Albert Anthony is the pen name of a Croatian-American media personality on investor platforms Investing.com and Seeking Alpha, where he has grown over +1K followers since 2023 and covers markets & stocks, and as of 2025 hosting an ongoing set of articles called Financial Markets: Growing A Dividend Income Portfolio. His new book of the same name is planned for a 2025 global launch on Amazon soon. A native of the NYC area, he has also called home Austin Texas where he worked as a management & information sys ...

Revenue Performance - For the three months ended January 31, 2025, revenue decreased by $56.1 million, or 12%, compared to the prior year, with Adjusted Revenue increasing by 1% on a constant currency basis[163][164]. - Digital products and services accounted for over 83% of total revenue for the year ended April 30, 2024, with 48% of revenue being recurring[158]. - Revenue for the nine months ended January 31, 2025, decreased by $169.5 million, or 12%, compared to the prior year[216]. - Total Learning Revenue for the three months ended January 31, 2025 decreased by 6% to $137.08 million compared to $146.33 million in 2024[206]. - Total Held for Sale or Sold Revenue decreased by $210.9 million, or 92%, compared to the prior year, primarily due to the sale of the University Services, Wiley Edge, and CrossKnowledge businesses[262]. Operating Income and Expenses - Operating income for the three months ended January 31, 2025, was $51.8 million, a significant increase from the prior year operating loss of $46.4 million[181]. - Operating and administrative expenses decreased by $23.4 million, or 9%, for the three months ended January 31, 2025, mainly due to lower employee-related costs[169]. - Operating income for the nine months ended January 31, 2025, was $144.9 million, an increase of $161.5 million compared to the prior year loss[234]. - Adjusted Operating Income on a constant currency basis increased by 38% compared to the prior year[235]. - Restructuring and related charges for the nine months ended January 31, 2025, were $13.1 million, compared to $52.0 million in the prior year[228]. Adjusted Metrics - Adjusted EBITDA for the three months ended January 31, 2025, was $93.9 million, an increase of 4% compared to the prior year[185]. - Adjusted EBITDA for the nine months ended January 31, 2025, increased by 12% compared to the prior year, primarily due to an increase in Adjusted Revenue[235]. - Adjusted EBITDA for the nine months ended January 31, 2025, increased by 5% on a constant currency basis, attributed to higher revenue and lower cost of sales[257]. - Adjusted EPS for the three months ended January 31, 2025 was $0.84, compared to $0.59 in the same period of 2024, reflecting a 39% increase on a constant currency basis[201]. - Adjusted Operating Income for the Learning segment increased by 37% for the nine months ended January 31, 2025, reflecting improved operational efficiency[258]. Impairments and Losses - The company recorded a goodwill impairment of $81.7 million in the three months ended January 31, 2024, impacting prior year results[171][172]. - The company recorded a goodwill impairment of $108.4 million for the nine months ended January 31, 2024[224]. - The total pretax loss on the sale of Wiley Edge was $34.2 million, with a net loss of $15.6 million recognized in the three months ended January 31, 2025[191]. - For the three months ended January 31, 2025, the net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale was $15.93 million, a decrease from $52.40 million in the same period of 2024[189]. - For the nine months ended January 31, 2025, the net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale was $9.76 million, a significant improvement from a loss of $179.75 million in the same period of 2024[242]. Taxation - The US GAAP effective tax rate for the three months ended January 31, 2025 was 222.9%, compared to (1.4)% for the same period in 2024, primarily due to US ordinary losses with no tax benefit recognized[198]. - The US GAAP effective tax rate for the nine months ended January 31, 2025, was 82.3%, significantly higher than 6.4% in the prior year, primarily due to ordinary losses with no tax benefit recognized[251]. - The Non-GAAP Adjusted Effective Tax Rate was 22.7% for the nine months ended January 31, 2025, down from 24.4% in the prior year, mainly due to the mix of income and a discrete item related to the release of a tax reserve[252]. Cash Flow and Debt - As of January 31, 2025, the company had cash and cash equivalents of $104.5 million, with approximately all located outside the US[268]. - The company had approximately $887.2 million of debt outstanding as of January 31, 2025, with $415.6 million of unused borrowing capacity under its credit facilities[270]. - Net cash provided by operating activities increased to $52.3 million for the nine months ended January 31, 2025, compared to $24.4 million for the same period in 2024[272]. - Free cash flow less product development spending was $(1.15) million for the nine months ended January 31, 2025, compared to $(45.25) million in the prior year[274]. - Net cash used in investing activities was $69.7 million for the nine months ended January 31, 2025, a decrease from $78.5 million in the prior year[280]. Foreign Exchange and Market Risks - Net foreign exchange transaction losses were $(4.2) million for the three months ended January 31, 2025, primarily due to fluctuations in foreign currency exchange rates[187]. - Net foreign exchange transaction losses for the nine months ended January 31, 2025, were $(7.3) million, primarily due to foreign currency denominated intercompany accounts[240]. - The company recorded foreign currency translation losses of approximately $(32.2) million during the three months ended January 31, 2025, primarily due to fluctuations in the US dollar relative to the British pound sterling[290]. - The company recorded foreign currency translation gains of approximately $10.7 million during the nine months ended January 31, 2025, primarily due to fluctuations of the US dollar relative to the euro[290]. - The company is exposed to market risks related to interest rates, foreign exchange, and credit risk, and uses derivative financial instruments to manage these exposures[285]. Other Financial Metrics - Interest expense increased to $14.0 million for the three months ended January 31, 2025, compared to $13.3 million in the prior year due to a higher effective interest rate[186]. - Interest expense for the nine months ended January 31, 2025, was $41.3 million, an increase from $37.6 million in the prior year[239]. - A hypothetical one percent change in interest rates for the $387.7 million of unhedged variable rate debt would affect net income and cash flow by approximately $3.0 million[287]. - The quarterly dividend to shareholders was increased to $1.41 per share annualized, compared to $1.40 per share in the prior year[282]. - Subscription agents account for approximately 16% of total annual consolidated revenue, with no single group accounting for more than 10%[295].

John Wiley & Sons (WLY) Q3 2025 Earnings Call March 07, 2025 12:00 PM ET Company Participants Brian Campbell - VP - IRMatthew Kissner - President & CEOChristopher Caridi - Interim CFO, Senior VP, Chief Accounting Officer & Global Corporate ControllerDaniel Moore - Partner - Director of ResearchJay Flynn - EVP & General Manager of Research Conference Call Participants Sami Kassab - Equity Research Analyst Operator Good morning, and welcome to wireless Q3 Fiscal twenty twenty five Earnings Call. As a reminder ...

Revenue Performance - Third quarter reported revenue was $405 million, down from $461 million, with Adjusted Revenue (excluding divestitures) increasing by 1.2% at constant currency[5]. - Year-to-date reported revenue reached $1,235 million, compared to $1,405 million, with Adjusted Revenue (excluding divestitures) up 3.5% at constant currency[5]. - Research revenue for the third quarter was $268 million, up 4% as reported and 5% at constant currency, driven by growth in open access, solutions, and AI licensing[6]. - Total revenue for the three months ended January 31, 2025, was $404.626 million, a decrease of 12% compared to $460.705 million in the same period of 2024[39]. - Research Publishing revenue for the three months ended January 31, 2025, was $225.874 million, up 4% from $216.586 million in 2024[39]. - Learning segment revenue for the nine months ended January 31, 2025, was $422.910 million, a 5% increase from $404.594 million in 2024[43]. Earnings and Profitability - Adjusted EBITDA for the third quarter was $88 million, an increase of 11% as reported and 12% at constant currency, with a margin rise to 32.7%[6]. - Adjusted EPS for the third quarter was $0.84, up 39% at constant currency, while GAAP EPS was a loss of ($0.43), improved from a loss of ($2.08) in the prior year[11]. - Non-GAAP adjusted earnings per share for the three months ended January 31, 2025, was $0.84, compared to $0.59 for the same period in 2024[25]. - Non-GAAP Adjusted EBITDA for the nine months ended January 31, 2025, was $272.031 million, an increase of 12% from $243.598 million in the same period of 2024[43]. - Non-GAAP Adjusted Operating Income for the nine months ended January 31, 2025, increased by 37% to $161.586 million from $117.659 million in 2024[43]. - Adjusted EBITDA margin for the nine months ended January 31, 2025, improved to 22.3% from 20.7% in the same period of 2024[43]. Cash Flow and Financial Position - Free Cash Flow for Fiscal 2025 is reaffirmed at approximately $125 million, representing a growth of about 10% over the prior year[11]. - Year-to-date Cash from Operations increased by 115% to $52 million, with Free Cash Flow improving by $44 million[5]. - Net cash provided by operating activities increased to $52,250 for the nine months ended January 31, 2025, compared to $24,352 in the prior year, marking a growth of approximately 114.4%[48]. - Free cash flow less product development spending was $(1,151) for the nine months ended January 31, 2025, an improvement from $(45,247) in the same period of 2024[49]. - Cash and cash equivalents at the end of the period were $104,560, slightly down from $108,907 at the end of the previous year[48]. Debt and Liabilities - Total current liabilities decreased to $717,258 as of January 31, 2025, from $873,282 as of April 30, 2024, reflecting a reduction of approximately 18%[45]. - Long-term debt increased to $877,205 as of January 31, 2025, compared to $767,096 as of April 30, 2024, indicating an increase of about 14.4%[45]. Strategic Initiatives and Outlook - The company reaffirmed its Fiscal 2025 outlook for Adjusted Revenue in the range of $1,650 million to $1,690 million, and Adjusted EBITDA in the range of $385 million to $410 million[7]. - Fiscal 2026 margin target has been raised to over 25% from a previous range of 24-25%[12]. - The company executed two significant recurring revenue agreements in India and Brazil, expanding access to over 6,000 and 430 institutions, respectively[6]. - The company has not provided a 2025 outlook for the most directly comparable US GAAP financial measures due to high variability and complexity[56]. - Management emphasizes the use of non-GAAP performance measures to provide additional insights into operational trends and financial performance[52]. Losses and Impairments - The company recognized a net loss of $15.6 million for Wiley Edge due to changes in fair value[20]. - The company recorded pretax noncash goodwill impairments of $108.4 million in fiscal year 2024, including $81.7 million related to Wiley Edge[22]. - The company incurred a net pretax loss on the sale of businesses and assets of $15.9 million for the three months ended January 31, 2025[32]. - The company reported a net loss on sale of businesses and assets of $9,760 for the nine months ended January 31, 2025, compared to $179,747 in the prior year[48]. - For the three months ended January 31, 2025, John Wiley & Sons reported a net loss of $22.954 million compared to a net loss of $113.875 million for the same period in 2024[35].

Revenue Performance - For the three months ended October 31, 2024, consolidated revenue was $426.6 million, a decrease of 13% compared to the prior year, primarily due to divested businesses[186]. - Adjusted revenue, excluding the Held for Sale or Sold segment, increased by 3% on a constant currency basis, reaching $423.4 million[188]. - Research revenue for the three months ended October 31, 2024, increased by $4.2 million, or 2%, compared to the prior year, with a constant currency increase of 1%[232]. - Total research revenue for the three months ended October 31, 2024, was $261,885 million, with Research Publishing revenue at $222,667 million and Research Solutions revenue at $39,218 million[231]. - Learning revenue increased by $12.6 million, or 8%, compared to the prior year, with a constant currency increase of 7%[236]. - Total Research Revenue for the six months ended October 2024 was $527.2 million, a 2% increase from $515.5 million in the prior year[292]. - Learning Revenue rose to $285.8 million, an 11% increase compared to $258.3 million in the previous year[296]. Operating Income and Expenses - Operating income for the same period was $64.1 million, reflecting a 39% increase compared to the prior year, driven by lower costs of sales and restructuring charges[205]. - Operating and administrative expenses decreased by $13.4 million, or 5%, to $238.9 million, mainly due to lower employee-related costs[195]. - Adjusted Operating Income for the three months ended October 31, 2024, was $59,527 million, reflecting a 1% increase compared to the prior year[231]. - Operating income for the six months ended October 31, 2024, increased by $63.2 million compared to the prior year, primarily due to lower costs of sales and restructuring charges[264]. - Adjusted Operating Income increased by 46% on a constant currency basis compared to the prior year[265]. EBITDA and Adjusted Metrics - Adjusted EBITDA for the three months ended October 31, 2024, was $105.5 million, a 14% increase compared to the prior year[208]. - Adjusted EBITDA for the six months ended October 31, 2024, was $178.2 million, an increase from $152.1 million in the prior year, reflecting a significant recovery[269]. - Adjusted EBITDA for Learning increased by 34% to $100.6 million, driven by revenue performance[298]. - Adjusted EBITDA increased by 23% on a constant currency basis, primarily due to revenue performance and a decrease in employee costs[237]. Net Income and Earnings Per Share - For the six months ended October 31, 2024, the company reported a net income of $39.0 million compared to a net loss of $111.7 million for the same period in 2023[269]. - The diluted earnings per share for the three months ended October 31, 2024, was $0.74, compared to a loss per share of $(0.35) for the same period in 2023[226]. - Diluted earnings per share for the six months ended October 31, 2024, was $0.71, a significant improvement from a loss per share of $(2.02) in the same period of 2023[288]. - Non-GAAP Adjusted EPS for the three months ended October 31, 2024, was $0.97, compared to $0.73 for the same period in 2023, representing a 36% increase on a constant currency basis[228]. - Non-GAAP Adjusted EPS increased to $1.44 from $0.99 year-over-year[290]. Cost Management and Restructuring - Cost of sales decreased by $48.6 million, or 31%, to $107.0 million, primarily due to the sale of University Services and lower employee costs related to Wiley Edge[192]. - The company anticipates annualized cost savings of approximately $80 million from its Global Restructuring Program, with $75 million expected to be realized in the current fiscal year[199]. - Restructuring charges for the six months ended October 31, 2024, were $7.5 million, down from $37.2 million in the prior year[258]. - Amortization of intangible assets decreased by $3.3 million, or 11%, compared to the prior year[263]. Divestitures and Asset Sales - The company completed the divestiture of non-core businesses, including University Services and Wiley Edge, to focus on its core operations in Research and Learning[181]. - For the three months ended October 31, 2024, the net gain on sale of businesses, assets, and impairment charges related to assets held-for-sale was $369 million, compared to a loss of $51,414 million in the same period of 2023[213]. - The company recognized a net gain of $0.8 million from the sale of Wiley Edge, which included $1.0 million in the three months ended October 31, 2024[215]. - The net gain on the sale of businesses, assets, and impairment charges related to assets held-for-sale was $6.2 million for the six months ended October 31, 2024, compared to a loss of $127.3 million in the prior year[274]. Interest and Foreign Exchange - Interest expense increased to $14.5 million for the three months ended October 31, 2024, compared to $12.9 million in the prior year, due to a higher effective interest rate[210]. - Interest expense increased to $27.3 million for the six months ended October 31, 2024, up from $24.3 million in the previous year, primarily due to a higher effective interest rate[270]. - Net foreign exchange transaction losses were $(3.3) million for the three months ended October 31, 2024, primarily due to changes in foreign exchange rates[211]. - The company recorded net foreign exchange transaction losses of $3.1 million for the six months ended October 31, 2024, compared to losses of $4.0 million in the same period of 2023[271][272]. - Foreign currency translation gains for the six months ended October 31, 2024 were approximately $42.9 million, compared to losses of $(22.7) million for the same period in 2023[332]. Cash Flow and Debt - Cash and cash equivalents as of October 31, 2024, were $75.5 million, primarily located outside the US[307]. - Total debt outstanding as of October 31, 2024, was approximately $961.0 million, with $344.3 million of unused borrowing capacity[309]. - Net cash used in operating activities for the six months ended October 31, 2024 was $(93.99) million, compared to $(83.49) million for the same period in 2023, reflecting a $10.5 million increase[316]. - Free cash flow less product development spending was $(130.15) million for the six months ended October 31, 2024, compared to $(131.98) million for the same period in 2023[315]. - Net cash used in investing activities decreased to $(44.49) million for the six months ended October 31, 2024, from $(51.92) million in the prior year, primarily due to a $11.3 million decrease in cash used for additions to technology, property, and equipment[322]. - Net cash provided by financing activities was $113.08 million for the six months ended October 31, 2024, down from $129.70 million in the same period of 2023, mainly due to lower net borrowings of $14.1 million[323]. Shareholder Returns and Stock Activity - The quarterly dividend increased to $1.41 per share annualized, compared to $1.40 per share annualized in the prior year[324]. - The company repurchased 556,000 shares of Class A common stock at an average price of $44.89 during the six months ended October 31, 2024, compared to 668,000 shares at an average price of $33.64 in the prior year[325]. Customer and Revenue Concentration - Subscription agents account for approximately 16% of total annual consolidated revenue, with no single group accounting for more than 10%[338]. - The top 10 book customers account for about 14% of total consolidated revenue and approximately 43% of accounts receivable as of October 31, 2024[339]. - No single book customer accounts for more than 7% of total consolidated revenue as of October 31, 2024[339]. - The company has minimal credit risk exposure to subscription agents currently, but future receipts depend on their financial condition[338]. - The company’s book business is not reliant on a single customer, indicating a diversified revenue stream[339].

Financial Data and Key Metrics Changes - Revenue increased by 3%, driven by a 7% growth in Learning and a 1% growth in Research [22][61] - Adjusted EBITDA rose by 14% to $106 million, with an adjusted EBITDA margin of 24.9%, up from 22.7% in the prior year [21][23] - Adjusted EPS increased by 36% due to higher adjusted operating income and accrued interest income from divestitures [23][64] Business Line Data and Key Metrics Changes - Learning revenue grew by 7%, with academic up 5% and professional up 11% [53][54] - Research revenue grew by 1%, with growth in gold open access and institutional models offsetting declines in legacy print and licensing revenue [12][47] - Research Solutions revenue increased by 2%, driven by career centers and managed services [50] Market Data and Key Metrics Changes - The Indian government's One Nation, One Subscription program is expected to significantly expand access to journal content for over 6,000 research institutions [17][84] - Article submissions are growing faster in Asia compared to Western markets, with a return to mid-single-digit growth in Western markets [85][87] Company Strategy and Development Direction - The company is focusing on AI opportunities, with a $21 million rights project realized year-to-date and a healthy pipeline for pharma and R&D-centric companies [19][34] - Investments are being made to drive growth in Research and improve publishing efficiency, with a goal to exceed market growth of 3% to 4% [38][39] - The company is committed to continuous improvement and margin expansion, with a target adjusted EBITDA margin of 23% to 24% for the current fiscal year [64][71] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the full-year trajectory despite potential political impacts in the U.S. [8][9] - The company anticipates an uneven second half, with Q3 expected to be challenged and Q4 elevated due to strong momentum in Publishing and Solutions [58][61] - Full-year revenue is projected to be between $1.65 billion and $1.69 billion, with adjusted EBITDA expected to be in the range of $385 million to $410 million [61][64] Other Important Information - Leadership changes include the appointment of Chris Caridi as Interim CFO and the elimination of the CTO position, combining technology and operations under one leader [25][26] - The company has completed all divestitures and is focusing on optimizing cost structures and improving capital efficiency [24][66] Q&A Session Summary Question: Momentum in the learning business - Management expressed optimism about achieving guidance, driven by performance in learning, particularly in zyBooks and new content acquisition [76][80] Question: Trends in article submissions and the India agreement - Management highlighted the potential impact of the One Nation, One Subscription agreement in India and noted growth in article submissions, especially in Asia [81][84][87] Question: Cost reduction opportunities - Management sees opportunities across the board, particularly in technology and shared services, with a focus on continuous margin improvement [89][92] Question: Update on collections from divested businesses - Management anticipates receiving funds owed from divested businesses but does not have a specific timeline [94][96] Question: Capital allocation priorities - Management plans to maintain a balanced approach to capital allocation, focusing on debt reduction and future growth investments [98][99] Question: Plans for Investor Relations outreach - Management is evaluating the timing for an Investor Day to share updates on the new leadership team and ongoing initiatives [100][101]

Revenue Performance - Revenue for the second quarter was $427 million, down from $493 million in the prior year, primarily due to foregone revenue from divested businesses[3] - Adjusted Revenue at constant currency was $423 million, reflecting a 3% increase, with Adjusted Operating Income of $69 million, up 32%[3] - Learning segment revenue increased by 8% to $162 million, with Professional growth at 11% and Academic growth at 5%[6] - Research segment revenue was $262 million, up 2%, driven by strong growth in gold open access and improved solutions performance[5] - Revenue for the three months ended October 31, 2024, was $426.6 million, a decrease of 13.4% from $492.8 million in the same period last year[20] - Consolidated revenue for the three months ended October 31, 2024, was $426.595 million, a decrease of 13% from $492.808 million in the same period last year[43] - Adjusted revenue, net for the three months ended October 31, 2024, was $423.399 million, reflecting a 4% increase from $406.610 million year-over-year[43] - Total revenue for the Research segment for the three months ended October 31, 2024, was $261.885 million, a 2% increase from $257.670 million in the same period last year[43] - Learning segment revenue for the three months ended October 31, 2024, reached $161.514 million, an 8% increase compared to $148.940 million in the prior year[43] Earnings and Income - GAAP EPS was $0.74, a significant improvement from a loss of ($0.35) in the prior year, while Adjusted EPS rose 36% to $0.97[9] - Net income for the three months ended October 31, 2024, was $40.5 million, compared to a net loss of $19.4 million in the same period last year[20] - Basic earnings per share for the three months ended October 31, 2024, was $0.75, compared to a loss of $0.35 in the same period last year[20] - Non-GAAP Adjusted Earnings Per Share (EPS) for the three months ended October 31, 2024, was $0.97, compared to $0.73 for the same period in 2023, representing a 33% increase[29] - US GAAP Income (Loss) Before Taxes for the six months ended October 31, 2024, was $71.94 million, a significant improvement from a loss of $128.75 million in the same period of 2023[29] - Net income for the six months ended October 2024 was $39,022, compared to a loss of $111,709 for the same period in 2023[54] Cash Flow and Expenses - Free Cash Flow less Product Development Spending was a use of $130 million, slightly improved from $132 million in the prior year[10] - The company allocated $64 million toward dividends and share repurchases, up from $61 million in the prior year[10] - Total costs and expenses for the three months ended October 31, 2024, were $362.5 million, down from $446.6 million in the prior year[20] - The company reported a restructuring charge of $3.627 million for the three months ended October 31, 2024, compared to $25.102 million in the same period last year, indicating an 86% decrease[43] - Net cash used in operating activities increased to $(93,992) for the six months ended October 2024, up from $(83,486) in 2023[54] - Free cash flow less product development spending was $(130,149) for the six months ended October 2024, slightly improved from $(131,975) in 2023[54] - Net cash used in investing activities decreased to $(44,489) for the six months ended October 2024, compared to $(51,917) in 2023[54] - Net cash provided by financing activities was $113,083 for the six months ended October 2024, down from $129,702 in 2023[54] Divestitures and Impairments - The company recognized a pretax loss of $51.5 million from the sale of CrossKnowledge, with cumulative impairment charges of $51.0 million related to this divestiture[22] - The company completed the sale of Wiley Edge with a total pretax loss of $18.6 million, recognizing a net gain of $0.8 million in the six months ended October 31, 2024[23] - The company recognized a net gain of $0.8 million from the sale of Wiley Edge, following a pretax loss of $18.6 million related to the transaction[31] - A held-for-sale pretax impairment charge of $34.8 million was recorded for University Services in the three months ended October 31, 2023[35] - The company reported a reduction in the pretax loss on the sale of its Tuition Manager business to $1.5 million for the three months ended October 31, 2023[33] Taxation - The effective tax rate for the three months ended October 31, 2024, was 17.3%, compared to 11.7% in the same period last year[20] - The effective tax rate for US GAAP was 17.3% for the six months ended October 31, 2024, compared to 11.7% for the same period in 2023[29] - Non-GAAP Adjusted Effective Tax Rate was 23.1% for the six months ended October 31, 2024, compared to 23.7% for the same period in 2023[29] Segment Performance - Adjusted EBITDA for the second quarter was $106 million, a 14% increase, with an Adjusted EBITDA margin of 31.3%[5] - Non-GAAP adjusted operating income rose to $104,181, reflecting a 45% increase from $71,626 in the previous year[48] - Total revenue for Research Publishing was $453,618, up 2% from $442,743, while Research Solutions revenue increased by 1% to $73,576[48] - Academic revenue in the Learning segment surged by 13% to $154,752, and Professional revenue increased by 8% to $131,076[48] - Non-GAAP adjusted EBITDA for the Learning segment was $100,562, a 34% increase from $75,064[48] - The adjusted EBITDA margin for the Learning segment improved to 35.2%, up from 29.1%[48] - Non-GAAP Adjusted Operating Income for the Learning segment increased by 40% to $55.871 million from $39.912 million year-over-year[43] - Adjusted EBITDA margin for the Learning segment improved to 41.3% from 36.2% in the previous year[43] Balance Sheet and Assets - Current assets decreased to $370,313 from $454,042, primarily due to a reduction in accounts receivable[51] - Total liabilities decreased to $1,853,603 from $1,985,779, with a notable reduction in current liabilities[51] - Cash and cash equivalents as of October 31, 2024, were $75,536, down from $83,249[51] - Cash, cash equivalents, and restricted cash at the end of the period were $75,586, a decrease from $99,618 at the end of 2023[54] - Additions to technology, property, and equipment were $(29,030) for the six months ended October 2024, compared to $(40,321) in 2023[54] - Amortization of intangible assets was $25,871 for the six months ended October 2024, down from $29,213 in 2023[54] - The company reported a net change in operating assets and liabilities of $(245,879) for the six months ended October 2024, compared to $(241,415) in 2023[54] Miscellaneous - The company reaffirmed its Fiscal 2025 growth outlook, projecting Adjusted Revenue between $1,650 million and $1,690 million[12] - The projected growth in the second half of the fiscal year is expected to occur in Q4 due to strong momentum in Research[12] - The company has historically provided non-GAAP performance measures to supplement its financial results, which may not be comparable to similar measures used by other companies[64]

Financial Performance - Consolidated revenue for the three months ended July 31, 2024, was $403.8 million, a decrease of 10% compared to the prior year[129] - Adjusted revenue, excluding the Held for Sale or Sold segment, increased by 6% on a constant currency basis to $389.6 million[130] - Operating income for the same period was $29.0 million, compared to an operating loss of $16.4 million in the prior year[139] - Adjusted EBITDA increased by 22% on a constant currency basis to $72.6 million[140] - Cost of sales decreased by 30% to $109.2 million, primarily due to the sale of non-core businesses[132] - Operating and administrative expenses decreased by 3% to $248.8 million, reflecting lower employee-related costs[133] - The company recorded a goodwill impairment of $26.7 million in the prior year, impacting financial results[134] - The Global Restructuring Program is expected to yield annualized cost savings of approximately $75 million, with $70 million realized in the current fiscal year[136] - Interest expense increased to $12.8 million from $11.3 million in the prior year due to a higher effective interest rate[143] - US GAAP Income (Loss) Before Taxes for the three months ended July 31, 2024 was $23.0 million, compared to a loss of $106.7 million for the same period in 2023[153] - The Non-GAAP Adjusted Effective Tax Rate was 23.6% for the three months ended July 31, 2024, slightly down from 23.8% for the same period in 2023[157] - Diluted loss per share improved to $(0.03) for the three months ended July 31, 2024, compared to $(1.67) for the same period in 2023[158] Revenue Breakdown - Research revenue increased by $7.5 million, or 3%, for the three months ended July 31, 2024, driven by growth in Research Publishing[161] - Total Learning Revenue increased by $15.0 million, or 14%, compared to the prior year, driven by a $21 million content rights project for training GenAI models[165] - Revenue for Held for Sale or Sold decreased by $69.7 million, or 83%, due to the sale of University Services and Wiley Edge businesses[169] Cash Flow and Debt - As of July 31, 2024, the company had cash and cash equivalents of $89.4 million, including $6.8 million classified as held-for-sale[174] - The company had approximately $918.6 million of debt outstanding as of July 31, 2024, with $388.1 million of unused borrowing capacity[176] - Free cash flow less product development spending was $(106.6) million for the three months ended July 31, 2024, compared to $(106.2) million in the prior year[179] - Net cash used in operating activities was $(88.7) million for the three months ended July 31, 2024, compared to $(82.3) million in the prior year[178] - Net cash used in investing activities decreased to $23.8 million for the three months ended July 31, 2024, from $25.7 million in the prior year[185] - Net cash provided by financing activities decreased to $101.6 million for the three months ended July 31, 2024, from $105.8 million in the prior year, primarily due to a $2.5 million increase in cash used for share repurchases and a $1.7 million decrease in net borrowings[186] Impairments and Losses - The company recorded pretax gains (losses) on sale of businesses and impairment charges related to assets held-for-sale totaling $5.8 million for the three months ended July 31, 2024, compared to a loss of $75.9 million for the same period in 2023[147] - The pretax loss on the sale of Wiley Edge was $19.6 million, with cumulative impairment charges of $19.4 million recognized in the year ended April 30, 2024[148] - The pretax loss on the sale of University Services was $105.6 million, reduced by $1.5 million due to working capital adjustments in the first quarter of fiscal year 2025[149] - As of July 31, 2024, the total impairment charge for CrossKnowledge was $51.0 million, including a reduction of $4.4 million in the three months ended July 31, 2024[150] Shareholder Returns - Quarterly dividend increased to $1.41 per share annualized compared to $1.40 per share in the prior year[186] - Class A shares repurchased totaled 295,000 at an average price of $42.34, down from 301,000 shares at an average price of $33.25 in the prior year[186] Other Financial Metrics - Negative working capital was $296.0 million as of July 31, 2024, a decrease of $123.2 million from April 30, 2024, primarily due to seasonality[183] - Foreign exchange transaction losses amounted to $1.6 million for the three months ended July 31, 2023, primarily due to changes in average foreign exchange rates compared to the US dollar[145] - Foreign currency translation gains were approximately $15.0 million for the three months ended July 31, 2024, compared to $11.2 million in the prior year, primarily due to fluctuations in the US dollar relative to the British pound sterling[191] - A hypothetical one percent change in interest rates for the $419.1 million of unhedged variable rate debt would affect net income and cash flow by approximately $3.2 million[189] - Estimated sales return reserves could affect net income by approximately $0.6 million with a one percent change in the estimated sales return rate[194] - Subscription agents account for approximately 16% of total annual consolidated revenue, with no single group exceeding 10%[195] - No single book customer accounts for more than 7% of total consolidated revenue, while the top 10 book customers account for approximately 10% of total consolidated revenue[196] - Increase in inventories was $7,578,000 as of July 31, 2024, down from $7,833,000 in April 2024[194] - Print book sales return reserve net liability balance decreased to $13,480,000 from $14,448,000 in the previous period[194]

Financial Data and Key Metrics Changes - Adjusted revenue increased by 6% to $390 million, driven by 3% growth in research and 14% growth in learning, with a notable $17 million contribution from a content rights project [12][27] - Adjusted EBITDA rose 22% to $73 million, with an adjusted EBITDA margin of 18.6%, up from 16.3% [12][30] - Adjusted EPS increased by 74% due to higher adjusted operating income and accrued interest income from divestitures [12][30] Business Line Data and Key Metrics Changes - Research segment experienced a 3% revenue growth, with a strong recovery in submissions and output, reflecting a healthy demand environment [24][15] - Learning segment revenue rose 14%, primarily due to the GenAI project, while excluding this project, revenue declined by 1% [27][28] - Adjusted EBITDA for research increased by 1%, with a margin of 29.3%, compared to 29.8% in the prior year [26][30] Market Data and Key Metrics Changes - Global R&D spend increased by approximately 8% since 2022, reaching an estimated $2.53 trillion, expected to grow at 4% to 6% annually [15] - Healthy growth patterns returned in the U.S., EMEA, and Japan, with strong demand in high-growth markets like China and India [15][16] Company Strategy and Development Direction - The company is focused on executing its value creation plan, which includes driving growth in research and learning, optimizing content for AI, and modernizing systems [21][23] - The strategy includes leveraging AI growth opportunities and enhancing operational efficiencies across the organization [5][11] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery in research and the overall demand trends, emphasizing the importance of colleague engagement and execution [34][35] - The company reaffirmed its full-year guidance, projecting revenue of $1.65 billion to $1.69 billion, with adjusted EBITDA expected to be in the range of $385 million to $410 million [30][31] Other Important Information - The company completed its final divestiture, allowing it to focus on core operations and actioned the remaining $40 million of a $130 million cost savings program [21][22] - The company raised its dividend for the 31st consecutive year and increased share repurchases [9][12] Q&A Session Summary Question: Momentum in article submissions and potential organic growth in research revenue - Management noted that while there is a healthy pipeline of submissions, not all will convert to published articles, but they are optimistic about the long-term trajectory of submissions and published articles [38][40] Question: Further licensing agreements related to AI - Management confirmed ongoing discussions regarding additional licensing agreements and emphasized the quality of their content as attractive to AI model builders [42][43] Question: Expense management and profitability expectations - Management acknowledged some timing issues affecting expenses in Q1 but reaffirmed guidance for the rest of the year, indicating that normalization is expected [45][46]

Core Viewpoint - John Wiley & Sons reported mixed earnings for fiscal Q1 2025, with better-than-expected sales but disappointing earnings, leading to a significant drop in stock price [1][2]. Financial Performance - Analysts had forecasted adjusted earnings of $0.55 per share on sales of $387.4 million, but Wiley reported sales of $403.8 million and earnings of $0.47 per share [2]. - The reported profit of $0.47 was a non-GAAP figure; under GAAP, Wiley actually incurred a loss of $0.03 per share, although this was an improvement from a loss of $1.67 per share in the previous year [3]. - Overall sales declined by 10.5%, with the smallest division shrinking and the largest division only achieving 3% growth [4]. Business Segments - The research publications division experienced a solid 3% growth, while the academic courseware segment benefited from a 14% sales increase driven by generative artificial intelligence [3]. - The professional learning division, however, faced challenges, resulting in a 1% decline in sales [3]. Future Outlook - Wiley forecasts approximately 3% total sales growth for fiscal 2025, with both divisions expected to grow in the low single digits and research potentially growing in the mid-single digits [5]. - Adjusted earnings are projected to grow by about 23% to approximately $3.42 per share, exceeding Wall Street's expectations, and free cash flow is anticipated to increase by about 10% to $125 million [5]. Valuation Concerns - Despite the positive guidance, Wiley's stock is trading at a price-to-free cash flow ratio of nearly 19, which is considered expensive given the company's single-digit growth and significant net debt exceeding $800 million [6].