Greetings, and welcome to K12 Fourth Quarter Fiscal 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Mike Kraft, Head of Investor Relations. Thank you, you may begin.

Thank you and good afternoon. Welcome to K12’s fourth quarter and year-end earnings conference call for fiscal year 2020. Before we begin, I would like to remind you that in addition to historical information, certain comments made during this conference call may be considered forward-looking statements. These statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. They should be considered in conjunction with cautionary statements contained in our earnings release and the company’s periodic filings with the SEC. Forward-looking statements involve risks and uncertainties that may cause actual performance or results to differ materially from those expressed or implied by such statements. In addition, this conference call contains time-sensitive information that reflects management’s best analysis only as of the day of this live call. K12 does not undertake any obligation to publicly update or revise any forward-looking statements. For further information concerning risks and uncertainties that could materially affect financial and operational performance and results, please refer to our reports filed with the SEC. These reports, include without limitation cautionary statements made in K12’s 2020 Annual Report on Form 10-K. These filings can be found on the Investor Relations’ section of our website at www.k12.com. In addition to disclosing financial results in accordance with Generally Accepted Accounting Principles in the US or GAAP, we will discuss certain information that is considered non-GAAP financial information. A reconciliation of this non-GAAP financial information in the most closely comparable GAAP information was included in our earnings release and is also posted on our website. This call is open to the public and is being webcast. The call will be available for replay for 30 days. With me on today’s call is Nate Davis, Chief Executive Officer and Chairman of the Board; and Tim Medina, Chief Financial Officer. Following our prepared remarks, we’ll answer any questions you may have. I would like now to turn over the call over to Nate. Nate?

Thank you, Mike. Good afternoon, everyone, and thanks for joining us on the call today. It's year-end so my comments will be a little longer than normal, but I wanted to give you a complete picture of the year-end review and the direction we're headed. First on behalf of my entire team here at K12, I'd like to begin by extending my thoughts and prayers to those of you who are suffering and have experienced loss because of the coronavirus pandemic. Throughout my talk today I'll cover where our business is going to be impacted by the pandemic and also help to draw more customers to our technology and services. So let's get started. I'm pleased to report that K12 ended fiscal year 2020 with a strong financial performance for both the quarter and the year; we met or beat our guidance across the board for revenue, adjusted operating income, and capital expenditures. As most of you know, we are now seeing increased interest in online school options across the nation, and we expect to see even stronger trends as we enter FY 2021. Our fiscal year 2020 revenue was $1.0408 million. Keep in mind that those revenues were largely driven by enrollment trends before the pandemic hit. That's because, due to state laws and policies by authorizers and local school boards, many K12 schools were restricted from taking new enrollment late in the school year just as the pandemic hit the country. Therefore, the fiscal 2020 impact on our revenues was very small. However, we do anticipate a more significant revenue growth in FY 2021, which I will discuss in a few moments. Turning to profitability, adjusted operating income for the year was $56.1 million; excluding the impact of the Galvanize acquisition, adjusted operating income would have been $74.1 million, an increase of more than 19% year over year. It's worth noting that the $74.1 million would be our original guidance for the full year of $58 million to $72 million. This shows the strength and predictability of our core business. Our adjusted operating income growth is driven both by revenue growth as well as by an ongoing focus on cost reduction and operating efficiency. Also, I want to note the capital expenditures for the year came in at the lower end of our guidance range. As we do every year, our investments focus on improving the user experience, enhancing teacher tools, and strengthening student engagement. Some key investments include a new mobile learning management system for kindergarten through fifth-grade learners, an adaptive algorithm that gauges and adjusts the students' reading level and matches them to appropriate content, and new courses for career pathways. Importantly, we also migrated most customer-facing applications to Amazon Web Services, or AWS. This change, in particular, supports our efforts to scale our business in a more cost-effective way as we ramp up enrollment and expand our business in the coming years. And finally, we ended the year with strong liquidity; our cash, cash equivalents, and restricted cash stood at $213.3 million at year-end. Now, this cash includes both the drawdown of $100 million from our revolving credit facility and the use of $165 million for the purchase of Galvanize. So we ended fiscal year 2021 with growth in revenue and adjusted operating income, increasing capacity across our business to support higher enrollment growth, a clearer learning business reaching even more of the addressable market, and funding for long-term growth initiatives. As I noted a minute ago, our results underscore the strength of the core of our business and the continued demand for blended and online learning options. More than 100,000 students in K12-powered schools completed this school year on schedule, with little interruption. We saw over 8,000 new students graduate from high school this year, bringing the total number of students who graduated from a K12-powered high school to more than 50,000. Importantly, we ended the year with student retention rates at our highest level ever. Over the past three years, we've improved student retention by 550 basis points; and to put that in perspective, improved retention equates to more than $100 million in revenue that would have been lost over this three-year period. We also have the effect of lowering marketing costs for enrollment. Our entire team is really part of these numbers. But I can tell you our team also knows we have to continue to improve and deliver great service. That's especially important given the larger-than-ever number of new students coming into our programs in the coming years. The pandemic has driven more parents and families to consider online learning options, more school districts to utilize online learning, and more policymakers to understand the value of an online learning option in their state. Starting with consumers, a recent poll conducted by Morning Consult showed that 71% of parents felt that online education should be an ongoing option for students even after the pandemic. As for school districts, more and more of them now plan to use online learning as an alternative to in-class, in-person classes. One such school district is Miami-Dade County Public School District, with whom we've had a relationship for more than a decade. With Superintendent Carvalho and his staff’s guidance, K12 will provide customized services including curriculum, assessment tools, teacher training, and data management. This will ensure a strong start to the new year for both educators and Miami-Dade's more than 270,000 students that we’ll serve. Teachers already employed by Miami-Dade will combine their great teaching with our technology and expertise in a high-quality inspection and a safe environment. This allows Miami-Dade to retain both teacher jobs and the all-important existing student-teacher relationship. In alignment with their existing learning goals, Miami-Dade Public School teachers and administrators can also customize the online curriculum we'll provide, including core subjects and hundreds of lessons. This shows the flexibility of the K12 technical platform. We’re thrilled to support Superintendent Carvalho and the innovative solutions he and his team have designed. This is just one example of how a large school district can rise to meet unprecedented challenges caused by the COVID-19 pandemic. We’ll work with other school districts on their own customized solutions for the fall as well. And we stand ready for schools and school districts of any size during this critical time. This quarter, we also continued to make our products available for free on a trial basis. To date, more than 200,000 families, teachers, students, and schools have signed up for these programs and webinars. This is more than twice the number of those who took advantage of it last quarter. We believe this outreach, along with the public discussion around online school, as well as our own marketing efforts, has increased the number of families who are looking at enrolling their students in our schools this fall. In the fourth quarter of our fiscal year, we saw lead volumes and enrollment applications rising by more than 50% compared to the same period last year. I will caution that it is still too early to know how many of the applications will result in final school enrollments for the 2021 school year. With many parents still finalizing their students’ plans, we can't be sure how much of this interest will translate into final enrollment. That being said, we believe that many of the families who have begun the enrollment process will complete it for the fall, and I will provide you with even more quantitative understanding of our current enrollment shortly. With the potential for significant increases in enrollment, we’re taking steps to prepare for the upcoming school year. This includes proactively hiring 1,300 incremental teachers and education staff, building additional service plans, buying thousands of new student computers, and stocking offline materials so that they're ready to go for student enrollment. Most importantly, we're focused on ensuring families have an outstanding academic experience when they enroll in the K12-powered program. Our early start programs, welcoming programs, and other ways of reaching the teachers in their given space will support this goal. Now I would like to turn to our career learning process. This year, we hit a significant milestone. We ended the year with revenues of $107 million in career learning. This is an increase of 115% year over year. In just a little more than three years, we've built a comprehensive and innovative approach to career learning that serves more than 13,000 students this past year and posted over $100 million in revenue. We believe that career learning increases our addressable market by more than tenfold and will be a driver for revenue growth and profitability in the years to come. Our nation has approximately 15 million high school students, and surveys show that over 12% of these students would consider full-time online public schools. Their parents also concur that they would consider full-time online public schools. And as schools combine traditional core academics such as math and English with online learning through various methods, another statistic reinforces our belief in the long-term growth potential for this business. For example, research conducted by Burning Glass Technologies over the last 90 days shows that 56% of job openings require less than a full year's college degree; our career learning program for both secondary students and adults aligns closely with this market demand in today's tech-first job market. So, a quick commentary on some of the accomplishments over the last 12 months: First, we opened Destinations Career Academies, or DCAs, in New Mexico, Kansas, Missouri, and Wyoming, bringing the total number of DCAs to 24 at the start of the school year. Additionally, we expanded programs to the middle school grades in seven schools, allowing students to jumpstart their career exploration and learning. In total, more than 9 million students across the nation now have access to our career learning options. Over the next two to three years, we plan to expand our coverage across all the states that we serve public schools. Secondly, we enrolled 16 new project-based learning course subjects, including entrepreneurship, marketing, healthcare, and computer literacy, to name a few. This learning approach engages students and makes classes more collaborative. We're also seeing a link between increased DCA student engagement and retention. At the end of the year, student retention in DCA programs was nearly 10% better than in their non-DCA counterparts. While many factors contributed to this change, this kind of difference is significant. For some time, we speculated that the DCA experience helped to further engage and retain students at a higher rate; we are now seeing results that support this hypothesis. The third important part of the career learning program involves opportunities for students to explore careers and gain exposure to industry experts. This includes chats delivered on the virtual platform, which complements real-world work experiences in the form of job shadowing and internships. With K12’s annual job shadow week, which is only in its second year, we had over 2,500 student participants this year, up from just 200 last year. Companies like Google, Salesforce, and the Motion Picture Association of America connected with students from across the country, providing insight into the professional skills and expertise they'll need for success. Fourth, our career networking platform, Tallo, reached a significant milestone as it surpassed 1 million talent users on its platform, almost double the number from a year ago. This quarter, Tallo saw colleges and universities turning to it as an alternative to in-person recruiting initiatives that were canceled due to COVID. Tallo is now serving new partners ranging from Tech University and the Medical University of South Carolina to smaller specialized schools. However, the Tallo proposition is about more than just adding students and partners; it's about leveraging the platform effectively. During the past year, Tallo made more than 180 direct engagements to connect institutions seeking students for scholarships and jobs with Tallo members looking for those opportunities. This is just the beginning. In the future, we see even more growth opportunities and new applications for the platform as part of the career learning experience. Finally, a valuable new part of our career learning business is Galvanize. The market demand for software engineers and data scientists continues even during the pandemic. The same Burning Glass Technologies research I mentioned earlier shows that more than 27% of recent job openings across various industries are IT-related. The immersive boot camp of Galvanize is currently 100% live and online. While some students have elected to defer their admissions into the in-person platform, we are proud to announce that our part-time data science program has resumed. This online program provides the same curriculum and structure as Galvanize’s full-time program but over a 30-week timeframe instead of an intensive 12-week full-time course. Our hope is that working parents, veterans, and anyone who wants to keep their current job while learning can take advantage of this innovative program. On the enterprise side of Galvanize’s business, corporate demand has slowed down as corporations have workers working from home and are not willing to spend as much money. The enterprise market will remain challenging until concerns about COVID-19 subside. However, despite the market slowdown, we have had recent wins with large clients like USAA, T-Mobile, and Ally Financial hiring Galvanize to upskill portions of their IT talent base. Additionally, Galvanize has not limited its enterprise efforts to the US; this quarter, the Galvanize team addressed interest from companies in Germany, Mexico, Saudi Arabia, Pakistan, and India. As the economy begins to recover, we believe we will continue to see increased interest from enterprises worldwide. As you might imagine, community business is another part of Galvanize’s offerings that has been slowed by COVID. Community business, as we've stated publicly, will not meet expectations in the short term. Due to COVID-19 mandated restrictions and general worker concerns, many workers simply have not returned to physical offices at the rate we had expected. However, we believe that Galvanize’s boot camps for consumers will continue to deliver strong growth. We remain confident in Galvanize’s long-term business prospects. Before I leave my discussion on Galvanize, I want to briefly mention another milestone: for the spring semester, we plan to roll out our first high school course based on Galvanize’s content. In just six months after the acquisition, we have completed the first result. This is a key differentiator for our career learning business, allowing us to use Galvanize's content at the high school level. We are planning to create additional courses at the high school level using Galvanize’s personnel and materials. As I've outlined today, we are building on a strong year, and we're looking at even greater growth next year and over the long term. The early indicators for FY 2021 are all positive. Global growth is increasing, and we’re seeing increased interest in our solutions. But I want to be clear that our managed public schools already have 150,000 students enrolled as of last week, a 23% increase from the 122,000 enrollments posted in the first quarter of fiscal 2020. Traditionally, the final week of the enrollment season drives more normalized numbers. With about eight weeks remaining in this year's enrollment season, we expect positive trends. While it is still unclear what the pandemic's impact will be, we believe we are well-positioned for continued growth. We anticipate continued double-digit growth in both revenue and adjusted operating income. Just a reminder, this is only a statement of enrollment growth as of last week and not formal guidance for the coming year. As we do every year, we will provide formal guidance for the fiscal year in late October when we announce our first-quarter earnings. Okay, I’m getting close to closing; I understand this is a lengthy call because it's the end of the year and there’s a lot to discuss. To wrap it up, we've always maintained that technology is a key to the way education will be delivered in the future across all education levels—corporate, college, and grade school. Our company is clearly no longer just a kindergarten-to-12 general education platform provider. We're positioned to be a leader and innovator in this space across different age groups and applications. We are in the right market at the right time with the right experience and technology to take advantage of a sizable addressable market. There is increased awareness and acceptance of online and blended options. School districts are embracing online learning, understanding their students' needs, and are now out purchasing these services not only for short-term needs but on an ongoing basis. Corporations are also partnering with us to hire graduates while using our services to upskill and reskill their software engineering and data science departments. This bodes well for us in fiscal 2021 and the long-term future as well. We have successfully transitioned this company from an education platform to an education platform that drives lifelong value. Let me end my comments by briefly mentioning the role we play as educators in this turbulent time surrounding systemic racism and the blatant disregard for the welfare of some minorities, particularly Black people in parts of our country. We have a role to play, and I hope you'll look at our announcements around social and environmental responsibility. Our board, our management team, and all of our employees represent the diversity that I think all companies should strive for. We announced more scholarships, a national commitment to educational equality, and a commitment to increasing diversity among our teacher workforce. We’ve dedicated employee teams to these initiatives, giving them time off to pursue these community activities. Please take a look at our website for more information about our commitment in this area. We strongly believe it's important for everyone in the organization to be committed to racial equity. Thank you again for your time today. Now, I will hand the call over to Tim, who will elaborate on the fourth quarter and full-year financial results. Tim?

Thank you, Nate, and good afternoon, everyone. As you can see from our results, we had strong financial performance in fiscal 2020. We exited the year with great momentum leading into fiscal 2021, and we are well positioned for higher growth. In addition to reviewing our fourth-quarter and full fiscal year results, I also want to provide some commentary on fiscal 2021 trends and discuss changes we’ll be making to our fiscal 2021 reporting. First to recap our reported results, revenue for the quarter was $268.9 million, an increase of 4.9% from the prior year. For the full year, revenue was $1,040.8 million, an increase of 2.5% from fiscal year 2019. For the quarter, income from operations was $7 million, an increase of $4.3 million from the prior year. For the full year, income from operations was $32.5 million, down $13 million compared to fiscal year 2019. Adjusted operating income was $12.9 million for the quarter, an increase of $5.7 million from the prior year. For the full year, adjusted operating income was $56.1 million, a decrease of $6.1 million from fiscal 2019. Capital expenditures for the year were $45 million, a decrease of $3.4 million from the prior year. As Nate mentioned, in each case, our results met or beat expectations we provided in our guidance. In fact, we met or beat guidance every quarter this year, as well as for the full year, regardless of whether you include or exclude the impact of the Galvanize acquisition. Now some additional details for the fourth quarter and the full year. The $25 million increase in revenue for the year was driven by the strength of our core managed public school business and our acquisition of Galvanize. This was somewhat offset by declines in our non-managed public school business. Managed public school program revenue for the year increased $29.8 million or 3.3% to $920.1 million. This growth was driven by increased enrollment and improved student retention. Revenue per enrollment for these programs grew to $7,758 for the year. This is in line with our historical average of 0% to 2% growth in revenue per enrollment. Given the ongoing COVID-19 pandemic and its impact on state budgets, we could see some negative impacts on revenue per enrollment in fiscal 2021. We are monitoring ongoing state budget discussions and will have a more complete picture for our first quarter earnings. With the increased enrollment we are seeing, we believe that volume gains will far outpace any potential downward pressure on revenue per enrollment. For the fourth quarter, revenue from managed public school programs increased $10.3 million to $234.6 million. In addition to enrollment trends and stronger-than-expected student retention, this increase was partly driven by revenue recognized from services provided in prior periods of fiscal 2020, following the resolution of claims with Georgia Cyber Academy. Moving to our institutional business, which includes both non-managed public school programs and institutional software and services, revenue for the year declined 16.7% from the prior year; this was in line with expectations we outlined at the beginning of the year. Non-managed public school program revenue declined 28.5% for the year, largely due to contract terminations we have previously discussed. Institutional software and services revenue was down 1.4% for the year, as Nate mentioned because of the COVID-19 pandemic, we've seen an increase in schools and districts reaching out to K12 to provide online options for students and families. While some contracts have been signed, some conversations are still ongoing, and it is still too early to know the impact on this business. However, we believe that this business will grow in fiscal 2021 after several years of declining revenue. Private pay revenue was $16.4 million for the quarter and $45.7 million for the year; the Galvanize acquisition added $11 million in revenue to this business since the acquisition. The Galvanize revenue is somewhat reduced by the impact of purchase price accounting; excluding those impacts, Galvanize revenue for fiscal 2020 since our acquisition would have been $13.6 million. Gross margins for the year were 33.4%, 130 basis points lower than the prior year. Margins were impacted by Galvanize as well as lower institutional sales. It is worth noting that excluding the impact of the Galvanize acquisition, gross margins would have been 34.5%. Over the long term, we look for gross margins to improve as our business mix shifts toward higher margin revenues and funding levels for public school programs continue to rise. For the year, selling, general, and administrative expenses were $315.1 million. Excluding the Galvanize acquisition, these expenses were $304.2 million, a decrease of 0.8% from the prior year. We continue to focus on driving a more efficient organization through increased automation and process improvements while maintaining our investments in growth areas like career readiness. For the year, adjusted EBITDA was $128.2 million. Excluding the impact of the Galvanize acquisition, adjusted EBITDA was $142 million, an increase of 6.3% from the prior year. This improvement was driven by our growth and focus on cost efficiencies. Adjusted operating income was $56.1 million; excluding the Galvanize acquisition, adjusted operating income for the year was $74.1 million, an increase of $11.9 million or 19.1% from the prior year. Our improvements in profitability underscore the strength of our managed public school business and the effective management of our cost structure. Stock-based compensation for fiscal year 2020 totaled $23.6 million. A few years ago, we implemented a long-term incentive based on growth in our career learning solutions business. In fiscal 2021, more information about the likelihood of achieving some of the targets in that plan may be available. Therefore, we could begin to record the expense and see an increase in stock-based compensation in fiscal year 2021. Some other items to note: we ended the year with cash and cash equivalents of $213.3 million, a decrease of $71.3 million from the prior year. This decrease was driven by our acquisition of Galvanize, partly offset by the draw against our credit facility. During last quarter's earnings call, I mentioned that we saw strong enrollment growth in states that typically fund public schools after the school year. This resulted in lower free cash flow for fiscal year 2020. However, based on the shift in these payments and the early indications in July and August, we expect to see substantially stronger cash flow in fiscal year 2021. Turning to capital expenditures, CapEx—which includes curriculum and software development and infrastructure—was $45 million, a decrease of $3.4 million compared to last year. Over the past couple of years, we've maintained CapEx in the range of $45 million to $50 million a year. Going forward, we believe this level of capital outlay is sufficient to support our core business as well as the growth in career learning, inclusive of the Galvanize acquisition. Our effective tax rate for the year was 25.8%. We had some positive tax benefits related to prior year returns in fiscal 2020 that will not recur in fiscal 2021. Additionally, we expect to see an increase in nondeductible compensation; therefore, we expect that for next year, our tax rate will be closer to 30%. Now, I want to outline some changes we'll be making in our reporting for fiscal year 2021. First, we're going to update the way we report lines of revenue. Over the past few years, our business has evolved, as you heard Nate explain. Where we used to be a company focused on one market, general education, we have since added a second focus, career learning. In just a few short years, career learning has already crossed $100 million in revenues and is the fastest-growing portion of our business. To reflect this evolution, our reporting will shift from a product focus—such as managed schools, institutional, etc.—to a market focus: general education and career learning. We believe this new reporting will provide investors with better insight into our operations and clarity into the key drivers of growth. Second, we have been evaluating ways to better highlight our underlying business performance, especially our profitability metrics. We also want to make changes that will better align our results with how other similar companies are reporting. This issue has become more apparent following the acquisition of Galvanize and will be magnified if we pursue additional acquisitions. To that end, we will be updating our definition of adjusted operating income, which presently excludes stock-based compensation, to also exclude amortization of intangible assets. We believe this will allow investors to better understand our operating and financial performance without the impact of these non-cash charges. Look for more details on both the new lines of reporting and the changes to our adjusted operating income calculations in our first-quarter results report. We will provide the necessary information to allow investors to bridge from the old to the new reporting. Overall, we are very pleased with our performance this year; we saw our fourth straight year of revenue growth. We were able to continue to make investments to improve the academic outcomes for the students we serve while also growing our core and career learning businesses. We also acquired Galvanize to expand our career learning offerings into the adult and corporate training markets and to enrich our high school IT career pathways with Galvanize content. Our core business and our growing career learning business put us in a strong position going into fiscal 2021. We are making investments now to ensure that we can serve all the families who choose to attend a K12-powered school. We believe these early indicators show we are on track for strong revenue and profitability growth in fiscal 2021. Additionally, we continue to have a strong cash position which allows us to fund both organic growth in our businesses as well as pursue inorganic growth opportunities that may arise. Thank you for your support, and I'll hand the call back over to Nate.

Okay, thank you, Tim. Laura, if you’re still there, I think we can move to Q&A, as we've reached the end of our prepared comments.

At this time, we will be conducting a question-and-answer session. Our first question comes from the line of Jeff Silber from BMO Capital Markets. You may proceed with your question.

Thank you so much and congratulations on the strong finish and the momentum going into the current year. You provided some color on the demand trends and enrollment so far. You mentioned I think there are eight weeks left in the enrollment season. In a normal year, what percentage of your enrollments do you typically have by now, and do you think it will be higher or lower than that this year?

Jeff, how are you doing?

All right.

We anticipated that everyone’s question would be about the final enrollment numbers. I'm going to try to be disciplined and not give you that because we don't know what it's going to be, and this year doesn't look like previous years. We haven't disclosed what the weekly, monthly gross trends would be. So, I don't want to be evasive. The bottom line is we gave this back because we wanted to give people an understanding of where we are today, but I don't know how fast it's going to happen and I don't know how this year is going to relate to previous years. So, we're going to decline to give more details and just say we're at 150,000 now and we know it's continuing to grow. As you might imagine, we're seeing more demand this year than we have ever seen before. But I don't know how much that demand will continue. I just wanted to provide a little more coverage for investors than we’ve given in the past, but it’s just too hard to predict what will happen this year. So, I really can't try to contrast this year’s performance to previous years and go through that math.

All right. You can't blame me for asking. Let me inquire about the enrollment trends. I’m not looking for a specific number, but regarding the type of demand you're experiencing, is it coming more from parents or from your partnerships with school districts? Are you noticing any impact from the new schools you are opening? Any insights on that would be appreciated.

Sure. The primary growth is coming from parents who want to have an option for their kids; it's enrollment in our managed schools—that's the primary goal. We are seeing an increase, however, in school districts who call us and want to use our content; we have more contracts this year than we've ever had before. I mentioned Miami-Dade; there are others we're working with, not as large, but significant nonetheless, with enrollments ranging from 10,000 to 100,000 students. So we're seeing more demand there as well. By far, the biggest demand is coming from individual parents saying they need to get their child into a safe environment. The new schools that we’re turning up are doing well; they’re filling up comparatively faster than we thought they would, but they're located in smaller states, as you might imagine, like Florida, Texas, and Ohio. That's where we are seeing the greatest demand.

All right, great. Let me sneak in one more, then I'll jump back in the queue. So what do you say to those folks who think this might just be a one-year spike? Hopefully, if we get a vaccine and a year from now schools are open as regular, will all those students return to their old schools? How will you grow post-pandemic?

That’s an excellent question, Jeff. We actually focus as a team on what we can do in FY 2022. I would say a couple of things: there are five major factors to how we continue to grow. The first is retention; you know we’ve got to provide a great experience for all the students. They’re going to come in and say they thought they were going into a one-time program; we want to show them better than they thought it would be, and that it’s a learning environment with great flexibility. Yes, we will inevitably lose some students whenever schools open back up, but I don't think we will lose them all because we have a quality program. The second is socialization; we’re focused on a number of programs so that when we have the opportunity, just like regular schools, we will have socialization programs online and in person once COVID subsides. Third is Galvanize: we will continue to see accelerated growth in the consumer business. By the way, once COVID subsides, you might say our core business might lose some students, but Galvanize will see even higher growth because we’ll have both online and brick-and-mortar programs. Fourth, we have learning solutions, which is gaining market recognition. The people we're talking to are not engaging for one year—they are realizing this is an ongoing opportunity to include distance learning and capabilities for backup during hurricanes and snowstorms; all those situations require having your backup plans in place. But the biggest growth driver is career learning. We’ve plowed a lot of energy into that segment, and we are opening up more schools. We believe we will continue to grow in career learning at a higher rate moving forward. So when you add improved retention, socialization, growth in learning solutions, Galvanize growth, and career learning growth, we believe that this is not just a one-time spike; we’re going to continue to grow. Does that help you?

Right. Appreciate it; yeah, it really did. Thank you for the color. Thanks so much.

Thank you, Jeff.

Our next question comes from the line of Stephen Sheldon with William Blair. You may proceed with your question.

Hey, thanks. It’s good to hear about the enrollment momentum. Just curious if there is anything notable about the grade levels where you're seeing higher enrollment? Are the enrollments skewing kind of older or younger? And can you also talk about enrollment trends through August between career readiness and your traditional programs?

The percentage growth between the two is about equal. We're not seeing one grow faster than the other at this time. But in terms of the grade levels, we’ve seen a little more growth in high school students and the related programs. Generally, we’ve observed it across the board without seeing a dramatic difference between high school, middle school, and elementary levels—it's been fairly consistent.

Got it. And then on teacher hiring, I guess how much progress has been made on that front? How long does it typically take for them to get up to speed, and how are you thinking about the teacher-to-student ratios in this environment?

Teacher hiring is going well. It’s amazing how when you need to hire more teachers, you go after them more aggressively. We also have a part-time workforce with the Learning Solutions group, and we’ve engaged those teachers to help support us this year, aggressively seeking more from those groups. When teachers join, they go through a standard training we've honed over many years, requiring only about two weeks to get up to speed. The teaching techniques themselves are already familiar to them since they are experienced teachers, but they do need to learn our systems and curricula.

Got it. And just the last one for me, I think Tim you mentioned in this quarter revenue from services for the Georgia Cyber Academy. Can you quantify that?

Yeah. It was $4 million.

Okay. Perfect. Thanks, and congrats on the results and the momentum.

Our next question comes from the line of Greg Pendy with Sidoti. You may proceed with your question.

Hi guys, thanks for taking my question. Just, if I understand this correctly in the commitment to break out career learning, would that be in, if we were to run through this quarter, the 160,000—if you break that out into 103,700, I got a traditional general education and then you have, say, 13,000 or so in career learning—is that the commitment you guys will be reporting next year?

What you're asking, Greg, is whether from our 122,000—3,000 that we reported in the first quarter of this year, 5,000 were career learning students and the remainder were general education.

And then I guess just the next question: going back to that article about your commitment to hiring 1,300 teachers. I mean what is the general philosophy ahead of the uncertainty in terms of enrollment? Are you guys willing to staff ahead of potential growth, or will you be more conservative in your spending?

The big picture is this: quality is more important to us. We have to deliver on that quality, so we're hiring teachers ahead of the demand, which does involve some financial risk. We may end up with more teachers than we need, but so far we haven't been wrong; demand is strong. We’re doing our best to hire ahead of it.

Yeah. It makes a lot of sense. I'm assuming teacher hiring is the primary expense you're looking into this fall, correct?

That's correct. And remember the numbers are not just teachers—they also include academic administrators and counselors; most of it is teachers, but there are additional roles as well.

Our next question comes from the line of Alex Paris with Barrington Research. You may proceed with your question.

Hi guys. Thanks for taking my questions. Congratulations on a strong finish to the year. It looks like you have a great year coming up. So just to pick up on a bit: what are you seeing in terms of feedback from the states in which you operate regarding school funding in the coming year, revenue per student, and the potential pressures there?

Yes, we're seeing some signals from states. Some states are struggling more than others. On average, we believe rates will not go up; we’re going to have a tough year as people struggle economically. However, they do not want their children to lose a year of growth, which has led to most states committing to funding education. We're not seeing any significant drop-off in rates; they’re maintaining their commitment despite the challenges.

No, that's great and helpful; I appreciate it. And then my last question is about the 150,000 figure: what are the variables affecting those enrollment figures, and what is your historical exposure?

I can't give specific numbers, but I can tell you that each time we look into these numbers, they differ from previous trends. We know that there is some percentage—albeit small—who will enroll but not show up for the program. We call this 'melt.' Also, keep in mind that we often have increased enrollments leading up to the end of the enrollment season. We're monitoring these trends closely, and I believe as of last week, we’re comfortable predicting strong double-digit growth based on our analysis.

Yeah, that sounds reasonable. I appreciate the extra color. Thanks, guys, and good luck.

Thank you.

Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn the call back over to Mr. Davis for closing remarks.

I want to thank everybody for listening to the call and staying with me as I had longer-than-normal comments today, but we had a lot to report on. We obviously gave a different stat than normal, but we thought it was important during this unprecedented time to give you all a sense of where we are. I appreciate everyone being on the call, and I hope everyone is safe and sound. Have a great rest of the week. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for participation. Have a great day.