Q2 2025 John Wiley & Sons Inc Earnings Call
Good morning, and welcome to why at least Q2 fiscal 'twenty 25 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. Please go ahead.
Speaker Change: Thank you and Hello, everyone I'm with Manchester why these president and CEO, Christopher Karate interim CFO and Jay Flynn Executive Vice President General manager of research and learning.
Speaker Change: Note that our comments and responses reflect management's views as of today and will include forward looking statements.
Speaker Change: Actual results may differ materially from those statements. The company does not undertake any obligation to update them to reflect subsequent events.
Speaker Change: Also why do we provide non-GAAP measures as a supplement to evaluate underlying operating profitability and performance trends.
Speaker Change: Measures do not have standardized meanings prescribed by U S. GAAP and therefore may not be comparable to similar measures used by other companies.
Speaker Change: Nor should they be viewed as alternatives to measures under GAAP.
Speaker Change: 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 divested assets and the impact of currency.
Speaker Change: Additional information is included in our filings with the SEC a.
A copy of this presentation and transcript will be available on our Investor relations webpage at investors Stump Wiley dotcom.
Speaker Change: I'll now turn the call over to market there.
Thank you Bryan and Hello, everyone at the mid point of the year. We're pleased with our continued progress on our revenue and profit performance are in line with our expectations. Our investments are starting to pay off and we remain confident in our full year trajectory.
Speaker Change: We're working to deliver compounding growth in material margin expansion over time.
Speaker Change: Our knowledge businesses remain recession tolerant, our balance sheet and cash flow remain core strengths and we're starting to see AI related <unk>.
Speaker Change: I know you may have questions about the political environment in the U S. It's too early to speculate on any impact positive or negative that a new administration could have.
Speaker Change: I'll just say this the scientific exchange and global R&D investment have always risen above the changing political ties given their vital importance to economic growth and quality of life research and learning remain the twin foundations of the global knowledge economy.
Speaker Change: And widely is enabling them through the creation of new knowledge and its application.
Speaker Change: We have become our most trusted source in an ever changing world that is overloaded with unsubstantiated information and skepticism.
Speaker Change: We remain confident as ever in our central role of ensuring the accuracy trust impact and application of knowledge, it's getting more important by the day.
Speaker Change: Let me also welcome Chris <unk> to his first official earnings call Chris.
Speaker Change: Chris has assumed the role of interim Chief Financial Officer in September He has been our controller for eight years and continues to be a trusted partner to me and our leadership team.
Speaker Change: I'll give him a more proper introduction later in my presentation.
Speaker Change: Okay, Let's review the headlines this quarter revenue growth was driven primarily by learning, which saw a favorable market conditions across both academic and professional <unk>.
Speaker Change: Research generated modest growth driven by positive demand trends, partially offset by a large year on year decline in legacy Brinton licensing revenue, Chris will speak to our segment performance in more detail.
Speaker Change: Margin expansion and EPS growth with notable this quarter.
Speaker Change: On AI, we're moving decisively bump methodically structuring and expanding our available content and data catalogs formalizing business development teams and pipelines and developing publishing an author tools. There were no announced projects this quarter, but we are confident in both our pipeline.
Speaker Change: And our progress.
Speaker Change: We made some recent leadership changes to move faster and more effectively as an organization I'll talk about them in a later section.
Speaker Change: We are advancing a culture of continuous improvement, where we constantly evaluate the effectiveness of our spending and eliminate waste in all forms where every investment is rigorously scrutinize and where we pivot without doubt or mercy as they say.
Speaker Change: Let's review, how we delivered on our key objectives. This quarter as a reminder, our first is to drive recovery and growth in research. We began the year with a 4% top line growth in research publishing and saw growth moderate this quarter due to the year over year swing in <unk>.
Speaker Change: Our legacy products as I discussed it is important to note that quarterly performance can fluctuate due to onetime items and other timing issues and it's far more relevant to look at us on a full year basis.
Speaker Change: The core of the business continues to perform well driven by gold open access and our institutional models dimmed.
Speaker Change: Demand to published will remain strong we recently commenced our calendar year 'twenty five journal renewal season, with research libraries and consortia around the world. It's too early to report numbers, but we see a healthy environment for our combined institutional models.
Speaker Change: Some very interesting news the Indian government recently approved a one nation one subscription program representing over 6000 research institutions.
Speaker Change: So instead of reaching only a portion of these institutions through regional subscription agreements will now have one national license to service directly and provide real access to scholarly journal content.
Speaker Change: We're not ready to talk about incremental benefit, but we're encouraged by this development and India's 40% growth in article submissions.
Speaker Change: Finally, we are cautious, but pleased with the incremental improvement we're seeing in our solutions business with new leadership, there and moderately improved market conditions.
Speaker Change: Our second objective is to move decisively on near term AI opportunities year to date, we've realized the full $21 million of the previously announced rights project.
Speaker Change: We also have a healthy pipeline of pharma and other R&D centric companies exploring content and data for their internal AI applications.
Speaker Change: A recent example is a targeted agreement with a large pharmaceutical company for access to specific journal titles. They will use this content and data and the power internal drug discovery through AI.
Our third objective is to drive continued profit improvement through the half adjusted EBITDA and adjusted EPS were up 17% and 47%.
Speaker Change: And our adjusted EBITDA margin was up 220 basis points over prior year.
Speaker Change: Finally, all divestitures are officially complete.
Speaker Change: Onto our results note I'll be excluding divested assets in my commentary unless otherwise noted.
Speaker Change: Revenue was up 3% driven by learning growth of 7% and research growth of 1%.
Speaker Change: Adjusted EBITA rose, 14% to $106 million due to revenue performance in run rate cost savings.
Speaker Change: These savings were partially offset by investments in research.
Speaker Change: Our adjusted EBITDA margin for the quarter was 24, 9% up from 22, 7% last year.
Speaker Change: Our Q2 margin is not a run rate number at this point, but it does demonstrate our underlying earnings power as we continue to drive for improved efficiency.
Speaker Change: Adjusted EPS was up 36% due to higher adjusted operating income and accrued interest income from our divestitures.
Speaker Change: A few words about our GAAP performance. The GAAP revenue decline was impacted by foregone revenue from sold businesses.
Speaker Change: The significant GAAP EPS increase was primarily due to prior year impairments and restructuring charges.
Speaker Change: Let's talk about our leadership changes starting with finance as noted Chris assumed the role of interim Chief Financial Officer in mid September He has been our corporate controller and Chief Accounting officer since 2017, and it's been a very steady hand ever since.
Speaker Change: Chris has over 30 years in the industry with top finance executive roles at multiple public companies.
Speaker Change: And the rest of the leadership team will be focusing on further optimizing our cost structure and improving our capital efficiency and decision making.
Speaker Change: Turning to technology, we eliminated the CTO position and are combining the technology and operations organizations.
Under agile Weber, our head of operations since 2021.
Speaker Change: Andrew has already leading the research end to end platform.
And enterprise modernization projects in addition to running the traditional operations function.
Prior to Wiley, Andrew headed both technology and operations for several large publishers. He is a proven leader and a proven economizer with a very strong financial acumen.
Andrew Chris and I will be looking very hard at our technology spend and existing infrastructure.
Speaker Change: Finally, marketing has become an important differentiator given the business model shifts in research.
Speaker Change: And our Reeves joined widely in 2023 to lead our marketing efforts and she has made an immediate impact in building state of the our digital marketing capabilities, attracting authors and increasing the top of the submissions funnel.
Speaker Change: <unk> will assume the position of Chief marketing Officer, and joined the executive leadership team representing another voice of the customer when we made key business and strategic decisions.
Speaker Change: I want to take this opportunity to thank Christina Vantassel and arrest maintain for their service as CFO and CTO respectively.
Speaker Change: Let's turn to the AI opportunity as a reminder, we see it in three pillars productivity publishing innovation and licensing and application.
Speaker Change: We have surveyed our authors enterprise customers LLM developers and colleagues the finding show widespread needs, but an early market.
Speaker Change: And we are recognized as a company at the forefront of this paradigm shift.
Speaker Change: Wiley has succeeded for 217 years, because it not only embraced and benefited from technological and business model change, but helped propel it forward.
That's what our knowledge company does.
Speaker Change: On productivity, we accelerated our pace this quarter in deploying multiple tools for our employees, enabling them to drive their personal productivity.
Speaker Change: Can we materially reduced our large administrative burden certainly.
Speaker Change: And we're seeing it already in our early adopters.
Speaker Change: On publishing innovation, we are focused on publishing efficiency content creation and research integrity.
Speaker Change: Jay Andrew and I are obsessive about publishing efficiency and cycle time.
Speaker Change: In our industry. It can take six to nine months to accept and publish a scientific article two.
Speaker Change: Two years for a new professional book title and three years for an advanced textbook.
Speaker Change: We are applying AI to reduce the cycle times, which will result in more publishing volume at lower cost and importantly, a much improved author experience.
Speaker Change: But this will take time to achieve as we work to perfect. These AI tools, which as you know Canada of accuracy issues.
Speaker Change: We're also using AI to detect fraudulent research and are working with several partners to commercialize this capability.
Speaker Change: Finally at the Frankfurt book Fair in October we announced the launch of our co innovation program to develop new AI applications in partnership with R&D centric companies, our first announced partners potato startup building out an AI research assistant.
Speaker Change: For biology.
On licensing and applications, we've realized $44 million of licensing revenue to date and continue to build out a robust pipeline.
As a reminder, our high quality content and data and Science Medicine technology Engineering and business is foundational for training large language models.
Speaker Change: And also in demand for vertical specific models.
Speaker Change: In industries like Tech farmer and information services as.
Speaker Change: As the market is rapidly developing and iterating. It gives us to size the addressable market for licensing it's a bit like the wild west at the moment, but we are actively in the market and learning in real time, along with our large corporate customers.
Speaker Change: Again, we are confident in our direction of travel, but it will take time to develop some of these opportunities.
Speaker Change: On the application front.
Speaker Change: Besides the co innovation program I just referenced we have recently partnered with the school of engineering at Arizona State University on a gen AI powered tutor to help students succeed in their computer Science labs.
Speaker Change: The purpose of the AI tuner is to provide immediate feedback to students who have hit a barrier in the XI books coating lab.
Speaker Change: This pilot is another example of Wiley collaborating with others to couple knowledge and application with AI capabilities.
Speaker Change: Let's talk about the importance of reinvestment after several years of underfunding, our profitable core businesses.
Speaker Change: As a reminder, we are reinvesting around half of our previously executed cost savings and all of the proceeds from our Q1 AI project into several key areas to drive compounding growth and further margin improvement in the years ahead.
Speaker Change: First.
Speaker Change: We're investing to drive incremental growth in research, where we have a unique right to win.
Speaker Change: Our aim is to increase research publishing market share and exceed market growth of 3% to 4% over time.
Speaker Change: We're investing to expand our editorial capacity to meet the demand to publish expand our journal portfolio.
Speaker Change: And optimize our go to market efforts to drive author engagement and retention.
So how are we progressing.
Speaker Change: Our investments in journal brands, and marketing capabilities are driving submissions growth of 18% and output growth of 7%.
However, a very important reminder, is that output does not automatically convert to incremental revenue growth.
Speaker Change: Much of this volume goes to supporting our multiyear subscriptions and transformational agreements, which will remain the foundation of the business while not a one for one this volume allows us to strengthen and increase the value of these recurring revenue models.
Speaker Change: That said, we are encouraged by demand recovery in mature markets, where acceptance rates are higher along with strong growth in emerging markets.
We are seeing good momentum in our strategy to build out our top journal brands, notably our advanced collection.
Speaker Change: This flagship portfolio consists of 22 high impact journal titles.
Speaker Change: This year, we're launching two new journals focused on AI advanced intelligent discovery.
Speaker Change: And advanced Robotics research and additional journals in areas of strategic importance in the life and health Sciences will follow top brands are often what differentiate the top publishers and advanced is a gold standard.
Speaker Change: We're also investing to transform our publishing and author experience through our research publishing platform.
We've migrated a large number of journals to date and continue to make progress in our development work.
Speaker Change: This platform will allow us to deliver new content offerings and improved cost per article and article transfer.
Speaker Change: During the quarter, we started a pilot new refer and transfer capabilities in research Exchange review before rolling it out to all journals. This technology uses AI to match articles to journal's, giving a better experience to authors reviewers and editors alike.
Speaker Change: Finally, we are reinvesting in AI growth in productivity as noted in rights management and business development, and then working to make content available and structured for prospective and existing LLM developers.
So there's a lot happening our focus continues to be on driving margin expansion, while reinvesting in sustainable growth initiatives.
Speaker Change: I'll turn the call over to Chris now to talk about our segment performance outlook and financial position.
Chris: Thank you, Matt and Hello, everyone as Matt noted.
Chris: Noted our results are inline with expectations and we remain confident in our full year revenue profit and cash flow outlook. Although there are some unusual quarterly phasing to discuss.
Chris: Let's start with research performance.
Chris: Quarter and year to date revenue were up 1% and 2% respectively.
Chris: For the quarter research publishing growth of 1% was driven by growth in gold open access and our institutional models offsetting an unusually large quarterly swing of $5 million and legacy print and licensing revenue.
Chris: Legacy revenue includes many different smaller products such as back files article pay per view.
Chris: Digital archives and title by title sales to libraries of.
Chris: The vast majority of this revenue is nonrecurring and so it tends to be very uneven.
Legacy performance this quarter was largely due to unfavorable comps, notably a one time backfile deal in the prior year.
Chris: Research publishing is largely a recurring revenue business dominated by multiyear licences to research institutions in the form of subscriptions and transformational agreements.
Chris: We're in the early stages of the calendar 'twenty five renewal season, but we feel good about what we're seeing so far.
Chris: We've already renewed several transformational agreements, including with one of our largest library consortia and.
Chris: And are making good progress on our overall goals here.
Chris: The renewal season runs from now until March April 2025.
Research solutions continue to improve this quarter with revenue growth of 2% driven by career centers managed services and databases this offset softness in advertising.
Chris: We anticipate continued improvement for this business in the second half driven by new products in our society business pipeline.
Chris: Adjusted EBITDA for research Rose, 1% driven by revenue performance offset by reinvestment in the growth and productivity initiatives that Matt touched on earlier.
Chris: Our Q2 margin was 31, 3% compared to 31, 6% in the prior year period.
Chris: Year to date, it was 33% versus 37% in the prior year.
Chris: To summarize.
We are confident in our continued growth and improvement in research and in the Reinvestments, we're making to drive long term success, we remain confident in our full year outlook for research.
Chris: Learning continues to perform well.
Q2 revenue rose, 7% or 5%, excluding AI driven by growth in both academic and professional.
Chris: Academic was up 5% or 3%, excluding AI driven by continued double digit growth in resi book stem courseware inclusive access and licensing.
Offsetting continued print declines.
Chris: Year to date academic was up 12% or 4% excluding AI.
After a down Q1 professional had a very good quarter with revenue up 11% or 8% excluding AI.
Chris: We saw a positive online retail environment with improved store inventory levels and sell through.
Chris: And we're benefiting from publishing more frontlist titles and high demand categories. Most importantly, we've accelerated our pace in signing new titles. The most we secured in years.
Chris: This bodes well for future revenue growth in this business.
Chris: Professional publishing is a great example of where our targeted investment is starting to pay off.
Chris: Not declaring victory yet as this business tends to be more cyclical than others, but we're certainly encouraged.
Chris: Finally on the assessment side, which includes personality profile and team building offerings.
Chris: Saw a low single digit growth this quarter due to a soft corporate spending environment.
Chris: Year to date professional was up 8% or 1% excluding AI.
Chris: To summarize the learning team continues to execute well driving both revenue growth and over 500 basis points of margin improvement this quarter compared to the prior year.
Chris: Year to date, our adjusted EBITDA margin was 35, 2% versus 29, 1%.
Chris: It's an example of what a more focused wiley can accomplish.
Chris: Corporate expenses were flat this quarter are up slightly year to date with higher tech spending for enterprise modernization offsetting lower executive severance costs and cost savings.
Chris: As a reminder, these corporate expenses not allocated to the business corporate expenses are certainly an area that we'll be looking at going forward.
Let's talk about the remainder of the year.
Chris: First it's important to look at us on a full year basis, rather than by quarter.
Chris: To that end, we anticipate an uneven second half with Q3 challenged in Q4 elevated.
Chris: Through the first half revenue was up 2% and our adjusted EBITDA margin is up 220 basis points to 21, 9%.
Chris: In the second half a significant portion of our fiscal year revenue and profit growth as expected in Q4.
Chris: This is due to strong momentum and favorable comparisons in research.
Chris: As a reminder, research revenue and adjusted EBITDA were down last Q4 due to the timing of certain journal renewals and market headwinds in our solutions business.
Chris: This year, we're seeing strong momentum in publishing and improvement in solutions.
Chris: This along with underlying growth in our core learning business is expected to offset the $23 million onetime AI deal in Q4 of the prior year.
Chris: Q3 is typically a lighter quarter due to seasonal fluctuations in learning revenue.
Chris: And we will be challenged by our current year investments.
That said.
Chris: We are reaffirming our full year guidance across all metrics, given our first half performance and leading indicators.
Chris: Let me quickly summarize our full year outlook.
Chris: We're projecting full year revenue of $1 65 to $1 69 billion.
Our topline growth rate of 2% to 4%.
Chris: The two AI projects already executed.
Chris: One in Q4 and one in the first half of this year, largely offset each other and year on year comparisons.
Chris: Adjusted EBITDA is expected to be in the range of $385 million to $410 million.
Chris: For a growth of 4% to 11%.
Chris: This reflects a margin target of 23% to 24%.
Chris: As a reminder, we expect to realize 60 million of cost savings in year.
Chris: But ah reinvesting half of that or $30 million.
Chris: On top of this we're reinvesting the $15 million of proceeds from our Q1 AI deal.
Chris: For total in year reinvestment of $45 million.
As Matt noted.
Chris: We come out of a multi year period of Underinvestment in the core so.
Chris: So we are moving decisively on growth opportunities and strengthening our position in the market.
Chris: As a reminder margin expansion, it's a multiyear objective for us with our goal of 23% to 24% this year rising to 24% to 25% in fiscal 'twenty, six and working to continuously expand beyond that.
Chris: Adjusted EPS is expected to be in the range of $3 25 to $3 60.
Chris: For growth of 17% to 29%.
Chris: The primary drivers are higher expected adjusted operating income and.
Chris: In accrued interest income from divestitures offsetting higher interest and tax expense.
Chris: Free cash flows anticipated to be approximately $125 million up from $114 million.
Chris: This is due to improved working capital and lower restructuring payments.
Chris: Offsetting higher incentive compensation payments.
Chris: <unk> to the prior year period.
Chris: Note that annual cash incentive payouts are made in Q1 for prior year performance.
Chris: And that over 90% of our colleagues who are in the annual incentive plan.
Chris: We will have more full year visibility when we report our Q3 results in March.
Chris: Let's turn to our financial position.
Chris: Free cash flow for the half was a use of $130 million slightly ahead of prior year.
Chris: Always a reminder, free cash flow is historically a use of cash in the first half due to the timing of annual journal subscription receipts.
Chris: Which are concentrated in Q3 and Q4.
Chris: Lower capex year to date was due to timing.
Chris: Also we have some foregone cash earnings from divested assets.
Chris: As a reminder, we don't adjust that out and cash flow.
Chris: Year to date, we allocated $64 million towards dividends and share repurchases up from $61 million in the prior year.
Chris: Approximately $25 million was used to acquire 557000 shares.
Chris: And an average cost per share of $44 89.
Chris: In June 2024 wildly.
Chris: Wildly raised its dividend for the 30 <unk> consecutive year.
Chris: Not many small cap companies can say that.
Chris: Finally.
Chris: Our net debt to EBITDA ratio was two two at the end of October.
Chris: Paired to two <unk> in the prior year period.
And with that.
Matt: I'll pass it over to Matt.
Matt: Thank you, Chris let me briefly summarize.
Matt: As I said last quarter, we're off to a good start but were not declaring victory. We have a lot more work to do to achieve our full revenue and margin potential which will be a multiyear effort.
Matt: We remain confident in core demand trends and other performance indicators, our execution and our alignment as an organization.
Matt: We're making good progress in margin improvement with more to come.
Matt: We are an early mover in AI. We are one of the first publishers to close a large licensing deal with LLM developers.
Matt: And were early to market, an AI driven research fraud detection.
Matt: We are an early adopter of sales forces Asia for us for a customer service optimization. They even cited our example on their recent earnings call. We are working through various opportunities and feel good about the pipeline and our execution in this area.
Matt: We are a leaner more focused executive team now and we're often running.
Matt: Our performance to date is as expected and we are confident in achieving our outlook.
Matt: Continuous improvement is our multiyear drumbeat, we're reinvesting where we have competitive advantage in operating leverage and we are continuously evaluating our cost structure.
Matt: This is not a one or two year trajectory, it's a continuum.
Matt: I'll finish by thanking our Wiley colleagues for everything they do to make wildly wildly.
Matt: And historically significant company at the forefront of change a company doing good in the world.
Thank you all for joining us today I want to wish you and your families are safe and happy holiday season.
Matt: I will now open the floor to any comments and questions.
Speaker Change: At this time, if you'd like to ask a question simply press star followed by the number one on your telephone keypad, we will take our first question from the line of Daniel Moore with CJS Securities. Please go ahead.
Daniel Moore: Good morning, Matthew Good morning, Chris Thanks for taking the questions and color you covered a lot of ground. So I may have a few questions. This morning as well if that's okay.
Speaker Change: That's fine Dan how are you.
Very well, let me start with the momentum that youre seeing in the learning business.
Speaker Change: <unk> talked about some of the drivers, but maybe elaborate a little bit as well as your confidence in the sustainability of that growth going forward.
Sure. We also have Jay with us so I'm going to ask Jay to comment on that.
Speaker Change: Oh, Great Hey, Dan Nice to talk to you again this morning, and thanks for thanks for the continued interest in coverage we.
We feel.
Speaker Change: Optimistic that we're on track to achieve our guidance driven in part by.
Speaker Change: Performance and learning I want to focus for a second on the margin side. The team has done a great job over the last 18 months to adjust our cost structure and continue to drive top line performance at the same time and that has been.
Speaker Change: A really strong effort by the part of the leadership there.
Speaker Change: We are seeing continued growth in our <unk> platform in computer Science data science AI that is a core driver of performance and learning.
Speaker Change: As well as a.
Speaker Change: A better recovery in our trade business, which as Chris noted in his prepared remarks had been an underinvested area for us.
Speaker Change: We also feel very good about the progress that the team is making and new content acquisition and particular in signings, which are a good forward looking indicator for us so all of that taken together with some added tailwind from.
Speaker Change: AI revenue, which.
Speaker Change: As always nice to see in that business, we feel like.
Speaker Change: We're on a good footing and learning we've stabilized that business and the return to growth is exactly what we predicted when we started on this journey.
Speaker Change: Very helpful and then switching to research.
Speaker Change: Maybe just talk a little bit more about trends that youre seeing in article submissions as well as your expectations for growth.
Speaker Change: Overall that and then secondarily.
Speaker Change: <unk> may be limited in what you can say at this point, but the.
Speaker Change: The new agreement in India is certainly interesting.
Speaker Change: When might you have more to say about.
Speaker Change: Yes.
Speaker Change: <unk> potential.
Speaker Change: Growth potential as well as any margin impact that you see.
Speaker Change: From that type of opportunity.
Speaker Change: Greg Let me start with India, just for a second and then we'll kind of work backwards.
Has been working with the Indian government for multiple years to evaluate the potential for <unk>.
Speaker Change: One nation, one subscription agreement.
Speaker Change: And.
Speaker Change: The.
Speaker Change: We're very pleased first of all we were.
Speaker Change: Want to congratulate the Indian government forgetting.
Speaker Change: This deal over the line, it's been it's been a priority for <unk>.
Speaker Change: For the multi government for a number of years to get this done. So we think this is going to have a huge impact for Indian research.
Speaker Change: This expands coverage.
Speaker Change: Accessed.
Speaker Change: Journal and database content.
Speaker Change: <unk>, a tremendous number of Indian institutions, and we're going to see it is little early to talk about about impact that we're going to see commensurate.
Speaker Change: Growth in our subscription revenue base. We have also through this process really developed close partnerships with some of the key Indian institutions in India is the sixth largest market in the world for article so.
Speaker Change: Those partnerships give us an opportunity to think about new ways to adjust our publishing approach in India.
Speaker Change: We feel like there is great potential in the market in core areas that we all know about like engineering.
Speaker Change: But also increasingly as the government expand its priorities in too.
Speaker Change: Core primary research in physics, and life Sciences in Biosciences.
Speaker Change: It's a very it's a market with a lot of potential and we're glad to be in on the ground floor with the with the one nationwide subscription agreements.
Speaker Change: In terms of overall, what we're seeing in article submissions that pattern holds.
Speaker Change: Holds the same.
Speaker Change: Markets in Asia are growing faster than markets in the west but.
What I'd like to point out is that the markets in the west have recovered.
Speaker Change: So.
Speaker Change: In fact, we've seen a return to growth and that kind of mid single digits in most of the western markets and continued tailwind from places like India China.
Speaker Change: Excitingly offset Japan, so we're feeling really good about.
Speaker Change: Continued demand for our services.
As we always like to point out a lot of these articles go too.
Speaker Change: Underpin the value of our subscription business, so it's not going to pop as incremental revenue, but it underlies that core engine for Wiley.
Speaker Change: And continues to bolster that and then.
Speaker Change: As Chris said in his prepared remarks, we did see nice growth in in the prior Q.
Speaker Change: From our author paid.
Revenue streams.
Daniel Moore: Our author pays open access in the journals business and we expect that to continue throughout the year, Yes. Dan. There is also an important nuance to the volume winches that even though the western markets have lower growth rates.
Speaker Change: Because of the maturity of science in the Western markets those articles have higher approval rates.
Daniel Moore: So so it's both.
Daniel Moore: It's mix plus.
Daniel Moore: How many articles do we accept it.
Daniel Moore: As we have talked about in the past, it's there's some complex dynamics around despite the article pipeline.
Speaker Change: No that's probably intuitive, but a great reminder, thank you.
Daniel Moore: Yeah.
Speaker Change: Maybe just you touched on it.
Speaker Change: Additional cost rationalization, my word not yours, but cost reduction or management opportunities, where do you see the most opportunity and do you expect to be in a position to quantify kind of the second leg of targeted cost reduction initiatives or do you expect additional savings to be more kind of incremental and ongoing.
Speaker Change: Couple of perspectives, and then I'll ask Chris to comment.
Speaker Change: We see opportunities across the board.
Speaker Change: We particularly an area of focus for US is technology as we modernize our infrastructure, even though we have some substantial investment going on in.
Speaker Change: Infrastructure modernization and we are looking forward to seeing the benefits of that.
Speaker Change: Obviously, we'll probably in the year and so when those projects are completed.
Speaker Change: I think the more important message is margin improvement is now a way of life here and.
Speaker Change: And we don't view it as separate projects.
Speaker Change: But it really a continuous effort to improve margins year on year.
Speaker Change: So.
The good news is that we all get it.
Speaker Change: The shared goal among the team and we're excited about it.
Speaker Change: So we will give more visibility into what the next few years look like.
Speaker Change: Later this year as we see how all.
Speaker Change: Ill landing point and how this year plays out.
Speaker Change: But we are excited about the opportunity to continue to drive.
Speaker Change: Margin improvement as we reinvest in growth in the core business, Chris anything you want to add no I don't necessarily have a lot more to add to that that.
Speaker Change: I would say shared services in general is an area, where we see the opportunities and it's just a bit premature to put specific numbers on anything at this point.
Speaker Change: Makes sense.
Speaker Change: Any update on potential collections from the sale of divested businesses.
At this point.
Speaker Change: We anticipate.
Speaker Change: Getting the funds that are owed us.
Speaker Change: We do not have timing necessarily on the largest outstanding balance which was related to our University services.
Speaker Change: <unk>.
Speaker Change: We continue to watch that business closely and it's performing and we.
Speaker Change: And I anticipate that we will see some funds.
Speaker Change: In the future, but not on a date or a schedule that that we can articulate at this point.
Speaker Change: <unk>.
Speaker Change: The due date on that.
Speaker Change: Note is substantially in the future.
Speaker Change: We would.
Speaker Change: Hope that they will be able to secure some rounds of funding before that to date.
Speaker Change: Makes sense appreciate the color.
Speaker Change: From a capital allocation perspective, obviously.
Speaker Change: Cash flow much heavier in the back half of the year.
Speaker Change: As is typical.
Speaker Change: Continue to return cash to shareholders, including 25 million for buybacks just talk about priorities going forward.
Speaker Change: As that cash comes in would you be content to further reduce leverage.
Speaker Change: You do have internal investments, but.
Speaker Change: Or would you.
Speaker Change: Continue to be aggressive in terms of returning cash to shareholders.
Speaker Change: Or are there other areas of investment should be thinking about.
Speaker Change: Yes.
Speaker Change: We've had traditionally a very balanced approach and we would look to continue that as that cash came back.
Speaker Change: Are always evaluating opportunities to deploy it for future growth or.
Speaker Change: But.
Speaker Change: And have a solid returns to shareholders.
Speaker Change: I would look for anything unique to come out of that.
Speaker Change: Most likely be initially used to pay down debt, but be able to secure our ability to make investments into the future.
Speaker Change: Understood last one for me you know we've made a ton of progress.
Speaker Change: The portfolio has been reshaped.
Speaker Change: Sure.
Speaker Change: Getting further down the path in terms of your restructuring activities.
Pivoting to growth any plans for more aggressive investor relations outreach has been a while since we did an analyst investor day.
Speaker Change: Obviously tons changed since then so just wondering what your thinking is on that front as we head into maybe fiscal 'twenty six. Thank you again for all the color.
I agree with you we do.
Speaker Change: We have.
Speaker Change: Different leadership team in place.
Speaker Change: We've become more focused so we're evaluating when is the best time to do this and it'll be sometime in the next calendar year, but we do won't do an investor day, and because we have really a lot of good things.
Speaker Change: Going on that we want a share. So the question is when and when is the best time to do that but I would expect one in the new calendar year.
Speaker Change: Very good Chris look forward to working with you and thank you again for all the color.
Daniel Moore: Thanks, very much thanks, Dan.
Speaker Change: And that will conclude our question and answer session and I will now turn the call back over to Matt Kissner for any closing remarks.
Matt Kissner: Well, thanks for joining us on this journey wishing you and your families happy and healthy holiday season, and we look forward to sharing more in our Q3 earnings in March.
Thank you all for joining today's call you may now disconnect.
Matt Kissner: [music].
Matt Kissner: Yes.
Matt Kissner: Okay.
Matt Kissner: Okay.
Matt Kissner: [music].
Matt Kissner: Sure.
Matt Kissner: Okay.