Phoenix Education Partners, Inc.

Good afternoon, and welcome to Phoenix Education Partners' first quarter fiscal 2026 earnings conference call. Today's call is being recorded. At this time, all participants are in a listen-only mode. Following prepared remarks, we will open the call for questions. I would now like to turn the call over to Beth Coroneli, Vice President of Investor Relations. Please go ahead.

Welcome to the Phoenix Education Partners first quarter fiscal 2026 earnings conference call. Speaking on today's call are Chris Lin, our chief executive officer, and Blair Westbloom, our chief financial officer. Before we begin, I would like to remind everyone that certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on current market competitive and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. Listeners should not place undue reliance on such statements. We undertake no obligation to update publicly any forward-looking statement after this presentation whether a result of new information, future events, changes in assumptions, or otherwise. The risks related to these forward-looking statements are described in our filings with the FCC, including our most recent Form 10-K, Form 10-Q, and other public filings. We will also discuss certain non-GAAP financial measures. You should consider our non-GAAP results as supplements to, and not in lieu of, our GAAP results. Reconciliations to the most directly comparable GAAP measures can be found in our earnings release and SEC filings. Unless otherwise noted, comments in the call will focus on the comparison to the prior year period. We also direct you to the supplemental earnings slides provided on the Phoenix Education Partners website. With that, I'll turn the call over to Chris.

Thank you, Beth, and good afternoon, everyone. We appreciate you joining us as we report our results for the first quarter of fiscal 2026. This quarter's results demonstrate a disciplined execution of our strategy marked by steady growth, strong retention, and continued investment in student success and long-term value creation. At the University of Phoenix, our mission remains clear to expand access to higher education that delivers relevant career aligned skills for working adults. The students we serve reflect that mission. As our students balance work, family and education, we remain focused on meeting their needs through flexible programs, strong academic outcomes, and a personalized student experience. Turning to the first quarter, we delivered a solid start to the year with financial performance consistent with our expectations and results that reinforced the full year outlook we provided on our November earnings call. First quarter revenue grew 2.9% year over year with a 4.1% increase in average total degree enrollment to 85,600 students. Employer-affiliated enrollment continues to be an important contributor to overall enrollment growth and now accounts for approximately 34% of total enrollment, which is up from approximately 31% in first quarter 2025. Adjusted EBITDA increased 7.2%, reflecting continued revenue growth, enhanced productivity, and operational efficiency, while sustaining strong student outcomes. Our focus on student outcomes as well as execution and efficiency carries directly into how we approach AI and technology across the university. As we've discussed previously, we view AI as an important enabler of our existing strategies. And we apply it in a disciplined, deliberate manner, empowering our team to explore and evolve how we work in service of our students. Our approach centers on two priorities. First, we are preparing students to be AI fluent. As the workforce landscape continues to change rapidly, we are embedding AI into programs course content, and the learning experience so students build practical, career-relevant skills. We are equipping learners to use AI ethically and appropriately, understanding when AI adds value and when human judgment is essential. Second, we are leveraging AI as an institution to drive operational excellence. We are starting to use AI to remove friction, increase personalization, automate complexity, and unlock capacity. enabling us to focus on what truly matters. We are encouraged with our progress leveraging AI to improve outcomes across the student journey, with examples that include the use of AI assist in appointment setting and outreach in certain situations to improve enrollment conversion and retention, as well as several pilots we have in production leveraging large language models with our proprietary data to enhance our AI chat assistance in servicing our students 24-7, both inside and outside the classroom. Let's move on to regulatory updates. Last week, the negotiated rulemaking committee reached consensus on accountability measures related to changes enacted under the One Big Beautiful Bill Act. The proceedings were consistent with our expectations. No new material areas of risk were introduced during the process, and we are pleased we will now have an accountability framework that applies equally to all programs at all institutions. As part of negotiated rulemaking, the Department of Ed released preliminary program performance accountability metrics. Now, while this information is preliminary, we were encouraged that based on these informational program performance metrics, all University of Phoenix programs for which metrics were provided are passing. I'd also like to briefly address the cybersecurity incident involving our Oracle eBusiness Suite software platform, which was disclosed in our early December 8K. The university was one of numerous organizations, including other academic institutions, from which an unauthorized third party exploited a zero-day software vulnerability in Oracle EBS, TO OBTAIN CERTAIN PERSONAL INFORMATION WITHOUT AUTHORIZATION. THE SOFTWARE VULNERABILITY HAS SINCE BEEN REMEDIATED. THE INCIDENT DID NOT IMPACT OUR STUDENT AND ACADEMIC PROGRAMMING AND WAS ADDRESSED PROMPTLY. WE RECORDED 4.5 MILLION OF EXPENSE ASSOCIATED WITH THIS INCIDENT, PRINCIPALLY REPRESENTING COSTS TO NOTIFY THE AFFECTED PARTIES, FEES FROM THIRD PARTY CYBERSECURITY FIRMS, LEGAL FEES AND OTHER EXPENSES RELATED TO THE INCIDENT RESPONSE. While we expect to incur additional related expenses in future periods, we maintain a comprehensive cybersecurity insurance policy, subject to customary deductibles, exclusions, and limits. Reflecting confidence in the durability of our cash generation, we announced the declaration of our inaugural regular quarterly cash dividend of approximately 21 cents per share of common stocks. which was approved by our board of directors and is consistent with the dividend amount we outlined during the IPO process. This decision underscores our disciplined approach to capital allocation and long-term value creation, while continuing to invest in our students, programs, and growth initiatives. As we move into the second quarter of fiscal 2026, our focus remains on disciplined execution and investing resources intentionally as we balance growth, student success, and financial performance. We started the year on solid footing and are well positioned to continue executing against our strategic priorities and are guided by our mission to enhance the learner experience and strengthen engagement and retention to support adult learners in achieving meaningful educational and long-term career outcomes. I'll now turn the call over to Blair to walk through our financial results in more detail.