Skillsoft Corp. (SKIL) Earnings Call Transcript

Good day, everyone, and welcome to Skillsoft 2024 Virtual Investor Day. I'm Chad Lyne, Skillsoft Head of Investor Relations. On behalf of the entire team, I want to thank you all for joining us today. We have a full agenda today, and you'll have the opportunity to hear from several members of our leadership team. Ron Hovsepian, Skillsoft's Executive Chairman will lead us off with a review of the business following his first 90 days in the role. Ron will outline our strategy and go-forward priorities to strengthen and reposition the company as we seek to capitalize on a large and growing market opportunity. Apratim Purakayastha or AP for short and Darren Bance will then cover their 2 respective business units in greater detail and how we intend to operationalize and execute our strategy. We will take a short break and then Matthew Glitzer, our Chief Revenue Officer, will discuss our path to growth and go-to-market transformation. And then Rich Walker, our CFO, will wrap up our presentation our financial frame that we believe will build shareholder value. We will then open the meeting for a question-and-answer session with the team. Before we jump in, I need to remind you that today's presentation and discussion will contain forward-looking statements about SkillSoft's business outlook and expectations, including statements concerning financial and business trends, our expected future business and financial performance, financial condition and market outlook. These forward-looking statements and all statements that are not historical facts reflect management's current beliefs and expectations as of today, and therefore subject to risk and uncertainties that could cause actual results to differ materially. For a discussion of the material risks and other important factors that could affect our actual results, we refer you to our most recent filings with the Securities and Exchange Commission. With that said, it's my pleasure to welcome Ron Hovsepian, Skillsoft Executive Chairman to the stage to kick us off. Ron.

Thank you, Chad. And thank you for everyone for joining us today at Skillsoft's Virtual Investor Day. Welcome, I'm Ron Hovsepian, Executive Chairman at Skillsoft and I'd like to share a little bit of my journey coming back into the company. A few months ago, I was retired. I took my wife to Hawaii and then the phone rang. Here I am, let's just say, my true belief is in the company. So I'm back here today, and I'm very committed to being an operating executive here at Skillsoft. I know Skillsoft well over the past 6 years as Executive Chairman and a member of the Board, I understand the intrinsic value inside of this company and I understand the potential in the market that we operate in and with the experience of being an operator and a CEO who really understands technology. I feel really good about the amount of value and the significance that we can unlock and create on our journey together. I've successfully designed and executed many transformations along my way. But today, I'm going to brief you on the state of the business and the growth plan. And I'm also giving a commitment to all of you to be transparent and communicate with you frequently on this journey. Thus, that's why we're here in 90 days. And it was a hard sprint by the team, and I appreciate it. So let's start with the investment thesis. It's a very compelling one, in my opinion. And today, you'll have an opportunity to validate that with us. Number one, on the left-hand side, leveraging a unique and powerful set of assets in our portfolio to win the market. We have over 225,000 content assets that are premium. We're really well positioned in as much, much more. The immediate changes that we want to make to fix the basics for a profitable company and the most important things that we're going to get done quickly. But at the same time, we need to invest to grow in our strategy because there's a market opportunity right in front of us that were naturally positioned to take advantage of that will allow us to achieve long-term growth. Allow us to reposition the company, capture this market and this market I'm going to refer to as the talent development life cycle. But our North Star and across the bottom is really what we are and what we're doing as a company to deliver that compelling value in the short term to our investors and in the long term. And I want to tell you 3 things about our company today: One, who we are and what we're doing; Two, how we fix our company; And three, how we grow and why I believe we can deliver that growth. So let's dive in. This is Skillsoft. One of the largest players in the industry with more than $0.5 billion of revenue. We're profitable with over $100 million of adjusted EBITDA. We have global reach to more than 60% of the Fortune 1000. We have over 100 million learners on our platforms, 60 million alone in the Codecademy platform. Our content portfolio consists of some 225,000 content assets in 30 languages with over 1,000 skilled benchmarks in it. We've been globally recognized for our products and what they've done. And most recently, we received an AI Excellence Award for work we began 3 years ago in making a product called CAISY, and you'll hear more about that as we go on. And AWS just recognized us as a Training Partner of the Year. Net-net, we have one of the largest -- we are one of the largest global players with a global footprint, decades of experience and the largest customer bases with deep enterprise routes. Most importantly, we've proven we Importantly, we're proven, we've delivered, and we understand the learning science. We understand content and how it relates to customers, and we understand how both of them are evolving. We deeply understand the relationship between an organization, their needs, the learners' needs and the HR functions needs, bringing them all together, and we're focused around the talent development life cycle that the HR teams are working on and companies and organizations are working on. So how is Skillsoft organized today? It's pretty straightforward. As you see on the slide, we have 2 BUs, and they're highly complementary. On the left side, 3/4 of our revenue comes from Talent Development Solutions, TDS. This is historically known as our Content & Platform segment. TDS is our digital learning platform and our experience for learning as well. It's inclusive of our B2B environment and our Codecademy environment, which is our consumer capabilities. 1/4 of the revenue on the right side comes from Global Knowledge, GK, historically in the ILT market. GK is our learning and in our instructor-led training segment, which can be done in person or virtually in a classroom. Together, this is a powerful and unique combination solution to our customers. We believe it is the market's only approach to a blended learning journey at a global scale. And now on to the best part, our customers. We have an amazing group of customers, and you see a select few here. That was one of the key things that drew me back in. We have a broad and loyal customer base, and they're the backbone of our company. And in the first 90 days, I've had a chance to get out and speak with many of these customers on the list as well as many others. And I continue to be floored by the number of customers that show up and believe in Skillsoft. We have 105% DRR for our large enterprise customers. People would love to have this list on their website. We're growing where it matters. So in the first 90 days, I also stepped back and said, let's look at our purpose. What is our vision? Where do we want to go? And what are we doing to reach the most compelling market opportunities where our customers needed to go. Our vision is very simple, and it's very clear, be the #1 talent development partner for organizations and learners. And today, we'll lay out the path to deliver on that vision. But before we head down that path, let's reflect on where we've been. We have a strong foundation, but we've not delivered on the company's full potential. The company took important steps, but our growth is below the market. So let's understand why. My diagnostic over the last 90 days, I really tried to look at all the strengths and challenges inside of our company. Now the good news is I think we've identified them all, and I've seen them and solved them before. So I have great confidence in our ability to deliver on what we need to get done. Strategically, we have an asset portfolio that's fantastic, and we've got customer centricity in our DNA but we were limited by some of the functional integrations inside of our company organization, and we didn't leverage the ecosystem of our partners to continue to drive growth. We also were slow to respond in the GK market and the Codecademy market to changes in. In codes case, Python was getting replaced with some AI. Both of them are going to live for a long time, but we didn't move fast enough to that. Operationally, we've reached more than 60% of the Fortune 1000, and we have a large customer and strong customer base there and growing DRR. But we were less effective in our routes-to-market and being able to take that value proposition and bring it down market. We also have a less than desirable performance management system. It's weak in several areas. Financially, the company delivered really strong adjusted EBITDA on a margin basis. But the primary cause behind that was GK's performance offset some of TDS growth. This led us to a deeper inspection as a team. Through that deep inspection over the past month in particular, we're making a determination to adjust our revenue guidance down for the year but we are reaffirming our adjusted EBITDA based on actions we are taking across the expense base. Rich will give more detail in his section. Now what's next? As we pursue the goal to be the #1 talent development partner, we have 2 basic priorities, fix the basics and invest to grow. So let me tell you what that means in detail. In FY '25 and '26, fix the basics means achieve profitable growth. So the financial outcomes I've listed here for you a very straightforward. $45 million plus of annualized expense reductions this year. We're going to reinvest 40% to 50% of that back into the business to grow. This is going to be a new muscle for us. It's different, and we're going to track each one of these investments in our value drivers. We expect to -- fully expect to return to top line growth next year and cash flow -- positive free cash flow. Executing these actions are going to be critical. As you see below, we're going to have a dual business unit structure where we're storing GK to profitable growth, and we're improving the overall operational execution of this company. We'll reallocate a large portion of that $45 million to invest in growth. That's the game plan. Now digging into the BU, this shift is pretty straightforward around fixing the basics. It was one of the first decisions I had to make in restructuring to the business units. We did report as a segment on a segment basis, but we remained functionally disjointed and we were functionally driven organization. That lacked clarity on profitability and ultimately, decision-making and accountability. What we're moving to is very clear. This new structure is designed to deliver benefits, the benefits of clear leadership, decision-making and accountability through the 2 GMs will enable the corporate functions to support those pieces as we go along the journey, and we're tailoring our strategies to each one of these markets, the product, the go-to-market, the customer success. And we will have efficient decision-making much closer in the market to the customer and the market. The ability for each BU to deliver distinct profit is also critical to our long-term success. And this will give us the efficiency while maintaining great connectivity in those red arrows, and I'll explain that deeper to you. Now on my journey, a number of you as investors have asked me, why are these 2 together? And what I've answered to you is the following: having reviewed everything, we have 2 businesses that are highly complementary. They have some differences in the execution, but overall, highly complementary to what the customer wants. It gives us a differentiated value proposition. Now as you look along that top row, what you're going to see there is multimodal blended learning bundle. That's the 2 pieces coming together. That is very unique. That top row represents everything that a customer wants. The bottom row is what you see as examples of how we complement each other within the business for Skillsoft. And what you see there is we're able to take some of our intellectual assets in TDS and quickly start a program in GK. These are the kind of things that really differentiate us in front of a customer especially our large ones. We have a laser focus on our operational execution as part of it. And it's rare for me to speak about organizational structures and operational frameworks. But in this case, this is the next set of actions that I find are very important for us to do in fixing the basics. There are 3 main outcomes that I expect from these improvements. On the far left, we're going to introduce a new performance management system intended to improve visibility, predictability and accountability across the 2 business units and the supporting corporate functions. We'll transform our workforce to be the prized possession of our company on upskilling in the market and the cultural shift. So we can be the showcase to all of our customers. And in the third column, you'll see our go-to-market transformation and excellence. The GTM excellence here is significant because we have to drive more productivity in our sales and go-to-market capabilities. I expect to see an improvement of 5% annually over the next few years. All of that translates into a strategic reallocation that we're going to be able to deliver against with that $45 million plus on an annualized basis. Again, just under half of it will be -- sorry, more than half of it will be permanent in our savings and the other piece will growth. We're reallocating in these key areas to drive the strategic initiatives. And after reallocation on the right-hand side, what you see is about 20% of our overall expense base will go towards driving new growth initiatives by the company. These are our key priorities. That's ultimately what's going to get us above-market growth rates. That's what I care about for the company in the long term. So I gave you my diagnostic of the company. We talked about fixing the basics. And now we get to really talk about the fun part of what I see in front of us. Based on the fixed the basics work, when I look into FY '27 and beyond, we can perform at a whole another level financially. We can grow faster than the market. We can be an industry-leading financial profile and these key actions of taking our AI work that we're developing today on innovations, we'll align that to the market needs that will help us drive additional new routes-to-markets and partnering will be at the epicenter of doing that and allowing us to scale at that next level. This new opportunity around talent development is what I'm excited about and why I'm back. So let's talk about this opportunity and how it's unfolding. What's really driving this is the reskilling revolution, that reskilling revolution is affecting 1/3 of all employees in the global workforce. That is a significant challenge to the C-suite, and it's become an imperative. 81% of corporate C-suites have identified this. The workforce transformation that all these companies will feel will hinge on their ability to identify the gaps in their organization, fill those gaps with new skills and continue to educate their own employees and the new ones they bring in as part of that journey. And AI will just play a center role in generating the change as that catalyst and we'll also see us be able to really take advantage of that. That critical skill and all these pieces together create great tailwinds for us to ride. Now looking at the technologies. You look at that red line there, that really explains all the technology disruptions that have happened to organizations and learners. And what you see in the black line is the ability to absorb those changes. What you're seeing is just a widening gap and the organizations are struggling to keep up with it. We refer to that as the upskilling programs. Those upskilling programs are now just more and more important as we elevate this issue. And I've talked to customers just in the last week, 2 of them pointed this out to me as major and major corporations that this is something that needs to be done, and they're very excited that we're focused on it. What this also means is increased spending. Organizations will spend on this challenge in a very large way. Now an average of $4.5 million, that's a significant number on training, but that's every size customer. One of those customers I was speaking with last week they spend over $1 billion, $1 billion. And to date, much of the spend in these organizations is on internal, like 90% in general, but that external spending is now starting to shift. So why? Why is it shifting? What's happening out there? So let's look inside the HR function that's driving that talent journey. As you see the red in the black boxes, they represent functions that need to be done to deliver on that talent journey. And you see it's highly fragmented, and there are discrete solutions for each modality and content area within learning as well as their own internal processes that cut across all the different functions. So that result really is a mess of some data, a lack of process integration in general and inefficient spend by the corporations. Their learners and organizations are now demanding better business outcomes as part of their learning investment. So there sits the challenge. And in my opinion, there sits the opportunity. So no wonder they're looking to us for help. We're naturally positioned to provide for it, and I'm so excited about that to become the #1 talent development partner. So what is that, Ron? Well, the best way for me to explain that to you is to bring it to life in a customer example. This customer is live, and it's real. 200,000 employees globally, they asked us to connect their content, our content an external content into a coherent learning journey at a global scale, that's over 1 billion with a B hours of training coming together for their 200,000-plus employees on our platform today. We're already doing this. AP will talk about it more. I'll give you more examples. Matt will as well. And as you look to the left side of this chart, what you're going to see here is just how unique this is and how we're naturally positioned to do this. And we've demonstrated it with not one customer, but hundreds of customers. I just mentioned that one. I have over 100 -- about 115 of them in the Fortune 1000 already. This was great research that was done that I'm very excited about. This market research is here on the page summarize. So as you look to the left side, you see buyers of online learning content. That's where we grew up. On the right-hand side, what you see is the journey to talent champions. In the past, most customers buying online really just look at big learning digital catalogs. That's a nice market. It's still growing 5% and it's the majority of our customers. We need to continue to capture more share there. But this evolving into a newer, faster-growing piece of the market that is more profitable than the market of buyers of online content, talent champions. And this construct, the way to think about it is less procurement purchase oriented and much more about organizational investment at the highest order to drive talent in the organization as a business growth driver as a CEO. And a few of those attributes to the following: it's what we see when we talk to the customers from the research, they're tying HR to hold the strategic responsibility in the business outcomes. They're also saying we need enterprise transformation for all journey and you got to balance that with the learner's interest. Looking for integrated solutions with interactivity and blended learning delivery. That's what they're asked after and we already see this evolution already happening with those hundreds of customers. This chart here will help you visually see what I'm referring to. This shift is really important because this is the new market opportunity that we are naturally positioned to go serve. Overall, the market size is $400 billion and growing at 7% to 10% annually. Some of the subsegments are growing even faster at 14% to 16%. And you're going to hear more about that from us. You'll hear from AP, Darren and Matt on how we're repositioning the company to better address this full spectrum of customers, but specifically and especially building off the strength of the talent champions we have today. Now when you think about a talent champion and how you're going to serve that talent champion, it's really important to understand that you're here to drive revenue with your partners and you have to collaborate across that entire talent and technology ecosystem. We announced 2 days ago, a collaboration with Microsoft that underscores the power and validates what's happened in our comprehensive blended learning and offering. This leverages the core elements of TDS and GK. It gives us a new level of access to Microsoft customers and the ability for us to adapt to a huge technological changes. It highlights the leadership that we have in Gen AI skilling, which AP will cover more and the power of partners, which Darren and Matt will hit hard in their sections. Simply put, we are uniquely positioned for this moment, driven by the huge technological change that's happening. So in summary, we have a compelling action plan to fix the basics and to invest to grow. We have cost reduction, margin expansion, and we're positioning the company to return to top line growth and free cash flow generation by FY '26. But we're also thinking of the full future of value here we expect to be delivering at or above market growth with an industry-leading financial profile in '27 and beyond. But you got to have a great team. So I'm proud of the team that is helping design this and execute what we're doing. Rich Walker is our CFO. He's a veteran CFO with lots of our company knowledge and he's lived through high-growth companies and turnaround situations. Our 2 GMs, AP, great experience with our company over the last 7, 8 years, knows how to really work with our customers, and he's been at the epicenter of the story that I shared with you on talent champions. He also has past experience in go-to-market and as a general manager. Darren, on the other hand, is new to our company and brings a wonderful external perspective to the business with multiple experiences across the ILT sector. Matt comes to us with a proven track record in go-to-market. He knows what to deliver inside the large enterprises. He knows how to deliver it, and he also knows how to build high-velocity market teams and go-to-market teams from a routes-to-market perspective. He's done this work. Lindsey, who heads up our strategy, she's a decade worth of experience inside of McKinsey. That also allowed her to have bring us great industry experience, which is fantastic from my perspective. And she has a great understanding of this talent life cycle and the research we did. Ciara, who leads our HR function also brings a wonderful experience in scaling workforce transformation from her time at Dell. She also deeply understands the performance management that I'm looking for inside of our company and the culture that needs to be built in that approach and aligning it to our needs as a company. Orla, who is our Chief Information Officer, really has learned how to drive growth through our IT and data work that she's done in the past. And she's done it inside the go-to-market function at Dell and she understands how to scale that growth. And beyond this leadership team, we have a really deep bench of talent who will drive this growth. And I truly would be remiss not to mention the dedication and passion that global team brings every day to every one of our customers. So we'll continue to bring talent. We'll continue our journey of our own workforce transformation, and we'll give you more and more updates in the months to come. Wrapping up to recap, we have a compelling investment thesis. It brought me back to be an operating executive out of retirement. We have a compelling large market opportunity that we're naturally positioned to take advantage of. We have the right strategy to capitalize on it, and we're laser-focused on improving our execution capabilities, and we expect to deliver -- fully expect to deliver our financial outcomes in the near term, the medium term and the long term that we believe will unlock and create more shareholder value. With that, I'd now like to hand it over to our General Manager of Talent Development, AP.

Thank you, Ron. And good day to everyone. My name is Apratim Purakayastha for short AP. I'm the General Manager for Skillsoft Talent Development Solutions business unit. I have been here for 8 years. I have played a leadership role in creating Skillsoft modern products that I'm going to talk to you about today. I know our customers and our operations quite intimately. Previously Skillsoft. I started my career in the IBM company. I built WebSphere branded products as well as IBM's early SaaS products. I picked up a significant amount of operational experience in our payments and fin tech company called ACI Worldwide, where I was the Group President of a $400 million P&L on SaaS payments business. While at Skillsoft, I was also concurrently the Chief Operating Officer of SumTotal, a wholly-owned subsidiary of Skillsoft. Today, my update will consist of 3 separate segments bearing 3 messages. First and foremost, we have a strong foundation of products and customers with 100 million learners and we have significant competitive advantages. As Ron, our market is also shifting to a growth higher-value zone of talent champions, and we are very well positioned to actually capitalize on that market shift. We know what go-to-market and product actions to take, and we are already executing on such actions. But first, let me introduce the major components of the Talent Development Solutions business unit. Skillsoft has an enterprise-grade platform serving 3,000 customers worldwide and 40 million employees. Codecademy is a world-renowned consumer scale and consumer experience level platform, serving over 60 million learners. Together, they offer world-leading AI-led interactive experience, which is rich and multimodal, extensive coverage of topics, depth and breadth and worldwide scale, data privacy and security. These are some facts and figures about the Talent Development Solutions business unit. We have significant revenue hundreds of millions of dollars, which is composed of 95% SaaS subscription revenue. Our geographic mix is a little heavy on North America which actually presents a significant international growth opportunity that Matt Glitzer, my colleague will cover. We have good penetration in Fortune 1000 and federal customer base but with significant headroom to grow. Our learner engagement is industry leading and we enjoy 8-plus years of average customer tenure. Our products have been consistently recognized for innovation have been awarded. Of late, very recently we got the AI Innovation Award for our excellent work on AI simulations CAISY that I'll outline to you later to you in the presentation. I was talking about competitive advantages we have. These are the 5 major competitive advantages we believe we have that are sustainable. Let me cover each of them into a little bit of depth. First, AI-led interactive multimodal experience. We're the only company that offers AI-led hands-on programming, a collection of hands-on labs as well as blended modalities such as ILT and coaching. We are supported through learner advocacy through a premium brand for technology learning called Codecademy. In fact, the other day, I was sitting down with technical personnel at a customer site. And they volunteered who learned on core Academy, their friends run on Codecademy, and we actually ended up winning the business through learner advocacy. We believe in outcomes. Learning these days is all about delivering measurable outcomes. We have hundreds and thousands of benchmarks that can be arranged into cohort-based learning and skilling where you can measure concrete outcomes such as on-boarding velocity or first-time manager competency. We have enterprise grid security. Our FedRAMP certification mix is very strong in the federal public sector in the United States. Our UK.gov certification helped us expand in the U.K. government area recently. Our excellent position on EU data security and data privacy helps us with our expansion in European Union large customers. I already said we have wide and deep coverage in various critical elements of skill development for an enterprise such as business skills, technology skills and compliance, which allows for us to address various buying needs and consolidation opportunities for our customers. We not only have capabilities. We have 25 years of learning science experience as to how to curate those capabilities for effective learning outcomes. We will often start with establishing a baseline taking a set of benchmarks. Then based on the benchmarks, we'll offer personalized path of cohort led learning parts, where you will get multimodal instruction with opportunity to practice. Then application of that learning with hands-on labs and AI-based simulations. Further on, collaborative learning in the way of boot camps or instructor-led training and then finally, on the job performance enhancements using our coaching offerings. Together, offered in that sequence, this methodology cements learning for measurable outcomes. In our Codecademy learner platform that is used by 60 million learners worldwide, we have a very similar pedagogy and methodology. Discovery of a deep learning path. Learning with the right interactive assets, continuous assessments along the journey, connection through a community and then finally, job readiness through a certifiable outcome. We have unmatched depth and breadth of content that supports our learning methodologies. In key areas such as technology and developer, we have over 20,000 courses covering areas like security, infrastructure, cloud, programming languages, data, AI and machine language. In business and leadership, we cover all the way from basic business skills to first-time management to higher echelons of leadership. Productivity and collaboration skills, which is applicable to every employee in a company, we have hundreds of courses. And we also cover compliance and safety for a safe workplace. Together, we have over 250,000 hours of learning content. Our customers, because of our platform flexibility is able to combine this content with their own content, additional third-party content. There's a customer that I'll talk about that Ron actually mentioned that has actually delivered more than 1 billion hours of learning content through our learning platform through their 0.25 million employees. What we have drives value for our customers and drives measurable customer outcomes and business results for Skillsoft. Let me share 3 examples. The one on the left is a competitive takeout of various competitors at one time in a large technology provider. What they like about our solutions are interactive modalities, hands-on practice as well as our focus on outcomes. And as a result, we won a net new multimillion-dollar deal. In the middle, I shared an expansion example. This customer only had books from us. We linked with their technology leadership. They really liked our hands-on modality, our depth in courses and books altogether. And we first expanded to the technology department. Then through the technology department, right now, we are running a company-wide AI upskilling program. We have tripled our ARR in a short time with this company with room to grow much more. The third one is really special. This is an example of our large telecommunications company in Europe. They have integrated their content, third-party content, as I was talking about, as well as their back-end measurement systems with our platform. That has allowed them to grow and stick with us for over 6 years. And as I said, they're delivering over 1 billion hours of learning content through our platforms. These are the examples that we are observing over hundreds of customers that Ron mentioned who we call the talent champions. The market is shifting from buyers of online learning who look at learning as just a collection of content and measure in rudimentary metrics like utilization and downloads to talent champions who are actually considering talent as a strategic investment and they measure in terms of outcomes. This portion of the market on the right-hand side is $100 billion and we are extremely well positioned to capitalize on this high-growth market. Why are we well positioned? First and foremost, it's all about the talent development life cycle for an individual as well as an organization. For a learner Skillsoft serve the critical elements of skilling in the learner is life cycle to skilling, getting a job on the job skilling and then career advancement. Skillsoft also serves the critical element of skilling in an organization's life cycle inclusive of workforce planning, hiring and placement, upskilling and succession and mobility. Serving these true life cycles in parallel gives us critical advantages. First and foremost, learner advocacy. Learners who have come from using the Codecademy platform become natural advocates within their enterprise. Similarly, when the transition from a job to another job, as we build our lifelong learner capabilities, they go back to the Codecademy platform. There is work to do for us to actually leverage this we leverage this flywheel, and we have already gotten started. I shared with you one example of a customer where we have actually integrated with 1, 2 or 3 systems that they have. And as a result, they have grown and stayed with us for 6-plus years. There is much more opportunity for us to do so. There's work to be done, that is planned that I'll show you. We will are doing technical API extensions as well as programmatic work that Matt will explain to you in partner expansion that will embed our DNA far deeper into the customer's fabric, increasing our stickiness, therefore, our retention, therefore, lifetime customer value and our overall business. We have a well-articulated plan 5 strategic priorities that we're executing on as we speak today. Let me cover them one by one. AI-led interactive experience. We are already leading with interactive experience in the area of programming and technology and our introduction of CAISY to the market. We want to embed CAISY fine grain in our courses, build advanced AI assistance and gamify or benchmarks. This deepens our learner engagement increasing learner advocacy which is critical to growth in any enterprise. Second, curation, aggregation and authoring. We have already started a journey in curation and aggregation, we are building an AI-led authoring to leveraging already what we have in Codecademy, we expect to increase our tool adoption tremendously in our customer base that improves retention and stickiness. Number three, we are going to technically extend our open API ecosystem further enlarging the number of partners that we can solve turnkey solutions with for our customers. We will scale our partner ecosystem over the next 18 to 24 months with deeper and deeper integrations into the customers' DNA. Four, AI-led expansion. Interactivity like CAISY offers us to create a completely new learning modality where you are not simply watching a video or hearing somebody you're actually practicing live difficult conversations at scale. For example, how to have a difficult conversation with an employee or how to ask your manager for a pay raise before this, a scalable approach to have these conversations did not exist. This opens up new categories for us and new buyer types such as the Chief Revenue Officer, trying to train his salespeople. The enablement of lifelong learners is last but not the least, we will extend our B2C offerings with projects, portfolios, learning communities as well as assessment and placement partnerships so that people in between jobs always go back to Codecademy and become lifelong fans of our platform. Let me shift gears to generative AI. Generative AI is tremendously important and a disruptive opportunity for our category. We are working on generative AI multiple facets of it for over 2.5 years. For a learner, for every learner today, generative AI upskilling is becoming a prerogative. To that extent, Ron just talked about our partnership with Microsoft. We are getting significant traction with this, and I'm going to share that momentarily. Learners are demanding experiential learning, which is much more interactive, much more intuitive learning compared to watching a video. We have been working on this for 2 years, and I'll share what we have done with our CAISY simulator. Step-by-step guidance. We are also working for the organization leader that has a difficult problem of mapping thousands of skills to thousands of roles and maintaining live curated parts. Gen AI also offers a tremendous opportunity to optimize how we create content to increase speed and velocity. Let me now talk about what we are doing with generative AI upskilling. We have introduced a product called AI-skill accelerator no more than 6 months ago, already we have trained 0.25 million learners through our upskilling program following the same tried and true methodology, which starts with measurements, multimodal training, practice and hands-on exercises, live learning options and eventually delivering impact. For example, one of our customers took 80,000 associates through this program over 4 months that completed in the last month. A learner's experience through this is somewhat like this. You come in, you go do a benchmark, that test your basic knowledge and gives you a starting point from where to start with. You can start on a personalized pot or you can be part of a cohort. For example, if you're part of a cohort, you will get assignments given to you with a finite date to complete and then you can reassess where you are. And based on your reassessments, your next assignment comes. So it's progressive learning, building on competency being tested periodically through assessments and benchmarks. There's an option for any of these learning parts to actually do live simulation using CAISY that I'll cover in a moment, but more significantly -- many of these learning parts include live learning options through our instructor-led training mechanisms delivered through Global Knowledge. Live learning gives everybody an opportunity to collaborate with your colleagues and collaborate with an expert in that field. A technical learner who needs to learn much more in-depth about the applications of AI in technical fields such as programming and data science, using our innovations in Codecademy could actually do hands-on practice overseen by an AI assistant, be it prompt engineering or be it programming Python. All these different modalities create a much richer experience and a much more impactful learning environment for our learners in Gen AI upskilling. Let me tell you a little bit about our coaching AI simulator, CAISY. We've been working for -- on CAISY for over 2 years. CAISY is a game changer interactive scenario where you can practice difficult conversation in a safe space. Out of the box, the count increases every day. Today, we are probably 70-plus to 80 scenarios of different kinds. All the way from practicing a conversation with an employee to how to run an agile scrum meeting, for example. More importantly, CAISY is a configurable tool that clients will soon be able to configure custom scenarios. In fact, we are engaged with another large European telecommunications company who has engaged with us to create custom scenarios to train their sales team. And therefore, CAISY actually affords us natural advantages to move into other areas where we actually don't play today, such as sales training or training for procurement people in negotiations. CAISY is already available in multiple major languages, deployed over 2 million learners and is already making a difference for our net new business and our in account growth. We have a well-constructed, well-thought-out sequenced plan. We have to fix the basics and invest to grow. In fixing the basics, we are already executing, as Matt will talk about in our GTM effectiveness and efficiency. We need to reestablish growth for our B2C consumer using the innovations we talked about. As well as established [ B2B2C ] flywheel that is as yet an untapped opportunity for us, which we will actually tap very, very soon. Matt will also talk about new routes to market. Remember, the international expansion opportunity that I talked about in the very beginning, and I covered all the 5 remaining invest-to-grow areas in the product areas just before right now. All of this will deliver revenue growth and many of this will deliver margin improvement consistently for the Skillsoft company. I want to leave you with 3 key takeaways. We are actively strengthening our foundations in product and GTM enhancements, and we are well on our way to extend our leading product. We are well positioned where we are currently and our planned actions to capitalize on the high-growth talent development segment of the market that Ron outlined. This will result in strong customer acquisition and increased lifetime value, we expect to deliver above-market growth and category-leading profitability. Thank you very much. With that, it is my pleasure to invite my colleague, Darren Bance, to tell you about the Global Knowledge business unit. Thank you again.

Thank you, AP. Hi, everyone. My name is Darren Bance, and I'm the new General Manager for Global Knowledge, formerly the ILT business unit, as Ron mentioned earlier. I'm less than 60 days into the role, I've been pretty busy. I have 25 years' experience leading and transforming businesses, driving growth through service, operational excellence and digital transformation. Most notably, my last 10 years have been in workforce learning. I came to Skillsoft from QA. QA is the U.K.'s market leader in tech and digital ILT where I was the Chief Operating Officer, driving operational excellence, efficiencies and transformation above market rates. I was also the exec responsible for the funded learning vertical, a very successful business turnaround program, utilizing digital tools, new content, new delivery techniques with instructors and coaches to drive rapidly advanced learner experience advocacy and commercial return. I'm really excited to be here, especially now I'm 45 days in and I can see clear opportunity to return this business to growth, to drive significant returns. There are 3 key messages that I want to drive home to you today: Firstly, that the digital skills gap has never been greater. You heard Ron take us through the reskilling revolution that we're faced with. And the ILT market is growing as a result. There has been a belief that GK's decline was market driven, and this is not the case; Two, there are fundamental flaws in the business. These are self-inflicted. And they've been -- it's been part of a starvation of investment. These floors or mistakes of the past can be easily fixed with detailed planning and investment. Building upon very strong foundations to return GK to growth. And thirdly, there are clear opportunities to accelerate GK's growth trajectory back to market levels through new proprietary content through operational excellence and through portfolio and geographical expansion. So who is GK? Global Knowledge is a global leader in the provision of tech and digital-focused instructor-led training. ILT is all about live learning, a premium service, a gold standard it's face-to-face delivery by experienced trainers, both remotely and in the physical classroom. We're the partner of choice to around 50% of the world's largest 1,000 companies with a large but focused schedule of vendor authored and certified courses utilizing over 700 certified instructors. We are top 3 in each region we operate. And our aim is simply to be the clear global #1. So a little bit more on the strong foundations that will help us drive growth. GK delivers 26% of Skillsoft revenue, a material part of the business. Turning around GK will have the biggest near-time term impact on improving Skillsoft as a whole. We have a nice mix of geographies. We've got a European stronghold, yet the U.K. and France are very big opportunities to grow. The Middle East is exciting and growing fast. And North America is clearly suboptimized and it's going to be a major target to grow in the near to medium terms. We have a strong NPS, but one that we can build upon. We've got a very strong customer base to target enterprise growth and we have a constant stream of global awards and recognition. So why do organizations demand ILT? What are the drivers for live learning? We know today that learners need live learning to get to the mastery level of these difficult topics. On the left-hand side, I'm showing here, such as cloud, security, AI and change management, which are taught under the modalities shown here on the right-hand side. These are complex subjects, which need certifications, such as security and cloud, which work well with instructors managing hands-on labs. Change management, leadership and business need interactivity and breakout sessions to embed that learning to the mastery level. COVID accelerated the transformation from classroom to virtual classroom and learners adapted very fast. Live and virtual is alive more than ever today. I've seen this in my prior roles as a leader of growing organizations. And in a virtual world, the blended offering is compelling for the learner. The instructor can utilize other materials like videos, gamification, on-demand content in live sessions, all helping to drive those light bulb moments for the learners. And the accelerant for our business today is the value of these blended solutions for organizations and learners. The value proposition of GK and Skillsoft is our ability to deliver these journeys. So now I want to back up my statements on why ILT is special with some market stats. The digital skills gap has never been greater. That reskilling revolution is upon us. And the data speaks for itself. Live learning is a large and growing market. 52% of corporation's training spend is via ILT showing the level of demand there is today. ILT is growing faster than the market, fact, and this is all very exciting. So this slide summarizes where we play today and where there are adjacent opportunities to grow. This is a summary of the ILT training market by spend in billions. The top left is our focus today. Corporations continually need tech reskilling and certifications, so they prioritize their spending here. We do deliver some services in complementary markets such as education and government, business and leadership. We are under-optimized in these areas. Governments invest in large multiyear programs for their employees and public sector projects. And for business and leadership, there is clear overlap in digital leadership, project management, change management, that are inextricably linked with a successful tech strategy and execution that businesses need. These are huge opportunities for growth. I know what it takes to penetrate these complementary markets. So what is it that makes GK unique? Here are 5 primary areas that help define our uniqueness in the market. Let's dive into a little bit more detail. Our global scale is a clear differentiator. Most competitors are by subregion and don't have our global coverage. In my personal experience, GK's global coverage was very difficult to compete with. Our large customers expect us to serve them and deliver to them on a global basis. The quality and consistency of our trainers. The enviable access to quality content by our partnerships with leading tech businesses and AP's Talent Development Solutions business unit are key differentiators. And for the blended offering, Ron and AP mentioned talent champions that want the ability to deliver training outcomes via live learning or blended solutions through a single provider like Skillsoft at a global scale. These are really strong foundations on a global scale that make me very excited to be here. Competitors do not have this coverage. Just let me jump into premier partners in a little bit more detail. A key attribute to the success of global knowledge over the years has been our strong partnerships with the world's leading tech companies. ATP status authorized training provider status doesn't come easy. It is really difficult to maintain and needs plenty of resource. But this coverage is a real differentiator. I love the work we're doing with Microsoft on the Copilot adoption. We can be more strategic with our approach to these leading partners. More than 70% of our revenue comes from our top 10 partners yet we have a long tail that drags resource. I will be personally working closely with these partners to look at ways to support them, launch, grow and expand their core products. So I've talked you through our differentiators. Let's look at some real life examples. Here are 3 examples on how we won contracts using that unique coverage. The first is a multi-partner win. It's a large Spanish municipality to upskill and reskill 5,000 learners in cloud. It was our strong relationships with Microsoft and AWS, which was a differentiator. As a result, we're targeting similar opportunities, multimillion-dollar opportunities across Spain based on its success. The second was for a very large global IT infrastructure services corporation, where we beat a major competitor, and it was all about consolidating the customers internationally fragmented spend and reducing their cost base. Global coverage was the key differentiator here, opening up the door to their global operations and already it's opened up the door to driving opportunities into France and India as a result. The third is a great partner collaboration with AWS, the large global telco in Europe, the customer knew that their internal teams training was crucial to bridge the skills -- the cloud skills gap that they had to drive its own digital transformation so that it, in turn, could better help its customers to do the same. The AWS partnership that we have in Spain was a differentiator. After one year, the company narrowed the skills gap and achieved significant growth in both sales and revenue. So let me get into the plan on going forward. So I've done my assessment. We have a clear plan that specifically addresses the challenges faced today that I mentioned, but working off those very strong foundations to launch from. To remember my key messages, #2 was fix the basics and 3 was new expansion opportunities. Will these top 3 highlighted value drivers will deliver quick results over the next 6 to 18 months. Around 75% of the planned profitability improvements will come from these top 3 drivers. The top one, driving productivity improvements, specifically sales through standardizing our tools, restructuring and focusing our teams with clear commercial KPIs. Next, evolving the go-to-market strategy by arming our regions with more local marketing resources, enabling them to adapt to customers' needs, partner demands and competitor movements and thirdly, as I mentioned, focusing on our top 10 partners to drive a more strategically focused plan to drive mutually agreeable commercial returns. We have some clear new drivers for growth. The key new expansion opportunity, though, is relaunching our own proprietary courses. This is top of our priority list to launch this financial year. Let's get into what that means and how we will do it. We will target key growth markets with our new content play. AI is increasingly vital across various industries. The demand for data science professionals is soaring and there is a shift surge in demand for mobile and web app developers, driven by the digital transformation initiatives. And for cyber, there's a significant need for training in areas such as threat detection incident response, ethical hacking and compliance. And although we do operate in these markets already, they are via the reseller model delivered by third parties at low margins. So we've got to change this fast, and we will. We are moving ahead at paced to drive change. Proprietary product delivers much higher returns than via reseller or leased models. It is double reseller margins. 81% of our revenue comes from our top 200 courses. So we will launch 40 new courses targeted in the areas of highest demand. But how will we do this quickly and cost effectively. We'll do it by utilizing the extensive library of crew AP's Talent Development Solutions business. And then our mix of courses will transform quickly as we target our sales and marketing channels on ensuring those new 40 courses are all top 200 performers. And I'm planning for proprietary courses to account for more than 20% of our portfolio in the long term. So thoughts I want to leave you with, firstly, we have a really strong global foundations to work off with a strong and growing ILT market. Secondly, we understand where the business has made mistakes and that we have clear and tangible solutions to implement, to return to growth. And thirdly, that we have new growth tactics to accelerate our plans at or above the market levels. Don't get me wrong. This needs strong execution, very strong execution, acted upon with the utmost urgency, but it is all very achievable. Thank you very much. We will now move to a 10-minute break. [Break]

Good morning, and thank you all for joining us. I'm Matthew Glitzer, Chief Revenue Officer at Skillsoft. I've been in the role for about 15 months and with Skillsoft, for almost 2 years. As CRO, I'm responsible for all field-facing teams, including sales, customer success and professional service. My reasons for joining Skillsoft are the same as my reasons for still being here: I believe in the company's mission; I believe in the team that we have and continue to build; and I believe that with the plan we're putting in place, we will grow at pace and consistently. A little bit more on my background. I have 25-plus years in the tech space in sales and business leadership roles. I spent the last 17 years prior to Skillsoft, at IBM, working across multiple business units in the Americas, Asia and Greater China. Those businesses included high-velocity, transactional software businesses in cybersecurity as well as IT outsourcing and cybersecurity services, which tended to be more large customer and enterprise type customers. In those roles and others, I have a track record of driving organizational transformation and growth at the account, regional and organizational level. Moving forward, I will cover our market opportunity in more detail, examples of where and how we are winning in the market, some of the challenges we're addressing, our strategy, areas of focus and actions we are taking to drive growth. The learning market is large, growing and rapidly evolving driven by technological change and market factors impacting organizations of all sizes. While we have made progress, we recognize the need and have a plan to be more effective and efficient in our talent and market approach. In order to drive growth within our base and a new customer acquisition. Ultimately, we have confidence that the actions Ron, AP and Darren have shared, in concert with what I'll discuss, position Skillsoft to deliver above-market growth. Let's start with the market opportunity. The overall market opportunity for learning is quite large and growing. It represents tremendous opportunity for Skillsoft. Ron and AP previously talked about 2 buyer types: talent champions and buyers of online learning. I spend a lot of time with customers across the world. And from my recent conversations, I believe there is a third type that represents a great opportunity for growth, aspiring talent champions, we'll call them. At the top right of the box are the talent champions. These organizations are typically larger enterprises and are already committed to and investing in workforce and skills transformation with a number of key stakeholders outside of the HR and L&D organizations and they are also the most likely to leverage blended learning approaches. At the bottom left of the box are the buyers of online learning. These organizations are typically small or medium-sized businesses that recognize the importance of workforce and skills transformation but are more content delivery focused. And in the middle of the box is a new category that we're calling aspiring talent champions. These organizations typically span across the upper mid-market and enterprise segments. They recognize the need for workforce and skills transformation, but have not yet committed organizationally, or from an investment perspective, to that journey. Each buyer type has unique characteristics, which is why getting the route to market alignment is so critical. With these buyer segments in mind, let's take a look at the current construct of our business. Looking at the left side of the chart, we have a tremendous customer relationship longevity supported by platform and content value, an overall LTM DRR of 101%, with approximately 105% LTM DRR in our large enterprises. On the bottom left, you could see a sample of the esteemed customers we are fortunate to serve in the diverse industries and geographies we cover. I'd like to say a quick thanks to all of our customers, and in particular, the ones whose names and logos we're sharing here today. Moving to the right side of the chart. We have our segment by ARR contribution and customer count. You can see that we currently deliver 80% of our ARR through 25% of our base. Key takeaway. We have a value proposition that resonates across all segments of the market, and there is an opportunity to unlock more growth through more effective resource allocation and sales execution. Building off the prior chart, our experience and track record, aligned to the buyer segments, has clearly informed our resource investment priorities for the next 18 months. Looking at the right side of the chart, we will prioritize growing talent champions through value selling, engaging, understanding and meeting the needs of an expanded set of organizational stakeholders and by proposals that are connected to business outcomes with measurable ROI. We will continue to develop aspiring talent champions through value and business outcome-driven selling, providing thought leadership and co-creating transformation road maps with our customers and referential and consultative selling. We will enhance buyers of online learning capture through optimizing our engagement model and effective pricing and packaging. And then we will always maintain our focus, and continuing to focus, on delivering increased value and the improved experience for the learner. So I've talked so far a bit about our market, our customers and our priorities. I'd like to go a bit deeper now on how we believe the intersection of market segmentation, route to market and buyer attributes sharpens our focus on route to market approach in our investment plans. This is critical for how we engage with our customers, what we engage them on and is central to our growth strategy. On the left side of the chart is our market segmentation aligned to customer size and spend. The middle of the chart defines Skillsoft route to market by engagement approach. And on the right is the strategy and outcomes we're driving. In the enterprise segment, we will invest and focus more resource in face-to-face engagement in the form of additional sellers, marketing and subject matter experts. In the mid-market, focus on hybrid engagement between face-to-face and digital to grow aspiring talent champions. And in SMB, we'll leverage a much more digital sales and support model to engage buyers of online learning more effectively. And we will continue to activate the learner advocacy flywheel to support both learner development and drive learner support within the organization. I think it's important to note that there's no hard line for how we've defined our buyer segments, but they do generally line up by market segment. We see examples often of each buying behavior in pockets across all segments, especially aspiring talent champions in the enterprise segment and buyers of online learning across all market segments. I'd like to now focus on the market opportunity with talent champions in one segment of the overall global market. Earlier, I described the overall market opportunity for learning between TDS and GK. Skillsoft currently serves approximately 60% of the Fortune 1000, with an overall estimated learning spend within that base of approximately $28 billion. We have a track record of consistently winning here, but there is much more opportunity for growth. I'll now take you through 2 recent examples of where we have significantly grown in our base globally and in the Fortune 1000. On the left, the first opportunity is with a large foreign ministry. This opportunity was a classic land and expand motion with an aspiring talent champion. We started with a small cohort to prove our capabilities and value that over an 18-month period, we delivered that value and through close client engagement across our sales, customer success and professional teams, we developed a business case with the client that led to an enterprise rollout across our 250,000-person learner base, leading to approximately 4x ARR growth within 3 years. Moving to the right side of the chart. This opportunity was a great example of a talent champion. I was deeply involved with this client. The opportunity began with a COO-led initiative to accelerate organizational capabilities through workforce and skills transformation. One of the key requirements was a 12-month breakeven and required CEO and CFO approval. With the support of the COO and the HR and L&D organizations, our technical leadership team engaged with the key executive stakeholders across the company. We worked closely with the global sourcing organization to create a win-win deal structure. And together with our key supporters, we're able to prove Skillsoft's capabilities and a strong ROI that led to approximately 5x ARR growth within 3 years. So putting it all together, LTM DRR is a key metric for determining the health and growth of a business. We have seen consistent improvement in our LTM DRR, delivering approximately 8 points of growth over the last 4 fiscal years. That growth was driven through a combination of technical innovation in the platform and the broadening of our portfolio and the shift we made in our go-to-market to value selling starting last year. Our expectation of go-forward growth will build on the work we've already done in the platform, our portfolio expansion and go-to-market improvement and by continuing to execute at scale with our customers, similar to the examples I shared just before. We have confidence our growth progression will continue based on our broad loyal and diverse installed base, our route to market transformation and the continued innovation that AP and Darren are driving in our platforms and offerings. Effectively growing our installed base is a critical element of driving overall above-market growth. Now let's go talk to the next level -- lever: new customer acquisition. The effective acquisition of new customers is critical to driving our top line growth. I mentioned the global TAM for learning in our penetration of the Fortune 1000 earlier. I stayed consistent here just focusing on talent champion opportunity in the approximately 40% of the Fortune 1000 that we do not currently serve. We estimate there's an approximately $8 billion opportunity to grow our footprint in the remaining Fortune 1000, in addition to the approximately $28 billion opportunity in our current installed base accounts. Similar to our win stories in the base, I have recent examples of significant new customer wins that span the Fortune 1000 and large enterprises globally. The first one I'd like to highlight is with a large heavy manufacturer in the U.S. Our winning proposition centered on our integrated global platform, total cost of ownership driven through vendor consolidation, and the quality and breadth of our portfolio encompassing business and leadership, Codecademy for tech and dev and our compliance collection. Result? A multiyear, multimillion-dollar TCV win. The second win is with a large Asian bank. Why did we win? It was our ability to effectively integrate with the client HR management system, benchmarks and assessments tied to business outcomes that we were able to show quantifiable skills progression with, and the quality and breadth of our content libraries to allow for multiple content vendor consolidation. The result? Another multimillion dollar TCV multiyear win. And the third win at a global financial services company was driven by the combination of TDS and GK offerings in a blended offer, our ability to drive and measure progression and our professional services capabilities for design, implementation and execution. Altogether, this led to another 7-figure multiyear win. Ron mentioned earlier that our dedicated acquisition motion was relaunched just at the beginning of this fiscal year, and we are starting to see progress. We've seen good examples of progress like those I shared in the previous chart. But in order to substantiate the directional progress, we took a snapshot of our second half fiscal year '25 pipeline and compared it to fiscal year '24 at the same time. Given the 9- to 12-month average cycle time for large opportunities, we believe this is an effective comparative example. What the data tells us is that we are creating more opportunities and bigger opportunities in the enterprise talent champion segment of the market. The overall growth in our pipeline and the growth and the size and scale of the opportunities for the second half of this year are another data point that gives us confidence that we're making progress. Ron, AP and Darren all talked about the importance of the partner ecosystem to our business across demand generation, strategic client and market engagement and the technical expansion and integration with our partners and customers. We recognize the need to transform both the how we partner and who we partner with. On the left side of the chart, I described the current state. To this point, our approach has been mostly opportunistic and organic with limited cross-organizational coordination or automation. On the right side of the chart, you can see that we have clarity on what needs to be done, and we're building a plan to redefine how we partner and who we partner with and build the systems, processes and teams necessary to execute. Bringing it all together, again, we know what we need to fix and have a plan to do so for maximum impact on organizational effectiveness and growth. Fixing the basics organizationally and in our sales approach, an active example of this, at the beginning of this year, I drove the realignment of our TDS and GK sales forces. By separating out the ILT sales team, we are refocusing each team on its core business. But we have retained the connective tissue that is central to our blended learning offerings. Our Invest to Grow priorities support our go-to-market transformation and identified growth factors. They are implementing an integrated digital platform, targeted expansion into new geographies and growing and maturing our partner ecosystem. There is a clear need and appetite for what Skillsoft offers across our TDS and GK business units. We plan to drive more effective and efficient growth, and the plan to roots to market is expected to drive more effective and efficient growth. We have a long and successful track record of helping our talent champions and a plan to develop more of them. And we are focused on evolving and improving our partner ecosystem for customer value and growth and our operational rigor for scale. The actions I've outlined and the progress we have already made give me a humble confidence that we can accomplish the goals that I've laid out here today. Thank you for your time and attention. I'd like to now turn the discussion over to our CFO, Rich Walker, to take you through the financials.

Thank you, Matt. So nice to connect with our existing investors and equity research community and a warm welcome to those of you that are newer to the story. My name is Rich Walker. I've been at Skillsoft since we went public in mid-2021. I've been a public company CFO 3 times. I've been involved in both turnarounds as well as high-growth companies. The longest tenure was the 8 years I spent at IHS, $700 million revenue company that we grew to over $2 billion of revenue. We did that through organic growth and targeted M&A. Importantly, we created greater than $5 billion of equity value for shareholders. Why am I excited to be at Skillsoft? It's very simple. I believe in the mission. I believe in what we do for customers and their learners. And I believe the significant value we can create for shareholders is still in front of us. I'll focus on 4 main topics in my presentation. I'll summarize our value creation game plan. I'll update you on FY '25 outlook and resource reallocation exercise we've completed. I'll drill deeper into the business unit financial profiles, which you'll see are very different. And this is the first time we'll be presenting that level of visibility. And then, finally, I'll comment on capital allocation. Our value creation game plan has one simple, clear objective: create long-term shareholder value through an industry-leading financial profile with above-market growth and profitability. From a strategic perspective, we validated the market opportunity not just to grow, but to grow profitably. We're evolving and repositioning the company to lead in the most attractive and fastest-growing part of that market. This is a very natural evolution for Skillsoft, but a more difficult one for our competitors. From an operational perspective, we're executing across 2 common tracks, fixing the basics and investing for growth. In talent development solutions, AP articulated several initiatives to accelerate our growth in the B2B segment and return our B2C business to growing consistently. Darren spoke in great detail as to how we're moving swiftly and with urgency to turn around global knowledge and pivot that business to growth. Underpinning our execution priorities is a new rigorous performance management system to improve operational visibility, predictability and accountability. This has been the consistent drumbeat since Ron's arrival and it has ignited the organization. From a financial perspective, following a 90-day review and deep operational inspection, we are resetting our FY '25 expectations. More on that in a moment. We've completed a comprehensive resource reallocation exercise that identified at least $45 million of spend that will both expand our margin profile and support our forward growth investment initiatives. We've already begun executing on those identified actions. We will then widen the aperture beyond FY '25 and present our medium- and longer-term financial expectations both at a business unit level and for the consolidated company. In fact, we will be evolving our BU financial reporting and our external financial statements later this year. We think that's going to enhance investors' understanding of the 2 business units. The through line from the strategic opportunity through our operations to deliver on the financial outcomes we expect has never been more clear. Our financial priorities to deliver on our objectives are also very clear and very simple. It began with a comprehensive inspection of our expense base to identify opportunities for greater efficiency and/or reduced spending. More on that on the next slide. That exercise gave us the resources required to support the growth initiatives AP, Darren and Matt have articulated. They include go-to-market transformation, AI-centric innovation, expansion into new geographies and an enhanced partner ecosystem, and even transforming our own workforce. In parallel, AP, Darren and Matt articulated a series of actions we're taking to improve the respective BU contribution and margin. They include dual BU performance management systems, go-to-market efficiency, developing proprietary content in our GK business and taking advantage of the inherent operating leverage in each of the 2 business units. These actions will accelerate free cash flow, which remains our principal financial metric. There is tremendous operating leverage across our expense base and when combined with our continued focus on working capital management and moving away from prior restructuring and acquisition-related activities, we expect free cash flow will accelerate going forward. And finally, as adjusted EBITDA is growing and our free cash flow is growing, the business will, of course, naturally delever. Let me talk some more about our resource reallocation exercise, which was an important catalyst in setting these priorities. It was a comprehensive review of our entire expense base. Everything we do was in scope. We looked at our people, our systems and our third-party spend. When we looked at people, we focused on flattening the organization as we push decision-making into the business units, looking to further leverage lower-cost geographies in which we can operate. From a systems perspective, it was very simple: eliminate, simplify and standardize. As we looked at third-party vendor spend, our procurement teams are looking across the entire portfolio, identifying opportunities to consolidate spend and renegotiate for improved discounts and more attractive terms. We also looked at extensively at external benchmarks. We brought in best-in-class operating metrics to inform us on this inspection. Again, we identified at least $45 million of annualized expenses. That represents about 10% of our total annual spend. That will allow us to deliver expanded margins in FY '25 and self-fund our future prioritized growth investments. In fact, we expect to redeploy as much as 40% to 50% of those savings into the future growth initiatives you heard AP, Darren and Matt articulate. This exercise is now complete, and we're moving immediately into the implementation phase as we begin to operationalize those decisions. And while this exercise was an important step function, the ongoing discipline and rigorous review of every element of our spending will continue into the future. Let me shift now to updating you on our outlook for the year. We are updating our FY '25 outlook to reaffirm adjusted EBITDA expectations on lower revenue. We felt it was prudent at this time following the implementation of our new performance management systems, which Ron articulated, and the continued near-term disruption that remains at global knowledge. From a revenue perspective, prior guidance of $530 million to $550 million has been lowered to a range of $510 million to $525 million. Again, primarily due to the continued disruption at GK but some continuation in sales cycle elongation in the Talent Development Solutions business. At the midpoint, that will have year-over-year growth for the consolidated company down 6.5%. Adjusted EBITDA, prior guidance range of $105 million to $110 million remains the same. We will get some partial yield benefits from the $45 million resource reallocation exercise, and that will allow margins at our midpoint to approach 21%. From a free cash flow perspective, our prior commentary was simply that we expected cash flow from operations and free cash flow to improve. The update today is we expect free cash flow for the full year to be in line with what we experienced last year. There will be certain onetime costs associated with the resource reallocation exercise, and that will put us at a comparable level to where we were last year. Continuing our practice, we're only providing annual guidance. But we expect to see improved exit velocity coming out of the fourth quarter in TDS bookings, GK revenue and across all expense categories. Now let me turn to our 2 business units and provide more insight into their respective financial profiles. A couple of framing comments that apply to both of the BUs. We've been doing a lot of work to illuminate the true underlying, fully allocated profitability of each business unit. I'm excited to bring that analysis to you for both TDS and GK. And while we've already moved the sales and marketing directly into the business units, we still have a shared services model where typically scaled functions like HR, accounting, IT and legal continue to support both business units. What we've done in these business unit, BUs, however, is allocate those corporate functions to the BUs used to give you a BU contribution and margin profile. We will still have approximately $25 million to $30 million of unallocated expenses sitting at the corporate level. That includes such things as strategy, public company costs like D&O insurance, SEC reporting, internal audit and SOX compliance. The key actions at the bottom of the page should look very familiar to you at this point, as AP and Matt articulated those in greater detail. For the balance of this year, we're focused on fixing the basics. Moving forward, we're investing to grow. The impact of those key actions from a revenue perspective, we expect our year-over-year growth this year to be flat to down 2%. By the midterm growing at market, 5% to 7% growth. And as we move to the longer term and grow above market, 9% to 12% growth. Non-GAAP gross margins, as you would expect in a recurring subscription SaaS business, mid-80% range today. Lots of variable cost in that cost structure. So you can expect gross margin percentage. We'll continue to track the growth in the top line and remain at a very attractive mid-80% level, both in the midterm and the longer term. On a non-GAAP business unit contribution margin, the business contributes today in the low 30% range, moving midterm to the low to mid-30% and clipping 30% in the long term. We will report on this basis going forward externally and give you that visibility, but that will come later in this year. Moving now to our Global Knowledge business unit. Again, the key actions at the bottom of the page should look very familiar to you, as Darren and Matt spoke to them in great detail. Darren remains focused now on fixing the basics and moving forward, we're investing to grow, a very similar theme across all parts of our business. The impact of those actions this year is a 15% to 20% decline in revenue. That pivots quickly to a growth profile by the midterm, growing at market in the 5% to 7% range. That growth continues in the 5% to 7% range in the longer term. On a non-GAAP gross margin basis, you have a very different margin profile in this business, about half what you saw in the TDS business. That's primarily due to 2 things, all of our instructor costs are in cost of sales as well as what we pay our authorized partners for their training materials. As Darren migrates over time to create more of our own private label intellectual property that we train on, you can see margins start to expand to the high 40% range in the midterm and getting over 50% in the longer term. From a non-GAAP business unit contribution margin, less than 5% today at GK, we expect that can move to the low teens and ultimately to the mid-teens. Now turning to our consolidated results. In addition to the analysis we've been doing on the individual business units, we've dramatically enhanced our long-range financial modeling. These business tools will bring improved analytical rigor to the business, including in our annual budgeting and our resource allocation planning. At the revenue line, on a consolidated basis, expect to be down between 5% and 8% this year. That pivots in the midterm to a 5% to 7% at market growing and in the long term, greater than 10%, growing above market. On a consolidated gross margin basis, mid-70% range, continuing in the midterm and bumping up towards 70% -- high 70% in the long term. That's a function, again, of GK's gross margin improvement. Consolidated non-GAAP business unit contribution margins in the mid-20%, moving to the high 20% and ultimately to the low 30%, still a lot of operating leverage in the 2 business unit expense base. At a consolidated adjusted EBITDA, we're at an industry-leading 20% to 21% today. That expands 300 to 400 basis points in the midterm and another 400 to 500 basis points in the long term. From a free cash flow conversion, our ability to convert EBITDA into free cash flow. That remains negative today, as I called out in our outlook. But we believe by the midterm, that improves to greater than 30% and in the long term, greater than 50%. Growing adjusted EBITDA and enhancing our free cash flow generation, our net leverage profile of greater than 4x today moves to about 3x in the midterm and below 2x in the long term. Given the work that we've completed and the resource reallocation exercise, we expect to be free cash flow positive in FY '26. Reminder, we'll be providing you our full year FY '26 guidance in our normal cadence when we report on our fourth quarter and full year FY '25. Now turning to capital allocation. Our capital allocation priorities are very straightforward. We will continue to prioritize funding organic growth investments that we believe fuel growth, accelerate innovation and drive profitable execution of our strategy, what we have consistently described as Invest to Grow. The left side of this chart recounts the priorities that AP, Darren and Matt articulated. Those allocations of capital will be grounded in rigorous and disciplined annual strategic budgeting and planning. There is always more demand for investment capital. It always outpaces available resources. So each one will be evaluated and prioritized based on IRR and risk and return profile. On a monthly and quarterly basis, we'll utilize our integrated performance management system to measure progress, and that will allow us to course-correct as applicable. A quick comment on the share buyback we announced earlier today. It's a $10 million program that will extend over 4 years. The clear objective here is managing dilution to existing shareholders that comes from the vesting of employee grants in the future. And finally, deleveraging. Again, as both adjusted EBITDA and free cash flow, the business will, of course, naturally delever. We expect our forward leverage profile creates a tremendous amount of financial flexibility and the optionality in the future. As I wrap up, let me leave you with these key takeaways. Number one, we're taking immediate action: the resource reallocation exercise we completed, the implementation of a new operation management system. Those are driving reduced costs, expanding margins and funding our growth initiatives. As we do that really well, we're building a very strong fundamental financially sound business, a recurring revenue model and a road map for strong free cash flow generation. Doing both of those well, ultimately, is going to unlock tremendous value for our shareholders. I am confident as we execute on this plan, we'll be recognized and we'll see multiple expansion and valuation will improve for our shareholders. Thank you very much for your time and attention. We will move now to question-and-answer session with the entire team.

Thank you, everyone. I appreciate you making the investment in time. It did come to my attention that we did have a technical problem at the beginning of our session. So my apologies to everyone. Please go back, we'll have it uploaded in about a half hour. And I'd ask you all to go back and look at the beginning sections for any of those who did miss that. And again, my apologies for that. We're going to now turn to the Q&A section, and I look forward to answering the questions with the team. And again, thank you for taking the time to join us this morning and spend the time with us learning about the company and the actions we're taking to go forward.

Our first questions are coming from the line of Ken Wong with Oppenheimer.

Maybe to start off, maybe for Ron or Rich, but we [indiscernible] go to market. I guess my thought would have [indiscernible] potentially impacting margins near term. How should we get [ comfortable ] with the fact that you are continuing to deliver [ large ] margin share going forward without potentially impacting the growth areas that you've laid out?

Yes, Ken. Thank you. It's great to hear from you. It's a really fair question, and the team spent a lot of time looking at what we needed to do. And it really came down to what are the key priorities to driving revenue and taking our expense structure and aligning it to make sure that we're able to deliver on the commitments that we made. And the team is very focused on that. And I would share with you that we've identified the key drivers for each one of these areas, it's well over 20, and we've mapped out what we need to do step by step on that journey. So I feel very confident in the numbers that we gave you and reaffirming the EBITDA as well as the new methodologies we've put in place around some of the new performance management on the revenue side of it. So these are things that I know are part of the journey. I do have confidence in the way we have structured the pieces of it. Rich, I don't know if you wanted to add more to that.

Ken, good to hear from you. I would -- as I contextualize it, we spend about -- our entire OpEx is about $450 million. And this was a comprehensive review across all of our spend categories. And what we've identified is at least $45 million, which is about 10% of the expense base. And we clearly understand the priorities are to continue to drive the business but redirect and reallocate a lot of that expense base towards growth. And while we gave the $45 million statistic, as we step back, we think probably $80 million to $90 million of our entire expense base is pointed at growth. And we're very comfortable with the judgment and investing that we're doing.

Got it. Okay. Really appreciate the color there. And this one maybe for Matt. There was an emphasis on talent champion. Any way to kind of help us think through what percent of the Fortune -- 60% of the Fortune 1000 you have, you might characterize as a talent champion, what's the headroom to start more of that base out champion? Or should we only think about the incremental talent champion wins going out the remaining 40% of the Fortune 1000 that you don't have?

Ken, I'll just have a few comments in here to start. One, when I went through the profile, the new profile, the emerging profile of that buyer, we hit a number of the areas of the attributes of those particular buyers that we want to see in the market. And when we look underneath that, across that Fortune 1000, Matt can comment on what he's seeing emerging in the pipeline and what he sees from an overall percent of opportunity, that went into our long-term analysis that we gave you with the grow -- get the company growing again by the end of '26 and growing at and above market in '27 and beyond. That went into that calculation. We won't give the numbers, but we'll talk through maybe 1 or 2 of the examples that Matt has underway to give you a little more contextualization.

Yes. Thanks, Ron. Thanks, ken. So when you think about the market, the samples that I showed during my presentation were examples of talent champions where we grew the ARR approximately 4 and 5x over a 2- to 3-year period. That runs across both pieces of that -- both segments agents of that: the talent champion and the aspiring talent champion segment. So from that perspective, I don't think that there's necessarily a cap or a percentage that we look at. We continue to try to grow as technological change comes in. And the evolution of workforce transformation and skills transformation continues to drive the need for change in evolution across all those businesses.

Ken, we did an initial piece of research that identified it that I commented on. Part of our follow-up work would be to get really specific and tied into our pipeline. Even with that said, I probably won't be sharing that publicly as we go through that. That's part of the family business. But we do see that as part of the evolution of it. I feel very comfortable that the market shift is absolutely happening out there, given the examples and the 115-plus customers that we already have in that cohort from that analysis.

Okay. Perfect. I'll jump back in the queue and pass the mic to one of my peers.

Our next questions come from the line of Sheldon McMeans with Barclays.

Just one for Ron. In your remarks, you talked about how [ Skillsoft ] is one of the largest players in [indiscernible]

It's a great question, Sheldon. Great to hear from you. opportunity and break it into the graph that we showed you, the talent champions in the online buyer segment, the online learning segment that we talked about. When you get underneath that, though, the real conversation that you've heard us identify as a team, and Matt really drove home as part of the conversation, was value-based selling. For us to unlock more of the true value, the intersection has to occur that, a, the customers are now recognizing the importance, the strategic importance of the HR function, helping them do this global transition that's being driven by the technology. That value-based selling is the unlock that I see and the fact that we've already proven it is what gave me the confidence to get more pricing. The example that Matt just shared, we were able to see that 2, 3x on top of that to get that value. And it came because of the value-based selling approach. So that's why you're hearing that so loudly from us that we want to drive that through the business and make that our core selling approach to the market. So from my perspective, those are the pieces that I see. I don't know if there's -- Rich, go ahead.

Sheldon, good to hear from you. Your question prompted an important trend we're seeing in the marketplace, particularly with larger customers, and that's consolidating their spend. I referenced the exercise we went through looking internally at our spend and where we have multiple providers that can consolidate that spend, we can drive for better terms and expanding deeper relationships. The same thing is happening with our customers. A number of the customer wins that you heard about, the CFOs, the L&D, Chief Human Resource Officers, they're looking across a portfolio of spend and identifying opportunities where they can consolidate that with one provider that meets a comprehensive set of their needs. And we're well positioned for that consolidation spend trend that's happening.

It's a really good point that you're raising as a follow-on. And maybe, AP, you could reference back to that large customer and just give us a little feel for what you saw in some of that consolidation that occurred.

Yes. Thank you, Ron, and thank you, Sheldon, for the question. What we are seeing is multiple buyer types with different interests are actually finding our offering very appealing. The fact that we -- I shared a chart with broad coverage in topical areas, so the CIO, CTO, the CHRO, sometimes the Chief Revenue Officer are finding our offerings jointly appealing. In the case of the customer that I shared in the net new ARR deal, multimillion ARR deal, that's exactly that consolidation happen across different buying points in the same customer. So when the value is realized across those buying points, we see a natural expansion opportunity for Skillsoft.

Great. Thank you. A lot of helpful color there. And I want to ask on global knowledge. I believe you mentioned revenue from the top 10 partners of 70%, I think, year-on-year and talked a lot about [indiscernible]

Yes. I just -- one thing I'm just going to do, everyone. I'm just going to repeat the question so that everybody can hear them online. So the question was could we explain a little bit about, one, the rationalization of the number of partners that we have in the GK business specifically; and then two, some of the forms of subsidies that come from those vendors, could you comment on how you're going to handle that moving forward. Sheldon, did I capture that properly for you?

Yes.

Great. Darren, it would be great -- why don't you take that one?

Thanks, Ron. Yes, I've seen a huge dependency, I would say, on our vendors. And it's, as I said, it's a great attribute to have. We spend a huge amount of time across a vast array of partners without being particularly strategic. I mentioned about Microsoft and what we're doing there. So there's these 2 aspects. One, be more strategic with those core partners to work more closely with them, but also don't have all our eggs in one basket. I'm not used to being quite so dependent and not have the ability to control our own content. And by understanding the market, work out at developing our own to sort of fill white space, work with our clients and actually create and control content. And the wonderful thing about being here at Skillsoft is this incredible content that we have within the group and the ability -- we talked a little bit about creating content cost money. We don't have that problem because, for me, at GK, from a global knowledge perspective because I've got access to all this fantastic content, which enables us to bring new courses. As I said earlier in my presentation, very much focused on the fastest-growing areas of demand that our clients are seeing in the marketplace. So we've got this ability to focus on our partner, but focus on those top tier, premium partners. But also start to control our own destiny more by creating courses to complement that and drive up those margins, which are really, really important.

Yes. When we as a team sat down, the whole leadership team, and literally in Darren's first week, he made a couple of key observations here that he highlighted in his comments. It really relate to what you're asking, Sheldon. And it really struck a chord with me in terms of the number of courses, and he mentioned it in his comments, the number of courses that generate the majority of the revenue so we have this wonderfully broad catalog. And when you look at it from a revenue perspective, there's more focus there. And then the second observation that he made was really around this piece he was just touching on, which is unbelievably important from a margin expansion perspective that we're able to take our content, use those assets from TDS and be able to quickly accelerate the courses that he's committed to get built for us through the rest of this year that we committed to all of you. That's how we're getting this done that fast. That's what gives me the confidence of what we're doing here and why we're going to be able to get that done. And maybe, Matt, you just add on a smidge more about how you see it unfold at a customer and why it's important at a customer as well would be great.

Thanks, Ron. So I talked in one of the examples of our net new wins around the blended learning capabilities. The confluence of what GK can do from a live learning perspective, both virtually and classroom, connected with what TDS offers related to the content, the journeys, the ability to curate and define the learning path and then added in the professional services capability to bring it all together in a coherent and cohesive way is really powerful, right? And as we talk about Microsoft and these other partners, bringing those partners in from a content perspective and our own content connected to it is really a powerful value proposition.

Great. Thank you.

Sheldon, do you have another question?

Great. I'll hop back to the queue.

Our next questions come from the line of Tom Singlehurst with Citi.

Yes, Tom here from Citi. My first question, actually, I guess this probably for Ron. I know you're becoming incredibly committed with the business anyway. I'm just interested as you sort of went through your first time with this. Can you talk about any missing cadence within the portfolio? I suppose if I'm leading anywhere with this, I'm still interested in whether, in particular, the B2B or whether your big and strategic shareholders, whether that's come from all the third-party partnerships that further increased the BD offering from your customers. Anything [indiscernible]

Great. Tom, I'm just going to repeat the question, so make sure I get it right for you. You had 2 parts in the question. One was, as you look across the portfolio in the first 90 days, what did you see as a potential gaps in the overall strategy? So strategically, how will you think about those, Ron? And then two, how does the partner piece play a role in that as we continue to extend out that strategy? I think is what I heard is the 2 questions, Thomas. I want to make sure I confirm that.

That is absolutely better, much better than I do.

All good, brother. All good. On the first part of it, as we laid out the portfolio, it really came from a bunch of the market research that we had done. And underpinning that market research was this detailed cohort analysis. And that really crystallized 2 things that we talked about as the team today -- as a team as we talk to you about it today. And it was really around making the point of what we were doing from an overall business perspective. One is getting ourselves to fill in the key gaps. And in particular on one of AP's slides, he walked through the multiple steps, the 1, 2, 3, 4, and we put partner below that, if you noticed in several of the sections. That's because we'll never fill all the gaps in the talent lifecycle, and we have no intention to. We really excel in the skilling space, and that's what we do exceptionally well. So that's where we're going to stay focused as a company. Inside of that space, there's a lot of great terrain that we've already taken and captured. We're already attacking the interactive blended learning journeys. We do the physical and virtual part of that already as part of it. And technology is at the underpinning of that piece of it. So these pieces were really well aligned for what the team had built, and I'll ask AP to comment on what he sees in a moment. But as you look through the portfolio, what we saw there was the connective tissue that Matt referenced. Bringing all these pieces together is where we can play an additional role, but we need our partners. And we need them to work with them to help us, whether it's driving demand, whether it's helping us deliver, as Matt said, some of those professional services, or being key technical partners like Microsoft and the AI work that we've been doing with them and why they chose us. This is all part of that story coming together and we'll lean on those partners to really help us fill those big gaps and key technology areas. And we'll drive what we do really best and stay in that lane from my perspective. But AP, you stared at the portfolio the longest. It'd be great for your insights.

Thank you, Ron, and thank you, Tom, for the question. As I go and sit with our customers all over the world, literally, I see that in this new category, people are looking at transforming talent, which means they look at workforce planning, hiring and placement planning, skilling, on-the-job upskilling and eventually career mobility and progression. There is not a single company in the world that should or can fill the whole need, but however, the customer needs, it's all turnkey and preassembled as much as possible. So Skillsoft having the enterprise DNA excels in one area or 2 areas. But we also want to excel in creating an open API ecosystem, whereby we can go and offer turnkey solutions. And that is what we mean by partnerships. That is the unlock, the -- and velocity and stickiness that we will get by doing that.

Couldn't agree more with what AP just said. That unlock was one of the big identifications. We've been doing these integrations. We just need to do them faster with more partners. That's where we see the acceleration of the revenue growth. Tom, another question?

Yes. Another question, if it's okay. I think a couple of times, I couldn't work out exactly what you were saying. Will it be $45 million of gross cost savings, about 10% cost efficiency? And then obviously, there's the reinvestment. I didn't catch whether we should expect the majority of that being reinvested or around 50%. I wonder if you can more precisely quantify that. And then I suppose the actual question behind that is in '26 and '27, presumably, we should start investing absolute positive adjusted EBITDA progression.

Yes. So just to repeat the question. Team, can you explain the $45 million cost reduction, contextualize that with the Invest to Grow, so we make sure we're really clear on the numbers piece of it, referencing the $45 million in particular. And then a second question was, okay, what do we see in the outyears as that continues to -- as we go into the future? I'll make one comment that I was very, very focused on in communicating with all of you. We, as a team, the leadership team worked on. I specifically said $45 million-plus. So our work here and the intensity that we're bringing and the urgency that we're bringing to the business is just the beginning of what we're trying to get done here. And I'll have Rich walk you through how we're deploying it in '25 and then to '26 because that, we want to be very clear with you, the impact that we see that it has on the business. Again, the highlight is '26 will return to growth as an overall, and that $45 million will impact the EBITDA and get us back to free cash flow generation, which is a great thing from my perspective. But I want Rich to walk you through the next level.

Perfect. Tom, good to hear from you. The $45 million represents about 10% of our entire spend, and we looked comprehensively across all of the 4 categories of our expense base. We identified about at least $45 million of that spend that we will be taking out of the business. We'll get the benefit this year from some of that expense reallocation. But importantly, it creates the headroom for us to reinvest a portion of that to the road map of Invest to Grow initiatives you heard about. Some of that investment begins as early as fourth quarter this year. But the majority of that reinvestment, what we called out to be about 40% to 45%, of that $45 million will come back in FY '26. We expect FY '26 will grow at the top line and that investment and reinvestment as we release that capacity back into the business creates the financial profile we spoke to.

Yes. And therefore, you can imagine when we go to give guidance for '26, we consciously are not giving that. We really want to make sure that you understand how that EBITDA expansion and free cash flow all unfolds, and we'll get you more details on that later.

That's very clear. And one final one. The -- in terms of the proprietary content within GK, a lot of sense. Is that capital investment? Or is that the sort of P&L reinvestment that we're talking about in the previous question?

I'll repeat the question? It broke up a little bit, Tom. With respect to GK and our Invest to Grow initiatives, is that primarily going to show through our P&L? Or is that going to show up in our CapEx or internally capitalized software costs? Did I get that right, Tom?

Absolutely. Perfect.

Most of that reinvestment is going to come through the P&L. An example would be when we're creating our proprietary content, leveraging the TDS investment. We're going to leverage our instructors to adapt that into a live learning environment. Very little CapEx, very little systems investment required in the growth initiatives that Darren articulated. Darren, you may want to comment, when you looked at the content materials, what you saw and why you felt we could accelerate. That would be insightful as well.

Yes. Thanks, Ron. Yes, the basis that we're working upon sort of, I would say, gets us 60%, 70% of the way there. And having that trainer pool to be able to then adapt just means that we can do it so much faster than others in the market. So it's just a great position to be in to have all this content, but it needs adaptation. We're obviously -- we have product specialists within GK and the ILT world that will be very specific around what we need but work very closely with AP's teams and then adapt that content over the coming months. Yes.