John Wiley Sons B 2026 Q2 Earnings Net Income Grows 11.0% Despite Revenue Dip

John Wiley & Sons B (WLYB) reported fiscal 2026 Q2 earnings on Dec 5, 2025, with revenue declining 1.1% year-over-year to $421.75 million. The company exceeded EPS estimates and reaffirmed adjusted EBITDA and free cash flow guidance while narrowing revenue growth expectations to low-single-digit growth due to Learning segment challenges.

Revenue

The Research segment led the revenue streams with $278.51 million, driven by global demand for publishing and AI content licensing projects. The Learning segment contributed $143.24 million, though it faced headwinds from soft consumer spending and enrollment declines in disciplines like computer science. Total revenue fell slightly to $421.75 million, reflecting mixed performance across business lines.

Earnings/Net Income

John Wiley & Sons B’s earnings showed resilience, with EPS rising 13.3% to $0.85 and net income increasing 11.0% to $44.89 million. The strong earnings growth, despite the revenue decline, underscores improved cost management and operational efficiency. This performance highlights the company’s ability to enhance profitability through strategic cost reductions and margin expansion.

Price Action

The stock price of WLYB has faced downward pressure, dropping 4.18% in the latest trading day and 12.25% month-to-date. The negative momentum reflects market skepticism about the Learning segment’s challenges and broader macroeconomic uncertainties.

Post-Earnings Price Action Review

The strategy of buying WLYB when earnings beat and holding for 30 days resulted in poor performance, with a return of -1.70% compared to the benchmark’s 85.52%. This underperformance, coupled with a Sharpe ratio of -0.01 and a maximum drawdown of 0.00%, underscores the high risk and limited upside of such a conservative approach.

CEO Commentary

Matthew Kissner, President and CEO, emphasized robust Research growth and AI momentum, citing a 6% year-to-date increase in Research revenue. He highlighted cost discipline, including a 18% reduction in corporate expenses, and strategic investments in AI-driven large language models. Despite Learning segment headwinds, Kissner expressed confidence in long-term Research and AI opportunities.

Guidance

Wiley reaffirmed 2026 guidance for Adjusted EBITDA margin (25.5–26.5%), Adjusted EPS ($3.90–$4.35), and Free Cash Flow (~$200M). Revenue guidance was narrowed to low-single-digit growth due to Learning segment challenges. The company expects AI revenue to exceed last year’s $40 million and anticipates leverage improvements from $120M in debt reduction via divestiture proceeds.

Additional News

1. AI Licensing Expansion: Wiley secured a $6 million AI licensing deal with an existing LLM customer, bringing total AI revenue to $5M in Q2 and nearing $100M in two years.

2. Share Repurchase Acceleration: Share repurchases increased by 69% to $21 million in Q2, reflecting disciplined capital allocation.

3. Strategic Partnership Expansion: Wiley added Mistral AI to its existing partnerships with AWS, Anthropic, and Perplexity, enhancing its AI content licensing capabilities.

The stock’s post-earnings underperformance contrasts with management’s optimistic outlook on Research and AI growth. While the Learning segment faces structural challenges, Wiley’s focus on cost optimization and AI innovation positions it to navigate macroeconomic headwinds. Investors should monitor AI revenue progress and Learning segment recovery efforts in upcoming quarters.