Wiley (john) & Sons-cl B Stock

Good morning, and welcome to Wiley's First Quarter and Fiscal 2027 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. I'm joined today by 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'll refer to non-GAAP metrics on the call, and variances are on a year-over-year basis and will exclude 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 turn the call over to Matt Kissner.

Thank you, Brian, and hello, everyone. Welcome to our Q1 earnings call. If fiscal '26 was our breakout, then this is the year we build on that momentum and scale our new revenue streams. Q1 played out as we expected. Strong momentum in our research and AI growth engines was offset by a prior year AI comparison, which we previously mentioned, and continued soft market conditions and learning. Recall that Q1 is our seasonally smallest period, so our year-over-year comparisons carry some noise. However, nothing in the quarter changes our full year expectations, which Craig will cover shortly.

Wiley's trusted content and intelligence are the foundation for the rapid advancement of science and innovation worldwide. As I've stated before, when it comes to high-stake scientific research, AI will only live up to its promise if it is fueled by current, accurate and trusted content and data. Wiley has one of the most comprehensive and continuously growing content and data portfolios in the world. You saw that validated twice this quarter in ways I would not have anticipated a year ago. We were invited to be the sole scientific publisher to participate in the U.S. Department of Energy's Genesis Mission and the founding data partner for CuspAI's Global Materials Foundry. In these endeavors, we stand alongside innovators like NVIDIA, AWS, Microsoft and others. Behind those headlines, the commercial engine kept running. We signed new AI licensing agreements across multiple industries.

I'll walk you through the quarter and the momentum we're seeing in our growth engines, and Craig will take you through our financials and outlook. Let me start with the Q1 takeaways and a brief word on how our 2 growth engines work together. Research is the foundation where our scale, brands and society relationships enable us to generate proprietary content across a widening share of high-demand disciplines. AI and data analytics are built directly on top of that foundation, leveraging our content and data to create research tools for high stakes R&D. The relationship runs both ways. Publishing fuels the AI and data analytics engine with the continuous flow of proprietary content, and AI powers the researcher productivity that increases the flow of publishing. That's the Wiley flywheel.

A few highlights from the quarter. We delivered a 12% increase in research publishing, reflecting strong global demand to publish, with submissions at record levels, the Emerald addition and AI momentum all contributing. Learning, on the other hand, faced challenges from a prior year comparison, soft market conditions in professional and a seasonally small quarter in academic. We generated $14 million of AI revenue in the quarter, and our pipeline is expanding across models, channels and verticals. We remain well on track to deliver our full year AI revenue goals. Our spectral analysis API portfolio launched into the laboratory market. It's another milestone in our evolution towards an AI and data analytics company. I'll explain this advance later in my remarks.

We're integrating Emerald to extend our scale advantage in research and content advantage for AI and data analytics. As expected, the fit is strong on all 3 dimensions, financially, strategically and culturally. Our teams are working very well together, and the integration is ahead of schedule. And we raised our dividend for the 33rd consecutive year, putting Wiley in rarefied company.

Turning to the headline numbers. Craig will provide more detail, but performance this quarter was in line with our plan. Two known factors drove the year-over-year revenue comparison. The $29 million of AI licensing revenue that landed in the prior year quarter and continued soft market conditions in learning, particularly professional, neither changes how we see the full year. AI revenue was $14 million in the quarter, with a further $14 million already contracted across Q2 and Q3. Emerald contributed $13 million to the top line.

On profitability, adjusted EBITDA was down 4% on the year-over-year revenue performance. Adjusted EPS was down 10%, further impacted by higher net interest expense related to the Emerald acquisition. GAAP EPS was a loss of $0.23 compared to earnings of $0.22 in the prior year, largely due to restructuring charges and acquisition and integration costs.

Let's discuss our continuing strong progress in research. Our key metric for research is publishing throughput. Strong demand to publish remains undiminished worldwide, with submissions up 31% and output up 8%, demonstrating both continued growth and the clear focus on quality. This is evident across both rapidly growing and mature markets. We successfully closed our calendar 2026 general renewal season with customer retention remaining above 99%.

On expanding our journal portfolio and leading brands, we launched 2 new advanced journals, advanced immunology and advanced brain, and published the first papers in advanced computing and advanced oncology. As a reminder, our advanced portfolio is accelerating as a global top-tier brand across disciplines, with more than 30 journal titles and revenue of $70 million growing at strong double digits.

Also in the recent industry citation index released annually, 15 Wiley journals were ranked #1 in their respective categories, with 248 of our journals achieving top 10 rankings. Wiley now accounts for over 10% of all citations in the index. This is an important quality signal, and quality is what deepens our competitive moat.

On driving publishing efficiency and margin expansion, we increased our research adjusted EBITDA margin by 130 basis points to 29.6% through the addition of Emerald and cost savings initiatives. We now have 1,600 journals migrated to our research exchange publishing platform.

On leveraging our IP and relationships for AI and data analytics growth, our clinical outcome assessments growth engine is rapidly expanding. This portfolio grew from 6 million in fiscal '25 to 11 million last year, and we see a strong trajectory ahead. Q1 revenue rose by more than threefold, thanks to Wiley's leading differentiated position. As a reminder, clinical outcome assessments are peer-reviewed instruments that are used in clinical trials to measure the impact of treatment from the patient's perspective. They've been developed carefully, tested across patient groups and proven to measure what they claim to measure. Choosing the correct instrument early, licensing it properly and implementing it effectively can be the difference between a multimillion dollar trial that succeeds and one that stalls, and that makes them essential R&D infrastructure. This is where we come in. We own and license a broad and growing portfolio of these instruments across disease areas and alongside full implementation services.

An important milestone, as I mentioned, is that we launched our transformative spectral analysis APIs for the corporate and academic laboratory markets, delivering the industry's most trusted, gold standard chemical reference data directly into automated laboratory software pipelines. For corporate R&D labs, this will replace slow manual analysis with embedded real-time spectral intelligence. Said one industry newsletter, the launch of the spectral analysis API portfolio is the clearest signal yet of Wiley's evolution from a legacy publisher into a modern data and technology company.

Let's consider why the research engine remains robust. Publishing is the key metric of academic progress, shaping employment, promotions, prestige and grant acquisition. The need to publish continues to rise alongside global R&D investment and is now further accelerated by AI advancements.

Looking at research across the rest of the year, 6 reinforcing drivers continue to give us confidence. First, our publishing pipeline is robust, and our scale advantage is widening, with submissions outpacing an already strong market and research or productivity set to rise further with AI. Large-scale, high-quality publishers like Wiley have a structural advantage, and our Q1 KPIs say that is continuing. Second, we concluded a solid calendar 2026 renewal season with strong customer retention.

Third, Open Access growth continues to compound at double digits, driven by the must-have dynamics of publishing worldwide and our journal brand expansion. In fact, we closed July with record gold Open Access output. Fourth, Emerald is off to a fast start, giving us strong confidence in the combination going forward. Fifth, our clinical outcome assessments pipeline of pharma companies is multiplying. Our IQVIA go-to-market partnership is scaling and we continue to activate new in-demand instruments to further bolster our leadership position. Separately, our OpenEvidence partnership is deepening, with additional content now under agreement.

Finally, we're seeing nice and early momentum in audience monetization. As discussed, we are transitioning this business from traditional advertising to an audience analytics platform, underpinned by modern ad tech, AI-enabled product development and verified research professional audiences. The health care advertising market is large and expanding, and our edge is the combination we already hold, proprietary content, deep society relationships and an emerging corporate customer base in health care and the audiences that come with them. Our digital research content and platforms generate billions of user sessions each year. We recently rolled out new sophisticated ad tech for contextual targeting, along with improved outcomes reporting and agentic tools for audience engagement. The early results are promising with good growth in Q1 billings.

Now on to our AI and data analytics growth engine, the second turn of the flywheel. As a reminder, we took total AI revenue from $23 million in fiscal '24 to $40 million in fiscal '25 and $49 million in fiscal '26. Given our pipelines, we remain well on track for over $50 million in fiscal '27, and AI recurring revenue growing 2 to 3x over prior year. In Q1, we realized $14 million of AI revenue, ahead of the pace we need for our full year target. Importantly, the mix is shifting the way we want. Of the $14 million, $10.5 million is from model training and $3.5 million is recurring. As I mentioned, we've contracted a further $14 million of AI licensing revenue that will be realized across Q2 and Q3, with additional agreements in active discussion.

On the corporate side, we've expanded our customer base for subscription knowledge feeds, bringing us to 23 across 5 industry verticals: life sciences, health care, food and agriculture, materials and chemistry and financial services. A year ago, this was largely a life sciences story. While that continues to be a big focus for us, it's a lot broader than that now. Finally, our Nexus licensing service continues to add more society and publishing partners, bringing the total to 71.

As previously discussed, partnerships are foundational to our strategy. This quarter, we were invited to join the public private partnership supporting the U.S. Department of Energy's Genesis Mission alongside some of the world's largest AI innovators. The mission is a nationwide effort to put AI to work on the country's hardest science and technology problems. And we are the only scientific publisher at the table. Our role is substantive. We will make our research intelligence tools available to researchers across all DOE National Laboratories, provide thought leadership on how AI models are validated against scientific evidence and how scientific data is managed and help shape the consortium's foundational knowledge layer. This builds on decades of engagement with the DOE and other federal science agencies.

We became a founding data partner in CuspAI's materials foundry, a global network comprising over 45 organizations aimed at speeding up new materials discovery. The foundry focuses on semiconductors, clean energy and advanced manufacturing, where progress is limited by materials rather than engineering. Our contribution is the data layer. CuspAI has licensed access to Wiley's material science content to train the platform. This underscores how our content is being integrated into AI systems that will increasingly drive scientific discovery.

AI momentum remains broad-based across verticals, products and channels, and our pipeline is advancing rapidly across model training, commercial licensing and subscription knowledge feeds. Of note, model training is becoming a proven engine with both new and repeat customers. At the same time, corporate R&D demand is accelerating across chemistry, food and agriculture and other domains, while health care opportunities widen across large corporates and AI start-ups. And through our Nexus licensing service and our own publishing engine, the content and intelligence available to license keeps growing. We remain well on track with our full year AI growth targets. Beyond this, what we see forming is bigger than any 1 year. The world's most important AI systems are being built on trusted scientific knowledge, and Wiley is becoming a foundational supplier and partner in that economy.

As discussed in June, our position rests on a remarkably deep reservoir of proprietary data. In addition to published articles and journals, we have structured metadata and linked domains and validated research protocols and methods, how studies were designed, not just what they found. We have the peer review and editorial record behind that work and credibility accumulated over many decades. We have citation networks and reference graphs, effectively a map of how knowledge and one discipline draws on another. And we have relationships with both authors and institutions, who was researching what and where.

Wiley holds leading content positions and the disciplines that matter most in the AI economy, 150-plus therapeutic areas in life sciences and health care, 100-plus areas in chemistry and spectral data, 50-plus in engineering and material science, 45-plus in agriculture and food science topics, along with the leading crops disease database. And now with Emerald, a leadership position across all key areas of economics, business and finance. Our advantage isn't only breadth, it's depth where corporate R&D is tackling its most consequential problems and where the next breakthroughs will come from. This depth is now showing up as a widening set of use cases in markets. As a reminder, we are pursuing 3 organic growth pathways around AI and data analytics, database solutions, applied research intelligence and audience monetization, each drawing on our existing IP. What this slide shows is where those pathways are landing commercially today.

Our structured data is relevant across each, from dermatology instruments for clinical outcome assessments with IQVIA, to medical content at the point of care with OpenEvidence. We're working directly with decision-makers inside of corporations, institutions and government bodies, deploying our IP for LLM development, corporate AI applications and academic labs. We'll lay out our full road map at our fiscal '27 Investor Day scheduled for Thursday, March 11 at our headquarters in Hoboken, New Jersey. We hope to see you there.

A few words on our critical role in ensuring responsible AI. By grounding AI in evidence-based knowledge, Wiley helps close the trust gap in AI while enabling innovation that benefits many. This mission has made us an AI thought leader worldwide. Here's the distinction I draw. Most companies approach responsible AI from the model outward, guardrails and policies bolted on to the technology. We start a layer deeper. Responsible AI depends on the quality of the knowledge that fuels it, and that's what Wiley has spent 2 centuries building. You cannot make an unreliable model reliable with policy alone. You have to fix what it learns from. And we are protecting the scientific record as AI use surges a most scholars.

Our approach rests on 4 commitments. One, human oversight. We ensure that judgment stays with people, not models, and that peer review remains a human endeavor. Two, trust and transparency. We protect intellectual property and set the integrity standards for how our content is used. Three, safety and fairness. We ensure it through strict data privacy and active bias mitigation. And four, good governance. We ensure clear internal controls and constructive engagement on smart regulation rather than resistance to it.

The market is asking for exactly this. We answered it in October with comprehensive AI guidelines for authors, editors and peer reviewers, covering disclosure, reproducibility and confidentiality. We've built citation and attribution requirements directly into our technical integrations, including our work with Anthropic. And we've stood up AI oversight across the company. All of this speaks to the central role of the research publisher in enabling the global scientific ecosystem and ensuring the quality and impact of high stakes AI models.

The last point I'd make is about posture. We are setting the agenda here, not reacting to it. We were the only publishing sponsor at the United Nations AI for Good Global Summit in Geneva this year. And that leadership is commercially load-bearing. When the Department of Energy or CuspAI chooses a data foundation, the standards behind the content are part of what they are buying. Trust is the product.

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

Thank you, Matt, and hello, everyone. I'll take you through the 2 segments, then cost and capital allocation, and close with the outlook.

Most of the year-over-year decline in the quarter sits in the prior year AI licensing comparison with the balance in learning during its seasonally lightest period. Underneath that, the operating base strengthened. Research margin expanded 130 basis points. Corporate expenses on an adjusted EBITDA basis came down 19% and free cash flow improved by $30 million. Those are the trends that carry the full year, and our outlook is unchanged.

On to research. Total revenue was $293 million, up 4%. Research publishing grew 12%, with $13 million from Emerald and the balance from Open Access growth and AI licensing. Excluding Emerald, publishing grew about 6%. Research solutions declined 30%, almost entirely on the prior year AI licensing comparison, with softer publishing services and recruiting partly offset by growth in advertising. Adjusted EBITDA was $87 million, up 9%, with margin up 130 basis points to 29.6%. Emerald added $5 million at a margin above the segment average. Most of the research margin expansion was organic cost savings after continued investment in the advanced journal portfolio and in clinical outcome assessments. Emerald integration is tracking ahead of plan, with cost synergy capture underway and early AI licensing interest building.

Now to learning, where revenue was $93 million, down 20%. Academic was $45 million, down 20%, with $8 million of prior year AI licensing and declines in print, offsetting growth in digital content and courseware. Inclusive Access, where the cost of digital course content is added to a student's tuition and fees, remains a catalyst for us and the industry. Professional was $48 million, down 20%, reflecting $5 million of prior year AI licensing, softer consumer demand in retail and softer corporate demand and assessments. In retail, industry unit sales declined at the same rate as ours, so that pressure is market-wide.

Excluding the prior year AI comparison, the segment declined just under 10%. Adjusted EBITDA was $14 million, with margin at 15.1% against 27.4%, reflecting revenue decline and mix. The first quarter carries our most difficult comparison of the year. Retail channel inventories normalize as we move through it. Courseware and Inclusive Access continue to grow, and we expect assessments to improve. Meanwhile, we are concentrating the editorial list on titles that earn their place, pushing harder on digital and Inclusive Access and taking cost out to protect margin.

Cost and operating efficiency remain a central priority. Corporate expenses on an adjusted EBITDA basis were $33 million in the quarter, down $8 million or 19%, building on the reduction from $166 million in fiscal '25 to $143 million in fiscal '26. Technology restructuring drove most of that, and some of the quarter also reflects timing of spend.

Three work streams sit behind this trajectory. First, technology transformation, where we are reducing legacy and maintenance costs and shifting toward product and innovation. In the quarter, that meant retiring tech debt, consolidating facilities and building out our partnership with Virtusa. Second, the corporate cost base, where restructuring continues to take cost out of shared services, led by technology and global operations. And third, AI productivity, where deployments in legal, marketing and content operations are advancing. Those savings are ahead of us rather than in this quarter's numbers, and we're scoping the next wave against run rate targets.

A quick update on capital allocation and our financial position. First, organic investment. CapEx was $14 million against $15 million a year ago, with the mix shifting toward growth and product development. We expect CapEx of approximately $80 million this year, up from $65 million.

Second, inorganic investment, we acquired Emerald Publishing in the quarter for approximately $450 million net in cash at roughly 7x adjusted EBITDA, including targeted cost synergies. Our expectations are unchanged from June, with EPS accretion in year 1, the bulk of the cost synergies in year 2 and the full $30 million by year 3. We also expect revenue synergies from geographic expansion, cross-selling and licensing.

Third, portfolio optimization. We continue to manage our portfolio for growth and margin fit. And fourth, return to shareholders. We raised the dividend for the 33rd consecutive year and returned $33 million through dividends and repurchases.

On the financial position, free cash flow was a use of $70 million against a use of $100 million a year ago. The improvement is working capital timing, principally collections of late fourth quarter renewal signings, partly offset by $14 million of higher restructuring and acquisition-related payments. Free cash flow is historically use through the first half given the timing of annual journal subscriptions and our full year outlook of $205 million is on track. Net debt to EBITDA on a trailing 12-month basis was 2.7x against 1.9x a year ago, reflecting the June 1 Emerald acquisition. Including Emerald synergies, pro forma leverage is 2.1x, within our range of 1.5 to 2.5x.

Let me close with our outlook, which we are reaffirming in full. Organic revenue growth of low to mid-single digits with research at mid-single digits. Organic growth excludes the expected $78 million Emerald contribution over 11 months of fiscal '27. Emerald is included in all other metrics. Adjusted EBITDA margin of 26.5% to 27.5%, up from 26.2% in fiscal '26 and 24% in fiscal '25. Adjusted EPS of $4.60 to $5.05, up from $4.19, including roughly $0.10 from Emerald. And free cash flow of $205 million, up from $195 million, with Emerald dilutive by $15 million in year 1 before turning accretive in fiscal '28.

Our investment priorities are unchanged. Journal and brand expansion, clinical outcome assessments, structured data and research intelligence platforms and audience analytics. We are integrating Emerald, rolling out the research exchange platform across the rest of our journal base and standing up our AI center of excellence to take cost and time out of our processes, all while moving technology spend from maintenance to product. We are investing in compounding growth and taking cost out at the same time. Every dollar competes for the highest return, and that discipline is what lets us fund the opportunity in front of us while driving return on invested capital higher.

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

Thank you, Craig. To summarize, we delivered the quarter we planned for, absorbing a known $29 million AI comparison headwind while our growth engines kept building. We're well on track to deliver mid-single-digit growth in research with strong publishing demand and output, share gains and society wins. Long-term trends remain favorable. We're also on track for our AI revenue goals, with $14 million realized through Q1 and a strong pipeline ahead. Our growth vectors are materializing. We are fast tracking operational excellence with the full launch of the research exchange platform, our tech transformation programs and our AI Center of Excellence. We're driving cost improvement and continuous margin expansion while freeing up capacity to invest. And we remain relentlessly focused on disciplined investment and capital allocation to drive higher ROIC and recurring revenue growth while rewarding shareholders.

Before I open it up to questions, a quick reminder to mark your calendars for our fiscal '27 Investor Day on March 11. The program is expected to run from 9:30 a.m. to 12:30 p.m. As always, I want to thank our global colleagues for all they do to show that a company can do good and do well at the same time. And finally, 2027 marks Wiley's 220th year of continuous change in innovation. We intend to be known not only as one of the oldest companies in the U.S., but one of its most relevant.

Let's open the line to questions.

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

This is Will on for Dan. Organic revenue growth in research excluding AI revenue and Emerald was 5%. How does that compare to peers in the market overall? And how does that enhance your confidence in your mid-single-digit growth outlook for the business, both in fiscal year '27 and beyond?

Yes. Let me begin, and then I'll turn it over to Craig, who can drill in. This is Matt. We're growing along the same lines with the leaders in the market. And the confidence is really driven by many of the leading indicators that I talked about. Our KPIs are quite strong. This is a seasonally slow quarter for that business because it tends to be back-ended towards Q3 and Q4. But we have confidence in the full year guidance because our signals are all quite strong.

Craig, do you want to add any additional color to that?

Yes. I think we have previously commented that we see the long-term growth rate of the market in the 3% to 4% range. You quoted a number a little bit higher and we're seeing similar trends on that. We're particularly excited about how the momentum build as we go throughout the year. We see some growth coming in our calendar year renewals centered around the American Society of Mechanical Engineering ad that we had. Author paid Open Access continues to be supported with strong volume growth. The investments we've been making behind certain areas like advanced brand and geographic expansion are really starting to pay some dividends in the way that we're looking at the business. So we feel very comfortable about keeping in line with the market averages.

That's very helpful. And then looking at Q2, remind us how much AI-related revenue you generated last year in Q2 and then what your expectations are for this quarter?

Yes, let me take that one. So for quarter 2 last year, we had a pretty significant -- it started off in the year in a pretty significant number, as you recall, from the $29 million compare. As we went into the second quarter, it kind of balanced out and it was a little bit more balanced around $6 million or so in the second quarter and repeated a similar number in the third and fourth quarter.

We've previously highlighted that these types of deals are lumpy. Matt highlighted, we've done $14 million in the fourth quarter, and we've already contracted for another $14 million over the next 2 quarters. So we see pretty similar phasing. You can continue to expect some variability or lumpiness as we go. But right now, we see continued phasing in line with what we saw in the prior year.

Yes. And I would comment -- this is Matt. As you think about the AI revenues, and I commented on this in my remarks, think about it in terms of growing a more continuous revenue stream in parallel with these licensing arrangements, which tend to be lumpy. And this is still a business. This AI licensing is still a business that's evolving. It's still early as our clients learn how to use AI as effectively as they can in their business.

Yes. And then just as a follow-on to that, overall, how should we think about the cadence of top line growth, margin expansion, EPS for the year?

Yes. One characteristic that's true of our business is Q1 tends to be one of our seasonally lighter quarters and we see momentum build as we go throughout the year. We see a very similar pattern emerging ahead of us here. So that would be one kind of indicator for where we think we're going. As you saw, we're reaffirming full year guidance, and so that's consistent with seasonally soft first quarter picking up in quarter 2, 3 and 4 and delivering on the commitments that we've shared with you in the earnings presentation.

Yes, and the drivers are strong growth on our foundational research publishing business. And then the newer growth engines in AI data analytics starting to get traction later in the year in the third and fourth quarters, which will give us momentum into the next fiscal. While underneath that is continuous margin improvement. That's not a onetime event. It's just as you've seen over the last couple of years, we've demonstrated that we can do this. We can take that kind of margin improvement and share with shareholders and also redeploy it into driving growth.

Can you talk about what you've seen so far at Emerald, I know it's only been 2 months since the acquisition, but just any surprises, good, bad or otherwise.

Yes. Again, I'll begin and turn it over to Craig if he wants to add some color. So no surprises. It's -- as we talked about when we introduced the concept of Emerald, it's a really good fit with our journal portfolio. I think what we're seeing is only reinforcing that logic. It's a very well-run company with talented people and culturally very similar to us. And as I've mentioned in my remarks, if anything -- again, it's early, it's 2, 3 months into this, but the signals are running all green. And quite frankly, we're ahead of the pace that we initially established. So we're very encouraged and view it as a very strong strategic move with actually terrific financial characteristics.

Yes. I would just add to Matt's comments. Off to a good start. We like what we see both in the stability and the strength of the customer and the revenue base. The working relationship between our 2 teams has been very positive as we've come together and become one company.

We've highlighted from a synergies perspective, modest expectations for the first year, the bulk of the synergies emerging in year 2 and achieving the full run rate of synergies of $30 million by year 3. We're very much on track for that, running slightly ahead in the first year. I wouldn't say materially at this point. So we're just going to keep our eyes on it. But every indicator we have is that we're on or ahead of schedule right now and very pleased with the fit and the combination of Emerald with Wiley.

Can you also provide a little deeper dive into some of the recent partnerships you've announced starting with IQVIA, is that generating meaningful revenue for you at this stage? And yes, how are things progressing? What's a reasonable expectation?

Yes. IQVIA is really terrific example of how we talk about a partnership network, enabling us to punch above our weight. Because IQVIA has a very big presence in the drug evaluation business, clinical trials. And we have, as we've talked about, a very important tool in our clinical outcome assessments, peer-reviewed tools that are used in these clinical trials. And so we are able to have 2 and 2 equal 5 because IQVIA as a partner has an established presence, established distribution, and we have this critical instrument. So it's a -- it's not just a licensing deal. It's really a strategic partnership.

And it's really a model of the way we're going to build the AI and data analytics business. We see partnering as -- culturally, we're very good at it. It comes from our society business where we -- with the largest society publisher in the world, we have terrific long-term relationships, American [indiscernible] signed 30 years of dealing with these learned societies. So we can take that partnering DNA and use it to basically energize and accelerate our entry into AI and data analytics.

Craig, do you want to comment on the financial side of this? It was in my remarks about how that business has been growing. The clinical outcome assessments.

Yes. I mean, we've talked a little bit about this in the past, but clinical outcome assessments is one of those kind of hidden gems, the diamonds in the rough, and grew from hundreds of thousand dollars to $11 million last year. And we continue just to see great continued growth and potential this year that shows this year in line with our expectations, another great year of growth for clinical outcome assessment. I think we're on the front end of something really big here, and we're excited about where that's headed.

Yes. There also is a great illustration of what we believe that we have hidden gems within this research corpus we have that would go way beyond just publishing content. And internally, we have a pipeline of ideas similar to clinical outcome assessments that we're now developing, experimenting with. So we can create similar new business lines.

And then similar question, how are things progressing with OpenEvidence as well as Anthropic, AWS and others. Individually or collectively, how should we think about the revenue models and what those agreements could look like from a financial perspective for '27 and the next few years?

Yes, thanks for asking that. We're really pleased with the early stages of the work we're doing together with OpenEvidence. Just as a reminder, that was an agreement we struck which was $15 million over 5 years. It's a modest add for where we're working on, but a great example of what we're doing with commercial licensing in areas that we can here.

I would say we continue to work and develop and see promise of that expanding, but still early days, but on track with what we want to do and a great partnership that we've established.

Yes. And we have added content as we built on our initial relationship. And another example of leveraging partnerships because OpenEvidence has a very strong footprint into the U.S. physician market. And it's a terrific opportunity for us to partner to again use our valuable content to create new revenue streams for us.

And then just one more for me. Looking at the learning business. First, what was the impact of Amazon reducing inventories this quarter? When do we cycle against that? And how much longer do you expect that to be a headwind?

And then a follow-up, excluding print and digital books, what was the organic growth rate for the remaining businesses and learning?

Yes. I'm going to give you some top lines on this. We don't go into that level of detail in terms of our public data here. But what I can tell you about learning is we're at where we expected with learning. And in particular, if you kind of break down the learning business, it's really 2 major segments: academic, professional. We see academic being very healthy, driven by things like digital content, courseware, Inclusive Access and continued growth potential and opportunity.

In the professional space, it's really made up of 2 business areas, one around trade publishing or the professional books business and the other, assessments. And it's in the trade publishing area that we -- as we call it internal, where we saw last year, the significant reduction in inventory on hand through the Amazon channel. That had an impact on our business. And if you recall, it really impacted us in the latter parts of August. So we're really in the toughest compare and a year-over-year perspective on a change that we saw happening really at the end of August last year. And there has been some softness in demand and sell-through as we call it, in some of the titles and the areas that we're seeing here. We're still working and monitoring and thinking about our title positioning and managing through that part. The other part that I managed -- I talked about was assessments. We see steadier performance here. It was a little bit light in Q1, but we definitely see some improved performance potential as we're moving through the year on that.

So stepping back, I would say, normalizing trends in trade publishing against these inventory on hand impacts that we saw in August improved performance and assessments as we continue to modify the business model there. And in particular, as we kind of move forward here, I think on the opposite side, the Inclusive Access and [indiscernible] books are going to continue to drive growth for us as we move through the year. So improving trends to look forward. I would describe them as normalizing against the prior year impacts. Pretty much where we expected they would be, and we continue to manage that business with a lot of strong talent and discipline looking into it.

This concludes the Q&A. I will now turn the call back to Mr. Kissner for closing remarks.

Well, thank you again for your continued support and confidence as we work hard to build the next chapter of Wiley opening the door to a new -- new and exciting businesses around our terrific research franchise. We will update you again in December. And again, note that March date because I know that we definitely owe you a more detailed view of our plans for the future.

With that, thanks very much for joining us.

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

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.