Technology
Workday Announces Fiscal 2025 Second Quarter Financial Results
Published
2 years agoon
By
Fiscal Second Quarter Total Revenues of $2.085 Billion, Up 16.7% Year Over Year
Subscription Revenues of $1.903 Billion, Up 17.2% Year Over Year
PLEASANTON, Calif., Aug. 22, 2024 /PRNewswire/ — Workday, Inc. (NASDAQ: WDAY), a leading provider of solutions to help organizations manage their people and money, today announced results for the fiscal 2025 second quarter ended July 31, 2024.
Fiscal 2025 Second Quarter Results
Total revenues were $2.085 billion, an increase of 16.7% from the second quarter of fiscal 2024. Subscription revenues were $1.903 billion, an increase of 17.2% from the same period last year.Operating income was $111 million, or 5.3% of revenues, compared to an operating income of $36 million, or 2.0% of revenues, in the same period last year. Non-GAAP operating income for the second quarter was $518 million, or 24.9% of revenues, compared to a non-GAAP operating income of $421 million, or 23.6% of revenues, in the same period last year.1Diluted net income per share was $0.49, compared to diluted net income per share of $0.30 in the second quarter of fiscal 2024. Non-GAAP diluted net income per share was $1.75, compared to non-GAAP diluted net income per share of $1.43 in the same period last year.112-month subscription revenue backlog was $6.80 billion, up 16.1% from the same period last year. Total subscription revenue backlog was $21.58 billion, increasing 20.9% year-over-year.Operating cash flows were $571 million compared to $425 million in the prior year. Free cash flows were $516 million compared to $360 million in the prior year.1Workday repurchased approximately 1.4 million shares of Class A common stock for $309 million as part of its share repurchase program.Cash, cash equivalents, and marketable securities were $7.37 billion as of July 31, 2024.
1
See the section titled “About Non-GAAP Financial Measures” in the accompanying financial tables for further details.
Comments on the News
“Workday delivered a solid quarter of growth and operating margin expansion, as businesses of all sizes and industries around the world increasingly turn to Workday as their trusted partner in navigating the future of work,” said Carl Eschenbach, CEO, Workday. “Through the power of our unified, AI-powered platform and our expanding partner ecosystem, we’re reimagining HR and Finance to consistently increase the value we deliver to our customers. Our commitment to customer success, AI innovation, and delivering true business value will propel us into the future.”
“Our second quarter performance was ahead of our expectations across our key financial metrics,” said Zane Rowe, CFO, Workday. “We remain focused on balancing targeted investments across our growth areas along with driving efficiencies across the company as we leverage the power of the platform. We see a macroeconomic environment consistent with last quarter and are reiterating our full-year FY25 subscription revenue guidance while slightly raising our expectation for FY25 non-GAAP operating margin.”
Recent Highlights
Workday joined the Fortune 500 list for the first time, ranking it among the largest U.S. companies by revenue.Workday now has more than 70 million users under contract and more than 2,000 Workday Financial Management customers.Workday added several full suite customers for Workday Financial Management and Workday Human Capital Management (HCM), including Clemson University, County of San Joaquin, and Presbyterian Healthcare Services. Workday announced new innovations to further bolster its global payroll strategy, which include the global availability of Workday Payroll provided by Strada, and its new Global Payroll Connect, a unified global payroll solution that can seamlessly connect with payroll providers.Workday announced new updates to make it easier for partners to build solutions, including AI services for Workday Extend; the general availability of Workday AI Marketplace; and Built on Workday, a new program to help partners build, manage, and distribute finance and HCM apps and industry solutions.Workday announced strategic partnerships with Equifax, Salesforce, and Kainos.Workday announced that HiredScore AI for Recruiting and HiredScore AI for Talent Mobility are now available through Workday to boost recruiter productivity and empower hiring managers and employees.Workday announced that its Board of Directors approved a new share repurchase program to repurchase up to an additional $1.0 billion of shares of its Class A common stock.According to Gartner® market share research, Workday had the largest market share in 2023 for ERP Worldwide SaaS revenue at 19.6%.1Workday was named a Leader in The Forrester Wave™ for Enterprise Resource Planning Solutions For Service-Centric Industries, Q2 2024.2
1
Gartner® Market Share: Enterprise Application Software as a Service, Worldwide, 2023, Varsha Mehta, Neha Gupta, Chris Pang, Craig Roth, Jim Hare, Julian Poulter, Balaji Abbabatulla, Kevin Quinn, Roland Johnson, Radu Miclaus, Alexandre Oddos, Amarendra ., Anand Chouksey, Mudit Sharma, Kanchi Bindal, 14 June 2024.
2
By Liz Herbert with Linda Ivy-Rosser, George Lawrie, Sara Sjoblom, February 20, 2024.
Financial Outlook
Workday is updating its guidance for the fiscal 2025 full year ending January 31, 2025 as follows:
Subscription revenue between $7.700 billion to $7.725 billion, representing growth of approximately 17%Non-GAAP operating margin of 25.25%1
Workday is providing guidance for the fiscal 2025 third quarter ending October 31, 2024 as follows:
Subscription revenue of $1.955 billion, representing growth of 16%Non-GAAP operating margin of 25.25%1
1
The Company has not provided a reconciliation of its forward outlook for non-GAAP operating margin with its forward-looking GAAP operating margin in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company is unable to predict with reasonable certainty the amount and timing of adjustments that are used to calculate this non-GAAP financial measure, particularly related to stock-based compensation and its related tax effects, acquisition-related costs, and realignment costs.
Earnings Call Details
Workday plans to host a conference call today to review its fiscal 2025 second quarter financial results and to discuss its financial outlook. The call is scheduled to begin at 1:30 p.m. PT/4:30 p.m. ET and can be accessed via webcast. The webcast will be available live, and a replay will be available following completion of the live broadcast for approximately 90 days.
Workday uses the Workday Blog as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
About Workday
Workday is a leading enterprise platform that helps organizations manage their most important assets – their people and money. The Workday platform is built with AI at the core to help customers elevate people, supercharge work, and move their business forever forward. Workday is used by more than 10,500 organizations around the world and across industries – from medium-sized businesses to more than 60% of the Fortune 500. For more information about Workday, visit workday.com.
© 2024 Workday, Inc. All rights reserved. Workday and the Workday logo are registered trademarks of Workday, Inc. All other brand and product names are trademarks or registered trademarks of their respective holders.
Forward-Looking Statements
This press release contains forward-looking statements including, among other things, statements regarding our intended share repurchases, Workday’s full-year and third quarter fiscal 2025 subscription revenue and non-GAAP operating margin, growth, innovation, strategy, and investments. These forward-looking statements are based only on currently available information and our current beliefs, expectations, and assumptions. Because forward-looking statements relate to the future, they are subject to risks, uncertainties, assumptions, and changes in circumstances that are difficult to predict and many of which are outside of our control. If the risks materialize, assumptions prove incorrect, or we experience unexpected changes in circumstances, actual results could differ materially from the results implied by these forward-looking statements, and therefore you should not rely on any forward-looking statements. Risks include, but are not limited to: (i) breaches in our security measures or those of our third-party providers, unauthorized access to our customers’ or other users’ personal data, or disruptions in our data center or computing infrastructure operations; (ii) service outages, delays in the deployment of our applications, and the failure of our applications to perform properly; (iii) privacy concerns and evolving domestic or foreign laws and regulations; (iv) the impact of continuing global economic and geopolitical volatility on our business, as well as on our customers, prospects, partners, and service providers; (v) any loss of key employees or the inability to attract, train, and retain highly skilled employees; (vi) competitive factors, including pricing pressures, industry consolidation, entry of new competitors and new applications, advancements in technology, and marketing initiatives by our competitors; (vii) our reliance on our network of partners to drive additional growth of our revenues; (viii) the regulatory, economic, and political risks associated with our domestic and international operations; (ix) adoption of our applications and services by customers and individuals, including any new features, enhancements, and modifications, as well as our customers’ and users’ satisfaction with the deployment, training, and support services they receive; (x) the regulatory risks related to new and evolving technologies such as AI and our ability to realize a return on our development efforts; (xi) our ability to realize the expected business or financial benefits of any acquisitions of or investments in companies; (xii) delays or reductions in information technology spending; and (xiii) changes in sales, which may not be immediately reflected in our results due to our subscription model. Further information on these and additional risks that could affect Workday’s results is included in our filings with the Securities and Exchange Commission (“SEC”), including our most recent report on Form 10-Q or Form 10-K and other reports that we have filed and will file with the SEC from time to time, which could cause actual results to vary from expectations. Workday assumes no obligation to, and does not currently intend to, update any such forward-looking statements after the date of this release, except as required by law.
Any unreleased services, features, or functions referenced in this document, our website, or other press releases or public statements that are not currently available are subject to change at Workday’s discretion and may not be delivered as planned or at all. Customers who purchase Workday services should make their purchase decisions based upon services, features, and functions that are currently available.
Workday, Inc.
Condensed Consolidated Balance Sheets
(in millions)
(unaudited)
July 31, 2024
January 31, 2024
Assets
Current assets:
Cash and cash equivalents
$ 1,635
$ 2,012
Marketable securities
5,738
5,801
Trade and other receivables, net
1,292
1,639
Deferred costs
237
232
Prepaid expenses and other current assets
298
255
Total current assets
9,200
9,939
Property and equipment, net
1,259
1,234
Operating lease right-of-use assets
339
289
Deferred costs, noncurrent
487
509
Acquisition-related intangible assets, net
331
233
Deferred tax assets
1,022
1,065
Goodwill
3,257
2,846
Other assets
339
337
Total assets
$ 16,234
$ 16,452
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
$ 87
$ 78
Accrued expenses and other current liabilities
292
287
Accrued compensation
487
544
Unearned revenue
3,549
4,057
Operating lease liabilities
98
89
Total current liabilities
4,513
5,055
Debt, noncurrent
2,982
2,980
Unearned revenue, noncurrent
62
70
Operating lease liabilities, noncurrent
284
227
Other liabilities
48
38
Total liabilities
7,889
8,370
Stockholders’ equity:
Common stock
0
0
Additional paid-in capital
10,869
10,400
Treasury stock
(1,051)
(608)
Accumulated other comprehensive income (loss)
19
21
Accumulated deficit
(1,492)
(1,731)
Total stockholders’ equity
8,345
8,082
Total liabilities and stockholders’ equity
$ 16,234
$ 16,452
Workday, Inc.
Condensed Consolidated Statements of Operations
(in millions, except number of shares which are reflected in thousands and per share data)
(unaudited)
Three Months Ended July 31,
Six Months Ended July 31,
2024
2023
2024
2023
Revenues:
Subscription services
$ 1,903
$ 1,624
$ 3,719
$ 3,152
Professional services
182
163
356
319
Total revenues
2,085
1,787
4,075
3,471
Costs and expenses (1):
Costs of subscription services
304
256
594
495
Costs of professional services
207
192
406
371
Product development
649
610
1,305
1,210
Sales and marketing
611
524
1,184
1,043
General and administrative
203
169
411
336
Total costs and expenses
1,974
1,751
3,900
3,455
Operating income (loss)
111
36
175
16
Other income (expense), net
57
46
116
73
Income (loss) before provision for (benefit from) income taxes
168
82
291
89
Provision for (benefit from) income taxes
36
3
52
10
Net income (loss)
$ 132
$ 79
$ 239
$ 79
Net income (loss) per share, basic
$ 0.50
$ 0.30
$ 0.90
$ 0.30
Net income (loss) per share, diluted
$ 0.49
$ 0.30
$ 0.89
$ 0.30
Weighted-average shares used to compute net income (loss) per share, basic
265,317
261,191
264,885
260,026
Weighted-average shares used to compute net income (loss) per share, diluted
267,949
264,435
269,128
262,923
(1) Costs and expenses include share-based compensation expenses as follows:
Three Months Ended July 31,
Six Months Ended July 31,
2024
2023
2024
2023
Costs of subscription services
$ 35
$ 30
$ 73
$ 59
Costs of professional services
28
29
59
59
Product development
163
162
336
332
Sales and marketing
77
67
149
147
General and administrative
67
64
138
125
Total share-based compensation expenses
$ 370
$ 352
$ 755
$ 722
Workday, Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended July 31,
Six Months Ended July 31,
2024
2023
2024
2023
Cash flows from operating activities:
Net income (loss)
$ 132
$ 79
$ 239
$ 79
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
79
71
154
142
Share-based compensation expenses
370
352
755
722
Amortization of deferred costs
62
52
121
101
Non-cash lease expense
25
24
51
48
(Gains) losses on investments
3
(1)
10
7
Accretion of discounts on marketable debt securities, net
(29)
(38)
(62)
(72)
Deferred income taxes
27
0
33
2
Other
9
(6)
11
(12)
Changes in operating assets and liabilities, net of business combinations:
Trade and other receivables, net
(157)
(183)
351
290
Deferred costs
(64)
(68)
(104)
(103)
Prepaid expenses and other assets
46
25
24
7
Accounts payable
2
2
12
(56)
Accrued expenses and other liabilities
69
36
(124)
(187)
Unearned revenue
(3)
80
(528)
(265)
Net cash provided by (used in) operating activities
571
425
943
703
Cash flows from investing activities:
Purchases of marketable securities
(1,365)
(1,585)
(2,143)
(3,473)
Maturities of marketable securities
1,035
1,240
2,132
2,471
Sales of marketable securities
51
25
68
48
Capital expenditures
(55)
(65)
(136)
(124)
Business combinations, net of cash acquired
(10)
0
(522)
0
Purchase of other intangible assets
0
0
0
(9)
Purchases of non-marketable equity and other investments
(7)
0
(7)
(11)
Sales and maturities of non-marketable equity and other investments
5
0
5
0
Net cash provided by (used in) investing activities
(346)
(385)
(603)
(1,098)
Cash flows from financing activities:
Repurchases of common stock
(312)
(139)
(440)
(139)
Proceeds from issuance of common stock from employee equity plans
106
95
106
95
Taxes paid related to net share settlement of equity awards
(141)
(5)
(381)
(8)
Net cash provided by (used in) financing activities
(347)
(49)
(715)
(52)
Effect of exchange rate changes
0
1
0
0
Net increase (decrease) in cash, cash equivalents, and restricted cash
(122)
(8)
(375)
(447)
Cash, cash equivalents, and restricted cash at the beginning of period
1,771
1,456
2,024
1,895
Cash, cash equivalents, and restricted cash at the end of period
$ 1,649
$ 1,448
$ 1,649
$ 1,448
Workday, Inc.
Reconciliations of GAAP to Non-GAAP Data
Reconciliations of our GAAP to non-GAAP operating results are included in the following table (in millions, except percentages and per share data). See the section titled “About Non-GAAP Financial Measures” below for further details.
Three Months Ended July 31,
Six Months Ended July 31,
2024
2023
2024
2023
Non-GAAP operating income (loss)
Operating income (loss)
$ 111
$ 36
$ 175
$ 16
Share-based compensation expenses
370
352
755
722
Employer payroll tax-related items on employee stock transactions
10
12
48
37
Amortization of acquisition-related intangible assets
20
21
37
42
Acquisition-related costs
6
0
10
0
Realignment costs
1
0
8
0
Non-GAAP operating income (loss)
$ 518
$ 421
$ 1,033
$ 817
Non-GAAP operating margin(1)
Operating margin
5.3 %
2.0 %
4.3 %
0.5 %
Share-based compensation expenses
17.7 %
19.7 %
18.5 %
20.8 %
Employer payroll tax-related items on employee stock transactions
0.6 %
0.7 %
1.2 %
1.1 %
Amortization of acquisition-related intangible assets
1.0 %
1.2 %
1.0 %
1.1 %
Acquisition-related costs
0.3 %
0.0 %
0.2 %
0.0 %
Realignment costs
0.0 %
0.0 %
0.2 %
0.0 %
Non-GAAP operating margin
24.9 %
23.6 %
25.4 %
23.5 %
Non-GAAP diluted net income (loss) per share(1)(2)
Diluted net income (loss) per share
$ 0.49
$ 0.30
$ 0.89
$ 0.30
Share-based compensation expenses
1.38
1.33
2.80
2.74
Employer payroll tax-related items on employee stock transactions
0.04
0.05
0.18
0.14
Amortization of acquisition-related intangible assets
0.07
0.08
0.14
0.16
Acquisition-related costs
0.02
0.00
0.04
0.00
Realignment costs
0.00
0.00
0.03
0.00
Losses (gains) on strategic investments, net
0.01
0.00
0.04
0.03
Income tax effects
(0.26)
(0.33)
(0.63)
(0.61)
Non-GAAP diluted net income (loss) per share
$ 1.75
$ 1.43
$ 3.49
$ 2.76
(1)
Operating margin and diluted net income (loss) per share are calculated using unrounded data.
(2)
For the three months ended July 31, 2024, GAAP and non-GAAP diluted net income per share were calculated based upon 267,949 diluted
weighted-average shares of common stock. For the three months ended July 31, 2023, GAAP and non-GAAP diluted net income per share were
calculated based upon 264,435 diluted weighted-average shares of common stock. For the six months ended July 31, 2024, GAAP and non-GAAP
diluted net income per share were calculated based upon 269,128 diluted weighted-average shares of common stock. For the six months ended
July 31, 2023, GAAP and non-GAAP diluted net income per share were calculated based upon 262,923 diluted weighted-average shares of
common stock.
Reconciliation of our GAAP cash flows from operating activities to non-GAAP free cash flow is as follows (in millions). See the section titled “About Non-GAAP Financial Measures” below for further details.
Three Months Ended July 31,
Six Months Ended July 31,
2024
2023
2024
2023
Net cash provided by (used in) operating activities
$ 571
$ 425
$ 943
$ 703
Less: Capital expenditures
(55)
(65)
(136)
(124)
Free cash flows
$ 516
$ 360
$ 807
$ 579
About Non-GAAP Financial Measures
Change in Non-GAAP Financial Measures
Effective beginning fiscal 2025, Workday will exclude certain acquisition-related costs, realignment costs, and gains and losses on strategic investments from its non-GAAP results as these items may vary from period to period independent of the operating performance of Workday’s business. Prior period amounts have been recast for gains and losses on strategic investments to conform to this presentation. There was no impact to prior period amounts presented in this release for acquisition-related costs or realignment costs since no qualifying costs were incurred in the first half of fiscal 2024.
Non-GAAP Financial Measures
To provide investors and others with additional information regarding Workday’s results, we have disclosed the following non-GAAP financial measures: non-GAAP operating income (loss), non-GAAP operating margin, non-GAAP diluted net income (loss) per share, and free cash flows. Workday has provided a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. Non-GAAP operating income (loss) and non-GAAP operating margin differ from GAAP in that they exclude share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, acquisition-related costs, and realignment costs. Non-GAAP diluted net income (loss) per share differs from GAAP in that it excludes share-based compensation expenses, employer payroll tax-related items on employee stock transactions, amortization expense for acquisition-related intangible assets, acquisition-related costs, realignment costs, gains and losses on strategic investments, and income tax effects. Free cash flows differ from GAAP cash flows from operating activities in that it treats capital expenditures as a reduction to cash flows.
Workday’s management uses these non-GAAP financial measures to understand and compare operating results across accounting periods, for internal budgeting and forecasting purposes, for short- and long-term operating plans, and to evaluate Workday’s financial performance. Management believes these non-GAAP financial measures reflect Workday’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in Workday’s business. Management also believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating Workday’s operating results and prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.
Management believes excluding the following items from the GAAP Condensed Consolidated Statements of Operations is useful to investors and others in assessing Workday’s operating performance due to the following factors:
Share-based compensation expenses. Share-based compensation primarily consists of non-cash expenses for employee restricted stock units and our employee stock purchase plan, and includes share-based compensation associated with acquisitions. Although share-based compensation is an important aspect of the compensation of our employees and executives, this expense is determined using a number of factors, including our stock price, volatility, and forfeiture rates, that are beyond our control and generally unrelated to operational decisions and performance in any particular period. Further, share-based compensation expenses are not reflective of the value ultimately received by the grant recipients.Employer payroll tax-related items on employee stock transactions. We exclude the employer payroll tax-related items on employee stock transactions in order to show the full effect that excluding share-based compensation expenses has on our operating results. Similar to share-based compensation expenses, this tax expense is dependent on our stock price and other factors that are beyond our control and do not correlate to the operation of our business.Amortization of acquisition-related intangible assets. For business combinations, we generally allocate a portion of the purchase price to intangible assets. The amount of the allocation is based on estimates and assumptions made by management and is subject to amortization. The amount of purchase price allocated to intangible assets and the term of the related amortization can vary significantly and are unique to each acquisition and thus we do not believe this activity is reflective of our ongoing operations. Although we exclude the amortization of acquisition-related intangible assets from these non-GAAP financial measures, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and contribute to revenue generation.Acquisition-related costs. Acquisition-related costs include direct transaction costs, such as due diligence and advisory fees, and certain compensation and integration-related expenses. We exclude the effects of acquisition-related costs as we believe these transaction-specific expenses are inconsistent in amount and frequency and do not correlate to the operation of our business.Realignment costs. Realignment costs are associated with a formal restructuring plan and are primarily related to employee severance, the closure of facilities, and cancellation of certain contracts. We exclude these expenses because they are not reflective of ongoing business and operating results.Gains and losses on strategic investments. Our strategic investments include investments in early stage companies that are valuable to Workday customers and complementary to Workday products. Gains and losses on strategic investments may result from observable price adjustments and impairment charges on non-marketable equity securities, ongoing mark-to-market adjustments on marketable equity securities, and the sale of equity investments. We do not rely on these securities to fund our ongoing operations nor do we actively trade publicly held securities, and therefore we do not consider the gains and losses on these strategic investments to be reflective of our ongoing operations.Income tax effects. We utilize a fixed long-term projected tax rate in our computation of the non-GAAP income tax provision to provide better consistency across the reporting periods. In projecting this long-term non-GAAP tax rate, we utilize a three-year financial projection that excludes the direct impact of the items excluded from GAAP income in calculating our non-GAAP income. The projected rate considers other factors such as our current operating structure, existing tax positions in various jurisdictions, and key legislation in major jurisdictions where we operate. For fiscal 2025 and 2024, we determined the projected non-GAAP tax rate to be 19%, which reflects currently available information, as well as other factors and assumptions. We will periodically re-evaluate this tax rate, as necessary, for significant events, relevant tax law changes, material changes in the forecasted geographic earnings mix, and any significant acquisitions.
Additionally, with regards to free cash flows, Workday’s management believes that reducing cash provided by (used in) operating activities by capital expenditures is meaningful to investors and others because it provides an enhanced view of cash flow generation from the ongoing operations of our business, and it balances operating results, cash management, and capital efficiency.
The use of these non-GAAP measures have certain limitations as they do not reflect all items of expense or cash that affect Workday’s operations. Workday compensates for these limitations by reconciling the non-GAAP financial measures to the most comparable GAAP financial measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Management encourages investors and others to review Workday’s financial information in its entirety and not rely on a single financial measure.
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SOURCE Workday, Inc.
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A webcast of the conference call will be available in the Investor Relations section of Escalade’s website at www.escaladeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.
To participate in the live teleconference:
Domestic Live:
833-890-3250
International Live:
412-206-6441
To listen to a replay of the teleconference, which subsequently will be available through August 13, 2026:
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844-512-2921
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10209663
ABOUT ESCALADE
Founded in 1922, and headquartered in Evansville, Indiana, Escalade designs, manufactures, and sells sporting goods, safety, fitness, and indoor/outdoor recreation equipment. Our mission is to connect family and friends, create lasting memories, and play life to the fullest. Leaders in our respective categories, Escalade’s distinct and acclaimed brands include Goalrilla™ in-ground basketball hoops; STIGA® tennis tables and accessories; Bear® Archery and archery equipment; Brunswick Billiards® tables and accessories; Accudart® darting; ONIX® pickleball; Lifeline® fitness products; and RAVE Sports® water recreation products. Escalade’s products are available online and through leading retailers nationwide. For more information about Escalade’s diverse and prominent brand portfolio, history, financials, and governance, please visit www.escaladeinc.com.
INVESTOR RELATIONS CONTACT
Wesley Smith
Vice President, Financial Reporting & Investor Relations
812-467-1334
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SOURCE Escalade, Incorporated
Technology
Analog Devices to Report Third Quarter Fiscal Year 2026 Financial Results on Wednesday, August 19, 2026
Published
13 minutes agoon
July 23, 2026By
WILMINGTON, Mass., July 23, 2026 /PRNewswire/ — Analog Devices, Inc. (Nasdaq: ADI) today announced it will release financial results for the third quarter fiscal year 2026 at 7:00 a.m. Eastern time on Wednesday, August 19, 2026. Following the press release, the Company will host a conference call at 10:00 a.m. Eastern time, the same day. Vincent Roche, Chief Executive Officer and Chair, Richard Puccio, Executive Vice President and Chief Financial Officer, and Jeff Ambrosi, Head of Investor Relations, Senior Director, will discuss ADI’s results and business outlook.
The press release, live conference call and subsequent archived copies can be accessed on Analog Devices’ Investor Relations website at investor.analog.com. To participate in the live conference call, please pre-register at: register-conf.media.server.com. Upon registering, you will be emailed a dial-in number and unique PIN.
About Analog Devices, Inc.
Analog Devices, Inc. (NASDAQ: ADI) is a global semiconductor leader that bridges the physical and digital worlds to enable breakthroughs at the Intelligent Edge. ADI combines analog, digital, AI, and software technologies into solutions that combat climate change, reliably connect humans and the world, and help drive advancements in automation and robotics, mobility, healthcare, energy and data centers. With revenue of more than $11 billion in FY25, ADI ensures today’s innovators stay Ahead of What’s Possible. Learn more at www.analog.com and on LinkedIn and X.
Jeff Ambrosi
Head of Investor Relations, Senior Director
Analog Devices, Inc.
781-461-3282
invesor.relations@analog.com
View original content to download multimedia:https://www.prnewswire.com/news-releases/analog-devices-to-report-third-quarter-fiscal-year-2026-financial-results-on-wednesday-august-19-2026-302832572.html
SOURCE Analog Devices, Inc.
Technology
Scholastic Reports Fourth Quarter and Fiscal 2026 Results
Published
13 minutes agoon
July 23, 2026By
Fiscal 2026 Operating Income of $15.2 Million; Adjusted EBITDA of $151.5 Million, Up 4%, in Line With Guidance
Returned Over $285 Million to Shareholders During Fiscal Year
Fiscal 2027 Outlook Targets Return to Revenue Growth and Higher Adjusted EBITDA on Comparable Basis
NEW YORK, July 23, 2026 /PRNewswire/ — Scholastic Corporation (NASDAQ: SCHL), the global children’s publishing, education and media company, today reported financial results for the Company’s fiscal fourth quarter and full year ended May 31, 2026.
Peter Warwick, President and Chief Executive Officer, said, “Fiscal 2026 demonstrated the earnings power of a more focused Scholastic, as the Company made substantial progress in a multi-year transformation of its governance, organization, strategy and balance sheet. Adjusted EBITDA rose, in line with guidance, positioning the Company for growth in fiscal 2027.”
Fiscal 2026 revenue decreased 3%, and operating income was $15.2 million, compared with $15.8 million in fiscal 2025. Adjusted operating income, excluding one-time items, increased to $47.1 million from $35.8 million in the prior year period. Adjusted EBITDA was $151.5 million, up 4%, and increased 15% on a comparable basis, reflecting the full-year impact of additional lease expense and the loss of rental income from the sale-leaseback transactions in both periods. In the fourth quarter, Adjusted EBITDA increased $1.0 million on that same comparable basis, driven by continued strong execution in Book Fairs, Entertainment’s return to growth and disciplined cost management across the Company, even as revenue was affected by expected comparisons against an exceptional prior-year quarter in Trade and continued funding volatility in Education.
Mr. Warwick continued, “Today, our company is more clearly organized around the advantages that make Scholastic distinctive: a trusted brand, beloved IP, proprietary school-based channels and deep relationships with educators and families built over more than a century. Scholastic remains uniquely positioned to connect books, schools, homes and screens in ways that deepen kids’ engagement with stories and bring more children back to reading at a scale and depth that others cannot easily replicate.
“During the fourth quarter, we continued to see the impact of this strategy across the business. Book Fairs deepened our reach with schools and families, Trade Publishing remained anchored by enduring children’s franchises, and Entertainment expanded discovery and engagement with Scholastic IP across platforms. In Education, while funding volatility and a challenging supplemental curriculum market continued to pressure results, we made progress repositioning the business around a more focused strategy, improved execution and lower cost structure, with trends improving throughout the year.
“Fiscal 2026 was also an important year of capital deployment and shareholder value creation. Following the sale-leaseback transactions, we returned significant capital to shareholders through share repurchases, a modified Dutch auction tender offer and dividends, and established a long-term leverage framework that supports both disciplined investment and continued capital returns. Together, these actions completed major elements of our financial transformation and provide Scholastic with greater financial flexibility to enhance shareholder returns.
“As we enter fiscal 2027, Scholastic is strongly positioned to translate its durable advantages into profitable, sustained growth. Our outlook reflects expected revenue growth and higher Adjusted EBITDA on a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods. We remain focused on continued execution of our plan, disciplined cost management and targeted investment in the areas where Scholastic has the greatest opportunity to drive long-term growth, deepen our impact with children, families and educators, and create sustained value for shareholders.”
Outlook
In fiscal 2027, the Company expects revenue growth of approximately 2% to 4% and Adjusted EBITDA of approximately $135 million to $145 million. The Adjusted EBITDA range represents growth compared with fiscal 2026 Adjusted EBITDA on a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods.
This outlook reflects expected growth in Children’s Books, Entertainment and International, improved performance in Education, disciplined cost management and targeted investment in long-term growth opportunities.
The Company also expects Free Cash Flow (a non-GAAP financial measure, explained in the accompanying tables) of approximately $35 million to $40 million.
Fiscal 2026 Q4 Review
In $ millions (except per share data)
Fourth Quarter
Change
Fiscal 2026
Fiscal 2025
$
%
Revenues
$
476.1
$
508.3
$
(32.2)
(6) %
Operating income (loss)
$
51.4
$
53.5
$
(2.1)
(4) %
Earnings (loss) before taxes
$
14.5
$
48.9
$
(34.4)
(70) %
Diluted earnings (loss) per share
$
0.45
$
0.59
$
(0.14)
(24) %
Operating income (loss), ex. one-time items* (1)
$
58.3
$
63.4
$
(5.1)
(8) %
Diluted earnings (loss) per share, ex. one-time items*
$
2.19
$
0.87
$
1.32
152 %
Adjusted EBITDA* (1)
$
84.7
$
91.2
$
(6.5)
(7) %
Pro forma Adjusted operating income* (2)
$
58.3
$
59.5
$
(1.2)
(2) %
Pro forma Adjusted EBITDA* (2)
$
84.7
$
83.7
$
1.0
1 %
* Please refer to the non-GAAP financial tables attached
(1)
Fiscal 2026 fourth-quarter Operating income excluding one-time items and Adjusted EBITDA include
net costs of $4.2 and $7.8, respectively, related to the sale-leaseback transactions completed in
December 2025.
(2)
Pro forma Adjusted operating income and Pro forma Adjusted EBITDA reflect the full-period impact of
the sale-leaseback transactions in each period presented. The Company refers to these measures in
this release as results “on a comparable basis.” See Table 7 for the reconciliation to Adjusted operating
income and Adjusted EBITDA.
Revenues decreased 6% to $476.1 million, as continued growth in Book Fairs and higher Entertainment revenues were more than offset by lower Trade and International revenues due to more challenging comparisons with the prior-year publishing schedule and lower revenues in Education.
Operating Income decreased 4% to $51.4 million in the quarter compared to $53.5 million a year ago, including $6.9 million and $9.9 million in one-time charges in each period, respectively. Excluding one-time charges in both periods, adjusted operating income decreased $5.1 million to $58.3 million. On a comparable basis, reflecting the full-period impact of the sale-leaseback in both periods, adjusted operating income decreased $1.2 million from $59.5 million. Adjusted EBITDA (a non-GAAP measure of operations explained in the accompanying tables) was $84.7 million, compared to $91.2 million in the prior-year period. On the same comparable basis, Adjusted EBITDA increased $1.0 million from $83.7 million in the prior year period, primarily reflecting improved profitability in Children’s Book Publishing and Distribution and Entertainment, partly offset by lower results in Education and International.
Quarterly Results
Children’s Book Publishing and Distribution
In the fiscal fourth quarter, the Children’s Book Publishing and Distribution segment’s revenues decreased 4% to $276.3 million.
In School Reading Events, Book Fairs revenues were $186.6 million, up 5% from the prior year period, reflecting higher fair count. Book Clubs revenues were $12.2 million, a decline of 7% from the prior year period, primarily reflecting lower participation throughout the year.
Consolidated Trade revenues decreased 20% from the prior year period to $77.5 million, reflecting a challenging comparison with the prior-year publishing schedule, which included the release of Sunrise on the Reaping, the fifth book in Suzanne Collins’ global bestselling The Hunger Games® series.
Segment operating income was $60.3 million, compared to $57.6 million a year ago, which included one-time charges of $0.6 million. Excluding one-time charges, adjusted operating income increased $2.1 million, primarily driven by higher revenues and improved profitability in Book Fairs, partly offset by lower Trade results.
Education
Education revenues decreased 13% to $109.2 million, primarily reflecting continued pressure on school and district spending for supplemental curriculum materials. Segment operating income was $27.0 million, which included one-time charges of $0.9 million, compared to $30.7 million in the prior year period, which included one-time charges of $0.6 million. Excluding one-time charges, adjusted operating income decreased by $3.4 million, as a result of lower revenues, partly offset by benefits from the segment’s improved cost structure. While fourth-quarter revenues remained below the prior year, the rate of decline improved in the second half of fiscal 2026 compared to the first half of the year, as the segment advanced its product, marketing and sales strategies following its repositioning.
Entertainment
Segment revenues increased 42% to $21.0 million, reflecting higher production services revenues. Segment operating income was $0.4 million, which included one-time charges of $0.4 million, compared to an operating loss of $3.0 million in the prior year period, which included one-time charges of $0.9 million. Excluding one-time charges, adjusted segment operating income improved $2.9 million to $0.8 million, primarily reflecting higher revenues.
International
International revenues decreased 13% to $69.6 million, excluding favorable foreign currency exchange of $3.1 million, primarily reflecting lower Trade revenues against a more challenging comparison with the prior-year publishing schedule. Segment operating income was $2.9 million, which included one-time charges of $0.2 million, compared to $3.7 million in the prior year period, which included one-time charges of $2.4 million. Excluding one-time charges, adjusted operating income decreased by $3.0 million to $3.1 million primarily reflecting lower revenues, partly offset by cost management.
Overhead
Overhead costs were $39.2 million, which included one-time charges of $5.4 million, compared to $35.5 million in the prior year period, which included one-time charges of $5.4 million. Excluding one-time charges, adjusted overhead costs increased $3.7 million to $33.8 million. On a comparable basis, reflecting the pro forma impact of the sale-leaseback transactions in both periods, adjusted overhead costs were approximately in line with the prior-year period.
Fiscal 2026 Full Year Review
In $ millions (except per share data)
Full Year
Change
Fiscal 2026
Fiscal 2025
$
%
Revenues
$
1,581.9
$
1,625.5
$
(43.6)
(3) %
Operating income (loss)
$
15.2
$
15.8
$
(0.6)
(4) %
Earnings (loss) before taxes
$
85.2
$
(1.3)
$
86.5
NM
Diluted earnings (loss) per share
$
2.34
$
(0.07)
$
2.41
NM
Operating income (loss), ex. one-time items* (1)
$
47.1
$
35.8
$
11.3
32 %
Diluted earnings (loss) per share, ex. one-time items*
$
1.87
$
0.48
$
1.39
NM
Adjusted EBITDA* (1)
$
151.5
$
145.4
$
6.1
4 %
Pro forma Adjusted operating income* (2)
$
35.3
$
19.9
$
15.4
77 %
Pro forma Adjusted EBITDA* (2)
$
132.4
$
115.3
$
17.1
15 %
* Please refer to the non-GAAP financial tables attached
(1)
Fiscal 2026 full-year Operating income excluding one-time items and Adjusted EBITDA include net costs
of $7.2 and $14.5, respectively, related to the sale-leaseback transactions completed in December 2025.
(2)
Pro forma Adjusted operating income and Pro forma Adjusted EBITDA reflect the full-period impact of
the sale-leaseback transactions in each period presented. The Company refers to these measures in
this release as results “on a comparable basis.” See Table 7 for the reconciliation to Adjusted operating
income and Adjusted EBITDA.
Revenues decreased 3% to $1,581.9 million, primarily reflecting lower revenues in Education and lower Consolidated Trade revenues against a more challenging comparison with the prior-year publishing schedule, partly offset by strong performance in Book Fairs and higher Entertainment revenues.
Operating Income decreased 4% to $15.2 million, compared to $15.8 million a year ago, including $31.9 million and $20.0 million in one-time charges in each period, respectively. Excluding one-time charges in both periods, adjusted operating income increased $11.3 million to $47.1 million. On a comparable basis, reflecting the full-year impact of the sale-leaseback transactions in both periods, adjusted operating income increased $15.4 million to $35.3 million, compared to $19.9 million in the prior year. Adjusted EBITDA increased $6.1 million, or 4%, to $151.5 million, in-line with the Company’s guidance. On the same comparable basis, Adjusted EBITDA increased 15%, or $17.1 million, to $132.4 million from $115.3 million. The improvement on a comparable basis primarily reflected strong performance in Children’s Book Publishing and Distribution and International, as well as lower adjusted overhead costs, which more than offset the impact of lower sales in Education.
Capital Position and Liquidity
In $ millions
Full Year
Change
Fiscal 2026
Fiscal 2025
$
%
Net cash provided by operating activities
$
50.9
$
124.2
$
(73.3)
(59) %
Net proceeds from sale and lease transactions (1)
452.4
—
452.4
NM
Additions to property, plant and equipment and
prepublication expenditures
(66.3)
(76.7)
10.4
14 %
Net borrowings (repayments) of film related obligations
(1.0)
(18.3)
17.3
95 %
Free cash flow (use)*
$
436.0
$
29.2
$
406.8
NM
Net cash (debt)*
$
48.9
$
(136.6)
$
185.5
136 %
NM – Not Meaningful
* Please refer to the non-GAAP financial tables attached
(1) Excludes tax impact from sale-leaseback transactions.
Net cash provided by operating activities was $50.9 million, compared to $124.2 million in the prior year period, primarily reflecting higher tax payments associated with the sale-leaseback transactions, as well as higher severance-related payments as part of cost savings initiatives. Free cash flow was $436.0 million in fiscal 2026, compared to $29.2 million in the prior year period, primarily reflecting over $400 million in net proceeds from the Company’s sale-leaseback transactions.
The Company ended fiscal 2026 with net cash of $48.9 million compared to a net debt position of $136.6 million at the end of fiscal 2025, primarily reflecting the net proceeds from the sale-leaseback transactions, partly offset by significant capital returns to shareholders.
In fiscal 2026, the Company returned approximately $288.6 million to shareholders through share repurchases and dividends. This included the repurchase of 7,336,966 shares of common stock for $268.6 million, including shares purchased through the Company’s modified Dutch auction tender offer and open-market repurchases, and $20.0 million of dividends, including $4.6 million in the fourth quarter.
At May 31, 2026, $183.0 million remained authorized for future repurchases under the Company’s stock repurchase program. The Company expects to continue purchasing shares, from time to time as conditions allow, on the open market or in negotiated private transactions.
Additional Information
To supplement our financial statements presented in accordance with GAAP, we include certain non-GAAP calculations and presentations including, as noted above, “Adjusted EBITDA, “Adjusted Operating Income”, and “Free Cash Flow”. Please refer to the non-GAAP financial tables attached to this press release for supporting details on the impact of one-time items on operating income, net income and diluted EPS, and the use of non-GAAP financial measures included in this release. This information should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with GAAP.
Conference Call
The Company will hold a conference call to discuss its results at 4:30 p.m. ET today, July 23, 2026. Peter Warwick, Scholastic President and Chief Executive Officer, and Haji Glover, the Company’s Chief Financial Officer, Executive Vice President, will moderate the call.
A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/n2mcunuo. To access the conference call by phone, please go to https://register-conf.media-server.com/register/BIe4453c04814b4def819b83eaf92a8731, which will provide dial-in details. To avoid delays, participants are encouraged to dial into the conference call five minutes ahead of the scheduled start time. Shortly following the call, an archived webcast and accompanying slides from the conference call will be posted at investor.scholastic.com.
About Scholastic
For more than 100 years, Scholastic Corporation (NASDAQ: SCHL) has been meeting children where they are – at school, at home and in their communities – by creating quality content and experiences, all beginning with literacy. Scholastic delivers stories, characters, and learning moments that empower all kids to become lifelong readers and learners through bestselling children’s books, literacy- and knowledge-building resources for schools including classroom magazines, and award-winning, entertaining children’s media. As the world’s largest publisher and distributor of children’s books through school-based book clubs and book fairs, classroom libraries, school and public libraries, retail, and online, and with a global reach into more than 135 countries, Scholastic encourages the personal and intellectual growth of all children, while nurturing a lifelong relationship with reading, themselves, and the world around them. Learn more at www.scholastic.com.
Forward-Looking Statements
This news release contains certain forward-looking statements relating to future periods. Such forward-looking statements are subject to various risks and uncertainties, including the conditions of the children’s book and educational materials markets generally and acceptance of the Company’s products within those markets, and other risks and factors identified from time to time in the Company’s filings with the Securities and Exchange Commission. Actual results could differ materially from those currently anticipated.
SCHL: Financial
Table 1
Scholastic Corporation
Consolidated Statements of Operations
(Unaudited)
(In $ Millions, except shares and per share data)
Three months ended
Twelve months ended
05/31/26
05/31/25
05/31/26
05/31/25
Revenues
$
476.1
$
508.3
$
1,581.9
$
1,625.5
Operating costs and expenses:
Cost of goods sold
190.4
207.3
689.8
718.8
Selling, general and administrative expenses
219.7
227.8
807.2
822.3
Depreciation and amortization
13.1
17.2
58.8
65.7
Asset impairments and write downs
1.5
2.5
10.9
2.9
Total operating costs and expenses
424.7
454.8
1,566.7
1,609.7
Operating income (loss)
51.4
53.5
15.2
15.8
Interest income (expense), net
(0.9)
(4.3)
(11.2)
(16.0)
Other components of net periodic benefit (cost)
(0.3)
(0.3)
(1.3)
(1.1)
Loss on sale of investments
(17.2)
—
(17.2)
—
Gain (loss) on sale and leaseback transactions
(18.5)
—
99.7
—
Earnings (loss) before income taxes
14.5
48.9
85.2
(1.3)
Provision (benefit) for income taxes
5.1
33.5
28.5
0.6
Net income (loss)
$
9.4
$
15.4
$
56.7
$
(1.9)
Basic and diluted earnings (loss) per share of Class A and
Common Stock (1)
Basic
$
0.46
$
0.59
$
2.39
$
(0.07)
Diluted
$
0.45
$
0.59
$
2.34
$
(0.07)
Basic weighted average shares outstanding
20,343
26,113
23,698
27,631
Diluted weighted average shares outstanding
20,992
26,209
24,222
27,907
(1)
Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding.
Recalculating earnings per share based on numbers rounded to millions may not yield the results as
presented.
Table 2
Scholastic Corporation
Segment Results, Excluding One-Time Items
(Unaudited)
(In $ Millions)
Three months ended
Change
Twelve months ended
Change
05/31/26
05/31/25
$
%
05/31/26
05/31/25
$
%
Children’s Book Publishing
and Distribution
Revenues
Book Clubs
$
12.2
$
13.1
$
(0.9)
(7) %
$
57.1
$
64.2
$
(7.1)
(11) %
Book Fairs
186.6
177.8
8.8
5 %
576.0
548.3
27.7
5 %
School Reading Events
198.8
190.9
7.9
4 %
633.1
612.5
20.6
3 %
Consolidated Trade
77.5
97.3
(19.8)
(20) %
331.1
351.4
(20.3)
(6) %
Total Revenues
276.3
288.2
(11.9)
(4) %
964.2
963.9
0.3
0 %
Operating income (loss) ex.
one-time items *
60.3
58.2
2.1
4 %
143.7
131.3
12.4
9 %
Adjusted operating margin *
21.8 %
20.2 %
14.9 %
13.6 %
Education
Revenues
109.2
125.7
(16.5)
(13) %
267.6
309.8
(42.2)
(14) %
Operating income (loss) ex.
one-time items *
27.9
31.3
(3.4)
(11) %
0.2
6.9
(6.7)
(97) %
Adjusted operating margin *
25.5 %
24.9 %
0.1 %
2.2 %
Entertainment
Revenues
21.0
14.8
6.2
42 %
65.7
61.0
4.7
8 %
Operating income (loss) ex.
one-time items *
0.8
(2.1)
2.9
138 %
(9.3)
(7.2)
(2.1)
(29) %
Adjusted operating margin *
3.8 %
NM
NM
NM
International
Revenues
69.6
76.8
(7.2)
(9) %
277.2
279.6
(2.4)
(1) %
Operating income (loss) ex.
one-time items *
3.1
6.1
(3.0)
(49) %
7.1
2.9
4.2
145 %
Adjusted operating margin *
4.5 %
7.9 %
2.6 %
1.0 %
Overhead
Revenues
—
2.8
(2.8)
(100) %
7.2
11.2
(4.0)
(36) %
Operating income (loss) ex.
one-time items *
(33.8)
(30.1)
(3.7)
(12) %
(94.6)
(98.1)
3.5
4 %
Operating income (loss) ex.
one-time items *
$
58.3
63.4
(5.1)
(8) %
$
47.1
35.8
11.3
32 %
Adjusted operating margin *
12.2 %
12.5 %
3.0 %
2.2 %
NM – Not meaningful
* Please refer to Table 4 for one-time items and a reconciliation of the non-GAAP financials.
Table 3
Scholastic Corporation
Supplemental Information
(Unaudited)
(In $ Millions)
Selected Balance Sheet Items
05/31/26
05/31/25
Cash and cash equivalents
$
134.9
$
124.0
Accounts receivable, net
236.4
273.4
Inventories, net
265.0
250.2
Accounts payable
144.2
157.3
Deferred revenue
179.2
178.8
Accrued royalties
50.3
69.1
Film related obligations
17.1
18.3
Lines of credit and long-term debt
80.5
256.2
Net cash (debt) (1)
48.9
(136.6)
Total stockholders’ equity
750.8
946.5
Selected Cash Flow Items
Three months ended
Twelve months ended
05/31/26
05/31/25
05/31/26
05/31/25
Net cash provided by (used in) operating activities
$
90.0
$
106.9
$
50.9
$
124.2
Net proceeds from sale and lease transactions (3)
—
—
452.4
—
Property, plant and equipment additions
(15.0)
(12.3)
(48.4)
(52.2)
Prepublication expenditures
(4.9)
(8.7)
(17.9)
(24.5)
Net borrowings (repayments) of film related obligations
(0.1)
0.3
(1.0)
(18.3)
Free cash flow (use) (2)
$
70.0
$
86.2
$
436.0
$
29.2
(1)
Net cash (debt) is defined by the Company as cash and cash equivalents less production cash of $5.5
and $4.4 as of May 31, 2026 and May 31, 2025, respectively, net of lines of credit and short-term and
long-term-debt. Film related obligations are not included. The Company utilizes this non-GAAP financial
measure, and believes it is useful to investors, as an indicator of the Company’s effective leverage and
financing needs.
(2)
Free cash flow (use) is defined by the Company as net cash provided by or used in operating activities
(which includes royalty advances) and cash acquired through acquisitions and from the sale of assets,
reduced by spending on property, plant and equipment and prepublication costs and adjusted for net
cash flows from film related obligations. The Company believes that this non-GAAP financial measure
is useful to investors as an indicator of cash flow available for debt repayment and other investing
activities, such as acquisitions. The Company utilizes free cash flow as a further indicator of operating
performance and for planning investing activities.
(3)
Excludes tax impact from sale-leaseback transactions.
Table 4
Scholastic Corporation
Supplemental Results – Excluding One-Time Items
(Unaudited)
(In $ Millions, except per share data)
Three months ended
05/31/2026
05/31/2025
Reported
One-time
items
Excluding
One-time
items
Reported
One-time
items
Excluding
One-time
items
Diluted earnings (loss) per share (1)
$
0.45
$
1.79
$
2.19
$
0.59
$
0.29
$
0.87
Net income (loss) (2)
$
9.4
$
36.5
$
45.9
$
15.4
$
7.5
$
22.9
Earnings (loss) before income taxes (3)
$
14.5
$
42.6
$
57.1
$
48.9
$
9.9
$
58.8
Children’s Book Publishing and
Distribution (4)
$
60.3
$
—
$
60.3
$
57.6
$
0.6
$
58.2
Education (5)
27.0
0.9
27.9
30.7
0.6
31.3
Entertainment(6)
0.4
0.4
0.8
(3.0)
0.9
(2.1)
International (7)
2.9
0.2
3.1
3.7
2.4
6.1
Overhead (8)
(39.2)
5.4
(33.8)
(35.5)
5.4
(30.1)
Operating income (loss)
$
51.4
$
6.9
$
58.3
$
53.5
$
9.9
$
63.4
Twelve months ended
05/31/2026
05/31/2025
Reported
One-time
items
Excluding
One-time
items
Reported
One-time
items
Excluding
One-time
items
Diluted earnings (loss) per share (1)
$
2.34
$
(0.47)
$
1.87
$
(0.07)
$
0.55
$
0.48
Net income (loss) (2)
$
56.7
$
(11.3)
$
45.4
$
(1.9)
$
15.2
$
13.3
Earnings (loss) before income taxes (3)
$
85.2
$
(50.6)
$
34.6
$
(1.3)
$
20.0
$
18.7
Children’s Book Publishing and
Distribution (4)
$
142.9
$
0.8
$
143.7
$
130.7
$
0.6
$
131.3
Education (5)
(4.1)
4.3
0.2
6.3
0.6
6.9
Entertainment(6)
(16.1)
6.8
(9.3)
(12.1)
4.9
(7.2)
International (7)
6.4
0.7
7.1
(1.0)
3.9
2.9
Overhead (8)
(113.9)
19.3
(94.6)
(108.1)
10.0
(98.1)
Operating income (loss)
$
15.2
$
31.9
$
47.1
$
15.8
$
20.0
$
35.8
(1)
Earnings (loss) per share are calculated on non-rounded net income (loss) and shares outstanding. Recalculating
earnings per share based on rounded numbers may not yield the results as presented.
(2)
In the three and twelve months ended May 31, 2026, the Company recognized a benefit of $6.1 and a provision of
$39.3, respectively, for income taxes in respect to one-time pretax items. In the three and twelve months ended May
31, 2025, the Company recognized a benefit of $2.4 and $4.8, respectively, for income taxes in respect to one-time
pretax items.
(3)
In the three and twelve months ended May 31, 2026, the Company recognized a pretax loss of $17.2 related to the
sale of its 26.2% equity interest in a U.K.-based children’s book publishing business. In the three months ended May
31, 2026, the Company recognized an adjustment of $18.5 million to the pretax gain related to the sale-leaseback
transactions. In the twelve months ended May 31, 2026, the Company recognized a pretax gain of $99.7 related to
sale-leaseback transactions involving its facilities in New York City and Jefferson City, Missouri.
(4)
In the twelve months ended May 31, 2026, the Company recognized a pretax asset impairment charge of $0.8 related
to a certain product. In the three and twelve months ended May 31, 2025, the Company recognized a pretax asset
impairment charge of $0.6 related to a digital product.
(5)
In the three and twelve months ended May 31, 2026, the Company recognized pretax asset impairment charges of
$0.9 and $4.3, respectively, related to certain education and digital products. In the three and twelve months ended May
31, 2025, the Company recognized a pretax asset impairment charge of $0.6 related to certain digital products.
(6)
In the three and twelve months ended May 31, 2026, the Company recognized other pretax expenses of $0.4 and $1.4,
respectively. In the twelve months ended May 31, 2026, the Company recognized pretax severance of $0.2 and a pretax
asset impairment charge of $5.2 primarily related to certain film and television programs in development. In the three
and twelve months ended May 31, 2025, the Company recognized pretax severance of $0.3 and $1.4, respectively,
related to cost-savings initiatives, pretax costs of $0.4 and $3.0, respectively, related to the acquisition of 9 Story Media
Group and pretax asset impairment charges of $0.2 and $0.5, respectively, related to the early exit of certain leased
office space in Canada and Ireland.
(7)
In the three and twelve months ended May 31, 2026, the Company recognized pretax severance of $0.2 and $0.7,
respectively, related to cost-savings initiatives. In the three and twelve months ended May 31, 2025, the Company
recognized pretax severance of $1.3 and $2.8, respectively, related to cost-savings initiatives and a pretax asset
impairment charge of $1.1 related to the reorganization in China.
(8)
In the three and twelve months ended May 31, 2026, the Company recognized pretax severance of $3.7 and $15.5,
respectively, related to cost-savings initiatives, and other pretax expenses of $1.7 and $3.8, respectively. In the three
and twelve months ended May 31, 2025, the Company recognized pretax severance of $3.4 and $7.6, respectively,
related to cost-savings initiatives, other pretax expenses of $1.9 and $2.3, respectively, and an asset impairment
charge of $0.1 related to the early exit of an office lease.
Table 5
Scholastic Corporation
Consolidated Statements of Operations – Supplemental
Adjusted EBITDA
(Unaudited)
(In $ Millions)
Three months ended
05/31/26
05/31/25
Earnings (loss) before income taxes as reported
$
14.5
$
48.9
One-time items before income taxes
42.6
9.9
Earnings (loss) before income taxes excluding one-time items
57.1
58.8
Interest (income) expense (1)
0.9
4.5
Depreciation and amortization
26.7
27.9
Adjusted EBITDA (2)
$
84.7
$
91.2
Twelve months ended
05/31/26
05/31/25
Earnings (loss) before income taxes as reported
$
85.2
$
(1.3)
One-time items before income taxes
(50.6)
20.0
Earnings (loss) before income taxes excluding one-time items
34.6
18.7
Interest (income) expense (1)
11.6
16.4
Depreciation and amortization
105.3
110.3
Adjusted EBITDA (2)
$
151.5
$
145.4
(1)
Amounts include production loan interest amortized into cost of goods sold.
(2)
Adjusted EBITDA is defined by the Company as earnings (loss), excluding one-time items,
before interest, taxes, depreciation and amortization. The Company believes that Adjusted
EBITDA is a meaningful measure of operating profitability and useful for measuring returns
on capital investments over time as it is not distorted by unusual gains, losses, or other
items.
Table 6
Scholastic Corporation
Consolidated Statements of Operations – Supplemental
Adjusted EBITDA by Segment
(Unaudited)
(In $ Millions)
Three months ended
05/31/26
CBPD (1)
EDUC (1)
ENT (1)
INTL (1)
OVH (1)(4)
Total
Earnings (loss) before income taxes as reported
$
60.1
$
27.0
$
(0.0)
$
(14.8)
$
(57.8)
$
14.5
One-time items before income taxes
—
0.9
0.4
17.4
23.9
42.6
Earnings (loss) before income taxes excluding
one-time items
60.1
27.9
0.4
2.6
(33.9)
57.1
Interest (income) expense (2)
0.2
0.0
0.5
0.0
0.2
0.9
Depreciation and amortization (3)
8.3
6.0
8.0
2.2
2.2
26.7
Adjusted EBITDA (4)
$
68.6
$
33.9
$
8.9
$
4.8
$
(31.5)
$
84.7
Three months ended
05/31/25
CBPD (1)
EDUC (1)
ENT (1)
INTL (1)
OVH (1)
Total
Earnings (loss) before income taxes as reported
$
57.5
$
30.7
$
(2.9)
$
2.9
$
(39.3)
$
48.9
One-time items before income taxes
0.6
0.6
0.9
2.4
5.4
9.9
Earnings (loss) before income taxes excluding
one-time items
58.1
31.3
(2.0)
5.3
(33.9)
58.8
Interest (income) expense (2)
0.1
0.0
0.7
0.1
3.6
4.5
Depreciation and amortization (3)
8.0
6.2
5.0
2.0
6.7
27.9
Adjusted EBITDA
$
66.2
$
37.5
$
3.7
$
7.4
$
(23.6)
$
91.2
Twelve months ended
05/31/26
CBPD (1)
EDUC (1)
ENT (1)
INTL (1)
OVH (1)(4)
Total
Earnings (loss) before income taxes as reported
$
142.5
$
(4.1)
$
(17.9)
$
(12.9)
$
(22.4)
$
85.2
One-time items before income taxes
0.8
4.3
6.8
17.9
(80.4)
(50.6)
Earnings (loss) before income taxes excluding
one-time items
143.3
0.2
(11.1)
5.0
(102.8)
34.6
Interest (income) expense (2)
0.4
0.0
2.2
0.1
8.9
11.6
Depreciation and amortization (3)
31.2
24.9
24.4
8.1
16.7
105.3
Adjusted EBITDA (4)
$
174.9
$
25.1
$
15.5
$
13.2
$
(77.2)
$
151.5
Twelve months ended
05/31/25
CBPD (1)
EDUC (1)
ENT (1)
INTL (1)
OVH (1)
Total
Earnings (loss) before income taxes as reported
$
130.5
$
6.3
$
(14.3)
$
(3.1)
$
(120.7)
$
(1.3)
One-time items before income taxes
0.6
0.6
4.9
3.9
10.0
20.0
Earnings (loss) before income taxes excluding
one-time items
131.1
6.9
(9.4)
0.8
(110.7)
18.7
Interest (income) expense (2)
0.2
0.0
3.2
0.1
12.9
16.4
Depreciation and amortization (3)
31.1
24.8
21.5
7.9
25.0
110.3
Adjusted EBITDA
$
162.4
$
31.7
$
15.3
$
8.8
$
(72.8)
$
145.4
(1)
The Company’s segments are defined as the following: CBPD – Children’s Book Publishing and Distribution
segment; EDUC – Education segment; ENT – Entertainment segment; INTL – International segment; OVH –
unallocated overhead.
(2)
Amounts include production loan interest amortized into cost of goods sold.
(3)
Depreciation and amortization in the Children’s Book Publishing and Distribution, Education and International
segments includes amounts allocated from overhead.
(4)
Adjusted EBITDA for unallocated overhead and total includes the net cost impact of the sale-leaseback
transactions of $7.8 and $14.5 for the three and twelve months ended May 31, 2026, respectively.
Table 7
Scholastic Corporation
Pro Forma Supplemental Information
(Unaudited)
(In $ Millions)
Three months ended
Change
05/31/26
05/31/25
$
%
Adjusted unallocated overhead
$
(33.8)
$
(30.1)
$
(3.7)
(12) %
Incremental full-year impact of sale-leaseback transactions
—
(3.9)
3.9
Pro forma Adjusted unallocated overhead (1)
$
(33.8)
$
(34.0)
$
0.2
1 %
Adjusted operating income
$
58.3
$
63.4
$
(5.1)
(8) %
Incremental full-year impact of sale-leaseback transactions
—
(3.9)
3.9
Pro forma Adjusted operating income (1) (2)
$
58.3
$
59.5
$
(1.2)
(2) %
Adjusted EBITDA
$
84.7
$
91.2
$
(6.5)
(7) %
Incremental full-year impact of sale-leaseback transactions
—
(7.5)
7.5
Pro forma Adjusted EBITDA (1) (2)
$
84.7
$
83.7
$
1.0
1 %
Twelve months ended
Change
05/31/26
05/31/25
$
%
Adjusted unallocated overhead
$
(94.6)
$
(98.1)
$
3.5
4 %
Incremental full-year impact of sale-leaseback transactions
(11.8)
(15.9)
4.1
Pro forma Adjusted unallocated overhead (1)
$
(106.4)
$
(114.0)
$
7.6
7 %
Adjusted operating income
$
47.1
$
35.8
$
11.3
32 %
Incremental full-year impact of sale-leaseback transactions
(11.8)
(15.9)
4.1
Pro forma Adjusted operating income (1) (2)
$
35.3
$
19.9
$
15.4
77 %
Adjusted EBITDA
$
151.5
$
145.4
$
6.1
4 %
Incremental full-year impact of sale-leaseback transactions
(19.1)
(30.1)
11.0
Pro forma Adjusted EBITDA (1) (2)
$
132.4
$
115.3
$
17.1
15 %
(1)
Pro forma Adjusted unallocated overhead, Pro forma Adjusted operating income and Pro forma Adjusted
EBITDA reflect the net impacts of the sale-leaseback transactions as if the transactions had occurred on
June 1, 2024, the beginning of fiscal 2025. Fiscal 2026 reported results include the actual impact beginning
upon completion of the transactions in December 2025. The incremental adjustments shown above reflect
the additional impact for the portion of fiscal 2026 prior to completion of the transactions. Fiscal 2025
reported results include no impact from the transactions.
(2)
For fiscal 2026, the full-year pro forma cost impact was $19.0 on Adjusted operating income, consisting of
$7.2 recognized in reported fiscal 2026 results and $11.8 of incremental adjustments. For fiscal 2026, the
full-year pro forma cost impact on Adjusted EBITDA was $33.6, consisting of $14.5 recognized in reported
fiscal 2026 results and $19.1 of incremental adjustments. For fiscal 2025, the full-year pro forma cost
impacts were $15.9 on Adjusted operating income and $30.1 on Adjusted EBITDA.
View original content to download multimedia:https://www.prnewswire.com/news-releases/scholastic-reports-fourth-quarter-and-fiscal-2026-results-302833617.html
SOURCE Scholastic Corporation
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Scholastic Reports Fourth Quarter and Fiscal 2026 Results
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