June 8, 2023

Cengage Group Announces Strong Fourth Quarter Results and Successful Fiscal Year 2023

Boston, MA – June 8, 2023 – Cengage Group, a leading global education and technology company, reported its financial results for the fourth quarter and full year ended March 31, 2023. Adjusted Cash Revenue for fiscal year 2023 was $1.48 billion, an 8% increase as reported and a 6% increase on a pro forma basis over the prior fiscal year. Adjusted Cash EBITDA less pre-publication costs (Adjusted Cash ELPP) was $351 million, up 8% as reported and 7% on a pro forma basis over fiscal year 2022.

Additionally, on May 22, 2023, the company closed its previously announced  $530 million Series A Convertible Preferred Stock issuance led by an entity managed by affiliates of Apollo Global Management. The transaction raised proceeds of $525 million after 1% OID, used to redeem $500 million of senior unsecured notes on June 7, 2023, replacing debt with equity capital and thereby strengthening the company’s capital structure. As part of the transaction, Itai Wallach, Partner, Private Equity, Apollo Global Management and Vikram Mahidhar, Data and Digital Transformation Operating Partner in the Apollo Portfolio Performance Solutions Group, were appointed to the company’s Board of Directors.  

“We are pleased to finish the fiscal year 2023 ahead of our financial expectations. Our solid financial performance reflects the strength and scale of our portfolio, and resilience of our business in an uncertain macroeconomic environment. In fiscal 23, our digital sales grew 6% and surpassed $1 billion for the first time. The investment from Apollo is testament to our performance and confidence in our strategy.  This significant cash infusion meaningfully reduces our outstanding debt while providing financial flexibility to continue investing in future growth opportunities,” said Michael Hansen, Chief Executive Officer, Cengage Group. “We enter fiscal 2024 excited by the momentum we’ve generated in the business and look forward to pursuing future growth opportunities.”   

Cengage Group Fiscal 2023 Financial Results

$ millions

FY 22

FY 23


Delta Proforma*

Adjusted Cash Revenue





Digital Net Sales





Adjusted Cash ELPP





Unlevered Free Cash Flow





Net Leverage






Cengage Group Fourth Quarter 2023 Financial Results

$ million

Q4 22

Q4 23


Delta Proforma*

Adjusted Cash Revenue





Digital Net Sales





Adjusted Cash ELPP





* Proforma metrics include the financial results of Infosec for FY22 as if Infosec had been owned through that period

Financial & Business Highlights

FY23 Adjusted Cash Revenue $1,476M up +6% on proforma basis

  • Cengage Academic adjusted cash revenue was $911 million, compared with $901 million last year, up 1% driven by strong growth in Secondary and a solid performance in International Higher Education, offsetting moderating declines in US Higher Education:
    • The Secondary business closed an excellent year with adjusted cash revenues up 23% to $184 million.  Core strategic programs, which account for over 90% of net sales, all performed strongly: Advanced Placement/Career & Technical Education was up 14%; Middle & High School over 20%; and Math around 80%, driven by significant success in the Florida state adoption.
    • International Higher Education adjusted cash revenue for the year increased 5% to $130M driven by strong growth in Europe Middle East Africa (“EMEA”) and lower returns associated with increased digital penetration. Digital reached 41% of annual net sales as the business continues to leverage products and capabilities developed in US Higher Education.
    • In U.S. Higher Education where digital net sales represent 88% or $519 million of the total in FY23, a solid digital performance was outweighed by print declines resulting in overall adjusted cash revenues of $597 million, down -5%.  Institutional digital sales, a strategic focus, grew 32% to $182M, with Inclusive Access and Cengage Unlimited Institutional offerings growing at broadly comparable rates.    


  • Cengage Work adjusted cash revenue reached $106 million, with 25% growth in Q4 accelerating full year revenue growth to 13% on a proforma basis:
    • Ed2go, where Q4 represented the highest quarterly revenues achieved in its 25-year history, grew +17% driven by strong demand for advanced career training programs in allied health and technical job verticals and improved lead generation and conversion;
    • At Infosec, a business focused on cybersecurity, growth was +7%, after significant acceleration in Q4. In Q4 revenues were up 19% with both bootcamps and software delivering double digit growth, driven by investments in expansion and upgrade of go to market capabilities.


  • Cengage Select full year revenue increased 13% to $434M, driven by an outstanding year in English Language Teaching (“ELT”) and a second year of steady growth in Research:
    • ELT adjusted cash revenue grew to $141 million, a 45% increase over the prior year, with all regions posting strong double digit growth. Growth was led by the US with large K-12 school district wins and the EMEA region, where strong core market demand was boosted by exceptional ministry of education sales.
    • Research adjusted cash revenue was $214 million, up 4%. Performance was underpinned by sustained high renewal rates of 95%, with growth otherwise driven by strong archive and new database sales in the US, including several large statewide wins and continuing momentum in the K-12 library segment.


FY23 Adjusted Cash ELPP $351M up +7% on proforma basis

  • Proforma ELPP margin improved 22 basis points representing a fourth consecutive year of margin expansion, whilst funding significant incremental investment in Cengage Work and new global business systems.  Cengage Academic grew ELPP by +4%, underpinned by over $20 million of annualized cost savings resulting from the  integration of the US Higher Education, International Higher Education, and Secondary businesses.


Strengthened & deleveraged balance sheet

  • Proceeds of $525 million after 1% OID of the convertible preferred equity issuance which closed on May 22, 2023 used to redeem $500 million of senior unsecured notes on June 7, 2023, capping two years of active capital structure management, which also included the refinancing of term loan in July 2021 and ABL facility in November 2022. 
  • Cengage has significantly deleveraged its balance sheet with proforma net leverage1 of 3.9X at end of FY23, compared to net leverage of 6.0X at the end of FY21.

1. Proforma Net Leverage reflects $532M redemption of senior notes outstanding with net proceeds from issuance of preferred equity ($500M) and cash on balance sheet ($32M) as at March 31 2023


About Cengage Group 

With more than 100 years of serving learners, Cengage Group is a global edtech company that enables student choice. No matter how, where, when or why someone wants to learn, our portfolio of education businesses supports all students, from middle school through graduate school and skills education, with quality content and technology. Collectively, our three business units – Cengage Academic, Cengage Work, and Cengage Select – help millions of students each year in more than 125 countries achieve their education and career goals and lead choice-filled lives. Visit us at www.cengagegroup.com or find us on LinkedIn and Twitter.


Forward-Looking Statements

This press release, the investor presentation and related discussion on the investor call contain “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “assess,” “believe,” “expect,” “may,” “will,” “should,” “could,” “seek,” “intend,” “plan,” “estimate,” “project,” “foresee,” “likely,” “focus,” “grow,” “achieve,” “deliver,” “execute,” “gain,” or “anticipate” or similar expressions that concern our strategies, objectives, plans or goals. All statements that are not strictly historical in nature are forward-looking. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are outside our control. Our actual results and financial condition may differ from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Many factors could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements. You should consider such factors, many of which are outlined in the “Risk Factors” section of our FY22 Annual Report for the fiscal year ended March 31, 2022, and in our quarterly reports for the quarters ended June 30, 2022, September 30, 2022, and December 31, 2022, and the “Special Note Regarding Forward-Looking Statements” section of the same report.  The Company’s Fiscal Year 2023 Annual Report for the fiscal year ended March 31, 2023 will be posted to the Company’s website shortly. Such reports can be accessed at cengagegroup.com/investors. We cannot assure you that forward-looking statements will prove to be accurate, as actual actions, results and future events could differ materially from those anticipated or implied by such statements.  Any forward-looking statement made by us in this press release, the investor presentation and related discussion on the investor call, is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise.

This release contains non-GAAP financial measures. See the appendix in the investor presentation available at cengagegroup.com/investors for a definition of these non-GAAP financial measures and the rationale for their use.