Hello everyone, I'm Mike Lawson, Vice President of Investor Relations, and on behalf of the entire management team, it's my pleasure to welcome you today to the Stride 2020 Investor Day. Before we begin, I'd like to encourage all of you to review our Safe Harbor information. It's also available on our website and our public filings with the SEC. A couple of housekeeping items: today's presentation can be found on our brand new website, www.investors.stridelearning.com, and we'd ask that you please submit your questions throughout the day via the Q&A submission on your screen. We have a very full agenda, as you can see today, with a lot of great content. We've built in five, excuse me, three five-minute breaks. During those breaks, we're going to be showing an array of video clips.
We'll also have a countdown clock to make sure that you're not going to miss any of the great content that we're going to be presenting today. We'd also encourage you to take that time to submit your questions as well. So, with that, it's now my pleasure to introduce our first speaker, Stride's CEO and Chairman of the Board, Nate Davis.
Welcome, everyone. Thank you, Mike, for the introduction. I see that we have about 140 attendees. I want to thank everyone for being on the call this morning. It's a pretty exciting time for us. You know, the number of attendees, the people that are interested, this is just fantastic, and we really do appreciate the opportunity to speak with you this morning. You planned to come to learn something about K-12 and about the business that we operate today, and then, lo and behold, last night we got a shock because we announced some changes. We announced two acquisitions, and we announced that we were changing the name of the company to Stride.
We're going to talk more about that today: why we're changing the name, what these two acquisitions are about, but we're also going to explain to you about the core business and why the core business is so important. I hope investors are excited about this. We certainly are. There are really three things I would like to accomplish today, not just in my talk, but three things I want to accomplish across all the speakers' communications. The first is: how does our base business work, and why is it a strong foundation for the future? That is so important. We are launching off of a business that is a strong base business, generating cash and growing modestly. But the future, the bright future we think we have as a company, is all based on the fact that we're focused on a growth strategy around Career Learning.
Career learning that helps kids, when they go to college, figure out what their future really should be, whether they go to trade school or military, give them skills to be able to get jobs and advance in those careers, and then finally, I want to talk to you about our management team. I'm proud of the team we've built. They're diverse in their skills, their gender, their knowledge, yes, their race, and in every other way. I'm so proud of the team that we have, and I'm really excited about who we want to talk to you about. Let's start with why the heck we went to a new name, all right? Why? Why did we do that? We've evolved. We're no longer that company that operates online charter schools. We're so much more.
It was important for us to be able to communicate that to investors and to the rest of the world. We started this business by helping homeschoolers, a well-designed, pedagogically thought-out program that helped homeschoolers figure out how could they teach their kids and give them an advantage over traditional schools. We grew. Once charter schools started to take off, we became a provider of all the services necessary to run a charter school. But that was about 2% of the market that said it would consider an online school, and that was just a market, addressable market opportunity. An $11 billion addressable market opportunity is not bad, but we wanted to do more. So we went on to school district programs.
While you may not be able to tell the difference, today, almost 40% of the students that we have are actually in schools that are under contract with public school districts. That means a school district in Texas or a school district in Florida or a school district in Virginia wants to have an online school that we operate for them. We'll hire the teachers, train the teachers, bring the software, run all their programs, make sure the finances are properly reported, compliance with all state rules. That's what we do to operate these schools. We did that to make sure that we had an opportunity to do more than just online charter schools. Then we started saying, "Look at all the software and the online solutions that we built to run these schools.
If we unbundle that, we can license that content to other school districts who want to set up their own online schools." And we call that Learning Solutions. You may have heard of it in the past as Fuel Education. It is K-12 Online Solutions. That gave us an additional $35 billion addressable market, or it actually took us up to a $35 billion addressable market, with a long opportunity to grow even further than that. So we're really proud of the progress we made there.
But if you think about it, we, the board of directors, got excited about the fact that we had tried for a couple of years, about four or five years ago, a trial in a couple of states just to see how many of our students really would benefit from having Career Learning, software development, healthcare jobs, business manufacturing, new economy architecture. Could we give them those skills, and once we decided to do that, we figured there was a much larger market opportunity. That $65 billion market opportunity is what we launched into three years ago. I've communicated this before, and I'm not sure everybody understood how serious we were, but all the factors came together.
Governors told me that this was important to them to be able to compete with other states and compete internationally, filling the kinds of jobs that they had open in their states. There was less regulatory overhang. People are worried. You may not like charter schools. You may not like online. But everybody knows it's important to have our citizens trained in the jobs of the future. And so that became an opportunity for us to fulfill that need and become a national resource for helping students fill jobs. We also wanted students to make better decisions. It wasn't just about going from high school into college or into an immediate job. We wanted them to go to college making better decisions about their future. What's the right curriculum to take?
What curriculum is going to allow me to get a job and have some exposure and some summer jobs, some internships, so that they had a full understanding of what they were getting into? So today, we've opened up 30 of these Destinations Career Academies. Well, actually, it's 20 of them and going to 30 because we want to have one in every state that we're in. There are up to 30,000 students today already in these schools. But we wanted more. We wanted to be a disruptive technology business. Now, I didn't describe my own background, but I came into this company from a technology business and a number of technology businesses. I worked at AT&T and MCI.
And when we were at MCI, we always knew that if we were going to be competitive with the big guy, AT&T, we needed to be able to do things that they couldn't do to attract people away from the comfort of the status quo and into our business. And then I went to work at a company called Nextel, a small wireless company. And we decided that the key to cell phones for us was putting apps on the phone. When we put apps on the phone, that would allow the phone to be more valuable than just a plain telephone. Everybody knows where apps are today. I joined another company. It was XO Communications. And then I joined another company called XM Satellite Radio. Why would you ever pay for satellite radio, right? Why would you ever pay for radio when you get it for free?
Free radio only had certain content. On the satellite radio, we could do things that couldn't be done. This whole story I'm telling you is the way we think about our business today. We have to do things that are different than the way traditional schools operate. We have to give people choice. We have to give them capabilities that are not available in traditional schools. So our evolution from that company that built a well-thought-out curriculum to help homeschoolers, to charter schools, to district programs, to a la carte programs, to Career Learning, all of that is why we've evolved to a $65 billion addressable market. And then on to, when you add all those markets together, the $65 billion market and the $35 billion market, that becomes a $100 billion market. We did a couple of acquisitions to help us get there.
Tim Medina is going to talk today about the financials associated with this. I wanted you to get a little color from the beginning from me about why we did this. Let's talk about each of these. Tech Elevator is a company that gives us the ability to address a market that is not addressed today by our Galvanize unit. All of those people who have never had any programming experience before can now enter the market with some basic programming skills. Unlike Galvanize, which has a high-end product that gives you full-stack software engineering capabilities and some of the highest skills that you're going to get, the entry-level programs is what Tech Elevator can address for us. We want them to easily afford that. Tech Elevator also has a lower market entry in terms of the cost of getting into the programs. MedCerts.
That's another deal that we announced this morning. Actually, we announced it last night. MedCerts is something that we've talked about as an opportunity to do at the high school level. And we've said before that we were looking at the right kinds of companies that would help give us content at the high school level, but also give us an opportunity to enter the post-high school market. And MedCerts does that.
They certify and give certificates for students who complete programs in phlebotomy or in nurses' aides or in radiology or in a number of courses that are not necessarily going to make you a doctor or a nurse, but will help you in all of the medical fields that can give you a real job, a good-paying job, and launch you into a career that, by the way, often does move into being a nurse or does move into some of the higher skilled jobs. And those two things give us, as you can see from the chart, revenues that help us grow not just this year, but on into the future years. And these companies are growing faster than our core business is growing. So while our core business is generating great cash flow, we also are going to get growth from some of these new opportunities.
Both of these companies are EBITDA positive today. Together, they generate more than $30 million in revenue before purchase accounting, and both are positive EBITDA right now, as I mentioned. We hit our Stride. When you put together all of these things in this picture you've been told you, when you look at no longer K-12 charter school education provider, we go to general education. We go on to high school and middle school programs and career education. We don't want to be a college, but we do want to go into adult education as well. The programs that we've now put in place show that we can be an adult education provider. Our symbol will remain LRN, which stands for Learn. We're all about learning.
We won't change our symbol, but we are changing the name to convey that when we walk in the door to our customers and say, "We're here to help you retrain, reskill, upskill your employees," we can bring you employees with skills, the skills needed to fill the jobs of tomorrow that you have. When we place those kind of employees into those corporations, we can't walk in the door and say, "We're K-12." We have to walk in the door and say, "We're something larger than K-12," which is what we've evolved to. That $100 billion market opportunity that I've talked about is the combination of what we've been trying to accomplish. Our mission remains the same. We did not change our mission. We used to say we help students achieve their full potential through inspired teaching and personalized learning.
All we did was change it to learners of all ages reaching their full potential through inspired teaching and personalized learning because we still believe that personalized learning is the key to the future. At what pace do you need to do it? Where do you need to do it geographically? Where can you be located? You can get this learning from anywhere. And just like MedCerts and Tech Elevator, all of our programs are online and virtual and allow you to get your education from anywhere. Inspired teaching, whether you're MedCerts or whether you are Tech Elevator or you are Galvanize or you are the old K-12, our teachers believe in what they do. They believe in helping you achieve your goals. And inspired teaching is a key part of our program. Today, we're going to talk about all five of these categories.
I've already given you a little color into each of them, but I'm going to give you a little more color. And then each presenter is going to touch on one of these topics, one through five. The Ed Services Platform will be covered by James Rhyu. James is going to demonstrate for you through video exactly how this program works, exactly how our content works. It's important because we do get a question from a lot of people, "Hey, how does this work? What's this all about? Tell me how it works online. I don't know how a student would learn online." We're going to show you that it's different than the online experience that most parents got when COVID hit, when it was a hodgepodge of solutions together, signing on to different platforms.
We're going to show you it's an integrated platform that can be used both in the classroom, in physical classroom, as well as outside the classroom, and Tony Bennett is going to come and talk to you about the core business and how it's growing, how we retain students, how we treat students because Tony's operated many schools across the nation, and I'm going to talk about him a little bit. Shaun McAlmont is then going to show you the details of the Career Learning business, which is our high-growth business, our higher-margin business that is going to continue to sustain us in the future and deliver shareholder value, and then I'm going to talk to you about the team, and I'm going to do that during this talk because I'm so proud of this team.
They're not going to pound their own chest, but I'm going to pound their chest for them. This is a fantastic team, and Tim Medina is going to wrap it up, and he's going to show you how all of it fits together financially and show you a five-year model of what our business can become. Let me start by talking about the fact that this SaaS platform that we've built, and I mentioned SaaS platform because this is not a program that requires somebody to buy software, download it, manage content, manage their own computers. It's all done for them. We drive this out of the cloud. So student logs onto the system. They're getting a cloud-based service where we manage the content and track what they're doing. It's over 980 courses and multimedia components, and there are a million of those.
We have a tremendous experience, some of it video, some of it hands-on, some of it project-based, all led by expert instructors. It's mobile-enhanced and mobile-ready so that they can do it on their cell phone, on their mobile device, which may be a tablet, or on a desktop computer. It's usable in an online and a hybrid environment. What I mean by that is they can be remote learners, and they can move from being remote learners into the classroom and continue to use the same content. And we teach and adapt to every district and how they want to do it. So if a school district wants to have their own teachers teach our content, they can. We'll do the professional development for them. But if a school district wants us to bring teachers to do that for them, we'll do that as well.
So this program is very real, very powerful. It's built on strong relationships. I often get the question, "What's our core competency? What's our sustainable competitive advantage?" It is the fact, which has been demonstrated in the last couple of years, that we can grow faster than most other companies trying to get into a new market. Example, this business, the Career Learning business, is now over $200 million this year. Why is it going to be over $200 million when we just started it two or three years ago? Because we were able to leverage these relationships we have with school districts and simply open up schools under the existing schools. We have relationships with politicians. We have relationships that understand how the state laws work.
And we find ways to make sure that we build a school that's compliant with each state's laws and each state's rules of how we can open a school. So in some states, we do it as district programs. In other states, it's charter programs. In other states, it may be a la carte sales. But whatever the state needs is what we try to provide. These contracts that we establish with our customers, our customers being the school districts or charter schools that we work with, they're over five years in length on average. And the renewal rate for those contracts is over 95%. And we now leverage over 3,000 enterprises between what we'll talk about today as Tallo, Tech Elevator, Galvanize, MedCerts, and K-12's own programs.
That's over 3,000 enterprise relationships that we can use to help students get experiences, project experiences, learning experiences, summer jobs and internships, mentorships. That's why this is so real. Now, our general business started off as full-time online programs, but they're now part-time programs as well, and they move into learning solutions. The a la carte sales that I've mentioned a couple of times could be what? To explain it to you, professional development for teachers, curriculum, just the curriculum if they wanted to buy the curriculum, marketing enrollment services, which are very important because there are a lot of rules and processes to be able to turn students up into a curriculum and meet all state laws, instructional services. That means our own teachers and instruction and financial management, managing their programs such as clubs and trips and programs that the students get involved in.
All of those are things that we do on an a la carte basis for school districts around the country. I'm not going to spend much time on this slide because Shaun McAlmont is going to talk you through this. But I did want you to understand that this started off as a vision of not just build it and they shall come. Many people say, "If you build the content and you train the student, you've prepared them." Our philosophy is, "No, you haven't. You've only done half the job." What you have to do is not just prepare them for the career, but give them the career experience, not just the intellectual experience, but the hands-on experience, and then you have to help them find jobs. You have to help them with the placement or help them go on to college.
And then you also have to make sure that businesses are informing you as to what you need to build into your content to make it the content that helps these students get jobs. And by the way, it's not just in civilian. It's also helping people out of the military. And we have a new program through Galvanize, which takes military personnel who are coming out of the military, takes them through IT training so they can have jobs and enter the workforce with skills that are necessary in commercial jobs, high-paying commercial jobs. So whether it's military or civilian, IT, medical training, business, or manufacturing, we cater to the geography and the jobs of that specific economy and what that specific person needs. This is an important page.
Again, I'm not going to go through all the numbers, but I just wanted you to know this is not just Nate Davis standing up here talking to you about what's to come. It's what's already there. I mentioned there's 30,000 students enrolled. We have 32 programs across the U.S. for high school students. We project that we're not just helping kids with a few lessons, but there are 7,000 real-world work experiences. That means projects, jobs. That means internships that we're helping students with. And there are over 2,000 certifications and college credits already earned in these programs. The 3,000 companies that hire our graduates from Stride companies are our partners. And now we have over 1 million users in the Tallo platform.
I love to tell the story because most of my management team didn't understand when I said, "What we need is the LinkedIn of career education." What do I mean by the LinkedIn of career education? It is a place where students can connect with employers, where students can connect with scholarships. They can connect with other students. How would we do that in a safe environment for students, young adults, as well as high schoolers? What technical platform would allow us to do that? There are so many social media platforms out there, but we needed it to be safe. We needed to be focused on social, I'm sorry, on Career Learning and all of those items that students needed to be able to get jobs and show their projects.
It needed to be a digital resume where they could take the projects they worked on, put them on a platform, a digital platform, and let employers or scholarship providers come and look at it. And that's what Tallo does with over a million users on that platform. So these things are real now. We're well into this, and we're growing strongly. I'm so proud of what we've done. I mentioned I'd talk about the management team. And I will spend some time on this slide because, as I've said two or three times, I'm really proud of this team. It's diverse in its points of view. It's diverse in its background. It's experienced. I won't go through every name on this page, but just a few of them. Dr. Shaun McAlmont. Dr. McAlmont has actually headed a public company. He's headed a private Career Learning organization.
His Ph.D. is in education. He has done so much to help people in other areas of Career Learning. Shaun's experience over many, many years. He is the person inside our company who knows the most about Career Learning and career programs. We hired him two years ago, and we brought an entire new team in place to help build this. One of the members of that team is Leilani Brown. She is a board member for the Executive Leadership Council, well-known national organization for promoting minorities in management. She's a graduate and a board member for the prestigious Middlebury College. She's the chief marketing officer in a previous life for an insurance company. She brings a wealth of experience across many different areas to go set up those external partnerships.
Kevin Chavous, who you hear from today, was a city councilman in Washington, D.C., who is considered the father of charter schools in Washington, D.C. He's an author. He's a co-founder of the American Federation for Children, which advocates for children getting a better education. He's an advisor to governors. He was on a presidential transition team. He knows more external folks and more people who can help us in the external community than anybody. And he's a professional at the external communications. And Kevin heads all of the areas, including our academic policy, and the chief academic officer reports to him. Brian Flood, who ran successful gubernatorial campaigns. He runs our entire workforce focused on advocacy in every state. Jodi Marshall, the CEO of Florida Virtual Academy. You may know Florida Virtual Academy in Florida. They are primarily in Florida, a little smaller than we are.
Jodi was ready for something bigger, so we gave her the entire Southeast of our country, a very large territory, and she runs that territory. Tony Bennett, who you hear from today, the superintendent of education in Indiana, who moved on to be the superintendent of education in Florida, two of the largest and most important states in our union, co-founder of the Chiefs for Change. That Chiefs for Change organization is the organization that advocates for changing and bringing our education forward in every way. And he was a co-founder of that organization. Tony is a nationally known operator of schools, has run thousands of schools around the country. I can go on, but this team is amazing. I'm not going to walk through every person's background, but I am proud of the team we put in place.
I'm proud it's diverse in every way in its experiences, in its skills, in its points of view, and we have a lot of times we debate internally the right way to do something, the right thing we need to do, the next market opportunity, and I think that's why we're a better company than we've ever been before because of this management team. This management team has a key focus on ESG, and many times, people want to know, "What's our ESG strategy?" I would tell you that our biggest fault as a company is we don't give people enough information and enough visibility into all that we already do. We're already, obviously, environmentally friendly because very few of our employees commute to work in cars and send gas up in the air. Very few of our employees have to use paper. Almost everything we do is online.
We're very environmentally friendly, and we don't tout that. We don't talk enough about that, so we're going to produce our first annual ESG report this coming spring, and that report will let everybody know what we're really all about, not just in environmental, but in social and in governance as well. In governance, I'm proud of our board of directors. We have members of the board of directors who've only been on the board for one year, then two years, then three years, all the way up to 18 years. So we've got people on the board who are financial experts, who are CEOs from previous jobs, who are CFOs. We've got education experts on this board, people who started educational organizations, both for-profit and not-for-profit. We have such a diverse background.
We've got a governor on our board who really was one of the early founders of school choice. I can't be more proud of the board either. I just think it's a fantastic board. They give me such sometimes great advice, and sometimes they're driving me hard, and it makes us better for who they are. Finally, I want to talk a little bit about our social responsibility. If you know a teacher in your life, what you know is somebody who cares about students, and that permeates all throughout this company. It's the reason that I've loved being here for the time that I've been here. The 11 years that I've been here, I've only grown to know more and more people in the company who care about community service, who care about what went on in the demonstrations this year.
When racial tension hit our country, I can't tell you the number of employees who wrote me and said, "What are we going to do? What are we going to do? What's our role?" We put together an effort called We Stand Together. That effort is focused on making sure that we give scholarships to kids to help them get through and get to good-paying jobs. We also have we're going to put together a pathway for high school students to interface and work with and develop their skills in law enforcement. At the same time, we want law enforcement officers to come into those courses and teach those kids because that's going to help them remove the stereotypes about the kinds of kids that we serve and the kind of kids that are in schools.
And bringing them together is going to allow not only more law enforcement officers, but also law enforcement to understand what's going on with the kids in this country. We want to sponsor a forum, a national forum with education leaders around the country on February 3rd of 2021 that allows our community to get together and talk about how can we produce better education equality across this country. Those are the things that we're doing. We're trying to put our best foot forward. We want to represent the country in a great way. We want to be a national resource in the field of education. And I'm going to wind this up by talking about a few numbers. These are numbers in our public filings and numbers we've given on our earnings calls. With this year in FY20, well, I'm sorry, FY21, are going to reach 195,000 students.
That's what we had at the beginning of the school year. Our revenue guidance has been very clear: $1.457 billion-$1.485 billion. And I think there's an opportunity for us to do better, but that is the range. The median of the range is $1.47 billion of revenue. Not only revenue, but take a look at operating income. Our operating income this year should reach $120 million-$130 million. Free cash flow at the same range of $120 million-$130 million. A very strong business producing cash flow. And that's in addition to the cash balance that we already have on the books of over $300 million because we brought in money this year from financing. We have strong, consistent performance. We're a believer that we will deliver great business.
Tim Medina is going to cover with you what I think is the final slide and the final discussion today. That is, at the end of the day, he's going to talk about our financial outlook. When he talks about the financial outlook, it won't come from just, "Let's put together some spreadsheet model." We looked at retention, historical. We looked at our trends in retention. We looked at growth by segment of our business. We looked at the trends in revenue per student and what's happening in this country, what's happened over time, what happens when you come out of a recession, how is education funded. We looked at M&A growth for the M&A activities we've already done and whether we'll do any more. We looked at the growth in Career Learning. All of those numbers came together. We debated them as a management team.
The summary is on this page. In five years, we expect to have revenues between $1.9 and $2.2 billion, Adjusted Operating Income annually reaching $250-$350 million. Free cash flows in the same range of $260-$360 million. If you thought of K-12 as that online charter school business, think again. Don't invest in K-12 because we were going to benefit from the pandemic. Invest in K-12 because our long-term strategy is based on a solid business that's growing modestly, that is giving us great cash flow, and then a business that we're moving into that has already grown to over $200 million. We've just done two acquisitions that are going to help us grow that Career Learning business even further.
And then all of the software that we've built, all the capabilities we have, we also can license to school districts at higher gross margins than our core business. And finally, a management team that I believe is one of the best management teams that you're going to find in the education industry with experiences across all areas. I'm very happy that this team and I want to appreciate that you've given me the time today to talk to you. I know it's going to be a long day because four hours of talking heads when we can't interact is not as fun as if we were in a room. But you're going to get a chance to ask us questions all along. And those questions will be taken by Mike Lawson. At the end of the talk, we will dedicate an hour to Q&A.
Hopefully, that will be much more interactive. I'd now like to introduce Kevin Chavous. Before I do, there's an agenda in front of you. Just really quickly, Kevin is going to talk about all of the academic policy and external affairs that we go through. The key that Kevin's going to talk about, and I hope he is really open with you, is how does the election affect K-12? How does the election affect Stride? We are going to benefit from many things that happen, not just at the federal level, but at the state level. There's nobody better to talk to you about that than Kevin Chavous. By the way, Dr. Tony Bennett will be here. He also is well-known in all the education circles. He's going to talk about how we operate our schools.
But in the Q&A, he can also answer questions about the states and about how the states and the elections in the states are going to touch our programs. James Rhyu, who is in charge of strategy, M&A, and marketing, is also going to talk about the new markets we can enter. And he's going to show you exactly how the platforms work because all of the technology reports into James. And so he'll be able to show you with a video exactly how it works. Dr. Shaun McAlmont, we like to put pressure on him in telling him that his presentation is the center of what we do. And today, that's true. Shaun's presentation is the most important because that's the future of the business. And he's going to describe to you just how we bring to life this Career Learning. Harsh Patel is our CEO of Galvanize.
He is the one that drove us to do the Tech Elevator acquisition. And he's going to talk about Tech Elevator and his core business. And then we're going to wind it up with Tim Medina. And Tim Medina, as I said, is going to bring together all the financial perspective. And you'll understand how all of these things deliver great financial business. So with that, I'd like to introduce Kevin Chavous. Kevin.
Thank you, Nate. Welcome. Welcome to the future of education. Welcome to Learning Reimagined. Welcome to Stride. I'm Kevin Chavous, as Nate said. I'm President of Academics, Policy, and External Relations. And I'm going to walk you through the regulatory and policy framework under which we operate. But first, in spite of Nate's rousing introduction of me, I want to talk a little bit more about me and my background.
I like to say and I share with people the fact that on my way to public service, I found my passion. That passion is grounded in the fervent belief that all children are entitled to an equal, quality-based education. As Nate said, over 20 years ago, I was on the DC City Council. I played a role in helping to start our charter school movement. Then I became a student of what works in education. I became a student and educated about education. After that, however, I understood that the relationship between education and politics is intertwined. In fact, I've long believed that there is no Republican or Democratic way to teach a kid how to read, write, or count. But the politics of education could get in the way of a kid being able to read, write, and count.
When I left the City Council, I began to advise, as Nate said, several mayors and governors and legislators. I became steeped in education policy. I was on then-Senator Obama's policy committee when he ran for president. And then I also helped to work with people like Joel Klein in New York and Cory Booker in New Jersey. I helped Governor Jindal start his scholarship program in Louisiana. I came to understand the interrelationship between politics and education. And it was about 12- 13 years ago when I got a call from Jeb Bush that I was introduced for the first time to virtual education and the online education experience. He appointed me to a task force that he and then-Governor Bob Wise out of West Virginia were putting in place. And that task force was to explore the power and promise of digital learning for America.
When Jeb Bush called me, he said to me, and I distinctly remember, he said, "Kevin, I'm appointing you to this commission because you need to understand that digital learning, online learning, the digital learning experience for children is going to be part of American education's future." Interestingly, when I saw Jeb after I joined the K-12 team, he said, "Do you remember our conversation?" And indeed, I did. Several years after that, that's when I got to know Nate Davis. At first, I advised Nate and his team, his executive team, on education policy, on academics. I joined the K-12 board. During a series of conversations, I shared with Nate the fact that I really thought I could help him.
He said, "Well, I'm going to tell you right now, Kevin, if you come and join the team, you need to get your hands dirty." Three years later, my hands have been caked in mud. It's all good because over the past three years in my previous role with the company, I was able to help drive more excellence, a more focused adherence to our academic excellence framework, and also make sure we had a chief academic officer who ensured that there was consistency in the academic output that exists in all of our partner schools. Not only that, as Nate alluded to, relationships are so important, such a key component of our success. He wanted to make sure that I was tasked with the responsibility of enhancing our relationships with our partner boards.
In this new role, now that Tony Bennett is now the Senior Vice President of School Management, as Nate alluded to, a superior educator, one of the best in the country. He's run education departments in two states. He is now running schools and will run it much better than anyone else. But in this new role, I am equally excited because I am responsible for all things external. I am at the point and at the front end of establishing and maintaining relationships with all of our key stakeholders: policymakers, authorizers, elected officials, influencers. I'm also responsible for new school development and the policy thrusts that impact our business on a state-by-state basis. So the highlights that I want to focus on today are essentially three main areas.
One, it bears noting and it bears some emphasis to talk about the complex nature of our business and our ability at Stride to navigate within those complexities. Then, as Nate alluded to, we want to talk about the elections and the impact on Stride's business. This has been a highly divisive and highly charged political time in American political history, and I get asked all the time about the impact of the federal elections on what we do every day. I'll unpack that for you. The third area is state funding. Another question I get asked is, because of COVID, because of the pandemic, because of the challenges that exist, won't that affect your funding stream? And how would that impact your ability to grow? I'm going to talk about all those things. First, let me chat with you about the complexity of our business.
Through our core business, we operate in over 30 states, and each one of those states has a different regulatory and compliance requirement. They have different funding models. They have different approaches in measuring academic success. They have even different requirements on how you even can do business in the state. Moreover, many of the states have union teachers. Many of our schools are union teachers, and the politics in each of these states is varied, equally complex. There's a myriad of political challenges alone in each and every jurisdiction that we work in. Frankly, that's why no one else does what we do. To be a national education company operating in over 30 states, you have to understand the complex nature of the business and demonstrate a seasoned ability to navigate within the parameters of those complexities, and we do that well. Let's look at the politics.
We have schools in the deepest of blue states like California. But we also have schools in the deepest of red states like Indiana and Kansas. Oh, and by the way, we operate schools in purple states like Arizona and North Carolina. A large part of our success over the past 20 years has been our innate ability to establish and maintain those deep political relationships on both sides of the aisle. And you know why? Because we focus on one thing: what's best for the children and families that we serve. So in many ways, our core message supports our approach to business development. And by the way, those relationships have helped us as we pursue our policy objectives that are important state by state. And we work with our independent boards that help us operate the schools in every one of those states. So now, let's talk politics.
I am, as I said, a recovering politician. So I can talk freely about the political world. Many people say, "Does it matter if President Trump is elected or if President Biden is elected?" The bottom line is the presidential election has little impact on state education or state charter policy. And you know why? Our business is basically a state-based business. 90%-95% of our funding comes from the states. In fact, probably the most striking aspect of this election cycle for us from a business development and a business maintenance point of view was the fact that during this election season, there were no significant swings in state legislatures or governorships, and that is important.
That means that the approach we've taken in terms of nurturing those relationships and making sure that our policy objectives got a willing and attentive ear. Then those people are still in charge in the states. Now, all that being said, I do not want to give short shrift to the power that exists in the federal government or the bully pulpit that the Secretary of Education has, and we still have solid ties to the federal lobbying team and solid ties to the Biden team. Not only are we working with folks who have those ties, we also meet regularly with members of Congress on both sides of the aisle, and there are two things, two likely policy thrusts that I want to share with you that will emanate from the Biden administration that directly, in a positive way, impact our business objectives.
One is that it is clear that the Biden administration wants to help states better prepare for and advance online learning. In fact, if you look at the Biden website, his plan for reopening schools, he says clearly that he will task the Department of Education with developing and sharing best practices for high-quality remote and hybrid learning. That's right up our alley. Secondly, the Biden administration has a deep commitment to Career Learning, one of our major, if not the major, objectives for the future. We expect that we will get a willing ear with federal policymakers, both in terms of helping states better advance and enhance their online capabilities and also sharing our best practices and our knowledge base as it relates to Career Learning. So I want to talk to you about two more topics.
One is the funding for the schools that we operate and how we plan on growing our programs. This slide that you see in front of you is a primer on how we get paid from the states. Now, Nate talked about the fact that in our traditional core business, where we run and operate schools, we started out as a curriculum company, then a charter school company, and about 60% of our relationships in our core business are with charters. But 40%, and the growing part of our business in terms of operating schools, are with school districts. And the funding that we get comes from one of those folks that we work with. Keep in mind that we are an education service provider. That means we're a vendor. Sometimes people say, "Well, I know you all have charters in certain states." We don't own any charters.
Most of the states that we operate in, it has to be an independent nonprofit board that owns a charter, and this is what this chart shows you. The money comes from the state. It flows down to the authorizer who authorizes an independent board to run a charter, and that charter then hires us, and we get paid in that way. By the way, with the school district, the money goes from the state to the school district and then to us. Now, this next slide is just as important. Again, there's this feeling that because of COVID, that there will be a gap in education funding post-COVID, but over time, as you see, education funding in America, state by state, continues to grow.
If you look at this chart, even during a recession where there's been a dip or an economic downturn, state education funding always comes back, and generally in a big way. This chart demonstrates that the state's commitment, the collective U.S. state's commitment to education funding, is obvious. In fact, for many states, the biggest budget line in their state budget is education funding. But there's one other thing that will help us, even as we go state by state, to grow our business. Similar to the Biden administration's stated commitment on its website to advance more resources to help states grow their online educational offerings, we expect that there will be new state money available to help local school districts enhance and advance their online learning capacity. As I mentioned earlier, I am now spearheading our business development, strategic growth. How will we grow? Well, Nate alluded to it.
First things first: relationships, relationships, relationships. We will build on our existing relationships and our expertise, and you know why? Because we know how to run schools. We know how to do it in a complex regulatory environment across many states. We know how to innovate. We understand personalized learning, but more than that, probably, we know what school districts want. We know that they need to grow and enhance their online capabilities. They need help with teacher training. They need a curriculum that's adaptable online, and they need a secure platform. We can help with that. We are the best resource in the nation to help fit a need that all U.S. schools are grappling with. This slide shows our potential future footprint. We will utilize multiple models, as you see on the right-hand side, in order to grow these relationships that we plan on developing.
On the left, you'll see the new states that are listed that we expect that we will move into over the next couple of years. In the middle of the page are the new schools and programs in existing states. Our goal is to have 100,000 new students, as you see at the top of this page. I want to call out something, and I want you to pay attention to something very important. Because there's this feeling that after COVID is abated, that we will go back to the old normal. I would be pedestrian. That ain't happening. In fact, the new normal will include an online learning experience for children. When you see blended programs, sometimes they call them hybrid programs, that will lead to a fundamental pivot in how kids are educated in the future.
We have talked to hundreds of school districts around the country. As Nate alluded to, we have relationships with a lot of school districts through our institutional business. But we also run and operate schools for several school districts around the country. And they are looking at maybe two or three days in a brick-and-mortar classroom, two or three days in an online setting. Hybrid learning is here to stay. And we excel in blended hybrid learning experiences for children. In fact, some of our highest-performing schools are in the blended hybrid learning arena. So let me summarize. We are the nation's leader delivering online education services at a time when our expertise is most needed. Our execution strategy is to coin a phrase, think globally, act locally. We'll work with the feds. We have resources and reach to work with the federal government and the new Biden administration.
We'll work with them to advance policy initiatives that will enhance online learning capacity state by state. We will remain immersed in building relationships state by state, which is the true guts of our business. Our growth strategy is grounded on the premise of Stride being a value add. We're not a competitor to a traditional American public education. No, we're an ally. We're an asset, not an adversary. We work with 1,000 school districts currently. This summer, we added 150 school districts to our ranks of partnerships. There's more to come. The final takeaway is Stride Learning is coming to a town near you. Thank you. Now, Mike will take us to break.
Thanks, Kevin. We're going to take our first break. Please enjoy the video clips. Take a moment to submit your questions and keep your eye on the clock.
We'll see you back here in five minutes.
Shaun McAlmont, President of Career Learning Solutions at Stride, says they have one of the largest online education programs in the country, and students all over Wisconsin can attend Destinations Coding Camp, a free virtual summer day camp.
It gives families an option that's fun. It's educational. And it engages students in things that they really like. And it introduces them to careers.
It's through the creation of stop-motion videos. The soft-spoken Morgan is overcoming the challenges of bullying. Morgan is a student at Virginia Virtual Academy. She has POTS, a condition that affects circulation. Her condition often made her a target for bullies.
16-year-old Brendan Hebert is a member of Elite Cheer in Chesterfield. This driven 11th grader is dedicated. Brendan is here every day after finishing school at Michigan Great Lakes Virtual Academy.
Dorothy travels all over the world performing in country-western ballroom competitions. So they took her out of public school system and enrolled in ALVA, the Alabama Virtual Academy. Now she can travel the world dancing and keep up with her schoolwork. Wright Esposito goes to high school, in his bedroom.
I think it definitely gave me more time to do stuff that I really wanted to do.
Stuff like building video games, making applications for medical students, and learning coding languages. So he made the switch to an online charter school called the North Carolina Virtual Academy. The flexible scheduling has allowed Wright to earn college credit.
Ashley Bowerman spoke to a Montgomery family using the online platform to help their family travel the globe.
The switch to K-12 from brick-and-mortar schools has given the James family the flexibility to travel the world and keep their children on track.
I'm so excited to introduce you to the next sweetest little guest. She's 12 years old, and she runs her own bakery business.
I do online school, Texas Online Preparatory. They have a really flexible school schedule, so I'm able to do school at my own pace, and then I have plenty of free time to decorate cookies and do cakes and all that.
This may look like a dining room, but it's been transformed into a mask-making factory.
I don't know much about.
The operation started small, but now the Zambrano girls are making more than 100 masks some days.
They say going to school online through Wyoming Virtual Academy has made it easier for their schedule so they can continue making masks.
In these unprecedented times, helping others is so important. Today, the Utah Virtual Academy gave back to families in need.
We felt the need to be able to provide for them the things that they need so that they are able to sustain themselves during this time.
Because visits to nursing homes are not allowed right now, students at the Arkansas Virtual Academy are connecting with residents online. They created a YouTube channel featuring them reading books out loud to people in nursing homes.
Welcome back. It's my pleasure to introduce our next speaker, Senior Vice President of School Management, Dr. Tony Bennett.
Thank you, Mike. In case you didn't know, I am not the Tony Bennett who left his heart in San Francisco. As Nate mentioned, I have spent about 40 years of my life as a traditional educator, running public schools, running public school districts, and running two state agencies. I started out as a high school biology and science teacher and head boys' basketball coach, and for the Hoosiers in our audience, you know how important that is.
And I worked my way up and literally sat in every chair in the educational platform, from an elementary school principal to a high school assistant principal, high school principal, district assistant superintendent, superintendent, ran a CTE program, and then had the incredible opportunity to work with Governor Mitch Daniels in Indiana, where we launched what many people believe was the most aggressive education reform agenda in the United States, where we advanced school choice, advanced charter schools, improved our educator effectiveness, school accountability. And the most important thing is we did all this with the frame of making sure that every child, regardless of their race, regardless of their zip code, regardless of the amount of money their parents made each week, we made sure they had the opportunity to have the best education for them. And I was very proud of that.
I then had the opportunity to go work for then-Governor of Florida, Rick Scott, who is now U.S. Senator in Florida, and had an incredible experience running the education program in the state of Florida. But I have to tell you, I am incredibly honored to be part of this incredible organization and this outstanding leadership team. Because bluntly, K-12 and Stride, they were providing school choice and equity for education of children when that wasn't cool. And that is a passion of mine. And I am honored to be here in front of you and talk about how we make sure our core business drives the academic excellence our students deserve. So I'm going to start with some highlights and just kind of tell you what you're going to hear. I mentioned that I was a basketball coach.
I believe you tell people what you're going to tell them, and then you do it, and then you tell them what you told them, and it's a pretty simple equation. So we're going to talk about how over time, over the 20-year experience that K-12 has been in existence, the demand for virtual education has increased and how it's going to continue to increase and how that's impacted our nationwide reach. I'm going to spend some time talking about driving school excellence and performance. It's incredibly important that if you're going to offer a choice for children, that choice is a great choice, and that choice meets every child where they stand and takes them to their highest level, and that's what we're about, then we're going to talk about improving customer satisfaction.
We have some pretty interesting information that I think I can share with you as a lifetime educator that validates the outstanding work this company has done. So with that, let's move forward. Let's talk a little bit about the increasing demand for virtual education. Many people in the education circles today have talked about COVID being a market changer. It's not a market changer. It's a market accelerator. Let me be clear. The interest and the demand for virtual education has been in place and increasing for 20 years. As a matter of fact, I would suggest to you there are many market powers in place. Most importantly, we have parents, many of whom went to a virtual educational experience, maybe in their high school days. Many of those got their undergraduate or graduate degrees through an online platform.
They now understand that this is best for their child. It's now a lifestyle decision. So we now have parents who are digital natives. Nate and Kevin mentioned our partnerships with school districts. For many years, politically, publicly, there's been this discussion of choice in education. And is it, are you pro-school choice or are you pro-traditional public school? What we know today is those lines are blurred. Because of our district partnerships, we are helping to give school districts more capacity to educate more children. You see an idea there about online professional development growing. Many of us took online courses in college. I'm here to tell you I had a conversation last week with a district school leader who had the opportunity to experience one of our professional development sessions for her school district.
Her administrators came back and said it was the best professional development they had ever experienced. That's incredible feedback coming from the traditional public education experience. But let's also talk about COVID. I mentioned COVID being a market accelerator. Yes, there is increased awareness. There is increased demand. And all of that leads to that graph that you see on the right, which, this is a $35 billion addressable market. So what's that mean nationally? If you put a map of the United States like we have in the slide in front of you, you see what might look like blue states and gray states. We've seen these types of maps over the last few weeks, maybe with different colors. But what that shows you is basically we are across the country. We have a stable, predictable, massive revenue source.
It allows us to continue to do great things for children in other areas. You see the blue states. Those are states that have already taken up either statewide or district policy for virtual education. Now, that doesn't mean that those white states or gray states that you see there, it doesn't mean they don't. It means they're in process. Because as we speak today, many of those states that are shaded in gray are having conversations about how they address education for their children, especially in this pandemic experience. We're thankful we're a part of every one of those conversations today. Nate and Kevin both mentioned an important statistic. That's the 60/40 split. You see 63/37 on the right side of the slide.
At one time, back when I was a young state chief in Indiana, it was 63 and 37 split between charters and public school district mix. That tells us that the interest and demand for public-private partnerships is growing and will continue to grow. And that tells us that we will reach more and more children in the states where we currently operate along with the states that are considering an expansion of virtual education. So why would a child or a family choose a K-12 or Stride-powered school? I could stand up here and give you and read this list of bullet points. I don't think that's really the key. The key is a little background. I stood in front of state leaders, state district leaders in Indiana in 2009. And I said, "You don't need to worry because this is really for homeschool kids.
These are for your elite actors, your elite athletes, your musicians. This won't affect you because at the time, there wasn't that 60/40 split. Now we see virtually 160,000 reasons these kids come to our schools. Either they're bullied, they have a special need, they're medically fragile, might be behavioral issues, they might be homebound. Maybe they live in a rural area where they don't have abundant school choice or they don't have access to the type of programming they need. So in an environment that demands personalized learning, we offer personalized learning at every level, from academic to the supports for academics to social and emotional needs. But I think it's very important we take a look at a couple of the statistics on the right. Today, we see that 83% of our students enter school below grade level. That's a challenge. It's a challenge for all school districts.
We hear it every day. We see that almost half of our children are eligible for Free and Reduced Lunch, and we see that 16% of our students enter our schools having a special need, and again, that is the basis of personalized learning. Take every child where they are, take them to the highest level of their capabilities, and so as that slide says, while there's 160 reasons, there are 160,000 ways we drive education for each child. Let's talk about the COVID experience. We'd be remiss if we didn't say that. We didn't talk about it for a minute and visit it.
I think the best thing I can say, and there's a lot on this slide, the best thing I can say, and I want you to think if you have children in school. K-12 or Stride-driven schools had an uninterrupted educational experience since last March when the pandemic grew and when many school districts were sent home. Our students didn't miss school. Think about that. We don't have snow days. We don't succumb to hurricanes. Our students learn. But let's talk about the why behind the what. And the why behind the what is we have 20 years of experience. We know how to do both synchronous and asynchronous instruction. We have a world-class platform and curriculum. Nate mentioned that. And we have teachers who understand how to drive relationships and drive academic rigor in a digital environment. No criticism of our traditional public school partners.
They were asked to perform the impossible when they were asked to flip to a virtual experience in a day or two. That's why they turned to us. And we were proud to help them. As I mentioned, part of my background has always been running schools, running school districts. And I mentioned my experience as a basketball coach. And I would tell you that it was a great life experience for me because I learned as a young coach that if we focused on doing a few things incredibly well, our teams won. And I was always very proud of our records. And what we're doing to drive academic excellence is the same thing. It's the same lesson we learned when we were in Indiana, where we took three or four measurables. We took our state assessments.
We took our graduation rates and the number of children, the percentage of children getting Advanced Placement, International Baccalaureate, or industry certifications, and what we saw over a four-year period, improvement grew steadily. We're doing the same thing here. For those of you kind of of my age and maybe a little younger or a little older, we know the three Rs, the old three Rs of education: reading, writing, and arithmetic. It's not the case in the 21st century. This is about rigor, relevance, and relationships, academic rigor, relevance to what a child will see in their post-secondary life, and building relationships with inspired and inspiring teachers and leaders. I mentioned those three important measurables, and this is what we focus on every day. We have four regional teams.
I am proud to tell you I have the opportunity to work with some of the greatest regional leaders I know. They are driving these results with our heads of schools daily. I want to just spend a moment and talk about those. One is literacy. Sounds simple. It is. We know from research how important it is for a child to be able to read when they leave third grade. Think about the statistic about how many of our children come to us behind grade level. It's especially important in a digital format.
We are focusing every day on providing great literacy instruction, literacy remediation, and monitoring of curriculum and instruction so that we make sure our children have the literacy skills necessary to flourish in our academic programs, but most importantly, flourish as they move through their academic careers and on to post-secondary life. That's second one, growth. Take a moment here and talk just a little bit about the pandemic and that it's going to change the way we assess children. I am very proud that Kevin, Nate, and the team here thought about this well before the pandemic. Because we will be moving in the future very likely to a way of measuring children throughout the year to see if they're growing. We've been doing that here for two or three years. That's very important. It keeps us ahead of the curve.
And it will allow us to be part of the national conversation that will likely come after the pandemic. I believe as an educator, every child has the right to grow at least one year in one year of instruction. And the end result should be that we prepare students for one of those three Es. I call them the three Es. It's enrollment in a post-secondary educational institution, employment, earning a family-sustaining wage, goes to the heart of our CRE program that Shaun McAlmont will talk about, or enlistment, where a student moves on to selflessly defend our country and advance their career through the training they get in the military. So literacy, growth, and the third is retention. How do we make sure our students stay with us? We do it by monitoring engagement every day. What are we doing to engage our children?
The child thinks about leaving us. What are we doing to reach out to see if we can help them in their decision-making process? The result is on the right. That chart, as you can see, shows that as we are successful in these areas and we keep students with us, they do better, and that's very important, and it's going to be even more important as we all examine what happens with the academic slippage that will likely come across the country as a result of the pandemic. I mentioned this slide a little earlier, and it's the slide about scale and success. Again, having run school districts and state agencies, I will tell you one of the greatest problems we know about in the education industry is how do you grow something and keep its quality?
It's frankly the toughest question most district superintendents, most principals, most educational leaders struggle with every day. This slide explains very clearly that K-12 Stride has been able to grow and not only maintain customer satisfaction, but improve it, and the result is, and Kevin made this very clear, this all comes down to the life of a child, and everything I have spoken about tells us that we have been successful in sending children to some of the most prestigious colleges and universities across America. We've prepared children for opportunities in the trades, and we help them flourish as they pursue their post-secondary plans, so as I sum this up, there is an increasing demand for virtual education across the country, and there's no doubt that COVID will continue to accelerate that, and I dare say it won't slow down.
Just as Kevin said, this won't slow down as COVID ends or there's a vaccine. When we come out of this, more and more people are going to look at personalized instruction and choice as the driver for their educational experiences. We will continue to expand our national reach not only with our current schools, but also with our Destinations Career Academies. But most importantly, we will continue it in an environment of excellence and high customer satisfaction. And folks, I'm here to tell you, as a traditional public educator, that's what I hang my hat on. And that's why I'm thrilled to be part of this company and see this company in the growth that it has in the future. With that, I would like to introduce our President of Strategy, Marketing, and Technology, James Rhyu.
Thanks, Tony. Appreciate it. My name is James Rhyu. And as Tony mentioned, I'm the president of corporate strategy, marketing, and technology. My background is, before I came to K-12, is working in various innovative companies, Match.com, Dow Jones, SiriusXM satellite radio. And when I had the opportunity to come to another innovative company like K-12, I jumped at it. I came about eight years ago to K-12. And when I came, I came first as a CFO. Over time, my role evolved. And this past year, Nate asked me to move into this new role. And really, the purpose that he challenged me with in this new role is to really drive K-12 towards that $100 billion market opportunity that he referenced earlier and driving towards that growth and scale and leverage that we know we can achieve.
And so really, the purpose of my role is driving K-12 toward that market opportunity. So I'm going to talk to you today about four pillars that really ground us in our Stride towards growth, Stride towards scale, and getting that leverage. The first is we, over the past 20 years, have built a platform, education-as-a-service platform, that hinges on our ability to package both product and service in one for our clients. The second is innovation. We are a company 20 years ago that really was the founder of K- 12 online education. And we need to take that innovative spirit and continue that and continue to drive innovation through existing product, but also through new product. In our ability to scale, we also, as Tony mentioned, we need to retain students. And student retention has both an academic benefit as well as a financial benefit.
I'll talk a little bit about that. As we scale, we need to ensure that we have operating leverage through efficiencies, improving unit cost. I'll talk to you a little bit about how we're going to do that. The next two slides, I'm going to talk about education as a service platform. This slide here is really what K-12 was founded on 20 years ago. It's really the foundation of our product and service offering. We have built the largest, most comprehensive digital-first curriculum in the industry. That digital-first curriculum evolves. As Nate mentioned, it's mobile-first. It provides access across a breadth of disciplines. It's now involved in career readiness education.
We have systems behind that, proprietary systems that allow us to scale for the growth that we've had this year, and as Kevin mentioned, for hundreds of thousands of more students to come. We back that up with a service platform that allows for us to not only provide a product, but to back that up with a service predominantly both teachers and back office. And that back office, as Nate mentioned, involves everything from the finance to HR to compliance that allows us to bundle together a turnkey solution for our clients, and that forms the foundation, really, of who K-12 started out as.
We were able to build off of that foundation as an education as a service platform. This next slide here is really the left-hand side part of the slide, in fact, that same foundation. As we move into Career Learning, we take that foundation and we build an ecosystem around it. That ecosystem allows for us to provide a path for our students towards a career. In the foundational business we have around general education, the outcome that we're really shooting for is education. In our Career Learning, the outcome really is a career trajectory. That career trajectory is predicated on being able to tap into, as Nate mentioned, hundreds, thousands of career partners, the ability for our students to leverage learning not just through textbooks, but through interactions with industry professionals, through linkages with corporations and our talent platform, as Nate mentioned.
It gives them the opportunity to work in teams through project-based learning, just like you would in a real-world work environment. It gives you the opportunity to get certificates in fields that are in high demand and growing, like the healthcare field, and our strategy around our MedCerts acquisition was exactly that, to give that pathway for a career trajectory, so this really forms the foundation of our general education and then the ecosystem around which our Career Learning is built and enables us to scale through the coming years. Now, I'm going to show you a video here that gives you a little bit of a taste for how this all comes together for our customers.
Stride opens paths to lifelong learning. By providing tools that are personalized, engaging, and career-focused, we're investing in a strong future for learners of all backgrounds and ages. We do more than translate an old-school education for a virtual world. Stride isn't online because it has to be, but because it's designed to be. From pre-K to adult, learners have access to more than 2,000 online courses available when and where they need them. We integrate proprietary and best-of-class capabilities and curriculum to deliver an interactive and seamless experience for over 200,000 current users. But it's far from one-size-fits-all. Responsive curriculum meets learners where they are, lets them express themselves, and allows them to personalize their learning environment so it works for them.
With the online school, we get to sit down and make school fun for her. She excels, and she is. She's really doing well.
Instructors trained in online teaching are supported by powerful AI technology that adapts lessons based on student performance. So two students with differing abilities may take different paths to reach mastery in the same course. We use AI to provide instant automated scoring so students get immediate feedback and teachers can use the data to inform instruction.
It's not just test scores, but it's also the information in notes to learn about my students. It's not only, "How did you do on your test in science?" It's, "What went well last year?" and, "What can I infuse into my education or my lessons this year?
Students work through courses at their own pace with the help of built-in digital tools and videos that explain key terms and concepts.
When we add or subtract decimals, we line our decimal points up. Just like that.
There's even a help button that connects learners with a teacher who can answer their questions.
If there is any kind of an issue, she emails her teacher. She will explain everything to her, or she'll go to a help lab. Her teachers are amazing at making sure she understands what's going on, and I notice that she's way more confident.
Students also take advantage of our digital library of over 20,000 e-books. The system evaluates each reader's current skill level and provides them with books that match so they can choose reading material based on their interests. Built-in reporting tools allow parents, students, and teachers to track progress. Our platform can automatically adjust passages to a student's reading level and can translate articles into Spanish, Chinese, and 64 other languages. When students log in, they gain access to an innovative, immersive learning experience where integrated technology builds an all-in-one learning space. They engage with teachers and peers in live online classes, watch instructional videos, and complete interactive lessons. Game-based learning and AR get students excited about learning in new ways. Subjects like science, math, and reading all come to life, motivating students to keep going and celebrating their successes.
Good job. Let's see.
Through Stride, students are empowered to take charge of their education and jump-start their careers. By combining core academics with a career-focused education, students in seventh through 12th grade can gain real-world skills, find their passion, and explore career options.
Business class has been extremely fun for me. It's gotten me a little bit more organized. That class got me thinking of making my own business.
Relevant electives teach students the skills they'll need for success in high-growth jobs, while project-based learning allows them to take on roles that function like those of an actual work environment. They collaborate to solve real-world challenges by conducting research, thinking critically to develop solutions, creating video presentations, and having those presentations reviewed by professionals in the field. This student-centric approach helps them develop strategies they'll use in fields like business, healthcare, and IT.
I knew that I wanted to go into IT.
This is a lot more fun.
Our talent platform connects over 1 million users with scholarships, college admissions, internships, apprenticeships, jobs, and more. For those in the workforce, Stride's adult learning provides options for career growth. Lifelong learners can take advantage of boot camps in healthcare, data science, and software engineering.
I wanted to create a plan for myself and my family. I wanted to take care of them, also take care of myself, learn something completely new. I took a leap of faith, basically.
Thousands of Stride-powered graduates have been employed by top companies across the nation. At Stride, we're leading education into the future where learning is lifelong, personalized, and prepares people for tomorrow. From every learner's drive to each educator's inspiration to a company's investment. The more we all contribute, the stronger we all become.
I hope that video gave you a little bit of a taste of what we bring to bear in the market and the product differentiation we have. It's interesting, over the past six or eight months, I think we've all learned a little bit through this pandemic of what online learning could be, but unfortunately, also, the difficulties sometimes in bringing online learning to kids. And our platform and our service offering is really differentiated, as you can see from that video. And as Tony mentioned, through the pandemic, our kids and our platform were still being, and our teachers are still being able to deliver seamless education.
In addition, what we're able to do is really meet kids where they are, whether, as Tony mentioned, it's the 80-plus% of kids who are coming into a grade behind grade level, whether it's a young adult in a Career Learning path that is trying to get into a new field. We're able to meet learners where they are, and part of that, our ability to do that, is through the innovation that we bring to bear. And that innovation is both internally developed and partnered innovation. We use tools in the marketplace like AR, machine learning. We bring those to bear within our platform to really enable our learning, and that improves the customer experience.
You may have seen in the video, we have an ability, for example, for those learners who are behind-grade level to sit in the same classroom with their peers, which is important for their social development. But while they may have a below-grade-level reading skill, they can still read the same passages because we will translate those passages into a lower reading level for them online, real-time. Over half of the people in the U.S. today have English not as their primary or first language. We have tools that will allow our curriculum to be translated into over 100 languages. It's bringing these tools to bear that allows our product to be able to meet those learners at their point of need.
And through that innovation and the continuing innovation that we bring to bear in our platform, we think that we're able to continue to differentiate ourselves in the marketplace and continue to go after what's a growing and evolving education landscape. And we're going to continue to invest in those innovations through our career platforms and both organic and inorganic means. The last thing on innovation that I'd like to mention is that we, by dint of the fact that we educate so many kids each year, hundreds of thousands of kids each year online, we have more data around how these students learn. And over time, we're going to be able to use that data and innovate around that data to improve the experience for our customers.
The last two topics I'm going to talk about, as I mentioned earlier, are really around retention and scalability through cost efficiencies and unit cost. Retention is so critical for us, both from a financial standpoint but as well as from an outcome standpoint. We know that students who stay in our programs longer over time will have more opportunities for them. They'll achieve better outcomes. And as you can see from the chart here on your right, we've spent years improving our withdrawal rates. Our withdrawal rates have come down, meaning our retention has gone up. And we still see a lot of opportunity to differentiate our programs in such a way that really helps retain more of our students. In this day and age, many kids, their engagement, whether it's in our program or other programs, involves some sort of online social engagement.
And so we're bringing things like more social engagement to our students, which we believe will help drive up retention and improve our overall outcomes. Lastly, I want to talk about efficiencies. This year, we saw great improvement in operating leverage. Primarily, as you can see on the chart from the right, our SG&A as a percentage of our revenue will improve 500 basis points. And we do that through a number of tools. We apply automation tools and techniques. We look at our unit costs and try to drive down unit cost. We're continually looking for ways to make the customer experience easier and more seamless. And so our ability to drive these efficiencies and drive down lower unit costs helps us create leverage for our business and scale.
So to wrap up, these four pillars: our platform, the foundation, and then the ecosystem around our career readiness platform, the innovation we're going to bring to bear, the improved retention, the better unit economics, they all will help drive us towards growth and scalability in the future. I believe we're just in the first inning of this game. We have put up points on the board already, but we're just in the beginning of what we can do to go after that $100 billion market opportunity Nate described. So with that, I'll turn it back over to Mike for our next break. Thank you.
Thanks, James. We're going to take our second break. So please, again, enjoy the video clips. Take a moment to submit any questions and watch the clock. We'll see you back here in five minutes.
Caleb Davis is a very bright, high-functioning autistic child. He was attending Detroit Public Schools and showing signs of falling behind. After researching all options, Chantel enrolled him in Highp oint Virtual Academy of Michigan.
He went from reading on a first-grade level to fifth-grade level by the end of fifth grade.
Arkansas Virtual Academy is a public charter school that has been teaching online learning for years. Stephanie Sharp explains how the school is now helping teachers in brick-and-mortar buildings manage teaching online.
Districts in Arkansas and beyond have contacted Arkansas Virtual Academy asking for help, teachers teaching teachers how to better serve students through online learning.
The challenges have many of you looking into new options that don't involve local school systems. We're looking into online learning, an option many of you are exploring.
Katie Poindexter is the Virginia Virtual Academy middle school principal. It's free public school online.
This is a great option for students if you're just wanting to have a firm plan in place in August or September.
Peter Hoekstra is the principal of the Insight School of Michigan. It's an online public cyber school.
Students that otherwise would not be able to graduate for whatever reason, social, emotional, physical, they have been able to walk across the graduation stage, cap and gown, full deal, and I'm shaking hands.
That's what Peter Hoekstra says makes his job so worth it.
Indiana Digital Learning School is 100% online and serves students in all of Indiana's 92 counties. Lewis teaches courses on career and technical education in criminal justice and something she knows very well: agriculture.
We're getting the kids ready now in high school for their future aspirations.
Teachers and students working from home is a way of life for those enrolled at the California Virtual Academies, or CAVA as it's known. Right now, CAVA is in the early stages of their enrollment season, and Koval tells me they are already seeing increased interest in their schools. Alex?
Makes sense. Clearly, they know what they're doing.
It was a special day for the Nevada Virtual Academy seniors. As they celebrated graduation, more than 150 seniors were able to come to receive their diplomas in a drive-through graduation ceremony.
This is so important. Our kids worked 12 years to have this day.
Karina Bolster spoke with one eighth grader and his family who say online education changed their lives.
The full-time working single mom enrolled Trey in Virginia Virtual Academy.
Joshua understands science better than most 13-year-olds. As a student at Friendship Public Charter School online, he's won first place at STEM fairs the last two years. He attributes some of his success to the fast-paced environment he's in. For Josh, an online education has put him on track to experiment, create, and test his theories without time restrictions.
Welcome back. It's my pleasure to introduce our next speaker, the President of Career Learning Solutions, Dr. Shaun McAlmont.
Thank you, Mike, and good afternoon, everyone. I'll start by just an order of quick introduction. The majority of my 30-year career has been in leading career training businesses at the adult or post-secondary levels. As Nate mentioned earlier, I've served as CEO of two training companies and had the good fortune of also being the president of an online technical college. I actually started my career recruiting high school students to college and advising student athletes at the college level, but all related to career development and success. I met Nate a number of years ago, and he shared with me his vision way back for bringing career learning to students at the earliest of ages. I've got to tell you, when I heard his vision, I was all in.
I love the idea of bringing career readiness and career talent-related developmental skills to students in the early grades because it will actually help them at the moment they graduate, post-graduation. It will help their future families and also their communities, and so it's a great initiative, so I joined Stride a couple of years ago, and my role here is focused on building the Career Learning business and bringing my experience in career training to a company where I can also leverage the operations, the experience, and the national footprint of Stride, so my presentation today will focus on three strategic drivers for the Career Learning business. First, we are well-positioned to take advantage of a large and expanding addressable market.
Second, we're leveraging the Stride infrastructure while also building a diverse portfolio of assets and related partners to fill a gap that we see in education today, especially at the middle school and high school level. Thirdly, we're creating a unique offering that spans early career prep all the way through adult talent development. You've heard that from a number of our speakers today. And all of this points to a significant growth potential for this particular line of business. So let me go into a little more detail on each of these strategic drivers. First of all, we see this market opportunity expanding, and it's really based on a number of trends that are driving demand for our career-related solutions. First and foremost, I think you heard it from Kevin first. You heard it from Tony loud and clear.
I believe Nate and James also mentioned it, but we have bipartisan political appeal right now. Workforce development is an important factor for this country, no matter what side of the aisle you sit on. In addition, we're living in an automated, sort of tech-driven workplace that requires new types of training at all levels. We've got to be ready to present that type of training to students while they're still in the younger grades. Thirdly, there's an increasing reality and acceptance that new-collar jobs or the newer jobs today in today's workplace probably require a different type of training than we've offered in the past. It might relate to more certification and technical training versus a traditional college degree.
I think a number of CEOs have forecasted that their hiring trends over time are going to shift to employees that have technical skills and abilities versus a traditional degree, and so we want it to be ready and poised to offer that type of training. Ultimately, we believe that we've expanded our addressable market. We've done it considerably to about a $65 billion market opportunity based on the addition of Career Learning at the middle and high school level and also by adding these adult learning assets and corporate training opportunities for the company. There are a number of real market trends that are giving us a tailwind in growing these programs. First of all, workplace demands are changing at a pretty rapid pace. I believe that schools at all levels are having a hard time keeping up with that.
At the high school level, we know that teachers are having a tough time understanding that new environment and therefore a tough time translating those skills to students. And those students are having a tough time finding jobs shortly after high school and thereafter. In addition, student debt is increasing past the $1.6 trillion mark, and that debt crisis will soon become a default crisis if we don't address it. The return on that particular education spending is not reflected in the readiness of students coming out, as 75% of employers today are reporting a skills shortage. And ultimately, the real economic cost for all of this is topping the $1.2 trillion market lost output. So what are we doing about it?
We're building career solutions that span multiple segments of education and addressing the known gaps that we see in education and providing skilled workers while doing it all at scale, so we've done something pretty unique in the industry. Our second real driver here is for creating a portfolio of assets that allows us to be diversified in our approach and expand our addressable market, both of which we've already done. You saw the announcements of the two acquisitions we made last night, and ultimately, our middle school and high school prep program that allows early career development also benefits from the adult training businesses that we've purchased. The adult programs focus on two of the highest demand areas that we see in the market today, fields that don't necessarily require a traditional degree for high-salary jobs when students graduate.
All of this means that we've added value to the company. We've introduced something new to the market, and we've also added access to a talent management platform named Tallo that Nate mentioned earlier that allows students to access both jobs and continuing education opportunities. I think it's important to mention the competitive market landscape as well and where we're currently positioned. The competitive dynamics around career training from middle school to high school and on to adult is somewhat fragmented. We are a first mover in taking a significant step toward training younger students at scale and then adding the adult training on after that, and ultimately creating a comprehensive path, which really hasn't been done before. Competitors are taking a variety of approaches versus ours that really leverages the Stride national network.
The reality here is that there are considerable barriers to entry on the high school and middle school side, and so our competitive position is strengthened at that middle to high school level because of what we're approaching. When you look at the map we showed earlier and where all of our general education schools are sitting across the country, our national footprint really does support our growth today, and while we operate the middle and high school programs in most of those general education states, we've got a goal to expand to all of those states, and that's reflected in the states that are in light blue. We currently have about 30,000 students enrolled with capacity to grow in addition to targeting ongoing capacity expansion through existing schools and states and also new programs over the next few years.
So what we've created for the student experience shown on this slide is a combination of learning steps that builds a unique experience and also builds confidence at the middle and high school levels. If you look at this slide from left to right, it really is a carefully designed progression from industry exploration to selecting courses and pathways that introduce students directly to professionals through a partner company that we have named Nepris. You heard earlier, I believe almost everyone who's presented talked about the importance of project-based learning. This type of learning really allows our higher-level career and team skill-building through that student development when it's joined by work-based learning experiences. That learning is authenticated by what's happening in the workplace. It's not simply teacher and textbook-led. Certifications and badging and early college credit also lead the student journey to very high levels of workforce readiness.
That confidence is also built and a level of sophistication that we haven't seen before, especially in those younger ages. So overall, the program and the experience that students have are building along the way to prepare a student and increase their options at graduation, whether they're looking for a job to go on to traditional college, a tech training after school, or the combination of all three. So I'm going to take a moment and share a case that highlights the unique experience I just described. I'll use this slide to really preview a video that you're going to see next that depicts a group of our Florida students engaged in project-based learning. This learning method has elements of problem-solving, group work, and experiential learning that takes a student out of their comfort zone typically.
They work on projects that are real industry challenges, and they solve those problems and projects in their teams with facilitation from the teacher and actual input from industry. As students assist each other in teams, you can see how they develop career skills and confidence, and we see it in the chats. Sometimes when one of the students in a group might not be comfortable talking to an employer, or they might not be comfortable in presenting back to their teacher or their group or to an employer to authenticate that learning, we see in the chat that they support each other. They back each other up, and developing that at middle school and high school levels is critical in building that career confidence as they move forward.
Although this is a well-known method, we do it in a blended fashion between virtual and face-to-face, and now we're doing it at scale. So let's watch the video.
One of the things that excites me about Florida Virtual Academy is the opportunity to use project-based learning. It is so closely aligned with the real job environment. Someone presents you with a problem, and what skills do you have, and what skills do you need in order to solve that problem for the business?
So for the business consulting project, we're business consultants, and we are trying to bring back a little bit of life into Better Bikes because their business is not doing so well. Their problems were keeping their inventory management on time, having their full stock. The cash flow wasn't very good.
Another problem they were having was their reviews were coming in bad because their bikes were going out late. The departments that were involved in this, they weren't communicating to each other. They have to perform an operation analysis, executive summaries. They were supposed to bring technological solutions. So they had to do a lot of research and then come up with real solutions to problems. To bring it to life, the students suggested, "Why don't we go and do in-field research?" So we were able to get a bike shop to allow our students to come, and they were able to go ask questions. So this is something that we do to make project-based learning more authentic. Things are not as they seem. They may seem a little bit easy, but in reality, there's a lot to it than just making bikes.
You got to keep track of accounting, where the suppliers are coming from.
A bicycle shop has owners. It has a business manager. It has information technology, social media, marketing, multimedia arrangements inside the store, merchandising. And then it's got the manufacturers and the sales and the repairs. It's got a very diverse environment that can encapsulate a number of things that you might be interested in. It's so much more than just a bike shop.
They're learning a lot. They're learning technical skills, soft skills that will help them build their future regardless of the career field.
What we're really looking at are students being more of the facilitators as opposed to it being teacher-driven or direct instruction. So for us, project-based learning isn't so much about mastering a certain skill to take a test. It isn't so much about assessing how much they've grown.
We are teaching them how to become problem solvers, how to critically think through a process and solve those problems, how to develop strategies around that. And not only that, but to collaborate.
Whenever we do Zoom, we're just pitching ideas in, and we don't have just one perspective. Together, we had to present everything in Class Connect. This is the executive summary for the project Building Better Bikes. You have one person that explains the problem with management, and you have another person explaining the problem with inventory. This project helped me understand how to run a business. If you have better programming and from the start, you're organized, then your business is going to go well.
And I think students don't really know how important business is, or even more so, how much fun it can be.
When I see students learning by doing, it makes you feel useful. I'm really very proud of them.
This video is a great depiction of how project-based learning should work between the student, the teacher, and industry. When those students were able to go into a local business, it really authenticated that experience. And so it gives the students a competitive advantage over students who don't have that type of experience. It builds very important career confidence, and it gives them a leg up on an early entry into their career of choice. And we think that that confidence level is very important, not only for the moment they graduate, but years later. So this is going to be a hallmark of the program and developed early at the middle and high school levels.
Now, that high school level experience is matched by experiential learning in the adult programs that we have. And so you can see why this is an important function and feature in all of our career-related programs. So we're currently focusing heavily on the development of technology, health, and business-related pathways. And you can see the pathways that we offer here, and particularly the job categories that are in high demand in each of these pathways. And so you've heard us talk about software development, the move from the MedCerts programs, which I'll describe in a moment, toward nursing, incremental movement toward higher salaries in the pathway of choice. We're also currently working with industry representatives to continue the development of both advanced manufacturing, agriculture pathways, soon the trades.
And in doing all of this, the goal is to build out high job demand pathways, but we also consider career pathways that are high student interest pathways as well. So here's a sample of a general IT pathway that we're creating. Now, I should mention previously, our IT pathway was more of a loose collection of similar IT courses that were found in our career technical education catalog of courses. Today, and looking forward, the introduction of Galvanize and Tech Elevator courses and their related content put together in a structured and developmental path gives students an opportunity to accelerate their tech training. The more structured path, in addition to project-based learning that we just saw, the addition of Nepris industry exposure and work-based learning strengthens that career development from top to bottom.
The new pathway structure that we have increases our student earning potential at the moment of graduation, and then even a short period later as they have more continued training to substantially higher salary options. So the addition of these acquired companies accelerates not only our content development, but that acquisition of content timeline as well. So I've talked about IT, but let's also turn the time to talk a little bit about the other high-demand area that we're focused on developing, and that's healthcare programs. As you know, IT is a male-dominated field, and healthcare is equally dominated by females. The development of healthcare training programs as we look forward allows us to broaden our demographic reach and realize a similar approach that we've got now in IT development. And so this opportunity is provided through the acquisition of MedCerts.
So let me talk about MedCerts just for a moment in a little more detail. I know Nate introduced it earlier, but I've liked this company ever since first learning about their programs and seeing how they operate, a great leadership team, and they're a growth company, a profitable growth company, which is important as we expand our market into the adult training area. The students upon completion have a really impressive certificate exam pass rate of 89%. And I should mention that MedCerts doesn't provide the certification testing. They provide the training up to the certification readiness, and students go out and take the certifications from third-party certifiers. They focus both on consumer and enterprise-level training, and they recruit through a number of channels, including direct to consumer, adult learning centers, and also the military. The organization has a number of programs, and we mentioned them before.
You see some listed here. Let me just also mention at this point that all of these programs that they offer lead to an industry-recognized certification. They offer a number of programs, and the tuition ranges from about $1,300-$6,000 per program, and the programs run between 3- 6 months in total. They're not Title IV eligible programs. They really focus on the shorter-term entry-level programs that provide a job that can then be stacked with different types of experiences leading up to other types of. Are for the full-time program that adults would take. I should mention at this point that there would be no incremental costs to our high school students who are taking MedCerts content while they're in high school. Here's a sample pathway on the general health side.
So similar to IT, MedCerts allows us to add high school-appropriate level industry content, which increases, again, the student earning potential upon graduation and thereafter. Students will have the opportunity to extend their training and stack experiences toward nursing or other higher-paying careers over time. And again, the more structured path, in addition to project-based learning, that industry exposure through Nepris and work-based learning experiences strengthen the student career development. So the addition of MedCerts and the other companies I mentioned really do accelerate our content development and content acquisition timelines. We have a developing strategic partner ecosystem that allows for mutually beneficial partnering. On one side, we have corporate partners and education partners that help advise us on what the curriculum should be. How do we keep it real and up to date? How do we advise our students to negotiate the new marketplace, the new workplace?
That all comes from having career advisors on the corporate side who can help us stay current. In addition, they provide job shadowing and intern opportunities to many of our students. Now, on the other side, we are introducing students to many companies and higher education institutions at early ages and providing a potential pipeline for future employees and college-level students. And so that mutually beneficial partnership opportunity is very important to the company. A combination of local partners around each school, as you saw in the project-based learning video, and national partners creates a wide network of opportunities for us. During COVID, interestingly, we turned to the Nepris platform and to the Tallo platform to facilitate connecting students to industry virtually, and we'll continue to do that at very high rates.
Because of those two platforms, we can say to every one of our 30,000 Career Learning students today that you have an opportunity to talk directly to an industry professional to learn about what they do on a daily basis, the path they took to their career, and what equates to success, and not just rely on a high school teacher who's doing their best job to teach or a counselor who's advising students every single day, but to talk directly to industry. Developing a variety of outside partnerships is very important to this program's long-term success. So what does all this mean? We have a unique opportunity to continue to grow our middle school and high school programs through the Destinations Career Academies, and that's done by building quality, strengthening our marketing, and expanding our future capacity.
We have a compelling opportunity to expand the adult learning businesses as standalone entities by leveraging Stride marketing and enrollment resources, and we also have an opportunity to productize our high school Career Learning program and sell to school districts and other agencies. We will continue to source potential acquisitions down the road that both strengthen existing programs and also expand our market reach, but in the short term, we're going to focus on the three acquisitions we've made recently to make sure they really do what we intend them to do in opening our market and also strengthening our programs, so in summary, we've created a line of business that expands our current market reach. It's got a compelling value proposition, and it gives us significant growth potential moving forward.
And so what I'll leave you with today is that it is a very exciting time for Career Learning in America. The secular trends that we're seeing are expanding our addressable market. The diversified career portfolio we've built and that we continue to build strengthens this line of business opportunity, and it all adds up to positioning the company for sustained long-term growth. So thank you for your time today. At this point, I'll turn the time over to Harsh Patel, the CEO of Galvanize. And I believe Harsh will be joining us via Zoom. Harsh?
Thanks, Shaun. Can you hear me okay? Say something similar about the Galvanize team. The collection of folks that are on the Galvanize team have been in this industry since the birth of it.
This coding bootcamp industry, this modern version of it, was birthed in 2012, and the folks on our management team were all founders and executives at these code schools all the way back then. One other thing that Nate mentioned about Stride and what really got us excited about working with Stride in the acquisition about a year ago was that the Stride team really got it. I believe education is a lot about Career Learning, and Stride and K-12 were the only companies that really, from my perspective, understood that perspective and wanted to build behind it. I'm all about getting people jobs. Galvanize is all about getting people jobs, and K-12 and Stride understand that as we build our Career Learning business. Next slide, please. Let's talk about the few highlights that I'm going to mention. There's four.
The first is that I believe that as Galvanize and with Tech Elevator now, we're the leading provider of workforce training solutions. We have over 8,000 alumni of our programs. We've worked with over 3,000 individuals within corporations that we've upskilled, and we're, in my opinion, just getting started with it. Number two highlight is that I believe we have a strong consumer education business, and I'll touch more on that in a bit. It's up double-digit % year over year. It's in 10 locations across the United States with three online programs. And believe it or not, we even launched two in-person locations in the last nine months, even amidst the backdrop of COVID because of the demand in these locations for what we do.
The third highlight is that we have a large and expanding market opportunity in two areas in particular, in addition to the consumer business, and that's enterprise training and military training. The tailwinds here are significant, and I'll talk about them in a little bit. Enterprises are moving away from paper to digital. They've been doing it for years, and the latest effort is all in bringing in talent that can help them do that themselves when we enable that. And in the military, we've run a few pilot programs of the military earlier this year, and every single one of them are expanding throughout the Department of Defense. And the fourth highlight is I believe we're well positioned in the big tech markets today. And with today's news of Tech Elevator, we're now positioned for growth in many of the smaller markets across the country as well.
And all of that just enables us to continue to scale. And as we scale, we'll see expanded margins as well. Next slide, please. So I'm going to give a little brief about Galvanize for the investors that may not be familiar or maybe just be getting familiar now. There's four core sections of the Galvanize business. There's consumer education, enterprise training, military training, and membership or coworking. The first three are the majority where I'm going to spend my time on today. Just wanted to give this as a context for folks when I say words like consumer education or enterprise or military. For consumer education in particular, I'm talking about the full-time in-person and remote programs, as well as the part-time programs we run online, the traditional coding bootcamps. That's what the consumer education business is.
Enterprise training is really our upskilling and reskilling for corporations that are looking for upskilling their talent, and military training is our exclusive focus on the military to help a lot of the different branches upskill their own talent. Next slide, please. So looking at the tailwinds that I mentioned earlier, if you look over to the right in blue, the tailwinds are just fantastic, and frankly, they're just getting bigger as the days go on. The tailwinds on the consumer business, bear with me with an analogy. I believe on the consumer side, we're selling shovels during a gold rush, and the gold rush is technology, and we have schools that help people learn how to mine during this gold rush, and as we all know from at least the last 10, 15 years, and with the advent of AI, that tech gold rush is not stopping anytime soon.
At the same time, employers and consumers are increasing their acceptance of alternative training models compared to traditional higher education. Some of you might know Google recently famously removed higher education from all of their job requirements for software engineering and data science. And so these tailwinds are really just fueling the demand and growth within Galvanize. And then on the enterprise front, firms want to bring digital transformation in-house. They want to upskill their own workers. They want to retrain their workers. And they want to hire talent that already knows the data science and software engineering tools and technologies that are being used today. And our job is to enable them to do that. And again, that's a very, very strong tailwind that's really helping us. All that is to say, the tailwinds, in my opinion, are just fantastic for Galvanize and Stride, particularly in this area.
Next slide, please. Let's talk about, amidst these tailwinds, what are the advantages that we have that are going to drive success relative to other people, let's say. I think the number one advantage is our strong brand and alumni network. Don't just take my word for it. Go to LinkedIn, search for Galvanize, search for Hack Reactor, and you'll see thousands and thousands of alumni working at big tech companies who got their education from us, and go to Google. Go search. What coding school should I go to? And you'll inevitably find yourself at, yeah, Hack Reactor or Galvanize. That's where you should go if you're in the big markets and you're looking to get into tech. So I think that alumni network and that strong brand is the driving fuel behind everything that we do, and next is why that network is strong.
And it's because of the career service and guidance programs that we run. And I think we succeed wholeheartedly because of this one thing that we do really well. Think back to your own undergraduate or even graduate programs. Do you remember the name of your career coach? Most likely not. Did you even have one? You may not even know. I'd venture to say 99% of us never even stepped foot into the career services department in high school or in undergrad or in graduate degrees. And one of the biggest problems, I believe, is that as an adult, you don't learn how to get a job. No one is out there teaching you what you need to do to go get a job in any of your traditional education programs out there. And we do it really differently.
One example I'll give you to drive that home is think of it this way. As soon as one of our graduates gets a job, the first person they text is their career coach. They know their career coach from day one, and that career coach is in their corner. That just goes to show the strength of that relationship with the career coach, which is what I believe is the driving force behind people getting jobs and our outcomes. Next is a competitive advantage that we built internally. It's a technology platform that powers all of our learning and all of our education. It's tailor-made for bootcamp-style education. Whether it's an internal bootcamp at another company or our own bootcamps, we've built this software that helps companies stand up their own bootcamp programs. It's the same platform that we use to teach our students.
That platform has this nationwide reach, which I believe is another competitive advantage. It has the capabilities for, say, someone in San Francisco to write a new piece of curriculum that gets deployed to our students in New York City. Or an enterprise client, we write tailor-made curriculum for them, and all of a sudden, our military clients can use that same curriculum because of this platform. As you can imagine, all of those advantages, in my opinion, are what drive the scalability and repeatability of the business model. We're then able to expand from one location to 10 and more over time with high quality because of these platforms that we've built. Next slide. Let's focus on that second highlight that I talked about, a really strong consumer education program. There's a little bit of background.
On this slide, you'll see the locations that Galvanize is in today. And you'll notice that places like New York, Seattle, San Francisco were positioned in America's tech centers. We've built ourselves around the tech centers. The growth that we're seeing has so far been all around these tech centers. Eight years ago, we only had one location. It was San Francisco. And today, we have these 10 locations. We've learned to scale this model, and we've learned to repeat it in new markets. And this is just the consumer education program for our in-person programs. Next slide, please. Let's talk about remote as well. Our strong consumer education program is also driven by this remote program that we've been operating since 2013. To my knowledge, we were the first live online coding bootcamp back in 2013, and we've just improved on it since. And this isn't a synchronous delivery.
It's similar to a live Zoom call like this one that you're seeing. And I'm sure to nobody's surprise, our remote programs have grown almost three times just in this past year. And the additional benefit to that is even our in-person programs have grown during COVID. We operate both in a live online capacity right now, but we're seeing demand both for in-person programs and online programs as a result of COVID. And we don't see that going away. And I believe it's not actually because of needing to be remote, but we're seeing that people want to be reskilled, and they want to be reskilled into these technology jobs of today and tomorrow. Let's go to the next slide. So let's look at our overall impact with this consumer education part of the business. So far, over 2,250 companies have hired our graduates.
When you think about the technologies that we use on a daily basis, your Apple device, your PC device, whether it's a Dell machine, an Apple machine, your cars, the Zoom call, and a lot of the technology that we use on a day-to-day basis, we have graduates that worked on those platforms as a result. It's quite incredible to imagine. But they're at those companies writing software that we use on a daily basis. And over 2,000 companies have hired our graduates. And that includes about half of the Fortune 100 companies have hired our graduates. And we were one of the first data science, JavaScript, and remote bootcamps out there. And as a result, we have over 8,000 graduates working at tech companies all across the country and all across the world.
And to be honest, these numbers are just going to look small in about five years because at our scale today even, we're graduating over 1,000 students per year and just accelerating that ramp while they're getting jobs. So that was the second highlight. Let's talk about the third highlight, the large and expanding market opportunities. Next slide, please. And we're first going to start with enterprise training as one of the two large and expanding market opportunities. As everyone is likely aware, there's a digitization going on with enterprises across the entire world today. You'll notice our clients on the right-hand side. That's just one example of the type of companies that we have actually worked with and continue to work with. They span all sorts of industries, and they're all moving from paper to digital. And that started many years ago.
What they're doing these days is they are hiring talent. They are reskilling talent so that they can do that transition from paper to digital in-house. And then they can retain that talent and go forward. And that's what we just enable them to do that. We enable enterprises to pivot their skills into technology. And we do it with these four products today. And as every month goes by and we work with more clients, we learn that there are additional products that multiple clients are interested in. We have something called talent development courses, and that helps us upskill existing talent that companies might have. We run executive workshops for executives that are not used to technology because that's where it has to start. It has to start with those executives, and then the rest of the organization follows.
We have a product called Talent as a Service where we will handpick and hand-find talent for enterprises that are looking for it and then train them and onboard them. And last, the Learn platform. It's that technology platform that I mentioned earlier that helps us scale all of this across the country and across the world because a lot of our clients are outside of the United States. Let's go to the next slide. So the second large and expanding market opportunity that we have seen is military. And let me talk about how this came about. About a year ago, we had just started kicking off pilot programs with some of these agencies, with the Air Force, with the Space Force, with the Department of Defense. And over the last nine months in particular, all of those pilots have expanded.
We are continuing to see an expansion of our services within the military. There's two ways we do this. First is we actually put our training programs on-site at various military posts throughout the country. The first one we did this with is with Fort Hood near Austin, Texas. We help soldiers in their last six months of service. They will come to a Galvanize program, reskill into engineers, and then get jobs as engineers as they transition to civilian life. The second model that we use is technical training within the military. We go into the Air Force and train airmen on how to write software internally so then those airmen can write software for the military rather than having external agencies or contractors working on writing mission-critical software.
And so today, we're working with the Air Force, the Space Force, and the Navy, and we're just expanding those into all of their branches. It's really quite exciting. I'm really excited about this particular session and telling you more about it next time. Next slide. So what does this all mean? I mentioned a lot of great tailwinds. I've mentioned how on the consumer enterprise and military parts of the business, we're seeing a lot of really exciting stuff. And I'm just going to talk about one of the few things from each of these businesses that are going to really drive our growth. First, let's talk about enterprise and military. I'll save consumer for later because we're going to talk about Tech Elevator.
So if we're talking about enterprise and military, our growth strategy here, and I'll share an example of it because I think that'll really drive the point home. Think about it this way. Say one of our graduates gets a job at JPMorgan Chase. And lo and behold, we do have many, many graduates at JPMorgan Chase. Five years later in their career, they're now an engineering leader within JPMorgan Chase. And they're faced with the challenge of training up their entire engineering base. Where are they going to go to train up all these people? Well, we're the first phone call that they make. They'll come back to us and say, "Hey, we learned a lot of great stuff when we were at Galvanize and Hack Reactor. Can you guys do that for my organization?
Because I'm trying to train up 50 engineers to learn these modern technologies." And so that's how we expand our enterprise growth opportunities, and that's how we accelerate them. Military, we just talked about, but we are expanding. Literally, every single pilot that we've done with the military in the last year is now expanding. So I'm really excited to share what that growth looks like in the future. Let's talk about consumer education now. And again, I'll just spend time talking about one of the strategies for accelerating growth, which is this Tech Elevator acquisition. Next slide, please. Let me give you some background on Tech Elevator. The primary differentiator between Galvanize and Tech Elevator is that Tech Elevator focuses on students who are new to programming. Maybe they haven't written a line of code before.
When you look at the outcome statistics, they are the best in the industry at training people who have never written code before. They have a 95% graduation rate. 94% of their graduates are hired within six months. The average time to hire is only 24 days after graduation. These incredibly high placement rates are our commitment to high quality while expanding our total addressable market into people who have never written a line of code before. Tech Elevator is about a 75-person team based out of Ohio. As you can see on the slide, they've got campuses throughout Ohio, Michigan, Pennsylvania. They're really in these smaller markets throughout the country. That's just a little bit of background on Tech Elevator. Let's go to the next slide. I'll tell you about why this is such a great acquisition from my perspective.
Here on this slide, you'll see this data table. On the left-hand side, you'll see a map of locations. Orange is where Galvanize has locations today. Blue is where Tech Elevator has locations today. In the orange, you'll notice it's in big tech centers. The type of learner in these locations in orange is an advanced beginner, someone who has some familiarity with code already. I believe as Galvanize, we do an exceptional job of training those people to get $100,000 jobs as engineers and data scientists. If you look in the blue, they're not in big tech markets. The blue Tech Elevator locations are in smaller cities, smaller markets where people may not have tech experience, and therefore, they're starting from scratch.
And Tech Elevator does an exceptional job at taking someone who's never written a line of code before and with a high degree of probability of the high placement rate, getting them a job at the $60,000 a year salary range. And so you can imagine five years from now, there's going to be a lot of blue on the map almost in every single state, most likely, as Tech Elevator expands into these smaller markets. And we're now going to be able to address this market of people who've never written a line of code. And as Shaun mentioned in his last presentation, with the students in the Destinations Career Academies, many of them have never written a line of code before.
And we believe that Tech Elevator is going to be a really strong way for them to get upskilled and land jobs at the $60,000 a year range, which is a fantastic outcome, especially for high school grad. Let's go to the next slide. So bringing it all back together, these are the four highlights that I just talked about. I'm happy to answer any of those questions during the Q&A that you might have had. But hopefully, you heard why we're so excited about Tech Elevator in particular and why we believe it fits right into this puzzle of expanding career opportunities for high schoolers as we build this Career Learning business as part of Stride.
So we're thrilled about it, and we couldn't be more excited to have Tech Elevator and start to tackle and address this gigantic market of people who have never written a line of code before. And with that, I'll hand it back over to Mike before we take a break.
Thanks, Harsh. We are going to take our third and final break. So again, please enjoy our video clips. If you have a question, please submit through the website, and we'll see you back here in five minutes.
Veronica Palmer is a sophomore at Destinations Career Academy.
I am in our healthcare career pathway, studying to become a nurse.
She's wanted to be a nurse for a while, but all of this shows her why.
It's just making me stronger in what I want to do, really. Seeing all these nurses kind of putting their lives on the line and working these really long hours just kind of makes me excited to go into nursing.
She's learned a lot in her path so far, including basic intubation, something essential as part of the battle against COVID, but just a small part of the job nurses do.
Casper now attends school virtually at Destinations Career Academy of Wisconsin. Here, he's been able to follow his passion.
I got into computers from the first time I got my own computer. I would take it apart and put it back together, and I would start programming for it.
In the last six years, he's taken more classes in programming and IT.
Aurora is graduating a year early from Idaho Technical Career Academy with 18 college credits to fast-track her future career in psychology.
I just love the fact that I can go out and start college earlier because I've always wanted to start my career.
That she's graduating out of 11th grade is pretty amazing, especially with this technical pathway of the pharmacy tech program that we have.
For some Utah students, a traditional classroom just is not a good fit. That's why Utah Virtual Academy wants to fill in that gap.
Some choose to go because of a complicated health or family situation, and some just like the option of a faster, more self-directed learning model.
Benjamin Voisin is a typical sixth grader in Lafayette, except he has Asperger's and ADHD.
We wanted something that would fit him better.
That's when they heard about Louisiana Virtual Charter Academy.
Online public school allows eight-year-old Nathaniel Hernandez the autonomy he needs to be successful from the comfort of his own home. His ADHD and speech difficulties have made it hard for him to perform well in a normal classroom.
With WAVA, it's so flexible. We're able to do it at our own pace, so you don't feel alone. You feel like there's the support right there by the teachers helping us through the lessons, and when we feel like we need to take a break, we go and walk.
Now, families have the option to do schooling from home.
Wisconsin Virtual Academy and the Destinations Career Academy of Wisconsin are two options in the state.
Zoe Garcia is a junior headed for a career in business technologies. At 16, she's already taking college classes.
I want to be able to be ready for the career that I want to have.
UTVA is an online public school completely free for students.
You get to broaden your spectrum. You get to meet students from all over the state. It's really great.
She may be small, but she works hard for her dreams, all while keeping up with school through an online program.
We're in the gym five days a week, Monday through Friday. We really appreciate the Virginia Virtual Academy. It gives her the flexibility and time schedule to come in and train when she needs to.
Access to the online school has made a difference in their lives.
Virginia Virtual Academy is giving her the foundation for college and being prepared for life in the future.
The college process has always been challenging to get that right fit. When you can't go visit colleges now and you don't have those opportunities.
I've had messages from colleges offering me different programs and telling me about things that I might be interested in. Colleges can come to me and ask me to come to their university.
Class is in session on sixth grade Trevor's kitchen table and in his seventh grade big brother Dustin's bedroom. The two go to an online public school called Washington Virtual Academy. Live classes taught by state-certified teachers. Mom Connie Krestel cites school safety as one of her main reasons.
Welcome back. It's my pleasure to introduce our next speaker, our CFO, Mr. Tim Medina.
Thanks, Mike. Thank you all for being here today to hear the Stride story. It's a great pleasure to present the financial overview and the outlook. Now, it's always hard going last. So if you have a cup of coffee nearby or want to do a jumping jack or do a stretch, whatever you need, because it really is a great pleasure today to wrap up the presentations for this great team. Now, with nearly 25 years as a CFO in telecom and IT services companies with disruptive technologies and in new markets, I know what a great team this is.
And thanks to Nate and the rest of the executive team for making me feel right at home, bringing me up to speed, and making it possible for me to contribute in spite of joining a new team during COVID, a new industry, a new business in the midst of COVID. Now, in my seven months here, I've observed so many strengths. This is a company with a special mission at a special time. And that's even before COVID and especially since then. It's filled with terrific people up and down the company, up and down the organization. We have disciplined, world-class leadership expertise and a great board of directors. The company's also in the midst of successfully executing a growth strategy into Career Learning, a new market. That's not easy to do. And when I got here, the company was doing such a great job with that.
I also like the balance sheet. It's a great balance sheet and a great strength of the company. Now, even though I'm new, I am finding ways to get hands-on. Let me just mention a few of those things. Now, when I joined in April, I inherited a great financial team. At the same time, I prioritized adding some key leadership to that team to make it even stronger, especially in the area of controller, treasury, and investor relations. In August, I recommended and led the seven-year convertible bond financing that brought in $350 million of cash at a very low cost to the company. Also, in August, Nate asked me to lead a multi-departmental task force to step up our game in ESG. He spoke so well about that earlier today. We're going to turn that around real quickly.
Also, in October, many of you have seen we began a new line of revenue reporting, transitioning our reporting from a product-oriented approach to an approach that reports our revenue based on the markets we're addressing. It makes our business much easier to understand for investors and others, and also easier to track our performance against that strategy. And of course, you've heard about the acquisitions we've made in the last day and throughout today. And I've been very hands-on in those acquisitions from the diligence and valuation standpoint, as well as acquisitions that we decided to pass on. Now, over the next 15 minutes or so, I will demonstrate the financial highlights and the substance behind these financial highlights. Now, the way I think about this slide is, first of all, we have a very solid financial foundation built on a steady performance, a long track record.
That leads into this year and very strong guidance that you have seen. Then the fifth item there is our compelling financial targets, where we're going. In between there is really a lot of the substance. We have a sustainable business model with high visibility to revenue growth and improving margins. We have all the resources necessary to be a great success going forward. That includes a strong balance sheet as well as the human capital and leadership that you've seen demonstrated today. We also have a disciplined, strategic approach to capital allocation, prioritizing free cash flow sustainability, development of our technological platform, and synergistic M&A. All of this adds up to us having a clear path to enhanced financial performance. That's what I'll get into now. Stride has a long track record of revenue growth, profitability, and free cash flow.
Year in and year out, we have been delivering positive results. Now, this is where we're starting at with our most recent fiscal year results, surpassing $1 billion in revenue, a 33% gross margin, a 12% Adjusted EBITDA margin, and completing our eighth straight year of positive free cash flow. These are all pretty good numbers. Now, where we're going is all of these numbers are going to get much better. And I'm going to tell you more about that and how that's going to happen. Now, our sustainable business model begins with enrollments. Enrollments drive 88% of the revenue in the company. Now, the national size of the K-12 population in the United States is 55-56 million, and growing about 0.5%. At Stride, our general education growth rate has been much stronger than that.
In fact, in FY20, we would have grown about 8% had we not lost a large school, which is the first large school we've lost in our 20-year history. Career Learning is in the early stages of growth. It has nearly doubled every year since we've launched it, in some cases, much more than that. The Career Learning growth is driven by retaining students, ramping up enrollments in existing schools, and adding new schools. Now, we started with six Career Prep schools in FY17. As you heard Nate speak and Shaun, we have about 30 programs today. We expect to add more schools each year. Our innovation and differentiation in Career Learning positions us to continue to increase our market penetration into the future with growth rates that are very high. Now, with that sustainable growth in enrollments, we have consistent revenue growth.
I won't repeat the market sizes, but as you've heard today, there are large markets and growing markets. Now, in FY20, our general education business was about $930 million, and we expect that to grow more than 30% this year to exceed $1.2 billion. Our Career Learning revenue was about $107 million last year, and that's projected to grow more than 100% this year to get to the midpoint of our guidance. Now, it's important to note when we talk about visibility, we have that track record and that consistent performance, but we also operate in a business that has very high barriers to entry. This business requires investments in learning platforms and curriculum and teachers, as you heard James speak about. It requires frequent curriculum updates across more than 30 states, administrative infrastructure, experience working with regulators and school boards, as Kevin Chavous spoke to.
It requires major working capital. So these barriers to entry enhance the visibility of our forecast. Now, I realize everyone wants to know what will happen to our enrollments when there's a vaccine. The truth is, we really don't know exactly what will happen. But here's how we see it right now. We believe that we have a good estimate of this year, and we feel very good about delivering the results to beat our guidance. We're focused primarily on giving great service to our students and our parents because that's the key to our FY22 is retention, in addition to Career Learning and growth in the adult learning space, as you've seen. Now, Stride has a track record of steadily expanding our margins in addition to the revenue growth.
That steady revenue growth and cost containment has resulted in 100 basis points of improvement each of the past several years, and the nearly doubling of our Adjusted Operating Income in our FY21 guidance reflects the additional operating leverage potential at Stride. We feel like we'll hit or exceed the upper end of the range on the margin of improving by 200 basis points. We also have a long track record of EBITDA performance and free cash flow growth. Now, except for timing in FY20, FY21 would be the fourth year in a row of free cash flow expansion. FY20 had a substantial amount of working capital timing issues, some that pulled cash favorably into FY19 and others that pushed cash into FY21. K-12 also has a strong balance sheet and strong liquidity.
This gives us the operating and strategic flexibility to succeed during strong and weak business cycles. We believe we have the strongest balance sheet and cash flow in our peer group. We are building upon this strength to deliver a higher growth, higher margin future. So while our name is changing, we'll still continue to have a conservative approach to balance sheet management. Now, likewise, Stride has a strategic, disciplined approach to capital allocation. We will invest organically to keep our core general education business strong, high quality, and differentiated. We also are investing financial and human capital to make our business stronger and more flexible by growing into categories that have higher margins while at the same time maintaining a strong balance sheet.
We have the capital to acquire businesses that align to our Career Learning strategy to build out key career pathways faster than we could do on our own. And that is why we have maintained a strong balance sheet, and now is the time to use that. Now, over the five-year view of our financial targets, we do generate substantial excess cash flow. And so we will, with more time, evaluate approaches to return cash to shareholders over the longer term, be that a dividend policy or a stock repurchase program. Now, we're targeting acquisitions that accelerate our Career Learning growth strategy. And that provides substantial revenue synergy potential. We're buying high-quality, high-performing businesses that provide curriculum and content that we can pull down into our Destinations Career Academies. And this helps drive retention and new enrollments in these middle and high school programs.
Stride is one of the very few companies offering virtual Career Learning on a full-time basis to middle and high school students, and we want to continue to make that a more differentiated and stronger, innovative platform for growth. So these acquisitions, they deepen our differentiation in the DCAs, but they also help lower our costs, and Stride, we also have capabilities that can help those businesses grow faster and more profitably than they would have on their own, so we get revenue and cost synergies in both directions. Now, let me just talk a little bit more about these two acquisitions. These are two very well-positioned targets. They're performing very well on their own in spite of COVID, and I think that's a very important aspect that we considered when we compared them to other companies.
We expect to create substantial value for the Stride shareholder through synergy and with the addition of the great human capital that we're adding to make us a more innovative growth company. So again, as I mentioned, we expect to grow faster and more profitably on a combined basis than these Tech Elevator, MedCerts, or Stride would have on their own. Now, let me spend a minute talking about the kinds of synergies we expect to get from Tech Elevator. You've heard me mention and Shaun mention as well that we will bring Tech Elevator's content into the high school level. And that will help from a cost standpoint in terms of our content. And more importantly, that'll drive retention for those students that are really interested in pursuing IT or computer science. We'll retain more of those students. It also is a magnet to drive new enrollments.
We also can sell Tech Elevator to Galvanize's existing lead funnel for those people that don't qualify for Galvanize's higher-end program, as you heard Harsh talk about it. There's many other examples of synergies, but I'll just stop right there, and we can get into more perhaps later during Q&A. We also are very excited about MedCerts. So let me get on to those synergies too for a minute. We're adding new healthcare certification pathways that we don't have today. We're also upgrading and replacing healthcare content that we use today and that we pay third parties for. These new and improved offerings will drive, again, higher retention and higher enrollments in our DCAs. It is a long list of benefits that we'll get from these acquisitions. And their financial contributions will become more significant as they grow and as we realize these synergies.
We are adjusting our revenue guidance upward for these acquisitions. Before purchase accounting impacts, the revenue combined for about six months, what we expect is $16-$19 million of combined revenue. Now, to purchase accounting, that'll be about $12-$15 million. So again, that first-year impact on revenue is small due to owning them for a half a year and then further reduced by the purchase accounting of deferred revenue. Now, ignoring purchase accounting, these businesses are accretive to AOI and adjusted EBITDA. And importantly, they are both free cash flow positive. So no change in AOI, no change in capital expenditures, no change in tax rate guidance. Now, hang in there with me. Just a couple more slides. And I want to let you know I'm getting near the end here.
But off of the strong FY21 baseline, let me just remind everyone. We just reported a record Q1 and provided very strong FY21 guidance. So these forecasts are off of that strong baseline. Now, on the left side are the key drivers and assumptions. And you've heard about those today. We project a revenue CAGR of 6%-11% on a combined basis. And that's driven off using the midpoint of guidance from FY21 to the midpoint of FY25. That's driven off of more than 30% annual growth rate expectations from Career Learning and low single-digit growth in general education. Again, all of that is off of this strong FY21 baseline. And driven by this growth performance, we expect our profitability and free cash flow to grow two or three times the rate of revenue growth. Now, I mentioned earlier that growth in Career Learning drives higher margins.
Now, let me spend a couple of minutes on this. So gross margin is expected to expand 300 to 600 basis points due to investments and automation and process improvements. These contribute both higher revenue capture and lower cost. And some of those are listed here on the left. We also project lower curriculum investment as a percent of revenue due to scale and M&A. Lower material costs as a percent of revenue as a result of a digital-first strategy that's well underway. Fourthly, significantly higher gross margin that we earn from adult learning revenue. Now, as you saw, Tech Elevator has a gross margin in excess of 50%, and MedCerts is over 80%. So as we grow in those categories, that'll deliver more gross profit and more bottom-line income and free cash flow.
And then lastly, the scale of growing our business on the SG&A structure allows us to project a doubling of our Adjusted EBITDA margin over the next five years. Now, this all flows through to higher free cash flow for the business and on a per-share basis. Now, I hope you can see these are very exciting times at Stride. The truth is, the stock price performance has been hard for all of us to watch. We are disappointed. I will not pretend to completely understand it. But we also are not easily distracted. We're very focused on making the right moves to grow the intrinsic value of the enterprise. We're confident this focus will pay off in public equity valuation in the future.
So just to wrap up, as mentioned at the onset, and I hope these past few minutes and today as a whole has helped highlight these key messages. Stride has a solid foundation. We have visibility on a clear path to sustained revenue growth and significantly improved margins. We have the know-how and all the resources to make this happen. New markets are driving our growth, margin expansion, and capital allocation priorities. And all of that adds up to a very attractive set of financial targets. Now, thanks again. And let me hand the floor back to Nate.
Thank you, Tim. And by the way, this is not a dickey on my neck. This is a mask. So we're all wearing masks today. I appreciate everybody spending a lot of time with us today. It's been a long meeting. We're going to get the Q&A here in a minute.
I only want to remind you that there were three things I set out as objectives in the very beginning. Objective number one, I wanted to make sure you understood the base business and the economics and the operations, how it works, because we do get that question a lot. Tell me about how this online thing works. The second thing I wanted you to understand was the growth in Career Learning because that is our future strategy. It is all about, and the reason we've changed our name to Stride, the reason we've done the acquisitions, the reason we've created more content is we're about Career Learning, and that's going to generate a lot of our growth.
And the third item is I wanted you to understand who the management team was, some of which you met today as they spoke, others of which you will not have a chance to meet, but at least I talked about some of them on the page that I covered the management team. So I hope that you got all of those three things. Now we need about 60 seconds, and I'm going to invite my comrades to come on up to the seats that are around me. And we're going to move the podium out of the way. So if you give us just about 60 seconds, we'll be right back. Okay, we're back. As you can see, we're spread out a little bit here, social distancing, and ready for Q&A.
I'm going to start by reading a question, and I'll assign it to one of my peers here. And I think we also have Harsh on the line. And so Harsh will be able to answer some of those questions as well. Let me start first because we introduced this call today about Stride and the new name. I'm going to answer a question. The question is, "Nate, do you plan on integrating your acquisitions into the Stride name? And what's the go-to-market strategy?" We don't plan to initially include the acquisitions into the Stride name. And the reason is that each of these companies, including K-12, has a brand recognition. They have websites that recruit students and explain who they are. To try to use Stride as the basis for bringing on new students would, I think, cause disruption in our marketing efforts.
And so we don't want to do that. What we want to do is phase this in. Stride will be the name that we use to talk about our ESG efforts, our corporate entities, our management team, our partnerships, our investor relations. And so Stride will be the company name that we use for those things. Over time, we will then migrate various brands into the Stride network. Right off the bat, we may use Stride Learning Solutions or Stride Career Academies. But K-12 will remain the name and the brand for many of the schools that we assist. In addition, Galvanize has a well-recognized name. So does Hack Reactor in the IT world, the software development world. The same is true with MedCerts. They have a brand recognition that we don't want to step on. So we want to use those brands and use them over time.
You might see a tagline that says, "Galvanize, a Stride company," or, "MedCerts, a Stride company." In over a couple of years, you may see us do the opposite that says, "Stride, the Galvanize segment or the Galvanize subsidiary." And then eventually, we may migrate into Stride for everything. But for now, Stride will not be taking over the brand names. So I wanted to make sure I answered that question. If I can move on to another question. I'm going to throw this one to Shaun. Shaun's question here is, "Career learning space is very crowded and getting more crowded by the day. How can you compete?" Shaun?
Thanks, Nate. We've got a growth strategy for Career Learning that I outlined in the presentation. But let me just reiterate. The first part of that strategy is to continue to leverage the Stride network.
We have a national footprint today of 30-plus states. We're operating in almost all of those states. But the goal is to continually leverage current Stride states and schools and add Career Learning programs to those schools. We're currently a market leader in that regard and will continue to go that way. There are also barriers to entry, as Tim mentioned in his closing remarks. And so we feel that that growth rate will continue. Secondly, the adult training programs that we have are very focused on short-term training in high-demand fields that have large openings for the numbers of employees in healthcare and IT. And those skills gaps are, for the foreseeable future, continuing to be wide. And so our goal is to fill those gaps in the training at those particular businesses.
Thirdly, I would say that the acquisitions also give us an opportunity to boost our high school opportunities, to add parts of content and industry contacts, up-to-date curricula that we can market to consumers and hopefully attract new students who otherwise would not have come to a virtual program in the past. And so the acquisitions will play a big role there. And then finally, I'll say that as we look at skills gap moving forward, all of the acquisitions on the high school side, etc., are focused on key areas of growth. And so there's no reason for us to think that our growth opportunity would diminish.
Thank you, Sh aun. The next question I'm going to throw to Harsh, who is actually on the line, located in Denver.
Harsh, on average, how long would it take and how much would it cost for a student with no coding background to move through the Tech Elevator programs and move into the Galvanize program and then finish it? Additionally, how would that change the earnings profile of that student as they look to find a job after Galvanize? Harsh?
Thanks, Nate. Thanks for the question. The question indicates something different than what our strategy is. So I'm going to talk about that briefly, and then I'll talk about the specific answer to the question. We believe that learners who don't have a background in programming can enter Tech Elevator on average in about a month from ever discovering Tech Elevator to enrolling into a program. Very quick way to enter the program, and the Tech Elevator from there is 14 weeks long.
After those 14 weeks, their average time to placement is another 24 days. Let's call it a month. So you've got a month on the front end and a month on the back and then 14 weeks in between. That would get you a job at roughly $60,000 a year. Now, you would not graduate from Tech Elevator, then go into Galvanize immediately afterwards. You would actually enter the marketplace and go get a job as a developer. You may, after a year or two in the marketplace, come back to a Galvanize professional development program to advance your skill set from there. But by design, it will not be take Tech Elevator, then take Galvanize, then enter the market. It's take Tech Elevator, enter the market. A different type of student, an advanced student that has programming experience may enter Galvanize and enter the market.
All right. Thank you, Harsh.
The cost of the programs? Harsh, did you cover the cost of the programs?
Great. I did not. The cost of Tech Elevator is slightly less than Galvanize. Galvanize is about $18,000 for tuition, and Tech Elevator is about $15,000 for tuition.
Okay. Thank you. I'm going to throw this next question to James. For the improvement in general education satisfaction and NPS scores since 2015, because we've shown significant improvement, what do you think have been the biggest drivers around that improvement? James.
Yeah, thanks, Nate. So we've got a few really important drivers, I think, of our improvements. And first and foremost, I think it comes down to really having a culture that Nate's really advocated for around our customers and really driving a culture within the organization that focuses on the experience within our customer base. And that goes all the way down.
I should mention the great leaders that run the schools that we help to manage. They're driving that same culture within the schools and programs that they run. The first, really, I think, is a cultural advancement, if you will, that we've made over the past few years that really focuses on quality, on the customer experience. The second thing I'd mention is we've invested in different technologies and programs to enhance that customer experience. Everything from specialized counselors and advisors to a customized mobile app that allows parents to understand sort of the progress of their kids. All these tools and technologies help enhance the customer experience. I'd say, lastly, that there's a lot more to come. You've seen improvements over the past few years, but I think we still have a long way to go.
We've got a lot more that we're going to invest behind to improve and enhance the culture of quality, enhance the customer experience, and continue to improve those scores.
Thank you, James. I want to reinforce something James said about culture. One of my pet peeves is when employees ask me, "I'd like you to tell me what the strategy of the company is. I want to understand the strategy." And that's after we've communicated multiple times what the company's strategy is. So I turn the question back around to employees and I say, "Well, tell me what you think the top three priorities are." Invariably, they say, "Well, I know we have to improve academic results. We have to focus on retention and customer experience, and we have to grow Career Learning." And I say, "So you do understand the strategy?" And they do.
And the reason I tell you that story is because it's ingrained in every person that our academic results are our top priority. Our retention and customer experience is a second priority, and growing Career Learning is the third. And everybody understands it. And that's why it's cultural that we've made these improvements in Net Promoter Score and improvements in customer satisfaction because we focus on every single thing, every single day that would improve those experiences, including putting a leader, a Senior Vice President named Karen Ghidotti, in charge of the customer experience every day. Thank you for the time on that question. Let's see. I'm going to move down to another Harsh question. Harsh.
Within IT adult learning, what more do you need to do on the enterprise side to drive, number one, increase hiring of your graduates by companies, and number two, more enterprises sending their employees to Galvanize or Tech Elevator for upskilling and reskilling? How do you go to market to do that?
Great question. There's two things that we actually recently started that hit both of those questions. The first one is increased hiring of graduates by companies. We just launched a learning or, I'm sorry, a talent solutions team within Galvanize that goes out to companies for their open job postings and matches our graduates with those companies. And so that's work on top of our already high placement rates. We just are maniacal about making sure our placement rates are really high. So we're adding that on top.
So that, I believe, over the next year will increase the hiring of graduates by companies. Number two, more enterprises sending their employees to Galvanize. We actually just launched a professional development program. It is a short-form program for engineers to take, rather than the long three-month Galvanize program. They can take a short-form program to upskill in one particular item. We actually believe that those programs will be one of the ways that enterprises get started with working with Galvanize. They may have a few engineers that take these professional development programs, and then they expand it to all of their engineers. So that's another initiative that we've just recently started that I believe is going to address the top of the second question.
Well, while we're talking to you, Harsh, I'm going to throw another question towards you.
On this one, I know that you're going to range it because you don't have the exact number, but I'd love to know your range. The question is, how much adult learning revenue is generated right now from military channels, and how big will it be by fiscal year 2025?
It's a great question. How much today? Let's put some time frames to it. You could be talking about FY20, or you could be talking about FY21. I'm going to say FY21. Roughly in the $5 million-$10 million range is what we're expecting, and we seem to be on track for that. Now, if you're talking about five years down the road, let me add a little bit of perspective to that question. We just started working with the military one year ago, and we just started our programs with Fort Hood one year ago.
And so if we're looking at that trajectory, it looks extremely promising in the five-year time frame. But it's too tough to put a number five years down the road on it. It's a really wide aperture. I do joke with our internal team that I think the Galvanize military programs are going to be the biggest part of Galvanize over the next several years if things go as they are. Does that answer the question, Nate?
Yeah, that answers the question. It's sort of like me telling Shaun that he's going to be the biggest part of Stride in five years, right, Shaun?
That's right.
So the next question is a question I think I should take myself.
The question is, and it's a long question, so I may not read it all, but based upon market reaction to your stock, to vaccine developments, it seems to imply that many think that the vaccine being broadly deployed could potentially drive a sizable reset in your business enrollments. Do you think the fears are overblown? And there's some other parts of the question which I'll talk about. So I do think the fears are overblown. I think that there have been some folks who have invested in this business and worried about this business because they thought the opportunity was all about COVID. We think COVID does increase the visibility for online, and we talked about that today. But it's not about online as a COVID response. It's about online as a way of educating kids, especially in Career Learning, as we've talked about a lot.
So I'm going to use some numbers. And these numbers are ranges, and please don't take these numbers as guidance. The lawyers are probably scared that I'm going to say something really silly here, but I'm going to give you just some ways of thinking about the problem. We had 195,000 students at the beginning of our count date, which is about the third day of October. Of those, about 30,000 were from Career Learning. So you take the Career Learning students out because they came for something. 95% of them came because they want to get Career Learning. And that's not something you do in one year. You're not running from COVID. You're running to something. So take them out. You're down at about 165,000.
Now, if you take out COVID also from the base, we're looking at somewhere in the neighborhood of 90,000-100,000 students that were in our base, meaning take the 30 out of the 195, it gets you 65. Take the 15 out of the low ones we had last year with 115, you're about 100. So that means we got about 65,000 incremental students that came from COVID. Our normal retention rate is well over 50% in the 60%-65% range. So now think about if it was worse than that. Let's say not 60%-65% stayed, but only 50% stayed or 45% stayed. Now you're talking about around 32,000, 30,000, 35,000, somewhere around that range who would leave us.
But if you grow the career readiness business, again, about double, if you take what our normal growth is, we normally grow 14,000, 15,000 students in a year. Between those two alone, we overtake the 30,000 that may go because of COVID. So we continue to believe that our business can be flat to up. I'm not sure what the exact growth numbers will be. As Tim said in his comments, I don't think anybody knows what's going to happen with COVID. I can't predict it, and I don't think anybody else can predict it. But we do see a path to growth after COVID based upon those things. And all of that, by the way, is before Tech Elevator, before Galvanize, before MedCerts, and before Learning Solutions. So if you add all of those components in to our natural growth, we do see a growth pattern afterwards.
Now, one last point. Let's suppose I'm wrong. Let's suppose we shrink a little bit in FY22. But I don't think we're going to shrink back to where we were in FY20. So the growth trajectory from FY19, '20, and then skip '21 and just go to '22 is still a growth trajectory. All of that before Tech Elevator, Galvanize, MedCerts, Learning Solutions, and retaining some of those students that came to us. So we're very bullish on what we can do, and I believe there's still opportunity here. So I do think those fears are overblown. If I can move to the next question. Let's see. I'm going to throw one to Tim.
Tim, I know you mentioned in your comments that GCA was the first time we'd lost a large school, and I know you excluded Agora from that because Agora, when they left us, continued to use our curriculum, and they continue to be a very large customer today. GCA is the first school that's ever gone completely away from us. Putting that in mind and looking at the trajectory, do you think 2025 financial targets include any additional M&A beyond the two announced this week, or are the targets based upon existing business only?
It's the latter part of the question. The multi-year plan there includes Galvanize, Tech Elevator, and MedCerts. I would say very conservatively, Tech Elevator and MedCerts, them being new. Those are in the numbers, and we do not assume additional M&A on top of that.
Other M&A use of the capital that we have would be on top of the growth that's in our presentation.
Thank you, Tim. While we're still talking to you, Tim, I'm going to throw one more question at you, all right? It's, can you provide profitability goals by segment? Will Career Learning be more profitable than General Education? What kind of margins are built into your projections?
That's a great question. We are not providing profitability or free cash flow guidance at a segment level. But what I will say is the short answer is yes, Career Learning has a higher margin. And that's really driven by two main factors. One is lower retention. I'm sorry, higher retention, lower withdrawal rate, I should say. And then secondly, the Adult Learning that has substantially higher margins.
So Nate, those are the two reasons why Career Learning does have a higher margin, although we're not going to break it out, at least for now.
Okay. Thank you, Tim. James, I'm going to come back to you here for a minute. Can you talk about the structure of the potential contingent consideration for MedCerts and frame the potential size of that additional payment in fiscal 2022 and beyond?
Yeah, thanks, Nate. So the MedCerts deal, first of all, I'll remind everybody that this is a company that, I think, as Tim indicated in his slides, is growing at over 30% a year top line, and is already very profitable. So from a gross margin standpoint, it'll continue to be, I think, very accretive for us.
The current structure is that there is a sort of a base fixed payment, if you will, and then the contingent consideration that this question is alluding to. The base consideration is $70 million. And again, I think that was reflected in Tim's slides. The contingent consideration at the current plan, it's contingent consideration because it's performance-based, and it really is variable depending on the performance. But at the current plan, the contingent consideration would be upwards of around $30 million extra dollars. However, that's predicated on the company continuing to grow at a 30-plus% rate through the 18-month contingent consideration period, as well as profitability doubling. So when you mix that in, if they did hit those goals, we would end up paying on a blended basis about an eight-times multiple of EBITDA on that future profitability stream.
So we think that we've structured the deal in a really smart way. It's going to be accretive. It's really going to help strategically our business in terms of Shaun's career business and the pathways that we refer to to get kids to certifications and real job trajectories. So while I think we think the financial structure is very compelling, we think the strategic structure is also very compelling.
Thank you, James. What's probably not clear is that James is responsible for the mergers and acquisitions work. So he has the corporate development function. And while Tim has the financial responsibility, James actually puts the deals together. Of course, James can't get any deal done without Tim. So it's really a teamwork thing. James, I'm going to stay on a question for you for a minute.
We've talked a lot about Tallo and a lot about Stride and our investments in those, but we haven't made it clear today the answer to this question. What is Stride's ownership percentage in Tallo and in Nepris?
Yeah, thanks, Nate. There are two really different strategic investments for us. I think, as Nate alluded to earlier, Tallo is a platform for us that is really part of Shaun's overall Career Learning system, if you will, and the ecosystem, and it really helps facilitate the connection of employers to students, and not just K-12 or Stride students, but sort of a broader marketplace. I think we mentioned that there's over 1 million students, 1 million learners on Tallo right now. Our initial strategic investment in that platform was a little over 40%. We structured it so that we actually hold some debt as well as some equity.
So a little bit more than 40% equity. The debt actually gives us. It's a convertible type debt that gives us a path to control. So while we own just about a little more than 40% today, we do have a path to control. We do think that's an asset that ultimately we will consider controlling and consolidating in. So we structured it in that way. Nepris is a little bit different. Still critical and key to the platform. It's integrated into the learning system. But Nepris is a little bit more of a partnership structure. Shaun gives them great guidance on product trajectory, gives them input on partnership opportunities. His team works closely with them. But we don't feel like it's important for us to own them outright.
So we made a 10% equity investment in them, and we don't currently see that we would sort of pursue a path to control. We're very happy with that partnership. They're a great partner. We work very closely with them. But we don't currently see the path that we would want to take control of them.
Thank you. Okay. Shaun, this question is for you. It's actually a two-part question, and I'm going to throw the second part to Kevin Chavous. Shaun, you're probably most equipped for part one and Kevin for part two. It looks like many of the programs that MedCerts provide were the ones that had trouble complying with Gainful Employment rules during the Obama administration and became ineligible for Title IV funding. What percentage of MedCerts' revenues comes from Title IV funding? And I'll leave the second part to Kevin.
Yeah. Thanks, Nate.
There are zero programs that take advantage of Title IV funds at MedCerts today. And so the rules around Gainful Employment don't come into effect here at all. And we expect that to be the case moving forward too.
All right. Well, you answered the second part, which I was going to throw to Kevin. And that is, are we at risk of losing funds if Gainful Employment rules are reimplemented under the Biden administration? And so, Kevin, I was going to ask you to talk about the Biden administration and their belief around education. I know you and I have met with members of the administration or pending administration. So what do you think they're thinking about Gainful E mployment?
Well, the truth is, President-elect Biden, throughout his career, has shown a tendency toward pragmatism.
He has never really ventured too far to the left, and he's often gone out of his way to open doors to conversations with leadership in Congress on the right. He has made it clear that he wants to heal, and in education, I think that particularly if the Republicans control part of the Senate or control the Senate, then you will see policies that reflect a more pragmatic view. He is going to invest in assisting states in growing and enhancing their online capacities. And he also wants to invest in Career Learning opportunities, so in spite of sort of the left-more-progressive views of the party, we expect the President Biden administration to be more open to choice options, particularly virtual learning options for citizens, and I think his policies will reflect that.
Thank you, Kevin. My last question is actually not a question from you.
It's a question from me to our moderators. Did we have any additional questions that came in? Have I covered them all? We're good. We're good. Okay. I'm getting the message from Mike Lawson that it's good. I'm going to do one last thing because we ended up with a little bit of time. I'm just going to ask everybody here on the virtual stage if you have any additional comments or things that you think weren't covered in questions that you want to cover. Tim, anything?
You got me on the spot there.
Okay. It's okay to say no.
I'll say no right now.
All right. Shaun, anything you want to add?
It was the most critical part of the business. I'm just kidding. I think we laid out our plan pretty clearly today. Thanks, Nate.
Okay. James, you want to add anything?
I would add, Nate, you talked a little bit about the Stride management team. I think we also announced a couple of acquisitions today. I think Nate and I have talked about this. Part of our philosophy around doing some of these deals is we're not just buying product. We're not just buying a company. We're also investing behind the management teams. The management teams that are at Tech Elevator and at MedCerts are really wonderful management teams that we're also investing behind. I think, as Nate mentioned, we're going to run those businesses sort of stand-alone. We're going to allow them to drive growth within their businesses. We really believe that those management teams, they have a history and track record of driving that growth and of building successful businesses. We believe they'll continue to do so.
So Tim mentioned that there's not a lot of growth projected in his financial plan for those, but I'm really bullish that those two acquisitions can drive even further growth, drive further synergies for Stride, and that they're going to be really successful deals for us.
Thank you, James. I'll turn to Tony Bennett. Tony, you have any closing comments?
Nate, about the only thing I would add is I think our country, educationally, is at a very critical time. Coming out of the pandemic, the change in administration, our social issues that are impacting us across the country. And I think our best days are ahead of us as we become the market leader, as we are the market leader, and extend that stride, so to speak. As the market leader, I think we're going to drive many of these conversations.
Our best days are ahead of us educationally.
Okay. Thank you, Tony. My last question I'll throw to Kevin Chavous. Anything you want to add to Kevin?
I want to follow up on what Tony said, Nate. People talk about the pandemic leading to a global reset. We clearly are going to see a reset and a pivot as it relates to education, educational services, and frankly, the parent-power aspect of educational services in a delivery system that won't be a monolithic system. There will be wholesale options for parents, and they're going to be looking for that. And this is a huge opportunity. They're going to look at virtual learning in a different way.
And the expertise that we have, that Stride has, to offer these services, not just in terms of our core business, but in terms of Career Learning opportunities, I think it's going to be wholly unique and wholly beneficial to the new American education model that will emerge as a result of this pandemic.
Harsh, the people on this stage know that you have a baby coming in a couple of weeks. And I'm happy to say that to everybody on this phone. We're happy for you, man. Listen, do you have anything else you're going to say before you leave? Because I know once you leave today, we're probably not going to see much of you because you're going to be taking care of that baby.
I'm all set. I appreciate it. And thanks for bearing with me over Zoom on this one. All right.
My final comments then would be that we are so proud to be Stride. We're so proud of the progress we've made. We're proud of where we are. And we think we have a great business going forward. I do appreciate every potential shareholder and every actual shareholder, every analyst on the sell side or buy side who spent time with us today and who spent time in other sessions. We will continue to work hard to deliver for our shareholders. That is our goal. But we also are focused on delivering for students because we are a mission-driven company. We focus on providing the best outcome for the students we can. That's who we are. And we balance that with providing the best outcome for shareholders that we can. So I'm glad you spent time with us today. And thanks, everybody, for the time you spent.