NEW YORK: McGraw Hill, a global education technology company, reported a dip in total revenue for its fiscal second quarter Wednesday, citing an expected contraction in the K-12 market, though it highlighted strong growth in its digital and recurring revenue streams.
For the quarter ended Sept. 30, 2025, the company posted revenue of $669.2 million, a 2.8% decrease compared to the same period last year. Despite this, McGraw Hill leadership pointed to significant gains in its higher education division and the continued expansion of its digital platform as signs of a successful strategic pivot.
“Our fiscal second quarter performance highlights how McGraw Hill successfully empowered educators and learners during the back-to-school season with innovative and efficacious solutions,” said Simon Allen, McGraw Hill’s Chairman, President and CEO, in a statement.
Key financial metrics underscored the company’s shift toward a more digital and subscription-based model:
- Recurring revenue increased 6.5% year-over-year to $422.4 million, now accounting for 63% of total revenue.
- Digital revenue grew 7.6% to $352.2 million.
- The GAAP gross profit margin expanded to 79.2%, up nearly 150 basis points from the prior year.
The company’s performance was split across its main divisions. The Higher Education segment saw revenue jump 14% to $213 million, driven by record market share in the U.S. of 30%. Conversely, the K-12 segment revenue fell 11.2% to $359.1 million, which the company said was anticipated due to a smaller overall market.
“Our fiscal second quarter results highlight the strength, scalability, and diversity of our business model,” said Bob Sallmann, McGraw Hill’s Chief Financial Officer.
McGraw Hill also emphasized its progress in integrating artificial intelligence into its products. The company reported that its proprietary “AI Reader” tool recorded 11 million learning interactions during the quarter and that it launched four new AI-powered solutions. The company stated its internal AI content platform, “Scribe,” has already recouped its initial investment.
The company also strengthened its balance sheet, reducing its gross debt by $542 million year-to-date, which it said will generate over $40 million in annualized cash interest savings.
McGraw Hill, Inc. (NYSE: MH) provides educational content and software solutions from pre-kindergarten through professional learning.