Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Stride Q3 Fiscal Year 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then one on your telephone keypad. I would now like to turn the call over to Eliza Henson, Manager of Investor Relations. Eliza, please go ahead. Thank you. Good afternoon. Welcome to Stride's Q3 earnings call for fiscal year 2026. With me on today's call are James Rhyu, Chief Executive Officer, and Donna Blackman, Chief Financial Officer. As a reminder, today's conference call and webcast are accompanied by a presentation that can be found on the Stride Investor Relations website. Please be advised that today's discussion of our financial results may include certain non-GAAP financial measures. A reconciliation of these measures is provided in the earnings release issued this afternoon and can also be found on our investor relations website. In addition to historical information, this call will also involve forward-looking statements. The company's actual results could differ materially from any forward-looking statements due to several important factors as described in the company's earnings release and latest SEC filings, including our most recent annual report on form 10-K and subsequent filings. These statements are made on the basis of our views and assumptions regarding future events and business performance at the time we make them, and the company assumes no obligation to update any forward-looking statements. Following our prepared remarks, we will answer questions you may have. Now I'll turn the call over to James. Thanks, Eliza, and good afternoon, everyone. I'd like to start off with an update on the platform issues we experienced earlier this year. As I mentioned last quarter, we continue to execute on the roadmap for stability and improvements. As we close out this school year and preparations have already begun for the coming fall, we are heads down making sure our customers get the best experience possible. I'm comfortable with our progress and believe we are on the right track as we prepare for the fall season. As we have discussed previously, the demand for our products and services, as indicated by application volumes, continues to be strong relative to the start levels. While our focus is on finishing this year executing against our roadmap, we believe the demand environment sets us up well for the future. Although we experienced a marginally higher level of attrition since I gave an update on our last call, this was not unexpected. We continue to monitor, but we are confident it won't harm our long-term prospects. I believe the macro environment for school alternatives like ours continues to be a long-term trend that will serve as a tailwind to our business. Our job right now is to maintain focus and execute through the rest of this year and into the fall so that the students and their families can continue to choose the options, including our programs, that they deserve. Thank you, and I will now turn the call over to Donna. Thank you, James, and good afternoon. As James mentioned, we are seeing strong demand for the fall as measured by application volume, and we remain confident in the long-term growth in the business. This quarter's results reflect continued demand and solid execution across the business. I'll start by reviewing those results. Total enrollments grew 1.8% to 244.5 thousand. Total revenue for the quarter was $629.9 million, up 2.7% compared to last year. Revenue in our Career Learning middle and high school programs grew nearly 16% to $259.5 million, driven by a strong enrollment growth of 11.6%. General Education revenue was $367.5 million, down 3.6% compared to last year, driven by an enrollment decline of 5%, which was more than offset by the growth in our Career Learning business. As we think about next quarter, it's important to remember that we anticipate enrollment decline as most of our programs no longer accept enrollments during the Q4. We are focused on converting these leads into new enrollments for the upcoming school year, and we expect a sequential decline next quarter like we typically do every year from Q3 to Q4. Total revenue for enrollment across both Career Learning and General Education was $2,485, up 2.9% from $2,415 last year. As a reminder, revenue per enrollment can vary between General Education and Career Learning due to program and state mix as well as timing. We encourage investors to focus on total revenue per enrollment, which as I've said previously, we believe is the most representative measure of underlying performance. Given this quarter's results, we expect total revenue per enrollment for the full year to be up roughly 2% from last year. We've received a lot of questions about next year's enrollment expectations, and I want to reiterate that it is still very early in the enrollment season. We should have a better picture of the enrollment landscape during the Q4 call, as well as more color on the funding environment as states finalize their budgets in the coming months. Turning back to the results from the Q3. Gross margins at 36.8% for the quarter was down 380 basis points. We expect to finish the year with gross margins in the range of 37%-37.4%. Let me provide a bit more color on gross margins. The year-over-year decline is primarily driven by continued investments in the business, including those related to our platform rollout as we support the transition. We would expect a portion of these costs to moderate as we move into FY2027. Selling, general, and administrative expenses total $102.5 million, down $16 million or 13.5% from last year. We expect to finish the year with SG&A down 6%-8% compared to last year. Stock-based compensation for the quarter was $9.6 million. We now expect to finish the year with stock-based compensation in the range of $40 million-$42 million. Adjusted operating income was $140.4 million, down 1%. Adjusted EBITDA was $171.3 million, up 1.8%. Adjusted earnings per share for the quarter was $2.30, down $0.03 from last year. As in years past, we expect Q4 profitability to be less than the Q3 as we ramp up marketing and other spend for the upcoming school year. Now moving to our balance sheet. Capital expenditures for the quarter were $18.5 million, up from $15.8 million last year. Free cash flow, defined as cash from operations and less CapEx, was $202.4 million, up from $37.3 million last year. For the year, we expect free cash flow to be flattish to last year. We finished the quarter with cash equivalents, and marketable securities of $856 million. Turning to our guidance. For the full year, we are narrowing our revenue, AOI, and CapEx guidance ranges and affirming our effective tax rate guidance. For the balance of the year, we expect revenue in the range of $2.490 billion-$2.520 billion, narrows from $2.480 billion-$2.555 billion last quarter. Adjusted operating income between $490 million-$500 million, narrows from $485 million-$505 million last quarter. Capital expenditures between $75 million-$80 million, narrows from $70 million-$80 million last quarter. An effective tax rate between 24%-25%, unchanged from last quarter. As you'll note, the range of revenue implies Q4 revenue below the Q4 of last year, driven by marginally higher attrition rates and tough comparisons associated with the timing of funding true-ups. We do not, however, believe this is indicative of any change in underlying demand trends. We continue to see positive trends in demand and customer experience, and we remain optimistic about the coming school year. We believe that our investments in the business are setting us up for long-term success and the ability to meet the demands of families seeking alternative education options. Thank you for your time today. Now I'll turn the call back over to the operator for Q&A. Operator? Your first question comes from the line of Jeff Silber with BMO Capital Markets. Please go ahead. Thank you so much. I appreciate the timing in terms of trying to gauge enrollment for next year, but I was wondering if you can comment on the contract renewal pipeline or new business. I'm just wondering how that's going, if you're seeing any, you know, pushback from some of the issues that you incurred last summer. Yeah, Jeff, I think, sort of two separate questions, and I think they have sort of similar-ish answers, but one may be more positive than the other. I think with our existing clients, you know, first of all, we're very thankful that our existing clients remain, I think, really positive on our programs. They understand the value that together we're able to deliver and the value that we can bring to those programs. You know, we still think that we have very good relationships with our partners. I mean, clearly we have partners that aren't happy about things that have happened over this past year. In general, they're working collaboratively with us, and I think they're pretty understanding. On the new business development side of it, interestingly, we have seen no negative impact in terms of doors that are opening for us, conversations we've been able to have. In fact, our pipeline of new business activity is, I would say probably as strong or stronger than it's been in the five years that I've been the CEO, certainly. I think the issues that we've experienced on the platform side, and I've gone out and talked to a bunch of these customers myself personally, sort of to gauge the sentiment out there. Almost none of them focus on the issues that we've had. I think they're all focused on the success that we can deliver for families across this country and the belief that the options and the choices that we can provide for them are of paramount importance. So we're getting nothing but really positive feedback. You know, we proactively discuss The issues we've had this past year, I think, you know, to a T, they're all pretty understanding. Many of them have been through some issue themselves. Almost all of them experienced really difficult issues regarding the platforms that they monitored and executed on during COVID. Sort of reasonably fresh experience of somewhat negative platform issues, and so pretty positive conversations along those lines. Again, I think just the pipeline of activity that we have is as strong as what we've seen in five years. Okay. That's great to hear. I know, again, you're not commenting on the funding environment for next year. You know, I know there's been some changes in certain states. You know, Pennsylvania's been one that's been in the press. Do you see other states, you know, changing how they're funding virtual schools? Is that a trend we might see continue? I think it's a little bit hard to sort of call a trend. Pennsylvania, as you indicated, they've had legislation on the books, I believe it may be for almost 20 straight years, to cut virtual funding. They're one of the states in the country that have the longest standing virtual programs. They have some of the highest penetrations in the state. They have a very, very robust marketplace of providers in that state. I think as you know, the politics, you know, have played into it for many, many years, and particularly in that state, there's been legislation on the books. You know, we've been pretty successful for 20 years getting that legislation sort of beaten back a little bit and, you know, at some point, that's not gonna happen, and this was the year. I think our business remains, I think, pretty robust in Pennsylvania. I think the market in Pennsylvania remains robust. I think that, if anything, these types of situations present opportunities for stronger players like us. You know, we'll obviously, look at ways that we can take advantage of any situation like this in the marketplace. I actually think that something like this, and particularly in Pennsylvania, presents an opportunity. More broadly across the country, I don't think we see any different trend than the activity we've seen in the past, you know, 10 or 15 years. I mean, there's always legislation that's getting proposed, you know, both for and against virtual programs. I don't see a materially different trend now than there was in any time in at least the past 10 or 15 years. Okay. Appreciate the color. Thanks so much. Your next question comes from the line of Alex Paris with Barrington Research. Please go ahead. Hi, guys. Thanks for taking my questions. My first question relates to enrollment and the enrollment windows. It was my understanding that some of the enrollment windows at some of the programs might have closed earlier this year than last year and previous years in general, given the challenges of last fall. Obviously, we expect windows to be closed for the full Q4. Is that an accurate statement? Did windows close earlier in the Q3 than last year? What impact, if any, can you quantify on enrollment in the Q3? Yeah. I think, the short answer is yes. I think more, maybe more profoundly, not just are the windows, I'll say, closed earlier, I think, which we've indicated previously, we are very proactively, not maybe taking advantage of even as much as we theoretically could, windows that are open because we generally this year have taken the stance of trying to backfill as opposed to grow. That's sort of what you've seen. You know, when you have programs that you can backfill and you do, but you don't grow them, and then you have other programs where windows are closing early, you're gonna have a dynamic where it puts downward pressure on enrollment. I think we've been very clear and consistent with that all year. Yes, I think you're exactly correct. Through the Q4, that's gonna continue to be so to the extent that really we don't have windows open through the balance of this year. It's only a story of attrition. Again, I think that was, you know, pretty transparent from previous calls that we've discussed. It does not change our perspective of the overall demand environment, which continues to be strong and bodes well for the fall. Yeah, you're gonna have this dynamic, which we've explained around this year enrollment trends, which, you know, is gonna run counter the past few years in terms of in-year enrollment growth. I don't think that's a commentary on the overall demand, which we see continue to be very strong. Well, it looked like you backfilled well in the Q3 with enrollment coming in where it did a little bit. I mean, we expected a sequential decline. We got a little sequential decline, but it was still up 1.8% year-over-year. Part of that's due to windows being closed earlier. Part of it's due to the fact that you're not pushing hard. You wanna get it right. Is there any way to quantify how many students you left on the table, so to speak, in the Q3 because of early windows being closed? I think it'd be difficult to quantify. It's sort of. I think it's difficult to quantify because, you know, conversion rates and things like that are a little bit variable. It's clearly in the thousands. I think it's, you know, if you sort of just looked at prior years' trends and, assuming that demand was similar and see how much we grew in a prior year, you know, we left on the table probably a similar amount that we could have grown this year. Okay. I got you. You know, sequentially it grew from Q2 to Q3 last year. This year it didn't. Right. Part of that is due to the closed windows. Yeah, exactly. Yep. Yep. Okay. Given that demand continues to be so strong, as measured by application volumes, does that mean that these students get added to wait lists? Does that bode well for the fall term? In some cases, yes, they get added to a wait list. In some cases, we've actually started opening up enrollment for the fall, so they're sort of, you know, in a provisional state maybe because it's technically not open, but you know, basically we're accepting applications now. We have some like, I'll say, provisional state enrollments as well. I think, you know, it does give us a little bit of a head start on the pipeline for next year. There are those, a not insignificant number of families who unfortunately are, I don't wanna say desperate for a solution immediately. When we're not able to provide that immediate solution for them, then in those cases, they often do look elsewhere. You know, there is some number of the pipeline that we can't translate into next year enrollment because they're looking for an immediate solution, and where we can't provide that, we certainly understand that they're gonna look somewhere else. All right. Last question on the topic. Enrollment at some programs, their window was closed early. Can we say similarly that the enrollment window for the fall has opened up earlier this year than last year? I don't think materially, yeah. I mean, I do think we tried to get a little bit of a head start, but I don't think we're materially different than last year. Okay. We try to open the windows early every year, I guess maybe for the fall is what I'm saying. I do think that probably there is a little bit of a dynamic where, in prior years where we open enrollments for the fall, there are some small number of families who, when they realize, "Oh, we're calling in for the fall, but you actually have a spot now. I'll take the spot now." That, sometimes will happen. Gotcha. This is my last question on enrollment. Anything to read into the fact that General Education enrollment was down 5% and Career Learning enrollment was up 12%, just around numbers. Care to comment any color on that? Yeah, no, I don't think there's anything really to read into that. It's just, like you said. We sort of look at the whole pie and we break them up into those buckets. I don't think there's not a specific trend, I guess, really that, maybe to answer your question is, that we see that's positive or negative based on those numbers. Great. Well, I appreciate the extra color, guys. Thank you. I'll get back in the queue. Thanks, Alex. Your next question comes from the line of Stephen Sheldon with William Blair. Please go ahead. Hey, James and Donna. You have Matt Filek on for Stephen Sheldon. Thank you for taking my questions. Given you seem to be making good progress on mitigating the platform issues, how are you thinking about marketing spend from here? Is that something you plan to push the pedal on? Just curious how we should think about SG&A spend over the next year or so. Yeah. I think we're on a trajectory for essentially business as usual from here on in. You know, I think we're executing well against our roadmap. As I mentioned earlier, I think that we expect a very robust and successful fall. I don't see anything that is gonna hold us back right now for ramping up. I think we're gonna, you know, be in the market pretty aggressively. I will say, which I think actually is again, is a net positive for us, that, you know, and I won't call it a trend yet, but I guess I see certain data points. Again, I'm not saying yet it's a trend, but there are certainly some data points that appear as though the customer use of AI might be actually improving conversion. Because the ability for people to have better research essentially into different programs, I think ultimately benefits us. Therefore, I think that there are some data points that we see where conversion could ultimately improve and therefore cost of acquisition actually goes down. I think that there are some things that I think look generally positive in sort of the funnel mechanics, if you will, of our business heading into the fall. Got it. That's helpful color. Thank you, James. Can you just provide a little more detail on the Adult Learning segment and what it might take to get that segment to return to growth? I know in the past you've been a little more positive on MedCerts with Tech Elevator and Galvanize, the laggards there. Just a update on what's going on within that segment and, you know, the path to get things back to growth eventually would be helpful. Yeah. I think, you know, I think I mentioned this before. First of all, these businesses to us are. I mean, if they disappeared tomorrow, I don't think our shareholders would notice and from the impact of our numbers, and they're just immaterial and not meaningful enough, you know, to really have a long-term impact for shareholders. I think the underlying businesses, as we've described before, the boot camps are in just secular decline. I think that's gonna continue to be the case. I think it's very difficult for the secular environment for the boot camp side, the Tech Elevator, Galvanize side of the businesses to really recover meaningfully. At least my industry checks across the folks in the industry that I know that run these kinds of businesses, I think would all sort of echo this similar sentiment, at least privately for sure. I think the MedCerts business is and continues to be an attractive market segment for us. We have not executed well across that market segment. We've had some leadership changes in the past year or so that we're hoping that will help reignite our positioning there. I continue to believe that we're gonna make investments in that. I think it benefits our K-12 programs, and I think the market opportunity still exists. It's not meaningful. The investments won't change the needle on anything in our financials, but I do think there continues to be opportunity there. We're gonna continue to look for ways to take advantage of the opportunity, but I think clearly our execution has not yet been where we expect it to be. Got it. Thanks for the detail there. I'll jump back in the queue. Appreciate the time. Thank you. That concludes our question and answer session. Ladies and gentlemen, this concludes the Stride Q3 fiscal year 2026 earnings call. Thank you all for joining. You may now disconnect.