Earnings Call Transcript - PXED Q2 2026

Operator, Operator

Good afternoon, and welcome to Phoenix Education Partners' Second Quarter Fiscal 2026 Earnings Conference Call. I would now like to turn the call over to Beth Coronelli, Vice President of Investor Relations. Please proceed.

Elizabeth Coronelli, Vice President of Investor Relations

Thank you. Welcome to the Phoenix Education Partners' Second Quarter Fiscal 2026 Earnings Conference Call. Speaking on today's call are Chris Lynne, our Chief Executive Officer; and Blair Westblom, 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 statements after this presentation. The risks related to these forward-looking statements are described in our filings with the SEC, 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 on the call will focus on comparisons to the prior year period. We also direct you to the supplemental earnings slides provided on the Phoenix Education Partners' website. I'll now turn the call over to Chris.

Christopher Lynne, CEO

Thank you, Beth, and good afternoon, everyone. We appreciate you joining us. Today, we'll walk through our results for the second quarter of fiscal 2026 and the continued progress we're making on our strategy. Guided by our mission, we remain focused on advancing student success through flexible, career-relevant education for working adults. Our students balance professional and personal responsibilities as they pursue their education and our strategy remains centered on supporting their success through personalized technology-enabled programs. Fiscal 2026 also represents an important milestone for the University of Phoenix. Later this year, we will celebrate our 50th anniversary, marking 5 decades of serving working adult learners while continuously adapting to the evolving needs of the workforce. Our commitment to student satisfaction is reflected in the recent Encoura Ruffalo Noel Levitz priorities survey for online learners, a national study spanning 150 institutions and approximately 90,000 learners, which shows consistently high satisfaction among currently enrolled online students. The university administered through the Noel Levitz platform, the survey to a random sample of 20,000 actively enrolled associate, undergraduate, graduate and doctoral students representing each college and degree level with approximately 2,500 students responding. The university performed above the national averages across all 26 measured attributes, with 85% of our students reporting being very satisfied or satisfied with their online university experience compared to 73% of students in the national benchmarked institutions. These results combined with strong retention results, underscore our commitment to delivering strong student outcomes and ensuring that working adult learners develop skills that translate directly into their careers. Turning to our results. The second quarter reflects continued progress across our key priorities, enrollment growth driven by record retention, margin expansion and a strong balance sheet that gives us the flexibility to invest in students and return capital to shareholders, all underscoring the durability of our model and commitment to student success. For the quarter, average total degreed enrollment was up 1.8%. Net revenue was down 0.4% and adjusted EBITDA was up 7.8% from the prior year. Average total degreed enrollment was driven by strong retention trends. Our retention rate from the most recent annual cohort was 76.6%, up approximately 500 basis points from the prior year and significantly improved from the 59.7% retention rate from the annual cohort ending in 2017 prior to our transformation. This sustained progress reflects the continued disciplined execution of initiatives across the student life cycle aimed at enhancing engagement, persistence and ultimately, student outcomes. Net revenue was in line with expectations and adjusted EBITDA outperformed as a result of disciplined cost management and lower bad debt expense. Our employer-affiliated or B2B channel continues to be a meaningful growth driver. Employer-affiliated students represented 35% of total enrollment in the quarter, up from 31% in the comparable period in 2025, reflecting continued expansion of both existing and new employer relationships. This channel now represents over 1/3 of our total enrollment and helps reinforce the durability of our revenue as B2B students typically have higher retention. We are seeing increasing demand from employers seeking to upskill and reskill their workforce, and our flexible career-relevant programs are well positioned to meet that need. We align our curriculum to in-demand skills, with students building verified job-relevant capabilities throughout their coursework, an approach that differentiates us with both employers and individual learners. We also enable our students and alumni to showcase these capabilities through shareable employer-informed skill badges and have now issued over 1 million of these digital badges to date. Complementing our B2B momentum, we are continuing to invest in technology and artificial intelligence to better serve students and employer needs. We are making meaningful progress deploying AI across the university. Examples include an AI-assisted student onboarding experience, delivering 24/7 support for students and faculty, increasing adviser productivity, expanding our software development capacity and driving greater efficiency in credit evaluation. We are using AI-driven personalization to enhance engagement and student support as well as improve conversion in our marketing and enrollment funnel. We believe these initiatives are contributing to our performance and will continue to support margin improvement. We are also investing in how the university shows up across the next generation of search and discovery platforms. As social media and AI increasingly shape how prospective students explore and evaluate their education options, we continue to optimize our presence across these emerging interfaces and ensure our outcomes-focused content reaches students wherever they are and wherever they begin their journey. We believe that our response over time has been effective as evidenced by our leading brand position across marketing platforms. While underlying demand for our brand remains strong, we experienced changes to search algorithms, which affected our marketing funnel. As we've done consistently for years, we proactively leveraged our leading brand, targeted content and digital expertise to adapt and optimize within the shifting marketing environment. As we headed into the third quarter, we have continued to see healthy underlying demand and are encouraged by the early signs of improvement in the marketing funnel from our proactive initiatives and our ability to maintain our brand leadership position. We also believe the university is well positioned for the needs of today's workforce. We are in the early stages of what many are calling the great reskilling of the American workforce. Estimates suggest that 60% of the global workforce will need to acquire new skills by 2030 to remain competitive in an AI-transformed economy. We believe the majority of jobs in the future will be held by workers fluent in AI. The workers most affected by this change are mid-career adults who need flexible career-relevant education that fits around their professional and personal lives, the exact population this university has served for 5 decades. We have been committed to the AI fluency of our students since we adopted the ethical use of AI by all of our students in our skills-aligned curriculum approximately 2.5 years ago. And we will continuously adapt our curriculum and thoughtfully add AI skill development related to specific disciplines and careers that are rapidly evolving in their use of AI. Our progress is demonstrated by the reporting from 79% of the students surveyed in the most recent Ruffalo Noel Levitz priority survey for online learners that they are satisfied with their confidence applying AI tools in real-world scenarios. As we enter the second half of the year, underlying demand and retention remain strong, we remain focused on disciplined execution and thoughtful investment to support student outcomes and financial performance. Our approach continues to be guided by our mission to enhance the adult learner experience, including strengthening engagement and retention. With that, I'll turn it over to Blair.

Blair Westblom, CFO

Thank you, Chris. Net revenue for the second quarter was $222.5 million, down 0.4% compared with $223.4 million in the prior year period, reflecting the impact of discounts. Average total degreed enrollment increased 1.8% for the second quarter to approximately 82,600 students compared to 81,100 in the prior year, driven by strong retention trends. Net income attributable to Phoenix Education Partners was $10.8 million or $0.28 per diluted share compared to $16.1 million or $0.43 per diluted share in the prior year. The decrease was primarily driven by higher share-based compensation expense associated with our IPO. Adjusted EBITDA for the second quarter increased 7.8% to $34.8 million compared to $32.3 million in the prior year. Adjusted diluted earnings per share was $0.58 in the second quarter compared to $0.56 in the prior year. Adjusted EBITDA margin for the second quarter expanded to 15.7%, up from 14.5%, driven by lower bad debt expense, primarily due to higher retention, partially offset by an increase in costs attributable to being a public company. For the first 6 months of fiscal 2026, net revenue was $484.5 million, an increase of 1.3% compared to $478.1 million in the prior year. Average total degreed enrollment was up 2.9% for the first 6 months to approximately 84,100 students compared to 81,700, reflecting continued strength in retention. Net income attributable to Phoenix Education Partners was $26.2 million or $0.68 per diluted share compared to $62.5 million or $1.66 per diluted share in the prior year, with the year-over-year decrease primarily driven by share-based compensation expense associated with our IPO. For the first 6 months, adjusted EBITDA increased 7.4% to $110 million compared to $102.4 million in the prior year, and adjusted diluted earnings per share was $1.97 compared to $1.92 in the prior year. Adjusted EBITDA margin for the first 6 months increased from 21.4% in the prior year to 22.7% in the current year, representing a 130 basis point improvement. These results reflect the increase in net revenue as well as lower bad debt expense, primarily due to higher retention and lower financial aid processing costs. We continue to maintain a strong balance sheet with substantial liquidity and no outstanding debt. As of February 28, 2026, total cash and cash equivalents and marketable securities were approximately $252.1 million compared to $194.8 million at the end of the prior fiscal year. The increase was primarily driven by approximately $80 million of cash generated from operating activities, partially offset by approximately $10 million of capital expenditures and previously announced dividend payments. Our capital allocation priorities remain unchanged: investing in student success and our technology platform, maintaining a strong balance sheet and returning capital to shareholders. Consistent with these priorities and our belief in the long-term value of our stock, today, we announced the authorization of a $50 million share repurchase program by the Board of Directors. This authorization provides flexibility within our capital allocation framework and the ability to manage dilution effectively over time. During the quarter, we paid a dividend of $0.21 per share. And today, we announced another quarterly dividend of $0.21 per share payable in May. We expect to continue to pay quarterly dividends of approximately $0.21 per share or approximately $0.84 per share annually, subject to Board approval. We will also continue to actively evaluate M&A opportunities that would be complementary to our existing platform and align with our capital allocation strategy. With respect to our fiscal 2026 outlook, we are reiterating our net revenue guidance of $1.025 billion to $1.035 billion and adjusted EBITDA guidance of $244 million to $249 million. As discussed, underlying demand and retention remain strong. We are maintaining our net revenue guidance, but currently expect to trend toward the lower end of the full year range, reflecting the near-term marketing dynamics discussed. Given our execution to date, we are confident in our adjusted EBITDA outlook and believe we are trending toward the upper end of our guided range. This reflects disciplined cost management and efficiencies driven by our strategic and operational initiatives, including AI and technology-enabled capabilities, which we expect to support margin expansion over time. We operate from a position of financial strength, supported by strong cash generation and disciplined capital allocation. We are confident in the long-term durability of our business and remain focused on execution while continuing to invest in student success and long-term value creation. I'll now ask the operator to begin the question-and-answer session.

Operator, Operator

Your first question comes from the line of Jasper Bibb with Truist.

Jasper Bibb, Analyst

I wanted to follow up on some of the marketing themes you discussed. Can you maybe give a little bit more detail on the trends you've seen over the past couple of months on starts or application growth as the company navigated the channel shift you discussed from Gen AI to search or search AI, I'm sorry.

Christopher Lynne, CEO

Yes, this is Chris. It's good to hear from you. We've been adapting to changes in online search for a while now. Recently, we experienced another algorithm shift in AI search on Google, which affected how prospective students are approaching their search process. We acted quickly and collaborated with Google, which is something we've been skilled at doing for years. We've learned that the AI summaries on Google now heavily rely on YouTube as a primary source. For years, we've been the leading company in our sector on social media, and we've created a lot of valuable content that has strengthened our position. One of our strategies was to migrate much of that content to YouTube. These adjustments are part of the improvements we've seen recently as we enter Q3, aligning more closely with our expectations for the year. Regarding applications, the impact was felt during our January enrollment period. I would describe the current situation as having a healthy demand at the start of the process. We notice changes in how that demand reaches the university across various channels. We are adapting to these changes to effectively meet that demand. Overall, we believe we have managed these shifts well over the years and are pleased with the trends headed into Q3.

Jasper Bibb, Analyst

That all makes sense. And I'm not sure how much you can address this, but I think the education department changed the rules around private equity ownership in this space. The company's majority shareholder is obviously a private equity firm. Does that change anything on how they think about their investment or timeline there that they've conveyed to you?

Christopher Lynne, CEO

The short answer is no. And I think the changes you're referring to are related to the program participation agreements. And we just entered into a 6-year agreement last year. And based on any of the guidance received, we don't anticipate any impact.

Operator, Operator

Your next question comes from the line of Alex Paris with Barrington Research.

Alexander Paris, Analyst

Congrats on the outperformance in the quarter. Just to clarify your answer on the previous question. Chris, you said coming into the second quarter, these changes were made at online search, and it had an impact on Q2 enrollment?

Christopher Lynne, CEO

Yes. It was ahead of the January enrollment season later in January, we saw some impact, which ended up being, we believe, a result of an algorithm shift in Google's AI overviews. When we were seeing that, that was in the late or early winter, so November, December timeframe. Early on, it looked like some seasonality that we were trying to understand, we later recognized that the algorithms did shift and so the way we responded to that was multifold. We had a lot of responses, really just continuing to do a lot of the same things that we've been doing for years. I think one of the more material changes we made was learning that Google had shifted to YouTube as being a primary source for the AI overviews. And despite the fact that we were very strong in content across social media, we weren't where we can be with YouTube. So we made some large shifts in the January and February timeframe to address that. And when I mentioned that we're seeing trends return back to trends we expected for the year, that began to occur back in early March.

Alexander Paris, Analyst

Okay. Got you. I just wanted to clarify that. So you saw the initial impact early in the second quarter, you made some changes and then early here in the third quarter, month of March, you're seeing some improvement?

Christopher Lynne, CEO

Yes. I would say the impact was noticeable really in the later part of the second quarter, but the algorithm shift happened in the early part of the second quarter.

Alexander Paris, Analyst

Okay. Got you. So the shift early in the quarter, the impact late in the second quarter and then here early in the third quarter, you're seeing some improvement in response to some of the changes that you've made, you think?

Christopher Lynne, CEO

Yes. I mean we've seen continuing through all of this, we've seen strong demand for our brand, which is the very top of the funnel. One of the most effective ways of looking at that is just the inquiry searches for our brand on Google. And then the next measurement we look at is how that demand comes to us on our website, and it comes from various channels. And we've seen strength in how that inbound demand is coming to us. That's returned back to what I would call normal relative to our recent history here in the early part of Q3.

Alexander Paris, Analyst

Got you. And then so the second question is for Blair in your comment regarding revenues and the guidance for the balance of the year, you said that revenue should trend to the lower end of the full year range because of some of these marketing issues?

Blair Westblom, CFO

Yes, that's right, Alex. As discussed, we would expect revenue to come in, in the lower part of the range just given the marketing dynamics that we've observed. Chris, is there anything you'd like to add to that?

Christopher Lynne, CEO

Yes. I mean the way we looked at it is we took the best information available. We didn't feel based on that, that we should change the range, but we did want to guide to the lower end given these dynamics we saw in Q2.

Alexander Paris, Analyst

And again, it sounds like conservatism, given you said that things have kind of returned to normal here in, I don't know, month of March or early April?

Christopher Lynne, CEO

I would describe it as prudent. I believe you will come to understand the approach of this management team over time. We strive to be cautious. Additionally, there is always a time lag to consider. When demand arises, it moves through the process gradually. Thus, I think being cautious is wise, as we are observing the necessary indicators, but we are also aware of the seasonal patterns regarding when students actually start their classes. We took all of this into account when providing our guidance.

Alexander Paris, Analyst

Okay. That's great. And then just to button it up. Adjusted EBITDA, on the other hand, is trending towards the upper end of the full year range, and that's due to cost management as well as lower bad debt related to the better retention. Do I have that right?

Christopher Lynne, CEO

Yes, absolutely. It's also a reflection of the excellent work our teams are doing by leveraging our technology and AI solutions, which has been a significant part of our story for years. We're experiencing good traction in achieving efficiency. As mentioned in our opening remarks, we've been effective in improving student outcomes while reducing the cost of delivering those results. We continue to see our ability to not only improve retention but also enhance efficiencies in generating these results. We believe we will maintain these types of efficiencies for the remainder of the year.

Operator, Operator

Your next question comes from the line of George Tong with Goldman Sachs.

Keen Fai Tong, Analyst

Can you provide an update on your fraud prevention initiatives and your estimate of how much of an impact that is currently having on enrollment performance?

Christopher Lynne, CEO

George, yes, thanks for the question. Very similar to last quarter. We feel really good about the infrastructure that we put in place last year. If you recall, we did see a lot of friction as we were putting the infrastructure in place. And then in Q4 of last year, we made a choice to include some of the analytical detection and verification processes at the top of the funnel. And we saw a lot of friction in Q4. That improved significantly coming into Q1. It's improved even further into Q2. What I would say today is we have a very strong, agile system of detection based on strong analytics and prevention with verification, fraud detection with our bank accounts that's working very well. We think that this is doing a couple of things. While there is a lot of UEA activity in the marketplace, we are seeing evidence that as it relates to us, while we still see a lot of volume try to get into our funnel, it's dissipated quite a bit. So we do think that our systems of controls have deterred the volume from trying to penetrate our university as often. And we've gotten better and better at that balance of reducing friction significantly for well-intended students so that they can have a normal process of working their way through the enrollment process. So we feel really good about where we're at. We have it under control through Q2. It's a day-to-day thing, but our systems are great. And I would say there is a little bit of friction that will exist as long as this activity exists in the marketplace, but it's not something that we consider material to date.

Keen Fai Tong, Analyst

Got it. That's helpful. And then your retention rate expanded quite a bit, 500 bps year-over-year in the quarter. Can you elaborate on the initiatives that drove this level of improvement and if this rate of improvement is sustainable or more onetime in nature?

Christopher Lynne, CEO

Thank you for the question. We're in the ninth year of a transformation that we’ve been discussing. We’ve seen consistent improvement in our retention rates, which will ultimately enhance our graduation rates. This involves multiple factors. We’ve developed a digital-first platform that utilizes our data to effectively support our students when and where they need it. We have many solutions focused on eliminating friction and achieving better outcomes for our students. Notably, our mobile-ready courses have shown significant growth, as early successes in these courses boost student confidence and lead to higher persistence and graduation rates. We've also seen positive impacts from our previously mentioned dispersed by course approach, along with many other initiatives. We're excited about leveraging AI technologies to further improve retention and student satisfaction while reducing costs. We are accelerating various AI initiatives, from assisting with student onboarding to streamlining processes that reduce support cycle times while enhancing our effectiveness. For instance, we have improved our transcript evaluation cycle times by integrating AI, which has made these processes more efficient, as well as in summarizing student interactions to enhance support. In terms of our significant 500 basis points improvement in undergraduate programs for fiscal '25, we are proud of this achievement; such dramatic improvements are rare. Typically, a 100 basis point increase in any year is considered substantial. However, we do expect to continue improving our retention rates going forward, which is a vital aspect of our strategic focus.

Operator, Operator

Your next question comes from the line of Griffin Boss with B. Riley Securities.

Griffin Boss, Analyst

I want to return to the topic of retention, particularly regarding the growth of employer-affiliated students in the B2B segment. We've discussed this a lot in the past. I'm interested in how you've grown from 31% last year to 35% of total enrollment. Can you share your thoughts on where you see that percentage going or what your goals are? This strategy is crucial for Phoenix in terms of retention. However, you've mentioned in previous quarters that overall revenue growth may lag behind enrollment growth due to various factors you've mentioned today, including B2B. Will this trend continue past the third quarter? Where do you currently stand with your B2B initiatives?

Christopher Lynne, CEO

Thank you, Griffin. I want to cover two aspects of your question. First, our direction with B2B growth, and second, the connection between revenue and enrollment. Regarding B2B growth, this has been a crucial part of our long-term strategy. We believe we are well equipped to address the reskilling needs of employers and working adult students. Our account management teams expanded by about 25% this year, which is benefiting us by enhancing growth within existing relationships and fostering new employer partnerships. We anticipate sustained growth in this segment. While we can't provide a long-term outlook, a significant majority of our students are working adults, and we have over 2,500 employer alliances that represent a substantial share of the employed adult market, indicating strong potential for growth in this channel. As for the relationship between revenue and enrollment, we do offer a discounted rate for B2B students, which aligns with our expectations. B2B students have higher retention rates, contributing to a stable revenue stream, and they exhibit comparable profitability characteristics to our B2C students. As this channel grows, it effectively reduces acquisition costs. While we are optimistic about this alignment, it's important to remember that last year we saw a higher volume of students participating in our risk-free period. This was unrelated to B2B, but a larger portion of those students chose to enroll without persisting past their initial courses. I mentioned this earlier because we anticipated that it would create an atypical relationship between enrollment and revenue this quarter and in Q3, which is not the case this year. We expect our current student mix to persist longer, but it is affecting our trajectory in Q2 and Q3, with a return to normal trends expected in Q4.

Operator, Operator

Your next question comes from the line of Jeff Silber with BMO Capital Markets.

Ryan Griffin, Analyst

This is Ryan on for Jeff. I had a question. I know business and IT are big program concentrations for you. I was wondering if you're seeing any shifting degree preferences from students as some of the newer students might be fearful about the potential Gen AI impact. I know we saw some of that in the fall clearinghouse data. So curious as it relates to your business.

Christopher Lynne, CEO

Yes, thanks, Ryan. We're closely monitoring that. What I want to emphasize is that we are confident in our multiyear investments to align our curriculum with career-relevant skills across all our programs. We are very satisfied with the range of our program offerings, including our business and IT programs. This alignment means that every course a student takes offers verified skills that correspond to those needed by employers today. Over the past 2.5 years, we've incorporated AI fluency into this skills-focused curriculum, and we believe this sets our programs apart in terms of skills alignment and relevance to current workforce needs. We're seeing this reflected in the growth of our B2B relationships, where we are enhancing existing partnerships and competing effectively against other universities and colleges. We believe this differentiation is a significant factor driving that growth, and our programs are all experiencing positive trends. A particularly strong trend is in health care and nursing, which has provided a boost to our health care programs. Health care employers make up the largest segment of our B2B portfolio at just under 30%, and we are witnessing growth in all our programs within that sector. Additionally, many of our offerings in business and IT are gaining interest, driven by demand from both employers and employees. Overall, we feel confident about the direction of the University of Phoenix's programs.

Ryan Griffin, Analyst

And I appreciate the color on the B2B enrollments and the strength of those relationships. I'm just wondering how you're thinking about the non-B2B degreed enrollments? And are you investing there? And how has that kind of been trending?

Christopher Lynne, CEO

Yes. So we have variability between B2C and B2B throughout the year. We're comfortable with the demand we're seeing across both programs, both channels. We think that if we're meeting the needs for employers and workers, we're meeting the needs for those that don't have benefits under employers and are working mid-career working adults. So we feel like that differentiation is helpful across B2C and B2B, and we feel like we see plenty of evidence of that in our demand framework.

Operator, Operator

Your next question comes from the line of Stephanie Moore with Jefferies.

Stephanie Benjamin Moore, Analyst

I wanted to appreciate all the feedback this afternoon. Maybe you could talk a little bit about the competitive landscape right now. You talked a lot about the investments that you've made, specifically kind of targeting from a marketing standpoint. But maybe just give us an update on just how you would characterize the pulse of the overall competitive landscape. And then as you think about your strategy over the course of the next 1 to 2 years, what we could expect to see as you continue to look to differentiate yourself?

Christopher Lynne, CEO

Yes. Thanks for the question. We have a very large addressable market, both students with some or no college, some college degree or some college credits that want to complete their degree and those that have no college credits and want to complete their degree. And for a lot of those students, we may not be competing with anyone except for motivating them to pursue getting skills that could advance their careers. So we tend to focus on what are the needs of those potential students that we can support. Students have a need for skills today. They want career-relevant skills that not just wait for a degree, but that they're getting skills along the way that have value in the workforce. We believe that we're delivering on that in a very differentiated way. Each course, they're getting skills in weeks, not years. That's one of our primary campaigns. And we don't have many competitors that can say the same thing based on the substance of what they deliver. And so we think that, that positions us very well to meet the needs. There's also other things that we do very well at saving time and money. We're very effective at helping students with previous college credits leverage those college credits to save time and money. So we make sure that we differentiate the experience that those students have and getting credit on the front end. The more effective we are there, the better we compete with other institutions like ourselves. There's a lot of flexibility, our empathetic support process is something that busy working adults who are a little bit cautious about pursuing college again. They see that as a very strong value proposition. So the more effective we are at telling people what we do really well and helping them understand how we do it better than our competitors tends to help us be effective in the marketplace. And we just continue to lean into those distinctions effectively in our marketing efforts.

Stephanie Benjamin Moore, Analyst

Got it. And just as a follow-up, I mean, I think we're all a society thinking about the way we use education is differently now with AI. So I guess maybe to wrap it up, I mean, do you feel like there's a strategy in which you can kind of advertise your approach not only to everything you just outlined, but that in Gen AI world, maybe how you pursue education could be different? I guess I'm just a high-level question if that is. Yes.

Christopher Lynne, CEO

I'm thrilled you asked it. Look, we think the evolution of AI is extremely powerful to our business model and how we serve our students. We talk a lot about that. But to answer your question, when you look at the workforce trends, what's existing today and where the world is going, and we talked about this in my opening remarks about this great reskilling as they call it, we're living that. I mean this is a rare moment where we're looking at our own institution and working on reskilling our entire employee base to help them leverage tools that magnify their ability to pursue the goals that we have. There's a lot of organizations like us that have a big vision. And the use of AI is powerful at a person level, at a workflow level and at a corporate level in helping institutions get to the visions that they have. So the entire workforce is going to need these skills in order to drive the goals of tomorrow. And we know that the workers that are fluent and are capable in using AI are going to have the jobs of tomorrow. We're extremely well positioned. We think this is a tailwind for the university. We adopted AI into our curriculum almost 2.5 years ago. We were a first mover here. Now all institutions are trying to figure out how to do this. Our students are gaining fluency in AI. We're getting deeper and deeper into looking at what our employer partners and industry councils are looking for in the workplace and building those technical skill needs into our program. So we think we're well positioned to help our students gain skills for tomorrow. We also think our differentiation is we understand the adult learners. So when you look at the learner today, more and more learners are becoming what we have served for almost 5 decades, an adult learner that is constantly looking to upskill that values the pursuit of a degree, but they're working, they have responsibilities along the way. AI has changed the game so much. The speed and movement of skills in the workforce is going to cause more and more learners to look like our learners, and we're well positioned to deliver value. And we know they want value along the way as well as through the degree, and we have a curriculum that offers them skills along the way as well as the degree. So we think we're very well positioned within the trends that we're seeing in the workforce today as it relates to the AI.

Operator, Operator

That concludes our question-and-answer session. I will now turn the call back over to Chris Lynne for closing remarks.

Christopher Lynne, CEO

Thank you. Our results this quarter reflect continued progress in executing our strategy. We remain confident in the strength of our mission, the resilience of our model and our ability to continue to deliver strong student outcomes. I want to thank our faculty and team members for their continued dedication to our mission and commitment to student success. Thank you for joining us today.