Good morning, my name is Rob, and I will be your conference operator today. At this time I would like to welcome everyone to the Wiley’s First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions]. Thank you, Brian Campbell, Wiley’s Vice President of Investor Relations. You may begin your conference.

Thank you, and hello, everyone. I’m joined by Brian Napack, Wiley’s President and CEO; and Christina Van Tassell, Executive Vice President and CFO. A few reminders to start. The call is being recorded and may include forward-looking statements. You shouldn’t rely on these statements as actual results may differ materially and are subject to factors discussed in our SEC filings. The company does not undertake any obligations to update or revise forward-looking statements to reflect subsequent events or circumstances. 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. 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 the impact of currency. After the call, a copy of the presentation and a transcript and playback of the webcast will be available on our Investor Relations web page at investors.wiley.com. I’ll now turn the call over to Brian Napack.

Good morning everyone, and welcome to Wiley’s Q1 earnings call. Before I get to our Q1 results, I want to touch on a couple of foundational topics. Wiley like all companies is operating today in an uncertain global economy and continues to pose a variety of interesting and novel challenges. Despite this, our underlying markets remain strong and opportunity rich, and we are successfully executing our focus strategy. The evidence is in our current momentum. Wiley performs well through challenging economic cycles and periods of disruption. It does this for two primary reasons. First, scientific research is indispensable to economic progress and thus global spending on it continues through the cycles. Second, higher education enrollment tends to be countercyclical as workers react to soft labor markets by investing in themselves and their futures. Because of these factors, Wiley can take the long view and it is benefiting from this today. Our core strengths serve us well in good times and bad. These strengths include, must have brands and an ability to create and distribute world class content and tech-enabled services, all of which move the needle for researchers, learners and leaders who use new knowledge and skills to achieve their objectives. And all of this is supported by consistently strong Wiley balance sheet and cash flow. At Wiley we’re grounded in 215 years of serving the demand for scientific research and career connected education, we continue to use this experience to find new ways to meet the world’s ever increasing need for knowledge and knowledge services. Today’s Wiley is a digital company with 83% of our revenue coming from digital products, and 58% of our revenue is recurring. Over the past few years, we’ve found renewed growth by investing in transformative approaches to research and education that drive real world…

Thank you, Brian, and good morning everyone. As always I’ll start with Research. Research was up 4% this quarter or 2% organically. As we discussed in June, we changed our segment reporting this quarter to Research Publishing and Research Solutions. Solutions replaces the Research platform reporting line and includes platforms, society services, and corporate solutions. Research Publishing revenue rose 2% this quarter driven by continued strong growth in open access publishing. Demand to publish remains robust. Article submissions were up 7%, although our output was down year-over-year due to variances in publication timing. For the full year, we expect steady growth in output to resume. Our Hindawi acquisition continues to perform of our own high expectations with rapid publishing growth and exceptional margins. As a reminder, Hindawi solidified our leadership position in open research with its fast growing collection of 200 plus journals and a highly efficient publishing platform. Research Solutions rose 17% in the quarter driven by recent acquisitions, namely J&J Editorial, Knowledge Unlatched, and eJournalPress, as well as organic growth from platform services for societies and career centers for R&D centric companies. Adjusted EBITDA in research declined 9% due to investments in both Publishing and Solutions. Higher employment costs and increased T&E expense compared to the prior year COVID environment. For the remainder of the year, we see growth in article output due to strong demand to publish and continued progress in expanding our client relationships and solutions. All that to say is, we remain fully confident in our full year revenue and EBITDA outlook. Now onto APL, which serves the university and corporate markets with content and courseware. Revenue in this segment was down 1% in the seasonally small quarter with professional learning flat and education publishing down 2%. Wiley is delivering double-digit growth in corporate training…

Thank you, Christina. I want to talk now about the execution commitments we made for fiscal 2023 and how we’re doing against them at the end of Q1. You recall that we laid out eight commitments at the start of the year foreign research and foreign education. But before I go over these, I want to spend a few moments on a recent development in U.S. science research policy. Two weeks ago, the U.S. Office of Science and Technology Policy, which is a department within the White House issued guidance that calls for U.S. Federal agencies to ensure that all new federally funded research is open and freely available starting in 2026, if fully enacted the implication would be that all U.S. federally funded research published by Wiley and others from that day forward would need to reside outside of a subscription payoff. While we were surprised by the timing of this statement and are still evaluating its implications, we are not at all unprepared, simply stated the new guidance is fully aligned with our stated strategy and mission, and is supported by the strong momentum that we have in open Research Publishing. We’ve been working for years with the OSTP and other stakeholders around the world to support the transition, to open research. As some of you may know, we saw similar guidance in Europe, a while back and reacted affirmatively. And today we are greatly benefiting by executing against our shared objective of unlocking access to scientific research and improving the efficiency of peer review and publication. Wiley has led this global transition to OA through our robust OA publishing program and our groundbreaking transformational agreements. We expanded our OA leadership position with the acquisition of Hindawi in fiscal 2021 and are further expanding it with the acceleration…

[Operator Instructions] Your first question comes from line of Daniel Moore from CJS Securities. Your line is open.

Thank you. And thank you and good morning, Brian and Christina. Thanks for taking the questions and for all the color. Obviously a lot of moving parts this quarter, so greatly appreciate it. And I’ll probably ask a few extra, because there’s a few topics to discuss, but starting with research, which is, it remains very solid and robust 4% growth X currency kind of low single-digit in publishing and strong double in solutions. Is that generally how you see the remainder of the year playing out?

Yes. Dan. Well, first of all, thanks for the questions. It’s always good to have you on the call. We are, we feel very good about where we stand in Research Publishing and we are sticking to our belief that that we are in a cycle where we are seeing positive momentum in both Research Publishing and in our OA and in our partner solutions. So from the perspective of Research Publishing, I would say that you can continue to see our growth as we have stated grow significantly in the area of submissions we’re seeing good upper single-digit growth in the submissions category now, and that leads to an even higher level now of acceptances, which is what you want to see the submissions turn into acceptances. And that’s at an above 10% level now, which is terrific. And that should turn translate into our publishing volume and as you know our publishing volume leads to our revenue. So, we don’t provide sub-segment guidance as you know, but we’re feeling very good about the outlook for the balance of the year in Research Publishing. From a Research Solutions perspective, the momentum is very good. We’re signing up a significant number of new clients. And as I stated earlier, in my remarks, we’re seeing really very good uptake on our effort to up sell and cross sell these essential solutions in those areas. So yes, we’re feeling really good about the momentum that we’re seeing across research and we expect that to continue if not accelerate for the balance of the year.

Super helpful switch gears to ed services, specifically start with University Services. Just talk a little bit about maybe the incremental headwinds, and I think you mentioned you’d lowered tuition share at a certain partners any color on, what percentage of your programs that covers and it, would you expect that to extend to other partners as well?

Yes. So, we have to think about this business in two ways. One is as a long-term opportunity; and two as the component of our value proposition as we deliver it to our clients. And so if we think about the long-term, we continue to feel very good about the potential of our University Services businesses as university’s transition to compete in a very competitive world and to deliver on the increasing demand for career-connected education and for online education. So, we feel really good as a gold standard provider that we’re going to be there for our university partners and continue to help them and that will translate into continued growth and profitability for the segment. As we think about, so from a long-term perspective, we feel very good. As we think about the shorter term or secular or cyclical issues going on in that business, we have three basic characteristics. The first one is the overall enrollment environment. And what we’re seeing in enrollment is that at this stage in the cycle we’ve seen declines across all enrollment of all universities. And that has been significant over the last couple of years, you saw 5% decline followed by a 4% decline. This fall, we’re starting to see enrollment decline that is actually ameliorated to the point where it’s just down a little bit, maybe 1% for the year. And so as we look ahead, we should benefit from that in our programs, which tend to be aligned with the most in demand categories of degrees and or certifications going forward. So, the first thing we have to think about is the generally countercyclical behavior of enrollment, and we feel pretty good about the future, although we still need to see how the fall plays out and how that…

And no significant changes, obviously in the long-term margin targets for that portion of your business as well?

Hey, Dan, it’s Christina, nice to speak to you. Yes in terms of the University Services margin targets we don’t specifically talk about sub-segment level, but from an ed services margin we’re actively managing to adapt to the outlook, as we talked about with our – with enrollment pressures with our renegotiations. And we’re really going to look at how we adapt to make sure that our margin profile stays on point.

Yes. And I’ll just add to that. We have over time talked about a goal of 15%, and we’re comfortable with that. As Christina pointed out, we’re not breaking out the individual sub-segment margins, but we’ll – we feel very good that the business can run at a nice profitable creative level for Wiley. And we are actively working both on the revenue side and the expense side to ensure that that’s going to happen.

Yes. I wouldn’t use Q1 as an indication of full year as well. So that’s another thing.

Of course I misspoke them at the segment margin of mid teens. Thank you. Is the 35% expected – sorry, $35 million expected run rate savings from restructuring? Forgive my short-term memory, was that contemplated when you gave the initial guide? Or does that represent more recent actions kind of reflecting some of these incremental short-term macro headwinds?

That was the original plan that we discussed with you in Q4 and we’re executing on that plan.

Okay. And last topic and I’ll jump out, but Brian really appreciate the color as it relates to the administration’s recent announcement. So just to make sure I heard correctly less than 10% of journal publics of articles published have any kind of government backed or funding today. But I hear that correctly, number one. And number two, sounds like this is just more of a continuation of evolution of your driving the ship toward open access. But any impact that you see at all on your kind of longer term growth trajectory and I guess, were you at all surprised by the actions taken any additional color on those would be really helpful?

Yes. Definitely we spoke to this very well in the script, and I won’t – I’ll try not to repeat myself, but yes to answer your very specific question, less than 10% of our articles are funded by U.S. federal departments that are impacted by this policy. On underline that a third of those are already published OA and that’s rising precipitously as it is across all of our business. To answer your second and higher level question, we don’t affect expect this policy to have a material impact on the trajectory or the financial health of Wiley. Quite the contrary this is completely in line with everything that we’ve been talking about on these earnings calls for three or four years now. We believe in a future of scientific research where research is available freely and openly to the world. That’s a great thing. We also believe that we’re going to be in a mixed model environment for a long time to come perhaps forever, because funding isn’t distributed evenly. And some disciplines simply don’t have the funding to pay for the publication. And so we expect subscriptions to be a significant part of our future. To answer your other question this is not all unexpected – at all unexpected. In fact, this is completely in line with discussions we’ve been having specifically with the OSTP. Parenthetically say, I’ve personally been down at the OSTP having conversations with them a couple years ago. And it’s the continuation of what we view as an orderly transition to this new world of open research. We’ve been actively and aggressively signing up transitional agreement, excuse me, transformational agreement customers. It started in Europe, it’s continuing in the U.S. We signed up – we’ve signed up over 41 major customers. Over 18 of…

All right. I apologize for the repetitive nature of that question, but I just thought it would be…

No, Dan look, it’s a really important question. We’re – it’s a really important question. We understand, we appreciate it. We’re happy to talk about it at whatever level of depth you want to.

Very good. Thank you again for the color.

[Operator Instructions] And there are no further questions at this time, Mr. Brian Napack, I turn the call back over to you for some closing remarks.

All right. Well, I want to thank everybody for joining us on the call today. And we will look forward to sharing Q2 results in December. Thanks again and have a great day.

This concludes today’s conference call. Thank you for your participation. You may now disconnect.