Financial Data and Key Metrics Changes - Revenue for the second quarter was $631.3 million, an increase of nearly 8% from the second quarter of fiscal year 2025 [10] - Adjusted Operating Income rose to $159 million, up $23.4 million or 17% year-over-year [10] - Adjusted EPS increased to $2.50, reflecting a 13% growth from the previous year [10] - Adjusted EBITDA reached $188.1 million, up 17% [10] - Capital expenditures were $16 million, up from $14.8 million last year [10] Business Line Data and Key Metrics Changes - Total enrollments for the second quarter were 248,500, up 7.8% year-over-year and slightly up from the first quarter [11] - Revenue from Career Learning programs grew 29% to $275.6 million, driven by a 17.6% increase in enrollment [11] - General Education revenue declined 3.6% to $341.4 million, with average enrollments slightly up but revenue per enrollment down 3.6% [11] Market Data and Key Metrics Changes - The company noted a generally positive state funding environment, although some impacts from state and program mix are anticipated [11] - Total revenue per enrollment across both lines was $2,437, an increase of 1.8% from last year [11] Company Strategy and Development Direction - The company is focused on stabilizing its platforms and enhancing customer experience, with plans to build proprietary solutions to maintain control over user experience [4][7] - The strategy includes a cautious approach to growth, prioritizing stability over aggressive enrollment increases [5][30] - The company aims to balance investments in organic growth and potential M&A transactions with share repurchases, maintaining financial flexibility [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the primary issues from the previous fall are resolved, with a significant reduction in customer support calls and improved social media sentiment [8] - The company believes it is well-positioned for a return to expected growth patterns next year, supported by strong demand and stable withdrawal rates [8][17] - Management reaffirmed full-year revenue guidance of $2.480 billion to $2.555 billion, with adjusted operating income expected between $485 million and $505 million [15][17] Other Important Information - Free cash flow for the quarter was $75.9 million, down from $208.6 million last year due to timing issues with payments [14] - The board authorized a share repurchase of up to $500 million, with $88.6 million repurchased during the second quarter [15] Q&A Session Summary Question: Clarification on enrollment and withdrawal trends - Management confirmed that withdrawal rates have returned to normal levels, which is positive news [20] Question: Demand characterization - Demand remains strong, with application volumes similar to last year, indicating robust organic demand [22] Question: School and program relations post-issues - Partners expressed frustration but also faith in the company's ability to resolve issues, indicating a shared mission [25] Question: In-year enrollment growth potential - Management is taking a cautious approach to growth, prioritizing long-term stability over immediate enrollment increases [30] Question: Revenue per enrollment changes - Variations in revenue per enrollment are attributed to state and program mix, with a focus on combined revenue per enrollment [36] Question: Gross margin adjustments - A long-term lease exit positively impacted gross margins, contributing approximately 200 basis points [39] Question: Operational performance of the platform - The platform is performing better, with ongoing improvements and a focus on user experience [49] Question: New partner pipeline discussions - Potential partners remain unconcerned about past issues, indicating strong macro conditions and belief in the company's mission [60]