| Revenue Recognition, Contracts with Customers | Note 3 Revenue Recognition, Contracts with Customers Disaggregation of Revenue The following tables present our revenue from contracts with customers disaggregated by segment and product type.
For the Years Ended April 30,
2022 2021 2020
Research Publishing & Platforms:
Research Publishing $ 1,057,022 $ 972,512 $ 908,952
Research Platforms 54,321 42,837 39,887
Total Research Publishing & Platforms 1,111,343 1,015,349 948,839
Academic & Professional Learning:
Education Publishing (1) 349,992 361,194 351,514
Professional Learning 296,831 280,667 298,601
Total Academic & Professional Learning 646,823 641,861 650,115
Education Services:
University Services (2) 226,131 227,700 210,882
Talent Development Services (1)(3) 98,631 56,591 21,647
Total Education Services 324,762 284,291 232,529
Total Revenue $ 2,082,928 $ 1,941,501 $ 1,831,483
(1) In May 2021, we moved the WileyNXT product offering from Academic & Professional Learning – Education Publishing to Education Services – Talent Development Services. As a result, the prior period results related to the WileyNXT product offering have been included in Education Services – Talent Development Services. The Revenue was $ million and $ million for the years ended April 30, 2021 and April 30, 2020, respectively. There were no changes to our total consolidated financial results.
(2) University Services was previously referred to as Education Services OPM.
(3) Talent Development Services was previously referred to as mthree. The following information describes our disaggregation of revenue by segment and product type. Overall, the majority of our revenue is recognized over time. Research Publishing & Platforms Research Publishing & Platforms customers include academic, corporate, government, and public libraries, funders of research, researchers, scientists, clinicians, engineers and technologists, scholarly and professional societies, and students and professors. Research Publishing & Platforms products are sold and distributed globally through multiple channels, including research libraries and library consortia, independent subscription agents, direct sales to professional society members, and other customers. Publishing centers include Australia, China, Germany, India, the UK, and the US. The majority of revenue generated from Research Publishing & Platforms products is recognized over time. Total Research Publishing & Platforms revenue was $1,111.3 million in the year ended April 30, 2022. We disaggregated revenue by Research Publishing and Research Platforms to reflect the different type of products and services provided. Research Publishing Products Research Publishing products provide scientific, technical, medical, and scholarly journals, as well as related content and services, to academic, corporate, and government libraries, learned societies, and individual researchers and other professionals. Research Publishing revenue was $1,057.0 million in the year ended April 30, 2022, and the majority is recognized over time. Research Publishing products generate approximately 79% of its revenue from contracts with its customers from Journal Subscriptions (pay to read), Open Access (pay to publish), and Transformational Agreements (read and publish), and the remainder from Licensing, Reprints, Backfiles, and Other. Journal Subscriptions, Open Access, and Transformational Models Journal subscription contracts are negotiated by us directly with customers or their subscription agents. Subscription periods typically cover calendar years. In a In journal subscriptions, there are generally two performance obligations: a functional intellectual property license with a stand-ready promise to provide access to new content for one year, which includes online hosting of the content, and a functional intellectual property perpetual license for access to historical journal content, which also includes online hosting of the content. The transaction price consists of fixed consideration. Journal s ubscription revenue is generally collected in advance when the annual license is granted and no significant financing component exists. The total transaction price is allocated to each performance obligation based on its relative standalone selling price. We allocate revenue to the stand-ready promise to provide access to new content for one year based on its observable standalone selling price which is generally the contractually stated price, and the revenue for new content is recognized over one year as we have a continuous stand-ready obligation to provide the right of access to additional intellectual property. The allocation of revenue to the perpetual licenses for access to historical journal content is done using the expected cost plus a margin approach as permitted by the revenue standard. Revenue is recognized at the point in time when access to historical content is initially granted. Under the Open Access business model, we have a signed contract with the customer that contains enforceable rights. The Open Access business model in a typical model includes an over-time single performance obligation that combines a promise to host the customer’s content on our open access platform, and a promise to provide an Article Publication Charge (APC) at a discount to eligible users who are defined in the contract, in exchange for an upfront payment. Enforceable right to payment occurs over time as we fulfill our obligation to provide a discount to eligible users, as defined, on future APCs. Therefore, the upfront payment is recorded as a contract liability and revenue is recognized over time. Transformational agreements (read and publish) are the innovative new model that blends journal subscription and open access offerings. Essentially, for a single fee, a national or regional consortium of libraries pays for and receives full read access to our journal portfolio and the ability to publish under an open access arrangement. Like subscriptions, transformational deals involve recurring revenue under multiyear contracts. Unlike subscriptio ns, some agreements also allow for further upside depending on how much publishing volume we generate. T models acceler Starting in calendar year 2022, we have signed agreements that generally include three performance obligations is generally collected in advance. In addition, some of these transitional agreements also include another performance obligation that includes the promise to provide an APC at a discount in gold open access journals and is recognized over time. In January 2019, Wiley announced a contractual arrangement in support of open access, a countrywide partnership agreement with Projekt DEAL, a representative of nearly academic institutions in Germany. This agreement, which was extended for , provides all Projekt DEAL institutions with access to read Wiley’s academic journals back to the year 1997, and researchers at Projekt DEAL institutions can publish articles open access in Wiley’s journals. The partnership will better support institutions and researchers in advancing open science, driving discovery, and developing and disseminating knowledge. We are compensated primarily through a fee per article published and a consolidated access fee. Licensing, Reprints, Backfiles, and Other Within licensing, the revenue derived from these contracts is primarily comprised of advance payments, including minimum guarantees and sales- or usage-based royalty agreements. Our intellectual property is considered to be functional intellectual property. Due to the stand-ready promise to provide updates during the subscription period, which is generally an annual period, revenue for the minimum guarantee is recognized on a straight-line basis over the term of the agreement. For our sales-or usage-based royalty agreements, we recognize revenue in the period of usage based on the amounts earned. We record revenue under these arrangements for the amounts due and not yet reported to us based on estimates of the sales or usage of these customers and pursuant to the terms of the contracts. We also have certain licenses whereby we receive a non-refundable minimum guarantee against a volume-based royalty throughout the term of the agreement. We recognize volume-based royalty income only when cumulative consideration exceeds the minimum guarantee. Reprints contracts generally contain a single performance obligation which is the delivery of printed articles. Revenue is recognized at the time of delivery of the printed articles. For Backfiles, the performance obligation is the granting of a functional intellectual property license. Revenue is recognized at the time the functional intellectual property license is granted. Other includes our Article Select offering, whereby we have a single performance obligation to our customers to give access to an article through the purchase of a token. The customer redeems the token for access to the article for a 24-hour period. The customer purchases the tokens with an upfront cash payment. Revenue is recognized when access to the article is provided. Research Platforms Services Research Platforms is principally comprised of Atypon, a publishing software and service provider that enables scholarly and professional societies and publishers to deliver, host, enhance, market, and manage their content on the web through the Literatum Research Platforms services primarily includes a single performance obligation for the implementation and hosting of subscription services. The transaction price is fixed which may include price escalators that are fixed increases per year, and therefore, revenue is recognized upon the initiation of the subscription period and recognized on a straight-line basis over the time of the contractual period. The duration of these contracts is generally multiyear ranging from 2 to 5 years. Academic & Professional Learning Academic & Professional Learning provides Education Publishing and Professional Learning products and services including scientific, professional, and education print and digital books, digital courseware, and test preparation services, to libraries, corporations, students, professionals, and researchers, as well as learning, development, and assessment services for businesses and professionals. Communities served include business, finance, accounting, workplace learning, management, leadership, technology, behavioral health, engineering/ architecture, science and medicine, and education. Products are developed for worldwide distribution through multiple channels, including chain and online booksellers, libraries, colleges and universities, corporations, direct to consumer, web sites, distributor networks, and other online applications. Publishing centers include Australia, Germany, India, the UK, and the US. Total Academic & Professional Learning revenue was $646.8 million in the year ended April 30, 2022. We disaggregated revenue by type of products provided. Academic & Professional Learning products are Education Publishing and Professional Learning. Education Publishing Products Education Publishing products revenue was $350.0 million in the year ended April 30, 2022. Education Publishing products generate approximately 63% of its revenue from contracts with its customers from Education (print and digital) Publishing, which is recognized at a point in time, and 23% from Digital Courseware, which is recognized over time. The remainder of its revenues were from Test Preparation and Certification and Licensing and Other, which has a mix of revenue recognized at a point in time and over time. Education Publishing and Professional Publishing (included within Professional Learning below) Our performance obligations as they relate to Education and Professional Publishing are primarily book products delivered in both print and digital form which could include single or multiple performance obligations based on the number of print or digital books purchased. Each is represented by an International Standard Book Number (ISBN), with each ISBN representing a performance obligation. Each ISBN has an observable stand-alone selling price as Wiley sells the books separately. This revenue stream also includes variable consideration as it relates to discounts and returns for both print and digital books. Discounts are identifiable by performance obligation and therefore are applied at the point of sale by performance obligation. The process that we use to determine our sales returns and the related reserve provision charged against revenue, is based on applying an estimated return rate to current year returnable print book sales. This rate is based upon an analysis of actual historical return experience in the various markets and geographic regions in which we do business. We collect, maintain, and analyze significant amounts of sales returns data for large volumes of homogeneous transactions. This allows us to make reasonable estimates of the amount of future returns. All available data is utilized to identify the returns by market and to which fiscal year the sales returns apply. This enables management to track the returns in detail and identify and react to trends occurring in the marketplace, with the objective of being able to make the most informed judgments possible in setting reserve rates. Associated with the estimated sales return reserves, we also include a related increase to inventory and reduction to accrued royalties as a result of the expected returns. As it relates to print and digital books within Education Publishing and Professional Publishing, revenue is recognized at the point when control of product transfers, which for print is upon shipment or for digital when fulfillment of the products has been rendered. Digital Courseware Products Courseware customers purchase access codes to utilize the product. This could include single or multiple performance obligations based on the number of course ISBNs purchased. Revenue is recognized over time in the period from when the access codes are activated over the applicable semester term to which such product relates. Test Preparation and Certification Products Test Preparation and Certification contracts are generally three-year agreements. This revenue stream includes multiple performance obligations as it relates to the online and printed course materials, including such items as textbooks, ebooks, video lectures, flashcards, study guides, and test banks. The transaction price is fixed; however, discounts are offered and returns of certain products are allowed. We allocate revenue to each performance obligation based on its relative standalone selling price. This standalone selling price is generally based upon the observable selling prices where the product is sold separately to customers. Depending on the performance obligation, revenue is recognized at the time the product is delivered and control has passed to the customer or over time due to our stand-ready obligation to provide updates to the customer. Licensing and Other Revenue derived from our licensing contracts is primarily comprised of advance payments and sales- or usage-based royalties. Revenue for advance payments is recognized at the point in time that the functional intellectual property license is granted. For sales- or usage- based royalties, we record revenue under these arrangements for the amounts due and not yet reported to us based on estimates of the sales or usage of these customers and pursuant to the terms of the contracts. Professional Learning Products Professional Learning products revenue was $296.8 million in the year ended April 30, 2022. Professional Learning (print and digital) products generate approximately 61% of revenue from contracts with its customers from Professional Publishing and Licensing and Other, both of which are described above, and both are mainly recognized at a point in time. Approximately 39% of Professional Learning products revenue is from contracts with its customers from Corporate Training and Corporate Learning, which is recognized mainly over time. Corporate Training Corporate Training through our authorized distributor network includes multiple performance obligations. This includes a performance obligation that includes an annual membership which includes the right to purchase products and services, access to the platform, support, and training. This performance obligation is recognized over time as we have an obligation to stand-ready for the customer’s use of the services. In addition, there are performance obligations for the assessments and related products or services which are recognized at a point in time when the assessment, product, or service is provided or delivered. The transaction price is allocated to each performance obligation based on its observable standalone selling price which is generally the contractually stated price for the performance obligation related to the annual membership, and for the other performance obligations based on its relative observable selling price when sold separately. In addition, as it relates to Corporate Training customers’ unexercised rights for situations where we have received a nonrefundable payment for a customer to receive an assessment and the customer is not expected to exercise such right, we will recognize such “breakage” amounts as revenue in proportion to the pattern of rights exercised by the customer, which is generally one year. Corporate Learning The transaction price consists of fixed consideration that is determined at the beginning of each year and received at the same time. Within Corporate Learning there are multiple performance obligations, which include the licenses to learning content and the learning application. Revenue is recognized over time as we have a continuous obligation to provide the right of access to the intellectual property which includes the licenses and learning applications. Education Services Education Services revenue was $324.8 million in the year ended April 30, 2022, and the majority is recognized over time. We disaggregated revenue by type of services provided, which are University Services (previously referred to as Education Services OPM) and Talent Development Services (previously referred to as mthree). University Services University Services revenue was $226.1 million in the year ended April 30, 2022 University Services includes market research, marketing, student recruitment, enrollment support, proactive retention support, academic services to design courses, faculty support, and access to the Engage Learning Management System, which facilitates the online education experience. Graduate degree programs include Business Administration, Finance, Accounting, Healthcare, Engineering, Communications, and others. As of April 30, 2022, the University Services business had 68 university partners under contract. We are also extending the core OPM business, as well as delivering a broader array of essential university and career credentialing services that the market is demanding and which leverage our core Wiley skills and assets. This full stack education includes teacher professional development and IT skills training, through which we develop and deliver professional credits and job placement through our corporate partners. In addition, University Services derives revenue from unbundled service offerings. University Services revenue is primarily derived from prenegotiated contracts with institutions that provide for a share of tuition generated from students who enroll in a program. The duration of University Services contracts are generally multiyear agreements ranging from a period of 7 to 10 years, with some having optional renewal periods. These optional renewal periods are not a material right and are not considered a separate performance obligation. University Services includes a single performance obligation for the services provided because of the integrated technology and services our institutional clients need to attract, enroll, educate, and support students. Consideration is variable since it is based on the number of students enrolled in a program. We begin to recognize revenue at the start of the delivery of the class within a semester overtime, which is also when the variable consideration contingency is resolved. Talent Development Services Talent Development Services revenue was $98.6 million in the year ended April 30, 2022 and is recognized at the point in time the services are provided to its customers. Talent Development Services is a talent placement provider that finds, trains, and places job-ready technology talent in roles with leading corporations worldwide. Accounts Receivable, net and Contract Liability Balances When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue when, or as, control of the products or services are transferred to the customer and all revenue recognition criteria have been met. The following table provides information about accounts receivable, net and contract liabilities from contracts with customers
April 30, 2022 April 30, 2021 Increase/ (Decrease)
Balances from contracts with customers:
Accounts receivable, net $ 331,960 $ 311,571 $ 20,389
Contract liabilities (1) 538,126 545,425 (7,299 )
Contract liabilities (included in Other long-term liabilities) $ 19,072 $ 19,560 $ (488 )
(1) The sales return reserve recorded in Contract liabilities is $31.1 million and $38.0 million as of April 30, 2022 and April 30, 2021, respectively. See Note 2, “Summary of Significant Accounting Policies, Recently Issued, and Recently Adopted Accounting Standards” for further details of the sales return reserve. For the year ended April 30, 2022, we estimate that we recognized as revenue substantially all of the current contract liability balance at April 30, 2021 The de crease in contract liabilities, excluding the sales return reserve, was primarily driven by revenue earned on journal subscription agreements, transformational agreements, and open access and, to a lesser extent, the impact of foreign exchange. This was partially offset by an increase due to renewals of journal subscription agreements, transformational agreements, and open access. Remaining Performance Obligations included in Contract Liability As of April 30, 2022, the aggregate amount of the transaction price allocated to the remaining performance obligations is approximately $557.2 million, which includes the sales return reserve of $31.1 million. Excluding the sales return reserve, we expect that approximately $507.0 million will be recognized in the next twelve months with the remaining $19.1 million to be recognized thereafter Assets Recognized for the Costs to Fulfill a Contract Costs to fulfill a contract are directly related to a contract that will be used to satisfy a performance obligation in the future and are expected to be recovered. These costs are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. These types of costs are incurred in the following product types: (1) Research Platforms services, which includes customer specific implementation costs per the terms of the contract and (2) University Services, which includes customer specific costs to develop courses per the terms of the contract. Our assets associated with incremental costs to fulfill a contract were $10.9 million and $12.1 million at April 30, 2022 and 2021, respectively, and are included within Other non-current assets on our Consolidated Statements of Financial Position. We recorded amortization expense of $5.2 million, $5.1 million, and $4.2 million in the years ended April 30, 2022, 2021, and 2020, respectively, related to these assets within Cost of sales on the Consolidated Statements of Income (Loss). Sales and value-added taxes are excluded from revenues. Shipping and handling costs, which are primarily incurred within the Academic & Professional Learning segment, occur before the transfer of control of the related goods. Therefore, in accordance with the revenue standard, it is not considered a promised service to the customer and would be considered a cost to fulfill our promise to transfer the goods. Costs incurred for third-party shipping and handling are primarily reflected in Operating and administrative expenses on the Consolidated Statements of Income (Loss). We incurred $29.0 million, $27.8 million, and $28.8 million in shipping and handling costs in the years ended April 30, 2022, 2021, and 2020, respectively. |
