Company Overview - Skillsoft serves over 95 million learners globally, including 60% of the Fortune 100, through its personalized learning experiences and enterprise solutions [21]. - The Talent Development Solutions (TDS) segment serves more than 3,000 customers and 38 million employees worldwide, while the Learner Platform caters to over 58 million learners [24]. - Skillsoft's platform offers more than 300,000 learning assets and over 225,000 hours of learning experiences, focusing on critical technology, leadership, business, and compliance skills [29]. - Skillsoft has 2,261 employees as of January 31, 2025, reflecting a diverse workforce that supports innovation and institutional knowledge [67]. - The company has 40 million registered learners on its Learner platform, which offers courses in 14 programming languages [193]. Market Opportunities - The company identified a potential market opportunity of $400 billion, driven by a shift towards holistic talent development lifecycle approaches [52]. - 1.1 billion jobs are expected to be transformed by technology in the next decade, indicating significant market potential for Skillsoft [53]. - 60% of organizations identify skills gaps as the primary factor limiting business transformation, highlighting the demand for Skillsoft's solutions [53]. - 85% of employers plan to prioritize upskilling their workforce, with AI and big data being among the top five fastest-growing skills [53]. - The corporate digital learning market is large and fragmented, with significant whitespace opportunities due to increasing demand for high-quality digital content solutions [54]. Product Development and Features - In fiscal 2025, Skillsoft introduced new features such as Interactive Skill Benchmarks and AI Learning Assistants to enhance skill development and customer engagement [30]. - Skillsoft's AI-powered Role Advisor tool has shown that learners who select a job role are 14% more likely to make learning a recurring habit [36]. - The Compliance Suite addresses the need for flexible, risk-based training, with features tailored to individual roles and responsibilities [35]. - The integration of generative AI into the TDS Learner platform enhances interactivity and immersion, helping learners build critical technology skills [45]. - The company is focused on developing new learning content and enhancing platform features, but there is no assurance of commercial success for these new products [84]. Financial Performance - Total revenues for the twelve months ended January 31, 2025, were $530,994,000, a decrease of 4.0% compared to $553,237,000 for the previous year [205]. - TDS segment revenues were $405,530,000, reflecting a slight increase of 0.2% from $404,850,000 in the prior year, while GK segment revenues decreased by 15.4% to $125,464,000 from $148,387,000 [199]. - The company incurred net losses of $121.9 million in fiscal 2025 and $349.3 million in fiscal 2024, with an accumulated deficit of $1.4 billion as of January 31, 2025 [77]. - The company reported a net loss of (23.0)% for the twelve months ended January 31, 2025, an improvement from (63.1)% in the previous year, indicating a positive trend in financial performance [196]. Cost Management and Efficiency - The company announced a comprehensive resource reallocation plan expected to yield approximately $45 million in annualized cost savings, with plans to reinvest half of the savings into strategic growth initiatives [207]. - Total operating expenses decreased significantly to 113.1% of total revenues for the twelve months ended January 31, 2025, down from 155.7% in the previous year [196]. - Total operating expenses decreased by $261,236, or 30.3%, from $861,851 in fiscal 2024 to $600,615 in fiscal 2025 [210]. - Cost savings from the consolidation of facilities contributed to the overall decline in G&A expenses [219]. Risks and Challenges - Economic conditions, including high inflation rates in key markets like the United States, could negatively impact demand for the company's products and services [82]. - The company's revenue growth is influenced by customer employment patterns, which may decline during economic downturns, affecting demand for its offerings [83]. - Cybersecurity threats pose significant risks, as breaches could harm the company's reputation and lead to substantial liabilities [97]. - The company anticipates ongoing service interruptions and outages, which could affect customer satisfaction and retention [96]. - The company may face penalties of up to 35 million euros or 7% of total worldwide annual turnover for non-compliance with the EU's Artificial Intelligence Act, which is expected to take full effect in 2026 [125]. Strategic Partnerships - Skillsoft's partnerships with leading HCM software companies like Workday and SAP SuccessFactors aim to deliver impactful talent development programs [30]. - The company relies on its status as an authorized training provider for key technology vendors, which significantly impacts its revenue [106]. - Skillsoft's strategic partnerships provide comprehensive global coverage, broadening market reach and driving revenue growth [62]. Shareholder Information - The company has authorized a share repurchase program of up to $10 million, which will terminate on July 11, 2028 [190]. - The company has never declared or paid cash dividends on its common stock and does not anticipate doing so in the foreseeable future [191]. - The NYSE has provided notice of potential delisting of the company's warrants due to "abnormally low" price levels, which could impact stockholder value [167]. Acquisitions and Divestitures - The company completed the acquisition of Codecademy for approximately $386.0 million, which included the issuance of 1,518,721 shares of common stock and a net cash payment of $203.4 million [193]. - The company sold its SumTotal business for net proceeds of $174.9 million after final working capital adjustments [194]. Regulatory and Compliance - The company is subject to the U.S. Foreign Corrupt Practices Act and the UK Bribery Act, which could result in severe penalties and reputational damage if violated [138]. - The company may incur significant costs to comply with evolving privacy and data security laws, which could limit product adoption and increase operational complexity [132]. - The number of U.S. states with privacy laws has rapidly increased, potentially exposing the company to significant fines and reputational harm [131].

Revenue Performance - Total revenue for fiscal 2025 was $531 million, a decrease of 4% compared to $553 million in the prior year[8]. - Talent Development Solutions revenue was $406 million, flat compared to the prior year, while Global Knowledge revenue decreased by 15% to $125 million from $148 million[8]. - Total revenues for the three months ended January 31, 2025, were $133.8 million, a decrease of 2% from $137.5 million in the same period of 2024[26]. - For the twelve months ended January 31, 2025, the total revenues reported were $530,994, a decrease of 4% from $553,237 in 2024[30]. Profitability and Loss - GAAP net loss for fiscal 2025 was $122 million, significantly improved from a net loss of $349 million in the prior year, resulting in a GAAP net loss per share of $14.87 compared to $43.38[8]. - Operating loss for the twelve months ended January 31, 2025, was $69.6 million, compared to a loss of $308.6 million for the twelve months ended January 31, 2024[26]. - Net loss for the three months ended January 31, 2025, was $31.1 million, compared to a net loss of $245.3 million for the same period in 2024[26]. - The net loss for the twelve months ended January 31, 2025, was $121,908, significantly improved from a net loss of $349,285 in 2024[30]. Cash Flow and Liquidity - Free cash flow for fiscal 2025 was positive at $12 million, compared to negative free cash flow of $15 million in the prior year[8]. - Cash flows from operating activities for the twelve months ended January 31, 2025, provided $29,965, a significant increase from $2,818 in 2024[28]. - Free cash flow for the three months ended January 31, 2025, was $13,221, compared to $5,404 in the same period of 2024, reflecting an increase of approximately 144.5%[35]. - Adjusted free cash flow (levered) for the twelve months ended January 31, 2025, was $33,135, a significant increase from $2,668 in 2024[35]. Expenses and Cost Management - Adjusted EBITDA for fiscal 2025 was $109 million, reflecting a margin of 21% of revenue, up from $105 million and a margin of 19% in the prior year[8]. - Operating expenses for the three months ended January 31, 2025, totaled $151.0 million, significantly lower than $365.6 million for the same period in 2024[26]. - The total costs of revenues and content and software development expenses for the Talent Development Solutions segment were $29,662 for the three months ended January 31, 2025, down from $33,729 in 2024, a decrease of about 12.3%[33]. - The total GAAP costs of revenues for the twelve months ended January 31, 2025, were $134,879, a decrease from $153,157 in 2024, reflecting a reduction of approximately 11.9%[32]. Assets and Equity - Total current assets decreased to $332.9 million as of January 31, 2025, from $385.3 million as of January 31, 2024, representing a decline of approximately 13.6%[24]. - Total assets decreased to $1.1 billion as of January 31, 2025, down from $1.3 billion as of January 31, 2024, reflecting a reduction of about 13.1%[24]. - Shareholders' equity decreased to $93.8 million as of January 31, 2025, compared to $205.6 million as of January 31, 2024, indicating a decline of approximately 54.5%[24]. - Cash and cash equivalents were $100.8 million as of January 31, 2025, down from $136.3 million as of January 31, 2024, a decrease of about 26%[24]. Future Projections - The company expects fiscal 2026 GAAP revenue to be between $530 million and $545 million, with adjusted EBITDA projected between $112 million and $118 million[9]. - The company reported nearly 1 million launches of its AI simulator, Skillsoft CAISY™, indicating strong early interest from customers[8].

Group 1 - The individual investor focuses on undercovered companies, particularly in technology, software, electronics, and energy transition sectors [1] - The investor has over 50 companies on their watchlist and has been investing personal capital for over 7 years globally [1] - The investor holds a Master's degree in Electrical Engineering and works as an automotive battery R&D engineer in Sweden [1] Group 2 - The investor aims to identify asymmetric investment opportunities to achieve market-beating returns through diligent research of small to mid-cap companies [1]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was $137 million, down approximately $2 million or 1% year-over-year [27] - Adjusted EBITDA was $32 million or 23% of revenue, up $2 million compared to the previous year [29] - GAAP net loss was $24 million, an improvement from a net loss of $28 million in the prior year [30] - Positive free cash flow of $4 million was achieved in Q3, marking a significant improvement [32] Business Line Data and Key Metrics Changes - Talent Development Solutions (TDS) revenue was $103 million, up 2% year-over-year, driven by a shift towards talent development [22] - Global Knowledge (GK) revenue was $34 million, down 10% year-over-year, but showed sequential improvement with a decline reduced from 20% to 10% [25][18] Market Data and Key Metrics Changes - The LTM dollar retention rate for TDS remained flat at 98%, down from approximately 101% in Q3 of the previous year [23] - The decline in retention was attributed to softness in coaching and compliance product offerings [24] Company Strategy and Development Direction - The company is focused on a transformation strategy that includes fixing operational basics and investing for growth [7] - Near-term commitments include achieving $45 million in annualized expense reductions and returning to top-line growth in fiscal year 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress made during the quarter and the positive early results from the new business unit structure [10] - The company is optimistic about generating positive free cash flow for the full fiscal year 2026 [9] Other Important Information - The company has implemented a new integrated compliance platform, resulting in a 48% increase in net promoter score [16] - The company has successfully renegotiated terms of its $75 million accounts receivable facility, extending its maturity to FY 2029 [35] Q&A Session Summary Question: On GK stabilization and proof points - Management noted that there were multiple small successes in the GK business, including recognition as Partner of the Year from several organizations [45] Question: Additional headwinds for coaching and compliance - Management acknowledged the challenges in coaching and compliance but emphasized the transition to a subscription model to improve customer utilization [49][50]

Financial Performance - Total revenues for the three months ended October 31, 2024, were $137.225 million, a decrease of 1.2% compared to $138.956 million for the same period in 2023[146]. - SaaS subscription revenues for Talent Development Solutions increased by 1.1% to $97.123 million for the three months ended October 31, 2024, compared to $96.085 million in 2023[146]. - Non-subscription revenues decreased by 6.5% to $40.102 million for the three months ended October 31, 2024, compared to $42.871 million in 2023[146]. - The Global Knowledge segment's revenues decreased by 9.5% to $34.227 million for the three months ended October 31, 2024, compared to $37.824 million in 2023[146]. - The Talent Development Solutions segment's revenues for the nine months ended October 31, 2024, decreased by 0.7% to $285.927 million compared to $287.936 million in 2023[146]. Operating Expenses - Operating expenses as a percentage of total revenues decreased from 114.4% in the three months ended October 31, 2023, to 106.8% in the same period of 2024[139]. - Total operating expenses decreased by $12,425, or 7.8%, for the three months ended October 31, 2024, compared to the same period in 2023[150]. - Content and software development expenses decreased by $1,189, or 7.4%, for the three months ended October 31, 2024, compared to the same period in 2023[152]. - Selling and marketing expenses decreased by $4,368, or 9.9%, for the three months ended October 31, 2024, compared to the same period in 2023[154]. - Total cost of revenues decreased by $2,095, or 5.8%, for the three months ended October 31, 2024, compared to the same period in 2023[151]. - Compensation and benefits in content and software development decreased by $2,876, or 7.6%, for the nine months ended October 31, 2024, compared to the same period in 2023[152]. - Advertising and promotions in selling and marketing decreased by $2,274, or 30.0%, for the three months ended October 31, 2024, compared to the same period in 2023[154]. - Facilities and utilities expenses in content and software development decreased by $270, or 8.6%, for the nine months ended October 31, 2024, compared to the same period in 2023[151]. - The comprehensive resource reallocation plan contributed to the decreases in various expense categories[152]. Resource Allocation and Investments - The company announced a resource reallocation plan expected to result in more than $45 million of annualized cost savings, with plans to reinvest up to half in strategic growth initiatives[148]. - The company is investing in technology, which has led to increased software maintenance costs despite overall expense reductions[152]. - Cash flows from investing activities included $13.0 million for internally developed software in the nine months ended October 31, 2024, compared to $8.1 million in the same period of 2023[180]. - The company invested significantly in internally developed software, with cash payments increasing from $8.1 million in 2023 to $13.0 million in 2024[180]. Cash and Financing - As of October 31, 2024, the company had $97.9 million in cash and cash equivalents[168]. - The company has access to up to $75.0 million of borrowings under its accounts receivable facility, with $10.0 million drawn as of October 31, 2024[175]. - Net cash provided by operating activities for the nine months ended October 31, 2024 was $12.2 million, compared to a cash used of $8.7 million in the same period of 2023[178]. - Cash flows used in financing activities increased primarily due to payments on the accounts receivable facility, totaling $40.8 million for the nine months ended October 31, 2024[183]. Shareholder Actions - The Board of Directors authorized a share repurchase of up to $10 million for Class A common stock, effective from July 11, 2024[176]. - The company has not yet repurchased any shares under the authorized share repurchase program as of October 31, 2024[176]. Tax and Income - The effective income tax rate for the nine months ended October 31, 2024, was impacted by non-deductible items and changes in the valuation allowance on deferred tax assets[167]. - Interest income for the nine months ended October 31, 2024, was $2.897 million, an increase of 12.5% compared to $2.576 million for the same period in 2023[161]. - Other income (expense), net for the three months ended October 31, 2024, was $(538) thousand, a decrease of 2931.6% compared to $31 thousand for the same period in 2023[161]. Restructuring and Charges - Restructuring charges for the three months ended October 31, 2024, totaled $3.1 million, compared to $0.9 million for the same period in 2023[160]. Market and Currency Impact - A hypothetical 100 basis point increase in interest rates would result in approximately $3.0 million additional pre-tax interest expense annually[206]. - A 10% increase in foreign currency exchange rates would have impacted pre-tax income by approximately $3.0 million on an annualized basis[209]. - A hypothetical 100 basis point increase or decrease in interest rates would result in an approximately $0.5 million increase or decrease in interest income on an annualized basis[207]. - A hypothetical 100 basis point increase or decrease in interest rates would result in an approximately $7.0 million increase or decrease in the fair value adjustment of interest rate swaps at a point in time[208]. - A hypothetical 10% increase or decrease in current exchange rates would have resulted in an impact of approximately $3.0 million on pre-tax income (loss) on an annualized basis[209]. Business Overview - The company serves approximately 60% of the Fortune 1000, focusing on leadership, business skills, technology skills, and compliance[134]. - The community of learners has grown to over 90 million in more than 150 countries, learning in over 30 languages[136]. - The company recognized revenue from cloud-based solutions on a straight-line basis over the contract term, typically ranging from one to three years[191]. - The company recorded a gain of $55.9 million from the sale of its SumTotal business, completed on August 15, 2022[166].

Revenue Performance - Total Revenue for Q3 FY2025 was $137 million, a decrease of 1.4% from $139 million in the prior year[3] - Talent Development Solutions Revenue increased by 2% to $103 million compared to the prior year[3] - Total revenues for the three months ended October 31, 2024, were $137,225,000, a decrease of 1.25% from $138,956,000 for the same period in 2023[27] - Total revenues for the nine months ended October 31, 2024, were $397,241 thousand, a decrease of 4.5% compared to $415,697 thousand for the same period in 2023[30] - Talent Development Solutions revenue for the three months ended October 31, 2024, was $102,998 thousand, slightly up from $101,132 thousand for the same period in 2023[30] - Global Knowledge revenue for the three months ended October 31, 2024, decreased to $34,227 thousand from $37,824 thousand in the same period last year, representing a decline of 6.8%[30] Profitability and Loss - Adjusted EBITDA from continuing operations was $32 million, reflecting a margin of 23% of Revenue, up from 21% in the prior year[3] - Net Loss for the quarter was $24 million, an improvement from a net loss of $28 million in the prior year[3] - Net loss for the three months ended October 31, 2024, was $23,599,000, compared to a net loss of $27,736,000 for the same period in 2023, representing a 15.4% improvement[27] - Net income (loss) for the nine months ended October 31, 2024, was $(90,801) thousand, an improvement from $(103,959) thousand for the same period in 2023[30] - Adjusted net income (loss) from continuing operations for the nine months ended October 31, 2024, was $(61,922) thousand, compared to $(82,191) thousand for the same period in 2023[30] - The adjusted net income (loss) margin for the three months ended October 31, 2024, was (10.9)%, an improvement from (16.4)% in the same period last year[30] Cash Flow and Expenses - Skillsoft generated positive free cash flow during the quarter, contributing to improved profitability[5] - Cash provided by operating activities for the nine months ended October 31, 2024, was $12,214 thousand, a significant improvement from $(8,681) thousand for the same period in 2023[28] - Skillsoft generated a free cash flow of $4,084 for the three months ended October 31, 2024, compared to a negative free cash flow of $(13,117) in the same period of 2023[34] - The net cash provided by operating activities for the three months ended October 31, 2024, was $8,717, a significant improvement from $(10,666) in the same period of 2023[34] - Adjusted free cash flow (levered) for the three months ended October 31, 2024, was $14,173, compared to a negative $10,811 in the same period of 2023[34] - The total GAAP operating expenses for the three months ended October 31, 2024, were $110,550, down from $118,824, indicating a reduction of 7.15%[31] Debt and Assets - Gross debt decreased to $591 million, down $35 million from the prior year[3] - Total current assets decreased to $260,134,000 as of October 31, 2024, from $385,331,000 as of January 31, 2024, a decline of 32.5%[26] - Total assets decreased to $1,053,531,000 as of October 31, 2024, from $1,273,634,000 as of January 31, 2024, a reduction of 17.3%[26] - Total current liabilities decreased to $294,001,000 as of October 31, 2024, from $413,228,000 as of January 31, 2024, a decline of 28.8%[26] - Long-term debt remained relatively stable at $574,312,000 as of October 31, 2024, compared to $577,487,000 as of January 31, 2024[26] - The company reported a decrease in cash and cash equivalents to $97,921,000 as of October 31, 2024, down from $136,308,000 as of January 31, 2024, a decline of 28.1%[26] Strategic Initiatives - The company raised its full-year fiscal 2025 revenue guidance to a range of $520 million to $530 million[5] - The company launched several AI-driven tools, including AI Coaching Assistant and AI Learning Assistant, enhancing its learning platform[4] - Skillsoft's Compliance Suite was introduced to help companies develop competencies for risk mitigation[4] - Key customer wins in AI upskilling generated over $8 million from six global companies[4] Restructuring and Costs - The company incurred $3,095,000 in restructuring costs for the three months ended October 31, 2024, compared to $873,000 in the same period of 2023[27] - The company incurred acquisition and integration-related costs of $3,349 thousand for the nine months ended October 31, 2024, compared to $2,838 thousand for the same period in 2023[30]

Core Viewpoint - Skillsoft Corp. (SKIL) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][3]. - Institutional investors often adjust their valuations based on earnings estimates, leading to significant stock price movements when estimates are revised [3]. Skillsoft's Earnings Outlook - For the fiscal year ending January 2025, Skillsoft is projected to earn -$9.80 per share, reflecting a 26.4% change from the previous year's reported figure [7]. - Over the past three months, the Zacks Consensus Estimate for Skillsoft has increased by 19%, indicating a positive trend in earnings expectations [7]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, highlighting Skillsoft's strong position in terms of earnings estimate revisions [8][9].

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Skillsoft Corp. (SKIL) Analysis - Skillsoft Corp. (SKIL) has shown a price increase of 18% over the past four weeks, indicating growing investor interest [4] - The stock has gained 4.5% over the past 12 weeks and has a beta of 1.32, suggesting it moves 32% more than the market [5] - SKIL has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - SKIL is trading at a Price-to-Sales ratio of 0.22, meaning investors pay 22 cents for each dollar of sales, indicating a reasonable valuation [7] Group 3: Additional Investment Opportunities - Besides SKIL, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Skillsoft Corp. (NYSE:SKIL) Q2 2025 Earnings Conference Call September 9, 2024 5:00 PM ET Company Participants Stephen Poe - IR Ron Hovsepian - Executive Chair and Principal Executive Officer Richard Walker - CFO Conference Call Participants Ken Wong - Oppenheimer Raj Sharma - B. Riley Securities Operator Thank you for standing by and welcome to Skillsoft’s Second Quarter Fiscal 2025 Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ present, there will be ...

Skillsoft Corp. (SKIL) came out with a quarterly loss of $2.40 per share versus the Zacks Consensus Estimate of a loss of $3.06. This compares to loss of $3.60 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 21.57%. A quarter ago, it was expected that this company would post a loss of $4 per share when it actually produced a loss of $3.42, delivering a surprise of 14.50%. Over the last four quarters, the company has surpassed ...