Aspen Group (NASDAQ:ASPU) shares hiked early Wednesday after the online education company reported better-than-expected quarterly revenue and improved profit margins. Revenue decreased by 10% to $17.1 million compared to $18.9 million
This morning’s news release pointed to the restructuring plan increases year-over-year gross margin to 60% from 51%, and narrows net loss to $(2.3) million from $(2.9) million Adjusted EBITDA of $0.5 million versus $(0.7) million in prior year quarter. Positive operating cash flow of $1.0 million versus $(1.0) million in prior year quarter.
“We are encouraged by our second quarter results which reflect the impact of reduced marketing and general and administrative spend as part of our restructuring initiative that we launched in the prior quarter,” said CEO Michael Mathews. “Gross margin improved by 900 basis points on lower revenue, and we narrowed our net loss and delivered positive adjusted EBITDA. USU’s revenue grew 9%, due to continued strong demand for the MSN-FNP program, which helped to offset the expected decline in AU revenue coming from the teach-out of our BSN pre-licensure program and lower marketing spend.”
AU revenue decreased by $2.4 million or 19% in Fiscal Q2 2023 compared to Fiscal Q2 2022, with the pre-licensure program accounting for $0.5 million of the decrease. The remainder of the decrease is primarily due to lower post-licensure enrollments attributed to lower marketing spend related to the restructuring initiated in Fiscal Q1 2023. The active student body at AU decreased from 11,184 at October 31, 2021 to 7,973 at October 31, 2022.
ASPU shares popped 12 cents, or 34.6%, to 47 cents.
