Earnings Call: Q4 2019

Jul 9, 2019

Good afternoon, and welcome to Aspen Group's Fiscal Year 2019 4th Quarter Earnings Call. Please note that the company's remarks made during this call, including answers to questions, include forward looking statements, which are subject to various risks and uncertainties. These include statements relating to future student enrollments and bookings, campus growth and revenue forecasts, metrics and attrition raised revenue growth, including Q1 improvements to Aspen University's core nursing program, USU's operating leverage trends, expectations from USU's FNP monthly payment plan changes, expected G and A trends, expected improvements in adjusted EBITDA and operating cash for fiscal year 2021 and our liquidity. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. A discussion of risks and uncertainties related to Aspen's business is contained in its filings with the Securities and Exchange Commission mentioned in the press release issued this afternoon. Aspen Group disclaims any obligation to update any forward looking statements as a result of future developments. I'd also like to remind you that during the course of this conference call, the company will discuss adjusted EBITDA and EBITDA, which are non GAAP financial measures in talking about the company's performance. Reconciliation to the most direct comparable GAAP financial measures are provided in the tables in the press release issued by the company today. There will be a transcription of this conference call available for 1 year at the company's website. Now I'll turn the call over to Michael Matthews, Aspen Group's Chairman and Chief Executive Officer. Good afternoon. I will begin the call today by discussing the first full year results of our pre licensure BSN campus business and recap the company's marketing spending strategy and enrollment results and equate those results in terms of bookings. Then I will make a strategic announcement related to our monthly payment plan at USU. Joe Sussman will then follow with a review of our financial results. As you know, we launched our first pre licensure BSN campus in Phoenix last July, so it's been in operation for nearly a year. In these 1st 12 months, which includes enrollments registered in May, we delivered nearly 500 enrollments. And as of the end of the fiscal year on April 30, we had 396 active students in the program. Of the 396, 273 students are in the 1st year prerequisite phase of the program and the other 123 are in the final 2 year core program. To date, we've had 127 students enter the final 2 year core program and only 4 students have withdrawn thus far. That's only a 3% attrition rate since opening, so we're very comfortable modeling less than 10% attrition for this cohort. These are important metrics because the final 2 year core program delivers the university first student revenues of approximately $40,000 So should this cohort graduate at a rate of, say, 93%, that delivers over $37,000 of LTV on average for that final 2 year core program cohort. The other cohort is the students that enter the 1st year of your academic phase of the program. These students typically enter the program with some college credits and are required to complete the total of 41 1st year credits before entering the final 2 year core program. We are comfortable at this point predicting a 2 third matriculation rate of 1st year students that successfully complete their first their 41 1st year credits and thereby enter the final 2 year core program. Based on a seventy-thirty ratio of prerequisite students to final 2 year core program students, we are now able to confirm a weighted average LTV of approximately $30,000 per enrollment in this pre licensure BSN program. This $30,000 LTV per enrollment or if you will the ARPU or average revenue per user for this business is just over 4 times higher than the ARPU for our traditional Aspen online nursing students of $7,350 In addition to a 4x ARPU, the average cost of enrollment for this pre licensure BSN program to date is approximately $400 meaning that for every dollar spent in marketing, we're projecting to earn nearly $75 of revenue. These operating metrics suggest that we should focus most of our expansion capital in this business. This is indeed our plan as we're targeting to open 2 campuses per calendar year starting in 2020 for the next 5 years. So as we reach the end of calendar year 2024, we expect to have 12 campuses in operation. Once these 12 campuses all reach full maturity, we're projecting that this business alone will be over a $100,000,000 business. Next, I'd like to discuss our recent enrollment results comparing fiscal year 2018 to fiscal year 2019 and what that equates to in incremental bookings. Please feel free to follow along as this analysis is available for review on earnings Slide 78, which is available for download on our IR site, astu.com. So let's go back to fiscal year 2018 on Slide number 8. The total enrollment for the year was 4,254. You can see that the vast majority of the enrollments were in Aspen's traditional online nursing program, which delivered an LTV of $7,350 per enrollment. So in fiscal 2018, we delivered bookings in that unit of $28,400,000 while adding bookings of $1,500,000 in our asset and doctoral unit, another $5,000,000 of bookings in our USU, primarily S and P unit during the 5 months following the acquisition. That means the company in total delivered bookings for fiscal year 2018 of $34,800,000 Okay. Let's compare that to fiscal year 2019. As we've discussed previously, we made a conscious decision to hold spending relatively flat on a year over year basis in our Aspen online nursing core unit for two key reasons. One, the LTVs for the other three units are significantly higher than the accident nursing online LTV. And 2, we decided that focusing our growth spending on these higher ARPU business units would over the long term result in higher revenues and net income than the Aspen University online nursing programs. Consequently, note that we delivered 3,825 enrollments in fiscal year 2019 in our Accent online nursing unit, which equates to $28,100,000 of bookings. In addition, the Accent doctoral unit delivered 4 84 enrollments, equating to $6,100,000 of bookings. USU, through predominantly FNT program enrolls, delivered a total of 10 60 enrollments, which equates to $18,900,000 of bookings. Finally, AppSync's pre licensure BSN program delivered 433 enrollments for total bookings of 13,000,000 dollars So the company delivered a total of 5,802 enrollments for fiscal year 2019, which translates to $66,100,000 of bookings. So to recap on Slide 7, total enrollments rose year over year from 4,254 to 5,802, which equates to a 36% enrollment increase year over year. However, because the enrollment growth was directed exclusively towards the higher LTV businesses, bookings rose by 90% year over year from $34,800,000 to 66,100,000 dollars Growth in enrollment by 36% year over year yet achieving a 90% increase in bookings translates to a 39% ARPU increase year over year. It should now be clear why we directed the growth capital to these new business units. That leads me to our enrollment projections for fiscal year 2020 and what that equates to in bookings. We are targeting year over year total enrollment growth of approximately 25%, which we expect will deliver year over year bookings growth of approximately 35%, which would equate to approximately $89,000,000 of total bookings for this fiscal year 2020. To deliver year over year enrollment growth of 25% in this current fiscal year of 2020, We project the pre licensure VSN program enrollments to grow by over 80% and USU enrollments to grow by over 30%. We also expect our ASCEND docuil units to grow enrollments by nearly 50%. Finally, our traditional Aspen online nursing core is projected to grow enrollment by approximately 15% this fiscal year as we plan to moderately increase our marketing spend later this fiscal year. As a result of this 39% average revenue per user increase year over year, we set the stage for sustained revenue growth. We're already seeing the benefit of this fiscal year 2019 39 percent ARPU increase as we're now confident in guiding that our revenues for the current quarter, fiscal Q1 2020, will be over $10,000,000 which is over $600,000 higher than the analyst's current consensus. I'll complete my remarks today by making an important announcement regarding our monthly payment plan for our United States University family nurse practitioner program. Allow me to first provide some background. The company first launched the innovative monthly payment plan or NPP at Aston University back in the spring of 2014, just over 5 years ago. The NPP was designed to allow students the ability to pay for their education through a fixed number of monthly payments. Additionally, we designed the NPP so that the payment plan duration would have approximately a 1 year tail of monthly payments following the completion of a given student's academic program. So for example, our bachelor and master level post licensure online nursing programs at Aspen University typically cost in the range of $10,000 to $13,000 The average completion duration is in the 2.5 year range. Therefore, students that finish in 2.5 years would typically have about 10 months of payments that remain following their graduation. That's a payment gap we're quite comfortable with. United States University MSN Family Nurse Practitioner Program, on the other hand, has a total cost of attendance of nearly 27,000 Given the monthly payment required of $3.75 this equates to approximately a 6 year payment plan. Given the average completion duration for the SMP program is approximately 2.5 years, That means for this program, rather than a 10 month tail post graduation, we're managing a 42 month tail. Given the length of this cash collection tail, the company has decided to modify the FNP monthly payment plan effective at the end of this month, July 31. The new program is a hybrid payment hub. We're going to combine the monthly payment plan with a second payment method such as financial aid, corporate tuition reimbursement, private loans or of course, cash. Here's how the new program works. The 1st year of the SMP program are their preclinical courses, which cost students about $9,000 We will allow students to pay for this 1st year liability of 9,000 dollars through 24 monthly payments of $3.75 These payments are made while the student is attending this minimum 2 year program duration. However, when the student completes their 1st academic year and is ready to commence with their 2nd academic year, which is a critical year that equates to a liability of about 18,000, dollars Students will be required to utilize federal financial aid or a combination of F and A together with cash resources or corporate tuition reimbursement or private loan loans. This will eliminate our 4 to 8 month tail entirely and allows university to get paid in full upon the student's graduation date. And this approach still maintains our mission as a company to make college affordable again and to minimize student debt as much as possible. The result of the SEP's NEP program change for USU's FNP program is expected to reduce our operating cash requirements by over $2,000,000 in fiscal year 2021 and much more in future fiscal years and therefore shortens the timeframe for the company to begin generating positive free cash flow on an operating basis. I'll now turn the call over to our CFO, Joe Scelini, to review our financial results for Q4 and to make some comments relative to our liquidity. Good afternoon. I will begin today by reviewing our financial results for our fiscal 2019 Q4. I will then make some observations on our financial progress and liquidity. First, quarterly revenue was approximately $10,200,000 a 41% increase from the comparable prior year period and a sequential increase of $1,700,000 or 20%. Of course, the 4th quarter is our strongest seasonal quarter, and we were able to use the seasonal strength to drive strong revenue growth in each area. In the 4th quarter, revenue increased sequentially by approximately $1,000,000 or 15 percent for Aspen's online nursing and other unit, over $100,000 or 32% for the Aspen pre licensure BSN program and over $600,000 or 35 percent at USU. Pre licensure BSN program and USU businesses that we entered in the past 18 months now account for 29% of our total revenue. Aspen Group's gross profit for the 4th quarter increased to approximately $5,700,000 or a 56% margin, which is up from 50% in Q3. This margin expansion was due to economies of scale. Aspen University's gross profit represented 58% of Aspen University's revenue for the quarter, while USU's gross profit equaled 55% of USU's revenue for the quarter. USU's gross margin increased 10 percentage points sequentially. Total instructional costs and services for the quarter rose to approximately $2,000,000 or 19% of revenue. Aspen University's instructional costs and services represented 17% of Aspen University revenue for the quarter, while USU's instructional costs and services equaled 25% of USU's revenue for the quarter. Both of these were down from the previous quarter, especially USU, which declined by 5 percentage points. Marketing and promotional costs for the quarter were approximately $2,300,000 or 23% of revenue, declining from 27% as a percentage of revenue in the 3rd quarter. Aspen University's marketing and promotional costs were 21% of Aspen University's revenue for the quarter, down from 25% in the 3rd quarter. USU's marketing and promotional costs equaled 19 percent of USU's revenue for the quarter, down from 25% last quarter. G and A costs for the quarter were approximately 6 $700,000 compared to approximately $5,400,000 during the comparable prior year period, an increase of $1,300,000 or 25 percent and a sequential increase of approximately $400,000 Containing G and A increases as we continue to aggressively grow revenues is another key to margin expansion. So we are satisfied to see that G and A as a percentage of revenue declined significantly from 74% in Q3 to 65% in Q4. Net loss applicable to shareholders was approximately $1,600,000 or diluted net loss per share of $0.09 for the quarter as compared to a net loss of $3,700,000 or $0.24 per share for the comparable prior year period, reduction in the loss of approximately $2,100,000 Aspen University generated approximately $1,100,000 of net income for the quarter. USU experienced a net loss of approximately $500,000 during the quarter, and AGI Corporate incurred $2,200,000 of expenses in the quarter. AGI's expenses were up sequentially by about $400,000 due to higher interest expense and franchise tax. With the reduction in authorized shares recently approved by our shareholders, the franchise tax component will come down in the future. USU's net loss declined by over $400,000 and operating loss improved by over $500,000 Since USU's revenues increased by about $600,000 sequentially, USU achieved over 80% operating leverage in the quarter. With regard to our liquidity position, Aspen Group ended the quarter with approximately $10,000,000 in cash and restricted cash, up $5,600,000 from the level at the end of the 3rd quarter. This was driven by net inflows from financing of $9,000,000 partially offset by cash used in operations and investing activities of approximately $3,400,000 Stepping back from the specific numbers for the Q4, there are 5 key financial takeaways I'd like to highlight. First, as Mike Matthew explained, we made a conscious decision to focus our resources towards aggressively growing our new businesses at USU in the pre licensure campus business. As a result, we limited the spending for AU Online, both in terms of Internet advertising and call center staffing. We strongly believe that these other businesses have higher long term returns, but that does not mean that the returns for AU Online are low or that our growth opportunities are limited. Quite the contrary, AU produced a 16% operating margin in the 4th quarter, and we believe it is capable of consistently producing 20% plus operating margins in the near future. We also think there's ample room for continued growth in this area. 2nd, we have been very focused on improving operating margins. When we acquired USU at the end of 2017, it was losing a significant amount of money in the range of $1,000,000 a quarter. To build it back to a financially successful operation, it has taken us several quarters with our strategy being to drive most of the growth in the high expected margin FNP program. 1st few quarters showed revenue growth, but not much improvement in operating loss. However, the past couple of quarters have shown that our strategy is working and we have posted very strong operating leverage at USU. We expect this trend to continue. We have also made substantial progress financially with the pre licensure business. Our first campus was launched in July 2018, and we currently expect that campus to be profitable in the current quarter, Q1 of our fiscal year 2020. We were also satisfied that we were able to report positive adjusted EBITDA for the Q4 of the overall company. We expect continued progress on profitability. While seasonality in Q1 is a factor for us, we expect adjusted EBITDA to be positive for full year 2020 after an adjusted EBITDA loss in Q1. The expected improvements in profitability will be largely driven by strong revenue growth and much lower growth in expenses, especially G and A. In recent quarters, we have been effective in limiting G and A growth. Over the next few years, we think we can grow G and A on average at about half the rate of revenue growth. Next, like many high growth companies, one of our challenges is managing cash flow. Looking forward, we expect net loss to decline, and that, of course, will help our cash flow. In addition, we are focused on improving our working capital position. The change in the monthly payment plan for the FMP program that Mike described is expected to help significantly in that area. We have carefully reviewed our financial needs and resources for the next few years. Based on that, we are confident that our existing resources are sufficient to execute on our business plan, including the announced new campus in Phoenix in partnership with Hutter Health as well as an additional 2 new campuses for calendar year 2020. We do not expect to require any financing beyond our current resources until the final maturity dates of our existing debt facilities in the fall of 2021. By the time of those maturities, we expect the company to be generating significant positive EBITDA and free cash flow. Consequently, at that time, we would look to replace the current facilities with a traditional bank facility or of course, we could choose to raise equity at the final maturity date if market conditions were favorable. That concludes our prepared remarks. And now I will turn the call back to the operator for the Q and A portion. Our first question comes from the line of Darren Aftahi from Roth Capital Partners. Your question, please. Hey, guys. Thanks for taking my questions and a nice quarter. To see if I may, the enrollments on the FMT program, Mike, can you talk about is that move to beyond kind of an every other month enrollment? And if so, kind of when did that start or when will that start? And what's kind of the trend line for the enrollments? That's my first question. You talked a little bit about prelicensure and the unit economics there. You, I think, said next quarter the current quarter we're in, you expect it to be profitable. I guess, with a year under your belt with 1 campus, can you maybe give us an understanding if a year time frame with upfront capital costs and a year of losses, if that's kind of the kind of expectation for each campus in terms of how much upfront capital costs will be required to get to breakeven? And then third, on USU, in the quarter you just reported, I didn't quite catch it. Was that business breakeven? Or is it still losing money? And then what's your expectation for USU in terms of turning adjusted EBITDA positive? Thanks for the questions, Darren. Appreciate it's Mike Matthews. I'll take the first two questions and then I'll let Joe handle the 3rd question. So in terms of enrollment expectations for USU, we just completed the year with 10 60 enrollments, which as I mentioned earlier, with an LCD of 17,820 that delivered bookings of about $18,900,000 We're continuing to enroll students every other month. At this point, we feel it's a better it's more effective operationally to continue to do starts every other month rather than every month, partly because the FME program throughout the program requires a series of weekend immersions and we find it easier to manage that every other month. We do expect this year to grow enrollments for fiscal year 2020 by approximately 30%. So we're guiding to about 13.75 enrollments for the full year, which will give you bookings of about $24,500,000 So that's the plan for USU, again, to grow enrollments approximately by 30% year over year. And I think that delivers bookings growth from now about $19,000,000 to nearly $25,000,000 From a campus perspective, as we mentioned previously, we estimate that our CapEx for each campus that we launch is going to be about $1,000,000 However, HonorHealth, which is a campus that we're opening in about 6 to 8 weeks, that's different because we were able to utilize their building and they have a lot of equipment already in place. So we're projecting the cost, the CapEx for that to be in the $600,000 to $700,000 range. So that will be more cost effective. The first campus, our original campus currently that has 396 active students, and that's the campus on the south side by the airport in Phoenix. We are again, as we mentioned, we believe that this quarter will be a profitable quarter for the campus, meaning that we've delivered profitability from launch to deliver profitability in less than a year. That 1 year operating losses is in the range of approximately $500,000 And we have no reason to believe that that result is going to be any different as we launch additional the additional campus in Phoenix as well as new campuses in other metropolitan areas across the country. Yes. And then third, you asked about current USU profit or loss position. So I did mention that we've made significant progress in that area and are showing significant operating leverage and we expect to continue to do that. But for the Q4 of 2019, USU did have a loss of about 0.5 $1,000,000 Great. Thank you. Thank you. Our next question comes from the line of Eric Martinuzzi from Lake Street. Your question please. Yes. I had a question about your the outlook for Q1. That was certainly better than I was expecting. So I want to just make sure I have my numbers right here. You do expect $10,000,000 or more for Q1 to be to post an adjusted EBITDA loss in Q1, but then you expect that adjusted EBITDA loss to reverse out and flip positive in Q2. Is that correct? Yes, that's correct. Okay. And then maybe I'm just not capturing the strong bookings you had in fiscal 'nineteen. I have been modeling for kind of a step down in a seasonally slower Q1. What is the biggest driver of that? You're going to be roughly sequentially flat here in Q1. What's the biggest driver? Are you talking about in terms of enrollment for Q1? Sorry, revenue. Revenue? Okay, well, so there's multiple factors at hand. Number 1, we are over exceeding our expectations in terms of enrollments at USU this quarter. You'll see that when we announce our enrollments for Q1. We also are exceeding our expectations for enrollments in our pre licensure business, both in terms of pre requisite students as well as core, the 2 year core program students. And we're also, you guys probably are aware, we also have started to drive enrollment for prerequisite students at the Honors Health Campus. So those revenues are coming in as well that perhaps you guys weren't assessing. So essentially our 3 newest units are the cause of the over performance of the company. So this will be the 1st year that while revenue seasonal revenues declined somewhat for Aspen Online Nursing core because it's against the seasonal summer months. These new businesses are essentially overcoming that seasonality dip in the summer months. So yes, we see revenue to be at least $10,000,000 for the quarter. Okay. And then I got a little bit of the strategic change there in the monthly payment plan for family nurse practitioner. Could you recap for me the typical student for FNP, how long they are attending class and how long the old payment plan was? And then the new expectation for the payment term? Yes. So let me recap it again. So the typical FNP student, we're assessing the duration that they're typically in the school and they are allowed to take a term off throughout the 2 years. So a typical average duration is 2.5 years. So again, approximately 30 months. The payment plan is 72 months. So you're looking at again a payment tail of approximately 42 months is how the plan used to work. What we've decided to do is to allow the students to pay for the 1st year of the 2 year program by paying us $375 a month during the 2 years that they're in the program. So again, we'll collect $9,000 of monthly payments throughout their 2 year academic duration. The 2nd academic year, they double up by courses and it's the clinical programs and the courses are more expensive and that liability in year 2 is $18,000 So in order to eliminate that 42 month tail, we made a decision to require students to use a different payment method for year 2. They cannot use multi payment plan for year 2. They must use the traditional federal financial aid or other alternative payment methods. Okay. Do you have an expectation? I mean, have you kind of surveyed the students? And do you have a feel for obviously, your mix is going to shift here. The number of right now, USU students, on the payment plan is 66 percent of the active student body. What do you expect that to go to under the new plan? We don't expect any enrollment decline as a consequence of this monthly payment plan change. You have to remember that FNP programs, our competitors charge north of $50,000 for these programs and we're down in the $27,000 range. So we're significantly less expensive than our major competitors. And so consequently, we believe this alteration of the plan still allows them to pay a third of the total cost of the tenants through a monthly payment approach. And it does push down the total amount of federal debt that they would incur with that $18,000 that second year liability. So we don't think that we are going to have any problem enrolling students just like we haven't had a problem in the 1st year and a half. We see no issues going forward. Was there perhaps a pull through effect? Like, as you're counseling as the enrollment advisers were counseling FNP prospects, was there kind of a get in before the payment plans change? Was there any impact to that in Q1? Yes. You're going to see probably a decent number of students complete their registration process by July 31, yes. Okay. All right. And then lastly, shifting over to the pre licensure program, we're looking forward to the HonorHealth enrollees in September. Is there any other preparatory steps, any large hurdles you or Honor need to overcome other than just waiting for the calendar and the arrival of the enrollees? Yes. No, we're in great shape. The construction of the building is nearing completion, and we've been assured that we're going to be ready to go with our September semester. Okay. Thanks. Congrats on the quarter, and thanks for taking my questions. Thank you. Thank you. Our next question comes from the line of Austin Moldow from Canaccord. Your question, please. Hi, thanks for taking my question. Just one please. So it looks like your non Aspen online, non USU marketing spend is about 300 ks a quarter, which I'm assuming the majority or all of that is the pre licensure business. Wondering what you see that increasing to next year, particularly with more campuses online? Well, I mean, surprisingly, we have been able to deliver enrollments to date in the 400 hour per enrollment range. And we are utilizing a really interesting combination of our traditional Internet advertising combined with some interesting social media approaches together with some local radio. And the combination of those three things has been terribly effective for us. And so I don't see I think what you guys should do is you should understand that we're guiding to an 80% enrollment increase year over year in the pre licensure business. And I don't see any reason why you shouldn't continue to utilize $400 as the cost of enrollment going forward. We're going to be making an announcement over the next 30 to 45 days of the 2 new campuses that we're planning to launch in 2020, calendar 2020. And those will be in 2 new metro markets and we're just in the process of finalizing those clinical partnerships and the affiliation agreements. And once those documents are signed, we will be making those announcements. Got it. Thanks for taking my question, and congrats on the quarter. Thank you. Our next question comes from the line of Mike Mulla from Craig Hallum. Your question please. Great. Thanks for taking my questions guys. Mike, if I could just focus on the churn with the pre licensure program, it was quite low and it looks like it's a little bit lower than what we were looking for, which is really positive. I know that in February, you had said that you thought you could get I think you guided to 1,000 ending student number at the end of this year. Is that number sort of given where your enrollments are headed with the up 80%, does that still make sense to you, that 1,000 at the end of the year? Yes. No, no, that still makes sense. And remember that we have around a 2:3:1 ratio of prerequisite students to the core final 2 year core nursing students. And so we delivered about 433 enrollments this past fiscal year. So we're assuming we're going to add another 780 enrollments this year. And given a 2 third matriculation rate that we're currently seeing for the prerequisite students, yes, you can expect us to be in that 1,000 plus range in terms of active students at the end of the year. Okay, great. And then just sort of following up on that on the FMP side, I think you were looking for 1400. How does that look for you? 14 100 students for FMP by year end. That's your sticking with that. Yes. Mike, I didn't hear the question. I apologize. Can you repeat that for me? I was just saying that the same question with regards to the FNP program. In February, you had laid out $14,000,000 as your guidance. And I'm just wondering if that still holds as well. Yes. Yes, we have. Yes, that is correct. That's still the guidance. And you have about 178 non FNP students right now in your at USU. And I'm just wondering, how does that number you think trend over time? And is there any risk with those students with this change in payment plans? No. The only payment plan change, of course, was with this specific nursing program, this nurse practitioner nursing program. The student body at USU does is you're correct, it's in that sort of 15% to 20% range of non FNP students and it's a combination of other nursing students like BSN students online as well as education and business students. And those programs are all available for the traditional monthly payment plans similar at Aspen. We continue to spend the vast majority of our spending on the FNP program at USU and that's the plan for the year. So I don't expect that percentage of non FNP students to change much. Okay. One final question, maybe for Joe. You made some real great progress in taking that cost of instruction down to 25% at USU. I'm wondering how long do you think it will take to get closer to the Aspen core of 'seventeen And how do you see that trending over the next year or so? Sure. I think it's going to be unlikely that the FFP program ever goes down to 17%. There are some structural differences with the clinical components of that program. So I think it's going to consistently be a little bit higher than AU Online. On the other hand, we brought it down from 30% last in the Q3 to 25% in the Q4. And I think we will see in the near future some additional reductions in that into the low 20s. Thank you. Our next question comes from the line of Kevin Oppenhaim from He's a Private Investor. Your question, please. Hi, Mike. This is Kevin Oppenhaim here with Andrew Cich. We spoke recently. I guess, whilst it's interesting for us to hear about the sort of detail and the progress and then the performance in the quarter, how sort of questions really relate to how you see the progress you're making on operational levels translating into sort of investor appetite and improving the liquidity in the stock and looking at the sort of stock price improvement. So, we'd like to sort of come up a level from the enrollment detail, etcetera. And just understand for me what you think in the next 2 or 3 quarters the catalyst for stock improvement and appetite from investors. Where are the triggers to that? Well, thanks for the question, Kevin. So I think the first thing that I think is important to point out is that we as a company made a decision to launch into 2 relatively new businesses, 1 with the acquisition of USU and second with the launch of this initial DSN pre licensure campus. And so whenever you're starting 2 new businesses, there's going to be growth capital required and there'll be some short term losses while we're building scale. And so I think one of the important nuggets that Joe outlined today is that we're currently guiding that in the next couple of fiscal years, you're going to see that operational improvement in the form of the G and A we're looking to grow at only half the rate of our revenues. And so I think as we continue to get scale with these 2 new businesses, combined with us carefully watching the G and A growth as a percentage of the revenue, you'll see that our shareholders will see that terrific operational improvement. And I think at that point, I would hope that the valuation of the company will improve then as a consequence. And Mike, I sort of we get all that. Is there, again, a strategy to sort of try and capture a sort of a new audience or a wider audience? Or how do you see yourself presenting as an attractive investment opportunity to new investors looking to acquire at an early stage and looking at the growth opportunities? How do you sort of present that and make a compelling case to a potential new investor? Well, again, one of the things that we have currently is we have a couple of investor relation consultants that we work with. And we do have a plan this quarter to hire a new investor relation firm. And I'm also incredibly active in terms of going out on the road on non deal roadshows and presenting to microcap hedge funds and other investors. So again, I think it's important that we both have a 3rd party IR firm as well as myself continuing to hit the road to tell the story. And yes, do you guys have any sort of sense or any sort of confidence in how the sort of operational improvements are going to reflect in share price? Or is that just not a concern at the moment? Is share price something you guys are sort of pushing out to sort of 2 or 3 years' time once you have the sort of operational improvements that you're suggesting? Or how are you sort of planning on sort of keeping the interest in the current investors and looking at attracting these And that's, I guess, from our perspective, sort of a really important aspect in terms of what you guys do well in the next sort of 2, 3 quarters because we hear a lot about the operational improvements. You guys are a public company. So I think it's really important that, that message gets out there. We discussed this previously, and I'm still not quite sort of getting how you guys are going to conduct the sort of IRPR process sort of in alignment with the sort of management and the strategic improvements you're looking to make. There's guys who bought in the $8, $9 here sitting on sort of $4 and we're sort of wondering where the company and the Board and the management see the sort of path back to $5, 6, 7, 8, dollars 9 dollars 9 dollars 9 dollars a share? Yes. So obviously, as the Chairman of the company and, of course, the Board of Directors, our job is to drive shareholder value, both short term as well as long term. And it's our job to try to manage those two goals. And that's really all I feel like I'd like to say at this point. Okay. Well, we will sort of monitor the progress closely over the next sort of 2, 3 quarters. And we certainly hope to see some share price improvement that matches the operational progress you guys are making. We're going to work hard to do that. We're going to do that. Many thanks. Thanks, Kevin. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Michael Matthews for any further remarks. Thanks, everyone, for your attendance today. Look forward to talking to you on our next earnings call in a couple of months. Have a good afternoon. Thank you, ladies and gentlemen, for your participation in today's