John Wiley & Sons(US:WLY)2025-03-07 16:00Financial Data and Key Metrics Changes - Revenue growth was driven by a one percent increase overall, with research growth of five percent offsetting a six percent decline in learning [22][48] - Adjusted EPS increased by thirty-nine percent due to higher adjusted operating income and a lower adjusted effective tax rate [22] - Operating margin rose by two hundred eighty basis points to fourteen point two percent, while adjusted EBITDA grew four percent [23][50] Business Line Data and Key Metrics Changes - Research segment revenue increased by five percent in Q3 and three percent year-to-date, driven by AI licensing and open access programs [51][58] - Learning segment revenue decreased by six percent in Q3 but rose four percent year-to-date, with growth in professional content and AI licensing revenue [59][60] - Adjusted EBITDA for the research segment increased by twelve percent for the quarter, while the learning segment saw a five percent decrease [58][60] Market Data and Key Metrics Changes - Global R&D spend is projected to grow by eight percent in 2024, with similar growth expected in 2025 [13] - Approximately half of the company's revenues are recurring, with nearly seventy-five percent in the research segment [12][38] - The company has expanded access in emerging markets, notably India and Brazil, which will enhance revenue streams and support research output [33][36] Company Strategy and Development Direction - The company is focusing on margin expansion as a multi-year strategic goal, raising the fiscal 2026 margin target to above twenty-five percent [8][70] - Wiley is positioning itself as a leader in AI development, leveraging its content for training large language models and exploring corporate partnerships [16][41] - The company aims to enhance operational efficiency and cost structure while maintaining a strong focus on revenue growth [50][69] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainties but emphasized the company's resilience through various economic cycles [9][10] - The company reaffirmed its fiscal 2025 outlook and fiscal 2026 targets, citing strong demand in research and favorable renewal trends [28][64] - Management expressed confidence in the long-term growth potential of the research segment, driven by increasing global R&D investments [11][40] Other Important Information - The company has a strong balance sheet with thirty-one consecutive years of dividend increases [11] - The recent appointment of Doctor Karen Madden to the Board of Directors is expected to enhance the company's focus on corporate R&D [75] Q&A Session Summary Question: What are the drivers behind the upward revision of the 2026 margin target? - The upward revision is primarily driven by rationalizing the cost structure and improving competitive margin levels [83][85] Question: How does Wiley compare to competitors like Springer in terms of cost structure? - Wiley has identified opportunities to streamline its cost structure, although the mix of business differs from competitors [90][92] Question: Can you confirm the nine million incremental AI revenue fell in Q3 and was in research? - Yes, the full nine million was recognized in Q3 and is attributed to research [93][94] Question: What is the outlook for the learning segment over the next twelve months? - The learning segment is expected to face tough comparisons but is anticipated to return to positive growth in fiscal 2026 [95][101] Question: How is the company planning to allocate capital in the near term? - The company is evaluating the pace of share repurchases and will assess based on free cash flow availability [106]