John Wiley & Sons(US:WLY)2025-12-04 16:02Financial Data and Key Metrics Changes - The company reported a mixed revenue picture with strong growth in research and AI, offset by declines in the learning segment [6][10] - Adjusted EBITDA grew 8%, and adjusted operating margin expanded 250 basis points to 18.8% [27][34] - Free cash flow was a use of $108 million, a 17% or $22 million improvement from the prior year [32] Business Line Data and Key Metrics Changes - Research publishing delivered strong 7% growth on worldwide demand, with record submission levels [6][10] - Learning segment revenue declined 11%, primarily due to headwinds in professional and academic areas [30] - Research solutions declined 6% due to lower corporate spending on advertising and recruiting [29] Market Data and Key Metrics Changes - The company noted strong demand across all regions, with double-digit submissions growth in China, India, Japan, the U.K., Germany, and the U.S. [10][11] - Corporate R&D represents a substantial future growth opportunity, currently making up only 10% of the company's revenue base [19] Company Strategy and Development Direction - The company aims to lead in research and drive growth in AI and adjacent markets, with a focus on operational excellence and discipline [10][12] - Strategic partnerships with AI innovators are expected to yield early results, enhancing the company's position in the AI economy [17][25] - The company is prioritizing digital offerings and inclusive access to stabilize revenue in the learning segment [9][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the learning segment due to external factors, including changes in inventory management from Amazon and soft consumer spending [9][30] - The company expects learning declines to moderate in the second half of the year, although revenue is anticipated to be down for the full year [10][34] - Guidance for adjusted EBITDA margin, adjusted EPS, and free cash flow has been reaffirmed, with revenue growth expected to be in the low single digits [34] Other Important Information - The company executed another AI licensing project, bringing total AI training revenue close to $100 million in less than two years [7][20] - Share repurchases increased by 69% to $21 million, with a current yield around 3.9% [8][33] Q&A Session Summary Question: Research revenue growth and potential upside - Management indicated that they expect to grow at the top of the market growth, with strong article growth as a leading indicator [41][46] Question: AI licensing revenue and pipeline opportunities - The company confirmed a $6 million licensing deal with an existing LLM customer, indicating a continuing pipeline for AI opportunities [48][49] Question: Decline in learning segment and inventory management impact - Management noted that the decline is primarily cyclical rather than structural, with expectations for normalization in the second half [54][56] Question: Share buybacks and capital allocation strategy - The company maintains a disciplined approach to capital allocation, balancing share buybacks with growth opportunities and managing leverage [58][60]