Stride NYSE: LRN reported fiscal 2026 revenue growth of 4.7% and higher adjusted profitability, while outlining an executive transition and describing early enrollment indicators for the coming school year.
Bob Knowling, who was appointed chief executive officer following a board-led leadership change announced last week, said the transition was intended to position the education company for its next stage of growth rather than reflect expectations for near-term performance.
“Ultimately, the board determined that for Stride to reach its full potential, a new leader was needed to take the reins,” Knowling said. He added during the question-and-answer session that there was “no consideration” of forward-looking performance in the decision and that the change was made immediately to enable him to begin the fiscal 2027 year in the role.
Fiscal 2026 Results
For the fiscal year ended 2026, Stride generated revenue of $2.518 billion, up 4.7% from fiscal 2025. Adjusted operating income increased nearly 7% to $498.4 million, while adjusted EBITDA rose 8.2% to $617.6 million. Adjusted earnings per share were $8.33.
The company served about 243,900 students during the year, an increase of just over 4% from the prior year. Revenue per enrollment across its business was $9,914, compared with $9,677 a year earlier.
Career Learning was the company’s primary growth driver. Revenue from middle- and high-school Career Learning programs rose 19% to $1.04 billion, while full-year enrollments increased 14% to 109,700.
General Education revenue declined 2% to $1.42 billion, and enrollments in that business fell 2.5% to 134,200. Chief Financial Officer Donna Blackman said revenue per enrollment continued to be influenced by differences in state funding, program mix and enrollment timing.
- Gross margin was 37.8%, down 140 basis points from the prior year.
- Selling, general and administrative expense fell 4.7% to $499.8 million.
- Capital expenditures totaled $78.8 million.
- Free cash flow was $355 million, down $17.8 million year over year.
- Cash equivalents and marketable securities totaled approximately $1.034 billion at year-end.
Blackman said margins were affected by investments in technology platforms and strategic initiatives. While many one-time implementation costs are now behind the company, she said Stride expects to continue incurring some ongoing expenses tied to the new platforms and to continue investing in strategic priorities.
Capital Allocation and Repurchases
Stride repurchased approximately $189 million of common stock during fiscal 2026 and ended the year with about $311 million remaining under its share repurchase authorization. The authorization has been extended through Oct. 31, 2027.
Knowling said he intends to “actively consider opportunistic stock repurchases” when the company’s trading window opens at the end of October. Blackman said the company’s capital allocation priorities remain investing in organic growth, evaluating strategic acquisitions and returning excess capital to shareholders when doing so can create long-term value.
Enrollment Outlook and Texas Contract
The company did not provide formal fiscal 2027 enrollment or financial guidance, saying it will do so when it reports first-quarter results in October. Blackman said most partner states have finalized education budgets and that the overall funding environment remains supportive.
Stride expects fiscal 2027 revenue per enrollment to be relatively flat to modestly higher than fiscal 2026, though Blackman said state and program mix, along with enrollment yield, could affect results.
Early enrollment indicators were mixed. Knowling said applications are tracking slightly behind the same period last year, but conversion metrics have improved and re-registration activity is slightly ahead of the prior year. Blackman cautioned that first-quarter count-date enrollment growth will face a tougher comparison because the company moderated in-year enrollment growth during fiscal 2026, reducing the carryover benefit entering the new school year.
Blackman added that the company does expect in-year enrollment growth in fiscal 2027, although she did not commit to the level of growth seen in earlier periods. She said Stride does not expect to close enrollment windows to the same extent as it did in fiscal 2026.
The company also addressed Roscoe Independent School District’s decision not to renew its contract for Lone Star Online Academy in Texas. Blackman said the school had performance issues and that Roscoe elected not to renew. She noted that contracts can leave the business in any given year, while new contracts are also added.
Knowling said Texas remains an important state for Stride, which continues to operate multiple schools there and is placing families affected by the Roscoe decision into other programs.
Strategic Priorities
Knowling said improving student outcomes will be a top priority, describing it as the “ultimate measure of educational success.” He said the company sees an opportunity to better use products and services including live and artificial intelligence tutoring, the Tallo career platform and digital curriculum offerings.
He also identified go-to-market improvements, deeper expansion in existing geographies and entry into new geographies as potential growth opportunities. “To grow our market share, in large part, we must improve student outcomes,” Knowling said.
For fiscal 2027, Blackman said Stride expects capital expenditures and SG&A as a percentage of revenue to be relatively flat, gross margins to be roughly in line with fiscal 2026, and both stock-based compensation and the tax rate to increase somewhat. She said the company believes it remains on track to achieve its fiscal 2028 financial targets.
About Stride (NYSE:LRN)
Stride, Inc NYSE: LRN is a technology-driven education company that designs and delivers online learning solutions for students and adult learners. Through long-term partnerships with state-authorized public school districts, Stride operates virtual academies that serve K-12 students across the United States. The company's blended-learning model combines digital curriculum, live teaching support and data analytics to personalize instruction and monitor student progress.
In addition to its K-12 offerings, Stride provides a portfolio of career and workforce readiness programs under its Stride Career Prep division.
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