[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) Stride reported record fiscal year 2025 results with significant growth in revenue, net income, and adjusted EPS, while Q4 saw strong adjusted growth despite a one-time charge [Fiscal Year 2025 Performance](index=1&type=section&id=Fiscal%20Year%202025%20Performance) Stride reported a record fiscal year 2025, with significant growth across key financial metrics. Revenue increased by 17.9% to over $2.4 billion, while net income grew by 41.0% to $287.9 million. Adjusted earnings per share saw a substantial rise of 47.5% to $8.10, reflecting strong operational performance Fiscal 2025 Summary Financial Metrics (vs. 2024) | Metric | FY 2025 | FY 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $2,405.3M | $2,040.1M | 17.9% | | Income from operations | $360.1M | $249.6M | 44.3% | | Adjusted operating income | $466.2M | $293.9M | 58.6% | | Net income | $287.9M | $204.2M | 41.0% | | Net income per share, diluted | $5.95 | $4.69 | 26.9% | | Adjusted earnings per share | $8.10 | $5.49 | 47.5% | | Adjusted EBITDA | $571.0M | $390.7M | 46.1% | - The company incurred a one-time impairment charge of **$59.5 million** related to its Galvanize business, which is excluded from adjusted operating income, adjusted EBITDA, and adjusted EPS[4](index=4&type=chunk) [Fourth Quarter Fiscal 2025 Performance](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Performance) In the fourth quarter of fiscal 2025, Stride's revenue grew 22.4% year-over-year to $653.6 million. However, GAAP metrics such as income from operations and net income declined by 22.8% and 18.3% respectively, primarily due to a one-time impairment charge. Adjusted metrics showed strong growth, with adjusted operating income up 48.5% and adjusted EPS up 36.3% Q4 Fiscal 2025 Summary Financial Metrics (vs. Q4 2024) | Metric | Q4 2025 | Q4 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $653.6M | $534.2M | 22.4% | | Income from operations | $56.9M | $73.7M | (22.8%) | | Net income | $51.3M | $62.8M | (18.3%) | | Net income per share, diluted | $1.03 | $1.42 | (27.5%) | | Adjusted operating income | $130.6M | $87.9M | 48.5% | | Adjusted earnings per share | $2.29 | $1.68 | 36.3% | | Adjusted EBITDA | $158.4M | $112.1M | 41.3% | [Detailed Operational and Financial Metrics](index=2&type=section&id=Detailed%20Operational%20and%20Financial%20Metrics) The company achieved robust revenue and enrollment growth, particularly in Career Learning, while strengthening its cash position and maintaining stable capital expenditures [Revenue and Enrollment Analysis](index=2&type=section&id=Revenue%20and%20Enrollment%20Analysis) For fiscal year 2025, total revenue growth of 17.9% was driven by a 20.4% increase in average enrollments, which reached 234.0K. The Career Learning segment was the primary growth engine, with revenue up 27.4% and enrollments up 32.5% year-over-year. Revenue per enrollment remained relatively stable for the full year, increasing by 0.6% FY 2025 Revenue by Segment (vs. 2024) | Segment | FY 2025 Revenue | FY 2024 Revenue | Growth (%) | | :--- | :--- | :--- | :--- | | General Education | $1,448.7M | $1,289.2M | 12.4% | | Career Learning | $956.6M | $750.9M | 27.4% | | - Middle-High School | $876.3M | $651.2M | 34.6% | | - Adult | $80.4M | $99.7M | (19.4%) | | **Total Revenues** | **$2,405.3M** | **$2,040.1M** | **17.9%** | - Full-year average enrollments increased by **20.4%** to **234.0K**, with Career Learning enrollments growing significantly by **32.5%** to **96.3K**[11](index=11&type=chunk) - Full-year revenue per enrollment was **$9,677**, a slight increase of **0.6%** from the prior year. Career Learning revenue per enrollment grew **1.8%** to **$9,104**[15](index=15&type=chunk) [Cash Flow and Capital Allocation](index=3&type=section&id=Cash%20Flow%20and%20Capital%20Allocation) The company's financial position strengthened, with cash, cash equivalents, and marketable securities increasing to $1,011.4 million as of June 30, 2025, up from $714.2 million a year prior. Capital expenditures remained stable at $60.0 million, primarily allocated to capitalized software and curriculum development - Cash, cash equivalents, and marketable securities totaled **$1,011.4 million** at fiscal year-end, a significant increase from **$714.2 million** at the end of fiscal 2024[16](index=16&type=chunk) - Total capital expenditures for fiscal 2025 were **$60.0 million**, slightly down from **$61.6 million** in the previous year. The main components were **$36.4 million** for software development and **$21.8 million** for curriculum development[16](index=16&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) Stride's financial statements for fiscal year 2025 reflect strong revenue and net income growth, a significant increase in total assets and cash, and robust operating cash flow [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) For the fiscal year ended June 30, 2025, Stride's revenue increased to $2.41 billion from $2.04 billion in the prior year. Gross margin improved to $943.9 million. A significant $59.5 million impairment charge on long-lived assets impacted income from operations, which still grew to $360.1 million. Net income attributable to common stockholders rose to $287.9 million, or $5.95 per diluted share FY 2025 Statement of Operations Highlights (in thousands) | Line Item | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Revenues | $2,405,317 | $2,040,069 | | Gross margin | $943,919 | $763,603 | | Impairment of long-lived assets | $59,478 | $— | | Income from operations | $360,094 | $249,600 | | Net income attributable to common stockholders | $287,941 | $204,183 | | Diluted net income per share | $5.95 | $4.69 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Stride's total assets grew to $2.29 billion from $1.92 billion in the prior year, driven by a significant increase in cash and cash equivalents. Total liabilities increased moderately to $814.3 million. Total stockholders' equity saw substantial growth, reaching $1.48 billion, up from $1.18 billion at the end of fiscal 2024 Balance Sheet Highlights (in thousands) | Line Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $782,497 | $500,614 | | Total current assets | $1,632,734 | $1,245,446 | | Total assets | $2,293,959 | $1,920,465 | | Total liabilities | $814,340 | $744,440 | | Total stockholders' equity | $1,479,619 | $1,176,025 | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the fiscal year 2025, net cash provided by operating activities increased significantly to $432.8 million from $278.8 million in the prior year. Net cash used in investing activities decreased to $88.0 million. The company experienced a net increase in cash, cash equivalents, and restricted cash of $281.9 million for the year Statement of Cash Flows Highlights (in thousands) | Line Item | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $432,816 | $278,797 | | Net cash used in investing activities | ($87,995) | ($139,871) | | Net cash used in financing activities | ($62,938) | ($49,119) | | Net change in cash, cash equivalents and restricted cash | $281,883 | $89,807 | [Non-GAAP Financial Measures and Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) Stride utilizes non-GAAP financial measures to provide a clearer view of core operating performance, with detailed reconciliations to comparable GAAP figures [Explanation of Non-GAAP Measures](index=7&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Stride uses non-GAAP financial measures such as adjusted operating income, EBITDA, adjusted EBITDA, and adjusted EPS to provide investors with additional information on financial performance. These measures exclude items like stock-based compensation, amortization of intangible assets, and other one-time charges to facilitate consistent period-over-period comparisons and are used by management for performance assessment - Non-GAAP measures like adjusted operating income, adjusted EBITDA, and adjusted EPS exclude stock-based compensation, amortization, and one-time charges to provide a clearer view of core operating performance[34](index=34&type=chunk)[35](index=35&type=chunk)[40](index=40&type=chunk) - Management uses these non-GAAP measures to compare operating performance on a consistent basis and for presentations to the Board of Directors[36](index=36&type=chunk)[41](index=41&type=chunk) [Reconciliation of Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company provides detailed reconciliations of its non-GAAP measures to the most comparable GAAP figures. For fiscal year 2025, income from operations of $360.1 million was adjusted for items including a $59.5 million impairment charge to arrive at an adjusted operating income of $466.2 million. Similarly, net income of $287.9 million was reconciled to an adjusted net income of $372.6 million, resulting in an adjusted EPS of $8.10 FY 2025 Reconciliation of Income from Operations to Adjusted Operating Income (in thousands) | | FY 2025 | | :--- | :--- | | Income from operations (GAAP) | $360,094 | | Amortization of intangible assets | $9,867 | | Stock-based compensation expense | $36,794 | | Impairment of long-lived assets | $59,478 | | **Adjusted operating income (Non-GAAP)** | **$466,233** | FY 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | FY 2025 | | :--- | :--- | | Net income (GAAP) | $287,941 | | Adjustments (Interest, Tax, D&A, etc.) | $186,822 | | **EBITDA (Non-GAAP)** | **$474,763** | | Stock-based compensation expense | $36,794 | | Impairment of long-lived assets | $59,478 | | **Adjusted EBITDA (Non-GAAP)** | **$571,035** | FY 2025 Reconciliation of Diluted EPS to Adjusted EPS | | FY 2025 | | :--- | :--- | | Diluted net income per share (GAAP) | $5.95 | | Adjustments (Amortization, Stock Comp, Impairment, Tax Effect, etc.) | $2.15 | | **Adjusted earnings per share (Non-GAAP)** | **$8.10** | [Other Information](index=3&type=section&id=Other%20Information) This section provides details on the upcoming conference call for financial results and important disclosures regarding forward-looking statements and associated risks [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Stride will host a conference call to discuss its fourth quarter and full fiscal year 2025 financial results on Tuesday, August 5, 2025, at 5:00 p.m. Eastern Time. A live webcast and replay will be available on the company's investor relations website - A conference call to discuss Q4 and FY2025 results is scheduled for Tuesday, August **5**, **2025**, at **5:00 p.m.** ET[17](index=17&type=chunk) - Investors can access a live webcast and replay of the call on Stride's investor relations website[18](index=18&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release includes forward-looking statements that involve substantial risks and uncertainties. These statements are based on current beliefs and information, and actual results could differ materially. The company outlines numerous risk factors, including changes in per-pupil funding, enrollment levels, regulatory changes, and cybersecurity threats, and undertakes no obligation to update these statements - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from expectations[20](index=20&type=chunk) - Key risks include reduction of per-pupil funding, failure to achieve enrollment levels, regulatory changes, cybersecurity attacks, and risks related to artificial intelligence[20](index=20&type=chunk)[21](index=21&type=chunk)

Core Insights - Stride, Inc. reported strong financial performance for the fiscal year 2025, with revenues increasing by 17.9% to $2.405 billion compared to $2.040 billion in fiscal year 2024 [4][10][11] - The company experienced significant growth in adjusted operating income, which rose by 58.6% to $466.2 million, and adjusted EBITDA increased by 46.1% to $571.0 million [4][7][10] - Enrollment figures also showed positive trends, with full-year enrollments averaging 234,000, up 20.4% from 194,300 in fiscal year 2024, and Career Learning enrollments increasing by 32.5% [11][12] Financial Performance - Total revenues for the fourth quarter of fiscal 2025 were $653.6 million, a 22.4% increase from $534.2 million in the same quarter of fiscal 2024 [9][10] - Net income for the full fiscal year was $287.9 million, up 41.0% from $204.2 million in fiscal year 2024, with diluted net income per share increasing by 26.9% to $5.95 [4][7][10] - The company incurred one-time charges of $59.5 million related to impairment expenses for its Galvanize business, which were excluded from adjusted financial metrics [3][4] Enrollment and Revenue Metrics - Revenue per enrollment for the fourth quarter was $2,630, reflecting a 2.4% increase compared to $2,569 in the fourth quarter of fiscal 2024 [14] - For the full fiscal year 2025, revenue per enrollment was $9,677, a slight increase of 0.6% from $9,623 in fiscal year 2024 [15] - The company reported that Career Learning revenue per enrollment increased by 8.1% to $2,479 in the fourth quarter [14] Cash Flow and Capital Allocation - As of June 30, 2025, Stride's cash and cash equivalents totaled $1.011 billion, up from $714.2 million a year earlier [16] - Capital expenditures for the fiscal year were $60.0 million, slightly down from $61.6 million in fiscal year 2024 [16] Business Overview - Stride, Inc. is focused on redefining lifelong learning through innovative education solutions, serving learners across various educational levels and locations [19] - The company operates in all 50 states and over 100 countries, providing a range of services including K-12 education and career learning [19]

Core Insights - Stride, Inc. has partnered with Chama Valley Independent Schools and Santa Rosa Consolidated Schools to operate the Destinations Career Academy of New Mexico (NMDCA) starting in the fall of 2025, with over 3,000 students already enrolled for the 2025–2026 school year [1][2][3] Company Overview - Stride, Inc. is focused on redefining lifelong learning through innovative education solutions, serving learners in primary, secondary, and postsecondary settings across all 50 states and over 100 countries [4] - NMDCA is an online public school program that combines academic excellence with career-readiness pathways and dual-credit opportunities for K–12 students statewide [5] Partnership Impact - The partnership is seen as a strategic move to expand educational access and innovation in rural communities, creating new opportunities for students and positioning the districts as forward-thinking hubs for learning [2][3] - The collaboration aims to meet the evolving needs of students by providing high-quality virtual education options [2][3] Enrollment Information - Enrollment for the 2025–2026 school year is currently open, with families encouraged to learn more and begin the application process through the NMDCA website [3]

Core Insights - The article compares two companies in the Schools sector, Perdoceo Education (PRDO) and K12 (LRN), to determine which is the better undervalued stock option for investors [1] Valuation Metrics - Perdoceo Education has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while K12 has a Zacks Rank of 3 (Hold) [3] - PRDO's forward P/E ratio is 11.79, significantly lower than LRN's forward P/E of 16.66, suggesting PRDO is more undervalued [5] - The PEG ratio for PRDO is 0.79, compared to LRN's PEG ratio of 0.83, indicating PRDO's expected earnings growth is more favorable [5] - PRDO's P/B ratio is 1.98, while LRN's P/B ratio is 3.97, further supporting PRDO's valuation advantage [6] - Based on these metrics, PRDO holds a Value grade of A, while LRN has a Value grade of C, reinforcing PRDO as the superior value option [6]

Core Viewpoint - Stride, Inc. (LRN) is set to report its fourth-quarter fiscal 2025 results on August 5, with expectations of revenue and earnings growth driven by shifts in demand towards tech-based and career-focused educational programs [1][4][10] Financial Performance - In the last reported quarter, Stride's earnings per share (EPS) missed the Zacks Consensus Estimate by 3.4%, while revenues exceeded the estimate by 3.3% [1] - The Zacks Consensus Estimate for the upcoming fiscal fourth-quarter EPS is $1.83, reflecting a year-over-year growth of 28.9% from $1.42 [3] - Revenue estimates for the fourth quarter are pegged at $628.9 million, indicating a 17.7% increase from $534.2 million reported in the same quarter last year [3][10] Growth Drivers - The company's performance is expected to benefit from increased demand for tech-based alternatives and career-focused programs, supported by a diversified range of online services and products [4][5] - A strategic shift towards career learning and adult certification programs is anticipated to drive enrollment growth across its General Education and Career Learning segments [5][10] - Despite rising instructional costs and administrative expenses, the overall bottom line is expected to improve due to high top-line growth [6][10] Market Position - Stride's current Zacks Rank is 3 (Hold), and it has an Earnings ESP of 0.00%, indicating uncertainty regarding an earnings beat this quarter [7][8]

Core Insights - Stride, Inc. (LRN) is experiencing significant growth in digital education, with a 17.8% year-over-year revenue increase to $613.4 million in fiscal Q3 2025, driven by a 21% rise in total enrollment [1][9] - The company is addressing the rising demand for non-traditional education options, as evidenced by a Gallup Poll indicating that nearly 90% of parents are exploring non-college career paths for their children [2] - Stride has raised its full-year revenue and operating income guidance for fiscal 2025, indicating strong fundamentals with adjusted operating income up 47% and gross margin expanding to 40.6% [3] Financial Performance - Career learning revenue surged 33% to $223.9 million, supported by a 34% growth in enrollment within that segment [1][9] - The company is on track to exceed its 2028 CAGR targets by three years, showcasing its robust growth trajectory [3] Competitive Landscape - Competitors like Chegg and Coursera are also evolving in the digital education space, with Chegg focusing on AI-driven learning support and Coursera expanding into online credentialing and dual-enrollment programs [5][6] - Stride must continue to differentiate its offerings to maintain its leadership position in the K-12 education sector [6] Stock Performance - Stride's stock has trended downward by 8.3% over the past three months, underperforming both the Zacks Schools industry and the S&P 500 index [7] Valuation Metrics - Stride's stock is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 2.17, indicating a discount compared to industry peers [11] Earnings Estimates - Earnings estimates for fiscal 2025 and 2026 remain unchanged at $7.09 and $7.76 per share, respectively, implying year-over-year growth of 51.2% and 9.4% [13]

Group 1 - Road2Teach has been approved by the Indiana Department of Education to offer its Special Education Transition to Teaching program, addressing the urgent need for qualified special education teachers in Indiana [1][2] - There are over 188,000 students with disabilities in Indiana, and more than 20% of the state's teaching vacancies are for Special Education roles, highlighting the demand for qualified educators [2] - The Road2Teach program provides a flexible, fully online pathway for career changers and non-traditional adult learners to earn their Indiana teaching license, equipping them to be ready for teaching from day one [2][3] Group 2 - The program integrates research-based virtual coursework and intensive mentorship, preparing new educators for success in diverse classroom settings [3] - Participants will also meet Indiana's new Early Literacy Endorsement requirements, ensuring they can support foundational reading skills for all students [3] - Road2Teach is now accepting applications for its Transition to Teaching programs, making the teaching profession more accessible [4][5]

Core Viewpoint - Stride Inc. is set to discuss its fourth quarter and full fiscal year 2025 financial results in an upcoming conference call scheduled for August 5, 2025 [1] Group 1: Conference Call Details - The conference call will take place at 5:00 p.m. eastern time (ET) [1] - Investors can access a live webcast of the call at investors.stridelearning.com/events-and-presentations [2] - Participants can join the call by dialing (800) 715-9871 for domestic calls or +1 (646) 307-1963 for international calls, using conference ID number 8901384 [2] Group 2: Company Overview - Stride Inc. is focused on redefining lifelong learning through innovative and high-quality education solutions [3] - The company serves learners across primary, secondary, and postsecondary settings, offering a variety of services including K-12 education, career learning, professional skills training, and talent development [3] - Stride reaches learners in all 50 states and over 100 countries [3]

Core Viewpoint - Stride, Inc. is facing challenges due to the termination of a key partnership with Gallup-McKinley County Schools, which is expected to impact its market value and revenue visibility, despite experiencing significant enrollment growth in its K-12 and career learning segments [3][7][15]. Company Performance - Stride's share price has decreased by 9.4% over the past month, underperforming compared to the Zacks Schools industry and the broader market [1]. - The company has reported a 20% overall enrollment growth in fiscal 2025, with General Education and Career Learning segments growing by 12.8% and 32%, respectively [15]. Partnership and Regulatory Challenges - The termination of the partnership with GMCS, effective June 30, 2025, was due to Stride's failure to meet legal and academic requirements, which poses risks to its growth and profitability [6][7]. - Stride's business model heavily relies on contracts with educational institutions, making it vulnerable to compliance issues that could lead to contract terminations [6]. Market and Economic Conditions - Stride is experiencing macroeconomic pressures, including inflation and tariff concerns, which could indirectly affect its top-line growth through strained government budgets [9]. - The company is facing increased operational costs, with instructional costs and SG&A expenses rising by 12.5% and 0.6% year-over-year, respectively [9]. Financial Position - Stride maintains a strong liquidity position with cash and cash equivalents of $528.5 million, up from $500.6 million at the end of fiscal 2024, while long-term debt has slightly increased to $415.9 million [18]. - The stock is trading at a forward P/E ratio of 16.98, indicating a premium compared to industry peers, which reflects its growth potential [10]. Growth Prospects - The shift in demand towards tech-based and career-focused educational programs is expected to enhance Stride's revenue visibility and profitability in the long term [5][21]. - The company is strategically expanding its online education offerings, which aligns with the growing trend of digital learning [12][16].

Market Overview - The three major U.S. stock indexes closed lower last week, with the Dow Jones Industrial Average down 1%, the S&P 500 down 0.3%, and the Nasdaq Composite down 0.1% [1] - The market pullback was influenced by renewed U.S. tariff threats, particularly higher levies on Canada and the European Union, raising concerns about economic growth and inflation [2] Earnings Performance - Despite tariff concerns, many investors focused on strong earnings reports from airlines and consumer stocks, indicating a resilient economy [2] - The second-quarter earnings season is critical for assessing the impact of tariffs on corporate profits [3] Zacks Research Performance - Mogo Inc. shares surged 81.8% since being upgraded to Zacks Rank 2 (Buy) on May 8, significantly outperforming the S&P 500's 11.1% increase [4] - ATI Inc. also saw a 32.6% return since its upgrade to Zacks Rank 2 on May 6, compared to the S&P 500's 10.7% increase [5] - A hypothetical portfolio of Zacks Rank 1 (Strong Buy) stocks returned +6.51% in May 2025, outperforming the S&P 500's +4.47% [5] Zacks Recommendations - Amarin Corporation and European Wax Center shares increased by 62.6% and 49.9%, respectively, after being upgraded to Outperform on May 12, against the S&P 500's 10.5% rise [8] - The Zacks Focus List portfolio returned 8.84% in 2025 (through June 30) compared to the S&P 500's +6.21% [12] Portfolio Performance - The Zacks Earnings Certain Admiral Portfolio (ECAP) returned +3.20% in Q1 2025, outperforming the S&P 500's -4.30% decline [16] - The Zacks Earnings Certain Dividend Portfolio (ECDP) returned +5.74% in Q1 2025, compared to the S&P 500's -2.41% [20] - The Zacks Top 10 Stocks portfolio delivered +11.8% year-to-date through June 2025, outperforming the S&P 500's +6.2% [22] Long-term Performance - Since 2004, the Zacks Focus List portfolio has produced an annualized return of +11.60%, compared to +10.22% for the S&P 500 [15] - The Top 10 portfolio has generated a cumulative return of +2,246.8% since 2012, significantly outperforming the S&P 500's +502.3% [24]