Exchange: NYSE | Sector: Communication Services | Industry: Publishing
Q3 2025
Published: Mar 7, 2025
Earnings Highlights
Revenue of $404.63M down 12.2% year-over-year
EPS of $-0.43 increased by 79.3% from previous year
Gross margin of 74.2%
Net income of -22.95M
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John Wiley & Sons Inc (WLYB) Q3 2025 Results Analysis: Margin Stability Amid Revenue Decline and Balance Sheet Leverage in Publishing
Executive Summary
John Wiley & Sons Inc reported Q3 2025 revenue of USD 404.6 million, a year-over-year decline of 12.2% and a sequential decline of 5.1%. The gross margin remained robust at 74.2%, supported by a favorable product mix and high-margin offerings within the Research Publishing, Academic/Professional Learning, and Education Services segments. Despite solid gross profitability, Wiley posted a headline net loss of USD 22.95 million for the quarter, largely driven by a sizable non-operating expense profile and tax outlay that more than offset operating income of USD 51.83 million and EBITDA of USD 70.37 million.
Net Income: -22.95; Net Margin: -5.67%; YoY: +79.84%; QoQ: -156.74%
Financial Highlights
Financial performance highlights (USD millions, unless noted):
- Revenue: 404.6; YoY: -12.17%; QoQ: -5.15%
- Gross Profit: 300.4; Margin: 74.24%; YoY: -1.03%; QoQ: -6.00%
- Operating Income: 51.83; Margin: 12.81%; YoY: +3.35%; QoQ: -19.18%
- EBITDA: 70.37; EBITDA Margin: 17.39%
- Net Income: -22.95; Net Margin: -5.67%; YoY: +79.84%; QoQ: -156.74%
- EPS: -0.43; YoY: +79.33%; QoQ: -157.33%
- Operating Cash Flow: 146.24; Free Cash Flow: 124.86; Capex: -21.38
- Balance Sheet: Cash & equivalents 104.51; Total Debt 988.78; Net Debt 884.27; Current assets 394.76; Current liabilities 717.26; Equity 685.24; Goodwill 1.079B; Intangibles 572.1m; Current ratio 0.55; Quick ratio 0.515
- Cash Flow / Liquidity: Operating cash flow generation supports FCF; cash at period end 104.56 vs beginning 75.59; Net cash provided by financing activities -89.01; Total cash conversion cycle ~63 days.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
404.63M
-12.17%
-5.15%
Gross Profit
300.41M
-1.03%
-6.00%
Operating Income
51.83M
3.35%
-19.18%
Net Income
-22.95M
79.84%
-156.74%
EPS
-0.43
79.33%
-157.33%
Key Financial Ratios
currentRatio
0.55
grossProfitMargin
74.2%
operatingProfitMargin
12.8%
netProfitMargin
-5.67%
returnOnAssets
-0.88%
returnOnEquity
-3.35%
debtEquityRatio
1.44
operatingCashFlowPerShare
$2.71
freeCashFlowPerShare
$2.31
dividendPayoutRatio
-82.7%
priceToBookRatio
3.27
priceEarningsRatio
-24.4
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings call transcript was provided in the data set. Consequently, management commentary and thematic guidance from the QQ3 2025 call could not be extracted or quoted herein.
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Forward Guidance
No formal forward guidance was issued in Wiley’s QQ3 2025 results release. The absence of numeric targets limits a precise trajectory, but qualitative signals point toward an emphasis on digital monetization, ongoing cost discipline, and balance-sheet optimization. Investors should monitor: (1) trajectory of digital education and research platforms (pricing, renewal rates, and product mix), (2) library budget cycles and institutional credentialing trends, (3) any impairment exposure given elevated goodwill/intangible balances, and (4) leverage trajectory as debt repayments progress and free cash flow remains positive.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
WLYB Focus
74.24%
12.80%
-3.35%
-24.40%
WLY
74.20%
12.80%
-3.35%
-24.05%
PSO
51.00%
17.50%
2.42%
16.12%
SCHL
53.90%
-7.13%
-0.38%
-42.26%
PSORF
51.00%
17.50%
2.42%
15.93%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Base case valuation reflects Wiley’s durable gross margins and positive cash generation, but the near-term profitability remains pressured by non-operating costs and a liquidity-constrained balance sheet. The stock could perform if Wiley accelerates digital monetization, achieves stabilization or growth in subscriptions, and continues deleveraging while maintaining FCF generation. Risks include sustained revenue volatility, potential impairment risk, and library budget cyclical weakness. Given the current mix, a cautious stance with a watchful eye on working capital efficiency, platform monetization progress, and debt trajectory is warranted. Downside risk is mitigated by strong gross margins and cash flow, while upside hinges on successful digital strategy execution and favorable library budget trends.
Key Investment Factors
Growth Potential
Digital and subscription-based monetization across Wiley’s Research Publishing and Education Services segments, plus platform-enabled services (Literateam/other publishing software) could yield higher recurring revenue and improved visibility if library budgets stabilize and adoption of digital education services accelerates.
Profitability Risk
Revenue declines in the current quarter, ongoing reliance on institutional library spend, net losses driven by non-operating costs and tax, liquidity pressure suggested by a current ratio below 1.0, and a notable debt load with interest coverage around 3.7x. Macro headwinds (budget cuts, slower open-access transitions) and potential goodwill impairment risk are notable considerations.
Financial Position
Positive free cash flow generation (FCF USD 124.9m) and solid EBITDA support ongoing deleveraging, yet the balance sheet shows substantial goodwill/intangible assets and a liquidity gap (current ratio 0.55). Net debt stands at USD 884.3m with a total debt load of USD 988.8m; interest coverage at 3.70x provides some cushion but constraints remain in a high-rate environment.
SWOT Analysis
Strengths
High gross margin profile (74.2%), indicating strong pricing power and a favorable mix in core publishing assets.
Diversified business model across Research Publishing, Academic/Professional Learning, and Education Services, providing revenue stream balance.
Positive operating cash flow generation and meaningful free cash flow despite a net loss in the period.
Weaknesses
Net loss for the quarter and negative net income margin (-5.67%), driven by non-operating costs and tax outlay.
Liquidity constraints evidenced by a current ratio of 0.55 and a relatively tight balance sheet liquidity position.
Large goodwill and intangible asset base heightens impairment risk and monitoring sensitivity.
Opportunities
Accelerating digital transition and platform monetization could unlock higher recurring revenue and improve quality of earnings.
Growth in online education, courseware, and talent development services offers upside from corporate and academic customers.
Potential efficiency gains from cost discipline and selective portfolio optimization.
Threats
Budget pressure in academic and research libraries, potential shift away from print toward open access, and macroeconomic uncertainties.
Competitive dynamics in a crowded publishing landscape, including prominent peers and open-access entrants.
Regulatory changes affecting open access, licensing, and digital distribution that could impact margins.