And LRN will beat estimates easily again. The analysts have not caught up with the fact that LRN is managing the cost side of the business and is taking advantages of scale to improve their margins. The 4th quarter is typically their weakest revenue wise and their highest cost wise.
I think they will do about $92 million in revenue, at the high end of estimates because of a lower attrition rate.
Gross margins should be about the same as in Q3 or about 41.5%. So gross income will be on the order of $38M
Costs rise sharply usually in Q4 so I'll estimate them at $34M, up from 29.8M in Q3.
Thus operating income should be about $4M.
I have no idea what their taxes will be but they don't pay any in cash because of their tax loss carryforwards. So their non-GAAP earnings should be about 0.10 to 0.12 per share. If they account for say $4M in taxes their GAAP earnings will be on the order of 0.0, much better than the -0.08 EPS the analysts are estimating.
Either way, GAAP or non-GAAP, LRN should beat easily again.