Core Viewpoint - Skillsoft has announced a strategic partnership with edX to integrate edX's course offerings into the Skillsoft Percipio Platform, enhancing the academic and professional learning available to organizations [1][2][3]. Group 1: Partnership Details - The partnership aims to connect academic learning with enterprise skills priorities, allowing organizations to better align their learning investments with the skills needed in an AI-driven work environment [3][5]. - edX offers a broad catalog of programs from prestigious institutions, including executive education and professional certificates in areas such as AI and cybersecurity, which will now be accessible through the Skillsoft platform [6][7]. Group 2: Workforce Skills and Learning - Organizations face challenges in understanding their current workforce skills and preparing for future needs, with only 10% of HR leaders feeling confident in their workforce's skills to meet business goals in the next 12 to 24 months [4]. - The integration of edX programs into the Skillsoft platform is designed to create a continuous learning environment, helping organizations connect learning activities directly to workforce planning and performance [5][6]. Group 3: Company Background - Skillsoft is a leader in AI-native skills management, supporting over 105 million learners globally and trusted by 60% of the Fortune 1000 [8].

Core Viewpoint - Skillsoft Corp. (SKIL) has experienced significant selling pressure, resulting in a 37.1% decline in stock price over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is utilized to determine if SKIL is oversold, with a current reading of 27.72 indicating potential for a price reversal [2][5] - Stocks oscillate between overbought and oversold conditions, and the RSI helps identify when a stock may be undervalued due to excessive selling [3] Group 2: Fundamental Analysis - Analysts have raised earnings estimates for SKIL by 70.8% over the last 30 days, suggesting a positive outlook for the company's earnings [7] - SKIL holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, indicating strong potential for a turnaround [8]

Core Viewpoint - Skillsoft Corp. (SKIL) is currently viewed as a more attractive investment option compared to AppLovin (APP) for value investors, based on various financial metrics and earnings outlook [1][3][6]. Valuation Metrics - Skillsoft Corp. has a forward P/E ratio of 1.36, significantly lower than AppLovin's forward P/E of 72.43, indicating that SKIL is undervalued relative to APP [5]. - The PEG ratio for Skillsoft is 0.14, while AppLovin's PEG ratio stands at 3.62, suggesting that SKIL has a better growth outlook relative to its valuation [5]. - Skillsoft's P/B ratio is 12.38, compared to AppLovin's P/B of 155.07, further highlighting the valuation disparity between the two companies [6]. Earnings Outlook - Skillsoft holds a Zacks Rank of 1 (Strong Buy), indicating a stronger improvement in its earnings outlook compared to AppLovin, which has a Zacks Rank of 3 (Hold) [3][6]. - The overall valuation figures and solid earnings outlook contribute to Skillsoft earning a Value grade of A, while AppLovin has a Value grade of D [6].

Core Insights - Skillsoft Corp. reported an earnings per share (EPS) of $1.65, exceeding the estimated $1.26, and showing a significant improvement from the previous year's loss of $1.82 per share [1][6] - The company has consistently surpassed consensus EPS estimates over the past four quarters, indicating strong performance [2][6] Financial Performance - The earnings surprise for the latest quarter was +30.95%, and the previous quarter saw a remarkable surprise of +143.81% with earnings of $0.92 against an expected loss of $2.1 per share [2] - Revenue for the quarter was $129 million, slightly below the estimated $131.6 million, representing a 6% decrease from the previous year's revenue of $137.23 million [3] - Revenue from Talent Development Solutions (TDS) was $101 million, reflecting a 2% decline from the prior year [3] - The company has surpassed consensus revenue estimates twice in the last four quarters [3][6] Valuation Metrics - The price-to-sales ratio is 0.13, indicating that the stock may be undervalued compared to sales [4] - The enterprise value to operating cash flow ratio is high at 46.16, suggesting potential overvaluation based on cash flow [4] Leverage and Liquidity - The debt-to-equity ratio is high at 144.58, indicating significant leverage [5] - The current ratio is 0.84, which is below the standard threshold of 1, suggesting potential liquidity concerns [5] - Despite these challenges, the company's consistent earnings surprises highlight its potential for future growth [5]

分组1 - Skillsoft Corp. reported quarterly earnings of $1.65 per share, exceeding the Zacks Consensus Estimate of $1.26 per share, and showing a significant improvement from a loss of $1.82 per share a year ago, resulting in an earnings surprise of +30.95% [1] - The company posted revenues of $129 million for the quarter ended October 2025, which was 1.95% below the Zacks Consensus Estimate and a decrease from $137.23 million in the same quarter last year [2] - Skillsoft has surpassed consensus EPS estimates in all four of the last quarters, while it has topped consensus revenue estimates two times during the same period [2] 分组2 - The stock has underperformed significantly, losing about 68.5% since the beginning of the year, compared to a 16.3% gain in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is $0.99 on revenues of $131.36 million, and for the current fiscal year, it is $3.48 on revenues of $515.94 million [7] - The Technology Services industry, to which Skillsoft belongs, is currently ranked in the top 32% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $129 million, down $8.2 million or 6% year over year [13] - Adjusted EBITDA was $28 million, down about 12% compared to $31.9 million last year, with an adjusted EBITDA margin of 21.7% compared to 23.3% last year [15] - GAAP net loss was $41.3 million, compared to a GAAP net loss of $23.6 million in the prior year period, primarily due to a non-cash Goodwill Impairment loss of $20.8 million related to the GK segment [16] Business Line Data and Key Metrics Changes - Revenue for Talent Development Solutions (TDS) was $100.8 million for the third quarter, down 2.1% year over year, with around 70% of the decline coming from the B2C learner product [12][11] - Global Knowledge (GK) revenue was $28.2 million, down approximately $6 million or 17.6% year over year, impacted by a shift in customer purchasing preferences and spending reductions from the U.S. government shutdown [13][9] - TDS's dollar retention rate (DRR) improved to 99% from 98% year over year, reflecting higher customer upgrades [14] Market Data and Key Metrics Changes - The enterprise portion of TDS, which represents around 91% of TDS, was down slightly due to customer churn from earlier in the year [11] - The public sector business showed signs of recovery with a DRR of 103-104, indicating stabilization after the government shutdown [34] Company Strategy and Development Direction - The company is focused on the talent development market, aiming to reach revenue inflection and return to growth while maintaining strong profitability and cash flow [5] - A strategic review of the GK segment has been initiated, with a shift towards a partnership-driven model rather than continued ownership [9][20] - The company is investing in AI capabilities to enhance its platform and address skills management needs, positioning itself for sustained growth [6][10] Management's Comments on Operating Environment and Future Outlook - Management highlighted the urgency of improving cash flow and the importance of the transformation strategy to align with market demands [23] - The company is optimistic about growth opportunities in FY27, with plans to roll out new branding and sales models [29][55] - Management emphasized the need for organizations to adapt to AI-driven skills management, viewing it as a generational reskilling opportunity [9][10] Other Important Information - Free Cash Flow for the quarter was negative $23.6 million, compared to a positive $4.1 million in the prior year period, with expectations of positive free cash flow of between $0 and $5 million for fiscal 2026 [17][18] - The company has restructured its cost structure, resulting in lower operating expenses year over year [15] Q&A Session Summary Question: What is the timeline for the strategic review of the GK segment? - Management indicated that it is inappropriate to speculate on the exact timing but emphasized the urgency of improving cash flow for the company overall [23] Question: How does the underperformance of GK affect TDS margins? - Management stated that TDS is the flagship for growth and profitability, and they are focused on maintaining profitability while investing in growth [26] Question: How is the public sector business shaping up post-government shutdown? - The public sector business is showing signs of recovery, with a healthy DRR and positive wins in Q3 [34] Question: What is the approach to investment cadence moving forward? - The focus will be on creating a track record in hitting TDS EBITDA while looking for ways to drive productivity before shifting to growth investments [51]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $129 million, down $8.2 million or 6% year-over-year [13] - Adjusted EBITDA was $28 million, down about 12% compared to $31.9 million last year, with an adjusted EBITDA margin of 21.7% compared to 23.3% last year [15] - GAAP net loss was $41.3 million, compared to a GAAP net loss of $23.6 million in the prior year period, primarily due to a non-cash goodwill impairment loss of $20.8 million related to the GK segment [16] - Free cash flow for the quarter was -$23.6 million, compared to a positive $4.1 million in the prior year period [17] Business Line Data and Key Metrics Changes - Revenue for Talent Development Solutions (TDS) was $100.8 million, down 2.1% year-over-year, with around 70% of the decline coming from the B2C learner product [12] - Global Knowledge (GK) revenue was $28.2 million, down approximately $6 million or 17.6% year-over-year, impacted by a shift in customer purchasing preferences and spending reductions from the U.S. government shutdown [13][14] - TDS dollar retention rate (DRR) improved to 99% from 98% year-over-year, while GK accounted for 73% of the revenue decline despite representing only 22% of total revenue [14][9] Market Data and Key Metrics Changes - The public sector business showed signs of recovery post-government shutdown, with DRR related to federal business around 103-104, indicating stabilization [34] - The company is focusing on large enterprise customers who have shown deeper adoption of advanced features, achieving a 115% dollar retention rate in Q3 [7][36] Company Strategy and Development Direction - The company is transforming its strategy to focus on the talent development market, aiming for revenue inflection and growth while maintaining strong profitability and cash flow [5] - A strategic review of the GK segment is underway, with a shift towards a partnership-driven model rather than continued ownership [9][20] - The company is investing in AI capabilities to enhance its platform, aiming to capture opportunities in the evolving skills management market [6][45] Management's Comments on Operating Environment and Future Outlook - Management highlighted the urgency of improving cash flow and the importance of aligning with customer needs for multimodal learning [23][24] - The company is optimistic about future growth, with plans to roll out new branding and a revamped sales model in FY 2027 [29][55] - Management emphasized the importance of AI in redefining content and platform offerings, positioning the company well for future growth [45][46] Other Important Information - The company expects positive free cash flow of between $0 and $5 million for fiscal 2026, with guidance for TDS revenue for the full fiscal year projected between $400 million and $410 million [21][18] - Total gross debt was $578 million at the end of Q3, down slightly from the previous year, while total net debt increased to approximately $500 million [19][20] Q&A Session Summary Question: Timeline for strategic review of GK segment - Management indicated that it is inappropriate to speculate on the exact timing but emphasized the urgency of improving cash flow [23] Question: Margin profile of core TDS and growth potential - Management noted that TDS has strong profitability and will focus on maintaining profitability while investing for growth [25][27] Question: Stability of public sector business post-shutdown - Management reported positive signs of recovery in the public sector business, with healthy performance expected to continue into Q4 [34] Question: Sales cycles and deal momentum in Q4 - Management stated that sales cycles are within normal boundaries and highlighted the positive performance of larger customers [35][36] Question: Approach to investment cadence moving forward - Management plans to continue driving productivity improvements and will shift focus to growth investments as the TDS model proves successful [50]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $129 million, down $8.2 million or 6% year over year [15] - Adjusted EBITDA was $28 million, down about 12% compared to $31.9 million last year, with an adjusted EBITDA margin of 21.7% compared to 23.3% last year [17] - GAAP net loss was $41.3 million, compared to a GAAP net loss of $23.6 million in the prior year period, primarily due to a non-cash Goodwill Impairment loss of $20.8 million related to GK [18] - Free Cash Flow for the quarter was negative $23.6 million, compared to a positive $4.1 million in the prior year period [19] Business Line Data and Key Metrics Changes - Revenue for Talent Development Solutions (TDS) was $100.8 million, down 2.1% year over year, with around 70% of the decline coming from the B2C learner product [14] - Global Knowledge (GK) revenue was $28.2 million, down approximately $6 million or 17.6% year over year, impacted by a shift in customer purchasing preferences and spending reductions from the U.S. government shutdown [15][16] - TDS's dollar retention rate (DRR) improved to 99% from 98% year over year, while GK accounted for 73% of the revenue decline despite representing only 22% of total revenue [16][10] Market Data and Key Metrics Changes - The enterprise portion of TDS, which represents around 91% of TDS, was down slightly due to customer churn from earlier in the year [12] - The public sector business showed signs of recovery with a DRR of around 103-104, indicating stabilization after the government shutdown [36] Company Strategy and Development Direction - The company is focusing on the talent development market, aiming to reach revenue inflection and return to growth while maintaining strong profitability and cash flow [5] - A strategic review of the GK segment has been initiated, with a shift towards a partnership-driven model rather than continued ownership [10] - The company is investing in AI-driven skills management solutions, anticipating a market shift towards AI-powered skills solutions [7][11] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of skills visibility as a top investment priority for organizations, with over 70% of CHROs citing it as critical [5] - The company is optimistic about its positioning for growth in FY27, with a focus on product innovation and a leaner cost structure [8][9] - Management acknowledged the challenges faced in the GK segment but expressed confidence in the overall transformation and future growth potential [11][22] Other Important Information - The company expects full fiscal 2026 year revenue for TDS to be between $400-$410 million and adjusted EBITDA of between $112-$116 million [22] - GAAP cash, cash equivalents, and restricted cash were $77.5 million at quarter end, with total gross debt at $578 million [20][21] Q&A Session Summary Question: What is the timeline for the strategic review of GK? - Management indicated that it is inappropriate to speculate on the exact timing but emphasized the urgency to improve cash flow for the company overall [24] Question: How does GK's underperformance affect TDS margins? - Management noted that TDS is currently the flagship for growth and profitability, and they are focused on maintaining profitability while investing in growth [26][29] Question: How is the public sector business shaping up post-government shutdown? - Management reported that the public sector business is stabilizing, with positive signs in the federal business and a healthy DRR [36] Question: What is the approach to investment cadence moving forward? - Management stated that they will continue to drive productivity improvements and shift economic benefits into growth investments as they prove their model [52][53]

Financial Performance - Talent Development Solutions (TDS) revenue was $100.8 million, a decrease of $2.2 million or 2% year-over-year[23] - Global Knowledge (GK) revenue declined by 18% in Q3 FY2026[27] - Q3 FY2026 Adjusted EBITDA was $28.0 million, representing 22% of revenue, a decrease of approximately 160 basis points year-over-year[23] - Q3 FY2026 Free Cash Flow was negative $23.6 million[31] - Adjusted Operating Expenses were $101.0 million, a decrease of 4.1% year-over-year[32,41] Key Performance Indicators - Last Twelve Months (LTM) Dollar Retention Rate (DRR) was approximately 99%, an increase of 1 percentage point year-over-year[21,23] - TDS federal business DRR was 104% in the quarter[21] Strategic Initiatives - Launched the next-generation Skillsoft Percipio Platform with AI capabilities[21] - AI drives more than half of the design, curation, and production work for learning content[14] - Undertook a strategic review of the Global Knowledge segment, concluding that a partnership-driven model is more appropriate than continued ownership[14] Geographic Mix - Revenue geographic mix: 65% United States, 26% EMEA, 9% rest of world[27]

Financial Performance - Total revenues for the three months ended October 31, 2025, were $128.998 million, a decrease of 6.4% compared to $137.225 million for the same period in 2024[16] - Operating loss for the three months ended October 31, 2025, was $34.329 million, compared to a loss of $9.177 million in the same period of 2024[16] - Net loss for the nine months ended October 31, 2025, was $103.116 million, compared to a loss of $90.801 million for the same period in 2024, reflecting a year-over-year increase of 13.5%[16] - The net loss for the quarter ending October 31, 2025, is $41,279,000[25] - For the nine months ended October 31, 2025, Skillsoft reported a net loss of $103.1 million, compared to a net loss of $90.8 million for the same period in 2024[31] - The consolidated net loss for the three months ended October 31, 2025, was $41.279 million, compared to a net loss of $23.599 million for the same period in 2024[128] - Basic and diluted earnings per share for the three months ended October 31, 2025, were $(4.74), compared to $(2.86) for the same period in 2024[128] Assets and Liabilities - Total current assets decreased to $230.656 million as of October 31, 2025, down from $332.853 million as of January 31, 2025, representing a decline of 30.8%[14] - Total assets decreased to $897.582 million as of October 31, 2025, compared to $1.106 billion as of January 31, 2025, a reduction of 18.9%[14] - Total current liabilities decreased to $272.994 million as of October 31, 2025, down from $376.982 million as of January 31, 2025, a decline of 27.5%[14] - Shareholders' equity decreased to $3.988 million as of October 31, 2025, compared to $93.846 million as of January 31, 2025, indicating a significant decline[14] - As of October 31, 2025, Skillsoft's long-term debt amounted to $570.2 million, with current maturities of $6.4 million[70] - The fair value of Skillsoft's outstanding long-term debt as of October 31, 2025, was $511.2 million[115] Cash Flow and Expenses - Cash flows from operating activities resulted in a net cash outflow of $5.4 million for the nine months ended October 31, 2025, compared to a net cash inflow of $12.2 million in 2024[31] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $25.8 million for the nine months ended October 31, 2025[31] - Skillsoft's cash and cash equivalents at the end of the period were $74.6 million, down from $97.9 million at the end of the same period in 2024[35] - The company incurred total operating expenses of $163.327 million for the three months ended October 31, 2025, an increase from $146.402 million in the same period of 2024[16] - Interest expense for the nine months ended October 31, 2025, was $44.115 million, compared to $48.538 million for the same period in 2024[126] - Cash paid for interest during the nine months ended October 31, 2025, was $41.8 million, compared to $48.4 million in 2024[35] Stock and Equity - The weighted average common shares outstanding for the nine months ended October 31, 2025, were 8,536,207, compared to 8,170,344 for the same period in 2024[16] - The total number of Class A common shares outstanding increased from 8,380,436 to 9,051,822 between January 31, 2024, and October 31, 2025[28][25] - As of October 31, 2025, Skillsoft had 9,051,822 shares of common stock issued and 8,752,045 shares outstanding[74] - The total additional paid-in capital as of October 31, 2025, is $1,575,259,000[25] - The total number of shares available for issuance under the 2020 Omnibus Incentive Plan was 496,019 as of October 31, 2025, following an amendment that increased the total shares available[80] Revenue Recognition - The company recognized revenue from subscription services on a straight-line basis over the contract term, which typically ranges from one to three years[97] - Revenue from professional services is recognized over time as services are performed, with billing commonly occurring in advance of the services being provided[99] - SaaS and subscription services revenue for the three months ended October 31, 2025, was $93,532, a decrease of 3.3% from $97,123 in the same period of 2024[100] - Total net revenues for the three months ended October 31, 2025, were $128,998, down 6.0% from $137,225 in the prior year[101] - Revenue from the United States for the three months ended October 31, 2025, was $83,537, a decrease of 6.4% compared to $88,960 in 2024[102] Impairments and Adjustments - The company reported an impairment of goodwill amounting to $20.771 million for the three months ended October 31, 2025[16] - The company incurred an impairment of goodwill amounting to $20.8 million during the nine months ended October 31, 2025[31] - The translation adjustment for the quarter ending October 31, 2025, was a loss of $13,879,000[25] - The restructuring charges for the three months ended October 31, 2025 totaled $4.15 million, primarily associated with costs of terminated employees[63] Future Projections - Future amortization expense related to intangible assets is expected to total $270.2 million over the next several fiscal years[48] - The company will continue to evaluate its cost structure and operating model, which may result in further restructuring actions[64]