Photo credit: www.publishersweekly.com
Wiley Reports Quarterly Profit Improvement Amid Revenue Decline
Wiley has announced an upswing in profits for the quarter ending January 31, 2025, despite a 12% decrease in total revenue, which amounted to $405 million. Interestingly, when accounting for the revenue from divested businesses, sales showed a slight increase of approximately 1%. A more notable highlight from the report was an operating income of $51.8 million, a significant turnaround from a loss of $46.4 million in the same quarter the previous year.
According to Wiley’s CEO Matthew Kissner, this improvement is largely a result of ongoing “re-engineering efforts” that are yielding “tangible results.” He emphasized that the reorganization has not only improved margins but has also positively affected cash flow this fiscal year. As a result, Wiley has revised its profit margin projections for fiscal 2026. The restructuring process, initiated in June 2023, aims to cultivate a more focused and profitable company, a strategy that now appears to be effectively contributing to the firm’s financial performance.
On the revenue front, Wiley’s research division experienced a 4% increase, reporting $268 million in revenue. The company executed two significant recurring revenue agreements during the quarter, one with an Indian entity that grants access to Wiley materials for over 6,000 institutions, and another with a Brazilian organization reaching more than 430 institutions. Additionally, the quarter saw an expansion of an existing content licensing initiative for AI training, valued at $9 million. Excluding the impact from AI, sales in the quarter witnessed a 2% rise.
In contrast, the learning group faced challenges, with revenue declining by 6%, down to $137 million. The academic segment was particularly hard hit, experiencing a 10% drop in sales, while the professional division saw a minor decrease of 1%. Although no new AI deals were reported within the learning division, Wiley pointed out that when disregarding previous AI agreements, revenue for the nine-month period was only 0.6% down based on constant currency measures, compared to a reported 4% increase.
During a call with analysts, Kissner highlighted Wiley’s successful formation of vertical licensing agreements with various entities in the pharmaceutical sector and shared that the company’s project pipeline remains active. He noted that unlike earlier AI contracts focused on developing Large Language Models, the new agreements pertain to the use of Wiley content for the creation of proprietary tools. Although these newer deals are smaller in scale than prior arrangements with major technology firms, they provide an opportunity to engage with a broader range of companies.
Wiley’s executives conveyed a strong message regarding expected ongoing profit enhancement, not only for the fiscal year that concludes in April but also for fiscal 2026. Sales for fiscal 2025 are anticipated to rise by approximately 3%, with profit margins expected to reach the higher end of the 23% to 24% forecast, up from 22.8% in 2024. Furthermore, for fiscal 2026, Wiley anticipates low-to-mid single-digit revenue growth and has increased its adjusted EBITDA target to over 25%, moving away from the previous 24% to 25% range.
In light of recent developments, Kissner mentioned that Wiley is monitoring federal research funding closely, though he acknowledged that such funding constitutes only a minor portion of the overall journal title output.
Source
www.publishersweekly.com