Stride(LRN) - 2025 Q4 - Annual Results

Financial Performance Overview 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 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] Fourth Quarter Fiscal 2025 Performance 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 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 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] - 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] Cash Flow and Capital Allocation 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] - 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] Financial Statements 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 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 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 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 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 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][35][40] - Management uses these non-GAAP measures to compare operating performance on a consistent basis and for presentations to the Board of Directors[36][41] Reconciliation of Non-GAAP Measures 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 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 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] - Investors can access a live webcast and replay of the call on Stride's investor relations website[18] Forward-Looking Statements 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] - Key risks include reduction of per-pupil funding, failure to achieve enrollment levels, regulatory changes, cybersecurity attacks, and risks related to artificial intelligence[20][21]