Slide 1: Q3 FY2023 Earnings Presentation
Q3 FY2023 Earnings Presentation April 25, 2023
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 that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release are forward-
Slide 3: Multiple touchpoints along a lifelong learner's education and career
Career Advancement (Corp. Training & Upskilling) Leveraging over 20 years addressable of experience with over Job Placement Market in U.S. & Recruitment 2 million students supported, and a scalable education services platform, Stride Early Career provides online and blended & Immersive lifelong lear
Slide 4: Strong and diversified portfolio
Strong and diversified portfolio Digital assets support learners across general education, career preparation and adult learning. Leveraging existing capabilities to expand into new products and services. General Education and Career Learning MS/HS New Products Adult Learners Full Time Online Learni
Slide 5: Compelling long-term investment thesis
Compelling long-term investment thesis Growing in $100B+ addressable market in U.S. 01 02 03 04 05 Leading education Sustainable core Career Learning Experienced, Financial services platform business growth diverse leadership track record With scale, Secular shift toward Leveraging Deep educational
Slide 6: Quarterly Highlights
Quarterly Highlights 9 Mo. FY23 Performance • Revenue: $1.35B 1 Strong in-year demand +9.9% y-o-y • Third quarter total enrollments of 181.8K up nearly 8K from first quarter • Adult Learning revenue continues to grow, up more than 30% • Adj. Operating Income1: $136.6M +1.4% y-o-y • Adj. EBITDA1: $20
Slide 7: Strong year-over-year growth in key financial metrics
Strong year-over-year growth in key financial metrics Revenue ($M) Adjusted Operating Income1 ($M) 500 455 458 470 100 422 425 76 80 400 410 80 69 400 61 60 54 300 40 200 20 5 0 100 (20) (20) 0 (40) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY22 FY23 FY22 FY23 Continued execution of growth Demonstra
Slide 8: Career & Adult Learning Continue to Drive Growth
Career & Adult Learning Continue to Drive Growth Three Months Ended March 31, 2023 2022 Change Career Learning Revenue ($M) • Enrollment growth of 60.0% General Education 289.6 315.9 ↓ (8.3%) Career Learning Adult Learning Middle – High School 150.8 83.2 ↑ 81.3% • Strong organic growth rate Adult 29
Slide 9: Raising Revenue and Tightening Profitability Guidance
Raising Revenue and Tightening Profitability Guidance Previous FY23 Updated FY23 Guidance Reflects Strong Guidance Guidance1 Demand for Offerings Low High Low High • FY23 Revenue: +8% y-o-y Revenue $1.775B $1.815B $1.805B $1.825B Mid-point of Guidance Adj. Operating Income2 $180.0M $200.0M $193.0M $
Slide 10: FY25 Financial Outlook
FY25 Financial Outlook Strategic priorities supporting outlook Support improving learner outcomes while delivering strong growth and sustainable long-term value creation Enrollment growth in K-12 and Adult programs Updated FY23 FY25 Expand capacity in existing Guidance1 Financial Outlook and new pro
Slide 11: Liquidity & Low Debt Support Organic & Inorganic Growth
Liquidity & Low Debt Support Organic & Inorganic Growth Select balance sheet and other information As of March 31, 2023 ($M) Strong cash position Cash and Cash Equivalents 373.7 Accounts receivable Accounts Receivable, Net 474.7 balance reflects seasonality and timing of payments Accounts Payable 35
Slide 12: Disciplined capital allocation
Disciplined capital allocation Prioritizing free cash flow sustainability, educational platform development, and synergistic M&A • Invest in academic quality & student/customer experience to support outcomes & retention Organic growth • Implement innovative products across portfolio • Leverage platf
Slide 13: Appendix
Appendix Stride
Slide 14: Reconciliation of Income from Operations to Adjusted Operating Income and Adjusted EBITDA
RECONCILIATION OF INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME AND ADJUSTED EBITDA Three months ended Nine months ended March 31, March 31, ($, M) 2023 2022 2023 2022 Income from operations 72.2 60.6 111.6 110.5 Stock-based compensation expense 4.7 5.6 15.2 14.5 Amortization of intangible ass
Slide 15: Reconciliation of Income (Loss) from Operations to Adjusted Operating Income (Loss)
RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO ADJUSTED OPERATING INCOME (LOSS) Three Months Ended ($, M) Sept. 30, 2021 Dec. 31, 2021 Mar. 31, 2022 Jun. 30, 2022 Sept. 30, 2022 Dec. 31, 2022 Income (loss) from operations (7.0) 56.9 60.6 46.1 (28.7) 68.1 Stock-based compensation 8.3 0.6 5.6 4.1
Slide 16: Reconciliation of Income from Operations to Adjusted Operating Income, FY2023
RECONCILIATION OF INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME Year ended June 30, 2023 ($, Millions) Low High Income from operations 161.0 165.5 Stock-based compensation expense 19.0 21.0 Amortization of intangible assets 13.0 13.5 Adjusted operating income 193.0 200.0 16 16