McGraw Hill, Inc. Exceeds Fiscal Year 2026 Guidance Driven by Re-Occurring Revenue Growth and Delivers Positive Net Income
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 financi...
Fiscal Year 2027 Positioned for Revenue Growth and Accelerating Profitability
COLUMBUS, Ohio: 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 fourth quarter 2026 and year-end March 31, 2026.
Key Fiscal Year 2026 Financial Highlights
- Total revenue of $2,102.8 million, an increase of 0.1% year-over-year, driven by strong Higher Education execution, offsetting the anticipated smaller K-12 market opportunity driven by procurement cycles.
- Re-occurring revenue of $1,541.0 million, an increase of 5.8% year-over-year, representing more than 73% of total revenue.
- Digital revenue of $1,433.6 million, an increase of 5.5% year-over-year amid accelerating student and instructor engagement.
- Remaining performance obligation (RPO) of $1,671.4 million as of March 31, 2026 demonstrating predictability and visibility into future revenue growth.
- GAAP gross profit of $1,701.6 million, representing a GAAP gross profit margin of 80.9%, an increase of over 100 basis points versus prior year.
- GAAP net income (loss) of $35.3 million, compared to $(85.8) million in the prior-year period.
- Adjusted EBITDA(1) of $744.3 million, representing an Adjusted EBITDA margin(1) of 35.4%, an increase of nearly 80 basis points versus prior year.
- Reduction of gross debt by $645.6 million, including $50.0 million in the fiscal fourth quarter, at the beginning of the seasonal cash trough.
“McGraw Hill’s growth in fiscal year 2026 underscores the strength of our strategy, the speed of our innovation and the depth of trust that we have from the education community,” said Philip Moyer, President and Chief Executive Officer of the Company and a member of the Company’s Board of Directors. “This past year, we released more new curriculum offerings and learning tools than during any time in our history, reached record engagement levels, and achieved a new high‑water mark for customer satisfaction. We have achieved over 7.5 million users of our new AI personalized learning tools and now have an existing base of more than 100 million active student and educator curriculum licenses in over 100 countries. With over 25 billion learning interactions and 190 terabytes of data across our platforms, we are delivering a new generation of precision learning at a global scale that few can match. Equally exciting, we are preparing to pilot our new Agentic AI version of our precision education model, and we intend to be a leader in creating a vibrant ‘cloud’ knowledge offering in the world of education and learning. Our momentum in fiscal year 2026 positions us well to accelerate growth and expand margins in fiscal year 2027 and beyond.”
“Fiscal year 2026 was a transformative year for McGraw Hill-marked by our initial public offering and the growth of our Company, notwithstanding a smaller K-12 market opportunity, expanding profitability and significant debt reduction,” said Bob Sallmann, McGraw Hill’s Executive Vice President and Chief Financial Officer. “Our disciplined execution delivered results above guidance across revenue, re-occurring revenue and Adjusted EBITDA while strengthening our balance sheet and cash generation. With $646 million in gross debt reduction, we have increased our financial flexibility and expanded margins while simultaneously investing in the business to position the Company for sustained long-term growth. As we enter fiscal year 2027, our focus remains on growth acceleration, operating efficiency and employing a balanced approach to capital allocation as we continue to reduce gross debt, grow the business and strengthen returns.”
Fiscal Year 2026 Strategic Highlights
- Served over 100 million active student and educator curriculum licenses across more than 100 countries.
- Supported tens of thousands of course titles across more than 500 subjects.
- Captured approximately 25.6 billion learning interactions(2), generating proprietary insights that power precision learning and real‑time personalized instruction.
- Over 7.5 million users of AI-enabled learning tools with 8 new tools launched over the past two years.
- AI Reader generated approximately 57 million learning interactions across approximately 2.4 million students since inception through May, accelerating from approximately 47 million interactions and approximately 2.2 million students in fiscal year 2026.
- Continued expansion of Evergreen delivery model, which is improving the customer experience and contributing to a record high Spring semester net promoter score for Higher Education.
- Launched critical new ELA curriculum that covers grades K-12 and aligns with the Science of Reading.
- Piloting a new Agentic AI tool that will make our precision education experience accessible as a trusted AI Agent for both education and non-education customers.
Fourth Quarter and Fiscal Year 2026 Financial Highlights
|
| Three Months Ended March 31, |
| Year Ended March 31, | ||||||||||||
($ in thousands) |
|
| 2026 |
|
|
| 2025 |
|
|
| 2026 |
|
|
| 2025 |
|
|
| (unaudited) |
|
|
|
| ||||||||||
Revenue |
| $ | 463,722 |
|
| $ | 473,262 |
|
| $ | 2,102,781 |
|
| $ | 2,101,299 |
|
Cost of sales (excluding depreciation and amortization) |
| $ | 74,834 |
|
| $ | 78,393 |
|
| $ | 401,139 |
|
| $ | 422,294 |
|
Operating and administrative expenses |
| $ | 282,023 |
|
| $ | 292,535 |
|
| $ | 1,080,250 |
|
| $ | 1,066,496 |
|
Net income (loss) |
| $ | (50,267 | ) |
| $ | (156,867 | ) |
| $ | 35,320 |
|
| $ | (85,839 | ) |
Adjusted EBITDA (1) |
| $ | 130,575 |
|
| $ | 131,651 |
|
| $ | 744,264 |
|
| $ | 726,790 |
|
Net income (loss) margin |
|
| (10.8 | )% |
|
| (33.1 | )% |
|
| 1.7 | % |
|
| (4.1 | )% |
Adjusted EBITDA Margin (1) |
|
| 28.2 | % |
|
| 27.8 | % |
|
| 35.4 | % |
|
| 34.6 | % |
Adjusted net income (loss) (1) |
| $ | 61,167 |
|
| $ | (328,084 | ) |
| $ | 375,459 |
|
| $ | 202,350 |
|
Fiscal Fourth Quarter Consolidated Financial Highlights
- Total revenue of $463.7 million, a decrease of 2.0% year-over-year, reflecting a smaller K‑12 market opportunity, partially offset by strong Higher Education performance.
- Re-occurring revenue of $373.5 million, a decrease of 3.5% year-over-year.
- Digital revenue of $392.7 million, a decrease of 2.1% year-over-year.
- GAAP gross profit of $388.9 million, representing a GAAP gross profit margin of 83.9%, an increase of nearly 50 basis points versus prior year.
- GAAP net income (loss) of $(50.3) million, compared to $(156.9) million in the prior-year period.
- Adjusted EBITDA(1) of $130.6 million, representing an Adjusted EBITDA margin(1) of 28.2%, an increase of nearly 40 basis points versus prior year.
Fiscal Fourth Quarter and Full Year Segment Highlights
Higher Education
- Record high market share achieved, according to MPI.
- Fiscal Year 2026 revenue totaled $879.0 million, an increase of 12.3% year-over-year, while fiscal fourth quarter revenue grew 1.6% year-over-year supported by share gains, pricing favorability and beneficial enrollment trends.
- Fiscal Year 2026 re-occurring revenue totaled $734.4 million, an increase of 10.1% year-over-year, despite a 4.9% year-over-year decline in the fiscal fourth quarter due to mix.
- Net dollar retention of 114.0% driven by inclusive access upsell and cross‑sell opportunities.
- Evergreen delivery model continues to scale, representing 68% of Higher Education revenue.
K-12
- Performance exceeded expectations despite the smaller expected K–12 market opportunity driven by procurement cycles.
- Fiscal Year 2026 revenue totaled $884.5 million, down 8.9% year-over-year and 10.4% in fiscal fourth quarter given the cyclical market comparison and higher capture rates last year.
- Fiscal Year 2026 re-occurring revenue totaled $619.7 million, an increase of 2.9% year-over-year, despite a 2.9% decline in the fiscal fourth quarter, on strong market capture and robust prior year sales.
- Early 2026–2027 selling season indicators support fiscal year 2027 as the start of a multi-year market expansion opportunity, with trends that vary by market.
- Well-positioned for multi‑year growth via nationwide Science of Reading refresh, with strong early momentum from our Emerge, Summit, and Soar curriculum.
Global Professional and International
- Global Professional delivered 4.0% digital growth in fiscal year 2026, driven by AI-powered medical solutions built on a foundation of trusted content.
- International revenue declined 7.3% in fiscal year 2026, with market headwinds giving way to new commercial opportunities in key markets and ALEKS Calculus expanding globally.
Fiscal Year 2027 Guidance
The following fiscal year 2027 guidance is forward-looking, and is based on the Company’s current expectations. Actual results may differ materially from what is indicated below.
|
| Fiscal Year 2027 Guidance | ||||
|
| As of June 11, 2026 | ||||
($ in millions) |
| Low |
| High | ||
Revenue |
| $ | 2,115 |
| $ | 2,175 |
Re-occurring Revenue |
|
| 1,587 |
|
| 1,627 |
Adjusted EBITDA (1) |
|
| 750 |
|
| 790 |
Share Repurchase Plan
On June 2, 2026, our Board of Directors approved a share repurchase plan whereby, from time to time, the Company may repurchase up to $50 million of the Company’s common stock.
Earnings Conference Call and Webcast
Today, June 11, 2026, at 8:30 a.m. ET, McGraw Hill will host a conference call via webcast to review fiscal year 2026 fourth quarter and full year 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 Annual Report on Form 10-K and 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 accounting 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 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 Annual Report on Form 10-K filed on June 11, 2026, for reconciliations of non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP.
(2) Learning interactions measures the volume of user-driven educational activities across McGraw Hill platforms, including answering questions, completing assignments, and engaging with learning content. This data captures activity across K-12 platforms (Open Learning, ConnectED, ALEKS), Higher Education (Smartbook, Connect), and Enterprise IDM. For the fiscal year ended March 31, 2026, coverage expanded to include A3K Literacy, Actively Learn, and additional Connect data.
Forward-Looking Non-GAAP Financial Measures
This press release contains forward-looking estimates of Adjusted EBITDA for fiscal year 2027. 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 2027 net income (loss) to a forward-looking estimate of fiscal year 2027 Adjusted EBITDA because certain information needed to make a reasonable forward-looking estimate of net income (loss) for fiscal year 2027 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.
MCGRAW HILL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except for share and per share data) | |||||||||||||||
| Three Months Ended March 31, |
| Year Ended March 31, | ||||||||||||
|
| 2026 |
|
|
| 2025 |
|
|
| 2026 |
|
|
| 2025 |
|
| (unaudited) |
|
|
|
| ||||||||||
Revenue | $ | 463,722 |
|
| $ | 473,262 |
|
| $ | 2,102,781 |
| $ | 2,101,299 |
| |
Cost of sales (excluding depreciation and amortization) |
| 74,834 |
|
|
| 78,393 |
|
|
| 401,139 |
|
|
| 422,294 |
|
Gross profit |
| 388,888 |
|
|
| 394,869 |
|
|
| 1,701,642 |
|
|
| 1,679,005 |
|
Operating expenses |
|
|
|
|
|
|
| ||||||||
Operating and administrative expenses |
| 282,023 |
|
|
| 292,535 |
|
|
| 1,080,250 |
|
|
| 1,066,496 |
|
Depreciation |
| 19,767 |
|
|
| 16,240 |
|
|
| 81,985 |
|
|
| 66,688 |
|
Amortization of intangibles |
| 54,460 |
|
|
| 58,322 |
|
|
| 223,627 |
|
|
| 239,014 |
|
Impairment charge |
| 39,000 Related news
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