Stride, Inc.

Previous wording

Certain statements in Management’s Discussion and Analysis or MD&A, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, which we refer to as our Annual Report, and those referenced in our other SEC filings, including in Part II, Item 1A of this Quarterly Report. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements.

Current wording

Certain statements in Management’s Discussion and Analysis or MD&A, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements generally are identified by the words “outlook,” “forecasts,” “anticipates,” “trends,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “will be,” “expects,” “plans,” “intends,” “should,” “would” and similar expressions. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, which we refer to as our Annual Report, and those referenced in our other SEC filings, including in Part II, Item 1A of this Quarterly Report. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events or circumstances after the date hereof that may bear upon forward-looking statements, except where we are expressly required to do so by law. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements.

Previous wording

We provide a wide range of products and services across our platform with the ability to deliver customized solutions. Our comprehensive school-as-a-service offering supports our clients in operating full-time virtual schools in the K-12 market. Together with our network of online schools, Stride has served millions of students with our products and services. In our most recent academic year ended June 30, 2025, we graduated 19,045 high school students from our partner schools.

Current wording

We provide a wide range of products and services across our platform with the ability to deliver customized solutions. Our comprehensive school-as-a-service offering supports our clients in operating full-time virtual schools in the K-12 market. Together with our network of online schools, Stride has served millions of students with our products and services. In our most recent academic year ended June 30, 2026, we graduated 20,815 high school students from our partner schools.

Previous wording

For the 2025-2026 school year, we provide our school-as-a-service offering to 92 schools in 31 states and the District of Columbia in the General Education market, and 57 schools or programs in 25 states in the Career Learning market.

Current wording

For the 2026-2027 school year, we provide our school-as-a-service offering to 97 schools in 32 states and the District of Columbia in the General Education market, and 59 schools or programs in 26 states in the Career Learning market.

Previous wording

We generate a significant portion of our revenues from the sale of curriculum, administration support and technology services to virtual and blended public schools. The amount of revenue generated from these contracts is impacted largely by the number of enrollments, the mix of enrollments across grades and states, state or district per student funding levels and attendance requirement, among other items.

Current wording

We generate a significant portion of our revenues from the sale of curriculum, administration support and technology services to virtual and blended public schools. The amount of revenue generated from these contracts is impacted largely by the number of enrollments, the mix of enrollments across grades and states, state or district per student funding levels and attendance requirements, among other items.

Previous wording

The two key financial metrics that we use to assess financial performance are revenues and operating income. During the nine months ended March 31, 2026, revenues increased to $1,882.0 million from $1,751.7 million in the prior year, an increase of 7.4%. Over the same period, operating income increased to $344.9 million from $303.2 million in the prior year, an increase of 13.8%. The increase in operating income was driven by revenue growth and an increase in gross margin. Additionally, we use the non-financial metric of total enrollments to assess performance, as enrollment is a key driver of our revenues. Total enrollments for the nine months ended March 31, 2026 were 246.7 thousand, an increase of 13.2 thousand, or 5.7%, over the prior year. Our revenues are subject to annual school district financial audits, which incorporate enrollment counts, funding and other routine financial audit considerations. The results from these audits and other routine changes in funding estimates are incorporated into the Company’s monthly funding estimates for the current and prior periods. Historically, aggregate funding estimates have differed from actual reimbursements, generally in the range of 2% of annual revenue or less, which may vary from quarter to quarter.

Current wording

The two key financial metrics that we use to assess financial performance are revenues and operating income. During the three months ended September 30, 2026, revenues increased to $639.4 million from $620.9 million in the same period in the prior year, an increase of 3.0%. Over the same period, operating income increased to $84.3 million from $69.0 million in the same period in the prior year, an increase of 22.2%. The increase in operating income was driven by revenue growth and lower selling, general, and administrative expenses. Additionally, we use the non-financial metric of total enrollments to assess performance, as enrollment is a key driver of our revenues. Total enrollments for the three months ended September 30, 2026 were 241.4 thousand, a decrease of 6.3 thousand, or 2.5%, over the same period in the prior year. Our revenues are subject to annual school district financial audits, which incorporate enrollment counts, funding and other routine financial audit considerations. The results from these audits and other routine changes in funding estimates are incorporated into the Company’s monthly funding estimates for the current and prior periods. Historically, aggregate funding estimates have differed from actual reimbursements, generally in the range of 2% of annual revenue or less, which may vary from quarter to quarter.

Previous wording

Revenues are captured by market based on the underlying customer contractual agreements. Where customers purchase products and services for both General Education and Career Learning markets we allocate revenues based on the program for which each student is enrolled. All kindergarten through fifth grade students are considered General Education students. Periodically, a middle school or high school student enrollment may change line of revenue classification.

Current wording

Revenues are captured by market based on the underlying customer contractual agreements. Where customers purchase products and services for both General Education and Career Learning markets, we allocate revenues based on the program for which each student is enrolled. All kindergarten through fifth grade students are considered General Education students. Periodically, a middle school or high school student enrollment may change the line of revenue classification.

Previous wording

Systems – We have established a secure and reliable technology platform, which integrates proprietary and third-party systems, to provide a high-quality educational environment and gives us the capability to grow our customer programs and enrollment. Our end-to-end platform includes single-sign on capability for our content management, learning management, student information, data reporting and analytics, and various support systems that allow customers to provide a high-quality and personalized educational experience for students. Stand-alone products and services can provide curriculum and content hosting on customers’ learning management systems, or integration with customers’ student information systems.

Current wording

Systems – We continue to focus on establishing a secure and reliable technology platform, which integrates proprietary and industry-standard third-party systems, to provide a high-quality educational environment and gives us the capability to grow our customer programs and enrollment. Our end-to-end platform includes single sign-on capability for our content management, learning management, student information, data reporting and analytics, and various support systems that allow customers to provide a high-quality and personalized educational experience for students. Stand-alone products and services can provide curriculum and content hosting on customers’ learning management systems, or integration with customers’ student information systems.

Previous wording

Instructional Services – We provide a broad range of instructional services that includes customer support for instructional teams, including recruitment of state - certified teachers, training in research-based online instruction methods and Stride systems, oversight and evaluation services, and ongoing professional development. Stride also provides training options to support teachers and parents to meet students’ learning needs. Stride’s range of training options are designed to enhance skills needed to teach using an online learning platform, and include hands-on training, on-demand courses, and support materials.

Current wording

Instructional Services – We provide a broad range of instructional services that includes customer support for instructional teams, including recruitment of state certified teachers, training in research-based online instruction methods and Stride systems, oversight and evaluation services, and ongoing professional development. Stride also provides training options to support teachers and parents to meet students’ learning needs. Stride’s range of training options is designed to enhance skills needed to teach using an online learning platform, and include hands-on training, on-demand courses, and support materials.

Previous wording

Comparison of the Three Months Ended March 31,2026 and 2025

Current wording

Comparison of the Three Months Ended September 30,2026 and 2025

Previous wording

Revenues. Our revenues for the three months ended March 31, 2026 were $629.9 million, an increase of $16.5 million, or 2.7%, from $613.4 million for the same period in the prior year. General Education revenues decreased $13.4 million, or 3.6%, year over year. The primary drivers for the decrease in revenue were changes in client mix, and a 5.0% decrease in enrollments. Career Learning revenues increased $29.9 million, or 12.3%, primarily due to an 11.6% increase in enrollments and client mix. In addition, revenue recognized in each of the periods includes certain adjustments resulting from the completion of state and district audits and reconciliation processes related to services provided in prior years. These adjustments were not material and were recognized in the period in which the audit or reconciliation was finalized and the outcome became known and reasonably estimable. While these items contributed to reported revenue in each period, they were not a significant driver of the year over year change.

Current wording

Revenues. Our revenues for the three months ended September 30, 2026 were $639.4 million, an increase of $18.5 million, or 3.0%, from $620.9 million for the same period in the prior year. General Education revenues decreased $6.5 million, or 1.8%, year over year. The primary drivers for the decrease in General Education revenue were changes in school mix and a 6.2% decrease in enrollments. Career Learning revenues increased $25.0 million, or 9.7%, primarily due to a 2.0% increase in enrollments and school mix. In addition, revenue recognized in each of the periods includes certain adjustments resulting from the completion of state and district audits and reconciliation processes related to services provided in prior years. These adjustments were not material and were recognized in the period in which the audit or reconciliation was finalized and the outcome became known and reasonably estimable. While these items contributed to reported revenue in each period, they were not a significant driver of the year over year change.

Previous wording

*Instructional costs and services expenses.*Instructional costs and services expenses for the three months ended March 31, 2026 were $398.3 million, an increase of $34.2 million, or 9.4%, from $364.1 million for the same period in the prior year. This increase in expense was due to hiring of personnel in growth states and salary increases. Instructional costs and services expenses were 63.2% of revenues during the three months ended March 31, 2026, an increase from 59.4% for the three months ended March 31, 2025.

Current wording

*Instructional costs and services expenses.*Instructional costs and services expenses for the three months ended September 30, 2026 were $398.3 million, an increase of $19.5 million, or 5.1%, from $378.8 million for the same period in the prior year. This increase in expense was due to personnel and salary increases, as well as an increase in student computer costs. Instructional costs and services expenses were 62.3% of revenues during the three months ended September 30, 2026, an increase from 61.0% for the three months ended September 30, 2025.

Previous wording

Selling, general, and administrative expenses. Selling, general, and administrative expenses for the nine months ended March 31, 2026 were $388.4 million, a decrease of $13.4 million, or 3.3%, from $401.8 million for the same period in the prior year. The decrease was primarily due to a decrease of $11.3 million in personnel and related benefit costs and a decrease of $2.7 million in bad debt expense, partially offset by an increase of $1.2 million in professional services. Selling, general, and administrative expenses were 20.6% of revenues during the nine months ended March 31, 2026, a decrease from 22.9% for the nine months ended March 31, 2025.

Current wording

Selling, general, and administrative expenses. Selling, general, and administrative expenses for the three months ended September 30, 2026 were $156.8 million, a decrease of $16.3 million, or 9.4%, from $173.1 million for the same period in the prior year. The decrease was primarily due to a decrease of $19.9 million in personnel and related benefit costs (including negative stock-based compensation expense related to the forfeiture of certain awards) and a decrease of $1.2 million in bad debt expense, partially offset by an increase of $8.1 million in professional services. Selling, general, and administrative expenses were 24.5% of revenues during the three months ended September 30, 2026, a decrease from 27.9% for the three months ended September 30, 2025.

Previous wording

Interest expense, net. Net interest expense for the three months ended March 31, 2026 was $3.0 million as compared to $2.8 million for the same period in the prior year. The increase in net interest expense was primarily due to an increase in our finance leases.

Current wording

Interest expense, net. Net interest expense for the three months ended September 30, 2026 was $2.9 million as compared to $3.1 million for the same period in the prior year. The decrease in net interest expense was primarily due to finance leases ending or aging and new leases executed at lower average rates.

Previous wording

Other income (expense), net. Other income (expense), net for the three months ended March 31, 2026 was expense of $5.3 million as compared to income of $7.4 million for the same period in the prior year. The change in other income (expense), net was due to unrealized losses related to our investments in publicly-held equity securities.

Current wording

Other income, net. Other income, net for the three months ended September 30, 2026 was $1.5 million as compared to $16.9 million for the same period in the prior year. The change in other income, net was primarily due to changes in the fair market value related to our investments in publicly held equity securities.

Previous wording

Income tax expense. Income tax expense was $79.9 million for the nine months ended March 31, 2026, or 23.7% of income before income taxes, as compared to $80.1 million, or 25.3% of income before income taxes for the same period in the prior year. The decrease in the effective income tax rate for the nine months ended March 31, 2026, as compared to the effective tax rate for the nine months ended March 31, 2025, was primarily due to stock-based compensation.

Current wording

Income tax expense. Income tax expense was $17.8 million for the three months ended September 30, 2026, or 21.6% of income before income taxes, as compared to $14.4 million, or 17.3% of income before income taxes for the same period in the prior year. The increase in the effective income tax rate for the three months ended September 30, 2026, as compared to the effective tax rate for the three months ended September 30, 2025, was primarily due to stock-based compensation.

Previous wording

As of March 31, 2026, we had net working capital, or current assets minus current liabilities, of $1,475.6 million. Our working capital includes cash and cash equivalents of $614.1 million and accounts receivable of $854.9 million. Our working capital provides a significant source of liquidity for our normal operating needs. Our accounts receivable balance fluctuates throughout the fiscal year based on the timing of customer billings and collections and tends to be highest in our first fiscal quarter as we begin billing for students. In addition, our cash and accounts receivable were significantly in excess of our accounts payable and short-term accrued liabilities at March 31, 2026.

Current wording

As of September 30, 2026, we had net working capital, or current assets minus current liabilities, of $1,068.8 million. Our working capital includes cash and cash equivalents of $547.8 million and accounts receivable of $854.8 million. Our working capital provides a significant source of liquidity for our normal operating needs. Our accounts receivable balance fluctuates throughout the fiscal year based on the timing of customer billings and collections and tends to be highest in our first fiscal quarter as we begin billing for students. In addition, our cash and accounts receivable were significantly in excess of our accounts payable and short-term accrued liabilities at September 30, 2026.

Previous wording

Before June 1, 2027, noteholders will have the right to convert their Notes only upon the occurrence of certain events. After June 1, 2027, noteholders may convert their Notes at any time at their election until two days prior to the maturity date. We will settle conversions by paying cash up to the outstanding principal amount, and at our election, will settle the conversion spread by paying or delivering cash or shares of our common stock, or a combination of cash and shares of our common stock. The initial conversion rate is 18.9109 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $52.88 per share of common stock. The Notes are redeemable at our option at any time after September 6, 2024 at a cash redemption price equal to the principal amount of the Notes, plus accrued and unpaid interest, subject to certain stock price hurdles as discussed in the Indenture.

Current wording

Before June 1, 2027, noteholders will have the right to convert their Notes only upon the occurrence of certain events. After June 1, 2027, noteholders may convert their Notes at any time at their election until two days prior to the maturity date. We must settle conversions by paying cash up to the outstanding principal amount of $420.0 million, and at our election, will settle the conversion spread by paying or delivering cash or shares of our common stock, or a combination of cash and shares of our common stock. The initial conversion rate is 18.9109 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $52.88 per share of common stock. The Notes are redeemable at our option at any time after September 6, 2024 at a cash redemption price equal to the principal amount of the Notes, plus accrued and unpaid interest, subject to certain stock price hurdles as discussed in the Indenture.

Previous wording

We are a lessee under finance leases for computers and peripherals under agreements with Banc of America Leasing & Capital, LLC (“BALC”) and CSI Leasing, Inc. (“CSI Leasing”). As of March 31, 2026 and June 30, 2025, the finance lease liability was $117.8 million and $86.9 million, respectively, with lease interest rates ranging from 4.18% to 6.72%.

Current wording

We are a lessee under finance leases for computers and peripherals under agreements with Banc of America Leasing & Capital, LLC (“BALC”) and CSI Leasing, Inc. (“CSI Leasing”). As of September 30, 2026 and June 30, 2026, the finance lease liability was $190.1 million and $116.9 million, respectively, with lease interest rates ranging from 4.12% to 6.35%.

Previous wording

We entered into agreements with BALC and CSI Leasing in April 2020 and August 2022, respectively, to provide financing for our computers and peripherals. Individual leases with BALC include 36-month payment terms, fixed rates ranging from 4.75% to 6.72%, and a $1 purchase option at the end of each lease term. We pledged the assets financed to secure the outstanding leases. Individual leases under the agreement with CSI Leasing include 36-month payment terms, but do not include a stated interest rate. We use our incremental borrowing rate as the implied interest rate and the total lease payments to calculate our lease liability.

Current wording

We entered into agreements with BALC and CSI Leasing in April 2020 and August 2022, respectively, to provide financing for our computers and peripherals. Individual leases with BALC include 36-month payment terms, fixed rates ranging from 4.75% to 6.23%, and a $1 purchase option at the end of each lease term. We pledged the assets financed to secure the outstanding leases. Individual leases under the agreement with CSI Leasing include 36-month payment terms, but do not include a stated interest rate. We use our incremental borrowing rate as the implied interest rate and the total lease payments to calculate our lease liability.

Previous wording

On November 3, 2025, our board of directors authorized a stock repurchase program for the purchase of up to $500 million of the Company’s common stock until October 31, 2026. Share repurchases may be made for cash in open market transactions at prevailing market prices or in privately negotiated transactions or otherwise.

Current wording

On November 3, 2025, our Board of Directors authorized a stock repurchase program for the purchase of up to $500 million of the Company’s common stock until October 31, 2026. On August 3, 2026, the Audit Committee of the Board of Directors authorized an extension through October 31, 2027. Share repurchases may be made for cash in open market transactions at prevailing market prices or in privately negotiated transactions or otherwise.

Previous wording

Our cash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual obligations with respect to interest on our Notes, office facility leases, capital equipment leases and other operating leases. We expect to make future payments on existing leases from cash generated from operations. We believe that the combination of funds to be generated from operations and net working capital on hand will be adequate to finance our ongoing operations on a short-term (the next 12 months) and long-term (beyond the next 12 months) basis. In addition, we

Current wording

We expect to make future payments on existing leases from cash generated from operations. We believe that the combination of funds to be generated from operations and net working capital on hand will be adequate to finance our ongoing operations on a short-term (the next 12 months) and long-term (beyond the next 12 months) basis. In addition, we continue to explore acquisitions, strategic investments and joint ventures related to our business that we may acquire using cash, stock, debt, contribution of assets or a combination thereof.

Previous wording

Net cash provided by operating activities for the nine months ended March 31, 2026 was $117.0 million compared to $134.5 million for the nine months ended March 31, 2025. The $17.5 million decrease in cash provided by operating activities was primarily due to changes in working capital, driven mainly by changes in accounts receivable, accrued compensation and benefits and accrued liabilities, partially offset by higher net income adjusted for non-cash items.

Current wording

Net cash used in operating activities for the three months ended September 30, 2026 was $124.8 million compared to $195.8 million for the three months ended September 30, 2025. The $71.0 million decrease in cash used in operating activities was primarily due to favorable changes in working capital, driven mainly by changes in accounts receivable, and accrued liabilities, partially offset by lower net income adjusted for non-cash items.

Previous wording

Net cash used in investing activities for the nine months ended March 31, 2026 was $119.3 million compared to $53.3 million for the nine months ended March 31, 2025. The $66.0 million increase in cash used in investing activities was primarily due to an increase in investments of $52.7 million, a year over year increase in capital expenditures of $10.8 million and higher net purchases of marketable securities of $2.5 million.

Current wording

Net cash used in investing activities for the three months ended September 30, 2026 was $45.9 million compared to $24.7 million for the three months ended September 30, 2025. The $21.2 million increase in cash used in investing activities was primarily due to a $55.3 million increase in net purchases of marketable securities, partially offset by $35.1 million in sales of other investments.

Previous wording

Net cash used in financing activities for the nine months ended March 31, 2026 was $166.1 million compared to $50.6 million during the nine months ended March 31, 2025. The $115.5 million increase in cash used in financing activities was primarily due to the purchase of treasury stock of $88.7 million, increases in the repurchase of restricted stock for income tax withholding of $15.5 million and the repayment of finance lease obligations incurred for the acquisition of computers of $11.3 million.

Current wording

Net cash used in financing activities for the three months ended September 30, 2026 was $36.0 million compared to $43.6 million during the three months ended September 30, 2025. The $7.6 million decrease in cash used in financing activities was primarily due to a $12.1 million decrease in repurchases of restricted stock for income tax withholding, partially offset by a $4.5 million increase in repayments of finance lease obligations.