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- **Enrollment shortfall**: Q1 enrollment growth of 11.3% fell short of internal targets by 10,000-15,000 due to platform implementation delays and strategic enrollment limits.
- **Financial resilience**: Despite challenges, Q1 revenue rose 13% to $620.9M, with adjusted operating income up 39% to $81.1M.
- **Platform recovery**: CEO expects critical platform issues resolved by year-end, enabling resumption of in-year enrollment growth in 2026.
- **Competitive strength**: Maintained raw enrollment growth margin over largest competitor despite industry-wide expansion.

**【CEO Summary Section】**
- **Enrollment shortfall**: Q1 enrollment grew 11.3% YoY to 247,700 students, but 10,000-15,000 below internal targets due to platform implementation issues and enrollment growth limits.
- **Platform challenges**: Customer experience was negatively impacted by delays in rolling out new learning and administrative platforms, leading to higher withdrawal rates.
- **Long-term vision**: Despite short-term disruptions, CEO reaffirmed bullish outlook for online education demand, citing ongoing family need for alternatives to traditional schools.
- **Investment in quality**: Decision to limit enrollment growth temporarily to ensure high-quality program execution and platform stabilization.

**【CFO Financial Commentary】**
- **Revenue growth**: Q1 revenue $620.9M (+13% YoY), driven by 20% Career Learning growth and 5.2% Gen Ed expansion.
- **Profitability**: Adjusted operating income $81.1M (+39% YoY), EBITDA $108.4M (+29% YoY), EPS $1.52 (+39% YoY).
- **Gross margin pressure**: 39% gross margin (-20bps YoY) due to platform implementation costs and investments.
- **Guidance**: Full-year revenue $2.48B-$2.555B, operating income $475M-$500M, with expectations for improved platform performance in Q4.

**【Q&A Highlights】**
- **Platform impact breakdown**: ~70% of shortfall attributed to customer experience issues, ~30% from enrollment growth limits.
- **Fix timeline**: Most critical platform issues to be resolved by end of 2025, with ongoing improvements into 2026.
- **Competitive dynamics**: Despite industry-wide growth, Stride maintained raw enrollment growth margin over largest competitor.
- **Funding environment**: Positive state funding trends expected to continue, though mix shifts may limit revenue per enrollment growth.

Stride, Inc. (LRN) Q1 2026 Earnings Call Transcript

General Education

Career Learning

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LRN fundamentals

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