Stride’s career learning business continues to drive growth
Herndon, va.--(business wire)--stride, inc. (nyse: lrn), one of the nation’s leading technology-based education companies, today announced its results for the third fiscal quarter ended march 31, 2022. third quarter fiscal 2022 highlights compared to 2021 revenue of $421.7 million, compared with $392.1 million, driven by strong enrollment trends, continued growth in adult learning, and increases in revenue per enrollment. income from operations of $60.6 million, compared with $38.6 million, due to improved gross margins and lower selling, general and administrative expenses. net income of $42.9 million, compared with $23.8 million. diluted net income per share of $1.02, compared with $0.57. adjusted operating income of $69.4 million, compared with $54.9 million. (1) adjusted ebitda of $90.3 million, compared with $75.0 million. (1) third quarter fiscal 2022 summary financial metrics 2022 2021 $ % 421,722 392,145 29,577 7.5% 60,594 38,553 22,041 57.2% 69,440 54,906 14,534 26.5% 42,919 23,789 19,130 80.4% 1.02 0.57 0.45 78.9% 84,731 62,153 22,578 36.3% 90,307 75,007 15,300 20.4% nine month fiscal 2022 highlights compared to 2021 revenue of $1,231.5 million, compared with $1,139.3 million. income from operations of $110.5 million, compared with $89.1 million. net income of $79.0 million, compared with $61.0 million. diluted net income per share of $1.87, compared with $1.46. adjusted operating income of $134.7 million, compared with $128.0 million. (1) adjusted ebitda of $198.5 million, compared with $184.9 million. (1) nine month fiscal 2022 summary financial metrics 2022 2021 $ % 1,231,455 1,139,250 92,205 8.1% 110,532 89,069 21,463 24.1% 134,693 127,965 6,728 5.3% 79,040 60,956 18,084 29.7% 1.87 1.46 0.41 28.1% 183,996 154,107 29,889 19.4% 198,460 184,928 13,532 7.3% (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: 2022 2021 $ % 2022 2021 $ % 315,858 322,304 (6,446 ) (2.0 %) 935,440 950,142 (14,702 ) (1.5 %) 83,238 52,382 30,856 58.9 % 229,937 152,529 77,408 50.7 % 22,626 17,459 5,167 29.6 % 66,078 36,579 29,499 80.6 % 105,864 69,841 36,023 51.6 % 296,015 189,108 106,907 56.5 % 421,722 392,145 29,577 7.5 % 1,231,455 1,139,250 92,205 8.1 % 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. 2022 2021 # % 2022 2021 # % 143.8 155.8 (12.0 ) (7.7 %) 145.1 159.4 (14.3 ) (9.0 %) 42.0 29.5 12.5 42.4 % 41.9 30.0 11.9 39.7 % 185.8 185.3 0.5 0.3 % 187.0 189.4 (2.4 ) (1.3 %) this data includes enrollments for which stride receives no public funding or revenue. 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 # % 2022 2021 # % 2,006 1,876 130 6.9% 5,867 5,384 483 9.0% 1,981 1,759 222 12.6% 5,463 5,033 430 8.5% cash flow and capital allocation as of march 31, 2022, the company’s cash and cash equivalents totaled $308.6 million, compared with $386.1 million reported at june 30, 2021, in line with normal seasonal trends. capital expenditures for the first nine months of fiscal 2022 were $47.9 million, compared to $34.9 million in the first nine months of fiscal 2021, and were comprised of $4.7 million of property and equipment, $30.8 million of capitalized software development, and $12.4 million of capitalized curriculum development. fiscal year 2022 outlook the company is updating and raising its forecast for the full fiscal year 2022: revenue in the range of $1.645 billion to $1.660 billion. capital expenditures in the range of $65 million to $70 million. note that capital expenditures include the purchase of property and equipment, capitalized software, and curriculum development costs as defined on our statement of cash flows. effective tax rate of 27% to 29%. adjusted operating income in the range of $180 million to $185 million. (1) (1) conference call the company will discuss its third quarter fiscal year 2022 financial results during a conference call scheduled for tuesday, april 19, 2022 at 5:00 p.m. eastern time (et). a live webcast of the call will be available at https://events.q4inc.com/attendee/550949613. 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 april 19, 2022 at 8:00 p.m. et through may 19, 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/550949613 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 readiness education 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 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 and nine months ended march 31, 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 march 31, 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 2022 2021 421,722 392,145 1,231,455 1,139,250 266,883 253,128 802,657 740,951 154,839 139,017 428,798 398,299 94,245 100,464 318,266 309,230 60,594 38,553 110,532 89,069 (2,373 ) (5,371 ) (6,241 ) (12,502 ) 496 486 4,291 2,276 58,717 33,668 108,582 78,843 (16,716 ) (10,275 ) (29,751 ) (18,541 ) 918 396 209 654 42,919 23,789 79,040 60,956 1.03 0.59 1.91 1.52 1.02 0.57 1.87 1.46 41,823,564 40,286,109 41,302,789 40,143,610 42,136,042 41,690,509 42,351,877 41,701,955 stride, inc. unaudited condensed consolidated balance sheets 2022 2021 308,564 386,080 422,615 369,303 23,986 39,690 35,861 19,453 80,553 43,004 871,579 857,530 87,516 94,671 67,565 72,069 64,921 57,308 50,476 50,376 91,940 99,480 240,952 240,353 99,583 105,510 1,574,532 1,577,297 32,848 62,144 55,152 77,642 59,843 80,363 51,530 38,110 37,016 27,336 13,790 20,649 250,179 306,244 37,566 41,568 76,342 77,458 411,047 299,271 9,034 31,853 9,794 16,255 793,962 772,649 — — 4 4 683,892 795,449 (216 ) (474 ) 199,372 112,151 (102,482 ) (102,482 ) 780,570 804,648 1,574,532 1,577,297 stride, inc. unaudited condensed consolidated statements of cash flows nine months ended 2022 2021 79,040 60,956 73,464 65,038 14,464 30,821 6,572 2,256 7,047 7,635 1,182 8,737 15,084 14,573 4,675 7,883 (56,072 ) (197,659 ) 7,967 (27,798 ) (26,761 ) (913 ) (14,630 ) 8,850 (20,652 ) 14,913 (15,899 ) (15,650 ) 5,922 31,480 81,403 11,122 (4,734 ) (2,967 ) (30,837 ) (20,189 ) (12,361 ) (11,742 ) — 223 5,261 — — (54,795 ) — (16,030 ) (3,654 ) (1,008 ) 19,904 — (64,151 ) — (90,572 ) (106,508 ) (23,919 ) (17,103 ) — (100,000 ) — 408,610 — (60,354 ) (7,858 ) — 391 724 — (10,885 ) (37,463 ) (8,872 ) (68,849 ) 212,120 (78,018 ) 116,734 386,582 213,299 308,564 330,033 308,564 329,031 — 502 — 500 308,564 330,033 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. third quarter fiscal 2022 2022 2021 2022 2021 $ 60,594 $ 38,553 $ 110,532 $ 89,069 5,576 12,854 14,464 30,821 3,270 3,499 9,697 8,075 69,440 54,906 134,693 127,965 20,867 20,101 63,767 56,963 $ 90,307 $ 75,007 $ 198,460 $ 184,928 $ 84,731 $ 62,153 $ 183,996 $ 154,107 fiscal year 2022 outlook $ 148.0 $ 151.0 19.0 21.0 13.0 13.0 $ 180.0 $ 185.0
