Stride 2025 Q4 Earnings Misses Targets as Net Income Declines 18.3%

Stride Inc. (LRN) reported its fiscal 2025 Q4 earnings on August 7, 2025, with results falling short of expectations in several key areas. The company's net income dropped 18.3% year-over-year to $51.32 million, and diluted EPS declined 27.5% to $1.03. Stride also did not raise its guidance, maintaining mid-single-digit revenue growth and an EPS target above $1.25 for the upcoming fiscal year.

Revenue
Stride’s total revenue for Q4 2025 reached $653.65 million, marking a 22.4% increase compared to $534.18 million in the same period in 2024. This growth was primarily driven by the General Education segment, which saw a 13.6% increase in revenue to $394.13 million. The Career Learning segment also contributed significantly, with revenue up 38.7% to $259.51 million, fueled by a 43.8% rise in the Middle-High School category. However, the Adult Learning business experienced a 4.3% decline in revenue to $19.06 million.

Earnings/Net Income
Stride’s Q4 2025 diluted EPS fell to $1.03, down from $1.42 in Q4 2024, representing a 27.5% decrease. Net income also declined by 18.3% year-over-year, falling to $51.32 million from $62.78 million. Despite this, the company noted that Q4 2025 marked the highest net income for a fiscal Q4 in 19 years. The EPS decline, however, indicates a challenging period for profitability.

Price Action
The stock price of Stride edged down 2.47% during the latest trading day, although it recorded strong weekly and monthly gains. Over the past week, the stock jumped 12.34%, and it climbed 5.75% month-to-date, indicating some volatility but overall positive sentiment in the short term.

Post-Earnings Price Action Review
A strategy of buying LRN when revenue beats and holding for 30 days generated a substantial return of 206.21%, significantly outperforming the benchmark return of 87.77%. This strategy’s excess return of 118.44% and a CAGR of 25.49% highlight its strong growth potential. However, the strategy had a maximum drawdown of 0.00%, suggesting it might not be suitable for risk-averse investors due to the potential for zero returns in adverse conditions.

CEO Commentary
CEO Christopher Whittle emphasized the company’s strong performance in Q4 2025, attributing its success to growth in personalized learning solutions and expanded partnerships with K-12 districts. He highlighted Stride’s focus on innovation and scalable technology as key drivers of success amid macroeconomic pressures and shifting educational policies. Looking ahead, Whittle outlined strategic priorities such as increased investments in AI-driven learning platforms and international market expansion, expressing confidence in the company’s long-term potential in the evolving education technology sector.

Guidance
Stride provided forward-looking guidance for the coming year, expecting revenue to grow in the mid-single digits, driven by continued adoption of its digital curriculum and new product launches. The company anticipates EPS to exceed $1.25, while maintaining disciplined capital allocation and strategic investments. CAPEX is expected to remain stable with no major changes in the near term.

Additional News
On August 5, 2025, Stride announced its full fiscal year 2025 results, reporting revenue of $2.405 billion, a 17.9% increase compared to $2.04 billion in fiscal 2024. The company recorded a net income of $287.9 million, up 41% from $204.2 million. Adjusted earnings per share rose to $8.10, a 47.5% increase from $5.49. Stride also disclosed a one-time charge of $59.5 million in Q4 related to an impairment of its Galvanize business, which was excluded from adjusted metrics. Enrollment data showed strong performance, with average enrollments rising 20.4% to 234,000 in fiscal 2025. The company’s cash and cash equivalents reached $782.5 million as of June 30, 2025.