Academic publishing company John Wiley & Sons (NYSE: WLY) reported Q1 CY2025 results exceeding the market’s revenue expectations, but sales fell by 5.5% year on year to $442.6 million. Its GAAP profit of $1.25 per share was 16.8% above analysts’ consensus estimates.

Is now the time to buy WLY? Find out in our full research report (it’s free).

StockStory’s Take

Wiley’s first quarter of 2025 saw revenue decline year over year, yet the company managed to surpass Wall Street’s expectations on both sales and profit. Management attributed the outcome to continued expansion in digital offerings and growth in recurring revenue streams, particularly in Open Access publishing and AI-related licensing. CEO Matt Kissner highlighted that, despite market headwinds, the company “drove growth in our core while delivering material margin expansion and capitalized on emerging market opportunities in the corporate sector through AI licensing, data analytics, and knowledge services.”

Looking ahead, management underscored a cautious but optimistic stance, citing steady performance in recurring revenue models and a favorable renewal season for academic publishing as key supports for 2025. Kissner noted that AI opportunities remain significant but unpredictable, stating, “AI is still a very rapid evolving market. So it's certainly not as predictable as we'd like to see.” The company expects ongoing investment in digital infrastructure and targeted cost reductions to contribute to both margin improvement and long-term revenue stability.

Key Insights from Management’s Remarks

Wiley’s results reflected the impact of digital transformation, resilient subscription models, and early-stage corporate AI monetization, while management addressed cost efficiencies and strategic repositioning.

• Open Access momentum: The Open Access publishing segment experienced double-digit growth, benefiting from increased global demand for publication and the success of multi-discipline journals such as Advanced Science, which saw higher impact factors and broader readership.
• AI licensing expansion: Wiley’s AI licensing revenue reached $40 million for the year, driven by new agreements with multinational technology firms and a shift toward recurring, utility-based licensing models in corporate R&D, though management cautioned that future AI revenue is difficult to forecast.
• Recurring revenue stability: Around two-thirds of research segment revenue remains recurring, supported by successful multi-year renewal agreements across key geographic markets, providing a degree of earnings visibility despite macroeconomic uncertainty.
• Cost structure and margin focus: The company executed targeted efficiency programs, particularly in technology and corporate services, resulting in lower corporate expenses and a multi-year strategy to expand operating margins and improve cash flow.
• Portfolio and product updates: New product launches such as the WorkSmart assessment tool and increased title signings in professional areas like business and nursing are expected to drive future growth, while ongoing investments in research platforms and digital courseware remain central to the company’s strategy.

Drivers of Future Performance

Wiley’s outlook relies on recurring digital revenue, margin expansion initiatives, and further AI-related corporate partnerships amid a cautious macroeconomic environment.

• Digital revenue and renewals: Management expects continued strength in recurring digital revenue streams, supported by a strong pipeline of academic journal submissions and favorable multi-year renewal agreements, particularly in international markets like India, China, and Brazil.
• AI and corporate partnerships: The company aims to expand its presence in corporate R&D and AI through new licensing models and pilot projects, though executives acknowledge that growth in this area is at an early stage and subject to volatility as the market evolves.
• Efficiency and cost control: Strategic cost-saving initiatives, especially in technology and corporate functions, are expected to support further operating margin improvement. Management also highlighted continued investment in high-return areas such as digital publishing platforms and courseware, balancing growth with prudent expense management.

Catalysts in Upcoming Quarters

In the upcoming quarters, our team will focus on (1) the pace and scale of new AI licensing agreements and subscription-based digital offerings, (2) the sustainability of recurring revenue from academic renewals and international expansion, and (3) effective execution of cost-reduction programs in technology and corporate services. Developments in corporate R&D partnerships and further product launches will also be key markers of Wiley’s progress.

Wiley currently trades at $40.72, in line with $40.75 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).

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