John Wiley & Sons(US:WLY)2025-06-17 15:00Financial Data and Key Metrics Changes - The company reported a 10% increase in free cash flow to $126 million and reaffirmed a target of $200 million for fiscal 2026 [12][46] - Adjusted operating margin improved by 300 basis points, and adjusted EBITDA margin increased by 120 basis points [12] - Adjusted revenue for the full year rose by 3%, driven by research and academic growth, while adjusted EPS increased by 318% [40][41] Business Line Data and Key Metrics Changes - Research segment revenue increased by 3% for the full year, supported by recurring revenue models and new AI licensing revenue [41][42] - Learning segment revenue declined by 5% in Q4 but rose by 2% for the year, driven by AI licensing and steady market conditions [44] - AI licensing revenue totaled $40 million for the year, with significant contributions from corporate partnerships [11][27] Market Data and Key Metrics Changes - Strong demand for publishing was noted across key markets, with double-digit growth in submissions from India and China, as well as high single-digit growth in the U.S. and Japan [18][19] - The company executed landmark multi-year agreements in India and Brazil, expanding access to research for thousands of institutions [19] - The corporate market, which currently makes up about 10% of revenue, is expected to expand significantly as the company extends its offerings into corporate R&D [26][28] Company Strategy and Development Direction - The company is focused on margin expansion and capitalizing on AI opportunities, with a commitment to improving its cost structure [12][24] - Wiley aims to leverage its content and data for AI development, positioning itself as a key player in the corporate R&D space [28][31] - The company is committed to maintaining a balanced approach to capital allocation, investing in high-return initiatives while returning cash to shareholders [54][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and growth despite uncertainties in the economic environment [32][78] - The company anticipates low to mid-single-digit revenue growth for fiscal 2026, factoring in the impact of prior year AI licensing revenue [50] - Management highlighted strong internal indicators and a favorable renewal season, providing optimism for the upcoming fiscal year [75][78] Other Important Information - The company completed all divestitures and secured $120 million in cash proceeds from the university services divestiture, which will be used to reduce debt [12][47] - The company has improved its EBITDA margin in the learning segment by 850 basis points since fiscal 2023 [44] - The company is actively working on a technology transformation program aimed at reducing costs and improving delivery [37][39] Q&A Session Summary Question: What is the outlook for organic growth excluding AI? - Management noted that strong Open Access revenues and a favorable renewal year provide confidence for continued organic growth [61][62] Question: What is the potential contribution from the emerging AI market? - Management indicated that the $1 million in revenue from vertical-specific applications is just the beginning, with expectations for high-margin, recurring revenue models in the future [66][67] Question: How is the company planning for the uncertain economic environment? - Management emphasized a balanced approach of discipline and flexibility in planning, with strong visibility into the calendar year 2025 renewals [78][80] Question: Will the company continue to return cash to shareholders? - Management confirmed that while returning cash to shareholders remains a priority, they will also maintain the ability to invest in the business and take advantage of opportunities as they arise [84]