McGraw Hill (MH) Q2 2027 earnings summary

Executive summary

• Q2 FY27 revenue was $632.2M, down 5.5% YoY; H1 revenue was $1,182.1M, down 1.9%, while H1 recurring and digital revenue grew 3.7% and 5.6%.

• Q2 Adjusted EBITDA fell 12.5% to $250.6M; H1 net income rose 36.3% to $144.2M, supported by lower interest expense and a smaller debt-extinguishment loss.

• Higher Ed gains, K-12 ELA adoption momentum and expanding AI-enabled offerings underpin the FY28 growth outlook.

Financial highlights

• Q2 revenue was $632.2M versus $669.2M a year earlier; H1 revenue was $1,182.1M versus $1,204.9M.

• Q2 recurring revenue was $414.1M, down 2.0%; H1 recurring revenue grew 3.7%. Digital revenue grew 2.6% in Q2 and 5.6% in H1.

• Q2 GAAP net income was $86.4M versus $105.3M; H1 net income was $144.2M versus $105.8M.

• Q2 gross profit was $500.5M, down 5.6%, with gross margin at 79.2%; H1 gross profit was $939.6M, down 0.3%.

• H1 operating cash flow was $190.1M versus $168.3M; RPO totaled $1,790.5M at September 30, 2026.

Outlook and guidance

• FY27 guidance reaffirmed: revenue $2,115M–$2,175M, recurring revenue $1,587M–$1,627M and Adjusted EBITDA $750M–$790M.

• FY27 Adjusted EBITDA guidance implies a 35.9% margin, up 50 bps YoY; unlevered free cash flow is expected near $400M.

• Cash and GAAP taxes are expected near the low end of the $20M–$40M range.

• Strengthening leading indicators and the expected multi-year K-12 ELA adoption cycle support anticipated FY28 growth acceleration.

• Medium- to long-term targets include 5%+ revenue growth, recurring and digital revenue each at 75%+ of revenue, gross margin of 82%+ and Adjusted EBITDA margin of 37%+.