Skillsoft Reports Financial Results for the Second Quarter of Fiscal 2025
Skillsoft Corp. (NYSE: SKIL) reported financial results for Q2 FY2025 ended July 31, 2024. Key highlights include:
- Talent Development Solutions revenue of $102 million, down 1% YoY
- Total revenue of $132 million, down 6% YoY
- Net loss of $40 million, compared to $32 million loss in prior year
- Adjusted EBITDA of $28 million, 21% margin, up from $25 million and 18% margin YoY
- Cash position of $130 million at quarter-end
The company reaffirmed its FY2025 outlook with revenue projected at $510-$525 million and Adjusted EBITDA at $105-$110 million. Skillsoft also highlighted partnerships with Microsoft for GenAI upskilling programs and launched a reimagined AI-driven learning platform.
Skillsoft Corp. (NYSE: SKIL) ha pubblicato i risultati finanziari per il secondo trimestre dell'anno fiscale 2025, chiuso il 31 luglio 2024. I principali punti salienti includono:
- Ricavi delle Soluzioni per lo Sviluppo del Talento pari a 102 milioni di dollari, in calo dell'1% rispetto all'anno precedente
- Ricavi totali di 132 milioni di dollari, in calo del 6% rispetto all'anno precedente
- Perdita netta di 40 milioni di dollari, rispetto a una perdita di 32 milioni di dollari nell'anno precedente
- EBITDA rettificato di 28 milioni di dollari, con un margine del 21%, in aumento rispetto ai 25 milioni di dollari e al margine del 18% dell'anno precedente
- Posizione di cassa di 130 milioni di dollari alla fine del trimestre
L'azienda ha ribadito le previsioni per l'anno fiscale 2025, con ricavi previsti tra 510 e 525 milioni di dollari e EBITDA rettificato tra 105 e 110 milioni di dollari. Skillsoft ha anche evidenziato le collaborazioni con Microsoft per programmi di upskilling in GenAI e ha lanciato una piattaforma di apprendimento guidata dall'AI reinventata.
Skillsoft Corp. (NYSE: SKIL) informó los resultados financieros del segundo trimestre del año fiscal 2025, que finalizó el 31 de julio de 2024. Los puntos destacados incluyen:
- Ingresos de Soluciones de Desarrollo de Talento de 102 millones de dólares, en caída del 1% interanual
- Ingresos totales de 132 millones de dólares, en caída del 6% interanual
- Pérdida neta de 40 millones de dólares, en comparación con una pérdida de 32 millones de dólares en el año anterior
- EBITDA ajustado de 28 millones de dólares, con un margen del 21%, en aumento desde los 25 millones de dólares y un margen del 18% interanual
- Posición de efectivo de 130 millones de dólares al final del trimestre
La empresa reafirmó su perspectiva para el año fiscal 2025, con ingresos proyectados entre 510 y 525 millones de dólares y EBITDA ajustado entre 105 y 110 millones de dólares. Skillsoft también destacó sus asociaciones con Microsoft para programas de upskilling en GenAI y lanzó una plataforma de aprendizaje impulsada por AI reinventada.
Skillsoft Corp. (NYSE: SKIL)는 2024년 7월 31일에 종료된 2025 회계연도 2분기 재무 결과를 발표했습니다. 주요 하이라이트는 다음과 같습니다:
- 인재 개발 솔루션 매출 1억 2천만 달러, 전년 대비 1% 감소
- 총 매출 1억 3천2백만 달러, 전년 대비 6% 감소
- 순손실 4천만 달러, 전년도 3천2백만 달러 손실에 비해 증가
- 조정 후 EBITDA 2천8백만 달러, 21% 마진으로 전년 대비 2천5백만 달러 및 18% 마진에서 증가
- 분기 말 현금 보유액 1억 3천만 달러
회사는 2025 회계연도 전망을 재확인하며 예상 매출을 5억 1천만에서 5억 2천5백만 달러, 조정 후 EBITDA를 1억 5천만에서 1억 1천만 달러로 제시했습니다. Skillsoft는 또한 Microsoft와의 GenAI 업스킬링 프로그램 파트너십을 강조하고 AI 기반 학습 플랫폼을 재구성하여 출시했습니다.
Skillsoft Corp. (NYSE: SKIL) a publié ses résultats financiers pour le deuxième trimestre de l'exercice 2025, clos le 31 juillet 2024. Les faits saillants comprennent :
- Chiffre d'affaires des Solutions de Développement des Talents de 102 millions de dollars, en baisse de 1 % par rapport à l'année précédente
- Chiffre d'affaires total de 132 millions de dollars, en baisse de 6 % par rapport à l'année précédente
- Perte nette de 40 millions de dollars, contre une perte de 32 millions de dollars l'année précédente
- EBITDA ajusté de 28 millions de dollars, avec une marge de 21 %, en hausse par rapport à 25 millions de dollars et une marge de 18 % l'année précédente
- Position de trésorerie de 130 millions de dollars à la fin du trimestre
La société a réaffirmé ses prévisions pour l'exercice 2025, avec un chiffre d'affaires prévu entre 510 et 525 millions de dollars et un EBITDA ajusté entre 105 et 110 millions de dollars. Skillsoft a également mis en avant ses partenariats avec Microsoft pour des programmes de montée en compétences en GenAI et a lancé une plateforme d'apprentissage réimaginée propulsée par l'IA.
Skillsoft Corp. (NYSE: SKIL) hat die Finanzergebnisse für das zweite Quartal des Geschäftsjahres 2025 veröffentlicht, das am 31. Juli 2024 endete. Zu den wichtigsten Punkten gehören:
- Umsatz der Talententwicklungs-Lösungen von 102 Millionen US-Dollar, Rückgang um 1% im Vergleich zum Vorjahr
- Gesamtumsatz von 132 Millionen US-Dollar, Rückgang um 6% im Vergleich zum Vorjahr
- Nettoverlust von 40 Millionen US-Dollar, im Vergleich zu einem Verlust von 32 Millionen US-Dollar im Vorjahr
- Bereinigtes EBITDA von 28 Millionen US-Dollar, 21% Marge, steigend von 25 Millionen US-Dollar und 18% Marge im Vorjahr
- Liquidität von 130 Millionen US-Dollar zum Quartalsende
Das Unternehmen hat seinen Ausblick für das Geschäftsjahr 2025 bekräftigt und erwartet einen Umsatz zwischen 510 und 525 Millionen US-Dollar sowie ein bereinigtes EBITDA zwischen 105 und 110 Millionen US-Dollar. Skillsoft hob auch die Partnerschaften mit Microsoft für GenAI-Weiterbildungsprogramme hervor und lancierte eine neu gestaltete KI-gestützte Lernplattform.
- Adjusted EBITDA improved to $28 million with 21% margin, up from $25 million and 18% margin YoY
- Adjusted Net Loss improved to $20 million from $30 million in the prior year
- Reaffirmed financial outlook for FY2025, indicating confidence in future performance
- Partnered with Microsoft to innovate GenAI upskilling programs
- Launched a reimagined AI-driven learner experience platform
- Recognized as 'Overall eLearning Company of the Year' in the Edtech Breakthrough Awards
- Total revenue declined 6% YoY to $132 million
- Net loss increased to $40 million from $32 million in the prior year
- Talent Development Solutions revenue down 1% YoY to $102 million
- Global Knowledge revenue declined 20% YoY to $31 million
Insights
Skillsoft's Q2 FY2025 results show mixed performance. Revenue declined 6% to
The company's focus on "Fix the Basics" strategy and transition to a dual business unit structure appears to be yielding positive results in profitability. The reaffirmed full-year outlook suggests management's confidence in achieving
Skillsoft's strategic pivot towards AI-driven learning solutions is timely and potentially transformative. The partnership with Microsoft for GenAI upskilling programs positions Skillsoft at the forefront of a critical market need. The reimagined platform with AI-driven personalization could significantly enhance user engagement and learning outcomes.
However, the
Skillsoft's 2024 C-Suite Perspectives report highlights a critical skills gap in cybersecurity, AI and data science. This presents both a challenge and an opportunity for Skillsoft. The company's focus on non-traditional technical skills and "soft" skills aligns well with market demands.
The
- Delivered strong improvements in Adjusted EBITDA and margin expansion
- Reaffirmed financial outlook for the full fiscal year
- Appointed Executives for our two business units with each fully accountable for contribution margin
- Hosted successful virtual Investor Day, showcasing strategic vision and growth initiatives
Fiscal 2025 Second Quarter Select Metrics and Financials from Continuing Operations (1)(2)
-
Talent Development Solutions (formerly known as Content & Platform) Revenue of
down$102 million 1% from prior year. Total Revenue of declined$132 million 6% , primarily due to a20% decline in Global Knowledge (formerly known as Instructor Led Training) Revenue to .$31 million -
Net Loss of
compared to net loss of$40 million in the prior year. Net Loss per share of$32 million compared to net loss per share of$4.84 in the prior year. Adjusted Net Loss of$4.00 improved from Adjusted Net Loss of$20 million in the prior year. Adjusted Net Loss per share of$30 million improved from Adjusted Net Loss per share of$2.40 in the prior year.$3.68 -
Adjusted EBITDA from continuing operations of
, reflecting a margin of$28 million 21% of Revenue, compared to and a margin of$25 million 18% of Revenue in the prior year. -
Ended the quarter with
of cash, cash equivalents, and restricted cash.$130 million
“Our revenue and adjusted EBITDA performance were in line with our expectations for the quarter," said Ron Hovsepian, Skillsoft’s Executive Chair and Chief Executive Officer. "Our progress on the ‘Fix the Basics’ strategy, including transitioning to a dual business unit structure, already shows improved outcomes. Key leaders have been added, which will further accelerate our efforts. This progress strengthens our foundation for continued profitable growth, unlock shareholder value, and customer success.”
Fiscal 2025 Second Quarter Business Highlights
- Microsoft and Skillsoft partnered to innovate GenAI upskilling programs; designed to empower organizations and their workforce to harness the full potential of Microsoft AI and GenAI technology in their daily operations, driving productivity and innovation through interactive virtual environments, outcome-oriented assessments and personalized results and feedback.
- Launched a reimagined Skillsoft platform user experience, featuring a personalized, AI-driven learner experience with enhanced intuitive design and sequenced learning paths to maximize engagement and effectiveness.
- Recognized with multiple industry-leading awards. Most notably, Skillsoft was named “Overall eLearning Company of the Year” in the Edtech Breakthrough Awards, recognizing our eLearning excellence and AI innovations we have brought to market over the last 12 months. Skillsoft was also recognized by Training Industry as a “Top AI in Training” company.
- Released our 2024 C-Suite Perspectives report, uncovering a critical skills crisis in cybersecurity, AI, and data science areas. The report highlights the increasing difficulty in attracting and hiring candidates with the right skills, compounded by the rapid pace of technological change, making skills training challenging. However, new training approaches that prioritize both non-traditional technical skills and essential "soft" skills are starting to close these gaps, helping to build stronger, more agile teams.
- Hosted Investor Day, where leadership outlined the company’s strategic priorities, recent innovations, and financial performance. The event highlighted the focus on AI-driven learning solutions and long-term growth strategies, reaffirming commitment to delivering value through continuous innovation and platform enhancement.
“I am pleased with the progress we made this quarter towards our longer-term goals to grow at or above market rates in all areas of our business,” said Rich Walker, Skillsoft’s Chief Financial Officer. “Equally important, we remain laser focused on near-term operational execution and are reaffirming our outlook for FY25.”
Full-Year Fiscal 2025 Financial Outlook (2)
The following table reflects Skillsoft’s reaffirmed financial outlook for the fiscal year ending January 31, 2025, based on current market conditions, expectations, and assumptions:
GAAP Revenue |
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Adjusted EBITDA |
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(1) |
Growth calculated relative to the comparable prior year period unless otherwise noted. |
(2) |
See “Non-GAAP Financial Measures and Key Performance Metrics” below for the definitions of our key operational and non-GAAP metrics and how they are calculated and more information regarding the fact that the Company is unable to reconcile forward-looking non-GAAP measures without unreasonable efforts. We have provided at the back of this release reconciliations of our historical non-GAAP financial measures to the comparable GAAP measures. |
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
About Skillsoft
Skillsoft delivers transformative learning experiences that propel organizations and people to grow together. The Company partners with enterprise organizations and serves a global community of learners to prepare today’s employees for tomorrow’s economy. With Skillsoft, customers gain access to blended, multimodal learning experiences that do more than build skills, they grow a more capable, adaptive, and engaged workforce. Through a portfolio of high-quality content, an AI-enabled platform that is personalized and connected to customer needs, and a broad ecosystem of partners, Skillsoft drives continuous growth and performance for employees and their organizations by overcoming critical skills gaps, unlocking human potential, and transforming the workforce. Learn more at www.skillsoft.com.
Non-GAAP Financial Measures and Key Performance Metrics
The Company has organized its business into two segments (or Business Units): Talent Development Solutions (formerly referred to as Content & Platform) and Global Knowledge (formerly referred to as Instructor-Led Training). 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
We have provided at the back of this press release reconciliations of our historical non-GAAP financial measures to the comparable GAAP measures. We do not reconcile our forward-looking non-GAAP financial measures to the corresponding
We disclose the below non-GAAP financial measures and key performance metrics in this press release because we believe these non-GAAP financial measures and key performance metrics provide meaningful supplemental information.
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.
Adjusted net income (loss) - Adjusted net income (loss) is defined as GAAP net income (loss) excluding non-cash items, discrete and event-specific costs that do not represent normal, recurring, cash operating expenses necessary for our business operations, and certain accounting income and/or expenses that management believes are necessary to enhance the comparability and are useful in assessing our operating performance, include the following (including the related tax effects):
- Acquisition and integration related costs – Costs incurred to effectuate an acquisition, including contingent compensation expenses, and integration related costs.
- Restructuring charges – Severance costs and the abandonment of right-of-use assets resulting from the acquisition integration process and cost saving initiatives.
- 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.
- Stock-based compensation expense – Non-cash expense associated with stock-based compensation.
- Executive exit costs – Costs associated with departure of executives that are not a result of restructuring initiatives.
- Fair value adjustments – Mark-to-market adjustments of warrants and hedge instruments.
- Foreign currency impact – Unrealized and realized foreign exchange gains or losses due to fluctuations in currency exchange rates.
- (Gain) loss on sale of business - Gain or loss on non-routine sale of business.
- Income from discontinued operations – Income from discontinued operations that do not reflect our current operating performance.
- Impairment charges - Non-cash goodwill, intangible or other asset impairment charges.
Adjusted EBITDA - Adjusted EBITDA is defined as adjusted net income (loss) excluding interest expense or income, benefit from or provision for income taxes, depreciation and amortization expense.
Adjusted operating expenses – Adjusted operating expenses are defined as GAAP costs of revenues, content and software development, selling and marketing, and general and administrative expenses, excluding depreciation expense, stock-based compensation expense, system migration costs, transformation costs, and other non-cash charges, as applicable.
Adjusted gross margin – Adjusted gross margin is defined as GAAP revenue less GAAP cost of revenues, excluding stock-based compensation expense and depreciation expense, divided by GAAP revenue for the same period.
Adjusted contribution margin – Adjusted contribution margin is defined as GAAP revenue less adjusted operating expenses, divided by GAAP revenue for the same period.
Free cash flow – Free cash flow is defined as GAAP net cash provided by (used in) operating activities less purchases of property and equipment and internally developed software.
Adjusted free cash flow (levered) – Adjusted free cash flow (levered) is defined as free cash flow plus the cash impact for adjusted EBITDA excluded charges.
Free cash flow conversion – Free cash flow conversion is defined as free cash flow divided by adjusted EBITDA for the same period.
Net leverage – 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.
Reclassifications
Certain amounts reported in prior years have been reclassified to conform to the presentation in the current year. These reclassifications had no effect on total assets, total liabilities, total stockholders' equity, or net income (loss) for the prior year.
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, which are intended to be covered by the safe harbors created by those laws. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook (including revenue, non-GAAP EBITDA, and free cash flow), our product development and planning, our sales pipeline, future capital expenditures, share repurchases, financial results, the impact of regulatory changes, existing and evolving business strategies and acquisitions and dispositions, demand for our services, competitive strengths, the benefits of new initiatives, growth of our business and operations, and our ability to successfully implement our plans, strategies, objectives, expectations and intentions are forward-looking statements. Also, when we use words such as “may”, “will”, “would”, “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “project”, “forecast”, “seek”, “outlook”, “target”, “goal”, “probably”, or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of Skillsoft’s management and are subject to significant risks and uncertainties. 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” in our Form 10‑K for the fiscal year ended January 31, 2024. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements included 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.
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 data 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) |
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July 31, 2024 |
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January 31, 2024 |
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ASSETS |
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Current assets: |
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|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
122,652 |
|
|
$ |
136,308 |
|
Restricted cash |
|
|
7,491 |
|
|
|
10,215 |
|
Accounts receivable, net of allowance for credit losses of approximately |
|
|
110,042 |
|
|
|
185,638 |
|
Prepaid expenses and other current assets |
|
|
60,873 |
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|
|
53,170 |
|
Total current assets |
|
|
301,058 |
|
|
|
385,331 |
|
Property and equipment, net |
|
|
4,319 |
|
|
|
6,639 |
|
Goodwill |
|
|
317,071 |
|
|
|
317,071 |
|
Intangible assets, net |
|
|
484,294 |
|
|
|
539,293 |
|
Right of use assets |
|
|
5,336 |
|
|
|
8,044 |
|
Other assets |
|
|
14,314 |
|
|
|
17,256 |
|
Total assets |
|
$ |
1,126,392 |
|
|
$ |
1,273,634 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Current maturities of long-term debt |
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$ |
6,404 |
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|
$ |
6,404 |
|
Borrowings under accounts receivable facility |
|
|
40,406 |
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|
|
44,980 |
|
Accounts payable |
|
|
14,072 |
|
|
|
14,512 |
|
Accrued compensation |
|
|
28,602 |
|
|
|
31,774 |
|
Accrued expenses and other current liabilities |
|
|
23,724 |
|
|
|
29,939 |
|
Lease liabilities |
|
|
2,613 |
|
|
|
3,049 |
|
Deferred revenue |
|
|
226,573 |
|
|
|
282,570 |
|
Total current liabilities |
|
|
342,394 |
|
|
|
413,228 |
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|
|
|
|
|
|
|
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Long-term debt |
|
|
575,364 |
|
|
|
577,487 |
|
Deferred tax liabilities |
|
|
45,891 |
|
|
|
52,148 |
|
Long-term lease liabilities |
|
|
7,156 |
|
|
|
9,251 |
|
Deferred revenue - non-current |
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|
1,688 |
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|
|
2,402 |
|
Other long-term liabilities |
|
|
12,477 |
|
|
|
13,531 |
|
Total long-term liabilities |
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|
642,576 |
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|
|
654,819 |
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Commitments and contingencies |
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Shareholders’ equity: |
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Shareholders’ common stock - Class A common shares, |
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1 |
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|
1 |
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Additional paid-in capital |
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1,556,865 |
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|
|
1,551,005 |
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Accumulated equity (deficit) |
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|
(1,388,680 |
) |
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|
(1,321,478 |
) |
Treasury stock, at cost - 299,777 shares as of July 31, 2024 and January 31, 2024 |
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(10,891 |
) |
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(10,891 |
) |
Accumulated other comprehensive income (loss) |
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(15,873 |
) |
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|
(13,050 |
) |
Total shareholders’ equity |
|
|
141,422 |
|
|
|
205,587 |
|
Total liabilities and shareholders’ equity |
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$ |
1,126,392 |
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|
$ |
1,273,634 |
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SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) |
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Three Months Ended July 31, |
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Six Months Ended July 31, |
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2024 |
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2023 |
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2024 |
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2023 |
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Revenues: |
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Total revenues |
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$ |
132,223 |
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|
$ |
141,187 |
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$ |
260,016 |
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$ |
276,741 |
|
Operating expenses: |
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|
|
|
|
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|
|
|
|
|
|
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|
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Costs of revenues |
|
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32,471 |
|
|
|
40,467 |
|
|
|
66,942 |
|
|
|
78,291 |
|
Content and software development |
|
|
14,993 |
|
|
|
17,863 |
|
|
|
30,499 |
|
|
|
34,898 |
|
Selling and marketing |
|
|
40,684 |
|
|
|
40,411 |
|
|
|
82,976 |
|
|
|
86,338 |
|
General and administrative |
|
|
19,395 |
|
|
|
25,085 |
|
|
|
44,704 |
|
|
|
50,381 |
|
Amortization of intangible assets |
|
|
31,788 |
|
|
|
39,221 |
|
|
|
63,371 |
|
|
|
77,466 |
|
Acquisition and integration related costs |
|
|
921 |
|
|
|
937 |
|
|
|
2,418 |
|
|
|
2,328 |
|
Restructuring |
|
|
11,299 |
|
|
|
2,501 |
|
|
|
12,266 |
|
|
|
7,719 |
|
Total operating expenses |
|
|
151,551 |
|
|
|
166,485 |
|
|
|
303,176 |
|
|
|
337,421 |
|
Operating income (loss) |
|
|
(19,328 |
) |
|
|
(25,298 |
) |
|
|
(43,160 |
) |
|
|
(60,680 |
) |
Other income (expense), net |
|
|
(418 |
) |
|
|
(934 |
) |
|
|
1,799 |
|
|
|
(1,309 |
) |
Fair value adjustment of warrants |
|
|
— |
|
|
|
793 |
|
|
|
— |
|
|
|
3,645 |
|
Fair value adjustment of interest rate swaps |
|
|
(6,506 |
) |
|
|
6,935 |
|
|
|
1,240 |
|
|
|
7,205 |
|
Interest income |
|
|
1,045 |
|
|
|
871 |
|
|
|
1,973 |
|
|
|
1,516 |
|
Interest expense |
|
|
(16,415 |
) |
|
|
(16,255 |
) |
|
|
(32,693 |
) |
|
|
(32,191 |
) |
Income (loss) before provision for (benefit from) income taxes |
|
|
(41,622 |
) |
|
|
(33,888 |
) |
|
|
(70,841 |
) |
|
|
(81,814 |
) |
Provision for (benefit from) income taxes |
|
|
(2,056 |
) |
|
|
(1,889 |
) |
|
|
(3,639 |
) |
|
|
(6,273 |
) |
Income (loss) from continuing operations |
|
|
(39,566 |
) |
|
|
(31,999 |
) |
|
|
(67,202 |
) |
|
|
(75,541 |
) |
Gain (loss) on sale of business |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(682 |
) |
Net income (loss) |
|
$ |
(39,566 |
) |
|
$ |
(31,999 |
) |
|
$ |
(67,202 |
) |
|
$ |
(76,223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary – Basic and diluted - continuing operations |
|
$ |
(4.84 |
) |
|
$ |
(4.00 |
) |
|
$ |
(8.26 |
) |
|
$ |
(9.39 |
) |
Ordinary – Basic and diluted - discontinued operations |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.09 |
) |
Ordinary – Basic and diluted |
|
$ |
(4.84 |
) |
|
$ |
(4.00 |
) |
|
$ |
(8.26 |
) |
|
$ |
(9.48 |
) |
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary – Basic and diluted |
|
|
8,180 |
|
|
|
8,005 |
|
|
|
8,135 |
|
|
|
8,042 |
|
SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||
|
|
Six Months Ended |
|
|||||
|
|
July 31, 2024 |
|
|
July 31, 2023 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(67,202 |
) |
|
$ |
(76,223 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
|
63,371 |
|
|
|
77,466 |
|
Share-based compensation |
|
|
6,339 |
|
|
|
14,955 |
|
Depreciation |
|
|
1,404 |
|
|
|
2,761 |
|
Non-cash interest expense |
|
|
1,080 |
|
|
|
1,024 |
|
Non-cash property, equipment, software and lease impairment charges |
|
|
2,293 |
|
|
|
4,808 |
|
Provision for credit loss expense (recovery) |
|
|
56 |
|
|
|
4 |
|
(Gain) loss on sale of business |
|
|
— |
|
|
|
682 |
|
Provision for (benefit from) income taxes – non-cash |
|
|
(6,271 |
) |
|
|
(6,913 |
) |
Fair value adjustment of warrants |
|
|
— |
|
|
|
(3,645 |
) |
Fair value adjustment of interest rate swaps |
|
|
(1,240 |
) |
|
|
(7,205 |
) |
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
75,004 |
|
|
|
73,172 |
|
Prepaid expenses and other current assets, including long-term |
|
|
(3,016 |
) |
|
|
(520 |
) |
Right-of-use assets |
|
|
1,351 |
|
|
|
145 |
|
Accounts payable |
|
|
(603 |
) |
|
|
(4,241 |
) |
Accrued expenses and other liabilities, including long-term |
|
|
(9,568 |
) |
|
|
(17,379 |
) |
Lease liabilities |
|
|
(2,539 |
) |
|
|
(1,081 |
) |
Deferred revenues |
|
|
(56,962 |
) |
|
|
(55,825 |
) |
Net cash provided by (used in) operating activities |
|
|
3,497 |
|
|
|
1,985 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(399 |
) |
|
|
(3,406 |
) |
Internally developed software - capitalized costs |
|
|
(8,796 |
) |
|
|
(5,951 |
) |
Sale of SumTotal, net of cash transferred |
|
|
— |
|
|
|
(5,137 |
) |
Net cash provided by (used in) investing activities |
|
|
(9,195 |
) |
|
|
(14,494 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Shares repurchased for tax withholding upon vesting of restricted stock-based awards |
|
|
(479 |
) |
|
|
(881 |
) |
Payments to acquire treasury stock |
|
|
— |
|
|
|
(8,046 |
) |
Proceeds from accounts receivable facility, net of borrowings |
|
|
(4,574 |
) |
|
|
399 |
|
Principal payments on Term loans |
|
|
(3,202 |
) |
|
|
(3,202 |
) |
Net cash provided by (used in) financing activities |
|
|
(8,255 |
) |
|
|
(11,730 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(2,427 |
) |
|
|
(472 |
) |
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
(16,380 |
) |
|
|
(24,711 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
146,523 |
|
|
|
177,556 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
130,143 |
|
|
$ |
152,845 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
122,652 |
|
|
$ |
147,927 |
|
Restricted cash |
|
|
7,491 |
|
|
|
4,918 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
130,143 |
|
|
$ |
152,845 |
|
SKILLSOFT CORP. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in thousands, unaudited) |
||||||||||||||||
|
|
Three Months Ended July 31, |
|
|
Six Months Ended July 31, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Talent Development Solutions |
|
$ |
101,652 |
|
|
$ |
103,188 |
|
|
$ |
199,727 |
|
|
$ |
201,761 |
|
Global Knowledge |
|
|
30,571 |
|
|
|
37,999 |
|
|
|
60,289 |
|
|
|
74,980 |
|
Total revenues, as reported |
|
$ |
132,223 |
|
|
$ |
141,187 |
|
|
$ |
260,016 |
|
|
$ |
276,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
(39,566 |
) |
|
$ |
(31,999 |
) |
|
$ |
(67,202 |
) |
|
$ |
(76,223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and integration related costs |
|
|
921 |
|
|
|
937 |
|
|
|
2,418 |
|
|
|
2,328 |
|
Restructuring |
|
|
11,299 |
|
|
|
2,501 |
|
|
|
12,266 |
|
|
|
7,719 |
|
Transformation costs |
|
|
527 |
|
|
|
323 |
|
|
|
1,187 |
|
|
|
1,450 |
|
System migration costs |
|
|
1 |
|
|
|
403 |
|
|
|
118 |
|
|
|
1,070 |
|
Stock-based compensation expense |
|
|
(809 |
) |
|
|
5,831 |
|
|
|
6,339 |
|
|
|
14,955 |
|
Executive exit costs |
|
|
3,326 |
|
|
|
— |
|
|
|
3,326 |
|
|
|
— |
|
Fair value adjustment of warrants |
|
|
— |
|
|
|
(793 |
) |
|
|
— |
|
|
|
(3,645 |
) |
Fair value adjustment of interest rate swaps |
|
|
6,506 |
|
|
|
(6,935 |
) |
|
|
(1,240 |
) |
|
|
(7,205 |
) |
Foreign currency impact |
|
|
399 |
|
|
|
1,225 |
|
|
|
(1,821 |
) |
|
|
1,694 |
|
Gain (loss) on sale of business |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
682 |
|
Tax impact of adjustments |
|
|
(2,251 |
) |
|
|
(934 |
) |
|
|
(2,292 |
) |
|
|
(2,319 |
) |
Adjusted net income (loss) from continuing operations |
|
|
(19,647 |
) |
|
|
(29,441 |
) |
|
|
(46,901 |
) |
|
|
(59,494 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
15,370 |
|
|
|
15,384 |
|
|
|
30,720 |
|
|
|
30,675 |
|
Expense (benefit from) income taxes, excluding tax impacts above |
|
|
195 |
|
|
|
(955 |
) |
|
|
(1,347 |
) |
|
|
(3,954 |
) |
Depreciation |
|
|
643 |
|
|
|
1,219 |
|
|
|
1,404 |
|
|
|
2,363 |
|
Amortization of intangible assets |
|
|
31,788 |
|
|
|
39,221 |
|
|
|
63,371 |
|
|
|
77,466 |
|
Adjusted EBITDA from continuing operations |
|
$ |
28,349 |
|
|
$ |
25,428 |
|
|
$ |
47,247 |
|
|
$ |
47,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary – Basic and diluted |
|
|
8,180 |
|
|
|
8,005 |
|
|
|
8,135 |
|
|
|
8,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary basic and diluted per share information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss), as reported |
|
$ |
(4.84 |
) |
|
$ |
(4.00 |
) |
|
$ |
(8.26 |
) |
|
|
(9.48 |
) |
Adjusted net income (loss) from continuing operations |
|
$ |
(2.40 |
) |
|
$ |
(3.68 |
) |
|
$ |
(5.77 |
) |
|
$ |
(7.40 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income (loss) margin % |
|
|
(14.9 |
)% |
|
|
(20.9 |
)% |
|
|
(18.0 |
)% |
|
|
(21.5 |
)% |
Interest expense, net |
|
|
11.6 |
% |
|
|
10.9 |
% |
|
|
11.8 |
% |
|
|
11.1 |
% |
Expense (benefit from) income taxes, excluding tax impacts above |
|
|
0.1 |
% |
|
|
(0.7 |
)% |
|
|
(0.5 |
)% |
|
|
(1.4 |
)% |
Depreciation |
|
|
0.5 |
% |
|
|
0.9 |
% |
|
|
0.5 |
% |
|
|
0.9 |
% |
Amortization of intangible assets |
|
|
24.1 |
% |
|
|
27.8 |
% |
|
|
24.4 |
% |
|
|
28.0 |
% |
Adjusted EBITDA margin % |
|
|
21.4 |
% |
|
|
18.0 |
% |
|
|
18.2 |
% |
|
|
17.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin |
|
|
75.6 |
% |
|
|
71.6 |
% |
|
|
74.5 |
% |
|
|
72.0 |
% |
Adjusted contribution margin |
|
|
19.0 |
% |
|
|
18.0 |
% |
|
|
16.9 |
% |
|
|
17.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SKILLSOFT CORP.
|
||||||||||||||||
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
GAAP costs of revenues |
|
$ |
32,471 |
|
|
$ |
40,467 |
|
|
$ |
66,942 |
|
|
$ |
78,291 |
|
Depreciation |
|
|
(107 |
) |
|
|
(182 |
) |
|
|
(224 |
) |
|
|
(333 |
) |
Stock-based compensation |
|
|
(132 |
) |
|
|
(238 |
) |
|
|
(298 |
) |
|
|
(335 |
) |
Adjusted costs of revenues |
|
|
32,232 |
|
|
|
40,047 |
|
|
|
66,420 |
|
|
|
77,623 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP content and software development |
|
|
14,993 |
|
|
|
17,863 |
|
|
|
30,499 |
|
|
|
34,898 |
|
Depreciation |
|
|
(70 |
) |
|
|
(141 |
) |
|
|
(144 |
) |
|
|
(191 |
) |
Stock-based compensation |
|
|
(914 |
) |
|
|
(1,763 |
) |
|
|
(2,204 |
) |
|
|
(3,775 |
) |
System migration |
|
|
(1 |
) |
|
|
(403 |
) |
|
|
(118 |
) |
|
|
(1,070 |
) |
Adjusted content and software development |
|
|
14,008 |
|
|
|
15,556 |
|
|
|
28,033 |
|
|
|
29,862 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP selling and marketing |
|
|
40,684 |
|
|
|
40,411 |
|
|
|
82,976 |
|
|
|
86,338 |
|
Depreciation |
|
|
(162 |
) |
|
|
(412 |
) |
|
|
(370 |
) |
|
|
(679 |
) |
Stock-based compensation |
|
|
(797 |
) |
|
|
667 |
|
|
|
(2,053 |
) |
|
|
(1,014 |
) |
Transformation |
|
|
(36 |
) |
|
|
(106 |
) |
|
|
(213 |
) |
|
|
(242 |
) |
Adjusted selling and marketing |
|
|
39,689 |
|
|
|
40,560 |
|
|
|
80,340 |
|
|
|
84,403 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP general and administrative |
|
|
19,395 |
|
|
|
25,085 |
|
|
|
44,704 |
|
|
|
50,381 |
|
Depreciation |
|
|
(304 |
) |
|
|
(484 |
) |
|
|
(666 |
) |
|
|
(1,160 |
) |
Stock-based compensation |
|
|
2,652 |
|
|
|
(4,497 |
) |
|
|
(1,784 |
) |
|
|
(9,831 |
) |
Transformation |
|
|
(533 |
) |
|
|
(508 |
) |
|
|
(1,013 |
) |
|
|
(1,593 |
) |
Executive exit costs |
|
|
(3,326 |
) |
|
|
— |
|
|
|
(3,326 |
) |
|
|
— |
|
Adjusted general and administrative |
|
|
17,884 |
|
|
|
19,596 |
|
|
|
37,915 |
|
|
|
37,797 |
|
|
|
|
|
|
|
|
|
|
||||||||
Total GAAP operating expenses |
|
|
107,543 |
|
|
|
123,826 |
|
|
|
225,121 |
|
|
|
249,908 |
|
Depreciation |
|
|
(643 |
) |
|
|
(1,219 |
) |
|
|
(1,404 |
) |
|
|
(2,363 |
) |
Stock-based compensation |
|
|
809 |
|
|
|
(5,831 |
) |
|
|
(6,339 |
) |
|
|
(14,955 |
) |
System migration |
|
|
(1 |
) |
|
|
(403 |
) |
|
|
(118 |
) |
|
|
(1,070 |
) |
Transformation (1) |
|
|
(569 |
) |
|
|
(614 |
) |
|
|
(1,226 |
) |
|
|
(1,835 |
) |
Executive exit costs |
|
|
(3,326 |
) |
|
|
— |
|
|
|
(3,326 |
) |
|
|
— |
|
Adjusted total operating expenses |
|
$ |
103,813 |
|
|
$ |
115,759 |
|
|
$ |
212,708 |
|
|
$ |
229,685 |
|
(1) |
This line item does not agree to the amounts reflected on preceding table due to certain transformation expenses not being reflected in GAAP operating expenses. |
SKILLSOFT CORP.
FREE CASH FLOW RECONCILIATION (in thousands) |
||||||||||||||||
|
|
Three Months Ended July 31, |
|
|
Six Months Ended July 31, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Free cash flow reconciliation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
$ |
(11,440 |
) |
|
$ |
(19,479 |
) |
|
$ |
3,497 |
|
|
$ |
1,985 |
|
Purchase of property and equipment |
|
|
(246 |
) |
|
|
(1,770 |
) |
|
|
(399 |
) |
|
|
(3,406 |
) |
Internally developed software - capitalized costs |
|
|
(4,432 |
) |
|
|
(3,268 |
) |
|
|
(8,796 |
) |
|
|
(5,951 |
) |
Total free cash flow |
|
|
(16,118 |
) |
|
|
(24,517 |
) |
|
|
(5,698 |
) |
|
|
(7,372 |
) |
Cash impact for adjusted EBITDA excluded charges |
|
|
4,015 |
|
|
|
3,097 |
|
|
|
7,098 |
|
|
|
7,792 |
|
Adjusted free cash flow (levered) |
|
$ |
(12,103 |
) |
|
$ |
(21,420 |
) |
|
$ |
1,400 |
|
|
$ |
420 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240909331154/en/
Investors and Media
Stephen Poe
Investor Relations
Investor.relations@skillsoft.com
Source: Skillsoft Corp.
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