Core Insights - Scholastic reported disappointing financial results for its fiscal first quarter of 2026, missing both revenue and earnings expectations [1][4] - The company's shares fell nearly 12% following the earnings report, contrasting with a slight increase in the S&P 500 index [1] Financial Performance - Revenue for the quarter was $225.6 million, a decline of nearly 12% year-over-year [2] - The operating loss was $81.9 million ($2.52 per share), an improvement from the previous year's loss of $85.6 million [2] - Both revenue and loss figures were below analyst consensus estimates, which projected revenue over $240 million and a narrower loss of $2.45 per share [4] Impact of External Factors - Scholastic attributed its performance issues to "funding uncertainties" affecting public schools, which are key customers [5] - The education solutions unit experienced a significant revenue drop of 28%, totaling slightly over $40 million [5] Future Outlook - Despite the recent challenges, Scholastic reaffirmed its guidance for the current fiscal year, expecting non-GAAP EBITDA to be between $160 million and $170 million [6] - The company anticipates revenue growth of 2% to 4% compared to the previous fiscal year [6]

Core Insights - Scholastic reported a revenue of $225.6 million for the quarter ended August 2025, reflecting a decline of 4.9% year-over-year and a surprise of -5.57% compared to the Zacks Consensus Estimate of $238.91 million [1] - The company's EPS was -$2.52, worsening from -$2.13 in the same quarter last year, with an EPS surprise of -3.28% against the consensus estimate of -$2.44 [1] Revenue Breakdown - International revenues reached $59.4 million, exceeding the average estimate of $56.67 million from two analysts [4] - Entertainment revenues were reported at $13.6 million, falling short of the average estimate of $16.35 million from two analysts [4] - Education Solutions generated $40.1 million, significantly below the average estimate of $53.75 million from two analysts [4] - Children's Book Publishing and Distribution revenues were $109.4 million, closely aligning with the average estimate of $109.37 million from two analysts [4] Stock Performance - Scholastic's shares have returned +7.7% over the past month, outperforming the Zacks S&P 500 composite's +2.5% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Performance - Scholastic's Q3 2025 revenues increased by 4% year-over-year, reaching $335.4 million compared to $323.7 million in Q3 2024 [8] - The company's operating loss improved by 32%, with a loss of $23.9 million in Q3 2025 compared to a loss of $34.9 million in Q3 2024 [8] - Adjusted EBITDA for Q3 2025 was $6.0 million, a 183% increase compared to $(7.2) million in Q3 2024 [8, 18] - Diluted loss per share improved by 86%, from $(0.91) in Q3 2024 to $(0.13) in Q3 2025 [8] Segment Performance - Children's Book Publishing and Distribution revenues increased by 5%, totaling $203.3 million in Q3 2025 compared to $193.1 million in Q3 2024 [6, 10] - Education Solutions revenues decreased by 16%, amounting to $57.2 million in Q3 2025 compared to $68.5 million in Q3 2024 [6, 10] - Entertainment revenues significantly increased, reaching $12.8 million in Q3 2025 compared to $0.5 million in Q3 2024, driven by the acquisition of 9 Story Media Group [6, 10] - International revenues increased by 5% excluding FX impact [6] Fiscal Year 2025 Outlook - The company refined its FY25 Adjusted EBITDA outlook to approximately $140 million [4, 14] - Modest revenue growth is expected year-over-year [4, 14] - Free cash flow outlook remains between $20 million and $30 million [14]