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 Third Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Wiley’s Vice President of Investor Relations, Brian Campbell. You may begin your conference.

Hello, everyone, A few reminders to start. The call is being recorded and may include forward-looking statements. You should not 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 obligation 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 numbers 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 on a year-over-year basis and will exclude the impact of currency. After the call, a copy of this presentation and playback of the webcast will be available on our Investor Relations web page. I will now turn the call over to Wiley’s President and CEO, Brian Napack.

Hello, everyone, and thanks for joining our Q3 earnings call. Our exceptional team delivered another quarter of solid revenue growth. We continue to track to our full year guidance for revenue, earnings and cash flow. Christina will talk more about the outlook later in our presentation. By the way, this is our first official Wiley earnings call together and it’s great to have Christina as a partner. She’s already having incredible impact on the company. I’ll start today’s call by saying we have, of course, been closely watching the devastating events in Ukraine. While we strongly condemned Russia’s invasion of Ukraine, and we call for a ceasefire and immediate return to peace. Further, we call for constructive engagement and dialogue to resolve this conflict and achieve lasting peace that serves all people. As a global company with significant operations across Europe, we have many colleagues, customers, partners and loved ones directly or indirectly affected by this conflict. Our hearts are with them and all the people of Ukraine. We pledged to support humanitarian efforts in Ukraine and across Europe. On a happier note, this year marks Wiley’s 215th anniversary. That’s 215 years of unlocking human potential by advancing research and education, which we have probably done through good times and bad to the Industrial Revolution, the digital revolution, globalization and numerous periods of disruption, including recently to global pandemics. We’re immensely proud to be an important part of the ongoing American Journey, and we’ll be celebrating this milestone throughout the year. The Wiley’s core, we’re in the knowledge business, the creation, the dissemination, and the application of new information and new knowledge. We do our work through some scientific research and career-connected education. And in a world where new information is being created faster than ever, with new discoveries, insights…

Thank you, Brian, and good morning, everyone. Before I begin, I just want to say how proud I’m to be part of Wiley. After only a few months of job, I’m struck by the team’s incredible strengths and talents and the collective passion for our mission and mission that changes lives for the better. As Brian noted, the team continues to deliver on our growth strategies, and we are driving solid year-to-date performance. On an enterprise level, we are tracking to our overall full year outlook with revenue up 8% to $1.54 billion or 5% organically, including research growth of 10%, APL 3%, and ed services of 16%. However, there is some variability to note, namely in education services, where rapid growth in corporate talent development is offsetting unforeseen slowdown in university services. Adjusted EBITDA is up 4% to $322 million. It is driven by year-to-date profit contribution from research and APL, offset by investments in both growth and business optimization initiatives. These initiatives, which were highlighted at the start of the year, including – include open access growth to meet global demand and scaling research partner solutions. In clear-connected education, we are investing to expand our corporate pipeline and existing relationships, as well as scaling our digital courseware offerings. We continue to embed operational excellence across this organization, and this will be a sharp focus of mine going forward. Getting back to our financial results. Adjusted EPS through nine months is up 4% to $3.09. As a reminder, Wiley’s adjusted EPS metrics excludes the impact of certain non-cash items directly related to acquisitions, particularly the amortization of acquired intangibles. As Brian noted, we don’t expect any material impact on inflation this year, and we’re currently assessing what potential impact there could be for fiscal 2023. Consistent cash generation continues…

Well, thank you very much, Christina. I’ll just summarize with the key takeaways for the quarter before opening it up to questions. Wiley’s third quarter results are consistent with our expectations and reflect the consistent execution of our well-established strategies. Good momentum in the research, publishing and solutions and notably in corporate products and services across Wiley. This momentum offset some countercyclical challenges in academic content and university services. Today, we are managing well through some very unusual geopolitical dynamics, economic conditions and post-COVID labor market changes. Our year-to-date performance continues to be solid with revenue, earnings and cash flow tracking the guidance which we are reaffirming. The company is on the verge of surpassing $2 billion in revenue for the first time in its long history. The long-term positive trends that define our markets continue. And while these growth strategies are tightly aligned with these trends, our recent acquisitions will serve to further strengthen our strategy from differentiate Wiley. As always, Wiley continues to drive real-world impact with everything we do, while continuing to advance our ESG and sustainability agendas. And finally, Wiley remains the foundationally strong company with consistent fast generation, very solid balance sheet, and a large recurring revenue base. Once again, our hearts and support are with those in Ukraine. And we hope for a rapid return to peace. I want to thank our wonderful colleagues around the world for their consistently great work and dedication in these very unusual and trying times. And I want to thank all of you for joining us. And I will now open the floor to any comments and questions.

[Operator Instructions] And we have your first question from the line of Daniel Moore from CJS Securities. Your line is open.

Thank you. Good morning, Brian. Good morning, Christina. Thanks for taking the questions. Start with research – thanks. Start with research if I could. Let’s maybe just talk about what’s driving the acceleration and growth in publishing platforms? And do we expect above trend growth to continue here in the near-term?

Yeah. We’re – as you know, we’re very excited about our opportunities on the solution side of that business. What’s driving it today is consistent growth across most of the segments. We’re seeing very, very good growth in corporate solutions. We are seeing good growth in across all of our platforms that we’re moving. And significantly, as you know, Dan, we have some acquisitions. And one of them Hindawi added significantly to our growth on a year-on-year comparison basis. Having said that, at Hindawi, we are seeing exceptional growth. We’re seeing fantastic growth in our submissions, and they have recently surpassed their prior record of articles published. So we’re feeling really good about that acquisition. So it’s pretty – we feel pretty good. I will also note that we’re seeing a really good rebound in the interests that corporate – the corporate market has in accessing our huge audience and that has driven our our corporate solutions business up significantly. So we’re very pleased about that, and all systems seeing go.

Helpful. Maybe switch gears to ed services, MThree clearly accelerating, talk about how much of that is sort of the market recovering from COVID-impacted comp period versus increased penetration in the marketplace as well as within your customer base?

Yeah. Well, look, in – it’s a great question. We’re super excited about the potential for us in corporate talent development and corporate training overall. We have seen – we have the right product at the right time for the right problem. The right problem in the world is an enormous gap that corporations see in their employee base with regard to their ability to fill seats with tech skills and digital business skills. And that’s what we do. As you know, we not only train the people, we find them, we make sure they’re successful, we nurture them through the first 18 months of their career, right? It’s a fantastic product with incredible results. As a result, we’re seeing – yes, we’re seeing penetration in – increased penetration in the marketplace, with great customer acquisition and a great pipeline. We’re seeing increasing demand from the clients that we have who see this solution that’s working for them, and they’re looking to apply it in new areas. We’re seeing it applied in new areas. So where we started with a pretty focused set of skill sets that we were training, acquiring talent and training for, we’re now seeing it across multiple job categories and multiple subject areas. We’ve seen an interest broadening in the economy from the core verticals that we were serving. So it is not post-COVID. We know we had an enormous talent gap going into the COVID period. And that talent talent gap was concentrated in tech and digital business skill areas. But as we know, we today have a record 11 million open jobs And those jobs need to be filled. So we’re in the business of where business is going. I wouldn’t say this is driven by COVID at all. I would say it’s driven by a fundamental underlying gap in the marketplace that will persist for many years to come, and we have the right product at the right time. And we are broadening and expanding that product to be able to gain more share with the available opportunity.

It’s helpful. Very helpful, Brian. Let me, again, we’ll stick with that services, but switched to the online program management side, you’ve detailed some of the search or target headwinds, and greatly appreciate the color. Some of your competitors are struggling….

Dan?

Can you hear me?

Yeah, I want to interrupt you, because you broke up at the very beginning. So I’m going to ask you to rewind to the beginning of the question, if you don’t mind. Otherwise, I won’t get the whole thing.

No. Can you hear me now? Is this better?

Yeah.

Just online program management view, you laid out some of the near-term market headwinds very well. Some of your competitors are clearly struggling more significantly, it would appear. Maybe talk about your offering relative to some others, whether there’s some opportunity in terms of market share gains. And how long do you anticipate these headwinds to last? In other words, when do you think we can get back to growth? Thanks.

Yeah, it’s a terrific question. I’ll say in preface, as I said, in the script, that we believe strongly in the future of post secondary education and the need for universities to partner with organizations like us in order to achieve their goals. They’re having trouble. They’re having trouble on a lot of levels, acquiring students, it’s increasingly competitive, they need us more than ever. But in terms of where we stand in the market, everybody knows why we’ve got gold standard services in this area. And we’re very comfortable with the – with our position relative to differentiation and so forth. We just recently significantly improved that differentiation with XYZ, because we’re bringing – we’re now bringing to the market what we call internally proprietary students supply, meaning we’re bringing students through XYZ as opposed to having to go out and compete in the market for it. So that gives us a differential advantage over others in the marketplace. With regard to what we do from a – as a – from a company perspective in the marketplace, we are – I wouldn’t say that you can characterize our performance as demonstrating anything other than the consistency of our relationships, that consistency of delivery, but unfortunately, affected by some economic factors that simply are out of our control. And some of these factors are obvious this idea that students are going back to work. Well, when will they – when will that boom end? When will the increasing salaries being offered to students or to potential students allow them to go back to school, or be less attractive as they go to school? It’s hard to exactly say right now because in some ways, it’s a very unusual moment. We saw COVID do remarkably strange things to student behavior.…

Very helpful. As is the detail on XYZ for shift [ph] the color there. Talk about do we think about that as being there’s more investment to be added to it, or there may be any cost synergies? Just wondering if there’s a pathway from getting 3 million-ish in EBITDA to, say, $5 million to $6 million over a period of time?

Yeah. Well, that business was growing very nicely. When we bought it, we anticipate it will continue to grow. It’s going to provide two things for us, Dan. The first thing it’s going to provide is, it’s going to provide this idea of proprietary students supplied to us that we can funnel into our programs where possible. And through that, there will be – there are natural synergies, because we’re now instead of having to go to the open market, meaning Google and advertising to find students, we now get them for free. Now, having said that, we are of course – we of course are meaning to continue this business, as businesses get to the second main point, which is we completely intend to be out there in the market and we’ll continue to go into the rest of the market. Because we are that – it’s very wildly, right? We’re in it for the ecosystem and we will continue to provide those leads to the rest of the market. And as we do, as there is continued competition among universities, which is only going to continue in the years to come. That’s what we’ve seen. The leads generated by a capability like MThree will be increasingly valuable in the marketplace to us, but also to universities all around the country. But that’s important. In terms of synergies, I would say that we were already in this business. We had a small part of Wiley that was already generating proprietary leads in this way. And it adds to that arsenal. And to the extent that we are managing the student journey from the minute they think about a degree or a certification and they go online and they type into the Google search bar artificial intelligence certifications, from that moment, through to the end of their college career, or their master’s degree or their certification, the idea that we can vertically integrate that you bet there are opportunities for optimization, there are opportunities for increased conversion, there are opportunities for cost synergies. W are – so in terms of the specifics of of MThree and its financials, you have to think about that now is two things. One is as a business that serves the marketplace, and two is is a core capability that allows us to do a better job for universities in their most painful pain point, which is student acquisition, and that that is an integrated part of the rest of what Wiley provides to these [Technical Difficulty]. So, I can’t provide a simple answer to the financials of – and of XYZ because of the robustness of its integration with what Wiley is doing, but we anticipate significant benefits well over and above the numbers that are on the page.

Got it. Maybe last one, and I’ll see if there’s others. But you mentioned inflation a couple of times. You’re relatively well insulated, certainly to the rest of my coverage list, but it’s still not immune. So, are there levers you can or thinking about pulling to offset some of the potential impacts as we think about fiscal 2023 and beyond proactively? And second to that is, how are you thinking about fiscal 2023 from an investment year versus maybe bottom line growth year? I’m sure you’ll get more detail in June. But don’t blame me for asking/ Thanks.

I never blame you for asking, Dan. So there’s two questions there. One is about our investment expectations going forward, and the second is about our expectations about inflation and the ability to offset. Well, as you know, Wiley is very reasonably insulated from inflationary pressures in the supply chain, a small portion of why we’re 85% digital, Dan, that I….

83%.

Yeah, 83% digital at this point in time. And so, from a supply chain perspective, any effect would be relatively modest. And the largest cost for us is, of course, our people. And in the current environment of the war for talent, things like the great resignation, we must focus on ensuring that colleagues are not only happy here, but they feel fairly compensated. So we have to take a good look at that, that’s really our biggest exposure. But the good news is, our products are must-have products. And we’ve seen through good times and bad, we just haven’t seen the price pressure, particularly in areas like research that others have seen. We feel very confident in our ability to price both in the P times Q model, which we’ve spoken about. Overall, we feel like the incredible brand portfolio we have will come out on top, as we move to this P times Q model and the evidence supports that in our pricing, by the way, Dan. And – but even in the more legacy parts of our business, we’re not seeing the price pressure that you would have expected during this terrible period over the last couple of years, I would say there’s not any. But the reason being, if you’re a research library, you can’t be without Wiley’s products, you just can’t be. And there’s really good value for money, because we put in another 250,000 to 300,000 articles into that product that you’re buying from us every year. So it’s insulated there. There are certainly areas where you could see some price pressure, but if you think about it across Wiley, there’s just we shouldn’t see too much price pressure. So from an inflation perspective, we should be able to manage our internal costs to…

The process is helpful. Thanks for the color.

All right, Dan. Well, thank you very much.

[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, again, thanks, everybody, for joining, and we look forward to sharing the fourth quarter and full year results in June and an outlook on next year.

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