Executive Summary

Q4 2024 revenue rose 7% year over year to $1.25B and 3% sequentially, with operating income up 78% to $72.5M; GAAP EPS jumped to $125.55 on a one-time, noncash pension annuity settlement gain, while adjusted diluted EPS more than doubled YoY to $22.58 .
Segment performance was led by television broadcasting (political advertising/digital strength) and healthcare (CSI Pharmacy and home health growth); education was impacted by a $22.9M intangible impairment; automotive and manufacturing faced end‑market headwinds (notably Hoover’s exposure to multifamily) .
Balance sheet/liquidity remained solid: $748.2M debt (avg rate 6.0%), and $1,156.6M cash, marketable equity securities and other investments at 12/31/24; GHC repurchased 19,672 shares for $15.9M in Q4 (4.332M shares outstanding at year-end) .
Subsequent event: GHC agreed on Feb 25, 2025 to settle a significant portion of Graham Healthcare Group’s mandatorily redeemable noncontrolling interest for $205M (cash/stock), a potential de‑risking catalyst for 2025–2026; Street consensus was unavailable (S&P Global access limit), so beat/miss vs. estimates cannot be assessed .

What Went Well and What Went Wrong

What Went Well
- Television Broadcasting: Revenue +30% YoY to $161.7M; operating income +95% to $78.5M driven by a $49.7M political ad surge and digital growth, with cost reductions; investor day reiterated “political revenues in Q4 further exceeded our expectations” .
- Healthcare: Revenue +41% YoY as CSI expanded infusion offerings/geography; home health and Surpass Behavioral improved; healthcare AOCF nearly doubled to $24.6M in Q4 .
- Cash generation: Adjusted Operating Cash Flow (AOCF) rose 68% YoY to $139.6M, reflecting strength in television broadcasting, healthcare, and improved “other businesses” losses .
What Went Wrong
- Education: Q4 division operating income fell to ~$0.1M vs. $21.5M prior year due to a $22.9M intangible impairment at Kaplan International; excluding impairment, operating income increased .
- Automotive: Revenue -5% YoY with lower new/used vehicle sales and softer F&I; margin headwinds on new vehicles pressured results despite stronger parts/service and used vehicle gross profit .
- Manufacturing: Revenue -9% YoY, mainly Hoover weakness tied to multifamily housing demand; wood gains lower vs. Q4 2023; while operating results improved overall on better Dekko/Joyce/Forney, the end‑market remains soft .

Financial Results

Consolidated results (oldest → newest):

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$1,166.8	$1,185.3	$1,207.2	$1,245.8
Operating Income ($USD Millions)	$40.8	$25.9	$81.6	$72.5
Net Income Attributable to GHC ($USD Millions)	$53.3	$(21.0)	$72.5	$548.8
Diluted EPS (GAAP)	$11.72	$(4.79)	$16.42	$125.55
Adjusted Diluted EPS (non‑GAAP)	$10.94	$12.70	$17.25	$22.58
Adjusted Operating Cash Flow (AOCF) ($USD Millions)	$83.0	$98.5	$126.1	$139.6

Segment breakdown (Q4 2023 vs Q4 2024):

Segment	Revenue Q4 2023 ($M)	Revenue Q4 2024 ($M)	Operating Income Q4 2023 ($M)	Operating Income Q4 2024 ($M)
Education	$395.5	$408.2	$21.5	$0.1
Television Broadcasting	$124.6	$161.7	$40.2	$78.5
Manufacturing	$104.0	$94.7	$4.9	$6.5
Healthcare	$128.0	$180.0	$6.6	$17.8
Automotive	$314.6	$298.4	$10.7	$9.1
Other Businesses	$100.5	$102.8	$(27.3)	$(24.0)

Key performance/structural items:

KPI	Q4 2023	Q4 2024
Non‑operating pension & postretirement income ($M)	$36.5	$689.6 (includes $653.4M settlement gain)
Gain on marketable equity securities ($M)	$24.6	$27.0
Interest expense ($M)	$25.4	$49.5 (incl. $34.2M MRNCI fair value expense)
Pension surplus (year‑end, $M)	$2,113.6	$2,510.5
Debt outstanding (year‑end, $M)	$811.8	$748.2
Cash, marketable equity securities & other investments (year‑end, $M)	$898.9	$1,156.6
Q4 Class B shares repurchased	N/A	19,672 shares for $15.9M; 4,332,307 shares outstanding at 12/31/24

Notes: Q4 adjusted results exclude the $653.4M noncash pension settlement gain, the $22.9M Kaplan intangible impairment, MRNCI fair value interest, and other non‑core items per reconciliations -.

Guidance Changes

GHC did not provide formal quantitative guidance (revenue, margins, EPS, etc.) in the Q4 release; there were no explicit guidance ranges to update. Subsequent event: agreement to settle a significant portion of the Graham Healthcare Group MRNCI for $205M (cash/stock) on Feb 25, 2025 (not forward guidance, but reduces future MRNCI-related uncertainty) .

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated revenue/EPS/margins	FY 2025	None provided	None provided	N/A (no formal guidance issued)
MRNCI settlement (Graham Healthcare Group)	Post-Q4 event	N/A	$205M partial settlement agreed 2/25/2025	De‑risking action (not guidance)

Earnings Call Themes & Trends

(Investor Day Dec 10, 2024 used as primary management commentary source; no Q4 earnings call transcript available.)

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Political advertising/TV	Q2: TV softer YoY; Q3: TV revenue +25% YoY; political season building	Q4 TV revenue +30% YoY; OI +95%; political ad revenue +$49.7M; “Q4 political revenues exceeded expectations”	Strengthened into Q4 cycle
Healthcare (CSI, home health)	Q2: healthcare revenue +30%; Q3: +34% YoY	Q4 healthcare revenue +41% YoY; AOCF to $24.6M; CSI expansion called out	Accelerating growth
Education (Kaplan)	Q2/Q3: solid KI growth; some impairments in “other”	Q4: $22.9M intangible impairment at KI; KI growth offset by Australia visa policy impacts; AI/LLM investment emphasized	Mixed: structural investment, impairment
Manufacturing	Q2/Q3: downcycle (Dekko/Hoover pressure)	Q4: revenue -9% YoY; Hoover weak on multifamily; Dekko improving; OI improved YoY	Early “green shoots” but still soft
Regulatory (Broadcast ownership)	N/A in Q2/Q3 8‑Ks	Management pushes for FCC Top‑4 rule changes to enable local consolidation	Potential medium‑term catalyst
Pension strategy	Q3: Estimated large Q4 annuity gain	Q4: $653.4M noncash gain realized; pension surplus increased; derisking benefits discussed -	Positive derisking action
Capital allocation	Q2/Q3: Ongoing buybacks	Investor Day: long‑term per‑share cash flow focus; buybacks when at discount; $580M since 2020	Continued discipline

Management Commentary

Capital allocation and philosophy: “Our goal and north star is to grow our cash flow on a per share basis over the long term… We only buy back shares when… we can acquire shares at a material discount to our view of intrinsic value.”
Broadcasting strategy and regulatory stance: Management advocates eliminating the FCC “Top 4” local ownership cap to enable healthier, more scalable local operations; national consolidation benefits have disappointed industry‑wide, but local scale could carry real benefits .
Healthcare growth and MRNCI dynamics: “This arrangement [MRNCI]… is a real liability and you should treat it as one… If CSI continues to grow and perform well, [MRNCI] will increase… [but] the much larger majority ownership stake… would also have increased substantially in value.”
Kaplan AI initiatives: Kaplan is “leveraging AI and LLM models to improve its product offerings as well as the efficiency of our operations,” with expectations that AI‑enhanced tutoring/personalization become table stakes over time .
Pension plan: The overfunded plan is a strategic asset that funds severance/retirement programs without treasury cash; October annuity transaction expected to record a ~$650M noncash pre‑tax gain in Q4 2024 (ultimately recorded at $653.4M) - .

Q&A Highlights

MRNCI/CSI: MRNCI balance tied largely to CSI; majority of current ~$125.5M (as of Q3) scheduled for redemption March 2026; potential increases if CSI value rises; subsequent partial settlement agreement on 2/25/25 for $205M (cash/stock) reduces future uncertainty .
Broadcast trajectory: Expect continued mid‑ to high‑single‑digit linear subscriber declines with some vMVPD offset; investing in streaming/digital content and local sponsorships to diversify revenue -.
2026 notes: Company will evaluate 8‑year notes due June 1, 2026 based on market conditions; prefers a blend of fixed/variable debt .
Manufacturing cycle: Hoover’s multifamily exposure drives cyclicality; management optimistic on decade‑long returns; Dekko showing early recovery signs after commercial real estate/downstream inventory headwinds .
Framebridge: Scaling retail footprint and production yields operating leverage; profitability could be achieved sooner but would trade off long‑term market share growth; unit economics improve with scale -.
Purdue Global receivable: ~$114M at 9/30/24 across service reimbursements, estimated current‑year fees, deferred fees, and ~$20M long‑term receivable; management confident in collectibility .

Estimates Context

S&P Global consensus for Q4 2024 EPS and revenue was not available at the time of analysis due to data access limits, so we cannot assess beat/miss vs. Street. We anchor our evaluation on reported GAAP and non‑GAAP results and segment disclosures -.
Given the outsized non‑operating pension settlement gain, adjusted (non‑GAAP) EPS of $22.58 is the more indicative earnings measure for core performance in Q4 .

Key Takeaways for Investors

Core momentum under the hood: Ex‑pension items, adjusted EPS rose to $22.58 and AOCF to $139.6M, with television and healthcare driving operating improvement; Q4 revenue also ticked up sequentially vs. Q3 .
Broadcast tailwind is cyclical but material: Political advertising and digital lifted Q4 TV results; expect normalization post‑cycle but local digital monetization initiatives could partially sustain gains .
Healthcare is an engine: CSI/home health delivered robust growth and AOCF; pending MRNCI settlement agreement reduces future liability volatility and clarifies ownership economics .
Education mixed: Structural progress and AI investments at Kaplan, but Australia student visa tightening and a $22.9M impairment weighed on Q4; watch KI and Higher Ed fee trajectory (Purdue) .
Pension is strategic and cash‑flow supportive: Overfunded plan continues to fund severance/retirement benefits and enabled the annuity derisking; noncash gains distort GAAP EPS but support long‑run flexibility -.
Capital allocation remains disciplined: Net cash/investments > debt, with opportunistic repurchases; management emphasizes per‑share cash flow growth and balance sheet flexibility .
Near‑term trading lens: Expect focus on “quality of earnings” (noncash pension gain vs. adjusted EPS), sustainability of TV outperformance post‑election, healthcare growth durability, and MRNCI settlement implications; regulatory headlines on broadcast ownership could be a medium‑term catalyst .

Appendix: Source Highlights and Non‑GAAP Adjustments

Q4 one‑time pension annuity settlement gain: $653.4M pre‑tax, noncash .
Education intangible impairment: $22.9M at Kaplan International .
MRNCI fair value interest expense: $34.2M in Q4; $119.3M in FY 2024; $205M partial settlement agreed on 2/25/25 .
Non‑GAAP adjusted EPS reconciliations and AOCF definitions provided in the release - -.

All figures and statements are sourced from the Q4 2024 8‑K/exhibit press release and related materials, and the December 10, 2024 Investor Day transcript as cited above.

Graham Holdings Co (GHC)·Q4 2024 Earnings Summary