Cengage Learning Hldgs Ii Inc · OTC:CNGO
Cengage Learning Hldgs Ii — Cengage Learning Holdings II — Q4 2025 Earnings Presentation
25 slides from Cengage Learning Hldgs Ii's earnings presentation, Jun 5, 2025
Slide 1: Fourth Quarter & Fiscal Year 2025 Investor Update
Fourth Quarter & Fiscal Year 2025 Investor Update June 5, 2025
Slide 2: Agenda
Agenda • Introduction Richard Veith, SVP, Treasurer • Business Update Michael Hansen, Chief Executive Officer • Financial Update Dean Tilsley, Chief Financial Officer Pooja R. Assures the Quality of Online Education Takeyce W. • Q&A Designs Quality Content Michael C. Provides English Language Learni
Slide 3: Safe Harbor / Forward-Looking Statements
Safe Harbor / Forward-Looking Statements Cautionary Note Regarding Forward-Looking Statements • The following slides and related discussion contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-look
Slide 4: Business Update
Business Update Michael Hansen, Chief Executive Officer
Slide 5: Q4 Business Update - Highlights
Q4 Business Update - Highlights Strong Financial Performance Cengage Group achieved its fourth consecutive year of adjusted cash revenue and EBITDA growth. Education for Employment Driving Results Cengage Work adjusted cash revenue grew 14%, led by ed2go, which grew 23% and earned its 11th consecuti
Slide 6: Financial Update
Financial Update Dean Tilsley, Chief Financial Officer
Slide 7: Financial Highlights
Financial Highlights Strong fourth quarter drives solid full year performance • FY25 Adjusted Cash Revenue $1,541M up 2% excluding one-time impact Quarter Ended March 31 of expiring Ministry of Education contract in ELT ∆ Actual ∆ Constant FY24 FY25 − Academic +2%: US HED +7% with accelerating growt
Slide 8: Full Year Segment Performance
Full Year Segment Performance1 CONSTANT ACTUAL RATES CURRENCY Adj Cash Revenue ($M) FY24 FY25 % Growth % Growth US Higher Ed 613 658 7% 7% International Higher Ed 111 105 (6%) (5%) Secondary 197 177 (10%) (10%) Cengage Academic 922 939 2% 2% Cengage Work 126 143 14% 14% Research 217 195 (10%) (10%)
Slide 9: Cengage Academic
Cengage Academic Accelerating revenue growth in US HED, offset by declines in International HED and Secondary US Higher Ed Academic Full Year - Adj Cash Revenue ($M) • US HED revenues up 7% driven by sustained digital and Institutional sales, US Higher Ed supported by 2nd year of enrollment growth Y
Slide 10: Cengage Work
Cengage Work Adjusted cash revenues +14% with continued high growth momentum and rapid margin expansion ed2go Work • Sustained high sales momentum with FY25 revenues up +23%, Full Year Adj Cash Revenue ($M) driven mainly by enrollment in advanced career training (“ACT”), representing a 5th consecuti
Slide 11: Cengage Select
Cengage Select1 Excluding one-time impact of MoE contract in ELT, Select adjusted cash revenues down -2% Research Select Full Year Adj Cash Revenue ($M) • FY25 revenue performance impacted by Q4 YoY decline of 20% YTD Adj Cash Revenue ($M) Research due to uncertainty in Research market related to fe
Slide 12: Summary of Cash Flows
Summary of Cash Flows MAR YTD MAR YTD Business highly cash generative; $M FY24 FY25 Change unlevered free cash flow $328M, up +3% • Strong flow through of Adjusted Cash EBITDA1 461 530 68 accelerating EBITDA growth • Unfavorable YoY change in working Less: Prepublication Costs (80) (77) 3 capital dr
Slide 13: Liquidity & Debt
Liquidity & Debt $M MAR 31, 2024 MAR 31, 2025 Lower liquidity position • Liquidity effectively flat to prior year Cash and Cash Equivalents 265 256 • Expected to improve in FY26 with lower 1 Available under Revolving Credit Facilities 188 195 consulting and restructuring costs plus return to normal
Slide 14: Q&A
Q&A Ben H. Enables Ethical, Compliant Operations
Slide 15: Appendix
Appendix Rya C. Delivers Job Outcomes Through Skilling Programs
Slide 16: Definitions: Non-GAAP Financial Measures
Definitions: Non-GAAP Financial Measures We believe that certain non-GAAP financial measures provide useful information for evaluating our business performance by eliminating the effects of financing decisions as well as excluding the impact of activities not related to our ongoing operations. Howev
Slide 17: Cengage is a largely digital business, with FY25 net sales 79% digital
Cengage is a largely digital business, with FY25 full year of $1.2B representing 79% of total net sales • Cengage Group – FY25 digital sales at 79% growing >600 bps over FY24, with Total Cengage Group Net Sales1 ($M) most businesses seeing digital gains 1,342 1,432 1,521 1,499 • Cengage Academic – D
Slide 18: Segment Performance - FY24 - FY25 Q4
Segment Performance1 - FY24 - FY25 Q4 CONSTANT ACTUAL RATES CURRENCY Adj Cash Revenue ($M) FY24 FY25 % Growth % Growth US Higher Ed 204 232 14% 14% International Higher Ed 30 29 (4%) (0%) Secondary 17 5 (70%) (70%) Cengage Academic 252 266 6% 6% Cengage Work 36 40 12% 12% Research 56 44 (20%) (20%)
Slide 19: GAAP Results - Condensed Consolidated Statements of Operations
GAAP Results - Condensed Consolidated Statements of Operations Fiscal Year Ended March 31, (in millions) 2025 2024 Revenues $ 1,478.4 $ 1,502.7 Cost of revenues, excluding amortization of pre-publication costs and identifiable intangible assets and depreciation stated below 562.2 620.4 Amortization
Slide 20: GAAP Results – Condensed Consolidated Balance Sheet
GAAP Results – Condensed Consolidated Balance Sheet As of As of March 31, March 31, March 31, March 31, (in millions) 2025 2024 Change 2025 2024 Change Assets Liabilities, Contingently Redeemable Convertible Preferred Cash and cash equivalents $ 256.4 $ 264.9 $ (8.5) Stock, and Stockholders' Deficit
Slide 21: Non-GAAP Financial Measures - Three & Twelve Months Ended
Non-GAAP Financial Measures¹ - Three & Twelve Months Ended Three Months Ended Twelve Months Ended March 31, B / (W) March 31, B / (W) 2025 2024 $ % 2025 2024 $ % Adjusted EBITDA: Adjusted EBITDA: Cengage Academic $ 115.4 $ 104.2 $ 11.3 10.8% Cengage Academic $ 480.7 $ 438.9 $ 41.8 9.5% Cengage Work
Slide 22: Non-GAAP Cash Financial Measures - Three & Twelve Months Ended
Non-GAAP Cash Financial Measures¹ - Three & Twelve Months Ended Three Months Ended Twelve Months Ended March 31, B / (W) March 31, B / (W) 2025 2024 $ % 2025 2024 $ % Adj Cash Revenue: Adj Cash Revenue: Cengage Academic 266.1 251.7 14.4 5.7% Cengage Academic 939.3 921.9 17.4 1.9% Cengage Work 40.2 3
Slide 23: Non-GAAP Reconciliations
Non-GAAP Reconciliations¹ $M FY23 FY24 FY25 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY GAAP Revenue 303 384 376 361 1,423 326 428 365 384 1,503 332 407 356 383 1,478 Change in deferred revenue (52) 134 (70) 22 34 (55) 143 (83) 29 35 (55) 157 (80) 41 63 Adjusted Cash Revenue $ 251 $ 518 $ 306 $ 382
Slide 24: Total SG&A Reconciliation
Total SG&A Reconciliation $M FY23 FY24 FY25 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY 1 SG&A - Management Reporting $ 178 $ 177 $ 184 $ 185 $ 723 $ 184 $ 187 $ 187 $ 196 $ 754 $ 180 $ 187 $ 183 $ 184 $ 734 Equity-based comp & Non-core operating 4 3 2 5 14 4 21 34 12 70 14 7 8 11 40 2 Indirect cos
Slide 25: Summary of Cash Flows
Summary of Cash Flows $M MAR YTD MAR YTD Change FY24 FY25 Summary of cash flows: Net cash provided by operating activities 167 200 33 Net cash used in investing activities (121) (152) (31) Net cash used in financing activities (50) (56) (5) Impact on cash and cash equivalents from changes in foreign
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