Enrollment and Growth - Employer-affiliated enrollment is a key driver, now representing about 34% of total enrollment, up from roughly 31% in Q1 of fiscal 2025 [1] - Average total degree enrollment increased by 4.1% to 85,600 students, contributing to a net revenue rise of 2.9% year over year to $262 million [3][7] Financial Performance - Adjusted EBITDA increased by 7.2% to $75.2 million, with the adjusted EBITDA margin expanding to 28.7% from 27.5% a year earlier [2] - Net income attributable to the company was $15.5 million, or $0.40 per diluted share, compared to $46.4 million, or $1.23 per diluted share, in the previous year [8] Capital Position and Dividend - The company ended the quarter with no outstanding debt and $218.1 million in cash and marketable securities, announcing an inaugural quarterly cash dividend of about $0.21 per share [6][10] - Capital allocation priorities focus on reinvesting in the business to support student outcomes and operational efficiency while maintaining liquidity [11] Cybersecurity and Regulatory Environment - A cybersecurity incident related to Oracle E-Business Suite led to $4.5 million in Q1 incident-related costs, with further expenses possible but covered by insurance [5][16] - Management discussed recent developments in the regulatory environment, stating that no new material areas of risk were introduced and that all University of Phoenix programs for which metrics were provided were "passing" [12] AI Initiatives - The company is pursuing AI initiatives to prepare students to be AI-fluent and to drive operational excellence, including AI-assisted appointment setting and 24/7 AI chat assistance for students [15] Fiscal 2026 Outlook - Management reiterated guidance for fiscal 2026, expecting net revenue of $1.025 billion to $1.035 billion and adjusted EBITDA of $244 million to $249 million [5][17]
Phoenix Education Partners Q1 Earnings Call Highlights