John Wiley & Sons(US:WLY)2025-06-17 15:02Financial 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 [11][47] - Adjusted operating margin improved by 300 basis points, and adjusted EBITDA margin increased by 120 basis points [11][42] - Adjusted revenue for the full year rose by 3%, driven by research and academic growth, while adjusted operating income and adjusted EPS increased by 29% and 318% respectively [42][45] Business Line Data and Key Metrics Changes - Research segment revenue increased by 3% for the full year, supported by growth in recurring revenue models and Open Access programs [42][44] - Learning segment revenue declined by 5% in Q4 but rose by 2% for the year, driven by AI licensing and steady market conditions in academic [45][46] - AI licensing revenue totaled $40 million for the year, with significant contributions from new agreements [10][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 growth in the UK, France, Italy, Brazil, and Canada [17][18] - The company executed landmark multi-year agreements in India and Brazil, expanding access to thousands of institutions [18][20] - The corporate market, which currently makes up about 10% of revenue, is expected to expand significantly as the company extends into corporate R&D [26][30] Company Strategy and Development Direction - The company aims to capitalize on AI opportunities and has established partnerships with major tech companies for AI model training and development [7][29] - A focus on margin expansion and cost structure optimization remains a strategic priority, with ongoing investments in technology and research publishing platforms [36][40] - The company is committed to delivering profitable revenue growth and expanding margins in an uncertain economic environment [50][51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and growth despite external uncertainties, citing strong internal indicators and a diversified revenue base [32][78] - The outlook for fiscal 2026 includes low to mid-single-digit revenue growth, with expectations for continued strength in Open Access and inclusive access models [51][62] - The company is prepared to navigate potential economic disruptions while maintaining a disciplined approach to margin expansion [77][80] Other Important Information - The company returned $137 million to shareholders through dividends and share repurchases, with a current dividend yield of approximately 3.5% [48][84] - Following the divestiture of university services, the company secured $120 million in cash proceeds, which will be used to reduce debt and interest expenses [11][48] Q&A Session Summary Question: Outlook for organic growth excluding AI - Management noted that strong Open Access revenues and a favorable renewal season provide visibility for continued organic growth [61][62] Question: Contribution of AI licensing revenue - The company indicated that the $1 million in vertical-specific applications is just the beginning, with potential for high-margin, recurring revenue models [66][68] Question: Planning and budgeting in the current environment - Management emphasized a balanced approach to planning, with strong visibility into the calendar year 2025 and a focus on maintaining flexibility amid uncertainties [75][78] Question: Future cash return strategy - The company plans to adopt a mixed approach to returning cash to shareholders while still investing in business opportunities [84][85]