WLYB — John Wiley & Sons, Inc.

Summary of WLYB Q3 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: Up 1% year-over-year (flat at constant currency).
• Adjusted Operating Income: Increased by 22%.
• Adjusted EBITDA: Up 12%, with an adjusted EBITDA margin improvement of 250 basis points.
• Adjusted EPS: Grew by 19%, driven by operational performance and a lower share count.
• Operating Cash Flow: Nearly doubled to $103 million.
• Share Buybacks: Increased to $70 million year-to-date, with a target of $100 million for the full year.

2. Strategic Updates and Business Highlights

• Research Publishing: Revenue grew by 4% (excluding AI revenue), with a 26% increase in article submissions. Migration of journals to the Research Exchange platform is over 80% complete.
• AI and Data Services: Year-to-date AI revenue reached $42 million, with expectations to hit $45-50 million by year-end. New partnerships with IQVIA and Open Evidence were highlighted.
• Cost Management: Corporate expenses down 21% year-over-year, contributing to margin expansion.
• Technology Transformation: Partnership with Virtusa announced to enhance operational efficiencies and support AI initiatives.
• Geographic Growth: Strong performance noted in China, India, North America, and Europe, with increasing submissions and output.

3. Forward Guidance and Outlook

• Fiscal 2026 Guidance: Adjusted EBITDA margin raised to the high end of 25.5% to 26.5%. Adjusted EPS expected to be at the high end of $3.90 to $4.35.
• Revenue Growth: Anticipated to be in the low single digits, with Research expected to finish strong and Learning facing challenges.
• Fiscal 2027 Outlook: Continued growth in Research and AI revenue anticipated, with a focus on operational excellence and portfolio optimization.

4. Challenges and Points of Concern

• Learning Segment: Revenue declined by 2%, with Professional learning facing headwinds from corporate spending cuts and inventory management issues at Amazon.
• Market Conditions: Ongoing macroeconomic challenges impacting Learning, although some stabilization is expected.
• Regulatory Risks: Potential impacts from ongoing copyright lawsuits related to AI, with significant cases still in process.

5. Notable Q&A Insights

• AI Revenue Growth: Management expressed confidence in the evolving AI market, noting a shift from nonrecurring to recurring revenue models, with expectations for significant growth in the coming years.
• Partnership with Virtusa: Expected to drive productivity and agility, contributing to future margin expansion.
• Geographic Strengths: Growth is broad-based across multiple regions, not concentrated in any single geography, indicating resilience in the global research ecosystem.
• Learning Segment Strategy: Management is focusing on higher-value franchises and remains open to evaluating the Professional segment for strategic fit.

Overall, WLYB reported solid financial results with a strong focus on AI and research growth, while navigating challenges in the Learning segment and external market pressures. The company remains optimistic about future growth driven by strategic partnerships and operational efficiencies.