Press Release: Skillsoft Reports Financial Results for the First Quarter of Fiscal 2026

Dow Jones
Jun 10
   -- 
 Solid financial results and strategy execution despite macroeconomic 
      uncertainty 
 
 
   -- 
 Third consecutive quarter of growth for our TDS segment 
 
 
   -- 
 Continued strong growth in Adjusted EBITDA* and margin expansion 
 
 
   -- 
 Strong free cash flow performance for the quarter 
 
 
   -- 
 Reaffirmed financial outlook for the full fiscal year 
 
BOSTON--(BUSINESS WIRE)--June 09, 2025-- 

Skillsoft Corp. (NYSE: SKIL) ("Skillsoft", "we", "us", or "our"), the platform that empowers organizations and learners to unlock their full potential, today announced its financial results for the first quarter of fiscal 2026 ended April 30, 2025.

Fiscal 2026 First Quarter Select Metrics and Financial Measures (1) *

   -- 
 Total Revenue of $124 million down 3% from the prior year. 
 
 
   -- 
 Talent Development Solutions ("TDS") Revenue of $99 million up 1% from 
      the prior year. 
 
 
   -- 
 Global Knowledge ("GK") Revenue of $25 million down 16% from the prior 
      year. 
 
 
   -- 
 GAAP Net Loss of $38 million compared to GAAP Net Loss of $28 million 
      in the prior year. GAAP Net Loss per share of $4.57 compared to GAAP Net 
      Loss per share of $3.42 in the prior year. 
 
 
   -- 
 Adjusted EBITDA of $22 million, reflecting a margin of 18% of Revenue, 
      compared to $19 million and 15%, respectively, in the prior year. 
 
 
   -- 
 Free Cash Flow of $26 million compared to $10 million in the prior 
      year. 
 

"We are pleased to have delivered first quarter results in line with expectations despite a challenging economic environment, particularly a softening of discretionary spending which disproportionately impacts our Global Knowledge business segment," said Ron Hovsepian, Skillsoft's Executive Chair and Chief Executive Officer. "This performance reflects the strength of our strategy, which is designed to return the company to at or above market growth rates. The multi-quarter growth we are seeing in TDS, our largest business segment, reinforces our confidence in our ability to achieve top line growth this year."

Fiscal 2026 First Quarter Business Highlights (1) *

   -- 
 Our TDS segment has now achieved three consecutive quarters of revenue 
      growth. 
 
 
   -- 
 GK has seen growth in the non-U.S. public sector and also has a strong 
      pipeline. 
 
 
   -- 
 Skillsoft CAISY$(TM)$, our award-winning AI-powered coach, is now 
      available for learners in over 40 languages. 
 
 
   -- 
 Recognized as "Most Dedicated to Employee Growth" in this year's 
      Digiday WorkLife Awards, highlighting Skillsoft's commitment to employee 
      development and career growth, with a particular focus on helping its 
      workforce build artificial intelligence $(AI)$ literacy to better 
      understand, evaluate, and use AI technologies. 
 

"We delivered continued improvement in profitability and free cash flow despite heightened macroeconomic volatility," said John Frederick, Skillsoft's Chief Financial Officer. "Based on our current view of the market, we are reaffirming our fiscal 2026 outlook which calls for both revenue and Adjusted EBITDA growth. We are pleased by our strong free cash flow in the quarter which was largely driven by seasonal changes in working capital. Conversely, we anticipate the second quarter to be our lowest free cash flow quarter as working capital normalizes. We remain on track to meet our prior free cash flow expectations for the full year."

Full-Year Fiscal 2026 Financial Outlook *

The following table reflects Skillsoft's financial outlook for the fiscal year ending January 31, 2026, based on current market conditions, expectations, and assumptions:

 
GAAP Revenue       $530 million -- $545 million 
Adjusted EBITDA    $112 million -- $118 million 
 
 
*      Denotes a non-GAAP financial measure. See "Non-GAAP Financial Measures 
       and Key Performance Metric" below for the definitions of these and 
       other non-GAAP financial measures included in this press release, how 
       they are calculated, and the rationale for their use. A reconciliation 
       of historical non-GAAP financial measures to the most 
       directly-comparable GAAP financial measures is provided in the tables 
       at the back of this press release. We do not provide quantitative 
       reconciliations for forward-looking non-GAAP financial measures, as we 
       are unable to provide a meaningful or accurate calculation or 
       estimation of reconciling items and the information is not available 
       without unreasonable effort. See "Non-GAAP Financial Measures and Key 
       Performance Metrics" below for further detail. 
 
(1)    Skillsoft has two operating and reportable segments: TDS (formerly 
       referred to as Content & Platform) and GK (formerly referred to as 
       Instructor-Led Training). Segment performance is evaluated based on 
       segment revenue, segment ("business unit") contribution profit and 
       segment ("business unit") contribution margin (segment contribution 
       profit as a percentage of segment revenue). In the fourth quarter of 
       the fiscal year ended January 31, 2025, the Company made changes to the 
       components used to determine segment results to increase transparency 
       and improve segment comparability to peers. All prior period 
       comparatives have been recast to conform to the current presentation. 
       See note 20 to the Consolidated Financial Statements included in our 
       Annual Report on Form 10-K for the fiscal year ended January 31, 2025, 
       and "Non-GAAP Financial Measures and Key Performance Metric" below for 
       further detail. 
 

Webcast and Conference Call Information

Skillsoft will host a conference call and webcast today at 5:00 p.m. Eastern Time to discuss its financial results. To access the call, dial (877) 413--9278 from the United States and Canada or (215) 268--9914 from international locations. The live event and presentation materials can be accessed from the Investor Relations section of Skillsoft's website at investor.skillsoft.com. A replay will be available on the same site for six months. The information contained on or accessible through our website is not incorporated by reference into, and does not form part of, this release.

About Skillsoft

Skillsoft (NYSE: SKIL) empowers organizations and learners to unlock their full potential by delivering personalized, interactive learning experiences and enterprise-ready solutions. Powered by AI and strengthened by a broad ecosystem of partners, the Skillsoft platform helps customers solve some of today's most complex business challenges including bridging skill gaps, improving talent retention, driving digital transformation, and future-proofing the workforce. Skillsoft is the talent development partner of choice for thousands of organizations -- including 60% of the Fortune 1000 -- and serves a global community of more than 95 million learners. For more information, visit skillsoft.com.

Non-GAAP Financial Measures And Key Performance Metrics

We track the non-GAAP financial measures and key performance metrics that we believe are key financial measures of our success. Non-GAAP measures and key performance metrics are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to us, many of which present non-GAAP measures and key performance metrics when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of U.S. GAAP financial disclosures. For example, a company with higher U.S. GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, excluding the effects of interest income and expense moderates the impact of a company's capital structure on its performance. In addition, management uses these non-GAAP financial measures and key performance metrics to assess operating performance, financial leverage and the effective use and allocation of resources; to provide more normalized period-to-period comparisons of operating results; to enhance investors' understanding of the core operating results of our business; and to set management incentive targets. We believe investors use both U.S. GAAP and non-GAAP financial measures, as well as key performance metrics to assess management's decisions associated with our priorities and capital allocation, as well as to analyze how our business operates in, or responds to, macroeconomic trends or other events that impact our core operations. We disclose the non-GAAP financial measures and key performance metrics included in this press release because we believe that they provide meaningful supplemental information. However, non-GAAP measures and key performance metrics have limitations as analytical tools. Because not all companies use identical calculations, our presentation of non-GAAP financial measures and key performance metrics may not be comparable to other similarly titled measures of other companies. They are not presentations made in accordance with U.S. GAAP, are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with U.S. GAAP or operating cash flows determined in accordance with U.S. GAAP. As a result, these performance measures should not be considered in isolation from, or as a substitute analysis for, results of operations as determined in accordance with U.S. GAAP.

The non-GAAP financial measures included in this press release are: adjusted net income (loss); adjusted net income (loss) per share; adjusted net income (loss) margin % (i.e., adjusted net income (loss) as a percentage of revenue); adjusted EBITDA; adjusted EBITDA margin % (i.e., adjusted EBITDA as a percentage of revenue); adjusted total operating expenses; adjusted contribution margin; business unit contribution profit; business unit contribution margin (i.e., business unit contribution profit as a percentage of business unit revenue); adjusted costs of revenues; adjusted content and software development expenses; adjusted selling and marketing expenses; adjusted general and administrative expenses; business unit costs of revenues, business unit content and software development expenses; free cash flow, adjusted free cash flow (levered), and adjusted net leverage.

We have provided at the back of this press release reconciliations of these historical non-GAAP financial measures to the most directly comparable GAAP financial measures for the first quarters of fiscal years 2026 and 2025. We do not reconcile our forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information. We provide non-GAAP financial measures that we believe will be achieved, however we cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.

Key Performance Metric

   -- 
 Dollar retention rate ("DRR") - For existing customers at the beginning 
      of a given period, DRR represents subscription renewals, upgrades, churn, 
      and downgrades in such period divided by the beginning total renewable 
      base for such customers for such period. Renewals reflect customers who 
      renew their subscription, inclusive of auto-renewals for multi-year 
      contracts, while churn reflects customers who choose to not renew their 
      subscription. Upgrades include orders from customers that purchase 
      additional licenses or content (e.g., a new Leadership and Business 
      module), while downgrades reflect customers electing to decrease the 
      number of licenses or reduce the size of their content package. Upgrades 
      and downgrades also reflect changes in pricing. We use our DRR to measure 
      the long-term value of customer contracts as well as our ability to 
      retain and expand the revenue generated from our existing customers. 
 

Non-GAAP Financial Measures

The non-GAAP measures included in this press release are defined as follows:

   -- 
 Adjusted net income (loss) is defined as net income (loss) excluding 
      non-cash items, discrete and event-specific costs that do not represent 
      normal cash operating expenses necessary for our business operations, and 
      certain accounting income and/or expenses. Management believes these 
      exclusions enhance the comparability of our results from period to period, 
      and as compared to peers, and are useful in assessing our operating 
      performance, and consist of the following (including the related tax 
      effects), when applicable to the periods presented: 
 
          -- 
 Impairment charges -- Non-cash goodwill and intangible 
             impairment charges. 
 
 
          -- 
 Amortization of acquired intangible assets -- Non-cash 
             amortization expense of finite-lived intangible assets recognized 
             as a part of business combination accounting. 
 
 
          -- 
 Acquisition and integration related costs -- Costs incurred to 
             effectuate an acquisition, including contingent compensation 
             expenses, and integration related costs. 
 
 
          -- 
 Restructuring charges -- Charges related to strategic cost 
             saving initiatives, including severance costs, losses associated 
             with the abandonment of right-of-use assets, and contract 
             termination costs. 
 
 
          -- 
 Transformation costs -- Costs incurred to transform our 
             operations through significant strategic non-ordinary course 
             transactions. 
 
 
          -- 
 System migration costs -- Costs of temporary resources needed 
             for the migration of content and customers from our legacy system 
             to a global platform. 
 
 
          -- 
 Long-term incentive compensation expenses -- Charges associated 
             with long-term incentive compensation programs, including 
             stock-based compensation, cash awards tied to stock performance, 
             and awards granted in-lieu of stock that are intended to be 
             settled in cash. 
 
 
          -- 
 Executive exit costs -- Costs associated with the departure of 
             executives. 
 
 
          -- 
 Fair value adjustments -- Mark-to-market adjustments of warrants 
             and hedge instruments. 
 
 
          -- 
 Other (income) expense, net -- Unrealized and realized gains or 
             losses primarily resulting from fluctuations of U.S. dollar 
             appreciating or depreciating against other currencies, and 
             impairments associated with property and equipment and other 
             assets when their carrying values are not recoverable. 
 
 
 
 
   -- 
 Adjusted EBITDA is defined as net income (loss) excluding (when 
      applicable to the periods presented) the same exclusions set forth above 
      for the determination of adjusted net income (loss) plus the additional 
      exclusions set forth below. Management believes these exclusions enhance 
      the comparability of our results from period to period, and as compared 
      to peers, and are useful in assessing our operating performance. The 
      additional exclusions are: 
 
          -- 
 Amortization of intangible assets -- Non-cash amortization 
             expense for finite-lived intangible assets other than those 
             recognized as a part of business combination accounting. 
 
 
          -- 
 Depreciation expense -- Non-cash depreciation expense for 
             property and equipment assets. 
 
 
          -- 
 Provision for (benefit from) income taxes -- Current and 
             deferred federal, state and foreign income tax expense (benefit). 
 
 
 
 
   -- 
 Adjusted total operating expenses are defined as costs of revenues, 
      content and software development expenses, selling and marketing expenses, 
      and general and administrative expenses, in each case excluding (where 
      applicable) depreciation expense, long-term incentive compensation 
      expense, system migration costs and transformation costs, as applicable. 
 
 
   -- 
 Adjusted contribution margin is defined as revenue less adjusted total 
      operating expenses, divided by revenue for the same period. 
 
 
   -- 
 Business unit contribution profit - Segment ("business unit") 
      contribution profit is defined as business unit revenue, less business 
      unit cost of revenues, business unit content and software development 
      expenses, and business unit product research and management expenses. 
 
 
   -- 
 Business unit contribution margin is defined as business unit 
      contribution profit divided by business unit revenue for the same 
      period. 
 
 
   -- 
 Business unit cost of revenues is defined as cost of revenues 
      attributable to the business unit, excluding, where applicable, 
      depreciation expense, long-term incentive compensation expense, system 
      migration costs, and transformation expenses. 
 
 
   -- 
 Business unit content and software development expenses are defined as 
      content and software development expenses attributable to the business 
      unit, excluding, where applicable, depreciation, long-term incentive 
      compensation, system migration costs, and transformation expenses. 
 
 
   -- 
 Business unit product research and management expenses are defined as 
      certain selling and marketing costs attributable to the business unit 
      reflected in the business unit contribution profit. 
 
 
   -- 
 Free cash flow is defined as net cash provided by (used in) operating 
      activities less net purchases of property and equipment and internally 
      developed software. Note that free cash flow does not represent residual 
      cash flow available to Skillsoft for discretionary expenditures. 
 
 
   -- 
 Adjusted free cash flow (levered) is defined as free cash flow plus the 
      cash impact of the charges excluded in the determination of adjusted 
      EBITDA. Note that adjusted free cash flow (levered) does not represent 
      residual cash flow available to Skillsoft for discretionary 
      expenditures. 
 
 
   -- 
 Free cash flow conversion is defined as free cash flow divided by 
      adjusted EBITDA for the same period. 
 
 
   -- 
 Adjusted net leverage is defined as current maturities of long-term 
      debt, plus borrowings under accounts receivable facility, plus long-term 
      debt, less cash and equivalents and restricted cash, divided by adjusted 
      EBITDA for the preceding twelve-month period. 
 

Cautionary Notes Regarding Forward Looking Statements

This document includes statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. For all such statements, we claim the protection of the safe harbor for forward-looking statements provided by such sections and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, are forward-looking statements. These forward-looking statements include, but are not limited to, statements that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook (including our Full Year Fiscal 2026 Financial Outlook), our product development and planning, our pipeline, future capital expenditures, future share repurchases, anticipated financial results, the impact of regulatory changes, our current and evolving business strategies, including with respect to acquisitions and dispositions, demand for our services, our competitive position, the benefits of new initiatives, growth of our business and operations, the effectiveness of our products, the outcomes of litigation proceedings and claims, the state and future of skilling in the workplace, our ability to successfully implement our plans, strategies, objectives, and our expectations and intentions. Forward-looking statements may, without limitation, be preceded by, followed by, or include words such as "may," "will," "would," "anticipate," "believe," "estimate," "expect," "intend," "plan," "contemplate," "continue," "project," "forecast," "seek," "outlook," "target," "goal," "objective," "potential," "possible," "probably," or similar expressions, or employ such future or conditional verbs as "may, " "might," "will," "could," "should," or "would," or may otherwise be indicated as forward-looking statements by grammatical construction, phrasing or context. Such statements are based upon the current beliefs and expectations of Skillsoft's management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements. All forward-looking disclosure is speculative by its nature, and we caution you against unduly relying on these forward-looking statements.

Factors that could cause or contribute to such differences include those described under "Part I - Item 1A. Risk Factors" and Part II, Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations in our Form 10--K for the fiscal year ended January 31, 2025 ("2025 Form 10-K"). These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements included in the 2025 Form 10-K, in this document and in our other periodic filings with the Securities and Exchange Commission. The forward-looking statements contained in this document represent our estimates only as of the date of this filing and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so, whether to reflect actual results, changes in assumptions, changes in other factors affecting such forward-looking statements, or otherwise, except as required by law.

Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved. Annualized, pro forma, projected and estimated numbers are used for illustrative purposes only, are not forecasts and may not reflect actual results. Additionally, statements as to market share, industry data and our market position are based on the most current data available to us and our estimates regarding market position or other industry statistics included in this document or otherwise discussed by us involve risks and uncertainties and are subject to change based on various factors, including as set forth above.

Industry and Market Data

Within this document, we may reference information and statistics regarding market share, industry data and our market position. Certain of this information has been obtained from various independent third-party sources, including independent industry publications, news reports, reports by market research firms and other independent sources. We believe that these external sources and estimates are reliable but have not independently verified them. In addition, certain of this information and statistics are based on our own internal surveys and assessments, which are developed in good faith using reasonable estimates. The information is based on the most current data available to us and our estimates regarding market position or other industry statistics included in this document or otherwise discussed by us involve risks and uncertainties and are subject to change based on various factors, including as set forth above.

 
                            SKILLSOFT CORP. 
            UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS 
     (in thousands, except number of shares and per share amounts) 
 
                                                        January 31, 
                                      April 30, 2025        2025 
                                      --------------   -------------- 
ASSETS 
Current assets: 
    Cash and cash equivalents         $      127,841   $      100,766 
    Restricted cash                            3,091            2,571 
    Accounts receivable, net of 
     allowance for credit losses of 
     approximately $269 and $501 as 
     of April 30, 2025 and January 
     31, 2025, respectively                   95,988          178,989 
    Prepaid expenses and other 
     current assets                           50,917           50,527 
                                          ----------       ---------- 
        Total current assets                 277,837          332,853 
Goodwill                                     317,071          317,071 
Intangible assets, net                       401,967          427,221 
Other assets                                  25,611           28,924 
                                          ----------       ---------- 
            Total assets              $    1,022,486   $    1,106,069 
                                          ==========       ========== 
LIABILITIES AND SHAREHOLDERS' 
EQUITY (DEFICIT) 
Current liabilities: 
    Current maturities of long-term 
     debt                             $        6,404   $        6,404 
    Borrowings under accounts 
     receivable facility                       1,000            1,000 
    Accounts payable                          20,789           13,458 
    Accrued compensation                      29,144           47,803 
    Accrued expenses and other 
     current liabilities                      23,790           26,022 
    Deferred revenue                         243,788          282,295 
                                          ----------       ---------- 
        Total current liabilities            324,915          376,982 
                                          ----------       ---------- 
 
Long-term debt                               572,232          573,267 
Deferred tax liabilities                      41,042           42,039 
Deferred revenue - non-current                 1,170            1,656 
Other long-term liabilities                   20,478           18,279 
                                          ----------       ---------- 
    Total long-term liabilities              634,922          635,241 
                                          ----------       ---------- 
Commitments and contingencies 
Shareholders' equity (deficit): 
    Shareholders' common stock - 
     Class A common shares, $0.0001 
     par value: 18,750,000 shares 
     authorized and 8,651,941 shares 
     issued and 8,352,164 shares 
     outstanding as of April 30, 
     2025, and 8,616,633 shares 
     issued and 8,316,856 shares 
     outstanding as of January 31, 
     2025                                          1                1 
    Additional paid-in capital             1,568,919        1,565,040 
    Accumulated (deficit)                 (1,481,435)      (1,443,386) 
    Treasury stock, at cost - 
     299,777 as of April 30, 2025 
     and January 31, 2025                    (10,891)         (10,891) 
    Accumulated other comprehensive 
     income (loss)                           (13,945)         (16,918) 
                                          ----------       ---------- 
        Total shareholders' equity 
         (deficit)                            62,649           93,846 
                                          ----------       ---------- 
            Total liabilities and 
             shareholders' equity 
             (deficit)                $    1,022,486   $    1,106,069 
                                          ==========       ========== 
 
 
                           SKILLSOFT CORP. 
      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
    (in thousands, except number of shares and per share amounts) 
 
                                     Three Months Ended April 30, 
                                   -------------------------------- 
                                         2025             2024 
                                   ----------------   ------------- 
Revenues: 
    Total revenues                 $        124,201   $     127,793 
Operating expenses: 
    Costs of revenues                        32,247          34,471 
    Content and software 
     development                             14,102          15,506 
    Selling and marketing                    39,609          42,292 
    General and administrative               22,952          25,309 
    Amortization of intangible 
     assets                                  31,608          31,583 
    Acquisition and integration 
     related costs                              523           1,497 
    Restructuring                             1,346             967 
                                       ------------    ------------ 
        Total operating expenses            142,387         151,625 
                                       ------------    ------------ 
            Operating income 
             (loss)                         (18,186)        (23,832) 
Other income (expense), net                  (2,446)          2,217 
Fair value adjustment of interest 
 rate swaps                                  (4,256)          7,746 
Interest income                                 463             928 
Interest expense                            (14,396)        (16,278) 
                                       ------------    ------------ 
                Income (loss) 
                 before provision 
                 for (benefit 
                 from) income 
                 taxes                      (38,821)        (29,219) 
Provision for (benefit from) 
 income taxes                                  (772)         (1,583) 
                                       ------------    ------------ 
                    Net income 
                     (loss)        $        (38,049)  $     (27,636) 
                                       ============    ============ 
 
Net income (loss) per share: 
    Basic and diluted              $          (4.57)  $       (3.42) 
                                       ============    ============ 
Weighted average common share 
outstanding: 
    Basic and diluted                     8,324,864       8,089,331 
                                       ============    ============ 
 
 
                            SKILLSOFT CORP. 
       UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
                             (in thousands) 
 
                                      Three Months Ended April 30, 
                                   ---------------------------------- 
                                         2025                2024 
                                   ----------------      ------------ 
Cash flows from operating 
activities: 
    Net income (loss)              $        (38,049)     $    (27,636) 
    Adjustments to reconcile net 
    income (loss) to net cash 
    provided by (used in) 
    operating activities: 
        Amortization expense of 
         intangible assets                   31,608            31,583 
        Stock-based compensation 
         expense                              4,081             7,153 
        Depreciation expense                    447               760 
        Non-cash interest expense               566               536 
        Non-cash operating lease 
         right-of-use asset 
         expense                                408               904 
        Provision for credit loss 
         expense (recovery)                    (232)               41 
        Provision for (benefit 
         from) deferred income 
         taxes -- non-cash                   (1,225)           (2,932) 
        Fair value adjustment of 
         interest rate swaps                  4,256            (7,746) 
Changes in current assets and 
liabilities, net of effects from 
acquisitions: 
        Accounts receivable                  86,559            74,826 
        Prepaid expenses and 
         other assets, including 
         long-term                            1,243              (840) 
        Accounts payable                      6,992            (1,107) 
        Accrued expenses and 
         other liabilities, 
         including long-term                (21,780)          (21,514) 
        Deferred revenue                    (43,576)          (39,091) 
                                       ------------       ----------- 
            Net cash provided by 
             (used in) operating 
             activities                      31,298            14,937 
Cash flows from investing 
activities: 
    Purchase of property and 
     equipment                                 (515)             (153) 
    Internally developed software 
     - capitalized costs                     (4,619)           (4,364) 
                                       ------------       ----------- 
        Net cash provided by 
         (used in) investing 
         activities                          (5,134)           (4,517) 
Cash flows from financing 
activities: 
    Shares repurchased for tax 
     withholding upon vesting of 
     restricted stock-based 
     awards                                    (352)              (82) 
    Proceeds from (payments on) 
     accounts receivable 
     facility                                    --            (2,569) 
    Principal payments on term 
     loans                                   (1,601)           (1,601) 
                                       ------------       ----------- 
        Net cash provided by 
         (used in) financing 
         activities                          (1,953)           (4,252) 
Effect of exchange rate changes 
 on cash and cash equivalents                 3,384            (3,087) 
                                       ------------       ----------- 
            Net increase 
             (decrease) in cash, 
             cash equivalents and 
             restricted cash                 27,595             3,081 
Cash, cash equivalents and 
 restricted cash, beginning of 
 period                                     103,337           146,523 
                                       ------------       ----------- 
                Cash, cash 
                 equivalents and 
                 restricted cash, 
                 end of period     $        130,932      $    149,604 
                                       ============       =========== 
Supplemental disclosure of cash 
flow information: 
    Cash and cash equivalents      $        127,841      $    142,020 
    Restricted cash                           3,091             7,584 
                                       ------------       ----------- 
        Cash, cash equivalents 
         and restricted cash, end 
         of period                 $        130,932      $    149,604 
                                       ============       =========== 
 
 
                            SKILLSOFT CORP. 
             RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
   (in thousands, except percentages, number of shares and per share 
                          amounts, unaudited) 
 
                                     Three Months Ended April 30, 
                                  ---------------------------------- 
                                        2025                2024 
                                  ----------------      ------------ 
Revenues 
    Talent Development Solutions  $         99,148      $     98,075 
    Global Knowledge                        25,053            29,718 
                                      ------------       ----------- 
Total revenues, as reported       $        124,201      $    127,793 
                                      ============       =========== 
 
Net income (loss), as reported    $        (38,049)     $    (27,636) 
 
    Amortization of acquired 
     intangible assets (1)                  28,792            29,868 
    Acquisition and integration 
     related costs                             523             1,497 
    Restructuring                            1,346               967 
    Transformation costs                     1,604               657 
    System migration costs                      --               117 
    Long-term incentive 
     compensation expenses                   4,790             7,148 
    Fair value adjustment of 
     interest rate swaps                     4,256            (7,746) 
    Other (income) expense, net              2,446            (2,217) 
    Tax impact of adjustments               (3,229)           (3,042) 
                                      ------------       ----------- 
Adjusted net income (loss)                   2,479              (387) 
 
    Interest expense, net                   13,933            15,350 
    Expense (benefit from) 
     income taxes, excluding tax 
     impacts above                           2,457             1,459 
    Depreciation                               446               761 
    Amortization of capitalized 
     internally developed 
     software (1)                            2,816             1,715 
                                      ------------       ----------- 
Adjusted EBITDA                   $         22,131      $     18,898 
                                      ============       =========== 
 
Weighted average common shares 
outstanding: 
    Basic and diluted                    8,324,864         8,089,331 
                                      ============       =========== 
 
Basic and diluted per share 
information: 
    Net income (loss) per share, 
     as reported                  $          (4.57)     $      (3.42) 
                                      ============       =========== 
    Adjusted net income (loss) 
     per share                    $           0.30      $      (0.05) 
                                      ============       =========== 
 
Net income (loss) margin %                   (30.6)%           (21.6)% 
    Amortization of acquired 
     intangible assets (1)                    23.1%             23.3% 
    Acquisition and integration 
     related costs                             0.4%              1.2% 
    Restructuring                              1.1%              0.8% 
    Transformation costs                       1.3%              0.5% 
    System migration costs                     0.0%              0.1% 
    Long-term incentive 
     compensation expenses                     3.9%              5.6% 
    Fair value adjustment of 
     interest rate swaps                       3.4%             (6.1)% 
    Other (income) expense, net                2.0%             (1.7)% 
    Tax impact of adjustments                 (2.6)%            (2.4)% 
                                      ------------       ----------- 
Adjusted net income (loss) 
 margin %                                      2.0%             (0.3)% 
    Interest expense, net                     11.1%             12.1% 
    Expense (benefit from) 
     income taxes, excluding tax 
     impacts above                             2.0%              1.1% 
    Depreciation                               0.4%              0.6% 
    Amortization of capitalized 
     internally developed 
     software (1)                              2.3%              1.3% 
                                      ------------       ----------- 
Adjusted EBITDA margin %                      17.8%             14.8% 
                                      ============       =========== 
 
 
(1)    All amortization (not only amortization pertaining to finite-lived 
       intangible assets recognized as part of business combination 
       accounting) is excluded in the determination of Adjusted EBITDA. 
 
 
                            SKILLSOFT CORP. 
       RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - continued 
             (in thousands, except percentages, unaudited) 
 
                                     Three Months Ended April 30, 
                                  ---------------------------------- 
                                       2025                 2024 
                                  ---------------        ----------- 
Talent Development Solutions 
Revenue                           $        99,148        $    98,075 
Business unit cost of revenues             16,272             16,185 
Business unit content and 
 software development expenses             12,098             13,463 
Business unit product research 
 and management expenses                    2,299              1,969 
                                      -----------         ---------- 
    Business unit contribution 
     profit                       $        68,479        $    66,458 
                                      ===========         ========== 
 
        Business unit 
         contribution margin                 69.1%              67.8% 
 
Global Knowledge 
Revenue                           $        25,053        $    29,718 
Business unit cost of revenues             15,706             18,003 
Business unit content and 
 software development expenses                744                562 
                                      -----------         ---------- 
    Business unit contribution 
     profit                       $         8,603        $    11,153 
                                      ===========         ========== 
 
        Business unit 
         contribution margin                 34.3%              37.5% 
 
 
                            SKILLSOFT CORP. 
       RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - continued 
                       (in thousands, unaudited) 
 
                                      Three Months Ended April 30, 
                                   ---------------------------------- 
                                         2025                2024 
                                   ----------------      ------------ 
Operating expenses: 
    GAAP costs of revenues         $         32,247      $     34,471 
    Depreciation                                (68)             (117) 
    Long-term incentive 
     compensation expenses                     (201)             (166) 
                                       ------------       ----------- 
Adjusted costs of revenues                   31,978            34,188 
 
    GAAP content and software 
     development expenses                    14,102            15,506 
    Depreciation                                (82)              (74) 
    Long-term incentive 
     compensation expenses                   (1,178)           (1,290) 
    System migration costs                       --              (117) 
                                       ------------       ----------- 
Adjusted content and software 
 development expenses                        12,842            14,025 
 
    GAAP selling and marketing 
     expenses                                39,609            42,292 
    Depreciation                               (138)             (208) 
    Long-term incentive 
     compensation expenses                   (1,041)           (1,256) 
    Transformation costs                         --              (177) 
                                       ------------       ----------- 
Adjusted selling and marketing 
 expenses                                    38,430            40,651 
 
    GAAP general and 
     administrative expenses                 22,952            25,309 
    Depreciation                               (158)             (362) 
    Long-term incentive 
     compensation expenses                   (2,370)           (4,436) 
    Transformation costs                     (1,604)             (480) 
                                       ------------       ----------- 
Adjusted general and 
 administrative expenses                     18,820            20,031 
 
    Total GAAP operating expenses           108,910           117,578 
    Depreciation                               (446)             (761) 
    Long-term incentive 
     compensation expenses                   (4,790)           (7,148) 
    System migration costs                       --              (117) 
    Transformation costs                     (1,604)             (657) 
                                       ------------       ----------- 
Adjusted total operating expenses  $        102,070      $    108,895 
                                       ============       =========== 
 
 
                            SKILLSOFT CORP. 
       RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - continued 
                       (in thousands, unaudited) 
 
                                      Three Months Ended April 30, 
                                   ---------------------------------- 
                                         2025                2024 
                                   ----------------      ------------ 
Talent Development Solutions 
Cost of revenues and content and 
software development expenses: 
    GAAP costs of revenues         $         16,518      $     16,425 
    Depreciation                                (66)              (94) 
    Long-term incentive 
     compensation expenses                     (180)             (146) 
                                       ------------       ----------- 
        Business unit costs of 
         revenues                            16,272            16,185 
 
    GAAP content and software 
     development expenses                    13,324            14,941 
    Depreciation                                (81)              (71) 
    Long-term incentive 
     compensation expenses                   (1,145)           (1,290) 
    System migration costs                       --              (117) 
                                       ------------       ----------- 
        Business unit content and 
         software development                12,098            13,463 
 
    GAAP cost of revenues and 
     content and software 
     development expenses                    29,842            31,366 
    Depreciation                               (147)             (165) 
    Long-term incentive 
     compensation expenses                   (1,325)           (1,436) 
    System migration costs                       --              (117) 
                                       ------------       ----------- 
        Business unit total cost 
         of revenues and content 
         and software development 
         expenses                  $         28,370      $     29,648 
                                       ============       =========== 
 
Global Knowledge 
Cost of revenues and content and 
software development expenses: 
    GAAP costs of revenues         $         15,729      $     18,046 
    Depreciation                                 (2)              (23) 
    Long-term incentive 
     compensation expenses                      (21)              (20) 
                                       ------------       ----------- 
        Business unit costs of 
         revenues                            15,706            18,003 
 
    GAAP content and software 
     development expenses                       778               565 
    Depreciation                                 (1)               (3) 
    Long-term incentive 
     compensation expenses                      (33)               -- 
                                       ------------       ----------- 
        Business unit content and 
         software development 
         expenses                               744               562 
 
    GAAP cost of revenues and 
     content and software 
     development expenses                    16,507            18,611 
    Depreciation                                 (3)              (26) 
    Long-term incentive 
     compensation expenses                      (54)              (20) 
                                       ------------       ----------- 
        Business unit total cost 
         of revenues and content 
         and software development 
         expenses                  $         16,450      $     18,565 
                                       ============       =========== 
 
 
                            SKILLSOFT CORP. 
                     FREE CASH FLOW RECONCILIATION 
                       (in thousands, unaudited) 
 
                                      Three Months Ended April 30, 
                                   ---------------------------------- 
                                         2025                2024 
                                   ----------------      ------------ 
Free cash flow reconciliation 
Net cash provided by (used in) 
 operating activities              $         31,298      $     14,937 
Purchase of property and 
 equipment, net                                (515)             (153) 
Internally developed software - 
 capitalized costs                           (4,619)           (4,364) 
                                       ------------       ----------- 
    Free cash flow                           26,164            10,420 
Cash impact for adjusted EBITDA 
 excluded charges                             4,980             3,082 
                                       ------------       ----------- 
        Adjusted free cash flow 
         (levered)                 $         31,144      $     13,502 
                                       ============       =========== 
 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250606803439/en/

 
    CONTACT:    Investors: 

Ross Collins or Stephen Poe

SKIL@alpha-ir.com

Media:

Cameron Martin

cameron.martin@skillsoft.com

 
 

(END) Dow Jones Newswires

June 09, 2025 16:05 ET (20:05 GMT)

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