Wiley outlines $3.90–$4.35 EPS target for FY26 as AI licensing momentum and strategic partnerships drive growth

Earnings Call Insights: John Wiley & Sons, Inc. (WLY) Q1 2026

MANAGEMENT VIEW

* Matthew Kissner, President and CEO, highlighted the company’s strides in artificial intelligence, stating, “Our early work here is opening up growth opportunities across our businesses and in the promising corporate R&D market.” He announced a $20 million AI licensing project for a foundational large language model customer, marking the first inclusion of content from publishing partners. Kissner pointed to a strategic partnership with Anthropic to accelerate AI in scholarly research, integrating institutional library subscriptions into Claude as part of a pilot program.
* Kissner emphasized, “We increased our annual dividend for the 32nd consecutive year,” and noted a $250 million share repurchase authorization, a 25% increase over the previous program. He also welcomed Craig Albright as the new CFO, highlighting his “track record of driving high-quality growth, disciplined investment and cost synergies.”
* Kissner detailed a 25% increase in research submissions and 13% output growth, with double-digit submissions growth across key geographies. “Germany, where we were the first publisher to strike a nationwide agreement, has returned to growth for the first time since the pandemic.” He also noted, “Double-digit Gold Open Access growth driven by the enduring draw of our journal brands.”
* The launch of the Wiley Nexus platform was cited as a differentiator, enabling the aggregation of scholarly content for AI training and the development of research tools. AI licensing revenue reached $29 million in the quarter, up from $17 million in the prior year period.
* Kissner indicated a strategic focus on the corporate R&D market: “making up 80% of total U.S. R&D spend, but only 10% of our revenue base. Over time, we expect this share to materially expand.”
* Craig Albright, Executive VP & CFO, stated, “Adjusted revenue grew 1% and adjusted EPS rose 2%, while adjusted EBITDA was down 3%.” He explained the margin mix impact from the $20 million AI project, noting 45% EBITDA margins on Nexus partner content versus approximately 75% for proprietary content deals.

OUTLOOK

* Albright reaffirmed full year guidance, stating, “Revenue growth in the low to mid-single digits, adjusted EBITDA margin of 25.5% to 26.5%, up from 24% last year, driven by expected business performance and executed cost savings. Adjusted EPS of $3.90 to $4.35, up from $3.64 last year. Free cash flow of approximately $200 million.” He added, “CapEx is expected to be comparable to last year’s total of $77 million.”
* AI revenue is expected to vary quarterly, but underlying demand remains robust, with “growing demand for subscription inference opportunities, a market which is still forming.”

FINANCIAL RESULTS

* Albright reported, “Research delivered solid 5% growth driven by AI demand, $16 million compared to $1 million in the prior year period and strong underlying fundamentals.” Research Solutions grew 44%, driven by the Nexus AI project. Adjusted EBITDA margin for Research was 28.3%. Learning revenue declined 8% due to lower AI revenue and softness in Professional Publishing, with $13 million in AI revenue for Learning. EBITDA margin for Learning expanded to 27.4%.
* Free cash flow was a use of $100 million, improving from a use of $107 million last year. CapEx was $15 million, down $3 million from last year. Share repurchases increased to $14 million. Net debt-to-EBITDA ratio improved to 1.9. The company received roughly $120 million in cash proceeds for the University Services divestiture.

Q&A

* Dan Moore, CJS Securities, Inc.: Asked about the Anthropic partnership’s nature and terms and its impact on investment plans. James Flynn, EVP and GM of Research & Learning, described the partnership as focused on integrating Wiley content with Anthropic’s Claude tool for academic markets, stating, “We're focusing on an announcement in a couple of weeks that will talk about Claude institutional access and the ways that we're integrating our content with Anthropic's tool set.” Flynn noted the program is “comparatively inexpensive to implement.”
* Moore questioned the margin impact of Nexus revenue. Albright responded, “This was an additive element into our program, but we're still focused on the profitability of the core business and the ongoing margin expansion, and all of that remains on track.”
* Moore asked about Professional Publishing declines. Kissner said, “It’s been a slow summer. It seems to be for the industry… So I wouldn't call it a red alert yet, but we got our eyes on it because it may be an indicator of a broader economic slowdown.”
* Moore inquired about the $4 million in corporate expenses. Albright confirmed, “We did see in the quarter kind of a short-term onetime lift in corporate expenses… These are now completed. So we don't expect those kind of impacts hitting us going forward.”
* Moore queried capital allocation priorities amid buybacks. Albright stated the company will “continue to support shareholder returns through the dividend program through the buybacks to continue to pay down debt and where it makes sense to improve the strength of the balance sheet.”

SENTIMENT ANALYSIS

* Analysts focused on the mechanics of AI partnerships, margin effects, and capital allocation, with a tone that was neutral but probing, seeking to clarify the sustainability and impact of new initiatives.
* Management maintained a confident tone in prepared remarks, repeatedly underscoring operational discipline and growth momentum. In the Q&A, management was forthcoming, with Kissner and Albright addressing concerns directly and providing detail on both strategy and financial effects. Kissner said, “We are now a recognized leader executing our own projects with multinational tech companies, but also on behalf of our publishing partners.”
* Compared to the previous quarter, management’s tone remained optimistic but became more detailed on AI monetization strategies and the evolving margin mix, while analysts’ tone remained neutral and focused on clarifications.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for revenue growth, EBITDA margin, and adjusted EPS was reaffirmed, aligning closely with the previous quarter’s outlook. The company’s adjusted EPS target remained $3.90 to $4.35, and free cash flow guidance held at $200 million. The main strategic shift centered on new AI licensing models, an expanded focus on the corporate R&D market, and the rollout of the Wiley Nexus platform for content aggregation and licensing.
* The new CFO, Craig Albright, replaced Christopher Caridi, who remains Chief Accounting Officer and Finance Transformation leader.
* The quarter showcased a 25% increase in research submissions and a 13% increase in output, with continued double-digit growth in Gold Open Access and the Advanced Science journal. Research Solutions’ 44% growth and $29 million in AI licensing revenue highlighted the growing impact of AI partnerships.
* Compared to Q4, there was increased emphasis on the corporate R&D opportunity, operational discipline, and share repurchase activities, while analysts’ concerns remained centered on revenue sustainability and margin implications of AI deals.

RISKS AND CONCERNS

* Kissner acknowledged market headwinds in Professional Publishing due to consumer spending softness in retail channels. He stated, “It's been a slow summer… So I wouldn't call it a red alert yet, but we got our eyes on it because it may be an indicator of a broader economic slowdown.”
* The company is monitoring corporate spending trends around assessments and watching college enrollments for any signs of challenges, but reported steady academic market conditions so far.
* Albright discussed temporary increases in corporate expenses, indicating the completion of strategic consulting projects and that savings are expected to ramp up in Q2.

FINAL TAKEAWAY

Management emphasized decisive moves in AI licensing, expanded partnerships, and operational discipline as key drivers for Wiley’s growth trajectory. With reaffirmed guidance, strong recurring revenue models, and a focus on margin expansion, the company positions itself as a leader in both research publishing and the fast-evolving AI knowledge economy, while actively monitoring market risks and capital allocation priorities.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/wly/earnings/transcripts]

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