HOBOKEN, N.J.--(BUSINESS WIRE)-- Wiley (NYSE: WLY), one of the world's largest publishers and a trusted leader in research and learning, today reported results for the second quarter ended October 31, 2024.
SECOND QUARTER HIGHLIGHTS
- High-single digit revenue growth in Learning from favorable market conditions and AI licensing
- Low single digit revenue growth in Research from solid demand to publish and modest improvement in Research Solutions offsetting a large year-over-year swing in legacy print and licensing revenue
- Continued strong margin improvement and EPS growth
SECOND QUARTER PERFORMANCE
- GAAP Results: Revenue of $427 million vs. $493 million in prior year due to foregone revenue from divested businesses, Operating Income of $64 million (+39%), and EPS of $0.74 (+$1.09)
- Adjusted Results at Constant Currency (excludes the impact of divested businesses) : Adjusted Revenue of $423 million (+3%), Adjusted Operating Income of $69 million (+32%), Adjusted EBITDA of $106 million (+14%), and Adjusted EPS of $0.97 (+36%)
MANAGEMENT COMMENTARY
" Continuous improvement is a way of life for us now, and it's beginning to pay off in our quality growth and margin expansion," said Matthew Kissner, Wiley President and CEO. "Learning has had a good year so far, both Academic and Professional, and Research delivered low-single digit growth with leading indicators and favorable comparisons signaling a better second half ahead. Additionally, we continue to see interest from tech companies and other corporate LLM developers for our high-value content and data to train and commercialize AI models."
Research
- Revenue of $262 million was up 2% or 1% at constant currency, with strong growth in gold open access, modest growth in institutional models, and improved solutions performance offsetting a year-over-year decline in legacy print and licensing revenue. Year-to-date, Research revenue was up 2% as reported and at constant currency.
- Adjusted EBITDA of $82 million was up 1% as reported and at constant currency due to revenue performance partially offset by investments to drive volume growth and publishing innovation. Adjusted EBITDA margin for the quarter was 31.3% compared to 31.6% in the prior year period.
Learning
- Revenue of $162 million was up 8% or 5% at constant currency and excluding one-time AI licensing revenue of $4 million. Strong underlying performance was driven by 11% growth for Professional or 8% at constant currency and ex-AI due to an improved retail channel environment and increased sell through. Academic saw 5% growth or 3% growth at constant currency and ex-AI driven by zyBooks digital courseware, inclusive access, and licensing. Year-to-date, Learning revenue was up 11%, or 2% at constant currency and ex-AI.
- Adjusted EBITDA of $67 million was up 24% or 23% at constant currency mainly due to revenue growth. Adjusted EBITDA margin for the quarter was 41.3% compared to 36.2% in the prior year period.
Corporate Expenses
- Adjusted Corporate Expenses of $43 million on an Adjusted EBITDA basis was up 1% or flat at constant currency. Year-to-date, Corporate Expenses on an Adjusted EBITDA basis was up 1% reported and at constant currency.
Businesses Held for Sale or Sold (HFS)
Our Held for Sale or Sold segment reflects the performance of those businesses for the periods owned. All businesses in this reporting segment have been sold. Wiley University Services was completed on January 1, 2024. The sale of Wiley Edge, with the exception of its India operation, was completed on May 31, 2024. The sale of Wiley Edge's India operation was completed on August 31, 2024. The sale of CrossKnowledge was also completed on August 31, 2024.
EPS
- GAAP EPS was $0.74 compared to a loss of ($0.35) in the prior year period. The year-over-year variance is largely due to higher impairment and restructuring charges in the prior year and foregone net income from businesses sold.
- Adjusted EPS of $0.97 was up 36% at constant currency due to higher Adjusted Operating Income and accrued interest income from divestitures.
Balance Sheet, Cash Flow, and Capital Allocation (YTD)
- Net Debt-to-EBITDA Ratio (Trailing Twelve Months) at quarter end was 2.2 compared to 2.0 in the year-ago period.
- Net Cash Used in Operating Activities was $94 million compared to $84 million in the prior year period mainly due to higher annual incentive compensation payments for prior year performance and the cash earnings impact from divested assets. Wiley does not provide adjusted cash flow metrics; results include sold businesses. Wiley's regular use of cash in the first half of the fiscal year is driven by the timing of cash collections for annual journal subscriptions, which are concentrated in Q3 and Q4.
- Free Cash Flow less Product Development Spending was a use of $130 million compared to a use of $132 million in the prior year, with higher annual incentive compensation payments for prior year performance offsetting lower capex. Capex of $36 million was below prior year by $12 million due to timing.
- Returns to Shareholders: Wiley allocated $64 million toward dividends and share repurchases, up from $61 million in the prior year, with $25 million used to acquire 557 thousand shares at an average cost per share of $44.89. In June 2024, Wiley raised its dividend for the 31st consecutive year.
FISCAL YEAR 2025 GROWTH OUTLOOK
Wiley is reaffirming its Fiscal 2025 growth outlook based on first half results and second half indicators. Wiley's revenue outlook is driven by favorable demand trends and performance indicators. Wiley's earnings outlook is driven by expected revenue growth and cost savings, while reflecting reinvestments to scale and optimize Research, modernize infrastructure and expand GenAI content licensing and capabilities. Wiley's cash flow outlook is driven by lower restructuring payments and favorable working capital partially offset by a year-over-year swing in incentive compensation payments.
Quarterly phasing in the second half of the year : The Company's projected growth in the second half of its fiscal year is expected to occur in Q4 due to strong momentum and favorable comparisons in Research.
| Metric ($millions, except EPS) |
Fiscal 2024 Results Ex-Divestitures |
Fiscal 2025 Outlook Ex-Divestitures |
| Adj. Revenue* |
$1,617 |
$1,650 to $1,690 |
| Research |
$1,043 |
Low to mid-single digit growth |
| Learning |
$574 |
Low-single digit growth |
| Adj. EBITDA* |
$369 |
$385 to $410 |
| Adj. EPS* |
$2.78 |
$3.25 to $3.60 |
| Free Cash Flow |
$114 |
Approx. $125 |
| *Excludes held for sale or sold businesses |
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The Company remains on track with its Fiscal 2026 targets.
EARNINGS CONFERENCE CALL
Scheduled for today, December 5 at 10:00 am (ET). Access webcast at Investor Relations at investors.wiley.com, or directly at https://events.q4inc.com/attendee/593717942. U.S. callers, please dial (888) 210-3346 and enter the participant code 2521217# . International callers, please dial (646) 960-0253 and enter the 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
