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GH

Graham Holdings Co (GHC)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue rose 6% year over year to $1.279B, with strength in Education, Manufacturing, and Healthcare offset by declines in Television Broadcasting and Automotive; GAAP diluted EPS was $27.91, while adjusted diluted EPS was $14.08 .
  • Results beat Wall Street consensus on adjusted EPS (+25% surprise) and revenue (+5% surprise); prior two quarters also beat EPS estimates meaningfully, suggesting upward estimate drift ahead for 2025 EPS*.
  • Operating income fell 18% YoY to $67.1M as Television Broadcasting and Automotive pressured profitability, while Education and Healthcare improved; adjusted operating cash flow declined 13% YoY to $110.1M .
  • Balance sheet capacity remains strong: $731.9M in borrowings at 5.9% average rate and $1.243B in cash/marketable equity/other investments; portfolio gains of $84.8M boosted GAAP EPS in Q3, masking lower core operating income .

What Went Well and What Went Wrong

What Went Well

  • Education delivered robust performance: operating income up 41% YoY to $49.1M and adjusted operating cash flow up 23% YoY to $61.9M .
  • Healthcare accelerated: revenue +34% YoY to $208.4M and operating income +47% YoY to $21.0M; adjusted operating cash flow +26% YoY to $26.4M .
  • Portfolio gains on marketable equity securities of $84.8M, plus favorable pension non-operating income, supported strong GAAP EPS and net income .
    • “Revenue increased at education, manufacturing and healthcare, partially offset by declines at television broadcasting and automotive.”

What Went Wrong

  • Television Broadcasting softness: revenue down 28% YoY to $105.1M; operating income down 57% YoY to $26.8M; adjusted operating cash flow down 52% YoY to $32.2M .
  • Automotive mixed: revenue down 1% YoY to $285.2M; operating income down 30% YoY to $6.3M; company ceased operations at Ourisman Jeep of Bethesda in early September .
  • Consolidated operating income fell 18% YoY to $67.1M and adjusted operating cash flow declined 13% YoY to $110.1M, reflecting the Broadcasting and Automotive headwinds .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$1,207.2 $1,165.9 $1,215.8 $1,278.9
Operating Income ($USD Millions)$81.6 $47.5 $72.8 $67.1
GAAP Diluted EPS ($)$16.42 $5.45 $8.35 $27.91
Adjusted Diluted EPS ($)$17.25 $11.64 $14.33 $14.08
Net Income Attributable to Common ($USD Millions)$72.5 $23.9 $36.7 $122.9
Adjusted Operating Cash Flow ($USD Millions)$126.1 $88.0 $111.3 $110.1
Capital Expenditure ($USD Millions)$23.8 $14.1 $19.8 $20.2
MarginQ3 2024Q1 2025Q2 2025Q3 2025
Operating Margin (%)6.8% (81.6/1,207.2) 4.1% (47.5/1,165.9) 6.0% (72.8/1,215.8) 5.2% (67.1/1,278.9)
Net Income Margin (%)6.0% (72.5/1,207.2) 2.0% (23.9/1,165.9) 3.0% (36.7/1,215.8) 9.6% (122.9/1,278.9)

Segment breakdown (Q3 YoY):

SegmentRevenue Q3 2024 ($MM)Revenue Q3 2025 ($MM)YoY %Operating Income Q3 2024 ($MM)Operating Income Q3 2025 ($MM)YoY %
Education$438.1 $472.7 +8% $34.9 $49.1 +41%
Television Broadcasting$145.4 $105.1 -28% $61.9 $26.8 -57%
Manufacturing$95.4 $124.3 +30% $4.5 $6.7 +49%
Healthcare$155.4 $208.4 +34% $14.3 $21.0 +47%
Automotive$289.4 $285.2 -1% $9.1 $6.3 -30%
Other Businesses$83.5 $83.2 0% $(28.9) $(25.0) +13%
Corporate Office———$(14.1) $(17.7) (25%)

KPIs:

KPIQ3 2024Q3 2025
Borrowings Outstanding ($USD Millions)—$731.9 at 5.9% avg rate; $67.2M revolver drawn
Cash, Marketable Equity Securities & Other Investments ($USD Millions)—$1,242.9
Net Gains on Marketable Equity Securities ($USD Millions)$30.5 $84.8
Shares Outstanding (Class B)—4,361,833

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated RevenueFY/Q4Not providedNot providedMaintained (no formal guidance)
Margins/OpEx/Tax/SegmentsFY/Q4Not providedNot providedMaintained (no formal guidance)
DividendOngoingRegular quarterly dividend declared Sep 11, 2025 (details in company PR)Regular quarterly dividend maintainedMaintained (PR referenced; content not retrievable due to system error)

Earnings Call Themes & Trends

Note: An earnings call transcript for Q3 2025 was not available; themes derived from Q1–Q3 earnings releases.

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Education performanceEducation operating income +31% YoY; Adjusted operating cash flow +15% YoY Education operating income +31% YoY; AOCF +15% YoY Education operating income +41% YoY; AOCF +23% YoY Improving
Healthcare growthRevenue +36% YoY; operating income +200% YoY (small base) Revenue +37% YoY; operating income +97% YoY; AOCF +46% YoY Revenue +34% YoY; operating income +47% YoY; AOCF +26% YoY Strong, sustained
Television BroadcastingRevenue -8% YoY; operating income -18% YoY Revenue -8% YoY; operating income -10% YoY Revenue -28% YoY; operating income -57% YoY Deteriorating
AutomotiveRevenue -8% YoY; operating income -33% YoY Revenue -8% YoY; operating income -9% YoY Revenue -1% YoY; operating income -30% YoY; closure of Ourisman Jeep Bethesda Mixed; portfolio reshaping
M&A/Portfolio actionsNo significant acquisitions/dispositions Sale of WGB assets; announced Arconic Architectural Products acquisition WGB shut down; closed Jeep dealership; acquired Honda dealership in Woodbridge, VA Active portfolio management
Non-GAAP adjustmentsLarge fair value NCI interest expense ($66.4M) and marketable gains ($43.8M) Fair value NCI interest expense ($67.6M) and marketable losses ($11.5M) Marketable gains ($84.8M); NCI fair value adjustment modest Volatile but favorable GAAP impact in Q3

Management Commentary

  • “Revenue increased at education, manufacturing and healthcare, partially offset by declines at television broadcasting and automotive.”
  • “The Company completed the sale of various websites and related businesses that made up World of Good Brands (WGB)… Ourisman Jeep of Bethesda dealership… closed in early September 2025… acquired a Honda automotive dealership in Woodbridge, VA.”
  • Non-GAAP rationale: marketable equity securities remeasurement and fair value adjustments of mandatorily redeemable noncontrolling interests are excluded “because these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations.”

Q&A Highlights

  • No Q3 2025 earnings call transcript was available; no Q&A themes to report based on primary documents.

Estimates Context

MetricQ1 2025Q2 2025Q3 2025
Revenue Actual ($USD Millions)$1,165.9 $1,215.8 $1,278.9
Revenue Consensus Mean ($USD Millions)$1,198.6*$1,175.3*$1,223.8*
Surprise (%)-2.7%+3.5%+4.5%
Adjusted Diluted EPS Actual ($)$11.64 $14.33 $14.08
EPS Consensus Mean ($)$10.80*$10.15*$11.23*
Surprise (%)+7.8%+41.2%+25.4%
  • Q3 2025 delivered a broad beat, with adjusted EPS up ~25% vs consensus and revenue up ~5% vs consensus; Q2 2025 showed even stronger EPS surprise (+41%), indicating potential need for upward estimate revisions if Healthcare and Education momentum persists*.
  • GAAP EPS was boosted by $84.8M net gains on marketable equity securities; adjusted EPS better reflects core performance .
    *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Underlying operating performance is mixed: Education and Healthcare are strong; Television Broadcasting and Automotive are headwinds; consolidated operating income fell 18% YoY despite revenue growth .
  • Reported GAAP EPS benefited materially from marketable equity securities gains; adjusted EPS provides a cleaner view ($14.08 vs $27.91 GAAP) .
  • Education’s multi-pronged growth (International, Higher Ed, Supplemental) is driving margin expansion and rising adjusted operating cash flow .
  • Healthcare momentum continues with double-digit revenue and operating income growth and expanding cash flow, supporting medium-term thesis strength .
  • Broadcasting weakness is a near-term drag; monitor advertising environment and upcoming events that could stabilize segment profitability .
  • Active portfolio management: WGB wind-down, dealership exit, and Honda acquisition suggest ongoing capital reallocation to higher-return opportunities .
  • Balance sheet flexibility remains ample ($1.243B in cash/securities/investments; $731.9M debt at 5.9%); buyback authorization remains with 462,482 shares capacity .