John Wiley & Sons, Inc. (NYSE:WLY) Q3 2026 Earnings Call Transcript

John Wiley & Sons, Inc. (NYSE:WLY) Q3 2026 Earnings Call Transcript March 5, 2026

Operator: Good morning, and welcome to John Wiley & Sons, Inc.’s third quarter fiscal 2026 earnings call. As a reminder, this conference is being recorded. After the speakers’ remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. At this time, I would like to introduce John Wiley & Sons, Inc.’s Vice President of Investor Relations, Brian Campbell. Please go ahead.

Brian Campbell: Good morning, everyone. With me today are Matthew Kissner, President and CEO; Craig Albright, Executive Vice President and CFO; and Jay Flynn, Executive Vice President and General Manager of Research and Learning. 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, John Wiley & Sons, Inc. 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. We 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 will now turn the call over to Matthew Kissner.

Matthew Kissner: Thank you, Brian. Hello, everyone, and welcome to our fiscal Q3 earnings update. Before I get to our performance and progress, I want to acknowledge our price amid AI fears across the market. The fact is we do not share those same fears. Quite the opposite. We could not be more confident in our position in the AI economy given our proprietary content advantage, wide moat in peer review research, and unparalleled partnership ecosystem. The ongoing opportunity is twofold. AI is expected to greatly accelerate scientific discovery and research publishing output, and our enriched data and AI solutions are foundational for corporate R&D, AI models, and applications. I will discuss this in more detail later in our call.

The third quarter was fully in line with our stated expectations. Revenue performance was impacted by an unfavorable comparable in research, which we called out in the second quarter, and soft market conditions in learning. We continue to accelerate in all major areas of focus. Research publishing continues to outpace the market with global output up 11%, revenue up 4% excluding AI revenue, and steady growth in our multiyear renewals. In AI and data services, we announced new leadership, launched our clinical outcome assessments partnership with IQVIA, and after quarter close, executed a strategic multiyear partnership with Open Evidence to deliver trusted research at the point of medical care. We also secured a new AI model training customer, our first outside the U.S., and realized $7,000,000 of AI revenue.

We are rapidly advancing our technology transformation initiatives with the announcement of a multiyear managed services partnership with Virtusa. We also continue to deliver corporate expense savings, on an adjusted EBITDA basis, down 21% in the quarter, or $9,000,000 versus prior year. We continue to deliver material margin expansion and cash flow growth with adjusted operating margin of 280 basis points, adjusted EBITDA up 250 basis points, and operating cash flow nearly doubling to $103,000,000. And we are returning more cash to shareholders, with repurchases doubling in Q3 to $70,000,000 year to date as part of a $100,000,000 full-year target. We have returned $120,000,000 in dividends and repurchases in just nine months, a 37% increase over prior year.

Let us turn to how we are executing on our fiscal 2026 commitments. Our first objective is to lead in research. It has been a robust year for research, with revenue up 4% at constant currency and adjusted EBITDA up 6%. We continue to outpace the market in submissions and output of 26–11%. Strong demand is evident across all regions. We have now migrated over 80% of journals to our competitively advantaged Research Exchange platform. Importantly, this migration is what transforms our content from published articles into AI-ready data, the foundation that makes everything we are doing in Gateway, licensing, and subscription knowledge feeds possible. And we continue to expand our journal portfolio through organic investment in our flagship Advanced collection, with eight new journals planned for launch and revenue growth of 50% in our leading open access journal, Advanced Science.

Our second objective is to deliver new growth in AI and adjacent markets. We have generated a record $42,000,000 in AI revenue year to date, above last year’s total of $40,000,000, with one quarter remaining. We continue to make critical inroads into the corporate market with strategic projects executed with healthcare innovators IQVIA and Open Evidence, and other customers for subscription knowledge feeds. We are now at 36 publishing partners for our Nexus content licensing service, and we are in active discussions with others. Finally, we continue to see strong researcher interest in our AI Gateway for scholarly search delivered through partnership with leading companies like Anthropic and Amazon Web Services. Our third objective is to drive operational excellence and discipline across our organization.

We continue to streamline our cost structure with corporate expenses, on an adjusted EBITDA basis, down 21% for the quarter and 12% year to date. Tech transformation took a significant step forward with our recent managed services partnership, which Craig will talk more about in detail. Let me run through our four key strategic priorities and value drivers. First, we are accelerating research core growth and delivering shared gains from our wide moat scale and highly favorable demand trends from global expansion and AI productivity. The research publishing market is growing at 3% to 4%, and we expect to deliver at the top end of that this year. We are delivering new AI and data analytics growth from our proprietary content in critical AI domains and our extensive partnership ecosystem.

As noted, we have already surpassed last year’s AI revenue total with $42,000,000 and a quarter remaining. We are driving multiyear margin expansion with our EBITDA margin up 500 basis points since fiscal 2023 and plans for continued material improvement going forward. Finally, underpinning all of this is our discipline in managing our portfolio, deploying capital on high-return investments, and returning cash to shareholders. Let us turn to our core. For much of calendar 2025, we have been navigating around U.S. funding cuts to science and education. A year ago, I said that we remain fully confident that U.S. research would continue to receive federal support given the essential role that it plays in U.S. economic growth and U.S. global competitiveness.

I am pleased to report that federal investment in scientific research remains resilient, with Congress ultimately enacting significantly smaller reductions than those proposed by the administration, and in key cases, maintaining or increasing agency budgets. This outcome reflects continued bipartisan recognition that sustained funding is critical to the nation’s scientific infrastructure, long-term competitiveness, and innovation capacity. Our calendar 2026 renewal season is about 82% complete, and we are encouraged by the growth we are seeing there. Our subscriptions and transformational agreements are must-have content, which is core to institutions and essential to their missions. We recently marked a milestone of 125 multiyear transformational agreements for consortia representing over 3,000 institutions.

Our recurring models representing about 70% of research publishing remain robust. Let us talk about open access as an incremental growth engine. As discussed, research output is ever increasing, driven by global R&D spend and other factors. Submissions remain at record levels as the number of global researchers increase and productivity gains accelerate. The rate of research output is expected to rise significantly with AI. One recent study showed a threefold increase in the number of papers by researchers who use AI, and we are just at the beginning. Big global publishers like John Wiley & Sons, Inc. stand to benefit most. This volume increases the value of our multiyear subscription and transformational agreements and accelerates growth in author-funded open access, where revenue is a function of price times quantity.

This model is growing consistently above 20%, and demand and pricing power remain robust. I want to call out our investment in the Advanced journal brand and Advanced Science in particular. Researchers are drawn to multidisciplinary publications like Advanced Science for the brand, the impact factor, and the breadth of the audience it reaches. It has become one of the leading open access journals in the world. The Advanced portfolio as a whole will exceed $70,000,000 in revenue in fiscal 2026, growing at strong double digits. Long-term trends in research look increasingly favorable. AI is expected to be a major output accelerator, and research publishing remains essential for not only discovery and prestige, but to advance researchers’ careers and secure additional funding.

This is what makes the business and its growth so strong and durable through continuous technological and societal change. Because of this and expected AI-driven volume acceleration, we are expanding our journal portfolio and modernizing our published platform and workflows to continuously benefit from this evolution. Large-scale, high-quality publishers like John Wiley & Sons, Inc. are reporting market share gains, and we expect this trend to continue for the foreseeable future. And as we have seen time and time again, research funding and publication remain must-haves across economic cycles and political uncertainties. What makes us so well positioned for the AI economy? First, we provide access to much of the world’s proprietary scientific, technical, and medical content through our own portfolio and that of our publishing partners.

As we know, science is constantly evolving. In fact, over 14,000 new peer-review articles are published every day. Second, we enjoy an industry-leading position in fast-growing knowledge domains that are especially relevant for AI: chemistry, material science, oncology, technology and engineering, food science, and finance. John Wiley & Sons, Inc. is the lifeblood. Third, in an ever-changing world, saturated with wrong information and skepticism, our trust and reputation are distinct advantages. Our moats are not only our journal brands but our unmatched peer review networks and editorial boards. We are home to hundreds of Nobel Prize winners and the world’s leading societies, from the American Cancer Society to the American Geophysical Union.

Fourth, we are not bound by legacy platform businesses that we are trying to defend. We have embraced an AI-first approach and enjoy 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. Fifth, we have built an unparalleled partner ecosystem. How many companies can point to a partner network that spans the world’s most prestigious universities and academic societies, the largest LLM providers and AI innovators, multinational corporations, and global publishers? Our ecosystem approach is our secret sauce. We are partnering, not competing. We are integrating, not building. We have the luxury of not having to defend existing business models which may be threatened by AI.

Finally, this gives us an advantageous capital-light model. We have the content advantage. We can then leverage external interoperability while enabling broader collaboration across the ecosystem. This reduces our capital requirements and creates network effects that benefit all participants. It also means we do not have to bet on a particular technology, as our open approach works across all platforms. We see this already with our IQVIA and Open Evidence momentum, and with our connector on Claude and AWS. With that in mind, let us turn to our AI and data strategy. At the foundational level, we are a research and learning publisher leveraging our proprietary content and data for AI. Then comes our Gateway platform, which addresses a problem every researcher faces today.

AI tools are proliferating, but most are built on unverified or incomplete scientific content. The full potential of AI in science will only be realized if researchers have complete confidence in the authenticity of their AI tools and the AI environment. Gateway solves this by embedding peer-reviewed full text, John Wiley & Sons, Inc. and partner content, directly into the platforms where researchers already are: Claude, AWS, Perplexity, and others. We are gratified by the early response. In just four months, 9,000 researchers have registered on the platform, in addition to a growing number of institutions signing up for enterprise access. This is early, but clear evidence of product-market fit. Gateway is not just a search tool. It is the access layer through which trusted scientific knowledge enters the AI workflow, and the layer institutions will increasingly require as a baseline for responsible AI use in research.

Finally, our enriched and AI solutions become the foundation for domain-specific intelligence, which we have referred to as subscription knowledge feeds or retrieval augmentation generation. Customers here include corporations and partners in life sciences, healthcare, engineering and industrials, food and agriculture, and financial services. John Wiley & Sons, Inc. is at a pivotal point in its upward trajectory as AI-related demand for our content and research intelligence accelerates across industry verticals. The time was right to bring in a world-class leader to convert our content advantage into high-margin data services and commercialize our AI-driven offerings, and so we recently announced the appointment of Armahan Rafat as our Chief AI and Data Services Officer.

Armahan brings over 25 years of experience leading technology and data organizations, serving in senior roles at North Stella, Thomson Reuters, Clarivate, and others. His track record for developing analytics products generating hundreds of millions of annual revenue has been exceptional. As he stated in the recent announcement of his appointment, in an era where AI is only as effective as the data that fuels it, the proprietary content John Wiley & Sons, Inc. publishes represents the verified foundational truth that AI and machine learning require. In terms of underlying momentum, we now count 10 corporate customers for our subscription services, and we have secured a new LLM customer for our training services. We continue to add more publishing partners to our licensing network.

We expect to deliver AI revenue of $45,000,000 to $50,000,000 this year, up from $40,000,000 in fiscal 2025 and $23,000,000 in fiscal 2024. We anticipate another big year for total AI revenue in fiscal 2027. I would like to share some examples of real use cases where we are converting our content advantage into practical solutions for major corporations and through recurring revenue models. First, clinical outcome assessments, or COA, are scientifically validated instruments used in pharmaceutical trials to measure how patients feel, function, and respond. COAs are essential for demonstrating treatment impact and meeting regulatory standards for drug approval. John Wiley & Sons, Inc. and its partners have one of the largest collections of COAs going back decades.

It is a rapidly growing area for us, expanding from $800,000 in 2021 to nearly $7,000,000 today. What makes this different is what it means for the pharmaceutical customer. Previously, running a clinical trial meant assembling multiple vendors, from COA licensing to regulatory guidance. That friction costs time and money. John Wiley & Sons, Inc. IQVIA consolidates that into a single trusted relationship. IQVIA is the world’s largest contract research organization, driving $16,000,000,000 of annual revenue, bringing deep pharmaceutical relationships, regulatory expertise, and implementation scale. John Wiley & Sons, Inc. brings the validated instruments, a portfolio of 100+ COA instruments managed on behalf of our society partners, and trusted scientific heritage.

So it is not just a licensing deal. It is a recurring workflow transformation, the kind of deeply embedded relationship that compounds in value as trials grow more complex and the regulatory bar rises. We are really excited about this opportunity now and the scaling potential ahead. We have executed COA agreements with the top 20 pharma companies, and our global pipeline continues to grow. Two days ago, we announced the strategic partnership with Open Evidence, the most widely used clinical decision support platform among U.S. physicians, with more than 40% of doctors using the platform daily across 10,000 hospitals. Open Evidence will bring our trusted scientific content and that of our partners into their rapidly expanding AI platform. The terms of the deal include a five-year, multimillion-dollar licensing agreement for a selection of over 400 journal titles and reference books, as well as the Cochrane Database of Systematic Reviews.

As part of the partnership, John Wiley & Sons, Inc. has taken a small equity position in Open Evidence, underscoring our mutual commitment to building the future of clinical AI together. Important to note, we consider this a first step in our multiyear collaboration. Let me finish with a quote from Open Evidence CEO and founder, Daniel Nadler. The hard problem in medicine right now is not just generating new knowledge. We are living through a golden age of biomedical research. The hard problem is also that it takes 17 years for a fraction of that research to reach the bedside. John Wiley & Sons, Inc. is an ideal partner in solving this problem for physicians. The depth and breadth of John Wiley & Sons, Inc.’s content reinforce the advantages of Open Evidence for physicians, and that compounds over time.

As with IQVIA, this partnership is not just a licensing arrangement. John Wiley & Sons, Inc. is embedding itself into the daily clinical decision-making of physicians. Our equity position reflects our conviction that this is where trusted scientific content meets its highest value application. And importantly, we see this as a template for many others, bringing John Wiley & Sons, Inc.’s content advantage directly into the workflow platforms where critical high-stakes decisions are made. As I mentioned earlier, our partner ecosystem is a huge strategic advantage for us, bringing together AI innovators, R&D corporations, leading institutions, and other publishers. It is only the beginning. I will now turn the call over to Craig.

Craig Albright: Thank you, Matt, and hello, everyone. Three summary points that define where we stand today. Research publishing is growing at the high end of the market’s long-term rate, AI revenue is tracking ahead of expectations, and importantly, we are beginning to see leading indicators of recurring revenue growth in new partnerships, pilots, and pipeline, which is where the real value gets built. And our balance sheet is very strong, giving us the capacity to invest in high-return growth opportunities. Learning continues to face macro and channel headwinds that are masking the underlying earnings power of our business, but we are managing through it with discipline and agility while keeping our focus squarely on the businesses and investments driving long-term value creation.

Turning to our fiscal third quarter results, we projected a light quarter due to unfavorable comps, and overall revenue came in as expected, up 1% on a reported basis and flat at constant currency. Growth in Research Publishing and Academic was offset by moderate declines in Research Solutions and Professional. Reflecting our commitment to operating discipline, we delivered strong margin expansion and profit growth even with revenue softness. Adjusted operating income, adjusted EPS, and adjusted EBITDA were all up double digits, or 22%, 19%, and 12%, respectively. Our adjusted operating margin improved by 280 basis points, and adjusted EBITDA margin by 250 basis points. Adjusted EPS growth was driven by our operating performance and the lower share count as we remain in the market acquiring shares.

This was partially offset by a higher adjusted effective tax rate. Let me turn to our segment performance, starting with Research. Research was up 1%, with a 40-basis-point improvement in EBITDA margin. Research Publishing performance was impacted by $9,000,000 of AI revenue in the prior-year period. Absent AI revenues, Research Publishing was up over 4%, driven by record submissions, solid growth in our recurring revenue models, and over double-digit growth in author-funded open access. As Matt noted, journal licensing renewals are around 82% complete and signs look good. As a reminder, about a third of our renewals come up each year, and customer retention remains above 99%. Our solid renewals combined with our continued submissions and output growth give us good visibility and confidence heading into fiscal 2027.

Research Solutions declined 3% due to lower corporate spending on recruiting and lower database revenue offsetting AI revenue. Year to date, Research revenue and adjusted EBITDA were up 4%–6%, respectively, with EBITDA margin improving 50 basis points. Moving over to Learning, revenue was down 2% in the quarter, with a 5% decline in Professional offsetting 1% growth in Academic. Professional was impacted by corporate and consumer spending headwinds, notably the previously noted Amazon inventory management adjustments, although they are now beginning to stabilize as expected. We are strategically calibrating our editorial focus toward higher-value franchises where we see stronger demand and better margins. Academic rose 1%, driven by higher rights and licensing revenue and digital book sales.

We saw good momentum in our Advanced content business, which includes scientific and technical books for research libraries. We increased our title signings, notably around veterinary science and health, and recently announced a publishing partnership with the International Society of Automation. John Wiley & Sons, Inc. will assume control of ISA’s backlist of approximately 70 titles and collaborate on publishing ISA’s pipeline of automation topics. Year to date, Learning revenue was down 7%, with adjusted EBITDA down 8%. Segment EBITDA margin declined 50 basis points to 34.8%. Now on to our financial position and cash generation, which continue to strengthen. All year-over-year metrics are favorable, with our leverage down to 1.7 from 2.0, CapEx down by 11%, operating cash flow up $51,000,000, and free cash flow up $57,000,000.

We are tracking very well to our free cash flow outlook of approximately $200,000,000. As Matt noted, one of our four value drivers is continuing our multiyear margin expansion. Over the past three years, we have improved our margin profile by 500 basis points, and we are not done. The focus right now is technology transformation. We are creating an AI-first, data-enabled tech organization, optimizing our geographic footprint, rationalizing our application portfolio, and outsourcing support for enterprise technology. We recently announced a five-year managed services partnership with Virtusa, an important first step in accelerating this transformation. Virtusa is a leading product and platform engineering services company based in Massachusetts, with delivery centers in India and Sri Lanka.

It enjoys top-tier global rankings in consulting and IT services and deep relationships with major Fortune 100 and 500 clients. The partnership is expected to lead to material operational efficiencies and cost savings, help us modernize how we manage enterprise technology, and allow our teams to focus on product innovation that benefits our customers and stakeholders. It will also free up capital for high-return AI solutions for our customers and partners. As part of this partnership and our own consolidation plans, Virtusa has assumed ownership of John Wiley & Sons, Inc.’s Sri Lanka technology operation. Overall, we continue to make good progress, with corporate expenses on an adjusted EBITDA basis down 21% in the quarter and 12% year to date.

We reduced total corporate costs before allocations by $17,000,000 year to date, with tech transformation responsible for approximately 85% of those savings. Our fourth and final value driver is to optimize our portfolio and drive disciplined capital allocation. We continue to deploy capital strategically to expand our journal portfolio and content advantage. We are investing to grow presence and share in our fast-growing research markets, notably China and India. China has been a great success story with noteworthy growth in submissions and output renewals and corporate sales. India remains a huge and still-emerging growth market. A year ago, we executed on India’s One Nation, One Subscription initiative, expanding access to over 6,000 Indian institutions and supporting 18,000,000 researchers and students.

Demonstrating the increasing demand we are seeing in this important market, John Wiley & Sons, Inc. India submissions are up 43% year to date. Matt talked about our capital-light model and partnership ecosystem approach to AI, which positions us well for stronger profitability, high cash flow generation, high returns on invested capital, and nimbleness in scaling. Regarding our portfolio, we continue to evaluate and manage specific businesses and products for profitability and strategic fit. We divested a small business in Research Solutions earlier this year, and we will continue to be very active on this front. Regarding acquisitions, we are in a very strong position to continue to pursue high-impact journals in Research Publishing where we see strategic value, synergies, and highly attractive returns.

Last quarter, we acquired the high-impact journal NanoPhotonics, strengthening our physics portfolio and putting us at the forefront of the fast-growing optics field. And we will continue to accelerate our organic growth strategy of developing proprietary high-value research content and data. Finally, I want to highlight our share repurchases, approaching record levels with $70,000,000 returned year to date and a further target of $30,000,000 for Q4. That would put us around 3,000,000 shares repurchased for the year. On top of this, our current dividend yield is approximately 4.5%, supported by a healthy payout ratio. Turning to our outlook for fiscal 2026, we are raising our adjusted EBITDA margin and adjusted EPS guidance to the high end of the range.

We remain confident on all other metrics. Revenue growth is expected to be in the low single digits. Research remains strong, expected to finish at the top end of the market. Learning has been challenged this year by the difficult macro and channel conditions. Adjusted EBITDA margin is now expected to finish at the high end of our 25.5% to 26.5% range, up from 24% last year. Adjusted EPS is also expected to be at the high end of our $3.90 to $4.35 range, up from $3.64 last year. Finally, we reaffirm free cash flow of approximately $200,000,000, driven by EBITDA growth, lower interest payments, and favorable working capital. CapEx is expected to be comparable to last year’s total of $77,000,000. With that, I will pass the call back to Matt.

Matthew Kissner: As I wrap up, I want to say a few words about fiscal 2027. We will provide formal guidance in June, of course, but I want to give you a sense of what we are seeing. Expect Research growth and strong momentum to continue, driven by robust publishing output, steady growth in renewals, market share gains, and society wins. We see Learning improving to a steady state as we focus on franchise authors, digital growth, and inclusive access, and we will continue to tackle our cost base. AI momentum is expected to further accelerate from our executed multiyear partnerships and increased corporate uptake, and we expect another big year in AI revenue. We will start to see the benefits of streamlined business development and product innovation under Armahan.

Finally, we anticipate copyright court decisions to start to materialize. We have talked about the Anthropic copyright settlement, the largest in U.S. history, and that is still in the claims process. We expect to know our share of that by the summer. Important to note, there are approximately 70 copyright lawsuits currently underway in the U.S. involving AI. Our operational excellence initiatives are fast-tracking with full launch of our Research Exchange platform, the kickoff of our new managed services partnership, and the momentum of our AI Center of Excellence. We expect to drive meaningful margin expansion again from tech transformation, corporate expense reduction, and AI productivity gains. And we remain focused on portfolio optimization and disciplined capital allocation to drive higher ROIC and recurring revenue growth, scale up in Research Publishing, and reward our long-term shareholders.

Let me quickly review some key takeaways before opening the floor to questions. We are accelerating our progress on all major areas of focus, driving meaningful growth and momentum in Research and AI, expanding margins and cash flow, deploying capital strategically, and improving ROIC. Q3 was in line with our expectations, and we are on track to achieve our full-year outlook at the high end for margin and EPS. And finally, John Wiley & Sons, Inc. remains extremely well positioned for the AI economy. Our core publishing business is robust and uniquely secure. Our proprietary content, domain-specific intelligence, and partnership ecosystem are in continuously high demand. AI is only as good as the data that fuels it. This is where John Wiley & Sons, Inc.

comes in. Thank you to our 5,000 colleagues around the world for all you do to transform knowledge into the breakthroughs that matter, and to our investors for joining us and seeing the long-term value-creation potential of our business. We will now open for questions.

Operator: At this time, I would like to remind everyone: in order to ask a question, press star, then the number 1 on your telephone keypad. We will pause for just a moment. Your first question comes from the line of Daniel Moore with CJS Securities. Your line is open.

Q&A Session

Daniel Moore: Thanks, Matt. Thanks, Greg. A lot of detail there. Greatly appreciate it. Let me start, I guess we will start with AI. You know, you just laid it out very well. But two years ago, signed your first, you know, kind of initial nonrecurring deals. You know, since then, AI-related revenue doubled from $23,000,000 to $40,000,000 on our way to $45,000,000 to $50,000,000. What can you tell us about the momentum and direction of AI-related revenue and contributions that, you know, maybe you could not two years ago, as we think about fiscal 2026 as a platform for growth?

Matthew Kissner: Yes. Let me start, Dan. Thanks, by the way. And that is exactly what you are seeing. It is kind of you are seeing the market evolve, and I will turn it to Craig in a minute to get a little more specific, but—and then the emergence of the business models around recurring revenue. And so you see what we have done with IQVIA and Open Evidence. Almost think of them as blueprints for what a much bigger market opportunity might look like. And you know, I know you want specifics. You know, we can talk a little bit about these, but you know, there is a lot more to come as these expand. So let me turn it over to Craig to add some more light on that.

Craig Albright: Thanks, Matt. Yes. We like to think of AI opportunity in the market really moving in different kind of growth curves. As you know, we kind of, a few years ago, as you mentioned, kind of really started learning and getting into the market and partnering. And we moved into the training model. The first growth curve, if you will, was largely evidenced by nonrecurring revenue, but important for us to gain partnerships, learn, start to develop where we are headed with our next curve. And then that next curve being the one where we start to get into the recurring revenue models, subscription models, ways where we can really create true sustainable value over time. And we have really started to see that materialize.

In the first growth curve, we have seen a little bit more legs to it than we initially imagined, and we are now starting to see the ramp-up of the second growth curve. So this year, we are slightly under 10% of our $45,000,000 to $50,000,000 in terms of recurring revenue, and we expect that to triple next year. And we are going to continue to work to drive that even higher. So we are excited about the progress we are making. It is still early days. And I would say we are moving as fast as our customers are moving, but really trying to seize every opportunity as we go forward.

Matthew Kissner: Yes. I want to add two important points to help with the understanding. One is that comment about we can move as fast as our customers are moving because, you know, I think everyone is learning how to bring AI into their core business processes. So a lot of the growth here is going to be based on the customers’ learning on how to use AI to improve research productivity, shorten cycles, et cetera. We are there with them side by side. Second is, as I mentioned, we have a new leader for our AI and data services focus in Armahan, and he is now building out a growth plan. And, you know, I would expect as he completes that plan, we can provide more transparency into how we see this evolving.

Daniel Moore: Really helpful. Appreciate it. I was going to ask you about the moat, but I think we covered that in the first 10 or 15 minutes really well. On the margin side, the—mhmm. Obviously, you reduced corporate expense, I think, million this quarter, down 20% plus. On track for 26% plus EBITDA margins. Two different questions, but one, maybe elaborate on the partnership with Virtusa, the implications around potential cost and savings as we move forward, and what does that imply about the direction of EBITDA margins in kind of fiscal 2027 and beyond? Thanks, Dan.

Craig Albright: We are very excited about the partnership with Virtusa. You know, we have a preexisting relationship, and we are really expanding that on a significant scale. This relationship for us is a—you know, roughly, right, it is $150,000,000 over five years in terms of their contract size. We expect it to generate both productivity as well as agility. So we see it contributing towards, you know, our margin expansion objectives. We also see it compelling—propelling us into AI-type tools and AI-first technology infrastructure that is going to really help us continue to find innovation and productivity through the years. I would say from a margins perspective, I will not get into the details about, you know, specifics on what it yields.

But I will say that tech transformation broadly has been a significant driver of our expansion this year, and we expect that to continue going forward, into the coming years, as we layer on other types of initiatives as well that are going to really help to continue to drive multiyear margin expansion.

Daniel Moore: Perfect. And just Research Publishing up 4% adjusted. Article submissions, you know, continue to be really strong, up 26%. You know, I guess, outside of China, you mentioned India, any other kind of fast-growing regions or pockets of strength? And, you know, given double-digit growth in submissions this quarter, double-digit growth in output, would we expect that 4% growth to trend even higher? Or is that a good place to be from your perspective here for the near term?

Matthew Kissner: Jay, why do you not begin, and I may wrap up.

Jay Flynn: Yes, sure. Hi, Dan. Thanks again for the questions. Yes. We are seeing growth across, you know, a broad set of regions. The strongest momentum continues to come from the major global research markets. We saw good growth in China, as you mentioned, and India, as you mentioned, but in North America too—submissions, article volume up there. European markets as well really rebounded strongly for us. Happy to see Japan growing again after a tough couple of years in that market. So at the same time, you know, we like what is happening in the Middle East, and we like what is happening from a research and investment perspective there. Governments and universities are investing more heavily in research output and in international collaborations.

That, taken together with the strong performance in the core markets, gives us confidence about the trajectory of that business. It is really important to state, as we did a year ago, that growth is not concentrated in any single geography. It reflects the continued expansion, as Matt noted in the prepared remarks, of the global research ecosystem, and that is showing up across submission and publication volumes that are growing at a healthy pace. So, as we said, you know, top end of market range for this year, and with the investments we continue to make in our top brands, with the tailwind that AI is going to provide in the core for submissions and for researcher productivity, we feel confident as before in the trajectory of the business.

Matthew Kissner: Yes. That is a great summary. I think, today, what we are seeing is the resilience and durability of research on a global scale, the benefit of the global diversification that we have, as Jay pointed out, and also, our business is performing quite well, and I would expect it to continue performing at the top of the market.

Daniel Moore: Looks great. Maybe one or two more and I will pass it along. But on the Learning side, yes, I think you talked about getting back to stability. If I sort of bifurcate the Academic versus Professional, you know, pieces of the business. Do we need the, you know, the library on the Professional side to feed either AI, or is it, you know, synergistic? It is just that piece of the business stands out as a little bit, you know, kind of noncore when we think about the real tilt to focus on growth and Research and wondering your thoughts on that.

Matthew Kissner: You know, we have talked about this in the past, and it is, you know, these are great franchises but not growth franchises. You know. And so they are producing strong earnings and cash flow. And, you know, we are always mindful of capital allocation, as I talk about in my remarks. So there are not any sacred cows here. So, you know, we will be looking at this as we go forward, as we do routinely, Dan.

Daniel Moore: Perfect. Last one. I know it is rhetorical. You know, obviously, really strong quarter, outlook very healthy. You know, you are trending toward $5 of cash—of cash earnings per share. The stock is a little over five times EBITDA. Leverage is going to be close to return pretty soon. You know, strong double-digit free cash flow yield. Other than buying back stock and, you know, making the case that you are today, very, you know, articulately, anything else we can do to keep trying to unlock shareholder value? And I know that is, you know, not a fair question, but just throwing it out there. And I appreciate all the color today.

Matthew Kissner: No. It is a good question. Tough question. Craig, do you want to start? And then—

Craig Albright: Yes. I think, Dan, you know, we wake up every day thinking about this: how we create value for John Wiley & Sons, Inc., for our colleagues, for our shareholders, and for all our stakeholders. You know, we think importantly about organic growth investments. You know, with Armahan coming on board, with our focus on AI and data analytics, we see a lot of potential opportunity to really create new value for customers and for—and for John Wiley & Sons, Inc. overall. You know, we continue to think where we have existing core strengths. You know, the Research business is one that continues to show strength and resolve, growing at the top end of the market. So when we think about investments we have made, whether it is Advanced brands or geo diversity, we continue to think very broadly about organic growth opportunities where we have sustainable competitive advantage in our business.

You know, beyond that, you know, portfolio and capital allocation is a way of life. You know, it is—it has been part of what John Wiley & Sons, Inc. has been focused on for several years. And as we mentioned during our earnings call, we had—in my comments, we had divested a small business earlier this year. It shows evidence that we continue to look very strategically and thoughtfully about our business and where to kind of draw the resource and capital to the most effective places for the business. Beyond that, I think we are continuing to be very active on thinking about how we return capital to shareholders. We have a very healthy payout ratio. We have doubled our share buybacks, given the opportunity we have had with a strong cash flow, and we continue to do that while investing in the business.

So we are not making any trade-offs here. I think the opportunities continue to be very robust in front of us, and we are excited to help bring that forward as we tell more of our story.

Daniel Moore: Sounds good. Again, appreciate all the color.

Matthew Kissner: Thank you, Tim.

Operator: Again, if you would like to ask a question, press star, then the number 1 on your telephone keypad.

Operator: At this time—There are no further questions. I will now turn the call back over to Mr. Kissner for closing remarks.

Matthew Kissner: Yes. Thanks, everyone. I want to thank you for your continued confidence in us. You know, you see we are building a solid foundation for the future while delivering strong current results, which was our commitment we made, you know, two and a half years ago. And we are really looking forward to getting together in June in that regard and talking about how we close out the year.

Brian Campbell: See you then. Thank you.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.