That's how I like to build my tools for personal use. Well, minus the encryption part, because it's for personal usage. But in theory, it should work.
Here's the tool I use to build the cli executables:
https://deneskellner.com/sw/rapidexe
Once you've "compiled" your php code, when the end-user starts the executable for the first time, it simply extracts all the dll files it needs to run the code.
It also "hides" the php source code from being readable with notepad. Even though I don't think it's that hard to decompile the executable, but still... That's where the encryption part comes into play.