Stride (LRN) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 enrollments of 240,200, up 21.1% year-over-year, and reported the most profitable quarter in company history.

• Q3 revenue was $613.4 million, up 17.8% year-over-year, with net income of $99.3 million, up 42.6%.

• Nine-month revenue reached $1,751.7 million, a 16.3% increase, with net income of $236.6 million, up 67.3% year-over-year.

• Application volumes since January 1 have doubled compared to two years ago and quadrupled versus four years ago, despite some enrollment constraints.

• The company is celebrating its 25th anniversary and is focused on long-term growth and innovation in education.

Financial highlights

• Q3 total revenue was $613.4 million, up 17.8% year-over-year; net income was $99.3 million, up from $69.7 million.

• Adjusted operating income for Q3 was $141.7 million, up 47%; adjusted EBITDA was $168.3 million, up 40%.

• Gross margin improved to 40.6%, up from 38.7% year-over-year.

• Free cash flow for Q3 was $37.3 million; operating cash flow for nine months was $134.5 million, up from $106.6 million.

• Cash and marketable securities totaled $754.6 million as of March 31, 2025.

Outlook and guidance

• FY25 revenue guidance raised to $2.370–$2.385 billion; adjusted operating income guidance increased to $455–$465 million.

• Capital expenditures expected at $60–$65 million; effective tax rate projected at 24%–26%.

• On track to achieve FY2028 targets, including 10% CAGR in revenue and 20% CAGR in adjusted operating income and EPS.

• Funding environment for FY26 appears favorable, with less than 5% of revenue from federal sources.

• Management expects continued revenue growth driven by enrollment increases and expansion of school-as-a-service offerings.