McGraw Hill, Inc. (MH) Earnings Call Transcript & Summary

Hello, and welcome, everybody. I appreciate you being here as we go through McGraw Hill's results for fiscal Q1 2026, and afterward we'll open things up for questions and answers. With me on this call are Simon Allen, our Chairman, President, and Chief Executive Officer, along with Bob Sallmann, Executive Vice President and Chief Financial Officer. On this call, we'll be sharing forward-looking statements regarding the company. Such statements rest on present expectations and today's economic conditions. Forward-looking statements, estimates, and projections are by their nature exposed to considerable economic, competitive, regulatory, and other uncertainties and contingencies, and many of these lie outside management's control. These forward-looking statements are likewise governed by the cautionary statement contained in our earnings release and the slide presentation; further specifics appear in our 10-Q and other SEC filings. Key assumptions and factors that might lead actual results to diverge materially from what the forward-looking statements describe are laid out in the earnings release we issued today, as well as in our SEC filings. We'll also touch on certain non-GAAP measures. Our view is that these measures offer helpful supplemental data that, while not a replacement for GAAP measures, permits more transparency when reviewing financial and operational performance. In the press release, the appendix of the slide presentation, and as supplemental files on our website, you'll find definitions of terms along with a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures. If you're listening to a recording of this presentation, please note that what we say here reflects today, August 14th, 2025, and hasn't been updated since. With that, I'll hand the call to our Chairman, President, and Chief Executive Officer, Simon Allen.

Thanks, Danielle, and good morning to all of you; it's a privilege to speak with you today following what marked a hugely important achievement for McGraw Hill — our July IPO. If you're either new to the story or re-engaging with it, I'll give a quick overview of the business, and then I'll hand things to Bob, who will walk through our fiscal Q1 results. The McGraw Hill name is probably familiar to all of you. Across more than 137 years, our adaptable and inventive organization has stood as a dependable worldwide frontrunner in education, meeting the changing requirements of more than 60 million learners and educators across the globe. Located throughout over 100 countries, our committed and talented team of 4,200 employees — among them more than 700 technology specialists and data scientists — is bound together by our mission, which acts as a crucial point of distinction and the foundation of our culture. We run a scaled B2B model that stands alone in supporting the whole learning lifecycle. Starting with pre-K, continuing into higher education, and extending to professional learning, we reach 99% of K-12 school districts, 82% of U.S. higher education institutions, and 94% of U.S. medical libraries. When we combine insights pulled from data with what we know about how learning works, we're able to serve every student's unique requirements and also tackle the real frustrations educators face — and because of that, demand keeps rising for the premium content and digital tools we offer. You can see this competitive advantage reflected in the market share we've picked up, and it stands on three distinct foundations: our intellectual property, our information, and our team. Over the past ten years, we've invested upwards of $2 billion in technology, which includes work in artificial intelligence long before it was widely adopted in education, and that spending built a digital ecosystem operating at serious scale. Thanks to it, we support over 26 million paying digital subscribers and organize in excess of 19 billion learning interactions annually; all of that information fuels a powerful cycle of feedback that drives both our expansion and the creation of new products. Thanks to disciplined execution and our responsible, high-impact use of technology — plus the deep, scaled data and insights we can draw on — McGraw Hill has been transformed into a leading worldwide provider of information solutions for education. Information may be abundant today, but what we create are authentic learning experiences that go beyond tech-enabled point solutions. AI gives our business a tailwind, because it allows us to tailor our content to what each individual student and educator needs, which supports knowledge building; machine learning and GenAI capabilities have been integrated into our learning solutions, and those solutions sit on top of our substantial content and data moat. This improves our ability to provide personalized learning, leveraging AI along with our assets at a scale that our competitors simply cannot equal. Our pedagogy-first approach and continuous assessment powered by artificial intelligence reinforce the essential social dimension of the student-teacher relationship. By concentrating on clearly set strategic priorities, we reliably generate sustainable growth and innovation through growing our market share, widening our addressable market, and putting money into new digital capabilities, all the while boosting operational efficiency; we keep investing boldly in new solutions and capabilities to help our core business and open up growth in new market opportunities. So in fiscal Q1, we brought in total revenue of $536 million, recurring revenue of $388 million, and adjusted EBITDA of $191 million. Each of those figures landed at the top of the ranges we disclosed in our July S-1 filing. Digital growth carried on, posting $325 million in revenue for the quarter. Our notable outperformance in higher education showed up once more, as our market share hit almost 29%, per trailing 12-month data from MPI. Beyond that, we again saw robust capture rates in K-12. We also rolled out new solutions throughout the business, strengthening our portfolio with personalized-driven instruction. Notable fiscal Q1 launches included ALEKS for Calculus, a fresh program serving K-12 and higher education that tackles a vital need in STEM learning and widens our addressable market opportunity. ALEKS Adventure sits at the opposite end, our K-5 offering, which grew into two additional grade levels, allowing deeper supplemental market penetration. During this earnings call, we want to highlight that McGraw Hill Plus, the proprietary platform we built for monitoring how students are progressing and for creating profiles of learners over time, has just added a third-party math assessment partnership with Propel. The Baker Learning Analytics Prize, which honors innovation and advancement in applying data to improve education, went to McGraw Hill Plus. Turning to Evergreen, we are leveraging the advantage of having moved first, delivering ongoing content refreshes for an expanding list of titles within our higher education segment, which also saves instructors considerable time. Emerge, our next-generation core literacy offering for kindergarten through fifth grade, launched in August. Grounded firmly in the science of literacy, the nationwide pilot we are running can be accessed through the entire digital range and supports the complete data dictionary. Emerge gives us greater assurance that we can keep leading in K-12 as the broader market opportunity we expect in fiscal 2027 and 2028 unfolds. While we develop these AI-native learning offerings, we're also busy weaving GenAI features into the products we already sell. Take AI Reader, for example: it delivers tailored learning to students and has pushed time spent on the Connect platform up by more than 30%. We recently introduced AI Reader into our first aid forward medical solution, where it is creating encouraging usage patterns among professionals worldwide. And with Scribe, a GenAI tool we built in-house, we're achieving solid efficiency gains — it reduces both the time and expense of producing content, all while keeping a person involved in the process. Opportunities to apply what we offer keep expanding throughout each of our divisions, and that creates room for margins to improve gradually. As I close, let me emphasize again how fundamentally steady this company is, thanks to the relationships we've built over many years, our expertise in the education field, the dependable rhythm of school terms, agreements with institutions that stretch across multiple years, and the efficiencies that come from our size. The broader forces shaping our sector continue to point in a favorable direction. Neither the recent shifts in federal education policy nor tariffs have produced any meaningful effect on us. We remain certain that learning will always matter around the world and that our operations can weather challenges. I take enormous pride in everything we've achieved while guiding this changing industry, with even greater possibilities lying ahead. I'll hand things over to Bob now, and he'll take you through the details of our finances.

Thanks, Simon, and good morning to all of you. Last month's IPO mattered a great deal for McGraw Hill and showed the strength of how we operate and our financial performance. Using the net proceeds from that IPO, our balance sheet is now stronger: we cut gross debt by $386 million and lowered annualized cash interest expense by roughly $30 million. Going forward, we expect to gain from more flexibility to put money into strategic priorities and fuel future growth as we strengthen our position as a market leader. Before we get into our fiscal Q1 results, I'd like to restate how appealing our business is and how well it can do across economic cycles. Simon already covered this, but just to restate it: our reach spans pre-K through 12, colleges and universities, and professional learning, and we do that on a global basis. Because we can see into those markets so clearly, we're able to predict how the business will perform with a lot of confidence, and having so many different revenue streams makes us resilient. When it comes to higher education and professional, the money arrives via annual contracts, whereas K-12 mostly runs on multi-year procurement cycles where cash comes in at the front end; our visibility into those cycles going forward is strong, and nowhere is that more obvious than in California, Florida, and Texas, the three states with the largest K-12 populations. For both K-12 and higher education, the seasonal patterns in our business follow the academic calendar. So internally, our lens is the first half versus the second half, because roughly 60% of revenue and 65% of adjusted EBITDA typically come in during the first half of our fiscal year. Now, turning to fiscal Q1: it was a solid quarter, even if seasonally small, and the results came in at the high end of what we had expected and previewed in our July S-1 filing. Revenue reached $536 million, a 2% increase year-over-year, driven by ongoing share gains in higher education that outweighed the reduced opportunity in K-12. Digital revenue for Q1 totaled $325 million, rising 7% year-over-year. Taking a look at our numbers, quality recurring revenue — that's digital subscriptions plus K-12 multi-year contracts — accounted for 72% of total revenue, coming in at $388 million, which is a 7% increase compared to the same period last year. Transactional revenue made up the remainder, and that's specifically print and e-books, which declined as we anticipated, landing at $148 million, an 8% drop year-over-year. When we look at our remaining performance obligation, or RPO, it was $1.65 billion as of the end of June, and that provides us with visibility and confidence going forward. On gross profit margin, we hit 77%, an improvement of more than 90 basis points versus last year, and that was driven by our digital mix. Adjusted EBITDA came to $191 million, which is up 7% year-over-year, reflecting a 36% margin and a 150 basis point gain. Operating costs show our ongoing strategic spending on sales, marketing, and R&D to fuel innovation, plus continuing efficiencies in general and administrative work. Moving to our business segments, in K-12, recurring revenue for fiscal Q1 came in at $184 million, up 10% from a year earlier, driven by strong prior-year Texas and Florida science sales, partly offset by weaker transactional revenue. Total revenue reached $271 million, down 1% year-over-year, in line with what we expected. Within K-12, we anticipate the year-over-year revenue decline will become more pronounced in fiscal Q2, seasonally our largest quarter, since the comparison gets harder. As I mentioned, our operations follow a first-half, second-half pattern, because school districts placing orders for the upcoming academic year might shift those purchases between the first and second quarters of our fiscal year. I'd like to note that we're performing very well in the early portion of our selling season—our capture rates have exceeded what we anticipated, and we're coming out on top in just about every significant market opportunity. Looking ahead, in addition to the new literacy pilot rolling out across the country, we've also secured our position for the major California math opportunity in fiscal 2027, and we believe we're well positioned for this larger market opportunity. The basis for our confidence is the strength of our RPO at the close of June, which provides us with multi-year visibility. That was mostly from K-12, which came in above what we expected. On the higher education side, fiscal Q1 revenue reached $182 million, up 14% from a year ago, mostly because we keep gaining share. Recurring revenue rose 7% over last year to $160 million, thanks to digital growth. Along with strong U.S. summer enrollment, Inclusive Access keeps building momentum, with sales hitting $55 million, an increase of more than 30% year-over-year. Through the Inclusive Access program, students get affordable day-one access to digital course materials, which supports higher self-care. It's still a major growth driver with lots of runway. Evergreen represents a more recent breakthrough and serves as a major point of distinction, because it provides continuous content refreshes and reduces the workload for instructors, and 95% of professors choose the latest product version. Over 30% of our higher education revenue comes from titles on Evergreen, and that number continues to grow, which drives even stronger retention and share gains. In global professional, fiscal Q1 revenue came in roughly unchanged at $35 million. Recurring revenue rose 4% compared with the prior year, as gains in medical and engineering were counterbalanced by exiting non-strategic print, a drag that will gradually diminish. Abroad, fiscal Q1 revenue declined 12% year-over-year to $51 million, with roughly half of that attributable to order timing, along with the shift to digital. Turning to how we did on cash and what the balance sheet looks like: when fiscal Q1 closed, we held $247 million in cash along with $697 million of total liquidity, and nothing had been drawn on our revolving credit facility. As of June 30, net leverage came in at 4.1x, measured against adjusted EBITDA. In July, we directed the net proceeds from the IPO toward reducing term loans, and that lowered our pro forma net leverage ratio to 3.6x. We also got moved to a positive outlook by S&P. Operating cash flow followed its usual seasonal pattern of being a use of funds this quarter, and deferred revenue created additional strain. Now for our financial guidance covering fiscal year 2026: we're projecting revenue in the range of $1.986 billion to $2.046 billion, representing a decline of 5% to 3% compared with the prior year. We expect recurring revenue between $1.477 billion and $1.517 billion, representing year-over-year growth of 1% to 4%. Our projection for adjusted EBITDA falls between $663 million and $703 million. That outlook rests on steady, foreseeable patterns within the K-12 sector, where the fiscal year 2026 downturn reflects how major state purchasing cycles are timed — a long-recognized dynamic that aligns with what we've seen historically. Outside of K-12, we're looking for modest top-line expansion during this year, which highlights how resilient our diversified portfolio is. Although we're only at the beginning of the K-12 selling period, the leading indicators have me quite encouraged. Our share gains are happening faster than we'd initially anticipated, and we're seeing the payoff from our pricing approach. Further evidence of early wins comes through the strength of our RPO, which is performing above expectations. In higher education, we're likewise noticing promising initial signals of share capture and competitive wins. These favorable trends across our key segments leave us in an excellent position for fiscal year 2026, strengthening our confidence in the guidance. Our plan is to tighten the full-year guidance range with each passing quarter. Just a quick note before we go further: by the time our second quarter wraps up, we typically have a much better read on how the full year is shaping up. That's because the bulk of the K-12 selling season is behind us by then, and we can get a sense of higher ed's spring term based on what we're seeing in the fall. As we build out our model for fiscal year 2026, our expectation is that total capital expenditures, product development included, will land at 8%-9% of revenue — the same range we've seen in past years. On top of that, we're looking at a meaningful reduction in our tax liability, along with roughly $45 million in cash taxes, versus what we had assumed internally. That change stems from federal tax policy updates that came through recently. Based on the updated work we've done, our estimate for taxes now falls in the range of $30 million to $50 million, and that applies whether you look at it on a cash or a GAAP basis — which creates real value for the company. Roughly $30 million a year in cash interest savings will come from paying down debt with the IPO money, and the impact of foreign currency on revenue is essentially nothing. When we look at fiscal year 2026, we're expecting unlevered free cash flow to fall toward the bottom of that 50%-100% conversion cycle range. Lower cash interest is going to give our free cash flow a lift. We're still putting reinvestment in the business first, along with paying down gross debt, and we may also pursue strategic tuck-in M&A. Over the near term, we'll keep an opportunistic stance on the capital structure, and over the medium term, we remain committed to delevering to 2%- 2.5% times net debt to adjusted EBITDA. Our confidence in achieving the 2026 guidance hasn't changed, and we think we're in a strong position to get back to growth in fiscal year 2027 and beyond. Operator, please open the call for questions.

Hello everyone, and good morning. Adam here, filling in for Steve Koenig. I'd like to discuss the different ways GenAI could reshape the learning experience — covering both the advantages and the fresh difficulties it creates for learning outcomes, plus how teachers are interacting with this technology and tackling those difficulties. Then, as a follow-up, what risks and opportunities does GenAI create for McGraw Hill — chances for McGraw Hill — when it comes to how it affects competitive dynamics, or improvements to your offerings and the value you deliver to educators?

Hey, Adam. Hello; this is Simon. Thanks; that's an excellent question, and it's quite timely. As you'd expect, we're asked about GenAI constantly, and since your question is lengthy, I'll try to give you what I hope is a helpful response. Please feel free to follow up if you have anything else, or jump in if you'd like. The initial and most crucial point to stress again is what we stated during the prepared remarks: this represents a major tailwind for the company and, I believe, for our sector as a whole. Here at McGraw Hill, our view is that AI genuinely delivers the most value for education and for the experience of students and teachers when it accomplishes three objectives; these three objectives, first, Adam, it has to assist in eliminating the administrative load on educators. They're dealing with an enormous amount. They require more time with students, and what we need to do is ensure we eliminate that load through everything we build for them using AI. The next component is that it has to, and this ties in, it has to strengthen human connection and that capacity for the student-teacher relationship to truly develop, since that's what matters most for learning, to ensure the effort involved in learning is accomplished. Finally, the third item is that it has to offer assistance to students, helping them with their individualized learning path, the way they reason on their own, and the way they move through their courses; that's the backdrop. Those three components are essential to why we're sure it's a tailwind. If I can, allow me to share a few concrete illustrations involving McGraw Hill because, and Adam, you might be aware of this, we've been applying AI and machine learning for more than 10 years at this point, especially in products such as ALEKS. You might know it, but this is a fantastic mathematical algorithmic instrument that truly enables that adaptive learning or personalized learning approach. The platform, pardon me, is remarkably strong in the way it directs students in real time, and that's absolutely vital. The second component that we've genuinely advanced considerably and that we know, pardon me, faculty desire, particularly we've done a lot of research with the teaching community and faculty regarding the necessity that they must obtain with AI. Their goal was to get AI integrated within all the extensive, trusted resources we already possess—more than 270,000 course materials and titles in our catalog. How can we connect learners to that material via offerings such as AI Reader, which we recently brought to market in higher ed? That product works to improve each student's personalized learning path and ensures we truly demonstrate how they can build up their skills. Since we are a highly trusted organization and institutions recognize and have great confidence in us, we guarantee we are applying AI ethically and genuinely assisting faculty in grasping its correct application, so they can build their own tools with AI alongside us to improve their assessments and the way they tailor their classes throughout the group. That was a lengthy response, yet basically for us, this represents a truly outstanding chance to expand our capacity for personalizing learning. On the operations side, offerings such as Scribe let us ensure we are optimizing all of our content creation and development while cutting down both the time and the expense required for it; we observe benefits everywhere with AI.

Hi, and thanks. Before anything else, a fast congratulations to everyone on getting the IPO done. For my first question, I'd like to dig into what's happening in higher education, and perhaps Bob could elaborate on the various elements behind that segment's robust beginning to the year? I believe you mentioned enrollment momentum, share gains, and Inclusive Access — so how do you view the growth path across upcoming quarters, particularly given whatever visibility exists on the fall enrollment situation and shifting adoption of Inclusive Access throughout the system? Is Inclusive Access still spreading across higher ed?

Absolutely. Appreciate it, Stephen. To begin, during the quarter we enjoyed considerable success, though let me point out this is the quarter that's seasonally on the smaller side. The victories we're describing, along with the share gains, come from our summer semester. Frequently you'll find there are two components, two enrollment periods, inside the summer semester. We're only in the initial stages of that; certain share gains did materialize. We delivered some genuinely strong results, as you noticed, with 14% growth. What's behind it, once again, is share gains. When we consider our position moving ahead, a few factors are working in our favor. Ongoing share gains. We've discussed Evergreen and what advantages it should deliver. Our expectation is that it keeps fueling continued share gains. There are additional early signals we're observing. Among them are high school graduation rates; we're also looking at some FAFSA application data. Every one of those is moving in a very positive direction; nevertheless, we won't truly understand our performance until students physically arrive on campus. We feel quite optimistic regarding how the rest of the year shapes up for us, yet we stay cautious until students have walked through the door. Regarding Inclusive Access, and Simon has brought it up, we've addressed it before; for us it's been a tremendously successful program, boosting the shelter rates. That growth has reached over 30%; we recognize that this channel has enabled us to keep expanding and capturing share; putting all of those pieces together, I'd say our position is very strong for the rest of the year and beyond.

Understood. That is useful. As a quick follow-up, I was hoping you could tell me something about Scribe. It appears there might be substantial efficiency opportunities and possible margin improvement, in my view, if you begin applying those tools alongside AI more extensively in producing content. Could you speak to that — how the company right now uses those tools — and give any indication of when Scribe might become even more significant?

Yes, yes. We have said that we are at an early stage, and in some instances what we observe is a 60% decrease in time and a 50% decrease in total cost for producing content. The places where we notice this would include question banks, chapter summaries, items along those lines; at this point we have rolled that out throughout the whole company, so we are seeing it across every one of our segments. Even though we are at an early stage, we stay hopeful that this will keep expanding. As we have said, there is considerable spending here for us to pursue and capture, but we are still fairly early. The positive thing is that we have now rolled it out across all of our segments. As we move into the coming quarters and into next year, you will hear us discussing more extensively the financial effects that we are observing.

Great. Thank you.

Hey, Stephen, this is Simon. Just very quickly, to build on a few things Bob mentioned, especially regarding your first question, since we shouldn't undervalue how genuinely strong our higher education results have been. As you've observed, we've expanded, even though it's a small quarter, to increase revenue by 14% is truly a remarkable achievement for the group. Looking back across the past 5 years, our market share in higher education has risen 40%; as of today, on an LTM due basis, we sit at just under 29% market share, which represents meaningful growth. We feel very, very bullish, and that's today's catchphrase; we feel very, very bullish indeed about the way higher education is doing; we keep gaining share; we're extremely, extremely proud of that business since it performs so well; we thank you for asking about it, and we appreciate the chance.

Yeah, thanks. Morning. You said the K-12 selling season has started off well, and that you're seeing share toward better expectations. Could you give some shape to that? This is roughly California. If you could provide more specifics regarding 2026, and then as we look ahead to whether the market opportunity expands, what's the key innovation or what other things should we watch for that could bring more share gain opportunity?

Sure. You cut out a bit there, Jeff, but I believe what you're asking is what's actually fueling 2026? How are we building confidence about that? How are we positioned as we move into 2027 and past that in the wider market? Did I capture that roughly right?

Understood.

All right, sounds good. Yeah, so you're aware of where we stand on that, and like you said, we have a lot of confidence regarding 2026. Some early signals are showing up. First, we can highlight how strong the RPO is. You noticed it. It was visible on the balance sheet, and we're delivering excellent results with the orders flowing in. There are a few spots, as we noted, where we're gaining share faster than we originally anticipated, and that's happening across every area. Naturally, we launched a science program, and that program is active in districts and states across Tennessee and Alabama. Beyond that, we're also observing momentum in math and ELA. Something we take real pride in: when we examined the biggest market opportunities in K-12 for this year, we hold the lead in eight of nine of them. Keep in mind, our share in those markets is roughly 25% to 30%. When we consider our positioning, typically we capture a third of those opportunities to lead, yet we're ahead in eight of nine of the biggest ones. Very pleased by that, and our capture rate keeps exceeding what we expected. As we said, it's early in the selling season, correct? When we think about that selling season continuing through August, there's still a long way to go. Though it builds our confidence for the year, we remain somewhat cautious until we truly see the year finish. I'd share a few other things that make us quite happy in our supplemental intervention area. Simon brought up ALEKS Adventure. We're seeing encouraging early wins there as we broaden the TAM within our supplemental intervention space. All of this gives us considerable confidence looking through 2026. Other developments we're noticing: we made the list. Simon noted it, and I've also mentioned being on the list for California math. That's yet another area that, once again, adds some confidence as we move ahead. When we consider the market opportunity and our confidence in its growth, as Simon said, we reach 99% of every district. We enjoy strong relationships with state boards of education. We grasp that dynamic. Looking toward 2027, 2028, 2029, we understand the market opportunity, we know it's expanding, and we're positioned well thanks to those share gains, thanks to the innovation we're pushing with new supplemental intervention tools; we're adding success with McGraw Hill Plus. All of this puts us in a strong position for the rest of the year as we look ahead to 2027, 2028, 2029.

Understood. International may be a smaller piece of your business, I realize, yet you mentioned timing factors tied to specific regions. Which ones are those, and do they play out from one quarter to the next, or does this year bring an annual headwind for you? Thanks.

Yes, this is Simon. I'd describe it as unquestionably something that varies each quarter, and we aren't the type of organization that would take a natural order from July, say, and shift it into June; that isn't how we do things; it's really a matter of timing, on a quarterly basis. Regionally speaking, there's a great deal of enthusiasm within our international team spanning the whole of our professional business, higher education, and K-12. This shows up especially in areas where people hold a strongly favorable attitude toward the American approach to education. Consider markets such as the GCC in the Middle East, markets such as Mexico, such as Canada, where they're exploring methods of delivering curriculum material via technology and better technology infrastructure. That's the space where we truly excel. We perceive genuine opportunity in those places. When it comes to embracing a highly rigorous courseware digital delivery model, one that includes not only content but every bit of the assessment materials, the international community lags the U.S. somewhat. As the market's interest in that mechanism speeds up, I believe you'll witness additional growth coming from us as we keep going. It's certainly a thrilling potential opportunity for us down the road.

Thank you.

Thank you. Great question.

Hey Bob, hey Simon. To start with, congrats on how the IPO went. There are a few things I'd like to ask about, and the first is federal policy and how it could be affecting what you do. Do you have any fresh updates or new perspectives to offer regarding what's happened recently? And maybe, as a follow-up, actually, on the things you've discussed regarding supplemental and intervention solutions in K-12. You brought up how much progress ALEKS Adventure sales have made. I'm curious whether the setting for cross-selling those extra solutions into your core customers looks better or is improving.

Yes, hello, Russell. Simon here. Great to hear from you once more. Thanks for raising these points. I'll handle them one at a time. For sure, regarding the latest policy moves out of the U.S. federal government, there are truly no consequences for what we do whatsoever, mostly since, and this may already be familiar to you, in K-12, funding in that market is genuinely powered by state and local efforts. Where higher education is concerned, nothing at all has been announced in the way of changes that touch our business, since every one of the funding matters that has come up in higher ed, one month it could vanish, and the month after it could return. No matter what, the funding will still be provided, possibly via various federal agencies. Should the Department of Education no longer be the one doing it, the Treasury or the Small Business Administration might be. Crucially, nothing points to funding being cut, and that is genuinely confirmed and supported when you examine enrollment figures, even though they are preliminary, yet summer school enrollment is quite strong. The FAFSA applications, I believe, are at a record high for the fall. I believe we will witness a solid macro backdrop for higher education. As for international students, Russell, as you're very aware, we are a worldwide company; we will educate students anywhere on the planet, and we are extremely, extremely glad to do so; we truly do not observe any particular factors whatsoever. We are an exceptionally resilient company and proud of it; now, on your second question about supplemental intervention, we have enjoyed fantastic results with ALEKS Adventure for K-5, as you pointed out. It's wonderful to watch ALEKS, that truly AI-powered knowledge algorithmic program that genuinely assists students with their personalized learning; it's really nice to see it extend down into K-5. Broadly speaking, in supplemental intervention, we are witnessing ongoing interest. As you're aware, that purchase happens annually; we have incredible relationships with schools and school districts throughout the nation; we are seeing significant interest in the intervention tools we offer, additional materials that keep students involved and truly improve the learning process; that's positive news on that front. As you may recall, our share of that market stands at just 5%, and we're quite eager — plus we fully anticipate picking up substantial market share in the years to come. It's an extremely strong area, and an extremely strong avenue for us.