Wiley Q2 Revenue Down 1.7% YoY, AI Licensing and Open Access Show Promise

John Wiley & Sons (WLY) Q2 CY2025 revenue fell 1.7% YoY to $396.8 million, while adjusted EBITDA declined 3% YoY to $70.45 million. AI licensing and open access publishing were bright spots, but traditional professional publishing faced headwinds. The company aims to leverage its content across a broader set of industry verticals and drive margin expansion through operational improvements and growth in AI licensing and open access submissions.

John Wiley & Sons (WLY) reported its Q1 2026 earnings, showcasing a 1% adjusted revenue growth and a 2% EPS increase. The company's AI licensing revenue surged to $29 million, up from $17 million, driven by robust demand and content integration from other publishers [1].

The earnings call highlighted several strategic partnerships, including the collaboration with Anthropic. This partnership focuses on integrating Wiley's content into institutional AI tools, primarily through subscription upsells rather than direct monetization. The expected contribution from recurring revenue partnerships in 2026 and beyond is significant, with the company viewing it as a way to underpin the value of its institutional library subscriptions [1].

Research publishing revenue fell 1% despite a 25% increase in submissions, attributed to seasonal timing effects. Open Access revenue, however, rose 50% at flagship journals. Professional Publishing faced retail channel weakness, but AI licensing potential in STEM books and cost reductions from Q2 offset these risks [1].

Corporate expenses are expected to decline year-over-year, with capital allocation prioritizing dividends, $250 million in buybacks, and AI infrastructure modernization. The company aims to achieve margin expansion through operational improvements and growth in AI licensing and open access submissions [1].

Several contradictions emerged during the earnings call. For instance, there was a discrepancy in the expected impact of Nexus revenue on fiscal 2026 margin outlook. While some executives suggested a de minimis impact, others highlighted its additive nature to revenue and gross profit [1].

Another contradiction involved the allocation of AI revenue and the strategic approach to AI-related opportunities for growth. The company views the Anthropic agreement as a way to underpin the value of its institutional library subscriptions, but some investors questioned whether it would change AI-related investment levels [1].

The earnings call also highlighted differing statements on the expected growth and performance of Research Publishing revenue. While some executives were confident in year-end growth, others noted the need for increased submissions to drive revenue growth [1].

In summary, John Wiley & Sons reported mixed results in Q1 2026, with AI licensing and open access publishing as bright spots. The company faces challenges in Professional Publishing and corporate expenses, but it is committed to leveraging its content across broader industry verticals and driving margin expansion through strategic initiatives [1].

References:
[1] https://www.ainvest.com/news/john-wiley-sons-q1-2026-earnings-call-contradictions-emerge-ai-partnerships-margins-ai-allocation-publishing-revenue-performance-2509/