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Stride Inc. Posts Revenue Of $392.1 Million – Career Learning Revenue Grows 191% Year-over-Year

posted on Apr 21, 2021
tags business wire

HERNDON, Va.–(BUSINESS WIRE)–Stride, Inc. (NYSE: LRN), one of the nation’s leading tech-enabled education companies, today announced its results for the third fiscal quarter ended March 31, 2021.

Financial Highlights for the Third Quarter Fiscal 2021 compared with the Third Quarter Fiscal 2020

  • Revenues of $392.1 million, compared with $257.2 million. The increase is largely due to higher enrollments.
  • Income from operations of $38.6 million, compared with $14.5 million.
  • Net income of $23.8 million, compared with $8.8 million.
  • Diluted net income per share of $0.57, compared with $0.22.
  • Cash and cash equivalents as of March 31, 2021 of $329.0 million, compared with $212.3 million as of June 30, 2020.
  • Adjusted operating income of $54.9 million, compared with $22.4 million. (1)
  • Adjusted EBITDA of $75.0 million, compared with $39.0 million. (1)

Third Quarter Fiscal 2021 Summary Financial Metrics

Three Months Ended March 31,

 

Change 2021/2020

2021

 

2020

 

$

 

%

(In thousands, except percentages)

Revenues

$

392,145

$

257,154

$

134,991

52.5

%

 
Income from operations

 

38,553

 

14,499

 

24,054

165.9

%

Adjusted operating income (1)

 

54,906

 

22,350

 

32,556

145.7

%

 
Net income

 

23,789

 

8,754

 

15,035

171.8

%

 
EBITDA (1)

 

62,153

 

32,913

 

29,240

88.8

%

Adjusted EBITDA (1)

 

75,007

 

38,999

 

36,008

92.3

%

Financial Highlights for the Nine Months Ended March 31, 2021 Compared to the Nine Months Ended March 31, 2020

  • Revenue of $1,139.3 million, compared with $771.8 million.
  • Income from operations of $89.1 million, compared with $25.4 million.
  • Net income of $61.0 million, compared with $19.6 million.
  • Diluted net income per share of $1.46, compared with $0.48.
  • Adjusted operating income of $128.0 million, compared with $46.5 million. (1)
  • Adjusted EBITDA of $184.9 million, compared with $96.0 million. (1)

Nine Months Ended March 31, 2021 Summary Financial Metrics

Nine Months Ended March 31,

 

Change 2021/2020

2021

 

2020

 

$

 

%

(In thousands, except percentages)

Revenues

$

1,139,250

$

771,834

$

367,416

47.6

%

 
Income from operations

 

89,069

 

25,416

 

63,653

250.4

%

Adjusted operating income (1)

 

127,965

 

46,451

 

81,514

175.5

%

 
Net income

 

60,956

 

19,618

 

41,338

210.7

%

 
EBITDA (1)

 

154,107

 

78,206

 

75,901

97.1

%

Adjusted EBITDA (1)

 

184,928

 

95,991

 

88,937

92.7

%

(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, 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.

Cash Flow and Liquidity

As of March 31, 2021, the Company’s cash and cash equivalents totaled $329.0 million, compared with $212.3 million reported at June 30, 2020. The increase in the cash balance is largely the result of the $348.3 million in proceeds the Company received from its issuance of convertible senior notes during the first quarter, partially offset by the use of $100 million to pay down its revolving credit facility and $72.8 million in cash used to acquire Tech Elevator and MedCerts.

Capital Expenditures

Capital expenditures for the nine months ended March 31, 2021 were $34.9 million, down 2% from the nine months ended March 31, 2020 and comprised of,

  • $3.0 million on property and equipment,
  • $20.2 million on capitalized software development, and
  • $11.7 million on capitalized curriculum development.

Revenue and Enrollment Data

During the first quarter of fiscal year 2021, the Company revised its lines of revenue reporting into two categories:

  1. General Education – products and services that are predominantly focused on kindergarten through twelfth grade students for core subjects including math, English, science, and history to help build a common foundation of knowledge, and
  2. Career Learning – products and services that are focused on developing skills for students, in middle school through high school and adult learners, to enter careers in high-growth, in-demand industries—including information technology, business, and health services. Middle and high school students also take general education courses per state standards in addition to coursework in career pathways.

The Company believes that the change in the lines of revenue will facilitate a better understanding of its business strategy and the markets in which the Company competes. Additional information on the new lines of revenue, including revenue and enrollments for the three months ended March 31, 2021 and 2020 revised to reflect the new lines of revenue format can be found in Appendix A. Additional information on the new lines of revenue for fiscal years 2020 and 2019 revised to reflect the new lines of revenue format can be found in our first quarter, fiscal year 2021 press release. This information is provided for investor reference only. Readers are encouraged to obtain and carefully review Stride Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, including all financial statements contained therein and the footnotes thereto, filed with the SEC.

Revenue

The following table sets forth the Company’s revenues for the periods indicated:

Three Months Ended

March 31,

 

Change

2021 / 2020

 

Nine Months Ended

March 31,

 

Change

2021 / 2020

2021

 

2020

 

$

 

%

 

2021

 

2020

 

$

 

%

(In thousands, except percentages)
 
General Education $

322,304

$

233,147

$

89,157

38.2%

$

950,142

$

699,332

$

250,810

35.9%

Career Learning
Middle – High School

52,382

20,820

31,562

151.6%

152,529

69,315

83,214

120.1%

Adult

17,459

3,187

14,272

447.8%

36,579

3,187

33,392

1,047.8%

Total Career Learning

69,841

24,007

45,834

190.9%

189,108

72,502

116,606

160.8%

Total Revenues $

392,145

$

257,154

$

134,991

52.5%

$

1,139,250

$

771,834

$

367,416

47.6%

Enrollment Data

The following table sets forth total enrollment data for students in our General Education and Career Learning lines of revenue. Enrollments for General Education and Career Learning include those students in full service public or private programs where Stride provides a combination of curriculum, technology, instructional and support services inclusive of administrative support.

Three Months Ended

March 31,

 

Change

2021 / 2020

 

Nine Months Ended

March 31,

 

Change

2021 / 2020

2021

 

2020

 

#

 

%

 

2021

 

2020

 

#

 

%

(In thousands, except percentages)

 
General Education (1)

155.8

108.9

46.9

43.1%

159.4

108.3

51.1

47.2%

Career Learning (1) (2)

29.5

13.2

16.3

123.5%

30.0

13.2

16.8

127.3%

Total Enrollment

185.3

122.1

63.2

51.8%

189.4

121.5

67.9

55.9%

(1)

 

This data includes enrollments for which Stride receives no public funding or revenue.

(2)

 

No enrollments are included in Career Learning for Galvanize, Tech Elevator or MedCerts.

Revenue per Enrollment Data

The following table sets forth revenue per average enrollment data for students for the period indicated. If the mix of enrollments changes, our revenues will be impacted to the extent the average revenues per enrollments are significantly different.

Three Months Ended

March 31,

 

Change

2021 / 2020

 

Nine Months Ended

March 31,

 

Change

2021 / 2020

2021

 

2020

 

#

 

%

 

2021

 

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