McGraw Hill Reports Strong Digital Growth and Raises Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy MH?
Source: Fool
- Digital Revenue Growth: McGraw Hill's revenue for Q3 FY2026 increased by 4.2% year-over-year to $434.2 million, driven by an 11% rise in digital revenue to $363.7 million, showcasing the company's successful transition to digital education solutions and enhancing its market competitiveness.
- Margin Improvement: The company's gross margin improved to 85.3%, nearly a percentage point higher than the previous year, indicating that the shift to a digital learning platform not only boosted revenue but also significantly enhanced profitability and financial stability.
- Debt Repayment Capability: With EBITDA rising 8% to $135.9 million, McGraw Hill successfully paid down $200 million in debt, further strengthening its balance sheet and laying the groundwork for future investments and expansion.
- Raised Full-Year Guidance: Management raised its adjusted EBITDA outlook to $729 million to $739 million, reflecting positive business trends and confidence in future growth, demonstrating the company's ongoing innovation and market expansion capabilities in the education sector.
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Analyst Views on MH
Wall Street analysts forecast MH stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MH is 20.13 USD with a low forecast of 16.00 USD and a high forecast of 22.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
8 Buy
1 Hold
0 Sell
Strong Buy
Current: 12.340
Low
16.00
Averages
20.13
High
22.00
Current: 12.340
Low
16.00
Averages
20.13
High
22.00
About MH
McGraw Hill, Inc. is a global provider of information solutions for education across K-12 to higher education and through professional learning. Its segments include K-12, Higher Education, Global Professional, International, and Other. K-12 segment provides end-to-end core, supplemental and intervention curricula to support the needs of U.S. K-12 schools. The Company sells blended digital and print learning solutions directly to school districts across the United States. Higher Education segment provides students, instructors and institutions with adaptive digital learning solutions and content, and instructional materials. Global Professional provides students, institutions and professionals with comprehensive medical and engineering learning solutions. International segment is a provider of comprehensive digital and print solutions in more than 100 countries and 80 languages outside the United States. Other segment includes in-transit product sales and certain transactions.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Digital Revenue Growth: McGraw Hill's revenue for Q3 FY2026 increased by 4.2% year-over-year to $434.2 million, driven by an 11% rise in digital revenue to $363.7 million, showcasing the company's successful transition to digital education solutions and enhancing its market competitiveness.
- Margin Improvement: The company's gross margin improved to 85.3%, nearly a percentage point higher than the previous year, indicating that the shift to a digital learning platform not only boosted revenue but also significantly enhanced profitability and financial stability.
- Debt Repayment Capability: With EBITDA rising 8% to $135.9 million, McGraw Hill successfully paid down $200 million in debt, further strengthening its balance sheet and laying the groundwork for future investments and expansion.
- Raised Full-Year Guidance: Management raised its adjusted EBITDA outlook to $729 million to $739 million, reflecting positive business trends and confidence in future growth, demonstrating the company's ongoing innovation and market expansion capabilities in the education sector.
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- Significant Revenue Growth: The quarterly revenue reached $846.75 million, exceeding the Street estimate of $830.54 million and marking a 20.4% increase from $703.17 million in the same period last year, showcasing HubSpot's competitive strength in the market.
- Stock Price Surge: Following the positive earnings report, HubSpot's shares jumped 9.4% to $228.93 on Thursday, reflecting investor optimism about the company's growth potential and likely attracting more investor interest.
- Mixed Market Performance: While U.S. stocks showed mixed results overall, HubSpot's strong performance distinguished it among many stocks, demonstrating relative resilience and appeal in a fluctuating market.
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- Strong Earnings Performance: Fastly reported earnings of $0.12 per share, surpassing analyst expectations of $0.06, indicating a significant improvement in profitability and boosting market confidence in future growth.
- Significant Revenue Growth: The quarterly revenue reached $172.61 million, exceeding Wall Street's estimate of $161.36 million and up from $140.58 million in the same period last year, demonstrating the company's robust performance amid recovering market demand.
- Stock Price Surge: Fastly's shares jumped 34.8% to $12.55 in pre-market trading, reflecting a positive investor reaction to the earnings report, which may attract more investor interest in its future developments.
- Increased Market Confidence: The strong earnings report not only enhances investor confidence but may also prompt analysts to revise their ratings and price targets for the company, potentially driving further stock price increases.
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- Significant Revenue Growth: McGraw Hill reported total revenue of $434 million for Q3, reflecting a 4.2% year-over-year increase, with higher education revenue soaring by 24%, indicating strong momentum in the higher education market.
- Robust Recurring Revenue: The company noted recurring revenue of $357 million in Q3, up 14.8% year-over-year, representing 82% of total revenue, showcasing the success of its digital transformation and sustained market demand.
- Leadership Transition: Simon Allen announced his retirement as CEO, with Philip Moyer stepping in to focus on accelerating growth and maintaining brand trust, marking a strategic shift towards technology and educational innovation.
- Optimistic Financial Outlook: The company raised its fiscal 2026 revenue guidance, now anticipating total revenue between $2.067 billion and $2.087 billion, reflecting management's confidence in future growth, particularly in the K-12 market's potential opportunities.
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- Improved Financial Performance: McGraw Hill reported a Q3 loss of $20.20 million, a significant improvement from a loss of $52.93 million in the same period last year, indicating progress in cost control and operational efficiency.
- Earnings Per Share Recovery: The Q3 loss per share was $0.11, down from $0.32 in the previous year, reflecting a gradual recovery in profitability that may boost investor confidence.
- Revenue Growth: Q3 revenue reached $434.16 million, up from $416.49 million year-over-year, demonstrating the company's ability to achieve sales growth amid recovering market demand, further solidifying its market position.
- Guidance Upgrade: The company raised its FY26 revenue guidance to $2.067 billion to $2.087 billion from $2.031 billion to $2.061 billion, indicating management's optimistic outlook for future performance, which could attract more investor interest.
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- Performance Growth: McGraw Hill reported revenue of $434.2 million for Q3 2025, a 4.2% increase year-over-year, with Higher Education revenue rising 24% to $225.4 million, while K-12 revenue fell 14.6% to $128.2 million, indicating a divergence in the education market.
- Adjusted EBITDA Improvement: The adjusted EBITDA for Q3 reached $135.9 million with a margin of 31.3%, up approximately 100 basis points from the previous year, reflecting improvements in cost control and operational efficiency.
- Accelerated Debt Paydown: The company accelerated its debt repayment by prepaying $200 million in term loans during the quarter, indicating an improved financial health and providing greater flexibility for future investments.
- Guidance Upgrade: McGraw Hill raised its fiscal 2026 revenue guidance to $2.067–$2.087 billion and adjusted EBITDA guidance to $729–$739 million, demonstrating strong confidence in future growth driven by robust demand for digital products.
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