Phoenix Education Raises Enrollment 2.8% to 81,500 Students in Fiscal Fourth Quarter
Key Facts
Average total enrollment in degree-granting programs at Phoenix Education Partners rose 2.8% to 81,500 students in the fourth quarter of fiscal 2026, compared with 79,300 students in the year-earlier period, according to the earnings call transcript cited by Reuters via Investing.com. The company said strong student retention helped maintain modest growth in total enrollment and revenue despite pressure from the impact of artificial intelligence on online search. Enrollment growth indicates continued expansion of the student base, while management acknowledged that changing search behavior is weighing on recruitment. Employer-affiliated enrollment accounted for 36% of total enrollment during the quarter, up 270 basis points year over year. This share highlights the growing contribution of employer-affiliated programs to the company's student mix.
The company reported net income of 23.5 million dollars, or 0.60 dollars per diluted share, in the fourth quarter of fiscal 2026, compared with 17.5 million dollars and 0.46 dollars per share in the same period of the prior fiscal year. Adjusted EBITDA rose to 61.5 million dollars from 56.6 million dollars, while its margin improved to 23.6% from 22.0%. These comparisons indicate year-over-year growth in net income and adjusted operating earnings, alongside margin expansion. For the full fiscal year, revenue increased 1% to 1.017 billion dollars in fiscal 2026. The limited annual revenue growth puts the quarterly results in the context of a year that saw a modest increase in sales.
Management attributed part of the enrollment performance to strong student retention, which helped offset the impact of AI-related changes in search. The company said, "Continued strength in retention helped offset the impact of AI-related search on enrollment." The chief executive added, "Strong retention helped maintain modest growth in total enrollment and revenue despite pressure from the impact of artificial intelligence on search." Search is an important channel in explaining the recruitment pressures cited by management, while retention supported results. The company did not provide a numerical breakdown in the cited remarks of the impact attributed to changing search.
The company's fiscal 2027 outlook was a key focus for investors following the results, with revenue projected at 970 million dollars to 1 billion dollars and adjusted EBITDA at 225 million dollars to 240 million dollars. The interim chief financial officer described the year as "an important transitional year" as the company adapts to changes in online search and accelerates strategic growth investments. He said the revenue outlook primarily reflects the impact of AI-related search on enrollment beginning in the second quarter, assuming search conditions remain similar to those the company experienced in the fourth quarter. Management thus ties its outlook for next year to the continued impact on student recruitment, alongside its adaptation to changes and investment in growth. The outlook included 11 months of Fuel50 results, which are expected to add about 10 million dollars to revenue, with no material contribution to adjusted EBITDA expected.
The company announced a 10% increase in its quarterly cash dividend to 0.23 dollars per share, according to Reuters via Investing.com. The stock's recorded move on November 3, the day the results were published, was a 2.17% decline in the regular session to 23.39 dollars, followed by a further 8.12% drop in after-hours trading to 21.49 dollars. These prices describe the regular-session and after-hours trading performance on the results announcement date. The stock had closed at 23.91 dollars on November 2, according to EL7 data, the session before the announcement; that value therefore does not represent the market's reaction to the results. These developments bring together the dividend increase, next year's outlook range and the stock's recorded move following the announcement.