Financial Analysis

20. Commitments and Contingencies Legal Matters On August 12, 2025, the State of Florida filed a complaint in the Circuit Court for the Second Judicial Circuit in Leon County, Florida against McGraw Hill, LLC and Savvas Learning Company, LLC, alleging that defendants violated the Florida False Claims Act by purportedly charging certain Florida school districts the full published price for instructional materials while offering the same instructional materials at lower prices and/or for free to others and not extending those pricing advantages to all purchasing Florida school districts during the adoption period (the Florida Complaint). The Florida Complaint further alleges that by purportedly disregarding Floridas most-favored-nation pricing and mandatory free materials requirements, the defendants overcharged certain Florida school districts and withheld price reductions they were legally required to provide. On August 11, 2025, the Circuit Court for the Second Judicial Circuit in Leon County, Florida unsealed a qui tam complaint (the Florida Qui Tam Complaint), which had remained under seal pursuant to Florida law from its filing in May 2022 until the State of Florida intervened in the Florida Qui Tam suit. Prior to August 12, 2025, the Company had no knowledge of the Florida Qui Tam Complaint. The Florida Qui Tam Complaint alleges similar claims against McGraw Hill, LLC and Savvas Learning Company, LLC as those advanced in the Florida Complaint. The Florida Complaint and t …

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The following tables summarize the Company's revenue from contracts with its customers disaggregated by segment and product type for the fiscal years ended March 31, 2026, 2025 and 2024: Year Ended March 31, 2026 2025 Digital Print (1) Total Digital Print (1) Total Revenue by Segment: K-12 $ 429,644 $ 454,836 $ 884,480 $ 430,546 $ 539,938 $ 970,484 Higher Education 799,898 79,056 878,954 723,066 59,544 782,610 Global Professional 107,120 42,956 150,076 102,996 46,592 149,588 International 96,986 89,699 186,685 102,719 98,683 201,402 Other (2) 2,586 2,586 (2,785) (2,785) Total Revenue $ 1,433,648 $ 669,133 $ 2,102,781 $ 1,359,327 $ 741,972 $ 2,101,299 _______________ (1) Print revenue contains print and multi-year print products. (2) Includes in-transit product sales and intersegment revenue adjustments that are not included with segment revenues reviewed by the Company's CODM. Year Ended March 31, 2024 Digital Print (1) Total Revenue by Segment: K-12 $ 425,786 $ 479,069 $ 904,855 Higher Education 633,762 68,425 702,187 Global Professional 97,202 55,877 153,079 International 98,585 101,879 200,464 Other (2) (107) (107) Total Revenue $ 1,255,335 $ 705,143 $ 1,960,478 _______________ (1) Print revenue contains print and multi-year print products. (2) Includes in-transit product sales and intersegment revenue adjustments that are not included with segment revenues reviewed by the Company's CODM. Year Ended March 31, 2026 2025 Re-occurring Revenue Transactional Revenue Total Re-oc …

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"14. Stock-Based Compensation 2021 Stock Incentive Plan In 2021, the Company adopted the Management Stock Incentive Plan (the ""2021 Plan""), under which stock options were granted to employees, directors and consultants of the Company and its subsidiaries. The board of directors authorized up to 10,665,117 shares for issuance under the 2021 Plan. In connection with the initial public offering, no further awards may be granted under the 2021 Plan, however, the 2021 Plan continues to govern the terms and conditions of the outstanding awards granted pursuant thereto. Stock options granted under the 2021 Plan consisted of (i) awards subject to a service condition, which vest in five equal annual installments beginning on the first anniversary of the vesting commencement date, and subject to a performance condition, defined as the occurrence of a qualifying event (i.e., an initial public offering or change in control), and (ii) awards subject to a service condition, and a performance condition, defined as the occurrence of a qualifying event (i.e., an initial public offering or change in control) and a market condition (defined as Platinum realizing a multiple of at least 2.0 times its invested capital in the Company). All stock options under the 2021 Plan are exercisable only if vested and following the occurrence of a qualifying event (i.e., an initial public offering or change in control). The stock options terminate on the ten th anniversary from the date of the grant if they …

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7. Goodwill and Other Intangible Assets Goodwill The following table summarizes the changes in the carrying value of goodwill by reporting unit for the fiscal years ended March 31, 2026, 2025 and 2024: K-12 Higher Education Global Professional International Total As of March 31, 2023 $ 1,184,877 $ 990,022 $ 249,809 $ 173,387 $ 2,598,095 Impairment charge (40,500) (40,500) As of March 31, 2024 $ 1,184,877 $ 990,022 $ 209,309 $ 173,387 $ 2,557,595 Additions As of March 31, 2025 $ 1,184,877 $ 990,022 $ 209,309 $ 173,387 $ 2,557,595 Impairment charge (35,000) (35,000) As of March 31, 2026 $ 1,184,877 $ 990,022 $ 209,309 $ 138,387 $ 2,522,595 For the fiscal year ended March 31, 2026 As of March 31, 2026, the Company performed its annual goodwill impairment test and concluded that the estimated fair values of the K-12, Higher Education and Global Professional reporting units exceeded their respective carrying values. Accordingly, no goodwill impairment was recognized for these reporting units. However, due to uncertainty in macroeconomic and geopolitical conditions, including rising interest rates, foreign exchange volatility, and economic uncertainties in certain countries within the Middle East region in which the International reporting unit operates, the annual goodwill impairment test indicated that the carrying value of the International reporting unit exceeded its estimated fair value. As a result, the Company recorded a goodwill impairment charge of $35,000, representing th …

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"12. Taxes on Income (Loss) Income (loss) before taxes on income that resulted from domestic and foreign operations is as follows: Year Ended March 31, 2026 2025 2024 Domestic operations $ 27,922 $ (12,053) $ (186,045) Foreign operations 15,866 22,695 18,320 Total income (loss) before taxes $ 43,788 $ 10,642 $ (167,725) The provision (benefit) for taxes on income consisted of the following: Year Ended March 31, 2026 2025 2024 Federal: Current $ (1,868) $ 72,767 $ 36,679 Deferred (297) 131 (29,318) Total federal (2,165) 72,898 7,361 State and local: Current 4,770 15,450 14,342 Deferred 850 (567) (1,818) Total state and local 5,620 14,883 12,524 Foreign: Current 6,621 9,734 4,717 Deferred (1,608) (1,034) 692 Total foreign 5,013 8,700 5,409 Total provision (benefit) for taxes $ 8,468 $ 96,481 $ 25,294 We adopted ASU 2023-09, Income Taxes: ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , on a prospective basis beginning with the fiscal year ended March 31, 2026, as described in Note 1, Description of Business, Basis of Preparation and Summary of Significant Accounting PoliciesRecently Adopted Accounting Standards. Pursuant to the disclosure requirements of ASU 2023-09, a reconciliation of the U.S. federal statutory tax rate to the Company's effective income tax rate for the fiscal year ended March 31, 2026 is as follows: Year Ended March 31, 2026 Amount Percent U.S. federal statutory income tax rate $ 9,196 21.0 % State and local income taxes, net o …

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15. Leases The Company leases property under operating leases with expiration dates through 2040 as well as computer systems and office equipment under finance leases with lease terms ranging from 12 to 50 months. Lease Position as of March 31, 2026 and 2025 The table below presents the lease-related assets and liabilities recorded on the consolidated balance sheets: March 31, Balance Sheet Classification 2026 2025 Assets Operating leases Operating lease right-of-use assets $ 44,836 $ 49,661 Finance leases Property, plant and equipment, net 15,978 9,802 Total lease assets $ 60,814 $ 59,463 Liabilities Current: Operating leases Operating lease liabilities $ 8,365 $ 8,042 Finance leases Other current liabilities 6,172 4,631 Non-current: Operating leases Operating lease liabilities 57,301 64,737 Finance leases Other non-current liabilities 9,891 5,578 Total lease liabilities $ 81,729 $ 82,988 Weighted-average remaining lease term: Operating leases 8.26 9.21 Finance leases 2.91 2.67 Weighted-average incremental borrowing rate: Operating leases 10.90 % 10.96 % Finance leases 7.88 % 9.06 % Lease Costs The table below presents certain information related to the lease costs for operating and finance leases: Year Ended March 31, 2026 2025 2024 Operating lease cost $ 13,631 $ 15,604 $ 16,990 Short-term lease cost 830 1,073 1,404 Finance lease cost: Amortization of assets 5,995 4,869 14,583 Interest on lease liabilities 1,145 1,137 1,742 Sublease income (2,661) (2,792) (2,624) Total net …

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"10. Debt Long-term debt consisted of the following: March 31, Maturity 2026 2025 A&E Term Loan Facility August 2031 $ 554,840 $ 1,160,415 2022 Secured Notes August 2028 828,466 828,466 2022 Unsecured Notes August 2029 599,034 639,034 2024 Secured Notes September 2031 650,000 650,000 Total debt outstanding 2,632,340 3,277,915 Less: unamortized debt discount (48,089) (82,782) Less: unamortized deferred financing costs (10,383) (17,412) Less: current portion of long-term debt (13,170) (13,170) Long-term debt $ 2,560,698 $ 3,164,551 A&E Cash Flow Credit Facilities McGraw-Hill Education, Inc. and certain subsidiaries entered into a credit agreement dated July 30, 2021 (as amended from time to time, the Cash Flow Credit Agreement) which provides for (i) a term loan facility (the Term Loan Facility) and (ii) a revolving credit facility (the Cash Flow Revolving Credit Facility). Amendments and repayments under the Cash Flow Credit Agreement during the fiscal years ended March 31, 2026 and 2025 are described below. On August 6, 2024, McGraw-Hill Education, Inc. and certain subsidiaries amended its Cash Flow Credit Agreement which, among other things, (i) modified certain provisions therein, (ii) refinanced in full the outstanding term loans under the Term Loan Facility of $2,066,563 with new term loans in an aggregate principal amount of $1,317,000, including an extended maturity to August 6, 2031, (such facility as being refinanced, the A&E Term Loan Facility) and (iii) …

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"Recently Adopted Accounting Standards Beginning in the fiscal year ended March 31, 2026, we adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures on a prospective basis. This ASU improves the transparency of income tax disclosures primarily by requiring specified categories in the effective tax rate reconciliation and additional disaggregation of income taxes paid by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The adoption of this standard did not have a material impact on our consolidated financial statements. See Note 12, Taxes on Income (Loss) for the applicable disclosures required by this guidance. Recently Issued Accounting Standards In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires public entities to provide disaggregated disclosures of certain expense captions presented on the face of the income statement into specific expense categories within the notes to the consolidated financial statements, including inventory purchases, employee compensation, and depreciation and amortization. In January 2025, the FASB issued ASU 2025-01, Clarifying the Effective Date, which clarified that ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, or the Company's fiscal year ended March 31, 2028, and …

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13. Employee Benefits A majority of the Companys employees are participants in voluntary 401(k) plans sponsored by the Company under which the Company matches employee contributions up to certain levels of compensation. The Company's contributions was $17,219, $15,778 and $16,020 for the fiscal years ended March 31, 2026, 2025 and 2024, respectively. …

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19. Management Fee Platinum Advisory Fee Agreement The Company received certain corporate and advisory services from Platinum Equity Advisors LLC (Platinum Advisors), an entity affiliated with Platinum pursuant to a Corporate Advisory Services Agreement between McGraw Hill and Platinum Advisors (the Advisory Agreement). The Company agreed to pay Platinum Advisors a non-refundable annual management fee of $10,000 and to reimburse Platinum Advisors for its out-of-pocket costs and expenses incurred in connection with its services under the Advisory Agreement. Upon completion of the initial public offering on July 25, 2025, the Advisory Agreement was terminated. The Company paid Platinum Advisors fees of $3,125, $10,000 and $10,000 and reimbursed expenses of $792, $642 and $642 for the fiscal years ended March 31, 2026, 2025 and 2024, respectively. These amounts are included within Operating and administrative expenses in the consolidated statements of operations. As of March 31, 2026 and 2025, the amount payable pursuant to the Advisory Agreement was $0. …

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2. Revenue from Contracts with Customers Disaggregation of Revenue The following tables summarize the Company's revenue from contracts with its customers disaggregated by segment and product type for the fiscal years ended March 31, 2026, 2025 and 2024: Year Ended March 31, 2026 2025 Digital Print (1) Total Digital Print (1) Total Revenue by Segment: K-12 $ 429,644 $ 454,836 $ 884,480 $ 430,546 $ 539,938 $ 970,484 Higher Education 799,898 79,056 878,954 723,066 59,544 782,610 Global Professional 107,120 42,956 150,076 102,996 46,592 149,588 International 96,986 89,699 186,685 102,719 98,683 201,402 Other (2) 2,586 2,586 (2,785) (2,785) Total Revenue $ 1,433,648 $ 669,133 $ 2,102,781 $ 1,359,327 $ 741,972 $ 2,101,299 _______________ (1) Print revenue contains print and multi-year print products. (2) Includes in-transit product sales and intersegment revenue adjustments that are not included with segment revenues reviewed by the Company's CODM. Year Ended March 31, 2024 Digital Print (1) Total Revenue by Segment: K-12 $ 425,786 $ 479,069 $ 904,855 Higher Education 633,762 68,425 702,187 Global Professional 97,202 55,877 153,079 International 98,585 101,879 200,464 Other (2) (107) (107) Total Revenue $ 1,255,335 $ 705,143 $ 1,960,478 _______________ (1) Print revenue contains print and multi-year print products. (2) Includes in-transit product sales and intersegment revenue adjustments that are not included with segment revenues reviewed by the Company's CODM. In addition, the C …

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11. Segment Reporting The Company manages and reports its businesses in the following segments based on the end markets we serve: K-12 : The Company 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: The Company provides students, instructors and institutions with adaptive digital learning solutions and content, and instructional materials. The primary users of the Company's solutions are students enrolled in two-and four-year non-profit colleges and universities, and to a lesser extent, for-profit institutions. The Company sells its Higher Education solutions to well-known online retailers and distribution partners, who subsequently sell to students. The Company also sells direct to student via its proprietary e-commerce platform. Global Professional: The Company provides students, institutions and professionals with comprehensive medical and engineering learning solutions. Our learning solutions include digital solutions and print materials easily accessible through a broad range of mediums for learners and customers. International: The Company is a provider of comprehensive digital and print solutions in more than 100 countries and 80 languages outside of the United States. Through our expansive global distribution network, we serve the needs of learners and educators throughout the …

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16. Stockholders' Equity (Deficit) Following our initial public offering, Stock Conversion and Stock Split, our second amended and restated certificate of incorporation dated July 23, 2025, authorizes us to issue 2,100,000,000 shares consisting of (a) 100,000,000 shares of preferred stock with a par value of $0.01 per share (Preferred Stock) and (b) 2,000,000,000 shares of Common Stock with a par value of $0.01 per share. As of March 31, 2026, we had no shares of Preferred Stock issued or outstanding and 191,146,027 shares of our Common Stock issued and outstanding. …

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21. Subsequent Events On June 2, 2026, our board of directors approved a share repurchase plan whereby, from time to time, the Company may repurchase up to $50,000 of the Companys Common Stock. …

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