Core Insights - The company anticipates strong growth in invoiced sales, particularly in Enterprise North America, which is expected to drive overall growth for fiscal year 2026 [4][10][25] - The growth in invoiced amounts is expected to translate into significant increases in reported revenue, adjusted EBITDA, and free cash flow in fiscal year 2027 [3][10][48] Financial Performance - Total first quarter reported revenue was $64 million, down 7% from the prior year, primarily due to an 8% decline in the Enterprise division and a 2% decrease in the Education division [27][32] - Invoiced amounts in the Enterprise North America segment grew 7% to $34.9 million, with a notable 13% growth when excluding government contracts [11][32] - The company reported a 5% year-over-year increase in consolidated deferred revenue balance to $100.2 million, which will be recognized as revenue in upcoming quarters [28] Growth Drivers - The growth in invoiced amounts is driven by a strong pipeline and significant year-over-year increases in advanced bookings of services [2][12] - New logo subscription invoiced amounts grew 25% year-over-year, indicating strong demand for the company's solutions [12][72] - The company has seen a consistent client retention rate and an increase in the percentage of revenue contracted for multiyear periods to 61% [12][38] Education Division Insights - The Education Division is expected to achieve strong growth in both invoiced and reported sales in fiscal year 2026, despite previous uncertainties regarding school funding [5][44] - Invoiced amounts in the Education Division for the first quarter were $6.6 million, a decline of $5.6 million from the prior year, primarily due to the absence of a large statewide deal that impacted last year's results [41][43] - The company expects a pattern of invoiced amounts and recognized revenue similar to prior years, with significant growth anticipated in the second half of the fiscal year [9][44] International Operations - International invoiced amounts and reported revenue are expected to grow modestly, with first quarter revenue slightly down due to challenges in China [9][39] - Excluding China, revenue from the International segment increased by 4%, indicating resilience in other markets [39] Strategic Initiatives - The company is focused on being the partner of choice for organizations seeking to achieve breakthrough results, emphasizing the importance of human capabilities alongside AI integration [14][15] - Recent investments in go-to-market strategies have begun to yield positive results, with a restructured sales team focused on landing new strategic clients and expanding existing relationships [22][76] - The company has launched new AI-driven solutions to assist clients in adopting AI effectively, enhancing their operational efficiency [16][18]

Financial Data and Key Metrics Changes - Total first quarter reported revenue was $64 million, down 7% from the prior year, driven by an 8% decline in the enterprise division and a 2% decrease in the education division [28][32] - Adjusted EBITDA was $3.7 million compared to $7.7 million in the previous year, reflecting lower reported revenue and higher SG&A expenses [32] - Cash flows from operating activities were $0.1 million compared to $14.1 million in the previous year, primarily due to timing-related changes in working capital [32] Business Line Data and Key Metrics Changes - The enterprise division generated 74% of the company's overall revenue, with invoiced amounts growing 4% to $45.5 million [33] - North America segment invoiced amounts grew 7% to $34.9 million, and excluding government contracts, it grew 13% [33][34] - Education division revenue was $16.1 million, 2% lower than the prior year, primarily due to decreased material sales [39] Market Data and Key Metrics Changes - International segment revenue was $11.2 million, down slightly from $11.4 million in the prior year, primarily due to challenges in China [38] - Excluding China, international segment revenue increased 4%, and licensee revenue increased 8% compared to the first quarter of fiscal 2025 [38] Company Strategy and Development Direction - The company views fiscal 2026 as a year of execution and return to growth, with expectations for strong growth in invoiced amounts and reported revenue in fiscal 2027 [4][46] - Strategic investments in transforming the enterprise North America go-to-market strategy are gaining traction, with a focus on solution selling and bundling content with services [34][46] - The company aims to be the partner of choice for organizations seeking to achieve breakthrough results, emphasizing the importance of human capabilities alongside AI [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong growth in invoiced amounts, particularly in North America, and expects this momentum to continue [5][26] - The company anticipates that the meaningful growth in invoiced amounts will translate into substantial growth in reported revenue, Adjusted EBITDA, and free cash flow in fiscal 2027 [12][46] - Management acknowledged the impact of macroeconomic conditions and government actions on revenue recognition and deferred revenue [28][32] Other Important Information - The company has a strong liquidity position with $80 million at the end of the first quarter and no drawdowns on its credit facility [41] - The company repurchased approximately 582,000 shares in the open market at a cost of $10.4 million during the first quarter [42] Q&A Session Summary Question: Guidance for the full year and adjusted EBITDA timing - Management reaffirmed guidance for the full year, noting that adjusted EBITDA will be more back-end loaded due to the timing of large education contracts [51][52] Question: Update on North American Enterprise sales force - Management confirmed that invoice growth in Q1 was up 7% in North American Enterprise, with a significant increase in new logo subscription invoiced amounts [57][58] Question: Drivers of growth in new logo sales - Management indicated that growth was driven by a combination of higher attach rates of services and an increase in subscription sales [88][92]