John Wiley & Sons, Inc.

Good morning, and welcome to Wiley's fourth quarter and fiscal 2026 earnings call. As a reminder, this conference is being recorded. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.

Good morning, everyone. With me today are Matt Kistner, 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 viewed as alternatives to measures under GAAP. 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. Additional information is included in our filings with the SEC. A copy of this presentation and transcript will be available at investors.wiley.com. I'll now turn the call over to Matt Kistner.

Thank you, Brian. Hello, everyone, and welcome to Wiley's fourth quarter and full year earnings update. Fiscal 26 was our breakout year. We delivered record margins and exceptional cash flow growth, accelerated our leadership position in the AI economy, and capped the year with transformational moves from market-defining AI partnerships to the appointment of visionary leaders in research and AI to our largest acquisition since 2007. Wiley's trusted content and intelligence is the foundation for the rapid advancement of science and innovation. And it's never been more in demand. As I've said before, AI is only as good as the content and data that fuels it. And Wiley has one of the most comprehensive and trusted portfolios in the world. Gold in, gold out, to quote our friends at Open Evidence. Wiley is that gold. I'll walk through the year and all the great work we're doing to accelerate our high-margin growth engines, and Craig will take you through our financials, operational excellence, and outlook. Before I get to results, I want to step back and frame how we think about the business, because it's the key to everything that follows. We have two reinforcing growth engines. Research is our foundation, leveraging our wide moat, scale, and relationships to cultivate proprietary content and data and drive market share in high-demand academic disciplines. It's durable and growing at mid-single digits. AI and data analytics is our emerging growth engine. By layering research intelligence services over that same proprietary content and data, we are evolving from a pure content provider into a higher value partner that helps corporate R&D and academic labs make better informed decisions. Reinforcement is simple. Research publishing feeds the trusted content and data that accelerates AI and analytics growth. And AI in turn powers the intelligence and productivity that accelerates research publishing growth. This is the Wiley flywheel, and you could see it turning in our recent results and gaining speed. This was a defining year for Tomorrow's Wiley. A few highlights. We delivered mid-single-digit growth in research with record volume and strong recurring revenue. After the quarter closed, we acquired Emerald Publishing to extend our scale in research and our proprietary content advantage in AI. We grew AI revenue from $40 million to $49 million with a rapidly expanding recurring base. We executed strategic partnerships with IQVIA and OpenEvidence, and we launched our Nexus content licensing service for other publishers. We continue to deliver on our key growth initiatives, including the expansion of our advanced journal portfolio and build out of our clinical outcome assessments business. We executed a landmark partnership with Retusa to transform product innovation and reduce costs. And we recently onboarded world-class executives in research and AI and data analytics. Just look at the caliber of companies and organizations Wiley has partnered with this year. We're embedded with today's AI leaders and across the broader scientific ecosystem. That momentum carries into fiscal 27 with greater scale, opportunity, and ambition. Turning now to our full-year results. Fiscal 26 saw us execute well, even with revenue challenges and learning. We delivered another year of exceptional margin expansion and cash flow growth, alongside record return to shareholders. Adjusted revenue was flat to prior year, or up 1%, including the impact of currency. This is compared to our outlook of low single-digit growth, with learning headwinds being the primary difference. Strong demand and research continued, with 11% output growth and 4% revenue growth. Adjusted EBITDA margin rose 220 basis points to 26.2%, and adjusted operating margin rose 260 basis points to 17.7%. Both are all-time highs in our reporting history. This was driven by material progress in reducing corporate expenses and expanding research margins. We grew adjusted EPS by 15%. Free cash flow was up 55% to $195 million on improved operating performance and lower CapEx, moderated by late renewal signings that shifted cash collection from Q4 to Q1. And we returned $174 million to shareholders, up from $137 million in fiscal 25, including record share repurchases of $100 million. This underscores our disciplined commitment to rewarding shareholders, even as we fund our high return growth engines. Let's turn to our performance over time. When I first spoke to all of you in late 2023, I said that we were going to be relentless in our execution and move with certainty on our value plans, operational improvements, reorganization, and culture. This slide tells that story. Year after year, we've expanded margins, strengthened cash generation, and sharpened our financial profile. And fiscal 26 extended that track record on every measure. Our disciplined cost work has been central to it. We have taken hard structural costs out of the business while reinvesting in our highest return growth engines. This has enabled us to grow our adjusted EBITDA margin and adjusted operating margin by 340 and 560 basis points, respectively, in just two years. Free cash flow conversion has reached 44%. and we more than doubled our share repurchases and raised our dividend for the 32nd consecutive year. Return on invested capital is substantially higher, and our net debt ratio was down to 1.4. Even after the Emerald acquisition, our pro-forma leverage of 2.1 is well within our long-term target range of 1.5 to 2.5. This work has made us a much stronger company than we were even a year ago, leaner, faster, and built on disciplined investments that position us for accelerated, profitable growth in the years ahead. The AI economy plays directly to our strengths. We see, and the market is starting to see, that AI is a major tailwind for high value publishers like Wiley. Here's why. We curate and provide access to a large share of the world's proprietary scientific, technical, and medical content through both our own portfolio and that of our publishing partners. And science never stands still. More than 14,000 new peer-reviewed articles are published every day. We also hold an industry-leading position in the fast-growing knowledge domains most relevant to AI, critical areas of medicine, chemistry, material science, technology and engineering, food and agriculture science, and now economics and finance. In these fields, the world's top research runs through Wiley. In a world awash with misinformation and content scraped from the Internet, Our reputation for quality and trust is a distinct advantage. We are home to two centuries of breakthrough research, hundreds of Nobel Prize winners, and the world's leading societies. All to say, in the world of science, the Wiley brand is synonymous for integrity and quality. And we don't have to defend legacy platform businesses. We've embraced an AI-first approach and enjoy a first mover advantage with model developers and corporations building out AI models and applications, so much so that other publishers want to be part of our network. we've built and continued to build an unparalleled partner ecosystem as i've said before not many companies in our industry can point to an extensive network spanning the world's most prestigious universities and academic societies the largest llm providers and ai innovators multinational corporations, and global publishers. This ecosystem approach enables us to punch above our weight. We're partnering, not competing. We're integrating, not building. Finally, our Capitalite model. Our content advantage and partnership strategy allows us to leverage external infrastructure and interoperability while enabling broad collaboration across the ecosystem, reducing capital requirements and creating network effects that benefit all participants. And because our approach is open, we don't have to bet on any single technology. It works across all platforms. The long-term outlook for our research growth engine remains favorable. We expect AI to be a powerful accelerator of researcher productivity and output, and publishing remains the unquestioned currency of academic advancement, driving employment, promotion, prestige, and grant funding. This is what makes the business so durable and its growth so resilient through continuous technological and societal change. To capture this volume growth, we are scaling our journal portfolio and modernizing our publishing platform and workflows. Large scale, high quality publishers like Wiley have a scale advantage and are taking share and we expect that to continue. A few points are worth reemphasizing. Peer-reviewed research is the global standard and measure for scientific excellence. It's must-have content for institutions and corporations and the trusted foundation for high-value scientific workflows. Demand to publish is growing with ever-increasing global R&D spend and now accelerating with AI. Research publishing has navigated every technology shift because its core value, scientific trust, R&D fuel, author protection, endures. Our momentum in this business is accelerating. Research grew 3% in fiscal 25 and 4% in fiscal 26, with our trajectory now pointing to mid-single-digit growth. Multiple drivers are behind that. First, we're driving market share gains, with submissions up 25% and output up 11%, well ahead of industry output growth of 6% to 8%. Second, our advanced portfolio is accelerating as a global top-tier brand across disciplines, with total revenue of $70 million growing at double digits. As one prominent industry newsletter put it, with advanced, Wiley has been quietly building an enviable portfolio. Third, our society partner ecosystem is delivering gains in publishing and AI, including our landmark signing of the American Society of Mechanical Engineers, or ASME. The ASME had self-published for nearly 150 years, and when they decided to partner, they chose Wiley. Our global scale, reputation, and platform matter, but what really sets us apart is that we are exceptionally good at partnering. We operate as an extension of each society, executing complex transitions and growing their publishing footprint. Of the 600-plus society partners that call Wiley home, many go back decades. This quarter, we renewed our publishing partnership with the American Cancer Society, now in its 30th year, and a clear example of what partner of choice really means. Fourth, our research exchange platform recently landed its first external publisher client in Liverpool University Press. The agreement will allow Liverpool to manage and modernize its academic publishing workflows and scale its journals more efficiently. And we believe Liverpool is just the beginning. Many smaller publishers face the same pressures, so we see a meaningful market for migrating additional customers onto our platform. And fifth, the just-announced addition of Emerald makes Wiley a powerhouse in the social sciences, notably economics, business, finance, and related fields. Let me spend a few minutes on Emerald. The rationale is straightforward. The acquisition deepens our scale and content advantage in both research and AI, and it does so on terms that create real value for shareholders. We acquired Emerald for roughly $450 million or seven times adjusted EBITDA on a synergized basis. Its financial profile is compelling. Emerald delivers a high-margin, highly recurring revenue stream with strong cash characteristics, and we see clear value creation ahead. Between the $30 million of expected cost synergies and multiple revenue growth synergies from geographic expansion, cross-selling, and licensing, The returns are attractive and near-term. We expect Emerald to be modestly accretive to adjusted EPS in year one and accretive to free cash flow in year two, with ROIC exceeding our weighted average cost of capital by year two. As noted, we expect to realize the full cost synergies by year three with material savings in year two. Emerald is squarely in our wheelhouse. Its operating model, journal publishing, content licensing, and recurring institutional revenue closely mirrors our own, and we have a long track record of integrating journal acquisitions and partnerships. More on Emerald and why it's such a strong fit. With nearly six decades of publishing heritage, Emerald brings a rich and growing portfolio nearly 500 journals, thousands of data-rich book titles and case studies, and a half a million backfile assets. They're a destination of choice for researchers worldwide, with submissions up 28% and revenue growing at mid-single digits. Over 90% of its $85 million in revenue is recurring, with customer retention above 99%. Emerald only generates 15% of its revenue from North America, and yet that region represents 40% of global spend on social sciences research. Wiley, of course, has a strong position in the U.S., so this is a clear growth opportunity for us. Emerald is a clear cultural fit, UK based. They share our mission driven mindset with a reputation built on integrity and quality and the heritage of championing fresh thinking. Like us, they act with purpose and build trust through respect and humility. And they are heavily performance driven with incentives well aligned to the value we intend to create together. In summary, Emerald accelerates every one of our four value drivers. On accelerate research core growth, it strategically expands our portfolio to roughly 2,500 journals with leading positions across all key publishing areas, further strengthening our scale and moat. on scale AI and data analytics. It expands our content and data advantage, notably economics, business, finance, and engineering. High-value domains with certain AI models increasingly need authoritative, structured content to reason about markets, decisions, and the economy. Prospective customers include financial services firms, consultancies, and business schools. On drive multi-year margin expansion, Emerald is substantially accretive to Wiley's overall margin, especially after synergies, and it adds a durable subscription-based revenue stream. On disciplined portfolio and capital allocation, Emerald is a focused, on-strategy deployment of capital, deepening our position in high-margin research publishing and adding a recurring subscription cash flow stream that strengthens the durability of our financial profile. We expect this to be a seamless integration with predictable synergy capture as we're drawing on a proven Wiley playbook for integrating general assets and businesses, capabilities we have refined across prior acquisitions. And our advanced research exchange platform is purpose-built to onboard journal assets quickly and at scale. This gives us real confidence in the timelines we've laid out. 30 million of core synergies by year three, with meaningful savings expected in year two. We have a new leader in research, but first I want to thank Jay Flynn for his many contributions to Wiley over the years and for the strong foundation he leaves behind. We wish him all the best. Which brings me to Jessica Kowalski. Jessica brings us more than two decades of experience leading both research publishing and AI-enabled businesses at a global scale. She joins us from Microsoft, where she held full P&L accountability for a large-scale global AI data and cloud services business, and before that led data and analytics partnerships at Amazon Web Services. Her research publishing roots run deep. She spent 11 years at Relics in senior roles, where she was central in elevating it from a publisher into an information analytics company. This is exactly the journey Wiley is on, and Jessica is exactly the leader to drive it. Now let me turn to our AI and data analytics growth engine, the second turn of the flywheel. Wiley sits on an exceptionally deep and untapped mine of proprietary data. Beyond our published articles and journals, we have structured metadata and linked domains that surface cross-disciplinary linkages invisible to generic aggregators. We have validated research protocols and methods, how studies were designed, not just what they found. We have peer review signals and editorial judgment, decades of credibility signals baked into the corpus. We have citation networks and reference graphs that are the connective tissue between ideas across disciplines. And we have author and institutional relationships, who is working on what, with whom, and where. On top of that proprietary data, we hold leading content and data positions across the disciplines that matter most in the AI economy. In 150 plus disease areas in life sciences and healthcare, from Alzheimer's and oncology to clinical outcome assessments and medical synthesis. in over 100 chemistry areas, and we have one of the most comprehensive spectral database collections in the world, which allow end users to identify molecules based on their unique chemical signature. We recently released a new edition of our Registry of Mass Spectral Data, expanding compounding coverage to nearly a million reference spectra, strengthening a foundational layer of our scientific data and research intelligence portfolio. In over 50 areas in engineering and 50-plus areas in material science, the latter through our flagship journal, Advanced Materials. in 48 agriculture and food science topics, along with the world's leading crops disease database. And now with Emerald, we're a top one or two leader across key areas of economics, business, and finance. AI cannot substitute for real scientific evidence. If you're building an oncology drug development platform, you're not pulling from social media or scraping the internet. For corporate models and applications to be viable, they require a constant stream of the most trusted content and intelligence at depth. Our advantage isn't only volume, it's depth in exactly the areas where corporate R&D demands precision. Hence, the demand we're seeing. Let's talk about our AI growth trajectory. Total AI revenue grew from $23 million in fiscal 24 to $49 million this year, on track for over $50 million in fiscal 27. The recurring piece is rapidly scaling from roughly $1 million last year to $8 million in fiscal 26, with a path to two to three times that next year. We expect a strong growth trajectory from there as we uncover more data set opportunities in our portfolio, roll out intelligence products, and unlock value from our highly specialized and engaged audience. We now count 19 corporate customers for AI subscription knowledge feeds, up from 10 last quarter. These are typically six-figure annual contracts for a single vertical content collection in a single department pioneering AI-powered discovery. The expansion path is clear through more knowledge feed collections, more departments, and more use cases. We're also starting to make meaningful inroads across industry verticals, which shows how broad our content advantage is. Of these 19 customers, 12 are in life sciences, four in engineering, materials, or chemistry, two in financial services, and one in ag and food science. This includes seven of the top 10 global pharmaceutical companies. Our use case runway is substantial. We also serve four LLM developers for training. Most of them repeat customers. And we anticipate material training revenue to continue in fiscal 27. Our Nexus AI licensing service now consists of 41 publisher partners from top tier societies to multidisciplinary publishers. These partners collectively represent nearly 100,000 book titles across scientific and technical disciplines, as well as journal and video content. During the year, we generated $19 million of licensing revenue from this Nexus partner network. Finally, we have 38,000 researchers trialing our gateway platform, which connects our trusted database directly to AI daily workflows. All this is evidence that the engine is accelerating. Building on our leadership position in AI, we see three organic growth vectors, each leveraging existing assets and each with its own growth path. We'll lay more of this out at a Fiscal 27 Investor Day, but I want to give you an early readout. First, database solutions. In demand, proprietary data sets in our existing portfolio. Think of our rapidly growing clinical outcome assessments business as one of the many examples. Second, applied research intelligence. A synthesis-first intelligence platform embedding wireless content in corporate R&D workflows, moving us up the value chain from content access to actionable intelligence. And third, audience monetization, scaling our unique data assets and reach into an analytics and ad tech platform. There's compounding logic here. Our structured content and data is not only a major growth opportunity in its own right, which we've begun to monetize, but the very foundation for our differentiated intelligence platform. We're energized by how the corporate R&D and academic markets are evolving toward our research intelligence and by the unique position we hold. Nowhere is our momentum clearer than in healthcare AI. The year speaks for itself. At the start of fiscal 26, we signed the AWS Life Sciences Partnership. In July, we became the first publisher to partner with Anthropic on Claude for Life Sciences. In November, we signed our Clinical Outcome Assessment Partnership with IQVIA, a deeply strategic relationship that is already producing results. Thank you very much. This event brought together participants to explore how AI can transform the science to patient value chain through the right data, AI agents, intelligence layers grounded in the scholarly record and continuous learning loops. Clinical Outcome Assessments, or COAs, is an increasingly important area for us. Wiley has one of the world's largest collections of COAs. These are patient-reported outcomes from clinical trials. Demand is ever-increasing as clinical trials undergo fundamental transformation requiring these assessments to meet new regulatory standards and improve trial efficacy. COA revenue rose from $700,000 in fiscal 21 to $6.5 million in fiscal 25 and then jumped 68% this year to $11 million, and we expect strong growth to continue. Coas are precisely what we mean by hidden gems in our portfolio. Specialized content and data sets, once hidden inside our portfolio, but now in demand for high-stakes use cases. Coas are just the beginning. We're uncovering more of these hidden gems across the portfolio. In March, we signed a five-year agreement with Open Evidence for research at the point of care. We also took a small equity position, underscoring our mutual commitment to building the future of clinical AI together. We've since added 10 society partners to the collaboration. Also in March, we partnered with Microsoft to integrate trusted medical research directly into Microsoft Dragon Copilot, the AI-powered clinical assistant. Stepping back, the picture is clear. Marquee partnerships across the AI and life sciences ecosystem. Three distinct growth factors built on our unique assets and AI revenue scaling fast. Demand for training continues and recurring revenue is meaningfully accelerating. Wiley is becoming an essential source of trusted content and intelligence and a leader in how that knowledge is put to work. With that, I'll hand it over to Craig to take you through the financials.