• 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

 Three Months Ended July 31,
$ in millions, except per share data  2026   2025 
Revenue$10.3  $11.4 
Gross Profit1$7.9  $8.4 
Gross Margin (%)1 76%  73%
Net Income$0.7  $0.4 
Earnings per Share - Basic$0.01  $0.01 
Earnings per Share - Diluted$0.01  $0.01 
EBITDA2$1.4  $1.4 
Adjusted EBITDA2$2.3  $1.9 

_______________________
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:

 Three Months Ended July 31,
  2026 $ Change % Change  2025
USU$7,342,069 $187,471  3% $7,154,598
AU 2,995,684  (1,290,184) (30)%  4,285,868
Revenue$10,337,753 $(1,102,713) (10)% $11,440,466


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:

 Three Months Ended July 31, 2026
 Consolidated AGI Corporate USU AU
Net income (loss)$677,397 $(2,446,551) $2,623,709 $500,239
Earnings per share– Basic$0.01      
Earnings per share – Diluted$0.01      


 Three Months Ended July 31, 2025
 Consolidated AGI Corporate USU AU
Net income (loss)$406,805 $(2,311,493) $2,478,675 $239,623
Earnings per share - Basic$0.01      
Earnings per share - Diluted$0.01      


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

 Three Months Ended July 31, 2026
 Consolidated AGI Corporate USU AU
EBITDA$1,409,594  $(2,165,557)  $2,774,514  $800,637 
EBITDA Margin 14%   NM   38%   27% 
Adjusted EBITDA$2,276,727  $(2,056,642)  $3,215,858  $1,117,511 
Adjusted EBITDA Margin 22%  NM  44%   37% 
        
NM – Not meaningful        
 Three Months Ended July 31, 2025
 Consolidated AGI Corporate USU AU
EBITDA$1,394,277  $(1,932,996)  $2,633,420  $693,853 
EBITDA Margin 12%   NM   37%   16% 
Adjusted EBITDA$1,876,457  $(1,901,763)  $2,859,367  $918,853 
Adjusted EBITDA Margin 16%  NM  40%   21% 


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:

 Q1'26 Q2'26 Q3'26 Q4'26 Q1'27
USU280 310 228 258 277
AU338 297 213 49 55
Total618 607 441 307 332


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:

 Q1'26 Q2'26 Q3'26 Q4'26 Q1'27
USU2,369 2,302 2,096 2,120 2,039
AU3,140 2,771 2,386 1,956 1,662
Total5,509 5,073 4,482 4,076 3,701


Nursing Students

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

 Q1'26 Q2'26 Q3'26 Q4'26 Q1'27
USU2,215 2,153 1,965 1,992 1,901
AU2,418 2,122 1,815 1,472 1,235
Total4,633 4,275 3,780 3,464 3,136


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:

 Three Months Ended July 31,
  2026   2025 
Net income$677,397  $406,805 
Interest expense, net 215,323   310,391 
Income tax expense, net 3,006   7,419 
Depreciation and amortization 513,868   669,662 
EBITDA 1,409,594   1,394,277 
Provision for credit losses 745,584   450,000 
Stock-based compensation 29,347   32,180 
Severance 82,572   — 
Legal fees related to the Merger 9,630   — 
Adjusted EBITDA$2,276,727  $1,876,457 
    
Net income Margin 7%  4%
EBITDA Margin 14%  12%
Adjusted EBITDA Margin 22%  16%


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:

 Three Months Ended July 31, 2026
 Consolidated AGI Corporate USU AU
Net income (loss)$677,397 $(2,446,551) $2,623,709 $500,239
Interest expense, net 215,323  215,323   —  —
Income tax expense, net 3,006  156   —  2,850
Depreciation and amortization 513,868  65,515   150,805  297,548
EBITDA 1,409,594  (2,165,557)  2,774,514  800,637
Provision for credit losses 745,584  —   437,525  308,059
Stock-based compensation 29,347  29,347   —  —
Severance 82,572  79,568   3,004  —
Legal fees related to the Merger 9,630  —   815  8,815
Adjusted EBITDA$2,276,727 $(2,056,642) $3,215,858 $1,117,511


Net income Margin7%  NM 36%  17% 
EBITDA Margin14%  NM 38%  27% 
Adjusted EBITDA Margin22%  NM 44%  37% 

__________________
NM – Not meaningful

 Three Months Ended July 31, 2025
 Consolidated AGI Corporate USU AU
Net income (loss)$406,805 $(2,311,493) $2,478,675 $239,623
Interest expense, net 310,391  310,391   —  —
Income tax expense, net 7,419  83   —  7,336
Depreciation and amortization 669,662  68,023   154,745  446,894
EBITDA 1,394,277  (1,932,996)  2,633,420  693,853
Provision for credit losses 450,000  —   225,000  225,000
Stock-based compensation 32,180  31,233   947  —
Adjusted EBITDA$1,876,457 $(1,901,763) $2,859,367 $918,853


Net income Margin4%  NM 35%  6% 
EBITDA Margin12%  NM 37%  16% 
Adjusted EBITDA Margin16%  NM 40%  21% 


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

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 July 31, 2026 April 30, 2026
 (Unaudited)  
Assets   
Current assets:   
Cash and cash equivalents$1,133,963  $860,384 
Restricted cash 462,898   462,898 
Accounts receivable, net of allowance of $3,971,872 and $7,913,937, respectively 14,156,479   12,751,986 
Prepaid expenses 808,038   394,688 
Other current assets 605,975   513,486 
Total current assets 17,167,353   14,983,442 
    
Property and equipment:   
Computer equipment and hardware 802,763   799,250 
Furniture and fixtures 1,974,271   1,974,271 
Leasehold improvements 4,471,740   4,471,740 
Instructional equipment 506,664   506,664 
Software 5,943,339   5,833,430 
  13,698,777   13,585,355 
Accumulated depreciation and amortization (9,781,526)  (9,288,001)
Property and equipment, net 3,917,251   4,297,354 
Goodwill 5,011,432   5,011,432 
Intangible assets, net 7,900,000   7,900,000 
Courseware and accreditation, net 183,119   191,212 
Long-term contractual accounts receivable 22,542,658   23,813,441 
Operating lease right-of-use assets, net 3,135,636   3,467,641 
Deposits and other assets 543,462   497,355 
Total assets$60,400,911  $60,161,877 
        

(Continued)

ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)

 July 31, 2026 April 30, 2026
 (Unaudited)  
Liabilities and Stockholders’ Equity   
Liabilities:   
Current liabilities:   
Accounts payable$3,696,398  $3,133,698 
Accrued expenses 2,308,776   2,375,663 
Advances on tuition 982,879   1,258,459 
Deferred tuition 2,052,138   2,190,378 
Due to students 2,026,047   2,055,477 
Current portion of long-term debt 4,989,704   1,400,000 
Operating lease obligations, current portion 3,453,044   3,308,872 
Warrant liabilities 1,802,269   — 
Other current liabilities 733,477   93,504 
Total current liabilities 22,044,732   15,816,051 
    
Long-term debt, net —   3,930,844 
Operating lease obligations, less current portion 8,177,812   9,089,806 
Warrant liabilities —   1,802,269 
Other long-term liabilities 77,402   327,402 
Total liabilities 30,299,946   30,966,372 
    
Commitments and contingencies   
    
Stockholders’ equity:   
Preferred stock, $0.001 par value; 1,000,000 shares authorized,   
10,000 issued and outstanding at both July 31, 2026 and April 30, 2026 10   10 
Common stock, $0.001 par value; 85,000,000 shares authorized, 32,427,462 and   
31,744,718 issued and outstanding at July 31, 2026 and April 30, 2026, respectively 32,427   31,745 
Additional paid-in capital 122,442,866   122,215,485 
Accumulated deficit (92,374,338)  (93,051,735)
Total stockholders’ equity 30,100,965   29,195,505 
Total liabilities and stockholders’ equity$60,400,911  $60,161,877 
        


ASPEN GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 Three Months Ended July 31,
  2026   2025 
 (Unaudited) (Unaudited)
Revenue$10,337,753  $11,440,466 
    
Operating expenses:   
Cost of revenue (exclusive of depreciation and amortization shown separately below) 2,143,389   2,685,052 
General and administrative 6,038,593   6,911,137 
Provision for credit losses 745,584   450,000 
Depreciation and amortization 513,868   669,662 
Total operating expenses 9,441,434   10,715,851 
    
Operating income 896,319   724,615 
    
Other income (expense):   
Interest expense (215,323)  (310,391)
Other expense, net (593)  — 
Total other expense, net (215,916)  (310,391)
    
Income before income taxes 680,403   414,224 
    
Income tax expense 3,006   7,419 
    
Net income 677,397   406,805 
    
Dividends attributable to preferred stock (211,727)  (42,345)
    
Net income available to common stockholders$465,670  $364,460 
    
Per share information available to common stockholders:   
Earnings per share - Basic$0.01  $0.01 
Earnings per share - Diluted$0.01  $0.01 
    
Weighted average number of common stock outstanding:   
Basic 32,404,954   29,073,583 
Diluted 43,486,527   38,726,820 
        


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

 Three Months Ended July 31,
  2026   2025 
 (Unaudited) (Unaudited)
Cash flows from operating activities:   
Net income$677,397  $406,805 
Adjustments to reconcile net income to net cash provided by operating activities:   
Provision for credit losses 745,584   450,000 
Depreciation and amortization 513,868   669,662 
Stock-based compensation 29,347   32,180 
Amortization of debt issuance costs —   26,580 
Non-cash lease benefit (200,876)  (225,313)
Changes in operating assets and liabilities:   
Accounts receivable (879,294)  (1,400,700)
Prepaid expenses (413,350)  70,314 
Other current assets (92,489)  (608,979)
Deposits and other assets (46,107)  3,447 
Accounts payable 562,700   680,689 
Accrued expenses (94,251)  124,627 
Due to students (29,430)  36,722 
Advances on tuition and deferred tuition (413,820)  (357,377)
Other current liabilities 639,973   527,951 
Other long-term liabilities (250,000)  — 
Net cash provided by operating activities         749,252           436,608 
    
Cash flows from investing activities:   
Purchases of courseware and accreditation (12,250)  (12,750)
Purchases of property and equipment (113,423)  (180,148)
Net cash used in investing activities         (125,673)          (192,898)
    
Cash flows from financing activities:   
Repayment of portion of 15% Senior Secured Debentures (350,000)  (500,000)
Net cash used in financing activities         (350,000)          (500,000)
    
Net increase (decrease) in cash, cash equivalents and restricted cash         273,579           (256,290)
Cash, cash equivalents and restricted cash at beginning of period         1,323,282           1,074,873 
Cash, cash equivalents and restricted cash at end of period$        1,596,861  $        818,583 
    
Supplemental disclosure of cash flow information:   
Cash paid for interest$206,463  $283,811 
Cash paid for income taxes$3,006  $7,419 
    
Supplemental disclosure of non-cash investing and financing activities:   
Accrued dividends$211,727  $42,345 
Common stock issued for accrued dividends$184,341  $102,412 
        

(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:

 July 31,
  2026  2025
 (Unaudited) (Unaudited)
Cash and cash equivalents$1,133,963 $480,581
Restricted cash 462,898  338,002
Total cash, cash equivalents and restricted cash$1,596,861 $818,583