Why Wiley Shares Are Falling Today

John Wiley & Sons Inc WLY reported a Q4 FY23 revenue decline of 4% Y/Y to $526.1 million, beating the consensus of $521.2 million. 

Revenue from Research fell 6% Y/Y and Academic declined 3% Y/Y, while Talent was up 8%.

Operating income increased 41% Y/Y to $82 million, and adjusted EBITDA increased 23% Y/Y to $137 million.

The adjusted EPS of $1.45 (+32% Y/Y) surpassed the Street estimate of $0.99.

Operating cash flow stood at $277 million in the year vs. $339 million a year ago. 

In FY23, Wiley paid dividends worth $77 million and bought back shares worth $35 million. 

Strategic Actions: The company plans to focus on its profitable businesses and explore market opportunities in Research and Learning businesses.

Wiley aims to divest non-core education businesses, including University Services (known as online program management), Wiley Edge (formerly Talent Development), and CrossKnowledge, which will be reported as "businesses held for sale" starting Q1 2024. 

In Q4 2023, Wiley sold its test prep and Advancement Courses lines in Academic segment.

The company also plans to streamline the organization and cost structure to support the above actions and expects to benefit from the same in FY25 and FY26.

FY24 Outlook (ex-divestitures): Wiley expects adjusted revenue of $1.580 billion to $1.630 billion (vs. consensus $2.11 billion), adjusted EBITDA of $305 million to $330 million, and adjusted EPS of $2.05 to $2.40 (consensus: $3.50). 

Wiley expects FY24 adjusted EPS to be further impacted by a higher tax rate ($0.21/share), pension expense ($0.11/share), and interest expense ($0.10/share).  

"The actions that we are now taking will allow us to materially improve our performance and margins in Fiscal 2025 and 2026 and position us for sustained, profitable growth in the years ahead. We look forward to discussing this at our investor day later this year," said Brian Napack, President and CEO.

Price Action: WLY shares are trading lower by 13.24% at $31.77 on the last check Thursday.