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Revenue Recognition
 9 Months Ended
Sep. 30, 2025
Revenue From Contract With Customer [Abstract]  
Revenue Recognition

6. REVENUE RECOGNITION

Disaggregation of Revenue

The following tables disaggregate our revenue by major source for the quarters and years to date ended September 30, 2025 and 2024 (dollars in thousands):

 

For the Quarter Ended September 30, 2025

 

 

For the Quarter Ended September 30, 2024

 

 

CTU (3)

 

 

AIUS (3)

 

 

USAHS (4)

 

 

Corporate and Other

 

 

Total

 

 

CTU (3)

 

 

AIUS (3)

 

 

USAHS (4)

 

 

Corporate and Other

 

 

Total

 

Tuition and fees, net (1)

$

116,311

 

 

$

56,394

 

 

$

37,969

 

 

$

-

 

 

$

210,674

 

 

$

111,379

 

 

$

57,063

 

 

$

-

 

 

$

-

 

 

$

168,442

 

Other revenue (2)

 

758

 

 

 

273

 

 

 

2

 

 

 

165

 

 

 

1,198

 

 

 

896

 

 

 

291

 

 

 

-

 

 

 

199

 

 

 

1,386

 

Total revenue

$

117,069

 

 

$

56,667

 

 

$

37,971

 

 

$

165

 

 

$

211,872

 

 

$

112,275

 

 

$

57,354

 

 

$

-

 

 

$

199

 

 

$

169,828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year to Date Ended September 30, 2025

 

 

For the Year to Date Ended September 30, 2024

 

 

CTU (3)

 

 

AIUS (3)

 

 

USAHS (4)

 

 

Corporate and Other

 

 

Total

 

 

CTU (3)

 

 

AIUS (3)

 

 

USAHS (4)

 

 

Corporate and Other

 

 

Total

 

Tuition and fees, net (1)

$

345,376

 

 

$

171,676

 

 

$

113,845

 

 

$

-

 

 

$

630,897

 

 

$

329,631

 

 

$

171,213

 

$

-

 

 

$

-

 

 

$

500,844

 

Other revenue (2)

 

2,246

 

 

 

769

 

 

 

6

 

 

 

539

 

 

 

3,560

 

 

 

2,506

 

 

 

903

 

 

-

 

 

 

579

 

 

 

3,988

 

Total revenue

$

347,622

 

 

$

172,445

 

 

$

113,851

 

 

$

539

 

 

$

634,457

 

 

$

332,137

 

 

$

172,116

 

$

-

 

 

$

579

 

 

$

504,832

 

__________________

 

(1)
Tuition and fees, net, includes revenue earned for all degree-granting programs as well as revenue earned for non-degree and professional development programs.
(2)
Other revenue primarily includes contract training revenue and miscellaneous non-student related revenue.
(3)
The prior period operating results for CTU and AIUS were recast to reflect the transition of the Hippo Education institution from CTU to AIUS.
(4)
USAHS includes revenue beginning on the acquisition date of December 2, 2024.

 

Performance Obligations

Our revenue, which is derived primarily from academic programs taught to students who attend our universities, is generally segregated into two categories: (1) tuition and fees, and (2) other. Tuition and fees represent costs to our students for educational services provided by our universities and are reflected net of scholarships and tuition discounts. Our universities charge tuition and fees at varying amounts and bill students a single charge that covers tuition, certain fees and required program materials, such as textbooks and supplies, which we treat as a single performance obligation. Generally, we bill student tuition at the beginning of each academic term for our degree programs and recognize the tuition as revenue on a straight-line basis over the academic term. As part of a student’s course of instruction, certain fees, such as technology fees and graduation fees, are billed separately to students. These fees are generally earned over the applicable term and are not considered separate performance obligations. We generally bill student tuition upon enrollment for our non-degree professional development programs and recognize the tuition as revenue on a straight-line basis over the length of the offering.

Other revenue, which primarily consists of contract training revenue and miscellaneous non-student related revenue, is billed and recognized as goods are delivered or services are performed.

Contract Assets

For each term, the portion of tuition and fee payments received from students but not yet earned is recorded as deferred revenue and reported as a current liability on our condensed consolidated balance sheets, as we expect to earn these revenues within the next year. A contract asset is recorded for each student for the current term for which they are enrolled for the amount charged for the current term that has not yet been received as payment and to which we do not have the unconditional right to receive payment because the student has not reached the point in the student’s current academic term at which the amount billed is no longer refundable to the student. On a student by student basis, the contract asset is offset against the deferred revenue balance for the current term and the net deferred revenue balance is reflected within current liabilities on our condensed consolidated balance sheets. For certain of our institutions, students are billed as they enroll in courses, including courses related to future periods. Any billings for future periods would meet the definition of a contract asset as we do not have the unconditional right to receive payment as the course has not yet started. Contract assets related to future periods are offset against the respective deferred revenue associated with the future period.

Due to the short-term nature of our academic terms, the contract asset balance which exists at the beginning of each quarter will no longer be a contract asset at the end of that quarter, with the exception of the contract assets associated with future periods. The decrease in contract asset balances are a result of one of the following: it becomes a student receivable balance once a student reaches the point in a student’s academic term where the amount billed is no longer refundable to the student; a refund is made to withdrawn students for the portion entitled to be refunded under each institutions’ refund policy; we receive funds to apply against the contract asset balance; or a student makes a change to the number of classes they are enrolled in which may cause an adjustment to their

previously billed amount. As of the end of each quarter, a new contract asset is determined on a student-by-student basis based on the most recently started term and a student’s progress within that term as compared to the date at which the student is no longer entitled to a refund under each institution’s refund policy. Contract assets associated with future periods remain as contract assets until the course begins and the student reaches the point in that course that they are no longer entitled to a refund.

 

The amount of deferred revenue balances which are being offset with contract asset balances as of September 30, 2025 and December 31, 2024 were as follows (dollars in thousands):

As of

 

 

September 30, 2025

 

 

December 31, 2024

 

Gross deferred revenue

$

124,920

 

 

$

61,291

 

Gross contract assets

 

(65,124

)

 

 

(24,551

)

Deferred revenue, net

 

$

59,796

 

 

$

36,740

 

Deferred Revenue

Changes in our deferred revenue balances for the quarters and years to date ended September 30, 2025 and 2024 were as follows (dollars in thousands):

 

 

For the Quarter Ended September 30, 2025

 

 

For the Quarter Ended September 30, 2024

 

 

CTU (2)

 

 

AIUS (2)

 

 

USAHS (3)

 

 

Total

 

 

CTU (2)

 

 

AIUS (2)

 

 

USAHS (3)

 

 

Total

 

Gross deferred revenue, July 1

$

64,396

 

 

$

22,716

 

 

$

26,473

 

 

$

113,585

 

 

$

61,297

 

 

$

29,488

 

 

$

-

 

 

$

90,785

 

Revenue earned from prior balances

 

(59,163

)

 

 

(16,104

)

 

 

(25,713

)

 

 

(100,980

)

 

 

(54,925

)

 

 

(21,876

)

 

 

-

 

 

 

(76,801

)

Billings during period(1)

 

101,912

 

 

 

64,006

 

 

 

56,204

 

 

 

222,122

 

 

 

97,256

 

 

 

62,871

 

 

 

-

 

 

 

160,127

 

Revenue earned for new billings during the period

 

 

(57,148

)

 

 

(40,290

)

 

 

(12,256

)

 

 

(109,694

)

 

 

(56,454

)

 

 

(35,187

)

 

 

-

 

 

 

(91,641

)

Other adjustments

 

(524

)

 

 

(322

)

 

 

733

 

 

 

(113

)

 

 

(152

)

 

 

(111

)

 

 

-

 

 

 

(263

)

Gross deferred revenue, September 30

$

49,473

 

 

$

30,006

 

 

$

45,441

 

 

$

124,920

 

 

$

47,022

 

 

$

35,185

 

 

$

-

 

 

$

82,207

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year to Date Ended September 30, 2025

 

 

For the Year to Date Ended September 30, 2024

 

 

CTU (2)

 

 

AIUS (2)

 

 

USAHS (3)

 

 

Total

 

 

CTU (2)

 

 

AIUS (2)

 

 

USAHS (3)

 

 

Total

 

Gross deferred revenue, January 1

$

33,168

 

 

$

26,555

 

 

$

1,568

 

 

$

61,291

 

 

$

36,409

 

 

$

27,561

 

$

-

 

 

$

63,970

 

Revenue earned from prior balances

 

(29,825

)

 

 

(25,022

)

 

 

(455

)

 

 

(55,302

)

 

 

(32,389

)

 

 

(26,164

)

 

-

 

 

 

(58,553

)

Billings during period(1)

 

361,969

 

 

 

175,160

 

 

 

157,734

 

 

 

694,863

 

 

 

340,676

 

 

 

178,592

 

 

-

 

 

 

519,268

 

Revenue earned for new billings during the period

 

 

(315,551

)

 

 

(146,654

)

 

 

(113,390

)

 

 

(575,595

)

 

 

(297,242

)

 

 

(145,049

)

 

 

-

 

 

 

(442,291

)

Other adjustments

 

(288

)

 

 

(33

)

 

 

(16

)

 

 

(337

)

 

 

(432

)

 

 

245

 

 

-

 

 

 

(187

)

Gross deferred revenue, September 30

$

49,473

 

 

$

30,006

 

 

$

45,441

 

 

$

124,920

 

 

$

47,022

 

 

$

35,185

 

$

-

 

 

$

82,207

 

______________

(1)
Billings during period includes adjustments for prior billings.
(2)
The prior period amounts for CTU and AIUS were recast to reflect the transition of the Hippo Education institution from CTU to AIUS.
(3)
USAHS includes deferred revenue starting from the acquisition date on December 2, 2024.

Tuition Refunds

If a student withdraws from one of our academic institutions prior to the completion of the academic term, we refund the portion of tuition and fees already paid that, pursuant to our refund policy and applicable federal and state law and accrediting agency standards, we are not entitled to retain. Generally, the amount to be refunded to a student is calculated based upon the percent of the term attended and the amount of tuition and fees paid by the student as of their withdrawal date. In certain circumstances, we have recognized revenue for students who have withdrawn that we are not entitled to retain. We have estimated a reserve for these limited circumstances based on historical evidence in the amount of $2.3 million and $2.1 million as of September 30, 2025 and December 31, 2024, respectively. Students are typically entitled to a partial refund until approximately a little more than halfway through their term. Pursuant to each university’s policy, once a student reaches the point in the term where no refund is given, the student would not have a refund due if withdrawing from the university subsequent to that date.