Skillsoft Corp. (NYSE: SKIL) Q1 2026 Earnings Call | 06/10/2025

Key Highlights:

• New Leadership: Skillsoft announced John Frederick as the new CFO and Rayanne Reese as Chief Marketing Officer. John Frederick previously served as Skillsoft's Chief Administrative Officer and brings extensive finance leadership experience, while Rayanne Reese's background in technology marketing is expected to accelerate go-to-market strategies.
• Q1 Fiscal 2026 Financial Performance (Non-GAAP):
  • Total Revenue: $124.2 million, down 2.8% year-over-year.
  • Talent Development Solutions (TDS) Revenue: $99.1 million, up 1% year-over-year, marking its third consecutive quarter of growth. This segment is benefiting from the shift towards comprehensive talent development solutions.
  • Global Knowledge (GK) Revenue: $25.1 million, down 15.7% year-over-year, primarily due to softer demand in the U.S. public sector's discretionary live learning spending and a higher mix of lower-revenue reseller business. However, GK's transformation journey is on track, with a strong pipeline of large global public sector deals.
  • Adjusted EBITDA: $22.1 million (17.8% of revenue), up from $18.9 million in the prior year, reflecting the benefits of cost reduction initiatives.
  • Free Cash Flow: $26.2 million, a significant improvement from $10.4 million in the prior year, though the company notes Q1 is seasonally their strongest cash flow quarter, with an expected cash usage in Q2.
• Strategic Progress and Transformation:
  • Investment in Growth: Skillsoft is actively reinvesting capital, primarily in the first half of the fiscal year, to drive top-line growth and positive free cash flow for the full year, with most growth anticipated in the back half.
  • Go-to-Market Strategy: Increased focus on international growth within Global Knowledge, with successful large-scale non-U.S. public sector deals focusing on upskilling in AI, cloud computing, cybersecurity, and data analytics.
  • Product Innovation: Continued expansion of product offerings, including:
    • Skillsoft's Percipio AI capabilities: Casey, their AI-powered coach, is now available in over 40 languages, and the AI assistant is localized across all platform-supported languages.
    • Percipio Certification Dashboard release: Provides clients with visibility into learner certification progress.
    • Skillsoft coaching platform: Enables organizations to scale internal and external coaching programs with selection, scheduling, and success measurement tools.
    • Codecademy partnerships: Launched with Uconnect's class module product and is evolving with an end-to-end certification hub and granular skill tracking.
• Macroeconomic Environment: The company acknowledges ongoing macro uncertainty, leading to lower discretionary spending and elongated decision-making, particularly impacting live learning revenue. However, they are strategically focusing resources on key growth areas.

Outlook for Fiscal Year 2026 (Reiterated):

• Revenue: Expected to be in the range of $530 million to $545 million.
• Adjusted EBITDA: Expected to be between $112 million and $118 million.
• Free Cash Flow: Expected to be in the range of $13 million to $18 million for the full year, despite anticipated cash usage in Q2.