John Wiley & Sons(WLY) - 2025 Q3 - Quarterly Report

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].