Scholastic (SCHL) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue declined 10% year-over-year to $474.9M, mainly due to headwinds in Education Solutions and Children's Books, missing expectations for growth.

• Adjusted operating income for Q4 was $66.8M (down from $92M), and adjusted EBITDA was $90.7M (down from $115M); full-year adjusted EBITDA was $136.9M, down from $196.3M.

• Free cash flow for the year was $73.4M, exceeding guidance, driven by working capital management.

• Over $181M was returned to shareholders via dividends and buybacks in FY24.

• Strategic $182M acquisition of 9 Story Media Group closed in June, to be integrated as a new Entertainment Segment.

Financial highlights

• Q4 revenue: $474.9M, down 10% year-over-year; Q4 operating income: $47.2M, down 49%.

• Q4 net income: $50.5M (vs. $75.7M prior year); Q4 EPS: $1.73 (vs. $2.26), or $1.23 including one-time items.

• Full-year revenue: $1.59B, down 7%; full-year operating income: $14.5M, down 86%.

• Full-year net income: $34.6M (vs. $86.3M); full-year EPS: $1.14 (down 54%), or $0.40 including one-time items.

• Free cash flow: $73.4M (up from $60M); net cash position at year-end: $107.7M, down from $218.5M.

Outlook and guidance

• Fiscal 2025 targets modest revenue and adjusted EBITDA growth, including 9 Story's contribution.

• Revenue growth expected at 4%-6%, with adjusted EBITDA of $140M-$150M.

• 9 Story expected to add over $80M in revenue and solid EBITDA.

• Free cash flow outlook for FY25: $20M-$30M, reflecting growth investments and working capital needs.

• Q1 2025 expected to show a seasonal loss similar to prior year.