Barnes & Noble Education Inc (BNED) 2024 Q2 法說會逐字稿

Thanks, operator. Good afternoon, everyone, and welcome to our fiscal 2024 second-quarter earnings call. Joining us today are Mike Huseby, Chief Executive Officer; Kevin Watson, Chief Financial Officer; and Jonathan Shar, Executive Vice President, BNED Retail, and President, Barnes & Noble College.

謝謝，接線生。大家下午好，歡迎參加我們的 2024 財年第二季財報電話會議。今天加入我們的是執行長 Mike Huseby；凱文‧沃森，財務長； Jonathan Shar，BNED 零售執行副總裁兼 Barnes & Noble 學院院長。

As referenced in our second-quarter slide presentation, which can be found on our Investor Relations website, I'd like to remind you that statements we make on today's call are covered by the Safe Harbor disclaimer contained in our press release and public documents. The content of this call are property of Barnes & Noble Education and are not for rebroadcast or use by any other party without prior written consent from Barnes & Noble Education.

正如我們的第二季幻燈片簡報中所提到的（可以在我們的投資者關係網站上找到），我想提醒您，我們在今天的電話會議上發表的聲明包含在我們的新聞稿和公開文件中包含的安全港免責聲明。本次電話會議的內容屬於 Barnes & Noble Education 的財產，未經 Barnes & Noble Education 事先書面同意，不得轉播或供任何其他方使用。

During this call, we will make forward-looking statements with predictions, projections, and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, including those contained in our press release and public filings with the Securities and Exchange Commission. Company disclaims any obligation to update any forward-looking statements that may be made or discussed during this call.

在本次電話會議中，我們將做出前瞻性聲明，包括對未來事件的預測、預測和其他聲明。這些陳述基於當前的預期和假設，這些預期和假設存在風險和不確定性，包括我們的新聞稿和向美國證券交易委員會提交的公開文件中包含的風險和不確定性。本公司不承擔更新本次電話會議期間可能做出或討論的任何前瞻性陳述的義務。

And now I'll turn the call over to Mike Huseby. Mike?

現在我將把電話轉給麥克胡斯比。麥克風？

Thanks, Hunter. Good afternoon, everyone, and thank you for joining us today. It's my pleasure to provide our earnings commentary today together with Jonathan and to introduce Kevin Watson, our new CFO, who joined BNED in September and is already contributing significantly to BNED's success. One year ago, we announced decisive actions to accelerate our transition to the First Day Complete model and also implemented significant cost reduction and operational efficiency initiatives to improve our profitability. We made substantial progress on these initiatives and our second-quarter financial results are further proof points that our strategy is working.

謝謝，獵人。大家下午好，感謝您今天加入我們。我很高興今天與 Jonathan 一起提供我們的收益評論，並介紹我們的新任財務長 Kevin Watson，他於 9 月加入 BNED，並且已經為 BNED 的成功做出了重大貢獻。一年前，我們宣布採取果斷行動，加速向首日完成模式的過渡，並實施了大幅降低成本和提高營運效率的舉措，以提高我們的獲利能力。我們在這些舉措上取得了實質進展，第二季的財務表現進一步證明我們的策略正在發揮作用。

Before we get into the details, I'll touch on the key highlights from the quarter. First, I'd like to really thank our teams for their commitment to our company's success and their continued efforts to deliver a great experience to our students, faculty, institutions, administration, parents, alumni, and strategic partners. Our team's agility and resilience enabled us to not only deliver a successful fall rush in a very dynamic operating environment, but also to execute on our strategic initiatives over the last year. I'm truly grateful for their hard work and commitment.

在詳細介紹之前，我將先介紹本季的主要亮點。首先，我要衷心感謝我們的團隊對公司成功的承諾，以及他們不斷努力為我們的學生、教師、機構、行政人員、家長、校友和策略夥伴提供良好體驗的努力。我們團隊的敏捷性和韌性使我們不僅能夠在充滿活力的營運環境中成功實現秋季衝刺，而且能夠執行去年的策略性舉措。我衷心感謝他們的辛勤工作和承諾。

Second, our innovative equitable access program, First Day Complete, continues to positively impact students, higher education, and our business. In the second quarter, FDC revenue increased 52% year over year to $136 million and the combined First Day programs revenue reached $199 million.

其次，我們創新的公平入學計劃「First Day Complete」繼續對學生、高等教育和我們的業務產生積極影響。第二季度，FDC 營收年增 52%，達到 1.36 億美元，首日節目總營收達 1.99 億美元。

Our strategic transition to First Day Courseware business model has reached an inflection point. First Day and First Day Complete revenues are approaching 50% of course material revenue, and revenue increases from First Day offerings exceeded the decrease in revenue from the traditional a la carte model by $30 million on a year-to-date basis. This evolution to a subscription-like B2B model significantly improves revenue and revenue visibility which enables us to better align costs with revenue, improve inventory management and operating efficiency, and to ultimately achieve much higher four-wall EBITDA per store.

我們向首日課件業務模式的策略轉型已達到轉捩點。第一天和第一天完整收入接近課程材料收入的 50%，年初至今，第一天產品的收入增長超過了傳統點菜模式收入的下降，達 3000 萬美元。這種向類似訂閱的B2B 模式的演變顯著提高了收入和收入可見性，使我們能夠更好地調整成本與收入，提高庫存管理和營運效率，並最終實現每家商店更高的四牆EBITDA 。

Next, we've improved operational efficiency and maintained top-line growth despite operating in 128 fewer stores. We've achieved our planned $30 million to $35 million of annualized cost savings. And as a result, consolidated adjusted EBITDA increased 28% to $50.3 million in the second quarter.

其次，儘管營運門市數量減少了 128 家，但我們仍提高了營運效率並維持了營收成長。我們已經實現了計劃的 3000 萬至 3500 萬美元的年度成本節省。因此，第二季綜合調整後 EBITDA 成長了 28%，達到 5,030 萬美元。

Looking ahead, we've identified additional opportunities to improve efficiencies further and reduce operating expenses to continue improving our profitability and cash flow. Importantly, the actions we have taken and continue to take positions us to deliver more consistent, sustainable, and profitable growth in the years ahead.

展望未來，我們已經找到了進一步提高效率和減少營運費用的更多機會，以繼續提高我們的獲利能力和現金流。重要的是，我們已經採取並繼續採取的行動使我們能夠在未來幾年實現更一致、可持續和盈利的成長。

Shifting to our second-quarter performance. Total revenue was $610.4 million, increased by $1.7 million or 0.3% compared to the prior year period. The second-quarter sales increase is primarily due to the growth of our First Day programs, which increased 39% to $199 million, partially offset by declines in the a la carte Courseware sales, including lower sales from a smaller store footprint as we focus on the profitability of our stores. Second-quarter adjusted EBITDA from continuing operations of $50.3 million increased by $11.1 million or 28.3%, primarily driven by a $13 million decrease in S&A expenses compared to the prior year.

轉向我們的第二季業績。總收入為 6.104 億美元，比去年同期增加 170 萬美元，或 0.3%。第二季銷售額的成長主要是由於我們首日計畫的成長，該計畫成長了 39%，達到 1.99 億美元，部分被點菜課件銷售額的下降所抵消，其中包括由於我們專注於我們商店的盈利能力。第二季持續經營業務調整後 EBITDA 為 5,030 萬美元，增加了 1,110 萬美元，即 28.3%，主要是由於 S&A 費用比上年減少了 1,300 萬美元。

Before turning the call over to Jonathan to discuss our retail segment results, I'll provide a brief comment on the strategic alternatives process. Our Board of Directors continues its ongoing review of a broad range of strategic alternatives available to the company, including, but not limited to, potential capital raises, asset divestitures, sales of business, and pursuit of stand-alone growth plans. We're committed to executing on the best path forward for the company and our stakeholders to maximize value and best position our business for the future. We won't be commenting further on this until the Board of Directors has concluded that disclosure is appropriate or required.

在將電話轉給喬納森討論我們的零售部門業績之前，我將簡要評論戰略替代流程。我們的董事會繼續對公司可用的廣泛策略選擇進行持續審查，包括但不限於潛在的資本籌集、資產剝離、業務出售以及追求獨立的成長計劃。我們致力於為公司和利害關係人執行最佳的前進道路，以實現價值最大化並為我們的未來業務提供最佳定位。在董事會得出結論認為披露是適當或需要的之前，我們不會對此發表進一步評論。

Now I'll turn the call over to Jonathan.

現在我將把電話轉給喬納森。

Thanks, Mike. Our team delivered a solid second quarter, driven by strong operating performance that enabled us to grow revenue while increasing retail adjusted EBITDA by 23%. Retail revenue growth was driven by course material comparable store sales growth of 5.8%. Our First Day programs, which increased 39% to $199 million, were the primary drivers of this growth.

謝謝，麥克。在強勁營運業績的推動下，我們的團隊在第二季度取得了穩健的業績，這使我們能夠實現營收成長，同時零售調整後 EBITDA 成長 23%。零售收入成長是由課程材料可比商店銷售額成長 5.8% 推動的。我們的首日計畫成長了 39%，達到 1.99 億美元，是這項成長的主要推動力。

In particular, First Day Complete revenue increased by 52% to $136 million. First Day Complete not only grew in the quarter due to the year-over-year store count growth, but comp FDC stores experienced 6.5% growth in course material sales due to increasing student participation rates, which highlights FDC's positive impact on access, affordability, convenience, and academic success.

尤其是首日完成營收成長了 52%，達到 1.36 億美元。First Day Complete 不僅由於商店數量同比增長而在本季度實現增長，而且由於學生參與率的提高，FDC 商店的課程材料銷售額也增長了 6.5%，這突顯了 FDC 對訪問、負擔能力、便利和學業成功。

Since we launched First Day Complete, we've transitioned 157 campus stores to our innovative B2B course material model, which this past fall term encompassed enrollment of nearly 800,000 students. While this is impressive growth, we believe we are just scratching the surface. Our active dialogue with institutions and the FDC contracts already signed for spring term '24 and fiscal 2025 suggests that inclusive and equitable access is rapidly becoming the primary course material distribution model. Given the strength of our pipeline, we remain confident in our abilities to successfully accelerate the scaling of FDC and the long-term growth and sustainable financial benefits of the equitable access model.

自從我們推出 First Day Complete 以來，我們已經將 157 家校園商店轉變為我們創新的 B2B 課程材料模型，去年秋季學期有近 80 萬名學生註冊。雖然這是令人印象深刻的成長，但我們相信我們只是觸及了表面。我們與各機構的積極對話以及已簽署的 24 年春季學期和 2025 財年的 FDC 合約表明，包容性和公平的獲取正在迅速成為主要的課程材料分發模式。鑑於我們管道的實力，我們仍然對成功加速 FDC 規模的擴大以及公平准入模式的長期增長和可持續財務效益的能力充滿信心。

Turning to general merchandise, comparable store sales growth declined by 1.7%. The decrease was primarily due to declines in trade books and cafe and convenience items. These two categories were most impacted by the delayed inventory receipts we discussed with you last quarter. Partially offsetting the decline was a 0.5% increase in emblematic sales. During the quarter, the benefits from our Fanatics and Lids relationship were on full display at our schools. For example, at the Ohio State University bookstore, lines began forming around the block at 4:30 AM to participate in an exclusive in-store launch of Ohio State branded lululemon merchandise.

至於一般商品，可比商店銷售額增幅下降了 1.7%。下降的主要原因是貿易書籍、咖啡館和便利用品的下降。這兩個類別受我們上季與您討論的庫存收貨延遲的影響最大。標誌性銷售額成長 0.5%，部分抵銷了這一下降。本季度，我們的 Fanatics 和 Lids 關係所帶來的好處在我們的學校得到了充分展示。例如，在俄亥俄州立大學書店，凌晨 4:30，街區周圍開始排隊，參加俄亥俄州立大學品牌 lululemon 商品的店內獨家發布會。

I continue to be amazed at how our teams provide our students, parents, faculty staff, and alumni with unique products and experiences that raise the bar in differentiating Barnes & Noble College run bookstores. As we've shared with you before, our commitment to growing profitability is at the heart of our ability to serve our students and institutions in a manner that they deserve and expect. It's been gratifying to see cost discipline, productivity, and efficiency embedded into our culture while continuing to provide an outstanding experience for our campus partners. As a result, second-quarter retail selling and administrative expenses decreased by $12.9 million year over year and 210 basis points as a percent of revenue to 12.9% from 15%. Adjusted EBITDA increased by $8.9 million.

我仍然對我們的團隊如何為學生、家長、教職員工和校友提供獨特的產品和體驗感到驚訝，這些產品和體驗提高了巴諾書店經營書店的差異化標準。正如我們之前與您分享的那樣，我們對提高盈利能力的承諾是我們以學生和機構應得和期望的方式為他們提供服務的能力的核心。我們很高興看到成本紀律、生產力和效率融入我們的文化，同時繼續為我們的校園合作夥伴提供卓越的體驗。結果，第二季零售銷售和管理費用年減 1,290 萬美元，佔營收的百分比從 15% 下降 210 個基點至 12.9%。調整後 EBITDA 增加 890 萬美元。

I'll now turn the call over to Kevin to discuss our financial results in more detail.

我現在將把電話轉給凱文，更詳細地討論我們的財務表現。

Thanks, Jonathan, and good afternoon, everyone. It's great to be on a call with you today. It's been an exciting time since joining Barnes & Noble Education back in September. The momentum behind our shift to a more profitable and predictable FDC model, combined with our focus on operating efficiencies, presents a compelling opportunity to create a sustainable long-term value for our stakeholders. As such, I'm looking forward to contributing to the continued success of our transformation.

謝謝喬納森，大家下午好。很高興今天能與您通電話。自從九月份加入 Barnes & Noble Education 以來，這是一個激動人心的時刻。我們轉向利潤更高、可預測的 FDC 模式背後的動力，加上我們對營運效率的關注，為我們的利害關係人創造可持續的長期價值提供了絕佳的機會。因此，我期待為我們轉型的持續成功做出貢獻。

Turning to the fiscal 2024 second-quarter results and related matters. Consolidated second-quarter revenue from continuing operations of $610.4 million grew by 3/10 of 1% or $1.7 million. Consolidated adjusted EBITDA grew by 28.3% or $11.1 million to $50.3 million. The combination of top-line growth, improving operating efficiencies, and further progress on our cost savings initiative actions drove a 180-basis point increase in EBITDA margin to 8.2%.

轉向 2024 財年第二季業績及相關事項。第二季持續營運合併收入為 6.104 億美元，成長 1% 的 3/10，即 170 萬美元。合併調整後 EBITDA 成長 28.3%，即 1,110 萬美元，達到 5,030 萬美元。營收成長、營運效率提高以及成本節約措施的進一步進展相結合，使 EBITDA 利潤率增加了 180 個基點，達到 8.2%。

During the quarter, total retail segment revenue increased by $700,000 or 1/10 of 1% to $599.3 million driven by a 5.8% increase in comparable store course material sales, offset by a 1.7% decline in comparable store general merchandise sales. Course material sales growth was due to increase in the First Day and First Day Complete revenues, which increased 39% to $199.2 million. With revenues from these subscription-like programs approaching 50% of our course material revenues, our course material business is becoming a much more stable and predictable business.

本季度，零售部門總收入增長了 700,000 美元，即 1% 的 1/10，達到 5.993 億美元，這是由於可比商店課程材料銷售增長 5.8%，但被可比商店一般商品銷售下降 1.7% 所抵消。課程材料銷售的成長歸因於首日和首日完整收入的增加，增加了 39% 至 1.992 億美元。隨著這些訂閱類項目的收入接近我們課程材料收入的 50%，我們的課程材料業務變得更加穩定和可預測。

Second-quarter retail gross profit of $125.5 million decreased by $4 million or 3.1%. Retail gross margin of 20.9% decreased by 70 basis points from the prior year period. Retail gross sale margins decreased due to a decline in course materials' gross margin due to higher markdowns, including markdowns related to closing of underperforming and unprofitable stores, as well as higher percentage of lower margin digital course material sales, and lower commissions for our emblematic general merchandise. These decreases were partially offset by lower contract costs as a result of the shift to digital and First Day models and the growth of higher margin First Day Complete revenue.

第二季零售毛利為 1.255 億美元，減少 400 萬美元，即 3.1%。零售毛利率為20.9%，較上年同期下降70個基點。零售毛利率下降是由於降價幅度加大導致課程材料的毛利率下降，其中包括與關閉表現不佳和無利可圖的商店相關的降價，以及利潤率較低的數字課程材料銷售比例較高，以及我們標誌性課程的佣金較低。這些下降被由於轉向數字和首日模式而導致的合約成本降低以及首日完成收入的利潤率更高的增長所部分抵消。

Retail EBITDA increased by $8.9 million to $48.3 million, due primarily to a $12.9 million year-over-year reduction in selling and administrative costs offset by a $4 million reduction in gross profit.

零售 EBITDA 增加 890 萬美元，達到 4,830 萬美元，主要是因為銷售和管理成本年減 1,290 萬美元，但毛利減少了 400 萬美元。

Moving on to wholesale, sales for the quarter were essentially flat at $21 million. Wholesale gross profit was $6.1 million or 29% of sales in the second quarter of fiscal 2024 compared to $5.5 million or 25.8% of sales in the second quarter of fiscal 2023. The increase in gross profit and gross margin rate was due primarily to lower markdowns and lower product costs, partially offset by an increase in the returns and allowances.

說到批發，該季度的銷售額基本上持平，為 2,100 萬美元。2024 財年第二季的批發毛利潤為 610 萬美元，佔銷售額的 29%，而 2023 財年第二季的批發毛利潤為 550 萬美元，佔銷售額的 25.8%。毛利和毛利率的增加主要是由於降價和產品成本下降，但部分被退貨和折讓的增加所抵消。

Wholesale selling and administrative expenses for the quarter decreased by 9.7% to $3.5 million. The decrease was primarily due to cost savings initiatives comprised of lower payroll and incentive plan compensation expense. The lower S&A drove wholesale non-GAAP adjusted EBITDA to $2.6 million, an increase of $1 million.

本季批發銷售和管理費用下降 9.7%，至 350 萬美元。減少的主要原因是成本節約舉措，包括降低工資和激勵計劃補償費用。較低的 S&A 推動批發非 GAAP 調整後 EBITDA 達到 260 萬美元，增加了 100 萬美元。

Moving on to the balance sheet, our cash balance was $15 million at the end of the quarter, with outstanding borrowings of $234 million as compared to borrowings of $215 million in the prior year period and $278 million in the first quarter. CapEx decreased by $5.3 million to $4 million from $9.3 million due primarily to continued focus to reduce spending and capture additional efficiencies.

轉向資產負債表，本季末我們的現金餘額為 1,500 萬美元，未償還借款為 2.34 億美元，而上年同期借款為 2.15 億美元，第一季借款為 2.78 億美元。資本支出從 930 萬美元減少到 400 萬美元，減少了 530 萬美元，主要是由於繼續專注於減少支出和提高效率。

Regarding guidance, we are maintaining our fiscal 2024 adjusted EBITDA from continuing operations expectation of approximately $40 million. The year-over-year increase in consolidated adjusted EBITDA is expected to be driven by growth in the company's retail segment, primarily due to growth in the company's First Day programs and the impact of the cost reduction actions the company has executed and expects to continue to implement.

關於指導，我們維持 2024 財年調整後 EBITDA 不變，持續經營預期約 4,000 萬美元。預計合併調整後 EBITDA 的同比增長將由公司零售部門的增長推動，這主要是由於公司首日計劃的增長以及公司已執行並預計將繼續執行的成本削減行動的影響來實施。

With that, I'll turn the call over to Mike for closing comments.

至此，我會將電話轉給麥克以供結束評論。

Thanks, Kevin. In closing, we had another solid quarter and we are making excellent progress against our strategic priorities. We're all extremely energized by what our team has accomplished in such a short period of time and even more so in where we are headed as a company. We are confident in our strategy, our highly capable and motivated team, and our strong competitive position to continue the successful execution of our strategic focus on sustainable and profitable growth.

謝謝，凱文。最後，我們又度過了一個穩健的季度，並且我們在戰略重點方面取得了出色的進展。我們都對我們的團隊在如此短的時間內所取得的成就感到非常興奮，對於我​​們作為一家公司的發展方向更是如此。我們對我們的策略、我們能力強、積極進取的團隊以及我們強大的競爭地位充滿信心，能夠繼續成功執行我們可持續和獲利成長的策略重點。

Thank you for participating today. And now I'll turn the call over to the operator so we can take your questions.

感謝您今天的參與。現在我將把電話轉給接線員，以便我們回答您的問題。

(Operator Instructions) Ryan MacDonald, Needham & Co.

（操作員說明）Ryan MacDonald, Needham & Co.

Hey, guys, this is Matt Shea on for Ryan. Thanks for taking the questions and congrats on the strong quarter here. A couple of questions from me, maybe to start. So nice to see six additional wins for the spring term for the First Day Complete model. But thinking about the rest of the year, are there additional campuses in the pipeline for spring '24? Or is there just not enough time left in the year for those deals to still close? And then thinking about the flip side of that question and depending on the commitment timing, if not spring, are you seeing incremental commitments for fall of 2024? How is that trending relative to your expectations?

嘿，夥計們，這是瑞安的馬特謝伊。感謝您提出問題，並祝賀本季的強勁表現。我先問幾個問題。很高興看到第一天完整模型在春季學期額外贏得了六場勝利。但想想今年剩下的時間，24 年春季是否還會有更多校區？或者今年剩下的時間是否不足以完成這些交易？然後思考這個問題的另一面，根據承諾時間，如果不是春季，您是否會看到 2024 年秋季的增量承諾？與您的預期相比，這趨勢如何？

Yes. Thanks for the question. It's Jonathan. We're actually really excited about the number of transitions we have for spring; it's consistent with past trends. And then the pipeline, we're really encouraged, as we said in our remarks, by the pipeline of schools that have either already committed or are on the verge of committing for a fall 20 -- fall term '24 launch, which would be our fiscal '25.

是的。謝謝你的提問。這是喬納森。事實上，我們對春季的過渡數量感到非常興奮；這與過去的趨勢是一致的。然後，正如我們在演講中所說，我們真的很受鼓舞，因為學校已經承諾或即將承諾推出 20 秋季學期 '24 秋季學期，這將是我們的財政'25。

So the pipeline is robust. We're having hundreds of conversations with institutions. And the value proposition of affordability, access, convenience, which ultimately is leading to enhanced student outcomes, continues to resonate on campuses throughout the country. So incredibly excited about the pipeline and the accelerated growth of our First Day Complete program.

所以管道是穩健的。我們正在與機構進行數百次對話。負擔得起、方便、便利的價值主張最終會提高學生的成績，繼續在全國各地的校園中引起共鳴。我們對首日完整計劃的管道和加速成長感到非常興奮。

Okay, got it. That's helpful color. So it sounds like the conversations -- or within the remaining university partners, conversations are trending well, but maybe for those that have not yet to make a decision, is there any sense of mix you have for the customers or university partners that are going to opt out or churn away from the program?

好的，明白了。這是有用的顏色。因此，聽起來像是對話——或者在剩餘的大學合作夥伴中，對話趨勢良好，但也許對於那些尚未做出決定的人來說，對於即將進行的客戶或大學合作夥伴來說，你是否有任何混合感？

No, not at this point. I think all the conversations are really positive. And I would say it's not a matter of if; it's really a matter of when. And those are detailed discussions we have with each of our campus partners in terms of when we would launch the program when they communicate tuition and/or fee changes within their academic calendars each year. And so it's incredibly positive. We've had great momentum in terms of what we've done and the number of campuses that we're now running First Day Complete with, and as I said before, we expect that to accelerate going forward.

不，目前還不行。我認為所有的談話都是非常正面的。我想說，這不是「是否」的問題；而是「是否」的問題。這確實是一個時間問題。這些是我們與每個校園合作夥伴就何時啟動該計劃進行的詳細討論，當他們每年在其學術日曆中傳達學費和/或費用變化時。所以這是非常積極的。就我們所做的事情以及我們正在運行 First Day Complete 的校園數量而言，我們已經取得了巨大的動力，正如我之前所說，我們預計這一勢頭將加速前進。

Okay. And then last question for me. Just thinking about some of the newer programs in cohorts this fall, understanding it's no longer an opt-in model, but rather an include or opt-out model. You noted last quarter it was too early to gauge those opt-out rates in the new cohort of schools. And now that you're a little deeper into the semester, how have those opt-out rates trended, and how do those kind of compare to your internal expectations? Thanks, guys.

好的。然後是我的最後一個問題。只要想想今年秋天隊列中的一些新項目，就會明白它不再是一個選擇加入的模型，而是一個包含或選擇退出的模型。您在上個季度指出，現在評估新一批學校的選擇退出率還為時過早。現在你已經深入了解了這個學期，這些選擇退出率的趨勢如何，以及與你的內在期望相比如何？謝謝，夥計們。

Yes, we refer to it, as we did in our comments, as a participation rate and the number of students that are participating. And the participation rates are aligned with and even exceeding our expectations at our schools this fall.

是的，正如我們在評論中所做的那樣，我們將其稱為參與率和參與的學生數量。今年秋季的參與率符合甚至超出了我們對學校的預期。

And what we've seen is that -- and again, mentioned this, not only do we see strong participation rates overall, but as schools participate in FDC year over year, those participation rates of those schools are actually improving, as students who are freshmen or sophomore experience FDC understand the convenience, the affordability aspect, the impact it has on their academic success. And the rates continue to get better with each year for each of those cohorts, which is a really exciting development and even highlights more upside in the First Day Complete model for us and our campus partners.

我們所看到的是——再次提到這一點，我們不僅看到整體參與率很高，而且隨著學校逐年參與 FDC，這些學校的參與率實際上正在提高，因為學生大一或大二的FDC 體驗了解便利性、可負擔性及其對學業成功的影響。這些群體的比率每年都在不斷提高，這是一個非常令人興奮的發展，甚至凸顯了首日完成模式對我們和我們的校園合作夥伴的更多優勢。

Appreciate the color. Congrats again, guys.

欣賞顏色。再次恭喜，夥計們。

Alex Fuhrman, Craig-Hallum Capital.

亞歷克斯·福爾曼，克雷格·哈勒姆資本。

Hey, guys. Thanks for taking my question. If I'm not mistaken, I believe you said that First Day Complete dollar revenue growth was more than enough to offset the decline that you saw in the quarter in dollars in a la carte course materials. If I'm not mistaken, I think this is the first time that you guys have said this. Does this more or less mean that you've turned a corner, and from this point going forward, courseware material -- required materials revenue should be growing?

嘿，夥計們。感謝您提出我的問題。如果我沒記錯的話，我相信您說過首日完整美元收入增長足以抵消您在本季度看到的點菜課程材料美元收入的下降。如果我沒記錯的話，我想你們是第一次這麼說。這是否或多或少意味著您已經渡過了難關，從現在開始，課件材料—所需材料的收入應該會成長？

Yes, Alex, it's Mike. Exactly right. The numbers I cited were year-to-date decreases in the First Day and First Day Complete combined program revenues versus the decline. If you look at [Hawaiian and access] and think about that on a current, we have crossed that line now, whereas the model change as inflected at the top line and that top-line inflection of reversing the trend of years and years of courseware declines, although we've been able to post some courseware growth because of First Day Complete, fits very clear now that with the acceptance by the market of the equitable access, inclusive access models, that when you combine those together, that we're reversing that trend of courseware sales declines from a la carte -- kind of a traditional a la carte model.

是的，亞歷克斯，是麥克。完全正確。我引用的數字是年初至今首日和首日完整節目總收入的下降幅度與下降幅度的比較。如果你看一下[夏威夷語和訪問]並考慮一下當前的情況，我們現在已經跨越了這條線，而模型的變化在頂線處發生了變化，並且頂線的變化扭轉了多年來課件的趨勢儘管由於首日完成，我們已經能夠發布一些課件增長，但隨著市場對公平訪問、包容性訪問模式的接受，我們已經能夠發布一些課件增長，但當你將這些結合在一起時，我們就很清楚地看到，扭轉了課件銷售下降的趨勢，即點菜——一種傳統的點菜模式。

That is huge. And it's clear evidence that the strategy -- the right strategy is working. And the other benefit is it's a much more predictable revenue stream so that allows us to rightsize our cost structure and our CapEx with more certainty in advance as we approach each business cycle.

那是巨大的。有明確的證據表明該策略——正確的策略正在發揮作用。另一個好處是，它是一個更可預測的收入流，使我們能夠在接近每個業務週期時提前更確定地調整我們的成本結構和資本支出。

Okay. That's really helpful. Thank you for that. And certainly sounds like a big milestone to have reached that point. So congratulations to you and the whole team that I know has been working on that for years to get to that moment here. Certainly understand that having more predictable and recurring revenue should help you on the cost side, did want to just ask you about the comment in the press release. I guess given the nature of how some of these early deals were struck, it sounds like you're not actually collecting any cash until after the drop add dates. Can you just talk to us about that dynamic a little bit more? Does it perhaps counterintuitively mean that you might actually need a larger credit facility over time as First Day Complete becomes a bigger share of revenue and more of the cash collection is deferred to farther into the semester?

好的。這真的很有幫助。謝謝你。要達到這一點聽起來確實是一個重要的里程碑。因此，恭喜您和整個團隊，我知道多年來一直在努力實現這一目標。當然明白，擁有更可預測和經常性的收入應該在成本方面對您有所幫助，我確實想問您有關新聞稿中的評論。我想考慮到這些早期交易的達成方式的性質，聽起來你實際上直到刪除添加日期之後才收到任何現金。您能跟我們多談談這種動態嗎？這是否可能違反直覺，意味著隨著時間的推移，您可能實際上需要更大的信貸額度，因為首日完成在收入中所佔的份額越來越大，並且更多的現金收取被推遲到學期的更長？

Yeah, I think it speaks to the size of the credit facilities and working capital timing issue that we've improved a lot in terms of our ability to collect receivables much more quickly. Under the old traditional model, you're collecting at the point of sale at the cash register from students, but you really couldn't predict what that was going to be when you have a contract and in advance, you have a fairly tight range of being able to forecast what the take rates are -- what the participation rates are, I should say, you know what the price per credit hour is, becomes much more predictable.

是的，我認為這說明了信貸額度的規模和營運資金時間問題，我們在更快地收回應收帳款的能力方面已經有了很大的提高。在舊的傳統模式下，你在收銀機的銷售點向學生收取費用，但你真的無法預測當你簽訂合約時會發生什麼，並且提前，你有一個相當狹窄的範圍能夠預測接受率是多少——參與率是多少，我應該說，你知道每個學時的價格是多少，變得更加可預測。

And I guess the other thing that I would say about the transition and working capital is that we're really transitioning the company to a B2B revenue model as opposed to B2C; that's what First Day, First Day Complete really is. So it really lines up the financial model we have with the operating model we have.

關於轉型和營運資金，我想我要說的另一件事是，我們確實正在將公司轉型為 B2B 收入模式，而不是 B2C；這就是《第一天，第一天完整》的真正意義。因此，它確實使我們的財務模式與我們的營運模式保持一致。

We're a contract service provider where our real strength is the relationships and the contracts with us, exclusivity provisions that we enter into with the schools. And so putting that financial model on a more of a B2B basis really makes sense because we're dealing with the school on a business basis in structuring the contracts, and transferring that model to more of a we-bill-you school, we collect from you. They can see the benefit of it, we can see the benefit of it, and it becomes much more of a joint partnership working to optimize that courseware delivery model.

我們是一家合約服務提供者，我們的真正優勢在於與我們的關係和合同，以及我們與學校簽訂的排他性條款。因此，將這種財務模式更多地建立在B2B 的基礎上確實很有意義，因為我們在商業基礎上與學校打交道，構建合同，並將該模式轉移到更多的“我們向您開具帳單」的學校，我們收集來自你。他們可以看到它的好處，我們也可以看到它的好處，並且它更像是一種共同合作夥伴關係，致力於優化課件交付模型。

Okay. That's really helpful, guys. Thank you very much.

好的。這真的很有幫助，夥計們。非常感謝。

Ladies and gentlemen, that concludes today's conference call. Thank you all for joining, and you may now disconnect.

女士們先生們，今天的電話會議到此結束。感謝大家的加入，現在可以斷開連線了。