Wiley’s strategic shift and AI opportunities: Wiley, the global publishing company, has concluded its fiscal 2024 restructuring program and is now focusing on expanding its presence in the artificial intelligence (AI) sector.
- The company completed its divestiture program, which involved selling three businesses and implementing layoffs, with the final two deals finalized on August 31, 2024.
- Wiley’s restructuring aims to create a more focused and profitable company, resulting in a 6% revenue increase to $390 million and a 22% rise in adjusted EBITDA to $73 million, excluding the impact of divested companies.
AI licensing deals drive growth: Wiley has successfully implemented significant AI content licensing agreements, contributing substantially to its first-quarter fiscal 2025 performance.
- A $23 million AI deal with an undisclosed large tech company was implemented in fiscal 2024.
- A second agreement worth $21 million was executed in the first quarter of fiscal 2025, generating $17 million in revenue for Wiley’s learning group.
- These AI deals were the primary factor behind the company’s 14% sales increase to $124 million in the first quarter of fiscal 2025.
Financial performance across segments: Wiley’s various business segments showed mixed results in the first quarter of fiscal 2025.
- Excluding the AI project, overall revenue decreased by 1%, with gains in academic courseware sales offset by a moderate decline in professional publishing.
- The research operating group, Wiley’s largest segment, saw a 3% increase in sales to $265 million, driven by growth in open access and institutional publishing.
Leadership transition and AI focus: Wiley’s new leadership is emphasizing the company’s commitment to pursuing AI opportunities and upgrading its technological capabilities.
- Matthew Kissner, appointed as Wiley’s president and CEO in July 2024, expressed satisfaction with the company’s start to the fiscal year and readiness to “move decisively on AI opportunities.”
- The AI licensing deals primarily involve backlist titles published at least three years ago, with tech companies showing particular interest in book content rather than research materials.
- Wiley has established a dedicated team to evaluate AI deals that align with the company’s licensing standards.
Protecting rights and compensating authors: Wiley is taking steps to ensure that its AI initiatives respect intellectual property rights and benefit content creators.
- The AI agreements are designed to protect all rights held by Wiley and its authors.
- Copyright holders whose works are licensed to tech companies are compensated according to contractual terms.
Investing in the future: Wiley is allocating significant resources to enhance its technological infrastructure and prepare for future AI opportunities.
- The company has increased its capital expenditure budget from $93 million in fiscal 2024 to $130 million for the current year.
- This increased budget will be used to accelerate upgrades to Wiley’s research publishing platform and modernize its general infrastructure.
Potential for AI in research publishing: While current AI deals focus on book content, there is potential for expansion into research materials.
- Kissner noted that tech companies’ interest could shift towards research content as they complete the development of their large language models and explore further applications.
Looking ahead: AI’s role in Wiley’s future: As Wiley positions itself at the intersection of publishing and technology, the company’s strategic embrace of AI licensing and infrastructure investment signals a transformative period for the traditional publishing industry.
- The success of Wiley’s AI initiatives could pave the way for new revenue streams and business models in academic and professional publishing.
- As AI technology evolves, Wiley’s proactive approach may allow it to maintain a competitive edge and shape the future of content distribution and consumption in the digital age.
Wiley Wraps Up Divestiture Program, Looks at AI Opportunities
