UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2026
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________
Commission File Number: 001-42899
Phoenix Education Partners, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
38-3922540
( State or other jurisdiction of
incorporation or organization)
(I.R.S. EmployerIdentification No.)
4035 S. Riverpoint Parkway
Phoenix, AZ
85040
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (800) 990-2765
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.01 per share
PXED
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of March 31, 2026, the registrant had 35,810,977 shares of common stock, $0.01 par value per share, outstanding.
Table of Contents
Page
OVERVIEW
ii
PART I.
FINANCIAL INFORMATION
1
Item 1.
Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Income
2
Condensed Consolidated Statements of Comprehensive Income
3
Condensed Consolidated Statements of Equity
4
Condensed Consolidated Statements of Cash Flows
6
Notes to Unaudited Condensed Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
21
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
31
Item 4.
Controls and Procedures
PART II.
OTHER INFORMATION
32
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
33
Signatures
34
i
In this Quarterly Report on Form 10-Q for the period ended February 28, 2026 (this “Quarterly Report on Form 10-Q”), unless otherwise indicated or the context otherwise requires, references to the “Company,” the “Issuer,” “we,” “us” and “our” refer, prior to our conversion into a corporation, to AP VIII Queso Holdings, L.P. and its consolidated subsidiaries and, after our conversion into a corporation, to Phoenix Education Partners, Inc. and its consolidated subsidiaries. References to the “University” refer to The University of Phoenix, Inc., our indirect wholly-owned subsidiary. Apollo Education Group, Inc., our direct wholly-owned subsidiary and the direct parent of the University, has been renamed Phoenix Education Operating Corp (“PEOC”).
Our fiscal year ends on August 31 of each year and our four fiscal quarters comprising our fiscal year, end on the last day of November, February, May and August, respectively. The term “fiscal,” with respect to any year, refers to the period ending on August 31 of such year. All condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q have been prepared in U.S. dollars in accordance with generally accepted accounting principles in the United States of America.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
PHOENIX EDUCATION PARTNERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
As of
(In thousands, except par value)
February 28, 2026
August 31, 2025
ASSETS
Current assets:
Cash and cash equivalents
$
194,597
136,504
Restricted cash and cash equivalents
36,752
36,497
Marketable securities
6,770
9,005
Accounts receivable, net
35,015
58,957
Prepaid income taxes
14,956
3,160
Other current assets
29,362
21,827
Total current assets
317,452
265,950
13,951
12,803
Property and equipment, net
38,510
38,846
Goodwill
3,732
Intangible assets, net
86,019
87,294
Operating lease right-of-use assets, net
38,335
41,920
Deferred income taxes, net
23,413
20,566
Other assets
24,982
22,451
Total assets
546,394
493,562
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
30,521
25,696
Accrued compensation and benefits
28,033
28,534
Student deposits
9,928
11,049
Deferred revenue
38,120
37,210
Current operating lease liabilities
9,541
8,948
Other current liabilities
41,591
50,608
Total current liabilities
157,734
162,045
Long-term operating lease liabilities
58,798
64,352
Other long-term liabilities
36,298
27,110
Total liabilities
252,830
253,507
Commitments and contingencies (Note 13 and Note 14)
Equity:(1)
General partner
—
Limited partners (35,596 shares outstanding as of August 31, 2025)
246,735
Preferred Stock ($0.01 par value; 5,000 shares authorized, no shares issued and outstanding)
Common Stock ($0.01 par value; 1,495,000 shares authorized, 35,811 shares issued and outstanding as of February 28, 2026)
358
Additional paid-in capital
272,814
Retained earnings
17,889
Accumulated other comprehensive income, net
65
39
Total Phoenix Education Partners, Inc. equity
291,126
246,774
Noncontrolling interests
2,438
(6,719
)
Total equity
293,564
240,055
Total liabilities and equity
The accompanying Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of this statement.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended February 28,
Six Months Ended February 28,
(In thousands, except per share data)
2026
2025
Net revenue
222,461
223,406
484,488
478,098
Costs and expenses:
Instructional and support
105,242
107,210
220,490
215,333
General and administrative
98,105
90,428
204,662
172,383
Strategic alternatives, restructuring and other
5,108
6,103
19,736
Total costs and expenses
208,455
203,741
444,888
398,765
Operating income
14,006
19,665
39,600
79,333
Interest income
1,776
2,198
3,537
6,056
Interest expense
(550
(111
(765
(225
Income before income taxes
15,232
21,752
42,372
85,164
Provision for income taxes
4,763
5,648
16,425
21,942
Net income
10,469
16,104
25,947
63,222
Net loss (income) attributable to noncontrolling interests
311
287
(681
Net income attributable to Phoenix Education Partners, Inc.
10,780
16,125
26,234
62,541
Earnings per share:(1)
Basic
0.30
0.45
0.73
1.76
Diluted
0.28
0.43
0.68
1.66
Shares used in computing earnings per share:
35,778
35,560
35,714
35,532
38,888
37,898
38,744
37,764
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in thousands)
Other comprehensive income (loss) (net of tax)(1):
Change in fair value of available-for-sale securities
(16
(15
26
(58
Comprehensive income
10,453
16,089
25,973
63,164
Comprehensive loss (income) attributable to noncontrolling interests
Comprehensive income attributable to Phoenix Education Partners, Inc.
10,764
16,110
26,260
62,483
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
Common Stock(1) (Shares)
GeneralPartner
Limited Partners
Common Stock (Amount)
Additional Paid-inCapital
RetainedEarnings
Accumulated Other ComprehensiveIncome, net
Total Phoenix Education Partners, Inc.Equity
NoncontrollingInterests
TotalEquity
Balance as of November 30, 2025
35,725
357
264,516
15,454
81
280,408
2,749
283,157
Change in fair value of available-for-sale securities, net of tax
Share-based compensation
9,667
Shares issued under share-based compensation plans
129
(1
Tax withholdings for share-based award settlements
(43
(1,368
Common stock dividend ($0.21 per share) and dividend equivalents
(8,345
Net income (loss)
(311
Balance as of February 28, 2026
35,811
Balance as of November 30, 2024
373,675
373,677
26,665
400,342
617
(10
Dividends and dividend equivalents to noncontrolling interests
(13,820
Capital distributions to limited partners ($3.85 per share)
(134,001
(21
Balance as of February 28, 2025
255,799
(13
255,786
13,431
269,217
Balance as of August 31, 2025
35,596
Corporate conversion
(246,735
356
236,935
(9,444
9,444
39,166
319
(3
(104
(3,284
(3,285
(287
Balance as of August 31, 2024
35,501
327,259
45
327,304
21,626
348,930
Noncontrolling interest issued in business combination
4,147
77
1,263
(18
(325
(13,961
681
5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
11,205
10,814
Non-cash lease expense
3,585
3,594
Impairment charges and asset disposal losses
520
84
Provision for credit losses on accounts receivable
16,075
23,354
Deferred income taxes
7,811
12,840
Changes in assets and liabilities, excluding the impact of acquisition:
Accounts receivable
7,867
(12,954
(11,796
(4,403
(10,083
(629
4,825
(7,683
(501
(6,059
(1,121
(52,893
910
2,996
Operating lease liabilities
(4,961
(6,154
Other liabilities
(9,495
(5,243
Net cash provided by operating activities
79,954
22,149
Investing activities:
Purchases of property and equipment
(10,085
(10,892
Purchases of marketable securities
(10,066
(11,082
Sales of marketable securities
8,475
Maturities of marketable securities
11,204
2,650
Acquisition, net of cash acquired
(1,982
Other investing activities
(46
(35
Net cash used in investing activities
(8,993
(12,866
Financing activities:
Payments of dividend and dividend equivalents
(9,066
Payroll taxes paid on share-based awards
(3,547
(774
Payments of dividend and dividend equivalents to noncontrolling interests
Capital distributions to limited partners
Net cash used in financing activities
(12,613
(148,736
Net change in cash and restricted cash
58,348
(139,453
Cash and restricted cash, beginning of period
173,001
356,170
Cash and restricted cash, end of period
231,349
216,717
Supplemental disclosure information:
Income tax payments, net
20,410
10,812
Note 1. Nature of Operations and Significant Accounting Policies
Description of Business
Prior to completing our initial public offering (“IPO”) on October 10, 2025, AP VIII Queso Holdings, L.P. (“Queso”, and together with its subsidiaries, the “Company”, “we”, “us”, or “our”) was a limited partnership that was formed in accordance with the laws of Delaware on January 9, 2014. Queso made an election to be classified as a corporation for federal income tax purposes and its fiscal year was from September 1 to August 31. Prior to the IPO, Queso converted into a Delaware corporation pursuant to a statutory conversion and changed its name to Phoenix Education Partners, Inc. (“Phoenix Education Partners”). In connection with our conversion into a corporation, all of the 1,028,000 outstanding limited partnership units of Queso were converted on a 1-for-33.858 basis into an aggregate of 34,805,541 shares of our common stock. Following our conversion into a corporation, Phoenix Education Partners holds all of the property and assets and assumed all of the debts and obligations of Queso.
Initial Public Offering
At our IPO closing, certain of our existing shareholders sold 4,250,000 shares at the IPO price of $32.00 per share. The existing shareholders sold an additional 637,500 shares on October 15, 2025 at the IPO price. The selling shareholders received all of the proceeds from these sales. Accordingly, we did not receive any proceeds from the sale of shares associated with the offering. We expensed all offering costs, primarily consisting of legal, accounting, printing and filing services, and other third-party fees related to the IPO, as incurred because we did not receive any proceeds from the offering. We did not incur any offering costs in the three months ended February 28, 2026 and incurred approximately $5 million of offering costs in the six months ended February 28, 2026. During the three and six months ended February 28, 2025, we incurred approximately $4 million of offering costs. This expense is included in strategic alternatives, restructuring and other on our condensed consolidated statements of income.
Prior to the IPO, we owned approximately 98% of the outstanding shares of the University’s common stock. In connection with the IPO, all of the outstanding shares of the University’s common stock owned by persons other than the Company were converted into shares of our common stock at a ratio equal to one share of the Company’s common stock for each share of the University’s common stock. As a result, we issued 790,714 shares of the Company’s common stock upon the conversion of 790,714 outstanding shares of the University’s common stock. Following the closing of the IPO, the University is a wholly-owned subsidiary of the Company.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by Phoenix Education Partners on a consistent basis with the audited consolidated financial statements for the year ended August 31, 2025, and contain all adjustments, including normal recurring adjustments, necessary to fairly state the information set forth herein. These unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), and, therefore, omit certain information and footnote disclosures necessary to present the unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8 of our 2025 Annual Report on Form 10-K for the year ended August 31, 2025, as filed with the SEC on November 20, 2025. The results of operations for the three and six months ended February 28, 2026 are not necessarily indicative of the results that may be expected for the year ending August 31, 2026 or any other future period, and we make no representations related thereto.
In accordance with Accounting Standards Codification Topic 260, Earnings Per Share, we have applied retrospective presentation to our earnings per share for all periods presented in our financial statements to reflect the shares of common stock resulting from our IPO. Refer to Note 11. Earnings Per Share for additional information.
Beginning in the first quarter of fiscal year 2026 and after the IPO, we began separately presenting tax withholding for share‑based award settlements and dividend and dividend equivalents to noncontrolling interests on our condensed consolidated statements of equity and condensed consolidated statements of cash flows. We have reclassified prior periods to conform to our current period presentation.
Estimates, Assumptions and Judgments
The preparation of these unaudited condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates, assumptions and judgments that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during applicable reporting periods. Although we believe our estimates, assumptions and judgments are reasonable, actual results may differ from our estimates under different assumptions, judgments or conditions.
Principles of Consolidation
These unaudited condensed consolidated financial statements include the assets, liabilities, revenues and expenses of Phoenix Education Partners, our wholly-owned subsidiaries and other subsidiaries that we control, substantially all of which represents the University. We eliminate intercompany transactions and balances in consolidation.
We record noncontrolling interests to recognize the noncontrolling ownership interests in our consolidated subsidiaries. We allocate a portion of the net income (loss) of such subsidiaries to our noncontrolling interests generally based on the respective noncontrolling shareholder’s ownership interest in the consolidated subsidiary.
Seasonality
The University’s non-term academic model encompasses a series of courses taken consecutively over the length of the program, which we would expect to limit seasonal enrollment fluctuations. However, we have historically experienced, and expect to continue to experience, lower net revenue in our second fiscal quarter (December through February) compared to other quarters due to the University’s holiday breaks when no related net revenue is recognized. While our operating costs generally do not fluctuate significantly on a quarterly basis, we have historically experienced, and expect to continue to experience, increased marketing expense in our second and fourth fiscal quarters due to course starts that occur during traditional back-to-school seasons.
Revenue Recognition
We recognize revenue in a manner to depict the transfer of goods or services to our customers at an amount that reflects the consideration we expect to receive in exchange for our goods or services. The University generates all of our consolidated net revenue, and substantially all of the University’s net revenue is generated from tuition-bearing degree programs. The University’s students generally fund their education through loans and/or grants from U.S. federal financial aid programs established by Title IV of the Higher Education Act and regulations promulgated thereunder (“Title IV”), military benefit programs, tuition assistance from their employers, or personal funds.
As of February 28, 2026 and August 31, 2025, we had $13.4 million and $13.1 million, respectively, of contract liabilities for discount programs that represent material rights to students which are included in other current liabilities on our condensed consolidated balance sheets. Additionally, we had contract liabilities consisting of deferred revenue and student deposits as reflected on our condensed consolidated balance sheets. The substantial majority of our contract liabilities as of a respective period end will be recognized in net revenue during the following sequential quarter due to course start timing and course duration.
Related Party Transactions
Prior to our IPO, we paid affiliates of Apollo Global Management, Inc. (“Apollo”) and The Vistria Group, LP (“Vistria”) for management consulting and advisory professional services. Apollo and Vistria are affiliated with entities that have ownership interests in Phoenix Education Partners. Our management consulting agreements with Apollo and Vistria were terminated effective as of the pricing of our IPO and amounts we paid for such services during the six months ended February 28, 2026 were immaterial.
We remain a “controlled company” of Apollo subsequent to the IPO and we have related party transactions with certain Apollo-affiliated portfolio companies. During the three months ended February 28, 2026 and 2025, we paid Rackspace Technology, Inc. $1.5 million and $1.1 million, respectively, and $3.3 million and $2.1 million during the six months ended February 28, 2026 and 2025, respectively, for technology services.
8
New Accounting Standards
Income Taxes - Income Tax Disclosures
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which modifies and enhances certain required income tax disclosures. ASU 2023-09 was effective for our fiscal year that began on September 1, 2025. ASU 2023-09 will not impact our consolidated balance sheets, consolidated statements of income or consolidated statements of cash flows, but will impact our financial statement disclosures in our 2026 Annual Report on Form 10-K.
Financial Instruments - Credit Losses
In July 2025, the FASB issued ASU 2025‑05, Financial Instruments—Credit Losses (Topic 326‑20): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of current accounts receivable and current contract assets. ASU 2025-05 will be effective for our fiscal year beginning on September 1, 2026 and we are currently evaluating the impact it may have on our consolidated financial statements.
Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure of certain amounts included in the expense captions presented on the statement of operations, as well as disclosures about selling expenses. ASU 2024-03 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, and will be effective for our fiscal year beginning on September 1, 2027. We are currently evaluating the impact it may have on our financial statement disclosures.
Intangibles - Goodwill and Other - Internal-Use Software
In September 2025, the FASB issued ASU 2025‑06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which is intended to improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. ASU 2025-06 will be effective for our fiscal year beginning on September 1, 2028 and we are currently evaluating the impact it may have on our consolidated financial statements.
Interim Reporting
In December 2025, the FASB issued ASU 2025‑11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which is intended to clarify the applicability of interim reporting guidance, the types of interim reporting and the form and content of interim GAAP financial statements. ASU 2025-11 will be effective for our fiscal year beginning on September 1, 2028 and we are currently evaluating the impact it may have on our interim condensed consolidated financial statements.
Note 2. Strategic Alternatives, Restructuring and Other
Strategic alternatives, restructuring and other includes the following during the respective periods:
Strategic alternatives
4,124
5,277
4,999
Cybersecurity incident
329
4,829
Lease restructuring expense (credit), net
1,585
3,605
1,716
Other
2,838
2,290
6,025
4,334
Strategic alternatives represents costs incurred for our IPO and for pursuing other strategic alternatives (see Note 1. Nature of Operations and Significant Accounting Policies). See Note 13. Commitments and Contingencies for information on the cybersecurity incident. During the three months ended February 28, 2025, we recognized a net credit in lease restructuring resulting from a reduction
9
in our estimated future cash flows associated with our exited space (See Note 8. Other Liabilities for information on the University’s restructuring activities).
Note 3. Acquisition
As of August 31, 2024, Talent Mobility, LLC, a wholly-owned subsidiary of Phoenix Education Operating Corp. (“PEOC”), had a minority ownership interest in Empath, Inc. (“Empath”). Empath provides clients with a company-wide skills inventory for its employees through machine learning-based skills inference. In the first quarter of fiscal year 2025, PEOC acquired a controlling interest in Empath pursuant to an Agreement and Plan of Merger, by merging Talent Mobility, LLC with Empath, with Empath surviving as a subsidiary of PEOC. Empath was subsequently renamed “Talent Mobility, Inc.” PEOC paid approximately $2 million, net of cash acquired, to facilitate this merger and did not incur material transaction costs.
We accounted for this merger as a business combination and allocated the purchase price to the assets acquired and liabilities assumed at fair value as summarized below:
Cash
2,418
Finite-lived intangibles - Technology (3 year useful life)
7,254
(1,706
(99
Total assets acquired and liabilities assumed, net
11,599
Less: Fair value of noncontrolling interests
(4,147
Total fair value of consideration transferred
7,452
Less: Cash acquired
(2,418
Less: Fair value of equity method investment
(2,452
Less: Note forgiven
(600
Cash paid for acquisition, net of cash acquired
1,982
We determined fair value using the following assumptions, the majority of which include significant unobservable inputs (Level 3), that we believe reasonable market participants would use while employing the concept of highest and best use of the respective items:
The goodwill resulting from the merger is principally attributable to the future earnings potential associated with customer enrollment growth and other intangibles that do not qualify for separate recognition, such as the assembled workforce. The operating results of Empath are included in our consolidated financial statements from the date of acquisition and its results are not material to our consolidated results of operations. Pro forma financial information is not presented as Empath’s results were not material to our condensed consolidated statements of income.
Note 4. Financial Instruments
Cash and cash equivalents and Restricted cash and cash equivalents
We consider all highly liquid investments with original maturities to us of three months or less from the date we purchase the investment to be cash equivalents.
10
Restricted cash and cash equivalents are presented separately from cash and cash equivalents on our condensed consolidated balance sheets. The following provides a reconciliation of cash and restricted cash as presented on our condensed consolidated statements of cash flows as of the respective periods:
February 28,
166,370
50,347
Total cash and restricted cash
Fair value measurements
The following summarizes our cash and cash equivalents, restricted cash and cash equivalents and marketable securities by financial instrument category as of the respective periods:
AmortizedCost
UnrealizedGains
UnrealizedLosses
Fair Value
Cash and CashEquivalents(1)
CurrentMarketableSecurities
NoncurrentMarketableSecurities
114,878
Level 1:
Money market funds
116,471
Level 2:
Corporate bonds
20,635
105
(19
20,721
Total
251,984
252,070
129,113
39,574
26,070
71
26,122
4,314
194,757
194,809
We measure our financial instruments at fair value on a recurring basis as follows:
Our marketable securities have maturities that occur within three years. We may sell certain of our marketable securities prior to their stated maturities for strategic reasons including, but not limited to, investment yield and credit risk management. We have not recognized significant gains or losses related to such sales. Additionally, all of our securities are investment grade and are classified as available for sale. We have no related allowance for credit losses as of February 28, 2026.
11
Note 5. Accounts Receivable, Net
Accounts receivable, net consists of the following as of the respective periods:
February 28,2026
August 31,2025
Student accounts receivable
73,337
91,127
Allowance for credit losses
(40,420
(42,000
Net student accounts receivable
32,917
49,127
Other receivables
2,098
9,830
The following summarizes the activity in allowance for credit losses during the respective periods:
Three months ended February 28,
Beginning allowance for credit losses
43,102
42,354
42,000
49,200
6,496
12,073
Write-offs, net of recoveries
(9,178
(10,681
(17,655
(28,808
Ending allowance for credit losses
40,420
43,746
Note 6. Goodwill and Intangibles
Goodwill represents the excess of the purchase price of an acquired business over the amount assigned to the net identifiable assets acquired and liabilities assumed. See Note 3. Acquisition for goodwill acquired in the first quarter of fiscal year 2025.
Intangible assets consist of the following as of the respective periods:
Gross Carrying Amount
Accumulated Amortization
Net Carrying Amount
Curriculum
706
(414
292
659
(301
Technology
(3,627
3,627
4,836
Total finite-lived intangible assets
7,960
(4,041
3,919
7,913
(2,719
5,194
Trademark
20,600
Accreditation
61,500
Total indefinite-lived intangible assets
82,100
Total intangible assets, net
90,060
90,013
Our finite-lived intangible assets are amortized on a straight-line basis. Amortization expense was $0.7 million in both the three months ended February 28, 2026 and 2025 and $1.3 million and $1.4 million in the six months ended February 28, 2026 and 2025, respectively.
The weighted average remaining useful life of our finite-lived intangible assets as of February 28, 2026 was approximately 1.5 years. The estimated future amortization expense of our finite-lived intangible assets as of February 28, 2026 is as follows:
Remainder of 2026
2027
2028
2029
Estimated future amortization expense
1,306
2,558
53
12
Note 7. Leases
Lease expense is included in instructional and support, general and administrative and strategic alternatives, restructuring and other on our condensed consolidated statements of income. The components of our operating lease costs were as follows during the respective periods:
Operating lease cost
3,243
3,366
6,531
6,884
Variable lease cost
666
1,000
1,563
1,419
Less: Sublease income(1)
(2,085
(1,460
(3,649
(2,934
Total lease cost, net
1,824
2,906
4,445
5,369
Future payments related to our operating lease liabilities were as follows for periods subsequent to February 28, 2026:
6,720
16,265
16,590
16,922
2030
17,260
2031
10,185
Total operating lease payments
83,942
Less: liability accretion
(15,603
Present value of operating lease liabilities
68,339
Less: current operating lease liabilities
(9,541
The following provides supplemental information related to leases during the respective periods:
Cash paid for amounts included in the measurement of operating lease liabilities(1)
7.9 million
9.4 million
Operating lease ROU assets obtained in exchange for lease liabilities
None
Note 8. Other Liabilities
Other current liabilities consist of the following as of the respective periods:
Accrued advertising
10,744
14,740
Contract liabilities for discount programs
13,409
13,079
Restructuring obligations(1)
3,092
2,991
14,346
19,798
Total other current liabilities
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Other long-term liabilities consist of the following as of the respective periods:
11,345
12,909
Uncertain tax position(2)
22,661
11,994
2,292
2,207
Total other long-term liabilities
Note 9. Revolving Credit Facility
On November 13, 2025, we entered into a senior secured revolving credit facility in an aggregate principal amount of $100 million (the “Revolving Facility”). The Revolving Facility is available for general corporate purposes, including letters of credit, for the Company and its subsidiaries. The Revolving Facility matures on November 13, 2030. Borrowings under the Revolving Facility bear interest at a rate equal to, at our option, either (a) a term Secured Overnight Financing Rate (“SOFR”) (subject to a floor of zero), plus an applicable margin of 2.50% per annum or (b) a base rate (subject to a floor of 1.00%) determined by reference to the highest of (i) the greater of the federal funds effective rate and the overnight bank funding rate, in each case plus 0.50% per annum, (ii) the rate of interest per annum determined by the administrative agent under the Revolving Facility as its prime commercial lending rate for loans denominated in U.S. dollars and (iii) the one-month term SOFR plus 1.00% per annum, plus an applicable margin of 1.50% per annum. The Revolving Facility also has a commitment fee equal to 0.375% per annum of the unutilized commitments.
In addition, the Revolving Facility requires us to comply on a quarterly basis with a maximum leverage ratio if borrowings under the Revolving Facility on such date exceed 35% of the then outstanding commitments under the Revolving Facility.
As of February 28, 2026, we had no outstanding borrowings under the Revolving Facility and were in compliance with the terms and conditions of the Revolving Facility.
Note 10. Income Taxes
We are subject to income taxes in the United States and various state jurisdictions. We compute our interim income tax provision by applying our estimated effective tax rate expected to be applicable for the fiscal year, adjusted for discrete items, if applicable, to our income before income taxes for the period. Our effective tax rate is dependent upon several factors, such as tax rates in state jurisdictions and the relative amount of income we earn in such jurisdictions. We exercise significant judgment in determining our income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain.
Our income tax expense for the three and six months ended February 28, 2026 was $4.8 million and $16.4 million, or 31.3% and 38.8% of income before income taxes for the respective periods. The effective tax rates differed from the federal statutory rate of 21% primarily due to state income taxes and certain non-deductible executive compensation and transaction costs related to the IPO.
Our income tax expense for the three and six months ended February 28, 2025 was $5.6 million and $21.9 million, or 26.0% and 25.8% of income before income taxes for the respective periods. The effective tax rates differed from the federal statutory rate of 21% primarily due to state income taxes.
Income Tax Audits
Our U.S. federal income tax return for fiscal year 2023 is currently under review by the Internal Revenue Service and our U.S. federal income tax returns for fiscal years 2022 and 2024 are currently open for review. Additionally, tax years as early as fiscal year 2020 remain subject to examination by state or local tax authorities.
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Note 11. Earnings Per Share
In connection with our IPO, Queso converted into a Delaware corporation and all of its 1,028,000 outstanding limited partnership units were converted on a 1-for-33.858 basis into an aggregate of 34,805,541 shares of our common stock. Additionally, all of the outstanding shares of the University’s common stock owned by persons other than the Company were converted into shares of the Company’s common stock at a ratio equal to one share of the Company’s common stock for each share of the University’s common stock. As a result, we issued 790,714 shares of the Company’s common stock upon the conversion of 790,714 outstanding shares of the University’s common stock, and the University is now a wholly-owned subsidiary of the Company. Further, we will issue shares of the Company’s common stock on a 1-for-1 basis upon the vesting and/or future exercise of the University’s outstanding share-based awards. We have applied retrospective presentation to our earnings per share for all periods presented in our financial statements such that weighted average shares outstanding reflects these conversions resulting from the IPO.
We calculate earnings per share by dividing net income attributable to Phoenix Education Partners, Inc. by the weighted average shares outstanding. For diluted weighted average shares outstanding, we calculate the dilutive effect of share-based awards by applying the treasury stock method.
The components of basic and diluted earnings per share consist of the following for the respective periods:
Numerator:
Net income attributable to Phoenix Education Partners, Inc. (basic and diluted)
Denominator:
Basic weighted average shares outstanding
Dilutive effect of stock options(1)
3,003
2,285
2,912
2,188
Dilutive effect of restricted stock units(1)
107
118
44
Diluted weighted average shares outstanding
Basic income per share attributable to Phoenix Education Partners, Inc.
Diluted income per share attributable to Phoenix Education Partners, Inc.
Note 12. Share-Based Awards
Share-Based Awards – The University of Phoenix, Inc. Management Equity Plan
Prior to the IPO, we had outstanding stock option and restricted stock unit equity awards that were issued under the University of Phoenix, Inc. Management Equity Plan. Upon the future vesting of the University’s outstanding restricted stock units, we will issue shares of the Company’s common stock on a 1-for-1 basis. Upon the future exercise of the University’s outstanding stock options, we will have the right to either issue shares of the Company’s common stock in exchange for the shares of the University’s common stock received upon exercise on a 1-for-1 basis or purchase the shares of the University’s common stock received upon exercise for cash.
In connection with the IPO, we modified approximately 1.7 million outstanding stock options that previously vested solely upon a change in control or ownership, which resulted in 0.9 million of such stock options vesting at the IPO and the remaining 0.8 million vesting on the first anniversary of the IPO. The weighted average fair value of these stock options at the modification date was $21.69, and we recognized $27.4 million of share-based compensation expense in the six months ended February 28, 2026, as a result. As of February 28, 2026, we had $9.9 million of unrecognized share-based compensation expense for these stock options that we expect to recognize over a period of less than one year.
For the above modification, we used the Black-Scholes model to estimate the fair value of the stock options using the following weighted average inputs:
15
We did not grant any share-based awards under the University of Phoenix, Inc. Management Equity Plan during the six months ended February 28, 2026 and do not expect to grant any new awards in the future under such plan. The following provides a summary of the University’s stock option activity:
Options Outstanding
Number of Shares(in thousands)
WeightedAverage ExercisePrice per Share
WeightedAverageRemainingContractualTerm (Years)
AggregateIntrinsic Value(in thousands)
Balance at August 31, 2025
4,930
8.61
Granted
N/A
Exercised(1)
(227
7.53
5,283
Forfeited, canceled or expired
(6
10.61
Balance at February 28, 2026
4,697
8.66
98,355
Vested and expected to vest as of February 28, 2026
Exercisable as of February 28, 2026
3,925
8.27
83,711
In addition to the expense associated with the stock options described above, we have $0.4 million of unrecognized share-based compensation expense related to the University’s restricted stock units that we expect to recognize over a period of less than one year.
Share-Based Awards – Phoenix Education Partners Omnibus Incentive Plan
In connection with our IPO, our new Omnibus Incentive Plan became effective with an initial reserve of approximately 4.1 million shares of our common stock for issuance of awards thereunder. During the three months ended February 28, 2026, we registered an approximately 1.8 million additional shares of our common stock for issuance under the Omnibus Incentive Plan.
Restricted stock units granted pursuant to the Omnibus Incentive Plan generally vest over three years and contain service conditions exclusively or service and performance conditions.
In connection with our IPO, we granted the following share-based awards:
We also granted an immaterial amount of restricted stock units after the IPO in the three months ended February 28, 2026 that will vest one year from the grant date.
As of February 28, 2026, we expect to recognize approximately $36.9 million and $14.0 million of unrecognized share-based compensation expense related to unvested stock units and unvested performance share units, respectively, over a weighted average period of approximately 2.6 years.
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Phoenix Education Partners Employee Stock Purchase Plan
In connection with the IPO, we adopted an Employee Stock Purchase Plan (“ESPP”) pursuant to which all eligible employees of the Company are able to purchase shares of our common stock at a favorable price and upon favorable terms on specified dates. As of February 28, 2026, we have reserved an aggregate of 1.2 million shares of our common stock for issuance thereunder. The Company has not determined a date for the first offering period; therefore, no shares have been issued under the ESPP.
Share-Based Compensation
The following details total share-based compensation during the respective periods:
2,492
211
9,253
433
7,175
406
29,913
830
Note 13. Commitments and Contingencies
Guarantees
We have indemnified officers and directors and certain affiliates from losses and other amounts arising from certain events or occurrences. The maximum potential amount of future payments we could be required to make under these indemnification agreements is unlimited; however, we have liability insurance that mitigates our exposure and enables us to recover a portion of any future amounts paid. The fair value of these indemnification agreements, if any, cannot be estimated.
Sponsorship Rights Agreement
In August 2018, PEOC entered into an agreement for sponsorship rights on a stadium in Glendale, Arizona, which is the home of the Arizona Cardinals football team in the National Football League. The agreement term is in effect until 2030 with options to extend. Pursuant to the agreement, PEOC was required to pay $1.5 million for the initial contract year, which was set to increase 3% per year until 2030. In December 2025, PEOC amended the Sponsorship Rights Agreement to, among other things, lower the annual increase from 3% to 1.5% for the remaining contract term. As of February 28, 2026, our remaining contractual obligation pursuant to the agreement, as amended, was approximately $9 million.
Letters of Credit
We had a $32 million outstanding cash collateralized letter of credit as of February 28, 2026, which supports a sublease for a facility we have exited.
Subsequent to February 28, 2026, we replaced our existing cash collateralized letter of credit with a new letter of credit, on substantially the same terms, through our Revolving Facility. As a result, we expect corresponding reductions in restricted cash and available capacity under our Revolving Facility.
Surety Bonds
Our insurers issue surety bonds that are required by various states where we operate, or that are required for other purposes. We are obligated to reimburse our insurers for any surety bonds that are paid. As of February 28, 2026, the face amount of these surety bonds was less than $1 million.
Litigation and Other Matters
We are subject to various claims and contingencies that arise from time to time in the ordinary course of business, including those related to regulation, litigation, business transactions, employee-related matters and taxes, among others. We do not believe any of these are material for separate disclosure and we do not believe any of these, individually or in the aggregate, will have a material effect on our consolidated financial position, results of operations or cash flows.
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The following is a description of pending litigation, settlements, and other proceedings that fall outside the scope of ordinary and routine litigation incidental to our business.
Cybersecurity Incident
We experienced a cybersecurity incident involving the Oracle E-Business Suite software platform (“Oracle EBS”). We are one of a number of organizations, including other academic institutions, from which an unauthorized third-party exfiltrated data by exploiting a previously unknown software vulnerability in Oracle EBS. The incident has not impacted our business operations or student programming.
Upon detecting the incident on November 21, 2025, we promptly took steps to investigate and respond with the assistance of leading third-party cybersecurity firms. While the investigation remains ongoing, we believe that the software vulnerability was used in August 2025 to copy certain data maintained in our Oracle EBS environment. We promptly installed Oracle EBS software patches to remediate the vulnerability following their release in October 2025. We believe that certain personal information, including names and contact information, dates of birth, social security numbers, and bank account and routing numbers, with respect to numerous individuals was accessed without authorization. To our knowledge, the unauthorized third-party has not publicly disseminated the data. We are continuing to review the impacted data and are providing the required notifications to affected parties and applicable regulatory entities and also implemented measures to enhance security and reduce the risk of a similar incident occurring in the future.
In connection with this cybersecurity incident, we are currently aware of the filing of a number of putative class action lawsuits in which the University is either a single defendant or co-defendant with Oracle, or co-defendant with Oracle and other companies. On January 5, 2026, some of these lawsuits were consolidated into a single matter, along with other lawsuits against unrelated defendants which stem from the same Oracle EBS software vulnerability discussed above. This consolidated putative class action is titled In re Oracle Corporation Data Breach Litigation and is pending in federal court in the Western District of Texas (Case No. 1:25-cv-01805). The remaining lawsuits may eventually be consolidated with the Western District of Texas case or may proceed separately.
The complaints generally allege that the University and other co-defendants failed to protect the plaintiffs’ confidential information in violation of various federal and/or state laws.
Because of the many questions of fact and law that may arise, the outcome of these legal proceedings are uncertain at this point. Based on information available to us at present, we cannot reasonably estimate a range of loss, if any, for these actions and, accordingly, we have not accrued any liability associated with these actions.
During the six months ended February 28, 2026, we recorded $4.8 million of expense associated with this cybersecurity incident that is included in strategic alternatives, restructuring and other on our condensed consolidated statements of income. The expense principally represents costs to notify the affected parties, fees from third-party cybersecurity firms, and legal fees related to the incident response. Although we expect to incur additional expenses related to this event in future periods, we maintain a comprehensive cybersecurity insurance policy, which covers costs associated with the incident response, investigatory and remediation expense, potential regulatory action, business interruption, and costs associated with investigating, defending, and resolving legal proceedings related to the incident, subject to deductibles, exclusions and limits.
Class Action Lawsuit
On April 1, 2025, Janielle Dawson filed a class action complaint against the University in the United States District Court for the Northern District of Illinois. The complaint alleges that the University violated the Video Privacy Protection Act, Electronic Communications and Privacy Act, and the Illinois Eavesdropping Act by integrating third-party tracking technology in its website and thereby disclosing to third parties its users’ personally identifiable and other protected information. The complaint seeks to recover damages on behalf of plaintiff and other members of the class.
During our second quarter of fiscal year 2026, we filed a motion to dismiss this matter, which the court granted in part and denied in part. Subsequently, the parties mutually agreed to explore resolution of this matter via mediation, which is currently scheduled in June 2026.
Because of the many questions of fact and law that may arise, the outcome of this legal proceeding is uncertain at this point. Based on information available to us at present, we cannot reasonably estimate a range of loss for this action and, accordingly, we have not accrued any liability associated with this action.
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Note 14. Regulatory Matters
Borrower Defense to Repayment Claims
Under the Higher Education Act, the Department of Education’s regulations specify acts or omissions of a school that a student loan borrower may assert as a defense to repayment of a federal student loan (referred to as a BDR claim) and thereby seek to obtain a discharge and refund of such loan. Under the BDR Rules, the Department of Education has indicated that it believes it may also assert such a claim on behalf of a student borrower. Additionally, the Department of Education may initiate a recoupment proceeding against a school to collect loan amounts that are discharged or refunded as the result of BDR claims. The BDR Rules have been significantly revised in recent years. Currently, a complex framework of rules applies different loan relief and recoupment standards and procedures based upon the date that the loan in question was first disbursed. Additionally, the BDR Rules are subject to various pending litigation that increases related complexity and uncertainty.
The Department of Education began sending borrower defense applications to the University in June 2020. As part of the fact-finding process, the Department sends individual student applications to the University and allows the University the opportunity to submit responses to the borrower defense applications. The University has submitted, or will submit within the timeframe prescribed by the Department, initial substantive responses to these applications to the Department.
In September 2023, the Department of Education announced that it had approved more than 1,200 BDR claims and discharged nearly $37 million federal student loans from borrowers who made claims regarding the University’s “Let’s Get to Work” ad campaign, which ran from 2012 to 2014 based on its announced finding that the University substantially misrepresented its relationships with outside companies in the ad campaign. The Department of Education further indicated its intent to commence a recoupment effort against the University for approximately $37 million in discharged loans, but the Department of Education has not yet commenced any such action. While the discharged loans related to these BDR claims appear also to have been subject to automatic discharge under the terms of BDR-related litigation, the settlement of which itself could not serve as the basis of a recoupment action by the Department of Education under its stated position, it remains possible that the Department of Education could attempt to seek recoupment of such discharged payments in the future, and we cannot predict the timing or scale of such recoupment efforts if pursued.
Because of the many questions of fact and law that may arise, the outcome of BDR claims is uncertain at this point. Based on the information available to us at present, we cannot estimate a reasonably possible range of loss for BDR claims and, accordingly, we have not accrued any liability associated with such claims.
Note 15. Segment Reporting
We have one operating and reportable segment, the University, which represents all of our consolidated net revenue in the three and six months ended February 28, 2026 and 2025. Our chief operating decision maker (“CODM”), Christopher Lynne, Chief Executive Officer of the Company, currently evaluates performance and manages our operations at the consolidated level.
Our CODM evaluates performance for the segment and decides how to allocate resources and capital based on profitability metrics, including operating income, that are reported on our condensed consolidated statements of income. Our CODM considers variances in actual results compared to prior periods, and variances in actual results compared to budgets and forecasts for this profit measure when making decisions about resource allocation and assessing performance. Total asset information is evaluated at the consolidated level and, as a result, such information has not been presented below.
No individual customer accounted for more than 10% of our consolidated net revenue in the three and six months ended February 28, 2026 and 2025.
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The following provides information on net revenue, significant expenses and net income for our single reportable segment during the respective periods:
Compensation and related costs(1)
112,785
103,058
246,085
204,695
Advertising
48,248
48,597
91,308
89,744
Other(2)
35,818
33,910
71,684
69,923
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes thereto included in this Quarterly Report on Form 10-Q.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains 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,” “can,” “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 Quarterly Report on Form 10-Q, 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 are contained principally in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and include, among other things, statements relating to: (i) our strategy, outlook and growth prospects; (ii) our operational and financial targets and dividend policy; (iii) general economic trends and trends in the industry and markets; and (iv) 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:
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. 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. We anticipate that subsequent events and developments will cause our views to change. This Quarterly Report on Form 10-Q and the documents filed as exhibits hereto 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.
Overview
We, through our subsidiary The University of Phoenix, Inc., are a pioneer of online higher education for working adults in the United States. Since our founding in 1976, the University has been a mission-driven organization focused on offering a distinctive and affordable online higher education experience that is customized for working adults who did not fit the traditional 18- to 22-year-old campus-based student model. The University has been accredited since 1978 by the Higher Learning Commission (“HLC”), an institutional accrediting agency recognized by the Department of Education. In our nearly five decades of operation, we have served more than 1.1 million alumni (including those who have completed non-degree certificates) and conferred more than 1.3 million degrees.
On October 10, 2025, we 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, we did not receive any proceeds from the sale of shares associated with the offering.
In connection with the expiration of the IPO lock-up period on April 6, 2026, shares of our common stock issued upon prior or future exercises of University stock options by the option holders (other than our Section 16 officers, who remain subject to a one-year lock-up) became eligible for sale, subject to normal trading window restrictions, in the public market. Upon exercise, we may elect to settle such awards through net share settlement or repurchase of the options for cash. The extent to which these options are exercised, and the method of settlement we elect, will affect either or both the number of shares of our common stock outstanding and our liquidity.
As of the date of this filing, we cannot reasonably estimate the extent of future option exercises or the method of settlement that will be elected, and accordingly, the potential impact on our outstanding share count and liquidity is uncertain. In addition, following the expiration of the lock-up period, sales of shares by our employees and former employees may adversely affect the market price of our common stock.
Factors Affecting Results of Operations
We believe our market position provides us with a significant opportunity to drive sustainable growth in the future. The following factors, among others described herein, have historically affected, and we expect in the future will similarly affect, our performance:
Enrollment. The net revenue we generate in a given period largely depends on the total number of courses taken by the enrolled student population and the price per course. As part of our focus on affordable and accessible tuition, we have not raised tuition rates since 2018. Our student retention rates, calculated as (i) the number of confirmed undergraduate students who both started a degree or non-degree certificate program and posted attendance in a course within such program as of an applicable date, divided by (ii) the number of confirmed undergraduate students who started such a program, expressed as a percentage, have increased from 59.7% for the 2016/2017 cohort to 76.6% for the 2024/2025 cohort (our most recent completed cohort for retention rate purposes), which represents a 5.1 percentage point increase from the 2023/2024 cohort. The increase in retention is a key factor driving the growth in Average Total Degreed Enrollment in recent years, including a 2.9% increase in the six months ended February 28, 2026 as compared to the prior year period. We have invested and continue to invest in many areas of our business that we expect will further improve enrollment, retention and graduation rates, which drive sustainable growth. However, enrollment and retention of students at the University are impacted by the risks described in Item 1A, “Risk Factors” of our 2025 Annual Report on Form 10-K, many of which are beyond our control.
Career-Relevant Education and Employer Relationships. Our career-oriented programs and learning platform position us for continued growth in the corporate-sponsored training and education market. Enrollment through our employer relationships represented approximately 34% of our Average Total Degreed Enrollment in the six months ended February 28, 2026, which represents an approximate 4 percentage point increase compared to the prior year period. This represents a valuable opportunity to drive growth, diversify our student population and reinforce the durability of our net revenue as these students generally have higher retention and graduation rates. In addition, we have begun to expand discussions with employers beyond our degree offerings to include our comprehensive suite of talent development solutions and professional development offerings. While the development of our talent development solutions is in the early stages, our ability to offer these solutions has broadened our relationships with key employers and provides an opportunity for growth.
Regulatory Requirements. Our operations are subject to extensive U.S. federal and state regulation applicable to providers of post-secondary education who participate in Title IV programs. Failure to comply with applicable regulatory requirements, standards or policies could subject us to significant monetary liabilities, fines and penalties, including loss of or limitations upon access to U.S. federal student loans and grants for our students. Any actions that limit our participation in Title IV programs or the amount of student financial aid for which our students are eligible would materially impact our student enrollment and profitability and could impact the
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continued viability of our business as currently conducted. See Item 1A, “Risk Factors” of our Annual Report on Form 10-K for a detailed discussion of regulatory requirements and related risks.
Cost Structure. Our ability to grow profitably depends on our ability to manage our cost structure. Our margin expansion over recent years has been largely derived from the operating leverage resulting from the increase in net revenue relative to our costs that are more fixed in nature and our exit from all but one of our ground campuses. We intend to augment this historical operating leverage through additional strategic and operational initiatives to enhance support for students in a more efficient manner. We continue to invest in optimization, which we expect will reduce friction points and increase efficiencies throughout the University.
Seasonality. The University’s non-term academic model encompasses a series of courses taken consecutively over the length of the program, which we would expect to limit seasonal enrollment fluctuations. However, we have historically experienced, and expect to continue to experience, lower net revenue in our second fiscal quarter (December through February) compared to other quarters due to the University’s holiday breaks when no related net revenue is recognized. While our operating costs generally do not fluctuate significantly on a quarterly basis, we have historically experienced, and expect to continue to experience, increased marketing expense in our second and fourth fiscal quarters due to course starts that occur during traditional back-to-school seasons.
Key Performance Metrics
We review a number of operating and financial metrics, including the key performance metrics presented in the table below, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions:
(Enrollment statistics rounded to the nearest hundred; dollars in thousands)
Average Total Degreed Enrollment
82,600
81,100
84,100
81,700
Net income attributable to Phoenix Education Partners, Inc. margin
4.8
%
7.2
5.4
13.1
Adjusted EBITDA
34,817
32,304
109,994
102,444
Adjusted EBITDA margin
15.7
14.5
22.7
21.4
Average Total Degreed Enrollment. Enrollment is the primary driver of our net revenue and a key non-financial metric that helps compare our performance on a consistent basis across periods. Additionally, enrollment is a reflection of our ability to retain continuing students and enroll new students, which are key components of our growth strategy. Enrollment measures in our industry are not standardized, and other companies in our industry may calculate enrollment measures differently than we do.
Substantially all of our net revenue is generated from student enrollment in tuition-bearing degree programs encompassing a series of courses (e.g., most often five-week courses) taken consecutively over the length of the program. Over comparative periods, Total Degreed Enrollment generally increases as new students attend a credit-bearing course or continuing students return to the University, which increases are generally offset by graduations or continuing students not attending a credit-bearing course (e.g., by withdrawing from the University). 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. Average Total Degreed Enrollment for the periods shown above represents the aggregate of monthly Total Degreed Enrollment during such period divided by the number of months in the period. For example, Average Total Degreed Enrollment for the three months ended February 28, 2026 is calculated as the aggregate Total Degreed Enrollment for the three months from December 2025 through February 2026 divided by three.
Net income attributable to Phoenix Education Partners, Inc., net income attributable to Phoenix Education Partners, Inc. margin, adjusted EBITDA and adjusted EBITDA margin. We believe these items are primary indicators of our operating performance because they are measures of profitability and assist with comparing our performance across periods and evaluating the effectiveness of our business strategies. Additionally, adjusted EBITDA and adjusted EBITDA margin are non-GAAP financial measures that allow us to evaluate our profitability on a consistent basis across periods by excluding items that management and our board of directors do not believe are indicative of our core operating performance. We use adjusted EBITDA and adjusted EBITDA margin to supplement GAAP measures of performance and to compare our performance against peer companies utilizing similar measures. See “Non-GAAP Financial Measures and Reconciliations” below for the definitions of adjusted EBITDA and adjusted EBITDA margin, a reconciliation of net income attributable to Phoenix Education Partners, Inc. to adjusted EBITDA and the calculation of adjusted EBITDA margin. We
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calculate net income attributable to Phoenix Education Partners, Inc. margin as net income attributable to Phoenix Education Partners, Inc. divided by net revenue, expressed as a percentage.
Results of Operations
Three and Six Months Ended February 28, 2026 Compared to the Three and Six Months Ended February 28, 2025
The following details our consolidated results of operations during the respective periods:
Three Months EndedFebruary 28,
Six Months EndedFebruary 28,
% Change
2026 versus 2025
(0.4
)%
1.3
Costs and expenses
(1.8
2.4
8.5
18.7
(16.3
78.6
2.3
11.6
(28.8
(50.1
(19.2
(41.6
*
(30.0
(50.2
(15.7
(25.1
(35.0
(59.0
(33.1
(58.1
*Not meaningful
We generate all, or substantially all, of our consolidated net revenue from tuition-bearing degree programs offered by the University. Under the University’s non-term academic delivery model, students generally enroll in a program of study encompassing a series of courses taken consecutively over the length of the program, and net revenue is recognized evenly over the duration of the course (e.g., daily over five weeks for a five-week course, other than the University’s holiday breaks when no related net revenue is recognized).
Net revenue decreased $0.9 million, or 0.4%, in the three months ended February 28, 2026 compared to the prior year period. The decrease in net revenue was principally attributable to an increase in discounts mainly resulting from a higher percentage of our enrollment through employer relationships. This decrease was partially offset by enrollment growth, as measured by Average Total Degreed Enrollment, which increased 1.8% during the three months ended February 28, 2026 compared to the prior year period. The enrollment increase was primarily due to improved student retention.
Net revenue increased $6.4 million, or 1.3%, in the six months ended February 28, 2026 compared to the prior year period. The increase in net revenue was principally attributable to enrollment growth as measured by Average Total Degreed Enrollment, which increased 2.9% compared to the prior year period primarily due to improved student retention. This increase was partially offset by an increase in discounts mainly resulting from a higher percentage of our enrollment through employer relationships.
Instructional and support principally consists of costs related to the delivery and administration of our educational programs and includes costs related to faculty, academic administrators, enrollment and student advisory personnel (including share-based compensation), credit losses associated with uncollectible accounts receivable, financial aid processing costs and depreciation of applicable property and equipment. Instructional and support also includes course development costs (including amortization of related intangible assets) and costs associated with delivering course content.
Instructional and support decreased $2.0 million, or 1.8%, in the three months ended February 28, 2026 compared to the prior year period which resulted in a 0.7% decrease as a percentage of net revenue from 48.0% to 47.3%. The decrease was principally
24
attributable to decreases in credit losses on accounts receivable and financial aid processing costs, which were higher in the prior year period as we addressed financial aid processing changes following the Department of Education’s implementation of an updated financial aid application form and transitioned to disbursing financial aid by course (see “Liquidity and Capital Resources”). The decrease was partially offset by a $2.3 million increase in share-based compensation expense resulting from our IPO (see Note 1. Nature of Operations and Significant Accounting Policies and Note 12. Share-Based Awards to our condensed consolidated financial statements).
Instructional and support increased $5.2 million, or 2.4%, in the six months ended February 28, 2026 compared to the prior year period, which resulted in a 0.5% increase as a percentage of net revenue from 45.0% to 45.5%. This increase was principally attributable to an $8.8 million increase in share-based compensation expense resulting from our IPO (see Note 1. Nature of Operations and Significant Accounting Policies and Note 12. Share-Based Awards to our condensed consolidated financial statements). The increase was partially offset by decreases in credit losses on accounts receivable and financial aid processing costs as described above.
General and administrative principally consists of costs related to management and employees in administrative functions (including share-based compensation), marketing expense, legal and professional fees, information technology infrastructure costs, depreciation of property associated with our administrative functions, rent and related expenses associated with our corporate facilities and other related costs.
General and administrative increased $7.7 million and $32.3 million, or 8.5% and 18.7%, in the three and six months ended February 28, 2026, respectively, compared to the prior year periods. This resulted in such expense increasing 3.6% as a percentage of net revenue from 40.5% to 44.1% in the three months ended February 28, 2026, and 6.1% as a percentage of net revenue from 36.1% to 42.2% in the six months ended February 28, 2026. The increases in expense were principally attributable to increases in share-based compensation of $6.8 million and $29.1 million resulting from our IPO in the three and six months ended February 28, 2026, respectively, compared to the prior year periods (see Note 1. Nature of Operations and Significant Accounting Policies and Note 12. Share-Based Awards to our condensed consolidated financial statements).
Strategic alternatives, restructuring and other decreased $1.0 million in the three months ended February 28, 2026 compared to the prior year period, which was principally due to a reduction in strategic alternatives expense following our IPO. This was partially offset by an increase in lease restructuring expense principally attributable to a net credit recognized in the prior year period resulting from a reduction in our estimated future cash flows associated with our exited space (see Note 8. Other Liabilities to our condensed consolidated financial statements).
Strategic alternatives, restructuring and other increased $8.7 million in the six months ended February 28, 2026 compared to the prior year period, which was principally due to costs associated with a cybersecurity incident (see Note 13. Commitments and Contingencies to our condensed consolidated financial statements), and an increase in lease restructuring expense as described above.
Interest income decreased $0.4 million, or 19.2%, in the three months ended February 28, 2026 compared to the prior year period, which was principally attributable to a decrease in interest rate yields.
Interest income decreased $2.5 million, or 41.6%, in the six months ended February 28, 2026 compared to the prior year period. The decrease was principally attributable to a decrease in average cash and cash equivalents and marketable securities held and a decrease in interest rate yields.
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Interest expense increased $0.4 million and $0.5 million in the three and six months ended February 28, 2026, respectively, compared to the prior year periods. The increases were primarily from amortization of deferred financing costs from our $100 million Revolving Facility.
Provision for income taxes decreased $0.9 million, or 15.7%, in the three months ended February 28, 2026 compared to the prior year period. Our effective income tax rate for the three months ended February 28, 2026 was 31.3% compared to 26.0% in the prior year period. The increase in our effective tax rate was primarily due to certain executive compensation costs becoming nondeductible after the completion of our IPO.
Provision for income taxes decreased $5.5 million, or 25.1%, in the six months ended February 28, 2026 compared to the prior year period. Our effective income tax rate for the six months ended February 28, 2026 was 38.8% compared to 25.8% in the prior year period. The increase in our effective tax rate was primarily due to the completion of our IPO, which resulted in certain IPO and executive compensation costs becoming nondeductible.
Non-GAAP Financial Measures and Reconciliations
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with GAAP, we also provide the following non-GAAP financial measures:
Adjusted net income attributable to Phoenix Education Partners, Inc., adjusted EBITDA and adjusted EBITDA margin are non-GAAP measures and are included as supplemental disclosures because we believe they are useful indicators of our operating performance. Derivations of net income and EBITDA are well recognized performance measurements in the education industry that are frequently used by our management, as well as by investors, securities analysts and other interested parties to compare the operating performance of companies in our industry. We believe these non-GAAP measures help compare our performance on a consistent basis across periods and provide an additional analytical tool to assist with identifying underlying trends in our results of operations. While we believe that these non-GAAP measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the comparable GAAP measures.
Adjusted net income attributable to Phoenix Education Partners, Inc., adjusted EBITDA and adjusted EBITDA margin have limitations as analytical tools. Additionally, other companies in our industry may calculate such measures differently than we do, limiting each measure’s usefulness as a comparative measure. Some of these limitations are:
1 During our first quarter of 2026, we changed our definition of this measure to start with “Net income attributable to Phoenix Education Partners, Inc.” 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.
Because of these limitations, adjusted net income attributable to Phoenix Education Partners, Inc., adjusted EBITDA and adjusted EBITDA margin should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. Investors should not place undue reliance on this information.
The following tables present reconciliations of net income attributable to Phoenix Education Partners, Inc. to adjusted net income attributable to Phoenix Education Partners, Inc. and net income attributable to Phoenix Education Partners, Inc. to adjusted EBITDA and adjusted EBITDA margin during the respective periods:
Special items and share-based compensation:
Restructuring lease expense (credit), net(a)
Strategic alternatives expense(b)
Cybersecurity incident expense(c)
Impairment charges and asset disposal losses(d)
500
50
Litigation charges and regulatory expense(e)
1,203
1,480
2,406
2,685
Non-cash share-based compensation expense(f)
Other(g)
1,135
1,036
3,099
2,231
Income tax effects of special items and share-based compensation(h)
(2,942
(1,725
(8,875
(3,193
Adjusted net income attributable to Phoenix Education Partners, Inc.
22,613
21,396
76,261
72,326
5,725
5,622
Interest income, net of interest expense
(1,226
(2,087
(2,772
(5,831
Net revenue used in computing net income attributable to Phoenix Education Partners, Inc. margin and adjusted EBITDA margin
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Liquidity and Capital Resources
Our primary sources of cash are cash provided by operations and cash and cash equivalents and marketable securities on hand. We also have available liquidity through our $100 million revolving credit facility, which we have not drawn on as of February 28, 2026 (see “Off-Balance Sheet Arrangements” below).
Our principal uses of cash are, and we expect to continue to be, payments of our operating expenses, such as employee compensation and marketing related costs, and investments to maintain and enhance our digital technology platform and various technology systems to support and improve the student experience.
We paid a regular, quarterly cash dividend of $0.21 per share of common stock in our second quarter of fiscal year 2026. Additionally, our board of directors approved a regular, quarterly cash dividend of $0.21 per share of common stock that will be paid to shareholders of record and holders of certain share-based awards during our third quarter of fiscal year 2026. We plan to pay additional regular, quarterly cash dividends in subsequent quarters, subject to the discretion of and approval from our board of directors.
On April 3, 2026, our board of directors adopted a share repurchase program of up to an aggregate of $50 million of our common stock (the “April 2026 Repurchase Program”). As of the date of this filing, we have not utilized any of the authorized amount.
We expect that any repurchases under the April 2026 Repurchase Program will be funded using our existing cash and cash equivalents. The timing and amount of any repurchases will depend on a variety of factors, including our stock price, general market conditions, liquidity and capital requirements, and other uses of cash, including potential cash outflows associated with the settlement of share-based compensation awards. Repurchases under the program may be made from time to time through open market purchases, privately negotiated purchases or other acquisitions of shares of our common stock, including pursuant to Rule 10b5-1 or Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
We believe that our existing cash and cash equivalents, marketable securities, Revolving Facility and cash generated from operating activities will be sufficient to meet our working capital and other cash requirements for the foreseeable future.
Although we currently have substantial liquidity, our ability to deploy currently available liquidity is constrained by our need to maintain a Department of Education financial responsibility composite score of at least 1.5. See Item 1A, “Risk Factors” included in our Annual Report on Form 10-K for a discussion of composite score requirements and calculations.
Cash and cash equivalents, restricted cash and cash equivalents and marketable securities
Our cash and cash equivalents, restricted cash and cash equivalents and marketable securities are placed with high-credit-quality financial institutions. The following provides a summary of these financial instruments as of the respective periods:
28
42.6
0.7
Current marketable securities
(24.8
Noncurrent marketable securities
9.0
29.4
Total cash and cash equivalents (including restricted cash and cash equivalents) and marketable securities (including current and noncurrent marketable securities) increased $57.3 million, or 29.4%, during the six months ended February 28, 2026 principally due to $80.0 million of cash generated from operating activities. This was partially offset by $10.1 million of capital expenditures and cash paid for dividends.
Operating cash flows
The following provides a summary of our operating cash flows during the respective periods:
Non-cash items
78,362
51,949
Changes in assets and liabilities, excluding the impact of acquisition
(24,355
(93,022
For the six months ended February 28, 2026, we generated $80.0 million of net cash provided by operating activities, which was principally attributable to net income of $25.9 million and the following:
Changes in assets and liabilities:
For the six months ended February 28, 2025, we generated $22.1 million of cash provided by operating activities, which was principally attributable to $63.2 million of net income and $51.9 million of non-cash adjustments. This was partially offset by a net cash outflow of $93.0 million from changes in assets and liabilities, which was primarily the result of a decrease in student deposits attributable to a change in the timing of financial aid disbursements for the University’s students. Before the change, financial aid funds were typically disbursed in two installments that generally involved four courses. Such funding was included in student deposits on our condensed consolidated balance sheets until students began subsequent courses. Beginning in July 2024, the University began transitioning to financial aid disbursements by course with students transitioning after they complete their current academic year. Accordingly, student deposits decreased throughout fiscal year 2025 as the University’s students transitioned to single course financial aid disbursements.
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Investing cash flows
The following provides a summary of our investing cash flows during the respective periods:
Marketable securities maturities and sales, net of purchases
1,138
43
Net cash used in investing activities for the six months ended February 28, 2026 and 2025 was $9.0 million and $12.9 million, respectively, and principally consisted of capital expenditures for internal software development. In the prior year period, we also paid $2.0 million, net of cash acquired, to acquire a controlling interest in Empath, Inc. (see Note 3. Acquisition to our condensed consolidated financial statements for more information).
Financing cash flows
The following provides a summary of our financing cash flows during the respective periods:
Net cash used in financing activities was $12.6 million and $148.7 million for the six months ended February 28, 2026 and 2025, respectively. The cash flows in both periods represented dividends and dividend equivalents and payments for payroll taxes on share-based awards. In the prior year period, we also distributed $134.0 million to our limited partners.
Off-Balance Sheet Arrangements
We had a $32 million outstanding cash collateralized letter of credit as of February 28, 2026, which supports a sublease for a facility we have exited. Subsequent to February 28, 2026, we replaced our existing cash collateralized letter of credit with a new letter of credit, on substantially the same terms, through our Revolving Facility. As a result, we expect corresponding reductions in restricted cash and available capacity under our Revolving Facility.
Additionally, our insurers issue surety bonds that are required by various states where we operate, or that are required for other purposes. We are obligated to reimburse our insurers for any surety bonds that are paid. As of February 28, 2026, the face amount of these surety bonds was less than $1 million.
Critical Accounting Estimates
A detailed discussion of our critical accounting estimates and significant accounting policies is included under the caption “Critical Accounting Estimates” included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2025 Annual Report on Form 10-K. During the six months ended February 28, 2026, there have been no material changes to our critical accounting estimates or our significant accounting policies as disclosed in our 2025 Annual Report on Form 10-K.
Recent Accounting Pronouncements
See Note 1. Nature of Operations and Significant Accounting Policies to our condensed consolidated financial statements for recently issued accounting pronouncements adopted or not yet adopted as of the date of this Quarterly Report on Form 10-Q.
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JOBS Act Accounting Election
The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for an “emerging growth company.” We have elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our audited financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. See Note 1. Nature of Operations and Significant Accounting Policies to our audited consolidated financial statements for more information regarding new or revised accounting pronouncements.
We have chosen to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, as an “emerging growth company” we are not required to, among other things, (i) provide an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies; (iii) comply with certain types of new requirements adopted by the PCAOB; and (iv) disclose certain executive compensation-related items, such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation. We may remain an “emerging growth company” until August 31, 2031. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue equals or exceeds $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an “emerging growth company” prior to such date.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Interest Rate Risk
We are subject to the impact of interest rate changes and may be subject to changes in the market values of our investments. We invest our excess cash in cash equivalents and marketable securities, including money market funds and investment-grade corporate bonds. The fair value and investment income of these instruments fluctuate based on changes in market interest rates. A decline in interest rates could adversely affect our future investment income, and we may incur losses in principal if we are required to sell securities that have declined in market value as a result of rising interest rates.
During the three months ended February 28, 2026, our investment portfolio generated an average yield of approximately 3%, resulting in interest income of $1.8 million for the quarter.
Based on the composition of our investments as of February 28, 2026, a hypothetical 100-basis-point increase or decrease in market interest rates would not have a material impact on our condensed consolidated financial statements.
We do not currently have material risk associated with interest expense as we did not have any outstanding borrowings under our Revolving Facility as of February 28, 2026.
Item 4. Controls and Procedures.
Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were effective such that the information relating to the Company, including our consolidated subsidiaries, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended February 28, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
We are subject to various claims and contingencies that arise from time to time in the ordinary course of business, including those related to regulation, litigation, business transactions, employee-related matters and taxes, among others. While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material effect on our consolidated financial position, results of operations or cash flows.
A description of pending litigation, settlements, and other proceedings that fall outside the scope of ordinary and routine litigation incidental to our business is provided in Note 13. Commitments and Contingencies to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, which are incorporated herein by reference.
Item 1A. Risk Factors.
In addition to the information set forth in this Quarterly Report on Form 10-Q, investors should carefully consider the factors discussed in Item 1A, “Risk Factors,” in our 2025 Annual Report on Form 10-K. There have been no material changes to the risk factors previously disclosed in our 2025 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
The Company did not repurchase any shares of its common stock during the three months ended February 28, 2026.
Recent Sales of Unregistered Equity Securities
The Company did not sell any unregistered equity securities during the three months ended February 28, 2026.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Item 5. Other Information.
Director and Officer Trading Arrangements
During the three and six months ended February 28, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits.
Exhibit
Number
Description
3.1
Certificate of Incorporation of Phoenix Education Partner, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the SEC on October 15. 2025)
3.2
Bylaws of Phoenix Education Partners, Inc. (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed with the SEC on October 15, 2025)
31.1*
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith.
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: April 7, 2026
By:
/s/ Blair Westblom
Blair Westblom
Chief Financial Officer