New Zealand markets closed
  • NZX 50

    11,434.82
    -83.50 (-0.72%)
     
  • NZD/USD

    0.5746
    -0.0099 (-1.70%)
     
  • NZD/EUR

    0.5922
    -0.0016 (-0.27%)
     
  • ALL ORDS

    6,788.70
    -132.70 (-1.92%)
     
  • ASX 200

    6,574.70
    -125.50 (-1.87%)
     
  • OIL

    79.43
    -4.06 (-4.86%)
     
  • GOLD

    1,651.70
    -29.40 (-1.75%)
     
  • NASDAQ

    11,311.24
    -190.40 (-1.66%)
     
  • FTSE

    7,018.60
    -140.92 (-1.97%)
     
  • Dow Jones

    29,590.41
    -486.27 (-1.62%)
     
  • DAX

    12,284.19
    -247.44 (-1.97%)
     
  • Hang Seng

    17,933.27
    -214.68 (-1.18%)
     
  • NIKKEI 225

    27,153.83
    -159.30 (-0.58%)
     
  • NZD/JPY

    82.3420
    -0.8330 (-1.00%)
     

Stride Reports Record Full Year Revenue and Profitability

·15-min read

Fiscal 2022 Career Learning Revenue Grows More Than 60%, Exceeding $400 Million

RESTON, Va., August 09, 2022--(BUSINESS WIRE)--Stride, Inc. (NYSE: LRN), one of the nation’s leading technology-based education companies, today announced its results for the fourth fiscal quarter and full fiscal year ended June 30, 2022.

Fiscal 2022 Highlights Compared to 2021

  • Revenue of $1,686.7 million, compared with $1,536.8 million, driven by Career Learning enrollment strength, Adult Learning, and increases in revenue per enrollment.

  • Income from operations of $156.6 million, compared with $110.5 million, due to revenue growth and improved gross margins.

  • Net income of $107.1 million, compared with $71.5 million.

  • Diluted net income per share of $2.52, compared with $1.71.

  • Adjusted operating income of $188.2 million, compared with $161.4 million. (1)

  • Adjusted EBITDA of $273.1 million, compared with $239.9 million. (1)

Fiscal 2022 Summary Financial Metrics

Year Ended June 30,

Change 2022/2021

2022

2021

$

%

(In thousands, except percentages and per share data)

Revenues

$

1,686,666

$

1,536,760

$

149,906

9.8%

Income from operations

156,628

110,456

46,172

41.8%

Adjusted operating income (1)

188,166

161,431

26,735

16.6%

Net income

107,130

71,451

35,679

49.9%

Net income per share, diluted

2.52

1.71

0.81

47.4%

EBITDA (1)

254,542

200,533

54,009

26.9%

Adjusted EBITDA (1)

273,112

239,866

33,246

13.9%

(1)

To supplement our financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we also present non-GAAP financial measures including adjusted operating income, EBITDA and adjusted EBITDA. Management believes that these additional metrics provide useful information to investors relating to our financial performance. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.

Fourth Quarter Fiscal 2022 Highlights Compared to 2021

  • Revenue of $455.2 million, compared with $397.5 million.

  • Income from operations of $46.1 million, compared with $21.4 million.

  • Net income of $28.1 million, compared with $10.5 million.

  • Diluted net income per share of $0.66, compared with $0.25.

  • Adjusted operating income of $53.5 million, compared with $33.5 million. (1)

  • Adjusted EBITDA of $74.7 million, compared with $54.9 million. (1)

Fourth Quarter Fiscal 2022 Summary Financial Metrics

Three Months Ended June 30,

Change 2022/2021

2022

2021

$

%

(In thousands, except percentages and per share data)

Revenues

$

455,211

$

397,510

$

57,701

14.5%

Income from operations

46,096

21,387

24,709

115.5%

Adjusted operating income (1)

53,473

33,466

20,007

59.8%

Net income

28,090

10,495

17,595

167.7%

Net income per share, diluted

0.66

0.25

0.41

164.0%

EBITDA (1)

70,546

46,426

24,120

52.0%

Adjusted EBITDA (1)

74,652

54,938

19,714

35.9%

(1)

To supplement our financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we also present non-GAAP financial measures including adjusted operating income, EBITDA and adjusted EBITDA. Management believes that these additional metrics provide useful information to investors relating to our financial performance. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.

Revenue and Enrollment Data

Revenue

The following table sets forth the Company’s revenues for the periods indicated:

Three Months Ended

Year Ended

June 30,

Change 2022 / 2021

June 30,

Change 2022 / 2021

2022

2021

$

%

2022

2021

$

%

(In thousands, except percentages)

General Education

$

338,343

$

330,058

$

8,285

2.5

%

$

1,273,783

$

1,280,199

$

(6,416

)

(0.5

%)

Career Learning

Middle - High School

91,479

48,245

43,234

89.6

%

321,416

200,774

120,642

60.1

%

Adult

25,389

19,207

6,182

32.2

%

91,467

55,787

35,680

64.0

%

Total Career Learning

116,868

67,452

49,416

73.3

%

412,883

256,561

156,322

60.9

%

Total Revenues

$

455,211

$

397,510

$

57,701

14.5

%

$

1,686,666

$

1,536,760

$

149,906

9.8

%

Enrollment Data

The following table sets forth total enrollment data for students in our General Education and Career Learning lines of revenue. Enrollments for General Education and Career Learning include those students in full service public or private programs where Stride provides a combination of curriculum, technology, instructional and support services inclusive of administrative support.

Three Months Ended

Change

Year Ended

Change

June 30,

2022 / 2021

June 30,

2022 / 2021

2022

2021

#

%

2022

2021

#

%

(In thousands, except percentages)

General Education (1)

136.5

147.2

(10.7

)

(7.3

%)

143.2

156.7

(13.5

)

(8.6

%)

Career Learning (1)(2)

41.9

28.2

13.7

48.6

%

41.9

29.6

12.3

41.6

%

Total Enrollment

178.4

175.4

3.0

1.7

%

185.1

186.3

(1.2

)

(0.6

%)

(1)

This data includes enrollments for which Stride receives no public funding or revenue.

(2)

No enrollments are included in Career Learning for Galvanize, Tech Elevator or MedCerts.

Revenue per Enrollment Data

The following table sets forth revenue per average enrollment data for students for the period indicated. If the mix of enrollments changes, our revenues will be impacted to the extent the average revenues per enrollments are significantly different.

Three Months Ended

Change

Year Ended

Change

June 30,

2022 / 2021

June 30,

2022 / 2021

2022

2021

$

%

2022

2021

$

%

General Education

$

2,266

$

2,035

$

231

11.4

%

$

8,104

$

7,389

$

715

9.7

%

Career Learning

2,177

1,690

487

28.8

%

7,640

6,711

929

13.8

%

Cash Flow and Capital Allocation

As of June 30, 2022, the Company’s cash and cash equivalents totaled $389.4 million, compared with $386.1 million reported at June 30, 2021.

Capital expenditures for fiscal 2022 were $67.6 million, compared to $52.3 million in fiscal 2021, and were comprised of $9.7 million of property and equipment, $42.2 million of capitalized software development, and $15.7 million of capitalized curriculum development.

Fiscal Year 2023 Outlook

The Company will provide an outlook for fiscal year 2023 when it reports results for the first quarter fiscal year 2023, currently anticipated to be released in October 2022. No separate guidance communication, or enrollment counts, for fiscal 2023 will be provided before that time.

Conference Call

The Company will discuss its fourth quarter and full fiscal year 2022 financial results during a conference call scheduled for Tuesday, August 9, 2022 at 5:00 p.m. eastern time (ET).

A live webcast of the call will be available at https://events.q4inc.com/attendee/647846054. To participate in the live call, investors and analysts should dial (888) 210-2831 (domestic) or 1 (289) 514-2968 (international) at 4:45 p.m. ET. The conference ID number is 4812941. Please access the website at least 15 minutes prior to the start of the call.

A replay of the call will be available starting on August 9, 2022 at 8:00 p.m. ET through September 9, 2022 at 8:00 p.m. ET by dialing (800) 770- 2030 (domestic) or 1 (647) 362 9199 (international) and entering the conference ID 4812941. A webcast replay will be available at https://events.q4inc.com/attendee/647846054 for 30 days.

About Stride Inc.

At Stride, Inc. (NYSE: LRN) we are reimagining learning – where learning is lifelong, deeply personal, and prepares learners for tomorrow. The company has transformed the teaching and learning experience for millions of people by providing innovative, high-quality, tech-enabled education solutions, curriculum, and programs directly to students, schools, the military, and enterprises in primary, secondary, and post-secondary settings. Stride is a premier provider of K-12 education for students, schools, and districts, including career learning services through middle and high school curriculum. For adult learners, Stride delivers professional skills training in healthcare and technology, as well as staffing and talent development for Fortune 500 companies. Stride has delivered millions of courses over the past decade and serves learners in all 50 states and more than 100 countries. The company is a proud sponsor of the Future of School, a nonprofit organization dedicated to closing the gap between the pace of technology and the pace of change in education. More information can be found at stridelearning.com, K12.com, galvanize.com, techelevator.com, and medcerts.com.

Special Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "continues," "likely," "may," "opportunity," "potential," "projects," "will," "expects," "plans," "intends" and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: reduction of per pupil funding amounts at the schools we serve; inability to achieve a sufficient level of new enrollments to sustain our business model; limitations of the enrollment data we present, which may not fully capture trends in the performance of our business; failure to enter into new school contracts or renew existing contracts, in part or in their entirety; failure of the schools we serve or us to comply with federal, state and local regulations, resulting in a loss of funding, an obligation to repay funds previously received, or contractual remedies; governmental investigations that could result in fines, penalties, settlements, or injunctive relief; declines or variations in academic performance outcomes of the students and schools we serve as curriculum standards, testing programs and state accountability metrics evolve; harm to our reputation resulting from poor performance or misconduct by operators or us in any school in our industry and/or in any school in which we operate; legal and regulatory challenges from opponents of virtual public education or for-profit education companies; changes in national and local economic and business conditions and other factors, such as natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as coronavirus disease 2019 ("COVID-19"); discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts, or a reduction in the scope of services, with schools; failure to develop the Career Learning business; entry of new competitors with superior technologies and lower prices; unsuccessful integration of mergers, acquisitions and joint ventures; failure to further develop, maintain and enhance our technology, products, services and brands; inadequate recruiting, training and retention of effective teachers and employees; infringement of our intellectual property; disruptions to our Internet-based learning and delivery systems, including, but not limited to, our data storage systems, resulting from cybersecurity attacks; misuse or unauthorized disclosure of student and personal data; and failure to mitigate or prevent a cybersecurity incident that affects our systems; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this presentation is as of today’s date, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Financial Statements

The financial statements set forth below are not the complete set of Stride Inc.’s financial statements for the three months and full fiscal year ended June 30, 2022 and are presented below without footnotes. Readers are encouraged to obtain and carefully review Stride Inc.’s Annual Report on Form 10-K for the year ended June 30, 2022, including all financial statements contained therein and the footnotes thereto, filed with the SEC, which may be retrieved from the SEC’s website at www.sec.gov or from Stride Inc.’s website at www.stridelearning.com.

STRIDE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Year Ended

June 30,

June 30,

2022

2021

2022

2021

(In thousands except share and per share data)

Revenues

$

455,211

$

397,510

$

1,686,666

$

1,536,760

Instructional costs and services

287,534

260,909

1,090,191

1,001,860

Gross margin

167,677

136,601

596,475

534,900

Selling, general, and administrative expenses

121,581

115,214

439,847

424,444

Income from operations

46,096

21,387

156,628

110,456

Interest income (expense), net

(2,036

)

(5,477

)

(8,277

)

(17,979

)

Other income (expense), net

(5,568

)

553

(1,277

)

2,829

Income before income taxes and income (loss) from equity method investments

38,492

16,463

147,074

95,306

Income tax expense

(10,337

)

(5,998

)

(40,088

)

(24,539

)

Income (loss) from equity method investments

(65

)

30

144

684

Net income attributable to common stockholders

$

28,090

$

10,495

$

107,130

$

71,451

Net income attributable to common stockholders per share:

Basic

$

0.67

$

0.26

$

2.58

$

1.78

Diluted

$

0.66

$

0.25

$

2.52

$

1.71

Weighted average shares used in computing per share amounts:

Basic

41,896,039

40,413,235

41,451,101

40,211,016

Diluted

42,574,712

42,251,633

42,441,524

41,868,580

STRIDE, INC.

CONSOLIDATED BALANCE SHEETS

June 30,

June 30,

2022

2021

(In thousands except share and per share data)

ASSETS

Current assets

Cash and cash equivalents

$

389,398

$

386,080

Accounts receivable, net of allowance of $26,993 and $21,384

418,558

369,303

Inventories, net

36,003

39,690

Prepaid expenses

25,974

19,453

Other current assets

80,601

43,004

Total current assets

950,534

857,530

Operating lease right-of-use assets, net

85,457

94,671

Property and equipment, net

61,537

72,069

Capitalized software, net

71,800

57,308

Capitalized curriculum development costs, net

50,580

50,376

Intangible assets, net

88,669

99,480

Goodwill

241,022

240,353

Deposits and other assets

93,946

105,510

Total assets

$

1,643,545

$

1,577,297

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

61,997

$

62,144

Accrued liabilities

63,200

77,642

Accrued compensation and benefits

73,027

80,363

Deferred revenue

53,630

38,110

Current portion of finance lease liability

37,389

27,336

Current portion of operating lease liability

12,830

20,649

Total current liabilities

302,073

306,244

Long-term finance lease liability

28,888

41,568

Long-term operating lease liability

75,127

77,458

Long-term debt

411,438

299,271

Deferred tax liability

3,205

31,853

Other long-term liabilities

10,233

16,255

Total liabilities

830,964

772,649

Commitments and contingencies

Stockholders’ equity

Preferred stock, par value $0.0001; 10,000,000 shares authorized; zero shares issued or outstanding

Common stock, par value $0.0001; 100,000,000 shares authorized; 48,112,664 and 46,911,527 shares issued; and 42,777,921 and 41,576,784 shares outstanding, respectively

4

4

Additional paid-in capital

687,454

795,449

Accumulated other comprehensive income (loss)

143

(474

)

Retained earnings

227,462

112,151

Treasury stock of 5,334,743 shares at cost

(102,482

)

(102,482

)

Total stockholders’ equity

812,581

804,648

Total liabilities and stockholders' equity

$

1,643,545

$

1,577,297

STRIDE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year Ended

June 30,

2022

2021

(In thousands)

Cash flows from operating activities

Net income

$

107,130

$

71,451

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization expense

97,914

90,077

Stock-based compensation expense

18,570

39,333

Deferred income taxes

1,190

2,549

Provision for doubtful accounts

15,673

6,561

Amortization of discount and fees on debt

1,573

12,620

Noncash operating lease expense

19,810

19,567

Other

9,949

9,766

Changes in assets and liabilities:

Accounts receivable

(57,501

)

(143,073

)

Inventories, prepaid expenses, deposits and other current and long-term assets

4,798

(39,164

)

Accounts payable

11

18,930

Accrued liabilities

7,598

15,899

Accrued compensation and benefits

(7,465

)

32,437

Operating lease liability

(20,742

)

(21,025

)

Deferred revenue and other liabilities

8,376

18,222

Net cash provided by operating activities

206,884

134,150

Cash flows from investing activities

Purchase of property and equipment

(9,748

)

(3,567

)

Capitalized software development costs

(42,191

)

(31,264

)

Capitalized curriculum development costs

(15,687

)

(17,432

)

Sale of long-lived assets

223

Sale of other investments

5,261

Acquisition of MedCerts, LLC, net of cash acquired

(55,031

)

Acquisition of Tech Elevator, Inc., net of cash acquired

(16,107

)

Other acquisitions, loans and investments, net of distributions

(3,899

)

(1,723

)

Proceeds from the maturity of marketable securities

40,163

Purchases of marketable securities

(84,657

)

(40,542

)

Net cash used in investing activities

(110,758

)

(165,443

)

Cash flows from financing activities

Repayments on finance lease obligations

(33,011

)

(24,315

)

Repayments on credit facility

(100,000

)

Issuance of convertible senior notes, net of issuance costs

408,610

Purchases of capped calls in connection with convertible senior notes

(60,354

)

Payments of deferred purchase consideration

(22,858

)

Proceeds from exercise of stock options

414

748

Withholding of stock options for tax withholding

(10,885

)

Repurchase of restricted stock for income tax withholding

(37,855

)

(9,228

)

Net cash provided by (used in) financing activities

(93,310

)

204,576

Net change in cash, cash equivalents and restricted cash

2,816

173,283

Cash, cash equivalents and restricted cash, beginning of period

386,582

213,299

Cash, cash equivalents and restricted cash, end of period

$

389,398

$

386,582

Reconciliation of cash, cash equivalents and restricted cash to balance sheet as of June 30th:

Cash and cash equivalents

$

389,398

$

386,080

Other current assets (restricted cash)

502

Deposits and other assets (restricted cash)

Total cash, cash equivalents and restricted cash

$

389,398

$

386,582

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with GAAP, we have presented adjusted operating income, EBITDA, and adjusted EBITDA, which are not presented in accordance with GAAP.

  • Adjusted operating income (loss) is defined as income (loss) from operations as adjusted for stock-based compensation and the amortization of intangible assets.

  • EBITDA is defined as income (loss) from operations as adjusted for depreciation and amortization.

  • Adjusted EBITDA is defined as income (loss) from operations as adjusted for stock-based compensation and depreciation and amortization.

  • Adjusted EBITDA and adjusted operating income (loss) exclude stock-based compensation, which consists of expenses for stock options, restricted stock, restricted stock units, and performance stock units.

Management believes that the presentation of these non-GAAP financial measures provides useful information to investors relating to our financial performance. Adjusted operating income (loss) and Adjusted EBITDA remove stock-based compensation, which is a non-cash charge that varies based on market volatility and the terms and conditions of the awards. EBITDA and Adjusted EBITDA remove depreciation and amortization, which can vary depending upon accounting methods and the book value of assets. EBITDA and Adjusted EBITDA provide a measure of corporate performance exclusive of capital structure and the method by which assets were acquired.

Our management uses these non-GAAP financial measures:

  • as additional measures of operating performance because they assist us in comparing our performance on a consistent basis; and

  • in presentations to the members of our Board of Directors to enable our Board to review the same measures used by management to compare our current operating results with corresponding prior periods.

Other companies may define these non-GAAP financial measures differently and, as a result, our use of these non-GAAP financial measures may not be directly comparable to similar non-GAAP financial measures used by other companies. Although we use these non-GAAP financial measures to assess the performance of our business, the use of non-GAAP financial measures is limited as they include and/or do not include certain items not included and/or included in the most directly comparable GAAP financial measure.

These non-GAAP financial measures should be considered in addition to, and not as a substitute for, revenues, income (loss), net income (loss) and net income (loss) per share or other related financial information prepared in accordance with GAAP. Adjusted EBITDA is not intended to be a measure of liquidity. You are cautioned not to place undue reliance on these non-GAAP financial measures.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.

Three Months Ended

Year Ended

June 30,

June 30,

2022

2021

2022

2021

(In thousands)

Income from operations

$

46,096

$

21,387

$

156,628

$

110,456

Stock-based compensation expense

4,106

8,512

18,570

39,333

Amortization of intangible assets

3,271

3,567

12,968

11,642

Adjusted operating income

53,473

33,466

188,166

161,431

Depreciation and other amortization

21,179

21,472

84,946

78,435

Adjusted EBITDA

$

74,652

$

54,938

$

273,112

$

239,866

EBITDA

$

70,546

$

46,426

$

254,542

$

200,533

View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005259/en/

Contacts

Investor Contact
Timothy Casey
Vice President, Investor Relations
Stride, Inc.
tcasey@k12.com