Phoenix Education Partners, Inc. Reports First Quarter Fiscal Year 2026 Results
PHOENIX--( BUSINESS WIRE)--Phoenix Education Partners, Inc. (NYSE: PXED) (the “Company” or “Phoenix Education Partners”), the parent company of The University of Phoenix, Inc. (the “University”), today reported financial results for the three months ended November 30, 2025, with first quarter revenue of $262.0 million.
“Guided by our mission to serve working adults through skills-aligned, career-relevant education, we continue to build momentum across the University,” said Chris Lynne, Chief Executive Officer of Phoenix Education Partners and President of the University. “Our first quarter results reflect continued strong retention and enrollment growth as we provide flexible, career-relevant programs for busy adult learners. We remain focused on deepening employer alliances, enhancing the student experience and outcomes, and delivering high-quality, affordable offerings that help students advance their educational and professional goals.”
First Quarter 2026 Results of Operations
Phoenix Education Partners reported net revenue for first quarter 2026 of $262.0 million, compared to $254.7 million for first quarter 2025. In first quarter 2026, the University’s Average Total Degreed Enrollment 1 was 85,600, compared to 82,200 for first quarter 2025. Net Income attributable to Phoenix Education Partners for first quarter 2026 was $15.5 million, or $0.40 diluted earnings per share, compared to $46.4 million, or $1.23 diluted earnings per share, for first quarter 2025. The decrease in net income attributable to Phoenix Education Partners was primarily due to expense, including share-based compensation, that resulted from our initial public offering (“IPO”) (see sections “Initial Public Offering” and “Reconciliation of GAAP Financial Information to Non-GAAP Financial Information” for additional information).
Adjusted EBITDA was $75.2 million for first quarter 2026, compared to $70.1 million for first quarter 2025, and adjusted diluted earnings per share was $1.38 for the first quarter 2026, compared to $1.35 for first quarter 2025. 2
1“Average Total Degreed Enrollment” represents the aggregate of monthly Total Degreed Enrollment during a specified period divided by the number of months in the period. We define “Total Degreed Enrollment” as the number of confirmed students (both new and continuing) enrolled in credit-bearing courses who post attendance at least one time during a calendar month (even if they withdraw later in the same month), excluding students who graduated as of the end of such month.
2 Adjusted EBITDA and adjusted earnings per share are non-GAAP measures. For more information on non-GAAP measures used in this press release and a reconciliation of our GAAP information to our non-GAAP information, refer to the sections titled “Use of Non-GAAP Financial Information” and “Reconciliation of GAAP Financial Information to Non-GAAP Financial Information.”
Common Stock Cash Dividend
The Company announced today that its Board of Directors approved a regular, quarterly common stock cash dividend of $0.21 per share, payable on February 18, 2026 to stockholders of record as of January 28, 2026, and holders of certain share-based awards as of the same date.
Balance Sheet, Cash Flow and Liquidity
As of November 30, 2025, the Company’s cash and cash equivalents (including restricted cash and cash equivalents) and marketable securities (including current and noncurrent marketable securities) totaled $218.1 million, compared to $194.8 million as of August 31, 2025. The increase was primarily attributable to $31.1 million of cash generated by operating activities, which was partially offset by $4.7 million of capital expenditures.
On November 13, 2025, the Company entered into a senior secured revolving credit facility in an aggregate principal amount of $100.0 million that is available as a source of liquidity for Phoenix Education Partners and its subsidiaries and matures on November 13, 2030. As of November 30, 2025, the Company had no outstanding debt under the credit facility or otherwise.
Initial Public Offering
On October 10, 2025, Phoenix Education Partners completed an IPO of 4.9 million shares of common stock at a price of $32.00 per share, which included 0.6 million shares sold to the underwriters pursuant to their option to purchase additional shares. The shares were offered by certain of the Company’s existing shareholders and, accordingly, the Company did not receive any proceeds from the sale of shares associated with the offering. In connection with the IPO, on October 7, 2025, AP VIII Queso Holdings, L.P. converted into a Delaware corporation pursuant to a statutory conversion and changed its name to Phoenix Education Partners, Inc.
As reflected in the financial tables of this press release, we have applied retrospective presentation to our earnings per share for all periods presented such that weighted average shares outstanding reflects certain equity conversions resulting from the IPO.
Business Outlook
For fiscal year 2026, the Company expects net revenue to be in the range of $1,025.0 million to $1,035.0 million. Adjusted EBITDA for the same period is expected to range between $244.0 million and $249.0 million.
Conference Call Information
Phoenix Education Partners will host a conference call to discuss its financial results for the first quarter fiscal year 2026, today at 3:00 p.m. Mountain Standard Time (5:00 p.m. Eastern Time). The call can be accessed by webcast on the Phoenix Education Partners website at www.phoenixeducationpartners.com. Please register in the Investor Relations section of the site 15 minutes prior to the call. The call can also be accessed by dialing (800) 715-9871 (domestic) or +1 (646) 307-1963 (toll), using conference ID: 8113013. The webcast will be archived for 30 days and the call replay for seven days. To access the replay, dial (800) 770-2030 (domestic) or +1 (609) 800-9909 (toll), using conference 8113013, or visit the Investor Relations Section of the Phoenix Education Partners website.
About Phoenix Education Partners, Inc.
Phoenix Education Partners, Inc. is the parent company of The University of Phoenix, Inc., a pioneer in online education for working adults. Founded in 1976, University of Phoenix provides access to higher education opportunities that enable students to develop the knowledge and skills necessary to achieve their professional goals, improve the performance of their organizations and provide leadership and service to their communities.
Use of Non-GAAP Financial Information
The Company’s non-GAAP financial measures are intended to supplement, but not be a substitute for, financial measures prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Management uses, and chooses to disclose to investors, these non-GAAP financial measures because: (i) such measures provide an additional analytical tool to clarify the Company’s results from operations and help to identify underlying trends in its results of operations; (ii) as to the non-GAAP earnings measures, such measures help compare the Company’s performance on a consistent basis across time periods; and (iii) these non-GAAP measures are employed by the Company’s management in its own evaluation of performance and are utilized in financial and operational decision-making processes, such as budgeting and forecasting. Exclusion of items in the non-GAAP presentation should not be construed as an inference that these items are unusual, infrequent or non-recurring. Other companies, including other companies in the education industry, may calculate non-GAAP financial measures differently, limiting their usefulness as a comparative measure across companies.
Adjusted net income attributable to Phoenix Education Partners. We define adjusted net income attributable to Phoenix Education Partners as net income attributable to the Company, adjusted to eliminate the impact of restructuring lease expense, strategic alternatives expense, cybersecurity incident expense, impairment charges and asset disposal losses, litigation charges and regulatory expense, non-cash share-based compensation expense, certain tax effects and other items. 3
Adjusted EBITDA. We define adjusted EBITDA as net income attributable to the Company, adjusted to eliminate the impact of restructuring lease expense, strategic alternatives expense, cybersecurity incident expense, impairment charges and asset disposal losses, litigation charges and regulatory expense, non-cash share-based compensation expense, depreciation and amortization, interest income, net of interest expense, provision for income taxes and certain other items. 3
Adjusted earnings per share. We define adjusted earnings per share as adjusted net income attributable to Phoenix Education Partners divided by basic or diluted shares, as applicable, used in computing earnings per share.
Adjusted EBITDA margin. We define adjusted EBITDA margin as adjusted EBITDA divided by net revenue, expressed as a percentage.
Included in the sections that follow are reconciliations between the non-GAAP financial measures and the most directly comparable GAAP measures.
With respect to Adjusted EBITDA for 2026, we are not able to reconcile this forward-looking non-GAAP financial measure to the most directly comparable GAAP measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain items, including but not limited to potential expenses associated with our cybersecurity incident and our provision for income taxes, which could have a significant impact on our future GAAP results.
3 For our first quarter of 2026, we changed our definition of this measure to start with “Net income attributable to Phoenix Education Partners” instead of “Net income” and began excluding expenses incurred related to our cybersecurity incident, which we do not believe are representative of our ongoing operations. We have retrospectively changed this measure for all periods presented to conform with our new definition.
Forward-Looking Statements
This press release contains, and oral statements made from time to time by representatives of the Company may contain, forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. These forward-looking statements are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this press release, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management, and expected market growth are forward-looking statements. The forward-looking statements could relate to the following, among other things: our strategy, outlook and growth prospects; our operational and financial targets and dividend policy; general economic trends and trends in the industry and markets; and the competitive environment in which we operate.
These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Important factors that could cause our results to vary from expectations include, but are not limited to: our ability to comply with the extensive regulatory requirements for our business, and the impact of a failure to comply with applicable regulations or regulatory requirements, standards or policies, which could subject us to significant monetary liabilities, fines and penalties, including loss of or limitations upon access to U.S. federal student loans, grants and military program benefits for our students, and otherwise have a material adverse impact on our business; shifts in higher education policy at the federal and state levels; our ability to maintain our institutional accreditation and our eligibility to participate in Title IV programs; our ability to enroll and retain students; our ability to adapt to changing market needs or new technologies; our ability to maintain existing, and develop additional, business-to-business relationships with employers; our ability to attract or retain a qualified senior management team and qualified faculty members; the impact of compliance reviews, claims, or litigation that government agencies, regulatory agencies, and third parties may conduct, bring or initiate against us based on alleged violations of the extensive regulatory requirements applicable to us; our ability to establish, maintain, protect and enforce our intellectual property and proprietary rights and prevent third parties from making unauthorized use of such rights; liability associated with any failure to comply with data privacy and data security laws and the unauthorized access, duplication, distribution or other use of confidential or personal information; additional tax liabilities; our ability to pay dividends on our common stock or the timing or amount of any such dividends; and other risk factors identified in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
These forward-looking statements are based on assumptions and subject to risks and uncertainties. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this press release and, except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release. We anticipate that subsequent events and developments will cause our views to change. This press release should be read completely and with the understanding that our actual future results may be materially different from what we expect. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may undertake. We qualify all of our forward-looking statements by these cautionary statements.
PHOENIX EDUCATION PARTNERS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended
November 30,
(In thousands, except per share data)
2025
2024
Net revenue
$
262,027
$
254,692
Costs and expenses:
Instructional and support
115,248
108,123
General and administrative
106,557
81,955
Strategic alternatives, restructuring and other
14,628
4,946
Total costs and expenses
236,433
195,024
Operating income
25,594
59,668
Interest income
1,761
3,858
Interest expense
(215
)
(114
)
Income before income taxes
27,140
63,412
Provision for income taxes
11,662
16,294
Net income
15,478
47,118
Net income attributable to noncontrolling interests
(24
)
(702
)
Net income attributable to Phoenix Education Partners, Inc.
$
15,454
$
46,416
Earnings per share: (1)
Basic
$
0.43
$
1.31
Diluted
$
0.40
$
1.23
Shares used in computing earnings per share:
Basic
35,650
35,505
Diluted
38,891
37,630
As described in the Company’s Annual Report on Form 10-K for fiscal year 2025, earnings per share for all periods presented in the Company’s financial statements are retrospectively presented such that weighted average shares outstanding reflects conversions resulting from the IPO.
PHOENIX EDUCATION PARTNERS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
As of
($ in thousands)
November 30, 2025
August 31, 2025
ASSETS
Current assets:
Cash and cash equivalents
$
151,285
$
136,504
Restricted cash and cash equivalents
39,739
36,497
Marketable securities
12,191
9,005
Accounts receivable, net
82,558
58,957
Prepaid income taxes
2,361
3,160
Other current assets
27,744
21,827
Total current assets
315,878
265,950
Marketable securities
14,891
12,803
Property and equipment, net
38,713
38,846
Goodwill
3,732
3,732
Intangible assets, net
86,634
87,294
Operating lease right-of-use assets, net
40,131
41,920
Deferred income taxes, net
22,284
20,566
Other assets
27,309
22,451
Total assets
$
549,572
$
493,562
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
24,332
$
25,696
Accrued compensation and benefits
18,371
28,534
Student deposits
7,624
11,049
Deferred revenue
61,120
37,210
Current operating lease liabilities
9,241
8,948
Other current liabilities
47,282
50,608
Total current liabilities
167,970
162,045
Long-term operating lease liabilities
61,604
64,352
Other long-term liabilities
36,841
27,110
Total liabilities
266,415
253,507
Commitments and contingencies
Equity:
General partner
—
—
Limited partners
—
246,735
Preferred Stock
—
—
Common Stock
357
—
Additional paid-in capital
264,516
—
Retained earnings
15,454
—
Accumulated other comprehensive income, net
81
39
Total Phoenix Education Partners, Inc. equity
280,408
246,774
Noncontrolling interests
2,749
(6,719
)
Total equity
283,157
240,055
Total liabilities and equity
$
549,572
$
493,562
PHOENIX EDUCATION PARTNERS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
November 30,
($ in thousands)
2025
2024
Operating activities:
Net income
$
15,478
$
47,118
Adjustments to reconcile net income to net cash provided by operating activities:
Share-based compensation
29,499
646
Depreciation and amortization
5,480
5,192
Non-cash lease expense
1,789
1,824
Impairment charges and asset disposal losses
20
34
Provision for credit losses on accounts receivable
9,579
11,281
Deferred income taxes
8,759
12,378
Changes in assets and liabilities, excluding the impact of acquisition:
Accounts receivable
(33,180
)
(40,846
)
Prepaid income taxes
799
(920
)
Other assets
(10,563
)
(4,144
)
Accounts payable
(1,364
)
(13,175
)
Accrued compensation and benefits
(10,163
)
(17,845
)
Student deposits
(3,425
)
(37,146
)
Deferred revenue
23,910
12,510
Operating lease liabilities
(2,455
)
(4,101
)
Other liabilities
(3,096
)
(6,809
)
Net cash provided by (used in) operating activities
31,067
(34,003
)
Investing activities:
Purchases of property and equipment
(4,716
)
(5,792
)
Purchases of marketable securities
(6,029
)
(9,075
)
Sales of marketable securities
—
8,475
Maturities of marketable securities
600
2,000
Acquisition, net of cash acquired
—
(1,982
)
Net cash used in investing activities
(10,145
)
(6,374
)
Financing activities:
Payments of dividend equivalents
(721
)
(141
)
Payroll taxes paid on share-based awards
(2,178
)
(764
)
Net cash used in financing activities
(2,899
)
(905
)
Net change in cash and restricted cash
18,023
(41,282
)
Cash and restricted cash, beginning of period
173,001
356,170
Cash and restricted cash, end of period
$
191,024
$
314,888
Supplemental disclosure information:
Income tax payments, net
$
2,104
$
4,868
Noncontrolling interest issued in business combination
$
—
$
4,147
PHOENIX EDUCATION PARTNERS, INC. AND SUBSIDIARIES
Reconciliation of GAAP Financial Information to Non-GAAP Financial Information
(Unaudited)
Three Months Ended
November 30,
($ in thousands, except per share data)
2025
2024
Net income attributable to Phoenix Education Partners, Inc.
$
15,454
$
46,416
Special items and share-based compensation:
Restructuring lease expense (a)
2,020
2,027
Strategic alternatives expense (b)
4,921
875
Cybersecurity incident expense (c)
4,500
—
Impairment charges and asset disposal losses (d)
20
34
Litigation charges and regulatory expense (e)
1,203
1,205
Non-cash share-based compensation expense (f)
29,499
646
Other (g)
1,964
1,195
Income tax effects of special items and share-based compensation (h)
(5,933
)
(1,468
)
Adjusted net income attributable to Phoenix Education Partners, Inc.
$
53,648
$
50,930
Earnings per share:
Basic
$
0.43
$
1.31
Diluted
$
0.40
$
1.23
Adjusted earnings per share:
Basic
$
1.50
$
1.43
Diluted
$
1.38
$
1.35
Shares used in computing earnings per share and adjusted earnings per share:
Basic
35,650
35,505
Diluted
38,891
37,630
Three Months Ended
November 30,
($ in thousands)
2025
2024
Net income attributable to Phoenix Education Partners, Inc.
$
15,454
$
46,416
Restructuring lease expense (a)
2,020
2,027
Strategic alternatives expense (b)
4,921
875
Cybersecurity incident expense (c)
4,500
—
Impairment charges and asset disposal losses (d)
20
34
Litigation charges and regulatory expense (e)
1,203
1,205
Non-cash share-based compensation expense (f)
29,499
646
Depreciation and amortization
5,480
5,192
Interest income, net of interest expense
(1,546
)
(3,744
)
Provision for income taxes
11,662
16,294
Other (g)
1,964
1,195
Adjusted EBITDA
$
75,177
$
70,140
Net income attributable to Phoenix Education Partners, Inc. margin
5.9
%
18.2
%
Adjusted EBITDA margin
28.7
%
27.5
%
Net revenue used in computing net income attributable to Phoenix Education Partners, Inc. margin and adjusted EBITDA margin
$
262,027
$
254,692
Restructuring lease expense represents non-cancelable lease obligations, including any offset from sublease income, and other related expenses for leased space we have exited as part of our ground campus and administrative space rationalization plans. In 2012, as a key component of the University’s transformation initiatives, the University began the process of completing the orderly closure of its ground campuses, as more enrolling students made the choice to take their programs online. The University completed the orderly closure of its campus locations in early fiscal year 2025, with only one physical location, in Phoenix, Arizona, currently enrolling new students. Additionally, the University completed its exit of 19 floors of its 22-floor administrative office buildings during fiscal year 2024 pursuant to its space rationalization plans.
Strategic alternatives expense consists of costs incurred for our IPO and costs incurred for pursuing strategic ownership alternatives considered prior to our IPO.
Represents expense associated with a cybersecurity incident we detected on November 21, 2025. Refer to the Company’s quarterly report on Form 10-Q for the first quarter of fiscal year 2026 for additional information.
Represents non-cash impairment charges and asset disposal losses.
Litigation charges and regulatory expense principally includes expenses associated with a multi-year insurance policy pertaining to borrower defense to repayment claims.
Represents non-cash equity-based compensation expense in accordance with Accounting Standards Codification Topic 718, Compensation: Stock Compensation. Although share-based compensation is a key incentive offered to our employees, we evaluate our business performance excluding share-based compensation expense because it is a non-cash expense. The increase in share-based compensation expense in the three months ended November 30, 2025 compared to the prior year period resulted from our IPO.
Other consists of management fees pursuant to our pre-IPO management consulting agreement and other expenses that we believe are not indicative of our ongoing operations. The management consulting agreement was terminated effective as of the pricing of our IPO and therefore no management fees will accrue or be payable for periods after that date.
Represents the income tax effect, if any, of these non-GAAP adjustments, calculated using the appropriate statutory tax rates.