Good morning and welcome to Wiley's Q3 Fiscal 2024 Earnings Call. As a reminder, this conference is being recorded. At this time, I'd like to introduce Wiley's, Vice President of Investor Relations, Brian Campbell. Please go ahead.

Thank you and welcome everyone. With me today are Matt Kissner, Wiley's Interim President and CEO; Christina Van Tassell, Executive Vice President and CFO; and Jay Flynn, Executive Vice President and General Manager of Research and Learning. Note that our comments and responses to your questions reflect management's views as of today and will include forward-looking statements. Actual results may differ materially from those statements. The company does not undertake any obligation to update them to reflect subsequent events or circumstances. Also Wiley provide non-GAAP measures as a supplement to evaluate underlying operating profitability and performance trends. These measures do not have standardized meanings prescribed by U.S. GAAP and therefore, may not be comparable to similar measures used by other companies nor should they be viewed as alternatives to measures under GAAP. Unless otherwise noted, we will refer to non-GAAP metrics on the call and variances are on a year-over-year basis and will exclude held-for-sale assets and the impact of currency. Additional information is included in our filings with the SEC. A copy of this presentation and transcript will be available on our Investor Relations web page at investors.wiley.com. I'll now turn the call over to Matt Kissner.

Thank you, Brian and hello everyone. I am fighting a bit of a cold this morning, so if I sound muted, you'll understand why. Let me start by saying we're seeing marked improvement as we enter the home stretch of this transition year. I'll talk about our overall progress to-date, review our third quarter performance, and recap our recent investor event. I'll also provide some additional color on how we view the evolving AI opportunity. Christina will walk through our VCP progress, segment performance, and full year outlook. We'll then open it up for questions and Jay will be joining us as well. 2024 marks Wiley's 217th year. As one of America's most enduring companies, Wiley is enabling the creation and curation of new knowledge and its application in critical areas of the knowledge economy in science, technology, and engineering and business, economics, and finance. We are as relevant as ever. Let's turn to our progress to-date. We have moved decisively to improve the organization, divest non-core assets, and right-size Wiley for future success. We've now announced the sale of two of our three divestitures and closed on one of them. Our goal of course is to free ourselves of these non-core assets to focus on our profitable and cash generative core where we have clear competitive advantage, operating leverage, and growth opportunities. We've made very good progress on our $130 million cost savings program with 60% of it action to-date. We've moved more aggressively on it than originally planned, resulting in higher in-year savings, which Christina will talk to. Learning continues to outperform expectations and positive signs are emerging in Research with Publishing returning to growth this quarter and leading indicators favorable. Overall, we now expect full year revenue to be in the mid- to high range of guidance.…

Thank you, Matt, and hello everyone. We're closing in on the end of what has been a demanding, but pivotal year, and I couldn't be prouder of how our global colleagues have responded to the changes and risen to the challenges. I feel very good about the progress we've made so far. Let's start with our value creation plan. Over the past six months, we reorganized the businesses into one go-to-market Research and Learning team under Jay and consolidated functional areas. We are pleased for example with how the marketing reorg has improved our technical capabilities and simplified our focus, attracting more authors and submissions as evident in our 13% submissions growth year-to-date. As Matt noted, we've closed on the sale of University Services to academic partnerships and announced the sale of Wiley Edge to Inspire [ph] Capital. We expect to close the Edge transaction in Q1. The remaining divestiture across knowledge is progressing, although the transaction is expected to be immaterial. We're moving aggressively on our goals to focus and optimize. As you may recall, our multiyear run rate savings target is $130 million by fiscal '26. We've accelerated our actions and now expect to realize more in-year savings than planned, $45 million, up from the $30 million we discussed last quarter. This means we've now actioned 60% or $80 million of the $130 million goal. The remainder is expected to be largely actioned in fiscal '25. The three key areas of our multiyear savings plan include: Corporate savings and eliminating costs given our more focused portfolio; optimization with savings coming from our streamlined org structure, consolidated functions, labor arbitrage and reduced real estate footprint; and technology savings, as we simplify our platforms to retire legacy systems and reduce hosting costs. As discussed in January, we expect half of…

Thank you, Christina. Let me recap some personal observations I've had so far. Wiley is a terrific company. Yes, we're coming out of a difficult period, but refocusing on our core makes us a stronger, more profitable company and presents a very rich set of opportunities to build on. Our businesses are fundamentally strong, built on long-term relationships with research institutions, academic societies and R&D-driven corporations. We have a unique right to win in Research, driven by a wide moat, built around the enduring draw of our journal brands and platforms and a strong position in learning built on our content, library and franchises. Our markets are healthy. Global R&D spend is ever increasing, as is the demand for new knowledge in the verticals we serve. Very importantly, the name Wiley means something special to our customers. It's why we're trusted by the most prestigious universities and societies in the world, Nobel Prize-winning authors and major pharmaceutical companies. We have an absolutely terrific team. Our global colleagues are reinvigorated by our move to a simpler, more confident Wiley and are empowered now to identify incremental growth opportunities and better ways of working. I recently returned from India, where we have a publishing operation and Sri Lanka, where we have a world-class tech development and IT center. As with my November visit to our European offices, I find our culture to be reenergized by our increased focus and momentum. And finally, what we do is good for the world. This is not a slogan. We are actively contributing to major scientific and economic progress as well as the everyday progress of the individual. This mission energizes Wiley colleagues across the globe. Let me quickly summarize the key takeaways. We're pleased with the improvement and underlying momentum we're seeing in Research and…

[Operator Instructions] And your question comes from the line of Dan Moore with CJS Securities. Your line is open.

Hi. Good morning. It's Pete Lukas for Dan today. First congratulations on the progress made in the quarter. And just wanted to start with a question regarding Hindawi. What level of recovery or profitability is embedded in your fiscal 2025 goal of the 23% to 24% EBITDA margins?

Hi, Pete, it's Matt. I'm going to ask Christina to respond.

Sure. Hi, Pete nice to speak to you, again. So we -- as we've said before, our Hindawi recovery is a bit slower than expected, but we are expecting some future improvement in 2026 and beyond. And I don't know, if you want to go into some detail Jay on the --

Yeah, I'm happy to. It's Jay Flynn. So we're clearly anticipating progress in 2025, 2026 on Hindawi. As we've said before, we expect growth rates there on the top line to mirror what we see in the rest of our Gold Open Access portfolio. And the margins there will reflect generally speaking the margins in our journal operations. So we haven't broken that out specifically. As a reminder, this is not a -- it's less than 5% of total Research revenue. So, we're not breaking that out at that level.

Perfect. And then you touched on it at the end, but one part of your recent Investor Day that maybe didn't get enough attention is a significant improvement in free cash flow you're targeting with expected to jump from $100 million to $200 million from 2024 to 2026. Can you just give us a little bit more detail and kind of maybe walk us through the key assumptions around the goals and what are the biggest risks in your view to achieving those goals?

Sure. So, yes, we are seeing us returning to approximately $200 million by fiscal year 2026 in free cash flow. The primary drivers of that are obviously our improvement in our revenue recovery as well as the impact of our cost-out programs and that taking full effect. We've had some lower-than-expected cash flow needs for things like restructuring payments and interest has been higher than expected. And so those things will level out. The other thing that's going to impact our cash flow over the next two years is we're going to see next year in fiscal 2025, a spike in CapEx from about $100 million to $130 million and that's for some of the programs we're talking about in terms of revenue growth items as well as optimization items as I mentioned in my prepared remarks. The other thing to note there is that that will come back down in fiscal year 2026 as we continue to normal out. You can see a sort of a cash flow trajectory of $200 million that will be sort of our steady-state run rate going forward.

Very helpful. Thanks. And then you talked about leverage. I think you said down now to about 1.9 times. And I think it's predicted to fall to about 1.5 times by 2026. Given your current valuation and your expectations on the free cash flow as discussed, what are your -- how do you think about stock buybacks rather than continuing to delever the balance sheet at those levels?

Look we're always looking at our stock buyback program. It's something that we review with the Board annually and we're in a transition year right now. So, we're looking at all of our capital allocation in total as a portfolio. And so yes, we look at it every year. We continue to look at it. As I mentioned in our prepared remarks we're $5 million ahead in share repurchases this year versus prior year and we'll continue to keep that in mind going forward.

And then just the last one for me. I just want to make sure I caught it right from the prepared remarks. In terms of the cost savings, the $130 million 60% achieved to-date but then you see the bulk of that $50 million in 2025. So, not expecting a lot in 2026 and beyond is that correct?

Beyond the $130 million or within the $130 million? So, the $130 million is -- sorry go ahead just to clarify that.

Yes. No, it was just the cost savings overall was using your $130 million number that you mentioned.

Right. So, $130 million is our run rate savings by the end of 2026. And most of that will be -- most of the remaining $50 million. So, that's the 40% left will be actioned in fiscal year 2025 and that's -- and it's basically in three buckets the corporate savings, the business optimization, and the technology savings. Did that answer your question?

Yes. Very helpful. Thank you. And that’s it for me, so I'll jump back in the queue.

There are no further questions at this time. I will now turn the call back to Mr. Kissner for closing remarks.

Thank you, everyone. We appreciate the interest. Obviously, we're feeling good about the last quarter of the year. We've got a little bit of wind at our back and renewed and confidence and we're looking forward to our next update with you in June where we talk about our full year results. Thanks very much.

This concludes today's call. You may now disconnect.