Certain statements in Management's Discussion and Analysis or MD&A, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements generally are identified by the words "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "plan," "may," "should," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed in "Risk Factors" in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year endedJune 30, 2022 , which we refer to as our Annual Report, and in Part II, Item 1A of this Quarterly Report. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements. This MD&A is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. As used in this MD&A, the words, "we," "our" and "us" refer toStride, Inc. and its consolidated subsidiaries. This MD&A should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this report, as well as the consolidated financial statements and MD&A of our Annual Report. The following overview provides a summary of the sections included in our MD&A:
? Executive Summary - a general description of our business and key highlights of
the three and six months ended
? Critical Accounting Estimates - a discussion of critical accounting estimates
requiring judgments and the application of critical accounting policies.
? Results of Operations - an analysis of our results of operations in our
condensed consolidated financial statements.
Liquidity and Capital Resources - an analysis of cash flows, sources and uses
? of cash, commitments and contingencies, and quantitative and qualitative
disclosures about market risk.
Executive Summary
We are an education services company providing virtual and blended learning. Our technology-based products and services enable our 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.
Our clients are primarily public and private schools, school districts, and charter boards. Additionally, we offer solutions to employers, government agencies and consumers.
We offer a wide range of individual products and services, as well as customized solutions, such as our most comprehensive school-as-a-service offering which supports our clients in operating full-time virtual or blended schools. More than three million students have attended schools powered by Stride curriculum and services since our inception. In our most recent academic year endedJune 30, 2022 , we graduated 11,775 high school students. Our solutions address two growing markets: General Education and Career Learning. 35 Table of Contents General Education Career Learning ? School-as-a-service ?Stride Career Prep school-as-a-service ? Stride Private Schools ? Learning Solutions Career Learning software and services sales ? Learning Solutions software and services sales ? Adult Learning 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. 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. We provide 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. We also offer focused post-secondary career learning programs to adult learners, throughGalvanize, Inc. ("Galvanize"),Tech Elevator, Inc. ("Tech Elevator"), andMedCerts, 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. For both the General Education and Career Learning markets, the majority of revenue is derived from our comprehensive school-as-a-service offering which includes an integrated package of curriculum, technology systems, instruction, and support services that we administer on behalf of our customers. The average duration of the agreements for our school-as-a-service offering is greater than five years, and most provide for automatic renewals absent a customer notification of non-renewal. During any fiscal year, we may enter into new agreements, receive non-automatic renewal notices, negotiate replacement agreements, terminate such agreements or receive notices of termination, or customers may transition a school to a different offering. For the 2022-2023 school year, we provide our school-as-a-service offering for 85 schools in 31 states and theDistrict of Columbia in the General Education market, and 52 schools or programs in 27 states and theDistrict of Columbia in the Career Learning market. We generate a significant portion of our revenues from the sale of curriculum, administration support and technology services to virtual and blended public schools. The amount of revenue generated from these contracts is impacted largely by the number of enrollments, the mix of enrollments across grades and states, state or district per student funding levels and attendance requirement, among other items. The average duration of the agreements for our school-as-a-service offering is greater than five years, and most provide for automatic renewals absent a customer notification within a 36 Table of Contents negotiated time frame. The two key financial metrics that we use to assess financial performance are revenues and operating income. For the six months endedDecember 31, 2022 , revenues increased to$883.6 million from$809.7 million in the prior year, an increase of 9.1%. Over the same period, operating income decreased to$39.4 million from$49.9 million in the prior year, a decrease of 21.0%. The decrease in operating income was driven by increases in selling, general, and administrative expenses; partially offset by increases in revenue. Additionally, we use the non-financial metric of total enrollments to assess performance, as enrollment is a key driver of our revenues. Total enrollments for the six months endedDecember 31, 2022 were 176.6 thousand, a decrease of 11.4 thousand, or 6.1%, over the prior year. Our revenues are subject to annual school district financial audits, which incorporate enrollment counts, funding and other routine financial audit considerations. The results from these audits and other routine changes in funding estimates are incorporated into the Company's monthly funding estimates for the current and prior periods. Historically, aggregate funding estimates differed from actual reimbursements by less than 2% of annual revenue, which may vary from quarter to quarter. 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.
Environmental, Social and Governance
As overseers of risk and stewards of long-term enterprise value, Stride's Board of Directors plays a vital role in assessing our organization's environmental and social impacts. They are also responsible for understanding the potential impact and related risks of environmental, social and governance ("ESG") issues on the organization's operating model. Our Board and management are committed to identifying those ESG issues most likely to impact business operations and growth. We craft policies that are appropriate for our industry and that are of concern to our employees, investors, customers and other key stakeholders. Our Board ensures that the Company's leaders have ample opportunity to leverage ESG for the long-term good of the organization, its stakeholders, and society. Each Committee of the Board monitors ESG efforts in their respective areas, with theNominating and Governance Committee coordinating across all Committees. Since our inception twenty years ago, we have removed barriers that impact academic equity. We provide high-quality education for anyone-particularly those in underserved communities-as a means to foster economic empowerment and address societal inequities from kindergarten all the way through college and career readiness. We reinforced our commitment in this area by launching several initiatives including initially offering scholarships to advance education and career opportunities for students in underserved communities, expanding career pathways in socially responsible law enforcement and increasing employment of teachers in underserved communities at Stride-powered schools. We developed interactive, modular courses focused on racial equity and social justice that are being made available for free to every public school. Among the many ESG issues we support within the Company, we endeavor to promote diversity and inclusion across every aspect of the organization. We sponsor employee resource groups to provide support for female, minority, differently abled, LGBTQ+, and veteran employees and support employee volunteer efforts. Our commitment is evident in the make-up of our leadership team. We have more minorities in executive management and more women in executive management than the representative population. Importantly, our Board of Directors is also diverse with female, Hispanic, and black orAfrican American members. Our commitment to ESG initiatives is an endeavor both the Board and management undertake for the general betterment of those both inside and outside of our Company. The nature of our business supports environmental sustainability. Most of our employees work from home and most students at Stride-powered schools attend virtual classes, even prior to the COVID-19 crisis, reducing the carbon output from commuting in cars or buses. Our online curriculum reduces the need for paper. Our meetings are most often held virtually using digital first presentations rather than paper.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted inthe United States of America ("GAAP") requires us to make estimates and assumptions that affect the amounts reported in our 37
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condensed consolidated financial statements and accompanying notes. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and any such differences may be material to our consolidated financial statements. Critical accounting policies and estimates are disclosed in our Annual Report. There have been no significant updates to our critical accounting estimates disclosed in our Annual Report.
Results of Operations
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. We continue to conduct business as usual with some modifications to employee travel, employee work locations, and cancellation of certain events. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, customers, partners, suppliers and stockholders. It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers and prospects, or on our long-term financial results.
Lines of Revenue
We operate 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. The Chief Operating Decision Maker evaluates profitability based on consolidated results. We have two lines of revenue: (i) General Education and (ii) Career Learning.
Enrollment Data
The following table sets forth total enrollment data for students in our General Education and Career Learning lines of revenue. Enrollments for General Education and Career Learning only include those students in full service public or private programs where Stride provides a combination of curriculum, technology, instructional and support services inclusive of administrative support. No enrollments are included in Career Learning for Galvanize, Tech Elevator or MedCerts. This data includes enrollments for which Stride receives no public funding or revenue. If the mix of enrollments changes, our revenues will be impacted to the extent the average revenue per enrollment is significantly different. We do not award or permit incentive compensation to be paid to our public school program enrollment staff or contractors based on the number of students enrolled. The following represents our current enrollment for each of the periods indicated: Three Months Ended Six Months Ended December 31, 2022 / 2021 December 31, 2022 / 2021 2022 2021 Change Change % 2022 2021 Change Change % (In thousands, except percentages) General Education (1) 111.2 145.6 (34.4)
(23.6%) 111.5 146.1 (34.6) (23.7)% Career Learning (1) (2)
66.3 41.9 24.4 58.2% 65.1 41.9 23.2 55.4% Total Enrollment 177.5 187.5 (10.0) (5.3%) 176.6 188.0 (11.4) (6.1%)
Enrollments reported for the first quarter are equal to the official count
(1) date number, which was
year 2023 and
(2) No enrollments are included in Career Learning for Galvanize, Tech Elevator
or MedCerts. Revenue Data Revenues are captured by market based on the underlying customer contractual agreements. Where customers 38 Table of Contents purchase products and services for both General Education and Career Learning markets we allocate revenues based on the program for which each student is enrolled. All kindergarten through fifth grade students are considered General Education students. Periodically, a middle school or high school student enrollment may change line of revenue classification. The following represents our current revenues for each of the periods indicated: Three Months Ended Six Months Ended December 31, Change 2022 / 2021 December 31, Change 2022 / 2021 2022 2021 $ % 2022 2021 $ % (In thousands, except percentages) General Education$ 274,764 $ 313,241 $ (38,477) (12.3%)$ 546,422 $ 619,582 $ (73,160) (11.8%) Career Learning Middle - High School 153,795 75,287 78,508 104.3% 279,330 146,699 132,631 90.4% Adult 29,876 20,979 8,897 42.4% 57,833 43,452 14,381 33.1% Total Career Learning 183,671 96,266 87,405 90.8% 337,163 190,151 147,012 77.3% Total Revenues$ 458,435 $ 409,507 $ 48,928 11.9%$ 883,585 $ 809,733 $ 73,852 9.1% Products and Services Stride has invested over$600 million in the last twenty years to develop curriculum, systems, instructional practices and support services that enable us to support hundreds of thousands of students. The following describes the various products and services that we provide to customers. Products and services are provided on an individual basis as well as customized solutions, such as our most comprehensive school-as-a-service offering which supports our clients in operating full-time virtual or blended schools. Stride is continuously innovating to remain at the forefront of effective educational techniques to meet students' needs. It continues to expand upon its personalized learning model, improve the user experience of its products, and develop tools and partnerships to more effectively engage and serve students, teachers, and administrators. Curriculum and Content - Stride has one of the largest digital research-based curriculum portfolios for the K-12 online education industry that includes some of the best in class content available in the market. Our customers can select from hundreds of high-quality, engaging, online coursework and content, as well as many state customized versions of those courses, electives, and instructional supports. Since our inception, we have built core courses on a foundation of rigorous standards, following the guidance and recommendations of leading educational organizations at the national and state levels. State standards are continually evolving, and we continually invest in our curriculum to meet these changing requirements. Through our subsidiaries Galvanize, Tech Elevator and MedCerts, we have added high-quality, engaging, online coursework and content in software engineering, healthcare, and medical fields. Systems - We have established a secure and reliable technology platform, which integrates proprietary and third-party systems, to provide a high-quality educational environment and gives us the capability to grow our customer programs and enrollment. Our end-to-end platform includes single-sign on capability for our content management, learning management, student information, data reporting and analytics, and various support systems that allow customers to provide a high-quality and personalized educational experience for students. A la carte offerings can provide curriculum and content hosting on customers' learning management systems, or integration with customers' student information systems. Instructional Services - We offer a broad range of instructional services that includes customer support for instructional teams, including recruitment of state certified teachers, training in research-based online instruction methods and Stride systems, oversight and evaluation services, and ongoing professional development. Stride also provides training options to support teachers and parents to meet students' learning needs. Stride's range of training options are designed to enhance skills needed to teach using an online learning platform, and include hands-on training, on-demand courses, and support materials.
Support Services - We offer a broad range of support services, including marketing and enrollment, supporting prospective students through the admission process, assessment management, administrative support (e.g., budget
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proposals, financial reporting, and student data reporting), and technology and materials support (e.g., provisioning of student computers, offline learning kits, internet access and technology support services).
Financial Information
The following table sets forth statements of operations data and the amounts as a percentage of revenues for each of the periods indicated:
Three Months EndedDecember 31 ,
Six Months Ended
2022 2021 2022 2021 (Dollars in thousands) Revenues$ 458,435 100.0 %$ 409,507 100.0 %$ 883,585 100.0 %$ 809,733 100.0 % Instructional costs and services 288,347 62.9 261,950 64.0 583,848 66.1 535,774 66.2 Gross margin 170,088 37.1 147,557 36.0 299,737 33.9 273,959 33.8 Selling, general, and administrative expenses 102,015 22.3 90,642 22.1 260,383 29.5 224,021 27.7 Income from operations 68,073 14.8 56,915 13.9 39,354 4.5 49,938 6.2 Interest expense, net (2,082) (0.5) (1,875) (0.5) (4,128) (0.5) (3,868) (0.5) Other income, net 3,970 0.9 3,884 0.9 5,007 0.6 3,795 0.5 Income before income taxes and loss from equity method investments 69,961 15.3 58,924 14.4 40,233 4.6 49,865 6.2 Income tax expense (18,860) (4.1) (15,928) (3.9) (11,353) (1.3) (13,035) (1.6) Loss from equity method investments (396) (0.1) (992) (0.2) (847) (0.1) (709) (0.1) Net income attributable to common stockholders$ 50,705 11.1 %$ 42,004 10.3 %$ 28,033 3.2 %$ 36,121 4.5 %
Comparison of the Three Months Ended
Revenues. Our revenues for the three months endedDecember 31, 2022 were$458.4 million , representing an increase of$48.9 million , or 11.9%, from$409.5 million for the same period in the prior year. General Education revenues decreased$38.5 million , or 12.3%, year over year. The decrease in General Education revenues was primarily due to the 23.6% decrease in enrollments, school mix (distribution of enrollments by school), and other factors. Career Learning revenues increased$87.4 million , or 90.8%, primarily due to a 58.2% increase in enrollments and school mix. Instructional costs and services expenses. Instructional costs and services expenses for the three months endedDecember 31, 2022 were$288.3 million , representing an increase of$26.3 million , or 10.0%, from$262.0 million for the same period in the prior year. This increase in expense was due to the timing of hiring of personnel and salary increases. Instructional costs and services expenses were 62.9% of revenues during the three months endedDecember 31, 2022 , a decrease from 64.0% for the three months endedDecember 31, 2021 . Selling, general, and administrative expenses. Selling, general, and administrative expenses for the three months endedDecember 31, 2022 were$102.0 million , representing an increase of$11.4 million , or 12.6% from$90.6 million for the same period in the prior year. The increase was primarily due to an increase of$10.3 million in personnel and related benefit costs, including stock-based compensation. Selling, general, and administrative expenses were 22.3% of revenues during the three months endedDecember 31, 2022 , an increase from 22.1% for the three months endedDecember 31, 2021 . Income tax expense. Income tax expense was$18.9 million for the three months endedDecember 31, 2022 , or 27.1% of income before income taxes, as compared to an expense of$15.9 million , or 27.5% of income before income taxes for 40
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the same period in the prior year. The decrease in the effective tax rate for
the three months ended
Comparison of the Six Months Ended
Revenues. Our revenues for the six months endedDecember 31, 2022 were$883.6 million , representing an increase of$73.9 million , or 9.1%, from$809.7 million for the same period in the prior year. General Education revenues decreased$73.2 million , or 11.8%, year over year. The decrease in General Education revenues was primarily due to the 23.7% decrease in enrollments, school mix (distribution of enrollments by school), and other factors. Career Learning revenues increased$147.0 million , or 77.3%, primarily due to a 55.4% increase in enrollments and school mix. Instructional costs and services expenses. Instructional costs and services expenses for the six months endedDecember 31, 2022 were$583.8 million , representing an increase of$48.0 million , or 9.0%, from$535.8 million for the same period in the prior year. This increase in expense was due to the timing of hiring of personnel and salary increases. Instructional costs and services expenses were 66.1% of revenues during the six months endedDecember 31, 2022 , a decrease from 66.2% for the six months endedDecember 31, 2021 . Selling, general, and administrative expenses. Selling, general, and administrative expenses for the six months endedDecember 31, 2022 were$260.4 million , representing an increase of$36.4 million , or 16.3% from$224.0 million for the same period in the prior year. The increase was primarily due to an increase of$24.6 million in professional services and marketing expenses and$14.4 million increase in personnel and related benefit costs, including stock-based compensation, partially offset by a decrease of$2.0 million in operating lease expense. Selling, general, and administrative expenses were 29.5% of revenues during the six months endedDecember 31, 2022 , an increase from 27.7% for the six months endedDecember 31, 2021 . Income tax expense. Income tax expense was$11.4 million for the six months endedDecember 31, 2022 , or 28.8% of income before income taxes, as compared to an expense of$13.0 million , or 26.5% of income before income taxes for the same period in the prior year. The increase in the effective tax rate for the six months endedDecember 31, 2022 was primarily due to the reserve related to the capital losses that resulted from the Tallo transaction.
Liquidity and Capital Resources
As ofDecember 31, 2022 , we had net working capital, or current assets minus current liabilities, of$679.6 million . Our working capital includes cash and cash equivalents of$318.3 million and accounts receivable of$442.2 million . Our working capital provides a significant source of liquidity for our normal operating needs. Our accounts receivable balance fluctuates throughout the fiscal year based on the timing of customer billings and collections and tends to be highest in our first fiscal quarter as we begin billing for students. In addition, our cash and accounts receivable were significantly in excess of our accounts payable and short-term accrued liabilities atDecember 31, 2022 . During the first quarter of fiscal year 2021, we 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 us andU.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 onMarch 1st andSeptember 1st of each year, beginning onMarch 1, 2021 . The Notes will mature onSeptember 1, 2027 . In connection with the Notes, we 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. BeforeJune 1, 2027 , noteholders will have the right to convert their Notes only upon the occurrence of certain events. AfterJune 1, 2027 , noteholders may convert their Notes at any time at their election until two days prior to the maturity date. We will settle conversions by paying cash up to the outstanding principal amount, and at our election, will settle the conversion spread by paying or delivering cash or shares of our common stock, or a combination of cash and shares of our common stock. The initial conversion rate is 18.9109 shares of common stock per$1,000 principal amount of Notes, which 41
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represents an initial conversion price of approximately
OnJanuary 27, 2020 , we entered into a$100.0 million senior secured revolving credit facility ("Credit Facility") to be used for general corporate operating purposes withPNC 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 our borrowings under the Credit Facility were at LIBOR plus an additional rate ranging from 0.875% - 1.50% based on our leverage ratio as defined in the agreement. The Credit Facility is secured by our 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 ofDecember 31, 2022 , we were in compliance with the financial covenants. As part of the proceeds received from the Notes, we repaid our$100.0 million outstanding balance and as ofDecember 31, 2022 , we had no amounts outstanding on the Credit Facility. The Credit Facility also includes a$200.0 million accordion feature. We are a lessee under finance leases for student computers and peripherals under agreements withBanc of America Leasing & Capital, LLC ("BALC") andCSI Leasing, Inc. ("CSI Leasing "). As ofDecember 31, 2022 andJune 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%. We entered into an agreement with BALC inApril 2020 for$25.0 million (increased to$41.0 million inJuly 2020 ) to provide financing for our leases throughMarch 2021 at varying rates. We entered into additional agreements during fiscal year 2021 to provide financing of$54.0 million for our student computers and peripherals leases throughOctober 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. We pledged the assets financed to secure the outstanding leases. We entered into an agreement withCSI Leasing inAugust 2022 to provide financing for our leases. Individual leases under the agreement withCSI Leasing include 36-month payments terms, at varying rates. We did not enter into any individual leases under the agreement throughDecember 31, 2022 . Our cash requirements consist primarily of day-to-day operating expenses, capital expenditures and contractual obligations with respect to interest on our Notes, office facility leases, capital equipment leases and other operating leases. We expect to make future payments on existing leases from cash generated from operations. We believe that the combination of funds to be generated from operations, borrowing on our Credit Facility and net working capital on hand will be adequate to finance our ongoing operations for the foreseeable future. In addition, we continue to explore acquisitions, strategic investments and joint ventures related to our business that we may acquire using cash, stock, debt, contribution of assets or a combination thereof.
Operating Activities
Net cash provided by operating activities for the six months endedDecember 31, 2022 was$21.2 million compared to net cash used in operating activities of$11.7 million for the six months endedDecember 31, 2021 . The increase of$32.9 million was primarily due to improved collections of accounts receivable during the six months endedDecember 31, 2022 , as compared to the prior year. Investing Activities
Net cash used in investing activities for the six months endedDecember 31, 2022 was$55.0 million compared to$59.7 million for the six months endedDecember 31, 2021 , a decrease of$4.7 million . The decrease was primarily due to lower net purchases of marketable securities of$12.3 million , partially offset by$5.2 million in proceeds related to the sale of a minority investment during the six months endedDecember 31, 2021 and an increase in capital expenditures year over year of$4.2 million . 42 Table of Contents Financing Activities
Net cash used in financing activities for the six months endedDecember 31, 2022 was$37.3 million compared to$57.8 million during the six months endedDecember 31, 2021 , a decrease of$20.5 million . The decrease was primarily due to a decrease in the repurchase of restricted stock for income tax withholding of$25.1 million and a$7.9 million payment of deferred purchase consideration in fiscal year 2022, partially offset by a payment of contingent consideration of$7.0 million and an increase in the repayment of finance lease obligations incurred for the acquisition of student computers of$5.2 million .
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