Graham Holdings Company Reports Second Quarter Earnings

Rhea-AI Summary

Graham Holdings Company (NYSE: GHC) reported its Q2 2024 financial results, showing revenue growth of 7% to $1,185.3 million. However, operating income decreased to $25.9 million from $58.1 million in Q2 2023, primarily due to goodwill and intangible asset impairment charges at World of Good Brands. The company's adjusted operating cash flow slightly declined to $98.5 million. For the first six months of 2024, revenue increased by 9% to $2,337.9 million, while operating income decreased to $61.4 million. GHC reported a net loss of $21.0 million for Q2 2024, compared to a net income of $122.8 million in Q2 2023. The company's performance was mixed across divisions, with growth in education, healthcare, and automotive, offset by declines in television broadcasting, manufacturing, and other businesses.

Positive

• Revenue growth of 7% in Q2 2024 and 9% for the first six months of 2024
• Improved performance in education, healthcare, and automotive divisions
• Adjusted operating cash flow of $98.5 million for Q2 2024
• Strong cash position with $1,009.6 million in cash, marketable equity securities, and other investments

Negative

• Operating income decreased from $58.1 million in Q2 2023 to $25.9 million in Q2 2024
• Net loss of $21.0 million in Q2 2024 compared to net income of $122.8 million in Q2 2023
• Goodwill and intangible asset impairment charges at World of Good Brands
• Declines in television broadcasting, manufacturing, and other businesses
• Interest expense of $73.5 million in Q2 2024 related to mandatorily redeemable noncontrolling interest

Financial Analyst

Graham Holdings Company's Q2 2024 results present a mixed financial picture. Revenue increased by 7% to $1,185.3 million, driven by growth in education, healthcare and automotive sectors. However, operating income decreased significantly from $58.1 million to $25.9 million, primarily due to goodwill and intangible asset impairment charges at World of Good Brands.

The company's adjusted operating cash flow remained relatively stable at $98.5 million, compared to $100.0 million in Q2 2023. This suggests that despite the challenges, Graham Holdings is maintaining its core operational efficiency.

A concerning aspect is the substantial interest expense of $73.5 million recorded to adjust the fair value of the mandatorily redeemable noncontrolling interest at Graham Healthcare Group. This significant adjustment, largely related to CSI Pharmacy Holding Company, , could impact future profitability.

The company's share repurchase program, with 40,180 shares bought back at a cost of $29.5 million, demonstrates confidence in its long-term prospects. However, investors should note the net loss of $21.0 million ($4.79 per share) for Q2 2024, compared to a profit in the same period last year.

Overall, while Graham Holdings shows resilience in revenue growth, the impairment charges and interest expenses are putting pressure on profitability. Investors should closely monitor the company's ability to address these challenges in the coming quarters.

Market Research Analyst

Graham Holdings' Q2 2024 results reveal interesting market trends across its diverse portfolio. The education, healthcare and automotive segments showed growth, indicating positive market conditions in these sectors. This diversification strategy appears to be paying off, helping to offset declines in television broadcasting, manufacturing and other businesses.

The 7% revenue increase amidst a challenging economic environment is noteworthy, suggesting the company's ability to capitalize on market opportunities. However, the decline in television broadcasting revenue is a trend to watch, potentially reflecting broader shifts in media consumption habits.

The significant adjustment in the fair value of CSI Pharmacy Holding Company, , resulting in a $73.5 million interest expense, indicates a substantial increase in its estimated value. This could signal strong growth prospects in the specialty pharmacy sector, a rapidly expanding market within healthcare.

The company's continued share repurchase program, with 40,180 shares bought back at $29.5 million, suggests management's confidence in the company's intrinsic value. This could be seen as a positive signal by the market, potentially supporting share prices.

However, the goodwill and intangible asset impairment charges at World of Good Brands highlight the challenges in the consumer products sector, possibly due to changing consumer preferences or increased competition. Investors should monitor how the company addresses these challenges and repositions this segment for future growth.

ARLINGTON, Va.--(BUSINESS WIRE)-- Graham Holdings Company (NYSE: GHC) today reported its financial results for the second quarter and first six months of 2024. The Company also filed its Form 10-Q today for the quarter ended June 30, 2024 with the Securities and Exchange Commission.

Division Operating Results

Revenue for the second quarter of 2024 was $1,185.3 million, up 7% from $1,105.0 million in the second quarter of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company reported operating income of $25.9 million for the second quarter of 2024, compared to $58.1 million for the second quarter of 2023. The decrease in operating results is due to goodwill and intangible asset impairment charges at World of Good Brands (WGB) and declines at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. The Company reported adjusted operating cash flow (non-GAAP) of $98.5 million for the second quarter of 2024, compared to $100.0 million for the second quarter of 2023. Adjusted operating cash flow declined at television broadcasting, manufacturing and other businesses, partially offset by increases at education, healthcare and automotive. Capital expenditures totaled $20.8 million and $22.5 million for the second quarter of 2024 and 2023, respectively.

Revenue for the first six months of 2024 was $2,337.9 million, up 9% from $2,136.5 million in the first six months of 2023. Revenues increased at education, healthcare and automotive, partially offset by declines at television broadcasting, manufacturing and other businesses. The Company recorded operated income of $61.4 million for the first six months of 2024, compared to $85.7 million for the first six months of 2023. The decrease in operating results is due to goodwill and intangible asset impairment charges at WGB and declines at television broadcasting, manufacturing, automotive and other businesses, partially offset by increases at education and healthcare. The Company reported adjusted operating cash flow (non-GAAP) of $181.3 million for the first six months of 2024, compared to $171.6 million for the first six months of 2023. Adjusted operating cash flow improved at education, healthcare, automotive and other businesses, partially offset by declines at manufacturing. Capital expenditures totaled $42.2 million and $44.8 million for the first six months of 2024 and 2023, respectively.

Acquisitions and Dispositions of Businesses

There were no significant business acquisitions or dispositions during the first six months of 2024.

Debt, Cash and Marketable Equity Securities

At June 30, 2024, the Company had $834.8 million in borrowings outstanding at an average interest rate of 6.4%, including $132.2 million outstanding on its $300 million revolving credit facility. Cash, marketable equity securities and other investments totaled $1,009.6 million at June 30, 2024.

Overall, the Company recognized $19.6 million and $123.8 million in net gains on marketable equity securities in the second quarter and first six months of 2024, respectively, compared to $78.6 million and $96.7 million in net gains on marketable equity securities in the second quarter and first six months of 2023, respectively.

Common Stock Repurchases

During the second quarter and first six months of 2024, the Company purchased a total of 40,180 and 68,786 shares, respectively, of its Class B common stock at a cost of $29.5 million and $49.5 million, respectively. At June 30, 2024, there were 4,410,542 shares outstanding. On May 4, 2023, the Board of Directors authorized the Company to acquire up to 500,000 shares of its Class B common stock; the Company has remaining authorization for 167,617 shares as of June 30, 2024.

Mandatorily Redeemable Noncontrolling Interest

The Company recorded interest expense of $73.5 million and $75.4 million in the second quarter and first six months of 2024, respectively, to adjust the fair value of the mandatorily redeemable noncontrolling interest at Graham Healthcare Group (GHG). The significant adjustment recorded in the first half of 2024 is largely related to a substantial increase in the estimated fair value of CSI Pharmacy Holding Company, LLC (CSI). Refer to Notes 7 and 8 in the Company’s 10-Q filing for the second quarter of 2024 for additional information.

Overall Company Results

The Company reported a net loss attributable to common shares of $21.0 million ($4.79 per share) for the second quarter of 2024, compared to income of $122.8 million ($25.89 per share) for the second quarter of 2023. For the first six months of 2024, the Company recorded net income attributable to common shares of $103.3 million ($23.11 per share), compared to $175.1 million ($36.67 per share) for the first six months of 2023.

The results for the second quarter and first six months of 2024 and 2023 were affected by a number of items as described in the Non-GAAP Financial Information schedule attached to this release. Excluding these items, net income attributable to common shares was $56.9 million ($12.70 per share) for the second quarter of 2024, compared to $61.1 million ($12.88 per share) for the second quarter of 2023. Excluding these items, net income attributable to common shares was $107.3 million ($23.99 per share) for the first six months of 2024, compared to $101.4 million ($21.24 per share) for the first six months of 2023.

* * * * * * * * * * * *

Forward-Looking Statements

All public statements made by the Company and its representatives that are not statements of historical fact, including certain statements in this press release, in the Company’s Annual Report on Form 10-K and in the Company’s 2023 Annual Report to Stockholders, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on expectations, forecasts, and assumptions by the Company’s management and involve a number of risks, uncertainties, and other factors that could cause actual results to differ from those stated, including, without limitation, comments about expectations related to acquisitions or dispositions or related business activities, the Company’s business strategies and objectives, the prospects for growth in the Company’s various business operations, the Company’s future financial performance, and the risks and uncertainties described in Item 1A of the Company’s Annual Report on Form 10-K. Accordingly, undue reliance should not be placed on any forward-looking statement made by or on behalf of the Company. The Company assumes no obligation to update any forward-looking statement after the date on which such statement is made, even if new information subsequently becomes available.

GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Three Months Ended
	June 30							%
(in thousands, except per share amounts)	2024				2023			Change
Operating revenues	$	1,185,280			$	1,104,999		7
Operating expenses		1,100,851				1,012,537		9
Depreciation of property, plant and equipment		22,173				21,103		5
Amortization of intangible assets		10,058				13,304		(24	)
Impairment of goodwill and other long-lived assets		26,287				—		—
Operating income		25,911				58,055		(55	)
Equity in earnings (losses) of affiliates, net		2,560				(6,115	)	—
Interest income		2,111				1,548		36
Interest expense		(91,383	)			(11,774	)	—
Non-operating pension and postretirement benefit income, net		24,655				29,815		(17	)
Gain on marketable equity securities, net		19,628				78,648		(75	)
Other income, net		1,791				15,794		(89	)
(Loss) income before income taxes		(14,727	)			165,971		—
Provision for income taxes		4,100				41,800		(90	)
Net (loss) income		(18,827	)			124,171		—
Net income attributable to noncontrolling interests		(2,213	)			(1,383	)	60
Net (Loss) Income Attributable to Graham Holdings Company Common Stockholders	$	(21,040	)		$	122,788		—
Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic net (loss) income per common share	$	(4.79	)		$	25.96		—
Basic average number of common shares outstanding		4,401				4,700
Diluted net (loss) income per common share	$	(4.79	)		$	25.89		—
Diluted average number of common shares outstanding		4,401				4,713

GRAHAM HOLDINGS COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
	Six Months Ended
	June 30							%
(in thousands, except per share amounts)	2024				2023			Change
Operating revenues	$	2,337,942			$	2,136,545		9
Operating expenses		2,184,793				1,981,713		10
Depreciation of property, plant and equipment		44,700				41,128		9
Amortization of intangible assets		20,809				27,248		(24	)
Impairment of goodwill and other long-lived assets		26,287				745		—
Operating income		61,353				85,711		(28	)
Equity in earnings (losses) of affiliates, net		4,891				(1,454	)	—
Interest income		4,289				2,752		56
Interest expense		(110,711	)			(26,068	)	—
Non-operating pension and postretirement benefit income, net		67,072				61,660		9
Gain on marketable equity securities, net		123,780				96,670		28
Other income, net		3,438				18,877		(82	)
Income before income taxes		154,112				238,148		(35	)
Provision for income taxes		47,600				61,000		(22	)
Net income		106,512				177,148		(40	)
Net income attributable to noncontrolling interests		(3,172	)			(2,088	)	52
Net Income Attributable to Graham Holdings Company Common Stockholders	$	103,340			$	175,060		(41	)
Per Share Information Attributable to Graham Holdings Company Common Stockholders
Basic net income per common share	$	23.24			$	36.78		(37	)
Basic average number of common shares outstanding		4,416				4,729
Diluted net income per common share	$	23.11			$	36.67		(37	)
Diluted average number of common shares outstanding		4,442				4,744

GRAHAM HOLDINGS COMPANY
BUSINESS DIVISION INFORMATION
(Unaudited)
		Three Months Ended											Six Months Ended
		June 30								%			June 30								%
(in thousands)		2024				2023				Change			2024				2023				Change
Operating Revenues
Education		$	422,899			$	402,227			5			$	845,497			$	780,268			8
Television broadcasting			115,478				118,829			(3	)			228,536				231,706			(1	)
Manufacturing			103,626				120,082			(14	)			205,529				234,666			(12	)
Healthcare			147,528				113,282			30				275,729				215,341			28
Automotive			308,814				260,672			18				612,654				493,233			24
Other businesses			86,991				90,449			(4	)			170,289				182,457			(7	)
Corporate office			575				850			(32	)			1,151				850			35
Intersegment elimination			(631	)			(1,392	)		—				(1,443	)			(1,976	)		—
		$	1,185,280			$	1,104,999			7			$	2,337,942			$	2,136,545			9
Operating Expenses
Education		$	387,622			$	372,111			4			$	779,633			$	727,112			7
Television broadcasting			84,350				85,639			(2	)			167,775				169,933			(1	)
Manufacturing			99,361				108,100			(8	)			198,195				215,356			(8	)
Healthcare			134,791				104,905			28				256,901				204,028			26
Automotive			298,611				251,212			19				592,799				472,930			25
Other businesses			139,953				114,310			22				252,205				237,319			6
Corporate office			15,312				12,059			27				30,524				26,132			17
Intersegment elimination			(631	)			(1,392	)		—				(1,443	)			(1,976	)		—
		$	1,159,369			$	1,046,944			11			$	2,276,589			$	2,050,834			11
Operating Income (Loss)
Education		$	35,277			$	30,116			17			$	65,864			$	53,156			24
Television broadcasting			31,128				33,190			(6	)			60,761				61,773			(2	)
Manufacturing			4,265				11,982			(64	)			7,334				19,310			(62	)
Healthcare			12,737				8,377			52				18,828				11,313			66
Automotive			10,203				9,460			8				19,855				20,303			(2	)
Other businesses			(52,962	)			(23,861	)		—				(81,916	)			(54,862	)		(49	)
Corporate office			(14,737	)			(11,209	)		(31	)			(29,373	)			(25,282	)		(16	)
		$	25,911			$	58,055			(55	)		$	61,353			$	85,711			(28	)
Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education		$	2,872			$	3,984			(28	)		$	5,846			$	8,400			(30	)
Television broadcasting			1,360				1,363			0				2,710				2,725			(1	)
Manufacturing			2,648				4,332			(39	)			5,768				9,194			(37	)
Healthcare			598				882			(32	)			1,234				1,836			(33	)
Automotive			5				—			—				5				—			—
Other businesses			28,862				2,743			—				31,533				5,838			—
Corporate office			—				—			—				—				—			—
		$	36,345			$	13,304			—			$	47,096			$	27,993			68
Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets
Education		$	38,149			$	34,100			12			$	71,710			$	61,556			16
Television broadcasting			32,488				34,553			(6	)			63,471				64,498			(2	)
Manufacturing			6,913				16,314			(58	)			13,102				28,504			(54	)
Healthcare			13,335				9,259			44				20,062				13,149			53
Automotive			10,208				9,460			8				19,860				20,303			(2	)
Other businesses			(24,100	)			(21,118	)		(14	)			(50,383	)			(49,024	)		(3	)
Corporate office			(14,737	)			(11,209	)		(31	)			(29,373	)			(25,282	)		(16	)
		$	62,256			$	71,359			(13	)		$	108,449			$	113,704			(5	)
		Three Months Ended											Six Months Ended
		June 30								%			June 30								%
(in thousands)		2024				2023				Change			2024				2023				Change
Depreciation
Education		$	8,855			$	9,460			(6	)		$	18,160			$	18,428			(1	)
Television broadcasting			2,870				3,087			(7	)			5,738				6,123			(6	)
Manufacturing			2,694				2,287			18				5,409				4,569			18
Healthcare			1,683				1,287			31				3,277				2,391			37
Automotive			1,716				1,148			49				3,429				2,261			52
Other businesses			4,204				3,681			14				8,387				7,050			19
Corporate office			151				153			(1	)			300				306			(2	)
		$	22,173			$	21,103			5			$	44,700			$	41,128			9
Pension Expense
Education		$	4,712			$	2,256			—			$	8,822			$	4,454			98
Television broadcasting			1,416				805			76				3,055				1,665			83
Manufacturing			292				281			4				919				556			65
Healthcare			4,851				2,685			81				9,609				7,042			36
Automotive			42				5			—				57				10			—
Other businesses			1,674				613			—				3,614				1,185			—
Corporate office			1,084				928			17				2,029				1,904			7
		$	14,071			$	7,573			86			$	28,105			$	16,816			67
Adjusted Operating Cash Flow (non-GAAP)(1)
Education		$	51,716			$	45,816			13			$	98,692			$	84,438			17
Television broadcasting			36,774				38,445			(4	)			72,264				72,286			0
Manufacturing			9,899				18,882			(48	)			19,430				33,629			(42	)
Healthcare			19,869				13,231			50				32,948				22,582			46
Automotive			11,966				10,613			13				23,346				22,574			3
Other businesses			(18,222	)			(16,824	)		(8	)			(38,382	)			(40,789	)		6
Corporate office			(13,502	)			(10,128	)		(33	)			(27,044	)			(23,072	)		(17	)
		$	98,500			$	100,035			(2	)		$	181,254			$	171,648			6

____________

(1)	Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Goodwill and Other Long-Lived Assets plus Depreciation Expense and Pension Expense.

GRAHAM HOLDINGS COMPANY
EDUCATION DIVISION INFORMATION
(Unaudited)
		Three Months Ended											Six Months Ended
		June 30								%			June 30								%
(in thousands)		2024				2023				Change			2024				2023				Change
Operating Revenues
Kaplan international		$	267,026			$	237,663			12			$	536,824			$	464,739			16
Higher education			81,041				90,291			(10	)			161,163				168,632			(4	)
Supplemental education			73,133				74,616			(2	)			145,255				148,203			(2	)
Kaplan corporate and other			2,993				2,887			4				5,581				5,259			6
Intersegment elimination			(1,294	)			(3,230	)		—				(3,326	)			(6,565	)		—
		$	422,899			$	402,227			5			$	845,497			$	780,268			8
Operating Expenses
Kaplan international		$	241,202			$	216,912			11			$	479,688			$	422,687			13
Higher education			66,687				72,496			(8	)			141,290				143,754			(2	)
Supplemental education			67,461				71,104			(5	)			135,003				140,940			(4	)
Kaplan corporate and other			11,048				10,711			3				21,221				17,921			18
Amortization of intangible assets			2,872				3,984			(28	)			5,846				7,923			(26	)
Impairment of long-lived assets			—				—			—				—				477			—
Intersegment elimination			(1,648	)			(3,096	)		—				(3,415	)			(6,590	)		—
		$	387,622			$	372,111			4			$	779,633			$	727,112			7
Operating Income (Loss)
Kaplan international		$	25,824			$	20,751			24			$	57,136			$	42,052			36
Higher education			14,354				17,795			(19	)			19,873				24,878			(20	)
Supplemental education			5,672				3,512			62				10,252				7,263			41
Kaplan corporate and other			(8,055	)			(7,824	)		(3	)			(15,640	)			(12,662	)		(24	)
Amortization of intangible assets			(2,872	)			(3,984	)		28				(5,846	)			(7,923	)		26
Impairment of long-lived assets			—				—			—				—				(477	)		—
Intersegment elimination			354				(134	)		—				89				25			—
		$	35,277			$	30,116			17			$	65,864			$	53,156			24
Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets
Kaplan international		$	25,824			$	20,751			24			$	57,136			$	42,052			36
Higher education			14,354				17,795			(19	)			19,873				24,878			(20	)
Supplemental education			5,672				3,512			62				10,252				7,263			41
Kaplan corporate and other			(8,055	)			(7,824	)		(3	)			(15,640	)			(12,662	)		(24	)
Intersegment elimination			354				(134	)		—				89				25			—
		$	38,149			$	34,100			12			$	71,710			$	61,556			16
Depreciation
Kaplan international		$	7,177			$	6,903			4			$	14,533			$	13,233			10
Higher education			799				1,071			(25	)			1,702				2,173			(22	)
Supplemental education			857				1,461			(41	)			1,876				2,970			(37	)
Kaplan corporate and other			22				25			(12	)			49				52			(6	)
		$	8,855			$	9,460			(6	)		$	18,160			$	18,428			(1	)
Pension Expense
Kaplan international		$	166			$	81			—			$	329			$	161			—
Higher education			2,045				923			—				3,826				1,845			—
Supplemental education			2,094				1,023			—				3,912				2,047			91
Kaplan corporate and other			407				229			78				755				401			88
		$	4,712			$	2,256			—			$	8,822			$	4,454			98
Adjusted Operating Cash Flow (non-GAAP)(1)
Kaplan international		$	33,167			$	27,735			20			$	71,998			$	55,446			30
Higher education			17,198				19,789			(13	)			25,401				28,896			(12	)
Supplemental education			8,623				5,996			44				16,040				12,280			31
Kaplan corporate and other			(7,626	)			(7,570	)		(1	)			(14,836	)			(12,209	)		(22	)
Intersegment elimination			354				(134	)		—				89				25			—
		$	51,716			$	45,816			13			$	98,692			$	84,438			17

____________

(1)	Adjusted Operating Cash Flow (non-GAAP) is calculated as Operating Income (Loss) before Amortization of Intangible Assets and Impairment of Long-Lived Assets plus Depreciation Expense and Pension Expense.

NON-GAAP FINANCIAL INFORMATION
GRAHAM HOLDINGS COMPANY
(Unaudited)

In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included in this press release, the Company has provided information regarding Adjusted Operating Cash Flow and Net income excluding certain items described below, reconciled to the most directly comparable GAAP measures. Management believes that these non-GAAP measures, when read in conjunction with the Company’s GAAP financials, provide useful information to investors by offering:

• the ability to make meaningful period-to-period comparisons of the Company’s ongoing results;
• the ability to identify trends in the Company’s underlying business; and
• a better understanding of how management plans and measures the Company’s underlying business.

Adjusted Operating Cash Flow and Net income, excluding certain items, should not be considered substitutes or alternatives to computations calculated in accordance with and required by GAAP. These non-GAAP financial measures should be read only in conjunction with financial information presented on a GAAP basis.

The gains and losses on marketable equity securities relate to the change in the fair value (quoted prices) of its portfolio of equity securities. The mandatorily redeemable noncontrolling interest represents the ownership portion of a group of minority shareholders at a subsidiary of the Company's Healthcare business. The Company measures the redemption value of this minority ownership on a quarterly basis with changes in the fair value recorded as interest expense or income, which is included in net income for the period. The effect of gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest are not directly related to the core performance of the Company’s business operations since these items do not directly relate to the sale of the Company’s services or products. The accounting principles generally accepted in the United States (“GAAP”) require that the Company include the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest in net income on the Condensed Consolidated Statements of Operations. The Company excludes the gains and losses on marketable equity securities and net interest expense related to fair value adjustments of the mandatorily redeemable noncontrolling interest from the non-GAAP adjusted net income because these items are independent of the Company’s core operations and not indicative of the performance of the Company’s business operations.

The following tables reconcile the non-GAAP financial measures for Net income, excluding certain items, to the most directly comparable GAAP measures:

	Three Months Ended June 30
	2024												2023
(in thousands, except per share amounts)	(Loss) Income before income taxes				Income Taxes				Net (Loss) Income				Income before income taxes				Income Taxes				Net Income
Amounts attributable to Graham Holdings Company Common Stockholders
As reported	$	(14,727	)		$	4,100			$	(18,827	)		$	165,971			$	41,800			$	124,171
Attributable to noncontrolling interests										(2,213	)											(1,383	)
Attributable to Graham Holdings Company Stockholders										(21,040	)											122,788
Adjustments:
Net credit related to fair value changes in contingent consideration from prior acquisitions		—				—				—				(4,797	)			(144	)			(4,653	)
Goodwill and intangible asset impairment charges		26,287				5,693				20,594				—				—				—
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs		16,410				4,201				12,209				5,517				1,419				4,098
Interest expense (credit) related to the fair value adjustment of the mandatorily redeemable noncontrolling interest		73,539				12,145				61,394				(1,179	)			(27	)			(1,152	)
Net gains on marketable equity securities		(19,628	)			(5,026	)			(14,602	)			(78,648	)			(20,704	)			(57,944	)
Net losses of affiliates whose operations are not managed by the Company		1,128				289				839				8,633				2,273				6,360
Gain on sale of certain WGB websites		(3,483	)			(760	)			(2,723	)			—				—				—
Gain on sale of Pinna		—				—				—				(10,033	)			(2,641	)			(7,392	)
Non-operating loss (gain) from impairment, write-up and sale of cost method investments		337				86				251				(1,320	)			(347	)			(973	)
Net Income, adjusted (non-GAAP)									$	56,922											$	61,132
Per share information attributable to Graham Holdings Company Common Stockholders
Diluted (loss) income per common share, as reported									$	(4.79	)										$	25.89
Adjustments:
Net credit related to fair value changes in contingent consideration from prior acquisitions										—												(0.98	)
Goodwill and intangible asset impairment charges										4.62												—
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs										2.74												0.86
Interest expense (credit) related to the fair value adjustment of the mandatorily redeemable noncontrolling interest										13.77												(0.24	)
Net gains on marketable equity securities										(3.28	)											(12.22	)
Net losses of affiliates whose operations are not managed by the Company										0.19												1.34
Gain on sale of certain WGB websites										(0.61	)											—
Gain on sale of Pinna										—												(1.56	)
Non-operating loss (gain) from impairment, write-up and sale of cost method investments										0.06												(0.21	)
Diluted income per common share, adjusted (non-GAAP)									$	12.70											$	12.88
The adjusted diluted per share amounts may not compute due to rounding.

	Six Months Ended June 30
	2024												2023
(in thousands, except per share amounts)	Income before income taxes				Income Taxes				Net Income				Income before income taxes				Income Taxes				Net Income
Amounts attributable to Graham Holdings Company Common Stockholders
As reported	$	154,112			$	47,600			$	106,512			$	238,148			$	61,000			$	177,148
Attributable to noncontrolling interests										(3,172	)											(2,088	)
Attributable to Graham Holdings Company Stockholders									$	103,340											$	175,060
Adjustments:
Net credit related to fair value changes in contingent consideration from prior acquisitions		—				—				—				(4,688	)			(143	)			(4,545	)
Goodwill and intangible asset impairment charges		26,287				5,693				20,594				—				—				—
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs		16,828				4,308				12,520				9,646				2,481				7,165
Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest		75,415				12,241				63,174				289				47				242
Net gains on marketable equity securities		(123,780	)			(31,693	)			(92,087	)			(96,670	)			(25,448	)			(71,222	)
Net losses of affiliates whose operations are not managed by the Company		2,615				670				1,945				6,820				1,795				5,025
Gain on sale of certain WGB websites		(3,483	)			(760	)			(2,723	)			—				—				—
Gain on sale of Pinna		—				—				—				(10,033	)			(2,641	)			(7,392	)
Non-operating loss (gain) from impairment, write-up and sales of cost method investments		744				191				553				(3,935	)			(1,008	)			(2,927	)
Net Income, adjusted (non-GAAP)									$	107,316											$	101,406
Per share information attributable to Graham Holdings Company Common Stockholders
Diluted income per common share, as reported									$	23.11											$	36.67
Adjustments:
Net credit related to fair value changes in contingent consideration from prior acquisitions										—												(0.95	)
Goodwill and intangible asset impairment charges										4.60												—
Charges related to non-operating Voluntary Retirement Incentive Program and Separation Incentive Programs										2.80												1.50
Interest expense related to the fair value adjustment of the mandatorily redeemable noncontrolling interest										14.13												0.05
Net gains on marketable equity securities										(20.59	)											(14.92	)
Net losses of affiliates whose operations are not managed by the Company										0.43												1.05
Gain on sale of certain WGB websites										(0.61	)											—
Gain on sale of Pinna										—												(1.55	)
Non-operating loss (gain) from impairment, write-up and sales of cost method investments										0.12												(0.61	)
Diluted income per common share, adjusted (non-GAAP)									$	23.99											$	21.24
The adjusted diluted per share amounts may not compute due to rounding.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240730170504/en/

Wallace R. Cooney

(703) 345-6470

Source: Graham Holdings Company

FAQ

What was Graham Holdings Company's (GHC) revenue for Q2 2024?

Graham Holdings Company's revenue for Q2 2024 was $1,185.3 million, up 7% from $1,105.0 million in Q2 2023.

How did GHC's operating income change in Q2 2024 compared to Q2 2023?

GHC's operating income decreased to $25.9 million in Q2 2024 from $58.1 million in Q2 2023, primarily due to impairment charges and declines in certain divisions.

What was Graham Holdings Company's (GHC) net income for Q2 2024?

GHC reported a net loss of $21.0 million for Q2 2024, compared to a net income of $122.8 million for Q2 2023.

Which divisions of Graham Holdings Company (GHC) showed growth in Q2 2024?

GHC reported growth in its education, healthcare, and automotive divisions in Q2 2024.