Executive Summary
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.
Key Performance Indicators
QoQ: -1.93% | YoY:-15.30%
QoQ: -8.68% | YoY:-17.33%
QoQ: -34.40% | YoY:-57.39%
QoQ: 150.97% | YoY:-53.69%
QoQ: 151.16% | YoY:-52.17%
Key Insights
Revenue: $396.8M, YoY -15.3%, QoQ -1.93%. Gross Profit: $274.331M, YoY -17.33%, QoQ -8.68%. Gross Margin: 69.14%. Operating Income: $34.001M, YoY -57.39%, QoQ -34.40%. EBITDA: $65.195M, Margin 16.43%. Net Income: $11.70M, Margin 2.95%, YoY -53.69%, QoQ +150.97%. EPS: $0.22, YoY -52.17%, QoQ +151.16%. EBITDA Margin (operating) 16.4%, Operating Margin 8.56%, Net Margin 2.95%. Depreciation & Amortization: $36.446M. Interest Expense: $11.042M. Income Tax: $6.007M. Weighted-average shares (basic/...
Financial Highlights
Revenue: $396.8M, YoY -15.3%, QoQ -1.93%. Gross Profit: $274.331M, YoY -17.33%, QoQ -8.68%. Gross Margin: 69.14%. Operating Income: $34.001M, YoY -57.39%, QoQ -34.40%. EBITDA: $65.195M, Margin 16.43%. Net Income: $11.70M, Margin 2.95%, YoY -53.69%, QoQ +150.97%. EPS: $0.22, YoY -52.17%, QoQ +151.16%. EBITDA Margin (operating) 16.4%, Operating Margin 8.56%, Net Margin 2.95%. Depreciation & Amortization: $36.446M. Interest Expense: $11.042M. Income Tax: $6.007M. Weighted-average shares (basic/diluted): 53.377M / 53.966M. Cash Flow: Net cash from operating activities -$85.005M; CapEx $12.005M; Free Cash Flow -$97.010M. Balance Sheet: Total assets $2.524B; Total liabilities $1.791B; Total stockholders’ equity $733.059M. Cash and equivalents: $81.85M. Debt: Total debt $923.984M; Net debt $842.134M. Deferred Revenue (current): $361.677M. Goodwill: $1.118B; Intangibles: $580.332M. Equity draw: leverage remains elevated with a net debt to EBITDA multiple approaching 13x. Current ratio (approx.) around 0.65x, signaling tight near-term liquidity against current liabilities.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
396.80M |
-15.30% |
-1.93% |
| Gross Profit |
274.33M |
-17.33% |
-8.68% |
| Operating Income |
34.00M |
-57.39% |
-34.40% |
| Net Income |
11.70M |
-53.69% |
150.97% |
| EPS |
0.22 |
-52.17% |
151.16% |
Management Commentary
The QQ1 2026 earnings call theme centers on Wiley’s strategic pivot toward higher-margin digital platforms and education services amid a challenging macro environment for traditional publishing. Management emphasized ongoing investments in the Literatum publishing platform and in digital courseware as catalysts for long-term growth, while reiterating a disciplined approach to cost structure and working capital management. Key operational themes included: (1) revenue mix optimization toward digital and subscription-based offerings; (2) continued focus on Open Access-oriented opportunities and professional learning products; (3) progress on monetization of education services and higher-margin platforms; (4) emphasis on cash flow discipline and deleveraging over the medium term. Market conditions cited include library budget pressures and competitive dynamics within the scholarly publishing ecosystem, which influence renewal rates and pricing strategies. The company reaffirmed its commitment to maintaining a strong balance sheet while funding platform investments that are expected to yield longer-term margin and growth advantages.
Forward Guidance
No explicit full-year numeric guidance was provided for 2026 in the QQ1 release. The forward-looking assessment centers on Wiley’s continued push to monetize the Literatum platform and to expand Education Services and professional learning offerings. Our view is that potential upside hinges on: (a) stronger renewal rates and higher adoption of digital subscriptions; (b) improving operating cash flow through working-capital optimization and continued SG&A discipline; (c) successful monetization of digital platforms that can lift margins over time. Key factors for investors to monitor include: progression of deferred revenue recognition, platform-related revenue growth, debt reduction and liquidity improvements, and any shifts in academic library budgets or open-access policies that could materially impact recurring revenue streams.