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Graham Holdings Co.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 29 October 2025: press release. The quarter’s numbers.

Key takeaways

  • Third-quarter revenue rose six percent: Revenue was $1,278.9 million against $1,207.2 million a year earlier, with segment movements covered in the sections below. Source
  • Third-quarter operating income fell: Operating income was $67.1 million against $81.6 million a year earlier. The company attributed the decrease to lower results at two segments, partly offset by improved results at others. Source
  • Television and automotive results declined: Television broadcasting revenue fell 28% to $105.1 million, and operating income fell to $26.8 million from $61.9 million. Automotive revenue was $285.2 million, down 1%, with operating income of $6.3 million against $9.1 million. Source
  • Quarterly equity securities gains rose sharply: Gains on marketable equity securities were $84.8 million in the third quarter against $30.5 million. Nine-month gains were $117.0 million against $154.3 million. Source
  • Quarterly net income rose 70 percent: Net income attributable to common shareholders was $122.9 million, or $27.91 diluted per share, against $72.5 million ($16.42) a year earlier. Source
  • Quarterly adjusted net income declined: Adjusted net income was $62.0 million, or $14.08 per share, against $76.1 million ($17.25) a year earlier. Source
  • Quarterly adjusted operating cash flow fell: Adjusted operating cash flow was $110.1 million against $126.1 million a year earlier. For the nine months it was $309.5 million against $307.4 million. Source
  • Arconic cladding business acquired: Hoover acquired the Arconic cladding business with its facility in Eastman, GA. The company assumed $107.4 million of net pension obligations, a significant portion of the price. The prior release cited approximately $105 million. Source

“Management believes that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:”

Graham Holdings Co., press release

What changed from last quarter

  • Ended: All remaining World of Good Brands operations were substantially shut down by the end of the third quarter of 2025. The prior release had said this was expected. Source
  • Ended: The company decided to cease operations at the Ourisman Jeep of Bethesda dealership, which was closed in early September 2025. The prior release did not mention it. Source
  • New: The company acquired a Honda automotive dealership in Woodbridge, Virginia on October 21, 2025, including the real property for the dealership operations. Source

Quarter and nine-month results

  • Third-quarter revenue rose six percent: Revenue was $1,278.9 million against $1,207.2 million a year earlier, with segment movements covered in the sections below. Source
  • Third-quarter operating income fell: Operating income was $67.1 million against $81.6 million a year earlier. The company attributed the decrease to lower results at two segments, partly offset by improved results at others. Source
  • Nine-month operating income rose: Operating income for the first nine months was $187.4 million against $143.0 million. Impairment charges for goodwill and other long-lived assets were $2.2 million against $26.3 million. Source
  • Nine-month revenue rose three percent: Revenue for the first nine months was $3,660.5 million against $3,545.1 million a year earlier. Source

Segment revenue and operating income

  • Education revenue and profit grew: Education revenue was $472.7 million, up 8%, and operating income was $49.1 million against $34.9 million. Kaplan international revenue rose 6% to $294.3 million; higher education rose 8% and supplemental education 14%. Source
  • Healthcare revenue and profit rose sharply: Healthcare revenue was $208.4 million, up 34%, and operating income was $21.0 million against $14.3 million. Nine-month healthcare revenue was $584.4 million, up 36%, with operating income of $64.4 million against $33.1 million. Source
  • Manufacturing revenue and profit increased: Manufacturing revenue was $124.3 million, up 30%, with operating income of $6.7 million against $4.5 million. Adjusted operating cash flow was $15.2 million against $10.9 million. Source
  • Television and automotive results declined: Television broadcasting revenue fell 28% to $105.1 million, and operating income fell to $26.8 million from $61.9 million. Automotive revenue was $285.2 million, down 1%, with operating income of $6.3 million against $9.1 million. Source

“these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations.”

Graham Holdings Co., press release

Operating costs and below-the-line items

  • Operating expenses rose eight percent: Operating expenses were $1,180.5 million against $1,095.8 million. Healthcare operating expenses rose 33% and manufacturing operating expenses rose 29%. Source
  • Depreciation down, amortization up: Depreciation of property, plant and equipment was $19.3 million against $21.3 million. Amortization of intangible assets was $9.7 million against $8.4 million. Source
  • Interest expense fell 34 percent: Interest expense was $17.2 million against $25.9 million. Non-operating pension and postretirement benefit income was $31.0 million against $38.3 million. Source
  • Tax provision rose in the quarter: The provision for income taxes was $56.8 million for the quarter against $38.5 million. For the nine months it was $84.9 million against $86.1 million. Source

Investment gains and noncontrolling interest

  • Quarterly equity securities gains rose sharply: Gains on marketable equity securities were $84.8 million in the third quarter against $30.5 million. Nine-month gains were $117.0 million against $154.3 million. Source
  • Noncontrolling interest charge fell: Interest expense from the fair value adjustment of the mandatorily redeemable noncontrolling interest was $0.7 million against $9.7 million. Nine-month amounts were $68.3 million against $85.1 million. Source
  • Affiliate results moved from loss to income: Equity in earnings of affiliates was $15.8 million for the quarter against a $13.4 million loss. For the nine months it was $10.5 million against an $8.5 million loss. Source

Net income and adjusted earnings

  • Quarterly net income rose 70 percent: Net income attributable to common shareholders was $122.9 million, or $27.91 diluted per share, against $72.5 million ($16.42) a year earlier. Source
  • Quarterly adjusted net income declined: Adjusted net income was $62.0 million, or $14.08 per share, against $76.1 million ($17.25) a year earlier. Source
  • Nine-month adjusted net income fell four percent: Adjusted net income for the nine months was $176.1 million ($40.05 per share) against $183.5 million ($41.20). Reported net income was $183.6 million ($41.75) against $175.8 million ($39.49). Source

Cash flow, debt and investments

  • Quarterly adjusted operating cash flow fell: Adjusted operating cash flow was $110.1 million against $126.1 million a year earlier. For the nine months it was $309.5 million against $307.4 million. Source
  • Capital expenditures fell year on year: Capital expenditures were $20.2 million against $23.8 million in the quarter, and $54.1 million against $66.0 million for the nine months. Source
  • Borrowings fell from June: Borrowings were $731.9 million at an average rate of 5.9%, including $67.2 million on the $300 million revolver. At June 30 they were $816.4 million at 6.0%. Source
  • Cash and investments rose to $1.24 billion: Cash, marketable equity securities and other investments were $1,242.9 million, up from $1,127.5 million at June 30. Source

Acquisitions, closures and dispositions

  • Arconic cladding business acquired: Hoover acquired the Arconic cladding business with its facility in Eastman, GA. The company assumed $107.4 million of net pension obligations, a significant portion of the price. The prior release cited approximately $105 million. Source
  • World of Good Brands wound down: Sale of various websites and related businesses was completed in the first half of 2025. Remaining operations were substantially shut down by the end of the third quarter. Source
  • Ourisman Jeep Bethesda dealership ceased: The company recently decided to stop operations at this dealership. The release gives no revenue or income figures for it. Source
  • Honda dealership bought after quarter end: The purchase closed after the quarter ended and included the real property used for dealership operations. The release gives no price or revenue figures. Source

Share repurchases and shares outstanding

  • Nine-month share repurchases: The company bought 3,978 Class B shares for $3.5 million in the first nine months. Shares outstanding were 4,361,833 at September 30, 2025. Source
  • Repurchase authorization remaining: The September 2024 authorization covers up to 500,000 Class B shares. 462,482 shares remained authorized at September 30, 2025. Source

Earlier plans management reported on

  • Met: The earlier release expected remaining World of Good Brands operations to be substantially shut down by the end of the third quarter. This release states they were. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.