McGraw Hill, Inc. (MH) Earnings Call Transcript & Summary

Hello, and thanks for being here on McGraw-Hill's call covering the first quarter of fiscal 2027. With me are Philip Moyer, our President and Chief Executive Officer, plus Bob Solman, who serves as Executive Vice President and Chief Financial Officer. On this call, we'll offer forward-looking statements grounded in what we currently expect and in today's economic conditions; such statements, estimates, and projections carry substantial uncertainties that lie outside management's control. That's spelled out in the cautionary language found in our earnings release covering the fiscal first quarter that closed June 30, 2026, along with the investor presentation that accompanies it, our 10Q covering that same fiscal quarter, and our remaining SEC filings. We'll also mention some non-GAAP measures, which in our view deliver helpful supplemental perspective on how we performed financially and operationally, even though they don't stand in for GAAP measures. You can find definitions and GAAP reconciliations in our earnings release, the appendix of the investor presentation, and on our investor relations website. Anyone listening to a recording should be aware that these remarks reflect today, August 13th, 2026, and haven't been updated since. With that, I'll hand things over to our President and Chief Executive Officer, Philip Moyer. Good morning to all of you, and thank you for being with us. Millions of students and educators around the globe.

As they get ready to return to classrooms, McGraw-Hill is out in front. Our key sales period is beginning, following a first quarter that came in above what we had anticipated. No other education company worldwide has as many paid enterprise users as McGraw-Hill. With more than 100 million active curriculum licenses, upwards of 7.5 million people using our AI solutions, and billions of learning interactions, this is what being the planet's foremost education company looks like. Q1 beat our forecasts on both revenue and profitability. Revenue rose 2.6% compared with the same period a year earlier, and recurring revenue climbed 9.8%, accounting for 77% of total revenue. Adjusted EBITDA reached $207 million, producing a 37.7% margin. Compared with last year, that's up over 192 basis points, while net income reached $58 million. The numbers show how our teams executed with discipline across fiscal year 2026, a year in which we grew revenue, expanded margins, and delivered positive net income, while gross debt fell by $646 million. In higher education, momentum keeps building through inclusive access, our evergreen content delivery model, and our world class go to market team. Q1 delivered another quarter of share gains, extending a streak that has now reached 10 years. With Connect, we see the stickiness that defines enterprise software, and that gives us a lot of confidence as we head toward the fall. Looking at grades K through 12, a curriculum adoption cycle spanning multiple years is just getting underway, and the science of reading is what's driving it. Pedagogy grounded in the science of reading is now mandated in 44 states, which represent 86% of students enrolled in kindergarten through fifth grade, and big states like California are accelerating their ELA timelines. On top of that, Stanford University puts the number of additional districts that might pick up science of reading curriculum materials over the coming seven years at 300 to 700, above and beyond what normally happens. We've launched new literacy offerings called Emerge, Summit, SOAR, and Emerger Juntos — a full K-12 program rooted in the science of reading; it will also rank among the few dual language programs available in the US market. I'm glad to report that the results are exceeding what we anticipated, since early cumulative capture rates have come in above the 25 to 30% range we set as our target. Since the previous quarter, we've picked up further adoptions, and a large number of those are happening in open territory districts that weren't already our customers back in July. A state reviewer panel has recommended our Calif.LA programs for approval, and we're eager for November, when the state is set to approve the final vendor list for the procurement cycle starting in fiscal year 2028. Another thing I'm thrilled to share is that we're moving into the dyslexia screening market, which is growing in importance. Roughly one in 10 individuals is estimated to have dyslexia, which includes 10 million students in the United States by itself. So because of that, 40 states across the U.S. now require dyslexia screening for students. We're rolling out an exclusive partnership with Stanford University involving ROAR — that's short for Rapid Online Assessment of Reading. This screener is evidence-based, and it's the sole tool built to evaluate core reading abilities spanning all grades from kindergarten through 12th. By integrating ROAR's data into our McGraw-Hill Plus analytics platform, teachers gain a unique ability to identify problems, intervene, and direct their teaching — everything accessible through one unified interface and experience that both students and teachers share. Separately, I'm glad to share that Florida has just given the green light to our math programs, ahead of that state's adoption process kicking off in fiscal year 2028. When it comes to global professional medical information, the total now doubles every 73 days. Demand keeps rising for curated, medical grade content delivered at scale. And McGraw-Hill is embedding itself right at the point where medical education meets clinical workflows. Our AI reader tool has expanded to four additional pharmacotherapy and pharmacological titles, reaching 96% pharma doctor penetration. Meanwhile, our clinical reasoning tool has grown by 18 cases and closed its first commercial deals spanning osteopathic medicine, physician assistance, and nurse practitioner programs. One more thing I want to share: in testing last month, our AI agent, which is driven by Harrison's Medicine, was matched up against top LLM platforms. Respected medical editors and physicians made up the panel that observed, and on each question it outperformed all the tools, generating clinical answers that were more thorough, correct, and current, without any hallucinations. 98% of US medical schools rely on us, and because of our new agentic AI platforms, we are just starting to discover how our medical grade content could be applied throughout the $13 trillion medical industry. Internationally, there are still attractive growth possibilities as well. So in Australia, we closed the largest K–12 ELA intervention agreement in our history with the Tasmania Department of Education — that covers close to 200 schools and about 5,000 learners. Around the world, student numbers keep climbing, and only a handful of ed tech firms can deliver on a global scale the way McGraw-Hill can; wins like this one reveal how much room to grow remains ahead. There's also AI as a second avenue for expansion, and the story around it is shifting. Everywhere, folks are starting to recognize that AI doesn't destroy jobs or eliminate companies. What it does is make them better, and nowhere is that clearer than in education. Curiosity among humans never runs out, and the demand to teach the coming generation keeps expanding daily. Putting people on Mars, operating large robot fleets, using biology to lengthen human lives, or achieving worldwide peace and prosperity — none of that happens without outstanding work in education. Human advancement flows from education as its source, and unlike other sectors, it has no point at which its value is finished. What makes this hard is that we have to convey a wider range of subjects to a growing number of learners, more quickly and through more methods than at any point in the past. Both instructors and pupils are struggling to keep pace, and they want a source they can rely on. Our Global Education Insights report, which was just published, shows that when AI is built into educational platforms people already use, educators are 81% more likely to place complete trust in it than in general purpose chatbots. It was also interesting that trust among educators in general purpose, GenAI chatbots declined 33% year over year. The feedback we get from these surveys, as well as from talking with customers, keeps confirming that AI is going to work in McGraw-Hill's favor, since we're able to reach more students across more subjects with greater trust than anyone else can offer. A strong illustration of this point is how OER and McGraw-Hill compare. Like I said, we win more business away from OER than we give up to it. The typical school district relies on more than 2,400 different tools, while the typical teacher and student must manage more than 25 distinct logins. Content that people build themselves, plus chat bots that the educator has to fix on their own, eats into the time they could spend with students and fails to produce consistent results. With McGraw-Hill, educators aren't left to assemble everything themselves; instead, we provide a completely integrated system spanning curriculum, assessment data, personalized learning, and professional development, wired straight into the everyday workflows of both the educator and the student. In developing our AI powered adaptive ed tech tools, our starting point is a deep foundation of high quality, human curated content, alongside a proprietary education ontology containing 26 billion annual learning interactions, a research network of 7,000 educators, and more than 100 independent peer-reviewed validations of education outcomes. When offered a choice between our integrated, trusted AI model and a general purpose chatbot paired with OER content pulled from the internet that has no efficacy studies behind it, teachers and students usually go with McGraw-Hill. Because of that, we currently have eight live AI learning tools serving in excess of seven and a half million active users, with three more launches scheduled for this fiscal year. Just our AI reader has grown to 63 million interactions spanning 2.6 million users so far. Still, we've only just begun. Agentech AI is fast becoming one of the key technologies in the AI race. Energetic AI lets companies build purpose-built knowledge graphs and pair them with models of varying sizes, yielding higher accuracy rates and improved speed and efficiency levels that go beyond what general purpose AI models can do. We think the future of knowledge is going to be agentic, and the agentic AI pilot I brought up last quarter keeps expanding; we already have more than 14 companies participating in our pilot group, and they're working with a broad range of third-party chatbots and open-source tools that we're able to integrate with; we're developing our agentic tooling so it can be part of any education experience, no matter which chatbot is chosen, as long as it supports agentic standards; and we see this as a chance for meaningful TAM expansion. We're eager to share more about our agentic strategy, the wider set of tools we offer, and our growth priorities during our Investor Day on November 18th. Our mission of building human intelligence across the entire education life cycle has never mattered more, and our capacity to deliver on it has never been greater. I'm excited to hand things over to Bob now so he can take you through the quarter's financials.

Thanks, Philip. We got off to a solid start in this fiscal year. Results came in above what we had projected, and we're generating real momentum toward growth across multiple years. Fresh contract wins, solid retention, upsell activity, pricing, and faster digital adoption all are moving in the right direction. That said, we're staying cautious until we see how higher education enrollment and final K-12 district award decisions shake out, since both matter greatly to the outlook for the entire year. Also, adjusted EBITDA can move between Q1 and Q2 because of academic seasonality and the timing of K-12 shipments, which is the reason we treat first half performance as the more meaningful yardstick. With that backdrop, quarterly total revenue beat our expectations, coming in at 550 million, which is up 2.6 million per cent from the prior year. Reoccurring revenue hit $426 million, rising almost 10 per cent, and making up 77 per cent of the overall revenue mix, which shows how durable and predictable our model is. Digital revenue climbed almost 9% versus a year ago, accounting for 64% of total revenue. The remaining performance obligation stood at 1.5 billion and should grow sequentially, mirroring normal K-12 seasonality. Adjusted EBITDA came to 207 million, producing a 37.7% margin, which is 192 basis points better than a year ago, or 60 basis points of growth once you strip out gains from selling intellectual property. Cost discipline, a richer digital mix, and productivity from AI drove the margin improvement, even as we kept investing in ELA, AI tools, and agentic curriculum pilots. Our margin profile leads the industry, reflecting a value proposition that stands apart. We see it as durable and believe it sets us up well for further expansion down the road. The overall momentum we're seeing in revenue growth, margin expansion, price realization, and market share share gains shows AI acting as a true tailwind for our business, something you'll notice across each of our segments. Now let's turn to the segments. Momentum carried on in higher education during the small but encouraging summer session, with 200 million in revenue for the quarter, up 10% from a year earlier, while rear recurring revenue rose 14% year-over-year. Trailing 12-month market share stayed above 30% through June, a gain of 140 basis points year-over-year, per MPI. At 57% of revenue, Inclusive Access keeps performing well, with activations and adoptions both picking up speed through June. Our evergreen continuous content delivery model, accounting for 68% of higher education revenue in the fiscal year 2026, safeguards our renewal base and opens more competitive takeaway opportunities, as shown by 59% of our accounts moving to the latest release without any sales rep. intervention. Our value based pricing approach keeps holding up, powered by continuous product improvements and a go to market approach that sets us apart. We're closely watching fall enrollment signals. Our overall guidance still bakes in an assumption of 1% enrollment growth, and we'll revise our assumptions as we learn more in the weeks ahead. Now for K-12: quarterly revenue came in at $274 million, which is 1.3% higher than the same period a year ago, while recurring revenue rose 7%, showing how durable our multi-year contracts are along with solid capture rates and science in ELA. Apart from math in California and Texas, our capture rates for K-12 sit at the upper end of the range we target, and momentum keeps building. As Philip noted, early results from our new ELA program are landing above the 25%-30% capture rate we aim for. The multi-year ELA cycle is now underway, with 44 states aligned to the science of reading, and California's adoption cycle begins in fiscal year 2028. For fiscal year 2027, our supplemental and intervention pipeline is up double digits, and renewal rates keep improving. We're embedding McGraw-Hill Plus in Emerge, Summit and SOAR to unify data across core and assessments. Global Professional brought in $35 million of revenue for the quarter, with recurring revenues up more than 6%. Medical Education accounts for 80% of that segment and offers substantial runway, as AI-enabled clinical simulations and diagnostic training tools gain early traction. And with non-strategic print titles winding down, the underlying growth profile of this business is becoming clearer. International generated $45 million of revenue in the quarter, held back by the Middle East conflict, which delayed K-12 shipments that are now being delivered. Expected growth in the Middle East and Latin America should offset ongoing higher education enrollment pressure in Canada, setting the region up for growth in fiscal year 2027; we closed the quarter with $194 million in cash and $644 million of total liquidity, and our revolving credit facility is still undrawn. Q1 reflects a seasonal working capital use related to back to school preparation, which landed below the prior year and produced better cash flow from operations. Collections will pick up after our main selling cycle, in line with historical seasonality. CapEx and product development are tracking with what we expected. Having moved past our cash trough, we're now building cash, with gross debt reduction as the top priority. During FY2026 we cut gross debt by $646 million, bringing annualized cash interest expense down by almost $45 million, and we remain committed to a net leverage target of 2 to 2.5 times. We'll also keep evaluating opportunities to optimize our capital structure; in July, Moody's raised our credit ratings across the board, reflecting our strong financial profile, reduced leverage, and dedication to further gross debt reduction. Our $50 million share repurchase authorization is still in place. Our cash and capital allocation approach hasn't changed. Organic reinvestment, debt reduction, select tuck-in M&A, and opportunistic share repurchases as a value-creating complement. The M&A pipeline stays active, with select targets that speed up our product development roadmap in adjacent areas that can be scaled across the organization; we are reaffirming this year 2027 guidance across all metrics ahead of the primary back to school period. The early signals look good, and our confidence in the financial path we're on hasn't wavered — especially since we now have clearer sight lines as the big selling period in fiscal Q2 moves along and students start showing up on campus. When we share our fiscal second quarter numbers in November, that will all go into how we shape guidance. That's the same playbook we used a year ago. Our attention stays on execution, and that's what backs our multi-year plan of mid single digit plus top-line growth along with continued margin expansion. With that said, I'll hand things back to the operator so we can take questions.

Hello, Steve Koenig. Thanks, and nice work on the quarter. First off, a question for Bob. Could you shed some light on what drove the better-than-expected results this quarter relative to what you had planned internally? Then I have one more for Phil. Thanks.

Absolutely. Appreciate it, Steve. Yes, we performed strongly throughout all our businesses; as I mentioned, momentum is building. What really stood out was how K-12 did, and specifically the upside there. Like we've said, please view that as a business split between the first half and the second half, and getting our educational materials out to districts before back to school begins is absolutely essential for us; so what you're picking up on is partly that advantage from shipping and completing in, let's say, June rather than July, yet making sure those materials reach districts on schedule truly matters. I'd say that accounts for most of the upside, though honestly we're quite happy with the momentum growing in higher ed and throughout our businesses.

Understood. Understood. Excellent. Appreciate it, Bob. Philip, over to you. Those data points you shared about how superior your AI tools are and the uptake of the AI reader are really, really heartening. Could you perhaps provide a bit more insight into where you stand on developing possible commercial structures for your AI approach, and maybe what you think investors might be missing or ought to understand regarding that approach? Many thanks.

We're extremely enthusiastic, I'd say, about so much of what's taking place with AI for us and really with tooling overall. One point I'd like to bring to investors' attention broadly is that during this quarter we shipped more than 284 curriculum and launches of AI tools and learning tools. Innovation on our end keeps speeding up; this ranks among the quickest rates we've ever achieved. I think it's fair for me to call it the quickest, and we did so while margins grew. That's worth emphasizing, and there are two explanations for it. To begin with, we can generate revenue on top of the curriculum licenses already in place. We hold more than 100 million curriculum licenses. If you look at the majority of other Ed Tech firms, they have tons of free users and hardly any paying ones, whereas we're beginning to monetize. Regarding the seven and a half million I mentioned, a number of those people are paying us extra fees beyond the curriculum license. Sharpen illustrates this well, since currently you pay for the curriculum and Sharpen then layers in learning tools too, and you'll watch us extend that approach across a broad range of our curriculum covering those 100 million curriculum licenses. So in certain instances it amounts to one more additional AI powered learning tool. Sometimes there will be an added fee for getting into AI or MCP. Other times, we are creating entirely new instruments. So I'd say this has us genuinely enthusiastic. Another thing you're noticing within places such as higher ed and K through 12 involves what we charge. In those markets, we can actually secure a higher price, and two things are pushing that: the tooling and the assessment offerings, plus the study aids sitting on top of those 100 million curriculum licenses.

Yes, hello everybody. Thank you for the presentation and for including us today. We were hoping to receive a bit of extra insight regarding the guidance philosophy, since it hasn't shifted even with the strong momentum during the quarter. So, how much conservatism regarding cap rates in K-12 has been incorporated? Should we anticipate upside risk for the entire year beyond, sort of, the earlier indication that it would land at the lower end of the range? And then, as a follow-up, could you share any further specifics on the early indicators for the full year? Regarding California ELA and ELA more broadly, as we consider capture rates at the segment level going forward.

Question. You know, we just talked on June 11th when we created our guide and relied on, sort of, all the information we possessed at that time to shape what the guidance would be. And we gave a range, obviously, for a variety of different outcomes. As we've moved forward since then, a couple of months have gone by. We haven't truly observed a significant change in terms of capture rates or anything suggesting a difference. Now, we did point out the momentum we're generating, especially in higher ed, we saw capture rates, we're seeing price, we're seeing other areas, but the most significant metric for us will be when students show up on campus. And so as we wait until the end of August and into September, those will serve as those indicators of where we'll stand in higher ed. So consistent with how we've done things previously, you know, this is a key quarter, but really it's only once we finish our second quarter that we can return and have greater visibility for the entire year.

And regarding ELA capture, we are extremely, extremely happy with what's occurring with our EMERG Summit and SOAR program; we're one of, as I noted during our earnings call or in some of my comments, one of the only completely dual language programs in the United States that covers the entire grade level. It's a truly important differentiator. The other thing, we have developed this thing, quite literally it's among the largest single investments we've ever made in McGraw Hill's history to introduce this program. And we're truly, truly thrilled about what's happening in the literacy market. It's one of the biggest mandate changes in curriculum that has ever taken place in the education market all at once; we're also excited about our rapid online assessment of reading, ROAR; so, we're delivering dyslexia screening alongside our literacy program, and we're seeing, seeing tremendous, tremendous progress. I noted last quarter that we earned 212 out of a 214 rubric in Colorado. I'm glad to share that our reviewer panel in California has just finished its work, so we anticipate the list being published around early September, though we have received a recommendation for approval; the war program I brought up earlier has also been approved in California. In California, our early win rate is quite remarkable. We're seeing districts such as Lake Washington, St. Cloud in Minnesota, Maricopa in Arizona, Snofarmie in Washington — some truly excellent districts that are adopting, and this is what we refer to as sort of year zero for the program. So it's just that we're only now rolling it out fully as we move into next year, and we're already observing rates that are much higher than those we saw with our prior program. Wonders represented roughly a $1.5 billion program for us across 10 years. And what we're finding is traction that actually surpasses a lot of what we saw when we initially launched that. So it's an exciting, exciting moment for us in literacy as we look ahead to the coming fiscal year.

Thanks, and good morning. In the quarter, higher ed results got a lift from three things: share gains, pricing, and enrollment. Could you break those drivers down and talk about how your results stack up against your biggest rivals?

Sure, thanks George. When we look at that 10% revenue growth, let's go back to last year — really, this ties to the spring semester, and it's simply a carryover from that point. So what you're seeing is enrollment running about 4% higher. On price, as we mentioned, price is sticking at a stronger rate, and we'll see that come in around 2%. What's left is mostly the portion attributable to share gains, and those are what's truly fueling the expansion. During my earlier prepared comments, I mentioned that we enter this pivotal back-to-school season from a position of real strength, as students come back to campus, backed by pricing, takeaways, and other factors that should sustain that momentum. A few additional thoughts from me. To start, I think our go-to-market team may rank among the very finest in the entire industry. In my view, it's the strongest I've encountered anywhere. I've spent time in go-to-market roles at Microsoft, Amazon, and Google — truly remarkable, remarkable teams — and I'd say the one we have right here is world-class. We put a lot of resources into customer success too, and it's clearly delivering results. When it comes to keeping customers, I'd say our numbers might be unmatched across the sector. Another key differentiator for us is the shift toward inclusive access. We made that change so that everything we offer is easier to reach. In certain situations, I think that puts us ahead of rivals on price, and on top of that we keep layering in additional value — particularly through offerings like evergreen. You know, I've watched accounts grow from 200,000 up to $600,000 in a very short time. That happens for a few reasons: folks adopt inclusive access, they bring in additional students, and then there's evergreen, which brings in more professors, since we never stop talking about keeping the content current. On top of that, our customer success teams go out and meet those professors in person. Meanwhile, some of our rivals are actually withdrawing their customer success people — scaling back their go-to-market groups. Last week I sat down with a professor — a really excellent one — and he told me the thing that sets you apart from everybody else is your team. Each individual picks up the phone, shows up, is present, and gets back to you. Their ability to support the instructor, the school, and the classroom is truly top-tier. So when you combine our on-the-ground presence within the company, the connections we've built, plus how consistently we handle our pricing and our content — well, you just don't find many businesses that can claim ten consecutive quarters, or even forty, of gaining share. That's a genuinely remarkable track record, and it's something we're very proud of.

Thanks a lot. The news about Roar really caught my attention. Hadn't you already offered something aimed at dyslexia? What made this particular product the choice? And how do you view what it means for the chances you have in that market?.

Well, as we said, roughly 1 in 10 people worldwide are estimated to have dyslexia. The brain is wired differently in that case. And it turns out the brain can actually be rewired. That matters a great deal. A huge amount of scientific work has been done. At Stanford especially, the program is regarded as among the finest anywhere for dyslexia. Being able to catch it early, then deliver the right intervention and instructional approaches so the brain can genuinely be rewired — that is truly essential. I believe a great deal of science has been completed, and they have been releasing very strong dyslexia screening. dyslexia. We have spent some time in the intervention supplemental market; we also have an excellent literacy program, so the capacity to spot any of multiple learning disabilities, particularly dyslexia, which ranks first; it truly offers us a path to enter a school district and deliver a holistic program that many other organizations are unable to offer. Another reason we're enthusiastic: it's among the few multilingual screeners available in the market. Spanish screening is included too. Overall, both within the United States and globally, this lets us simultaneously deliver a literacy program, intervene correctly, and then, I'd say, offer a district a service bundled together, making it possible to gauge proficiency for every kind of reading learner.

Okay, let me change direction for a moment and discuss the K-12 sector. I realize our lens is now a half-year rather than every three months, yet a number of others across this industry keep mentioning that choices are being made later than before. Are you noticing that too? Since our conversation three months ago, has the situation deteriorated or improved? Honestly, there has been no real movement. We continue to monitor certain supplemental intervention choices along with that pipeline and the way deals are getting finalized. Still, on the whole I'd describe things as matching what we observed 30 days back. So once more, the pipeline has been built by us. We feel good about where supplemental intervention stands — possibly the single segment where folks are encountering somewhat slower postponements regarding calls. That said, nothing has genuinely shifted in a meaningful way.

Yes, thank you. Good morning. My question concerns K12 as well, and really I just want to understand better the level of demand for agentic AI products and how that gets weighed against greater appetite for paper and pencil, especially during the earliest elementary years. So I'd appreciate hearing how you strike that balance between the two.

Thanks for asking. What a fantastic question. To be specific, considerable discussion — I'd call it debate — is happening at present regarding how much screen time belongs in classrooms. Certain places show a rather strong pushback. Bans on particular tools have actually appeared in a few classrooms. Meanwhile elsewhere, in other regions across the globe, there's momentum favoring screens. Our stance holds that screen use works appropriately, or ideally, depending on how much self-regulation a given learner possesses. I tend to compare it with a camera's lens. Sometimes it must stay quite tight and concentrated, yet as self-regulation grows, you can keep focus even while absorbing a wider portion of the world around you. During those earliest years — as I mentioned three months ago — we announced adoption by Seattle school districts; the board there felt worried and asked us to confirm that a mere 7% of instructional time involved a screen. That's something we're able to do, and it's exactly our practice: roughly 20 minutes each week. Then, once students reach the higher grades with AI, considerably greater AI capabilities become possible. So in those first years, I'd say AI mostly serves assessment, or briefly in certain situations intervention and supplemental work, though we also devote substantial effort to conventional instruction. What's truly remarkable about McGraw-Hill, I believe we can confidently state, is that we might rank among the biggest ed tech firms globally — perhaps even the biggest — given that 100 million paid subscribers access our content, yet at the same time we rank among the biggest print and paper based programs anywhere. That makes us one of a handful of organizations worldwide capable of delivering both print and digital at global scale, in whatever manner a school prefers. You'll therefore watch us keep developing tooling in this area. You'll watch us keep taking a leadership role. Within our company there are literally hundreds of PhDs whose work centers heavily on this question — what's appropriate for screens, and then what's appropriate for paper depending on which type of reader someone is. And as I said earlier, few companies possess the ability to do this at scale. Let me build on that point. Printing at scale, in my view, is extremely hard, and we handle it with tremendous efficiency. So consider a few of the competitors.

Those that are digital first and digitally native will truly face difficulties when it comes to printing at scale and getting it done on schedule; and like I said in my first question, getting that printed material delivered on time matters so much when students need it before the back to school period arrives, and doing so efficiently. And we have done this for an extremely long stretch. So our position is very strong. positioned should that transition happen down the road. Great. Thank you very much. And as a follow-up as well, you mentioned, you know, that you gain more business from OERs than you lose. I'm just wondering whether you could tell us about the most recent things happening with that. I realize it has been, you know, it has been a significant subject. So, you know, has anything changed in the past few months since we discussed this? No, it truly has not. You know, I have felt a lot of pride in the team all through the summer. Summer usually is somewhat of a slower period for selling.

or in the school market, as you can picture, quite a few teachers are enjoying some much-deserved time off during the summer, yet the team keeps winning; and we keep gaining both share as well as gaining share from OER. What I keep being told by everybody, and I have said this previously, is that teachers do not want to use up all their time away from school creating curriculum. They would prefer to be in the classroom with students. And so sort of making your own with a chatbot or a few OER resources and then having to work out how to create an assessment and then having to work out how to create an activity or to create a case study that sort of strengthens things; they genuinely do enjoy actually having a company such as McGraw-Hill bring the content to them as a package and then being able to add to it and concentrate on what they are superb at, which is really getting that content across to students. They will rely on plenty of extra content, but it genuinely assists to begin with a package that you have confidence in and that contains content you are aware has been curated by humans and with assessments that genuinely have been validated by a third party. So we keep winning throughout the summer, I suppose is what I would say, even if there are not many teachers making decisions.

Hi, thank you so much. Bob, I'd like to ask you a bit about something we discussed earlier and how it ties into the science of literacy. During the prior quarter, the company was closed. I'd say slightly — I'm not sure whether you'd characterize it as more cautious or as downplaying the capture rates they had anticipated, and now you're describing very strong capture rates. I'm trying to figure out what shifted within a single quarter, and is it tied to the fact that you've released this next generation literacy curriculum? And as you address that, I'd like you to briefly explain what's changing in the market across the various states and how that will affect, um, the cycles when it comes to curriculum — it appears to add to the cycles already in place; it appears to be something the market just isn't really giving credit for. And you can let me know whether these two things — the capture rates and this science and literacy — are linked.