John Wiley & Sons (WLY) Q3 2026 earnings summary

Executive summary

• Q3 revenue reached $410 million, up 1% year-over-year, with operating income up 21% and diluted EPS at $0.56 versus a loss last year; adjusted results at constant currency: revenue flat, adjusted operating income up 22%, adjusted EBITDA up 12%, and adjusted EPS up 19%.

• AI and data services generated $7 million in Q3 and $42 million year-to-date, surpassing last year's total, with recurring models and new partnerships driving growth.

• Margin expansion and cash flow growth continue, with significant cost reductions and technology transformation underway; operational excellence initiatives reduced corporate expenses by 21% at constant currency.

• Strategic partnerships with IQVIA and OpenEvidence are driving recurring revenue and embedding content into high-value workflows.

• Free cash flow year-to-date improved to $56 million from a $1 million use last year; $126 million returned to shareholders via repurchases and dividends.

Financial highlights

• Q3 GAAP revenue: $410 million (+1% YoY); operating income: $63 million (+21% YoY); diluted EPS: $0.56 (vs. -$0.43 YoY); adjusted EBITDA: $105 million (+12% YoY), margin 25.7% (+250 bps); adjusted EPS: $0.97 (+19% YoY).

• Adjusted Operating Margin improved by 280 basis points to 17%; Adjusted EBITDA margin up 250 basis points to 25.7%.

• Operating cash flow nearly doubled to $103 million; net debt-to-EBITDA ratio at 1.7, down from 2.0 a year ago.

• $70 million in share repurchases year-to-date, with $126 million returned to shareholders in nine months.

• Q3 operating and administrative expenses fell 5% YoY due to restructuring and cost savings.

Outlook and guidance

• Fiscal 2026 guidance: low single-digit adjusted revenue growth, adjusted EBITDA margin 25.5%-26.5%, adjusted EPS $3.90-$4.35, free cash flow ~$200 million; guidance reaffirmed for revenue and free cash flow, expecting high end of range for adjusted EBITDA margin and EPS.

• Research expected to finish at the top end of the market; learning segment remains challenged.

• Fiscal 2027 expected to see continued research growth, AI revenue acceleration, and further margin expansion.

• Annualized cost savings of ~$125 million expected from restructuring, with $110 million to be realized in FY26.

• Management expects operating cash flow, credit facilities, and available debt to meet liquidity needs for the next 12 months.