Hello, everyone, and welcome to Wiley's 2024 Investor Update. For those of you that may not know me, I'm Brian Campbell. I lead Investor Relations at Wiley. I'm pleased to kick off this event, which we hope will showcase our full confidence in our plans, our progress to date, and where we're headed. Some housekeeping items first. A quick reminder that our comments reflect management's views as of today and include forward-looking statements. Reliance should not be placed on these statements, as actual results may differ materially from them. The company does not undertake any obligation to update them to reflect subsequent events or circumstances. Also, we provide non-GAAP measures to evaluate underlying performance. They should not be viewed as alternatives under GAAP. Note, we'll be excluding the held-for-sale businesses from our financials, and so you will see terms like adjusted revenue.
The exception to this is free cash flow. Please refer to slide number three for additional detail. Okay, let's turn to our agenda. Presenting today will be Matt Kissner, Wiley's Interim President and CEO. He'll take you through our focus and optimized strategy and our progress to date. Jay Flynn, our Head of Research and Learning, will discuss our businesses and markets. And our CFO, Christina Van Tassell, will take you through our financial targets and capital allocation. After the presentation, we'll open it up to Q&A. Please type your question into the Q&A text box at the bottom center of your screen and click Submit. An archive of this webcast and a copy of the presentation will be available on our website at investors.wiley.com. And with that, I'll pass it over to Matt.
Thank you, Brian, and thank you all for joining us. Our theme for today's Wiley is Focus and Optimize. We're going to focus on what we do best and where we have competitive moats. We're going to optimize our cost structure, how we operate, and how we publish. So in the interest of focus and optimize, let's jump right in. Wiley is a knowledge company. We enable the creation and curation of knowledge and its application in science, learning, and innovation. It's a very important statement. Wiley's content and solutions are high value, in demand, and critical to knowledge economies. We're helping to power many critical and growing disciplines, such as science and technology, medicine, business and finance, and engineering, and it's new knowledge, not derivative. In many cases, it's must-have knowledge.
It's also structured to be flexible and applicable in many different forms, and that is becoming increasingly important in an AI world, where high-quality, curated, and structured content is highly valued for model development. Our foundation remains strong. We're a top three player in a global ecosystem called research publishing, with over 2,000 journals across all disciplines. Many of our journals are ranked at or near the top of their fields. Make no mistake, research is at the heart of our business and the foundation for our long-term success. We have the industry's leading research content delivery platform, with 4.6 billion reader sessions a year. We host 50% of the world's English language journals. We serve over 10,000 research institutions, support over 600 society partners, and our content is used by over 12 million researchers across the globe.
Finally, we are one of the world's largest business publishers and one of its largest technology publishers. Turning to our financial attributes, our balance sheet and cash generation remain foundational strengths. Over 80% of our revenue is from digital content and services, and nearly half is recurring. We're one of the few small-cap stocks that have increased their dividend for 30 years in a row. Wiley continues to drive real-world impact through our business activities. The work we do in powering research and learning supports multiple UN Sustainable Development Goals. We are intently focused on three of them: quality education, reducing inequities, and climate action. We ourselves are committed to being carbon net zero by 2040, as validated by the Science-Based Targets Initiative. We are making scientific, technical, medical, and scholarly research more available to more people than ever before, and this research improves lives.
We are actively expanding access to high-quality learning content and tools. And finally, the company continues to be recognized for its sustainability risk profile, achieving strong ratings and scores from MSCI, Sustainalytics, S&P, and ISS. I want to thank our colleagues across the globe for their work in enabling our continuous impact journey. Now, let me talk about how we're organized. We have two operating segments, Research and Learning, under one leader, Jay Flynn. The businesses complement one another in that they both deliver high-value content and services and serve similar knowledge verticals. The Research segment represents approximately two-thirds of Wiley's revenue and delivered a 35% EBITDA margin in fiscal 2023.... It has a large recurring revenue base that's 95% digital.
Research consists of two businesses: Research Publishing, where we publish the latest scientific research in over 2,000 journals, and Research Solutions, which provides publishing and audience solutions to society partners and corporate customers. Research is the core driver at Wiley. Our Learning segment includes academic and professional publishing and assessments, and represents a third of our revenue. It delivered a 29% EBITDA margin in fiscal 2023, with 55% of its revenue digital. Jay will speak to the businesses in more detail following me. Let me provide some personal observations on my first 90 days back at Wiley. I'm thrilled to be back here, because Wiley is a terrific company. Yes, we're coming out of a difficult period, but refocusing on our core presents a rich set of opportunities to build on.
Our businesses are fundamentally strong, built on lasting relationships, whether with research institutions, academic societies, or 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 entrusted by the most prestigious societies in the world, Nobel Prize-winning authors, and major pharmaceutical companies. We have a terrific team. Our global colleagues are reinvigorated by our move to a simpler Wiley, and are empowered now to identify incremental growth opportunities and better ways of working. This is very personal.
What we do is good for the world. Wiley colleagues are highly mission-driven, knowing that we are contributing to scientific and economic progress, as well as the everyday progress of the individual. Yes, we have work in front of us. It's going to take some time to get us where we need to be, but I feel good and confident about our foundational strengths and direction of travel. Let's turn to our value creation plan. Myself, Jay, Christina, and the rest of the Wiley leadership team are moving decisively to improve performance and profit. Let me make it clear, I am accountable for leading us through this transition and laying the foundation for the next CEO. I am not in a holding pattern. We are moving forward with conviction and executing on the plans in place. For example, we've made markedly good progress on our plans to become more research-centric.
Jay will cover this in more depth shortly. We've reorganized into one market-facing team under Jay. That has allowed us to consolidate functions and improve our go-to-market. We've now announced the sale of two of our three divestitures and closed one of them. Our overarching goal is to free ourselves up to focus on the opportunities in our core businesses and restore a competitive cost structure. In that regard, we've moved aggressively on our cost base this past quarter. We're about halfway through our cost savings program, and Christina will talk to this in her section. Before I talk about go-forward Wiley, I want to spend a few minutes to acknowledge the period we are in. Prior, Wiley was a broad, disparate portfolio of multiple assets with high operating complexity, spread across multiple markets. We had limited operating leverage to scale our education and talent businesses.
We were simply spread too thin and inefficient in terms of allocating our capital, and the result of this was unfortunately evident in our mixed revenue performance, declining margins, and stock price underperformance over time. Today, we are very different. We are focused on our strongest and most profitable businesses in research, where we have competitive moats and operating leverage. We will be relentless in our product and business model innovation around these moats. And of course, we are actioning towards materially improved margins and sustained operating efficiency. We have what we need to deliver healthy, long-term growth and margin expansion, and we are moving forward. Let's talk about our key initiatives as we move forward. Jay will go into more detail, but I'll quickly summarize. First, we are laser-focused on growing market share, particularly in research publishing.
This is our core and where we can leverage our strengths to meet that strong global demand to both publish and consume our content. Next, we are leveraging our strengths in research publishing to deliver research solutions growth. These strengths include our global researcher audience, society partnerships, and corporate relationships. We are leveraging our high-impact content libraries for artificial intelligence and using AI and machine learning technologies to drive productivity gains in the creation of knowledge and in how we work. We are optimizing our business models around our in-demand content to increase customer value and author retention. We are deep into our journey of optimizing our content production to improve the author experience and reduce our cost per article. Finally, as you've already seen from the cost savings we've been delivering, we are obsessive about driving operating efficiency and deploying lean principles.
Now, let me hand this over to Jay to take you a click deeper into what this means across our businesses, especially in research.
Thank you, Matt. Outside of the Q3 earnings call, this is the first time I'm speaking to many of you, so let me first introduce myself. I'm Jay Flynn, and I run our combined research and learning business. I have 25 years experience in the global research market, serving in various leadership roles with some of our research peers, notably RELX and Wolters Kluwer. I also spent five years at Cengage Learning, which gives me insight into the dynamics of our academic business as well. I've been at Wiley for 14 years, serving in various roles, including Chief Product Officer and Head of Research Publishing. For the past two years, I've been leading the research division, before that role expanded this past August to include our learning business.
I'm excited by where we're headed as a hyper-focused, value-driven company, locked into what we do best: publishing high-quality research and learning content and making it accessible, relevant, and applicable to university researchers, governments, and corporations around the world. Let me start with Wiley's unique attributes and a bit about who we serve. As Matt noted, we are a top three research publisher with one of the highest impact journal portfolios in the world. The foundation of our competitive advantage is the enduring draw of our 2,000 journal brands and the partnership ethos by which we manage our business. We're particularly strong in some of the most important knowledge verticals, in chemistry, material science, oncology, engineering, technology, and agriculture.
These fields are powering massive socioeconomic trends: the shift to clean energy and battery science to reduce CO2 emissions, the rise of AI and automation, treatments for cancer and infectious diseases, and food security. Every day, we are helping researchers and innovators, governments, and industry solve the world's most important challenges. Moreover, we are the publishing and solutions partner of choice for academic societies around the world, and so we are closely associated with some of the most prominent names in science. These include the American Cancer Society and the American Heart Association, the New England Journal of Medicine, and the largest engineering society in the world, the IEEE. We are entrusted by over 600 societies to help them achieve their missions. To sum up, I'm very confident in our position in the market, our reputation for excellence, and our relationships with institutions and society.
My presentation today is going to be largely focused on research, given the feedback we hear from you and the continuous need to educate around this unique market. But I'll start by saying a few words about learning. Learning provides content and tools to students and professionals. Overall, it's a steady, nicely profitable, and cash-generative business, and we're going to continue to manage it that way. We have two reporting lines inside this segment: academic and professional. Our academic team focuses on students in higher education, and here we have two businesses, courseware, where our STEM learning platforms reside, and our much larger advanced content business, which includes things like e-books, print books, and reference and technical handbooks across higher education disciplines. It's also important to note, we do not compete in all subject areas.
Our focus is very targeted at select STEM and business subjects where we know we can be a leader. On the digital side, courseware is a growing market as students evolve from static print content to interactive and digital formats. Advanced content market projections are mixed, but both of these businesses tend to be countercyclical, so they fare better in challenging economies, and I believe they are stable contributors to Wiley's portfolio. On the professional side, we also have two units, trade publishing, where we're a leader in business, finance and accounting, technology, and Professional Education. This is also where our Dummies brand sits. Trade is a healthy market where we expect to see modest growth in targeted fields, and it has some very interesting prospects. For example, in our technology portfolio, we have a great pipeline of 30 books for release over the next year in generative AI....
Finally, Assessments, which is an industry leader in personality assessments and workplace team development. Assessments is a very consistent grower, and it is a highly profitable business with a great leadership team. As Matt noted earlier, we are taking a focus and optimize approach to improve performance at Wiley. In recent years, in the learning businesses, we have not been focused enough on the publishing side, and as a result, we saw both top line and margin challenges. Today, this team believes that there is an opportunity in this business to drive more output in high-demand disciplines, for example, in engineering and leadership and in management. Another example is in computer science. We're already a leader in this market with our zyBooks product, and we have the infrastructure and relationships in place, so signing and publishing more titles is a credible and easy-to-understand strategy.
There is also an opportunity, as Matt noted, for high-quality, structured content to be used to train large language models and then fine-tune them for use in specific vertical markets. It's very early days here in terms of quantifying this opportunity, but it's something we're going to be looking really hard at. All of this is what focus means in the learning business. On the optimized side, today, we are better at leveraging our library, corporate, and society relationships and research to help develop and cross-sell learning content. It's early days here as well, but this felt to me like low-hanging fruit, and we're already seeing success by taking advantage of our research footprint and selling our digital books into research library customers. One point on optimization, and this will come up again when we talk about research.
We are also concentrating our resources on publishing more effectively, automating workflows, and bringing down the cost to publish and go to market. Now, onto our research core, which, as Matt noted, makes up 2/3 of our revenue and drives most of our EBITDA and free cash flow. This is a business that generates 95% of its revenue from digital products and services. I'll start with an overview of our research publishing business. We and other publishers play the role of both gatekeeper and disseminator of high-quality research in the global knowledge ecosystem. The work that we and other research publishers do not only allows the ecosystem to function, but is necessary in order for innovation and discovery to thrive. Demand for our services is strong.
Approximately every 30 seconds, an individual author or team of researchers entrust their work to us in the hope that we will publish it and get it out into the world. Once a manuscript is accepted, Wiley adds value in a number of ways. We work with the author to get any final changes made. We copy-edit, typeset, and prepare the final version of record to the specifications of each journal. We then prepare the paper for publication, including adding metadata, structure, and indexing. Then finally, Wiley publishes the study in one of our 2,000 journals to make it discoverable around the world. It is important to emphasize that the publisher's essential role in this ecosystem does not change regardless of the business model we're publishing under. Another point is that our industry is highly correlated with trends in global research and development.
Underlying global R&D spend is ever-increasing, and we do not expect this trend to abate. At the end of the day, we are talking about the development and competitive priorities of the world's largest national economies and corporations. Global R&D sits at $2.6 trillion today and is expected to continue to grow at 4%-6% annually over the long term. Again, this is highly correlated to the specifics of our sector. Growth in R&D drives research submissions. More submissions equals more output, which in turn equals more revenue to Wiley. The research publishing market is expected to grow 2%-4% through the fiscal 2026 period and has a large TAM, particularly as we unlock more volume and government funding in an open science world. As noted, competition among nations and research institutions is fierce.
China is now the number one source of published research, the U.S. is number two, and the European Union is number three. On an individual basis, getting published is absolutely essential to a researcher's career. A researcher's publication history is used throughout the academic and reward system, including promotion, tenure, grants, and recognition. Every year, you can be almost certain that each and every winner of the Nobel Prize is a published Wiley author. Now, turning to our solutions businesses, which we are breaking out here as publishing and audience solutions. Publishing Solutions includes platforms, tools, and services for societies and other publishers. This is where we have our Literatum content delivery platform and where we're helping our societies successfully navigate the transition to open research. It is a niche market, which requires a tremendous amount of subject matter expertise, and it's growing nicely.
Audience Solutions includes database subscriptions, advertising, and recruiting platforms, largely for corporate clients. One of our strengths here is our access to a highly valuable audience of 12 million global researchers. These researchers are important buyers of chemicals, supplies, capital equipment, and professional services. They are also thought leaders in their own right. So we do see this as an opportunity going forward. Audience Solutions is a large, fragmented market and growing at mid- to high-single digits. So as before with our learning business, I'll spend a moment to review our focus and optimize strategy for research. But first, let me step back and say that research is obviously going to benefit from the changes that we've made as an organization recently. It is no longer part of a collection of things, having to share capital, resources, and executive bandwidth.
Research is now clearly at the core of the company itself. I'd also like to comment on our near-term outlook in fiscal 2024. As discussed previously, we've been weighed down by the research integrity issues we discovered in parts of the Hindawi Publishing Program. This has been a painful outlier for us and a very important learning. But demand across our portfolio remains strong and the market remains healthy. So we're sunsetting that brand, integrating what is still a high-quality journal portfolio into our own, and leveraging Hindawi's top-notch infrastructure for our open access program, while focusing on growing overall output through our entire journal portfolio. Now, on to our key focus areas. First, we're focused on winning market share and research publishing. We are doing this by driving submissions, improving the author experience, and investing in key disciplines and geographies.
As the world's largest society publisher, we have a unique opportunity to win even more of that business and expand the relationships we already have. As with learning, we are leaning into AI as an opportunity, both embedding our content libraries into large language models, but also deploying AI and automation to improve how we work and how we publish. Again, it's very early days here, but we're excited. Over the past few years, we have been focused on growing our solutions business that is built off our core publishing business, and this will continue to be a key initiative for us. Our society partners see a strong need for us to provide the tools and the services they need to navigate the open access transition, and to help them better network their audiences and connect them to critical opportunities.
On the optimization side, we continue to streamline and simplify our business models and our publishing operations. Notably, we are deploying our next generation submission and publishing platform to improve the author experience and lower unit costs. What I'd like to do now is provide a little context to each of these areas. So let's start with growing market share in research publishing. First, we need to drive submissions at the top of the publishing funnel, and I'm very pleased with our progress in this regard, particularly with the results we are seeing out of our new reorganized marketing function, making use of the latest marketing technology. Second, we need to convert submissions to articles. This means maintaining article quality, getting the right society partners on board, and building strong brands that are renowned for excellence, scientific progress, and helping research authors successfully navigate the academic reward system.
Third, it's about distribution and making articles discoverable to the widest possible audience under the right business models. Fourth, we have to deliver all of this in the most cost-effective way. We've made good progress recently in terms of not just our marketing efforts, but also in attracting new authors, realigning the publishing function, and ensuring quality control and research integrity. We're encouraged by our submissions growth this year, which is much higher than we anticipated. Now, submissions are a leading indicator of demand, but it's important to note that not all submissions will convert directly into article output. That conversion depends on a number of factors, including acceptance rates in individual journals, overall manuscript quality, relevance, and geography, among other things.
Equally important to note is that not all output converts directly into incremental revenue for Wiley, as some articles will flow through subscription journals and some will flow into gold open access journals. As discussed in Q2, there's also the time it takes to traverse the publishing pipeline, which is six to nine months on average. This is why we've seen output lag behind this year. That said, submissions have been a positive metric in fiscal 2024, and this positions us well for fiscal 2025 and beyond. Now, let's talk about business models. We continue to benefit from a mixed-model publishing environment that includes subscriptions, a hybrid model, or what we call institutionally funded open access, and a gold open access model. It's important to make clear that not one size fits all.
Models vary by region and by institution.... Subscriptions make up about 55% of publishing revenue and remain the dominant model in the United States and Asia Pacific. Research libraries and researchers are dependent on read access to all the world's published articles, and remember that this is all digital revenue. Institutionally funded OA, which combines read access and publishing services, makes up 22% of revenue and is the favorite model in Europe. These are similar to our subscription models in that both are centrally funded and under multi-year license. Researchers who work at these types of institutions can publish their articles in open access, which drives increased readership and citation. We are a market leader in these institutionally funded OA models. Combined, subscriptions and institutionally funded open access remain steady and foundational, as you can see from the chart on this page.
Gold open access, which represents 11% of revenue, is our fastest growing model, with growth rates of over 20% annually. This is the author pays model that pertains to a subset of our total portfolio. Here, we are focused on building high-quality open access brands on our own and in partnership with leading societies and research institutions. An important takeaway is that the OA model allows more researchers around the world to publish, and therefore expands our total addressable market. It serves those not affiliated with institutions, and it also serves those in underrepresented regions and disciplines, and governments want to support it. For the foreseeable future, we will continue to operate in a mixed model environment. Now, on to the role that AI is playing in our focus and optimized strategy.
We firmly believe that AI and machine learning present a great opportunity for Wiley, enabling both incremental growth and profit opportunities. I just want to give you a few examples. For over 40 years, Wiley has published the authoritative library of spectrometry data. In layman's terms, this data set allows a researcher to identify what it is that he or she has made in the lab. In November of last year, we upgraded this product using AI. This unlocks a whole host of use cases regarding previously unknown compounds, and has applications ranging from drug discovery, to engineering, to security. As with our learning business, Wiley's authoritative, structured, and indexed journal content is a great fit for large language training and fine-tuning, and we're seeing strong demand for this today.
We're interested in this, and we're also interested in how we provide our own fine-tuned models to end markets in the verticals where we are strongest. Today, we are actively building and deploying AI editing tools to accelerate article production and reduce unit costs through process automation in the value chain. We have just launched an internal pilot of our AI-powered article matching engine to improve article conversion rates, which we talked about earlier. We view this as having a high potential to enhance our refer and transfer process and give authors a better experience. It's an exciting area of innovation, and we believe we're both a beneficiary of this technology and a critical linchpin in its success. On to optimizing our publishing process. We're accelerating investments in our infrastructure to improve the author experience, increase throughput, publish faster, and reduce costs.
We are moving today from multiple disparate publishing platforms to one flagship submission and peer review experience for our authors. We recently migrated our first journals onto this platform that already features faster submission capabilities, improved peer review, open access transaction management, and a streamlined content repository, which will allow us to reuse our content more efficiently. Ultimately, we are building a data platform here, where every transaction and every piece of content in the repository is available for us to see, trace, and measure. This will make it easier for us to stand up new products and enhance the ones we already have. In terms of concrete benefits, we expect this next generation platform to lead to a material reduction in article turnaround times and cost per article.
We expect all these cost and efficiency improvements to lead to margin expansion beyond fiscal 2026, as we will have the platform fully developed and deployed in that period. In closing, we're working through our transition year in research as we recover from Hindawi and the COVID output lag we mentioned in Q1. In the medium term, through our fiscal 2026 plan period, I feel exceptionally good about our focus, our markets and strategies, and our team. Ultimately, it is our people that position us for further growth and continued success for all the same reasons we've already highlighted here.... They manage the brands and the content. They support our partnerships with societies, researchers, and libraries globally, and they have the expertise that has made us the market leader in open access.
We're now in a position to provide the infrastructure to publish more and faster at lower costs, and we're in the disciplines that matter in a rapidly changing world. As Christina will talk about, we have the balance sheet and the cash flows to reinvest into our core. Beyond fiscal 2026, we're going to continue to work hard at outpacing the market and expanding margins. With that, I'm going to turn it over to Christina.
Thank you, Jay. Good morning, everyone. I'm Christina Van Tassell, and I've been Wiley's Chief Financial Officer since November of 2021. It has been an eventful period, to say the least. We have made decisive moves this year toward a stronger and more profitable Wiley. I would describe where we are today as heavily into execution mode as we make major improvements across the organization. We have more work in front of us, of course, but I'm pleased with our progress so far. The value creation plan we announced in June is well underway. Over the past few months, we have delivered on key milestones in that plan. As Matt just discussed, we have reorganized our business into one go-to-market team for speed and agility. We've also closed on the sale of University Services, and we have announced the sale of Wiley Edge.
We've made good headway in our rightsizing and optimization efforts. We have the foundation in place. We have a strong and value-driven company with profitable core businesses in healthy markets. Over 80% of our revenue is digital, and nearly half of our revenue is recurring. We have a solid balance sheet with strong cash generation. And last, but certainly not least, we have a very skilled and focused team. Now, it's all about execution, delivering consistent results, and sharing our progress with all of you. We have good line of sight into our revenue and profit improvement outlook, and I'll walk you through those in detail right now. Let's first talk about our revenue outlook. Collectively, our markets over the plan horizon are expected to grow in the low to mid-single-digit range.
In fiscal 2024, as we talked about previously, we have been challenged by the Hindawi situation and the COVID research output lag. As of our Q2 earnings call in December, our fiscal 2024 guidance calls for revenue to be flat to down low single digits as we work through these headwinds. In fiscal 2025, we expect publishing output to begin to recover in line with historical norms, and we expect better solutions growth as corporate spending rebounds. We expect improvements in learning as we focus on publishing more in high-quality titles and in-demand topics, particularly in professional, and see continued in-line growth in digital courseware and assessments. Overall, growth in fiscal 2025 is expected to be in the low single digits. Finally, in fiscal 2026, research output is expected to fully recover, driven by strong open access growth and steady subscriptions and institutional OA performance.
In solutions, we expect good momentum as we continue to upsell our society partners. Learning will continue to see improved output from our anticipated title savings in fiscal 2024 and 2025. To put it all together, we anticipate growth in the low to mid-single-digit range in 2026. Okay, let me take you through our progress on our cost savings program. We have a total run rate savings target of $130 million through fiscal 2026. This number combines $100 million we've been talking about in the outer years, with the $30 million of in-year savings that we discussed in Q2. We are combining these together to make the program easier to follow, as previously they were discussed separately. About half of the $130 million has been actioned so far. That's the result of our Q2 restructuring activity.
The majority of the remaining $65 million will be actioned by the end of fiscal 2025. So where are these savings coming from? The largest component is corporate rightsizing, giving our more focused portfolio and smaller revenue base. And here we're going aggressively after stranded costs as we divest our non-core businesses. The second is optimizing our business operations, with savings coming from streamlining our org structure, consolidation of functions, labor arbitrage, and our reduced real estate footprint. We're also using AI here as a productivity enabler. Our third is technology savings, including courseware simplification, retirement of legacy systems, and reduced hosting costs. We expect about half of the savings to flow through to margin and half to be reinvested. So where will we direct that investment? Well, it'll go towards scaling our journal brands to meet global demand.
It will also go towards expanding our editorial and marketing capabilities to drive output and attract and retain more authors. We are also modernizing our research publishing platform, as Jay mentioned. Payback for our platform investments here are in the form of publishing efficiency, lower technical debt, and streamlined automated workflows. Finally, we plan to accelerate our solutions business by leveraging our industry-leading content delivery platform and research publishing relationships. I also want to emphasize that we have increased rigor in our investment decision-making process, and a simpler portfolio enables this. Our targeted reinvestment in areas of strength will help us drive continued growth and margin improvement long term. Now on to margins. We are targeting material margin expansion through fiscal 2026, with an increase of 500-600 basis points.
We expect to exit this fiscal year with a 23% Adjusted EBITDA margin, up from 19%-20% for the full year, and expand from there. Our drivers over the period are straightforward. We have a much improved margin mix, coupled with material cost savings and operating improvements. Around half of the cost savings will be reinvested, as I just described. Even with that, we are targeting a 24%-25% Adjusted EBITDA margin in fiscal 2026. Of course, we will continue to focus on margin expansion beyond the plan period. Cash generation remains a core Wiley strength. We are targeting material cash flow improvements over the time horizon. So let's start with fiscal 2024. As we've talked about previously, we expect cash flow to be lower this transition year than Wiley has historically delivered.
This is due to a combination of lower cash earnings, increased restructuring costs, and higher interest payments. So we're anticipating free cash flow to be approximately $100 million for the full year. In fiscal 2025, we anticipate moderate free cash flow improvement as we move out of this transition year. We anticipate higher CapEx in fiscal 2025, due to investment in our research, digital products, and publishing platform, and in modernizing our back office systems. In fiscal 2026, we expect to deliver free cash flow of approximately $200 million. As cash earnings improve, our CapEx and spending returns move to a more steady state and our restructuring plans wind down. Our free cash flow conversion is expected to improve from 30% in fiscal 2024 to 45% in fiscal 2026.
In terms of CapEx over the plan period, we're anticipating approximately $100 million this year, rising to $130 million in fiscal 2025, and dropping back down to around $100 million in fiscal 2026. Long term, our goal will be to deliver free cash flow of at least $200 million annually. As always, our balance sheet remains a strength and gives us both flexibility and capacity. At last fiscal year-end, we were at 1.5 in terms of Net Debt to EBITDA. I'm comfortable with this level, given our profile and visibility. That said, we're going to continue to manage down debt while balancing other capital priorities, culminating in a target below 1.4 in fiscal 2026. As you know, our upfront cash proceeds from the divestitures were not material.
We fully expect to collect the cash over time, but we won't see a material cash benefit just yet. All right, let's turn towards our capital allocation. Overall, we are focused on driving value through targeted investments in research and returning cash to shareholders in the form of dividends and share repurchases. On the M&A front, we've turned our attention to our value creation plan and divesting non-core assets. We haven't acquired anything of note since fiscal 2022. In the future, we will be focused on high-return acquisitions and research, including content, tools, capabilities, and platforms. In terms of CapEx, as I just mentioned, we are very focused on investing in research growth and optimization initiatives. Through the half, we did increase share purchases and will be evaluating them more closely as free cash flow improves. And of course, we continue to support a healthy dividend.
We have a clear plan forward: focus where we have unique right to win and strong profitability and operating leverage, optimize our cost structure and get leaner and more agile as an organization, be fanatical about execution, and allocate capital judiciously. This plan gets us to a low single-digit revenue growth in fiscal 2025, improving to a low to mid single-digit revenue growth in fiscal 2026. Margins increased to 23%-24% in fiscal 2025, and then 24%-25% in fiscal 2026. Free Cash Flow steps up to approximately $125 million in fiscal 2025, and then approximately $200 million in fiscal 2026. In summary, we are turning the page. We are aligned, we are invigorated, and we are accelerating. We've made good progress so far, but there's still much work to be done.
We'll be sharing our progress with you every quarter, and I'll finish by thanking you for your interest, your participation, and your shared insights. I wish you all well, and I look forward to updating you again in our Q3 call in March. With that, back to you, Matt.
Thanks, Christina. So we feel confident about our progress, our plans, and our people. We are now a research-centric company, aligning our resources and capital to where we have lasting competitive advantage and strong incremental margins. We're taking action to drive market share, attract new authors and article submissions, and strengthen our brands and partnerships. We will do this while maintaining the quality and impact that Wiley is famous for. AI and machine learning are attractive opportunities. We will look to embed our content into AI models. Wiley's content is highly conducive to large language models and training engines. Internally, we will deploy the technology to improve publishing speed, quality, and volume. And finally, we are heavily focused on improving our operating and publishing efficiency.
... That concludes our presentation. I want to thank all of you for listening, and we'll open the floor to questions. As Brian noted, please drop your questions into the Q&A box at the bottom of your screen and click Submit. We're going to take a short pause to reset things, and we look forward to answering your questions when we come back.
Stand by. All right, ready? five, four.
Welcome back. Thank you again for joining us today. We'd love to now spend some time answering your questions. There's a question box on your screen. Please type them in. Brian Campbell is going to act as moderator today, so I'm going to turn it over to Brian for the first question.
Thank you, Matt. Our first question comes in from Dan Moore. Dan has covered Wiley for over 10 years, so thanks for the question, Dan. So probably one for you, Jay. "Regarding Hindawi, recognizing you are sunsetting the brand, remind us of the current expectations for revenue and EBITDA for the business in 2024. What's the expectation for 2025, and what should be the scope of the recovery like that at thereafter?
Great. Thank, thanks, Brian. Thanks, Dan, as well, for the question. Appreciate it. As a reminder, we guided in Q2 to fifteen to twenty million of top-line revenue at Hindawi in this fiscal year. That's going to drag on profitability modestly, and then we expect this to start to recover in 2025. And beyond 2025, 2026, what I expect to see out of this business. Sorry, through 2025 and 2026, what I expect to see out of this business is it's going to perform like the rest of our gold open access portfolio. So referring back to the presentation, we talk about a gold open access mix, a hybrid or institutionally funded open access mix, and then subscriptions.
That gold number grows at about 20%-22% a year, and we expect the portfolio of Hindawi journals, which is a really good portfolio for us, to grow at about that pace in 2025 and beyond.
Great. And, let's see. Next question is from Benjamin Alexander, Alexander Capital Management. "Can you please elaborate on share repurchase criteria? Do you plan on being opportunistic with it? And if so, that value..." Yeah, so just do you plan on being opportunistic with it?
Sure. Thanks for the question. So we're happy with our share repurchase program so far. Through the first half of the year, we are slightly ahead of where we were last year, and that's being opportunistic. We're constantly reevaluating that. As you know, this is our transition year, so we're being very mindful of our cash. But we are taking advantage where we can, and we continue to do that, and we will do that going forward.
Great. Okay, next question is from Brendan McCarthy from Sidoti. "Even though the efforts are focused on the reorg and streamlining efforts on research and learning, can you talk about M&A strategy, if any? Looks to me like free cash flow generation can support inorganic growth.
Great question, and let me be clear. Right now, our focus is on focusing and optimizing, and as you see, we're starting to deliver. And also, putting these divestitures behind us, and we're on track to do that also. We've spent some time looking at our experience with acquisitions and to learn what acquisitions work and where to stay away from, if you will. And it's clear to us that acquisitions that are really close to our core franchise, meaning building around that wonderful research franchise, those are the ones that are very successful. So right now, we don't have any acquisition plans, let me make that clear. But if we were going to look at inorganic growth, it would certainly be around the research engine, and around the value chain in research.
It would be other areas to add value that complement our publishing footprint.
And just to add there, we would also be very, very prescriptive on our financial fundamentals as we would look at these deals as well.
Great. Another question in from Dan Moore. "Focusing on the sale of University Services, is it your expectation that the seller's note you issued will remain outstanding for the three-year period, or would you expect Academic Partnerships to secure financing to make the initial $110 million cash payment over the next few quarters?
Why don't you comment?
Yeah, I'll grab it. Yeah.
Yeah.
Thanks, Dan, and how are you doing? Yeah, so we are working closely with our buyers, and they are actually in the process of working on the refinancing. So, you know, we don't have any information just yet, but we are staying close with them. But we do expect to be repaid and be repaid as soon as possible.
Great.
Yeah.
Good. So, the next question from Jason Wulff over at Eagle Asset Management: "Longer term, do you see free cash flow conversion levels improving back toward the historic levels above 50%?
... Great question. So we are, you know, as you know, this is a transition year, as I talked about in my prepared remarks, and we're working back towards a sustained and increased conversion. So we do anticipate us coming up, you saw us coming up to 40%-45% in fiscal year 2026. And we're working towards even accelerating that further, and so we are optimistic that we can get there. You know, based on what you've seen today, you've seen our plans, and we are seeing upside as we continue down the line.
Great. Good. So next question. International revenue is currently around 50%. How do you think about the growth opportunities in China, India, other developing markets versus the U.S., and, and how do you see that revenue mix maybe evolving over time? Jay, maybe for you.
Sure, Great. International revenue's always been a core part of the research story, and just to concretize that a little bit for everybody, when we think about research as being 2/3 of Wiley's top line, about 2/3 of Wiley's research business revenue comes from either APAC or EMEA. So it's about 1/3 U.S., 1/3 Europe, and 1/3 APAC. As we talked about in our last earnings call, and it's a really important point to make here again today, we feel great about what we're seeing out of growth markets like China, growth markets like India. We've got great long-term deals secured in Korea and Japan, and the open access movement adds incremental revenue in those parts of our portfolio. We've got great journal brands in place in China.
We started brand, I think, 24 high-impact journals over the last three years in China through our institutional partnerships. We've got people on the ground. We've got the right footprint. That being said, that's an opportunity for us to grow. I don't think it's gonna impact overall revenue mix materially. We expect that to stay around the same, with our learning business being primarily a U.S.-based business and with one-third of that stable research core coming out of the U.S. as well.
Great. Thanks, Jay. So next question. I'm actually gonna go back to one of Dan Moore's 'cause I missed part of it, which is: How do you ensure that we don't have Hindawi-like experiences as you further leverage and implement AI and machine learning? That's for Dan Moore.
Great. I'll just jump in and take that, Dan. First of all, I want to talk about, you know, what we found and the actions that we took. Clearly, it was a painful moment for us, the retractions at Hindawi and the paper mills there. But what I'm really proud of is the way the team responded. So we've made a management change. We have integrated AI tools and human editorial processes. We totally redid our business processes for Hindawi, and we shut down the loopholes associated with the paper mill that was running there. But more importantly than that, when we look to sunset the Hindawi brand, when we look to the future with that portfolio, we've integrated it into our larger Wiley journal portfolio.
So this is a program with journals that have been run very successfully as part of Wiley's research business for the last 30-40 years, and we feel very good about leadership, operational controls, business process changes. AI does present an opportunity for us here, and in a couple of different areas. Number one, in the larger area of research manipulation or results manipulation. We've got AI checkers in place on things like image manipulation. We've got AI in place on identity check, and things like that. But it's also really good at detecting synthetic content or content that's been generated by AI itself. So you use AI to catch AI, and we're in the process of integrating those kind of tools into our next-generation publishing platform that I talked about earlier in the presentation.
So AI is a big part of the story there, but business process change, leadership change, shutting down the loopholes, it's all part of the toolkit that we use today, as we continue to go on this journey of solving research integrity as an industry.
Great. Now, this is one probably for you. I mean, would you say you have everything you need to deliver the value creation, or do you need to go out and get something more?
We don't need to go outside to deliver the value creation plan. We are already tracking well, as Christina noted in her remarks, about halfway through the plan, and we have a really strong program going forward to deliver the balance of those savings. Now, I do see in over the long run, there will be opportunities to add to growth through M&A, but again, that's not our focus right now. Our focus is on executing and delivering the plans that we have in place.
Great. And, Christina, this one looks to be for you. Is it a 24%-25% margin the end goal, or do you think there will be opportunity beyond fiscal 2026?
Sure, a great question. We have plans in place, and we feel good about those plans for hitting our plan targets during the planning period. So we feel really good about that. We also feel good about what's beyond 26. So, you know, what you heard today from particularly Jay and myself about the reinvestment we are doing in our research platforms, for example, that's gonna drive a lot of cost per article. We're gonna drive that cost down. It's also going to help us with our end-to-end customer experience, which is gonna be more efficient. We also have, with our simplified portfolio, as we talked about all, you know, all day here, that really does help us drive efficiency across the organization.
Being focused in that way, we do believe will garner dividends in the future via our margin.
... Great. How about this one? What, what are the specific growth opportunities in learning? What areas would you be focused on more than others? Maybe-
You want to take that, Jay?
Sure, I can take it. I've been getting to know the learning business over the last six months or so in my new role. Just want to reiterate a couple of things that Matt and Christina said. This is a good, stable business with great cash generation characteristics, and it's a business that forms a nice part of our entire financial picture. That said, there are some opportunities that we've uncovered for growth in learning. A couple examples might be in the development of our frontlist titles in trade and in advanced content. We've put plans in place this year to continue to drive book signings and drive top-line revenue there. We thought there was some headroom, and we're capitalizing on that. We're also exploiting some synergy between our research sales footprint and our learning content library.
So we, I think, underutilized that research sales team to go out and put learning content into our academic library customers, and we've seen already this year, right, some, some very good uptake in that. And I'm excited about the potential there for the future of that content library and all kinds of different applications, if it's in the corporate market, third-party reseller market, but then coming back to utilizing that research footprint to carry more books in, into those markets. Those are a couple of areas where I see some opportunity for us, and as with all these things, we're going to be very judicious about the allocation of capital, but we do feel like there's some headroom.
Great. Do you anticipate any further divestitures once you've completed the current set? How likely are they within the next 12 months?
Well, right now, as I said, we're focused on the current set. We're always looking at the quality and performance of our portfolio as a routine part of our strategic planning, but we have no plans right now for any further divestitures.
Okay. In terms of changing from to the leadership, the Research and Learning team under one leader, what has been the feedback from customers since?
Well, I'll start with just a little bit about what we're hearing from our society customers, who make up a really important part of our overall IP mix, and these are long-term relationships with some of the most valuable partners in the world. We talked about it earlier, but just to reiterate, these are folks like the American Cancer Society and the American Geophysical Union, the German Chemical Society, or the American Heart Association, right? These are household names that provide important scientific content that drives industry, that drives R&D, that drives healthcare outcomes. I mean, these are great partners for us. One of the things that I've seen, at least in the first six months, is that we're able to go to those partners a little more holistically.
Developing new book programs with existing partners from research, taking existing book partners and signing new journals, bringing them all together with our partner solutions business to help them grow top-line revenue and to help them achieve their mission. So it's been a very good story from that perspective. We talked a bit about the research librarian customer and how we're supporting that customer base. We're hearing a lot of positive feedback on the new offerings we're putting together. We were a little reluctant in the past maybe to put more content in the library channel, but the librarians want it. They want to provide it. They want to give good service to their customers. So we're getting positive feedback across the board there.
Yeah, if I might build on that, what I'm hearing from colleagues is that they're really excited about this new organization. It really simplifies their life. I think there were artificial barriers between these businesses, so it's now easy to reach across and work with a colleague in another part of the organization as it's under one leader. It's also much easier to set technology priorities because we have one unified business working with our technology organization in order to drive prioritization. So here's an example of simplification, an organizational change that drives a lot of simplification in our everyday lives.
Just to add to that as well, on the capital allocation front, it also helps us with, with our very, you know, drilled-in capital allocation. When we talk about are we optimizing funding and investment in things like research and learning, we can really focus on the underlying drivers. Before, we had a very diverse portfolio, a little bit more difficult to do that. Now the story is very, very clear-
Yeah.
Our focus is very, very clear.
Yeah.
Great. From Dan Moore. Matthew, given you tend to be accountable for execution of the plan, does that mean you plan to be in place through fiscal 2026? And when does the board expect to begin the process of identifying a successor?
Well, first of all, I'm really happy to be here. I have been around this company in a number of capacities in 20 years, and it's great to be back and doing good in the world, participating, doing good in the world. So, I think the board is taking advantage of the experience that I bring to this role. We're in no rush, speaking for the board, if I might be so bold, to say. There's, you know, they have in me, I think, a safe pair of hands. I've been around the company. I've probably visited every one of our locations. I know the businesses. I think you can sense we're getting stuff done, so we're under no pressure right now.
So the board is taking the luxury to really do a thorough job of understanding what kind of leadership qualities, experience we're going to need in the next CEO. So I'm going to be here as long as I'm needed... and I'm fully committed and signed up, and really, I think it's a privilege to be back at Wiley and working with such wonderful colleagues.
Great. Christina, this one looks to be for you. For the value capture plan, what is the timing of charges, in 2024 through 2026? Is there a way to tell us how much is cash versus non-cash at this point?
So well, it's a little too early to use to talk about that. As I said in my prepared remarks, we're doing the majority of the work and the actions in 2025. And so we will come back when we, when we've got those plans articulated. But we, you can expect, you know, roughly similar to what we've had in the past. And, you know, we'll, we'll come back to you when we, when we have a little bit more formulated approach.
Great. Actually, give a few more seconds, but it looks like that is it for questions. Give me one second. Oh, I might have one more. Oh, sorry, there is a couple more coming in. Okay, are you comfortable in your ability to maintain your research margin as you get further down the OA path, and why?
Jay, you want to-
Yeah, I'll start with that and Christina jump in. I think one of the remarkable things about the resiliency of this business, this research business, has been our ability to move through various transitions. I've been in this space long enough to have participated in the print-to-digital transition, sort of the end of the late 1990s into the early 2000s. For a lot of media companies, for a lot of print companies, that was an incredibly disruptive and destructive period of time in terms of value. In our business, in our sector, that was a very fast print-to-digital migration. It actually grew revenue and eventually expanded margins in the long term, after you get through the upfront infrastructure investment costs.
With open access, I think we're in this mixed-model economy for a while, and so while we have favorable margin characteristics along historical lines associated with our subscription business, open access margins have remained relatively on par with the historical margins in subscriptions, and that's down to a couple of things. One, it's down to the fact that most of our OA revenue behaves very much like our subscription revenue. It's long-term contracts, it's multi-year, it's predictable for us. We can adjust our cost base and our expenditures up and down to meet the need. And we do also, with our gold open access program, participate in a growth vector there.
And those journals, once you start them up and once you get your impact factor, those journals perform very similarly to our subscription journals in terms of margin. So I think historically, if you look at the financials, we've been able to move through this period with roughly the same top-line growth characteristics and margin profile. That said, we are investing now to be sure that we're robust for the future, and new publishing platform is an example of that. We do have capacity to make those kind of investments to be sure we can keep expanding our margins and research going forward.
Yeah, and just to expand on that a little bit, I think that was absolutely spot on. But just in terms of the, you know, what we're seeing in the next phase of our planning cycles, outer years beyond 26 and so forth. You know, with this investment in our end-to-end and our publishing platform, it will, as I said earlier, drive down drive efficiency, drive down our cost per article. But it's also a flywheel for our solutions businesses, right? Particularly our publishing solutions businesses. And so there's operating leverage there, and we're excited about that as well.
Yeah.
We think that will also be accretive to our margins.
Great. Question coming in from Benjamin Alexander, from Alexander Capital Management. I know you're not doing M&A now, but, you know, can you elaborate on the criteria, the financial criteria for acquisitions when you do?
You want to jump in?
I mean, sure. I mean, you know, we're first of all, it's going to have to be. I think this goes without saying, but it will have to be very, very tied in closely with research. You know, that's number one.
Yes.
But also, it's gonna have to be, you know, our WACC is about 9%. It's gonna have to be markedly above that in a return, and it's gonna have to be something that we see as, you know, improving our offerings of content, those kinds of things, that will really drive, you know, drive the creative moment. Maybe not on day one, but shortly thereafter, and that's what we're looking at. But again, we're, you know, we're not really focused on this at this moment, so we'll come back to you when we, when we do start thinking and getting through this period of disposing of, disposing of our non-core businesses and getting through this transition period. And we'll come back to you with a strategic M&A outlook.
Great. A question that we get all the time. What do you think is underappreciated about Wiley? What investors aren't appreciating, and what do you hear from investors about that?
Let me go first-
Yeah
... as the new old guy, right? I, you know, coming back to Wiley and spending the last three months traveling, meeting with colleagues in Europe, and two things pop out at me. One is the strength of the research franchise in terms of the great brands we have in really good disciplines. And that's a business of strong brands in strong and growing scientific disciplines, and I think we're really well-positioned there. The other side of that franchise is our society relationships. We are the largest society publisher in the world, and what's that driven by is a real competency in partnering, knowing how to partner. It is really something, and...
What a terrific position to build off with these relationships as you look at, let's say, we touched a little bit on AI and, you know, cooperating with these and partnering with these societies as you get into kind of what the impact of AI is going to be on science. So that's on the one hand. The other is the culture. I am so impressed with the resiliency of Wiley colleagues around the globe, their commitment to the mission, and their excitement and passion about what we do in terms of adding to the quality of life every day, and it motivates me a lot, too. I have a lot of personal connections, but I think we're all very mission-driven here.
Yeah. Yeah.
What would you add to that?
What would I add to that?
Yeah.
For me, it comes to fundamentals. So we've got really strong fundamentals. You know, we talk about you talked a little bit about resiliency. Resiliency in our, in our economics as well. And I think you see that we've been around for a couple centuries now, and we've really navigated through through lots of ups and downs, through our strong fundamentals. So that is important. You know, we've got really good, you know, cash flow progress, prognosis. We've got great working capital. We've got great, you know, we've got almost half of our revenue is recurring, which is predictable. And those kinds of things really show us that we we do have these the fundamentals to be very, very, very successful, and that's what I'm really excited about.
I think our colleagues see that as well, and that's why we're seeing great morale.
Can I jump in?
Yeah, please.
I feel, Brian, like it's such a great question because it's hard to...
Yeah
... to pin down what Wiley's secret sauce is, right? And so I don't, I don't know what investors underappreciate about the business, but what I'd love them to appreciate, if I could put it that way, is that this is, this is a company where people can do well and do good at the same time, right?
Yeah.
It's one of the few companies that I can think of where that really happens. We, you know, the do well, we've talked about, right? It's a resilient business, it's got strong cash flows, it's margin-expanding margins. The markets are underpinned by Global R& D. But the why behind that is the advancement of, it's human advancement. It's the advancement of science, it's the advancement of medicine. It's cleaning up the Hudson River outside our offices. It's the things that really matter to us as colleagues that I think sit at the core of the culture and have this great connection into the things that drive the global economy.
For me, you know, when I get up every day and come to work, those are the things that, that get me out of bed in the morning.
Great.
Excellent.
That's, that looks like it's it for the questions. So, Matt, I'm going to turn it over to you.
Thank you, Brian. Well, I do want to thank you for spending time with us today. I hope you are seeing this is a very passionate, committed team, and we are going to deliver. We're starting to deliver. We will continue to deliver. This is just the beginning of what's going to be, I think, a very exciting chapter in Wiley's 215-year history?
Seventeen.
217-year history. So, with that, we're going to close, and we'll see you again, I guess, at the earnings call in March. Thanks.
Right.
Thank you so much.
Thank you.
Thank you.