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Revenue accelerated to 21.7% growth in Q3 2026 on a stable 55.0% gross margin, but quarterly operating income remains highly volatile, ranging from $19.1M to $51.8M.
Phoenix Education Partners, Inc (PXED) annual income statement — 3-year revenue, gross profit & net income history
| Metric | TTM | Aug'25 | Aug'24 | Aug'23 |
|---|
| Sales/Revenue | 1.01B | 1.01B | 950.01M | 835.25M |
| Revenue Growth % | - | 6.02% | 13.74% | - |
| Cost of Goods Sold | 452.92M | 435.99M | 403.92M | 379.26M |
| COGS % of Revenue | - | 43.29% | 42.52% | 45.41% |
| Gross Profit | 560.76M | 571.2M | 546.09M | 455.99M |
| Gross Margin % | 55.32% | 56.71% | 57.48% | 54.59% |
| Gross Profit Growth % | - | 4.6% | 19.76% | - |
| Operating Expenses | 427.9M | 352.63M | 343.99M | 328.78M |
| OpEx % of Revenue | - | 35.01% | 36.21% | 39.36% |
| Selling, General & Admin | 399.35M | 352.63M | 343.99M | 328.78M |
| SG&A % of Revenue | - | 35.01% | 36.21% | 39.36% |
| Research & Development | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - |
| Other Operating Expenses | 1000K | 0 | 0 | 0 |
| Operating Income | 132.86M | 218.57M | 202.1M | 127.2M |
| Operating Margin % | 13.11% | 21.7% | 21.27% | 15.23% |
| Operating Income Growth % | - | 8.15% | 58.88% | - |
| EBITDA | 138.53M | 240.58M | 223.16M | 151.11M |
| EBITDA Margin % | 13.67% | 23.89% | 23.49% | 18.09% |
| EBITDA Growth % | - | 7.81% | 47.68% | - |
| D&A (Non-Cash Add-back) | 5.67M | 22.01M | 21.06M | 23.91M |
| EBIT | 134.98M | 182.59M | 168.2M | 89.41M |
| Net Interest Income | 6.47M | 9.98M | 15.73M | 6.76M |
| Interest Income | 8M | 10.46M | 16.69M | 8.53M |
| Interest Expense | 1.52M | 480K | 960K | 1.77M |
| Other Income/Expense | -13.46M | -36.46M | -34.86M | -39.56M |
| Pretax Income | 119.4M | 182.11M | 167.24M | 87.64M |
| Pretax Margin % | 11.78% | 18.08% | 17.6% | 10.49% |
| Income Tax | 36.98M | 46.67M | 52.09M | 21.71M |
| Effective Tax Rate % | 30.97% | 25.63% | 31.15% | 24.77% |
| Net Income | 82.9M | 133.88M | 113.13M | 64.93M |
| Net Margin % | 8.18% | 13.29% | 11.91% | 7.77% |
| Net Income Growth % | - | 18.34% | 74.23% | - |
| Net Income (Continuing) | 82.42M | 135.44M | 115.15M | 65.93M |
| Discontinued Operations | 0 | 0 | 0 | 0 |
| Minority Interest | 2.18M | -6.72M | 21.63M | 19.52M |
| EPS (Diluted) | 2.14 | 3.76 | 3.03 | 1.76 |
| EPS Growth % | - | 24.09% | 72.16% | - |
| EPS (Basic) | - | 3.76 | 3.18 | 1.82 |
| Diluted Shares Outstanding | 38.8M | 35.65M | 35.6M | 35.6M |
| Basic Shares Outstanding | 35.77M | 35.65M | 35.6M | 35.6M |
| Dividend Payout Ratio | - | 160.15% | 61.84% | - |
Quick answers to the most common questions about buying PXED stock.
For fiscal year 2025, Phoenix Education Partners, Inc (PXED) reported total revenue of $1.01B. This represents a 20.6% increase compared to $835.2M in 2023.
Phoenix Education Partners, Inc (PXED) is profitable, generating $133.9M in net income for the fiscal year ending 2025 with a net profit margin of 13.3%.
Phoenix Education Partners, Inc (PXED) reported an operating income of $218.6M, resulting in an operating profit margin of 21.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Phoenix Education Partners, Inc (PXED) generated $571.2M in gross profit for the year, representing a gross profit margin of 56.7%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
High earnings and margin volatility
Metrics are mathematically derived from official filings.
Accelerating but Lumpy Revenue Growth
PXED's revenue growth accelerated to 21.7% year-over-year in Q3 2026, as reported in its latest SEC filing, following a 9.1% increase in the prior quarter. However, the quarterly trajectory is erratic, with revenue declining sequentially from $262.0M in Q1 to $222.5M in Q2 before rebounding.
The growth profile lacks consistency, as seen in the company's inability to post two consecutive quarters of sequential revenue growth over the 10-quarter period. The latest acceleration is encouraging, but the preceding dip suggests the business may be project-based or subject to significant ordering patterns, making trend extrapolation difficult.
Structural Gross Margin Resilience
PXED maintained a gross margin of 55.0% in Q3 2026, which, according to the supplied financials, consistently outperforms the peer median of 53.2%. This structural advantage appears durable, though the margin does fluctuate by several hundred basis points quarter-to-quarter.
The company's ability to sustain gross margins in the mid-to-upper 50s, peaking at 58.2%, points to a defensible cost structure or pricing power within its niche. The variability, however, suggests exposure to mix shifts or input cost pressures that merit monitoring. Compared to peers like Perdoceo (71.7%), there may be room for further improvement, but the current level is a competitive strength.
SG&A Discipline Drives Operating Leverage
Operating income scaled to $51.8 million on a 21.7% revenue increase in Q3 2026, demonstrating clear operating leverage as SG&A expenses remained nearly flat year-over-year at ~$98 million. This indicates management's focus on cost control is amplifying profit growth.
The expansion of operating margin to 19.1% from 11.5% a year ago is primarily a function of controlling overhead costs as the top line grows. SG&A has been held relatively steady between $90M and $107M across the period, allowing incremental gross profit to flow more directly to the operating line. This discipline is a positive signal for profitability scalability.
Net Income Distorted by Stock-Based Comp
Stock-based compensation represented a substantial $29.5 million drag on earnings in Q1 2026, temporarily suppressing net margin to 5.9% despite solid gross profit. As noted in the income statement, this non-cash charge creates significant volatility in reported EPS, which swung from $0.28 to $1.01 between Q2 and Q3 2026.
The quality of reported earnings is periodically impaired by variable SBC expense, which does not reflect cash operating performance. Excluding SBC would provide a clearer view of underlying profitability trends, as its impact can swing net income by a large percentage. Investors should evaluate adjusted earnings to assess the core business earnings power.
Peak Profitability May Not Be Recoverable
The strongest challenge to PXED's narrative is that its operating margin of 26.5% achieved in Q4 2024 has proven to be an outlier, with all subsequent quarters showing material compression. This raises questions about the sustainability of its cost structure at current revenue levels.
The subsequent erosion in operating margin to as low as 8.4% suggests the Q4 2024 peak was likely driven by non-recurring factors or a particularly favorable revenue mix. If the company cannot consistently achieve margins above 20%, its valuation premium versus peers may be unjustified. The current recovery to 19.1% is promising but still falls short of this earlier benchmark.
Cost Structure Cyclically Stretched in Q1
SG&A expenses surged to $106.6 million in Q1 2026, the highest in the dataset, coinciding with a quarter of strong revenue but compressed operating margin. This suggests operational costs may be semi-variable and tend to spike with certain business cycles.
The cost behavior indicates that while SG&A can be held flat in some quarters (e.g., Q3 2025 vs. Q3 2026), it is not perfectly fixed. The Q1 2026 spike implies that periods of high activity may require additional discretionary spending, temporarily eroding operating leverage. Management's ability to control these discretionary costs during growth phases is critical for sustained profitability.