Q1 2027 John Wiley & Sons, Inc. Earnings Call Transcript
Key Points
- Research publishing revenue grew 12%, driven by strong global demand, record submissions (up 31%), and the addition of Emerald Publishing.
- AI revenue reached $14 million in Q1, ahead of pace for the full-year target of over $50 million, with an additional $14 million already contracted for Q2 and Q3.
- Research adjusted EBITDA margin expanded by 130 basis points to 29.6%, driven by cost savings and the high-margin contribution from Emerald.
- The company was selected as the sole scientific publisher for the US Department of Energy's Genesis Mission and a founding data partner for CuspAI's materials foundry, validating its strategic position in the AI economy.
- The clinical outcome assessments business is growing rapidly, with Q1 revenue rising more than threefold, and the company launched its new spectral analysis API portfolio for laboratory markets.
- Customer retention in research remained above 99% following the calendar 2026 renewal season, and the company raised its dividend for the 33rd consecutive year.
- Total revenue declined due to a tough prior-year comparison of $29 million in AI licensing revenue, which was not repeated in Q1 of fiscal 2027.
- The Learning segment faced significant headwinds, with revenue down 20% due to soft market conditions in professional publishing and a prior-year AI licensing comparison.
- Adjusted EPS decreased 10% year-over-year, impacted by higher net interest expense related to the Emerald acquisition.
- GAAP EPS was a loss of $0.23, largely due to restructuring charges and acquisition and integration costs associated with the Emerald deal.
- The professional publishing market remains soft, with continued pressure from retail channel inventory normalization (e.g., Amazon) and weaker consumer demand.
- Free cash flow was a use of $70 million in Q1, and net debt to EBITDA rose to 2.7 times (1.9 times a year ago) due to the Emerald acquisition.
Good morning, and welcome to Wiley's first quarter and fiscal 2027 earnings call. As a reminder, this conference is being recorded. (Operator Instructions)
At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.
Good morning, everyone. I'm joined today by Matt Kissner, President and CEO; and Craig Albright, Executive Vice President and CFO.
Our comments and responses reflect management views as of today and will include forward-looking statements. Actual results may differ materially from those statements. The company does not undertake any obligation to update them to reflect subsequent events.
Also, Wiley provides non-GAAP measures as a supplement to evaluate underlying operating profitability and performance trends. These measures do not have standardized meanings prescribed by U.S. GAAP and therefore, may not be comparable to similar measures used by other companies, nor should they be
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