MH
McGraw Hill, Inc.17.07
-0.18-1.04%
Dec 16, 4:00:02 PM EST
Earnings Call Transcripts
This Quarter (Q4 '25)
No earnings call transcript available yet
Last Quarter (Q3 '25)
FY Q2 '26
Q&A details IA runway, K-12 traction
Q&A unpacked Higher Ed's 14% growth as execution-driven share gains crushing modest 2-2.5% enrollment, with Inclusive Access runway via 100 annual new logos expanding 15-20x over two years. McGraw Hill Plus surged 4x in unique users, reaching 25% of Core Math teachers for K-12 stickiness ahead of FY27's $300M TAM lift from California Math. AI Reader doubled to 20M interactions through October; efficiencies promise margin gains. Analysts probed AI threats and funding—management touted moat, dismissed concerns. Share gains crushed enrollment. Confident vibe; investors eye K-12 bundling execution.
Key Stats
Market Cap
3.26BP/E (TTM)
-Basic EPS (TTM)
-0.54Dividend Yield
0%Recent Filings
8-K
Further $50M term loan paydown
8-K
Raises guidance post-Q2 resilience
McGraw Hill reported Q2 revenue of $669.2M, down 2.8% year-over-year from a smaller K-12 market, yet Higher Education surged 14% with record 30% U.S. share. Re-occurring revenue rose 6.5% to $422.4M; digital jumped 7.6% to $352.2M. Gross margin hit 79.2%. Raised FY26 guidance: revenue $2.031-2.061B, Adjusted EBITDA $702-722M. Debt slashed $542M YTD.
10-Q
Q2 FY2026 results
McGraw Hill posted Q2 revenue of $669M, down 2.8% y/y yet steady q/q from a softer K-12 print cycle, while Higher Education surged 14% on digital adoption. Gross margin held at 79.2%, operating income fell 12.6% y/y to $157M from higher stock comp, but interest expense plunged 30% post-IPO debt paydown; diluted EPS dipped to $0.57, consistent with shares. Cash climbed to $463M, free cash flow ran $81M YTD (derived), with $2.9B total debt (A&E Term Loan at 6.913% due 2031, full revolver availability). IPO closed July 2025, repaying $386M debt. Florida False Claims Act suit looms over K-12 pricing.
8-K
McGraw Hill deleverages $150M
McGraw Hill announced a $150 million prepayment on its term loan on October 16, 2025, reducing the outstanding balance to approximately $618 million since its July IPO. This deleveraging effort, totaling $539 million in principal payments, underscores the company's financial discipline amid strong business performance. Combined with prior actions, it yields over $40 million in annualized cash interest savings. Yet risks could alter outcomes.
8-K
McGraw Hill reprices term loan, reducing interest rate by 50 bps to Term SOFR + 2.75%; potential further cut to 2.50% with better ratings. Follows $385M prepayment from IPO, cutting debt to $771M and saving $30M+ in annual interest.
McGraw Hill, Inc. announces the completion of a repricing transaction for its subsidiary's credit agreement, reducing the interest rate by 50 basis points to Term SOFR plus 2.75%, with potential for further reduction to 2.50% if credit ratings improve. This follows a $385 million term loan prepayment using IPO proceeds, reducing debt from $1,157 million to $771 million. The repricing optimizes the capital structure, lowering annualized interest expense by over $30 million.
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