Research Growth and AI Licensing Drive Wiley’s Third Quarter 2025 Results

Reaffirming Fiscal 2025 outlook at mid-to-high end of ranges from strong performance and profit improvement year-to-date; raising Fiscal 2026 margin target

HOBOKEN, N.J.: Wiley (NYSE: WLY), one of the world’s largest publishers and a trusted leader in research and learning, today reported results for the third quarter ended January 31, 2025.

• Third quarter reported revenue of $405 million vs. $461 million due to foregone revenue from divested businesses; Adjusted Revenue (excluding divestitures) +1.2% at constant currency as expected; Research +5.2% constant currency
• Third quarter Operating Income $52 million vs. ($46 million); Adjusted Operating Income +27% with margin up 280bps. Earnings Per Share (EPS) up $1.65 to ($0.43); Adjusted EPS +39% and Adjusted EBITDA +4%
• Year-to-date reported revenue of $1,235 million vs. $1,405 million due to foregone revenue from divested businesses; Adjusted Revenue (excluding divestitures) +3.5% at constant currency
• Year-to-date Operating Income of $145 million vs. ($17 million); Adjusted Operating Income +38% with margin up 330 basis points. Earnings Per Share (EPS) of $0.29 vs. ($4.10); Adjusted EPS +43%, Adjusted EBITDA +12%, Cash from Operations +115% to $52 million and Free Cash Flow +$44 million

“We continue to deliver disciplined growth and material margin expansion as we capitalize on the global demand for scientific research and responsible AI model development,” said Matthew Kissner, Wiley President and CEO. “Our recurring revenue Research business has not only proven to be resilient across economic cycles but poised for continued expansion; our authoritative content and data-driven insights are increasingly coveted by corporations for their research and development initiatives, including AI enablement; and our strong execution and cost re-engineering efforts continue to deliver tangible results, with significant margin and cash flow improvement this year and raised margin expectations for Fiscal 2026.”

RESEARCH

• Revenue of $268 million was up 4% as reported and 5% at constant currency driven by growth in open access, solutions, and AI licensing. During the quarter, Wiley executed two landmark recurring revenue agreements, including India (“one nation, one subscription” expanding access to over 6,000 institutions) and Brazil (transformational agreement expanding access to over 430 institutions). Leading indicators remain strong year-to-date, with submissions up 18% and output up 8%. Wiley also expanded a previously executed content licensing project for training this quarter valued at $9 million. For the nine months, Research revenue was up 3% as reported and at constant currency. Excluding AI revenue, Research revenue rose 2% in the quarter and year-to-date, both at constant currency.
• Adjusted EBITDA of $88 million was up 11% as reported and 12% at constant currency due to revenue growth. Adjusted EBITDA margin for the quarter rose to 32.7% from 30.9% in the prior year period. Year-to-date, Research Adjusted EBITDA margin was up 30 basis points to 31.1%.

LEARNING

• Revenue of $137 million was down 6% as reported and at constant currency. Year-over-year results were impacted by a $6 million licensing renewal in the prior year and softness in Academic. At constant currency, Academic was down 9% in a seasonally small quarter and Professional was down 1%. For the nine months, Learning revenue was up 5%, or 4% at constant currency driven by AI licensing. Excluding AI licensing revenue, Learning revenue declined 0.6% year-to-date at constant currency.
• Adjusted EBITDA of $49 million was down 5% as reported and at constant currency due to revenue performance. Adjusted EBITDA margin for the quarter rose to 35.4% from 35.1% in the prior year. Year-to-date, Learning Adjusted EBITDA margin was up over 400 basis points to 35.3%.

CORPORATE EXPENSES

• Corporate expenses declined by $3 million due to lower depreciation and amortization but rose $3 million on an Adjusted EBITDA basis due to enterprise modernization and consulting fees related to strategic initiatives, including the re-engineering of our cost structure. Adjusted Corporate Expenses are the portion of shared services costs not allocated to segments.

EARNINGS PER SHARE

• GAAP EPS was a loss of ($0.43) compared to a loss of ($2.08) in the prior year period. The quarterly loss was primarily due to the previously disclosed non-cash income tax adjustment as a consequence of the US valuation allowance related to our divested businesses, a further loss on the sale of our Wiley Edge business, and restructuring charges. See the accompanying reconciliation table for more information.
• Adjusted EPS of $0.84 was up 39% at constant currency due to higher adjusted operating income and a lower effective tax rate.

BALANCE SHEET, CASH FLOW, AND CAPITAL ALLOCATION (YTD)

• Net Debt-to-EBITDA Ratio (Trailing Twelve Months) was 2.0 compared to 1.9 in year-ago period.
• Net Cash provided by Operating Activities was up $28 million to $52 million mainly due to improved operating performance and timing of working capital.
• Free Cash Flow was up $44 million to a use of $1 million, driven by improved operating performance, lower capex, and the timing of working capital. Free Cash Flow is typically a use through nine months due to timing.
• Returns to Shareholders: Wiley allocated $93 million toward dividends and share repurchases, up from $87 million in the prior year. $35 million was allocated to share repurchases.

FISCAL 2025 OUTLOOK

Wiley is reaffirming its Fiscal 2025 growth outlook in the mid-to-high end of its ranges:

• Revenue: middle of range, equating to top line growth of approximately 3%. Research and Learning are reaffirmed at low-to-mid single digit and low single digit growth, respectively
• Adjusted EBITDA: middle of range, equating to high-single digit growth over prior year
• Adjusted EBITDA margin: high end of range of 23-24%
• Adjusted EPS: high end of range, equating to strong double-digit growth over prior year
• Free Cash Flow: reaffirmed at $125 million, equating to growth of approximately 10% over prior year

FISCAL 2026 TARGETS

The Company is raising its Fiscal 2026 margin target and reaffirming its Fiscal 2026 revenue and cash flow targets. Wiley will disclose its full guidance for Fiscal 2026 in June 2025.

EARNINGS CONFERENCE CALL

Wiley will conduct a conference call with investors to discuss this earnings release today at 10:00 am (ET). You can access this via webcast at investors.wiley.com, or directly at https://events.q4inc.com/attendee/253283908. U.S. callers, please dial (888) 210-3346 and enter the participant code 2521217#. International, please dial (646) 960-0253 and enter participant code 2521217#.

ABOUT WILEY

Wiley (NYSE: WLY) is one of the world’s largest publishers and a trusted leader in research and learning. Our industry-leading content, services, platforms, and knowledge networks are tailored to meet the evolving needs of our customers and partners, including researchers, students, instructors, professionals, institutions, and corporations. We enable knowledge-seekers to transform today’s biggest obstacles into tomorrow’s brightest opportunities. For more than two centuries, Wiley has been delivering on its timeless mission to unlock human potential. Visit us at Wiley.com and investors.wiley.com

*NON-GAAP FINANCIAL MEASURES

Wiley provides non-GAAP financial measures and performance results such as “Adjusted EPS,” “Adjusted Operating Income,” “Adjusted EBITDA,” “Adjusted Income before Taxes,” “Adjusted Income Tax Provision,” “Adjusted Effective Income Tax Rate,” “Free Cash Flow less Product Development Spending,” “organic revenue,” “Adjusted Revenue,” and results on a Constant Currency basis to assess underlying business performance and trends. Management believes non-GAAP financial measures, which exclude the impact of restructuring charges and credits and certain other items, and the impact of divestitures and acquisitions provide a useful comparable basis to analyze operating results and earnings. See the reconciliations of non-GAAP financial measures and explanations of the uses of non-GAAP measures in the supplementary information. We have not provided our 2025 outlook for the most directly comparable U.S. GAAP financial measures, as they are not available without unreasonable effort due to the high variability, complexity, and low visibility with respect to certain items, including restructuring charges and credits, gains and losses on foreign currency, and other gains and losses. These items are uncertain, depend on various factors, and could be material to our consolidated results computed in accordance with U.S. GAAP.

FORWARD-LOOKING STATEMENTS

This release contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Reliance should not be placed on forward-looking statements, as actual results may differ materially from those in any forward-looking statements. Any such forward-looking statements are based upon a number of assumptions and estimates that are inherently subject to uncertainties and contingencies, many of which are beyond the control of the Company and are subject to change based on many important factors. Such factors include, but are not limited to: (i) the level of investment in new technologies and products; (ii) subscriber renewal rates for the Company's journals; (iii) the financial stability and liquidity of journal subscription agents; (iv) the consolidation of book wholesalers and retail accounts; (v) the market position and financial stability of key online retailers; (vi) the seasonal nature of the Company's educational business and the impact of the used book market; (vii) worldwide economic and political conditions; (viii) the Company's ability to protect its copyrights and other intellectual property worldwide (ix) the ability of the Company to successfully integrate acquired operations and realize expected opportunities; (x) the ability to realize operating savings over time and in fiscal year 2025 in connection with our multiyear Global Restructuring Program and planned and completed dispositions; (xi) cyber risk and the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business; (xii) as a result of acquisitions, we have and may record a significant amount of goodwill and other identifiable intangible assets and we may never realize the full carrying value of these assets; (xiii) our ability to leverage artificial intelligence technologies in our products and services, including generative artificial intelligence, large language models, machine learning, and other artificial intelligence tools; and (xiv) other factors detailed from time to time in our filings with the SEC. The Company undertakes no obligation to update or revise any such forward-looking statements to reflect subsequent events or circumstances.

CATEGORY: EARNINGS RELEASES