McGraw Hill Q3 Sales Rise 4.2%, Guidance to $2.087B Sends Shares Up 19%
McGraw Hill reported fiscal Q3 revenue of $434.2 million, up 4.2% year-over-year, with Higher Education sales jumping 24% to $225.4 million while K-12 sales slid 14.6%. The company narrowed its GAAP net loss to $20.2 million, delivered $135.9 million in adjusted EBITDA and raised full-year revenue guidance to $2.067–$2.087 billion.
1. Q3 Performance Highlights
For the quarter ended December 31, 2025, McGraw Hill generated revenue of $434.2 million, a 4.2% increase from the prior year. Higher Education revenue surged 24% to $225.4 million while K-12 fell 14.6% to $128.2 million; adjusted EBITDA reached $135.9 million with a 31.3% margin as the net loss narrowed to $20.2 million.
2. Guidance Revision and Digital Tools
McGraw Hill lifted its fiscal 2026 revenue outlook to a range of $2.067–$2.087 billion, up from $2.031–$2.061 billion, and increased adjusted EBITDA guidance to $729–$739 million. The AI Reader tool saw 16 million user interactions during Q3, underscoring digital adoption.
3. Debt Reduction and Leadership Change
During the quarter, the company pre-paid $200 million of its term loan to accelerate deleveraging and lower interest expense. Philip Moyer assumed the role of president and CEO effective February 9, with former CEO Simon Allen transitioning to board chair.
4. Market Reaction
Following the earnings release, shares jumped 18.72% in after-hours trading, reflecting investor optimism on improved profitability and guidance. The stock’s position near its 52-week low and an RSI of 31.9 suggest room for further upside if operational trends continue.