Item 1A. Risk Factors
Introduction
The risks described below should be carefully considered before making an investment decision. You should carefully consider all the information set forth in this Annual Report on Form 10-K, including the following risk factors, before deciding to invest in any of our securities. This Annual Report on Form 10-K also contains, or may incorporate by reference, forward-looking statements that involve risks and uncertainties. See the “Cautionary Notice Regarding Forward-Looking Statements,” immediately preceding Part I of this Annual Report on Form 10-K. The risks below are not the only risk factors we face. Additional risks not currently known to us or that we presently deem insignificant could impact our consolidated financial position and results of operations. Our businesses, consolidated financial position, and results of operations could be materially adversely affected by any of these risks. The trading price of our securities could decline due to any of these risks, and investors may lose all or part of their investment.
Strategic Risks
Our business may be adversely impacted if we cannot protect our intellectual property.
Our business depends on our intellectual property, including our valuable trademarks and copyrighted content. A substantial portion of our publications are protected by copyright, held either in our name, in the name of the author of the work, or in the name of a sponsoring professional society. Such copyrights protect our exclusive right to publish the work in many countries abroad for specified periods, in most cases the author’s life plus 70 years. We believe the protection and monetization of our proprietary trademarks and copyrighted content, as well as other intellectual property, is critical to our continued success and our competitive position. Our ability to do so is subject to the inherent limitation in protections available under intellectual property laws in the US and other applicable jurisdictions. Unauthorized parties could unlawfully misappropriate our brand, content, technology, and other intellectual property and may continue to do so, and the measures we have taken to protect and enforce our proprietary rights may not be sufficient to fully address or prevent all third-party infringement.
Advancements in technology, including advancements in generative artificial intelligence (collectively, AI Technologies), have made unauthorized copying and wide dissemination of unlicensed content easier. Detection of unauthorized use of our intellectual property and enforcement of our intellectual property rights have become more challenging, in part due to the increasing volume and sophistication of attempts at unauthorized use of our intellectual property, including from generative AI developers. As our business and the presence and impact of bad actors become more global in scope, we may not be able to protect our proprietary rights in a cost-effective manner in other jurisdictions. In addition, intellectual property protection may not be available in every country in which our products and services are distributed or made available through the internet.
If we are unable to protect and enforce our intellectual property rights, we may not succeed in realizing the full value of our assets, our business and profitability may be adversely impacted, and our brand may be tarnished by misuse of our intellectual property.
14
Index
We may not be able to realize the expected benefits of our growth strategies, which are described in Item 1. Business, which could adversely impact our consolidated financial position and results of operations.
We may not be able to adequately drive publishing output and journal expansion to meet the global demand for peer-reviewed research, nor expand licensing, platform, and service offerings for institutions, corporations, and societies.
Technological developments in artificial intelligence (AI) could disrupt the markets in which we operate and subject us to increased competition, cannibalization, legal and regulatory risks, and compliance costs.
Technological developments in artificial intelligence, including machine learning technology, large language models, and AI Technologies and their current and potential future applications, are rapidly evolving. The full extent of current or future risks related thereto is not possible to predict. AI Technologies could significantly disrupt the markets in which we operate and subject us to increased competition, legal and regulatory risks, which could have a material adverse effect on our business, financial condition, and results of operations. In addition, the sale of new products leveraging AI Technologies may result in the cannibalization of sales for existing products, which may harm our results of operations.
We intend to seek to avail ourselves of the potential benefits, insights, and efficiencies that are available through the use of AI Technologies, which presents a number of potential risks that cannot be fully mitigated. If the content, analyses, or recommendations that AI Technologies assist in producing are, or are alleged to be, deficient, inaccurate, biased, or otherwise problematic, our reputation may be adversely affected. In addition, the introduction of generative AI tools into our business may negatively impact our workplace culture and ability to attract and retain employees if generative AI tools are viewed as displacing workers. Generative AI also presents emerging legal and ethical issues, and terms governing the use of generative AI are subject to change. Accordingly, our use of, or perceptions of the way that we use, generative AI could adversely affect our business, brand, financial condition, or results of operations. There is also a risk that AI Technologies may be misused or misappropriated by our employees and/or third parties engaged.
Further, we may not be able to control how third-party AI Technologies that we choose to use are developed or maintained, or how data we input is used or disclosed, even where we have sought contractual protections with respect to these matters. The misuse or misappropriation of our data could have an adverse impact on our reputation and could subject us to legal and regulatory investigations and/or actions.
Regulations related to AI Technologies may also impose on us certain obligations and costs related to monitoring and compliance. For example, in April 2023, the Federal Trade Commission, US Department of Justice, Consumer Financial Protection Bureau, and US Equal Employment Opportunity Commission released a joint statement on AI demonstrating interest in monitoring the development and use of automated systems and enforcement of their respective laws and regulations. In October 2023, the Presidential Administration signed an executive order that establishes new standards for AI safety and security. In addition to the US regulatory framework, the EU introduced a new regulation applicable to certain AI Technologies and the data used to train, test, and deploy them, which could impose significant requirements on both the providers and deployers of AI Technologies.
Potential reductions in US federal funding for libraries and changes to US higher education policy may adversely affect our business
Our operations and revenue are partially dependent on funding for research and spending by publicly funded institutions, including public libraries, colleges, and universities. The current US administration has recently proposed reductions in US federal funding for the National Institute of Health and other agencies that support research as well as funding for the US Department of Education and other university programs. If these proposals are enacted, our US library customers may experience budget constraints that reduce their ability to license, purchase, or renew our products and services.
Wiley is a global business and enjoys healthy geographic revenue distribution and funding diversity worldwide, but any material and sustained decrease in US public funding for research and education could adversely affect our results of operations over time. We cannot predict the extent to which future US federal budgets or policy changes may impact funding policies in other countries, our customers, or our business, but such actions may have a significant and negative effect on our US market.
15
Index
Divestitures could adversely affect our business and financial results and may introduce significant risks and uncertainties.
We continually evaluate the performance and strategic fit of all of our businesses and may sell businesses or product lines. We completed the divestiture of our non-core education businesses that no longer aligned with our strategic direction or growth targets, as previously disclosed. While these divestitures have been finalized, certain financial arrangements associated with these transactions, including Sellers Notes and earnout provisions, continue to present potential risks and uncertainties that could adversely affect our business, consolidated financial position, and consolidated results of operations. These post-divestiture financial arrangements require ongoing monitoring and management attention to ensure compliance with agreement terms and to mitigate potential adverse impacts on our financial position. If the buyers of our divested businesses experience operational or financial difficulties, our ability to collect on Sellers Notes or realize anticipated earnout payments could be impaired. See Note 4, "Acquisitions and Divestitures" for further details.
A reduction in enrollment at colleges and universities could adversely affect the demand for our higher education products.
Enrollment in US colleges and universities can be adversely affected by many factors, including changes in government and private student loan and grant programs, uncertainty about current and future economic conditions, increases in tuition, general decreases in family income and net worth, and low unemployment due to an active job market. In addition, enrollment levels at colleges and universities outside the US are influenced by global and local economic factors, local political conditions, and other factors that make predicting foreign enrollment levels difficult. Reductions in expected levels of enrollment at colleges and universities within the US could adversely affect demand for our higher education offerings, which could adversely impact our consolidated financial position and results of operations.
If we are unable to retain key talent and other colleagues, our consolidated financial condition or results of operations may be adversely affected.
The Company and industry are highly dependent on the loyal engagement of key leaders and colleagues. Loss of talent due to inadequate skills and career path development, or maintaining competitive salaries and benefits could have a significant impact on Company performance.
We are highly dependent on the continued services of key talent who have in-depth market and business knowledge and/or key relationships with business partners. The loss of the services of key talent for any reason and our inability to replace them with suitable candidates quickly or at all, as well as any negative market perception resulting from such loss, could have a material adverse effect on our business, consolidated financial position, and results of operations.
We have a significant investment in our colleagues around the world. We offer competitive salaries and benefits in order to attract and retain the highly skilled workforce needed to sustain and develop new products and services required for growth. Employment costs are affected by competitive market conditions for qualified individuals and factors such as healthcare and retirement benefit costs.
The competitive pressures we face in our business, as well as our ability to retain our business relationships with our authors and professional societies, could adversely affect our consolidated financial position and results of operations.
The contribution of authors and their professional societies is one of the more important elements of the highly competitive publishing business. Success and continued growth depend greatly on developing new products and the means to deliver them in an environment of rapid technological change. Attracting new authors and professional societies while retaining our existing business relationships is critical to our success. If we are unable to retain our existing business relationships with authors and professional societies, this could have an adverse impact on our consolidated financial position and results of operations.
The demand for digital and lower cost books could impact our sales volumes and pricing in an adverse way.
The trend towards digital content has created contraction in the print book retail market which increases the risk of bankruptcy for certain retail customers, potentially leading to the disruption of short-term product supply to consumers, as well as potential bad debt write-offs.
16
Index
As the market has shifted to digital products, customer expectations for lower-priced products have increased due to customer awareness of reductions in production costs and the availability of free or low-cost digital content and products. Increased customer demand for lower prices could reduce our revenue.
Due to growing student demand for less expensive textbooks, many college bookstores, online retailers, and other entities, offer used or rental textbooks to students at lower prices than new textbooks. The Internet has made the used and rental textbook markets more efficient and has significantly increased student access to used and rental textbooks.
Information Technology Systems and Cybersecurity Risks
Our Company is highly dependent on information technology systems and their business management and customer-facing capabilities, which are critical for the long-term competitive sustainability of the business. If we fail to innovate in response to rapidly evolving technological and market developments, our competitive position may be negatively impacted.
We must continue to invest in technology and other innovations to adapt and add value to our products and services to remain competitive. This is particularly true in the current environment, where investment in new technology is ongoing and there are rapid changes in the products competitors are offering, the products our customers are seeking, and our sales and distribution channels. In some cases, investments will take the form of internal development; in others, they may take the form of an acquisition. There are uncertainties whenever developing or acquiring new products and services, and it is often possible that such new products and services may not be launched, or, if launched, may not be profitable or as profitable as existing products and services. If we are unable to introduce new technologies, products, and services, our ability to be profitable may be adversely affected.
We cannot predict the effect of technological changes on our business. Failure to keep pace with these technological developments or otherwise bring to market products that reflect these technologies could have a material adverse impact on our overall business and results of operations. We may not be successful in anticipating or responding to these developments on a timely and cost-effective basis. Additionally, the effort to gain technological expertise and develop new technologies in our business requires us to incur significant expenses. If we cannot offer new technologies as quickly as our competitors, or if our competitors develop more cost-effective technologies or product offerings, we could experience a material adverse effect on our operating results, growth, and financial condition.
We may be susceptible to information technology risks that may adversely impact our business, consolidated financial position, and results of operations.
Information technology is a key part of our business strategy and operations. As a business strategy, Wiley’s technology enables us to provide customers with new and enhanced products and services and is critical to our success in migrating from print to digital business models. Information technology is also a fundamental component of all our business processes, collecting and reporting business data, and communicating internally and externally with customers, suppliers, employees, and others. We face technological risks associated with digital products and service delivery in our businesses, including with respect to information technology capability, reliability, security, enterprise resource planning, system implementations, and upgrades. Across our businesses, we hold personal data, including that of employees and customers. Failures of our information technology systems and products (including operational failure, natural disaster, computer virus, or cyberattacks) could interrupt the availability of our digital products and services, result in corruption or loss of data or breach in security, and result in liability or reputational damage to our brands and/or adversely impact our consolidated financial position and results of operations.
Management has designed and implemented policies, processes, and controls to mitigate risks of information technology failure and to provide security from unauthorized access to our systems. In addition, we have disaster recovery plans in place to maintain business continuity for our key financial systems. While key financial systems have backup and tested disaster recovery systems, other applications and services have limited backup and recovery procedures which may delay or prevent recovery in case of disaster. The size and complexity of our information technology and information security systems, and those of our third-party vendors with whom we contract, make such systems potentially vulnerable to cyberattacks common to most industries from inadvertent or intentional actions by employees, vendors, or malicious third parties. While we have taken steps to address these risks, there can be no assurance that a system failure, disruption, or data security breach would not adversely affect our business and could have an adverse impact on our consolidated financial position and results of operations.
17
Index
We are continually improving and upgrading our computer systems and software. We have recently initiated a multiyear enterprise modernization program which includes various projects including the consolidation and transformation of our Research publishing infrastructure, and the future implementation of an updated global enterprise resource planning (ERP) system to integrate and upgrade our operational and financial systems and processes. Implementation of this program and the related projects involves risks and uncertainties.
The risks associated with the transformation of our Research publishing infrastructure could include not realizing our projected business benefits of growing article submissions, reducing the time to publication, facilitating growth in open access with a modern open access payment infrastructure, and reducing the cost per article.
Any disruptions, delays, or deficiencies in the design or implementation of a new ERP system could result in increased costs, disruptions in operations, or delays in the collection of cash from our customers, as well as having an adverse effect on our ability to timely report our financial results, all of which could materially adversely affect our business, consolidated financial position, and results of operations. While we have contingency support available, any major disruptions, while unlikely, may require a longer remediation time. This could impact our ability to process and fulfill orders for those businesses. We currently use a legacy platform with limited support for order management of the global Learning business. Any defects and disruptions in the legacy systems which cannot be addressed in a timely manner could impact our ability to process orders and reconcile financial statements. These legacy platforms are being evaluated as part of the recently initiated enterprise modernization program noted above.
Cyber risk and the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business, could have a material adverse effect on our business, consolidated financial condition, and results of operations.
The cybersecurity risks we face range from cyberattacks common to most industries, such as the development and deployment of malicious software to gain access to our networks and attempt to steal confidential information, launch distributed denial of service attacks, or attempt other coordinated disruptions, to more advanced threats that target us because of our prominence in the global research and advisory field. Given that our employees work remotely, at least some of the time, which magnifies the importance of the integrity of our remote access security measures.
Like many multinational corporations, we, and some third parties upon which we rely, have experienced cyberattacks on our computer systems and networks in the past and may experience them in the future, likely with more frequency and sophistication and involving a broader range of devices and modes of attack, all of which will increase the difficulty of detecting and successfully defending against them. To date, none have resulted in any material adverse impact to our business, operations, products, services, or customers. Wiley has invested heavily in cybersecurity tools and resources to keep our systems safe. We have implemented various security controls to meet our security obligations, while also defending against constantly evolving security threats. Our security controls help to secure our information systems, including our computer systems, intranet, proprietary websites, email, and other telecommunications and data networks, and we scrutinize the security of outsourced website(s) and service providers prior to retaining their services. However, the security measures implemented by us or by our outside service providers may not be effective, and our systems (and those of our outside service providers) may be vulnerable to theft, loss, damage, and interruption from a number of potential sources and events, including unauthorized access or security breaches, cyberattacks, computer viruses, power loss, or other disruptive events.
The security compliance landscape continues to evolve, requiring us to stay apprised of changes in cybersecurity, privacy laws and regulations, such as the following, but not limited to the European Union General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), the Brazilian General Data Protection Law (LGPD), and the Chinese Cybersecurity, Data Security and Personal Information Protection laws (PIPL). The UK ceased to be an EU Member State on January 31, 2020, but enacted the UK data protection law. It is unclear how UK data protection laws will continue to develop; however, contractual clauses have been established regulating data transfers to and from the UK. Some countries also are considering or have enacted legislation requiring local storage and processing of data that could increase the cost and complexity of delivering our services.
18
Index
In addition to new and proposed data protection laws, we also stay apprised and adopt certain security standards required by our clients, such as International Organization for Standardization (ISO), National Institute of Standards and Technology (NIST), and Center for Internet Security (CIS). Recent well-publicized security breaches at other companies have led to enhanced government and regulatory scrutiny of the measures taken by companies to protect against cyberattacks and may in the future result in heightened cybersecurity requirements, including additional regulatory expectations for oversight of vendors and service providers.
A cyberattack could cause delays in initiating or completing sales, impede delivery of our products and services to our clients, disrupt other critical client-facing or business processes, or dislocate our critical internal functions. Additionally, any material breaches or other technology-related catastrophe, or media reports of perceived security vulnerabilities to our systems or those of our third parties, even if no breach has been attempted or has occurred, could cause us to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions or other statutory penalties, litigation, liability for failure to safeguard our customers information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us.
For more information regarding our process for identifying, assessing and managing material risks from cybersecurity threats, refer to Item 1C. Cybersecurity.
Operational Risks
We may not realize the anticipated cost savings and benefits from, or our business may be disrupted by, our continuous improvement efforts.
We will continue to explore opportunities to develop new business models and enhance the efficiency of our cost and organizational structure. The rapid pace and scope of change increases the risk that not all our strategic initiatives will deliver the expected benefits within the anticipated timeframes. In addition, these efforts may disrupt our business activities, which could adversely affect our consolidated financial position and results of operations.
We continue to restructure and realign our cost base with current and anticipated future market conditions, including our Global Restructuring Program. Significant risks associated with these actions that may impair our ability to achieve the anticipated cost savings or that may disrupt our business, include delays in the implementation of anticipated workforce reductions in highly regulated locations outside of the US, decreases in employee morale, the failure to meet operational targets due to the loss of key employees, and disruptions of third parties to whom we have outsourced certain business functions. In addition, our ability to achieve the anticipated cost savings and other benefits from these actions within the expected timeframe is subject to many estimates and assumptions. These estimates and assumptions are subject to significant economic, competitive, and other uncertainties, some of which are beyond our control. If these estimates and assumptions are incorrect, if we experience delays, or if other unforeseen events occur, our business and consolidated financial position and results of operations could be adversely affected.
We may not realize the anticipated cost savings and processing efficiencies associated with the outsourcing of certain business processes.
We have outsourced certain business functions, principally in technology, content management, printing, warehousing, fulfillment, distribution, collections and returns processing, and certain other transactional processing functions, to third-party service providers to achieve cost savings and efficiencies. If these third-party service providers do not perform effectively, we may not be able to achieve the anticipated cost savings, and depending on the function involved, we may experience business disruption or processing inefficiencies, all with potential adverse effects on our consolidated financial position and results of operations.
Challenges and uncertainties associated with operating in certain global markets has a higher risk due to political instability, economic volatility, crime, terrorism, corruption, social and ethnic unrest, and other factors, which may adversely impact our consolidated financial position and results of operations.
We sell our products to customers in certain sanctioned and previously sanctioned developing markets in accordance with such restrictions. While sales in these markets are not material to our consolidated financial position and results of operations, adverse developments related to the risks associated with these markets may cause actual results to differ from historical and forecasted future consolidated operating results.
19
Index
We have certain global operations related to software development and technology architecture, digital content production, and system testing services. Due to the political instability within certain regions, there is the potential for future government embargoes and sanctions, which could disrupt our operations in these areas. While we have developed business continuity plans to address these issues, further adverse developments in these regions could have a material impact on our consolidated financial position and results of operations.
In our Research segment, approximately 30% of the articles we published in calendar year 2024 included China-based authors. This compares to the industry percentage which is approximately 32% of articles published in calendar year 2024 which included China-based authors. Any restrictions on exporting intellectual property could adversely affect our business and consolidated financial position and results of operations. Chinese governments and institutions are producing early warning lists of journals published by non-Chinese publishers that have high proportions of Chinese content which could have an impact on future article volumes.
In our journal publishing business, we have a trade concentration and credit risk related to subscription agents, and in our book business the industry has a concentration of customers in national, regional, and online book resellers. Changes in the financial position and liquidity of our subscription agents and customers could adversely impact our consolidated financial position and results of operations.
In the journal publishing business, some subscriptions are sourced through journal subscription agents who, acting as agents for library customers, facilitate ordering by consolidating the subscription orders/billings of each subscriber with various publishers. Cash is generally collected in advance from subscribers by the subscription agents and is principally remitted to us between the months of December and April. Although currently we have minimal credit risk exposure to these agents, future calendar-year subscription receipts from these agents are highly dependent on their financial condition and liquidity.
Subscription agents account for approximately 18% of total annual consolidated revenue, and no one agent accounts for more than 10% of total annual consolidated revenue.
Our book business is not dependent upon a single customer; however, the industry is concentrated in national, regional, and online book resellers. Although no book customer accounts for more than 6% of total consolidated revenue and 9% of accounts receivable at April 30, 2025, the top 10 book customers account for approximately 12% of total consolidated revenue and approximately 24% of accounts receivable at April 30, 2025.
In our Research business, a lack of integrity in our published research could adversely impact our consolidated financial position and results of operations.
We publish research authored by individuals outside our Company. The integrity of that research could be compromised due to the manipulation, misrepresentation, and misconduct by those individuals or other outsiders involved in the publishing process. This activity could adversely impact our open access publishing and article output by causing us to potentially pause publication, retract articles, or halt publication of a journal, which could adversely impact our business and consolidated financial position and results of operations.
Financial Risks
Volatility in the financial markets and a related global economic downturn could impact our ability to access global credit markets and meet our future financing needs.
Changes in global financial markets have not had, nor do we anticipate they will have, a significant impact on our liquidity. We continue to believe that we have the ability to meet our financing needs for the foreseeable future. We typically generate significant operating cash flow from ongoing operations, continue to maintain available cash and other financial assets, retain access to the capital markets, and have available committed lines of credit through our syndicated credit agreement. As market conditions change, we will continue to monitor our liquidity position. However, there can be no assurance that our liquidity or our consolidated financial position and results of operations will not be adversely affected by possible future changes in global financial markets and global economic conditions. Unprecedented market conditions, including illiquid credit markets, volatile equity markets, dramatic fluctuations in foreign currency and interest rates, and economic recession, could have a material adverse effect on our business and future results.
20
Index
Fluctuations in foreign currency exchange rates and interest rates could materially impact our consolidated financial condition and results of operations.
Non-US revenues, as well as our substantial non-US net assets, expose our consolidated results to volatility from changes in foreign currency exchange rates. The percentage of consolidated revenue for the year ended April 30, 2025, recognized in the following currencies (on an equivalent US dollar basis) were approximately: 51% US dollar, 29% British pound sterling, 11% euro, and 9% other currencies. In addition, our floating interest rate loans and borrowings are subject to risk from changes in interest rates. We may, from time to time, use derivative instruments to hedge such risks. Notwithstanding our efforts to foresee and mitigate the effects of changes in external financial market or economic conditions, we cannot predict with certainty changes in foreign currency exchange rates and interest rates, inflation, or other related factors affecting our business, consolidated financial position, and results of operations.
We may not be able to mitigate the impact of inflation and cost increases, which could have an adverse impact on our consolidated financial position and results of operations.
From time to time, we experience cost increases reflecting, in part, general inflationary factors. There is no guarantee that we can increase selling prices or reduce costs to fully mitigate the effect of inflation on our costs, which may adversely impact our consolidated financial position and results of operations.
As a result of acquisitions, we have and may record a significant amount of goodwill and other identifiable intangible assets, and we may never realize the full carrying value of these assets.
As a result of acquisitions, we recorded a significant amount of goodwill and other identifiable intangible assets. At April 30, 2025, we had $1,121.5 million of goodwill and $595.0 million of intangible assets, of which $124.5 million are indefinite-lived intangible assets, on our Consolidated Statements of Financial Position. The intangible assets are principally composed of content and publishing rights, customer relationships, brands and trademarks, and developed technology. Failure to achieve business objectives and financial projections could result in an asset impairment, which would result in a noncash charge to our consolidated results of operations. Goodwill and intangible assets with indefinite lives are tested for impairment on an annual basis and when events or changes in circumstances indicate that impairment may have occurred. Intangible assets with definite lives, which were $470.5 million at April 30, 2025, are tested for impairment only when events or changes in circumstances indicate that an impairment may have occurred. Determining whether an impairment exists can be difficult as a result of increased uncertainty and current market dynamics and requires management to make significant estimates and judgments. A noncash intangible asset impairment charge could have a material adverse effect on our consolidated financial position and results of operations. See Note 11, “Goodwill and Intangible Assets” for further information related to goodwill and intangible assets, and the impairment charges recorded in the years ended April 30, 2024 and 2023.
Changes in pension costs and related funding requirements may impact our consolidated financial position and results of operations.
We provide defined benefit pension plans for certain employees worldwide. Our Board of Directors approved amendments to the US, Canada, and UK defined benefit plans that froze the future accumulation of benefits effective June 30, 2013, December 31, 2015, and April 30, 2015, respectively. Due to the sale of CrossKnowledge on August 31, 2024, the retirement benefit pension plan was discharged as of the date of sale and we retain no further obligations for retirement benefits for CrossKnowledge. The funding requirements and costs of these plans are dependent upon various factors, including the actual return on plan assets, discount rates, plan participant population demographics, and changes in global pension regulations. Changes in these factors affect our plan funding, consolidated financial position, and results of operations.
21
Index
Legal, Regulatory, and Compliance Risks
Changes in laws, tariffs, and regulations, including regulations related to open access, could adversely impact our consolidated financial position and results of operations.
We maintain operations in Asia, Australia, Canada, Europe, South America, the Middle East, and the US. The conduct of our business, including the sourcing of content, distribution, sales, marketing, and advertising, is subject to various laws and regulations administered by governments around the world. Changes in laws, regulations, or government policies, including tax regulations and accounting standards, may adversely affect our future consolidated financial position and results of operations.
The scientific research publishing industry generates much of its revenue from paid customer subscriptions to online and print journal content. There is interest within government, academic, and library communities for such journal content to be made available for free immediately or following a period of embargo after publication, referred to as open access. For instance, certain governments and privately held funding bodies have implemented mandates that require journal articles derived from government-funded research to be made available to the public at no cost immediately or after an embargo period. Open access can be achieved in two ways: Green, which enables authors to publish articles in subscription-based journals and self–archive the author accepted version of the article for free public use immediately or after any embargo period; and Gold, which enables authors to publish their articles in journals that provide immediate free access to the final version of the article on the publisher’s website, and elsewhere under permissive licensing terms, following payment or waiver of an APC. These mandates have the potential to put pressure on subscription-based publications. If such regulations are widely implemented, our consolidated financial position and results of operations could be adversely affected.
To date, many of the governments and national research councils that have taken a position on open access have favored the Green model and have generally specified embargo periods of twelve months. The publishing community generally takes the view that this period should be sufficient to protect subscription revenues, provided that publishers’ platforms offer sufficient added value to the article. Governments in Europe have been more supportive of the Gold model, which thus far is generating incremental revenue for publishers with active open access programs. Many institutions have signed on to the business model which combines the purchasing of subscription content with the purchase of open access publishing for affiliated authors. This development removes an element of risk by fixing revenues from that market, provided that the terms, price, and rate of transition negotiated are acceptable.
Increases in income tax rates, changes in income tax laws or regulations, or unfavorable resolutions of tax matters could have a material adverse impact on our financial results.
We are subject to tax laws in the jurisdictions of the US and numerous other jurisdictions in which we conduct business. Wiley’s results of operations could be adversely affected by a change in the consolidated effective tax rate as a result of a change in a number of factors including the mix of earnings in countries with differing statutory tax rates, the result of audits of previously filed tax returns, the cost of repatriation, or changes in tax laws and regulations and the interpretations thereof in the jurisdictions where we operate.
Many jurisdictions have agreed to a statement in support of the Organization for Economic Co-operation and Development model (OECD) rules that propose a partial global profit reallocation and a global minimum tax rate of 15%. Certain countries, including European Union member states, have enacted legislation incorporating the global minimum tax with effect from 2024 while many others have indicated their intent to adopt, or have adopted, legislation effective in 2025. The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance. As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes. This increasingly complex global tax environment has in the past and could continue to increase tax uncertainty, resulting in higher compliance costs and adverse effects on our financial performance.
In addition, we are subject to potential taxes in jurisdictions where we have sales, even though we do not have a physical presence, and these potential taxes could have an impact on our consolidated financial position and results of operations. Economic and political pressures to increase tax revenues in jurisdictions in which we operate, or the adoption of new or reformed tax legislation or regulation, has made and could continue to make resolving tax disputes more difficult. Although we believe our tax estimates are reasonable, the final resolution of tax audits and any related litigation can materially differ from our historical income tax provisions and accruals, resulting in an adverse effect on our financial performance.
22
Index
A disruption or loss of data sources could limit our collection and use of certain kinds of information, which could adversely impact our communication with our customers.
Several of our businesses rely extensively upon content and data from external sources. Data is obtained from public records, governmental authorities, customers, and other information companies, including competitors. Legal regulations, such as the EU’s GDPR, relating to Internet communications, privacy and data protection, e-commerce, information governance, and use of public records, are becoming more prevalent worldwide. The disruption or loss of data sources, either because of changes in the law or because data suppliers decide not to supply them, may impose limits on our collection and use of certain kinds of information about individuals and our ability to communicate such information effectively with our customers. In addition, GDPR imposes a strict data protection compliance regime with severe penalties of up to 4% of worldwide revenue or €20 million, whichever is greater.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act (Sarbanes-Oxley Act), and the rules and regulations of the New York Stock Exchange. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are required to perform system and process evaluations and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Annual Report on Form 10-K, as required by Section 404 of the Sarbanes-Oxley Act. This may require us to incur substantial additional professional fees and internal costs to further expand our accounting and finance functions and expend significant management efforts.
We may in the future discover material weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. In addition, our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to errors or fraud will not occur, or that all control issues and instances of fraud will be detected.
If we are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements. If that were to happen, the market price of our stock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities.
General Risks
Global economic, market, public health, and geopolitical conditions or other events could negatively impact our consolidated financial positions and results of operations.
We are exposed to risks and uncertainties caused by factors beyond our control, including global economic, public health, and geopolitical conditions. These include economic weakness, softness in consumer and corporate spending, uncertainty and volatility, including the potential for a recession; a competitive labor market and evolving workforce expectations; inflation, rising interest rates; public health crisis, including pandemics; financial stability of the banking industry, and political and sociopolitical uncertainties and conflicts. The potential escalation of trade tensions between the US and China could slow down China's economy, which could impact Research Publishing, accelerate China's move towards Transformational Agreements, lead to caps on APCs and/or pressure to publish in non-US journals, and increase risks related to exchange rate fluctuations. These factors may result in declines and/or volatility in our results or stock price. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment, or continued unpredictable and unstable market conditions. Our business could also be impacted by volatility caused by geopolitical events, such as the conflict in Ukraine. In addition, the actual or perceived effects of a disease outbreak, epidemic, pandemic, or similar widespread public health concern, such as COVID-19, could also materially and adversely affect our results. The future impact that global economic, public health, and geopolitical conditions will have on our business operations and financial results is uncertain and will depend on numerous evolving factors and developments that we are not able to reliably predict or mitigate. It is also possible that these conditions may impact other risks discussed in this section.
23
Index
Changes in US and foreign government administrative policy, including the imposition of or increases in tariffs and changes to existing trade agreements, and other changes to macroeconomic conditions could have a material adverse effect on global economic conditions and our business, results of operations, and financial condition.
As a result of changes to US and foreign government administrative policy, there may be changes to existing trade agreements, greater restrictions on free trade generally, the imposition of or significant increases in tariffs on goods imported into or exported from the US, and adverse responses by foreign governments to US trade policies, among other possible changes. As the implementation of tariffs is ongoing, more tariffs may be added in the future. These tariffs could have an adverse impact on our business, results of operations, financial condition, and if we are unable to pass such price increases through to our customers, it would likely increase our cost of sales and, as a result, decrease our margins, operating income, and net income.
As of the date of this Annual Report on Form 10-K, discussions remain ongoing in respect of certain trade restrictions and tariffs on imports from Canada, China, Mexico, and Europe, as well as retaliatory tariffs enacted in response to such actions. Any of these factors could depress economic activity and restrict our access to suppliers or customers and, in turn, have a material adverse effect on the business and financial condition of such suppliers and customers or other counterparties we do business with, which in turn would negatively impact our consolidated financial position and results of operations.
The trading price of the shares of our common stock may fluctuate materially, and investors of our common stock could incur substantial losses.
Our stock price may fluctuate materially. The stock market in general has experienced significant volatility that has often been unrelated to the operating performance of companies. As a result of this volatility, investors may not be able to sell their common stock at or above the price paid for the shares. The market price for our common stock may be influenced by many factors, including:
•Actual or anticipated changes in our consolidated operating results;
•Variances between actual consolidated operating results and the expectations of securities analysts, investors, and the financial community;
•Changes in financial estimates by us or by any securities analysts who might cover our stock;
•Conditions or trends in our industry, the stock market, or the economy;
•The level of demand for our stock, the stock market price, and volume fluctuations of comparable companies;
•Announcements by us or our competitors of new product or service offerings, significant acquisitions, strategic partnerships, or divestitures;
•Announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;
•Capital commitments;
•Investors’ general perception of the Company and our business;
•Recruitment or departure of key personnel; and
•Sales of our common stock, including sales by our directors and officers or specific stockholders.
Adverse publicity could negatively impact our reputation, which could adversely affect our consolidated financial position and results of operations.
Our professional customers worldwide rely upon many of our publications to perform their jobs. It is imperative that we consistently demonstrate our ability to maintain the integrity of the information included in our publications. Adverse publicity, whether valid or not, may reduce demand for our publications and adversely affect our consolidated financial position and results of operations.
Item 1B. Unresolved Staff Comments
None.
24
Index
Item 1C. Cybersecurity
Risk Management and Strategy
Wiley is committed to maintaining robust cybersecurity practices to safeguard our operations, data, and stakeholders’ interests. We monitor our cybersecurity landscape and adapt our strategies and governance practices to mitigate risks in this rapidly evolving area.
Wiley adopted the National Institute of Standards and Technology Cybersecurity Framework (NIST-CSF) as a guide for its cybersecurity program to establish and maintain a continuous improvement process for identifying, assessing, and managing cyber risks and cyber-related threats. Informed by the NIST-CSF, we maintain a cybersecurity risk management program that is designed to identify, assess, manage, and mitigate cybersecurity risks and provides a framework for handling cybersecurity threats and incidents, including threats and incidents associated with the use of services provided by third-party service providers. To secure our technology environment, our organization leverages the latest software and security capabilities with a defense-in-depth and layered strategy. We deploy endpoint detection and response, network anomaly detection, and multi-factor authentication across most of our environment. We engage with various third-party consultants as well as utilize various threat intelligence services to assist in our oversight and to identify risks. We require employees with access to our information systems, including all corporate employees and consultants, to undertake annual data protection and cybersecurity training and ongoing phishing simulation exercises. In addition, Wiley’s controls are also monitored and tested on a continuous basis by an external third-party to assess the effectiveness of our cyber program.
Based on the information we have as of the date of this Annual Report on Form 10-K, we do not believe that any cybersecurity incident experienced by the Company has materially affected or is reasonably likely to materially affect Wiley, including our business strategy, results of operations, or financial condition. For additional information about cybersecurity risks, see Item 1A. “Risk Factors.”
Governance
Our Board is responsible for the overall oversight of our enterprise risk management.The Board receives regular updates on the key risks to the organization on a quarterly basis. The Board has delegated oversight of cybersecurity risks to the Audit Committee. The Audit Committee receives quarterly and yearly cybersecurity updates from the Company’s Chief Information & Security Officer (CISO), which includes updates on the Company’s cybersecurity policies and strategies, cyber risks and threats, the status of projects designed to continuously improve the Company’s information security systems, assessments of the Company’s security program, employee training and awareness programs, emerging threat landscape, and engagement with external cybersecurity experts and advisors, as needed.
Management’s Role
Management is responsible for day-to-day risk management activities, including identifying and assessing cybersecurity risks, establishing processes to ensure that potential cybersecurity risk exposures are monitored, implementing appropriate mitigation or remediation measures, and maintaining cybersecurity programs. Risk mitigation strategies and key performance indicators are defined, and tracked, as part of the quarterly internal reporting. The information security team consists of subject matter experts in the fields of security operations, governance risk and compliance (GRC), application security, fraud, identity and access management, and security architecture. Our security operation center (SOC) monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents through a variety of technical and operational measures and regularly reports to our CISO. Our CISO is part of the senior management team and regularly updates the Audit Committee on the company’s cybersecurity program, including cybersecurity risks, incidents, and mitigation strategies.
The information security team is led by the CISO who has 29 years of experience in business risk management and cybersecurity. The information security team has established processes and procedures that guide and enable continuous monitoring, detection, prevention, mitigation, and remediation of cybersecurity incidents. These processes are carried out using various security platforms tools, capabilities, and strategies including tests of our information security program, tabletop exercises, penetration and vulnerability testing, and other exercises to evaluate the effectiveness of our information security program and improve our security measures and planning. Incident response teams within the SOC utilize procedures that identify escalation paths when security events are identified. Incident priorities dictate escalation of events and how they are reported from an incident commander up to the executive leadership team within Wiley as well as to the Board.
25
Index
Despite our efforts, we cannot eliminate all risks from cybersecurity threats or provide assurances that we have not experienced an undetected cybersecurity incident. The threat landscape is constantly changing and will continue to as new technologies, such as AI, evolve.
Item 2. Properties
We occupy office, warehouse, and distribution facilities in various parts of the world, as listed below (excluding those locations with less than 10,000 square feet of floor area, none of which are considered material property).
Due to the increased use of virtual work arrangements and our various restructuring programs, we exited certain leased office space, subleased certain office spaces, and reduced occupancy at other facilities. In Part II, Item 8, “Financial Statements and Supplementary Data” see Note 7, “Restructuring and Related Charges,” of the Notes to Consolidated Financial Statements for details of these restructuring programs.
All of the current buildings and the equipment owned or leased are believed to be in good operating condition and are suitable for the conduct of our business.
Location Purpose Owned or Leased Approx. Sq. Ft.
United States:
New Jersey Corporate Headquarters Leased 247,000
Indiana Office Leased 42,000
Massachusetts Office Leased 26,000
North Carolina Office Leased 12,000
International:
England Distribution Centers Leased 298,000
India Distribution Centers Leased 20,000
China Offices Leased 40,000
Sri Lanka Office Leased 26,000
Jordan Office Leased 24,000
Brazil Office Leased 12,000
Greece Office Leased 11,000
Item 3. Legal Proceedings
The information set forth in Part II, Item 8, “Financial Statements and Supplementary Data” in Note 16, “Commitment and Contingencies,” of the Notes to Consolidated Financial Statements is incorporated herein by reference.
We are involved in routine litigation in the ordinary course of our business. In the opinion of management, the ultimate resolution of all pending litigation will not have a material effect upon our consolidated financial position or results of operations.
Item 4. Mine Safety Disclosures
Not applicable.
26
Index
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
Our Class A and Class B shares are listed on the New York Stock Exchange under the symbols WLY and WLYB, respectively.
On a quarterly basis, the Board of Directors considers the payment of cash dividends based upon its review of earnings, our financial position, and other relevant factors. As of May 31, 2025, the approximate number of holders of our Class A and Class B Common Stock were 667 and 42, respectively, based on the holders of record.
During the year ended April 30, 2020, our Board of Directors approved a share repurchase program of $200 million of Class A or B Common Stock. As of April 30, 2025, we had authorization from our Board of Directors to purchase up to $57.4 million that was remaining under this program.
During the fourth quarter of fiscal year 2025, we made the following purchases of Class A and Class B Common Stock under the publicly announced stock repurchase program.
(1) Average price per share excludes excise taxes payable on share repurchases.
27
Index
Performance Graph
The below graph provides an indicator of the cumulative total return to shareholders of the Company’s Class A Common Stock as compared with the cumulative total return on the Russell 2000, the Dow Jones Publishing Index, and the S&P 400 Midcap, for the period from April 30, 2020 to April 30, 2025. The Company has elected to use the Russell 2000 Index and the S&P 400 Midcap index as its broad equity market indices because it is currently included in these indices. Cumulative total return assumes $100.00 invested on April 30, 2020, and reinvestment of dividends throughout the period.
Item 6. [Reserved]
28
Index
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The information in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read together with our Consolidated Financial Statements and related notes set forth in Part II, Item 8, as well as the discussion included in Part I, Item 1, “Business,” “Cautionary Notice Regarding Forward-Looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995” and “Non-GAAP Financial Measures,” along with Part I, Item 1A, “Risk Factors,” of this Annual Report on Form 10-K. All amounts and percentages are approximate due to rounding and all dollars are in thousands, except per share amounts or where otherwise noted. When we cross-reference to a “Note,” we are referring to our “Notes to Consolidated Financial Statements,” in Part II, Item 8, “Financial Statements and Supplementary Data” unless the context indicates otherwise.
Overview
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 is a predominantly digital company with 83% of its Adjusted Revenue for the year ended April 30, 2025, generated by digital products and services. For the year ended April 30, 2025, 48% of Adjusted Revenue is recurring which includes revenue that is contractually obligated or set to recur with a high degree of certainty. See below for the reconciliation of consolidated Revenue to Adjusted Revenue.
We report financial information for the following reportable segments, as well as a Corporate category, which includes certain costs that are not allocated to the reportable segments:
•Research includes the reporting lines of Research Publishing and Research Solutions;
•Learning includes the Academic and Professional reporting lines and consists of publishing, courseware, and assessments.
Wiley also reports a Held for Sale or Sold segment, whichprimarily includes non-core businesses which were classified as held-for-sale until the date of sale, as well other businesses which were sold as described further below.
Through the Research segment, we provide peer-reviewed scientific, technical, and medical (STM) journals, content platforms, and related publishing and audience solutions to academic, corporate, and government customers, academic societies, and individual researchers. The Learning segment provides scientific, professional, and education print and digital books to researchers, professionals, and students, digital courseware for instructors and students, and assessment services to businesses and professionals.
Wiley’s business strategies are tightly aligned with consistent long-term growth trends, including ever-increasing global R&D investment, leading to growth in scientific research output and the number of institutions and researchers worldwide. These strategies include expanding our publishing program and journal portfolio to meet the global demand for peer-reviewed research, driving additional value in our subscription-based models for universities and corporations, volume-based models for open access, content licensing opportunities for applications in science and innovation, and content platform and service offerings for corporations and societies. Learning strategies include selectively scaling high-value digital content, courseware, and assessments to meet targeted opportunities in education and professional development.
29
Index
Consolidated Results of Operations
FISCAL YEAR 2025 AS COMPARED TO FISCAL YEAR 2024 SUMMARY RESULTS
SUMMARY
•US GAAP Results: Revenue of $1,677.6 million (-10% compared with the prior year due to foregone revenue from divested businesses), Operating income of $221.4 million ($+169.1 million compared with the prior year), and Diluted Earnings per Share of $1.53 (+$5.18 compared with the prior year).
•Adjusted Results at Constant Currency (excluding Held for Sale or Sold segment results): Adjusted Revenue of $1,660.2 million (+3% compared with the prior year), Adjusted Operating Income of $250.5 million (+29%, compared with the prior year), Adjusted EBITDA of $397.7 million (+8% compared with the prior year), and Adjusted EPS of $3.64 (+31% compared with the prior year).
•Net Cash Provided by Operating Activities of $202.6 million ($-5.0 million compared with the prior year), and Free Cash Flow Less Product Development Spending of $125.9 million ($+11.6 million compared with the prior year)
Revenue:
Revenue for the year ended April 30, 2025, decreased $195.4 million, or 10%, as compared with the prior year. On a constant currency basis, revenue decreased 10%as compared with the prior year. Excluding the revenues from the Held for Sale or Sold segment, Adjusted Revenue increased 3% on a constant currency basis. AI license revenue was $40 million in the year ended April 30, 2025 compared to $23 million in the prior year.
Adjusted Revenue
Below is a reconciliation of our consolidated US GAAP Revenue, net to Non-GAAP Adjusted Revenue, net:
Year EndedApril 30,
See the “Segment Operating Results” below for additional details on each segment’s revenue and Adjusted EBITDA performance.
Cost of Sales:
Cost of sales for the year ended April 30, 2025, of $431.4 million, decreased $148.3 million, or 26% as compared with the prior year. On a constant currency basis, cost of sales decreased 26% as compared with the prior year 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 decreased 1% on a constant currency basis primarily due to lower product development and inventory-related costs, partially offset by higher royalty costs.
Operating and Administrative Expenses:
Operating and administrative expenses for the year ended April 30, 2025, of $947.4 million decreased $66.1 million, or 7%, as compared with the prior year. On a constant currency basis, operating and administrative expenses decreased7% as compared with the prior year primarily reflecting lower employee related costs and, to a lesser extent, lower depreciation and amortization, partially offset by an increase in enterprise modernization costs.
30
Index
Excluding the operating and administrative expenses from the Held for Sale or Sold segment, operating and administrative expenses decreased 1% as compared with the prior year on a constant currency basis primarily due to lower depreciation and amortization and, to a lesser extent, employments costs, partially offset by an increase in enterprise modernization costs.
Impairment of Goodwill:
We recorded an impairment of goodwill in the year ended April 30, 2024, of $108.4 million. This charge is reflected in the Impairment of goodwill in the Consolidated Statements of Income (Loss).
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. University Services was adversely impacted by market conditions and headwinds for online degree programs, which led 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. Such impairment reduced the goodwill of the University Services reporting unit to zero.
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. CrossKnowledge was adversely impacted by a decline in the demand for its offerings, which resulted in lower sales and a decline in average contract value, that adversely impacted forecasted revenue growth and operating cash flows. Such impairment reduced the goodwill of the CrossKnowledge reporting unit to zero.
As a result of signing the agreement to sell Wiley Edge and the decrease in the fair value of the business which was impacted by a decline in placements in the third quarter of fiscal year 2024, 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 three months ended January 31, 2024. Such impairment reduced the goodwill of the Wiley Edge reporting unit to zero. See Note 11, “Goodwill and Intangible Assets” for details on these charges.
Restructuring and Related Charges:
We recorded restructuring and related charges in the years ended April 30, 2025 and 2024 of $25.6 million and $63.0 million, respectively. These charges are reflected in the Restructuring and related charges in the Consolidated Statements of Income (Loss).
Global Restructuring Program
Beginning in fiscal year 2023, the Company initiated the 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 reduced our real estate square footage occupancy by approximately 35%.
In the fourth quarter of fiscal year 2025, the program was further extended due to the completion of our divestitures with a focus on optimizing our cost structure, with particular emphasis on aligning our technology costs and other corporate expenses. As a result of these initiatives, this expanded program will include severance related charges, facility-related costs associated with certain properties, and other activities.
Excluding actions related to the Held for Sale or Sold segment, we anticipate to yield annualized cost savings of approximately $100 million, with approximately $80 million of that realized this fiscal year from actions taken starting in fiscal year 2024.
For the years ended April 30, 2025 and 2024, we recorded pretax restructuring charges of $29.4 million and $61.6 million, respectively, related to this program.
31
Index
See Note 7, “Restructuring and Related Charges” for more details on these charges.
Business Optimization Program
For the years ended April 30, 2025 and 2024, we recorded pretax restructuring credits of $(3.8) million and charges of $1.4 million, respectively, related to this program.
See Note 7, “Restructuring and Related Charges” for more details on these credits and charges.
For the impact of our restructuring programs on diluted earnings (loss) per share, see the section below, “Diluted Earnings (Loss) per Share (EPS).”
Amortization of Intangible Assets:
Amortization of intangible assets was $51.8 million for the year ended April 30, 2025, a decrease of $4.2 million, or 7% as compared with the prior year. On a constant currency basis, amortization of intangible assets decreased 8% as compared with the prior year primarily due to the cessation of amortization for held-for-sale assets and the completion of amortization of certain acquired intangible assets. See Note 4, “Acquisitions and Divestitures” for more details on these divestitures.
Operating Income, Adjusted Operating Income (OI) and Adjusted EBITDA:
Operating income for the year ended April 30, 2025, of $221.4 million increased $169.1 million, as compared with the prior year. On a constant currency basis, the operating income increase was consistent with the reported increase as compared with the prior year. The increase was primarily due to lower costs of sales, and the $108.4 million impairment of goodwill in the prior year and, to a lesser extent, lower operating and administrative expenses, and restructuring charges, partially offset by a decrease in revenue.
Adjusted OI on a constant currency basis increased 29% as compared with the prior year. The increase in Adjusted OI was primarily due to an increase in Adjusted Revenue and, to a lesser extent, lower operating and administrative expenses.
Adjusted EBITDA on a constant currency basis increased 8% as compared with the prior year primarily due to an increase in Adjusted Revenue, partially offset by higher operating and administrative expenses.
Adjusted OI
Below is a reconciliation of our consolidated US GAAP Operating Income to Non-GAAP Adjusted OI:
Year EndedApril 30,
Adjustments:
Impairment of goodwill — 108,449
32
Index
Adjusted EBITDA
Below is a reconciliation of our consolidated US GAAP Net Income (Loss) to Non-GAAP EBITDA and Adjusted EBITDA:
Year EndedApril 30,
Impairment of goodwill — 108,449
Net foreign exchange transaction losses 8,142 2,959
Other (income) expense, net (5,498) 3,957
Held for Sale or Sold segment Adjusted EBITDA (1) 3,578 (32,148)
Interest Expense:
Interest expense for the year ended April 30, 2025, was $52.5 million compared with the prior year of $49.0 million. This increase was primarily due to a higher weighted average effective interest rate on borrowings.
Foreign Exchange Transaction (Losses):
Foreign exchange transaction losses were $(8.1) million for the year ended April 30, 2025, and were primarily due to losses on our intercompany accounts receivable and payable balances and, to a lesser extent, losses on our foreign currency denominated 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 the year ended April 30, 2025, we wrote off an additional net gain of $1.4 million in cumulative translation adjustments from our Russian entity which was formally liquidated in the fourth quarter of fiscal year 2025.
Foreign exchange transaction losses were $(3.0) million for the year ended April 30, 2024, and 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 year ended April 30, 2024, we wrote off an additional net gain of $1.0 million in cumulative translation adjustments from our Russian entity.
33
Index
Net Loss on Sale of Businesses, Assets, and Impairment Charges Related to Assets Held-for-Sale:
For the years ended April 30, 2025 and 2024, we recorded pretax loss on sale of businesses, assets, and impairment charges related to assets held-for-sale as follows:
Year EndedApril 30,
Sale of assets (149) —
These charges are reflected in Net (loss) gain on sale of businesses, assets, and impairment charges related to assets held-for-sale on our Consolidated Statements of Income (Loss).
On August 31, 2024, we completed the sale of CrossKnowledge which was included in our Held for Sale or Sold segment. The pretax loss on sale was $51.3 million after accounting for the assets sold, liabilities transferred upon sale, transaction costs, and the write-off of cumulative translation adjustments in earnings. In connection with the held-for-sale classification prior to the sale, we recognized cumulative impairment charges of $51.0 million on the remeasurement of the disposal group at the lower of carrying value or fair value less costs to sell, which included $55.4 million recognized in fiscal year 2024. Upon the completion of the sale, we recognized a net gain of $4.1 million in the year ended April 30, 2025, primarily due to subsequent changes in the fair value less costs to sell, as well as changes in the carrying amount of the disposal group.
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 which sold on August 31, 2024. The pretax loss on sale was $34.3 million after accounting for the assets sold, liabilities transferred upon sale, transaction costs, and the write-off of cumulative translation adjustments in earnings. In connection with the held-for-sale classification, during fiscal year 2024, we recognized cumulative impairment charges of $19.4 million on the remeasurement of the disposal group at the lower of carrying value or fair value less costs to sell. Upon the completion of the sale, we recognized a net loss of $14.9 million in the year ended April 30, 2025, primarily due to subsequent changes in the fair value less costs to sell including reducing the fair value of the contingent consideration in the form of an earnout from $15.0 million to zero in the third quarter of fiscal year 2025, partially offset by the sale of the India operations. See Note 4, "Acquisitions and Divestitures" for further details.
On January 1, 2024, we completed the sale of University Services, which was included in our Held for Sale or Sold segment. On June 5, 2025, Wiley entered into an agreement with Metis Aggregator L.P. and Vistria AP Aggregator, LLC to sell the Seller Note, the fiscal year 2026 University Services Earnout, and the TVG Investment, and agreed with Upper Holdings and Academic Partnerships on the fiscal year 2025 University Services Earnout for total cash consideration of $119.5 million (Sale Agreement), which was fully paid in June 2025. As a result of this Sale Agreement, all amounts due to Wiley in accordance with the University Services Agreement have been settled. In the year ended April 30, 2025, due to the process of selling these assets, as well as third-party customer consents, working capital adjustments, and changes in the costs to sell, we recognized an additional net loss on sale and impairments of assets of $12.6 million.
In the year ended April 30, 2025, 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 of $0.1 million due to a selling price adjustment for cash received after the closing.
In the year ended April 30, 2025, we sold a facility which was reflected in Technology, property, and equipment, net in our Consolidated Statements of Financial Position which resulted in a pretax loss on sale of $0.2 million.
34
Index
In the year ended April 30, 2024, we recorded a held-for-sale pretax impairment of $74.8 million which includes $19.4 million for Wiley Edge and $55.4 million for CrossKnowledge. The pretax loss on the sale of University Services and Tuition Manager was $107.0 million and $1.5 million, respectively.
See Note 4, “Acquisitions and Divestitures” for more details on these divestitures.
Other Income (Expense), Net:
Other income, net was $5.5 million for the year ended April 30, 2025 compared with the prior year Other (expense), net of $(4.0) million, an increase of $9.5 million. This change was primarily due to an increase in interest income related to the seller notes as a result of the sale of University Services and Wiley Edge. See Note 4, “Acquisitions and Divestitures” for more details on these divestitures.
Provision for Income Taxes:
Below is a reconciliation of our US GAAP Income (Loss) Before Taxes to Non-GAAP Adjusted Income Before Taxes:
Year EndedApril 30,
Pretax Impact of Adjustments:
Impairment of goodwill — 108,449
Amortization of acquired intangible assets 51,864 57,874
Held for Sale or Sold segment Adjusted Income Before Taxes (1) 3,578 (30,661)
35
Index
Below is a reconciliation of our US GAAP Income Tax Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate:
Year EndedApril 30,
Income Tax Impact of Adjustments (1):
Impairment of goodwill — 2,953
Restructuring and related charges 5,947 15,662
Amortization of acquired intangible assets 10,231 20,127
Held for Sale or Sold segment Adjusted Tax Provision (2) 807 (7,140)
Income Tax Adjustments
Impact of change in certain US state tax rates in 2025 (4) (117) —
Non-GAAP Adjusted Income Tax Provision $ 53,115 $ 42,115
US GAAP Effective Tax Rate 41.1 % (7.1) %
Non-GAAP Adjusted Effective Tax Rate 21.0 % 21.4 %
The Company's effective tax rate for the year ended April 30, 2025, was primarily driven by the impact of the US valuation allowance, the rates of tax imposed on income earned in foreign jurisdictions, and state taxes.
In fiscal year 2024, due to temporary differences in the US, our deferred taxes reversed from a net deferred tax liability position to a net deferred tax asset position. Due to losses in the US resulting from impairments, restructuring, and acceleration of amortization expense on capitalized software, we concluded it was more-likely-than-not that all or a portion of our deferred tax asset may not be realized. As a result, we established a valuation allowance of $30.2 million. During fiscal year 2025 we increased this valuation allowance by $26.0 million, because of an increase in the US net deferred tax asset attributable primarily to interest expense disallowance and the capitalization of R&D expenses.
Excluding the restructuring and related charges, impact of valuation allowance, and other adjustments noted in the table above, the Non-GAAP Adjusted Effective Tax Rate for the year ended April 30, 2025, was 21.0%. The Non-GAAP Adjusted Effective Tax Rate for the year ended April 30, 2024, was 21.4%. The decrease in the Non-GAAP Adjusted Effective Tax Rate before these items was primarily due to the mix of earnings by jurisdiction for the year ended April 30, 2025.
36
Index
Diluted Earnings (Loss) Per Share (EPS):
EPS for the year ended April 30, 2025, was $1.53 per share compared to a loss of $(3.65) per share in the prior year. This increase was primarily due to an increase in operating income, a decrease in the pretax net loss on sale of businesses, assets, and impairment charges related to assets held-for-sale, partially offset by an increase in the provision for income taxes in the year ended April 30, 2025.
Below is a reconciliation of our US GAAP Earnings (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, “Provision for Income Taxes.”
Year EndedApril 30,
US GAAP Earnings (Loss) Per Share $ 1.53 $ (3.65)
Adjustments:
Impairment of goodwill — 1.90
Restructuring and related charges 0.36 0.85
Amortization of acquired intangible assets 0.76 0.68
Held for Sale or Sold segment Adjusted Net Loss (Income) (1) 0.05 (0.42)
Income tax adjustments 0.48 0.54
Non-GAAP Adjusted EPS $ 3.64 $ 2.78
On a constant currency basis, Adjusted EPS increased 31% primarily due to an increase in Adjusted Operating Income and, to a lesser extent, an increase in interest income.
37
Index
SEGMENT OPERATING RESULTS:
Revenue:
Adjusted EBITDA Margin 32.1 % 31.8 %
Revenue:
Research revenue for the year ended April 30, 2025, increased $32.8 million, or 3%, as compared with the prior year. On a constant currency basis, revenue increased 3% as compared with the prior year primarily due to an increase in author-funded open access, institutional models, AI licensing revenue and, to a lesser extent, Research Solutions, partially offset by a decrease in ancillary and print products. The increase in Research Solutions was due to an increase in databases, and content solutions for corporations, partially offset by a decrease in recruitment. Open access article output growth was approximately 16% as compared with the prior year. Research AI licensing revenue for the year ended April 30, 2025 was approximately $11 million.
Adjusted EBITDA:
On a constant currency basis, Adjusted EBITDA increased 5% as compared with the prior year. This increase was primarily due to higher revenue, partially offset by higher employment related costs.
38
Index
Revenue:
Adjusted EBITDA Margin 37.4 % 34.9 %
Revenue:
Learning revenue for the year ended April 30, 2025, increased $10.0 million, or 2%, as compared with the prior year. On a constant currency basis, revenue increased 2% as compared with the prior year primarily due to an increase in licensing revenue, including AI revenue, and growth in Academic from steady market conditions, notably student enrollment, the shift to inclusive access, and growth in digital content and courseware, partially offset by a decrease in Academic print book sales and retail channel softness in Professional. Learning AI licensing revenue for the year end April 30, 2025 was $29 million compared to $23 million in the prior year due to demand for Academic and Professional backlisted content.
Adjusted EBITDA:
On a constant currency basis, Adjusted EBITDA increased 9% as compared with the prior year. This increase was primarily due to higher revenue and, to a lesser extent, a decrease in employee costs as a result of recent restructuring actions, and lower technology costs.
39
Index
Amortization of Intangibles — 2,004 # #
Depreciation and Amortization — 3,437 # #
Adjusted EBITDA Margin (20.6) % 12.6 %
# Not meaningful
Revenue:
Held for Sale or Sold revenue for the year ended April 30, 2025, decreased $238.2 million, or 93%, as compared with the prior year on a reported and constant currency basis as compared with the prior year. This was primarily due to the sale of University Services on January 1, 2024, Wiley Edge on May 31, 2024, with the exception of its India operations which sold on August 31, 2024, and CrossKnowledge on August 31, 2024.
Adjusted EBITDA:
On a constant currency basis, Adjusted EBITDA decreased $35.7 million as compared with the prior year. This decrease was primarily due to the sale of the University Services, Wiley Edge, and CrossKnowledge businesses.
On a constant currency basis, adjusted corporate expenses of $166.0 million on an Adjusted EBITDA basis increased 2% as compared with the prior year. This was primarily due to an increase in enterprise modernization costs.
40
Index
FISCAL YEAR 2024 AS COMPARED TO FISCAL YEAR 2023 SUMMARY RESULTS
Discussions of our results of operations for the year ended April 30, 2024, compared to April 30, 2023, have been omitted under this item, but may be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended April 30, 2024, which was filed with the SEC on June 26, 2024.
LIQUIDITY AND CAPITAL RESOURCES:
Principal Sources of Liquidity
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 and share repurchases. Other discretionary uses of cash flow include investments and acquisitions to complement and grow 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.
As of April 30, 2025, we had cash and cash equivalents of $85.9 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 may be required to pay taxes in various US state and local jurisdictions and withholding or similar taxes in applicable non-US jurisdictions in the periods in which such repatriation occurs. Accordingly, as of April 30, 2025, we have recorded a deferred tax liability of approximately $2.2 million related to the estimated taxes that would be incurred upon repatriating certain non-US earnings to the US.
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 14, “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.
As of April 30, 2025, we had approximately $799.4 million of debt outstanding, net of unamortized issuance costs of $0.4 million, and approximately $500.7 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 April 30, 2025.
Contractual Obligations and Commercial Commitments
A summary of contractual obligations and commercial commitments, excluding unrecognized tax benefits further described in Note 13, “Income Taxes,” of the Notes to Consolidated Financial Statements, as of April 30, 2025, is as follows:
41
Index
Payments Due by Period(in millions)
Total WithinYear 1 2–3Years 4–5Years After 5Years
(1) Total debt is exclusive of unamortized issuance costs of $0.4 million.
Analysis of Historical Cash Flow
The following table shows the changes in our Consolidated Statements of Cash Flows:
Years Ended April 30,
Net cash provided by operating activities $ 202,591 $ 207,638
Net cash used in investing activities (94,018) (106,643)
Cash flow from operations is seasonally a use of cash in the first half of Wiley’s fiscal year principally due to the timing of collections for annual Journal Subscriptions and Transformational Agreements, which typically occurs in the beginning of the second half of our fiscal year.
Free cash flow less product development spending helps assess our ability, over the long term, to create value for our shareholders, as it represents cash available to repay debt, pay common dividends, and fund share repurchases, and acquisitions. Below are the details of Free cash flow less product development spending.
Free Cash Flow Less Product Development Spending:
Years Ended April 30,
Net cash provided by operating activities $ 202,591 $ 207,638
Less: Additions to technology, property and equipment (61,473) (76,080)
Less: Product development spending (15,228) (17,262)
Free cash flow less product development spending $ 125,890 $ 114,296
42
Index
Net Cash Provided By Operating Activities
2025 Compared to 2024
The following is a summary of the $5.0 million change in Net cash provided by operating activities for the year ended April 30, 2025, as compared with the year ended April 30, 2024 (amounts in millions).
Net cash provided by operating activities – Year ended April 30, 2024 $ 207.6
Working capital changes:
Accounts receivable, net and contract liabilities 11.3
Accounts payable and accrued royalties 46.6
Changes in other assets and liabilities (44.2)
Net cash provided by operating activities – Year ended April 30, 2025 $ 202.6
The favorable change in accounts receivable, net and contract liabilities, was primarily due to the timing of collections and billings to customers.
The favorable change in accounts payable and accrued royalties was due to the timing of payments.
The unfavorable changes in other assets and liabilities noted in the table above was primarily due to higher employee related costs which was due to higher annual incentive compensation paid in fiscal year 2025 related to fiscal year 2024 performance, and higher costs related to cloud computing arrangements associated with targeted enterprise modernization work in fiscal year 2025. These cloud computing costs are capitalizable and amortized but included in cash flow from operations rather than cash flow from investing activities. These factors were partially offset by lower restructuring payments in fiscal year 2025.
Our negative working capital (current assets less current liabilities) was $381.0 million and $419.2 million as of April 30, 2025, and April 30, 2024, respectively. The primary driver of the negative working capital is the benefit realized from unearned contract liabilities related to subscriptions for which cash has been collected in advance. The contract liabilities will be recognized as revenue when the products are shipped or made available online to the customers over the term of the subscription. Current liabilities as of April 30, 2025, and as of April 30, 2024 include contract liabilities of $462.7 million and $483.8 million, respectively, primarily related to deferred subscription revenue for which cash was collected in advance.
Cash collected in advance for subscriptions is used by us for a number of purposes, including funding operations, capital expenditures, acquisitions, debt repayments, dividend payments, and share repurchases.
Net Cash Used In Investing Activities
2025 Compared to 2024
Net cash used in investing activities in the year ended April 30, 2025, was $94.0 million compared to $106.6 million in the prior year. The decrease in cash used in investing activities was primarily due to $14.6 million of lower additions for technology, property, and equipment in fiscal year 2025, partially offset by higher net cash transferred in fiscal year 2025 related to the sale of businesses and assets. See Note 4, “Acquisitions and Divestitures” for more information related to the divestitures that occurred in the years ended April 30, 2025 and 2024.
43
Index
Net Cash Used In Financing Activities
2025 Compared to 2024
Net cash used in financing activities in the year ended April 30, 2025, was $125.3 million compared to $107.2 million in the year ended April 30, 2024. This increase in cash used was primarily due to lower net debt borrowings of $14.3 million in fiscal year 2025, and a $15.4 million increase in cash used for purchases of treasury shares in fiscal year 2025, partially offset by a $9.1 million change in book overdrafts.
In the years ended April 30, 2025 and 2024, our quarterly dividend to shareholders was $1.41 and $1.40 per share annualized, respectively.
During the year ended April 30, 2020, our Board of Directors approved an additional share repurchase program of $200 million of Class A or B Common Stock. As of April 30, 2025, we had authorization from our Board of Directors to purchase up to $57.4 million that was remaining under this program. During the years ended April 30, 2025 and 2024, we purchased $60.0 million and $45.1 million, respectively, under this program.
The following table summarizes the shares repurchased of Class A and B Common Stock (shares in thousands):
Years Ended April 30,
Shares repurchased – Class B 173 3
Average Price – Class A and Class B $ 44.16 $ 34.71
The total amount purchased and the average price per share excludes excise taxes payable on share repurchases and may differ from the share repurchases reflected in Purchases of treasury shares in our Consolidated Statements of Cash Flows.
2024 Compared to 2023
A discussion of changes in our cash flows for the year ended April 30, 2024, compared to the year ended April 30, 2023, has been omitted under this item, but may be found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in our Annual Report on Form 10-K for the year ended April 30, 2024, which was filed with the SEC on June 26, 2024.
44
Index
RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS, ACCOUNTING GUIDANCE, AND DISCLOSURE REQUIREMENTS
We are subject to numerous recently issued statements of financial accounting standards, accounting guidance, and disclosure requirements. The information set forth in Part II, Item 8, “Financial Statements and Supplementary Data” in Note 2, “Summary of Significant Accounting Policies, Recently Issued and Recently Adopted Accounting Standards,” of the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K is incorporated by reference and describes these new accounting standards.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES:
The preparation of our Consolidated Financial Statements and related disclosures in conformity with US GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the financial statements, and revenue and expenses during the reporting period. These estimates include, among other items, sales return reserves, allocation of acquisition purchase price to assets acquired and liabilities assumed, assets and liabilities held-for-sale, goodwill and indefinite-lived intangible assets, intangible assets with definite lives and other long-lived assets, and retirement plans. We review these estimates and assumptions periodically using historical experience and other factors and reflect the effects of any revisions on the Consolidated Financial Statements in the period we determine any revisions to be necessary. Actual results could differ from those estimates, which could affect the reported results. In Part II, Item 8, “Financial Statements and Supplementary Data” in Note 2, “Summary of Significant Accounting Policies, Recently Issued and Recently Adopted Accounting Standards” of the Notes to Consolidated Financial Statements includes a summary of the significant accounting policies and methods used in preparation of our Consolidated Financial Statements. Set forth below is a discussion of our more critical accounting policies and methods.
Revenue Recognition:
In Part II, Item 8, “Financial Statements and Supplementary Data,” see Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards” in the section "Summary of Significant Accounting Policies”, and see Note 3, “Revenue Recognition, Contracts with Customers,” of the Notes to Consolidated Financial Statements for details of our revenue recognition policy.
Sales Return Reserves:
In Part II, Item 8, “Financial Statements and Supplementary Data,” see Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards” in the section “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for details of our sales return reserves.
A one percent change in the estimated sales return rate could affect net income by approximately $2.2 million. A change in the pattern or trends in returns could also affect the estimated allowance.
Allocation of Acquisition Purchase Price to Assets Acquired and Liabilities Assumed:
In connection with acquisitions, we allocate the cost of the acquisition to the assets acquired and the liabilities assumed based on the estimates of fair value for such items, including intangible assets. The excess of the purchase consideration over the fair value of assets acquired and liabilities assumed is recorded as goodwill. The determination of the acquisition date fair value of the assets acquired, and liabilities assumed, requires us to make significant estimates and assumptions, such as, if applicable, forecasted revenue growth rates and operating cash flows, royalty rates, customer attrition rates, obsolescence rates of developed technology, and discount rates. We may use a third-party valuation consultant to assist in the determination of such estimates.
In Part II, Item 8, “Financial Statements and Supplementary Data,” see Note 4, “Acquisitions and Divestitures” of the Notes to Consolidated Financial Statements for details of our acquisitions.
45
Index
Assets and Liabilities Held-for-Sale:
In response to changes in market conditions and our ongoing initiatives to simplify our portfolio to drive sustained performance improvement, we may also strategically realign our resources and consider disposing of certain businesses. We classify assets as held-for-sale when management commits to a plan to sell, the assets are available for immediate sale in their present condition, we have initiated an active program to find a buyer, and the sale is probable within one year. Assets must be actively marketed at a reasonable price, and the plan should indicate completion is likely without significant changes.
The disposal group that is classified as held-for-sale is initially measured at the lower of its carrying value or fair value less any costs to sell. The determination of the fair value less costs to sell is based on indicative sales values and may require us to make judgments on significant estimates and assumptions regarding forecasted information such as revenue growth, gross profit, EBITDA, depreciation and amortization, capital expenditures, and discount rates. We may use a third-party valuation consultant to assist in the determination of such estimates. The fair value of a disposal group less any costs to sell is assessed each reporting period it remains classified as held-for-sale and any subsequent change is reported as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held-for-sale.
The disposal group's fair value was based on the selling price components in the purchase agreements for University Services and Wiley Edge, which included earnouts. These earnouts were valued using a Monte Carlo simulation and classified as Level 3 in the ASC Topic 820 fair value hierarchy. This method considers the terms of the purchase agreements and our best estimates of forecasted revenue or gross profit for the earnout periods. It simulates a range of possible outcomes based on estimated volatility. The fair value was calculated as the present value of the average potential payouts, using a risk-adjusted discount rate. The earnout amount may change based on final results.
In Part II, Item 8, “Financial Statements and Supplementary Data,” see Note 4, “Acquisitions and Divestitures” of the Notes to Consolidated Financial Statements for details of our divestitures.
Goodwill and Indefinite-lived Intangible Assets:
Goodwill is reviewed for possible impairment at least annually on a reporting unit level during the fourth quarter of each year. Our annual impairment assessment date is February 1. A review of goodwill may be initiated before or after conducting the annual analysis if events or changes in circumstances indicate the carrying value of goodwill may no longer be recoverable.
A reporting unit is the operating segment unless, at businesses one level below that operating segment – the “component” level, discrete financial information is prepared and regularly reviewed by management, and the component has economic characteristics that are different from the economic characteristics of the other components of the operating segment, in which case the component is the reporting unit.
As part of the annual impairment test, we may elect to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. In a qualitative assessment, we would consider the macroeconomic conditions, including any deterioration of general conditions and industry and market conditions, including any deterioration in the environment where the reporting unit operates, increased competition, changes in the products/services and regulatory and political developments, cost of doing business, overall financial performance, including any declining cash flows and performance in relation to planned revenues and earnings in past periods, other relevant reporting unit specific facts, such as changes in management or key personnel or pending litigation, and events affecting the reporting unit, including changes in the carrying value of net assets.
If the results of our qualitative assessment indicate it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we are required to perform a quantitative assessment to determine the fair value of the reporting unit.
Alternatively, if an optional qualitative goodwill impairment assessment is not performed, we may perform a quantitative assessment. Under the quantitative assessment, we compare the fair value of each reporting unit to its carrying value, including the goodwill allocated to the reporting unit. If the fair value of the reporting unit exceeded its carrying value, there would be no indication of impairment. If the fair value of the reporting unit were less than the carrying value, an impairment charge would be recognized for the difference.
46
Index
We derive an estimate of fair values for each of our reporting units using a combination of an income approach and a market approach. Absent an indication of fair value from a potential buyer or similar specific transactions, we believe that the use of these methods provides a reasonable estimate of a reporting unit’s fair value.
Fair value computed by these methods is arrived at using a number of key assumptions including forecasted revenues and related growth rates, forecasted operating cash flows, the discount rate, and the selection of relevant market multiples of comparable publicly-traded companies with similar characteristics to the reporting unit. There are inherent uncertainties, however, related to these factors and to our judgment in applying them to this analysis. We believe that the combination of these methods provides a reasonable approach to estimate the fair value of our reporting units.
Income Approach Used to Determine Fair Values
The income approach is based upon the present value of expected cash flows. Expected cash flows are converted to present value using factors that consider the timing and risk of the future cash flows. The estimate of cash flows used is prepared on an unleveraged debt-free basis. We use a discount rate that reflects a market-derived weighted average cost of capital. We believe that this approach is appropriate because it provides a fair value estimate based upon the reporting unit’s expected long-term operating and cash flow performance. The projections are based upon our best estimates of forecasted economic and market conditions over the related period including growth rates, expected changes in forecasted operating cash flows, and cash expenditures. Other estimates and assumptions include terminal value long-term growth rates, provisions for income taxes, future capital expenditures, and changes in future cashless, debt-free working capital. Changes in any of these assumptions could materially impact the estimated fair value of our reporting units. Our forecasts take into account the near and long-term expected business performance, considering the long-term market conditions and business trends within the reporting units. However, changes in these assumptions may impact our ability to recover the allocated goodwill in the future. For further discussion of the factors that could result in a change in our assumptions, see “Risk Factors” in this Annual Report on Form 10-K.
Market Approach Used to Determine Fair Values
The market approach estimates the fair value of the reporting unit by applying multiples of operating performance measures to the reporting unit’s operating performance (the Guideline Public Company Method). These multiples are derived from comparable publicly-traded companies with similar investment characteristics to the reporting unit, and such comparable data are reviewed and updated as needed annually. We believe that this approach is appropriate because it provides a fair value estimate using multiples from entities with operations and economic characteristics comparable to our reporting units and Wiley.
The key estimates and assumptions that are used to determine fair value under this market approach include current and forward 12-month revenue and EBITDA results, as applicable, and the selection of the relevant multiples to be applied. Under the Guideline Public Company Method, a control premium, or an amount that a buyer is usually willing to pay over the current market price of a publicly-traded company is considered and applied to the calculated equity values to adjust the public trading value upward for a 100% ownership interest, where applicable.
In order to assess the reasonableness of the calculated fair values of our reporting units, we also compare the sum of the reporting units’ fair values to our market capitalization and calculate an implied control premium (the excess of the sum of the reporting units’ fair values over the market capitalization). We evaluate the control premium by comparing it to control premiums of recent comparable market transactions. If the implied control premium is not reasonable in light of these recent transactions, we will reevaluate our fair value estimates of the reporting units by adjusting the discount rates and/or other assumptions.
If our assumptions and related estimates change in the future, or if we change our reporting unit structure or other events and circumstances change (such as a sustained decrease in the price of our common stock, a decline in current market multiples, a significant adverse change in legal factors or business climates, an adverse action or assessment by a regulator, heightened competition, strategic decisions made in response to economic or competitive conditions, or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of), we may be required to record impairment charges in future periods. Any impairment charges that we may take in the future could be material to our consolidated results of operations and financial condition.
47
Index
Fiscal Year 2025 and 2024 Annual Goodwill Impairment Test
As of February 1, 2025 and 2024, we completed a qualitative assessment for our annual goodwill impairment test for our reporting units within Research and Learning segments. This assessment included consideration of key factors including macroeconomic conditions, industry and market considerations, cost factors, financial performance, and other relevant entity and reporting unit-specific events. Based on our qualitative assessment, we determined it was not more likely than not that the fair value of any reporting unit was less than its carrying amount. As such, it was not necessary to perform a quantitative test. There have been no significant events or circumstances affecting the valuation of goodwill subsequent to the qualitative assessment performed as of February 1, 2025.
Fiscal Year 2024 Segment Realignment Goodwill Impairment Test
In the first quarter of fiscal year 2024, we began to operate under a new organizational structure, which resulted in a change in our composition of our reportable segments, which resulted in a change in our reporting units. The Learning reportable segment includes two reporting units, Academic and Professional, and the Held for Sale or Sold reportable segment includes three reporting units, University Services, Wiley Edge, and CrossKnowledge.No changes were made to the Research reportable segment. As a result of this realignment, we are required to test goodwill for impairment immediately before and after the realignment. Since there were no changes to the Research reportable segment, no interim impairment test of the Research reportable segment goodwill was required.
Goodwill Impairment Before Realignment
Prior to the realignment, we concluded that the fair value of the Academic Publishing, Talent Development (which includes Wiley Edge) and Professional Learning reporting units were above their carrying values. Therefore, there was no indication of impairment. The carrying value of the University Services reporting unit was above its fair value which resulted in a pretax noncash goodwill impairment of $11.4 million. Such impairment reduced the goodwill of the University Services reporting unit to zero. This charge is reflected in Impairment of goodwill in the Consolidated Statements of Income (Loss).
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.
The key assumptions underlying the estimate of the fair value of the University Services reporting unit included the following:
•Future cash flow assumptions – the projections for future cash flows utilized in the model were derived from historical experience and assumptions regarding future growth and profitability of the reporting unit. These projections include forecasted revenues and related growth rates, and forecasted operating cash flows, and are consistent with our operating budget and strategic plan. We applied a compounded annual growth rate of approximately 4.6% for forecasted sales in our projected cash flows through fiscal year 2031. Beyond the forecasted period, a terminal value was determined using a perpetuity growth rate of 3.0% to reflect our estimate of stable and perpetual growth.
•Discount rate based on the weighted average cost of capital (WACC) – the WACC is the rate used to discount the reporting unit’s estimated future cash flows. The WACC is calculated based on a proportionate weighting of the cost of debt and equity. The cost of equity is based on a capital asset pricing model and includes a company-specific risk premium to capture the perceived risks and uncertainties associated with the reporting unit’s projected cash flows. The cost of debt component is calculated based on the after-tax cost of debt of Moody’s Baa-rated corporate bonds. The cost of debt and equity is weighted based on the debt to market capitalization ratio of publicly traded companies with similarities to the University Services reporting unit. The WACC applied to the University Services reporting unit was 17%.
•Valuation Multiples – for the Guideline Public Company Method, we applied relevant current and forward 12-month EBITDA multiples based on an evaluation of multiples of publicly-traded companies with similarities to the University Services reporting unit. The multiples applied ranged from 4.5x to 6.0x EBITDA.
48
Index
Prior to performing the goodwill impairment test for University Services, we also evaluated the recoverability of long-lived assets of the reporting unit. The carrying value of the long-lived assets that were tested for impairment was approximately $231.0 million. When indicators of impairment are present, we test definite lived and long-lived assets for recoverability by comparing the carrying value of an asset group to an estimate of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset group. We considered the lower-than-expected revenue and forecasted operating cash flows over a sustained period of time, and downward revisions to our cash flow forecasts for this reporting unit to be indicators of impairment for their long-lived assets. Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset group of the University Services reporting unit exceeded the carrying value. Therefore, there was no impairment.
Goodwill Impairment After Realignment
After the realignment, we concluded that the fair value of the Academic, Professional, and Wiley Edge reporting units was above their carrying values. Therefore, there was no indication of impairment. As noted above, the goodwill of the University Services reporting unit was zero and no further testing of goodwill for impairment was required. The carrying value of the CrossKnowledge reporting unit was above its fair value, which resulted in a pretax noncash goodwill impairment of $15.3 million. This charge is reflected in Impairment of goodwill in the Consolidated Statements of Income (Loss).
CrossKnowledge was adversely impacted by a decline in the demand for its offerings, which resulted in lower sales and a decline in average contract value that adversely impacted forecasted revenue growth and operating cash flows.
The key assumptions underlying the estimate of the fair value of the CrossKnowledge reporting unit included the following:
•Future cash flow assumptions – the projections for future cash flows utilized in the model were derived from historical experience and assumptions regarding future growth and profitability of the reporting unit. These projections include forecasted revenues and related growth rates, and forecasted operating cash flows, and are consistent with our operating budget and strategic plan. We applied a compounded annual growth rate of approximately 3.3% for forecasted sales in our projected cash flows through fiscal year 2032. Beyond the forecasted period, a terminal value was determined using a perpetuity growth rate of 2.0% to reflect our estimate of stable and perpetual growth.
•Discount rate based on the WACC – the WACC is the rate used to discount the reporting unit’s estimated future cash flows. The WACC is calculated based on a proportionate weighting of the cost of debt and equity. The cost of equity is based on a capital asset pricing model and includes a company-specific risk premium to capture the perceived risks and uncertainties associated with the reporting unit’s projected cash flows. The cost of debt component is calculated based on the after-tax cost of debt of Moody’s Baa-rated corporate bonds. The cost of debt and equity is weighted based on the debt to market capitalization ratio of publicly traded companies with similarities to the CrossKnowledge reporting unit. The WACC applied to the CrossKnowledge reporting unit was 16%.
•Valuation Multiples – for the Guideline Public Company Method, we applied relevant current and forward 12-month EBITDA multiples based on an evaluation of multiples of publicly-traded companies with similarities to the CrossKnowledge reporting unit. The multiples applied ranged from 6.0x to 7.0x EBITDA.
Prior to performing the goodwill impairment test for CrossKnowledge, we also evaluated the recoverability of long-lived assets of the reporting unit. The carrying value of the long-lived assets that were tested for impairment was approximately $50.2 million. When indicators of impairment are present, we test definite lived and long-lived assets for recoverability by comparing the carrying value of an asset group to an estimate of the future undiscounted cash flows expected to result from the use and eventual disposition of the asset group. We considered the lower-than-expected revenue and forecasted operating cash flows over a sustained period of time, and downward revisions to our cash flow forecasts for this reporting unit to be indicators of impairment for their long-lived assets. Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset group of the CrossKnowledge reporting unit exceeded the carrying value. Therefore, there was no impairment.
49
Index
Wiley Edge Fiscal Year 2024 Interim Impairment Test
As a result of signing the stock and asset purchase agreement (Edge Agreement) with Inspirit Vulcan Bidco Limited, a private limited company incorporated in England & Wales (Inspirit) and the decrease in the fair value of the business which was impacted by a decline in placements in the third quarter of fiscal year 2024, we tested the goodwill of the Wiley Edge reporting unit for impairment. We estimated the fair value of the reporting unit based on the terms and conditions in the Edge Agreement at that time which reflected a selling price that included $10.0 million in cash, $18.3 million in the form of a loan, a fair value estimate for an earnout, and an estimate for a working capital adjustment.
We concluded that the carrying value of the Wiley Edge reporting unit was above its fair value which resulted in a pretax noncash goodwill impairment of approximately $81.7 million in the three months ended January 31, 2024. Such impairment reduced the goodwill of the Wiley Edge reporting unit to zero. This charge is reflected in Impairment of goodwill in the Consolidated Statements of Income (Loss). The impairment was due to subsequent changes in the fair value resulting from the continued progression of the selling process, indications of changes in the consideration for the business, and a decline in placements in the third quarter of fiscal year 2024, as well as changes in the carrying amounts of the disposal group.
As described further above in Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the caption “Critical Accounting Policies and Estimates - Assets and Liabilities Held-for-Sale” of this Annual Report on Form 10-K, the fair value of the earnout was based on a Monte Carlo simulation.
Prior to performing the goodwill impairment test for Wiley Edge, we also evaluated the recoverability of long-lived assets of the reporting unit. The carrying value of the long-lived assets that were tested for impairment was approximately $141.5 million. We considered the changes in the fair value of the consideration for the business due to the continued progression of the selling process to be an indicator of impairment for its long-lived assets. Based on the results of the recoverability test, we determined that the undiscounted cash flows of the asset group of the Wiley Edge reporting unit exceeded the carrying value. Therefore, there was no impairment.
Fiscal Year 2025 and 2024 Annual Indefinite-lived Intangible Impairment Test
We also review our indefinite-lived intangible assets for impairment annually, which consists of brands and trademarks and certain acquired publishing rights.
For fiscal year 2025 and 2024, we performed a qualitative assessment for our annual indefinite-lived intangible assets impairment test. This assessment included consideration of key factors including macroeconomic conditions, industry and market considerations, cost factors, financial performance, and other relevant entity and reporting unit-specific events. Based on our qualitative assessment, we determined it was not more likely than not that the fair value of any indefinite-lived intangible asset was less than its carrying amount. As such, it was not necessary to perform a quantitative test.
Intangible Assets with Definite Lives and Other Long-Lived Assets:
See Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards,” in the section “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for details of definite lived intangible assets and other long-lived assets.
Retirement Plans:
We provide defined benefit pension plans for certain employees worldwide. Our Board of Directors approved amendments to the US, Canada, and UK defined benefit plans that froze the future accumulation of benefits effective June 30, 2013, December 31, 2015, and April 30, 2015, respectively. Under the amendments, no new employees will be permitted to enter these plans and no additional benefits for current participants for future services will be accrued after the effective dates of the amendments.
The accounting for benefit plans is highly dependent on assumptions concerning the outcome of future events and circumstances, including discount rates, long-term return rates on pension plan assets, healthcare cost trends, compensation increases, and other factors. In determining such assumptions, we consult with outside actuaries and other advisors.
50
Index
The discount rates for the US, Canada, and UK pension plans are based on the derivation of a single-equivalent discount rate using a standard spot rate curve and the timing of expected benefit payments as of the balance sheet date. The spot rate curves are based upon portfolios of corporate bonds rated at Aa or above by a respected rating agency. The discount rate for Germany is based on the expected benefit payments for the sample mixed population plan. The expected long-term rates of return on pension plan assets are estimated using forecasted returns for the asset classifications within the asset portfolio, and a composite return assumption range is determined using a weighted average based on each plan’s target asset allocation percentage. Salary growth and healthcare cost trend assumptions are based on our historical experience and future outlook. While we believe that the assumptions used in these calculations are reasonable, differences in actual experience or changes in assumptions could materially affect the expense and liabilities related to our defined benefit pension plans. A hypothetical one percent increase in the discount rate would increase net income and decrease the accrued pension liability by approximately $1.0 million and $63.4 million, respectively. A one percent decrease in the discount rate would decrease net income and increase the accrued pension liability by approximately $0.6 million and $73.0 million, respectively. A one percent change in the expected long-term rate of return would affect net income by approximately $3.7 million.
51
Index
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risk primarily related to interest rates, foreign exchange, and credit risk. It is our policy to monitor these exposures, and to use derivative financial investments and/or insurance contracts from time to time to reduce fluctuations in earnings and cash flows when it is deemed appropriate to do so. We do not use derivative financial instruments for trading or speculative purposes.
Interest Rates:
From time to time, we may use interest rate swaps, collars, or options to manage our exposure to fluctuations in interest rates. It is management’s intention that the notional amount of interest rate swaps be less than the variable rate loans outstanding during the life of the derivatives.
The information set forth in Note 15, “Derivative Instruments and Activities,” of the Notes to Consolidated Financial Statements under the caption “Interest Rate Contracts,” is incorporated herein by reference.
On an annual basis, a hypothetical 1% change in interest rates for the $299.8 million of unhedged variable rate debt as of April 30, 2025, would affect net income and cash flow by approximately $2.4 million.
Foreign Exchange Rates:
Fluctuations in the currencies of countries where we operate outside the US may have a significant impact on financial results. We are primarily exposed to movements in British pound sterling, euros, Canadian and Australian dollars, and certain currencies in Asia. The statements of financial position of non-US business units are translated into US dollars using period-end exchange rates for assets and liabilities and the Statements of Income (Loss) are translated into US dollars using weighted-average exchange rates for revenues and expenses. The percentage of consolidated revenue for the year ended April 30, 2025, recognized in the following currencies (on an equivalent US dollar basis) were approximately: 51% US dollar, 29% British pound sterling, 11% euro, and 9% other currencies.
Our significant investments in non-US businesses are exposed to foreign currency risk. Adjustments resulting from translating assets and liabilities are reported as a separate component of Total accumulated other comprehensive loss, net of tax within Total shareholders’ equity under the caption Foreign currency translation adjustment. During the year ended April 30, 2025, we recorded foreign currency translation gains in Total accumulated other comprehensive loss, net of tax of approximately $69.3 million primarily as a result of the fluctuations of the US dollar relative to the British pound sterling and, to a lesser extent, the euro. During the year ended April 30, 2024, we recorded foreign currency translation (losses) in Total accumulated other comprehensive loss, net of tax of approximately $(7.5) million primarily as a result of the fluctuations of the US dollar relative to the euro and, to a lesser extent, the British pound sterling. During the year ended April 30, 2023, we recorded foreign currency translation gains in Total accumulated other comprehensive loss, net of tax of approximately $3.2 million, primarily as a result of the fluctuations of the US dollar relative to the euro and the British pound sterling, partially offset by fluctuations of the US dollar relative to the Australian dollar.
Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses on the Consolidated Statements of Income (Loss) as incurred. Under certain circumstances, we may enter into derivative financial instruments in the form of foreign currency forward contracts to hedge against specific transactions, including intercompany purchases and loans.
The information set forth in Note 15, “Derivative Instruments and Activities,” of the Notes to Consolidated Financial Statements under the caption “Foreign Currency Contracts,” is incorporated herein by reference.
Customer Credit Risk:
In the journal publishing business, some subscriptions are sourced through journal subscription agents who, acting as agents for library customers, facilitate ordering by consolidating the subscription orders/billings of each subscriber with various publishers. Cash is generally collected in advance from subscribers by the subscription agents and is principally remitted to us between the months of December and April. Although currently we have minimal credit risk exposure to these agents, future calendar-year subscription receipts from these agents are highly dependent on their financial condition and liquidity. Subscription agents account for approximately 18% of total annual consolidated revenue, and no one agent accounts for more than 10% of total annual consolidated revenue.
Our book business is not dependent upon a single customer; however, the industry is concentrated in national, regional, and online book resellers. Although no book customer accounts for more than 6% of total consolidated revenue and 9% of accounts receivable at April 30, 2025, the top 10 book customers account for approximately 12% of total consolidated revenue and approximately 24% of accounts receivable at April 30, 2025.
52
Index
Item 8. Financial Statements and Supplementary Data
The following Consolidated Financial Statements and Notes are filed as part of this report.
John Wiley & Sons, Inc. and Subsidiaries
Financial Statements
Consolidated Statements of Financial Position as of April 30, 2025 and 2024 57
Notes to Consolidated Financial Statements
Note 1. Description of Business 62
Note 3. Revenue Recognition, Contracts with Customers 70
Note 4. Acquisitions and Divestitures 75
Note 5. Reconciliation of Weighted Average Shares Outstanding 79
Note 6. Accumulated Other Comprehensive Loss 80
Note 7. Restructuring and Related Charges 81
Note 8. Inventories 83
Note 9. Product Development Assets 83
Note 10. Technology, Property, and Equipment 84
Note 11. Goodwill and Intangible Assets 85
Note 12. Operating Leases 89
Note 13. Income Taxes 91
Note 14. Debt and Available Credit Facilities 94
Note 15. Derivative Instruments and Activities 96
Note 16. Commitment and Contingencies 97
Note 17. Retirement Plans 97
Note 18. Stock-Based Compensation 102
Note 19. Capital Stock and Changes in Capital Accounts 105
Note 20. Segment Information 107
Financial Statement Schedule
53
Index
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of John Wiley & Sons, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of John Wiley & Sons, Inc. and its subsidiaries (the "Company") as of April 30, 2025 and 2024, and the related consolidated statements of income (loss), of comprehensive income (loss), of shareholders' equity and of cash flows for each of the two years in the period ended April 30, 2025, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of April 30, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of April 30, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended April 30, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of April 30, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
54
Index
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Revenue Recognition - Research Subscriptions Revenue
As described in Note 3to the consolidated financial statements, the Company recorded $922.6million of research publishing revenue for the year ended April 30, 2025, of which a majority relates to research subscriptions. The majority of research publishing revenue is recognized over time. Journal subscription contracts are negotiated by the Company directly with customers or their subscription agents. Subscription periods typically cover calendar years. In a typical journal subscription sale, there is a written agreement between the Company and the customer that covers multiple years. However, management typically accounts for these agreements as one-year contracts because the enforceable rights under the agreements are subject to an annual confirmation and negotiation process with the customer. The transaction price consists of fixed consideration. Journal subscription revenue is generally collected in advance when the annual license is granted. Transformational agreements (read and publish) blend journal subscription and open access offerings. Generally, for a single fee, a national or regional consortium of libraries pays for and receives full read access to the Company’s journal portfolio and the ability to publish under an open access arrangement.
The principal considerations for our determination that performing procedures relating to revenue recognition for the research subscriptions revenue is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to the Company’s revenue recognition.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over research subscriptions revenue recognized. These procedures also included, among others (i) testing revenue recognized for a sample of research subscription revenue transactions by obtaining and inspecting source documents, such as sales contracts, invoices, and cash receipts and (ii) confirming a sample of outstanding customer invoice balances as of April 30, 2025 and, for confirmations not returned, obtaining and inspecting source documents, such as sales contracts, invoices, and subsequent cash receipts.
/s/ PricewaterhouseCoopers LLP
New York, New York
June 25, 2025
We have served as the Company’s auditor since 2023.
55
Index
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
John Wiley & Sons, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of income (loss), comprehensive income (loss), cash flows, and shareholders’ equity of John Wiley & Sons, Inc. and subsidiaries (the Company) for the year ended April 30, 2023, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the year ended April 30, 2023, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
/s/ KPMG LLP
We served as the Company’s auditor from 2002 to 2023.
New York, New York
June 26, 2023 except for Note 20, as to which the date is June 25, 2025
56
Index
John Wiley & Sons, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
In thousands
Assets:
Current assets
Prepaid expenses and other current assets 102,717 85,954
Current assets held-for-sale — 34,422
Non-current assets held-for-sale — 19,160
Liabilities and shareholders’ equity:
Current liabilities
Short-term portion of long-term debt 10,000 7,500
Short-term portion of operating lease liabilities 18,282 18,294
Current liabilities held-for-sale — 37,632
Long-term liabilities held-for-sale — 11,237
Commitments and contingencies (Note 16)
Shareholders’ equity
Preferred stock, $1 par value: Authorized – 2 million, Issued – 0 — —
Accumulated other comprehensive loss:
Unrealized (loss) gain on interest rate swaps, net of tax (5,182) 6,310
Total accumulated other comprehensive loss, net of tax (478,920) (528,439)
See accompanying Notes to Consolidated Financial Statements.
57