Cengage Learning Holdings II, Inc.

Greetings and welcome to the Cengage Group's first quarter fiscal year 2026 conference call. At this time, all participants are on a listen-only mode and 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. And please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Richard V., SVP Treasurer at Cengage Group. Sir, the floor is yours.

Good morning, and welcome to Cengage Group's Fiscal 2026 First Quarter 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 website at cengagegroup.com forward slash investors. The following discussion and the earnings materials contains forward-looking statements within the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as believe, expect, intend, may, could, should, will, estimate, likely, or similar words, and other 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. 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. Forward-looking statements are not guarantees of future performance, and you should not rely on any of these forward-looking statements. 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 factors section of our fiscal 2025 annual report for the year ended March 31st, 2025, as may be updated by our quarterly reports for fiscal year 2026. Any forward-looking statement made during this discussion or in the earnings materials is based on currently available information and speaks only as of the date of this discussion and the date of the earnings materials. The company disclaims any obligation to publicly update or revise any forward-looking statements, whether written or oral, 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 GAAP financial measure are provided in the legal disclaimer and in the appendix to the slide presentation. I'll now turn the call over to Michael for an update on the business, followed by Dean, who will take you through the first quarter details before we open the call for questions. Michael?

Thank you, Richard. Good morning, and thank you for joining us for our first quarterly update of our fiscal year 2026. I'm pleased to share our progress this quarter as we continue to transform Cengage Group into a more agile, innovative, and growth-oriented company. This quarter, we completed the resegmentation of our business into four distinct units, higher education, work, school, and English Language Learning. This new structure aligns with how our customers engage with us and enables faster decision-making and execution. We've also implemented a new global operating model, which enhances our ability to scale innovation and drive operational efficiency across the enterprise. Let me now turn to our financial performance. The first quarter is consistently our smallest and should be considered within the context of the entire year. Adjusted cash revenue for Q1 was $254 million, down 8% year over year, primarily due to a non-recurring revenue stream in the first quarter of fiscal year 2025 and a low adoption year in our school business. When normalized, revenue was down just 2%. Adjusted Cash EBITDA was $15 million, down 61% year-over-year, primarily due to the lower revenue and higher cost of sales from our revised Big Ideas Learning Partnership. We are seeing strong momentum across our business, driven by our growth strategy, which is centered on three pillars. Digital acceleration, education for employment, and AI-powered innovation. We are embedding AI into our portfolio of products to enhance the user experience and drive internal efficiencies in content development, marketing and customer support. Our continued investment in AI, product innovation and customer success is fueling our long-term growth. Within our higher ed business, our AI-powered student assistant is scaling to more than 100 higher ed titles this fall. And more than 1 million students will have access to this vital tool that will improve learning outcomes, enhance learning experiences, and drive engagement. We are exploring partnerships and further enhancement to complement our current suite of AI-powered tools including the Student Assistant and Faculty Insight Dashboard. Our work business continues to outperform expectations, driven by Add2Go, where we successfully expanded the employer channel and improved enrollment productivity. We are developing and testing exciting AI-powered tools that will further enhance the adult learner's experience and best prepare them for future jobs and careers. I look forward to sharing more details about these new products in future updates. In school, we're executing on our AI-enabled product development roadmap, including tools like the AI Lexile Leveler and AI-powered Content Studio, which are delivering value to both educators and learners. I would also like to take this opportunity to welcome Marty Lang as the general manager of our school business and the most recent addition to my executive team. In closing, with our first quarter in the books, we remain confident that the strength of our diversified portfolio will help us deliver another year of adjusted cash and gap revenue and EBITDA growth. We're executing with discipline Investing with Purpose, and Positioning Cengage Group for Sustainable Long-Term Value Creation. Thank you all for your continued support. I will now turn the call over to Dean Tilsley, our CFO, who will provide more details about our financial performance. Dean?