McGraw Hill (MH) Q3 2026 earnings summary

Executive summary

• Q3 FY2026 revenue rose 4.2% year-over-year to $434.2M, led by 24% growth in Higher Education and strong digital expansion.

• Recurring revenue grew 14.8% to $357.5M, now representing 82% of total revenue; digital revenue rose 11% to $364M and accounts for 84% of total revenue.

• Adjusted EBITDA increased 7.7% year-over-year to $135.9M, with a margin of 31.3%.

• Leadership transition: Simon Allen retired as CEO, succeeded by Philip Moyer, who brings deep technology and operational expertise.

• Company completed an IPO in July 2025, raising $392.9M in net proceeds used to repay debt.

Financial highlights

• Q3 total revenue: $434.2M, up 4.2% year-over-year; fiscal year-to-date revenue up 0.7% to $1.64B.

• Recurring revenue: $357.5M, up 14.8% year-over-year, 82% of total revenue; digital revenue: $364M, up 11% year-over-year.

• Gross profit margin expanded nearly 100 basis points to 85.3%.

• Adjusted EBITDA: $135.9M, margin of 31.3%, up nearly 100 basis points year-over-year.

• Cash and cash equivalents at December 31, 2025 were $514.4M; total liquidity $964M.

Outlook and guidance

• FY2026 revenue guidance raised to $2,067M–$2,087M; recurring revenue guidance: $1,516M–$1,526M; Adjusted EBITDA: $729M–$739M.

• Unlevered Free Cash Flow expected to slightly exceed the low end of 50%-100% Adjusted EBITDA conversion.

• CapEx and product development to remain at 8%-9% of revenue.

• Confident in return to revenue growth and margin expansion in fiscal 2027.

• RPO at $1,697M, providing strong future revenue visibility.