WLY — John Wiley & Sons, Inc.

Summary of Wiley's Q4 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Revenue: Flat year-over-year; up 1% including currency impact.
• Adjusted EBITDA Margin: Increased by 220 basis points to 26.2%, a record high.
• Adjusted Operating Margin: Rose by 260 basis points to 17.7%.
• Adjusted EPS: Grew by 15%.
• Free Cash Flow: Up 55% to $195 million, with a conversion rate of 44%.
• Shareholder Returns: $174 million returned, including a record $100 million in share repurchases.

2. Strategic Updates and Business Highlights

• Growth Engines: Wiley has two main growth engines: Research (mid-single-digit growth) and AI/Data Analytics (significant growth with revenue increasing from $40 million to $49 million).
• Emerald Acquisition: Acquired for approximately $450 million, expected to enhance content and scale in research and AI.
• Partnerships: Strategic alliances with IQVIA and Open Evidence, and the launch of the Nexus content licensing service.
• Leadership Changes: New appointments in research and AI, including Jessica Kowalski from Microsoft.

3. Forward Guidance and Outlook

• Fiscal 2027 Revenue Growth: Expected to be low to mid-single digits, with research growth projected at mid-single digits.
• Adjusted EBITDA Margin: Forecasted to be between 26.5% and 27.5%.
• Adjusted EPS: Expected to rise to between $4.60 and $5.05, including a contribution from Emerald.
• Free Cash Flow: Projected to increase to $205 million, with Emerald expected to become accretive by fiscal 2028.

4. Challenges and Points of Concern

• Learning Segment Decline: Academic revenue down 5% and professional revenue down 10%, attributed to market challenges and prior year comparisons.
• Delayed Cash Collections: Late journal renewal signings pushed cash collections into Q1, though management views this as a non-recurring issue.
• Market Headwinds: Ongoing challenges in consumer and corporate spending impacting the learning segment.

5. Notable Q&A Insights

• AI Revenue Outlook: Management expects AI revenue to exceed $50 million in fiscal 2027, with a shift towards more recurring revenue.
• Emerald's Contribution: Emerald is projected to have a mid-single-digit growth profile, with a strong recurring revenue model and high customer retention.
• Learning Segment Recovery: Management anticipates improvement in the learning segment driven by digital growth and new product releases, although it is not expected to be a primary growth engine.
• Capital Allocation Strategy: Wiley remains committed to returning cash to shareholders while also focusing on organic investments and maintaining a balanced capital structure post-acquisition.

This summary encapsulates Wiley's financial performance, strategic initiatives, future guidance, and challenges faced during Q4 2026, providing a comprehensive overview for stakeholders.