Slide 1: Q4 FY2023 Earnings Presentation
Q4 FY2023 Earnings Presentation August 15, 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: Highlights
Highlights FY23 Performance • Revenue: $1.84B 1 Record revenue and profitability +9% y-o-y • Revenue of $1.84 billion; Adj. operating income of $201.0 million • Seventh straight year of revenue growth • Adj. Operating Income1: $201.0M +7% y-o-y 2 In-year enrollment strength • Adj. EBITDA1: $296.2M •
Slide 4: Continued growth in key financial metrics
Continued growth in key financial metrics Revenue ($M) Adjusted Operating Income1 ($M) $2.0B $1.84B $250M $1.69B $201M $1.6B $1.54B $200M $188M $161M $1.2B $1.04B $150M $0.8B $100M $62M $0.4B $50M - - FY2020 FY2021 FY2022 FY2023 FY2020 FY2021 FY2022 FY2023 Continued execution of growth Demonstrated
Slide 5: Career Learning Continues to Drive Growth
Career Learning Continues to Drive Growth Year Ended June 30, 2023 2022 Change Career Learning Revenue ($M) • Enrollment growth of 57% General Education 1,131.4 1,273.8 ↓ (11.2%) Career Learning Adult Learning Middle – High School 586.8 321.4 ↑ 82.6% • Strong organic growth Adult 119.2 91.5 ↑ 30.3%
Slide 6: 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 FY23 FY25 Actuals Financial Outlook Expand capacity in existing and new programs Low
Slide 7: Liquidity & Low Debt Support Organic & Inorganic Growth
Liquidity & Low Debt Support Organic & Inorganic Growth Select balance sheet and other information As of June 30, 2023 ($M) Strong cash Cash and Cash Equivalents 410.8 position Accounts Marketable Securities 134.7 receivable balance reflects seasonality and Accounts Receivable, Net 463.7 timing of p
Slide 8: Disciplined capital allocation
Disciplined capital allocation Prioritizing free cash flow sustainability, educational platform development, and synergistic M&A • Invest in academic quality & student/customer experience to support outcomes & retention Organic growth • Implement innovative products across portfolio • Leverage platf
Slide 9: Appendix
Appendix Stride
Slide 10: Reconciliation of Income from Operations to Adjusted Operating Income
RECONCILIATION OF INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME Three Months Ended Year Ended June 30, June 30, ($, M) 2023 2022 2023 2022 Income from operations 53.9 46.1 165.5 156.6 Stock-based compensation expense 5.4 3.3 15.2 13.0 Amortization of intangible assets 5.1 4.1 20.3 18.6 Adjuste
Slide 11: Reconciliation of Income from Operations to Adjusted Operating Income (FY2021-2020)
RECONCILIATION OF INCOME FROM OPERATIONS TO ADJUSTED OPERATING INCOME Year Ended June 30, ($, M) 2021 2020 Income from operations 110.5 32.5 Stock-based compensation expense 39.3 23.6 Amortization of intangible assets 11.6 6.0 Adjusted operating income 161.4 62.1 11
Slide 12: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA Three Months Ended Year Ended June 30, June 30, ($, M) 2023 2022 2023 2022 Net income 43.4 28.1 126.9 107.1 Interest (income) expense, net 2.1 2.0 8.4 8.3 Other (income) expense, net (5.9) 5.6 (15.4) 1.3 Income tax expense 14.4 10.3 45.3 40.
Slide 13: Reconciliation of Operating Cash Flow to Free Cash Flow
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW Year Ended June 30, ($, Millions) 2023 2022 Net Cash Provided by Operating Activities 203.1 206.9 Purchases of property and equipment (4.3) (9.7) Capitalized software development costs (45.0) (42.2) Capitalized curriculum