Financial Analysis

11. Commitments and Contingencies Litigation In the ordinary conduct of the Companys business, the Company is subject to lawsuits, arbitrations, disputes and administrative proceedings from time to time. The Company vigorously defends these claims; however, no assurances can be given as to the outcome of any pending legal proceedings or disputes. The Company believes, based on currently available information, that the outcome of any existing or known threatened proceedings, even if determined adversely, should not have a material adverse effect on its business, financial condition, liquidity or results of operations. Securities Litigation On November 11, 2025, a putative securities class action lawsuit captioned Vivienne MacMahon v. Stride, Inc., et al., Case No. 1:25-cv-02019 was filed against the Company and two of its officers in the United States District Court for the Eastern District of Virginia, purportedly on behalf of a class of persons who purchased or otherwise acquired the Companys common stock between October 22, 2024 and October 28, 2025. The Court appointed lead plaintiffs filed an amended complaint on March 16, 2026. The amended complaint asserts violations by the Company and the individual defendants of Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated under the Exchange Act, and violations by the individual defendants of Section 20(a) of the Exchange Act. The amended complaint alleges, among other things, that the Company and the individual defen …

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Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 (In thousands) General Education $ 357,463 $ 370,821 $ 1,061,976 $ 1,054,542 Career Learning Middle - High School 259,520 223,868 776,610 635,832 Adult 12,890 18,687 43,431 61,296 Total Career Learning 272,410 242,555 820,041 697,128 Total Revenues $ 629,873 $ 613,376 $ 1,882,017 $ 1,751,670 …

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7. Equity Incentive Plan On December 4, 2025, the Companys stockholders approved a second amendment and restatement of the 2016 Equity Incentive Award Plan (the amended and restated 2016 Plan). The amended and restated 2016 Plan reflects an additional increase in the number of shares of common stock available for issuance by 740,000 shares and an extension of the term of the amended and restated 2016 Plan to October 17, 2035. The amended and restated 2016 Plan is designed to attract, retain and motivate employees who make important contributions to the Company by providing such individuals with equity ownership opportunities. Awards granted under the amended and restated 2016 Plan may include stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. Under the amended and restated 2016 Plan, unissued shares related to forfeited or cancelled awards granted under the amended and restated 2016 Plan or awards granted under the Companys 2007 Equity Incentive Award Plan (the Prior Plan) (to the extent such awards granted under the Prior Plan were outstanding as of December 15, 2016 and were forfeited or cancelled prior to September 19, 2022), will again be available for issuance under the amended and restated 2016 Plan. Notwithstanding the foregoing, shares tendered to pay the exercise price or tax withholding with respect to a stock option, or shares that are not issued in connection with the settlement of a stock appreciation …

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4. Income Taxes The provision for income taxes is based on earnings reported in the condensed consolidated financial statements. A deferred income tax asset or liability is determined by applying currently enacted tax laws and rates to the expected reversal of the cumulative temporary differences between the carrying value of assets and liabilities for financial statement and income tax purposes. Deferred income tax expense or benefit is measured by the change in the deferred income tax asset or liability during the period. For the three months ended March 31, 2026 and 2025, the Companys effective income tax rate was 26.3% and 26.3%, respectively, and for the nine months ended March 31, 2026 and 2025, the rate was 23.7% and 25.3%, respectively. 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. As of March 31, 2026, and June 30, 2025, the balance of income taxes payable was $28.1 million and $52.6 million, respectively. Income taxes payable is recorded within accrued liabilities on the condensed consolidated balance sheets. …

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6. Debt The following is a summary, as of March 31, 2026 and June 30, 2025, respectively, of the components of the Companys outstanding long-term debt: March 31, 2026 June 30, 2025 (in thousands) Convertible Senior Notes due 2027 $ 420,000 $ 420,000 Less: unamortized debt issuance costs (2,421) (3,678) Total debt 417,579 416,322 Less: current portion of debt Long-term debt $ 417,579 $ 416,322 Future maturities of long-term debt are expected to be $420.0 million in the fiscal year ending June 30, 2028 and zero in each of the fiscal years ending June 30, 2026 and 2027. Convertible Senior Notes due 2027 In August and September 2020, the Company issued $420.0 million aggregate principal amount of Notes. The Notes are governed by an indenture (the Indenture) between the Company and U.S. Bank National Association, as trustee. The net proceeds from the offering of the Notes were approximately $408.6 million after deducting the underwriting fees and other expenses paid by the Company. The Notes bear interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 1 st and September 1 st of each year, beginning on March 1, 2021. The Notes will mature on September 1, 2027. The Company recorded coupon interest expense of $1.2 million during each of the three months ended March 31, 2026 and 2025, and $3.5 million during each of the nine months ended March 31, 2026 and 2025. The Company incurred debt issuance costs of $11.4 million which are amortized over the contractual …

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"Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and for interim periods for fiscal years beginning after December 15, 2025. The Company will review the extent of new disclosures necessary, prior to implementation during fiscal year 2026. Other than additional disclosure, the Company does not expect a change to its condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (""ASU 2024-03""). This update provides investors with enhanced detail regarding components of expenses presented in the income statement, aiming to improve transparency and enable precise understanding of a companys cost structure. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company will review the extent of new disclosures necessary …

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10. Related Party Transactions The Company contributed to Future of School, a charity focused on access to quality education. Future of School was a related party because a former executive officer of the Company formerly served on its Board of Directors. For the three and nine months ended March 31, 2026 and 2025, contributions made by the Company to Future of School were zero. In fiscal year 2019 and 2021, the Company accrued $2.5 million and $3.5 million, respectively, for contributions to be made in subsequent years. In October 2022, a lawsuit was filed regarding future contributions, and in January 2024, a Virginia trial court found that the Company was not obligated to make any additional contributions. The trial courts decision was affirmed by an intermediate appellate court, and in December 2025, the Supreme Court of Virginia declined Future of Schools petition for appeal, resulting in a confirmation of the trial courts ruling. As a result, during the three months ended December 31, 2025, the Company reversed the remaining $2.3 million that had been accrued. …

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"3. Summary of Significant Accounting Policies Recent Accounting Pronouncements Accounting Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and for interim periods for fiscal years beginning after December 15, 2025. The Company will review the extent of new disclosures necessary, prior to implementation during fiscal year 2026. Other than additional disclosure, the Company does not expect a change to its condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (""ASU 2024-03""). This update provides investors with enhanced detail regarding components of expenses presented in the income statement, aiming to improve transparency and enable precise understanding of a companys cost structure. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company will …

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