Revenue growth remains inconsistent, fluctuating between a 2.0 percent contraction and a 4.2 percent expansion, while operating margins exhibit extreme volatility, swinging from -1.4 percent to 23.4 percent across recent quarters.
| Sales/Revenue | 2.1B | 2.1B | 1.96B | 1.95B | 1.79B | 1.54B | 1.58B | 1.6B | 1.72B | 1.74B | 1.83B |
| Revenue Growth % | 0.07% | 7.18% | 0.65% | 8.8% | 15.89% | -2.53% | -0.76% | -7.1% | -1.2% | -4.84% | - |
| Cost of Goods Sold | 401.14M | 422.29M | 420.33M | 464.56M | 418.52M | 336.54M | 358.28M | 394.53M | 426.64M | 427.41M | 479.47M |
| COGS % of Revenue | 19.08% | 20.1% | 21.44% | 23.85% | 23.38% | 21.79% | 22.61% | 24.71% | 24.82% | 24.56% | 26.22% |
| Gross Profit | 1.7B | 1.68B | 1.54B | 1.48B | 1.37B | 1.21B | 1.23B | 1.2B | 1.29B | 1.31B | 1.35B |
| Gross Margin % | 80.92% | 79.9% | 78.56% | 76.15% | 76.62% | 78.21% | 77.39% | 75.29% | 75.18% | 75.44% | 73.78% |
| Gross Profit Growth % | 1.35% | 9.02% | 3.84% | 8.13% | 13.54% | -1.49% | 2% | -6.97% | -1.54% | -2.71% | - |
| Operating Expenses | 1.08B | 1.37B | 1.38B | 1.67B | 1.81B | 958.66M | 1.17B | 1.17B | 1.2B | 1.21B | 1.25B |
| OpEx % of Revenue | 51.37% | 65.3% | 70.64% | 85.81% | 100.97% | 62.06% | 73.91% | 73.37% | 69.75% | 69.34% | 68.48% |
| Selling, General & Admin | 747.69M | 725.41M | 705.55M | 709.41M | 1.04B | 809.08M | 987.98M | 1.03B | 1.05B | 1.06B | 1.1B |
| SG&A % of Revenue | 35.56% | 34.52% | 35.99% | 36.42% | 57.87% | 52.38% | 62.34% | 64.39% | 61.17% | 61.01% | 60.3% |
| Research & Development | 0 | 284.43M | 263.42M | 278.1M | 0 | 35.35M | 37.81M | 5.5M | 0 | 0 | 0 |
| R&D % of Revenue | - | 13.54% | 13.44% | 14.28% | - | 2.29% | 2.39% | 0.34% | - | - | - |
| Other Operating Expenses | 1.08B | 362.36M | 415.88M | 683.88M | 771.58M | 114.23M | 145.49M | 137.92M | 147.57M | 145.01M | 149.56M |
| Operating Income | 276.78M | 306.81M | 155.3M | -188.17M | -435.89M | 249.51M | 55.2M | 30.69M | 93.37M | 106.08M | 96.88M |
| Operating Margin % | 13.16% | 14.6% | 7.92% | -9.66% | -24.35% | 16.15% | 3.48% | 1.92% | 5.43% | 6.1% | 5.3% |
| Operating Income Growth % | -9.79% | 97.56% | 182.53% | 56.83% | -274.7% | 351.98% | 79.87% | -67.13% | -11.98% | 9.5% | - |
| EBITDA | 638.7M | 669.16M | 521.68M | 183.71M | -155.98M | 334.19M | 151.01M | 135.77M | 202.88M | 218.91M | 221.67M |
| EBITDA Margin % | 30.37% | 31.85% | 26.61% | 9.43% | -8.71% | 21.63% | 9.53% | 8.5% | 11.8% | 12.58% | 12.12% |
| EBITDA Growth % | -4.55% | 28.27% | 183.96% | 217.78% | -146.67% | 121.31% | 11.22% | -33.08% | -7.32% | -1.24% | - |
| D&A (Non-Cash Add-back) | 361.92M | 362.36M | 366.38M | 371.88M | 279.92M | 84.68M | 95.8M | 105.08M | 109.51M | 112.83M | 124.79M |
| EBIT | 315.78M | 306.81M | 204.8M | 123.83M | 55.77M | 279.06M | 104.88M | 45.96M | 107.63M | 123.16M | 121.64M |
| Net Interest Income | -207.23M | -293.45M | -326.44M | -278.22M | -214.62M | -193.32M | -188.1M | -180.58M | -179.38M | -199.51M | -192.92M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 207.23M | 293.45M | 326.44M | 278.22M | 214.62M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -271.99M | -296.17M | -323.02M | -265.67M | -286.92M | -190.55M | -178.98M | -180.58M | -166.65M | -226.07M | -188.14M |
| Pretax Income | 43.79M | 10.64M | -167.72M | -453.84M | -722.82M | 58.96M | -123.78M | -149.89M | -73.28M | -119.98M | -91.26M |
| Pretax Margin % | 2.08% | 0.51% | -8.56% | -23.3% | -40.38% | 3.82% | -7.81% | -9.39% | -4.26% | -6.9% | -4.99% |
| Income Tax | 8.47M | 96.48M | 25.29M | -49.73M | -48.56M | 14.21M | 11.53M | 10.54M | 7.35M | 15.12M | 11.53M |
| Effective Tax Rate % | 19.34% | 906.61% | -15.08% | 10.96% | 6.72% | 24.1% | -9.31% | -7.03% | -10.03% | -12.6% | -12.63% |
| Net Income | 35.32M | -85.84M | -193.02M | -404.1M | -674.25M | 44.75M | -135.31M | -160.42M | -65.93M | -137.01M | -179.13M |
| Net Margin % | 1.68% | -4.08% | -9.85% | -20.75% | -37.66% | 2.9% | -8.54% | -10.05% | -3.84% | -7.87% | -9.8% |
| Net Income Growth % | 141.15% | 55.53% | 52.24% | 40.07% | -1606.71% | 133.07% | 15.66% | -143.32% | 51.88% | 23.52% | - |
| Net Income (Continuing) | 35.32M | -85.84M | -193.02M | -404.1M | -674.25M | 44.75M | -135.31M | -160.42M | -65.93M | -135.1M | -102.79M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -1.91M | -76.34M |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 0.19 | -0.45 | -1.01 | -2.12 | -3.53 | 3.86 | -11.77 | -14.09 | -5.85 | -12.03 | -9.22 |
| EPS Growth % | 142.22% | 55.45% | 52.36% | 39.94% | -191.45% | 132.8% | 16.47% | -140.85% | 51.37% | -30.48% | - |
| EPS (Basic) | 0.19 | -0.45 | -1.01 | -2.12 | -3.53 | 3.86 | -11.77 | -14.09 | -5.85 | -12.03 | -9.22 |
| Diluted Shares Outstanding | 183.67M | 191M | 191M | 191M | 191M | 11.62M | 11.5M | 11.38M | 11.27M | 11.23M | 11.15M |
| Basic Shares Outstanding | 183.47M | 191M | 191M | 191M | 191M | 11.6M | 11.5M | 11.38M | 11.27M | 11.39M | 19.44M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - |
High debt service burden
According to the provided income statement data, McGraw Hill's revenue exhibits significant quarterly volatility, peaking at 669.2 million dollars in 2026Q2, while recent year-over-year growth trends appear inconsistent, fluctuating between a 2.0 percent contraction and a 4.2 percent expansion across the most recent reporting periods.
The revenue profile is heavily dictated by the academic calendar, making quarter-over-quarter comparisons less meaningful than year-over-year analysis. Investors should monitor whether the shift toward recurring digital subscriptions can eventually smooth out these lumpy adoption cycles, as current figures suggest the business remains tethered to traditional institutional purchasing patterns.
Based on reported financial statements, McGraw Hill maintains a robust gross margin profile, consistently exceeding 80 percent in recent quarters, which highlights the inherent scalability of its digital platform delivery model despite the ongoing costs associated with legacy print operations and content development.
While the gross margin is impressive, the wide gap between these figures and the company's thin net margins suggests that the cost of maintaining the platform and supporting the sales force is substantial. This structural reality implies that the company's profitability is highly sensitive to volume, as any decline in digital adoption could rapidly erode the bottom line.
As reported in the income statement, McGraw Hill's operating income frequently fails to scale proportionally with gross profit, with operating margins swinging from a negative 1.4 percent in 2026Q4 to a peak of 23.4 percent in 2026Q2, indicating significant volatility in SG&A expense management.
The inability to consistently translate high gross margins into stable operating income suggests that the company's fixed-cost base remains elevated. This may indicate that management is still in a heavy investment phase, potentially prioritizing market share retention over immediate operating efficiency.
Based on the provided figures, McGraw Hill's net income is characterized by extreme inconsistency, with losses reaching 156.9 million dollars in 2025Q4, suggesting that non-operating items or significant interest expenses are heavily impacting the company's ability to generate a consistent bottom-line profit for shareholders.
The frequent swings between net losses and occasional profitability appear to be driven by factors beyond core operations, likely including debt service requirements or non-cash charges. Investors should investigate the nature of these recurring losses, as they may indicate a capital structure that is not yet optimized for sustainable earnings growth.
Data from recent filings suggests that while McGraw Hill is successfully transitioning to digital, the persistent net losses and high SG&A volatility raise questions about whether the platform-as-a-service model can truly overcome the company's legacy cost structure and debt-heavy financial profile in the long term.
Short-term observers may focus on the potential for margin compression if the company is forced to increase R&D spending to defend against AI-driven disruption. If the digital transition does not lead to a permanent reduction in operating expenses, the current valuation may be difficult to justify based on earnings power alone.
Quick answers to the most common questions about buying MH stock.
For fiscal year 2026, McGraw Hill, Inc. (MH) reported total revenue of $2.10B. This represents a 15.0% increase compared to $1.83B in 2016.
McGraw Hill, Inc. (MH) is profitable, generating $35.3M in net income for the fiscal year ending 2026 with a net profit margin of 1.7%.
McGraw Hill, Inc. (MH) reported an operating income of $276.8M, resulting in an operating profit margin of 13.2%. This margin reflects the operational efficiency of the business before interest and taxes.
McGraw Hill, Inc. (MH) generated $1.70B in gross profit for the year, representing a gross profit margin of 80.9%. This demonstrates the company's core pricing power and production efficiency.