Graham Holdings Co (GHC)·Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered a broad-based operating improvement: revenue rose 3% to $1,215.8M, operating income nearly tripled to $72.8M, and adjusted diluted EPS increased to $14.33; healthcare, education, and manufacturing drove the gains, partially offset by broadcasting and automotive softness .
• Results beat Wall Street on both adjusted EPS and revenue: adjusted EPS $14.33 vs $10.15 consensus (+41%); revenue $1,215.8M vs $1,175.3M consensus (+3%); sequentially, Q2 improved vs Q1 on both operating income and adjusted EPS [GetEstimates*].
• Strategic actions continued: Hoover acquired Arconic Architectural Products (pension obligations assumed ~$105M), WGB businesses were sold with remaining operations to be shut by end of Q3, and GHG co-CEOs of the healthcare unit stepped down, with leadership transitions underway .
• Liquidity remained strong with $1,127.5M in cash/marketable securities/other investments and $816.4M in borrowings (avg. rate 6.0%); adjusted operating cash flow rose 13% YoY to $111.3M in Q2 .

What Went Well and What Went Wrong

What Went Well

• Healthcare accelerated: revenue +37% YoY to $202.2M, operating income +97% to $25.1M, and AOCF +46% to $28.9M, reflecting continued strength across businesses including CSI and home health/hospice .
• Education strength and margin expansion: operating income +31% YoY to $46.2M; Kaplan International, Higher Education, and Supplemental Education all improved operating results and AOCF .
• Manufacturing improved profitability: operating income +77% YoY to $7.6M and AOCF +34% to $13.3M, aided by better execution across businesses .
• Quote (press release narrative): “Adjusted operating cash flow improved at education, manufacturing and healthcare, partially offset by declines at television broadcasting, automotive and other businesses.” (Q2 release) .

What Went Wrong

• Television broadcasting softness: revenue -8% YoY and operating income -10% YoY in Q2 as political seasonality waned and local/retrans declines weighed; AOCF -9% YoY .
• Automotive continued headwinds: revenue -8% YoY and operating income -9% YoY; AOCF -8% YoY as unit sales and margins remained pressured .
• Other businesses remained a drag: operating loss improved but still -$27.3M; AOCF losses widened to -$20.0M YoY, with lingering portfolio challenges amid WGB wind-down .

Financial Results

Consolidated Results: sequential trend and YoY context

Q2 YoY comparisons (vs Q2 2024):

• Revenue: $1,215.8M vs $1,185.3M (+3%)
• Operating Income: $72.8M vs $25.9M (up sharply)
• GAAP Diluted EPS: $8.35 vs $(4.79) (swing to profit)
• Adjusted Diluted EPS: $14.33 vs $12.70 (+13%)

Segment Operating Revenues and Operating Income (Q2 2025 vs Q2 2024)

KPIs and Other Key Metrics

Guidance Changes

No formal quantitative guidance was provided in Q2 materials. The company declared a regular quarterly dividend in September 2025; underlying press release details were not retrievable within tools.

Earnings Call Themes & Trends

No earnings call transcript was available for Q2 2025 within the document tools.

Management Commentary

• Strategic portfolio actions: “In the first half of 2025, the Company completed the sale of various websites and related businesses that made up WGB. All remaining WGB operations are expected to be substantially shut down by the end of the third quarter of 2025.” (Q2 press release) .
• Healthcare leadership transition: “David Curtis and Justin DeWitte, co-CEOs of Graham Healthcare Group (GHG), recently made the decision to step down… Both will remain… to support the search and onboarding of a new leader…” (Q2 press release) .
• Liquidity and balance sheet: “At June 30, 2025, the Company had $816.4 million in borrowings… Cash, marketable equity securities and other investments totaled $1,127.5 million…” (Q2 press release) .
• Kaplan AI push: “The CFFP Wealth Management Professional Assistant represents a significant step forward in integrating AI responsibly into the financial services profession…” — Dirk Pantone, President, College for Financial Planning—Kaplan (Sept 2025) .

Q&A Highlights

No Q2 2025 earnings call transcript was available; therefore, Q&A highlights and any guidance clarifications cannot be extracted from primary sources in this review.

Estimates Context

Values retrieved from S&P Global.*

Implications:

• Q2 delivered a clean beat on both topline and adjusted EPS; sequential momentum also improved vs Q1. This likely prompts upward revisions to healthcare and education segment run-rate assumptions.
• Prior quarters show revenue softness vs consensus, but sustained adjusted EPS outperformance (Q4 and Q1), underscoring mix/operational efficiency and non-GAAP adjustments (notably healthcare NCI fair value and marketable securities) .

Key Takeaways for Investors

• Q2 beat/raise narrative on operations: broad-based operating improvement with standout healthcare and education; adjusted EPS outperformance vs consensus was significant and broad-based [GetEstimates*].
• Healthcare is the key growth engine: continued CSI momentum and improved home health/hospice; leadership transition bears monitoring but operating trend is positive .
• Television broadcasting normalizing post-election cycle; investors should expect softer comps ex-political tailwinds until late-cycle catalysts reemerge .
• Portfolio simplification reduces drag: WGB sales and shut-down path de-risk “other businesses” losses; further cost actions may enhance AOCF trajectory .
• Liquidity optionality intact: >$1.1B cash/marketable securities and manageable borrowings provide flexibility for M&A, buybacks, and segment investments .
• Watch automotive margin/volume headwinds; continued pressure suggests cautious near-term expectations for that segment .
• Kaplan’s AI initiatives and university partnerships add secular tailwinds to education; early signals support medium-term thesis of mix improvement and margin resilience .