Share count
184Mpeak FY2026
← All companies ← MGY Manual MHK → ← DJCO Publishing NWS →
MH, McGraw Hill Inc.
Publishing diversified
McGraw Hill is a leading global provider of education solutions for K-12, higher education and professional learning markets.
McGraw Hill operates at the intersection of proprietary content, software and data, using artificial intelligence to deliver personalized learning experiences at global scale, driving positive outcomes throughout the entire learning lifecycle.
For more than 137 years, McGraw Hill has built one of the world's most recognized education brands with over 100 million active student and educator curriculum licenses worldwide.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2026
$2.1B
+0.1% YoY
Vital signs · TTM, with 3-yr average
Revenue $2.1B 3-yr avg $2.1B
Revenue $434M +4.2% vs yr-ago qtr
Operating margin 7.0% yr-ago 5.8%
Net income ($20M) yr-ago ($53M)
Net margin −4.7% yr-ago −12.7%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Operating margin has run about 13% through the cycle, a solid margin the cost base and competition set as much as the price does. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has sat near the cost of capital (median 7%). By owner earnings: roughly 12% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2024–2026
realized figures from each filing · older years to the left| 2024’24 | 2025’25 | 2026’26 | TTMTTMMar 2026 | |
|---|---|---|---|---|
| Income statement | ||||
| $2.0B | $2.1B | $2.1B | $2.1B | RevenueRevenue |
| 17% | 16% | 18% | 18% | SG&A / revenueSG&A/rev |
| 13% | 14% | 13% | 13% | R&D / revenueR&D/rev |
| $155M | $307M | $277M | $277M | Operating incomeOp. inc. |
| 7.9% | 14.6% | 13.2% | 13.2% | Operating marginOp. mgn |
| ($193M) | ($86M) | $35M | $35M | Net incomeNet inc. |
| — | — | 19% | 19% | Effective tax rateTax rate |
| Cash flow & returns | ||||
| $236M | $646M | $331M | $331M | Operating cash flowOp. cash |
| $366M | $362M | $362M | $362M | DepreciationDeprec. |
| $63M | $370M | ($100M) | ($100M) | Working capital & otherWC & other |
| $82M | $71M | $85M | $85M | CapexCapex |
| 4.2% | 3.4% | 4.0% | 4.0% | Capex / revenueCapex/rev |
| $154M | $575M | $246M | $246M | Owner earningsOwner earn. |
| 7.9% | 27.4% | 11.7% | 11.7% | Owner earnings marginOE mgn |
| $154M | $575M | $246M | $246M | Free cash flowFCF |
| 7.9% | 27.4% | 11.7% | 11.7% | Free cash flow marginFCF mgn |
| 74% | 5% | 7% | 7% | ROICROIC |
| -52% | -31% | 5% | 5% | Return on equityROE |
| −52% | −31% | 5% | 5% | Retained to equityRetained/eq |
| Balance sheet | ||||
| $204M | $390M | $254M | $254M | Cash & investmentsCash+inv |
| — | $338M | $362M | $362M | ReceivablesReceiv. |
| — | $174M | $195M | $195M | InventoryInvent. |
| — | $147M | $127M | $127M | Accounts payablePayables |
| — | $366M | $431M | $431M | Operating working capitalOper. WC |
| — | $1.1B | $974M | $974M | Current assetsCur. assets |
| — | $1.3B | $1.3B | $1.3B | Current liabilitiesCur. liab. |
| — | 0.8× | 0.8× | 0.8× | Current ratioCurr. ratio |
| $2.6B | $2.6B | $2.5B | $2.5B | GoodwillGoodwill |
| — | $5.8B | $5.5B | $5.5B | Total assetsAssets |
| — | $3.2B | $2.6B | $2.6B | Total debtDebt |
| — | $2.8B | $2.3B | $2.3B | Net debt / (cash)Net debt |
| $369M | $280M | $726M | $726M | Shareholders’ equityEquity |
| 0.0% | 0.0% | 1.6% | 1.6% | Stock comp / revenueSBC/rev |
| $41M | — | $35M | $35M | Goodwill written downGW imp. |
| Per share | ||||
| 167M | 167M | 184M | 184M | Shares out (diluted)Shares |
| $11.77 | $12.61 | $11.45 | $11.45 | Revenue / shareRev/sh |
| $-1.16 | $-0.52 | $0.19 | $0.19 | EPS (diluted)EPS |
| $0.93 | $3.45 | $1.34 | $1.34 | Owner earnings / shareOE/sh |
| $0.93 | $3.45 | $1.34 | $1.34 | Free cash flow / shareFCF/sh |
| $0.49 | $0.43 | $0.46 | $0.46 | Cap. spending / shareCapex/sh |
| $2.21 | $1.68 | $3.95 | $3.95 | Book value / shareBVPS |
The year, in the company's words
the filing →Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction, and stated figures check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.
- International-6.7%
“International revenue for the fiscal years ended March 31, 2026 and 2025 was $186.7 million and $201.4 million, respectively, representing a decrease of $14.7 million, or 7.3%. The decrease was driven by lower Transactional Revenue and Re-occurring Revenue of approximately $9.9 million and $4.8 million, respectively, primarily resulting from lower enrollments in Canada, K-12 curriculum cycle reform in Spain and timing of sales.”
✓ figure matches the filed record
The record, charted
FY2024–2026Each measure over its full record; the current point and the worst year marked.
ROIC
7%low FY2025
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$246Mowner earningsvs.$35Mnet incomelow FY2024
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
FY2024FY2026
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business turned $35M of profit into $246M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2026 | FY2025 | FY2024 | |
|---|---|---|---|
| Reported net income | $35M | ($86M) | ($193M) |
| Depreciation & amortizationnon-cash charge added back | +$362M | +$362M | +$366M |
| Stock-based compensationreal costnon-cash, but a real cost | +$34M | — | — |
| Working capital & othertiming of cash in and out, other non-cash items | −$100M | +$370M | +$63M |
| Cash from operations | $331M | $646M | $236M |
| Capital expenditurecash put back in to keep running and to grow | −$85M | −$71M | −$82M |
| Owner earnings | $246M | $575M | $154M |
| Owner-earnings marginowner earnings ÷ revenue | 12% | 27% | 8% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $34M), owner earnings is nearer $213M.
Much of fiscal 2026's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2026 10-K · source on SEC EDGAR →
Will it survive?
- Interest expense not tagged in the data
What this means
No usable interest-expense line was tagged in the filing data, but the balance sheet carries real net debt — so the interest burden here is unknown, not absent. Read the debt on the net-debt check below.
- How heavy is the debt, net of cash? $2.3B · 8.4× operating profitHeavy net debtCash $254M − debt $2.6B
What this means
Netting $254M of cash and short-term investments against $2.6B of debt leaves $2.3B owed, about 8.4× a year's operating profit (9.3× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Below average through the cycle3-yr median, range 5%–74%; 7% latest = NOPAT $223M ÷ invested capital $3.0BIndustry peers: median -0%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 3 years (it ran 7% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Solid through the cycle3-yr median margin, range 8%–27%; latest $246M = operating cash $331M − maintenance capex $85MIndustry peers: median 2%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 12% of revenue this year, a 12% median across 3 years. Treating stock comp as the real expense it is (less $34M of SBC) leaves $213M.
- Cash-backedCash from ops $331M ÷ net income $35M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.23×HarvestingCapex $85M ÷ depreciation $362M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 1 of 3 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $2.1B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.77×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $2.6B vs ($293M) WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.42/share (latest year $0.18), the averaged base the calculator's gate runs on, and book value is $3.80/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Does AI threaten the moat?
Elevated contestabilityThe product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.
In its own filing Named as a competitive risk
Its FY2026 10-K names artificial intelligence as a competitive threat.
“Generative AI systems may make it easier for competitive instructional materials to be created which could negatively affect demand for or the pricing of our products.”
The product is the kind capable AI most directly contests: when a substitute can be built cheaply, the incumbent's pricing power is the first thing at risk. The record cannot say whether the moat outlasts that; past durability is a starting point, not a promise.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$974M
- Cash & short-term investments$254M
- Receivables$362M
- Inventory$195M
- Other current assets$163M
Current liabilities$1.3B
- Debt due within a year$13M
- Accounts payable$127M
- Other current liabilities$1.1B
Current ratio0.77×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.61×stricter: inventory excluded
Cash ratio0.20×strictest: cash alone against what's due
Working capital($293M)the cushion left after near-term bills
Its current ratio is below 1, which usually reads as strain; here it is likely structural strength. What it owes in the near term is money to suppliers and customers (payables and deferred revenue), not to lenders, so the balance sheet is funded by operating float, the way Costco's and Amazon's are. The low ratio can be the edge, not the risk; the cash-conversion cycle and the debt due above say which.
Debt due this year vs. cash$13M due · $254M cash
covered by cash on hand, no refinancing forced · both figures from the Mar 31, 2026 balance sheet
Revenue, latest quarter vs. a year ago+4.2%the freshest read on whether the business is still growing
Current ratio, recent quarters0.8× → 0.8×
Deeper floors
Tangible book value($1.8B)equity stripped of goodwill & intangibles
Net current asset value($3.8B)Graham's net-net: current assets less all liabilities
Debt incl. operating leases$2.6B$66M of it operating leases
Deferred revenue$1.7Bcustomer cash collected before delivery; operating float
From the company's latest filing.
Acquisitions & goodwill
from the balance sheet & the 3-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill$2.5B46% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth
Cash spent acquiring$0over 3 years buying other businesses, against $238M of capital spent building
$76M written down across 2 years (2024, 2026): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 3-year record, from the company's own filings.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid.
- Insider ownership<1%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$34M
The slice of the business handed to employees in shares this year, 2% of revenue, equal to 12% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What an owner would ask, FY2026
read the 10-K →- Which reported numbers are a judgment call?Management names Revenue recognition, Income taxes, Acquisitions, Stock compensation as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Publishing
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| NWSNews Corporation | $8.5B | — | 3.3% | 2% | 7% |
| CMPRCimpress plc Ordinary Shares (Ireland) | $3.4B | 49% | 4.6% | 8% | 7% |
| TDAYUSA TODAY Co. Inc. | $2.3B | 40% | 2.9% | -2% | 2% |
| MHMcGraw Hill Inc. | $2.1B | — | 13.2% | 7% | 12% |
| WBTNWEBTOON Entertainment Inc. | $1.4B | 24% | -6.0% | -8% | 0% |
| DJCODaily Journal Corp. (S.C.) | $88M | — | 0.6% | -0% | 1% |
| Group median | — | — | 3.1% | 1% | 5% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what McGraw Hill Inc. has delivered.
$
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · since FY2024+26%/yr
Owner-earnings growth · since FY2024+26%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’24–’26)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $246M on 191M shares outstanding, per the 10-K cover, as of 2026-06-04; net debt $2.3B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "McGraw Hill Inc. (MH), the owner's record," https://ownerscorecard.com/c/MH, data as of 2026-07-09.
Manual order: ← MGY its page in the Manual MHK →
Industry order: ← DJCO the Publishing chapter NWS →