Q2 2024 John Wiley & Sons Inc Earnings Call
Good morning, and welcome to <unk> second quarter fiscal of 'twenty 'twenty four earnings call. As a reminder, this conference is being recorded at this time I'd like to introduce Wiley Vice President of Investor Relations, Brian Campbell, Brian. Please go ahead.
Thank you and welcome everyone with me today are Matt Kissner interim President and CEO, and Kristina <unk> Castle Executive Vice President and CFO.
Also with US is Jason <unk> Executive Vice President and General manager of research and learning.
You'll be participating in our Q&A session, along with Matt and sustain it.
Note that our comments and responses to your questions reflect management's 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 or circumstances.
Also while it 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 viewed as alternatives to measures under GAAP.
Unless otherwise noted we will refer to non-GAAP metrics on the call and variances are on a year over year basis, and will exclude held for sale assets and the impact of currency.
Additional information is included in our filings with the SEC.
A copy of this presentation and transcript will be available on our Investor relations webpage at investors that Wiley Dot com.
I'll now turn the call over to Matt Kissner.
Thank you, Brian and thank you all for joining I'm pleased to be here with Christine and Jay we and the rest of the leadership team are moving decisively on our value creation plan, which I'll talk about in a bit.
I'll give you an update on my first 60 days and discuss my role in the transition.
Of course, we'll review our second quarter performance and how we see the year shaping up.
I'd like to speak a few moments about the interim CEO role.
First 60 days.
The board of directors and I think about my role as a transition more than an interim.
My responsibility is to execute the plans previously approved by the board and improve the company's operating performance and profitability.
From a personal perspective, it's a privilege to be back at wildly during this critical juncture in our evolution.
As a result of my long association with wildly in various roles.
I have an in depth knowledge of the company's businesses operations and markets.
I have strong relationships with Wiley colleagues across the globe.
Frankly, I know, our strengths and I know the areas requiring improvement.
I am in an excellent position to help drive the changes needed to significantly improve our performance.
We are moving decisively to streamline the organization divest non core assets and rightsize wildly for future success.
During my first 60 days, we continued to execute on our re org announced the sale of University services and moved aggressively on our cost base.
While the leadership team and I are focused on executing the board has carefully considering various options for the future leadership of the company in that regard and important objective of mine is to assist the board by assessing and enabling internal talent.
We previously characterized fiscal 'twenty four as a transition year.
A period in which we would be keenly focused on our core businesses that has not changed.
I'm now responsible for leading us through this transition and laying the foundation for the next CEO.
In summary, and for the avoidance of any doubt whatsoever. We are not in a holding pattern. We are moving forward with conviction.
I hope these thoughts on my role are helpful.
Finally, I recently met with colleagues in our European offices, and then our Hoboken headquarters and.
And while it's early days I find the culture to be reinvigorated by our renewed focus and our improvement initiatives.
It's pretty obvious to colleagues that we have to improve how we operate and make it much easier to get things done.
I also participated in listening sessions with a few of our largest shareholders and found their observations very helpful.
I am a long term shareholder myself of course and personally bought more shares all to say after listening intently our goals are aligned.
As a reminder, we're now reorganized into two operating segments down from three <unk>.
The two segments research and learning.
Complement one another as they both deliver high value content and solutions and related markets and verticals, including science and medicine.
Technology and innovation.
In business and finance.
As a quick reminder, research is our largest and most profitable business.
And it's at the core of our strategy.
The market for new scientific technical medical and scholarly research grows steadily and Wiley has one of the world's leading journal portfolios in.
The industry's most widely used to delivery platform.
The business has large recurring revenue base that is 95% digital.
Learning includes academic and professional publishing and platforms in business and finance.
Technology <unk>.
Management team development and reference.
Our competitive advantage and learning includes our brands.
The relationships category leadership and reputation.
As a reminder, we recently coupled these businesses into one team under J Flynn.
Jay has already identifying and acting upon synergies across these businesses.
And with this change we expect to drive much greater operating and capital efficiency.
Let's talk about how we are progressing with our value creation plan.
I am pleased that we are driving disciplined forward on multiple fronts. During the quarter as noted we reorganized from three business units to one market facing research and learning team.
We also consolidated our marketing teams to leverage our capabilities and author relationships and realized potential synergies.
As noted we recently announced an agreement to sell University services, our largest divestiture for up to $150 million in total consideration, including $110 million base price and $40 million in potential earn outs plus a 10% equity stake in the <unk>.
Volume company.
The transaction is expected to close in early 2024.
We're working diligently on our remaining divestitures, but I want to emphasize that it remains a challenging environment.
We're moving aggressively on our cost base as noted by our restructuring actions this quarter Chris.
Kristina will talk to what we're doing there.
We centralized our global operations team under one leader to drive toward a lighter infrastructure simplified processes and improved analytics and insight.
Finally, we will hold an investor update on Thursday January 25th it'll be virtual and will include myself Cristina and Jay.
It's an opportunity for us to share more detail on our performance profit improvement plans, our fiscal 'twenty six targets and field any questions you might have.
Let's turn to our performance for the quarter as we make our way through this transition year.
I will be excluding our held for sale or sold assets in my commentary unless otherwise noted.
Overall Q2 was largely in line with expectations, but still.
In terms of research versus learning.
In research, we saw a year on year revenue declines, reflecting the hendawi disruption.
In a soft market for recruiting.
Excluding hendawi is $18 million impact research revenue was flat.
And learning we saw growth in our academic and professional publishing lines, including print and digital content and courseware in the business and technology categories.
GAAP EPS was a loss of 35 cents, reflecting $52 million of additional impairment charges related to our held for sale assets and.
And $25 million of restructuring charges as we execute on our right sizing plans.
Adjusted EBITDA declined by 13% to $92 million.
And that always EBITDA impact was $14 million offsetting restructuring savings.
Adjusted EPS was down 25% due to lower adjusted operating income and higher interest expense.
In the quarter the held for sale businesses collectively generated $86 million of revenue.
118% driven by declines in University services, and cross knowledge due to challenging market conditions.
And adjusted EBITDA of $19 million up 4%.
As indicated we are reporting on this as a separate segment and you can find this in the tables attached to our earnings release.
I'd like to provide a brief update on research publishing given the near term dynamics.
We continue to see healthy demand to publish driven by growth in global R&D spend year to date.
Article submissions in our core are up 9%.
This is an important demand indicator as we recover from the Covid demand Spike and snapback. However.
There is a natural lag between submission and publication so output is only up 1% ex and dowie.
We expect output to improve in the second half as submissions flow through our publishing pipeline.
That said largely due to this timing issue. We now expect research revenue to fall modestly below expectations for.
For the full year, we expected research revenue to be flat overall, and now anticipated to be flat to down low single digits for our core excluding <unk>, we expected, 3% revenue growth and now projected to be up 2%.
As a reminder.
Hendawi recovery is expected to take time, as we turnaround impacted journals and finalized historical retractions.
This year, we project the revenue impact to be $35 million to $40 million.
In fiscal 'twenty five we expect revenue to begin to recover as we prioritize our impact journals and improve our marketing efforts.
To that end, we feel that now is the time to sunset the hidden valley brand and begin to fully integrate its 200 journals into why lease 2000 journal portfolio.
This reflects the now close alignment of the practices and infrastructure behind the two portfolios and enables a much wider audience.
We anticipate this dowie transitioned to conclude in mid calendar 2024.
I'll now turn it over to Kristina to discuss our segment performance cost savings initiatives and outlook.
Thank you, Matt and Hello, everyone.
We continue to move effectively through this transition year.
Part of which is executing on our plans to make us a stronger and more profitable company.
We made meaningful progress this quarter, but there's still a lot of work in front of us.
Let's turn to our Q2 performance for research.
Research publishing revenue declined 7%, mainly due to hinder Ali.
Excluding Hendawi research publishing revenue was up slightly.
As Matt noted, we are seeing a pickup in submissions the output remains muted due to publication timing.
Important to note. It takes on average about six months for an article submission to turn into a published article.
Okay.
Overall, we continue to benefit from our next model publishing environment that includes read only subscriptions transformational read and publish agreements and called open access.
Models vary by customer and by region.
During the quarter, we announced a new five year nationwide transformational agreement in Germany, we're having more than 900 academic institutions.
This agreement includes read access to all Wiley journal content, while providing authors that these institutions with open access publishing options.
To date filing assigned transformation agreements with over 80 partners worldwide covering several thousand institutions.
This quarter, we continue to see double digit growth in cold OA as a reminder, call delay, including Hendawi makes up about 10% of our research publishing revenue and is our fastest growing area and research segment.
Turning to research solutions revenue declined 3% this quarter due to softness in our recruiting business. This declining corporate revenue offset growth in our publishing services business, where we provide software and services to help society partners and other publishers managing peer review and other publishing processes.
Adjusted EBITDA in research this quarter declined 17% weighed down by hand, Dallas $14 million EBIT impact.
Excluding this adjusted EBITDA for research declined by 4%.
Our Q2, adjusted EBITDA margin, including hidden valley was around 32% down from 36% in the prior period.
We expect research revenue improvement in the second half our submission growth convert to output and <unk> revenue growth and hidden valley comps become less challenging.
Even with this improvement we are projecting modest underperformance in research with the offset coming from outperformance in learning.
Let's turn to our learning segment.
Academic publishing revenue in this quarter was up 8% driven by growth in print and digital content and courseware.
Of note U S fall enrollment grew for the first time since the beginning of the pandemic up two 1% compared to 2022.
Specifically academic performance was driven by continued double digit growth in our XIAFLEX stem courseware and good uptake of our institutional model such as inclusive access.
Inclusive access is in institutional sales model that adds.
Cost of digital course content into student tuition and fees.
Professional is up 3% driven by an improved retail channel environment and fewer returns.
Our dummies franchise also saw growth this quarter.
We're also seeing increase in maintenance new title signings as a result of our renewed focus on our core.
Adjusted EBITDA for Marine this quarter was up 13% with revenue growth and restructuring savings at the primary drivers.
Our Q2, adjusted EBITDA margin was 36% up from 34% in the prior year period.
Let me provide an update on our multiyear cost savings and optimization plans.
It talks about driving towards a leaner organization and more agile workforce.
Of note around 20% of our workforces attached the divestitures or around 1300 ftes.
We expect to close on University services in early 'twenty four.
We also executed a major restructuring actions in Q2, notably incorporate but also related to our business re org.
This resulted in a $25 million or charge in Q2 that is expected to yield $65 million of run rate savings, Let me walk you through them.
But the $65 million of savings around $30 million will be realized this fiscal year and executed as part of our plans and guidance.
Note that 39 is not included in our $100 million run rate savings goal for fiscal 'twenty, six which I introduced earlier this year.
As previously mentioned any in your savings reflected in our fiscal year 'twenty guidance does not count towards that $100 million.
However, the remaining $35 million of run rate savings will be incremental in fiscal 'twenty, five and will be part of the $100 million.
We're already about a third of the way towards that goal.
We will provide more details around our multiyear plans at our January investor update.
We've talked a lot about improving operating efficiency over the last year.
During the quarter, we reorganized into one go to market team under one business leader and consolidated all of our global operations together under one leader.
We're starting to see the benefits of this change already and driving prioritization.
Mutational in go to market synergy and effectiveness as well as improved culture.
We've talked about transitioning to a lighter more modern infrastructure.
To make a progress on unifying our research end to end publishing operation, where we're transitioning from three publishing platforms to one platform that will handle everything from submission to peer review to customer support.
The revenue and cost benefits of one platform are many and include further increased author attention.
So our turnaround times and optimize article transfer and reduce cost per article.
Finally, we launched real estate optimization phase III before reductions in existing office footprints, including floor consolidation at our Hoboken corporate headquarters and three office closures.
Let me quickly turn to ongoing corporate expenses.
We saw a $3 million increase this quarter due to costs related to the CEO transition and lower incentive accruals from prior year offsetting savings related to prior year restructuring.
We expect corporate expenses to be up moderately this transition year as we are still carrying costs related to held for sale assets.
As we transition out of these assets are cost ratios will come back in line.
We also had the higher employee costs related to the incentive compensation reset in overall wage inflation. This year as discussed in June.
To refresh that 80% of employees are part of the incentive compensation plans and we saw significantly lower payout accrual in fiscal 'twenty three due to underperformance.
Given all these near term dynamics fiscal 'twenty four remains a transition year for <unk>.
Benefit of the work, we're doing now will be fully realized in fiscal year 'twenty five 'twenty six.
Turning to our cash flow and balance sheet.
Free cash flow for the six months was a use of $132 million compared to a use of $126 million in prior year.
The variance is primarily driven by lower cash earnings.
As always our cash flows normally are used in the first half of the year due to the timing of collections per channel subscription, which are concentrated in the third and fourth quarters.
Of note, we do not provide an adjusted cash flow metrics and numbers include the businesses held for sale or sold.
Capex of $48 million was moderately lower than prior year and there were no material acquisitions to date.
Our focus right now is executing on our divestitures and our cost savings plans.
Through the half, we allocated $61 million towards dividends and share repurchases.
We spent $23 million or $5 million oriented has to acquire 669000 shares at an average cost per share of $33 and $60.
This compares to 382000 shares repurchased in the prior year.
Our current dividend yield is around four 5%.
Yeah.
Net debt to EBITDA ratio was two <unk> at the end of October compared to $2 one in the prior year.
Well, we're in a good financial position our priority during this transitional period as to further reduce our debt and manage our interest expense, while continuing to invest to scale in research and repurchase shares opportunistically.
Note, we have reduced our net debt by over $40 million compared to the prior year period.
Onto our transitioning our outlook, which excludes the businesses held for sale.
We're reaffirming our guidance.
And revenue performance is mixed within our segments, but in line overall.
We're projecting research revenue to be flat to down low single digits versus just flattened in our original guidance given the lag between commissions and publication that continued market softness in recruiting.
Revenue, excluding <unk> is now projected to grow 2% compared to eight 3% original projection.
And learning, we're now seeing an improved environment for academic and professional publishing driven by better execution of our channels and continued uptake of our inclusive access model in <unk> courseware.
So research is tracking a little behind plan and learning tracking ahead.
We look forward to sharing our fiscal 'twenty six targets in late January.
Adjusted EBITDA, excluding the divestitures is anticipated to be in the range of $305 to $330 million with an EBITDA margin of 19% to 20%.
This is down from 23, 3% in fiscal 'twenty three to refresh we continue to expect to more than recover our fiscal 'twenty three EBITDA margin of $23 three as we exit fiscal 'twenty four and expand from there.
On adjusted EPS, we continue to anticipate a range of $2 five.
To $2 40.
We had the non operational items weighing on EPS, including higher tax interest expense and lower pension credits with regard to free cash flow. Our visibility continues to be eliminate with continuing to announce so we are unable to provide a meaningful cash flow outlook at this time.
As you know we don't report an adjusted free cash flow metric. So it includes the held for sale assets.
We're actively working through these divestitures and can't adequately projected timing and scope of related restructuring programs.
That said, we do expect free cash flow to be material lower transition year, given the combination of lower projected cash earnings.
Higher restructuring payments and higher interest payments.
We consider these to be largely temporary given this year's structural improvements.
As we make our way into fiscal 'twenty, five and 26 are fully confident in our margin trajectory and in the cash generation of the core business.
We will provide a fiscal 'twenty six free cash flow target at our January investor update.
And with that I'll pass it back to Matt.
Thank you Christina.
To summarize before I open it up for questions.
Q2, and year to date performance was mixed but largely as expected and we anticipate a better second half as research output grows comps get less challenging.
Turning carries forward some of its Q2 momentum and restructuring savings kick in.
We are relentlessly focused on execution and moving with certainty on our value plans, our operational improvements are re org and our culture.
We are going to block and tackle better than we have before.
We're going to look for synergies and uncover new pockets of growth within our core.
I feel a real sense of energy and the place and a commitment to move forward with urgency.
That said fiscal 'twenty four remains a transition year as we work through our structural improvements and right sizing and as our core drivers rebound.
We fully expect to deliver performance and margin improvement in fiscal 'twenty, five and 'twenty six.
And finally as a reminder January 25th will be our virtual investor update.
I want to thank all of our Wiley colleagues for their hard work and dedication, especially over these past six months I wish them and all of you a very joyful holiday season, and a happy and healthy 2024.
I will now open the floor to any comments and questions.
Thank you.
Reminder, if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Your first question comes from the line of Daniel Moore from CJS Securities. Please go ahead.
Thank you Matthew Cristina. Thank you good morning, and thanks for all the color.
And I hope, you'll indulge me because it's got a lot of moving parts. So I'll probably ask a few questions here.
But we'll start with research, maybe just remind us of the typical lag between submissions and publications.
Kind of what the outlook for submissions growth looks like over the next few quarters to the extent you have visibility there.
Trying to get a sense for.
With the.
Glide path might be back toward a more normalized.
Both.
Algo or outlook for for the research business.
Sure Dan its Matt Nice to meet you virtually there are a number of moving pieces here understood.
Jamie Lin participating today.
He is very close to these issues, let me hand, it over to Jane Thanks, Matt Hi, Dan Thanks for the coverage and thanks for the question I guess I'll start by saying and.
Let's look at where we were as we exited last fiscal year and what we saw in the prior 12 months.
As we've talked about in the Q4 earnings call.
We experienced and the market experienced a decline in submission by about 6% for calendar 'twenty, two and that blend into our fiscal our last festival.
That's driven primarily by what we call the Covid snapback during Covid during Lockdown researchers were at home writing papers available for peer review and kind of cleaning out there.
Leaning out their labs in terms of that research results they had to publish.
What wasn't happening during that time was experiments.
Parents in the field experiments in the lab as researchers return to the lab Badger restart their work.
Overall in the market. It was about it was down about 6% and in our first call last year.
We predicted and we thought we would see a return to historical norms.
Submission volume and that kind of mid single digit.
Submission growth in that in that range.
What we've seen so far year to date in our core has exceeded our expectations of 9% and theres a little bit to unpack there we've got.
Really extraordinary growth in emerging markets and India. For example in more mature markets like China, we're seeing great growth and in fact across almost every mature market. Excluding the United States. We are up far past our expectations in terms of submission now theres a lot of variable.
<unk> and quality of submission depending on region. There is variability in terms of subject.
And there is a lot of moving pieces in terms of transitional agreements and gold OE.
Bottom line. It takes about six months for us to get that content through the mill and not every single paper is going to turn in every single submission is going to turn into a paper, but in terms of what we have visibility on we know now that the top of the funnel has been filling up faster than expectations and that gives us some reassurance about.
Being able to not only meet our publication targets for this year, but also gives us some confidence returning to those historical norms.
The other comment I would add Dan and then back to you.
Obviously volume that's coming in to do it today is going to give us a nice kick off point for the new fiscal year because of the six month application lag.
Long lead times, so we are.
Say encouraged that we will enter into the new fiscal year with some decent wind behind our back in this regard.
Thats perfect and very helpful and certainly encouraging.
Kristina regarding the restructuring efforts. The detail you gave was really helpful. So to summarize we have $30 million left on the on the $65 million and run rate savings that you called out.
And that $30 million.
Beyond fiscal 'twenty four as part of the 100 that you previously targeted so.
Did ask this last time I believe but so.
So apologize for the repeat but how much of the 100 and the remaining $100 million beyond this year.
Simply offsets dis synergies following divestments or general inflation or investments versus you can may be earmarked to fall to the bottom line.
Sure. Thanks, Dan Nice to talk to you, it's actually $35 million correct.
Run rate savings at its counting towards the future.
<unk> 25 and beyond.
Towards that $100.
<unk>.
Sorry, excuse me.
Two general areas.
In the <unk>.
Right sizing of our of our corporate infrastructure, including stranded costs as well as our operating efficiencies and we're going to talk more about this in January but we will be.
We will be reinvesting a portion of those savings back into the business.
We're minimizing any kind of.
Any kind of.
Increased cost base.
Outside of the growth opportunities that we are going to talk more about that in context of our former commentary and strategy in January.
The bottom line level.
Hope you're right about that.
Got it certainly look forward to.
Dissecting that in a little bit more detail.
Maybe if you can give us a little bit more of a detailed update on hendawi as granularly as possible.
When we acquired it it was a $40 million revenue business on its way to $80 million. Obviously, we've gone through all the details of what's taken place is it.
Fair to assume that it's somewhat more permanently impaired relative to your initial goals for the business in other words now that it's being folded into the rest of the research should it grow in.
In line with researchers are an opportunity for more significant rebound to recovery.
Hey, Dan This is Jeff I'll take this one.
I want to state the obvious right the recovery, taking a little longer than we had previously envisaged and that's down to.
What I would characterize as the impact of.
Some decisions that we took to preserve the long term health of the business. So one of the things that we wanted to make sure that we.
Really addressed head on was the business processes and management processes that we have in place and that we so we have we have really tightened up our controls we've installed a new management team and we put it.
A team of research integrity experts in place not just for <unk>, but across our entire research portfolio. This has had a dampening effect on article volume coming through <unk> as you know I'm sure. This is.
This is a.
Our model, where it's entirely volume driven and so.
When we looked at those controls we feel like that's the right thing to do long term for the business. We also feel very much like the portfolio will benefit from being part of the larger widely publishing organization and we've taken steps to that effect over the last six months and really bringing.
Editorial teams together, bringing marketing teams together, bringing our operations groups together to form a single journals group.
And so those decisive steps together I think gives me confidence in where we're going to go with him.
I also want to say that.
Let's just focus again on the.
Couple of the key numbers, it's about 10% of the total journal portfolio.
At 5% intolerant research revenue and so while we focus on it.
I do think that.
What we're going to we're going to wind up with something that's more in line with overall research performance as it relates to gold open access.
As it relates to either Hendawi priors or to subscription revenue, but as it relates to gold open access, which Kristina characterized already.
<unk>.
I'll kind of leave it at that.
And that's really helpful.
And I'm just going to add just on the.
Looking at looking at a long term horizon the recovery I think two things one as we did in <unk>.
We didn't cut expenses in the near term and then dally from yourself confidence temporary who wanted to fuel the recovery.
But in our long term when we return from it recover back.
<unk> long term.
Volume is Jason very volume driven business did you see margins recover to 40 plus range.
To ensure integrity, which is what Jay was talking about as well, but we do see a very.
A very healthy margin profile business coming back.
Yes, one last comment then there is a market for for gold open access and Theres a market for what these journals do and.
Just not to put too fine a point on it but.
Gold it grows.
In the twenties generally speaking for the last few years and that sort of the profile that makes us continue to be excited about about lease term.
Got it that's helpful.
A little bit more context.
Or were you kind of where you're thinking right now so I appreciate it.
Shifting to the sale of University services.
I believe it's.
Calendar 'twenty four is it Q1, when you likely expect to close and maybe just talk about the conditions needed to achieve to receive the first one.
$10 million proceeds from the seller financing and then the additional $40 million earn out Sara.
Obviously, I know you don't want to get tied to a specific time frame, but just how should we be kind of framing or thinking about.
The.
Timetable to actually achieving proceeds from that sale.
Eric I'll take that one thanks, Dan Yes, we are.
Okay.
Early in the calendar <unk>.
<unk> 24, and so as we noted and I think in a previous one.
<unk> will have a 110.
Yes.
Payable in either cash or a promissory note that's going to depend on the availability of proceeds from any third party debt financing from our buyer American academic partnerships on the earn out its a $40 million earn out and achieve based on mutually agreed revenue targets over the next two fiscal so thats made first in 'twenty four.
Through April 32000.
And.
And then we also received 10%.
Ah.
The buyers that equity as well.
Perfect last for me.
I'll jump out again, thank you for the color.
For for a long time, the goal or part of the goal was always a balanced capital allocation was to take the X exceptional or extraordinary cash flow generated from research and use it to grow in other areas.
What is the plan for capital allocation going forward does it.
Both dividend and buyback stock and invest to protect the chorus.
The board laid out.
Or do you plan to pursue further M&A opportunities once the restructuring and divestments are complete.
I'll begin with.
Our standard comment.
We are refocused on the core business here.
Reflecting back I think we probably.
Could have done more around our core business.
The opportunities that <unk> already uncovering as he's running these two now unified business units.
So will any anything we do will be focused around that core.
And in terms of.
What we're doing in terms of cash allocation all received two more comments on that yes sure.
I'll just say no.
As always our capital allocation strategy and balanced one youre.
Youre not likely to see any M&A as I'm sure you're FERC, yes, we are very focused in the near term.
On behalf of insurance and right sizing.
We will have opportunistic organic investments in resources scale publishing as well as our solutions platform.
Talk more about that in January we're always managing our debt.
It's a really important one for us to.
Finally, I can see in the marketplace offering really good shape financially, but interest costs are higher and we are and we're looking to manage that.
Yes, and our dividend is the 30th consecutive.
Consecutive year.
Increasing our dividend.
It's been about $77 million a year.
2020 sort of managing that with share repurchases, which again were.
We're actively managing as well. So those are are those are our capital allocation elements.
We're always looking to tweak before after and during these portfolio moves.
More about that again in January.
Look forward to that thank you again.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Your next question comes from the line of Sandy Kasab from BNP Paribas. Please go ahead.
Thank you very much and good morning, I have two questions. Please the first one is on <unk> could you share with us.
Share of revenues coming from exclusive access.
And.
Where do you see that number growing here in the next few years.
And the second question is on research publishing.
Would you be able to comment on the revenue growth trends within the genre subscription business versus.
The gold open access.
For the quarter and how you see Jonathan subscription revenue trends.
Going forward.
Thank you.
It's doing fine I'll jump in here first.
As we as we mentioned in that.
In the first part of the call we did see.
Positive momentum with our inclusive access models, it's a small percentage of the revenue we don't break it out publicly but.
What I would say is it's a sign of an increasing customer demand for that product and we feel good about.
The digital growth.
Our.
<unk> Courseware program.
Inside of academic learning, but also about our ability to innovate around business models.
And I.
I think that this is a trend in academic.
For a variety of reasons that all benefit students and learners and so we're going to continue to participate in that.
It's a low base and it will continue to grow from that base in line in line with the market expectation.
And.
As context of your question about research publishing.
Let me just take a step back and reiterate that.
This is a very mixed market right now is Kristina set.
We have some markets that are subscription only.
Manny.
Are much further ahead on the OE transition and that can be cut by geography. For example in Europe, We've got a much more OE centric market, whereas than for example, the Asia Pacific region.
Sure.
<unk> is primarily a subscription market for us and in the United States, It's very very mixed and so.
Or for those reasons, we generally tend to think about it is it left pocket right pocket.
And the movement of revenue between a pure subscription model and the transitional agreement for us.
<unk>.
It's really about business model and meeting the customer where they are it's about pricing models of meeting the customer where they are in fact responding to what I think is a good trend in the market to make sure that anybody can read the content that.
But we've moved outside of the paywall with our open access publishing models.
While we don't break those two numbers out.
I think it's important to say that we continue to benefit from participation in this mixed model economy and that.
As we indicated earlier in the call, we expect performance to improve with age and age two as volumes begin to improve and we already talked about.
Those indicators look like on a go forward basis.
With some submission volumes returning to historical norms.
Okay.
Excellent. Thank you very much.
And we have no further questions in our queue. At this time I will now turn the call back over to Mr. Kisner for closing remarks.
Thank you all for joining the call today, we look forward to sharing more of our January 2015 investor update.
And then again at our Q3 earnings call in March have a good day.
This concludes today's conference call. Thank you for your participation and you may now disconnect.
Okay.
Okay.
Yeah.