Yahoo Finance Stride Inc (LRN) (Q3 2024) Earnings Call Transcript Highlights: Robust Growth and Strategic ...
Revenue: $520.8 million for Q3, up 11% year-over-year.
Net Income: Adjusted operating income of $96.4 million, up 20% from last year.
Earnings Per Share (EPS): $1.60, increased by $0.30 from last year.
Free Cash Flow: $52.2 million, noted a decrease mostly due to timing of cash receipts.
Gross Margin: 38.7%, an improvement of 140 basis points from last year.
Enrollment: Reached a new all-time high of 198,400 students.
Revenue Guidance: Raised to $2.025 billion to $2.04 billion for the full year.
Profit Guidance: Adjusted operating income expected between $280 million and $290 million.
Capital Expenditures: $16.3 million this quarter, with full-year expectations between $60 million and $65 million.
Effective Tax Rate: Anticipated to be between 24% and 26%.
Release Date: April 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the growth rates for career learning and general education segments? A: (James Rhyu, CEO) - Both segments are expected to continue growing, with career learning primarily in high school programs and general education showing strength in lower-grade programs. The growth rates should be comparable, influenced by new program openings and the mix of school grades.
Q: What are the plans for new schools or programs in fiscal 2025? A: (Donna Blackman, CFO) - Stride aims to expand in states where it currently operates and is in discussions to add new programs. The company's growth targets do not rely on new state additions but focus on expanding within existing states.
Q: What is driving the increase in the other income line item? A: (Donna Blackman, CFO) - The increase is primarily due to investments in marketable securities, leveraging the cash generated by the business.
Q: Can you provide insights into the funding environment for the next year, especially with the ESSER funding cliff? A: (James Rhyu, CEO) - The baseline state funding is expected to remain positive, separate from the federal ESSER funds. Stride's cost structure is not heavily dependent on ESSER, allowing more stability as those funds diminish.
Q: What are the expectations for application volumes and conversion rates for the upcoming fall cohort? A: (James Rhyu, CEO) - Early indicators suggest strong application volumes and conversion rates, continuing the trends seen this year. Operational improvements have enhanced these metrics.
Q: What is the strategy regarding mergers and acquisitions, and the company's stance on leveraging for acquisitions? A: (James Rhyu, CEO) - Stride is cautious about valuations in potential M&A activities and prefers a strong cash position over high leverage. The focus is on strategic deals that offer high returns and align with long-term shareholder interests.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
