• Generated operating cash flow of $0.7 million in the first quarter, enabling the resumption of marketing spend
• Revenue held steady at $10.3 million for the third consecutive quarter; United States University increases nearly 6% sequentially, driven by higher revenue per student and continued organic lead generation
• Gross margin expanded by approximately 300 bps to 76% in the first quarter, increasing from 73% in the prior year
• First quarter net income of $0.7 million, up from $0.4 million in the prior year driven by strong underlying financial performance
• Record first quarter Adjusted EBITDA of $2.3 million, up from $1.9 million in the first quarter of 2026
  
  

PHOENIX, Oct. 15, 2026 (GLOBE NEWSWIRE) -- Aspen Group, Inc. (OTCQB: ASPU) (“AGI” or the “Company”), an education technology holding company, today announced financial results for its first quarter of fiscal year 2027, ended July 31, 2026.

First Quarter Fiscal Year 2027 Summary Results

^{_______________________
1} GAAP gross profit calculation includes marketing, promotional and instructional costs, and amortization expense of $0.3 million and $0.4 million, respectively for the three months ended July 31, 2026 and 2025, respectively.
² Non-GAAP financial measures. See reconciliations of GAAP to non-GAAP financial measures under "Non-GAAP–Financial Measures" starting on page 4.

Matt LaVay, Chief Executive Officer of AGI, stated: "Our first quarter results demonstrate the continued strength of the more efficient operating model we have established over the past two years. USU student enrollments increased for the second consecutive quarter, while revenue increased 3% year-over-year and nearly 6% sequentially. Our improved cost structure contributed to a strong first-quarter Adjusted EBITDA and net income performance, and another quarter of positive operating cash flow. We converted 33% of Adjusted EBITDA to operating cash flow, providing us with the flexibility to resume direct marketing investment to support enrollment growth.”

Mr. LaVay continued, “We expect enrollment momentum to strengthen during the remainder of Fiscal 2027, supported by increased marketing investment in the second quarter and a growing number of prospective Aspen University students enrolling in comparable USU programs. We believe these initiatives will support sustained enrollment growth and contribute to revenue growth as we progress through Fiscal 2027.”

Mr. LaVay concluded, "We also continue to advance the refinancing of our existing debt and are making meaningful progress towards completing the transaction. Completing the refinancing remains an important component of our strategy to strengthen our balance sheet and provide additional financial flexibility to further increase marketing and resume growth in our student body. Now, with a more efficient operating model, sustained cash generation and the resumption of marketing, we believe we have established a strong foundation for growth.”

Fiscal Q1 2027 Financial and Operational Results (compared to Fiscal Q1 2026)

Revenue declined by 10% to $10.3 million compared to $11.4 million which was primarily a result of our very limited maintenance marketing spend. The following table presents the Company’s revenue, both per subsidiary and total:

United States University (“USU”) revenue increased by 3% compared to the prior year period and increased 6% sequentially. Although overall enrollment levels reflect the impact of very limited maintenance marketing spend, enrollments increased sequentially due to strong organic leads and the resumption of paid leads during the quarter. Additionally, USU’s performance was supported by higher revenue per student and more students entering their second year of the MSN-FNP program, which includes clinical rotations, and by tuition increases.

Aspen University's (“AU”) revenue decline of $1.3 million, or 30%, is the result of the discontinuation of new student enrollments associated with the pending merger with USU (the "Merger") and lower enrollments due to a maintenance level marketing spend starting in Fiscal 2023.

GAAP gross profit declined by $0.5 million to $7.9 million. Consolidated gross margin was 76% compared to 73%. USU's gross margin was 77% versus 76%, and AU's gross margin was 76% versus 70%. GAAP gross profit declined primarily due to lower consolidated revenue while gross margin improved on increased revenue per student combined with reduced cost of revenue at USU and AU, driven by increased efficiencies in the use of faculty.

USU’s instructional costs and services represented 19% of its revenue, compared to 20% for AU. Marketing and promotional costs represented 2% of USU’s revenue, compared to less than 1% for AU.

The following tables present the Company’s net income (loss), both per subsidiary and total:

The following tables present the Company’s Non-GAAP measures, both per subsidiary and total. See reconciliations of GAAP to non-GAAP financial measures under “Non-GAAP–Financial Measures” starting on page 4.

Adjusted EBITDA improved by 21% to $2.3 million primarily due to increased revenue per student at USU, increased instructional efficiencies at AU and USU and reduced general and administrative costs attributed to our restructurings. As a result, Adjusted EBITDA margin expanded by approximately 560 basis points to 22% from 16% on the year ago quarter.

Operating Metrics 

New Student Enrollments

Year-over-year new student enrollments were flat at USU as continued strong organic leads offset the maintenance level of marketing spend. AU new enrollments declined to 55 students in the quarter due to the impact of discontinuing new student enrollments associated with the pending Merger. USU enrollments were up 7% sequentially due to continued strong organic enrollments and the resumption of limited marketing spend.

New student enrollments for the past five quarters are shown below:

The Company expects USU student enrollments to grow in the second half of Fiscal 2027, supported by increased marketing investment starting in Fiscal Q2 2027, and prospective AU students enrolling in comparable USU programs following the cessation of new enrollments at AU.

Total Active Student Body

The active degree-seeking student body for the past five quarters is shown below:

Nursing Students

The nursing student body for the past five quarters is shown below:

Liquidity

The Fiscal Q1 2027 ending unrestricted cash balance was $1.1 million. As of October 9, 2026, the Company had $0.6 million of unrestricted cash on hand. In Fiscal Q2 2026, we implemented a fifth restructuring plan that resulted in additional cash benefits for the Company starting in Fiscal Q3 2026. The restructuring resulted in the elimination of approximately 75 positions within AU and AGI. The resulting additional ongoing quarterly compensation-related savings from the restructuring are approximately $1.5 million.

Our restructuring efforts were designed to achieve sustained operating cash flows, and the resumption of marketing spend to renew growth in our student body. The quarter generated operating cash flow of $0.7 million, which is the seventh consecutive quarter of operating cash flow. As a result of sustained operating cash flows, we resumed marketing spend in Fiscal Q1 2027.

Cost reductions associated with the restructuring plans and other corporate cost reductions ensure that the Company will have sufficient cash to meet its working capital needs for the next 12 months.

Non-GAAP – Financial Measures

This press release includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives to net income (loss), operating income (loss), and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of the historical operating results of AGI nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.

Our management uses and relies on EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin, which are non-GAAP financial measures. We believe that management, analysts, and shareholders benefit from referring to the following non-GAAP financial measures to evaluate and assess our core operating results from period-to-period after removing the impact of items that affect comparability. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the excluded items described below.

We have included a reconciliation of our non-GAAP financial measures to the most comparable financial measures calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between AGI and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.

AGI defines Adjusted EBITDA as EBITDA excluding: (1) provision for credit losses; (2) stock-based compensation; (3) severance; and (4) legal fees related to the Merger. The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA and of net income margin to the Adjusted EBITDA margin:

The following tables present a reconciliation of net income (loss) to EBITDA (loss) and Adjusted EBITDA and of net income margin to the Adjusted EBITDA margin by business unit:

__________________
NM – Not meaningful

Definitions

EBITDA Margin is defined as EBITDA divided by revenue.

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by revenue.

We believe EBITDA Margin and Adjusted EBITDA Margin are useful for management, analysts and investors as these measures allow for a more meaningful comparison between our performance and that of our competitors. EBITDA Margin and Adjusted EBITDA Margin have certain limitations in that they do not take into account the impact to our consolidated statement of operations of certain expenses.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including our expectations that we will refinance our debt, our revenue growth, our liquidity and increases in USU’s enrollment. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include our ability to reach an agreement with a new lender on favorable terms, the continued demand of nursing students for the new programs, student attrition, national and local economic factors including the impact of international conflicts including the war in Iran and tariffs on the economy and affordability in general, competition from nursing schools in local markets, the competitive impact from the trend of major non-profit universities using online education and consolidation among our competitors, the impact, if any from any future U.S. government shutdowns, and our ability to resolve the amounts we may owe to landlords on our former campuses. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

About Aspen Group, Inc.

Aspen Group, Inc. is an education technology holding company that leverages its infrastructure and expertise to allow its two universities, Aspen University and United States University, to deliver on the vision of making college affordable again.

Investor Relations Contact

Kim Rogers
Managing Director
Hayden IR
385-831-7337 
Kim@HaydenIR.com

GAAP Financial Statements

(Continued)

(Continued)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(UNAUDITED)

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the accompanying consolidated balance sheet to the total amounts shown in the accompanying unaudited consolidated statements of cash flows: