Slide 1: Q2 FY2025 Earnings Presentation
Q2 FY2025 Earnings Presentation January 28, 2025
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: FY2025 Q2 Highlights
FY2025 Q2 Highlights 01 02 03 04 Record Enrollment and Increasing Full Year On Track to Achieve FY2028 Organic and Strong In-Year Trends Guidance Targets Inorganic Opportunities Average Q2 enrollments of Most profitable quarter in Trends keep Stride on track to Strong balance sheet and 230.6K, up 19
Slide 5: Growth in Key Financial Metrics
Growth in Key Financial Metrics Revenue ($M) Adjusted Operating Income ($M) $700 $160 $140 $587 $600 $140 $136 $600 $534 $551 $505 $521 $585 $120 $130 $500 $470 $483 $480 $458 $425 $100 $95 $96 $400 $88 $76 $80 $80 $300 $64 $60 $58 $200 $40 $100 $20 $15 $- $- 1 Q3 1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Gui
Slide 6: Strong Enrollment Trends Continue
Strong Enrollment Trends Continue Three Months Ended Dec. 31, 2024 2023 Change Revenue ($M) General Education 354.3 313.9 ↑ 12.9% Enrollments Trends Career Learning • In-year enrollment growth • Middle – High School 213.1 165.1 ↑ 29.1% continues • Adult 19.8 25.9 ↓ (23.6%) • General Education enroll
Slide 7: Increased Revenue and Profitability Guidance
Increased Revenue and Profitability Guidance Q3 FY25 FY25 Guidance1 Guidance1 Guidance Mid-Points Low High Low High • FY25 Revenue: +15% Y-O-Y Revenue $585M $600M $2.320B $2.355B Mid-point of Guidance Adj. Operating Income $130M $140M $430M $450M • FY25 AOI: +50% Y-O-Y Mid-point of Guidance Capital
Slide 8: Strong Balance Sheet with Low Debt
Strong Balance Sheet with Low Debt Cash position, low leverage ratio, and consistent cash flows provide options for capital allocation Select balance sheet and other information as of December 31, 2024 ($M) Cash, Cash Equivalents $738.1 & Marketable Securities Accounts Receivable, Net 582.5 Leverage
Slide 9: Disciplined Capital Allocation
Disciplined Capital Allocation Prioritizing organic growth, new product and technology development and synergistic M&A • Invest in academic quality and student/customer experience to support outcomes and Organic retention Growth • Technology advancements to improve personalization and outcomes • Imp
Slide 10: Compelling Long-Term Growth Targets
Compelling Long-Term Growth Targets Total Revenue ($B) Adj. Operating Income ($M) Diluted EPS ($) 10% CAGR $800M 20% CAGR $9.00 20% CAGR to mid-point (FY23-28) to mid-point (FY23-28) $8.35 $3.50B $3.30B to mid-point (FY23-28) $8.00 $3.00B $585M $7.00 $600M $2.50B $2.70B $6.00 $6.15 $2.04B $1.84B $5.
Slide 11: Appendix
Appendix Stride 11
Slide 12: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Net Income to EBITDA and Adjusted EBITDA Trailing twelve Three months ended Six months ended months ended December 31, December 31, December 31, ($, M) 2024 2023 2024 2023 2024 Net income $96.4 $66.8 $137.3 $71.7 $269.7 Interest expense, net 2.6 2.0 5.0 4.1 9.8 Other (income) expen
Slide 13: Reconciliation of Income from Operations to Adjusted Operating Income
Reconciliation of Income from Operations to Adjusted Operating Income Three months ended Six months ended December 31, December 31, ($, M) 2024 2023 2024 2023 Income from operations 125.1 84.3 172.4 87.6 Amortization of intangible assets 2.6 3.0 5.1 6.0 Stock-based compensation expense 7.9 7.6 16.4
Slide 14: Reconciliation of Income from Operations to Adjusted Operating Income
Reconciliation of Income from Operations to Adjusted Operating Income Three Months Ended Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, ($, M) 2022 2022 2023 2023 2023 2023 2024 2024 2024 Income (loss) from (28.7) 68.1 72.2 53.9 3.3 84.3 88.3 73.7 47.3 operations
Slide 15: Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Three months ended December 31, ($, Millions) 2024 2023 Net Cash Provided by Operating Activities 223.4 173.3 Purchases of property and equipment (0.5) (0.0) Capitalized software development costs (9.8) (8.4) Capitalized c
Slide 16: Reconciliation of Income from Operations to Adjusted Operating Income
Reconciliation of Income from Operations to Adjusted Operating Income Three months ended Year ended March 31, 2025 June 30, 2025 (In Millions) Low High Low High Income from operations $119.8 $127.3 $387.5 $402.5 Amortization of intangible assets 2.2 2.7 9.5 10.5 Stock-based compensation expense 8.0
Slide 17: Effect of Convertible Notes on Share Dilution
Effect of Convertible Notes on Share Dilution Convertible Senior Notes (Illustrative Dilution Example) • Stride Convertible Notes: $420M principal (7.9M shares underlying) • Irrevocably elected that all future conversions of the notes will be settled pursuant to combination settlement, generally req