John Wiley & Sons(US:WLY)2024-06-13 17:04Financial Data and Key Metrics Changes - Adjusted revenue increased by 4% to $441 million in Q4, driven by growth in Learning and the GenAI content rights project [29] - Adjusted EBITDA rose by 7% to $125 million, with a Q4 adjusted EBITDA margin of 28.3% [29][15] - Full-year adjusted revenue declined modestly to $1.617 billion, with adjusted EBITDA down 3% to $369 million [31] - Adjusted EPS decreased by 19% due to lower operating income and higher interest and tax expenses [31] - Free cash flow was $114 million, down from $173 million in the prior year [31][64] Business Line Data and Key Metrics Changes - Research revenue decreased by 3% due to timing and lower ancillary print and licensing revenue [52] - Learning revenue rose by 22% in Q4, driven by strong growth in digital content and courseware [54] - Adjusted EBITDA in Learning for the quarter increased by 54%, with a Q4 adjusted EBITDA margin of 43.5% [55] Market Data and Key Metrics Changes - Article submissions growth in Research rose to 15% on a trailing 12-month basis, with strong performance in China and India [32][74] - US undergrad enrollment increased by 1.2% in the fall and 2.5% in the spring, indicating a positive trend in the higher education market [54] Company Strategy and Development Direction - The company is focused on executing its value creation plan, which includes divestitures and cost savings [11][68] - Investments are being made in GenAI growth and productivity initiatives, including optimizing content for LLM deployment [47] - The company aims to modernize its systems to improve speed, decision-making, and productivity [48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's direction and momentum heading into fiscal '25, with expectations for revenue growth and margin expansion [68] - The company anticipates full-year revenue of $1.65 billion to $1.69 billion for fiscal '25, driven by low- to mid-single digit growth in Research and low-single digit growth in Learning [58] Other Important Information - The company has executed two significant GenAI content rights projects, with a $23 million deal recognized in fiscal '24 and a $21 million deal expected in fiscal '25 [20][58] - The company has accelerated its cost-saving program, achieving $60 million in savings against an initial target of $30 million [16][44] Q&A Session Summary Question: Momentum in Research article submissions - Management noted a 15% growth in article submissions, with strong performance in China and India, and a rebound in mature markets like the US and Europe [72][74] Question: AI tools and processes post-Hindawi - Management discussed the deployment of AI tools to enhance research integrity and the proactive measures taken to prevent future issues [75][76] Question: Future AI licensing opportunities - Management indicated that they are at the beginning of a wave of AI opportunities, with significant interest from tech companies, and are cautious in structuring deals to protect future rights [80][81] Question: Cost savings and reinvestment - Management confirmed that approximately $40 million of the remaining $130 million cost savings will be realized in fiscal '25, with a focus on corporate optimization and technology reductions [86] Question: Capital allocation and share buybacks - Management stated that they will continue to respond to capital deployment opportunities and have increased share repurchases, with plans to monitor stock price volatility [93]