Q1 2025 Stride Inc Earnings Call
Well good day, everyone and welcome to the Stride, Inc. Q1, FY 'twenty five conference call at this time I would like to hand, the call over to Mr. Tim Casey. Please go ahead Sir.
Tim Casey: Thank you and good afternoon, welcome to strike first quarter earnings call for fiscal year 2025 with.
Tim Casey: With me on today's call are <unk>, Chief Executive Officer, Dale Black Chief Financial Officer.
Tim Casey: As a reminder, today's conference call and webcast are accompanied by a presentation that can be found on the stride Investor Relations website.
Tim Casey: Please be advised that todays 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. It can also be found on our Investor Relations website.
Tim Casey: In addition to historical information. This 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 described in the company's latest SEC filings. Please.
Tim Casey: These statements are made on the basis of our views and assumptions regarding future events and business performance at the time, we make them and the company assumes no obligation to update any forward looking statements made during this call.
Tim Casey: Following our prepared remarks, we will answer any questions. You may have now I'll turn the call over to James James.
Tim Casey: Tim This year marks the 25th anniversary for K 12 strikes pre eminent brand.
James James: And those 25 years, we have served over 3 million families and students. It took us over 15 years to reach the first $1 billion and it has taken US just over three years to reach the third in that time technologies have advanced our footprint has grown and the country has evolved.
James James: One constant has remained our focus on providing customers choice in education, just as we have choice in most facets of our lives from shopping to entertainment to health care and financial services. So to she customers have choice and education and all the surveys and research I've seen irrespective of political leaning.
James James: Of course, the customer preference for choice edgy.
James James: Education should not be a political issue it could be a customer focused one as.
James James: As we prepare for our next 25 years, we are positioning <unk> to continue to lead by delivering Tomorrow's education today.
James James: And that vision extends beyond the hundreds of thousands of students. We currently serve each year.
James James: We believe we can deliver a meaningful products and services to millions of students and customers each year with a range of initiatives that we are currently in development.
Key element of our evolution is to ensure we stay focused on our customers.
James James: And we see the families that have embraced our programs come from a broad range of background why.
James James: Because while we offer caters to the needs of families and instead of forcing them to cater to the rigidity of the program that is choice.
James James: Grahams are affordable and accessible.
James James: We embrace being career afford and we're leaning into new technologies and investing in innovation like never before in our core business, which as you can see remains robust and more demand as indicated by our application volumes is accelerating the issues that we can address for families spanning a wide range.
James James: From safety to academics connect will help to mobility to flexibility and on and on everything in between.
James James: It is that range of promise.
James James: We offer families that will be a cornerstone for our next 25 years.
James James: As you saw in our press release, we announced record enrollments for our first quarter.
James James: 18, 5% year over year growth and an acceleration in demand from this time last year.
Apart from the pandemic here. This is the highest recorded year of gross enrollment growth. This company has seen since it became publicly traded over 15 years ago, we've seen continual and rising demand for the services, we provide and the support for students. This enables.
James James: 25th year, I feel confident saying that we continue to raise the bar.
James James: For families looking for educational opportunities, we remain as committed as ever to offering Tomorrow's education today, our results for the first quarter demonstrate that more and more families are embracing what we have to offer and our guidance suggests we are on pace for another record year I'll now turn the call over to Donna Donna.
James James: James Good evening everyone.
Donna: As Jay mentioned the demand we saw this quarter has set us up for another strong year.
As with every year I'm incredibly grateful to all the stride employees, who support the thousands of families who come to our programs.
James James: It's an incredible opportunity for us and Topalov. So many students.
James James: The strength of all will Miss this year gives me confidence that we remain on track to achieve our fiscal 2028 targets.
I think all of them probably fiscal year 'twenty guidance further demonstrates that we are well on pace and some from just the continued underlying demand for our offerings.
James James: Turning to our quarterly results.
James James: Revenue for the quarter was $551 $1 million up 16% from first quarter of fiscal year 'twenty four.
James James: Adjusted operating income was $58 4 million, an increase of $43 6 million or 295% from last year.
James James: Got it at earnings per share were <unk> 94 up 83 cents from last year.
James James: Capital expenditures in the quarter was $14 8 million down one $3 million from last year.
James James: As we discussed last quarter. These results reflect the continued demand for our core offerings.
James James: Our total enrollments for the quarter exceeded 222000, almost 100000 more than we had prior to the pandemic in FY 'twenty.
James James: Families continue to seek out educational opportunities and stripe is still a need in the market for virtual options.
James James: Our execution of our marketing enrollment a full operations demonstrates our ability to grow enrollment sustainably for the long term.
James James: So realigning middle and high school revenue for the quarter was $198 9 million.
James James: Up more than 30% from last year.
James James: Career learning enrollments grew 34% to.
James James: 91 7000.
James James: General Education revenue grew 10% to 329 $4 million on enrollment growth of 11, 3%.
James James: 139000 students.
James James: Total revenue per enrollment across both licensed revenue was $2303 up slightly from last year as we mentioned in the fourth quarter. The loss of <unk> funding is a headwind to our revenue per enrollment. This year. However, this is being offset by a positive funding environment.
James James: This quarter, we expect to see some impacts from the state mix and timing and therefore believe we will finish the year flattish to down slightly and revenue per enrollment.
James James: Adult learning revenue continues to be impacted by the slowdown in our software development products.
James James: Outlined previously.
James James: Revenue for the quarter at $22 8 million was down from last year.
James James: Looking at the full year, we think this quarter's adult learning revenue is a good proxy for what we expect for revenue in the upcoming quarters.
James James: Gross margin for the quarter was 39, 2% up 320 basis points from last year.
James James: We continue to see improvements in gross margin as that business scales. Unlike last year, we manage our teacher hiring well.
James James: So all of these contributed to our strong gross margins in the quarter.
James James: For the full year, we expect gross margins to improve by 100 to 200 basis points compared to FY 'twenty four.
James James: Selling general and administrative expenses totaled $168 5 million in line with last year.
James James: As I've mentioned before I think we said, okay job of holding down our administrative costs.
James James: As we've continued to grow.
While we manage these costs well, we do expect to see some SG&A increase for the full year.
James James: Even with the slight increase we will still generate significant operating leverage out of that business.
James James: Stock based compensation for the quarter was eight 4 billion in line with last year.
James James: We expect to see a modest increase in stock based compensation due to the impact of some long term performance grants and therefore full year stock based compensation will likely be in the range of 34% to $39 million.
James James: Adjusted operating income for the quarter.
James James: It was $58 $4 million up almost 300% compared to FY 'twenty four.
James James: Adjusted EBITDA was $83 9 billion up 111%.
James James: Diluted earnings per share were 94 cents up 83 cents from last year.
Our profitability was driven by growth.
James James: Operating margin improvements, we continue to see benefits of scale as we grow.
James James: For the full year, we expect depreciation and amortization to increase marginally from last year capital expenditures in the quarter were $14 8 million down $1 3 million from last year.
James James: Free cash flow defined as cash from operations less Capex was negative $156 8 million.
Tier two negative $151 5 million in the prior year period.
James James: Cash flow in the first quarter, followed our typical seasonality related to school loss and the Onboarding of students.
James James: Last year, we expect to see positive cash flow for the next three for us.
James James: We finished the quarter with cash cash equivalents and marketable securities of $539 4 million.
James James: Turning to our guidance for the second quarter of fiscal year 2025, we are forecasting revenue in the range of $5 $60 million to $580 million adjusted.
James James: Adjusted operating income between 115 and $125 million.
James James: Capital expenditures between 13 and $15 million.
James James: For the full year, we expect revenue in the range of two to two five to $2 3 billion.
James James: Adjusted operating income between $3 95 and $425 million.
James James: Capital expenditures between 60, and $65 million and an effective rate between 24 and 26%.
Speaker Change: Thank you for your time today and for your continued support and now I'll pass the call back to the operator for your questions operator.
Thank you and just a reminder, everyone that is star one if you have a question we will take the first question today from Jason Tilton Canaccord Genuity.
Jason Tilton: Good afternoon, and thanks for taking the question.
Jason Tilton: I'm curious in terms of the really strong demand that drove the record enrollment in the quarter. If you can maybe shed a little more light on some of the different drivers of this momentum where they're starting to use cases, there are certain states that we saw really strong growth. Some of this some of thats driven by some of the more effective more effective marketing spend any color just showed the greatly appreciate it.
Jason Tilton: Yeah I think.
Speaker Change: It's pretty broad based.
We actually I think he's done a mentioned in her remarks.
Speaker Change: Our SG&A was pretty flat year over year, and so the increased demand sort of would imply that all things being equal.
Speaker Change: Lower cost of acquisition.
Speaker Change: Profile.
Speaker Change: Which I think from everything we can see at least.
Speaker Change: Points to a lot of sort of growth in organic demand.
Speaker Change: I think.
Speaker Change: Word of mouth organic demand.
Speaker Change: The sort of general.
Speaker Change:
Speaker Change: Word of mouth type of morality that we're seeing for our programs has been pretty strong.
Speaker Change: So just over the past couple of years, we keep seeing that growing in it.
Speaker Change: I think it's sort of.
Speaker Change: A good indicator that the customer.
Speaker Change: Voice for our product is strong and it continues to grow.
Speaker Change: Great. That's really helpful. And then just one follow up I'm curious in terms of the.
Speaker Change: You talked a little bit in the prepared remarks around how school choice, becoming a more bipartisan issue.
Speaker Change: Recent years I'm curious as we look at the election coming up in a few weeks are there any states wafer from a national perspective anything we should be focusing on in terms of any potential benefits or risks.
Speaker Change: The company either from a school choice perspective or from a funding perspective.
Speaker Change:
I certainly don't want a project.
Speaker Change: What's going to happen in a couple of weeks here, but the election I think that's probably a dangerous thing to do what I would say is double down on my comment that.
I don't think education should be a political issue I think that the customers have spoken that this is a pretty bipartisan type of product.
Speaker Change: We see a lot of demand from.
Speaker Change: People with all different kinds of backgrounds.
Speaker Change: And I just think that <unk>.
Speaker Change: Our politicians should governor in the country and and focus on educating everybody and providing this kind of choice for people, who really need. It is is an important part of the educational system and so hopefully we can get all of our politicians irrespective of party to focus on those things.
Speaker Change: Great. Thank you very much.
Speaker Change: The next question is from Jeff Silber BMO capital markets.
Jeff Silber: Thank you so much.
I wanted to focus on the comments about revenue per student I know theres been some questioning in terms of the impact of the roll off of Investor funding can you talk about what the impact of Investor funding was on your company last year from a revenue perspective, and if possible from a profit perspective.
Jeff Silber: And how thats impacting your guidance this year.
Jeff Silber: So.
Speaker Change: I think we've previously discussed that last year.
Speaker Change: Revenue impact was less than 3%.
I don't believe we've previously disclosed the exact profit impact of that although.
Jeff Silber: I think it is not.
Jeff Silber: Even if it's in the range of our normal profitability, it's completely immaterial.
Jeff Silber: If it was anything significantly more than that.
Jeff Silber: <unk> seen a different profile.
Jeff Silber: This year.
Jeff Silber: Then we're giving so clearly it's not out of the range of.
Profit margin that we saw for the overall company last year.
Jeff Silber: And so.
Jeff Silber: I'd, rather we get everybody looking forward.
Jeff Silber: For this company, we've got a tremendous demand profile customers are really gravitating to our products and services.
Jeff Silber: And I think we've set ourselves up for a really strong year.
Speaker Change: Okay and as long as we're looking forward can we talk about the impact in the current fiscal year in terms of new schools or schools that were lost.
And going forward or any major schools at risk that we should be aware of.
Speaker Change: Yes, I mean I.
Speaker Change: I think we've talked before that generally speaking, we see long term theres going to be an opportunity to add a school or two here or there.
We have not lost any significant programs for this year. We're currently unaware of any significant programs that we would do for next year or future years.
Speaker Change: So I think we would consider.
Speaker Change: Continuing to add programs not all of those programs that we would add would be in new states necessarily.
Speaker Change: The diversity, sometimes of having multiple programs serving different customer constituents in the same state gives us greater flexibility and help us meet customer demand customer demand in those states. So.
We think we're set up pretty well for.
Speaker Change: For future for meeting future customer demand.
Speaker Change: Okay I appreciate the color. Thanks, so much.
Speaker Change: Yes.
Speaker Change: Gregory Paris from Morgan Stanley has the next question.
Gregory Paris: Hey, good evening. Thank you congrats.
Gregory Paris: Congrats on the.
Gregory Paris: Credible result here.
Speaker Change: So, let's talk about enrollment a little bit differently again.
Speaker Change: Maybe the drivers this year.
Speaker Change: If you think about kind of retention and what youre doing there or maybe reaching new students the messaging that youre going to market with.
Speaker Change: The conversion rates that you have what really more of the biggest drivers this year I imagine its a combination, but maybe kind of flesh out where really where you are finding success in whats improved versus last year.
Speaker Change: Yeah, I mean I think.
Speaker Change: While it's just sort of reiterate I think that the biggest piece of this equation.
Speaker Change: That is helping drive.
Speaker Change: Our business.
Is the demand side.
Speaker Change: Customer demand has been strong.
And.
Speaker Change: Everything else, we tend to all the things you mentioned retention conversion all the other stuff.
Speaker Change: Sure, we're always looking to make those things better.
Speaker Change: Don't think that they were in any one of those things by the way where the single driver of our performance. This year I think it was clearly.
Speaker Change: Customers have.
Speaker Change: Said that they want this product.
Speaker Change: And on the demand side of this equation has been very strong. It continues to look very strong we continue to obviously drive.
Speaker Change: Good conversions, we can retention all those metrics, but.
Speaker Change: But this year wasn't driven by those things this year was driven by the demand side of the equation.
Speaker Change: Okay. That's helpful.
Speaker Change: And then on the margin I think guide guidance here is up nearly 400 basis points at the midpoint.
Speaker Change: The 11% revenue growth. So I think a lot of this is operating leverage but Don I guess, maybe if you could help sort of flesh out how much is operating leverage how much is from efficiencies. If you could kind of contrast, the tariffs you could.
Speaker Change: Yeah. So on the on the gross margins, we are expecting 100 to 200 basis point.
Speaker Change: Increase in margins.
Speaker Change: That's that's certainly driven by the strong demand that we that that.
Speaker Change: That we saw and the leverage that we have in the business and we expect to continue to see that and you've heard me talk over the past couple of years about making sure that we continue.
Speaker Change: To see that strong.
Speaker Change: To maintain that strong leverage and then on the SG&A side look we've talked about being disciplined right. We talked about how we are able to grow the business. This year without adding more marketing spend without adding more enrollments been showing discipline around that without adding some additional head count. So it is a combination of the flow through that we.
Speaker Change: See all the time based on the gross margin perspective, but also.
Speaker Change: On the SG&A, which is driving DIY that was saying.
Speaker Change: Okay great.
Speaker Change: My last one I think this could be helpful for a lot of the investors maybe talk about why the public financials of some of the nonprofit schools that you manage.
Speaker Change: Why those don't necessarily line up with what flows to you why there can be differences.
Speaker Change: And maybe more specifically why some of those nonprofits could take as their funding and why that wouldn't necessarily go to you and what those could be used for I think that could be helpful. Here.
Speaker Change: Yes.
Speaker Change: I'm not going to speak on behalf of all of our clients I think that's good that's a very responsible thing for us to be doing I'll speak for what we do and how we do it and.
Speaker Change: I have great respect for how our clients manage what they do in.
Speaker Change: Let them speak for themselves but.
Speaker Change: I think that whatever our clients do we want to be supportive of their mission and their goals.
And and.
Speaker Change: Indirectly it means that we're supporting the students that want to be participating in these programs and so.
Speaker Change: The rest of that stuff you know like what our clients are doing I mean first of all we have no provenance over that and so it's not like we have an ability to even always had insight into how they make all those decisions those are proprietary to them and I'd, rather leave it to them to describe.
Speaker Change: Alright fair enough. Thank you.
Speaker Change: And next step is Alex Paris Barrington research.
Speaker Change: Yeah.
Alex Paris: Hey, guys. Thanks for taking my questions congratulations on the Super strong quarter.
Alex Paris: Yeah.
Alex Paris: I'm wondering in terms of your guidance Donna for fiscal 2025 have you embedded in that any expectations for new states or states in which you have caps that may be where we'll be lifted or raised.
We have not factored in any any new states.
Alex Paris: We have some.
Speaker Change: Increases in some caps that's already factored into the results that we have in Q1 as well as for the full year.
Speaker Change: But the overriding factor that is driving our revenue is as James said the demand that we're seeing and so we are able to meet the demand with our ability to execute.
Speaker Change: Our marketing enrollment, but it really is us being able to capture the demand that's in the marketplace.
Speaker Change: Great. Thanks for that and then.
Speaker Change: And then looking at the two programs General education, and our career learning.
Speaker Change: I think last fall you.
Speaker Change: You had 91 G in 56 career learning.
Speaker Change: Do you anticipate opening up additional career learning programs in existing states in fiscal 'twenty five.
Speaker Change: We have we have the same number of programs. This year that we did last year.
Speaker Change: In terms of our career learning programs in total.
Speaker Change: Okay. The idea and do you envision opening up additional career learning programs this year or next year.
Speaker Change: Not for this fiscal year.
Speaker Change: I do think that there is a chance we might open a couple next year.
Got you.
Speaker Change: And then last question and it's a follow up on some of the other questions regarding essar, but how do the essar funds come to stride. It's my understanding that that they've largely been used by school districts.
Speaker Change: Within your learning solutions business is that accurate.
Speaker Change: Okay.
Speaker Change: Like I say that.
Speaker Change: Really it's tough for us to be able to answer how as their funds go to all of our partners.
Speaker Change: Clients because.
Speaker Change: That's something that they manage that they are responsible for.
Speaker Change: What we know is is that.
Speaker Change: During the time that Essar was in place certainly there are some of our clients who made the decision to support programs that we provided that.
Speaker Change: We are eligible for those funds.
Speaker Change: But.
Speaker Change: It's sort of I don't know I would say it's sort of.
Beside the pointed at this time because for this fiscal year.
Speaker Change: As there is in the rearview mirror.
Speaker Change: And we've got tremendous demand for the business that we're running.
Speaker Change: And.
Speaker Change: And Thats you know with US are in the rearview mirror. So I think we set ourselves up well from here to grow.
Speaker Change: And and that's with all of that in the rearview mirror. So I think I think I want this company to stay focused on this year, which doesn't really have the essar benefit in it.
Speaker Change: And moving forward from there.
Speaker Change: Got you not only does it not have yes or benefit it has a little bit of a headwind on a year over year basis, you had previously said.
Speaker Change: Less than one 5% of revenue would be the impact in fiscal 'twenty five is that still a good good thought.
Speaker Change: Yeah brand. So so yes year over year, it would be as you define either a headwind correct.
Speaker Change: Got you, but that will be largely offset by state funding increases and mix. So were expecting flat to slightly down revenue per enrollment for the full year just to clarify.
Speaker Change: That is correct.
Speaker Change: Great. Thank you both congratulations again.
Speaker Change: Thank you.
Speaker Change: Next we'll hear from Tom single Horse City.
Speaker Change: Okay.
Speaker Change: Yes, Thank you for taking the question.
Speaker Change: And congrats on the results.
Speaker Change: I mean, our policy is talking about as well, but I'm interested in any second order impact.
Speaker Change: From reduced asset funding I see I'm thinking about this on the positive side. I mean is that is that all of that program that would it be.
Speaker Change: School districts will schools internally that now might be outsourced.
Speaker Change: So on that would be very much appreciated.
Speaker Change: Thanks, Chris.
Speaker Change: Yes, I don't know that I see any second order impact of that nature, having any material or significant impact on our business for this year.
Speaker Change: And again I just.
Speaker Change: Hi.
Speaker Change: I don't want us I don't want to guess how district clients out there either have or are using or intend to use any remaining as our funds as it pertains to us.
Speaker Change: So I don't really have a lot of comment there.
Speaker Change: Okay.
Second question, if that's okay.
Speaker Change: On.
Speaker Change: You've seen continue expect to continue.
Speaker Change: Intra year enrollment growth in the last couple of years.
Speaker Change: How does the new normal where the.
The one <unk> enrollment numbers.
Speaker Change: High watermark. It happened later in the year I'm interested in whether you think that.
Speaker Change: Again.
Speaker Change: In two.
2025.
Speaker Change: Yes, it's a great question.
Speaker Change: As I said, we continue to see strong demand.
Speaker Change: I don't know if it's a new normal yet, but it has been two years running as you said.
Speaker Change: I can tell you that as of yesterday.
Speaker Change: I havent looked yet today, but as of yesterday, we can continue to see that strong demand come through.
Speaker Change: So we are as of yesterday higher than we were as of September 30th.
Speaker Change: And.
Speaker Change: If the trend continue yes, I think we would expect that but.
Speaker Change: But I don't think we're guiding to that and we're not indicating that right just yet we want some more of this in year periods to.
Speaker Change: To mature for us to feel comfortable where we're only three weeks into this in year period. So I don't know that its a complete set of information for us to be making those statements yet, but like I said 21 days in <unk>.
Speaker Change: <unk> remained strong.
Speaker Change: Okay.
No.
Speaker Change: Yeah.
Speaker Change: Kathleen.
Speaker Change: The guidance reflects that.
Speaker Change: Certainly taken into account what's happened in the past two years, but also take into account that we only have two years behind us right. So with the balance of what's happened over the past two years, but not ignoring what's happened over the past 23 years right and so it's a balance of it but to joint James is point, what we've seen today, there is more upside and so the full benefit of it.
Speaker Change: Not been taken into account, but again, we're only we're still in the month of October and that number could change and so there could be some more upside, but again, we don't know what that trend will look like for the rest of the year. So the three years and it's not quite yet a trend.
Okay.
Speaker Change: Final one I promise.
Speaker Change: Any change to the 2028 outlook guidance on the back of today we're.
Speaker Change: We're not providing any update to the 2028 today.
Speaker Change: Other than saying that we feel confident about 2028 numbers that as I've said in my prepared remarks, and we are reiterating our confidence in our 2020 guidance.
Speaker Change: Thank you.
Speaker Change: As a reminder that is star one to ask a question. We'll go next to Stephen Sheldon William Blair.
Stephen Sheldon: Hi team you've kept Pat mckelvey on for your Sheldon team today.
Stephen Sheldon: Just a couple of quick ones here. So you talked about the demand side a few times now, but can you just talk us through what supported the outsized growth in career learning this.
This quarter and if you've made any progress in building out that kind of separate marketing funnel you've talked about in the past there.
Speaker Change: Yes really good question.
So I think I'll take that second part first and then circle back on the first part.
Speaker Change: Unfortunately, I don't think we've made a lot of progress in building out the separate funnel. So.
It's something we continue to work on.
Speaker Change: I think for all the great work that the marketing team has done over the past year or so.
Speaker Change: That's one area, where I think we still haven't cracked the nut and we continue to look at ways to do that.
Speaker Change: But.
Speaker Change: The first part of your question you have to remember that pretty much now at this point.
Speaker Change: Most of our high school is basically a career program.
Speaker Change: And so.
Speaker Change: The growth in career learning is in some respects a proxy for the growth in certain grade levels.
Speaker Change: And so we're seeing a lot of <unk>.
Speaker Change: Strong demand in in those great levels that support career learning.
Speaker Change: <unk>.
Speaker Change: And I think that that's been a trend that we've seen for some period of time.
Speaker Change: And so we're going to continue to support all the grades, but but we are seeing a little bit stronger demand in certain grade levels that really.
Speaker Change: Cater to the career learning.
Speaker Change: Programs that we have.
Speaker Change: Okay makes sense and then in tandem to the questions on the elections.
Speaker Change: In Korea learning program expansion as well, you've previously talked about opening schools and hopefully a handful of new states from $25 26.
Speaker Change: Can you just provide any updated thoughts on state expansion targets at this point in time.
Speaker Change: Yeah listen.
Speaker Change: It's.
Speaker Change: Any state expansion is.
Speaker Change: A multi year effort that has a lot of uncertainty to it.
Speaker Change: We.
Speaker Change: Of course want to plant flags in every state that we're not currently in.
Speaker Change:
Speaker Change: Okay.
Speaker Change: As long as it makes sense for the business right.
Speaker Change: And and they are probably a couple of cases, where it actually just doesn't make sense because of whatever the regulatory environment demand characteristics, whatever but by and large you know for most of at least the states that were not in.
Speaker Change: We have efforts underway that look to expand into those states.
Speaker Change: I think as we diversify some of our portfolio, whether it's things like tutoring or other things, we see that there's opportunities potentially plant flags in those states that may not include just the pure.
Speaker Change: Core managed program and so we're looking to do things in a lot of state that may not just be around the core managed program. But may include some other types of products and services that we can provide of course to the extent that we can.
Speaker Change: Breakdown and get into disease states that don't have this.
Speaker Change: The full time online programs, we're trying to do that as well.
Speaker Change: But like I said, no new news to report for this fiscal year.
Speaker Change: We are cautiously optimistic that over the next.
Speaker Change: Couple of few years.
Speaker Change: We will be able to make some progress on some new states.
Speaker Change: That's great. Thanks for the color James.
<unk>.
Speaker Change: And at this time there are no further questions that does conclude our conference for today. Thank you all for your participation you may now disconnect.
[music].
Speaker Change: Okay.
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Speaker Change: Yeah.
Speaker Change: Sure.
Speaker Change: [music].
Speaker Change: Yes.