Slide 1: Q3 FY2024 Earnings Presentation
Q3 FY2024 Earnings Presentation April 23, 2024
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 presentation are forward-l
Slide 3: Compelling Long-term Investment Thesis
Compelling Innovator with the scale, expertise & long-term customer Long-term Disruptor in Education relationships to change education Investment Thesis Sustainable & Growing Accelerating secular shift toward virtual education and Virtual School Business school choice New Products & Leveraging capab
Slide 4: Quarterly Highlights
Quarterly Highlights 01 02 03 04 Continued strong in-year 198.4K enrollments tops Organic and enrollment trends pandemic highs Raising Full Year Guidance Inorganic Opportunities In-year demand and retention Parent demand for school Mid-point of revenue and Strong balance sheet and strength leading t
Slide 5: Year-over-year Growth in Key Financial Metrics
Year-over-year Growth in Key Financial Metrics Revenue ($M) Adjusted Operating Income1 ($M) 600 110 95 96 505 521 470 483 480 90 80 500 458 76 425 70 64 400 50 300 30 15 200 10 100 (10) 0 (30) (20) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY23 FY24 FY23 FY24 Demonstrated demand for Enrollment growt
Slide 6: Strong In-year Enrollment Trends
Strong In-year Enrollment Trends Three Months Ended March 31, 2024 2023 Change Revenue ($M) General Education 328.9 289.6 ↑ 14% Enrollments Trends Career Learning • Enrollments exceed • Middle – High School 167.9 150.8 ↑ 11% pandemic highs • Adult 24.0 29.9 ↓ (20%) • General Education enrollments in
Slide 7: Guiding to Strong Revenue and Profitability Growth
Guiding to Strong Revenue and Profitability Growth Previous FY24 Updated FY24 Guidance Reflects Continued Guidance Guidance1 Demand for Offerings Low High Low High • FY24 Revenue: +10% Y-O-Y – Mid-point of Guidance Revenue $1.99B $2.04B $2.02B $2.04B • FY24 AOI2: +42% Y-O-Y – Mid-point of Guidance A
Slide 8: Strong Balance Sheet with Low Debt
Strong Balance Sheet with Low Debt Cash position, low leverage ratio, and consistent cash flows provide options for capital allocation Select balance sheet and other information As of March 31, 2024 ($M) Cash, Cash Equivalents 570.7 & Marketable Securities Accounts Receivable, Net 577.8 Leverage Acc
Slide 9: Disciplined Capital Allocation
Disciplined Capital Allocation Prioritizing organic growth, new product and technology development and synergistic M&A • Invest in academic quality and student/customer experience to support outcomes and Organic retention Growth • Technology advancements to improve personalization and outcomes • Imp
Slide 10: Compelling Long-Term Growth Targets
Compelling Long-Term Growth Targets Total Revenue ($B) Adj. Operating Income ($M) EPS ($) $800M $9.00 $8.35 $3.50B $3.30B $8.00 10% CAGR 20% CAGR 20% CAGR $3.00B to mid-point to mid-point $585M $7.00 to mid-point $600M $6.00 $2.50B $2.70B $6.15 $5.00 $1.84B $400M $2.00B $415M $4.00 $2.97 $1.50B $201
Slide 11: Appendix
Appendix Stride 11
Slide 12: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Net Income to EBITDA and Adjusted EBITDA Three months ended Nine months ended March 31, March 31, ($, M) 2024 2023 2024 2023 Net income 69.7 55.5 141.4 83.5 Interest expense, net 2.4 2.2 6.5 6.3 Other (income) expense, net (7.7) (4.6) (19.4) (9.6) Income tax expense 24.7 19.5 48.4
Slide 13: Reconciliation of Income from Operations to Adjusted Operating Income
Reconciliation of Income from Operations to Adjusted Operating Income Three months ended Nine months ended March 31, March 31, ($, M) 2024 2023 2024 2023 Income from operations 88.3 72.2 175.9 111.6 Amortization of intangible assets 2.9 3.2 8.8 9.8 Stock-based compensation expense 5.2 4.8 21.3 15.2
Slide 14: Reconciliation of Income (Loss) from Operations to Adjusted Operating Income (Loss)
Reconciliation of Income (Loss) from Operations to Adjusted Operating Income (Loss) Three Months Ended Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, ($, M) 2022 2022 2023 2023 2023 2023 Income (loss) from operations (28.7) 68.1 72.2 53.9 3.3 84.3 Stock-based compensation expense 5.5 4.9 4.
Slide 15: Reconciliation of Income from Operations to Adjusted Operating Income
Reconciliation of Income from Operations to Adjusted Operating Income Year ended Year ended June 30, 2023 June 30, 2024 ($, Millions) Low High Income from operations 165.5 240.5 247.0 Stock-based compensation expense 20.3 28.0 31.0 Amortization of intangible assets 15.2 11.5 12.0 Adjusted operating
Slide 16: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Three Months Ended March 31, ($, Millions) 2024 2023 Net Cash Provided by Operating Activities 68.5 85.1 Purchases of property and equipment 0.2 (0.8) Capitalized software development costs (11.7) (11.2) Capitalized curric