John Wiley & Sons(WLY) - 2025 Q4 - Annual Results

Executive Summary & Fiscal 2025 Highlights Wiley achieved strong Fiscal 2025 results, exceeding financial targets, driving profitable growth, and expanding margins and cash flow Management Commentary Wiley's President and CEO, Matthew Kissner, highlighted a strong year of execution, meeting or exceeding financial commitments, driving profitable growth, expanding margins and free cash flow, and extending into the corporate market through AI licensing and partnerships - Wiley delivered a strong year, meeting or exceeding financial commitments, driving profitable growth, expanding margins and free cash flow, and extending into the corporate market through AI licensing and partnerships[3] - The company's multi-year journey of continuous improvement and innovation is yielding material gains in profitable revenue growth, margin expansion, and cash generation[3] Key Financial & Operational Highlights Wiley exceeded Adjusted EPS guidance and achieved its Free Cash Flow outlook for Fiscal 2025, driven by significant profit margin expansion and growth in both Research and Learning segments - Exceeded Adjusted EPS guidance, delivered at top end of range for Adjusted EBITDA margin, and achieved Free Cash Flow outlook[7] - Delivered Revenue and Adjusted EBITDA margin growth in both Research and Learning segments[7] - Achieved Adjusted Operating Margin expansion of 300 basis points[7] AI Licensing Revenue (Fiscal 2024 vs. 2025) | Metric | Fiscal 2025 | Fiscal 2024 | | :----- | :---------- | :---------- | | AI Licensing Revenue | $40 million | $23 million | - Drove a 34% increase in share repurchases and raised dividend for the 31st consecutive year[7] Fiscal 2026 Outlook Wiley projects low to mid-single-digit Adjusted Revenue growth for Fiscal 2026, with increased Adjusted EBITDA Margin and Free Cash Flow Outlook Summary Wiley projects low to mid-single-digit Adjusted Revenue growth for Fiscal 2026, with an increased Adjusted EBITDA Margin target of 25.5% to 26.5% and approximately $200 million in Free Cash Flow Fiscal 2026 Outlook | Metric | Fiscal 2024 Results | Fiscal 2025 Results | Fiscal 2026 Outlook | | :---------------- | :------------------ | :------------------ | :------------------ | | Adj. Revenue | $1,617M | $1,660M | Low to mid-single digit growth | | Adj. EBITDA Margin | 22.8% | 24% | 25.5% to 26.5% | | Adj. EPS | $2.78 | $3.64 | $3.90 to $4.35 | | Free Cash Flow | $114M | $126M | Approximately $200M | - The growth outlook is comprehensive and includes adverse variances, such as AI revenue in Fiscal 2025. Adjusted metrics exclude the impact of divestitures, primarily completed in Fiscal 2024 with the remainder in the first half of Fiscal 2025[13] Outlook Drivers The Fiscal 2026 outlook is driven by anticipated demand in Research Publishing, steady Academic market trends, and continued demand for content in AI development, partially offset by large prior-year AI agreements - Adjusted Revenue growth is driven by demand to publish and Calendar Year 2025 journal renewal growth in Research Publishing, steady market trends in Academic, and continued demand for content and data in AI development, partially offset by large AI agreements in the prior year[18] - Adjusted EBITDA Margin target was raised to 25.5% to 26.5%, driven by anticipated cost savings, efficiency gains, and revenue growth[18] - Adjusted EPS growth is expected from higher Adjusted Operating Income[18] - Free Cash Flow growth is driven by expected Adjusted EBITDA growth, lower restructuring payments, and favorable working capital[18] Segment Performance Research and Learning segments showed growth in Fiscal 2025, while divestitures impacted the Held for Sale segment Research Segment The Research segment demonstrated solid growth in Fiscal 2025, with both Q4 and full-year revenue and Adjusted EBITDA increasing Research Segment Performance (Q4 FY2025 vs. FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Reported Change | Constant Currency Change | | :-------------------- | :-------- | :-------- | :-------------- | :----------------------- | | Total Revenue, net | $280,721 | $271,032 | 4 % | 3 % | | Non-GAAP Adjusted EBITDA | $97,471 | $93,795 | 4 % | 4 % | | Adjusted EBITDA margin | 34.7 % | 34.6 % | | | Research Segment Performance (Full Year FY2025 vs. FY2024) | Metric | FY2025 | FY2024 | Reported Change | Constant Currency Change | | :-------------------- | :------- | :------- | :-------------- | :----------------------- | | Total Revenue, net | $1,075,459 | $1,042,705 | 3 % | 3 % | | Non-GAAP Adjusted EBITDA | $344,882 | $331,185 | 4 % | 5 % | | Adjusted EBITDA margin | 32.1 % | 31.8 % | | | - Q4 Research revenue growth was driven by solid growth in recurring revenue publishing models (calendar year 2025 journal renewals) and open access, offsetting continued softness in backfiles, archives, and other ancillary products[8] - Full year Research revenue was driven by growth in publishing and solutions. Key performance indicators remained strong, with submissions up 19% and output up 8%[8] Learning Segment The Learning segment experienced a Q4 revenue decline due to a large prior-year AI licensing agreement, partially offset by growth in Academic and new AI licensing revenue Learning Segment Performance (Q4 FY2025 vs. FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Reported Change | Constant Currency Change | | :-------------------- | :-------- | :-------- | :-------------- | :----------------------- | | Total Revenue, net | $161,858 | $170,145 | -5 % | -5 % | | Non-GAAP Adjusted EBITDA | $69,663 | $74,040 | -6 % | -6 % | | Adjusted EBITDA margin | 43.0 % | 43.5 % | | | Learning Segment Performance (Full Year FY2025 vs. FY2024) | Metric | FY2025 | FY2024 | Reported Change | Constant Currency Change | | :-------------------- | :------- | :------- | :-------------- | :----------------------- | | Total Revenue, net | $584,768 | $574,739 | 2 % | 2 % | | Non-GAAP Adjusted EBITDA | $218,750 | $200,429 | 9 % | 9 % | | Adjusted EBITDA margin | 37.4 % | 34.9 % | | | - Q4 Learning revenue was down due to a $23 million AI licensing agreement in the prior year, partially offset by growth in Academic and additional AI licensing revenue this quarter[8] - Full year Learning revenue was up 2% as reported and at constant currency, driven by growth in Academic and AI licensing[8][9] Corporate Expenses Corporate Expenses, representing unallocated shared services costs, declined in Q4 due to lower depreciation and amortization - Q4 Corporate Expenses declined by 8% (7% at constant currency) due to lower depreciation and amortization, or 3% on an Adjusted EBITDA basis at constant currency due to restructuring savings[17] - Full year Corporate Expenses declined by 3% as reported and at constant currency due to lower depreciation and amortization, but rose 2% on an Adjusted EBITDA basis at constant currency due to enterprise modernization[17] Held for Sale or Sold Segment The 'Held for Sale or Sold' segment reflects the impact of divestitures of non-core businesses, including University Services, Wiley Edge, and CrossKnowledge, which significantly reduced revenue and shifted to an Adjusted Operating Loss for the full year Fiscal 2025 - In fiscal year 2024, Wiley executed a plan to divest non-core businesses, including University Services, Wiley Edge, and CrossKnowledge, which met held-for-sale criteria starting in Q1 FY2024[24] - The sale of University Services was completed on January 1, 2024, with $119.5 million in cash proceeds received in June 2025[25] - The sale of Wiley Edge was completed on May 31, 2024 (excluding India operations, sold Aug 31, 2024), resulting in a net loss of $14.9 million in FY2025 primarily due to reducing the fair value of contingent consideration to zero[26] Held for Sale or Sold Segment Performance (Full Year FY2025 vs. FY2024) | Metric | FY2025 | FY2024 | Reported Change | | :-------------------------- | :------- | :------- | :-------------- | | Total Revenue, net | $17,382 | $255,543 | -93 % | | Non-GAAP Adjusted Operating (Loss) Income | $(3,578) | $28,711 | | | Non-GAAP Adjusted EBITDA | $(3,578) | $32,148 | | | Adjusted EBITDA margin | -20.6 % | 12.6 % | | Consolidated Financial Results (GAAP) Wiley reported a significant GAAP net income turnaround in Fiscal 2025, driven by higher operating income and reduced losses from asset sales Condensed Consolidated Statements of Net Income (Loss) Wiley reported a significant turnaround in GAAP net income for Fiscal 2025, moving from a net loss in the prior year to a net income of $84.161 million Condensed Consolidated Statements of Net Income (Loss) (Q4 and Full Year FY2025 vs. FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Full Year FY2025 | Full Year FY2024 | | :-------------------------------- | :-------- | :-------- | :--------------- | :--------------- | | Revenue, net | $442,579 | $468,461 | $1,677,609 | $1,872,987 | | Operating income | $76,472 | $68,782 | $221,409 | $52,261 | | Income (loss) before taxes | $52,265 | $54,002 | $142,878 | $(187,047) | | Net income (loss) | $68,093 | $25,265 | $84,161 | $(200,319) | | Diluted EPS | $1.25 | $0.46 | $1.53 | $(3.65) | Notes to Consolidated Statements The notes provide crucial context to the consolidated financial statements, detailing the impact of divestitures, goodwill impairment, and the calculation of diluted EPS, which significantly influenced the reported net income and loss figures Net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale Net Pretax Loss on Sale of Businesses, Assets, and Impairment Charges (Q4 and Full Year FY2025 vs. FY2024) | Business | Q4 FY2025 | Q4 FY2024 | Full Year FY2025 | Full Year FY2024 | | :---------------------------------------------------------- | :-------- | :-------- | :--------------- | :--------------- | | Wiley Edge | $(74) | $1,275 | $(14,852) | $(19,401) | | University Services | $(13,428) | $(5,636) | $(12,578) | $(107,048) | | CrossKnowledge | $(78) | $719 | $4,119 | $(55,440) | | Tuition Manager | — | — | $120 | $(1,500) | | Sale of assets | — | — | $(149) | — | | Total Net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale | $(13,580) | $(3,642) | $(23,340) | $(183,389) | - The company executed a plan to divest non-core businesses (University Services, Wiley Edge, CrossKnowledge) in FY2024, with related losses and impairments recorded in both FY2024 and FY2025[24] - After the year closed, Wiley received $120 million in cash proceeds related to the University Services divestiture, with the total outstanding note paid in full[17] Impairment of goodwill - In fiscal year 2024, Wiley recorded pretax noncash goodwill impairments of $108.4 million due to segment reorganization, including $81.7 million related to Wiley Edge, $11.4 million related to University Services, and $15.3 million related to CrossKnowledge[28] Diluted Earnings (Loss) Per Share Note - For the year ended April 30, 2024, the diluted weighted average number of common shares outstanding excluded the effect of unvested restricted stock units and other stock awards as the effect was anti-dilutive due to a US GAAP net loss[29] Non-GAAP Financial Measures & Reconciliations Wiley provides comprehensive reconciliations from GAAP to Non-GAAP measures to clarify underlying business performance Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS Wiley provides a reconciliation from US GAAP EPS to Non-GAAP Adjusted EPS, which excludes the impact of items such as goodwill impairment, restructuring charges, foreign exchange losses, amortization of acquired intangibles, and net loss on sale of businesses, to offer a clearer view of underlying business performance Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS (Q4 and Full Year FY2025 vs. FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Full Year FY2025 | Full Year FY2024 | | :---------------------------------------------------- | :-------- | :-------- | :--------------- | :--------------- | | US GAAP Earnings (Loss) Per Share - Diluted | $1.25 | $0.46 | $1.53 | $(3.65) | | Adjustments: | | | | | | Impairment of goodwill | — | — | — | 1.90 | | Restructuring and related charges | 0.14 | 0.16 | 0.36 | 0.85 | | Foreign exchange losses on intercompany transactions | (0.01) | 0.01 | 0.08 | 0.02 | | Amortization of acquired intangible assets | 0.15 | 0.02 | 0.76 | 0.68 | | Net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale | 0.18 | 0.04 | 0.38 | 2.81 | | Held for Sale or Sold segment Adjusted Net (Income) Loss | — | (0.03) | 0.05 | (0.42) | | Income tax adjustments | (0.34) | 0.55 | 0.48 | 0.54 | | EPS impact of using weighted-average dilutive shares for adjusted EPS calculation | — | — | — | 0.05 | | Non-GAAP Adjusted Earnings Per Share - Diluted | $1.37 | $1.21 | $3.64 | $2.78 | Reconciliation of US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes The reconciliation from US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes adjusts for significant non-recurring or non-operational items, such as goodwill impairment, restructuring charges, and gains/losses from asset sales, providing a normalized view of pre-tax profitability Reconciliation of US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes (Q4 and Full Year FY2025 vs. FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Full Year FY2025 | Full Year FY2024 | | :------------------------------------------------------------------------------------------------ | :-------- | :-------- | :--------------- | :--------------- | | US GAAP Income (Loss) Before Taxes | $52,265 | $54,002 | $142,878 | $(187,047) | | Pretax Impact of Adjustments: | | | | | | Impairment of goodwill | — | — | — | 108,449 | | Restructuring and related charges | 12,490 | 11,008 | 25,561 | 63,041 | | Foreign exchange losses on intercompany transactions | — | 815 | 5,590 | 1,903 | | Amortization of acquired intangible assets | 12,908 | 13,324 | 51,864 | 57,874 | | Net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale | 13,580 | 3,642 | 23,340 | 183,389 | | Held for Sale or Sold segment Adjusted (Income) Loss Before Taxes | — | (2,409) | 3,578 | (30,661) | | Non-GAAP Adjusted Income Before Taxes | $91,243 | $80,382 | $252,811 | $196,948 | Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision This reconciliation adjusts the US GAAP income tax provision to a non-GAAP adjusted figure by accounting for the tax impact of various non-GAAP adjustments, such as goodwill impairment and restructuring charges, and also includes adjustments for valuation allowances and state tax rate changes, resulting in a more stable adjusted effective tax rate Reconciliation of US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision (Q4 and Full Year FY2025 vs. FY2024) | Metric | Q4 FY2025 | Q4 FY2024 | Full Year FY2025 | Full Year FY2024 | | :------------------------------------------------------------------------------------------------ | :-------- | :-------- | :--------------- | :--------------- | | US GAAP Income Tax (Benefit) Provision | $(15,828) | $28,737 | $58,717 | $13,272 | | Income Tax Impact of Adjustments: | | | | | | Impairment of goodwill | — | 255 | — | 2,953 | | Restructuring and related charges | 4,633 | 2,425 | 5,947 | 15,662 | | Foreign exchange losses on intercompany transactions | 571 | 471 | 1,170 | 582 | | Amortization of acquired intangible assets | 4,720 | 11,459 | 10,231 | 20,127 | | Net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale | 3,715 | 1,197 | 2,368 | 26,908 | | Held for Sale or Sold segment Adjusted Tax (Provision) Benefit | — | (622) | 807 | (7,140) | | Impact of valuation allowance on the US GAAP effective tax rate | 18,776 | (30,249) | (26,008) | (30,249) | | Impact of change in certain US state tax rates in 2025 | (117) | — | (117) | — | | Non-GAAP Adjusted Income Tax Provision | $16,470 | $13,673 | $53,115 | $42,115 | | US GAAP Effective Tax Rate | -30.3 % | 53.2 % | 41.1 % | -7.1 % | | Non-GAAP Adjusted Effective Tax Rate | 18.1 % | 17.0 % | 21.0 % | 21.4 % | - In fiscal year 2025, an additional $1.1 million and $1.4 million of cumulative translation adjustments were written off in earnings for the three months and year ended April 30, 2025, respectively, due to the formal liquidation of Russia operations[37] - In fiscal year 2024, a valuation allowance of $30.2 million was established due to US losses, and increased by $26.0 million in fiscal year 2025 due to an increase in the US net deferred tax asset[42] Reconciliation of US GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA This reconciliation provides a bridge from US GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA, adding back interest, taxes, depreciation, and amortization, along with other non-recurring items like goodwill impairment and divestiture-related losses, to present a measure of operational profitability before non-cash and non-operating impacts Reconciliation of US GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA (Q4 and Full Year FY2025 vs. FY22024) | Metric | Q4 FY2025 | Q4 FY2024 | Full Year FY2025 | Full Year FY2024 | | :------------------------------------------------------------------------------------------------ | :-------- | :-------- | :--------------- | :--------------- | | Net Income (Loss) | $68,093 | $25,265 | $84,161 | $(200,319) | | Interest expense | 11,270 | 11,411 | 52,547 | 49,003 | | (Benefit) provision for income taxes | (15,828) | 28,737 | 58,717 | 13,272 | | Depreciation and amortization | 36,681 | 47,613 | 147,126 | 176,989 | | Non-GAAP EBITDA | 100,216 | 113,026 | 342,551 | 38,945 | | Impairment of goodwill | — | — | — | 108,449 | | Restructuring and related charges | 12,490 | 11,008 | 25,561 | 63,041 | | Net foreign exchange transaction losses (gains) | 826 | (530) | 8,142 | 2,959 | | Net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale | 13,580 | 3,642 | 23,340 | 183,389 | | Other (income) expense, net | (1,469) | 257 | (5,498) | 3,957 | | Held for Sale or Sold segment Adjusted EBITDA | — | (2,409) | 3,578 | (32,148) | | Non-GAAP Adjusted EBITDA | $125,643 | $124,994 | $397,674 | $368,592 | | Adjusted EBITDA Margin | 28.4 % | 28.3 % | 24.0 % | 22.8 % | Explanation of Usage of Non-GAAP Performance Measures Wiley utilizes various non-GAAP financial measures to provide supplemental indicators of operating performance and financial position, believing they offer useful information for operational trends and comparisons by excluding non-controllable or non-recurring items - Management uses non-GAAP performance measures as supplemental indicators of operating performance and financial position, for internal reporting, forecasting, public outlook, and incentive compensation[59] - Non-GAAP measures provide useful information to investors and financial analysts for operational trends and comparisons over time by excluding the impact of restructuring charges, divestitures, and other items[60] - The performance metric used by the chief operating decision maker to evaluate reportable segments is Adjusted Operating Income, with Adjusted EBITDA providing additional useful information[61] - Non-GAAP performance measures do not have standardized meanings under US GAAP, may not be comparable to other companies, and should not be viewed as alternatives to US GAAP financial results[64] Balance Sheet, Cash Flow, and Capital Allocation Wiley's balance sheet shows slight asset/liability decrease, with increased Free Cash Flow and enhanced shareholder returns Condensed Consolidated Statements of Financial Position Wiley's balance sheet as of April 30, 2025, shows a slight decrease in total assets and liabilities compared to the prior year, primarily due to the divestiture of assets held-for-sale Condensed Consolidated Statements of Financial Position (April 30, 2025 vs. 2024) | Metric | April 30, 2025 | April 30, 2024 | | :-------------------------------- | :------------- | :------------- | | Total current assets | $439,884 | $454,042 | | Technology, property and equipment, net | $162,125 | $192,438 | | Intangible assets, net | $595,044 | $615,694 | | Goodwill | $1,121,505 | $1,091,368 | | Total assets | $2,691,466 | $2,725,495 | | Total current liabilities | $820,856 | $873,282 | | Long-term debt | $789,435 | $767,096 | | Total liabilities | $1,939,260 | $1,985,779 | | Shareholders' equity | $752,206 | $739,716 | | Total liabilities and shareholders' equity | $2,691,466 | $2,725,495 | - Net Debt-to-EBITDA Ratio was 1.8 compared to 1.7 in the year-ago period[11] Condensed Consolidated Statements of Cash Flows Wiley's net cash provided by operating activities slightly decreased in Fiscal 2025, primarily due to cloud-based solution spending, but Free Cash Flow increased by 10% to $126 million Condensed Consolidated Statements of Cash Flows (Full Year FY2025 vs. FY2024) | Metric | FY2025 | FY2024 | | :------------------------------------------ | :------- | :------- | | Net cash provided by operating activities | $202,591 | $207,638 | | Net cash used in investing activities | $(94,018) | $(106,643) | | Net cash used in financing activities | $(125,330) | $(107,221) | | Change in cash, cash equivalents and restricted cash for period | $(13,611) | $(7,719) | | Cash, cash equivalents and restricted cash - ending | $85,932 | $99,543 | | Free cash flow less product development spending | $125,890 | $114,296 | - Net Cash provided by Operating Activities was $203 million compared to $208 million, primarily due to spend on cloud-based solutions related to targeted enterprise modernization work[17] - Free Cash Flow was up 10% to $126 million, primarily driven by lower capex[17] Capital Allocation and Returns to Shareholders Wiley increased its allocation to shareholder returns in Fiscal 2025, with a significant rise in share repurchases and continued dividend payments - Wiley allocated $137 million toward dividends and share repurchases in FY2025, up from $122 million in the prior year[17] - $60 million was allocated to share repurchases at an average cost basis of $44.16, up from $45 million in the prior year period[17] - After the year closed, Wiley received $120 million in cash proceeds related to the University Services divestiture, with the total outstanding note paid in full[17] Company Information & Disclaimers This section provides details on Wiley's earnings call, company overview, and forward-looking statement disclaimers Earnings Conference Call Wiley scheduled its earnings conference call for June 17, 2025, at 10:00 am (ET), providing details for webcast and dial-in access for investors - Earnings conference call scheduled for June 17, 2025, at 10:00 am (ET), accessible via webcast at investors.wiley.com or direct link, and via dial-in for U.S. and international callers[14] About Wiley Wiley is a global leader in research and learning, providing industry-leading content, services, platforms, and knowledge networks to researchers, students, instructors, professionals, institutions, and corporations, with a mission to unlock human potential for over two centuries - Wiley (NYSE: WLY) is one of the world's largest publishers and a trusted leader in research and learning, offering industry-leading content, services, platforms, and knowledge networks[15] - The company serves researchers, students, instructors, professionals, institutions, and corporations, aiming to enable knowledge-seekers to transform obstacles into opportunities and unlock human potential[15] Forward-Looking Statements The release contains forward-looking statements regarding the company's operations, performance, and financial condition, which are subject to inherent uncertainties and contingencies - The release contains forward-looking statements concerning the Company's operations, performance, and financial condition, which are based on assumptions and estimates subject to uncertainties and contingencies[20] - Actual results may differ materially from those in any forward-looking statements due to various factors, including investment in new technologies, subscriber renewal rates, economic conditions, and the ability to protect intellectual property[20] - The Company undertakes no obligation to update or revise forward-looking statements to reflect subsequent events[20]