John Wiley & Sons, Inc. Q2 FY2026 earnings call

• Research showed strength with 7% growth in research publishing and momentum in AI, with record worldwide submissions. • Addressed learning challenges, noting external factors like Amazon inventory changes and soft consumer spending, and outlined mitigation strategies like prioritizing upside areas and pricing strategies. • Highlighted strategic priorities: leading in research with strong revenue growth and EBITDA margin improvement; delivering growth in AI and adjacent markets with licensing projects and innovation in content licensing; driving operational excellence through technology transformation, cost discipline, and AI-driven productivity. • Emphasized the resiliency of the research business due to peer-reviewed content's essential role, high customer retention, and growth in research output. • Outlined growth factors in content (expanding journal portfolio), platforms (research exchange and AI gateway), and markets (geographic expansion and corporate R&D growth). • Discussed content licensing models, including archival content for LLM training and knowledge feeds for vertical AI applications. • Mentioned updates to AI gateway, research exchange platform, and partnerships with AI players.

Research: Delivered 5% growth with a 220 basis point improvement in EBITDA margin to 33.5%. Research publishing had 7% revenue growth driven by record submissions, 28% growth in author-funded open access, and AI revenue of $5 million in Q2 with year-to-date $35 million. Research solutions declined 6% due to lower corporate spending. Learning: Down 11% in the quarter, driven by headwinds in professional and academic. Professional declined 16% impacted by retail channel dynamics and softer consumer spending. Academic declined 8% affected by retail dynamics and an 8% enrollment decline in undergraduate computer science. Through the half, research revenue and adjusted EBITDA were up 5% and 8% respectively, while learning revenue was down 10% with adjusted EBITDA down 12%.

• Reaffirmed adjusted EBITDA margin of 25.5% to 26.5%, up from 24% last year. • Adjusted EPS expected to be $3.90 to $4.35, up from $3.64 last year. • Free cash flow expected to be approximately $200 million. • Revenue growth now expected in the low single digits, down from prior mid-single digits range, with research demand tracking better but learning down for the year. • AI revenue moderately ahead of last year's $40 million. • Q3 anticipated to be lighter due to AI project timing headwind, with growth weighted to Q4. • CapEx expected to be comparable to last year's $77 million.

• Learning segment facing challenges from Amazon inventory adjustments, soft consumer spending, and enrollment declines in select disciplines like computer science. • Soft corporate spending impacting consumption of personality and team development programs in learning.

Q: About research growth, any incremental upside potential given strong article submission growth?

A: Matthew and Jay discussed that research is expected to grow at the top of market growth, with strong article roles as a leading indicator. Jay mentioned being at the high end of market growth and will watch renewal season.

Q: Color on $6 million AI licensing revenue in Q2, pipeline of opportunities?

A: Craig said the $6 million deal was with an existing LLM customer, a repeat customer, and they feel good about the length in the LLM training model. Jay added focus on deep relationships for recurring revenue and product innovation.

Q: Learning decline causes, end market demand vs Amazon inventory?

A: Matthew noted early indications of Amazon inventory ordering pattern normalizing, with no structural change in end-user behavior. Craig and Jay said learning challenges are cyclical, likely to normalize.

Q: Buybacks vs delevering in back half?

A: Craig said they have a disciplined capital allocation approach, see opportunities for share buybacks while managing leverage, and are opportunistic with buybacks given cash flow guide.