# John Wiley & Sons, Inc.: Form 10-Q for the period ended Oct 31, 2023

- Company: [John Wiley & Sons, Inc.](/companies/wly.md) (CIK 107140)
- Form: 10-Q
- Filed: 2023-12-07
- Accepted by EDGAR: Dec 7, 2023, 12:33 ET
- Period: 2023-10-31
- Accession: 0000107140-23-000239
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/107140/000010714023000239/jwa-20231031.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/107140/000010714023000239/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2023-10-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2023-08-01 to 2023-10-31 | $492.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 6 months, 2023-05-01 to 2023-10-31 | $943.8m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2023-08-01 to 2023-10-31 | $155.6m | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 6 months, 2023-05-01 to 2023-10-31 | $312.7m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2023-08-01 to 2023-10-31 | $252.3m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 6 months, 2023-05-01 to 2023-10-31 | $508.1m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2023-08-01 to 2023-10-31 | $46.2m | us-gaap:OperatingIncomeLoss |
| Operating income | 6 months, 2023-05-01 to 2023-10-31 | $29.9m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2023-08-01 to 2023-10-31 | $12.9m | us-gaap:InterestExpense |
| Interest expense | 6 months, 2023-05-01 to 2023-10-31 | $24.3m | us-gaap:InterestExpense |
| Income tax | 3 months, 2023-08-01 to 2023-10-31 | −$2.6m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2023-05-01 to 2023-10-31 | −$17.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2023-08-01 to 2023-10-31 | −$19.4m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2023-05-01 to 2023-10-31 | −$111.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2023-08-01 to 2023-10-31 | −$0.35 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2023-05-01 to 2023-10-31 | −$2.02 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2023-08-01 to 2023-10-31 | −$0.35 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2023-05-01 to 2023-10-31 | −$2.02 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2023-08-01 to 2023-10-31 | 55,102,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2023-05-01 to 2023-10-31 | 55,186,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2023-05-01 to 2023-10-31 | −$83.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2023-05-01 to 2023-10-31 | $40.3m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 6 months, 2023-05-01 to 2023-10-31 | $38.7m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 6 months, 2023-05-01 to 2023-10-31 | $22.5m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2023-10-31 | $83.2m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2023-10-31 | $425.6m | us-gaap:AssetsCurrent |
| Total assets | at 2023-10-31 | $2.78bn | us-gaap:Assets |
| Current liabilities | at 2023-10-31 | $610.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2023-10-31 | $1.91bn | us-gaap:Liabilities |
| Long-term debt | at 2023-10-31 | $937.6m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2023-10-31 | $5.0m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2023-10-31 | $867.3m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 66,845 characters.

The information in our Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read together with our Condensed Consolidated Financial Statements and related notes set forth in Item 1 of Part I of this Quarterly Report on Form 10-Q, our MD&A set forth in Item 7 of Part II of our 2023 Form 10-K and our Consolidated Financial Statements and related notes set forth in Item 8 of Part II of our 2023 Form 10-K. See Part II, Item 1A, “Risk Factors,” below and “Cautionary Notice Regarding Forward-Looking Statements “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995,” above, and the information referenced therein, for a description of risks that we face and important factors that we believe could cause actual results to differ materially from those in our forward-looking statements. 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 Unaudited Condensed Consolidated Financial Statements,” unless the context indicates otherwise.

### OVERVIEW

Wiley is a knowledge company and a global leader in research, publishing, and knowledge solutions. Dedicated to the creation and application of knowledge, Wiley serves the world’s researchers, learners, innovators, and leaders, helping them achieve their goals and solve the world's most important challenges. For more than two centuries, Wiley has been delivering on its timeless mission to unlock human potential. Wiley is a predominantly digital company with over 80% of Wiley's revenue for fiscal year 2023 generated by digital products excluding the Held for Sale or Sold segment revenue. For fiscal year 2023, 50% of revenue excluding the Held for Sale or Sold segment revenue is recurring which includes revenue that is contractually obligated or set to recur with a high degree of certainty.

On June 1, 2023, Wiley’s Board of Directors approved a plan to divest certain businesses that we determined are non-core businesses. Those businesses are University Services, Wiley Edge, and CrossKnowledge. These dispositions are expected to be completed during fiscal year 2024. As a result, in the three months ended July 31, 2023 we reorganized our segments and our new structure consists of three reportable segments which includes Research (no change), Learning, and Held for Sale or Sold, as well as a Corporate expense category (no change). The operations of University Services, Wiley Edge, and CrossKnowledge are reported in the Held for Sale or Sold segment. Prior period segment results have been revised to the new segment presentation. There were no changes to our consolidated financial results.

- **Research** is unchanged and includes the reporting lines of Research Publishing and Research Solutions;
- **Learning** includes the Academic and Professional reporting lines and consists of publishing and related knowledge solutions;
- **Held for Sale or Sold** includes businesses held-for-sale including University Services, Wiley Edge, and CrossKnowledge, as well as those sold in fiscal year 2024, which includes Tuition Manager, and in fiscal year 2023 Test Prep and Advancement Courses.

Through the Research segment, we provide peer-reviewed scientific, technical, and medical (STM) publishing, content platforms, and related services to academic, corporate, and government customers, academic societies, and individual researchers. The Learning segment provides scientific, professional, and education print and digital books, digital courseware to libraries, corporations, students, professionals, and researchers, as well as assessment services to businesses and professionals.

Wiley’s business strategies are tightly aligned with solid growth trends, including ever-increasing global R&D spend leading to consistent growth in scientific research output, the transition to open research, and the increasing application of new knowledge into solutions to solve real world problems. These strategies include driving publishing output to meet the global demand for peer-reviewed research and expanding platform and service offerings for corporations and societies. Learning strategies include scaling high-value digital content, courseware, and assessments.

On November 13, 2023, we entered into a Membership Interest and Asset Purchase Agreement (Purchase Agreement) with Academic Partnerships LLC, a Delaware limited liability company (Academic Partnerships), and Education Services Upper Holdings Corp., a Delaware corporation (Upper Holdings), to sell our University Services business (the Business) to Academic Partnerships (the Transaction). The purchase price for the Business includes total consideration of up to $150 million and a 10% share in the acquiring company. The $150 million consideration includes $110 million subject to customary working capital adjustments, and up to $40 million in the form of an earnout based on revenue targets during each of the two fiscal years in the period from May 1, 2024 through April 30, 2026. The $110 million will be payable in cash and/or in the form of a promissory note based on the availability of proceeds from any third-party debt refinancing undertaken by Academic Partnerships prior to closing. The earnout will also be payable in cash, subject to certain exceptions in which it will be paid by increasing the principal under the promissory note.

The consummation of the Transaction is subject to customary conditions, including the expiration or termination of the waiting period applicable to the Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other conditions.

The results of University Services will continue to be reported in our operating results in the Held for Sale or Sold segment until the sale is finalized. We will enter into a transition services agreement to facilitate the transition of the divested business.

### RESULTS OF OPERATIONS – THREE MONTHS ENDED OCTOBER 31, 2023

### SECOND QUARTER SUMMARY

- **US GAAP Results**: Consolidated Revenue of $492.8 million (-4%, compared with the prior year), Operating Income of $46.2 million (-19%, compared with the prior year), and Diluted Loss per Share of $-0.35 (-$1.03, compared with the prior year). US GAAP results impacted by impairment charges of $51.9 million, related to our held-for-sale assets and restructuring charges totalling $25.1 million.
- **Adjusted Results at Constant Currency (excluding Held for Sale or Sold segment results**): Adjusted Revenue of $406.6 million (-2%, compared with the prior year), Adjusted EBITDA of $92.4 million (-13%, compared with the prior year), and Adjusted EPS of $0.73 (-25%, compared with the prior year).

### CONSOLIDATED RESULTS OF OPERATIONS

### Revenue:

Revenue for the three months ended October 31, 2023, decreased $22.0 million, or 4%, as compared with the prior year. On a constant currency basis, revenue decreased 6% as compared with the prior year. Excluding the revenues from the Held for Sale or Sold segment, Adjusted Revenue decreased 2% on a constant currency basis.

### Adjusted Revenue

Below is a reconciliation of our consolidated US GAAP Revenue to Non-GAAP Adjusted Revenue:

|  | Three Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP Revenue, net** | **$492,808** | $514,836 |
| Less: Held for Sale or Sold segment (1) | **(86,198)** | (103,828) |
| **Non-GAAP Adjusted Revenue, net** | **$406,610** | $411,008 |

(1) Our Adjusted Revenue, net excludes the impact of our Held for Sale or Sold segment revenue.

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 three months ended October 31, 2023, decreased $14.7 million, or 9%, as compared with the prior year. On a constant currency basis, cost of sales decreased 10% compared with the prior year. This was primarily due to lower employee costs related to the Wiley Edge business, and to a lesser extent, marketing costs for the University Services business. Excluding the cost of sales from the Held for Sale or Sold segment, cost of sales was flat on a constant currency basis.

### Operating and Administrative Expenses:

Operating and administrative expenses for the three months ended October 31, 2023, decreased $0.7 million, or was flat as compared with the prior year. On a constant currency basis, operating and administrative expenses decreased 2% as compared with the prior year primarily reflecting lower depreciation due to the cessation for held-for-sale assets, lower editorial costs, and a decrease in travel and entertainment, partially offset by the prior year reduction in our provision for credit losses, and higher employee incentive compensation. Excluding operating and administrative expenses from the Held for Sale or Sold segment, operating and administrative expenses increased 1% on a constant currency basis.

### Restructuring and Related Charges:

### Global Restructuring Program

In May 2022, the Company initiated a global program (Global Restructuring Program) to restructure and align our cost base with current and anticipated future market conditions, which was previously referred to as the Fiscal Year 2023 Restructuring Program. This program included severance related charges for the elimination of certain positions, the exit of certain leased office space, and the reduction of our occupancy at other facilities. Under this program, we reduced our real estate square footage occupancy by approximately 22%.

In the three months ended July 31, 2023, we expanded the scope of the program to include those actions that will focus Wiley on its leading global position in the development and application of new knowledge and drive greater profitability, growth, and cash flow. We will focus on our strongest and most profitable businesses and large market opportunities in Research and Learning, as well as streamline our organization and rightsize our cost structure to reflect these portfolio actions. As part of the Global Restructuring Program, we are further reducing our real estate square footage occupancy by approximately 6%.

Excluding actions related to the Held for Sale or Sold segment, we anticipate to yield annualized cost savings of approximately $65 million, with approximately $30 million of that to be realized this fiscal year from actions taken starting in fiscal year 2024.

For the three months ended October 31, 2023 and 2022, we recorded pretax restructuring charges of $24.8 million and $13.7 million, respectively, related to this program. This restructuring charge primarily reflects severance charges of $18.6 million for the elimination of certain positions.

We anticipate ongoing severance related charges and facility-related costs associated with certain properties to result in additional restructuring charges in future periods.

### Business Optimization Program

For the three months ended October 31, 2023 and 2022, we recorded pretax restructuring charges of $0.3 million and $0.3 million, respectively, related to this program.

These charges are reflected in Restructuring and related charges on our Unaudited Condensed Consolidated Statements of Net (Loss) Income. See Note 9, “Restructuring and Related Charges” for more details on the Global Restructuring Program charges.

For the impact of our restructuring programs on diluted (loss) earnings per share, see the section below, “Diluted (Loss) Earnings per Share (EPS).”

### Amortization of Intangible Assets:

Amortization of intangible assets was $13.6 million for the three months ended October 31, 2023, a decrease of $6.5 million, or 33%, as compared with the prior year. On a constant currency basis, amortization of intangible assets decreased 34% as compared with the prior year primarily due to the cessation of amortization for held-for-sale assets and, to a lesser extent, the completion of amortization of certain acquired intangible assets. See Note 3, “Acquisitions and Divestitures” for more details on these held-for-sale assets.

### Operating Income, Adjusted Operating Income (OI) and Adjusted EBITDA:

Operating income for the three months ended October 31, 2023, decreased $11.2 million, or 19% as compared with the prior year on a reported and on a constant currency basis. The decrease was primarily due to a decrease in revenue and, to a lesser extent, an increase in restructuring charges, partially offset by lower cost of sales and, to a lesser extent, amortization of intangible assets, and operating and administrative expenses.

Adjusted OI and Adjusted EBITDA on a constant currency basis and excluding restructuring charges and the adjusted contribution to profit for the Held for Sale or Sold segment decreased 18% and 13%, respectively, as compared with the prior year. The decrease in Adjusted OI and Adjusted EBITDA was primarily due to lower Adjusted Revenue.

### Adjusted OI

Below is a reconciliation of our consolidated US GAAP Operating Income to Non-GAAP Adjusted OI:

|  | Three Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP Operating Income** | **$46,245** | $57,439 |
| Adjustments: |  |  |
| Restructuring and related charges | **25,102** | 13,956 |
| Held for Sale or Sold segment adjusted contribution to profit (1) | **(19,100)** | (6,862) |
| **Non-GAAP Adjusted OI** | **$52,247** | $64,533 |

(1) Our Adjusted OI excludes the impact of our Held for Sale or Sold segment adjusted contribution to profit.

### Adjusted EBITDA

Below is a reconciliation of our consolidated US GAAP Net (Loss) Income to Non-GAAP EBITDA and Adjusted EBITDA:

|  | Three Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **Net (Loss) Income** | **$(19,445)** | $38,193 |
| Interest expense | **12,937** | 9,332 |
| (Benefit) provision for income taxes | **(2,585)** | 10,137 |
| Depreciation and amortization | **40,174** | 52,421 |
| **Non-GAAP EBITDA** | **31,081** | 110,083 |
| Restructuring and related charges | **25,102** | 13,956 |
| Foreign exchange losses (gains), including the write off of certain cumulative translation adjustments | **2,357** | (478) |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **51,414** | — |
| Other expense, net | **1,567** | 255 |
| Held for Sale or Sold segment Adjusted EBITDA (1) | **(19,100)** | (18,089) |
| **Non-GAAP Adjusted EBITDA** | **$92,421** | $105,727 |

(1) Our Non-GAAP Adjusted EBITDA excludes the Held for Sale or Sold segment Non-GAAP Adjusted EBITDA.

### Interest Expense:

Interest expense for the three months ended October 31, 2023, was $12.9 million compared with the prior year of $9.3 million. This increase was primarily due to a higher weighted average effective interest rate.

### Foreign Exchange Transaction (Losses) Gains:

Foreign exchange transaction losses of $(2.4) million for the three months ended October 31, 2023 were primarily due to losses on our intercompany accounts receivable and payable balances, partially offset by gains on our foreign currency denominated third party accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar.

Foreign exchange transaction gains of $0.5 million for the three months ended October 31, 2022 were primarily due to gains on our foreign currency denominated third party accounts receivable and payable balances, partially offset by 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.

### Impairment Charge Related to Assets Held-For-Sale and Loss on Sale of a Business:

As part of our ongoing initiatives to simplify our portfolio and focus our attention on core growth areas, we are divesting non-core businesses including University Services, Wiley Edge, and CrossKnowledge. These dispositions are expected to be completed during fiscal year 2024. In addition, these three businesses met the held-for-sale criteria. We measured each disposal group at the lower of carrying value or fair value less cost to sell. In the three months ended October 31, 2023, we recorded a held-for-sale pretax impairment of $51.9 million which includes $34.8 million for University Services and $17.1 million for CrossKnowledge. The additional impairment charges in the three months ended October 31, 2023 were due to subsequent changes in the fair value less cost to sell resulting from the continued progression of the selling processes and indications of changes in the expected consideration for the businesses, as well as changes in the carrying amounts of the disposal groups. Additional impairment charges related to all of our assets held-for-sale could be identified as we continue with the disposition process until completion of such actions. As noted above, on November 13, 2023 we entered into an agreement to sell our University Services business.

In the three months ended October 31, 2023, there was a reduction in the pretax loss on the sale of our Tuition Manager business previously in our Held for Sale or Sold segment due to cash received after the closing of approximately $0.5 million.

### (Benefit) Provision for Income Taxes:

Below is a reconciliation of our US GAAP (Loss) Income Before Taxes to Non-GAAP Adjusted Income Before Taxes:

|  | Three Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP (Loss) Income Before Taxes** | **$(22,030)** | $48,330 |
| Pretax Impact of Adjustments: |  |  |
| Restructuring and related charges | **25,102** | 13,956 |
| Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments | **3,223** | 2,654 |
| Amortization of acquired intangible assets | **14,303** | 21,185 |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **51,414** | — |
| Held for Sale or Sold segment Adjusted Income Before Taxes (1) | **(19,099)** | (13,230) |
| **Non-GAAP Adjusted Income Before Taxes** | **$52,913** | $72,895 |

(1) Our Adjusted Income Before Taxes excludes the Adjusted Income of our Held for Sale or Sold segment.

Below is a reconciliation of our US GAAP Income Tax (Benefit) Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate:

|  | Three Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP Income Tax (Benefit) Provision** | **$(2,585)** | $10,137 |
| Income Tax Impact of Adjustments (1): |  |  |
| Restructuring and related charges | **6,315** | 3,422 |
| Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments | **888** | 694 |
| Amortization of acquired intangible assets | **3,645** | 4,388 |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **8,542** | — |
| Held for Sale or Sold segment Adjusted Tax Provision (2) | **(4,270)** | (3,015) |
| **Non-GAAP Adjusted Income Tax Provision** | **$12,535** | $15,626 |
| **US GAAP Effective Tax Rate** | **11.7%** | 21.0% |
| **Non-GAAP Adjusted Effective Tax Rate** | **23.7%** | 21.4% |

(1) For the three months ended October 31, 2023 and 2022, substantially all of the tax impact was from deferred taxes.

(2) Our Adjusted Income Tax Provision excludes the Adjusted Tax Provision of our Held for Sale or Sold segment.

Our effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. The US GAAP effective tax rate for the three months ended October 31, 2023, was 11.7% compared to 21.0% for the three months ended October 31, 2022. The US GAAP effective tax rate for the three months ended October 31, 2023, was lower than the US GAAP effective tax rate for the three months ended October 31, 2022 primarily due to the held-for-sale impairment described in Note 3, "Acquisitions and Divestitures", which resulted in a deferred tax benefit, the impact of US tax incentives, and other discrete items offset by the mix of non-US income.

The Non-GAAP adjusted effective tax rate was 23.7% for the three months ended October 31, 2023, compared to 21.4% for the three months ended October 31, 2022. The increase in the Non-GAAP adjusted effective tax rate for the three months ended October 31, 2023, compared with the prior year ended October 31, 2022, was primarily due to the mix of non-US income offset by tax incentives in the US.

### Diluted (Loss) Earnings per Share (EPS):

Diluted loss per share for the three months ended October 31, 2023 was $(0.35) per share compared with earnings per share of $0.68 per share for the three months ended October 31, 2022. This decrease was primarily due to the impairment charge related to assets held-for-sale in the three months ended October 31, 2023 and, to a lesser extent, lower operating income, partially offset by an income tax benefit in the three months ended October 31, 2023.

Below is a reconciliation of our US GAAP (Loss) Earnings per share to Non-GAAP Adjusted EPS. The amount of the pretax, and the related income tax impact for the adjustments included in the table below, are presented in the section above, “(Benefit) Provision for Income Taxes.”

|  | Three Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP (Loss) Earnings Per Share** | **$(0.35)** | $0.68 |
| Adjustments: |  |  |
| Restructuring and related charges | **0.34** | 0.19 |
| Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments | **0.04** | 0.03 |
| Amortization of acquired intangible assets | **0.19** | 0.30 |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **0.77** | — |
| Held for Sale or Sold segment Adjusted Net Income (1) | **(0.27)** | (0.18) |
| EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (2) | **0.01** | — |
| **Non-GAAP Adjusted EPS** | **$0.73** | $1.02 |

(1) Our Adjusted EPS excludes the Adjusted Net Income of our Held for Sale or Sold segment.

(2) Represents the impact of using diluted weighted-average number of common shares outstanding (55.6 million shares for the three months ended October 31, 2023) included in the Non-GAAP Adjusted EPS calculation in order to apply the dilutive impact on adjusted net income due to the effect of unvested restricted stock units and other stock awards. This impact occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive.

On a constant currency basis, Adjusted EPS decreased 25% primarily due to a decrease in Adjusted Operating Income and, to a lesser extent, higher interest expense.

### SEGMENT OPERATING RESULTS

| RESEARCH Revenue: | Three Months Ended October 31, 2023 | 2022 | % Change Favorable (Unfavorable) | Constant Currency % Change Favorable (Unfavorable) |
| --- | ---: | ---: | ---: | ---: |
| Research Publishing | **$219,743** | $232,641 | (6)% | (7)% |
| Research Solutions | **37,927** | 38,718 | (2)% | (3)% |
| **Total Research Revenue** | **257,670** | 271,359 | (5)% | (7)% |
| Cost of Sales | **71,300** | 71,033 | 0% | 1% |
| Operating Expenses | **116,228** | 114,252 | (2)% | 1% |
| Amortization of Intangible Assets | **11,286** | 11,616 | 3% | 5% |
| Restructuring Charges (see Note 9) | **4,755** | 1,179 | # | # |
| **Contribution to Profit** | **54,101** | 73,279 | (26)% | (26)% |
| Restructuring Charges (see Note 9) | **4,755** | 1,179 | # | # |
| **Adjusted Contribution to Profit** | **58,856** | 74,458 | (21)% | (21)% |
| Depreciation and amortization | **22,668** | 23,384 | 3% | 4% |
| **Adjusted EBITDA** | **$81,524** | $97,842 | (17)% | (17)% |
| Adjusted EBITDA Margin | **31.6%** | 36.1% |  |  |

\# Not meaningful

### Revenue:

Research revenue for the three months ended October 31, 2023 decreased $13.7 million, or 5%, as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 7% as compared with the prior year primarily due to the carryover of the Hindawi publishing disruption experienced in fiscal year 2023. Additionally, to a lesser extent, revenues were unfavorably impacted by soft market conditions for our corporate recruitment offerings. These impacts were partially offset by continued growth in our core open access publishing program. Excluding Hindawi, Research revenue was flat. Hindawi’s special issues program was suspended in the third quarter of fiscal year 2023 due to the presence in certain special issues of compromised articles. As a result, Hindawi revenue for the three months ended October 31, 2023 decreased $18.1 million on a constant currency basis as compared with the prior year. For fiscal year 2024, we expect Hindawi revenue to decline $35 million to $40 million. In fiscal year 2025, we expect to begin to recover Hindawi revenue lost. Open access article output declined 40% as compared with the prior year. Excluding Hindawi, open access article output growth was approximately 19% for the three months ended October 31, 2023.

### Adjusted EBITDA:

On a constant currency basis, Adjusted EBITDA decreased 17% as compared with the prior year. This decrease was primarily due to revenue performance as cost of sales and operating expenses slightly declined. Excluding Hindawi, Adjusted EBITDA decreased 4% primarily due to higher employee costs. On a constant currency basis, Hindawi Adjusted EBITDA for the three months ended October 31, 2023 decreased $13.5 million as compared with the prior year.

| LEARNING: Revenue: | Three Months Ended October 31, 2023 | 2022 | % Change Favorable (Unfavorable) | Constant Currency % Change Favorable (Unfavorable) |
| --- | ---: | ---: | ---: | ---: |
| Academic | **$89,125** | $82,256 | 8% | 8% |
| Professional | **59,815** | 57,393 | 4% | 3% |
| **Total Learning Revenue** | **148,940** | 139,649 | 7% | 6% |
| Cost of Sales | **35,617** | 34,768 | (2)% | (1)% |
| Operating Expenses | **71,132** | 69,180 | (3)% | (2)% |
| Amortization of Intangible Assets | **2,279** | 2,125 | (7)% | (7)% |
| Restructuring Charges (see Note 9) | **5,859** | 3,664 | (60)% | (60)% |
| **Contribution to Profit** | **34,053** | 29,912 | 14% | 14% |
| Restructuring Charges (see Note 9) | **5,859** | 3,664 | (60)% | (60)% |
| **Adjusted Contribution to Profit** | **39,912** | 33,576 | 19% | 19% |
| Depreciation and amortization | **13,974** | 13,900 | (1)% | 0% |
| **Adjusted EBITDA** | **$53,886** | $47,476 | 14% | 13% |
| Adjusted EBITDA Margin | **36.2%** | 34.0% |  |  |

### Revenue:

Learning revenue increased $9.3 million, or 7%, as compared with the prior year on a reported basis. On a constant currency basis, revenue increased 6% as compared with the prior year. This was primarily due to an increase in Academic from growth in digital courseware, as well as print and digital sales. Professional increased due to higher publishing revenues due to an improved channel environment and lower returns. Revenues from assessments were flat compared with the prior year.

### Adjusted EBITDA:

On a constant currency basis, Adjusted EBITDA increased 13% as compared with the prior year. This increase was primarily due to revenue performance, partially offset by higher operating expenses due to the prior year reduction in our provision for credit losses. The increase in operating expenses was tempered by restructuring savings.

#### INDEX

| HELD FOR SALE OR SOLD: | Three Months Ended October 31, 2023 | 2022 | % Change Favorable (Unfavorable) | Constant Currency % Change Favorable (Unfavorable) |
| --- | ---: | ---: | --- | --- |
| **Total Held for Sale or Sold Revenue** | **$86,198** | $103,828 | (17)% | (18)% |
| Cost of Sales | **48,697** | 64,501 | 25% | 26% |
| Operating Expenses | **18,401** | 26,096 | 29% | 32% |
| Amortization of Intangible Assets | **—** | 6,369 | # | # |
| Restructuring Charges (see Note 9) | **2,022** | 281 | # | # |
| **Contribution to Profit** | **17,078** | 6,581 | # | # |
| Restructuring Charges (see Note 9) | **2,022** | 281 | # | # |
| **Adjusted Contribution to Profit** | **19,100** | 6,862 | # | # |
| Depreciation and amortization | **—** | 11,227 | # | # |
| **Adjusted EBITDA** | **$19,100** | $18,089 | 6% | 4% |
| Adjusted EBITDA Margin | **22.2%** | 17.4% |  |  |

\# Not meaningful

### Revenue:

Revenue for Held for Sale or Sold decreased $17.6 million, or 17%, as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 18% as compared with the prior year. This was due to decrease in placement revenues, and to a lesser extent, the disposition of certain businesses in the fourth quarter of fiscal year 2023 and the first quarter of fiscal year 2024, and a decrease in University Services revenue due to lower enrollments. For the three months ended October 31, 2023, placements declined 40% and enrollments declined 3%.

### Adjusted EBITDA:

On a constant currency basis, Adjusted EBITDA increased 4% as compared with the prior year. This increase was primarily due to placement savings, and lower employment costs in University Services due to restructuring actions.

### University Services Partners and Programs:

As of October 31, 2023, Wiley had 60 university partners under contract, compared to 69 as of October 31, 2022 within University Services.

### CORPORATE EXPENSES:

Corporate expenses for the three months ended October 31, 2023 increased $6.7 million, or 13%, as compared with the prior year. On a constant currency basis, excluding restructuring charges, these expenses increased 6%. On a constant currency basis, Adjusted EBITDA loss increased 8% as compared with the prior year. This was primarily due to higher employee incentive compensation and, to a lesser extent, executive severance costs, partially offset by lower technology related costs.

### RESULTS OF OPERATIONS – SIX MONTHS ENDED OCTOBER 31, 2023

### SIX MONTHS SUMMARY

- **US GAAP Results**: Consolidated Revenue of $943.8 million (-6%, compared with the prior year), Operating Income of $29.9 million (-26%, compared with the prior year), and Diluted Loss per Share of $-2.02 (-2.38, compared with the prior year). US GAAP results impacted by charges totaling $154.0 million, including non-cash goodwill impairment and impairment of held-for-sale assets and loss on the sale of a business.
- **Adjusted Results at Constant Currency (excluding Held for Sale or Sold segment results**): Adjusted Revenue of $773.7 million (-5%, compared with the prior year), Adjusted EBITDA of $152.1 million (-12%, compared with the prior year), and Adjusted EPS of $0.99 (-30%, compared with the prior year).

### CONSOLIDATED RESULTS OF OPERATIONS

### Revenue:

Revenue for the six months ended October 31, 2023, decreased $58.6 million, or 6%, as compared with the prior year. On a constant currency basis, revenue decreased 7% as compared with the prior year. Excluding the revenues from the Held for Sale or Sold segment, Adjusted Revenue decreased 5% on a constant currency basis.

### Adjusted Revenue

Below is a reconciliation of our consolidated US GAAP Revenue to Non-GAAP Adjusted Revenue:

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP Revenue, net** | **$943,821** | $1,002,405 |
| Less: Held for Sale or Sold segment (1) | **(170,087)** | (196,837) |
| **Non-GAAP Adjusted Revenue, net** | **$773,734** | $805,568 |

(1) Our Adjusted Revenue, net excludes the impact of our Held for Sale or Sold segment revenue.

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 six months ended October 31, 2023, decreased $31.6 million, or 9%, as compared with the prior year. On a constant currency basis, cost of sales decreased 10% as compared with the prior year. This was primarily due to lower employee costs related to Wiley Edge and, to a lesser extent, marketing costs for the University Services business, both in the Held for Sale or Sold segment. Excluding the cost of sales from the Held for Sale or Sold segment, cost of sales decreased 3% on a constant currency basis, primarily due to a decrease in revenue.

### Operating and Administrative Expenses:

Operating and administrative expenses for the six months ended October 31, 2023, decreased $27.7 million, or 5%, as compared with the prior year. On a constant currency basis, operating and administrative expenses decreased 6% as compared with the prior year primarily reflecting lower employee costs associated with recent restructuring actions, and to a lesser extent, lower depreciation due to the cessation of depreciation for held-for-sale assets, lower travel and entertainment costs, and professional fees. Excluding operating and administrative expenses from the Held for Sale or Sold segment, operating and administrative expenses decreased 3% on a constant currency basis.

### Impairment of Goodwill:

We recorded an impairment of goodwill in the six months ended October 31, 2023 of $26.7 million. This charge is reflected in the Impairment of goodwill in the Condensed Consolidated Statements of Net (Loss) Income.

In accordance with applicable accounting standards, we were required to test goodwill for impairment immediately before and after our segment realignment. 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 non-cash goodwill impairment of $11.4 million in the six months ended October 31, 2023. 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.

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 non-cash goodwill impairment of $15.3 million in the six months ended October 31, 2023. CrossKnowledge was adversely impacted by a decline in the demand for its offerings, which have resulted in lower sales and a decline in average contract value, that adversely impacted forecasted revenue growth and operating cash flows.

See Note 12, "Goodwill and Intangible Assets" for details on these charges.

### Restructuring and Related Charges:

### Global Restructuring Program

For the six months ended October 31, 2023 and 2022, we recorded pretax restructuring charges of $36.5 million and $35.4 million, respectively, related to the Global Restructuring Program.

We anticipate ongoing severance related charges and facility-related costs associated with certain properties to result in additional restructuring charges in future periods.

### Business Optimization Program

For the six months ended October 31, 2023 and 2022, we recorded pretax restructuring charges of $0.7 million and $1.0 million, respectively, related to this program.

These charges are reflected in Restructuring and related charges on our Unaudited Condensed Consolidated Statements of Net (Loss) Income. See Note 9, “Restructuring and Related Charges” for more details on the Global Restructuring Program charges.

For the impact of our restructuring programs on diluted (loss) earnings per share, see the section below, “Diluted (Loss) Earnings per Share (EPS).”

### Amortization of Intangible Assets:

Amortization of intangible assets was $29.2 million for the six months ended October 31, 2023, a decrease of $16.2 million, or 36%, as compared with the prior year. On a constant currency basis, amortization of intangible assets decreased 37% as compared with the prior year primarily due to the cessation of amortization for held-for-sale assets and. to a lesser extent, the prior year period including $4.6 million due to the acceleration of expense related to the discontinued use of the mthree trademark, and the completion of amortization of certain acquired intangible assets. See Note 3, “Acquisitions and Divestitures” for more details on these held-for-sale assets.

### Operating Income, Adjusted Operating Income (OI) and Adjusted EBITDA:

Operating income for the six months ended October 31, 2023, decreased $10.6 million or 26% as compared with the prior year. On a constant currency basis, operating income decreased 27% as compared with prior year. The decline was primarily due to a decrease in revenue and, to a lesser extent, the impairment of goodwill. This was partially offset by the decrease in cost of sales, operating and administrative expenses and, to a lesser extent, the amortization of intangible assets as described above.

Adjusted OI and Adjusted EBITDA on a constant currency basis and excluding restructuring charges, impairment of goodwill, the accelerated amortization of an intangible asset, and the adjusted contribution to profit for the Held for Sale or Sold segment decreased 19% and 12%, respectively, as compared with the prior year. The decrease in Adjusted OI and Adjusted EBITDA was primarily due to lower revenues, partially offset by a lower operating and administrative expenses.

### Adjusted OI

Below is a reconciliation of our consolidated US GAAP Operating Income to Non-GAAP Adjusted OI:

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP Operating Income** | **$29,890** | $40,474 |
| Adjustments: |  |  |
| Restructuring and related charges | **37,225** | 36,397 |
| Impairment of goodwill | **26,695** | — |
| Accelerated amortization of an intangible asset (1) | **—** | 4,594 |
| Held for Sale or Sold segment adjusted contribution to profit (2) | **(22,184)** | 7,246 |
| **Non-GAAP Adjusted OI** | **$71,626** | $88,711 |

(1) We determined that a revision of the useful life of the mthree trademark was warranted and the intangible asset was fully amortized over its remaining useful life resulting in accelerated amortization expense of $4.6 million in the three months ended July 31, 2022.

(2) Our Adjusted OI excludes the impact of our Held for Sale or Sold segment adjusted contribution to profit.

51

### Adjusted EBITDA

Below is a reconciliation of our consolidated US GAAP Net (Loss) Income to Non-GAAP EBITDA and Adjusted EBITDA:

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **Net (Loss) Income** | **$(111,709)** | $20,358 |
| Interest expense | **24,271** | 15,664 |
| (Benefit) provision for income taxes | **(17,044)** | 4,585 |
| Depreciation and amortization | **83,902** | 110,700 |
| **Non-GAAP EBITDA** | **(20,580)** | 151,307 |
| Impairment of goodwill | **26,695** | — |
| Restructuring and related charges | **37,225** | 36,397 |
| Foreign exchange losses, including the write off of certain cumulative translation adjustments | **3,977** | 138 |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **127,343** | — |
| Other expense (income), net | **3,052** | (271) |
| Held for Sale or Sold segment Adjusted EBITDA (1) | **(25,621)** | (15,654) |
| **Non-GAAP Adjusted EBITDA** | **$152,091** | $171,917 |

(1) Our Non-GAAP Adjusted EBITDA excludes the Held for Sale or Sold segment Non-GAAP Adjusted EBITDA.

### Interest Expense:

Interest expense for the six months ended October 31, 2023, was $24.3 million compared with the prior year of $15.7 million. This increase was primarily due to a higher weighted average effective interest rate.

### Foreign Exchange Transaction (Losses):

Foreign exchange transaction losses of $(4.0) million for the six months ended October 31, 2023 were primarily due to losses on our intercompany accounts receivable and payable balances and, to a lesser extent, on our foreign currency denominated third party accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar. 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 six months ended October 31, 2023, we wrote off an additional $1.0 million in cumulative translation adjustments from our Russian entity.

Foreign exchange transaction losses of $(0.1) million for the six months ended October 31, 2022 were primarily due to losses on our intercompany accounts receivable and payable balances, offset by gains on our foreign currency denominated third party accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar.

### Impairment Charge Related to Assets Held-For-Sale and Loss on Sale of a Business:

As part of our ongoing initiatives to simplify our portfolio and focus our attention on core growth areas, we are divesting non-core businesses including University Services, Wiley Edge, and CrossKnowledge. These dispositions are expected to be completed during fiscal year 2024. In addition, these three businesses met the held-for-sale criteria. We measured each disposal group at the lower of carrying value or fair value less cost to sell. We recorded a held-for-sale pretax impairment of $125.8 million which includes $75.4 million for University Services, and $50.4 million for CrossKnowledge during the six months ended October 31, 2023. As noted above, on November 13, 2023 we entered into an agreement to sell our University Services business.

The loss on sale of a business is due to the sale of our Tuition Manager business previously in our Held for Sale or Sold segment, which resulted in a pretax loss of approximately $1.5 million during the six months ended October 31, 2023.

### (Benefit) Provision for Income Taxes:

Below is a reconciliation of our US GAAP (Loss) Income Before Taxes to Non-GAAP Adjusted Income Before Taxes:

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP (Loss) Income Before Taxes** | **$(128,753)** | $24,943 |
| Pretax Impact of Adjustments: |  |  |
| Impairment of goodwill | **26,695** | — |
| Restructuring and related charges | **37,225** | 36,397 |
| Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments | **3,217** | 3,320 |
| Amortization of acquired intangible assets | **30,971** | 47,570 |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **127,343** | — |
| Held for Sale or Sold segment Adjusted Income Before Taxes (1) | **(24,133)** | (5,636) |
| **Non-GAAP Adjusted Income Before Taxes** | **$72,565** | $106,594 |

(1) Our Adjusted Income Before Taxes excludes the Adjusted Income of our Held for Sale or Sold segment.

Below is a reconciliation of our US GAAP Income Tax (Benefit) Provision to Non-GAAP Adjusted Income Tax Provision, including our US GAAP Effective Tax Rate and our Non-GAAP Adjusted Effective Tax Rate:

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP Income Tax (Benefit) Provision** | **$(17,044)** | $4,585 |
| Income Tax Impact of Adjustments (1): |  |  |
| Impairment of goodwill | **2,697** | — |
| Restructuring and related charges | **9,251** | 8,939 |
| Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments | **854** | 869 |
| Amortization of acquired intangible assets | **7,517** | 10,220 |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **19,203** | — |
| Held for Sale or Sold segment Adjusted Tax Provision (2) | **(5,266)** | (1,446) |
| **Non-GAAP Adjusted Income Tax Provision** | **$17,212** | $23,167 |
| **US GAAP Effective Tax Rate** | **13.2%** | 18.4% |
| **Non-GAAP Adjusted Effective Tax Rate** | **23.7%** | 21.7% |

(1) For the six months ended October 31, 2023 and 2022, substantially all of the tax impact was from deferred taxes.

(2) Our Adjusted Income Tax Provision excludes the Adjusted Tax Provision of our Held for Sale or Sold segment.

53

Our effective tax rate fluctuates based on, among other factors, where income is earned and the level of income relative to tax attributes. The US GAAP effective tax rate for the six months ended October 31, 2023, was 13.2% compared to 18.4% for the six months ended October 31, 2022. The US GAAP effective tax rate for the six months ended October 31, 2023, was lower than the US GAAP effective tax rate for the six months ended October 31, 2022 primarily due to the tax benefit on impairment of goodwill resulting from the segment realignment described in Note 12, "Goodwill and Intangible Assets," as well as the held-for-sale impairment described in Note 3, "Acquisitions and Divestitures", which resulted in a deferred tax benefit, the impact of US tax incentives, and other discrete items offset by the mix of non-US income.

Excluding the $2.7 million tax benefit from the impairment of goodwill and $19.2 million tax benefit of the impairment charge related to assets held-for-sale and the loss on sale of a business, restructuring and other adjustments noted in the table above, the Non-GAAP adjusted effective tax rate was 23.7% for the six months ended October 31, 2023, compared to 21.7% for the six months ended October 31, 2022. The increase in the Non-GAAP adjusted effective tax rate for the six months ended October 31, 2023, compared with the prior year ended October 31, 2022, was primarily due to the mix of non-US income offset by tax incentives in the US.

### Diluted (Loss) Earnings per Share (EPS):

Diluted loss for the six months ended October 31, 2023 was $(2.02) per share compared with earnings of $0.36 per share for the six months ended October 31, 2022. This decrease was primarily due to the impairment charge related to assets held-for-sale and a loss on the sale of a business in the six months ended October 31, 2023 and, to a lesser extent, lower operating income, and an increase in interest expense, partially offset by an income tax benefit in the six months ended October 31, 2023.

Below is a reconciliation of our US GAAP (Loss) Earnings Per Share to Non-GAAP Adjusted EPS. The amount of the pretax, and the related income tax impact for the adjustments included in the table below, are presented in the section above, “(Benefit) Provision for Income Taxes”.

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **US GAAP (Loss) Earnings Per Share** | **$(2.02)** | $0.36 |
| Adjustments: |  |  |
| Impairment of goodwill | **0.43** | — |
| Restructuring and related charges | **0.50** | 0.49 |
| Foreign exchange losses on intercompany transactions, including the write off of certain cumulative translation adjustments | **0.04** | 0.04 |
| Amortization of acquired intangible assets | **0.42** | 0.67 |
| Impairment charge related to assets held-for-sale and loss on sale of a business | **1.94** | — |
| Held for Sale or Sold segment Adjusted Net Income (1) | **(0.34)** | (0.08) |
| EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (2) | **0.02** | — |
| **Non-GAAP Adjusted EPS** | **$0.99** | $1.48 |

(1) Our Adjusted EPS excludes the Adjusted Net Income of our Held for Sale or Sold segment.

(2) Represents the impact of using diluted weighted-average number of common shares outstanding (55.7 million shares for the six months ended October 31, 2023) included in the Non-GAAP Adjusted EPS calculation in order to apply the dilutive impact on adjusted net income due to the effect of unvested restricted stock units and other stock awards. This impact occurs when a US GAAP net loss is reported and the effect of using dilutive shares is antidilutive.

On a constant currency basis, Adjusted EPS decreased 30% primarily due to a decrease in Adjusted Operating Income, and to a lesser extent, higher interest expense and lower pension income, partially offset by lower Adjusted Income Tax Provision.

### SEGMENT OPERATING RESULTS

| RESEARCH Revenue: | Six Months Ended October 31, 2023 | 2022 | % Change Favorable (Unfavorable) | Constant Currency % Change Favorable (Unfavorable) |
| --- | ---: | ---: | ---: | ---: |
| Research Publishing | **$442,743** | $472,164 | (6)% | (7)% |
| Research Solutions | **72,731** | 74,108 | (2)% | (3)% |
| **Total Research Revenue** | **515,474** | 546,272 | (6)% | (7)% |
| Cost of Sales | **141,567** | 142,302 | 1% | 2% |
| Operating Expenses | **238,862** | 236,971 | (1)% | 1% |
| Amortization of Intangible Assets | **22,662** | 23,437 | 3% | 5% |
| Restructuring Charges (see Note 9) | **6,702** | 1,260 | # | # |
| **Contribution to Profit** | **105,681** | 142,302 | (26)% | (26)% |
| Restructuring Charges (see Note 9) | **6,702** | 1,260 | # | # |
| **Adjusted Contribution to Profit** | **112,383** | 143,562 | (22)% | (22)% |
| Depreciation and amortization | **45,880** | 47,185 | 3% | 4% |
| **Adjusted EBITDA** | **$158,263** | $190,747 | (17)% | (18)% |
| Adjusted EBITDA Margin | **30.7%** | 34.9% |  |  |

\# Not meaningful

### Revenue:

Research revenue for the six months ended October 31, 2023 decreased $30.8 million, or 6%, as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 7% as compared with the prior year primarily due to the carryover of the Hindawi publishing disruption experienced in fiscal year 2023. Additionally, to a lesser extent, revenues were unfavorably impacted by soft market conditions for our corporate recruitment offerings. These impacts were partially offset by continued strong growth in our core open access publishing program. Excluding Hindawi, Research revenue was flat. Hindawi’s special issues program was suspended in the third quarter of fiscal year 2023 due to the presence in certain special issues of compromised articles. As a result, Hindawi revenue for the six months ended October 31, 2023 decreased $37.3 million on a constant currency basis as compared with the prior year. For fiscal year 2024, we expect Hindawi revenue to decline $35 million to $40 million. In fiscal year 2025, we expect to begin to recover Hindawi revenue lost. Open access article output declined 39% as compared with the prior year. Excluding Hindawi, open access article output growth was approximately 20% for the six months ended October 31, 2023.

### Adjusted EBITDA:

On a constant currency basis, Adjusted EBITDA decreased 18% as compared with the prior year. This decrease was primarily due to revenue performance as cost of sales and operating expenses declined. Excluding Hindawi, Adjusted EBITDA decreased 1%. On a constant currency basis, Hindawi Adjusted EBITDA for the six months ended October 31, 2023 decreased $31.5 million as compared with the prior year.

| LEARNING: Revenue: | Six Months Ended October 31, 2023 | 2022 | % Change Favorable (Unfavorable) | Constant Currency % Change Favorable (Unfavorable) |
| --- | ---: | ---: | ---: | ---: |
| Academic | **$137,417** | $141,004 | (3)% | (3)% |
| Professional | **120,843** | 118,292 | 2% | 2% |
| **Total Learning Revenue** | **258,260** | 259,296 | 0% | (1)% |
| Cost of Sales | **66,941** | 69,548 | 4% | 4% |
| Operating Expenses | **139,233** | 148,045 | 6% | 7% |
| Amortization of Intangible Assets | **4,548** | 4,386 | (4)% | (4)% |
| Restructuring Charges (see Note 9) | **6,077** | 6,795 | 11% | 11% |
| **Contribution to Profit** | **41,461** | 30,522 | 36% | 36% |
| Restructuring Charges (see Note 9) | **6,077** | 6,795 | 11% | 11% |
| **Adjusted Contribution to Profit** | **47,538** | 37,317 | 27% | 28% |
| Depreciation and amortization | **27,526** | 27,955 | 2% | 2% |
| **Adjusted EBITDA** | **$75,064** | $65,272 | 15% | 15% |
| Adjusted EBITDA Margin | **29.1%** | 25.2% |  |  |

### Revenue:

Learning revenue for the six months ended October 31, 2023 decreased $1.0 million, or was flat as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 1% as compared with the prior year. This was primarily due to a decrease in Academic print sales, partially offset by growth in digital courseware. Professional revenue increased primarily due to professional assessments.

### Adjusted EBITDA:

On a constant currency basis, Adjusted EBITDA increased 15% as compared with the prior year. This increase was primarily due to lower operating expenses, which resulted primarily from lower employee costs after recent restructuring actions and, to a lesser extent, a decrease in travel and entertainment, and the prior year reduction in our provision for credit losses.

#### INDEX

| HELD FOR SALE OR SOLD: | Six Months Ended October 31, 2023 | 2022 | % Change Favorable (Unfavorable) | Constant Currency % Change Favorable (Unfavorable) |
| --- | ---: | ---: | ---: | ---: |
| **Total Held for Sale or Sold Revenue** | **$170,087** | $196,837 | (14)% | (15)% |
| Cost of Sales | **104,207** | 132,483 | 21% | 22% |
| Operating Expenses | **41,693** | 58,717 | 29% | 30% |
| Impairment of Goodwill (see Note 12) | **26,695** | — | # | # |
| Amortization of Intangible Assets | **2,003** | 17,477 | 89% | 88% |
| Restructuring Charges (see Note 9) | **4,645** | 3,773 | (23)% | (23)% |
| **Contribution to Profit** | **(9,156)** | (15,613) | 41% | 39% |
| Restructuring Charges (see Note 9) | **4,645** | 3,773 | (23)% | (23)% |
| Impairment of Goodwill (see Note 12) | **26,695** | — | # | # |
| Accelerated Amortization of an Intangible Asset | **—** | 4,594 | # | # |
| **Adjusted Contribution to Profit** | **22,184** | (7,246) | # | # |
| Depreciation and amortization | **3,437** | 22,900 | 85% | 85% |
| **Adjusted EBITDA** | **$25,621** | $15,654 | 64% | 62% |
| Adjusted EBITDA Margin | **15.1%** | 8.0% |  |  |

\# Not meaningful

### Revenue:

Held for Sale or Sold revenue for the six months ended October 31, 2023 decreased $26.8 million, or 14%, as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 15% as compared with the prior year. This was due to declines in placement revenues, and, to a lesser extent, the disposition of certain businesses in the fourth quarter of fiscal year 2023 and the first quarter of fiscal year 2024. For the six months ended October 31, 2023, placements declined 40% and online enrollment declined 5%.

### Adjusted EBITDA:

On a constant currency basis, Adjusted EBITDA increased 62% as compared with the prior year. This increase was primarily due to lower cost of sales and operating expenses. These declines were largely resulting from restructuring actions in University Services, and lower placement costs.

### CORPORATE EXPENSES:

Corporate expenses for the six months ended October 31, 2023 decreased $8.6 million, or 7%, as compared with the prior year. On a constant currency basis, excluding restructuring charges, these expenses decreased 5%. On a constant currency basis, Adjusted EBITDA decreased 4% as compared with the prior year. This was primarily due to lower technology and occupancy costs, partially offset by higher employee incentive compensation and, to a lesser extent, executive severance costs.

### FISCAL YEAR 2024 TRANSITION YEAR OUTLOOK

Wiley is reaffirming its overall Fiscal 2024 outlook for Adjusted Revenue, Adjusted EBITDA, and Adjusted EPS.

#### (amounts in millions, except Adjusted EPS)

| Metric | Fiscal Year 2023 All Company | Fiscal Year 2023 Ex-Divestitures | Fiscal Year 2024 Outlook Ex-Divestitures |
| --- | ---: | ---: | --- |
| **Adjusted Revenue (1)** | **$2,020** | **$1,627** | **$1,580 to $1,630** |
| Research |  | $1,080 | Flat to low-single digit decline (+2% excluding Hindawi) |
| Learning |  | $547 | Flat to low-single digit increase |
| **Adjusted EBITDA (1)** | **$422** | **$379** | **$305 to $330** |
| **Adjusted EPS (1)** | **$3.84** | **$3.48** | **$2.05 to $2.40** |

(1) Wiley’s fiscal year 2024 outlook (Adjusted Revenue, Adjusted EBITDA, and Adjusted EPS) exclude businesses held-for-sale, including University Services, Wiley Edge (formerly Talent Development), and CrossKnowledge, as well as those sold in fiscal year 2023, Test Prep and Advancement Courses.

### Fiscal Year 2024 Transition Year Outlook

- **Adjusted Revenue –** reaffirming overall Adjusted Revenue guidance with Research moderately below expectations due to the lag between submissions and publication and continued market softness in recruiting, and Learning ahead of expectations due to an improved environment for academic and professional publishing, driven by better execution in our channels and continued uptake of our inclusive access model and zyBooks courseware. We now expect Research growth excluding Hindawi of 2%, down from 3% originally. Note, Adjusted Revenue excludes businesses held for sale or sold.
- **Adjusted EBITDA –** reaffirming due to projected revenue performance, incentive compensation resetting, and wage inflation offsetting expected restructuring savings.
- **Adjusted EPS –** reaffirming due to lower adjusted operating income and higher interest expense.

The Company is not providing a Free Cash Flow outlook due to the uncertainty around the timing of divestitures and the size and scope of restructuring payments.

### 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 for at least the next twelve months. Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used to fund shareholder dividends. Other discretionary uses of cash flow include share repurchases and acquisitions to complement our portfolio of businesses. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our durable business results and a global cash management strategy that considers liquidity management, economic factors and tax considerations. Our cash and cash equivalents are maintained at a number of financial institutions. To mitigate the risk of uninsured balances, we select financial institutions based on their credit ratings and financial strength, and we perform ongoing evaluations of these institutions to limit our concentration risk exposure to any financial institution.

As of October 31, 2023, we had cash and cash equivalents of $99.5 million, including cash and cash equivalents classified as held-for-sale of $16.3 million, of which approximately $97.3 million, or 98%, was located outside the US. Maintenance of these cash and cash equivalent balances outside the US does not have a material impact on the liquidity or capital resources of our operations. We intend to repatriate earnings from our non-US subsidiaries, and to the extent we repatriate these funds to the US, we will be required to pay income taxes in various US state and local jurisdictions and applicable non-US withholding or similar taxes in the periods in which such repatriation occurs. Accordingly, as of October 31, 2023, we have recorded a deferred tax liability of approximately $2.3 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 15, “Debt and Available Credit Facilities” for more details on the amendment. The Amended and Restated CA provided for senior unsecured credit facilities comprised of a (i) five-year revolving credit facility in an aggregate principal amount up to $1.115 billion, which matures November 2027, (ii) a five-year term loan A facility consisting of $200 million, which matures November 2027, and (iii) $185 million aggregate principal amount revolving credit facility through May 2024.

As of October 31, 2023, we had approximately $942.6 million of debt outstanding, net of unamortized issuance costs of $0.7 million, and approximately $552.7 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 October 31, 2023.

### Analysis of Historical Cash Flows

The following table shows the changes in our Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended October 31, 2023 and 2022.

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| Net cash used in operating activities | **$(83,486)** | $(76,196) |
| Net cash used in investing activities | **(51,917)** | (48,293) |
| Net cash provided by financing activities | **129,702** | 151,603 |
| Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash | **$(1,943)** | $(8,784) |

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, 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:

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| **Net cash used in operating activities** | **$(83,486)** | $(76,196) |
| Less: Additions to technology, property and equipment | **(40,321)** | (38,530) |
| Less: Product development spending | **(8,168)** | (11,445) |
| **Free cash flow less product development spending** | **$(131,975)** | $(126,171) |

### Net Cash Used in Operating Activities

The following is a summary of the $7.3 million change in Net cash used in operating activities for the six months ended October 31, 2023 compared with the six months ended October 31, 2022 (amounts in millions).

|  |  |
| --- | ---: |
| **Net cash used in operating activities – Six months ended October 31, 2022** | $(76.2) |
| Net loss adjusted for items to reconcile net loss to net cash used in operating activities, which would include such noncash items as depreciation and amortization, impairment of goodwill, impairment charge related to assets held-for-sale and loss on sale of a business, restructuring charges, and the change in deferred taxes | (29.6) |
| Working capital changes: |  |
| Accounts receivable, net and contract liabilities | 11.9 |
| Accounts payable and accrued royalties | (21.0) |
| Changes in other assets and liabilities | 31.4 |
| **Net cash used in operating activities – Six months ended October 31, 2023** | **$(83.5)** |

The favorable change in accounts receivable, net and contract liabilities was primarily due to lower revenue, and the timing of invoicing and collections with customers.

The unfavorable change in accounts payable and accrued royalties was primarily due to the timing of payments.

The favorable changes in other assets and liabilities noted in the table above was primarily due to a decrease in employee-related costs, including lower payments for annual incentive compensation in fiscal year 2024 related to the prior fiscal year, partially offset by an increase in restructuring payments.

Our negative working capital (current assets less current liabilities) was $184.7 million and $354.3 million as of October 31, 2023 and April 30, 2023, respectively. This $169.6 million change in negative working capital was primarily due to the seasonality of our business. 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 income when the products are shipped or made available online to the customers over the term of the subscription. Current liabilities as of October 31, 2023 and as of April 30, 2023 includes $235.8 million and $504.7 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

Net cash used in investing activities for the six months ended October 31, 2023 was $51.9 million compared to $48.3 million in the prior year. The increase in cash used in investing activities was primarily due to an increase in cash used of $2.2 million for the acquisitions of publication rights; an increase of $1.8 million for additions of technology, property and equipment; and an increase of $1.4 million in cash used to acquire businesses, partially offset by a decrease of $3.3 million in cash used for product development spending.

### Net Cash Provided By Financing Activities

Net cash provided by financing activities was $129.7 million for the six months ended October 31, 2023 compared to $151.6 million for the six months ended October 31, 2022. This decrease in cash provided by financing activities was primarily due to a decrease in net borrowings of long-term debt of $30.2 million and, to a lesser extent, $5.0 million increase in cash used to repurchase shares, partially offset by a $13.0 million change from book overdrafts.

In the six months ended October 31, 2023, we increased our quarterly dividend to shareholders to $1.40 per share annualized versus $1.39 per share annualized in the prior year.

The following table summarizes the shares repurchased of Class A and Class B Common Stock for the six months ended October 31, 2023 and 2022 (shares in thousands):

|  | Six Months Ended October 31, 2023 | 2022 |
| --- | ---: | ---: |
| Shares repurchased – Class A | **668** | 382 |
| Shares repurchased – Class B | **1** | — |
| Average price – Class A and Class B | **$33.64** | $45.84 |

61

## Market risk

As filed, 5,754 characters.

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 16, “Derivatives Instruments and Hedging Activities,” of the Notes to Unaudited Condensed Consolidated Financial Statements under the caption “Interest Rate Contracts,” is incorporated herein by reference.

On an annual basis, a hypothetical one percent change in interest rates for the $443.3 million of unhedged variable rate debt as of October 31, 2023 would affect net income and cash flow by approximately $3.4 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 are translated into US dollars using weighted-average exchange rates for revenues and expenses.

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 Accumulated other comprehensive loss, net of tax within Shareholders’ Equity under the caption Foreign currency translation adjustment. During the three and six months ended October 31, 2023, we recorded foreign currency translation losses in Accumulated other comprehensive loss, net of tax of approximately $(33.9) million and $(22.7) million, respectively, 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 three and six months ended October 31, 2022, we recorded foreign currency translation losses in Accumulated other comprehensive loss, net of tax of approximately $(36.1) million and $(55.9) million, respectively, primarily as a result of the fluctuations of the US dollar relative to the British pound sterling and, to a lesser extent the euro.

Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses on the Unaudited Condensed Consolidated Statements of Net (Loss) Income 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 16, “Derivatives Instruments and Hedging Activities,” of the Notes to Unaudited Condensed Consolidated Financial Statements under the caption “Foreign Currency Contracts,” is incorporated herein by reference.

### Sales Return Reserves

The estimated allowance for print book sales returns is based upon historical return patterns, as well as current market trends in the businesses in which we operate. In connection with the estimated sales return reserves, we also include a related increase to inventory and a reduction to accrued royalties as a result of the expected returns.

The reserves are reflected in the following accounts of our Unaudited Condensed Consolidated Statements of Financial Position:

|  | October 31, 2023 | April 30, 2023 |
| --- | ---: | ---: |
| Increase in Inventories, net | **$7,603** | $6,923 |
| Decrease in Accrued royalties | **$(3,217)** | $(3,240) |
| Increase in Contract liabilities | **$26,220** | $24,582 |
| Print book sales return reserve net liability balance | **$(15,400)** | $(14,419) |

A one percent change in the estimated sales return rate could affect net income by approximately $0.6 million. A change in the pattern or trends in returns could affect the estimated allowance.

### Customer Credit Risk

In the journal publishing business, subscriptions are primarily 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 15% of total annual consolidated revenue, and no one affiliated group of subscription agents 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 bookstore chains. No single book customer accounts for more than 6% of total consolidated revenue and 20% of accounts receivable at October 31, 2023. The top 10 book customers account for approximately 12% of total consolidated revenue and approximately 46% of accounts receivable at October 31, 2023.

## Controls and procedures

As filed, 1,355 characters.

The Company’s Chief Executive Officer and Chief Financial Officer, together with the Chief Accounting Officer and other members of the Company’s management, have conducted an evaluation of the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission's rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) during the quarter ended October 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 294 characters.

See Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the fiscal year ended April 30, 2023. Except as required by the federal securities law, we undertake no obligation to update or revise any risk factor, whether as a result of new information, future events or otherwise.

Filed Dec 7, 2023.
Source: SEC EDGAR, the filing index for accession 0000107140-23-000239. Last ingested by Listed: Nov 3, 2026, 22:24 ET. No prices; not investment advice.