Slide 1: Q2 FY2024 Earnings Presentation
Q2 FY2024 Earnings Presentation January 23, 2024
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: Quarterly Highlights
Quarterly Highlights 01 02 03 04 Finished Quarter with Topped $500M in Quarterly Raising Full Year Enrollment Above Revenue for First Time in Revenue and Organic and Pandemic Highs Company History Profitability Guidance Inorganic Opportunities Continued in-year demand Strength in enrollments Mid-poi
Slide 5: Guidance: Year-over-year growth in key financial metrics
Year-over-year growth in key financial metrics Revenue ($M) Adjusted Operating Income2 ($M) 600 110 95 520 95 505 470 480 90 76 80 500 458 425 85 70 400 500 50 300 30 15 200 10 100 (10) 0 (30) (20) Q1 Q2 Q3 Q1 Q2 Guidance Q1 Q2 Q3 Q1 Q2 Guidance Q3 Q3 FY23 FY24 FY23 FY24 Depicts high-low range for g
Slide 6: Strong In-Year Enrollment Trends
Strong In-Year Enrollment Trends Three Months Ended December 31, 2023 2022 Change Revenue ($M) General Education 313.9 274.7 ↑ 14.3% Enrollments Trends Career Learning • End of quarter enrollments • Middle – High School 165.1 153.8 ↑ 7.3% exceeded pandemic highs • Adult 25.9 29.9 ↓ (13.4)% • General
Slide 7: Guiding to Strong Revenue and Profitability Growth
Guiding to Strong Revenue and Profitability Growth Q3 FY24 Guidance1 FY24 Guidance1 Guidance Reflects Continued Demand for Offerings Low High Low High • FY24 Revenue: +10% Y-O-Y – Mid-point of Guidance Revenue $500.0M $520.0M $1.99B $2.04B • FY24 AOI2: +37% Y-O-Y – Mid-point of Guidance Adj. Operati
Slide 8: Strong balance sheet with low debt
Strong balance sheet with low debt Cash position, low leverage ratio, and consistent cash flows provide options for capital allocation Select balance sheet and other information As of December 31, 2023 ($M) Cash, Cash Equivalents 531.0 & Marketable Securities Accounts Receivable, Net 509.6 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: Appendix
Appendix Stride 10
Slide 11: 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, ($, M) 2023 2022 2023 2022 Income from operations 84.3 68.1 87.6 39.4 Stock-based compensation expense 7.6 4.9 16.0 10.4 Amortization of intangible assets 3.0 3.3 6.0 6
Slide 12: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Net Income to EBITDA and Adjusted EBITDA Three Months Ended Six Months Ended December 31, December 31, ($, M) 2023 2022 2023 2022 Net income 66.8 50.7 71.7 28.0 Interest expense, net 2.0 2.1 4.1 4.1 Other (income) expense, net (6.5) (4.0) (11.7) (5.0) Income tax expense 22.2 18.9 2
Slide 13: 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 ($, M) Sept. 30, 2022 Dec. 31, 2022 Mar. 31, 2023 Sept. 30, 2023 Income (loss) from operations (28.7) 68.1 72.2 3.3 Stock-based compensation expense 5.5 4.9 4.7 8.5 Amortization of intangible asset
Slide 14: Reconciliation of Income from Operations to Adjusted Operating Income
Reconciliation of Income from Operations to Adjusted Operating Income Three months ended Year ended March 31, 2024 June 30, 2024 ($, Millions) Low High Low High Income from operations 76.0 83.0 224.5 238.5 Stock-based compensation expense 6.5 8.5 29.0 33.0 Amortization of intangible assets 2.5 3.5 1