Graham Holdings Company
10/29/2025 | Press release | Distributed by Public on 10/29/2025 06:19
Quarterly Report for Quarter Ending September 30, 2025 (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 reportednet income attributable to common shares of $122.9 million($27.91per share) for the third quarter of 2025, compared to $72.5 million ($16.42 per share) for the third quarter of 2024.
Items included in the Company's net income for the third quarter of 2025:
•$2.2 million in intangible and other long-lived asset impairment charges at healthcare, automotive and other businesses (after tax impact of $1.7 million, or $0.39 per share);
•$2.5 million in non-operating expenses related to Separation Incentive Programs (SIPs) at other businesses, the education, television broadcasting and manufacturing divisions and the corporate office (after tax-impact of $1.9 million, or $0.43 per share);
•$0.7 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $6.9 million, or $1.57 per share);
•$84.8 million in net gains on marketable equity securities (after-tax impact of $63.0 million, or $14.31 per share);
•$5.8 million in net lossesof affiliates whose operations are not managed by the Company (after-tax impact of $4.3 million, or $0.98 per share); and
•a net non-operating gain of $17.1 million from earnings and impairment of equity and cost method investments (after-tax impact of $12.7 million, or $2.89 per share).
Items included in the Company's net income for the third quarter of 2024:
•$3.7 million in non-operating expenses related toSIPs at Kaplan, manufacturing and other businesses (after tax-impact of $2.7 million, or$0.62per share);
•$9.7 millionin interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $13.2 million, or $3.00per share);
•$30.5 millionin net gains on marketable equity securities (after-tax impact of $22.7 million, or $5.14pershare);
•$2.3 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $1.7 million, or $0.39 per share);
•a non-operating gain of $3.8 millionfrom the sale of certain businesses and websites (after-tax impact of $2.6 million, or $0.58 per share); and
•a net non-operating loss of $14.2 million from the impairment and write-up of equity and cost method investments (after-tax impact of $10.6 million, or $2.40 per share).
Revenue for the third quarter of 2025 was $1,278.9 million, up 6% from $1,207.2 million in the third quarter of 2024. Revenues increased at education, manufacturing and healthcare, partially offset by declines at television broadcasting and automotive. The Company reported operating income of $67.1 millionfor the third quarter of 2025, compared to $81.6 million for the third quarter of 2024. The decrease in operating results is due to declines at television broadcasting and automotive, partially offset by improved results at education, manufacturing, healthcare and other businesses.
For the first ninemonths of 2025, the Company reported net income attributable to common shares of $183.6 million($41.75 per share), compared to $175.8 million($39.49 per share) for the first nine months of 2024.
Items included in the Company's net income for the first nine months of 2025:
•$2.2 millionin intangible and other long-lived asset impairment charges (after tax impact of $1.7 million, or $0.39 per share);
•$9.2 millionin non-operating expenses related to SIPs at other businesses, the education, television broadcasting and manufacturing divisions and the corporate office (after tax-impact of$6.8 million, or $1.55 per share);
•$68.3 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $60.8 million, or $13.83per share);
•$117.0 million in net gains on marketable equity securities (after-tax impact of$87.0 million, or $19.79 per share);
•$18.1 million in net lossesof affiliates whose operations are not managed by the Company (after-tax impact of $13.5 million, or $3.06per share); and
•net non-operating gains of $4.4 million from earnings and impairment of equity and cost method investments (after-tax impact of $3.3 million, or $0.74per share).
Items included in the Company's net income for the first nine months of 2024:
•$26.3 millionin goodwill and intangible asset impairment charges at World of Good Brands (WGB) (after tax impact of $21.2 million, or $4.77 per share);
•$20.5 million in non-operating expenses related to a Voluntary Retirement Incentive Program (VRIP) at the television broadcasting division and the corporate office, and SIPs at Kaplan, manufacturing and other businesses (after tax-impact of $15.2 million, or $3.42 per share);
•$85.1 million in interest expense to adjust the fair value of the mandatorily redeemable noncontrolling interest (after-tax impact of $76.4 million, or $17.16per share);
•$154.3 million in net gains on marketable equity securities (after-tax impact of $114.8 million, or $25.77per share);
•$4.9 million in net losses of affiliates whose operations are not managed by the Company (after-tax impact of $3.7 million, or $0.82per share);
•a non-operating gain of $7.2 million from the sale of certain businesses and websites (after-tax impact of $5.3 million, or $1.19 per share); and
•a net non-operating loss of $15.0 million from the impairment and write-up of equity and cost method investments (after-tax impact of $11.1 million, or $2.50per share).
Revenue for the first nine months of 2025 was $3,660.5 million, up 3% from $3,545.1 millionin the first nine months of 2024. Revenues increased at education, manufacturing, healthcare and other businesses, partially offset by declines at television broadcasting and automotive.The Company reported operating income of $187.4 millionfor the first nine months of 2025, compared to $143.0 millionfor the first nine months of 2024. Excluding goodwill and other long-lived asset impairment charges, the improvement in operating results is due to increases at education, manufacturing and healthcare, partially offset by declines at television broadcasting and automotive.
Division Results
Education
Education division revenue totaled $472.7 millionfor the third quarter of 2025, up 8%from $438.1 million for the same period of 2024. Kaplan reported operating income of $49.1 millionfor the third quarter of 2025, compared to $34.9 million for the third quarter of 2024.
For the first nine months of 2025, education division revenue totaled $1,334.2 million, up 4%from $1,283.6 million for the same period of 2024. Kaplan reported operating income of $135.3 million for the first nine months of 2025, compared to $100.8 million for the first nine months of 2024.
A summary of Kaplan's operating results is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||
| Kaplan international | $ | 294,292 | $ | 277,009 | 6 | $ | 827,719 | $ | 813,833 | 2 | |||||||||||||||||||||||||
| Higher education | 92,162 | 85,655 | 8 | 265,387 | 246,818 | 8 | |||||||||||||||||||||||||||||
| Supplemental education | 86,679 | 76,134 | 14 | 242,243 | 221,389 | 9 | |||||||||||||||||||||||||||||
| Kaplan corporate and other | 280 | 158 | 77 | 315 | 5,739 | (95) | |||||||||||||||||||||||||||||
| Intersegment elimination | (751) | (866) | - | (1,458) | (4,192) | - | |||||||||||||||||||||||||||||
| $ | 472,662 | $ | 438,090 | 8 | $ | 1,334,206 | $ | 1,283,587 | 4 | ||||||||||||||||||||||||||
| Operating Income (Loss) | |||||||||||||||||||||||||||||||||||
| Kaplan international | $ | 28,893 | $ | 25,538 | 13 | $ | 88,892 | $ | 82,674 | 8 | |||||||||||||||||||||||||
| Higher education | 14,683 | 11,385 | 29 | 45,462 | 31,258 | 45 | |||||||||||||||||||||||||||||
| Supplemental education | 14,979 | 11,186 | 34 | 28,353 | 21,438 | 32 | |||||||||||||||||||||||||||||
| Kaplan corporate and other | (8,137) | (10,717) | 24 | (22,201) | (26,357) | 16 | |||||||||||||||||||||||||||||
| Amortization of intangible assets | (1,404) | (2,421) | 42 | (5,222) | (8,267) | 37 | |||||||||||||||||||||||||||||
| Intersegment elimination | 38 | (81) | - | (14) | 8 | - | |||||||||||||||||||||||||||||
| $ | 49,052 | $ | 34,890 | 41 | $ | 135,270 | $ | 100,754 | 34 | ||||||||||||||||||||||||||
Kaplan International includes postsecondary education, professional training and language training businesses largely outside the United States (U.S.). Kaplan International revenue increased6% and 2% for the third quarter and first nine months of 2025, respectively (4% increase and flat, respectively, on a constant currency basis) due to increases at UK Pathways, UK Professional and Singapore, partially offset by lower student enrollments at US Pathways, Languages and Australia. Kaplan International reportedoperating income of $28.9 million in the third quarter of 2025, compared to $25.5 million in the third quarter of 2024. The increase is due to improved results at UK Pathways and Singapore, partially offset by declines at US Pathways and Languages. UK Pathways revenues and operating results benefited significantly from favorable timing differences for certain programs in the third quarter of 2025, previously recorded in fourth quarter of 2024; consequently, revenue and operating results at UK Pathways are expected to be down in the fourth quarter of 2025, compared with the fourth quarter of 2024. US Pathways revenues and operating results were down significantly in the third quarter of 2025, due to changes in US visa policies and practices for international students recruited by Kaplan to study in the U.S. Operating income increased to $88.9 million in the first nine months of 2025, compared to $82.7 million in the first nine months of 2024. The increase is due largely to improved results at UK Pathways, Singapore and Australia, partially offset by declines at US Pathways, Languages and MPW.
Higher Education includes the results of Kaplan as a service provider to higher education institutions. Higher Education revenue increased 8% for both the third quarter and first nine months of 2025, due primarily to an increase in the Purdue Global fee recorded. Enrollments at Purdue Global, the largest institutional client, increased 3% for the first nine months of 2025 compared to the first nine months of 2024. For the third quarter and first nine months of 2025, Kaplan recorded the full fee from Purdue Global. For the third quarter and first nine months of 2024, Kaplan recorded a portion of the 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 improved in the third quarter and first nine months of 2025 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. Most of the program offerings in Supplemental Education experienced growth in the first nine months leading to a 9% revenue increase. Operating results improved in the third quarter and first nine months of 2025 due largely to revenue growth.
Kaplan corporate and other represents unallocated expenses of Kaplan's corporate office, other minor businesses and certain shared activities.
In the third quarter of 2025, the Company offered a SIP to certain employees at Higher Education and Supplemental Education; $1.3 million in related non-operating pension expense was recorded in the third quarter of 2025. 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. In the third quarter of 2024, the Company offered a SIP to certain employees at Supplemental Education; $2.7 million in related non-operating pension expense was recorded in the third quarter of 2024. 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 | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 105,087 | $ | 145,422 | (28) | $ | 314,625 | $ | 373,958 | (16) | |||||||||||||||||||||||||
| Operating Income | 26,774 | 61,914 | (57) | 79,112 | 122,675 | (36) | |||||||||||||||||||||||||||||
Graham Media Group (GMG) 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 decreased 28%to$105.1 millionin the third quarter of 2025, from $145.4 million in the same period of 2024. The revenue decline is due to a $33.4 million decrease in political advertising revenue, a $2.3 million decrease in retransmission revenue and declines in local and digital advertising revenue. Operating income for the third quarter of 2025 was down 57% to $26.8 million, from $61.9 million in the same period of 2024, due to lower revenues, partially offset by lower overall costs.
Revenue at the television broadcasting division was down 16%to $314.6 millionin the first ninemonths of 2025, from $374.0 millionin the same period of 2024. The revenue decline is due to a $39.5 million decrease in political advertising revenue, a $6.4 million decrease in retransmission revenue and declines in local and digital advertising revenue. Operating income for the first ninemonths of 2025was down 36%to $79.1 million, from $122.7 millionin the same period of 2024, due to lower revenues, partially offset by lower overall costs. 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 2025 expected to decline compared with 2024, and this trend is expected to continue.
In the second and third quarters of 2025, the Company offered SIPs to certain employees at the television broadcasting division; $0.1 million in related non-operating pension expense was recorded. In the second quarter of 2024, the Company offered a VRIP to certain employees at the television broadcasting division; $14.3 million in related non-operating pension expense was recorded in the second quarter of 2024. These programs were funded from the assets of the Company's pension plan.
Manufacturing
A summary of manufacturing's operating results is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 124,257 | $ | 95,385 | 30 | $ | 318,480 | $ | 300,914 | 6 | |||||||||||||||||||||||||
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Operating Income
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6,695 | 4,495 | 49 | 19,741 | 11,829 | 67 | |||||||||||||||||||||||||||||
Manufacturing includes four businesses: Hoover, a supplier of pressure impregnated kiln-dried lumber and plywood products for fire retardant and preservative applications; Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies; Joyce/Dayton, 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 $107.4 million in net pension obligations.
Manufacturing revenues increased 30% and 6% in the third quarter and first nine months of 2025, respectively. The revenue increases in the third quarter and the first nine months of 2025 are due to increased revenues at Hoover, Dekko and Joyce, partially offset by lower revenues at Forney. The revenue increase at Hoover is due largely to the Hoover Architectural Solutions business acquisition, partially offset by lower overall product demand at Hoover, particularly for multi-family housing. Hoover results included wood gains on inventory sales in the first nine months of 2025 and 2024, with gains in the first nine months 2025 significantly higher than the prior year. Manufacturing operating results improved in the third quarter of 2025 due to significant increases at Dekko and Joyce, partially offset by declines at Hoover and Forney. Manufacturing operating results improved in the first nine months of 2025 due largely to a significant increase at Dekko, along with increases at Joyce and Forney, partially offset by a decline at Hoover. Hoover results in the third quarter and first nine months of 2025 were adversely impacted by transaction, transition and intangible asset amortization costs related to the acquisition.
In the third quarter of 2025, the Company offered a SIP to certain employees at Joyce; $0.1 million in related non-operating pension expense was recorded. In the third quarter of 2024, the Company offered a SIP to certain employees at Dekko; $0.1 million in related non-operating pension expense was recorded. These programs were funded from the assets of the Company's pension plan.
Healthcare
A summary of healthcare's operating results is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 208,415 | $ | 155,413 | 34 | $ | 584,375 | $ | 431,142 | 36 | |||||||||||||||||||||||||
| Operating Income | 20,992 | 14,260 | 47 | 64,406 | 33,088 | 95 | |||||||||||||||||||||||||||||
Graham Healthcare Group (GHG) provides home health and hospice services in seven states. GHG also provides nursing care and prescription services for patients receiving in-home infusion treatments through its 87.5% interest in CSI Pharmacy Holding Company, LLC (CSI), and other healthcare services through 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). Healthcare revenues increased 34%and 36% and operating results were up substantially in the third quarter and first nine months of 2025, respectively, largely due to significant growth at CSI from an expansion of infusion treatment offerings and patient service areas, and growth in home health and hospice services and at the other healthcare businesses; operating results also benefited from a reduction in pension expense. In January 2022, GHG implemented a pension credit retention program offering a pension credit up to $50,000 per employee, cliff vested after three years of continuous employment for certain existing employees and new employees. Effective April 1, 2024, this program is no longer being offered to new employees.
In August 2025, CSI purchased Pine Drug Holdings, LLC and was issued a California pharmacy license, with dispensing operations expected to commence later in the fourth quarter of 2025.
In the third quarter of 2025, home health and hospice recorded $1.0 million of lease impairment charges.
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 $2.9 million and $3.4 million for the third quarters of 2025 and 2024, respectively, from these joint ventures. The Company recorded equity in earnings of$9.6million and $10.2 million for the first nine months of 2025and 2024, respectively.
Automotive
A summary of automotive's operating results is as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | % Change | 2025 | 2024 | % Change | |||||||||||||||||||||||||||||
| Revenue | $ | 285,228 | $ | 289,392 | (1) | $ | 851,791 | $ | 902,046 | (6) | |||||||||||||||||||||||||
| Operating Income | 6,308 | 9,064 | (30) | 22,093 | 28,919 | (24) | |||||||||||||||||||||||||||||
Automotive includes sevenautomotive 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. 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 recently decided to cease operations of the Ourisman Jeep of Bethesda dealership, which was closed in early September 2025. As a result, the Company recorded a $0.6 million intangible asset impairment charge on the related franchise agreement.
Revenues for the third quarter of 2025 decreased 1%, due to declines in new and used vehicle sales, partially offset by sales growth for services and parts and an increase in sales of finance and insurance product offerings. Operating results decreased for the third quarter of 2025 due largely to lower overall sales and gross margins on new and used vehicles, partially offset by an increase in sales and gross profits on services and parts and finance and insurance product offerings. Revenues for the first nine months of 2025 decreased 6%, due largely to declines in new and used vehicle sales and a decline in sales of finance and insurance product offerings, partially offset by
sales growth for services and parts. Operating results declined for the first nine months of 2025 due largely to lower overall sales and gross margins on new vehicles, lower overall sales and gross profits on used vehicles, and a decline in finance and insurance product sales; partially offset by higher overall gross profit on services and parts.
On October 21, 2025, the Company acquired a Honda automotive dealership in Woodbridge, VA, including the real property for the dealership operations.
Other Businesses
In the first half of 2025, the Company completed the sale of various websites and related businesses that made WGB. All remaining WGB operations were substantially shut down by the end of the third quarter of 2025. WGB recorded various asset write-offs and incurred other costs in the second and third quarters of 2025 related to these actions.
A summary of revenue by category for other businesses:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
| September 30 | % | September 30 | % | ||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | Change | 2025 | 2024 | Change | |||||||||||||||||||||||||||||
| Operating Revenues | |||||||||||||||||||||||||||||||||||
|
Specialty (1)
|
$ | 36,517 | $ | 35,163 | 4 | $ | 118,030 | $ | 106,798 | 11 | |||||||||||||||||||||||||
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Retail (2)
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27,539 | 24,678 | 12 | 80,918 | 77,288 | 5 | |||||||||||||||||||||||||||||
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Media (3)
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19,159 | 23,623 | (19) | 58,134 | 69,667 | (17) | |||||||||||||||||||||||||||||
| $ | 83,215 | $ | 83,464 | 0 | $ | 257,082 | $ | 253,753 | 1 | ||||||||||||||||||||||||||
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(1)
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Includes Clyde's Restaurant Group, Decile and Supporting Cast
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(2)
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Includes Framebridge, Saatchi Art and Society6
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(3)
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Includes Slate, Foreign Policy, Code3, World of Good Brands and City Cast
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Overall, revenue from other businesses was flat and increased 1%in the third quarter and first ninemonths of 2025, respectively. For the first ninemonths of 2025, specialty revenue increased due to revenue growth at Clyde's Restaurant Group (CRG) and Supporting Cast. Retail revenue increased in the third quarter due to revenue growth at Framebridge and Saatchi Art, offset by lower revenue at Society6. Retail revenue increased for the first nine months of 2025 due to revenue growth at Framebridge, offset by lower revenue at Society6 and Saatchi Art. Mediarevenue declined for the third quarter due to lower revenue at WGB and Slate, partially offset by revenue growth at Foreign Policy,Code3 and City Cast. Mediarevenue declined for the first nine months due to lower revenue at WGB, Slate andCode3, partially offset by revenue growth at Foreign Policy and City Cast.
Overall, operating losses at other businesses were down in the third quarter of 2025, due to improved results at Society6, WGB, Saatchi Art, Decile, Code3, Supporting Cast and Foreign Policy, partially offset by declines at Framebridge, City Cast and CRG. Operating losses at other businesses were down slightly in the first ninemonths of 2025, excluding goodwill and intangible asset impairment charges at WGB in the second quarter of 2024. The improvements were due to improved results at WGB, Saatchi Art, Foreign Policy, Decile, Code3, CRG and Supporting Cast and, partially offset by declines at Framebridge, Society6, Slate and City Cast.
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. In July 2024, CRG opened Rye Street Tavern, a new restaurant in Baltimore, MD. In November 2024, CRG opened Cordelia Fishbar, a new restaurant in Washington, D.C. Revenue increased in the third quarter and first nine months of 2025due to the new restaurant openings and modest price increases, partially offset by softer demand and lower guest traffic at the DC restaurants in the third quarter of 2025. CRG reported an operating loss in the third quarter of 2025 and 2024, while reporting an operating profit in the first nine months of 2025 and 2024. Overall, excluding pre-opening expenses incurred for new restaurants, operating results declined in the third quarter and first nine months of 2025.
CRG plans to open a new restaurant in Reston, VA in the second quarter of 2026.
Framebridge
Framebridge is a custom framing service company, headquartered in Washington, DC, with 39 retail locations, and three manufacturing facilities in Kentucky, Virginia and Nevada (opened in the third quarter of 2025). In the first nine months of 2025, Framebridge opened eight new retail stores, including two new stores in California. Framebridge plans to open additional stores in the fourth quarter 2025 and continues to actively explore other opportunities for further store expansion.
Revenues grew in the third quarter and first ninemonths of 2025 due to an increase in retail revenue from same-store sales growth and operating additional retail stores compared to the same periods in 2024, as well as higher online revenues. Framebridge is an investment stage business and reported significant operating losses in the first ninemonths of 2025and 2024. Excluding revenues and expansion costs incurred in the third quarter of 2025 from new retail store openings and the new manufacturing facility in Nevada, operating losses declined in the third quarter of 2025 compared to the third quarter of 2024.
In the first and second quarters of 2024, Framebridge implemented a SIP, which was funded from the assets of the Company's pension plan; $0.4 million and $1.0million in related non-operating pension expense was recorded in the first and second quarters of 2024, respectively.
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, Supporting Cast and City Cast reported revenue growth in the first nine months of 2025, while Society6, Slate, Saatchi Art and Code3 reported revenue declines. Losses from WGB, Society6, City Cast, Saatchi Art, Decile, Slate, Code3 and Supporting Cast in the first nine months of 2025 adversely affected operating results, while Foreign Policy reported an operating profit during this period.
In the third quarter of 2025, the Company offered SIPs to certain employees at Code3, Saatchi Art, and Society6; $1.1 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. In the third quarter of 2024, the Company offered SIPs to certain employees at Society6, Saatchi Art, WGB, Decile and Slate; $0.8 million in related non-operating pension expense was recorded. In the second quarter of 2024, Code3 implemented a SIP to reduce the number of employees; $0.6 millionin 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.
Equity in Earnings (Losses)ofAffiliates
At September 30, 2025, the Company held an approximate 23% interest in Intersection Holdings, LLC (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 two joint ventures managed by Kaplan. Overall, the Company recorded equity in earnings of affiliates of $15.8 million for the third quarter of 2025, compared to losses of $13.4 million for the third quarter of 2024. These amounts include $5.8 million and $2.3 million in net losses for the third quarter of 2025 and 2024, respectively, from affiliates whose operations are not managed by the Company. The 2025 amount also includes a gain of $18.6 million in equity earnings related to the Company's investment in Intersection. The 2024 amount also includes a $14.4 million impairment loss on the Company's investment in N2K Networks.
The Company recorded equity in earnings of affiliates of $10.5 million for the first nine months of 2025, compared to losses of $8.5 million for the first nine months of 2024. These amounts include $18.1 million and $4.9 million in net losses for the first nine months of 2025 and 2024, respectively, from affiliates whose operations are not managed by the Company. The 2025 amount also includes a gain of $18.6 million in equity earnings related to the Company's investment in Intersection. The 2024 amount also includes a $14.4 million impairment loss on the Company's investment in N2K Networks.
Net Interest Expense and Related Balances
The Company incurred net interest expense of $15.7 millionand $111.3 millionfor the third quarter and first nine months of 2025, respectively, compared to $23.6 million and $130.0 millionfor the third quarter and first nine months of 2024.
The Company recorded interest expense of$0.7 million and $68.3 million in the third quarter and first nine months of 2025, respectively; compared to $9.7 million and $85.1 million in the third quarter and first ninemonths of 2024, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG. The significant
adjustments recorded in the first quarter of 2025 and the first nine months of 2024 are 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 decrease in net interest expense relates primarily to lower interest rates on the Company's variable debt.
At September 30, 2025, the Company had $731.9 million in borrowings outstanding at an average interest rate of 5.9%, and cash, marketable equity securities and other investments of $1,242.9 million. At September 30, 2025, the Company had $67.2 million outstanding on its $300 million revolving credit facility.
Non-operating Pension and Postretirement Benefit Income, net
The Company recorded net non-operating pension and postretirement benefit income of $31.0 millionand $94.3 millionfor the third quarter and first nine months of 2025, respectively, compared to $38.3 million and $105.4 million for the third quarter and first nine months of 2024, respectively.
In the third quarter of 2025, the Company recorded $2.5 million in expenses related to non-operating SIPs at Kaplan, the television broadcasting division, manufacturing and other businesses. In the second quarter of 2025, the Company recorded $6.0 million in expenses related to non-operating SIPs atthe education and television broadcasting divisions and other businesses. In the first quarter of 2025, the Company recorded $0.6 millionin expenses related to non-operating SIPs at other businesses.
In the third quarter of 2024, the Company recorded $3.7 million in expenses related to non-operating SIPs at Kaplan, manufacturing and other businesses. In the second quarter of 2024, the Company recorded $14.8 million in expenses related to a VRIP at the television broadcasting division and the corporate office and $1.6 million in expenses related to non-operating SIPs at other businesses. In the first quarter of 2024, the Company recorded $0.4 millionin expenses related to a non-operating SIP at other businesses.
Gainon Marketable Equity Securities, net
Overall, the Company recognized $84.8 million and $117.0 millionin net gains onmarketable equity securities in the third quarter and first ninemonths of 2025, respectively, compared to $30.5 millionand $154.3 millionin net gains on marketable equity securities in the third quarter and first nine months of 2024, respectively.
Other Non-Operating Income (Expense)
The Company recorded a nominal net other non-operating income amount for the third quarter of 2025, compared to other non-operating expense of $0.5 million for the third quarter of 2024. The 2025 amounts included $1.1 million in foreign currency gains and other items; partially offset by $1.5 million in impairments on cost method investments. The 2024 amounts included $4.6 million in foreign currency losses; partially offset by a gain of $3.8 millionon the sale of certain businesses and websites, and other items.
The Company recorded total other non-operating expense, net, of $20.5 million for the first ninemonths of 2025, compared to income of $3.0 million for the first nine months of 2024. The 2025 amounts included $14.2 million in impairments on cost method investments and $7.7 million in foreign currency losses; partially offset by $0.4 million gain on sale of businesses and other items. The 2024 amounts included a gain of $7.2 million on the sale of certain businesses and websites; $0.9 million in gains related to the sale of businesses and contingent consideration, and other items; partially offset by $5.6 million in foreign currency losses and a $0.7 million impairment on cost method investments.
Provisionfor Income Taxes
The Company's effective tax rate for the first ninemonths of 2025 and 2024 was 30.6%and 32.2%, respectively. The Company's effective tax rate for the first nine months of 2025 is 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. For the first nine months of 2024, the Company's effective tax rate was based on the estimated full year 2024 effective tax rate, which includes the adverse impact of the permanent differences related to the interest expense recorded to adjust the fair value of the mandatorily redeemable noncontrolling interest at GHG and goodwill and intangible asset impairment charges.
On July 4, 2025, legislation known as "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14" (the Act) was enacted in the U.S., which includes, among other things, many corporate income tax provisions that will impact the Company. The Company has considered the Act in its estimated full year 2025 effective tax rate,
and continues to analyze its various provisions. At this stage, the Company expects the Act will result in a significant decline in federal taxable income for 2025 and a related reduction in federal income tax payments for the remainder of 2025 as a result of changes to the income tax treatment of certain research and development costs and accelerated income tax deductions for certain capital expenditures.
Earnings Per Share
The calculation of diluted earnings per share for the third quarter and first ninemonthsof 2025 was based on 4,377,884 and 4,369,922 weighted average shares outstanding, respectively, compared to 4,384,123and 4,422,816 for the third quarter and first ninemonths of 2024. At September 30, 2025, there were 4,361,833 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 462,482shares as of September 30, 2025.
Other
Graham Healthcare Group Leadership Changes
David Curtis and Justin DeWitte, co-CEOs of GHG, recently made the decision to step down from their respective leadership roles at GHG. Both will remain with GHG for a transition period and to support the search and onboarding of a new leader for the home health and hospice businesses. The other healthcare businesses are now reporting into Graham Holdings leadership directly.
Tariffs
Historically, tariffs have had a limited impact on the Company's financial operations and business strategy. The Company's holding company structure, with a diverse portfolio of U.S. businesses and international operations, serves to limit its overall risk. While the Company believes it is reasonably well insulated from tariffs currently, there is significant uncertainty as to future policies regarding U.S. and worldwide tariffs. Therefore, it is possible that the Company could be significantly impacted. At this time, however, we believe that macroeconomic risks related to tariff policies and a potential economic slowdown pose the most meaningful risk to the Company's financial results. In considering our approach and strategy related to tariff policies and changing conditions, the Company will continue to track developments and develop plans as needed.
Financial Condition: Liquidity and Capital Resources
The Company considers the following when assessing its liquidity and capital resources:
| As of | |||||||||||
| (In thousands) | September 30, 2025 | December 31, 2024 | |||||||||
| Cash and cash equivalents | $ | 190,822 | $ | 260,852 | |||||||
| Restricted cash | 46,281 | 37,001 | |||||||||
| Investments in marketable equity securities and other investments | 1,005,792 | 858,743 | |||||||||
| Total debt | 731,896 | 748,192 | |||||||||
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 $300 million revolving credit facility, amounting to $232.8 million at September 30, 2025 and the undrawn $50.0 million delayed draw term loan at the automotive subsidiary; the delayed draw term loan was subsequently utilized to finance the acquisition of a Honda automotive dealership in October 2025.
During the first nine months of 2025, the Company's cash and cash equivalents decreased by $70.0 million, due to the settlement of a significant portion of the mandatorily redeemable noncontrolling interest, capital expenditures, purchase of marketable equity securities, business acquisitions, investments in equity affiliates, dividend payments, and net repayments of the vehicle floor plan payable and other borrowings, which was offset by cash generated from operations. In the first nine months of 2025, the Company's borrowings decreased by $16.3 million, primarily due to repayments under the term loan, commercial notes at the automotive subsidiary and other debt.
As of September 30, 2025 and December 31, 2024, the Company had money market investments of $5.6 million and $3.9 million, that are included in cash and cash equivalents. At September 30, 2025, the Company held approximately $108 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 September 30, 2025, the fair value of the Company's investments in marketable equity securities was $998.8 million, which includes investments in the common stock of five publicly traded companies. During the first nine months of 2025, the Company purchased $29.8 million of marketable equity securities. There were no sales of marketable equity securities during the first nine months of 2025. At September 30, 2025, the net unrealized gain related to the Company's investments totaled $741.9 million.
The Company had working capital of $549.3 million and $898.8 million at September 30, 2025 and December 31, 2024, respectively. The working capital at September 30, 2025 includes the Company's $400 million senior unsecured fixed rate notes that are due on June 1, 2026, which the Company intends to refinance on or before the due date. 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 September 30, 2025 and December 31, 2024, the Company had borrowings outstanding of $731.9 million and $748.2 million, respectively. The Company's borrowings at September 30, 2025 were mostly from $400.0 million of 5.75% unsecured notes due June 1, 2026, a term loan of $134.6 million, $67.2 million in outstanding borrowings under the Company's revolving credit facility, and real estate and capital term loans of $120.0 million at the automotive subsidiary. The Company's borrowings at December 31, 2024 were mostly from $400.0 million of 5.75% unsecured notes due June 1, 2026, $62.8 million in outstanding borrowings under the Company's revolving credit facility, a term loan of $140.1 million, and real estate and capital term loans of $127.6 million at the automotive subsidiary. The interest on the $400.0 million of 5.75% unsecured notes is payable semiannually on June 1 and December 1.
During the nine months ended September 30, 2025 and 2024, the Company had average borrowings outstanding of approximately $835.2 million and $819.6 million, respectively, at average annual interest rates of approximately 6.0% and 6.4%, respectively. During the nine months ended September 30, 2025 and 2024, the Company incurred net interest expense of $111.3 million and $130.0 million, respectively. Included in the interest expense for the nine months ended September 30, 2025 and 2024 is $68.3 million and $85.1 million, 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 $22.2 million at September 30, 2025.
On June 12, 2025, Standard & Poor's affirmed the Company's credit rating and maintained the outlook as Stable. On December 20, 2024, 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 September 30, 2025, the Company had $67.2 million outstanding under the $300 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:
|
Nine Months Ended September 30 |
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| (In thousands) | 2025 | 2024 | |||||||||
| Net cash provided by operating activities | $ | 318,896 | $ | 290,676 | |||||||
| Net cash used in investing activities | (98,362) | (35,680) | |||||||||
| Net cash used in financing activities | (290,817) | (176,315) | |||||||||
| Effect of currency exchange rate change | 9,533 | 1,652 | |||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | $ | (60,750) | $ | 80,333 | |||||||
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:
|
Nine Months Ended September 30 |
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| (In thousands) | 2025 | 2024 | |||||||||
| Net Income | $ | 192,382 | $ | 181,018 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation, amortization and goodwill and other long-lived asset impairments | 86,496 | 121,513 | |||||||||
| Amortization of lease right-of-use asset | 44,229 | 47,746 | |||||||||
| Net pension benefit, early retirement program and special separation benefit expense | (61,090) | (64,532) | |||||||||
| Other non-cash activities | (59,958) | (113,560) | |||||||||
| Change in operating assets and liabilities | 116,837 | 118,491 | |||||||||
| Net Cash Provided by Operating Activities | $ | 318,896 | $ | 290,676 | |||||||
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 nine months of 2025 compared to the first nine months of 2024, the increase in net cash provided by operating activities is primarily driven by higher net income, net of non-cash adjustments.
Investing Activities. The Company's net cash flow used in investing activities were as follows:
|
Nine Months Ended September 30 |
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| (In thousands) | 2025 | 2024 | |||||||||
| Purchases of property, plant and equipment | $ | (48,618) | $ | (57,680) | |||||||
| Net (purchases of) proceeds from sales of marketable equity securities | (29,823) | 18,524 | |||||||||
| Investments in certain businesses, net of cash acquired | (19,486) | (4,022) | |||||||||
| Investments in equity affiliates and cost method investments | (10,512) | (2,188) | |||||||||
| Net proceeds from disposition of businesses, property, plant and equipment and investments | 7,747 | 8,342 | |||||||||
| Loan to related party | - | (2,000) | |||||||||
| Other | 2,330 | 3,344 | |||||||||
| Net Cash Used in Investing Activities | $ | (98,362) | $ | (35,680) | |||||||
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 nine months of 2025 and 2024 disclosed in Note 15 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 $80 million to $90 million in 2025.
Net (purchases of) proceeds from sales of marketable equity securities.The Company purchased $29.8 million and $5.0 million of marketable equity securities during the first nine months of 2025 and 2024, respectively. There were no sales of marketable equity securities during the first nine months of 2025. During the first nine months of 2024, the Company sold marketable equity securities that generated proceeds of $23.5 million.
Acquisitions.In July 2025, Hoover acquired 100% of Arconic Architectural Products, LLC, a wholly-owned subsidiary of Arconic Corporation, 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 $107.4 million in net pension obligations. In June 2025, Kaplan acquired onesmall business which is included in its supplemental education division. During 2024, the Company acquired
two small businesses. In January 2024, the Company acquired one small business which is included in other businesses. In May 2024, Kaplan acquired one small business which is included in its international division.
On October 21, 2025, the Company's automotive subsidiary acquired a Honda automotive dealership, including the real property for the dealership operations. In addition to a cash payment and the assumption of $4.9 million in floor plan payables, the automotive subsidiary borrowed $38.7 million under the delayed draw term loan to finance the acquisition. The dealership is operated and managed by an entity affiliated with Christopher J. Ourisman, a member of the Ourisman Automotive Group family of dealerships.
Transactions with related parties. In September 2025, the Company invested an additional $29.3 million in its equity affiliate Intersection. Intersection used a portion of the additional investment to settle, in a non-cash exchange, $19.3 million of the outstanding amount owed to the Company on the $30 million term loan extended in April 2023. In May 2024, the Company entered into a convertible promissory note agreement to loan N2K Networks $2.0 million. The convertible promissory note bears interest at a rate of 12% per annum and, subject to conversion provisions, all unpaid interest and principal are due by May 2027.
Disposition of Businesses. 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, WGBcompleted 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. In June and September 2024, WGB completed the sales of small businesses. In July 2024, Kaplan completed the sale of a small business, Red Marker, which was included in Kaplan International.
Financing Activities. The Company's net cash flow used in financing activities were as follows:
|
Nine Months Ended September 30 |
|||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Distributions paid to noncontrolling interests | $ | (191,609) | $ | (4,010) | |||||||
| Net (repayments of) proceeds from vehicle floor plan payable | (27,897) | 8,443 | |||||||||
| Dividends paid | (23,508) | (22,926) | |||||||||
| Repayments of borrowings | (22,089) | (16,053) | |||||||||
| Common shares repurchased | (3,468) | (98,170) | |||||||||
| Net borrowing under revolving credit facility | 600 | (34,216) | |||||||||
| Other | (22,846) | (9,383) | |||||||||
| Net Cash Used in Financing Activities | $ | (290,817) | $ | (176,315) | |||||||
Distributions paid to noncontrolling interests. 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 millionin cash and $18.75 millionin Graham Holdings Company Class B common stock.
Borrowings and Vehicle Floor Plan Payable.In the first nine months of 2025, the Company repaid amounts borrowed under the term loan, commercial notes at the automotive subsidiary and other debt. In the first nine months of 2024, the Company repaid amounts borrowed under the $300 million revolving credit facility. In the first nine months of 2025 and 2024, 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) proceeds from the vehicle floor plan payable fluctuates with changes in the amount of vehicle inventory held by the automotive dealerships.
Dividends. The quarterly dividend rate per share was $1.80 and $1.72 for the first nine months of 2025 and 2024, respectively. The Company expects to pay a dividend of $7.20 per share in 2025.
Common Stock Repurchases. During the first nine months of 2025, the Company purchased a total of 3,978 shares of its Class B common stock at a cost of approximately $3.5 million resulting from the net settlement of stock awards upon vesting. 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 September 30, 2025, the Company had remaining authorization from the Board of Directors to purchase up to 462,482 shares of Class B common stock.
Other. During the first nine months of 2025 and 2024, the Company paid $7.0 million and $5.4 million, respectively, related to deferred payments from prior acquisitions.
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, 2024.
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 for the fiscal year ended December 31, 2024 and in the Company's 2024Annual 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 this report and the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 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 October 29, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 29, 2025 at 12:19 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]