John Wiley & Sons Reports 13% Revenue Decline but Increases Operating Income by 39%

John Wiley & Sons, Inc. reported a significant decline in revenue for the second quarter of fiscal year 2025, with net revenue of $426.6 million, a decrease of 13% compared to the same period last year. The decline is attributed to the divestiture of several non-core businesses, including University Services and Wiley Edge, which collectively impacted revenue by approximately $83 million. Despite the drop in revenue, the company achieved an operating income of $64.1 million, a 39% increase from the previous year, and a diluted earnings per share of $0.74, a notable recovery from a loss of $0.35 per share in the prior year.

In terms of operational performance, Wiley's adjusted revenue, which excludes the results from divested segments, increased by 3% on a constant currency basis. The company recognized $21 million from a content rights project aimed at training generative AI models, contributing to a 2% increase in adjusted revenue when excluding this project. The Research segment generated $261.9 million in revenue, up 2% year-over-year, while the Learning segment saw an 8% increase in revenue to $161.5 million, driven by growth in both academic and professional publishing.

Wiley's strategic focus on restructuring has led to a reduction in operating and administrative expenses, which fell by 5% to $238.9 million. The company recorded restructuring and related charges of $3.6 million in the latest quarter, a significant decrease from $25.1 million in the same quarter last year. This restructuring initiative aims to streamline operations and enhance profitability, with anticipated annualized cost savings of approximately $80 million.

The company also reported a net gain of $369,000 from the sale of businesses and assets during the quarter, contrasting sharply with a loss of $51.4 million in the prior year. This reflects the successful completion of divestitures, including the sale of CrossKnowledge and Wiley Edge, which were part of a broader strategy to focus on core business areas. As of October 31, 2024, Wiley's total assets stood at $2.6 billion, with total liabilities of $1.9 billion, resulting in shareholders' equity of $755.3 million.

Looking ahead, Wiley remains optimistic about its growth trajectory, particularly in its Research and Learning segments, which are expected to benefit from increasing global research and development spending. The company plans to continue leveraging its digital offerings, which accounted for over 83% of its revenue in the previous fiscal year, while managing the impacts of market conditions and ongoing restructuring efforts.