Earnings call transcript: Intuitive Surgical beats Q3 2026 estimates, shares fall

Stride reported strong first-quarter fiscal 2027 adjusted earnings of $1.37 per share on revenue of $639.4 million, surpassing Wall Street estimates of $1.13 per share and $629.8 million in sales. However, the stock still declined 2.09% in after-hours trading to $77.30, following a 2.62% drop during the regular session, as investors weighed the beat against weaker enrollment, lower margins, and technology issues affecting applications and retention.

Enrollment fell 2.5% year-over-year to 241,400 students, missing management's expectations. Gross margin narrowed to 37.7% from 39% a year earlier due to higher launch and support costs. Management cited technology problems as hurting the student and family experience during the enrollment period. The company noted positive in-year enrollment growth since the count date, which could benefit later in the year.

Despite beating earnings estimates, the mixed picture of enrollment, margins, and technology issues resulted in a stock decline. Revenue grew 3% year-over-year to $639.4 million, while adjusted EPS fell 9.9% to $1.37, down from $1.52 a year earlier. Adjusted operating income decreased 3.1%, and adjusted EBITDA increased 3.1% to $111.8 million.

The company remains focused on improving student outcomes, parent engagement, and optimizing its product portfolio.