McGraw Hill (MH) investor relations material

Business overview and strategy

• Operates as a global leader in information solutions for education, serving K-12, higher education, and professional markets with a focus on digital transformation and data-driven learning outcomes.

• Mission centers on supporting educators and learners worldwide with adaptive, high-quality content and digital solutions.

• Maintains a trusted, market-leading brand with over 135 years of history and deep expertise in learning science.

• Leverages data science, machine learning, and generative AI to drive innovation and improve learner outcomes.

• Institutional sales model and long-standing customer relationships underpin a highly profitable business with strong cash flow.

Financial performance and growth

• FY2026 revenue reached $2.1B, with digital revenue at $1.4B and re-occurring revenue at $1.5B, reflecting year-over-year growth in digital and subscription-based streams.

• Gross profit margin expanded to 80.9%, and adjusted EBITDA margin rose to 35.4%, supported by operating leverage and digital mix shift.

• Net cash flow from operating activities was $331M in FY2026, with disciplined investment in technology and content innovation.

• Net debt/adjusted EBITDA improved to 3.2x by FY2026, reflecting enhanced balance sheet strength.

• Medium- to long-term targets include 5%+ annual revenue growth, 75%+ digital and re-occurring revenue mix, and 37%+ adjusted EBITDA margin.

Segment highlights

• K-12 segment serves over 90% of US districts, with 70% of FY2026 revenue from re-occurring sources and $1.2B in remaining performance obligations.

• Higher education segment serves 82% of US institutions, with 91% digital revenue and 114% net dollar retention in FY2026.

• Global professional segment focuses on high-stakes medical and engineering learning, achieving 71% digital revenue and 101% net dollar retention.

• International segment surpassed 50% digital revenue, serving over 100 countries and adapting US-originated content for local markets.