American Public Education, Inc. (APEI) on Q4 2021 Results - Earnings Call Transcript
Operator: Good evening, my name is Chris and I’ll be your conference operator today. At this time, I’d like to welcome everyone to the APEI Fourth Quarter and Full Year 2021 Results Conference Call. . Ryan Koren, AVP of Investor Relations, you may begin.
Ryan Koren: Thank you, and good afternoon, everyone. Welcome to the American Public Education's conference call to discuss fourth quarter and full year 2021 financial and operating results. Joining me on the call today are Angela Selden, President and Chief Executive Officer; Rick Sunderland, Executive Vice President and Chief Financial Officer; and Steve Somers, Senior Vice President and Chief Strategy and Corporate Development Officer. Materials for the conference call today are available under the Events and Presentations section of the APEI website. Please note that statements made during this conference call and any accompanying presentation materials regarding APEI and its subsidiaries that are not historical facts may be forward-looking statements based on current expectations, assumptions, estimates and projections about APEI and the industry. In some cases, forward-looking statements may be identified by words such as anticipate, believe, seek, could, estimate, expect, can, may, plan, should, will, would and similar words or their opposites. Forward-looking statements include, without limitation, statements regarding the expected growth, registrations and enrollments; revenue; net income; earnings per share; and EBITDA; earning guidance, expected benefits of the acquisition of Rasmussen University; future impacts of the COVID-19 pandemic on enrollments as the pandemic abates; organizational changes; plans with respect to recent, current and future initiatives; and future demand or expectation for online enrollment and nursing education. Forward-looking statements are subject to risks and uncertainty that could cause actual results to differ materially from those expressed or implied by such statements. These risks and uncertainties include among others risks related to actions taken by the department of defense or branches of the U.S. armed forces, including actions related to the disruption and suspension of the tuition of systems program. Challenges with integrating acquisitions, regulatory matters, competitive pressures, and those prescribed in today's press release and in the Company's Form 10-K filed with the SEC today, and another SEC filing. The Company undertakes no obligation to update publicly any forward-looking statement for any reason unless required by law, even if new information becomes available or other events occur in the future. This presentation contains references to non-GAAP financial information that we use to measure our business. A reconciliation between the non-GAAP financial measures we use and the most directly comparable GAAP measures are located in the appendix to our presentation and in our financial statements. Management believes that our presentation of non-GAAP financial information provides useful supplemental information to investors regarding our results of operations and should only be considered in addition to, and not as a substitute for or superior to any measure of financial performance prepared in accordance with GAAP. I will now turn the call over to our CEO, Angela Selden. Angie, please go ahead.
Angela Selden: Thank you, Ryan. And thank all for joining us today and for your interest in American Public Education. 2021 was a highly transformative year for APEI as we accelerated and expanded our efforts in Educating the Service-minded. First, by successfully acquiring Rasmussen University, which roughly doubled the size of APEI in terms of revenue. APEI became the number one educator of pre-licensure ADN and PM Nurses in the United States and diversify this revenue to one third nursing, one third military and veterans, and one third online education. Next, we acquired Graduate School USA on January 1, 2022, and created APEI platform for career and workforce training. Further diversifying our revenue streams by educating the service-minded federal workforce. In addition to our inorganic growth activities, we have many accomplishments for which to be proud, including record enrollment growth at Hondros College of Nursing, a rebound in registration momentum at APUS with record military enrollments and year-over-year enrollment growth and record nursing enrollment at Rasmussen. All while maintaining a strong commitment to regulatory and public company compliance across the enterprise. This includes the reaffirmation of accreditation by the higher learning commission or HLC at Rasmussen in December, 2020, and at APUS in August 2021, both which have been awarded an open pathway designation, which affords institutions greater opportunity to pursue institutional improvement projects than the alternative standard pathway designation. Before we move to detailed financial results and enrollment momentum, I would like to take a moment to discuss APEI’s distinctive position in America's economy and society. One that we believe is unique and puts APEI squarely at the center of America's greater strength. America has the best post-secondary education system on the planet, where students from all over the world fly to attend university here. APEI’s institutions have achieved top quality accreditations, attracting students attending our institutions from over 90 countries during 2021 alone. America has the world's strongest military and APEI has the honor of being the number 1 educator of active duty military and veterans. America has the world's best healthcare systems and providers, and APEI now has the honor of educating the largest number of ADN and PN pre-licensure nurses in the United States. And finally, America has the most accessible and efficient capital markets in the world. APEI as a public company has successfully leveraged those capital markets and in particular in 2021 to strategically grow. We believe APEI is the only company at the intersection of America's greatest strength, post-secondary education, military, healthcare, and capital markets. Our education of service-minded military and veteran students provides steady enrollments and increasing market share. Our national nursing platform is a growth engine, squarely position to help mitigate the chronic nursing shortage. And our over 350 programs and certificates at APUS, Rasmussen, Hondros and GSUSA provide accessible, affordable, high quality education, and ongoing professional development to students at any stage of their career journey. It's no better time to invest in the future of America by investing in APEI. During today's call, I will be providing more detail on the enrollment momentum at APUS, Rasmussen and Hondros, before turning the call over to Rick to review key financial metrics and the results the fourth quarter and full year of 2021. Slide 4 is a brief reminder of the educational offerings at APEI. APEI’s origins began at APUS, purpose filled to enable active duty military to uniquely access their earned education benefit through inclusive adaptable education. This inspired our vision of educating service minded students. And we did so with the goal of keeping college education affordable. APEI’s acquisition of Hondros college of nursing in 2013 was a springboard into nursing education. Another service minded career in a high demand field. With the acquisition of Rasmussen University, APEI created the largest ADN and PN pre-licensure nursing platform in the United States, creating new nurses to help meet society's chronic nursing shortage. And with the addition of Graduate School USA and its focus on training the federal workforce, its purpose is tightly aligned with educating the service minded students and represents a strong adjacency to APUS’s core military and best in student offerings. On slide 5, you'll see an overview of APEI’s national nursing platform and our market opportunities in the face of this chronic nursing shortage. Through Rasmussen and Hondros, APEI serves as the largest ADN and PN pre-licensure nursing educator in the United States, creating new nurses at its 30 campuses. The bureau of labor and statistics recently published its updated annual job projections and registered nurses, licensed practical nurses and vocational nurses are expected to increase 9% to over 4.1 million by 2030, larger than the national average across all jobs. Over the next 10 years, each year, there are expected to be approximately 195,000 registered nurse openings and another 61,000 licensed practical and vocational nurse openings. 2021 NCLEX numbers suggest that only 72% of the annual licensed practical nurse job demand can be met to present practical nurse graduates. A 2021 American Association of Critical Care nurse survey of more than 6,500 nurses show that 92% believe the pandemic has depleted nurses at their hospitals over the past 18 months. And as a result, their careers will be shorter than they intended. And 66% felt their experiences during the pandemic have caused them to consider leaving nursing. The BLS has indicated that overall resignations in healthcare are up 50% since the start of the pandemic. And currently 43% of the nursing population is over the age of 55 and it is expected of those eligible to retire within the next three years, more than 50% will do so. These staffing shortages are not sustainable, as costs continue to soar for the healthcare providers due to their need to use temporary labor and overtime to fill these shortages, causing healthcare system margins, to decline substantially. And ultimately, it is the patient who suffers. At Rasmussen and Hondros, we are partnering with over 300 clinical partners to help these healthcare systems alleviate this chronic nursing shortage. Across our three education units of Rasmussen, APUS and Hondros, we expanded our nursing curriculum ladder with Rasmussen’s launch of a nurse practitioner program at the end of 2021. Notably what remains attractive about our pre-licensure education is that we in the enable LPN to begin working in approximately 12 months. Direct entry RN students complete within 15 months. And our RN students begin working in just over two years. The vast majority of our nursing students are currently pre-licensure, yet we continue to believe the nursing sector needs of licensure education and in particular to educate new nursing faculty. Overall, we believe strongly that the accreditation standard, requirements of state boards of nursing approvals, the significant amount of clinical and other partner relationships needed, and the general process of standing up a nursing school provides a substantial barrier to entry for new competition and is a significant reason we remain enthusiastic about nursing education. Turning to Slide 6. Nursing enrollment reached record levels at both Rasmussen and Hondros in 4Q ’21. In total APEI has total nursing enrollment of over 11,200 students that are predominantly pre-licensure. Rasmussen’s nursing enrollments continue to grow up 8% in 4Q ‘21 as compared to the prior year period. Nursing enrollment now represents over 50% of the total enrollment at Rasmussen compared with less than 30% just a few years ago. And we expect this trend to continue. At Hondros, we now have over 2,500 nursing students, which represent 17% growth in 4Q ‘21 versus the prior year period. We have positive news from Hondros Indianapolis campus, which originally opened in 2020, just a few weeks ago, based on favorable EnQuest results, and overall student outcomes, the Indiana State Board of Nursing granted Hondros an increase to 200 enrolled students for 2022 up from 60. This significant increase was made possible by the Hondros team's commitment to high quality education and focus on maintaining top tier regulatory and state board standards where we currently have 100% EnQuest path rates. Additionally, in fall of ‘22, we anticipate welcoming our first nursing student cohort in Hondros new Detroit Michigan campus. Even though nursing growth remains positive and we continue to see heightened interest in our nursing program. The recent impacts of COVID and the Omicron variants have dampened some student's ability to begin or continue their nursing education. For example, in Ohio, in Q1 of ‘22, over 120 of our new predominantly female and single parent students head to defer education from the impact of COVID, including public school bus system shutdowns, forcing our students to remain home to educate their children. We anticipate this impact will be temporary as COVID restrictions subside and the high interest levels in the programs should translate to strong enrollment. In Q1 ‘22, we anticipate total nursing enrollment to increase by roughly 4% compared to the same period of 2021. Notably, positive growth is against deep comparable periods in 2021 when the programs are exhibiting very strong growth, 22% at Rasmussen and 45% at Hondros. The two-year CAGR for Rasmussen nursing is 12% generating 8,400 current student enrollments. And the two-year CAGR for Hondros nursing is 25% leading to 2,416 enrollments. Moving to slide 7, at APUS, while total net registrations were down 2% to 86,600 in 4Q ’21, this does not reflect the positive two-year enrollment momentum up 4%, and in particular in 4Q ‘21, where APUS faced a very difficult prior year comp of 11% positive in 4Q of ‘20. This is also a marked improvement versus the previous two quarters. There are several green shoots at APUS. First, we are experiencing a return of army enrollment momentum, army registrations were up approximately 4% during 4Q ‘21 compared to a tough comp of 29% positive in the same period of 2020, and represents a 16% two-year CAGR. Due to our improved focus on student persistence and completion that started in Q3 of ’21, we are experiencing returning military student acceleration across every degree type and notably year-over-year quarterly growth in our three largest branches; Army, Navy, and Marines. We are encouraged that the Army IgnitED portal impact on soldier registrations has subsided, and a soldier's ability to register through the system has improved with over 70% utilization of the new IgnitED tools and processes by army soldiers in the most recent start. We believe APSU is increasing its market share as other universities has to suspended the use of exception to protocol or ETP due for primarily to delays in army reimbursements, while APUS has been willing to accommodate those students. While enrollment challenges have abated, the receivable from army has not meaningfully decreased due to army significant backlogs of payments to process. However, as a result to productive conversations, we have had with army leadership and recent system enhancements, we have seen reimbursement beginning to flow and steps outlined to resolve the payment backlogs. We have been pleased to have the opportunity to proactively collaborate on data reconciliation with the army and are satisfied that the data is consistent between the two systems. Therefore, we strongly believe the remaining receivable balances and payments are now primarily a timing issue. Also, as we previously mentioned, military students continue to provide a strong recurring foundation of registrations that is more insulated from the broader, higher education enrollment trends for adult learners in a tight labor market. Moving on to our other APUS student segments. While returning veteran registrations declined bright spots with veterans include new student growth at associates degrees and master's degrees. The softness in non-military registrations are offset by green shoots of student growth in associates degrees and certificates, yet reflect the overall week, market enrollment trends, which drove the roughly 2% decline in total non-military registration. The implementation of our modernized CRM platform has simplified enrollment and is increasing lead to conversion rates in Q1 of 2022. At Rasmussen, approximately 50% of enrollment and 60% of revenue come from nursing. So as we turn to non-nursing, for several years, Rasmussen has invested behind the acceleration of nursing and has directed the corresponding prioritization of marketing investments toward that segment, resulting in a 4Q 21 decline of 13% in non-nursing enroll. Rasmussen's legacy Northern region, which includes Minnesota and Wisconsin are experiencing historically low unemployment rates at 2.7% and 2.8% respectively. And the labor participation rate in those states is also declining. The severe labor shortage generally has driven wages higher and resulted in an overall tight labor market, which has dampened the urgency for prospective students to consider career changes or additional education to qualify for work advancement. Despite non-nursing softness, Rasmussen does have some green shoots starting with strong improvements in retention with the winter term increasing to 85.6% overall and graduate education programs offered below $10,000 have seen significant acceleration. We don't expect the labor market tightness to change in the near-term, and it will continue to weigh on our non-nursing, non-military registrations. Nonetheless, we still expect registrations in the first quarter at APUS to increase 0% to 3% to between 92,900 and 95,700 reflecting continued military improvement. At Rasmussen, we anticipate non-nursing enrollment to decrease roughly 14% in the first quarter of 2022, compared to the prior year period, due to the general student behavioral trends in the U.S. At APUS, non-military students only represent about 15% of our student population, while at Rasmussen, the non-nursing and non-healthcare population represents 30% of enrollment, but roughly only 24% of revenue. I would now like to turn the call over to Rick to review our fourth quarter and full year results in further detail.
Richard Sunderland: Thank you, Angie. On slide 9, we present our financial highlights for the quarter and full year periods. Total revenue for the fourth quarter was $154 million up approximately $68 million from the comparable prior year period, due to the of Rasmussen results in the 2021 period. The fourth quarter was the first, which included a full three months of Rasmussen results. APUS’s fourth quarter revenue was 73 million, a decrease of 3% from fourth quarter 2020, as a result of the decrease in overall net course registrations Angie discussed earlier. As a reminder, Army specific registrations were up for the fourth quarter of 2021 versus the prior year period, as our total active duty military registrations. Hondros revenue increased by 18% to 12 million in the fourth quarter of 2021 versus the comparable prior year period driven by strong year-over-year enrollment growth due to the ongoing demand for nursing education, successful marketing efforts, and the execution of enrollment strategies at Hondros. For the year 2021, total revenue increased 30% compared to 2020 due primarily to the addition of Rasmussen in the 2021 period, and the revenue growth at Hondros. Total cost and expenses for the quarter were 138 million, an increase of 61 million from the prior period due primarily to the inclusion of Rasmussen's results in the current year quarter. Expenses for the quarter include approximately 1.7 million of non-cash, stock compensation expense, 1.8 million of professional fees and integration costs primarily related to the integration of Rasmussen and the acquisition of Graduate School, and 8.3 million of depreciation and amortization all on a pretax basis. As part of the integration of Rasmussen and our efforts to continuously evaluate and review our cost structure more broadly, there were two headcount reductions completed over the past several months. First and is previously discussed, we completed a reduction in force at APEI and APUS in August 2021 that resulted in a benefit of approximately 1.4 million in pre-tax labor and labor and benefit savings in 2021. And more importantly, the expected result in savings in the range of approximately 2.6 million to 3.6 million in 2022. Additionally, in mid-January, Rasmussen completed a similar cost reduction effort that we estimate will result in pre-tax labor and benefit savings in the range of 2.5 million to 3.5 million during 2022. These figures do not include the severance costs associated with these actions. On a full year basis, total costs of expenses were 388 million for 2021, an increase of 91 million as compared to 2020, which is attributable to the inclusion of Rasmussen in the current year period. These results include full-year stock-based compensation of $7.7 million -- $7.6 million of professional fees and integration costs primarily related to the Rasmussen and Graduate School acquisitions, and $17.8 million of depreciation and amortization all on a pre-tax basis. Overall, APEI achieved adjusted EBITDA of $29.3 million in the current year quarter and $64.7 million for the full 2021 year. Net income per diluted share for the quarter was $0.50 and $0.97 for the full 2021 year. Net cash provided by operating activities with $16.3 million for the full-year 2021, compared to $44.8 million in 2020. The decrease is primarily due to the timing of the Rasmussen acquisition and Rasmussen received the majority of its cash receipts at the start of a quarterly term during the first month of each fiscal quarter, while these first ones occur throughout the quarter. As the seller retained substantially, all of the cash at closing, majority of Rasmussen’s operations were therefore funded by API from September 1 through the middle of October when Rasmussen received its temporary provisional program participation agreement or TPPPA formed that allowed Rasmussen to continue drawing title four funds. Cash provided by operating activities was also impacted by changes in working capital due to the timing of receipts and payments, particularly as it relates to the Army's transition to ArmyIgnitED, which has adversely impacted APUS's ability to invoice the army, and higher estimated tax payments in 2021 compared to the prior year. At December 31, accounts receivable from the army was approximately $27 million of which $18.2 million is older than 60 days from the course start date. Cash at December 31, 2021, was $150 million of which approximately $27 million is restricted. As previously mentioned, on the third quarter 2021 earnings call, restricted cash is almost entirely comprised of a restricted certificate of deposit securing a letter of credit Rasmussen University is required to post to add as a result of its 2020 composite score. Additionally, our $20 million revolving credit facility remains undrawn at this time. Turning the Slide 10, first quarter 2022 outlook. APEI's outlook for the first quarter of 2022 is as follows. APUS course registrations are expected to be flat to up 3% year-over-year. This reflects rebound from army registrations offset by the impact on near-term demand of COVID-19 and broader enrollment factors impacting the higher education industry. At APUS, we continue to work on reestablishing registration momentum. At Hondros and Rasmussen, first quarter student enrollment are actuals because of the quarterly starts at these schools. At Hondros, first quarter total student enrollment increased by 8% year-over-year to approximately 2,500 students. At Rasmussen, nursing student enrollment increased 2% year-over-year offset by non-nursing enrollment declined of 14% for an aggregate Rasmussen enrollment decline of approximately 7% year-over-year. In the first quarter of 2022, consolidated revenue is expected to increase between 75% to 80% year-over-year given the addition of Rasmussen. The company expects net income to be between 2.3 million and 3.3 million and earnings per diluted share to be between $0.12 and $0.17. Adjusted EBITDA is expected to be between 17.7 million and 19.8 million for the first quarter of 2022, included in the EPS guidance is approximately a $1 million loss or approximately $0.06 per diluted share at Graduate School related to integration costs. One additional point to note is the impact on cash taxes of the deductibility of Goodwill associated with both Hondros and Rasmussen acquisitions, as well as the impact of accelerated depreciation for tax purposes. As of December 31, APEI had net operating loss carryforwards, and capital loss carryforwards of approximately 16 million and 2 million respectively, which are available offset future taxable income. The company's utilization of net operating loss carryforwards may be subject to annual limitations due to ownership change provisions of Section 382 of the internal revenue code. With that, I would like to turn the call back to Angie for final remarks.
Angela Selden: Thank you, Rick. As I stated at the beginning of our call, we believe APEI is the only company at the intersection of America's greatest strength, that of post-secondary education, military, healthcare, and capital markets. From our education of service minded military and veteran students to our national nursing platform, to our over 350 programs and certificates at APUS, Rasmussen, Hondros and Graduate School USA. There is no better time to invest in the future of America by investing in American Public Education. With that, I'd like to open up the line for questions.
Operator: The first question is from Tobey Sommer with Truist Securities.
Jasper Bibb: Hey, good afternoon. This is actually Jasper Bibb on for Tobey. I wanted to ask about the expense guide for the first quarter. Looks like EBITDA margins down maybe 600 basis points from last year. Can you just comment on what's driving the higher expense base to start the year?
Richard Sunderland: Sure. This is Rick, really two things. Number one, labor costs related to the nursing programs. And I'll say productivity at the campuses. When we went through COVID we were able to move several or many of the nursing programs to a blended online model. And now that they've returned back to campus, it results at a higher cost structure. You combine that with the demand for nursing faculty and really the shortage, which is driving up labor costs. So it's really those two elements that are driving a lower margin in our campus based operations. I would also point out that there is some seasonality in the business if you look back over the trailing 8 or 12 quarters, the first quarter does tend to be lower than other quarters during the year.
Jasper Bibb: Okay. And I know you're not giving full year guidance at this point, but the labor cost and the back-to-school cost I imagine would be fairly sticky. So you think you could still expand EBITDA margin on a year-over-year basis this year? Or how should we think about the cadence of margins over the next couple quarters?
Richard Sunderland: Well, for as an example, we talked about the reduction force that took place at Rasmussen, which was right in the beginning of the first quarter, and then the benefit we would expect to receive of that over the course of the year. So we do have levers that we can pull that would manage the margins and we would expect improve those margins over time. Also give them fixed cost model in the campus-based operations, and looking at the seasonality of the revenue, which you can look back and see, you would expect margin expansion on top of revenue improvement during those subsequent periods.
Jasper Bibb: And then just want to follow-up on your comments in prepared remarks about more marketing dollars being allocated to the nursing segment of Rasmussen versus non-nursing. I was just hoping you could comment on what does a marketing yield look like for each side of the business that might be informing that choice?
Angela Selden : Certainly, the unit economics of a nursing student and a very specific curriculum that they follow does yield in a shorter time period, more revenue per investment or what we would call LTV overtake. And so the attractive unit economics of a nursing student drove and continues to drive the prioritization of marketing dollars for new leads towards finding that next nursing student.
Jasper Bibb: And then, as you look at your plan for this year, can you just speak to, if you have any new campus openings in the pipeline, and if that is the case, what would be the approximate timing of that?
Angela Selden : So as I mentioned in my remarks, we're very pleased that Hondros will be opening a new campus in Detroit, Michigan, and I'll turn it to Rick for how we want to think about the unit economics.
Richard Sunderland: Sure. So the campuses ramp fairly quickly, we're placing them in markets where there's a good demand for those campuses. So we would expect to campus to break even kind of in the second to third year. We were challenged in the Indianapolis market because the initial enrollment cap, and so I was going to add to Angie’s comments about the opening of the Michigan campus by pointing out that the Indiana Board of Nursing recently increased the enrollment cap at the Indianapolis campus to 200 students from. I think the remarks said 60. And that 60 was just a recent increase from the original 30. So absent an enrollment cap, which I don't think we're anticipating in the Michigan market. Those campuses ran fairly rapidly.
Angela Selden : We also are contemplating relocations of campuses as well. One example is another Hondros campus in the Dayton market, where we have found a more attractive space with a larger footprint. And we believe that that relocation which will happen in 2022 will also yield enrollment momentum in the Dayton market.
Jasper Bibb: Last one for me. Could you just remind us how overseas true movements or NATO exercises have impacted APUS in the past? And is that dynamic, given some, the headlines are seeing something that you've seen at all in the first quarter or not?
Richard Sunderland: So troop deployments do impact enrollments at APUS but given our view of what's going on in Eastern Europe, which is obviously a horrible situation, our thoughts are with our soldiers and our student soldiers there. We're not seeing a very large impact at this time. We've had some soldiers inquire about delaying their education, but at this point it's not large.
Operator: The next question is from Stephen Sheldon with William Blair.
Stephen Sheldon : Hey, thanks. First, I guess what are you including -- thought about the first quarter guidance. I guess, what are you including for Graduate School USA for revenue and adjusted EBITDA? And is there any notable seasonality at that institution as we kind of layer that into our models for the full year?
Steve Somers: It's Steve. For Graduate School, it's a -- there's a high degree of seasonality with -- in the first -- in overall in the business two-thirds of the revenues come in the second and third quarters. The first quarter to fourth quarter fall 15%, 20% range generally speaking. And so we're looking at sort of low single digit million dollars of revenue in the first quarter.
Stephen Sheldon : And is that -- I think you talked about a million impact from integration costs. I guess anything for overall adjusted EBITDA, I guess how should we think about the impact of Graduate School USA. On the first quarter guidance?
Steve Somers: Yes. In terms of overall adjusted EBITDA it has an impact of -- it's on the -- it's a negative between $0.5 million and $1 million.
Stephen Sheldon : I saw that you may announce to hire a New Chief Experience Officer earlier this year. Just curious if this represents any notable changes in how you plan to provide student support or your broader digital strategy to engage students. I know you talked about some marketing shifts to focusing to folks more on nursing. I guess, how any context for that would be great.
Angela Selden : What we really believe is that we will elevate the student experience as a result of bringing Jeff to know what in to lead that effort. We have in at the past really focused our efforts with students in different process areas of our organization. And what we're trying to do is really create -- start with the student, put the student at the center of everything that we do. And from the first touch point from a lead all the way through career placement, and ongoing alumni relations, it's our intention to create a smooth, seamless, cohesive experience under Jeff's leadership. So many of the shared service functions that came over with the Rasmussen acquisition now are part of our experience office that Jeff leads, and that includes our career services department. It also includes those functions that existed at APEI prior, which is our key marketing areas. It's also where we have student technology innovation housed, so that whole team can be focused day in and day out on the elevation of the way in which the students experience our brand, and make sure that regardless of which education unit they engaged with, they can expect to get a high-quality student centric experience. So we couldn't be more excited about Jeff and the team that he's building to take all of our education units student experience to the next level.
Operator: The next question is from Raj Sharma with B. Riley.
Raj Sharma : I wanted to understand on the enrollment of -- because of the portal issue relative -- where are we today relative to pre-IgnitED issues on the enrollment level? Have we surpassed that level or -- so apples to apples and what are the enrollments for the Army?
Richard Sunderland : Yes, we've actually -- we're up year-over-year and so we've surpassed the levels that we had under the prior system GoArmyEd. And as Angie mentioned in our comments, we actually think were perhaps picking up markets share at this point is other smaller education providers have really been unable to work with and through the system, the way we've been able to do it. We recently –we've had periodic meetings with the folks at army. It's been really helpful for us to understand the system, and for them to understand the challenges, a recent example. We have a communication strategy that we've used with our army soldier students in a very sort of special situation. The army is actually leveraging our communication strategy more broadly to soldiers because, we like to think and we're very proud of exhibiting kind of best practices broadly as it relates to military education, for sure. But specifically as it relates to ArmyIgnitED.
Raj Sharma : And then on Rasmussen, I just wanted to understand, your non -- I understand that the non-nursing economics are worse than the nursing economics is, was this reallocation of marketing dollars a reactive decision or a proactive decision? Just want to understand the business how it's trending also relative to when you acquired it and what your expectations were?
Steve Somers: I'll start on that. The trend towards investing in nursing has been a multiyear trend for Rasmussen that started a few years before we acquired it and has continued. The mix shift in terms of -- I'll speak kind of on an enrollment basis, but it's comparable on the revenue side is just a few years ago, 2017, the enrollments for the nursing business was less than 30% today. It's now just a touch over 50%. And so we've continue to see that trend that we expect that will continue to be the case over time, as Rasmussen, as an institution focuses on nursing and to a lesser degree, the health sciences side. And so between nursing and health sciences, the overall enrollment and revenue composition is between 70% and 75%. We think that makes will continue. So, we have been proactive on a longer-term basis in allocating marketing dollars towards the nursing practice area.
Operator: We have no further questions at this time. I'll turn the call over to Angie Selden for any closing remarks.
Angela Selden: Thank you all for joining us today, and for your interest in American Public Education. Have a great evening.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating, and you may not disconnect.
