McGraw Hill: 3 Key Takeaways for Long-Term Investors

On its fiscal second-quarter 2027 earnings call, held on Nov. 5, 2026, McGraw Hill (NYSE:MH) announced that total first-half revenue reached $1.2 billion, with reoccurring streams making up 71% of sales. High customer retention and subscription-based curriculum licenses give the educational publisher durable revenue visibility while recent debt paydowns reduce balance sheet risk. Three takeaways from the call stand out for long-term investors.

1. Artificial Intelligence Partnerships Monetize Content Without Sacrificing Intellectual Property

Management connects its curriculum to third-party software through the Model Context Protocol (MCP), a technical standard that links learning content directly to artificial intelligence models. Every user must hold a paid subscription, letting the company license its educational material across digital platforms while maintaining strict access controls.

And we have pretty significant technology and security that wraps around our content with MCP, first and foremost, to be able to protect it. And then the beauty of MCP also is that the experience can be exactly the way the learner, the educator, the school wants it to be.
-- Philip Moyer, President and Chief Executive Officer

2. Higher Education Market Share Expands Through Value-Based Platform Pricing

The higher education business marked 41 consecutive quarters of market share growth, expanding sales even as overall college enrollments fell about 1%. Automatic digital distribution models, like Inclusive Access, now generate 58% of segment revenue, helping professors deliver coursework seamlessly while locking in annual institutional renewals.

And then I look at where we're seeing the benefits, and pricing continues to stick at a greater level than we anticipated. We're going out, adding greater value to our professors, to the students through our platform, and we're being rewarded with that higher pricing.
-- Bob Sallmann, Executive Vice President and Chief Financial Officer

3. Elementary Literacy Legislation Drives an Impending K-12 Buying Cycle

A total of 44 states passed Science of Reading laws that require updated curriculum focused on evidence-based instruction. Early adoption win rates for the company's English Language Arts (ELA) program already exceed internal targets, positioning the K-12 segment for accelerated contract wins heading into fiscal 2028.

In K-12, we're seeing higher-than-expected win rates for our new ELA program, above our 25% to 30% target range, including open territory, with recent Science of Reading approvals in Pennsylvania and Colorado.
-- Philip Moyer, President and Chief Executive Officer

Looking Ahead

Operational momentum builds across print and digital learning formats as gross margin holds around 79%. McGraw Hill relies on high customer retention, multiyear state curriculum adoptions, and debt reduction to build long-term value. Management tracks contract win rates and pricing discipline.

We view our industry-leading margin profile as durable, and confident in our ability to continue margin expansion in the fiscal year and beyond.
-- Bob Sallmann, Executive Vice President and Chief Financial Officer

Focus remains on executing core strategies ahead of anticipated growth acceleration.

The next frontier of learning is here, and we are just getting started. We believe McGraw Hill is the company uniquely positioned to lead with the speed, the scale, the financial profile and the institutional trust that is critical to succeed in this education industry.
-- Philip Moyer, President and Chief Executive Officer

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