Graham Holdings Company Reports First Quarter Earnings for 2025

During the first quarter, Graham Holdings reported revenues of $1,165.9 million, reflecting a 1% increase from $1,152.7 million in the same period last year. This growth was driven primarily by gains in the education, healthcare, and other businesses. However, this was partly offset by declines in television broadcasting, manufacturing, and automotive sectors.

The company reported an operating income of $47.5 million, significantly up from $35.4 million in the first quarter of 2024. The improvement in operating results was attributed to increased revenues in education, healthcare, and manufacturing, although these gains were mitigated by declines in television broadcasting and automotive sectors. Adjusted operating cash flow (non-GAAP) was reported at $88.0 million, an increase from $82.8 million in the previous year.

Capital expenditures saw a notable decrease, totaling $14.1 million in the first quarter of 2025 compared to $21.5 million in the same quarter of 2024.

In the first quarter of 2025, Graham Holdings did not engage in any significant business acquisitions or dispositions, maintaining its current portfolio without significant changes.

As of March 31, 2025, Graham Holdings had $864.6 million in borrowings, with an average interest rate of 6.0%. This figure includes $184.7 million drawn on its $300 million revolving credit facility. The company’s cash, marketable equity securities, and other investments totaled $1,114.7 million at the end of the quarter.

The company recognized $43.8 million in net gains on marketable equity securities during the first quarter, a decrease from $104.2 million in the same period of 2024.

In alignment with its capital return strategy, Graham Holdings repurchased 3,978 shares of its Class B common stock for $3.5 million during the first quarter. As of March 31, 2025, there were 4,360,207 shares of Class B common stock outstanding. The company's Board of Directors had previously authorized the repurchase of up to 500,000 shares, leaving an authorization for 462,482 shares as of the end of the quarter.

The company recorded an interest expense of $66.4 million in the first quarter, a notable increase from $1.9 million in 2024. This expense adjustment is largely attributed to a significant rise in the estimated fair value of CSI Pharmacy Holding Company, LLC, as part of the mandatorily redeemable noncontrolling interest associated with Graham Healthcare Group (GHG).

On February 25, 2025, Graham Holdings and minority shareholders entered into an agreement to settle a substantial portion of this interest for $205 million, consisting of $186.25 million in cash and $18.75 million in Graham Holdings Class B common stock.

The company reported a net income attributable to common shares of $23.9 million ($5.45 per share) for the first quarter of 2025, down significantly from $124.4 million ($27.72 per share) in the prior year.

When excluding certain items, adjusted net income attributable to common shares was $51.0 million ($11.64 per share), slightly up from $50.4 million ($11.24 per share) in the first quarter of 2024.

Graham Holdings Company’s first quarter results indicate a resilient performance in a challenging environment, with growth in certain sectors balancing declines in others. The company's strategic focus on managing its financial position and maintaining shareholder value through stock repurchases and careful capital management will be key as it moves through 2025. The outlook remains cautious, with attention to the evolving market conditions and operational adjustments in response to sector-specific challenges.