-- Announced review of strategic alternatives for Global Knowledge ("GK")
business segment, focusing on a potential sale
-- Continued investment in the Company's AI Innovation based product roadmap,
including the next-generation Skillsoft Percipio Platform
BOSTON--(BUSINESS WIRE)--December 10, 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 third quarter of fiscal 2026 ended October 31, 2025.
Fiscal 2026 Third Quarter Select Metrics and Financial Measures (1)
-- Total Revenue of $129 million, down 6% from the prior year.
-- Talent Development Solutions ("TDS") Revenue of $101 million, down 2%
from the prior year.
-- Global Knowledge ("GK") Revenue of $28 million, down 18% from the prior
year.
-- Net Loss of $41 million compared to Net Loss of $24 million in the prior
year. Net Loss per share of $4.74 compared to Net Loss per share of $2.86
in the prior year.
-- Adjusted EBITDA* of $28 million, reflecting a margin of 22% of Revenue,
compared to $32 million and a margin of 23% of Revenue in the prior year.
-- Free Cash Flow* of ($24) million compared to $4 million in the prior year,
bringing year-to-date Free Cash Flow* to ($20) million.
"Our TDS segment continues to make progress with the September announcement of the Skillsoft Percipio Platform, with agentic AI capabilities, and with the signing of our first four large enterprise customers," said Ron Hovsepian, Skillsoft Executive Chair and CEO. "In addition, AI now drives more than half of our design, curation, and production work for learning content. This is changing how we operate and strengthening the value we deliver to customers."
Hovsepian concluded, "In an effort to remain aligned with our company growth timeline and customer needs for multimodal learning, we have undertaken a full strategic review of the Global Knowledge segment and concluded that a partnership-driven model is more appropriate than continued ownership."
Fiscal 2026 Third Quarter Business Highlights (1) *
-- Launched the next-generation Skillsoft Percipio Platform, the first
AI-native skills intelligence platform built for the human + AI era.
-- LTM DRR for the quarter of 99%, 1 percentage point higher than the year
ago period.
-- Reduced cost structure in line with transformation strategy, helping
maintain adjusted EBITDA margin* performance.
-- TDS federal business recovering with DRR of 104% in the quarter.
"GK has had a considerable negative impact on revenue, earnings, and cash flow in the quarter and in the year-to-date period, and as a result, masked TDS enterprise stabilization," said John Frederick, Skillsoft's Chief Financial Officer. "We are moving with speed to reach a strategic solution. In the meantime, continued cost efficiencies are softening the effects on consolidated income. We are highly confident that we are nearing an inflection point toward growth for our core TDS enterprise business."
Full-Year Fiscal 2026 Financial Outlook
In connection with the decision to explore strategic alternatives for GK, we are unable to provide revenue and Adjusted EBITDA guidance for GK for the remainder of the fiscal year, but will do so for the TDS business. The following is a summary of the composition of our previously issued full fiscal year guidance between GK and TDS:
GAAP Revenue Adjusted EBITDA
-------------- ----------------------------- -----------------------------
TDS $400 million - $410 million $112 million - $116 million
-------------- ----------------------------- -----------------------------
GK $110 million - $120 million $0 million - $2 million
-------------- ----------------------------- -----------------------------
Consolidated $510 million - $530 million $112 million - $118 million
-------------- ----------------------------- -----------------------------
The following table reflects Skillsoft's financial outlook for the full fiscal year ending January 31, 2026, based on current market conditions, expectations, and assumptions:
Current Guidance Change Versus Prior
Guidance
--------------------- --------------------------- --------------------------
TDS Revenue $400 million - $410 No change
million
--------------------- --------------------------- --------------------------
TDS Adjusted EBITDA $112 million - $116 No change
million
--------------------- --------------------------- --------------------------
* Denotes a non-GAAP financial measure. See "Non-GAAP Financial Measures"
below for the definitions of these and other non-GAAP financial
measures included in this press release, how they are calculated, and
the rationale for their use. A reconciliation of historical non-GAAP
financial measures to the most directly comparable GAAP financial
measures is provided in the tables at the back of this press release.
We do not provide quantitative reconciliations for forward-looking
non-GAAP financial measures, as we are unable to provide a meaningful
or accurate calculation or estimation of reconciling items and the
information is not available without unreasonable effort. See "Non-GAAP
Financial Measures" below for further detail.
(1) Skillsoft has two operating and reportable segments: TDS (formerly
referred to as Content & Platform) and GK (formerly referred to as
Instructor-Led Training).
Webcast and Conference Call Information
Skillsoft will host a conference call and webcast today at 5:00 p.m. Eastern Time to discuss its financial results. To access the call, dial (877) 407--3088 from the United States and Canada or (201) 389--0927 from international locations. The live event can be accessed from the Investor Relations section of Skillsoft's website at investor.skillsoft.com. A replay will be available for twelve months.
About Skillsoft
Skillsoft (NYSE: SKIL) is a global leader in AI-native skills management for the human + AI era. By unifying learning, real-time skills intelligence, and workforce insights, Skillsoft helps enterprises build their Skillforce$(TM)$ -- humans and AI working together to drive measurable business outcomes. Through personalized, interactive learning across leadership, technology, and compliance, Skillsoft enables organizations to close critical skill gaps and accelerate transformation. Skillsoft is trusted by thousands of organizations worldwide, including 60% of the Fortune 1000, and supports a global community of more than 105 million learners. Learn more at skillsoft.com.
Non-GAAP Financial Measures
In addition to disclosing detailed operating results in accordance with U.S. GAAP, Skillsoft provides supplementary non-GAAP financial measures to consider in evaluating our operating performance. We track the non-GAAP financial measures that we believe are key financial measures of our success. Non-GAAP measures 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 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. In addition, management uses these non-GAAP financial measures 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 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 included in this press release because we believe that they provide meaningful supplemental information. However, non-GAAP financial measures have limitations as analytical tools. Because not all companies use identical calculations, our presentation of non-GAAP financial measures 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 non-GAAP financial 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. The items noted above with a * are for both consolidated and by segment.
We have provided at the back of this press release reconciliations of these non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures for the three and nine month periods ended October 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.
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.
-- Adjusted net income (loss) per share is defined as adjusted net income
(loss) divided by the number of diluted weighted average shares
outstanding, and adjusted net income (loss) margin % is defined as
adjusted net income (loss) as a percentage of revenue.
-- 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 EBITDA margin %* is defined as adjusted EBITDA as a percentage
of revenue.
-- Adjusted costs of revenues is defined as costs of revenues excluding
(where applicable) depreciation expense, long-term incentive compensation
expense, system migration costs and transformation costs.
-- Adjusted content and software development expenses is defined as content
and software development expenses excluding (where applicable)
depreciation expense, long-term incentive compensation expense, system
migration costs and transformation costs.
-- Adjusted selling and marketing expenses is defined as selling and
marketing expenses excluding (where applicable) depreciation expense,
long-term incentive compensation expense, system migration costs and
transformation costs.
-- Adjusted general and administrative expenses is defined as general and
administrative expense excluding (where applicable) depreciation expense,
long-term incentive compensation expense, system migration costs and
transformation costs.
-- Adjusted total operating expenses is 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.
-- 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 (as set forth above). 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.
*The items noted above with a * are for both consolidated and by segment. The by segment items represents a non-Accounting Standards Codification ("ASC") 280 segment measure, and is therefore a non-GAAP financial measure. See "Segment Information under ASC 280" below.
Key Performance Metric
Skillsoft also uses a supplementary key performance metric (dollar retention rate) that we believe is a key financial measure of our success. 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 key performance metrics when reporting their results. In addition, management uses dollar retention rate to assess operating performance, and to enhance investors' understanding of the core operating results of our business. We believe investors use dollar retention rate to assess how our business operates in, or responds to, macroeconomic trends or other events that impact our core operations. We use dollar retention rate because we believe that it provides meaningful supplemental information. However, this metric may not be comparable to other similarly titled measures of other companies. It is not a measure of financial condition or liquidity, and should not be considered in isolation from, or as a substitute analysis for, results of operations as determined in accordance with U.S. GAAP.
-- 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 of 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 not to 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.
Segment Information under ASC 280
Segment performance under ASC 280 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). As previously disclosed, in the fourth quarter of the fiscal year ended January 31, 2025, the Company made changes to the components used to determine these measures to increase transparency and improve segment comparability to peers. See Note 12 to the unaudited interim condensed consolidated financial statements included in our Quarterly Report on Form 10-Q for the third fiscal quarter of 2026 for further detail. All prior period comparatives have been recast to conform to the current presentation.
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, many of which are beyond our control, 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 filings with the Securities and Exchange Commission ("SEC"). 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. You are advised, however, to review any further factors and risks we describe in reports we file from time to time with the SEC after the date hereof.
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 guarantees or assurances of future performance 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)
October 31, January 31,
2025 2025
-------------- ---------------
ASSETS
Current assets:
Cash and cash equivalents $ 74,569 $ 100,766
Restricted cash 2,967 2,571
Accounts receivable, net of
allowance for credit losses of
approximately $376 and $501 as
of October 31, 2025 and January
31, 2025, respectively 103,907 178,989
Prepaid expenses and other
current assets 49,213 50,527
---------- -----------
Total current assets 230,656 332,853
Goodwill 296,300 317,071
Intangible assets, net 346,745 427,221
Other assets 23,881 28,924
---------- -----------
Total assets $ 897,582 $ 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 20,920 13,458
Accrued compensation 28,546 47,803
Accrued expenses and other
current liabilities 19,769 26,022
Deferred revenue 196,355 282,295
---------- -----------
Total current liabilities 272,994 376,982
---------- -----------
Long-term debt 570,181 573,267
Deferred tax liabilities 37,390 42,039
Deferred revenue - non-current 820 1,656
Other long-term liabilities 12,209 18,279
---------- -----------
Total long-term liabilities 620,600 635,241
---------- -----------
Commitments and contingencies
Shareholders' equity (deficit):
Shareholders' common stock -
Class A common shares, $0.0001
par value: 18,750,000 shares
authorized and 9,051,822 shares
issued and 8,752,045 shares
outstanding as of October 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 1,575,259 1,565,040
Accumulated (deficit) (1,546,502) (1,443,386)
Treasury stock, at cost -
299,777 shares as of October
31, 2025 and January 31, 2025 (10,891) (10,891)
Accumulated other comprehensive
income (loss) (13,879) (16,918)
---------- -----------
Total shareholders' equity
(deficit) 3,988 93,846
---------- -----------
Total liabilities and
shareholders' equity
(deficit) $ 897,582 $ 1,106,069
========== ===========
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except number of shares and per share amounts)
Three Months Ended Nine Months Ended
October 31, October 31,
----------------------- -----------------------
2025 2024 2025 2024
---------- ---------- ---------- ----------
Revenues:
Total revenues $ 128,998 $ 137,225 $ 382,021 $ 397,241
Operating expenses:
Costs of revenues 35,279 34,312 100,415 101,254
Content and software
development 13,789 14,937 42,208 45,436
Selling and marketing 36,078 39,615 115,278 122,591
General and
administrative 21,175 21,686 63,594 66,390
Amortization of
intangible assets 32,068 31,826 95,120 95,197
Impairment of goodwill 20,771 -- 20,771 --
Acquisition and
integration related
costs 17 931 1,327 3,349
Restructuring 4,150 3,095 7,653 15,361
--------- --------- --------- ---------
Total operating
expenses 163,327 146,402 446,366 449,578
--------- --------- --------- ---------
Operating income
(loss) (34,329) (9,177) (64,345) (52,337)
Other income (expense), net (1) (538) (2,508) 1,261
Fair value adjustment of
interest rate swaps (1,478) (822) (3,606) 418
Interest income 487 924 1,470 2,897
Interest expense (14,757) (15,845) (44,115) (48,538)
--------- --------- --------- ---------
Income (loss)
before
provision for
(benefit from)
income taxes (50,078) (25,458) (113,104) (96,299)
Provision for (benefit from)
income taxes (8,799) (1,859) (9,988) (5,498)
--------- --------- --------- ---------
Net income
(loss) $ (41,279) $ (23,599) $ (103,116) $ (90,801)
========= ========= ========= =========
Net income (loss) per
share:
Basic and diluted $ (4.74) $ (2.86) $ (12.08) $ (11.11)
========= ========= ========= =========
Weighted average common
share outstanding:
Basic and diluted 8,708,893 8,239,564 8,536,207 8,170,344
========= ========= ========= =========
SKILLSOFT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended October 31,
----------------------------------
2025 2024
---------------- ------------
Cash flows from operating
activities:
Net income (loss) $ (103,116) $ (90,801)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Amortization expense of
intangible assets 95,120 95,197
Stock-based compensation
expense 11,287 9,985
Depreciation expense 1,363 2,404
Impairment of goodwill 20,771 --
Non-cash interest expense 1,717 1,628
Non-cash operating lease
right-of-use asset
expense 1,197 1,749
Non-cash property,
equipment, software and
operating right-of-use
asset impairment charges 5 2,495
Provision for credit loss
expense (recovery) (125) (4)
Fair value adjustment of
interest rate swaps 3,606 (418)
Unrealized foreign currency
(gain) loss (1,042) (415)
Provision for (benefit
from) deferred income
taxes -- non-cash (4,891) (8,080)
Changes in current assets and
liabilities:
Accounts receivable 77,703 82,877
Prepaid expenses and other
assets, including
long-term 5,898 4,556
Accounts payable 7,225 6,693
Accrued expenses and other
liabilities, including
long-term (31,935) (16,206)
Deferred revenue (90,188) (79,446)
------------ -----------
Net cash provided by
(used in) operating
activities (5,405) 12,214
Cash flows from investing
activities:
Purchase of property and
equipment (1,606) (820)
Proceeds from sale of property
and equipment -- 10
Internally developed software
- capitalized costs (13,033) (13,018)
------------ -----------
Net cash provided by
(used in) investing
activities (14,639) (13,828)
Cash flows from financing
activities:
Shares repurchased for tax
withholding upon vesting of
restricted stock-based
awards (3,191) (1,052)
Proceeds from (payments on)
accounts receivable facility -- (34,971)
Principal payments on term
loans (4,803) (4,803)
------------ -----------
Net cash provided
by (used in)
financing
activities (7,994) (40,826)
Effect of exchange rate changes
on cash and cash equivalents 2,237 (2,281)
------------ -----------
Net increase
(decrease) in
cash, cash
equivalents
and restricted
cash (25,801) (44,721)
Cash, cash equivalents and
restricted cash, beginning of
period 103,337 146,523
------------ -----------
Cash, cash
equivalents
and
restricted
cash, end of
period $ 77,536 $ 101,802
============ ===========
Supplemental disclosure of cash
flow information:
Cash and cash equivalents $ 74,569 $ 97,921
Restricted cash 2,967 3,881
------------ -----------
Cash, cash equivalents and
restricted cash, end of
period $ 77,536 $ 101,802
============ ===========
SKILLSOFT CORP. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in thousands, except
percentages, number of shares and per share amounts, unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
-------------------------- --------------------------
2025 2024 2025 2024
---------- ---------- ---------- ----------
Revenues
Talent
Development
Solutions $ 100,798 $ 102,998 $ 301,131 $ 302,725
Global Knowledge 28,200 34,227 80,890 94,516
--------- --------- --------- ---------
Total revenues, as
reported $ 128,998 $ 137,225 $ 382,021 $ 397,241
========= ========= ========= =========
Net income (loss),
as reported $ (41,279) $ (23,599) $ (103,116) $ (90,801)
Amortization of
acquired
intangible
assets (1) 28,860 29,538 86,511 89,187
Impairment of
goodwill 20,771 -- 20,771 --
Acquisition and
integration
related costs 17 931 1,327 3,349
Restructuring 4,150 3,095 7,653 15,361
Transformation
costs 1,379 150 3,986 1,315
System migration
costs -- -- -- 118
Long-term
incentive
compensation
expenses 3,485 4,099 12,574 10,438
Executive exit
costs -- -- -- 3,326
Fair value
adjustment of
interest rate
swaps 1,478 822 3,606 (418)
Other (income)
expense, net 1 538 2,508 (1,261)
Tax impact of
adjustments (4,526) (4,292) (11,152) (12,615)
--------- --------- --------- ---------
Adjusted net income
(loss) 14,336 11,282 24,668 17,999
Interest
expense, net 14,270 14,921 42,645 45,641
Expense (benefit
from) income
taxes,
excluding tax
impacts above (4,273) 2,433 1,164 7,117
Depreciation 457 1,000 1,364 2,404
Amortization of
capitalized
internally
developed
software (1) 3,208 2,288 8,609 6,010
--------- --------- --------- ---------
Adjusted EBITDA $ 27,998 $ 31,924 $ 78,450 $ 79,171
========= ========= ========= =========
Weighted average
common shares
outstanding:
Basic and
diluted 8,708,893 8,239,564 8,536,207 8,170,344
========= ========= ========= =========
Basic and diluted
per share
information:
Net income
(loss) per
share, as
reported $ (4.74) $ (2.86) $ (12.08) $ (11.11)
========= ========= ========= =========
Adjusted net
income (loss)
per share $ 1.65 $ 1.37 $ 2.89 $ 2.20
========= ========= ========= =========
Net income (loss)
margin % (32.0)% (17.2)% (27.0)% (22.9)%
Amortization of
acquired
intangible
assets (1) 22.4% 21.5% 22.6% 22.5%
Impairment of
goodwill 16.1% 0.0% 5.4% 0.0%
--------- --------- --------- ---------
Acquisition and
integration
related costs 0.0% 0.7% 0.3% 0.8%
--------- --------- --------- ---------
Restructuring 3.2% 2.3% 2.0% 3.9%
Transformation
costs 1.1% 0.1% 1.0% 0.3%
System migration
costs 0.0% 0.0% 0.0% 0.0%
Long-term
incentive
compensation
expenses 2.7% 3.0% 3.3% 2.6%
Executive exit
costs 0.0% 0.0% 0.0% 0.8%
Fair value
adjustment of
interest rate
swaps 1.1% 0.6% 0.9% (0.1)%
Other (income)
expense, net 0.0% 0.3% 0.9% (0.2)%
Tax impact of
adjustments (3.5)% (3.1)% (2.9)% (3.2)%
--------- --------- --------- ---------
Adjusted net income
(loss) margin % 11.1% 8.2% 6.5% 4.5%
Interest
expense, net 11.0% 10.9% 11.0% 11.5%
Expense (benefit
from) income
taxes,
excluding tax
impacts above (3.3)% 1.8% 0.3% 1.8%
Depreciation 0.4% 0.7% 0.4% 0.6%
Amortization of
capitalized
internally
developed
software (1) 2.5% 1.7% 2.3% 1.5%
--------- --------- --------- ---------
Adjusted EBITDA
margin % 21.7% 23.3% 20.5% 19.9%
========= ========= ========= =========
(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.
TALENT DEVELOPMENT SOLUTIONS SEGMENT
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
---------------------- ----------------------
2025 2024 2025 2024
-------- -------- -------- --------
Total TDS Segment
revenues, as
reported $100,798 $102,998 $301,131 $302,725
======= ======= ======= =======
TDS Segment Net
income (loss) (1) $(14,622) $(21,285) $(61,866) $(82,964)
Amortization of
acquired
intangible
assets (2) 27,293 27,950 81,873 84,086
Acquisition and
integration
related costs 17 932 1,309 3,343
Restructuring 3,390 1,646 6,019 11,659
Transformation
costs 1,379 145 3,986 1,304
System migration
costs -- -- -- 118
Long-term
incentive
compensation
expenses 3,665 4,183 11,922 10,181
Executive exit
costs -- -- -- 3,326
Fair value
adjustment of
interest rate
swaps 1,478 822 3,606 (418)
Other (income)
expense, net (688) 158 (101) 287
Tax impact of
adjustments (2,657) (3,934) (8,718) (11,833)
------- ------- ------- -------
TDS Segment
Adjusted net
income (loss) 19,255 10,617 38,030 19,089
Interest
expense, net 14,287 14,927 42,710 45,674
Expense (benefit
from) income
taxes,
excluding tax
impacts above (5,821) 1,436 (1,025) 5,740
Depreciation 338 735 994 1,714
Amortization of
capitalized
internally
developed
software (2) 3,208 2,288 8,609 6,010
------- ------- ------- -------
TDS Segment
Adjusted EBITDA $ 31,267 $ 30,003 $ 89,318 $ 78,227
======= ======= ======= =======
TDS Segment Net
income (loss)
margin % (14.5)% (20.7)% (20.5)% (27.4)%
Amortization of
acquired
intangible
assets (2) 27.1% 27.1% 27.2% 27.8%
Acquisition and
integration
related costs 0.0% 0.9% 0.4% 1.1%
Restructuring 3.4% 1.6% 2.0% 3.9%
Transformation
costs 1.4% 0.1% 1.3% 0.4%
System migration
costs 0.0% 0.0% 0.0% 0.0%
Long-term
incentive
compensation
expenses 3.6% 4.1% 4.0% 3.4%
Executive exit
costs 0.0% 0.0% 0.0% 1.1%
Fair value
adjustment of
interest rate
swaps 1.5% 0.8% 1.2% (0.1)%
Other (income)
expense, net -0.8% 0.2% -0.1% 0.0%
Tax impact of
adjustments (2.6)% (3.8)% (2.9)% (3.9)%
------- ------- ------- -------
TDS Segment
Adjusted net
income (loss)
margin % 19.1% 10.3% 12.6% 6.3%
Interest
expense, net 14.2% 14.5% 14.2% 15.0%
Expense (benefit
from) income
taxes,
excluding tax
impacts above (5.8)% 1.4% (0.3)% 1.9%
Depreciation 0.3% 0.7% 0.3% 0.6%
Amortization of
capitalized
internally
developed
software (2) 3.2% 2.2% 2.9% 2.0%
------- ------- ------- -------
TDS Segment
Adjusted EBITDA
margin % 31.0% 29.1% 29.7% 25.8%
======= ======= ======= =======
(1) The TDS and GK net income (loss) amounts combined agree with the
amounts reported on the consolidated statements of operations.
(2) All amortization (not only amortization pertaining to finite-lived
intangible assets recognized as part of business combination
accounting) is excluded in the determination of TDS Segment Adjusted
EBITDA.
SKILLSOFT CORP.
GLOBAL KNOWLEDGE SEGMENT
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
--------------------- ---------------------
2025 2024 2025 2024
-------- ------- -------- -------
Total GK Segment
revenues, as
reported $ 28,200 $34,227 $ 80,890 $94,516
======= ====== ======= ======
GK Segment Net
income (loss) (1) $(26,657) $(2,314) $(41,250) $(7,837)
Amortization of
acquired
intangible
assets (2) 1,567 1,588 4,638 5,101
Impairment of
goodwill 20,771 -- 20,771 --
Acquisition and
integration
related costs -- (1) 18 6
Restructuring 760 1,449 1,634 3,702
Transformation
costs -- 5 -- 11
Long-term
incentive
compensation
expenses (180) (84) 652 257
Other (income)
expense, net 689 380 2,609 (1,548)
Tax impact of
adjustments (1,869) (358) (2,434) (782)
------- ------ ------- ------
GK Segment Adjusted
net income (loss) (4,919) 665 (13,362) (1,090)
Interest
expense, net (17) (6) (65) (33)
Expense (benefit
from) income
taxes,
excluding tax
impacts above 1,548 997 2,189 1,377
Depreciation 119 265 370 690
------- ------ ------- ------
GK Segment Adjusted
EBITDA $ (3,269) $ 1,921 $(10,868) $ 944
======= ====== ======= ======
Net income (loss)
margin % (94.5)% (6.8)% (51.0)% (8.3)%
Amortization of
acquired
intangible
assets (2) 5.6% 4.6% 5.7% 5.4%
Impairment of
goodwill 73.7% 0.0% 25.7% 0.0%
Acquisition and
integration
related costs 0.0% 0.0% 0.0% 0.0%
Restructuring 2.7% 4.2% 2.0% 3.9%
Transformation
costs 0.0% 0.0% 0.0% 0.0%
Long-term
incentive
compensation
expenses -0.6% (0.2)% 0.8% 0.3%
Other (income)
expense, net 2.3% 1.1% 3.3% (1.7)%
Tax impact of
adjustments (6.6)% (1.0)% (3.0)% (0.8)%
------- ------ ------- ------
GK Segment Adjusted
net income (loss)
margin % (17.4)% 1.9% (16.5)% (1.2)%
Interest
expense, net (0.1)% 0.0% (0.1)% 0.0%
Expense (benefit
from) income
taxes,
excluding tax
impacts above 5.5% 2.9% 2.7% 1.5%
Depreciation 0.4% 0.8% 0.5% 0.7%
------- ------ ------- ------
GK Segment Adjusted
EBITDA margin % (11.6)% 5.6% (13.4)% 1.0%
======= ====== ======= ======
(1) The TDS and GK net income (loss) amounts combined agree with the
amounts reported on the consolidated statements of operations.
(2) All amortization (not only amortization pertaining to finite-lived
intangible assets recognized as part of business combination
accounting) is excluded in the determination of GK Segment Adjusted
EBITDA.
SKILLSOFT CORP.
BUSINESS UNIT CONTRIBUTION PROFIT AND MARGIN
(in thousands, except percentages, unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
---------------------- ----------------------
2025 2024 2025 2024
-------- -------- -------- --------
Talent Development
Solutions
Revenue $100,798 $102,998 $301,131 $302,725
Business unit cost
of revenues 17,698 14,763 49,765 46,481
Business unit
content and
software
development
expenses 13,020 13,149 37,585 39,944
Business unit
product research
and management
expenses 2,153 2,429 6,751 6,314
------- ------- ------- -------
Business unit
contribution
profit $ 67,927 $ 72,657 $207,030 $209,986
======= ======= ======= =======
Business unit
contribution
margin 67.4% 70.5% 68.8% 69.4%
Global Knowledge
Revenue $ 28,200 $ 34,227 $ 80,890 $ 94,516
Business unit cost
of revenues 17,373 19,257 50,032 53,959
Business unit
content and
software
development
expenses 650 857 2,112 2,095
------- ------- ------- -------
Business unit
contribution
profit $ 10,177 $ 14,113 $ 28,746 $ 38,462
======= ======= ======= =======
Business unit
contribution
margin 36.1% 41.2% 35.5% 40.7%
SKILLSOFT CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - continued
(in thousands, unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------- -------------------
2025 2024 2025 2024
-------- -------- -------- --------
Operating
expenses:
GAAP costs of
revenues $ 35,279 $ 34,312 $100,415 $101,254
Depreciation (67) (91) (202) (315)
Long-term
incentive
compensation
expenses (141) (201) (416) (499)
------- ------- ------- -------
Adjusted costs of
revenues 35,071 34,020 99,797 100,440
GAAP content and
software
development
expenses 13,789 14,937 42,208 45,436
Depreciation (94) (74) (266) (218)
Long-term
incentive
compensation
expenses (25) (857) (2,245) (3,061)
System migration
costs -- -- -- (118)
------- ------- ------- -------
Adjusted content
and software
development
expenses 13,670 14,006 39,697 42,039
GAAP selling and
marketing
expenses 36,078 39,615 115,278 122,591
Depreciation (145) (161) (430) (531)
Long-term
incentive
compensation
expenses (772) (1,595) (2,752) (3,648)
Transformation
costs -- -- -- (213)
------- ------- ------- -------
Adjusted selling
and marketing
expenses 35,161 37,859 112,096 118,199
GAAP general and
administrative
expenses 21,175 21,686 63,594 66,390
Depreciation (151) (674) (466) (1,340)
Long-term
incentive
compensation
expenses (2,547) (1,446) (7,161) (3,230)
Transformation
costs (1,379) (150) (3,986) (1,102)
Executive exit
costs -- -- -- (3,326)
------- ------- ------- -------
Adjusted general
and administrative
expenses 17,098 19,416 51,981 57,392
Total GAAP
operating
expenses 106,321 110,550 321,495 335,671
Depreciation (457) (1,000) (1,364) (2,404)
Long-term
incentive
compensation
expenses (3,485) (4,099) (12,574) (10,438)
System migration
costs -- -- -- (118)
Transformation
costs (1,379) (150) (3,986) (1,315)
Executive exit
costs -- -- -- (3,326)
------- ------- ------- -------
Adjusted total
operating
expenses $101,000 $105,301 $303,571 $318,070
======= ======= ======= =======
SKILLSOFT CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - continued
(in thousands, unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------ -----------------
2025 2024 2025 2024
------- -------- ------- -------
Talent Development
Solutions
Cost of revenues
and content and
software
development
expenses:
GAAP costs of
revenues $17,900 $ 15,027 $50,352 $47,182
Depreciation (64) (86) (194) (266)
Long-term
incentive
compensation
expenses (139) (178) (393) (435)
------ ------- ------ ------
Business unit
costs of
revenues 17,697 14,763 49,765 46,481
GAAP content and
software
development
expenses 13,188 14,096 40,089 43,327
Depreciation (93) (73) (263) (211)
Long-term
incentive
compensation
expenses (75) (874) (2,241) (3,054)
System migration
costs -- -- -- (118)
------ ------- ------ ------
Business unit
content and
software
development 13,020 13,149 37,585 39,944
GAAP cost of
revenues and
content and
software
development
expenses 31,088 29,123 90,441 90,509
Depreciation (157) (159) (457) (477)
Long-term
incentive
compensation
expenses (214) (1,052) (2,634) (3,489)
System migration
costs -- -- -- (118)
------ ------- ------ ------
Business unit
total cost
of revenues
and content
and software
development
expenses $30,717 $ 27,912 $87,350 $86,425
====== ======= ====== ======
Global Knowledge
Cost of revenues
and content and
software
development
expenses:
GAAP costs of
revenues $17,379 $ 19,285 $50,063 $54,072
Depreciation (3) (5) (8) (49)
Long-term
incentive
compensation
expenses (2) (23) (23) (64)
------ ------- ------ ------
Business unit
costs of
revenues 17,374 19,257 50,032 53,959
GAAP content and
software
development
expenses 601 841 2,119 2,109
Depreciation (2) 41 (3) 35
Long-term
incentive
compensation
expenses 51 (25) (4) (49)
------ ------- ------ ------
Business unit
content and
software
development
expenses 650 857 2,112 2,095
GAAP cost of
revenues and
content and
software
development
expenses 17,980 20,126 52,182 56,181
Depreciation (5) 36 (11) (14)
Long-term
incentive
compensation
expenses 49 (48) (27) (113)
------ ------- ------ ------
Business unit
total cost
of revenues
and content
and software
development
expenses $18,024 $ 20,114 $52,144 $56,054
====== ======= ====== ======
SKILLSOFT CORP. FREE CASH FLOW and ADJUSTED FREE CASH FLOW
(LEVERED) RECONCILIATION (in thousands, unaudited)
Three Months Ended Nine Months Ended
October 31, October 31,
------------------ -------------------
2025 2024 2025 2024
-------- ------- -------- --------
Free cash flow
reconciliation
Net cash provided
by (used in)
operating
activities $(18,859) $ 8,717 $ (5,405) $ 12,214
Purchase of
property and
equipment, net (467) (411) (1,606) (810)
Internally
developed
software -
capitalized
costs (4,258) (4,222) (13,033) (13,018)
------- ------ ------- -------
Free cash flow (23,584) 4,084 (20,044) (1,614)
Cash impact for
adjusted EBITDA
excluded
charges 6,043 10,089 15,581 17,187
------- ------ ------- -------
Adjusted
free cash
flow
(levered) $(17,541) $14,173 $ (4,463) $ 15,573
======= ====== ======= =======
View source version on businesswire.com: https://www.businesswire.com/news/home/20251210294413/en/
CONTACT: Investors:
Ross Collins or Stephen Poe
SKIL@alpha-ir.com
Media:
Skillsoft Public Relations
PR@skillsoft.com
(END) Dow Jones Newswires
December 10, 2025 16:05 ET (21:05 GMT)
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