JOHN WILEY & SONS, INC. Q2 FY2025 earnings call

• General Progress: Revenue and profit performance in-line with expectations, investments starting to pay off, confident in full-year trajectory. AI initiatives underway, with leadership changes in finance, technology, and marketing. - Research Focus: Driving recovery and growth in Research, with AI applications in publishing, India's One Nation, One Subscription program, and reinvestment in research to expand market share. - Learning Focus: Strong performance in zyBooks, trade business recovery, and new content signings, with AI tailwinds contributing to growth. - AI Initiatives: Pillars of Productivity, Publishing Innovation, and Licensing and Application, with progress in tools, publishing efficiency, co-innovation program, and partnerships.

Research: Second quarter and year-to-date revenue were up 1% and 2% respectively. Q2 Research Publishing growth of 1% was driven by growth in gold open access in institutional models, offsetting an unusually large quarterly swing of $5 million in legacy print and licensing revenue. Adjusted EBITDA for Research rose 1%, with Q2 margin at 31.3% compared to 31.6% in the prior year period. Learning: Q2 revenue rose 7% (5% excluding AI), driven by academic (notably growth in zyBooks STEM courseware) and professional (improved retail environment and new content signings). Year-to-date, Learning's adjusted EBITDA margin was 35.2% versus 29.1% in the prior year.

• Full-year revenue projected $1.65 billion to $1.69 billion (2% to 4% growth). - Adjusted EBITDA expected to be in the range of $385 million to $410 million (4% to 11% growth), with a margin target of 23% to 24%. - Adjusted EPS expected to be in the range of $3.25 to $3.60 (17% to 29% growth). - Free cash flow anticipated to be approximately $125 million.

• Unusual quarterly phasing in financial results. - Potential impact of the political environment on business (too early to speculate). - Accuracy issues with AI tools in publishing innovation.

Q: Momentum in the learning business A: Jay Flynn mentioned optimism in achieving guidance, driven by zyBooks growth, trade business recovery, new content signings, and AI revenue tailwinds Q: Trends in research article submissions and India agreement A: Jay Flynn discussed the India One Nation, One Subscription agreement and article submission trends, noting growth in Asia and recovery in Western markets Q: Cost rationalization opportunities A: Matt Kissner and Chris Caridi talked about technology modernization as an area of focus and continuous margin improvement as an ongoing effort Q: Collections from divested businesses A: Chris Caridi stated anticipation of getting funds from divested businesses, with no specific timing for the largest outstanding balance related to the university services business Q: Capital allocation and IR outreach A: Chris Caridi mentioned balanced capital allocation and plans to hold an Investor Day in the new calendar year to share progress