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Q2 2024 John Wiley & Sons Inc Earnings Call

Participants

Brian Campbell; VP, IR; John Wiley & Sons, Inc.

Christina M. Van Tassell; Executive VP & CFO; John Wiley & Sons, Inc.

James Flynn; Executive VP and GM of Research & Learning; John Wiley & Sons, Inc.

Matthew S. Kissner; Employee Director, Interim CEO & President; John Wiley & Sons, Inc.

Daniel Joseph Moore; MD of Research; CJS Securities, Inc.

Sami Kassab; Media Research Director, Co-Head of the European Media Team & Analyst of Media; BNP Paribas Exane, Research Division

Presentation

Operator

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

Brian Campbell

Thank you, and welcome, everyone. With me today are Matt Kissner, Wiley's Interim President and CEO; and Christina Van Tassell, Executive Vice President and CFO. Also with us is Jay Flynn, Executive Vice President and General Manager of Research and Learning. He will be participating in our Q&A session along with Matt and Christina.
Note that our comments and responses to your questions reflect management's views as of today and will include forward-looking statements. Actual results may differ materially from those statements. The company does not undertake any obligation to update them to reflect subsequent events or circumstances.
Also Wiley 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 held-for-sale assets and the impact of currency. Additional information is included in our filings with the SEC. A copy of this presentation and transcript will be available on our Investor Relations web page at investors.wiley.com. I'll now turn the call over to Matt Kissner.

Matthew S. Kissner

Thank you, Brian, and thank you all for joining. I'm pleased to be here with Christina and Jay. We and the rest of the leadership team are moving decisively on our value creation plan, which I'll talk about in a bit. I'll give you an update on my first 60 days and discuss my role in the transition. And of course, we'll review our second quarter performance and how we see the year shaping up.
I'd like to speak a few moments about the interim CEO role in my first 60 days. The Board of Directors and I think about my role as a transition more than an interim. My responsibility is to execute the plans previously approved by the Board and improve the company's operating performance and profitability.
From a personal perspective, it's a privilege to be back at Wiley during this critical juncture in our evolution. As a result of my long association with Wiley in various roles, I have an in-depth knowledge of the company's businesses, operations and markets. And I have strong relationships with Wiley colleagues across the globe.
Frankly, I know our strengths and I know the areas requiring improvement, and I am in an excellent position to help drive the changes needed to significantly improve our performance. We are moving decisively to streamline the organization, divest noncore assets and rightsize Wiley for future success.
During my first 60 days, we continue to execute on our reorg, announced the sale of University Services and moved aggressively on our cost base. While the leadership team and I are focused on executing, the Board is carefully considering various options for the future leadership of the company. In that regard, an important objective of mine is to assist the Board by assessing and enabling internal talent.
We previously characterized fiscal '24 as a transition year, a period in which we would be keenly focused on our core businesses. That has not changed. I'm now responsible for leading us through this transition and laying the foundation for the next CEO. In summary and for the avoidance of any doubt whatsoever, we are not in a holding pattern. We are moving forward with conviction. I hope these thoughts on my role are helpful.
Finally, I recently met with colleagues in our European offices and in our Hoboken headquarters. And while it's early days, I find the culture to be reinvigorated by our renewed focus and our improvement initiatives. It's pretty obvious to colleagues that we have to improve how we operate and make it much easier to get things done.
I also participated in listening sessions with a few of our largest shareholders and found their observations very helpful. I am a long-term shareholder, myself, of course, and personally bought more shares. All to say, after listening intently, our goals are aligned.
As a reminder, we're now reorganized into 2 operating segments, down from 3. The 2 segments, Research and Learning complement one another as they both deliver high-value content and solutions in related markets and verticals, including science and medicine, technology and innovation and business and finance.
As a quick reminder, Research is our largest and most profitable business, and it's at the core of our strategy. The market for new scientific, technical, medical and scholarly research grows steadily, and Wiley has one of the world's leading journal portfolios and the industry's most widely used delivery platform.
The business has large recurring revenue base that is 95% digital. Learning includes academic and professional publishing and platforms in business and finance, technology, management, team development and reference. Our competitive advantage in learning includes our brands, author relationships, category leadership and reputation.
As a reminder, we recently coupled these businesses into 1 team under Jay Flynn. Jay is already identifying and acting upon synergies across these businesses. And with this change, we expect to drive much greater operating and capital efficiency.
Let's talk about how we're progressing with our value creation plan. I'm pleased that we are driving this plan forward on multiple fronts. During the quarter, as noted, we reorganized from 3 business units to one market-facing research and learning team. We also consolidated our marketing teams to leverage our capabilities and author relationships and realized potential synergies.
As noted, we recently announced an agreement to sell University Services, our largest divestiture for up to $150 million in total consideration, including $110 million base price and $40 million in potential earnouts plus a 10% equity stake in the combined company. The transaction is expected to close in early 2024. We're working diligently on our remaining divestitures, but I want to emphasize that it remains a challenging environment.
We're moving aggressively on our cost base as noted by our restructuring actions this quarter. Christina will talk to what we're doing there. We centralized our global operations team under one leader to drive toward a lighter infrastructure, simplified processes and improved analytics and insight.
Finally, we will hold an investor update on Thursday, January 25. It will be virtual and will include myself, Christina and Jay. It's an opportunity for us to share more detail on our performance, profit improvement plans, our fiscal '26 targets and field any questions you might have.
Let's turn to our performance for the quarter as we make our way through this transition year. I will be excluding our held-for-sale or sold assets in my commentary unless otherwise noted. Overall, Q2 was largely in line with expectations but mixed in terms of Research versus Learning.
In Research, we saw year-on-year revenue declines, reflecting the Hindawi disruption and a soft market for recruiting. Excluding Hindawi's $18 million impact research revenue was flat. In Learning, we saw growth in our academic and professional publishing lines, including print and digital content and courseware in the business and technology categories. GAAP EPS was a loss of $0.35, reflecting $52 million of additional impairment charges related to our held-for-sale assets and $25 million of restructuring charges as we execute on our rightsizing plans.
Adjusted EBITDA declined by 13% to $92 million. Hindawi's EBITDA impact was $14 million, offsetting restructuring savings. Adjusted EPS was down 25% due to lower adjusted operating income and higher interest expense. In the quarter, the held-for-sale businesses collectively generated $86 million of revenue, down 18% driven by declines in University Services and CrossKnowledge due to challenging market conditions and adjusted EBITDA of $19 million, up 4%. As indicated, we are reporting on this as a separate segment and you can find this in the tables attached to our earnings release.
I'd like to provide a brief update on research publishing given the near-term dynamics. We continue to see healthy demand to publish driven by growth in global R&D spend. Year-to-date, article submissions in our core are up 9%. This is an important demand indicator as we recover from the COVID demand spike and snap back. However, there was a natural lag between submission and publication.
So output is only up 1% ex-Hindawi. We expect output to improve in the second half as submissions flow through our publishing pipeline. That said, largely due to this timing issue, we now expect research revenue to fall modestly below expectations. For the full year, we expected research revenue to be flat overall and now anticipate it to be flat to down low single digits.
For our core, excluding Hindawi, we expected 3% revenue growth and now projected to be up 2%. As a reminder, the Hindawi recovery is expected to take time as we turn around impacted journals and finalize historical retractions. This year, we project the revenue impact to be $35 million to $40 million.
In fiscal '25, we expect revenue to begin to recover as we prioritize our impact journals and improve our marketing efforts. To that end, we feel that now is the time to sunset the Hindawi brand and begin to fully integrate its 200 journals into Wiley's 2,000 journal portfolio. This reflects the now close alignment of the practices and infrastructure behind the 2 portfolios and enables a much wider audience. We anticipate the Hindawi transition to conclude in mid-calendar 2024. I'll now turn it over to Christina to discuss our segment performance, cost savings initiatives and outlook.

Christina M. Van Tassell

Thank you, Matt, and hello, everyone. We continue to move effectively through this transition year, a significant part of which is executing on our plans to make us a stronger and more profitable company. We made meaningful progress this quarter, but there's still a lot of work in front of us.
Let's turn to our Q2 performance for research. Research Publishing revenue declined 7%, mainly due to Hindawi. Excluding Hindawi, Research Publishing revenue was up slightly. As Matt noted, we're seeing a pickup in submissions, but output remains muted due to publication timing.
Important to note, it takes on average about 6 months for an article submission to turn into a published article. Overall, we continue to benefit from a mixed model publishing environment that includes read-only subscriptions, transformational read and publish agreements and Gold Open Access, models vary by customer and by region.
During the quarter, we announced a new 5-year nationwide transformational agreement in Germany, involving more than 900 academic institutions.
This agreement includes read access to all Wiley general content while providing authors at these institutions with open access publishing options. To date, Wiley has signed transformational agreements with over 80 partners worldwide covering several thousand institutions. This quarter, we continue to see double-digit growth in Gold OA. As a reminder, Gold OA, including Hindawi, makes up about 10% of our research publishing revenue and is our fastest-growing area in Research segment.
Turning to Research Solutions. Revenue declined 3% this quarter due to softness in our recruiting business. This decline in corporate revenue offset growth in our Publishing Services business, where we provide software and services to help society partners and other publishers managing peer review and other publishing processes.
Adjusted EBITDA and research this quarter declined 17% weighed down by Hindawi's $14 million EBITDA impact. Excluding this, adjusted EBITDA for research declined by 4%. Our Q2 adjusted EBITDA margin, including Hindawi, was around 32%, down from 36% in the prior period. We expect research revenue improvement in the second half as submission growth converts to output and Gold OA revenue growth and Hindawi comps become less challenging. Even with this improvement, we are projecting modest underperformance in research with offset coming from outperformance and learning.
Let's turn to our Learning segment. Academic Publishing revenue in this quarter was up 8%, driven by growth in print and digital content and courseware. Of note, U.S. fall enrollment grew for the first time since the beginning of the pandemic, up 2.1% compared to 2022. Specifically, academic performance was driven by continued double-digit growth in our zyBook STEM courseware and good uptake of our institutional models such as Inclusive Access. Inclusive Access is an institutional sales model that adds the cost of digital course content into student tuition and fees.
Professional is up 3%, driven by an improved retail channel environment and fewer returns. Our Dummies franchise also saw growth this quarter. We're also seeing increased momentum in new title signings as a result of our renewed focus on our core. Adjusted EBITDA for learning this quarter was up 13%, with revenue growth and restructuring savings as the primary drivers. Our Q2 adjusted EBITDA margin was 36%, up from 34% in the prior year period.
Let me provide an update on our multiyear cost savings and optimization plans. We talked about driving towards a leaner organization and more agile workforce. Of note, around 20% of our workforce is attached to divestitures or around 1,300 FTEs. We expect to close on University Services in early '24. We also executed on major restructuring actions in Q2, notably in corporate, but also related to our business reorg. This resulted in a $25 million charge in Q2 that's expected to yield $65 million of run rate savings.
Let me walk you through it. Of the $65 million of savings, around $30 million will be realized this fiscal year and is executed as part of our plans and guidance. Note the $30 million is not included in our $100 million run rate savings goal for fiscal '26, which I introduced earlier this year. As previously mentioned, any in-year savings reflected in our fiscal year '24 guidance does not count towards that $100 million. However, the remaining $35 million of run rate savings will be incremental in fiscal '25 and will be part of the $100 million. So we're already about 1/3 of the way towards that goal. We'll provide more details around our multiyear plans at our January investor update.
We've talked a lot about improving operating efficiency over the last year. During the quarter, we reorganized into one go-to-market team under one business leader and consolidated all of our global operations together under one ops leader. We're starting to see the benefits of this change already in driving prioritization, organizational and go-to-market synergy and effectiveness as well as improved culture. We've talked about transitioning to a lighter, more modern infrastructure.
We continue to make good progress on unifying our research end-to-end publishing operation, where we're transitioning from 3 publishing platforms to 1 platform that will handle everything from submission to peer view to customer support. The revenue and cost benefits of 1 platform or many and include further increased auto retention, faster turnaround times and optimize article transfer and reduced cost per article.
Finally, we launched real estate optimization Phase III with 4 reductions in existing office footprints, including floor consolidation at our Hoboken corporate headquarters and 3 office closures.
Let me quickly turn to ongoing corporate expenses. We saw a $3 million increase this quarter due to the costs related to the CEO transition and lower incentive accrual than prior year, offsetting savings related to prior year restructuring. We expect corporate expenses to be up moderately this transition year as we're still carrying costs related to held-for-sale assets. As we transition out of these assets, our cost ratios will come back in line. We also have the higher employee costs related to the incentive compensation reset and overall wage inflation this year, as discussed in June.
To refresh, about 80% of employees are part of the incentive compensation plans, and we saw a significantly lower payout accrual in fiscal '23 due to underperformance. Given all these near-term dynamics, fiscal '24 remains a transition year. The benefit of the work we're doing now will be fully realized in fiscal years '25 and '26.
Turning to our cash flow and balance sheet. Free cash flow for the 6 months was a use of $132 million compared to a use of $126 million in prior year. The variance is primarily driven by lower cash earnings. As always, our cash flow is normally a use in the first half of the year due to the timing of collections for general subscription, which are concentrated in the third and fourth quarters. Of note, we do not provide an adjusted cash flow metric, so numbers include the businesses held for sale or sold. CapEx of $48 million was moderately lower than prior year, and there were no material acquisitions to date. Our focus right now is executing on our divestitures and our cost savings plans.
Through the half, we allocated $61 million towards dividends and share repurchases. We spent $23 million or $5 million more in this half to acquire 669,000 shares at an average cost per share of $33.64. This compares to 382,000 shares repurchased in the prior year. Our current dividend yield is around 4.5%. Net debt-to-EBITDA ratio was 2 at the end of October compared to 2.1% in the prior year. While we're in a good financial position, our priority during this transitional period is to further reduce our debt and manage our interest expense while continuing to invest to scale in research and repurchase shares opportunistically.
Note, we've reduced our net debt by over $40 million compared to the prior year period. On to our transition year outlook, which excludes the businesses held-for-sale. We're reaffirming our guidance. On revenue, performance is mixed within our segments, but in line overall. We're projecting research revenue to be flat to down low single digits versus just flat in our original guidance given the lag between submissions and publications and continued market softness in recruiting.
Revenue excluding Hindawi is now projected to grow 2% compared to a 3% original projection. In Learning, we're now seeing an improved environment for academic and professional publishing driven by better execution in our channels and continued uptake of our inclusive access model in zyBooks Courseware. So Research is tracking a little behind plan and Learning tracking ahead. We look forward to sharing our fiscal '25 targets in late January.
Adjusted EBITDA, excluding the divestitures, is anticipated to be in the range of $305 million to $330 million with an EBITDA margin of 19% to 20%. This is down from 23.3% in fiscal '23. And to refresh, we continue to expect to more than recover our fiscal '23 EBITDA margin of 23.3% as we exit fiscal '24 and expand from there.
On adjusted EPS, we continue to anticipate a range of $2.05 to $2.40. We have the nonoperational items weighing on EPS, including higher tax interest expense and lower pension credits. With regard to free cash flow, our visibility continues to be limited with continued unknowns. So we're unable to provide a meaningful cash flow outlook at this time. As you know, we don't report an adjusted free cash flow metric, so it includes the held-for-sale assets. We're actively working through these divestitures and can adequately project the timing and scope of related restructuring programs.
That said, we do expect free cash flow to be materially lower this transition year, given the combination of lower projected cash earnings, higher restructuring payments and higher interest payments. We consider these to be largely temporary, given this year's structural improvements. As we make our way into fiscal '25 and '26, we're fully confident in our margin trajectory, and in the cash generation of the core business. We will 'provide a fiscal 2016 free cash flow target at our January investor update. And with that, I'll pass it back to Matt.

Matthew S. Kissner

Thank you, Christina. To summarize, before I open it up for questions, Q2 and year-to-date performance was mixed, but largely as expected, and we anticipate a better second half as research output grows, comps get less challenging, learning carries forward some of its Q2 momentum and restructuring savings kick in.
We are relentlessly focused on execution and moving with certainty on our value plans, our operational improvements, our reorg and our culture. We are going to block and tackle better than we have before. We're going to look for synergies and uncover new (inaudible) I feel a real sense of energy in the place and a commitment to move forward with urgency. That said, fiscal '24 remains a transition year as we work through our structural improvements and rightsizing and as our core drivers rebound.
We fully expect to deliver performance and margin improvement in fiscal '25 and '26. And finally, as a reminder, January '25 will be our virtual investor update. I want to thank all of our Wiley colleagues for their hard work and dedication, especially over these past 6 months. I wish them and all of you a very joyful holiday season and a happy and healthy 2024. I'll now open the floor to any comments and questions.

Question and Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Daniel Moore from CJS Securities.

Daniel Joseph Moore

And I hope you'll indulge me because we've got a lot of moving parts, so I'll probably ask a few questions here. But we'll start with Research. Maybe just remind us of the typical lag between submissions and publications kind of what the outlook for submissions growth looks like over the next few quarters to the extent you have visibility there? Just trying to get a sense for what the glide path might be back toward a more normalized growth algo or outlook for the Research business? .

Matthew S. Kissner

So Dan, it's Matt and nice to meet you virtually, and there are a number of moving pieces here understood. We have the benefit of Jay Flynn participating today and he's very close to these issues. Let me hand it over to Jay.

James Flynn

Thanks, Matt. Dan, thanks for the coverage and thanks for the question. I guess I'll start by saying let's look at where we were as we exited last fiscal year and what we saw in the prior 12 months. As we talked about in the Q4 earnings call, we experienced and the market experienced a decline in submissions by about 6% for calendar '22, and that bled into our fiscal -- our last fiscal -- that's driven primarily by what we call the COVID snapback during COVID, during lockdown, researchers were at home, writing papers available for peer review, and kind of cleaning out their labs in terms of the research results they had to publish.
What wasn't happening during that time was experiments. Experiments in the field, experiments in the lab, as researchers returned to the lab, they had to restart their work. And overall in the market, it was about -- it was down about 6% in our fiscal last year. We predicted, and we thought we would see a return to historical norms of submission volume in the kind of mid-single-digit area submission growth in that range. What we've seen so far year-to-date in our core exceeded our expectations. So 9%, there's a little bit to unpack there.
We've got really extraordinary growth in emerging markets. In India, for example, in more mature markets like China, we're seeing great growth. And in fact, across almost every mature market, excluding the United States, we are up far past our expectations in terms of submission. Now there's a lot of variability and quality of submissions depending on region, there is variability in terms of subject area, and there's a lot of moving pieces in terms of transitional agreements and Gold OA. Bottom line, it takes about 6 months for us to get that content through the mill and not every single paper is going to turn in -- every single submission is going to turn into a paper.
But in terms of what we have visibility on, we now know that the top of the funnel has been filling up faster than expectations, and that gives us some reassurance about being able to not only meet our publication targets for this year, but also gives us some confidence that we're returning to those historical norms.

Matthew S. Kissner

The other comment I would add, Dan, and then back to you is, obviously, volume that's coming in the door today is going to give us a nice kickoff point for the new fiscal year. because of that 6-month publication lag, it's a little late time. So we're, I'd say, encouraged that we'll enter the new fiscal year with some decent wind behind our back in this regard.

Daniel Joseph Moore

That's perfect. Very helpful and certainly encouraging. Christina, regarding the restructuring efforts, the detail you gave is really helpful. So to summarize, we have $30 million left on the $65 million in run rate savings that you called out. And that $30 million beyond fiscal '24 is part of the $100 million that you previously targeted. So -- and I did ask this last time, I believe, but -- so I apologize for the repeat, but how much of the $100 million -- the remaining $100 million beyond this year simply offsets dis-synergies following divestments or general inflation or investments versus you can maybe earmark to fall to the bottom line?

Christina M. Van Tassell

Sure. Thanks, Dan. Nice to talk to you. It's actually $35 million, just to correct -- that's the run rate savings that it's counting towards the future years, so in '25 and beyond, so towards the hundred, excuse me, it's in 2 general areas. It's in the rightsizing of our corporate infrastructure, including stranded costs as well as our operating efficiencies. And we're going to talk more about this in January, but we will be reinvesting a portion of those savings back into the business. We're minimizing any kind of increased cost base outside of growth opportunities, but we are going to talk more about that in the context of our formal commentary and strategy in January with what will chop the bottomline and what will be reinvested.

Daniel Joseph Moore

Got it. Certainly look forward to dissecting that in a little bit more detail. Maybe if you can give us a little bit more of a detailed update on Hindawi as granularly as possible. When we acquired it, it was a $40 million revenue business on its way to $80 million. Obviously, we've gone through all the details of what's taking place. Is it fair to assume that it's somewhat more permanently impaired relative to your initial goals for the business? In other words, now that it's being folded into the rest of research, should it grow in line with research? Or is there an opportunity for a more significant rebound or recovery?

James Flynn

Dan, it's Jay. I'll take this one. I just want to state the obvious, right, the recovery is taking a little longer than we had previously envisaged, and that's down to what I would characterize as the impact of some decisions that we took to preserve the long-term health of the business. So one of the things that we wanted to make sure that we really addressed head on was the business processes and the management processes that we have in place at Hindawi. So we have really tightened up our controls. We've installed a new management team and we put a team of research integrity experts in place, not just for Hindawi, but across our entire research portfolio. This has had a dampening effect on article volume coming through Hindawi.
As you know, I'm sure this is a model where it's entirely volume driven. And so when we look at those controls, we feel like that's the right thing to do long term for the business. We also feel very much like the portfolio will benefit from being part of the larger Wiley publishing organization. And so we've taken steps to that effect over the last 6 months and really bringing editorial teams together, bringing marketing teams together, bringing our operations groups together to form a single journals group.
And so those decisive steps together, I think, give me confidence in where we're going to go with Hindawi. I also want to say that let's just focus again on the couple of the key numbers. It's about 10% of the total journal portfolio and about 5% of total research revenue. And so while we focus on it, I do think that where we're going to wind up is something that's more in line with overall research performance as it relates to Gold Open Access. So not as it relates to either Hindawi priors or to subscription revenue. But as it relates to Gold Open Access, which Christina characterized already, I'll kind of leave it at that.

Christina M. Van Tassell

And then I'm just going to add just on the -- looking at a long-term horizon and the recovery, I'll say 2 things. One is we didn't cut expenses in the near term in Hindawi because we're so confident that temporarily we wanted to fuel the recovery but in a long term, we return -- when we recover back to our long-term volume as J Son's is a very volume-driven business. we do see margins recover to 40-plus range. We did end thought to turn integrity, which is what Jay was talking about as well, but we do see a very healthy margin profile business coming back.

Matthew S. Kissner

Yes. One last comment, Dan. There's a market for Gold Open Access and there's a market for what these journals do. And just not to put too finer point on it, but gold it grows in the 20s, generally speaking, for the last few years, and that's sort of the profile that makes us continue to be excited about these terms.

Daniel Joseph Moore

Got it. That's helpful. It gives a little bit more context of where -- kind of where you're thinking right now. So I appreciate it. Shifting to the sale of University Services. I believe it's calendar '24? Is it Q1 when you likely expect to close? And maybe just talk about the conditions needed to achieve -- to receive the first $110 million proceeds from the seller financing and then the additional $40 million earn-out. Is there a -- obviously, I know you don't want to get tied to a specific time frame, but just how should we be kind of framing or thinking about the timetable to actually achieving proceeds from that sale?

Christina M. Van Tassell

Sure. I'll take that one. Thanks, Dan. We are working to close early in the calendar of '24. And so as we noted, and I think in our previous announcement, we'll have $110 million to do a close, payable in either cash or a promissory note, and that's going to depend on the availability of proceeds from any third-party debt financing from our buyer, which is Academic Partnerships.
On the earnout, it's a $40 million earn-out and that's achieved based on mutually agreed revenue targets over the next 2 fiscals. So that's May 1 of '24 through April 30, '26. And then we also receive 10% of the buyers' equity as well.

Daniel Joseph Moore

Perfect. Last for me, and I'll jump out again. For a long time, the goal or part of the goal, it was always a balanced capital allocation, but was to take the exceptional or extraordinary cash flow generated from research and use it to grow in other areas. What is the plan for capital allocation going forward? Is it the growth dividend and buy back stock and invest to protect the core as the Board laid out? Or do you plan to pursue further M&A opportunities once the restructuring and divestments are complete?

Matthew S. Kissner

Dan, I'll begin and then ask Christina to comment, we are refocused on the core business here, Reflecting back, I think, would be probably could have done more around our core business. There are opportunities that Jay is already uncovering as he's running these 2 now unified business units. So we -- anything we do will be focused around that core. And in terms of what we're doing in terms of cash allocation, I'll ask Christina to comment on that.

Christina M. Van Tassell

Yes. Sure, I'll just say, as always, our capital allocation strategy is a balanced one. You're not likely to see any M&A as I'm sure you've heard, we're very focused in the near term on divestitures and rightsizing. We will have opportunistic organic investments in research to scale publishing as well as our solutions, we'll talk more about that in January.
We're always managing our debt. This is a really important one for not just Wiley, obviously, in the marketplace. We're in really good shape financially, but the interest costs are higher, and we're looking to manage that. And yes, our dividend is the 30th consecutive year of increasing our dividend. It's been at $77 million a year that 2020. So we've been managing that with share repurchases, which, again, we're actively managing as well. So those are our capital allocation elements, we're always looking to tweak before, after and during these portfolio moves. So we'll talk more about that again in January.

Operator

(Operator Instructions) Your next question comes from the line of Sami Kassab from BNP Paribas.

Sami Kassab

I have 2 questions, please. The first one is on academic learning. Could you share with us the share of revenues coming from Inclusive Access? And where do you see that number going to in the next few years? And the second question is on research publishing. Would you be able to comment on the revenue growth trends within the general subscription business versus the Gold Open Access business for the quarter? And how you see general subscription revenue trends going forward midterm?

James Flynn

Sami, It's Jay Flynn. I'll jump in here first. So as we mentioned in the first part of the call, we did see positive momentum with our Inclusive Access models, it's a small percentage of the revenue. We don't break it out publicly. But what I would say is it's a sign of an increasing customer demand for that product. And we feel good about both the digital growth of our courseware program inside of academic learning, but also about our ability to innovate around business models and I think that this is a trend in academic for a variety of reasons and all, benefits students and learners. And so we're going to continue to participate in that. It's a low base, and it will continue to grow from that base in line with the market expectation.
And in the context of your question about research publishing, let me just take a step back and reiterate that this is a very mixed market right now as Christina said. We have some markets that are subscription only. We have many which are much further ahead on the OA transition, and that can be cut by geography, for example, in Europe, we've got a much more OA centric market, whereas in, for example, the Asia Pacific region, it remains primarily a subscription market for us. And in the United States, it's very, very mixed.
And so for those reasons, we generally tend to think about it as a left pocket, right pocket and the movement of revenue between a pure subscription model and a transitional agreement for us is really about business model and meeting the customer where they are. It's about pricing models and meeting the customer where they are.
And it's by responding to what I think is a good trend in the market to make sure that anybody can read the content that we've moved outside of the paywall with our Open Access publishing model. So while we don't break those 2 numbers out, I think it's important to say that we continue to benefit from participation in this mixed model economy and that as we indicated earlier in the call, we expect performance to improve in H2 as volumes begin to improve. And we already talked about what those indicators look like on a go-forward basis, with some submission volumes returning to historical norm.

Operator

And we have no further questions in our queue at this time. I will now turn the call back over to Mr. Kissner for closing remarks.

Matthew S. Kissner

Thank you all for joining the call today. We look forward to sharing more at our January 25 Investor Update and then again at our Q3 earnings call in March. Have a good day.

Operator

This concludes today's conference call. Thank you for your participation, and you may now disconnect.

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