John Wiley & Sons(US:WLY)2023-09-07 20:41Financial Data and Key Metrics Changes - Adjusted revenue decreased by 8% year-over-year, primarily due to the Hindawi publishing pause, which impacted Q1 revenue by $19 million [9][14] - GAAP EPS reported a loss of $1.67, reflecting $103 million in impairment charges related to held-for-sale assets [14] - Adjusted EPS declined by 37% due to higher interest expenses and lower EBITDA [15] - Free cash flow for the quarter was a use of $106 million, an improvement from $114 million in the prior year [37] Business Line Data and Key Metrics Changes - Research Publishing revenue declined by 8%, but excluding Hindawi, it saw slight growth driven by strong double-digit growth in Gold Open Access [13][30] - The Learning segment experienced an 18% decline in Academic Publishing revenue, while Professional Publishing remained flat [33] - zyBooks courseware recorded a 37% growth, indicating strong demand in digital courseware [34] - Adjusted EBITDA for Learning increased by 19%, with a margin of 19.4%, up from 14.9% in the prior year [36] Market Data and Key Metrics Changes - Over 80% of Wiley's revenue is now digital, with 50% being recurring [8] - Gold Open Access revenue increased by 36% this quarter, indicating a strong growth area within Research Publishing [19] - Article submissions in Research are up 4% year-over-year, with article output increasing by 2% [18] Company Strategy and Development Direction - The company is focusing on divesting non-core assets to enhance shareholder value and streamline operations [5][27] - Wiley has reorganized into two operating segments: Research and Learning, to better align its business strategy [22] - The company aims to improve operational efficiency and drive cost synergies through a simplified structure [39] Management's Comments on Operating Environment and Future Outlook - Management views fiscal '24 as a transition year, with expectations for performance gains and margin acceleration in fiscal '25 and '26 [47] - The Research market remains robust, with increasing global R&D spend driving higher research output [16] - Management anticipates a return to growth in Research Publishing, particularly in the second half of the fiscal year [41] Other Important Information - The company has raised its dividend for the 30th consecutive year, with a current yield of around 4% [38] - The company is executing a three-part program to unlock shareholder value, focusing on core strengths, divesting non-core businesses, and streamlining operations [27] Q&A Session Summary Question: Update on Research and Gold OA percentage of revenue - Management indicated that Gold Open Access now represents around 10% of Research revenue, with overall Open Access at approximately 27-28% [51] Question: Clarification on Hindawi's impact - Hindawi's impact was clarified as a loss of $18 million in the current quarter, with expectations for revenue to decline from $55 million to $20 million for the full year [54][56] Question: Academic segment performance and digital vs print mix - The Academic segment is seeing print represent about 40% of the business, with digital close to 50%, and management expects continued migration from print to digital [60] Question: Outlook for Professional segment - The Professional segment is expected to contribute modest growth, with strong profitability characteristics, particularly in team development [63] Question: Preview of Investor Day strategy - Management emphasized a focus on operational excellence and simplicity, with no major new growth areas expected, but rather leveraging existing strengths [65][66]