McGraw Hill, Inc. Reports Strong Fiscal First Quarter 2027 Results Exceeding Expectations (Form 8-K)

McGraw Hill, Inc. Reports Strong Fiscal First Quarter 2027 Results Exceeding Expectations

Enters Peak Selling Season with Momentum Amid Growing Revenue, Re-Occurring Revenue and Digital Revenue While Expanding Margins and Net Income

COLUMBUS, Ohio-(BUSINESS WIRE)- August 13, 2026-McGraw Hill, Inc. (NYSE: MH) ("McGraw Hill" or the "Company"), a leading global provider of education solutions for preK-12, higher education and professional learning, today announced financial results for the fiscal first quarter 2027 ended June 30, 2026.

Key Fiscal First Quarter 2027 Financial Highlights

•Total revenue of $549.9 million, an increase of 2.6% year-over-year, driven by strong execution in Higher Education and K-12 segments.

•Re-occurring revenue of $425.6 million, an increase of 9.8% year-over-year, representing 77% of total revenue.

•Digital revenue of $353.5 million, an increase of 8.8% year-over-year, underscoring the strength of the Company's technology-based solutions, which are deeply embedded in the learning experience.

•Remaining performance obligation (RPO) of $1,522.2 million as of June 30, 2026, demonstrating predictability and visibility into future revenue growth.

•GAAP gross profit of $439.2 million, representing a GAAP gross profit margin of 79.9%, an increase of 290 basis points versus prior year.

•GAAP net income of $57.9 million, compared to $0.5 million in the prior-year period.

•Adjusted EBITDA(1) of $207.0 million, representing an Adjusted EBITDA margin(1) of 37.7%, an increase of 192 basis points versus prior year.

•Continued commitment to gross debt reduction, progressing toward the Company's 2.0-2.5x net leverage target. In July 2026, Moody's Ratings upgraded the Company's credit ratings.

"McGraw Hill's strong start to fiscal year 2027 reflects the strength of our strategy and the trust that millions of educators and institutions place in us to deliver successful learning outcomes," said Philip Moyer, President, Chief Executive Officer of the Company and a member of the Company's Board of Directors. "This quarter, we exceeded our expectations while building positive momentum as we prepare for the most important quarter of our fiscal year."

Mr. Moyer added "AI was a contributor to the momentum we're seeing across revenue growth, margin expansion, price realization, and market share gains. AI represents a genuine tailwind for our business, and our agentic strategy continues to progress, representing an opportunity for meaningful TAM expansion ahead. By harnessing this technology, it will augment our current solutions and reinforce our ability to deliver precision education, the right content at the right moment, to our more than 100 million active curriculum licenses."

"Fiscal first quarter 2027 represents a solid start to our fiscal year, with revenue, re-occurring revenue, and Adjusted EBITDA all coming in above our expectations," said Bob Sallmann, McGraw Hill's Executive Vice President, Chief Financial Officer. "Re-occurring revenue and Adjusted EBITDA margins continue to grow, reflecting the durability of our model and cost discipline. Our margins are best-in-class among education peers, underscoring the strength and differentiation of our business. As we enter our peak selling season, our leading indicators, including our new K-12 ELA program delivering win rates above target, early stages of a multi-year K-12 curriculum adoption cycle, and continued Higher Education market share gains, are strengthening considerably. We believe that we are well positioned to deliver accelerating revenue growth and continued margin expansion in fiscal year 2027 and beyond."

Fiscal First Quarter 2027 Strategic Highlights

•Served more than 7.5 million active users across eight live AI learning tools, with three additional launches planned for this fiscal year.

1

•Generated 63 million AI Reader learning interactions across approximately 2.6 million students since inception through July 2026, accelerating from approximately 47 million interactions and approximately 2.2 million students in fiscal year 2026.

•Expanded the Company's Evergreen delivery model in Higher Education, driving share gains and improving the customer experience and retention.

•Advanced the Company's agentic AI strategy at scale, with pilot opportunities progressing, including industries outside of education.

•Broadened the Company's literacy portfolio with ROAR®, the Rapid Online Assessment of Reading, the only research-backed dyslexia screener for K-12, subsequent to the fiscal first quarter. Exclusive integration will bring assessment developed at the Stanford Graduate School of Education, Reading and Dyslexia Research Program to more K-12 classrooms.

Fiscal First Quarter 2027 Financial Highlights

						Three Months Ended June 30,
($ in thousands)						2026						2025
Revenue						$	549,903					$	535,710
Cost of sales (excluding depreciation and amortization)						$	110,704					$	123,384
Operating and administrative expenses						$	255,069					$	241,549
Net income (loss)						$	57,860					$	502
Adjusted EBITDA (1)						$	207,046					$	191,416
Net income (loss) margin						10.5		%				0.1		%
Adjusted EBITDA Margin (1)						37.7		%				35.7		%
Adjusted net income (loss) (1)						$	112,753					$	292

Fiscal First Quarter 2027 Segment Highlights

Higher Education

•Revenue totaled $199.8 million, an increase of 9.6% year-over-year, supported by market share gains, price realization and increases in enrollment.

•Re-occurring revenue totaled $182.1 million, an increase of 14.1% year-over-year.

•Continued Higher Education market share gains, including ~5 points of market share gained over the past four fiscal years from traditional competitors, according to MPI.

•Growth driven by continued Inclusive Access momentum and deeper campus penetration; Evergreen delivery model anchors renewal base and frees sales capacity to focus primarily on taking market share.

K-12

•Revenue totaled $274.4 million, up 1.3% year-over-year driven by the durability of multi-year contracts and capture rates in ELA and Science.

•Re-occurring revenue totaled $196.6 million, an increase of 7.1% year-over-year.

•Robust early capture rates for Emerge, Summit and Soar; 44 states now have a Science of Reading policy or regulation in place, covering 86% of U.S. K-5 public school enrollment.

•In July, the Company's California ELA programs were recommended for approval by state reviewers, ahead of the state's approved vendor list to be released later in calendar year 2026.

•In August, Florida approved the Company's Math program ahead of the state's upcoming adoption beginning in fiscal year 2028.

Global Professional and International

•Global Professional delivered 6.3% re-occurring revenue growth year-over-year, fueled by wins for the medical solutions portfolio, including AI-driven Clinical Reasoning, across Osteopathic Medicine, Physician Assistant, and Nurse Practitioner programs worldwide.

•International revenue was $45.2 million, with delayed Middle East K-12 shipments being fulfilled, and strong momentum in Latin America, offsetting Canadian enrollment headwinds, positioning the segment for growth in fiscal year 2027.

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Fiscal Year 2027 Guidance

We are re-affirming our fiscal year 2027 guidance, which is included below. This fiscal year 2027 guidance is forward-looking and is based on the Company's current expectations. Actual results may differ materially from what is indicated below.

						Fiscal Year 2027 Guidance
($ in millions)						Low						High
Revenue						$	2,115					$	2,175
Re-occurring Revenue						1,587						1,627
Adjusted EBITDA (1)						750						790

Earnings Conference Call and Webcast

Today, August 13, 2026, at 8:30 a.m. ET, McGraw Hill will host a conference call via webcast to review fiscal first quarter 2027 results and provide a business update. The webcast will be hosted by Philip Moyer, President and Chief Executive Officer, and Bob Sallmann, Executive Vice President and Chief Financial Officer, and will conclude with a question-and-answer session.

To access the live webcast or to view a replay, visit the Company's investor relations website at https://investors.mheducation.com/

The live question and answer portion of the call can be accessed by registering online at the Event Registration Page: https://events.q4inc.com/analyst/296224850?pwd=wJNVPA4x at which time registrants will receive dial-in information as well as a conference ID. Registration can be completed in advance of the conference call.

About McGraw Hill

McGraw Hill (NYSE: MH) is a leading global provider of education solutions for preK-12, higher education and professional learning, supporting the evolving needs of millions of educators and students around the world. We provide trusted, high-quality content and personalized learning experiences that use data, technology and learning science to help students progress towards their goals. Through our commitment to fostering a culture of innovation and belonging, we are dedicated to improving outcomes and access to education for all. We have over 30 offices across North America, Asia, Australia, Europe, the Middle East and South America, and make our learning solutions available in more than 80 languages. The Company's fiscal year is the 52-week period ended March 31. Visit us at mheducation.com or find us on Facebook, Instagram, LinkedIn or X.