Stride, Inc. · NYSE:LRN
Stride — Investor Presentation (2022)
22 slides from Stride's investor presentation, Sep 13, 2022
Slide 1: Company Overview Summer 2022
Company Overview Summer 2022
Slide 2: Safe Harbor
Safe Harbor This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues
Slide 3: Lifelong learning platform in a $100B+ addressable market
Career Advancement (Corp. Training & Upskilling) $100B+ Leveraging over 20 years addressable Job Placement Market in U.S. of experience with over & Recruitment 2 million students supported, and a scalable education services platform, Stride Early Career provides online and blended & Immersive lifelo
Slide 4: Increasing demand for virtual education
Increasing demand for virtual education Secular Trends Driving Growth in Online Learning $35B+Addressable Market • Growing mass acceptance of online learning • Parents are now digital natives and are used to learning and getting information online • School districts shifting from print to digital fo
Slide 5: Large & expanding Career Learning market
Large & expanding Career Learning market Strong Secular Market Trends Driving Demand for Our Solutions • Bi-partisan support for workforce development at middle / high school $65B+ and adult levels Addressable Market • Increasingly competitive global market • Technology advancement driving need to r
Slide 6: Leading to increased demand for our solutions
Leading to increased demand for our solutions Workforce demands are changing, and students and employers are struggling to find and fill jobs – even with $164B in annual private sector spending on employee training and development, the skills gap continues to grow Student loan burden Applicants are
Slide 7: 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 8: Deep political, regulatory & policy expertise
Deep political, regulatory & policy expertise Key Issues Successfully operating in a complex industry with vast knowledge and experience creating a difficult-to-replicate business model Eliminate barriers to allow full-time online schools in all states • Formidable national network of professional s
Slide 9: Strong customer relationships
Strong customer relationships Long-standing relationships built over 20+ year history with high retention rates and over 2 million students supported 100+ 189,600+ Students ~750 Schools & Programs • Full-time K-12 students enrolled in Schools & Districts Q1 FY22 • School districts served with produc
Slide 10: Consistent general education business
Consistent general education business Online & blended learning expertise & assets to address large K-12 market General Education Solutions Growing mass acceptance of online learning Parents are now digital natives and are used to learning and getting information online School districts shifting fro
Slide 11: High-growth career learning business
High-growth career learning business Leveraging expertise & assets to address adjacent markets Career Learning Solutions Bi-partisan support for workforce development at K-12 and adult levels Increasingly competitive global market Technology advancement driving need to Career Career Enterprise reski
Slide 12: Industry-leading management team
Industry- leading management Kevin P. Chavous team James Rhyu Donna Blackman Vincent Mathis Chief Executive Officer Senior Advisor to the CEO Chief Financial Officer EVP and General Counsel 20+ years of experience 30+ years of experience 20+ years of experience 30+ years of experience with diverse e
Slide 13: ESG factors engrained in company culture
ESG factors engrained in company culture Support inclusive & equitable education & promote lifelong learning; first ESG Report published in June 2021 outlining approach to ESG Environmental Social Governance • Online schools – no transportation • Comprehensive D&I initiative • Board of Directors • 7
Slide 14: Execution track record
Execution track record Sustained revenue growth… Total Enrollment(1) (K) Total Revenue ($M) QE 9/30 FYE 6/30 1,687 11% 195 14% 1,537 190 CAGR(2) CAGR 121 124 112 114 1,016 1,041 889 918 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2017 FY2018 FY2019 FY2020 FY2021 FY2022G 14 (1) Number based on the nu
Slide 15: Execution track record
Execution track record …leading to consistent profitability growth and free cash flow Adj. Operating Income(1) ($M) Improved Margins Driving Free Cash FYE 6/30 Flow Generation 188 36% 161 Increased higher-margin Adult Learning revenue CAGR(2) Cost leverage from scale 77 65 49 Digital first strategy
Slide 16: General Education Growth Drivers
General Education Growth Drivers Total Enrollment1 (K) FY22 FY25 Actuals Expectations3 QE 9/30 165 148 Revenue $1.27B $1.25B-$1.4B 112 114 111 Enrollments1 147.6K 170-180K FY2 0 1 8 FY2 0 1 9 FY2 0 2 0 FY2 0 2 1 FY2 0 2 2 Programs2 80 + 8-10 Per Pupil Funding ($K) YE 6/30 ` States2 30 34-36 8.1 7.7
Slide 17: Career Learning Growth Drivers
Career Learning Growth Drivers Total Enrollment1 (K) FY22 FY25 Actuals Expectations3 QE 9/30 42 31 Revenue $412.9M $650M-$800M 14 Adult Learning 7 $91.5M $140M-$150M 2 Revenue FY2 0 1 8 FY2 0 1 9 FY2 0 2 0 FY2 0 2 1 FY2 0 2 2 Career Prep 42.0K 80-85K Enrollments1 Per Pupil Funding ($K) Career Prep Y
Slide 18: 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 FY22 FY25 Actuals Financial Outlook Expand capacity in existing Low High and new prog
Slide 19: Strategic approach to M&A
Strategic Strategic Criteria • Focus on businesses that Financial Filters • Revenue growth relative to approach align to strategy & create long-term value business size of 10% – 40% to M&A • Profitable or near-term path to • Operates in $1B+ or fast- profitability (<24 mo.) growing nascent addressab
Slide 20: Disciplined capital allocation
Disciplined capital allocation Prioritizing free cash flow sustainability, educational platform development, and synergistic M&A • Invest in academic quality & student / customer experience to support Organic growth outcomes & retention • Implement innovative products across portfolio • Leverage pla
Slide 21: Appendix
Appendix Confidential
Slide 22: Reconciliation
ADJ. OPERATING INCOME TO GAAP FINANCIALS Reconciliation 2017 2018 2019 2020 2021 2022 ($ millions) Net Income (loss) (0.5) 27.4 37.2 24.5 71.5 107.1 Loss (income) from equity method investments - - 0.6 0.4 (0.7) (0.1) Tax expense / (benefit) 5.4 (0.9) 10.5 8.5 24.5 40.1 Net interest expense / (incom