A major North American educational publisher and retailer with a diversified portfolio serving schools, parents, and teachers through books, digital tools, and curriculum resources.
Scholastic offers a compelling value proposition with its massive distribution network and loyal customer base in the essential education sector that is relatively recession-resistant compared to discretionary spending. The company's strong operating cash flow generation allows for continued capital return programs through dividends and buybacks, potentially supporting share price recovery if profitability improves. Its diversified revenue streams across K-12, parenting, and licensing provide stability against single-segment volatility.
The recent shift to a net loss and widening retained earnings deficit signal underlying profitability issues that require urgent management attention before they escalate further. High levels of goodwill at $198.9M and significant other shareholders equity negative balance of -$1.24B indicate potential impairment risks or accounting complexities that could impact future earnings. The decline in revenue from $1.70B in 2023 to $1.59B in 2024 suggests weakening market demand or competitive pressures that have not yet been fully addressed.
Scholastic Corporation is a leading educational services and publishing company operating primarily in North America, serving teachers, schools, and parents with curriculum resources, books, and digital tools. The company leverages its extensive network of retail stores and online platforms to distribute a wide range of educational materials across K-12 markets. Recent financials reflect a diverse revenue mix driven by physical book sales, digital solutions, and licensing agreements.
Recent financial performance shows a decline in net income from $86.5M in 2023 to a loss of $1.9M in 2025, despite revenue recovering slightly to $1.63B after dipping in 2024. Operating expenses surged to $890.9M while operating profit remained thin at $15.8M, indicating margin compression likely due to increased general and administrative costs of $822.3M. The cash flow from operations of $124.2M supports significant share repurchases of $70.0M and dividends of $22.6M, though the retained earnings deficit of $999.7M warrants monitoring.
The educational services industry is evolving with a blend of traditional print publishing and digital learning solutions, creating opportunities for companies that can successfully integrate both formats. Competition is intensifying from technology firms entering the classroom space and independent publishers targeting niche curriculum needs. Regulatory changes in education funding and standards continue to influence purchasing decisions for schools and licensing contracts.
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $1.70B | $1.59B | $1.63B |
| Cost of Revenue | $786.4M | $705.1M | $718.8M |
| Gross Profit | $917.6M | $884.6M | $906.7M |
| Operating Expenses | $811.3M | $870.1M | $890.9M |
| Operating Income | $106.3M | $14.5M | $15.8M |
| G&A | $756.6M | $803.0M | $822.3M |
| Stock-Based Comp | $10.5M | $11.0M | $9.3M |
| D&A | $52.5M | $57.1M | $54.5M |
| Amortization | $2.2M | $2.6M | $11.2M |
| Other OpEx | $54.7M | $67.1M | $68.6M |
| Non-Operating Income | $6.1M | $1.7M | $-17.1M |
| Interest Expense | $1.4M | $1.9M | $18.2M |
| Pre-Tax Income | $112.4M | $16.2M | $-1.3M |
| Income Tax | $25.9M | $4.1M | $600.0K |
| Continuing Ops | $86.5M | $12.1M | $-1.9M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $86.5M | $12.1M | $-1.9M |
| Minority Interest | $200.0K | $0 | $0 |
| Net to Common | $86.3M | $12.1M | $-1.9M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $892.9M | $676.9M | $725.3M |
| Cash & Equivalents | $224.5M | $113.7M | $124.0M |
| Accounts Receivable | $278.0M | $235.0M | $273.4M |
| Inventory | $334.5M | $264.2M | $250.2M |
| Prepaid Expenses | $47.0M | $48.8M | $47.9M |
| Other Current Assets | $8.9M | $15.2M | $29.8M |
| Long-Term Assets | $973.8M | $994.3M | $1.22B |
| PP&E (Net) | $521.4M | $511.9M | $516.3M |
| Intangibles | $9.9M | $10.3M | $87.9M |
| Goodwill | $132.7M | $132.8M | $198.9M |
| Operating Leases | $85.7M | $99.1M | $103.9M |
| Other LT Assets | $224.1M | $240.2M | $317.8M |
| Total Assets | $1.87B | $1.67B | $1.95B |
| Current Liabilities | $602.3M | $534.7M | $626.4M |
| Accounts Payable | $170.9M | $138.5M | $157.3M |
| Current Leases | $21.2M | $22.4M | $26.8M |
| Deferred Revenue | — | $161.1M | $178.8M |
| Other Current Liab | $410.2M | $212.7M | $263.5M |
| Long-Term Liabilities | $99.9M | $118.4M | $377.2M |
| Long-Term Debt | $0 | $0 | $250.0M |
| LT Operating Leases | $73.8M | $89.2M | $91.5M |
| Other LT Liab | $26.1M | $22.7M | $31.5M |
| Total Liabilities | $702.2M | $653.1M | $1.00B |
| Shareholders' Equity | $1.16B | $1.02B | $946.5M |
| Paid-In Capital | $632.2M | $604.6M | $607.1M |
| Retained Earnings | $1.04B | $1.02B | $999.7M |
| AOCI | $-55.8M | $-52.5M | $-41.5M |
| Treasury Stock | $449.5M | $558.1M | $619.2M |
| Total L&E | $1.87B | $1.67B | $1.95B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $86.5M | $12.1M | $-1.9M |
| Non-Cash Adjustments | $37.8M | $288.6M | $51.3M |
| Working Capital Changes | $24.6M | $-146.1M | $74.8M |
| Cash from Operations | $148.9M | $154.6M | $124.2M |
| Cash from Investing | $-99.6M | $-89.7M | $-252.9M |
| Share Buybacks | $132.1M | $158.2M | $70.0M |
| Dividends Paid | $25.6M | $24.7M | $22.6M |
| Cash from Financing | $-139.5M | $-176.1M | $137.3M |
| FX Effect | $-1.9M | $400.0K | $1.7M |
| Net Change in Cash | $-92.1M | $-110.8M | $10.3M |
| Beginning Cash | $316.6M | $224.5M | $113.7M |
| Ending Cash | $224.5M | $113.7M | $124.0M |
The company's revenue is primarily generated through three core segments: K-12 Education Services which includes classroom materials and teacher resources; Parenting & Literacy which encompasses consumer books and digital apps for families; and Licensing Solutions that provide educational content to publishers and organizations. Financial data indicates a strong reliance on physical inventory management alongside growing digital deferred revenue streams.
The company faces significant exposure to supply chain disruptions that could impact inventory levels and cost of revenue given the heavy reliance on physical book production and shipping. Economic downturns or reduced education budgets in public and private sectors may lead to decreased spending on curriculum materials and licensing fees. Fluctuations in foreign exchange rates can negatively impact cash flows from international operations, while high accounts payable relative to receivables suggests potential liquidity pressure.
Scholastic maintains a dominant market position through its extensive distribution network of retail stores and direct-to-consumer online channels, providing unmatched logistics efficiency for book distribution. The company possesses deep proprietary relationships with authors and illustrators, creating high barriers to entry and ensuring exclusive content access. Its integrated ecosystem connecting schools, parents, and publishers creates strong customer stickiness and recurring revenue opportunities.
Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.