McGraw Hill (MH) Q3 2026 earnings summary

Executive summary

• Q3 2026 revenue rose 4.2% year-over-year to $434.2M, led by 24% growth in Higher Education and strong digital expansion.

• Recurring revenue increased 14.8% year-over-year to $357.5M, now 82% of total revenue; digital revenue up 11% to $364M, representing 84% of total revenue.

• Adjusted EBITDA for Q3 was $135.9M, margin up nearly 100 bps to 31.3%.

• Leadership transition: Simon Allen retired as CEO, succeeded by Philip Moyer, with Allen remaining as Chair.

• Company continues to invest in AI-powered solutions and integrated platforms to drive growth and market share.

Financial highlights

• Q3 total revenue: $434.2M, up 4.2% year-over-year; year-to-date revenue up 0.7%.

• Recurring revenue: $357.5M, up 14.8% year-over-year, 82% of total revenue.

• Digital revenue: $364M, up 11% year-over-year.

• Gross profit margin expanded nearly 100 bps to 85.3%.

• Adjusted EBITDA: $135.9M, 31.3% margin, up nearly 100 bps year-over-year.

• Cash and cash equivalents at December 31, 2025 were $514.4M; total liquidity $964M.

• Net income loss for Q3 was $(20.2)M, an improvement from $(52.9)M in the prior year.

Outlook and guidance

• FY26 revenue guidance raised to $2,067M–$2,087M; recurring revenue $1,516M–$1,526M; Adjusted EBITDA $729M–$739M.

• Unlevered Free Cash Flow expected to slightly exceed low end of 50%-100% Adjusted EBITDA conversion.

• CapEx and product development to remain at 8%-9% of revenue.

• Confident in FY26 and foundation for FY27, with a return to revenue growth and continued margin expansion.

• RPO at $1.7B, providing strong future revenue visibility.