Net Loss Improves to ($0.6) Million as All Three Business Units Deliver Profitability on a Net Income Basis
Company EBITDA Positive (a non-GAAP financial measure), Delivering $0.5 Million or 4% marginNEW YORK, Dec. 10, 2019 (GLOBE NEWSWIRE) — Aspen Group, Inc. (Nasdaq: ASPU)( “the Company or AGI”), an education technology holding company, today announced financial results for its 2020 fiscal second quarter ended October 31, 2019.Second Quarter and Year-to-Date Fiscal Year 2020 SummarySecond Quarter Performance HighlightsRevenue accelerated to 49% growth, while marketing expenses declined by 11% year-over-year, driving a gross margin improvement of 1,300 basis points or 63%Focused marketing expenditure resulted in record enrollment growth in highest lifetime value (LTV) degree programsBookings rose 92% to $31.3 million lifting average revenue per enrollment (ARPU) by 35% to $14,125Aspen University Online and Pre-Licensure BSN units, as well as United States University, all delivered net income due to improved operating efficiencies and lower enrollment costsCash used in operations declined $1.8 million or 84% year-over-year to $0.3 millionMichael Mathews, Chairman and CEO of AGI, commented, “Our strong momentum in Fiscal 2020 accelerated during the second quarter with revenue increasing 49% year-over-year, while operating expense increased only 22% year-over-year due to diligent expense management and improved operating leverage. This resulted in a significant reduction in our net loss and generated positive EBITDA in the quarter. By targeting our marketing spend on degree programs with the highest lifetime value (LTV), we had record bookings in the quarter increasing by 92%, as well as record average revenue per enrollment or ARPU increasing by 35%. This is the first quarter since acquiring United States University in December 2017 and launching our Pre-Licensure BSN nursing program in July 2018 that all three business units, Aspen University Online and Pre-Licensure BSN, as well as United States University, produced net income in the quarter. We remain committed to our goals of sustainable long-term growth, improving profitability of our universities and improvement in cash flow from operations. Given the strong performance in the first half of fiscal year 2020, we now expect annual revenue growth to meet or exceed 41% for the full fiscal year. Our improving financial performance will continue to support our Pre-Licensure BSN expansion strategy, an important long-term growth and profitability catalyst for the Company.”*See “Non-GAAP Financial Measures” at page 3.Fiscal 2020 Second Quarter Financial and Operational Results (versus Fiscal 2019 Second Quarter):New student enrollments increased 42% to quarterly record of 2,217Aspen University (AU) new student enrollments increased 41% to 1,823United States University (USU) new student enrollments increased 45% to 394Weighted average cost of enrollment declined 25% driven by reduced lead costs and higher conversion ratesBookings increased 92% to $31.3 million due to strong growth in highest LTV degree programsAverage revenue per enrollment (ARPU) increased 35% over the prior year to $14,125Total student enrollment grew 35% over the prior year to 10,718Total nursing student body increased to 8,904 from 6,206 students, or 83% versus 78% of total student enrollmentAGI delivered 2,217 new student enrollments for the second fiscal quarter ended October 31, 2019 (Q2 2020), a 42% increase year-over-year. Aspen University accounted for 1,823 new student enrollments (including 190 Doctoral enrollments and 437 Pre-licensure BSN AZ campus enrollments). United States University (“USU”) accounted for 394 new student enrollments (primarily MSN-Family Nurse Practitioner (“FNP”) enrollments). Enrollment growth at Aspen University was highlighted by the Doctoral unit, which increased by 43% year-over-year, and the Pre-Licensure BSN unit, which increased 58% on a sequential basis. The sequential acceleration of growth in the Pre-Licensure BSN unit is a result of a full quarter of enrollments across both campuses that are now open in Phoenix, AZ.Below is a comparison of enrollments and bookings** from Q2 2020 to the quarter ended October 31, 2018 (Q2 2019).  The Company’s total enrollments rose 42% year-over-year, while bookings increased 92% year-over-year to $31.3 million from $16.3 million. This translates to a 35% increase in average revenue per user (ARPU)** year-over-year, from $10,434 to $14,125, driven by the Company’s focused marketing spending on the highest LTV degree programs during the quarter.
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