McGraw Hill Inc "K-12 Challenges Temper F2027 Growth" (Neutral) Chan

研报英文原文证据摘录

McGraw Hill Inc "K-12 Challenges Temper F2027 Growth" (Neutral) Chan

E 0.10 0.18 83 0.27

For more color on the quarter and guide, please view our First Read.

Q4E (0.01) 0.28 NM 0.26

K-12 Trajectory Nudging Lower on Market, Share Dynamics 03/27E 1.59 1.73 9 1.76

03/28E 1.81 1.91 5 1.95

Lower capture rates and F2027 opportunity in California. In the California 03/29E 1.89 1.95 3 2.02

math adoption cycle, MH noted that current win rates are lower than expected,

resulting in management anticipating overall capture rates for K-12 in F2027 Joshua Chan, CFA

being toward the lower-end of the historical 25-30% range (compares to high- Analyst

20% in F2026). The lower capture rate is said to be due to pedagogy preferences, joshua.chan@ubs.com

+1-212-713 9957

and MH expects to make changes to its materials to have a more appealing

curriculum in the subsequent years of this multi-year adoption cycle. Additionally, Karandeep Singhania

MH expects $100m of California math opportunity to slip from F2027 into F2028 Associate Analyst

karandeep.singhania@ubs.com due to some larger districts making later decisions than expected. All of this

+1-212-713 4211

impacts the anticipated K-12 billings and revenue in F2027.

Brianna Kamdoum

Texas Math also temporarily challenged. Capture rates are also negatively Associate Analyst

impacted by Texas' Bluebonnet Learning, a state-owned K-5 OER curriculum. brianna.kamdoum@ubs.com

Bluebonnet's presence has been widely known, so this may not be a surprise but is +1-212-882 5027

also negatively impacting results. MH noted that districts are signing Bluebonnet

Highlights (US$m) 03/24 03/25 03/26 03/27E 03/28E 03/29E 03/30E 03/31E

Revenues 1,960 2,101 2,103 2,159 2,288 2,343 2,431 2,526

EBIT (UBS) 544 603 605 643 686 696 773 854