Core Insights - 9 Story Media Group has partnered with Future Today to launch the first-ever Scholastic-branded streaming app, available on Roku and Amazon Fire TV, providing families with a free and safe platform for on-demand access to Scholastic programming [1][3]. Company Overview - 9 Story Media Group is a leading creator, producer, and distributor of children's media, now part of the Scholastic portfolio, recognized for its digital content strategy and AVOD distribution [7]. - Future Today is a leader in ad-supported streaming media, managing top free channels across various OTT platforms and providing technology solutions for content owners [8][9]. Content Offering - The Scholastic app features over 400 hours of premium content from iconic titles such as "Clifford the Big Red Dog," "The Magic School Bus," and "Goosebumps," targeting children ages 2-12 and their families [2][3]. Strategic Goals - The app is part of Scholastic's broader strategy to expand access to its catalog of children's series, leveraging synergies from its investment in 9 Story [3]. - The collaboration aims to meet the strong demand for quality nostalgic content, ensuring families have access to trusted stories that entertain and educate [5].

Financial Data and Key Metrics Changes - In Q3 2025, revenues increased by 4% to $335.4 million, with an improved operating loss of $20.9 million compared to $30.6 million in the prior year [34] - Adjusted EBITDA was $6 million, up from a loss of $7.2 million a year ago, and net loss improved to $1.3 million from a loss of $23.3 million [34] - Adjusted loss per diluted share improved to $0.05 compared to a loss of $0.80 last year [34] Business Line Data and Key Metrics Changes - Children's Book Publishing and Distribution revenues increased by 5% to $203.3 million, with adjusted operating income rising to $7.6 million from $2.8 million [35] - Book Fairs revenues were $110.7 million, an increase of 8%, while Book Clubs revenues rose by 14% to $15.2 million [36][37] - Entertainment segment revenues were $12.8 million, reflecting the contribution of 9 Story Media Group, but adjusted operating loss was $2.4 million compared to a loss of $0.1 million a year ago [39] - Education Solutions segment revenues declined by 16% to $57.2 million, with an adjusted operating loss of $6.9 million compared to a loss of $0.8 million in the prior year [41] Market Data and Key Metrics Changes - The International segment saw revenues of $59.3 million, with a year-over-year increase excluding unfavorable foreign currency exchange impacts [45] - Major markets including Canada, the U.K., and New Zealand benefited from strong sales of new titles, particularly "Dog Man: Big Jim Begins" [30] Company Strategy and Development Direction - The company remains committed to capital allocation priorities, investing in growth initiatives while returning over $35 million to shareholders through share repurchases and dividends [9] - A strategic review of the Education Solutions business is underway to optimize its long-term potential [29] - The company is focused on enhancing its core and adjoining markets, leveraging its brand and distribution channels for growth opportunities [60] Management's Comments on Operating Environment and Future Outlook - Management noted increasing consumer caution in spending, particularly in discretionary categories like children's books, and uncertainty around federal education policy affecting school purchases [12][68] - The company anticipates modest revenue growth for the full year, with adjusted EBITDA forecasted at approximately $140 million [10][53] - Management expressed confidence in long-term growth opportunities despite short-term pressures [60] Other Important Information - The company has a strong balance sheet with modest debt and significant owned real estate assets, providing options for liquidity and shareholder returns [9][48] - The company repurchased 1.45 million shares for $30 million in the last quarter, with an additional $53.4 million authorized for repurchases [51][52] Q&A Session Summary Question: Outlook on backlist sales given consumer pressure - Management indicated that successful frontlist titles can drive backlist sales, particularly with key authors like Dav Pilkey and Suzanne Collins [66][67] Question: Changes in funding levels for school districts - Management noted that schools are being more cautious with spending, primarily pausing to assess future funding levels [69][70] Question: Strategic review of Education Solutions - The review is internally led, focusing on resource allocation to ensure success in the supplemental education market [78] Question: Fair value of real estate assets - Management refrained from providing specific valuations but emphasized the importance of making information available for investor assessment [83]