John Wiley & Sons(WLY) - 2026 Q1 - Quarterly Results

First Quarter 2026 Highlights 1.1 Introduction and Management Commentary Wiley reported strong Q1 FY2026 results, driven by research demand, particularly AI, reaffirming confidence in the Fiscal 2026 outlook - Strong demand trends in research, opening new growth pathways in AI and corporate R&D[4] - Wiley is a recognized leader in AI licensing and innovation, executing projects for multi-national corporations and strategically partnering with top AI innovators[4] - Confidence in Fiscal 2026 outlook is based on leading indicators, the strength of recurring revenue models, open access programs, and anticipated cost savings[4] 1.2 Consolidated Financial Summary Q1 FY2026 GAAP revenue decreased 2% to $397 million, while operating income rose 7% to $31 million; adjusted results showed mixed performance Q1 FY2026 Consolidated Financial Performance (GAAP vs. Prior Year) | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Change | | :-------------------- | :-------------------- | :-------------------- | :----- | | Revenue (GAAP) | $397 | $404 | -2% | | Operating Income (GAAP) | $31 | $29 | +7% | | Diluted EPS (GAAP) | $0.22 | ($0.03) | N/A | Q1 FY2026 Consolidated Financial Performance (Adjusted at Constant Currency) | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Change (Constant Currency) | | :---------------------- | :-------------------- | :-------------------- | :------------------------- | | Adjusted Revenue | $397 | $389.6 | +1% | | Adjusted Operating Income | $34 | $35.4 | -2% | | Adjusted EBITDA | $70 | $72.6 | -3% | | Adjusted EPS | $0.49 | $0.47 | +2% | 1.3 Segment Performance Overview Research revenue grew 5% at constant currency from AI licensing and open access, while Learning declined 8% due to lower AI licensing and market softness - Growth in Research revenue (+5% at constant currency) driven by AI licensing projects and open access growth offsetting timing of prior year journal renewals[8] - Learning revenue down 7% as reported and 8% at constant currency largely due to $16 million of AI licensing revenue in the prior year (vs. $13 million this quarter) and market-related softness in Professional[9] 1.3.1 Research Segment Highlights Research Segment Q1 FY2026 Performance | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Reported Change | Constant Currency Change | | :---------------------- | :-------------------- | :-------------------- | :-------------- | :----------------------- | | Revenue, net | $281.7 | $265.3 | +6% | +5% | | AI Licensing Revenue | $16 | $1 | N/A | N/A | | Adjusted EBITDA | $79.6 | $77.8 | +2% | +2% | | Adjusted EBITDA margin | 28.3% | 29.3% | -1.0 pp | | - Executed landmark AI licensing project with a large tech company and announced a strategic partnership with Anthropic to accelerate AI integration across scholarly research[8] - Article submissions and output grew by 25% and 13%, respectively, with robust growth across all key geographies[9] 1.3.2 Learning Segment Highlights Learning Segment Q1 FY2026 Performance | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Reported Change | Constant Currency Change | | :---------------------- | :-------------------- | :-------------------- | :-------------- | :----------------------- | | Revenue, net | $115.1 | $124.3 | -7% | -8% | | AI Licensing Revenue | $13 | $16 | -18.75% | | | Adjusted EBITDA | $31.5 | $33.8 | -7% | -7% | | Adjusted EBITDA margin | 27.4% | 27.2% | +0.2 pp | | - Market-related softness in the Professional sub-segment contributed to the revenue decline[9] 1.4 Corporate Expenses Q1 Corporate Expenses rose 4% at constant currency due to strategic projects, with a decline expected in Q2 as cost savings ramp up - Q1 Corporate Expenses rose 4% on an Adjusted EBITDA basis at constant currency driven primarily by costs related to strategic consulting projects (now complete), enterprise modernization, and other one-time items[10] - Wiley expects Corporate Expenses to decline starting in Q2 as cost savings ramp up[10] 1.5 EPS, Balance Sheet, Cash Flow, and Capital Allocation Highlights GAAP EPS improved to $0.22, Adjusted EPS rose 2% to $0.49, Net Debt-to-EBITDA improved to 1.9, and $32 million was returned to shareholders Key Financial Ratios & Capital Allocation | Metric | Q1 FY2026 | Q1 FY2025 | Change | | :------------------------------------ | :-------- | :-------- | :----- | | GAAP EPS | $0.22 | ($0.03) | N/A | | Adjusted EPS (constant currency) | $0.49 | $0.47 | +2% | | Net Debt-to-EBITDA Ratio (TTM) | 1.9 | 2.0 | -0.1 | | Net Cash Used in Operating Activities (Millions $) | ($85) | ($89) | +$4 million | | Free Cash Flow less Product Dev. Spending (Millions $) | ($100) | ($107) | +$7 million | | Returns to Shareholders (Millions $) | $32 | $31 | +$1 million | | Share Repurchases (Millions $) | $14 | $12.5 | +$1.5 million | - Increased dividend for the 32nd consecutive year and Board approved $250 million share repurchase authorization, a 25% increase over its 2020 authorization[8][16] - Received approximately $120 million in cash proceeds related to the University Services divestiture, utilized to further reduce debt[16] Fiscal Year 2026 Outlook 2.1 Fiscal Year 2026 Outlook Reaffirmation Wiley reaffirmed its full-year Fiscal 2026 outlook, driven by positive demand indicators, successful journal renewals, and anticipated cost savings - Wiley is reaffirming its full year outlook based on leading demand and output indicators, the success of calendar year 2025 journal renewals, and anticipated cost savings[12] Fiscal 2026 Outlook | Metric | Fiscal 2024 Results (Millions $) | Fiscal 2025 Results (Millions $) | Fiscal 2026 Outlook | | :----------------- | :------------------ | :------------------ | :------------------ | | Adj. Revenue | $1,617 | $1,660 | 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 | $126 | Approximately $200 | Detailed Financial Statements (Unaudited) 3.1 Condensed Consolidated Statements of Net Income (Loss) For Q1 FY2026, Wiley reported a net income of $11.7 million, an improvement from a prior-year loss, with revenue slightly down and operating income up Condensed Consolidated Statements of Net Income (Loss) | Metric | Three Months Ended July 31, 2025 (Thousands $) | Three Months Ended July 31, 2024 (Thousands $) | | :-------------------------- | :------------------------------- | :------------------------------- | | Revenue, net | $396,800 | $403,809 | | Total costs and expenses | $365,837 | $374,836 | | Operating income | $30,963 | $28,973 | | Income before taxes | $17,707 | $23,003 | | Provision for income taxes | $6,007 | $24,439 | | Net income (loss) | $11,700 | ($1,436) | | Diluted EPS | $0.22 | ($0.03) | 3.2 Reconciliation of US GAAP Measures to Non-GAAP Measures This section reconciles US GAAP to non-GAAP adjusted measures like EPS and EBITDA, excluding specific items for clearer operational analysis 3.2.1 Adjusted EPS Reconciliation Adjusted EPS Reconciliation | Adjustment Item | Q1 FY2026 Impact ($) | Q1 FY2025 Impact ($) | | :---------------------------------------------------------------------------- | :--------------- | :--------------- | | US GAAP Earnings (Loss) Per Share - Diluted | $0.22 | ($0.03) | | Restructuring and related charges | $0.05 | $0.06 | | Amortization of acquired intangible assets | $0.20 | $0.20 | | Net loss (gain) on sale of businesses, assets, and impairment charges related | $0.02 | ($0.09) | | Income tax adjustments | — | $0.33 | | Non-GAAP Adjusted Earnings Per Share - Diluted | $0.49 | $0.47 | 3.2.2 Adjusted Income Before Taxes and Tax Provision Reconciliation Adjusted Income Before Taxes Reconciliation | Metric | Q1 FY2026 (Thousands $) | Q1 FY2025 (Thousands $) | | :---------------------------------------------------------------------------- | :-------- | :-------- | | US GAAP Income Before Taxes | $17,707 | $23,003 | | Pretax Impact of Adjustments (Restructuring, FX, Amortization, Sale of Biz) | $16,924 | $10,966 | | Non-GAAP Adjusted Income Before Taxes | $34,631 | $33,969 | Adjusted Income Tax Provision and Effective Tax Rate | Metric | Q1 FY2026 (Thousands $) | Q1 FY2025 (Thousands $) | | :------------------------------------ | :-------- | :-------- | | US GAAP Income Tax Provision | $6,007 | $24,439 | | Non-GAAP Adjusted Income Tax Provision | $8,064 | $8,024 | | US GAAP Effective Tax Rate | 33.9% | 106.2% | | Non-GAAP Adjusted Effective Tax Rate | 23.3% | 23.6% | 3.2.3 EBITDA and Adjusted EBITDA Reconciliation EBITDA and Adjusted EBITDA Reconciliation | Metric | Q1 FY2026 (Thousands $) | Q1 FY2025 (Thousands $) | | :---------------------------------------------------------------------------- | :-------- | :-------- | | Net Income (Loss) | $11,700 | ($1,436) | | Non-GAAP EBITDA | $65,195 | $73,043 | | Adjustments (Restructuring, FX, Sale of Biz, Other expense, Held for Sale) | $5,252 | ($428) | | Non-GAAP Adjusted EBITDA | $70,447 | $72,615 | | Adjusted EBITDA Margin | 17.8% | 18.6% | 3.3 Segment Results This section details financial performance across Wiley's Research, Learning, Held for Sale, and Corporate segments, including revenue and adjusted EBITDA 3.3.1 Research Segment Detailed Results Research Segment Q1 FY2026 Detailed Performance | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Reported Change | Constant Currency Change | | :-------------------------- | :-------------------- | :-------------------- | :-------------- | :----------------------- | | Research Publishing Revenue | $231.8 | $231.0 | 0% | -1% | | Research Solutions Revenue | $49.9 | $34.4 | +45% | +44% | | Total Revenue, net | $281.7 | $265.3 | +6% | +5% | | Non-GAAP Adjusted Operating Income | $56.2 | $55.2 | +2% | +3% | | Non-GAAP Adjusted EBITDA | $79.6 | $77.8 | +2% | +2% | | Adjusted EBITDA margin | 28.3% | 29.3% | -1.0 pp | | 3.3.2 Learning Segment Detailed Results Learning Segment Q1 FY2026 Detailed Performance | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Reported Change | Constant Currency Change | | :-------------------------- | :-------------------- | :-------------------- | :-------------- | :----------------------- | | Academic Revenue | $55.5 | $60.0 | -7% | -8% | | Professional Revenue | $59.6 | $64.4 | -7% | -8% | | Total Revenue, net | $115.1 | $124.3 | -7% | -8% | | Non-GAAP Adjusted Operating Income | $21.7 | $22.5 | -4% | -4% | | Non-GAAP Adjusted EBITDA | $31.5 | $33.8 | -7% | -7% | | Adjusted EBITDA margin | 27.4% | 27.2% | +0.2 pp | | 3.3.3 Held for Sale or Sold Segment Detailed Results Held for Sale or Sold Segment Q1 FY2026 Performance | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Reported Change | | :-------------------------- | :-------------------- | :-------------------- | :-------------- | | Revenue, net | $0 | $14.2 | | | Non-GAAP Adjusted Operating Loss | $0 | ($2.5) | | | Non-GAAP Adjusted EBITDA | $0 | ($2.5) | | 3.3.4 Corporate Expenses Detailed Results Corporate Expenses Q1 FY2026 Performance | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Reported Change | Constant Currency Change | | :-------------------------------- | :-------------------- | :-------------------- | :-------------- | :----------------------- | | Non-GAAP Adjusted Corporate Expenses | ($43.9) | ($42.4) | -4% | -3% | | Non-GAAP Adjusted EBITDA | ($40.7) | ($39.0) | -4% | -4% | 3.3.5 Consolidated Adjusted Results Consolidated Adjusted Results Q1 FY2026 | Metric | Q1 FY2026 (Millions $) | Q1 FY2025 (Millions $) | Reported Change | Constant Currency Change | | :-------------------------- | :-------------------- | :-------------------- | :-------------- | :----------------------- | | Adjusted Revenue, net | $396.8 | $389.6 | +2% | +1% | | Non-GAAP Adjusted Operating Income | $34.0 | $35.4 | -4% | -2% | | Adjusted Operating Income margin | 8.6% | 9.1% | -0.5 pp | | | Non-GAAP Adjusted EBITDA | $70.4 | $72.6 | -3% | -3% | | Adjusted EBITDA margin | 17.8% | 18.6% | -0.8 pp | | 3.4 Condensed Consolidated Statements of Financial Position As of July 31, 2025, total assets decreased to $2,524.3 million, total liabilities to $1,791.3 million, and shareholders' equity to $733.1 million Condensed Consolidated Statements of Financial Position (Selected Items) | Metric | July 31, 2025 (Thousands $) | April 30, 2025 (Thousands $) | Change (Thousands $) | | :-------------------------- | :------------ | :------------- | :----- | | Total assets | $2,524,332 | $2,691,466 | -$167,134 | | Cash and cash equivalents | $81,850 | $85,882 | -$4,032 | | Total current assets | $420,295 | $439,884 | -$19,589 | | Goodwill | $1,117,827 | $1,121,505 | -$3,678 | | Total liabilities | $1,791,273 | $1,939,260 | -$147,987 | | Total current liabilities | $648,843 | $820,856 | -$172,013 | | Long-term debt | $818,272 | $789,435 | +$28,837 | | Shareholders' equity | $733,059 | $752,206 | -$19,147 | 3.5 Condensed Consolidated Statements of Cash Flows Q1 FY2026 net cash used in operating activities improved to ($85.0) million, investing activities provided $98.9 million, and financing activities used ($16.9) million Condensed Consolidated Statements of Cash Flows (Selected Items) | Metric | Q1 FY2026 (Thousands $) | Q1 FY2025 (Thousands $) | | :---------------------------------------------- | :-------- | :-------- | | Net cash used in operating activities | ($85,005) | ($88,712) | | Net cash provided by (used in) investing activities | $98,856 | ($23,807) | | Net cash (used in) provided by financing activities | ($16,924) | $101,589 | | Change in cash, cash equivalents and restricted cash | ($4,032) | ($10,132) | 3.5.1 Operating, Investing, and Financing Activities - Net cash proceeds related to the sale of businesses and assets contributed $115.2 million to investing activities[42] - Cash dividends of $19.0 million and purchases of treasury shares of $13.5 million were part of financing activities[42] 3.5.2 Free Cash Flow Less Product Development Spending Free Cash Flow Less Product Development Spending | Metric | Q1 FY2026 (Thousands $) | Q1 FY2025 (Thousands $) | | :-------------------------------------- | :-------- | :-------- | | Net cash used in operating activities | ($85,005) | ($88,712) | | Less: Additions to technology, property, and equipment | ($12,005) | ($14,502) | | Less: Product development spending | ($2,890) | ($3,351) | | Free cash flow less product development spending | ($99,900) | ($106,565) | Company Information and Disclosures 4.1 About Wiley Wiley is a leading global provider of authoritative content, data-driven insights, and knowledge services, advancing science and learning for over 200 years - Wiley (NYSE: WLY) is a leading global provider of authoritative content, data-driven insights, and knowledge services that advance science and learning[15] - For over 200 years, Wiley has empowered researchers, learners and institutions worldwide to drive progress and solve the world's most pressing challenges[15] 4.2 Non-GAAP Financial Measures Explanation Wiley uses non-GAAP measures like Adjusted EPS and EBITDA for internal assessment and investor analysis, emphasizing they are not GAAP substitutes - Management uses non-GAAP performance measures as supplemental indicators of operating performance and financial position, as well as for internal reporting, forecasting, and incentive compensation[45] - Non-GAAP performance measures do not have standardized meanings prescribed by US GAAP and therefore may not be comparable to similar measures used by other companies, and should not be viewed as alternatives to US GAAP financial results[50] - Adjusted EPS, Adjusted Revenue, Adjusted Operating Income and margin, Adjusted Income Before Taxes, Adjusted Income Tax Provision, Adjusted Effective Tax Rate, EBITDA, and Adjusted EBITDA and margin provide a more comparable basis to analyze operating results and earnings and are measures commonly used by shareholders to measure performance[52] 4.3 Forward-Looking Statements This release contains forward-looking statements subject to uncertainties, with actual results potentially differing due to various factors; the company disclaims any update obligation - Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements[18] - Factors include, but are not limited to: (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (xiii) our ability to leverage artificial intelligence technologies in our products and services[18] 4.4 Earnings Conference Call & Contact Information Details for the Q1 FY2026 earnings conference call on September 4, 2025, at 10:00 am (ET) are provided, along with Investor Relations contact information - Earnings Conference Call scheduled for today, September 4 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com, or directly at http://events.q4inc.com/attendee/819546756[14](index=14&type=chunk) - Contact: Brian Campbell, Investor Relations, brian.campbell@wiley.com, 201.748.6874[19]