Phoenix Education Partners reported first‑quarter fiscal 2026 revenue of $262.0 million, up 2.9% year‑over‑year from $254.7 million in Q1 2025. The figure fell short of the consensus estimate of $262.7 million, missing analysts’ expectations by roughly $0.7 million. GAAP net income attributable to the company was $15.5 million, or $0.40 diluted earnings per share, a sharp decline from $46.4 million ($1.23 EPS) in the same quarter last year. The drop is largely attributable to share‑based compensation related to the October 2025 IPO, a one‑time expense that does not recur in future periods. Adjusted EBITDA rose to $75.2 million, up $5.1 million from $70.1 million in Q1 2025, reflecting continued operational leverage and disciplined cost management. Adjusted diluted EPS reached $1.38, beating the consensus estimate of $1.27 by $0.11, a 8.7% beat that underscores the strength of the company’s core operations once the IPO‑related charges are excluded.
Average total degreed enrollment climbed to 85,600 students, a 4.1% increase from 82,200 in the prior year, and employer‑affiliated enrollment grew to 34% of total enrollment, up from 31% in Q1 2025. Management highlighted the role of AI‑driven outreach tools—such as an AI assistant for appointment setting—in boosting enrollment conversion and retention. The company also reported a $4.5 million expense related to a cybersecurity incident, a one‑time hit that was fully covered by insurance and does not impact future operating performance.
Phoenix Education Partners initiated a quarterly common‑stock cash dividend of $0.21 per share, payable on February 18 2026 to shareholders of record as of January 28 2026. This is the first dividend payment since the company’s IPO in October 2025, signaling management’s confidence in sustained cash‑flow generation and a shift toward returning value to shareholders while continuing to invest in AI and employer‑partner channels.
Full‑year fiscal 2026 guidance remains unchanged: revenue is projected between $1.025 billion and $1.035 billion, and adjusted EBITDA between $244 million and $249 million. The revenue range is slightly below the consensus estimate of approximately $1.049 billion, reflecting a cautious outlook amid modest revenue miss in Q1. The guidance indicates that management expects continued enrollment growth and margin expansion, but remains mindful of the one‑time IPO costs and the cybersecurity expense that impacted the quarter’s GAAP results.
After the release, the market reacted positively in after‑hours trading, with the stock rising 1.49% to $33.95, despite a 5.2% intraday decline. The primary drivers of the aftermarket lift were the adjusted EPS beat and the initiation of a dividend, both of which reassured investors about the company’s underlying profitability and cash‑flow prospects.
The GAAP net‑income decline is largely a bookkeeping artifact; the adjusted metrics demonstrate robust performance. Revenue growth of 2.9% and a 28.7% adjusted EBITDA margin—up from 27.5%—highlight operational efficiency and pricing power. The enrollment increase, coupled with a higher proportion of employer‑affiliated students, supports the company’s growth strategy. The AI initiatives and employer partnerships are expected to sustain enrollment momentum, while the one‑time cybersecurity expense and IPO share‑based compensation are isolated events that should not distort future earnings forecasts. Overall, Phoenix Education Partners’ results suggest a solid core business with a clear path to profitability and shareholder returns.
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