What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-09-19 compared with 2025-03-21 · 194 added, 386 removed, 528 unchanged (52% of the section changed)

3 unchanged sentences

(Dollar amounts in millions, except per share data)

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Three months ended

August 31, August 31,

Revenues $ 225.6 $ 237.2

18 unchanged sentences

(Dollar amounts in millions)

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Three months ended

August 31, August 31,

Net income (loss) $ ( 71.1 ) $ ( 62.5 )

8 unchanged sentences

(Dollar amounts in millions, except per share data)

February 28, 2025 May 31, 2024 February 29, 2024

August 31, 2025 May 31, 2025 August 31, 2024

(unaudited) (audited) (unaudited)

5 unchanged sentences

Tax credit receivable

19.0 21.0 1.0

Prepaid expenses and other current assets 72.4 47.9 72.5

4 unchanged sentences

Investment in film and television programs, net

44.6 42.1 40.4

Operating lease right-of-use assets, net 97.9 103.9 105.0

53 unchanged sentences

Stockholders'

Equity of Scholastic Corporation Noncontrolling Interest Total

Stockholders'

Shares Amount Shares Amount

10 unchanged sentences

— — — — — — ( 5.6 ) — ( 5.6 )

Other (noncontrolling interest) — — — — ( 0.5 ) — — — ( 0.5 ) ( 1.6 ) ( 2.1 )

Balance at August 31, 2024 0.8 $ 0.0 27.3 $ 0.4 $ 606.3 $ ( 44.1 ) $ 955.6 $ ( 560.9 ) $ 957.3

Net Income (loss) — — — — — — 76.9 — 76.9 — 76.9

Foreign currency translation adjustment — — — — — 0.2 — — 0.2 — 0.2

Pension and post-retirement adjustments (net of tax of $ 0.0 )

— — — — — 0.1 — — 0.1 — 0.1

Stock-based compensation — — — — 4.1 — — — 4.1 — 4.1

Proceeds pursuant to stock-based compensation plans — — — — 0.6 — — — 0.6 — 0.6

Purchases of treasury stock at cost — — ( 1.4 ) — — — — ( 52.3 ) ( 52.3 ) — ( 52.3 )

Treasury stock issued pursuant to equity-based plans — — 0.3 — ( 6.6 ) — — 7.5 0.9 — 0.9

Dividends ($ 0.20 per share)

— — — — — — ( 6.0 ) — ( 6.0 ) — ( 6.0 )

Balance at November 30, 2023 1.7 $ 0.0 28.2 $ 0.4 $ 630.8 $ ( 53.5 ) $ 1,026.0 $ ( 524.6 ) $ 1,079.1 $ — $ 1,079.1

Net Income (loss) — — — — — — ( 26.5 ) — ( 26.5 ) — ( 26.5 )

Foreign currency translation adjustment — — — — — ( 0.4 ) — — ( 0.4 ) — ( 0.4 )

Pension and post-retirement adjustments (net of tax of $ 0.1 )

— — — — — 0.2 — — 0.2 — 0.2

Stock-based compensation — — — — 2.3 — — — 2.3 — 2.3

Proceeds pursuant to stock-based compensation plans — — — — 2.5 — — — 2.5 — 2.5

Purchases of treasury stock at cost — — ( 1.4 ) — — — — ( 54.2 ) ( 54.2 ) — ( 54.2 )

Treasury stock issued pursuant to equity-based plans — — 0.1 — ( 4.0 ) — — 4.6 0.6 — 0.6

Dividends ($ 0.20 per share)

— — — — — — ( 6.0 ) — ( 6.0 ) — ( 6.0 )

Other (share conversion)

( 0.9 ) — 0.9 — ( 28.6 ) — — 28.6 — — —

Balance at February 29, 2024 0.8 $ 0.0 27.8 $ 0.4 $ 603.0 $ ( 53.7 ) $ 993.5 $ ( 545.6 ) $ 997.6 $ — $ 997.6

Class A Stock Common Stock Additional Paid-in Capital Accumulated

4 unchanged sentences

Stockholders'

Equity of Scholastic Corporation Noncontrolling Interest Total

Stockholders'

Shares Amount Shares Amount

6 unchanged sentences

Proceeds pursuant to stock-based compensation plans — — — — 0.5 — — — 0.5

Purchases of treasury stock at cost — — ( 0.2 ) — — — — ( 5.0 ) ( 5.0 ) — ( 5.0 )

Treasury stock issued pursuant to equity-based plans — — 0.1 — ( 1.6 ) — — 3.1 1.5

2 unchanged sentences

Balance at August 31, 2025 0.8 $ 0.0 24.3 $ 0.4 $ 607.9 $ ( 37.7 ) $ 923.5 $ ( 616.1 ) $ 878.0

Net Income (loss) — — — — — — 48.8 — 48.8 — 48.8

Foreign currency translation adjustment — — — — — ( 11.9 ) — — ( 11.9 ) — ( 11.9 )

Pension and post-retirement adjustments (net of tax of $ 0.0 )

— — — — — 0.2 — — 0.2 — 0.2

Stock-based compensation — — — — 2.1 — — — 2.1 — 2.1

Proceeds pursuant to stock-based compensation plans — — — — ( 0.5 ) — — — ( 0.5 ) — ( 0.5 )

Purchases of treasury stock at cost — — ( 0.1 ) — — — — ( 5.0 ) ( 5.0 ) — ( 5.0 )

Treasury stock issued pursuant to equity-based plans — — 0.1 — ( 4.4 ) — — 5.1 0.7 — 0.7

Dividends ($ 0.20 per share)

— — — — — — ( 5.7 ) — ( 5.7 ) — ( 5.7 )

Balance at November 30, 2024 0.8 $ 0.0 27.3 $ 0.4 $ 603.5 $ ( 55.8 ) $ 998.7 $ ( 560.8 ) $ 986.0 $ — $ 986.0

Net Income (loss) — — — — — ( 3.6 ) — ( 3.6 ) ( 3.6 )

Foreign currency translation adjustment — — — — — ( 8.0 ) — — ( 8.0 ) — ( 8.0 )

Pension and post-retirement adjustments (net of tax of $ 0.1 )

— — — — — 0.1 — — 0.1 — 0.1

Stock-based compensation — — — — 2.4 — — — 2.4 — 2.4

Proceeds pursuant to stock-based compensation plans — — — — 0.1 — — — 0.1 — 0.1

Purchases of treasury stock at cost — — ( 1.5 ) — — — — ( 30.6 ) ( 30.6 ) — ( 30.6 )

Treasury stock issued pursuant to equity-based plans — — 0.1 — ( 0.7 ) — — 1.2 0.5 — 0.5

Dividends ($ 0.20 per share)

— — — — — — ( 5.6 ) — ( 5.6 ) — ( 5.6 )

Balance at February 28, 2025 0.8 $ 0.0 25.9 $ 0.4 $ 605.3 $ ( 63.7 ) $ 989.5 $ ( 590.2 ) $ 941.3 $ — $ 941.3

See accompanying notes

2 unchanged sentences

(Dollar amounts in millions)

Nine months ended

February 28, February 29,

Three months ended

August 31, August 31,

Cash flows - operating activities:

32 unchanged sentences

Acquisitions, net of cash acquired — ( 176.4 )

Purchase of noncontrolling interest — ( 2.1 )

Other ( 0.1 ) —

Net cash provided by (used in) investing activities ( 14.9 ) ( 200.8 )

8 unchanged sentences

Payment of dividends ( 5.2 ) ( 5.7 )

Other ( 0.1 ) 0.1

Net cash provided by (used in) financing activities 66.8 211.9

16 unchanged sentences

Certain prior period amounts have been reclassified to conform with the current year presentation.

Noncontrolling Interest

On June 1, 2023, the Company acquired the remaining shares of Make Believe Ideas Limited ("MBI"), a UK-based children's book publishing company, which represented a 5.0 % noncontrolling interest, increasing the Company's total ownership from 95.0 % to 100 %.

Prior to June 1, 2023, the founder and chief executive officer of MBI retained a 5.0 % noncontrolling ownership interest in MBI.

The Company fully consolidated MBI as of the acquisition date and the 5.0 % noncontrolling interest was classified within stockholder's equity.

Interim Financial Statements

18 unchanged sentences

• Pension and postretirement benefit plans

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

• Uncertain tax positions

4 unchanged sentences

• Royalty advance reserves and royalty expense accruals

• Expected economic useful life of film and television program assets

• Impairment testing for goodwill, other intangibles and other long-lived assets and investments

• Expected economic useful life and recoverability of film and television program assets

• Impairment testing for goodwill, intangibles and other long-lived assets and investments

• Assets and liabilities acquired in business combinations

• Variable consideration related to anticipated returns

• Allocation of transaction price to contractual performance obligations

Summary of Significant Accounting Policies

In Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2024 the Company included a description of its significant accounting policies.

Except as set forth below, as of the date of this Quarterly Report on Form 10-Q there have been no material changes to the significant accounting policies described in the Company’s Annual Report for the fiscal year ended May 31, 2024.

The below significant accounting policies relate to the Company's entertainment business, which includes the operations of 9 Story and Scholastic Entertainment Inc.

Refer to Note 7, "Acquisitions" for further details regarding the acquisition of 9 Story.

Revenue recognition

The Company’s revenue recognition policies for its entertainment business include the following:

Film and TV production - Revenue is deferred during production and recognized when the film or episodes have been delivered and are available for showing or exploitation.

Production services - Revenue is recognized using the percentage-of-completion method based on the proportion of costs incurred in the current period to total expected costs.

Licensing - Revenue from the sale or granting of broadcast license rights to third parties is recognized when the licensed content is available to the customer and the customer has the contractual right to broadcast or stream the content.

Royalty income - Revenue from sales and usage-based royalties related to licenses is generally recognized when the subsequent sale or usage occurs.

Investment in film and television programs

Investments in film and television programs are stated at the lower of cost or net realizable value.

Investment in film and television programs includes all direct production and financing costs incurred during production and minimum guarantee payments made to acquire distribution rights.

Interest costs are capitalized to the cost of the film or television program until substantially all of the activities required for delivery are complete.

Investments in film and television programs are amortized using the declining-balance method with rates ranging from 50% to 90% at the time of initial episodic delivery and at rates ranging from 10% to 25% annually thereafter.

The determination of the rates is based on the expected economic useful life of the film or television program and includes factors such as rights retained by the Company, the availability of rights to renew licenses for episodic television programs in various territories, and the availability of secondary market revenue.

The Company regularly reviews the recoverability of these capitalized costs based on expected future cash flows.

Government financing and assistance

The Company has access to government programs and tax credits that are designed to assist film, television and digital media production and distribution.

Amounts received and amounts receivable which relate to the Company's film and television program assets are recorded as a reduction in the production costs of the related asset.

SCHOLASTIC CORPORATION

1 unchanged sentence

(Dollar amounts in millions, except per share data)

New Accounting Pronouncements

In November 2024, Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

• Variable consideration related to anticipated returns

• Allocation of transaction price to contractual performance obligations

Recently Issued Accounting Pronouncements

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets." The amendments in this Update provide entities with a practical expedient related to developing reasonable and supportable forecasts as part of estimating expected credit losses, in which entities may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

If the Company elects to use the practical expedient, this ASU is effective for the Company's fiscal year 2027.

Early adoption is allowed.

The Company is currently assessing the impact of this ASU on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

In January 2025, the FASB issued ASU 2025-01,""Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) - Clarifying the Effective Date" to clarify the effective date of ASU 2024-03 for non-calendar year-end entities.

3 unchanged sentences

The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740)." The amendments in this update enhance the transparency and decision usefulness of income tax disclosures to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740)." The amendments in this update enhance the transparency and decision usefulness of income tax disclosures to provide information to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and prospects for future cash flows.

The amendments in this ASU require more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

This ASU is effective for the Company's fiscal year 2026.

This ASU will be effective for the Company's annual disclosures for fiscal year 2026.

The amendments are to be applied prospectively, but may be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures.” This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU is effective for the Company's fiscal year 2025, and interim periods starting in fiscal year 2026.

The amendments in this ASU are to be applied retrospectively to all prior periods presented in the financial statements.

The Company is currently assessing the impact of the disclosure requirements on its consolidated financial statements.

The Company expects the adoption of this ASU to primarily result in additional disclosures related to tax rates for certain individual states.

Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2025 for more information on current applicable authoritative guidance and its impact on the Company's financial statements.

4 unchanged sentences

The following table presents the Company’s segment revenues disaggregated by region and domestic channel:

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Three months ended

August 31, August 31,

Book Clubs - U.S.

$ 15.2 $ 13.3 $ 51.1 $ 48.3

Book Fairs - U.S.

110.7 102.7 370.5 372.1

68.9 69.5 218.1 232.2

Trade - International (1)

8.5 7.6 36.0 35.3

Total Children's Book Publishing and Distribution $ 109.4 $ 105.4

3 unchanged sentences

Entertainment - U.S.

$ 1.0 $ 0.5 $ 3.9 $ 1.3

Entertainment - International (2)

11.8 — 42.3 —

Total Entertainment $ 13.6 $ 16.6

$ 12.8 $ 0.5 $ 46.2 $ 1.3

International - Major Markets (3)

1 unchanged sentence

International - Other Markets (4)

9.6 11.1 29.4 31.6

Total International $ 59.4 $ 56.8

$ 2.8 $ 2.5 $ 8.4 $ 7.3

Total Overhead $ 3.1 $ 2.7

Total $ 335.4 $ 323.7 $ 1,117.2 $ 1,114.8

(1) The newly formed Entertainment segment includes the operations of SEI, which were included in the Children’s Book Publishing and Distribution segment in prior periods, and 9 Story.

The financial results for SEI for the three and nine months ended February 29, 2024 have been reclassified to Entertainment to reflect this change.

Total Revenues $ 225.6 $ 237.2

(1) Primarily includes foreign rights and certain product sales in the UK.

4 unchanged sentences

Estimated Returns

A liability for expected returns of $ 33.3 , $ 33.1 , and $ 38.3 is recorded within Other accrued expenses as of February 28, 2025, May 31, 2024, and February 29, 2024, respectively.

In addition, a return asset of $ 3.8 , $ 4.2 , and $ 4.4 is recorded within Prepaid expenses and other current assets as of February 28, 2025, May 31, 2024, and February 29, 2024, respectively, for the recoverable cost of product estimated to be returned by customers.

A liability for expected returns of $ 32.9 , $ 34.4 , and $ 30.7 is recorded within Other accrued expenses as of August 31, 2025, May 31, 2025, and August 31, 2024, respectively.

In addition, a return asset of $ 3.1 , $ 3.7 , and $ 3.9 is recorded within Prepaid expenses and other current assets as of August 31, 2025, May 31, 2025, and August 31, 2024, respectively, for the recoverable cost of product estimated to be returned by customers.

SCHOLASTIC CORPORATION

3 unchanged sentences

The following table presents further detail regarding the Company's contract liabilities as of the dates indicated:

February 28, 2025 May 31, 2024 February 29, 2024

August 31, 2025 May 31, 2025 August 31, 2024

Book fairs incentive credits $ 104.0 $ 122.1 $ 99.4

3 unchanged sentences

education-related (1)

9.5 10.1 10.6

Media-related 7.3 0.0 0.1

Stored value cards 25.8 16.7 20.1

Entertainment-related (2)

Stored value programs 22.8 22.4 17.3

Total contract liabilities $ 184.7 $ 183.0 $ 180.2

(1) Primarily includes contract liabilities related to contracts with school districts and professional services.

(2) Primarily includes contract liabilities related to various international products and services.

(1) Primarily relates to contracts with school districts and professional services.

(2) Primarily relates to contracts for film and TV productions and production services.

(3) Primarily relates to contracts for various international products and services.

The Company's contract liabilities consist of advance billings and payments received from customers in excess of revenue recognized and revenue allocated to outstanding book fairs incentive credits.

Contract liabilities of $ 205.2 , $ 161.1 and $ 193.8 as of February 28, 2025, May 31, 2024 and February 29, 2024, respectively, are recorded within Deferred revenue on the Company's Condensed Consolidated Balance Sheets and are classified as short term, as substantially all of the associated performance obligations are expected to be satisfied, and related revenue recognized, within one year.

The remaining $ 5.1 , $ 6.5 and $ 6.3 of contract liabilities as of February 28, 2025, May 31, 2024 and February 29, 2024, respectively, are recorded within Other noncurrent liabilities on the Company's Condensed Consolidated Balance Sheet as the associated performance obligations are expected to be satisfied, and related revenue recognized, in excess of one year.

The Company recognized revenue which was included in the opening Deferred revenue balance in the amount of $ 35.1 and $ 106.2 for the three and nine months ended February 28, 2025, respectively, and $ 33.0 and $ 113.7 for the three and nine months ended February 29, 2024, respectively.

Contract liabilities of $ 181.0 , $ 178.8 and $ 173.9 as of August 31, 2025, May 31, 2025 and August 31, 2024, respectively, are recorded within Deferred revenue on the Company's Condensed Consolidated Balance Sheets and are classified as short term, as substantially all of the associated performance obligations are expected to be satisfied, and related revenue recognized, within one year.

The remaining $ 3.7 , $ 4.2 and $ 6.3 of contract liabilities as of August 31, 2025, May 31, 2025 and August 31, 2024, respectively, are recorded within Other noncurrent liabilities on the Company's Condensed Consolidated Balance Sheets as the associated performance obligations are expected to be satisfied, and related revenue recognized, in excess of one year.

The Company recognized revenue which was included in the opening Deferred revenue balance in the amount of $ 37.0 and $ 29.2 for the three months ended August 31, 2025, and August 31, 2024, respectively.

Allowance for Credit Losses

9 unchanged sentences

Balance as of August 31, 2025 $ 10.9

Provision (benefit) 2.1

Write-offs and other ( 2.6 )

Balance as of November 30, 2024 $ 14.9

Provision (benefit) 0.9

Write-offs and other ( 1.9 )

Balance as of February 28, 2025 $ 13.9

SCHOLASTIC CORPORATION

4 unchanged sentences

Children’s Book Publishing and Distribution, Education Solutions, Entertainment and International .

• Children’s Book Publishing and Distribution operates as an integrated business which includes the publication and distribution of children’s books, ebooks, media and interactive products primarily in the United States through its School Reading Events business, which includes the book clubs and book fairs channels, and through the trade channel.

• Children’s Book Publishing and Distribution operates as an integrated business which includes the publication and distribution of children’s books, ebooks, media and interactive products in the United States through its school reading events business, which includes the book clubs and book fairs channels and through the trade channel.

This segment is comprised of two operating segments.

• Education Solutions includes the publication and distribution to schools and libraries of children’s books, classroom magazines, print and digital supplemental and core classroom materials and related support services and print and online reference and non-fiction products for grades pre-kindergarten to 12 in the United States.

• Education Solutions includes the publication and distribution to schools and libraries of children’s books, classroom magazines, print and digital supplemental and core classroom materials and programs and related support services, and print and online reference and non-fiction products for grades pre-kindergarten to 12 in the United States.

This segment is comprised of one operating segment.

1 unchanged sentence

This segment is comprised of one operating segment.

• International includes the publication and distribution of products and services outside the United States by the Company’s international operations and its export businesses.

This segment is comprised of three operating segments.

The following table sets forth the Company's revenue and operating income (loss) by segment for the periods indicated:

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Children's Book Publishing and Distribution (1)

• International includes the publication and distribution of products and services outside the United States by the Company’s international operations and its export and foreign rights businesses.

This segment is comprised of four operating segments.

The Company's chief operating decision maker ("CODM") is the President and Chief Executive Officer.

The CODM uses operating income (loss) as the profit measure to evaluate segment performance and allocate resources to the segments.

The CODM considers variances of actual performance to forecasts and prior year when making decisions.

The following tables present the Company’s revenue, significant expenses, and operating income (loss) by segment for the periods indicated:

Three months ended August 31, 2025

Children's Book Publishing and Distribution Education Solutions Entertainment International Overhead (1)

Revenues $ 109.4 $ 40.1 $ 13.6 $ 59.4 $ 3.1 $ 225.6

Cost of goods sold (2)

62.2 19.3 8.1 35.4 ( 1.5 ) 123.5

Education Solutions 57.2 68.5 184.1 215.5

Entertainment (1)

Selling, general and administrative expenses (2)(3)

76.1 39.3 6.4 26.8 28.6 177.2

International 59.3 59.1 202.8 202.8

Depreciation and amortization 5.4 2.7 3.1 1.4 3.7 16.3

Other segment items (4)

0.8 — — — — 0.8

Total $ 335.4 $ 323.7 $ 1,117.2 $ 1,114.8

Operating income (loss) $ ( 35.1 ) $ ( 21.2 ) $ ( 4.0 ) $ ( 4.2 ) $ ( 27.7 ) $ ( 92.2 )

Children's Book Publishing and Distribution (1)

Interest income (expense), net ( 4.5 )

Other components of net periodic benefit (cost) ( 0.3 )

Earnings (loss) before income taxes

Other segment disclosures:

Segment assets $ 634.7 $ 211.1 $ 255.5 $ 261.0 $ 592.3 $ 1,954.6

Long-lived asset additions 1.2 0.1 0.0 3.4 2.7 7.4

(1) Overhead includes all domestic corporate amounts not allocated to segments, including expenses and costs related to the management of corporate assets and rental income related to leased space in the Company's headquarters.

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(3) Selling, general and administrative expenses includes equity in the net income (loss) of investees accounted for by the equity method.

A loss of less than $ 0.1 was recognized within the Entertainment segment and a loss of $ 0.1 was recognized within the International segment.

(4) Other segment items include asset impairments and write downs.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

Three months ended August 31, 2024

Children's Book Publishing and Distribution Education Solutions Entertainment International Overhead (1)

Revenues $ 105.4 $ 55.7 $ 16.6 $ 56.8 $ 2.7 $ 237.2

Cost of goods sold (2)

58.9 27.4 8.3 35.3 ( 1.6 ) 128.3

Education Solutions ( 6.9 ) ( 0.8 ) ( 24.4 ) ( 13.7 )

Entertainment (1)

Selling, general and administrative expenses (2)(3)

77.5 42.7 6.5 28.3 27.1 182.1

International ( 2.1 ) ( 5.9 ) ( 4.7 ) ( 6.1 )

Depreciation and amortization 5.6 2.6 2.3 1.5 3.3 15.3

Operating income (Loss)

$ ( 36.6 ) $ ( 17.0 ) $ ( 0.5 ) $ ( 8.3 ) $ ( 26.1 ) $ ( 88.5 )

Total $ ( 23.9 ) $ ( 34.9 ) $ ( 37.7 ) $ ( 32.7 )

(1) The newly formed Entertainment segment includes the operations of SEI, which were included in the Children’s Book Publishing and Distribution segment in prior periods, and 9 Story.

The financial results for SEI for the three and nine months ended February 29, 2024 have been reclassified to Entertainment to reflect this change.

Interest income (expense), net ( 3.0 )

Other components of net periodic benefit (cost) ( 0.3 )

Earnings (loss) before income taxes

Other segment disclosures:

Segment assets $ 604.3 $ 206.9 $ 285.8 $ 249.4 $ 613.6 $ 1,960.0

Long-lived asset additions 8.4 — 0.0 2.2 4.0 14.6

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

3) Selling, general and administrative expenses includes equity in the net income (loss) of investees accounted for by the equity method.

Income of $ 0.2 was recognized within the Entertainment segment and a loss of less than $ 0.1 was recognized in the International segment.

The following table presents geographic information for revenues for the periods indicated.

Revenues are attributed to locations based on the origin of sale.

Three months ended August 31,

United States $ 141.7 $ 149.7

International 83.9 87.5

Total Revenues $ 225.6 $ 237.2

The following table presents geographic information for long-lived assets as of the dates indicated.

Long-lived assets consist of property, plant and equipment, net, excluding capitalized software.

August 31, 2025 August 31, 2024

United States $ 412.4 $ 436.0

International 35.2 33.9

Total Long-lived assets $ 447.6 $ 469.9

ASSET WRITE DOWN

During the first quarter of fiscal 2026, the Company identified certain assets that were not recoverable.

The estimated future cash flows related to these assets were impacted by the Company's decision to no longer sell the related product.

The assets consisted of capitalized costs related to cloud computing arrangements and were included within the Children's Book Publishing and Distribution segment.

Accordingly, the Company recognized an impairment charge of $ 0.8 which was included in Asset impairments and write downs within the Company's Condensed Consolidated Statement of Operations for the quarter ended August 31, 2025.

The related impact of the impairments was a loss per basic and diluted share of Class A and Common Stock of $ 0.02 in the three months ended August 31, 2025.

The following table summarizes the carrying value of the Company's debt, excluding film related obligations, as of the dates indicated:

February 28, 2025 May 31, 2024 February 29, 2024

US Revolving Credit Agreement $ 275.0 $ — $ 25.0

August 31, 2025 May 31, 2025 August 31, 2024

Credit Agreement $ 325.0 $ 250.0 $ 225.0

Unsecured lines of credit 6.2 6.2 6.1

2 unchanged sentences

Total long-term debt $ 325.0 $ 250.0 $ 225.0

The following table sets forth the maturities of the carrying values of the Company's debt obligations, excluding film related obligations, as of February 28, 2025 for the twelve month periods ended February 28:

The following table sets forth the maturities of the carrying values of the Company's debt obligations, excluding film related obligations, as of August 31, 2025 for the twelve month periods ended August 31:

Total Debt $ 331.2

US Revolving Credit Agreement

Credit Agreement

On November 26, 2024, Scholastic Corporation and its principal operating subsidiary, Scholastic Inc., entered into a Third Amendment to Amended and Restated Credit Agreement (the “Amendment”) with a syndicate of banks and Bank of America, N.A., as administrative agent, and Truist Bank and Wells Fargo Bank, National Association, as co-syndication agents (as amended by the Third Amendment, the “Credit Agreement”).

The arrangement was accounted for as a debt modification.

The revised terms of the amended Credit Agreement include the following:

• an increase in borrowing limits to $ 400.0 from $ 300.0 , as amended on October 27, 2021;

• an increase in the interest pricing margins for SOFR loans to a range of 1.625 % to 1.875 % from a range of 1.35 % to 1.75 % and for Base Rate loans to a range of 0.625 % to 0.875 % from a range of 0.35 % to 0.75 %;

• the elimination of the credit spread adjustment of 0.10 % applicable to Term SOFR loans;

• the extension of the maturity date to November 26, 2029.

The Company incurred debt issuance costs of $ 1.6 in connection with the Amendment which are amortized over the term of the Credit Agreement.

The current portion of these costs is recorded within Prepaid expenses and other current assets and the noncurrent portion is recorded within Other assets and deferred charges on the Company's Condensed Consolidated Balance Sheet.

The Credit Agreement provides for a $ 400.0 unsecured revolving credit facility and allows the Company to borrow, repay or prepay and reborrow at any time prior to the November 26, 2029 maturity date.

4 unchanged sentences

• a Term SOFR Advance equal to the Term SOFR rate plus an applicable margin ranging from 1.625 % to 1.875 %, as determined by the Company’s prevailing Consolidated Net Leverage Ratio (as defined in the Credit Agreement).

As of February 28, 2025, the applicable margin on Base Rate Advances was 0.75 % and the applicable margin on SOFR Advances was 1.75 %.

As of August 31, 2025, the applicable margin on Base Rate Advances was 0.75 % and the applicable margin on SOFR Advances was 1.75 %.

The Credit Agreement provides for payment of a commitment fee in respect of the aggregate unused amount of revolving credit commitments ranging from 0.20 % to 0.30 % per annum based upon the Corporation’s then prevailing Consolidated Net Leverage Ratio.

As of February 28, 2025, the commitment fee rate was 0.25 %.

As of August 31, 2025, the commitment fee rate was 0.25 %.

A portion of the revolving credit facility, up to a maximum of $ 50.0 , is available for the issuance of letters of credit.

In addition, a portion of the revolving credit facility, up to a maximum of $ 15.0 , is available for swingline loans.

The Credit Agreement has an accordion feature which permits the Company, provided certain conditions are satisfied, to increase the facility by up to an additional $ 150.0 .

As of February 28, 2025, the Company had outstanding borrowings of $ 275.0 under the Credit Agreement at a weighted average interest rate of 6.1 %.

The Credit Agreement has an accordion feature which permits the Company, provided certain conditions are satisfied (as defined in the Credit Agreement), to increase the facility by up to an additional $ 150.0 .

As of August 31, 2025, the Company had outstanding borrowings of $ 325.0 under the Credit Agreement at a weighted average interest rate of 6.1 %.

While this obligation is not due until the November 26, 2029 maturity date, the Company may, from time to time, make payments to reduce this obligation when cash from operations becomes available for this purpose.

As of February 29, 2024, outstanding borrowings under the Credit Agreement were $ 25.0 at a weighted average interest rate of 6.8 %.

As of August 31, 2024, outstanding borrowings under the Credit Agreement were $ 225.0 at a weighted average interest rate of 6.8 %.

The Credit Agreement contains certain financial covenants related to leverage and interest coverage ratios (as defined in the Credit Agreement), limitations on the amount of dividends and other distributions, and other limitations on fundamental changes to the Company or its business.

The Company was in compliance with required covenants for all periods presented.

At February 28, 2025, the Company had open standby letters of credit totaling $ 4.0 issued under certain credit lines, including $ 0.4 under the Credit Agreement and $ 3.6 under the domestic credit lines discussed below.

At August 31, 2025, the Company had open standby letters of credit totaling $ 4.0 issued under certain credit lines, including $ 0.4 under the Credit Agreement and $ 3.6 under the domestic credit lines discussed below.

Unsecured Lines of Credit

As of February 28, 2025, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $ 10.0 .

There were no outstanding borrowings under these credit lines as of February 28, 2025, May 31, 2024 and February 29, 2024.

As of February 28, 2025, availability under these unsecured money market bid rate credit lines totaled $ 6.4 , excluding commitments of $ 3.6 .

As of August 31, 2025, the Company’s domestic credit lines available under unsecured money market bid rate credit lines totaled $ 10.0 .

There were no outstanding borrowings under these credit lines as of August 31, 2025, May 31, 2025 and August 31, 2024.

As of August 31, 2025, availability under these unsecured money market bid rate credit lines totaled $ 6.4 , excluding commitments of $ 3.6 .

All loans made under these credit lines are at the sole discretion of the lender and at an interest rate and term agreed to at the time each loan is made, but not to exceed 365 days.

These credit lines may be renewed, if requested by the Company, at the option of the lender.

As of February 28, 2025, the Company had various local currency international credit lines totaling $ 15.6 underwritten by banks primarily in the United States and the United Kingdom.

Outstanding borrowings under these facilities were $ 5.8 at February 28, 2025 at a weighted average interest rate of 4.9 %, compared to outstanding borrowings of $ 6.0 at May 31, 2024 at a weighted average interest rate of 4.5 %, and $ 6.5 at February 29, 2024 at a weighted average interest rate of 3.8 %.

As of February 28, 2025, the amounts available under these facilities totaled $ 9.8 .

As of August 31, 2025, the Company had various local currency international credit lines totaling $ 28.8 underwritten by banks primarily in the United States, Canada and the United Kingdom.

Outstanding borrowings under these facilities were $ 6.2 at August 31, 2025 at a weighted average interest rate of 4.9 %, compared to outstanding borrowings of $ 6.2 at May 31, 2025 at a weighted average interest rate of 4.5 %, and $ 6.1 at August 31, 2024 at a weighted average interest rate of 4.3 %.

As of August 31, 2025, the amounts available under these facilities totaled $ 22.6 .

These credit lines are typically available for overdraft borrowings or loans up to 364 days and may be renewed, if requested by the Company, at the sole option of the lender.

2 unchanged sentences

The interim production credit facilities are secured by an assignment and direction of specific production financing including tax credits and license contract receivables and are due on demand.

As of February 28, 2025, interest is charged at the following rates:

As of August 31, 2025, interest is charged at the following rates:

• the bank prime rate plus a margin ranging from 0.50 % to 0.75 % for Canadian dollar loans;

• SOFR plus a margin ranging from 2.25 % to 3.00 % for U.S.

dollar loans;

• Euribor plus 2.00 % for Euro loans.

As of February 28, 2025, outstanding borrowings under these facilities were $ 18.8 at a weighted average interest rate of 6.3 % .

• SOFR plus a margin of 3.00 % for U.S.

Outstanding borrowings under these facilities were $ 14.7 at a weighted average interest rate of 6.0 % at August 31, 2025, $ 18.3 at a weighted average interest rate of 6.2 % at May 31, 2025 and $ 34.1 at a weighted average interest rate of 7.8 % at August 31, 2024.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

COMMITMENTS AND CONTINGENCIES

8 unchanged sentences

The following table summarizes the reconciliation of the numerators and denominators for the basic and diluted earnings (loss) per share computation for the periods indicated:

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Three months ended

August 31, August 31,

Net income (loss) attributable to Class A and Common Stockholders $ ( 71.1 ) $ ( 62.5 )

6 unchanged sentences

Anti-dilutive shares pursuant to stock-based compensation plans*

1.9 1.1 1.7 0.7

* The Company experienced a net loss for the three and nine months ended February 28, 2025 and therefore did not report any dilutive share impact.

The following potential common shares were excluded from the loss per diluted share computation:

* The Company experienced a net loss for the three months ended August 31, 2025 and August 31, 2024 and therefore did not report any dilutive share impact.

The following potential common shares were excluded from the loss per diluted share computation as of August 31, 2025:

outstanding options and restricted stock units of 2.6 million and 0.5 million, respectively.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The following table sets forth options outstanding pursuant to stock-based compensation plans as of the dates indicated:

February 28, 2025 February 29, 2024

August 31, 2025 August 31, 2024

Options outstanding pursuant to stock-based compensation plans (in millions)

As of February 28, 2025, $ 46.6 remained available for future purchases of common shares under the repurchase authorization of the Board of Directors (the "Board") in effect on that date.

See Note 12, "Treasury Stock", for a more complete description of the Company’s share buy-back program and Note 18, "Subsequent Events" for additional Board authorization for common share repurchases.

As of August 31, 2025, $ 70.0 remained available for future purchases of common shares under the repurchase authorization of the Board of Directors (the "Board") in effect on that date.

See Note 12, "Treasury Stock", for a more complete description of the Company’s share buy-back program.

9 Story Acquisition

On June 20, 2024, the Company completed the acquisition of 100 % of the economic interests in the form of non-voting shares and 25 % of the voting shares of 9 Story, a leading independent creator, producer and distributor of premium children’s content based in Toronto, Canada, with studios or offices in New York, United States, Dublin, Ireland and Bali, Indonesia.

The aggregate purchase price was $ 193.7 , subject to further adjustment based on the final determination of purchase price adjustments, and was funded through borrowings under the U.S.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

States, Dublin, Ireland and Bali, Indonesia.

The aggregate purchase price was $ 193.7 , which included a net purchase price adjustment of $ 0.2 , and was funded through borrowings under the U.S.

Credit Agreement incurred during the first quarter of fiscal 2025.

2 unchanged sentences

Accordingly, 9 Story has been consolidated into the Company's financial results.

The operations of 9 Story are reported in the Entertainment segment.

9 Story met the definition of a business pursuant to ASC 805, Business Combinations , and the acquisition was accounted for as a business combination under the acquisition method of accounting.

The Company estimated the preliminary fair value of acquired assets and liabilities as of the date of acquisition based on currently available information.

As the Company finalizes the fair value of assets acquired and liabilities assumed, additional purchase price adjustments may be recorded during the measurement period.

Refer to Note 8, Goodwill and Other Intangibles, for details regarding measurement period adjustments recorded during the nine months ended February 28, 2025.

The following table summarizes the preliminary purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition, inclusive of measurement period adjustments:

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The Company estimated the fair value of acquired assets and liabilities as of the date of acquisition based on currently available information.

The following table summarizes the purchase price allocation of fair values of the assets acquired and liabilities assumed at the date of acquisition:

Cash and cash equivalents $ 17.5

7 unchanged sentences

Internally developed software 1.3

Tax credit receivable 31.9

Other assets 3.9

7 unchanged sentences

Total liabilities assumed $ 79.0

Preliminary fair value of net assets acquired 122.7

Goodwill 71.0

Preliminary purchase price consideration $ 193.7

(1) Includes a preliminary step-up adjustment of $ 1.8 .

(2) Includes $ 31.9 of receivables related to government tax incentives.

Fair value of net assets acquired $ 129.5

Purchase price consideration $ 193.7

(1) I ncludes $ 36.7 related to distribution contracts and relationships.

The intangible assets acquired include intellectual property ("IP") related to 9 Story's existing and recognized program titles, customer contracts/relationships related to licensing, distribution and service arrangements, the trade names associated with 9 Story and Brown Bag Films, its animation studio, and internally developed software.

6 unchanged sentences

The goodwill and intangible assets acquired were allocated to the Entertainment segment.

The financial results of 9 Story, since the date of acquisition, were included in the Company's Condensed Consolidated Financial Statements as of February 28, 2025.

9 Story contributed total revenue of $ 44.2 and net loss of $ 8.3 from the date of acquisition on June 20, 2024 through February 28, 2025.

The operations of 9 Story are reported in the Entertainment segment.

The following table summarizes the unaudited pro-forma consolidated results of operations for the three and nine months ended February 28, 2025 and February 29, 2024 as if the acquisition had occurred on June 1, 2023, the beginning of fiscal 2024:

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Revenues $ 335.4 $

341.9 $ 1,122.9 $

Net income (loss) ( 3.6 ) ( 29.3 ) ( 19.1 ) ( 34.2 )

SCHOLASTIC CORPORATION

1 unchanged sentence

(Dollar amounts in millions, except per share data)

The unaudited pro-forma consolidated results above are based on the historical financial statements of the Company and 9 Story and are not necessarily indicative of the results of operations that would have been achieved if the acquisition was completed at the beginning of fiscal 2024 and are not indicative of the future operating results of the combined entities.

The financial information for 9 Story prior to the acquisition includes certain adjustments to 9 Story's historical consolidated financial statements to align with U.S.

GAAP and the Company's accounting policies.

The pro-forma consolidated results of operations also include the effects of purchase accounting adjustments, including amortization charges related to the finite-lived intangible assets acquired, fair value adjustments relating to leases and fixed assets, and the related tax effects assuming that the business combination occurred on June 1, 2023.

The Company incurred acquisition‑related costs of $ 0.5 and $ 2.6 for the three and nine months ended February 28, 2025, respectively, which were included in Selling, general and administrative expenses in the Condensed Consolidated Statement of Operations.

Purchase of Noncontrolling Interest

On June 1, 2023, the Company acquired the remaining shares of Make Believe Ideas Limited, a UK-based children's book publishing company, for $ 2.1 , increasing the Company's total ownership from 95.0 % to 100 %.

The acquisition was accounted for as an equity transaction as there was no change in control.

The carrying value of the noncontrolling interest at the acquisition date was $ 1.6 .

The difference between the fair value of consideration paid and the carrying value was recognized as an adjustment to Additional paid-in capital of $ 0.5 .

GOODWILL AND OTHER INTANGIBLES

2 unchanged sentences

The following table summarizes the activity in Goodwill for the periods indicated:

February 28, 2025 May 31, 2024 February 29, 2024

August 31, 2025 May 31, 2025 August 31, 2024

Gross beginning balance $ 238.5 $ 172.4 $ 172.4

2 unchanged sentences

Additions (1)

Measurement period adjustments (1)

Foreign currency translation 0.8 1.9 1.5

Ending balance $ 199.7 $ 198.9 $ 204.4

(1) Measurement period adjustments for the 9 Story acquisition reflect an increase to goodwill of $ 0.9 resulting from a net decrease in the estimated fair value of the net assets acquired.

The decrease in the estimated fair value of the net assets acquired consisted of an increase to deferred tax liabilities of $ 1.4 , an increase to operating lease right-of-use assets of $ 0.3 , a decrease to lease liabilities of $ 0.1 , and a decrease to the purchase price as a result of a working capital adjustment of $ 0.1 .

(1) The additions during the twelve months ended May 31, 2025 included measurement period adjustments for the 9 Story acquisition which reflected a decrease to goodwill of $ 5.9 resulting from a net increase in the estimated fair value of the net assets acquired.

The increase in the estimated fair value of the net assets acquired consisted of a decrease to deferred tax liabilities of $ 5.3 , an increase to operating lease right-of-use assets of $ 0.3 , a decrease to lease liabilities of $ 0.1 , an increase to the property, plant and equipment of $ 0.1 and a decrease to the purchase price as a result of a working capital adjustment of $ 0.1 .

In fiscal 2025, the Company completed the 9 Story acquisition which resulted in the recognition of $ 64.2 of Goodwill, net of measurement period adjustments, included in the Entertainment segment.

1 unchanged sentence

There were no impairment charges related to Goodwill in any of the periods presented.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

The following table summarizes the activity in Other intangible assets for the periods indicated:

February 28, 2025 May 31, 2024 February 29, 2024

August 31, 2025 May 31, 2025 August 31, 2024

Beginning balance - Other intangibles subject to amortization $ 85.8 $ 8.2 $ 8.2

2 unchanged sentences

Foreign currency translation 1.5 3.5 1.5

Impairments — ( 3.1 ) —

Total other intangibles subject to amortization, net of accumulated amortization of $ 53.1 , $ 50.3 and $ 41.5 , respectively

5 unchanged sentences

Refer to Note 8, "Acquisitions", for further details regarding the acquisition.

In fiscal 2024, the Company acquired certain amortizable intangible assets related to educational programs for $ 5.8 and certain amortizable intangible assets of a U.S.- based children's book publishing business for $ 0.2 .

These intangible assets are amortized over the estimated useful life of 8 years and 5 years, respectively.

In fiscal 2023, the Company acquired Learning Ovations, Inc., a U.S.-based education technology business, which resulted in the recognition of $ 4.1 of amortizable intangible assets.

During fiscal 2024, the Company assessed the recoverability of these assets which was impacted by the shift to an evidenced-based approach to literacy instruction within the education market.

An asset impairment of $ 3.1 was recognized in the fourth quarter of fiscal 2024.

There were no impairment charges related to Other intangible assets in the nine months ended February 28, 2025 and February 29, 2024.

There were no impairment charges related to Other intangible assets in any of the periods presented.

Other intangible assets with indefinite lives consist principally of trademark and trade name rights.

2 unchanged sentences

The weighted-average remaining useful lives of all amortizable intangible assets is approximately 8.2 years.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

Investments are included in Other assets and deferred charges on the Condensed Consolidated Balance Sheets.

The following table summarizes the Company’s investments as of the dates indicated:

February 28, 2025 May 31, 2024 February 29, 2024 Segment

August 31, 2025 May 31, 2025 August 31, 2024 Segment

Equity method investments $ 33.6 $ 33.6 $ 32.5 International

7 unchanged sentences

This investment is included in the Entertainment segment.

The Company acquired investments of $ 0.9 as part of the 9 Story acquisition which are included in the Entertainment segment.

Included in these acquired investments, the Company acquired a 50 % ownership

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

interest in certain animated television production companies.

During fiscal 2025, the Company acquired investments of $ 0.9 as part of the 9 Story acquisition which are included in the Entertainment segment.

These acquired investments include a 50 % ownership interest in certain animated television production companies.

These joint venture investments are accounted for using the equity method of accounting.

The Company also acquired a 12 % ownership interest in a children's book publishing business located in the UK.

The acquired investment also include a 12 % ownership interest in a children's book publishing business located in the UK.

This investment is accounted for at cost, less impairment on the Company's Condensed Consolidated Balance Sheets.

There have been no impairments or adjustments to the carrying value of the investment.

Income from equity investments is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations and totaled a loss of less than $ 0.1 and income of $ 0.8 for the three and nine months ended February 28, 2025, respectively, and a loss of $ 0.2 and income of $ 0.1 for the three and nine months ended February 29, 2024, respectively.

The Company received dividends of $ 1.3 in the three and nine months ended February 29, 2024.

The Company did not receive any dividends in the nine months ended February 28, 2025.

EMPLOYEE BENEFIT PLANS

The following table sets forth the components of net periodic benefit cost for the periods indicated under the Company’s defined benefit pension plan of Scholastic Ltd., an indirect subsidiary of Scholastic Corporation located in the United Kingdom (the “UK Pension Plan”), and the postretirement benefits plan, consisting of certain healthcare and life insurance benefits provided by the Company to its eligible retired United States-based employees (the “US Postretirement Benefits”), for the periods indicated:

UK Pension Plan US Postretirement Benefits

Three months ended Three months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Components of net periodic benefit cost:

Interest cost $ 0.4 $ 0.3 $ 0.1 $ 0.1

Expected return on assets ( 0.3 ) ( 0.2 ) — —

Amortization of prior service (credit) loss 0.0 0.0 ( 0.3 ) ( 0.3 )

Amortization of net actuarial (gain) loss 0.4 0.4 ( 0.1 ) 0.0

Total $ 0.5 $ 0.5 $ ( 0.3 ) $ ( 0.2 )

UK Pension Plan US Postretirement Benefits

Nine months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Components of net periodic benefit cost:

Interest cost $ 1.0 $ 1.0 $ 0.3 $ 0.3

Expected return on assets ( 0.8 ) ( 0.8 ) — —

Amortization of prior service (credit) loss 0.0 0.0 ( 0.7 ) ( 0.7 )

Amortization of net actuarial (gain) loss 1.1 1.0 ( 0.1 ) 0.0

Total $ 1.3 $ 1.2 $ ( 0.5 ) $ ( 0.4 )

Actuarial gains and losses are amortized using a corridor approach.

The gain or loss corridor is equal to 10% of the greater of the projected benefit obligation and the market-related value of assets.

Gains and losses in excess of the corridor are amortized over the future working lifetime.

The Company’s funding practice with respect to the UK Pension Plan is to contribute on an annual basis at least the minimum amounts required by applicable law.

For the nine months ended February 28, 2025, the Company contributed $ 1.0 to the UK Pension Plan.

The Company expects, based on actuarial calculations, to contribute cash of approximately $ 1.3 to the UK Pension Plan for the fiscal year ending May 31, 2025.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

Income (loss) from equity investments is reported in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

For the three months ended August 31, 2025 and August 31, 2024, the Company recognized a loss of $ 0.1 and income of $ 0.2 , respectively.

The Company did not receive any dividends in the three months ended August 31, 2025 and August 31, 2024.

STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense included in Selling, general and administrative expenses for the periods indicated:

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Three months ended

August 31, August 31,

Stock option expense $ 0.3 $ 0.6

3 unchanged sentences

Total stock-based compensation expense $ 1.9 $ 2.2

During the second quarter of fiscal 2025, the Company granted performance-based restricted stock units to certain officers and senior management.

Compensation expense is recognized over the requisite service period based on expected attainment of pre-established performance goals.

The following table sets forth Common Stock issued pursuant to stock-based compensation plans for the periods indicated:

Three months ended Nine months ended

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Three months ended

August 31, August 31,

Common Stock issued pursuant to stock-based compensation plans (in millions) 0.1 0.1

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

TREASURY STOCK

2 unchanged sentences

Authorization Amount

December 2023 66.2

March 2025 53.4

1 unchanged sentence

Less repurchases made under these authorizations ( 38.0 )

Remaining Board authorization at February 28, 2025 $ 46.6

Remaining Board authorization at February 28, 2025 represents the amount remaining under the Board authorization for Common share repurchases announced on March 20, 2024, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions.

See Note 18, "Subsequent Events", for additional Board authorization for common share repurchases.

Repurchases of the Company's Common Stock were $ 30.6 and $ 40.6 , including excise tax on share repurchases, during the three and nine months ende d February 28, 2025, respectively.

Remaining Board authorization at August 31, 2025 $ 70.0

Remaining Board authorization at August 31, 2025 represents the amount remaining under the Board authorization for Common share repurchases announced on March 20, 2024 and the current $ 53.4 Board authorization for Common share repurchases announced on March 19, 2025, which is available for further repurchases, from time to time as conditions allow, on the open market or through privately negotiated transactions.

There were no repurchases of the Company's Common Stock during the three months ende d August 31, 2025.

The Company's repurchase program may be suspended at any time without prior notice.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following tables summarize the activity in Accumulated other comprehensive income (loss), net of tax, by component, for the periods indicated:

Three months ended February 28, 2025

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at November 30, 2024

$ ( 50.6 ) $ ( 5.2 ) $ ( 55.8 )

Other comprehensive income (loss) before reclassifications ( 8.0 ) — ( 8.0 )

Less amount reclassified from Accumulated other comprehensive income (loss):

Amortization of net actuarial (gain) loss (net of tax of $ 0.0 )

Amortization of prior service (credit) cost (net of tax of $ 0.1 )

— ( 0.2 ) ( 0.2 )

Other comprehensive income (loss) ( 8.0 ) 0.1 ( 7.9 )

Ending balance at February 28, 2025 $ ( 58.6 ) $ ( 5.1 ) $ ( 63.7 )

Three months ended February 29, 2024

Foreign currency translation adjustments Retirement benefit plans Total

Beginning balance at November 30, 2023

$ ( 48.0 ) $ ( 5.5 ) $ ( 53.5 )

Other comprehensive income (loss) before reclassifications ( 0.4 ) — ( 0.4 )

Less amount reclassified from Accumulated other comprehensive income (loss):

Amortization of net actuarial (gain) loss (net of tax of $ 0.0 )

Amortization of prior service (credit) cost (net of tax of $ 0.1 )

— ( 0.2 ) ( 0.2 )

Other comprehensive income (loss) ( 0.4 ) 0.2 ( 0.2 )

Ending balance at February 29, 2024 $ ( 48.4 ) $ ( 5.3 ) $ ( 53.7 )

Nine months ended February 28, 2025

Three months ended August 31, 2025

Foreign currency translation adjustments Retirement benefit plans Total

6 unchanged sentences

Other comprehensive income (loss) 3.5 0.3 3.8

Ending balance at February 28, 2025 $ ( 58.6 ) $ ( 5.1 ) $ ( 63.7 )

Nine months ended February 29, 2024

Ending balance at August 31, 2025 $ ( 32.5 ) $ ( 5.2 ) $ ( 37.7 )

Three months ended August 31, 2024

Foreign currency translation adjustments Retirement benefit plans Total

6 unchanged sentences

Other comprehensive income (loss) 8.2 0.2 8.4

Ending balance at February 29, 2024 $ ( 48.4 ) $ ( 5.3 ) $ ( 53.7 )

Ending balance at August 31, 2024 $ ( 38.7 ) $ ( 5.4 ) $ ( 44.1 )

SCHOLASTIC CORPORATION

2 unchanged sentences

The following table presents the impact on earnings of reclassifications out of Accumulated other comprehensive income (loss) for the periods indicated:

Three months ended Nine months ended Condensed Consolidated Statements of Operations line item

February 28, February 29, February 28, February 29,

2025 2024 2025 2024

Three months ended Condensed Consolidated Statements of Operations line item

August 31, August 31,

Employee benefit plans:

21 unchanged sentences

Level 2 and Level 3 inputs are employed by the Company in the fair value measurement of these assets.

For the fair value measurements employed by the Company for certain property, plant and equipment, investments, prepublication assets and investment in film and television programs, the Company assessed future expected cash flows attributable to these assets.

For the fair value measurements employed by the Company for certain capitalized costs related to cloud computing arrangements, the Company assessed future expected cash flows attributable to these assets, a Level 3 fair value measure.

See Note 4, "Asset Write Down", for a more detailed description of the assets impaired during the first quarter of fiscal 2026.

See Note 10, "Investments", for a more detailed description of the fair value measurements employed.

See Note 7, "Acquisitions", for a more detailed description of the assets acquired and fair value measurements employed related to the 9 Story acquisition.

See Note 8, "Acquisitions", for a more detailed description of the assets acquired and fair value measurements employed related to the 9 Story acquisition in fiscal 2025.

SCHOLASTIC CORPORATION

6 unchanged sentences

The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained or as the result of new judicial interpretations or regulatory or tax law changes.

The Company's interim effective tax rate, inclusive of discrete items, for the three and nine month periods ended February 28, 2025 was 87.3 % and 65.5 %, respectively, compared to 23.4 % and 23.5 %, respectively, for the prior fiscal year period.

The interim effective tax rate for the nine months ended February 28, 2025 varies from the statutory rate primarily due to the expected state and local income tax and non-deductible compensation for covered executive employees.

Due to the seasonal nature of the business, the tax benefit on the operating loss for the nine months ended February 28, 2025 will be impacted by the Company's typically profitable fourth fiscal quarter.

The Company's interim effective tax rate, inclusive of discrete items, for the three month period ended August 31, 2025 was 26.7 %, compared to 31.9 % for the prior fiscal year period.

The interim effective tax rate for the three months ended August 31, 2025 varies from the statutory rate primarily due to non-deductible compensation for covered executive employees and expected state and local income tax.

The Company, including its domestic subsidiaries, files a consolidated U.S.

3 unchanged sentences

The fiscal 2021 through 2024 tax years remain subject to audit.

The Organization for Economic Cooperation and Development (“OECD”) has implemented the global minimum tax rate of at least 15% for large multinational companies as of 2024 (“Pillar Two”).

Under Pillar Two, a top-up tax will be required of such companies for any jurisdiction which has enacted Pillar Two if their effective tax rate falls below the 15% global minimum rate.

Additionally, the OECD issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax.

Under the safe harbor, companies would be excluded from Pillar Two requirements provided certain criteria are met.

The enactment of Pillar Two legislation does not have a material effect on the Company’s financial position.

The Company will continue to monitor and reflect the impact of such legislative changes in future periods, as appropriate.

The Organization for Economic Co-operation and Development (OECD) has issued Pillar Two model rules introducing a new global minimum tax of 15% on foreign profits of large multinational corporations intended to be effective in 2024.

The United States has not yet adopted Pillar Two rules, however, many countries and jurisdictions have agreed to the proposal by the OECD.

As part of the Company's ongoing assessment of the OECD's Pillar Two global minimum tax framework, a comprehensive review was conducted of the Company's global tax position to evaluate the potential impact on its effective tax rate.

Based on this analysis, the Company determined the impact of Pillar Two to be immaterial to its financial statements.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.

Key corporate tax provisions of OBBBA include elective tax measures for the restoration of 100% bonus depreciation and immediate expensing of domestic research and experimental (R&E) expenditures.

Other tax measures include modifications to Section 163(j) interest expense limitations, updates to the rules governing global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII), and the expansion of Section 162(m) aggregation requirements.

The Company is evaluating the full year impact of OBBBA and, based on its preliminary analysis, does not anticipate a material effect on its consolidated financial statements for the year ending May 31, 2026.

Non-income Taxes

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Future developments relating to the foregoing could result in adjustments being made to these accruals.

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

DERIVATIVES AND HEDGING

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The Company marks-to-market these instruments and records the changes in the fair value of these items in Selling, general and administrative expenses and recognizes the unrealized gain or loss in Other current assets or Other current liabilities.

The notional values of the contracts were $ 22.8 as of February 28, 2025 and

SCHOLASTIC CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

(Dollar amounts in millions, except per share data)

February 29, 2024.

A net unrealized gain of $ 0.9 and $ 0.2 was recognized for the nine months ended February 28, 2025 and February 29, 2024, respectively.

The notional values of the contracts were $ 22.8 as of August 31, 2025 and August 31, 2024.

A net unrealized loss of $ 0.3 was recognized for the three months ended August 31, 2025 and August 31, 2024.

OTHER ACCRUED EXPENSES

Other accrued expenses consisted of the following as of the dates indicated:

February 28, 2025 May 31, 2024 February 29, 2024

August 31, 2025 May 31, 2025 August 31, 2024

Accrued payroll, payroll taxes and benefits $ 35.2 $ 35.2 $ 30.5

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SUBSEQUENT EVENTS

On March 19, 2025, the Board declared a quarterly cash dividend of $ 0.20 per share on the Company’s Class A and Common Stock for the fourth quarter of fiscal 2025.

The dividend is payable on June 16, 2025 to shareholders of record as of the close of business on April 30, 2025.

On March 19, 2025, the Board also authorized an increase of $ 53.4 for Common share repurchases under the Company's share buy-back program, resulting in a current Board authorization of $ 100.0 , which includes $ 46.6 remaining from the previous Board authorization.

SCHOLASTIC CORPORATION

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)

Overview and Outlook

Revenues for the third quarter ended February 28, 2025 were $335.4 million, compared to $323.7 million in the prior fiscal year quarter, an increase of $11.7 million or 4%.

The Company reported net loss per diluted share of Class A and Common Stock of $0.13 in the third quarter of fiscal 2025, compared to $0.91 in the prior fiscal year quarter.

During the third fiscal quarter, revenue growth was primarily driven by the contribution of 9 Story within the Entertainment segment.

Despite increasing pressure on consumer spending which impacted the Children's Book Publishing and Distribution segment, revenues from School Reading Events increased over the prior year quarter while trade channel revenues remained consistent.

The trade channel benefited from the release of the thirteenth book in Dav Pilkey’s global best-selling series, Dog Man ® :

Big Jim Begins , which also drove higher sales of backlist titles in the series, the benefit of which was offset by the general softness in the retail book market.

While Education Solutions continued to be negatively impacted by the continued decline in spending on supplemental materials, the Company expects to launch new supplemental products over the summer for the next school year.

Operating loss improved 32%, reflecting a reduction in discretionary overhead expenses and the higher revenues in the Children’s Book Publishing and Distribution segment, which more than offset the impact of lower sales in Education Solutions.

For the remainder of fiscal 2025, the Company expects increasing spending headwinds to continue to impact the trade channel resulting in softness in the retail book market as well as participation at book fairs.

The Company expects new releases to benefit the trade channel in the fourth fiscal quarter, including the recently released fifth book in Suzanne Collins’ Hunger Games ® series, Sunrise on the Reaping.

Within the Entertainment segment, delays in production greenlights from major platforms are expected to impact production work in the near-term, however the Company remains focused on production and development work for video-on-demand platforms and making progress on Company-wide synergies which are expected to benefit the Entertainment segment in fiscal 2026 and beyond.

Results of Operations

Revenues for the quarter ended February 28, 2025 increased by $11.7 million to $335.4 million, compared to $323.7 million in the prior fiscal year quarter.

Within the Children's Book Publishing and Distribution segment, revenues increased by $10.2 million, driven by increased revenues from School Reading Events as a result of higher fair count in the book fairs channel and higher revenue per sponsor and an increase in events in the book clubs channel.

Trade channel revenues were consistent with the prior year as increased sales from the Dog Man ® series, which included the latest release, Dog Man #13:

Big Jim Begins, were offset by lower sales of backlist titles due to softness in the retail book market.

In the Education Solutions segment, revenues decreased by $11.3 million primarily due to the continued decline in spending on supplemental materials, coupled with lower subscription revenues from Magazines+ TM .

In the Entertainment segment, revenues increased by $12.3 million, reflecting the addition of 9 Story.

In local currency, International segment revenues increased by $2.9 million, primarily reflecting higher sales in Canada, the U.K.

and New Zealand.

International segment revenues were impacted by unfavorable foreign exchange of $2.7 million in the quarter ended February 28, 2025.

Revenues for the nine months ended February 28, 2025 increased by $2.4 million to $1,117.2 million, compared to $1,114.8 million in the prior fiscal year period.

The overall increase in revenues was attributable to the Entertainment segment, which increased $44.9 million, reflecting the addition of 9 Story.

Revenues in the Children's Book Publishing and Distribution segment decreased by $12.2 million, primarily driven by lower trade channel revenues which reflected the timing of new releases and softness in the retail book market, partially offset by increased revenues from School Reading Events as a result of higher revenue per sponsor and an increase in events in the book clubs channel.

In the Education Solutions segment, revenues decreased by $31.4 million primarily due to the continued decline in spending on supplemental materials and lower subscription revenues from Magazines+.

In local currency, International segment revenues increased by $1.0 million, primarily reflecting increased sales in Canada, the U.K.

and New Zealand, partly offset by lower sales in Australia due to softness in the retail market.

International segment revenues were impacted by unfavorable foreign exchange of $1.0 million in the period ended February 28, 2025.

On September 17, 2025, the Board declared a quarterly cash dividend of $ 0.20 per share on the Company’s Class A and Common Stock for the second quarter of fiscal 2026.

The dividend is payable on December 15, 2025 to shareholders of record as of the close of business on October 31, 2025.

SCHOLASTIC CORPORATION

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements