Quarterly Report for Quarter Ending SEPTEMBER 30, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL 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, 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:

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

Perdoceo's accredited academic institutions offer a quality postsecondary education to a diverse student population, with fully online, campus-based and hybrid learning programs. The Company's academic institutions - Colorado Technical University ("CTU"), 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 prepares medical professionals to provide quality medical care to communities across the country primarily through its graduate health sciences degrees offerings 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 and communities needing a qualified workforce.

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 condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q from the date of acquisition.

Our reporting segments are determined in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 280 - Segment Reportingand 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 three reporting segments: CTU, AIUS and USAHS.

During the third quarter of 2025, the oversight and management of the non-degree professional development and continuing education programs offered by Hippo Education ("Hippo") were transitioned from the CTU segment to the AIUS segment. All prior periods have been recast to reflect this change for comparability, and the results of operations related to Hippo are now reported within the AIUS segment for all periods presented.

Regulatory Environment and Political Uncertainty

As indicated in "Scrutiny of the For-Profit Postsecondary Education Sector" section within Item 1, "Business" in our Annual Report on Form 10-K for the year ended December 31, 2024, the for-profit education industry is scrutinized by various policymakers, agencies and interest groups. Congressional hearings and roundtable discussions were previously held regarding 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. Many of the most highly criticized institutions have been closed now for several years.

The November 2024 federal elections resulted in a new President and Congress. We cannot predict the actions that the new Administration or Congress may take or their effect on the higher education sector. The new Congress or Administration may delay, block, modify, or eliminate certain Title IV and other regulations applicable to higher education institutions. In addition, the new Administration may interpret, apply, and enforce Title IV and other regulations in a manner different from current Department guidance and practice. We expect to continue to need to operate nimbly, making necessary changes to the extent possible to comply with new rules or interpretations as well as new interpretations of existing rules.

We encourage you to review Item 1, "Business," and Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2024 to learn more about our highly regulated industry and related risks and uncertainties, in addition to the MD&A in our 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 non-cash items as a means to better 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 operating 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 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.

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.

2025 Third Quarter Overview

During the third quarter ended September 30, 2025 ("current quarter"), our academic institutions remained focused on furthering their goal of changing lives through education and preparing learners for essential skills needed in today's job market. CTU and AIUS provide diverse, career-focused degree programs designed to help students excel in a rapidly changing job market, while USAHS develops professionals to serve communities across the country with quality healthcare services. During the current quarter, we experienced total enrollment growth, supported by continued momentum in student retention and engagement as well as increased interest from prospective students looking to pursue a degree at our academic institutions. During the quarter, we also continued to invest in student technology and student support processes that we believe further enhance student experiences and academic outcomes.

Total student enrollments increased 15.1% at September 30, 2025 as compared to September 30, 2024, primarily driven by the St. Augustine acquisition and enrollment growth at CTU. CTU's total student enrollments increased 6.7% as compared to the prior year quarter end, supported by high levels of student retention and engagement, growth within the corporate student program and higher levels of prospective student interest. Total student enrollments decreased 2.9% at AIUS for the current quarter end as compared to the prior year quarter end, driven, in part by the academic calendar at AIUS that resulted in a lower number of enrollment days in the current quarter as compared to the prior year quarter. Lastly, for USAHS, the fall term which began in September of 2025 had total student enrollments of 4,420 as of the current quarter end.

For the current quarter, our academic institutions continued to experience increased levels of prospective student interest and we continued to refine our marketing and admissions spending strategies, including integrating artificial intelligence to help identify and engage with prospective students who, we believe, are more likely to succeed at one of our academic institutions. We also continued to improve the technology that supports our admissions, academic and student support functions to ensure that our teams are well-equipped with the necessary tools to counsel and support the growing number of students enrolled at one of our academic institutions.

We expect the high levels of student retention and student engagement we experienced over the past few quarters, 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 primarily driven by the USAHS acquisition as well as expected growth in total student enrollments as a result of these trends.

Financial Highlights

Revenue for the current quarter increased by 24.8% or $42.0 million as compared to the prior year quarter, primarily due to $38.0 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 in 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 $51.0 million as compared to operating income of $44.8 million in the prior year quarter, driven by increased operating income within CTU and AIUS as well as reduced operating losses within Corporate and Other. The increase in operating income for the current quarter was a result of revenue growth at CTU and continued management of operating expenses.

The Company believes it is useful to present non-GAAP financial measures, such as adjusted operating income, which exclude certain non-cash items, as a means to better understand the core performance of its operations. (See tables below for a GAAP to non-GAAP reconciliation.) Adjusted operating income was $61.0 million for the current quarter as compared to $47.8 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, 2025 and 2024 is presented below (dollars in thousands, unless otherwise noted):

Regulatory Update

Student Loan Program Limits

In July 2025, Congress passed, and President Trump signed into law a reconciliation bill, H.R. 1 (the "Act") that made broad changes to many areas of federal spending. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Overview-2025 Second Quarter Overview-Recent Legislative Development," in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 for a description of higher education related changes adopted.

The provisions in the Act must be implemented by the Department. On September 29, 2025, the Department convened the first of two negotiated rulemaking committees scheduled to meet this fall and early next year. This first committee, referred to as Reimagining and Improving Education (RISE), began discussions regarding changes to the federal student loan programs to implement statutory changes to the Title IV programs under the Higher Education Act of 1965, as amended ("HEA"), included in the Act. Based on current information, student Title IV borrowing at each of AIUS and CTU has generally been within the new loan levels and limits contemplated by the Act. At USAHS, many of its graduate students have historically relied on Grad PLUS loans to finance a portion of their education. The Act phases out the Grad PLUS loan program which becomes unavailable for new students enrolling after July 1, 2026 and replaces it with a more targeted funding framework. While graduate and professional students were formerly considered a single category of students with comparable loan limits, the new targeted loan framework treats graduate and professional students separately, providing higher Stafford Loan limits to students who are enrolled in "professional programs" as currently defined in regulation. The Act allows for the Department to clarify the existing definition of "professional programs" and designate additional programs that satisfy that definition for inclusion in the current non-exhaustive regulatory list. These topics are being considered in the RISE negotiated rulemaking. Any final definition or interpretation of "professional programs" adopted by the Department that conflicts with the authority granted in the Act could be subject to legal challenge and judicial review.

We are monitoring these discussions and the Department's interpretations to assess the impact on federal funding availability for new USAHS students after July 1, 2026. Based on historical borrowing patterns, most USAHS graduate students' borrowing has generally been within the levels and limits established for "professional programs," if our programs ultimately qualify as such under the Department's final regulations. In addition, we are actively engaging in conversations with private lending institutions to evaluate and analyze how they can further expand loan programs currently offered to students regardless of whether the new federal loan limits will cover the full cost of attendance for certain students. Although USAHS's programs are in the types of in-demand licensed health care fields that have been the subject of the ongoing discussions for "professional programs" in the RISE rulemaking, there is

uncertainty regarding the Department's final determination concerning which programs will be eligible for the higher federal loan funding and whether students at USAHS will need to rely on private lending sources to fund their education. In all cases we will continue to support responsible student borrowing of federal financial aid prior to consideration of alternative sources of private lending for those that may need to borrow to pursue their programs of study.

Gainful Employment

On October 10, 2023, the Biden Administration published final regulations for a new rule defining what qualifies as "gainful employment" ("GE"). See Item 1, "Business - Student Financial Aid and Related Federal Regulation - GE and FVT Negotiated Rulemaking," in our Annual Report on Form 10-K for the year ended December 31, 2024 for a description of this regulation.

On December 22, 2023, the American Association of Cosmetology Schools ("AACS") filed a lawsuit in the U.S. District Court for the Northern District of Texas seeking to set aside the GE rule. The AACS action challenges the rule on constitutional, statutory and administrative-law grounds, alleging that the Department exceeded its authority under the HEA and violated the Administrative Procedure Act. On March 20, 2024, Ogle School Management, LLC and Tricoci University of Beauty Culture, LLC filed a separate lawsuit in the same court, asserting that the Department exceeded its statutory authority and acted arbitrarily and capriciously in developing and applying the GE metrics and disclosure requirements. On October 2, 2025, the district court ruled in favor of the Department and upheld the GE rule. The plaintiffs have 60 days to file notices of appeal, and we expect at least one of the parties to appeal.

The Act requires the Department to undertake rulemaking to implement a new, universally applicable earnings-premium standard for program eligibility under Title IV. This new requirement appears to overlap with, and in some respects is inconsistent with, the existing GE rule, which applies primarily to programs at proprietary schools. The Company believes that this new universally applied earnings requirement will be less restrictive than the existing GE rules. This assessment remains subject to the Department's forthcoming rulemaking and interpretive decisions, and there can be no assurance regarding the ultimate scope, rigor, or interaction of the two frameworks. Any failure to meet the new earnings-premium requirement would only impact Title IV loan eligibility and would not impact Pell Grant eligibility. The Department has scheduled a second negotiating committee, referred to as Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD), to begin negotiations on December 8, 2025 on regulations to implement these requirements and potentially review and reconcile the overlapping and inconsistent provisions of the GE rule.

We are continuing to evaluate the new earnings premium requirement and to monitor ongoing discussions regarding any potential changes to the gainful employment regulations. Given the complexity of the rules, lack of access to underlying earnings data used to calculate the metrics, and the absence of formal regulations, we are unable to determine the ultimate impact or potential timing of these requirements on our business at this time. See Item 1, "Business - Student Financial Aid and Related Federal Regulation - GE and FVT Negotiated Rulemaking," in our Annual Report on Form 10-K for the year ended December 31, 2024 for more information. Also see "Management's Discussion and Analysis of Financial Condition and Results of Operations-Overview-2025 Second Quarter Overview-Recent Legislative Development," in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 for a discussion of the new program eligibility requirement. A loss or material reduction in eligible Title IV programs due to either of these requirements would materially impact our student enrollments and profitability.

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 30, 2025 and 2024 (dollars in thousands):

Revenue

The current quarter and year to date revenue increased by 24.8% or $42.0 million and 25.7% or $129.6 million, respectively, as compared to the prior year periods. The increase was primarily driven by the acquisition of USAHS completed in December 2024 that was not part of the comparative prior year periods, as well as increases in revenue for both the current quarter and year to date at CTU.

Educational Services and Facilities Expense (dollars in thousands)

The educational services and facilities expense for the current quarter and year to date increased by 73.7% or $20.9 million and 72.7% or $62.3 million, respectively, as compared to the prior year periods. The increase was primarily due to a full quarter of expenses related to the USAHS acquisition as compared to no expenses in the prior year periods for USAHS.

General and Administrative Expense (dollars in thousands)

The general and administrative expense for the current quarter and year to date increased by 8.6% or $8.1 million and 11.1% or $30.0 million, respectively, as compared to the prior year periods. The increase was due to expenses related to the USAHS acquisition during the current year periods as compared to no expenses in the prior year periods, which more than offset the decrease in expenses for the remaining institutions.

Advertising and marketing expense for the current quarter and year to date increased by 10.4% or $2.8 million and 14.0% or $10.4 million, respectively, as compared to the prior year periods. The increase was primarily due to advertising and marketing expenses related to the USAHS acquisition during the current year periods as compared to no expenses in the prior year periods.

Admissions expense for the current quarter and year to date increased by 8.8% or $1.8 million and 9.4% or $5.7 million, respectively, as compared to the prior year periods. The increase was primarily due to admissions expenses related to the USAHS acquisition during the current year periods as compared to no expenses in the prior year periods. Excluding USAHS expenses, admissions expenses would have increased slightly as compared to the prior year periods, primarily due to efforts supporting the growth in total student enrollments at CTU.

The administrative expense for the current quarter and year to date increased by 11.4% or $4.3 million and 12.5% or $14.3 million, respectively, as compared to the prior year periods. The increase was due to administrative expenses related to the USAHS acquisition during the current year periods as compared to no expenses in the prior year periods, which more than offset the decrease in expenses within Corporate and Other.

Bad debt expense incurred by each of our segments during the quarters and years to date ended September 30, 2025 and 2024 was as follows (dollars in thousands):

________________

(1) The prior year operating results for CTU and AIUS were recast to reflect the transition of the Hippo Education institution from CTU to AIUS.

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

Bad debt expense for the current quarter and year to date decreased by 9.4% or $0.8 million and 2.0% or $0.4 million, respectively, as compared to the prior year periods. The improvement for the current quarter and year-to-date periods was primarily driven by decreases at AIUS, which fully offset increased bad debt expenses at CTU and expense for USAHS.

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 and year to date increased by $7.0 million and $22.8 million, respectively, as compared to the prior year periods, 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 and year to date increased by 13.8% or $6.2 million and 12.4% or $17.0 million, respectively, as compared to the prior year periods. This improvement was primarily driven by increased revenue, which more than offset the increases in operating expenses, as compared to the prior year periods.

Provision for Income Taxes

For the quarter and year to date ended September 30, 2025, we recorded a provision for income taxes of $16.2 million reflecting an effective tax rate of 28.9% and $44.2 million reflecting an effective tax rate of 26.2%, respectively, as compared to a provision for income taxes of $14.1 million reflecting an effective tax rate of 26.9% and $42.1 million reflecting an effective tax rate of 26.6% for the respective prior year periods. The effective tax rate for the current quarter and year to date was impacted by the tax effect of stock-based compensation, which decreased the effective tax rate for the quarter and year to date by 0.2% and 2.0%, respectively. For the full year 2025, we expect our effective tax rate to be between 26.0% and 26.5%.

SEGMENT RESULTS OF OPERATIONS

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

________________

(1) The prior year operating results for CTU and AIUS were recast to reflect the transition of the Hippo Education institution from CTU to AIUS.

(2) USAHS includes results of operations beginning on the acquisition date of December 2, 2024. Operating income (loss) for the current quarter and year to date includes $7.1 million and $23.2 million, respectively, of depreciation and amortization expense associated with acquired tangible and intangible assets as well as finance leases.

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(1) Perdoceo completed the acquisition of USAHS on December 2, 2024.

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 of the most recent academic term. Total student enrollments do not include learners participating in: a) non-degree seeking and professional development programs, and b) degree seeking, non-Title IV, self-paced programs at our universities.

CTU. Current quarter and year to date revenue increased by 4.3% or $4.8 million and 4.7% or $15.5 million, respectively, as compared to the prior year periods. The increase was driven by total student enrollment growth of 6.7% at September 30, 2025 as compared to the prior year quarter end. CTU's total student enrollment growth was supported by high levels of student retention and engagement, growth in the corporate student program and higher levels of prospective student interest.

Current quarter and year to date operating income for CTU increased by 6.7% or $3.0 million and 7.4% or $9.8 million, respectively, as compared to the prior year periods driven by the increase in revenue discussed above, which more than offset increased operating expenses.

AIUS. Current quarter revenue decreased slightly by 1.2% or $0.7 million as compared to the prior year period and remained relatively stable for the current year to date as compared to the prior year period. Total student enrollments decreased 2.9% at September 30, 2025, as compared to the prior year quarter end, driven by the academic calendar at AIUS that resulted in a lower number of enrollment days in the quarter as compared to prior year quarter.

Current quarter and year to date operating income for AIUS increased by 8.7% or $0.7 million and 10.6% or $3.1 million, respectively, as compared to the prior year period, driven by lower operating expenses as compared to the prior year periods.

USAHS. Revenue for the current quarter and year to date was approximately $38.0 million and $113.9 million, respectively. For the year-to-date period, USAHS reported operating losses of approximately $2.0 million, while reporting breakeven results for the current quarter. For the current quarter and year-to-date period, USAHS reported depreciation and amortization expenses of $7.1 million and $23.2 million, respectively, associated with acquired tangible and intangible assets, along with 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 and year to date improved by 27.7% or $2.3 million and 26.2% or $6.1 million, respectively, as compared to the prior year periods, primarily due to lower acquisition-related expenses in both the current quarter and year to date as compared to the prior year periods.

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, 2024. Note 2 "Summary of Significant Accounting Policies" of the notes to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 also includes a discussion of these and other significant accounting policies.

LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES

As of September 30, 2025, cash, cash equivalents, restricted cash and available-for-sale short-term investments ("cash balances")totaled $668.6 million. Restricted cash as of September 30, 2025 was $21.3 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 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, share repurchases and quarterly dividend payments through at least the next 12 months primarily with cash generated from 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 July 31, 2025, the Board of Directors of the Company approved a new stock repurchase program for up to $75.0 million which commenced on July 31, 2025 and expires January 31, 2027. The new stock repurchase program replaced the previous stock repurchase program approved on February 20, 2024. The timing of purchases and the number of shares repurchased under the program is 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.

During the year to date ended September 30, 2025, we repurchased 2.3 million shares of our common stock for $66.7 million at an average price of $29.07 per share, of which approximately 1.6 million shares of our common stock for approximately $46.1 million were purchased under the previous stock repurchase program. As of September 30, 2025, approximately $54.3 million was available under our current 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 reduced the weighted average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

On October 31, 2025 the Board of Directors declared a quarterly dividend of $0.15 per share, which will be paid on December 12, 2025 for holders of record of common stock as of November 28, 2025. Any decision to pay future cash dividends, however, will be made by the board of directors and depend on the Company's available retained earnings, financial condition and other relevant factors. The Company expects quarterly dividend payments to be an integral and growing part of its balanced capital allocation strategy that also prioritizes investments in student support and technology projects, while also evaluating future acquisitions and share repurchases.

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 to date ended September 30, 2025 and 2024, net cash flows provided from operating activities totaled $185.1 million and $144.0 million, respectively. The increase in net cash flows from operating activities for the current year to date was primarily driven by increased operating 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, 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 to date ended September 30, 2025, net cash flows used in investing activities totaled $29.8 million compared to net cash flows provided by investing activities of $7.3 million for the prior year to date.

Purchases and Sales of Available-for-Sale Investments.Purchases and sales of available-for-sale investments resulted in a net cash outflow of $24.3 million for the current year to date as compared to a net cash inflow of $10.3 million for the prior year to date.

Capital Expenditures. Capital expenditures increased to $6.3 million for the year to date ended September 30, 2025 as compared to $3.0 million for the year to date ended September 30, 2024. For the full year 2025, we expect capital expenditures to be approximately 1.5% of revenue.

Business Acquisition. The Company received a working capital true up of $0.8 million from the former owners of USAHS in relation to the USAHS acquisition during the year to date ended September 30, 2025.

Financing Cash Flows

During the years to date ended September 30, 2025 and 2024, net cash flows used in financing activities totaled $106.3 million and $31.5 million, respectively. Payments to repurchase shares of our common stock were $66.7 million for the year to date ended September 30, 2025 and $6.8 million for the year to date ended September 30, 2024.

Payments of employee tax associated with stock compensation. Payments of employee tax associated with stock compensation were $7.5 million and $3.4 million for the years to date ended September 30, 2025 and 2024, respectively.

Payments of cash dividends and dividend equivalents. During the years to date ended September 30, 2025 and 2024, the Company made dividend and dividend equivalent payments of $27.4 million and $23.2 million, respectively.

Principal payments for finance leases and failed sale leaseback. During the year to date ended September 30, 2025, the Company made payments of $4.2 million for finance leases and a failed sale leaseback, both related to USAHS.

Earnout payments related to business acquisition. During the year to date ended September 30, 2025, the Company made cash 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, 2024 to September 30, 2025 were as follows (dollars in thousands):

Student receivables, net: The increase is driven by timing of student billings for academic terms at our universities.

Accrued expenses - income taxes: The increase primarily relates to amounts owed with respect to estimated payments of federal and state income tax for 2025.

Accrued expenses - other: The decrease primarily relates to cash and stock earnout payments for a previous acquisition.

Deferred revenue: The increase in deferred revenue is driven by 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 the failed sale leaseback upon lease commencement.