Financial Data and Key Metrics Changes - Revenue increased by 7% to $508.3 million in Q4 and up 2% to $1.6255 billion for the fiscal year [28] - Adjusted operating income decreased to $63.4 million in Q4 from $66.8 million in the prior year, with full year adjusted operating income at $35.8 million compared to $44.7 million [29] - Adjusted EBITDA increased by 1% to $91.2 million in Q4 and up 6% to $145.4 million for the fiscal year [29] Business Line Data and Key Metrics Changes - Children's book publishing and distribution revenue increased by 9% to $288.2 million in Q4, driven by strong performance in book fairs and trade publishing [29] - Education segment revenue decreased by 7% in Q4 to $125.7 million and down 12% for the full year to $309.8 million, reflecting continued headwinds in the supplemental curriculum market [31] - Entertainment segment revenue increased to $14.8 million in Q4 compared to $0.6 million in the prior year, with full year revenue at $61 million compared to $1.9 million [32] Market Data and Key Metrics Changes - International segment revenue increased by 8% to $76.8 million in Q4 and up 2% to $279.6 million for the fiscal year, driven by strong trade channel performance [34] - Foreign exchange had an unfavorable impact of $600,000 in Q4 and $1.6 million for the full year [34] Company Strategy and Development Direction - The company aims to strengthen its core businesses and unlock value from its iconic intellectual property while positioning for long-term profitable growth [7][8] - Strategic integration of trade publishing, book fairs, and book clubs is expected to drive long-term revenue growth and increase profitability [19][20] - The company is exploring monetization opportunities for its real estate assets to unlock value for shareholders [38][39] Management's Comments on Operating Environment and Future Outlook - Management noted continued pressure on consumer and school spending but expects modest revenue growth in fiscal 2026 [14][15] - The company anticipates adjusted EBITDA growth of approximately 20% in fiscal 2026, excluding expected tariff expenses [14][40] - Management expressed optimism about the education segment's potential for growth through state-sponsored programs and literacy partnerships [25][60] Other Important Information - The company returned over $92 million to shareholders in fiscal 2025, including $35 million in Q4 [37] - The company appointed two new independent directors to support business transformation and growth strategies [26] Q&A Session Summary Question: What are the sources of cost savings going forward? - Cost actions are primarily from non-discretionary functions, focusing on areas that are not revenue-driven [51][52] Question: What are the driving factors behind flat revenue expectations in the Education Solutions business? - Parts of the education business are performing well, particularly state-sponsored work, but overall market conditions remain cyclically difficult [54][55] Question: Is there a shift towards science-based reading approaches in literacy instruction? - There is a growing importance of science-based reading, and the company has materials aligned with this approach [57] Question: What is the pipeline for additional state partnerships in literacy programs? - The company is optimistic about expanding partnerships with state governments, although sales cycles are long [60][61] Question: What is the expectation for profitability in the entertainment business for fiscal 2026? - Profitability is expected to be slightly lower but in line with the current year, impacted by inflation [64] Question: What is the timing for potential sale leaseback transactions of real estate assets? - The company is working towards having something within the next 90 to 120 days regarding real estate monetization [66]

Fourth Quarter 2025 Earnings Call Presentation Thursday, July 24, 2025 Forward-Looking Statements / Regulation G This presentation contains certain statements made today which will be forward-looking. These forward-looking statements, by their nature, are subject to various risks and uncertainties, and actual results may differ materially from those currently anticipated. 2 Peter Warwick President and Chief Executive Officer Fourth Quarter & Fiscal 2025 Results Today's comments include references to certain ...

Core Insights - Scholastic Corporation reported solid financial results for fiscal 2025, with Adjusted EBITDA in line with original guidance and a focus on cost management and profit growth for fiscal 2026 [1][2][6] - The company returned over $90 million to shareholders during the fiscal year, including dividends and share repurchases [21][22] Financial Performance - In Q4 of fiscal 2025, revenues increased by 7% to $508.3 million, driven by strong performance in Children's Book Publishing and Distribution, and the contribution from 9 Story Media Group [7][17] - Operating income rose 13% to $53.5 million, while Adjusted EBITDA increased by 1% to $91.2 million [8][17] - For the full year, revenues reached $1,625.5 million, a 2% increase from the previous year, with Adjusted EBITDA growing by 6% to $145.4 million [17][18] Segment Performance - The Children's Book Publishing and Distribution segment saw revenues rise by 9% to $288.2 million in Q4, while Education Solutions revenues decreased by 7% to $125.7 million due to market headwinds [9][13] - The Entertainment segment's revenues surged to $14.8 million, primarily due to the acquisition of 9 Story Media Group [14] - International revenues increased by 9% to $76.8 million, reflecting strong performance in trade channels [15] Strategic Initiatives - The company is implementing a strategic reorganization to enhance long-term growth and profitability, including a focus on product development aligned with educators' needs [4][5] - Scholastic is targeting Adjusted EBITDA of $160 million to $170 million for fiscal 2026, with revenue growth expected between 2% to 4% [6][17] Capital Position and Shareholder Returns - Scholastic distributed $22.6 million in dividends and repurchased shares worth $70 million during fiscal 2025 [21] - The company is exploring sale-leaseback transactions for its real estate assets to enhance liquidity for capital allocation priorities [22]