Strong Demand Drives Record Enrollment
RESTON, Va., Oct. 22, 2024 (GLOBE NEWSWIRE) -- Stride, Inc. (NYSE:LRN), one of the nation's most successful technology-based education companies, today announced its results for the first fiscal quarter ended September 30, 2024.
First Quarter Fiscal 2025 Highlights Compared to 2024
Revenue of $551.1 million, compared with $480.2 million.
Income from operations of $47.3 million, compared with $3.3 million.
Net income of $40.9 million, compared with $4.9 million.
Diluted net income per share of $0.94, compared with $0.11.
Adjusted operating income of $58.4 million, compared with $14.8 million. (1)
Adjusted EBITDA of $83.9 million, compared with $39.8 million. (1)
First Quarter Fiscal 2025 Summary Financial Metrics
Three Months Ended September 30,
Change 2024/2023
2024
2023
$
%
(In thousands, except percentages and per share data)
Revenues
$
551,084
$
480,181
$
70,903
14.8
%
Income from operations
47,344
3,320
44,024
1326.0
%
Adjusted operating income (1)
58,360
14,761
43,599
295.4
%
Net income
40,882
4,878
36,004
738.1
%
Net income per share, diluted
0.94
0.11
0.83
754.5
%
EBITDA (1)
75,478
31,337
44,141
140.9
%
Adjusted EBITDA (1)
83,927
39,763
44,164
111.1
%
(1) To supplement our financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we also present non-GAAP financial measures including adjusted operating income (loss), EBITDA and adjusted EBITDA. Management believes that these additional metrics provide useful information to investors relating to our financial performance. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.
Revenue Data
Three Months Ended
September 30,
Change 2024 / 2023
2024
2023
$
%
(In thousands, except percentages)
General Education
$
329,407
$
299,338
$
30,069
10.0
%
Career Learning
Middle - High School
198,885
150,974
47,911
31.7
%
Adult
22,792
29,869
(7,077
)
(23.7
%)
Total Career Learning
221,677
180,843
40,834
22.6
%
Total Revenues
$
551,084
$
480,181
$
70,903
14.8
%
Enrollment and Revenue Per Enrollment Data
First quarter enrollments were 222.6K, up 18.5% compared to 187.9K enrollments in the first quarter of fiscal year 2024. Of the total enrollments, 91.7K were Career Learning enrollments, up 30.4% compared to 70.3K Career Learning enrollments in the first quarter of fiscal 2024.
Enrollments only include those students in full service public or private programs where Stride provides a combination of curriculum, technology, and instructional and support services, inclusive of administrative support and may include enrollments for which Stride receives no public funding or revenue. Stride does not report enrollments for our Adult Learning business.
Revenue per enrollment for the first quarter was $2,303, up 0.5% compared to $2,292 in the first quarter of fiscal year 2024. General Education revenue per enrollment was $2,400, up 0.8%, and Career Learning revenue per enrollment was $2,166, up 1.0%, compared to the first quarter of fiscal year 2024, respectively. If the mix of enrollments changes, our revenues will be impacted to the extent the average revenues per enrollments are significantly different.
Cash Flow and Capital Allocation
As of September 30, 2024, the Company's cash and cash equivalents and marketable securities totaled $539.4 million, compared with $714.2 million reported at June 30, 2024.
Capital expenditures for the three months ended September 30, 2024 were $14.8 million, compared to $16.1 million in the three months ended September 30, 2023, and were comprised of $0.7 million of property and equipment, $8.8 million of capitalized software development and $5.3 million of capitalized curriculum development.
Fiscal Year 2025 Outlook
The Company is forecasting the following for the full fiscal year 2025:
Revenue in the range of $2.225 billion to $2.300 billion.
Capital expenditures in the range of $60 million to $65 million. Note that capital expenditures include the purchase of property and equipment, and capitalized software and curriculum development costs as defined on our Statement of Cash Flows.
Effective tax rate of 24% to 26%.
Adjusted operating income in the range of $395 million to $425 million. (1)
The Company is forecasting the following for the second quarter of fiscal year 2025:
Revenue in the range of $560 million to $580 million.
Capital expenditures in the range of $13 million to $15 million. Note that capital expenditures include the purchase of property and equipment, and capitalized software and curriculum development costs as defined on our Statement of Cash Flows.
Adjusted operating income in the range of $115 million to $125 million. (1)
(1) In addition to providing an outlook for revenue and capital expenditures, adjusted operating income is provided as a supplemental non-GAAP financial measure as management believes that it provides useful information to our investors. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below. Please also see Special Note on Forward-Looking Statements below.
Conference Call
The Company will discuss its first quarter of fiscal year 2025 financial results during a conference call scheduled for Tuesday, October 22, 2024 at 5:00 p.m. eastern time (ET).
A live webcast of the call will be available at https://events.q4inc.com/attendee/118785460. To participate in the live call, investors and analysts should dial (800) 715-9871 (domestic) or +1 (646) 307-1963 (international) and provide the conference ID number 8901384. Please access the website at least 15 minutes prior to the start of the call.
A replay of the call will be posted at https://events.q4inc.com/attendee/118785460 as soon as it is available.
About Stride Inc.
Stride Inc. (NYSE:LRN) is redefining lifelong learning with innovative, high-quality education solutions. Serving learners in primary, secondary, and postsecondary settings, Stride provides a wide range of services including K-12 education, career learning, professional skills training, and talent development. Stride reaches learners in all 50 states and over 100 countries. Learn more at stridelearning.com.
Investor Contact
Timothy Casey Vice President, Investor RelationsStride,
Special Note on Forward-Looking Statements
This press release 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-looking statements. We have tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "continues," "likely," "may," "opportunity," "potential," "projects," "will," "will be," "expects," "plans," "intends" and similar expressions to identify forward-looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: reduction of per pupil funding amounts at the schools we serve; inability to achieve a sufficient level of new enrollments to sustain our business model; limitations of the enrollment data we present, which may not fully capture trends in the performance of our business; failure to enter into new school contracts or renew existing contracts, in part or in their entirety; failure of the schools we serve or us to comply with federal, state and local regulations, resulting in a loss of funding, an obligation to repay funds previously received, or contractual remedies; governmental investigations that could result in fines, penalties, settlements, or injunctive relief; declines or variations in academic performance outcomes of the students and schools we serve as curriculum standards, testing programs and state accountability metrics evolve; harm to our reputation resulting from poor performance or misconduct by operators or us in any school in our industry and/or in any school in which we operate; legal and regulatory challenges from opponents of virtual public education or for-profit education companies; changes in national and local economic and business conditions and other factors, such as natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts, or a reduction in the scope of services, with schools; failure to develop the Career Learning business; entry of new competitors with superior technologies and lower prices; unsuccessful integration of mergers, acquisitions and joint ventures; failure to further develop, maintain and enhance our technology, products, services and brands; inadequate recruiting, training and retention of effective teachers and employees; infringement of our intellectual property; disruptions to our Internet-based learning and delivery systems, including, but not limited to, our data storage systems and third-party cloud systems and facilities, resulting from cybersecurity attacks; misuse or unauthorized disclosure of student and personal data; failure to prevent or mitigate a cybersecurity incident that affects our systems; and risks related to artificial intelligence; and other risks and uncertainties associated with our business described in the Company's filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this press release is as of today's date, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.
Financial Statements
The financial statements set forth below are not the complete set of Stride, Inc.'s financial statements for the three months ended September 30, 2024 and are presented below without footnotes. Readers are encouraged to obtain and carefully review Stride Inc.'s Quarterly Report on Form 10-Q for the three months ended September 30, 2024, including all financial statements contained therein and the footnotes thereto, filed with the SEC, which may be retrieved from the SEC's website at www.sec.gov or from Stride Inc.'s website at www.stridelearning.com.
STRIDE, INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
September 30,
2024
2023
(In thousands except share and per share data)
Revenues
$
551,084
$
480,181
Instructional costs and services
335,231
307,293
Gross margin
215,853
172,888
Selling, general, and administrative expenses
168,509
169,568
Income from operations
47,344
3,320
Interest expense, net
