JOHN WILEY SONS INC
For the period ended Jul 31, 2024. Filed Sep 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 31, 2024 · Filed Sep 6, 2024
WLY$50.23-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-01-31; filed 2024-03-08.
0000107140-24-000029
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-31; filed 2024-09-06.
0000107140-24-000189
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsNot meaningfulNot meaningfulThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 198 previous paragraphs and 122 current paragraphs.
51 unchanged; 50 reworded; 21 added; 79 removed; 18 previous and 0 current paragraphs rearranged.
Tables are not compared: 36 previous and 21 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
We report financial information for the following segments, as well as a Corporate category, which includes certain costs that are not allocated to the reportable segments:
Current report
FIRST QUARTER SUMMARY
Current report
Revenue for the three months ended July 31, 2024, decreased $47.2 million, or 10%, as compared with the prior year. On a constant currency basis, revenue decreased 10% as compared with the prior year.
Current report
We executed a $21 million content rights project for training GenAI large language models of which $17 million was recognized in the three months ended July 31, 2024 primarily all in the Learning segment. On a constant currency basis excluding the GenAI project, Adjusted Revenue increased 2% as compared with the prior year.
Current report
Operating and administrative expenses for the three months ended July 31, 2024 of $248.8 million decreased $7.0 million, or 3% as compared with the prior year. On a constant currency basis, operating and administrative expenses decreased 3% as compared with the prior year primarily reflecting lower employee related costs.
Current report
Excluding operating and administrative expenses from the Held for Sale or Sold segment, operating and administrative expenses increased 3% on a constant currency basis as compared with the prior year primarily due to higher technology related costs, bad debt expense, advertising and marketing costs and, to a lesser extent, higher travel and entertainment costs.
Current report
Global Restructuring Program
Current report
For the three months ended July 31, 2024 and 2023, we recorded pretax restructuring charges of $7.5 million and $11.8 million, respectively, related to this program.
Current report
Business Optimization Program
Current report
For the three months ended July 31, 2024 and 2023, we recorded pretax restructuring net credits of $(3.6) million and charges of $0.3 million, respectively, related to this program.
Current report
Foreign Exchange Transaction Gains (Losses):
Current report
For the three months ended July 31, 2024 and 2023, we recorded pretax gains (losses) on sale of businesses and impairment charges related to assets held-for-sale as follows:
Current report
These charges are reflected in Gains (losses) on sale of businesses and impairment charges related to assets held-for-sale on our Unaudited Condensed Consolidated Statements of Net Loss.
Current report
On May 31, 2024, we completed the sale of Wiley Edge which was included in our Held for Sale or Sold segment, with the exception of its India operations. The pretax loss on sale was $19.6 million. In connection with the held-for-sale classification, we recognized cumulative impairment charges of $19.4 million in the year ended April 30, 2024. Upon the completion of the sale, we recognized an additional loss of $0.2 million in the three months ended July 31, 2024 due to subsequent changes in the fair value less costs to sell, as well as changes in the carrying amount of the disposal group.
Current report
On January 1, 2024 we completed the sale of University Services, which was included in our Held for Sale or Sold segment. The pretax loss on sale was $105.6 million which was reduced during the three months ended July 31, 2024 due to third-party customer consents and working capital adjustments of $1.5 million that occurred in the first quarter of fiscal year 2025. In the three months ended July 31, 2024, there was a reduction in the pretax loss on the sale of our Tuition Manager business previously in our Held for Sale or Sold segment due to a selling price adjustment for cash received after the closing.
Current report
In the three months ended July 31, 2023, we recorded a held-for-sale pretax impairment of $73.9 million which includes $40.6 million for University Services and $33.3 million for CrossKnowledge.
Current report
The US GAAP effective tax rate for the three months ended July 31, 2024, was 106.2% compared to 13.5% for the three months ended July 31, 2023. The US GAAP effective tax rate for the three months ended July 31, 2024 was greater than the US GAAP effective tax rate for the three months ended July 31, 2023 primarily driven by US ordinary losses for which no tax benefit can be recognized as a result of the valuation allowance recorded against the net deferred tax assets.
Current report
On a constant currency basis, Adjusted EBITDA increased 1% as compared with the prior year. This increase was primarily due to higher revenue, partially offset by the timing of employee benefit costs related to higher incentive compensation and, to a lesser extent, higher technology and royalty costs.
Current report
Learning revenue increased $15.0 million, or 14%, as compared with the prior year on a reported basis. On a constant currency basis, revenue increased 14% as compared with the prior year. This increase was primarily due to approximately $16 million related to an executed $21 million content rights project for training GenAI large language models in both Academic and Professional and, to a lesser extent, continued growth in Academic courseware, partially offset by a decrease in print book sales. On a constant currency basis excluding the GenAI project, Learning revenue decreased 1% as compared with the prior year.
Current report
On a constant currency basis, Adjusted EBITDA decreased $9.0 million as compared with the prior year. This decrease was primarily due to lower revenue, partially offset by lower employment and marketing costs due to the sale of the University Services and Wiley Edge businesses.
Removed paragraphs (79)
Previous report
On January 1, 2024, we completed the sale of University Services pursuant to a Membership Interest and Asset Purchase Agreement with Academic Partnerships LLC, a Delaware limited liability company (Academic Partnerships), and Education Services Upper Holdings Corp., a Delaware corporation. The selling price for University Services at the date of sale had a fair value of $122.6 million, paid in the form of (i) an unsecured promissory note with an initial aggregate principal amount of $92.9 million (Seller Note), subject to customary working capital adjustments; (ii) $17.8 million of additional contingent consideration in the form of an earnout recorded at fair value based on revenue targets during each of the two fiscal years in the period from May 1, 2024 through April 30, 2026 (Earnout); and (iii) a number of common units of TVG-Academic Partnerships Holdings, LLC, the ultimate parent company of Academic Partnerships equal to 10% of the total common units outstanding at the date of sale valued at $11.9 million (TVG Investment). We have also entered into a transition services agreement to facilitate the transition of the divested business.
Previous report
On January 8, 2024, we entered into a stock and asset purchase agreement (Purchase Agreement) with Inspirit Vulcan Bidco Limited, a private limited company incorporated in England & Wales (Inspirit), pursuant to which we agreed to sell our emerging talent and reskill training business, Wiley Edge (the Business), to Inspirit (the Transaction). We expect the Transaction to close in the first quarter of fiscal year 2025. The selling price for the Business includes total consideration of up to $62.2 million and will consist of: (i) $10 million in cash, (ii) $18.3 million in the form of a loan note to be issued by Inspirit, subject to a customary purchase price adjustment, including for working capital, and (iii) up to $33.9 million in the form of an earnout based on the gross profit generated by the Business relative to mutually agreed profit targets during each of the three fiscal years in the period beginning May 1, 2024 and ending April 30, 2027. The results of Wiley Edge will continue to be reported in our operating results in the Held for Sale or Sold segment until the sale is finalized. We will enter into a transition services agreement to facilitate the transition of the divested business.
Previous report
THIRD QUARTER SUMMARY
Previous report
•US GAAP Results: Consolidated Revenue of $460.7 million (-6%, compared with the prior year), Operating Loss of $46.4 million (+$20.6 million, compared with the prior year operating loss), and Diluted Loss per Share of $(2.08) (-$0.79, compared with the prior year diluted loss per share). US GAAP revenue decrease due to completed divestiture and declines in other held for sale businesses. US GAAP results impacted by goodwill impairment of $81.7 million, losses on sale of businesses and impairment charges related to assets held-for-sale of $52.4 million, and restructuring charges of $14.8 million.
Previous report
Operating and administrative expenses for the three months ended January 31, 2024, decreased $2.4 million, or 1% as compared with the prior year. On a constant currency basis, operating and administrative expenses decreased 2% as compared with the prior year primarily reflecting lower employment costs, a $3.7 million charge related to the settlement of a litigation mater related to consideration for a previous acquisition in the three months ended January 31, 2023, and professional fees, partially offset by higher depreciation due to the decision in the three months ended January 31, 2024 to discontinue the use of certain capitalized software resulting in an impairment of $6.4 million and, to a lesser extent, higher technology related costs. Excluding operating and administrative expenses from the Held for Sale or Sold segment, expenses increased 3% on a constant currency basis.
Previous report
Fiscal Year 2024
Previous report
As a result of signing the Purchase Agreement with Inspirit and the decrease in the fair value of the business, we tested the goodwill of the Wiley Edge reporting unit within the Held for Sale or Sold segment for impairment. We estimated the fair value of the reporting unit based on the terms and conditions in the Purchase Agreement which included a selling price that included $10 million in cash, $18.3 million in the form of a loan, a fair value estimate for the earnout, and an estimate for a working capital adjustment. We concluded that the fair value of the Wiley Edge reporting unit was below its carrying value, which resulted in a pretax noncash goodwill impairment of $81.7 million in the three months ended January 31, 2024. This charge is reflected in the Impairment of goodwill in the Unaudited Condensed Consolidated Statements of Net Loss.
Previous report
Fiscal Year 2023
Previous report
Due to the segment realignment in the third quarter of fiscal year 2023, we were required to test goodwill for impairment immediately before and after our segment realignment in accordance with applicable accounting standards. Prior to the realignment, we concluded that the fair value of the Education Services reporting unit was below its carrying value, which resulted in a pretax noncash goodwill impairment of $31.0 million in the three months ended January 31, 2023. Education Services was adversely impacted by market conditions and headwinds for online degree programs. This has led to a decline in projected student enrollments from existing partners, pricing pressures and revenue share concessions, and a decline in new partner additions over both the short-term and long-term, which adversely impacted forecasted revenue growth and operating cash flows. This was partially offset by projected growth in talent placements, partially due to expansion into new regions and the addition of new corporate clients, which are forecasted to have a positive impact on revenue growth and operating cash flows.
Previous report
After the realignment, we concluded that the fair value of the University Services reporting unit within the Academic segment was below its carrying value, which resulted in an additional pretax noncash goodwill impairment of $68.8 million. University Services was adversely impacted by market conditions and headwinds for online degree programs, which lead to a decline in projected enrollments from existing partners, pricing pressures and revenue share concessions, and a decline in new partner additions over both the short-term and long-term which adversely impacted forecasted revenue growth and operating cash flows.
Previous report
In May 2022, the Company initiated a global program (Global Restructuring Program) to restructure and align our cost base with current and anticipated future market conditions, which was previously referred to as the Fiscal Year 2023 Restructuring Program. This program included severance related charges for the elimination of certain positions, the exit of certain leased office space, and the reduction of our occupancy at other facilities. Under this program, we reducedour real estate square footage occupancy by approximately 22%.
Previous report
For the three months ended January 31, 2024 and 2023, we recorded pretax restructuring charges of $14.4 million and $8.9 million, respectively, related to this program.
Previous report
For the three months ended January 31, 2024 and 2023, we recorded pretax restructuring charges of $0.4 million and credits of $(0.1) million, respectively, related to this program.
Previous report
Foreign Exchange Transaction Gains:
Previous report
For the three months ended January 31, 2024, we recorded pretax losses on sale of businesses and impairment charges related to assets held-for-sale of $52.4 million.
Previous report
As part of our ongoing initiatives to simplify our portfolio and focus our attention on core growth areas, we previously announced that we are divesting non-core businesses including University Services, Wiley Edge, and CrossKnowledge. These three businesses met the held-for-sale criteria in the first quarter of fiscal year 2024. We measured each disposal group at the lower of carrying value or fair value less cost to sell prior to its disposition.
Previous report
On January 1, 2024 we completed the sale of University Services, and on January 8, 2024 we signed an agreement to sell Wiley Edge. We expect to complete the sale of Wiley Edge and CrossKnowledge by the first quarter of fiscal year 2025.
Previous report
The pretax loss on the sale of University Services was $101.4 million after accounting for the assets sold, liabilities transferred upon sale, and transaction costs. Prior to the disposition, we had recorded a held-for-sale impairment of $75.4 million for University Services. This resulted in an additional loss of$26.0 million in the three months ended January 31, 2024. This additional pretax loss is included in Losses on sale of businesses and impairment charges related to assets held-for-sale in our Unaudited Condensed Consolidated Statements of Net Loss for the three months ended January 31, 2024.
Previous report
See Note 3, “Acquisitions and Divestitures” for more details on the divestiture and the held-for-sale businesses.
Previous report
Our effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. The US GAAP effective tax rate for the three months ended January 31, 2024, was (1.4)% compared to 7.7% for the three months ended January 31, 2023. The US GAAP effective tax rate for the three months ended January 31, 2024, was less than the US GAAP effective tax rate for the three months ended January 31, 2023 primarily due to losses on sale of businesses and impairment charges related to assets held-for-sale described in Note 3, "Acquisitions and Divestitures" which resulted in a deferred tax benefit, the impact of US tax incentives, and other discrete items offset by the mix of non-US income.
Previous report
Research revenue for the three months ended January 31, 2024 increased $2.6 million, or 1%, as compared with the prior year on a reported basis. On a constant currency basis, revenue was consistent as compared with the prior year. Research Publishing revenue was consistent on a constant currency basis as compared with the prior year primarily due to continued growth in our core open access publishing program and institutional models which includes both read-only subscriptions and read-and-publish transformational agreements, offset by the carryover of the Hindawi publishing disruption experienced in fiscal year 2023. Hindawi’s special issues program was suspended in the third quarter of fiscal year 2023 due to the presence in certain special issues of compromised articles. On a constant currency basis excluding Hindawi, Research Publishing revenue increased 2% as compared with the prior year. Research Solutions decreased 1% as compared with the prior year on a constant currency basis primarily due to continued market softness in our corporate offerings. On a constant currency basis excluding Hindawi, Research revenue increased 1% as compared with the prior year.
Previous report
On a constant currency basis, Adjusted EBITDA decreased 2% as compared with the prior year. This decrease was primarily due to higher editorial and marketing costs, partially offset by lower costs of sales due to revenue performance. Excluding Hindawi, Adjusted EBITDA decreased 1%.
Previous report
Learning revenue increased $3.1 million, or 2%, as compared with the prior year on a reported basis. On a constant currency basis, revenue increased 2% as compared with the prior year. This was primarily due to an increase in Academic from continued growth in digital courseware, digital content, and licensing, partially offset by a decrease in print book sales due to lower demand. Professional decreased due to lower print sales due to softness in business and technology publishing categories, partially offset by higher licensing revenue.
Previous report
On a constant currency basis, Adjusted EBITDA increased 15% as compared with the prior year. This increase was primarily due to revenue performance and product mix, and a decrease in operating expenses due to restructuring savings.
Previous report
On a constant currency basis, Adjusted EBITDA decreased 45% as compared with the prior year. This decrease was primarily due to lower revenue, partially offset by placement savings, and lower marketing and employment costs in University Services due to restructuring actions and, to a lesser extent, the impact of the disposition of certain businesses in the fourth quarter of fiscal year 2023 and in fiscal year 2024.
Previous report
RESULTS OF OPERATIONS – NINE MONTHS ENDED JANUARY 31, 2024
Previous report
NINE MONTHS SUMMARY
Previous report
CONSOLIDATED RESULTS OF OPERATIONS
Previous report
Revenue for the nine months ended January 31, 2024, decreased $89.2 million, or 6%, as compared with the prior year. On a constant currency basis, revenue decreased 7% as compared with the prior year. Excluding the revenues from the Held for Sale or Sold segment, Adjusted Revenue decreased 3% on a constant currency basis.
Previous report
Adjusted Revenue
Previous report
Cost of Sales:
Previous report
Cost of sales for the nine months ended January 31, 2024, decreased $62.0 million, or 12%, as compared with the prior year. On a constant currency basis, cost of sales decreased 13% as compared with the prior year. This was primarily due to lower employee costs related to the Wiley Edge business, and to a lesser extent, lower marketing and employee costs for the University Services business. In addition, lower amortization primarily due to the cessation of amortization for held-for-sale assets. Excluding the cost of sales from the Held for Sale or Sold segment, cost of sales decreased 3% on a constant currency basis, primarily due to a decrease in revenue.
Previous report
Operating and Administrative Expenses:
Previous report
Operating and administrative expenses for the nine months ended January 31, 2024, decreased $30.1 million, or 4%, as compared with the prior year. On a constant currency basis, operating and administrative expenses decreased 5% as compared with the prior year primarily reflecting lower employee costs associated with recent restructuring actions and, to a lesser extent, lower professional fees, travel and entertainment costs, and a $3.7 million charge related to the settlement of a litigation mater related to consideration for a previous acquisition in the three months ended January 31, 2023. These were partially offset by higher depreciation due to the decision in the three months ended January 31, 2024 to discontinue the use of certain capitalized software resulting in an impairment of $6.4 million, and higher technology related costs. Excluding operating and administrative expenses from the Held for Sale or Sold segment, operating and administrative expenses decreased 1% on a constant currency basis.
Previous report
Impairment of Goodwill:
Previous report
We recorded an impairment of goodwill in the nine months ended January 31, 2024 and 2023 of $108.4 million and $99.8 million, respectively. These charges are reflected in the Impairment of goodwill in the Unaudited Condensed Consolidated Statements of Net Loss.
Previous report
Fiscal Year 2024
Previous report
As a result of signing the Purchase Agreement with Inspirit and the decrease in the fair value of the business, we tested the goodwill of the Wiley Edge reporting unit within the Held for Sale or Sold segment for impairment. We concluded that the fair value of the Wiley Edge reporting unit was below its carrying value, which resulted in a pretax noncash goodwill impairment of $81.7 million in the nine months ended January 31, 2024. See above for more details on these charges.
Previous report
Fiscal year 2023
Previous report
Restructuring and Related Charges:
Showing the first 40 of 79 passages. Open the source sections for the rest.
Reworded paragraphs (50)
Previous wording
Wiley is a knowledge company and a global leader in research, publishing, and knowledge solutions. Dedicated to the creation and application of knowledge, Wiley serves the world’s researchers, learners, innovators, and leaders, helping them achieve their goals and solve the world's most important challenges. For more than two centuries, Wiley has been delivering on its timeless mission to unlock human potential. Wiley is a predominantly digital company with over 80% of Wiley's revenue for fiscal year 2023 generated by digital products excluding the Held for Sale or Sold segment revenue. For fiscal year 2023, 50% of revenue excluding the Held for Sale or Sold segment revenue is recurring which includes revenue that is contractually obligated or set to recur with a high degree of certainty.
Current wording
Wiley is one of the world’s largest publishers and a global leader in research and learning. The Company’s content, services, platforms, and knowledge networks are tailored to meet the evolving needs of its customers and partners, including researchers, students, instructors, professionals, institutions, and corporations. Wiley empowers knowledge seekers to transform today’s biggest obstacles into tomorrow’s brightest opportunities. For more than two centuries, the Company has been delivering on its timeless mission to unlock human potential. Wiley is a predominantly digital company with over 83% of its revenue for the year ended April 30, 2024 generated by digital products and services excluding the Held for Sale or Sold segment revenue. For the year ended April 30, 2024, 48% of revenue excluding the Held for Sale or Sold segment revenue is recurring which includes revenue that is contractually obligated or set to recur with a high degree of certainty.
Previous wording
On June 1, 2023, Wiley’s Board of Directors approved a plan to divest certain businesses that we determined are non-core businesses. Those businesses are University Services, Wiley Edge, and CrossKnowledge. On January 1, 2024 we completed the sale of University Services, and on January 8, 2024 we signed an agreement to sell Wiley Edge. We expect to complete the sale of Wiley Edge and CrossKnowledge by the first quarter of fiscal year 2025. As a result of these planned divestitures, in the three months ended July 31, 2023 we reorganized our segments and our new structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). The operations of University Services, Wiley Edge, and CrossKnowledge are reported in the Held for Sale or Sold segment until sold. Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results.
Current wording
On June 1, 2023, Wiley’s Board of Directors approved a plan to divest certain businesses that we determined are non-core businesses. Those businesses are University Services, Wiley Edge, and CrossKnowledge. On January 1, 2024 we completed the sale of University Services, and on May 31, 2024 we completed the sale of Wiley Edge with the exception of its India operations. The sale of Wiley Edge’s India operations closed on August 31, 2024. On August 2, 2024 we entered into an agreement to sell our CrossKnowledge business, which closed on August 31, 2024.
Previous wording
•Research is unchanged and includes the reporting lines of Research Publishing and Research Solutions;
Current wording
•Research includes the reporting lines of Research Publishing and Research Solutions;
Previous wording
•Held for Sale or Sold includes businesses held-for-sale including Wiley Edge, and CrossKnowledge, as well as those sold in fiscal year 2024 which includes University Services, and Tuition Manager, and in fiscal year 2023 Test Prep and Advancement Courses.
Current wording
•Held for Sale or Sold includes businesses held-for-sale including CrossKnowledge, as well as those sold in fiscal year 2025 which includes Wiley Edge, and in fiscal year 2024 University Services and Tuition Manager.
Previous wording
Wiley’s business strategies are tightly aligned with solid growth trends, including ever-increasing global R&D spend leading to consistent growth in scientific research output, the transition to open research, and the increasing application of new knowledge into solutions to solve real world problems. These strategies include driving publishing output to meet the global demand for peer-reviewed research and expanding platform and service offerings for corporations and societies. Learning strategies include scaling high-value digital content, courseware, and assessments.
Current wording
Wiley’s business strategies are tightly aligned with healthy solid growth trends, including ever-increasing global research and development (R&D) spend leading to consistent growth in scientific research output, the transition to open research, and the increasing application of new knowledge into solutions to solve real world problems. These strategies include driving publishing output to meet the global demand for peer-reviewed research and expanding platform and service offerings for corporations and societies. Learning strategies include selectively scaling high-value digital content, courseware, and assessments where the Company sees opportunity. We continue to implement strategies to efficiently and effectively manage print revenue declines while driving growth in our digital lines of business.
Previous wording
•US GAAP Results: Consolidated Revenue of $1,404.5 million (-6%, compared with the prior year), Operating Loss of $16.5 million (+$10.1 million, compared with the prior year operating loss), and Diluted Loss per Share of $(4.10) ($-3.18, compared with the prior year diluted loss per share). US GAAP results impacted by goodwill impairment of $108.4 million, losses on sale of businesses and impairment charges related to assets held-for-sale of $179.7 million, and restructuring charges of $52.0 million.
Current wording
•US GAAP Results: Consolidated Revenue of $403.8 million (-10%, compared with the prior year), Operating Income of $29.0 million (+$45.3 million, compared with the prior year operating loss), and Diluted Loss per Share of $(0.03) (+$1.64 per share, compared with the prior year diluted loss per share).
Previous wording
•Adjusted Results at Constant Currency(excluding Held for Sale or Sold segment results): Adjusted Revenue of $402.5 million (+1%, compared with the prior year), Adjusted EBITDA of $91.5 million (+1%, compared with the prior year), and Adjusted EPS of $0.59 (-27%, compared with the prior year).
Current wording
•Adjusted Results at Constant Currency(excluding Held for Sale or Sold segment results): Adjusted Revenue of $389.6 million (+6%, compared with the prior year), Adjusted EBITDA of $72.6 million (+22%, compared with the prior year), and Adjusted EPS of $0.47 (+74%, compared with the prior year).
Previous wording
Revenue for the three months ended January 31, 2024, decreased $30.7 million, or 6%, as compared with the prior year. On a constant currency basis, revenue decreased 7% as compared with the prior year. Excluding the revenues from the Held for Sale or Sold segment, Adjusted Revenue increased 1% on a constant currency basis.
Current wording
Excluding the revenues from the Held for Sale or Sold segment, Adjusted Revenue increased 6% on a constant currency basis.
Previous wording
Cost of sales for the three months ended January 31, 2024, decreased $30.4 million, or 17%, as compared with the prior year. On a constant currency basis, cost of sales decreased 18% as compared with the prior year. This was primarily due to lower employee costs related to the Wiley Edge business and, to a lesser extent, lower marketing and employee costs for the University Services business. Excluding the cost of sales from the Held for Sale or Sold segment, cost of sales decreased 3% as compared with the prior year on a constant currency basis primarily due to lower print product costs, lower costs driven by the revenue decline in Research, partially offset by higher royalty costs in the Learning segment.
Current wording
Cost of sales for the three months ended July 31, 2024 of $109.2 million decreased $47.9 million, or 30%, as compared with the prior year. On a constant currency basis, cost of sales decreased 30% as compared with the prior year. This was primarily due to the prior year including employee and marketing costs related to the University Services business which was sold on January 1, 2024 and, to a lesser extent, lower employee costs related to the Wiley Edge business which was sold on May 31, 2024. Excluding the cost of sales from the Held for Sale or Sold segment, cost of sales increased 1% as compared with the prior year on a constant currency basis primarily due to higher royalty costs in both Research and Learning, partially offset by lower inventory and related costs.
Previous wording
We recorded an impairment of goodwill for the nine months ended January 31, 2023 of $99.8 million. This charge is reflected in the Impairment of goodwill in the Unaudited Condensed Consolidated Statements of Net Loss. See above for more details on these charges.
Current wording
We recorded an impairment of goodwill for the three months ended July 31, 2023 of $26.7 million. This charge is reflected in the Impairment of goodwill in the Unaudited Condensed Consolidated Statements of Net Loss.
Previous wording
Due to the segment realignment in the first quarter of fiscal year 2024, we were required to test goodwill for impairment immediately before and after our segment realignment in accordance with applicable accounting standards. Prior to the realignment, we concluded that the fair value of the University Services reporting unit within the former Academic segment was below its carrying value, which resulted in a pretax noncash goodwill impairment of $11.4 million in the nine months ended January 31, 2024. University Services was adversely impacted by market conditions and headwinds for online degree programs, which lead to a decline in projected enrollments from existing partners, pricing pressures and revenue share concessions, and a decline in new partner additions over both the short-term and long-term which adversely impacted forecasted revenue growth and operating cash flows.
Current wording
In accordance with applicable accounting standards, we were required to test goodwill for impairment immediately before and after our segment realignment in the three months ended July 31, 2023. Prior to the realignment, we concluded that the fair value of the University Services reporting unit within the former Academic segment was below its carrying value, which resulted in a pretax noncash goodwill impairment of $11.4 million.
Previous wording
After the realignment, we concluded that the fair value of the CrossKnowledge reporting unit within the Held for Sale or Sold segment was below its carrying value, which resulted in a pretax noncash goodwill impairment of $15.3 million in the nine months ended January 31, 2024. CrossKnowledge was adversely impacted by a decline in the demand for its offerings, which have resulted in lower sales and a decline in average contract value, that adversely impacted forecasted revenue growth and operating cash flows.
Current wording
After the realignment, we concluded that the fair value of the CrossKnowledge reporting unit within the Held for Sale or Sold segment was below its carrying value, which resulted in a pretax noncash goodwill impairment of $15.3 million.
Previous wording
We recorded an impairment of goodwill for the three months ended January 31, 2024 and 2023 of $81.7 million and $99.8 million, respectively. These charges are reflected in the Impairment of goodwill in the Unaudited Condensed Consolidated Statements of Net Loss.
Current wording
We recorded restructuring and related charges in the three months ended July 31, 2024 and 2023 of$3.9 million and$12.1 million, respectively. These charges are reflected in Restructuring and related charges on our Unaudited Condensed Consolidated Statements of Net Loss.
Previous wording
In the three months ended July 31, 2023, we expanded the scope of the program to include those actions that will focus Wiley on its leading global position in the development and application of new knowledge and drive greater profitability, growth, and cash flow. We will focus on our strongest and most profitable businesses and large market opportunities in Research and Learning, as well as streamline our organization and rightsize our cost structure to reflect these portfolio actions. As part of the Global Restructuring Program, we are further reducingour real estate square footage occupancy by approximately 13%.
Current wording
Beginning in fiscal year 2023, the Company initiated a global program (Global Restructuring Program) which was expanded in fiscal year 2024 to include those actions that will focus Wiley on its leading global position in the development and application of new knowledge and drive greater profitability, growth, and cash flow. We will focus on our strongest and most profitable businesses and large market opportunities in Research and Learning, as well as streamline our organization and rightsize our cost structure to reflect these portfolio actions. Under this program, we reducedour real estate square footage occupancy by approximately 35%.
Previous wording
Excluding actions related to the Held for Sale or Sold segment, we anticipate to yield annualized cost savings ofapproximately $65 million, with approximately $35 million of that to be realized this fiscal year from actions taken starting in fiscal year 2024.
Current wording
Excluding actions related to the Held for Sale or Sold segment, we anticipate to yield annualized cost savings of approximately $75 million, with approximately $70 million of that to be realized this fiscal year from actions taken starting in fiscal year 2024.
Previous wording
See Note 9, “Restructuring and Related Charges” for more details on the Global Restructuring Program charges.
Current wording
See Note 9, “Restructuring and Related Charges” for more details on the Business Optimization Program net credits and charges.
Previous wording
Amortization of intangible assets was $13.5 million for the three months ended January 31, 2024, a decrease of $6.5 million, or 32%, as compared with the prior year. On a constant currency basis, amortization of intangible assets decreased 33% as compared with the prior year primarily due to the cessation of amortization for held-for-sale assets. See Note 3, “Acquisitions and Divestitures” for more details on these held-for-sale assets.
Current wording
Amortization of intangible assets was $12.9 million for the three months ended July 31, 2024, a decrease of $2.7 million, or 17%, as compared with the prior year. On a constant currency basis, amortization of intangible assets decreased 17% as compared with the prior year primarily due to the cessation of amortization for held-for-sale assets and, to a lesser extent, the completion of amortization of certain acquired intangible assets. See Note 3, “Divestitures” for more details on these held-for-sale assets.
Previous wording
Operating Loss, Adjusted Operating Income (OI) and Adjusted EBITDA:
Current wording
Operating Income (Loss), Adjusted Operating Income (OI) and Adjusted EBITDA:
Previous wording
Our operating loss was $46.4 million for the three months ended January 31, 2024, compared with the prior year operating loss of $67.1 million. The decrease was primarily due to lower costs of sales, a lower goodwill impairment in the three months ended January 31, 2024 and, to a lesser extent, a decrease in the amortization of intangible assets. These were partially offset by a decrease in revenue and, to a lesser extent, an increase in restructuring charges.
Current wording
Our operating income was $29.0 million for the three months ended July 31, 2024, compared with the prior year operating loss of $16.4 million. The increase was primarily due to lower costs of sales, and a goodwill impairment in the three months ended July 31, 2023, partially offset by a decrease in revenue.
Previous wording
Adjusted OI on a constant currency basis and excluding restructuring charges, impairment of goodwill, legal settlement, and the adjusted contribution to profit for the Held for Sale or Sold segment decreased 5% as compared with the prior year. The decrease in Adjusted OI was primarily due to an increase in operating and administrative expenses, partially offset by lower costs of sales, and an increase in Adjusted Revenue.
Current wording
Adjusted OI on a constant currency basis increased 83% as compared with the prior year. The increase in Adjusted OI was primarily due to an increase in Adjusted Revenue, partially offset by higher operating and administrative expenses.
Previous wording
Adjusted EBITDA on a constant currency basis increased 1% as compared with the prior year primarily due to lower cost of sales, and an increase in Adjusted Revenue, partially offset by an increase in operating and administrative expense.
Current wording
Adjusted EBITDA on a constant currency basis increased 22% as compared with the prior year primarily due to an increase in Adjusted Revenue, partially offset by higher operating and administrative expenses.
Previous wording
Below is a reconciliation of our consolidated US GAAP Operating Loss to Non-GAAP Adjusted OI:
Current wording
Below is a reconciliation of our consolidated US GAAP Operating Income (Loss) to Non-GAAP Adjusted OI:
Previous wording
Interest expense for the three months ended January 31, 2024, was $13.3 million compared with the prior year of $11.5 million. This increase was primarily due to a higher weighted average effective interest rate.
Current wording
Interest expense for the three months ended July 31, 2024, was $12.8 million compared with the prior year of $11.3 million. This increase was primarily due to a higher weighted average effective interest rate.
Previous wording
Foreign exchange transaction losses of $(3.5) million for the nine months ended January 31, 2024 were primarily due to losses on our foreign currency denominated third-party receivable and payable balances and, to a lesser extent, losses on our intercompany accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar. In fiscal year 2023, due to the closure of our operations in Russia, our Russian entity was deemed substantially liquidated. As a result, cumulative translation adjustments associated with that entity were recognized. In the nine months ended January 31, 2024, we wrote off an additional net $0.8 million in cumulative translation adjustments from our Russian entity.
Current wording
Foreign exchange transaction gains of $0.2 million for the three months ended July 31, 2024 were primarily due to gains on our foreign currency denominated intercompany accounts receivable and payable balances, offset by losses on our third-party receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar. In fiscal year 2023 due to the closure of our operations in Russia, the Russia entity was deemed substantially liquidated. In the three months ended July 31, 2024, we wrote off an additional $0.5 million cumulative translation adjustment in earnings.
Previous wording
Foreign exchange transaction gains of $0.3 million for the nine months ended January 31, 2023 were primarily due to losses on our foreign currency denominated third-party accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar.
Current wording
Foreign exchange transaction losses of $1.6 million for the three months ended July 31, 2023 were primarily due to losses on our third-party accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar. In the three months ended July 31, 2023, we wrote off an additional $0.9 million cumulative translation adjustment in earnings related to the closure of our operations in Russia.
Previous wording
Losses on Sale of Businesses and Impairment Charges Related to Assets Held-For-Sale:
Current wording
Gains (Losses) on Sale of Businesses and Impairment Charges Related to Assets Held-for-Sale:
Previous wording
As of January 31, 2024, Wiley Edge and CrossKnowledge continue to be reported as held-for-sale. We measured each disposal group at the lower of carrying value or fair value less cost to sell. In the three months ended January 31, 2024, we recorded a held-for-sale pretax impairment of $20.6 million and $5.8 million, respectively, related to Wiley Edge and CrossKnowledge. The additional impairment charges in the three months ended January 31, 2024 was due to subsequent changes in the fair value less cost to sell resulting from the continued progression of the selling processes and indications of changes in the expected consideration for the business, as well as changes in the carrying amount of the disposal group. Additional impairment charges related to all of our assets held-for-sale could be identified as we continue with the disposition process until completion of such actions.
Current wording
As of July 31, 2024, Wiley Edge's India operations and CrossKnowledge continue to be reported as held-for-sale. We measured the CrossKnowledge disposal group at the lower of carrying value or fair value less costs to sell. In the three months ended July 31, 2024, we reduced the held-for-sale pretax impairment by $4.4 million related to CrossKnowledge. The total impairment charge for CrossKnowledge is $51.0 million, which includes $55.4 million recognized in fiscal year 2024. The reduction of the impairment was due to subsequent changes in the fair value less costs to sell resulting from the continued progression of the selling process and indications of changes in the expected consideration for the business, as well as changes in the carrying amount of the disposal group.
Previous wording
See Note 3, “Acquisitions and Divestitures” for more details on the divestitures and the held-for-sale businesses.
Current wording
See Note 3, “Divestitures” for more details on the divestitures and the held-for-sale businesses.
Previous wording
Below is a reconciliation of our US GAAP Loss Before Taxes to Non-GAAP Adjusted Income Before Taxes:
Current wording
Below is a reconciliation of our US GAAP Income (Loss) Before Taxes to Non-GAAP Adjusted Income Before Taxes:
Previous wording
The Non-GAAP adjusted effective tax rate was 25.5% for the three months ended January 31, 2024, compared to 10.4% for the three months ended January 31, 2023. The increase in the Non-GAAP adjusted effective tax rate for the three months ended January 31, 2024, compared with the three months ended January 31, 2023, was primarily due to the mix of non-US income offset by tax incentives in the US.
Current wording
The Non-GAAP Adjusted Effective Tax Rate was 23.6% for the three months ended July 31, 2024 compared to 23.8% for the three months ended July 31, 2023. The slight decrease in the Non-GAAP Adjusted Effective Tax Rate for the three months ended July 31, 2024 compared with the three months ended July 31, 2023 was primarily due to the mix of income.
Previous wording
Diluted loss per share for the three months ended January 31, 2024 was $(2.08) per share compared with loss per share of $(1.29) per share for the three months ended January 31, 2023. This decrease was primarily due to losses on the sale of businesses and impairment charges related to assets held-for-sale in the three months ended January 31, 2024 and, to a lesser extent, an income provision for the three months ended January 31, 2024 compared to a benefit in the prior year, partially offset by a lower operating loss in the three months ended January 31, 2024.
Current wording
Diluted loss per share for the three months ended July 31, 2024 was $(0.03) per share compared with a loss per share of $(1.67) per share for the three months ended July 31, 2023. This decrease in the loss was primarily due to impairment charges related to assets held-for-sale in the prior year and, to a lesser extent, an operating loss in the prior year compared to operating income in the three months ended July 31, 2024. This was partially offset by an income tax benefit in the prior year compared to income tax expense in the three months ended July 31, 2024.
Previous wording
On a constant currency basis, Adjusted EPS decreased 27% primarily due to an increase in Adjusted Income Tax Provision and, to a lesser extent, a decrease in Adjusted Operating Income.
Current wording
On a constant currency basis, Adjusted EPS increased 74% primarily due to an increase in Adjusted Operating Income.
Previous wording
Open access article output growth was approximately 10% as compared with the prior year. Excluding Hindawi, open access article output growth was approximately 16% for the three months ended January 31, 2024.
Current wording
Research revenue for the three months ended July 31, 2024 increased $7.5 million, or 3%, as compared with the prior year on a reported basis. On a constant currency basis, revenue increased 3% as compared with the prior year primarily due to growth in Research Publishing in our institutional licensing and, to a lesser extent, open access models. Open access article output growth was approximately 14% as compared with the prior year.
Previous wording
On a constant currency basis, Adjusted EBITDA increased 15% as compared with the prior year. This increase was primarily due to lower print product related costs, a decrease in employee costs after recent restructuring actions and, to a lesser extent, a decrease in travel and entertainment expense.
Current wording
On a constant currency basis, Adjusted EBITDA increased 60% as compared with the prior year. This increase was primarily due to revenue performanceand, to a lesser extent, a decrease in employee costs after recent restructuring actions and technology costs, partially offset by higher royalty costs, bad debt and marketing expenses.
Previous wording
Revenue for Held for Sale or Sold decreased $36.4 million, or 38%, as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 39% as compared with the prior year. This was due to a decrease in University Services revenue due to lower enrollments and the sale of the business on January 1, 2024, placement revenues and, to a lesser extent, the disposition of certain businesses in the fourth quarter of fiscal year 2023 and the first quarter of fiscal year 2024. For the three months ended January 31, 2024, placements declined 51% and enrollments declined 3%.
Current wording
Revenue for Held for Sale or Sold decreased $69.7 million, or 83%, as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 83% as compared with the prior year. This was due to a decrease in University Services revenue due to the sale of the business on January 1, 2024, and placement revenues due to the sale of the Wiley Edge business on May 31, 2024.
Previous wording
On a constant currency basis, adjusted corporate expenses of $38.9 million on an Adjusted EBITDA basis increased 13% as compared with the prior year. This was primarily due to a lower incentive compensation accrual in the prior year.
Current wording
On a constant currency basis, adjusted corporate expenses of$39.0 million on an Adjusted EBITDA basis increased 2% as compared with the prior year. This was primarily due to an increase in technology related costs.
Previous wording
We believe that our operating cash flow, together with our revolving credit facilities and other available debt financing, will be adequate to meet our operating, investing, and financing needs for at least the next twelve months. Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used to fund shareholder dividends. Other discretionary uses of cash flow include share repurchases and acquisitions to complement our portfolio of businesses. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our durable business results and a global cash management strategy that considers liquidity management, economic factors and tax considerations. Our cash and cash equivalents are maintained at a number of financial institutions. To mitigate the risk of uninsured balances, we select financial institutions based on their credit ratings and financial strength, and we perform ongoing evaluations of these institutions to limit our concentration risk exposure to any financial institution.
Current wording
We believe that our operating cash flow, together with our revolving credit facilities and other available debt financing, will be adequate to meet our operating, investing, and financing needs in the next twelve months. Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used to fund shareholder dividends. Other discretionary uses of cash flow include share repurchases and acquisitions to complement our portfolio of businesses. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our durable business results and a global cash management strategy that considers liquidity management, economic factors and tax considerations. Our cash and cash equivalents are maintained at a number of financial institutions. To mitigate the risk of uninsured balances, we select financial institutions based on their credit ratings and financial strength, and we perform ongoing evaluations of these institutions to limit our concentration risk exposure to any financial institution.
Previous wording
As of January 31, 2024, we had cash and cash equivalents of $108.8 million, including cash and cash equivalents classified as held-for-sale of $15.7 million, of which approximately $107.1 million, or 98%, was located outside the US. Maintenance of these cash and cash equivalent balances outside the US does not have a material impact on the liquidity or capital resources of our operations. We intend to repatriate earnings from our non-US subsidiaries, and to the extent we repatriate these funds to the US, we will be required to pay income taxes in various US state and local jurisdictions and applicable non-US withholding or similar taxes in the periods in which such repatriation occurs. Accordingly, as of January 31, 2024, we have recorded a deferred tax liability of approximately $2.5 million related to the estimated taxes that would be incurred upon repatriating certain non-US earnings to the US.
Current wording
As of July 31, 2024, we had cash and cash equivalents of $89.4 million, including cash and cash equivalents classified as held-for-sale of $6.8 million, of which approximately all was located outside the US. Maintenance of these cash and cash equivalent balances outside the US does not have a material impact on the liquidity or capital resources of our operations. We intend to repatriate earnings from our non-US subsidiaries, and to the extent we repatriate these funds to the US, we will be required to pay income taxes in various US state and local jurisdictions and applicable non-US withholding or similar taxes in the periods in which such repatriation occurs. Accordingly, as of July 31, 2024, we have recorded a deferred tax liability of approximately $3.0 million related to the estimated taxes that would be incurred upon repatriating certain non-US earnings to the US.
Previous wording
On November 30, 2022, we entered into the second amendment to the Third Amended and Restated Credit Agreement (collectively, the Amended and Restated CA). See Note 15, “Debt and Available Credit Facilities” for more details on the amendment. The Amended and Restated CA provided for senior unsecured credit facilities comprised of a (i) five-year revolving credit facility in an aggregate principal amount up to $1.115 billion, which matures November 2027, (ii) a five-year term loan A facility consisting of $200 million, which matures November 2027, and (iii) $185 million aggregate principal amount revolving credit facility through May 2024.
Current wording
On November 30, 2022, we entered into the second amendment to the Third Amended and Restated Credit Agreement (collectively, the Amended and Restated CA). See Note 15, “Debt and Available Credit Facilities” for more details on the amendment. The Amended and Restated CA provided for senior unsecured credit facilities comprised of the following (i) a five-year revolving credit facility in an aggregate principal amount up to $1.115 billion, which matures November 2027, (ii) a five-year term loan A facility consisting of $200 million, which matures November 2027, and (iii) $185 million aggregate principal amount revolving credit facility which matured in May 2024.
Previous wording
As of January 31, 2024, we had approximately $906.8 million of debt outstanding, net of unamortized issuance costs of $0.6 million, and approximately $587.4 million of unused borrowing capacity under our Amended and Restated CA and other facilities. Our Amended and Restated CA contains certain restrictive covenants related to our consolidated leverage ratio and interest coverage ratio, which we were in compliance with as of January 31, 2024.
Current wording
As of July 31, 2024, we had approximately $918.6 million of debt outstanding, net of unamortized issuance costs of $0.5 million, and approximately $388.1 million of unused borrowing capacity under our Amended and Restated CA and other facilities. Our Amended and Restated CA contains certain restrictive covenants related to our consolidated leverage ratio and interest coverage ratio, which we were in compliance with as of July 31, 2024.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (18)
Previous report — wording carried elsewhere
See Note 12, “Goodwill and Intangible Assets” for more details on these charges.
Previous report — wording carried elsewhere
These charges and credits are reflected in Restructuring and related charges on our Unaudited Condensed Consolidated Statements of Net Loss.
Previous report — wording carried elsewhere
Foreign exchange transaction gains of $0.5 million for the three months ended January 31, 2024 were primarily due to gains on our foreign currency denominated intercompany accounts receivable and payable balances, partially offset by losses on our third-party receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar.
Previous report — wording carried elsewhere
Foreign exchange transaction gains of $0.4 million for the three months ended January 31, 2023 were primarily due to gains on our foreign currency denominated intercompany accounts receivable and payables balances, partially offset by losses on our third party accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar.
Previous report — wording carried elsewhere
•Adjusted Results at Constant Currency(excluding Held for Sale or Sold segment results): Adjusted Revenue of $1,176.3 million (-3%, compared with the prior year), Adjusted EBITDA of $243.6 million (-7%, compared with the prior year), and Adjusted EPS of $1.59 (-29%, compared with the prior year).
Previous report — wording carried elsewhere
Below is a reconciliation of our consolidated US GAAP Revenue to Non-GAAP Adjusted Revenue:
Previous report — wording carried elsewhere
See the “Segment Operating Results” below for additional details on each segment’s revenue and Adjusted EBITDA performance.
Previous report — wording carried elsewhere
We anticipate ongoing severance related charges and facility-related costs associated with certain properties to result in additional restructuring charges in future periods.
Previous report — wording carried elsewhere
These charges are reflected in Restructuring and related charges on our Unaudited Condensed Consolidated Statements of Net Loss.
Previous report — wording carried elsewhere
For the impact of our restructuring programs on diluted loss per share, see the section below, “Diluted Loss per Share.”
Previous report — wording carried elsewhere
Operating Loss, Adjusted Operating Income (OI) and Adjusted EBITDA:
Previous report — wording carried elsewhere
Below is a reconciliation of our consolidated US GAAP Operating Loss to Non-GAAP Adjusted OI:
Previous report — wording carried elsewhere
Below is a reconciliation of our consolidated US GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA:
Previous report — wording carried elsewhere
Interest expense for the nine months ended January 31, 2024, was $37.6 million compared with the prior year of $27.2 million. This increase was primarily due to a higher weighted average effective interest rate.
Previous report — wording carried elsewhere
Losses on Sale of Businesses and Impairment Charges Related to Assets Held-For-Sale:
Previous report — wording carried elsewhere
Below is a reconciliation of our US GAAP Loss Before Taxes to Non-GAAP Adjusted Income Before Taxes:
Previous report — wording carried elsewhere
Below is a reconciliation of our US GAAP Income Tax Benefit to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate:
Previous report — wording carried elsewhere
Below is a reconciliation of our US GAAP Loss Per Share to Non-GAAP Adjusted EPS. The amount of the pretax, and the related income tax impact for the adjustments included in the table below are presented in the section above, “Benefit for Income Taxes”.