Stride, Inc. (NYSE: LRN) reported fiscal third‑quarter 2026 results on April 28, 2026, with revenue of $629.9 million, a 2.7% year‑over‑year increase, and operating income of $129.1 million, a 1.3% decline from the same quarter a year earlier. Diluted earnings per share were $1.93, while adjusted earnings per share rose to $2.30, beating the consensus range of $1.92 to $2.21 by $0.38 and exceeding the lower end of analyst expectations.
The revenue growth was driven by a 1.8% rise in total enrollments to 244.5 thousand, including an 11.6% increase in Career Learning enrollments to 110.1 thousand. Career Learning revenue climbed 16% to $259.5 million, whereas General Education revenue fell 3.6% to $357.5 million. The mix shift toward higher‑margin Career Learning programs lifted revenue per enrollment to $2,485, up 2.9% from $2,415 a year earlier.
Gross margin contracted to 36.8%, a decline of 380 basis points from the prior year, reflecting continued platform rollout investments. Operating income fell 1.3% YoY to $129.1 million, while adjusted operating income decreased 1% to $140.4 million. Adjusted EBITDA rose 1.8% to $171.3 million, and free cash flow surged to $202.4 million from $37.3 million a year earlier.
Management narrowed full‑year revenue guidance to $2.49 billion–$2.52 billion, down from $2.48 billion–$2.555 billion, and adjusted operating income guidance to $490 million–$500 million, a slight tightening from $485 million–$505 million. The revised revenue range is below the consensus estimate of $2.554 billion, signaling a more cautious outlook for the second half of the fiscal year.
"Total enrollments grew 1.8% to 244,500 and total revenue for the quarter was $629.9 million, up 2.7% compared to last year," said CFO Donna Blackman. "Revenue in our career learning, middle and high school programs grew nearly 16% to $259.5 million…General Education revenue was $357.5 million, down 3.6% compared to last year."
Investors focused on the guidance miss, which fell short of analyst consensus, tempering enthusiasm for the earnings beat. The market reaction highlighted concerns about the company’s ability to sustain growth in the face of platform investment costs and a potential slowdown in the second half of the fiscal year.
Stride’s platform stability investments are expected to moderate in FY2027, but the company remains confident in its trajectory. The firm’s strategic pivot toward Career Learning programs is a tailwind, while continued platform rollout costs and higher attrition rates present headwinds that could pressure margins in the near term.
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