Executive Summary

Q1 2025 delivered mixed results: revenue rose 1% year over year to $1.17B but missed S&P Global consensus by ~2.7%, while adjusted EPS of $11.64 beat by ~7.8% on stronger operating contributions from Education, Manufacturing and Healthcare . Estimates: Revenue $1.199B*, EPS $10.80* (1 estimate) vs. actual revenue $1.166B and adj. EPS $11.64 . Values retrieved from S&P Global.*
GAAP diluted EPS fell to $5.45 on higher interest expense from the fair value adjustment of the Graham Healthcare Group (GHG) mandatorily redeemable noncontrolling interest (MRCI), partially offset by gains on marketable securities .
Segment mix was favorable: Healthcare revenue +36% YoY; Education operating income +31% YoY; offsets from Television Broadcasting (-8% revenue, -18% operating income) and Automotive (-8% revenue, -33% operating income) .
Balance sheet/capital allocation: $864.6M borrowings at ~6.0% average rate; $1.115B cash/marketable securities/other investments; repurchased 3,978 shares for $3.5M; subsequent $1.80 quarterly dividend declared on May 6, 2025 .
Potential stock catalysts: progress on the $205M MRCI settlement announced Feb 25, 2025, Healthcare growth at CSI Pharmacy, and broadcasting seasonality normalization post-political cycle .

What Went Well and What Went Wrong

What Went Well
- Education, Manufacturing and Healthcare drove operating improvement: “The improvement in operating results is due to increases at education, manufacturing and healthcare...” (company press release) .
- Healthcare momentum: revenue +36% YoY to $173.7M; operating income rose to $18.3M driven by CSI and broader GHG improvements .
- Adjusted operating cash flow (AOCF, non-GAAP) +6% YoY to $88.0M; Education (+15%), Manufacturing (+23%), Healthcare (+78%) supported the increase .
What Went Wrong
- Off-cycle broadcasting and weaker ad demand: Television Broadcasting revenue -8% YoY to $103.6M and operating income -18% to $24.4M .
- Automotive softness: revenue -8% YoY to $281.0M and operating income -33% to $6.5M amid lower vehicle sales/margins and F&I headwinds .
- GAAP EPS compression from non-core items: interest expense spiked to $82.3M (vs. $19.3M) primarily from the MRCI fair value adjustment; gains on marketable equity securities fell to $43.8M (vs. $104.2M) .

Financial Results

Consolidated results (oldest → newest)

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$1,152.7	$1,245.8	$1,165.9
Operating Income ($USD Millions)	$35.4	$72.5	$47.5
Operating Margin (%)	3.1% (35.4/1,152.7)	5.8% (72.5/1,245.8)	4.1% (47.5/1,165.9)
Diluted EPS (GAAP)	$27.72	$125.55	$5.45
Diluted EPS (Adjusted, non-GAAP)	$11.24	$22.58	$11.64

Segment breakdown (revenue and operating income; $USD Millions)

Segment	Revenue Q1 2024	Revenue Q1 2025	YoY	Op Inc Q1 2024	Op Inc Q1 2025	YoY
Education	$422.6	$424.7	+1%	$30.6	$40.0	+31%
Television Broadcasting	$113.1	$103.6	-8%	$29.6	$24.4	-18%
Manufacturing	$101.9	$98.0	-4%	$3.1	$5.5	+79%
Healthcare	$128.2	$173.7	+36%	$6.1	$18.3	—
Automotive	$303.8	$281.0	-8%	$9.7	$6.5	-33%
Other Businesses	$83.3	$84.9	+2%	($29.0)	($31.2)	-8%

Key performance indicators and balance highlights

KPI	Q1 2025
Adjusted Operating Cash Flow (non-GAAP)	$88.0M
Capital Expenditures	$14.1M
Borrowings Outstanding (avg rate)	$864.6M (~6.0%)
Cash, Marketable Equity Securities and Other Investments	$1,114.7M
Net Gains on Marketable Equity Securities	$43.8M
Interest Expense (total)	$82.3M (incl. MRCI adjustment)
Shares Repurchased	3,978 shares for $3.5M
Shares Outstanding (period-end)	4,360,207
Effective Tax Rate (reported)	~23.5% (7.9/33.6)

Actual vs S&P Global consensus (Q1 2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD Billions)	$1.199B*	$1.166B	-2.7% (Miss)
Adjusted/Normalized EPS ($)	$10.80*	$11.64	+7.8% (Beat)

Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Revenue	FY/Quarter	Not provided	Not provided	Maintained: no formal guidance
Margins/OpEx/Tax	FY/Quarter	Not provided	Not provided	Maintained: no formal guidance
Segment Guidance	FY/Quarter	Not provided	Not provided	Maintained: no formal guidance
Dividend	Next Quarter	Regular quarterly dividend historically	Declared $1.80 per share on May 6, 2025	Maintained

Earnings Call Themes & Trends

Note: The company did not post a Q1 2025 earnings call transcript; Q1 was an earnings release and 10-Q filing event (no call listed) .

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Healthcare (CSI Pharmacy) growth	Q4: CSI expansion drove 41% revenue growth; higher operating results at GHG	Healthcare revenue +36% YoY; operating income materially higher	Up
Broadcasting cycle/political	Q4: Political advertising +$49.7M lifted revenue; strong OI	Off-cycle: revenue -8%, OI -18%	Down sequentially (seasonality)
Kaplan/Education mix	Q3: Education OI +17%; Q4: impairment but underlying improvement; Pathways/UK Professional strength; Australia impacted by visa policy	Education OI +31% YoY; AOCF +15%	Improving
Manufacturing	Q4: Mixed; Hoover weak on multifamily demand; others improved	Revenue -4% YoY; OI +79% YoY (cost/actions mix)	Stabilizing
Automotive	Q4: Lower new/used sales; margin pressure; weaker F&I	Revenue -8% YoY; OI -33%	Down
Non-GAAP/portfolio effects	Q3/Q4: large pension settlement gain in Q4; marketable securities gains variable	Lower securities gains ($43.8M vs $104.2M prior-year); high MRCI interest expense	Volatile non-core items

Management Commentary

Strategic mix and drivers: “Revenue… up 1%… Revenues increased at education, healthcare and other businesses, partially offset by declines at television broadcasting, manufacturing and automotive” (press release) .
Operating improvement sources: “The improvement in operating results is due to increases at education, manufacturing and healthcare, partially offset by declines at television broadcasting, automotive and other businesses” (press release) .
Non-GAAP rationale: Management highlights Adjusted Operating Cash Flow and Net income excluding certain items to enable period-to-period comparisons and identify underlying trends; they exclude mark-to-market equity gains/losses and MRCI fair value adjustments as non-core to operations .
Capital allocation and structure: Repurchases continued in Q1; borrowings at $864.6M (~6.0% avg rate); $1.115B in cash/marketable securities/other investments supports flexibility .
MRCI settlement: Agreement on Feb 25, 2025 to settle a significant portion of GHG’s MRCI for $205M (cash + stock), reducing future volatility from fair value adjustments .

Q&A Highlights

No earnings call was listed for Q1 2025; therefore no Q&A disclosures. The next live management interaction was the May 6, 2025 Annual Meeting (webcast) .

Estimates Context

S&P Global consensus for Q1 2025 EPS was $10.80* (1 estimate) vs. adjusted EPS (non-GAAP) of $11.64 (beat ~7.8%); revenue consensus was $1.199B* vs. $1.166B (miss ~2.7%). The EPS beat reflects higher operating contributions from Education, Manufacturing and Healthcare; the revenue shortfall reflects declines in Television Broadcasting and Automotive . Values retrieved from S&P Global.*
Low estimate count (n=1) reduces the statistical significance of the surprise and the likelihood of material estimate revisions near-term.*

Key Takeaways for Investors

Mixed top-line/solid bottom-line: modest revenue growth but an adjusted EPS beat; operating margin improved YoY to ~4.1% despite headwinds in Broadcasting and Automotive .
Healthcare remains the growth engine; watch CSI Pharmacy momentum and any update post the MRCI settlement to reduce earnings volatility from fair value adjustments .
Education’s profitability inflected positively (OI +31% YoY), supporting the multi-segment margin narrative as Broadcasting normalizes post-political cycle .
Non-core items can still swing GAAP EPS (marketable securities, pension/MRCI); prioritize adjusted metrics and AOCF ($88M in Q1) when assessing underlying trajectory .
Capital flexibility intact: $1.115B in cash/marketable securities, repurchases ongoing, and regular dividend ($1.80 per share declared May 6) provide downside support while enabling opportunistic deployment .
Near-term trading setup: potential consolidation as investors digest revenue miss and Broadcasting seasonality; upside catalysts include sustained Healthcare growth, Education margin carry-through, and clarity on MRCI settlement cash/stock flows .
Medium-term thesis: diversified portfolio with improving mix (Education/Healthcare), operational actions in Manufacturing, and disciplined capital allocation could compound adjusted earnings as cyclical drags abate .

Notes:
- Non-GAAP metrics and reconciliations are provided by the company; see press release exhibits **[104889_0000104889-25-000033_a2025q18-kexhibit991.htm:7]** **[104889_609e5c5d989043f399eb6f857ffbc3c4_7]**.
- S&P Global consensus figures marked with * are from SPGI/Capital IQ. Values retrieved from S&P Global.*

Citations:

Q1 2025 press release and 8-K:
Q4 2024 press release and 8-K:
Q3 2024 press release and 8-K:
IR Releases and Events pages (dividend, event format):

Graham Holdings Co (GHC)·Q1 2025 Earnings Summary