Q1 2022 Stride Inc Earnings Call
Good day, and thank you for standing by and welcome to the Stride, Inc. First quarter fiscal 2022 earnings call.
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I would now like to hand, the conference over to Mr. Tim Casey.
Thank you and good afternoon, welcome to <unk> first quarter earnings call for fiscal year 2022.
With me on today's call are James Route Chief Executive Officer, and Tim Medina, Chief Financial Officer.
As a reminder, today's conference call and webcast.
Costs are accompanied by a slide presentation that can be found in the stride Investor Relations website.
Please be advised that the discussion of our financial results may include certain non-GAAP financial measures. A reconciliation of these measures is provided in the earnings release issued this afternoon and can also be found on the investors section of our web site.
In addition to historical information.
Nation today's call May also involve forward looking statements the company's actual results could differ materially from any forward looking statements due to several important factors as described in the company's latest SEC filings. The company assumes no obligation to update any forward looking statements made during this call.
Following our prepared remarks, we.
We will answer any questions you may have I will now turn the call over to James James.
Thanks, Tim.
Each summer as we prepare for the upcoming school year, we faced operational and logistical demand to support the needs of millions of potential customers and thousands of teachers and support staff.
These past two summers have proven even more challenging as a result of the ongoing global pandemic.
Our country has been facing disruptions in the supply chain shortages of workers across industries uncertainty in the workplace and renewed fears of inflation. Among many other difficulties in spite of this I have great faith in our country.
Our ability to persevere and create opportunities through adversities.
We are resilient adaptive innovative compassion opinionated proud and sometimes disagree.
But we're always United and as we navigate these recent challenges we are evolving.
We're being forced to rethink certain norms and one of those.
Country approach to education.
I hope we now realize that there is no one size fits all solution to education to training or to workforce development.
Certainly some of the traditional methods work for me.
But we need to ensure we are providing choices for everybody.
Choices about how and where we learn.
Has been our how employers recruit how we educate and train the workforce and how we deliver opportunities for those seeking new paths.
Over 20 years ago stride was founded on the premise that students and families should have a choice in their education.
The pandemic has made this mission more critical than ever before.
We remain committed.
Committed to ensuring that we are providing a best in class experience across a range of customers. We serve from early elementary to adult workforce solution.
We want to make sure that these educational options are available to as many learners as possible.
The increasing demand for educational and training options continues to fuel our business.
The pandemic and the resulting disruption across schools and districts has led to a surge of support for school choice.
Total support for school choice has increased to almost 75% of the population.
The pandemic raised awareness for parents about their students education, and many recognize that they're not getting what.
<unk> from their existing school.
And that surgeon interest spans private schools voucher programs virtual schools and other similar programs and.
And specifically interest in virtual education has seen dramatic increases.
In large part this was because so many were forced into it during the pandemic.
And while the experience with <unk>.
They need was positive it absolutely opened the eyes of many to the benefits of a virtual model.
And for US. This has translated into what we believe is a structural long term increase in the demand for our products and services.
In fact peak website traffic this year surpassed the traffic.
Not all we saw last year at the height of the pandemic.
We're seeing well over a million unique visitors to our websites each month and growing.
And there are more educated consumer.
Conversion rates for those who apply to our program are at a multiyear high.
We attribute this in large part to the increase in awareness.
With families that apply to our program know what they were looking for and so they convert at higher rates.
This is an important trend for us over the longer term.
And as families become more comfortable with virtual education and stride to experience. It opens up other opportunities for us to offer other institutional and consumer offerings.
And while our conversion rates have improved so have conversion times.
Families. Both know what they want and we are also making it easier for them to enroll.
Our focus on the consumer experience and customer journey is just beginning and if these early trends are any indication of what we can expect we are going to deliver some really exciting.
Exciting customer experience improvements in the coming months and years ahead.
Our roadmap of new products and customer improvements is more robust than it has been in the over eight years and I've been with the company.
Beyond the lookout for some exciting new product announcements during the upcoming year.
However, this demand hasn't come without some additional challenges as many.
Typically experience there are labor shortages in many industries and education is not on mute.
Teacher shortages have been a real threat to the U S education system for many years and the pandemic has only exacerbated this risk.
We're thankful for the thousands of wonderful teachers, we manage these shortages have limited our ability to.
If you haven't used students in some states.
Given the dissatisfaction many teachers experienced in traditional schools and high satisfaction rates, we see for teachers that we manage we hope that they consider us as an option.
Particularly with vaccination requirements accessibility and age restrictions some teachers just don't feel comfortable in.
Enrolling our environment.
So over time, we will be looking to ship more and more teachers to online programs, where they have greater flexibility impact and reach than they have in their current roles.
Another trend that we see accelerating as the focus on career training and workforce development.
We desperately need skilled workers and many high school.
And there are realizing that their future success does not need to be tied to a four year College degree.
This fall our stride career programs from Middle and high school students enrolled 42000 students a 36% increase from last year.
It's also three times the level, we were at just two years ago.
And our.
Our surveys for career learning demand, even more positive than overall virtual education.
Even as interest in virtual options increased career learning interest continues to outpace it by multiples in the middle and high school space.
We think that this interest coupled with the opening of new programs and new state can sustain.
Students are on growth in this business over the long term.
I think the investment community was rightfully skeptical of our ability to grow after last year's pandemic boom and make no mistake, we continue to see a positive impact on our business from the ongoing pandemic uncertainty.
But we also believe that there is an ongoing structural shift in education and we.
We are the digital leader in this space and we believe that positions us to thrive over the long term across a broad spectrum of product and service offerings.
For this year that means we expect to grow both our top and bottom line.
And we believe we are on pace or better for the long term goals, we set out for ourselves just last.
<unk>, Tim will provide more details on this in just a minute.
I also wanted to highlight one of our new product offerings for this school year as many of you know younger students were disproportionately impacted by the pandemic.
Young students were less likely to attend school consistently and we're more likely to suffer from significant learning loss.
Additionally.
According younger students staring at home learning can be a challenge for families.
We recognize that particular difficulties of this age group even prior to the pandemic and have been working on an entirely new design for our K through five course catalog.
Our new programs are built specifically to support more independent learning and allow parents and families.
So play a more supporting role in a child's education.
We believe these new courses will allow for deeper engagement and better academic outcomes.
And lastly, while Covid was rightfully receiving much of the attention over the last year.
There have been other catastrophic disruptions for example in September hurricane either hit the Gulf Coast.
<unk> a significant number of students were displaced from their homes and schools.
Our team quickly mobilized to offer free private virtual program for these students that is now serving hundreds of thousands.
Proud of the team for this effort.
Doing what I called absolute rate and is a core principle for stride.
Thank you for your time today.
Now I'll pass the call over to Tim Medina to discuss our quarterly results in fiscal 'twenty two guidance Tim.
Thank you James and good afternoon, everyone.
First let me quickly recap our reported results.
For the quarter was $402 million an increase.
<unk> almost 8% over the same period last year.
Adjusted operating income was $4 $5 million down significantly compared to the prior year, which I'll discuss in a few minutes.
And capital expenditures were $15 4 million, an increase of $2 6 million over last year.
Driven.
Increased strong demand and career learning and a recovery in revenue per case grew 12 enrollment we expect to grow revenue and profitability this year compared to prior year.
Our first quarter results and this guidance for the rest of the year demonstrates the confidence we have about our ability to sustainably address.
My underlying demand for high quality online educational options.
We believe this sets stride up for continued long term growth and expanding margins across our lines of revenue.
Q1 revenue from our general education business decreased $7 5 million to 306.
The <unk>.
This was due primarily to the expected decline in enrollments, partially offset by an increase in revenue per enrollment.
General Ed enrollments decreased to 147 6000 from $164 6000 last year during the height of Covid.
Three as James discussed, we continue to see strong demand for our offerings and we expect that over the coming years. This business will grow off this new baseline.
Revenue per enrollment in general education increased nine 7% in Q1 compared to the same quarter last year.
We are seeing favorable.
Funding impacts in many states offset by some mix shift to lower funded states for.
For the full year, we expect to see revenue per enrollment in line with or even better than our fiscal 2020 results.
Career learning revenue grew to $93 $9 million an increase.
<unk> four 4%.
This was driven by continued strong growth in our stride career prep enrollments and growth across our adult learning business.
Within our career learning business, our middle and high school career learning revenue was $71 $4 million up 46, 4% from last.
Last year.
This was driven by a 36, 4% increase in enrollments and an 8% increase in revenue per enrollment.
Like our general education, K through 12 business, we expect revenue per enrollment and stride career prep programs to improve significantly over last year.
Our adult.
So turning business had another strong quarter, finishing with revenue of $22 $5 million. This puts us on a great trajectory for the full year and we expect the adult learning to contribute almost $100 million in revenue during fiscal year 2022.
Gross margins for the quarter were 30.
Adult one 6% down 340 basis points compared to the same period last year.
We returned to a more normal seasonal pattern in our materials and computer expenses. This year last year, we had a slower ramp in shipments to students, which pushed first quarter gross margins.
31, therefore, we expect our second quarter comparison to be more favorable as spending this year is more in line with the normal seasonality we saw in years prior to last year.
We continue to feel confident in our ability to achieve the 2025 gross margin targets, we laid out last November and faster than we.
Anticipated.
Selling general and administrative expenses for the quarter were $133 4 million up $15 6 million from the first quarter of fiscal 2021.
The increase in SG&A is primarily driven by higher costs associated with enrollment and on boarding and the annualized.
Originally <unk> of expenses from our acquisitions.
Stock based comp was $8 3 million for the quarter.
We anticipate that we will finish the year with stock based compensation in the range of 29% to $31 million.
Adjusted operating income for the quarter was $4 5 million.
Adjusted EBITDA.
<unk> was $25 5 million.
Both of these metrics were impacted by the seasonality of costs that I outlined above the.
The timing of our cost and income in fiscal year 2021 had timing anomalies that we explained during our quarterly calls last year.
This year, we expect.
Dog seasonality of expenses will be more similar to the years prior to FY 'twenty one.
As you can see in our guidance, we think the second quarter will be very strong from a profitability standpoint.
Interest expense for the quarter was $2 million.
As we mentioned last quarter, we have adopted.
Our Seo accounting guidance that eliminates the noncash interest expense related to the amortization of the debt discount from our convertible note.
This results in lower interest expense. It also means that we have increased our long term debt recorded on our balance sheet, even though we have not taken on any additional debt.
The new of the year, we expect our quarterly interest expense to be fairly consistent with the first quarter.
Our effective tax rate came in at 33%.
For FY 'twenty two we believe we will finish the year with a tax rate in the 28% to 30% range, mostly due to an increase.
Non deductible compensation above FY 'twenty one.
Capital expenditures in the quarter totaled $15 4 million up $2 6 million from the prior period last year.
This increase was expected as we invest in more mainstream consumer facing products expected.
<unk> and <unk> to contribute the future financial performance as well as ongoing investments in our high growth career in adult learning businesses.
Free cash flow in the first quarter defined as cash from operations less Capex was negative $146 9 million as compared to the prior.
<unk> $127 3 million.
This normal seasonality of cash flows relates to school launch and the enrollment and onboarding of new students.
We expect to see positive cash flow for the next three quarters for.
For fiscal year 2022, we expect to have significant.
Are you currently higher cash flow from operations than in fiscal year 2021.
We ended the quarter with cash and cash equivalents of $218 $5 million.
Turning to our guidance.
For the second quarter of fiscal year 2022, the company is forecasting revenue.
<unk> in the range of $390 million to $400 million.
Adjusted operating income between 55 and $60 million and.
Capital expenditures between 14 and $17 million.
For the full year, we are forecasting revenue in the range of 156 to $1 six zero billion.
<unk>.
Adjusted operating income between 165 and $180 million.
Capital expenditures between 65 and $75 million.
And lastly, an effective tax rate between 28% and 30%.
Before I wrap up I want to be sure to thank.
Poised for their dedication to the academic and career goals of so many students and learners.
Without the collective effort of thousands of stride employees, we could not have achieved the strong results. We saw this quarter and that we expect to see for the full year. Thank you all.
And.
Our I'll turn it over to the operator operator.
As a reminder to ask a question you will need to press star one on your telephone.
Do we draw your question press the pound key.
Please standby, while we compile the Q&A emails too.
And with that.
Okay.
First question comes from the line of Jeff Silber of BMO capital.
Thank you so much and congrats to the strong start of the year.
I wanted to dig into your general education enrollment trends, obviously, the numbers were better than people thought.
Is it possible to kind of parse through the difference between last year and this year in terms of the students that you retained versus new students that started this fall.
Hey, Jeff It's James So obviously as you know, we don't break that out actually.
What I will say.
Is that.
We have continued to see.
Strong.
Renewing interest.
In our programs and I think it's just sort of logical like.
In order for us to I think hit the kind of numbers we're hitting.
We have to have had both.
A lot of returning families and then.
Ongoing interest from new families.
Like I said, we don't we don't break that out specifically, but I just I think that the comments were making around us seeing sort of a structural shift and.
With.
The tide rising if you will on demand is it's real and.
And I think in addition to that as.
As I mentioned, we have more demand than we could actually have dealt with because we actually had to cut enrolment short in some states because of the teacher.
So we just don't see we just don't see the demand abating as I think most people predicted.
Alright, that's great to hear and maybe we can drill down into the structural changes in demand are you seeing it all across the board or are there certain grade levels or geographies that are stronger than others.
Sure Yes.
I think generically speaking, we're seeing it fairly across the board, we do see light.
Bias towards some of the younger grades that's actually good for US as you know because it gives us a lot longer potential lifetime value of those students that let's let this often get more than one bite at the Apple with those students because some of them do.
Come back.
So we see a slight bias there we did see some slight bias in states that had some higher.
Higher Covid cases, I think that sort of also natural so we saw a little bit of bias there, but we've seen pretty strong demand across the board.
Okay, and if I can get.
Actually what you talked about on the teacher shortage can you just remind us how easy or difficult. It is to cheaper you to transfer teachers again kind of a cross state lines and do you have a large number of international feature that teacher U S. Students.
Yes so.
I'll answer the second question first we do not have.
Leaving an international sort of future pool that we draw from I know there are other companies out there to do that we have not headed down that path.
To date and.
So far at least all of our teachers.
Really we try to keep this as domestically.
Our managed as possible.
The teacher.
Rich.
Is.
Definitely it's across the board, we did see some specific concentrations.
In some of our larger states, like California, or Texas and and so.
It is a really pretty broad spread.
Teacher shortage.
Sure Cross the U S.
If you do any of your.
Digging into this independently youll see that I mean, this is a widespread all the brick and mortar school districts are dealing with this.
Actually.
There was a teacher shortage pre pandemic the pandemic exacerbated in a lot of teachers are reluctant to go back I think.
It's actually just a great opportunity for us we do not I think to your first question.
We do not do much in the way of sort of cross state pollination.
As you know in many states, where you have to be certified we have limited numbers of cross started by teachers and things like that so it is something.
Think long worked through it because we do have some some teachers that are cross certified and of course, there we can use them but.
But we obviously we are very strict on our compliance requirements and ensuring that we manage to the compliance requirements in each state.
Okay, great I'll jump back in the queue. Thanks, so much.
We need the next question comes from the line of Jeff Goldstein of Morgan Stanley.
Hey, guys good evening.
On the career learning enrollments was growth there in line with your expectations coming into the year. I know initially you didn't expect a large COVID-19 driven impact there, but do you think that came into play with student retention.
All at all and then I guess looking forward is there any change to how you see the long term enrolment trends in that business.
Yes, I think Jeff that the.
The nice thing in an absolute basis is is that retention in our career programs tend to be a little bit higher than our general education programs. So that.
That obviously helps the trajectory.
The enrollment business and just the.
Medical sort of law of large numbers when we have a smaller business. It actually it actually helps retention as well so those kinds of things do help I think.
Though.
We were I don't think we were surprised.
By the trajectory of this business.
We continue to see all the research that we do.
Suggesting that the demand for these kinds of programs is just growing.
And so I don't in fact think that were surprised I think the trajectory can continue in fact, I actually think longer term it gets better because the one thing that I don't think we do a great job yet.
I think he is tapping the vein of the career specific interested families. I think we continue to sort of have the vein.
The more general education families that.
Do have an interest incur programs and they opt into that program.
But I think we can do a lot more.
Into tapping into career specific families that are looking for programs like ours.
And I think that we've got a lot of upside in doing a better job of that so I think the trajectory can certainly continue.
Okay, Perfect and then you mentioned general education revenue and per.
More than one being higher than last year.
But I guess given the nearly 10% growth in the first quarter is there something that that will temper that growth rate for the remainder of the year or maybe or did I misinterpret that end a number like 10% is the right run rate going forward, maybe just help me with the trajectory for.
We're enrolling in the year and what's behind that thanks.
I think generically speaking we are seeing this year, it's not it's.
It's not a Q1 thing.
We're seeing this year, we will see higher.
Her people revenue per enrollment revenue funding throughout.
Throughout the year of course there.
For the remained a little bit of.
Sort of give or take during the course of the year, but it's not going to go 10%. This quarter and then down to 2% next quarter. So it will stay in that range or we expected at least to stay in that range through the year.
Okay. Thanks, a lot I appreciate it.
Next question comes from.
As always though Stephen Sheldon William Blair.
Thanks, James and time and congrats on the results here.
Firstly, I think it'd be great just to get some updated thoughts he mentioned it a little bit in the prepared remarks, but just your ability to launch programs in new states over the next few years, especially.
The line on the favorable trends youre seeing in accepting public vouchers.
What opportunities do you think there could be an expanding into new states over the medium term.
So.
I think in the short to medium term.
Theres, a lot of opportunity and I'm going to say this sort of.
I mean to get.
Specialty was maybe out of out of my own swim Lane here, but I just think given everything that's gone on over the past two years in this country.
I'm just disappointed.
In those politicians, who are still resisting giving the kids in their states opportunities for virtual programs like ours I just.
Too far of a disappointing.
It's disappointing to me and I think that.
Families out there that we hear from its disappointing to them as well.
I think from a new state opportunity perspective, I do think that there are a small handful of states that we can see.
We'll get some traction and we already know George is going to come online next year States.
Just think about key West Virginia, we see good traction in those states New Hampshire, we see some early traction in that state. So I think that there is.
There is in the short to medium term.
Some good conversations we see happening.
And again I, just think that when you mentioned voucher programs I think when you throw in things.
Our contactor programs, which will really help our private pay business.
More but I think when you throw those kinds of things and I think that there is a lot of states who are there just considering ways that they can offer more choice to their families in that state.
Again, just given what we've been through in the past 18 months I cant see how you can't.
Like the.
Okay got it thats helpful.
On the on the guidance I think in the past couple years, you have seen quarterly absolute revenue relative to the first quarter of the fiscal year, either remained steady over remaining quarters or increase.
It seems like.
Acquisitions might be playing some of that but it seems like you're assuming some slight moderation.
Do that over the rest of the year right now so just wanted to ask how much of that is conservatism is there anything youre, assuming especially in terms of in year retention rates that may be different relative to.
To what you've historically seen just any detail there.
As with any year, we have always has some variability in our quarter to quarter revenue.
Iterations and this year, we saw an increase in enrollments that was impacted by the Covid variance as James talked to and since this does introduce some more risk in our retention, we're being a little bit conservative in our forward estimates.
Got it.
That's helpful and then just lastly.
<unk>.
On the Middle and high school career learning enrollments I know youre going to see many more students graduate from those programs over the coming years, but for those that have graduated what can you share about what those student outcome that the students are frequently doing post graduation in terms of entering the workforce continuing into other forms of higher education.
Lastly, and what are their what are their outcomes look like even though I know it's probably.
Somewhat small sample size at this point.
Yes, I think your last comments the most relevant is just in terms of the number of actual absolute graduate said, we've been able to track the sample size is still pretty small.
What we advocate very strongly.
Even in our career programs.
That.
We want.
One of three outcomes for each of our <unk>.
Graduates, we want them either going to unemployment path going into further education or doing some enlistment.
And we think that they are all three very viable and by the way.
We advocate the exact same for our non core high school students.
Actually no different.
And and so what we have.
What we early returns that we see from our career graduates are that that they are in fact motivated to go down one of those has I think we have pretty good success in.
Come down into that path I think.
We're going to continue to invest behind our sort.
Councillor program, and making sure that we provide the right kind of counselling and advice to these kids, but too early to tell sort of definitively from a data perspective as you may know for those of you who are on the call that.
That have graduated.
High School <unk> College, I suspect that many of you don't know.
Or don't keep in track track with.
Where your classmates are today in your schools have had difficult to do that so.
The data is always a little bit tough to get at so we're working hard to figure out a way that we can.
And getting all we can really have good solid data on it but the early returns certainly looked at.
Great. Thank you.
Next question comes from the line of Alex Paris Barrington Research.
Hi, guys. Thanks for taking my call I'd add my congratulations to the.
The better than expected first quarter results and the strong start to the year.
I just have a couple of questions.
So enrollment was better than expected.
Liam.
Stride career prep versus my model.
Obviously, driven by demand driven by.
Variant.
Clearly a tough comp just wondering are there any new programs in the mix.
That account for that enrollment in managed schools on the general education side I believe you have some new schools on the stride career prep side this year.
Yeah, we actually.
Delta.
We didn't really have a lot of new programs this year.
In fiscal year 'twenty two on the curve on the career side, we're talking to all our clients about.
About starting programs and I think we still have some new programs that over the next couple of years, we will be opening, but it's a pretty good year over year comp for us.
Actually sit in a sense it a lot of that growth was in fact not from.
New programs and that's a little bit of a double edged sword I mean, I actually wish we had a couple more new programs than we did but.
But but I think most of if not all of the programs that we have are states that we're in they're interested in it we just sort of worked through all of the Macau.
Mechanics, and the logistics of getting them up and running so I actually think that the comp is pretty good and the upside is pretty good in the sense of we have a fair number of programs, where we can still enter into in states.
Got you I appreciate that.
You've talked about the <unk> teacher shortage several times on this call it's been in the news.
I'm wondering.
Wondering can you quantify the.
Packed on enrollment due to the teacher shortage I'm sure you left.
Some families.
Uh huh.
Unable to enroll given the teacher shortage what are your thoughts there or any additional color would be helpful.
Yeah, I don't want to quantify exactly but I will.
Little bit of sort of a little bit of stats here.
For sure.
We could have topped last year.
Pretty sure we would have topped 200, if we could we were several if not more hundred teacher short. So you sort of can do the math around ratios and stuff like that.
And back into a round number but.
It's not insignificant.
And.
We are we.
We are.
Working very hard.
So you try to make sure that we can get as many teachers filled as we can but we.
We also want to make sure that.
We we do.
Do the right thing here so.
So it's a delicate balance and.
And we're working hard to fill the need but but we do have the shortage.
And.
Contributing to the teacher shortages vaccination requirements I'm in Chicago, So it's in the news every day.
Your teachers are obviously.
Remote teaching, but do you have any vaccination requirements for teachers.
In certain states or in general.
So by and large we do not.
And when I referred to I think sort of long term benefit to us about what's going on I think there's a lot of that.
Whether it's a vaccination requirement that some.
Maybe reluctant to meet where they don't have to meet with us.
Whether it's the fact that a kid that they're teaching.
Kids in a classroom that aren't yet able to be vaccinated that long term trend plays well for us.
I think it's the way that many school districts in the brick and mortar sort of realm.
Handled.
Teachers and remote learning and their teachers during the past 18 months I think that plays into it and we see a lot of dissatisfaction in them.
We want to provide our teachers teachers that we manage.
A safe work environment I think we do that.
We are providing them great professional development.
Attunity is I think to teach in a way that is.
Modern and will reflect where the education industry is going to go ahead. So I think there's just a lot of benefits that we provide for our future population and I think that trend is going to work in our favor over the next several years.
Makes sense.
And then I guess my last question is on revenue per enrollment kind of following up on a prior question General education. It was up nine 7% occur learning up seven 9% I assume that has to do with <unk>.
State to state and mix and so on but.
I was kind of going into this year, assuming that you'd have a.
6% to 7% increase in revenue per enrollment this year, making up all that you launched last year due to COVID-19 related budget issues and that sort of thing. So given that we're more in the 8% to 10% range or our revenue per enrollment coming in higher than you had previously expected.
So.
So I think the delta might be and you know I don't want to get into too many specifics here, but in a previous call I think we've talked about that we're not going to see.
Are we at that time, I think we didn't see a significant amount of.
S or money coming in we still don't but there is a little bit of that there's a little bit.
Mix Theres, a little bit of a little bit of stronger enrollment funding trends. So I think it's sort of an accumulation of things. It's not I don't think one thing, particularly that we can point to but the.
The general tailwind I think is there and I think that.
Governments are trying to make sure that.
Yes.
Schools get funded I give I give a lot of states a lot of credit for really trying to do the right things here in this environment. So it's a really shut out to a lot of the state government. So I think really done a great job.
So just in conclusion, it is 8% plus sort of a better number to use than six or.
These pursuit for fiscal 'twenty two.
Yeah for this year for sure.
Got it very helpful again, congratulations on the quarter and.
Setting up well for fiscal 'twenty two thank you.
Sure.
Yeah.
Again to ask a question you May press star one on your telephone keypad.
<unk> question comes from the line of Tom single Hirsch.
Yeah.
Yeah. Good evening, it's Tom here from Citi. Thanks for taking the questions.
Congratulations on the results.
Our first question is on share I mean, obviously.
Next.
So dealing with the sort of hiatus from last year, but.
Do you think you actually took share of the of the sort of the virtual school market. If that's what we're putting out I'm just sort of comparing and contrasting what you guys have said Oh got it.
It's the person who love they weren't necessarily.
That's robust.
And enrollment.
That would be my sort of reading of what they've said.
So that was the first question and then and then secondly, they had talked about.
Revenue per enrollment coming down it will be I think they did indicate that that might be down to.
Our mix of states.
Wondering what the sort of.
The growth profile across different states is doing to your revenue per enrollment with the revenue part of them they have been even better.
Different sort of.
Patent of demand across different states.
Those are the two questions I was going to start with and I've got maybe one follow up thank you.
I was just I think the.
The.
Market share question is is.
Is one that is it's a little bit hard because so many programs, whether the brick and mortar programs or whatever have have spawned over the past year or so, but I think when you're talking about sort of like.
Like full time virtual programs like the ones that we offer.
It does.
Look like if anything we're either holding or gaining a little bit and sure. So.
I don't know that I don't know how dramatic it is Andy.
Again, it's a little bit.
Fusing because.
Further with the number of brick and mortar programs.
It had been still running and so and Theres a lot of sort of in and out in that.
So I think.
Think of that.
That market share questions. We're certainly doesn't see we can't see anything that where we're losing share again sort of like for like competitors.
On the funding side.
Because of the.
The funding for us at least we did have I think a.
Our mix.
This year.
That was I want to say pretty comparable to last year.
One slight benefit in May remember, California last.
I think or.
Was sort of artificially depressed they have pretty decent funding and we were able to enroll a little bit more in California. This year, Although California is also a state where we had to cut it off because of the teacher shortage. So Cal.
California still has tremendous demand.
Great State lot of a lot of families really want this choice.
Last year end.
But what we couldn't serve all of it so I think that from a mixed perspective, we sort of tread water this year by and large and and.
And I can't speak to what other other competitors' mix was but I think for us at least we pretty much tread water.
Okay and then the follow on I mean, obviously now you've.
You've got through the back to school period, you know what the enrollment looks like I mean, what have you learned sort of incrementally about the sort of.
If I can call it the COVID-19 cohort I.
Are they fundamentally different in terms of the.
But withdrew right the the engagement with the platform or any other sort of inside so perhaps you could offer.
It's about a little bit more information now, we're a quarter into the new year.
Yeah, So interestingly enough.
We went into last year actually thinking that the COVID-19 cohorts, we're going to behave a lot differently than.
Sort of the the rest of the population that we normally attract and what we found out through last year at least was is that they didn't they.
They did not in fact behaved dramatically different than sort of a quote unquote normal cohort, we actually expected them to and they didn't.
And early returns are this year that sort of <unk>.
Emily is that.
They're just not that much different.
I think our programs are engaging I think families are engaged I think families are particularly <unk>.
Engaged now with Covid, they've gotten sort of pay more attention to.
<unk> learning and I think they understand a little bit better the difference.
It's been put online learning in that online learning I think that helped our retention rate last year a lot.
And I think that bodes well for the long term and that but whether youre, a COVID-19 family or <unk> family I think we're separating ourselves a little bit from a lot of other online programs, whether it brick and mortar or other online school programs.
Families come to us they see that we're the market leader they understand that our programs are digital first they understand that they understand that we have well trained teachers are teachers really care about their online learning our teachers want to be in an online digital environment and and I think it sort of shows up in the way that they.
<unk> goes and their satisfaction surveys they are on boarding has been very active.
And I think we just have a sort of a program that.
That out shines a lot of the other programs out there.
That's very clear thank you very much.
Yeah.
And there are no further questions at this time.
This concludes today's conference call. Thank you for participating you may now disconnect.
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