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

Executive Summary & Business Performance This section provides an overview of Wiley's financial performance, management commentary, segment-specific results, and capital allocation strategies for Fiscal 2025 Fiscal 2025 Highlights Wiley exceeded its Adjusted EPS guidance and achieved significant profit margin expansion and Free Cash Flow outlook in Fiscal 2025, driven by profitable growth in Research and Learning segments and increased AI licensing revenue - Exceeded Adjusted EPS guidance and delivered at the top end of the range for Adjusted EBITDA margin, while achieving Free Cash Flow outlook[7] - Achieved Adjusted Operating Margin expansion of 300 basis points[7] - Realized $40 million in total AI licensing revenue in Fiscal 2025, a significant increase from $23 million in Fiscal 2024[7] - Increased share repurchases by 34% and raised the dividend for the 31st consecutive year[7] Management Commentary President and CEO Matthew Kissner highlighted a strong year of execution, meeting or exceeding financial commitments, driving profitable core growth, expanding margins and free cash flow, and extending into the corporate market through AI licensing and science analytics - Achieved profitable revenue growth, margin expansion, and cash generation through continuous improvement and innovation[3] - Expanded into the corporate market via AI licensing and partnership, science analytics, and knowledge services[3] Segment Performance Overview (Q4 & Full Year) Wiley's Research segment showed consistent growth in revenue and Adjusted EBITDA for both Q4 and the full year, driven by publishing and solutions. The Learning segment experienced mixed results, with Q4 revenue impacted by prior year AI licensing, but full year growth driven by Academic and AI licensing Research Segment Performance Metric (Millions USD) | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change (Reported) | YoY Change (Constant Currency) | | :-------------------- | :-------- | :-------- | :-------------------- | :----------------------------- | | Revenue, net | $281 million | $271 million | +4% | +3% | | Adjusted EBITDA | $97 million | $94 million | +4% | +4% | | Adjusted EBITDA margin| 34.7% | 34.6% | +0.1 pp | | Metric (Millions USD) | Metric | Full Year FY2025 | Full Year FY2024 | YoY Change (Reported) | YoY Change (Constant Currency) | | :-------------------- | :--------------- | :--------------- | :-------------------- | :----------------------------- | | Revenue, net | $1,075 million | $1,043 million | +3% | +3% | | Adjusted EBITDA | $345 million | $331 million | +4% | +5% | | Adjusted EBITDA margin| 32.1% | 31.8% | +0.3 pp | | - Key performance indicators for Research remained strong, with submissions up 19% and output up 8% for the full year[8] Learning Segment Performance Metric (Millions USD) | Metric | Q4 FY2025 | Q4 FY2024 | YoY Change (Reported) | YoY Change (Constant Currency) | | :-------------------- | :-------- | :-------- | :-------------------- | :----------------------------- | | Revenue, net | $162 million | $170 million | -5% | -5% | | Adjusted EBITDA | $70 million | $74 million | -6% | -6% | | Adjusted EBITDA margin| 43.0% | 43.5% | -0.5 pp | | Metric (Millions USD) | Metric | Full Year FY2025 | Full Year FY2024 | YoY Change (Reported) | YoY Change (Constant Currency) | | :-------------------- | :--------------- | :--------------- | :-------------------- | :----------------------------- | | Revenue, net | $585 million | $575 million | +2% | +2% | | Adjusted EBITDA | $219 million | $200 million | +9% | +9% | | Adjusted EBITDA margin| 37.4% | 34.9% | +2.5 pp | | - Q4 Learning revenue was impacted by a $23 million AI licensing agreement in the prior year, partially offset by growth in Academic and additional AI licensing revenue this quarter[8] - Academic growth (excluding AI licensing) was driven by strong demand for inclusive access and digital courseware[8] Corporate Expenses - 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 - Wiley executed a plan to divest non-core businesses (University Services, Wiley Edge, CrossKnowledge) in fiscal year 2024, with sales completed in FY2024 and FY2025[24][25][26][27] - Received $120 million in cash proceeds related to the University Services divestiture after the year closed[17][25] Metric (Full Year, Millions USD) | Metric (Full Year) | FY2025 | FY2024 | YoY Change (Reported) | | :----------------- | :----- | :----- | :-------------------- | | Total Revenue, net | $17 million | $255 million | -93% | | Adjusted EBITDA | $(4 million) | $32 million | (Variance > 100%) | Balance Sheet, Cash Flow, and Capital Allocation Wiley maintained a healthy Net Debt-to-EBITDA ratio, improved Free Cash Flow, and increased returns to shareholders through dividends and share repurchases, while also receiving significant divestiture proceeds - Net Debt-to-EBITDA Ratio was 1.8, compared to 1.7 in the prior year[11] - Free Cash Flow increased by 10% to $126 million, primarily driven by lower capital expenditures[8][17] - Allocated $137 million toward dividends and share repurchases, up from $122 million in the prior year, with $60 million for share repurchases[17] - Received $120 million in cash proceeds related to the University Services divestiture after the year closed[17] Fiscal 2026 Outlook This section outlines Wiley's financial projections and key drivers for Fiscal Year 2026, anticipating continued growth and margin expansion Fiscal 2026 Outlook Summary Wiley provided a positive outlook for Fiscal Year 2026, projecting growth across key adjusted financial metrics, including revenue, EBITDA margin, EPS, and Free Cash Flow Fiscal 2026 Outlook | Metric | Fiscal 2024 Results | Fiscal 2025 Results | Fiscal 2026 Outlook | | :------------- | :------------------ | :------------------ | :------------------ | | Adj. Revenue | $1,617 million | $1,660 million | 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 | $114 million | $126 million | Approximately $200 million | Outlook Drivers The Fiscal 2026 outlook is driven by anticipated demand in Research Publishing, steady Academic market trends, continued demand for AI content, cost savings, efficiency gains, and favorable working capital - Adjusted Revenue growth is expected from demand to publish, Calendar Year 2025 journal renewal growth in Research Publishing, steady Academic market trends, and continued demand for content and data in AI development[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 anticipated Adjusted Operating Income[18] - Free Cash Flow growth is projected due to expected Adjusted EBITDA growth, lower restructuring payments, and favorable working capital[18] Company Information & Disclaimers This section provides essential company information, details on the earnings conference call, and important forward-looking statements and disclaimers About Wiley Wiley is a global leader in research and learning, providing industry-leading content, services, platforms, and knowledge networks to various customers, aiming to unlock human potential for over two centuries - Wiley is one of the world's largest publishers and a trusted leader in research and learning[15] - Offers industry-leading content, services, platforms, and knowledge networks tailored to researchers, students, instructors, professionals, institutions, and corporations[15] - Mission is to unlock human potential, transforming obstacles into opportunities[15] Earnings Conference Call Details for accessing Wiley's earnings conference call scheduled for June 17, 2025, at 10:00 am (ET) via webcast or dial-in - Conference call scheduled for June 17, 2025, at 10:00 am (ET)[14] - Webcast accessible at investors.wiley.com or directly via the provided link[14] - Dial-in options available for U.S. and international callers with a specific participant code[14] Forward-Looking Statements This section serves as a disclaimer, cautioning against undue reliance on forward-looking statements and outlining various factors that could cause actual results to differ materially from projections - Forward-looking statements are subject to inherent uncertainties and contingencies, many beyond the Company's control[20] - Factors influencing actual results include investment in new technologies, subscriber renewal rates, financial stability of agents, market position of online retailers, economic conditions, intellectual property protection, integration of acquisitions, operating savings, and cyber risks[20] - The Company undertakes no obligation to update or revise forward-looking statements[20] Consolidated Financial Statements (US GAAP) This section presents Wiley's consolidated financial statements prepared in accordance with US GAAP, including statements of net income, financial position, and cash flows Condensed Consolidated Statements of Net Income (Loss) The condensed consolidated statements of net income (loss) show Wiley's GAAP financial performance for the three months and full year ended April 30, 2025 and 2024, reflecting a significant improvement in net income and EPS in FY2025 compared to a net loss in FY2024 Condensed Consolidated Statements of Net Income (Loss) | 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 | | Net income (loss) | $68,093 | $25,265 | $84,161 | $(200,319) | | Diluted EPS | $1.25 | $0.46 | $1.53 | $(3.65) | - Operating income as a percentage of revenue increased from 14.7% to 17.3% in Q4 and from 2.8% to 13.2% for the full year[22] - Net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale significantly decreased from $183.4 million in FY2024 to $23.3 million in FY2025[22][24] Condensed Consolidated Statements of Financial Position The condensed consolidated statements of financial position show a slight decrease in total assets and liabilities, while shareholders' equity increased, indicating a stable financial structure as of April 30, 2025 Condensed Consolidated Statements of Financial Position | Metric | April 30, 2025 | April 30, 2024 | | :-------------------------- | :------------- | :------------- | | Total assets | $2,691,466 | $2,725,495 | | Total liabilities | $1,939,260 | $1,985,779 | | Shareholders' equity | $752,206 | $739,716 | - Current assets held-for-sale and non-current assets held-for-sale were reduced to zero in FY2025, reflecting the completion of divestitures[54] - Goodwill increased slightly to $1,121,505 thousand in FY2025 from $1,091,368 thousand in FY2024[54] Condensed Consolidated Statements of Cash Flows The condensed consolidated statements of cash flows indicate a slight decrease in net cash provided by operating activities, while net cash used in investing and financing activities also saw changes, with Free Cash Flow increasing due to lower capital expenditures Condensed Consolidated Statements of Cash Flows | Metric | Full Year FY2025 | Full Year 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) | | Free cash flow less product development spending | $125,890 | $114,296 | - Net cash provided by operating activities decreased primarily due to spend on cloud-based solutions related to enterprise modernization[17] - Free Cash Flow increased by 10% to $126 million, primarily driven by lower capital expenditures[17] Non-GAAP Financial Measures & Reconciliations This section explains Wiley's use of non-GAAP financial measures and provides detailed reconciliations to their US GAAP equivalents, offering a clearer view of underlying business performance Explanation of Usage of Non-GAAP Performance Measures Wiley utilizes non-GAAP financial measures to provide a clearer view of underlying business performance and trends, excluding certain items like restructuring charges and divestiture impacts, for internal evaluation, forecasting, and investor analysis - Non-GAAP measures are used as supplemental indicators for operating performance, financial position, internal reporting, forecasting, and incentive compensation[59] - These measures provide useful information for operational trends and comparisons over time by excluding items not considered controllable activities[60] - Non-GAAP measures do not have standardized meanings under US GAAP and should not be viewed as alternatives to GAAP results[64] - Key non-GAAP measures include Adjusted EPS, Free Cash Flow less Product Development Spending, Adjusted Revenue, Adjusted Operating Income, Adjusted EBITDA, and results on a constant currency basis[65] Reconciliation of US GAAP Measures to Non-GAAP Measures This section provides detailed reconciliations from US GAAP financial measures to their non-GAAP adjusted counterparts, illustrating the impact of specific adjustments such as restructuring charges, amortization of acquired intangibles, and gains/losses on divestitures Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS Reconciliation of US GAAP EPS to Non-GAAP Adjusted EPS | 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 (total) | $0.12 | $0.75 | $2.11 | $6.43 | | 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 Reconciliation of US GAAP Income Before Taxes to Non-GAAP Adjusted Income Before Taxes | 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 (total) | $38,978 | $26,380 | $109,933 | $383,996 | | Non-GAAP Adjusted Income Before Taxes | $91,243 | $80,382 | $252,811 | $196,948 | Reconciliation of US GAAP Income Tax to Non-GAAP Adjusted Income Tax Reconciliation of US GAAP Income Tax to Non-GAAP Adjusted Income Tax | 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 | | 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% | Reconciliation of US GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA This reconciliation details the adjustments from US GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA, highlighting the impact of non-operating and non-cash items on profitability metrics Reconciliation of US GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA | Metric | Q4 FY2025 | Q4 FY2024 | Full Year FY2025 | Full Year FY2024 | | :------------------------------------------------ | :-------- | :-------- | :--------------- | :--------------- | | Net Income (Loss) | $68,093 | $25,265 | $84,161 | $(200,319) | | Non-GAAP EBITDA | $100,216 | $113,026 | $342,551 | $38,945 | | Non-GAAP Adjusted EBITDA | $125,643 | $124,994 | $397,674 | $368,592 | | Adjusted EBITDA Margin | 28.4% | 28.3% | 24.0% | 22.8% | Segment Results (Non-GAAP Adjusted) This section presents detailed segment-level financial performance using non-GAAP adjusted metrics for both the fourth quarter and the full fiscal year, providing insights into the operational profitability of Research, Learning, and the impact of Corporate Expenses and divested businesses Q4 Segment Results (Non-GAAP Adjusted) Q4 Segment Results (Non-GAAP Adjusted) | Segment | Revenue, net (FY2025) | Revenue, net (FY2024) | Adj. EBITDA (FY2025) | Adj. EBITDA (FY2024) | Adj. EBITDA Margin (FY2025) | | :------------------ | :-------------------- | :-------------------- | :------------------- | :------------------- | :-------------------------- | | Research | $280,721 | $271,032 | $97,471 | $93,795 | 34.7% | | Learning | $161,858 | $170,145 | $69,663 | $74,040 | 43.0% | | Held for Sale or Sold | $0 | $27,284 | $0 | $2,409 | 0.0% | | Corporate Expenses | | | $(41,491) | $(42,841) | | | Consolidated Adjusted | $442,579 | $441,177 | $125,643 | $124,994 | 28.4% | Full Year Segment Results (Non-GAAP Adjusted) Full Year Segment Results (Non-GAAP Adjusted) | Segment | Revenue, net (FY2025) | Revenue, net (FY2024) | Adj. EBITDA (FY2025) | Adj. EBITDA (FY2024) | Adj. EBITDA Margin (FY2025) | | :------------------ | :-------------------- | :-------------------- | :------------------- | :------------------- | :-------------------------- | | Research | $1,075,459 | $1,042,705 | $344,882 | $331,185 | 32.1% | | Learning | $584,768 | $574,739 | $218,750 | $200,429 | 37.4% | | Held for Sale or Sold | $17,382 | $255,543 | $(3,578) | $32,148 | -20.6% | | Corporate Expenses | | | $(165,958) | $(163,022) | | | Consolidated Adjusted | $1,660,227 | $1,617,444 | $397,674 | $368,592 | 24.0% | Notes to Financial Statements and Reconciliations These notes provide crucial context and detailed explanations for specific line items and adjustments within the financial statements and non-GAAP reconciliations, particularly concerning divestitures, goodwill impairment, and tax impacts - Detailed breakdown of net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale, including specific figures for Wiley Edge, University Services, and CrossKnowledge[24][39] - Explanation of goodwill impairment charges recorded in fiscal year 2024 due to segment reorganization, totaling $108.4 million[28] - Clarification on the amortization of acquired intangible assets, including developed technology, customer relationships, and tradenames[38] - Details on income tax adjustments, including the impact of valuation allowances on deferred tax assets and changes in US state tax rates[42]