Solid gains in its research business offset some softness in academic content and university services operations at John Wiley in its third quarter ended January 31, 2022. The result was a revenue increase of 7% over the comparable period in fiscal 2021, to $515.9 million, and a 34% increase in operating income, to $45.9 million. In remarks to analysts, Wiley president and CEO Brian Napack said the company remains on track to surpass $2 billion in total revenue for the first time in its 215-year history, and that EBITDA will top $400 million.
In his comments on quarterly results, Napack touched on a broad range of topics. He noted that as a global company, Wiley has operations across Europe, including a technology development center in Russia for which Wiley has “solid contingency plans in place,” though Napack acknowledged the company continues to monitor the volatile situation. From a business standpoint, Napack said Ukraine and Russia are small markets, but he said Wiley pledges “to support humanitarian efforts in Ukraine and across Europe.”
To that end, this morning the company pledged $1 million to the International Rescue Committee, UNICEF, and other humanitarian organizations to provide aid to those impacted by the crisis in Ukraine; the company will also match donations made by Wiley workers. In addition, Wiley is making its entire body of scholarly content freely available to researchers and students from Ukraine. Wiley is also working internally and with partners to support Ukrainian scientists, academics, and authors.
Looking at economic trends, while Wiley is giving renewed focus to inflation and the supply chain dynamics that have been prevalent throughout the pandemic, Napack said that the company does not believe these factors will have a meaningful impact on its fiscal 2022 results. Similarly, Napack said that supply chain management challenges have not had a significant impact on results, noting that physical products make up only about 18% of its revenue. As for labor issues, Napack said Wiley has seen a modest increase in its turnover recently, “but nothing that raises any major issues.”
Where trends have hurt Wiley is in its academic and professional learning group where revenue declined 1% in the quarter, with education publishing sales down 2% and professional learning flat.
In comments on what Napack called the university content market, he observed that, in 2020 and the first half of 2021, Covid drove record numbers of students to use digital content and courseware. More recently, Napack said, “there has been a natural return to earth of digital enrollment numbers.”
In addition, college undergraduate enrollment is down 6% since fall 2019, and some students have opted to defer school to pursue career opportunities. Despite the recent downward pressure, Napack said Wiley remains “quite confident in the long-term global trends in postsecondary education, along with the opportunities for winning content and courseware to return to growth as we emerge from this unusual period.”