Stride, Inc.

For FY 2026, Stride reported revenue of $2.518 billion, up 4.7% year over year. Adjusted operating income was $498.4 million, up nearly 7%; adjusted EBITDA was $617.6 million, up 8.2%; and adjusted EPS was $8.33. Gross margin was 37.8%, down 140 basis points, while SG&A was $499.8 million, down 4.7%. Career learning revenue was $1.04 billion, up 19%, with enrollments of 110,000, up 14%; general education revenue was $1.42 billion, down 2%, with enrollments of 134,000, down 2.5%. Free cash flow was $355 million, capital expenditures were $78.8 million, and cash, cash equivalents, and marketable securities were approximately $1.034 billion. Looking ahead, management said FY 2027 revenue per enrollment is expected to be relatively flat to up slightly versus FY 2026, gross margins are expected to be flattish to last year, SG&A and CapEx as a percent of revenue are anticipated to be relatively flat, and stock-based compensation and tax rate should tick up somewhat; formal enrollment and financial guidance will be provided with first-quarter results in October.

Bob Knowling framed the leadership change as intentional and tied to the company’s next stage of growth, saying the board wanted a leader with tech, education, and team-building experience. He emphasized student outcomes as the ultimate measure of success and said Stride should better leverage its products, go-to-market, and platform capabilities, including live and AI tutoring and career/digital curriculum offerings. His tone was confident and forward-looking, while acknowledging there is room for improvement.

Donna Blackman said FY 2026 was a year of “meaningful progress,” highlighting $2.518 billion of revenue, $498.4 million of adjusted operating income, $617.6 million of adjusted EBITDA, and $8.33 of adjusted EPS. She noted gross margin of 37.8% was down 140 basis points because of prior investments, but said many one-time implementation costs are now behind the company, even though some ongoing platform expenses will remain. On capital allocation, she pointed to $355 million of free cash flow, roughly $1.034 billion of cash and marketable securities, about $189 million of repurchases during the year, and about $311 million remaining on the authorization, which now runs through October 31, 2027.

Analysts focused on Lone Star Online Academy, asking whether Roscoe’s non-renewal was driven by weaker outcomes; management said there were performance issues, but stressed non-renewals are part of the business and that the company is investing more in student outcomes to reduce such risk. Questions also centered on FY 2027 enrollment and whether growth could match prior years; Donna Blackman said application volumes are slightly behind last year but conversion and re-registration are stronger, while cautioning that it is too early to call the year. Another question pressed the CEO transition, and Bob Knowling said the move was not tied to any forward-looking performance issue but was intended to move the business to the next level of growth, with an immediate handoff so he could prepare for FY 2027.