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The call emphasizes strong operational progress: record margin expansion, significant free cash flow growth, improved leverage, accelerating research and AI momentum, and a strategic acquisition (Emerald) that deepens content and recurring revenue. Near-term challenges center on the learning segment declines, some timing-driven cash collection effects, and short-term dilution from Emerald integration and Q1 AI comparables. On balance, the positive financial results, clear AI revenue trajectory, and disciplined capital allocation outweigh the highlighted headwinds, positioning the company for continued margin and cash flow improvement over the medium term.
Wiley guided fiscal 2027 to organic revenue growth of low- to mid-single digits (research at mid-single digits) excluding about $78M of anticipated Emerald revenue that is included in other metrics; adjusted EBITDA margin of 26.5%–27.5% (up from 26.2% in FY26); adjusted EPS $4.60–$5.05 (vs. $4.19 in FY26, including ~ $0.10 contribution from Emerald); free cash flow of $205M (vs. $195M in FY26) which factors in roughly $15M of year‑1 Emerald dilution, ~$15M of higher CapEx, restructuring costs and higher cash taxes; management flagged a Q1 timing headwind of ~ $25M tied to prior‑year AI projects partly offset by ~ $14M of Emerald revenue from two months, expects Emerald to be modestly accretive to adjusted EPS in year 1 and accretive to FCF in year 2 with ROIC above WACC by year 2, targets $30M of run‑rate cost synergies by year 3 (material savings in year 2), and notes pro forma leverage of ~2.1x (within a 1.5x–2.5x target range).
Adjusted EBITDA margin rose 220 bps to 26.2% for fiscal 2026 (all-time high); adjusted operating margin rose 260 bps to 17.7% (all-time high). Q4 adjusted EBITDA margin improved ~480 bps to 33.2% and adjusted operating margin improved ~520 bps to 25.3%.
Free cash flow increased 55% to $195 million; free cash flow conversion improved from 32% to 44% year over year. CapEx declined from $77 million to $65 million.
Returned $174 million to shareholders in fiscal 2026 (up from $137 million), including record share repurchases of $100 million (Q4 repurchases of $30 million). Maintained dividend increases (30th consecutive year).
Research revenue grew 4% in fiscal 2026 (publishing up 3% full year; solutions up 6%). Key research KPIs: article submissions +25% and output +11% (well ahead of industry output growth of 6–8%). Q4 research up 5%.
Total AI revenue grew to $49 million in fiscal 2026 (up from $23 million in fiscal 2024 and from ~$40 million cited elsewhere), with a path to >$50 million in fiscal 2027. Recurring AI revenue scaled from roughly $1 million to $8 million in fiscal 2026 and management expects recurring revenue to ~2x–3x next year. Corporate AI customers increased to 19 from 10 last quarter (including 7 of the top 10 global pharma companies).
Acquired Emerald for roughly $450–452 million (~7x adjusted EBITDA on a synergized basis). Emerald: ~$85 million revenue, >90% recurring revenue, customer retention >99%, submissions +28%, ~500 journals and substantial backfile assets. Expected $30 million cost synergies by year 3; modestly accretive to adjusted EPS in year 1 and free cash flow accretive in year 2; pro forma leverage ~2.1x within target range.
Signed strategic partnerships (IQVIA, Anthropic Claude for Life Sciences, AWS Life Sciences, Microsoft Dragon Copilot). Nexus licensing network generated $19 million from partners; launched Nexus with 41 partners and ~100k book titles. Expanded mass spectral registry to nearly 1 million reference spectra; clinical outcome assessments (COAs) grew 68% to $11 million.
Corporate expenses down 15% year over year (22% in Q4); corporate unallocated expenses down $23 million full year. Tech transformation and Virtusa partnership expected to shift spend to product development and deliver structural cost savings and faster product velocity.
Net debt ratio improved from 1.8x to 1.4x at year end; after Emerald pro forma leverage ~2.1x. Fiscal 2027 guidance: organic revenue low-to-mid single digits, adjusted EBITDA margin 26.5%–27.5%, adjusted EPS $4.60–$5.05 (vs $4.19), and free cash flow ~$205 million.
Good morning, and welcome to Wiley’s fiscal 2026 fourth-quarter earnings call. To ask a question, please press 1 to raise your hand. To withdraw your question, press 1 again. At this time, I would like to introduce Wiley's vice president of investor relations, Brian Campbell. Please go ahead.
Good morning, everyone. With me today are Matthew S. Kissner, president and CEO, and Craig Albright, executive vice president and CFO. Our comments and responses reflect management views as of today, and will include forward looking statements. Actual results may differ materially from those statements. The company does not undertake any obligation to update them to reflect subsequent events. Also, Wiley provides non GAAP measures as a supplement to evaluate underlying operating profitability and performance trends. These measures do not have standardized meanings prescribed by US GAAP, and therefore, may not be comparable to similar measures used by other companies nor should they be viewed as alternatives to measures under GAAP.
We will refer to non GAAP metrics on the call, variances are on a year over year basis, will exclude divested assets and the impact of currency. Additional information is included in our filings with the SEC, A copy of this presentation and transcript will be available at investors.wiley.com. I will now turn the call over to Matthew S. Kissner.
Thank you, Brian. Hello, everyone, and welcome to Wiley's fourth quarter and full year earnings update. Fiscal 26 was our breakout year. We delivered record margins and exceptional cash flow growth. Accelerated our lead...