UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED ~~SEPTEMBER~~MARCH 3031, ~~2024~~2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO

Commission File Number: 0-23245

PERDOCEO EDUCATION CORPORATION

(Exact name of registrant as specified in its charter)


Delaware	36-3932190
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1750 E. Golf Road Schaumburg, Illinois	60173
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (847) 781-3600

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	PRDO	Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

Number of shares of registrant’s common stock, par value $0.01, outstanding as of ~~November~~April 625, ~~2024~~2025: 65,~~716~~536,~~357~~259

PERDOCEO EDUCATION CORPORATION

FORM 10-Q

TABLE OF CONTENTS

		Page
PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Income (Unaudited)	2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)	2
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1718
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26
Item 4.	Controls and Procedures	26
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 5.	Other Information	28
Item 6.	Exhibits	2928
SIGNATURES		30

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,			December 31,
	March 31,			December 31,
(In Thousands, Except Share and Per Share Amounts)	~~2024~~2025			~~2023~~2024
ASSETS	(unaudited)
CURRENT ASSETS:
Cash and cash equivalents, unrestricted	$	~~238~~132,~~049~~055		$	~~118~~109,~~009~~130
Restricted cash		~~773~~21,594			122,~~012~~623
Total cash, cash equivalents and restricted cash		~~238~~153,~~822~~649			~~119~~131,~~021~~753
Short-term investments		~~483~~458,~~772~~527			~~485~~459,~~135~~795
Total cash and cash equivalents, restricted cash and short-term investments		~~722~~612,~~594~~176			~~604~~591,~~156~~548
Student receivables, gross		6784,~~599~~125			6463,~~011~~925
Allowance for credit losses		(3538,~~581~~453	)		(3441,~~613~~118	)
Student receivables, net		3245,~~018~~672			2922,~~398~~807
Receivables, other		49,~~114~~986			45,~~539~~330
Prepaid expenses		1014,~~665~~672			1116,~~712~~910
Inventories		3,~~870~~251			53,~~004~~388
Other current assets		~~263~~247			~~155~~171
Total current assets		~~773~~686,~~524~~004			~~654~~640,~~964~~154
NON-CURRENT ASSETS:
Property and equipment, net of accumulated depreciation of $64,602 and $58,785 as of September 30, 2024 and December 31, 2023, respectively		18,099			21,371
Property and equipment, net of accumulated depreciation of $73,688 and $67,492 as of March 31, 2025 and December 31, 2024, respectively		89,495			95,508
Right of use asset, net		15,669			19,096
Right of use asset, net - operating		48,408			50,099
Goodwill		241,162			241,162
Right of use asset, net - finance		14,096			15,375
Intangible assets, net of amortization of $26,937 and $23,612 as of September 30, 2024 and December 31, 2023, respectively		32,894			36,219
Goodwill		258,070			258,012
Student receivables, gross		8,656			7,028
Intangible assets, net of amortization of $32,056 and $27,725 as of March 31, 2025 and December 31, 2024, respectively		90,675			95,006
Allowance for credit losses		(2,752	)		(3,169	)
Student receivables, gross		9,553			8,597
Student receivables, net		5,904			3,859
Allowance for credit losses		(4,413	)		(2,402	)
Deferred income tax assets, net		23,010			23,804
Student receivables, net		5,140			6,195
Other assets		6,494			6,841
Deferred income tax assets, net		68,774			68,774
TOTAL ASSETS	$	1,116,756		$	1,007,316
Other assets		7,882			7,911
TOTAL ASSETS	$	1,268,544		$	1,237,034
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Lease liability-operating	$	45,~~969~~278		$	57,~~701~~792
Accounts payable		13,647			10,766
Lease liability-finance		5,095			5,466
Accounts payable		13,374			12,805
Accrued expenses:
Payroll and related benefits		3327,~~517~~158			3235,~~684~~059
Advertising and marketing costs		76,~~969~~902			78,~~196~~135
Income taxes		1017,~~396~~869			34,~~974~~926
Other		2115,~~322~~437			1321,~~503~~239
Deferred revenue		4962,~~347~~847			3736,~~215~~740
Total current liabilities		~~141~~153,~~167~~960			~~111~~132,~~039~~162
NON-CURRENT LIABILITIES:
Lease liability-operating		1750,~~317~~375			2150,~~346~~224
Other liabilities		22,841			33,510
Lease liability-finance		10,231			11,555
Total non-current liabilities		40,158			54,856
Sale lease-back financing		56,657			-
Commitments and Contingencies (Note 8)
Construction financing		-			56,500
Other liabilities		27,066			27,057
Total non-current liabilities		144,329			145,336
Commitments and Contingencies (Note 9)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued or outstanding		-			-
Common stock, $0.01 par value; 300,000,000 shares authorized; 91,020,793 and 90,270,306 shares issued, 65,716,357 and 65,544,539 shares outstanding as of September 30, 2024 and December 31, 2023, respectively		910			903
Common stock, $0.01 par value; 300,000,000 shares authorized; 91,973,921 and 91,023,660 shares issued, 65,536,259 and 65,719,224 shares outstanding as of March 31, 2025 and December 31, 2024, respectively		920			910
Additional paid-in capital		~~704~~711,~~346~~037			~~694~~707,~~798~~212
Accumulated other comprehensive income (loss)		1,568			(666	)
Accumulated other comprehensive income		673			166
Retained earnings		~~573~~630,~~031~~542			~~480~~595,~~606~~672
Treasury stock, at cost; 25,304,436 and 24,725,767 shares as of September 30, 2024 and December 31, 2023, respectively		(344,424	)		(334,220	)
Treasury stock, at cost; 26,437,662 and 25,304,436 shares as of March 31, 2025 and December 31, 2024, respectively		(372,917	)		(344,424	)
Total stockholders' equity		~~935~~970,~~431~~255			~~841~~959,~~421~~536
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,~~116~~268,~~756~~544		$	1,~~007~~237,~~316~~034

The accompanying notes are an integral part of these condensed consolidated financial statements.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

For the Quarter Ended September 30,

For the Year to Date Ended September 30,

For the Quarter Ended March 31,

(In Thousands, Except Per Share Amounts)

~~2024~~2025

~~2023~~2024

~~2024~~

~~2023~~

REVENUE:

Tuition and fees, net

~~168~~211,~~442~~848

~~178~~166,~~259~~998

~~500,844~~

~~556,098~~

Other

1,~~386~~156

1,~~664~~266

~~3,988~~

~~5,987~~

Total revenue

~~169~~213,~~828~~004

~~179~~168,~~923~~264

~~504,832~~

~~562,085~~

OPERATING EXPENSES:

Educational services and facilities

2848,~~287~~542

3329,~~502~~858

~~85,661~~

~~100,101~~

General and administrative

93100,~~694~~928

9287,~~054~~482

~~270,487~~

~~305,328~~

Depreciation and amortization

311,~~053~~807

3,~~914~~016

~~9,138~~

~~13,438~~

Asset impairment

71,~~380~~630

~~2,468~~

~~8,715~~

Total operating expenses

~~125~~161,~~034~~277

~~136~~121,~~850~~986

~~367,754~~

~~427,582~~

Operating income

4451,~~794~~727

4346,~~073~~278

~~137,078~~

~~134,503~~

OTHER INCOME:

Interest income

76,~~702~~476

56,~~210~~793

~~21,685~~

~~13,559~~

Interest expense

(821,682

)

(97335

)

~~(529~~

)

~~(288~~

)

Miscellaneous (expense) income

(5216

)

~~(98~~115

)

~~21,970~~

Total other income

74,~~568~~778

56,~~015~~573

~~21,149~~

~~35,241~~

PRETAX INCOME

5256,~~362~~505

4852,~~088~~851

~~158,227~~

~~169,744~~

Provision for income taxes

1412,~~107~~817

613,~~781~~409

~~42,101~~

~~39,280~~

NET INCOME

3843,~~255~~688

4139,~~307~~442

~~116,126~~

~~130,464~~

NET INCOME PER SHARE - BASIC:

0.5867

0.6360

~~1.77~~

~~1.95~~

NET INCOME PER SHARE - DILUTED:

0.5765

0.6259

~~1.73~~

~~1.92~~

WEIGHTED AVERAGE SHARES OUTSTANDING:

Basic

65,~~699~~680

65,~~634~~555

~~65,622~~

~~66,758~~

Diluted

6766,~~312~~872

6766,~~103~~841

~~67,110~~

~~68,072~~

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	For the Quarter Ended September 30,					For the Year to Date Ended September 30,
	For the Quarter Ended March 31,
(In Thousands)	~~2024~~2025		~~2023~~2024			~~2024~~		~~2023~~
NET INCOME	$	3843,~~255~~688	$	4139,~~307~~442		$	~~116,126~~	$	~~130,464~~
OTHER COMPREHENSIVE INCOME, net of tax:
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
Foreign currency translation adjustments		46-		(31	)		7		(8	)
Unrealized gain on investments		3,243		653			2,227		456
Unrealized gain (loss) on investments		507		(923	)
Total other comprehensive income		3,289		622			2,234		448
Total other comprehensive income (loss)		507		(954	)
COMPREHENSIVE INCOME	$	4144,~~544~~195	$	4138,~~929~~488		$	~~118,360~~	$	~~130,912~~

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

	Common Stock				Treasury Stock
(In Thousands)	Issued Shares		$0.01 Par Value		Purchased Shares			Cost			Additional Paid-in Capital		Accumulated Other Comprehensive ~~(Loss)~~ Income			Retained Earnings			Total
BALANCE, July 1, 2024		90,978	$	910		(25,304	)	$	(344,424	)	$	701,153	$	(1,721	)	$	543,606		$	899,524
BALANCE, January 1, 2025		91,024	$	910		(25,304	)	$	(344,424	)	$	707,212	$	166		$	595,672		$	959,536
Net income		-		-		-			-			-		-			3843,~~255~~688			3843,~~255~~688
Foreign currency translation		-		-		-			-			-		46			-			46
Unrealized gain on investments, net of tax		-		-		-			-			-		507			-			507
Unrealized gain on investments, net of tax		-		-		-			-			-		3,243			-			3,243
Dividends to shareholders, per share $0.13		-		-		-			-			-		-			(8,818	)		(8,818	)
Dividends to shareholders, per share $0.13		-		-		-			-			-		-			(8,830	)		(8,830	)
Treasury stock purchased		-		-		(985	)		(25,192	)		-		-			-			(25,192	)
Share-based compensation expense		-		-		-			-			2,828		-			-			2,828
Earnout payments for business acquisition		-		-		158			4,243			-		-			-			4,243
Common stock issued		43		-		-			-			365		-			-			365
Share-based compensation expense		-		-		-			-			2,857		-			-			2,857
BALANCE, September 30, 2024		91,021	$	910		(25,304	)	$	(344,424	)	$	704,346	$	1,568		$	573,031		$	935,431
Common stock issued		950		10		(307	)		(7,544	)		968		-			-			(6,566	)
BALANCE, March 31, 2025		91,974	$	920		(26,438	)	$	(372,917	)	$	711,037	$	673		$	630,542		$	970,255
	Common Stock				Treasury Stock
(In Thousands)	Issued Shares		$0.01 Par Value		Purchased Shares			Cost			Additional Paid-in Capital		Accumulated Other Comprehensive Loss			Retained Earnings			Total
BALANCE, July 1, 2023		90,016	$	900		(24,407	)	$	(328,648	)	$	688,805	$	(5,621	)	$	436,996		$	792,432
Net income		-		-		-			-			-		-			41,307			41,307
Foreign currency translation		-		-		-			-			-		(31	)		-			(31	)
Unrealized gain on investments, net of tax		-		-		-			-			-		653			-			653
Dividends to shareholders, per share $0.11		-		-		-			-			-		-			(7,474	)		(7,474	)
Share-based compensation expense		-		-		-			-			2,336		-			-			2,336
Common stock issued		60		1		-			-			435		-			-			436
BALANCE, September 30, 2023		90,076	$	901		(24,407	)	$	(328,648	)	$	691,576	$	(4,999	)	$	470,829		$	829,659
	Common Stock				Treasury Stock								Accumulated Other
(In Thousands)	Issued Shares		$0.01 Par Value		Purchased Shares			Cost			Additional Paid-in Capital		Comprehensive (Loss) Income			Retained Earnings			Total
BALANCE, January 1, 2024		90,270	$	903		(24,726	)	$	(334,220	)	$	694,798	$	(666	)	$	480,606		$	841,421
Net income		-		-		-			-			-		-			~~116~~39,~~126~~442			~~116~~39,~~126~~442
Foreign currency translation		-		-		-			-			-		7(31	)		-			7(31	)
Unrealized gain on investments, net of tax		-		-		-			-			-		2,227			-			2,227
Unrealized loss on investments, net of tax		-		-		-			-			-		(923	)		-			(923	)
Dividends to shareholders, per share $0.35		-		-		-			-			-		-			(23,701	)		(23,701	)
Dividends to shareholders, per share $0.11		-		-		-			-			-		-			(7,426	)		(7,426	)
Treasury stock purchased		-		-		(385	)		(6,769	)		-		-			-			(6,769	)
Share-based compensation expense		-		-		-			-			72,~~385~~307		-			-			72,~~385~~307
Common stock issued		~~751~~637		76		(193	)		(3,435	)		21,~~163~~514		-			-			(1,~~265~~915	)
BALANCE, September 30, 2024		91,021	$	910		(25,304	)	$	(344,424	)	$	704,346	$	1,568		$	573,031		$	935,431
BALANCE, March 31, 2024		90,907	$	909		(25,304	)	$	(344,424	)	$	698,619	$	(1,620	)	$	512,622		$	866,106
	Common Stock				Treasury Stock								Accumulated Other
(In Thousands)	Issued Shares		$0.01 Par Value		Purchased Shares			Cost			Additional Paid-in Capital		Comprehensive Loss			Retained Earnings			Total
BALANCE, January 1, 2023		89,396	$	894		(22,221	)	$	(301,624	)	$	684,183	$	(5,447	)	$	347,839		$	725,845
Net income		-		-		-			-			-		-			130,464			130,464
Foreign currency translation		-		-		-			-			-		(8	)		-			(8	)
Unrealized gain on investments, net of tax		-		-		-			-			-		456			-			456
Dividends to shareholders, per share $0.11		-		-		-			-			-		-			(7,474	)		(7,474	)
Treasury stock purchased		-		-		(221	)		(2,729	)		-		-			-			(2,729	)
Treasury stock acquired upon sale of asset		-		-		(1,800	)		(22,086	)		-		-			-			(22,086	)
Share-based compensation expense		-		-		-			-			6,651		-			-			6,651
Common stock issued		680		7		(165	)		(2,209	)		742		-			-			(1,460	)
BALANCE, September 30, 2023		90,076	$	901		(24,407	)	$	(328,648	)	$	691,576	$	(4,999	)	$	470,829		$	829,659

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Year to Date Ended September 30,
	For the Quarter Ended March 31,
(In Thousands)	~~2024~~2025			~~2023~~2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	~~116~~43,~~126~~688		$	~~130~~39,~~464~~442
Adjustments to reconcile net income to net
cash provided by operating activities:
Asset impairment		~~2,468~~-			81,~~715~~630
Gain on sale of asset		-			(22,086	)
Depreciation and amortization expense		11,807			3,016
Depreciation and amortization expense		9,138			13,438
Bad debt expense		7,558			6,556
Bad debt expense		21,364			26,519
Compensation expense related to share-based awards		2,857			2,307
Compensation expense related to share-based awards		7,385			6,651
Deferred income taxes		-			741
Deferred income taxes		794			4,249
Changes in operating assets and liabilities		(783	)		800
Changes in operating assets and liabilities		(13,280	)		(69,117	)
Net cash provided by operating activities		65,127			54,492
Net cash provided by operating activities		143,995			98,833
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of available-for-sale investments		(~~266~~100,~~842~~367	)		(~~205~~104,~~529~~558	)
Sales of available-for-sale investments		~~277~~103,~~111~~286			~~179~~74,~~139~~955
Purchases of property and equipment		(21,~~997~~737	)		(41,~~801~~198	)
Net cash provided by (used in) investing activities		71,~~272~~182			(3130,~~191~~801	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock		~~2,170~~978			~~749~~1,520
Purchase of treasury stock		(625,~~769~~192	)		(26,~~729~~769	)
Payments of employee tax associated with stock compensation		(37,~~435~~544	)		(23,~~209~~435	)
Payments of cash dividends and dividend equivalents		(239,~~156~~202	)		(7,~~222~~197	)
Release of cash held in escrow		(276	)		(1,000	)
Earnout payments for business acquisition		(1,757	)		-
Net cash used in financing activities		(31,466	)		(12,411	)
Principal payments for finance lease		(1,207	)		-
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		119,801			55,231
Principal payments for failed sale leaseback		(489	)		-
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period		119,021			118,884
Net cash used in financing activities		(44,413	)		(15,881	)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period	$	238,822		$	174,115
NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH		21,896			7,810
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of the period		131,753			119,021
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of the period	$	153,649		$	126,831

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PERDOCEO EDUCATION CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE COMPANY

Perdoceo’s accredited academic institutions offer a quality postsecondary education ~~primarily online~~ to a diverse student population, ~~along~~ with fully online, campus-based and ~~blended~~hybrid learning programs. The Company’s academic institutions – Colorado Technical University (“CTU”), ~~and~~ the American InterContinental University System (“AIUS” or “AIU System”) and University of St. Augustine for Health Sciences ("USAHS") – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Our academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. USAHS is among the nation's reputable universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Perdoceo's academic institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

As used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “the Company,” “Perdoceo” and “PEC” refer to Perdoceo Education Corporation and our wholly-owned subsidiaries.

2. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the rules and regulations for reporting the Quarterly Report on Form 10-Q. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet at December 31, ~~2023~~2024 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. This report should be read in conjunction with our ~~2023~~2024 Form 10-K. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation.

Operating results for the quarter ~~and year to date~~ ended ~~September~~March 3031, ~~2024~~2025 are not necessarily indicative of the results that may be expected for the full year ending December 31, ~~2024~~2025.

On December 2, 2024, the Company acquired the University of St. Augustine for Health Sciences (the "USAHS acquisition"). Results of operations related to the USAHS acquisition are included in the consolidated financial statements from the date of acquisition. See Note 3 "Business Acquisition" for further information.

The unaudited condensed consolidated financial statements presented herein include the accounts of Perdoceo Education Corporation and our wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated.

Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across ~~two~~three reporting segments: CTU, AIUS and ~~AIUS~~USAHS.

3. ~~RECENT~~BUSINESS ~~ACCOUNTING PRONOUNCEMENTS~~ACQUISITION

~~Recent~~On ~~accounting~~December ~~guidance~~2, ~~not~~2024, ~~yet~~the ~~adopted~~Company completed the acquisition of the University of St. Augustine for Health Sciences ("USAHS").

InUSAHS ~~December~~is ~~2023,~~among the ~~FASB~~nation’s ~~issued~~reputable ~~Accounting~~universities ~~Standard~~offering ~~Update~~graduate ~~("ASU")~~health ~~No.~~sciences ~~2023-09~~degrees, ~~Income~~primarily ~~Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments~~ in ~~this~~physical ~~ASU~~therapy, ~~require~~occupational ~~that public business entities on an annual basis 1) disclose specific categories in the rate reconciliation~~therapy, ~~and~~speech 2)language ~~provide~~therapy ~~additional information for reconciling items that meet a quantitative threshold. The amendments require disclosure about income taxes paid by federal, state~~ and ~~foreign taxes~~nursing, ~~and~~as bywell ~~individual~~as ~~jurisdictions in which income taxes paid is equal or greater than 5 percent of total income taxes paid. The amendments also require entities to disclose income or loss from~~ continuing ~~operations~~education ~~before income tax expense disaggregated between domestic and foreign and income tax expense or benefit from continuing operations disaggregated by federal, state and foreign~~programs. ~~For~~Founded ~~all~~in ~~public business entities~~1979, ~~ASU~~USAHS ~~2023-09~~educates isstudents ~~effective~~through ~~for~~its ~~annual~~network ~~periods~~of ~~beginning~~campuses ~~after~~in ~~December~~San 15Marcos, ~~2024~~California; ~~early adoption is permitted~~St. WeAugustine ~~are~~and ~~currently~~Miami, ~~evaluating~~Florida; ~~this~~and ~~guidance~~Austin and ~~believe the adoption will not significantly impact the presentation of our financial condition~~Dallas, ~~results~~Texas ofand ~~operations~~through ~~and~~its ~~disclosures~~online programs.

InThe ~~November~~preliminary ~~2023,~~purchase ~~the~~price ~~FASB~~of ~~issued ASU No~~$137.0 ~~2023-07,~~million ~~Segment~~for ~~Reporting~~USAHS ~~(Topic~~was ~~280):~~allocated ~~Improvements~~ to ~~Reportable~~the ~~Segment~~preliminary ~~Disclosures.~~fair ~~The~~values ~~amendments~~of inacquired ~~this~~tangible ~~ASU~~and ~~improve~~identifiable ~~reportable~~intangible ~~segment~~assets ~~disclosure~~of ~~requirements,~~$268.4 ~~primarily~~million ~~through~~and ~~enhanced~~assumed ~~disclosures~~liabilities ~~about~~of ~~significant segment expenses~~$131.4 ~~The~~million ~~amendments~~as inof ~~this~~December ~~update~~2, ~~require~~2024. ~~that~~The apreliminary ~~public~~purchase ~~entity~~price ~~disclose~~consisted onof an ~~annual~~initial ~~and~~cash ~~interim~~payment ~~basis,~~made 1)in ~~significant~~December ~~segment~~2024, ~~expenses~~and ~~that~~an ~~are~~estimated ~~regularly~~working ~~provided~~capital totrue ~~the~~up ~~chief~~of ~~operating~~$0.8 ~~decision~~million, ~~maker~~which ~~("CODM")~~was ~~and~~received ~~included~~in ~~within~~April ~~each~~2025. ~~reported~~Based ~~measure~~on ofour ~~segment~~preliminary ~~profit~~purchase orprice ~~loss~~allocation, 2)we anhave ~~amount~~recorded ~~for~~goodwill ~~other segment items by reportable segment and a description~~ of ~~its~~$16.9 ~~composition~~million. ~~The~~Goodwill ~~other~~reflects ~~segment~~the ~~items~~inherent ~~category~~value isof the ~~difference~~acquired ~~between~~workforce ~~segment~~as ~~revenue~~well ~~less~~as ~~the~~revenue ~~segment~~growth ~~expenses~~opportunities ~~disclosed~~following ~~under~~ the ~~significant~~acquisition. ~~expense~~All ~~principle~~of ~~and~~this ~~each~~goodwill ~~reported~~balance ~~measure~~will ofnot ~~segment~~be ~~profit~~deductible orfor ~~loss,~~income ~~and~~tax 3)reporting ~~disclose~~purposes. ~~the~~Management's ~~title~~purchase ~~and~~price allocation is

~~position~~provisional ofas the ~~CODM~~fair ~~and~~value ~~an explanation~~ of ~~how~~deferred ~~the~~tax ~~CODM~~assets ~~uses~~are ~~the~~still ~~reported~~being ~~measure(s)~~finalized, ofprimarily ~~segment~~due ~~profit or loss in assessing segment performance and deciding how~~ to ~~allocate~~the ~~resources.~~timing ~~For~~of ~~all~~the ~~public~~acquisition ~~business~~which ~~entities,~~occurred ~~ASU~~in ~~2023-07 is effective for annual periods after~~ December ~~15, 2023 and interim periods within fiscal years beginning after December 15,~~ 2024~~; early adoption is permitted~~. ~~We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosures.~~

~~In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions.~~ The ~~amendments~~following intable ~~this~~summarizes ~~ASU clarify that a contractual restriction on~~ the ~~sale~~preliminary offair anvalues ~~equity security is not considered part~~ of ~~the~~assets ~~unit~~acquired ~~of account of the equity security~~ and, ~~therefore,~~liabilities isassumed ~~not considered in measuring fair value. The amendments also clarify that an entity cannot,~~ as ~~a separate unit~~ of ~~account,~~acquisition ~~recognize~~date ~~and~~(dollars ~~measure~~in a contractual sale restriction. For all public business entities, ASU 2022-03 is effective for annual periods and interim periods beginning after December 15, 2024; early adoption is permitted. We are currently evaluating this guidance and believe the adoption will not significantly impact the presentation of our financial condition, results of operations and disclosures.thousands):

4. FINANCIAL INSTRUMENTS


	USAHS
	December 2, 2024
Assets:
Student and other receivables	$	1,771
Prepaid assets		4,727
Property, plant and equipment		78,800
ROU assets		53,271
Intangible assets
Trade name (indefinite-lived)		9,800
Customer relationships (2 year life)		14,000
Course curriculum (4 year life)		15,500
Accreditation rights (12 year life)		25,000
Deferred tax asset, net		47,626
Other assets		977
Goodwill		16,908
Total assets acquired	$	268,380
Liabilities:
Accounts payable and other accrued liabilities	$	9,148
Deferred revenue		10,137
Lease liabilities		55,625
Construction financing		56,500
Total liabilities assumed	$	131,410

Net assets acquired	$	136,970

~~Investments~~4. ~~consist~~RECENT ofACCOUNTING ~~the following as of September 30, 2024 and December 31, 2023 (dollars in thousands):~~PRONOUNCEMENTS

	September 30, 2024
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Non-governmental debt securities	$	224,665	$	1,203	$	(85	)	$	225,783
Treasury and federal agencies		257,488		576		(75	)		257,989
Total short-term investments (available for sale)	$	482,153	$	1,779	$	(160	)	$	483,772

Recent accounting guidance adopted in 2025

	December 31, 2023
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available for sale):
Non-governmental debt securities		245,886		719		(892	)		245,713
Treasury and federal agencies		239,859		393		(830	)		239,422
Total short-term investments (available for sale)	$	485,745	$	1,112	$	(1,722	)	$	485,135

In December 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this ASU require that public business entities on an annual basis 1) disclose specific categories in the rate reconciliation, and 2) provide additional information for reconciling items that meet a quantitative threshold. The amendments require disclosure about income taxes paid by federal, state and foreign taxes, and by individual jurisdictions in which income taxes paid is equal or greater than 5 percent of total income taxes paid. The amendment also requires entities to disclose income or loss from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense or benefit from continuing operations disaggregated by federal, state and foreign. For all public business entities, ASU 2023-09 is effective for annual periods beginning after December 15, 2024; early adoption is permitted. We have evaluated and adopted this guidance. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

In June 2022, the ~~table~~FASB ~~above~~issued ASU No. 2022-03, ~~unrealized~~Fair ~~holding~~Value ~~gains~~Measurement (~~losses~~Topic 820): ~~relate~~Fair Value Measurement of Equity Securities Subject to ~~short-term~~Contractual ~~investments~~Sale Restrictions. The amendments in this ASU clarify that ~~have~~a ~~been~~contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a ~~continuous~~separate ~~unrealized~~unit ~~gain~~of ~~(loss)~~account, ~~position~~recognize and measure a contractual sale restriction. For all public business entities, ASU 2022-03 is effective for ~~less~~annual ~~than~~periods ~~one~~and ~~year~~interim periods beginning after December 15, 2024; early adoption is permitted. We have evaluated and adopted this guidance. The adoption did not significantly impact the presentation of our financial condition, results of operations and disclosures.

5. FINANCIAL INSTRUMENTS

Investments consist of the following as of March 31, 2025 and December 31, 2024 (dollars in thousands):


	March 31, 2025
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available-for-sale):
Non-governmental debt securities	$	242,291	$	588	$	(70	)	$	242,809
Treasury and federal agencies		215,396		382		(60	)		215,718
Total short-term investments (available-for-sale)	$	457,687	$	970	$	(130	)	$	458,527


	December 31, 2024
			Gross Unrealized
	Cost		Gain		(Loss)			Fair Value
Short-term investments (available-for-sale):
Non-governmental debt securities		246,070		466		(278	)		246,258
Treasury and federal agencies		213,394		258		(115	)		213,537
Total short-term investments (available-for-sale)	$	459,464	$	724	$	(393	)	$	459,795

In the table above, unrealized holding gains (losses) relate to short-term investments that have been in a continuous unrealized gain (loss) position for less than one year, which are recorded within accumulated other comprehensive income on our condensed consolidated balance sheets.

Our non-governmental debt securities primarily consist of corporate bonds, certificates of deposit and commercial paper. Our treasury and federal agencies primarily consist of U.S. Treasury bills and federal home loan debt securities.

~~Realized~~There were no realized gains or ~~loss~~losses ~~resulting~~ from ~~sales~~the sale of investments ~~were~~for ~~zero during~~ the quarters ~~and years to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~September~~March 3031, ~~2023~~2024.

Fair Value Measurements

FASB ASC Topic 820 – Fair Value ~~Measurements~~Measurement establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of ~~September~~March 3031, ~~2024~~2025, we held investments that are required to be measured at fair value on a recurring basis. These investments (available -for -sale) consist of non-governmental debt securities and treasury and federal agencies securities. Available -for -sale securities included in Level 2 are estimated based on observable inputs other than quoted prices in active markets for identical assets and liabilities, such as quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

~~All~~Financial ofinstruments ~~our available for sale investments were~~ measured ~~under~~at ~~Level~~fair 2value ason ofa ~~September~~recurring ~~30,~~basis ~~2024~~subject ~~and~~to ~~December~~the ~~31,~~disclosure ~~2023.~~requirements ~~Additionally, money market funds~~ of ~~$30.5~~FASB ~~million~~ASC ~~and~~Topic ~~$30.3~~820 ~~million~~- ~~included~~Fair ~~within~~Value ~~cash~~Measurements ~~and~~at ~~cash~~March ~~equivalents on our condensed consolidated balance sheets as of September 30~~31, ~~2024~~2025 and December 31, ~~2023,~~2024 ~~respectively,~~ were ~~measured under Level 1. Non-governmental debt securities of $20.9 million included within cash and cash equivalents on our unaudited condensed consolidated balance sheets~~ as offollows ~~September~~(dollars ~~30,~~in ~~2024 were measured under Level 2. Federal agency debt securities of $53.2 million and $44.9~~thousands):


	As of March 31, 2025
	Level 1		Level 2		Total
Cash and cash equivalents - money market funds	$	30,745	$	-	$	30,745
Short-term investments - non-governmental debt securities		-		242,809		242,809
Short-term investments - treasury and federal agencies		-		215,718		215,718
Totals	$	30,745	$	458,527	$	489,272

	As of December 31, 2024
	Level 1		Level 2		Total
Cash and cash equivalents - money market funds	$	30,189	$	-	$	30,189
Cash and cash equivalents - federal agency debt securities		-		13,078		13,078
Short-term investments - non-governmental debt securities		-		246,258		246,258
Short-term investments - treasury and federal agencies		-		213,537		213,537
Totals	$	30,189	$	472,873	$	503,062

~~million included within cash and cash equivalents on our unaudited condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023, respectively, were measured under Level 2.~~ 7

Equity Method Investment

~~Our~~We ~~investment~~make inperiodic anoperating ~~equity~~maintenance ~~affiliate,~~payments ~~which~~to ~~is recorded within other noncurrent assets on our condensed consolidated balance sheets, represents~~ an ~~international~~equity ~~investment in a private company~~affiliate. AsThe oftotal ~~September~~fees ~~30,~~recorded ~~2024,~~during ~~our~~the ~~investment~~quarters inended anMarch ~~equity~~31, ~~affiliate~~2025 ~~equated~~and to2024 ~~30.7%,~~were oras ~~$1.2~~follows ~~million.~~(dollars in thousands):

During each of the quarters ended September 30, 2024 and 2023, we recorded approximately $0.1 million of loss and during the years to date ended September 30, 2024 and 2023, we recorded less than ten thousand dollars of loss and approximately $0.1 million of loss, respectively, related to our equity affiliate within miscellaneous (expense) income on our unaudited condensed consolidated statements of income.


	Maintenance Fee Payments
For the quarter ended March 31, 2025	$	428
For the quarter ended March 31, 2024	$	444

~~We make periodic operating maintenance payments to our equity affiliate~~6. ~~The~~REVENUE ~~total fees recorded during the quarters and years to date ended September 30, 2024 and 2023 were as follows (dollars in thousands):~~RECOGNITION

	Maintenance Fee Payments
For the quarter ended September 30, 2024	$	429
For the quarter ended September 30, 2023	$	411
For the year to date ended September 30, 2024	$	1,296
For the year to date ended September 30, 2023	$	1,256

Credit Agreement

Termination of credit agreement

On July 29, 2024, the Company gave notice of the termination of its credit agreement, dated as of September 8, 2021, as amended (the “Credit Agreement”), by and among the Company, as borrower, certain of its subsidiary guarantors thereunder, the lenders from time-to-time parties thereto and Wintrust Bank N.A. (the “Termination”).

At the time of the Termination of the Credit Agreement, the Company was not in default under the Credit Agreement, nor did it have any amounts outstanding thereunder. The Credit Agreement was due to mature on January 31, 2027. The Company made the decision to terminate the Credit Agreement due to the Company’s strong cash position and to avoid uncertainty under the Credit Agreement associated with newly effective Title IV financial responsibility requirements.

The Termination was effective on July 30, 2024. Upon effectiveness of the Termination, all security interests and pledges granted to the secured parties under the Credit Agreement were terminated and released. The Company did not incur any material early termination penalties in connection with the Termination.

5. REVENUE RECOGNITION

Disaggregation of Revenue

The following tables disaggregate our revenue by major source for the quarters ~~and years to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 (dollars in thousands):


	For the Quarter Ended March 31, 2025										For the Quarter Ended March 31, 2024
	CTU		AIUS		USAHS (3)		Corporate and Other		Total		CTU		AIUS		USAHS (3)		Corporate and Other		Total
Tuition, net (1)	$	113,658	$	51,492	$	37,164	$	-	$	202,314	$	107,440	$	51,829	$	-	$	-	$	159,269
Technology and other fees		5,179		2,338		2,017		-		9,534		5,340		2,389		-		-		7,729
Total tuition and fees, net		118,837		53,830		39,181		-		211,848		112,780		54,218		-		-		166,998
Other revenue (2)		742		229		2		183		1,156		789		287		-		190		1,266
Total revenue	$	119,579	$	54,059	$	39,183	$	183	$	213,004	$	113,569	$	54,505	$	-	$	190	$	168,264

	For the Quarter Ended September 30, 2024								For the Quarter Ended September 30, 2023
	CTU		AIUS		Corporate and Other		Total		CTU		AIUS		Corporate and Other		Total
Tuition, net (1)	$	109,730	$	51,174	$	-	$	160,904	$	114,104	$	56,212	$	-	$	170,316
Technology and other fees		5,107		2,431		-		7,538		5,269		2,674		-		7,943
Total tuition and fees, net		114,837		53,605		-		168,442		119,373		58,886		-		178,259
Other revenue (2)		905		282		199		1,386		1,179		340		145		1,664
Total revenue	$	115,742	$	53,887	$	199	$	169,828	$	120,552	$	59,226	$	145	$	179,923
	For the Year to Date Ended September 30, 2024								For the Year to Date Ended September 30, 2023
	CTU		AIUS		Corporate and Other		Total		CTU		AIUS		Corporate and Other		Total
Tuition, net (1)	$	324,148	$	153,969	$	-	$	478,117	$	344,966	$	185,993	$	-	$	530,959
Technology and other fees		15,445		7,282		-		22,727		16,112		9,027		-		25,139
Total tuition and fees, net		339,593		161,251		-		500,844		361,078		195,020		-		556,098
Other revenue (2)		2,546		863		579		3,988		3,258		2,108		621		5,987
Total revenue	$	342,139	$	162,114	$	579	$	504,832	$	364,336	$	197,128	$	621	$	562,085

__________________

(1)

Tuition includes revenue earned for all degree-granting programs as well as revenue earned for non-degree and professional development programs.

(2)

Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.

(3)

USAHS includes revenue beginning on the acquisition date of December 2, 2024.

Performance Obligations

Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities and are reflected net of scholarships and tuition discounts. Our universities charge tuition and fees at varying amounts, ~~depending on the university, the type of program~~ and ~~specific curriculum. Our universities~~ bill students a single charge that covers tuition, certain fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term for our degree programs and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed separately to students. These fees are generally earned over the applicable term and are not considered separate performance obligations. We generally bill student tuition upon enrollment for our non-degree professional development programs and recognize the tuition as revenue on a straight-line basis over the length of the offering.

Other revenue, which primarily consists of contract training revenue and miscellaneous non-student related revenue, is billed and recognized as goods are delivered or services are performed.

Contract Assets

For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our condensed consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our condensed consolidated balance sheets. For certain of our institutions, students are billed as they enroll in courses, including courses related to future periods. Any billings for future periods would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the course has not yet started. Contract assets related to future periods are offset against the respective deferred revenue associated with the future period.

Due to the short-term nature of our academic terms, the contract asset balance which exists at the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future periods. The decrease in contract asset balances are a result of one of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their previously billed amount. As of the end of each quarter, a new contract asset is determined on a student by student basis based on the

~~most~~institutions, ~~recently~~students ~~started~~are ~~term~~billed ~~and~~as athey ~~student’s~~enroll ~~progress~~in ~~within~~courses, ~~that~~including ~~term~~courses asrelated ~~compared~~ to ~~the~~future ~~date~~periods. atAny ~~which~~billings ~~the~~for ~~student~~future isperiods nowould ~~longer~~meet ~~entitled~~the todefinition of a ~~refund~~contract ~~under~~asset ~~each~~as ~~institution’s~~we ~~refund~~do ~~policy.~~not ~~Contract~~have ~~assets~~the ~~associated~~unconditional ~~with~~right ~~future~~to ~~periods~~receive ~~remain~~payment as ~~contract~~the ~~assets~~course ~~until~~has ~~the~~not ~~course~~yet ~~begins~~started. ~~and~~Contract ~~the~~assets ~~student~~related ~~reaches~~to ~~the~~future ~~point~~periods inare ~~that~~offset ~~course~~against ~~that~~the ~~they~~respective ~~are~~deferred norevenue ~~longer~~associated ~~entitled~~with tothe afuture ~~refund~~period.

~~The~~Due ~~amount~~to the short-term nature of ~~deferred~~our ~~revenue~~academic ~~balances~~terms, the contract asset balance which ~~are~~exists ~~being~~at ~~offset~~the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future periods. The decrease in contract asset balances asare a result of ~~September~~one 30of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their previously billed amount. As of the end of each quarter, ~~2024~~a new contract asset is determined on a student by student basis based on the most recently started term and ~~December~~a ~~31,~~student’s ~~2023~~progress ~~were~~within that term as ~~follows~~compared ~~(dollars~~to the date at which the student is no longer entitled to a refund under each institution’s refund policy. Contract assets associated with future periods remain as contract assets until the course begins and the student reaches the point in ~~thousands):~~that course that they are no longer entitled to a refund.

	As of
	September 30, 2024			December 31, 2023
Gross deferred revenue	$	82,207		$	63,970
Gross contract assets		(32,860	)		(26,755	)
Deferred revenue, net	$	49,347		$	37,215

The amount of deferred revenue balances which are being offset with contract assets balances as of March 31, 2025 and December 31, 2024 were as follows (dollars in thousands):


	As of
	March 31, 2025			December 31, 2024
Gross deferred revenue	$	141,491		$	61,291
Gross contract assets		(78,644	)		(24,551	)
Deferred revenue, net	$	62,847		$	36,740

Deferred Revenue

Changes in our deferred revenue balances for the quarters ~~and years to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were as follows (dollars in thousands):

	For the Quarter Ended September 30, 2024									For the Quarter Ended September 30, 2023
	For the Quarter Ended March 31, 2025												For the Quarter Ended March 31, 2024
	CTU			AIUS			~~Total~~USAHS (2)			~~CTU~~Total			~~AIUS~~CTU			~~Total~~AIUS			USAHS (2)		Total
Gross deferred revenue, July 1	$	67,880		$	22,905		$	90,785		$	72,702		$	32,001		$	104,703
Gross deferred revenue, January 1	$	40,082		$	19,641		$	1,568		$	61,291		$	42,531		$	21,439		$	-	$	63,970
Revenue earned from prior balances		(5732,~~850~~869	)		(1816,~~951~~691	)		(~~76,801~~863	)		(5950,~~047~~423	)		(2535,~~736~~052	)		(8417,~~783~~695	)		-		(52,747	)
Billings during period(1)		~~100~~178,~~352~~628			5962,~~775~~472			~~160~~52,~~127~~387			95293,~~064~~487			59152,~~427~~877			~~154~~69,~~491~~777			-		222,654
Revenue earned for new billings during the period		(5685,~~987~~968	)		(3437,~~654~~139	)		(9138,~~641~~318	)		(60161,~~326~~425	)		(3377,~~150~~728	)		(9336,~~476~~523	)		-		(114,251	)
Other adjustments		(~~162~~1,032	)		~~(101~~65	)		(~~263~~472	)		(1,~~283~~439	)		(~~912~~308	)		(~~2,195~~379	)		-		(687	)
Gross deferred revenue, September 30	$	53,233		$	28,974		$	82,207		$	47,110		$	31,630		$	78,740
Gross deferred revenue, March 31	$	98,841		$	28,348		$	14,302		$	141,491		$	82,320		$	36,619		$	-	$	118,939
	For the Year to Date Ended September 30, 2024									For the Year to Date Ended September 30, 2023
	CTU			AIUS			Total			CTU			AIUS			Total
Gross deferred revenue, January 1	$	42,531		$	21,439		$	63,970		$	67,245		$	39,955		$	107,200
Revenue earned from prior balances		(38,122	)		(20,431	)		(58,553	)		(59,458	)		(33,166	)		(92,624	)
Billings during period(1)		350,694			168,574			519,268			343,194			186,877			530,071
Revenue earned for new billings during the period		(301,471	)		(140,820	)		(442,291	)		(301,620	)		(161,854	)		(463,474	)
Other adjustments		(399	)		212			(187	)		(2,251	)		(182	)		(2,433	)
Gross deferred revenue, September 30	$	53,233		$	28,974		$	82,207		$	47,110		$	31,630		$	78,740

______________

(1)

Billings during period includes adjustments for prior billings.

(2)

USAHS includes deferred revenue starting from the acquisition date on December 2, 2024.

Tuition Refunds

If a student withdraws from one of our academic institutions prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Generally, the amount to be refunded to a student is calculated based upon the percent of the term attended and the amount of tuition and fees paid by the student as of their withdrawal date. In certain circumstances, we have recognized revenue for students who have withdrawn that we are not entitled to retain. We have estimated a reserve for these limited circumstances based on historical evidence in the amount of $2.02 million ~~for~~and ~~each~~$2.1 ~~period~~million as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024, respectively. Students are typically entitled to a partial refund until approximately a little more than halfway through their term. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date.

6. STUDENT RECEIVABLES

Student receivables represent funds owed to us in exchange for the educational services provided to a student. Student receivables are reflected net of an allowance for credit losses at the end of the reporting period. Student receivables, net, are reflected on our condensed consolidated balance sheets as components of both current and non-current assets.

Our students pay for their costs through a variety of funding sources, including federal loan and grant programs, institutional payment plans, employer tuition assistance, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments, as well as private loans7. ~~Cash~~STUDENT receipts from government related sources are typically received during the current academic term. We typically receive funds after the end of an academic term for students who receive employer tuition assistance. Students who have not applied for any type of financial aid or students whose financial aid may not fully cover the cost of their tuition and fees generally set up a payment plan with the institution and make payments on a monthly basis per the terms of the payment plan. For those balances that are not received during the academic term, the balance is typically due within the current academic year which is approximately 30 weeks in length. Generally, a student receivable balance is written off once a student is out of school and it reaches greater than 90 days past due.RECEIVABLES

~~Our~~Student ~~standard~~receivables ~~student~~represent ~~receivable~~funds ~~allowance~~owed isto ~~based~~us onin anexchange ~~estimate of lifetime expected credit losses~~ for ~~student~~the ~~receivables.~~educational ~~Our~~services ~~estimation~~provided ~~methodology~~to ~~considers~~ a ~~number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect~~ student ~~receivables~~. ~~Changes~~Student inreceivables ~~the~~are ~~trends~~reflected innet ~~any~~ of ~~these~~an ~~factors may impact our estimate of the~~ allowance for credit losses. ~~These~~at ~~factors include, but are not limited to: internal repayment history, changes in~~ the ~~current~~end ~~economic,~~of ~~legislative or regulatory environments, internal cash collection forecasts and~~ the ~~ability~~reporting ~~to complete the federal financial aid process with the student~~period. ~~These~~Student ~~factors~~receivables, net, are ~~monitored~~reflected ~~and assessed~~ on ~~a regular basis. Overall,~~ our ~~allowance~~condensed ~~estimation~~consolidated ~~process~~balance ~~for~~sheets ~~student~~as ~~receivables~~components isof ~~validated~~both bycurrent ~~trend analysis~~ and ~~comparing~~non-current ~~estimated and actual performance~~assets.

WeOur ~~have~~students anpay ~~immaterial~~for ~~amount~~their costs through a variety of ~~student~~funding ~~receivables~~sources, ~~that~~including ~~are~~federal ~~due~~loan ~~greater~~and ~~than~~grant 12programs, ~~months~~institutional payment plans, employer tuition assistance, Veterans’ Administration and other military funding and grants, private and institutional scholarships and cash payments, as well as private loans. Cash receipts from government related sources are typically received during the ~~date~~current academic term. We typically receive funds after the end of ~~our~~an ~~condensed~~academic ~~consolidated~~term ~~balance~~for ~~sheets~~students who receive employer tuition assistance. AsStudents who have not applied for any type of ~~September~~financial ~~30,~~aid ~~2024~~or ~~and~~students ~~December~~whose ~~31,~~financial ~~2023,~~aid may not fully cover the ~~amount~~cost of ~~non-current~~their ~~student~~tuition ~~receivables~~and ~~under~~fees generally set up a payment ~~plans~~plan with the institution and make payments on a monthly basis per the terms of the payment plan. For those balances that are ~~longer~~not ~~than~~received 12during ~~months~~the academic term, the balance is typically due within the current academic year which is approximately 30 weeks in ~~duration~~length. Generally, ~~net~~a student receivable balance is written off once a student has been out of ~~allowance~~school for ~~credit~~greater ~~losses,~~than ~~was~~90 ~~$5.9~~days ~~million~~ and ~~$3.9~~has ~~million,~~not ~~respectively~~made a payment.

Our standard student receivable allowance is based on an estimate of lifetime expected credit losses for student receivables. Our estimation methodology considers a number of quantitative and qualitative factors that, based on our collection experience, we believe have an impact on our repayment risk and ability to collect student receivables. Changes in the trends in any of these factors may impact our estimate of the allowance for credit losses. These factors include, but are not limited to: internal repayment history, changes in the current economic, legislative or regulatory environments, internal cash collection forecasts and the ability to complete the federal financial aid process with the student. These factors are monitored and assessed on a regular basis. Overall, our allowance estimation process for student receivables is validated by trend analysis of our collections and write-off experience as well as monitoring any emerging factors that we believe impact the ability to collect our student receivables.

We have an immaterial amount of student receivables that are due greater than 12 months from the date of our condensed consolidated balance sheets. As of March 31, 2025 and December 31, 2024, the amount of non-current student receivables under payment plans that are longer than 12 months in duration, net of allowance for credit losses, was $5.1 million and $6.2 million, respectively.

Allowance for Credit Losses

We define student receivables as a portfolio segment under ASC Topic 326 – Financial Instruments – Credit Losses. Changes in our current and non-current allowance for credit losses related to our student receivable portfolio in accordance with the guidance under ASU 2016-13 for the quarters ~~and years to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were as follows (dollars in thousands):

For the Quarter Ended September 30,

For the Year to Date Ended September 30,

For the Quarter Ended March 31,

2024

2023

2024

2023

2025

2024

Balance, beginning of period

3743,~~271~~520

4337,~~055~~782

~~37,782~~

~~43,141~~

Provision for credit losses

87,~~733~~558

76,~~592~~556

~~21,364~~

~~26,519~~

Amounts written-off

(8,~~032~~651

)

(116,~~397~~232

)

~~(22,085~~

)

~~(31,533~~

)

Recoveries

~~361~~439

~~458~~448

~~1,272~~

~~1,581~~

Balance, end of period

3842,~~333~~866

3938,~~708~~554

~~38,333~~

~~39,708~~

Fair Value Measurements

The carrying amount reported in our ~~condensed~~ consolidated balance sheets for the current portion of student receivables approximates fair value because of the nature of these financial instruments as they generally have short maturity periods. It is not practicable to estimate the fair value of the non-current portion of student receivables, since observable market data is not readily available, and no reasonable estimation methodology exists.

78. LEASES

We lease most of our administrative and educational facilities under non-cancelable operating or finance leases expiring at various dates through ~~2033~~2050. ~~Lease terms generally range from five to ten years with one to four renewal options for extended terms.~~ In most cases, we are required to make additional payments under facility ~~operating~~ leases for taxes, insurance and other operating expenses incurred during the ~~operating~~ lease period, which are typically variable in nature.

We determine if a contract contains a lease when the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Upon identification and commencement of a lease, we establish a right of use (“ROU”) asset and a lease liability.

Quantitative information related to leases is presented in the following table (dollars in thousands):

	For the Quarter Ended September 30, 2024			For the Year to Date Ended September 30, 2024
Lease expenses (1)
Fixed lease expenses - operating	$	1,104		$	3,670
Variable lease expenses - operating		207			544
Total lease expenses	$	1,311		$	4,214
Other information
Gross operating cash flows for operating leases (2)	$	(2,031	)	$	(6,513	)
	For the Quarter Ended September 30, 2023			For the Year to Date Ended September 30, 2023
Lease expenses (1)
Fixed lease expenses - operating	$	1,572		$	4,906
Variable lease expenses - operating		193			1,154
Sublease income (3)		-			(500	)
Total lease expenses	$	1,765		$	5,560
Other information
Gross operating cash flows for operating leases (2)	$	(2,139	)	$	(7,722	)
Operating cash flows from subleases (2)	$	-		$	488
	As of September 30, 2024			As of September 30, 2023
Weighted average remaining lease term (in months) – operating leases		68			57
Weighted average discount rate – operating leases		5.2	%		4.8	%

Quantitative information related to leases for the quarters ended March 31, 2025 and 2024 is presented in the following table (dollars in thousands):


	For the Quarter Ended March 31, 2025			For the Quarter Ended March 31, 2024
Lease expenses (1)
Operating fixed lease expenses	$	2,613		$	1,444
Finance lease and failed sale leaseback amortization expense		1,573			-
Finance lease and failed sale leaseback interest expense		1,572			-
Variable lease expenses		1,118			58
Sublease income (2)		(77	)		-
Total lease expenses	$	6,799		$	1,502

Other information
Gross operating cash flows for operating leases (3)	$	(3,913	)	$	(2,466	)
Gross operating cash flows for finance leases and failed sale leasebacks		(1,415	)		-
Gross financing cash flows for finance leases		(1,207	)		-
Gross financing cash flows for failed sale leaseback		(489	)
Operating cash flows from subleases (3)		77			-
	As of March 31, 2025			As of March 31, 2024
Weighted average remaining lease term (in months) – operating leases		90			53
Weighted average remaining lease term (in months) – finance leases		34			-

Weighted average discount rate – operating leases		6.2	%		4.9	%
Weighted average discount rate– finance leases		5.9	%		-

__________________

(1)

Lease expense and sublease income represent the amount recorded within our consolidated statements of income. Variable lease amounts represent expenses recognized as incurred which are not included in the lease liability. ~~Fixed lease expenses and sublease income are recorded on a straight-line basis over the lease term and therefore are not necessarily representative of cash payments during the same period.~~

(2)

For certain of our leased locations, we have vacated the facility and have fully or partially subleased the space.

(3)

Cash flows are presented on a consolidated basis and represent cash payments for fixed and variable lease costs.

~~Historically,~~Failed ~~for certain of our leased locations we had vacated the facility and had fully or partially subleased the space. As of September 30, 2024, we no longer have any subleased locations.~~Sale-Leaseback

8Upon construction commencement of the new St. ~~CONTINGENCIES~~Augustine campus in April 2023, the Company determined that it was the deemed owner for accounting purposes during the construction period under a build to suit (“BTS”) arrangement due to the extent of the Company’s involvement in the project. Accordingly, the Company had recognized all cash and non-cash assets contributed by the landlord to the project as of December 31, 2024 as a component of construction in progress with a corresponding construction financing liability. As of December 31, 2024, the Company had recognized $56.5 million in construction contributions made by the landlord as construction financing on the consolidated balance sheet. Lease commencement began in January 2025 upon substantial completion of the BTS arrangement with a stated lease term of 25 years from commencement date.

AnUpon ~~accrual~~lease ~~for~~commencement, ~~estimated~~the ~~legal~~Company ~~fees~~determined ofthat ~~$1.9~~it ~~million~~did ~~and~~not ~~$2.4~~meet ~~million~~the atcriteria ~~September~~under ASC 606-10-25-30, ~~2024~~to derecognize the asset as the Company retained control of the asset and ~~December~~the ~~31,~~risks ~~2023,~~and ~~respectively,~~rewards of ownership did not transfer to the landlord. As such the transaction is ~~presented~~considered ~~within~~a ~~other~~failed ~~current~~sale ~~liabilities~~leaseback and the Company will retain the asset on ~~our~~its condensed consolidated balance ~~sheets~~sheet and depreciate the asset over its useful life. A financing obligation liability was recognized in the amount of the net proceeds received in the amount of $56.5 million. The Company will not recognize rent expense related to the leased asset. Instead, monthly rent payments under the lease agreement will be recorded as interest expense and a reduction of the outstanding liability.

WeFuture ~~record~~minimum alease ~~liability~~payments ~~when~~for wesale-leaseback ~~believe~~financing ~~that~~transactions it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued and make adjustments as further information develops, circumstances change or contingencies are resolved. Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of ~~possible~~March ~~loss due to various reasons~~31, ~~including,~~2025 ~~among others: (1) if the damages sought~~ are ~~indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty~~ as to the outcome of pending appeals, motions or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any.follows:

previously received a Civil Investigative Demand ("CID") on April 8, 2022 from the DOJ and had been cooperating with the DOJ in its review. After the federal government declined to intervene in this case, the relator elected to pursue the litigation on behalf of the federal government. If she is successful, she would receive a portion of the federal government’s recovery. The amended complaint alleges violations of the False Claims Act related to the company’s compliance with federal financial aid credit hour requirements in connection with its use of its learning management system. Relator claims that defendants’ conduct caused the government to make payments of federal funds to defendants which the government would not have made if not for defendants’ alleged violation of the law. Relator seeks treble damages plus civil penalties and attorneys’ fees. On January 4, 2024, the Court granted a motion to dismiss with respect to Perdoceo Education Corporation and American InterContinental University, Inc. which removes them as defendants in the case. The Court’s dismissal was “without prejudice”, which allows the relator in the case the opportunity to amend and refile a further amended complaint with respect to those two parties. The Relator has filed a motion, which is pending before the Court, that seeks permission to file a further amended complaint with respect to only Perdoceo Education Corporation.


	Sale Leaseback Payments


2025 (1)	$	3,708
2026		5,043
2027		5,143
2028		5,246
2029		5,351
2030 and thereafter		133,284
Total minimum lease payments	$	157,775

Less – Amount representing interest		(114,900	)
Present value of minimum lease payments		42,875
Plus - liability remaining at term end representing residual value of asset		13,782
Failed sale leaseback liability		56,657

__________________

(1)

Liabilities remaining for the year ending December 31, 2025.

9. CONTINGENCIES

An accrual for estimated legal fees and settlements of $1.3 million and $1.2 million at March 31, 2025 and December 31, 2024, respectively, is presented within other current liabilities on our condensed consolidated balance sheets.

We record a liability when we believe that it is both probable that a loss will be incurred and the amount of loss can be reasonably estimated. We evaluate, at least quarterly, developments in our legal matters that could affect the amount of liability that was previously accrued and make adjustments as further information develops, circumstances change or contingencies are resolved. Significant judgment is required to determine both probability and the estimated amount. We may be unable to estimate a possible loss or range of possible loss due to various reasons, including, among others: (1) if the damages sought are indeterminate; (2) if the proceedings are in early stages; (3) if there is uncertainty as to the outcome of pending appeals, motions or settlements; (4) if there are significant factual issues to be determined or resolved; and (5) if there are novel or unsettled legal theories presented. In such instances, there is considerable uncertainty regarding the ultimate resolution of such matters, including a possible eventual loss, if any.

United States of America, ex rel. Fiorisce LLC v. Perdoceo Education Corporation, Colorado Technical University, Inc. and American InterContinental University, Inc. On July 19, 2023, we became aware of an amended complaint filed in the U.S. District Court for the District of Colorado on May 19, 2023. The original complaint was filed under seal on February 25, 2021 by a former employee of Colorado Technical University through a limited liability company, on behalf of herself, any other interested parties affiliated with the LLC and the federal government. On July 18, 2023, the district court ordered the complaint unsealed and we were notified that the U.S. Department of Justice ("DOJ") had declined to intervene in the action on February 3, 2023. The company had previously received a Civil Investigative Demand ("CID") on April 8, 2022 from the DOJ and had been cooperating with the DOJ in its review. After the federal government declined to intervene in this case, the relator elected to pursue the litigation on behalf of the federal government. If she is successful, she would receive a portion of the federal government’s recovery. The amended complaint alleges violations of the False Claims Act related to the company’s compliance with federal financial aid credit hour requirements in connection with its use of its learning management system. Relator claims that defendants’ conduct caused the government to make payments of federal funds to defendants which the government would not have made if not for defendants’ alleged violation of the law. Relator seeks treble damages plus civil penalties and attorneys’ fees. On January 4, 2024, the Court granted a motion to dismiss with respect to Perdoceo Education Corporation and American InterContinental University, Inc. which removes them as defendants in the case. The Court’s dismissal was “without prejudice”, which allows the relator in the case the opportunity to amend and refile a further amended complaint with respect to those two parties. The Relator has filed a motion, which is pending before the Court, that seeks permission to file a further amended complaint with respect to only Perdoceo Education Corporation.

On September 7, 2024, the Company received a new CID from the DOJ pursuant to the False Claims Act. The CID requests information and documentation from CTU regarding its compensation practices for its admissions staff as well as information about how CTU has discussed its Fast Track credit program with prospective students. The information sought covers the time period from November 13, 2017 to the present. The Company is cooperating with the DOJ with a view towards resolving this inquiry as promptly as possible.

Because of the many questions of fact and law that may arise, the outcomes of these legal proceedings is uncertain at this point. Based on information available to us at present, we cannot reasonably estimate a range of potential loss, if any, for these actions. Accordingly, we have not recognized any liability associated with these actions.

We receive from time-to-time requests from state attorneys general, federal and state government agencies and accreditors relating to our institutions, to specific complaints they have received from students or former students or to student loan forgiveness claims which seek information about students, our programs, and other matters relating to our activities. These requests can be broad and time consuming to respond to, and there is a risk that they could expand and/or lead to a formal action or claims of non-compliance. We are subject to a variety of other claims, lawsuits, arbitrations and investigations that arise from time to time out of the conduct of our business, including, but not limited to, matters involving prospective students, students or former students, alleged violations of the Telephone Consumer Protection Act, both individually and on behalf of a putative class, and employment matters. Periodically matters arise that we consider outside the scope of ordinary routine litigation incidental to our business. While we currently believe that these matters, individually or in aggregate, will not have a material adverse impact on our financial position, cash flows or results of operations, these matters are subject to inherent uncertainties, and management’s view of these matters may change in the future. Were an unfavorable outcome to occur in any one or more of these matters, there exists the possibility of a material adverse impact on our business, reputation, financial position and cash flows.

Agreement to acquire the University of St. Augustine for Health Sciences, LLC

Perdoceo Education Corporation signed a definitive agreement to acquire 100% ownership of the University of St. Augustine for Health Sciences, LLC ("USAHS"). The material terms of the transaction have been described in the Company’s Form 8-K filed with the Securities and Exchange Commission on July 16, 2024. Completion of the acquisition is subject to customary closing conditions and satisfactory regulatory approvals from the Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges ("WASC"), as well as other key regulatory bodies, and completion of the preacquisition review process with the US Department of Education. The Company expects to complete the acquisition in December 2024.

Perdoceo expects to pay approximately $142.0 million to $144.0 million in cash at closing to acquire 100% ownership of USAHS. The actual cash paid will depend on adjustments for cash, debt and working capital based on the final closing balance sheet. The acquisition is not subject to a financing condition. Perdoceo plans to use cash on hand for the purchase.

9. INCOME TAXES

The determination of the annual effective tax rate is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which we operate and the ongoing development of tax planning strategies during the year. In addition, our provision for income taxes can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on information available to us at present, we cannot reasonably estimate a range of potential loss, if any, for this action. Accordingly, we have not recognized any liability associated with this action.

10. INCOME TAXES

The determination of the annual effective tax is based upon a number of significant estimates and judgments, including the estimated annual pretax income in each tax jurisdiction in which we operate and the ongoing development of tax planning strategies during the year. In addition, our provision for income taxes can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.

The following is a summary of our provision for income taxes and effective tax rate:

	For the Quarter Ended September 30,						For the Year to Date Ended September 30,
	For the Quarter Ended March 31,
(Dollars in Thousands)	~~2024~~2025			~~2023~~2024			~~2024~~			~~2023~~
Pretax income	$	5256,~~362~~505		$	4852,~~088~~851		$	~~158,227~~		$	~~169,744~~
Provision for income taxes	$	1412,~~107~~817		$	613,~~781~~409		$	~~42,101~~		$	~~39,280~~
Effective rate		2622.97	%		1425.14	%		~~26.6~~	%		~~23.1~~	%

The effective tax rate for the quarter ~~and year to date~~ ended ~~September~~March 3031, ~~2024~~2025 ~~reflects~~was ~~federal~~benefitted ~~tax credits claimed for the 2023 tax return, which decreased the effective tax rate for the quarter and year to date~~ by ~~0.4% and 0.1%, respectively. Additionally,~~ the tax effect of stock-based compensation and the release of previously recorded tax reserves, which reduced the effective tax rate ~~for the quarter and year to date ended September 30, 2024~~ by 05.25% and 1.43%, respectively. The effective tax rate for the quarter ~~and year to date~~ ended ~~September~~March 3031, ~~2023~~2024 was ~~primarily~~ impacted by ~~a $4.5 million favorable discrete adjustment related to~~ the ~~recognition of the~~ tax benefits associated with a previously disclosed prior year ordinary loss attributable to the stock of a worthless subsidiary, which decreased the effective tax rate for the quarter and year to date by 9.3% and 2.6%, respectively. The effective tax rate for the quarter and year to date ended September 30, 2023 reflects federal and state tax credits claimed for the 2022 tax return, which decreased the effective tax rate for the quarter and year to date by 0.6% and 0.2%, respectively. Additionally, the tax effect of stock-based compensation and the release of ~~other~~ previously recorded tax reserves, which reduced the effective tax rate ~~for the quarter and year to date ended September 30, 2023~~ by 01.2% and 01.63%, respectively. As of ~~September~~March 3031, ~~2024~~2025, a valuation allowance of $1312.90 million was maintained with respect to our equity investment and state net operating losses.

We estimate that it is reasonably possible that the gross liability for unrecognized tax benefits for a variety of uncertain tax positions will decrease by up to $2.1 million in the next twelve months as a result of the expiration of the statute of limitations in several jurisdictions. The income tax rate for the quarter ~~and year to date~~ ended ~~September~~March 3031, ~~2024~~2025 does not take into account the possible future reduction of the liability for unrecognized tax benefits. The impact of a reduction to the liability will be treated as a discrete item in the period the reduction occurs. We recognize interest and penalties related to unrecognized tax benefits in tax expense. As of ~~September~~March 3031, ~~2024~~2025, we had accrued $4.36 million as an estimate for reasonably possible interest and accrued penalties.

Our tax returns are routinely examined by federal, state and local tax authorities and these audits are at various stages of completion at any given time. The Company’s federal income tax filings are open to examinations for the tax years ended December 31, 2021 and forward.

1011. SHARE-BASED COMPENSATION

Overview

The Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan (the “2016 Plan”) became effective (as the Career Education Corporation 2016 Incentive Compensation Plan) on May 24, 2016, and the amendment and restatement of the 2016 Plan became effective on June 3, 2021, upon its approval by the Company’s stockholders. Under the 2016 Plan, Perdoceo may grant to eligible participants awards of stock options, stock appreciation rights, restricted stock, restricted stock units, deferred stock, performance units, annual incentive awards, and substitute awards, which generally may be settled in cash or shares of our common stock. The vesting of all types of awards is subject to possible acceleration in certain circumstances. If a plan ~~participant terminates employment for any reason other than by death or disability during the vesting period, the right to unvested awards is generally forfeited.~~

Restricted Stock Units

For the years to date ended September 30, 2024 and 2023, the Company granted approximately 0.3 million and 0.4 million restricted stock units, respectively, which are not "performance-based" and which have a grant-date fair value of approximately $5.3 million and $5.9 million, respectively.

For the years to date ended September 30, 2024 and 2023, the Company granted approximately 0.2 million and 0.3 million restricted stock units, respectively, which are “performance-based” and which have a grant-date fair value of approximately $3.5 million and $4.1 million, respectively. The performance-based restricted stock units are subject to performance conditions which are determined at the time of grant and typically cover a three-year performance period. These performance conditions may result in all units being forfeited even if the requisite service period is met.

There were no restricted stock units granted during each of the quarters ended September 30, 2024 and 2023.

All restricted stock units granted in 2024 and 2023 are to be settled in shares of our common stock.

participant terminates employment for any reason other than by death or disability during the vesting period, the right to unvested awards is generally forfeited.

Restricted Stock Units

For each of the quarters ended March 31, 2025 and 2024, the Company granted approximately 0.2 million restricted stock units, which are not "performance-based," with a grant-date fair value of approximately $5.2 million and $4.3 million, respectively.

Additionally, for each of the quarters ended March 31, 2025 and 2024, the Company granted approximately 0.2 million “performance-based" restricted stock units, with a grant-date fair value of approximately $3.8 million and $3.5 million, respectively. The performance-based restricted stock units are subject to performance conditions which are determined at the time of grant and typically cover a three-year performance period. These performance conditions may result in all units being forfeited even if the requisite service period is met.

All restricted stock units granted in 2025 and 2024 are to be settled in shares of our common stock.

Stock Options

There were no stock options granted during each of the quarters ~~or years to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024.

Share-Based Compensation Expense

~~For~~Total ~~the quarters ended September 30, 2024 and 2023, the total~~ share-based compensation expense ~~was~~for ~~approximately $2.8 million and $2.3 million, respectively. For~~ the ~~years~~quarters ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, ~~the total share-based compensation expense~~ was ~~approximately~~ $72.49 million and $62.63 million, respectively.

As of ~~September~~March 3031, ~~2024~~2025, we estimate that total compensation expense of approximately $1922.02 million will be recognized over the next four years for all unvested share-based awards that have been granted to participants. This amount excludes any estimates of forfeitures.

1112. STOCK REPURCHASE PROGRAM

The timing of purchases and the number of shares repurchased under the program ~~will~~is be determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, its assessment of alternative uses of capital, regulatory requirements and other factors. Repurchases will be made in open market transactions, including block purchases, conducted in accordance with Rule 10b-18 under the Exchange Act as well as may be made pursuant to trading plans established under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The stock repurchase program does not obligate the Company to purchase shares and the Company may, in its discretion, begin, suspend or terminate repurchases at any time, without any prior notice.

During the ~~years~~quarter ~~to date~~ ended ~~September~~March 3031, ~~2024 and 2023~~2025, we repurchased approximately 01.~~4 million shares and~~ 0.2 million shares of our common stock, ~~respectively,~~ for approximately $625.82 million at an average price of $1725.6058 per share. ~~during~~During the ~~year~~quarter ~~to date~~ ended ~~September~~March 3031, 2024, ~~and~~the Company repurchased approximately 0.4 million shares of our common stock for approximately $26.78 million at an average price of $1217.3560 per share, ~~during~~including ~~the~~approximately ~~year~~0.2 tomillion ~~date~~shares ~~ended~~of ~~September~~our ~~30,~~common ~~2023.~~stock ~~There~~purchased ~~were~~for noapproximately ~~shares~~$3.9 ~~repurchased~~million ~~during~~under the ~~quarters~~previous ~~ended~~stock ~~September~~repurchase ~~30, 2024 and 2023~~program.

As of ~~September~~March 3031, ~~2024~~2025, approximately $4721.19 million was available under our authorized stock repurchase program to repurchase outstanding shares of our common stock. Shares of stock repurchased under the program are held as treasury shares. These repurchased shares ~~have~~ reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

1213. WEIGHTED AVERAGE COMMON SHARES

Basic net income per share is calculated by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average number of shares assuming dilution. Dilutive common shares outstanding is computed using the Treasury Stock Method and reflects the additional shares that ~~would be outstanding if dilutive stock options were exercised and restricted stock units were settled for common shares during the period.~~

The weighted average number of common shares used to compute basic and diluted net income per share for the quarters and years to date ended September 30, 2024 and 2023 were as follows (shares in thousands):

	For the Quarter Ended September 30,				For the Year to Date Ended September 30,
	2024		2023		2024		2023
Basic common shares outstanding		65,699		65,634		65,622		66,758
Common stock equivalents		1,613		1,469		1,488		1,314
Diluted common shares outstanding		67,312		67,103		67,110		68,072

~~Certain unexercised stock option awards are excluded from our computations of diluted earnings per share, as these shares were out-of-the-money and their effect~~ would ~~have~~be ~~been~~outstanding ~~anti-dilutive.~~if ~~For each of the years to date ended September 30, 2024 and 2023, the anti-~~dilutive stock options ~~that~~ were ~~excluded~~exercised ~~from~~and ~~our~~restricted ~~computations~~stock ofunits ~~diluted earnings per share~~ were ~~less~~settled ~~than~~for ~~0.1~~common ~~million~~ shares. ~~For~~during the ~~quarter ended September 30, 2023 less than 0~~period.~~1 million shares of anti-dilutive options were excluded from our computation of diluted earnings per share. There were no anti-dilutive options for the quarter ended September 30, 2024.~~

~~13.~~The ~~SEGMENT~~weighted ~~REPORTING~~average number of common shares used to compute basic and diluted net income per share for the quarters ended March 31, 2025 and 2024 were as follows (shares in thousands):

Our segments are determined in accordance with FASB ASC Topic 280—Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment is comprised of an accredited postsecondary education institution that offers a variety of academic programs. As of September 30, 2024, our two segments are:


	For the Quarter Ended March 31,
	2025		2024
Basic common shares outstanding		65,680		65,555
Common stock equivalents		1,192		1,286
Diluted common shares outstanding		66,872		66,841

~~♦ Colorado~~Certain ~~Technical~~unexercised ~~University~~stock ~~(CTU)~~option isawards ~~committed~~are toexcluded ~~providing~~from ~~quality~~our ~~and~~computations ~~industry-relevant~~of ~~higher~~diluted ~~education~~earnings toper ~~a diverse student population~~share, ~~including~~as ~~serving~~these ~~non-traditional~~shares ~~adult~~were ~~learners seeking career advancement and~~ out-of-the-money ~~military community. CTU utilizes innovative technology~~ and ~~experienced~~their ~~faculty,~~effect ~~enabling~~would ~~the~~have ~~pursuit~~been ~~of personal and professional goals for learners~~anti-dilutive. ~~CTU~~There ~~offers~~were ~~academic~~no ~~programs in the career~~anti-~~oriented~~dilutive ~~disciplines~~options offor ~~business~~the ~~and~~quarter ~~management,~~ended ~~nursing,~~March ~~healthcare management~~31, ~~computer~~2025. ~~science,~~For ~~engineering,~~the ~~information~~quarter ~~systems~~ended ~~and~~March ~~technology~~31, ~~project management~~2024, ~~cybersecurity~~less ~~and~~than ~~criminal justice~~0.1 ~~Students~~million ~~pursue their degrees through fully~~anti-~~online~~dilutive ~~programs,~~options ~~local~~were ~~campuses~~excluded ~~and~~from ~~blended formats, which combine campus-based and online education. As of September 30, 2024, students enrolled at CTU represented approximately 74% of~~ our ~~total~~diluted ~~enrollments.~~earnings ~~Approximately~~per ~~97%~~share ~~of CTU’s students are enrolled in programs offered fully online~~calculations. ~~Students at CTU's ground-based campuses take both in-person and virtual classes.~~

♦ The American InterContinental University System (AIUS or AIU System) is committed to providing quality and accessible higher education opportunities for a diverse student population, including non-traditional adult learners and the military community14. ~~AIUS~~SEGMENT places emphasis on the educational, professional and personal growth of each student. AIUS offers academic programs in the career-oriented disciplines of business studies, information technologies, education, health sciences and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of September 30, 2024, students enrolled at AIUS represented approximately 26% of our total enrollments. Approximately 97% of AIUS’ students are enrolled in programs offered fully online. Students at AIUS' ground-based campus take both in-person and virtual classes.REPORTING

~~Summary~~ ~~financial~~Our ~~information~~segments byare ~~reporting~~determined in accordance with FASB ASC Topic 280—Segment Reporting and are based on how the Company's chief operating decision maker ("CODM") evaluates performance and allocates resources. Perdoceo's CODM as defined under ASC Topic 280 is its President and Chief Executive Officer. Each segment is ascomprised ~~follows~~of ~~(dollars~~an inaccredited ~~thousands):~~postsecondary education institution that offers a variety of academic programs.

	For the Quarter Ended September 30,
	Revenue										Operating Income (Loss)
	2024		% of Total			2023		% of Total			2024			2023
CTU	$	115,742		68.2	%	$	120,552		67.0	%	$	44,199		$	34,491
AIUS		53,887		31.7	%		59,226		32.9	%		9,063			15,602
Corporate and Other		199		0.1	%		145		0.1	%		(8,468	)		(7,020	)
Total	$	169,828		100.0	%	$	179,923		100.0	%	$	44,794		$	43,073

As of March 31, 2025, our three reporting segments are:

•

	For the Year to Date Ended September 30,
	Revenue										Operating Income (Loss)
	2024		% of Total			2023		% of Total			2024			2023
CTU	$	342,139		67.8	%	$	364,336		64.8	%	$	129,245		$	118,632
AIUS		162,114		32.1	%		197,128		35.1	%		31,275			44,683
Corporate and Other		579		0.1	%		621		0.1	%		(23,442	)		(28,812	)
Total	$	504,832		100.0	%	$	562,085		100.0	%	$	137,078		$	134,503

Colorado Technical University (CTU) is committed to providing industry-relevant higher education to a diverse student population, including non-traditional adult learners seeking career advancement and the military community. CTU utilizes innovative technology and experienced faculty, enabling the pursuit of academic and professional goals for learners. CTU offers academic programs in the career-oriented disciplines of business and management, nursing, healthcare management, computer science, engineering, information systems and technology, project management, cybersecurity and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of March 31, 2025, students enrolled at CTU represented approximately 69% of our total enrollments. Approximately 98% of CTU’s students are enrolled in programs offered fully online. Students at CTU's ground-based campuses take both in-person and virtual classes.

•

	Total Assets as of (1)
	September 30, 2024		December 31, 2023
CTU	$	212,523	$	202,728
AIUS		171,940		161,336
Corporate and Other		732,293		643,252
Total	$	1,116,756	$	1,007,316

The American InterContinental University System (AIUS or AIU System) is committed to providing industry-relevant higher education opportunities for a diverse student population, including non-traditional adult learners and the military community. AIUS places emphasis on the educational, professional and academic growth of each student. AIUS offers academic programs in the career-oriented disciplines of business studies, information technologies, education, behavioral sciences and criminal justice. Students pursue their degrees through fully-online programs, local campuses and blended formats, which combine campus-based and online education. As of March 31, 2025, students enrolled at AIUS represented approximately 22% of our total enrollments. Approximately 97% of AIUS’ students are enrolled in programs offered fully online. Students at AIUS' ground-based campus take both in-person and virtual classes.

•

University of St. Augustine for Health Sciences (USAHS) is dedicated to offering graduate education opportunities in health sciences to a diverse range of students. USAHS focuses on developing professional healthcare practitioners through innovative and personalized classroom, clinical, and distance education opportunities. USAHS offers graduate degrees in health sciences, primarily in physical therapy, occupational therapy, speech-language therapy and nursing, along with continuing education programs and prepares professionals to serve and provide quality medical care to communities across the country. Students pursue their degrees through a network of campuses and through its online programs. As of March 31, 2025, students enrolled at USAHS represented approximately 9% of our total enrollments.

We evaluate segment performance based on operating results, specifically our CODM analyzes segment revenue and operating expenses which are directly attributable to the cost to serve and educate prospective students, when making decisions to allocate resources based on segment performance. Adjustments to reconcile segment results to consolidated results are included under the caption “Corporate and Other,” which primarily includes unallocated corporate activity. Substantially all revenue earned by our reporting segments are generated in the United States of America (“U.S.”) and segment and total assets are substantially held in the

~~Total~~U.S. ~~assets~~Additionally, ~~are~~interest, ~~presented~~net onand aother ~~condensed~~miscellaneous ~~consolidated~~(expense) ~~basis~~income ~~and~~are do not ~~include~~material ~~intercompany~~by ~~receivable~~segment orand ~~payable~~are ~~activity~~not ~~between~~reviewed ~~institutions~~by ~~and~~our ~~corporate~~CODM ~~and~~by ~~investments in subsidiaries~~segment.

Summary financial information by reporting segment is as follows (dollars in thousands):


	For the Quarter Ended March 31,
	Revenue										Operating Income (Loss)
	2025		% of Total			2024		% of Total			2025			2024
CTU	$	119,579		56.1	%	$	113,569		67.5	%	$	46,097		$	42,156
AIUS		54,059		25.4	%		54,505		32.4	%		11,884			9,286
USAHS (1)		39,183		18.4	%		-		0.0	%		(330	)		-
Corporate and Other		183		0.1	%		190		0.1	%		(5,924	)		(5,164	)
Total	$	213,004		100.0	%	$	168,264		100.0	%	$	51,727		$	46,278


	Total Assets as of (2)
	March 31, 2025		December 31, 2024
CTU	$	210,909	$	189,663
AIUS		155,782		150,437
USAHS (1)		334,636		306,552
Corporate and Other		567,217		590,382
Total	$	1,268,544	$	1,237,034

(1)

USAHS includes results of operations starting from the acquisition date on December 2, 2024.

(2)

Total assets are presented on a condensed consolidated basis and do not include intercompany receivable or payable activity between segments and corporate and other.

Significant expense category by reporting segment is as follows (dollars in thousands):


	For the Quarter Ended March 31, 2025
Significant expense categories	CTU		AIUS		USAHS (1)
Academics and student related	$	15,972	$	10,300	$	15,416
Advertising and marketing		13,523		10,456		3,978
Admissions		12,532		8,547		1,387
Administrative (2)		22,814		9,441		5,148
Bad debt		5,874		1,624		61
Depreciation and amortization		2,136		719		8,870
All other expenses (3)		631		1,088		4,653

	For the Quarter Ended March 31, 2024
Significant expense categories	CTU		AIUS		USAHS (1)
Academics and student related	$	17,241	$	9,950	$	-
Advertising and marketing		13,210		11,029		-
Admissions		12,178		8,712		-
Administrative (2)		21,090		9,958		-
Bad debt		3,028		3,528		-
Depreciation and amortization		2,090		845		-
All other expenses (3)		2,576		1,197		-

_________________________

(1)

USAHS includes financial information starting from the acquisition date on December 2, 2024.

(2)

Administrative expense includes allocations from Corporate and Other.

(3)

All other expenses primarily include occupancy and asset impairment.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion below and other items in this Quarterly Report on Form 10-Q contain “forward-looking statements,” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, that reflect our current expectations regarding our future growth, results of operations, cash flows, performance and business prospects and opportunities, as well as assumptions made by, and information currently available to, our management. We have tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “expect,” “plan,” “may,” “should,” ”will,” “continue to,” “focused on” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to us and are subject to various risks, uncertainties, and other factors, including, but not limited to, those matters discussed in Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 that could cause our actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Except as expressly required by the federal securities laws, we undertake no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Among the factors that could cause actual results to differ materially from those expressed in, or implied by, our forward-looking statements are the following:

•

declines in enrollment or interest in our programs or our ability to ~~market~~attract toor ~~and~~connect ~~contact~~with prospective students;

•

our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the ~~terms of any potential changes to or conditions imposed on our continued participation in the Title IV programs under~~ new ~~program participation agreements, the new~~ 90-10, gainful employment, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education (the “Department”)), as well as applicable accreditation standards and state regulatory requirements;

•

the impact of various versions of “borrower defense to repayment” regulations;

•

the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts;

•

rulemaking or changing interpretations of existing regulations, guidance or historical practices by the Department or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions;

•

the impact of any federal budget reconciliation or other legislative process on the availability of current levels of federal student aid or the conditions associated with participating in such aid programs;

•

the success of our initiatives to improve student experiences, retention and academic outcomes;

•

our continued eligibility to participate in educational assistance programs for key employers, veterans and other military personnel;

•

increased competition;

our ability to pay dividends on our common stock and execute our stock repurchase program;

•

increased competition;

•

the impact of management changes; and

•

changes in the overall U.S. economy.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the Company’s unaudited condensed consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. The MD&A is intended to help investors understand the results of operations, financial condition and present business environment. The MD&A is organized as follows:

•

Overview

•

Consolidated Results of Operations

•

Segment Results of Operations

•

Summary of Critical Accounting Policies and Estimates

•

Liquidity, Financial Position and Capital Resources

OVERVIEW

~~Our~~Perdoceo’s accredited academic institutions offer a quality postsecondary education ~~primarily online~~ to a diverse student population, ~~along~~ with fully online, campus-based and ~~blended~~hybrid learning programs. The Company’s academic institutions – Colorado Technical University (“CTU”), ~~and~~ the American InterContinental University System (“AIUS” or “AIU System”) and University of St. Augustine for Health Sciences ("USAHS") – provide degree programs from the associate through doctoral level as well as non-degree seeking and professional development programs. Our academic institutions offer students industry-relevant and career-focused academic programs that are designed to meet the educational needs of today’s busy adults. CTU and AIUS continue to show innovation in higher education, advancing personalized learning technologies like their intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and academic experiences. USAHS is among the nation's reputable universities offering graduate health sciences degrees, primarily in physical therapy, occupational therapy, speech language therapy and nursing, as well as continuing education programs. Perdoceo's academic institutions are committed to providing quality education that closes the gap between learners who seek to advance their careers and employers needing a qualified workforce.

17On December 2, 2024, the Company acquired the University of St. Augustine for Health Sciences (the "USAHS acquisition"). Results of operations related to the USAHS acquisition are included in the consolidated financial statements from the date of acquisition.

~~associate~~Our ~~through~~reporting ~~doctoral~~segments ~~level~~are asdetermined ~~well~~in asaccordance ~~non-degree~~with ~~seeking~~Financial ~~and~~Accounting ~~professional~~Standards ~~development~~Board ~~programs.~~(“FASB”)Accounting ~~Our~~Standards ~~academic~~Codification ~~institutions~~(“ASC”)Topic ~~offer~~280 ~~students~~– ~~industry-relevant~~Segment Reporting and ~~career-focused academic programs that~~ are ~~designed~~based toupon ~~meet~~how the ~~educational~~Company ~~needs~~analyzes ofperformance ~~today’s~~and ~~busy~~makes ~~adults~~decisions. ~~CTU~~Each ~~and~~segment ~~AIUS~~represents ~~continue~~a topostsecondary ~~show innovation in higher~~ education, ~~advancing~~provider ~~personalized~~that ~~learning~~offers ~~technologies~~a ~~like~~variety ~~their~~of ~~intellipath® learning platform and using data analytics and technology to serve and educate students while enhancing overall learning and~~ academic ~~experiences~~programs. ~~Perdoceo's~~We ~~institutions~~organize ~~are~~our ~~committed~~business toacross ~~providing~~three ~~quality~~reporting ~~education~~segments: ~~that~~CTU, ~~closes~~AIUS ~~the gap between learners who seek to advance their careers~~ and ~~employers needing a qualified workforce~~USAHS.

Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”)Accounting Standards Codification (“ASC”)Topic 280 – Segment Reporting and are based upon how the Company analyzes performance and makes decisions. Each segment represents a postsecondary education provider that offers a variety of academic programs. We organize our business across two reporting segments: CTU and AIUS.

Regulatory Environment and Political Uncertainty

WeAs ~~operate~~indicated in a“Scrutiny ~~highly~~of ~~regulated~~the ~~industry,~~For-Profit ~~which~~Postsecondary ~~has~~Education ~~significant~~Sector” ~~impacts~~section onwithin ~~our~~Item ~~business~~1, ~~and~~"Business" ~~creates~~in ~~risks~~our ~~and~~Annual ~~uncertainties.~~Report Inon ~~recent~~Form ~~years,~~10-K ~~Congress,~~for the ~~Department,~~year ~~states,~~ended ~~accrediting~~December ~~agencies~~31, ~~the Consumer Financial Protection Bureau~~2024, the ~~Federal~~for-profit ~~Trade~~industry ~~Commission,~~is ~~state~~scrutinized ~~attorneys~~by ~~general~~various policymakers, ~~consumer~~agencies ~~advocacy groups~~ and ~~the~~interest ~~media have all scrutinized the for-profit postsecondary education sector~~groups. Congressional hearings and roundtable discussions were previously held regarding ~~various~~certain aspects of the education industry, including issues surrounding student debt as well as publicly reported student outcomes that may be used as part of an institution’s recruiting and admissions practices, and reports were issued that are highly critical of for-profit colleges and universities. AMany ~~group~~ of ~~influential U.S. senators, consumer advocacy groups and some media outlets have strongly and repeatedly encouraged~~ the ~~Department,~~most ~~the~~highly ~~Department~~criticized ~~of Defense and the Department of Veterans Affairs and its state approving agencies to take action to limit or terminate the participation of~~ institutions ~~such as ours in existing tuition assistance programs. In several cases, these groups~~ have received significant financial support from third parties critical of our sector and have aligned on messaging that negatively impacts our sector during policy and rulemaking discussions. In addition, the current administration has made student loan forgiveness one of its top domestic policy objectives, and it has been ~~aggressively~~closed ~~pursued~~now by the Department in cooperation with special interest groups, other federal agencies, state attorneys general and others. These groups collectively have focused efforts relating to student debt forgiveness on for~~-profit~~ ~~colleges~~several ~~and universities, encouraging loan discharge applications and complaints by former students~~years.

WeThe ~~continue~~November to2024 ~~see~~federal ~~one~~elections ofresulted ~~the~~in ~~most~~a ~~challenging~~new ~~operating~~President ~~environments~~and inCongress. ~~recent~~We ~~memory~~cannot aspredict the ~~Department~~actions ~~has~~that ~~undertaken a complete overhaul of almost all of~~ the ~~major~~new ~~regulatory~~Administration ~~requirements~~or ~~associated~~Congress ~~with~~may ~~our~~take ~~participation~~or intheir ~~Title~~effect IVon ~~Programs and which disproportionally negatively impact~~ the ~~for-profit~~higher ~~postsecondary~~ education sector. ~~Additionally,~~The anew ~~number~~Congress ofor ~~the~~Administration ~~Department’s~~may ~~regulatory~~delay, ~~initiatives~~block, ~~are~~modify, ~~explicitly~~or ~~targeted~~eliminate atcertain ~~negatively~~Title ~~impacting~~IV ~~the~~and ~~proprietary~~other ~~sector~~regulations ofapplicable to higher education institutions. In ~~many~~addition, ~~cases~~ the new ~~regulatory~~Administration ~~requirements~~may ~~are~~interpret, ~~unclear~~apply, ~~require~~and ~~further~~enforce ~~clarification~~Title asIV toand ~~their~~other ~~interpretation~~regulations orin ~~applicability~~a ormanner ~~are~~different ~~subject~~from orcurrent ~~will~~Department beguidance ~~subject~~and ~~to legal challenges~~practice. We expect to continue to need to operate nimbly ~~in this uncertain environment~~, making necessary changes to the extent possible to comply with ~~the myriad of~~ new ~~vague or unclear~~ rules or interpretations as well as new interpretations of existing rules. For example, in 2023, we materially reduced prospective student enrollment, marketing and outreach processes at AIUS during the year to limit the volume of new federal funding that the institution would receive and to preserve available funding for existing students under the Department’s new 90-10 Rule. Any actions that limit our participation in Title IV Programs or the amount of student financial aid for which our students are eligible would materially impact our student enrollments and profitability and could impact the continued viability of our business as currently conducted.

We encourage you to review Item 1, “Business,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K to learn more about our highly regulated industry and related risks and uncertainties, in addition to the MD&A in our ~~2024~~2025 Quarterly Reports on Form 10-Q.

Note Regarding Non-GAAP measures

We believe it is useful to present non-GAAP financial measures which exclude certain ~~significant and~~ non-cash items as a means to understand the performance of our core business. As a general matter, we use non-GAAP financial measures in conjunction with results presented in accordance with GAAP to help analyze the performance of our core business, assist with preparing the annual operating plan, and measure performance for some forms of compensation. In addition, we believe that non-GAAP financial information is used by analysts and others in the investment community to analyze our historical results and to provide estimates of future performance.

We believe certain non-GAAP measures allow us to compare our current operating results with respective historical periods and with the operational performance of other companies in our industry because it does not give effect to potential differences caused by items we do not consider reflective of underlying operating performance. We believe the items we are adjusting for are ~~not normal~~ operating expenses which are not reflective of our underlying business. In evaluating the use of non-GAAP measures, investors should be aware that in the future we may incur expenses similar to the adjustments presented below. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by expenses that are unusual, non-routine or non-recurring. A non-GAAP measure has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for net income, operating income, earnings per diluted share, or any other performance measure derived in accordance with and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of our liquidity.

18Non-GAAP financial measures, when viewed in a reconciliation to respective GAAP financial measures, provide an additional way of viewing the Company's results of operations and the factors and trends affecting the Company's business. Non-GAAP financial

operating income, earnings per diluted share, or any other performance measure derived in accordance with and reported under GAAP or as an alternative to cash flow from operating activities or as a measure of our liquidity.

Non-GAAP financial measures, when viewed in a reconciliation to respective GAAP financial measures, provide an additional way of viewing the Company's results of operations and the factors and trends affecting the Company's business. Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the respective financial results presented in accordance with GAAP.

2024 Third Quarter Overview

During the third quarter ended September 30, 2024 ("current quarter"), we continued to experience high levels of student retention and engagement at both CTU and AIUS, with student retention remaining at multi-year highs. Our faculty and student support teams remain dedicated to educating and serving our students, and we anticipate that student retention should continue to trend at these levels through the remainder of 2024.

Total student enrollments increased 11.0% at September 30, 2024 as compared to September 30, 2023, with both academic institutions contributing to this increase. CTU's total student enrollments increased 13.6% as compared to the prior year quarter end driven by student enrollment growth within our corporate engagement programs as well as a positive timing impact from the academic calendar comparability resulting in more enrollment days for the current year to date as compared to the prior year to date. Total student enrollments increased 4.0% at AIUS for the current quarter end as compared to the prior year quarter end as AIUS' total student enrollment comparability had continued to improve during the current year to date since reverting to normalized levels of operations beginning in the fourth quarter of 2023.

We view technology as a catalyst and differentiator for us and remain committed to making selective investments that deliver a more meaningful and relevant educational experience for our learners while continuing to improve the efficiency and effectiveness of our academic institutions’ student support functions. Additionally, we remained focused on investing in and improving processes that support our corporate engagement programs. Lastly, marketing and admissions spend increased during the current quarter as compared to the prior year quarter, driven by AIUS operating at normalized levels during the current year. We continue to adjust our marketing strategies to further improve our focus on identifying prospective students who are more likely to succeed at one of our universities, as well as comply with updated expectations from various federal agencies around prospective student outreach.

We expect the strong levels of student retention and engagement experienced through the current year to date, to continue through the remainder of 2024 and expect to end the year with total student enrollment growth at both of our academic institutions as of December 31, 2024. Full year revenue is expected to be lower for 2024 primarily due to the lag impact on revenue of lower beginning total student enrollments at AIUS as well as lower revenue due to simplification of our professional development offerings at CTU.

Financial Highlights

Revenue for the current quarter decreased by 5.6% or $10.1 million as compared to the prior year quarter, resulting from a decrease in revenue for CTU of 4.0% or $4.8 million and a decrease for AIUS of 9.0% or $5.3 million. The decrease in revenue at CTU was driven by changes within our professional development program offerings as well as a negative timing impact of revenue-earning days due to the academic calendar for the current quarter as compared to the prior year period. CTU's academic calendar may impact the comparability of revenue-earning days and enrollment results in any given quarter, with the impact on revenue and total student enrollments not necessarily having the same magnitude or directional impact. The decrease within AIUS was driven by a lag impact on revenue of the operational changes undertaken during 2023.

Operating income for the current quarter increased to $44.8 million as compared to operating income of $43.1 million in the prior year quarter. The increase in operating income for the current quarter was a result of decreased operating expenses, primarily in the areas of asset impairment, academics and administrative expenses, which more than offset the decrease in revenue during the current quarter as compared to the prior year quarter.

The Company believes it is useful to present non-GAAP financial measures, which exclude certain significant and non-cash items, as a means to understand the performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $48.6 million for the current quarter as compared to $47.2 million for the prior year quarter.

Adjusted operating income and adjusted earnings per diluted share for the quarters and years to date ended September 30, 2024 and 2023 is presented below (dollars in thousands, unless otherwise noted):

	For the Quarter Ended						For the Year to Date Ended
	September 30,						September 30,
Adjusted Operating Income	2024			2023			2024			2023
Operating income	$	44,794		$	43,073		$	137,078		$	134,503
Depreciation and amortization		3,053			3,914			9,138			13,438
Legal fee expense related to certain matters (1)		719			246			2,764			7,574
Adjusted Operating Income	$	48,566		$	47,233		$	148,980		$	155,515
	For the Quarter Ended						For the Year to Date Ended
	September 30,						September 30,
Adjusted Earnings Per Diluted Share	2024			2023			2024			2023
Reported Earnings Per Diluted Share	$	0.57		$	0.62		$	1.73		$	1.92
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets		0.02			0.03			0.06			0.09
Legal fee expense related to certain matters (1)		0.01			-			0.04			0.11
Gain on sale of intangible asset (2)		-			-			-			(0.32	)
Total pre-tax adjustments	$	0.03		$	0.03		$	0.10		$	(0.12	)
Tax effect of adjustments (3)		(0.01	)		(0.01	)		(0.03	)		0.03
Total adjustments after tax		0.02			0.02			0.07			(0.09	)
Adjusted Earnings Per Diluted Share	$	0.59		$	0.64		$	1.80		$	1.83

measures should be considered as a supplement to, and not as a substitute for, or superior to, the respective financial results presented in accordance with GAAP.

~~Legal~~2025 ~~fee~~First ~~expense~~Quarter ~~associated with (i) responses to the Department of Education (the "Department") relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts.~~Overview

~~Non-cash~~During ~~gain~~the ~~associated~~first ~~with~~quarter ~~the~~ended ~~sale~~March 31, 2025 ("current quarter"), our academic institutions remained focused on furthering their goal of ~~the~~changing ~~LCB~~lives ~~tradename~~through ineducation ~~exchange~~and preparing learners for ~~outstanding~~essential ~~shares~~skills ofneeded ~~Perdoceo'~~in today’s ~~stock~~job market. CTU and AIUS provide learners with relevant knowledge and equip them with essential skills needed to thrive in today’s evolving job market, while USAHS prepares professionals to serve and provide quality medical care to communities across the country. The enrollment trends that we have been experiencing across these academic institutions have reinforced and validated our strategy of prioritizing student experiences and academic outcomes that, we believe, should ultimately support sustainable and responsible growth.

~~The~~Total ~~tax~~student ~~effect~~enrollments ofincreased ~~adjustments~~16.7% ~~was~~at ~~calculated~~March 31, 2025 as compared to March 31, 2024. CTU's total student enrollments increased 10.6% as compared to the prior year quarter end, primarily supported by ~~multiplying~~high levels of student retention and engagement, growth within the ~~pre-tax~~corporate ~~adjustments~~student ~~with~~program aand ~~tax~~higher ~~rate~~levels of ~~25%~~prospective student interest. ~~This~~Total ~~tax~~student ~~rate~~enrollments isdecreased ~~intended~~4.5% toat ~~reflect~~AIUS ~~federal~~for ~~and~~the ~~state~~current ~~taxable~~quarter ~~jurisdictions~~end as ~~well~~compared to the prior year quarter end. Lastly, for USAHS, the spring term which began in January of 2025 has total student enrollments of 4,200 as of the ~~nature~~current quarter end. USAHS has a traditional university calendar with three academic terms and multiple campuses for in-person classes in California, Texas and Florida. USAHS continues to expand its program offerings in terms of new modalities and current campus locations, with the ~~adjustments~~goal of maximizing the geographical area they serve while providing students with a wider choice in taking their courses between online instruction and in person instruction at a campus location as well as hybrid options in between.

For the current quarter, our academic institutions experienced increased levels of prospective student interest and commensurately increased their marketing and admissions spending to effectively and efficiently identify and engage with prospective students looking to pursue a degree at one of our academic institutions. Our academic institutions continuously adjust their marketing strategies to identify prospective students who, we believe, are more likely to succeed in one of their academic programs. Additionally, we maintained our commitment to training and developing our admissions, enrollment, and student support teams, ensuring they are fully prepared to assist the increasing number of students throughout their educational journey at our academic institutions.

We expect the high levels of student retention and student engagement we experienced through the first quarter of 2025, as well as the prospective student interest experienced, to continue through the remainder of 2025. As a result, full year revenue is expected to be higher for 2025 due to the USAHS acquisition as well as growth in revenue and student enrollments within CTU and AIUS.

Financial Highlights

Revenue for the current quarter increased by 26.6% or $44.7 million as compared to the prior year quarter, primarily due to $39.2 million of revenue from the USAHS acquisition which was completed in December 2024 and therefore did not have comparable results in the prior year quarter. CTU also contributed to the increase of revenue due to growth in total student enrollments driven by strong student retention and engagement trends along with increased prospective student interest, while AIUS remained relatively flat as compared to the prior year quarter.

Operating income for the current quarter increased to $51.7 million as compared to operating income of $46.3 million in the prior year quarter, driven by both CTU and AIUS. The increase in operating income for the current quarter was a result of revenue growth at CTU and lower bad debt expense at AIUS.

The Company believes it is useful to present non-GAAP financial measures, which exclude certain non-cash items, as a means to understand the core performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $63.5 million for the current quarter as compared to $49.3 million for the prior year quarter.

Adjusted operating income and adjusted earnings per diluted share for the quarters ended March 31, 2025 and 2024 is presented below (dollars in thousands, unless otherwise noted):


	For the Quarter Ended
	March 31,
Adjusted Operating Income	2025			2024

Operating income	$	51,727		$	46,278
Depreciation and amortization		11,807			3,016
Adjusted Operating Income	$	63,534		$	49,294

	For the Quarter Ended
	March 31,
Adjusted Earnings Per Diluted Share	2025			2024

Reported Earnings Per Diluted Share	$	0.65		$	0.59
Pre-tax adjustments included in operating expenses:
Amortization for acquired intangible assets		0.06			0.02
Total pre-tax adjustments	$	0.06		$	0.02
Tax effect of adjustments (1)		(0.01	)		(0.01	)
Total adjustments after tax		0.05			0.01
Adjusted Earnings Per Diluted Share	$	0.70		$	0.60

(1)

The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments.

CONSOLIDATED RESULTS OF OPERATIONS

The summary of selected financial data table below should be referenced in connection with a review of the following discussion of our results of operations for the quarters ~~and years to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 (dollars in thousands):

	For the Quarter Ended September 30,															For the Year to Date Ended September 30,
	For the Quarter Ended March 31,
	2024			% of Total Revenue			2023			% of Total Revenue			2024 vs 2023 % Change			2024			% of Total Revenue			2023			% of Total Revenue			2024 vs 2023 % Change
	2025			% of Total Revenue			2024			% of Total Revenue			2025 vs 2024 % Change
TOTAL REVENUE	$	~~169~~213,~~828~~004					$	~~179~~168,~~923~~264						-526.6	%	$	~~504,832~~					$	~~562,085~~						~~-10.2~~	%
OPERATING EXPENSES
Educational services and facilities (1)		2848,~~287~~542			1622.78	%		3329,~~502~~858			1817.67	%		~~-15~~62.6	%		~~85,661~~			~~17.0~~	%		~~100,101~~			~~17.8~~	%		~~-14.4~~	%
General and administrative: (2)
Advertising and marketing		2627,~~807~~958			1513.81	%		2224,~~611~~239			1214.64	%		1815.63	%		~~74,178~~			~~14.7~~	%		~~79,742~~			~~14.2~~	%		~~-7.0~~	%
Admissions		2022,~~027~~465			1110.85	%		2120,~~198~~890			1112.84	%		-57.5	%		~~60,881~~			~~12.1~~	%		~~70,511~~			~~12.5~~	%		~~-13.7~~	%
Administrative		3842,~~127~~947			2220.52	%		4035,~~653~~797			2221.63	%		-620.20	%		~~114,064~~			~~22.6~~	%		~~128,556~~			~~22.9~~	%		~~-11.3~~	%
Bad debt		87,~~733~~558			53.15	%		76,~~592~~556			43.29	%		15.03	%		~~21,364~~			~~4.2~~	%		~~26,519~~			~~4.7~~	%		~~-19.4~~	%
Total general and administrative expense		93100,~~694~~928			5547.24	%		9287,~~054~~482			5152.20	%		115.84	%		~~270,487~~			~~53.6~~	%		~~305,328~~			~~54.3~~	%		~~-11.4~~	%
Depreciation and amortization		311,~~053~~807			15.85	%		3,~~914~~016			21.28	%		~~-22~~291.05	%		~~9,138~~			~~1.8~~	%		~~13,438~~			~~2.4~~	%		~~-32.0~~	%
Asset impairment		-			0.0	%		71,~~380~~630			4.1.0	%	NM				~~2,468~~			~~0.5~~	%		~~8,715~~			~~1.6~~	%	NM
OPERATING INCOME		4451,~~794~~727			2624.43	%		4346,~~073~~278			2327.95	%		411.08	%		~~137,078~~			~~27.2~~	%		~~134,503~~			~~23.9~~	%		~~1.9~~	%
PRETAX INCOME		5256,~~362~~505			3026.85	%		4852,~~088~~851			2631.74	%		86.9	%		~~158,227~~			~~31.3~~	%		~~169,744~~			~~30.2~~	%		~~-6.8~~	%
PROVISION FOR INCOME TAXES		1412,~~107~~817			86.30	%		613,~~781~~409			3.8.0	%		~~108~~-4.04	%		~~42,101~~			~~8.3~~	%		~~39,280~~			~~7.0~~	%		~~7.2~~	%
Effective tax rate		2622.97	%					1425.14	%								~~26.6~~	%					~~23.1~~	%
NET INCOME	$	3843,~~255~~688			2220.5	%	$	4139,~~307~~442			23.04	%		-710.48	%	$	~~116,126~~			~~23.0~~	%	$	~~130,464~~			~~23.2~~	%		~~-11.0~~	%

(1)

Educational services and facilities expense includes costs attributable to the educational activities of our campuses, including: salaries and benefits of faculty, academic administrators and student support personnel, ~~and~~ costs of educational supplies and ~~facilities,~~other ~~such~~goods ~~as rents on leased facilities. Also included in educational services~~ and ~~facilities expense are rents on leased administrative facilities~~services, ~~such~~including ~~as our corporate headquarters, and~~ costs of ~~other~~textbooks ~~goods~~ and ~~services provided by our campuses~~laptops, ~~including~~and ~~costs~~rents ofon ~~textbooks~~leased campus and ~~laptop~~administrative ~~computers~~facilities.

(2)

General and administrative expense includes operating expenses associated with, ~~including salaries and benefits of personnel in,~~ corporate and campus administration, marketing, admissions, information technology, financial aid, accounting, human resources, legal and compliance. Other expenses within this expense category include costs of advertising and production of marketing materials and bad debt expense.

Revenue

~~The~~Revenue ~~current~~for ~~quarter~~the ~~and~~first ~~year~~quarter toof ~~date~~2025 ~~revenue~~("current ~~decreased~~quarter") increased by 526.6% or $1044.17 million ~~and 10.2% or $57.3 million, respectively,~~ as compared to the prior year ~~periods, driven by decreases in revenue within both CTU and AIUS~~quarter. The ~~decline~~increase ~~for the current quarter and year to date~~ was primarily driven by the ~~lag~~acquisition ~~impact~~of onUSAHS ~~revenue~~completed ~~due~~in toDecember ~~the~~2024 ~~operational~~that ~~changes~~was ~~made~~not atpart ~~AIUS~~of in the comparative prior year quarter as well as ~~changes~~an ~~within~~increase ~~our professional development program offerings at CTU. Typically, total student enrollment balances at the end of any given quarter have a lag impact on revenue~~ in ~~the subsequent quarter. Additionally, the current quarter and current year to date had a decrease in~~ revenue~~-earning~~ ~~days~~ at CTU ~~as compared to the prior year periods due to a timing impact of the academic calendar~~.

Educational Services and Facilities Expense (dollars in thousands)

For the Quarter Ended September 30,

For the Year to Date Ended September 30,

For the Quarter Ended March 31,

2024

2023

2024 vs 2023 % Change

2024

2023

2024 vs 2023 % Change

2025

2024

2025 vs 2024 % Change

Educational services and facilities:

Academics & student related

2642,~~607~~083

3027,~~991~~611

~~-14~~52.14%

~~80,273~~

~~92,347~~

~~-13.1%~~

Occupancy

16,~~680~~459

2,~~511~~247

~~-33~~187.14%

~~5,388~~

~~7,754~~

~~-30.5%~~

Total educational services and facilities

2848,~~287~~542

3329,~~502~~858

~~-15~~62.6%

~~85,661~~

~~100,101~~

~~-14.4%~~

The educational services and facilities expense for the current quarter ~~and~~increased ~~year to date decreased~~ by 1562.6% or $518.27 million ~~and 14.4% or $14.4 million~~, ~~respectively, as~~ compared to the prior year ~~periods~~quarter. ~~Academics~~The ~~and~~increase ~~student~~was ~~related~~due ~~costs~~to ~~decreased~~a byfull ~~14.1%~~quarter orof ~~$4.4~~expenses ~~million~~related ~~and~~to ~~13.1% or $12.1 million for~~ the ~~current~~USAHS ~~quarter~~acquisition ~~and year to date, respectively,~~ as compared to ~~the~~no ~~prior year periods, primarily driven by operational changes made to align with recent student enrollments trends. Occupancy~~ expenses ~~for~~in the ~~current quarter and year to date improved by 33.1% or $0.8 million and 30.5% or $2.4 million, respectively, as compared to the~~ prior year ~~periods,~~quarter ~~driven~~for ~~by the continued optimization of leased space~~USAHS.

General and Administrative Expense (dollars in thousands)

For the Quarter Ended September 30,

For the Year to Date Ended September 30,

For the Quarter Ended March 31,

2024

2023

2024 vs 2023 % Change

2024

2023

2024 vs 2023 % Change

2025

2024

2025 vs 2024 % Change

General and administrative:

Advertising and marketing

2627,~~807~~958

2224,~~611~~239

1815.63%

~~74,178~~

~~79,742~~

~~-7.0%~~

Admissions

2022,~~027~~465

2120,~~198~~890

-57.5%

~~60,881~~

~~70,511~~

~~-13.7%~~

Administrative

3842,~~127~~947

4035,~~653~~797

-620.20%

~~114,064~~

~~128,556~~

~~-11.3%~~

Bad debt

87,~~733~~558

76,~~592~~556

15.03%

~~21,364~~

~~26,519~~

~~-19.4%~~

Total general and administrative expense

93100,~~694~~928

9287,~~054~~482

115.84%

~~270,487~~

~~305,328~~

~~-11.4%~~

The general and administrative expense for the current quarter increased by 115.84% or $113.~~6 million and decreased by 11.~~4% ~~or $34.8~~ million ~~for the current year to date,~~ as compared to the prior year ~~periods. The current~~ quarter ~~increase was primarily~~ driven by ~~increased~~increases ~~advertising~~within ~~and~~all ~~marketing~~ expense, ~~which~~categories. ~~was~~The ~~only~~increase ~~partially~~was ~~offset~~primarily ~~with~~due to a ~~decrease~~full inquarter ~~admissions~~of ~~and administrative~~ expenses. ~~The~~related ~~year~~ to ~~date~~the ~~improvement~~USAHS ~~was~~acquisition ~~driven by decreases within all expense categories~~ as compared to ~~comparative~~no expenses in the prior year ~~period~~quarter.

Advertising and marketing expense for the current quarter increased by 1815.63% or $43.~~2 million and decreased by~~ 7~~.0%~~ ~~or $5.6~~ million ~~for the current year to date,~~ as compared to the prior year ~~periods~~quarter. ~~The~~Excluding ~~current~~USAHS ~~quarter~~expenses, ~~increase~~advertising ~~was~~expenses ~~due~~would tohave ~~increased~~remained ~~spending~~relatively ~~within~~flat ~~AIUS~~as compared to ~~normalized levels versus~~ the prior year ~~which was decreased due to the short-term operational changes~~quarter. ~~The current year to date improvement was primarily driven by adjustments made to our marketing processes to identify prospective student interest.~~

Admissions expense for the current quarter ~~and~~increased ~~year to date decreased~~ by 57.5% or $1.~~2 million and 13.7% or $9.~~6 million, ~~respectively,~~ as compared to the prior year ~~periods~~quarter. ~~Admissions~~Excluding ~~expense~~USAHS ~~for the current quarter decreased within CTU~~expenses, ~~which~~admissions ~~more~~expenses ~~than~~would ~~offset~~have ~~the~~remained ~~increase~~relatively ~~within~~flat ~~AIUS~~ as acompared ~~result of the return~~ to ~~normalized operating levels. The current year to date improvement was primarily driven by decreased expenses within both CTU and AIUS as a result of~~ the ~~operational changes made during the~~ prior year quarter.

The administrative expense for the current quarter ~~and~~increased ~~year to date decreased~~ by 620.20% or $27.52 million ~~and 11.3% or $14.5 million, respectively,~~ as compared to the prior year ~~periods~~quarter. Excluding USAHS expenses, ~~primarily~~administrative ~~driven~~expenses bywould ~~operational~~have ~~efficiencies~~increased ~~within~~by ~~our~~5.6% ~~academic~~or ~~institutions~~$2.0 ~~and~~million ~~decreased~~as ~~legal~~compared ~~fees~~to ~~within~~the ~~Corporate~~prior ~~and~~year ~~Other~~quarter, ~~for~~driven ~~the~~by ~~year~~increased tocorporate ~~date~~overhead ~~period~~expenses.

Bad debt expense incurred by each of our segments during the quarters ~~and years to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 was as follows (dollars in thousands):

	For the Quarter Ended September 30,															For the Year to Date Ended September 30,
	For the Quarter Ended March 31,
	2024			% ofSegmentRevenue			2023			% ofSegmentRevenue			2024 vs 2023 % Change			2024		% ofSegmentRevenue			2023			% ofSegmentRevenue			2024 vs 2023 % Change
	2025			% ofSegmentRevenue			2024			% ofSegmentRevenue			2025 vs 2024 % Change
Bad debt expense:
CTU	$	5,~~003~~874			4.39	%	$	43,~~529~~028			32.87	%		1094.50	%	$	~~13,031~~		~~3.8~~	%	$	~~16,225~~			~~4.5~~	%		~~-19.7~~	%
AIUS		31,~~732~~624			63.90	%		3,~~068~~528			56.25	%		21-54.60	%		~~8,333~~		~~5.1~~	%		~~10,307~~			~~5.2~~	%		~~-19.2~~	%
Corporate and Other		(2	)	NM				(5	)	NM			NM				-	NM				(13	)	NM			NM
USAHS (1)		61			0.2	%		-		NA			NM
Total bad debt expense	$	8,733			5.1	%	$	7,592			4.2	%		15.0	%	$	21,364		4.2	%	$	26,519			4.7	%		-19.4	%
Corporate and Other		(1	)	NM				-		NM			NM
Total bad debt expense	$	7,558			3.5	%	$	6,556			3.9	%		15.3	%

Bad debt expense for the current quarter increased by 15.0% or $1.1 million and decreased by 19.4% or $5.2 million for the current year to date, as compared to the prior year periods. We regularly evaluate our reserve rates, which includes a quarterly update of our analysis of historical student receivable collectability based on the most recent data available and a review of current known factors which we believe could affect future collectability of our student receivables, such as the number of students that do not complete the financial aid process. We continue to expect quarterly fluctuations in bad debt expense.________________

~~Operating~~(1) USAHS ~~Income~~includes results of operations starting from the acquisition date on December 2, 2024.

Operating income increased by 4.0% or $1.7 million and 1.9% or $2.6 million for the current quarter and year to date, respectively, as compared to the prior year periods. The current quarter improvement was benefitted by lower academics, admissions and administrative expenses which more than offset the decrease in revenue as compared to the prior year quarter. The year to date improvement was supported by lower operating expenses across all categories which more than offset the decrease in revenue as compared to the prior year period. The current quarter and year to date also included lower asset impairment charges of $7.4 million and $6.2 million, respectively, as compared to the comparative prior year periods.

Bad debt expense for the current quarter increased by 15.3% or $1.0 million as compared to the prior year quarter. The increase was primarily driven by CTU, which was only partially offset with a decrease at AIUS, due to timing impacts related to student billings versus cash collections.

We regularly evaluate our reserve rates, which includes a quarterly update of our analysis of historical student receivable collectability based on the most recent data available and a review of current known factors which we believe could affect future collectability of our student receivables, such as the number of students that do not complete the financial aid process. We continue to expect quarterly fluctuations in bad debt expense.

Depreciation and Amortization

Depreciation and amortization expense for the current quarter increased by $8.8 million as compared to the prior year quarter, driven by the USAHS acquisition, which includes amortization for definite-lived intangible assets as well as amortization related to finance leases for ground-based campuses.

Operating Income

Operating income for the current quarter increased by 11.8% or $5.4 million as compared to the prior year quarter. This improvement was primarily driven by higher revenue, which more than offset the increases in operating expenses, as compared to the prior year quarter.

Provision for Income Taxes

For the quarter ~~and year to date~~ ended ~~September~~March 3031, ~~2024~~2025, we recorded a provision for income taxes of $1412.18 million ~~reflecting~~or an22.7% ~~effective~~as ~~tax~~compared ~~rate~~to ofa ~~26.9%~~provision ~~and~~for income taxes of $4213.14 million ~~reflecting~~or an25.4% for the prior year quarter. The effective tax rate offor ~~26.6%,~~the ~~respectively,~~current asquarter ~~compared~~was tobenefitted aby ~~provision~~the ~~for~~tax ~~income~~effect ~~taxes~~of stock-based compensation and the release of ~~$6.8~~previously ~~million~~recorded ~~reflecting~~tax anreserves, which reduced the effective tax rate ofby 145.15% and ~~$39~~1.3%, ~~million~~respectively. ~~reflecting~~The an effective tax rate for the prior year quarter was impacted by the tax effect of ~~23.1%~~stock-based ~~for~~compensation and the ~~respective~~release ~~prior~~of ~~year~~previously ~~periods~~recorded tax reserves, which reduced the effective tax rate by 1.2% and 1.3%, respectively.

~~The~~For ~~effective tax rate for~~ the ~~quarter~~full ~~and~~ year ~~to date ended September 30~~2025, ~~2024~~we ~~reflects~~expect ~~federal~~our ~~tax credits claimed for the 2023 tax return, which decreased the~~ effective tax rate ~~for the quarter and year~~ to ~~date~~be bybetween 025.45% and 026.1%, respectively. Additionally, the tax effect of stock-based compensation and the release of previously recorded tax reserves reduced the effective tax rate for the quarter and year to date ended September 30, 2024 by 0.2% and 1.4%, respectively. The effective tax rate for the quarter and year to date ended September 30, 2023 was primarily impacted by a $4.5 million favorable discrete adjustment related to the recognition of the tax benefits associated with a previously disclosed prior year ordinary loss attributable to the stock of a worthless subsidiary, which decreased the effective tax rate for the quarter and year to date by 9.3% ~~and 2~~.~~6%,~~ respectively. The effective tax rate for the quarter and year to date ended September 30, 2023 reflects federal and state tax credits claimed for the 2022 tax return, which decreased the effective tax rate for the quarter and year to date by 0.6% and 0.2%, respectively. Additionally, the tax effect of stock-based compensation and the release of other previously recorded tax reserves reduced the effective tax rate for the quarter and year to date ended September 30, 2023 by 0.2% and 0.6%, respectively.

For the full year 2024, we expect our effective tax rate to be between 26.0% and 27.0%.

SEGMENT RESULTS OF OPERATIONS

The following tables present unaudited segment results for the reported periods (dollars in thousands):

	For the Quarter Ended September 30,
	For the Quarter Ended March 31,
	REVENUE							OPERATING INCOME (LOSS)									OPERATING MARGIN
	2024		2023		% Change			2024			2023			% Change			2024			2023
	2025		2024		% Change			2025			2024			% Change			2025			2024
REVENUE:
CTU	$	~~115~~119,~~742~~579	$	~~120~~113,~~552~~569		-45.03	%	$	4446,~~199~~097		$	3442,~~491~~156			289.13	%		38.25	%		2837.61	%
AIUS		5354,~~887~~059		5954,~~226~~505		-9.0.8	%		911,~~063~~884			159,~~602~~286			~~-41~~28.90	%		1622.80	%		2617.30	%
Corporate and other		199		145		37.2	%		(8,468	)		(7,020	)		-20.6	%	NM			NM
USAHS (1)		39,183		-	NM				(330	)		-		NM				-0.8	%	NM
Total	$	169,828	$	179,923		-5.6	%	$	44,794		$	43,073			4.0	%		26.4	%		23.9	%
Corporate and other		183		190		-3.7	%		(5,924	)		(5,164	)		14.7	%	NM			NM
Total	$	213,004	$	168,264		26.6	%	$	51,727		$	46,278			11.8	%		24.3	%		27.5	%

	For the Year to Date Ended September 30,
	REVENUE							OPERATING INCOME (LOSS)									OPERATING MARGIN
	2024		2023		% Change			2024			2023			% Change			2024			2023
REVENUE:
CTU	$	342,139	$	364,336		-6.1	%	$	129,245		$	118,632			8.9	%		37.8	%		32.6	%
AIUS		162,114		197,128		-17.8	%		31,275			44,683			-30.0	%		19.3	%		22.7	%
Corporate and other		579		621		-6.8	%		(23,442	)		(28,812	)		18.6	%	NM			NM
Total	$	504,832	$	562,085		-10.2	%	$	137,078		$	134,503			1.9	%		27.2	%		23.9	%

______________________

	TOTAL STUDENT ENROLLMENTS
	As of September 30,
	2024		2023		% Change
CTU		30,000		26,400		13.6	%
AIUS		10,400		10,000		4.0	%
Total		40,400		36,400		11.0	%

(1) USAHS includes results of operations beginning on the acquisition date of December 2, 2024. Operating loss for the current quarter includes $8.9 million of depreciation and amortization expense associated with acquired tangible and intangible assets as well as finance leases.

Total student enrollments represent all students who are active as of the last day of the reporting period. Active students are defined as those students who are considered in attendance by participating in class related activities during the previous two weeks. Total student enrollments do not include learners pursuing: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at our universities.


	TOTAL STUDENT ENROLLMENTS
	As of March 31,
	2025		2024		% Change
CTU		33,400		30,200		10.6	%
AIUS		10,600		11,100		-4.5	%
USAHS (1)		4,200		-	NM
Total		48,200		41,300		16.7	%

CTU. Current quarter and year to date revenue decreased by 4.0% or $4.8 million and 6.1% or $22.2 million, respectively, as compared to the prior year periods. The decrease was primarily driven by changes within the professional development program offerings at CTU as well as a negative timing impact of revenue-earning days due to the academic calendar for the current quarter and

year to date as compared to the prior year periods. CTU experienced total student enrollment growth of 13.6% at September 30, 2024 as compared to the prior year quarter end which was driven by growth in student enrollments from corporate engagement programs as well as a positive timing impact of the academic calendar on enrollment days. CTU's academic calendar may impact the comparability of revenue-earning days and enrollment results in any given quarter, with the impact on revenue and total student enrollments not necessarily having the same magnitude or directional impact.______________

~~Current quarter and year to date operating income for CTU increased by 28.~~(1%) Perdoceo orcompleted ~~$9.7 million and 8.9% or $10.6 million, respectively, as compared to~~ the ~~prior~~acquisition ~~year periods. The improvement in operating income was primarily supported by lower academics and admissions expenses as well as right-sizing~~ of ~~the~~USAHS ~~cost~~on ~~structure~~December to align with more simplified professional development offerings, which more than offset the declines in revenue. The current quarter and year to date also included lower asset impairment charges of $7.4 million and $6.2 ~~million~~, ~~respectively, as compared to the comparative prior year periods~~2024.

Total ~~AIUS.~~student ~~Current~~enrollments ~~quarter~~represent ~~and~~all ~~year~~students towho ~~date~~are ~~revenue~~active ~~decreased~~as byof ~~9.0%~~the orlast ~~$5.3~~day ~~million~~of ~~and~~the 17reporting period.8% orActive ~~$35.0~~students ~~million,~~are ~~respectively,~~defined as ~~compared~~those tostudents ~~the~~who ~~prior~~are ~~year~~considered ~~periods.~~in ~~The~~attendance ~~decreases~~by ~~were~~participating ~~driven~~in byclass arelated ~~lag~~activities ~~impact~~during ~~from~~ the ~~operational~~previous ~~changes~~two ~~made~~weeks ~~during~~of the ~~latter~~most ~~half~~recent ofacademic ~~2023~~term. ~~AIUS'~~Total ~~experienced total~~ student ~~enrollment~~enrollments ~~growth~~do ofnot ~~4.0%~~include atlearners ~~September~~participating ~~30,~~in: ~~2024~~a) asnon-degree ~~compared~~seeking toand ~~the~~professional ~~prior~~development ~~year~~programs, ~~quarter~~and ~~end~~b) asdegree ~~the~~seeking, ~~return~~non-Title toIV, ~~normalized~~self-paced ~~operating~~programs ~~levels~~at inour ~~the fourth quarter of 2023 contributed to increased student enrollments~~universities.

CTU. Current quarter ~~and~~revenue ~~year~~increased by 5.3% or $6.0 million as compared to ~~date~~the ~~operating~~prior ~~income~~year ~~for~~quarter. ~~AIUS~~The ~~decreased~~increase was primarily driven by ~~41.9%~~total orstudent ~~$6.5~~enrollment ~~million~~growth ~~and~~of 3010.06% orat ~~$13.4~~March ~~million~~31, ~~respectively,~~2025 as compared to the prior year ~~periods,~~quarter. ~~driven~~CTU's total student enrollment growth was supported by ~~the~~high ~~decrease~~levels of student retention and engagement, growth in ~~revenue~~the ~~discussed~~corporate ~~above.~~student programs and higher levels of prospective student interest.

~~Corporate~~Current ~~and~~quarter ~~Other. This category includes unallocated costs that are incurred on behalf of the entire company. Total Corporate and Other~~ operating ~~loss~~income for ~~the~~CTU ~~current quarter~~ increased by 209.63% or $13.49 million as compared to the prior year quarter ~~primarily~~ driven by ~~acquisition~~the ~~costs~~increase ~~and~~in ~~increased~~revenue ~~legal~~discussed ~~fees~~above, ~~for~~which ~~the~~more ~~current~~than ~~quarter.~~offset ~~The~~increased ~~year to date~~ operating ~~loss improved by 18.6% or $5.4 million as compared to the prior year period primarily as a result of lower legal~~ expenses.

AIUS. Current quarter revenue decreased slightly by 0.8% or $0.4 million as compared to the prior year quarter. The decrease was primarily driven by a decrease in total student enrollments of 4.5% at March 31, 2025 as compared to the prior year quarter end.

Current quarter operating income for AIUS increased by 28.0% or $2.6 million as compared to the prior year quarter, primarily driven by decreased bad debt expense, which more than offset the decrease in revenue.

USAHS. Revenue for the current quarter was approximately $39.2 million. USAHS reported an operating loss of approximately $0.3 million for the current quarter driven by $8.9 million of depreciation and amortization expense associated with acquired tangible and intangible assets as well as finance leases.

Corporate and Other. This category includes unallocated costs that are incurred on behalf of the entire company. Total Corporate and Other operating loss for the current quarter increased by 14.7% or $0.8 million as compared to the prior year quarter primarily driven by increased administration costs for the current quarter.

SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

A detailed discussion of the accounting policies and estimates that we believe are most critical to our financial condition and results of operations that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties is included under the caption “Summary of Critical Accounting Policies and Estimates” included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024. Note 2 “Summary of Significant Accounting Policies” of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 also includes a discussion of these and other significant accounting policies.

LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

As of ~~September~~March 3031, ~~2024~~2025, cash, cash equivalents, restricted cash and available-for-sale short-term investments (“cash balances”) totaled $~~722~~612.2 million. Restricted cash as of March 31, 2025 was $21.6 million and primarily related to a letter of credit USAHS is required to maintain with the Department of Education. Our cash flows from operating activities have historically been adequate to fulfill our liquidity requirements. We have historically financed our operating activities, organic growth and acquisitions primarily through cash generated from operations and existing cash balances. We expect to continue to generate cash during the remainder of ~~2024~~2025. We anticipate that we will be able to satisfy the cash requirements associated with, among other things, our working capital needs, capital expenditures, lease commitments, and quarterly ~~dividends~~dividend payments ~~and pending acquisition~~ through at least the next 12 months primarily with cash generated by operations and existing cash balances.

We maintain a balanced capital allocation strategy that focuses on maintaining a strong balance sheet and adequate liquidity, while (i) investing in organic projects at our universities, in particular technology-related initiatives which are designed to benefit our students, as well as real estate updates, and (ii) evaluating diverse strategies to enhance stockholder value, including acquisitions, quarterly dividend payments and share repurchases. Ultimately, our goal is to deploy resources in a way that drives long term stockholder value while supporting and enhancing the academic value of our institutions.

On February 20, 2024, the Board of Directors of the Company approved a ~~new~~ stock repurchase program for up to $50.0 million which commenced March 1, 2024 and expires September 30, 2025. The ~~new stock repurchase program replaced the previous stock repurchase program. The~~ timing of purchases and the number of shares repurchased under the program ~~will~~is be determined by the Company’s management and will depend on a variety of factors including stock price, trading volume and other general market and economic conditions, its assessment of alternative uses of capital, regulatory requirements and other factors.

The Board of Directors approved the aforementioned stock repurchase programs believing it advantageous to the Company and its stockholders to repurchase shares of the Company’s common stock from time to time at prices below what the Board of Directors believed to be the intrinsic value of the Company’s common stock.

~~funds,~~The orBoard ~~any~~of ~~requirement~~Directors toapproved ~~post~~the aaforementioned ~~significant~~stock ~~letter~~repurchase ofprograms ~~credit~~believing it advantageous to the ~~Department,~~Company ~~may~~and ~~have~~its astockholders ~~significant~~to ~~impact~~repurchase onshares ~~our~~of ~~operations~~the ~~and~~Company’s ~~our~~common ~~financial~~stock ~~condition.~~from Intime ~~addition,~~to ~~our~~time ~~financial~~at ~~performance~~prices isbelow ~~dependent~~what on the ~~level~~Board of ~~student~~Directors ~~enrollments~~believed ~~which~~to ~~could~~ be ~~impacted~~the byintrinsic ~~external~~value ~~factors.~~of ~~See Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for~~ the ~~year~~Company’s ~~ended~~common ~~December 31, 2023~~stock.

The discussion above reflects management’s expectations regarding liquidity; however, as a result of the significance of the Title IV Program funds received by our students, we are highly dependent on these funds to operate our business. Any reduction in the level of Title IV funds that our students are eligible to receive or any impact on timing or our ability to receive Title IV Program funds, or any requirement to post a significant letter of credit to the Department, may have a significant impact on our operations and our financial condition. In addition, our financial performance is dependent on the level of student enrollments which could be impacted by external factors. See Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Sources and Uses of Cash

Operating Cash Flows

During the ~~years~~quarters ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, net cash flows provided by operating activities totaled $~~144~~65.01 million and $9854.85 million, respectively. The increase in net cash flows ~~provided~~from by operating activities for the current ~~year~~quarter ~~to date as compared to the prior year to date~~ was ~~primarily~~ driven by ~~timing~~increased ofoperating ~~working capital payments and Title IV cash drawdowns, as well as certain compensation-related payments~~income.

Our primary source of cash flows from operating activities is tuition collected from our students. Our students derive the ability to pay tuition costs through the use of a variety of funding sources, including, among others, federal loan and grant programs, state grant programs, private loans and grants, institutional payment plans, private and institutional scholarships and cash payments.

For further discussion of Title IV Program funding and other funding sources for our students, see Item 1, “Business - Student Financial Aid and Related Federal Regulation,” in our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024.

Our primary uses of cash to support our operating activities include, among other things, cash paid and benefits provided to our employees for services, to vendors for products and services, to lessors for rents and operating costs related to leased facilities, to suppliers for textbooks and other institution supplies, and to federal, state and local governments for income and other taxes.

Investing Cash Flows

During the ~~year~~quarter ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025, net cash flows provided by investing activities totaled $71.32 million compared to net cash flows used in investing activities of $3130.28 million for the prior year ~~to date~~quarter.

Purchases and Sales of Available-for-Sale Investments. Purchases and sales of available-for-sale investments resulted in a net cash inflow of $102.39 million for the current ~~year~~quarter ~~to date~~ as compared to a net cash outflow of $2629.46 million for the prior year ~~to date~~quarter.

Capital Expenditures. Capital expenditures ~~decreased~~increased to $31.07 million for the ~~year~~quarter ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025 as compared to $41.82 million for the ~~year~~quarter ~~to date~~ ended ~~September~~March 3031, ~~2023~~2024. For the full year ~~2024~~2025, we expect capital expenditures to be ~~approximately~~between 1.0% and 2.0% of revenue.

Financing Cash Flows

During the ~~years~~quarters ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, net cash flows used in financing activities totaled $3144.54 million and $1215.49 million, respectively. Payments to repurchase shares of our common stock were $625.82 million for the ~~year~~quarter ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025 and $26.78 million for the ~~year~~quarter ~~to date~~ ended ~~September~~March 3031, ~~2023~~2024.

Payments of employee tax associated with stock compensation. Payments of employee tax associated with stock compensation were $37.45 million and $23.24 million for the ~~years~~quarters ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, respectively.

Payments of cash dividends and dividend equivalents. During the ~~years~~quarters ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, the Company made dividend and dividend equivalent payments of $239.2 million and $7.2 million, respectively.

Principal payments for finance leases and failed sale leaseback. During the quarter ended March 31, 2025, the Company made payments of $1.7 million for finance leases and a failed sale leaseback, both related to USAHS.

Earnout payments related to business acquisition. During the quarter ended March 31, 2025, the Company made earnout payments of $1.8 million related to the Coding Dojo acquisition.

Changes in Financial Position

Selected condensed consolidated balance sheet account changes from December 31, ~~2023~~2024 to ~~September~~March 3031, ~~2024~~2025 were as follows (dollars in thousands):

	September 30,		December 31,
	2024		2023		% Change
ASSETS
NON-CURRENT ASSETS:
Right of use asset, net		15,669		19,096		-18	%
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Income taxes		10,396		3,974		162	%
Deferred revenue		49,347		37,215		33	%

Right of use asset, net: The decrease is driven by recurring amortization of remaining ROU assets as well as impairment of certain leased assets which the Company made the decision to vacate during the current year to date.


	March 31,		December 31,
	2025		2024		% Change
ASSETS
CURRENT ASSETS:
Student receivables, net		45,672		22,807		100	%

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Income taxes		17,869		4,926		263	%
Deferred revenue		62,847		36,740		71	%
NON-CURRENT LIABILITIES:
Sale lease-back financing		56,657		-	NA
Construction financing		-		56,500		-100	%

~~Income~~ Student ~~taxes~~receivables, net: The increase ~~primarily~~is ~~relates~~driven toby ~~amounts~~timing ~~owed with respect to estimated payments~~ of ~~federal~~student ~~and~~billings ~~state income tax~~ for ~~2024~~academic terms.

~~Deferred~~Income ~~revenue~~taxes: The increase is primarily ~~related~~relates to ~~the~~amounts ~~timing~~owed ~~impact~~with ofrespect ~~the~~to ~~academic~~estimated ~~terms~~payments ~~within~~of ~~CTU~~federal and ~~AIUS~~state ~~along~~income ~~with~~tax anfor ~~increase in total student enrollments~~2025.

Deferred revenue: The increase in deferred revenue is partially driven by the USAHS acquisition as well as timing of academic terms and related student billings.

Sale lease-back financing. The increase in sale lease-back financing liability is primarily due to the recategorization of construction financing upon lease commencement due to a failed sale leaseback transaction.

Construction financing. The decrease in construction financing liability is primarily due to the recategorization of sale leaseback upon lease commencement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to financial market risks, primarily changes in interest rates. We use various techniques to manage our interest rate risk. We have no derivative financial instruments or derivative commodity instruments, and believe the risk related to cash equivalents and available -for -sale investments is limited due to the adherence to our investment policy, which focuses on capital preservation and liquidity. In addition, we use asset managers who conduct initial and ongoing credit analyses on our investment portfolio and monitor that investments are in compliance with our investment policy. Despite the investment risk mitigation strategies we employ, we may incur investment losses as a result of unusual and unpredictable market developments and may experience reduced investment earnings if the yields on investments deemed to be low risk remain low or decline.

Interest Rate Exposure

Our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell investments that have declined in market value due to changes in interest rates. At ~~September~~March 3031, ~~2024~~2025, a ~~10%~~100 basis point increase or decrease in average interest rates applicable to our investments or borrowings would not have a material impact on our future earnings, fair values or cash flows.

Our financial instruments are recorded at their fair values as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024. We believe that the exposure of our consolidated financial position and results of operations and cash flows to adverse changes in interest rates applicable to our investments is not significant.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We completed an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q (“Report”) under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September~~March 3031, ~~2024~~2025, our disclosure controls and procedures were effective to provide reasonable assurance that (i) the information required to be disclosed by us in this Report was recorded, processed, summarized and reported within the time periods specified in the rules and forms provided by the U.S. Securities and Exchange Commission (“SEC”), and (ii) information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

within the time periods specified in the rules and forms provided by the U.S. Securities and Exchange Commission (“SEC”), and (ii) information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~September~~March 3031, ~~2024~~2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on the Effectiveness of Controls

Our management does not expect that our disclosure controls and procedures or our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Note 89 “Contingencies” to our unaudited condensed consolidated financial statements is incorporated herein by reference.

Item 1A. Risk Factors

In addition to the information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Part I, Item 1A “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024, which was filed with the Securities and Exchange Commission on February 2118, ~~2024~~2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On February 20, 2024, the Board of Directors of the Company approved a ~~new~~ stock repurchase program which authorizes the Company to repurchase up to $50.0 million of the Company’s outstanding common stock. See Note 1112 “Stock Repurchase Program” to our unaudited condensed consolidated financial statements for further information.

The following table sets forth information regarding purchases made by us of shares of our common stock on a monthly basis during the ~~year~~quarter ~~to date~~ ended ~~September~~March 3031, ~~2024~~2025:

Issuer Purchases of Equity Securities

Period	Total Numberof SharesPurchased (1)		Average PricePaid per Share		Total Numberof SharesPurchased asPart of PubliclyAnnounced Plansor Programs		MaximumApproximateDollar Value ofShares thatMay Yet BePurchasedUnder the Plansor Programs (2)
December 31, 2023							$	18,528,794
December 31, 2024							$	47,106,022
January 1, 2024—January 31, 2024		-	$	-		-		18,528,794
January 1, 2025—January 31, 2025		-	$	-		-		47,106,022
February 1, 2024—February 29, 2024		220,000		17.63		220,000		14,646,422
February 1, 2025—February 28, 2025		350,000		25.81		350,000		38,065,303
March 1, 2024—March 31, 2024		358,669		17.64		164,571		47,106,022
March 1, 2025—March 31, 2025		941,657		25.17		635,000		21,894,476
April 1, 2024—April 30, 2024		-		-		-		47,106,022
Total		1,291,657				985,000
May 1, 2024—May 31, 2024		-		-		-		47,106,022
June 1, 2024—June 30, 2024		-		-		-		47,106,022
July 1, 2024—July 31, 2024		-		-		-		47,106,022
August 1, 2024—August 31, 2024		-		-		-		47,106,022
September 1, 2024—September 30, 2024		-		-		-		47,106,022
Total		578,669				384,571

(1)

Includes ~~194~~306,~~098~~657 shares delivered back to the Company for payment of withholding taxes from employees for vesting restricted stock units pursuant to the terms of the Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan.

(2)

On February 20, 2024, the Board of Directors of the Company approved a ~~new~~ stock repurchase program of up to $50.0 million which commenced on March 1, 2024 and expires on September 30, 2025.

Item 5. Other Information

~~Rule 10b5-1 Plan Elections~~None

Todd Nelson, President and Chief Executive Officer, entered into a pre-arranged stock trading plan on August 13, 2024. Mr. Nelson's plan provides for the sale between January 2, 2025 and July 31, 2025 of up to 12,472 shares of the Company's common stock which Mr. Nelson has the right to acquire under outstanding vested stock options, and 25% of net vested restricted stock held by Mr. Nelson upon the vesting of restricted stock units that will vest prior to July 31, 2025.

Elise Baskel, Senior Vice President – Colorado Technical University, entered into a pre-arranged stock trading plan on August 5, 2024. Ms. Baskel’s plan provides for the sale between November 6, 2024 and August 5, 2025 of up to 18,918 shares of the

Company's common stock owned by Ms. Baskel, and 50% of net vested restricted stock held by Ms. Baskel upon the vesting of performance shares and restricted stock units that will vest prior to August 5, 2025.

John Kline, Senior Vice President - American InterContinental University System, entered into a pre-arranged stock trading plan on August 5, 2024. Mr. Kline's plan provides for the sale between November 11, 2024 and August 5, 2025 of up to 54,722 shares of the Company's common stock owned by Mr. Kline, or which Mr. Kline has the right to acquire under outstanding vested stock options.

Each of the trading plans was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, and the Company's policies regarding transactions in Company securities.

Executive Officer Appointment

On September 26, 2024, Sunitha Araamudhu was appointed to the positions of Senior Vice President – American InterContinental University System and President of American InterContinental University System. Ms. Araamudhu previously served as Chief Operating Officer of AIUS since February 23, 2022. John R. Kline will continue to serve as Senior Vice President – American InterContinental University System and was also appointed to the position of Chancellor of American InterContinental University System.

Item 6. Exhibits

The exhibits required to be filed by Item 601 of Regulation S-K are listed in the “Exhibit Index,” which is attached hereto and incorporated by reference herein.

	INDEX TO EXHIBITS
Exhibit Number	Exhibit	Incorporated by Reference to:
+31.1	Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
+31.2	Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
+32.1	Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
+32.2	Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002
+101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
+101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document
+104	The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, formatted in Inline XBRL (included in Exhibit 101)
	____
	* Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this Form 10-Q
	+Filed herewith.


	INDEX TO EXHIBITS
Exhibit Number	Exhibit	Incorporated by Reference to:

*10.1	2025 Annual Incentive Plan	Exhibit 10.1 to our Form 8-K filed on March 12, 2025

+31.1	Certification of CEO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

+31.2	Certification of CFO Pursuant to Section 302 of Sarbanes-Oxley Act of 2002

+32.1	Certification of CEO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

+32.2	Certification of CFO Pursuant to Section 906 of Sarbanes-Oxley Act of 2002

+101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

+101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbases Document

+104	The cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in Inline XBRL (included in Exhibit 101)
	____
	* Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this Form 10-Q
	+Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PERDOCEO EDUCATION CORPORATION
Date: November 12, 2024	By:	/s/ TODD S. NELSON
Date: May 1, 2025	By:	/s/ TODD S. NELSON
		Todd S. NelsonPresident and Chief Executive Officer(Principal Executive Officer)
Date: November 12, 2024	By:	/s/ ASHISH R. GHIA
Date: May 1, 2025	By:	/s/ ASHISH R. GHIA
		Ashish R. GhiaSenior Vice President and Chief Financial Officer(Principal Financial Officer)

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