HMH Announces Strong Third Quarter 2021 Results; Delivers Billings Growth of 22%

HMH (Nasdaq: HMHC), a learning technology company, announced strong financial results for the third quarter which ended Sept. 30, 2021.

“Propelled by strong demand for our comprehensive portfolio of learning solutions, HMH delivered an impressive 22% year-over-year increase in third quarter billings. As a result of the continued momentum across our business, we are raising our full year guidance for the second time this year,” said Jack Lynch, President and Chief Executive Officer of HMH. “In just the last two years, we dramatically transformed our business, strengthened our balance sheet and significantly lowered our cost structure to drive incredibly strong free cash flow while successfully executing our digital first, connected strategy—we plan to build on this success.”

“HMH is now among the largest and fastest growing companies in the edtech market. Through execution of our digital first, connected strategy we have grown our connected billings substantially with ARR growing 123% to $120 million or 11% of trailing twelve-month billings,” added Lynch.

Highlights from the quarter include:
*Raising FY 2021 billings2 guidance to $1,075-$1,095 million, unlevered free cash flow guidance to 17-19% of billings and Annualized Recurring Revenue (ARR) 2 guidance to 12-15% of billings
*Strong billings growth across the Company of 22% in Q3 and 21% YTD as demand for teaching and learning solutions continued as students returned to classrooms this fall and teachers further assessed instructional needs for the remainder of the school year
*ARR2 growth accelerated to 123% bringing ARR to $120 million, or 11% of trailing twelve-month billings. Net Retention Rate (NRR)2 was 153%
*Trailing twelve-month free cash flow3 of $137 million, an improvement of $36 million compared to the second quarter of 2021, reflecting strong operating leverage and the benefits of 2020 actions to align HMH’s cost structure with its digital first, connected strategy
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