STRIDE, INC., 10-Q filed on 1/25/2023
Quarterly Report
v3.22.4
Document and Entity Information - shares
 6 Months Ended
Dec. 31, 2022
Jan. 20, 2023
Cover    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Dec. 31, 2022  
Entity File Number 001-33883  
Entity Registrant Name Stride, Inc.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 95-4774688  
Entity Address, Address Line One 11720 Plaza America 9th Floor  
Entity Address, City or Town Reston  
Entity Address, State or Province VA  
Entity Address, Postal Zip Code 20190  
City Area Code 703  
Local Phone Number 483-7000  
Title of 12(b) Security Common Stock, $0.0001 par value  
Trading Symbol LRN  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   43,109,730
Current Fiscal Year End Date --06-30  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q2  
Entity Central Index Key 0001157408  
Amendment Flag false  
v3.22.4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2022
Jun. 30, 2022
Current assets    
Cash and cash equivalents $ 318,279 $ 389,398
Accounts receivable, net of allowance of $25,744 and $26,993 442,166 418,558
Inventories, net 23,960 36,003
Prepaid expenses 43,822 25,974
Other current assets 100,588 80,601
Total current assets 928,815 950,534
Operating lease right-of-use assets, net 75,823 85,457
Property and equipment, net 68,124 61,537
Capitalized software, net 76,192 71,800
Capitalized curriculum development costs, net 50,557 50,580
Intangible assets, net 83,410 88,669
Goodwill 246,676 241,022
Deposits and other assets 89,694 93,946
Total assets 1,619,291 1,643,545
Current liabilities    
Accounts payable 32,809 61,997
Accrued liabilities 40,909 63,200
Accrued compensation and benefits 34,083 73,027
Deferred revenue 83,799 53,630
Current portion of finance lease liability 44,377 37,389
Current portion of operating lease liability 13,281 12,830
Total current liabilities 249,258 302,073
Long-term finance lease liability 28,925 28,888
Long-term operating lease liability 65,827 75,127
Long-term debt 412,260 411,438
Deferred tax liability 10,752 3,205
Other long-term liabilities 10,370 10,233
Total liabilities 777,392 830,964
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; 48,431,576 and 48,112,664 shares issued; and 43,096,833 and 42,777,921 shares outstanding, respectively 4 4
Additional paid-in capital 688,695 687,454
Accumulated other comprehensive income (loss) 187 143
Retained earnings 255,495 227,462
Treasury stock of 5,334,743 shares at cost (102,482) (102,482)
Total stockholders' equity 841,899 812,581
Total liabilities and stockholders' equity $ 1,619,291 $ 1,643,545
v3.22.4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2022
Jun. 30, 2022
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS    
Accounts receivable, allowance (in dollars) $ 25,744 $ 26,993
Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 48,431,576 48,112,664
Common stock, shares outstanding 43,096,833 42,777,921
Treasury stock, shares 5,334,743 5,334,743
v3.22.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS        
Revenues $ 458,435 $ 409,507 $ 883,585 $ 809,733
Instructional costs and services 288,347 261,950 583,848 535,774
Gross margin 170,088 147,557 299,737 273,959
Selling, general, and administrative expenses 102,015 90,642 260,383 224,021
Income from operations 68,073 56,915 39,354 49,938
Interest expense, net (2,082) (1,875) (4,128) (3,868)
Other income, net 3,970 3,884 5,007 3,795
Income before income taxes and loss from equity method investments 69,961 58,924 40,233 49,865
Income tax expense (18,860) (15,928) (11,353) (13,035)
Loss from equity method investments (396) (992) (847) (709)
Net income attributable to common stockholders $ 50,705 $ 42,004 $ 28,033 $ 36,121
Net income attributable to common stockholders per share:        
Basic (in dollars per share) $ 1.20 $ 1.01 $ 0.66 $ 0.88
Diluted (in dollars per share) $ 1.19 $ 1.00 $ 0.66 $ 0.85
Weighted average shares used in computing per share amounts:        
Basic (in shares) 42,259,061 41,525,736 42,167,844 41,042,401
Diluted (in shares) 42,547,334 41,963,399 42,602,405 42,413,828
v3.22.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME        
Net income $ 50,705 $ 42,004 $ 28,033 $ 36,121
Other comprehensive income (loss), net of tax:        
Foreign currency translation adjustment (331) (13) 44 131
Comprehensive income attributable to common stockholders $ 50,374 $ 41,991 $ 28,077 $ 36,252
v3.22.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Common Stock
Additional Paid-in Capital
Cumulative Effect, Period of Adoption, Adjustment
Additional Paid-in Capital
Accumulated Other Comprehensive Income (Loss)
Retained Earnings
Cumulative Effect, Period of Adoption, Adjustment
Retained Earnings
Treasury Stock
Cumulative Effect, Period of Adoption, Adjustment
Total
Balance at Jun. 30, 2021 $ 4   $ 795,449 $ (474)   $ 112,151 $ (102,482)   $ 804,648
Balance (in shares) at Jun. 30, 2021 46,911,527           (5,334,743)    
Increase (Decrease) in Stockholders' Equity                  
Adjustment related to new convertible debt guidance   $ (89,460)     $ 8,181     $ (81,279)  
Net income (loss)           (5,883)     (5,883)
Foreign currency translation adjustment       144         144
Stock-based compensation expense     8,050           8,050
Exercise of stock options     246           246
Exercise of stock options (in shares) 15,025                
Issuance of restricted stock awards (in shares) 398,943                
Forfeiture of restricted stock awards (in shares) (34,740)                
Repurchase of restricted stock for tax withholding     (6,020)           (6,020)
Repurchase of restricted stock for tax withholding (in shares) (179,151)                
Balance at Sep. 30, 2021 $ 4   708,265 (330)   114,449 $ (102,482)   719,906
Balance (in shares) at Sep. 30, 2021 47,111,604           (5,334,743)    
Balance at Jun. 30, 2021 $ 4   795,449 (474)   112,151 $ (102,482)   804,648
Balance (in shares) at Jun. 30, 2021 46,911,527           (5,334,743)    
Increase (Decrease) in Stockholders' Equity                  
Net income (loss)                 36,121
Balance at Dec. 31, 2021 $ 4   680,601 (343)   156,453 $ (102,482)   734,233
Balance (in shares) at Dec. 31, 2021 48,084,410           (5,334,743)    
Balance at Sep. 30, 2021 $ 4   708,265 (330)   114,449 $ (102,482)   719,906
Balance (in shares) at Sep. 30, 2021 47,111,604           (5,334,743)    
Increase (Decrease) in Stockholders' Equity                  
Net income (loss)           42,004     42,004
Foreign currency translation adjustment       (13)         (13)
Stock-based compensation expense     1,697           1,697
Vesting of performance share units, net of tax withholding 1,012,374                
Issuance of restricted stock awards (in shares) 27,750                
Forfeiture of restricted stock awards (in shares) (57,480)                
Repurchase of restricted stock for tax withholding     (29,361)           (29,361)
Repurchase of restricted stock for tax withholding (in shares) (9,838)                
Balance at Dec. 31, 2021 $ 4   680,601 (343)   156,453 $ (102,482)   734,233
Balance (in shares) at Dec. 31, 2021 48,084,410           (5,334,743)    
Balance at Jun. 30, 2022 $ 4   687,454 143   227,462 $ (102,482)   812,581
Balance (in shares) at Jun. 30, 2022 48,112,664           (5,334,743)    
Increase (Decrease) in Stockholders' Equity                  
Net income (loss)           (22,672)     (22,672)
Foreign currency translation adjustment       375         375
Stock-based compensation expense     5,295           5,295
Exercise of stock options     10           10
Exercise of stock options (in shares) 675                
Vesting of performance share units, net of tax withholding 48,916                
Issuance of restricted stock awards (in shares) 460,411                
Forfeiture of restricted stock awards (in shares) (27,184)                
Repurchase of restricted stock for tax withholding     (8,766)           (8,766)
Repurchase of restricted stock for tax withholding (in shares) (209,010)                
Balance at Sep. 30, 2022 $ 4   683,993 518   204,790 $ (102,482)   786,823
Balance (in shares) at Sep. 30, 2022 48,386,472           (5,334,743)    
Balance at Jun. 30, 2022 $ 4   687,454 143   227,462 $ (102,482)   812,581
Balance (in shares) at Jun. 30, 2022 48,112,664           (5,334,743)    
Increase (Decrease) in Stockholders' Equity                  
Net income (loss)                 $ 28,033
Exercise of stock options (in shares)                 675
Balance at Dec. 31, 2022 $ 4   688,695 187   255,495 $ (102,482)   $ 841,899
Balance (in shares) at Dec. 31, 2022 48,431,576           (5,334,743)    
Balance at Sep. 30, 2022 $ 4   683,993 518   204,790 $ (102,482)   786,823
Balance (in shares) at Sep. 30, 2022 48,386,472           (5,334,743)    
Increase (Decrease) in Stockholders' Equity                  
Net income (loss)           50,705     50,705
Foreign currency translation adjustment       (331)         (331)
Stock-based compensation expense     6,132           6,132
Vesting of performance share units, net of tax withholding 31,088                
Issuance of restricted stock awards (in shares) 76,685                
Forfeiture of restricted stock awards (in shares) (36,820)                
Repurchase of restricted stock for tax withholding     (1,430)           (1,430)
Repurchase of restricted stock for tax withholding (in shares) (25,849)                
Balance at Dec. 31, 2022 $ 4   $ 688,695 $ 187   $ 255,495 $ (102,482)   $ 841,899
Balance (in shares) at Dec. 31, 2022 48,431,576           (5,334,743)    
v3.22.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Cash flows from operating activities    
Net income $ 28,033 $ 36,121
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation and amortization expense 53,714 49,327
Stock-based compensation expense 10,451 8,888
Deferred income taxes 7,995 6,008
Provision for doubtful accounts 2,173 4,730
Amortization of fees on debt 822 809
Noncash operating lease expense 7,369 10,074
Other (2,869) 5,550
Changes in assets and liabilities:    
Accounts receivable (25,680) (65,606)
Inventories, prepaid expenses, deposits and other current and long-term assets (9,177) 11,944
Accounts payable (26,059) (26,810)
Accrued liabilities (10,681) (8,570)
Accrued compensation and benefits (38,806) (39,157)
Operating lease liability (5,966) (10,662)
Deferred revenue and other liabilities 29,863 5,686
Net cash provided by (used in) operating activities 21,182 (11,668)
Cash flows from investing activities    
Purchase of property and equipment (2,823) (2,705)
Capitalized software development costs (21,399) (19,330)
Capitalized curriculum development costs (9,527) (7,461)
Sale of other investments 60 5,261
Acquisition of assets (1,409)  
Other acquisitions, loans and investments, net of distributions (767) (3,956)
Proceeds from the maturity of marketable securities 36,729 7,248
Purchases of marketable securities (55,879) (38,720)
Net cash used in investing activities (55,015) (59,663)
Cash flows from financing activities    
Repayments on finance lease obligations (19,938) (14,744)
Payments of contingent consideration (7,024)  
Payments of deferred purchase consideration   (7,858)
Proceeds from exercise of stock options 10 246
Repurchase of restricted stock for income tax withholding (10,334) (35,404)
Net cash used in financing activities (37,286) (57,760)
Net change in cash, cash equivalents and restricted cash (71,119) (129,091)
Cash, cash equivalents and restricted cash, beginning of period 389,398 386,582
Cash, cash equivalents and restricted cash, end of period $ 318,279 $ 257,491
v3.22.4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)
$ in Thousands
Dec. 31, 2021
USD ($)
Reconciliation of cash, cash equivalents and restricted cash to balance sheet as of December 31st:  
Cash and cash equivalents $ 256,986
Other current assets (restricted cash) 505
Total cash, cash equivalents and restricted cash $ 257,491
v3.22.4
Description of the Business
 6 Months Ended
Dec. 31, 2022
Description of the Business  
Description of the Business

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1.   Description of the Business

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Stride, Inc., together with its subsidiaries (“Stride” or the “Company”) is an education services company providing virtual and blended learning. 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. These products and services, spanning curriculum, systems, instruction, and support services are designed to help learners of all ages reach their full potential through inspired teaching and personalized learning. 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. These products and services are provided through two lines of revenue:

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●Products and services for the General Education market are predominantly focused on core subjects, including math, English, science and history, for kindergarten through twelfth grade students to help build a common foundation of knowledge.  These programs provide an alternative to traditional school options and address a range of student needs including, safety concerns, increased academic support, scheduling flexibility, physical/health restrictions or advanced learning. Products and services are sold as a comprehensive school-as-a-service offering or à la carte.

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●Career Learning products and services are focused on developing skills to enter and succeed in careers in high-growth, in-demand industries—including information technology, health care and general business.  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 offers multiple career pathways supported by a diverse catalog of Career Learning courses. The middle school program 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 facilitate success in today’s digital, tech-enabled economy.  A student enrolled in a school that offers Stride’s General Education program may elect to take Career Learning courses, but that student and the associated revenue is reported as a General Education enrollment and General Education revenue. A student and the associated revenue is counted as a Career Learning enrollment or Career Learning revenue only if the student is enrolled in a Career Learning program or school. Like General Education products and services, the products and services for the Career Learning market are sold as a comprehensive school-as-a-service offering or à la carte.  The Company also offers focused post-secondary career learning programs to adult learners, through Galvanize, Inc. (“Galvanize”), Tech Elevator, Inc. (“Tech Elevator”), and MedCerts, LLC (“MedCerts”). These include skills training in the software engineering, healthcare, and medical fields, as well as providing staffing and talent development services to employers. These programs are offered directly to consumers, as well as to employers and government agencies.
v3.22.4
Basis of Presentation
 6 Months Ended
Dec. 31, 2022
Basis of Presentation  
Basis of Presentation

2.   Basis of Presentation

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The accompanying condensed consolidated balance sheet as of December 31, 2022, the condensed consolidated statements of operations and comprehensive income for the three and six months ended December 31, 2022 and 2021, the condensed consolidated statements of cash flows for the six months ended December 31, 2022 and 2021, and the condensed consolidated statements of stockholders’ equity for the three and six months ended December 31, 2022 and 2021 are unaudited. The unaudited interim financial statements have been prepared on the same basis as the annual financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations for the periods presented. The results for the three and six months ended December 31, 2022 are not necessarily indicative of the results to be expected for the year ending June 30, 2023, for any other interim period or for any other future fiscal year. The condensed consolidated balance sheet as of June 30, 2022 has been derived from the audited consolidated financial statements at that date.

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The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, the Company does not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of the Company’s condensed consolidated results of operations, financial position and cash flows. Preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and footnotes. Actual results could differ from those estimates. This quarterly report on Form 10-Q should be read in conjunction with the financial statements and the notes thereto included in the Company’s latest annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on August 10, 2022, which contains the Company’s audited financial statements for the fiscal year ended June 30, 2022.

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The Company operates in one operating and reportable business segment as a technology-based education company providing proprietary and third party curriculum, software systems and educational services designed to facilitate individualized learning for students and adults. The Chief Operating Decision Maker evaluates profitability based on consolidated results.

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v3.22.4
Summary of Significant Accounting Policies
 6 Months Ended
Dec. 31, 2022
Summary of Significant Accounting Policies  
Summary of Significant Accounting Policies

3.   Summary of Significant Accounting Policies

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Recent Accounting Pronouncements

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Accounting Standards Not Yet Adopted

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In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”) which provides relief to companies that will be impacted by the cessation of reference rate reform, e.g. LIBOR, that was tentatively planned for the end of fiscal year 2023. The ASU permitted an entity to consider contract modifications due to reference rate reform to be an event that did not require contract remeasurement. This ASU was applicable from March 12, 2020 through December 31, 2022 and adoption was permitted at any time during the period on a prospective basis. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, which extends the provisions of Topic 848 to December 31, 2024. The Company’s senior secured revolving credit facility includes the use of alternate rates when LIBOR is not available. The Company does not expect the change from LIBOR to an alternate rate will have a material impact to its condensed consolidated financial statements and, to the extent it enters into modifications of agreements that are impacted by the LIBOR phase-out, the Company will apply such guidance to those contract modifications.

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Revenue Recognition

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Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services using the following steps:

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●identify the contract, or contracts, with a customer;
●identify the performance obligations in the contract;
●determine the transaction price;
●allocate the transaction price to the performance obligations in the contract; and
●recognize revenue when, or as, the Company satisfies a performance obligation.

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Revenues related to the products and services that the Company provides to students in kindergarten through twelfth grade or adult learners are considered to be General Education or Career Learning based on the school or adult program in which the student is enrolled. General Education products and services are focused on core subjects, including math, English, science and history, for kindergarten through twelfth grade students to help build a common foundation of knowledge. Career Learning products and services are focused on developing skills to enter and succeed in careers in high-

growth, in-demand industries—including information technology, business, and health services, for students in middle school through high school and adult learners.

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The majority of the Company’s contracts are with the following types of customers:

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●a virtual or blended school whereby the amount of revenue is primarily determined by funding the school receives;
●a school or individual who licenses certain curriculum on a subscription or course-by-course basis; or
●an enterprise who contracts with the Company to provide job training.

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Funding-based Contracts

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The Company provides an integrated package of systems, services, products, and professional expertise that is administered together to support a virtual or blended public school. Contractual agreements generally span multiple years with performance obligations being isolated to annual periods which generally coincide with the Company’s fiscal year. Customers of these programs can obtain administrative support, information technology, academic support services, online curriculum, learning systems platforms and instructional services under the terms of a negotiated service agreement. The schools receive funding on a per student basis from the state in which the public school or school district is located. Shipments of materials for schools that occur in the fourth fiscal quarter and for the upcoming school year are recorded in deferred revenue.

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The Company generates revenues under contracts with virtual and blended public schools and include the following components, where required:

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●providing each of a school’s students with access to the Company’s online school and lessons;
●offline learning kits, which include books and materials to supplement the online lessons;
●the use of a personal computer and associated reclamation services;
●internet access and technology support services;
●instruction by a state-certified teacher; and
●management and technology services necessary to support a virtual or blended school. In certain contracts, revenues are determined directly by per enrollment funding.

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To determine the pro rata amount of revenue to recognize in a fiscal quarter, the Company estimates the total expected funds each school will receive in a particular school year. Total funds for a school are primarily a function of the number of students enrolled in the school and established per enrollment funding levels, which are generally published on an annual basis by the state or school district. The Company reviews its estimates of funding periodically, and updates as necessary, by adjusting its year-to-date earned revenues to be proportional to the total expected revenues to be earned during the fiscal year. Actual school funding may vary from these estimates and the impact of these differences could impact the Company’s results of operations. Since the end of the school year coincides with the end of the Company’s fiscal year, annual revenues are generally based on actual school funding and actual costs incurred (including costs for the Company’s services to the schools plus other costs the schools may incur). The Company’s schools’ reported results are subject to annual school district financial audits, which incorporate enrollment counts, funding and other routine financial audit considerations. The results of these audits are incorporated into the Company’s monthly funding estimates for the three and six months ended December 31, 2022 and 2021. Historically, aggregate funding estimates differed from actual reimbursements by less than 2% of annual revenue, which may vary from quarter to quarter.

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Each state and/or school district has variations in the school funding formulas and methodologies that it uses to estimate funding for revenue recognition at its respective schools. As the Company estimates funding for each school, it takes into account the state definition for count dates on which reported enrollment numbers will be used for per pupil funding. The parameters the Company considers in estimating funding for revenue recognition purposes include school district count definitions, withdrawal rates, new registrations, average daily attendance, special needs enrollment, academic progress, historical completion, student location, funding caps and other state specified categorical program funding.

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Under the contracts where the Company provides products and services to schools, the Company is responsible for substantially all of the expenses incurred by the school and has generally agreed to absorb any operating losses of the schools in a given school year. These school operating losses represent the excess of costs incurred over revenues earned by the virtual or blended public school (the school’s expected funding), as reflected in its respective financial statements, including Company charges to the schools. To the extent a school does not receive sufficient funding for each student enrolled in the school, the school would still incur costs associated with serving the unfunded enrollment. If losses due to unfunded enrollments result in a net operating loss for the year that loss is reflected as a reduction in the revenues and net receivables that the Company collects from the school. A school net operating loss in one year does not necessarily mean the Company anticipates losing money on the entire contract with the school. However, a school’s net operating loss may reduce the Company’s ability to collect its management fees in full and recognized revenues are constrained to reflect the expected cash collections from such schools. The Company records the school’s estimated net operating loss against revenues based upon the percentage of actual revenues in the period to total estimated revenues for the fiscal year. Actual school net operating losses may vary from these estimates or revisions, and the impact of these differences could have a material impact on results of operations. For the three months ended December 31, 2022 and 2021, the Company’s revenues included a reduction for net school operating losses at the schools of $6.4 million and $12.3 million, respectively, and $16.6 million and $25.2 million for the six months ended December 31, 2022 and 2021, respectively. Because the Company has agreed to absorb any operating losses of the schools, the Company records the expenses incurred by the school as both revenue and expenses in the condensed consolidated statements of operations. Amounts recorded as revenues and expenses for the three months ended December 31, 2022 and 2021 were $123.0 million and $117.7 million, respectively, and for the six months ended December 31, 2022 and 2021 were $248.3 million and 231.6 million, respectively.

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Subscription-based Contracts

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The Company provides certain online curriculum and services to schools and school districts under subscription agreements. Revenues from the licensing of curriculum under subscription arrangements are recognized on a ratable basis over the subscription period. Revenues from professional consulting, training and support services are deferred and recognized ratably over the service period.

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In addition, the Company contracts with individual customers who have access for one to two years to company-provided online curriculum and generally prepay for services to be received. Adult learners enroll in courses that provide specialized training in a specific industry. Each of these contracts are considered to be one performance obligation. The Company recognizes these revenues pro rata over the maximum term of the customer contract based on the defined contract price.

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Enterprise Contracts

​

The Company provides job training over a specified contract period to enterprises. Each of these contracts are considered to be one performance obligation. The Company recognizes these revenues based on the number of students trained during the term of the contract based on the defined contract price.

​

Disaggregated Revenues

​

The revenue recognition related to the types of contracts discussed above can span both of the Company’s lines of revenue as shown below. For example, a funding-based contract may include both General Education and Career Learning students. In total, there is one performance obligation and revenue is recognized over the Company’s fiscal year. The revenue is then disaggregated between General Education and Career Learning based on the Company’s estimated full-year enrollment totals of each category. During the three months ended December 31, 2022 and 2021, approximately 90% and 88%, respectively, of the Company’s General Education revenues, and 100% and 99%, respectively, of the Company’s Middle – High School Career Learning revenues, were from funding-based contracts. During the six months ended December 31, 2022 and 2021, approximately 90% and 89%, respectively, of the Company’s General Education revenues,

and 99% and 99%, respectively, of the Company’s Middle – High School Career Learning revenues, were from funding-based contracts.

​

The following table presents the Company’s revenues disaggregated based on its two lines of revenue for the three and six months ended December 31, 2022 and 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

2022

   

2021

​

2022

  

2021

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

General Education

​

$

274,764

​

$

313,241

​

$

546,422

​

$

619,582

Career Learning

​

​

​

​

​

​

​

​

​

​

​

​

Middle - High School

​

​

153,795

​

​

75,287

​

​

279,330

​

​

146,699

Adult

​

​

29,876

​

​

20,979

​

​

57,833

​

​

43,452

Total Career Learning

​

​

183,671

​

​

96,266

​

​

337,163

​

​

190,151

Total Revenues

​

$

458,435

​

$

409,507

​

$

883,585

​

$

809,733

​

Concentration of Customers

​

During the three and six months ended December 31, 2022 and 2021, the Company had no contracts that represented greater than 10% of total revenues.

​

Contract Balances

​

The timing of revenue recognition, invoicing, and cash collection results in accounts receivable, unbilled receivables (a contract asset) and deferred revenue (a contract liability) in the condensed consolidated balance sheets. Accounts receivable are recorded when there is an executed customer contract and the customer is billed. An allowance is recorded to reflect expected losses at the time the receivable is recorded. The collectability of outstanding receivables is evaluated regularly by the Company to determine if additional allowances are needed. Unbilled receivables are created when revenue is earned prior to the customer being billed. Deferred revenue is recorded when customers are billed or cash is collected in advance of services being provided.

​

The opening and closing balance of the Company’s accounts receivable, unbilled receivables and deferred revenue are as follows:

​

​

​

​

​

​

​

​

​

​

​

December 31, 

​

June 30,

​

​

2022

    

2022

​

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

Accounts receivable

​

$

442,166

​

$

418,558

​

Unbilled receivables (included in accounts receivable)

​

​

15,997

​

​

19,702

​

Deferred revenue

​

​

83,799

​

​

53,630

​

Deferred revenue, long-term (included in other long-term liabilities)

​

​

2,565

​

​

3,099

​

​

The difference between the opening and closing balance of the accounts receivable and unbilled receivables relates to the timing of the Company’s billing in relation to month end and contractual agreements. The difference between the opening and closing balance of the deferred revenue relates to the timing difference between billings to customers and the service periods under the contract. Typically, each of these balances are at their highest during the first quarter of the fiscal year and lowest at the end of the fiscal year. The amount of revenue recognized during the three months ended December 31, 2022 and 2021 that was included in the previous October 1st deferred revenue balance was $42.8 million and $34.7 million, respectively. The amount of revenue recognized during the six months ended December 31, 2022 and 2021 that was included in the previous July 1st deferred revenue balance was $40.6 million and $33.0 million, respectively. During the three months ended December 31, 2022 and 2021, the Company recorded revenues of $24.5 million and $4.6 million, respectively, and $24.0 million and $6.9 million, respectively, during the six months ended December 31, 2022 and 2021, related to performance obligations satisfied in prior periods.

​

Performance Obligations

​

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the majority of its contracts, the Company’s performance obligations are satisfied over time, as the Company delivers, and the customer receives the services, over the service period of the contract. The Company’s payment terms are generally net 30 or net 45, but can vary depending on the customer or when the school receives its funding from the state.

​

The Company has elected, as a practical expedient, not to report the value of unsatisfied performance obligations for contracts with customers that have an expected duration of one year or less. The amount of unsatisfied performance obligations for contracts with customers which extend beyond one year as of December 31, 2022 was $2.6 million.

​

Significant Judgments

​

The Company determined that the majority of its contracts with customers contain one performance obligation. The Company markets the products and services as an integrated package building off its curriculum offerings. It does not market distinct products or services to be sold independently from the curriculum offering. The Company provides the significant service of integrating the goods and services into the operation of the school and education of its students, for which the customer has contracted.

​

The Company has determined that the time elapsed method is the most appropriate measure of progress towards the satisfaction of the performance obligation. Generally, the Company delivers the integrated products and services package over the course of the Company’s fiscal year. This package includes enrollment, marketing, teacher training, etc. in addition to the core curriculum and instruction. All of these activities are necessary and contribute to the overall education of its students, which occurs evenly throughout the year. Accordingly, the Company recognizes revenue on a straight-line basis.

​

The Company determined that the expected value method is the most appropriate method to account for variable consideration and the Company’s forecasting method is an estimation process that uses probability to determine expected funding. On a monthly basis, the Company estimates the total funds each school will receive in a particular school year and the amount of full-year school revenues and operating expenses to determine the amount of revenue the Company will recognize. Enrollment and state funding rates are key inputs to this estimate. The estimates are adjusted monthly, and a cumulative catch-up adjustment is recorded to revenue as necessary to reflect the total revenues earned to date to be proportional to the total revenues to be earned in the fiscal year. The Company builds in known constraints (i.e. enrollment, funding, net operating losses, etc.) into the estimate of the variable consideration to record the most probable amount.

​

Sales Taxes

Sales tax collected from customers is excluded from revenues. Collected but unremitted sales tax is included as part of accrued liabilities in the condensed consolidated balance sheets. Revenues do not include sales tax as the Company considers itself a pass-through conduit for collecting and remitting sales tax.

​

Consolidation

​

The condensed consolidated financial statements include the accounts of the Company, the wholly-owned and affiliated companies that the Company owns, directly or indirectly, and all controlled subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.

​

Investments in Marketable Securities

The Company’s marketable securities generally consist of bonds and other securities which are classified as held-to-maturity. The securities with maturities between three months and one year are classified as short-term and are included

in other current assets on the condensed consolidated balance sheets. The securities with maturities greater than one year are classified as long-term and are included in deposits and other assets on the condensed consolidated balance sheets. Held-to-maturity securities are recorded at their amortized cost. Interest income and dividends are recorded within the condensed consolidated statements of operations.

The Company reviews the held-to-maturity debt securities for declines in fair value below the amortized cost basis under the credit loss model of Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments – Credit Losses (“ASC 326”). Any decline in fair value related to a credit loss is recognized in the condensed consolidated statements of operations, with the amount of the loss limited to the difference between fair value and amortized cost. As of December 31, 2022 and June 30, 2022, the allowance for credit losses related to held-to-maturity debt securities was zero.

As of December 31, 2022, the Company’s marketable securities consisted of investments in corporate bonds, U.S. treasury notes and commercial paper. The short-term and long-term portions were $82.9 million and $21.0 million, respectively. The maturities of the Company’s long-term marketable debt securities range from one to two years. The following table summarizes the amortized cost, net carrying amount, and fair value disaggregated by class of instrument (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for

​

​

Net Carrying

​

​

Gross Unrealized

​

​

​

​

​

Amortized Cost

​

​

Credit Losses

​

​

Amount

​

​

Gains (Losses)

​

​

Fair Value

Corporate Bonds

$

57,820

​

$

-

​

$

57,820

​

$

(687)

​

$

57,133

U.S. Treasury Notes

​

26,256

​

​

-

​

​

26,256

​

​

(174)

​

​

26,082

Commercial Paper

​

19,811

​

​

-

​

​

19,811

​

​

-

​

​

19,811

Total

$

103,887

​

$

-

​

$

103,887

​

$

(861)

​

$

103,026

​

As of June 30, 2022, the Company’s marketable securities consisted of investments in corporate bonds, U.S. treasury notes and commercial paper. The short-term and long-term portions were $63.0 million and $21.7 million, respectively. The maturities of the Company’s long-term marketable debt securities range from one to two years. The following table summarizes the amortized cost, net carrying amount, and fair value disaggregated by class of instrument (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for

​

​

Net Carrying

​

​

Gross Unrealized

​

​

​

​

​

Amortized Cost

​

​

Credit Losses

​

​

Amount

​

​

Gains (Losses)

​

​

Fair Value

Corporate Bonds

$

50,067

​

$

-

​

$

50,067

​

$

(691)

​

$

49,376

U.S. Treasury Notes

​

16,399

​

​

-

​

​

16,399

​

​

(199)

​

​

16,200

Commercial Paper

​

18,186

​

​

-

​

​

18,186

​

​

-

​

​

18,186

Total

$

84,652

​

$

-

​

$

84,652

​

$

(890)

​

$

83,762

​

Allowance for Doubtful Accounts

The Company maintains an allowance for uncollectible accounts primarily for estimated losses resulting from the inability or failure of individual customers to make required payments. The Company maintains an allowance under ASC 326 based on historical losses, changes in payment history, customer-specific information, current economic conditions, and reasonable and supportable forecasts of future economic conditions. The allowance under ASC 326 is updated as additional losses are incurred or information becomes available related to the customer or economic conditions.

​

The Company writes-off accounts receivable based on the age of the receivable and the facts and circumstances surrounding the customer and reasons for non-payment. Actual write-offs might differ from the recorded allowance.

​

Inventories

​

Inventories consist primarily of textbooks and curriculum materials, a majority of which are supplied to virtual and blended public schools, and utilized directly by students. Inventories represent items that are purchased and held for sale and are recorded at the lower of cost (first-in, first-out method) or net realizable value. The Company classifies its inventory

as current or long-term based on the holding period. As of December 31, 2022 and June 30, 2022, $10.8 million and $11.2 million, respectively, of inventory, net of reserves, was deemed long-term and included in deposits and other assets on the condensed consolidated balance sheets. The provision for excess and obsolete inventory is established based upon the evaluation of the quantity on hand relative to demand. The excess and obsolete inventory reserve was $7.5 million and $6.5 million at December 31, 2022 and June 30, 2022, respectively.

​

Other Current Assets

​

Other current assets consist primarily of textbooks, curriculum materials and other supplies which are expected to be returned upon the completion of the school year. Materials not returned are expensed as part of instructional costs and services. Additionally, other current assets include short-term marketable securities.

​

Property and Equipment

​

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is calculated using the straight-line method over the estimated useful life of the asset (or the lesser of the term of the lease and the estimated useful life of the asset under the finance lease). Amortization of assets capitalized under finance lease arrangements is included in depreciation expense. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful life of the asset. The determination of the lease term is discussed below under “Leases.”

​

Property and equipment are depreciated over the following useful lives:

​

​

​

​

​

    

Useful Life

Student and state testing computers and printers

​

3 - 5 years

Computer hardware

​

3 - 7 years

Computer software

​

3 - 5 years

Web site development

​

3 years

Office equipment

​

5 years

Furniture and fixtures

​

7 years

Leasehold improvements

​

Shorter of useful life or term of the lease

​

The Company makes an estimate of unreturned student computers and printers based on an analysis of recent trends of returns.  The Company recorded accelerated depreciation of $1.4 million and $1.3 million for the three months ended December 31, 2022 and 2021, respectively, and $3.1 million and $1.9 million for the six months ended December 31, 2022 and 2021, respectively, related to unreturned student computers and printers.

​

Depreciation expense, including accelerated depreciation, related to computers and printers provided to students reflected in instructional costs and services for the three months ended December 31, 2022 and 2021 was $10.3 million and $9.8 million, respectively, and $20.6 million and $17.9 million, respectively, during the six months ended December 31, 2022 and 2021. Depreciation expense related to property and equipment reflected in selling, general, and administrative expenses for the three months ended December 31, 2022 and 2021 was $1.0 million and $1.2 million, respectively and $2.6 million and $2.3 million, respectively, during the six months ended December 31, 2022 and 2021.

​

The Company fully expenses computer peripheral equipment (e.g., keyboards, mouses) upon purchase as recovery has been determined to be uneconomical. These expenses totaled $0.6 million and $2.5 million for the three months ended December 31, 2022 and 2021, respectively, and $1.8 million and $7.3 million for the six months ended December 31, 2022 and 2021, respectively, and are recorded as instructional costs and services.

​

Capitalized Software Costs

​

The Company develops software for internal use. Software development costs incurred during the application development stage are capitalized. The Company amortizes these costs over the estimated useful life of the software, which is generally three years. Capitalized software development costs are stated at cost less accumulated amortization.

​

Capitalized software additions totaled $21.4 million and $19.3 million for the six months ended December 31, 2022 and 2021, respectively. The Company recorded amortization expense related to capitalized software of $7.4 million and $5.9 million during the three months ended December 31, 2022 and 2021, respectively, and $13.1 million and $12.1 million during the six months ended December 31, 2022 and 2021, respectively, within instructional costs and services. Amortization expense related to capitalized software reflected in selling, general, and administrative expenses during the three months ended December 31, 2022 and 2021 was $1.3 million and $1.3 million, respectively and $2.7 million and $2.6 million, respectively, during the six months ended December 31, 2022 and 2021.

​

Capitalized Curriculum Development Costs

​

The Company internally develops curriculum, which is primarily provided as online content and accessed via the Internet. The Company also creates textbooks and other materials that are complementary to online content.

​

The Company capitalizes curriculum development costs incurred during the application development stage, as well as the design and deployment phases of the project. As a result, a significant portion of the Company’s courseware development costs qualify for capitalization due to the concentration of its development efforts on the content of the courseware. Capitalization ends when a course is available for general release to its customers, at which time amortization of the capitalized costs begins. The period of time over which these development costs are amortized is generally five years.

​

Total capitalized curriculum development additions were $9.5 million and $7.5 million for the six months ended December 31, 2022 and 2021, respectively. These amounts are recorded on the condensed consolidated balance sheets net of amortization charges. Amortization expense for the three months ended December 31, 2022 and 2021 was $4.1 million and $3.8 million, respectively, and $8.2 million and $8.0 million for the six months ended December 31, 2022 and 2021, respectively, and is recorded in instructional costs and services.

​

Leases

​

The Company’s principal leasing activities include student computers and peripherals, classified as finance leases, and facilities, classified as operating leases.

​

Leases are classified as operating leases unless they meet any of the criteria below to be classified as a finance lease:

​

●the lease transfers ownership of the asset at the end of the lease;
●the lease grants an option to purchase the asset which the lessee is expected to exercise;
●the lease term reflects a major part of the asset’s economic life;
●the present value of the lease payments equals or exceeds the fair value of the asset; or
●the asset is specialized with no alternative use to the lessor at the end of the term.

​

Finance Leases

​

The Company enters into agreements to finance the purchase of student computers and peripherals provided to students of its schools. Individual leases typically include 3-year payment terms, at varying rates. The Company pledges the assets financed to secure the outstanding leases.

​

Operating Leases

​

The Company enters into agreements for facilities that serve as offices for its headquarters and school operations. Lease terms vary between 1 and 11 years. Certain leases include renewal options, usually based upon current market rates,

as well as termination rights. The Company performs an evaluation of each lease to determine if the lease payments included in the renewal option should be included in the initial measurement of the lease liability.

​

Discount Rate

​

The present value of the lease payments is calculated using either the rate implicit in the lease, or the lessee’s incremental borrowing rate, over the lease term. For the Company’s finance leases, the stated rate is defined within the lease terms; while for the Company’s operating leases, the rate is not implicit. For operating leases, the Company uses its incremental borrowing rate as the discount rate; determined as the Company’s borrowing rate on a collateralized basis for a similar term and amount to the term and amount of the lease. The Company’s current incremental borrowing rate of 4.42% is based upon its agreements used for its finance leases. The incremental borrowing rate is subsequently reassessed upon modification of its leasing arrangements or with the execution of a new lease agreement.

​

Policy Elections

​

Short-term Leases

​

The Company has elected as an on-going accounting policy election not to record a right-of-use asset or lease liability on its short-term facility leases of 12 months or less, and will expense its lease payments on a straight-line basis over the lease term. The accounting policy election is made by class of underlying asset to which the right of use relates. The Company has elected to apply the accounting policy election only to operating leases.

​

Income Taxes

​

Deferred tax assets and liabilities are computed based on the difference between the financial reporting and income tax bases of assets and liabilities using the enacted marginal tax rate. The net deferred tax asset is reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the net deferred tax asset will not be realized.

​

Goodwill and Intangible Assets

​

The Company records as goodwill the excess of the purchase price over the fair value of the identifiable net assets acquired. Finite-lived intangible assets acquired in business combinations subject to amortization are recorded at their fair value. Finite-lived intangible assets include trade names, acquired customers and distributors, developed technology and non-compete agreements. Such intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense for the three months ended December 31, 2022 and 2021 was $3.3 million and $3.2 million, respectively, and $6.6 million and $6.4 million for the six months ended December 31, 2022 and 2021, respectively, and is included within selling, general, and administrative expenses in the condensed consolidated statements of operations. Future amortization of intangible assets is expected to be $6.5 million, $12.1 million, $10.9 million, $9.7 million, and $8.1 million in the fiscal years ending June 30, 2023 through June 30, 2027, respectively, and $35.9 million thereafter.

​

The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset.

​

The Company has one reporting unit. The process for testing goodwill and intangible assets with indefinite lives for impairment is performed annually, as well as when an event triggering impairment may have occurred. Companies are also allowed to qualitatively assess goodwill impairment through a screening process which would permit companies to forgo the quantitative impairment test as part of their annual goodwill impairment process. The Company performs its annual assessment on May 31st which is then updated for any changes in condition as of June 30th.

​

During the three and six months ended December 31, 2022 and 2021, there were no events or changes in circumstances that would indicate that the carrying amount of the goodwill was impaired.

The following table represents the balance of the Company’s intangible assets as of December 31, 2022 and June 30, 2022:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

June 30, 2022

($ in millions)

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

Trade names

    

$

85.1

    

$

(25.9)

    

$

59.2

​

$

85.1

​

$

(23.1)

​

$

62.0

Customer and distributor relationships

​

​

39.8

​

​

(27.4)

​

​

12.4

​

​

38.9

​

​

(25.3)

​

​

13.6

Developed technology

​

​

22.0

​

​

(10.5)

​

​

11.5

​

​

21.7

​

​

(8.9)

​

​

12.8

Other

​

​

1.4

​

​

(1.1)

​

​

0.3

​

​

1.4

​

​

(1.1)

​

​

0.3

Total

​

$

148.3

​

$

(64.9)

​

$

83.4

​

$

147.1

  

$

(58.4)

​

$

88.7

​

Impairment of Long-Lived Assets

​

Long-lived assets include property, equipment, right-of-use assets, capitalized curriculum and software developed or obtained for internal use. Management reviews the Company’s recorded long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The Company determines the extent to which an asset may be impaired based upon its expectation of the asset’s future usability as well as on a reasonable assurance that the future cash flows associated with the asset will be in excess of its carrying amount. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset. During the three and six months ended December 31, 2022 and 2021, there were no events or changes in circumstances that may indicate that the carrying amount of the long-lived assets may not be recoverable.

​

Fair Value Measurements

​

Fair value is the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. Measurements are described in a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

​

The three levels of inputs used to measure fair value are:

​

Level 1:   Inputs based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

​

Level 2:   Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

​

Level 3:   Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.

​

The carrying values reflected in the condensed consolidated balance sheets for cash and cash equivalents, receivables, and short-term debt approximate their fair values, as they are largely short-term in nature. The Tallo, Inc. convertible note is discussed in more detail in Note 11, “Acquisitions and Investments.” As of December 31, 2022, the estimated fair value of the long-term debt was $377.2 million. The Company estimated the fair value based on the quoted market prices in an inactive market on the last day of the reporting period (Level 2). The long-term debt, comprised of the Company’s convertible senior notes due 2027, is recorded at face value less the unamortized debt issuance costs on its condensed consolidated balance sheet, and is discussed in more detail in Note 6, “Debt.” As of December 31, 2022, the estimated fair value of the Company’s marketable securities was $103.0 million. The Company estimated the fair value based on the

quoted market prices in an inactive market on the last day of the reporting period (Level 2). The marketable securities are discussed in more detail in Note 3, “Summary of Significant Accounting Policies - Investments in Marketable Securities.”

​

On November 30, 2020, the Company acquired 100% of MedCerts in exchange for $70.0 million and estimated contingent consideration of $10.8 million. During fiscal year 2021 and 2022, the Company recorded an aggregate expense of $0.5 million to adjust its estimate of the fair value of the contingent consideration to $11.3 million. During the three months ended September 30, 2022, the Company paid $7.0 million to settle the contingent consideration and recorded a gain of $4.3 million. The gain is recorded within selling, general, and administrative expenses on the condensed consolidated statements of operations.

​

There were no assets or liabilities measured at fair value on a recurring basis as of December 31, 2022.

​

The following table summarizes certain fair value information at June 30, 2022 for assets or liabilities measured at fair value on a recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

Fair Value Measurements Using:

 

​

​

 

​

Quoted Prices

​

​

​

​

 

​

​

 

​

in Active

​

Significant

​

 

 

​

​

 

​

Markets for

​

Other

​

Significant

 

​

​

 

​

Identical

​

Observable

​

Unobservable

 

​

​

 

​

Assets

​

Input

​

Inputs

Description

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

​

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,290

​

$

—

​

$

—

​

$

11,290

Convertible note received in acquisition

​

$

889

​

$

—

​

$

—

​

$

889

​

There was no activity related to the Company’s fair value measurements categorized as Level 3 during the three months ended December 31, 2022.

​

The following table presents activity related to the Company’s fair value measurements categorized as Level 3 in the valuation hierarchy, valued on a recurring basis, for the three months ended December 31, 2021 and six months ended December 31, 2022 and 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 2021

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Unrealized

​

Fair Value

Description

    

September 30, 2021

    

and Settlements

    

(Gains) Losses

    

December 31, 2021

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,205

​

$

—

​

$

521

​

$

11,726

Convertible note received in acquisition

​

$

5,006

​

$

—

​

$

—

​

$

5,006

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Six Months Ended December 31, 2022

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Realized

​

Fair Value

Description

    

June 30, 2022

    

and Settlements

    

(Gains) Losses

    

December 31, 2022

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,290

​

$

(7,024)

​

$

(4,266)

​

$

—

Convertible note received in acquisition

​

​

889

​

​

(889)

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Six Months Ended December 31, 2021

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Unrealized

​

Fair Value

Description

    

June 30, 2021

    

and Settlements

    

(Gains) Losses

    

December 31, 2021

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,082

​

$

—

​

$

644

​

$

11,726

Convertible note received in acquisition

​

$

5,006

​

$

—

​

$

—

​

$

5,006

​

Net Income (Loss) Per Common Share

​

Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options and vesting of all dilutive unvested restricted stock awards. The dilutive effect of stock options and restricted stock awards was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options and restricted stock awards, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded as income tax expense when the stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock awards are not included in the computation of diluted net income (loss) per share when they are antidilutive. Common stock outstanding reflected in the Company’s condensed consolidated balance sheets includes restricted stock awards outstanding. The dilutive effect of the Company’s convertible debt is determined using the if-converted method when the Company’s stock is trading above the conversion price. However, based on the structure of the instrument and how it is settled upon conversion, it would produce a similar result as the previously applied treasury stock method.

​

The following schedule presents the calculation of basic and diluted net loss per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

  

2022

  

2021

  

2022

  

2021

​

​

​

(In thousands except share and per share data)

​

Basic net income per share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to common stockholders

​

$

50,705

​

$

42,004

​

$

28,033

​

$

36,121

​

Weighted average common shares  — basic

​

​

42,259,061

​

​

41,525,736

​

​

42,167,844

​

​

41,042,401

​

Basic net income per share

​

$

1.20

​

$

1.01

​

$

0.66

​

$

0.88

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Diluted net income per share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to common stockholders

​

$

50,705

​

$

42,004

​

$

28,033

​

$

36,121

​

Share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average common shares  — basic

​

​

42,259,061

​

​

41,525,736

​

​

42,167,844

​

​

41,042,401

​

Effect of dilutive stock options and restricted stock awards

​

​

288,273

​

​

437,663

​

​

434,561

​

​

1,371,427

​

Weighted average common shares  — diluted

​

​

42,547,334

​

​

41,963,399

​

​

42,602,405

​

​

42,413,828

​

Diluted net income per share

​

$

1.19

​

$

1.00

​

$

0.66

​

$

0.85

​

​

For the three months ended December 31, 2022 and 2021, 44,546 and 5,193 shares issuable in connection with stock options and restricted stock were excluded from the diluted income per common share calculation because the effect would have been antidilutive. For the six months ended December 31, 2022, 26,789 and 102,536 shares were excluded, respectively.
v3.22.4
Income Taxes
 6 Months Ended
Dec. 31, 2022
Income Taxes  
Income Taxes

4.   Income Taxes

​

The provision for income taxes is based on earnings reported in the condensed consolidated financial statements. A deferred income tax asset or liability is determined by applying currently enacted tax laws and rates to the expected reversal of the cumulative temporary differences between the carrying value of assets and liabilities for financial statement and income tax purposes. Deferred income tax expense or benefit is measured by the change in the deferred income tax asset or liability during the period. For the three months ended December 31, 2022 and 2021, the Company’s effective income tax rate was 27.1% and 27.5%, respectively, and for the six months ended December 31, 2022 and 2021, the rate was 28.8% and 26.5%, respectively.

​

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law. The Company has evaluated the business provisions in the CARES Act and adopted the deferral of the employer portion of the social security payroll tax (6.2%) outlined within. The deferral was effective from the enactment date through December 31, 2020. The deferred amount of $14.1 million will be paid in two installments, $7.05 million of the deferred amount was paid in December 2021 and the remaining $7.05 million was paid in December 2022.

​
v3.22.4
Finance and Operating Leases
 6 Months Ended
Dec. 31, 2022
Finance and Operating Leases  
Finance and Operating Leases

5.   Finance and Operating Leases

​

Finance Leases

​

The Company is a lessee under finance leases for student computers and peripherals under agreements with Banc of America Leasing & Capital, LLC (“BALC”) and CSI Leasing, Inc. (“CSI Leasing”). As of December 31, 2022 and June 30, 2022, the finance lease liability was $73.3 million and $66.3 million, respectively, with lease interest rates ranging from 1.52% to 5.83%. As of December 31, 2022 and June 30, 2022, the balance of the associated right-of-use assets was $51.0 million and $42.7 million, respectively. The right-of-use asset is recorded within property and equipment, net on the condensed consolidated balance sheets. Lease amortization expense associated with the Company’s finance leases is recorded within instructional costs and services on the condensed consolidated statements of operations.

​

The Company entered into an agreement with BALC in April 2020 for $25.0 million (increased to $41.0 million in July 2020) to provide financing for its leases through March 2021 at varying rates. The Company entered into additional agreements during fiscal year 2021 to provide financing of $54.0 million for its student computers and peripherals leases through October 2022 at varying rates. Individual leases with BALC include 36 month payment terms, fixed rates ranging from 1.52% to 5.83%, and a $1 purchase option at the end of each lease term. The Company has pledged the assets financed to secure the outstanding leases.

​

The Company entered into an agreement with CSI Leasing in August 2022 to provide financing for its leases. Individual leases under the agreement with CSI Leasing include 36-month payments terms, at varying rates. The Company did not enter into any individual leases under the agreement through December 31, 2022.

​

The following is a summary, as of December 31, 2022 and June 30, 2022, respectively, of the present value of the net minimum lease payments under the Company’s finance leases:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

December 31, 2022

 

June 30, 2022

​

​

    

(in thousands)

​

​

​

​

​

​

​

​

​

2023

​

$

24,022

​

$

38,600

​

2024

​

​

34,593

​

​

24,816

​

2025

​

​

14,244

​

​

4,468

​

2026

​

​

3,194

​

​

22

​

Total minimum payments

​

​

76,053

​

​

67,906

​

Less: imputed interest

​

​

(2,751)

​

​

(1,629)

​

Finance lease liability

​

​

73,302

​

​

66,277

​

Less: current portion of finance lease liability

​

​

(44,377)

​

​

(37,389)

​

Long-term finance lease liability

​

$

28,925

​

$

28,888

​

​

Operating Leases

​

The Company is a lessee under operating leases for various facilities to support the Company’s operations. As of December 31, 2022 and June 30, 2022, the operating lease liability was $79.1 million and $88.0 million, respectively. As of December 31, 2022 and June 30, 2022, the balance of the associated right-of-use assets was $75.8 million and $85.5 million, respectively. Lease expense associated with the Company’s operating leases is recorded within both instructional costs and services and selling, general, and administrative expenses on the condensed consolidated statements of operations.

​

Individual operating leases range in terms of 1 to 11 years and expire on various dates through fiscal year 2034 and the minimum lease payments are discounted using the Company’s incremental borrowing rate.

​

The following is a summary as of December 31, 2022 and June 30, 2022, respectively, of the present value of the minimum lease payments under the Company’s operating leases:

​

​

​

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

December 31, 2022

 

June 30, 2022

​

​

​

(in thousands)

​

​

​

​

​

​

​

​

​

2023

​

$

7,321

​

$

15,120

​

2024

​

​

16,115

​

​

16,638

​

2025

​

​

15,436

​

​

16,168

​

2026

​

​

12,051

​

​

12,900

​

2027

​

​

8,518

​

​

8,797

​

Thereafter

​

​

27,455

​

​

27,447

​

Total minimum payments

​

​

86,896

​

​

97,070

​

Less: imputed interest

​

​

(7,788)

​

​

(9,113)

​

Operating lease liability

​

​

79,108

​

​

87,957

​

Less: current portion of operating lease liability

​

​

(13,281)

​

​

(12,830)

​

Long-term operating lease liability

​

$

65,827

​

$

75,127

​

​

The Company is subleasing one of its facilities through July 2023, one through November 2024 and one through December 2025. Sublease income is recorded as an offset to the related lease expense within both instructional costs and services and selling, general, and administrative expenses on the condensed consolidated statements of operations. The following is a summary as of December 31, 2022 and June 30, 2022, respectively, of the expected sublease income:

​

​

​

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

December 31, 2022

 

June 30, 2022

​

​

​

(in thousands)

​

​

​

​

​

​

​

​

​

2023

​

$

698

​

$

1,396

​

2024

​

​

665

​

​

665

​

2025

​

​

412

​

​

412

​

2026

​

​

140

​

​

140

​

Total sublease income

​

$

1,915

​

$

2,613

​

​

The following is a summary of the Company’s lease cost, weighted-average remaining lease term, weighted-average discount rate and certain other cash flows as it relates to its operating leases for the three and six months ended December 31, 2022 and 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

​

2022

  

2021

​

2022

  

2021

​

​

​

(in thousands)

​

Lease cost

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Finance lease cost:

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortization of right-of-use assets

​

$

10,018

​

$

9,368

​

$

19,952

​

$

16,988

​

Interest on lease liabilities

​

​

507

​

​

445

​

​

895

​

​

862

​

Instructional costs and services:

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating lease cost

​

​

2,640

​

​

3,931

​

​

6,354

​

​

7,866

​

Short-term lease cost

​

​

31

​

​

16

​

​

56

​

​

35

​

Sublease income

​

​

(270)

​

​

(247)

​

​

(552)

​

​

(579)

​

Selling, general, and administrative expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating lease cost

​

​

586

​

​

1,777

​

​

1,172

​

​

3,443

​

Short-term lease cost

​

​

47

​

​

4

​

​

140

​

​

9

​

Sublease income

​

​

(80)

​

​

(182)

​

​

(160)

​

​

(311)

​

Total lease cost

​

$

13,479

​

$

15,112

​

$

27,857

​

$

28,313

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other information

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash paid for amounts included in the measurement of lease liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating cash flows from operating leases

​

$

(3,361)

​

$

(5,341)

​

$

(5,966)

​

$

(10,662)

​

Financing cash flows from finance leases

​

​

(10,624)

​

​

(7,724)

​

​

(19,938)

​

​

(14,744)

​

Right-of-use assets obtained in exchange for new finance lease liabilities

​

​

5,305

​

​

6,898

​

​

25,212

​

​

20,881

​

Right-of-use assets obtained in exchange for new operating lease liabilities

​

​

—

​

​

—

​

​

576

​

​

6,805

​

Weighted-average remaining lease term - finance leases

​

​

​

​

​

​

​

​

1.84

yrs.

​

2.27

yrs.

Weighted-average remaining lease term - operating leases

​

​

​

​

​

​

​

​

6.35

yrs.

​

6.73

yrs.

Weighted-average discount rate - finance leases

​

​

​

​

​

​

​

​

3.31

%

​

2.40

%

Weighted-average discount rate - operating leases

​

​

​

​

​

​

​

​

2.77

%

​

2.76

%

​
v3.22.4
Debt
 6 Months Ended
Dec. 31, 2022
Debt  
Debt

6.   Debt

​

The following is a summary, as of December 31, 2022 and June 30, 2022, respectively, of the components of the Company’s outstanding long-term debt:

​

​

​

​

​

​

​

​

​

    

​

​

​

​

​

​

    

December 31, 2022

​

June 30, 2022

​

​

(in thousands)

​

​

​

​

​

​

​

Convertible Senior Notes due 2027

​

$

420,000

​

$

420,000

Less: unamortized debt issuance costs

​

​

(7,740)

​

​

(8,562)

Total debt

​

​

412,260

​

​

411,438

Less: current portion of debt

​

​

—

​

​

—

Long-term debt

​

$

412,260

​

$

411,438

​

​

Convertible Senior Notes due 2027

In August and September 2020, the Company issued $420.0 million aggregate principal amount of 1.125% Convertible Senior Notes due 2027 (“Notes”). The Notes are governed by an indenture (the “Indenture”) between the Company and U.S. Bank National Association, as trustee. The net proceeds from the offering of the Notes were approximately $408.6 million after deducting the underwriting fees and other expenses paid by the Company.

The Notes bear interest at a rate of 1.125% per annum, payable semi-annually in arrears on March 1st and September 1st of each year, beginning on March 1, 2021. The Notes will mature on September 1, 2027. During the three months ended December 31, 2022 and 2021, the Company recorded coupon interest expense of $1.2 million and $1.2 million, respectively, and $2.4 million and $2.4 million, respectively, for the six months ended December 31, 2022 and 2021.

​

The Company incurred debt issuance costs of $11.4 million which are amortized over the contractual term of the Notes. During the three months ended December 31, 2022 and 2021, the Company recorded interest expense related to the amortization of the debt issuance costs of $0.4 million and $0.4 million, respectively, and $0.8 million and $0.8 million, respectively, during the six months ended December 31, 2022 and 2021.

​

Before June 1, 2027, noteholders will have the right to convert their Notes only upon the occurrence of certain events. After June 1, 2027, noteholders may convert their Notes at any time at their election until two days prior to the maturity date. The Company will settle conversions by paying cash up to the outstanding principal amount, and at the Company’s election, will settle the conversion spread by paying or delivering cash or shares of its common stock, or a combination of cash and shares of its common stock. The initial conversion rate is 18.9109 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $52.88 per share of common stock (lower strike price). The Notes will be redeemable at the Company’s option at any time after September 6, 2024 at a cash redemption price equal to the principal amount of the Notes, plus accrued and unpaid interest, subject to certain stock price hurdles as discussed in the Indenture.

​

In connection with the Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain counterparties. The Capped Call Transactions are expected to cover the aggregate number of shares of the Company’s common stock that initially underlie the Notes, and are expected to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes. The upper strike price of the Capped Call Transactions is $86.174 per share. The cost of the Capped Call Transactions was $60.4 million and was recorded within additional paid-in capital.
v3.22.4
Credit Facility
 6 Months Ended
Dec. 31, 2022
Credit Facility  
Credit Facility

7.   Credit Facility

​

On January 27, 2020, the Company entered into a $100.0 million senior secured revolving credit facility (“Credit Facility”) to be used for general corporate operating purposes with PNC Capital Markets LLC. The Credit Facility has a five-year term and incorporates customary financial and other covenants, including but not limited to a maximum leverage ratio and a minimum interest coverage ratio. The majority of the Company’s borrowings under the Credit Facility were at LIBOR plus an additional rate ranging from 0.875% - 1.50% based on the Company’s leverage ratio as defined in the agreement. The Credit Facility is secured by the Company’s assets. The Credit Facility agreement allows for an amendment to establish a new benchmark interest rate when LIBOR is discontinued during the five-year term. As of December 31, 2022, the Company was in compliance with the financial covenants. As part of the proceeds received from the Notes, the Company repaid its $100.0 million outstanding balance and as of December 31, 2022, the Company had no amounts outstanding on the Credit Facility. The Credit Facility also includes a $200.0 million accordion feature.
v3.22.4
Equity Incentive Plan
 6 Months Ended
Dec. 31, 2022
Equity Incentive Plan  
Equity Incentive Plan

​

8.   Equity Incentive Plan

​

On December 9, 2022, the Company’s stockholders approved an amendment and restatement of the 2016 Equity Incentive Award Plan (the “2016 Plan”). The amended and restated 2016 Plan reflects an increase in the number of shares of common stock available for issuance by 1,045,000 shares, the removal of certain provisions that were otherwise required for awards to qualify as performance-based compensation under an exception to Section 162(m) of the Internal Revenue

Code of 1986, as amended, prior to its repeal, an extension of the term of the amended and restated 2016 Plan to October 7, 2032, an increase to the limit on the number of shares that may be issued upon the exercise of incentive stock options, and a prohibition on the payment of dividends and dividend equivalents on unvested awards.

​

The amended and restated 2016 Plan is designed to attract, retain and motivate employees who make important contributions to the Company by providing such individuals with equity ownership opportunities. Awards granted under the Plan may include stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. Under the amended and restated 2016 Plan, unissued shares related to forfeited or cancelled awards granted under the amended and restated 2016 Plan or awards granted under the Company’s 2007 Equity Incentive Award Plan (the “Prior Plan”) (to the extent such awards granted under the Prior Plan were outstanding as of December 15, 2016 and were forfeited or cancelled prior to September 19, 2022), will again be available for issuance under the amended and restated 2016 Plan.  Notwithstanding the foregoing, shares tendered to pay the exercise price or tax withholding with respect to a stock option, or shares that are not issued in connection with the settlement of a stock appreciation right on exercise thereof, or shares purchased on the open market with the cash proceeds from the exercise of options will not again be available for issuance under the amended and restated 2016 Plan.

​

As of December 31, 2022, the remaining aggregate number of shares of the Company’s common stock authorized for future issuance under the amended and restated 2016 Plan was 2,457,533. As of December 31, 2022, there were 1,666,099 shares of the Company’s common stock that remain outstanding or nonvested under the amended and restated 2016 Plan and Prior Plan.

​

Compensation expense for all equity-based compensation awards is based on the grant-date fair value. The Company recognizes these compensation costs on a straight-line basis over the requisite service period, which is generally the vesting period of the award. The vesting of performance-based awards is contingent on the achievement of certain performance metrics. Compensation expense is recognized retroactively, through a cumulative catch-up adjustment, when the performance conditions are satisfied or when the Company determines that it is probable that the performance conditions will be satisfied. The amount of compensation expense recognized for a performance-based award is affected by the level of achievement attained. Management has established three levels of attainment: threshold, target, and outperform. Stock-based compensation expense is recorded within selling, general, and administrative expenses on the consolidated statements of operations.

​

Stock Options

​

Each stock option is exercisable pursuant to the vesting schedule set forth in the stock option agreement granting such stock option, generally over four years. No stock option shall be exercisable after the expiration of its option term. The Company has granted stock options under the Prior Plan and the Company has also granted stock options to executive officers under stand-alone agreements outside the Prior Plan.

​

Stock option activity including stand-alone agreements during the six months ended December 31, 2022 was as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

    

​

​

    

Weighted

    

​

​

 

​

​

​

​

Weighted

​

Average

​

​

​

 

​

​

​

​

Average

​

Remaining

​

Aggregate

 

​

​

​

​

Exercise

​

Contractual

​

Intrinsic

 

​

​

Shares

​

Price

​

Life (Years)

​

Value

 

Outstanding, June 30, 2022

​

1,350

​

$

14.77

​

0.98

​

$

35,127

​

Granted

​

—

​

​

—

​

​

​

​

​

​

Exercised

​

(675)

​

​

14.77

​

​

​

​

​

​

Forfeited or canceled

​

—

​

​

—

​

​

​

​

​

​

Outstanding and exercisable, December 31, 2022

​

675

​

$

14.77

​

0.56

​

$

11,144

​

​

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last day of the period and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on

December 31, 2022. The amount of aggregate intrinsic value will change based on the fair market value of the Company’s stock. The total intrinsic value of options exercised during the six months ended December 31, 2022 and 2021 was $0.0 million and $0.2 million, respectively.

​

As of December 31, 2022, there was no unrecognized compensation expense related to nonvested stock options granted. During the three and six months ended December 31, 2022 and 2021, the Company recognized zero stock-based compensation expense related to stock options.

Restricted Stock Awards

​

The Company has approved grants of restricted stock awards (“RSA”) pursuant to the Plan and Prior Plan. Under the Plan and Prior Plan, employees, outside directors and independent contractors are able to participate in the Company’s future performance through the awards of restricted stock. Each RSA vests pursuant to the vesting schedule set forth in the restricted stock agreement granting such RSAs, generally over three years. Under the Plan and Prior Plan, there have been no awards of restricted stock to independent contractors.

​

Restricted stock award activity during the six months ended December 31, 2022 was as follows:

​

​

​

​

​

​

​

​

​

    

​

    

Weighted

 

​

​

​

​

Average

 

​

​

​

​

Grant-Date

​

​

​

Shares

​

Fair Value

 

Nonvested, June 30, 2022

​

1,131,466

​

$

33.27

​

Granted

​

537,096

​

​

38.32

​

Vested

​

(548,315)

​

​

31.91

​

Canceled

​

(64,004)

​

​

36.01

​

Nonvested, December 31, 2022

​

1,056,243

​

$

36.63

​

​

Performance-Based Restricted Stock Awards (included above)

​

During the six months ended December 31, 2022, zero new performance-based restricted stock awards were granted and in total, 44,128 remain nonvested at December 31, 2022. During the six months ended December 31, 2022, 330,237 performance-based restricted stock awards vested. Vesting of the performance-based restricted stock awards is contingent on the achievement of certain financial performance goals and service vesting conditions.

During fiscal year 2020, the Company granted 358,294 performance-based restricted stock awards to the Company’s then CEO with a weighted average grant-date fair value of $27.91 per share. These awards were granted pursuant to the Plan and are subject to the achievement of target free cash flow metrics in each of the fiscal years 2020 through 2022. The metrics are measured at the end of each fiscal year; however if either of the first two tranches are not achieved, the awards may still vest if the free cash flow metric in aggregate is met over the three-year life of the award. In August 2021, the second tranche was achieved at above target resulting in the vesting of 119,431 shares. In August 2022, the first and third tranches were achieved at target resulting in the vesting of 238,863 shares.

Service-Based Restricted Stock Awards (included above)

​

During the six months ended December 31, 2022, 537,096 new service-based restricted stock awards were granted and in total, 1,012,116 remain nonvested at December 31, 2022. During the six months ended December 31, 2022, 218,078 service-based restricted stock awards vested.

​

Summary of All Restricted Stock Awards

​

As of December 31, 2022, there was $28.0 million of total unrecognized compensation expense related to nonvested restricted stock awards. The cost is expected to be recognized over a weighted average period of 2.0 years. The fair value of restricted stock awards granted for the six months ended December 31, 2022 and 2021 was $20.9 million and $15.3 million, respectively. The total fair value of shares vested for the six months ended December 31, 2022 and 2021 was

$20.4 million and $15.4 million, respectively. During the three months ended December 31, 2022 and 2021, the Company recognized $3.9 million and $4.2 million, respectively, of stock-based compensation expense related to restricted stock awards. During the six months ended December 31, 2022 and 2021, the expense was $8.5 million and $9.5 million, respectively.

​

Performance Share Units (“PSU”)

​

The Company has approved grants of performance share units (“PSU”) pursuant to the Plan. Each PSU is earned through the achievement of a performance-based metric, combined with the continuation of employee service over a defined period. The level of performance determines the number of PSUs earned, and is generally measured against threshold, target and outperform achievement levels of the award. Each PSU represents the right to receive one share of the Company’s common stock, or at the option of the Company, an equivalent amount of cash, and is classified as an equity or liability award. When the grant is a fixed monetary amount, and the number of shares is not determined until achievement and the value of the Company’s stock on that day, the PSU is a liability-classified award. Each PSU vests pursuant to the vesting schedule found in the respective PSU agreement.

​

In addition to the performance conditions of the PSUs, there is a service vesting condition which is dependent upon continuing service by the grantee as an employee of the Company, unless the grantee is eligible for earlier vesting upon a change in control and qualifying termination, as defined by the PSU agreement. PSUs are generally subject to graduated vesting schedules and stock-based compensation expense is computed by tranche and recognized on a straight-line basis over the tranches’ applicable vesting period based on the expected achievement level.

​

Performance share unit activity (excluding liability-classified awards) during the six months ended December 31, 2022 was as follows:

​

​

​

​

​

​

​

​

​

​

​

Weighted

​

​

​

​

Average

​

​

​

​

Grant-Date

​

    

Shares

    

Fair Value

Nonvested, June 30, 2022

​

355,302

​

$

32.62

Granted

​

366,507

​

​

33.87

Vested

​

(119,467)

​

​

30.48

Canceled

​

(81,893)

​

​

25.89

Nonvested, December 31, 2022

​

520,449

​

$

35.06

​

Fiscal Year 2023 LTIP

​

During the six months ended December 31, 2022, the Company granted 289,640 PSUs at target under a Long Term Incentive Plan (“LTIP”) which are tied to operating income targets and stock price performance. These PSUs had a grant date fair value of $10.0 million, or a weighted average grant-date fair value of $34.41 per share. Fifty percent of the earned award is based on operating income performance (“Tranche #1) and fifty percent is based on the performance of the Company’s stock price (“Tranche #2), both of which will vest after achievement is certified during the first quarter of fiscal year 2026. The grant date fair value of Tranche #1 was remeasured in October 2022 as a result of a modification of the terms of the award. Originally, performance was tied to gross margin. The metric was changed to operating income to better align with shareholder feedback and technology industry and peer group common practice. The modification of the performance criteria from gross margin to operating income resulted in a new fair market value as of the modification date of $4.8 million, a decrease of $0.8 million. For Tranche #1, the level of performance will determine the number of PSUs earned as measured against threshold, target and outperform achievement levels. For Tranche #2, the number of PSUs will be earned based on the Company’s compounded annual stock price growth over a completed three-year performance period. In all cases, vesting is dependent upon continuing service by the grantee as an employee of the Company. The fair value of Tranche #2 was determined using a Monte Carlo simulation model and is amortized on a straight-line basis over the vesting period. Tranche #2 is a market-based award, and therefore is not subject to any probability assessment by the Company. The Company determined the likelihood of achievement of the performance condition for Tranche #1 is not

able to be determined at this time.

​

Fiscal Year 2022 LTIP

​

During fiscal year 2022, the Company granted 250,250 PSUs at target under a Long Term Incentive Plan (“LTIP”) which are tied to gross margin targets and stock price performance. These PSUs had a grant date fair value of $9.1 million, or a weighted average grant-date fair value of $36.30 per share. Fifty percent of the earned award is based on gross margin performance (“Tranche #1) and fifty percent is based on the performance of the Company’s stock price (“Tranche #2), both of which will vest after achievement is certified during the first quarter of fiscal year 2025. For Tranche #1, the level of performance will determine the number of PSUs earned as measured against threshold, target and outperform achievement levels. For Tranche #2, the number of PSUs will be earned based on the Company’s compounded annual stock price growth over a completed three-year performance period. In all cases, vesting is dependent upon continuing service by the grantee as an employee of the Company. The fair value of Tranche #2 was determined using a Monte Carlo simulation model and is amortized on a straight-line basis over the vesting period. Tranche #2 is a market-based award, and therefore is not subject to any probability assessment by the Company. The Company determined the likelihood of achievement of the performance condition for Tranche #1 is not able to be determined at this time.

​

Fiscal Year 2021 Tech Elevator MIP

​

During fiscal year 2021, the Company granted to the executive team of Tech Elevator a time-based award with a value of $4.0 million and a performance-based award with a target value of $4.0 million under a Management Incentive Plan (“MIP”). The time-based award vests equally over three years on the anniversary of the closing date of the acquisition of Tech Elevator which was November 30, 2020. During the second quarter of fiscal year 2022, one-third vested and was settled with the issuance of 38,575 PSUs. During the second quarter of fiscal year 2023, an additional one-third vested and was settled with the issuance of 37,886 PSUs. The performance-based award is tied to the achievement of certain revenue and EBITDA targets of Tech Elevator. Seventy percent of the award is based on Tech Elevator’s revenues for the calendar year 2023 (“Tranche #1”) and thirty percent of the earned award is based on Tech Elevator’s EBITDA for the calendar year 2023 (“Tranche #2”), both of which are expected to vest after achievement is certified in January 2024. The level of performance will determine the number of PSUs earned as measured against threshold and target achievement levels. In all cases, vesting is dependent upon continuing service by the grantee as an employee of the Company. The MIP is a liability-classified award. The Company determined the likelihood of achievement of the performance conditions is not able to be determined at this time.

​

Fiscal Year 2021 LTIP

​

During fiscal year 2021, the Company granted 111,450 PSUs at target under a LTIP which are tied to the achievement of certain individualized financial and non-financial performance targets. These PSUs had a grant date fair value of $2.7 million, or a weighted average grant-date fair value of $24.15 per share. In December 2022, achievement was certified related to two metrics – one at threshold and one at 123% of target. Forty percent, or 4,533 shares vested immediately and the additional sixty percent, or 6,797 shares will vest in December 2023, subject to continuing service by the grantee as an employee of the Company. The remaining shares tied to metrics that were not achieved were forfeited. The fiscal year 2021 LTIP is an equity-classified award.

​

Fiscal Year 2020 Galvanize TRIP

​

During fiscal year 2020, the Company granted to the executive team of Galvanize a target level of $12.3 million under a Transaction Related Incentive Plan (“TRIP”) which is tied to the achievement of certain revenue and EBITDA targets of Galvanize. Seventy percent of the earned award is based on the performance of Galvanize for the calendar year 2021 (“Tranche #1”) and thirty percent of the earned award is based on the performance of Galvanize for the calendar year 2022 (“Tranche #2”), both of which are expected to vest after achievement is certified in January following each of the calendar year ends. The revenue and EBITDA targets are split sixty percent and forty percent, respectively, for both tranches. In all cases, vesting is dependent upon continuing service by the grantee as an employee of the Company. The level of performance will determine the number of PSUs earned as measured against threshold, target and outperform achievement levels. In January 2022, the Company determined that the metrics for calendar year 2021 were not met and Tranche #1

was forfeited. In January 2023, the Company determined that the metrics for calendar year 2022 were not met and Tranche #2 was also forfeited. The TRIP is a liability-classified award.

​

Fiscal Year 2019 LTIP

​

During fiscal year 2019, the Company granted 263,936 PSUs at target under a LTIP which are tied to certain career learning revenue targets and enrollment levels, as well as students’ academic progress. These PSUs had a grant date fair value of $7.9 million, or a weighted average grant-date fair value of $30.05 per share. During fiscal year 2020, the Company granted an additional 34,030 PSUs at target with a grant date fair value of $0.8 million, or $23.51 per share. Forty-five percent of the earned award is based on students’ academic progress (“Tranche #1”) and twenty-five percent of the earned award is based on certain enrollment levels (“Tranche #2”). In October 2021, Tranche #2 achievement was certified at approximately 193% of target resulting in the vesting of 115,223 shares, while Tranche #1 was not achieved resulting in 107,397 forfeited shares. The remaining thirty percent of the earned award is based on certain revenue targets (“Tranche #3”). In August 2022, Tranche #3 achievement was certified at 200% of target resulting in the vesting of 77,048 shares.

​

Summary of All Performance Share Units

​

As of December 31, 2022, there was $7.7 million of total unrecognized compensation expense related to nonvested PSUs that are expected to vest based on the Company’s probability assumptions discussed above. The cost is expected to be recognized over a weighted average period of 2.2 years. During the three months ended December 31, 2022 and 2021, the Company recognized $1.0 million and ($3.6) million, respectively, of stock-based compensation expense related to PSUs. During the six months ended December 31, 2022 and 2021, the expense was $1.9 million and $(0.6) million, respectively. Included in the stock-based compensation expense above, for the three months ended December 31, 2022 and 2021 is $0.3 million and $0.3 million, respectively, and for the six months ended December 31, 2022 and 2021 is $0.6 million and $0.7 million, respectively, related to the Tech Elevator time-based portion of the MIP. This amount was recorded in accrued liabilities on the condensed consolidated balance sheets because it is a liability-classified award.

​

Deferred Stock Units (“DSU”)

​

The DSUs vest on the grant-date anniversary and are settled in the form of shares of common stock issued to the holder upon separation from the Company. DSUs are specific only to board members.

Deferred stock unit activity during the six months ended December 31, 2022 was as follows:

​

​

​

​

​

​

​

​

​

​

​

Weighted

​

​

​

​

Average

​

​

​

​

Grant-Date

​

    

Shares

    

Fair Value

Nonvested, June 30, 2022

​

69,117

​

$

24.27

Granted

​

19,614

​

​

33.03

Vested

​

—

​

​

—

Canceled

​

—

​

​

—

Nonvested, December 31, 2022

​

88,731

​

$

26.20

​

Summary of All Deferred Stock Units

​

As of December 31, 2022, there was $0.6 million of total unrecognized compensation expense related to nonvested DSUs. The cost is expected to be recognized over a weighted average period of 0.6 years. During the three months ended December 31, 2022 and 2021, the Company recognized $0.1 million and $0.1 million, respectively, of stock-based compensation expense related to DSUs. During the six months ended December 31, 2022 and 2021, the expense was $0.2 million and $0.2 million, respectively.

v3.22.4
Related Party Transactions
 6 Months Ended
Dec. 31, 2022
Related Party Transactions  
Related Party Transactions

9.   Related Party Transactions

​

The Company contributed to Future of School, a charity focused on access to quality education. Future of School is a related party as an executive officer of the Company serves on its Board of Directors. For the three months ended December 31, 2022 and 2021, contributions made by the Company to Future of School were zero and $0.2 million, respectively, and zero and $0.8 million, respectively, for the six months ended December 31, 2022 and 2021. In fiscal year 2019 and 2021, the Company accrued $2.5 million and $3.5 million, respectively, for contributions expected to be made in subsequent years. The amounts shown for the three and six months ended December 31, 2022 and 2021 reduced the remaining balance and as of December 31, 2022, $2.5 million remains outstanding as related to the fiscal year 2021 accrual.
v3.22.4
Commitments and Contingencies
 6 Months Ended
Dec. 31, 2022
Commitments and Contingencies  
Commitments and Contingencies

10.   Commitments and Contingencies

​

Litigation

​

In the ordinary conduct of the Company’s business, the Company is subject to lawsuits, arbitrations and administrative proceedings from time to time. The Company vigorously defends these claims; however, no assurances can be given as to the outcome of any pending legal proceedings. The Company believes, based on currently available information, that the outcome of any existing or known threatened proceedings, even if determined adversely, should not have a material adverse effect on its business, financial condition, liquidity or results of operations.

Securities Litigation

On November 19 and December 11, 2020, respectively, two putative securities class action lawsuits captioned Yun Chau Lee v. K12 Inc., et al, Case No. 1:20-cv-01419 (the “Lee Case”), and Jennifer Baig v. K12 Inc., et al, Case No. 1:20-cv-01528 (the “Baig Case”) were filed against the Company and two of its former officers in the United States District Court for the Eastern District of Virginia, purportedly on behalf of a class of persons who purchased or otherwise acquired the Company’s common stock between April 27, 2020 and September 18, 2020. On February 17, 2021, the District Court consolidated the Lee Case and the Baig Case under the caption In re K12 Inc. Securities Litigation, Case No. 1:20-cv-01419 (the “Consolidated Securities Class Action”), and appointed a lead plaintiff. The lead plaintiff filed a consolidated amended complaint on April 5, 2021, alleging violations by the Company and the individual defendants of Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated under the Exchange Act, and violations by the individual defendants of Section 20(a) of the Exchange Act. The complaint alleged, among other things, that the Company and the individual defendants made false or misleading statements and/or omitted to disclose material facts concerning the Company’s technological capabilities and expertise to support increased demand for virtual and blended education related to the global emergence of COVID-19, its cybersecurity protocols and protections, and its administrative support and training to teachers, students, and parents. The complaint sought unspecified monetary damages and other relief. The Company filed a motion to dismiss the complaint in its entirety on May 20, 2021, which the District Court granted, without prejudice, on September 16, 2021. The plaintiffs did not file a second amended complaint, but appealed the District Court’s dismissal decision to the United States Court of Appeals for the Fourth Circuit on December 1, 2021. On November 22, 2022, the Fourth Circuit issued a published opinion affirming the District Court’s decision and upholding the dismissal of the case.

On December 21, 2020 and April 30, 2021, respectively, related derivative lawsuits captioned Larry Shemen, et al v. Aida M. Alvarez, et al, Case No. 1:20-cv-01731 (the “Shemen Case”), and Wajid Ahmed v. Aida M. Alvarez, et al, Case No. 1:21-cv-00618 (the “Ahmed Case) were filed by three of the Company’s shareholders in the United States District Court for the District of Delaware. The plaintiffs purported to assert claims on the Company’s behalf against certain of its officers and directors for breach of fiduciary duty, unjust enrichment, and waste of corporate assets, and for violation of Sections 14(a) and 20(a) of the Exchange Act, based on substantially the same facts alleged in the Consolidated Securities Class Action. By stipulation of the parties on May 14, 2021, the Court consolidated the Shemen Case and the Ahmed Case under the caption In re Stride Inc. Derivative Litigation, Case No. 20-01731 (the “Consolidated Derivative Action”), designated as operative the complaint filed in the Ahmed Case, and stayed all proceedings pending final resolution of the Consolidated Securities Class Action. On December 29, 2022, upon stipulation of the parties, the Court approved the voluntary dismissal of the plaintiffs’ claims, without prejudice, in light of the dismissal of the Consolidated Securities Class Action.

Employment Agreements

The Company has entered into employment agreements with certain executive officers that provide for severance payments and, in some cases other benefits, upon certain terminations of employment. All agreements provide for employment on an “at-will” basis. If the employee resigns for “good reason” or is terminated without cause, the employee is entitled to salary continuation, and in some cases benefit continuation, for varying periods depending on the agreement.

​

Off-Balance Sheet Arrangements

​

As of December 31, 2022, the Company provided guarantees of approximately $0.3 million related to lease commitments on the buildings for certain of the Company’s schools.

​

In addition, the Company contractually guarantees that certain schools under the Company’s management will not have annual operating deficits and the Company’s management fees from these schools may be reduced accordingly to cover any school operating deficits.

​

Other than these lease and operating deficit guarantees, the Company did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

​

Risks and Uncertainties

​

Impacts of COVID-19 on Stride’s Business

​

While the long-term impact of the global emergence of COVID-19 is not estimable or determinable, in late fiscal year 2020 through fiscal year 2022, we experienced an increase in demand for our products and services. The effects of the pandemic or the ending of the pandemic on our business, are not estimable.

​

The Company continues to conduct business as usual with some modifications to employee travel, employee work locations, and cancellation of certain events. The Company will continue to actively monitor the situation and may take further actions that alter its business operations as may be required by federal, state or local authorities or that it determines is in the best interests of its employees, customers, partners, suppliers and stockholders. It is not clear what the potential effects any such alterations or modifications may have on the Company’s business, including the effects on its customers and prospects, or on its long-term financial results.
v3.22.4
Acquisitions and Investments
 6 Months Ended
Dec. 31, 2022
Acquisitions and Investments.  
Acquisitions and Investments

11.   Acquisitions and Investments

 

Investments in Limited Partnerships

​

The Company invested in three early stage funds focused on career education with a total commitment of $15.0 million. The Company invested in Rethink Education III, LP (“Rethink”) and New Markets Education Partners II, L.P. and New Markets Education Partners III, L.P. (collectively, “New Markets”) to support the development of new technologies that will advance online learning, to find early opportunities to adopt those new technologies at Stride, and to simultaneously achieve a reasonable return on investment. As of December 31, 2022, the Company has contributed an aggregate $10.4 million to these funds: $3.2 million is an investment in New Markets and is recorded at cost and will be adjusted, as necessary, for impairment; and $7.2 million is an investment in Rethink and is recorded under the equity method of accounting. The Company’s investments in these funds are included in deposits and other assets on the condensed consolidated balance sheets.

​

Investment in Tallo, Inc. and Acquisition of Assets

​

In August 2018, the Company made an initial investment of $6.7 million for a 39.5% minority interest in Tallo, Inc. (“Tallo”). In August 2020, the Company invested an additional $2.3 million which increased its minority interest to 46.1%. These investments in preferred stock, which contain additional rights over common stock and have no readily determinable fair value, were recorded at cost and will be adjusted, as necessary, for impairment.  In the event Tallo issues equity at a materially different price than what the Company paid, the Company would also assess changing the carrying value.  In conjunction with the Company’s initial investment in August 2018, Tallo also issued a convertible note to the Company for $5.0 million that is being accounted for as an available-for-sale debt security and adjusted to fair value quarterly. The note bears interest at the mid-term Applicable Federal Rate plus 25 bps per annum with a maturity of 48 months. The note is convertible at the Company’s option into 3.67 million Series D Preferred Shares that, combined with the shares resulting from the conversion of the accrued interest, would give the Company an effective ownership of 55% if exercised. In October 2021, the Company agreed to loan Tallo up to $3.0 million. This promissory note bears interest at 5% and has a maturity date of five years. The promissory note does not contain any means of conversion into additional ownership by the Company. During the second and third quarters of fiscal year 2022, the Company funded $3.0 million under the promissory note.

​

During fiscal year 2022, the Company adjusted its investment in Tallo preferred stock to fair value and recorded an impairment charge of $4.5 million to other income (expense), net on the consolidated statements of operations. Also, during fiscal year 2022, the Company recorded a credit loss expense of $4.1 million to reduce the carrying amount of the convertible note and $3.0 million to reduce the carrying amount of the promissory note. The credit loss expenses were recorded within selling, general, and administrative expenses on the consolidated statements of operations. Additionally, the Company reversed an aggregate $0.4 million of accrued interest on both instruments and made an accounting policy election to record this within interest income (expense), net on the consolidated statements of operations. During the year ended June 30, 2022, the Company’s investment in Tallo, the convertible note, and promissory note were included in deposits and other assets on the consolidated balance sheets.

​

On July 8, 2022, the Company purchased the assets of Tallo in exchange for $1.0 million, plus $0.4 million in working capital.  As part of the closing of the transaction, the promissory note was cancelled and the convertible note was converted into additional equity. That additional equity and previously held equity interests were cancelled, and combined with the cash, resulted in a purchase price of $7.3 million. The acquisition of Tallo further expands the Company’s ability to match students to internships, jobs, and scholarships with colleges and companies looking for talent. The acquisition has been accounted for as a business combination under the acquisition method of accounting, which results in acquired assets and assumed liabilities being measured at their fair values as of July 8, 2022, the acquisition date. The allocation of the purchase price resulted in goodwill of $5.7 million and intangible assets of $1.3 million, both of which are deductible for income tax purposes. The recognized goodwill is primarily associated with future customer relationships and an acquired assembled work force. The intangible assets primarily consist of customer relationships which will be amortized over 10 years. During the second quarter of fiscal year 2023, the Company made an adjustment to the allocation of the purchase price resulting in an increase of goodwill from $5.2 million to $5.7 million.
v3.22.4
Supplemental Disclosure of Cash Flow Information
 6 Months Ended
Dec. 31, 2022
Supplemental Disclosure of Cash Flow Information  
Supplemental Disclosure of Cash Flow Information

12.   Supplemental Disclosure of Cash Flow Information

​

​

​

​

​

​

​

​

​

 

​

Six Months Ended December 31, 

​

 

    

2022

    

2021

​

​

​

(In thousands)

​

Cash paid for interest

​

$

3,328

 

$

3,286

​

Cash paid for taxes

​

$

22,434

 

$

13,099

​

​

​

​

​

​

​

​

​

Supplemental disclosure of non-cash financing activities:

​

​

​

​

​

​

​

Right-of-use assets obtained from acquisitions

​

$

385

 

​

—

​

Right-of-use assets obtained in exchange for new finance lease liabilities

​

​

25,212

 

​

20,881

​

​

​

​

​

​

​

​

​

Supplemental disclosure of non-cash investing activities:

​

​

​

​

​

​

​

Stock-based compensation expense capitalized on software development

​

$

215

 

$

143

​

Stock-based compensation expense capitalized on curriculum development

​

​

44

 

​

57

​

Non-cash purchase price related to business combinations

​

​

5,861

​

​

1,145

​

​

​

​

​

​

​

​

​

Business combinations:

​

​

​

​

​

​

​

Acquired assets

​

$

1,132

​

$

464

​

Intangible assets

​

​

1,309

​

​

2,157

​

Goodwill

​

​

5,655

​

​

568

​

Assumed liabilities

​

​

(385)

​

​

(42)

​

Deferred revenue

​

​

(441)

​

​

(1,084)

​

​

​

​

​

​

​

​

​

​
v3.22.4
Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Dec. 31, 2022
Summary of Significant Accounting Policies  
Revenue Recognition

Revenue Recognition

​

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services using the following steps:

​

●identify the contract, or contracts, with a customer;
●identify the performance obligations in the contract;
●determine the transaction price;
●allocate the transaction price to the performance obligations in the contract; and
●recognize revenue when, or as, the Company satisfies a performance obligation.

​

Revenues related to the products and services that the Company provides to students in kindergarten through twelfth grade or adult learners are considered to be General Education or Career Learning based on the school or adult program in which the student is enrolled. General Education products and services are focused on core subjects, including math, English, science and history, for kindergarten through twelfth grade students to help build a common foundation of knowledge. Career Learning products and services are focused on developing skills to enter and succeed in careers in high-

growth, in-demand industries—including information technology, business, and health services, for students in middle school through high school and adult learners.

​

The majority of the Company’s contracts are with the following types of customers:

​

●a virtual or blended school whereby the amount of revenue is primarily determined by funding the school receives;
●a school or individual who licenses certain curriculum on a subscription or course-by-course basis; or
●an enterprise who contracts with the Company to provide job training.

​

Funding-based Contracts

​

The Company provides an integrated package of systems, services, products, and professional expertise that is administered together to support a virtual or blended public school. Contractual agreements generally span multiple years with performance obligations being isolated to annual periods which generally coincide with the Company’s fiscal year. Customers of these programs can obtain administrative support, information technology, academic support services, online curriculum, learning systems platforms and instructional services under the terms of a negotiated service agreement. The schools receive funding on a per student basis from the state in which the public school or school district is located. Shipments of materials for schools that occur in the fourth fiscal quarter and for the upcoming school year are recorded in deferred revenue.

​

The Company generates revenues under contracts with virtual and blended public schools and include the following components, where required:

​

●providing each of a school’s students with access to the Company’s online school and lessons;
●offline learning kits, which include books and materials to supplement the online lessons;
●the use of a personal computer and associated reclamation services;
●internet access and technology support services;
●instruction by a state-certified teacher; and
●management and technology services necessary to support a virtual or blended school. In certain contracts, revenues are determined directly by per enrollment funding.

​

To determine the pro rata amount of revenue to recognize in a fiscal quarter, the Company estimates the total expected funds each school will receive in a particular school year. Total funds for a school are primarily a function of the number of students enrolled in the school and established per enrollment funding levels, which are generally published on an annual basis by the state or school district. The Company reviews its estimates of funding periodically, and updates as necessary, by adjusting its year-to-date earned revenues to be proportional to the total expected revenues to be earned during the fiscal year. Actual school funding may vary from these estimates and the impact of these differences could impact the Company’s results of operations. Since the end of the school year coincides with the end of the Company’s fiscal year, annual revenues are generally based on actual school funding and actual costs incurred (including costs for the Company’s services to the schools plus other costs the schools may incur). The Company’s schools’ reported results are subject to annual school district financial audits, which incorporate enrollment counts, funding and other routine financial audit considerations. The results of these audits are incorporated into the Company’s monthly funding estimates for the three and six months ended December 31, 2022 and 2021. Historically, aggregate funding estimates differed from actual reimbursements by less than 2% of annual revenue, which may vary from quarter to quarter.

​

Each state and/or school district has variations in the school funding formulas and methodologies that it uses to estimate funding for revenue recognition at its respective schools. As the Company estimates funding for each school, it takes into account the state definition for count dates on which reported enrollment numbers will be used for per pupil funding. The parameters the Company considers in estimating funding for revenue recognition purposes include school district count definitions, withdrawal rates, new registrations, average daily attendance, special needs enrollment, academic progress, historical completion, student location, funding caps and other state specified categorical program funding.

​

Under the contracts where the Company provides products and services to schools, the Company is responsible for substantially all of the expenses incurred by the school and has generally agreed to absorb any operating losses of the schools in a given school year. These school operating losses represent the excess of costs incurred over revenues earned by the virtual or blended public school (the school’s expected funding), as reflected in its respective financial statements, including Company charges to the schools. To the extent a school does not receive sufficient funding for each student enrolled in the school, the school would still incur costs associated with serving the unfunded enrollment. If losses due to unfunded enrollments result in a net operating loss for the year that loss is reflected as a reduction in the revenues and net receivables that the Company collects from the school. A school net operating loss in one year does not necessarily mean the Company anticipates losing money on the entire contract with the school. However, a school’s net operating loss may reduce the Company’s ability to collect its management fees in full and recognized revenues are constrained to reflect the expected cash collections from such schools. The Company records the school’s estimated net operating loss against revenues based upon the percentage of actual revenues in the period to total estimated revenues for the fiscal year. Actual school net operating losses may vary from these estimates or revisions, and the impact of these differences could have a material impact on results of operations. For the three months ended December 31, 2022 and 2021, the Company’s revenues included a reduction for net school operating losses at the schools of $6.4 million and $12.3 million, respectively, and $16.6 million and $25.2 million for the six months ended December 31, 2022 and 2021, respectively. Because the Company has agreed to absorb any operating losses of the schools, the Company records the expenses incurred by the school as both revenue and expenses in the condensed consolidated statements of operations. Amounts recorded as revenues and expenses for the three months ended December 31, 2022 and 2021 were $123.0 million and $117.7 million, respectively, and for the six months ended December 31, 2022 and 2021 were $248.3 million and 231.6 million, respectively.

​

Subscription-based Contracts

​

The Company provides certain online curriculum and services to schools and school districts under subscription agreements. Revenues from the licensing of curriculum under subscription arrangements are recognized on a ratable basis over the subscription period. Revenues from professional consulting, training and support services are deferred and recognized ratably over the service period.

​

In addition, the Company contracts with individual customers who have access for one to two years to company-provided online curriculum and generally prepay for services to be received. Adult learners enroll in courses that provide specialized training in a specific industry. Each of these contracts are considered to be one performance obligation. The Company recognizes these revenues pro rata over the maximum term of the customer contract based on the defined contract price.

​

Enterprise Contracts

​

The Company provides job training over a specified contract period to enterprises. Each of these contracts are considered to be one performance obligation. The Company recognizes these revenues based on the number of students trained during the term of the contract based on the defined contract price.

​

Disaggregated Revenues

​

The revenue recognition related to the types of contracts discussed above can span both of the Company’s lines of revenue as shown below. For example, a funding-based contract may include both General Education and Career Learning students. In total, there is one performance obligation and revenue is recognized over the Company’s fiscal year. The revenue is then disaggregated between General Education and Career Learning based on the Company’s estimated full-year enrollment totals of each category. During the three months ended December 31, 2022 and 2021, approximately 90% and 88%, respectively, of the Company’s General Education revenues, and 100% and 99%, respectively, of the Company’s Middle – High School Career Learning revenues, were from funding-based contracts. During the six months ended December 31, 2022 and 2021, approximately 90% and 89%, respectively, of the Company’s General Education revenues,

and 99% and 99%, respectively, of the Company’s Middle – High School Career Learning revenues, were from funding-based contracts.

​

The following table presents the Company’s revenues disaggregated based on its two lines of revenue for the three and six months ended December 31, 2022 and 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

2022

   

2021

​

2022

  

2021

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

General Education

​

$

274,764

​

$

313,241

​

$

546,422

​

$

619,582

Career Learning

​

​

​

​

​

​

​

​

​

​

​

​

Middle - High School

​

​

153,795

​

​

75,287

​

​

279,330

​

​

146,699

Adult

​

​

29,876

​

​

20,979

​

​

57,833

​

​

43,452

Total Career Learning

​

​

183,671

​

​

96,266

​

​

337,163

​

​

190,151

Total Revenues

​

$

458,435

​

$

409,507

​

$

883,585

​

$

809,733

​

Concentration of Customers

​

During the three and six months ended December 31, 2022 and 2021, the Company had no contracts that represented greater than 10% of total revenues.

​

Contract Balances

​

The timing of revenue recognition, invoicing, and cash collection results in accounts receivable, unbilled receivables (a contract asset) and deferred revenue (a contract liability) in the condensed consolidated balance sheets. Accounts receivable are recorded when there is an executed customer contract and the customer is billed. An allowance is recorded to reflect expected losses at the time the receivable is recorded. The collectability of outstanding receivables is evaluated regularly by the Company to determine if additional allowances are needed. Unbilled receivables are created when revenue is earned prior to the customer being billed. Deferred revenue is recorded when customers are billed or cash is collected in advance of services being provided.

​

The opening and closing balance of the Company’s accounts receivable, unbilled receivables and deferred revenue are as follows:

​

​

​

​

​

​

​

​

​

​

​

December 31, 

​

June 30,

​

​

2022

    

2022

​

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

Accounts receivable

​

$

442,166

​

$

418,558

​

Unbilled receivables (included in accounts receivable)

​

​

15,997

​

​

19,702

​

Deferred revenue

​

​

83,799

​

​

53,630

​

Deferred revenue, long-term (included in other long-term liabilities)

​

​

2,565

​

​

3,099

​

​

The difference between the opening and closing balance of the accounts receivable and unbilled receivables relates to the timing of the Company’s billing in relation to month end and contractual agreements. The difference between the opening and closing balance of the deferred revenue relates to the timing difference between billings to customers and the service periods under the contract. Typically, each of these balances are at their highest during the first quarter of the fiscal year and lowest at the end of the fiscal year. The amount of revenue recognized during the three months ended December 31, 2022 and 2021 that was included in the previous October 1st deferred revenue balance was $42.8 million and $34.7 million, respectively. The amount of revenue recognized during the six months ended December 31, 2022 and 2021 that was included in the previous July 1st deferred revenue balance was $40.6 million and $33.0 million, respectively. During the three months ended December 31, 2022 and 2021, the Company recorded revenues of $24.5 million and $4.6 million, respectively, and $24.0 million and $6.9 million, respectively, during the six months ended December 31, 2022 and 2021, related to performance obligations satisfied in prior periods.

​

Performance Obligations

​

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. For the majority of its contracts, the Company’s performance obligations are satisfied over time, as the Company delivers, and the customer receives the services, over the service period of the contract. The Company’s payment terms are generally net 30 or net 45, but can vary depending on the customer or when the school receives its funding from the state.

​

The Company has elected, as a practical expedient, not to report the value of unsatisfied performance obligations for contracts with customers that have an expected duration of one year or less. The amount of unsatisfied performance obligations for contracts with customers which extend beyond one year as of December 31, 2022 was $2.6 million.

​

Significant Judgments

​

The Company determined that the majority of its contracts with customers contain one performance obligation. The Company markets the products and services as an integrated package building off its curriculum offerings. It does not market distinct products or services to be sold independently from the curriculum offering. The Company provides the significant service of integrating the goods and services into the operation of the school and education of its students, for which the customer has contracted.

​

The Company has determined that the time elapsed method is the most appropriate measure of progress towards the satisfaction of the performance obligation. Generally, the Company delivers the integrated products and services package over the course of the Company’s fiscal year. This package includes enrollment, marketing, teacher training, etc. in addition to the core curriculum and instruction. All of these activities are necessary and contribute to the overall education of its students, which occurs evenly throughout the year. Accordingly, the Company recognizes revenue on a straight-line basis.

​

The Company determined that the expected value method is the most appropriate method to account for variable consideration and the Company’s forecasting method is an estimation process that uses probability to determine expected funding. On a monthly basis, the Company estimates the total funds each school will receive in a particular school year and the amount of full-year school revenues and operating expenses to determine the amount of revenue the Company will recognize. Enrollment and state funding rates are key inputs to this estimate. The estimates are adjusted monthly, and a cumulative catch-up adjustment is recorded to revenue as necessary to reflect the total revenues earned to date to be proportional to the total revenues to be earned in the fiscal year. The Company builds in known constraints (i.e. enrollment, funding, net operating losses, etc.) into the estimate of the variable consideration to record the most probable amount.

​

Sales Taxes

Sales tax collected from customers is excluded from revenues. Collected but unremitted sales tax is included as part of accrued liabilities in the condensed consolidated balance sheets. Revenues do not include sales tax as the Company considers itself a pass-through conduit for collecting and remitting sales tax.
Consolidation

Consolidation

​

The condensed consolidated financial statements include the accounts of the Company, the wholly-owned and affiliated companies that the Company owns, directly or indirectly, and all controlled subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation.
Investments in Marketable Securities

Investments in Marketable Securities

The Company’s marketable securities generally consist of bonds and other securities which are classified as held-to-maturity. The securities with maturities between three months and one year are classified as short-term and are included

in other current assets on the condensed consolidated balance sheets. The securities with maturities greater than one year are classified as long-term and are included in deposits and other assets on the condensed consolidated balance sheets. Held-to-maturity securities are recorded at their amortized cost. Interest income and dividends are recorded within the condensed consolidated statements of operations.

The Company reviews the held-to-maturity debt securities for declines in fair value below the amortized cost basis under the credit loss model of Accounting Standards Codification (“ASC”) Topic 326, Financial Instruments – Credit Losses (“ASC 326”). Any decline in fair value related to a credit loss is recognized in the condensed consolidated statements of operations, with the amount of the loss limited to the difference between fair value and amortized cost. As of December 31, 2022 and June 30, 2022, the allowance for credit losses related to held-to-maturity debt securities was zero.

As of December 31, 2022, the Company’s marketable securities consisted of investments in corporate bonds, U.S. treasury notes and commercial paper. The short-term and long-term portions were $82.9 million and $21.0 million, respectively. The maturities of the Company’s long-term marketable debt securities range from one to two years. The following table summarizes the amortized cost, net carrying amount, and fair value disaggregated by class of instrument (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for

​

​

Net Carrying

​

​

Gross Unrealized

​

​

​

​

​

Amortized Cost

​

​

Credit Losses

​

​

Amount

​

​

Gains (Losses)

​

​

Fair Value

Corporate Bonds

$

57,820

​

$

-

​

$

57,820

​

$

(687)

​

$

57,133

U.S. Treasury Notes

​

26,256

​

​

-

​

​

26,256

​

​

(174)

​

​

26,082

Commercial Paper

​

19,811

​

​

-

​

​

19,811

​

​

-

​

​

19,811

Total

$

103,887

​

$

-

​

$

103,887

​

$

(861)

​

$

103,026

​

As of June 30, 2022, the Company’s marketable securities consisted of investments in corporate bonds, U.S. treasury notes and commercial paper. The short-term and long-term portions were $63.0 million and $21.7 million, respectively. The maturities of the Company’s long-term marketable debt securities range from one to two years. The following table summarizes the amortized cost, net carrying amount, and fair value disaggregated by class of instrument (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for

​

​

Net Carrying

​

​

Gross Unrealized

​

​

​

​

​

Amortized Cost

​

​

Credit Losses

​

​

Amount

​

​

Gains (Losses)

​

​

Fair Value

Corporate Bonds

$

50,067

​

$

-

​

$

50,067

​

$

(691)

​

$

49,376

U.S. Treasury Notes

​

16,399

​

​

-

​

​

16,399

​

​

(199)

​

​

16,200

Commercial Paper

​

18,186

​

​

-

​

​

18,186

​

​

-

​

​

18,186

Total

$

84,652

​

$

-

​

$

84,652

​

$

(890)

​

$

83,762
Allowance for Doubtful Accounts

Allowance for Doubtful Accounts

The Company maintains an allowance for uncollectible accounts primarily for estimated losses resulting from the inability or failure of individual customers to make required payments. The Company maintains an allowance under ASC 326 based on historical losses, changes in payment history, customer-specific information, current economic conditions, and reasonable and supportable forecasts of future economic conditions. The allowance under ASC 326 is updated as additional losses are incurred or information becomes available related to the customer or economic conditions.

​

The Company writes-off accounts receivable based on the age of the receivable and the facts and circumstances surrounding the customer and reasons for non-payment. Actual write-offs might differ from the recorded allowance.

​
Inventories

Inventories

​

Inventories consist primarily of textbooks and curriculum materials, a majority of which are supplied to virtual and blended public schools, and utilized directly by students. Inventories represent items that are purchased and held for sale and are recorded at the lower of cost (first-in, first-out method) or net realizable value. The Company classifies its inventory

as current or long-term based on the holding period. As of December 31, 2022 and June 30, 2022, $10.8 million and $11.2 million, respectively, of inventory, net of reserves, was deemed long-term and included in deposits and other assets on the condensed consolidated balance sheets. The provision for excess and obsolete inventory is established based upon the evaluation of the quantity on hand relative to demand. The excess and obsolete inventory reserve was $7.5 million and $6.5 million at December 31, 2022 and June 30, 2022, respectively.
Other Current Assets

Other Current Assets

​

Other current assets consist primarily of textbooks, curriculum materials and other supplies which are expected to be returned upon the completion of the school year. Materials not returned are expensed as part of instructional costs and services. Additionally, other current assets include short-term marketable securities.
Property and Equipment

Property and Equipment

​

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization expense is calculated using the straight-line method over the estimated useful life of the asset (or the lesser of the term of the lease and the estimated useful life of the asset under the finance lease). Amortization of assets capitalized under finance lease arrangements is included in depreciation expense. Leasehold improvements are amortized over the lesser of the lease term or the estimated useful life of the asset. The determination of the lease term is discussed below under “Leases.”

​

Property and equipment are depreciated over the following useful lives:

​

​

​

​

​

    

Useful Life

Student and state testing computers and printers

​

3 - 5 years

Computer hardware

​

3 - 7 years

Computer software

​

3 - 5 years

Web site development

​

3 years

Office equipment

​

5 years

Furniture and fixtures

​

7 years

Leasehold improvements

​

Shorter of useful life or term of the lease

​

The Company makes an estimate of unreturned student computers and printers based on an analysis of recent trends of returns.  The Company recorded accelerated depreciation of $1.4 million and $1.3 million for the three months ended December 31, 2022 and 2021, respectively, and $3.1 million and $1.9 million for the six months ended December 31, 2022 and 2021, respectively, related to unreturned student computers and printers.

​

Depreciation expense, including accelerated depreciation, related to computers and printers provided to students reflected in instructional costs and services for the three months ended December 31, 2022 and 2021 was $10.3 million and $9.8 million, respectively, and $20.6 million and $17.9 million, respectively, during the six months ended December 31, 2022 and 2021. Depreciation expense related to property and equipment reflected in selling, general, and administrative expenses for the three months ended December 31, 2022 and 2021 was $1.0 million and $1.2 million, respectively and $2.6 million and $2.3 million, respectively, during the six months ended December 31, 2022 and 2021.

​

The Company fully expenses computer peripheral equipment (e.g., keyboards, mouses) upon purchase as recovery has been determined to be uneconomical. These expenses totaled $0.6 million and $2.5 million for the three months ended December 31, 2022 and 2021, respectively, and $1.8 million and $7.3 million for the six months ended December 31, 2022 and 2021, respectively, and are recorded as instructional costs and services.
Capitalized Software Costs

Capitalized Software Costs

​

The Company develops software for internal use. Software development costs incurred during the application development stage are capitalized. The Company amortizes these costs over the estimated useful life of the software, which is generally three years. Capitalized software development costs are stated at cost less accumulated amortization.

​

Capitalized software additions totaled $21.4 million and $19.3 million for the six months ended December 31, 2022 and 2021, respectively. The Company recorded amortization expense related to capitalized software of $7.4 million and $5.9 million during the three months ended December 31, 2022 and 2021, respectively, and $13.1 million and $12.1 million during the six months ended December 31, 2022 and 2021, respectively, within instructional costs and services. Amortization expense related to capitalized software reflected in selling, general, and administrative expenses during the three months ended December 31, 2022 and 2021 was $1.3 million and $1.3 million, respectively and $2.7 million and $2.6 million, respectively, during the six months ended December 31, 2022 and 2021.
Capitalized Curriculum Development Costs

Capitalized Curriculum Development Costs

​

The Company internally develops curriculum, which is primarily provided as online content and accessed via the Internet. The Company also creates textbooks and other materials that are complementary to online content.

​

The Company capitalizes curriculum development costs incurred during the application development stage, as well as the design and deployment phases of the project. As a result, a significant portion of the Company’s courseware development costs qualify for capitalization due to the concentration of its development efforts on the content of the courseware. Capitalization ends when a course is available for general release to its customers, at which time amortization of the capitalized costs begins. The period of time over which these development costs are amortized is generally five years.

​

Total capitalized curriculum development additions were $9.5 million and $7.5 million for the six months ended December 31, 2022 and 2021, respectively. These amounts are recorded on the condensed consolidated balance sheets net of amortization charges. Amortization expense for the three months ended December 31, 2022 and 2021 was $4.1 million and $3.8 million, respectively, and $8.2 million and $8.0 million for the six months ended December 31, 2022 and 2021, respectively, and is recorded in instructional costs and services.
Leases

Leases

​

The Company’s principal leasing activities include student computers and peripherals, classified as finance leases, and facilities, classified as operating leases.

​

Leases are classified as operating leases unless they meet any of the criteria below to be classified as a finance lease:

​

●the lease transfers ownership of the asset at the end of the lease;
●the lease grants an option to purchase the asset which the lessee is expected to exercise;
●the lease term reflects a major part of the asset’s economic life;
●the present value of the lease payments equals or exceeds the fair value of the asset; or
●the asset is specialized with no alternative use to the lessor at the end of the term.

​

Finance Leases

​

The Company enters into agreements to finance the purchase of student computers and peripherals provided to students of its schools. Individual leases typically include 3-year payment terms, at varying rates. The Company pledges the assets financed to secure the outstanding leases.

​

Operating Leases

​

The Company enters into agreements for facilities that serve as offices for its headquarters and school operations. Lease terms vary between 1 and 11 years. Certain leases include renewal options, usually based upon current market rates,

as well as termination rights. The Company performs an evaluation of each lease to determine if the lease payments included in the renewal option should be included in the initial measurement of the lease liability.

​

Discount Rate

​

The present value of the lease payments is calculated using either the rate implicit in the lease, or the lessee’s incremental borrowing rate, over the lease term. For the Company’s finance leases, the stated rate is defined within the lease terms; while for the Company’s operating leases, the rate is not implicit. For operating leases, the Company uses its incremental borrowing rate as the discount rate; determined as the Company’s borrowing rate on a collateralized basis for a similar term and amount to the term and amount of the lease. The Company’s current incremental borrowing rate of 4.42% is based upon its agreements used for its finance leases. The incremental borrowing rate is subsequently reassessed upon modification of its leasing arrangements or with the execution of a new lease agreement.

​

Policy Elections

​

Short-term Leases

​

The Company has elected as an on-going accounting policy election not to record a right-of-use asset or lease liability on its short-term facility leases of 12 months or less, and will expense its lease payments on a straight-line basis over the lease term. The accounting policy election is made by class of underlying asset to which the right of use relates. The Company has elected to apply the accounting policy election only to operating leases.
Income Taxes

Income Taxes

​

Deferred tax assets and liabilities are computed based on the difference between the financial reporting and income tax bases of assets and liabilities using the enacted marginal tax rate. The net deferred tax asset is reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the net deferred tax asset will not be realized.
Goodwill and Intangible Assets

Goodwill and Intangible Assets

​

The Company records as goodwill the excess of the purchase price over the fair value of the identifiable net assets acquired. Finite-lived intangible assets acquired in business combinations subject to amortization are recorded at their fair value. Finite-lived intangible assets include trade names, acquired customers and distributors, developed technology and non-compete agreements. Such intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense for the three months ended December 31, 2022 and 2021 was $3.3 million and $3.2 million, respectively, and $6.6 million and $6.4 million for the six months ended December 31, 2022 and 2021, respectively, and is included within selling, general, and administrative expenses in the condensed consolidated statements of operations. Future amortization of intangible assets is expected to be $6.5 million, $12.1 million, $10.9 million, $9.7 million, and $8.1 million in the fiscal years ending June 30, 2023 through June 30, 2027, respectively, and $35.9 million thereafter.

​

The Company reviews its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset.

​

The Company has one reporting unit. The process for testing goodwill and intangible assets with indefinite lives for impairment is performed annually, as well as when an event triggering impairment may have occurred. Companies are also allowed to qualitatively assess goodwill impairment through a screening process which would permit companies to forgo the quantitative impairment test as part of their annual goodwill impairment process. The Company performs its annual assessment on May 31st which is then updated for any changes in condition as of June 30th.

​

During the three and six months ended December 31, 2022 and 2021, there were no events or changes in circumstances that would indicate that the carrying amount of the goodwill was impaired.

The following table represents the balance of the Company’s intangible assets as of December 31, 2022 and June 30, 2022:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

June 30, 2022

($ in millions)

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

Trade names

    

$

85.1

    

$

(25.9)

    

$

59.2

​

$

85.1

​

$

(23.1)

​

$

62.0

Customer and distributor relationships

​

​

39.8

​

​

(27.4)

​

​

12.4

​

​

38.9

​

​

(25.3)

​

​

13.6

Developed technology

​

​

22.0

​

​

(10.5)

​

​

11.5

​

​

21.7

​

​

(8.9)

​

​

12.8

Other

​

​

1.4

​

​

(1.1)

​

​

0.3

​

​

1.4

​

​

(1.1)

​

​

0.3

Total

​

$

148.3

​

$

(64.9)

​

$

83.4

​

$

147.1

  

$

(58.4)

​

$

88.7
Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

​

Long-lived assets include property, equipment, right-of-use assets, capitalized curriculum and software developed or obtained for internal use. Management reviews the Company’s recorded long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. The Company determines the extent to which an asset may be impaired based upon its expectation of the asset’s future usability as well as on a reasonable assurance that the future cash flows associated with the asset will be in excess of its carrying amount. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between fair value and the carrying value of the asset. During the three and six months ended December 31, 2022 and 2021, there were no events or changes in circumstances that may indicate that the carrying amount of the long-lived assets may not be recoverable.

Fair Value Measurements

Fair Value Measurements

​

Fair value is the price that would be received to sell an asset or paid to transfer a liability, in the principal or most advantageous market for the asset or liability, in an orderly transaction between market participants at the measurement date. Measurements are described in a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

​

The three levels of inputs used to measure fair value are:

​

Level 1:   Inputs based on quoted market prices for identical assets or liabilities in active markets at the measurement date.

​

Level 2:   Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

​

Level 3:   Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The inputs are unobservable in the market and significant to the instrument’s valuation.

​

The carrying values reflected in the condensed consolidated balance sheets for cash and cash equivalents, receivables, and short-term debt approximate their fair values, as they are largely short-term in nature. The Tallo, Inc. convertible note is discussed in more detail in Note 11, “Acquisitions and Investments.” As of December 31, 2022, the estimated fair value of the long-term debt was $377.2 million. The Company estimated the fair value based on the quoted market prices in an inactive market on the last day of the reporting period (Level 2). The long-term debt, comprised of the Company’s convertible senior notes due 2027, is recorded at face value less the unamortized debt issuance costs on its condensed consolidated balance sheet, and is discussed in more detail in Note 6, “Debt.” As of December 31, 2022, the estimated fair value of the Company’s marketable securities was $103.0 million. The Company estimated the fair value based on the

quoted market prices in an inactive market on the last day of the reporting period (Level 2). The marketable securities are discussed in more detail in Note 3, “Summary of Significant Accounting Policies - Investments in Marketable Securities.”

​

On November 30, 2020, the Company acquired 100% of MedCerts in exchange for $70.0 million and estimated contingent consideration of $10.8 million. During fiscal year 2021 and 2022, the Company recorded an aggregate expense of $0.5 million to adjust its estimate of the fair value of the contingent consideration to $11.3 million. During the three months ended September 30, 2022, the Company paid $7.0 million to settle the contingent consideration and recorded a gain of $4.3 million. The gain is recorded within selling, general, and administrative expenses on the condensed consolidated statements of operations.

​

There were no assets or liabilities measured at fair value on a recurring basis as of December 31, 2022.

​

The following table summarizes certain fair value information at June 30, 2022 for assets or liabilities measured at fair value on a recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

Fair Value Measurements Using:

 

​

​

 

​

Quoted Prices

​

​

​

​

 

​

​

 

​

in Active

​

Significant

​

 

 

​

​

 

​

Markets for

​

Other

​

Significant

 

​

​

 

​

Identical

​

Observable

​

Unobservable

 

​

​

 

​

Assets

​

Input

​

Inputs

Description

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

​

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,290

​

$

—

​

$

—

​

$

11,290

Convertible note received in acquisition

​

$

889

​

$

—

​

$

—

​

$

889

​

There was no activity related to the Company’s fair value measurements categorized as Level 3 during the three months ended December 31, 2022.

​

The following table presents activity related to the Company’s fair value measurements categorized as Level 3 in the valuation hierarchy, valued on a recurring basis, for the three months ended December 31, 2021 and six months ended December 31, 2022 and 2021:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 2021

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Unrealized

​

Fair Value

Description

    

September 30, 2021

    

and Settlements

    

(Gains) Losses

    

December 31, 2021

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,205

​

$

—

​

$

521

​

$

11,726

Convertible note received in acquisition

​

$

5,006

​

$

—

​

$

—

​

$

5,006

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Six Months Ended December 31, 2022

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Realized

​

Fair Value

Description

    

June 30, 2022

    

and Settlements

    

(Gains) Losses

    

December 31, 2022

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,290

​

$

(7,024)

​

$

(4,266)

​

$

—

Convertible note received in acquisition

​

​

889

​

​

(889)

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Six Months Ended December 31, 2021

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Unrealized

​

Fair Value

Description

    

June 30, 2021

    

and Settlements

    

(Gains) Losses

    

December 31, 2021

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,082

​

$

—

​

$

644

​

$

11,726

Convertible note received in acquisition

​

$

5,006

​

$

—

​

$

—

​

$

5,006

​
Net Income (Loss) Per Common Share

Net Income (Loss) Per Common Share

​

Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average number of common shares outstanding during the reporting period. The weighted average number of shares of common stock outstanding includes vested restricted stock awards. Diluted net income (loss) per share (“EPS”) reflects the potential dilution that could occur assuming conversion or exercise of all dilutive unexercised stock options and vesting of all dilutive unvested restricted stock awards. The dilutive effect of stock options and restricted stock awards was determined using the treasury stock method. Under the treasury stock method, the proceeds received from the exercise of stock options and restricted stock awards, the amount of compensation cost for future service not yet recognized by the Company and the amount of tax benefits that would be recorded as income tax expense when the stock options become deductible for income tax purposes are all assumed to be used to repurchase shares of the Company’s common stock. Stock options and restricted stock awards are not included in the computation of diluted net income (loss) per share when they are antidilutive. Common stock outstanding reflected in the Company’s condensed consolidated balance sheets includes restricted stock awards outstanding. The dilutive effect of the Company’s convertible debt is determined using the if-converted method when the Company’s stock is trading above the conversion price. However, based on the structure of the instrument and how it is settled upon conversion, it would produce a similar result as the previously applied treasury stock method.

​

The following schedule presents the calculation of basic and diluted net loss per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

  

2022

  

2021

  

2022

  

2021

​

​

​

(In thousands except share and per share data)

​

Basic net income per share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to common stockholders

​

$

50,705

​

$

42,004

​

$

28,033

​

$

36,121

​

Weighted average common shares  — basic

​

​

42,259,061

​

​

41,525,736

​

​

42,167,844

​

​

41,042,401

​

Basic net income per share

​

$

1.20

​

$

1.01

​

$

0.66

​

$

0.88

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Diluted net income per share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to common stockholders

​

$

50,705

​

$

42,004

​

$

28,033

​

$

36,121

​

Share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average common shares  — basic

​

​

42,259,061

​

​

41,525,736

​

​

42,167,844

​

​

41,042,401

​

Effect of dilutive stock options and restricted stock awards

​

​

288,273

​

​

437,663

​

​

434,561

​

​

1,371,427

​

Weighted average common shares  — diluted

​

​

42,547,334

​

​

41,963,399

​

​

42,602,405

​

​

42,413,828

​

Diluted net income per share

​

$

1.19

​

$

1.00

​

$

0.66

​

$

0.85

​

​

For the three months ended December 31, 2022 and 2021, 44,546 and 5,193 shares issuable in connection with stock options and restricted stock were excluded from the diluted income per common share calculation because the effect would have been antidilutive. For the six months ended December 31, 2022, 26,789 and 102,536 shares were excluded, respectively.
v3.22.4
Summary of Significant Accounting Policies (Tables)
 6 Months Ended
Dec. 31, 2022
Summary of Significant Accounting Policies  
Schedule of disaggregation of revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

2022

   

2021

​

2022

  

2021

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

​

​

​

​

General Education

​

$

274,764

​

$

313,241

​

$

546,422

​

$

619,582

Career Learning

​

​

​

​

​

​

​

​

​

​

​

​

Middle - High School

​

​

153,795

​

​

75,287

​

​

279,330

​

​

146,699

Adult

​

​

29,876

​

​

20,979

​

​

57,833

​

​

43,452

Total Career Learning

​

​

183,671

​

​

96,266

​

​

337,163

​

​

190,151

Total Revenues

​

$

458,435

​

$

409,507

​

$

883,585

​

$

809,733
Schedule of accounts receivables, unbilled receivables and deferred revenue

​

​

​

​

​

​

​

​

​

​

​

December 31, 

​

June 30,

​

​

2022

    

2022

​

​

​

(In thousands)

​

​

​

​

​

​

​

​

​

Accounts receivable

​

$

442,166

​

$

418,558

​

Unbilled receivables (included in accounts receivable)

​

​

15,997

​

​

19,702

​

Deferred revenue

​

​

83,799

​

​

53,630

​

Deferred revenue, long-term (included in other long-term liabilities)

​

​

2,565

​

​

3,099

​
Schedule of investments in marketable securities The following table summarizes the amortized cost, net carrying amount, and fair value disaggregated by class of instrument (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for

​

​

Net Carrying

​

​

Gross Unrealized

​

​

​

​

​

Amortized Cost

​

​

Credit Losses

​

​

Amount

​

​

Gains (Losses)

​

​

Fair Value

Corporate Bonds

$

57,820

​

$

-

​

$

57,820

​

$

(687)

​

$

57,133

U.S. Treasury Notes

​

26,256

​

​

-

​

​

26,256

​

​

(174)

​

​

26,082

Commercial Paper

​

19,811

​

​

-

​

​

19,811

​

​

-

​

​

19,811

Total

$

103,887

​

$

-

​

$

103,887

​

$

(861)

​

$

103,026

The following table summarizes the amortized cost, net carrying amount, and fair value disaggregated by class of instrument (in thousands).

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Allowance for

​

​

Net Carrying

​

​

Gross Unrealized

​

​

​

​

​

Amortized Cost

​

​

Credit Losses

​

​

Amount

​

​

Gains (Losses)

​

​

Fair Value

Corporate Bonds

$

50,067

​

$

-

​

$

50,067

​

$

(691)

​

$

49,376

U.S. Treasury Notes

​

16,399

​

​

-

​

​

16,399

​

​

(199)

​

​

16,200

Commercial Paper

​

18,186

​

​

-

​

​

18,186

​

​

-

​

​

18,186

Total

$

84,652

​

$

-

​

$

84,652

​

$

(890)

​

$

83,762
Schedule of useful lives of property and equipment

​

​

​

​

​

    

Useful Life

Student and state testing computers and printers

​

3 - 5 years

Computer hardware

​

3 - 7 years

Computer software

​

3 - 5 years

Web site development

​

3 years

Office equipment

​

5 years

Furniture and fixtures

​

7 years

Leasehold improvements

​

Shorter of useful life or term of the lease
Schedule of intangible assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

June 30, 2022

($ in millions)

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

Trade names

    

$

85.1

    

$

(25.9)

    

$

59.2

​

$

85.1

​

$

(23.1)

​

$

62.0

Customer and distributor relationships

​

​

39.8

​

​

(27.4)

​

​

12.4

​

​

38.9

​

​

(25.3)

​

​

13.6

Developed technology

​

​

22.0

​

​

(10.5)

​

​

11.5

​

​

21.7

​

​

(8.9)

​

​

12.8

Other

​

​

1.4

​

​

(1.1)

​

​

0.3

​

​

1.4

​

​

(1.1)

​

​

0.3

Total

​

$

148.3

​

$

(64.9)

​

$

83.4

​

$

147.1

  

$

(58.4)

​

$

88.7
Schedule of assets and liabilities measured at fair value on a recurring basis

The following table summarizes certain fair value information at June 30, 2022 for assets or liabilities measured at fair value on a recurring basis:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

Fair Value Measurements Using:

 

​

​

 

​

Quoted Prices

​

​

​

​

 

​

​

 

​

in Active

​

Significant

​

 

 

​

​

 

​

Markets for

​

Other

​

Significant

 

​

​

 

​

Identical

​

Observable

​

Unobservable

 

​

​

 

​

Assets

​

Input

​

Inputs

Description

    

Fair Value

    

(Level 1)

    

(Level 2)

    

(Level 3)

​

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,290

​

$

—

​

$

—

​

$

11,290

Convertible note received in acquisition

​

$

889

​

$

—

​

$

—

​

$

889

​

There was no activity related to the Company’s fair value measurements categorized as Level 3 during the three months ended December 31, 2022.

​
Schedule of activity related to fair value measurements categorized as Level 3 of the valuation hierarchy, valued on a recurring basis

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 2021

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Unrealized

​

Fair Value

Description

    

September 30, 2021

    

and Settlements

    

(Gains) Losses

    

December 31, 2021

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,205

​

$

—

​

$

521

​

$

11,726

Convertible note received in acquisition

​

$

5,006

​

$

—

​

$

—

​

$

5,006

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Six Months Ended December 31, 2022

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Realized

​

Fair Value

Description

    

June 30, 2022

    

and Settlements

    

(Gains) Losses

    

December 31, 2022

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,290

​

$

(7,024)

​

$

(4,266)

​

$

—

Convertible note received in acquisition

​

​

889

​

​

(889)

​

​

—

​

​

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

 

​

​

Six Months Ended December 31, 2021

 

​

​

 

​

Purchases,

​

​

 

​

​

​

 

​

Fair Value

​

Issuances,

​

Unrealized

​

Fair Value

Description

    

June 30, 2021

    

and Settlements

    

(Gains) Losses

    

December 31, 2021

​

​

(In thousands)

Contingent consideration associated with acquisitions

​

$

11,082

​

$

—

​

$

644

​

$

11,726

Convertible note received in acquisition

​

$

5,006

​

$

—

​

$

—

​

$

5,006

​
Schedule of calculation of basic and diluted net income (loss) per share

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

  

2022

  

2021

  

2022

  

2021

​

​

​

(In thousands except share and per share data)

​

Basic net income per share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to common stockholders

​

$

50,705

​

$

42,004

​

$

28,033

​

$

36,121

​

Weighted average common shares  — basic

​

​

42,259,061

​

​

41,525,736

​

​

42,167,844

​

​

41,042,401

​

Basic net income per share

​

$

1.20

​

$

1.01

​

$

0.66

​

$

0.88

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Diluted net income per share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Net income attributable to common stockholders

​

$

50,705

​

$

42,004

​

$

28,033

​

$

36,121

​

Share computation:

​

​

​

​

​

​

​

​

​

​

​

​

​

Weighted average common shares  — basic

​

​

42,259,061

​

​

41,525,736

​

​

42,167,844

​

​

41,042,401

​

Effect of dilutive stock options and restricted stock awards

​

​

288,273

​

​

437,663

​

​

434,561

​

​

1,371,427

​

Weighted average common shares  — diluted

​

​

42,547,334

​

​

41,963,399

​

​

42,602,405

​

​

42,413,828

​

Diluted net income per share

​

$

1.19

​

$

1.00

​

$

0.66

​

$

0.85

​
v3.22.4
Finance and Operating Leases (Tables)
 6 Months Ended
Dec. 31, 2022
Finance and Operating Leases  
Schedule of present value of the minimum lease payments on finance leases

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

December 31, 2022

 

June 30, 2022

​

​

    

(in thousands)

​

​

​

​

​

​

​

​

​

2023

​

$

24,022

​

$

38,600

​

2024

​

​

34,593

​

​

24,816

​

2025

​

​

14,244

​

​

4,468

​

2026

​

​

3,194

​

​

22

​

Total minimum payments

​

​

76,053

​

​

67,906

​

Less: imputed interest

​

​

(2,751)

​

​

(1,629)

​

Finance lease liability

​

​

73,302

​

​

66,277

​

Less: current portion of finance lease liability

​

​

(44,377)

​

​

(37,389)

​

Long-term finance lease liability

​

$

28,925

​

$

28,888

​
Schedule of future minimum lease payments under non-cancelable operating leases

​

​

​

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

December 31, 2022

 

June 30, 2022

​

​

​

(in thousands)

​

​

​

​

​

​

​

​

​

2023

​

$

7,321

​

$

15,120

​

2024

​

​

16,115

​

​

16,638

​

2025

​

​

15,436

​

​

16,168

​

2026

​

​

12,051

​

​

12,900

​

2027

​

​

8,518

​

​

8,797

​

Thereafter

​

​

27,455

​

​

27,447

​

Total minimum payments

​

​

86,896

​

​

97,070

​

Less: imputed interest

​

​

(7,788)

​

​

(9,113)

​

Operating lease liability

​

​

79,108

​

​

87,957

​

Less: current portion of operating lease liability

​

​

(13,281)

​

​

(12,830)

​

Long-term operating lease liability

​

$

65,827

​

$

75,127

​
Schedule of expected sublease income

​

​

​

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

​

​

​

​

​

​

​

    

December 31, 2022

 

June 30, 2022

​

​

​

(in thousands)

​

​

​

​

​

​

​

​

​

2023

​

$

698

​

$

1,396

​

2024

​

​

665

​

​

665

​

2025

​

​

412

​

​

412

​

2026

​

​

140

​

​

140

​

Total sublease income

​

$

1,915

​

$

2,613

​
Schedule of lease cost, weighted-average remaining lease term, weighted-average discount rate

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended December 31, 

​

Six Months Ended December 31, 

​

​

​

2022

  

2021

​

2022

  

2021

​

​

​

(in thousands)

​

Lease cost

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Finance lease cost:

​

​

​

​

​

​

​

​

​

​

​

​

​

Amortization of right-of-use assets

​

$

10,018

​

$

9,368

​

$

19,952

​

$

16,988

​

Interest on lease liabilities

​

​

507

​

​

445

​

​

895

​

​

862

​

Instructional costs and services:

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating lease cost

​

​

2,640

​

​

3,931

​

​

6,354

​

​

7,866

​

Short-term lease cost

​

​

31

​

​

16

​

​

56

​

​

35

​

Sublease income

​

​

(270)

​

​

(247)

​

​

(552)

​

​

(579)

​

Selling, general, and administrative expenses:

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating lease cost

​

​

586

​

​

1,777

​

​

1,172

​

​

3,443

​

Short-term lease cost

​

​

47

​

​

4

​

​

140

​

​

9

​

Sublease income

​

​

(80)

​

​

(182)

​

​

(160)

​

​

(311)

​

Total lease cost

​

$

13,479

​

$

15,112

​

$

27,857

​

$

28,313

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Other information

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cash paid for amounts included in the measurement of lease liabilities

​

​

​

​

​

​

​

​

​

​

​

​

​

Operating cash flows from operating leases

​

$

(3,361)

​

$

(5,341)

​

$

(5,966)

​

$

(10,662)

​

Financing cash flows from finance leases

​

​

(10,624)

​

​

(7,724)

​

​

(19,938)

​

​

(14,744)

​

Right-of-use assets obtained in exchange for new finance lease liabilities

​

​

5,305

​

​

6,898

​

​

25,212

​

​

20,881

​

Right-of-use assets obtained in exchange for new operating lease liabilities

​

​

—

​

​

—

​

​

576

​

​

6,805

​

Weighted-average remaining lease term - finance leases

​

​

​

​

​

​

​

​

1.84

yrs.

​

2.27

yrs.

Weighted-average remaining lease term - operating leases

​

​

​

​

​

​

​

​

6.35

yrs.

​

6.73

yrs.

Weighted-average discount rate - finance leases

​

​

​

​

​

​

​

​

3.31

%

​

2.40

%

Weighted-average discount rate - operating leases

​

​

​

​

​

​

​

​

2.77

%

​

2.76

%
v3.22.4
Debt (Tables)
 6 Months Ended
Dec. 31, 2022
Debt  
Schedule of components of debt

​

​

​

​

​

​

​

​

​

    

​

​

​

​

​

​

    

December 31, 2022

​

June 30, 2022

​

​

(in thousands)

​

​

​

​

​

​

​

Convertible Senior Notes due 2027

​

$

420,000

​

$

420,000

Less: unamortized debt issuance costs

​

​

(7,740)

​

​

(8,562)

Total debt

​

​

412,260

​

​

411,438

Less: current portion of debt

​

​

—

​

​

—

Long-term debt

​

$

412,260

​

$

411,438
v3.22.4
Equity Incentive Plan (Tables)
 6 Months Ended
Dec. 31, 2022
Schedule of stock option activity

​

​

​

​

​

​

​

​

​

​

​

​

​

​

    

​

    

​

​

    

Weighted

    

​

​

 

​

​

​

​

Weighted

​

Average

​

​

​

 

​

​

​

​

Average

​

Remaining

​

Aggregate

 

​

​

​

​

Exercise

​

Contractual

​

Intrinsic

 

​

​

Shares

​

Price

​

Life (Years)

​

Value

 

Outstanding, June 30, 2022

​

1,350

​

$

14.77

​

0.98

​

$

35,127

​

Granted

​

—

​

​

—

​

​

​

​

​

​

Exercised

​

(675)

​

​

14.77

​

​

​

​

​

​

Forfeited or canceled

​

—

​

​

—

​

​

​

​

​

​

Outstanding and exercisable, December 31, 2022

​

675

​

$

14.77

​

0.56

​

$

11,144

​
Schedule of restricted stock award activity

​

​

​

​

​

​

​

​

​

    

​

    

Weighted

 

​

​

​

​

Average

 

​

​

​

​

Grant-Date

​

​

​

Shares

​

Fair Value

 

Nonvested, June 30, 2022

​

1,131,466

​

$

33.27

​

Granted

​

537,096

​

​

38.32

​

Vested

​

(548,315)

​

​

31.91

​

Canceled

​

(64,004)

​

​

36.01

​

Nonvested, December 31, 2022

​

1,056,243

​

$

36.63

​
Schedule of performance share units award activity

​

​

​

​

​

​

​

​

​

​

​

Weighted

​

​

​

​

Average

​

​

​

​

Grant-Date

​

    

Shares

    

Fair Value

Nonvested, June 30, 2022

​

355,302

​

$

32.62

Granted

​

366,507

​

​

33.87

Vested

​

(119,467)

​

​

30.48

Canceled

​

(81,893)

​

​

25.89

Nonvested, December 31, 2022

​

520,449

​

$

35.06
Deferred Stock Units  
Schedule of performance share units award activity

​

​

​

​

​

​

​

​

​

​

​

Weighted

​

​

​

​

Average

​

​

​

​

Grant-Date

​

    

Shares

    

Fair Value

Nonvested, June 30, 2022

​

69,117

​

$

24.27

Granted

​

19,614

​

​

33.03

Vested

​

—

​

​

—

Canceled

​

—

​

​

—

Nonvested, December 31, 2022

​

88,731

​

$

26.20
v3.22.4
Acquisitions and Investments (Tables)
 6 Months Ended
Dec. 31, 2022
Acquisitions and Investments  
Schedule of intangible assets

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

December 31, 2022

​

June 30, 2022

($ in millions)

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

    

Gross
Carrying
Amount

    

Accumulated
Amortization

    

Net
Carrying
Value

Trade names

    

$

85.1

    

$

(25.9)

    

$

59.2

​

$

85.1

​

$

(23.1)

​

$

62.0

Customer and distributor relationships

​

​

39.8

​

​

(27.4)

​

​

12.4

​

​

38.9

​

​

(25.3)

​

​

13.6

Developed technology

​

​

22.0

​

​

(10.5)

​

​

11.5

​

​

21.7

​

​

(8.9)

​

​

12.8

Other

​

​

1.4

​

​

(1.1)

​

​

0.3

​

​

1.4

​

​

(1.1)

​

​

0.3

Total

​

$

148.3

​

$

(64.9)

​

$

83.4

​

$

147.1

  

$

(58.4)

​

$

88.7
v3.22.4
Supplemental Disclosure of Cash Flow Information (Tables)
 6 Months Ended
Dec. 31, 2022
Supplemental Disclosure of Cash Flow Information  
Schedule of supplemental disclosure of cash flow information

​

​

​

​

​

​

​

​

​

 

​

Six Months Ended December 31, 

​

 

    

2022

    

2021

​

​

​

(In thousands)

​

Cash paid for interest

​

$

3,328

 

$

3,286

​

Cash paid for taxes

​

$

22,434

 

$

13,099

​

​

​

​

​

​

​

​

​

Supplemental disclosure of non-cash financing activities:

​

​

​

​

​

​

​

Right-of-use assets obtained from acquisitions

​

$

385

 

​

—

​

Right-of-use assets obtained in exchange for new finance lease liabilities

​

​

25,212

 

​

20,881

​

​

​

​

​

​

​

​

​

Supplemental disclosure of non-cash investing activities:

​

​

​

​

​

​

​

Stock-based compensation expense capitalized on software development

​

$

215

 

$

143

​

Stock-based compensation expense capitalized on curriculum development

​

​

44

 

​

57

​

Non-cash purchase price related to business combinations

​

​

5,861

​

​

1,145

​

​

​

​

​

​

​

​

​

Business combinations:

​

​

​

​

​

​

​

Acquired assets

​

$

1,132

​

$

464

​

Intangible assets

​

​

1,309

​

​

2,157

​

Goodwill

​

​

5,655

​

​

568

​

Assumed liabilities

​

​

(385)

​

​

(42)

​

Deferred revenue

​

​

(441)

​

​

(1,084)

​

​

​

​

​

​

​

​

​
v3.22.4
Description of the Business (Details)
Dec. 31, 2022
item
Description of the Business  
Number of lines of revenue 2
v3.22.4
Basis of Presentation (Details)
 6 Months Ended
Dec. 31, 2022
segment
Basis of Presentation  
Number of operating segments 1
Number of reportable business segments 1
v3.22.4
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended 18 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Summary of Significant Accounting Policies          
Revenues $ 458,435 $ 409,507 $ 883,585 $ 809,733  
Percentage of impact on total revenue         2.00%
School operating losses included in the entity's revenue 6,400 12,300 $ 16,600 25,200  
Minimum          
Summary of Significant Accounting Policies          
Duration of contracts providing access to curriculum via the entity's Web site     1 year    
Maximum          
Summary of Significant Accounting Policies          
Duration of contracts providing access to curriculum via the entity's Web site     2 years    
Primary Obligor          
Summary of Significant Accounting Policies          
Revenues $ 123,000 $ 117,700 $ 248,300 $ 231,600  
v3.22.4
Summary of Significant Accounting Policies - Disaggregation of revenue (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Summary of Significant Accounting Policies        
Total Revenues $ 458,435 $ 409,507 $ 883,585 $ 809,733
General Education        
Summary of Significant Accounting Policies        
Percentage of revenues from funding-based contracts 90.00% 88.00% 90.00% 89.00%
Total Revenues $ 274,764 $ 313,241 $ 546,422 $ 619,582
Career Learning        
Summary of Significant Accounting Policies        
Total Revenues $ 183,671 $ 96,266 $ 337,163 $ 190,151
Middle - High School        
Summary of Significant Accounting Policies        
Percentage of revenues from funding-based contracts 100.00% 99.00% 99.00% 99.00%
Total Revenues $ 153,795 $ 75,287 $ 279,330 $ 146,699
Adult        
Summary of Significant Accounting Policies        
Total Revenues $ 29,876 $ 20,979 $ 57,833 $ 43,452
v3.22.4
Summary of Significant Accounting Policies - Concentration of Customers (Details) - contract
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Revenue | Customer Concentration Risk        
Concentration of revenues        
Number of customers with concentration 0 0 0 0
v3.22.4
Summary of Significant Accounting Policies - Contract Balances (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Jun. 30, 2022
Accounts receivables, contract assets and deferred revenue          
Accounts receivable $ 442,166   $ 442,166   $ 418,558
Unbilled receivables (included in accounts receivable) 15,997   15,997   19,702
Deferred revenue 83,799   83,799   53,630
Deferred revenue, long-term (included in other long-term liabilities) 2,565   2,565   $ 3,099
Revenue recognized that was included in opening deferred revenue balance 42,800 $ 34,700 40,600 $ 33,000  
Revenue recognized from performance obligation satisfied in prior periods $ 24,500 $ 4,600 $ 24,000 $ 6,900  
v3.22.4
Summary of Significant Accounting Policies - Performance Obligations (Details)
$ in Millions
 6 Months Ended
Dec. 31, 2022
USD ($)
Summary of Significant Accounting Policies  
Minimum payment term 30 days
Maximum payment term 45 days
Practical expedient  
Unsatisfied performance obligations true
Unsatisfied performance obligations amount $ 2.6
v3.22.4
Summary of Significant Accounting Policies - Marketable Securities (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Jun. 30, 2022
Marketable securities    
Marketable securities, short-term portion $ 82,900 $ 63,000
Marketable securities, long-term portion $ 21,000 21,700
Marketable Securities, Maturity Date, Start 1 year  
Marketable Securities, Maturity Date, End 2 years  
Amortized Cost $ 103,887 84,652
Allowance for Credit Losses 0 0
Net Carrying Amount 103,887 84,652
Gross Unrealize (Losses) (861) (890)
Fair Value 103,026 83,762
Corporate Bonds    
Marketable securities    
Amortized Cost 57,820 50,067
Net Carrying Amount 57,820 50,067
Gross Unrealize (Losses) (687) (691)
Fair Value 57,133 49,376
U.S. Treasury Notes    
Marketable securities    
Amortized Cost 26,256 16,399
Net Carrying Amount 26,256 16,399
Gross Unrealize (Losses) (174) (199)
Fair Value 26,082 16,200
Commercial Paper    
Marketable securities    
Amortized Cost 19,811 18,186
Net Carrying Amount 19,811 18,186
Fair Value $ 19,811 $ 18,186
v3.22.4
Summary of Significant Accounting Policies - Inventories (Details) - USD ($)
$ in Millions
Dec. 31, 2022
Jun. 30, 2022
Summary of Significant Accounting Policies    
Inventory deemed long-term and included in deposits and other assets $ 10.8 $ 11.2
Excess and obsolete inventory reserve $ 7.5 $ 6.5
v3.22.4
Summary of Significant Accounting Policies - Property and Equipment and Leases (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Property and equipment        
Equipment expense $ 600 $ 2,500 $ 1,800 $ 7,300
Capitalized software development costs     $ 21,399 19,330
Capitalized Curriculum Development Costs        
Amortization period of capitalized development costs     5 years  
Capitalized curriculum development additions     $ 9,527 7,461
Operating Leases        
Incremental borrowing rate used as discount rate 4.42%   4.42%  
Minimum        
Operating Leases        
Operating leases initial term 1 year   1 year  
Maximum        
Finance Leases        
Finance lease term 3 years   3 years  
Operating Leases        
Operating leases initial term 11 years   11 years  
Instructional costs and services        
Property and equipment        
Depreciation expense $ 10,300 9,800 $ 20,600 17,900
Amortization expense 7,400 5,900 13,100 12,100
Capitalized Curriculum Development Costs        
Amortization expense 4,100 3,800 8,200 8,000
Selling, general and administrative expenses        
Property and equipment        
Depreciation expense 1,000 1,200 2,600 2,300
Amortization expense 1,300 1,300 2,700 2,600
Student and state testing computers and printers        
Property and equipment        
Accelerated depreciation $ 1,400 $ 1,300 $ 3,100 $ 1,900
Student and state testing computers and printers | Minimum        
Property and equipment        
Useful Life     3 years  
Student and state testing computers and printers | Maximum        
Property and equipment        
Useful Life     5 years  
Computer hardware | Minimum        
Property and equipment        
Useful Life     3 years  
Computer hardware | Maximum        
Property and equipment        
Useful Life     7 years  
Computer software | Minimum        
Property and equipment        
Useful Life     3 years  
Computer software | Maximum        
Property and equipment        
Useful Life     5 years  
Web site development        
Property and equipment        
Useful Life     3 years  
Office equipment        
Property and equipment        
Useful Life     5 years  
Furniture and fixtures        
Property and equipment        
Useful Life     7 years  
Capitalized software        
Property and equipment        
Useful Life     3 years  
Buildings | Minimum        
Operating Leases        
Operating leases initial term 1 year   1 year  
Buildings | Maximum        
Operating Leases        
Operating leases initial term 11 years   11 years  
v3.22.4
Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details)
$ in Millions
 3 Months Ended 6 Months Ended
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2022
USD ($)
segment
Dec. 31, 2021
USD ($)
Jun. 30, 2022
USD ($)
Intangible Assets:          
Amortization expense $ 3.3 $ 3.2 $ 6.6 $ 6.4  
Gross Carrying Amount 148.3   148.3   $ 147.1
Accumulated Amortization (64.9)   (64.9)   (58.4)
Net Carrying Value 83.4   $ 83.4   88.7
Number of reporting units | segment     1    
Future amortization of intangible assets          
Fiscal 2022 - remainder 6.5   $ 6.5    
Fiscal 2023 12.1   12.1    
Fiscal 2024 10.9   10.9    
Fiscal 2025 9.7   9.7    
Fiscal 2026 8.1   8.1    
Thereafter 35.9   35.9    
Trade names          
Intangible Assets:          
Gross Carrying Amount 85.1   85.1   85.1
Accumulated Amortization (25.9)   (25.9)   (23.1)
Net Carrying Value 59.2   59.2   62.0
Customer relationships          
Intangible Assets:          
Gross Carrying Amount 39.8   39.8   38.9
Accumulated Amortization (27.4)   (27.4)   (25.3)
Net Carrying Value 12.4   12.4   13.6
Developed technology          
Intangible Assets:          
Gross Carrying Amount 22.0   22.0   21.7
Accumulated Amortization (10.5)   (10.5)   (8.9)
Net Carrying Value 11.5   11.5   12.8
Other          
Intangible Assets:          
Gross Carrying Amount 1.4   1.4   1.4
Accumulated Amortization (1.1)   (1.1)   (1.1)
Net Carrying Value $ 0.3   $ 0.3   $ 0.3
v3.22.4
Summary of Significant Accounting Policies - Fair Value Measurement (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Nov. 30, 2020
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Jun. 30, 2022
Jun. 30, 2021
Assets and liabilities measured at fair value            
Estimated fair value of long-term debt     $ 377,200      
Estimated fair value of marketable securities     103,000      
Expense on estimate of fair value of contingent consideration         $ 500 $ 500
Fair value of the contingent consideration         11,300 11,300
Payments of contingent consideration     7,024      
MedCerts            
Assets and liabilities measured at fair value            
Ownership percentage acquired (as a percent) 100.00%          
Total consideration $ 70,000          
Contingent consideration $ 10,800          
Payments of contingent consideration     7,000      
MedCerts | Selling, General, and Administrative Expenses            
Assets and liabilities measured at fair value            
Gain on contingent consideration     4,300      
Measured on a recurring basis            
Assets and liabilities measured at fair value            
Assets, Fair Value Disclosure     0      
Liabilities, Fair Value Disclosure     0      
Measured on a recurring basis | Contingent Consideration | Acquisitions            
Assets and liabilities measured at fair value            
Fair Value Liability, beginning of period     11,290      
Fair Value Liability, ending of period         11,290  
Measured on a recurring basis | Convertible Note | Acquisitions            
Assets and liabilities measured at fair value            
Fair Value Asset, beginning of period     889      
Fair Value Asset, ending of period         889  
Measured on a recurring basis | Significant Unobservable Inputs (Level 3) | Contingent Consideration | Acquisitions            
Assets and liabilities measured at fair value            
Fair Value Liability, beginning of period   $ 11,205 11,290 $ 11,082 11,082  
Purchases, Issuances and Settlements     (7,024)      
Realized Liability Gains/(Losses)   521 (4,266) 644    
Fair Value Liability, ending of period   11,726   11,726 11,290 11,082
Measured on a recurring basis | Significant Unobservable Inputs (Level 3) | Convertible Note | Acquisitions            
Assets and liabilities measured at fair value            
Fair Value Asset, beginning of period   5,006 889 5,006 5,006  
Purchases, Issuances and Settlements     $ (889)      
Fair Value Asset, ending of period   $ 5,006   $ 5,006 $ 889 $ 5,006
v3.22.4
Summary of Significant Accounting Policies - Net Income (Loss) Per Common Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Sep. 30, 2022
Dec. 31, 2021
Sep. 30, 2021
Dec. 31, 2022
Dec. 31, 2021
Basic and diluted net income (loss) per share computation:            
Net income (loss) attributable to common stockholders $ 50,705 $ (22,672) $ 42,004 $ (5,883) $ 28,033 $ 36,121
Weighted average common shares-basic 42,259,061   41,525,736   42,167,844 41,042,401
Basic net income (loss) per share (in dollars per share) $ 1.20   $ 1.01   $ 0.66 $ 0.88
Effect of dilutive stock options and restricted stock awards (in shares) 288,273   437,663   434,561 1,371,427
Weighted average common shares-diluted 42,547,334   41,963,399   42,602,405 42,413,828
Diluted net income (loss) per share (in dollars per share) $ 1.19   $ 1.00   $ 0.66 $ 0.85
Stock options and restricted stock            
Basic and diluted net income (loss) per share computation:            
Anti-dilutive shares 44,546   5,193   26,789 102,536
v3.22.4
Income Taxes (Details)
$ in Thousands
 1 Months Ended 3 Months Ended 6 Months Ended
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
USD ($)
installment
Mar. 27, 2020
Reconciliation to income tax at the statutory rate:                
Effective income tax rate (as a percent)     27.10% 27.50% 28.80% 26.50%    
Employer portion of social security payroll tax percentage               6.20%
Deferred amount of employer portion of social security payroll tax             $ 14,100  
Number of installments that deferred employer social security payroll taxes will be repaid | installment             2  
Deferred amount paid $ 7,050 $ 7,050            
v3.22.4
Finance and Operating Leases (Details) - USD ($)
Dec. 31, 2022
Aug. 31, 2022
Jun. 30, 2022
Jul. 31, 2020
Apr. 30, 2020
Finance and Operating Leases          
Finance lease liability $ 73,302,000   $ 66,277,000    
Maximum          
Finance and Operating Leases          
Finance lease term 3 years        
BALC          
Finance and Operating Leases          
Finance lease liability $ 73,300,000   66,300,000    
Available line of credit       $ 41,000,000.0 $ 25,000,000.0
Finance lease right-of-use assets $ 51,000,000.0   42,700,000    
Finance lease term 36 months        
Purchase option $ 1        
Additional amount of borrowings as at the and of the reporting period     $ 54,000,000.0    
BALC | Minimum          
Finance and Operating Leases          
Fixed interest rate (as a percent) 1.52%        
BALC | Maximum          
Finance and Operating Leases          
Fixed interest rate (as a percent) 5.83%        
CSI Leasing          
Finance and Operating Leases          
Finance lease term   36 months      
v3.22.4
Finance and Operating Leases - Finance leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Jun. 30, 2022
Finance leases    
Remainder of fiscal year $ 24,022  
Year 1 34,593 $ 38,600
Year 2 14,244 24,816
Year 3 3,194 4,468
Year 4   22
Total minimum payments 76,053 67,906
Less: imputed interest (2,751) (1,629)
Finance lease liability 73,302 66,277
Less: current portion of finance lease liability (44,377) (37,389)
Long-term finance lease liability $ 28,925 $ 28,888
v3.22.4
Finance and Operating Leases - Operating Leases (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Jun. 30, 2022
Operating Leases    
Remainder of fiscal year $ 7,321  
Year 1 16,115 $ 15,120
Year 2 15,436 16,638
Year 3 12,051 16,168
Year 4 8,518 12,900
Year 5   8,797
Thereafter 27,455  
Thereafter   27,447
Total minimum payments 86,896 97,070
Less: imputed interest (7,788) (9,113)
Operating lease liability 79,108 87,957
Less: current portion of operating lease liability (13,281) (12,830)
Long-term operating lease liability 65,827 75,127
Operating lease right-of-use assets, net $ 75,823 $ 85,457
Minimum    
Operating Leases    
Operating leases initial term 1 year  
Maximum    
Operating Leases    
Operating leases initial term 11 years  
v3.22.4
Finance and Operating Leases - Sub Leases (Details)
$ in Thousands
 6 Months Ended
Dec. 31, 2022
USD ($)
facility
Jun. 30, 2022
USD ($)
Finance and Operating Leases    
Remainder of current fiscal year $ 698  
Year 1 665 $ 1,396
Year 2 412 665
Year 3 140 412
Year 4   140
Total sublease income $ 1,915 $ 2,613
Number of entity's facilities that are being subleased through July 2023 | facility 1  
Number of entity's facilities that are being subleased through November 2024 | facility 1  
Number Of Facilities Being Subleased Through December 2025 | facility 1  
v3.22.4
Finance and Operating Leases - Lease cost and other information (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Finance lease cost:        
Amortization of right-of-use assets $ 10,018 $ 9,368 $ 19,952 $ 16,988
Interest on lease liabilities 507 445 895 862
Total lease cost 13,479 15,112 27,857 28,313
Cash paid for amounts included in the measurement of lease liabilities        
Operating cash flows from operating leases (3,361) (5,341) (5,966) (10,662)
Financing cash flows from finance leases (10,624) (7,724) (19,938) (14,744)
Right-of-use assets obtained in exchange for new finance lease liabilities $ 5,305 $ 6,898 25,212 20,881
Right-of-use assets obtained in exchange for new operating lease liabilities     $ 576 $ 6,805
Weighted-average remaining lease term - finance leases 1 year 10 months 2 days 2 years 3 months 7 days 1 year 10 months 2 days 2 years 3 months 7 days
Weighted-average remaining lease term - operating leases 6 years 4 months 6 days 6 years 8 months 23 days 6 years 4 months 6 days 6 years 8 months 23 days
Weighted-average discount rate - finance leases 3.31% 2.40% 3.31% 2.40%
Weighted-average discount rate - operating leases 2.77% 2.76% 2.77% 2.76%
Instructional Costs and Services        
Finance lease cost:        
Operating lease cost $ 2,640 $ 3,931 $ 6,354 $ 7,866
Short-term lease cost 31 16 56 35
Sublease income (270) (247) (552) (579)
Selling, general and administrative expenses        
Finance lease cost:        
Operating lease cost 586 1,777 1,172 3,443
Short-term lease cost 47 4 140 9
Sublease income $ (80) $ (182) $ (160) $ (311)
v3.22.4
Debt (Details) - USD ($)
$ in Thousands
Dec. 31, 2022
Jun. 30, 2022
Debt    
Less: unamortized debt issuance costs $ (7,740) $ (8,562)
Total debt 412,260 411,438
Long-term debt 412,260 411,438
Convertible Senior Notes Due 2027    
Debt    
Total debt $ 420,000 $ 420,000
v3.22.4
Debt - Additional Information (Details)
$ / shares in Units, $ in Thousands
 2 Months Ended 3 Months Ended 6 Months Ended
Sep. 30, 2020
USD ($)
$ / shares
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Dec. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Debt          
Amortization of fees on debt       $ 822 $ 809
Convertible Senior Notes Due 2027          
Debt          
Face amount $ 420,000        
Interest rate (as percent) 1.125%        
Net proceeds $ 408,600        
Interest expense   $ 1,200 $ 1,200 2,400 2,400
Debt issuance costs $ 11,400        
Amortization of fees on debt   $ 400 $ 400 $ 800 $ 800
Period prior to maturity date where noteholders may convert their notes at their election prior to the maturity date 2 days        
Conversion rate 18.9109        
Conversion price (in dollars per share) | $ / shares $ 52.88        
Upper strike price (in dollars per share) | $ / shares $ 86.174        
Capped call transaction $ 60,400        
v3.22.4
Credit Facility (Details) - Credit Facility. - USD ($)
$ in Millions
 2 Months Ended
Jan. 27, 2020
Sep. 30, 2020
Dec. 31, 2022
Credit Facility      
Face amount $ 100.0    
Term of debt 5 years    
Repayments on credit facility   $ 100.0  
Amount outstanding     $ 0.0
Amount of accordion feature under the credit facility $ 200.0    
LIBOR | Minimum      
Credit Facility      
Interest rate spread added to base rate (as a percent) 0.875%    
LIBOR | Maximum      
Credit Facility      
Interest rate spread added to base rate (as a percent) 1.50%    
v3.22.4
Equity Incentive Plan (Details) - shares
 6 Months Ended
Dec. 09, 2022
Dec. 31, 2022
Jun. 30, 2022
Equity Transactions      
Options outstanding (in shares)   675 1,350
Exercisable after expiration of option term (in shares)   0  
Employee and Non Employees Stock Option [Member]      
Equity Transactions      
Vesting period   4 years  
2016 Plan      
Equity Transactions      
Shares reserved for issuance   2,457,533  
Additional shares available for issuance 1,045,000    
Number of stock awards outstanding (in shares)   1,666,099  
v3.22.4
Equity Incentive Plan - Activity (Details) - USD ($)
 6 Months Ended 12 Months Ended
Dec. 31, 2022
Jun. 30, 2022
Shares    
Outstanding at the beginning of the period (in shares) 1,350  
Exercised (in shares) (675)  
Outstanding at the end of the period (in shares) 675 1,350
Weighted-Average Exercise Price    
Outstanding at the beginning of the period (in dollars per share) $ 14.77  
Exercised (in dollars per share) 14.77  
Outstanding at the end of the period (in dollars per share) $ 14.77 $ 14.77
Additional information    
Weighted Average Remaining Contractual Life 6 months 21 days 11 months 23 days
Aggregate Intrinsic Value $ 11,144 $ 35,127
v3.22.4
Equity Incentive Plan - Relationship (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Employee and Non Employees Stock Option [Member]        
Equity Transactions        
Intrinsic value of options exercised     $ 0.0 $ 0.2
Unrecognized compensation $ 0.0   0.0  
Stock based compensation expense 0.0 $ 0.0 0.0 0.0
Performance Share Units        
Equity Transactions        
Unrecognized compensation 7.7   $ 7.7  
Weighted average period for recognition of total unrecognized compensation expense related to unvested stock options granted     2 years 2 months 12 days  
Stock based compensation expense $ 1.0 $ (3.6) $ 1.9 $ (0.6)
v3.22.4
Equity Incentive Plan - Other (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Aug. 31, 2022
shares
Oct. 31, 2021
shares
Aug. 31, 2021
shares
Dec. 31, 2022
USD ($)
shares
Dec. 31, 2021
USD ($)
shares
Dec. 31, 2022
USD ($)
$ / shares
shares
Dec. 31, 2021
USD ($)
Jun. 30, 2022
USD ($)
$ / shares
shares
Jun. 30, 2021
USD ($)
item
$ / shares
shares
Jun. 30, 2020
USD ($)
$ / shares
shares
Jun. 30, 2019
USD ($)
$ / shares
shares
Equity Transactions                      
Vested (in shares) 238,863                    
Percentage of target that the stock awards were granted at                 123.00%    
Number of metrics assumed to be achieved at threshold | $                 1    
Fiscal Year 2021 LTIP                      
Equity Transactions                      
Number of Metrics, Assumed to be Achieved | item                 2    
Vest immediately                      
Equity Transactions                      
Vested (in shares)           4,533          
Earned award vesting percentage           40.00%          
Vest annually over two years.                      
Equity Transactions                      
Vested (in shares)           6,797          
Earned award vesting percentage           60.00%          
Vest the following year                      
Equity Transactions                      
Vested (in shares) 77,048                    
Certified achievement percentage 200.00%                    
Restricted Stock                      
Equity Transactions                      
Nonvested at the beginning of the period (in shares)           1,131,466          
Granted (in shares)           537,096          
Granted (in dollars per share) | $ / shares           $ 38.32          
Nonvested at the end of the period (in shares)       1,056,243   1,056,243   1,131,466      
Vested (in shares)           548,315          
Forfeited or canceled (in shares)           64,004          
Vesting period           3 years          
Unrecognized compensation | $       $ 28,000   $ 28,000          
Weighted average period for recognition of total unrecognized compensation expense related to unvested stock options granted           2 years          
Fair value of share-based compensation awards granted in period | $           $ 20,900 $ 15,300        
Fair value of share-based compensation awards vested in period | $           20,400 15,400        
Stock based compensation expense | $       $ 3,900 $ 4,200 $ 8,500 9,500        
Restricted Stock | Vesting Based on Performance                      
Equity Transactions                      
Granted (in shares)           0          
Restricted Stock | Service based awards                      
Equity Transactions                      
Granted (in shares)           537,096          
Nonvested at the end of the period (in shares)       1,012,116   1,012,116          
Vested (in shares)           218,078          
Restricted Stock | Vesting Based On Performance And Service                      
Equity Transactions                      
Nonvested at the end of the period (in shares)       44,128   44,128          
Vested (in shares)           330,237          
Performance Share Units                      
Equity Transactions                      
Number of shares of common stock each unit has the right to receive       1   1          
Nonvested at the beginning of the period (in shares)           355,302          
Granted (in shares)           366,507          
Granted (in dollars per share) | $ / shares           $ 33.87          
Nonvested at the end of the period (in shares)       520,449   520,449   355,302      
Vested (in shares)           119,467          
Forfeited or canceled (in shares)           81,893          
Unrecognized compensation | $       $ 7,700   $ 7,700          
Weighted average period for recognition of total unrecognized compensation expense related to unvested stock options granted           2 years 2 months 12 days          
Stock based compensation expense | $       $ 1,000 $ (3,600) $ 1,900 (600)        
Performance Share Units | Fiscal Year 2019 LTIP                      
Equity Transactions                      
Granted (in shares)                   34,030 263,936
Granted (in dollars per share) | $ / shares                   $ 23.51 $ 30.05
Vested (in shares)   115,223                  
Forfeited or canceled (in shares)   107,397                  
Fair value | $                   $ 800 $ 7,900
Performance Share Units | Fiscal Year 2020 TRIP                      
Equity Transactions                      
Fair value | $                   $ 12,300  
Performance Share Units | Fiscal Year 2021 MIP                      
Equity Transactions                      
Granted (in shares)       37,886 38,575            
Earned award vesting percentage         33.33%            
Performance Share Units | Fiscal Year 2021 LTIP                      
Equity Transactions                      
Granted (in shares)                 111,450    
Granted (in dollars per share) | $ / shares                 $ 24.15    
Fair value | $                 $ 2,700    
Performance Share Units | Fiscal Year 2022 LTIP                      
Equity Transactions                      
Granted (in shares)               250,250      
Granted (in dollars per share) | $ / shares               $ 36.30      
Vesting period               3 years      
Fair value | $               $ 9,100      
Performance Share Units | Fiscal Year 2023 LTIP                      
Equity Transactions                      
Granted (in shares)           289,640          
Granted (in dollars per share) | $ / shares           $ 34.41          
Vesting period           3 years          
Fair value | $       $ 10,000   $ 10,000          
Performance Share Units | Tech Elevator                      
Equity Transactions                      
Stock based compensation expense | $       300 $ 300 600 700        
Performance Share Units | Tech Elevator | Fiscal Year 2021 MIP                      
Equity Transactions                      
Intrinsic value of awards | $                 $ 4,000    
Performance Share Units | Revenue | Fiscal Year 2020 TRIP                      
Equity Transactions                      
Earned award vesting percentage                   60.00%  
Performance Share Units | EBITDA | Fiscal Year 2020 TRIP                      
Equity Transactions                      
Earned award vesting percentage                   40.00%  
Performance Shares Tranche #1                      
Equity Transactions                      
Fair value | $       $ 4,800   4,800          
Share based payment award fair market value decrease | $           $ 800          
Performance Shares Tranche #1 | Fiscal Year 2019 LTIP                      
Equity Transactions                      
Earned award vesting percentage                   45.00%  
Performance Shares Tranche #1 | Calendar Year 2021 | Fiscal Year 2020 TRIP                      
Equity Transactions                      
Earned award vesting percentage                   70.00%  
Performance Shares Tranche #1 | Vest immediately | Fiscal Year 2022 LTIP                      
Equity Transactions                      
Earned award vesting percentage               50.00%      
Performance Shares Tranche #1 | Vest immediately | Fiscal Year 2023 LTIP                      
Equity Transactions                      
Earned award vesting percentage           50.00%          
Performance Shares Tranche #1 | Vest annually over two years. | Fiscal Year 2022 LTIP                      
Equity Transactions                      
Earned award vesting percentage               50.00%      
Performance Shares Tranche #1 | Vest annually over two years. | Fiscal Year 2023 LTIP                      
Equity Transactions                      
Earned award vesting percentage           50.00%          
Performance Shares Tranche #2 | Fiscal Year 2019 LTIP                      
Equity Transactions                      
Earned award vesting percentage                   25.00%  
Certified achievement percentage   193.00%                  
Performance Shares Tranche #2 | Calendar Year 2022 | Fiscal Year 2020 TRIP                      
Equity Transactions                      
Earned award vesting percentage                   30.00%  
Performance Shares Tranche #3 | Fiscal Year 2019 LTIP                      
Equity Transactions                      
Earned award vesting percentage                   30.00%  
Time Based Award | Tech Elevator | Fiscal Year 2021 MIP                      
Equity Transactions                      
Vesting period                 3 years    
Intrinsic value of awards | $                 $ 4,000    
Time Based Award | Vest immediately | Tech Elevator | Fiscal Year 2021 MIP                      
Equity Transactions                      
Earned award vesting percentage                 70.00%    
Time Based Award | Vest annually over two years. | Tech Elevator | Fiscal Year 2021 MIP                      
Equity Transactions                      
Earned award vesting percentage                 30.00%    
Deferred Stock Units                      
Equity Transactions                      
Nonvested at the beginning of the period (in shares)           69,117          
Granted (in shares)           19,614          
Granted (in dollars per share) | $ / shares           $ 33.03          
Nonvested at the end of the period (in shares)       88,731   88,731   69,117      
Unrecognized compensation | $       $ 600   $ 600          
Weighted average period for recognition of total unrecognized compensation expense related to unvested stock options granted           7 months 6 days          
Stock based compensation expense | $       $ 100 $ 100 $ 200 $ 200        
Chief Executive Officer And Executive Chairman | Performance Share Units                      
Equity Transactions                      
Granted (in dollars per share) | $ / shares                   $ 27.91  
Chief Executive Officer And Executive Chairman | Performance Share Units | Vesting Based on Performance                      
Equity Transactions                      
Granted (in shares)                   358,294  
Chief Executive Officer And Executive Chairman | Performance Shares Tranche #2                      
Equity Transactions                      
Granted (in shares)     119,431                
Senior Executives | Performance Share Units | 2019 SPP                      
Equity Transactions                      
Market capitalization growth performance period                 3 years    
v3.22.4
Equity Incentive Plan - Vesting (Details) - $ / shares
 1 Months Ended 6 Months Ended
Aug. 31, 2022
Dec. 31, 2022
Shares    
Vested (in shares) (238,863)  
Restricted Stock    
Shares    
Nonvested at the beginning of the period (in shares)   1,131,466
Granted (in shares)   537,096
Vested (in shares)   (548,315)
Forfeited or canceled (in shares)   (64,004)
Nonvested at the end of the period (in shares)   1,056,243
Weighted-Average Grant Date Fair Value    
Nonvested at the beginning of the period (in dollars per share)   $ 33.27
Granted (in dollars per share)   38.32
Vested (in dollars per share)   31.91
Forfeited or canceled (in dollars per share)   36.01
Nonvested at the end of the period (in dollars per share)   $ 36.63
Period over which shares vest in semi-annual intervals   3 years
Restricted Stock | Independent Contractors [Member]    
Shares    
Granted (in shares)   0
Restricted Stock | Vesting Based on Performance [Member]    
Shares    
Granted (in shares)   0
Restricted Stock | Vesting Based On Performance And Service    
Shares    
Vested (in shares)   (330,237)
Nonvested at the end of the period (in shares)   44,128
Performance Share Units    
Shares    
Nonvested at the beginning of the period (in shares)   355,302
Granted (in shares)   366,507
Vested (in shares)   (119,467)
Forfeited or canceled (in shares)   (81,893)
Nonvested at the end of the period (in shares)   520,449
Weighted-Average Grant Date Fair Value    
Nonvested at the beginning of the period (in dollars per share)   $ 32.62
Granted (in dollars per share)   33.87
Vested (in dollars per share)   30.48
Forfeited or canceled (in dollars per share)   25.89
Nonvested at the end of the period (in dollars per share)   $ 35.06
Deferred Stock Units    
Shares    
Nonvested at the beginning of the period (in shares)   69,117
Granted (in shares)   19,614
Nonvested at the end of the period (in shares)   88,731
Weighted-Average Grant Date Fair Value    
Nonvested at the beginning of the period (in dollars per share)   $ 24.27
Granted (in dollars per share)   33.03
Nonvested at the end of the period (in dollars per share)   $ 26.20
v3.22.4
Related Party Transactions (Details) - Future of School - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2022
Dec. 31, 2021
Jun. 30, 2021
Jun. 30, 2019
Related Party Transactions            
Contributions made to related party $ 0.0 $ 0.2 $ 0.0 $ 0.8    
Accrued contributions to related party $ 2.5   $ 2.5   $ 3.5 $ 2.5
v3.22.4
Commitments and Contingencies (Details)
$ in Millions
 1 Months Ended 4 Months Ended
Dec. 11, 2020
lawsuit
Apr. 30, 2021
stockholder
Dec. 31, 2022
USD ($)
Buildings      
Commitments and contingencies      
Guarantees related to lease commitments | $     $ 0.3
Securities Litigation | Pending Litigation      
Commitments and contingencies      
Number of lawsuits | lawsuit 2    
Shemen Case And Ahmed Case | Pending Litigation      
Commitments and contingencies      
Number of shareholders who filed suit | stockholder   3  
v3.22.4
Acquisitions and Investments (Details)
$ in Thousands
 1 Months Ended 6 Months Ended 12 Months Ended
Jul. 08, 2022
USD ($)
Oct. 31, 2021
USD ($)
Aug. 31, 2018
USD ($)
Dec. 31, 2022
USD ($)
Jun. 30, 2022
USD ($)
Jun. 30, 2019
USD ($)
fund
Sep. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Dec. 31, 2021
USD ($)
Aug. 31, 2020
USD ($)
Acquisition and Investments                    
Goodwill       $ 246,676 $ 241,022          
Intangible assets       83,410 88,669          
Three Early Stage Funds                    
Acquisition and Investments                    
Number of limited partnerships invested in | fund           3        
Investment commitment           $ 15,000        
Investments in limited partnerships       10,400            
New Markets                    
Acquisition and Investments                    
Investment recorded at cost       3,200            
Rethink                    
Acquisition and Investments                    
Equity method investment       7,200            
Tallo                    
Acquisition and Investments                    
Investment     $ 6,700             $ 2,300
Ownership percentage     39.50%             46.10%
Convertible note     $ 5,000              
Ownership percentage on an if-converted basis     55.00%              
Term of debt     48 months              
Impairment loss         4,500          
Loans receivable   $ 3,000                
Loans receivable interest rate   5.00%                
Maturity term of loans receivable   5 years                
Loans receivable funded amount               $ 3,000 $ 3,000  
Credit loss expense on convertible note         4,100          
Credit loss expense on promissory note         3,000          
Reversal of accrued interest on convertible note and promissory note         $ 400          
Tallo | Series D Preferred shares                    
Acquisition and Investments                    
Convertible into Series D Preferred shares     3,670              
Tallo | Base Rate                    
Acquisition and Investments                    
Interest rate spread added to base rate (as a percent)     25.00%              
Acquisition of Tallo Assets                    
Acquisition and Investments                    
Cash purchase price $ 1,000                  
Working capital 400                  
Cash and contingent consideration paid 7,300                  
Goodwill 5,700     $ 5,700     $ 5,200      
Intangible assets $ 1,300                  
Acquisition of Tallo Assets | Customer relationships                    
Acquisition and Investments                    
Amortization period 10 years                  
v3.22.4
Supplemental Disclosure of Cash Flow Information (Details) - USD ($)
$ in Thousands
 6 Months Ended
Dec. 31, 2022
Dec. 31, 2021
Supplemental Disclosure of Cash Flow Information    
Cash paid for interest $ 3,328 $ 3,286
Cash paid for taxes 22,434 13,099
Supplemental disclosure of non-cash financing activities:    
Right-of-use assets obtained from acquisitions 385  
Right-of-use assets obtained in exchange for new finance lease liabilities 25,212 20,881
Supplemental disclosure of non-cash investing activities:    
Stock-based compensation expense capitalized on software development 215 143
Stock-based compensation expense capitalized on curriculum development 44 57
Non-cash purchase price related to business combinations 5,861 1,145
Business Combinations:    
Acquired assets 1,132 464
Intangible assets, net 1,309 2,157
Goodwill 5,655 568
Assumed liabilities (385) (42)
Deferred revenue $ (441) $ (1,084)