Q4 2026 McGraw Hill Inc Earnings Call Transcript
Key Points
- McGraw Hill Inc (MH) exceeded IPO expectations for revenue and adjusted EBITDA in fiscal year 2026.
- Recurring revenue grew by 6% and now represents over 73% of total revenue.
- The company launched eight AI learning tools, serving more than 7.5 million users, with three additional launches planned.
- Higher education segment saw a net dollar retention rate of 114% and achieved a record customer satisfaction level.
- McGraw Hill Inc (MH) reduced gross debt by $646 million, enhancing financial flexibility and lowering annualized cash interest expense by nearly $45 million.
- K-12 revenue declined by 9% year-over-year due to a smaller market opportunity and difficult prior year comparison.
- The California math adoption cycle has been slower than expected, with 80% of the market remaining undecided.
- International revenue declined 7% year-over-year due to macroeconomic pressures in select markets.
- The company recognized a $39 million impairment charge in the fourth quarter due to geopolitical and macroeconomic factors.
- McGraw Hill Inc (MH) anticipates being at the low end of the historical 25% to 30% capture rate range for K-12 in fiscal year 2027.
(video playing)
Good morning, and welcome to the McGraw Hill, Inc. earnings conference call. (Operator Instructions) As a reminder today's call is being recorded, and a written transcript and webcast replay will be made available in the Events and Presentations section of the company's Investor Relations website. Following the prepared remarks, we will open the call for questions.
I would now like to turn the call over to your host, Danielle Kloeblen, Treasurer and Senior Vice President, Investor Relations. Please go ahead, Danielle.
Good morning. Welcome to McGraw Hill's fiscal fourth-quarter and full-year ended March 31, 2026, earnings call. Joining me today are Simon Allen, Chair of the Board of Directors; Philip Moyer, President and Chief Executive Officer; and Bob Sallmann, Executive Vice President and Chief Financial Officer.
During today's call, we will be making forward-looking statements that are based on our current expectations
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