Stride Beats Q3 Earnings Expectations, Raises FY22 Revenue Guidance

  • Stride Inc LRN reported third-quarter revenue growth of 7.5% year-over-year to $421.72 million, beating the consensus of $411.12 million.
  • The revenue growth was driven by strong enrollment trends, continued growth in Adult Learning, and revenue per enrollment increase.
  • The operating income improved 57.2% Y/Y to $60.59 million, and the margin expanded by 454 bps to 14.4%. Adjusted operating margin expanded by 246 bps to 16.5%.
  • Adjusted EBITDA increased by 20.4% to $90.31 million, and the margin expanded by 230 bps to 21.4%.
  • EPS improved by 79% Y/Y to $1.02, beating the consensus of $0.84.
  • Stride’s net cash provided by operating activities YTD was $81.4 million, compared to $11.12 million a year ago.
  • As of March 31, 2022, Stride held cash and cash equivalents of $308.6 million.
  • FY22 Outlook: LRN expects revenue of $1.645 billion to $1.660 billion (prior expectations of $1.62 billion to $1.64 billion) versus a consensus of $1.63 billion, and an adjusted operating income of $180 million to $185 million (prior $175 million to $185 million).
  • It expects capital expenditures of $65 million to $70 million.
  • Price Action: LRN shares traded higher by 2.49% at $36.25 after-hours on the last check Tuesday.
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