John Wiley & Sons Inc.

09/04/2026 | Press release | Distributed by Public on 09/04/2026 08:36

Quarterly Report for Quarter Ending July 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information in our Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read together with our 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 2026 Form 10-K and our Consolidated Financial Statements and related notes set forth in Item 8 of Part II of our 2026 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 global leader in authoritative content and research intelligence for the advancement of scientific discovery, innovation, and learning. The Company's content, services, platforms, and knowledge networks are tailored to meet the evolving needs of its customers and partners, including institutions, societies, corporations, researchers, students, instructors, and other professionals. Wiley is a predominantly digital company with over 85% of its revenue for the year ended April 30, 2026 generated by digital products and services. For the year ended April 30, 2026, 48% of revenue is recurring which includes revenue that is contractually obligated or set to recur with a high degree of certainty.
We report financial information for the following segments, as well as a Corporate category, which includes certain costs that are not allocated to the reportable segments:
•Research includes the reporting lines of Research Publishing and Research Solutions;
•Learning includes the Academic and Professional reporting lines and consists of publishing, courseware, and assessments.
On June 1, 2026, we acquired Emerald Publishing, a research publisher headquartered in Leeds, England, with a portfolio of over 480 peer-reviewed journals, 8,000 books, and 3,000 business cases across disciplines with particular emphasis on economics, business, finance, engineering, and the social sciences. The preliminary fair value of the consideration transferred was $462.7 million which included $462.1 million of cash at acquisition and $0.6 million to be paid after the acquisition date. We financed the cash payment with available cash and proceeds from our revolving credit facility. The acquisition was made to extend our scale in our Research business and to strengthen our proprietary content advantage in AI. See Note 3, "Acquisition and Divestitures" for further details.
Through the Research segment, we provide peer-reviewed scientific, technical, and medical (STM) journals, content platforms, and related publishing and audience solutions to academic, corporate, and government customers, academic societies, and individual researchers. As a result of the Emerald Publishing acquisition, the Research segment also includes additional journals, books, and business cases across disciplines, with particular emphasis on economics, business, finance, engineering, and the social sciences. The Learning segment provides scientific, professional, and education print and digital books to researchers, professionals, and students, digital courseware for instructors and students, and assessment services to businesses and professionals.
Wiley's business strategies are tightly aligned with consistent long-term growth trends, including (1) ever-increasing global research and development investment and researcher productivity gains from artificial intelligence (AI), leading to growth in scientific research output and the number of institutions and researchers worldwide, and (2) the ever-increasing need for authoritative content to fuel AI models and applications. These strategies include expanding our publishing program and journal portfolio to meet the global demand for peer-reviewed research, driving additional value in our subscription-based models for universities and corporations, volume-based models for open access, content licensing opportunities for applications in data and AI analytics, and content platform and service offerings for corporations and societies. AI and data analytics is our emerging growth engine, leveraging our proprietary content, data, and partnership ecosystem for corporate models and applications. Learning strategies include selectively scaling high-value digital content, courseware, and assessments to meet targeted opportunities in education and professional development.
INDEX
RESULTS OF OPERATIONS - THREE MONTHS ENDED JULY 31, 2026
FIRST QUARTER SUMMARY
•US GAAP Results: Consolidated Revenue of $386.4 million (-3%, compared with the prior year), Operating Income of $2.9 million (-91%, compared with the prior year), and Diluted Loss per Share of $(0.23) (compared with the prior year diluted earnings per share of $0.22).
•Adjusted Results at Constant Currency: Revenue of $386.4 million (-3% compared with the prior year), Adjusted Operating Income of $30.9 million (-9%, compared with the prior year), Adjusted EBITDA of $67.8 million (-4%, compared with the prior year), and Adjusted EPS of $0.44 (-10%, compared with the prior year).
CONSOLIDATED RESULTS OF OPERATIONS
Revenue:
Revenue for the three months ended July 31, 2026 of $386.4 million decreased $10.4 million, or 3%, as compared with the prior year and on a constant currency basis including the contributions from Emerald Publishing of $13.3 million which was acquired on June 1, 2026.
AI license revenue was $13.7 million for the three months ended July 31, 2026 as compared with $28.9 million in the prior year. The period to period comparability of AI license revenue can fluctuate due to timing and the nature of the underlying content.
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 July 31, 2026 of $100.9 million decreased $8.4 million, or 8% as compared with the prior year and on a constant currency basis primarily due to lower royalty costs. The prior year included higher royalty costs related to AI license revenue from content licensed from other publishers.
Operating and Administrative Expenses:
Operating and administrative expenses for the three months ended July 31, 2026 of $238.5 million decreased $1.8 million, or 1% as compared with the prior year and on a constant currency basis. The decline was primarily due to restructuring and cost savings initiatives resulting in lower employee costs, and lower professional fees due to timing. This was partially offset by the incremental impact from the acquisition of Emerald Publishing and, to a lesser extent, higher bad debt expense.
Acquisition and Integration Related Costs:
We recorded acquisition and integration related costs in the three months ended July 31, 2026 of $11.0 million in connection with the acquisition of Emerald Publishing. These charges are reflected in Acquisition and integration related costs on our Unaudited Condensed Consolidated Statements of Net (Loss) Income. See Note 3, "Acquisition and Divestitures" for more details on the acquisition and integration related costs. We expect to continue incurring integration-related costs as we complete the integration of Emerald Publishing's operations, and the amount and timing of future costs will depend on the pace of integration activities.
For the impact of acquisition and integration related costs on diluted (loss) earnings per share, see the section below, "Diluted (Loss) Earnings per Share."
Restructuring and Related Charges:
We recorded restructuring and related charges in the three months ended July 31, 2026 and 2025 of $16.5 million and $3.0 million, respectively. These charges are reflected in Restructuring and related charges on our Unaudited Condensed Consolidated Statements of Net (Loss) Income. The three months ended July 31, 2025 includes a credit of $(0.1) million related to the Business Optimization Program, a prior restructuring initiative.
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Global Restructuring Program
Beginning in fiscal year 2023, the Company initiated the Global Restructuring Program. The program was expanded in fiscal year 2024 to focus on our strongest and most profitable businesses and largest market opportunities in Research and Learning, streamline our organization, and rightsize our cost structure. Under this program, we reduced our real estate square footage occupancy by approximately 35%. The program was further expanded in the fourth quarter of fiscal year 2025 to align technology costs and other corporate expenses following the completion of our divestitures, and again in the first quarter of fiscal year 2027 to include additional portfolio and cost optimization actions. As a result of these initiatives, this expanded program will include severance related charges, consulting, facility-related, and other costs.
We anticipate to yield annualized cost savings of approximately $125 million, with approximately $120 million of that to be realized in fiscal year 2027 from actions taken starting in fiscal year 2024.
For the three months ended July 31, 2026 and 2025, we recorded pretax restructuring charges of $16.5 million and $3.1 million, respectively, related to this program.
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."
Amortization of Intangible Assets:
Amortization of intangible assets was $16.5 million for the three months ended July 31, 2026, an increase of $3.2 million, or 25%, as compared with the prior year and on a constant currency basis. The increase was primarily due to the amortization expense related to acquired definite lived intangible assets, primarily those acquired as part of the Emerald acquisition, partially offset by the completion of amortization of certain acquired intangible assets.
Operating Income, Adjusted Operating Income (OI) and Adjusted EBITDA:
Operating income for the three months ended July 31, 2026 of $2.9 million decreased $28.0 million, or 91% as compared with the prior year and on a constant currency basis. The decrease was primarily due to higher restructuring charges, acquisition and integration related costs in fiscal year 2027, and lower revenue. This was partially offset by lower cost of sales.
Adjusted OI on a constant currency basis for the three months ended July 31, 2026 decreased 9%, as compared with the prior year. The decrease was primarily due to lower revenue, partially offset by lower cost of sales and, to a lesser extent, lower operating and administrative expenses.
Adjusted EBITDA on a constant currency basis for the three months ended July 31, 2026 decreased 4%, as compared with the prior year. The decrease was primarily due to lower revenue, partially offset by lower cost of sales.
Adjusted OI
Below is a reconciliation of our consolidated US GAAP Operating Income to Non-GAAP Adjusted OI:
Three Months Ended
July 31,
2026 2025
US GAAP Operating Income $ 2,937 $ 30,963
Adjustments:
Restructuring and related charges 16,525 3,038
Acquisition and integration related costs
11,039 -
Accelerated amortization of an intangible asset
404 -
Non-GAAP Adjusted OI $ 30,905 $ 34,001
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Adjusted EBITDA
Below is a reconciliation of our consolidated US GAAP Net (Loss) Income to Non-GAAP EBITDA and Adjusted EBITDA:
Three Months Ended
July 31,
2026 2025
Net (Loss) Income $ (11,727) $ 11,700
Interest expense 13,926 11,042
(Benefit) provision for income taxes (850) 6,007
Depreciation and amortization 37,321 36,446
Non-GAAP EBITDA 38,670 65,195
Acquisition and integration related costs
11,039 -
Restructuring and related charges 16,525 3,038
Net foreign exchange transaction losses 397 971
Net (gain) loss on sale of businesses and assets (1,113) 1,116
Other expense, net 2,304 127
Non-GAAP Adjusted EBITDA $ 67,822 $ 70,447
Interest Expense:
Interest expense for the three months ended July 31, 2026 was $13.9 million compared with the prior year of $11.0 million. The increase was primarily due to higher debt outstanding primarily due to the funding of the Emerald acquisition, partially offset by a lower weighted average effective interest rate.
Net Foreign Exchange Transaction Losses:
Net foreign exchange transaction losses of $(0.4) million for the three months ended July 31, 2026 were primarily due to losses on our foreign currency denominated third-party receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar.
Net foreign exchange transaction losses of $(1.0) million for the three months ended July 31, 2025 were primarily due to losses on our foreign currency denominated third-party receivable and payable balances and, to a lesser extent, losses on our foreign currency denominated intercompany accounts receivable and payable balances due to the impact of the change in average foreign exchange rates as compared to the US dollar.
Net Gain (Loss) on Sale of Businesses and Assets:
We recorded net pretax gain (loss) on sale of businesses and assets as follows:
Three Months Ended
July 31,
2026 2025
University Services
$ - $ (934)
Other disposition activity
1,113 (182)
Net gain (loss) on sale of businesses and assets
$ 1,113 $ (1,116)
These charges are reflected in Net gain (loss) on sale of businesses and assets on our Unaudited Condensed Consolidated Statements of Net (Loss) Income.
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Other Expense, Net:
Other expense, net was $(2.3) million for the three months ended July 31, 2026, compared to $(0.1) million in the prior year. The increase was primarily due to foregone interest income due to the sale of the University Services Seller Note on June 5, 2025 and the cessation of interest income on the Wiley Edge Seller Note beginning on January 5, 2026.
(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
July 31,
2026 2025
US GAAP (Loss) Income Before Taxes $ (12,577) $ 17,707
Pretax Impact of Adjustments:
Acquisition and integration related costs
11,039 -
Restructuring and related charges 16,525 3,038
Foreign exchange losses (gains) on intercompany transactions 16 (440)
Amortization of acquired intangible assets 16,455 13,210
Net (gain) loss on sale of businesses and assets (1,113) 1,116
Non-GAAP Adjusted Income Before Taxes $ 30,345 $ 34,631
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
July 31,
2026 2025
US GAAP Income Tax (Benefit) Provision
$ (850) $ 6,007
Income Tax Impact of Adjustments(1):
Acquisition and integration related costs
936 -
Restructuring and related charges 3,313 519
Foreign exchange losses (gains) intercompany transactions 10 (750)
Amortization of acquired intangible assets 4,327 2,068
Net (gain) loss on sale of businesses and assets (259) 54
Income Tax Adjustments
Impact of valuation allowance on the US GAAP effective tax rate
- 166
Non-GAAP Adjusted Income Tax Provision $ 7,477 $ 8,064
US GAAP Effective Tax Rate 6.8 % 33.9 %
Non-GAAP Adjusted Effective Tax Rate 24.6 % 23.3 %
(1)
For the three months ended July 31, 2026, the tax impact was $4.0 million of current taxes and $4.3 million of deferred taxes. For the three months ended and July 31, 2025, substantially all of the tax impact was from deferred taxes.
The US GAAP effective tax rate for the three months ended July 31, 2026 was 6.8% compared to 33.9% for the three months ended July 31, 2025. The US GAAP effective tax rate for the three months ended July 31, 2026 was lower than the prior year primarily due to a change in jurisdictional mix of earnings and acquisition and integration related costs incurred this quarter in connection with the acquisition of Emerald Publishing.
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The Non-GAAP Adjusted Effective Tax Rate was 24.6% for the three months ended July 31, 2026 compared to 23.3% for the three months ended July 31, 2025. The increase in the Non-GAAP Adjusted Effective Tax Rate for the three months ended July 31, 2026 compared with the prior year was primarily due to a change in jurisdictional mix of earnings.
Enactment of the "One Big Beautiful Bill Act" (OBBBA)
On July 4, 2025, President Trump signed into law the OBBBA. Key corporate tax provisions of the OBBBA include a handful of elective tax measures such as restoration of 100% bonus depreciation, the introduction of new Section 174A permitting immediate expensing of domestic research and experimental (R&E) expenditures. Other tax measures include modifications to Section 163(j) interest expense limitations, updates to the rules governing global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII), amendments to energy credit provisions, and the expansion of Section 162(m) aggregation requirements.
Under US GAAP, the effects of changes in tax laws are recognized in the period in which the new law is enacted. Upon assessment of the OBBBA, we determined the impact of these to be insignificant and reflected these in our financial statements using management's best estimate starting in the first quarter of fiscal year 2026. Certain provisions of OBBBA became effective in fiscal year 2027, which we reflected this quarter using management's best estimate but are deemed to be insignificant. We are continuing to evaluate the impact of the OBBBA on future periods.
Diluted (Loss) Earnings per Share:
Diluted loss per share for the three months ended July 31, 2026 was $(0.23) per share compared with earnings per share of $0.22 per share for the three months ended July 31, 2025. This decrease was primarily due to a decrease in operating income, partially offset by an income tax benefit in fiscal year 2027 compared to an income tax provision in fiscal year 2026.
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
July 31,
2026 2025
US GAAP (Loss) Earnings Per Share $ (0.23) $ 0.22
Adjustments:
Acquisition and integration related costs
0.20 -
Restructuring and related charges 0.26 0.05
Amortization of acquired intangible assets 0.24 0.20
Net (gain) loss on sale of businesses and assets (0.02) 0.02
EPS impact of using weighted-average dilutive shares for adjusted EPS calculation (1)
(0.01) -
Non-GAAP Adjusted EPS $ 0.44 $ 0.49
(1)
Represents the impact of using diluted weighted-average number of common shares outstanding (51.5 million for the three months ended July 31, 2026) 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 10% primarily due to lower Adjusted Operating Income in Learning, an increase in interest expense and, to a lesser extent, lower interest income.
INDEX
SEGMENT OPERATING RESULTS
Three Months Ended
July 31, 		% Change
Favorable
(Unfavorable) 		Constant Currency
% Change
Favorable
(Unfavorable)
RESEARCH 2026 2025
Revenue:
Research Publishing $ 258,886 $ 231,827 12 % 12 %
Research Solutions 34,604 49,865 (31) % (30) %
Total Research Revenue 293,490 281,692 4 % 4 %
Cost of sales 75,956 80,753 6 % 6 %
Direct expenses 94,729 88,587 (7) % (7) %
Allocated Corporate expenses 47,685 44,981 (6) % (6) %
Amortization of intangible assets 14,143 11,123 (27) % (28) %
Adjusted Operating Income 60,977 56,248 8 % 8 %
Depreciation and amortization 25,919 23,385 (11) % (11) %
Adjusted EBITDA $ 86,896 $ 79,633 9 % 9 %
Adjusted EBITDA Margin 29.6% 28.3%
Revenue:
Research revenue for the three months ended July 31, 2026 increased $11.8 million, or 4%, as compared with the prior year on a reported and constant currency basis including the contributions from Emerald Publishing of $13.3 million, which was acquired on June 1, 2026.
Research Publishing revenue on a constant currency basis increased 12% as compared with the prior year primarily due to the contributions from Emerald Publishing and, to a lesser extent, an increase in AI license revenue, and continued growth in author-funded open access. Excluding the contributions from the acquisition, Research Publishing revenue increased 6% on a constant currency basis. Research Solutions revenue on a constant currency basis decreased 30% as compared with the prior year primarily due to a decrease in AI license revenue which includes content licensed from other publishers.
Research AI license revenue for the three months ended July 31, 2026 was $13.7 million, which included $10.1 million in Research Publishing and $3.6 million in Research Solutions, as compared with $15.8 million in the prior year, which included $0.1 million in Research Publishing and $15.7 million in Research Solutions. Open access article output growth was approximately 20% as compared with the prior year.
Adjusted EBITDA:
On a constant currency basis, Adjusted EBITDA increased 9% as compared with the prior year. This increase was primarily due to lower royalty costs, and the $5.0 million contribution from Emerald Publishing. The prior year included higher royalty costs related to AI license revenue from content licensed from other publishers
INDEX
Three Months Ended
July 31,
% Change
Favorable
(Unfavorable)
Constant Currency
% Change
Favorable
(Unfavorable)
LEARNING 2026 2025
Revenue:
Academic $ 44,741 $ 55,472 (19) % (20) %
Professional 48,130 59,636 (19) % (20) %
Total Learning Revenue 92,871 115,108 (19) % (20) %
Cost of sales 24,915 28,506 13 % 13 %
Direct expenses 35,843 34,581 (4) % (3) %
Allocated Corporate expenses 25,311 28,279 10 % 11 %
Amortization of intangible assets 1,908 2,087 9 % 9 %
Adjusted Operating Income 4,894 21,655 (77) % (78) %
Depreciation and amortization 9,136 9,844 7 % 8 %
Adjusted EBITDA $ 14,030 $ 31,499 (55) % (56) %
Adjusted EBITDA Margin 15.1% 27.4%
Revenue:
Learning revenue decreased $22.2 million, or 19%, as compared with the prior year on a reported basis. On a constant currency basis, revenue decreased 20% as compared with the prior year. Excluding AI license revenue, Learning revenue on a constant currency basis decreased 9%.
Academic revenue on a constant currency basis decreased 20% as compared with the prior year primarily due to a decrease in AI license revenue and, to a lesser extent, a decline in print book sales. Professional revenue on a constant currency basis decreased 20% as compared with the prior year primarily due to a decrease in AI license revenue, and a decline in print and digital revenue due to the prior year timing of inventory reductions at an online retailer, along with a continued slowdown in consumer and corporate spending.
Learning AI license revenue for the three months ended July 31, 2026 was zero as compared with $13.1 million in the prior year, which included $7.8 million in Academic and $5.3 million in Professional.
Adjusted EBITDA:
On a constant currency basis, Adjusted EBITDA decreased 56% as compared with the prior year. This decrease was primarily due to lower revenue.
Three Months Ended
July 31,
% Change
Favorable
(Unfavorable)
Constant Currency
% Change
Favorable
(Unfavorable)
CORPORATE EXPENSES 2026 2025
Unallocated Corporate expenses $ 34,966 $ 43,902 20 % 20 %
Adjusted Unallocated Corporate Expenses (34,966) (43,902) 20 % 20 %
Depreciation and amortization 1,862 3,217 42 % 42 %
Adjusted EBITDA $ (33,104) $ (40,685) 19 % 19 %
On a constant currency basis, adjusted unallocated corporate expenses of $33.1 million on an Adjusted EBITDA basis decreased 19% as compared with the prior year. This was primarily due to restructuring initiatives resulting in lower employment costs, and lower professional fees due to timing.
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LIQUIDITY AND CAPITAL RESOURCES
Principal Sources of Liquidity
We believe that our operating cash flow, together with our revolving credit facilities and other available debt financing, will be adequate to meet our operating, investing, and financing needs in the next twelve months. Operating cash flow provides the primary source of cash to fund operating needs and capital expenditures. Excess operating cash is used to fund shareholder dividends and share repurchases. Other discretionary uses of cash flow include investments and acquisitions to complement and grow our portfolio of businesses. As necessary, we may supplement operating cash flow with debt to fund these activities. The overall cash position of the Company reflects our durable business results and a global cash management strategy that considers liquidity management, economic factors, and tax considerations. Our cash and cash equivalents are maintained at a number of financial institutions. To mitigate the risk of uninsured balances, we select financial institutions based on their credit ratings and financial strength, and we perform ongoing evaluations of these institutions to limit our concentration risk exposure to any financial institution.
As of July 31, 2026, we had cash and cash equivalents of $106.4 million, of which approximately all was located outside the US. Maintenance of these cash and cash equivalent balances outside the US does not have a material impact on the liquidity or capital resources of our operations. We intend to repatriate earnings from our non-US subsidiaries, and to the extent we repatriate these funds to the US, we may be required to pay taxes in various US state and local jurisdictions and withholding or similar taxes in applicable non-US jurisdictions in the periods in which such repatriation occurs. Accordingly, as of July 31, 2026 we have recorded a deferred tax liability of approximately $3.3 million related to the estimated taxes that would be incurred upon repatriating certain non-US earnings to the US.
On May 15, 2026, we entered into the third amendment (Third 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 provides for senior unsecured credit facilities comprised of (i) a revolving credit facility in an aggregate principal amount up to $1.115 billion and (ii) a term loan A facility in an aggregate principal amount of $500.0 million, reflecting a $300.0 million increase pursuant to the Third Amendment. Both facilities mature in November 2027.
As of July 31, 2026, we had approximately $1,291.3 million of debt outstanding, net of unamortized issuance costs of $0.7 million, and approximately $296.1 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 July 31, 2026.
Analysis of Historical Cash Flows
The following table shows the changes in our Unaudited Condensed Consolidated Statements of Cash Flows.
Three Months Ended
July 31,
2026 2025
Net cash used in operating activities $ (55,272) $ (85,005)
Net cash (used in) provided by investing activities (465,380) 98,856
Net cash provided by (used in) financing activities 552,878 (16,924)
Effect of foreign currency exchange rate changes on cash, cash equivalents and restricted cash $ (1,422) $ (959)
Cash flow from operations is seasonally a use of cash in the first half of Wiley's fiscal year principally due to the timing of collections for annual Journal Subscriptions and Transformational Agreements, which typically occurs in the beginning of the second half of our fiscal year.
Free cash flow less product development spending helps assess our ability, over the long term, to create value for our shareholders, as it represents cash available to repay debt, pay common dividends, and fund share repurchases, and acquisitions. Below are the details of Free cash flow less product development spending.
INDEX
Free Cash Flow Less Product Development Spending:
Three Months Ended
July 31,
2026 2025
Net cash used in operating activities $ (55,272) $ (85,005)
Less: Additions to technology, property, and equipment
(11,197) (12,005)
Less: Product development spending
(3,180) (2,890)
Free cash flow less product development spending $ (69,649) $ (99,900)
Net Cash Used In Operating Activities
The following is a summary of the $29.7 million change in Net cash used in operating activities for the three months ended July 31, 2026 compared with the three months ended July 31, 2025 (amounts in millions).
Net cash used in operating activities - Three Months Ended July 31, 2025
$ (85.0)
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, net loss on sale of businesses and assets, acquisition and integration related costs, restructuring and related charges, and the change in deferred taxes
5.0
Working capital changes:
Accounts receivable, net and contract liabilities 28.7
Accounts payable and accrued royalties 7.8
Changes in other assets and liabilities (11.8)
Net cash used in operating activities - Three Months Ended July 31, 2026
$ (55.3)
The favorable change in accounts receivable, net and contract liabilities was primarily due to the timing of collections from and invoicing to customers, including anticipated delayed fiscal year 2026 billings collected in the first quarter of fiscal year 2027.
The favorable change in accounts payable and accrued royalties was primarily due to the timing of payments and lower royalty costs.
The unfavorable change in other assets and liabilities was primarily due to an increase of $14 million of payments in fiscal year 2027 related to acquisition and integration related costs due to the Emerald Publishing acquisition, and restructuring.
Our negative working capital (current assets less current liabilities) was $250.6 million and $359.3 million as of July 31, 2026 and April 30, 2026, respectively. This $108.7 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 revenue when the products are shipped or made available online to the customers over the term of the subscription. Current liabilities as of July 31, 2026 and as of April 30, 2026 includes $384.3 million and $451.4 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) Provided By Investing Activities
Net cash used in investing activities for the three months ended July 31, 2026 was $465.4 million compared to net cash provided by investing activities of $98.9 million in the prior year. The change in investing activities was primarily due to $450.4 million of cash used, net of cash acquired for the Emerald Publishing acquisition on June 1, 2026, and the prior year including $115.3 million in cash received as a result of selling the remaining University Services assets in June 2025. See Note 3, "Acquisition and Divestitures" for further details on the acquisition of Emerald Publishing.
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Net Cash Provided By (Used In) Financing Activities
Net cash provided by financing activities was $552.9 million for the three months ended July 31, 2026 compared to net cash used in financing activities of $16.9 million for the three months ended July 31, 2025. This change was primarily due to higher net borrowings in fiscal year 2027 of $578.5 million used to acquire Emerald Publishing.
In the three months ended July 31, 2026, we increased our quarterly dividend to shareholders to $1.43 per share annualized versus $1.42 per share annualized in the prior year.
In fiscal year 2020, our Board of Directors authorized a share repurchase program of up to $200 million of Class A or B Common Stock, which was fully utilized as of April 30, 2026. In the first quarter of fiscal year 2026, our Board of Directors authorized an additional share repurchase program of up to $250 million of Class A or B Common Stock. As of July 31, 2026, $192.4 million of share repurchase authority remained under this authorization.
The following table summarizes the shares repurchased (shares in thousands):
Three Months Ended
July 31,
2026 2025
Shares repurchased - Class A 330 331
Shares repurchased - Class B 1 1
Average price - Class A and Class B $ 45.44 $ 42.22
During the three months ended July 31, 2026 and 2025, we repurchased $15.0 million and $14.0 million, respectively, under these programs.
The total amount repurchased and the average price per share excludes excise taxes payable on share repurchases and may differ from the share repurchases reflected in Purchases of treasury shares in our Unaudited Condensed Consolidated Statements of Cash Flows. For the three months ended July 31, 2026, the total amount repurchased and the total shares repurchased includes unsettled purchases, and such amount differs from the amount reflected in Purchases of treasury shares in our Unaudited Condensed Consolidated Statements of Cash Flows.
ACCOUNTING STANDARDS UPDATE
We are required to prepare our Unaudited Condensed Consolidated Financial Statements in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) which is the source for all authoritative US GAAP. The FASB ASC is subject to updates by the FASB, which are known as Accounting Standards Updates (ASU). See Note 2, "Recent Accounting Standards" of Part I, Item 1, "Notes to Unaudited Condensed Consolidated Financial Statements" for further information.
INDEX
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