Graham Holdings Reports $23.9 Million Net Income in Q1 2025, Revenue Increases 1%

Graham Holdings Company reported a net income of $23.9 million, or $5.45 per share, for the first quarter of 2025, a significant decrease from $124.4 million, or $27.72 per share, in the same period of 2024. The company's total revenue for the quarter was $1.166 billion, reflecting a 1% increase from $1.153 billion year-over-year. The rise in revenue was attributed to growth in the education, healthcare, and other business segments, which offset declines in television broadcasting, manufacturing, and automotive sectors. Operating income improved to $47.5 million from $35.4 million, driven by better performance in education, manufacturing, and healthcare.

In terms of operational metrics, the education division generated $424.7 million in revenue, a slight increase from $422.6 million in the previous year. Kaplan, Inc. reported an operating income of $40 million, up from $30.6 million. Notably, Kaplan's higher education segment saw a 10% revenue increase, primarily due to a rise in fees from Purdue Global, which also experienced a 4% increase in enrollments. Conversely, Kaplan International's revenue fell by 3%, largely due to lower student enrollments in the UK.

The company undertook significant strategic actions during the quarter, including the settlement of a mandatorily redeemable noncontrolling interest for $205 million, which included $186.25 million in cash and $18.75 million in stock. This settlement resulted in a $66.2 million increase in the noncontrolling interest obligation, recorded as interest expense. Additionally, Graham Holdings initiated the sale of BridgeU Limited, classifying its assets and liabilities as held for sale, while also completing the sale of a small business under World of Good Brands.

Graham Holdings' financial position showed a decrease in cash and cash equivalents to $156.7 million from $260.9 million at the end of 2024. The company’s total debt rose to $864.6 million, up from $748.2 million, primarily due to increased borrowings under its revolving credit facility. The company maintained a working capital of $777 million, down from $898.8 million, reflecting its ongoing investments and operational expenditures. Looking ahead, Graham Holdings expects to fund its capital needs through existing cash balances and internally generated funds, while continuing to assess opportunities for growth and strategic investments.