Phoenix Education Expects Revenue of Up to $1 Billion in 2027 Despite Enrollment Pressures
Key Facts
Phoenix Education Partners expects net revenue of $970 million to $1 billion in fiscal 2027 and adjusted EBITDA of $225 million to $240 million, management said on the earnings call. The outlook puts the company in a transition year as it absorbs the effects of search algorithm changes that weakened visibility and traffic and affected enrollment. The CEO said these changes, particularly their impact on the non-employer-affiliated student channel, are among the key reasons the company describes the coming year as transitional. The figures follow annual revenue of $1.017 billion in fiscal 2026, up 1.0% from the prior year. The revenue range for the coming year therefore sets a ceiling below actual fiscal 2026 revenue, while including a contribution from Fuel50 following its acquisition.
In the final quarter of fiscal 2026, net revenue rose 1.3% year over year to $260.7 million, according to the earnings call transcript. But modest revenue growth coincided with a 35.0% decline in annual net income to $88.1 million, from $133.9 million in fiscal 2025. The results show a mixed picture of revenue growth and continued pressure on profitability, as management set a fiscal 2027 adjusted EBITDA range of $225 million to $240 million. The annual revenue comparison is based on $1.017 billion in 2026, while the new outlook does not specify a comparable net income figure. Management said the impact of search on enrollment and investment in growth initiatives are factored into its outlook for the coming year.
Management said search algorithm changes reduced the company's visibility and traffic and affected enrollment, with the impact concentrated in the non-employer-affiliated student channel. By contrast, employer-affiliated enrollment grew about 13% in fiscal 2026 and accounted for nearly 35% of average total enrollment in degree-granting programs. Healthcare program enrollment also rose about 13% year over year, and the CEO said the conversion rate from prospective students to enrollees improved in every quarter of fiscal 2026. These indicators show that enrollment channels performed unevenly during the year, with growth in partnerships and healthcare programs alongside the pressure management described in the non-employer-affiliated student channel. Management expects enrollment trends to improve as fiscal 2027 progresses, despite the continuing impact of search disruption on revenue.
The acquisition of Fuel50 was completed on September 30, 2026, and the company said its results would be included in consolidated accounts from the acquisition date. The fiscal 2027 outlook includes 11 months of Fuel50 results, with an expected revenue contribution of about $10 million. The company does not expect Fuel50 to make a material contribution to adjusted EBITDA during the period. Revenue related to the acquisition therefore represents a limited portion of the expected revenue range, which reaches $1 billion, while adjusted profitability guidance remains set out separately. Management said it does not expect the acquisition to have a material impact on consolidated results in the near term.
On shareholder cash returns, the board approved an increase in the quarterly cash dividend to $0.23 per share from $0.21. The dividend is scheduled to be paid on November 27, 2026, to shareholders of record on November 13, 2026. The decision comes alongside the revenue and adjusted EBITDA outlook the company announced on November 3 and sets the next record and payment dates for shareholders. The company's stock closed at $23.39 in the November 3, 2026 session. The CEO said management believes improving enrollment trends as fiscal 2027 progresses will position the company to return to growth in fiscal 2028.