LRN · 10-Q · 2026Q1 · Full report

Outstanding Indebtedness

Stride, Inc. · 2026-04-29 · Importance 56 · Surprise 24

During the first quarter of fiscal 2021 Stride issued $420.0 million aggregate principal amount of 1.125% Convertible Senior Notes due September 1, 2027. The Notes bear interest at 1.125% per annum payable semi‑annually and have an initial conversion rate of 18.9109 shares per $1,000 principal (initial conversion price of approximately $52.88 per share). The company entered capped call transactions costing $60.4 million recorded in additional paid-in capital that are intended to reduce dilution or offset certain cash payments on conversion; noteholders’ conversion rights change on and after June 1, 2027, and the company may redeem the Notes at its option after September 6, 2024. The Notes permit settlement in cash up to the principal amount and in cash and/or shares (or combination) for any conversion spread, creating potential cash requirements and dilution risk through the remainder of the 2027 term.

Key facts

• The Company entered into capped call transactions in connection with the Notes with an upper strike price of $86.174 per share and the cost of these transactions was $60.4 million recorded within additional paid-in capital.
• During the first quarter of fiscal year 2021 Stride issued $420.0 million aggregate principal amount of 1.125% Convertible Senior Notes due 2027 with net proceeds of approximately $408.6 million.
• The initial conversion rate for the Notes is 18.9109 shares of common stock per $1,000 principal amount of Notes, representing an initial conversion price of approximately $52.88 per share.
• Noteholders may convert their Notes at any time after June 1, 2027 until two days prior to the maturity date and the Company may settle conversions by paying cash up to the outstanding principal amount and at its election settle the conversion spread with cash, shares, or a combination.
• The Notes are redeemable at the Company's option at any time after September 6, 2024 at a cash redemption price equal to the principal amount plus accrued and unpaid interest, subject to certain stock price hurdles in the indenture.
• The Convertible Senior Notes bear interest at 1.125% per annum payable semi-annually on March 1 and September 1 and will mature on September 1, 2027.

Impact estimates