Cengage Learning Holdings II, Inc.

Greetings. Welcome to the Cengage Group's fourth quarter and full year 2024 year-end conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Richard Weiss, Treasurer at Cengage, you may begin.

Good morning, and welcome to Cengage Group's fiscal 2024 fourth quarter and full year investor update. Joining me on the call are Michael Hansen, Chief Executive Officer, and Bob Monroe, Chief Financial Officer. A copy of the slide presentation for today's call has been posted to the company's website at cengagegroup.com. forward slash investors. The following discussion contains forward-looking statements within the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified by words such as believe, expect, may, will, estimate, likely, and similar words and are neither historical facts nor assurances of future performance and relate to future results and events, and they are based on Cengage Group's current expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, and many of which are outside of our control. Many factors could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. You should consider such factors, many of which are subject to the risks and uncertainties discussed in the slide presentation, which accompanies this call, and in the risk factor section of our fiscal 2023 annual report for the year ended March 31st, 2023, as may be updated by our quarterly reports for fiscal 2024. The company's fiscal 2024 annual report will be posted shortly. Any forward-looking statement made in this presentation is based on currently available information. The company disclaims any obligation to publicly update or revise any forward-looking statements except as required by law. On today's call and in our slide presentation, we will refer to certain non-GAAP financial measures. Definitions and the rationale for using these measures and reconciliations of each to its most directly comparable gap financial measure are provided in the appendix to the slide presentation. I will now turn the call over to Michael for an update on the business, followed by Bob, who will take you through the fourth quarter and full of your details before we open the call for questions.

Michael? Good morning, everyone. Thank you for joining our fiscal year 2024 fourth quarter updates. I'm pleased to share that we delivered on our financial guidance, capping off another successful year for Cengage Group. Our track record of delivering on our financial goals is a testament to our predictable performance and provides a high level of confidence as we head into the new fiscal year. As we close fiscal 24, I'm pleased to report that we recorded a third consecutive year of mid single digit growth in revenues and double digit increase in profitability. Our adjusted cash revenue grew by 5% to 1.535 billion and adjusted cash EBITDA increased 10% to 461 million. We achieved a 30% EBITDA margin and our net leverage is now at three times a significant improvement over prior year's level. These results underline the power of our portfolio strategy and the resulting predictable and sustainable financial performance. Our three business units, Cengage Academic, Cengage Work, and Cengage Select, contributed to our strong growth with two important inflection points to note. First, in Singage Academic, our US higher ed business returned to growth with a 3% increase in adjusted cash revenues. This growth is driven by the consistent increase in digital sales, which have been growing by 6% to 7% for the past several years. As digital sales have grown significantly, Print sales as a percentage of total are now negligible. In further encouraging news, recent data from the National Clearinghouse shows that undergraduate enrollment grew by 2.5% in spring 24 year over year. This is the second consecutive semester of growth. Community college enrollment was up 4.7% year over year, These latest figures indicate a rebound in learners choosing two- and four-year degree options. Of particular interest is the rise in community college enrollments, especially in vocational programs where learners pursue education to gain employable skills. For Cengage Group, this data is further evidence that our strategy to provide education for employment, where our range of products and services continue to support the diverse needs of learners from middle school to graduate school and skills education. Second, Cengage work grew by an impressive 19% and generated 10 million in adjusted cash EBITDA. This business unit continues to scale and expand, increasing its contribution to our overall growth. Within Cengage Selects, Gale closed the year with 2% growth with a solid Q4 finish, while ELT finished the year by growing 18% over the prior year. In Q4, we also successfully closed the refinancing of our $1.6 billion term loan. This refinancing extends the maturity period for seven years and will initially save $8 million in annual interest payments, with the opportunity to increase to 16 million. With this robust long-term balance sheet position, we are now able to focus on both organic and inorganic growth opportunities in several of the education markets we serve. Last quarter, I introduced our effort to reset our operating model and take an expected 90 to 100 billion out of our cost savings. We have implemented plans to achieve an anticipated $60 million of the targeted savings in fiscal year 25 with a balance expected to be achieved in fiscal year 26. Our operating model reset was guided by three principles. One, bring together teams that do similar work. Two, reduce the amount of complexity in our systems And three, leverage more automation. For example, our customer support teams, which were previously aligned to each business, have now merged into Cengage Group Global Services Organization. This new approach to customer support is expected to deliver significant savings in fiscal 25. Another example is our product technology organization, which is now consolidated into one product technology and innovation organization. This consolidation allows us to leverage common resourcing models, strengthen vendor relationships, and focus our resources in the most impactful areas, such as artificial intelligence. We expect both faster development cycles and run rate savings. With our increased profitability, we are fueling our growth with strategic investments in our products, services, and people. We have planned incremental investments in our middle school science program and in more experiential learning in US higher ed. We are also investing in pilots in our Milady business to test direct full-course delivery and in our ELT business to enhance our Spark platform with additional features. Looking ahead, we are embedding a continuous improvement mindset across the organization. We have established a company-wide scorecard with goals aligned to our financial excellence, customer impact, and employee experience. This will provide visibility and clarity to our collective goals and empower every employee to contribute to our success. In closing, I want to express my gratitude to all Cengage Group employees for their ongoing commitment to our customers And I want to express my gratitude to our Board of Directors for their support and guidance throughout our transformation. I will now turn the call over to Bob Munro, our Chief Financial Officer, for a more detailed review of our financial results. Bob, over to you.