"The financial results for National Education Company for the period ending April 30, 2026 (nine months) showed strong growth supported by a 10% increase in student enrollment to reach 35.2 thousand students, with quarterly revenues jumping by 15% and net profit increasing by 19%. The period witnessed an accounting transformation based on the directives of the Saudi Organization for Certified Public Accountants (SOCPA) by recognizing revenues based on 'school year days' instead of 'financial year', while continuing to face expansion cost pressures due to borrowing to purchase land in strategic locations in Riyadh and Jeddah, and forming a provision for expected credit losses."

These results and record numbers opened the door for financial analysis and scrutiny by students of Al-Yamamah University, to dissect the relationship between accounting changes and actual operational performance, and to explore avenues for financial sustainability.

Real Growth and Asset Development

Student "Ghada Alsarheed" @Ghada Alsarheed opened the analysis with a reading on brand strength and investment future, stating: "In my opinion, we can think of several points as a starting point; we can consider the growth to be real with a 10% increase in students, and the revenue jump confirms that the 'brand' is strong and desirable in the market. When we look at the second point, the accounting adjustment is smart to change the way profits are calculated, enhancing transparency and eliminating fluctuations in numbers between terms, without any impact on total annual profits. The third and most important point, the pressure on expenses is a healthy action for a temporary decline in some profits caused by loans to purchase land in strategic locations (in Riyadh and Jeddah), which is an excellent investment for the future and a way to capture market shares. Therefore, we can think of ways to increase profit and reduce loss in the long term, such as utilizing school buildings in the evening for various business activities, distributing the advertising budget throughout the year instead of pumping it all in August, and possibly partnering with financing companies to allow parents to pay in installments, ensuring the school receives immediate cash and avoids debts, and collaborating with other entities to ensure the benefit of students and parents across all sectors and guarantee their rights, so that all parties are at a good level in all aspects, and to ensure a learned, cultured, and united community striving to achieve ambitious goals."

Operational Strength and Return on Investment

On his part, student @Fahad Al-Tayeb focused on the essence of operational performance, stating: "I see that the results of National Education reflect a clear operational strength, as the 10% growth in student numbers is the real driver of value, not the accounting change itself. Adjusting the revenue recognition method based on school year days is a positive step to improve the quality of comparison between periods and reduce seasonal distortions, but a conscious investor should focus on operational growth and cash flows more than the impact of quarters from temporary accounting adjustments. As for the expansion through borrowing in Riyadh and Jeddah, I see it as a logical decision if the lands are in strategic locations and capable of accommodating future demand for private education. It is true that the cost of financing has pressured profits currently, but the essence lies in the return on invested capital over the coming years. The real challenge is not in the borrowing itself, but in the speed of operating new projects and converting them into capacities that yield returns exceeding the cost of financing. To maintain profitability in the future, I see that education companies need to expand into supporting educational services, digital transformation, and improve operational efficiency and energy and procurement management, rather than relying solely on raising tuition fees, because the quality of education is the foundation that builds competitive advantage in the long term."

Quality of Reports and Management of Credit Risks

Student "Fay Aldossari"@Fay Aldossari participated in the discussion addressing the quality of financial statements and innovative solutions, stating: "The shift to adopting 'school year days' is a leap in financial reporting quality; it may eliminate 'false seasonality' resulting from overlapping holidays, and links revenues to actual operations, providing quarterly statements with higher reliability. Regarding individual investor awareness, an individual investor may temporarily face difficulty in separating the accounting impact from actual operational performance, highlighting the role of analytical reports in clarifying that the change is an organizational accounting adjustment and does not affect total annual profits. Despite the current pressure of financing expenses on profits, borrowing to purchase strategic lands (Riyadh and Jeddah) is a long-term financial efficiency allocation; the education sector is driven by 'capacity and location', and sacrificing short-term profitability ensures a sustainable market share in the future. I see that innovative solutions for financial sustainability are asset utilization through investing in school facilities outside official hours (evening academies, camps) to create additional income streams, and activating operational automation through digitizing administrative processes to reduce overhead costs and gradually compensate for the decline in wage support, and managing credit risks by implementing strict collection policies and offering incentives for early repayment to limit the growth of provisions for receivables."

Sustainable Demand and Key Indicators

In the same context, student "Rimas Almashali"@Rimas Almashali observed the strategic dimensions of performance, confirming: "The 10% growth in student numbers is the most important indicator in the results, as it reflects the strength of demand for the company's services and the sustainability of operational growth away from temporary accounting effects. Additionally, applying the revenue recognition mechanism based on school year days contributes to providing a fairer picture of quarterly performance, but a conscious investor should focus on key operational indicators such as student growth, revenues, and cash flows, not just the impact of accounting changes. As for the expansion in Riyadh and Jeddah despite high financing costs, I see it as a long-term investment in a market with increasing demand for private education. The real challenge remains the company's ability to achieve returns exceeding the cost of financing and to convert this expansion into added value for shareholders in the long term."

Quality of Growth and Sustainable Cash Flows

Student "Ghadah Alwallan"@Ghadah Alwallan added other dimensions regarding profit quality, stating: "The most striking point to me is the growth in net profit despite rising financing costs and a decline in some support sources; in my opinion, this reflects the robustness of the company's operational performance, but it is important to monitor receivables and credit provisions in the coming periods, as growth quality is not measured by profit increase alone but by the company's ability to convert this growth into sustainable cash flows. Additionally, the success of the expansion in Riyadh and Jeddah will not be measured by the size of the investment alone, but by the company's ability to achieve returns that exceed the cost of financing in the future."

Actual Activity and Allocation Efficiency

Student "Jumana Alshehri"@Jumana Alshehri shared an analytical perspective focusing on the financial structure, stating: "I see that adopting revenue recognition based on school year days is a positive step as it makes quarterly results more accurate and better reflects actual activity of the schools, limiting distortions resulting from differing holidays and academic calendars. However, investors should not rely solely on net profit but also look at the growth in student numbers and revenues to understand the true operational performance. As for the expansion in Riyadh and Jeddah through borrowing, I see it as a strategic decision from a long-term perspective, especially with the growth in student numbers and rising demand for private education, even though it pressures current profits due to high financing costs. The decision is efficient in capital allocation if the future returns from the projects exceed the cost of borrowing. To maintain profitability amid rising financing costs and declining support from 'Taqat', the company can focus on enhancing operational efficiency, leveraging educational technologies and digital transformation, in addition to diversifying revenue sources from educational programs and activities, which supports growth and maintains the quality of education."

Balancing Expectations and Sustainable Growth

On her part, student @Shahad Al-Muhaysin observed the relationship between profits and enrollment numbers, stating: "In my opinion, one of the most positive points in the results is that profit growth coincided with an increase in student numbers, as this reflects an improvement in the core activity of the company and not just an accounting or exceptional effect. As for the change in the revenue recognition method, I see it helps provide a more accurate picture of actual performance across different periods, even if it causes some differences in quarterly comparisons in the short term. Regarding expansion, it is true that financing has raised some current costs, but if the new projects can attract larger numbers of students in the future, the current pressure on profits may be part of building larger growth in the coming years. Ultimately, sometimes the most important figure is not just net profit, but the company's ability to achieve sustainable growth while maintaining service quality and parental trust."

Management Vision and Operational Reality

Student "Yousef Fares"@Yousef Fares also participated in the analysis from a strategic perspective, stating: "In my opinion, the most striking point to me is not the growth in revenues or profits, but that the company continues to expand despite rising financing costs and a decline in some support sources. This reflects management confidence in the existence of future demand capable of compensating the current pressure on profitability. From an accounting perspective, I see that adopting revenues based on 'school year days' is a positive step as it makes quarterly results closer to operational reality and reduces distortions resulting from holidays and academic calendars; therefore, it is important for investors to focus on core operational performance rather than temporary accounting effects. Regarding expansion, borrowing to purchase land in Riyadh and Jeddah may pressure short-term profits, but it could be a highly efficient decision if the company succeeds in converting this expansion into a sustainable increase in student numbers and future returns."

Continuous Demand and Operational Challenge

Student @Thanaa Al-Shaib concluded the student perspective with a clear evaluative view, stating: "I see that the most attention-grabbing aspect is that the growth in student numbers remains strong, which gives the impression that continuous demand for the company's services is going well. As for the accounting change, I believe it helps to show performance more accurately during quarterly periods, but investors should focus on revenue growth, student numbers, and operational cash flows more than on the impact of the accounting change itself. Regarding expansion, it is true that it raised financing expenses and pressured current profits, but if the new locations in Riyadh and Jeddah are well-studied and serve areas with high demand for private education, this pressure may be temporary compared to better returns in the long term. The real challenge is to maintain the quality of education and operational efficiency while continuing to expand, as growth in the number of schools alone is not enough if it does not reflect on future profitability."

Expert Opinion:

Professor Abdulaziz Khrais clarifies the unprecedented historical figures for the company, stating: "National Education Company recorded its highest profits in its history at 67.60 million riyals for its third quarter of the financial year, and the profits for the first nine months ending April 30, 2026, amounted to approximately 168.2 million, an increase of +8.5% compared to the same period last year."

Khrais adds: "The company stated that the increase in revenues for the period contributed to the growth in net profit, as the growth in the number of students enrolled in the schools affiliated with the company by 10% from 31.9 thousand students in the same period last year to 35.2 thousand students during the current period is the main reason for that. The company mentioned that revenues were affected in the growth process as the current period's revenues were based on 259 days while last year's were based on 265 days."

Khrais concludes by reminding of the company's significant weight: "It is worth noting that National Education Company is the largest education company in the market with a market value of 5,547.01 million riyals, with a total of 43 million shares priced at 129 riyals."