Cengage Learning Holdings II, Inc.

Greetings. Welcome to the Cengage Group's fourth quarter and full year 2026 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, Ed Dittmeier, SVP Investor Relations. You may begin.

Thank you, Operator. Good morning to everyone connected today, and welcome to Cengage's Fiscal 2026 Fourth Quarter and Fiscal Full Year 2026 Investor Update. Joining me on the call are Michael Hansen, Chief Executive Officer, and Dean Tilsley, Chief Financial Officer. A copy of the slide presentation for today's call has been posted to the company's Web site. at CengageGroup.com slash investors. The following discussion and the earnings materials contain forward-looking statements about the company. Forward-looking statements relate to the future and are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, and many of which are outside of our control. These statements are based on our current expectations and are subject to the cautionary statement in our accompanying investor presentation and our financial reports. The company disclaims any obligation to update any forward-looking statements except as required by law. On today's call and in our investor presentation, we will refer to certain non-GAAP financial measures, definitions and the rationale for using these measures, and reconciliations to their most directly comparable GAAP financial measures are provided in the legal disclaimer in the appendix to the investor presentation. Michael will first share a high-level overview of company performance and a review of our progress on key strategic priorities, followed by Dean, who will take you through the financial performance in detail. We will then open the call for questions. Michael?

Thank you, Ed. Let me start off with the performance for the year, then highlight our strong progress in key strategic areas and how I see the market demand for the year ahead. Dean will then follow with detailed Q4 results. Fiscal year 2026, ending March 31st, 26, delivered solid overall results, with adjusted cash revenue of $1.55 billion, up 1% year over year, and adjusted cash EBITDA of $545 million, up 1% as well, with a 35% adjusted cash EBITDA margin. Our performance was in line with expectations despite timing-driven declines in K-12 and impact in international due to the strategic shift away from print to digital. Additionally, we have made significant strides in fiscal year 26 to implement our new global operating model and execute on our strategic priorities beyond the top-line results. Elaborating further, it is important to recognize that we deliver stronger mid-single-digit adjusted cash revenue growth in each of our two largest and most strategic segments, higher education and work. These segments are our clear long-term secular growth engines, as well as the areas most aligned with the power of our Education for Employment mission. Second, It was very encouraging to see our momentum build as fiscal 26 progressed, with second half adjusted cash revenues up 6% and adjusted cash EBITDA up 21%. Our higher education and work growth engines played a big part in that second half improvement, with top-line growth in the key U.S. higher ed business up 8% and had to go up 21% year-over-year for the last six months. The second half also benefited from annualized cost savings of $40 million, driven by efficiencies derived from our new global operating model. H2 adjusted EBITDA margins rose over 360 basis points year-over-year. So, stronger performance in the less cyclical strategic growth segments and better growth and momentum as the year progressed. I've spoken earlier in the year about the company's strategy to deliver strong, sustainable growth. To reiterate, it is built on a belief that trusted content is considered table stakes, and value is shifting profoundly to impact and outcomes. When we consider our largest opportunities for that sustainable growth, we believe our work segment is right at the front in terms of long-term growth rates, while also being capable of driving higher margins due to our very efficient operating model. Interest in rewarding career paths outside of four-year degree programs is growing strongly and accelerating with workplace changes due to AI, creating a huge opportunity for Cengage, a market leader in this space. For full fiscal 2026, we continue to see sustained growth within the largest area of the work segment at to go, with 24% year-on-year growth on an adjusted cash revenue basis. While at to go's well-established higher ed distribution channel continues to perform well, we are also realizing large growth in our new corporate distribution channel. The corporate channel's revenue more than doubled over the past 12 months. with new partnership with organizations such as HTA, Amazon, and Novant Health. Additionally, this March we released the third edition of the Cengage Work Learner Outcomes Report. This report offers a transparent and very final view of how our workforce education and upskilling programs translate into real-world employment results. Based on payroll record data validated by Global Credit Bureau, our report provides more reliable insights than traditional surveys. And because of that, it is especially satisfying to see people who complete our courses attain 9 to 14% average year one compensation increases and 18% average compensation increases within two years of certification completion. Our OI is critical, so we are excited to leverage these exceptional outcomes to differentiate ourselves and win in this fast-growing market. As we begin fiscal 2027, we continue to increase our investment to extend our reach. For example, we've recently began offering our advanced career certifications in the Canadian market. partnering with Canadian institutions and expanding Ed2Go's catalog with the first localized Canadian option in Q1. We are also working to reach more learners by offering Spanish language courses. Now, let's turn to our strategic technology priorities. There are three central pillars to how we are leveraging powerful technology to transform our business and how we serve our customers. First is the ongoing digitization of the business, moving from a legacy of print textbooks to increasingly interactive digital content and courseware delivered over highly scaled platforms. We now have over 16 million digital users and digital revenue reached $1.2 billion on a gap basis for fiscal 26. This digital revenue represents an increase of 10% year-over-year and now representing 81% of the company's total gap revenue for the period. Second, with the digitization of our business significantly completing key markets, we have set the foundation to add AI-enabled tools for our customers, products that accelerate learner outcomes and enhance effectiveness for instructors. Fiscal 2026 was the year Cengage launched AI solutions for each of its business segments. User engagement is building nicely, and we're seeing encouraging evidence on impacts. For example, an internal study of students in early release testing who began using student assistants who described themselves as struggling in a course were 90% more likely to continue submitting assignments through the end of the term. we are focused on continuing to drive higher adoption of these new tools. Third, we are investing in AI capabilities to improve enterprise performance. However, we are taking a disciplined and cost-effective approach to enterprise AI adoption, prioritizing use cases with clear business impact, measurable productivity benefits, and the ability to scale responsibly. This work is led by our AI Enablement Center, a dedicated team responsible for helping us deploy AI safely and effectively. We are already seeing tangible benefits. In our work segment, AI is helping us accelerate the development and release of new products in high demand areas. In higher education and school, we are using AI to streamline content development, including media production, translation, and assessment creation, while maintaining high standards for quality, accuracy, and efficacy. We also see meaningful opportunity beyond content creation. For example, AI is helping us improve the performance of our digital products and support faster, more effective customer service. Overall, we view AI as an enabler of our strategy. helping us move faster, operate more efficiently, improve the customer experience, and strengthen our ability to deliver innovative learning solutions at SCIP. We expect to mature our capabilities significantly over the coming years. I'm proud of the progress the organization has made in enabling these opportunities, and I'm grateful for the culture of innovation that has taken root in the company's talented team. Because of this, It was especially appreciated when in March of this year, Fast Company named Cengage to its prestigious list of the world's most innovative companies in 2026, a list which shines as a spotlight on businesses that are shaping industry and culture through their innovations. Cengage's recognition reflects its leadership in building a responsible AI-powered learning ecosystem that spans K-12, higher education, and workforce training. Pedagogy-first innovation with AI tools that enhance rather than shortcut the learning process. I congratulate the team again and thank our customers for their trust as we work together to innovate. Now, let me speak briefly on the demand dynamics that our larger businesses are facing as we begin executing in fiscal 2027. In our work segment, we expect continued increased demand for credential training National Student Clearinghouse preliminary data released this month showed undergraduate certificate enrollment up 10.2% in spring 2026, underscoring the shift towards shorter, career-focused education pathways. In higher ed, we expect to see continued strong demand for digital courseware and solutions. And in K-12, where certain states support and coordinate buying by district and schools on approximately six-year cycles, we are shifting to a multi-year phase beginning in fiscal 2027 that will be characterized by anticipated cyclical increases in those large state adoptions. I will now hand the call over to Dean, who will provide a more detailed review of our fiscal Q4 and full-year 2026 financial performance.