Aspen Group's Profit Streak Continues Amid Strategic Overhaul

PHOENIX, AZ – March 16, 2026 – Aspen Group, Inc. (OTCQB: ASPU), an education technology holding company, today announced a record net income of $1.4 million for the third quarter of fiscal year 2026, marking its fourth consecutive quarter of profitability. The results represent a dramatic reversal from the $1.0 million net loss reported in the same quarter of the previous year, signaling that the company’s intensive restructuring and operational discipline are bearing significant fruit.

This financial turnaround comes despite a 5% year-over-year decline in total revenue to $10.4 million. The key to this paradoxical success lies in a sharp 18% reduction in operating expenses, which propelled the company to a $1.7 million operating income and an impressive 17% operating margin, a substantial leap from the 3% margin a year ago. The company also reported its fifth consecutive quarter of positive operating cash flow, which reached $1.0 million.

In a statement, Executive Chairman Michael Mathews celebrated the results. “I am pleased to announce we delivered record net income of $1.4 million in the quarter, marking another quarter of improved profitability and operating discipline,” he said. “With revenue stabilizing and operating leverage improving, we remain on track to generate continued positive operating cash flow in fiscal 2026 and deliver our most profitable year in over a decade.”

The Anatomy of a Turnaround

The foundation of Aspen Group's newfound profitability is a series of aggressive cost-cutting and efficiency measures. The company's restructuring plan, which began in earnest in the fall of 2025, has been central to this effort. A key part of this strategy involved a fifth restructuring phase implemented on September 15, 2025, which resulted in the elimination of approximately 75 positions within the parent company and its subsidiary, Aspen University.

These reductions have yielded substantial savings, with general and administrative expenses falling by over $900,000 year-over-year. The company anticipates ongoing quarterly savings of approximately $1.5 million from these compensation-related changes. The disciplined approach is further reflected in the company's Adjusted EBITDA, a non-GAAP measure of profitability, which soared to $3.0 million for the quarter, nearly doubling the $1.7 million from the prior year.

The strategic belt-tightening has been comprehensive, touching everything from staffing to marketing. By intentionally operating at a 'maintenance level' of marketing spend, the company has prioritized its bottom line, a move that has successfully steered it out of a period of revenue contraction and unprofitability.

A Tale of Two Universities

A closer look at Aspen Group's subsidiaries reveals a bifurcated strategy that explains the disconnect between falling overall revenue and rising profits. The company operates two online institutions: United States University (USU) and Aspen University (AU).

United States University has emerged as the clear growth engine. It posted its sixth consecutive quarter of year-over-year revenue growth, with a 4% increase in the third quarter. This growth was achieved despite minimal marketing spend and is attributed to strong organic lead flow, a high number of students returning from inactive status, and increased revenue per student. The Master of Science in Nursing – Family Nurse Practitioner (MSN-FNP) program has been a standout performer, with more students entering their second year, which includes higher-cost clinical rotations and reflects recent tuition increases. USU's gross margin expanded significantly to 78%, up from 70% a year ago.

In stark contrast, Aspen University’s revenue declined by 19%. This was not an unexpected market-driven failure but a deliberate, strategic contraction. The company has drastically reduced marketing for AU and, more significantly, discontinued all new student enrollments. This move is a direct consequence of the company's plan to merge Aspen University into United States University, with USU serving as the surviving entity pending regulatory approvals. The decline in AU's student body is therefore a managed part of a larger corporate consolidation.

High-Stakes Horizon: Merger and Refinancing

While celebrating its current financial health, Aspen Group faces two critical hurdles that will define its future trajectory. The first is the successful completion of the merger. Consolidating AU and USU is expected to create significant long-term operational efficiencies, streamline marketing, and unify the company's educational offerings under USU's strong WASC regional accreditation. However, the process remains contingent on navigating the complex landscape of regulatory and accreditation approvals from multiple bodies.

The more immediate challenge is a looming debt deadline. The company is actively working to refinance approximately $5.8 million in 15% Debentures that mature in May 2026. With an unrestricted cash balance of just $0.4 million as of March 6, 2026, a successful refinancing is not just a strategic goal but an operational necessity.

Mr. Mathews addressed the issue directly, stating, “The Company is actively evaluating refinancing alternatives for its debt... Management has begun discussions with potential financing sources and is exploring options to extend maturities, improve the Company’s capital structure, and support continued operational momentum.”

The outcome of these negotiations is paramount, as the company’s plan to reignite enrollment growth is directly tied to it. Management has been clear that it intends to ramp up marketing spend significantly, but only after the debt is successfully refinanced. This future marketing investment is seen as the key to leveraging the leaner, more profitable operational base to grow the student body of the newly consolidated university. With its operational house in order, Aspen Group's ability to capitalize on its newfound stability now rests on successfully navigating the critical financial and strategic maneuvers of the coming months.