Financial Performance - Q3 FY25 - Revenue for Q3 FY25 was $67.1 million, within the guided range of $67 million to $71 million[9] - Adjusted EBITDA for Q3 FY25 was $7.3 million, beating the constant currency guidance by $0.3 million[9] - Q3 FY25 Adjusted EBITDA was $7.3 million, a decrease of 47.5% compared to $13.9 million in Q3 FY24[15, 27] - Q3 FY25 revenue was $67.1 million, a decrease of 8.5% compared to $73.4 million in Q3 FY24[15, 27] Financial Performance - YTD Q3 FY25 - Revenue for YTD Q3 FY25 was $195.8 million, a decrease of 3.6% compared to $203.1 million in YTD Q3 FY24[15, 27] - Adjusted EBITDA for YTD Q3 FY25 was $17.0 million, a decrease of 47.3% compared to $32.3 million in YTD Q3 FY24[15, 27] - YTD Q3 FY25 Free Cash Flows were $10.6 million, compared to $30.6 million in Q3 FY24 YTD[15] Guidance Update for FY25 - Updated revenue guidance for FY25 is $265 million to $275 million, a decrease of $10 million from the previous guidance[9] - EBITDA guidance for FY25 is $28 million to $33 million, a decrease of $2 million at the low end from the previous guidance[9] Enterprise Division - North America - Billed Deferred subscription Revenue Balance was $45.0 million, compared to $47.2 million in Q3 FY24[16] - Subscription Revenue was $20.9 million, compared to $22.0 million in Q3 FY24[16] - Revenue was $37.1 million, compared to $40.6 million in Q3 FY24[16] - Unbilled Deferred Revenue Balance was $56.4 million, compared to $64.4 million in Q3 FY24[16] - Subscription & Subscription Services Revenue was $33.7 million, compared to $35.9 million in Q3 FY24[16] Education Division - Invoiced Amounts were $15.0 million, compared to $19.0 million in Q3 FY24[23] - Subscription & Subscription Service Revenue was $17.8 million, compared to $18.2 million in Q3 FY24[23] - Revenue was $18.6 million, compared to $20.2 million in Q3 FY24[23] - Deferred Subscription Revenue Balance was $34.1 million, compared to $28.2 million in Q3 FY24[23] - Subscription revenue increased 13% and Deferred Revenue balance grew 21% in Q3[14]

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $59.6 million, slightly below the $61.3 million achieved in Q2 last year, primarily due to government-related cancellations [44] - Adjusted EBITDA for the quarter was $2.1 million, landing at the top end of expectations despite government disruptions [44] - Revenue guidance for the year has been adjusted to between $275 and $285 million, reflecting a decrease of $7 million or 2.5% lower than last year [21][53] Business Line Data and Key Metrics Changes - The education business saw a revenue growth of 3% in the second quarter and is up 7% year-to-date, with invoiced amounts up 13% [40] - Advanced bookings for new services in the U.S. and Canada, excluding government, increased by 5% year-to-date compared to the same period last year [48] - The percentage of subscription revenue under multiyear contracts was 61%, indicating strong client retention [26][46] Market Data and Key Metrics Changes - Approximately 6% or $17 million of total business is tied to governmental entities, with $5 million in government revenue already canceled or postponed [13] - International revenues are expected to decline by as much as $4 million due to government actions and trade tensions, particularly affecting operations in China [14][15] - The company anticipates a potential $3 million impact on education revenue due to uncertainties surrounding the Department of Education [16][18] Company Strategy and Development Direction - The company is focused on a go-to-market transformation aimed at accelerating revenue growth from single-digit to double-digit growth in the coming years [19] - Investments of $16 million are being made to support this transformation, with a commitment to not cut back on these growth investments despite current challenges [22][82] - The strategic strength of the business model is evident, with a focus on helping organizations address mission-critical challenges [24] Management's Comments on Operating Environment and Future Outlook - The external economic environment is described as turbulent and uncertain, impacting revenue growth but not the overall business model [8][11] - Management remains confident in the actions taken to accelerate future revenue growth and expects significant growth in adjusted EBITDA and cash flow [9][21] - The company is monitoring potential impacts from government actions and is taking steps to reduce costs in affected areas [22][70] Other Important Information - The company has over $100 million in liquidity and has invested approximately $105 million to repurchase shares since 2022 [51] - The guidance for the third quarter is set at revenue between $67 and $71 million, with adjusted EBITDA between $4 million and $6.5 million [53] Q&A Session Summary Question: Impact of government actions on revenue - Management confirmed that the $17 million in government-related revenue is primarily from federal agencies, with expectations that this revenue will not be recovered this year [60][69] Question: Education revenue and funding sources - The company clarified that it does not sell directly to the Department of Education, and funding is expected to continue flowing from state governments despite potential federal cuts [74][76] Question: Guidance and future expectations - Management indicated that the current guidance reflects a one-year step back, with expectations to return to original EBITDA projections in the following year [85][89] Question: New logo sales and project starts - Management reported strong new logo sales and confirmed that project starts have not been delayed despite external uncertainties [108][113] Question: Long-term growth and market strategy - The company sees significant potential for growth in both new client acquisition and expansion within existing accounts, with a focus on maintaining a balance between these two strategies [132][134]