McGraw Hill Q1 FY2027: Net Income Jumps to $57.9M, Revenue Up 2.6%

summarizeSummary

McGraw Hill reported Q1 FY2027 net income of $57.9 million, up from $0.5 million a year ago, with revenue up 2.6% to $549.9 million. The company also approved a $50 million share repurchase plan.

check_boxKey Events · Earnings and Guidance · MH

• Net Income Surges to $57.9M

  Q1 FY2027 net income reached $57.9 million, up from $0.5 million in the prior-year quarter, driven by revenue growth and a lower effective tax rate.

• Revenue Up 2.6% to $549.9M

  Higher Education revenue grew 9.6% to $199.8 million on digital adoption, while K-12 rose 1.3% to $274.4 million. International declined 12.1% to $45.2 million.

• Effective Tax Rate Drops to 15.5%

  The One Big Beautiful Bill Act accelerated deductions for software development and interest, reducing the tax provision to $10.7 million from $36.9 million a year ago.

• $50M Share Repurchase Plan Approved

  The board approved a plan on June 2, 2026 to repurchase up to $50 million of common stock from time to time.

auto_awesomeAnalysis · MH · Manufacturing

McGraw Hill's first quarter of fiscal 2027 shows a dramatic swing to profitability, with net income of $57.9 million compared to just $0.5 million a year ago. Revenue grew 2.6% to $549.9 million, driven by strong Higher Education digital adoption and K-12 deferred revenue recognition. The effective tax rate dropped from 98.7% to 15.5% due to the One Big Beautiful Bill Act, which accelerated deductions and reduced the valuation allowance. Operating cash flow turned positive at $0.6 million versus a $96.7 million outflow last year, though cash declined to $193.6 million from $253.5 million at March 31. The company also disclosed a new $50 million share repurchase plan approved in June, signaling confidence in the balance sheet. Legal overhangs remain: Florida is appealing the dismissal of its false claims case, and the Illinois qui tam case is awaiting a ruling on a motion to dismiss.