Q2 FY2025 Earnings Presentation January 28, 2025 Safe Harbor This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation are forward-looking statements. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "cont ...

Revenue Growth - For the six months ended December 31, 2024, revenues increased to $1,138.3 million from $985.0 million in the prior year, an increase of 15.6%[170] - Revenues for the three months ended December 31, 2024, were $587.2 million, an increase of $82.3 million, or 16.3%, from $504.9 million in the same period of 2023[196] - For the six months ended December 31, 2024, revenues were $1,138.3 million, an increase of $153.3 million, or 15.6%, from $985.0 million in the same period of 2023[203] Operating Performance - Operating income for the same period increased to $172.4 million from $87.6 million, driven by revenue growth and an increase in gross margin[170] - Net income attributable to common stockholders for the three months ended December 31, 2024, was $96.4 million, or 16.4% of revenues, compared to $66.8 million, or 13.2%, in the prior year[195] Enrollment Statistics - Total enrollments for the six months ended December 31, 2024, were 228.7 thousand, an increase of 36.9 thousand, or 19.2%, over the prior year[170] - General Education revenues increased by $40.4 million, or 12.9%, primarily due to a 12.5% increase in enrollments[196] - Career Learning revenues rose by $41.9 million, or 22.0%, driven by a 30.9% increase in enrollments[196] Expenses - Instructional costs and services expenses for the three months ended December 31, 2024, were $347.4 million, an increase of $43.7 million, or 14.4%, from $303.7 million in the prior year[197] - Instructional costs and services expenses for the six months ended December 31, 2024, were $682.6 million, an increase of $71.6 million, or 11.7%, from $611.0 million in the prior year[204] - Selling, general, and administrative expenses decreased by $2.1 million, or 1.8%, to $114.8 million, representing 19.5% of revenues[198] Cash Flow and Working Capital - Net cash provided by operating activities for the six months ended December 31, 2024, was $81.4 million, compared to $38.0 million for the same period in 2023, reflecting a $43.4 million increase[219] - Net cash used in investing activities decreased to $35.7 million for the six months ended December 31, 2024, down from $68.8 million in the prior year, a decrease of $33.1 million[221] - Net cash used in financing activities increased to $28.7 million for the six months ended December 31, 2024, compared to $25.7 million in the prior year, an increase of $3.0 million[222] - As of December 31, 2024, the company had net working capital of $1,157.8 million, including cash and cash equivalents of $515.1 million[209] Financing Activities - The company issued $420.0 million aggregate principal amount of 1.125% Convertible Senior Notes due 2027, with net proceeds of approximately $408.6 million after fees[210] - The initial conversion rate for the Notes is 18.9109 shares of common stock per $1,000 principal amount, equating to an initial conversion price of approximately $52.88 per share[213] - The finance lease liability as of December 31, 2024, was $93.9 million, up from $55.6 million as of June 30, 2024[215] - The company entered into a $100.0 million senior secured revolving credit facility, which was repaid using proceeds from the Notes, leaving no outstanding balance as of December 31, 2024[214] Strategic Initiatives - The company continues to explore acquisitions, strategic investments, and joint ventures to enhance its business operations[218] - The company expects to finance ongoing operations through generated cash, borrowing on the Credit Facility, and net working capital[218] - The cost of the Capped Call Transactions related to the Notes was $60.4 million, recorded within additional paid-in capital[212] Service Offerings - The average duration of agreements for the school-as-a-service offering is greater than five years, with most providing for automatic renewals[168] - Stride provides its school-as-a-service offering to 89 schools in 31 states and the District of Columbia in the General Education market[168] - The company operates in two lines of revenue: General Education and Career Learning, with the majority of revenue derived from the comprehensive school-as-a-service offering[179] - Stride has served millions of students, graduating 15,987 high school students from partner schools in the most recent academic year ended June 30, 2024[161] - The company has invested over $700 million in the last twenty years to develop curriculum, systems, instructional practices, and support services[187]

Revenue and Income - Revenue for the second quarter of fiscal 2025 was $587.2 million, an increase of 16.3% compared to $504.9 million in the same period of fiscal 2024[4] - Net income for the second quarter was $96.4 million, up 44.2% from $66.8 million year-over-year[7] - Revenues for the three months ended December 31, 2024, were $587,211,000, representing a 16.2% increase from $504,868,000 in the same period of 2023[24] - Net income attributable to common stockholders for the six months ended December 31, 2024, was $137,275,000, up 91.2% from $71,714,000 in the same period of 2023[24] - Net income for Q4 2024 was $96,393,000, an increase of 44.3% compared to $66,836,000 in Q4 2023[37] Earnings and Adjusted Metrics - Adjusted EBITDA for the second quarter reached $160.4 million, a 35.5% increase from $118.3 million in the prior year[4] - Adjusted operating income for the full fiscal year 2025 is projected to be between $430 million and $450 million[19] - Adjusted operating income for the three months ended December 31, 2024, was $135,570,000, compared to $94,873,000 in the same period of 2023, reflecting a 43.0% increase[36] - Adjusted EBITDA for the first half of 2024 was $244,347,000, representing a 54.4% increase from $158,111,000 in the first half of 2023[37] - The company projects adjusted operating income for Q1 2025 to be between $130,000,000 and $140,000,000[39] - For the fiscal year ending June 30, 2025, the adjusted operating income is expected to range from $430,000,000 to $450,000,000[39] Enrollment and Growth - Average enrollments for the second quarter were 230.6K, reflecting a 19.4% increase from 193.1K enrollments in the second quarter of fiscal 2024[11] - Career Learning enrollments increased by 30.9% to 94.8K compared to 72.4K in the same quarter of the previous year[11] Financial Position and Assets - Total current assets increased to $1,388,479,000 as of December 31, 2024, from $1,245,446,000 as of June 30, 2024, indicating a growth of 11.5%[26] - Cash and cash equivalents at the end of the period were $515,049,000, up from $500,614,000 at the beginning of the period, showing a slight increase[29] - Total assets increased to $2,070,781,000 as of December 31, 2024, from $1,920,465,000 as of June 30, 2024, representing an 7.8% growth[27] - The company’s long-term debt remained stable at $415,522,000 as of December 31, 2024, compared to $414,675,000 as of June 30, 2024, indicating effective debt management[27] Expenses and Taxation - Capital expenditures for the second quarter were $14.8 million, up from $12.7 million in the same quarter last year[15] - The effective tax rate is expected to be between 24% and 26% for the fiscal year 2025[19] - Income tax expense for Q4 2024 was $33,361,000, compared to $22,190,000 in Q4 2023, reflecting a significant increase[37] - Stock-based compensation expense for Q4 2024 was $7,925,000, slightly higher than $7,596,000 in Q4 2023[37] - Depreciation and amortization for the first half of 2024 totaled $55,529,000, up from $54,480,000 in the first half of 2023[37] Other Financial Metrics - Revenue per enrollment for the second quarter was $2,395, remaining flat compared to $2,396 in the same quarter of fiscal 2024[13] - Gross margin increased to $239,858,000 for the three months ended December 31, 2024, compared to $201,174,000 in the prior year, reflecting a gross margin percentage improvement[24] - Basic earnings per share for the three months ended December 31, 2024, was $2.24, compared to $1.57 for the same period in 2023, marking a 42.5% increase[24] - The company reported a net cash provided by operating activities of $81,360,000 for the six months ended December 31, 2024, compared to $38,029,000 in the same period of 2023, indicating significant operational cash flow improvement[30] - The company reported a net interest expense of $2,670,000 for Q4 2024, an increase from $2,022,000 in Q4 2023[37] - Other income, net for Q4 2024 was $(7,330,000), compared to $(6,538,000) in Q4 2023, indicating a decline[37]

Core Insights - Stride, Inc. reported strong financial results for the second fiscal quarter of 2025, with significant increases in revenues and net income compared to the same period in 2024 [1][2][6]. Financial Performance - Revenues for the second quarter reached $587.2 million, an increase of 16.3% from $504.9 million in the same quarter of 2024 [3][6]. - Income from operations was $125.1 million, up 48.4% from $84.3 million year-over-year [3][6]. - Net income rose to $96.4 million, a 44.2% increase from $66.8 million in the prior year [3][6]. - Diluted net income per share increased by 31.8% to $2.03 from $1.54 [3][6]. - Adjusted operating income for the quarter was $135.6 million, reflecting a 42.9% increase from $94.9 million [3][6]. - EBITDA for the quarter was $152.5 million, a 37.7% increase from $110.8 million [3][6]. Enrollment and Revenue Metrics - Average enrollments for the second quarter were 230.6K, a 19.4% increase from 193.1K enrollments in the same quarter of fiscal year 2024 [10]. - Career Learning enrollments averaged 94.8K, up 30.9% compared to 72.4K in the same period last year [10]. - Revenue per enrollment was $2,395, remaining relatively flat compared to $2,396 in the second quarter of fiscal year 2024 [12]. Cash Flow and Capital Allocation - As of December 31, 2024, the company's cash and cash equivalents totaled $738.1 million, an increase from $714.2 million at the end of June 2024 [14]. - Capital expenditures for the quarter were $14.8 million, compared to $12.7 million in the same quarter of the previous year [14]. Fiscal Year 2025 Outlook - The company raised its revenue and adjusted operating income forecast for the full fiscal year 2025, projecting revenues between $2.320 billion and $2.355 billion [18]. - Adjusted operating income is expected to be in the range of $430 million to $450 million for the fiscal year [18].

Core Insights - Stride, Inc. has been awarded four Digital Education Awards, recognizing its achievements in digital education, game-based learning, and curriculum development [1][2] - The awards include Gold Winner for K12's Teaching & Learning Team, Digital Game-Based Learning Product of the Year for Stride Meets Minecraft, Digital Education Institution of the Year for Stride's K12-powered schools, and Digital Education Team of the Year for K12's Teaching & Learning Team [2] - The company emphasizes its commitment to personalized learning and innovative solutions that support over 3 million students [3] Company Overview - Stride, Inc. is a leading technology-based education company that provides comprehensive online learning solutions for learners of all ages [3][5] - The company serves learners in primary, secondary, and postsecondary settings, offering a wide range of services including K-12 education, career learning, professional skills training, and talent development [5] - Stride operates in all 50 states and over 100 countries, showcasing its extensive reach in the education sector [5]

Stride, Inc. (LRN) is slated to report its second-quarter fiscal 2025 results on Jan. 28, after market close.See the Zacks Earnings Calendar to stay ahead of market-making news.In the first quarter of 2025, LRN reported better-than-expected results, with earnings per share (EPS) and revenues topping the Zacks Consensus Estimate by 370% and 10.3%, respectively. Both metrics also grew year over year by 754.5% and 14.8%, respectively. The results reflected increased contributions from the Career Learning and G ...

LANHAM, Md., Jan. 21, 2025 (GLOBE NEWSWIRE) -- MedCerts, a nationally recognized leader in online healthcare and IT career training, and FocusQuest LLC, a passionate advocate for student success and educational access, are thrilled to launch a progressive partnership designed to provide minority students with expanded access to high-demand career pathways. In honor of Dr. Martin Luther King Jr.’s legacy, MedCerts is proud to announce this collaboration with FocusQuest, whose partnerships with Historically B ...

RESTON, Va, Jan. 14, 2025 (GLOBE NEWSWIRE) -- Stride Inc. (NYSE: LRN) announced today it plans to discuss its second quarter fiscal year 2025 financial results during a conference call scheduled for Tuesday, January 28, 2025 at 5:00 p.m. eastern time (ET). A live webcast of the call will be available at https://events.q4inc.com/attendee/534139423. To participate in the live call, investors and analysts should dial (800) 715-9871 (domestic) or +1 (646) 307-1963 (international) and provide the conference ID n ...

Enrollment Growth and Market Demand - Enrollment growth is a key driver for Stride, with total enrollment increasing by 18.5% year-over-year to 222.6K in Q1 FY2025, the highest since the pandemic [2] - General Education (K-12) enrollment grew by 11.3% to 130.9K, while Career Learning (Middle-High School) surged by 30.4% to 91.7K [2] - The company benefits from strong demand for virtual and blended educational programs, supported by regulatory reforms under the Trump administration [1] Financial Performance and Targets - Stride aims to achieve fiscal 2028 targets, including revenue growth of $2.70-$3.30 billion (10% CAGR) and adjusted operating income of $415-$585 million (20% CAGR) [10] - EPS is projected to grow to $6.15-$8.35 by FY2028, reflecting a 20% CAGR [10] - The company's liquidity position is strong, with $539.4 million in cash, cash equivalents, and marketable securities as of Sept 30, 2024, against long-term debt of $415.1 million [11] Stock Performance and Valuation - LRN stock has outperformed the market, rising 58.3% in the past six months, surpassing the Zacks Schools industry, Consumer Discretionary sector, and S&P 500 Index [7] - The stock is trading at a discount compared to industry peers on a forward 12-month P/E ratio basis, making it an attractive entry point for investors [12] - Technical indicators show LRN trading above both the 50-day and 200-day SMAs, signaling a bullish trend [19] Operational Efficiency and Capital Allocation - Stride focuses on balanced capital allocation, utilizing free cash flow for business growth and shareholder returns [18] - The company is leveraging organic growth and acquisitions to establish itself as a leader in the virtual education market [10] - Continuous investments in technology and innovation are driving enrollment growth and enhancing product offerings [17] Challenges and Cost Pressures - Increased instructional costs and services rose to $335.2 million in Q1 FY2025, up from $307.3 million year-over-year, potentially hindering performance [5] - Inflationary pressures and delays in software development products may impact the Adult Learning segment's revenue growth [14] - Despite cost challenges, the company remains focused on operational efficiency to sustain growth [22]

RESTON, Va., Jan. 08, 2025 (GLOBE NEWSWIRE) -- Tallo has launched a scholarship search tool as part of its comprehensive career development platform, helping students overcome financial barriers while they build skills and explore careers. Key features of the tool include: Nationwide scholarship databaseLocation and career goal-based filteringSaved opportunity trackingApplication deadline managementIntegration with career planning tools The new tool addresses a critical need in today's education landscape ...