Stride (LRN) investor relations material

Executive summary

• Platform issues have been resolved, leading to improved customer experience and operational momentum, with a focus on long-term stability.

• Achieved record enrollment of 248.5K in Q2 FY2026, up 7.8% year-over-year, driven by strong growth in Career Learning programs.

• Revenues for Q2 FY2026 were $631.3M, up 7.5% year-over-year; six-month revenue totaled $1.25B, up 10% year-over-year.

• Adjusted operating income for Q2 was $159M, up 17% year-over-year; adjusted EBITDA was $188.1M, up 17%.

• General Education segment saw a slight enrollment increase but a 3.6% revenue decline due to client mix.

Financial highlights

• Q2 FY2026 revenue was $631.3M (+7.5% YoY); net income was $99.5M (+3.2% YoY); diluted EPS was $2.12.

• Adjusted EPS for Q2 was $2.50, up 5.5% year-over-year.

• Free cash flow for Q2 was $75.9M; cash, cash equivalents, and marketable securities totaled $676M at quarter end.

• Capital expenditures for Q2 were $16M, with full-year expectations of $70M–$80M.

• Gross margin for Q2 was 41.1%, up 30 basis points year-over-year; EBITDA margin improved to 28.2%.

Outlook and guidance

• FY2026 revenue guidance reaffirmed at $2.48B–$2.555B; adjusted operating income guidance raised to $485M–$505M.

• Q3 FY2026 revenue expected between $615M–$645M; adjusted operating income: $130M–$140M.

• Capital expenditures for FY2026 expected at $70M–$80M; effective tax rate projected at 24%–25%.

• Company remains on track to achieve FY2028 targets: $3.3B–$3.5B revenue, $800M adj. operating income, $8.35–$9.00 EPS.

• Management expects continued growth in Career Learning enrollments and revenues, with ongoing investments in curriculum and technology.