What happened

Shares of K12 Inc. (NYSE:LRN), an online educational company that offers an alternative to traditional campus schooling, shed as much as 24% of their value Wednesday before recovering some of those losses after releasing mixed fiscal 2020 first-quarter results.

So what

K12's top-line revenue growth increased 2.3%, to $257.1 million, compared to the prior-year result, which managed to top analysts' estimates calling for $253.9 million. The top-line growth didn't filter down to the bottom line: adjusted operating losses expanded to $13.9 million, compared to the prior-year's $9.7 million loss. K12's net loss per share checked in at $0.25, larger than the prior-year's loss of $0.22 per share and $0.06 per-share short of analysts' estimates.

Man standing in front of online educational graphics.

Image source: Getty Images.

Nate Davis, Chief Executive Officer and Chairman, said the following on the Oct. 22, 2019 conference call:

Specifically, on enrollment, our Managed Public School business grew to 122.3 thousand students. This is an increase of 3.5 thousand students or 2.9% year-over-year. Importantly, this marks the fourth year in a row that we have seen enrollment growth in our Managed Public School business.

Now what

K12's enrollment growth would have been even more impressive -- a 14,700 student increase instead of 3,500 increase -- had Georgia Cyber Academy not decided to work with new vendors after students in the academy performed below state averages.

LRN Chart

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While many will likely agree the educational system needs innovative solutions to improve and better meet the needs of students, investors seem unconvinced that K12 has its business figured out -- the stock is down 40% over the past six months. But stay tuned: The company has a pivotal year ahead as it tries to continue its enrollment growth streak and reverse operating losses.