Cengage Learning Holdings II Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nick Dempsey - Barclays Capital Securities Ltd. - Analyst : Good morning, guys. Just one question. I was wondering if you could elaborate off the return to growth in calendar Q4. Wonder if you could talk about the adoption share situation that you saw through that important fall season and the adoption share situation that you've been seeing into the spring season?

Question: Nick Dempsey - Barclays Capital Securities Ltd. - Analyst : That's correct. Kind of tackle one more. I don't think I heard you talk about the pricing environment. To what extent has putting up price a little bit more than you might be able to in recent years supported your ability to achieve that 5% growth that was impressive in the last quarter?

Question: Nick Dempsey - Barclays Capital Securities Ltd. - Analyst : That's really helpful. Thanks very much.

Question: James Sanchez - Franklin Templeton - Analyst : Good morning, guys. Thanks for taking the question. So I had one on the Work segment. I was wondering who are the primary customers for ed2go

Question: James Sanchez - Franklin Templeton - Analyst : Great. That's very helpful. And then -- sorry, I'm not following through cold -- for inclusive access, on average, what kind of discount does a student see versus like the traditional model of them going out and buying the product from you directly? And then kind of what are the benefits for Cengage in that model?

Question: James Sanchez - Franklin Templeton - Analyst : Okay, great. And then just a quick follow through. It kind of sounded like there's maybe like a guaranteed minimum amount of seats that will take the inclusive access opt-in, is that right? Or is there no like a -- like if it's a 30 kid class, they guarantee at least 15 will take it to you, is that --?

Question: James Sanchez - Franklin Templeton - Analyst : Okay, great. That's awesome. And then just one last one. Kind of what kind of growth do you expect to see from the K-12 segment and [what SRB] headwind moving forward?

Question: James Sanchez - Franklin Templeton - Analyst : Awesome. Thank you, guys. Appreciate your time.

Question: Jordan Fine - Anchorage Capital Group, L.L.C - Analyst : Hey. Thanks for taking my question. I just wanted to confirm -- I have a couple, but on the ELPP guidance for fiscal '24. Does that include any of the $60 million to $90 million of cost savings?

Question: Jordan Fine - Anchorage Capital Group, L.L.C - Analyst : Got it. Okay. And then I wanted to also clarify, just on the one-off costs associated with it. I was a little confused with what you're saying. So you're saying that there's $80 million of one-off costs and half of that will be in fiscal '24. Is that the right way to think about it?

Question: Jordan Fine - Anchorage Capital Group, L.L.C - Analyst : Okay. But you mentioned like $33 million year to date. So is that is that part of that?

Question: Jordan Fine - Anchorage Capital Group, L.L.C - Analyst : Got it. Okay, understood. That makes sense. And then on the research side, the ELPP degradation was kind of in excess of what like typical decremental margins might be. So I'm curious kind of what might have drove the weakness in the ELPP for research specifically relative to the magnitude of the revenue declines.

Question: Jordan Fine - Anchorage Capital Group, L.L.C - Analyst : Got it. Okay. And then I guess just two more from me. Like this business is obviously becoming a lot more difficult to model on a quarterly basis. And I know you guys have had a lot of seasonal things and structural secular changes and order timing, et cetera. I'm curious like at some point, does that start to normalize out or should we just be looking at this more like an annual basis on a go-forward basis?

Question: Jordan Fine - Anchorage Capital Group, L.L.C - Analyst : Got it. And then just a last one for me, just on kind of some of the things that are going on with the DOE right now. Do you guys have any comment

Question: Jordan Fine - Anchorage Capital Group, L.L.C - Analyst : Great. Thank you very much.

Question: Nick Dempsey - Barclays Capital Securities Ltd. - Analyst : Yes. Just wanted to follow up on last question. I read somewhere that it could potentially be only Title IV students who might be the once who are opting in. Just wondering if you've got any rough sense, what proportion of students who buy [textbooks with people] would be Title IV and the

Question: Nick Dempsey - Barclays Capital Securities Ltd. - Analyst : All right, guys. Thank you.