $24.5 million that was collateral for letters of credit. And when we -- that was basically lifted during the time period. So that's why you see a significant jump there. Rick, do you want to add to the nature of the

The Department of -- we had a restricted letter of credit -- letter of credit with the Department of Ed, which required collateral for cash, which is restricted cash. And so -- we got that when we acquired Rasmussen. And then this is lower within the company after many, many quarters of trying to get the department to release that. Having satisfied all the requirements, they finally released the cash. We had a lot of conversation around that. Do you want to talk...

Yes. So in terms of what we're going to do with that cash, that obviously brought up our -- when you think about that $300 million to $400 million cash generation, that's '26 to '29. So I think your point is, hey, as we sit here today, we still have quite a bit of capital that can be deployed. And the answer is the same. We would still consider all of those different categories of initiatives, including, as Angie said, in certain cases, buybacks, but we're going to evaluate everything on the table. And so really, that's on top of the $300 million to $400 million that we discussed.

Okay. Do we have another question over here? Oh, George.

This is a question for Rick. Rick, you've been probably the longest at APEI all this time. So if you look back 3 years ago, if you put yourself back 3 years ago and you look at APEI now, what would surprise you the most about what happened in those past because you've had some nice improvement. And then you look at the plan and maybe from then or from here, what surprises you the most about where you think you're going?

Right. We operate high-quality schools. And for those of you that know me, we -- I most often say we change people's lives. And we operate schools in good segments of the market, military, the veterans and nursing. And so I'm not surprised that we're all sitting here today telling the story. We went through some very challenging times immediately after the acquisition of Rasmussen, and we've talked about that, but that's all behind us now. And through the team that's been assembled through the creation of the balance sheet that we have and by serving the markets that we do, we really have built the foundation to describe the plan that we've described today. And I think I'm most proud of the team that is here, Angie's leadership through what was a number of very challenging years and to be able to sit here with this group and say, we really have a good plan because we have good schools, because we have great programs, because we're in great markets to do the things that we described today. So I don't know that there's anything about today that surprises me because it was always there and maybe it was just a little bit hidden by some of the challenges that we have. And today, we're able to more fully pull back the curtain and describe that. So it's a really bright future in front of us. And I'm very proud about that. I'm probably most proud about that.

That was a lovely question, George, to ask for Rick to wrap up. Okay, Eric, one more question, and then we're going to -- one more from Raj, and then we got it -- we'll move to -- we have food for you at lunch. So we can move next door if you'd like to ask more questions, but we'll do these last 2.

So the fourth quarter was impacted by the government shutdown. From what I can tell, it looks like the can at the federal government has been kicked until the end of January. The question is for Nuno. What are -- is there -- are there steps you're taking to prepare -- to better prepare your part of the business for that potential.

Yes. So I'll divide the answer in 2 parts. The first one is that we're obviously working really hard with all our students to try to support them during Q4 to come back to classes. And we hope to see some positive momentum there now that the tuition assistance is available again. I think the second part of your question is related to what if it happens again, right, if it happens end of January. So we had -- the good news is that during the shutdown, the branches, as we described, the Navy, Army and Air Force, at least these 3 branches, they found a way to use the money, the big beautiful bill to support tuition assistance. So we are hopeful that if it happens again, that they will continue to do that because there are still funds available and now they know that it's possible, right? So we don't know if that's going to happen for sure, but we anticipate that it would. Having said that, we're also working with our contacts at the education service centers inside the installations in order to remind them that if it happens again that, that option is available so that maybe they will be readily available to support them from day 1 as opposed to the disruption that we had last time where they had to find the process in order to fund education. So certainly, it's not ideal, but we're hopeful that if it happens that there's a way to continue funding education that they found during this initial shutdown.

Can I add to that, please? So Nuno is being a little modest. So we haven't had a shutdown that impacted TA registrations since 2013, right? So it's fairly rare, and we've explained the circumstances of why that is. So with this shutdown, given how rare it is, his team had to write the playbook how to work through this particular situation. And I would tell you, they did a really good job learning and creating as we went along. And so that playbook exists now, right? You talked about what would happen at the various branches and how they could use OB3 as a backstop and actually process TA. But internally, the team is prepared, should that happen again to run that playbook and probably improve upon it because you always learn from the things that you've done. But internally, they're very prepared to deal with that should it ever happen again.

May be Raj has question here.

My question is on -- you've laid out the CAGRs on revenue and EBITDA for the different divisions out to 2029. Is it reasonable to assume that this is -- the growth is not back-ended and that those CAGRs would hold sort of consistently from next year all the way up to '29. And also the same thing with the EBITDA margins. Is that a straight line up in the improvement?

Yes, 2 separate pieces. So the growth won't be completely linear, but it's reasonable to assume that it will happen. It's not going to happen all at the back end to your question, it's not a hockey stick on the revenue side. On the EBITDA margins, it will be more -- you're not going to get a 20% EBITDA margin next year, if that's what you're asking. It will be more towards the back end once we fully utilized and fill the back grow at Rasmussen and we continue to grow and hit the margins we're doing at APUS. So I think it's going to be a little choppy, but not extreme gyrations from as we...

Okay, everyone. Thank you so much for your engagement, your curiosity. Did anybody learn anything new today? Raise your hand. I hope that was the case. Excellent. That was my goal, and I hope you feel like there's a lot more to learn. So I'll wrap up by saying someone asked me what my proudest moment has been. And I thought about all the things that we've tackled, all the highs and lows in the last 6 years, it's today. This team what we've accomplished, where we're headed, the opportunity that's in front of us. I could not be more proud of APEI, these universities, what we do for our students, the mission we live every day and the future in front of us. It is such an exciting time, and we can't wait to have this meeting with you guys again in the future. So thank you so much. And especially those that are dialing in online. We look forward to hosting you next time we all get together for another APEI Investor Day. Thank you very much.