Exchange: NYSE | Sector: Communication Services | Industry: Publishing
Q1 2025
Published: Sep 6, 2024
Earnings Highlights
Revenue of $403.81M down 10.5% year-over-year
EPS of $-0.03 increased by 98.4% from previous year
Gross margin of 69.8%
Net income of -1.44M
"Not available in the provided data." - N/A
John Wiley & Sons Inc (WLYB) QQ1 2025 Results – Revenue Decline with Margin Resilience, Near-Term Liquidity Challenges, and Strategic Growth Opportunities in Publishing & Education Services
Executive Summary
Wiley registered a challenging start to QQ1 2025 with revenue of $403.8 million, down 10.5% year over year and 13.8% quarter over quarter, while gross margin remained robust at approximately 69.8%. Despite a modest operating profit of $28.97 million and EBITDA of $75.06 million, Wiley posted a net loss of $1.44 million and negative free cash flow of $105.22 million. The operating margin stood at 7.17%, reflecting disciplined cost structure around a middle-to-upper tier publishing model, but non-operating items (including interest and taxes) drove the bottom line into negative territory. The company also exhibits notable liquidity pressure, with a current ratio of 0.57 and a cash ratio of 0.12, and a total debt load of about $1.03 billion against $0.71 billion in equity, yielding a debt-to-equity ratio of roughly 1.44. Free cash flow remained negative, driven largely by working capital movements (change in working capital of -$138.8 million and other working capital effects totaling -$138.8 million in the quarter), and CFO was negative at -$88.7 million. Wiley ended the quarter with $89.4 million in cash and cash equivalents and about $1.0278 billion of gross debt, implying a meaningful need for liquidity management and potential balance sheet optimization in the near term.
Performance snapshot (Q1 2025 vs. prior-year period, unless noted):
- Revenue: $403.81 million; YoY decline: -10.5%; QoQ decline: -13.8%
- Gross Profit: $281.66 million; Gross margin: 69.75% (0.698)
- Operating Income: $28.97 million; Operating margin: 7.17% (0.0717)
- EBITDA: $75.06 million; EBITDA margin: 18.59% (0.1859)
- Net Income: -$1.44 million; Net margin: -0.36%
- Earnings per Share (basic/diluted): -$0.0264; Weighted shares: 54.377 million
- Operating Cash Flow: -$88.712 million; Capex: -$16.505 million; Free Cash Flow: -$105.217 million
- Cash at end of period: $89.411 million; Cash & equivalents: $82.545 million; Total debt: $1.028 billion; Net debt: $0.945 billion
- Balance sheet snapshot: Total assets $2.652 billion; Total liabilities $1.938 billion; Total stockholders’ equity $0.714 billion; Current liabilities far exceed current assets (WC negative by approximately $296 million)
- Liquidity ratios: Current 0.57, Quick 0.53, Cash ratio 0.12
- Leverage and coverage: Debt/Equity ~1.44; Interest coverage ~2.57x; Net debt to EBITDA not explicitly provided but implied elevated leverage
- Revenue mix and margin profile: Gross margin near 69.8% supports a high-value content model; net income remains negative due to non-operating costs and tax outlays despite positive operating earnings
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
403.81M
-10.47%
-13.80%
Gross Profit
281.66M
-4.17%
-15.12%
Operating Income
28.97M
28.98%
-63.69%
Net Income
-1.44M
98.44%
-105.68%
EPS
-0.03
98.42%
-105.74%
Key Financial Ratios
currentRatio
0.57
grossProfitMargin
69.8%
operatingProfitMargin
8.13%
netProfitMargin
-0.36%
returnOnAssets
-0.05%
returnOnEquity
-0.2%
debtEquityRatio
1.44
operatingCashFlowPerShare
$-1.63
freeCashFlowPerShare
$-1.94
dividendPayoutRatio
-1336%
priceToBookRatio
3.67
priceEarningsRatio
-456.2
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Note: Transcripts or earnings call quotes were not provided in the data set. All synthesis below draws from the disclosed quarterly results and balance sheet items. If a transcript is supplied, a separate update to this section should capture management tone, strategic color, and explicit forward guidance.
Not available in the provided data.
— N/A
Not available in the provided data.
— N/A
Forward Guidance
No formal forward guidance was included in the provided data. Based on the QQ1 2025 results and the balance sheet dynamics, investors should watch for: (1) any management updates on cost discipline and operating leverage to drive Free Cash Flow positive; (2) capital allocation strategy to address the substantial debt load and improve liquidity metrics; (3) any commentary on the pipeline for digital education services, professional learning, and library licensing that could stabilize or grow recurring revenue; (4) potential monetization of digital platforms and open access-adjacent strategies to sustain high gross margins while expanding addressable markets. Achievability hinges on sustained top-line resilience, operating expense control, and a material improvement in working capital efficiency.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
WLYB Focus
69.75%
8.13%
-0.20%
-456.20%
WLY
69.80%
7.17%
-0.20%
-452.04%
PSO
0.00%
0.00%
0.00%
0.00%
SCHL
45.90%
-37.30%
-6.53%
-3.61%
PSORF
0.00%
0.00%
0.00%
0.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Cautiously constructive over the long term, contingent on a path to improved liquidity and sustainable free cash flow. Wiley benefits from a high-margin core publishing platform and a diversified services mix that could unlock recurring revenue and higher-value licensing. Short term, the stock faces headwinds from negative net income, negative FCF, and weak liquidity metrics; investors should require clear evidence of improved working capital efficiency, cost discipline, and debt management. Key catalysts include stabilization or growth in digital education and professional learning revenue, higher-yield licensing agreements, and potential balance-sheet optimization (refinancing, asset-light strategies, or selective divestitures). Given the current multiple framework (P/S ~6.5, P/B ~3.7, negative P/E), relative valuation should hinge on tangible progress toward positive cash flows and debt reduction rather than current earnings multiples.
Key Investment Factors
Growth Potential
Potential growth flags include deeper monetization of Wiley's digital education and professional learning platforms, expansion of the Education Services segment via online program management and talent development offerings, and stronger licensing/host services for research publishing. A continued shift toward high-margin digital content and services (Litera-like platform solutions) could sustain margins and improve cross-sell with existing libraries and institutions. Global expansion into underpenetrated markets and higher-value institution contracts may support revenue resilience even in a tightening library budget environment.
Profitability Risk
Key risks include ongoing liquidity stress (current ratio 0.57; negative free cash flow), elevated leverage with a debt-to-equity around 1.44, and sensitivity to library and educational budgets. Negative net income in QQ1 2025 highlights potential volatility in non-operating items and tax impacts. Open access trends, pricing pressure, and competition from lower-cost digital entrants could compress revenue growth. Macro headwinds, currency fluctuations, and potential impairments related to goodwill/intangible assets pose additional downside scenarios.
Financial Position
Near-term liquidity concerns persist with CFO negative and FCF negative, despite a solid gross margin. The balance sheet shows high intangible/goodwill (~$1.109b goodwill, $609m intangible) and a sizable long-term debt load (~$1.001b), contributing to elevated gearing. Equity stands at ~$714m with negative working capital, signaling potential financing needs or adjustments in working capital management. Coverage metrics (interest coverage ~2.57x) suggest limited cushion if earnings deteriorate; however, EBITDA margin (~18.6%) indicates a defensible operating performance if top-line stabilization occurs. Investors should monitor debt maturity schedules, potential refinancing risk, and any strategic steps to strengthen liquidity and optimize capital structure.
SWOT Analysis
Strengths
Longstanding publisher with diversified revenue streams: Research Publishing, Academic/Professional Learning, and Education Services
Robust gross margin (~69.8%) indicating pricing power and scalable content
Global footprint with recurring revenue through libraries, institutions, and direct-to-consumer channels
Digital platforms and services (Litera-like delivery model) enabling scalable, software-assisted content management