Q2 2021 Skillsoft Corp Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to Skillsoft second quarter fiscal 2022 results conference call. At this time, all participants are in a listen only mode.
After the speakers present, there will be a question and answer session.
I would now like to hand, the conference over to your first speaker today, Jim Ruskin interim head of Investor Relations.
Please go ahead.
Good afternoon, and welcome to <unk> second quarter fiscal 2022 earnings call.
We will be discussing the results announced in our press release issued after the market close today.
With me are <unk>, CEO, Jeff Tarr and interim CFO Ryan Murray.
Today's call will contain forward looking statements, which are made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.
Forward looking statements include statements concerning financial and business trends, our expected future business and financial performance and financial condition and our guidance for fiscal 2022.
They can be identified by words, such as expect anticipate intend plan believe seek or will.
These statements reflect our views as of today, only and should not be relied upon as representing our views at any subsequent date.
And we do not undertake any duty to update these statements.
Statements as to market share industry data and our market position or based on data generated internally by the company.
While we are not aware of any misstatements regarding market position our industry data discussed on today's call are estimates involve risks and uncertainties.
And are subject to change based on various factors.
Forward looking statements by their nature address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations.
For a discussion of the material risks and other important factors that could affect our actual results.
Please refer to the risks described in today's press release, our quarterly report on Form 10-Q for the three months ended July 31, 2021 to be filed with the Securities and Exchange Commission.
And our other periodic filings with the SEC.
During the call. We will also discuss certain non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles.
Now a few comments on the required GAAP presentation of <unk> financial statements following the merger and destock on June 11th.
GAAP requires accounting periods before and after June 11th to be separated into predecessor, and successor periods to reflect the change in ownership and lack of comparability between periods due to different ownership and investment basis.
In addition, global knowledge activity is only reflected in the GAAP financial statements. After June 11th references on this call to combined GAAP results reflect a combination of the predecessor period before June 11 that excludes global knowledge with the successor period After June 11th.
For all non-GAAP measures in the supplemental materials filed with the SEC today and in today's commentary. The company is providing normalized results as if skillsoft and global knowledge and combined for all periods presented which we believe is useful to investors to show the trends of the go forward company.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as how we define these metrics and other metrics is included in our earnings press release, which has been furnished to the SEC and is also available on our website at www dot still soft dot com.
With that I will turn the call over to Jeff.
Thanks, Jim and thanks to all who have joined our first earnings call as the new Skillsoft.
Our vision is to be the most highly valued provider of learning solutions preparing the workforce of today with the skills for tomorrow.
When we say valuable we mean to our customers our learners our communities our team members and our shareholders.
Importantly, we believe that the most highly valued provider of worrying solutions, serving the world's workforce will be built on great technology, and we will deliver it solutions primarily online.
We are proud to operate the largest corporate digital learning business in the world.
With more than $600 million ending.
In digital learning revenue for more than 5000 enterprise customers.
We are also the most profitable.
To be the most valuable we must also deliver growth.
I am pleased to report that this quarter, we exceeded our expectations and grew bookings by 18% with.
With strong performance in all three of our business segments.
The skull soft content segment, which includes our precipitate a learning experience platform was up 9%.
Global knowledge was up 30% these.
These segments on a combined basis were up 19%.
And are some total segment was up 15%.
Each part of the business also delivered major blue chip customer wins during the quarter.
In addition to our strong bookings growth, we achieved a number of key milestones this quarter.
We began trading on the New York stock exchange.
We established a healthy balance sheet with the benefit of our strategic investment from process one of the world's largest technology investors.
We refined and reduced our debt eliminating $25 million in annual cash interest expense.
We appointed a world class board of directors with decades of relevant experience from the highest levels of industry academia and government.
We seeded a new management team that is already executing well against our targets.
And announced a new CFO and SVP of Investor Relations, who will be joining us soon.
And we completed the acquisition of Puma, adding a fast growing digital coaching platform to our portfolio.
Notably we accomplished all of this while significantly advancing our integration with global knowledge.
This speaks to the dedication of our team members and to what we can accomplish as the new skill soft.
For those who are new to scale soft I'd like to provide a brief overview of the market opportunity and the company.
And share our growth strategy.
I will then hand, it over to Ryan to walk you through the numbers in greater detail.
And I'll close with an update on our guidance before we open the call for questions.
We believe the new skill soft is the global leader in corporate digital learning.
We serve an estimated $28 billion total addressable market growing at approximately 10% annually.
The growth is being driven by an increasing skills gap and the transition from a classroom first approach to corporate learning to a digital first approach that has been accelerated by Covid and work from home.
According to the OECD technology will radically transform $2.0 billion jobs by 2030.
According to Mckinsey, 87% of companies worldwide, either currently have skills gaps or believe they will within the next few years.
Core skills are changing at an unprecedented pace.
Reskilling the war for talent and the great resignation have all become C suite topics.
With approximately 70% of the Fortune 1000, as our customers. We believe skillsoft is ideally positioned to prepare today's workforce for the jobs of tomorrow.
Not only is skill soft the largest provider of digital learning solutions to enterprise customers.
But we are also the only player that operates at scale and the three largest categories of corporate digital learning.
Leadership and business skills.
Tech and Dev and.
And compliance.
We are number one or number two in each of these categories, which collectively represent approximately 80% of the addressable market.
And we're number one in corporate digital learning revenue overall.
By playing in all three categories, we are uniquely positioned as a one stop shop for a wide range of corporate digital learning needs.
Importantly, the breadth of our offerings drives higher dollar retention rates.
We find that when a customer buys all three categories, we get a 21 percentage point lift in retention compared to when they buy one.
Currently 45% of our annual recurring revenue or <unk> comes from customers to buy all three products.
And as we cross sell to the remaining 55% and add new offerings like global knowledge and Plomer, we expect to drive both new revenue growth and higher retention rates.
We deliver our proprietary and third party content through to modern best in class SaaS software platforms.
Precipitous.
A leading learning experience platform or <unk> P M.
In sum total a leading learning management system or LMS.
Recipient is an advanced immersive AI, driven SaaS base L. XP.
Sum total is focused on meeting the learning and talent development needs of highly regulated industries by SaaS and on premise deployments.
In addition to selling our solutions to approximately 70% of the Fortune 1000.
We serve governments and small businesses.
All through a roughly 600 person go to market organization.
By virtue of our scale, we reached 45 million learners globally.
Our enterprise customer relationships large number of learners and go to market organization are important competitive advantages and provide a strong foundation for future growth.
We also have an incredible opportunity to create value for our shareholders.
We're starting with a strong foundation and an attractive SaaS business model with enterprise subscriptions high operating leverage low capital intensity and strong free cash flow conversion.
And with investments in content platform and go to market.
We've put the business on an improved growth trajectory.
As I mentioned, our vision is to be the most highly valued provider of learning solutions preparing the workforce of today with the skills for tomorrow.
Our strategy to realize this bold vision rests on six key pillars.
Content leadership.
Platform leadership.
Go to market leadership.
Operational excellence.
Disciplined M&A and our culture of leadership and learning.
Let me spend a few minutes today on the three key drivers of our organic growth.
Content leadership platform leadership and go to market leadership.
First content leadership.
Content is an important competitive advantage.
Skillsoft as a leading content creator and this differentiates us in the industry.
Our content is designed for the way people learn online using our micro learning approach, where 140000 short videos, usually a few minutes in length are strung together and interspersed with assessments and badges.
Forming more than 14000 courses and nearly 80 aspire learning journey.
We currently offer over 180000 content assets and 30% of our catalog consists of our own original content.
Our proprietary content is developed using our neuroscience based approach validated by MIP.
It drives 90% of our usage and has been substantially refreshed over the last four years with more than $100 million of investment.
And as a result of our global knowledge acquisition, we have substantially strengthened our position in tech and Dev.
Adding the largest catalog of mission critical authorized content through our partnerships with the world's largest technology companies.
We believe no one has prepared more it professionals for certification and us.
This quarter, we launched updated diversity equity and inclusion and customer service courses that collectively generate a net promoter score of 60.
Underscoring the high quality of our refreshed content.
We also closed the acquisition of Puma, which brings at disruptive and robust personalized executive coaching offering to our customers.
Coaching is highly valued by current and future leaders and their employers.
And as a powerful tool for both professional development and employee retention.
Historically coaching has only been available to a small number of executives due to its high cost often tens of thousands of dollars.
Puma has democratized access to this valuable opportunity by offering impactful coaching sessions over an engaging digital platform at a fraction of that cost.
Puma is indicative of the growth oriented bolt on acquisitions, we seek to complete on a regular basis.
Turning to our second pillar platform leadership.
We have been focused on accelerating the migration of customers from the legacy skill port to our Percipient learning experience platform.
As of the end of second quarter, 81% of our <unk> base for the Skillsoft content business was generated from customers on <unk> or Presidio dual deployment.
Up from 62% at the end of Q2 last year.
Precipitate bookings were up 47% and dual deployment bookings were up 19%.
Highlighting customer adoption of the platform.
We believe we are on track to have migrated 90% of our revenue base by the end of the fiscal year consistent with our plan.
On average over the last four quarters. The combined dollar retention rate for <unk> and dual deployment customers has exceeded that of the legacy <unk> platform by 23 percentage points.
And the second fiscal quarter, the Skillsoft content dollar retention rate was 99%.
And the dollar retention rate on Presidio and dual deployment combined with 103%.
We also added several platform features this quarter that further differentiate recipient in the market in three important ways.
First we strengthened our tech and Dev offerings through the launch of cloud labs that enhanced experiential learning.
Second we achieved a number of key milestones that will help customers complete their migration to precipitate.
We completed the integration with the cornerstone learning management system, allowing for improved content consumption experience on that platform.
We also added nine additional languages to the <unk> platform, bringing the total to 28, which allows us to better serve the learning needs of our global customer base.
And third later this month, we will be launching instructor led training events from global knowledge within precipitous.
Allowing us to deliver blended aspire journeys that add depth to the learning experience and strengthen our tech and Dev value proposition.
Now to our third pillar.
Go to market leadership.
Our new Chief revenue Officer, Eric Stine is off to a tremendous start.
We stood up a new customer acquisition team staffed with more than 30 professionals and extensive enterprise sales experience.
We integrated the global knowledge in Skillsoft Tech and Dev sales organization.
Creating a team of approximately 300 people serving the certification training needs of Cto's, Cio's cdos and their organizations.
We also filled a number of key leadership positions. In addition to Eric including a new head of go to market operations, a new sales leader for the Americas, and a new sales leader for Canada, a market that is performing well for us and showing signs of considerable growth potential.
Notable customer wins in the quarter include Rico Cannon, Ingersoll, Rand Kyocera and Datacom among others.
Our sum total business also had some big wins when competing head to head against the largest LMS providers in the industry.
In short we have done what we said we would do and.
And we're just getting started.
And the last three months, we have refinanced our debt and established a healthy balance sheet.
Gained scale in tech and Dev with the global knowledge transaction.
Assembled a world class team and board with a track record of driving growth and value for shareholders.
And strengthened our leadership and business skills offering by.
By adding a powerful digital coaching platform through the <unk> acquisition.
Looking ahead, there is more to do as we continue to build on our momentum.
With content, we remain focused on completing the integrated offering for skill soft and global knowledge and.
And continuing to strengthen our tech and Dev business, both organically and through partnerships and M&A.
With respect to our platform, we have completed all required technical and process work for our fed ramp certification and are approaching completion.
We are also adding integrations and developing features necessary to transition remaining skill port customers to precipitate.
Our top go to market priority as our salesforce transformation and achieving our growth targets.
Operational excellence at this point relates primarily to achieving our synergy targets.
With M&A, we will seek to complete additional acquisitions that are accretive to growth and long term value.
And finally, we are committed to our culture of leadership and learning built on an inspiring purpose vision and values.
And we will leverage our products to become a role model for learning and development.
With our new leadership team in place and recent improvements to content platform and go to market.
We believe we are well positioned to achieve our vision and create substantial value for our shareholders customers learners and other stakeholders.
I'll now turn the call over to Ryan Murray to discuss our financial results in greater detail.
Thanks, Jeff I will provide more detail on the second quarter and the first half performance along with some additional background information about our financials.
Before we dive in I'd like to make two quick points about our fiscal year and our terminology.
Our reporting period as the fiscal year, ending January 31 to align with legacy <unk> fiscal year.
Regarding terminology, beginning this quarter and going forward, we will be referring to bookings rather than your order intake.
While we've not changed the way we calculate this metric we believe the term bookings is more appropriate for the industry. We.
We still defined it as value of contracted sales commitments for the forward 12 month period captured at contract start where renewal date. This is sometimes referred to as annual bookings and as more conservative of a definition that including the full value of all contracts, even though is that extend beyond one year.
We believe our definition of bookings is a better indicator of future annual revenue.
Turning now to the consolidated results for the quarter and the first half of the year bookings.
Bookings for the quarter were $155 million up $23 million or 18% compared to the prior year and first half bookings were $284 million up $25 million or 10% compared to last year.
Adjusted revenue for Q2 was $176 million, an increase of $8 million or 5% in first half adjusted revenue was $343 million a decrease of $5 million we.
We have adjusted revenue to remove the impact of noncash deferred revenue fair value adjustment required under GAAP in purchase accounting and to gross up global knowledge reseller fees, which are accounted for on a net basis.
Combined GAAP revenue was $106 million for in Q$200 million for the first half of the year.
In terms of profitability Q2, adjusted EBITDA was $43 million, an increase of $1 million.
First half adjusted EBITDA was $81 million down $4 million compared to the prior year.
Adjusted EBITDA margin for both Q2, and the first half of the year was 24%.
Our adjusted EBITDA margin benefited from lower expenses during the first half of the year due to seasonality were higher expenses in the second half of the year correspond with higher bookings and the relative strength of the global knowledge business, which has lower margins.
Our combined GAAP GAAP net loss was $49 million for the quarter and $87 million for the first half.
Given our debt refinancing and pay down and the corresponding lower financing costs. Our go forward annualized cash interest will be reduced to approximately $30 million.
In terms of timing of free cash flow as we move forward, our highest billing periods occur in Q3 and Q4 <unk>.
Cash is typically collected in the first quarter after billings such that the more cash flow is generated in the fourth and first fiscal quarters.
On a long term basis, we continue to expect approximately 70% of our adjusted EBITDA will convert to free cash flow.
Following our debt refinancing our current gross debt balance was $480 million, excluding original issue discount and issuance costs at an interest rate of five 5% comprised of a 75 basis point LIBOR floor, plus 475 basis point spread or.
Our cash balance at quarter end was $90 million. We also have $50 million of capacity remaining on our accounts receivable credit facility.
<unk> Leverages two nine times and net leverage is two three times based on prior year adjusted EBITDA of $164 million.
In terms of individual segments.
Bookings for Skillsoft content for Q2 was $64 million, an increase of $5 million or 9% first half bookings were $103 million, an increase of $6 million or 6%.
Our content dollar retention rate is 99% and importantly, the combined for shipyard dual deployment dollar retention rate is 103%.
At the end of Q2, 81% of our IRR was on <unk> or dual deployment.
As Jeff mentioned, we expect to have 90% of our Skillsoft content annual recurring revenue baseline for shipyard oral dual deployment by the end of the fiscal year.
As we continue to migrate business to <unk>, we expect to see improving renewal rates.
So first half bookings for new customers in the content business through Q2 were $9 million.
At the time of the merger announcement, we estimated bookings for new customers to be between $22 million and $30 million for the year and we believe we are on track to deliver this.
We expect to see an increase in new content bookings throughout the year as our new sales team focused on customer acquisition continues to build out its pipeline.
Adjusted revenue for Skillsoft content in Q2 was $85 million a decrease of $1 million in first half adjusted revenue was $168 million a decrease of $3 million.
The decrease was driven by lower bookings in the prior year.
Given the delay between bookings and GAAP revenue recognition for annual subscription contracts a significant portion of bookings flow into revenue in the following year.
We expect the growth in current year bookings to support an improving trajectory of GAAP revenue recognition as we move into fiscal year 2023.
Bookings for global knowledge in Q2 was $64 million, an increase of $15 million or 30%.
First half bookings were $129 million, an increase of $23 million or 22%.
The global knowledge improvement was driven by a shift to digital and recovery from Covid headwinds experienced in the prior year Global knowledge also continues to transition from in person classroom training to virtual training, which has a better margin characteristics.
Virtual instructor led training represented more than 81% of total bookings in Q2.
Adjusted revenue for global knowledge for Q2 was $61 million, an increase of $11 million or 22%.
First half adjusted revenue was $160 million, an increase of $5 million or 4%.
Now turning to some total.
Bookings were $27 million, an increase of $4 million or 15%.
First half bookings were $53 million, a decrease of $3 million.
Adjusted revenue was $30 million, a decrease of $2 million versus last year and first half adjusted revenue was $59 million a decrease of $6 million.
Sum total continues to maintain a strong market position and talent development servicing customers with complex learning and compliance reporting requirements in the current year, we had a number of notable customer wins in this business with 20, new logos with that I'll turn it back to Jeff.
Thanks, Ryan as.
As you've heard today, we are delivering on our strategic and financial commitments.
Based on our strong first half we are increasing our full year guidance for bookings by $25 million at the midpoint.
And increasing adjusted revenue by $20 million at the midpoint.
While maintaining our guidance for adjusted EBITDA.
Our updated bookings outlook for the year is $690 million to $710 million.
And our updated outlook for adjusted revenue was $670 million to $690 million.
The increase reflects better than expected performance in the first half of the year.
Our guidance also considers that bookings are heavily weighted to the fourth quarter.
Our outlook for adjusted EBITDA remains unchanged at between $330 million.
This reflects growth investments as we extend our leadership position in the corporate digital learning industry.
Delay in realizing business combination of synergies due to the timing of the transaction close.
Other than anticipated D&O insurance costs.
And the margin impact of global knowledge as better than expected performance.
In the near term our primary focus is on top line growth as the most important driver of shareholder value creation.
Accordingly, we intend to continue making foundational investments and content platform and go to market to drive bookings and revenue growth.
While our near term focus is on accelerating topline growth, we remain committed to sustaining an attractive EBITDA profile and achieving our long term margin targets.
And so doing we believe we will deliver value to customers and shareholders and achieve our vision of being the most highly valued provider of learning solutions preparing the workforce of today with the skills for tomorrow.
With that I'll open the call for questions.
Thank you at this time, we will be conducting a question and answer session.
Like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the stack team.
We ask that you limit yourself to one question and one follow up per person one moment. Please while we poll for questions.
Our first question is from Peter Heckmann of D. A Davidson. Please proceed.
Good afternoon nice bookings results.
Can you talk about within per ship.
The company achieved the fed ramp certification and did that <unk>.
Contribute to.
Two two but bookings growth in the quarter.
Thanks, Peter the fed ramp certification and made great progress we've completed all the work necessary and so we've moved from what's called fed ramp ready to what's now called fed ramp in process. So we're in a final administrative phase as the last phase prior to fed ramp certification.
Patient so we are on track.
Got it got it and then did you provide.
Yes.
Our run rate revenue number for <unk>, if so I missed it.
No we did not Puma as a high growth business, but it's early stage. So the contribution in the quarter was immaterial.
Alright ill get back in the queue. Thank you.
Our next question is from Katherine <unk> of B Riley. Please state your question.
Hi, guys. This is cathy.
Hello Raj Sharma.
We're just looking to know what the.
<unk>.
Slide six federal entities.
Then overall cristofaro adoption still on track for the year, 100% by the end of <unk>.
Fiscal year 'twenty two.
So the question was a little garbled. So I missed the first part of it let me answer the second part, which I did hear and then perhaps you can.
Hit the first part again, but we are we believe we are on track to hit our target both to achieve 90% conversion to Presidio and Presidio dual deployment by the end of this fiscal year and to complete the migration by the end of next fiscal year.
The first part of your question, which I just couldnt hear great.
Just what was adult adoption rates recipient with federal entities.
Well at this point for <unk> is not yet fed ramp certified so it's.
Not yet.
Widely deployed inside the U S government that we expect to occur after the fed ramp certification, which we're expecting later this year.
Got it thank you.
Thank you.
Our next question is from Raimo <unk> of Barclays. Please state your question.
Thank you.
So me as well.
Jeff can you just talk more of a bigger picture now as we're coming out of the pandemic. What are you seeing in terms of customer appetite to refocus on your area in terms of also mobile knowledge in terms of going back to classrooms, where is this kind of staying digital.
What are you seeing I'll turn in terms of like the demand picture and how the industry has changed over the last year and a half.
So raimo I think you can see in our numbers that we are we are seeing strong adoption by our customers. We have seen an improvement in dollar retention rate right, we're seeing momentum in new sales the.
The over performance is most apparent in the global knowledge business, primarily because.
The bookings and the sales cycle on the bookings and the flow from bookings to revenue was just tighter in and global knowledge and we're seeing a big lift.
Been pleased with the recovery that we've seen especially in EMEA.
And I'm also pleased that we haven't seen any step backwards in terms of the improvement in mix that we saw during during COVID-19 with very strong.
Digital revenue was back north of 80% of the revenue remained digital classroom come back it may come back at some level, we're not counting on it and we're pleased that the higher margin digital revenue is performing as well as it is.
Perfect. Okay, and then one follow up if I think about <unk> and as you kind of convert the client base over like how do you think about the 100 free.
The retention rates that you have on there is that for you. The end came it seems like theres room for upside, but I just need to understand your industry, a little bit better Derek just if you could speak to that it would be nice and congrats Tony.
Thank you Raimo My view is the 103% is an improvement and so its progress, but its not a point of arrival and I see no reason why this business can't get to 110% say dollar retention rate.
And the reason I say that is first of all we are just getting started we have been focused on migrating customers to precipitous. So we've held back on price increases making migration the first priority.
We're just getting started on improving how we work with customers on investing in product strengthen our product we've talked about the tech and Dev investment. For example, we're also making investments in localization of content. So we're doing things that we believe over time will have a positive impact on <unk>.
Our retention rate and take us to what I believe is a reasonable best in class target, which is the 110% or better.
Makes sense. Thank you thank.
Thank you.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue for.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star.
One moment, please while we poll for additional questions.
Our next question is from Mark Chapelle of the benchmark company.
Please state your question.
Alright. Thank you for taking my question and congrats on the on the quarter here.
On the call a little bit late so I apologize. If you may have already covered this but with Jeff could you just bring us up to date, where you stand on the workday integration.
<unk>.
So thanks, Mark well, we didn't talk about it.
And on the main call, but I'm happy to give you an update we were really pleased to see I think it was just last week that workday communicated in writing to its customers its commitment to <unk>.
Workday integration with Skillsoft, and and Presidio in particular and and they gave a date of March of next year, but with beta customers prior to that.
We feel good about that Thats. Good progress workday is not the largest LMS and our customer base, but it is growing fast and and we're pleased that workday has has formally committed to the integration. So that's where we stand.
Great. Thanks, and then just.
Shifting gears, a little bit I was wondering could you just discuss the companies.
Focus or approach and micro learning right I was wondering if customers are continuing to embraces that youre seeing.
Maybe just give us your thoughts on where you believe the company is competitive wise with respect to its Michael Michael Boding, well, we believe we're the leader.
We believe we're the leader in delivering micro learning and digital learning in general to the enterprise Michael.
Micro learning drives a much higher completion rates much higher levels of engagement.
And as a result, we believe that's one of the many contributors to our success this quarter and why we believe we're positioned for strong growth in the future.
Okay, Great and then.
Jeff could you just talk a little bit about the plans for the total business and where you see it fitting in going forward.
Thanks, Ralph So total is a very good business and.
I'm really pleased with the improved execution that we've seen in the sum total organization.
We have been winning more and we won multiple actually 'twenty 'twenty accounts. This past quarter, most of which were head to head competition with the leading LMS is in the world. So that's terrific progress.
You saw the growth in the bookings and we feel good about about sum total it as part of our portfolio and we're committed to being very good stewards of that business, which is so critical to our customers.
Okay, great. Thank you that's all for me.
Yeah.
Our next question is from Arvind <unk> of Piper Sandler. Please state your question.
Hey, thanks.
I had a question on the overall funding environment.
<unk> companies in the education space has certainly increased.
Certainly they don't have the scale in terms of content or even enterprise relationships.
Debt.
Yeah.
But with that backdrop like are you.
Kind of looking at this set of interest.
The increase interest and kind of remote learning and digital learning and moving that is overall positive for your experience or do you kind of look at some of these.
I would say.
Funds that have.
Let me know.
Large amounts of funding and valuation.
Most competition in Yesterdays.
Or would we believe that our our lead in the enterprise is sufficiently large and compelling that that is an important competitive advantage. The fact that we also have a healthy balance sheet and a public currency also lends itself to.
The future value creation now that obviously be helpful for our multiple.
Reflect our performance and in <unk>.
Clothes that multiple GAAP with others in the industry. We believe with continued execution, we are going to do that and we believe that as we do that we'll have a stronger currency and and that will create.
Create value for shareowners ultimately.
Terrific terrific.
Just on the quarter itself.
Sorry, if you already provided.
Columbus, I hopped on a bit late.
But you had a quite a robust kind.
Kind of Q2, and then when I look at your guidance the guidance was largely taken up by the.
By the same same beat that you had in Q2.
So what are you going to say there is some level of conservatism.
Ached into into kind of the full year guidance or do you think it's kind of.
Kind of.
It's more realistic.
The guidance that you provided.
What I'd say to that is we're pleased with the first quarter and the first half and the momentum we're seeing in the business and I'm also pleased that we were able to raise guidance with the confidence that we are doing.
As I look at the second half I do see momentum in the business I'm also mindful of the fact that bookings are heavily weighted to the fourth quarter. So.
We are where we are and we will update you as soon as we have more to share them and feel great about the business and our ability to grow it.
Perfect.
Last question for me.
Certainly.
The loss like 18 months of a lot of.
Cyclical changes made.
As a result of the pandemic, but we're entering.
Month 18.
Is this still sort of concerns around that delta.
And whatnot.
If you look out over the next.
Now looking for guidance, but as you look out over the next one to three years.
Has this prolonged.
So the pandemic, causing some more permanent.
Okay.
Some of the changes are going to be more.
Secular in nature as opposed to some some quick fixes.
Pertains to digital learning.
I believe that we have moved.
From this world of classroom first and digital learning in the corporate environment to the world of digital first and I don't believe were going backwards as I talk to customers.
Hearing many of them have shutdown what was.
Corporate University campuses.
<unk> made a permanent shift to an online delivery.
Believe that shift to online delivery also brings with the ease of moving from in source to outsource and allows our customers to benefit from the scale that we bring to the solution. So I feel great about the long term prospects of this industry. There is still much headroom.
For continued market growth.
And that will be a beneficiary of that so so that's my view.
Terrific. Thank you very much.
We have reached the end of the question and answer session I will now turn the call back over to Jeff Tarr for closing remarks.
Super well. Thanks, so much I first want to thank all of the analysts who are on the call and have spent a lot of effort to learn our business and so you can communicate back to your clients and I appreciate everyone. Who's here today I also wanted to just take a moment on this call to thank Bryan Murray, who has taken on.
The additional role of interim CFO and this is in addition to a full time job as Chief Accounting officer, which he enrolled he is going to continue and he has been terrific and I'm looking forward to continuing to work with them.
I also want to thank Jim <unk> for his work as our interim head of IR, He's moving into a lead role in our corporate development organization and as everyone knows that strategically very important to our business.
Gerry Ferraro will be joining us as CFO later this month is actually here in the building today. Many of you know him and Im looking forward to introducing those of you who don't to them very soon.
And then finally, Eric Boyer will be joining us as SVP of IR. Upon the closing of <unk> acquisition of IHS Markit. So thank you everyone and I'm looking forward to seeing you back here next quarter, if not sooner.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a great day.
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Yeah.
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Yes.
Thanks.
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