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, 2025 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: •declines in enrollment or interest in our programs or our ability to attract or connect with prospective students; •our continued compliance with and eligibility to participate in Title IV Programs under the Higher Education Act of 1965, as amended, and the regulations thereunder (including the new 90/10 regulations, and earnings premium, financial responsibility and administrative capability standards prescribed by the U.S. Department of Education (the “Department”)), as well as applicable accreditation standards and state regulatory requirements; •the impact of various versions of “borrower defense to repayment” regulations; •the final outcome of various legal challenges to the Department's loan discharge and forgiveness efforts; •rulemaking or changing interpretations of existing regulations, guidance or historical practices by the Department or any state or accreditor and increased focus by Congress and governmental agencies on, or increased negative publicity about, for-profit education institutions; •the impact of any federal budget reconciliations or other legislative activities on the availability of adequate levels of federal student aid or the conditions associated with participating in such aid programs; •the success of our initiatives to improve student experiences, retention and academic outcomes; •our continued eligibility to participate in educational assistance programs for key employers, veterans and other military personnel; •our ability to pay dividends on our common stock and execute our stock repurchase program; •increased competition; •the impact of management changes; •our ability to successfully defend litigation and other claims brought against us; and •changes in the overall U.S. economy. 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 •Consolidated Results of Operations •Segment Results of Operations •Summary of Critical Accounting Policies and Estimates •Liquidity, Financial Position and Capital Resources 18 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 degree 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. Our reporting segments are determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)Topic 280 – Segment Reporting and 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. 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, 2025, the for-profit education industry is scrutinized by various policymakers, regulatory 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. Recently, in 2025, as part of a broad reconciliation bill, Congress adopted changes to the Title IV program that modified student loan repayment plans, reduced federal student loan availability for graduate programs, adopted a new universal program level earnings premium requirement for Title IV eligibility and modified the borrower defense to repayment framework, among other changes. Additionally, the current Administration has conducted numerous negotiated rulemaking sessions to adopt regulations associated with these changes and also proposes to make changes to the requirements for accreditors and accreditation. We expect to see continuous fluctuations in the types and focus of regulatory requirements imposed on our institutions and programs from state and federal regulators and our institutional and programmatic accreditors. We encourage you to review "Regulatory Updates" below, and Item 1, “Business,” and Item 1A, “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 to learn more about our highly regulated industry and related risks and uncertainties, in addition to the MD&A in our 2026 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 significant and non-cash items as a means to 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 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. Adjusted operating income and adjusted earnings per diluted share have limitations as an analytical tool, and should not be considered 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. 2026 Second Quarter Overview During the quarter ended June 30, 2026 ("current quarter"), our academic institutions remained focused on enhancing student experiences and academic outcomes while aligning their academic programs with the current demands of the workforce. We 19 continued to make purposeful investments in marketing and admissions to efficiently serve prospective student interest in our academic institutions. Total student enrollments increased 0.6% at CTU as compared to the prior year quarter end, supported by strong levels of student retention and engagement, growth within the corporate student program and consistent levels of prospective student interest. Offsetting some of these enrollment trends at CTU is an increase in the number of students graduating during 2026 as compared to 2025 as well as record prior year comparisons. Total student enrollments increased 6.0% at USAHS for the current quarter end as compared to the prior year quarter end, driven by growth in the nursing and speech language pathology programs and the introduction of new modalities for the occupational therapy program, as well as underlying student retention and engagement trends. Lastly, for AIUS, total student enrollments decreased 1.0% for the current quarter end as compared to the prior year quarter end, driven by a decrease at Trident University. Strategic investments in technology continue to improve student experiences across our academic institutions, while enhancing operating effectiveness within our functional areas. Ongoing artificial intelligence efforts focus on our students and classroom learning, as well as enhancing various operating and functional processes. We are also selectively leveraging generative artificial intelligence to identify and engage with prospective students who, we believe, are more likely to succeed at one of our academic institutions. We remain focused on keeping our programs visible and accessible as search behavior evolves to LLM-based, AI powered searches and are actively updating our content so that it is readily accessible to, and optimized for, AI-powered search, while also investing in our brands to strengthen the visibility of our academic institutions as these AI-engines shape discovery. Through our corporate student programs, we provide accredited degree opportunities to employees of our partner organizations, supporting their career advancement while helping corporate partners strengthen employee development and retention. We continue to make strategic investments in technology and talent to expand these programs and enhance academic outcomes across our institutions. We expect full year adjusted operating income to be higher for 2026 as compared to 2025, supported by revenue growth combined with lower operating expenses due to our disciplined expense management and investment philosophy. Financial Highlights Revenue for the current quarter increased by 1.8% or $3.8 million to $213.4 million as compared to the prior year quarter, driven by increased revenue at USAHS and CTU. USAHS' revenue increased 10.2% or $3.8 million and CTU’s revenue increased 0.9% or $1.1 million, for the current quarter as compared to the prior year quarter, driven by the increase in total student enrollments at both academic institutions, partially offset with a decline of 1.8% or $1.0 million at AIUS as compared to the prior year quarter primarily due to non-Title IV and professional development offerings. Operating income for the current quarter increased by 6.8% to $54.9 million as compared to operating income of $51.4 million in the prior year quarter, driven by increased operating income within USAHS and AIUS. The increase in operating income for the current quarter was a result of revenue growth and continued disciplined management of operating expenses. The Company believes it is useful to present non-GAAP financial measures, such as adjusted operating income and adjusted earnings per diluted share, 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 $64.2 million for the current quarter as compared to $61.5 million for the prior year quarter. Adjusted operating income and adjusted earnings per diluted share for the quarters and years to date ended June 30, 2026 and 2025 is presented below (dollars in thousands, unless otherwise noted): 20 For the Quarter Ended For the Year to Date Ended June 30, June 30, Adjusted Operating Income 2026 2025 2026 2025 Operating income $ 54,881 $ 51,399 $ 118,003 $ 103,126 Depreciation and amortization 9,344 10,148 18,691 21,955 Adjusted Operating Income $ 64,225 $ 61,547 $ 136,694 $ 125,081 For the Quarter Ended For the Year to Date Ended June 30, June 30, Adjusted Earnings Per Diluted Share 2026 2025 2026 2025 Earnings Per Diluted Share $ 0.75 $ 0.62 $ 1.60 $ 1.27 Pre-tax adjustments included in operating expenses: Amortization for acquired intangible assets 0.07 0.06 0.13 0.13 Total pre-tax adjustments $ 0.07 $ 0.06 $ 0.13 $ 0.13 Tax effect of adjustments (1) (0.02 ) (0.01 ) (0.03 ) (0.03 ) Total adjustments after tax 0.05 0.05 0.10 0.10 Adjusted Earnings Per Diluted Share $ 0.80 $ 0.67 $ 1.70 $ 1.37 (1)The tax effect of adjustments was calculated by multiplying the pre-tax adjustments with a tax rate of 25%. This tax rate is intended to reflect federal and state taxable jurisdictions as well as the nature of the adjustments. Regulatory Update Recent Regulatory Development - Federal Loan Limits As part of the 2025 reconciliation bill noted above, federal student aid programs were modified to eliminate Grad PLUS loans, subject to some limited grandfathering for existing student borrowers as of July 1, 2026, for students enrolling in graduate and professional programs and to impose new annual and lifetime borrowing limits across the remaining loan programs. A negotiated rulemaking committee reached consensus on November 6, 2025 on an entire package of loan-related changes, including federal student loan limits and the elimination of Grad PLUS loans. Final regulations were published on May 1, 2026, and became effective on July 1, 2026, as directed by the reconciliation bill. As part of the changes, classification as a “professional program” allows post-baccalaureate students enrolled in these programs to borrow up to $50,000 per year (instead of $20,500 per year) and up to a $200,000 aggregate loan limit (instead of a $100,000 aggregate loan limit). The Department’s final regulations included a defined list of qualified “professional programs” and modified the regulatory definition of “professional degree” to include new conditions that programs must satisfy to qualify as professional degree programs eligible for the higher annual and lifetime loan limits. These new conditions are more restrictive than the terms of the reconciliation bill. As a result, a number of legal actions were filed by various groups in multiple jurisdictions that challenge the regulations as arbitrary and capricious and contrary to the text of the bill. In American Association of Nurse Practitioners, et al. v. McMahon, No. 1:26-cv-01780 (D.D.C.), the judge issued a stay against the part of the final regulation that adopted additional non-statutory conditions and factors that exclude programs that met the bill’s definition from qualifying as “professional programs.” The rationale was that the statutory text was the clear expression of congressional intent in defining what programs qualified as “professional programs” and the additional factors adopted in the final regulation were not authorized by the bill. While continuing to contest the court’s decision, the Department has published revised guidance implementing the court’s interpretation of an expanded listing of programs that temporarily qualify as professional programs by satisfying the statutory definition, pending the outcome of the litigation. A number of the programs at USAHS fall into this category of temporarily added “professional programs,” including its Physical Therapy, Occupational Therapy, Nursing and Speech Language Pathology programs. Historically, Title IV borrowing by graduate students at AIUS and CTU has generally fallen within the new graduate-level limits, and borrowing by USAHS students enrolled in its programs has generally fallen within the new professional program-level limits. In planning for the loan limit changes under the Department’s revised definition of professional degree programs, we have worked with private-lending partners to ensure supplemental funding is available for students on an as needed basis in the event the litigation results in these programs being required 21 to revert to the lower “graduate degree” program loan limits. We are closely monitoring each of the ongoing legal challenges to these regulations and their associated impacts on the availability of federal student aid for our students. For more information, see “Legislative Action and Recent Department Regulatory Initiatives” within Item 1. “Business” in our Annual Report on Form 10-K for the year ended December 31, 2025. 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 June 30, 2026 and 2025 (dollars in thousands): For the Quarter Ended June 30, For the Year to Date Ended June 30, 2026 % of Total Revenue 2025 % of Total Revenue 2026 vs 2025 % Change 2026 % of Total Revenue 2025 % of Total Revenue 2026 vs 2025 % Change TOTAL REVENUE $ 213,355 $ 209,581 1.8 % $ 435,098 $ 422,585 3.0 % OPERATING EXPENSES Educational services and facilities (1) 50,891 23.9 % 50,241 24.0 % 1.3 % 97,956 22.5 % 98,783 23.4 % -0.8 % General and administrative: (2) Advertising and marketing 28,299 13.3 % 27,039 12.9 % 4.7 % 56,615 13.0 % 54,997 13.0 % 2.9 % Admissions 22,547 10.6 % 22,351 10.7 % 0.9 % 45,029 10.3 % 44,816 10.6 % 0.5 % Administrative 42,561 19.9 % 42,946 20.5 % -0.9 % 88,227 20.3 % 85,893 20.3 % 2.7 % Bad debt 4,832 2.3 % 5,457 2.6 % -11.5 % 10,577 2.4 % 13,015 3.1 % -18.7 % Total general and administrative expense 98,239 46.0 % 97,793 46.7 % 0.5 % 200,448 46.1 % 198,721 47.0 % 0.9 % Depreciation and amortization 9,344 4.4 % 10,148 4.8 % -7.9 % 18,691 4.3 % 21,955 5.2 % -14.9 % OPERATING INCOME 54,881 25.7 % 51,399 24.5 % 6.8 % 118,003 27.1 % 103,126 24.4 % 14.4 % PRETAX INCOME 60,206 28.2 % 56,238 26.8 % 7.1 % 128,336 29.5 % 112,743 26.7 % 13.8 % PROVISION FOR INCOME TAXES 12,235 5.7 % 15,210 7.3 % -19.6 % 26,414 6.1 % 28,027 6.6 % -5.8 % Effective tax rate 20.3 % 27.0 % 20.6 % 24.9 % NET INCOME $ 47,971 22.5 % $ 41,028 19.6 % 16.9 % $ 101,922 23.4 % $ 84,716 20.0 % 20.3 % (1)Educational services and facilities expense includes costs attributable to the educational activities of our campuses, including: salaries and benefits of faculty, academic administrators and student support personnel, costs of educational supplies and other goods and services, including costs of textbooks and laptops, and rents on leased campus and administrative facilities. (2)General and administrative expense includes operating expenses associated with corporate and campus administration, marketing, admissions, information technology, financial aid, accounting, human resources, legal and compliance. Other expenses within this expense category include costs of advertising and production of marketing materials and bad debt expense. Revenue The current quarter and year to date revenue increased by 1.8% or $3.8 million and 3.0% or $12.5 million, respectively, as compared to the prior year periods. The improvement in revenue was primarily driven by the increase in total student enrollments at both USAHS and CTU, partially offset with a decline in revenue at AIUS as compared to the prior year quarter primarily due to non-Title IV and professional development offerings. Educational Services and Facilities Expense (dollars in thousands) For the Quarter Ended June 30, For the Year to Date Ended June 30, 2026 2025 2026 vs 2025 % Change 2026 2025 2026 vs 2025 % Change Educational services and facilities: Academics & student related $ 45,066 $ 44,338 1.6% $ 86,066 $ 86,421 -0.4% Occupancy 5,825 5,903 -1.3% 11,890 12,362 -3.8% Total educational services and facilities $ 50,891 $ 50,241 1.3% $ 97,956 $ 98,783 -0.8% Current quarter educational services and facilities expense increased by 1.3% or $0.7 million as compared to the prior year quarter. The increase was primarily driven by higher academics and student related expenses of 1.6% or $0.7 million as a result of increases in total student enrollments at USAHS and CTU. Occupancy expense remained relatively flat as compared to the prior year quarter. 22 The educational services and facilities expense for the current year to date decreased by 0.8% or $0.8 million as compared to the prior year period. This decrease was primarily driven by lower academics and student related costs at AIUS, as a result of lower total student enrollments as compared to the prior year period. General and Administrative Expense (dollars in thousands) For the Quarter Ended June 30, For the Year to Date Ended June 30, 2026 2025 2026 vs 2025 % Change 2026 2025 2026 vs 2025 % Change General and administrative: Advertising and marketing $ 28,299 $ 27,039 4.7% $ 56,615 $ 54,997 2.9% Admissions 22,547 22,351 0.9% 45,029 44,816 0.5% Administrative 42,561 42,946 -0.9% 88,227 85,893 2.7% Bad debt 4,832 5,457 -11.5% 10,577 13,015 -18.7% Total general and administrative expense $ 98,239 $ 97,793 0.5% $ 200,448 $ 198,721 0.9% The general and administrative expense for the current quarter and year to date increased by 0.5% or $0.4 million and 0.9% or $1.7 million, respectively, as compared to the prior year periods, primarily driven by increased advertising and marketing expense for both comparative periods as well as increased administrative expense for the current year to date as compared to the prior year period. Partially offsetting these increases were decreases in bad debt expense as compared to the prior year periods. Advertising and marketing expense for the current quarter and year to date increased by 4.7% or $1.3 million and 2.9% or $1.6 million, respectively, as compared to the prior year periods. The current quarter increase was primarily due to higher advertising and marketing spend across all three institutions, while the year to date increase was primarily due to higher spend at CTU and AIUS, compared to the respective prior year periods. The increase in administrative expense for the year to date was primarily driven by increased legal fees for previously disclosed legal matters within CTU as compared to the prior year period. Bad debt expense incurred by each of our segments during the quarters and years to date ended June 30, 2026 and 2025 was as follows (dollars in thousands): For the Quarter Ended June 30, For the Year to Date Ended June 30, 2026 % of Segment Revenue 2025 % of Segment Revenue 2026 vs 2025 % Change 2026 % of Segment Revenue 2025 % of Segment Revenue 2026 vs 2025 % Change Bad debt expense: CTU $ 2,837 2.5 % $ 2,545 2.2 % 11.5 % $ 7,455 3.2 % $ 8,419 3.7 % -11.5 % AIUS 1,927 3.4 % 2,635 4.5 % -26.9 % 2,856 2.5 % 4,259 3.7 % -32.9 % USAHS 66 0.2 % 279 0.8 % -76.3 % 265 0.3 % 340 0.4 % -22.1 % Corporate and Other 2 NM (2 ) NM NM 1 NM (3 ) NM NM Total bad debt expense $ 4,832 2.3 % $ 5,457 2.6 % -11.5 % $ 10,577 2.4 % $ 13,015 3.1 % -18.7 % Bad debt expense for the current quarter and year to date decreased by 11.5% or $0.6 million and 18.7% or $2.4 million, respectively, as compared to the prior year periods. The decrease for the current quarter was primarily due to lower bad debt expense at AIUS and USAHS, which more than offset higher bad debt expense at CTU. The year to date decrease was primarily driven by lower bad debt expense across all three academic institutions as compared to the prior year period. 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 decreased by $0.8 million and $3.3 million, respectively, as compared to the prior year periods, primarily driven by decreases across all three academic institutions, with the year to date decrease primarily driven by leased assets within USAHS. 23 Operating Income Operating income for the current quarter and year to date increased by 6.8% or $3.5 million and 14.4% or $14.9 million, respectively, as compared to the prior year periods. This improvement was primarily driven by increased revenue, as well as disciplined management of operating expenses, particularly in the current year to date, as compared to the prior year periods. Provision for Income Taxes For the quarter and year to date ended June 30, 2026, we recorded a provision for income taxes of $12.2 million reflecting an effective tax rate of 20.3% and $26.4 million reflecting an effective tax rate of 20.6%, respectively, as compared to a provision for income taxes of $15.2 million reflecting an effective tax rate of 27.0% and $28.0 million reflecting an effective tax rate of 24.9% for the respective prior year periods. The effective tax rate for the current quarter and year to date was benefited by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which, when combined, reduced the effective tax rate by 7.3% and 7.0%, respectively. The effective tax rate for the prior year quarter and year to date was benefited by the tax effect of stock-based compensation and the release of previously recorded tax reserves, which, when combined, reduced the effective tax rate by 2.0% and 4.4%, respectively. For the full year 2026, we expect our effective tax rate to be between 23.0% and 24.0%. SEGMENT RESULTS OF OPERATIONS The following tables present unaudited segment results for the reported periods (dollars in thousands): For the Quarter Ended June 30, REVENUE OPERATING INCOME (LOSS) OPERATING MARGIN 2026 2025 % Change 2026 2025 % Change 2026 2025 REVENUE: CTU $ 115,537 $ 114,479 0.9 % $ 44,479 $ 46,847 -5.1 % 38.5 % 40.9 % AIUS 57,172 58,214 -1.8 % 12,607 11,495 9.7 % 22.1 % 19.7 % USAHS 40,457 36,697 10.2 % 3,645 (1,694 ) 315.2 % 9.0 % -4.6 % Corporate and other 189 191 -1.0 % (5,850 ) (5,249 ) 11.4 % NM NM Total $ 213,355 $ 209,581 1.8 % $ 54,881 $ 51,399 6.8 % 25.7 % 24.5 % For the Year to Date Ended June 30, REVENUE OPERATING INCOME (LOSS) OPERATING MARGIN 2026 2025 % Change 2026 2025 % Change 2026 2025 REVENUE: CTU $ 236,293 $ 230,553 2.5 % $ 95,022 $ 93,607 1.5 % 40.2 % 40.6 % AIUS 114,988 115,778 -0.7 % 25,171 22,716 10.8 % 21.9 % 19.6 % USAHS 83,465 75,880 10.0 % 9,952 (2,024 ) 591.7 % 11.9 % -2.7 % Corporate and other 352 374 -5.9 % (12,142 ) (11,173 ) 8.7 % NM NM Total $ 435,098 $ 422,585 3.0 % $ 118,003 $ 103,126 14.4 % 27.1 % 24.4 % TOTAL STUDENT ENROLLMENTS As of June 30, 2026 2025 % Change CTU 32,110 31,910 0.6 % AIUS 10,510 10,620 -1.0 % USAHS 4,210 3,970 6.0 % Total 46,830 46,500 0.7 % 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 24 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 0.9% or $1.1 million and 2.5% or $5.7 million, respectively, as compared to the prior year periods. The improvement in revenue was primarily driven by increase in total student enrollment of 0.6% at June 30, 2026 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. Offsetting some of these enrollment trends at CTU is an increase in the number of students graduating during 2026 as compared to 2025 as well as record prior year comparisons. Current quarter operating income for CTU decreased by 5.1% or $2.4 million as compared to the prior year period. The decrease was primarily driven by increased legal fees related to previously disclosed legal matters, partially offset by the increase in revenue as discussed above, as compared to the prior year period. Current year to date operating income increased by 1.5% or $1.4 million as compared to the prior year period. The increase was primarily driven by higher revenue as discussed above and lower bad debt expense, which more than offset increased legal fees during the current year to date. AIUS. Current quarter and year to date revenue decreased by 1.8% or $1.0 million and 0.7% or $0.8 million, respectively, as compared to the prior year periods, primarily due to non-Title IV and professional development offerings. Total student enrollments decreased 1.0% at June 30, 2026 as compared to the prior year quarter end, driven by a decrease at Trident University. Current quarter and year to date operating income for AIUS increased by 9.7% or $1.1 million and 10.8% or $2.5 million, respectively, as compared to the prior year period, driven by lower operating expenses across most expense categories as compared to the prior year periods, which more than offset the decrease in revenue. USAHS. Current quarter and year to date revenue increased by 10.2% or $3.8 million and 10.0% or $7.6 million, respectively, as compared to the prior year periods, primarily driven by total student enrollment growth of 6.0% at June 30, 2026, as compared to the prior year quarter end. Current quarter and year to date operating income increased by $5.3 million and $12.0 million, respectively, as compared to the prior year periods, primarily driven by the increase in revenue as discussed above. 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 increased by 11.4% or $0.6 million and 8.7% or $1.0 million, respectively, as compared to the prior year periods, primarily driven by increased administrative costs for both comparative 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, 2025. 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, 2025 also includes a discussion of these and other significant accounting policies. LIQUIDITY, FINANCIAL POSITION AND CAPITAL RESOURCES As of June 30, 2026, cash, cash equivalents, restricted cash and available-for-sale short-term investments (“cash balances”) totaled $734.8 million. Restricted cash as of June 30, 2026 was $0.8 million and primarily related to escrow balances for Hippo Education and required letters of credit for USAHS. 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 2026. 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 by 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 strengthening the academic value of our institutions. 25 On January 2, 2026, the Board of Directors of the Company approved a common stock repurchase program, authorizing the Company to repurchase up to $100.0 million of its outstanding common stock on the open market, which expires on June 30, 2027. The stock repurchase program may be modified, suspended or discontinued at any time in the Company's discretion without prior notice, and does not commit the Company to repurchase shares of its common stock. 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. See Note 11 "Stock Repurchase Program" to our unaudited condensed consolidated financial statements for additional details. The Board of Directors approved the aforementioned stock repurchase program believing it advantageous to the Company and its stockholders to repurchase shares of the Company’s common stock from time to time at prices below what the Board of Directors believes to be the intrinsic value of the Company’s common stock. On August 6, 2026 the Board of Directors declared a quarterly dividend of $0.17 per share, an increase of 13.3% as compared to the prior quarter, which will be paid on September 10, 2026 for holders of record of common stock as of September 1, 2026. 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 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, 2025. Sources and Uses of Cash Operating Cash Flows During the years to date ended June 30, 2026 and 2025, net cash flows provided by operating activities totaled $144.0 million and $143.9 million, respectively. 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, 2025. 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 years to date ended June 30, 2026 and 2025, net cash flows used in investing activities totaled $65.8 million and $7.3 million, respectively. Purchases and Sales of Available-for-Sale Investments. Purchases and sales of available-for-sale investments resulted in a net cash outflow of $62.5 million and $3.6 million for the years to date ended June 30, 2026 and 2025, respectively. Capital Expenditures. Capital expenditures decreased to $3.3 million for the year to date ended June 30, 2026 as compared to $4.5 million for the year to date ended June 30, 2025. For the full year 2026, we expect capital expenditures to be approximately 1.0% of revenue. Financing Cash Flows During the years to date ended June 30, 2026 and 2025, net cash flows used in financing activities totaled $46.8 million and $74.7 million, respectively. Payments to repurchase shares of our common stock were $15.0 million and $46.1 million for the years to date ended June 30, 2026 and 2025, respectively. 26 Payments of employee tax associated with stock compensation. Payments of employee tax associated with stock compensation were $10.3 million and $7.5 million for the years to date ended June 30, 2026 and 2025, respectively. Payments of cash dividends and dividend equivalents. During the years to date ended June 30, 2026 and 2025, the Company made dividend and dividend equivalent payments of $19.7 million and $17.7 million, respectively. Principal payments for finance leases and failed sale-leaseback. During the year to date ended June 30, 2026, the Company made principal payments of $2.7 million for finance leases, and during the year to date June 30, 2025, principal payments of $2.9 million were made for finance leases and failed sale-leaseback transactions, both related to USAHS. Changes in Financial Position Selected condensed consolidated balance sheet account changes from December 31, 2025 to June 30, 2026 were as follows (dollars in thousands): June 30, December 31, 2026 2025 % Change ASSETS CURRENT ASSETS: Restricted cash $ 820 $ 21,310 -96 % Student receivables, net 40,035 27,197 47 % LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accrued expenses - income taxes 3,565 5,627 -37 % Deferred revenue 80,354 37,844 112 % Restricted cash: The decrease is driven by the release of a letter of credit related to USAHS with the Department. Student receivables, net: The increase is driven by timing of student billings for academic terms and respective cash receipts at our universities. Accrued expenses - income taxes: The decrease primarily relates to payments made during the current quarter of estimated income taxes and prior year extension payments. Deferred revenue: The increase in deferred revenue is driven by timing of academic terms and related student billings.