Aspen drops 20% after announcing Q2 2022 financial results

Aspen Group Inc. (Nasdaq: ASPU) dropped 25% and announced an $18.9 million revenue for the second quarter of 2022. 

Financial highlights 

The GAAP gross profit comprises promotional and marketing costs and a $0,9 million and $0.5 million amortization expense. 

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AGI’s Chief Executive Officer and Chairman, Michael Mathews, claimed that their high-LTV degree business operations increased to about 54% of the company’s total revenue in the second quarter. 

He says that this was fueled by continued significant growth in their BSN (Pre-Licensure) and MSN FNP (Family Nurse Practitioners) programs reduced their net loss by around 35% year-over-year. Mr. Mathews said:

Beginning in the second half of June, the rapid rise in COVID hospitalizations increased the workload of licensed registered nurses (RNs) on the front lines of patient care.

The CEO continued:

RNs represented 69% of our total active student body at the end of the second quarter of fiscal year 2022 and are the total population of our students primarily impacted by the COVID pandemic trends.

Covid-19 update

Nursing students represented 12,442 or 87% of Aspen’s 14,318 student body at the close of Q2 2022. Of the 12,442, 2,500 of them are BSN Pre-Licensure students spread out across the company’s four metro locations (Nashville, Tampa, Austin, and Pheonix). 

The remainder is RNs searching for an advanced degree, such as RN to MSN-FNP, MSN, BSN, or DNP degree courses. Therefore, the remaining 9,942 represent 69% of the entire student body and are the ones mainly affected by the coronavirus pandemic. 

Aspen witnessed lower course starts than expected in June 2021 through to October of the same year among its RN student body. 

Financial Outlook

The company expects its AU’s BSN Pre-Licensure and USU’s MSN-FBP programs to grow as it expects to execute its strategy to broaden its two best LTV operations for the rest of the 2022 fiscal year. 

While the ongoing Covid-19 pandemic might continue to affect the growth of post-licensure revenue, Aspen plans to prudently manage its discretionary G&A budget to reduce the impact of revenue shortfalls. 

However, the company says that it won’t remove spending important to the execution of its long-term strategic initiatives.