McGraw Hill (MH) investor relations material

Business evolution and digital transformation

• Over two-thirds of revenue now comes from digital delivery, with a focus on personalized learning enabled by AI and machine learning.

• AI is used to improve learner outcomes, reduce administrative burdens, and lower content development costs.

• The company has shifted away from traditional textbooks, with higher education now 92% digital and growing.

• Margin expansion of 1,500-2,000 basis points has been achieved through digital transformation.

• Scale and consistent platforms across K-12 and higher education drive innovation and cost efficiency.

Market opportunity and growth strategy

• Higher education market share has grown from 21% to 30% in recent years, driven by innovation and new product launches.

• K-12 market is stable at 50 million learners, with revenue less sensitive to enrollment changes due to district-level licensing.

• Expansion into supplemental intervention, where current share is 5%, offers significant growth potential.

• Value-based pricing and continuous product enhancements support price realization.

• International and professional segments are targeted for further growth, especially in LATAM and the Middle East.

Differentiation and competitive advantages

• Deep content expertise, strong brand, and trusted relationships with educators set the company apart.

• Proprietary data from 19 billion annual learning interactions enables advanced personalized learning.

• AI tools like Teacher Assistant, Writing Assistant, AI Reader, and Scribe streamline content creation and improve learning outcomes.

• Scale, data, and a large, tenured sales force create barriers to entry for smaller competitors.

• Over a decade of responsible machine learning use builds trust in education markets.