McGraw Hill, Inc. Reports Fiscal Third Quarter 2026 Results

Total Revenue Increased 4.2% Driven by Re-Occurring Revenue Growth of 14.8%; Fiscal Year 2026 Guidance Raised

McGraw Hill, Inc. (NYSE:MH) ("McGraw Hill" or the "Company"), a leading global provider of education solutions for preK-12, higher education and professional learning, today announced financial results for the fiscal third quarter 2026 ended December 31, 2025.

Fiscal Third Quarter 2026 Key Financial Highlights

McGraw Hill continued to leverage its scale, proprietary content, data, technology and domain expertise to drive Q3 performance, delivering revenue growth and margin expansion.

• Total Revenue of $434.2 million, an increase of 4.2% year-over-year, driven by 24.0% year-over-year growth in Higher Education.
• Re-occurring revenue of $357.5 million, an increase of 14.8% year-over-year.
• Digital revenue of $363.7 million, an increase of 11.0% year-over-year.
• Remaining performance obligation (RPO) of $1,696.8 million as of December 31, 2025 demonstrates predictability and visibility into future revenue.
• GAAP gross profit of $370.3 million, representing a GAAP gross profit margin of 85.3%, an increase of nearly 100 basis points versus prior year.
• GAAP net income (loss) of $(20.2) million, compared to $(52.9) million in the prior-year period.
• Adjusted EBITDA⁽¹⁾ of $135.9 million, representing an Adjusted EBITDA margin⁽¹⁾ of 31.3%, an increase of nearly 100 basis points versus prior year.
• Strong results support an upward revision to fiscal year 2026 guidance.
• Accelerated debt paydown with $200 million in term loan pre-payments during the quarter advancing toward the 2.0x-2.5x net leverage target. As of December 31, 2025, Net Leverage Ratio⁽¹⁾ stood at 2.9x.

"Delivering strong fiscal third quarter 2026 results is a testament to our team's disciplined execution and our mission to empower students through personalized learning," said Simon Allen, who retired as President and Chief Executive Officer of the Company on February 9, 2026. Simon Allen will remain Chair of the Company's Board of Directors, and is succeeded by Philip Moyer. "Rejoining McGraw Hill in 2018 was one of the best decisions of my career, and I am immensely proud of the foundation we've built--and the progress we have made--strengthening our financial profile, advancing our digital transformation, building scaled, data-driven solutions to support personalized learning, and becoming a publicly traded company. As Chair of the Board of Directors, I will remain deeply engaged for the foreseeable future and am confident in McGraw Hill's strategy and leadership. Philip's deep expertise in technology and artificial intelligence, paired with his customer-centric approach, aligns well with McGraw Hill's next phase of growth as we continue to evolve our digital, data-driven foundation to support the next generation of learners."

"I am thrilled to join McGraw Hill at this pivotal moment in education," said Philip Moyer, McGraw Hill's President, Chief Executive Officer and member of the Board of Directors. "Simon and his team have built an extraordinary foundation. McGraw Hill is one of the most respected leaders in the industry, with unmatched assets to serve the next generation of learners. We are a digital-first business with some of the world's most trusted global curricula. We have over a century of learning insights, and proprietary data and analytics. We have deep global customer relationships and, over the past 2 years, we have been rolling out AI solutions at scale and delivering real improvements in education outcomes. My focus is to build on this foundation, accelerate new and engaging learning tools, broaden the customers we serve and drive sustainable and profitable growth."

"Our fiscal third quarter results again showcase the resilience and quality of our revenue profile, with double-digit growth in re-occurring and digital revenue and continued operating leverage. We are translating our strategic vision into impressive financial results, evidenced by our ability to raise our fiscal year 2026 guidance," said Bob Sallmann, McGraw Hill's Executive Vice President and Chief Financial Officer. "Additionally, our strong free cash flow enabled us to continue to reduce debt in the fiscal third quarter, and we remain committed to our net leverage target."

Fiscal Third Quarter Strategic Highlights

The Company delivered market share gains and meaningful strategic progress in fiscal third quarter while advancing the scale and integration of its solutions.

• Diversified Growth: Strength in core, supplemented by portfolio expansion with offerings such as ALEKS Adventure, ALEKS Calculus, Sharpen Advantage for Higher Education institutions, and McGraw Hill Plus.
• Innovative Content Expansion: First-to-market Evergreen content delivery platform featured over 700 Higher Education titles, with ongoing educator adoption driving retention and valuable time savings.
• Go-to-Market Excellence: Sales and marketing investments continued to pay forward with increased platform usage and customer satisfaction, while reinforcing customer centricity and share gains.
• Expanding Solution Impact: Strong growth across McGraw Hill solutions, driven by AI powered capability enhancements such as AI Reader, Teacher Assistant and Writing Assistant, which improve efficacy, save educator time, and support ongoing share gain and customer retention.
• Scaling AI Solutions: AI Reader recorded 16 million interactions, or 27 million since inception. With more than 1 million unique users in Q3, this AI tool is demonstrating accelerating customer engagement and scaling benefits, a proof point that AI represents a tailwind to the business.
• Enhanced Integration: McGraw Hill continues to advance deeper institutional alignment and solution integration, with McGraw Hill Plus and future Sharpen and ALEKS integration.
• Operational Efficiency: Infusing technology across the business to support productivity, streamline operations, and support future margin expansion opportunities.
• Employer Recognition: Forbes named McGraw Hill one of America's Best Midsize Employers in 2026, highlighting its mission-driven culture, employee excellence, and depth of industry expertise.
• Leadership Transition: Philip Moyer was appointed President and Chief Executive Officer and a member of the Board of Directors effective February 9, 2026, bringing seasoned leadership to guide McGraw Hill's next phase of growth. Former President and Chief Executive Officer Simon Allen continues as Chair of the Board of Directors, ensuring continuity and strategic stewardship for the foreseeable future.

Fiscal Third Quarter Segment Highlights

McGraw Hill's segment performance was led by strong double-digit growth in Higher Education, resilience in K-12 with share gain amid a smaller market year, and improving performance in Global Professional and International.

Higher Education

• Revenue totaled $225.4 million, an increase of 24.0% year-over-year driven by record market share, value-based pricing, and favorable enrollment trends.
• Re-occurring revenue totaled $196.0 million, an increase of 33.5% year-over-year, while digital revenue rose 24.8% year-over-year to $203.1 million, underscoring the scalability of subscription-based solutions.
• Inclusive Access remains a pivotal distribution channel, comprising 60% of Higher Education revenue.
• Evergreen continues to scale across over 700 titles, representing 70% of Higher Education revenue.
• New innovations like AI Reader and Sharpen are driving engagement, and ALEKS Calculus is poised to unlock additional TAM.

K-12

• Revenue totaled $128.2 million, down 14.6% year-over-year, as share gains were offset by the smaller overall fiscal year 2026 market opportunity.
• Re-occurring revenue totaled $110.7 million, declining only 1.6% year-over-year, due to strong market capture and robust prior year sales.
• End-to-end portfolio provides competitive differentiation within the larger fiscal year 2027 market opportunity.
• Integrated solutions include McGraw Hill Plus, ALEKS Adventure and new AI capabilities which continue to demonstrate increased utilization rates, time savings and efficacy.

Global Professional and International

• Medical and engineering sectors drove revenue growth in Global Professional, while the International revenue decline narrowed relative to the preceding quarter.

Fiscal Third 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, February 11, 2026, at 5:00 p.m. ET, McGraw Hill will host a conference call via webcast to review fiscal third quarter 2026 results and provide a business update. The webcast will be hosted by Simon Allen, Chair of the Board of Directors, Philip Moyer, 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 https://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 Reports on Form 10-Q, 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, Adjusted research and development expenses and Net Leverage Ratio. 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 February 11, 2026, 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 on July 25, 2025 in connection with the consummation of our initial public offering), 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 nine months ended December 31, 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 on July 25, 2025 in connection with the consummation of our initial public offering), 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 nine months ended December 31, 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 on July 25, 2025 in connection with the consummation of our initial public offering), 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 on July 25, 2025 in connection with the consummation of our initial public offering), 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 nine months ended December 31, 2025 and 2024:

Net Leverage Ratio

"Net leverage Ratio" is calculated by dividing net debt as of the most recent balance sheet date by the Last Twelve Months ("LTM") Adjusted EBITDA. Net debt is defined as Gross Debt, net of cash and cash equivalents. Gross Debt is defined as the total amount of principal borrowings outstanding.

LTM is defined as the twelve-month period ended on the last day of the most recently completed fiscal quarter and is calculated by adding the results for the nine months ended December 31, 2025, to the results of the fiscal year ended March 31, 2025, and subtracting the nine months ended December 31, 2024.

Key Operating Metrics

Re-occurring Revenue and Transactional Revenue for the Three and Nine Months Ended December 31, 2025 and 2024

RPO as of December 31, 2025 and as of March 31, 2025

Digital and Print Revenue

Disaggregation of Revenue for the Three and Nine Months Ended December 31, 2025 and 2024

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