June 11th, 2026

Operator Good morning, and welcome to the McGraw Hill, Inc. earnings conference call. All participants are in a listen-only mode. As a reminder, today's call is being recorded, and a written transcript and webcast replay will be made available in the Events and Presentation section of the company's investor relations website. Following the prepared remarks, we will open the call for questions. I would now like to turn the call over to your host, Danielle Kloeblen, Treasurer and Senior Vice President, Investor Relations. Please go ahead, Danielle. Danielle Kloeblen Good morning. Welcome to McGraw Hill's fiscal fourth quarter and full year ended March 31st, 2026, earnings call. Joining me today are Simon Allen, Chair of the Board of Directors, Philip Moyer, President and Chief Executive Officer, and Bob Sallmann, Executive Vice President and Chief Financial Officer. During today's call, we will be making forward-looking statements that are based on our current expectations and the current economic environment. These statements, estimates, and projections are subject to significant uncertainties beyond the control of management, as detailed in the cautionary language in our fiscal fourth quarter and full year ended March 31st, 2026, earnings release, the accompanying investor presentation, our Form 10-K and other SEC filings. We will also reference certain non-GAAP measures today, which we believe provide useful supplemental insight into our financial and operational performance, though they are not a substitute for GAAP measures. Definitions and GAAP reconciliations are available in our earnings release, the appendix to the investor presentation, and on our investor relations website. For those listening to a recording of this call, please note that the remarks are as of today, June 11th, 2026, and have not been subsequently updated. With that, I'll turn the call over to our Chair of the Board, Simon Allen. Simon Allen Good morning, everyone. Fiscal year 2026 demonstrated the strength of our business, our strategy, and the enduring importance of education. Our mission to support learners and educators, build human intelligence, and power the future of learning has never been more relevant. In a year marked by rapid AI advancement and global uncertainty, McGraw Hill reinforced our position as the partner educators and learners trust most. That foundation fuels our trajectory. As a data-driven learning company, we made significant strides in AI-powered innovation, launching new tools, expanding existing solutions, and deepening key partnerships that position McGraw Hill to lead the next era of AI-enabled learning. This execution reflects the strength of our strategy and the caliber of our leadership team, led by the right person. Having worked closely with Philip over the last 120 days, the board and I have full confidence in his vision and his ability to drive McGraw Hill's next chapter of growth. We are fully aligned and energized by what lies ahead. I'll now turn the call over to McGraw Hill's President and CEO, Philip Moyer. Philip Moyer Thank you, Simon. Good morning, everyone. It's a privilege to step into the CEO role and lead McGraw Hill in this exciting moment in education and technology. My first 120 days have been filled with over 250 customer, team, industry, and investor meetings. It's clear that education is at a seminal moment. Student populations are growing, the learning landscape is increasingly complex. Outcomes are more important than ever. Students, teachers, and institutions are looking for an enterprise partner that they trust to ensure the next generation of students are prepared. What is also clear to me is that McGraw Hill is uniquely positioned to be this partner. Our trusted content, our learning data, and our pace of AI innovation, along with the scale of our relationships, are unmatched. I believe we are positioned to be the global leader in this next generation. McGraw Hill has a great financial foundation. My focus for shareholders is to maintain our profit profile, reduce our debt, and accelerate our growth in fiscal year 2027 and beyond. I see many opportunities to lead in innovation, streamline and scale our execution. Profitably expand our TAM. In fiscal year 2026, we exceeded our IPO expectations for revenue and adjusted EBITDA. Achieved several important milestones. Recurring revenue grew by 6% and now represents over 73% of our total revenue. In K through 12, our capture rate exceeded expectations despite the expected cyclical decline in the market. In higher education, our net dollar retention reached 114%. Our customer satisfaction reached its highest level ever. In fiscal year 2026, we also proved that we could profitably accelerate execution. We introduced a record number of curriculum offerings and AI learning tools while improving our adjusted EBITDA margin by nearly 80 basis points year-over-year. We now have launched eight AI learning tools, which serve more than 7.5 million users. We have three additional launches planned this fiscal year. We launched our California math curriculum and a new literacy curriculum, the latter of which is our single largest investment in curriculum in our history. We also introduced a K through 12 AI curriculum designed to teach AI concepts and integrate them into the classroom learning. As we enter fiscal year 2027, we see clear opportunities for growth. The market dynamics support a multi-year acceleration of revenue growth and underpins our confidence in our medium-term framework for mid-single-digit plus revenue growth. One of the most exciting areas I see that supports our growth expectations is the use of AI. While I'm frequently asked by investors if AI will disrupt our business, I've rarely been asked that question by our customers. Students, teachers, parents, and institutions don't want to park a child in front of a generic LLM and hope for a good outcome. They know that AI is only as good as its data and its training. In my past 120 days, I've deepened my excitement about the competitive moat we are building in AI, trained specifically for education and the outcomes we produce. Our proprietary content catalog includes tens of thousands of courses, spanning more than 500 subjects mapped to hundreds of thousands of regulated learning objectives, and academic standards across roughly 12,000 school districts and approximately 3,300 higher ed institutions. We build our tools to meet digital accessibility requirements, ensuring broad access for learners, and we have our student outcomes measured by independent third parties. We have over 100 million active licenses by students and educators of this curriculum. From this usage, we captured over 25.6 billion learning interactions and have decades of data, over 190 terabytes, on how students learn, where they struggle, and how instruction must adapt in real time. This extraordinary content and data moat is what we use to build and tune our education-specific AI learning tools. It is also what we use to deliver a precision education experience, the right content, and the right question at the right moment. I'm excited about our use of AI because I'm seeing how we are expanding this precision experience and creating new opportunities for TAM expansion. One great example is the emerging agentic AI landscape. AI is evolving from answering questions to taking actions, customers need purpose-built agents that they trust. As a result, we are being asked to be a part of new agentic AI strategies in both education and non-education customers. I'm excited to announce that we are piloting our new agentic AI tool that will make our precision education experience accessible as a trusted AI agent. This represents a new business model and one of several opportunities to expand our TAM. At the same time, we continue to enhance our core learning solutions with artificial intelligence. We are expanding our Connect platform with Learning Coach, an AI conversational tutoring tool developed with Chiron Learning. We've added new accessibility features to AI Reader, including translations across 38 languages, and we've created new AI literacy modules. As I mentioned earlier, the education market is not just asking for better tools. It is demanding measurable outcomes. In fiscal year 2026, McGraw Hill extended our trust with educators with meaningful improvements in student comprehension and grades, which is now validated by more than 100 independent researchers. ALEKS, for example, continued to set the benchmark for adaptive learning, with math students achieving topic mastery more than 90% of the time. In Pennsylvania, elementary schools that were using ALEKS Adventure had first-grade students improving nearly 25 points on math assessments, and second graders improving more than 55 points over the course of the school year. AI Reader generated 57 million learning interactions across 2.4 million students, driving a higher engagement with teacher-assigned reading topics. With our Sharpen tool, students engaged up to four times more with study activities than compared to generic AI tools. At Rowan College in New Jersey, for example, students who use Sharpen achieved final exam scores 47% higher than peers who didn't use the tool. Looking ahead, our strategy focuses on four priorities

strengthening the core, expanding our cross-sell opportunities, growing our addressable market, and driving operational efficiencies. In K through 12, we're continuing to evolve our California math program to meet the emerging requirements of the market. This California math adoption cycle has been slower than expected, but 80% of the market remains undecided. Also, in K12, we're entering one of the most important nationwide curriculum refresh cycles in this millennium, as an unprecedented amount of schools evaluate new English Language Arts programs. Since 2021, we've invested over $100 million in our new science of reading ELA program, Emerge!, Summit!, and Soar!. This is our largest curriculum investment to date, and we are seeing early district wins and a strong rubric of scores ahead of emerging opportunities. In higher education, we continue to gain share as institutions adopt inclusive access, expand their use of our Evergreen model, and seek more integrated learning experiences. fiscal fourth quarter marked our 40th consecutive quarter of market share gains in higher ed, with our share approaching 31% according to MPI.

Our Net Promoter Score reached a record in the spring, and we saw strong retention and volume growth. We've also seen solid adoption of our new offerings in credentialing and AI professional development. Within our global professional business, medical education represents more than 75% of revenue. The World Health Organization projects a shortage of 11 million healthcare workers by 2030, and this year we expanded our offerings into clinical traini...