UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549

 FORM 8-K

 CURRENT REPORT

 Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 
Date of Report (Date of Earliest Event Reported):
 
January 20, 2021
 

 
Stride, Inc.
 
 
(Exact name of registrant as specified in its charter)
 

Delaware
 
001-33883
 
95-4774688
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)

2300 Corporate Park Drive,
Herndon, Virginia
 
20171
(Address of principal executive offices)
 
(Zip Code)

Registrant’s telephone number, including area code:
 
(703) 483-7000

 

 
 
Former name or former address, if changed since last report
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, $0.0001 par value per share
LRN
New York Stock Exchange (NYSE)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02
Results of Operations and Financial Condition.
 
On January 26, 2021, Stride, Inc. (the “Company”) issued a press release announcing its financial results for the second fiscal quarter ended December 31, 2020. A copy of the Company’s press release is furnished herewith as Exhibit 99.1.
 
The information contained in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Item 2.02, including Exhibit 99.1, shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of  Certain Officers; Compensatory Arrangements of Certain Officers.
 
On January 20, 2021, Nathaniel A. Davis, Chairman of the Board of Directors and Chief Executive Officer of the Company, notified the Company’s Board of Directors (the “Board”) that he will resign from his position as Chief Executive Officer, effective January 26, 2021. Mr. Davis will continue to serve as Executive Chairman of the Company, effective January 26, 2021. In connection with his resignation as Chief Executive Officer, the Company and Mr. Davis entered into a fourth amendment to Mr. Davis’ employment agreement on January 22, 2021 (the “Amendment”), which provides for his continued service as Executive Chairman of the Company and a reduction in his annual base salary from $935,000 to $500,000, effective January 26, 2021.
 
On January 20, 2021, the Board appointed James Rhyu to succeed Mr. Davis as Chief Executive Officer, effective January 26, 2021. Mr. Rhyu, age 51, joined the Company in June 2013 as Executive Vice President and Chief Financial Officer and currently serves as President, Corporate Strategy, Marketing and Technology. Prior to joining the Company, Mr. Rhyu served as Chief Financial Officer and Chief Administrative Officer of Match.com, a subsidiary of publicly traded IAC/InterActiveCorp, since June 2011. In those roles, he was responsible for overseeing a broad range of functions, including finance, human resources, legal, information technology and operations, certain international operations and product development. Prior to his roles at Match.com, Mr. Rhyu was a Senior Vice President of Finance at Dow Jones & Company from January 2009 to May 2011, where he ran the global financial function. Previously, Mr. Rhyu served for three years as the Corporate Controller of Sirius XM Radio Inc. and its predecessor company, XM Satellite Radio, as well as serving in the same role for Graftech International. Mr. Rhyu also served six years as an auditor with Ernst & Young LLP in the United States and South America. Mr. Rhyu holds a B.S. from the Wharton School of Business at the University of Pennsylvania and an M.B.A. from the London Business School.
 
In connection with his appointment as Chief Executive Officer, on January 22, 2021, the Company entered into a letter agreement with Mr. Rhyu, effective January 26, 2021 (the “Letter Agreement”), pursuant to which Mr. Rhyu will serve as Chief Executive Officer and receive an annual base salary of $700,000 and will have a target award level under the Company’s annual cash bonus plan equal to 150% of his annual base salary. In addition, in connection with his appointment as Chief Executive Officer, Mr. Rhyu will receive a restricted stock award under the Company’s 2016 Incentive Award Plan valued at $1,500,000. The award will be divided equally between time-based and performance-based restricted stock, which will vest pursuant to the terms of the Company’s standard time- and performance-based restricted stock award agreements.  Mr. Rhyu is also entitled to annual awards under the Company’s equity incentive award plans and programs as in effect from time to time.
The Letter Agreement provides that, in the event that Mr. Rhyu’s employment is terminated by the Company without cause or Mr. Rhyu resigns for good reason, Mr. Rhyu will be entitled to receive, subject to his signing and not revoking a general release of claims, (i) continued payment of his annual base salary for a period of 24 months (the “Severance Pay”); (ii) any earned but unpaid annual bonus for the year preceding the year of termination, payable as soon as practicable after the date of termination; and (iii) a prorated annual bonus for the year of termination based on actual performance for the year and payable at the same time annual performance bonus payments are made to other senior executives of the Company (the “Pro Rata Bonus”).
 
In the event that Mr. Rhyu’s employment is terminated by the Company without cause or Mr. Rhyu resigns for good reason, in either case, within two years following a change in control of the Company, Mr. Rhyu will be entitled to receive, subject to his signing and not revoking a general release of claims, the severance payments and benefits described above except that (i) the Severance Pay shall be paid in a single lump sum as soon as practicable after the date of termination; (ii) the Pro Rata Bonus shall be based on Mr. Rhyu’s target annual bonus amount and paid as soon as practicable after the date of termination; and (iii) all unvested equity or equity-based awards granted under any equity compensation plans of the Company shall immediately become 100% vested, provided that, unless a provision more favorable to Mr. Rhyu is included in an applicable award agreement, any such awards that are subject to performance-based vesting conditions shall only be payable subject to the attainment of the performance measures for the applicable performance period as provided under the terms of the applicable award agreement. The Letter Agreement supersedes the terms of Mr. Rhyu’s prior Executive Change in Control Severance Agreement with the Company.
 
The foregoing descriptions of the Amendment and the Letter Agreement are qualified in their entirety by the full text of the Amendment and the Letter Agreement, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and incorporated herein by reference.
 
Also, on January 20, 2021, the Board increased the size of the Board to eleven directors and appointed Mr. Rhyu, to fill the newly created vacancy, effective January 26, 2021, and to serve until the Company’s 2021 annual meeting of stockholders or until his successor is duly elected and qualified. Mr. Rhyu was not appointed to serve on any committees of the Board. As an executive officer of the Company, Mr. Rhyu will not receive any additional compensation in connection with his service on the Board.
 
Item 7.01
Regulation FD Disclosure.
 
On January 26, 2021, the Company issued a press release announcing the appointment of Mr. Rhyu as Chief Executive Officer. A copy of the Company’s press release is furnished herewith as Exhibit 99.2.
 
The information contained in this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in this Item 7.01, including Exhibit 99.2, shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 9.01
Financial Statements and Exhibits.
 
(d)          Exhibits
Exhibit
No.
 
Description
 
     
 
     
 
     
 
     
104
 
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
Stride, Inc.
 
 
 
 
 
 
Date:  January 26, 2021
By:
/s/ Vincent W. Mathis  
 
 
Name:
Vincent W. Mathis
 
 
 
Title:
Executive Vice President, General Counsel and Secretary

Exhibit 10.1




Re: Fourth Amendment to Second Amended and Restated Employment Agreement

 
Dear Mr. Davis:

Reference is made to (i) that certain Second Amended and Restated Employment Agreement (the “Agreement”), dated as of January 27, 2016, by and between you and Stride, Inc., a Delaware corporation, formerly known as K12 Inc. (the “Company”), which sets forth the terms and conditions of your employment with the Company, (ii) that certain letter agreement dated as of April 20, 2018 between you and the Company (the “First Amendment”), which modified certain provisions of the Agreement, (iii) that certain letter agreement dated as of August 29, 2019 between you and the Company (the “Second Amendment”), which modified certain provisions of the Agreement and the First Amendment, and (iv) that certain letter agreement dated as of June 10, 2020 between you and the Company (the “Third Amendment”), which modified certain provisions of the Agreement, the First Amendment and the Second Amendment. Capitalized terms not defined in this letter (the “Letter”) shall have the meanings assigned to them in the Agreement.
 
This Letter confirms the agreement between you and the Company to modify the terms of the Agreement as follows:

1.
Effective as of January 26, 2021 (the “Transition Date”), the Company shall continue to employ you as its Executive Chairman and you will no longer serve as the Company’s Chief Executive Officer.

2.
Effective as of the Transition Date, your annual Base Salary is decreased to $500,000.

3.
As provided in the Agreement, your target annual Performance Bonus will remain at 150% of Base Salary (and not more than 300% of Base Salary). For the Company’s 2021 fiscal year, the target amount of your Performance Bonus shall be pro-rated, taking into account your Base Salary in effect for the partial year prior to the Transition Date.

4.
Beginning with the Company’s 2022 fiscal year, your target level for awards under the Company’s equity incentive award plan will be in a range to be determined based on good faith negotiations between you and the Board or the Compensation Committee.

5.
This Letter is not intended to impact any outstanding equity compensation awards of the Company that were previously granted, which awards will continue to be eligible to vest in accordance with their terms while you serve as Executive Chairman and otherwise remain unchanged and in effect in accordance with their terms.


 



6.
You agree that neither you are no longer serving as the Company’s Chief Executive Officer as of the Transition Date nor any of the changes to your compensation or other terms and conditions of employment as provided for under this Letter shall constitute “Good Reason” under the Agreement.

7.
The following language is hereby stricken and deleted from the Agreement and the Third Amendment: “In addition, the Agreement is hereby amended to provide that in the event any Company Named Executive Officer’s employment terms are changed so as to provide better terms and conditions of employment than those in the Agreement, you shall receive those same improved terms and conditions of employment.”

Except as expressly modified by this Letter, the Agreement (as modified by the First Amendment, the Second Amendment and the Third Amendment), the First Amendment (as modified by the Second Amendment and the Third Amendment), the Second Amendment (as modified by the Third Amendment) and the Third Amendment shall remain unchanged and shall continue in full force and effect according to their terms. This Letter, together with the Agreement, the First Amendment, the Second Amendment and the Third Amendment, constitutes the entire agreement between you and the Company, and expressly supersedes all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein. The Company will pay or reimburse your reasonable attorneys’ fees incurred in connection with the review and execution of this Agreement.
 
Thank you for your continued service to the Company.

 
Sincerely,
 
 
 
 
 
DocuSigned by:
 

 
Name: Robert E. Knowling, Jr.
 
Title: Chairman of the Compensation Committee of the Board of Directors of Stride, Inc.
 
 
 
 
Agreed and Accepted:
 
 
 
 
 
DocuSigned by:
 
 
Nathaniel A. Davis  


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Exhibit 10.2



January 22, 2021

Mr. James Rhyu

Dear James:

It gives me great pleasure to offer you employment as the Chief Executive Officer of Stride, Inc., a Delaware corporation (the “Company”). You will transition to the role of Chief Executive Officer effective as of January 26, 2021 (the “Effective Date”). Once countersigned by you, this letter shall constitute a binding agreement (the “Agreement”) between you (the “Executive”) and the Company, effective as of the date of this letter set forth above.

1.          Employment. The Company hereby employs Executive on the terms and conditions set forth in this Agreement and Executive hereby accepts such employment. Executive shall serve as the Chief Executive Officer of the Company and report to the Company’s board of directors (the “Board”). Executive shall perform such duties and have such responsibilities as are normally commensurate with Executive’s position, including such other duties as are reasonably assigned to Executive from time to time. Executive agrees that the Company shall be his exclusive employer and Executive shall devote his full business time to performing Executive’s responsibilities under this Agreement.
 
2.          Salary. Effective as of the Effective Date, Executive’s base salary shall be $700,000 annually (the “Base Salary”), subject to standard payroll deductions. The Base Salary shall be paid on the Company’s regular payroll dates in accordance with the Company’s normal payroll practices. Executive’s Base Salary shall be reviewed annually, and the Board or its compensation committee (the “Compensation Committee”) shall determine, in their sole and absolute discretion, whether to grant Executive any increases to the Base Salary based on the performance of Executive and the Company.
 
3.          Performance Bonus. Executive will be eligible to receive an annual end of fiscal year bonus (the “Performance Bonus”) with a target equal to one hundred fifty percent (150%) of the Executive’s Base Salary. For the Company’s 2021 fiscal year, the target amount of Executive’s Performance Bonus shall be pro-rated, taking into account the Executive’s base salary and target bonus level in effect for the partial year prior to the Effective Date. Actual bonus payments may vary (above or below target) based on the overall performance of the Company, including Company performance metrics to be determined by the Board or Compensation Committee, the successful completion of the Executive’s personal performance goals and objectives and the discretion of the Board or Compensation Committee. Payment of any amount is conditioned upon your employment with the Company on the scheduled payroll date when bonus payments are issued.


 





Any Performance Bonus shall be paid in accordance with the terms of the Company’s bonus plan, but in any event within the period required by Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) such that it qualifies as a “short-term deferral” pursuant to Treasury Regulation Section 1.409A-1(b)(4).

4.          Annual Equity Incentive Awards. During Executive’s employment as Chief Executive Officer, Executive will be eligible to participate in and will receive awards under the Company’s equity incentive award plans and programs as in effect from time to time at a level and on terms commensurate with his position as Chief Executive Officer (“Ongoing Equity Awards”). Ongoing Equity Awards are currently granted on an annual basis at or near the beginning of each fiscal year of the Company, in each case as determined by the Board or the Compensation Committee of the Board, and are expected to be granted in the form of performance-based restricted stock, restricted stock units or similar awards, in each case as determined by the Board or the Compensation Committee of the Board in their discretion from time to time. For the avoidance of doubt, all equity compensation awards are subject to approval by the Board on an annual basis or otherwise at the time of grant. This Agreement is not intended to impact any outstanding equity compensation awards that were previously granted, which awards remain unchanged and in effect in accordance with their terms.
 
5.          One-Time Stock Award. Upon or as soon as practicable after the Effective Date, the Company will grant Executive a one-time award of restricted stock under the Company’s 2016 Incentive Award Plan (the “Plan”), having a value as of the grant date of $1,500,000 (the “One-Time Stock Award”). 50% of the One-Time Stock Award (the “Time-Based Portion”) will be subject to time-based vesting in semi-annual installments following the Effective Date with 20% of the shares vesting in the first year following the Effective Date and 40% of the shares vesting in each of the next two years following the Effective Date. The remaining 50% of the One-Time Stock Award (the “Performance- Based Portion”) will be eligible to vest based on the Company’s attainment of a financial performance metric to be determined by the Board or Compensation Committee at the time of grant for a calendar year 2021 performance period. The Performance-Based Portion will be subject to (i) a threshold performance level, at which 80% of the shares subject to the Performance-Based Portion would be earned, (ii) a target performance level, at which 100% of the shares subject to the Performance-Based Portion would be earned, and (iii) a maximum performance level, at which 133% of the shares subject to the Performance-Based Portion would be earned. Any shares considered earned in respect of the Performance-Based Portion will vest in three equal annual installments with the first installment vesting on the one-year anniversary of the Effective Date. The One-Time Stock Award will be subject to the terms and conditions of the Company’s standard form of restricted stock award agreements for Company executives.
 
6.          Personal Time Off. Executive shall be entitled to vacation and personal time off in accordance with the Company’s policy, which is subject to change or deletion at the discretion of the Company.


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7.          Expenses. During Executive’s employment, the Company shall reimburse Executive for reasonable travel, business entertainment, and other business expenses incurred in the performance of Executive’s duties, upon presentation of supporting documentation, in accordance with and subject to all Company policies, including any bring-your-own-device or similar policy.
 
8.          Benefits. Executive will be eligible to participate in such health, welfare and retirement benefit plans as may be adopted from time to time by the Company on the same basis as similarly situated employees, including participation in any senior-level executive benefit plans that may be adopted by the Company. Executive’s participation shall be subject to: (i) the terms of the applicable plan documents; (ii) generally applicable Company policies; and (iii) the discretion of the Board or any administrative or other committee provided for in, or contemplated by, such plan or programs. These plans and programs are subject to change or deletion at the discretion of the Company. In addition, the Company will pay or reimburse Executive’s reasonable attorneys’ fees incurred in connection with the review and execution of this Agreement.
 
9.           Holidays. Executive will be eligible for paid holidays in accordance with the Company’s holiday policy and schedule, as may be amended by the Company from time to time at the sole discretion of the Company.
 
10.         Employment at Will: Termination.
 
10.1.     Employment at Will. Executive’s employment with the Company will be on an “at will” basis, meaning that Executive’s employment is not for a specified period of time and can be terminated by Executive or the Company at any time, with or without cause, and with or without notice.
 
10.2.     Termination by Company for Cause. The Company may terminate this Agreement at any time, effective immediately, for Cause, which shall be defined as: (i) a Willful and continued material failure to perform Executive’s duties under this Agreement in a satisfactory manner (other than as a result of total or partial incapacity due to physical or mental illness or Disability, as defined in Section 10.3 below), where Willful means, when applied to any action or omission made by Executive, that Executive did so without a good faith belief that such action or omission was in, or was not contrary to, the best interests of the Company; (ii) acts of dishonesty, fraud, embezzlement, misrepresentation, and misappropriation involving the Company or any of its affiliates; (iii) unprofessional conduct which may adversely affect the reputation of the Company and/or its relationship with its customers, employees or suppliers ; and (iv) a conviction of, or entry of a guilty plea or no contest to, any crime involving moral turpitude or dishonesty (collectively “Cause”). In the event of termination of this Agreement for Cause, Executive shall immediately be paid all accrued Base Salary and any reasonable and necessary business expenses properly incurred by Executive in connection with the duties hereunder, all through the date of termination. All stock options held by Executive shall expire at the date of termination for any of the above-enumerated reasons to terminate for Cause. In addition, the parties’ obligations hereunder, except as set forth in the Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement (as defined below), Agreement to Arbitrate (as defined below), and Sections 10, 11 and 12 of this Agreement, shall terminate.


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10.3.     Termination upon Disability or Death. Executive’s employment with the Company shall terminate upon the Disability or death of Executive. In the event of such termination, the Company shall pay to Executive any unpaid compensation to the extent earned and payable as of the date of termination. As used herein, the term “Disability” means a physical or mental disability that renders Executive unable to perform Executive’s normal duties for the Company for a period of ninety (90) or more days as determined in the good faith judgment of the Compensation Committee or the Board. If Executive disagrees with the good faith determination of Disability, the matter shall be submitted to arbitration pursuant to the Agreement to Arbitrate, which is incorporated herein by reference as provided in Section 11.1 of this Agreement.
 
10.4.     Termination by Company without Cause. The Company may terminate Executive’s employment and this Agreement at any time, effective immediately, without Cause. In the event that the Company terminates Executive’s employment and this Agreement without Cause, Executive shall be paid immediately (except as noted) all accrued Base Salary and any reasonable and necessary business expenses properly incurred by Executive in connection with Executive’s duties hereunder, all through the date of termination, as well as, provided that such termination of employment constitutes a “separation from service” with the Company as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto (a “Separation from Service”), the severance pay set forth in Section 10.6 or Section 107, as applicable, below. In addition, the parties’ obligations hereunder, except as set forth in the Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement, Agreement to Arbitrate and Sections 10, 11 and 12 of this Agreement, shall terminate.
 
10.5.     Termination by Employee. In the event of termination of this Agreement by Executive other than for Good Reason (as defined in Section 10.5.1 below), Executive shall not be entitled to any salary, bonus, benefits, severance pay or other remuneration after the effective date of termination. In addition, the parties’ obligations hereunder, except as set forth in the Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement, Agreement to Arbitrate and Sections 10, 11 and 12 of this Agreement, shall terminate.
 
10.5.1.   Resignation for Good Reason. In the event that Executive resigns his or her employment and terminates this Agreement for Good Reason, then, provided that such resignation constitutes a Separation from Service, Executive shall be entitled to the severance pay set forth in Section 10.6 or Section 10.7, as applicable, below. In addition, the parties’ obligations hereunder, except as set forth in the Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement, Agreement to Arbitrate and Sections 10, 11 and 12 of this Agreement, shall terminate. Good Reason shall be defined as the occurrence of any of the following events or conditions without Executive’s written consent:

 (i)     a material diminution in Executive’s authority, duties or responsibilities;


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 (ii)    a material diminution in Executive’s base salary or target annual bonus level; 
 
 (iii)   a material change in the geographic location at which Executive must perform his or her duties, which shall not include a relocation of Executive’s principal place of employment to any location within a fifty (50) mile radius of the location from which Executive served the Company immediately prior to the relocation;
 
 (iv)   a material breach of this Agreement by the Company or the failure of the Company to obtain an agreement from any successor to the Company in a Change in Control (as defined below) to assume and agree to perform this Agreement. 

Executive must provide written notice to the Company of the occurrence of any of the foregoing events or conditions within ninety (90) days of the occurrence of such event or the date upon which Executive reasonably became aware that such an event or condition had occurred. The Company or any successor or affiliate shall have a period of thirty (30) days to cure such event or condition after receipt of written notice of such event from Executive. Any voluntary termination for “Good Reason” following such thirty (30) day cure period must occur no later than the date that is six (6) months following the date notice was provided by Executive.

10.6.     Effect of Termination (Severance Pay). Upon termination of Executive’s employment and this Agreement by the Company without Cause pursuant to Section 10.4 or by Executive for Good Reason pursuant to Section 10.5.1 above, and provided that such termination constitutes a Separation from Service and provided further that Executive executes and does not revoke a general release of claims satisfactory to the Company within thirty (30) days following the date of termination, Executive shall be entitled to; (1) twenty-four (24) months of severance pay at the then-existing Base Salary (the “Severance Pay”), (2) an amount equal to any accrued and earned annual bonus for the completed fiscal year immediately preceding the date of termination that has been declared by the Compensation Committee but not yet paid as of the date of termination, payable as soon as practicable after the date of termination and (3) a pro-rated annual bonus for the year of termination, payable based on actual performance (as determined by the Board or Compensation Committee in good faith) after the end of the fiscal year in which the termination date occurs and at the same time as annual performance bonus payments are made to other senior Company executives (the “Pro Rata Bonus”). The Severance Pay shall be payable in equal installments at the same time and in the same manner as such Base Salary had been paid prior to such termination; provided that any payments required to be made prior to the thirtieth (30th) day following the date of termination of employment (the “First Pay Date”) shall be paid in a single lump sum on the first regularly scheduled payroll date on or following the First Pay Date. For purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b) (iii)), each payment that Executive may be eligible to receive under this Agreement shall be treated as a separation and distinct payment.
 
10.7       Change in Control. Executive acknowledges that he has previously entered into that certain Executive Change in Control Severance Agreement with the Company (the “CIC Agreement”).


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Executive and the Company further agree that this Agreement shall supersede and replace the CIC Agreement and that from and after the Effective Date, the CIC Agreement shall be null and void ab initio. Executive and the Company further agree that in the event Executive’s employment is terminated by the Company without Cause pursuant to Section 10.4 or by Executive for Good Reason pursuant to Section 10.5.1 above, in either case within two years after the date of a Change in Control, then Executive shall receive the same severance benefits as are set forth in Section 10.6 above and subject to the same requirement to sign and not revoke a general release of claims; provided, however, that (i) Severance Pay shall be paid in a single lump sum as soon as practicable after the date of termination, (ii) the Pro Rata Bonus shall be based on Executive’s target annual bonus amount and paid as soon as practicable after the date of termination, and (iii) all unvested equity or equity-based awards granted under any equity compensation plans of the Company shall immediately become 100% vested, provided that, unless a provision more favorable to Executive is included in an applicable award agreement, any such awards that are subject to performance-based vesting conditions shall only be payable subject to the attainment of the performance measures for the applicable performance period as provided under the terms of the applicable award agreement. For purposes of this Agreement, “Change in Control” means:

 (i)     a transaction or series of transactions occurring after the Effective Date whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (other than the Company, any of its subsidiaries, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such transaction; or
 
 (ii)    the consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) after the Effective Date of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:
 
(A) which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (such person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and
 
(B) after which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided, however, that no person or group shall be treated for purposes of this paragraph as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.


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11.         Other Conditions of Employment.
 
11.1.     Employee Confidentiality, Proprietary Rights and Non-Solicitation; Agreement to Arbitrate; and Non-Competition. Executive’s acknowledges his prior execution of (i) that certain Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement (the “Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement”) and (ii) Agreement to Arbitrate (the “Agreement to Arbitrate”), each of which were executed by Executive in connection with his commencement of employment with the Company and its subsidiaries in 2013. Executive expressly acknowledges and agrees that the Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement and Agreement to Arbitrate remain in full force and effect in accordance with their terms and such agreements are expressly incorporated herein by reference. In addition, during the period in which Executive is receiving any compensation from the Company (including and no less than the severance period) and for a twelve-month period thereafter, Executive shall not engage in, or be employed by, a business or organization that renders the same or similar services as the Company or otherwise competes with the Company or its business. In applying this non-competition provision, the Company will not unreasonably withhold its consent for future employment with entities that are not direct competitors or offer substantially the same or similar services as the Company.
 
11.2.      Policies and Procedures. Executive’s employment is subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.
 
12.         Miscellaneous.
 
12.1       Entire Agreement. The terms described in this Agreement, together with the Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement, and Agreement to Arbitrate, both incorporated herein by reference, set forth the entire understanding between Executive and the Company, and supersede any prior representations or agreements, whether written or oral, with respect to the subject matter hereof, including, without limitation, the CIC Agreement and that certain employment offer letter agreement dated May 1, 2013 entered into by Executive in connection with his initial commencement of employment with the Company. No term or provision of this Agreement may be amended waived, released, discharged or modified except in writing, signed by Executive and an authorized officer of the Company, except as otherwise specifically provided herein.
 
12.2.     Governing Law and Venue. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without reference to conflict of law principles. If any legal action is initiated by either party arising from or related to this Agreement, the parties agree to the exclusive jurisdiction of the courts of Fairfax County, Virginia.


- 7 -




12.3.     Successors. This Agreement shall be binding upon and shall inure to the benefit of the Company and its successors and assigns. In that this Agreement constitutes a non-delegable personal services agreement, it may not be assigned by Executive and any attempted assignment by Executive in violation of this covenant shall be null and void.
 
12.4.      Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby, and all such remaining provisions shall remain in full force and effect.
 
12.5.     Waiver. The failure of either party to insist on strict compliance with any of the terms of this Agreement will not be deemed to be a waiver of any terms of this Agreement or of the party’s right to require strict compliance with the terms of this Agreement in any other instance.
 
12.6.     Notices. All notices, demands, or requests provided for or permitted to be given pursuant to this Agreement must be given in writing, unless otherwise specified, and shall be deemed to have been properly given, delivered, or served by depositing the same in the United States mail, postage prepaid, certified or registered mail, with deliveries to be made to the following addresses:
 
If to Executive:
 
James Rhyu, at the address contained in the Company’s Human Resources records.
 
If to the Company:
 
Attn: General Counsel
Stride, Inc.
2300 Corporate Park Drive
Herndon, VA 20171
 
Either party may change such party’s address for notices as necessary by notice given pursuant to this Section.
 
13.         Captions. Section headings used in this Agreement are for convenience of reference only and shall not be considered a part of this Agreement.
 
14.        Amendments and Further Assurances. This Agreement may be amended or modified from time to time, but only by written instrument executed by all the parties hereto. No variations, modifications, or changes herein or hereof shall be binding upon any party except as set forth in such a written instrument. The parties will execute such further instruments and take such further action as may be reasonably necessary to carry out the intent of this Agreement.


- 8 -




15.         Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one instrument.
 
16.         Representations by Executive: Executive represents and warrants that:
 
(a)        Executive is free to enter into and perform each of the terms and conditions of this Agreement. Executive is not subject to any agreement, judgment, order or restriction that would be violated by Executive being employed by the Company or that in any way restricts the services that may be rendered by Executive for the Company. Executive’s execution of this Agreement and performance of Executive’s obligations under this Agreement does not and will not violate or breach any other agreement between Executive and any other person or entity. In addition, Executive has disclosed to the Company the educational and religious institutions to which Executive has made charitable contributions and donated his services prior to entering into this Agreement, and the Company has determined that a continuation of those activities after execution of this Agreement, absent a material change in the status of those institutions as they relate to the Company, is consistent with the Company’s Code of Business Conduct and Ethics.
 
(b)        Executive has carefully considered the nature and extent of the restrictions and covenants in this Agreement and Executive agrees that they will not prevent Executive from earning a livelihood after employment with the Company and that they are fair, reasonable and necessary to protect and maintain the proprietary interests, goodwill and other legitimate business interests of the Company in view of the following facts: (i) Executive will hold a position of confidence and trust with the Company as a result of Executive’s employment with the Company, access to confidential financial and other information, and relationship with the customers, suppliers and other employees of the Company, (ii) it would be impossible for Executive to be employed or engaged in a directly competitive business to that of the Company as described in Section 11.1 of this Agreement without inevitably using the Company’s proprietary information, and (iii) Executive has broad skills that will permit gainful employment in many areas and businesses outside the scope of the Company’s business.
 
(c)         Executive acknowledges that but for the above representations and warranties of Executive; the Company would not employ Executive or enter into this Agreement.
 
17.         Parachute Payments.
 
(i)          It is the objective of this Agreement to maximize Executive’s Net After-Tax Benefit (as defined herein) if payments or benefits provided under this Agreement are subject to excise tax under Section 4999 of the Code. Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit by the Company or otherwise to or for the benefit of Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (all such payments and benefits being hereinafter referred to as the “Total Payments”), would be subject (in whole or in part) to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the cash severance payments shall first be reduced, and the non-cash severance payments shall thereafter be reduced, to the extent necessary so that no portion of the Total Payments shall be subject to the Excise Tax, but only if the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments), is greater than or equal to the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).


- 9 -




(ii)         The Total Payments shall be reduced by the Company in the following order: (w) reduction of any cash severance payments otherwise payable to Executive that are exempt from Section 409A of the Code, (x) reduction of any other cash payments or benefits otherwise payable to Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to the acceleration of vesting or payments with respect to any equity award with respect to the Company’s common stock that is exempt from Section 409A of the Code, (y) reduction of any other payments or benefits otherwise payable to Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to the acceleration of vesting and payments with respect to any equity award with respect to the Company’s common stock that are exempt from Section 409A of the Code, and (z) reduction of any payments attributable to the acceleration of vesting or payments with respect to any other equity award with respect to the Company’s common stock that are exempt from Section 409A of the Code.
 
(iii)        All determinations regarding the application of this Section 3(g) shall be made by an accounting firm with experience in performing calculations regarding the applicability of Section 280G of the Code and the Excise Tax selected by the Company (“Independent Advisors”). For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (x) no portion of the Total Payments the receipt or enjoyment of which Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (y) no portion of the Total Payments shall be taken into account which, in the opinion of the Independent Advisors, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation and (z) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. The costs of obtaining such determination and all related fees and expenses (including related fees and expenses incurred in any later audit) shall be borne by the Company.


- 10 -




(iv)        In the event it is later determined that a greater reduction in the Total Payments should have been made to implement the objective and intent of this Section 3(g), the excess amount shall be returned immediately by Executive to the Company, plus interest at a rate equal to 120% of the semi- annual applicable federal rate as in effect at the time of the Change in Control.
 
18.         Section 409A.
 
(a)         Compliance. In the event that following the date hereof the Company or Executive reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A of the Code, the Company and Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A of the Code and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.
 
(b)        In-Kind Benefits and Reimbursements. Notwithstanding anything to the contrary in this Agreement, in-kind benefits and reimbursements provided under this Agreement shall be provided in accordance with the requirements of Treasury Regulation Section 1.409A-3(i)(iv), such that any in- kind benefits and reimbursements provided under this Agreement during any calendar year shall not affect in-kind benefits or reimbursements to be provided in any other calendar year, other than an arrangement providing for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and any in-kind benefits and reimbursements shall not be subject to liquidation or exchange for another benefit. Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Executive and, if timely submitted, reimbursement payments shall be promptly made to Executive following such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred. In no event shall Executive be entitled to any reimbursement payments after December 31st of the calendar year following the calendar year in which the expense was incurred. This paragraph shall only apply to in-kind benefits and reimbursements that would result in taxable compensation income to Executive.
 
(c)         Distribution. Notwithstanding anything to the contrary in this Agreement, to the maximum extent permitted by applicable law, amounts payable to Executive pursuant to Section 10.6 or 10.7 shall be made in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals). However, to the extent any payments are treated as non-qualified deferred compensation subject to Section 409A of the Code, then if Executive is deemed at the time of his Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the earlier of such dates, all payments deferred pursuant to this Section 17(c) shall be paid in a lump sum to Executive. Thereafter, payments will resume in accordance with this Agreement. The determination of whether Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of his Separation from Service shall be made by the Company in accordance with the terms of Section 409A of the Code and applicable guidance there under (including without limitation Treas. Reg. Section 1.409A-1(i)). This Agreement is intended to be written, administered, interpreted and construed in a manner such that no payment or benefits provided under the Agreement become subject to (a) the gross income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the interest and additional tax set forth within Section 409A(a)(1)(B) of the Code (together, referred to herein as the “Section 409A Penalties”), including, where appropriate, the construction of defined terms to have meanings that would not cause the imposition of Section 409A Penalties. In no event shall the Company be required to provide a tax gross-up payment to Executive or otherwise reimburse Executive with respect to Section 409A Penalties.


- 11 -





Please acknowledge your acceptance of employment by signing the enclosed copy of this letter and returning it to me as soon as possible. Should you have any questions, please feel free to contact me.

Sincerely,

DocuSigned by:
 
 
Nathaniel A. Davis, Executive Chairman  





[Countersignature Page Follows]


- 12 -




Agreed and Accepted:
 
 
 
 
 
DocuSigned by:
 
 
James Rhyu  
   
Date: 1/22/2021
 













- 13 -

Exhibit 99.1

Stride, Inc. Announces Second Quarter Revenues Increased 46% to $376.1 Million

Total Enrollments of 191.5 Thousand, up nearly 60% Year-over-Year

HERNDON, Va.--(BUSINESS WIRE)--January 26, 2021--Stride, Inc. – formerly K12 Inc. (NYSE: LRN), one of the nation’s leading tech-enabled education companies, today announced its results for the second fiscal quarter ended December 31, 2020.

Financial Highlights for the Second Quarter Fiscal 2021 compared with the Second Quarter Fiscal 2020

  • Revenues of $376.1 million, compared with $257.6 million. The increase is due largely to increased enrollments.
  • Income from operations of $38.5 million, compared with $30.3 million.
  • Net income of $24.5 million, compared with $20.6 million.
  • Diluted net income per share of $0.60, compared with $0.52.
  • Cash and cash equivalents as of December 31, 2020 of $258.1 million, compared with $212.3 million as of June 30, 2020.
  • Adjusted operating income of $50.1 million, compared with $37.2 million. (1)
  • Adjusted EBITDA of $70.7 million, compared with $53.7 million. (1)

Second Quarter Fiscal 2021 Summary Financial Metrics



Three Months Ended December 31,


Change 2020 / 2019



2020


2019


$


%



(In thousands, except percentages)
Revenues

$

376,145


$

257,559


$

118,586


46.0

%

Income from operations

 

38,452


 

30,305


 

8,147


26.9

%

Adjusted operating income (1)

 

50,050


 

37,224


 

12,826


34.5

%

Net income

 

24,501


 

20,594


 

3,907


19.0

%

EBITDA (1)

 

61,613


 

47,534


 

14,079


29.6

%

Adjusted EBITDA (1)

 

70,687


 

53,711


 

16,976


31.6

%

Financial Highlights for the Six Months Ended December 31, 2020 Compared to the Six Months Ended December 31, 2019

  • Revenue of $747.1 million, compared with $514.7 million.
  • Income from operations of $50.5 million, compared with $10.9 million.
  • Net income of $37.2 million, compared with $10.9 million.
  • Diluted net income per share of $0.89, compared with $0.27.
  • Adjusted operation income of $73.1 million, compared with $24.1 million. (1)
  • Adjusted EBITDA of $109.9 million, compared with $57.0 million. (1)

Six Months Ended December 31, 2020 Summary Financial Metrics



Six Months Ended December 31,


Change 2020 / 2019



2020


2019


$


%



(In thousands, except percentages)
Revenues

$

747,105


$

514,680


$

232,425


45.2

%

Income from operations

 

50,516


 

10,917


 

39,599


362.7

%

Adjusted operating income (1)

 

73,059


 

24,101


 

48,958


203.1

%

Net income

 

37,167


 

10,864


 

26,303


242.1

%

EBITDA (1)

 

91,954


 

45,293


 

46,661


103.0

%

Adjusted EBITDA (1)

 

109,921


 

56,992


 

52,929


92.9

%

(1)


To supplement our financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), we also present non-GAAP financial measures including adjusted operating income, EBITDA and adjusted EBITDA. Management believes that these additional metrics provide useful information to our investors as an indicator of performance because they exclude stock-based compensation expense and the amortization of intangible assets. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.

Cash Flow and Liquidity

As of December 31, 2020, the Company’s cash and cash equivalents totaled $258.1 million, compared with $212.3 million reported at June 30, 2020. The increase in the cash balance is largely the result of the $348.3 million in proceeds the Company received from its issuance of convertible senior notes during the first quarter, partially offset by the use of $100 million to pay down its revolving credit facility and $72.8 million in cash used to acquire Tech Elevator and MedCerts.

Capital Expenditures

Capital expenditures for the six months ended December 31, 2020 were $23.6 million, a decrease of $2.7 million from the six months ended December 31, 2019 and comprised of,

  • $2.0 million on property and equipment,
  • $14.1 million on capitalized software development, and
  • $7.5 million on capitalized curriculum development.

Organization Announcement

The company today announced that Nathaniel (Nate) A. Davis is retiring from his role as Chief Executive Officer. He will remain active in the business as the Executive Chairman of Stride’s Board of Directors supporting the company’s strategy, public policy, and external relations initiatives. The Board of Directors has selected James J. Rhyu to replace Mr. Davis as Chief Executive Officer. “With a solid foundation and clear strategies in place, I believe this is the appropriate time for me to retire from my role as CEO,” said Nate Davis, Executive Chairman of the Board of Directors. “Having known James and the quality of his work for fifteen years, I have complete faith in his broad set of skills, which he’s developed through managing multiple functional areas both at Stride and throughout his career. He is the right person, at the right moment for this role.” Mr. Rhyu assumes the role of CEO from his current position as President of Corporate Strategy, Marketing, and Technology. During his eight-year tenure at Stride, Mr. Rhyu has also served as the company’s Chief Financial Officer and President of Product and Technology. With more than two decades of business experience, Mr. Rhyu brings significant strategic, financial management, and operational expertise to his new role.

Revenue and Enrollment Data

During the first quarter of fiscal year 2021, the Company revised its lines of revenue reporting into two categories:

a.


General Education - products and services that are predominantly focused on kindergarten through twelfth grade students for core subjects including math, English, science, and history to help build a common foundation of knowledge, and



 

b.


Career Learning - products and services that are focused on developing skills for students, in middle school through high school and adult learners, to enter careers in high-growth, in-demand industries—including information technology, business, and health services. Middle and high school students also take general education courses per state standards in addition to coursework in career pathways.

The Company believes that the change in the lines of revenue will facilitate a better understanding of its business strategy and the markets in which the Company competes. Additional information on the new lines of revenue, including revenue and enrollments for the three months ended December 31st, 2020 and 2019 revised to reflect the new lines of revenue format can be found in Appendix A. Additional information on the new lines of revenue for fiscal years 2020 and 2019 revised to reflect the new lines of revenue format can be found in our first quarter, fiscal year 2021 press release. This information is provided for investor reference only. Readers are encouraged to obtain and carefully review Stride Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2020, including all financial statements contained therein and the footnotes thereto, filed with the SEC.

Revenue

The following table sets forth the Company’s revenues for the periods indicated:



Three Months Ended







Six Months Ended








December 31,


Change 2020 / 2019


December 31,


Change 2020 / 2019



2020


2019


$


%


2020


2019


$


%



(In thousands, except percentages)
































 
General Education
$

313,989


$

232,619


$

81,370


35.0

%


$

627,838


$

466,185


$

161,653


34.7

%

Career Learning





















Middle - High School

51,376



24,940



26,436


106.0

%



100,147



48,495



51,652


106.5

%

Adult

10,780



—



10,780


100.0

%



19,120



—



19,120


100.0

%

Total Career Learning

62,156



24,940



37,216


149.2

%



119,267



48,495



70,772


145.9

%

Total Revenues
$

376,145


$

257,559


$

118,586


46.0

%


$

747,105


$

514,680


$

232,425


45.2

%

Enrollment Data

The following table sets forth total enrollment data for students in our General Education and Career Learning lines of revenue. Enrollments for General Education and Career Learning include those students in full service public or private programs where Stride provides a combination of curriculum, technology, instructional and support services inclusive of administrative support.



Three Months Ended







Six Months Ended








December 31,


2020 / 2019


December 31,


2020 / 2019



2020


2019


Change


Change %


2020


2019


Change


Change %



(In thousands, except percentages)


























 
General Education (1)

161.2


106.8


54.4


50.9

%


162.0


107.8


54.2


50.3

%

Career Learning (1) (2)

30.3


13.1


17.2


131.3

%


30.4


13.2


17.2


130.3

%

Total Enrollment

191.5


119.9


71.6


59.7

%


192.4


121.0


71.4


59.0

%

(1)

This data includes enrollments for which Stride receives no public funding or revenue.

(2)

No enrollments are included in Career Learning for Galvanize, Tech Elevator or MedCerts.

Revenue per Enrollment Data

The following table sets forth revenue per average enrollment data for students for the period indicated. If the mix of enrollments changes, our revenues will be impacted to the extent the average revenues per enrollments are significantly different. Revenue per enrollment in the three and six months ended December 31st declined from 2019 to 2020 due to state budgetary pressures resulting from COVID-19 and a higher mix of lower-funded states.



Three Months Ended December 31,


Change 2020 / 2019


Six Months Ended December 31,


Change 2020 / 2019



2020


2019


$


%


2020


2019


$


%




















 
General Education
$

1,755


$

1,953


$

(198

)


(10.1

%)


3,491


3,847


(356

)


(9.2

%)

Career Learning

1,681



1,866



(185

)


(9.9

%)


3,258


3,619


(361

)


(10.0

%)

Outlook

The Company is updating its outlook for the third quarter and full fiscal year, 2021. The Company is forecasting the following for the full fiscal year 2021:

  • Revenue in the range of $1.500 billion to $1.525 billion.
  • Capital expenditures in the range of $50 million to $60 million. Note that capital expenditures include the purchase of property and equipment and capitalized software and curriculum development costs as defined on our Statement of Cash Flows.
  • Tax rate of 26% to 29% after discrete items.
  • Adjusted operating income in the range of $145 million to $155 million. (1)

The Company is forecasting the following for the third quarter, fiscal 2021:

  • Revenue in the range of $375 million to $385 million.
  • Capital expenditures in the range of $12 million to $15 million. Note that capital expenditures include the purchase of property and equipment, and capitalized software and curriculum development costs as defined on our Statement of Cash Flows.
  • Adjusted operating income in the range of $47 million to $52 million. (1)

(1)


In addition to providing an outlook for revenue and capital expenditures, adjusted operating income is provided as a supplemental non-GAAP financial measure as management believes that it provides useful information to our investors. Please also see Special Note on Forward Looking Statements below.



Three Months Ended March 31, 2021


Year Ended June 30, 2021



Low


High


Low


High



(In millions)

Income from operations

$

30.5


$

34.5


$

90.5


$

98.5

Stock-based compensation expense

 

13.0


 

14.0


 

43.0


 

45.0

Amortization of intangible assets

 

3.5


 

3.5


 

11.5


 

11.5

Adjusted operating income

$

47.0


$

52.0


$

145.0


$

155.0

Conference Call

The Company will discuss its second quarter 2021 financial results during a conference call scheduled for Tuesday, January 26, 2021 at 5:00 p.m. eastern time (ET).

Participants can access a live webcast of the call at https://event.on24.com/wcc/r/2948484/F4CDE03D7AFE81652B2C24482A4B7C99. Please access the website at least 15 minutes prior to the start of the call. To participate in the live call, investors and analysts should dial (833) 900-1536 (domestic) or (236) 712-2276 (international) at 4:45 p.m. (ET). The conference ID is 7723219.

A replay of the call will be available starting on January 26, 2021 at 8:00 p.m. (ET) through February 26, 2021 at 8:00 p.m. (ET) at 1-800-585-8367 (domestic) or 416-621-4642 (international) and entering the conference ID 7723219. A webcast replay will be available at https://event.on24.com/wcc/r/2948484/F4CDE03D7AFE81652B2C24482A4B7C99 for 30 days.

About Stride Inc.

At Stride, Inc. (NYSE: LRN) – formerly K12 Inc. – we are reimagining learning – where learning is lifelong, deeply personal, and prepares learners for tomorrow. The company has transformed the teaching and learning experience for millions of people by providing innovative, high-quality, tech-enabled education solutions, curriculum, and programs directly to students, schools, the military, and enterprises in primary, secondary, and post-secondary settings. Stride is a premier provider of K-12 education for students, schools, and districts, including career learning services through middle and high school curriculum. For adult learners, Stride delivers professional skills training in healthcare and technology, as well as staffing and talent development for Fortune 500 companies. Stride has delivered millions of courses over the past decade and serves learners in all 50 states and more than 100 countries. The company is a proud sponsor of the Future of School, a nonprofit organization dedicated to closing the gap between the pace of technology and the pace of change in education. More information can be found at stridelearning.com, K12.com, destinationsacademy.com, galvanize.com, techelevator.com, and medcerts.com.

Special Note on Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We have tried, whenever possible, to identify these forward-looking statements using words such as “anticipates,” “believes,” “estimates,” “continues,” “likely,” “may,” “opportunity,” “potential,” “projects,” “will,” “expects,” “plans,” “intends” and similar expressions to identify forward looking statements, whether in the negative or the affirmative. These statements reflect our current beliefs and are based upon information currently available to us. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from those expressed in, or implied by, such statements. These risks, uncertainties, factors and contingencies include, but are not limited to: reduction of per pupil funding amounts at the schools we serve; inability to achieve a sufficient level of new enrollments to sustain our business model; failure to replace students who have graduated from the terminal grade in a school or have left our programs for other reasons with new students of a sufficient number; inability to maintain our current rate of retention of students enrolled in our courses; an increase in the amount of failures to enter into new school contracts or renew existing contracts, in part or in their entirety; the failure of perceived industry trends and projections resulting from the expected effects of COVID-19 on virtual education; failure of the schools we serve or us to comply with federal, state and local regulations, resulting in a loss of funding, an obligation to repay funds previously received or contractual remedies; governmental investigations that could result in fines, penalties, settlements, or injunctive relief; declines or variations in academic performance outcomes of the students and schools we serve as curriculum standards, testing programs and state accountability metrics evolve; harm to our reputation resulting from poor performance or misconduct by operators or us in any school in our industry and/or in any school in which we operate; legal and regulatory challenges from opponents of virtual public education or for-profit education companies; changes in national and local economic and business conditions and other factors such as natural disasters, pandemics and outbreaks of contagious diseases and other adverse public health developments, such as COVID-19; discrepancies in interpretation of legislation by regulatory agencies that may lead to payment or funding disputes; termination of our contracts, or a reduction in the scope of services with schools; failure to develop the career learning education business; entry of new competitors with superior technologies and lower prices; unsuccessful integration of mergers, acquisitions and joint ventures, failure to further develop, maintain and enhance our technology, products, services and brands; inadequate recruiting, training and retention of effective teachers and employees; infringement of our intellectual property; disruptions to our Internet-based learning and delivery systems, including but not limited to our data storage systems, resulting from cybersecurity attacks; misuse or unauthorized disclosure of student and personal data; and other risks and uncertainties associated with our business described in the Company’s filings with the Securities and Exchange Commission. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this presentation is as of today’s date, and the Company undertakes no obligation to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations.

Financial Statements

The financial statements set forth below are not the complete set of Stride Inc.’s financial statements for the three and six months ended December 31, 2020 and are presented below without footnotes. Readers are encouraged to obtain and carefully review Stride Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2020, including all financial statements contained therein and the footnotes thereto, filed with the SEC, which may be retrieved from the SEC’s website at www.sec.gov or from Stride Inc.’s website at www.stridelearning.com.

STRIDE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS





 


Three Months Ended December 31,


Six Months Ended December 31,



2020


2019


2020


2019



(In thousands except share and per share data)
Revenues
$

376,145

 


$

257,559

 


$

747,105

 


$

514,680

 

Instructional costs and services

246,754

 



167,470

 



487,823

 



336,828

 

Gross margin

129,391

 



90,089

 



259,282

 



177,852

 

Selling, general, and administrative expenses

90,939

 



59,784

 



208,766

 



166,935

 

Income from operations

38,452

 



30,305

 



50,516

 



10,917

 

Interest income (expense), net

(5,024

)



441

 



(7,131

)



1,351

 

Other income, net

1,361

 



365

 



1,790

 



357

 

Income before income taxes and loss from equity method investments

34,789

 



31,111

 



45,175

 



12,625

 

Income tax expense

(10,642

)



(10,392

)



(8,266

)



(1,574

)

Income (loss) from equity method investments

354

 



(125

)



258

 



(187

)

Net income attributable to common stockholders
$

24,501

 


$

20,594

 


$

37,167

 


$

10,864

 

Net income attributable to common stockholders per share:











Basic
$

0.61

 


$

0.52

 


$

0.93

 


$

0.28

 

Diluted
$

0.60

 


$

0.52

 


$

0.89

 


$

0.27

 

Weighted average shares used in computing per share amounts:











Basic

40,160,362

 



39,450,017

 



40,072,360

 



39,369,287

 

Diluted

41,102,425

 



39,973,933

 



41,681,061

 



40,692,822

 

STRIDE INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS





 


December 31,


June 30,



2020


2020






(audited)


(In thousands except share and per share data)
ASSETS





Current assets





Cash and cash equivalents
$

258,107

 


$

212,299

 

Accounts receivable, net of allowance of $20,924 and $6,808

435,254

 



236,134

 

Inventories, net

28,618

 



28,300

 

Prepaid expenses

21,525

 



13,058

 

Other current assets

24,973

 



11,480

 

Total current assets

768,477

 



501,271

 

Operating lease right-of-use assets, net

104,010

 



111,768

 

Property and equipment, net

78,503

 



38,668

 

Capitalized software, net

50,296

 



48,493

 

Capitalized curriculum development costs, net

48,147

 



48,849

 

Intangible assets, net

106,547

 



77,451

 

Goodwill

240,799

 



174,939

 

Deposits and other assets

75,175

 



71,824

 

Total assets
$

1,471,954

 


$

1,073,263

 

LIABILITIES AND STOCKHOLDERS' EQUITY





Current liabilities





Accounts payable
$

39,251

 


$

40,428

 

Accrued liabilities

41,514

 



27,351

 

Accrued compensation and benefits

42,501

 



47,227

 

Deferred revenue

62,635

 



24,417

 

Credit facility

—

 



100,000

 

Current portion of finance lease liability

21,506

 



13,304

 

Current portion of operating lease liability

21,204

 



20,689

 

Total current liabilities

228,611

 



273,416

 

Long-term finance lease liability

37,796

 



4,634

 

Long-term operating lease liability

86,977

 



96,544

 

Long-term debt

291,624

 



—

 

Deferred tax liability

34,645

 



13,771

 

Other long-term liabilities

39,872

 



9,569

 

Total liabilities

719,525

 



397,934

 

Commitments and contingencies

—

 



—

 

Stockholders’ equity





Preferred stock, par value $0.0001; 10,000,000 shares authorized; zero shares issued or outstanding

—

 



—

 

Common stock, par value $0.0001; 100,000,000 shares authorized; 46,893,934 and 46,341,627 shares issued; and 41,559,191 and 41,006,884 shares outstanding

4

 



4

 

Additional paid-in capital

777,409

 



730,761

 

Accumulated other comprehensive income (loss)

(369

)



93

 

Retained earnings

77,867

 



46,953

 

Treasury stock of 5,334,743 shares at cost

(102,482

)



(102,482

)

Total stockholders’ equity

752,429

 



675,329

 

Total liabilities and stockholders' equity
$

1,471,954

 


$

1,073,263

 

STRIDE INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



 


Six Months Ended December 31,



2020


2019



(In thousands)
Cash flows from operating activities





Net income
$

37,167

 


$

10,864

 

Adjustments to reconcile net income to net cash used in operating activities:





Depreciation and amortization expense

41,438

 



34,376

 

Stock-based compensation expense

17,967

 



11,699

 

Deferred income taxes

5,375

 



346

 

Provision for (recovery of) doubtful accounts

6,382

 



(344

)

Amortization of discount and fees on debt

4,973

 



—

 

Other

16,871

 



7,116

 

Changes in assets and liabilities:





Accounts receivable

(208,870

)



(59,650

)

Inventories, prepaid expenses, deposits and other current and long-term assets

(23,231

)



2,556

 

Accounts payable

(7,202

)



(14,141

)

Accrued liabilities

4,346

 



690

 

Accrued compensation and benefits

(5,401

)



(13,943

)

Operating lease liability

(10,364

)



(4,089

)

Deferred revenue and other liabilities

40,592

 



3,255

 

Net cash used in operating activities

(79,957

)



(21,265

)

Cash flows from investing activities





Purchase of property and equipment

(1,969

)



(1,338

)

Capitalized software development costs

(14,061

)



(12,978

)

Capitalized curriculum development costs

(7,524

)



(11,991

)

Sale of long-lived assets

223

 



—

 

Acquisition of MedCerts, LLC, net of cash acquired

(54,775

)



—

 

Acquisition of Tech Elevator, Inc., net of cash acquired

(15,981

)



—

 

Other acquisitions and investments, net of distributions

(188

)



(4,114

)

Net cash used in investing activities

(94,275

)



(30,421

)

Cash flows from financing activities





Repayments on finance lease obligations

(11,455

)



(14,959

)

Repayments on credit facility

(100,000

)



—

 

Issuance of convertible senior notes

408,610

 



—

 

Purchases of capped calls in connection with convertible senior notes

(60,354

)



—

 

Proceeds from exercise of stock options

303

 



48

 

Withholding of stock options for tax withholding

(10,885

)



—

 

Repurchase of restricted stock for income tax withholding

(6,108

)



(4,883

)

Net cash provided by (used in) financing activities

220,111

 



(19,794

)

Net change in cash, cash equivalents and restricted cash

45,879

 



(71,480

)

Cash, cash equivalents and restricted cash, beginning of period

213,299

 



284,621

 

Cash, cash equivalents and restricted cash, end of period
$

259,178

 


$

213,141

 







 
Reconciliation of cash, cash equivalents and restricted cash to balance sheet as of December 31st:





Cash and cash equivalents
$

258,107

 


$

211,641

 

Other current assets (restricted cash)

571

 



500

 

Deposits and other assets (restricted cash)

500

 



1,000

 

Total cash, cash equivalents and restricted cash
$

259,178

 


$

213,141

 

Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with GAAP, we have presented adjusted operating income (loss), and adjusted EBITDA, which are not presented in accordance with GAAP.

  • Adjusted operating income (loss) is defined as income (loss) from operations as adjusted for stock-based compensation and the amortization of intangible assets.
  • Adjusted EBITDA is defined as income (loss) from operations as adjusted for stock-based compensation and depreciation and amortization.
  • Adjusted EBITDA and adjusted operating income (loss) exclude stock-based compensation, which consists of expenses for stock options, restricted stock, restricted stock units, and performance stock units.

Management believes that the presentation of these non-GAAP financial measures provides useful information to investors relating to our financial performance. These measures remove stock-based compensation, which is a non-cash charge that varies based on market volatility and the terms and conditions of the awards. Adjusted EBITDA also removes depreciation and amortization, which can vary depending upon accounting methods and the book value of assets. Adjusted EBITDA provides a measure of corporate performance exclusive of capital structure and the method by which assets were acquired.

Our management uses these non-GAAP financial measures:

  • as additional measures of operating performance because they assist us in comparing our performance on a consistent basis; and
  • in presentations to the members of our Board of Directors to enable our Board to review the same measures used by management to compare our current operating results with corresponding prior periods.

Other companies may define these non-GAAP financial measures differently and, as a result, our use of these non-GAAP financial measures may not be directly comparable to similar non-GAAP financial measures used by other companies. Although we use these non-GAAP financial measures to assess the performance of our business, the use of non-GAAP financial measures is limited as they include and/or do not include certain items not included and/or included in the most directly comparable GAAP financial measure.

These non-GAAP financial measures should be considered in addition to, and not as a substitute for, revenues, income (loss), net income (loss) and net income (loss) per share or other related financial information prepared in accordance with GAAP. Adjusted EBITDA is not intended to be a measure of liquidity. You are cautioned not to place undue reliance on these non-GAAP financial measures.

A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is provided below.



Three Months Ended December 31,


Six Months Ended December 31,



2020


2019


2020


2019



(In thousands)
Income from operations

$

38,452


$

30,305


$

50,516


$

10,917

Stock-based compensation expense

 

9,074


 

6,177


 

17,967


 

11,699

Amortization of intangible assets

 

2,524


 

742


 

4,576


 

1,485

Adjusted operating income

 

50,050


 

37,224


 

73,059


 

24,101

Depreciation and other amortization

 

20,637


 

16,487


 

36,862


 

32,891

Adjusted EBITDA

$

70,687


$

53,711


$

109,921


$

56,992

Appendix A

Full Definitions for New Lines of Reporting Revenue and Enrollments

Stride, Inc., together with its subsidiaries (“Stride” or the “Company”) is an education services company providing online and blended learning. On December 16, 2020, the Company changed its name from K12 Inc. to Stride, Inc. The brand reflects the Company’s continued growth into lifelong learning, regardless of a student’s age or location. The Company’s technology-based products and services enable its clients to attract, enroll, educate, track progress, and support students on a scalable basis. These products and services, spanning curriculum, systems, instruction, and support services are designed to help learners reach their educational goals through inspired teaching and personalized learning. The Company’s clients are primarily public and private schools, school districts, and charter boards. Additionally, it offers solutions to employers, government agencies and consumers, including through private schools which it operates. These products and services are provided through two lines of revenue:

General Education – products and services are predominantly focused on kindergarten through twelfth grade students for core subjects including math, English, science, and history to help build a common foundation of knowledge. Programs utilizing General Education products and services are for students that are not specializing in any particular curriculum or course of study. These programs provide an alternative to traditional school options and serve a range of student needs including safety concerns, increased academic support, scheduling flexibility, physical/health restrictions or advanced learning among other reasons. Products and services are sold a la carte or combined into customized customer offerings.

Career Learning – products and services are focused on developing skills for students, in middle school through high school and adult learners, to enter careers in high-growth, in-demand industries—including information technology, business, and health services. The Company provides middle and high school students with Career Learning programs that complement their core general education coursework in math, English, science and history. Stride currently offers a catalog of over 160 Career Learning courses in 23 Career Pathways™ in five of the sixteen National Career Clusters. The middle school program spans career exploration, exposes students to a variety of career options, and introduces career skill development. In high school, students may engage in industry content pathway courses, project-based learning in virtual teams, and career development services. High school students also have the opportunity to progress toward certifications, connect with industry professionals, earn college credits while in high school, and participate in job shadowing and/or work based learning experiences that are required to succeed in today’s digital, tech-enabled economy. A student enrolled in a school offering our General Education program may take Career Learning courses but that student and associated revenue is not reported as Career Learning enrollment and revenue. A student and the associated revenue, whether in middle or high school is counted as Career Learning if enrolled in a school offering our Career Learning program and must commit to a career pathway and its associated services, including the Exploratory Pathways. Like General Education, products and services for the Career Learning market are sold a la carte or combined into a Career Learning program or customized customer offering. The Company also offers post-secondary Career Learning programs to adult learners, through its Galvanize, Tech Elevator and MedCerts subsidiaries. These programs include skills training in data science and software engineering, healthcare and medical fields, technology staffing and talent development, and are offered directly to consumers, employers and government agencies.

The following tables provide revenue and enrollments for the three months ended December 31, 2020 and 2019 for the new reporting formats. This information is provided for investor reference only. Readers are encouraged to obtain and carefully review Stride Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2020, including all financial statements contained therein and the footnotes thereto, filed with the SEC, which may be retrieved from the SEC’s website at www.sec.gov or from Stride Inc.’s website at www.stridelearning.com.



Fiscal Year 2021


Fiscal Year 2020

General Education

Three Months Ended


Three Months Ended



December 31, 2020


December 31, 2019



(In thousands)


(In thousands)

Managed Public School Programs
$

325,827

 


$

229,576

 

Add:





Private Pay Schools and Other

12,533

 



8,626

 

Institutional (Non-managed and Software & Services)

27,005

 



19,357

 

Less:





Career Learning - Managed Public School Programs

(50,228

)



(24,356

)

Career Learning - Non-managed Public School Programs

(477

)



(481

)

Career Learning - Private Pay Schools and Other

(671

)



(103

)

Total General Education Revenues
$

313,989

 


$

232,619

 







 


Fiscal Year 2021


Fiscal Year 2020



Three Months Ended


Three Months Ended



December 31, 2020


December 31, 2019



(In thousands)


(In thousands)

Managed Public School Programs

186.7

 



117.6

 

Non-managed Public School Programs

55.5

 



15.6

 

Total Old Reporting

242.2

 



133.2

 

Add:





Private Pay

4.8

 



2.3

 

Less:





Non-managed Public School Programs

(55.5

)



(15.6

)

Net Changes - Old vs New Reporting

(50.7

)



(13.3

)

Total New Reporting

191.5

 



119.9

 







 






 


Fiscal Year 2021


Fiscal Year 2020

Career Learning

Three Months Ended


Three Months Ended



December 31, 2020


December 31, 2019



(In thousands)


(In thousands)

Career Learning - Managed Public School Programs
$

50,228

 


$

24,356

 

Career Learning - Non-managed Public School Programs

477

 



481

 

Career Learning - Private Pay Schools and Other

671

 



103

 

Private Pay Schools and Other (Galvanize, MedCerts and Tech Elevator)

10,780

 



—

 

Total Career Learning Revenues
$

62,156

 


$

24,940


 

Contacts

Stride Inc.
Investor Contact:
Mike Lawson, 513-432-2358
Vice President, Investor Relations
mlawson@k12.com

Exhibit 99.2

Nathaniel A. Davis Retires as Chief Executive Officer of Stride, Inc.

James J. Rhyu named new CEO

HERNDON, Va.--(BUSINESS WIRE)--January 26, 2021--Stride, Inc. (NYSE: LRN)—a leading provider of innovative, high-quality, and tech-enabled education solutions—today announced that Nathaniel (Nate) A. Davis is retiring from his role as Chief Executive Officer. He will remain active in the business as the Executive Chairman of Stride’s Board of Directors.

Replacing Mr. Davis as Chief Executive Officer is James J. Rhyu who has served in a variety of roles during his eight-year tenure at Stride, including Chief Financial Officer, President of Product and Technology, and most recently as President of Corporate Strategy, Marketing, and Technology.

Among many notable achievements during his tenure, Mr. Davis led the company to prioritize academic outcomes, strengthen teacher tools and student-teacher interaction, increase student retention and graduation rates, reimagine the customer experience, and expand the company’s use of gamification, video, and Artificial Intelligence to support student outcomes. Also, under his direction, the company increased revenues on an annual basis by more than 65%, while increasing profitability and establishing one of the deepest management teams in the education sector.

With more than two decades of business experience, Mr. Rhyu brings significant strategic, financial management, and operational expertise to his new role.

“Having known James and the quality of his work for fifteen years, I have complete faith in his broad set of skills, which he’s developed through managing many different functional areas,” said Nate Davis, Executive Chairman of the Board. “Whether it’s examining student enrollment trends, evaluating acquisitions, or dissecting changes in marketing programs and techniques, James has played an active role in using business information to set strategic direction and drive the success of new initiatives. His depth of experience and track record of success uniquely qualifies him to lead Stride and continue the progress we’ve made. And under his direction, we will continue building a successful world-class education company.”

Prior to joining Stride, Mr. Rhyu served as Chief Financial Officer and Chief Administrative Officer of Match.com, a subsidiary of publicly traded IAC/InterActiveCorp. Prior to his roles at Match.com, Mr. Rhyu was a Senior Vice President of Finance at Dow Jones & Company, where he ran the global financial function. Mr. Rhyu also spent six years with Ernst & Young LLP in the United States and South America.

“It is an honor and a privilege to lead Stride, Inc.—a company that is reimagining learning for today’s digital economy,” Rhyu said. “I am very much looking forward to building on our successes as a company, and providing personalized, high-quality education for learners of all ages.

Mr. Rhyu earned a bachelor’s degree from the Wharton School of Business at the University of Pennsylvania and an MBA from the London Business School.

The Board of Directors has focused on a smooth transition in leadership as Mr. Davis and Mr. Rhyu have worked together to build Stride into the education leader it is today. Mr. Davis, with Mr. Rhyu’s support, has led the company’s rapidly expanding career learning business, which gives learners the chance to explore opportunities in high-demand careers. Stride’s career learning business currently serves more than 30,000 students and is targeted to more than double revenues year-over-year. As part of this effort, Mr. Davis has led transformative investments in three of the nation’s leading workforce development companies—Galvanize, MedCerts, and Tech Elevator.

Importantly, Mr. Davis expanded online learning options for thousands of families during the coronavirus pandemic; launched a first-of-its-kind partnership with Southern New Hampshire University that offers a graduate degree program in online teaching; and spearheaded an extensive internal campaign focused on student growth and student engagement. With his signature program “We Stand Together” he strengthened Stride’s diversity and inclusion efforts and made it a core part of the way the company works, teaches, and leads.

Mr. Davis leaves a legacy of commitment to the students, families, schools, and customers Stride serves, and to reimagining lifelong learning.

About Stride, Inc.

At Stride, Inc. (NYSE: LRN) – formerly K12 Inc. – we are reimagining lifelong learning as a rich, deeply personal experience that prepares learners for tomorrow. Since its inception, Stride has been committed to removing barriers that impact academic equity and to providing high-quality education for anyone—particularly those in underserved communities. The company has transformed the teaching and learning experience for millions of people by providing innovative, high-quality, tech-enabled education solutions, curriculum, and programs directly to students, schools, the military, and enterprises in primary, secondary, and post-secondary settings. Stride is a premier provider of K-12 education for students, schools, and districts, including career learning services through middle and high school curriculum. Providing a solution to the widening skills gap in the workplace and student loan crisis, Stride equips students with real world skills for in-demand jobs with career learning. For adult learners, Stride delivers professional skills training in healthcare and technology, as well as staffing and talent development for Fortune 500 companies. Stride has delivered millions of courses over the past decade and serves learners in all 50 states and more than 100 countries. The company is a proud sponsor of the Future of School, a nonprofit organization dedicated to closing the gap between the pace of technology and the pace of change in education. More information can be found at stridelearning.com, K12.com, destinationsacademy.com, galvanize.com, techelevator.com, and medcerts.com.

Contacts

Mike Kraft,
Senior Vice President, Corporate Communications
571-353-7778
mkraft@k12.com