Fiscal 2022 Career Learning Revenue Grows More
Than 60%, Exceeding $400 Million
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/
Investor Contact Timothy Casey Vice President, Investor
Relations Stride, Inc. tcasey@k12.com
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