Business Wire | Apr 20, 2021 04:30PM EDT

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

Apr. 20, 2021

HERNDON, Va.--(BUSINESS WIRE)--Apr. 20, 2021--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 Change 2021/2020 31,

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 %

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(1) 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:

* 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 * 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 Change Nine Months Ended Change March 31, 2021 / 2020 March 31, 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 LearningMiddle - High 52,382 20,820 31,562 151.6% 152,529 69,315 83,214 120.1%SchoolAdult 17,459 3,187 14,272 447.8% 36,579 3,187 33,392 1,047.8%

Total Career 69,841 24,007 45,834 190.9% 189,108 72,502 116,606 160.8%LearningTotal 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 Change Nine Months Change Ended 2021 / 2020 Ended 2021 / 2020 March 31, March 31,

2021 2020 # % 2021 2020 # %

(In thousands, except percentages)

General 155.8 108.9 46.9 43.1% 159.4 108.3 51.1 47.2%Education(1)Career 29.5 13.2 16.3 123.5% 30.0 13.2 16.8 127.3%Learning(1) (2)Total 185.3 122.1 63.2 51.8% 189.4 121.5 67.9 55.9%Enrollment(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.

(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 Change Nine Months Ended Change Ended 2021 / 2020 March 31, 2021 / 2020 March 31,

2021 2020 # % 2021 2020 # %

General $ 1,876 $ 1,946 $ (70) (3.6%) $ 5,384 $ 5,787 $ (403) (7.0%)EducationCareer 1,759 1,569 190 12.1% 5,033 5,189 (156) (3.0%)Learning Outlook

The Company is raising its outlook and guidance for the full fiscal year 2021:

* Revenue in the range of $1.525 billion to $1.530 billion. * Capital expenditures in the range of $50 million to $55 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. * Tax rate of 27% to 29% after discrete items. * Adjusted operating income in the range of $156 million to $159 million. (1)

In addition to providing an outlook for revenue and capital expenditures, adjusted operating income is provided as a supplemental non-GAAP(1) financial measure as management believes that it provides useful information to our investors. Please also see Special Note on Forward Looking Statements below.

Year Ended June 30, 2021LowHigh(In millions)Income from operations$

102.5

$

103.5

Stock-based compensation expense42.0

44.0

Amortization of intangible assets11.5

11.5

Adjusted operating income$

156.0

$

159.0

Conference Call

The Company will discuss its third quarter 2021 financial results during a conference call scheduled for Tuesday, April 20, 2021 at 5:00 p.m. eastern time (ET).

A live webcast of the call will be available at https://event.on24.com/wcc/r/3081392/A9D9252C3927749F0B31617B75AC2CB3. To participate in the live call, investors and analysts should dial (833) 900-1536 (domestic) or (236) 712-2276 (international) at 4:45 p.m. (ET). The conference ID number is 1779113. Please access the website at least 15 minutes prior to the start of the call.

A replay of the call will be available starting on April 20, 2021 at 8:00 p.m. (ET) through May 20, 2021 at 8:00 p.m. (ET) by dialing (800) 585-8367 (domestic) or (416) 621-4642 (international) and entering the conference ID 1779113. A webcast replay will be available at https://event.on24.com/wcc/r/3081392/A9D9252C3927749F0B31617B75AC2CB3 for 30 days.

About Stride Inc.

At Stride, Inc. (NYSE: LRN) - formerly K12 Inc. - we are reimagining learning - where learning is lifelong, deeply personal, and prepares learners for tomorrow. The company has transformed the teaching and learning experience for millions of people by providing innovative, high-quality, tech-enabled education solutions, curriculum, and programs directly to students, schools, the military, and enterprises in primary, secondary, and post-secondary settings. Stride is a premier provider of K-12 education for students, schools, and districts, including career learning services through middle and high school curriculum. For adult learners, Stride delivers professional skills training in healthcare and technology, as well as staffing and talent development for Fortune 500 companies. Stride has delivered millions of courses over the past decade and serves learners in all 50 states and more than 100 countries. The company is a proud sponsor of the Future of School, a nonprofit organization dedicated to closing the gap between the pace of technology and the pace of change in education. More information can be found at stridelearning.com, K12.com, galvanize.com, techelevator.com, and medcerts.com.

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. 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," "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; failure to replace students who have graduated from the terminal grade in a school or have left our programs for other reasons with new students of a sufficient number; inability to maintain our current rate of retention of students enrolled in our courses; an increase in the amount of failures to enter into new school contracts or renew existing contracts, in part or in their entirety; the failure of perceived industry trends and projections resulting from the expected effects of COVID-19 on virtual education; 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, such as COVID-19; 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 education 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, resulting from cybersecurity attacks; misuse or unauthorized disclosure of student and personal data; 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 presentation 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 and nine months ended March 31, 2021 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 quarterly period ended March 31, 2021, 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.

Year Ended June 30, 2021 Low High (In millions)Income from operations $ 102.5 $ 103.5

Stock-based compensation expense 42.0 44.0

Amortization of intangible assets 11.5 11.5

Adjusted operating income $ 156.0 $ 159.0

Conference Call

The Company will discuss its third quarter 2021 financial results during a conference call scheduled for Tuesday, April 20, 2021 at 5:00 p.m. eastern time (ET).

A live webcast of the call will be available at https://event.on24.com/wcc/r/3081392/A9D9252C3927749F0B31617B75AC2CB3. To participate in the live call, investors and analysts should dial (833) 900-1536 (domestic) or (236) 712-2276 (international) at 4:45 p.m. (ET). The conference ID number is 1779113. Please access the website at least 15 minutes prior to the start of the call.

A replay of the call will be available starting on April 20, 2021 at 8:00 p.m. (ET) through May 20, 2021 at 8:00 p.m. (ET) by dialing (800) 585-8367 (domestic) or (416) 621-4642 (international) and entering the conference ID 1779113. A webcast replay will be available at https://event.on24.com/wcc/r/3081392/A9D9252C3927749F0B31617B75AC2CB3 for 30 days.

About Stride Inc.

At Stride, Inc. (NYSE: LRN) - formerly K12 Inc. - we are reimagining learning - where learning is lifelong, deeply personal, and prepares learners for tomorrow. The company has transformed the teaching and learning experience for millions of people by providing innovative, high-quality, tech-enabled education solutions, curriculum, and programs directly to students, schools, the military, and enterprises in primary, secondary, and post-secondary settings. Stride is a premier provider of K-12 education for students, schools, and districts, including career learning services through middle and high school curriculum. For adult learners, Stride delivers professional skills training in healthcare and technology, as well as staffing and talent development for Fortune 500 companies. Stride has delivered millions of courses over the past decade and serves learners in all 50 states and more than 100 countries. The company is a proud sponsor of the Future of School, a nonprofit organization dedicated to closing the gap between the pace of technology and the pace of change in education. More information can be found at stridelearning.com, K12.com, galvanize.com, techelevator.com, and medcerts.com.

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. 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," "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; failure to replace students who have graduated from the terminal grade in a school or have left our programs for other reasons with new students of a sufficient number; inability to maintain our current rate of retention of students enrolled in our courses; an increase in the amount of failures to enter into new school contracts or renew existing contracts, in part or in their entirety; the failure of perceived industry trends and projections resulting from the expected effects of COVID-19 on virtual education; 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, such as COVID-19; 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 education 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, resulting from cybersecurity attacks; misuse or unauthorized disclosure of student and personal data; 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 presentation 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 and nine months ended March 31, 2021 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 quarterly period ended March 31, 2021, 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 Nine Months Ended March 31, March 31,

2021 2020 2021 2020

(In thousands except share and per share data)

Revenues $ 392,145 $ 257,154 $ 1,139,250 $ 771,834

Instructional 253,128 178,968 740,951 515,796 costs andservicesGross margin 139,017 78,186 398,299 256,038

Selling,general, and 100,464 63,687 309,230 230,622 administrativeexpensesIncome from 38,553 14,499 89,069 25,416 operationsInterest (5,371 ) (76 ) (12,502 ) 1,275 income(expense), netOther income 486 (1,093 ) 2,276 (736 )(expense), netIncome beforeincome taxesand income 33,668 13,330 78,843 25,955 (loss) fromequity methodinvestmentsIncome tax (10,275 ) (4,419 ) (18,541 ) (5,993 )expenseIncome (loss)from equity 396 (157 ) 654 (344 )methodinvestmentsNet incomeattributable $ 23,789 $ 8,754 $ 60,956 $ 19,618 to commonstockholdersNet incomeattributableto commonstockholdersper share:Basic $ 0.59 $ 0.22 $ 1.52 $ 0.50

Diluted $ 0.57 $ 0.22 $ 1.46 $ 0.48

Weightedaverage sharesused incomputing pershare amounts:Basic 40,286,109 39,539,791 40,143,610 39,426,121

Diluted 41,690,509 39,938,898 41,701,955 40,461,290

STRIDE INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS March 31, June 30, 2021 2020

(audited)

(In thousands except share and per share data)

ASSETSCurrent assetsCash and cash equivalents $ 329,031 $ 212,299

Accounts receivable, net of allowance of $21,697 422,786 236,134 and $6,808Inventories, net 28,814 28,300

Prepaid expenses 26,656 13,058

Other current assets 22,918 11,480

Total current assets 830,205 501,271

Operating lease right-of-use assets, net 100,027 111,768

Property and equipment, net 82,918 38,668

Capitalized software, net 51,922 48,493

Capitalized curriculum development costs, net 48,482 48,849

Intangible assets, net 103,047 77,451

Goodwill 240,251 174,939

Deposits and other assets 77,316 71,824

Total assets $ 1,534,168 $ 1,073,263

LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilitiesAccounts payable $ 47,043 $ 40,428

Accrued liabilities 44,199 27,351

Accrued compensation and benefits 62,816 47,227

Deferred revenue 53,449 24,417

Credit facility - 100,000

Current portion of finance lease liability 26,036 13,304

Current portion of operating lease liability 21,259 20,689

Total current liabilities 254,802 273,416

Long-term finance lease liability 43,117 4,634

Long-term operating lease liability 82,600 96,544

Long-term debt 295,388 -

Deferred tax liability 31,531 13,771

Other long-term liabilities 39,951 9,569

Total liabilities 747,389 397,934

Commitments and contingencies - -

Stockholders' equityPreferred stock, par value $0.0001; 10,000,000 - - shares authorized; zero shares issued oroutstandingCommon stock, par value $0.0001; 100,000,000shares authorized; 46,877,934 and 46,341,627 4 4 shares issued; and 41,543,191 and 41,006,884shares outstandingAdditional paid-in capital 788,028 730,761

Accumulated other comprehensive income (loss) (427 ) 93

Retained earnings 101,656 46,953

Treasury stock of 5,334,743 shares at cost (102,482 ) (102,482 )

Total stockholders' equity 786,779 675,329

Total liabilities and stockholders' equity $ 1,534,168 $ 1,073,263

STRIDE INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended March 31,

2021 2020

(In thousands)

Cash flows from operating activitiesNet income $ 60,956 $ 19,618

Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization expense 65,038 52,790

Stock-based compensation expense 30,821 17,785

Deferred income taxes 2,256 1,151

Provision for (recovery of) doubtful accounts 7,635 (88 )

Amortization of discount and fees on debt 8,737 -

Other 22,456 11,605

Changes in assets and liabilities:Accounts receivable (197,659 ) (76,187 )

Inventories, prepaid expenses, deposits and other (27,798 ) 240 current and long-term assetsAccounts payable (913 ) (20,066 )

Accrued liabilities 8,850 6,260

Accrued compensation and benefits 14,913 (15,543 )

Operating lease liability (15,650 ) (8,151 )

Deferred revenue and other liabilities 31,480 13,611

Net cash provided by operating activities 11,122 3,025

Cash flows from investing activitiesPurchase of property and equipment (2,967 ) (1,493 )

Capitalized software development costs (20,189 ) (18,825 )

Capitalized curriculum development costs (11,742 ) (15,463 )

Sale of long-lived assets 223 -

Acquisition of Galvanize, Inc., net of cash - (167,995 )acquiredAcquisition of MedCerts, LLC, net of cash acquired (54,795 ) -

Acquisition of Tech Elevator, Inc., net of cash (16,030 ) - acquiredOther acquisitions and investments, net of (1,008 ) (4,277 )distributionsNet cash used in investing activities (106,508 ) (208,053 )

Cash flows from financing activitiesRepayments on finance lease obligations (17,103 ) (21,603 )

Borrowing from credit facility - 105,000

Repayments on credit facility (100,000 ) (5,000 )

Issuance of convertible senior notes 408,610 -

Purchases of capped calls in connection with (60,354 ) - convertible senior notesProceeds from exercise of stock options 724 48

Withholding of stock options for tax withholding (10,885 ) -

Repurchase of restricted stock for income tax (8,872 ) (6,504 )withholdingNet cash provided by financing activities 212,120 71,941

Net change in cash, cash equivalents and 116,734 (133,087 )restricted cashCash, cash equivalents and restricted cash, 213,299 284,621 beginning of periodCash, cash equivalents and restricted cash, end of $ 330,033 $ 151,534 period Reconciliation of cash, cash equivalents andrestricted cash to balance sheet as of March 31st:Cash and cash equivalents $ 329,031 $ 150,034

Other current assets (restricted cash) 502 500

Deposits and other assets (restricted cash) 500 1,000

Total cash, cash equivalents and restricted cash $ 330,033 $ 151,534

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with GAAP, we have presented adjusted operating income (loss), and adjusted EBITDA, which are not presented in accordance with GAAP.

* Adjusted operating income (loss) is defined as income (loss) from operations as adjusted for stock-based compensation and the amortization of intangible assets. * Adjusted EBITDA is defined as income (loss) from operations as adjusted for stock-based compensation and depreciation and amortization. * Adjusted EBITDA and adjusted operating income (loss) exclude stock-based compensation, which consists of expenses for stock options, restricted stock, restricted stock units, and performance stock units.

Management believes that the presentation of these non-GAAP financial measures provides useful information to investors relating to our financial performance. These measures remove stock-based compensation, which is a non-cash charge that varies based on market volatility and the terms and conditions of the awards. Adjusted EBITDA also removes depreciation and amortization, which can vary depending upon accounting methods and the book value of assets. Adjusted EBITDA provides a measure of corporate performance exclusive of capital structure and the method by which assets were acquired.

Our management uses these non-GAAP financial measures:

* as additional measures of operating performance because they assist us in comparing our performance on a consistent basis; and * in presentations to the members of our Board of Directors to enable our Board to review the same measures used by management to compare our current operating results with corresponding prior periods.

Other companies may define these non-GAAP financial measures differently and, as a result, our use of these non-GAAP financial measures may not be directly comparable to similar non-GAAP financial measures used by other companies. Although we use these non-GAAP financial measures to assess the performance of our business, the use of non-GAAP financial measures is limited as they include and/or do not include certain items not included and/or included in the most directly comparable GAAP financial measure.

These non-GAAP financial measures should be considered in addition to, and not as a substitute for, revenues, income (loss), net income (loss) and net income (loss) per share or other related financial information prepared in accordance with GAAP. Adjusted EBITDA is not intended to be a measure of liquidity. You are cautioned not to place undue reliance on these non-GAAP financial measures.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.

Three Months Ended Nine Months Ended March 31, March 31,

2021 2020 2021 2020

(In thousands)

Income from operations $ 38,553 $ 14,499 $ 89,069 $ 25,416

Stock-based compensation expense 12,854 6,086 30,821 17,785

Amortization of intangible assets 3,499 1,765 8,075 3,250

Adjusted operating income 54,906 22,350 127,965 46,451

Depreciation and other amortization 20,101 16,649 56,963 49,540

Adjusted EBITDA $ 75,007 $ 38,999 $ 184,928 $ 95,991

Appendix A

Full Definitions for New Lines of Reporting Revenue and Enrollments

Stride, Inc., together with its subsidiaries ("Stride" or the "Company") is an education services company providing online and blended learning. The Company's technology-based products and services enable its clients to attract, enroll, educate, track progress, and support students on a scalable basis. These products and services, spanning curriculum, systems, instruction, and support services are designed to help learners reach their educational goals through inspired teaching and personalized learning. The Company's clients are primarily public and private schools, school districts, and charter boards. Additionally, it offers solutions to employers, government agencies and consumers, including through private schools which it operates. These products and services are provided through two lines of revenue:

General Education - products and services 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. Programs utilizing General Education products and services are for students that are not specializing in any particular curriculum or course of study. These programs provide an alternative to traditional school options and serve a range of student needs including safety concerns, increased academic support, scheduling flexibility, physical/health restrictions or advanced learning among other reasons. Products and services are sold a la carte or combined into customized customer offerings.

Career Learning - products and services 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. The Company provides middle and high school students with Career Learning programs that complement their core general education coursework in math, English, science and history. Stride offers multiple career pathways supported by a diverse catalog of Career Learning courses. The middle school program spans career exploration, exposes students to a variety of career options, and introduces career skill development. In high school, students may engage in industry content pathway courses, project-based learning in virtual teams, and career development services. High school students also have the opportunity to progress toward certifications, connect with industry professionals, earn college credits while in high school, and participate in job shadowing and/or work based learning experiences that are required to succeed in today's digital, tech-enabled economy. A student enrolled in a school offering our General Education program may take Career Learning courses but that student and associated revenue is not reported as Career Learning enrollment and revenue. A student and the associated revenue, whether in middle or high school is counted as Career Learning if enrolled in a school offering our Career Learning program and must commit to a career pathway and its associated services, including the Exploratory Pathways. Like General Education, products and services for the Career Learning market are sold a la carte or combined into a Career Learning program or customized customer offering. The Company also offers post-secondary Career Learning programs to adult learners, through its Galvanize, Inc. ("Galvanize"), Tech Elevator, Inc. ("Tech Elevator"), and MedCerts, LLC ("MedCerts") subsidiaries. These programs include skills training in data science and software engineering, healthcare and medical fields, technology staffing and talent development, and are offered directly to consumers, employers and government agencies.

The following tables provide revenue and enrollments for the three months ended March 31, 2021 and 2020 for the new reporting formats. 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, which may be retrieved from the SEC's website at www.sec.gov or from Stride Inc.'s website at www.stridelearning.com.

General Education Three Months Ended

March 31, March 31, 2021 2020

(In thousands)

Managed Public School Programs $ 336,281 $ 228,335

Add:Private Pay Schools and Other 12,241 8,879

Institutional (Non-managed and Software & 26,164 16,753 Services)Less:Career Learning - Managed Public School Programs (51,178 ) (20,586 )

Career Learning - Non-managed Public School (541 ) (82 )ProgramsCareer Learning - Private Pay Schools and Other (663 ) (152 )

Total General Education Revenues $ 322,304 $ 233,147

EnrollmentsThree Months Ended

March 31, 2021

March 31, 2020

(In thousands)

Managed Public School Programs180.6

119.7

Non-managed Public School Programs55.4

16.2

Total Old Reporting236.0

135.9

Add:Private Pay4.7

2.4

Less:Non-managed Public School Programs(55.4

)

(16.2

)

Net Changes - Old vs New Reporting(50.7

)

(13.8

)

Total New Reporting185.3

122.1

Enrollments Three Months Ended

March 31, 2021 March 31, 2020

(In thousands)

Managed Public School Programs 180.6 119.7

Non-managed Public School Programs 55.4 16.2

Total Old Reporting 236.0 135.9

Add:Private Pay 4.7 2.4

Less:Non-managed Public School Programs (55.4 ) (16.2 )

Net Changes - Old vs New Reporting (50.7 ) (13.8 )

Total New Reporting 185.3 122.1

Career LearningThree Months Ended

March 31, 2021

March 31, 2020

(In thousands)

Career Learning - Managed Public School Programs$51,178

$20,586

Career Learning - Non-managed Public School Programs541

82

Career Learning - Private Pay Schools and Other663

152

Private Pay Schools and Other (Galvanize, MedCerts and Tech Elevator)17,459

3,187

Total Career Learning Revenues$69,841

$24,007

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CONTACT: Stride Inc. Investor Contact: Timothy Casey, 571-392-2606 Sr. Director, Investor Relations tcasey@k12.com