Executive Summary / Key Takeaways

• John Wiley & Sons (WLYB) is executing a multi-year transformation, shifting from a traditional publisher to a focused digital knowledge company, leveraging its core Research and Learning segments.
• The company has successfully completed strategic divestitures and implemented a significant cost reduction program, driving material margin expansion and improved profitability in fiscal year 2025.
• WLYB is positioning itself as an early beneficiary in the evolving AI landscape, licensing its high-quality content for model training and application development, particularly targeting the corporate R&D market.
• Strong performance indicators in the core Research segment, including robust submission and output growth and favorable renewal trends, underpin confidence in future revenue growth.
• Management has raised the fiscal year 2026 Adjusted EBITDA margin target and reaffirmed the free cash flow target, signaling confidence in continued operational improvements and financial performance.

John Wiley & Sons, Inc. (NYSE: WLYB) stands as a venerable institution in the world of knowledge, tracing its roots back to a print shop established in Lower Manhattan in 1807. Over its 218-year history, the company has demonstrated remarkable resilience, adapting through numerous economic cycles and technological shifts. Today, Wiley is undergoing a significant transformation, pivoting from its print-centric origins to become a predominantly digital leader in research and learning. This evolution is not merely a change in format but a strategic realignment aimed at focusing on core strengths, streamlining operations, and capitalizing on emerging opportunities in the global knowledge economy.

The competitive landscape Wiley navigates is populated by large, diversified players like RELX PLC (RELX) and Pearson PLC (PSO), as well as more specialized entities like McGraw-Hill. RELX, a dominant force in Scientific, Technical, and Medical (STM) publishing, often exhibits higher operating margins and faster innovation cycles, partly due to significant R&D investment and proprietary data assets. Pearson holds a strong position in global education publishing and digital learning, leveraging adaptive learning technologies and extensive brand recognition. McGraw-Hill competes in professional and educational publishing, known for cost efficiency in content production. While competitors like RELX may lead in certain efficiency metrics or R&D scale, Wiley differentiates itself through its deep content libraries, trusted brands, enduring author and society relationships, and category leadership, particularly in areas like STM journals and digital courseware. The company's strategic divestitures of non-core assets like University Services, Wiley Edge, and CrossKnowledge were undertaken to sharpen this focus, allowing for greater investment and attention on the most profitable and strategically aligned businesses: Research and Learning.

Wiley's competitive positioning is increasingly underpinned by its technological capabilities. The company operates key platforms such as Wiley Online Library for research content, WileyPLUS and zyBooks for digital courseware in Learning, and the Atypon publishing platform for societies and publishers. These platforms are crucial for delivering content, managing workflows, and providing enhanced user experiences. A significant technological initiative is the multi-year enterprise modernization program, including the development of a new Research Publishing platform, expected to be fully launched by the beginning of fiscal year 2026. This platform is designed to improve publishing cycle times, expand capacity, reduce cost per article, and enable new content offerings. Management anticipates that streamlining the tech organization, rationalizing the application landscape, and leveraging AI-driven software development tools will lead to substantial reductions in technology costs over time, contributing to margin expansion.

In the Research segment, Wiley provides peer-reviewed journals, content platforms, and related solutions, generating approximately 64% of consolidated revenue in fiscal year 2025. This segment is highly digital (96% of revenue) and benefits from a large recurring revenue base. Fiscal year 2025 saw a 3% increase in Research revenue (constant currency), driven by growth in author-funded open access, institutional models, AI licensing revenue, and Research Solutions, partially offset by declines in ancillary and print products. Open access article output grew approximately 16% year-over-year. The segment's Adjusted EBITDA margin stood at 32.1% in FY25, with Adjusted EBITDA increasing 5% constant currency, primarily due to higher revenue. Key operational indicators remain strong, with submissions growing 19% and output growing 8% in FY25, signaling a healthy pipeline. The company successfully completed 99% of its calendar year 2025 journal renewals, reporting good growth. Landmark multi-year agreements in India and Brazil are expected to expand access and contribute to future revenue streams.

The Learning segment, contributing approximately 35% of FY25 consolidated revenue, encompasses academic and professional publishing, digital courseware, and assessments. This segment is also increasingly digital (60% of revenue in FY25). Learning revenue increased 2% in FY25 (constant currency), propelled by licensing revenue (including AI), and growth in Academic driven by steady market conditions, the shift to inclusive access, and growth in digital content and courseware. This growth offset decreases in Academic print book sales and retail channel softness in Professional. The zyBooks STEM courseware continues to be a strong performer, showing double-digit growth. Professional book title signings were up 16% in FY25, expected to benefit future periods. The Learning segment demonstrated significant margin improvement, with Adjusted EBITDA increasing 9% constant currency in FY25, and the Adjusted EBITDA margin reaching 37.4%, an impressive 800 basis point improvement since FY2023.

Financially, Wiley's transformation efforts are yielding tangible results. For fiscal year 2025, Adjusted Revenue, excluding divested businesses, increased 3% on a constant currency basis. Adjusted Operating Income saw a substantial 29% increase constant currency, driven by revenue growth and lower operating expenses. Adjusted EBITDA increased 8% constant currency, reaching $397.7 million, resulting in a 24% Adjusted EBITDA margin for the year. This represents a 120 basis point improvement over the prior year.

The company's liquidity position appears solid, with $85.9 million in cash and cash equivalents as of April 30, 2025, and approximately $500.7 million in unused borrowing capacity under its credit facilities. Net cash provided by operating activities was $202.6 million in FY25. Free Cash Flow less Product Development Spending was $125.9 million, up from $114.3 million in FY24.

The company's net debt to EBITDA ratio was 1.8 at year-end FY25, prior to deploying recent divestiture proceeds. Post-year end, Wiley secured $120 million in cash from the University Services divestiture, which is earmarked for debt reduction, expected to save approximately $5 million annually in cash interest.

The company has maintained a consistent return of capital to shareholders, increasing its dividend for 31 consecutive years and repurchasing $60 million in shares in FY25.

A key element of Wiley's forward strategy is capitalizing on the opportunities presented by Artificial Intelligence. The company's high-quality, authoritative content in science, medicine, technology, engineering, and business is valuable for training large language models and developing vertical-specific AI applications. AI licensing revenue totaled $40 million in fiscal year 2025, up from $23 million in the prior year. While initial large-scale training agreements are non-recurring, Wiley is actively building a pipeline of opportunities for recurring licensing arrangements and integrating its content and data into corporate R&D workflows. The company is also leveraging AI internally for productivity gains, publishing innovation (e.g., reducing article turnaround times, detecting research fraud), and enhancing customer service.

Looking ahead, management has provided concrete guidance reflecting confidence in continued progress. For fiscal year 2026, revenue growth is expected in the low to mid-single digits. The Adjusted EBITDA margin target has been raised to a range of 25.5% to 26.5%, up from the previous target of 24% to 25%. This upward revision is primarily attributed to expected benefits from rationalizing the cost structure, particularly within corporate shared services. Adjusted EPS is projected in the range of $3.90 to $4.35, a significant increase from $3.64 in FY25. The free cash flow target for FY26 is reaffirmed at approximately $200 million, driven by expected EBITDA growth, lower restructuring payments, and favorable working capital. Capital expenditures are expected to be comparable to FY25 levels.

While the outlook is positive, potential risks and challenges remain. The rapidly evolving AI landscape presents both opportunities and risks, including potential disruption, increased competition, and the challenge of protecting intellectual property from unauthorized use by generative AI developers. The execution of ongoing restructuring and enterprise modernization programs carries inherent risks of disruption or failure to achieve anticipated cost savings. Potential reductions in US federal funding for research could impact demand from library customers, although Wiley's geographic diversification and the relatively small percentage of its output directly tied to this funding provide some mitigation. Global economic and geopolitical conditions, including inflation and trade tensions, could also impact financial results. Maintaining research integrity in an era of increasing digital manipulation is critical to protecting Wiley's reputation and business.

Conclusion

John Wiley & Sons is demonstrating tangible progress in its strategic transformation, successfully streamlining its operations and focusing on its core Research and Learning businesses. The company's deep content expertise, established brands, and evolving technological capabilities, particularly in leveraging AI, position it to capitalize on the enduring demand for trusted knowledge and the emerging opportunities in the corporate R&D sector. Fiscal year 2025 results show clear improvements in profitability and margin expansion, driven by cost efficiencies and growth in core areas and AI licensing. With a raised margin target and reaffirmed free cash flow outlook for fiscal year 2026, management signals confidence in its ability to continue delivering enhanced financial performance. While challenges related to market dynamics, competitive pressures, and the execution of strategic initiatives persist, Wiley's focused strategy and operational discipline provide a clear path for potential value creation for investors.