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• Revenue: Up 1%, driven by 5% growth in research, offset by a 6% decline in learning.

• Operating Margin: Increased by 280 basis points to 14.2%.

• Adjusted EBITDA Margin: Improved by 50 basis points to 23.2%.

• Adjusted EPS: Increased by 39% due to higher adjusted operating income and a lower adjusted effective tax rate.

• Research Segment Revenue: Increased 5% in Q3 and 3% year-to-date.

• Learning Segment Revenue: Decreased 6% in Q3 but rose 4% year-to-date.

• Free Cash Flow: Expected to reach $125 million for fiscal 2025.

• AI Licensing Revenue: Generated $30 million year-to-date.

• Net Debt-to-EBITDA Ratio: 2.0 at the end of January.

• Warning! GuruFocus has detected 3 Warning Signs with MLR.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• John Wiley & Sons Inc (NYSE:WLY) reported a 5% growth in its Research segment, driven by AI licensing and Open Access programs.

• The company achieved a 280 basis point improvement in operating margin and a 50 basis point increase in adjusted EBITDA margin.

• Recurring revenue models, which account for nearly 75% of the Research segment, demonstrate strong health with solid pricing power.

• John Wiley & Sons Inc (NYSE:WLY) has a strong balance sheet with consistent cash generation, evidenced by 31 consecutive years of dividend increases.

• The company is an early beneficiary of AI development, with emerging long-term opportunities in the corporate sector, particularly in research and development.

Negative Points

• The Learning segment experienced a 6% decline in revenue due to challenging year-over-year comparisons and softness in academic books.

• There is economic uncertainty, including consumer confidence, inflation, tariffs, policy swings, and geopolitical unrest, which could impact future performance.

• The company faces potential impacts from US government actions on research funding, although it does not anticipate any near-term effects.

• Corporate unallocated expenses increased by 9%, reflecting investments in enterprise modernization and consulting fees related to strategic initiatives.

• The company anticipates restructuring charges from its ongoing cost optimization and efficiency initiatives.

Q & A Highlights

Q: What are the drivers behind the upward revision of the 2026 margin target? A: Matthew Kissner, President and CEO, explained that the revision is primarily driven by rationalizing the cost structure, particularly in corporate shared services. Christopher Caridi, Interim CFO, added that they expect a 100-plus basis point improvement from these actions, aiming for sustainable value and permanent margin improvement.