Stride Q4 FY26 earnings call LRN

Bob Knowling was appointed CEO, effective immediately, following a Board evaluation to drive the next phase of growth. He brings extensive tech and education experience, having served on Stride's Board since 2018. His immediate priorities include improving student outcomes, better leveraging existing products like AI tutoring and Tallo, and enhancing go-to-market strategies to grow market share and create shareholder value. He emphasized that investments in curriculum, technology, and support services must translate into meaningful academic achievement.

Stride delivered solid financial results for fiscal year 2026, with total revenue reaching $2.518 billion, a 4.7% increase year-over-year. Adjusted operating income grew nearly 7% to $498.4 million, and adjusted EBITDA totaled $617.6 million, up 8.2%. Adjusted earnings per share were $8.33. These results reflect resilient demand for programs and disciplined financial management, despite some challenges faced during the year.

The Career Learning segment saw strong growth, with revenue increasing 19% to $1.04 billion and enrollments up 14% to 109,700 students. Conversely, the General Education segment experienced a 2% decrease in revenue to $1.42 billion, with enrollments declining 2.5% to 134,200 students. Overall, Stride served approximately 243,900 students, representing over 4% growth year-over-year. Revenue per enrollment across both lines increased to $9,914 from $9,677 in the prior year.

The Roscoe Independent School District decided not to renew its contract for Stride's Lone Star Online Academy, primarily due to performance issues. While disappointed, Stride reiterated its commitment to serving families in Texas, where it continues to operate multiple schools and is actively placing impacted students in other programs. Management acknowledged that contract non-renewals are a part of the business but stressed the new CEO's focus on improving student outcomes to mitigate similar situations in the future.

Stride ended FY26 with a strong balance sheet, holding approximately $1.034 billion in cash, cash equivalents, and marketable securities. The company continued its share repurchase program, buying back $189 million of common stock during the year. Approximately $311 million remains under the current repurchase authorization, which has been extended to October 31, 2027. Capital allocation priorities remain focused on organic growth, strategic acquisitions, and returning excess capital to shareholders.

While formal guidance for FY27 will be provided in October, early enrollment indications are encouraging. Application volumes are tracking slightly behind last year, but conversion metrics and reregistration activity are showing improvement, tracking slightly ahead. Management noted that Q1 FY27 count date enrollment growth will face a tougher comparison due to moderated in-year enrollment growth in FY26, but expects a return to in-year enrollment growth for FY27.