McGraw Hill, Inc. Reports Fiscal Second Quarter 2026 Results

McGraw Hill Raises Fiscal Year Guidance After Reporting Strong Fiscal Second Quarter Results

Back-to-School Delivers Market Share Gains and Higher Levels of User Engagement, with New AI-Powered Solutions Expected to Fuel Growth Beyond Core Offerings

McGraw Hill, Inc. (NYSE:MH) ("McGraw Hill" or the "Company"), a leading global provider for education solutions from preK-12 through higher education and professional learning, today announced financial results for its fiscal second quarter 2026 ended September 30, 2025.

Fiscal Second Quarter 2026 Key Financial Highlights

McGraw Hill demonstrated financial resilience with re-occurring and digital revenue growth despite the anticipated smaller K-12 market opportunity.

• Revenue totaled $669.2 million, a 2.8% year-over-year decline, reflecting the anticipated smaller K-12 market, which was partially offset by strong growth in Higher Education.
• Re-occurring revenue of $422.4 million, an increase of 6.5% year-over-year.
• Digital revenue of $352.2 million, an increase of 7.6% year-over-year.
• Remaining performance obligation (RPO) of $1,913.6 million as of September 30, 2025.
• GAAP gross profit of $530.1 million, representing a GAAP gross profit margin of 79.2%, an increase of nearly 150 basis points versus prior year.
• GAAP net income of $105.3 million, compared to $133.4 million in the prior-year period.
• Adjusted EBITDA⁽¹⁾ of $286.4 million, representing an Adjusted EBITDA margin⁽¹⁾ of 42.8%, an increase of 60 basis points versus prior year.

"With market share gains and the expansion of AI-powered tools, we are advancing personalized learning at scale while investing in growth beyond our core offerings," said Simon Allen, McGraw Hill Chairman, President and Chief Executive Officer. "Our fiscal second quarter performance highlights how McGraw Hill successfully empowered educators and learners during the back-to-school season with innovative and efficacious solutions. We remain committed to shaping the future of education by integrating research-driven pedagogy, high-quality content, and a wealth of student data to deliver learner outcomes beyond what technology alone can achieve."

"Our fiscal second quarter results highlight the strength, scalability, and diversity of our business model, driven by the execution of effective strategies that fueled continued momentum in digital and re-occurring revenue," said Bob Sallmann, McGraw Hill Executive Vice President and Chief Financial Officer. "With notable market share gains, disciplined capital allocation, and a stronger balance sheet, we believe we are well-positioned to deliver sustained value for all stakeholders while continuing to invest in innovation and optimize our operations."

Fiscal Second Quarter 2026 Business Highlights

The Company remains focused on delivering innovative solutions, advancing personalized learning, and strengthening its financial position.

• McGraw Hill delivered its second strongest fiscal second quarter revenue performance in a decade.
• Re-occurring revenue increased 6.5% year-over-year, totaling 63% of consolidated revenue, due to growth across Higher Education, K-12 and Global Professional.
• Digital revenue grew 7.6% year-over-year, underscoring a scalable, data-driven business model.
• Market share increased notably within U.S. Higher Education along with continued strong K-12 capture rate amid the predictably smaller fiscal year 2026 market.
• Gross profit margin improved by nearly 150 basis points year-over-year to 79.2% supported by higher-margin digital solutions growth.
• Adjusted EBITDA margin⁽¹⁾ expanded 60 basis points year-over-year to 42.8% amid ongoing reinvestment.
• As previously reported, the interest rate spread on the Company's outstanding term loan facility was reduced by 50 basis points, and McGraw Hill's strong cash position enabled a $150 million principal prepayment of that facility in October 2025. These actions brought the year-to-date gross debt reduction to $542 million, generating over $40 million in annualized cash interest savings.

Strategic Highlights

McGraw Hill continued to deliver AI-driven innovation by strategically leveraging the Company's high-quality content, expansive proprietary data set, and domain expertise to deliver personalized learning solutions.

• McGraw Hill's proprietary AI tools continued to drive efficiency and engagement, with AI Reader hitting a milestone with 11 million learning interactions in the quarter.
• Launched four new AI-powered solutions to address critical educator and learner needs and fuel future growth.
• McGraw Hill Plus adoption continued along with higher utilization levels.
• Expanded offerings beyond core markets with ALEKS Adventure in K-3, ALEKS Calculus globally and Sharpen Advantage, a new AI powered solution for Higher Education institutions.
• The Company's internal AI-powered content generation platform, Scribe, recouped its initial investment within a year, driving lasting efficiencies in content development.

Segment Highlights

McGraw Hill's diverse portfolio of education solutions, serving the entire learning lifecycle, has largely insulated the impact of the anticipated smaller K-12 market opportunity, with Higher Education delivering double-digit revenue growth and increased market share.

Higher Education

• Revenue totaled $213.0 million, an increase of 14.0% year-over-year primarily driven by share gains.
• Re-occurring revenue totaled $161.7 million, an increase of 13.8% year-over-year, while digital revenue rose 18.4% year-over-year to $186.2 million, highlighting the scalability of McGraw Hill's subscription-based and innovative Evergreen content delivery model.
• U.S. Higher Education market share reached a record 30% on a last twelve months basis, an increase of 160 basis points year-over-year, according to MPI.
• Inclusive Access sales grew 37.0% year-over-year, reflecting deeper penetration with existing customers.

K-12

• Revenue totaled $359.1 million, a decline of 11.2% year-over-year, due to the anticipated smaller market opportunity.
• Re-occurring revenue totaled $216.2 million, an increase of 2.8% year-over-year, supported by Florida Science market leadership and strong market share capture within other states and disciplines.
• ALEKS Adventure demonstrated early success, while McGraw Hill Plus momentum continued with deeper market penetration and utilization.
• Well-positioned for a return to growth in fiscal year 2027, supported by a larger market opportunity, including recently securing the approval for the California math adoption.

Global Professional and International

• Global Professional demonstrated resilience with re-occurring revenue growth within medical and engineering sectors. International revenue decline narrowed relative to the prior quarter supported by growth in key markets, amid the ongoing digital transition. Refer to Key Operating Metrics for more details.

Fiscal Second Quarter 2026 Financial Highlights

Fiscal Year 2026 Guidance

The following fiscal year 2026 guidance is forward-looking, and is based on the Company's current expectations. Actual results may differ materially from what is indicated below.

Earnings Conference Call and Webcast

Today, November 12, 2025, at 8:30 a.m. ET, McGraw Hill will host a conference call via webcast to review fiscal second quarter 2026 results and provide a business update. The webcast will be hosted by Simon Allen, Chairman, President and Chief Executive Officer, and Bob Sallmann, Executive Vice President and Chief Financial Officer, and will conclude with a question-and-answer session.

To access the live webcast or to view a replay, visit the Company's investor relations website at investors.mheducation.com.

The live question and answer portion of the call can be accessed by registering online at the Event Registration Page at which time registrants will receive dial-in information as well as a conference ID. Registration can be completed in advance of the conference call.

About McGraw Hill

McGraw Hill (NYSE:MH) is a leading global provider of education solutions for preK-12, higher education and professional learning, supporting the evolving needs of millions of educators and students around the world. We provide trusted, high-quality content and personalized learning experiences that use data, technology and learning science to help students progress towards their goals. Through our commitment to fostering a culture of innovation and belonging, we are dedicated to improving outcomes and access to education for all. We have over 30 offices across North America, Asia, Australia, Europe, the Middle East and South America, and make our learning solutions available in more than 80 languages. The Company's fiscal year is the 52-week period ended March 31. Visit us at mheducation.com or find us on Facebook, Instagram, LinkedIn or X.

Safe Harbor Statement

This press release includes statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology, including terms such as "believes," "estimates," "anticipates," "expects," "projects," "intends," "plans," "may," "will," "should" or "seeks," or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include, but are not limited to, statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward-looking statements involve risks and uncertainties, as they relate to events and depend on circumstances that may or may not occur in the future. The Company's expectations, beliefs and projections are expressed in good faith, and the Company believes there is a reasonable basis for them; however, the Company cautions readers that forward-looking statements are not guarantees of future performance and that the Company's actual results of operations, financial condition and liquidity, and the developments in the industry in which the Company operates, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this press release, including those described under the headings "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Company's final prospectus filed pursuant to Rule 424(b) under the Securities Act, filed on July 24, 2025, the Company's Quarterly Report on Form 10-Q, filed on November 12, 2025, and in other filings made with the U.S. Securities and Exchange Commission. In addition, even if our results of operations, financial condition and liquidity, and the developments in the industry in which we operate are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. Any forward-looking statements the Company makes in this press release speak only as of the date of such statement. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information. future developments or otherwise, except as may be required by any applicable securities law.

⁽¹⁾ Non-GAAP Financial Measures

In addition to presenting financial results that have been prepared in accordance with generally accepted principles in the United States ("GAAP"), we have included in this release the following non-GAAP financial measures—EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted net income (loss), Adjusted basic and diluted earnings (loss) per share, Adjusted operating and administrative expenses, Adjusted selling and marketing expenses, Adjusted general and administrative expenses and Adjusted research and development expenses. All such financial measures that are not required by or presented in accordance with GAAP. We believe that these non-GAAP financial measures are useful in evaluating our business and the underlying trends that affect our performance. The Company has included non-GAAP financial measures within the meaning of Regulation G and Item 10(e) of Regulation S-K. We include these non-GAAP financial measures in this release because management uses them to assess our performance. We believe that they reflect the underlying trends and indicators of our business and allow management to focus on the most meaningful indicators of our continuous operational performance. Although we believe these measures are useful for investors for the same reasons, readers of the financial statements herein should note that these measures are not a substitute for GAAP financial measures or disclosures. Each of these measures is not a recognized term under GAAP and does not purport to be an alternative to net income (loss), or any other measure derived in accordance with GAAP as a measure of operating performance, or to cash flows from operations as a measure of liquidity. Such measures are presented for supplemental information purposes only, have limitations as analytical tools and should not be considered in isolation or as substitute measures for our results as reported under GAAP. Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting our business, rather than evaluating GAAP results alone. Because not all companies use identical calculations, our measures may not be comparable to other similarly titled measures of other companies, and our use of these measures varies from others in our industry. Such measures are not intended to be a measure of cash available for management's discretionary use, as they may not capture actual cash obligations associated with interest payments, other debt service requirements and taxes. Because of these limitations, we rely primarily on our GAAP results and use these non-GAAP measures only supplementally. See "Reconciliations of Non-GAAP Financial Measures" in the "Supplemental Information" section below and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures" in our Quarterly Report on Form 10-Q filed on November 12, 2025, for reconciliations of non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP.

Forward-Looking Non-GAAP Financial Measures

This press release contains forward-looking estimates of Adjusted EBITDA for fiscal year 2026. We provide this non-GAAP measure to investors on a prospective basis for the same reasons (as set forth above) that we provide it to investors on a historical basis. We are unable to provide a reconciliation of our forward-looking estimate of fiscal year 2026 net income (loss) to a forward-looking estimate of fiscal year 2026 Adjusted EBITDA because certain information needed to make a reasonable forward-looking estimate of net income (loss) for fiscal year 2026 is unreasonably difficult to predict and estimate and is often dependent on future events that may be uncertain or outside of our control. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on our future financial results. Our forward-looking estimates of both GAAP and non-GAAP measures of our financial performance may differ materially from our actual results and should not be relied upon as statements of fact.

Supplemental Information

Reconciliations of Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

"EBITDA" is defined as net income (loss) from continuing operations plus interest expense (income), net, income tax provision (benefit), depreciation and amortization.

"Adjusted EBITDA" is defined as net income (loss) from continuing operations plus interest expense (income), net, income tax provision (benefit), depreciation and amortization, restructuring and cost savings implementation charges, the effects of the application of purchase accounting, advisory fees paid to Platinum Advisors pursuant to the Advisory Agreement (which was terminated upon consummation of our Initial Public Offering on July 25, 2025), impairment charges, transaction and integration costs, stock-based compensation, (gain) loss on extinguishment of debt and the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations.

Further, although not included in the calculation of Adjusted EBITDA below, we may at times add estimated cost savings and operating synergies related to operational changes ranging from acquisitions or dispositions to restructurings, and exclude one-time transition expenditures.

"Adjusted EBITDA Margin" is calculated by dividing Adjusted EBITDA by total revenue.

The following table presents a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to the most directly comparable GAAP financial measure for the three and six months ended September 30, 2025 and 2024:

Adjusted net income (loss) and Adjusted basic and diluted earnings (loss) per share

"Adjusted net income (loss)" is defined as net income (loss) from continuing operations adjusted to exclude amortization of intangible assets, restructuring and cost savings implementation charges, the effects of the application of purchase accounting, advisory fees paid to Platinum Advisors pursuant to the Advisory Agreement (which was terminated upon consummation of our Initial Public Offering on July 25, 2025), impairment charges, transaction and integration costs, stock-based compensation, (gain) loss on extinguishment of debt and the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations and the related tax impact of those adjustments.

Adjusted basic and diluted earnings (loss) per share is calculated by dividing Adjusted net income (loss) by the basic and diluted weighted average shares outstanding.

The following table presents a reconciliation of Adjusted net income (loss) and Adjusted basic and diluted earnings (loss) per share to the most directly comparable GAAP financial measure for the three and six months ended September 30, 2025 and 2024:

Non-GAAP operating and administrative expenses

"Adjusted operating and administrative expenses" is defined as GAAP operating and administrative expenses adjusted to exclude restructuring and cost savings implementation charges, advisory fees paid to Platinum Advisors pursuant to the Advisory Agreement (which was terminated upon consummation of our Initial Public Offering on July 25, 2025), transaction and integration costs, stock-based compensation, amortization of product development costs and the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations.

"Adjusted selling and marketing expenses" is defined as GAAP selling and marketing expenses adjusted to exclude stock-based compensation and the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations.

"Adjusted general and administrative expenses" is defined as GAAP general and administrative expenses adjusted to exclude restructuring and cost savings implementation charges, advisory fees paid to Platinum Advisors pursuant to the Advisory Agreement (which was terminated upon consummation of our Initial Public Offering on July 25, 2025), transaction and integration costs, stock-based compensation and the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations.

"Adjusted research and development expenses" is defined as GAAP research and development expenses adjusted to exclude stock-based compensation and the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations.

The following table presents a reconciliation of these non-GAAP operating and administrative expenses to the most directly comparable GAAP financial measure for the three and six months ended September 30, 2025 and 2024:

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