Graham Holdings Company
07/30/2026 | Press release | Distributed by Public on 07/30/2026 06:25
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Results of Operations and Financial Condition.
This analysis should be read in conjunction with the condensed consolidated financial statements and the notes thereto.
Results of Operations
The Company reported net income attributable to common shares of $281.1 million ($64.86 per share) for the second quarter of 2026, compared to $36.7 million ($8.35 per share) for the second quarter of 2025.
Items included in the Company's net income for the second quarter of 2026:
•a $137.0 million settlement gain related to a retiree annuity pension purchase (after-tax impact of $101.3 million, or $23.38 per share);
•$3.8 million in non-operating expenses related to Separation Incentive Programs (SIPs) and a Voluntary Retirement Incentive Program (VRIP) at the education, television broadcasting and manufacturing divisions, and other businesses (after-tax impact of $2.8 million, or $0.66 per share);
•$0.2 million in interest income to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $0.2 million, or $0.05 per share);
•$101.9 million in net gains on marketable equity securities (after-tax impact of $75.9 million, or $17.50 per share);
•$17.9 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $13.3 million, or $3.08 per share);
•a $5.2 million loss on the sale of Kaplan Languages Group (KLG) (after-tax impact of $10.4 million, or $2.41 per share);
•a non-operating loss of $5.8 million from the impairment of an equity method investment (after-tax impact of $4.3 million, or $1.00 per share);
•a $69.6 million income tax benefit related to the KLG business ($16.05 per share); and
•$19.2 million in income tax expense recorded in connection with global minimum corporate income tax obligations in non-U.S. jurisdictions ($4.43 per share).
Items included in the Company's net income for the second quarter of 2025:
•$6.0 million in non-operating expenses related to SIPs at other businesses and the education and television broadcasting divisions (after-tax impact of $4.5 million, or $1.02 per share);
•$1.2 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $3.5 million, or $0.79 per share);
•$11.5 million in net losses on marketable equity securities (after-tax impact of $8.6 million, or $1.95 per share);
•$0.4 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $0.3 million, or $0.07 per share); and
•a non-operating loss of $12.7 million from the impairment of a cost method investment (after-tax impact of $9.5 million, or $2.15 per share).
Revenue for the second quarter of 2026 was $1,302.5 million, up 7% from $1,215.8 million in the second quarter of 2025. Revenues increased at television broadcasting, healthcare, manufacturing, automotive and other businesses, partially offset by a decline at education. The Company reported operating income of $83.6 million for the second quarter of 2026, compared to $72.8 million for the second quarter of 2025. The increase in operating results is due to improved results at education, television broadcasting and other businesses, partially offset by declines at healthcare, manufacturing and automotive.
For the first six months of 2026, the Company reported net income attributable to common shares of $310.2 million ($71.04 per share), compared to $60.6 million ($13.81 per share) for the first six months of 2025.
Items included in the Company's net income for the first six months of 2026:
•$24.2 million of impairment charges and loss on sale related to KLG (after-tax impact of $24.8 million, or $5.67 per share);
•a $137.0 million settlement gain related to a retiree annuity pension purchase (after-tax impact of $101.3 million, or $23.21 per share);
•$7.9 million in non-operating expenses related to SIPs and a VRIP at education, television broadcasting and manufacturing divisions, other businesses and the corporate office (after-tax impact of $5.9 million, or $1.34 per share);
•$0.9 million in interest income to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $0.8 million, or $0.17 per share);
•$33.0 million in net gains on marketable equity securities (after-tax impact of $24.5 million, or $5.62 per share);
•$13.1 million in net earnings of affiliates whose operations are not managed by the Company (after-tax impact of $9.7 million, or $2.23 per share);
•net non-operating gains of $5.3 million from earnings, sales and impairments of equity and cost method investments (after-tax impact of $4.0 million, or $0.91 per share);
•a $69.6 million income tax benefit related to the KLG business ($15.93 per share); and
•$19.2 million in income tax expense recorded in connection with global minimum income tax obligations in non- U.S. jurisdictions ($4.39 per share).
Items included in the Company's net income for the first six months of 2025:
•$6.6 million in non-operating expenses related to a SIPs at other businesses and the education and television broadcasting divisions (after-tax impact of $4.9 million, or $1.12 per share);
•$67.6 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $53.9 million, or $12.26 per share);
•$32.3 million in net gains on marketable equity securities (after-tax impact of $24.0 million, or $5.46 per share);
•$12.3 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $9.2 million, or $2.09 per share); and
•a non-operating loss of $12.7 million from the impairment of a cost method investment (after-tax impact of $9.5 million, or $2.16 per share).
Revenue for the first six months of 2026 was $2,538.5 million, up 7% from $2,381.7 million in the first six months of 2025. Revenues increased at television broadcasting, healthcare, manufacturing, automotive and other businesses, partially offset by a slight decline at education. The Company reported operating income of $141.5 million for the first six months of 2026, compared to $120.2 million for the first six months of 2025. The increase in operating results is due to improved results at television broadcasting, manufacturing and other businesses, partially offset by declines at education, healthcare and automotive.
Division Results
Education
Education division revenue totaled $417.8 million for the second quarter of 2026, down 4% from $436.8 million for the same period of 2025. Kaplan reported operating income of $50.3 million for the second quarter of 2026, compared to $46.2 million for the second quarter of 2025.
For the first six months of 2026, education division revenue totaled $858.3 million, down slightly from $861.5 million for the same period of 2025. Kaplan reported operating income of $82.7 million for the first six months of 2026, compared to $86.2 million for the first six months of 2025.
A summary of Kaplan's operating results is as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| June 30 | June 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||
| Kaplan international | $ | 252,375 | $ | 272,171 | (7) | $ | 524,011 | $ | 533,427 | (2) | |||||||||||||||||||||||||
| Higher education | 86,293 | 84,738 | 2 | 178,696 | 173,225 | 3 | |||||||||||||||||||||||||||||
| Supplemental education | 79,476 | 80,161 | (1) | 156,340 | 155,564 | 0 | |||||||||||||||||||||||||||||
| Kaplan corporate and other | 284 | 23 | - | 555 | 35 | - | |||||||||||||||||||||||||||||
| Intersegment elimination | (620) | (280) | - | (1,315) | (707) | - | |||||||||||||||||||||||||||||
| $ | 417,808 | $ | 436,813 | (4) | $ | 858,287 | $ | 861,544 | 0 | ||||||||||||||||||||||||||
| Operating Income (Loss) | |||||||||||||||||||||||||||||||||||
| Kaplan international | $ | 32,863 | $ | 29,937 | 10 | $ | 64,250 | $ | 59,999 | 7 | |||||||||||||||||||||||||
| Higher education | 16,648 | 17,972 | (7) | 34,337 | 30,779 | 12 | |||||||||||||||||||||||||||||
| Supplemental education | 8,504 | 7,406 | 15 | 15,784 | 13,374 | 18 | |||||||||||||||||||||||||||||
| Kaplan corporate and other | (7,767) | (7,416) | (5) | (12,117) | (14,064) | 14 | |||||||||||||||||||||||||||||
| Amortization of intangible assets | (243) | (1,699) | 86 | (557) | (3,818) | 85 | |||||||||||||||||||||||||||||
| Impairment of goodwill and asset group held for sale | - | - | - | (19,029) | - | - | |||||||||||||||||||||||||||||
| Intersegment elimination | 271 | (15) | - | (10) | (52) | - | |||||||||||||||||||||||||||||
| $ | 50,276 | $ | 46,185 | 9 | $ | 82,658 | $ | 86,218 | (4) | ||||||||||||||||||||||||||
In the first quarter of 2026, the Company entered into an agreement to sell KLG included in Kaplan International and recorded a $19.0 million pre-tax impairment charge. Excluding the impairment charge, Kaplan's operating income was up significantly in the first six months of 2026. The transaction closed on May 1, 2026 and the Company recorded a $5.2 million non-operating pre-tax loss on the sale of the business in the second quarter of 2026.
Kaplan International includes postsecondary education and professional training businesses largely outside the United States (U.S.). Kaplan International revenue decreased 7% for the second quarter of 2026 (10% decrease on a constant currency basis) and decreased 2% for the first six months of 2026 (7% decrease on a constant currency basis) due to the sale of KLG and declines at Pathways, partially offset by increases at Singapore and UK Professional. Kaplan International reported operating income of $32.9 million in the second quarter of 2026, compared to $29.9 million in the second quarter of 2025. Operating income increased to $64.3 million in the first six months of 2026, compared to $60.0 million in the first six months of 2025. Operating results at Singapore, Kaplan Open Learning, UK Professional and Australia grew as a result of strong enrollment growth. The increase was partially offset by broad declines at the Pathways businesses in the United Kingdom (U.K.), Australia and the U.S.
Higher Education includes the results of Kaplan as a service provider to higher education institutions. Higher Education revenue increased 2% and 3% for the second quarter and first six months of 2026, respectively, due primarily to an increase in the Purdue Global fee recorded. Enrollments at Purdue Global, the largest institutional client, increased 5% for the first six months of 2026 compared to the first six months of 2025. For the second quarters and first six months of 2026 and 2025, Kaplan recorded the full fee from Purdue Global. The Company will continue to assess the fee it records from Purdue Global on a quarterly basis to make a determination as to whether to record all or part of the fee in the future and whether to adjust fee amounts recognized in earlier periods. Higher Education operating results declined in the second quarter of 2026, as operating results in the second quarter of 2025 included a portion of the Purdue Global full fee recognition related to the first quarter of 2025. Higher Education operating results improved in the first six months of 2026 due to an increase in the Purdue Global fee recorded, and a decline in higher education development costs.
Supplemental Education includes Kaplan's standardized test preparation programs and domestic professional and other continuing education businesses. Supplemental Education revenue was up slightly in the first half of 2026 due to growth in some of its professional preparation program offerings, offset by softness in publishing sales volume. Operating results increased in the second quarter and first six months of 2026 from improved margins.
Kaplan corporate and other represents unallocated expenses of Kaplan's corporate office, other minor businesses and certain shared activities.
In the second quarter of 2026, the Company offered a SIP to certain employees at Supplemental Education, Higher Education, Kaplan International and Kaplan corporate; $1.2 million in related non-operating pension expense was recorded in the second quarter of 2026. In the first quarter of 2026, the Company offered a SIP to certain employees at Kaplan International, Higher Education and Supplemental Education; $1.9 million in related non-operating pension expense was recorded in the first quarter of 2026. In the second quarter of 2025, the Company offered a SIP to certain employees at Higher Education and Supplemental Education; $0.7 million in related non-operating
pension expense was recorded in the second quarter of 2025. These programs were funded from the assets of the Company's pension plan.
Television Broadcasting
A summary of television broadcasting's operating results is as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| June 30 | June 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 109,630 | $ | 105,984 | 3 | $ | 221,183 | $ | 209,538 | 6 | |||||||||||||||||||||||||
| Operating Income | 30,483 | 27,940 | 9 | 64,426 | 52,338 | 23 | |||||||||||||||||||||||||||||
Graham Media Group owns seven television stations located in Houston, TX; Detroit, MI; Orlando, FL; San Antonio, TX; Jacksonville, FL; and Roanoke, VA, as well as SocialNewsDesk, a provider of social media management tools designed to connect newsrooms with their users.
Revenue at the television broadcasting division increased 3% to $109.6 million in the second quarter of 2026, from $106.0 million in the same period of 2025. The revenue increase is due to an $8.5 million increase in political advertising revenue, partially offset by a $2.3 million decrease in retransmission revenue and declines in local and digital advertising revenue. Operating income for the second quarter of 2026 was up 9% to $30.5 million, from $27.9 million in the same period of 2025, due to higher revenues.
Revenue at the television broadcasting division was up 6% to $221.2 million in the first six months of 2026, from $209.5 million in the same period of 2025. The revenue increase is due to a $15.8 million increase in political advertising revenue and increases from winter Olympics and Super Bowl advertising revenue at the Company's NBC affiliates in the first quarter of 2026, partially offset by a $5.2 million decrease in retransmission revenue. Operating income for the first six months of 2026 was up 23% to $64.4 million, from $52.3 million in the same period of 2025, due to higher revenues.
While per subscriber rates from cable, satellite and OTT providers have grown, overall cable and satellite subscribers are down due to cord cutting, resulting in retransmission revenue net of network fees in 2026 expected to decline compared with 2025, and this trend is expected to continue.
In the first and second quarters of 2026, the Company offered SIPs to certain employees at the television broadcasting division; $0.6 million and $0.3 million, respectively, in related non-operating pension expense was recorded. In the second quarter of 2025, the Company offered a SIP to certain employees at the television broadcasting division; $0.1 million in related non-operating pension expense was recorded. These programs were funded from the assets of the Company's pension plan.
In May 2026, the Company's television station in Orlando (WKMG) entered into a new network affiliation agreement with CBS that covers the period July 1, 2026 through December 31, 2027. In March 2026, the Company's television station in San Antonio (KSAT) entered into a new network affiliation agreement with ABC that covers the period April 1, 2026 through March 31, 2030.
Healthcare
Healthcare division revenue totaled $247.7 million for the second quarter of 2026, up 22% from $202.2 million for the same period of 2025. Healthcare reported operating income of $24.6 million for the second quarter of 2026, compared to $25.1 million for the second quarter of 2025.
Healthcare division revenue totaled $457.0 million for the first six months of 2026, up 22% from $376.0 million for the same period of 2025. Healthcare reported operating income of $42.0 million for the first six months of 2026, compared to $43.4 million for the same period of 2025.
A summary of healthcare division's operating results is as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
| June 30 | June 30 | |||||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||
| CSI | $ | 148,523 | $ | 113,415 | 31 | $ | 266,304 | $ | 203,663 | 31 | ||||||||||||||||||||||||||||
| Other Healthcare | 99,128 | 88,804 | 12 | 190,687 | 172,297 | 11 | ||||||||||||||||||||||||||||||||
| $ | 247,651 | $ | 202,219 | 22 | $ | 456,991 | $ | 375,960 | 22 | |||||||||||||||||||||||||||||
| Operating Income | ||||||||||||||||||||||||||||||||||||||
| CSI | $ | 12,498 | $ | 13,997 | (11) | $ | 18,810 | $ | 23,640 | (20) | ||||||||||||||||||||||||||||
| Other Healthcare | 12,112 | 11,100 | 9 | 23,226 | 19,774 | 17 | ||||||||||||||||||||||||||||||||
| $ | 24,610 | $ | 25,097 | (2) | $ | 42,036 | $ | 43,414 | (3) | |||||||||||||||||||||||||||||
The healthcare group provides nursing care and prescription services for patients receiving in-home infusion treatments through its 93.4% interest in CSI Pharmacy Holding Company, LLC (CSI). In August 2025, CSI purchased Pine Drug Holdings, LLC and was issued a California pharmacy license, with dispensing operations commencing late in the fourth quarter of 2025. CSI revenue increased 31% in both the second quarter and first six months of 2026 from continued expansion of treatment offerings and patient service areas. Operating results were down in the second quarter and first six months of 2026 due to various operational investments including expanding CSI's pharmacy facility locations; lower operating margins for certain products compared with the second quarter and first six months of 2025; and increased incentive compensation expense. The Company expects continued revenue growth at CSI for the remainder of 2026 compared with 2025.
Healthcare also includes Graham Healthcare Group (GHG), which provides home health and hospice services in seven states. In March 2026, GHG acquired Covenant Home Health of Havertown, PA, a home health provider in Eastern Pennsylvania. Healthcare also includes Clarus (provides call management SaaS-based solution for physician groups and hospitals), Impact Medical (an allergy, asthma and immunology physician practice), Skin Clique (a concierge provider of aesthetics products and services) and Surpass Behavioral Health (provides therapy for autism patients). Revenue increased in other healthcare businesses by 12% and 11% in the second quarter and first six months of 2026 from growth in home health and hospice services and each of the other healthcare businesses. Operating results improved at home health and hospice in the second quarter and first six months of 2026, partly due to a reduction in pension expense. Overall, operating results declined at the other four healthcare businesses in the second quarter and first six months of 2026.
The Company also holds interests in four home health and hospice joint ventures managed by GHG, whose results are included in equity in earnings of affiliates in the Company's Condensed Consolidated Statements of Operations. The Company recorded equity in earnings of $3.6 million and $3.4 million for the second quarters of 2026 and 2025, respectively, from these joint ventures. The Company recorded equity in earnings of $7.1 million and $6.6 million for the first six months of 2026 and 2025, respectively, from these joint ventures.
Manufacturing
A summary of manufacturing's operating results is as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| June 30 | June 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 133,280 | $ | 96,218 | 39 | $ | 258,314 | $ | 194,223 | 33 | |||||||||||||||||||||||||
|
Operating Income
|
7,101 | 7,566 | (6) | 15,101 | 13,046 | 16 | |||||||||||||||||||||||||||||
Manufacturing includes four businesses: Hoover, a supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications, and aluminum cladding products for the non-residential market; Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies; Joyce, a manufacturer of screw jacks and other linear motion systems; and Forney, a global supplier of products and systems that control and monitor combustion processes in electric utility and industrial applications. On July 15, 2025, Hoover acquired Arconic Architectural Products, LLC, a wholly-owned subsidiary of Arconic Corporation (operating as Hoover Architectural Solutions), which manufactures aluminum cladding products and operates within the broader non-residential materials space from its facility in Eastman, GA. A significant portion of the purchase price was funded by the Company's assumption of $107.5 million in net pension obligations.
Manufacturing revenues increased 39% and 33% in the second quarter and first six months of 2026, respectively, due to increased revenues at Hoover, Joyce and Forney, partially offset by lower revenues at Dekko. The revenue increase at Hoover is due largely to the Hoover Architectural Solutions business acquisition. Excluding the acquisition, overall volumes increased in the second quarter and first six months of 2026. Hoover results included
wood gains on inventory sales in both the second quarter and first six months of 2026 and 2025. Manufacturing operating results declined in the second quarter of 2026 due to an overall decline at Hoover from increased intangible asset amortization and transition costs related to the Arconic acquisition, along with declines at Forney and Dekko, partially offset by significant growth at Joyce. Manufacturing operating results increased in the first six months of 2026 due to significant growth at Joyce, and improved results at Dekko. The increase was partially offset by an overall decline at Hoover from increased intangible asset amortization and transition costs related to the Arconic acquisition, and a modest decline at Forney.
In the second quarter of 2026, the Company offered a VRIP to certain employees at Dekko; $2.0 million in related non-operating pension expense was recorded. In the first quarter of 2026, the Company offered a SIP to certain employees at Dekko and Joyce; $0.2 million in related non-operating pension expense was recorded. These programs were funded from the assets of the Company's pension plan.
Automotive
A summary of automotive's operating results is as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| June 30 | June 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 301,352 | $ | 285,572 | 6 | $ | 568,976 | $ | 566,563 | 0 | |||||||||||||||||||||||||
| Operating Income | 8,065 | 9,293 | (13) | 13,373 | 15,785 | (15) | |||||||||||||||||||||||||||||
Automotive includes eight automotive dealerships in the Washington, DC metropolitan area and Richmond, VA: Ourisman Lexus of Rockville, Ourisman Honda of Tysons Corner, Ourisman Ford of Manassas, Toyota of Woodbridge, Ourisman Chrysler-Dodge-Jeep-Ram of Woodbridge, Ourisman Toyota of Richmond, and Ourisman Kia of Bethesda. In addition, on October 21, 2025, the Company acquired a Honda automotive dealership in Woodbridge, VA, including the real property for the dealership operations. Automotive also includes Roda, which provides valet automotive repair services in the Washington, DC metropolitan area. Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships, and his team of industry professionals operate and manage the dealerships; the Company holds a 90% stake.
The Company ceased operations of the Ourisman Jeep of Bethesda dealership, which was closed in early September 2025.
Revenues for the second quarter of 2026 increased 6% due partly to increased revenues from the Honda of Woodbridge dealership acquisition, offset by the closure of the Ourisman Jeep of Bethesda dealership in September 2025. Excluding these dealerships, revenues were down mostly from declines in used vehicle sales, partially offset by sales growth for new vehicles and services and parts. Operating results were down in the second quarter of 2026 due largely to lower gross profits on new and used vehicles, partially offset by earnings from the Honda of Woodbridge dealership acquisition, the closure of the Ourisman Jeep of Bethesda dealership, and higher overall gross profits on services and parts.
Revenues for the first six months of 2026 increased slightly due partly to increased revenues from the Honda of Woodbridge dealership acquisition, offset by the closure of the Ourisman Jeep of Bethesda dealership in September 2025. Excluding these dealerships, revenues were down mostly from declines in new and used vehicle sales, partially offset by sales growth for services and parts. Operating results were down in the first six months of 2026 due largely to lower gross profits on new and used vehicles, partially offset by earnings from the Honda of Woodbridge dealership acquisition, the closure of the Ourisman Jeep of Bethesda dealership, and higher overall gross profits on services and parts.
Other Businesses
A summary of revenue by category for other businesses:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||||||||
| June 30 | % | June 30 | % | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||||||||||||||
|
Specialty (1)
|
$ | 45,747 | $ | 42,750 | 7 | $ | 84,825 | $ | 81,513 | 4 | |||||||||||||||||||||||||
|
Retail (2)
|
30,588 | 27,257 | 12 | 57,685 | 53,379 | 8 | |||||||||||||||||||||||||||||
|
Media (3)
|
16,504 | 18,963 | (13) | 32,256 | 38,975 | (17) | |||||||||||||||||||||||||||||
| $ | 92,839 | $ | 88,970 | 4 | $ | 174,766 | $ | 173,867 | 1 | ||||||||||||||||||||||||||
|
(1)
|
Includes Clyde's Restaurant Group (CRG), Decile and Supporting Cast
|
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|
(2)
|
Includes Framebridge, Saatchi Art and Society6
|
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|
(3)
|
Includes Slate, Foreign Policy, Code3, World of Good Brands (WGB) (sold in 2025) and City Cast
|
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Overall, revenue from other businesses increased 4% and 1% in the second quarter and first six months of 2026. Specialty revenue increased due to revenue growth at CRG and Supporting Cast. Retail revenue increased due to revenue growth at Framebridge and Saatchi Art, partially offset by lower revenue at Society6. Media revenue declined due to the sale of WGB and lower revenue at Slate and Code3, partially offset by revenue growth at Foreign Policy and City Cast.
Overall, operating losses at other businesses were down in the second quarter and first six months of 2026, due to a reduction of losses from the sale of WGB and improved results at Society6, Saatchi Art, Decile, Code3 and Supporting Cast, partially offset by declines at CRG, Framebridge, Slate, City Cast and Foreign Policy.
Clyde's Restaurant Group
CRG owns and operates 14 restaurants and entertainment venues in the Washington, DC metropolitan area, including Old Ebbitt Grill and The Hamilton. Revenue was up in the second quarter and first six months of 2026. CRG reported an operating profit for the second quarter and first six months of 2026 and 2025, with operating results down for the first half of 2026 due to severe weather conditions and the temporary closure of two restaurants and related repair work that was completed early in the first quarter of 2026.
In the second quarter of 2026, operations commenced under a Clyde's licensing agreement at Dulles International Airport. CRG plans to open a new restaurant in Reston, VA in the fourth quarter of 2026.
Framebridge
Framebridge is a custom framing service company, headquartered in the Washington, DC metropolitan area, with 48 retail locations, and four manufacturing facilities in Kentucky, Virginia and Nevada (opened in the third quarter of 2025). In the first six months of 2026, Framebridge opened four new retail stores. Framebridge plans to open additional stores and manufacturing facilities in the second half of 2026, and continues to actively explore other opportunities for further store and manufacturing expansion.
Revenues grew in the second quarter and first six months of 2026 due to an increase in retail revenue from same-store sales growth and operating additional retail stores compared to the same periods in 2025, and a modest increase in online revenues. Framebridge is an investment stage business and reported significant operating losses in the first six months of 2026 and 2025. Framebridge operating results include ongoing expansion investments from new retail store openings and manufacturing facilities.
In the first quarter of 2026, the Company offered a SIP to certain employees at Framebridge; $0.2 million in related non-operating pension expense was recorded. This program was funded from the assets of the Company's pension plan.
Other
Other businesses also include Code3, a performance marketing agency focused on driving performance for brands though three core elements of digital success: media, creative and commerce; Slate and Foreign Policy, which publish online and print magazines and websites; Saatchi Art and Society6, which offer art and designs of various consumer products; and three investment stage businesses, Decile, City Cast and Supporting Cast. Foreign Policy, Saatchi Art, Supporting Cast and City Cast reported revenue growth in the first six months of 2026, while Society6, Slate, Code3 and Decile reported revenue declines. Losses from City Cast, Society6, Slate, Decile, Saatchi Art and Code3 in the first six months of 2026 adversely affected operating results, while Foreign Policy reported an operating profit.
In the second quarter of 2026, the Company offered a SIP to certain employees at Code3 and Slate; $0.3 million in related non-operating pension expense was recorded. In the first quarter of 2026, the Company offered SIPs to certain employees at Slate and Code3; $1.0 million in related non-operating pension expense was recorded. In the second quarter of 2025, the Company offered SIPs to certain employees at Code3, Saatchi Art, Society6, WGB and Decile; $5.2 million in related non-operating pension expense was recorded. In the first quarter of 2025, WGB offered a SIP; $0.6 million in related non-operating pension expense was recorded. These programs were funded from the assets of the Company's pension plan.
Corporate Office
Corporate office includes the expenses of the Company's corporate office and certain continuing obligations related to prior business dispositions. Corporate expenses were higher in the first half of 2026 due largely to increased legal and tax professional services costs.
Equity in Earnings (Losses) of Affiliates
At June 30, 2026, the Company held an approximate 25% interest in Intersection, a company that provides digital marketing and advertising services and products for cities, transit systems, airports, and other public and private spaces; and a 41.4% interest on a fully diluted basis in Realm. The Company also holds interests in several other affiliates, including a number of home health and hospice joint ventures managed by GHG and a joint venture managed by Kaplan. Overall, the Company recorded equity in losses of affiliates of $19.9 million for the second quarter of 2026, compared to earnings of $3.1 million for the second quarter of 2025. These amounts include $17.9 million and $0.4 million in net losses for the second quarter of 2026 and 2025, respectively, from affiliates whose operations are not managed by the Company. The 2026 amount also included a $5.8 million impairment loss on the Company's investment in Realm.
The Company recorded equity in earnings of affiliates of $15.0 million for the first six months of 2026, compared to losses of $5.3 million for the first six months of 2025. These amounts include $13.1 million in net earnings and $12.3 million in net losses for the first six months of 2026 and 2025, respectively, from affiliates whose operations are not managed by the Company. The 2026 amount also included a $5.8 million impairment loss on the Company's investment in Realm.
Net Interest Expense and Related Balances
On November 24, 2025, the Company issued $500 million of 5.625% unsecured eight-year fixed-rate notes due December 1, 2033 (the Notes). Interest is paid semi-annually on June 1 and December 1. Also on November 24, 2025, the Company used the net proceeds from the sale of the Notes, together with the borrowings under the revolving credit agreement, to (i) redeem the $400 million of 5.75% unsecured notes due June 1, 2026, (ii) refinance outstanding revolving loans under the existing revolving credit facility, and (iii) repay all amounts outstanding under the Company's existing $150 million term loan. On October 21, 2025, the automotive subsidiary borrowed $38.7 million under the delayed draw term loan to finance the acquisition of a Honda automotive dealership, including the real property for the dealership operations.
The Company incurred net interest expense of $15.3 million and $29.0 million for the second quarter and first six months of 2026, compared to $15.8 million and $95.6 million for the second quarter and first six months of 2025.
The Company recorded a reduction in interest expense of $0.2 million and $0.9 million in the second quarter and first six months of 2026, respectively, compared to interest expense of $1.2 million and $67.6 million in the second quarter and first six months of 2025, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. The significant adjustment recorded in the first quarter of 2025 is largely related to a substantial increase in the estimated fair value of CSI. On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest for a total of $205 million, which consisted of approximately $186.25 million in cash and $18.75 million in Graham Holdings Company Class B common stock.
Excluding these adjustments, the increase in net interest expense relates primarily to higher debt balances.
At June 30, 2026, the Company had $900.4 million in borrowings outstanding at an average interest rate of 5.7%, and cash, marketable equity securities and other investments of $1,297.4 million. At June 30, 2026, the Company had $231.2 million outstanding on its $400 million revolving credit facility.
Non-operating Pension and Postretirement Benefit Income, net
The Company recorded net non-operating pension and postretirement benefit income of $169.6 million and $200.7 million for the second quarter and first six months of 2026, compared to $28.6 million and $63.2 million for the second quarter and first six months of 2025.
In the second quarter of 2026, the Company recorded a pre-tax, noncash settlement gain of $137.0 million in connection with the purchase of an irrevocable group annuity contract from an insurance company.
Also in the second quarter of 2026, the Company recorded $3.8 million in expenses related to non-operating SIPs at Kaplan, the television broadcasting division, and other businesses and a VRIP at manufacturing. In the first quarter of 2026, the Company recorded $4.1 million in expenses related to non-operating SIPs at Kaplan, the television broadcasting division, manufacturing, other businesses and the Corporate office.
In the second quarter of 2025, the Company recorded $6.0 million in expenses related to non-operating SIPs at the education and television broadcasting divisions and other businesses. In the first quarter of 2025, the Company recorded $0.6 million in expenses related to non-operating SIPs at other businesses.
Gain (Loss) on Marketable Equity Securities, net
Overall, the Company recognized $101.9 million and $33.0 million in net gains on marketable equity securities in the second quarter and first six months of 2026, compared to $11.5 million in net losses and $32.3 million in net gains on marketable equity securities in the second quarter and first six months of 2025.
Other Non-Operating Expense
The Company recorded total other non-operating expense, net, of $2.5 million for the second quarter of 2026, compared to $16.5 million for the second quarter of 2025. The 2026 amounts included a $5.2 million loss on the sale of KLG, partially offset by $0.7 million in foreign currency gains and other items. The 2025 amounts included a $12.7 million impairment on a cost method investment and $4.5 million in foreign currency losses; partially offset by $0.4 million gain on sale of businesses and other items.
The Company recorded total other non-operating expense, net, of $3.0 million for the first six months of 2026, compared to $20.5 million for the first six months of 2025. The 2026 amounts included a $5.2 million loss on the sale of KLG and $0.6 million in foreign currency losses, partially offset by a $0.5 million gain on sale of a cost method investment and other items. The 2025 amounts included a $12.7 million impairment on a cost method investment and $8.9 million in foreign currency losses; partially offset by $0.4 million gain on sale of businesses and other items.
Provision for Income Taxes
The Company's effective tax rate for the first six months of 2026 and 2025 was 12.6% and 29.8%, respectively.
The Company recognized a U.S. income tax benefit of $69.6 million during the six months ended June 30, 2026, in connection with the restructuring and sale of the KLG business. As a result of this significant U.S. income tax benefit, the Company accrued a non-U.S. global minimum corporate top-up income tax expense of $19.2 million in the second quarter of 2026. This accrual relates to non-U.S. jurisdictions that have not yet enacted legislation adopting recent guidance from the Organization for Economic Co-operation and Development (OECD), which would exempt U.S. parent multinational groups from Pillar Two top-up tax on their U.S. source income. The enactment of legislation in the U.K. and other jurisdictions would have a favorable impact on the Company's income tax provision and could result in a complete reversal of the $19.2 million accrued amount without payment.
The Company's effective tax rate for the first six months of 2025 was based on the estimated full year 2025 effective tax rate, which includes the adverse impact of the permanent difference related to the interest expense recorded to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG.
Earnings Per Share
The calculation of diluted earnings per share for the second quarter and first six months of 2026 was based on 4,309,444 and 4,342,014 weighted average shares outstanding, respectively, compared to 4,372,639 and 4,365,534 for the second quarter and first six months of 2025. At June 30, 2026, there were 4,251,268 shares outstanding. On September 12, 2024, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 352,011 shares as of June 30, 2026.
Financial Condition: Liquidity and Capital Resources
The Company considers the following when assessing its liquidity and capital resources:
| As of | |||||||||||
| (In thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| Cash and cash equivalents | $ | 156,766 | $ | 266,988 | |||||||
| Restricted cash | 51,342 | 44,417 | |||||||||
| Investments in marketable equity securities and other investments | 1,089,301 | 1,088,970 | |||||||||
| Total debt | 900,373 | 880,756 | |||||||||
Cash generated by operations is the Company's primary source of liquidity. The Company maintains investments in a portfolio of marketable equity securities, which is considered when assessing the Company's sources of liquidity. An additional source of liquidity includes the undrawn portion of the Company's $400 million revolving credit facility, amounting to $168.8 million at June 30, 2026.
During the first six months of 2026, the Company's cash and cash equivalents decreased by $110.2 million, due to share repurchases; capital expenditures; business acquisitions and dispositions; dividend payments; and the redemption of noncontrolling interests. The decrease was partially offset by cash generated from operations, proceeds from the net sale of marketable equity securities and the repayment of a related party loan. In the first six months of 2026, the Company's borrowings increased by $19.6 million, primarily due to increases in other debt and additional borrowings under the revolving credit facility, partially offset by repayments under the commercial notes at the automotive subsidiary.
As of June 30, 2026 and December 31, 2025, the Company had money market investments of $7.3 million and $5.3 million, that are included in cash and cash equivalents. At June 30, 2026, the Company held approximately $76 million in cash and cash equivalents in businesses domiciled outside the U.S., of which approximately $6 million is not available for immediate use in operations or for distribution. Additionally, Kaplan's business operations outside the U.S. retain cash balances to support ongoing working capital requirements, capital expenditures, and regulatory requirements. As a result, the Company considers a significant portion of the cash and cash equivalents balance held outside the U.S. as not readily available for use in U.S. operations.
At June 30, 2026, the fair value of the Company's investments in marketable equity securities was $1,083.1 million, which includes investments in the common stock of five publicly traded companies. During the first six months of 2026, the Company purchased $18.7 million of marketable equity securities and sold marketable equity securities that generated proceeds of $50.0 million. At June 30, 2026, the net unrealized gain related to the Company's investments totaled $812.1 million.
The Company had working capital of $1,049.8 million and $1,042.5 million at June 30, 2026 and December 31, 2025, respectively. The Company maintains working capital levels consistent with its underlying business requirements and consistently generates cash from operations in excess of required interest or principal payments.
At June 30, 2026 and December 31, 2025, the Company had borrowings outstanding of $900.4 million and $880.8 million, respectively. The Company's borrowings at June 30, 2026 were mostly from $500.0 million of 5.625% unsecured notes due December 1, 2033, $231.2 million in outstanding borrowings under the Company's revolving credit facility, and real estate and capital term loans of $149.6 million at the automotive subsidiary. The Company's borrowings at December 31, 2025 were mostly from $500.0 million of 5.625% unsecured notes due December 1, 2033, $222.5 million in outstanding borrowings under the Company's revolving credit facility, and real estate and capital term loans of $155.9 million at the automotive subsidiary.
On November 24, 2025, the Company issued $500 million of 5.625% unsecured eight-year fixed-rate notes due December 1, 2033. Interest is paid semi-annually on June 1 and December 1. Also on November 24, 2025, the Company used the net proceeds from the sale of the notes, together with the borrowings under the revolving credit agreement, to (i) redeem the $400 million of 5.75% unsecured notes due June 1, 2026, (ii) refinance outstanding revolving loans under the existing revolving credit facility, and (iii) repay all amounts outstanding under the Company's existing $150 million term loan.
In combination with the issuance of the Notes, the Company amended and restated the Second Amended and Restated Five Year Credit Agreement, dated as of May 3, 2022, to, among other things, (i) increase the Company's borrowing capacity by replacing the existing revolving commitments with a new revolving credit facility in the aggregate principal amount of $400 million, (ii) extend the maturity of the facility to November 24, 2030, and (iii) increase the letter of credit sublimit to $40 million.
On October 21, 2025, the automotive subsidiary borrowed $38.7 million under the delayed draw term loan to finance the acquisition of a Honda automotive dealership, including the real property for the dealership operations.
During the six months ended June 30, 2026 and 2025, the Company had average borrowings outstanding of approximately $895.5 million and $828.7 million, respectively, at average annual interest rates of approximately 5.7% and 6.0%, respectively. During the six months ended June 30, 2026 and 2025, the Company incurred net interest expense of $29.0 million and $95.6 million, respectively. Included in the net interest expense for the six months ended June 30, 2026 and 2025 is a $0.9 million reduction in interest expense and $67.6 million of interest expense, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest (see Notes 7 and 8).
On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest related to GHC One, including CSI, for a total of $205 million, which consisted of approximately $186.25 million in cash and $18.75 million in Graham Holdings Company Class B common stock.
The settlement agreement resulted in a $66.2 million increase to the mandatorily redeemable noncontrolling interest obligation, which the Company recorded as interest expense in the first quarter of 2025. The remaining mandatorily redeemable noncontrolling interest obligation related to GHC One and GHC Two was $7.4 million at June 30, 2026.
On June 15, 2026, Standard & Poor's affirmed the Company's credit rating and maintained the outlook as Stable. On November 12, 2025, Moody's affirmed the Company's credit rating and maintained the outlook as Stable.
The Company's current credit ratings are as follows:
| Moody's | Standard & Poor's | ||||||||||
| Long-term | Ba1 | BB | |||||||||
| Outlook | Stable | Stable | |||||||||
The Company expects to fund its estimated capital needs primarily through existing cash balances and internally generated funds, and, as needed, from borrowings under its revolving credit facility. As of June 30, 2026, the Company had $231.2 million outstanding under the $400 million revolving credit facility. In management's opinion, the Company will have sufficient financial resources to meet its business requirements in the next 12 months, including working capital requirements, capital expenditures, interest payments, potential acquisitions and strategic investments, dividends and stock repurchases.
In summary, the Company's cash flows for each period were as follows:
|
Six Months Ended June 30 |
|||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Net cash provided by operating activities | $ | 120,410 | $ | 140,810 | |||||||
| Net cash used in investing activities | (48,840) | (31,317) | |||||||||
| Net cash used in financing activities | (172,462) | (188,512) | |||||||||
| Effect of currency exchange rate change | (2,405) | 10,514 | |||||||||
| Net decrease in cash and cash equivalents and restricted cash | $ | (103,297) | $ | (68,505) | |||||||
Operating Activities. Cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. The Company's net cash flow provided by operating activities were as follows:
|
Six Months Ended June 30 |
|||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Net Income | $ | 313,127 | $ | 66,144 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and goodwill and other asset impairments | 67,737 | 55,271 | |||||||||
| Amortization of lease right-of-use asset | 29,343 | 28,729 | |||||||||
| Net pension benefit, settlement gain and early retirement and special separation benefit expense | (179,035) | (40,985) | |||||||||
| Other non-cash activities | 17,228 | 9,287 | |||||||||
| Change in operating assets and liabilities | (127,990) | 22,364 | |||||||||
| Net Cash Provided by Operating Activities | $ | 120,410 | $ | 140,810 | |||||||
Net cash provided by operating activities consists primarily of cash receipts from customers, less disbursements for costs, benefits, income taxes, interest and other expenses.
For the first six months of 2026 compared to the first six months of 2025, the decrease in net cash provided by operating activities is primarily driven by changes in operating assets and liabilities, offset by higher net income, net of non-cash adjustments. Changes in operating assets and liabilities were driven by higher purchases of inventory and a significant decrease in the interest expense related to the mandatorily redeemable noncontrolling interest, offset by an increase in customer collections.
Investing Activities. The Company's net cash flow used in investing activities were as follows:
|
Six Months Ended June 30 |
|||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Net proceeds from sales (purchases) of marketable equity securities | $ | 31,298 | $ | (4,823) | |||||||
| Net (payments on) proceeds from disposition of businesses, property, plant and equipment and investments | (40,050) | 7,348 | |||||||||
| Purchases of property, plant and equipment | (39,233) | (32,285) | |||||||||
| Investments in certain businesses, net of cash acquired | (18,237) | (2,523) | |||||||||
| Proceeds from repayment of related party loan | 16,273 | - | |||||||||
| Other | 1,109 | 966 | |||||||||
| Net Cash Used in Investing Activities | $ | (48,840) | $ | (31,317) | |||||||
Net proceeds from sales (purchases) of marketable equity securities. During the first six months of 2026, the Company sold marketable equity securities that generated proceeds of $50.0 million. There were no sales of marketable equity securities during the first six months of 2025. The Company purchased $18.7 million and $4.8 million of marketable equity securities during the first six months of 2026 and 2025, respectively.
Disposition of Businesses. In May 2026, Kaplan completed the sale of the KLG business, which is included in Kaplan international. KLG comprised Kaplan International Languages, Alpadia Language Schools, Azurlingua and English as a second language (ESL) Education. In April 2025, Kaplan completed the sale of a small business, BridgeU Limited, which was included in Kaplan International. In the first half of 2025, WGB completed the sale of various websites and related businesses that made up the WGB operations. All remaining WGB operations were substantially shut down by the end of the third quarter of 2025.
Capital Expenditures. The amounts reflected in the Company's Condensed Consolidated Statements of Cash Flows are based on cash payments made during the relevant periods, whereas the Company's capital expenditures for the first six months of 2026 and 2025 disclosed in Note 16 to the Condensed Consolidated Financial Statements include assets acquired during the period. The Company estimates that its capital expenditures will be in the range of $90 million to $100 million in 2026.
Acquisitions. In March 2026, the Company acquired one small business which is included in other healthcare businesses. In June 2025, Kaplan acquired one small business which is included in its supplemental education division.
Proceeds from repayment of related party loan. In the second quarter of 2026, the Company received $16.3 million from Purdue Global related to the advance of $20.0 million during the initial KU transaction.
Financing Activities. The Company's net cash flow used in financing activities were as follows:
|
Six Months Ended June 30 |
|||||||||||
| (In thousands) | 2026 | 2025 | |||||||||
| Common shares repurchased | $ | (121,985) | $ | (3,468) | |||||||
| Purchase of noncontrolling interests | (17,340) | - | |||||||||
| Dividends paid | (16,311) | (15,660) | |||||||||
| Repayments of borrowings | (15,194) | (13,172) | |||||||||
| Net borrowing under revolving credit facility | 13,092 | 75,000 | |||||||||
| Net repayments of vehicle floor plan payable | (1,863) | (32,776) | |||||||||
| Distributions paid to noncontrolling interests | (4,355) | (190,319) | |||||||||
| Other | (8,506) | (8,117) | |||||||||
| Net Cash Used in Financing Activities | $ | (172,462) | $ | (188,512) | |||||||
Common Stock Repurchases. During the first six months of 2026, the Company purchased a total of 110,471 shares of its Class B common stock at a cost of approximately $123.2 million, including commissions and accrued excise tax of $1.2 million. On September 12, 2024, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock. The Company did not announce a ceiling price or time limit for the purchases. At June 30, 2026, the Company had remaining authorization from the Board of Directors to purchase up to 352,011 shares of Class B common stock.
Transactions with minority shareholders. In March 2026, the Company acquired some of the minority-owned shares of CSI for a total amount of $41.0 million. The Company paid cash of $16.4 million and entered into promissory notes with the minority owners for the remaining $24.6 million. In January 2026, pursuant to the exercise of a put right, the Company purchased some of the minority-owned interest of Clarus for $1.0 million.
On February 25, 2025, the Company and a group of minority shareholders entered into an agreement to settle a significant portion of the mandatorily redeemable noncontrolling interest related to GHC One, including CSI, for a total of $205 million, which consisted of approximately $186.25 million in cash and $18.75 million in Graham Holdings Company Class B common stock.
Dividends. The quarterly dividend rate per share was $1.88 and $1.80 for the first six months of 2026 and 2025, respectively. The Company expects to pay a dividend of $7.52 per share in 2026.
Borrowings and Vehicle Floor Plan Payable. In the first six months of 2026, the Company repaid amounts borrowed under the commercial notes at the automotive subsidiary and other debt and made additional borrowings on the $400 million revolving credit facility. In the first six months of 2025, the Company made additional borrowings on the $300 million revolving credit facility and repaid amounts borrowed under the term loan and commercial notes at the automotive subsidiary. In the first six months of 2026 and 2025, the Company used vehicle floor plan financing to fund the purchase of new, used and service loaner vehicles at its automotive subsidiary. The repayments of vehicle floor plan payable fluctuates with changes in the amount of vehicle inventory held by the automotive dealerships.
There were no other significant changes to the Company's contractual obligations or other commercial commitments from those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Forward-Looking Statements
All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this report, in the Company's Annual Report on Form 10-K and in the Company's 2025 Annual Report to Stockholders, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by the Company's management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ from those stated, including, without limitation, comments about expectations related to acquisitions or dispositions or related business activities, the Company's business strategies and objectives, the prospects for growth in the Company's various business operations, the Company's future financial performance, and the risks and uncertainties described in Item 1A of the Company's Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available.
Graham Holdings Company published this content on July 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 30, 2026 at 12:26 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]