Summary of Wiley's Q1 2027 Earnings Call

1Key Financial Results and Metrics

Total Revenue: $386 million, reflecting a 4% year-over-year increase.

Research Publishing Revenue: Increased by 12%, contributing $293 million, with $13 million from the Emerald acquisition.

Learning Revenue: Decreased by 20% to $93 million, impacted by prior year AI licensing comparisons and soft market conditions.

AI Revenue: $14 million in Q1, with an additional $14 million contracted for Q2 and Q3.

Adjusted EBITDA: $87 million, up 9%, with a margin increase of 130 basis points to 29.6%.

Adjusted EPS: Down 10% to $0.37, affected by higher interest expenses and restructuring costs. GAAP EPS reported as a loss of $0.23.

Free Cash Flow: A use of $70 million, an improvement from $100 million a year ago, primarily due to working capital timing.

2Strategic Updates and Business Highlights

Wiley is focusing on scaling new revenue streams, particularly in research and AI.

The company signed new AI licensing agreements and launched a spectral analysis API portfolio.

Integration of Emerald Publishing is ahead of schedule, with strong cultural and operational alignment.

The research publishing segment remains robust, with submissions up 31% and retention rates above 99%.

Wiley aims to leverage its extensive content portfolio to enhance AI and data analytics capabilities.

3Forward Guidance and Outlook

Wiley reaffirms its full-year guidance for organic revenue growth of low to mid-single digits, with research expected to grow at mid-single digits.

Adjusted EBITDA margin is projected to be between 26.5% and 27.5%.

Adjusted EPS is forecasted to be between $4.60 and $5.05, including approximately $0.10 from Emerald.

Free cash flow is expected to reach $205 million, up from $195 million, with Emerald initially dilutive before becoming accretive in fiscal 2028.

4Bad News, Challenges, or Points of Concern

The learning segment faced significant challenges, with a 20% revenue decline attributed to prior year AI licensing comparisons and soft demand in professional and academic markets.

Adjusted EPS decline reflects increased costs related to the Emerald acquisition and restructuring.

The company continues to experience lumpiness in AI revenue, which may affect predictability.

Competitive pressures in the learning market, particularly in retail, are causing inventory normalization challenges.

5Notable Q&A Insights

Management expressed confidence in maintaining mid-single-digit growth in research, supported by strong KPIs despite seasonal challenges.

The AI licensing business is evolving, with expectations for a more continuous revenue stream alongside lumpier licensing deals.

The integration of Emerald is progressing well, with positive early indicators and no significant surprises reported.

Partnerships, such as with IQVIA and Open Evidence, are seen as strategic growth opportunities, although revenue generation from these partnerships is still in early stages.

The learning business is expected to normalize as inventory issues resolve, with growth anticipated in digital content and inclusive access moving forward. Overall, Wiley's Q1 2027 results reflect a mixed performance with strong growth in research publishing and AI, countered by challenges in the learning segment. The company remains optimistic about its strategic initiatives and long-term growth prospects.