John Wiley & Sons(US:WLY)2024-09-05 15:22Revenue Performance - Revenue for Q1 2025 was $404 million, a decrease of 10% year-over-year, while adjusted revenue at constant currency was $390 million, an increase of 6%[2] - Total net revenue for the three months ended July 31, 2024, was $403,809,000, a decrease of 10% compared to $451,013,000 for the same period in 2023[30] - Adjusted revenue, net, excluding the held-for-sale segment, increased by 6% to $389,623,000 from $367,124,000 year-over-year[30] Segment Performance - Research segment revenue increased by 3% to $265 million, driven by growth in open access and institutional licensing models[3] - Learning segment revenue rose by 14% to $124 million, with a $16 million contribution from a GenAI content rights project[4] - The Learning segment's total net revenue increased by 14% to $124,314,000, driven by a 24% increase in Academic revenue[30] - Non-GAAP adjusted EBITDA for the Learning segment surged by 60% to $33,794,000 compared to $21,178,000 in the previous year[30] Earnings and Profitability - Adjusted EBITDA for Q1 2025 was $73 million, up 22% year-over-year, with an adjusted EBITDA margin of 18.7%[2] - Adjusted EPS for Q1 2025 was $0.47, reflecting a 74% increase at constant currency compared to the prior year[7] - Non-GAAP Adjusted Earnings Per Share (EPS) for the three months ended July 31, 2024, was $0.47, compared to $0.27 in the same period of 2023[20] - The company reported a Non-GAAP Adjusted EBITDA of $72.615 million for the three months ended July 31, 2024, with an adjusted EBITDA margin of 18.6%, up from 16.3% in the same period of 2023[28] Financial Outlook - The company reaffirmed its Fiscal 2025 revenue outlook of $1.65 billion to $1.69 billion, with expected adjusted EBITDA of $385 million to $410 million[10] - Capital expenditures for Fiscal 2025 are projected to be $130 million, up from $93 million in Fiscal 2024, to support research publishing platform work and infrastructure modernization[9] Debt and Cash Management - The net debt-to-EBITDA ratio at the end of the quarter was 2.0, compared to 1.9 in the previous year[8] - The company allocated $32 million towards dividends and share repurchases, an increase from $29 million in the prior year[8] - Cash and cash equivalents at the end of the period were $89,411,000, down from $107,256,000 at the end of the previous year[35] - Net cash used in operating activities for the three months ended July 31, 2024, was $(88,712) thousand, compared to $(82,335) thousand for the same period in 2023[36] Impairments and Losses - The company recorded a pretax noncash goodwill impairment of $26.7 million in fiscal year 2024, including $11.4 million for University Services and $15.3 million for CrossKnowledge[18] - The company recorded a pretax impairment of $51,000,000 related to CrossKnowledge, impacting the held-for-sale segment[33] - The US GAAP net loss for the three months ended July 31, 2024, was $1.436 million, a significant improvement from a net loss of $92.264 million in the same period of 2023[28] - The company completed the sale of Wiley Edge on May 31, 2024, resulting in a pretax loss of $19.6 million[25] - The company recorded a total pretax loss of $105.6 million on the sale of University Services in the three months ended July 31, 2024[25] Non-GAAP Measures - The company emphasizes the use of non-GAAP performance measures such as Adjusted EPS and Free Cash Flow less Product Development Spending for evaluating operational performance[37] - Adjusted Operating Income and Adjusted EBITDA are key metrics used to assess the performance of reportable segments, providing insights into operational trends[39] - Non-GAAP performance measures are regarded as useful by investors for analyzing operating margins and net income, despite not being standardized under US GAAP[41] - The company has not provided a 2025 outlook for the most directly comparable US GAAP financial measures due to high variability and complexity[41] - Non-GAAP financial metrics should not be viewed as alternatives to US GAAP measures and may not be comparable with similar measures used by other companies[42]