Slide 1: Q3 FY2022 Earnings Presentation
Q3 FY2022 Earnings Presentation April 19, 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 U.S. market
Career Advancement (Corp. Training & Upskilling) $100B+ addressable Market in U.S. Leveraging over 20 years of experience with over 2 Job Placement & Recruitment million students supported, and a scalable education services platform, Stride provides Early Career online and blended lifelong & Immersi
Slide 4: 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 Career Learning Experienced, Financial services platform core business growth diverse leadership track record With scale, expertise & Secular shift toward Leveraging Deep
Slide 5: Third Quarter Highlights
Third Quarter Highlights Q3 FY22 Performance 1. Continued Strength in Enrollments and Revenue Per Enrollment • Revenue of $421.7M • (+8% y-o-y) Q3 revenue and profitability above guidance ranges • Adj. Operating Income* of $69.4M Q3 enrollments up year-over-year, demonstrating continued demand •
Slide 6: Strong year-over-year growth in key financial metrics
Strong year-over-year growth in key financial metrics Revenue ($M) Adjusted Operating Income* ($M) 80 450 422 392 398 400 410 70 69 • Continued execution of 400 371 376 405 60 55 61 growth strategy into 350 50 Career Learning 50 300 37 40 250 34 • Demonstrated demand 30 22 23 for virtual school opti
Slide 7: Career & Adult Learning Continue to Drive Growth
Career & Adult Learning Continue to Drive Growth Career Learning Quarter Ended March 31, 2022 • Enrollment growth of 42% 2022 2021 Change Revenue ($M) Adult Learning General Education 315.9 322.3 ↓ 2% • Continued strength Career Learning • Y-O-Y comparison shows Middle – High School 83.2 52.4 ↑ 59%
Slide 8: Raising Full Year Revenue Guidance and Profitability Guidance
Raising Full Year Revenue Guidance and Profitability Guidance Updated FY2022 Previous FY22 Guidance reflects continued Guidance Guidance strong demand for virtual education Low High Low High Revenue ($M) 1,645 1,660 1,620 1,640 • FY22 Revenue: +8% Y-O-Y Mid-point of Guidance Adjusted Operating Incom
Slide 9: Long-term General Education Growth Drivers
Long-term General Education Growth Drivers Total Enrollment(1) (K) FY21 FY25 QE 9/30 Actuals Expectations 7% CAGR 165 148 Revenue $1.28B $1.25B - $1.4B 112 114 111 Enrollments(1) 164.6K 170 – 180K FY2018 FY2019 FY2020 FY2021 FY2022 Per Pupil Funding ($K) Programs(2) 77 + 8 – 10 YE 6/30 3.4% CAGR 8.2
Slide 10: Long-term Career Learning Growth Drivers
Long-term Career Learning Growth Drivers Total Enrollment(1) (K) FY21 FY25 QE 9/30 Actuals Expectations 42 126% CAGR 31 Revenue $256.6M $650M - $800M 14 Adult Learning 7 Revenue $55.8M $140M - $150M 2 FY2018 FY2019 FY2020 FY2021 FY2022 Career Prep Enrollments(1) 30.8K 80 – 85K Per Pupil Funding ($K)
Slide 11: FY25 Financial Outlook
FY25 Financial Outlook Support improving learner outcomes while delivering strong growth and Strategic priorities sustainable long-term value creation supporting outlook Enrollment growth in K-12 and Adult programs FY22 FY25 Financial Guidance(1) Outlook Expand capacity in existing and Low High Low
Slide 12: Liquidity & Low Debt Support Organic & Inorganic Growth
Liquidity & Low Debt Support Organic & Inorganic Growth Expect increasing cash balance through rest of Select balance sheet and other information year. As of March 31, 2022 ($M) Accounts receivable Cash and Cash Equivalents $308.6 balance reflects seasonality and timing of Accounts Receivable, Net 4
Slide 13: 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 14: Appendix
Appendix
Slide 15: Reconciliation
ADJ. OPERATING INCOME AND ADJUSTED EBITDA TO GAAP FINANCIALS Reconciliation Three Months Ended Nine Months Ended March 31, March 31, (in millions) 2022 2021 2022 2021 Income (loss) from operations $ 60.6 $ 38.6 $ 110.5 $ 89.1 Stock-based compensation expense $ 5.6 $ 12.8 $ 14.5 $ 30.8 Amortization o
Slide 16: Reconciliation
ADJ. OPERATING INCOME (FY2020 & FY2021) Reconciliation FY2020 FY2021 Three Months Ended Three Months Ended Sept. 30, Dec. 31, Mar. 31, Jun. 30, Sept. 30, Dec. 31, Mar. 31, Jun. 30, (in millions) 2019 2019 2020 2020 2020 2020 2021 2021 Income (loss) from operations $ (19.4) $ 30.3 $ 14.5 $ 7.0 $ 12.1
Slide 17: Reconciliation
GUIDANCE Reconciliation Year Ended June 30, 2022 Low High (In millions) Income from operations $ 148.0 $ 151.0 Stock-based compensation expense 19.0 21.0 Amortization of intangible assets 13.0 13.0 Adjusted operating income $ 180.0 $ 185.0 Note: The MedCerts acquisition included contingent considera