Slide 1: Q2 FY2021 Earnings Presentation
Q2 FY2021 Earnings Presentation January 26, 2021
Slide 2: Safe Harbor
Safe Harbor This presentation 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,
Slide 3: Agenda
Agenda o Highlights o Career Learning o Financial Performance 3
Slide 4: Company Highlights
Company Highlights • Company names James Rhyu as CEO and member of the Board in next step of Q2 FY21 Performance ongoing Succession Plan • Revenue of $376.1M (+46% y-o-y) • Consistent focus on cost management, retention, and career learning drove very • Adjusted Operating Income of strong quarter an
Slide 5: Strong momentum in Career Learning business
Strong momentum in Career Learning business In just five years, Stride has built the assets and capabilities to reach today’s ~$250M scale and is well-positioned to sustain high growth into the future Career Preparation Career Development / Enterprise • 30.3K students enrolled as of • Acquired top s
Slide 6: Robust year-over-year growth in key financial metrics
Robust year-over-year growth in key financial metrics • Successful execution of growth strategy into Career Learning Revenue ($M) Adjusted Operating Adjusted • High quality of Stride’s Income ($M) EBITDA ($M) educational services 376 71 50 • Strength of business model 32% 46% 34% and competitive pos
Slide 7: Strong revenue growth in both General Education and Career Learning
Strong revenue growth in both General Education and Career Learning Growing Demand for Online Education Three Months Ended December 31 2020 2019 % change • Fifth consecutive year of growth in enrollments Revenue (in millions) General Education 314.0 232.6 35% • Even without the impact of Career Lear
Slide 8: Double digit growth in key financial metrics for the six months ended Dec. 31, 2020
Double digit growth in key financial metrics for the six months ended Dec. 31, 2020 Adjusted Operating Adjusted Revenue ($M) Gross Profit ($M) Income($M) EBITDA ($M) 800 747 300 50% 120 16% 80 14% 110 700 73 45% 259 15% 70 250 45% 100 12% 600 46% 15% 60 93% 14% 515 200 40% 80 500 10% 178 203% 13% 50
Slide 9: Strong balance sheet & liquidity
Strong balance sheet Cash position reflects & liquidity seasonality of cash flows, use of cash for Flexibility to maintain long-term low leverage ratios acquisitions and issuance of convertible notes Select balance sheet and other information For the Three Months Ended December 31, 2020 ($M) Account
Slide 10: Q3 and FY21 guidance
Q3 and FY21 guidance Q3 FY2021 FY2021 Low High Low High (In millions) Revenue $ 375.0 $ 385.0 $ 1,500.0 $ 1,525.0 Income from operations 30.5 34.5 90.5 98.5 Stock-based compensation expense 13.0 14.0 43.0 45.0 Amortization of intangible assets 3.5 3.5 11.5 11.5 Adjusted operating income $ 47.0 $ 52.
Slide 11: Appendix
Appendix
Slide 12: Industry leading management team with diverse expertise
Industry leading management team with diverse expertise Nate Davis James Rhyu Dr. Shaun McAlmont Kevin P. Chavous Tim Medina Dr. Tony Bennett Valerie Maddy Executive Chairman of the Chief Executive Officer President, Career Learning President, Academics, Chief Financial Officer SVP, School Managemen
Slide 13: The new Career Advancement
The new Career Advancement (Corp. Training & Upskilling) $100B+ addressable Leveraging over 20 years Job Placement market of experience with over 2 & Recruitment million students supported, and a scalable education services platform, Stride provides Early Career online and blended lifelong & Immersi
Slide 14: New acquisitions further expand addressable opportunity
New acquisitions further expand addressable Purchase $23.5M $70.0M** Price opportunity Revenue* ~$11M ~$23M Increased presence in adult learning and corporate Remote and in-person Online allied healthcare and IT training, including training markets Offerings software engineering certification prep a
Slide 15: Well positioned general education business
Well positioned general education business Online & blended learning expertise & assets to address large K-12 market General Education Solutions Growing mass acceptance of online learning Parents are now digital natives and are used to learning and getting information online School districts shiftin
Slide 16: Reconciliation
ADJ. OPERATING INCOME AND EBITDA TO GAAP FINANCIALS Reconciliation Three Months Ended Six Months Ended December 31, December 31, (in millions) 2020 2019 2020 2019 Income from operations $ 38.5 $ 30.3 $ 50.5 $ 10.9 Stock-based compensation expense $ 9.1 $ 6.2 $ 18.0 $ 11.7 Amortization of intangible
Slide 17: Reconciliation – MedCerts and Tech Elevator
ADJ. OPERATING INCOME AND EBITDA TO GAAP FINANCIALS Reconciliation – MedCerts and Tech Elevator Three Months Ended December 31, 2020 (In thousands, except percentages) MedCerts, LLC Tech Elevator, Inc. As Reported As Reported Purchase (excl. Purchase Purchase (excl. Purchase As Reported Accounting A