Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stride Inc (LRN, Financial) achieved a record year with revenue surpassing $2 billion for the first time.
- Earnings per share increased by 58% year-over-year, marking a significant growth since 2020.
- The company reported its highest gross margin in over five years, indicating improved profitability.
- Stride Inc (LRN) saw record enrollment levels, surpassing even the pandemic highs.
- The company received multiple awards for its educational offerings, highlighting its strong market position and innovation.
Negative Points
- Adult Learning revenue declined by 16% due to continued softness in IT offerings.
- The company faces potential headwinds from the loss of federal ESSER funding, which could impact revenue per enrollment growth.
- There is a divergence in revenue per enrollment between Career Learning and General Education, with Career Learning showing slower growth.
- Stride Inc (LRN) anticipates a flat revenue per enrollment growth for FY 2025, indicating potential challenges in maintaining growth momentum.
- Selling, general, and administrative expenses increased by 7%, driven by investments in technology and higher stock-based compensation.
Q & A Highlights
Q: Can you provide any updates on enrollment trends and whether anything has changed over the last three months?
A: James Rhyu, CEO: We still have a significant portion of the enrollment season ahead, but I am more confident now about our ability to grow enrollments this fall compared to three months ago.
Q: Is there a possibility that funding could decrease next year due to ESSER headwinds?
A: Donna Blackman, CFO: Early state funding trends look favorable, and while ESSER funding will offset some of this, we expect revenue per enrollment to remain relatively flat year-over-year.
Q: How has the SG&A line been managed, and is marketing spend down year-over-year?
A: Donna Blackman, CFO: We have been more efficient, with marketing spend actually down due to automation in our enrollment center and cost reductions in our coding business.
Q: Are you seeing any competitive advantages due to states cutting back on their own virtual schools?
A: James Rhyu, CEO: We haven't seen significant risk for this fall, and the political landscape has become more bipartisan, supporting educational choices for consumers.
Q: Can you provide an update on the monetization potential of your tutoring offering?
A: James Rhyu, CEO: While it's still early, we see significant opportunity in district contracts and direct-to-consumer offerings. We expect to be a serious player in the tutoring market in the next few years, potentially adding a couple of points of growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
