McGraw Hill, Inc.
For the period ended Dec 31, 2025. Filed Feb 11, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 11, 2026
MH$10.86-3.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001951070-25-000009
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-11.
0001951070-26-000011
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 237 previous paragraphs and 229 current paragraphs.
114 unchanged; 75 reworded; 40 added; 36 removed; 12 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Recent Developments
Current report
On December 30, 2025, Simon Allen notified the Board of Directors (the "Board") of his intention to retire from his position as the Company's President and Chief Executive Officer ("CEO"), effective on February 9, 2026 (the "Transition Date"). As a result, on January 2, 2026, the Board appointed Philip Moyer to succeed Mr. Allen as the Company's President and CEO and also appointed Mr. Moyer to the Board, effective as of the Transition Date. Mr. Allen will cease serving as President and CEO on the Transition Date and will continue to serve as Chair of the Board.
Current report
In connection with his appointment, Mr. Moyer is entitled to receive restricted stock unit (“RSUs”) awards with an aggregate grant date fair value of $8.0 million under the Company's 2025 Stock Incentive Plan. In addition, Mr. Moyer will be eligible to purchase shares of the Company's Common Stock with a fair market value of up to $1.5 million under the 2025 Stock Incentive Plan, with a corresponding equal number of RSUs granted to him.
Current report
K-12 revenue for the three months ended December 31, 2025 and 2024 was $128.2 million and $150.2 million, respectively, representing a decrease of $22.0 million, or 14.6%. The decrease was primarily attributable to lower Transactional Revenue and Re-occurring Revenue of approximately $20.2 million and $1.8 million, respectively, driven by a smaller market opportunity in the current period.
Current report
•lower Transactional Revenue of approximately $5.6 million, primarily driven by a change in duration mix of digital product sales, partially offset by a reduction in product returns.
Current report
Canada. This decrease was partially offset by higher Transactional Revenue of approximately $1.3 million, attributable to increased print sales in the K-12 segment.
Current report
•lower inventory obsolescence reserve of approximately $1.1 million, resulting from a significantly reduced inventory balance due to the shift toward digital sales and the timing of K-12 market opportunities; partially offset by
Current report
•higher royalty costs in the Higher Education segment of approximately $8.0 million, resulting from the growth in Re-occurring Revenue.
Current report
Operating and administrative expenses for the three months ended December 31, 2025 and 2024 was $257.2 million and $250.1 million, respectively, representing an increase of $7.1 million, or 2.8%. The increase was primarily due to:
Current report
•higher salaries and wages of approximately $4.3 million, primarily due to an annual merit-based compensation increase;
Current report
•higher selling and marketing expense of approximately $2.4 million, driven by higher sales force sales commission and increased investment in sales conferences and promotional activities in the Higher Education segment, consistent with the growth in revenue;
Current report
•higher professional fees of approximately $1.3 million, reflecting an increase in legal, accounting and compliance-related costs associated with operating as a public company; and
Current report
•lower advisory fees of approximately $2.5 million, reflecting the termination of the Advisory Agreement with Platinum Advisors following the consummation of our initial public offering.
Current report
•lower manufacturing, royalty and other direct fulfillment costsof approximately $4.4 million, attributable to lower Transactional Revenue from print offerings; and
Current report
•higher royalty costs of approximately $8.0 million, consistent with the growth in revenue;
Current report
Global Professional Adjusted EBITDA for the three months ended December 31, 2025 and 2024 was $11.0 million and $10.2 million, respectively, representing an increase of $0.9 million or 8.4%. The increase wasprimarily due to higher revenue of $0.7 millionas discussed under “—Consolidated Operating Results for the Three Months Ended December 31, 2025 and 2024—Global Professional”.
Current report
International Adjusted EBITDA for the three months ended December 31, 2025 and 2024 was $4.1 million and $6.4 million, respectively, representing a decrease of $2.4 million, or 36.6%. The decrease was primarily due to:
Current report
•a decrease in revenue of $0.8 millionas discussed under “—Consolidated Operating Results for the Three Months Ended December 31, 2025 and 2024—International”;
Current report
•higher allowance for credit losses of approximately $0.8 million, attributable to the aging of accounts receivable due to the timing of collections during the period; and
Current report
Consolidated Operating Results for the Nine Months Ended December 31, 2025 and 2024
Current report
•lower inventory obsolescence reserve of approximately $1.5 million, resulting from a significantly reduced inventory balance due to the shift toward digital sales and the timing of K-12 market opportunities; partially offset by
Current report
•higher royalty costs in the Higher Education segment of approximately $14.0 million, resulting from the growth in Re-occurring Revenue.
Current report
Operating and administrative expenses for the nine months ended December 31, 2025 and 2024 was $798.2 million and $774.0 million, respectively, representing an increase of $24.3 million, or 3.1%. The increase was primarily due to:
Current report
•higher salaries and wages of approximately $16.3 million, primarily due to an annual merit-based compensation increase;
Current report
•higher travel and entertainment expenses of approximately $2.4 million, primarily due to higher selling and marketing expense to drive sales growth; and
Current report
•lower advisory fees of approximately $4.4 million, reflecting the termination of the Advisory Agreement with Platinum Advisors following the consummation of our initial public offering;
Current report
•higher salaries and wages of approximately $3.2 million, primarilydue to an annual merit-based compensation increase; partially offset by
Current report
•lower manufacturing, royalty, and other direct fulfillment costsof approximately $32.6 million, attributable to lower Transactional Revenue from print offerings;
Current report
•lower allocation of shared corporate costs of approximately $13.5 million, driven by current period factors such as headcount, revenue and the allocable cost base; and
Current report
•higher allocation of shared corporate costs of approximately $17.1 million, driven by current period factors such as headcount, revenue and the allocable cost base;
Current report
•higher royalty and other direct fulfillment costs of approximately $16.8 million, consistent with the growth in revenue;
Current report
•higher selling and marketing expense, driven by higher sales force sales commission of approximately $4.9 million, consistent with the growth in revenue;
Current report
•higher salaries and wages of approximately $1.8 million, primarilydue to an annual merit-based compensation increase; and
Current report
•higher allowance for credit losses of approximately $1.6 million, due to the increase in the accounts receivable balance of customers with higher risk characteristics.
Current report
International Adjusted EBITDA for the nine months ended December 31, 2025 and 2024 was $18.7 million and $30.6 million, respectively, representing a decrease of $11.9 million, or 38.9%. The decrease was primarily due to:
Current report
•higher allocation of shared corporate costs of approximately $2.4 million, driven by current period factors such as headcount, revenue and the allocable cost base; and
Current report
•higher salaries and wages of approximately $2.0 million, primarily due to an annual merit-based compensation increase; partially offset by
Current report
(e) Represents accelerated amortization of debt discount and deferred financing costs related to the repayment of $385.7 million of debt outstanding under the A&E Term Loan Facility using net proceeds from our initial public offering on July 25, 2025, as well as the repayment of an additional $200.0 million of debt outstanding under the A&E Term Loan Facility during the third fiscal quarter of 2026.
Current report
(4) For the three months ended December 31, 2025, the Company reported a net loss and, accordingly, all potentially dilutive securities were considered anti-dilutive and excluded from the calculation of diluted earnings (loss) per share. However, because the Company reported Adjusted net income for the same period, these potentially dilutive securities were included in the calculation of Adjusted diluted earnings (loss) per share, resulting in diluted weighted-average shares outstanding of 191,106,927.
Current report
On October 16, 2025 and December 10, 2025, the Borrower paid down $150.0 million and $50.0 million, respectively, of debt outstanding under its A&E Term Loan Facility. As a result, the Company recorded accelerated amortization of debt discount and deferred financing costs related to the A&E Term Loan Facility of $8.1 million. As of December 31, 2025, the remaining unamortized debt discount and deferred financing cost were $18.9 million and $3.6 million, respectively.
Removed paragraphs (36)
Previous report
Recent Transactions
Previous report
A&E Term Loan Facility
Previous report
On October 16, 2025, the Company prepaid $150.0 million of principal outstanding under its A&E Term Loan Facility.
Previous report
New York Office Sublease
Previous report
In October 2025, the Company entered into a sublease agreement for a portion of its New York office space. The sublease is scheduled to commence in March 2026, with total sublease income of approximately $33.0 million over the term of the agreement. The sublease expires in 2035, which corresponds to the remaining term of the Company’s master lease for the premises.
Previous report
•higher digital Transactional Revenue of approximately $9.6 million, primarily due to growth in Inclusive Access sales; partially offset by
Previous report
•lower print Transactional Revenue of approximately $3.0 million, primarily due to the continued adoption of digital products.
Previous report
•lower royalty costs of approximately $1.1 million, primarily due to lower royalties in the K-12 and International segments resulting from a decrease in revenue, partially offset by higher royalty costs in the Higher Education segment, resulting from changes in the product sales mix and the timing of deferred royalty cost recognition, consistent with the growth in Re-occurring Revenue.
Previous report
Operating and administrative expenses for the three months ended September 30, 2025 and 2024 was $299.5 million and $277.6 million, respectively, representing an increase of $21.9 million, or 7.9%. The increase was primarily due to:
Previous report
•higher salaries and wages of approximately $7.3 million, primarily due to an annual merit-based compensation increase; and
Previous report
•lower selling and marketing expense of approximately $6.5 million, driven by lower depository and sales force sales commission, due to the decrease in revenue primarily resulting from a smaller market opportunity in the K-12 segment;
Previous report
•lower technology-related expenses of approximately $3.7 million, primarily due to lower usage of cloud-based solutions;
Previous report
•lower manufacturing, royalty, freight and other direct fulfillment costsof approximately $18.3 million, attributable to lower Transactional Revenue from print offerings;
Previous report
•higher royalty and other direct costs of approximately $4.4 million, consistent with the growth in revenue;
Previous report
•higher allowance for credit losses of approximately $2.2 million, due to the increase in the accounts receivable balance of customers with higher risk characteristics;
Previous report
•higher selling and marketing expense, driven by higher sales force sales commission of approximately $0.7 million, consistent with the growth in revenue.
Previous report
Global Professional Adjusted EBITDA for the three months ended September 30, 2025 and 2024 was $11.5 million and $12.9 million, respectively, representing a decrease of $1.4 million or 11.2%. The decrease wasprimarily due to higher manufacturing cost of approximately $0.8 million, driven by product sales mix, higher salaries and wages of approximately $0.7 million, primarilydue to an annual merit-based compensation increase, and thedecrease in revenue of $0.6 millionas discussed under “—Consolidated Operating Results for the Three Months Ended September 30, 2025 and 2024—Global Professional”. This decrease waspartially offset bylower allocation of shared corporate costs of approximately $0.8 million, driven by current period factors such as headcount, revenue and the allocable cost base.
Previous report
International Adjusted EBITDA for the three months ended September 30, 2025 and 2024 was $7.4 million and $11.2 million, respectively, representing a decrease of $3.9 million, or 34.3%. The decrease was primarily due to:
Previous report
Consolidated Operating Results for the Six Months Ended September 30, 2025 and 2024
Previous report
K-12 revenue for the six months ended September 30, 2025 and 2024 was $630.1 million and $679.5 million, respectively, representing a decrease of $49.4 million, or 7.3%. The decrease was primarily attributable to lower Transactional Revenue of approximately $72.2 million, driven by a smaller market opportunity in the current period. This decrease was partially offset by an increase in Re-occurring Revenue of approximately $22.8 million, primarily due to the timing of deferred revenue recognition associated with prior year sales in the California, Texas and Florida markets.
Previous report
International revenue for the six months ended September 30, 2025 and 2024 was $101.8 million and $113.5 million, respectively, representing a decrease of $11.7 million, or 10.3%. The decrease was driven by lower Transactional Revenue and Re-occurring Revenue of approximately $8.7 million and $3.0 million, respectively, as a result of a smaller market opportunity in Spain and lower enrollments in Canada.
Previous report
•higher royalty costs of approximately $2.2 million, primarily resulting from changes in the product sales mix and the timing of deferred royalty cost recognition in the Higher Education segment, consistent with the growth in Re-occurring Revenue.
Previous report
Operating and administrative expenses for the six months ended September 30, 2025 and 2024 was $541.0 million and $523.9 million, respectively, representing an increase of $17.2 million, or 3.3%. The increase was primarily due to:
Previous report
•higher salaries and wages of approximately $12.0 million, primarily due to an annual merit-based compensation increase; and
Previous report
•lower technology-related expenses of approximately $8.6 million, primarily due to lower usage of cloud-based solutions;
Previous report
•lower selling and marketing expense of approximately $4.1 million, driven by lower sales force sales commission, due to the decrease in revenue resulting from a smaller market opportunity in the K-12 segment;
Previous report
•lower temporary labor cost of approximately $1.7 million, resulting from reduced contractor usage in the current period, driven by lower revenue.
Previous report
•higher salaries and wages of approximately $2.9 million, primarilydue to an annual merit-based compensation increase; partially offset by
Previous report
•lower manufacturing, royalty, freight and other direct fulfillment costsof approximately $27.5 million, attributable to lower Transactional Revenue from print offerings;
Previous report
•higher royalty and other direct costs of approximately $9.6 million, consistent with the growth in revenue;
Previous report
•higher allocation of shared corporate costs of approximately $9.5 million, driven by current period factors such as headcount, revenue and the allocable cost base;
Previous report
•higher selling and marketing expense driven by higher sales force sales commission of approximately $3.3 million, consistent with the growth in revenue;
Previous report
International Adjusted EBITDA for the six months ended September 30, 2025 and 2024 was $14.6 million and $24.1 million, respectively, representing a decrease of $9.5 million, or 39.5%. The decrease was primarily due to:
Previous report
•a decrease in revenue of $11.7 millionas discussed under “—Consolidated Operating Results for the Six Months Ended September 30, 2025 and 2024—International”; and
Previous report
•higher salaries and wages of approximately $1.3 million, primarily due to an annual merit-based compensation increase; partially offset by
Previous report
(e) Represents accelerated amortization of debt discount and deferred financing costs related to the A&E Term Loan Facility paydown from IPO proceeds.
Reworded paragraphs (75)
Previous wording
For the six months ended September 30, 2025 and 2024, we generated revenue of $1,204.9 million and $1,211.5 million, respectively, and a net income (loss) of $105.8 million and $124.0 million, respectively. For the six months ended September 30, 2025 and 2024, we generated Adjusted EBITDA of $477.8 million and $468.9 million, respectively. See “—Key Operating Metrics” and “—Non-GAAP Financial Measures.”
Current wording
For the nine months ended December 31, 2025 and 2024, we generated revenue of $1,639.1 million and $1,628.0 million, respectively, and a net income (loss) of $85.6 million and $71.0 million, respectively. For the nine months ended December 31, 2025 and 2024, we generated Adjusted EBITDA of $613.7 million and $595.1 million, respectively. See “—Key Operating Metrics” and “—Non-GAAP Financial Measures.”
Previous wording
Our K-12 segment represented 52% and 56% of total revenue for the six months ended September 30, 2025 and 2024, respectively. Our Higher Education segment represented 33% and 29% of total revenue for the six months ended September 30, 2025 and 2024, respectively. Our Global Professional segment represented 6% of total revenue for each of the six months ended September 30, 2025 and 2024, respectively. Our International segment represented 8% and 9% of total revenue for the six months ended September 30, 2025 and 2024, respectively. The remaining total revenue relates to adjustments made for in-transit product sales, which are included in the segment “Other.”
Current wording
Our K-12 segment represented 46% and 51% of total revenue for the nine months ended December 31, 2025 and 2024, respectively. Our Higher Education segment represented 38% and 32% of total revenue for the nine months ended December 31, 2025 and 2024, respectively. Our Global Professional segment represented 7% of total revenue for each of the nine months ended December 31, 2025 and 2024, respectively. Our International segment represented 9% and 10% of total revenue for the nine months ended December 31, 2025 and 2024, respectively. The remaining total revenue relates to adjustments made for in-transit product sales, which are included in the segment “Other.”
Previous wording
Re-occurring Revenue represents revenue from offerings that are generally sold as digital subscriptions and multi-year print products. Revenue from digital subscriptions, which are paid for at the time of sale or shortly thereafter, is recognized ratably over the term of the subscription period as the performance obligation is satisfied. For multi-year print products (e.g., workbooks), which are paid for at the beginning of the contract period, each academic year represents a distinct performance obligation. Revenue is recognized upon delivery to the customer for each respective academic year. Re-occurring Revenue serves as a key operating metric used by management as it offers valuable insight into the subscription-based nature of our business. For the six months ended September 30, 2025 and 2024, Re-occurring Revenue represented approximately 67% and 63% of total revenue, respectively.
Current wording
Re-occurring Revenue represents revenue from offerings that are generally sold as digital subscriptions and multi-year print products. Revenue from digital subscriptions, which are paid for at the time of sale or shortly thereafter, is recognized ratably over the term of the subscription period as the performance obligation is satisfied. For multi-year print products (e.g., workbooks), which are paid for at the beginning of the contract period, each academic year represents a distinct performance obligation. Revenue is recognized upon delivery to the customer for each respective academic year. Re-occurring Revenue serves as a key operating metric used by management as it offers valuable insight into the subscription-based nature of our business. For the nine months ended December 31, 2025 and 2024, Re-occurring Revenue represented approximately 71% and 66% of total revenue, respectively.
Previous wording
Transactional Revenue includes revenue from both print and digital offerings. Revenue from print offerings is recognized at the point of shipment and revenue from digital offerings are recognized at the time of delivery. In addition, revenues for amounts billed to customers in a sales transaction for shipping and handling are included in Transactional Revenue. For the six months ended September 30, 2025 and 2024, Transactional Revenue represented approximately 33% and 37% of total revenue, respectively.
Current wording
Transactional Revenue includes revenue from both print and digital offerings. Revenue from print offerings is recognized at the point of shipment and revenue from digital offerings are recognized at the time of delivery. In addition, revenues for amounts billed to customers in a sales transaction for shipping and handling are included in Transactional Revenue. For the nine months ended December 31, 2025 and 2024, Transactional Revenue represented approximately 29% and 34% of total revenue, respectively.
Previous wording
Re-occurring Revenue and Transactional Revenue for the Three and Six Months Ended September 30, 2025 and 2024
Current wording
Re-occurring Revenue and Transactional Revenue for the Three and Nine Months Ended December 31, 2025 and 2024
Previous wording
Revenue for the three months ended September 30, 2025 and 2024 was $669.2 million and $688.6 million, respectively, representing a decrease of $19.4 million, or 2.8%. The decrease was driven by the segment factors described below.
Current wording
Revenue for the three months ended December 31, 2025 and 2024 was $434.2 million and $416.5 million, respectively, representing an increase of $17.7 million, or 4.2%. The increase was driven by the segment factors described below.
Previous wording
Higher Education revenue for the three months ended September 30, 2025 and 2024 was $213.0 million and $186.9 million, respectively, representing an increase of $26.1 million, or 14.0%. The increase was primarily due to:
Current wording
Higher Education revenue for the three months ended December 31, 2025 and 2024 was $225.4 million and $181.8 million, respectively, representing an increase of $43.6 million, or 24.0%. The increase was primarily due to:
Previous wording
•higher Re-occurring Revenue of approximately $29.6 million, due to the timing of deferred revenue recognition associated with the increased adoption of digital products, including 37% growth in Inclusive Access sales, market share gains, continued growth in U.S. enrollments and price increases; and
Current wording
•higher Re-occurring Revenue of approximately $49.2 million, due to the timing of deferred revenue recognition associated with the increased adoption of digital products, including growth in Inclusive Access sales, market share gains, continued growth in U.S. enrollments and price increases; partially offset by
Previous wording
Global Professional revenue for the three months ended September 30, 2025 and 2024 was $39.8 million and $40.4 million, respectively, representing a decrease of $0.6 million, or 1.5%. The decrease was primarily due to lower Transactional Revenue of approximately $1.9 million, reflecting the continued execution of the strategic initiative to sunset non-core print titles and to focus on core digital re-occurring products. This decrease was partially offset by an increase in digital Re-occurring Revenue of approximately $1.3 million.
Current wording
Global Professional revenue for the three months ended December 31, 2025 and 2024 was $36.2 million and $35.5 million, respectively, representing an increase of $0.7 million, or 2.0%. The increase was primarily due to higher Re-occurring Revenue of approximately $0.9 million due to the continued focus on core digital products. This increase was partially offset by lower Transactional Revenue of approximately $0.1 million, reflecting the continued execution of the strategic initiative to sunset non-core print titles.
Previous wording
•higher salaries and wages of approximately $2.1 million, primarilydue to an annual merit-based compensation increase; and
Current wording
International revenue for the three months ended December 31, 2025 and 2024 was $44.1 million and $44.9 million, respectively, representing a decrease of $0.8 million, or 1.8%. The decrease was driven by lower Re-occurring Revenue of approximately $2.1 million, resulting primarily from lower enrollments in
Previous wording
Cost of sales (excluding depreciation and amortization) for the three months ended September 30, 2025 and 2024 was $139.1 million and $153.4 million, respectively, representing a decrease of $14.3 million, or 9.3%. The decrease was primarily due to:
Current wording
Cost of sales (excluding depreciation and amortization) for the three months ended December 31, 2025 and 2024 was $63.8 million and $65.3 million, respectively, representing a decrease of $1.4 million, or 2.2%. The decrease was primarily due to:
Previous wording
•lower manufacturing, freight and other direct fulfillment costsof approximately $13.1 million, primarily attributable to lower Transactional Revenue from print offerings in the K-12 and International segments due to smaller market opportunities in the current period; and
Current wording
•lower manufacturing, royalty and other direct fulfillment costsof approximately $8.3 million, primarily attributable to lower Transactional Revenue from print offerings in the K-12 and International segments due to smaller market opportunities in the current period; and
Previous wording
•higher stock-based compensation of approximately $31.1 million, due to the recognition of cumulative stock-based compensation expense in connection with the Company’s IPO;
Current wording
•higher stock-based compensation of approximately $0.7 million, due to the recognition of stock-based compensation expense in connection with our initial public offering; partially offset by
Previous wording
Depreciation and amortization expenses for the three months ended September 30, 2025 and 2024 were $74.1 million and $78.5 million, respectively, representing a decrease of $4.4 million, or 5.6%. The decrease was driven primarily by lower amortization expense related to the use of an accelerated method of amortization for our content intangible assets.
Current wording
Depreciation and amortization expenses for the three months ended December 31, 2025 and 2024 were $82.7 million and $77.0 million, respectively, representing an increase of $5.7 million, or 7.5%. The increase was driven primarily by the accelerated depreciation of leasehold improvements associated with the sublease of a portion of our New York office space, partially offset by lower amortization expense related to the use of an accelerated method of amortization for our content intangible assets.
Previous wording
Interest expense (income), net, for the three months ended September 30, 2025 and 2024 was $55.9 million and $80.1 million, respectively, representing a decrease of $24.2 million, or 30.2%. The decrease was primarily driven by the refinancing of the A&E Term Loan Facility in August 2024, which reduced variable rate indebtedness by $749.6 million, the repayment of$385.7 million of debt outstanding under the A&E Term Loan Facility using net proceeds from the Company's IPO on July 25, 2025, and a lower variable interest rate during the current period compared to the prior-year period. These decreases were partially offset by higher interest expense resulting from the issuance of $650.0 million in aggregate principal amount of 2024 Secured Notes in August 2024.
Current wording
Interest expense (income), net, for the three months ended December 31, 2025 and 2024 was $47.4 million and $68.9 million, respectively, representing a decrease of $21.5 million, or 31.2%. The decrease was primarily driven by the repayment of$385.7 million of debt outstanding under the A&E Term Loan Facility using net proceeds from our initial public offering on July 25, 2025, as well as the repayment of an additional$200.0 million of debt outstanding under the A&E Term Loan Facility during the third fiscal quarter of 2026 using cash on hand, and a lower variable interest rate during the current period compared to the prior-year period.
Previous wording
During the three months ended September 30, 2025, we recorded a loss on extinguishment of debt of$16.4 million, inclusive of the accelerated amortization of unamortized debt discount and deferred financing costs, in connection with the repayment of$385.7 million of debt outstanding under the A&E Term Loan Facility upon the closing of the Company's IPO on July 25, 2025.
Current wording
During thethree months ended December 31, 2025, we recorded a loss on extinguishment of debt of$8.1 million, inclusive of the accelerated amortization of unamortized debt discount and deferred financing costs, in connection with the repayment of$150.0 million and $50.0 million on October 16, 2025 and December 10, 2025, respectively, of debt outstanding under the A&E Term Loan Facility.
Previous wording
Income tax provision (benefit) for the three months ended September 30, 2025 and 2024 was $(21.1) million and $(37.2) million, respectively, and the effective tax rate was (25.0)% and (38.6)%, respectively.
Current wording
Income tax provision (benefit) for the three months ended December 31, 2025 and 2024 was $(5.0) million and $8.2 million, respectively, and the effective tax rate was 19.7% and (18.4)%, respectively.
Previous wording
For the six months ended September 30, 2025, the effective tax rate differed from the statutory rate due to the expected decrease in the valuation allowance on domestic deferred tax assets due to the enactment of the OBBBA. The acceleration of deductibility of software development, interest, and tangible personal property expenditures is expected to significantly reduce our domestic income tax payable for the fiscal year ending March 31, 2026. In addition, a valuation allowance continues to be recorded against certain foreign net deferred tax assets.
Current wording
For the three months ended December 31, 2025, the effective tax rate differed from the statutory rate due to the U.S. research and development tax credit and the expected decrease in the valuation allowance on domestic deferred tax assets due to the enactment of OBBBA. The acceleration of deductibility of software development, interest, and tangible personal property expenditures is expected to significantly reduce our domestic income tax payable for the fiscal year ending March 31, 2026. In addition, a valuation allowance continues to be recorded against certain foreign net deferred tax assets.
Previous wording
K-12 Adjusted EBITDA for the three months ended September 30, 2025 and 2024 was $172.0 million and $185.8 million, respectively, representing a decrease of $13.8 million, or 7.4%. The decrease was primarily due to:
Current wording
K-12 Adjusted EBITDA for the three months ended December 31, 2025 and 2024 was $10.5 million and $25.9 million, respectively, representing a decrease of $15.5 million, or 59.7%. The decrease was primarily due to:
Previous wording
•a decrease in revenue of approximately $45.5 millionas discussed under “—Consolidated Operating Results for the Three Months Ended September 30, 2025 and 2024—K-12”; partially offset by
Current wording
•a decrease in revenue of approximately $22.0 millionas discussed under “—Consolidated Operating Results for the Three Months Ended December 31, 2025 and 2024—K-12”; partially offset by
Previous wording
•lower allocation of shared corporate costs of approximately $6.6 million, driven by current period factors such as revenue, headcount and the allocable cost base; and
Current wording
•lower allocation of shared corporate costs of approximately $2.9 million, driven by current period factors such as revenue, headcount and the allocable cost base.
Previous wording
Higher Education Adjusted EBITDA for the three months ended September 30, 2025 and 2024 was $89.0 million and $78.8 million, respectively, representing an increase of $10.2 million, or 12.9%. The increase was primarily due to:
Current wording
Higher Education Adjusted EBITDA for the three months ended December 31, 2025 and 2024 was $107.8 million and $80.8 million, respectively, representing an increase of $26.9 million, or 33.3%. The increase was primarily due to:
Previous wording
•an increase in revenue of$26.1 million as discussed under “—Consolidated Operating Results for the Three Months Ended September 30, 2025 and 2024—Higher Education”; partially offset by
Current wording
•an increase in revenue of$43.6 million as discussed under “—Consolidated Operating Results for the Three Months Ended December 31, 2025 and 2024—Higher Education”; partially offset by
Previous wording
•higher allocation of shared corporate costs of approximately $4.8 million, driven by current period factors such as revenue, headcount and the allocable cost base;
Current wording
•higher allocation of shared corporate costs of approximately $7.6 million, driven by current period factors such as revenue, headcount and the allocable cost base; and
Previous wording
•lower temporary labor cost of approximately $1.7 million, resulting from reduced contractor usage in the current period, driven by lower revenue.
Current wording
•higher selling and marketing expense, driven by higher sales force sales commission of approximately $1.7 million, consistent with the growth in revenue.
Previous wording
•higher salaries and wages of approximately $0.7 million, primarily due to an annual merit-based compensation increase; partially offset by
Current wording
•higher salaries and wages of approximately $0.7 million, primarily due to an annual merit-based compensation increase.
Previous wording
Revenue for the six months ended September 30, 2025 and 2024 was $1,204.9 million and $1,211.5 million, respectively, representing a decrease of $6.6 million, or 0.5%. The decrease was driven by the segment factors described below.
Current wording
Revenue for the nine months ended December 31, 2025 and 2024 was $1,639.1 million and $1,628.0 million, respectively, representing an increase of $11.0 million, or 0.7%. The increase was driven by the segment factors described below.
Previous wording
K-12 revenue for the three months ended September 30, 2025 and 2024 was $359.1 million and $404.6 million, respectively, representing a decrease of $45.5 million, or 11.2%. The decrease was primarily attributable to lower Transactional Revenue of approximately $51.4 million, driven by a smaller market opportunity in the current period. This decrease was partially offset by an increase in Re-occurring Revenue of approximately $5.9 million, primarily due to the timing of deferred revenue recognition associated with prior year sales in the California, Texas and Florida markets.
Current wording
K-12 revenue for the nine months ended December 31, 2025 and 2024 was $758.3 million and $829.7 million, respectively, representing a decrease of $71.4 million, or 8.6%. The decrease was primarily attributable to lower Transactional Revenue of approximately $92.3 million, driven by a smaller market opportunity in the current period. This decrease was partially offset by an increase in Re-occurring Revenue of approximately $20.9 million, primarily due to the timing of deferred revenue recognition associated with prior year sales in the California, Texas and Florida markets.
Previous wording
Higher Education revenue for the six months ended September 30, 2025 and 2024 was $395.3 million and $346.7 million, respectively, representing an increase of $48.6 million, or 14.0%. The increase was primarily due to:
Current wording
Higher Education revenue for the nine months ended December 31, 2025 and 2024 was $620.7 million and $528.5 million, respectively, representing an increase of $92.2 million, or 17.4%. The increase was primarily due to:
Previous wording
•higher Re-occurring Revenue of approximately $19.5 million, due to the timing of deferred revenue recognition associated with the increased adoption of digital products, including 37% growth in Inclusive Access sales, market share gains, continued growth in U.S. enrollments and price increases; and
Current wording
•higher Re-occurring Revenue of approximately $78.8 million, due to the timing of deferred revenue recognition associated with the increased adoption of digital products, including growth in Inclusive Access sales, market share gains, continued growth in U.S. enrollments and price increases; and
Previous wording
•higher digital and print Transactional Revenue of approximately $19.0 million, primarily due to growth in Inclusive Access sales and a reduction in product returns, respectively.
Current wording
•higher digital and print Transactional Revenue of approximately $13.4 million, primarily due to the growth in Inclusive Access sales and a reduction in product returns, respectively.
Previous wording
Global Professional revenue for the six months ended September 30, 2025 and 2024 was $75.0 million and $75.7 million, respectively, representing a decrease of $0.7 million, or 1.0%. The decrease was primarily due to lower Transactional Revenue of approximately $2.9 million, driven by the continued execution of the strategic initiative to sunset non-core print titles. This decrease was partially offset by an increase in digital Re-occurring Revenue of approximately $2.2 million, primarily attributable to the timing of deferred revenue recognition related to growth in digital subscriptions for our core products in the prior year.
Current wording
Global Professional revenue for the nine months ended December 31, 2025 remained consistent with the prior year at $111.2 million. Lower Transactional Revenue, driven by the continued execution of the strategic initiative to sunset non-core print titles, was offset by an increase in Re-occurring Revenue, primarily attributable to the timing of deferred revenue recognition related to growth in digital subscriptions for our core products sold in the prior year.
Previous wording
International revenue for the three months ended September 30, 2025 and 2024 was $50.3 million and $55.2 million, respectively, representing a decrease of $4.8 million, or 8.8%. The decrease was driven by lower Transactional Revenue and Re-occurring Revenue of approximately $3.8 million and $1.0 million, respectively, as a result of a smaller market opportunity in Spain and lower enrollments in Canada.
Current wording
International revenue for the nine months ended December 31, 2025 and 2024 was $145.9 million and $158.4 million, respectively, representing a decrease of $12.5 million, or 7.9%. The decrease was driven by lower Transactional Revenue and Re-occurring Revenue of approximately $7.4 million and $5.1 million, respectively, primarily resulting from lower enrollments in Canada. In addition, lower Transactional Revenue was also driven by the shift toward digital products in our Higher Education segment.
Previous wording
Cost of sales (excluding depreciation and amortization) for the six months ended September 30, 2025 and 2024 was $262.5 million and $278.6 million, respectively, representing a decrease of $16.2 million, or 5.8%. The decrease was primarily due to:
Current wording
Cost of sales (excluding depreciation and amortization) for the nine months ended December 31, 2025 and 2024 was $326.3 million and $343.9 million, respectively, representing a decrease of $17.6 million, or 5.1%. The decrease was primarily due to:
Previous wording
•lower manufacturing, freight and other direct fulfillment costsof approximately $17.9 million, attributable to lower Transactional Revenue from print offerings in the K-12 and International segments due to smaller market opportunities in the current period; partially offset by
Current wording
•lower manufacturing, royalty and other direct fulfillment costsof approximately $30.1 million, primarily attributable to lower Transactional Revenue from print offerings in the K-12 and International segments due to smaller market opportunities in the current period; and
Previous wording
•higher stock-based compensation of approximately $31.1 million, due to the recognition of cumulative stock-based compensation expense in connection with the Company’s IPO;
Current wording
•higher stock-based compensation of approximately $31.7 million, due to the recognition of cumulative stock-based compensation expense in connection with our initial public offering;
Previous wording
•higher allowance for credit losses of approximately $2.9 million, due to the increase in the accounts receivable balance of customers with higher risk characteristics; partially offset by
Current wording
•higher allowance for credit losses of approximately $2.3 million, due to the increase in the accounts receivable balance of customers with higher risk characteristics; partially offset by
Previous wording
•lower allocation of shared corporate costs of approximately $10.6 million, driven by current period factors such as headcount, revenue and the allocable cost base; and
Current wording
•lower technology-related expenses of approximately $10.6 million, primarily driven by ongoing cost optimization initiatives, including infrastructure rationalization and the migration of on-premise data centers to cloud-based platforms;
Previous wording
•lower annual incentive compensation expense of approximately $6.9 million, primarily reflecting the higher incentive payments recognized in the prior year, which were driven by a stronger than expected business performance;
Current wording
•lower annual incentive compensation expense of approximately $6.3 million, primarily reflecting the higher incentive payments recognized in the prior year, which were driven by a stronger than expected business performance;
Previous wording
•lower other expenses of approximately $1.8 million, primarily due to foreign exchange income, resulting from favorable fluctuations in foreign currency exchange rates; and
Current wording
•lower other expenses of approximately $2.3 million, primarily due to foreign exchange losses, resulting from unfavorable fluctuations in foreign currency exchange rates; and
Showing the first 40 of 75 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (12)
Previous report — wording carried elsewhere
•lower annual incentive compensation expense of approximately $2.2 million, primarily reflecting the higher incentive payments recognized in the prior year, which were driven by a stronger than expected business performance; and
Previous report — wording carried elsewhere
•higher research and development expense of approximately $0.8 million, reflecting continued investment in platform enhancements and product development initiatives; and
Previous report — wording carried elsewhere
•higher allowance for credit losses of approximately $2.2 million, due to the increase in the accounts receivable balance of customers with higher risk characteristics; partially offset by
Previous report — wording carried elsewhere
•a gain of approximately $2.6 million, resulting from the settlement of a copyright infringement litigation in the current period;
Previous report — wording carried elsewhere
•lower general and administrative expense of approximately $1.8 million, due to reduced restructuring activities in the current period, resulting in lower severance and related costs;
Previous report — wording carried elsewhere
During the six months ended September 30, 2025, we recorded a loss on extinguishment of debt of$16.4 million, inclusive of the accelerated amortization of unamortized debt discount and deferred financing costs, in connection with the repayment of$385.7 million of debt outstanding under the A&E
Previous report — wording carried elsewhere
During the six months ended September 30, 2024, in connection with the 2024 Refinancing Transactions, we recorded a loss on extinguishment of debt of $2.7 million, inclusive of write-offs of then-existing unamortized debt discount and deferred financing fees of $1.0 million and $0.3 million, respectively, and new debt discount fees of $1.4 million.
Previous report — wording carried elsewhere
•lower selling and marketing expense, driven by lower sales force sales commission of approximately $6.3 million, due to the decrease in revenue resulting from a smaller market opportunity in the current period.
Previous report — wording carried elsewhere
•higher other expenses of approximately $3.5 million, primarily reflecting increased business activity to support growth and operational execution;
Previous report — wording carried elsewhere
•higher allowance for credit losses of approximately $2.1 million, due to the increase in the accounts receivable balance of customers with higher risk characteristics.
Previous report — wording carried elsewhere
•higher allocation of shared corporate costs of approximately $1.9 million, driven by current period factors such as headcount, revenue and the allocable cost base; and
Previous report — wording carried elsewhere
•lower manufacturing and royalty costs of approximately $5.5 million, attributable to lower Transactional Revenue from print sales.