Financial Data and Key Metrics Changes - Total revenue for the second quarter was $128.8 million, down $3.4 million or 2.6% year over year [14] - Talent Development Solutions (TDS) revenue was $101.2 million, slightly down year over year [13] - Global Knowledge revenue was $27.6 million, down approximately $2.9 million or 9.6% year over year [14] - Adjusted EBITDA was $28.3 million, flat compared to last year, with an adjusted EBITDA margin of 22% compared to 21.4% last year [16] - GAAP net loss was $23.8 million, compared to a GAAP net loss of $39.6 million in the prior year [16] - Free cash flow for the quarter was negative $22.6 million, compared to negative $16.1 million in the prior year [17] Business Line Data and Key Metrics Changes - TDS LTM dollar retention rate was 99%, unchanged from the previous quarter [14] - The decline in TDS performance was attributed to a decrease in the learner product line, reflecting changes in the B2C market [13] - The TDS Enterprise Solutions segment showed growth for four consecutive quarters, representing more than 90% of the TDS segment [6] Market Data and Key Metrics Changes - Demand in North America and the Middle East was notably softer, impacting Global Knowledge revenue [7] - The macroeconomic and geopolitical headwinds continued to affect revenue, particularly in public sector spending [12] Company Strategy and Development Direction - The company is focused on a transformation plan that includes a dual business unit structure and a new AI innovation-based product roadmap [6] - Strategic investments are being made in go-to-market resources and products, with a focus on enterprise customers [12] - The company aims to evolve its product strategy to emphasize AI-native design and skills intelligence [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainty affecting revenue and updated full-year revenue guidance to $510 million to $530 million [19] - Despite the challenges, management remains confident in the core business's durability and the potential for market growth [11] - The company is monitoring external market conditions and focusing on profitability improvements [19] Other Important Information - The company achieved $45 million in expense reductions, contributing to profitability and margin expansion [7] - The company is expanding global learner support with a unified language experience in over 50 languages [10] Q&A Session Summary Question: Can you provide additional color on sectors impacted by the softer live learning environment? - Management noted that public sector spending in North America and the Middle East was significantly affected, while Europe showed good progress [22][23] Question: Is the softness more macro-driven or competitive? - Management indicated that the softness is primarily macro-driven, with positive bookings in Europe providing confidence [25][26] Question: How does the adjusted revenue guidance reflect bookings and potential further erosion? - The guidance adjustment was based on first-half performance and anticipated seasonality, with a focus on managing risk [28] Question: Is the timeline for returning to growth dependent on macro conditions? - Management believes that while macro conditions have impacted growth, there are still controllable elements that can drive recovery [30][32] Question: How is the dollar retention rate performing, particularly for enterprise customers? - The dollar retention rate was around 99%, with challenges primarily from the North American federal business impacting overall performance [35] Question: How should we frame the magnitude of headwinds faced? - Management indicated that the Global Knowledge segment faces more significant headwinds, while TDS is expected to perform reasonably well [40][41]