John Wiley & Sons(US:WLY)2025-09-05 14:01Revenue Performance - Revenue for the three months ended July 31, 2025, decreased by $7.0 million, or 2%, compared to the prior year, with Adjusted Revenue increasing by 1% on a constant currency basis [137]. - Adjusted Revenue for the three months ended July 31, 2025, was $396.8 million, reflecting a 1% increase compared to the prior year [143]. - Research revenue increased by $16.4 million, or 6%, for the three months ended July 31, 2025, with AI license revenue rising to $15.8 million from $1.1 million in the prior year [177]. - Learning revenue decreased by $9.2 million, or 7%, for the three months ended July 31, 2025, with AI license revenue in Learning dropping to $13.1 million from $16.1 million in the prior year [180]. - Revenue for Held for Sale or Sold decreased by $14.2 million compared to the prior year, attributed to the sale of Wiley Edge and CrossKnowledge businesses [183]. Operating Income and Expenses - Operating income for the three months ended July 31, 2025, was $31.0 million, an increase of $2.0 million, or 7%, compared to the prior year [152]. - Operating and administrative expenses decreased by $8.5 million, or 3%, to $240.3 million for the three months ended July 31, 2025 [142]. - Adjusted Operating Income for the Research segment was $56.2 million for the three months ended July 31, 2025, a 2% increase from the prior year [176]. AI License Revenue - AI license revenue reached $28.9 million for the three months ended July 31, 2025, up from $17.2 million in the prior year, including $15.7 million from licensed content [137]. - Adjusted EBITDA for the three months ended July 31, 2025, increased by 2% on a constant currency basis, primarily due to higher revenue, despite increased royalty costs on AI license revenue [178]. Tax and Earnings - The US GAAP effective tax rate for the three months ended July 31, 2025, was 33.9%, significantly lower than 106.2% for the same period in 2024, primarily due to year-to-date US ordinary losses [167]. - Diluted earnings per share for the three months ended July 31, 2025, was $0.22, compared to a loss of $(0.03) per share for the same period in 2024 [171]. - Non-GAAP Adjusted EPS for the three months ended July 31, 2025, was $0.49, an increase from $0.47 in the prior year [173]. Cash Flow and Financing - Net cash provided by investing activities was $98.9 million for the three months ended July 31, 2025, compared to net cash used of $23.8 million in the prior year, mainly due to $115.3 million received from the Sale Agreement [200]. - Net cash used in financing activities was $16.9 million for the three months ended July 31, 2025, compared to net cash provided of $101.6 million in the prior year, reflecting lower net borrowings of $113.2 million [201]. - The company increased its quarterly dividend to shareholders to $1.42 per share annualized, up from $1.41 per share in the prior year [202]. - The company approved an additional share repurchase program of $250 million, with $14.0 million repurchased during the three months ended July 31, 2025 [203]. Restructuring and Cost Savings - The Global Restructuring Program is expected to yield annualized cost savings of approximately $105 million, primarily realized in fiscal year 2026 [148]. - Adjusted EBITDA decreased by 7% on a constant currency basis compared to the prior year, primarily due to lower revenue, partially offset by reduced bad debt expense and royalty costs [181]. Foreign Exchange and Impairment - Net foreign exchange transaction losses were $(1.0) million for the three months ended July 31, 2025, primarily due to losses on foreign currency denominated receivables [157]. - The company recorded foreign currency translation losses of approximately $(5.9) million, compared to gains of $15.0 million for the same period in 2024 [212]. - The company recognized a reduction in cumulative impairment charges of $4.4 million related to the sale of CrossKnowledge in the three months ended July 31, 2024 [161]. Other Financial Metrics - Negative working capital was $228.5 million as of July 31, 2025, a decrease of $152.5 million from April 30, 2025, primarily due to seasonality and unearned contract liabilities [198]. - A hypothetical one percent change in interest rates for the $328.7 million of unhedged variable rate debt as of July 31, 2025 would affect net income and cash flow by approximately $2.5 million [209]. - The print book sales return reserves amounted to a net liability balance of $9.1 million as of July 31, 2025, slightly up from $9.0 million as of April 30, 2025 [215]. - A one percent change in the estimated sales return rate could affect net income by approximately $0.3 million [216]. - Subscription agents accounted for approximately 18% of total revenue for the year ended April 30, 2025 [217]. - No single book customer accounts for more than 7% of total consolidated revenue as of July 31, 2025, while the top 10 book customers account for approximately 12% of total consolidated revenue [218].