Wiley (WLY)

Academic publishing company John Wiley & Sons (NYSE:WLY) posted $396.8 million of revenue in Q2 CY2025, down 1.7% year on year. Its GAAP profit of $0.22 per share increased from -$0.03 in the same quarter last year.

Company Overview

With roots dating back to 1807 when Charles Wiley opened a small printing shop in Manhattan, John Wiley & Sons (NYSE:WLY) is a global academic publisher that provides scientific journals, books, digital courseware, and knowledge solutions for researchers, students, and professionals.

The sector faces structural headwinds from declining linear TV viewership, shifts in advertising spend toward digital platforms, and ongoing challenges in monetizing print and broadcast content. However, for companies that invest wisely, tailwinds can include AI, the power of which can result in more personalized content creation and more detailed audience analysis. These can create a flywheel of success where one feeds into the other. Still there are outstanding questions around AI-generated content oversight, and the regulatory framework around this could evolve in unseen ways over the next few years.

Wiley competes with other academic and professional publishers including Elsevier (owned by RELX Group, NYSE:RELX), Springer Nature (privately held), Taylor & Francis (owned by Informa, LSE:INF), McGraw Hill (privately held), and Pearson (NYSE:PSO).

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $1.67 billion in revenue over the past 12 months, Wiley is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.

As you can see below, Wiley’s revenue declined by 1.9% per year over the last five years, a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Wiley’s recent performance shows its demand remained suppressed as its revenue has declined by 8.2% annually over the last two years.

We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Wiley has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 11.9%, higher than the broader business services sector.

Looking at the trend in its profitability, Wiley’s operating margin rose by 2.1 percentage points over the last five years, showing its efficiency has improved.

This quarter, Wiley generated an operating margin profit margin of 7.8%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Wiley’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Wiley, its two-year annual EPS growth of 91.8% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q2, Wiley reported EPS of $0.22, up from negative $0.03 in the same quarter last year. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Wiley has shown robust cash profitability, giving it an edge over its competitors and the ability to reinvest or return capital to investors. The company’s free cash flow margin averaged 10.9% over the last five years, quite impressive for a business services business.

Taking a step back, we can see that Wiley’s margin dropped by 7.3 percentage points during that time. If its declines continue, it could signal increasing investment needs and capital intensity.

Wiley burned through $99.9 million of cash in Q2, equivalent to a negative 25.2% margin. The company’s cash burn was similar to its $103.2 million of lost cash in the same quarter last year. These numbers deviate from its longer-term margin, indicating it is a seasonal business that must build up inventory during certain quarters.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Wiley historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 10.8%, somewhat low compared to the best business services companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. On average, Wiley’s ROIC increased by 1.7 percentage points annually over the last few years. This is a good sign, and we hope the company can continue improving.

Wiley reported $81.85 million of cash and $924 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $395.5 million of EBITDA over the last 12 months, we view Wiley’s 2.1× net-debt-to-EBITDA ratio as safe. We also see its $28.72 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We struggled to find many positives in these results. Overall, this quarter could have been better. The stock remained flat at $40 immediately following the results.

Updated: November 16, 2025 at 9:02 PM EST

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own Wiley, you should also grasp the company’s longer-term business quality and valuation.

We see the value of companies helping their customers, but in the case of Wiley, we’re out. To kick things off, its revenue has declined over the last five years. And while its strong free cash flow generation allows it to invest in growth initiatives while maintaining an ample cushion, the downside is its cash profitability fell over the last five years. On top of that, its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

Wiley’s EV-to-EBITDA ratio based on the next 12 months is 5.6x. This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better opportunities elsewhere.

Wall Street analysts have a consensus one-year price target of $60 on the company (compared to the current share price of $35.60).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.