Record Career Learning Enrollments
RESTON, Va.–(BUSINESS WIRE)–Stride, Inc. (NYSE: LRN), one of the nation’s leading technology-based education companies, today announced its results for the first fiscal quarter ended September 30, 2022. 
First Quarter Fiscal 2023 Highlights Compared to 2022
First Quarter Fiscal 2023 Summary Financial Metrics
2022
2021
$
%
425,150
400,226
24,924
6.2%
(28,719)
(6,977)
(21,742)
-311.6%
(19,920)
4,522
(24,442)
-540.5%
(22,672)
(5,883)
(16,789)
-285.4%
(0.54)
(0.15)
(0.39)
-260.0%
(2,468)
17,170
(19,638)
-114.4%
3,042
25,456
(22,414)
-88.0%
(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 (loss), 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:
2022
2021
$
%
271,658
306,341
(34,683)
(11.3%)
125,535
71,411
54,124
75.8%
27,957
22,474
5,483
24.4%
153,492
93,885
59,607
63.5%
425,150
400,226
24,924
6.2%
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 only 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.
2022
2021
#
%
112.3
147.6
(35.3)
(23.9%)
61.6
42.0
19.6
46.7%
173.9
189.6
(15.7)
(8.3%)
(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.
2022
2021
$
%
2,216
1,885
331
17.6%
2,029
1,688
341
20.2%
Cash Flow and Capital Allocation
As of September 30, 2022, the Company’s cash and cash equivalents totaled $194.5 million, compared with $389.4 million reported at June 30, 2022. The decrease is largely the result of normal seasonal expenditures incurred at the start of the school year.
Capital expenditures for three months ended September 30, 2022 were $16.8 million, compared to $15.4 million the three months ended September 30, 2021, and were comprised of $0.9 million of property and equipment, $9.8 million of capitalized software development, and $6.1 million of capitalized curriculum development.
Fiscal Year 2023 Outlook
The Company is forecasting the following for the full fiscal year 2023:
The Company is forecasting the following for the second quarter fiscal year 2023:
(1) In addition to providing an outlook for revenue and capital expenditures, adjusted operating income is provided as a supplemental non-GAAP financial measure as management believes that it provides useful information to our investors. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below. Please also see Special Note on Forward Looking Statements below.
Conference Call
The Company will discuss its first quarter fiscal year 2023 financial results during a conference call scheduled for Tuesday, October 25, 2022 at 5:00 p.m. eastern time (ET).
A live webcast of the call will be available at https://events.q4inc.com/attendee/795050869. 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 October 25, 2022 at 8:00 p.m. ET through November 25, 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/795050869 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. 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 that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-looking statements. 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 prevent or mitigate 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 ended September 30, 2022 and are presented below without footnotes. Readers are encouraged to obtain and carefully review Stride Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 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.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
2022
2021
425,150
400,226
295,501
273,824
129,649
126,402
158,368
133,379
(28,719)
(6,977)
(2,046)
(1,993)
1,037
(89)
(29,728)
(9,059)
7,507
2,893
(451)
283
(22,672)
(5,883)
(0.54)
(0.15)
(0.54)
(0.15)
42,076,628
40,559,066
42,076,628
40,559,066
STRIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
2022
2022
194,524
389,398
543,705
418,558
27,919
36,003
71,149
25,974
93,840
80,601
931,137
950,534
79,327
85,457
72,307
61,537
74,748
71,800
51,430
50,580
86,690
88,669
246,238
241,022
80,221
93,946
1,622,098
1,643,545
68,956
61,997
42,540
63,200
40,084
73,027
80,682
53,630
43,627
37,389
13,356
12,830
289,245
302,073
34,401
28,888
69,113
75,127
411,848
411,438
20,182
3,205
10,486
10,233
835,275
830,964
—
—
4
4
683,993
687,454
518
143
204,790
227,462
(102,482)
(102,482)
786,823
812,581
1,622,098
1,643,545
STRIDE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
2022
2021
(22,672)
(5,883)
26,251
24,147
5,510
8,286
17,223
5,484
1,503
152
410
404
3,866
5,005
(3,918)
4,325
(126,521)
(150,263)
(34,695)
1,260
8,425
(1,256)
(9,971)
(2,464)
(32,805)
(44,395)
(2,605)
(5,321)
26,853
29,009
(143,146)
(131,510)
(913)
(1,278)
(9,793)
(9,690)
(6,145)
(4,376)
60
—
(1,409)
—
(213)
(192)
12,044
1,501
(20,126)
(9,196)
(26,495)
(23,231)
(9,314)
(7,020)
(7,024)
—
10
246
(8,905)
(6,043)
(25,233)
(12,817)
(194,874)
(167,558)
389,398
386,582
194,524
219,024
194,524
218,519
—
505
194,524
219,024
Non-GAAP Financial Measures
To supplement our financial statements presented in accordance with GAAP, we have presented adjusted operating income (loss), EBITDA, and adjusted EBITDA, which are not presented in accordance with GAAP.
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:
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) from operations, 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.
Reconciliation of Loss from Operations to Adjusted Operating Income (Loss) and Adjusted EBITDA
First Quarter Fiscal Year 2023
2022
2021
$
(28,719)
$
(6,977)
5,510
8,286
3,289
3,213
(19,920)
4,522
22,962
20,934
$
3,042
$
25,456
$
(2,468)
$
17,170
Reconciliation of Income from Operations to Adjusted Operating Income (unaudited)
Fiscal Year 2023 Outlook
$
62.0
$
70.5
$
127.5
$
151.5
5.0
6.0
20.0
25.0
3.0
3.5
12.5
13.5
$
70.0
$
80.0
$
160.0
$
190.0
Contacts
Investor Contact
Timothy Casey
Vice President, Investor Relations
Stride, Inc.
tcasey@k12.com
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