John Wiley & Sons, Inc. (WLY) is a global leader in research and learning, delivering authoritative content and data-driven insights to institutions, corporations, researchers, and learners worldwide. With a history spanning over two centuries, the company has established itself as a trusted and resilient player in the rapidly evolving landscape of academic and professional publishing.
Business Overview and History Wiley was founded in 1807 in New York City as a small publisher of almanacs, guidebooks, and other reference materials. Over the next century, the company gradually expanded its publishing business, diversifying into areas such as educational materials, scholarly journals, and professional development resources. A major milestone came in the late 19th century when Wiley began publishing scientific and technical journals, laying the foundation for its successful research publishing business. By the mid-20th century, Wiley had become a leading global publisher of high-quality academic and professional content.
In the late 20th century, Wiley faced challenges as the publishing industry underwent major technological disruptions. The company responded by investing heavily in digital publishing capabilities and transitioning its business model towards electronic content and services. This strategic move allowed Wiley to maintain its leadership position despite the decline of traditional print publishing.
Today, the company operates through three primary segments: Research, Learning, and Held for Sale or Sold. The Research segment provides peer-reviewed scientific, technical, and medical (STM) publishing, content platforms, and related services to academic, corporate, and government customers, as well as academic societies and individual researchers. The Learning segment offers scientific, professional, and education print and digital books, digital courseware, and assessment services to libraries, corporations, students, professionals, and researchers. The Held for Sale or Sold segment includes businesses that were divested in recent years, such as University Services, Wiley Edge, and CrossKnowledge.
Wiley's operations are geographically diversified, with a significant presence in Asia-Pacific, EMEA, and North America. The company's content and solutions cater to a global audience, and its revenue streams are well-balanced, with approximately 48% of revenue (excluding the Held for Sale or Sold segment) being recurring in nature.
Financial Performance and Resilience Wiley has demonstrated remarkable financial resilience over the years, navigating various economic cycles and periods of disruption. For the fiscal year ended April 30, 2024, the company reported total revenue of $1.87 billion and a net loss of $200.3 million, primarily due to impairment charges and other unusual items. However, the company's underlying performance remained strong, with normalized EBITDA of $396.8 million and a normalized net income of $82.4 million.
In the most recent quarter (Q3 FY 2025), Wiley reported revenue of $404.6 million, down 12% year-over-year. This decrease was primarily due to the divestiture of certain businesses. Excluding the divested businesses, Adjusted Revenue increased 1% on a constant currency basis, driven by 5% growth in the Research segment offset by a 6% decline in the Learning segment. The company reported a net loss of $23 million for the quarter.
Financials The company's financial ratios paint a picture of a well-capitalized and liquid organization. As of April 30, 2024, Wiley had a current ratio of 0.52, a quick ratio of 0.51, and a debt-to-equity ratio of 1.20. The company's free cash flow for the fiscal year 2024 was $105.9 million, highlighting its ability to generate substantial cash flow to support its operations and investments.
For the nine months ended January 31, 2025, Wiley reported Adjusted Operating Income of $161.6 million, an increase of 38% on a constant currency basis, reflecting the benefits of higher revenue, lower costs, and productivity improvements. Adjusted EBITDA grew 12% to $272 million over the same period.
Liquidity Wiley's liquidity position remains strong, as evidenced by its ability to generate significant free cash flow and maintain healthy financial ratios. As of January 31, 2025, the company had $104.5 million in cash and cash equivalents. Additionally, Wiley has a $1.11 billion revolving credit facility, of which $415.6 million was unused as of the same date. This liquidity provides the company with the flexibility to invest in growth opportunities, manage debt, and navigate potential economic challenges.
Segmental Performance and Trends Wiley's Research segment has been a consistent performer, accounting for approximately 60% of the company's total revenue in fiscal year 2024. This segment has demonstrated resilient growth, driven by strong demand for peer-reviewed scientific, technical, and medical (STM) content, as well as the expansion of the company's open access publishing and transformational read-and-publish agreements with institutions and consortia.
For the nine months ended January 31, 2025, the Research segment generated $679.5 million in revenue, up 3% on a constant currency basis compared to the prior year period. This increase was driven by growth in author-funded open access, content rights projects for training generative AI large language models, and institutional models, partially offset by declines in legacy print and licensing revenue. Open access article output grew approximately 14% compared to the prior year.
The Learning segment, which accounted for approximately 35% of Wiley's total revenue in fiscal year 2024, has faced some challenges in recent years due to the shifting landscape of higher education and professional publishing. However, the company has been proactive in adapting its strategies, focusing on digital offerings, assessment services, and high-growth areas such as STEM courseware.
For the nine months ended January 31, 2025, the Academic product line within the Learning segment generated revenue of $233.6 million, up 4% on a constant currency basis. This growth was driven by $11 million in content rights projects for training generative AI models and growth in the zyBooks digital courseware offering, partially offset by declines in print book and other digital content sales. The Professional product line generated revenue of $189.4 million, up 5% on a constant currency basis, due to generative AI content rights projects and an increase in print book sales, partially offset by declines in licensing revenue and other digital content.
The Held for Sale or Sold segment, which includes businesses that have been divested in recent years, contributed the remaining 5% of Wiley's revenue in fiscal year 2024. For the nine months ended January 31, 2025, revenue for this segment declined 92% to $17.4 million as a result of these divestitures, including the sales of CrossKnowledge, Wiley Edge, University Services, and Tuition Manager.
Emerging Opportunities in AI and Corporate Partnerships Wiley has identified significant opportunities in the field of artificial intelligence (AI), both in terms of content licensing for model training and in leveraging AI-powered tools to enhance its own research and learning offerings. The company has already executed several high-profile AI licensing agreements, generating $30 million in revenue year-to-date.
Additionally, Wiley is expanding its partnerships with research-intensive corporations, providing content, data, and analytics solutions to support their internal R&D efforts. This strategic initiative represents a promising long-term growth opportunity, as the company leverages its extensive content library and expertise to serve the evolving needs of the corporate research ecosystem.
Geographic Performance Wiley has a geographically diverse revenue mix, with approximately 45% coming from Asia Pacific, 30% from EMEA, 20% from North America, and 5% from other regions. This global footprint helps insulate the company from regional economic fluctuations and provides access to diverse growth opportunities across markets.
Industry Trends The global research and publishing industry has seen steady growth, with a compound annual growth rate (CAGR) of approximately 3-5% in recent years. Demand for scientific, technical, and medical (STM) content remains strong, driven by increasing R&D spending worldwide. Wiley's focus on these areas positions it well to capitalize on these industry trends.
Risks and Challenges While Wiley has demonstrated resilience, the company faces several risks and challenges that investors should be aware of. These include:
1. Ongoing shifts in the higher education and professional publishing landscape, which may impact the performance of the Learning segment. 2. Potential changes in government research funding policies, which could affect the company's Research segment. 3. Increasing competition from other academic and professional publishers, both traditional and new entrants. 4. Successful integration and optimization of recent and future acquisitions. 5. Effective management of the company's transition to digital and AI-powered offerings.
Outlook and Guidance Wiley's strong market position, diversified revenue streams, and focus on high-growth areas like open access publishing and AI-powered solutions position the company well for continued success. The company has reaffirmed its fiscal 2025 outlook and fiscal 2026 targets, demonstrating confidence in its strategic direction.
For fiscal year 2025, Wiley expects: - Revenue to land near the midpoint of the $1.65 billion to $1.69 billion range, representing around 3% growth. - Adjusted EBITDA to be near the midpoint of the $385 million to $410 million range, reflecting high single-digit growth. - Adjusted EBITDA margin to be at the high end of the 23% to 24% range. - Adjusted EPS to be at the high end of the $3.25 to $3.60 range, delivering strong double-digit growth over the prior year. - Free cash flow of approximately $125 million, an improvement from $114 million in the prior year.
Looking ahead to fiscal year 2026, Wiley has raised its margin target to be above 25%, up from the original 24% to 25% range. The company is reaffirming its fiscal 2026 free cash flow target of $200 million, up from $114 million in fiscal 2024 and the projected $125 million in fiscal 2025. Wiley continues to expect revenue growth in the low to mid-single-digit range for fiscal 2026.
Conclusion As an established leader in research and learning, Wiley's long-term prospects remain promising. The company's resilience, innovative mindset, and ability to adapt to industry changes make it an intriguing investment opportunity for those seeking exposure to the dynamic and evolving publishing and information services sector. With a strong focus on digital transformation, AI integration, and strategic partnerships, Wiley is well-positioned to navigate the challenges and capitalize on the opportunities in the rapidly evolving landscape of academic and professional publishing.