John Wiley & Sons, Inc. delivered a subdued QQ1 2026 with revenue of $396.8 million, down 15.3% year over year and 1.93% quarter over quarter. Despite the top-line decline, Wiley posted an operating margin of 8.57% and a net margin of 2.95%, supported by a robust gross margin of 69.14% and an EBITDA margin of 16.4%. However, cash flow remained negative, with operating cash flow of -$85.0 million and free cash flow of -$97.0 million, driven largely by working capital dynamics and a sizable deferral of revenue. Net debt stood at approximately $842 million, yielding a net debt to EBITDA around the high-teens to low-teens multiple range, signaling a meaningful leverage hurdle that will shape capital allocation decisions going forward.
The quarterly results reflect Wiley’s ongoing transition toward higher-margin digital subscriptions, professional learning, and education services, anchored by the Research Publishing Platforms and Literatum ecosystem. The company’s balance sheet remains asset-light on cash generation while carrying substantial goodwill and intangible assets, with deferred revenue of $361.7 million indicating revenue recognition timing that could cushion near-term volatility in reported revenue. Management commentary during the quarter underscored a continued emphasis on monetizing digital platforms and expanding open-access and courseware offerings, balanced against a disciplined approach to cost management and working capital.
Looking ahead, Wiley faces a mixed near-term trajectory: potential stabilization in cash flow and gradual deleveraging would be positive signs if digital platforms scale as intended, while ongoing library-budget pressures and competitive dynamics in academic publishing pose ongoing headwinds. Investors should monitor: (1) progress in monetizing the Literatum platform and related digital services; (2) renewal rates and contribution from Education Services; (3) working-capital evolution and deferred revenue cadence; (4) debt reduction versus deleveraging opportunities; and (5) potential open-access policy impacts and library budget cycles.