Stride (NYSE: LRN) reported fiscal fourth-quarter 2026 revenue of $636.1 million, down 2.7% year over year, while GAAP diluted EPS rose 69.9% to $1.75 from $1.03. The EPS increase largely reflected the absence of a prior-year impairment charge: adjusted EPS fell 7.4%, and General Education weakness outweighed continued growth in Career Learning.
Core financial results
The quarter showed a clear divergence between GAAP and adjusted profitability. GAAP operating income and net income increased sharply, but gross profit, adjusted operating income, adjusted EBITDA and adjusted EPS all declined.
Full-year results were more favorable than the fourth quarter: fiscal 2026 revenue increased 4.7% to $2.52 billion, while full-year GAAP diluted EPS rose 20.0% to $7.14 and adjusted EPS increased 2.8% to $8.33.
| Metric | Fiscal Q4 2026 | Fiscal Q4 2025 | YoY change |
|---|---|---|---|
| Revenue | $636.1 million | $653.6 million | -2.7% |
| Gross profit / margin | $217.3 million / 34.2% | $238.9 million / 36.6% | -9.1%; margin -2.4 pp |
| GAAP operating income / margin | $105.9 million / 16.6% | $56.9 million / 8.7% | +86.1%; margin +7.9 pp |
| Net income | $81.4 million | $51.3 million | +58.6% |
| GAAP diluted EPS | $1.75 | $1.03 | +69.9% |
| Adjusted operating income / margin | $117.8 million / 18.5% | $130.6 million / 20.0% | -9.8%; margin -1.5 pp |
| Adjusted EPS | $2.12 | $2.29 | -7.4% |
| Adjusted EBITDA | $149.8 million | $158.4 million | -5.4% |
Business and segment performance
General Education was the main source of the consolidated revenue decline. Its $38.3 million year-over-year decrease more than offset the $20.7 million increase in total Career Learning revenue.
| Segment | Fiscal Q4 2026 revenue | Fiscal Q4 2025 revenue | YoY change |
|---|---|---|---|
| General Education | $355.8 million | $394.1 million | -9.7% |
| Career Learning—Middle and High School | $267.1 million | $240.5 million | +11.1% |
| Career Learning—Adult | $13.1 million | $19.1 million | -31.1% |
| Total Career Learning | $280.3 million | $259.5 million | +8.0% |
Average fourth-quarter enrollment declined 0.5% to 234,200, while Career Learning enrollment increased 9.7% to 106,400. Revenue per enrollment fell 0.4% overall to $2,620; General Education revenue per enrollment declined 1.0%, while the Career Learning measure rose 1.3%.
Stride’s enrollment figures cover students in full-service public or private programs and exclude the Adult Learning business. That distinction is important when comparing reported enrollment trends with total segment revenue.
The prior-year impairment drives the GAAP-adjusted profit split
Instructional costs and services increased about 1.0% to $418.8 million even as revenue declined, causing gross profit to fall 9.1% and gross margin to contract by approximately 2.4 percentage points. Selling, general and administrative expenses decreased 9.1% to $111.4 million, but this reduction was not enough to prevent adjusted operating margin from narrowing.
The sharp improvement in GAAP operating income primarily reflects a $59.5 million impairment of long-lived assets recorded in the prior-year quarter, compared with no such charge in fiscal Q4 2026. Once the impairment and other specified adjustments are excluded, adjusted operating income fell 9.8%, adjusted EBITDA declined 5.4% and adjusted EPS decreased 7.4%. The adjusted results therefore provide a different view of the quarter’s underlying profitability than the GAAP growth rates.
Cash flow, balance sheet and capital allocation
Stride provided cash-flow figures for the full fiscal year rather than the individual quarter. Fiscal 2026 operating cash flow was $433.8 million, compared with $432.8 million in fiscal 2025, despite the 17.5% increase in annual net income. Accounts receivable rose to $664.8 million from $559.6 million, and the annual cash-flow statement recorded a $121.4 million use of cash related to receivables.
Full-year capital expenditures increased to $78.8 million from $60.0 million, mainly including capitalized software and curriculum development. Based on operating cash flow less those expenditures, approximate full-year free cash flow declined to $355.0 million from $372.8 million.
The company reported $1.03 billion of cash, cash equivalents and marketable securities as of June 30, 2026, up from $1.01 billion one year earlier. Stride repurchased approximately $100 million of stock during the fourth quarter and $188.7 million during the full year. Another $311.3 million remained under the authorization, which was extended through October 31, 2027.
Risks investors need to watch
- General Education contraction: The segment’s 9.7% quarterly revenue decline was larger than Career Learning’s increase, making stabilization in this business important for consolidated growth.
- Underlying margin pressure: Revenue declined while instructional costs increased, compressing gross and adjusted operating margins. Continued cost growth without corresponding revenue growth could weigh on adjusted earnings.
- Uneven Career Learning performance: Middle and High School revenue grew 11.1%, but Adult revenue fell 31.1%, showing meaningful differences within the segment.
- Cash conversion and receivables: Full-year operating cash flow was nearly flat despite higher net income, while accounts receivable increased by $105.1 million. Further working-capital demands could limit cash conversion.
Summary
Stride’s fiscal fourth quarter combined lower revenue and weaker adjusted earnings with sharply higher GAAP profit, mainly because the prior-year period included a large impairment charge. Career Learning continued to expand but did not fully offset the contraction in General Education, while higher instructional costs pressured gross margin. The main items to monitor are General Education enrollment and revenue trends, adjusted margin performance, Adult Learning weakness and the conversion of reported earnings into cash flow.
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