McGraw Hill (NYSE:MH) Issues Earnings Results, Beats Expectations By $0.05 EPS

McGraw Hill (NYSE:MH) released its quarterly earnings data on Thursday. The company reported $0.75 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.70 by $0.05, FiscalAI reports. McGraw Hill had a net margin of 4.38% and a return on equity of 62.57%. The company had revenue of $632.21 million during the quarter. During the same period last year, the firm earned $1.40 earnings per share. McGraw Hill’s quarterly revenue was down 5.5% on a year-over-year basis.

Here are the key takeaways from McGraw Hill’s conference call:

• Second-quarter revenue fell 5.5% year over year, with K-12 revenue down 9.6%, primarily reflecting weaker capture rates in select math markets. Management said first-half results were tracking to expectations and reaffirmed its full-year guidance.
• Higher Education continued to gain share, with first-half revenue up 4.5% and recurring revenue up 9.8%, despite flat-to-lower enrollment. Across the company, first-half recurring revenue grew 3.7% and digital revenue grew 5.6%.
• Management highlighted early momentum for its K-12 ELA program ahead of a multiyear adoption cycle, citing above-target win rates and strong feedback. California math pilots were up fourfold year over year, while the company acknowledged recent math-market weakness.
• McGraw Hill announced integrations that make its content available through Microsoft Copilot and Anthropic’s Claude for Teachers, alongside other AI initiatives. Management said adoption is growing but monetization models are still developing, with AI expected to contribute to revenue and profitability beginning in fiscal 2028.
• The company generated $190 million in operating cash flow in the first half, paid down another $50 million of debt, and ended the quarter at 3.2x net leverage. It reaffirmed expectations for approximately $400 million of unlevered free cash flow for fiscal 2027 and remains focused on reducing leverage.

McGraw Hill Trading Down 3.3%

Shares of NYSE MH traded down $0.37 during midday trading on Friday, reaching $10.86. 958,107 shares of the stock were exchanged, compared to its average volume of 479,146. The stock has a market capitalization of $2.08 billion, a P/E ratio of 28.58 and a beta of -0.82. The company has a debt-to-equity ratio of 3.25, a quick ratio of 0.62 and a current ratio of 0.78. The company has a 50 day simple moving average of $13.20 and a 200 day simple moving average of $12.60. McGraw Hill has a twelve month low of $8.94 and a twelve month high of $18.00.

More McGraw Hill News

Here are the key news stories impacting McGraw Hill this week:

• Positive Sentiment: Adjusted EPS of $0.75 beat estimates of about $0.70–$0.73, while revenue of $632.2 million exceeded forecasts by roughly $2.9 million. Management also highlighted higher-education market-share gains and more than 100 million active curriculum licenses. McGraw Hill Q2 results
• Positive Sentiment: McGraw Hill is making its licensed K–12 curriculum available to school-district customers through Anthropic’s Claude for Teachers. The partnership could broaden access to its content, though the company did not quantify an expected financial contribution. McGraw Hill and Anthropic collaboration
• Neutral Sentiment: Fiscal 2027 revenue guidance is $2.12 billion–$2.18 billion, a range that brackets the roughly $2.15 billion analyst estimate. Fiscal 2027 revenue outlook
• Negative Sentiment: Revenue fell 5.5% from a year earlier, and adjusted EPS declined from $1.40 in the year-ago quarter. Separately, GAAP EPS was $0.45, missing the $0.48 estimate. These declines and the GAAP miss temper the headline adjusted-EPS beat. Q2 GAAP earnings and revenue

Analyst Upgrades and Downgrades

Several research analysts have recently commented on MH shares. Needham & Company LLC reissued a “buy” rating and issued a $19.00 price target on shares of McGraw Hill in a research report on Thursday, August 13th. BMO Capital Markets boosted their target price on shares of McGraw Hill from $16.00 to $17.00 and gave the stock an “outperform” rating in a report on Friday, August 14th. Weiss Ratings raised shares of McGraw Hill from a “sell (d)” rating to a “sell (d+)” rating in a research report on Friday, October 23rd. UBS Group raised their price target on shares of McGraw Hill from $14.00 to $15.00 and gave the company a “neutral” rating in a report on Friday, August 14th. Finally, Wall Street Zen downgraded shares of McGraw Hill from a “strong-buy” rating to a “buy” rating in a research report on Saturday. One research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average price target of $17.20.

Institutional Trading of McGraw Hill

A number of institutional investors and hedge funds have recently added to or reduced their stakes in the company. Legal & General Group Plc acquired a new position in McGraw Hill in the 2nd quarter valued at about $25,000. PNC Financial Services Group Inc. acquired a new position in shares of McGraw Hill in the first quarter worth $68,000. NewEdge Advisors LLC purchased a new stake in McGraw Hill during the 1st quarter worth about $84,000. Susquehanna International Group LLP purchased a new stake in shares of McGraw Hill during the second quarter worth approximately $147,000. Finally, State of Wyoming acquired a new stake in McGraw Hill in the second quarter valued at approximately $154,000.

About McGraw Hill

McGraw Hill was a diversified information and publishing company that operated across education, financial information and media. Its education business published textbooks, digital learning programs, assessment products and instructional resources for schools, colleges, universities and professional learners.

The company also owned Standard & Poor’s, which provided credit ratings, investment research, financial data and market indexes, including the S&P 500. Through these businesses, McGraw Hill served customers in the United States and international markets.

Founded in 1888 through the combination of publishing ventures established by James H.