John Wiley & Sons(WLYB) - 2026 Q3 - Quarterly Results

Financial Performance - Q3 2026 revenue of $410 million, up 1% year-over-year; operating income increased by 21% to $63 million; diluted EPS of $0.56 compared to a loss of ($0.43) in the prior year [4] - Adjusted operating income of $70 million, up 22%, with an adjusted operating margin of 17%, reflecting a 280 basis point improvement [4] - Adjusted EBITDA for Q3 was $91 million, up 4% as reported, with an adjusted EBITDA margin of 33.1% [11] - Non-GAAP Adjusted EPS for the three months ended January 31, 2026, was $0.97, up from $0.84 in the prior year, indicating a year-over-year increase of 15.5% [24] - The US GAAP Income Before Taxes for the three months ended January 31, 2026, was $44.4 million, compared to $18.7 million in the same period of 2025, representing an increase of 137.5% [25] - Non-GAAP Adjusted Income Before Taxes for the three months ended January 31, 2026, was $68.4 million, up from $58.5 million in the prior year, marking a growth of 17.5% [25] - Non-GAAP EBITDA for the three months ended January 31, 2026, was $91.5 million, compared to $69.2 million in the same period of 2025, reflecting a year-over-year increase of 32.3% [30] - Non-GAAP Adjusted EBITDA for the three months ended January 31, 2026, was $105.4 million, up from $93.9 million in the prior year, indicating a growth of 12.3% [30] - The Adjusted EBITDA Margin for the three months ended January 31, 2026, was 25.7%, compared to 23.2% in the same period of 2025, showing an improvement of 2.5 percentage points [30] - Total revenue for the three months ended January 31, 2026, was $410,036,000, representing a 1% increase compared to $404,626,000 in the same period of 2025 [33] - Non-GAAP adjusted operating income for the three months ended January 31, 2026, increased by 22% to $69,815,000 from $57,405,000 in the prior year [33] - Total revenue for the nine months ended January 31, 2026, was $1,228,587,000, a slight decrease of 1% from $1,235,030,000 in the same period of 2025 [37] - Non-GAAP adjusted EBITDA for the nine months ended January 31, 2026, increased by 7% to $290,919,000 from $272,031,000 in the prior year [37] Cash Flow and Investments - Operating cash flow increased by $51 million to $103 million, with free cash flow of $56 million, a significant improvement from a use of ($1 million) in the prior year [4] - Year-to-date, net cash provided by operating activities was $103 million, compared to $52 million in the prior year, driven by higher cash earnings [12] - Cash and cash equivalents increased to $95,115,000 as of January 31, 2026, from $85,882,000 as of April 30, 2025 [39] - The company reported a net cash provided by investing activities of $45,606, contrasting with a net cash used of $69,694 in the prior year, highlighting a positive shift in investment strategy [42] - Free cash flow less product development spending reached $55,543, a substantial recovery from a negative $1,151 in the previous year [43] - The net change in operating assets and liabilities was a negative $168,466, which may impact future cash flow management [42] Shareholder Returns - Share repurchases increased to $35 million in Q3, with a full-year target of $100 million; year-to-date, $126 million allocated to share repurchases and dividends, up 37% compared to the prior year [4] - The company incurred $56,303 in cash dividends and $69,963 in treasury share purchases, reflecting a commitment to returning value to shareholders [42] Revenue Segments - Research Publishing revenue grew by 3% as reported, with a 4% increase at constant currency, driven by recurring revenue and open access models [4] - Research Publishing revenue for the three months ended January 31, 2026, was $233,435,000, a 3% increase from $225,874,000 in the same period of 2025 [33] - Research Solutions revenue decreased by 2% to $40,684,000 for the three months ended January 31, 2026, compared to $41,670,000 in the prior year [33] Corporate Expenses - Corporate expenses reduced by 21% at constant currency, contributing to multi-year margin expansion initiatives [8] - Corporate expenses decreased by 21% to $(36,186,000) for the three months ended January 31, 2026, from $(46,028,000) in the same period of 2025 [33] Taxation - The US GAAP Effective Tax Rate for the three months ended January 31, 2026, was 33.1%, while the Non-GAAP Adjusted Effective Tax Rate was 25.1% [26] Net Income - The company reported a net income of $29.7 million for the three months ended January 31, 2026, compared to a net loss of $22.9 million in the same period of 2025 [30] - Net income for the nine months ended January 31, 2026, was $86,270, compared to $16,068 for the same period in 2025, representing a significant increase [42] Restructuring Charges - Total restructuring and related charges for the three months ended January 31, 2026, amounted to $7.1 million, compared to $5.6 million in the same period of 2025, indicating an increase of 27.0% [30] Strategic Partnerships - AI revenue reached $7 million for the quarter and approximately $42 million year-to-date, with a strategic partnership established with OpenEvidence for AI clinical decision support [4] Non-GAAP Measures - The company emphasizes the use of non-GAAP performance measures to provide investors with a clearer view of operational trends and financial performance [46]