Stride, Inc. (NYSE:LRN) Q2 2023 Earnings Call Transcript

James Rhyu: Also I want to give some credit. I think the team and Donna specifically her team has done a really fantastic job. We talked about driving efficiencies in our business and that was going to be both at the gross margin line and the operating line. And I think we’ve done that. And so we entered the year in a little bit of a hole and we had dig ourselves out. We are committed to digging ourselves out. And while the macro environment helped us, the enrollment has helped us, we have also driven some efficiency in this business and I think that also helps. So I think it’s a real combination of factors.

Tom Singlehurst: And if I could just follow-up, I’m sorry for being painful, but when you talk about capture, is that the element that’s linked to strong enrollment and therefore your ability to actually extract funding that you’re expecting? Is that how I should interpret that?

Donna Blackman: So part of the capture is, if we have a student enrolled and we give the higher attendance or we meet certain criteria for those students, and we actually get the full amount of the PPR. So that’s what I mean by capture.

James Rhyu: Capture is our version of the yield metric, okay? And so for every $100 that’s available to us, on average we are able to capture or yield $75, we’re always trying to yield more, 75% to 80%, 80% to 83% and through a number of efforts and a lot of that through engagement, as Donna was saying, there’s a lot of different mechanisms for how that yield plays out. But essentially, it’s a yield gain that we’re trying to improve. And we are constantly focusing energy on how to improve that yield. And so I think this year we’re having some improvements in the yield, essentially on yield metric.

Tom Singlehurst: Perfect. Well, that’s super encouraging. Thank you very much.

Operator: Ladies and gentlemen, it appears we have no further questions today. So we’d like to thank you all so much for joining us on the Stride second quarter fiscal 2023 earnings conference call. Again, thank you all so much for joining us, and we wish you all a great evening. Good night.