JW.A - Earnings call transcript Q1 2020

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Operator

Good morning, and welcome to Wiley's First Quarter Fiscal Year 2020 Earnings Call.

As a reminder, this call is being recorded. At this time, I would like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead.

Brian Campbell

Hello, everyone, and welcome to Wiley's first quarter 2020 earnings update. room CFO Napack, and the and and in Kritzmacher, John EVP me is President Brian CEO; With Operations.

forward-looking A the few include call first, statements. is being reminders recorded and to start, may

events subject as rely shouldn't may and to in does The on statements SEC statements not obligations subsequent to You or actual undertake revise discussed factors forward-looking or any these differ results materially filings. circumstances. company our are to reflect update

profitability following: results operating performance a that less supplement on free operating Second, metrics contribution margin, constant adjusted to generally trends. cash basis income Wiley spending, acquisitions. provides measures the which results adjusted underlying a currency Non-GAAP to non-GAAP impact as excluding evaluate of comparability adjusted flow and impact exclude adjusted items profit, and and and development comprise product the EPS, EBITDA

Also not companies. prescribed may of performance standardized other by not press under the and as reconciliation These not currency Please comparable U.S. therefore to non-GAAP CC. measures in similar constant to be have do abbreviate the note, the of included calculation our measures information be viewed we presented see This GAAP, used and as measures supplementary all financial meanings in should release. measures explanations alternatives by GAAP.

all exclude Important the noted. impact variances presentation note, in this otherwise to of currency unless

webpage. to a a will click of recommend of lower side over potential Phone. you the remove as transitions After the presentation the Relations will For on we the slide webcast the background, phone, left-hand but the the call, the located those that want select as to copy viewing window still view in question. delays who call if to the Live available Investor of slides, prefer you prefer to a the any our gears any This ask portion listen be playback and on on and icon eliminate well

Brian Napack, over CEO. Wiley's now President and the to call turn I'll

Brian Napack

us quarter. announced joining start today. refresher for new we all a brief you the thank and on last with to I'm that Brian, you, Thank going definitions segment

Going Publishing manage Publishing forward, our strategy. segments Professional Services. on business with be we way following and the Education Education Learning, Platforms, These with segments: and Research will growth the and the reporting align we three well and

Research Publishing prior unchanged and research Research Platforms corporate our and author essentially Atypon, It publishing, includes business. our services, platforms from or our research is services, periods. journal and

For context, for this half segment this of accounted total quarter. Wiley's over revenue

and for and content Within Test Test Professional in The and to and educational students, Learning higher platforms of education Education Prep business. courseware, form second Publishing the universities digital and learning and professionals, Publishing our training refers our reference corporate publishing programs, segment, Education segment, corporations. products delivers Prep this

Professional programs, skills the focused Professional by Education capabilities corporate alignment. corporate efficiencies of Learning and the settings. revenue are around third synergies refers in Development to development and training of a which Learning on this all total quarter. like enabled books, We potential and Publishing in new the Professional professional our for services, Wiley and accounted

more X-K for growing revenue for August see segment our regarding is attached of Services management see students degree to services quarter financial delivers and our important outcomes. nicely. schedules that financial boot help and includes achieve segment. segment is tech-enabled segments corporations Please and Services XX% Education Education and the accounted these services for as historical educational this restatements. It camps. detail program third This universities, such credentialing

overview I'll the context, now takeaways that our key With give performance. of QX from an

and Publishing but segment with Services the key Research EBITDA Research and generally our Learning. the of growth performance Services was I'll I'm businesses. a in Overall revenue quarter. we Open momentum the results areas business in walk saw Atypon, Good Access, in decline Education offset that Professional pleased in Education Publishing including Education and the mixed shortly, and through overall,

company. a our to efficiency decline investments across did in growth We the this see and due initiatives year-on-year, but anticipated largely earnings was substantial

remaining We the earnings a we expect of the higher lower for first quarter decline compared with prior significantly in to than three revenues rate quarter. saw quarters top-line in every year and growth

that As such, will meet we're our outlook. confident we year full

You we will only was year the outlook $XXX talk updated, more flow in our note backlog impact clearing million, the mostly be QX fiscal flow Collections. the has fiscal to $XXX free by but million out million to Journal of range by $XXX cash 'XX. performance from Subscription driven zyBooks acquisition. but for prior million, been to our up anticipate 'XX in year about of will recent $XX that to quarter the John reflect Free favorable this, cash of

good first in indicators make notable for acquisitions Research steps efficiency spoke quarter, below progress which I'll digital lead beginning about we and our the while Education, of continue to our now quarter million. success elements and business, effectiveness were our implementing in early acquired Two organization. of rapidly our key we and and Zyante, to the which strategy a see of $XX very across we're Knewton, forward We of in progress highlight this last to growing businesses. courseware enhancing

Zyante talk of known growing of importance zyBooks rapid bit the later. and very on disciplines. a more acquisitions But gaining the science detail first, has bit more go We'll these And about in adoption. strategic a the compelling fast effective into created a computer and results. courses they're I'll as market catalog STEM in

growth X% and the Wiley's On recent as the contributions grew as Services, Research in for Education top-line, good by quarter, well acquisitions. inorganic driven our the revenue of

while XX%, currency in quarter. constant at the EBITDA XX% Adjusted down first EPS declined was

planned was in our acquisitions. gains, earnings by the recent efficiency anticipated, driven As indicated, growth decline investments of and initiatives timing largely this

all around progress Publishing. revenue business continue leader X%. continues to growth, with make up double-digit had and and X% Access positive a strong great quarter Research EBITDA show a to Our adjusted in up as Publishing Open we Research

Open models. combination our These and you, remind The defined ways model Access, the a the have To To-date, sides. Germany, economically model publishing Norway, is and we in pay-to-publish signed the include Ohio and while help their and mixed deals world. as innovative for to mixed beneficial were promote are subscriptions work deals in The traditional Netherlands, five and of around Virginia deals both both being These to new thread for and is customers. U.S.. of scalable both researchers them creation publish all Wiley common good all of

U.S. or being this Access complementary to subscriptions agreements we quarter Open for both academic be Notably, and for Virginia's continue Access where library the additive. market. represent these core announced The OA, well that OhioLINK and with solutions the Open suited model consortium customers

and like subscription of alongside our a Publishing remain to relatively but was consistently rates. at models for It's of fiscal important double-digit X% important part these model small note that still revenue strong global growing deals Research the are OA is 'XX, Research mixed business.

Going forward, expect a we mix of healthy models. business

to Most importantly, increase. models all continues the Wiley of Research our more to global is as well opportunity business publish positioned through take to advantage output

question our of Without long-term portfolio. strength our is Publishing secret the to Research Journal success in the

over their Our the These high most journal X,XXX research many publish of leading valuable community's are and go titles, global highly to impact discoveries. where researchers including unique reach includes brands respected brands.

is research papers of community to brands a latest of society stronger. of one the to and prestigious published rankings. share Report Wiley's Clarivate market we in Citation XX keeps total Journal annual to Our partnerships. a we Quality the grow, and add Separately, number matters received continue strong portfolio and XX%, getting and important continues

our latter Driven continues And single-digit growth publish above submissions by by global growth. this journals continues online market at significantly in usage strong and driven R&D growing rates, in being article to significant high by the spending, rise, growth Asia. in growing usage strong rates, endemic demand double-digit with our to at library

Finally, see sessions. it industry good Moreover, the and the for X.X Revenue growth. user That's a momentum month strong to compared huge And continue targeting were XX% the that Wiley. to of impact our trailing up leading kind its XX we're prior total XX% in year for a continues global the reflects Atypon in we of sessions number. at period up research platform quarter was pipeline. billion

good So overall, Research it our was a for business. quarter

lighter segment and note Publishing first Professional first a down due Prep. part to of in would The this Test revenue than business on was Publishing. growth offset X% quarter move declines by the and down that with Education XX% in Let's quarter softness with trade Learning to training difficult the Education year Publishing in for Professional of continued much publishing. And books Education book rest I had seasonally Learning. quarter is the business in the our corporate

to Professional revenue lower with for adjusted due Overall growth and XX% Learning for the Education associated costs investments was initiatives. EBITDA quarter in Publishing down and

year, Education for growth revenue inclusive Professional Knewton and are and full the the For Learning anticipating Publishing marginal segment, zyBooks contributions. we of the

and while programs, new in revenue Prep for good level, XX our we the momentum decline programs university demand of At CPA Prep time at signing and a Test granular our and the CMA the also more in CFA Test reflected see GMAT partners. lighter same in the

We Test to growth anticipate the continue year. double-digit for Prep in

in is business courseware all digital seen positive our affordable Despite and We've early ed we've higher this, have publishing in and students seeing prices. to momentum access course materials good in programs, access growth important ensure seen at actually rental inclusive user our areas. strong models business momentum that

like technology are we and high our platforms. science significantly learning growing We STEM, upgraded demand computer disciplines our front-list in accounting, have and

are well profitable to place, publishing higher that way publishing We to we grow. in education our strong have business plans and believe on returning our

platform. the up new American opportunities the more on cross platforms. both prestigious will on Microbiology subscription Wiley’s signed these a unique based content strength and partnership. of service Society recently for own built in Atypon new be a other opportunity Wiley in future. we see Among excellent launching Notably, we leverages publishing things to We and our many exciting This ASM's

signing acquisition EBITDA Education landed BlackRock, a solid clients has Wiley significantly. programs. from the House, up to for with business e-Learning, was The X%. first this XXXX, November In quarter of and new rest out partners had nicely Corporate and growth revenue professional a momentum XX in strong development was good Our XX%. new about including growing contributions House the to quarter corporate inorganic pipeline With continues Backing up of CrossKnowledge Learning and training training market Corporate our year. demonstrate Services revenue Learning acquired The both Learning

approach House loss see revenue about I'm and in integration. I'm quarter. measured of Adjusted partners. from taken revenue The EBITDA to in feel a this in a scale, to a benefit good improvement long-term $X existing momentum expanding small Services our with continuing Learning including signing pleased a result very $X partners at from this where million and and always gains We've we're also EBITDA pleased efficiency headed. programs growing business profit, and Education the added rose to [organic] million, new

our partnerships to and University university We the College. adding These industry footprint. in quarter, signed four Oregon Eastern leading included new Babson

the and future bit new UK. of University in We Illinois Wiley’s strategy like now to our directly Birmingham about in would University how talk the they success programs and education. our also acquisitions, and a announced new at Northern I support two EdTech

Wiley's goal is such You high areas, absolutely are will and demand in strong, education achieving due where computer recall as growth job and learning is essential Wiley is lead is discipline These that and finance STEM, where business the outcomes. continued focused brand where demand effective in to courseware science. accounting career to to high digital

You will business help access affordable every we achieve content have goals. and Wiley ensure delivering models content are committed that also to more to student recall our their solutions them can to that

and data careers; Knewton, talked past two, strategic learning. three these that all demand a we driven focus acquired moves two more I’ve great May high affordable strategic three, on in XXst, solutions. growing about. This made quarter pillars. One, market important support On a disciplines adaptive in we of three So, pillars technology; leader fast education just

decade, one the platforms Over industry. advanced past Knewton most the the education of created in

this today strongly The this Knewton our broadly Alta number in to Alta. use economics, proven cost XX,XXX currently courses students array courseware Using courseware over is but in succeed in and statistics offering a entire courses across EdTech low introductory Wiley's and Knewton is highly large Education arsenal effective, Alta chemistry. as growing delivers additive students have engine applicable math, rapidly. been known business. by is of help is and a to platform wide

Built traditional courseware to textbooks. Xst, is to been an the On the Like delivers is the and effective digital taking content unique $XX shown package platform works cost delivering significantly for persistence a acquired and learning. zyBooks teaching innovative and today's of students. fast-growing lower learner publishing provides we engaging be than July disciplines digital off compelling drive engagement STEM Knewton, for has a targeting. it million. meets especially zyBooks traditional computing learning, approach high-impact that that a students innovative, Its first content that easy-to-consume In it Wiley use in zyBooks needs that and in in approach more by content truly today's higher at than significantly hands-on market, in and is on

earlier, over the high and growth revenue XXX strong XXXX, affordable two delivering solutions. zyBooks has that EdTech institutions. XXX,XXX pillars speaks and all of itself. rate career company The and that is disciplines, the Since outlined are These great demanding double-digit important are acquisitions additive students served I solutions address in strongly over to plans and Wiley's uptake education. three at for demand focus market Knewton that

through hand With run call to that, the the you financials. over I'll John to

John Kritzmacher

Brian. you, Thank

XXXX calendar million, with for cash our by free clearing expectations subscription consistent collections. Our year favorable of was fourth flow performance $XX for the the backlog journal quarter quarter

flow half collections cash and of year, the timing due subscriptions journal annual winter fiscal for is use skewed months. principally fall the heavily toward the reminder, Wiley's the As of typically cash of is which first late in to a

million operations a was prior million. from free by flow year, quarter Cash while improvement $XX use improved to cash $XX a $XXX million the of a million, over $XX for of use

property ratio rose spending and net and Capital at investment million of strong to $X debt-to-EBITDA our development inclusive expenditures, expected product Balance including X.X to $XX remains million and acquisitions. with technology, our platforms. equipment in recent sheet due products

year. cash dividend increase of share to In per the return prior and dividends a June, to $X.XX in continue We X% shareholders company form raised over quarter, the its to repurchases.

repurchased share first also total at remained quarter, X.X XXX,XXX Approximately in the current we $XX.XX repurchase million of per of $XX an for repurchase share cost shares a million. authorization. our average During shares

strategy lead education. our We and are career executing research focused tightly on to in focused

Our across initiatives, improvements savings the efficiency strategy includes business. company-wide business which optimization and are enabling

several an in actions actions It functions. In of reflects implement initiatives, management recorded functions, process reflects content quarter. underway to other $XX several we The and management, of in technology to parts charge the connection reduce increase the with spans business. layers restructuring optimization million charge these services control across improvements and also shared including

As the expect growth. most million, be $XXX over revenue reinvested gross of we three enable be that period a savings to although will approximately reminder, year to annualized profitable

On our to call, indicated restructuring million expected we million. last we charge the of QX $XX that $XX

restructuring on the anticipate do some our optimization Our further work lower be actual and charges largely charge execution across quarter three period. to in plans reflects the business we done year some additional

discussed our fiscal XXXX we growth, to on to cash in fiscal which improved large related year-end June. including earnings XXXX call anticipate rather and revenue dip outlook, investments in for is Moving our Much flow we this dip accompanied by a on for acquisitions. earnings, of

higher higher more 'XX growth amortization fiscal about in will incremental difference context, profitable $X.XX investments than $X.XX EPS drive of The expense. decline. For for the includes slightly $X.XX depreciation remaining from and and interest

full our outlook it are addition Based indicators, zyBooks. recent of updating we on the reflect reaffirming to leading year but

zyBooks and third month by in acquisition zyBooks the EPS in million EBITDA of of $X.XX will million unfavorably the revenue our $XX respectively. and and closing impacts the contribute Given $X fiscal year,

annual remaining guidance. three line lower remainder quarters, top-line higher revenues in and XXXX, of first but in rate Earnings observed be lower prior than quarter the growth quarter. we will year-over-year seasonally in than the our year For the expect and of for with the every substantially will decline be prior we fiscal

updated Our as and outlook impacts reflects follows: is these

as actual as XXXX; of compared $XXX billion million of in a to fiscal EBITDA as Revenue to $X.XX compared between million $XXX billion actual million $XXX and of to $X.XXX $X.XXX Adjusted compared XXXX billion $X.XX. Adjusted between even; EPS $X.X and fiscal $X.XX 'XX fiscal to

and million in $XXX and growth cash XXXX. initiatives between is As variance noted, million to free $XXX a of And in compared finally, flow $XXX result as of most acquisitions. investment the million fiscal

fiscal outlook in is year exchange year excludes our our and foreign foreign upon the exchange based average movements impact Note, rates of XXXX XXXX. fiscal for

only $X Foreign movements revenue million by and a rate on had quarter impact exchange earnings. modest impacted first our adversely

were revenue impact and over would we this see Current hold, the a year. exchange rates significant balance a adverse to at of earnings

revenue performance targets acquisition XXXX, position earnings further approximately $XXX achieve zyBooks also fiscal our $X our of and call, approximately million. including will financial our for and to billion The EBITDA these longer term objectives. we On last shared revenue of strengthen

hand Brian. I'll now, back call the And to

Brian Napack

Thanks, John.

seeing mixed Open the Services. Publishing quarter. Access, We're messages the strategic summarize was and of we're Professional pleased the first momentum quickly offsetting business, Atypon revenue me Publishing our Let key Education and Performance Research in and this is Education in and quarter, overall, areas for Learning. good Education with Research growth in Services key which EBITDA decline

by Learning, Prep, in through our better Test softness a significant performance and million cash Cash year. This, resulted the investments, business. prior Education for of the quarterly Professional experienced Publishing performance with or in and a was the flow specifically rest characteristics earnings favorable expect XX% of sustainable showcasing in over flow we the quarter We but dip. improvement planned books $XX our along and year strong

in about in pleased and strategy improving progress our in lead efficiency We key the and have implementing Education of have and acquisitions, in the making students. solutions great effectiveness in we're and capabilities the businesses. added critical while very for so, with technology Knewton to affordable and to education advanced We're growth zyBooks and deliver our momentum Education, our high strategies disciplines, Research lead doing

zyBooks. we for Finally, updated the our reaffirming outlook acquisition are full of year

as cash we the For dip invest but expect acquisitions. growth and in revenue and flow improvement, we year, an earnings

significant and expect investments we result 'XX those to June, in improvement noted in beyond. As in fiscal

researchers, joining our us you learners, wonderful the by to thank all And want their our success the world. for contributions and around momentum today. to thanking Wiley universities corporations of colleagues growing all for of our great finish ongoing I to and

upcoming New Hoboken, attend in for Investor would Friday, scheduled Xth love to October Jersey. reminder, One have Day we our you

of We the and will have and team markets various more providing & our Wiley Sons. color road members ahead the on presenting John on for strong

hope are, interested we please in which Campbell. RSVP If you attending, you're to Brian

welcome as that comments we With and your questions. background,

Operator

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

open. now is line Your

Daniel Moore

guidance, Based Let me start by trailing -- million acquisition. looks with a on on it a basis, negative least EBITDA zyBooks, recent few dollars. the like at was is

color And bring it they check I to I what gave -- bring just they And that, quick that's to table? developed the you that on a there. you. if little think maybe you strategically, correct? more Brian, Thank wanted hasn't is table Wiley internally? color, more but have what good Just two, to follow-up the number

John Kritzmacher

it's Dan, John. So

in As modestly the But noted EBITDA growth from impact the we its rate the going in going slides, adverse see a of we're forward substantial. is to year. zyBooks to acquisitions

And quickly. to into territory growth its with so, get we expect positive EBITDA

Brian Napack

couple And From extremely get learning approach perfectly zyBooks previously there. with This think read in reviewed after following the learning. than that and on, lightweight, approach easily I'll strategy growth these the is categories to perspective, to to very chapters lightweight growth a education activity really students areas, in times drives the driven I the accessible publishing technology They textbooks the up a want this demanded as a in engaging commented in pillar and I our disciplines want as high as start. with digestible, very digital way, then job in the I take up right by really from first and strategy, part, it education market. that different home very for platform hands-on to who of that marketplace pick fits targeting don't from the that the are the high content three deliver hands-on is is regard three about talk strategic I'll start so we being well. their students labor technology providing published anybody essentially is and -- platform a provide the they with way which chapters has to innovative

go don't disciplines rapidly. create. lightweight years, approach to itself continue digital-first up new is additions catalog a along. And update we out This growing that extremely as we to come cheaper have can has come these with approach And content so because we means it’s content, high-growth that every to few content in course that publishing the is to with

So cost ultimately in cost total we can create, that very the lower deliver and to lower to effective profitable. student are outcomes

disciplines ed. and is We're So to not focus will and We're where be as publisher disciplines trying as there on basis. difference higher the We're courses trying a they cost these everything. you low Wiley in a to know, where technology focused growth. makes focus trying deliver do on to in really things to trying -- on we’re a

those great the that are trying it's to to think really important. do extent solution. market because repeating myself where the I I'm We're messages We're trying that needs not To win everything.

Fact to text-heavy. So particular indicated, approach way I is exposed why been to that the idea to to company to stuff we numbers more here much innovated momentum deliver half completely publishing the This this a content that addition this is this and ourselves? buying didn’t and in had Demonstration we're is appealing already have digital-first over a success lightweight, heavy the students innovation. we’re this million that publish. about different stuff, is talking means not

to with the will return growth. So It us for a that one was strategy that really believe help was hand glove in key to this business is our us elements we of and it no-brainer.

Daniel Moore

cover a You it fleshing lot of out the did helps. that but --

you. thank So,

it be glide Any then would the Thank double-digit path you in past legacy growth. of you. color the pretty find X% we OPM any I Just of hate switching helping operating just helpful? margins when stronger to there? the timing Learning goal. gears, Maybe terms for the momentum, get is margins To businesses where legacy in use, a what Education but to a House extent their stronger good the as Services, footing. segment, kind And talked the, organic about operating color Deltak,

Brian Napack

point we a years a to a It’s on both will I company found Learning Services House to the address very in very From of Wiley table, we of levels. as Education Learning number perspective number out complementary you called what ago, a of bet. different Deltak House brings our of complementary questions. Brian. those formerly You the found company

-- that our larger that that order us. the has way balances complementary nicely to sort it of mix. that ones It is a of schools different balance first brings prominent had schools really need it schools with smaller now. mix, but brings The into the in and it’s services without us brought school can’t more that into that smaller, Wiley succeed Services schools high regional succeed, Deltak And quality service smaller that Education

And very schools, a so nice now to balance that, sticky. very that that very, schools range move feel a portfolio full a unequaled is the partners. able we closely down work is to regional are in able of small the with big their And to They're had marketplace. quicker. real marquee They're these We and from partnerships is schools more strength. high-quality

A, those the won't in management So but programs, strengths had design strengths students, strengths. I the B, strengths of into in detail, strengths the and of And portfolio. extremely Strengths the the great company's relationships. was combination of each go programs, in of complementary. identification of enrollment, in in two

that great. the two instead of We was the So best two and of of getting the And one really we teams. to take management picking good found each. other, blended rid

team solid have best will we we team say now the the most industry. an in combined unabashedly extremely and I management operating management strong So think I have

portfolio by that piece anybody a fits the individual the of and portfolio, provide, in breadth now think, the are marketplace computer their portfolio, So final at students, specific services is themselves, very, and broad we like complementary need for that of this things order specific in services certification provide skills deliver schools skill, OPM the to together allows times schools them. threaded that of computer those training needed That's computer programs tailored training, very us to do all they down outcompete a of to from size one breadth together to, to which unable combination. powerful put additional to non-traditional IT and can programs these and are technology credentialing we

And to scale, this efficiencies. been allowed which gain the gain leads is been has that your able operations to we've to integration, combine question, answer that we've to scale. second which of All us and doing with

see And the business number terms John? So be we that of benefits in believe double-digit of operationally path, mid financially. that in there said a we've are this mid and sort double-digit times we enormous of of number to upper both strategically, will glide margins.

John Kritzmacher

specifically about on we view of see margin -- to ourselves fiscal be year out term, specifically we're in targets talked of Services range 'XX provided call, our we headed that third out. the when the year a where XX% in EBITDA driving We last our Education that we longer in we called

Brian Napack

out. year third the In Yes.

that. So we going -- and to what we're sticking That’s we're be believe to doing.

Operator

Thank you. with of Crum Stifel. from Drew question And our comes the next line

Your line is now open.

Drew Crum

with suggested and So Publishing Professional grow of that I inclusion think Learning fiscal would you Ed segment the the Knewton zyBooks for 'XX.

the -- a fiscal that within deeper in quarter. performance drilling segment, of business little through down Test bit of If just I kind was year? down the the you back the about And the those out, business how Prep thinking balance the legacy are that you of

of the business you are? difficult just double-digits. very comparisons the us that that suggested help some you get be Can or understand drivers what year. half You the second in But would up the reconcile fiscal

John Kritzmacher

Sure.

base profit First transition of in of the will, substantial in some terms if for of of along revenue, erosion period. the see and for the has the mid-single-digit to margin the expectations, during this with for business, been balance year year, that view you our decline

in traditional anticipating quarter efforts are our as to overall do on going going there. see to mid-single-digit address year. structure. there. So we the of to underway more acquired. see the performance in prior we half decline compared line the see -- growth we're out that still as got our We've some with businesses noted, businesses strength the of the the generally assessment back But to And in is we're cost We first you year the

somewhat nothing in we first hit surprises, couple changes expectations Test the things lower had than quarter. for that quarter. a our Prep, But big of no that in the year. overall, around the first that So us materially view

in GMAT. the softness Frankly, a fourth As very we high that quarter part that saw in released we was saw new of some which Brian described, edition demand. a big

So bit incoming softness the But some There’s that over tended balance year. its out trough a GMAT also first some inside candidates. the in have to expect way of of a quarter. of going that's to work of

So edition around the released the there the fourth general timing new in quarter. in

side, e-commerce. On some ran CPA in pricing August. that, into in addressed challenges up the picking around we execution month demand’s again of the We've

that in well. around our we the bit a excel believe we're road, for year CPA So track hit bump the little goals but we had a of on to as

Drew Crum

And gears … to then shifting just

John Kritzmacher

with Overall -- comment fully in We the could you just for in actually of made. reiterate that still just, for will Drew, contribution. to anticipate year. do bit if inorganic to that we the show on, a We albeit Test growth revenue expect the the for anticipate noted, add growth Prep see year. as year to I double-digit acquisitions, the We do solid segment Brian a

Brian Napack

I'll And just the traditional add of on publishing business. the side

what the business I'm playing in come. big we I our in or it. out strategy continue about we're that we're think the business things what while good seeing It That putting We takes positive and promises see we're happening see place But we change going years for about our to publishing program in outlook But indications of here. are seeing see and strengthen to the play in and quarters, inside marketplace. doesn't out. that to what's a not can pretty getting making momentum a perspective. we're and front saying. we're to and But the these the early in from through feel

Drew Crum

focus the look gross at business But to line. low-XXs or I And XX%. in then you points just on XXX consistently quarter maybe last is the five the four was. metric the what was that to shifting down If the line it a in margin tend was basis know to that years, over this I range. your gears

out to you is of And looking at? gross you couple the And guess years? what of guess I that last XQ, kind I across gross can talk So business about forward, where drove specific margin? see what selling the you've indicative the do lower of fiscal margin seen

John Kritzmacher

So growth, Services, this to in gross in single factor Education That’s the at substantial a growth stage Drew to biggest of margin is margin development. gross our right? be impact be our lower its in going the business going

by expectations the driving to as ago our most ‘XX. a performance that's improvements percent a the EBITDA of moments significant So and in contributor fiscal up EBITDA few about XX% talked for in far we revenue

in So competitive but parts that's we’ve a of some this Research is a pressure in of would about and it’s is there highly contributor. business we've other Journal pressure key pressure And and note on business. the been seen there there. upfront royalties where the some I bit

improve optimization speed which business we’re things which is cost the as with fundamental really bottom-line. margin, to really are that initiatives and the then those on protect to improve lowering our things with managing on on optimize refer we’d associated would working what royalties portfolio spend to pressure quality our consistent done. some But with our we're We consequence noted I around say what journals. you've And we get and hard of

going our a out overall. to about. But are see So that ability gross overall see to to we bit some a planning little are operating period improve talked in you’re balance margin committed rotation, in order very still the over it we drive us below expenses to much our going confident margin of and you

Operator

the Nick instructions]. Thank question Dempsey of next with And you. line [Operator Barclays. our comes from

Nick Dempsey

excluding of I Nature, Springer imagine Projekt with of recently titles. that you your a Nature the is Nature, right, charge full collection their in impact, that Germany. charging Springer lower titles the much article on as ex-Nature are of announced processing all deal has same part Deal First

they did there. Education currency. acquisitions there small acquisition better Germany that benefit I Second those is us know some there? quarter? within decline a was from it XX% the in what constant question down appreciate excluding in the Are deal in to Publishing get was able I So you tell

Brian Napack

will Okay, the take John Pub in them Nature will Springer question. so we the I question; take will Ed take order. decline

each surprising and is right about impact not exclude but It publicly. assertions some been hasn’t brand different. made the all orderly reasons. is world industry. direction. deal Nature for We're factor even been it cascade the they believe So perspective the are We can those study detail parts about which of going a that interests did in from deals very these did. comes an with believe It it's publicly. the don't them will of that for with pleased territories long one deals of is titles, it to look, It our terms when sustainable Springer the This yes we out. -- for that announced We move We're your improvement that different. -- that these We to in optimistic the wanted you're in excluded obvious note those transition the Nature market with material in preeminent cascade any in We will in deal through We're that a deal. sets the run. hasn’t it. benchmark very that

the what actually pretty right what on think and when the I to were and about of we'll we discomforted good a we So the have when all actually indicates details. signed we marketplace we by more future they it transition. on when comment But now deal see not for feel the at -- saw

John Kritzmacher

material, front to then of overall million for zyBooks of of really of the quarter, The zyBooks so discussed that month in in The quarter, the how made? much last down to at $X that only Education were the the as your our about Nick, Knewton, we results. our to quarter, performance Publishing revenue. we month then not million the on of by end mitigated actually And quarter, order and acquisitions the in one acquisitions $X question was contribution

Operator

turn further session. Mr. Thank now And for I'd that any Napack to conclude call to remarks. the like does back question-and-answer you. today's

Brian Napack

going today. Yes, for results our you until to us will second you December. hopefully just everyone our some to then, I We're look And want soon. quarter the we And at talking joining October forward we to in many in on of to see forward presenting look call of you, to Meeting. thank Investor

Operator

does today's for gentlemen, program. This conference. in participating Ladies thank conclude and you today's

disconnect. day. have great Everyone, all a may You

John Wiley & Sons (WLY) 6 Sep 192020 Q1 Earnings call transcript