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Stride Inc. (NYSE:LRN) released its Q3 FY2025 earnings presentation on April 29, 2025, showcasing record enrollment figures and strong financial performance that prompted management to raise its full-year guidance. The online education provider’s stock rose 3.71% to $147.88 in after-hours trading following the announcement.
Quarterly Performance Highlights
Stride reported Q3 FY2025 revenue of $613.4 million, an 18% increase compared to the same period last year. The company’s adjusted operating income surged 47% year-over-year to $141.7 million, while adjusted EBITDA grew 40% to $168.3 million, marking the most profitable quarter in Stride’s history.
For the first nine months of fiscal 2025, Stride generated revenue of $1.75 billion, up 16% from the prior year period. Adjusted operating income for the nine-month period reached $335.7 million, representing a 63% year-over-year increase.
As shown in the following chart of quarterly revenue and adjusted operating income growth, Stride has demonstrated consistent upward trends across both metrics:
The company’s performance continues to accelerate from its strong Q2 2024 results, when it reported 16% revenue growth and record enrollment of 230,000 students.
Enrollment Growth Analysis
Stride’s average Q3 enrollments reached 240,200, up 21.1% from the prior year period. General Education enrollments increased by 13.6% to 141,500, while Career Learning enrollments in the middle and high school segments surged 33.7% to 98,700 students.
The company noted that in-year enrollment growth continues to exceed expectations, with General Education enrollments increasing by 16,900 (14% year-over-year) and Career Learning enrollments growing by 24,900 (34% year-over-year).
The following chart details Stride’s enrollment trends across segments:
"We have posted record enrollments, exceeding 240,000 total average enrollments," noted the company in its presentation. The Career Learning segment continues to be the primary growth driver, though the adult learning portion of this segment declined 22.1% compared to the prior year.
Updated Guidance and Long-term Outlook
Based on its strong Q3 performance, Stride raised its full-year fiscal 2025 guidance. The company now expects revenue between $2.370 billion and $2.385 billion, up from its previous guidance of $2.320-$2.355 billion. Adjusted operating income guidance was also increased to $455-$465 million from the previous range of $430-$450 million.
The updated guidance represents a 17% year-over-year increase in revenue and a 57% increase in adjusted operating income at the midpoint of the ranges.
The following slide details the company’s updated guidance:
Looking further ahead, Stride reaffirmed its long-term growth targets for fiscal 2028, projecting a 10% compound annual growth rate (CAGR) for revenue and a 20% CAGR for both adjusted operating income and diluted earnings per share from fiscal 2023 through fiscal 2028.
The company’s long-term growth targets are illustrated in the following chart:
Balance Sheet and Capital Allocation Strategy
Stride reported a strong financial position with $754.6 million in cash, cash equivalents, and marketable securities as of March 31, 2025. The company’s total debt obligations stood at $512.7 million, resulting in a negative leverage ratio of (0.03)x, indicating a net cash position.
The following slide summarizes Stride’s balance sheet strength:
The company outlined its disciplined capital allocation strategy, which prioritizes organic growth, new product and technology development, and synergistic mergers and acquisitions. Management emphasized investments in academic quality, student experience, technology advancements, and innovative products.
"We are targeting high-growth, high-margin acquisitions and evaluating approaches to return cash to stockholders over the long term," the company stated in its presentation.
Strategic Initiatives
Stride highlighted its long-term investment thesis, built around disruption in education, sustainable growth in virtual schooling, new products and technologies, experienced leadership, and a strong financial track record.
The company continues to benefit from the accelerating secular shift toward virtual education and increased demand for school choice options. Stride’s platform allows it to leverage its capabilities and assets across multiple markets and verticals to address market failures in the education sector.
As the company progresses through fiscal 2025, its record enrollment, strong financial performance, and raised guidance suggest Stride remains well-positioned to capitalize on the growing demand for alternative education solutions and achieve its ambitious long-term growth targets.
Full presentation:
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