-- Continued execution of transformation plan, making key go-to-market and
AI product investments
-- Fourth consecutive quarter of revenue growth for the enterprise
solution within our Talent Development Solutions segment
-- Continued strong Adjusted EBITDA* performance and margin expansion
BOSTON--(BUSINESS WIRE)--September 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 second quarter of fiscal 2026 ended July 31, 2025.
Fiscal 2026 Second Quarter Select Metrics and Financial Measures (1)
-- Total Revenue of $129 million, down 3% from the prior year.
-- Talent Development Solutions ("TDS") Revenue of $101 million flat
compared to the prior year.
-- Global Knowledge ("GK") Revenue of $28 million, down 10% from the prior
year.
-- GAAP Net Loss of $24 million compared to GAAP Net Loss of $40 million
in the prior year. GAAP Net Loss per share of $2.78 compared to GAAP Net
Loss per share of $4.84 in the prior year.
-- Adjusted EBITDA of $28 million, reflecting a margin of 22% of Revenue,
compared to $28 million and a margin of 21% of Revenue in the prior
year.
-- Free Cash Flow of ($23) million compared to ($16) million in the prior
year, bringing year-to-date Free Cash Flow to $4 million.
"Our teams continued to execute on our transformation strategy during the quarter, and we are very pleased to have delivered a fourth consecutive quarter of revenue growth in our TDS enterprise solution, reinforcing the durability and potential of our core business," said Ron Hovsepian, Skillsoft's Executive Chair and Chief Executive Officer. "However, economic uncertainty continued into Q2 and weighed on revenue, primarily reflected in weaker discretionary demand for live training. Looking ahead, we are accelerating our execution to reimagine learning where talent development is a driver of business performance. This will be exhibited in our September announcements which introduce a set of AI Innovation based products and roadmap while reshaping our go to market to better execute the strategy."
Fiscal 2026 Second Quarter Business Highlights (1) *
-- Achieved positive Free Cash Flow in both the year-to-date and
last-twelve-month periods.
-- Announced availability in AWS Marketplace, simplifying and accelerating
the purchasing process.
-- Expanded reach through partnership with Salesforce to bring Skillsoft
CAISY$(TM)$ agent actions to Agentforce and the Salesforce ecosystem.
-- Achieved 50% year-over-year increase in the number of technology
learners on the Skillsoft platform, as well as a 74% increase in AI
learners and 158% increase in total AI learning hours.
"We were pleased with our cost discipline and working capital management during the quarter; however, to account for the softness in federal and live learning spending, we are revising our full year revenue guidance range," said John Frederick, Skillsoft's Chief Financial Officer. "Additionally, as we anticipated, we used cash in the quarter as our working capital normalized, but we generated positive free cash flow year-to-date. Looking ahead to the balance of the year, we remain on track to deliver on our adjusted EBITDA and free cash flow targets."
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 $510 million -- $530 million
Adjusted EBITDA* $112 million -- $118 million
* Denotes a non-GAAP financial measure. See "Non-GAAP Financial Measures
and Key Performance Metrics" 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 Metrics" 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) 407--3088 from the United States and Canada or (201) 389--0927 from international locations. The live event can be accessed from the Investor Relations section of Skillsoft's website at investor.skillsoft.com. A replay will be available for twelve months.
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 105 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 financial 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; business unit product research and management expenses, free cash flow, adjusted free cash flow (levered), free cash flow conversion 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 three and six month periods ended July 31, 2025 and 2024. 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 financial measures may be materially different than the non-GAAP financial 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 asset
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
tangible assets when their carrying values are not recoverable.
Non-GAAP Financial Measures And Key Performance Metrics - continued
-- 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 our 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 statements related to 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 press release 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.
All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements.
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,
July 31, 2025 2025
--------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 100,512 $ 100,766
Restricted cash 2,908 2,571
Accounts receivable, net of
allowance for credit losses of
approximately $321 and $501 as
of July 31, 2025 and January
31, 2025, respectively 96,778 178,989
Prepaid expenses and other
current assets 52,581 50,527
----------- -----------
Total current assets 252,779 332,853
Goodwill 317,071 317,071
Intangible assets, net 374,654 427,221
Other assets 24,922 28,924
----------- -----------
Total assets $ 969,426 $ 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 26,794 13,458
Accrued compensation 26,096 47,803
Accrued expenses and other
current liabilities 21,265 26,022
Deferred revenue 215,309 282,295
----------- -----------
Total current liabilities 296,868 376,982
----------- -----------
Long-term debt 571,203 573,267
Deferred tax liabilities 39,360 42,039
Deferred revenue - non-current 1,000 1,656
Other long-term liabilities 18,542 18,279
----------- -----------
Total long-term liabilities 630,105 635,241
----------- -----------
Commitments and contingencies
Shareholders' equity (deficit):
Shareholders' common stock -
Class A common shares, $0.0001
par value: 18,750,000 shares
authorized and 8,972,560 shares
issued and 8,672,783 shares
outstanding as of July 31,
2025, and 8,616,633 shares
issued and 8,316,856 shares
outstanding as of January 31,
2025 1 1
Additional paid-in capital 1,572,538 1,565,040
Accumulated (deficit) (1,505,223) (1,443,386)
Treasury stock, at cost -
299,777 shares as of July 31,
2025 and January 31, 2025 (10,891) (10,891)
Accumulated other comprehensive
income (loss) (13,972) (16,918)
----------- -----------
Total shareholders' equity
(deficit) 42,453 93,846
----------- -----------
Total liabilities and
shareholders' equity
(deficit) $ 969,426 $ 1,106,069
=========== ===========
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except number of shares and per share amounts)
Three Months Ended July Six Months Ended July
31, 31,
----------------------- -----------------------
2025 2024 2025 2024
---------- ---------- ---------- ----------
Revenues:
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