Slides
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1 Fiscal Q2 2026 Investor Presentation November 12, 2025
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2 Disclaimer This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology, including terms such as “believes,” “estimates,” “anticipates,” “expects,” “projects,” “intends,” “plans,” “may,” “will,” “should” or “seeks,” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include, but are not limited to, statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which it operates. By their nature, forward-looking statements involve risks and uncertainties, as they relate to events and depend on circumstances that may or may not occur in the future. The Company’s expectations, beliefs and projections are expressed in good faith, and the Company believes there is a reasonable basis for them; however, the Company cautions readers that forward-looking statements are not guarantees of future performance and that the Company’s actual results of operations, financial condition and liquidity, and the developments in the industry in which the Company operates, may differ materially from those made in or suggested by the forward-looking statements contained in this press release. There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this press release, including those described under the headings “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s final prospectus filed pursuant to Rule 424(b) under the Securities Act, filed on July 24, 2025, the Company’s Quarterly Report on Form 10-Q and in other filings made with the U.S. Securities and Exchange Commission (“SEC”). In addition, even if our results of operations, financial condition and liquidity, and the developments in the industry in which we operate are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. Any forward-looking statements the Company makes in this press release speak only as of the date of such statement. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities law. This presentation contains certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. A “non-GAAP financial measure” is defined as a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statement of cash flows of the Company. Such measures are presented for supplemental information purposes only, have limitations as analytical tools, and should not be considered in isolation or as substitute measures for our results as reported under GAAP. See slide 27. These measures are presented for supplemental information purposes only, have limitations as analytical tools, and should not be considered in isolation or as substitute measures for our results as reported under GAAP. Because not all companies use identical calculations, our measures may not be comparable to other similarly titled measures of other companies, and our use of these measures varies from others in our industry. Such non-GAAP financial measures are included because they are a basis on which our management assesses the Company's performance. Although we believe these measures are useful for investors for the same reasons, we recommend that users of the financial statements note that these measures are not a substitute for GAAP financial measures or disclosures. We provide reconciliations of such non-GAAP measures to the corresponding most closely related GAAP measure on slide 27. This presentation contains forward-looking estimates of Adjusted EBITDA for fiscal year 2026. We provide this non-GAAP measure to investors on a prospective basis for the same reasons (set forth above) that we provide it to investors on a historical basis. We are unable to provide a reconciliation of our forward-looking estimate of fiscal year 2026 net income (loss) to a forward-looking estimate of fiscal year 2026 Adjusted EBITDA because certain information needed to make a reasonable forward-looking estimate of net income (loss) for fiscal year 2026 is unreasonably difficult to predict and estimate and is often dependent on future events that may be uncertain or outside of our control. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on our future financial results. Our forward-looking estimates of both GAAP and non-GAAP measures of our financial performance may differ materially from our actual results and should not be relied upon as statements of fact.
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Business Overview1
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4 Our mission is to support the evolving needs of educators and learners around the world with trusted, high-quality content and digital solutions that use data and learning science to adapt to each student as they progress towards their goals.
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5(1) Elsevier is owned by RELX. K-12 Higher Education Professional • Institutional-focused sales • Market opportunity varies year by year based on states like CA, FL and TX which have state-wide procurement • Contract lengths 5 – 8 years & cash upfront • Faculty and institution-focused sales • Inclusive Access delivery mechanism ensures availability of courses to students on day-1 and enables high sell-through • Annual contract / subscriptions • Institution-focused sales • High switching costs drive strong retention and long-term institutional relationships • Purchasing decisions driven by budgets rather than individual end-users • Annual contract / subscriptions Customers Decision Makers Market Dynamics Key Competitors We Serve Three Large, Connected, and Attractive Markets Globally Private Schools Public School Districts School Principals District Superintendents Undergraduate and Graduate Institutions Medical School Faculty, Deans and Librarians Institutional Libraries Graduate Institutions Medical Institutions Professors Administrators 1
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6 $9.3B $12.3B $2.9B $5.5B (1) Estimate based on information from a third- party study commissioned by the Company in the fiscal year ended March 31, 2025. As of the academic year ended 2025. (2) Refers to U.S. K -12. (3) Refers to U.S. Higher Education. (4) CTE refers to Career and Technical Education; AP refers to Advanced Placement; Dual Enrollment programs allow K-12 students to earn college credits while in high school. We Serve a Large, Essential Market… K-122 Higher Education3 Global Professional International Numerous Growth Opportunities Across Every Stage of the Learning Journey K-122 Higher Education3 Global Professional International • Supplemental / Intervention Solutions • Integrated Curriculum Solutions • CTE / AP / Assessment 4 • Student Study Solutions • CTE / Dual Enrollment4 • Short Courses • Employability / Workplace Preparedness • Global Medical Education Solutions • Undergraduate Medical Student Learning Solutions • Emerging Market Growth • K-12 and Higher Education Solutions • English Language Teaching …With Strong Secular Tailwinds • Highly Resilient and Growing End Market • Modernization of Learning Technology • Demand for Data-Driven, Personalized Learning • Need for Equitable Access to Learning • Demand for Technical, Skills- Based Professional Learning $30B TAM1 6
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7Note: All metrics are as of the fiscal year ended March 31, 2025. Established Market-Leading Digital Learning Solutions In 94% of U.S. Medical Schools Interactive digital subscription solution for the Professional market with simulation-based interactive learning experiences Market leading digital solution for K-12 supporting teachers with planning and customizing lessons that are accessible by students anywhere, anytime >30M Lifetime Learners Personalized learning solution supporting K-12 and Higher Education markets across thousands of institutions globally >64M Lifetime Learners Market leading digital learning solution for Higher Ed providing custom course creation capabilities and valuable insights on student performance >34M Lifetime Learners
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8 (1) Please see slide 30 for RPO definition (2) For the fiscal year ended March 31, 2025. Annual Net Dollar Retention ("NDR") is a key operating metric used to evaluate digital subscription revenue growth within our existing customer base. NDR is calculated by dividing (a) the digital subscription amounts invoiced to existing customers during the year, inclusive of changes in enrollment, price changes, and attrition by (b) the digital subscription amounts invoiced to such customers for the comparable prior year. (3) CTE = Career and Technical Education. (4) Estimate based on information from a third- party study commissioned by the Company in the fiscal year ended March 31, 2025. As of the academic year ended 2025. Higher Education & Professional Other Strategic Levers K-12 International $5.5B TAM Opportunity4 Strategic Priorities Continued Sell- Through From Prior Multi-Year Contracts $1.3B RPO1,2 as of 3/31/2025 Existing Customers CTE3, Short Courses, Global Medical Education Solutions New Customers / Solutions >105% NDR2 Proven Cross- Sell & Up-Sell Success Land & Expand Existing Customers New Multi-Year State and District Opportunities, New Capabilities, GenAI New Customers / Solutions Supplemental, Intervention & Connected Solutions Up-sell & Cross-sell X ## $$ M&A Our Predictable Growth Algorithm Grow & Strengthen Existing Businesses Operate Efficiently Expand Addressable Market Invest in New Data- Driven Digital Capabilities
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9 Product InnovationKey Milestones (1) For the fiscal year ending March 31, 2025. (2) Digital Revenue Mix is defined as digital revenue divided by total revenue. ( 3) Re-occurring Revenue includes revenue from offerings that are generally sold as digital subscriptions and multi -year print products. Revenue from digital subscriptions, which are paid for at the time of sale or shortly thereafter, is recognized ratably over the term of the subscription period as the performance obligation is satisfied. For multi -year print products (e.g., workbooks), which are paid for at the beginning of the multi-year contract term, each academic year within the contract period, represents a distinct performance obligation. Revenue is recognized upon delivery to the customer for each respective academic year. FY2025 total Re- occurring Revenue was $1,457M. Re- occurring Revenue Mix is defined as Re-occurring Revenue divided by total revenue. 135+ Years of Continued Commitment to Quality and Innovation Intellectual Property / Content Moat Machine Learning and Data Analytics Insights and Workflow Personalized Learning (AI) Decades of Trust 2000 2023 2025 2009 2013 2022 2021 20192015 2020 1996 2024 2014 2016 Acquisitions (Higher Education Unit) Advantage Calculus Writing Assistant Teacher Assistant Recent Innovation 2026 Sale of McGraw Hill From to <1/3rd Digital Revenue Mix2 Reinvented <40% Re-occurring Revenue Mix3 >50% Digital Revenue Mix2 Open Learning Acquired by >$1B Digital Revenue Scaling Evergreen Across Connect $1.4B Digital Revenue1,2 69% Re-occurring Revenue Mix1,3 AI Reader, Scribe
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10 Content Delivery InnovationData Innovation & Insights Market Expansion Continuously updates course content, keeping materials engaging and aligned with latest standards Patent-pending technology translates learning insights into effective personalized learning at scale New product for Math grades K-5, launched in summer of 2024, expanding serviceable market AI-powered platform that assesses learning from day one, closes prerequisite gaps, personalizes lessons and builds subject mastery Continued Innovation in Market-Leading Digital Learning Solutions Currently Available: ALEKS Adventure K-3 TM Calculus
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11 Personalized experiences that adapt to each student’s needs and engage them more fully in learning Tools that handle administrative tasks for teachers so they can focus on teaching Data-driven insights to help schools improve student performance and demonstrate the value of the education they provide Proprietary Technology designed for effective learning High Quality, Expert-vetted, content Data from billions of student interactions Turbocharging our ability to create solutions that provide… Trusted Brand Deep Relationships Widespread Distribution Integrating AI with McGraw Hill's Strengths
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12 New Sharpen Enterprise solution with AI learning assistant that generates study aids tailored to individual student queries based on their own uploaded study materials, lecture notes, and course slides. Advantage: Ask AI-powered tool to guide students in completing their writing assignments by fostering independent thinking and problem-solving. Writing Assistant Enables students to practice medical case diagnosis through an interactive conversation with an AI Patient with comprehensive feedback and areas of improvement. Clinical Reasoning AI-driven instructional planning assisting teachers in finding relevant resources and making data-driven decisions. Teacher Assistant Our AI in Action… 12 AI Reader Advancing AI Innovation: Four New Solutions AI Reader interactions in Q2 11M Interactions Used AI Reader from September to mid-October 2025 ~1M Unique Students
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Fiscal Q2 2026 Results2
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14 The McGraw Hill Value Proposition Trusted, Market-Leading Global Brand with Deep Expertise in Learning Science01 Leveraging Data Science, Machine Learning, and GenAI to Drive Innovation and Improve Outcomes04 Agile Content Model Supported by High-Quality, Proprietary Digital Content and Wealth of Learner Data03 Leading Suite of Digital Solutions Across the Entire Learning Continuum02 Extensive Global Go-to-Market Reach05 Mission-Driven Culture and Leadership Team with Track Record of Success08 Highly Profitable Business Model with a Strong Cash Flow Profile 07 Institutional Sales Model with Long-Standing Customer Relationships Built Over Decades06
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15 FY26-Q2 Highlights • Results demonstrate execution, scale and business model diversity • Strategic reinvestment, operational efficiency and a stronger balance sheet • High-quality digital and re-occurring revenue growth and margin expansion • Multi-layered moat including trusted IP, proprietary data and domain expertise • New AI capabilities and solutions unlock growth beyond core business Note: All metrics are for the fiscal quarter ended September 30, 2025. Company fiscal year end is March 31st. (1) See slide 30 for RPO definition. (2) See slide 27 for Adj. EBITDA and Adj. EBITDA Margin Reconciliation. $669M Revenue -2.8% Y/Y $352M Digital Revenue +7.6% Y/Y 42.8% Adj. EBITDA Margin2 +60 bps Y/Y $286M Adjusted EBITDA2 $422M Re-occurring Revenue +6.5% Y/Y $1,914M RPO1 79.2% Gross Profit Margin +150 bps Y/Y
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16 % Re- occurring 58% 63% 63% 67% % Digital 48% 53% 52% 56% $ in millions Total Company FY26-Q2 Revenue Total Revenue Digital RevenueRe-occurring Revenue¹ Note: Amounts may not sum due to rounding. GAAP Basis. Company fiscal year end is March 31st (1) Definition of Re- occurring revenue on slide 30. -2.8% -0.5% +6.5% +6.8% +7.6% +7.4%
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17 % Gross Profit Margin 77.7% 79.2% 77.0% 78.2% Adj. EBITDA2 (1) See slide 29 for Gross Profit and Gross Margin Reconciliation. Gross profit is revenue less cost of sales (excluding depr eciation and amortization). (2) See slide 27 for Adj. EBITDA and Adj. EBITDA Margin Reconciliation. $ in millions Total Company FY26-Q2 Margin Profile Gross Profit¹ -1.0% +1.0% % Adj. EBITDA Margin 42.2% 42.8% 38.7% 39.7% -1.4% +1.9%
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18 YoY Rev. Growth +14.0% +14.0% % Re-occurring 76% 76% 84% 81% % Digital 84% 87% 90% 90% Note: Amounts may not sum due to rounding. GAAP Basis. *Total International revenue decline of 11% year -over-year on a constant currency basis. $ in millions McGraw Hill FY26-Q2 Revenue by Segment Transactional Revenue Re-occurring Revenue K-12 Higher Education International*Global Professional YoY Rev. Growth -11.2% -7.3% % Re-occurring 52% 60% 56% 63% % Digital 30% 33% 32% 36% YoY Rev. Growth -1.5% -1.0% % Re-occurring 58% 62% 61% 64% % Digital 62% 65% 67% 68% YoY Rev. Growth -8.8% -10.3% % Re-occurring 38% 39% 38% 40% % Digital 43% 42% 43% 43% +6.0% +2.8% +10.2% +13.8% +4.6% +5.4% -6.8%-4.8%
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19 $ in millions Consolidated FY26-Q2 Cash Flow Summary Three Months Ended September 30, Six Months Ended September 30, FY25-Q2 FY26-Q2 Variance FY25-YTDQ2 FY26-YTDQ2 Variance Net Income (Loss) 133 105 (28) 124 106 (18) Adjustments to reconcile net income (loss) to net cash provided by operating activities D&A, Provisions, Impairments and Other 133 181 48 275 318 43 Change in Working Capital 149 (21) (170) 14 (255) (269) Cash provided by (used for) operating activities 415 265 (150) 412 168 (244) Product development expenditures (19) (26) (7) (38) (49) (11) Capital expenditures (13) (21) (8) (29) (37) (8) Cash provided by (used for) investing activities (33) (47) (15) (67) (87) (19) Cash paid for interest expense 91 91 — 145 113 (32)
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20 Balance Sheet and Liquidity Debt Profile: 09/30/2025 • Cash on hand of $463M; Total committed liquidity of $913M (cash, revolver & ABL) • Revolving credit facilities remain undrawn • Net Debt / Adjusted EBITDA ratio of 3.3x • Reduced Term Loan by $542M year-to-date through October ($150M Principal payment completed in October) • Committed to 2.0x – 2.5x Net Debt / Adjusted EBITDA target Note: Last Twelve Months is calculated by adding the results for the six months ended September 30, 2025, to the results of t he fiscal year ended March 31, 2025, and subtracting the six months ended September 30, 2024. Proforma Consolidated Adjusted EBITDA further adjusted for cost savings was $820M. This includes prior operational improvemen ts completed by the Company of $42 million and 24-months look forward net annual run-rate operational improvements of $39 million excluding 1x costs to achieve. (1) Revolving credit facility of $450M includes $150M RCF and $300M ABL, excluding ~$4M of letters of credit. Under the recent a mend and extend transaction, of the $150M RCF, approximately ~$111M extended and the remaining did not. After the July 2026 m aturity, the RCF will decrease by $38.75M leaving the remaining facility at $412M. (2) Net First Lien Leverage covenant for revolving credit facility is tested if 40% of revolving credit facility is drawn at quarter-end. Net First Lien Leverage covenant levels, if required to be tested, would be 6.95x for the relevant quarter. EBITDA used to calculate Net First Lien Leverage covenant ratio would be Consolidated Adjusted EBITDA plus pro-forma adjustments that are permitted under the credi t agreements and indentures as of September 30, 2025. ($ in millions) Senior Secured Term Loan due 2031 $768 Revolving Credit Facility due 2029 ($450M)1 - Senior Secured Notes due 2028 828 Senior Secured Notes due 2031 650 Total First Lien Indebtedness $2,246 Less: Cash and Cash Equivalents (463) Net First Lien Indebtedness $1,783 Senior Unsecured Notes Due 2029 639 Gross Debt $2,885 Total Net Indebtedness - MH, Inc. $2,422 Adjusted EBITDA (Last Twelve Months - "LTM") $736 Total Net Indebtedness / LTM Adjusted EBITDA 3.3x Consolidated Adjusted EBITDA (LTM as defined under the credit agreement) $738 Net First Lien Leverage2 2.4x Total Net Indebtedness / LTM Consolidated Adjusted EBITDA 3.3x
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21(1) See slide 31 for a definition of Adj. EBITDA. $ in millions Fiscal Year 2026 - Guidance FY26 Guidance - Prior As of August 14, 2025 FY26 Guidance - Updated As of November 12, 2025 Low High Low High Revenue $1,986 $2,046 $2,031 $2,061 Re-occurring Revenue $1,477 $1,517 $1,504 $1,524 Adjusted EBITDA1 $663 $703 $702 $722
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22 Medium-Long Range Framework FY2023A FY2024A FY2025A Medium-Long Term Targets Revenue Growth 8.8% 0.7% 7.2% 5%+ Re-occurring Revenue (% of Total Revenue) 62.8% 67.1% 69.3% 75%+ Digital Revenue (% of Total Revenue) 58.9% 64.0% 64.7% 75%+ Gross Margin1 76.1% 78.6% 79.9% 82%+ Adjusted EBITDA Margin2 31.7% 33.5% 34.6% 37%+ Net Debt / Adjusted EBITDA3 5.5x 5.1x 4.0x 2.0x – 2.5x Notes: These medium- to long-term targets are for illustrative purposes only and should not be read as a guarantee of future per formance or results. There can be no assurance when (if at all) such performance or results will be achieved. These forward looking medium- to long-term targets are not projections, estimates or guarantees of act ual growth or enhanced unit economics. They are targets and are forward- looking, are subject to significant business, economic and competitive uncertainties, risks and contingencies, many of which are beyond the c ontrol of the Company and its management, and are based on assumptions with respect to future decisions, which are subject to change. Actual results may vary, and these variations may be material. For a discussion of some of these important factors that could cause these variations, please consult the “Risk Factors” section of the S -1. (1) See slide 29 for Gross Margin Reconciliation. Gross profit is revenue less cost of sales (excluding Depreciation and Amortization). (2) See slide 27 for Adj. EBITDA Margin Reconciliation. (3) Net debt is defined as Cash and cash equivalents subtracted from Total Debt. Total Debt figures ex clude leases, unamortized debt discount, and unamortized deferred financing costs. 3.3x as of 9/30/25
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Appendix / ReconciliationsA
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24 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026E FY2027E FY2028E FY2029E All Other States Top 3 States (CA, FL, TX) Known Core Purchasing Schedules Drives Strong Predictability Source: Internal company data. The data shown in this image reflects McGraw Hill's best estimates and projections for the K -12 Core Market and has been prepared by McGraw Hill using internal assumptions, estimates and data. K-12 Core Market Size Predictable Purchasing Schedules Strong Alignment with Core Subject Pipeline, Well-Positioned to Capitalize on Upcoming Opportunities Key Subject and Grade • FL Social Studies • CA Science (yr5) • FL Math • FL ELA (yr2) • CA Science (yr4) • FL ELA • CA Science (yr3) • TX Science • FL Science • FL Social Studies (yr2) • FL Science (yr2) • FL ELA (yr0) • CA Math (yr0) • TX ELA (K-9-12) • CA Science (yr2) • TX ELA (K-8) • CA Science (yr1) • TX Math (yr1) • FL ELA (yr1) • CA Math (yr1) • TX Math (yr2) • FL Math • CA Math (yr2) • CA ELA (yr1) • TX Math (yr3) • FL SS (yr1) • CA Math (yr3) • CA ELA (yr2)
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25Note: Amounts may not sum due to rounding. $ in millions GAAP Revenue Detail Total Revenue Fiscal Year Ended March 31, Fiscal Year 2025 Fiscal Year 2025 Fiscal Year 2025 Fiscal Year 2025 Fiscal Year Ended March 31, Fiscal Year 2026 Fiscal Year 2026 2024 Q1 Q2 Q3 Q4 2025 Q1 Q2 K-12 $ 905 $ 275 $ 405 $ 150 $ 141 $ 970 $ 271 $ 359 Higher Education 702 160 187 182 254 783 182 213 Global Professional 153 35 40 36 38 150 35 40 International 200 58 55 45 43 201 51 50 Other (0) (5) 1 4 (3) (3) (4) 7 Total Revenue $ 1,960 $ 523 $ 689 $ 416 $ 473 $ 2,101 $ 536 $ 669 Digital Revenue Fiscal Year Ended March 31, Fiscal Year 2025 Fiscal Year 2025 Fiscal Year 2025 Fiscal Year 2025 Fiscal Year Ended March 31, Fiscal Year 2026 Fiscal Year 2026 2024 Q1 Q2 Q3 Q4 2025 Q1 Q2 K-12 $ 426 $ 100 $ 121 $ 108 $ 102 $ 431 $ 109 $ 119 Higher Education 634 154 157 163 249 723 169 186 Global Professional 97 25 25 26 26 103 25 26 International 99 25 24 31 24 103 22 21 Other - - - - - - - - Total Digital Revenue $ 1,255 $ 303 $ 327 $ 328 $ 401 $ 1,359 $ 325 $ 352 Re-occurring Revenue Fiscal Year Ended March 31, Fiscal Year 2025 Fiscal Year 2025 Fiscal Year 2025 Fiscal Year 2025 Fiscal Year Ended March 31, Fiscal Year 2026 Fiscal Year 2026 2024 Q1 Q2 Q3 Q4 2025 Q1 Q2 K-12 $ 554 $ 167 $ 210 $ 113 $ 112 $ 602 $ 184 $ 216 Higher Education 585 149 142 147 228 667 160 162 Global Professional 88 23 23 24 24 95 24 25 International 88 23 21 28 22 93 21 20 Other - - - - - - - - Re-occurring Revenue $ 1,315 $ 362 $ 397 $ 311 $ 387 $ 1,457 $ 388 $ 422
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26Note: Amounts may not sum due to rounding. $ in millions Total McGraw Hill: Remaining Performance Obligations (RPO) September 30, 2025 March 31, 2025 Current Non-Current Total Current Non-Current Total RPO by Segment: K-12 $ 550 $ 882 $ 1,432 $ 457 $ 822 $ 1,280 Higher Education 316 55 371 248 50 297 Global Professional 54 7 61 55 7 62 International 46 3 49 31 3 33 Other 1 - 1 4 - 4 Total RPO $ 967 $ 947 $ 1,914 $ 794 $ 882 $ 1,676
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27Note: Amounts may not sum due to rounding. $ in millions Adjusted EBITDA Reconciliation Three Months Ended September 30, Six Months Ended September 30, FY25-Q2 FY26-Q2 FY25-YTDQ2 FY26-YTDQ2 Net income (loss) $ 133 $ 105 $ 124 $ 106 Interest expense (income), net 80 56 161 115 Income tax provision (benefit) (37) (21) (33) 16 Depreciation, amortization and product development amortization 97 93 186 181 EBITDA $ 274 $ 233 $ 438 $ 417 Restructuring and cost savings implementation charges (a) 7 2 13 5 Advisory fees (b) 3 1 5 3 Transaction and integration costs (c) 1 — 2 — Stock-based compensation (d) — 31 — 31 Gain (loss) on extinguishment of debt (e) 3 16 3 16 Other (f) 4 3 8 5 Adjusted EBITDA $ 290 $ 286 $ 469 $ 478 Total Revenue $ 689 $ 669 $ 1,212 $ 1,205 Net income (loss) margin 19.4 % 15.7 % 10.2 % 8.8 % Adjusted EBITDA Margin 42.2 % 42.8 % 38.7 % 39.7 %
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28 Adjusted EBITDA Footnotes a. Represents severance and other expenses associated with headcount reductions and other cost savings initiated as part of our restructuring initiatives. b. For the three and six months ended September 30, 2025 and 2024, represents the pro rata portion of the annual $10.0 million of advisory fees paid to Platinum Advisors pursuant to the Advisory Agreement (which was terminated upon consummation of our IPO on July 25, 2025). c. This primarily represents transaction and integration costs associated with acquisitions. d. Represents stock-based compensation expense related to awards granted to our employees, directors and consultants under the Company's long-term incentive plans. e. Represents accelerated amortization of debt discount and deferred financing costs related to the A&E Term Loan Facility paydown from IPO proceeds. f. For the three months ended September 30, 2025 and 2024, this amount represents (i) foreign currency exchange transaction impact of $0.1 million and $(1.3) million, respectively, (ii) non-recurring expenses related to strategic initiatives, including marketing, consulting, and non-operational costs associated with the market introduction of a new product launch of $1.7 million and $1.0 million, respectively, (iii) reimbursements of expenses paid to Platinum Advisors incurred in connection with its services under the Advisory Agreement (which was terminated upon consummation of our IPO on July 25, 2025) of $0.1 million and $0.1 million, respectively, (iv) post-acquisition compensation expense of nil and $0.2 million, respectively, associated with the acquisition of Boards & Beyond, (v) non-recurring transaction-related costs associated with the IPO that were expensed as incurred of $0.9 million and $2.0 million, respectively, and (vi) the impact of additional insignificant earnings or charges resulting from matters that we do not consider indicative of our ongoing operations of $0.6 million and $2.0 million, respectively, that are primarily related to individually insignificant miscellaneous items, including third-party consulting and advisory fees associated with system and process rationalization initiatives and certain additional payments related to incremental insurance premiums and policies as a result of the Platinum acquisition that did not renew after the consummation of the IPO on July 25, 2025. For the six months ended September 30, 2025 and 2024, this amount represents (i) foreign currency exchange transaction impact of $(1.8) million and $(0.7) million, respectively, (ii) non-recurring expenses related to strategic initiatives, including marketing, consulting, and non-operational costs associated with the market introduction of a new product launch of $2.5 million and $2.4 million, respectively (iii) reimbursements of expenses paid to Platinum Advisors incurred in connection with its services under the Advisory Agreement (which was terminated upon consummation of our IPO on July 25, 2025) of $0.2 million and $0.4 million, respectively, (iv) post-acquisition compensation expense of nil and $0.4 million, respectively, associated with the acquisition of Boards & Beyond, (v) non-recurring transaction-related costs associated with the IPO that were expensed as incurred of $2.8 million and $2.0 million, respectively and (vi) the impact of additional insignificant earnings or charges resulting from matters that we do not consider indicative of our ongoing operations of $1.3 million and $3.3 million, respectively, primarily related to individually insignificant miscellaneous items, including asset dispositions, third-party consulting and advisory fees associated with system and process rationalization initiatives, as well as certain additional payments related to incremental insurance premiums and policies as a result of the Platinum acquisition that did not renew after the consummation of the IPO on July 25, 2025.
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29 Note: Amounts may not sum due to rounding. (1) Due to the inherent subjectivity in the classification of costs between cost of s ales and operating and administrative expenses across our industry, we do not focus on gross profit or gross margin as key opera ting metrics for our business $ in millions Gross Profit and Gross Margin Reconciliation1 Three Months Ended September 30, Six Months Ended September 30, FY25-Q2 FY26-Q2 FY25-YTDQ2 FY26-YTDQ2 Revenue $ 689 $ 669 $ 1,212 $ 1,205 (-) Cost of sales (excluding depreciation and amortization) 153 139 279 262 Gross Profit $ 535 $ 530 $ 933 $ 942 Gross Margin 77.7% 79.2% 77.0% 78.2%
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30 Terms: Re-occurring Revenue, Transactional Revenue and RPO Re-occurring Revenue includes revenue from offerings that are generally sold as digital subscriptions and multi-year print products. Revenue from digital subscriptions, which are paid for at the time of sale or shortly thereafter, is recognized ratably over the term of the subscription period as the performance obligation is satisfied. For multi-year print products (e.g., workbooks), which are paid for at the beginning of the contractperiod, each academic year within the contract period, represents a distinct performance obligation. Revenue is recognized upon delivery to the customer for each respective academic year. Re-occurring Revenue serves as a key operating metric used by management as it offers valuable insight into the subscription-based nature of our business. Transactional Revenue includes revenue from both print and digital offerings. Revenue from print offerings is recognized at the point of shipment and revenue from digital offerings are recognized at the time of delivery. In addition, revenues for amounts billed to customers in a sales transaction for shipping and handling are included in Transactional revenue. Remaining Performance Obligation (“RPO”) represent the total contracted future revenue that has not yet been recognized. RPO is associated with our digital subscriptions and multi-year print products and is impacted by various factors, including the timing of renewals and purchases, contract durations, and seasonal trends. Given these influencing factors, RPO should be evaluated alongside Re-occurring Revenue and other financial metrics disclosed within this presentation. RPO serves as a key operating metric used by management as it offers visibility into future revenue and facilitates the assessment of long-term growth sustainability. While we believe that the above key operating metrics provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management, it is important to note that other companies, including companies in our industry, may not use these metrics, may calculate them differently, may have different frequencies or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of Re-occurring Revenue, Transactional Revenue or RPO as a comparative measure.
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31 Terms: EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are presented because our management uses them to assess our performance. We believe they reflect the underlying trends and indicators of our business and allow management to focus on the most meaningful indicators of our continuous operational performance. EBITDA is defined as net income (loss) from continuing operations plus interest expense (income), net, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is defined as net income (loss) from continuing operations plus interest expense (income), net, income tax provision (benefit), depreciation and amortization, restructuring and cost savings implementation charges, the effects of the application of purchase accounting, advisory fees paid to Platinum Advisors pursuant to the Advisory Agreement (which was terminated upon consummation of our IPO on July 25, 2025), impairment charges, transaction and integration costs, stock-based compensation, (gain) loss on extinguishment of debt and the impact of earnings or charges resulting from matters that we do not consider indicative of our ongoing operations. Further, although not included in the calculation of Adjusted EBITDA below, we may at times add estimated cost savings and operating synergies related to operational changes ranging from acquisitions or dispositions to restructurings and exclude one-time transition expenditures that we anticipate we will need to incur to realize cost savings before such savings have occurred. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by total revenue. Each of the above measures is not a recognized term under GAAP and does not purport to be an alternative to net income (loss), or any other measure derived in accordance with GAAP as a measure of operating performance, or to cash flows from operations as a measure of liquidity. Such measures are presented for supplemental information purposes only, have limitations as analytical tools, and should not be considered in isolation or as substitute measures for our results as reported under GAAP. Management uses non-GAAP financial measures to supplement GAAP results to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. Because not all companies use identical calculations, our measures may not be comparable to other similarly titled measures of other companies, and our use of these measures varies from others in our industry. Such measures are not intended to be a measure of cash available for management’s discretionary use, as they may not capture actual cash obligations associated with interest payments, taxes and debt service requirements.