Scholastic Corporation Q3 FY2026 earnings call

• Successful completion of sale-leaseback transactions for NYC headquarters and Jefferson City Distribution Facility, unlocking over $400 million in net proceeds. • Moved quickly to return cash to shareholders under upsized $150 million share repurchase authorization, nearly exhausted, and announced new $300 million share repurchase authorization. • Book fairs showed strength with growing fair counts, higher revenue per fare, lower cancellations, and launch of Discovery Fairs. • Trade publishing had strong performance from franchises like Dogman and Hunger Games. • Scholastic Entertainment expanded IP reach on digital platforms with increased viewership. • Education segment saw moderating declines as transformation begins. • International segment benefited from global publishing franchises

Children's Book Publishing and Distribution: Revenues decreased 3% to $197.6 million in Q3. Book fair revenue increased 2% to $113.3 million, driven by higher revenue per fair. Book club revenues were $14.6 million, relatively flat. Trade Publishing: Revenues were $69.7 million, down 10% due to publishing calendar timing. Entertainment: Revenues increased by $3.2 million to $16 million, driven by increased episodic deliveries. Education: Revenues were $56.1 million, down 2% due to lower spending on supplemental curriculum. International: Revenues were $58.7 million, excluding foreign currency, declined $4.1 million

• Fiscal 2026 revenue expected to be approximately flat. • Adjusted EBITDA for fiscal 2026 reaffirmed at $146 to $156 million, including partial year impact from sale-leaseback. • Free cash flow outlook for fiscal 2026 to exceed $430 million. • Fourth quarter expected revenue growth in school reading events and entertainment, partly offset by lower revenues in trade and international. • Anticipate return to profitability in fourth quarter. • Expect incremental tariff expense of approximately $10 million in fiscal 2026

Q: Looking at rest of fiscal year and Q4, confidence in 2% growth target?

A: Book fairs major factor, positive initial indications; trade timing issue, education gap closing.

Q: Sales pipeline for education solutions in Q4?

A: Expect good summer reading, improvement in sales pipeline, good stuff in line for various programs.

Q: Confidence in hitting adjusted EBITDA guidance?

A: Favorability from cost mitigation actions, fourth quarter typically more profitable.

Q: Entertainment segment revenue growth and green lighting flow through?

A: Solid growth, green lighting activity leading to pre-production and revenue.

Q: Operating income in entertainment segment in Q4?

A: Anticipate little bit of profitability on EBITDA basis in Q4.

Q: Book fairs business KPIs?

A: Number of fairs up, revenue per fair in line/better, less cancellations.

Q: Revenue guidance range narrowing and education growth outlook?

A: Adjustment related to trade dynamics, goal to return education business to growth.

Q: Time to reach net leverage target?

A: Long-term target, not jumping in immediately, comfortable with current position