Cengage Learning Hldgs Ii Inc · OTC:CNGO
Cengage Learning Hldgs Ii — Cengage Learning Holdings II — Q3 2025 Earnings Presentation
31 slides from Cengage Learning Hldgs Ii's earnings presentation, Feb 6, 2026
Slide 1: Third Quarter Fiscal Year 2025 Investor Update
Third Quarter Fiscal Year 2025 Investor Update February 6, 2025
Slide 2: Agenda
Agenda • Introduction Richard Veith, SVP, Treasurer • Business Update Michael Hansen, Chief Executive Officer • Financial Update Necko F. Fosters Inclusivity and Bob Munro, Chief Financial Officer Belonging for Our Shirelle P. Workforce Develops Education • Q&A Content for Learners, Abbey K. Educato
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: Q3 Business Update
Q3 Business Update On track to deliver guidance and a fourth consecutive year of revenue and EBITDA growth. Substantially executed our cost savings program enabling strong EBITDA margin expansion. Dean Tilsley appointed new CFO, effective March 1 – Ongoing orderly transition through April Targeting
Slide 6: Investing to Accelerate Future Growth
Investing to Accelerate Future Growth New Acquisition AI for Internal Efficiencies A 3D visual science learning platform with fully immersive assignments and LMS integration. Visible Body is used by millions of students, Leveraging third party vendor offerings to enable educators, and professionals
Slide 7: Financial Update
Financial Update Bob Munro, Chief Financial Officer
Slide 8: Financial Highlights
Financial Highlights Quarter Ended December 31 ∆ Actual ∆ Constant • FY25 Full Year expectations – On track to deliver guidance FY24 FY25 $M Rates Currency − Revenues: $1.56 - $1.57B up +3% before ELT contract impact − EBITDA: $530-535M, up +15% with EBITDA margins ~34% Adj Cash Revenue $282 $276 -2
Slide 9: Third Quarter YTD FY25 Segment Performance
Third Quarter YTD FY25 Segment Performance1 CONSTANT ACTUAL RATES CURRENCY Adj Cash Revenue ($M) FY24 FY25 % Growth % Growth US Higher Ed 409 426 4% 4% International Higher Ed 81 76 (7%) (7%) Secondary 180 172 (4%) (4%) Cengage Academic 670 673 0% 0% Cengage Work 90 103 15% 15% Research 161 151 (6%)
Slide 10: Trailing Twelve Months Segment Performance
Trailing Twelve Months Segment Performance1 CONSTANT ACTUAL RATES CURRENCY Adj Cash Revenue ($M) FY24 FY25 % Growth % Growth US Higher Ed 600 630 5% 5% International Higher Ed 115 106 (8%) (8%) Secondary 193 189 (2%) (2%) Cengage Academic 907 925 2% 2% Cengage Work 120 139 16% 16% Research 210 207 (
Slide 11: Cengage Academic
Cengage Academic Accelerating revenue growth in US HED, offset by International HED and Secondary US Higher Ed Academic YTD Adj Cash Revenue ($M) • US HED TTM revenues up 5% driven by Institutional1, improved enrollment and lower drag of small residual print/bundle base US Higher Ed YTD Adj Cash Rev
Slide 12: US Higher Education
US Higher Education Institutional models sustaining high growth and expected to approach half of FY25 US HED revenue • Sustained high growth in Institutional revenues over Institutional Revenues ($ Millions) multiple years, with significant future runway +25% • Unique institutional offering with Cen
Slide 13: Cengage Work
Cengage Work Adjusted cash revenues +15% with continued high growth momentum and rapid margin expansion Cengage Work Work • YTD revenues up 15% - sustained high double-digit growth in YTD Adj Cash Revenue ($M) ed2go moderated by flat performance at Infosec 15% • Scaling profitably with rapidly expan
Slide 14: Cengage Select
Cengage Select1 Adjusted cash revenues -6% driven by one-time rebasing of MoE contract in ELT, temporary sales timing effects and modest trading weakness in Research Research Select YTD Adj Cash Revenue ($M) • YTD revenue performance impacted by temporary sales phasing YTD Adj Cash Revenue ($M) Rese
Slide 15: Summary of Cash Flows
Summary of Cash Flows Business highly cash generative; unlevered free cash flow $255M, up +15% DEC YTD DEC YTD • Strong flow through of $M FY24 FY25 Change accelerating EBITDA growth • Temporary timing delays in collections Adjusted Cash EBITDA1 328 362 34 around holiday period moderate YTD underlyi
Slide 16: Liquidity & Debt
Liquidity & Debt $M DEC 31, 2023 DEC 31, 2024 Strong balance sheet, increased financial flexibility to invest to accelerate growth Cash and Cash Equivalents 266 294 • Substantial and growing liquidity - ~$0.5bn at end of December Available under Revolving Credit Facilities 1 104 195 • Liquidity expe
Slide 17: FY25 Full Year Outlook
FY25 Full Year Outlook Adjusted Cash Revenue: Adjusted Cash EBITDA: Unlevered Free Cash Flow: FY25 projected to be in range of FY25 projected to be in range of FY25 projected to be in range of $1,560-$1,570M $530-$535M $390-$400M (FY24: $1,537M) (FY24: $461M) (FY24: $317M) Expect low single-digit An
Slide 18: Q&A
Q&A Matt N., Cengage Select
Slide 19: Appendix
Appendix Rya C., Cengage Work
Slide 20: 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 21: Cengage is a largely digital business
Cengage is a largely digital business, with Q3 FY25 TTM digital sales of $1.2B representing 78% of total net sales • Cengage Group – FY25 digital sales at 78% growing >400 bps over FY24, with Q3 TTM Cengage Group Net Sales1 ($M) most businesses seeing digital gains 1,329 1,378 1,481 1,500 • Cengage
Slide 22: Q3 FY25 Segment Performance
Q3 FY25 Segment Performance1 CONSTANT ACTUAL RATES CURRENCY Adj Cash Revenue ($M) FY24 FY25 % Growth % Growth US Higher Ed 110 117 6% 6% International Higher Ed 25 21 (17%) (18%) Secondary 11 13 20% 20% Cengage Academic 147 151 3% 3% Cengage Work 28 32 14% 14% Research 39 38 (3%) (3%) English Langua
Slide 23: Quarterly Segment Performance FY23 – FY25 Q3
Quarterly Segment Performance1 FY23 – FY25 Q3 Actual Rates Adj Cash Revenue ($M) Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY24 Q2 FY24 Q3 FY24 Q4 FY24 Q1 FY25 Q2 FY25 Q3 FY25 US Higher Ed 77 224 105 190 73 226 110 204 76 233 $117 International Higher Ed 23 37 27 34 22 34 25 30 22 33 21 Secondary 33 99 40
Slide 24: GAAP Results - Condensed Consolidated Statements of Operations
GAAP Results - Condensed Consolidated Statements of Operations Three Months ended Nine Months Ended December 31, December 31, (in millions) 2024 2023 2024 2023 Revenues $ 356.0 $ 365.1 $ 1,095.1 $ 1,118.3 Cost of revenues, excluding amortization of pre-publication costs and identifiable intangible a
Slide 25: GAAP Results – Condensed Consolidated Balance Sheet
GAAP Results – Condensed Consolidated Balance Sheet As of As of December 31, March 31, December 31, March 31, (in millions) 2024 2024 Change 2024 2024 Change Assets Liabilities, Contingently Redeemable Convertible Cash and cash equivalents $ 294.1 $ 264.9 $ 29.2 Preferred Stock, and Stockholders' De
Slide 26: Non-GAAP Financial Measures - Three & Nine Months Ended
Non-GAAP Financial Measures¹ - Three & Nine Months Ended Three Months Ended Nine Months Ended December 31, B / (W) December 31, B / (W) 2024 2023 $ % 2024 2023 $ % Adjusted EBITDA: Adjusted EBITDA: Cengage Academic $ 119.4 $ 110.7 $ 8.7 7.9% Cengage Academic $ 365.2 $ 334.8 $ 30.4 9.1% Cengage Work
Slide 27: Non-GAAP Cash Financial Measures - Three Months Ended
Non-GAAP Cash Financial Measures¹ - Three Months Ended Three Months Ended December 31, B / (W) 2024 2023 $ % Adj Cash Revenue: Cengage Academic 151.1 147.0 4.1 2.8% Cengage Work 31.8 27.9 3.9 14.0% Research 38.1 39.3 (1.1) (2.9)% English Language Teaching 30.2 41.8 (11.6) (27.8)% Other 19.9 21.0 (1.
Slide 28: Non-GAAP Cash Financial Measures - Nine Months Ended
Non-GAAP Cash Financial Measures¹ - Nine Months Ended Nine Months Ended December 31, B / (W) 2024 2023 $ % Adj Cash Revenue: Cengage Academic 673.2 670.2 3.0 0.4% Cengage Work 102.7 89.6 13.1 14.7% Research 150.8 161.2 (10.4) -6.4% English Language Teaching 114.1 121.2 (7.1) -5.9% Other 54.2 59.4 (5
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations¹ $M FY23 FY24 FY25 FY24 FY25 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 TTM TTM GAAP Revenue 303 384 376 361 1,423 326 428 365 384 1,503 332 407 356 1,479 1,479 Change in deferred revenue (52) 134 (70) 22 34 (55) 143 (83) 29 35 (55) 157 (80) 28 51 Adjusted Cash Revenue $ 251 $ 5
Slide 30: 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 1 SG&A - Management Reporting $ 178 $ 176 $ 183 $ 185 $ 723 $ 184 $ 187 $ 187 $ 196 $ 754 $ 180 $ 187 $ 183 Equity-based comp & Non-core operating 4 3 2 5 14 4 21 34 12 70 14 7 8 2 Indirect cost of revenue (75) (72) (
Slide 31: Summary of Cash Flows
Summary of Cash Flows $M DEC YTD DEC YTD Change FY24 FY25 Summary of cash flows: Net cash provided by operating activities 137 158 21 Net cash used in investing activities (93) (91) 2 Net cash used in financing activities (48) (37) 11 Impact on cash and cash equivalents from changes in foreign curre
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