Loading...
01/10 16:36
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents strong financial performance with impressive growth in adjusted operating income and revenues across segments. Despite some concerns in Adult Learning, the overall outlook is optimistic with strategic investments in tutoring and AI. The Q&A reveals no major risks, and the management's positive guidance, along with a well-maintained financial health, supports a positive sentiment. With a market cap of around $3 billion, the stock is likely to react positively, leading to a 2% to 8% increase in the stock price over the next two weeks.
Full Year Revenue $2.4 billion, up 18% from last year. The increase was driven by strong demand and continued momentum in the school choice market.
Adjusted Operating Income $466.2 million, up nearly 60% from last year. This was attributed to benefits of scale and improvements in marketing.
Career Learning and Middle and High School Revenues $876.3 million, up 35%. This growth was supported by a 33% increase in full-year enrollments, totaling 96,300.
General Education Revenue $1.45 billion, up 12%. Enrollment in General Education for the year totaled 137,700, up 13%.
Total Revenue Per Enrollment $9,677, relatively flat compared to last year. State mix impacted the overall revenue per enrollment.
Gross Margin 39.2%, up 180 basis points. Growth was balanced with investments in the business.
Selling, General and Administrative Expenses (SG&A) $524.3 million, up 2% from last year. The company maintained control over SG&A spending.
Stock-Based Compensation $36.8 million, up $5.3 million from last year.
Adjusted EBITDA $571 million, up 46% from the prior year.
Diluted Net Income Per Share $5.95, up 27% from last year.
Adjusted Earnings Per Share $8.10, up 48% compared to $5.49 in FY '24. This metric excludes stock-based compensation, amortization of intangible assets, and onetime adjustments.
Effective Tax Rate 24.4% for FY '25.
Capital Expenditures (CapEx) $60 million for the year.
Free Cash Flow $372.8 million, up $155.6 million from last year.
Cash, Cash Equivalents, and Marketable Securities Just over $1 billion at the end of the year.
Tutoring Business: Hosted over 100,000 sessions in the past year. Plans to offer dedicated tutoring for all second and third graders focused on reading in the upcoming school year.
Career Platform and Programs: Continued investment with an emphasis on building a community of resources offering practical trajectories.
AI Integration: Proceeding with a cautious but ambitious approach to enable AI use in programs responsibly and impactfully.
Enrollment Growth: Anticipated double-digit enrollment growth this fall, with year-over-year enrollment growth expected to be 10%-15% in Q1 FY '26.
Revenue Growth: Full year revenue of $2.4 billion, up 18% from last year. Career Learning revenue grew 35%, and General Education revenue grew 12%.
Gross Margin: Improved to 39.2%, up 180 basis points. Expected to grow at a slower pace in FY '26 due to continued investments.
SG&A Expenses: Increased by 2% to $524.3 million. SG&A as a percentage of revenue is expected to decrease marginally in FY '26.
Adjusted Operating Income: Increased nearly 60% to $466.2 million.
Free Cash Flow: Increased to $372.8 million, up $155.6 million from last year.
Galvanize Business Impairment: Booked a one-time non-cash impairment charge of $59.5 million due to lease expenses and trade name write-down.
Funding Environment: Fairly positive funding environment expected for FY '26, with some states holding funding flat and others increasing.
State funding variability: Some states are holding funding flat while others are increasing funding, which could impact revenue per enrollment. This variability in state funding creates uncertainty in financial planning.
Federal funding impact: Although no material impact is anticipated from changes at the federal level, any unexpected shifts in federal funding policies could pose a risk to revenue per enrollment.
Galvanize business impairment: A one-time noncash impairment charge of $59.5 million was recorded due to the underperformance of the Galvanize business, including a decline in the IT software business and co-working business not recovering from the COVID pandemic.
Stock-based compensation increase: Stock-based compensation increased by $5.3 million from last year, which could impact overall profitability.
Dependence on enrollment growth: The company’s financial performance heavily relies on achieving double-digit enrollment growth, which may be impacted by market conditions or execution challenges.
Macroeconomic conditions: Economic uncertainties could affect demand for the company’s services, particularly in the context of school choice and education funding.
AI implementation risks: The company is cautiously investing in AI technologies, but improper implementation or failure to achieve desired outcomes could impact customer experiences and operational efficiency.
Enrollment Growth: Anticipated year-over-year enrollment growth of 10% to 15% in the first quarter of FY '26, with double-digit enrollment growth expected for the fall season.
Revenue Per Enrollment: For FY '26, revenue per enrollment is expected to be relatively flat to slightly up compared to FY '25, influenced by state funding and mix.
Gross Margin: Gross margins are expected to continue growing in FY '26, but at a slower pace compared to the past two years due to ongoing investments in products and services.
SG&A Expenses: Selling, general, and administrative expenses as a percentage of revenue are expected to decrease marginally in FY '26.
Capital Expenditures: Capital expenditures as a percentage of revenue are anticipated to remain relatively flat in FY '26.
Stock-Based Compensation: Stock-based compensation is expected to increase slightly in FY '26.
Market Trends: Positive macro trends in the school choice market are expected to continue, driving demand and growth.
New Initiatives: Introduction of dedicated tutoring for second and third graders focused on reading, and cautious but ambitious integration of AI into programs to enhance customer outcomes.
The selected topic was not discussed during the call.
The earnings call highlights strong enrollment growth and increased revenue, yet issues with platform implementation led to higher withdrawals and no in-year enrollment growth. Positive cash reserves and adjusted EBITDA are offset by negative free cash flow and declining gross margins. The Q&A reveals management's vague responses on guidance and platform fixes. Given the company's market cap, these mixed signals suggest a neutral stock price movement in the short term.
The earnings call presents strong financial performance with impressive growth in adjusted operating income and revenues across segments. Despite some concerns in Adult Learning, the overall outlook is optimistic with strategic investments in tutoring and AI. The Q&A reveals no major risks, and the management's positive guidance, along with a well-maintained financial health, supports a positive sentiment. With a market cap of around $3 billion, the stock is likely to react positively, leading to a 2% to 8% increase in the stock price over the next two weeks.
The earnings call reveals strong financial performance with record enrollments and increased revenue, supported by a raised guidance. Despite some regulatory and enrollment constraints, the company shows growth in career learning and maintains a low dependency on federal funding. The Q&A session does highlight some uncertainties, but overall, the sentiment is positive. With a market cap of around $3 billion, the stock is likely to react positively, with a predicted movement of 2% to 8% over the next two weeks.
The company's financial performance is strong, with significant revenue and earnings growth, improved margins, and increased guidance. Despite some concerns about enrollment funnel challenges and adult learning revenue, overall sentiment is positive. The market cap suggests a moderate reaction, likely in the 2% to 8% range, supported by strong financial metrics and optimistic guidance.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
