Stride's Q3 2025 Earnings Call: Unpacking Key Contradictions on Enrollment Growth, ESSER Funding, and Retention Strategies

Enrollment growth and constraints, ESSER funding impact on revenue and future demand, career learning program enrollment progress, marketing strategy and efficiency, and retention improvement strategy are the key contradictions discussed in Stride's latest 2025Q3 earnings call.



Strong Enrollment Growth:
- Stride, Inc. reported enrollment up over 21% from last year in Q3, setting up for another year with more enrollments than started.
- This growth is driven by strong market demand and ongoing macro trends, such as dissatisfaction with public education and interest in non-college degree pathways.

Revenue and Profitability Improvement:
- Total revenue was $630.4 million, up 17.8%. Adjusted Operating Income (AOI) and Adjusted EBITDA both increased by 47% and 40% respectively.
- The improvements in revenue and profitability are attributed to enrollment growth and favorable market conditions, along with strong execution.

Career Learning Program Expansion:
- Revenue from career learning middle and high school programs grew to $223.9 million, up 33%, with enrollment growth of 34%.
- This growth is driven by parental dissatisfaction with local districts and state programs, opening opportunities for alternative education programs.

Gross Margin Enhancement:
- Gross margins improved to 40.6%, up 190 basis points from last year.
- The improvement is due to increased efficiency efforts and strong operational execution, allowing for better cost management and profitably.

Federal Funding Impact:
- Less than 5% of Stride's revenue comes from federal resources, reducing the impact of federal funding fluctuations on the company.
- This minimizes the company's exposure to potential federal policy changes and budget uncertainties.