Barnes & Noble Education, Inc. Aktie

Good morning, everyone, and thank you for joining us. I'm Jonathan Shar, CEO of Barnes & Noble Education. On behalf of the entire leadership team, we're excited to welcome you to our Investor Day live from the New York Stock Exchange. During the course of today's discussion, we'll provide a deeper look into our business, the transformation underway across BNED, the opportunities we see ahead and how we're positioning the company to drive long-term shareholder value.

You'll hear directly from the leaders responsible for executing our strategy. Before we begin, I'd also like to recognize the thousands of BNED employees and our campus partners across the country. Their commitment to serving students, faculty and institutions is what makes our success possible and has positioned the company for the progress we'll discuss today. Our goal today is simple, to help you better understand why we believe BNED is uniquely positioned at the intersection of higher education, digital learning, omnichannel retail, affordability and student success and why that position creates meaningful opportunities for long-term growth and shareholder value creation.

Before we begin, I'll briefly note that today's presentation includes forward-looking statements and references to non-GAAP financial measures. Please review the disclosures contained in this presentation and our SEC filings for additional information regarding risks and assumptions. With that, let's get started.

I'd like to begin with who we are, what we've become and why we believe our position within higher education is stronger today than at any point in our history. I'd also like to introduce the leadership team joining me today: Jason Snagusky, our Chief Financial Officer; Celeste Risimini-Johnson, our Chief Merchandising and Operations Officer; Brian Stark, our Chief Operating Officer of Stores; and Chris Sackett, our Chief Academic Solutions Officer. Collectively, this team brings deep experience across higher education, retail operations, digital transformation, technology and finance.

More importantly, they're the leaders responsible for executing the strategy and delivering the results you'll hear about today. Let me briefly walk you through today's agenda. We'll start with about BNED, the higher education landscape and the transformation of our business model. We'll then discuss our value proposition, growth opportunities, digital distribution capabilities and AI.

And then finally, we'll cover our financial outlook, capital allocation priorities and long-term approach to shareholder value creation. Our roots go back over 60 years. In 1965, Len Riggio founded the Student Book Exchange in New York City. The original mission was straightforward, help students access the educational materials they need to succeed. While our business has evolved significantly since then, the mission remains at the core of what we do today.

Over the following decades, Barnes & Noble expanded into campus bookstores and developed deep partnerships with colleges and universities across the country. These relationships became much more than retail relationships. We became embedded in the daily operations of institutions and increasingly involved in supporting students throughout their academic journey.

Those relationships remain one of BNED's greatest strategic assets today. In 2015, Barnes & Noble Education became an independent public company. That milestone created the foundation for the next phase of our evolution and allowed us to focus entirely on serving the higher education market. Since that time, the company has continued to evolve well beyond its traditional bookstore routes.

Shifting to today, BNED is much more than a bookstore operator. We serve as a strategic partner to hundreds of institutions and millions of students nationwide. Our focus is on helping institutions improve affordability, expand access and support student success. Those priorities increasingly align with the most important challenges facing higher education today.

The scale of our platform is significant. Today, we operate hundreds of physical and hundreds of virtual stores, serve nearly 6 million enrolled students and maintain a presence in all 50 states. That scale provides operational advantages, but more importantly, it creates deep connectivity across the higher education ecosystem. It gives us reach that few competitors can match.

Our customer base is equally diverse. We serve public and private institutions, 4-year colleges and universities, community colleges and within that, students, faculty, staff, families and local communities. Because of that breadth, we gain valuable insight into the needs of institutions and stakeholders across the country. Those insights often help shape solutions we bring to market.

So what do we do? When many people hear Barnes & Noble Education, they think bookstores. But we've -- but what we've become is much broader. BNED combines institutional relationships, digital infrastructure, financial integrations and campus operations into a single platform serving higher education. We're deeply integrated within the academic ecosystem and support institutions, faculty and students through the entire academic journey.

That positioning gives us a unique role inside higher ed and one that extends well beyond traditional retail. Our model is best described as a scaled B2B2C platform. We partner directly with institutions while simultaneously serving millions of students and other members of the campus community. The foundation of that model is our institutional platform. Through long-term campus partnerships, integrated retail and e-commerce operations, fulfillment capabilities and connections into financial aid and institutional billing systems, we become deeply embedded in colleges and universities and how they serve their students.

These capabilities create trusted and difficult to replicate position within higher education. Built on top of that foundation is a broad product and service ecosystem. On the academic side, we provide physical and digital course materials, learning tools and affordable access programs such as First Day Complete. On the retail side, we provide campus apparel, technology products, graduation products, convenience items and other student essentials.

Together, the combination of institutional integration and diversified products and services allow us to support customers throughout their campus journey while creating multiple avenues for growth. One of the best ways to understand the impact that BNED makes is to hear directly from our partners. While our business is often measured through financial metrics, our ultimate mission is helping institutions deliver better outcomes for students.

Whether it's supporting affordability, creating stronger campus engagement or helping students access the resources they need to succeed, our work touches nearly every aspect of campus life. This short video highlights the impact through the voice of one of our institutional partners. Let's take a look.

[Presentation]

What you just heard reflects a common theme across many of our partnerships. Institutions increasingly want partners that can help them improve outcomes while reducing operational complexity. That trend is becoming more important as higher education continues to evolve, which brings us to the broader landscape shaping our industry.

To understand the opportunity ahead for BNED, it's important to understand the forces reshaping higher education today. Despite periodic headlines suggesting otherwise, higher education remains a large, essential and resilient market. And many of the pressures institutions face are creating opportunities for BNED. The U.S. higher education market serves approximately 19 million students across roughly 3,600 institutions.

Enrollment has remained relatively stable over time despite demographic shifts and broader economic cycles. This is a large and highly durable market. Importantly, institutions continue searching for ways to improve affordability, efficiency and student outcomes. Those priorities align directly with the solutions BNED provides. As a result, we believe our addressable opportunity remains significant.

Several powerful trends are reshaping higher education today. First, students and families are placing greater scrutiny on affordability and return on investment, increasing pressure on institutions to deliver value. Second, there is a growing emphasis on improving student access, retention, persistence and completion rates with students increasingly focused on measurable student outcomes.

Third, shifting demographics and changing enrollment patterns are creating both challenges and opportunities across higher ed. At the same time, many institutions continue to face budget pressures and are looking for ways to operate more efficiently while maintaining service levels and student support.

And finally, digital transformation and artificial intelligence are changing how learning is delivered, how content is consumed and how institutions engage with students. Taken together, these trends are increasing the pressure on institutions to deliver better outcomes at a lower cost. That is driving demand for scaled, trusted partners that can help institutions navigate change, improve affordability, enhance student success and operate more efficiently.

We believe BNED is uniquely positioned to play that role. BNED operates in a large and competitive market. While BNED and Follett are the 2 largest operators, a meaningful portion of campuses remain self-operated and several other providers compete across the industry. Based on our estimates, BNED represents approximately 30% of the market, making us one of the industry's largest operators.

Roughly 1/4 of the market remains self-operated. And beyond BNED and Follett, the remaining market is distributed across several smaller providers. As institutions continue evaluating whether to operate stores internally or partner with third-party providers, we believe increasing complexity around affordability initiatives, digital course materials, technology integrations and student support services favors scaled operators with broad capabilities and deep institutional relationships.

Over time, we believe those market dynamics will continue to support outsourcing trends across higher education and create opportunities for selective share gains. When we step back, our competitive advantages become clear. We have scale. We have deep institutional relationships. We have integrated digital and financial infrastructure, and we have decades of operational expertise embedded across campuses nationwide.

These advantages are difficult to replicate and have been built through decades of trusted partnerships with colleges and universities. They position us well as institutions seek partners capable of supporting affordability, access and student success. Ultimately, we believe the industry trends that we've discussed are working in our favor.

Again, one of the best ways to understand BNED's impact is through the voices of the institutions and communities we serve. Across our network of campus partners, we help support affordability, student engagement, operational excellence and overall student success. While every institution is unique, many of the themes you'll hear today are consistent across our portfolio.

Schools are looking for trusted partners that can help them better serve students while navigating a rapidly evolving higher education landscape. This short video provides another glimpse into the role BNED plays on campuses across the country and the value we help create for our partners and their students. Let's take a look.

[Presentation]

The experiences you just saw reflect something we hear consistently from our partners. BNED's role expands far beyond operating a book store. We've become deeply integrated into the campus ecosystem, helping institutions address affordability, improve the student experience and achieve their broader strategic objectives. Those partnerships are a critical competitive advantage for BNED and an important driver of our long-term growth opportunity.

To discuss that in more detail, I'd like to turn it over to Brian, who will walk through our institutional value proposition, the outcomes we're delivering for our partners and why more schools continue to choose BNED. Brian, over to you.

Thank you, Jonathan. I'm excited to talk about BNED and why we believe we're uniquely positioned [Audio Gap] navigate the evolving higher education landscape. Today, college and universities are being asked to do more than ever, reduce costs, improve student outcomes, deliver better student experiences, all while managing less resources. Those challenges create opportunity, and that's where BNED fits.

We help lower the cost of course material, one of the main points of friction for students, parents and institution. Programs like First Day Complete improve affordability and access to all. We expand access: physical and digital delivery. Students get material when and how they need them. We enhance the campus experience. Stores and digital platforms are important engagement points where we offer best-in-class solutions and ease of use.

Support school pride, campus connection and student engagement with our excellent customer service driven by dedicated store managers in each store and a best-in-class website for 24/7 shopping experience. We reduce the complexities for institution. Integrated billing, financial aid solutions, we simplified the billing process for the campus administration. And we increasingly support student success, tools and services that extend beyond traditional retail.

The important takeaway, we're no longer operating just bookstores. We're helping institutions solve strategic challenges while creating better experience for students. One way we measure the impact of that strategy is through our student satisfaction. Today, 92% of BNED students rated the bookstore good, very good or excellent. We think that's an important metric.

It reflects more than a retail transaction. It demonstrates affordability, convenience, access and service. While the institutions are increasingly focused on retention, engagement and student outcomes, the student experience matters more now than ever. The results -- these results give us the confidence that our solutions are resonating with the people who matter the most, the students.

And they reinforce that everything we're building ultimately is designed to improve student experiences. So if that's the value we're delivering, the next question is, why is BNED uniquely positioned to deliver it? We believe BNED has several advantages that are [Audio Gap]. We serve more than 1,000 campuses nationwide that gives us significant reach and operating leverage.

Another advantage is our relationships. Many of these partnerships have been built over years, and we're deeply integrated into the campuses that we serve. We've built an infrastructure that combines retail, digital and supply chain capabilities that allows us to deliver more of a comprehensive solution than many stand-alone providers.

The market is moving our way. We have tailwinds. Institutions continue to focus on affordability. Course material continues to become more digital and schools increasingly want integrated partners, not point solutions. When you put all this together, the market trends, our scale, our campus relationships and the platforms that we've built, we like where we're positioned. We believe those factors create a strong foundation for long-term growth. We've talked about strategy and the platform. The next video shows what it looks like on a college campus.

[Presentation]

This video does a great job bringing our partnership approach to life. At BNED, we are leveraging our scale, campus relationships, integrated platforms to help institutions solve some of their biggest challenges, improving affordability, expanding access and supporting student success. And nowhere is that more evident than in programs like First Day and First Day Complete, which are transforming how students access course material while delivering meaningful value for both students and institutions.

Those programs are great examples of how we're evolving beyond our traditional bookstore, and we're creating new opportunities for growth. With that, let me turn it over to Chris, who will take a closer look at our affordability Courseware solutions. Chris?

Thank you, Brian. One of the strongest ways BNED creates value for institutions, students and faculty is through our First Day programs. What started as a campus President's request to improve the convenience around course materials has evolved into something much more meaningful. First Day is changing how course materials are delivered, how student success can be supported and ultimately, how BNED has transformed the business model.

For decades, the course material market operated as a retail transaction. Students were responsible for finding, purchasing and accessing their materials all on their own. With this model, students often began their semester without the resources they need to succeed. Research tells us that at least 1 in 4 students elect to not acquire at least one of their required course material items.

This not only creates friction for the student, but for the faculty, institutions and publishers. First Day changes that dynamic. Instead of relying on individual purchase decisions where cost becomes a barrier, course materials become an integrated academic model. Students receive all faculty required course materials. Institutions are able to advance their affordability goals. Faculty maintain complete academic freedom over content selections and instructional decisions.

For BNED, this is where the story becomes especially compelling. As expansion grows, we are moving from a highly transactional course material business toward a recurring subscription-like distribution model. Participation increases, revenue becomes more visible and the economics become significantly more attractive. We move from waiting for millions of individual purchase decisions each term to becoming the institutional distribution layer for course content, all while improving the customer experience.

We offer 2 pathways into affordable access, allowing an institution to adopt the model at the pace that fits their needs. First Day By Course operates at the individual course level and often serves as the entry point for institutions beginning their affordable access journey. What we've seen is that once an institution experiences the improved affordability, stronger student readiness and positive feedback, many begin evaluating for a First Day Complete expansion.

First Day Complete takes that expansion to all courses, all format types for all students. While both programs create value, First Day Complete delivers the greatest strategic impact. This is important because it has brought true structural transformation. We've seen not only strong growth but accelerating expansion of participating institutions and enrollment participating in First Day Complete.

Schools are seeing the results firsthand, improved affordability, strong student preparedness and a simpler experience for students and faculty alike. As our campus partner just shared, the campus store has evolved into an extension of the classroom. This confidence continues to drive adoption while creating improved revenue visibility for BNED. But don't just take it from me. Here are our stakeholders talking about the impact their Campus First Day Complete program has had on them.

[Presentation]

Incredible testimony. What you've just heard captures why growth continues to accelerate and actually grounds everything we do each day, knowing the positive impact we are having on a students academic journey. You may be asking, why are affordable access models so successful? It really comes down to the enhanced experience for all the different stakeholders involved.

Affordability is also not just in the name of these programs. We know affordability remains one of the most important issues facing higher education today. Students and family continue to face financial pressure. Institutions are under increasing pressure to improve retention and demonstrate their value each day. Delivering affordability has moved beyond being a financial aid conversation.

It is increasingly becoming an enrollment, student success and retention conversation. First Day addresses this challenge directly. Students typically save between 30% to 50% compared to the traditional retail model I discussed a little earlier. This predictable pricing is integrated into a campus' existing billing process, which provides a simpler and more transparent experience for families and students.

This alignment is one of the key reasons adoption continues to accelerate across our network. While affordability often starts the conversation, student success is what ultimately drives long-term retention. Through historical models, students delay purchasing materials or they may never even purchase them at all. When students don't have the materials they need, learning begins at a disadvantage.

First Day removes that barrier. Students start the semester prepared with immediate access to required content on or even before the first day of class. Our spring 2026 survey that just completed in April tells us just that. 86% of students reported being better prepared for class and 82% said participating had a positive impact on their success. For those institutions focused on retention, persistence and graduation outcomes, that feedback matters and reinforces the value of these programs.

Another way affordable access models are winning is by the convenience they offer. Students expect immediate access to academic resources in the same way they expect seamless access to all digital experiences like Spotify or Netflix. First Day and First Day Complete ensure required materials are available before classes begin, whether delivered digitally, physically or a combination of both.

91% of students in our most recent survey said these programs save them time, but it was also more convenient. This reflects the strength of our platform and our capabilities. We have been able to remove true friction from the acquisition process so students can focus on learning first and foremost.

First Day is particularly powerful due to the fact that it aligns the interest of every stakeholder in the higher education system. Students gain immediate access at significant savings. Faculty maintain complete academic freedom and control over their content selection. Institutions advance their affordability initiatives while simplifying the administration of their program.

Publishers benefit from greater participation and improved content utilization. And at BNED, we serve as the infrastructure layer connecting all those stakeholders together. These programs become deeply integrated into how institutions operate. These are not just simple vendor relationships. We are integrated into mission-critical systems that institutions rely on every day.

For example, we're connected to billing systems, financial aid platforms, learning management systems and other key campus workflows. This level of integration creates significant switching costs, strengthens long-term institutional relations, reinforces BNED's unique position within higher ed, our platform and service level is difficult to replicate and why our institutional relationships are such a strategic asset.

And while expansion has increased significantly, a key takeaway is that we're actually still early on in this transformation. Substantial runway remains. Before transitioning back to Jonathan to walk through why we believe First Day represents one of BNED's most compelling long-term drivers of growth, I thought hearing directly from students about the impact of these programs shows why this strategic focus is the right one. Let's take a listen.

[Presentation]

Wow, that was awesome. Thank you, Chris. And before that, thank you, Brian. I think those were incredible insights and hearing directly from students and the impact First Day Complete is having is an incredible testimony. And what you just saw is representative of a broad trend occurring across our portfolio. What began with roughly 14,000 students across 4 pilot campuses in the fall of 2019 is projected to reach nearly 1.4 million students across 259 locations by the fall of 2026.

The important takeaway here isn't simply growth in store count, it's the acceleration in student participation and the increasing contribution of recurring digital course material revenue to our overall business mix. As adoption expands, we gain greater revenue visibility, stronger participation consistency and more predictable and a more predictable operating model than the traditional transaction-based course material business.

The trajectory shown here shows -- demonstrates that First Day Complete is no longer an emerging initiative. It's becoming a foundational growth engine for BNED. Despite this progress, we're still relatively early in the adoption cycle. Today, First Day Complete is active in 232 locations across our network. Against our total BNED footprint of 647 physical stores, that represents approximately 36% adoption.

Put another way, nearly 2/3 of our current opportunity remains ahead of us. That means we have approximately 415 physical locations that have yet to convert to First Day Complete. For investors, this is important because we're not discussing a mature program that has already reached saturation. We're discussing a proven model with substantial remaining white space inside our existing customer base.

Importantly, expanding adoption doesn't require entering new markets or creating a new category. The opportunity exists within relationships we manage today. Why does that matter? When a campus converts to First Day Complete, we typically see course material sales double versus the prior year. In addition, once implemented, participation on average typically continues growing in the 5% to 10% range.

As a result, each conversion creates both an immediate step-up in volume and an ongoing growth profile over time. It's also important to recognize that our growth opportunity extends beyond converting existing locations. Many of our new campus partnerships are now launching directly into First Day Complete, creating an additional avenue for growth. Together with future conversions and participation growth, these new account wins provide multiple drivers of continued First Day Complete revenue growth.

As adoption increases, we're seeing several structural benefits emerge. First, a greater portion of our revenue becomes reoccurring and digital in nature. Second, demand becomes significantly more predictable because participation is tied to student enrollment, which tends to be relatively stable and predictable over time.

Third, the model becomes increasingly capital efficient as digital course materials represent a larger share of the mix. Taken together, these factors improve revenue visibility, strengthen earnings quality and contribute to long-term gross profit dollar growth. That's why we view First Day Complete, not simply as a course material program, but as a primary driver of BNED's growth, revenue transformation and long-term value creation.

So when we step back, the picture is clear. First Day Complete has become a powerful growth engine for BNED. It is driving revenue transformation, increasing visibility, expanding recurring revenue streams and strengthening the underlying economics of our business. But perhaps the most important takeaway is what First Day demonstrates about the strength of the BNED platform.

We operate at the center of hundreds of higher education institutions. We are deeply integrated into campus operations, institutional workflows and connected to millions of consumers who engage with those institutions every year. And that audience extends far beyond currently enrolled students. It includes prospective students and their families, faculty and staff, alumni, fans, supporters and broader communities connected to the institutions we serve.

As colleges and universities increasingly look to strengthen their brands, engage their communities and create new revenue opportunities, we believe BNED is uniquely positioned to help them do that. The same relationships, infrastructure and capabilities that have driven the success of First Day create opportunities across general merchandise, retail innovation, campus commerce and broader engagement initiatives.

Celeste will now discuss how we're leveraging those advantages to help institutions extend their reach, strengthen their brands and unlock additional growth opportunities across the BNED platform. Celeste?

Thank you, Jonathan, and good morning, everyone. While course materials remain a critical part of our business, one of the things we're most excited about is the must-have physical location and/or website that creates pride and excitement on campuses we serve. The importance of that experience and the emotion it drives cannot be understated.

We have a unique advantage. Every day, millions of students engage with our stores, our digital platforms and our campus partners. That gives us valuable insight into how student needs and purchasing behaviors are evolving. We're using those insights to expand our assortment, improve the shopping experience, modernize our stores and introduce new products and services that are relevant to today's students.

At the same time, we're helping institutions maximize the value of their campus retail operations through store renovations, enhanced merchandising strategies and new revenue-generating opportunities. The result is a business that is becoming more diversified, more resilient and better positioned to capture a greater share of student and consumer spending throughout the academic year.

I'd like to spend a few minutes highlighting some of those opportunities and how we see them contributing to BNED's long-term growth. We engage with students throughout the entire campus journey from orientation and move-in to athletics, campus life, graduation and alumni engagement. That creates a significant opportunity to expand wallet share across the campus ecosystem.

A key focus area is merchandising and retail growth. We're improving performance in both general merchandise and logo apparel through a combination of enhanced assortments, more disciplined pricing strategies, stronger merchandising execution and event activations. Just as importantly, we're leveraging data and customer insights from across our network to better align product offerings with the preferences of today's students and campus communities.

We're also benefiting from strategic partnerships, including Fanatics and Lids, which allows us to broaden product selection, speed to market and enhance the customer experience. The opportunity here is significant. We already have trusted campus relationships, established traffic and strong brand affinity. By continuing to improve the assortment and experience, we believe we can capture a larger share of student spending while creating incremental revenue opportunities for both BNED and our institutional partners.

Ultimately, this is about leveraging the assets we already have, our campuses, our customer relationships and our scale to drive sustainable growth beyond courseware. Another exciting opportunity I'd highlight is expanding engagement across the full student life cycle. One of BNED's unique advantages is that we interact with students at multiple points throughout their college experience from orientation and move-in to course materials, technology needs, campus life and ultimately graduation.

Each of those moments creates an opportunity to deepen our relationship with the customer and provide additional products and services that enhance the student experience. As a result, we're expanding into categories as well as services that are highly relevant to students, including school supplies, technology, convenience offerings, dorm-related products and graduation merchandise.

Importantly, these are categories where we already have credibility, established customer relationships and existing distribution channels. This isn't about entering entirely new markets. It's about leveraging the engagement we already have to serve more of the customer needs throughout their academic journey. Beyond academics, we believe the social journey and its success are just as important.

This is reflected in our entry into categories such as health and wellness as well as career preparation services. By broadening our assortment and increasing engagement across the customer life cycle, we believe we can drive higher spend per student, strengthen customer loyalty and create additional growth opportunities for both BNED and our campus partners.

Taken together, these initiatives reflect a common theme. We're leveraging our scale, campus relationships and customer insights to expand wallet share across the campus ecosystem and unlock new avenues for long-term growth. The next opportunity I will highlight comes from the scale of engagement we already have across our campus network. BNED is uniquely positioned as a single-source partner to reach Gen Z students across every stage of their journey, where they learn, shop and connect.

Every year, millions of students, parents, alumni, faculty and campus visitors interact with our stores and digital platforms. Those interactions create value that extends well beyond traditional retail sales. Because we sit at the center of the campus ecosystem, engaging more than 6 million students, parents, alumni and fans, we're uniquely positioned to connect brands, service providers and institutions with highly engaged campus communities.

This creates opportunities to expand high-margin partnership and marketing revenue streams that leverage our existing traffic, relationships and infrastructure. Through our Z360 media platform, our brand partnership marketing team delivers a fully integrated approach that connects brands to students across campuses nationwide, delivering on our mission of supporting student academic and social success.

This includes high-impact in-store experiences as well as targeted digital channels, creating consistent touch points that drive awareness, product trials and sales. Our campus bookstores serve as social hubs, especially during key moments like welcome events, game days and grad fairs. These tentpole experiences give brands the opportunity to show up authentically through turnkey sponsorships or custom activations, fueling both engagement and incremental high-margin revenue.

Ultimately, this is another example of how we're leveraging our platform to capture a greater share of the value we help create across the campus experience. As we think about all of the growth opportunities we've discussed, one thing remains constant. Our ability to grow is rooted in strong institutional partnerships and our commitment to student success.

The needs of colleges and universities continue to evolve. They're looking for partners that can help them adapt to changing student expectations, improve consumer experience, drive engagement and create new sources of value for their campus communities. What makes BNED unique is our collaborative approach. We don't bring a one-size-fits-all solution. We work alongside our campus partners to understand their priorities and develop solutions that fit their specific needs.

Whether it's improving the retail experience, introducing new products and services, modernizing stores or creating innovative ways to engage students, our goal is to continuously evolve with the institution. The feedback you'll hear in this next video reflects that partnership mindset. It highlights how we work together to solve challenges, enhance the student experience and create opportunities for ongoing growth. Now let's hear from another one of our campus partners.

[Presentation]

Whether its merchandising partnerships marketing opportunities or expanding product categories, the common thread is simple. We see significant opportunity to deepen engagement, increase wallet share and drive growth by serving more of our customers' needs throughout their campus journey. The launch of room service is a great example of how we are focused on reimagining collegiate retail, ensuring that we are not only the must-have visit on campus, but also the provider of services supporting students and removing friction for students and families.

Room service is a guided shopping experience for dorm products that are conveniently delivered to a student's dorm room prior to move-in. Creating solutions that remove friction and allow students and families to enjoy their experiences on campus is a critical focus for BNED.

We see room service and other solutions as just the beginning as we continue to explore and execute on our expansion to include services within our business model. Beyond physical and campus-based services, BNED is also positioned to benefit from the ongoing digital transformation of higher education. Back to Jonathan, who will expand on this topic.

Thank you, Celeste. What you've just seen are examples of how we're expanding beyond our traditional offerings and leveraging our position on campus to serve a broader set of customers and needs. What's important to understand is that these opportunities are not stand-alone initiatives. They're embedded and enabled by an infrastructure and platform that BNED has spent years building across higher education.

One of BNED's greatest strengths is the combination of our institutional relationships, technology infrastructure, commerce capabilities and distribution network. Across more than 645 campus -- physical campus locations, we've built deep integrations into university systems and workflows that connect us directly with the institutions and communities we serve.

Those integrations extend across publisher platforms, learning management systems, student information systems and a broader network of technology and service partners. As a result, we're able to reach millions of students, faculty, staff, alumni, families and other campus constituents through trusted institutional relationships. This foundation creates significant strategic advantages.

It allows us to deliver personalized experiences, operate compelling campus retail and e-commerce destinations, distribute a wide range of products and services and leverage existing infrastructure to expand into adjacent categories with relatively limited incremental investment. Room service is one example. Logo merchandise, graduation products, technology offerings and campus retail services are additional examples.

And we believe there will be additional opportunities over time as institutions continue looking for trusted partners that can help them better serve their campus communities. The key takeaway is that we're not simply operating book stores. We've built a deeply embedded platform within higher education, and that platform creates multiple pathways for long-term growth.

Before turning things over to Jason, I'd like to spend a few minutes on a topic that is rapidly reshaping higher education, artificial intelligence. AI represents both tremendous opportunity and significant disruption across the entire ecosystem. The reality is that much of this is unfolding in real time. Institutions, publishers, technology providers, content creators and distributors are all trying to determine what the future state of teaching, learning and course materials will ultimately look like.

We're already seeing a rapid shift towards more digital, AI-enabled and increasingly personalized learning experiences. At the same time, AI has the potential to challenge traditional course material models, reshape publisher economics and alter the roles of many participants throughout the ecosystem. The ultimate outcome is still evolving, but one thing is clear, higher education is at the center of this transformation.

We believe BNED is uniquely positioned to help institutions navigate this change. We're deeply integrated into the academic workflow at over 1,000 institutions. We maintain strong relationships across institutions, publishers and digital content providers. And importantly, we're content agnostic. Our role is not to determine which publisher platform or AI-enabled solution wins. Our role is to help institutions deliver seamless, affordable and intuitive experiences to students regardless of the underlying content or technology.

As the ecosystem evolves, we believe trusted partners that can simplify complexity and enable adoption will become increasingly important. AI also creates a meaningful opportunity within our own business. Across the organization, we're actively exploring ways to leverage AI to move faster, make better decisions and improve operating efficiency. From product development and merchandising pricing, customer engagement and internal support functions, we believe AI can help us operate more effectively and efficiently.

We're still in the early stages of that journey, but we are already seeing significant potential for future productivity improvements, cost optimization and innovation. So while AI undoubtedly creates disruption, we believe BNED's position as a trusted, neutral and deeply integrated partner enables us to both help institutions navigate the transition and benefit from the opportunities that emerge.

Throughout today's presentation, you've heard how we're transforming the course materials business, expanding growth opportunities, leveraging our platform capabilities and positioning BNED for the future of higher education. The next question is how those initiatives translate into financial performance and shareholder value creation. To discuss our financial framework, outlook and capital allocation priorities, I'll turn it over to our Chief Financial Officer, Jason Snagusky.

Thank you, Jonathan, and good morning, everyone. I have the privilege to share and discuss BNED's financial transformation, the progress we've made over the last several years and the opportunities that we see ahead. Before I begin, I'd like to thank our leadership team for the insights that they shared with us today. Jonathan provided a great overview of BNED's history as well as the evolving higher education landscape and the strategic positioning that has shaped our company today.

Brian walked us through BNED's value proposition and BNED's transition to our First Day programs. Chris highlighted why affordable access models continue to gain momentum and how BNED has firmly established itself as a leader in the space. And Celeste provided valuable perspective on our general merchandise and student engagement landscapes as well as the growth opportunities that we are focused on.

As I reflect on where BNED was just a few years ago, we were focused primarily on stabilizing our business and positioning ourselves for long-term success. Today, we are operating from a position of significantly greater financial and operational strength. Throughout this transformation, our strategy has been guided by 3 priorities: first, transforming our business model through the rapid expansion of our first Day programs; second, driving sustainable profitability through disciplined operational execution; and third, strengthening our balance sheet and cash generation capabilities to create long-term shareholder value.

The slides I'll walk through today demonstrate the progress that we've made against each of these priorities. Let's start with revenue. Over the last 5 years, BNED has delivered consistent revenue growth despite operating in an always-evolving higher education environment. Revenue has increased from approximately $1.5 billion in FY '22 to approximately $1.71 billion to $1.72 billion in FY '26. This represents a 5-year CAGR of roughly 3.4%.

While we're pleased with the top line growth, what's even more important is the changing composition of that revenue. Increasingly, our revenue is being driven by our First Day programs, which provide greater visibility, stronger customer retention and a more subscription-like recurring revenue profile. As our revenue mix continues to shift toward these programs, we're building a business that is more predictable, more scalable and in better positioned for long-term growth.

The clearest example of that transformation is our First Day programs. Over the last several years, our First Day programs have evolved from an important initiative into the primary growth engine of our company. Program revenue has increased from approximately $474 million in FY '24 to an expected range of $754 million to $760 million in FY '26. That represents approximately 26% annual growth.

By the end of FY '26, we expect First Day programs to represent approximately 44% [Audio Gap] of total company revenue. The significance of this extends well beyond just revenue growth. First Day improves affordability for our students that we serve. It strengthens our relationships with our institutional partners. It increases revenue visibility and it creates operating leverage that supports our profitability expansion.

Most importantly, we continue to see significant runway for the future adoption and participation within our First Day programs. Now let's turn to profitability. This slide illustrates the financial impact of our business transformation. Since FY '22, adjusted EBITDA has improved by approximately $86 million. We moved from negative adjusted EBITDA in FY '22 and FY '23 to positive adjusted EBITDA to be in the range of $75 million to $77 million in FY '26.

This improvement reflects a combination of strong First Day program growth, gross margin expansion, operating leverage and disciplined expense management. What gives us confidence moving forward is that we've demonstrated our ability to convert revenue growth into earnings growth. That remains a core focus of our strategy today.

One very important contributor to our profitability improvement has been our operating discipline. Over the last several years, we've become significantly more of an efficient organization. SG&A as a percent of revenue has declined from approximately 24% in FY '22 to approximately 17% in FY '26. That's approximately 640 basis points of improvement.

We've achieved this through process optimization, organizational discipline, technology investments that we made and leveraging the scale benefits created by our growth initiatives. Importantly, we've accomplished this while continuing to invest in the growth opportunities throughout our business.

Another key component to our financial transformation has been our working capital optimization. As digital course material adoption continues to increase, our inventory requirements have become more efficient. Inventory is expected to be approximately $57 million below FY '24 peak levels. That reduction is meaningful because it allows us to support continued growth while deploying less capital directly into our inventory.

The result is stronger cash generation, improved working capital efficiencies and enhanced free cash flow generation and conversion. Perhaps one of the most tangible indicators of our financial progress is the strength of our balance sheet. Since FY '22, we've reduced total debt by approximately $155 million.

By the end of FY '26, total debt is expected to be approximately $71 million, representing roughly a 70% reduction from FY '22 levels. This deleveraging has created substantial value. It lowers interest expense, it increases financial flexibility, and it provides additional capacity to invest in growth initiatives while returning capital back to shareholders. Simply put, our balance sheet today is substantially stronger than it was just a few years ago.

Now I'd like to spend a few minutes just to discuss our FY '27 financial framework and how we are thinking about growth, profitability, cash generation and capital allocation going forward. As we look ahead to FY '27, we believe BNED is entering the next phase of its transformation. Over the last several years, we've strengthened the foundation of our business through the expansion of our First Day programs, enhanced operational execution and made significant balance sheet improvement.

Our FY '27 framework reflects the benefits of those efforts and outlines how we expect to continue creating value for our shareholders. The first pillar that makes up our FY '27 financial framework is operating leverage. We expect to deliver modest revenue growth, driven primarily by continued First Day program adoption and participation growth across our institutional partner network.

While revenue growth remains important, our focus is increasingly on the quality and profitability of that growth. As our First Day programs continue to become a larger percentage of our overall revenue mix, we benefit from greater scale, improved predictability and a stronger operating leverage. And now at the same time, we expect continued gross margin gross margin dollar growth through participation expansion, merchandising optimization and ongoing operational execution across our platform.

And we'll continue to showcase disciplined management of SG&A expenses, leverage our AI-enabled productivity improvements and utilize zero-based budgeting. The second pillar of our framework is capital efficiency. Over the last several years, we've significantly strengthened our balance sheet, reduced our debt and improved working capital management.

We expect that momentum to continue into FY '27 as we see meaningful opportunities to further improve working capital performance. This includes increasing our inventory turns, implementing centralized book purchasing, exiting lower return businesses and continuing to capture the tailwinds of increased digital adoption of course materials.

These initiatives allow us to support our growth while deploying less capital and generating stronger returns. The third pillar of our framework is strong free cash flow generation and profitability. We are guiding to adjusted EBITDA of $85 million to $92 million in FY '27. This translates into approximately 16% adjusted EBITDA growth at the midpoint as it relates to our FY '26 guidance.

This demonstrates the continued earnings power of our business model in action. Our guidance is supported by our continued First Day program growth, operating leverage, being disciplined with expenses in the management of those expenses and lower interest expense.

Perhaps most importantly, we expect the aforementioned earnings improvements to translate into stronger free cash flow generation. Higher earnings, lower inventory requirements and disciplined working capital management will continue to improve the cash conversion cycles and support additional balance sheet strengthening.

The final topic I'd like to discuss with you today is capital allocation. Our objective is simple: maximize long-term shareholder value through disciplined deployment of our capital. Our first priority is investing in growth opportunities. This includes driving continued penetration of First Day Complete, launching new initiatives such as room service and other bundled offerings and strengthening our partner and campus support capabilities.

Our second priority is enhancing core operations. We're investing in AI-first capabilities while also centralizing purchasing activities and modernizing our core technology platforms to improve productivity and scalability. Third, we remain focused on strengthening our balance sheet as well as our liquidity position, which will enable us to lower our financing costs while expanding our balance sheet capacity to support future growth of the business.

And finally, we remain committed to returning capital to shareholders. Recently, our Board of Directors declared an initial quarterly dividend of $0.08 per common share with a record date of July 16, 2026, and a pay date of July 30, 2026. This milestone reflects the confidence we have in the strength of our business model, our cash generation capabilities and ultimately, our long-term outlook.

As we perform -- as our performance continues to improve, we will evaluate and consider additional opportunities to further enhance shareholder returns. In closing, BNED today is a fundamentally stronger company than it was just a few years ago. We have transformed our business model. We have significantly improved profitability. We have strengthened our balance sheet. We've enhanced cash flow -- cash generation, and we have established a disciplined framework for capital allocation.

While we're proud of what we've accomplished, we believe the opportunity ahead remains significant, and we are confident in our strategy. We're encouraged by our momentum and excited about the value that we can bring to our students, our partners, our employees and our shareholders.

I will now turn it back to Jonathan to conclude our presentation and transition us into Q&A. Jonathan?

Thank you, Jason. Well, we've certainly covered a lot of ground today. You've heard how BNED has transformed its business model, strengthened its market position, expanded First Day Complete, built a differentiated digital distribution platform and significantly improved its financial performance.

Before we open the floor to questions, I'd like to leave you with a few final thoughts. At a high level, BNED combines several characteristics that we believe position the company for long-term value creation. We operate a scaled and deeply embedded higher education platform with long-standing institutional relationships and significant operational and financial integration across our campus partners.

We continue to benefit from the growth of First Day Complete and digital distribution, which are increasing the recurring and capital-efficient nature of our revenue mix. Our platform also creates multiple avenues for growth, allowing us to leverage the same institutional footprint across course materials, digital content, retail, general merchandise, student services and emerging opportunities.

And importantly, that growth is being accomplished by improving profitability, stronger free cash flow generation and a significantly strengthened balance sheet. Taken together, we believe these attributes create a compelling foundation for long-term shareholder value creation. Another way to think about BNED is through the unique position we occupy within higher education.

We sit at the intersection of education, student services and digital distribution. Few organizations have meaningful capabilities across all 3. That positions us to have visibility into how institutions, publishers, technology providers and students interact throughout their academic journey. It also allows us to serve as a trusted partner regardless of how learning materials, models, technology or student expectations continue to evolve.

We believe that unique position is a significant competitive advantage and an important driver of our long-term opportunity. If you remember nothing else from today's presentation, these are the 5 points I'd encourage you to take away. First, BNED operates in a large, resilient, and mission-critical market with deep institutional relationships across higher education.

Second, we have a substantial runway for continued First Day Complete growth through future conversions, participation growth and new account wins. Third, our business continues to benefit from an expanding mix of digital and recurring subscription-like revenue. Fourth, -- we are generating strong financial momentum through disciplined execution, operating leverage, improving cash flow generation and a strengthening balance sheet.

And finally, we remain committed to disciplined capital allocation, investing in high-return growth opportunities while continuing to improve capital efficiency and support shareholder returns. Taken together, we believe these factors position BNED to deliver sustainable growth, expanding profitability, increasing shareholder value over the long term.

Thank you for spending time with us today and for your interest in Barnes & Noble Education. I'd like to thank our entire leadership team, our campus partners and our employees across the country whose work has made this transformation possible. And with that, we'd be happy to take your questions.

Thank you, Jonathan. We'll now begin the Q&A portion of today's program. [Operator Instructions] Jonathan, our first question comes from Owen Rickert of Northland Securities. And he'd like to ask that most of the FTC story centers on converting your own physical stores. But roughly 1/4 of the market is still self-operated by campuses. How should investors think about that opportunity? Is winning a self-operated school a different sales motion and time line than converting an existing BNED store? And are those campuses getting more willing to outsource under budget and affordability pressures?

Thanks, Owen, for the question. I would say that when we look at our First Day Complete opportunity, as we highlighted in our presentation, there are 3 areas for growth. One, as you pointed out, and has been a focus of ours is the conversion of our existing footprint, where we have about 2/3 of the remaining footprint still available to convert. We think that's a significant runway even though it's already making a very significant impact in our business.

Two, through participation gains once this campus is converted, to that, as we noted, we see about 5% to 10% increase in revenue as -- once the campus is converted on an ongoing basis. And third, as we noted, we have many schools that are new business wins when we open the store, either immediately move into First Day Complete or within in the first academic year move into First Day Complete.

So we think all 3 of those are great opportunities there. In terms of new business opportunities and expanding the market, the value proposition that our affordable access program, First Day Complete delivers is something that is important, is meeting one of the highest priority needs of those campuses from what we hear -- and we're very active in working with potential and prospective campus partners to try to see if what we offer really meets their needs.

And we've seen a really great success rate as affordability, access and convenience and better student experience and ultimately leading student outcomes is becoming more important. So we think it's a very significant opportunity across all 3 of those pillars.

All right. Thank you. Now shifting to your outlook. The $85 million to $92 million fiscal year 2027 guide is about 16% growth midpoint to midpoint against the $75 million to $77 million you expect in fiscal year 2026. 16% is closer to the lower end of BNED's 15% to 20% range it provided for the year in the prior quarter. How much of the strength in full year fiscal year '26 versus maybe some further investments in fiscal year '27?

Yes. And thank you for the question. And Jason, you can keep me honest on my numbers and here. But to clarify, with this presentation and our release yesterday after market close, we're increasing our guidance. At the end of third quarter, for FY '26, we provided a range of between $65 million and $75 million in EBITDA and then said between 15% and 20% growth as guidance for FY '27.

So between that, the -- and again, rounding, the average at the low end or the low end is about $75 million, give or take, and the high end was $90 million. Today, we are announcing the highest end of the previous range for FY '26 between $75 million and $77 million. And for FY '27 with our guidance of between $85 million and $92 million have increased the low end by $10 million and then exceeded the high end.

So we see that as -- and we're signaling an increase in our guidance. And we're using the 16% as the midpoint between $85 million and $92 million and the midpoint of the FY '26 base, which is between $75 million and $77 million. Jason, how did I do on that?

Well, said.

Great. You've put your share of the campus bookstore market at around 30% with a meaningful slice still self-operated. How fast are schools outsourcing self-operated stores? And how does your win rate against Follett and other players trend in the competitive RFPs?

Yes. I mean our new business and new business opportunities is a focus of ours. We have a disciplined approach to the opportunity, and we see an opportunity across various segments of the market. Self-operated stores, as we said, as the need for addressing affordability, having a digital infrastructure, the investment you need in design and construction capabilities to create a must-visit destination on campus and all the general merchandise offering that you need to have is becoming increasingly complex.

And we're seeing more and more stores that -- and more and more campuses that are looking for help with their stores. And we've got a great value proposition and solution for that. We also see opportunities in the marketplace for campuses that have stores run by competitive vendors. And again, our value proposition is what we think is a competitive advantage for us, whether that's -- and sort of we look at it as 4 pillars, 4 core pillars.

One is product assortment, an enhanced and deeper product assortment, improved and enhanced student experiences relative to the competition, a service model that is second to none and the investment that we've had in innovation and bringing innovative services to campuses like our First Day Complete program, like our room service program, like our new enhanced -- our enhanced gift card program that we announced a couple of months ago, those are things that campuses are looking for as the need to engage with the entire campus community becomes more significant. So we think that we're really well positioned. We've got great results and have a robust pipeline to continue that growth.

Great. And one last one from Owen. On the operational side, where do you see AI driving real efficiencies for BNED? Is this something that could help with textbook inventory management across MBS Wholesale and campus store networks? Or is there an opportunity to build something like a chatbot or AI layer on top of your virtual course materials? Where is the credible lever? And over what time frame do you see that happening?

Yes to all of that. I mean, essentially, what we're seeing and see sort of success with today and have a real focus internally is how we leverage AI to make better decisions, improve the speed of the way we operate to be more efficient. So those are examples of ideas that are impactful and that we think we could, through the combination of our expertise, the people that we have plus AI can do things in an impactful way.

We've already had breakthroughs in that and -- but I think we're just barely scratching the surface. So I think that will make an impact both in terms of our -- how we operate from back office to decision-making to what's visible to the customer, and we'll only be able to take up our business, improve it and make it more efficient. But again, we're just scratching the surface, very early, but we're making an impact every day.

Great. Our next question comes from Ryan MacDonald of Needham & Company. Jonathan, can you talk about the gross margin trajectory of the business in fiscal year '27 and how growing FDC adoption impacts this?

Yes. I mean we're focused on gross margin dollars, total gross margin dollars and -- because that's sort of the ultimate measure, which -- and the metric that drives profitability with the growth of First Day Complete, with our ability to optimize our merchandise mix and other items, the gross margin dollar business has been a very significant contributor to FY '26. And we're focused on that, as Jason highlighted in his financial outlook for '27, an important driver and operating pillar for us going forward there.

First Day Complete, as we've highlighted in the year when we transition a store from the prior model to First Day Complete, we see basically a doubling of our revenue, which sort of is highly correlated to what we see from a gross margin dollar standpoint. And so that is driving our business and such. So it is definitely a definite focus of ours and it was in '26 and will continue to be in FY '27 and beyond.

Great. Looking beyond the great opportunity ahead for First Day Complete, which of the additional growth opportunities are you most enthusiastic about? Could the new room service offering ramp at a similar pace as FDC over, say, the next 5 years? How do the unit economics of room service compare to FDC?

Yes, very different sort of businesses and opportunities. But we think that -- and we're really excited about room service. I mean, Celes, you could provide a little bit more color in terms of this year for move-in for this coming fall semester and our academic year '26, '27. While it's much more than a pilot, this is a full service offering. We have a limited number of stores that are participating in this model really to pressure test this to really understand the impact of the model the dorm and sort of dorm essential business is a fairly nascent business for us.

So we think that there is a massive opportunity there in that business. But the economics are -- have a lot of potential. It's a potential for a high-margin business, and we think that there's a great service behind it and have a lot of other opportunities that we're looking at to expand categories as well. Celes, anything else on room service?

No. The only thing I would add is that, to your point, we are using this first season as a learning experience. And so really understand -- we purposely kept the assortment very tight to really understand what people gravitate towards year 1, we can expand. We did not want to go in with a large assortment and sort of not know for -- as we continue to grow the business and grow the store count, we really wanted to make sure that we knew exactly what the consumer was looking for.

We're already seeing great response to larger items such as refrigerators and microwaves, things that make total sense that people would want delivered ahead of time. So I think we're going to learn a lot before we move the store needle quickly.

Yes. And it's really an FY '28 and beyond from a real financial opportunity standpoint, but we're really excited about it and really excited about also what else it can expand to -- because right now, it's a B2C model. That could turn into a model where if an institution wants, we could have that be part of tuition and fees. Like that could expand into that model there.

We can expand the model and deliver not only dorm essentials, but we could have emblematic clothing as part of that, technology offering, supplies. And then we're looking at, and we think there's a massive opportunity around and getting to the question what we're excited about, graduation products, which is a milestone offering. We have a very strong business there, but we think that there's an opportunity to take what we've built and the platform we've built and create new innovation and models around that.

And that's just our DNA. That's what we're focused on. We work with schools, understand what their priorities are, see where opportunities at and introduce innovation to make the customer experience better and create new opportunities and new growth opportunities for ourselves and our partners.

The next question comes from Max Seigerman of Gilder Gagnon. How -- when a campus first adopts First Day Complete, how do the economics evolve over the life of that relationship? Does profitability generally improve as participation, faculty adoption and operational efficiencies increase?

Yes. I think actually, we have one of our slides highlights that and actually spelled that out really nicely, but I can repeat that. In year 1, we see essentially a doubling of the revenue, the course material revenue when a school goes from a prior model to First Day Complete. And then on an ongoing basis, we do see gains in participation, which are related to all those things in the question.

And also as I think the entire campus community understands the value proposition -- and we heard great testimonial videos from students who did a better job explaining that and highlighting the value proposition than any slides could do or I could do, where they're saying the convenience, the predictability, how easy it was, how affordable it was. As students see that, we see the ongoing participation rates grow between 5% and 10% on average.

And it's been pretty consistent. And while First Day Complete, we don't have a tremendous amount of history, we are starting to build a nice database of history that gives us that repeatable confidence. So it's those 2 areas that we see the economic impact year 1 and then an ongoing benefit after that first year step-up.

Okay. Thank you. As more institutions move toward inclusive access models, do you believe the biggest opportunity over the next several years comes from converting existing BNED campuses, winning competitive RFPs or expanding into entirely new institutions?

I think as we said and sort of similar to the -- to a prior question, and we've highlighted in our presentation, a little bit of all of the above. There is significant runway left 64% of our current physical store footprint is still remaining to be converted. We already have commitments from some of those schools for the spring term. We only highlighted through fall term where we have much better visibility, but we already have commitments for spring term '27 and fall term '27 launches.

So that pipeline is robust. We're making an impact across our footprint, and that will continue to grow. Plus, we have lots of new business wins that come in and launch immediately as First Day Complete. Three examples from last year that are all -- it's all public information that they transition and launched the program are Villanova University, Xavier University of Cincinnati and Oral Roberts, all transitioned to Barnes & Noble Education and launched and opened the store in the first semester with us as a First Day Complete store.

And beyond the contract itself, what makes a university reluctant to switch providers once First Day Complete has been implemented successfully?

Yes. I mean the value proposition of First Day Complete is really significant. And once -- and Chris Sackett, you can share some of those statistics again, but the statistics in terms of the student feedback and the campus feedback are incredibly positive. And I think, honestly, it's one of those things where our sales decks and our sales pitches and our pipeline, it's sort of in our pipeline, like it actually is one of those things that delivers better than what you believe when you hear someone talking about it as an opportunity.

And so I think it's the fact that it's delivering on its mission of driving lower prices, creating a far better experience, leading to superior student outcomes that once a school is experiencing that, that creates a very sticky relationship. We've also -- and we talked about this throughout in terms of the platform we built. We've had -- we've invested in technology that sort of makes all these experiences sort of seem incredibly simple and powerful, but there's a lot of technology behind that.

So you can come to your -- to the store and show your phone, we'll scan a QR code and immediately get your materials for you. If you add or drop a class, you come back, you scan a QR code on your phone, we'll take a book back and we'll deliver a new one or it automatically happens if it's a digital material. And so like that embedded technology, the embedded -- the way we're embedded into the billing system and the way we work with schools to ensure the right -- the students are charged the right amount, there is a lot of infrastructure that's built.

And so we're delivering on the customer side. We've integrated a lot of technology. We're unlocking amazing experiences. And I think the combination of those things makes it a value proposition that delivers well beyond what a sales pitch says it does. It actually delivers real value and that creates the stickiest relationships.

Great. Thank you. This question has come in from a number of different participants, but essentially, why a dividend, why now? And sort of walk us through the process that went into behind deciding on a dividend.

Yes. I mean I think Jason hit on that, that it's the confidence that we have in the business, the financial results, and we feel like we can balance the continued investment in the business where we need to invest, continue to drive growth in the business, but also balanced return to shareholders.

And I felt like that was -- and this is the best combination of what we could do right now. And again, it's about the confidence in the business and returning and returning back to shareholders at the same time. I don't know if there's anything else to add to that.

No, no. I mean, again, it is that confidence in the cash generation of the business that got us to the point to decide that, yes, we want to return the capital back to shareholders in the form of dividend. And as the business continues to evolve and improve, we will continue to look at further opportunities.

Yes. I mean, as we laid out in our '27 financial plan, like we're going to continue to invest in growth initiatives. We're going to reduce debt and return capital to shareholders at the same time. And we could -- and we're confident in the business that we can achieve that. The dividend also broadens our potential investor base and demonstrates sort of our confidence in future cash generation.

Great. What do you think the biggest misconceptions are from investors that investors are missing here?

That -- and I think we opened with it, right, like in the presentation that Barnes & Noble Education is just a bookstore -- a retail bookstore. And what we've tried to communicate today and our excitement of having an Investor Day is about showing that we've become much more than that. We're a true B2B2C company that provides essential services to the institutions we support, and those services support the highest priority goals of our campus partners.

And that's what we're focused -- that's what our focus is, and that extends well beyond what we could do as a bookstore provider. It creates amazing opportunities. It's driven significant growth. You see that in the financial results. You see that in our confidence in the future financial results, but it also creates new opportunities that we haven't even potentially contemplated or initiated or launched. And so that's much different than being just a store on campus.

Okay. Jonathan, we have some odds and ends still in the queue. We're going to take those offline and follow up with everyone. But that is going to complete today's programming. Thank you, Jonathan. Thank you, everyone, and thank you, everyone, for logging in today and participating.

Great. Thank you.