Wiley (john) & Sons-cl B Aktie

Good morning, and welcome to Wiley's Fourth Quarter and Fiscal 2026 Earnings Call. As a reminder, this conference is being recorded. [Operator Instructions] At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.

Good morning, everyone. With me today are Matt 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 U.S. 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 and variances are on a year-over-year basis and 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'll now turn the call over to Matt 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 leadership position in the AI economy and capped the year with transformational moves from market-defining AI partnerships to the appointment of visionary leaders in Research and AI to our largest acquisition since 2007.

Wiley's trusted content and intelligence is the foundation for the rapid advancement of science and innovation, and it's never been more in demand. As I've said before, AI is only as good as the content and data that fuels it, and Wiley has one of the most comprehensive and trusted portfolios in the world. Gold in, gold out, to quote our friends at OpenEvidence, Wiley is that gold. I'll walk through the year and all the great work we're doing to accelerate our high-margin growth engines, and Craig will take you through our financials, operational excellence and outlook.

Before I get to results, I want to step back and frame how we think about the business because it's the key to everything that follows. We have 2 reinforcing growth engines. Research is our foundation, leveraging our wide moat, scale and relationships to cultivate proprietary content and data and drive market share in high-demand academic disciplines. It's durable and growing at mid-single digits.

AI and data analytics is our emerging growth engine. By layering research intelligence services over that same proprietary content and data, we are evolving from a pure content provider into a higher-value partner that helps corporate R&D and Academic labs make better informed decisions. Reinforcement is simple. Research Publishing feeds the trusted content and data that accelerates AI and analytics growth. And AI, in turn, powers the intelligence and productivity that accelerates Research Publishing growth.

This is the Wiley flywheel, and you could see it turning in our recent results and gaining speed. This was a defining year for tomorrow's Wiley. A few highlights. We delivered mid-single-digit growth in Research with record volume and strong recurring revenue. After the quarter closed, we acquired Emerald Publishing to extend our scale in Research and our proprietary content advantage in AI. We grew AI revenue from $40 million to $49 million with a rapidly expanding recurring base. We executed strategic partnerships with IQVIA and OpenEvidence, and we launched our Nexus content licensing service for other publishers.

We continue to deliver on our key growth initiatives, including the expansion of our Advanced journal portfolio and build-out of our clinical outcome assessments business. We executed a landmark partnership with Virtusa to transform product innovation and reduce costs. And we recently onboarded world-class executives in Research and AI and data analytics. Just look at the caliber of companies and organizations Wiley has partnered with this year. We're embedded with today's AI leaders and across the broader scientific ecosystem. That momentum carries into fiscal '27 with greater scale, opportunity and ambition.

Turning now to our full year results. Fiscal '26 saw us execute well even with revenue challenges in Learning. We delivered another year of exceptional margin expansion and cash flow growth alongside record return to shareholders. Adjusted revenue was flat to prior year or up 1%, including the impact of currency. This is compared to our outlook of low single-digit growth with Learning headwinds being the primary difference. Strong demand in Research continued with 11% output growth and 4% revenue growth.

Adjusted EBITDA margin rose 220 basis points to 26.2% and adjusted operating margin rose 260 basis points to 17.7%. Both are all-time highs in our reporting history. This was driven by material progress in reducing corporate expenses and expanding Research margins. We grew adjusted EPS by 15%. Free cash flow was up 55% to $195 million on improved operating performance and lower CapEx moderated by late renewal signings that shifted cash collection from Q4 to Q1. And we returned $174 million to shareholders, up from $137 million in fiscal '25, including record share repurchases of $100 million. This underscores our disciplined commitment to rewarding shareholders even as we fund our high-return growth engines.

Let's turn to our performance over time. When I first spoke to all of you in late 2023, I said that we were going to be relentless in our execution and move with certainty on our value plans, operational improvements, reorganization and culture. This slide tells that story. Year-after-year, we've expanded margins, strengthened cash generation and sharpened our financial profile and fiscal '26 extended that track record on every measure. Our disciplined cost work has been central to it. We have taken hard structural costs out of the business, while reinvesting in our highest return growth engines. This has enabled us to grow our adjusted EBITDA margin and adjusted operating margin by 340 and 560 basis points, respectively, in just 2 years.

Free cash flow conversion has reached 44%, and we more than doubled our share repurchases and raised our dividend for the 32nd consecutive year. Return on invested capital is substantially higher, and our net debt ratio was down to 1.4. Even after the Emerald acquisition, our pro forma leverage of 2.1x is well within our long-term target range of 1.5 to 2.5. This work has made us a much stronger company than we were even a year ago, leaner, faster and built on disciplined investments that position us for accelerated profitable growth in the years ahead.

The AI economy plays directly to our strengths. We see and the market is starting to see that AI is a major tailwind for high-value publishers like Wiley. Here's why? We curate and provide access to a large share of the world's proprietary scientific, technical and medical content through both our own portfolio and that of our publishing partners. And science never stands still. More than 14,000 new peer-reviewed articles are published every day. We also hold an industry-leading position in the fast-growing knowledge domains most relevant to AI, critical areas of medicine, chemistry, material science, technology and engineering, food and agriculture science and now economics and finance. In these fields, the world's top Research runs through Wiley.

In a world awash with misinformation and content scrap from the Internet, our reputation for quality and trust is a distinct advantage. We are home to 2 centuries of breakthrough research, hundreds of Nobel Prize winners and the world's leading societies. All to say, in the world of science, the Wiley brand is synonymous for integrity and quality. And we don't have to defend legacy platform businesses. We've embraced an AI-first approach and enjoy a first-mover advantage with model developers and corporations building out AI models and applications, so much so that other publishers want to be part of our network. We've built and continue to build an unparalleled partner ecosystem.

As I've said before, not many companies in our industry can point to an extensive network spanning the world's most prestigious universities and academic societies, the largest LLM providers and AI innovators, multinational corporations and global publishers. This ecosystem approach enables us to punch above our weight. We are partnering, not competing. We're integrating, not building.

Finally, our capital-light model. Our content advantage and partnership strategy allows us to leverage external infrastructure at interoperability, while enabling broad collaboration across the ecosystem, reducing capital requirements and creating network effects that benefit all participants. And because our approach is open, we don't have to bet on any single technology.

It works across all platforms. The long-term outlook for our Research growth engine remains favorable. We expect AI to be a powerful accelerator of researcher productivity and output, and publishing remains the unquestioned currency of academic advancement, driving employment, promotion, prestige and grant funding. This is what makes the business so durable and its growth so resilient through continuous technological and societal change. To capture this volume growth, we are scaling our journal portfolio and modernizing our publishing platform and workflows.

Large-scale, high-quality publishers like Wiley have a scale advantage and are taking share, and we expect that to continue. A few points are worth reemphasizing. Peer-reviewed Research is the global standard and measure for scientific excellence, -- it's must-have content for institutions and corporations and the trusted foundation for high-value scientific workflows. Demand to publish is growing with ever-increasing global R&D spend and now accelerating with AI. Research Publishing has navigated every technology shift because its core value, scientific trust, R&D fuel, author protection endures.

Our momentum in this business is accelerating. Research grew 3% in fiscal '25 and 4% in fiscal '26 with our trajectory now pointing to mid-single-digit growth. Multiple drivers are behind that. First, we're driving market share gains with submissions up 25% and output up 11% well ahead of industry output growth of 6% to 8%. Second, our advanced portfolio is accelerating as a global top-tier brand across disciplines with total revenue of $70 million, growing at double digits. As one prominent industry newsletter put it, with Advanced, Wiley has been quietly building an enviable portfolio.

Third, our society partner ecosystem is delivering gains in publishing and AI, including our landmark signing of the American Society of Mechanical Engineers, or ASME. The ASME itself published for nearly 150 years. And when they decided to partner, they chose Wiley. Our global scale, reputation and platform matter, but what really sets us apart is that we are exceptionally good at partnering. We operate as an extension of each society, executing complex transitions and growing their publishing footprint. Of the 600-plus society partners that call Wiley Home, many go back decades. This quarter, we renewed our publishing partnership with the American Cancer Society now in its 30th year and a clear example of what partner of choice really means.

Fourth, our Research exchange platform recently landed its first external publisher client in Liverpool University Press. The agreement will allow Liverpool to manage and modernize its academic publishing workflows and scale its journals more efficiently. And we believe Liverpool is just the beginning. Many smaller publishers face the same pressures, so we see a meaningful market for migrating additional customers onto our platform.

And fifth, the just announced addition of Emerald makes Wiley a powerhouse in the social sciences, notably economics, business, finance and related fields. Let me spend a few minutes on Emerald. The rationale is straightforward. The acquisition deepens our scale and content advantage in both Research and AI, and it does so on terms that create real value for shareholders. We acquired Emerald for roughly $450 million or 7x adjusted EBITDA on a synergized basis. Its financial profile is compelling.

Emerald delivers a high-margin, highly recurring revenue stream with strong cash characteristics and we see clear value creation ahead between the $30 million of expected cost synergies and multiple revenue growth synergies from geographic expansion, cross-selling and licensing. The returns are attractive and near term. We expect Emerald to be modestly accretive to adjusted EPS in year 1 and accretive to free cash flow in year 2 with ROIC exceeding our weighted average cost of capital by year 2.

As noted, we expect to realize the full cost synergies by year 3 with material savings in year 2. Emerald is squarely in our wheelhouse. Its operating model, journal publishing, content licensing and recurring institutional revenue closely mirrors our own, and we have a long track record of integrating journal acquisitions and partnerships. More on Emerald and why it's such a strong fit.

With nearly 6 decades of publishing heritage, Emerald brings a rich and growing portfolio, nearly 500 journals, thousands of data-rich book titles and case studies and 0.5 million backfile assets. They're a destination of choice for researchers worldwide with submissions up 28% and revenue growing at mid-single digits. Over 90% of its $85 million in revenue is recurring with customer retention above 99%.

Emerald only generates 15% of its revenue from North America, and yet that region represents 40% of global spend on social sciences research. Wiley, of course, has a strong position in the U.S. So this is a clear growth opportunity for us. Emerald is a clear cultural fit, U.K.-based. They share our mission-driven mindset with a reputation built on integrity and quality and the heritage of championing fresh thinking. Like us, they act with purpose and build trust through respect and humility, and they are heavily performance-driven with incentives well aligned to the value we intend to create together.

In summary, Emerald accelerates every one of our 4 value drivers on accelerate Research core growth, it strategically expands our portfolio to roughly 2,500 journals with leading positions across all key publishing areas, further strengthening our scale and moat. On scale AI and data analytics, it expands our content and data advantage, notably economics, business, finance and engineering, high-value domains where certain AI models increasingly need authoritative structured content to reason about markets, decisions and the economy.

Prospective customers include financial services firms, consultancies and business schools. On drive multiyear margin expansion, Emerald is substantially accretive to Wiley's overall margin, especially after synergies, and it adds a durable subscription-based revenue stream. On disciplined portfolio and capital allocation, Emerald is a focused on-strategy deployment of capital, deepening our position in high-margin Research Publishing and adding a recurring subscription cash flow stream that strengthens the durability of our financial profile.

We expect this to be a seamless integration with predictable synergy capture as we're drawing on a proven Wiley playbook for integrating journal assets and businesses, capabilities we have refined across prior acquisitions. And our advanced research exchange platform is purpose-built to onboard journal assets quickly and at scale. This gives us real confidence in the time lines we've laid out, $30 million of cost synergies by year 3 with meaningful savings expected in year 2.

We have a new leader in Research. But first, I want to thank Jay Flynn for his many contributions to Wiley over the years and for the strong foundation he leaves behind. We wish him all the best, which brings me to Jessica Kowalski. Jessica brings us more than 2 decades of experience leading both Research Publishing and AI-enabled businesses at a global scale. She joins us from Microsoft, where she held full P&L accountability for a large-scale global AI data and cloud services business and before that, led data and analytics partnerships at Amazon Web Services.

Her research publishing roots run deep -- she spent 11 years at RELX in senior roles, where she was central in elevating it from a publisher into an information analytics company. This is exactly the journey Wiley is on, and Jessica is exactly the leader to drive it. Now let me turn to our AI and data analytics growth engine, the second turn of the flywheel. Wiley sits on an exceptionally deep and untapped mine of proprietary data. Beyond our published articles and journals, we have structured metadata and link domains that surface cross-disciplinary linkages invisible to generic aggregators. We have validated research protocols and methods, how studies were designed, not just what they found.

We have peer review signals and editorial judgment, decades of credibility signals baked into the corpus. We have citation networks and reference graphs that are the connective tissue between ideas across disciplines. And we have author and institutional relationships, who is working on what, with whom and where. On top of that proprietary data, we hold leading content and data positions across the disciplines that matter most in the AI economy.

In 150-plus disease areas in life sciences and health care, from Alzheimer's and oncology to clinical outcome assessments and medical synthesis, in over 100 chemistry areas, and we have one of the most comprehensive spectral database collections in the world, which allow end users to identify molecules based on their unique chemical signature. We recently released a new addition of our registry of mass spectral data, expanding compounding coverage to nearly 1 million reference spectra, strengthening a foundational layer of our scientific data and research intelligence portfolio in over 50 areas in engineering and 50-plus areas in material science, the latter through our flagship journal Advanced Materials.

In 48 agriculture and food science topics, along with the world's leading crops disease database and now with Emerald, we're a top 1 or 2 leader across key areas of economics, business and finance. AI cannot substitute for real scientific evidence. If you're building an oncology drug development platform, you're not pulling from social media or scraping the Internet. For corporate models and applications to be viable, they require a constant stream of the most trusted content and intelligence at depth. Our advantage isn't only volume, it's depth in exactly the areas where corporate R&D demands precision, hence, the demand we're seeing.

Let's talk about our AI growth trajectory. Total AI revenue grew from $23 million in fiscal '24 to $49 million this year, on track for over $50 million in fiscal '27. The recurring piece is rapidly scaling from roughly $1 million last year to $8 million in fiscal '26 with a path to 2 to 3x that next year. We expect a strong growth trajectory from there as we uncover more data set opportunities in our portfolio, roll out intelligence products and unlock value from our highly specialized and engaged audience.

We now count 19 corporate customers for AI subscription knowledge feeds, up from 10 last quarter. These are typically 6-figure annual contracts for a single vertical content collection in a single department pioneering AI-powered discovery. The expansion path is clear through more knowledge feed collections, more departments and more use cases. We're also starting to make meaningful inroads across industry verticals, which shows how broad our content advantage is. Of these 19 customers, 12 are in life sciences, 4 in engineering, materials or chemistry, 2 in financial services and 1 in ag and food science. This includes 7 of the top 10 global pharmaceutical companies.

Our use case runway is substantial. We also serve 4 LLM developers for training, most of them repeat customers and we anticipate material training revenue to continue in fiscal '27. Our Nexus AI licensing service now consists of 41 publisher partners from top-tier societies to multidisciplinary publishers. These partners collectively represent nearly 100,000 book titles across scientific and technical disciplines as well as journal and video content.

During the year, we generated $19 million of licensing revenue from this Nexus partner network. Finally, we have 38,000 researchers trialing our Gateway platform, which connects our trusted database directly to AI daily workflows. All this is evidence that the engine is accelerating. Building on our leadership position in AI, we see 3 organic growth vectors, each leveraging existing assets and each with its own growth path. We'll lay more of this out at a fiscal '27 Investor Day, but I want to give you an early readout.

First, database solutions, in-demand proprietary data sets in our existing portfolio. Think of our rapidly growing clinical outcome assessments business as one of the many examples. Second, Applied Research Intelligence, a synthesis first intelligence platform, embedding Wiley's content in corporate R&D workflows, moving us up the value chain from content access to actionable intelligence. And third, audience monetization, scaling our unique data assets and reach into an analytics and ad tech platform.

There's compounding logic here. Our structured content and data is not only a major growth opportunity in its own right, which we've begun to monetize, but the very foundation for our differentiated intelligence platform. We're energized by how the corporate R&D and Academic markets are evolving toward our research intelligence and by the unique position we hold. Nowhere is our momentum clearer than in health care AI.

The year speaks for itself. At the start of fiscal '26, we signed the AWS Life Sciences partnership. In July, we became the first publisher to partner with Anthropic on Claude for Life Sciences. In November, we signed our clinical outcome assessment partnership with IQVIA, a deeply strategic relationship that is already producing results. We recently co-hosted a 2-day AI summit with IQVIA and included senior leaders from Novo Nordisk, Microsoft, Amazon, Salesforce, the American Heart Association and Johns Hopkins University, among other societies and universities.

This event brought together participants to explore how AI can transform the science-to-patient value chain through the right data, AI agents intelligence layers grounded in the scholarly record and continuous learning loops. Clinical outcome assessments, or COAs, is an increasingly important area for us. Wiley has one of the world's largest collections of COAs. These are patient-reported outcomes from clinical trials. Demand is ever increasing as Clinical trials undergo fundamental transformation, requiring these assessments to meet new regulatory standards and improve trial efficacy.

COA revenue rose from $700,000 in fiscal '21 to $6.5 million in fiscal '25 and then jumped 68% this year to $11 million, and we expect strong growth to continue. COAs are precisely what we mean by hidden gems in our portfolio, specialized content and data sets, once hidden inside our portfolio, but now in demand for high-stakes use cases. COAs are just the beginning. We're uncovering more of these hidden gems across the portfolio. In March, we signed a 5-year agreement with OpenEvidence for research at the point of care. We also took a small equity position, underscoring our mutual commitment to building the future of clinical AI together. We've since added 10 society partners to the collaboration.

Also in March, we partnered with Microsoft to integrate trusted medical research directly into Microsoft Dragon Copilot, the AI-powered clinical assistant. Stepping back, the picture is clear, marquee partnerships across the AI and life sciences ecosystem, 3 distinct growth vectors built on our unique assets and AI revenue scaling fast. Demand for training continues and recurring revenue is meaningfully accelerating. Wiley is becoming an essential source of trusted content and intelligence and a leader in how that knowledge is put to work.

With that, I'll hand it over to Craig to take you through the financials.

Thank you, Matt, and hello, everyone. The financial through line for Wiley this year has been prioritization of capital and resources toward our highest return opportunities in Research Publishing and AI, while taking important stabilizing actions on Learning headwinds. Our content, trust and partnership advantages enable us to pursue an AI-first capital-light model rather than build and defend costly platforms, keeping capital requirements low, compounding network effects and converting proprietary content and intelligence into recurring high-margin, high ROIC revenue. That's the model, and the results show it's working.

Starting with the quarter. Q4 revenue was flat on a constant currency basis with good momentum in Research, offset by market-related challenges and a prior AI licensing comparison in Learning. Adjusted EBITDA grew 17%, and we delivered 480 basis points of margin improvement to 33.2% -- this was driven by our material progress in reducing corporate expenses down 22% and driving profitability in Research. Adjusted EPS was up 22% and adjusted operating income 26% with adjusted operating margin up 520 basis points to 25.3%. And importantly, we returned $48 million to shareholders in the quarter, including record quarterly repurchases of $30 million. We closed the year with clear underlying momentum, and Q4 is the proof point.

Turning to Research. Research Publishing was up 5% in the quarter, driven by growth in recurring revenue models, Gold Open Access and AI licensing. The underlying KPIs remain robust. Article submissions grew 25% and output 11%, both well above industry averages. Our journal and brand expansion strategy is paying off, and we continue to see strong recurring revenue and customer retention. Let me take a moment on Research Solutions, down 4% on a constant currency basis, impacted by declines in recruitment and marketing services and a soft corporate spending environment. We're moving decisively from a legacy advertising business to an audience analytics platform built on modern ad tech, AI-driven product innovation and verified audiences.

In a large and growing health care advertising market, we bring a unique advantage in combining our content, societies and audiences. It's a substantial opportunity and one we're well positioned to capture. Adjusted EBITDA for the quarter rose 13% with 300 basis points of margin improvement from restructuring savings and efficiency gains from the deployment of our end-to-end platform. Full year Research revenue was up 4%, with Publishing up 3% and Solutions up 6%. Adjusted EBITDA up 8% and margin at 33.2%, up 110 basis points.

Now to Learning. Q4 Academic revenue was down 5% on a constant currency basis, impacted by a prior year AI licensing comparison and softer print revenue, partially offset by growth in digital content and courseware. Q4 Professional revenue was down 10%, reflecting market-related challenges around consumer and corporate spending and the same prior year comparison. Adjusted EBITDA for the quarter was down 1% on a constant currency basis, with our margin up 310 basis points to 46.1%, reflecting disciplined cost management.

For the full year, Academic was down 5% and Professional down 10%, driven by the same macro and channel headwinds. We've responded decisively, taking out costs, refocusing editorial toward higher-value authors and titles and accelerating our shift to digital products and inclusive access. Our scientific and technical book programs, in particular, are rich in structured data dense content, exactly what AI increasingly depends on. We see a meaningful monetization opportunity there, and we're actively pursuing it. We expect Learning trends to improve in fiscal '27 with digital growth in Academic and frontless momentum in Professional. Underpinning all of this is a relentless focus on cost and operational efficiency. We are driving down corporate expenses, down 15% for the full year and 22% in Q4.

Three work streams are behind this. First, tech transformation, our largest multiyear savings driver, which I'll cover on the next slide. Second, corporate cost structure, streamlining shared services across finance, operations, HR and marketing, simplifying our organization to move faster and standardizing processes. Full year and Q4 corporate unallocated expenses were down $23 million and $9 million, respectively. And third, AI productivity, initiatives already underway in legal, marketing and content operations to transform process and workflow with additional initiatives targeting material productivity gains and run rate savings. AI is not just a revenue opportunity for us, it's becoming a meaningful internal efficiency driver as well.

Let me spend a moment on tech transformation, shifting us from maintaining the past to building the future, more product faster at better economics. Three priorities in motion. First, structural cost savings, consolidating facilities, retiring technical debt and building our strategic partnership with Virtusa. You can see it in our margin expansion this year, and there's more to come. But tech transformation is not only a cost story, it's a growth enabler. Second, shifting spend from legacy systems toward product development from roughly 1/3 of our tech budget today to 50% to 60% over the next few years. Modern integrated platforms replacing fragmented systems, new content and intelligence products launching faster and modular architecture that evolves as customer needs shift.

And third, AI native innovation, AI woven into core processes rather than bolted on as experiments, software delivery faster and higher quality every quarter and customer-facing processes reimagined. Virtusa is our strategic partner across all 3, delivering operational efficiencies, modernizing enterprise technology and freeing up our teams and capital to focus on high-return product innovation.

Stepping back to the financials. Free cash flow for the year rose 55% from $126 million to $195 million, with conversion stepping up from 32% to 44%. The marked improvement was driven by robust earnings growth and lower CapEx, down from $77 million in fiscal '25 to $65 million. Worth noting that free cash flow was moderated by late journal renewal signings, pushing related cash collection into Q1.

On the balance sheet, leverage moved from 1.8x to 1.4x at year-end. Following the Emerald acquisition, pro forma leverage is now approximately 2.1x, including expected synergies, well within our 1.5 to 2.5 high comfort range. Our debt profile improved this year, driven by earnings growth and approximately $120 million of divestiture proceeds. After the quarter closed, we expanded our credit facility by $300 million, bringing total capacity to $1.6 billion.

Let me walk through how we're deploying capital across 4 priorities. First, organic investment, our top priority. We're scaling our journal portfolio, led by our flagship Advanced collection, now 25-plus journals, generating $70 million in revenue and growing at strong double digits. Our research exchange platform is expected to open new revenue as we saw this quarter with Liverpool University Press and reduce our cost to publish. And we're expanding AI and data analytics capabilities, new leadership, new skill sets, rapidly scaling our clinical outcomes assessments business and building out our research intelligence and audience monetization platforms.

Second, M&A. We acquired Emerald for $452 million, an all-cash transaction at roughly 7x adjusted EBITDA, including $30 million of targeted cost synergies. Financially, Emerald is exactly the kind of high-margin recurring business we want to own and the strategic and cultural fit are equally compelling. Third, portfolio optimization. We continue to evaluate the portfolio for potential divestitures that no longer fit our growth or margin profile. And fourth, return to shareholders. Record share buybacks of $100 million in fiscal '26, up 67% with $174 million in total return, up from $137 million.

Our average repurchase price was $35 per share, a high return use of capital. Across all 4, disciplined capital allocation remains our commitment, balancing growth investment, balance sheet strength and shareholder returns. Let me set the stage for fiscal '27 before walking through our outlook. Momentum across 5 priorities. First, Research driving mid-single-digit growth with researcher productivity accelerating, continued market share gains and new society wins. Learning is expected to improve with digital growth in Academic and frontlist momentum in Professional.

Second, AI momentum accelerating. Recurring revenue is expected to scale rapidly from our multiyear partnerships and increasing corporate momentum, new leadership, accelerating growth vectors and continued demand for training. We're also monitoring IP copyright court decisions expected in the coming months, which we believe will further validate the value of our content. Third, operational excellence accelerating, a full launch of the research exchange platform, our Virtusa partnership delivering efficiency and product innovation gains and our AI center of excellence transforming workflow productivity.

Fourth, margin expansion and cash flow growth continuing, tech transformation, corporate cost reduction and AI productivity gains, freeing up capacity to invest in our highest return opportunities. And fifth, disciplined capital allocation, driving higher ROIC and recurring revenue growth while maintaining our commitment to returning excess cash to shareholders.

Let me close with our fiscal '27 outlook. Organic revenue is expected to grow low to mid-single digits with Research at mid-single digits. This excludes approximately $78 million of anticipated Emerald revenue contribution, which is included in all other metrics. Adjusted EBITDA margin of 26.5% to 27.5%, up from 26.2%. Multiyear margin expansion remains a core financial commitment. Adjusted EPS of $4.60 to $5.05, up from $4.19, including an approximate $0.10 contribution from Emerald and free cash flow of $205 million, up from $195 million, driven by expected cash earnings growth and moderated by $15 million of year 1 Emerald dilution, $15 million of higher CapEx largely from new product development, restructuring costs we expect to moderate over time and higher cash taxes.

Emerald turns free cash flow accretive in fiscal '28 and becomes a significant contributor in the years ahead. One comment on quarterly phasing. In Q1, as you may recall, we'll have an unfavorable year-over-year comparison of roughly $25 million tied to prior year AI projects. At the same time, Emerald will contribute 2 months of revenue or approximately $14 million. As always, it's much more relevant to look at this on a full year basis.

In summary, research accelerating, AI compounding, margins expanding and capital deployed with discipline. Wiley is well positioned for fiscal '27 and the coming years. With that, I'll pass the call back to Matt.

Thank you, Craig. Before we close, I want to say a few words about our leadership team. This is a forward-leaning and galvanized group moving decisively to drive innovation and value across Wiley. The leaders who joined us in fiscal '26 have brought a fresh perspective to our content advantage and foundational strengths, how we innovate, grow and win. Craig, of course, our CFO; Armughan Rafat, our Chief AI and Data Analytics Officer; and Jessica Kowalski, our General Manager of Research. Each has stepped into exactly the right role at exactly the right moment, joining an already exceptional team. The results speak for themselves, and we're only getting started.

To summarize, we are accelerating progress in all major areas of value creation, driving strong growth in research and AI and data analytics, materially expanding margins and cash flow and deploying capital strategically, while continuously improving ROIC. Our 2 reinforcing growth engines have been and will continue to be major beneficiaries in the AI economy. Research fuels, the trusted content and intelligence for AI and data analytics, AI accelerates the pace of research. The AI engine is expected to compound as we uncover more hidden gems in our portfolio.

And our disciplined capital allocation and portfolio evaluation will continue to drive shareholder value, organic investment in research and AI and data analytics to drive high-margin recurring revenue growth. The Emerald acquisition is expected to be significantly accretive to earnings near term with leverage still at a high comfort level, ongoing portfolio evaluation for fit to growth and margin profile and continuation of rewarding our long-term shareholders.

Before I open it up to questions, I want to thank our global colleagues. This was a breakout year because of you. It is your work that makes Wiley not only an exceptional public company, but a genuine force for good, recently named one of the world's most impactful companies by Time Magazine recognized for both economic significance and net positive impact to humanity.

Wiley will be a key sponsor at the UN's AI for -- good Summit, where the global standards for responsible AI are being written. Wiley is part of those conversations. Finally, I want to extend a warm welcome to our new colleagues from Emerald. Together, we look ahead to 2027, Wiley's 220th year of continuous change and innovation. Let's open the line for questions.

[Operator Instructions] Your first question comes from Daniel Moore with CJS Securities.

Lot of detail, a lot of ground to cover, so I'll get started. In terms of AI-related revenue, maybe just crystallize your outlook as we think about '27 across all 3 buckets, starting with further monetization of proprietary content feeding LLMs. Second, the opportunity to partner and deliver data and content as a third party. And then third, the recurring revenue bucket, which sounds like, I think if I heard correctly, up 2 to 3x from the $8 million that we saw this past year. So I just want to crystallize those. And when you say above $50 million, is that sort of a baseline? Is there upside to that if we get more discrete opportunities? Any color there would be great?

Dan, thanks for the question. We're very excited about this area of the business. As you've seen from our material here, we do expect another big year in AI. As you know, we're kind of undergoing a shift here from what we've seen in the past of the training model, nonrecurring revenue to more of the recurring revenue. So we're confident in saying we think that we'll have above $50 million as we head into the new year, and we'll be shifting materially from the nonrecurring into more recurring revenue, about 2 to 3x what we did this year.

Speaking to some of the vectors, we're very excited about each of them around the database solutions, around audience solutions and around our applied research intelligence. All of those give us a lot of promise and opportunity for significant material contributions in the future. In fiscal '27, there are some areas of those which are going to be picking up and some areas which are going to be areas of investment for us. And we'll be laying out more of that when we get to our Investor Day in fiscal '27. But what I can say is we're confident in the $50 million plus. There's a little bit of uncertainty, when you're dealing with the nonrecurring revenue, but we're really pleased with the momentum we see in the areas we're investing in the areas of the recurring revenue that are ramping up right now.

Yes. Dan, it's Matt. I want to add to that. What we're also doing is signaling kind of the strategic evolution of where we're headed with that business. And so those 3 vectors are really kind of the future growth engines. And we talked about how this market is still developing. And we see those as going to be beyond '27, those will be the future growth engines for this business. And each of them are fairly -- have fairly significant big addressable markets.

So more to come on that when we get to the Investor Day we talked about. But what we're trying to do is introduce some of that transparency right now to give you and our other investors a sense of how we see the business evolving.

Really helpful. Appreciate that. Emerald acquisition, I think you said mid-single-digit organic growth. Is that what the profile has looked like recently? And then just talk about the mix between traditional subscriptions versus mixed model open access and then most importantly, how their economic business finance data and content fit into your broader licensing and monetization strategy as it relates to AI?

Let me ask Craig to go through some of the numbers, and then I want to talk about kind of how it fits in strategically.

Yes. We really like Emerald as a business. We like Emerald's strategy. We like Emerald's cultural fit. It's very consistent with the kind of business we run and highly synergistic. With revenue of about $85 million, recurring revenue of about 92% and customer retention of 99.6%, there's a lot of things to like about the revenue profile with Emerald. We do see kind of that mid-single-digit kind of growth profile, which is going to be consistent with the direction that we're heading with our overall Research Publishing business.

And from a margin perspective, in 37% to 38% type EBITDA margins, again, very synergistic and complementary to our business. Not much more to that to say other than they share the same characteristics of high submissions intake of over 28% and all the recurring revenue model that I spoke to a moment ago. So very synergistic, strong revenue profile, and we're excited to welcome our colleagues on board with us.

Yes. Dan, a couple of comments strategically. I've talked about the fact that we've built out a very efficient infrastructure now. So research publishing assets enable us to leverage that scale advantage. And they don't come up that often, particularly of this size. So there were certainly immediately a scale play. I think there were 2 other plays for us here.

One is that it really strengthens our presence in finance and economics. And so as we build out future AI value propositions in those disciplines, we now have the leading position or the second leading position in many of those areas. So it strengthens that play. And importantly, they have a fairly narrow footprint in the U.S. market. And so we obviously have a very strong footprint in the U.S. market, and we see potential revenue synergies there as we get into this a little further.

Really helpful. I want to kind of relate that commentary about margins to the fiscal '26 guide implying 30 to 130 basis points of continued EBITDA margin expansion. Certainly very healthy, though obviously, Emerald contributes at least a small portion of that. So just talk about, are there any offsets, initial investments, et cetera, related to Emerald or otherwise embedded in that? Or could we see even additional upside as we think about kind of the margin trajectory in fiscal '27 and beyond?

Yes. As you think about the margin characteristics, again, 2 businesses, Wiley and Emerald that are very complementary. We've looked carefully, as you saw from our outlining of the integration plans. And initially, we want to find the right way to bring the 2 businesses together. And we see, over time, the ability to by year 3, get to the $30 million run rate cost synergies. So we don't expect that to be materially impacting in fiscal '27. We expect more of a ramp-up in '28 and '29.

Where we do see continued margin opportunity is through the very things we've been focused on through technology transformation inside of our business through continued focus on our internal organizational efficiency and effectiveness and also with what we're doing with our new AI center of excellence work across the business. So there are multiple levers for multiyear margin expansion in the business, and Emerald will be playing a role in that more so over time. But right now, we're focused on a very good combination of 2 very winning companies, Emerald and Wiley.

Helpful. Shifting gears, Craig, Learning, you gave some details about the outlook for fiscal '27. Can we just sort of break it down, starting with courseware, what you see over the next 12 to 18 months? Second, Academic and Professional Publishing. Is that stable? Do we see that continued pressure or turning positive? And then third, the assessments business. If you could just kind of give us a breakdown of your outlook here near to midterm in each, that would be helpful.

That's a great question, Dan. We don't guide to our specific segments here. But what I did want to do is maybe share just a little bit of how we see our position here. First of all, we see continuing challenges here, the retail conditions, namely Amazon's inventory practices, which, as you might recall, started August of last year, and we expect to continue on a year-over-year basis until we lap that impact when we get to -- later on into this year in August. We continue to see some consumer and corporate headwinds in Professional Publishing and Assessments. But for the coming year, we expect several drivers of revenue improvement.

First of all, we're projecting stronger frontline productivity. We see stabilization in Amazon's inventory practices, and we just need to get past the year-over-year lapping period, but specifically around the backlist in fiscal '27. We've also released new products and capabilities and assessments. And in Academic, we anticipate some improvement in our digital courseware business as we lean into growth in our digital products led by inclusive access. So the segment is not -- I don't think we'd characterize it as a growth engine, but it is expected to materially improve in fiscal '27, and we like the growth drivers that we see inside of the areas that I mentioned.

Putting that together, it certainly sounds like you expect EBITDA growth in the segment year-over-year. Is that correct?

Again, we're not guiding at the segment level here. But as a matter overall, we are expecting revenue growth and margin expansion heading into next year, and we're pulling on all the levers inside of our portfolio to make that happen.

Helpful. Just talk a little bit about the delayed cash collections around renewals, what's causing that? Do you see that as a trend or discrete to this renewal cycle and expectations for recapturing that either in fiscal Q1 or into fiscal '27, those collections that were pushed out?

Yes. We actually feel very positive about the renewal season we went through. We entered fiscal '26 with a lot of uncertainty in research funding and a lot of conversations with institutions just about where the market was headed. And we finished the year quite strong, quite confident in the renewal season that we had. One characteristic, though, with some of the larger renewals got pushed towards the back end of the cycle towards the end of our fiscal year.

And while we were able to close those deals at the end of the year, there was some timing in terms of the payment due dates and some of the cash collections. I wouldn't describe it as overly material here and certainly not a trend. But just kind of endemic of this cycle here that we had some large renewals that kind of got bunched up towards the end of the year on us, which impacted not revenue, but our cash collections.

Yes, there's always some oddity at the end of the fiscal. Dan, you've seen this before where certain deals just kind of fall over into the new fiscal. So it's nothing we're really concerned about. It will catch up in the first quarter.

Really helpful. Just -- and then tying that to the overall guide for $205 million, obviously, continued progress which includes some dilution from Emerald. So if you could just review what you said about kind of why Emerald is maybe modestly dilutive on a cash flow basis year 1 and then expectations beyond?

Sure. Yes. We -- as you saw from our guide, we're at $205 million, which is up from $195 million in the prior year. As we think about the impact on that, there was $15 million in dilution related to a combination of EBITDA contribution, restructuring, onetime integration costs and interest associated with that. So that's the $15 million there. There's another $15 million of impact as our CapEx increases from $65 million to $80 million, and that's reflecting really a normalization of our CapEx. If you look historically, we've been closer in that kind of $75 million to $80 million kind of range. And tech transformation reduced that temporarily as we went through last year and is really normalizing.

But at the same time, we're returning a focus towards more investment in product development and CapEx as we're building out on those 3 vectors of AI and data analytics growth that we are highlighting earlier here. So those are the kind of 2 major kind of impacts as you think about the free cash flow move year-over-year. Underlying that, though, you can see very strong continued upward momentum on free cash flow, especially on free cash flow conversion as we kind of closed out fiscal '26 significantly better from where we were in '25.

All right. I said I had a lot of ground to cover. Last one. Capital allocation. We expect to continue to be balanced and repurchase shares, particularly at these levels? Or are we thinking more kind of delever first following the Emerald acquisition and very much look forward to seeing you at our conference in July for more details.

Yes. So I think we continue to be very interested in returning excess cash to shareholders. We look at our share price, and we remain very optimistic that we're undervalued and there's opportunity for us to buy back shares. Let me put that in the context of our total capital allocation kind of thinking, which is we start with organic investment. We see plenty of opportunities for high return on invested capital investments inside of the business, many of which Matt outlined as we went through earnings.

We do think about our optimal capital structure. And at 2.1x on a pro forma basis with Emerald, we feel very comfortable in our kind of long-term range of kind of 1.5 to 2.5. There could be some opportunities to tighten that up. But then as we think about returning excess cash to shareholders, we continue to maintain a very dividend forward policy and continue to be active in buying back our shares as we have been. I'm not going to comment specifically on how much in terms of share buybacks yet. I think we want to see the year evolve and be opportunistic in terms of where our price is. But at this point, we think the price is very favorable for us to continue to be active in the market, and we feel very bullish about where we could take the business.

We have reached the end of the Q&A session. I will now turn the call back to Mr. Kissner for closing remarks.

Good. Thank you, everybody. I know this was a longer than usual call, but it is year-end, and we have a lot of exciting work that we wanted to share. And so we appreciate you sticking with us. We look forward to the update at our September call where we can talk about the progress we're making on all of these elements. So have a great summer, and we'll see you in September.

This concludes today's call. Thank you for attending. You may now disconnect.

Good morning, and welcome to Wiley's Third Quarter and Fiscal 2026 Earnings Call. As a reminder, this conference is being recorded. [Operator Instructions]

Thank you. 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 Matt Kissner, President and CEO; Craig Albright, Executive Vice President and CFO; and Jay Flynn, Executive Vice President and General Manager of Research and Learning.

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 U.S. 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 and variances are on a year-over-year basis and 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'll now turn the call over to Matt Kisner.

Thank you, Brian. Hello, everyone, and welcome to our fiscal Q3 earnings update. Before I get to our performance and progress, I want to acknowledge our stock price amid AI fears across the market. The fact is we don't share those same fears. Quite the opposite.

We couldn't be more confident in our position in the AI economy given our proprietary content advantage, wide moat in peer review research and unparalleled partnership ecosystem. The ongoing opportunity is twofold. AI is expected to greatly accelerate scientific discovery and research publishing output, and our enriched data and AI solutions are foundational for corporate R&D AI models and applications. I will discuss this in more detail later in our call.

The third quarter was fully in line with our stated expectations. Revenue performance was impacted by unfavorable comparables in Research, which we called out in the second quarter, and soft market conditions in Learning. We continue to accelerate in all major areas of focus. Research Publishing continues to outpace the market with global output up 11%, revenue up 4% excluding AI revenue and steady growth in our multiyear renewals.

In AI and Data Services, we announced new leadership, launched our Clinical Outcome Assessments partnership with IQVIA and, after quarter close, executed a strategic multiyear partnership with OpenEvidence to deliver trusted research at the point of medical care. We also secured a new AI model training customer, our first outside the U.S., and realized $7 million of AI revenue.

We are rapidly advancing our technology transformation initiatives with the announcement of a multiyear managed services partnership with Virtusa. We also continue to deliver corporate expense savings on an adjusted EBITDA basis, down 21% in the quarter or $9 million versus prior year. We continue to deliver material margin expansion and cash flow growth with adjusted operating margin up 280 basis points, adjusted EBITDA up 250 basis points and operating cash flow nearly doubling to $103 million.

And we are returning more cash to shareholders with repurchases doubling in Q3 to $70 million year-to-date as part of a $100 million full year target. We've returned $126 million in dividend and repurchases in just 9 months, a 37% increase over prior year.

Let's turn to how we're executing on our fiscal '26 commitments. Our first objective is to lead in research. It's been a robust year for Research with revenue up 4% at constant currency and adjusted EBITDA up 6%. We continue to outpace the market in submissions and output, up 26% and 11%. Strong demand is evident across all regions. We've now migrated over 80% of journals to our competitively advantaged research exchange platform.

Importantly, this migration is what transforms our content from published articles into AI-ready data the foundation that makes everything we're doing in gateway, licensing and subscription knowledge feeds possible. And we continue to expand our general portfolio through organic investment in our flagship advanced collection with 8 new journals planned for launch and revenue growth of 50% in our leading open access journal, Advanced Science.

Our second objective is to deliver new growth in AI and adjacent markets. We've generated a record $42 million in AI revenue year-to-date, above last year's total of $40 million with 1 quarter remaining. We continue to make critical inroads into the corporate market with strategic projects executed with health care innovators, IQVIA and OpenEvidence, and other customers for subscription knowledge feeds.

We're now at 36 publishing partners for our Nexus content licensing service, and we are in active discussions with others. Finally, we continue to see strong researcher interest in our AI gateway for scholarly search delivered through partnership with leading companies like Anthropic and Amazon Web Services.

Our third objective is to drive operational excellence and discipline across our organization. We continue to streamline our cost structure with corporate expenses on an adjusted EBITDA basis down 21% for the quarter and 12% year-to-date. Tech transformation took a significant step forward with our recent managed services partnership, which Craig will talk more about in detail.

Let me run through our four key strategic priorities and value drivers. First, we are accelerating Research core growth and delivering share gains from our wide moat, scale and highly favorable demand trends from global expansion and AI productivity. The research publishing market is growing at 3% to 4%, and we expect to deliver at the top end of that this year.

We are delivering new AI and data analytics growth from our proprietary content in critical AI domains and our extensive partnership ecosystem. As noted, we've already surpassed last year's AI revenue total with $42 million and a quarter remaining. We are driving multiyear margin expansion with our EBITDA margin up 500 basis points since fiscal '23 and plans for continued material improvement going forward.

And finally, underpinning all of this is our discipline in managing our portfolio, deploying capital on high-return investments and returning cash to shareholders.

Let's turn to our core. For much of calendar '25, we were navigating around proposed U.S. funding cuts to science and education. A year ago, I said that we remain fully confident that U.S. research would continue to receive federal support given the essential role that it plays in U.S. economic growth and U.S. global competitiveness.

I'm pleased to report that federal investment in scientific research remains resilient with Congress ultimately enacting significantly smaller reductions than those proposed by the administration and, in key cases, maintaining or modestly increasing agency budgets. This outcome reflects continued bipartisan recognition that sustained funding is critical to the nation's scientific infrastructure, long-term competitiveness and innovation capacity.

Our calendar '26 renewal season is about 82% complete, and we're encouraged by the growth we're seeing there. Our subscriptions and transformational agreements are must-have content, which is core to institutions and essential to their missions. We recently marked a milestone of 125 multiyear transformational agreements for consortia, representing over 3,000 institutions. Our recurring models, representing about 70% of Research Publishing, remain robust.

Let's talk about Open Access as an incremental growth engine. As discussed, research output is ever increasing driven by global R&D spend and other factors. Submissions remain at record levels as the number of global researchers increase and productivity gains accelerate. The rate of research output is expected to rise significantly with AI. One recent study showed a threefold increase in the number of papers by researchers who use AI.

And we're just at the beginning. Big global publishers like Wiley stand to benefit most. This volume increases the value of our multiyear subscription and transformational agreements and accelerates growth in author-funded open access, where revenue is a function of price times quantity. This model is growing consistently above 20%, and demand and pricing power remain robust.

I want to call out our investment in the Advanced general brand and Advanced Science in particular. Researchers are drawn to multidisciplinary publications like Advanced Science for the brand, the impact factor and the breadth of the audience it reaches. It has become one of the leading open access journals in the world. The Advanced portfolio as a whole will exceed $70 million in revenue in fiscal '26, growing at strong double digits.

Long-term trends in research look increasingly favorable. AI is expected to be a major output accelerator. And research publishing remains essential for not only discovery and prestige, but to advance researchers' careers and secure additional funding. This is what makes the business and its growth so strong and durable through continuous technological and societal change.

Because of this and expected AI-driven volume acceleration, we're expanding our journal portfolio and modernizing our publishing platform and workflows to continuously benefit from this evolution. Large-scale, high-quality publishers like Wiley are reporting market share gains, and we expect this trend to continue for this foreseeable future. And as we've seen time and time again, research funding and publication remain must-haves across economic cycles and political uncertainties.

What makes us so well positioned for the AI economy? First, we provide access to much of the world's proprietary scientific, technical and medical content through our own portfolio and that of our publishing partners. As we know, science is constantly evolving. In fact, over 14,000 new peer review articles are published every day.

Second, we enjoy an industry-leading position in fast-growing knowledge domains that are especially relevant for AI, chemistry, material science, oncology, technology and engineering, food science and finance, Wiley is the lifeblood.

Third, in an ever-changing world saturated with wrong information and skepticism, our trust and reputation are distinct advantages. Our moat is not only our journal brands but our unmatched peer review networks and editorial boards. We are home to hundreds of Nobel Prize winners and the world's leading societies from the American Cancer Society to the American Geophysical Union.

Fourth, we're not encumbered by legacy platform businesses that we're trying to defend. We have embraced an AI-first approach and enjoy first-mover advantage with model developers' incorporations building out AI models and applications, so much so that other publishers want to be part of our network.

Fifth, we have built an unparalleled partner ecosystem. How many companies can point to a partner network that spans the world's most prestigious universities and academic societies, the largest LLM providers and AI innovators, multinational corporations and global publishers? Our ecosystem approach is our secret sauce. We're partnering, not competing. We're integrating, not building. We have the luxury of not having to defend existing business models, which may be threatened by AI.

Finally, this gives us an advantageous capital-light model. We have the content advantage. We can then leverage external infrastructure and interoperability while enabling broader collaboration across the ecosystem. This reduces our capital requirements and creates network effects that benefit all participants. It also means we don't have to bet on a particular technology as our open approach works across all platforms. We see this already with our IQVIA and OpenEvidence momentum and with our Connector on Claude and AWS.

With that in mind, let's turn to our AI and data strategy. At the foundational level, we're a research and learning publisher, leveraging our proprietary content and data for AI. Then comes our gateway platform, which addresses a problem every researcher faces today. AI tools are proliferating but most are built on unverified or incomplete scientific content. The full potential of AI and science will only be realized if researchers have complete confidence in the authenticity of their AI tools and the AI environment.

Gateway solves this by embedding peer-reviewed, full-text Wiley and partner content directly into the platforms where researchers already are: Claude, AWS, Perplexity and others. We are gratified by the early response. In just 4 months, 9,000 researchers have registered on the platform, in addition to a growing number of institutions signing up for enterprise access. This is early but clear evidence of product market fit.

Gateway is not just a search tool. It is the access layer through which trusted scientific knowledge enters the AI workflow and the layer institutions will increasingly require as a baseline for responsible AI use in research.

Finally, our enriched data and AI solutions become the foundation for domain-specific intelligence, which we've referred to as subscription knowledge feeds or retrieval augmentation generation. Customers here include corporations and partners in life sciences, health care, engineering and industrials food and agriculture and financial services.

Wiley is at a pivotal point in its upward trajectory as AI-related demand for our content and research intelligence accelerates across industry verticals. The time was right to bring in a world-class leader to convert our content advantage into high-margin data services and commercialize our AI-driven offerings. And so we recently announced the appointment of Armughan Rafat as our Chief AI and Data Services Officer.

Armughan brings over 25 years of experience, leading technology data organizations serving in senior roles at Norstella, Thomson Reuters, Clarivate and others. His track record for developing analytics products generating hundreds of millions of annual revenue has been exceptional. As he stated in the recent announcement of his appointment, in an era where AI is only as effective as the data that fuels it, the proprietary content Wiley publishes represents the verified foundational truth that AI and machine learning require.

In terms of underlying momentum, we now count 10 corporate customers for our subscription services and we have secured a new LLM customer for our training services. We continue to add more publishing partners to our licensing network. We expect to deliver AI revenue of $45 million to $50 million this year, up from $40 million in fiscal '25 and $23 million in fiscal '24. We anticipate another big year for total AI revenue in fiscal '27.

I'd like to share some examples of real use cases where we are converting our content advantage into practical solutions for major corporations and through recurring revenue models. First, Clinical Outcome Assessments, or COA, are scientifically validated instruments used in pharmaceutical trials to measure how patients feel, function and respond. COAs are essential for demonstrating treatment impact and meeting regulatory standards for drug approval.

Wiley and its partners have one of the largest collections of COAs going back decades. It is a rapidly growing area for us, expanding from 800,000 in 2021 to nearly 7 million today. What makes this different is what it means for the pharmaceutical customer. Previously, running a clinical trial and assembling multiple vendors from COA licensing to regulatory guidance. That friction cause time and money.

Wiley-IQVIA consolidates that into a single trusted relationship. IQVIA is the world's largest contract research organization, driving $16 billion of annual revenue, bringing deep pharmaceutical relationships, regulatory expertise and implementation scale. Wiley brings the validated instruments, a portfolio of 100-plus COA instruments managed on behalf of our society partners and trusted scientific heritage.

So it's not just a licensing deal. It's a recurring workflow transformation and the kind of deeply embedded relationship that compounds in value as trials grow more complex and the regulatory bar rises. We're really excited about this opportunity now and the scaling potential ahead. We've executed COA agreements with the top 20 pharma companies and our global pipeline continues to grow.

Two days ago, we announced the strategic partnership with OpenEvidence, the most widely used clinical decision support platform among U.S. physicians with more than 40% of doctors using the platform daily across 10,000 hospitals. OpenEvidence will bring our trusted scientific content and that of our partners into their rapidly expanding AI platform.

The terms of the deal include a 5-year multimillion-dollar licensing agreement for a selection of over 400 journal titles and reference books as well as the Cochrane Database of Systematic Reviews. As part of the partnership, Wiley has taken a small equity position in OpenEvidence, underscoring our mutual commitment to building the future of clinical AI together. Important to note, we consider this a first step in our multiyear collaboration.

Let me finish with a quote from OpenEvidence CEO and Founder, Daniel Nadler. The hard problem in medicine right now isn't just generating new knowledge. We're living through a golden age of biomedical research. The hard problem is also that it takes 17 years for a fraction of that research to reach the bedside. Wiley is an ideal partner in solving this problem for physicians. The depth and breadth of Wiley's content reinforces the advantages of OpenEvidence for physicians, and that compounds over time.

As with IQVIA, this partnership is not just a licensing arrangement. Wiley is embedding itself into the daily clinical decision-making of physicians. Our equity position reflects our conviction that this is where trusted scientific content meets its highest value application. And importantly, we see this as a template for many others, bringing Wiley's content advantage directly into the workflow platforms where critical high stakes decisions are made.

As I mentioned earlier, our partner ecosystem is a huge strategic advantage for us, bringing together AI innovators, r&D-centric corporations, leading institutions and other publishers. It's only the beginning.

I'll now turn the call over to Craig.

Thank you, Matt, and hello, everyone. The three summary points that define where we stand today. Research Publishing is growing at the high end of the market's long-term rate. AI revenue is tracking ahead of expectations. And importantly, we're beginning to see leading indicators of recurring revenue growth in new partnerships, pilots and pipeline, which is where the real value gets built.

And our balance sheet is very strong, giving us the capacity to invest in high-return growth opportunities. Learning continues to face macro and channel headwinds that are masking the underlying earnings power of our business, but we're managing through it with discipline and agility while keeping our focus squarely on the businesses and investments driving long-term value creation.

Turning to our fiscal third quarter results. We projected a light quarter due to unfavorable comps, and overall revenue came in as expected, up 1% on a reported basis and flat at constant currency. Growth in Research Publishing and Academic was offset by moderate declines in Research Solutions and Professional.

Reflecting our commitment to operating discipline, we delivered strong margin expansion and profit growth even with revenue softness. Adjusted operating income, adjusted EPS and adjusted EBITDA were all up double digits or 22%, 19% and 12%, respectively. Our adjusted operating margin improved by 280 basis points and adjusted EBITDA margin by 250 basis points. Adjusted EPS growth was driven by our operating performance and the lower share count as we remain in the market acquiring shares. This was partially offset by a higher adjusted effective tax rate.

Let me turn to our segment performance, starting with Research. Research was up 1% with a 40 basis point improvement in EBITDA margin. Research Publishing performance was impacted by $9 million of AI revenue in the prior year period. Absent AI revenues, Research Publishing was up over 4% driven by record submissions, solid growth in our recurring revenue models and over double-digit growth in author-funded open access.

As Matt noted, journal licensing renewals are around 82% complete and signs look good. As a reminder, about 1/3 of our renewals come up each year and customer retention remains above 99%. Our solid renewals, combined with our continued submissions and output growth, give us good visibility and confidence heading into fiscal '27.

Research Solutions climbed 3% due to lower corporate spending on recruiting and lower database revenue offsetting AI revenue. Year-to-date, Research revenue and adjusted EBITDA were up 4% and 6%, respectively, with EBITDA margin improving 50 basis points.

Moving over to Learning. Revenue was down 2% in the quarter with a 5% decline in Professional offsetting 1% growth in Academic. Professional was impacted by corporate and consumer spending headwinds, notably, the previously noted Amazon inventory management adjustments, although they are now beginning to stabilize as expected. We're strategically calibrating our editorial focus toward higher-value franchises where we see stronger demand and better margins.

Academic rose 1% driven by higher rights and licensing revenue and digital book sales. We saw good momentum in our Advanced content business, which includes scientific and technical books for research libraries. We increased our title signings, notably around veterinary science and health, and recently announced a publishing partnership with the International Society of Automation. Wiley will assume control of ISA's backlist of approximately 70 titles and collaborate on publishing ISA's pipeline of automation topics.

Year-to-date, Learning revenue was down 7% with adjusted EBITDA down 8%. Segment EBITDA margin declined 50 basis points to 34.8%.

Now on to our financial position and cash generation, which continue to strengthen. All year-over-year metrics are favorable with our leverage down to 1.7 from 2.0, CapEx down by 11%, operating cash flow up $51 million and free cash flow up $57 million. We're tracking very well to our free cash flow outlook of approximately $200 million.

As Matt noted, 1 of our 4 value drivers is continuing our multiyear margin expansion. Over the past 3 years, we've improved our margin profile by 500 basis points, and we're not done. The focus right now is technology transformation. We're creating an AI-first data-enabled tech organization, optimizing our geographic footprint, rationalizing our application portfolio and outsourcing support for enterprise technology.

We recently announced a 5-year managed services partnership with Virtusa, an important first step in accelerating this transformation. Virtusa is a leading product and platform engineering services company based in Massachusetts with delivery centers in India and Sri Lanka. It enjoys top-tier global rankings in consulting IT services and deep relationships with major Fortune 100 and 500 clients.

The partnership is expected to lead to material operational efficiencies and cost savings, help us modernize how we manage enterprise technology and allow our teams to focus on product innovation that benefits our customers and stakeholders. It will also free up capital for high-return AI solutions for our customers and partners. As part of this partnership and our own consolidation plans, Virtusa has assumed ownership of Wiley's Sri Lanka technology operation.

Overall, we continue to make good progress with corporate expenses on an adjusted EBITDA basis down 21% in the quarter and 12% year-to-date. We reduced total corporate costs before allocations by $17 million year-to-date, with tech transformation responsible for approximately 85% of those savings.

Our fourth and final value driver is to optimize our portfolio and drive disciplined capital allocation. We continue to deploy capital strategically to expand our journal portfolio and content advantage. We're investing to grow presence and share in our fastest-growing research markets, notably China and India. China has been a great success story with noteworthy growth in submissions and output, renewals and corporate sales.

India remains a huge and still emerging growth market. A year ago, we executed on India's One Nation One Subscription initiative, expanding access to over 6,000 Indian institutions and supporting 18 million researchers and students. Demonstrating the increasing demand we're seeing in this important market, Wiley India submissions were up 43% year-to-date.

Matt talked about our capital-light model and partnership ecosystem approach to AI, which positions us well for stronger profitability, high cash flow generation, high returns on invested capital and nimbleness in scaling. Regarding our portfolio, we continue to evaluate and manage specific businesses and products for profitability and strategic fit. We divested a small business in Research Solutions earlier this year and will continue to be very active on this front.

Regarding acquisitions, we're in a very strong position to continue to pursue high-impact journals and research publishing businesses where we see strategic value, synergies and highly attractive returns. Last quarter, we acquired the high-impact journal, Nanophotonics, strengthening our physics portfolio and putting us at the forefront of the fast-growing optics field. And we will continue to accelerate our organic growth strategy of developing proprietary high-value research content and data.

Finally, I want to highlight our share repurchases approaching record levels with $70 million returned year-to-date and a further target of $30 million for Q4. That would put us around 3 million shares repurchased for the year. On top of this, our current dividend yield is approximately 4.5% supported by a healthy payout ratio.

Turning to our outlook for fiscal '26. We're raising our adjusted EBITDA margin and adjusted EPS guidance to the high end of the range, and we remain confident on all other metrics. Revenue growth is expected to be in the low single digits. Research remains strong, expected to finish at the top end of the market, while Learning has been challenged this year by the difficult macro and channel conditions.

Adjusted EBITDA margin is now expected to finish at the high end of our 25.5% to 26.5% range, up from 24% last year. Adjusted EPS is also expected to be at the high end of our $3.90 to $4.35 range, up from 3.64% last year. Finally, we reaffirm free cash flow of approximately $200 million driven by EBITDA growth, lower interest payments and favorable working capital. CapEx is expected to be comparable to last year's total of $77 million.

With that, I'll pass the call back to Matt.

As I wrap up, I want to say a few words about fiscal '27. We'll provide formal guidance in June, of course, but I want to give you a sense of what we're seeing.

We expect Research growth and strong momentum to continue, driven by robust publishing output, steady growth in renewals, market share gains and society wins. We see Learning improving to a steady state as we focus on franchise authors, digital growth and inclusive access and will continue to tackle our cost base.

AI momentum is expected to further accelerate from our executed multiyear partnerships and increased corporate uptake, and we expect another big year in AI revenue. We will start to see the benefits of streamlined business development and product innovation under Armughan.

Finally, we anticipate copyright court decisions to start to materialize. We've talked about the Anthropic copyright settlement, the largest in U.S. history, and that is still in the claims process. We expect to know our share of that by the summer. Important to note, there are approximately 70 copyright lawsuits currently underway in the U.S. involving AI.

Our operational excellence initiatives are fast tracking with full launch of our research exchange platform, the kickoff of our new managed services partnership and the momentum of our AI Center of Excellence. We expect to drive meaningful margin expansion, again, from tech transformation, corporate expense reduction and AI productivity gains. And we remain focused on portfolio optimization and disciplined capital allocation to drive higher ROIC and recurring revenue growth, scale up in Research Publishing and reward our long-term shareholders.

Let me quickly review some key takeaways before opening the floor to questions. We're accelerating our progress on all major areas of focus, driving meaningful growth and momentum in research and AI, expanding margins and cash flow, deploying capital strategically and improving ROIC. Q3 was in line with our expectations, and we're on track to achieve our full year outlook at the high end for margin and EPS.

And finally, Wiley remains extremely well positioned for the AI economy. Our core Publishing business is robust and uniquely secure. Our proprietary content, domain-specific intelligence and partnership ecosystem are in continuously high demand. AI is only as good as the data that fuels it. This is where Wiley comes in.

Thank you to our 5,000 colleagues around the world for all you do to transform knowledge into the breakthroughs that matter and to our investors for joining us and seeing the long-term value creation potential of our business. I'll open the floor to questions.

[Operator Instructions] Your first question comes from the line of Daniel Moore with CJS Securities.

Matt, Craig, a lot of detail there. Greatly appreciate it. I guess we'll start with AI. You just laid it out very well. But 2 years ago, signed your first kind of initial nonrecurring deals. Since then, AI-related revenue doubled from $23 million to $40 million, on our way to $45 million to $50 million. What can you tell us about the momentum and direction of AI-related revenue and contributions that maybe you couldn't 2 years ago as we think about fiscal '26 as a platform for growth?

Yes. Dan, thanks, by the way. And that's exactly what you're seeing. It's kind of you're seeing the market evolve, and I'll turn it to Craig in a minute to get a little more specific, and then the emergence of the business models around recurring revenue. And so you see what we've done with IQVIA and OpenEvidence. Almost think of them as blueprints for what a much bigger market opportunity might look like. And I know you want specifics. We can talk a little bit about these, but there's a lot more to come as these expand. So let me turn it over to Craig to add some more light on that.

Yes. Thanks, Matt. Yes, we like to think of the AI opportunity in the market really moving in different kind of growth curves. As you know, we, a few years ago, as you mentioned, kind of us really started learning and getting into the market and partnering. And we moved into the training model, the first growth curve, if you will, which was largely evidenced by nonrecurring revenue, but important for us to gain partnerships, learn and start to develop where we are headed with our next curve.

And then that next curve being one where we start to get into the recurring revenue model, subscription models, ways where we can really create true sustainable value over time. And we've really started to see that materialize. In the first growth curve, we've seen a little bit more legs to it than we initially imagined, and we are now starting to see the ramp-up of the second growth curve. So this year, we're slightly under 10% of our $45 million to $50 million in terms of recurring revenue.

And we expect that to triple next year. We're going to continue to work to drive that even higher. So we're excited about the progress we're making. It's still early days. And I would say we're moving as fast as our customers are moving, but really trying to seize every opportunity as we go forward.

Yes. I want to add two important points to help with the understanding. One is that comment about we can move as fast as our customers are moving because I think everyone is learning how to bring AI into their core business processes. So a lot of the growth here is going to be based on the customers' learning on how to use AI to improve research productivity, shorten cycles, et cetera. We're there with them side by side. Second is, as I mentioned, we have a new leader for our AI and Data Services focus in Armughan. And he is now building out a growth plan. And I would expect as he completes that plan, we can provide more transparency into how we see this evolving.

Really helpful. Appreciate it. I was going to ask you about the moat, but I think we covered that in the first 10 or 15 minutes really well.

On the margin side, obviously, you reduced corporate expense, I think, $9 million this quarter, down 10% plus. On track for 26% plus EBITDA margins. Two different questions, but one, maybe elaborate on the partnership with Virtusa, the implications around potential cost savings as we move forward and what does that imply about the direction of EBITDA margins in kind of fiscal '27 and beyond.

Yes. Thanks, Dan. We're very excited about the partnership with Virtusa. We have a pre-existing relationship and we're really expanding that on a significant scale. This relationship for us is, roughly right, it's a $150 million over 5 years in terms of our contract size. We expect it to generate both productivity as well as agility. So we see it contributing towards our margin expansion objectives. We also see it propelling us into AI types of tools and AI-first technology infrastructure that's going to really help us continue to find innovation and productivity through the years.

I would say from a margins perspective, I won't get into the details about specifics on what it yields, but I will say that tech transformation broadly has been a significant driver of our margin expansion this year. And we expect that to continue going forward into the coming years as we layer on other types of initiatives as well that are going to really help us to continue to drive multiyear margin expansion.

Perfect. And just Research Publishing, up 4% adjusted. Article submissions continue to be really strong, up 26%. I guess outside of China, you mentioned India. Any other kind of fast-growing regions or pockets of strength? And given double-digit growth in submissions this quarter, double-digit growth in output, would we expect that 4% growth to trend even higher? Or is that a good place to be from your perspective here from near term?

Jay, why don't you begin and I may wrap up?

Yes, sure. Dan, thanks for the question. Yes. We're seeing growth across a broad set of regions. The strongest momentum continues to come from the major global research markets. We saw good growth in China, as you mentioned, in India, as you mentioned, but in North America, too. Submissions, article volume up there. European markets as well really rebounded strongly for us. Happy to see Japan growing again after a tough couple of years in that market.

So at the same time, we like what's happening in the Middle East and we like what's happening from a research and investment perspective there. Governments and universities are investing more heavily in research output and in international collaborations. That, taken together with the strong performance in the core markets, gives us confidence about the trajectory of the business. It's really important to state as we did a year ago that growth is not concentrated in any single geography.

It reflects the continued expansion, as Matt noted in the prepared remarks, of the global research ecosystem. And that's showing up across the submission and publication volumes that are growing at a healthy pace. So as we said, top end of the market range for this year. And with the investments we continue to make in our top brands, with the tailwind that AI is going to provide in the core for submissions and for researcher productivity, we feel confident as before in the trajectory of the business.

Yes. That's a great summary. I think, Dave, what we're seeing is the resilience and durability of research on a global scale, the benefit of the global diversification that we have, as Jay pointed out. And also, our business is performing quite well, and I would expect it to continue performing at the top of the market.

That's great. Maybe one or two more and I'll pass it along. But on the Learning side, I think you talked about getting back to stability. If I sort of bifurcate the Academic versus Professional pieces of the business, do we need the library on the Professional side to feed either AI? Or is it synergistic? Just that piece of the business stands out as a little bit kind of noncore when we think about the real tilt to focus on growth and research and wondering your thoughts on that.

We've talked about this in the past. And these are great franchises but not growth franchises, and so they are producing strong earnings and cash flow. And we're always mindful of capital allocation as I talked about in my remarks. So there aren't any sacred cows here. So we'll be looking at this as we go forward as we do routinely, Dan.

Perfect. Last one. I know it's rhetorical. Obviously a really strong quarter outlook, very healthy. You're trending towards $5 of cash earnings per share. The stock is a little over 5x EBITDA. Leverage is going to be close to 1x pretty soon. Strong double-digit free cash flow yield. Other than buying back stock and making the case that you are today very articulately, is there anything else we can do to keep trying to unlock shareholder value? And I know that's not a fair question, but just throwing it out there. And I appreciate all the color today.

No, it's a good question, tough question. Craig, do you want to start? And then -- yes.

I think, Dan, we wake up every day thinking about this, how we create value for Wiley, for our colleagues, our shareholders and for all our stakeholders. We think importantly about organic growth investments. With Armughan coming onboard, with our focus on AI and data analytics, we see a lot of potential opportunity to really create new value for customers and for Wiley overall.

We continue to think where we have existing core strengths. The Research business is one that continues to show strength and resolve, growing at the top end of the market. So when we think about investments we've made, whether it's Advanced brands or geo-diversity, we continue to think very broadly about organic growth opportunities where we have sustainable competitive advantage in our business.

Beyond that, portfolio and capital allocation is a way of life. It's been part of what Wiley's been focused on for several years. And as we mentioned during our earnings call in my comments, that we had divested a small business earlier this year. It's just evidence that we continue to look very strategically and thoughtfully about our business and where to kind of draw the resource and capital to the most effective places for the business.

Beyond that, I think we are continuing to be very active on thinking about how we return capital to shareholders. We have a very healthy payout ratio. We have doubled our share buybacks given the opportunity we've had with a strong cash flow. And we continue to do that while investing in the business. So we're not making any trade-offs here. I think the opportunities continue to be very robust in front of us, and we're excited to help bring that forward as we tell more of our story.

[Operator Instructions] At this time, there are no further questions. I will now turn the call back over to Mr. Kissner for closing remarks.

Yes. Thanks, everyone. I want to thank you for your continued confidence in us. You see we're building a solid foundation for the future while delivering strong current results, which was our commitment we made 2.5 years ago. And we're really looking forward to getting together in June in that regard and talking about how we close out the year.

See you then. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Good morning, and welcome to Wiley's Second Quarter and Fiscal 2026 Earnings Call. As a reminder, this conference is being recorded. [Operator Instructions]

At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.

Good morning, everyone. On the call with me today are Matt Kissner, President and CEO; Craig Albright, Executive Vice President and CFO; and Jay Flynn, Executive Vice President and General Manager of Research and Learning.

Note that 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 U.S. 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, and variances are on a year-over-year basis and 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'll now turn the call over to Matt Kissner.

Thank you, Brian. Hello, everyone, and welcome to our Q2 earnings update. Before I get into results, which were highlighted by strength and momentum in research and AI, but also declines in learning, let me briefly touch on our agenda. I'll start by outlining what's happening in learning and how we're addressing it.

Next, I want to address the questions we've gotten from prospective investors about the unique durability and resilience of the research business and the positive role AI is playing. As you will see, we believe AI is an accelerator for our research core. Building on this, investors naturally want to learn more about our AI growth strategy. So we're going to spend a little time this morning addressing those topics in more detail. I'll also talk about how we're executing on our full year commitments and walk through our overall growth drivers. Craig will review our performance, operational excellence and margin expansion initiatives, as well as our outlook for the year.

Now on to our purpose, which is to unleash the power of science, it means transforming trusted scientific knowledge into practical tools and intelligence that solve real problems. We're moving with urgency to integrate scientific research into new technologies to revolutionize R&D across corporate, academic and government markets. It's a paradigm shift, and we are at the center of it. Never has the trust and accuracy of information mattered more.

Our customers range from Noble Laureates to early career researchers from Fortune 500 innovation teams to government research bodies, all relying on us to ensure scientific excellence and turn scientific knowledge into competitive advantage.

Let's turn to the quarter. We saw a mixed revenue picture with strong growth in research and good momentum in AI, offset by market challenges in our Learning segment. I'll dive into learning in more detail on the next slide. Research Publishing delivered strong 7% growth on worldwide demand to publish, read and license. Volume remains at record levels worldwide.

We executed another AI licensing project for an existing LLM customer this quarter, putting us close to $100 million of AI training revenue in less than 2 years. Our corporate expansion is accelerating with new subscription customers and a strong pipeline. We continue to advance our strategic partnerships with AWS, anthropic and perplexity and added mistrial AI during the quarter.

We delivered strong earnings growth as we continually address our overall cost base, reduce our corporate expenses and drive disciplined capital allocation. Our Q2 adjusted operating margin was up 250 basis points to 18.8%. We increased our share repurchases by 69% this quarter to $21 million. We see our shares trading well below our assessment of true value, which positions buybacks as an efficient use of capital. Through the half, we've returned $73 million to shareholders in buybacks and dividends and our current yield is around 3.9%. Finally, we expect to drive leverage materially lower this year. Our strong balance sheet is expected to get even stronger.

I want to acknowledge our challenges in learning before getting into the positive developments this quarter. Those of you who know me know that I'm not one for spin. Let me just say it's been an unusual year for learning. Driven by a set of external factors, which began in the first quarter.

First, across the industry, we've seen a significant change in inventory management from Amazon. We've seen this before, and it's an abrupt challenge to manage through. Second, consumer spending is soft and professional books are somewhat cyclical. It's the only consumer cyclical part of our business. Third, we've seen enrollment challenges in select Wiley disciplines, namely computer science, down 8% in the full semester. Computer science has been an important growth area for us, particularly with digital courseware. Fourth, corporate spending and hiring is soft, and that means lower consumption for our personality assessments and team development programs.

Many of these factors are macro related and we'll be watching how these trends play out for the balance of the year. From a mitigation standpoint, we are ruthlessly prioritizing to where we see upside, including inclusive access and other digital offerings and instituting pricing strategies, category optimization and targeted marketing campaigns. We expect learning declines to moderate in the second half as inventory actions stabilize, although revenue is expected to be down for the full year. Cost actions will help offset any top line impact.

Let's turn to our key strategic priorities and value creators and the execution of our fiscal '26 commitments. As always, our first objective is to lead in research. It was a strong quarter for research with 7% revenue growth in Research Publishing and 220 basis points of EBITDA margin improvement. We continue to drive above-market growth in submissions and output, up 28% and 12%, respectively.

Remember that 80% of our volume comes from outside the U.S. and strong demand is evident across all regions with double-digit submissions growth in China, India, Japan, the U.K., Germany and the U.S. Higher volumes are leading to both double-digit growth at Author-Funded Open Access and compounding growth in our recurring revenue models.

Our second commitment is to deliver growth in AI and adjacent markets. We executed another licensing project for LLM training with $6 million realized in the quarter and $35 million year-to-date. On the innovation side, we're now at 30-plus publisher partners for our Nexus content licensing service and we're in active discussions with others.

As a reminder, this is where we combined our content with that of our publishing partners and license it to AI model and application developers. We also launched our AI gateway an interoperable content enrichment and delivery platform in partnership with AI ecosystem players like Anthropic and AWS. Our corporate expansion continues with 8 customers subscribing to our knowledge feeds with strong interest across multiple verticals.

Our third commitment is to drive operational excellence and discipline across the organization. Craig will run through this in more detail, but we've made terrific progress in reducing our corporate costs and improving our research margin. We still have work to do, but we are pleased with our progress so far.

Let's talk about our resiliency across economic cycles and AI as a tailwind. What makes research different? First, peer-reviewed publishers set the global standard for scientific excellence, distinguishing solid research from world-changing discoveries. At the center of this ecosystem of Wiley journals independently rated and widely recognized, forming a lasting competitive moat. Tens of millions of researchers worldwide know and trust these journals and peer review is at the heart of it.

An industry survey found that 94% of the researchers who participated believe peer review is essential for maintaining control and quality and scientific research. Second, peer-reviewed content is must-have for institutions and increasingly corporations through both good times and bad. Research is the core of the university.

Over 10,000 research universities around the world subscribed to our portfolio of journals. Researchers at these institutions must have unfettered access to these journals and they get it through multiyear digital licenses. Today, institutional customer retention is above 99%. In addition to universities, R&D-centric corporations are now exploring integrated feeds of this content for their AI models and applications.

Third, publishing is essential for a researcher's career and for global recognition of scientific achievement. For example, tenure often requires 7 to 9 publications and a strong publication record is key when applying for academic positions. Publishing in a top-tier journal brings international acclaim, while also serving as the main way to demonstrate the impact of research and secure additional funding. Fourth, research output is ever increasing, driven by global R&D spend. Remarkably, article output has grown every year since 1944, with the exception of a slight dip in 1971.

Moreover, the rate of research output is expected to accelerate given the increasing importance of science and the rise of AI. Our analysis found that 84% of researchers are now using AI in their work up from 57% last year. Another study showed a threefold increase in the number of papers by researchers who use AI. Fifth, research evolves constantly. An estimated 14,000 new articles are published daily worldwide, making recency critical for AI accuracy. In high stakes fields like life sciences, AI systems must continuously incorporate the latest findings to remain reliable and effective.

Finally, published research is protected on the IP copyright law and its use must be authorized. We've talked about the anthropic copyright settlement, the largest in U.S. history. Beyond this, approximately 60 copyright lawsuits are currently underway involving AI.

Let me run through our key differentiators as we transition to an AI economy. Why do we consider it a long-term tailwind and a growth engine. First, we provide access to much of the world's trusted scientific, technical and medical content through our own portfolio and that of our publisher partners. We are a big three global publisher at a time when quality and scale matter most.

We are further differentiated by our top position in fast-growing knowledge domains, chemistry, material science, oncology, technology and engineering, food science, and finance and economics. We have strong, long-standing relationships with researchers, institutions, societies and funders across the globe. We are the society partner of choice in the industry, and our platforms host nearly 50% of the world's English-language Journals.

We're a first mover with LLM developers and corporations building out AI models and applications so much so that other publishers want to be part of our licensing network. We're a pioneer in securing strategic relationships with the world's most advanced AI innovators. The first research published to be on the AWS Marketplace and Claude for Life Sciences.

Finally, rather than develop and compete through closed platforms, we are partnering with others through a CapEx-light and open platform approach. This strategy allows us to leverage existing infrastructure and expertise while enabling broader collaboration across the research ecosystem. An open platform accelerates innovation by allowing multiple partners to contribute and build upon shared capabilities reduces our capital requirements and creates network effects that benefit all participants ultimately delivering more value to researchers than any single organization could achieve alone.

Let me walk through our three growth factors: content, platforms and markets and the drivers underneath them. As you can see here, some of our drivers are enabled by lasting trends in our core research business and some enabled by the use of AI.

In content, we are expanding our journal portfolio and brands into fast-growing STM fields as with our advanced brand. We continue to license our proprietary content and others for LLM models and corporate applications.

In platforms, we have our research exchange publishing platform, our AI Gateway and future growth opportunities with data products. I'll talk to the first two in the coming slides. On the third, we see proprietary data as a competitive moat over time as we deeply embed ourselves into the workflows of our corporate customers.

For example, we have the most comprehensive spectral database collections in the world for chemists and other researchers. In markets, there are two growth drivers. The first is geographic where we see a targeted opportunity to expand globally as China, India and Brazil invest to become super powers in science and technology. China is now the #1 source of research output in the world.

India and Brazil is showing strong double-digit submissions growth and expansive nationwide agreements. The second growth driver is building a significant presence in high stakes corporate research through the use of AI and data analytics. As noted, corporate makes up 80% of total U.S. R&D spend, but is only 10% of our revenue base today. Although it's early days, corporate R&D represents a substantial future growth opportunity for us.

Let's take a step back and review our content licensing models. We think about the market in two ways. The first is licensing archival content to train large language models. This quarter, we realized $6 million of licensing revenue with an existing LLM customer and $35 million year-to-date compared to approximately $40 million in fiscal '25. We continue to have active discussions with model developers, although these opportunities remain hard to project.

The second wave is in licensing a knowledge feed of our content for vertical-specific applications. R&D-intensive corporations are then able to integrate this knowledge into workflows to identify breakthroughs, speed up product development and lower costs. As noted, we currently have 8 customers, including the European Space Agency, Novartis and Regeneron, among others. We expect this number to ramp up as these vertical applications advance.

Today, we're in active discussions with companies ranging from energy to pharma to consumer staples. And the example of our corporate expansion is our recent agreement with IQVIA, a leading provider of clinical research services to the life sciences industry. IQVIA will bundle our clinical outcome content with their clinical research capabilities to deliver one-stop solutions for pharmaceutical companies. It's an important example of the corporate R&D opportunity for Wiley as we turn knowledge into real-world impact.

During the quarter, we continued to add partners to our Nexus licensing network and launched our AI Gateway content enrichment and distribution platform. On Nexus, we generated $16 million of revenue year-to-date, all of it in Q1 and continue to build out our partner network of 30-plus high-impact book and journal publishers with more in the pipeline.

On to our AI gateway, which is complementary with large language models. You can think of this service as a Wiley content repository that can be accessed by an API connector through platforms like AWS Marketplace and Claude for Life Sciences. Users with a subscription can run queries through the connector to retrieve highly relevant information from our platform.

Importantly, as these involve retrieval augmented generation or REG models, our content supplements the model to provide more accurate trustworthy results, but is not absorbed in the model. Unlike closed ecosystems that require researchers to adopt proprietary tools, Wiley's AI Gateway is differentiated for its openness partnership and interoperability.

We also envision it for other publishers who want to leverage our technology and infrastructure to make their content available for corporate and other AI applications. We're currently in user trials with corporate R&D researchers and academic institutions.

I'll turn to our research exchange platform, where 65% of our journals are now live. The main point I want to emphasize is that this transformative publishing platform goes beyond efficiency and lowering our cost to publish. It's also about driving incremental revenue growth. As an example, the platform will deliver a best-in-class user experience from submission to acceptance, enabling us to attract new authors, drive more volume and manage it more efficiently.

With AI incorporated across the platform, we will improve submission capture, automate, refer and transfer and improve our turnaround times. As a reminder, about 70% of articles submitted to Wiley are rejected mainly due to improper fit. Through the AI functionality we introduced, we can now transfer these articles to more appropriate journals within our portfolio. We are rapidly scaling delivery of these new features and services.

We believe that researchers and other professionals want trusted content that integrates with their own tools and their LLM of choice, and so we're partnering with AI ecosystem players remaining agnostic in carving out our own critical niche. Recently, we added Mistral AI to our base and became the first research publisher to list a full tax agent knowledge base with AWS, enabling AI agents and applications on the AWS marketplace.

We have won new corporate customers through the marketplace and are in active dialogue with others for our own subscription knowledge feeds. Also note, we are the first research publisher to have our connector featured on Claude, all good momentum.

To summarize, I hope you can see why we are fully confident in our research core and excited about the expanding AI opportunities in front of us.

I'll now turn the call over to Craig.

Thank you, Matt, and hello, everyone. My focus is straightforward: continue to drive discipline across the organization, challenge complexity and shift our portfolio toward high margin, high ROIC business models. We're making real progress on multiple fronts, but we have more work ahead.

Turning to our second quarter results. It was a strong quarter for our research business and a challenging quarter for learning. At the same time, we continue to deliver material margin expansion. Adjusted EBITDA grew 8% and adjusted operating margin expanded 250 basis points to 18.8%. This reflects disciplined cost management, technology transformation and AI-driven productivity gains, themes I'll expand on in a moment, as well as the benefits of our product profitability actions to shift toward higher-margin businesses.

Let me walk through segment performance, starting with research. Research delivered 5% growth and a 220 basis point improvement in EBITDA margin to 33.5% demonstrating our continued operating performance and cost improvements. Research Publishing was particularly strong this quarter, driven by record submissions, solid growth in our recurring revenue models and 28% growth in Author-Funded Open Access. AI revenue and Research Publishing totaled $5 million of our $6 million licensing project this quarter, reflecting continued demand for AI LLM training.

Calendar year 2026 subscription renewals are underway. And while it's still early, renewals are tracking steadily worldwide, including early commitments from large institutional customers, such as the regional consortium in Australia and New Zealand. We'll have a fuller picture in March when the majority of our renewals are complete.

Research Solutions declined 6% due to lower corporate spending on advertising and recruiting. We expect improvement in the second half driven by strong pipelines in spectral data products for OEMs and managed advertising and knowledge hub solutions for pharma and health care customers. Through the half, research revenue and adjusted EBITDA were up 5% and 8%, respectively, with EBITDA margin improving 60 basis points to 30.9%.

Now let's turn to learning. Learning was down 11% in the quarter, driven primarily by headwinds in professional and academic, as well as prior year AI revenue of $4 million. Professional declined 16%, impacted by retail channel dynamics, particularly with Amazon inventory adjustments and softer consumer spending. Print was the main driver, followed by assessments due to a soft corporate environment. We're responding by reorganizing our editorial focus toward higher-value authors and accelerating our shift to our digital projects where we see stronger demand and better margins.

Academic declined 8%, also affected by retail dynamics and an 8% enrollment decline in undergraduate computer science, which pressured our zyBooks STEM courseware. That said, our strategic Inclusive Access Program continues to grow revenue by double digits with a healthy pipeline. Through the half, learning revenue was down 10%, with adjusted EBITDA down 12%. Segment EBITDA margin declined 80 basis points to 34.4%. We're taking targeted actions to stabilize revenue and protect margins in the second half, including tighter cost discipline and accelerating product repositioning.

Let me turn to operational excellence, which remains central to our margin expansion story. We're driving three major initiatives: first, technology transformation, we're building an AI and data-enabled technology organization, consolidating locations, rationalizing our application footprint and refocusing our enterprise modernization effort to be more flexible and cost effective. This is a multiyear transformation that will materially reduce our cost base. Second, ongoing cost discipline. We continue to deliver savings from prior restructuring actions while managing expenses tightly.

This quarter, unallocated corporate expenses on adjusted EBITDA basis declined 18% or $8 million, driven by targeted actions in technology, HR and finance. Research has been a particular success story where we've driven both cost improvements and 220 basis points of margin expansion. Third, AI-driven productivity. We've established an AI center of excellence to automate manual processes and fundamentally change how we work. We're deploying AI agents, building an active user community and delivering measurable productivity gains.

A clear example is our customer service transformation and partnership with Salesforce, where we're seeing meaningful efficiency improvements. These efforts are ongoing and will continue to drive margin improvement as we scale them across the organization.

Let's turn to our financial position and capital allocation. Free cash flow was a use of $108 million, a 17% or $22 million improvement from prior year. As always, cash flow is seasonally negative in the first half due to journal subscription timing. We collect the majority of our cash in Q3 and Q4. CapEx was $31 million compared to $36 million in the prior year. When combined with the capitalized cloud spend reported in cash from operations, total CapEx and cloud investment was $38 million for the half down from $42 million in the prior year.

On capital allocation, we continue to deploy capital strategically. We acquired the high impact journal Nanophotonics, which strengthens our physics portfolio and positions us at the forefront of the fast-growing optics and photonics field. We'll continue to opportunistically pursue acquisitions of high-impact journals and collections where we see strategic value and attractive financial returns.

Share repurchases were up 69% to $21 million or $35 million year-to-date compared to $25 million in the prior year period. With our new 10b5-1 plan, we're now active throughout the year. Our dividend yield is around 3.9%, supported by a healthy payout ratio, and we continue to reinvest in organic growth initiatives. Finally, our leverage continues to improve. Net debt-to-EBITDA was 2.0x on a trailing 12-month basis, down from 2.2x in the prior year. We expect leverage to decline materially by the end of fiscal year 2026.

Turning to our outlook. We're reaffirming guidance for adjusted EBITDA margin, adjusted EPS and free cash flow, while narrowing our revenue outlook to the lower end of the range. Let me walk through the key metrics. Revenue growth is now expected to be in the low single digits, down from our prior range of low to mid-single digits. Research demand is tracking better than expected, but as discussed, learning will be down for the year. The second half declines will moderate.

We expect AI revenue to be moderately ahead of last year's $40 million. Adjusted EBITDA margin of 25.5% to 26.5%, up from 24% last year, adjusted EPS of $3.90 to $4.35, up from 3.64% last year. And free cash flow of approximately $200 million, driven by EBITDA growth, lower interest payments and favorable working capital. CapEx is expected to be comparable to last year's total of $77 million.

One note on quarterly phasing, we anticipate Q3 will be lighter than typical due to the timing of AI project revenue, which creates a year-over-year headwind of approximately $9 million in research. Growth is weighted to Q4, driven by journal renewal timing and customer pipeline conversions and Research Solutions and learning. As always, we encourage you to focus on full year performance as the best measure of our progress.

With that, I'll pass the call back to Matt.

Thank you, Craig. Let me briefly review our key takeaways before I open the floor to your questions. We're delivering strong growth and momentum and research supported by robust demand and the disciplined execution of our strategy. Our leadership position in AI continues at pace with another LLM training agreement in Q2 and increasing momentum for our subscription knowledge feeds in corporate R&D.

Our strategic partnerships with AI innovators are starting to yield early results, and we're making good headway with our innovative publishing and aggregation platforms. We are focused on our fundamentals in delivering strong earnings growth, material margin expansion and cash flow improvement for reinvestment and return to shareholders.

As I said before, continuous improvement is a way of life for us now. Through the half, we returned $73 million of cash to shareholders in dividends and share repurchases. Our balance sheet continues to be a foundational strength as we further reduce our leverage.

And finally, we're confident in our long-term direction driven by our unique right to win and research and transformative opportunities in AI. I want to thank you all for joining us today for your interest and for your investment. And special thanks to our global Wiley colleagues for all they do to make us a very special company with a very special path and a very meaningful and promising future. I want to wish all of you a happy and healthy holiday season and a momentous new year.

I'll now open the floor to questions.

[Operator Instructions] Your first question comes from Daniel Moore with CJS Securities.

Start with the research side. Research revenue grew 5% ex currency, driven by OA and mixed model, which is great to see. Does that feel like the right place to be? Just wondering if there could be some incremental upside to that type of growth, not necessarily next quarter, but over the next near to midterm, just given the strong and continuing high double-digit growth that we've seen in article submission over the past few quarters.

Ladies and gentlemen, please hold on the conference will resume momentarily. Thank you for your patience.

It's unmuted. Can you hear us at all?

Yes, you can go ahead.

All right. Great. Thank you. Sorry, Dan. We had a little technical glitch here. Let me begin and then ask Jay to comment the market typically grows...

Can you hear us now, Dan?

Yes.

We think we're going to be growing at the top of the market growth, if not, I think there's the potential to outperform given our strong article growth. I mean that's a very powerful leading indicator here. So let me ask Jay to maybe add a little color to that.

Dan, last quarter, we characterize, and I think others in the space would characterize that overall market growth sort of trending between 3% and 4%, we thought we'd be at the high end of that. And as you saw, 5% in the quarter, 7% for Research Publishing in the quarter. Underpinned by really strong metrics, as you talked about. We're cautiously optimistic, but we're just getting into the renewal season now.

As you know, we're beginning dialogue and beginning the conversations executing renewals for calendar '26. Obviously, we feel good about the performance in Q2 for research and in particular, in Research publishing. And we'll leave it at that for now. But I feel like at the top end of market is a comfortable place for us and we'll watch how it develops as the renewal season comes in.

Very helpful. I appreciate the color on AI, not only the licensing revenue, but the other opportunities. Just maybe a little bit more color around $6 million in revenue that you booked during the quarter. It sounds like it was with an existing LLM customer. Talk about the pipeline of opportunities? Are you seeing customers like that sort of come back for additional sites of the Apple? And I think you said full year, up modestly versus the $40 million, which would imply something above $5 million in licensing for the back half of the year. I just want to make sure that's correct.

Dan, Craig Albright here. So I think you've got the read right. The $6 million deal, we feel really good about. It was majority Wiley content. It was a repeat customer. And it was a good signal that there continues to be some length in the LLM training model that we've talked about in the past. We have also talked about the fact that this is a bit lumpy, that it's hard to predict exactly when the deals come in.

We want to make sure they're the right kind and the right guardrails kind of put around them, and that's what we continue to do. We guided to moderately up year-over-year. We have a continuing pipeline that we're working. And I think the way you phrased it is about right. But let me turn it over to Jay and see if you want to add anything else.

Yes. Thank you, Craig. Dan, you've called it right based on what we reported and what we're guiding to. But I think for me, I want to make one additional point, which is that our commitment both to investors but also to ourselves is to generate meaningful deep relationships, which drive recurring revenue and to continue to come back and learn from these partnerships to drive our own product innovation pipeline.

So it's no coincidence that we're doing training deals, but we're also partnering with OI native companies. It's no coincidence that -- once we've established those partnerships, we've developed a strategy that relies on openness that relies on meeting users where they are using the tools that they want and then using both of those things to go into corporate R&D and to help corporate customers achieve their aims more quickly, cheaper and with an increasing degree of confidence.

So we feel good about all three of those opportunities. And as we get through the rest of the year, I hope to talk more about all three of them as it relates to F'27. But we'll keep it at that for now and want to reaffirm your read on where we're guiding to now.

Understood. Helpful. Switching gears to learning obviously remains challenged. Maybe your best guess for how much of the decline is due to sort of end market demand versus inventory management at large retailers, Amazon, specifically in the channel. And I think you said that, that headwind should moderate in the back half. But do you have any additional color there would be helpful.

Yes. Let me spend a few minutes and then turn it over to Greg and certainly, Jay. We -- I spent a week at the Frankfurt Book Fair in October, talked to the publishers and everybody is seeing the impact of this, let's call it, change in inventory strategy, just because of the importance of Amazon in this business, that our early indications are that, that ordering pattern is starting to normalize. And we don't see any change in end user behavior.

In other words, the people stop reading books. So there's no reason to believe that there's kind of been an abrupt structural change at this point in time. But we are learning and keeping our eyes on this. So Craig, Jay, anything you want to add to that?

Yes. No, I think Matt, you covered it well. While we don't give guidance specifically on segments, Jay highlighted earlier here that -- there's some headwinds here in learning. We expect those to normalize, as Matt said, still likely to be down for the year.

But I think we do it more as cyclical than structural in terms of what we're seeing in terms of the trade business. There are parts of it in terms of enrollments in higher ed, where we've got our closer eyes on to see if there's some other shifts going on there that we have to kind of continue to stay focused on more structural, but at this point, I think the majority is leaning towards cyclical. We've seen these kind of cycles in the past, and we happen to be at the kind of bottom of one of those cycles, but all the indicators are that there should be some normalization and recovery here.

Helpful. Well, kudos for maintaining the guidance given those headwinds that certainly a little bit stronger than what we thought a couple of quarters ago. Maybe just one, two more.

You stepped up the pace of buybacks during the quarter. Free cash flow guide implies something well north of $300 million in free cash flow coming in, in the back half of the year. So given that and the health of the balance sheet, do you anticipate ramping that pace further as we get -- how are you sort of weighing the accelerated buybacks versus delevering as we look at the back half of the year?

Great question, Dan. Thank you. Yes, as we've said in the past, we have a very disciplined approach to capital allocation. And the opportunity we have, certainly with the cash flow guide that we're giving is yes, that we could continue to use some of that towards share buybacks.

We want to maintain discipline between our growth opportunities internally. We want to make sure that we continue to manage the leverage ratio at the right levels. But we do see opportunities. And I would say in that front, we continue to be opportunistic. We're now in the market every trading day of the year with our 10b5-1 plans. When the prices are attractive, we have shown already that we are more aggressive in terms of share repurchase. I think we'll continue to look opportunistically going forward as well. But we feel good about the pace we're on with our return to shareholders, and we're going to continue to maintain that discipline.

[Operator Instructions] There are no further questions at this time. I'll now turn the call back over to Mr. Kissner for any closing remarks.

Yes, I want to thank you all for joining us. Once again, I want to wish you and your loved ones a healthy and happy holiday season. We thank you for partnering with us on this journey, and we look forward to updating you on our progress at our March call. Have a great holiday.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, and welcome to Wiley's First Quarter Fiscal 2026 Earnings Call. As a reminder, this conference is being recorded. [Operator Instructions]

At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.

Hello, and thank you all for joining us. On the call with me are Matt Kissner, President and CEO; Craig Albright, Executive Vice President and CFO; and Jay Flynn, Executive Vice President and General Manager of Research and Learning.

Note that our comments and responses reflect management's 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 U.S. 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. Unless otherwise noted, we'll refer to non-GAAP metrics on the call and variances are on a year-over-year basis and 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 on our Investor Relations website at investors.wiley.com.

I'll now turn the call over to Matt Kissner.

Good morning, and welcome to our first quarter earnings update. I hope you had a nice and restful summer.

Before we discuss our first quarter results, I'd like to reflect on the progress and leadership we are demonstrating in the world of AI. When we completed our first AI licensing project in January 2024, we believed that our active participation in the new emerging AI world would pay dividends by building our expertise and developing strategic relationships with major AI developers. As I will describe later in my remarks, our early work here is opening up growth opportunities across our businesses and in the promising corporate R&D market.

This quarter, we achieved a significant milestone by including content from other publishers in our latest licensing project, another demonstration of our leadership in this exciting new space. Our authoritative content, data and services are increasingly in demand for the advancement of both AI science and AI learning, and we're moving decisively. After all, our two centuries aren't about age. They're about our proven ability to anticipate and drive transformation.

Let's talk about the quarter. Q1 is our seasonally smallest period, and there is noise in our year-over-year comparisons and margin mix, which Craig will discuss. Our overall performance, however, was in line with our expectations. We drove mid-single-digit growth in Research through AI licensing and Open Access momentum and despite an unfavorable comp versus prior year. We executed a landmark $20 million AI licensing project this quarter for an existing foundational large language model customer where, for the first time, we included content from our publishing partners.

We also announced a key strategic partnership with Anthropic to accelerate AI across scholarly research by integrating institutional library subscriptions into Claude, all part of a pilot program designed to add value to our existing institutional offerings and support student use of safe, authoritative content when using AI.

We increased our annual dividend for the 32nd consecutive year. Very few companies of our size or any size can say similar, demonstrating our long-term commitment to return cash to our shareholders. We also increased our spend on share repurchases in the quarter, and the Board approved a $250 million repurchase authorization, a 25% increase over our previous program.

Finally, I want to welcome Craig Albright as our new CFO. Craig brings 30 years of global leadership in finance and strategy, recently serving in multiple senior financial roles at Xerox. His track record of driving high-quality growth, disciplined investment and cost synergies lines up perfectly with our ongoing objectives, and I look forward to closely partnering with him to take Wiley to the next level. Welcome, Craig.

I also want to express my profound gratitude to Chris Caridi for his exemplary leadership throughout this transition. We are fortunate that Chris remains our Chief Accounting Officer and finance transformation leader.

Let's talk about our fiscal '26 commitments. As a reminder, these areas reflect how we have driven operational progress over the past 20 months and they remain key focus areas for value creation. The first objective is to lead in research. We are driving above-market growth in submissions and output, up 25% and 13%, respectively. Importantly, we're seeing double-digit submissions growth in nearly all key geographies from China and India to the U.S., U.K. and Japan. Germany, where we were the first publisher to strike a nationwide agreement, has returned to growth for the first time since the pandemic.

Much of this volume growth goes to supporting and increasing the overall value of our recurring revenue models. Submissions growth also drives our gold open access program, where revenue is a function of price and quantity. As a reminder, it takes about 6 months for a submitted article to be published. So these are good indicators for future performance. Remember that about 2/3 of Research revenue is recurring, and we delivered a strong journal renewal season for calendar year '25, driven by volume and pricing growth.

We continue to deliver double-digit gold open access growth driven by the enduring draw of our journal brands. Our Open Access flagship journal, Advanced Science, continues to be a great story with revenue growing nearly 50% over prior year. We also had a record month in July for OA submissions, so very good momentum there. Our large catalog of high-quality journals forms our robust competitive moat. This quarter, we continued to build on that position with 17 Wiley journals receiving a top category rank in the Annual Journal Citation Report, which measures the impact of peer-reviewed journals. Today, Wiley journals are responsible for over 10% of all citations in the index.

Our second commitment is to deliver growth in AI and adjacent markets. I'll talk about this in the next couple of slides, but we're not just participating in the AI revolution. We are defining how our industry approaches knowledge licensing and partnership. We delivered $29 million in AI licensing revenue this quarter alone, up from $17 million in the prior year period, demonstrating the market's recognition of our leadership position.

What sets us apart is our pioneering approach to publisher collaboration. The Wiley Nexus is our unified platform for the AI economy, connecting academic content to AI applications and streamlining licensing processes. Through comprehensive partnerships, the platform enables us to both aggregate scholarly content for AI training and develop cutting-edge research tools using advanced vector database technology.

By facilitating partnerships with services like Claude for Education while ensuring publishers retain complete content sovereignty and existing business relationships, we leverage our specialized AI and legal expertise to deliver value across the publishing ecosystem from streamlined licensing processes and enhanced institutional subscriptions to AI-powered discovery tools. We also continue to advance our AI subscription inference models with potential customers across select industry verticals, setting new standards for how enterprises access and utilize specialized knowledge through AI.

While inference models and strategic partnerships require thoughtful development, we are moving decisively to capture this transformational opportunity. For example, during the quarter, we consolidated multiple corporate sales functions into one unified team dedicated to driving growth in the corporate R&D space.

Our third commitment is to drive operational excellence and discipline across the organization. This quarter, we reached an important milestone in the scaled migration of our new research publishing platform, the Research Exchange, with 1,000 journals successfully transitioned to the new technology and 350,000 unique users served. To refresh, we've built a best-in-class platform that combines all of our major publishing workflows into one integrated system using AI and machine learning to support authors, referees and editors in managing article submissions, quality and integrity screening and peer review.

The advantages of this system include a faster and lower-cost journal production process, a significantly improved author experience and a unified information architecture that facilitates stronger management of the article production process. Wiley is also gaining from standardization while customers benefit from leading-edge publishing technology, imperative when it comes to dealing with research integrity and harnessing AI. We've taken a measured approach to its rollout, and 92% of researchers have rated the system as easy to use.

This quarter, the platform garnered a key industry award for excellence in research integrity. This is where we've taken a clear leadership position in the industry both in terms of advocacy and product.

Coming out of the quarter, we're increasingly confident in our full year outlook, driven by research trends and AI momentum. We see good growth in our contracted journal revenues for calendar year '25. Strong Open Access growth is expected to continue, driven by accelerating demand and output worldwide, including in the U.S. This gives us a publishing backlog of 6 months or more. AI licensing demand remains robust from both existing and prospective customers.

The academic market remains steady at this point after 2 consecutive years of enrollment growth. We're watching full college enrollments but haven't seen any early signals of enrollment challenges. On the Professional Publishing side, we have encountered some market headwinds around consumer spending in the retail channel, which we're watching. That said, we're also delivering above-market growth in publishing output and title signings. We're monitoring corporate spending trends around assessments but moving ahead on pricing and new product launches. And finally, our previously executed cost savings will begin to ramp up in Q2.

Let me step back and review our current AI licensing models, which will continue to evolve as the AI market develops and matures. We think about the market opportunity in three buckets. The first is in training large language models using our own archival content to ensure accuracy and impact. The training market is evolving from a few large pre training engagements to a wider array of smaller, more fine-tuning projects where developers require more specialized content. We continue to meet this demand.

The second model is the Wiley Nexus, where we are combining our content with that of our publisher and society partners and research solutions. Here we help others navigate the complicated AI world by leveraging our relationships and expertise on their behalf. In our first deal this quarter, we generated $16 million of Nexus licensing revenue. Craig will discuss in detail, but margins are a bit lower here than in other AI agreements due to differing royalty rates.

It's a win-win-win. We are able to maintain our leadership position with our corporate customers, expand our publisher partnerships who can benefit from our know-how and generate new profitable revenue streams in the process. It's also another validation of our distinct competitive advantages. And that is our ability to partner across academic and corporate environments and connect them together. You're now seeing the benefit of this in AI. Both institutions and corporations need a trusted partner like Wiley.

The third area, AI subscription models, involves licensing and embedding our content into vertical-specific applications that ground models in authoritative content at the time of inference. The most common technique here is retrieval augmented generation, or RAG. AI demand is shifting from article retrieval to structured reasoning, and that means the future of AI is task based, not document based. With this shift, R&D-intensive corporations are increasingly using AI-powered content and tools to speed up product development, identify breakthroughs and reduce turnaround times.

Our high-value content therefore is critical. We can provide subscription access to a knowledge speed of Wiley content and data catalogs where accuracy, efficacy and recency can all be insured. We're already piloting an array of inference use cases in multiple industry verticals from pharmaceuticals to technology with early-stage recurring revenue totaling $1 million in fiscal '25. Given the number of companies deploying AI applications and the depth and breadth of our content portfolio, the potential opportunity is significant.

As I said at the start, we've moved decisively in a nascent market and executed the following: large rights projects for training with 3 of the world's largest tech companies, strategic development partnerships with 3 of the world's leading AI innovators including Amazon Web Services, Perplexity and Anthropic, the goal is to advance the researcher and learner experience and we're just getting started; inference pilots with 3 of the world's leading pharma companies to revolutionize drug discovery as well as with a multinational chemical company for pattern recognition and in support of the European Space Agency for Earth Observation.

This market will take time to develop but it is what excites us most.

The corporate market is now a key strategic focus area for us, making up 80% of total U.S. R&D spend but only 10% of our revenue base. Over time, we expect this share to materially expand as we continue to build subscription-based and transactional AI businesses, bring our science analytics capabilities deeper into organizations and expand on our knowledge services capabilities.

One final affirmation. We believe it is our unique responsibility to engage with AI developers and R&D-centric corporations to ensure scientific integrity and information accuracy, to deliver optimal outcomes across research and learning and power the latest models with only trusted authoritative content like Wiley's. One can think of it as the Wiley seal of approval.

Now let's talk about AI innovation across our platform and product portfolio. Let's start with transforming Publishing. As a reminder, we're rolling out leading-edge research publishing platform in stages. More than half of our journals are now live. As you can see here, we are thinking about AI and its implications for what we do across the entire research value chain and actively incorporating it into our platform from the first touch point with the author to an increasingly expanding set of touch points with the end user consumer of the research.

Our AI-powered workflows make submission fast and intuitive for researchers through a single, consistent interface that streamlines processes and reduces administrative burden. A more efficient system will allow us to attract and retain more authors.

Scientific integrity remains the industry-wide topic. We now have the latest AI-powered screening tools in place fully integrated into the publishing workflow. These tools conduct 25 comprehensive checks at the initial screening, completing the process in under 10 minutes. Any potential concerns are automatically flagged for further review. This screening stage helps editors by filtering out papers with major scope or integrity issues. Already, we've seen a 70% reduction in published papers citing problematic sources. We consider this another differentiator.

We're also revolutionizing reviewer suggestions through sophisticated relationship mapping to find connections between authors, papers and topics, dramatically improving recommendations for quality and relevance. Not only can this platform deliver new content offerings, but we can use AI to match articles to journals, giving a better experience to authors, reviewers and editors alike. It also provides an added benefit of keeping more submitted articles in-house that may have fallen out because of improper fit. In fiscal '25, we saw a 30% improvement in automated transfer referral conversion.

We have AI initiatives going on across our product portfolio. In our Academic business line, we've recently introduced 4 new AI tools for our STEM digital courseware product around tutoring, authoring, assessment and student behavior insights. In Professional, we continue to build out our AI-powered book author portal to improve launch efficiency and design. And of course, we're working with AWS to dramatically improve scientific search and Perplexity to transform how learners interact with educational content.

Let me also touch quickly on colleague productivity. Nearly 85% of our employees are actively using the latest AI tools in their daily work, and internal surveys show that AI sentiment in productivity run high across our organization.

I'll now turn the call over to Craig, who will take you through our Q1 results, our financial position and capital allocation and our full year outlook.

Thank you, Matt. Good morning, everyone. I'm honored to join Wiley at this pivotal moment in our transformation and excited to share our Q1 results with you.

Nine weeks in, three things stand out to me about Wiley. First, our mission matters, advancing science and learning globally. There's a real sense of pride and purpose here that moves us. Second, our momentum is real. Two years of value creation through business simplification and improved cost structure are having an impact. And third, our moment is now. We're at the forefront of defining AI's role in science and learning. We have some early seeds in the ground, and this is just the beginning. Looking ahead, I'm focused on disciplined prioritization to drive organic growth while consistently expanding margins and cash flow. Our best days are ahead of us.

Let's turn to Q1 results. Adjusted revenue grew 1% and adjusted EPS rose 2%, while adjusted EBITDA was down 3%. As Matt noted, the first quarter is our smallest from a seasonal perspective. Let me walk through the three key drivers of our EBITDA performance this quarter.

First, strategic margin mix. Our landmark $20 million AI project included $16 million of Nexus partner content. This generated strong incremental revenue at 45% EBITDA margins versus the approximately 75% we've been seeing on deals with our own content due to differences in partner royalties. This opportunity validates our strategy of leveraging our AI relationships to create opportunities for publisher partners while expanding our addressable market. It's important to note that Nexus is not a replacement for licensing our own content, but additive.

Second, timing impacts we expected. We lapped a $5 million journal renewal benefit from Q1 last year, and we had a temporary lift in corporate expenses from an investment in strategic consulting projects that offset restructuring savings this quarter.

Third, there was some softness in professional publishing, as Matt discussed. However, as Matt noted in his remarks, we have good confidence in quarter 2 and the rest of the year driven by our publishing volume, journal renewals, Open Access growth, expanding AI relationships and cost management. All these factors reinforce why we're confident in affirming our full year guidance, which I'll detail shortly.

Turning to segment performance. Research delivered solid 5% growth driven by AI demand, $16 million compared to $1 million in the prior year period and strong underlying fundamentals. Let me break this down by business line. Research Publishing declined 1% as expected. We lapped a $5 million journal renewal benefit from last year, but this was largely offset by double-digit gold open access growth. Our Publishing pipeline remains robust and globally diversified with 45% of output from APAC, 30% from EMEA, 20% from North America and 5% from the rest of world. July was a record month for Open Access submissions.

Research Solutions grew 44%, driven by the Nexus AI project. The segment's adjusted EBITDA margin of 28.3% compared to 29.3% in the prior year period, reflecting both the AI mix impact and some timing of costs. We expect Research margins to improve on a full year basis as these mix and timing impacts normalize. Looking ahead, our calendar year 2026 journal renewal season runs from November through April. We remain confident in the accelerating volume of new research and the must-have nature of our portfolio.

Learning revenue declined 8% this quarter due to lower AI revenue and market-related softness in professional publishing. On AI, Learning delivered $13 million of revenue in Q1 versus $16 million in the prior year. The $13 million includes $9 million of carryover from the agreement we announced in Q4 plus a $4 million expansion from a repeat LLM customer. This repeat customer demonstrates the stickiness and growth potential in our AI relationships.

We continue to deliver robust growth in new title signings of 27% and title output of 9% across our Professional portfolio, which are expected to contribute to our financial performance in fiscal '26 and beyond. Also of note for the quarter, we signed a key publishing partnership with the International Society of Automation, launched multiple AI tools for our STEM digital courseware product and launched our Work Smart tool in assessments, which combines personality models with training sessions on employee engagement and team development. The segment delivered EBITDA margin expansion of 20 basis points to 27.4%, demonstrating our operational discipline even in a soft revenue environment.

Let me touch on corporate expenses, which represent shared services not allocated to segments. We saw a temporary $4 million increase this quarter from strategic consulting projects and other onetime items. These projects are now complete and were a deliberate investment in capabilities that position us for a stronger execution going forward. We also had some corporate spending related to our enterprise modernization initiatives. Looking ahead, we expect corporate expenses to decline starting in Q2 as cost savings ramp up, and we expect to finish down for the year.

Now let me turn to our strong financial position and capital returns. Cash flow performed as expected. Free cash flow was a use of $100 million, an improvement from a use of $107 million last year. As a reminder, Q1 and Q2 are seasonally negative due to journal subscription timing with annual journal subscription receipts concentrated in Q3 and Q4.

CapEx was $15 million, down $3 million from last year. If you recall, our cloud-based enterprise modernization spend is capitalized and amortized like CapEx, but, unlike CapEx, is reported in the operating cash flow section. When combined, capitalized cloud-based spend and CapEx totaled $20 million for the quarter, up from $18 million prior year.

Capital allocation remained disciplined this quarter. Share repurchases increased to $14 million. We acquired 332,000 shares at an average price of $42.22. The Board approved a new $250 million repurchase authorization, up 25% from our previous program. We also implemented a 10b5-1 plan for our blackout periods. Combined with our 32nd consecutive dividend increase, which gives us a current yield of around 3.5%, we're returning capital while investing in growth.

Balance sheet strength continues to improve. Our net debt-to-EBITDA ratio improved to 1.9 at the end of July compared to 2.0 in the prior year period Liquidity remains strong with $551 million in cash and undrawn capacity, including $82 million of cash on hand and $469 million of undrawn debt facilities. Finally, we received the roughly $120 million of cash proceeds for the University Services divestiture this quarter, which we used to reduce our debt. Due to timing, this only had a modest impact on our cash interest payments for the quarter, but we'll see run rate cash interest savings of approximately $6 million from this move.

Given all this, we are confidently reaffirming our full year outlook based on the accelerating demand trends and cost actions implemented. Let me walk through our key guidance metrics: revenue growth in the low to mid-single digits; adjusted EBITDA margin of 25.5% to 26.5%, up from 24% last year driven by expected business performance and executed cost savings; adjusted EPS of $3.90 to $4.35, up from $3.64 last year; free cash flow of approximately $200 million driven by EBITDA growth, lower restructuring payments and favorable working capital. CapEx is expected to be comparable to last year's total of $77 million.

On AI specifically, we realized $29 million this quarter compared to $40 million for all of last year. While this revenue has quarterly variability, the underlying demand remains robust. And in the future, we expect to see growing demand for subscription inference opportunities, a market which is still forming.

This guidance reflects our confidence in our fundamentals which are strong journal renewals, accelerating Open Access growth, expanding AI partnerships and our disciplined cost management delivering margin expansion. We will continue working hard to consistently meet and beat expectations and earn your trust and confidence.

With that, I'll pass the call back to Matt.

Thank you, Craig. Let me quickly recap our key takeaways and then open the floor to your questions. Q1 was noisy but in line with our overall expectations. We have strong confidence in Q2 and the rest of the year. AI is a transformative opportunity and we're moving decisively to capitalize. We're now a recognized leader executing our own projects with multinational tech companies, but also on behalf of our publishing partners. We are strategically partnering with the world's foremost AI innovators to augment the researcher and learner experience. We are learning from them and them from us.

As I've said many times before, continuous improvement is a way of life for us now. We continue to drive operational excellence through publishing transformation, AI innovation, investment discipline and cost reduction. Finally, we are returning more capital to shareholders in the form of increased dividends and share repurchases. Our goal, of course, is to drive continuous value creation in the years to come.

One final word. You may have seen news on an industry class action settlement involving pirated content and a key AI developer. We can't say much about it at this stage, but we consider it to be a pivotal win for the protection of intellectual property and copyright in a responsible AI world. It's a victory for innovation and the incentive to create and, therefore, a victory for the public at large.

I want to thank all of you for joining us. As Craig noted, we will continue to work tirelessly to reward your trust and confidence. As always, I want to thank our 5,000 global colleagues for their pivotal work in making us a leader in both our core markets and in the burgeoning AI economy.

I'll open the floor to questions.

[Operator Instructions] And our first question comes from Daniel Moore from CJS Securities.

Clearly a lot to unpack, Matt. Let me start with Anthropic. Can you just provide a little bit more color regarding the nature in terms of the agreement? Is it primarily providing your content into Claude? Or is it more of a collaboration to bring kind of research-related tools as well as content to market?

Jay, do you want to comment on that?

Yes, happy to. Dan, yes, we're excited about the partnership with Anthropic and Claude. One of the things that's really important to us is to make sure that high-quality content gets included in the research tools and learning tools that are being used by students. And so we're focusing on an announcement in a couple of weeks that will talk about Claude institutional access and the ways that we're integrating our content with Anthropic's tool set into the student and researcher workflow, primarily in the academic market.

Think about it this way. If you have a connector inside of one of your desktop AI tools, you want to be able to point that connector at high-quality information or high-quality services. You might want to connect it to your Gmail, you might want to connect it to Stripe for payments, things like that. And so what we're doing with Anthropic is allowing end users of the cloud tool to connect right into a Wiley-vectorized database of high-quality information to support AI safety, the use of top-quality research material and to support the student learning journey and the researchers.

So it's a very cool first integration with a major tool provider, and we're excited about it.

Anything you can describe from a revenue model perspective?

We're looking at it as primarily a way to underpin the value of our institutional library subscriptions and as a potential upsell vector.

Okay. That's helpful. Does the agreement change the way you plan to invest or pursue AI-related opportunities for growth at all? And do you expect development spending to increase, level off, taper off over the next year or two? Two discrete questions there.

Well, I'll refer to Craig and Matt on the capital allocation question, but let me just give you a moment on the vision for the space here. So imagine that the demand for top-quality content inside the AI workflow is very strong, and we're seeing that not only in any academic sector but certainly in the corporate R&D markets, as Matt mentioned in the prepared remarks. So our view on this particular program is that it represents the first step of tighter content integration between what Wiley is doing from a content aggregation perspective with our Nexus platform or the provision of our own content, our own IP, and that of our society partners into these tools.

So I think the way I would characterize your question or maybe build on it is to say that we view the future of AI services as not just being model training, but also inference subscription in the corporate R&D market and integration with end-user tools. And so this represents the first of those projects. We have many more in the pipeline. They are comparatively inexpensive to implement. But as we've indicated, we believe that to be an AI forward company and a leader in our segment, we want to be first to market with these things and we want to continue to push the momentum.

Yes, Dan, let me give you a perspective. That's right, what Jay said. And let me build on and give you a perspective of how I think about it. This market is still rapidly evolving. And you saw me in my prepared remarks talk about a number of different opportunities. But the operating theory is that we believe, in the future, our content is going to be accessed by various AI tools perhaps as frequently as it's accessed by individuals. And so our goal here is to build those connections into those various tools as the market evolves.

This is still early days in the formation of this market. And what we're trying to do is play and take advantage of multiple opportunities to learn and make our content as accessible as that can be to these various AI tools. I don't see a lot of internal capital expenditure in this area. But as we look at modernizing our technology stack, which we've talked about in the past as part of our cost reduction work, we are building it in a way that is very accessible. And there's various industry standards we could go into separately that we are complying with to basically make our content easily accessible by these models.

As opposed to I've seen some other companies and other industries kind of building their own AI tools, we're kind of tool agnostic. We want to play with all of the tools because we don't know who the winners are going to be.

No, that's definitely helpful. Switching gears of the -- I think you said $16 million revenue related to Nexus this quarter. Just help me understand how much of that is Wiley's content versus outside content, if I'm phrasing the question correctly. I'm just trying to understand the nature of the agreements and the margin differential for AI deals when it's your content versus partnering with others.

Yes. Let me, first of all, I want to reinforce the value of that deal strategically because you know we have our Publishing Solutions business, where we serve an array of other publishers, mostly smaller. And what we've been able to demonstrate here is our ability to leveraging our experience in AI, leveraging our technology, legal expertise and the like is include their content into our AI licensing strategy, which makes the overall package much more attractive to AI developers because it includes a larger percentage of the content. So it is a foundational move.

I'll let Craig -- I'll give Craig a little airtime as the new guy to talk a little bit about the underlying -- answer your question a little more directly. Yes.

Yes. Thanks, Matt. And thanks, Dan, for the question. We're very excited about this deal. The $16 million that you referenced is the Nexus or partner-driven content within the total deal that we secured there. And the total deal size was in the order of $20 million, which reflects a blend of both Wiley content and Nexus content. And that was a portion of the total AI revenue we did for the quarter, which was in aggregate $29 million.

What's exciting about this deal is, as Matt said, is that it brings in the partner content in a very robust way which we view as additive, not a substitution for Wiley content, but really a build on what we have been doing previously. So we're excited about how this opens up kind of a market adjacency for us as we'll continue to pursue the original type of Wiley content driven training deals as well as these new types of Nexus and, in this case, how you see they can blend together. So thanks for the question, a very exciting quarter for us in that respect.

Okay. That's helpful. Journal subscriptions, Matt, I think you said they were strong. Where are we for renewals in calendar '25 at this stage?

Jay, do you want to take that on?

Yes, sure. So it's early days. Obviously, the renewal season for us is sort of coincident with back to school. And as the librarians come back on campus, we're beginning those negotiations. The outlook is fine. We've reaffirmed guidance and feel confident in the full year outlook. So we'll get into more detail sort of November, January time frame as we get more data on the renewals, but we haven't seen anything so far this year to give us concern for calendar '26.

Yes. And Dan, we had a good strong redoing season at the end of our fiscal '25, that's when it concludes for us. So we're going into the year with a head of steam there.

Okay. Sticking with Research. Publishing revenue, and you talked about this, but declined 1% in the quarter. I know you had a little bit of a tough comp. But article submissions have been up double digits for multiple quarters and publication volume was up double digits, I think, this quarter. So just help me just understand the decline in revenue and when do we expect all those submissions to translate into a meaningful uptick.

Yes. And I'll begin and then ask Jay to comment. But the first quarter is always a slow quarter for us, and it's really not indicative of how the year is going to turn out. We are looking at a year in which we're seeing our research growth really in line with the market, which is kind of in the 3% to 4% range. So we're confident in that. And that underlies the reaffirmation of our guidance. But Jay, maybe you can talk a little bit about the seasonality of our business maybe compared to comparatives?

It's primarily the comp in Q1. Q1 is the smallest quarter for the business. And just to reiterate, I'm not seeing anything there that takes us off course from where we see the market performing and where we're guiding to. Submission is up 25% year-on-year and output growth, 13%. Your question is fair.

But I just want to reiterate that the two things that we always come back to in here are the majority of our output is captured inside the recurring revenue models, what we call the transitional agreements or our standard library subscription agreements. And that underpins the value of that core engine of Wiley's financial stability. And that recurring revenue is undergirded by strong continued publishing growth.

And then the second piece, we did see double-digit gold open access revenue growth again for the quarter, and we're continuing to be very confident about that in July. We had a record month for Open Access submissions, and our advanced science revenues are up 50% year-on-year, as Matt said in his remarks. So I think all of this just goes to continued confidence in the performance of that sector for us.

Yes. There is -- I mean, the problem with this quarter is the comparables confuse the reality. There was a late billing last year that actually was collected in the first quarter which, when you back out of this, we actually are growing. So it makes -- again, because it's a small quarter, it can be easily distorted by onetime events.

That's helpful. I think in the prepared remarks, you mentioned $5 million. Is that the -- or magnitude?

That's right. So when we normalize that in terms of our internal work, we are seeing growth. But the key is it is a seasonal business because of the structure of these transformative agreements, they're all different. They all have different billing schemes. So again, you can't project what the year is going to look like just from the first quarter alone. But we're confident that we'll grow as we projected and achieved our numbers for the year.

Yes. That's helpful. Switching to Learning, and I appreciate you taking all the questions. Beyond the tough AI comp, just maybe talk about what we saw in terms of declines in Professional Publishing and how long that's likely to persist and your confidence in the rest of the year?

Yes. I mean we got our eye on Professional. And it's been a slow summer, it seems to be, for the industry. I don't know if this is a leading indicator of some economic issues. But based on -- because our title output is strong, but our ordering patterns are not what they should be in the quarter. So I wouldn't call it a red alert yet. But we got our eyes on it because it may be an indicator of a broader economic slowdown hitting consumers.

That's about the only business we have that's directly exposed to kind of consumer economics, if you think about it. So we're watching it closely. But it's not just us. It seems to be just slower ordering patterns. The rest of the business is in Professional, and I'll let Jay -- and Learning are holding up pretty well. It's early for obviously the courseware business because that season really is happening now as people go back to school. But Jay, any color you want to add for Dan?

On Professional, no, I think you covered it. The retail channels did not meet our expectations in the quarter. And I think that's a thing we're going to keep an eye on, as Matt said. For the rest of the business, in assessments, we saw nice strong growth underpinned by product innovation, as Matt described. We're really excited about Work Smart and really excited about the way that business has come out of the gate in the first quarter.

Enrollments seem to be holding steady, and we'll have a lot more to say about that as we get through back-to-school season in our Learning business. And the AI potential in the advanced content book list is really strong. And that -- when you talk about licensing revenue in both the inference models and in the training models, we feel really good about that high-quality list of STEM books as being a major source of value for both institutional library customers and corporate R&D customers. So feeling good on those three fronts, for sure.

Okay. And on the onetime cost, $4 million, is that in terms of corporate debt sort of nonrecurring as we look into the balance of the year? Did I hear that right?

Yes. Craig?

Yes, Dan, you heard that right. We did see in the quarter kind of a short-term onetime lift in corporate expenses. It was really the completion of several strategic consulting projects that we've been investing in to better position the company for execution and growth going forward. These are now completed. So we don't expect those kind of impacts hitting us going forward. We do expect to start to see more of the savings that have been driven from the back part of last year and beginning part of this year's action starting to flow through as we move forward into the second quarter and throughout the rest of the year as well.

Great. One or two more. The higher Nexus related revenue, does that have any meaningful impact on your kind of fiscal '26 margin outlook? Or is it relatively de minimis given the size of the overall revenue and cash flow?

Dan, it's Craig. I would say probably de minimis impact. We've talked about the size, we've talked about the margin. This was an additive element into our program, but we're still focused on the profitability of the core business and the ongoing margin expansion. And all of that remains on track as we were expecting and planning. So I would think of this as additive in terms of revenue and gross profit but very de minimis in terms of the margin impact.

Okay. And lastly, as we speak, I think the stock is down 6%, 7%, 8%, trading at a little over 6x EBITDA and less than 10x free cash. So obviously, you've been buying back stock, and the Board raised the authorization. Just maybe talk about your relative priorities for capital allocation, how aggressive you might be with the buyback.

Thanks, Dan. Yes, speaking to capital allocation, I think what you'll continue to see from Wiley is just a very disciplined approach to how we think about our capital allocation and return of value to shareholders. We have an ongoing commitment to our dividends, which we've talked about. And we continue to maintain a very high dividend yield as a form of evidencing that.

We've also been active in our share buybacks, increasing our share buybacks in the quarter modestly in terms of year-over-year but with a deliberate intention to be active when the prices are attractive. And we have to say we're very happy with the opportunity right now for us to be able to continue that program. And on that note, received a vote of support from the Board in terms of the share authorization program, which was an increase in terms of the prior share authorization program we had as well.

So our priorities are really to continue to support shareholder returns through the dividend program, through the buybacks, continue to pay down debt when and where it makes sense to improve the strength of the balance sheet and, obviously, to continue to look for high-value opportunities to drive organic development of Research and Learning solutions, especially when around authoritative content and data-driven insights. So we're balanced in the way that we approach that and we're opportunistic, looking for the highest returns that we can on that use of the capital that we have available to us.

We have no further questions in queue. I'd like to turn the call back over to Mr. Matt Kissner for any closing remarks.

Well, thank you for joining us. We look forward to sharing more on our Q2 earnings call in December. We'll see you then. Have a good fall.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Good morning, and welcome to Wiley's Fourth Quarter and Fiscal 2025 Earnings Call. As a reminder, this conference is being recorded. [Operator Instructions] At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.

Thank you all for joining us. On the call with me are Matt Kissner, Wiley's President and CEO; Christopher Caridi, Interim CFO; and James Flynn, Executive Vice President and General Manager of Research and Learning.

Note that our comments and responses reflect management's 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 U.S. 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.

Unless otherwise noted, we will refer to non-GAAP metrics on the call and variances are on a year-over-year basis and 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 on our Investor Relations website at investors.wiley.com. I'll now turn the call over to Matt Kissner.

Thank you, Brian, and good morning, everyone. Welcome to our fourth quarter and full year earnings review. 18 months ago, we set out on a multiyear journey to become a stronger and more profitable Wiley to move decisively on our cost structure and unlock growth in our core businesses. Today, I'm pleased to report another year of meaningful progress.

We've met or exceeded our financial commitments, drove growth in our core while delivering material margin expansion and capitalized on emerging market opportunities in the corporate sector through AI licensing, data analytics and knowledge services.

It's really quite a story, one of America's great legacy companies now standing at the forefront of scientific advancement and responsible AI development. Wiley began in 1807 as a print shop in Lower Manhattan. Today, we're a global company supporting the development of the European Space Agency's AI model for Earth observation.

We're partnering with the American Cancer Society to disseminate cancer breakthroughs, multinational pharma companies to revolutionize drug discovery and the world's largest tech companies to help train and develop AI models and interfaces. All to say, we have commenced another exciting chapter in our 218-year history.

What makes Wiley compelling over the long term? Market demand has remained consistent over time as it correlates with ever-increasing global R&D spend. At the same time, publishing remains essential for career enablement and acclaim. Wiley is recognized as a wide moat business with a leading market position and must-have content and brands.

We deliver resilient compounding growth in global markets that have remained stable through economic downturns. Around half of our revenue is recurring and over 80% is from digital products and services. We are an AI beneficiary with content that is well suited for both training and inference. This gives us an expanding avenue into the massive corporate market. And finally, our financial characteristics remain strong with healthy margins and cash generation, low leverage and ample liquidity.

Let's recap the main headlines for fiscal '25. We delivered revenue growth and margin improvement in both segments. We drove steady growth in our recurring revenue models and strong growth in Open Access driven by the global demand to publish. We secured a third major customer for LLM model training and see demand accelerating for vertical-specific subscription models.

We delivered total AI licensing revenue of $40 million this year. We drove a 300 basis point improvement in our adjusted operating margin and a 120 basis point improvement in our adjusted EBITDA margin. Margin expansion remains a multiyear strategic focus for us. Free cash flow was up 10% to $126 million, and we've reaffirmed our $200 million target for fiscal '26.

In addition to allocating capital to high-return growth opportunities, we increased share repurchases by 34% to $60 million and are currently paying a 3.5% dividend. Finally, after the year closed, we secured cash proceeds of $120 million related to our University Services divestiture, which will be used to further reduce debt and interest expense.

Chris will walk through our numbers in more detail, but I want to quickly showcase our performance this year. We delivered meaningful growth across all key metrics, and we expect to do the same in fiscal '26. It's a simple refrain, do what you say. As with last year, we made several commitments for you to hold us to. The first was to meet our stated financial goals, and we did that. For the second year in a row, we exceeded our EPS guidance range. We finished at the top end for EBITDA margin, achieved our revenue and cash flow and reaffirmed or lifted our fiscal '26 targets, which we first set down in January of 2024.

The second goal was to expand our margins and cash flow. As noted, the team continues to execute and deliver on this overarching objective. Third was to drive recovery and growth in research, and we accomplished that across all key areas, including publishing, licensing and solutions. For example, we achieved a 19% submissions growth rate and 8% output growth in fiscal '25. Research also delivered margin growth this year.

Finally, we made a commitment to move decisively on AI opportunities. It's been a remarkable year of progress in this area as the market continues to rapidly evolve. A year ago, we were trying to understand the opportunity. Today, we count some of the largest companies in the world as AI customers and are partnering on an array of use cases and applications.

Let me briefly recap the year in Research. Our recurring revenue model saw solid growth driven by increased output and the enduring strength of our brands. Remember that much of our volume growth goes to supporting and increasing the value of our multiyear agreements.

We had a very good renewal season across all regions, which gives us visibility through calendar year '25. As a reminder, around 2/3 of research revenue is recurring. Open Access continues to see double-digit growth. Our Advanced Journal franchise continues to be especially noteworthy. We made a concerted effort to invest in its expansion and it's paying off, particularly for our multidisciplined Open Access-only journal, Advanced Science. Its growth has been spectacular, driven by a rising impact factor and broad and expanding readership.

We continue to see strong demand to publish across key markets. As a reminder, Wiley Research is geographically very well distributed and powered by many different funding sources. Submissions were up in both emerging and well-established markets with strong double-digit growth in India and China, double-digit growth in the U.K., France, Italy, Brazil and Canada and high single-digit growth in Japan and the U.S.

High-growth markets continue to show strong momentum. This year, we executed landmark multiyear agreements in India and Brazil that expand access to thousands of institutions and millions of researchers. Both of these countrywide agreements serve strategic purposes that go beyond near-term financial benefits. They stand to increase the global supply of quality research.

China continues to be a very strong growth market for us and the #1 source of published research worldwide. Investment in R&D, innovation and publishing is a way for countries to compete and rise in the global economy, and these national governments continue to ramp up their efforts.

As noted, we're excited by all the work we're doing in the corporate R&D and AI space. I'll talk more about this in a bit. And finally, Wiley has become a thought leader in everything from responsible AI development and research integrity to accessibility in underserved regions.

On the topic of responsible AI, we recently released new author guidelines on how to utilize AI tools in manuscript development while preserving authentic voice and safeguarding intellectual property. Wiley also announced the release of explanations, a landmark study of 5,000 researchers that explores AI use and applications across the research process.

We've become a primary voice on research integrity and now sponsor a PhD position at Leiden University to study research fraud and produce insights for the research community. On accessibility, we launched a pilot program that supports authors across 33 countries in Latin America to publish research in Wiley's Gold Open Access portfolio.

Discounts are applied in direct relationship to the purchasing power of each participating country. It's all designed to cultivate the research community in underserved areas and bring new cutting-edge research into the global community.

Let's shift to learning, where we delivered another year of revenue and margin growth. AI licensing generated $29 million in learning revenue compared to $23 million in the prior year, driven by demand for academic and professional backlisted content.

Our inclusive access model where the cost of digital course content is added to the students' tuition and fees and our STEM courseware product remain growth engines. In professional and reference, book title signings were up 16% in areas like business, leadership and nursing, which will drive financial benefit in fiscal '26 and beyond.

We renewed our prestigious book publishing partnership with the IEEE, the world's largest technical society. Finally, assessments benefited from strong pricing power in a soft market environment. The team has recently launched our Worksmart tool that combines personality models with training sessions on employee engagement and team development.

Both research and learning demonstrated organic growth and margin improvement even as we continue to invest in high-return initiatives. Chris will walk through our financial performance in more detail. We are proud of our multiyear journey, and we're working toward accelerating our progress.

I stepped into the role in October of 2023, and I found an exceptionally talented and connected group of colleagues that were eager to put the past behind them. Collectively, we set out to simplify our goals and weld them to financial outcomes. Our aim was to act decisively, get leaner and strategically reallocate resources to where we have a unique right to win. 1.5 years later, our work is paying off, both in our financial performance and our employee engagement scores.

We met or exceeded guidance in both fiscal '24 and '25. We raised our fiscal '26 adjusted EBITDA margin target range by 150 basis points and reaffirmed our free cash flow target of $200 million, up from $114 million in fiscal 2024. We've since recorded over $60 million in AI licensing revenue and executed multiple vertical-specific projects with corporate partners.

We completed all divestitures and recently secured cash proceeds for University Services. We drove significant cost savings with additional opportunities identified. In fact, we returned a combined $259 million in dividends and share repurchases in fiscal '24 and '25.

And finally, we saw a marked elevation in employee engagement and satisfaction scores. Hats off to the people that continue to make it all happen, our global colleagues, we are not slowing down. One of the more interesting developments over the past year is the acceleration of the corporate opportunity. Corporate makes up about 10% of our revenue base, notably journal subscriptions, databases and services.

Over time, we expect this to materially expand as we extend further into the corporate R&D value chain. The big trend, of course, is AI. AI revenue totaled about $40 million for the year. During the quarter, we executed an $18 million licensing agreement with a new multinational tech customer for our learning content with $9 million realized in this most recent quarter and $9 million expected in Q1. That said, the training market is rapidly evolving from a few substantial pretraining engagements to a broader array of smaller fine-tuning projects where AI developers require more specialized content.

We also saw a second half acceleration in the broader vertical-specific market. R&D-intensive corporations are increasingly using AI-powered content and tools to speed up product development, identify breakthroughs and reduce cycle times. This is where Wiley comes in. Our expansive content and data catalogs can be embedded into vertical-specific AI models and applications in technology, health care, information services, industrials and others to improve efficacy and impact.

In addition, we are partnering with AI developers to advance the researcher and learner experience. In the past few months, we've executed partnerships with Amazon Web Services on scientific research, Perplexity on AI answer engines and learning, multiple pharmaceutical companies for drug discovery, a multinational chemical company for pattern recognition and in support of the space agency's AI tool for earth observation.

Revenue for vertical-specific applications totaled $1 million in this first year, all of it recurring, but it's early days and some of these are more like pilots. Long term, you can start to imagine the number of potential use cases and customers around the world.

Organizations leveraging AI to conduct high-value R&D need to ground their solutions in the high-quality trusted knowledge that Wiley provides. As a first mover, we continue to learn from these partners and them from us. In the case of Perplexity, Wiley is collaborating with this innovator on the latest AI development and gaining valuable insights on how learners interact with our content in this form while enabling us to test new business models.

In addition to AI, we are bringing our capabilities deeper into organizations with science analytics. Of particular note is our Spectral Data program, which continues to grow by double digits. Wiley has one of the most comprehensive spectral database collections in the world, allowing chemists and other researchers to identify molecular compounds to reach better conclusions faster.

Wiley also continues to provide knowledge hubs, advertising and recruiting services for R&D-centric companies, particularly in health care. Corporate is a burgeoning market for us, and we're going to capitalize. Of course, we need to acknowledge the uncertainty out there, be it policy swings, tariffs and uncertain economic climate and other unknowns. But from what we know today, we remain confident in our continued resilience and growth.

To refresh, our content is must-have for institutions. Researchers must be published for career advancement and publishing remains essential to assess research outcomes. Research is truly a global ecosystem, enjoying strong geographic and funding diversity. It is not dependent on any one market. While there may be some noise in the U.S., other key markets are investing heavily in R&D, innovation and publishing output.

We have a large recurring revenue base, as noted. We've talked about the ongoing demand to publish and our strong pipeline of submissions. Our content and data are in demand for AI development. The academic side of our business is steady and countercyclical over time.

Professional title signings were up over the past 2 years, and we continue to aggressively tackle our cost structure while keeping a tight lid on our expenses. Perhaps most importantly, being relevant for 218 years demonstrates that Wiley plays the long game. That's what we're doing right now. We will not be distracted from delivering on our strategic objectives. I'll now pass the call to Chris.

Thank you, Matt, and good morning, everyone. I want to commend all my Wiley colleagues for our performance and profitability improvements over the past 18 months. As Matt noted, we still have work to do, but the team has made important material strides.

As always, we are passionate about meeting our commitments and earning your trust to shareholders. Margin expansion has been a focal point for us. We took certain actions across the company in Q4, which led to a restructuring charge of $12 million.

Our current efficiency programs are focused on our corporate line, notably technology. We continue to make good headway there and are ramping up our efforts in fiscal '26 even as we deliver improvements to our enterprise systems and roll out our new research publishing platform.

We are targeting a substantial reduction in our technology costs over time by streamlining the tech organization with a focus on our location footprint in partnerships with external providers, rationalizing our application landscape and capitalizing on emerging AI-driven software development tools.

We are confident that our technology transformation program will lead to improved delivery and innovation at lower cost. We are also focused on other corporate services, including operations, finance, human resources and legal. We continue to evaluate the efficiency of our corporate processes and look for ways to drive further improvements.

Our corporate expenses were down 10% in Q4 and 4% in fiscal year '25, although as expected, the unallocated portion rose modestly this year, mainly due to enterprise modernization. We expect corporate expenses to come down in fiscal '26. While we're rationalizing certain areas of spend, we continue to invest in our journal portfolio expansion, research publishing platform and AI opportunities.

We're also evaluating product profitability across our portfolio and we'll take action as necessary. Our multistage research platform launch continues with over 1,400 journals now in our new submission system and over 700 on our peer review system. Our work will continue in earnest through the calendar year, but will be an ongoing initiative as we add new functionality and features.

As discussed, the platform will improve publishing cycle times, expand capacity and reduce our cost per article. Finally, we are implementing prudent expense measures near term as we navigate this period of uncertainty. Given all this work, we expect to deliver significant adjusted EBITDA margin improvement over time in addition to the progress we've made to date.

Let me touch on our Q4 results. Adjusted revenue was essentially flat with research growth and AI licensing, offset by a $23 million rights project in the prior year. As noted, the most current AI licensing agreement in Learning is valued at $18 million, with $9 million recognized this quarter and $9 million next quarter.

If you back out AI revenue from both years, learning would be up 4%. We continue to drive improvements in adjusted operating income, up 15% and EPS up 14%. Adjusted EBITDA was flat due to revenue performance, although our margin rose slightly to 28.4%.

For the full year, adjusted revenue was up 3%, driven by research and academic growth and AI licensing, offsetting some pressure in professional due to retail channel softness. Adjusted operating income, adjusted EPS and adjusted EBITDA were up 29%, 31% and 8%.

As noted, we delivered a 24% adjusted EBITDA margin for the year. Turning to our Research segment. Fourth quarter and full year revenue increased 3% from growth in both our recurring revenue models and open access programs and new AI licensing revenue. We saw some softness in ancillary and print products, including back files and digital archives. These are more discretionary in nature.

As of April, we've completed 99% of our calendar year '25 journal renewals and are seeing good growth overall. We will commence our calendar year '26 renewal discussions in the late fall time frame. Importantly, our publishing pipeline remains robust and well dispersed with 45% of global output from APAC, 30% EMEA, 20% North America and 5% from the rest of the world.

Research Solutions returned to growth this year, up 2%, driven by databases and content solutions for corporations, offset by softness in recruitment. Adjusted EBITDA for Research increased 4% for the quarter and 5% for the year, reflecting revenue growth and cost savings, partially offset by investments in growth and productivity initiatives. Our full year margin improved by 30 basis points to 32.1%.

In summary, for Research, we are pleased with our fiscal '25 performance, operating improvements and investments. On to our Learning segment. Q4 revenue declined 5% due to the large AI agreement in the prior year and retail channel softness in Professional Publishing.

For the year, revenue rose 2%, driven by AI licensing and steady market conditions in academic, notably student enrollment, the shift to inclusive access and growth in digital content and courseware. We continue to deliver robust growth in new title signings across the science, technology, medicine and professional fields, which are expected to contribute to our financial performance in '26 and beyond.

Adjusted EBITDA for the Learning segment declined 6% this quarter, reflecting revenue performance, but rose 9% for the year. Our margin expansion initiatives in Learning delivered 250 basis points of improvement in fiscal '25, resulting in an adjusted EBITDA margin of 37.4%.

Since fiscal '23, we have improved our EBITDA margin in Learning by an astounding 850 basis points, all without sacrificing growth. In summary, we continue to be pleased with the growth, profit contribution and cash generation of this business and continue to invest where we see specific opportunities.

Let's discuss our current financial position and return to shareholders. Cash from operations was down modestly in fiscal '25. This decline reflects spend on cloud-based solutions related to our targeted enterprise modernization work, which largely occurred in the second half of the fiscal year. This spend is capitalized and amortized like CapEx, but reported in this section of the cash flow statement. Without this shift, cash from operations would have been higher due to adjusted EBITDA and favorable working capital movements.

Free cash flow rose 10% to $126 million due to lower CapEx. Note, combining CapEx and cloud-based solutions spend, we outlaid comparable amounts in fiscal '25 and fiscal '24. We remain confident in achieving our free cash flow target of $200 million in fiscal '26.

Dividends and share repurchases totaled $137 million, up from $122 million in the prior year. Approximately $60 million was used to acquire nearly 1.4 million shares. Our current dividend yield is around 3.5%. After the year closed, we received $120 million of cash proceeds for the University Services business, which we will use to further reduce our debt. This will save us approximately $5 million in cash interest payments per year.

Finally, our net debt-to-EBITDA ratio was 1.8 at the end of April compared to 1.7 in the prior year period. This is before we deploy the divestiture proceeds. Let me turn to growth drivers behind our outlook. As a reminder, our calendar year '25 renewal season was favorable. Our publishing pipeline remains strong and the higher education market is steady.

We continue to do good work on the professional side with new title signings and publishing and product improvements and assessments. Our commitments for this year are simple. First, deliver profitable revenue growth in an uncertain economy; second, materially expand margins and cash flow. Third, drive continued momentum in the corporate market through AI, analytics and services.

Turning to our fiscal year outlook. Revenue growth is expected to be in a range of low to mid-single digits. Our growth outlook includes the adverse year-over-year impact of $40 million of AI licensing revenue in fiscal '25. We do anticipate additional AI revenue this year, but not enough to be comparable to the prior year at this stage.

We're raising our adjusted EBITDA margin outlook again to a range of 25.5% to 26.5%. This is up from our initial target of 24% to 25% and up from our fiscal '24 actual of 22.8%. Adjusted EPS is expected to be in a range of $3.90 to $4.35, up from $3.64 in fiscal '25 and $2.78 in fiscal '24. This is driven by expected growth in adjusted operating income from revenue growth and cost savings.

Finally, free cash flow is expected to be approximately $200 million, driven by expected EBITDA growth, lower restructuring payments and favorable working capital. CapEx is expected to be comparable to this year's total of $77 million.

One comment on quarterly phasing. In Q1, we will have an unfavorable year-over-year comparison of $17 million related to prior year AI projects. We do expect some offset from new AI revenue, namely $9 million related to the agreement signed in Q4, but Q1 reported revenue is still expected to be down modestly, reflecting this comparison issue. As always, it's far more relevant to look at us on a full year basis. I'll pass the call back to Matt.

Thank you, Chris. Let me recap our key takeaways before opening the floor to questions. Wiley has consistently served as a safe haven, delivering resilient compounding growth across economic cycles. This is due to our must-have content and data, recurring business models, good geographic diversity and strong financials.

In addition, we are well ahead in tackling our cost structure and continuously improving our fundamentals. We are now a clear beneficiary in AI development across multiple sectors. AI licensing and partnership is another avenue for us into the ever-expanding corporate opportunity.

Execution and discipline are now core strengths of ours as is evident in our continuously expanding margins and cash flow. We remain balanced on capital allocation as we invest in high-return initiatives in research and return cash to shareholders through dividends and repurchases. And based on what we know today and the momentum we're seeing in our leading indicators, we feel confident in our stated fiscal '26 growth outlook for revenue, margins and cash flow.

I want to thank all of you for joining us today. We will continue to work hard to reward your trust and confidence. Thank you to our wonderful colleagues for their drive and determination to generate lasting value for our customers, partners and shareholders.

As I said a year ago, nothing unites us more than being on a winning team. And that is what we are and what we will continue to be. I'll open the floor to questions.

[Operator Instructions] Our first question comes from the line of Daniel Moore with CJS Securities.

Congrats on the strong progress in '25 and I appreciate the comments on phasing. Maybe start with obviously, the '26 revenue guidance, low to mid-single-digit growth, including the tough AI comp, $40 million licensing. I guess it sounds like you expect some additional AI revenue, including the $9 million, but a little bit lower. Just talk about the outlook for sort of organic growth ex AI and the likely, I guess, the -- what would cause you to get a little bit closer to the higher end of the range, mid-single digit? What would be the factors that might cause you to come in toward the lower end? Any risks -- relative risks upside, downside would be super helpful.

Thanks, Dan. First of all, quick comment. AI is still a very rapidly evolving market. So it's certainly not as predictable as we'd like to see. So that's why we don't really bake it into our numbers. But let me ask Chris to talk about our thinking around organic growth.

Yes. Thanks, Dan. The drivers that we saw this year, we largely see continuing next year. Open Access revenues have been strong throughout fiscal '25 and the submissions and acceptances that we're yielding are continuing in the fashion that we saw in '25. So we expect '26 to benefit from that as well. Additionally, as we've mentioned, our TA and subs revenue, we have some line of sight relative to the calendar '25 renewals, which were good, and we expect to realize that as well. On the learning side, we have seen in fiscal '25 strong growth in our inclusive access as well as courseware, and we see that continuing into fiscal '26 as well.

Jay, do you want to quickly comment on the visibility you have into '25 revenue, particularly in research? I mean, sorry, '26 revenue, not '25. Calendar year '25.

Of course. There you go. So yes, Dan, we -- as you know, we have a calendar year subscription model that splits over 2 fiscals. So I have really good visibility into CY '25. We had a great renewal year this year for calendar '25. And as Matt indicated in our prepared remarks, our submissions were up 19% in the year. So that gives us a sense of what the journal article pipeline looks like, and it gives us a great deal of confidence in the sort of May to December period of our current fiscal year, fiscal year '26.

The outlook for calendar '26 renewal is something that we're very dialed into, and we're -- our sales team -- I just met with them this past week in Texas, met with the institutional sales teams and leaders, and they're raring to go for calendar '26 as well. So we have decent visibility and are feeling optimistic to guide to the numbers that Chris and Matt have already shared.

Very helpful. And the recurring revenue, you mentioned several partnerships that are developing, mostly sort of beta testing at this point. Just confirming, I think you said it was around $1 million this year. Any sense for what that contribution might look like either '26 or beyond at this stage?

Yes. Let me comment and then Jay can give you a little more color. It's kind of a really nascent emerging market where corporations are fine-tuning their proprietary AI models with our data, and they want the most current, most accurate data. So we're really running a series of pilots, but getting a lot of interest.

As to how rapidly that's going to develop, again, it's very, very early days, but we are -- I do think kind of that's the future of where the puck is going with AI, at least relative to our business. Jay, you want to maybe fill in some color on that?

Yes, absolutely. And first, let's just lead with the headline that the $1 million isn't the ceiling. It's the start of a shift towards AI monetization models that look a lot more like traditional SaaS or subscription. They're high margin, they're recurring. They're deeply embedded, as Matt said, into the R&D workflow. So it's an early-stage figure based on these new utility-based licensing models.

The key features there, Dan, has to do with access to APIs and the need for, as Matt said, corporate -- or sorry, R&D-intensive corporates to get access to the most current high-quality content to help them achieve their business goals.

So we announced a number of partnerships this year, both with tech companies and AI native companies like AWS, Perplexity. And we've gone to our existing corporate customers and essentially upsold them on AI-friendly packages that will play in their new AI research environment. So feeling really good about what we've learned.

I just want to reemphasize Matt's point. When we started doing these deals, we gave ourselves a goal of not only trying to maximize the value of our backlist, but also trying to learn where the -- where, as Matt put it, the puck was going in AI. And I couldn't be proud of the work the team has done. It's -- we've learned a lot, and I think it's going to be an exciting '26.

Super helpful. We've touched on this before, but article submissions continue to be exceptionally strong, up 19%, while output is up 8%. I know there's not a direct formula between the 2 or relationship, but maybe just talk about whether or not those would expect -- those growth rates would expect to converge at all over time from your perspective.

Sure. So as we've talked about before, a lot of the growth in submissions continues to prop up the value of the subscription revenue. And so when we look at submission growth, you look at it by geography and you map that to the various business models that are in place in each geography.

The Open Access landscape, what Wiley used to refer to as the P times Q landscape represents about half our output. And the other half is still published under a traditional subscription license. And so what happens over time is that both revenue and conversion from submissions to acceptances will smooth, but we like to keep driving submission volume because that's the thing that is going to continue to provide an ongoing stream of value both to our subscribers, of course, to our authors who publish with us, but also for those stakeholders who want to see us continuing to publish every paper in their country, Open Access.

So there's always a 6 to 8-month lag time between submissions and publications. And there's never a great correlation between submissions and output in any given calendar year, but we'd love to see those trends all continuing to climb, and hats off to the marketing team and the publishing teams who drove those submission results this year as well as drove the article output results.

Super helpful. You alluded to this. Clearly, this is an extraordinary time in kind of the general macro and funding environment. Just talk about what planning and budgeting. Obviously, calendar '25 in really great shape. Just talk about what planning and budgeting looks like right now, your visibility and confidence in being able to kind of forecast compared to maybe prior periods of disruption, whether it be GFC or any others that you can think of that might be a corollary.

Yes. Let me comment, Dan, and then ask Jay again to add some color. Obviously, we're watching the external environment carefully in the U.S., of course. But we -- one is our internal indicators still are very strong. And the other is Jay and I had a focus group with a number of our leading sales folks at the meeting he talked about last week.

We had our global sales force together. And we just wanted to get their read on the market, the U.S. sales folks. And what we're hearing back is there's a lot of confusion and uncertainty, but nothing yet that would cause us undue concern.

That being said, we're obviously watching it very, very carefully. And Jay is organizing a number of actions to be prepared and maybe even take advantage of some volatility in the environment. So Jay, maybe you want to add a little color?

Sure, absolutely. I mean, look, given the uncertain environment, especially what we see in terms of science funding in the U.S., but also just the general state of affairs these days, it makes sense for us to approach '26, I think, with a balanced mix of discipline and flexibility. And so our guidance reflects that, a measured view of the macro environment, headwinds from geopolitical risks.

We baked that in policy volatility, global funding trends. It's all baked in, in education and in research. And that said, our business is globally diversified, half of revenue comes from outside the United States. So much of the portfolio is digital and recurring with multiyear contracts.

It gives us a really strong base to plan from. And so we've made a lot of progress on the cost alignment, the margin expansion, simplification of the platform, the operations that gives us more levers to pull if the environment shifts. And I think we're preparing for that. And as Matt and Chris have already indicated, the discipline around margin expansion remains constant and remains a robust strategy no matter what in the face of any kind of uncertainty on the revenue side.

So we're actively modeling this stuff. We're looking at R&D budget scenarios. As Matt talked about, we're planning with the sales teams to try to go where our customers are, support them if they're in need of support. We're looking at corporate R&D spending trajectories, too, as a way of providing new avenues for growth.

AI is obviously a new avenue for growth, and clearly, on the learning side, monitoring things like enrollments. So across the board, I think we're going into this eyes wide open, prepared, and I think you'll get updates from us regularly throughout the year on how we're viewing things.

All right. Super helpful. Last for me. Obviously, congrats on the $120 million collection from University Services divestment. That's a big deal that shouldn't go unnoticed. Pro forma leverage down to about 1.5 turn, at least based on the '26 outlook and another $200 million of free cash coming this year.

You've been more aggressive in returning cash to shareholders. Is that the game plan going forward? Would you delever further from here or more likely to be more aggressive with buybacks, especially where the stock is trading today?

Yes. Thanks, Dan. We -- as you noted, we returned pretty much our entire free cash flow this year to shareholders between dividends and share buybacks. That's not a formula that we would see going forward. We will return to what we would view as a more mixed approach where we still maintain the ability to invest in the business and take advantage of opportunities as we see them.

But having said that, returning to shareholders is a key component of what we look to do with our free cash flow, and we will continue to have a measured approach. $60 million, I would not say, is a benchmark that we would necessarily look to meet, it's opportunistic, but we would do it again if we saw prices in the ranges that they were previously.

[Operator Instructions] I will turn the call back over to Mr. Kissner for closing remarks.

Well, thanks, everyone, for joining us. We look forward to sharing more on our next earnings call, which will be in September. Have a great summer. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.