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JOHN WILEY & SONS, INC. (WLY)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 2026 came in line with internal expectations: Adjusted Revenue $397.0M (+1% CC), Adjusted EPS $0.49 (+2%), and Adjusted EBITDA $70.4M (-3%), while GAAP EPS improved to $0.22 from (-$0.03) YoY .
  • Against Wall Street consensus, revenue was a significant beat ($396.8M vs $375.0M*), Adjusted EPS was essentially in line ($0.49 vs $0.50*), and EBITDA missed ($64.2M vs $73.2M*) due to mix (Nexus partner content at lower margins) and timing .
  • Research grew mid-single digits on AI licensing ($29M recognized in Q1) and strong open access momentum; Learning declined 7% on a tough AI comp and Professional softness, but margins held/improved .
  • FY26 outlook reaffirmed: Adjusted EBITDA margin 25.5–26.5%, Adjusted EPS $3.90–$4.35, FCF ≈$200M; dividend raised for 32nd consecutive year and share repurchase authorization increased to $250M (25% higher than 2020) .
  • Stock reaction catalyst narrative: revenue beat and AI leadership (Anthropic partnership) vs near-term margin mix headwinds; management reiterated confidence in Q2 and rest of year driven by strong publishing pipeline and cost savings ramp .

What Went Well and What Went Wrong

What Went Well

  • AI commercialization: executed a landmark ~$20M licensing project (including $16M of Nexus partner content); total AI revenue realized was $29M in Q1 across Research and Learning . “We delivered $29,000,000 in AI licensing revenue this quarter alone… demonstrating the market’s recognition of our leadership position” .
  • Strong Research fundamentals: Submissions +25% and output +13% YoY, with robust momentum across geographies and record open access submissions in July; Research Solutions revenue +45% (CC +44%) on Nexus . “July was a record month for Open Access submissions” .
  • Capital returns and balance sheet: dividend raised for the 32nd year and buybacks of ~$14M; net debt-to-EBITDA (ttm) improved to 1.9; ~$120M University Services proceeds used to reduce debt .

What Went Wrong

  • Margin mix and timing: Adjusted EBITDA -3% and margin 17.8% (vs 18.6% prior year) as Nexus partner content carried ~45% EBITDA margin vs ~75% on own content, and Research faced prior-year renewal timing headwinds; corporate expenses had a temporary ~$4M lift from consulting .
  • Learning softness: Total Learning revenue -7% (-8% CC) driven by Professional retail channel and lapping prior-year AI revenue (Academic $95M to $55M; Professional $60M to $59.6M in Q1); still, Learning EBITDA margin ticked up to 27.4% .
  • GAAP tax rate volatility: GAAP effective tax rate was 33.9% (prior-year 106.2% impacted by valuation allowance), highlighting continued non-GAAP adjustments and tax normalization dynamics .

Financial Results

MetricQ3 2025Q4 2025Q1 2026
Revenue ($USD Millions)$404.6 $442.6 $396.8
GAAP Diluted EPS ($)($0.43) $1.25 $0.22
Adjusted EPS ($)$0.84 $1.37 $0.49
Operating Income Margin (%)12.8% 17.3% 7.8%
Adjusted EBITDA ($USD Millions)$93.9 $125.6 $70.4
Adjusted EBITDA Margin (%)23.2% 28.4% 17.8%
Net Income Margin (%)(5.7%) 15.4% 2.9%
Q1 2026 vs Estimates (S&P Global)Consensus*ActualBeat/Miss
Revenue ($USD Millions)$375.0*$396.8 Beat
Primary EPS ($)$0.50*$0.49 In line/slight miss
EBITDA ($USD Millions)$73.2*$64.2*Miss

Values with asterisk (*) retrieved from S&P Global.

Segment Breakdown

Segment Revenue ($USD Millions)Q3 2025Q4 2025Q1 2026
Research Publishing$225.9 $243.1 $231.8
Research Solutions$41.7 $37.7 $49.9
Research Total$267.5 $280.7 $281.7
Learning Academic$78.8 $100.1 $55.5
Learning Professional$58.3 $61.7 $59.6
Learning Total$137.1 $161.9 $115.1

KPIs

KPIQ3 2025Q4 2025Q1 2026
Research Submissions Growth (%)+18% +19% (FY) +25%
Research Output Growth (%)+8% +8% (FY) +13%
AI Licensing Revenue ($USD Millions)$9 (training) n/a$29
Net Debt / EBITDA (ttm)2.0 1.8 1.9

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2025)Current Guidance (Q1 2026)Change
Adjusted Revenue GrowthFY 2026Low-to-mid single digit Low-to-mid single digit Maintained
Adjusted EBITDA MarginFY 202625.5%–26.5% 25.5%–26.5% Maintained
Adjusted EPS ($)FY 2026$3.90–$4.35 $3.90–$4.35 Maintained
Free Cash Flow ($USD Millions)FY 2026≈$200 ≈$200 Maintained
DividendOngoingRaised for 31st consecutive year Raised for 32nd consecutive year Raised
Share Repurchase AuthorizationOngoingPrior program; FY25 buybacks $60M New $250M authorization (+25% vs 2020) Increased

Earnings Call Themes & Trends

TopicQ-2 (Q3 2025)Q-1 (Q4 2025)Current (Q1 2026)Trend
AI/technology initiativesExpanded training deal; first vertical-specific pharma/industrial pilots Third large tech training deal; $40M FY AI revenue ~$20M deal incl. $16M Nexus; Anthropic partnership; inference pilots ongoing Broadening scope; deepening partnerships
Research open access & submissionsSubmissions +18%, output +8%; double-digit OA FY submissions +19%, output +8%; strong renewals Submissions +25%, output +13%; record OA submissions Accelerating
Regional trendsIndia “one nation, one subscription”; Brazil TA expansion High-growth markets momentum; CY25 renewals strong Output mix: APAC 45%, EMEA 30%, NA 20% Diversifying
Macro/Professional retailSeasonal Academic softness Professional retail softness Professional retail channel slower; monitoring consumer Persistent headwind
Publishing platform & integrityPlatform migration progress, refer/transfer AI 1,400+ journals on new submission system; 700+ on peer review 1,000 journals integrated; 25 integrity checks; ~70% fewer problematic citations Scaling + integrity focus
Regulatory/legal——Industry class action settlement regarding pirated content seen as pivotal win for IP Supportive backdrop

Management Commentary

  • “We delivered $29,000,000 in AI licensing revenue this quarter alone, up from $17,000,000 in the prior year period, demonstrating the market’s recognition of our leadership position.”
  • “Strategic margin mix… $16,000,000 of Nexus partner content… at 45% EBITDA margins versus approximately 75% on deals with our own content.”
  • “Q1 was noisy, but in line with our overall expectations… we have strong confidence in Q2 and the rest of the year.”
  • “We increased our annual dividend for the thirty second consecutive year… and the Board approved a $250,000,000 repurchase authorization, a 25% increase over our previous program.”
  • “We saw a temporary $4,000,000 increase [in corporate expenses]… projects are now complete… expect corporate expenses to decline starting in Q2.”

Q&A Highlights

  • Anthropic partnership: Integration via MCP to connect Claude users to Wiley’s vectorized database for institutional access; viewed as an upsell vector and to underpin subscriptions rather than immediate revenue driver .
  • Nexus economics: ~$20M total AI deal with $16M partner content; lower margins (~45% EBITDA) vs ~75% on Wiley-only content; additive, not substitutive to own-content licensing .
  • Journal renewals: CY2026 renewal season runs Nov–Apr; entering with strong momentum from CY2025 outcomes; no early concerns .
  • Professional retail softness: Slower ordering patterns; watching consumer backdrop; Assessments and STEM courseware showed strength .
  • Corporate expenses: ~$4M one-time lift from strategic consulting and modernization; cost savings expected to ramp from Q2 onward .
  • Capital allocation: Continued dividend commitment, opportunistic buybacks under expanded authorization, debt reduction from $120M divestiture proceeds .

Estimates Context

  • Revenue beat: Q1 revenue $396.8M vs S&P Global consensus $375.0M* driven by AI licensing ($29M) and open access growth, offsetting prior-year renewal timing .
  • EPS essentially in line: Adjusted EPS $0.49 vs $0.50*; GAAP EPS was $0.22 (note analysts often focus on adjusted) .
  • EBITDA miss: Actual ~$64.2M* vs consensus $73.2M* due to mix (higher partner royalties on Nexus) and temporary cost timing; Adjusted EBITDA was $70.4M .
  • Forward estimates may modestly adjust: mix and Professional retail softness could pressure near-term margin expectations, while strong Research pipeline and cost savings ramp support full-year margin expansion and EPS trajectory .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term: Revenue strength from AI licensing and open access is offset by mix and timing; expect margin normalization as partner-heavy Nexus mix moderates and cost savings ramp from Q2 .
  • Research engine intact: Submissions and output are accelerating, with renewals and OA momentum providing visibility; this underpins recurring revenue and FY26 margin targets .
  • AI leadership as a secular catalyst: Strategic partnership with Anthropic and progress on inference pilots broaden monetization vectors beyond training; corporate R&D opportunity is large and underpenetrated .
  • Learning variability: Professional retail softness remains a watch item; operational discipline kept EBITDA margin at 27.4% despite revenue pressure .
  • Capital returns: Dividend growth and expanded buyback authorization signal confidence; net leverage ~1.9x with $120M divestiture proceeds applied to debt .
  • FY26 guide intact: Reaffirmed Adjusted EBITDA margin (25.5–26.5%), EPS ($3.90–$4.35), FCF (~$200M) provides medium-term visibility; execution on cost programs is key to multiple expansion .
  • Trading implications: Revenue beat vs consensus and AI narratives are supportive; monitor Q2 margins and Professional channel trends for confirmation of trajectory; buybacks may provide downside support .