Stride (LRN) Q4 2024 earnings summary

Executive summary

• Achieved record revenue of $2.04 billion for FY 2024, up 11% year-over-year, with record profitability and free cash flow; net income rose 60.9% to $204.2 million.

• Earnings per share increased 58% year-over-year to $4.69; gross margin reached a five-year high at 37.4%.

• Enrollment hit an all-time high, surpassing pandemic levels, with strong in-year retention and growth in both Career Learning and General Education segments.

• On track to achieve FY 2028 targets: 10% revenue CAGR and 20% AOI CAGR, supported by a strong balance sheet and disciplined capital allocation.

• Recognized with multiple industry awards for EdTech and innovative learning solutions.

Financial highlights

• Adjusted operating income was $293.9 million, up 46% year-over-year; adjusted EBITDA was $390.7 million, up 32%.

• Free cash flow reached $217.2 million, up $80.6 million year-over-year.

• Cash, cash equivalents, and marketable securities totaled $714.2 million at year-end.

• Net income for FY2024 was $204.2 million, up from $126.9 million in FY2023.

• SG&A expenses were $514 million, up 7%, but as a percent of revenue, declined 500 basis points since FY 2020.

Outlook and guidance

• Early indicators for fall enrollment are positive, with application volumes pacing ahead of last year.

• FY 2025 revenue per enrollment expected to be flat compared to FY 2024 due to state funding dynamics and ESSER headwinds.

• On track to achieve FY 2028 targets: $3.3B–$3.5B revenue, $585M–$800M adjusted operating income, $8.35–$9.00 EPS.

• Continued gross margin improvement anticipated, but at a slower rate; SG&A as a percent of revenue expected to decrease marginally.

• Formal FY 2025 guidance to be provided in Q1 earnings report in October.