Stride, Inc.

Previous wording

Certain statements in Management’s Discussion and Analysis or MD&A, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2024, which we refer to as our Annual Report, and in Part II, Item 1A of this Quarterly Report. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements.

Current wording

Certain statements in Management’s Discussion and Analysis or MD&A, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, which we refer to as our Annual Report, and those referenced in our other SEC filings, including in Part II, Item 1A of this Quarterly Report. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements.

Previous wording

We are a technology company providing an educational platform to deliver online learning to students throughout the U.S. Our platform hosts products and services to attract, enroll, educate, track progress, and support students. These products and services, spanning curriculum, systems, instruction, and support services are designed to help learners of all ages reach their full potential through inspired teaching and personalized learning.

Current wording

We are a technology company providing an educational platform to deliver online learning to students throughout the U.S. Our platform hosts products and services to attract, enroll, educate, track progress, and support students. These products and services, spanning curriculum, systems, instruction, and support services, are designed to help learners of all ages reach their full potential through inspired teaching and personalized learning. Our clients are primarily public and private schools, school districts, and charter boards. Additionally, we provide solutions to employers, government agencies and consumers.

Previous wording

We provide a wide range of products and services across our platform with the ability to deliver customized solutions. Our comprehensive school-as-a-service offering supports our clients in operating full-time virtual schools in the K-12 market. Together with our network of online schools, Stride has served millions of students with our products and services. In our most recent academic year ended June 30, 2024, we graduated 15,987 high school students from our partner schools.

Current wording

We provide a wide range of products and services across our platform with the ability to deliver customized solutions. Our comprehensive school-as-a-service offering supports our clients in operating full-time virtual schools in the K-12 market. Together with our network of online schools, Stride has served millions of students with our products and services. In our most recent academic year ended June 30, 2025, we graduated 19,045 high school students from our partner schools.

Previous wording

Products and services for the General Education market are predominantly focused on core subjects, including math, English, science and history, for kindergarten through twelfth grade students to help build a common foundation of knowledge. These programs provide an alternative to traditional school options and address a range of student needs. Products and services are delivered as a comprehensive school-as-a-service offering for schools or as stand-alone products and services. A student enrolled in a school that offers Stride’s General Education program may elect to take career courses, but that student and the associated revenue is reported as a General Education enrollment and General Education revenue.

Current wording

General Education products and services are predominantly focused on core subjects, including math, English, science and history, for kindergarten through twelfth grade students to help build a common foundation of knowledge. These programs provide an alternative to traditional school options and address a range of student needs. Products and services are delivered as a comprehensive school-as-a-service offering for schools or as stand-alone products and services. A student enrolled in a school that offers Stride’s General Education program may elect to take career courses, but that student and the associated revenue is reported as a General Education enrollment and General Education revenue.

Previous wording

For both the General Education and Career Learning markets, the majority of revenue is derived from our comprehensive school-as-a-service offering which includes an integrated package of curriculum, technology systems, instruction, and support services that we administer on behalf of our customers. The average duration of the agreements for our school-as-a-service offering is greater than five years, and most provide for automatic renewals absent a customer notification of non-renewal. For the 2024-2025 school year, we provide our school-as-a-service offering to 89 schools in 31 states and the District of Columbia in the General Education market, and 56 schools or programs in 27 states and the District of Columbia in the Career Learning market.

Current wording

For both the General Education and Career Learning markets, the majority of revenue is derived from our comprehensive school-as-a-service offering which includes an integrated package of curriculum, technology systems, instruction, and support services that we administer on behalf of our customers. The average duration of the agreements for our school-as-a-service offering is greater than five years, and most provide for automatic renewals absent a customer notification of non-renewal.

Previous wording

We generate a significant portion of our revenues from the sale of curriculum, administration support and technology services to virtual and blended public schools. The amount of revenue generated from these contracts is impacted largely by the number of enrollments, the mix of enrollments across grades and states, state or district per student funding levels and attendance requirement, among other items. The average duration of the agreements for our school-as-a-service offering is greater than five years, and most provide for automatic renewals absent a customer notification within a negotiated time frame.

Current wording

We generate a significant portion of our revenues from the sale of curriculum, administration support and technology services to virtual and blended public schools. The amount of revenue generated from these contracts is impacted largely by the number of enrollments, the mix of enrollments across grades and states, state or district per student funding levels and attendance requirement, among other items.

Previous wording

The two key financial metrics that we use to assess financial performance are revenues and operating income. For the nine months ended March 31, 2025, revenues increased to $1,751.7 million from $1,505.9 million in the prior year, an increase of 16.3%. Over the same period, operating income increased to $303.2 million from $175.9 million in the prior year. The increase in operating income was driven by revenue growth and an increase in gross margin. Additionally, we use the non-financial metric of total enrollments to assess performance, as enrollment is a key driver of our revenues. Total enrollments for the nine months ended March 31, 2025 were 233.5 thousand, an increase of 38.9 thousand, or 20.0%, over the prior year. Our revenues are subject to annual school district financial audits, which incorporate enrollment counts, funding and other routine financial audit considerations. The results from these audits and other routine changes in funding estimates are incorporated into the Company’s monthly funding estimates for the current and prior periods. Historically, aggregate funding estimates have differed from actual reimbursements, generally in the range of 2% of annual revenue or less, which may vary from quarter to quarter.

Current wording

The two key financial metrics that we use to assess financial performance are revenues and operating income. During the three months ended September 30, 2025, revenues increased to $620.9 million from $551.1 million in the prior year, an increase of 12.7%. Over the same period, operating income increased to $69.0 million from $47.3 million in the prior year, an increase of 45.9%. The increase in operating income was driven by revenue growth and an increase in gross margin. Additionally, we use the non-financial metric of total enrollments to assess performance, as enrollment is a key driver of our revenues. Total enrollments for the three months ended September 30, 2025 were 247.7 thousand, an increase of 25.1 thousand, or 11.3%, over the prior year. Our revenues are subject to annual school district financial audits, which incorporate enrollment counts, funding and other routine financial audit considerations. The results from these audits and other routine changes in funding estimates are incorporated into the Company’s monthly funding estimates for the current and prior periods. Historically, aggregate funding estimates have differed from actual reimbursements, generally in the range of 2% of annual revenue or less, which may vary from quarter to quarter.

Previous wording

Stride has invested over $700 million in the last twenty years to develop curriculum, systems, instructional practices and support services that enable us to support hundreds of thousands of students. The following describes the various products and services that we provide to customers. Products and services are provided on an individual basis as well as customized solutions, such as our most comprehensive school-as-a-service offering which supports our clients in operating full-time virtual or blended schools. Stride is continuously innovating to remain at the forefront of effective educational techniques to meet students’ needs. It continues to expand upon its personalized learning model, improve the user experience of its products, and develop tools and partnerships to more effectively engage and serve students, teachers, and administrators.

Current wording

We have developed curriculum, systems, instructional practices and support services that enable us to support hundreds of thousands of students. The following describes the various products and services that we provide to customers. Products and services are provided on an individual basis as well as customized solutions, such as our most comprehensive school-as-a-service offering which supports our clients in operating full-time virtual or blended schools. Stride is continuously innovating to remain at the forefront of effective educational techniques to meet students’ needs. It continues to expand upon its personalized learning model, improve the user experience of its products, and develop tools and partnerships to more effectively engage and serve students, teachers, and administrators.

Previous wording

Curriculum and Content – Stride has one of the largest digital research-based curriculum portfolios for the K-12 online education industry that includes some of the best in class content available in the market. Our customers can select from hundreds of high-quality, engaging, online coursework and content, as well as many state customized versions of those courses, electives, and instructional supports. Since our inception, we have built core courses on a foundation of rigorous standards, following the guidance and recommendations of leading educational organizations at the national and state levels. State standards are continually evolving, and we continually invest in our curriculum to meet these changing requirements. We provide high-quality, engaging, online coursework and content in software engineering, healthcare, and medical fields.

Current wording

Curriculum and Content – We have one of the largest digital research-based curriculum portfolios for the K-12 online education industry that includes some of the best - in - class content available in the market. Our customers can select from hundreds of high-quality, engaging, online coursework and content, as well as many state customized versions of those courses, electives, and instructional supports. Since our inception, we have built core courses on a foundation of rigorous standards, following the guidance and recommendations of leading educational organizations at the national and state levels. State standards are continually evolving, and we continually invest in our curriculum to meet these changing requirements. We provide high-quality, engaging, online coursework and content in software engineering, healthcare, and medical fields.

Previous wording

Support Services – We provide a broad range of support services, including marketing and enrollment, supporting prospective students through the admission process, assessment management, administrative support (e.g., budget proposals, financial reporting, and student data reporting), and technology and materials support (e.g., provisioning of student computers, offline learning kits, internet access and technology support services).

Current wording

budget proposals, financial reporting, and student data reporting), and technology and materials support (e.g., provisioning of student computers, offline learning kits, internet access and technology support services).

Previous wording

Comparison of the Three Months Ended March 31,2025 and 2024

Current wording

Comparison of the Three Months Ended September 30,2025 and 2024

Previous wording

*Instructional costs and services expenses.*Instructional costs and services expenses for the three months ended March 31, 2025 were $364.1 million, representing an increase of $44.6 million, or 14.0%, from $319.5 million for the same period in the prior year. This increase in expense was due to hiring of personnel in growth states and salary increases. Instructional costs and services expenses were 59.4% of revenues during the three months ended March 31, 2025, a decrease from 61.3% for the three months ended March 31, 2024.

Current wording

*Instructional costs and services expenses.*Instructional costs and services expenses for the three months ended September 30, 2025 were $378.8 million, representing an increase of $43.6 million, or 13.0%, from $335.2 million for the same period in the prior year. This increase in expense was due to hiring of personnel in growth states and salary increases. Instructional costs and services expenses were 61.0% of revenues during the three months ended September 30, 2025, an increase from 60.8% for the three months ended September 30, 2024.

Previous wording

Selling, general, and administrative expenses. Selling, general, and administrative expenses for the three months ended March 31, 2025 were $118.5 million, representing an increase of $5.5 million, or 4.9% from $113.0 million for the same period in the prior year. The increase was primarily due to an increase of $7.8 million in personnel and related benefit costs, including stock-based compensation, partially offset by a decrease of $1.0 million in professional services. Selling, general, and administrative expenses were 19.3% of revenues during the three months ended March 31, 2025, a decrease from 21.7% for the three months ended March 31, 2024.

Current wording

Selling, general, and administrative expenses. Selling, general, and administrative expenses for the three months ended September 30, 2025 were $173.1 million, representing an increase of $4.6 million, or 2.7% from $168.5 million for the same period in the prior year. The increase was primarily due to an increase of $4.9 million in professional services and marketing expenses and $3.2 million in personnel and related benefit costs, including stock-based compensation, partially offset by a decrease of $3.7 million in bad debt expense. Selling, general, and administrative expenses were 27.9% of revenues during the three months ended September 30, 2025, a decrease from 30.6% for the three months ended September 30, 2024.

Previous wording

Interest expense, net. Net interest expense for the three months ended March 31, 2025 was $2.8 million as compared to $2.4 million for the same period in the prior year. The increase in net interest expense was primarily due to our finance leases.

Current wording

Interest expense, net. Net interest expense for the three months ended September 30, 2025 was $3.1 million as compared to $2.4 million for the same period in the prior year. The increase in net interest expense was primarily due to an increase in our finance leases.

Previous wording

Other income, net. Other income, net for the nine months ended March 31, 2025 was $23.5 million as compared to $19.4 million for the same period in the prior year. The increase in other income, net was primarily due to the increase in our investments in marketable securities and the returns on those investments year over year, partially offset by lower other non-operating income.

Current wording

Other income, net. Other income, net for the three months ended September 30, 2025 was $16.9 million as compared to $8.8 million for the same period in the prior year. The increase in other income, net was due to the increase in our investments in marketable securities and the returns on those investments year over year and other investment income.

Previous wording

Income tax expense. Income tax expense was $35.5 million for the three months ended March 31, 2025, or 26.3% of income before income taxes, as compared to $24.7 million, or 26.1% of income before income taxes for the same period in the prior year.

Current wording

Income tax expense. Income tax expense was $14.4 million for the three months ended September 30, 2025, or 17.3% of income before income taxes, as compared to $11.3 million, or 21.6% of income before income taxes for the same period in the prior year. The decrease in the effective income tax rate for the three months ended September 30, 2025, as compared to the effective tax rate for the three months ended September 30, 2024, was primarily due to stock-based compensation.

Previous wording

As of March 31, 2025, we had net working capital, or current assets minus current liabilities, of $1,243.4 million. Our working capital includes cash and cash equivalents of $528.6 million and accounts receivable of $699.8 million. Our working capital provides a significant source of liquidity for our normal operating needs. Our accounts receivable balance fluctuates throughout the fiscal year based on the timing of customer billings and collections and tends to be highest in our first fiscal quarter as we begin billing for students. In addition, our cash and accounts receivable were significantly in excess of our accounts payable and short-term accrued liabilities at March 31, 2025.

Current wording

As of September 30, 2025, we had net working capital, or current assets minus current liabilities, of $1,406.5 million. Our working capital includes cash and cash equivalents of $518.4 million and accounts receivable of $809.3 million. Our working capital provides a significant source of liquidity for our normal operating needs. Our accounts receivable balance fluctuates throughout the fiscal year based on the timing of customer billings and collections and tends to be highest in our first fiscal quarter as we begin billing for students. In addition, our cash and accounts receivable were significantly in excess of our accounts payable and short-term accrued liabilities at September 30, 2025.

Previous wording

During the first quarter of fiscal year 2021, we issued $420.0 million aggregate principal amount of 1.125% Convertible Senior Notes due 2027 (“Notes”). The Notes are governed by an indenture (the “Indenture”) between us and U.S. Bank National Association, as trustee. The net proceeds from the offering of the Notes were approximately $408.6 million after deducting the underwriting fees and other expenses paid by the Company. The Notes bear interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 1 st and September 1 st of each year, beginning on March 1, 2021. The Notes will mature on September 1, 2027. In connection with the Notes, we entered into privately

Current wording

During the first quarter of fiscal year 2021, we issued $420.0 million aggregate principal amount of 1.125% Convertible Senior Notes due 2027 (“Notes”). The Notes are governed by the indenture between us and U.S. Bank National Association, as trustee. The net proceeds from the offering of the Notes were approximately $408.6 million after deducting the underwriting fees and other expenses paid by the Company. The Notes bear interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 1 st and September 1 st of each year, beginning on March 1, 2021. The Notes will mature on September 1, 2027. In connection with the Notes, we entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain counterparties. The Capped Call Transactions are expected to cover the aggregate number of shares of the Company’s common stock that initially underlie the Notes, and are expected to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes. The upper strike price of the Capped Call Transactions is $86.174 per share. The cost of the Capped Call Transactions was $60.4 million and was recorded within additional paid-in capital.

Previous wording

We are a lessee under finance leases for student computers and peripherals under agreements with Banc of America Leasing & Capital, LLC (“BALC”) and CSI Leasing, Inc. (“CSI Leasing”). As of March 31, 2025 and June 30, 2024, the finance lease liability was $96.8 million and $55.6 million, respectively, with lease interest rates ranging from 3.95% to 6.72%.

Current wording

We are a lessee under finance leases for computers and peripherals under agreements with Banc of America Leasing & Capital, LLC (“BALC”) and CSI Leasing, Inc. (“CSI Leasing”). As of September 30, 2025 and June 30, 2025, the finance lease liability was $125.0 million and $86.9 million, respectively, with lease interest rates ranging from 4.68% to 6.72%.

Previous wording

We entered into agreements with BALC and CSI Leasing in April 2020 and August 2022, respectively, to provide financing for our student computers and peripherals. Individual leases with BALC include 36-month payment terms, fixed rates ranging from 3.95% to 6.72%, and a $1 purchase option at the end of each lease term. We pledged the assets financed to secure the outstanding leases. Individual leases under the agreement with CSI Leasing include 36-month payment terms, but do not include a stated interest rate. We use our incremental borrowing rate as the implied interest rate and the total lease payments to calculate our lease liability.

Current wording

We entered into agreements with BALC and CSI Leasing in April 2020 and August 2022, respectively, to provide financing for our computers and peripherals. Individual leases with BALC include 36-month payment terms, fixed rates ranging from 4.87% to 6.72%, and a $1 purchase option at the end of each lease term. We pledged the assets financed to secure the outstanding leases. Individual leases under the agreement with CSI Leasing include 36-month payment terms, but do not include a stated interest rate. We use our incremental borrowing rate as the implied interest rate and the total lease payments to calculate our lease liability.

Previous wording

Net cash provided by operating activities for the nine months ended March 31, 2025 was $134.5 million compared to $106.6 million for the nine months ended March 31, 2024. The $27.9 million increase in cash provided by operating activities was primarily due to higher net income in the current period as compared to the prior period, partially offset by changes in working capital resulting from seasonal fluctuations in accounts receivable, accrued liabilities, and accounts payable.

Current wording

Net cash used in operating activities for the three months ended September 30, 2025 was $195.8 million compared to $142.0 million for the three months ended September 30, 2024. The $53.8 million increase in cash used in operating activities was primarily due to changes in working capital, driven primarily by changes in accounts receivable, accrued liabilities, and inventories, prepaid expenses, deposits and other current and long-term assets, partially offset by higher net income adjusted for non-cash items.

Previous wording

Net cash used in investing activities for the nine months ended March 31, 2025 was $53.3 million compared to $101.0 million for the nine months ended March 31, 2024, a decrease of $47.7 million. The decrease was primarily due to a decrease in net purchases of marketable securities of $48.9 million partially offset by an increase in capital expenditures year over year of $0.2 million.

Current wording

Net cash used in investing activities for the three months ended September 30, 2025 was $24.7 million compared to $20.9 million for the three months ended September 30, 2024. The $3.8 million increase in cash used in investing activities was primarily due to an increase in capital expenditures of $6.9 million and an increase in investments of $2.3 million, partially offset by higher net maturities of marketable securities of $5.4 million year over year.

Previous wording

Net cash used in financing activities for the nine months ended March 31, 2025 was $50.6 million compared to $39.8 million during the nine months ended March 31, 2024, an increase of $10.8 million. The increase was primarily due to an increase in the repurchase of restricted stock for income tax withholding of $13.1 million partially offset by a decrease in the repayment of finance lease obligations incurred for the acquisition of student computers of $2.2 million.

Current wording

Net cash used in financing activities for the three months ended September 30, 2025 was $43.6 million compared to $20.0 million during the three months ended September 30, 2024. The $23.6 million increase in cash used in financing activities was primarily due to an increase in the repurchase of restricted stock for income tax withholding of $20.3 million and an increase in the repayment of finance lease obligations incurred for the acquisition of computers of $3.3 million.