Online education provider K12 Inc. (LRN), Tuesday reported a rise in third-quarter profit, due mainly to increased enrollment at its key business segments leading to a surge in revenue.
Nonetheless, earnings for the quarter came in well short of Street estimates, while revenue topped expectations. Investors were not overtly impressed with the results and K12 shares lost more than 10 percent in morning trade on the New York Stock Exchange.
K12 said its revenue for the third quarter surged 36.8 percent from last year. Total average enrollment in the quarter jumped 46 percent to 147,728 from last year, reflecting growth across Managed Schools and Institutional Business segments.
Herndon, Virginia-based K12 reported third-quarter net income to common shares of $7 million, compared to $5.6 million last year. On a per share basis, earnings for the quarter were $0.18, compared to $0.16 in the prior year. Earnings per share reflects a pro rata allocation of net income to Series A Special Stock.
On average, six analysts polled by Thomson Reuters expected earnings of $0.21 per share for the quarter. Analysts' estimates typically exclude special items.
Revenue for the quarter totaled $178 million, compared to $130 million a year ago. Analysts expected revenue of $166.03 million.
Revenues were somewhat offset by expenses that escalated to $166.6 million from $119.5 million last year, on higher instructional costs and other overheads.
Moving forward, K12 said in-year enrollments continue to be stronger than forecast, adding that statewide virtual schools are scheduled to open in three new states next school year, namely: Iowa, New Jersey and New Mexico.
LRN is trading at $20.92, down $2.33 or 10.02%, on the NYSE. In the past year, the stock has ranged between $17.07 and $37.41.
For comments and feedback contact: editorial@rttnews.com
Business News
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.