Academy of Learning Swings to 3.4M SAR Profit

Riyadh, Saudi Arabia — Academy of Learning Co. returned to profitability in the third quarter of fiscal 2026, posting a net profit of 3.4 million SAR after a net loss of 13 million SAR in the same quarter a year ago. Revenue nearly tripled year-on-year, driven by a surge in corporate contract work and the first-ever contribution from its new schools subsidiary.

The turnaround is striking on paper but comes with an important caveat. The schools business — Inspired Learning Private Schools Company — dragged group net profit down by 9.3 million SAR in its debut operating quarter, bearing full costs against only partial revenue. Strip that out, and the core training business earned 12.7 million SAR at a 17.8% net margin, versus a loss of 13 million SAR a year earlier.

Quarterly Breakdown

Revenue reached 74.4 million SAR this quarter, up 181.9% from 26.4 million SAR in Q3 of the prior year. Sequentially, however, revenue fell 13.3% from 85.8 million SAR in the previous quarter — a drop the company attributes to the July–September summer slowdown, a seasonally soft period for training and education businesses.

Gross profit climbed to 36.8 million SAR from just 4.4 million SAR a year ago, pushing the gross margin to 49.4% from 16.8%. Operating profit reached 13.5 million SAR, compared with an operating loss of 6.3 million SAR in the year-earlier quarter. Quarter-on-quarter, operating profit fell sharply from 35.0 million SAR, reflecting both the seasonal revenue dip and the school’s startup losses.

Key Drivers

• Corporate contract revenue jumped to 51.5 million SAR from just 1.9 million SAR a year ago, accounting for 69.3% of quarterly revenue versus 7.1% previously.
• Inspired Learning Private Schools contributed 3 million SAR in revenue in its first operating quarter, included within individual-segment revenue.
• The expected credit loss charge fell to 2.9 million SAR from 3.8 million SAR, easing the bottom-line pressure modestly.
• A remeasurement gain of 1.4 million SAR on derivative financial instruments provided an additional lift to net profit.
• The schools subsidiary recorded a net loss of 9.3 million SAR — including 3.7 million SAR in lease finance charges — as it carries full operating costs in its opening quarter against limited revenue recognition.

What This Means for Investors

• The year-on-year profit swing is real, but the gap between reported group profit (3.4 million SAR) and core training profit (12.7 million SAR) will persist until the schools business matures and reaches scale.
• Corporate contract revenue is now the dominant revenue line. Its sustainability and renewal rates will be the most important numbers to watch in coming quarters.
• Shareholders’ equity rose 24.2% year-on-year to 163.1 million SAR, suggesting the balance sheet is strengthening even as the subsidiary ramps up.
• Earnings per share recovered to 0.03 SAR from negative 0.10 SAR a year ago — a directional improvement, but still modest given the scale of the revenue growth.

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THE SAUDI STANDARD’S VIEW: ACADEMY OF LEARNING’S TURNAROUND TESTS INVESTOR PATIENCE

Academy of Learning’s return to profit marks a genuine structural inflection point, not merely a one-quarter statistical anomaly. The numbers beneath the headline, however, demand that investors distinguish between the strength of the core business and the near-term cost of building a second one — a distinction that will define this stock’s trajectory over the next four to six quarters.

• CORPORATE CONTRACTS ARE THE REAL STORY

The explosion in corporate contract revenue — from a negligible base to more than half of total quarterly revenue — represents a fundamental repositioning of the business model, away from retail learners toward institutional clients. This shift carries higher deal concentration risk but also the potential for recurring, predictable revenue streams that the market typically rewards with premium valuations. Renewal rates and pipeline visibility will be the metrics that separate a re-rating from a temporary spike.

• THE SCHOOLS SUBSIDIARY: DRAG TODAY, OPTIONALITY TOMORROW

Inspired Learning Private Schools generated a loss nearly three times the size of its revenue contribution in its opening quarter, a classic profile of a capital-intensive education startup bearing infrastructure costs before enrollment reaches breakeven scale. Investors should model this drag persisting for at least two to three additional quarters as the school builds its student body. The critical question is not this quarter’s loss but the timeline to operational self-sufficiency and what enrollment milestones will signal it.

• MARGIN QUALITY IN THE CORE BUSINESS IS EXCEPTIONAL

A 17.8% net margin and 49.4% gross margin in the training segment, achieved during a seasonally weak summer quarter, signals genuine operational leverage and disciplined cost control rather than margin inflation from one-off items. The sequential revenue decline confirms seasonal patterns are real, but the fact that the business remained solidly profitable through its softest period is a meaningful indicator of underlying earnings quality. This is the benchmark against which future quarters should be judged.

• BALANCE SHEET STRENGTH PROVIDES STRATEGIC ROOM

Shareholders’ equity expanding by nearly a quarter year-on-year while simultaneously funding a school launch demonstrates that growth is not being financed recklessly. A stronger balance sheet affords management the flexibility to absorb the subsidiary’s ramp-up costs without being forced into dilutive capital raises or constraining debt. For equity investors, this financial discipline is as important as top-line momentum when assessing long-term risk.

Academy of Learning’s transformation aligns directly with Vision 2030’s human capital agenda, which identifies workforce development and private education expansion as pillars of economic diversification. A training company that has pivoted toward corporate clients while simultaneously entering the private schools market is, in structural terms, positioned on the right side of Saudi Arabia’s most durable demographic and policy tailwinds. The near-term earnings noise from the subsidiary launch is the price of building a business model built for the decade ahead.