Q3 2026 Stride Inc Earnings Call Transcript
Key Points
- Total enrollment grew by 1.8% to 244,500, indicating a positive trend in student interest.
- Revenue for Career Learning - Middle and High School programs increased by nearly 16%, driven by strong enrollment growth of 11.6%.
- Stride Inc (LRN) reported a total revenue of $629.9 million for the quarter, up 2.7% compared to last year.
- The company has a strong pipeline of new business activity, which is as robust as it has been in the past five years.
- Free cash flow increased significantly to $202.4 million, up from $37.3 million last year, showcasing improved financial health.
- General Education revenue declined by 3.6% due to a 5% drop in enrollment.
- Gross margins decreased by 380 basis points to 36.8%, primarily due to continued investments in the business.
- Adjusted operating income was down 1%, and adjusted earnings per share decreased by $0.03 from last year.
- The company anticipates a sequential decline in enrollment next quarter as most programs no longer accept enrollments during the fourth quarter.
- The Adult Learning segment, particularly the boot camps, is experiencing secular decline, impacting overall growth prospects.
Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Stride third-quarter fiscal year 2026 earnings call. (Operator Instructions)
I would now like to turn the call over to Eliza Henson, Manager of Investor Relations. Eliza, please go ahead.
Thank you, and good afternoon. Welcome to Stride's third-quarter earnings call for fiscal year 2026. With me on today's call are James Rhyu, Chief Executive Officer; and Donna Blackman, Chief Financial Officer. As a reminder, today's conference call and webcasts are accompanied by a presentation that can be found on the Stride Investor Relations website. Please be advised that today's discussion of our financial results may include certain non-GAAP financial measures. A reconciliation of these measures is provided in the earnings release issued this afternoon, and can also be found on our Investor Relations website.
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