Scholastic (SCHL) Q3 2025 earnings summary

Executive summary

• Q3 revenue rose 4% year-over-year to $335.4 million, driven by strong performance in Children's Books, Book Fairs, and the 9 Story Media Group acquisition, offsetting softness in Education Solutions and retail book markets.

• Net loss improved to $3.6 million from $26.5 million prior year; operating loss narrowed 32% due to higher revenues and reduced overhead.

• Over $35 million returned to shareholders via dividends and share repurchases; share repurchase authorization increased to $100 million.

• Education Solutions continued to face headwinds, prompting a strategic review of the division.

• Scholastic's IP monetization on YouTube surged, with branded channels reaching nearly 10 million views in February, up 40x year-over-year.

Financial highlights

• Q3 revenues increased 4% to $335.4 million; year-to-date revenues were $1,117.2 million, flat year-over-year.

• Adjusted operating loss improved to $20.9 million from $30.6 million; adjusted EBITDA was $6.0 million, up from $(7.2) million last year.

• Net loss improved to $3.6 million from $23.3 million; adjusted loss per share improved to $0.05 from $0.80.

• Free cash used in Q3 was $30.7 million, compared to $7.1 million provided last year, due to lower cash flow from operations and acquisition costs.

• Q3 gross margin was 53.9%; SG&A as a percentage of revenue was 55.9%.

Outlook and guidance

• Fiscal 2025 Adjusted EBITDA outlook narrowed to approximately $140 million, at the low end of prior $140–$150 million range.

• Full-year revenue growth now expected to be modest, below prior 4–6% guidance, due to continued consumer and education spending pressure.

• Full-year free cash flow expected between $20 million and $30 million.

• Cost-saving initiatives executed in Q3 and Q4 expected to benefit fiscal 2025 and 2026.

• Minimal tariff impact expected in FY25; modest impact possible in FY26.