Slide 1: Q2 FY2023 Earnings Presentation
Q2 FY2023 Earnings Presentation January 24, 2023 stride
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 1H FY23 Performance • Revenue: $883.6M 1 Strong in-year demand +9.1% y-o-y • Ended quarter with total enrollments of 180.3K up 6.4K from end of Q1 • Adult Learning revenue continues to grow, up 42% y-o-y • Adj. Operating Income1: $56.4M -13.6% y-o-y • Adj. EBITDA1: $103.5M 2 Rai
Slide 7: Strong year-over-year growth in key financial metrics
Strong year-over-year growth in key financial metrics Revenue ($M) Adjusted Operating Income2 ($M) 100 500 458 465 80 410 422 425 76 400 80 69 400 61 60 50 55 54 300 37 34 40 22 23 16 200 20 5 0 100 (20) (13) 0 (20) (40) Q1 Q2 Q3 Q1 Q2 Guidance Q3 Q1 Q2 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Guidance Q3 Q
Slide 8: Career & Adult Learning Continue to Drive Growth
Career & Adult Learning Continue to Drive Growth Three Months Ended December 31, 2022 2021 Change Career Learning Revenue ($M) • Enrollment growth of 58% General Education 274.7 313.2 ↓ -12.3% Career Learning Adult Learning Middle – High School 153.8 75.3 ↑ 104.2% • Strong organic growth rate Adult
Slide 9: Raising Full Year Revenue and Profitability Guidance
Raising Full Year Revenue and Profitability Guidance Q3 FY23 Updated FY23 Guidance Reflects Strong Guidance1 Guidance1 Demand for Offerings Low High Low High • FY23 Revenue: +6% Y-O-Y Revenue $445.0M $465.0M $1.775B $1.815B Mid-point of Guidance Adj. Operating Income2 $70.0M $80.0M $180.0M $200.0M •
Slide 10: FY25 Financial Outlook
FY25 Financial Outlook Strategic priorities supporting outlook Support improving learner outcomes while delivering strong growth and sustainable long-term value creation Enrollment growth in K-12 and Adult programs Updated FY23 FY25 Expand capacity in existing Guidance1 Financial Outlook and new pro
Slide 11: Liquidity & Low Debt Support Organic & Inorganic Growth
Liquidity & Low Debt Support Organic & Inorganic Growth Select balance sheet and other information As of December 31, 2022 ($M) Strong cash position Cash and Cash Equivalents 318.3 Accounts receivable Accounts Receivable, Net 442.2 balance reflects seasonality and timing of payments Accounts Payable
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 Six months ended December 31, December 31, ($, M) 2022 2021 2022 2021 Income from operations 68.1 56.9 39.4 49.9 Stock-based compensation expense 4.9 0.6 10.4 8.9 Amortization of intangible a
Slide 15: Reconciliation of Income (Loss) from Operations to Adjusted Operating Income (Loss)
RECONCILIATION OF INCOME (LOSS) FROM OPERATIONS TO ADJUSTED OPERATING INCOME (LOSS) Three months ended Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, ($, M) 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 2022 Inco
Slide 16: Reconciliation of Income from Operations to Adjusted Operating Income (Guidance)
RECONCILIATION OF INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME Three months ended Year ended March 31, 2023 June 30, 2023 ($, Millions) Low High Low High Income from operations 62.5 70.5 147.5 164.5 Stock-based compensation expense 4.5 5.5 20.0 22.0 Amortization of intangible assets 3.0 4.0 1