ABSTRACT

Purpose Profit margin is one of the important ratios defining private schools’ financial performance. The accounting value indicates the percentage of profits during an accounting period. Although some studies have investigated the profitability of private schools in Saudi Arabia, very few have examined the connection between profit margins, reinvestment, and educational outcomes. This study evaluates the effects of profit margins on the performance of private schools in the Kingdom of Saudi Arabia, a sector undergoing rapid transformation under Vision 2030 (Euro Group Consulting, 2025). Methodology. A non-experimental qualitative research design was employed to explore the perspectives of head teachers (n = 12) and experts (n = 12) in educational management in Riyadh City on the study topic. Study findings showed that while the Saudi government allows private schools to make fair and reasonable profits, unregulated withdrawals, and delays in receiving fees from parents restrict the ability of schools to reinvest in key areas such as infrastructure, teacher training, and student support. Results. The research highlights that profit margins, if effectively regulated and strategically reinvested, can serve as both a financial measure and a policy tool to strengthen competitiveness, drive sustainable growth, and improve educational outcomes. Implications for research and practice. This study therefore contributes new insights by positioning profit margins not only as indicators of financial performance but also as mechanisms for ensuring alignment between private sector growth and Saudi Arabia’s educational development goals. Future research on the effect of profit margins on private schools’ academic performance in Saudi Arabia should extend these findings by quantitatively assessing the impact of profit reinvestment on student achievement and institutional sustainability.