Graham Holdings(US:GHC)2025-04-30 12:24Financial Performance - The Company reported a net income of $23.9 million ($5.45 per share) for Q1 2025, a significant decrease from $124.4 million ($27.72 per share) in Q1 2024[116]. - Revenue for Q1 2025 was $1,165.9 million, up 1% from $1,152.7 million in Q1 2024, with increases in education, healthcare, and other businesses[116]. - The effective tax rate for the first three months of 2025 was 23.5%, a decrease from 25.8% in the same period of 2024[149]. - The company reported net cash provided by operating activities of $46.0 million in Q1 2025, a significant increase from $1.1 million in Q1 2024[162]. Revenue Breakdown - The education division generated revenue of $424.7 million in Q1 2025, a 1% increase from $422.6 million in Q1 2024, with Kaplan reporting operating income of $40.0 million, up from $30.6 million[117]. - Healthcare revenue surged by 36% to $173.7 million in Q1 2025, with operating income rising to $18.3 million from $6.1 million[127]. - Television broadcasting revenue decreased by 8% to $103.6 million in Q1 2025, with operating income down 18% to $24.4 million[123]. - Manufacturing revenue fell by 4% to $98.0 million in Q1 2025, but operating income increased by 79% to $5.5 million[125]. - Automotive revenue decreased by 8% to $280.9 million in Q1 2025, with operating income declining by 33% to $6.5 million[129]. - Other businesses reported a 2% increase in revenue to $84.9 million in Q1 2025, driven by growth in specialty and retail segments[132]. - Kaplan's higher education revenue increased by 10% in Q1 2025, primarily due to a 4% rise in enrollments at Purdue Global[120]. Cash Flow and Capital Expenditures - Cash and cash equivalents decreased by $104.2 million in Q1 2025, primarily due to capital expenditures, share repurchases, and dividend payments[152]. - Capital expenditures for Q1 2025 were estimated to be between $85 million and $95 million for the entire year[164]. - The company had working capital of $777.0 million as of March 31, 2025, down from $898.8 million at the end of 2024[155]. - The company expects to fund its estimated capital needs primarily through existing cash balances and internally generated funds, with sufficient resources to meet business requirements in the next 12 months[161]. Financing Activities - The net interest expense for Q1 2025 was $79.8 million, compared to $17.2 million in Q1 2024, largely due to a substantial increase in the estimated fair value of mandatorily redeemable noncontrolling interest[143][158]. - The Company had $864.6 million in borrowings outstanding at an average interest rate of 6.0% as of March 31, 2025, an increase from $748.2 million at the end of 2024[144][156]. - Net cash used in financing activities was $(121.727) million for the first three months of 2025, compared to $1.526 million provided in the same period of 2024[165]. - Distributions paid to noncontrolling interests amounted to $(188.253) million in the first three months of 2025, significantly higher than $(797) thousand in 2024[165]. - The Company repurchased 3,978 shares of Class B common stock at a cost of approximately $3.5 million during the first three months of 2025[168]. - The Company has remaining authorization to purchase up to 462,482 shares of Class B common stock as of March 31, 2025[168]. - The Company made additional borrowings on its $300 million revolving credit facility in the first three months of 2025[166]. Market Risks and Forward-Looking Statements - The Company is exposed to market risks including equity price risk, interest rate risk, and foreign exchange rate risk[171]. - Forward-looking statements indicate potential risks and uncertainties that could affect the Company's future financial performance and business strategies[170]. - There were no significant changes to the Company's contractual obligations or commercial commitments from those disclosed in the previous Annual Report[169].