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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

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

LRN

LRN fundamentals

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