Ryan McDonald

Ryan McDonald inquired about the replicability of ODDITY's data model for targeting international subscribers and identifying local product needs. He also asked if METHODIQ would follow a measured, region-by-region international expansion approach, similar to past brands, or if immediate global expansion is planned.

Answer

Oran Holtzman, Co-founder and CEO of ODDITY, explained their international test market strategy involves localized websites and media spend to evaluate satisfaction, repeat rates, and unit economics before scaling. He confirmed that METHODIQ will initially launch only in the U.S., following a similar, measured approach to SpoiledChild, which took almost three years before international testing.

Ryan McDonald asked about the replicability of Oddity's data model for targeting international users and identifying local product needs, as well as the company's strategy for Methodic's international expansion (immediate vs. measured approach).

Answer

Oran Holtzman, Co-founder and CEO, ODDITY, confirmed that Methodic will initially launch only in the U.S. due to its complexity, mirroring SpoiledChild's initial U.S.-only focus. He detailed their international testing approach, which involves localized websites, media spend, and monitoring satisfaction, repeat rates, and unit economics to determine market suitability.

Ryan McDonald asked about the breakdown of higher education's exceptional performance, specifically the mix of benefit from enrollment growth versus execution and market share gains, and the durability and runway for growth within inclusive access. He also inquired about the current performance and confidence for fiscal year 2027 opportunities in California math and Florida ELA within K-12.

Answer

Simon Allen, Chairman, President, and CEO, attributed the higher education growth primarily to market share gains across all competitors, strong execution, product delivery, and effective utilization of AI, leading to record NPS scores and 30% market share. He highlighted the success of AI Reader as a retention tool. Bob Sallmann, EVP and CFO, cautioned that enrollment data is preliminary but noted McGraw Hill over-indexes in two-year colleges. He emphasized the sustainability of inclusive access growth through annual additions of new institutions and significant expansion within existing accounts, projecting 15-20 times growth over the first couple of years for new institutions. For K-12, Simon Allen expressed optimism for fiscal year 2027 due to a larger market opportunity driven by California math, Florida ELA, and Texas math, citing early successes in California and the suitability of McGraw Hill's products, including McGraw Hill Plus and ALEKS. Bob Sallmann added that bundling supplemental and intervention solutions with core offerings presents a strong opportunity for K-12.

Ryan McDonald followed up on the K-12 segment, asking for more color on the performance of California math and Florida ELA, and how this informs confidence for the second tranche of funding in fiscal year 2027.

Answer

Simon Allen, Chairman, President, and CEO, expressed optimism for fiscal year 2027, noting an anticipated $300 million increase in the K-12 TAM, driven by California math, Florida ELA, and Texas math. He highlighted early successes in California due to product suitability and pedagogical delivery, supplemented by McGraw Hill Plus and Alex. Bob Sallmann, EVP and CFO, added that bundling supplemental and intervention solutions with core offerings presents a significant opportunity for the upcoming market.