Stride (LRN, Financial) surged by 31% following its impressive Q1 earnings report. Earnings per share (EPS) increased to $0.94 from $0.11 year-over-year, and revenue grew by 14.8% to $551.1 million, both surpassing analyst expectations. Stride also provided an optimistic Q2 revenue guidance of $560-580 million.

Stride offers a variety of services, including K-12 education, career learning, and professional skills training. The company attributes its success to high parent dissatisfaction with traditional schools and a growing interest in skills-based education. Stride is meeting market demand for virtual education options.

The demand for Stride's core business remains strong, reflected in increased application volumes. Stride addresses various family concerns, from school safety and academics to mental health and flexibility.

Enrollment is a critical metric for Stride, with a notable 18.5% growth in Q1 to a record 222.6K, nearly 100K more than pre-pandemic levels in FY20. Of these, 91.7K were Career Learning enrollments, up 30.4% year-over-year. The company credits its marketing and operations execution for this growth.

However, Stride faces challenges with the expiration of ESSER grants, which provided federal pandemic relief funding. The loss of this funding is expected to impact revenue and enrollment in FY25, with revenue per enrollment likely remaining flat or slightly decreasing.

Overall, Stride delivered a strong quarter with significant upside and robust guidance for the upcoming quarter. Enrollment growth remains strong as parents seek educational alternatives, and Stride's offerings for adult career learning and skills training are a positive aspect. The ESSER funding expiration will be a concern in FY25, but current results and guidance are positive.