Stride reports third quarter 2026 financial results
Rhea-AI Summary
Stride (NYSE: LRN) reported third quarter fiscal 2026 results for the period ended March 31, 2026. Q3 revenue was $629.9 million, up 2.7% year-over-year, and net income was $88.5 million, down 10.9% versus prior year.
The company narrowed full-year 2026 guidance: revenue $2.490–2.520 billion, adjusted operating income $490–500 million, capex $75–80 million, and an effective tax rate of 24–25%.
Positive
- Career Learning revenue +12.3% in Q3
- Nine-month adjusted EBITDA +13.4% to $467.8 million
- Nine-month income from operations +13.7% to $344.9 million
Negative
- Q3 net income down 10.9% to $88.5 million
- Cash and marketable securities fell to $856.0 million from $1,011.4 million at June 30, 2025
- Q3 diluted EPS declined 4.5% to $1.93
Key Figures
Market Reality Check
Peers on Argus
LRN slipped 0.34% with high volume, while key education peers were mixed: TAL fell 2.37%, but LOPE, EDU, ATGE, and GHC rose between 0.97% and 2.91%. This pattern points to a stock-specific reaction to earnings rather than a broad sector move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 14 | Earnings call timing | Neutral | +0.5% | Announced date and access details for Q3 FY2026 earnings call. |
| Mar 10 | Enrollment expansion | Neutral | -0.8% | Opened enrollment for K12-powered virtual schools across Kansas. |
| Mar 09 | Enrollment expansion | Neutral | -1.8% | Enrollment opened for multiple K12-powered virtual schools in Alabama. |
| Mar 09 | Enrollment expansion | Neutral | -1.8% | K12-powered virtual public schools opened enrollment across Wisconsin. |
| Mar 06 | Enrollment expansion | Neutral | +0.6% | Washington K12 virtual schools announced statewide enrollment opening. |
Recent headlines were mainly routine enrollment and scheduling updates with modest single-day price moves, suggesting news flow has had relatively contained impact ahead of this earnings release.
Over the last few months, Stride’s news flow focused on operational expansion and communication rather than major financial shocks. Multiple March announcements highlighted K12-powered virtual school enrollment openings across states like Kansas, Alabama, Wisconsin, and Washington, each tied to modest price changes of between about -1.75% and 0.59%. An April earnings date notice on Apr 14, 2026 saw a mild 0.51% gain. Against this backdrop of steady enrollment-driven headlines, the current Q3 FY2026 earnings report adds concrete financial performance and guidance details.
Market Pulse Summary
This announcement details Q3 FY2026 performance, with revenue of $629.9M and nine-month revenue of $1,882.0M, alongside diluted EPS of $1.93 for the quarter and $5.39 year-to-date. Enrollments grew to 244.5K, including 110.1K in Career Learning, and the company held $856.0M in cash and securities. A narrowed FY2026 revenue outlook of $2.490B–$2.520B and adjusted operating income range of $490M–$500M frame expectations. Investors may watch revenue per enrollment, segment mix, and capital expenditures versus guidance in coming quarters.
Key Terms
ebitda financial
adjusted ebitda financial
non-gaap financial
capital expenditures financial
effective tax rate financial
AI-generated analysis. Not financial advice.
RESTON, Va., April 28, 2026 (GLOBE NEWSWIRE) -- Stride, Inc. (NYSE: LRN), one of the nation’s most successful technology-based education companies, today announced its results for the third quarter of fiscal year 2026 ended March 31, 2026.
Third Quarter Fiscal 2026 Highlights Compared to 2025
- Revenue of
$629.9 million , compared with$613.4 million - Income from operations of
$129.1 million , compared with$130.8 million - Net income of
$88.5 million , compared with$99.3 million - Diluted net income per share of
$1.93 , compared with$2.02 - Adjusted operating income of
$140.4 million , compared with$141.7 million (1) - Adjusted EBITDA of
$171.3 million , compared with$168.3 million (1) - Adjusted earnings per share of
$2.30 , compared with$2.33 (1)
Third Quarter Fiscal 2026 Summary Financial Metrics
| Three Months Ended March 31, | Change 2026/2025 | |||||||||
| 2026 | 2025 | $ | % | |||||||
| (In thousands, except percentages and per share data) | ||||||||||
| Revenues | $ | 629,873 | $ | 613,376 | $ | 16,497 | ||||
| Income from operations | 129,080 | 130,786 | (1,706) | ( | ||||||
| Adjusted operating income (1) | 140,424 | 141,744 | (1,320) | ( | ||||||
| Net income | 88,527 | 99,346 | (10,819) | ( | ||||||
| Net income per share, diluted | 1.93 | 2.02 | (0.09) | ( | ||||||
| Adjusted earnings per share (1) | 2.30 | 2.33 | (0.03) | ( | ||||||
| EBITDA (1) | 161,676 | 159,727 | 1,949 | |||||||
| Adjusted EBITDA (1) | 171,250 | 168,275 | 2,975 | |||||||
(1) To supplement our financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we also present non-GAAP financial measures including adjusted operating income (loss), EBITDA, adjusted EBITDA, and adjusted earnings per share. Management believes that these additional measures provide useful information to investors relating to our financial performance. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.
Nine Month Fiscal 2026 Highlights Compared to 2025
- Revenue of
$1,882.0 million , compared with$1,751.7 million - Income from operations of
$344.9 million , compared with$303.2 million - Net income of
$256.8 million , compared with$236.6 million - Diluted net income per share of
$5.39 , compared with$4.95 - Adjusted operating income of
$380.6 million , compared with$335.7 million (1) - Adjusted EBITDA of
$467.8 million , compared with$412.6 million (1) - Adjusted earnings per share of
$6.22 , compared with$5.83 (1)
Nine Month Fiscal 2026 Summary Financial Metrics
| Nine Months Ended March 31, | Change 2026/2025 | |||||||||
| 2026 | 2025 | $ | % | |||||||
| (In thousands, except percentages and per share data) | ||||||||||
| Revenues | $ | 1,882,017 | $ | 1,751,670 | $ | 130,347 | ||||
| Income from operations | 344,915 | 303,229 | 41,686 | |||||||
| Adjusted operating income (1) | 380,559 | 335,673 | 44,886 | |||||||
| Net income | 256,804 | 236,621 | 20,183 | |||||||
| Net income per share, diluted | 5.39 | 4.95 | 0.44 | |||||||
| Adjusted earnings per share (1) | 6.22 | 5.83 | 0.39 | |||||||
| EBITDA (1) | 437,698 | 387,699 | 49,999 | |||||||
| Adjusted EBITDA (1) | 467,761 | 412,621 | 55,140 | |||||||
Revenue Data
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
| March 31, | Change 2026 / 2025 | March 31, | Change 2026 / 2025 | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | 2025 | $ | % | ||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||
| General Education | $ | 357,463 | $ | 370,821 | $ | (13,358 | ) | (3.6 | %) | $ | 1,061,976 | $ | 1,054,542 | $ | 7,434 | 0.7 | % | ||||||||
| Career Learning | |||||||||||||||||||||||||
| Middle - High School | 259,520 | 223,868 | 35,652 | 15.9 | % | 776,610 | 635,832 | 140,778 | 22.1 | % | |||||||||||||||
| Adult | 12,890 | 18,687 | (5,797 | ) | (31.0 | %) | 43,431 | 61,296 | (17,865 | ) | (29.1 | %) | |||||||||||||
| Total Career Learning | 272,410 | 242,555 | 29,855 | 12.3 | % | 820,041 | 697,128 | 122,913 | 17.6 | % | |||||||||||||||
| Total Revenues | $ | 629,873 | $ | 613,376 | $ | 16,497 | 2.7 | % | $ | 1,882,017 | $ | 1,751,670 | $ | 130,347 | 7.4 | % | |||||||||
Enrollment and Revenue Per Enrollment Data
Third quarter enrollments were 244.5K, up
Enrollments only include those students in full service public or private programs where Stride provides a combination of curriculum, technology, and instructional and support services, inclusive of administrative support and may include enrollments for which Stride receives no public funding or revenue. Stride does not report enrollments for our Adult Learning business.
Revenue per enrollment for the third quarter was
Cash Flow and Capital Allocation
As of March 31, 2026, the Company’s cash and cash equivalents and marketable securities totaled
Capital expenditures for the three months ended March 31, 2026 were
Fiscal Year 2026 Outlook
The Company is narrowing its revenue, adjusted income, and capital expenditures forecast for the full fiscal year 2026:
- Revenue in the range of
$2.490 billion to$2.520 billion . - Capital expenditures in the range of
$75 million to$80 million . Note that capital expenditures include the purchase of property and equipment, and capitalized software and curriculum development costs as defined on our Statement of Cash Flows. - Effective tax rate of
24% to25% . - Adjusted operating income in the range of
$490 million to$500 million . (1)
(1) In addition to providing an outlook for revenue and capital expenditures, adjusted operating income is provided as a supplemental non-GAAP financial measure as management believes that it provides useful information to our investors. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below. Please also see Special Note on Forward-Looking Statements below.
Conference Call
The Company will discuss its third quarter of fiscal year 2026 financial results during a conference call scheduled for Tuesday, April 28, 2026 at 5:00 p.m. eastern time (ET).
A live webcast of the call will be available at investors.stridelearning.com/events-and-presentations. To participate in the live call, investors and analysts should dial (800) 715-9871 (domestic) or +1 (646) 307-1963 (international) and provide the conference ID number 8901384. Please access the website at least 15 minutes prior to the start of the call.
A replay of the call will be posted at investors.stridelearning.com/events-and-presentations.
About Stride Inc.
Stride Inc. (NYSE: LRN) is redefining lifelong learning with innovative, high-quality education solutions. Serving learners in primary, secondary, and postsecondary settings, Stride provides a wide range of services including K-12 education, career learning, professional skills training, and talent development. Stride reaches learners in all 50 states and over 100 countries. Learn more at stridelearning.com.
| Investor Contact ir@k12.com | Media Contact press@k12.com |
Special Note on Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements, including FY 2026 outlook. We have tried, whenever possible, to identify these forward-looking statements using words such as “outlook,” “forecasts,” “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “will be,” “expects,” “plans,” “intends,” “should,” “would” and similar expressions to identify forward-looking statements, whether in the negative or the affirmative. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: reduction of per pupil funding amounts at the schools we serve; inability to achieve a sufficient level of new enrollments to sustain our business model or meet guidance; limitations of the enrollment data we present, which may not fully capture trends in the performance of our business; failure to enter into new school contracts or renew existing contracts, in part or in their entirety; failure of the schools we serve, our vendors, or us to comply with our contracts, or federal, state and local laws and regulations, resulting in a loss of funding, an obligation to repay funds previously received, contractual remedies, or actions or proceedings against us; governmental investigations that could result in fines, penalties, settlements, or injunctive relief; declines or variations in academic performance outcomes of the students and schools we serve, including due to the evolution of curriculum standards, testing programs and state accountability metrics; harm to our reputation resulting from poor performance or misconduct by operators or us in any school in our industry and/or in any school which we operate; legal and regulatory challenges from opponents of virtual public education or for-profit education companies; changes in national and local economic and business conditions and other factors, such as natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts, or a reduction or termination in the scope of services, with schools; failure to develop the Career Learning business; entry of new competitors with superior technologies (including artificial intelligence) and lower prices; unsuccessful integration of mergers, acquisitions and joint ventures; failure to further develop, maintain and enhance our technology, products, services and brands; inadequate recruiting, training and retention of effective teachers and employees; infringement of our intellectual property; disruptions to our Internet-based learning and delivery systems, including, but not limited to, our data storage systems and third-party cloud systems and facilities, resulting from cybersecurity attacks; misuse or unauthorized disclosure of student and personal data; failure to prevent or mitigate a cybersecurity incident that affects our systems; problems in the implementation of new IT systems and technology; failure by us or third parties to maintain and support information technology systems, including addressing quality issues and timely delivering new products and enhancements; risks related to artificial intelligence; and other risks and uncertainties associated with our business described in the risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended June 30, 2025 and any subsequently filed Quarterly Reports on Form 10-Q or the Company’s other filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this press release is as of today’s date, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.
Financial Statements
The financial statements set forth below are not the complete set of Stride, Inc.’s financial statements for the three and nine months ended March 31, 2026 and are presented below without footnotes. Readers are encouraged to obtain and carefully review Stride Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, including all financial statements contained therein and the footnotes thereto, filed with the SEC, which may be retrieved from the SEC’s website at www.sec.gov or from Stride Inc.’s Investor Relations website at investors.stridelearning.com.
| STRIDE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| March 31, | March 31, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (In thousands except share and per share data) | |||||||||||||||
| Revenues | $ | 629,873 | $ | 613,376 | $ | 1,882,017 | $ | 1,751,670 | |||||||
| Instructional costs and services | 398,308 | 364,086 | 1,148,699 | 1,046,670 | |||||||||||
| Gross margin | 231,565 | 249,290 | 733,318 | 705,000 | |||||||||||
| Selling, general, and administrative expenses | 102,485 | 118,504 | 388,403 | 401,771 | |||||||||||
| Income from operations | 129,080 | 130,786 | 344,915 | 303,229 | |||||||||||
| Interest expense, net | (3,001 | ) | (2,787 | ) | (8,889 | ) | (7,810 | ) | |||||||
| Other income (expense), net | (5,338 | ) | 7,360 | 811 | 23,469 | ||||||||||
| Income before income taxes and loss from equity method investments | 120,741 | 135,359 | 336,837 | 318,888 | |||||||||||
| Income tax expense | (31,545 | ) | (35,450 | ) | (79,934 | ) | (80,088 | ) | |||||||
| Loss from equity method investments | (669 | ) | (563 | ) | (99 | ) | (2,179 | ) | |||||||
| Net income attributable to common stockholders | $ | 88,527 | $ | 99,346 | $ | 256,804 | $ | 236,621 | |||||||
| Net income attributable to common stockholders per share: | |||||||||||||||
| Basic | $ | 2.09 | $ | 2.31 | $ | 5.98 | $ | 5.50 | |||||||
| Diluted | $ | 1.93 | $ | 2.02 | $ | 5.39 | $ | 4.95 | |||||||
| Weighted average shares used in computing per share amounts: | |||||||||||||||
| Basic | 42,330,276 | 43,092,682 | 42,925,740 | 42,992,727 | |||||||||||
| Diluted | 45,835,843 | 49,181,728 | 47,607,602 | 47,798,923 | |||||||||||
| STRIDE, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| March 31, | June 30, | ||||||
| 2026 | 2025 | ||||||
| (audited) | |||||||
| ASSETS | (In thousands except share and per share data) | ||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 614,047 | $ | 782,497 | |||
| Accounts receivable, net of allowance of | 854,874 | 559,646 | |||||
| Inventories, net | 21,501 | 37,570 | |||||
| Prepaid expenses | 64,573 | 35,579 | |||||
| Marketable securities | 191,793 | 202,769 | |||||
| Other current assets | 12,002 | 14,673 | |||||
| Total current assets | 1,758,790 | 1,632,734 | |||||
| Property and equipment, net | 103,281 | 78,582 | |||||
| Capitalized software, net | 82,653 | 75,314 | |||||
| Capitalized curriculum development costs, net | 62,444 | 58,584 | |||||
| Intangible assets, net | 12,646 | 18,227 | |||||
| Goodwill | 246,676 | 246,676 | |||||
| Deferred tax asset | — | 26,377 | |||||
| Deposits and other assets | 180,446 | 157,465 | |||||
| Total assets | $ | 2,446,936 | $ | 2,293,959 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 45,090 | $ | 43,962 | |||
| Accrued liabilities | 96,775 | 103,276 | |||||
| Accrued compensation and benefits | 60,449 | 74,939 | |||||
| Deferred revenue | 19,118 | 26,995 | |||||
| Current portion of finance lease liability | 58,499 | 42,316 | |||||
| Current portion of operating lease liability | 3,239 | 11,391 | |||||
| Total current liabilities | 283,170 | 302,879 | |||||
| Long-term finance lease liability | 59,297 | 44,567 | |||||
| Long-term operating lease liability | 8,807 | 35,164 | |||||
| Long-term debt | 417,579 | 416,322 | |||||
| Deferred tax liability | 17,503 | — | |||||
| Other long-term liabilities | 18,655 | 15,408 | |||||
| Total liabilities | 805,011 | 814,340 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity | |||||||
| Preferred stock, par value | — | — | |||||
| Common stock, par value | 4 | 4 | |||||
| Additional paid-in capital | 729,851 | 735,711 | |||||
| Accumulated other comprehensive loss | (59 | ) | (67 | ) | |||
| Retained earnings | 1,103,257 | 846,453 | |||||
| Treasury stock of 6,607,533 and 5,334,743 shares at cost, respectively | (191,128 | ) | (102,482 | ) | |||
| Total stockholders’ equity | 1,641,925 | 1,479,619 | |||||
| Total liabilities and stockholders' equity | $ | 2,446,936 | $ | 2,293,959 | |||
| STRIDE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| Nine Months Ended | |||||||
| March 31, | |||||||
| 2026 | 2025 | ||||||
| (In thousands) | |||||||
| Cash flows from operating activities | |||||||
| Net income | $ | 256,804 | $ | 236,621 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization expense | 92,783 | 84,470 | |||||
| Stock-based compensation expense | 30,063 | 24,922 | |||||
| Deferred income taxes | 45,622 | 5,655 | |||||
| Provision for credit losses | 10,689 | 13,357 | |||||
| Amortization of fees on debt | 1,257 | 1,238 | |||||
| Noncash operating lease expense | 4,541 | 9,230 | |||||
| Other | 11,877 | 1,712 | |||||
| Changes in assets and liabilities: | |||||||
| Accounts receivable | (305,903 | ) | (240,429 | ) | |||
| Inventories, prepaid expenses, deposits and other current and long-term assets | 11,606 | (3,643 | ) | ||||
| Accounts payable | 1,249 | (528 | ) | ||||
| Accrued liabilities | (8,768 | ) | 8,463 | ||||
| Accrued compensation and benefits | (14,275 | ) | 4,149 | ||||
| Operating lease liability | (15,950 | ) | (9,583 | ) | |||
| Deferred revenue and other liabilities | (4,632 | ) | (1,142 | ) | |||
| Net cash provided by operating activities | 116,963 | 134,492 | |||||
| Cash flows from investing activities | |||||||
| Purchase of property and equipment | (587 | ) | (1,350 | ) | |||
| Capitalized software development costs | (37,471 | ) | (28,605 | ) | |||
| Capitalized curriculum development costs | (18,156 | ) | (15,451 | ) | |||
| Other acquisitions, loans and investments, net of distributions | (54,342 | ) | (1,681 | ) | |||
| Proceeds from the maturity of marketable securities | 213,886 | 221,530 | |||||
| Purchases of marketable securities | (222,643 | ) | (227,786 | ) | |||
| Net cash used in investing activities | (119,313 | ) | (53,343 | ) | |||
| Cash flows from financing activities | |||||||
| Repayments on finance lease obligations | (41,277 | ) | (29,957 | ) | |||
| Purchase of treasury stock | (88,645 | ) | - | ||||
| Repurchase of restricted stock for income tax withholding | (36,178 | ) | (20,672 | ) | |||
| Net cash used in financing activities | (166,100 | ) | (50,629 | ) | |||
| Net change in cash, cash equivalents and restricted cash | (168,450 | ) | 30,520 | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 782,497 | 500,614 | |||||
| Cash, cash equivalents and restricted cash, end of period | $ | 614,047 | $ | 531,134 | |||
| Reconciliation of cash, cash equivalents and restricted cash to balance sheet as of March 31st: | |||||||
| Cash and cash equivalents | $ | 614,047 | $ | 528,547 | |||
| Other current assets (restricted cash) | — | 476 | |||||
| Deposits and other assets (restricted cash) | — | 2,111 | |||||
| Total cash, cash equivalents and restricted cash | $ | 614,047 | $ | 531,134 | |||
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with GAAP, we have presented adjusted operating income (loss), EBITDA, adjusted EBITDA, and adjusted earnings per share, which are not presented in accordance with GAAP.
- Adjusted operating income (loss) is defined as income (loss) from operations as adjusted for amortization of intangible assets, stock-based compensation, and other one-time charges or gains.
- EBITDA is defined as income (loss) from operations as adjusted for depreciation and amortization.
- Adjusted EBITDA is defined as income (loss) from operations as adjusted for depreciation and amortization, stock-based compensation, and other one-time charges or gains.
- Adjusted earnings per share (adjusted EPS) is defined as net income (loss) attributable to common stockholders as adjusted for the amortization of intangible assets, stock-based compensation, and other one-time charges or gains net of tax impact divided by the diluted weighted average number of common shares outstanding less the shares expected to be received for the capped call transaction related to Stride’s convertible senior notes.
Adjusted operating income (loss), adjusted EBITDA, and adjusted EPS exclude stock-based compensation, which consists of expenses for restricted stock, restricted stock units, and performance stock units.
Management believes that the presentation of these non-GAAP financial measures provides useful information to investors relating to our financial performance. Adjusted operating income (loss), adjusted EBITDA and adjusted EPS remove stock-based compensation, which is a non-cash charge that varies based on market volatility and the terms and conditions of the awards. EBITDA and adjusted EBITDA remove depreciation and amortization, which can vary depending upon accounting methods and the book value of assets. Adjusted operating income (loss), adjusted EBITDA and adjusted earnings per share remove one-time charges or gains which are not related to core operating activities and are not indicative of our ongoing operating performance. Additionally, adjusted EPS includes the impact from shares expected to be received by the Company to offset potential dilution from the convertible senior notes. EBITDA and adjusted EBITDA provide a measure of corporate performance exclusive of capital structure and the method by which assets were acquired.
Management uses these non-GAAP financial measures:
- as additional measures of operating performance because they assist in comparing the Company’s performance on a consistent basis; and
- in presentations to the members of the Company’s Board of Directors to enable the Board to review the same measures used by management to compare the Company’s current operating results with corresponding prior periods.
Other companies may define these non-GAAP financial measures differently and, as a result, these non-GAAP financial measures may not be directly comparable to similar non-GAAP financial measures used by other companies. Although these non-GAAP financial measures are used to assess the performance of the business, the use of non-GAAP financial measures is limited as they include and/or do not include certain items included and/or not included in the most directly comparable GAAP financial measure.
These non-GAAP financial measures should be considered in addition to, and not as a substitute for, revenues, income (loss) from operations, net income (loss) and diluted net income (loss) per share or other related financial information prepared in accordance with GAAP. Adjusted EBITDA is not intended to be a measure of liquidity. You are cautioned not to place undue reliance on these non-GAAP financial measures.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below.
Third Quarter Fiscal Year 2026
Reconciliation of Income from Operations to Adjusted Operating Income
| Three Months Ended | Nine Months Ended | ||||||||||
| March 31, | March 31, | ||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| (In thousands) | |||||||||||
| Income from operations | $ | 129,080 | $ | 130,786 | $ | 344,915 | $ | 303,229 | |||
| Amortization of intangible assets | 1,770 | 2,410 | 5,581 | 7,522 | |||||||
| Stock-based compensation expense | 9,574 | 8,548 | 30,063 | 24,922 | |||||||
| Adjusted operating income | $ | 140,424 | $ | 141,744 | $ | 380,559 | $ | 335,673 | |||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In thousands) | ||||||||||||||
| Net income | $ | 88,527 | $ | 99,346 | $ | 256,804 | $ | 236,621 | ||||||
| Interest expense, net | 3,001 | 2,787 | 8,889 | 7,810 | ||||||||||
| Other (income) expense, net | 5,338 | (7,360 | ) | (811 | ) | (23,469 | ) | |||||||
| Income tax expense | 31,545 | 35,450 | 79,934 | 80,088 | ||||||||||
| Loss from equity method investments | 669 | 563 | 99 | 2,179 | ||||||||||
| Depreciation and amortization | 32,596 | 28,941 | 92,783 | 84,470 | ||||||||||
| EBITDA | 161,676 | 159,727 | 437,698 | 387,699 | ||||||||||
| Stock-based compensation expense | 9,574 | 8,548 | 30,063 | 24,922 | ||||||||||
| Adjusted EBITDA | $ | 171,250 | $ | 168,275 | $ | 467,761 | $ | 412,621 | ||||||
Reconciliation of Net Income Attributable to Common Shareholders and Diluted Net Income Per Share to Adjusted Earnings Per Share
| Three Months Ended | Nine Months Ended | ||||||||||||||
| March 31, | March 31, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (In thousands) | |||||||||||||||
| Net income attributable to common stockholders | $ | 88,527 | $ | 99,346 | $ | 256,804 | $ | 236,621 | |||||||
| Amortization of intangible assets | 1,770 | 2,410 | 5,581 | 7,522 | |||||||||||
| Stock-based compensation expense | 9,574 | 8,548 | 30,063 | 24,922 | |||||||||||
| Income tax effect from adjustments above | (942 | ) | (617 | ) | (11,749 | ) | (6,132 | ) | |||||||
| Adjusted net income attributable to common stockholders | $ | 98,929 | $ | 109,687 | $ | 280,699 | $ | 262,933 | |||||||
| Share computation: | |||||||||||||||
| Weighted average common shares — diluted | 45,835,843 | 49,181,728 | 47,607,602 | 47,798,923 | |||||||||||
| Effect of capped call transactions | (2,764,425 | ) | (2,092,035 | ) | (2,481,111 | ) | (2,669,924 | ) | |||||||
| Adjusted weighted average common shares — diluted | 43,071,418 | 47,089,693 | 45,126,491 | 45,128,999 | |||||||||||
| Adjusted earnings per share | $ | 2.30 | $ | 2.33 | $ | 6.22 | $ | 5.83 | |||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| March 31, | March 31, | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| (per share) | |||||||||||||||
| Diluted net income per share | $ | 1.93 | $ | 2.02 | $ | 5.39 | $ | 4.95 | |||||||
| Amortization of intangible assets | 0.04 | 0.05 | 0.12 | 0.16 | |||||||||||
| Stock-based compensation expense | 0.21 | 0.17 | 0.64 | 0.52 | |||||||||||
| Income tax effect from adjustments above | (0.02 | ) | (0.01 | ) | (0.25 | ) | (0.13 | ) | |||||||
| Effect of capped call transactions | 0.14 | 0.10 | 0.32 | 0.33 | |||||||||||
| Adjusted earnings per share | $ | 2.30 | $ | 2.33 | $ | 6.22 | $ | 5.83 | |||||||
Fiscal Year 2026 Outlook
Reconciliation of Income from Operations to Adjusted Operating Income (unaudited)
| Year Ended June 30, 2026 | |||||
| Low | High | ||||
| Income from operations | $ | 443.0 | $ | 450.0 | |
| Stock-based compensation expense | 40.0 | 42.0 | |||
| Amortization of intangible assets | 7.0 | 8.0 | |||
| Adjusted operating income | $ | 490.0 | $ | 500.0 | |
