SCHLMEDIUM SIGNALOPERATIONAL10-K

Scholastic restructured into four segments with a new Entertainment division following the 9 Story Media Group acquisition, while core revenues declined and cash generation weakened.

The creation of a dedicated Entertainment segment reflects Scholastic's strategic pivot toward media content production through the 9 Story acquisition, potentially diversifying revenue streams beyond traditional book publishing. However, the combination of declining revenues, reduced operating cash flow, and lower stockholder equity suggests integration challenges and operational headwinds that warrant monitoring.

Comparing 2025-07-25 vs 2024-07-19View on EDGAR →
FINANCIAL ANALYSIS

Scholastic's financial position shows mixed signals with total assets growing to $2.0B driven by the acquisition, but core operating metrics weakened with revenue declining 10.1% to $1.5B and operating cash flow falling to $124.2M. The company reduced share buybacks meaningfully and saw stockholder equity contract 12.5% to $1.0B, while current liabilities increased 17.1%, suggesting the acquisition strained the balance sheet and cash generation capabilities in the near term.

FINANCIAL STATEMENT CHANGES
Share Buybacks
Cash Flow
-55.8%
$158.2M→$70.0M

Buyback activity reduced 55.8% — capital being redeployed elsewhere or cash conservation underway.

Capital Expenditure
Cash Flow
-21.8%
$121.5M→$95.0M

Capex reduced 21.8% — investment cycle winding down or capital discipline; may improve near-term free cash flow.

Operating Cash Flow
Cash Flow
-19.7%
$154.6M→$124.2M

Operating cash flow softened — monitor whether temporary working capital timing or structural deterioration.

Current Liabilities
Balance Sheet
+17.1%
$534.7M→$626.4M

Current liabilities rose 17.1% — increased short-term obligations, watch current ratio.

Total Assets
Balance Sheet
+16.7%
$1.7B→$2.0B

Asset base grew 16.7% — expansion through organic growth, acquisitions, or capital deployment.

Accounts Receivable
Balance Sheet
+16.3%
$235.0M→$273.4M

Receivables grew 16.3% — monitor days sales outstanding for collection efficiency.

Stockholders Equity
Balance Sheet
-12.5%
$1.2B→$1.0B

Equity decreased 12.5% — buybacks or losses reducing book value, monitor solvency ratios.

Revenue
P&L
-10.1%
$1.7B→$1.5B

Revenue softened 10.1% — monitor whether this is cyclical or structural.

LANGUAGE CHANGES
NEW — 2025-07-25
PRIOR — 2024-07-19
ADDED
Summary 96 Signatures 97 Power of Attorney 98 Schedule II: Valuation and Qualifying Accounts and Reserves S-1 Part I Item 1 | Business Overview Scholastic Corporation (the Corporation and together with its subsidiaries, Scholastic or the Company ) is the world s largest publisher and distributor of children s books, a leading provider of print and digital instructional materials for grades pre-kindergarten ("pre-K") to grade 12 and a producer of entertaining literary and educational children s media.
Segments The Company categorizes its businesses into four reportable segments: Children s Book Publishing and Distribution ; Education Solutions; Entertainment; and International.
The following table sets forth revenues by reportable segment for the three fiscal years ended May 31: (Amounts in millions) 2025 2024 2023 Children s Book Publishing and Distribution $ 963.9 $ 953.3 $ 1,019.0 Education Solutions 309.8 351.2 386.6 Entertainment (1) 61.0 1.9 19.0 International 279.6 273.6 279.4 Overhead (2) 11.2 9.7 Total $ 1,625.5 $ 1,589.7 $ 1,704.0 (1) The Entertainment segment includes the operations of 9 Story Media Group Inc.
as acquired on June 20, 2024, including its studios in Canada, Ireland and Indonesia ("9 Story"), and Scholastic Entertainment Inc.
SEI was reported in the Children's Book Publishing and Distribution segment in prior periods.
The financial results for SEI for the fiscal years presented have been reclassified to Entertainment to reflect this change.
(2) 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.
Top selling new release titles in the trade division during fiscal 2025 included the latest title in the Hunger Games series, Sunrise on the Reaping , Christmas at Hogwarts by J.K.
Rowling, Dog Man #13: Big Jim Begins , Wings of Fire Graphix Novel #8: Escaping Peril , The Baby-Sitter's Club #16: Kristy and the Walking Disaster, The Bad Guys #19: The Bad Guys in the Serpent and the Beast, The Bad Guys #20: The Bad Guys in One Last Thing , Unico: Awakening (Volume 1): An Original Manga , and When We Flew Away by NYT bestselling author Alice Hoffman.
Effective June 1, 2025, the Company has reorganized its Book Fairs, Book Clubs and Trade Publishing divisions into a new combined group, called the Children s Book Group.
REMOVED
Summary 85 Signatures 86 Power of Attorney 87 Schedule II: Valuation and Qualifying Accounts and Reserves S-1 Part I Item 1 | Business Overview Scholastic Corporation (the Corporation and together with its subsidiaries, Scholastic or the Company ) is the world s largest publisher and distributor of children s books, a leading provider of print and digital instructional materials for grades pre-kindergarten ("pre-K") to grade 12 and a producer of high-quality, engaging children s media.
Segments The Company categorizes its businesses into three reportable segments: Children s Book Publishing and Distribution ; Education Solutions ; and International .
The following table sets forth revenues by reportable segment for the three fiscal years ended May 31: (Amounts in millions) 2024 2023 2022 Children s Book Publishing and Distribution $ 955.2 $ 1,038.0 $ 946.5 Education Solutions 351.2 386.6 393.6 International 273.6 279.4 302.8 Total (1) $ 1,580.0 $ 1,704.0 $ 1,642.9 (1) Total revenues of $1,589.7 for fiscal year ended May 31, 2024, included rental income of $9.7 related to leased space in the Company's headquarters which was not allocated to a segment.
Rental income of $7.1 and $6.1 was recognized as a reduction to Selling, general and administrative expenses for the fiscal years ended May 31, 2023 and 2022, respectively.
Commencing with the Form 10-Q for the first fiscal quarter of 2025, the Company will present a new categorization of its businesses into four reportable segments, which includes the newly formed Entertainment segment.
The Entertainment segment will include the operations of 9 Story Media Group Inc., all of the shares of capital stock of which were acquired on June 20, 2024, and Scholastic Entertainment Inc.
Top selling new release titles in the trade division during fiscal 2024 included Dog Man #12: The Scarlett Shedder , Cat Kid Comic Club #5: Influencers , Heartstopper #5 , the interactive edition of Harry Potter and the Prisoner of Azkaban , Wings of Fire Graphix #7: Winter Turning , The Baby-Sitters Club Graphic Novel #15: Claudia and the Bad Joke, Amulet #9: Waverider, and Heroes: A Novel of Pearl Harbor .
("Weston Woods") and Scholastic Audio, as well as Scholastic Entertainment Inc.
SEI is responsible for exploiting the Company's film and television assets, which include a large television programming library based on the Company's properties, and for developing new programming.
On June 20, 2024, the Company completed the acquisition of all of the outstanding shares of capital stock of 9 Story Media Group Inc.
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