Brian Campbell - VP, IR Brian A. Napack - President and CEO John Kritzmacher - CFO and EVP, Operations.

Drew Crum - Stifel Nicolaus Peter Lukas - CJS Securities Nick Dempsey - Barclays Capital.

Good morning and welcome to Wiley's first quarter earnings call for fiscal year 2019. As a reminder, this conference is being recorded. At this time, I'd like to introduce Wiley's Vice President of Investor Relations, Brian Campbell. Please go ahead, sir..

Hello and welcome to Wiley's first quarter fiscal 2019 earnings update. A few reminders to start; the call is being recorded and may include forward-looking statements. You shouldn't rely on these statements as actual results may differ materially and are subject to factors discussed in SEC filings.

The Company does not undertake any obligations to update or revise forward-looking statements to reflect subsequent events or circumstances. Wiley provides non-GAAP measures as a means to evaluate underlying operating profitability and performance trends.

Non-GAAP metrics, which generally exclude items that impact comparability, comprise the following; adjusted EPS, free cash flow less product development spending, adjusted operating income and margin, adjusted contribution to profit, and results on a constant currency basis.

These performance measures do not have standardized meanings prescribed by U.S. GAAP and therefore may not be comparable to the calculation of similar measures used by other companies. They should not be viewed as alternatives to measures under GAAP. Also note, we abbreviate constant currency as CC.

Please see the reconciliation and explanations of all non-GAAP financial measures presented in the supplementary information included in our press release.

For those who prefer to listen to the call over the phone but still want to view the slides, we recommend that you click on the gears icon located on the lower portion of the left-hand side window and select Live Phone.

This will eliminate any delays in viewing the slide transitions as well as remove any potential background noise if you prefer to ask a question. After the call, a copy of this presentation and a playback of the Webcast will be available on our Investor Relations page. I'll now turn the call over to Brian Napack, Wiley's President and CEO..

Good morning and thanks for joining us. As you know, I arrived at Wiley last December. I joined a company with a great legacy, a unique culture, strong assets, and enormous potential.

Few companies have shown the staying power of Wiley over the generations and this is largely the result of a culture of adaptation, innovation, and dedication to a shared mission. In my first quarters, I've been focused on understanding this foundation while beginning to define a strategic direction that can carry Wiley well into the future.

I will start off today by sharing some thoughts about where we are today and a bit about where we're going. More details will follow in future calls. As you know, Wiley is a central player in two critically important and highly dynamic markets, research and education.

These two large markets are universally acknowledged to be the twin engines behind economic growth and human advancement. As such, investment in research and education continues to rise all over the world, delivering lots of opportunity to Wiley.

At the same time, research and education are out of necessity undergoing fundamental transformation driven by innovation and enabled by technology. Frankly, the stakeholders in research and education need better solutions that deliver better outcomes, and this is demanding innovation throughout the value chain.

Needles to say, such transformation makes life interesting to say the least for a 210-year-old player. Nonetheless, it is our job to deliver the content, tools, and services that our customers need to achieve the outcomes that they seek.

Over the years, Wiley has built a leadership position in the traditional segments of these markets, which is journals and course content, and in new emerging segments such as research platforms and tech-enabled education services. Going forward, perhaps surprisingly, we see lots of opportunity in both the traditional and the new.

We are well-positioned. Our challenge is simply to move fast and execute well. Wiley's foundational strengths are many.

We have a broad market footprint across research and education, premium brands in scholarly research and in learning products and services, content strength in the critical high-demand subjects and disciplines, know-how to create and curate products that drive outcomes, leading digital tools, platforms and capabilities essential for success, channel strength across multiple segments and geographies, strategic partnerships with leading universities and top employers, and strong financial position.

Most importantly, we have the unique Wiley branding culture that enables our colleagues to take the long-term view, value both the traditional and the novel, and put our customer's success above all. As we move forward, our success will be driven by building on the core while innovating relentlessly on behalf of our customers.

Let me walk through some of the high-level themes that are coming out of our ongoing work in our strategic planning process. The first theme is that we are redefining publishing at Wiley and we are doing so in both research and education. We are, at our core, publisher.

Happily for us, curated high-quality content remains essential in the ever-changing knowledge economy. It will remain an important part of Wiley's world. But the definition of content is changing and growing and our role in the market is changing and growing with it.

Content of course no longer means static, two-dimensional words and images on a printed page.

Publishing is about achieving outcomes for researchers and students, our twin North Stars, and this requires dynamic content available, where and when it is needed the most, powerful integrated digital tools and services that enhance the impact of the content, and a variety of essential services delivered to more places in the value chain.

Thus, we are reinvesting in content in critical high-demand areas, building powerful digital tools and platforms, enhancing our impact with value-added services, and embracing new channels and business models that increase access, affordability, and outcomes. Of course, this plays out differently across our portfolio.

In research publishing, the core underlying supply and demand characteristics remained solid. Research articles, which bring new knowledge to light, play an irreplaceable role in the world.

Article output continues to grow strongly while new disciplines and emerging geographies continue to create new supply and strong demand for the content in our journal articles. This expansion is powered by the sustained growth of global R&D funding.

Based on this underlying strength, we continue to drive growth by strategically building our research brand portfolio and expanding our publishing program. Open access and hybrid publishing models present opportunities for us, both to publish more and to ensure that our articles get read more widely.

This increased usage in turn enables our researchers' goals, which are above all about delivering greater impact, and as a research publisher this impact is our reason for being.

Going forward, we foresee a healthy mix of business models and we are actively working with market leaders to ensure that our publishing delivers a very strong value proposition, irrespective of the distribution model. Of course quality matters and the strength of our publishing continues to grow.

We maintain a leading position in the annual Journal Citation Reports, the JCR, released in June. JCR is used by the industry to analyze the performance and impact of peer-reviewed journals. Wiley journals rank #1 in 27 categories across 25 titles and achieved 349 top 10 category rankings.

This past year we saw an almost 10% increase in JCR articles, which is based on the number of citations received. It is our biggest increase since 2008 and gives us nearly a 10% share of overall JCR articles. This performance is critical. Researchers want to publish in Wiley journals because they deliver impact.

In our research publishing business, we have been building out our research platforms business and it continues to thrive. Atypon, a fully SaaS business, now delivers over half of the world's research output and continues to grow nicely.

Working from here, we continue to look for ways to innovate, enhancing the research journey through many touch points with researchers, publishers, and libraries. Our research platforms business is the perfect complement for our research publishing business. In education, we are also redefining publishing. In fact, we are moving well beyond publishing.

The overriding challenge for education writ large is how to deliver real outcomes for learners faster and more cost-effectively. So, naturally, these are the goals that we are focused on in our businesses that serve learners in institutional, corporate, and consumer settings.

We continue to deliver the Gold-standard career-focused content, redefined of course, that is in high demand by students and career professionals, and to do so profitably.

These content businesses, which deliver courseware, books, and reference materials, continue to provide good cash flow despite some volume declines resulting from format and business model shifts, most notably from print to digital and from unit purchase to new business models such as textbook rental.

We expect these businesses to return to growth once these transitions normalize. We are also enhancing the educational experience with powerful platforms, such as our recently relaunched WileyPLUS Learning Platform. Must-have content delivered through powerful platforms ensures positive outcomes for students and for us, a winning combo.

The new WileyPLUS employs powerful features such as mobile-ready content for anywhere anytime access, full instructor customization by learning objective, and adaptive practice which allows students to see what they don't know and focus their work in the areas they need it most.

I'm happy to say that the new WileyPLUS has been well-received and that registrations are strong in this critical back-to-school season. We're working to ensure that great education content is available on all viable third-party platforms and to all the emerging distribution models, so that it is readily accessible and increasingly affordable.

We continue to actively expand both our book rental and Inclusive Access programs. These programs increase sell-through in exchange for more attractive pricing. Inclusive Access reduces cost while ensuring that all students have the required materials on day one. Studies show that this availability makes a big difference in student performance.

Affordability continues to be a major focus for our customers and thus for us. We continue to see a major growth opportunity in tech-enabled services that help institutions to grow and succeed by delivering degrees that provide better, more career-relevant outcomes, and ultimately a better value proposition to students.

Thus, a major theme for us continues to be the expansion of our Wiley Education Services business, which includes online program management, student lifecycle software, and other tech-enabled service models. This business is off to a very good start this year, growing both enrollment and its portfolio of high-quality partners. More on that later.

We will continue to grow the array of Gold-standard services, software tools, and business models, and deliver them in packages tailored to meet the specific needs of our individual clients.

There is no doubt about the high demand for what we do, nor the positive financial and reputational impact that it has on the institutions that we partner with, not to mention the positive impact on the students to whom we deliver accessible affordable education that prepares them to succeed in their careers.

Make no mistake, this is what Wiley Education Services is about and our partners recognize the value. Today, a university degree is just the beginning of a lifelong journey throughout one's career. The pace of change in the economy continues to accelerate, and with it the ongoing requirements for up-skilling and re-skilling.

Corporate and consumer spending on innovative solutions to address the so-called skill gap continues to increase rapidly. That's why we're so interested in opportunities residing in our corporate education businesses.

Through CrossKnowledge and our assessment businesses, we have a foothold in the most innovative and fast-growing segments of this market.

Our goal is to be the trusted advisor to our corporate clients, delivering powerful content, tools, platforms, and tech-enabled services that help them create the workforce they need to stay competitive in the rapidly changing global economy. We continue to look at opportunities to innovate and expand in these businesses.

Throughout the lifelong career journey, certification and new forms of credentialing continue to increase in their importance. As they do, our strong position in test prep also positions us well to ensure that learners are prepared to master the skills and gain the credentials that they need. We continue to view this as a growth area.

Looking ahead, we will continue to invest in the development of products and services that help students to succeed on their career journey, starting in school and bridging into and throughout their careers.

We are very excited about what we're seeing in the market for online education and programs, skill-based credentialing, corporate learning and training, and other services for learning institutions. There is no shortage of opportunity. Of course the ongoing transformation in our markets brings challenges along with the opportunity.

To state the obvious, successful navigation of these waters require smart strategies, decisiveness, focus, and execution. This will require continued investment in our talent, our technology, and our infrastructure. We know that in our competitive markets we must continue to become more efficient and more effective in everything we do.

John is spearheading our optimization programs which are ongoing, bearing fruit in the form of both cost savings and improved operating performance. Finally, we expect to enhance our internal investment with acquisitions that can enhance our strategies and bring share gains, synergies, and new sources of growth.

In a moment, John will take you through our results in more detail. I'll simply characterize them as being consistent with our internal plans and full-year guidance. Just some of the highlights; Research continues to show good underlying demand. Society net wins in the quarter were $2 million, with $8 million renewed and no losses.

2018 calendar year subscription renewals were solid. 2019 discussions are just getting underway. Article output and article usage continue to grow, with Open Access publishing growing by double digits. We continue to drive towards becoming a leader in that space.

As noted, our world-class journal portfolio was prominently featured in the annual Journal Citation Report, a key measure of journal impact. Important to note, there are significant open access mandates and hybrid models taking shape in parts of Europe.

We intend to lead in this area and are thus working closely and collaboratively with our partners and our customers to meet their needs while ensuring our future success.

I'm pleased to say, we announced two new partnerships in Education Services, the University of Glasgow in Scotland and the University of Bath in England, both very highly prestigious schools. They represent our third and fourth online program partnerships in the U.K.

and include degree programs as diverse as economics and finance, data analytics, public health, computer science, and primary care. In addition to the new signings, we extended an existing regional partnership, Our Lady of the Lake University, for an additional seven years, taking us through 2026.

OLLU partnered with Wiley in 2011 to help realize the University's five-year strategic plan for 2013 through 2018. It has been a real success story in what forward-looking leadership can do in regional education with the right strategy and right support. Our first program together, Master of Social Work, was launched in 2012 with 14 students.

Today that program has more than 1,000 students. Just a few days ago, we announced a 10-year extension with Saint Mary's University of Minnesota. This partnership will run through 2029 and includes the launch of two new graduate programs with many future programs under consideration. This brings the number of programs at Saint Mary's to 16.

Schools like OLLU and Saint Mary's are strong healthy institutions that are vital parts of their regional communities. Wiley helps them to grow and thrive in a challenging environment where many regional schools are struggling. I'm thrilled about leadership position we have in this critical fast-growing market.

The education services we provide, whether in full-service models or targeted bundles, are of increasing value to institutions of all shapes and sizes and certainly to the students themselves. Our strong pipeline of opportunities clearly speaks to the increasing demand for our industry-leading education services.

We've had some successful product launches in this quarter, starting with our new WileyPLUS platform which went live in August. Feedback has been terrific and uptake is ahead of expectations. Important to note, the new WileyPLUS is being launched in stages with our course catalog being rolled out on this platform in the semesters to come.

We also launched Inclusive Access programs, as described, to make Wiley course materials more affordable and easier to purchase. In essence, we offer discounted prices in exchange for near full sell-through. To date, we have won approximately 600 Inclusive Access adoptions at over 100 campuses and the program continues to grow rapidly.

Partnerships continue to be a critical component across all of our businesses. After the quarter closed, our test prep business announced two new partnerships in Hong Kong, one with the Hong Kong Institute of Certified Public Accountants in one new qualification program, and another with KORNERSTONE Training on CFA & FRM exam preparation.

Our assessment in corporate learning businesses continue to show good momentum as enterprises demand increasingly sophisticated personality profiling and training capabilities. We have important product development initiatives underway, notably around our highly sought after franchises, The Five Behaviors of a Team and Everything DiSC.

We are also seeing strong growth in our independent partner network. At CrossKnowledge, the core corporate e-learning business continues to grow well with 13 new agreements signed with major brand-name corporations in the U.S., France, the U.K., and elsewhere. We've made great progress in our strategic planning this quarter.

We have taken a data-driven customer-centric approach that is bearing fruit in both our plans and our ongoing operations. We have learned a lot about our markets and our own performance and positioning. We've identified opportunities, risks, and operating imperatives.

Our long-term plans have started to emerge and we are wasting no time in implementing critical initiatives in real-time. We have shared some of those learnings today with more details to follow in future calls. We also announced Taneli Ruda as our Chief Strategy Officer.

Taneli, the former Head of Corporate Strategy at Thomson Reuters, has extensive experience identifying sustainable growth and portfolio strategies and in translating complex strategies into action. He has hit the ground running and is already contributing significantly.

Our business optimization program continues to roll along under John's exemplary stewardship. We expect to update you on those initiatives in coming quarters. Finally, we raised our annual dividend for the 25th consecutive year, a remarkable accomplishment. I'll now pass the call over to John to take you through our quarterly performance..

Thank you, Brian. Revenue for the quarter was essentially flat on a U.S. GAAP basis or down 1% at constant currency. GAAP operating income and EPS rose significantly, primarily due to restructuring charges in the prior year totaling $26 million and restructuring credits in this quarter totaling $6 million.

These credits reflect lower severance cost than originally estimated for our restructuring actions. Adjusted operating income and adjusted EPS declined 27% and 29% respectively, driven by investments in growth initiatives and technology. Also impacting EPS was a higher effective tax rate and a slightly higher share count.

As Brian noted, our first quarter financial performance was consistent with our expectations. I'll be talking to segment results on a constant currency and adjusted basis, unless otherwise noted. Research revenue was flat overall, with Open Access up 22% and Atypon up 4%.

Journal subscription renewals for the calendar year 2018 finished strong with growth of 2% and our society business continued its positive momentum. Adjusted CTP was down 13%, mainly due to investments in editorial and marketing capacity to expand research article publishing, particularly for China and India.

Higher costs also reflected modestly higher investments in technology to better serve researchers and our subscribers. Publishing revenue declined 5%.

STM and Professional publishing grew 3%, driven by strong gains in the business, finance, and professional education categories, but was offset by a 16% decrease in education publishing, mostly from continued print declines. Test preparation was flat and WileyPLUS was down in the seasonally not meaningful first quarter.

As Brian noted earlier, the new release of WileyPLUS has received very favorable reviews so far and registrations are ahead of expectations. Looking ahead, we are preparing to launch new Inclusive Access and alternative rental models for education publishing in the spring semester. Adjusted CTP was down by about 2 million, mainly due to lower revenue.

The Solutions segment showed good momentum this quarter with top line growth in all three lines of business and continued profit growth overall. As Brian discussed, Education Services signed two important new partnerships in the U.K. and extended two existing U.S. partnerships, one in the quarter and another more recently.

Net online degree programs rose by four and our partner and program opportunity pipeline is strong. Professional Assessment rose 6%, driven by the Everything DiSC and Five Behaviors of a Team franchises.

As Brian noted, we continue to build out our worldwide independent partner network and develop new product offerings in the Professional Assessment domain. Corporate Learning has gotten off to a solid start, with strong double-digit growth in its core learning business, including growth in France, the U.S., and the U.K.

We signed 13 new corporate customers in Europe and the U.S. but the wind-down of the French government related business continues to be a drag on top line performance bringing Corporate Learning revenue growth overall down to 2%. Adjusted CTP for the Solutions segment rose by about 2 million, driven by higher revenue.

Our overall financial position remains rock-solid with significant capacity for investment. We will actively pursue strategic acquisitions in our markets while continuing to return cash to shareholders.

Net cash used in operating activities was $150 million, compared to a net use of $81 million last year, largely due to swings in working capital, particularly related to payables performance which was much more favorable in the year ago period.

Free cash flow less product development spending was a use of $170 million compared to a use of $117 million in the prior year. Cash flow from operations is seasonally a use of cash in the first half of Wiley's fiscal year, principally due to the timing of collections for annual journal subscriptions.

Capital expenditures, including technology, property and equipment, and product development spending, declined $16 million, to $20 million, due to the completion of our headquarters' renovations in the fourth quarter of fiscal 2018, the launch of our ERP release for journal subscriptions at the beginning of this first quarter, and the impact of reporting changes from the adoption of ASC 606.

Finally, in June we increased our quarterly dividend for the 25th consecutive year, a 3% increase to $0.33 per share. For the quarter, the Company utilized $19 million of cash for dividends and approximately $8 million for share repurchases at an average per share cost of $63.48. I'll now pass the call back to Brian..

Thanks John. Fiscal 2019 is a year of investment in a foundation that will enable our strategy while improving and sustaining revenue growth over the longer term.

We're investing in sales and marketing capabilities to generate organic growth, technology and product development initiatives, content management to publish more and be more effective and efficient at it, targeted hires, and China and India build-outs.

We continue to anticipate flat revenue overall as modest growth in Research and Solutions is partially offset by modest declines in Publishing.

Adjusted EPS is expected to be down mid-single-digits, primarily due to investments in growth and business optimization initiatives, while a decline in cash provided by operating activities is expected from anticipated operating performance and lower working capital gains.

Finally, capital expenditures are expected to decline, although investments in product development and optimization initiatives are expected to grow. Included in these projections, the implementation of ASC 606 will move about $10 million of spending capital expenditures to cash from operations.

Note that under ASC 606 new revenue recognition guidance, certain costs to fulfill contracts which were previously included in product development spending are now included in cash flow from operating activities. As you have heard, we believe that our markets are ripe with opportunity.

We're moving aggressively after this opportunity, but we must invest to improve our agility and grow. So, what are the key takeaways from the quarter? Again, results were in line with expectations.

We continue to see good underlying momentum in Research, including continued net society wins, Open Access growth, improved citation results, growth in article output, and growth in usage.

We're seeing hybrid subscription and open access models continuing to materialize in parts of Europe and we're working closely with key stakeholders to ensure a healthy research ecosystem and our shared success.

We're seeing good underlying momentum in Solutions with new university partnerships and net program growth in Education Services, good franchise and partner momentum in Professional Assessment, and 13 new customer signings in Corporate Learning.

We are expanding our professional capabilities in tech-enabled education services for both institutions and corporations. Wiley will continue to lead in these high-growth high-potential areas of education. In Publishing, we launched the new WileyPLUS and saw a better-than-expected surge in registrations.

We introduced an inclusive access model for course content distribution and we saw very strong growth in trade publishing which continues to be a strong financial contributor. We're investing in talent throughout the organization by both bringing in new talent and developing our own wonderful Wiley colleagues.

We are building new muscle in areas like technology, product management, program management, marketing, and business development. We have made good progress in our strategic planning, bringing acute focus and an analytic eye to our business unit and corporate efforts. We will continue to share directions with you as we move along.

Business optimization initiatives continue apace and this continues to be a major pillar of our ongoing activity. We are reaffirming full-year guidance for revenue and EPS. Our markets are changing seismically in some places, slowly in others. Change is creating opportunity for those well-positioned and agile enough to capitalize on them.

My Wiley colleagues and I are building a company that can thrive in the long run. We have the necessary market position, brands, content relationships, and financial strength.

More importantly, we have an increasingly crisp vision for the future and the talent and unique company culture to achieve our ambitious goals, and more importantly to help our many customers achieve their ambitious goals through research and through education. With that as background, we welcome your comments and questions..

[Operator Instructions] We'll take our first question from Drew Crum with Stifel..

Let me start with WileyPLUS guys.

Can you give us a sense as to how broad the rollout is for the fall semester and when should we see a pickup in revenue for that line? I know there are some revenue recognition issues with WileyPLUS but should we see some impact in fiscal 2019?.

So the implementation of the new next generation of WileyPLUS, as we said, begins in this semester. It's well underway. The registrations are favorable to our expectations. The number of courses that we're implementing is on the order of a dozen as the initial wave, and then we'll bring on several more courses for the spring semester.

And we'll have the majority of our WileyPLUS offering on the platform by the following fall. We would expect to see improvement in WileyPLUS revenue be coming our way through our second and third quarter. So, more to come later, but we should see a pickup based on the new product as we make our way into the fall..

Okay.

And John, did I hear you correctly on the journal subscription renewals up 2%, was that for calendar year 2018 or did I misheard that?.

Yes, you heard it correctly. That was for calendar year 2018, which is essentially tied up now..

Okay. And maybe for you or Brian, how sustainable do you see that rate of growth? It's a pretty good number relative to where you've been the last couple of years..

I would say that we see demand for journals continuing to be steady. The mix of open access versus subscriptions was going to evolve a bit over time, but we don't see any material shifts there over the coming months. We feel pretty good about the strength of the market overall, and Brian spoke to that quite a bit..

Okay. And then maybe this last question and I'll jump back into the queue. Brian, you talked a lot about opportunity across the businesses to put continued investment in talent, technology, and infrastructure, and I think you characterized fiscal 2019 as a year of investment.

At what point looking ahead do you see the investment spend slow and perhaps a pickup in revenue? I know it's a difficult question to answer, but just kind of curious as to what you see given that you've been with the Company now for nearly a year..

Sure. It's a good question. We certainly are investing for the future. We do see a lot of opportunity. We are dropping into place initiatives as quickly as we can to both solidify the core and to drive growth. It's difficult today to put out an expectation for when we'll see return on that investment.

Obviously we'd love to provide as much guidance as we can, but we'll have to see as we go forward. I am confident that there is plenty of opportunity and that we're doing the right things to capture that opportunity. So, we'll have to see as we move forward..

Okay. Thanks guys..

Moving now, we'll take our next question from Dan Moore from CJS Securities..

It's Pete Lukas for Dan.

Can you just update us on the opportunity around author-funded research and how significantly that has become as a percentage of journal revenues and the margin profile for that relative to the traditional journal model?.

Sure. So, the Open Access revenue for Wiley still represents a relatively small portion of our journal revenue overall in the quarter. It was $11 million of revenue out of $225 million of revenue in the whole Research segment for us, $216 million in the segment excluding Atypon.

So it's still a relatively small piece for us and it generated growth in the quarter of 22%. So, for the most part the opportunity is great to serve more researchers. There's lots of high-quality research out there that doesn't get published today or doesn't perhaps get published at Wiley that we can take advantage of by publishing in Open Access.

So, we see this as an important piece of growth in the future, serving researchers more effectively to get their work published, having this as a complementary opportunity for growth growing at a high rate and still lots of room to grow a relatively small portion of our research journal revenue overall..

Helpful. Thanks.

And then just regarding capital allocation, with your net leverage approaching zero here, I know you have increased the dividend, but just wondering your thoughts on other capital allocation ex-M&A, with shares having pulled back, does buybacks become more of a move-up on the list or anything else you're looking at there?.

We're continuing to take an approach that's a bit balanced between return of cash to shareholders in the form of dividends or share buybacks and capacity available for acquisitions.

Frankly, as we continue to work through our strategy, we see a number of places where we think acquisitions will be attractive to us in order to enhance our breadth of capabilities in adjacent spaces to the services that we offer today or to enhance our technological capabilities scale.

Examples of places that are of great interest to us will include education services beyond the work that we do today in online programs but expanding our capacity there. There will be opportunities for us we believe as well in places like Corporate Learning.

So, lots of interesting space for us from an acquisition perspective and an intent on our part to reserve some capacity of our cash generation to go after those growth opportunities..

Great, thanks.

And last one for me, you covered a lot in the prepared remarks, very helpful, thank you for that, but looking at the Solutions business and specifically online program management, should we think about low to mid single-digit growth as likely the new norm or do you think you can reaccelerate growth beyond that in the next few quarters? And if so, just remind us again quickly of the levers that you would pull for that..

We view that there is significant opportunity in the OPM space. We have spent the last couple of years establishing a business that has a rock-solid foundation that we can use to grow. As we've done so, we've pruned our portfolio while adding some terrific partners that we view as significant growth.

I don't think low to mid single-digits is an expectation. I think you can expect significantly higher growth than that. I'm not going to say specifically, set a specific number expectation, but I think you should view this as a fundamental driver of growth for the Company in the years to come.

The levers that we will pull to do that in addition to the building of the foundation is of course the signing of new schools, but more important than that is the expansion of the programs within schools and the students within programs.

As we get more and more efficient at acquiring students and matriculating them through the student lifecycle, the learning lifecycle, we will increasingly lean on that lever, a lean on the growth.

We prefer a land-and-expand approach where we sign up really good partners and we grow them, like the ones I had discussed in the prepared remarks, over time. In addition, we unlike many of the other players in this space have a very varied and flexible portfolio of products and services that we can bring to bear in these accounts.

And so, we will complement our full-service models with more tailored packages of products and services that help them meet their needs. And so, the answer is, we have many levers that we can pull.

What we would prefer to do of course is to have rather than just continually expand willy-nilly the school and university footprint, we'd rather make those universities that we have more profitable, and that comes through the efficient acquisition of students, through the retention of those students.

And by ensuring that those students have successful career outcomes at the end, we wind up making our school partners the places to go and the places to attend, thus sort of continuing a virtuous cycle of building brands and leveraging those brands..

Very helpful. Thank you very much..

Moving on, we'll take our next question from Nick Dempsey from Barclays..

Just a couple of questions on education publishing, so Cengage just pointed to gaining share in adoptions in I guess the adoption season from March through to June-July, and Pearson is very comfortable with its held adoptions with faculty.

Does it feel like everyone else is losing share to those larger players this year, if that data that is presented is true, and I guess I'm looking at your minus 16% growth here, or does everyone measure things just a little bit differently when they are talking about textbook adoption?.

The answer is varied. Certainly we all do talk about our businesses differently and we don't all compete against each other in the same places, in the same courses. We do not feel like we are losing share.

As we migrated through the print to digital, what you're seeing is a transition to be sure, and that's reflected in some of the numbers, but on an adoption by adoption basis we feel very good about our adoption share, about the quality of our courseware that is leading to those adoptions, and we don't believe we are losing to anyone.

When Cengage talks about its growth in adoptions, it's probably talking about its new business model that it is putting out which put in an extremely aggressive price point I think in order to get institutional sales, but there is very little evidence that that is translating into student purchases and student adoptions.

So, yes, I think everybody talks about this stuff differently and we feel very good about our market position and the competitive performance of our titles..

Thank you.

Can I just follow-up with another one there? I know it's too early to talk about the purchasing of textbooks in September of course, but I wonder whether you can comment about your conversations with campus bookstores ahead of this rough season, and specifically whether they are planning for year-on-year declines in spending overall in September..

The answer is that we are obviously in touch with the campus bookstores, who play a lesser and lesser role in the distribution of course materials. There is no anticipation of a tink in the demand curve that we had not seen before.

They are continually trying to get more efficient about how they purchase and sell through their inventory, and they are frankly, the campus bookstores are trying to figure out a reason for existence in a world where more of our product is digital and all of the competitors in this space are selling more directly to students or through online retailers.

So, from our perspective, the main thing we want to do is maintain efficient selling and sell-through through those partner retailers, so that we don't have surprises from a returns perspective which has caught us in the past, and so we're keeping our eye on that and keeping our eye on the health and well-being of our major retail partners.

And I think that's the main thing that we need to focus on..

At this time, that will conclude our question-and-answer session. I'd like to turn it back over to Brian Napack for any additional or closing remarks..

Thank you, and thank you for joining us on the call today. We look forward to updating you again in December..

That will conclude today's conference. We do thank you for your participation. You may now disconnect..