Online education Stride (NYSE: LRN) reported Q4 CY2025 results topping the market’s revenue expectations, with sales up 7.5% year on year to $631.3 million. Guidance for next quarter’s revenue was better than expected at $630 million at the midpoint, 1.9% above analysts’ estimates. Its non-GAAP profit of $2.50 per share was 7.8% above analysts’ consensus estimates.

Is now the time to buy Stride? Find out by accessing our full research report, it’s free.

Company Overview

Formerly known as K12, Stride (NYSE: LRN) is an education technology company providing education solutions through digital platforms.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years.

With $2.52 billion in revenue over the past 12 months, Stride is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Stride’s 14.6% annualized revenue growth over the last five years was exceptional. This is a great starting point for our analysis because it shows Stride’s demand was higher than many business services companies.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Stride’s annualized revenue growth of 14% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Stride reported year-on-year revenue growth of 7.5%, and its $631.3 million of revenue exceeded Wall Street’s estimates by 0.5%. Company management is currently guiding for a 2.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our free report one of our favorites growth stories.

Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Stride has managed its cost base well over the last five years. It demonstrated solid profitability for a business services business, producing an average operating margin of 12.1%.

Analyzing the trend in its profitability, Stride’s operating margin rose by 9.1 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, Stride generated an operating margin profit margin of 23.3%, up 2 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Stride’s EPS grew at an astounding 46.4% compounded annual growth rate over the last five years, higher than its 14.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Stride’s earnings to better understand the drivers of its performance. As we mentioned earlier, Stride’s operating margin expanded by 9.1 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Stride, its two-year annual EPS growth of 45% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q4, Stride reported adjusted EPS of $2.50, up from $2.03 in the same quarter last year. This print beat analysts’ estimates by 7.8%. Over the next 12 months, Wall Street expects Stride’s full-year EPS of $8.33 to grow 2.7%.

Key Takeaways from Stride’s Q4 Results

It was great to see Stride’s revenue guidance for next quarter top analysts’ expectations. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 13.5% to $82.29 immediately after reporting.

Stride put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).