Barnes & Noble Education, Inc.

Consolidated second-quarter revenue from continuing operations was $610.4 million, up $1.7 million or 0.3% year over year. Consolidated adjusted EBITDA increased 28.3% to $50.3 million, and EBITDA margin rose 180 basis points to 8.2%. Retail revenue increased to $599.3 million, First Day and First Day Complete revenue increased 39% to $199.2 million, First Day Complete revenue increased 52% to $136 million, retail gross profit was $125.5 million, and retail gross margin was 20.9% versus 21.6% a year ago. Retail adjusted EBITDA increased to $48.3 million, wholesale sales were essentially flat at $21 million, wholesale gross profit was $6.1 million, and cash at quarter-end was $15 million with borrowings of $234 million. Full-year fiscal 2024 adjusted EBITDA from continuing operations is still expected to be approximately $40 million.

Mike Huseby framed the quarter as evidence that the company’s strategic shift toward First Day Complete and cost reduction is working. He said the business has “crossed that line” where First Day growth is now offsetting traditional courseware declines, and he emphasized that the model is becoming more predictable and more B2B-like. His tone was confident and upbeat, with repeated references to inflection, momentum, and stronger visibility.

Kevin Watson focused on the financial leverage coming from operating efficiency and the mix shift toward First Day models. He cited consolidated adjusted EBITDA of $50.3 million, up $11.1 million, and a 180 basis point improvement in EBITDA margin to 8.2%, while retail gross margin fell 70 basis points to 20.9% because of markdowns, lower-margin digital mix, and lower emblematic commissions. He also highlighted cash of $15 million, borrowings of $234 million, and CapEx of $4 million versus $9.3 million last year, and reiterated full-year adjusted EBITDA guidance of approximately $40 million.

Analysts pressed on whether the company has reached a turning point in courseware revenue, and management said yes: Mike Huseby said the combined First Day and First Day Complete growth has now overtaken traditional à la carte declines on a year-to-date basis. Questions also focused on spring versus fall pipeline timing, opt-out or participation rates, and whether deferred cash collection under the FDC model would require a larger credit facility. Management said spring transitions are in line with past trends, the fall/fiscal 2025 pipeline is robust, participation rates are meeting or exceeding expectations, and the shift is improving receivables predictability rather than implying a need for larger borrowing capacity.