Skillsoft Corp. (NYSE:SKIL) Q4 2022 Earnings Conference Call April 12, 2023 5:00 AM ET Company Participants Chad Lyne - Head of Investor Relations Jeff Tarr - Chief Executive Officer Rich Walker - Chief Financial Officer Conference Call Participants Sheldon McMeans - Barclays Robert Simmons - D.A. Davidson Rajiv Sharma - B. Riley Securities Ken Wang - Oppenheimer Operator Greetings, and welcome to the Skillsoft Fourth Quarter 2023 Financial Results Conference Call. At this time, all participants are in a li ...

[PART I — FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION%20-%20UNAUDITED) This section presents the unaudited condensed consolidated financial statements and related disclosures for Skillsoft Corp [Item 1. Unaudited Financial Statements](index=6&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) This section provides the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, reflecting recent acquisitions, divestitures, and a significant goodwill impairment [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a significant decrease in total assets and shareholders' equity primarily due to goodwill impairment and reclassification of divested assets Balance Sheet Items (in thousands) | Balance Sheet Items (in thousands) | October 31, 2022 | January 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$1,595,401** | **$2,221,948** | | Goodwill | $462,080 | $795,811 | | Intangible assets, net | $769,680 | $793,859 | | **Total Liabilities** | **$1,021,526** | **$1,162,050** | | Long-term debt | $582,870 | $462,185 | | **Total Shareholders' Equity** | **$573,875** | **$1,059,898** | | Accumulated deficit | ($918,714) | ($247,229) | [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The statements of operations reveal a massive operating and net loss for the quarter and nine months ended October 31, 2022, primarily due to a substantial impairment charge Statements of Operations (in thousands) | (in thousands) | Three Months Ended Oct 31, 2022 | Three Months Ended Oct 31, 2021 | | :--- | :--- | :--- | | Total revenues | $139,390 | $140,153 | | Impairment of goodwill and intangible assets | $570,887 | $0 | | Operating loss | ($608,702) | ($10,447) | | Gain on sale of business | $53,756 | $0 | | Net loss | ($528,343) | ($42,855) | Statements of Operations (in thousands) | (in thousands) | Nine Months Ended Oct 31, 2022 (Successor) | Combined Nine Months Ended Oct 31, 2021 (Successor & Predecessor) | | :--- | :--- | :--- | | Total revenues | $414,803 | $318,114 | | Impairment of goodwill and intangible assets | $641,362 | $0 | | Operating loss | ($764,718) | ($66,677) | | Gain on sale of business | $53,756 | $0 | | Net loss | ($671,485) | ($103,972) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=15&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The cash flow statement indicates net cash used in operating and investing activities, partially offset by cash provided from financing activities, resulting in a net increase in cash Statements of Cash Flows (in thousands) | (in thousands) | Nine Months Ended Oct 31, 2022 (Successor) | | :--- | :--- | | Net cash used in operating activities | ($23,561) | | Net cash used in investing activities | ($40,199) | | Net cash provided by financing activities | $83,690 | | **Net increase in cash, cash equivalents and restricted cash** | **$13,107** | - Key investing activities included the acquisition of Codecademy (net cash used of **$198.8 million**) and the sale of SumTotal (net cash received of **$172.0 million**)[28](index=28&type=chunk) - Key financing activities included proceeds from the issuance of term loans (**$157.1 million** net) and repayments on the accounts receivable facility (**$33.2 million**)[28](index=28&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of accounting policies, business combinations, the SumTotal divestiture, and significant impairment charges - The company acquired Codecademy on April 4, 2022, for a total purchase price of **$386.0 million**, consisting of cash and stock[61](index=61&type=chunk)[63](index=63&type=chunk) - The SumTotal business was sold on August 15, 2022, for approximately **$200 million**, resulting in a preliminary gain on sale of **$53.8 million**, and is now reported as a discontinued operation[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - The company recorded a total goodwill impairment of **$641.4 million** in the nine months ended October 31, 2022, with **$570.9 million** recorded in the third quarter alone, due to a decline in stock price, underperformance of Global Knowledge, and macroeconomic uncertainty[87](index=87&type=chunk)[89](index=89&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=63&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, highlighting the impact of strategic moves, revenue trends, the significant goodwill impairment, and liquidity - The sale of the SumTotal business for **$200 million** is intended to sharpen the company's focus on its core corporate digital learning business[200](index=200&type=chunk)[201](index=201&type=chunk) - Q3 revenue decreased **0.5% YoY**, as a **22.1%** decline in Global Knowledge non-subscription revenue offset a **12.8%** increase in Content SaaS subscription revenue[211](index=211&type=chunk)[212](index=212&type=chunk) - A goodwill impairment of **$570.9 million** was recorded in Q3 2022 due to a substantial decline in stock price, deterioration in equity markets, increased interest rates, and underperformance of the Global Knowledge business[227](index=227&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=80&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is omitted as permissible for a smaller reporting company - Not applicable as a smaller reporting company[266](index=266&type=chunk) [Item 4. Controls and Procedures](index=80&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of October 31, 2022, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of October 31, 2022, the company's disclosure controls and procedures were effective[268](index=268&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[269](index=269&type=chunk) [PART II — OTHER INFORMATION](index=82&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other miscellaneous information [Item 1. Legal Proceedings](index=82&type=section&id=Item%201.%20Legal%20Proceedings) A stockholder complaint related to the Codecademy acquisition was dismissed, and the company is not currently involved in other material legal proceedings - A stockholder complaint filed in relation to the Codecademy acquisition was dismissed on May 29, 2022[108](index=108&type=chunk)[271](index=271&type=chunk) [Item 1A. Risk Factors](index=82&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor highlights that the share repurchase program may not be fully consummated or enhance long-term shareholder value - A new risk factor was added regarding the share repurchase program, noting it may not be fully completed and may not enhance shareholder value[273](index=273&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=82&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details its share repurchase activity under the new program, including shares purchased and remaining authorization Share Repurchase Activity (in millions) | Period | Total shares purchased | Average price paid per share | Approximate dollar value of shares that may yet be purchased (in millions) | | :--- | :--- | :--- | :--- | | September 1-30, 2022 | 645,248 | $2.2205 | $28.6 | - On September 7, 2022, the Board authorized a repurchase program for up to **$30 million** of its Class A common stock[138](index=138&type=chunk)[275](index=275&type=chunk) [Item 3. Defaults Upon Senior Securities](index=82&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[276](index=276&type=chunk) [Item 4. Mine Safety Disclosures](index=84&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[277](index=277&type=chunk) [Item 5. Other Information](index=84&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[278](index=278&type=chunk) [Item 6. Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including employment agreements and officer certifications - Lists exhibits filed with the report, including certifications by the Principal Executive Officer and Principal Financial Officer[280](index=280&type=chunk)

Skillsoft Corp. (NYSE:SKIL) Q3 2023 Earnings Conference Call December 6, 2022 5:00 PM ET Company Participants Eric Boyer - Senior Vice President and Head of Investor Relations Jeff Tarr - Chief Executive Officer Rich Walker - Chief Financial Officer Conference Call Participants Sheldon McMeans - Barclays Bank PLC Thomas Singlehurst - Citigroup Inc. Rajiv Sharma - B. Riley Securities, Inc. Nancy Liu - Oppenheimer & Co. Robert Simmons - D.A. Davidson & Co. Arvind Ramnani - Piper Sandler & Co. Operator Hello, ...

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| --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | DISCLAIMER 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 histo ...

Skillsoft Corp. (NYSE:SKIL) Q2 2023 Earnings Conference Call September 7, 2022 5:00 PM ET Company Participants Eric Boyer - Head, Investor Relations Jeff Tarr - Chief Executive Officer Gary Ferrera - Chief Financial Officer Conference Call Participants Sheldon McMeans - Barclays Ken Wong - Oppenheimer Raj Sharma - B. Riley Lucky Schreiner - D.A. Davidson Arvind Ramnani - Piper Sandler Operator Thank you for standing by and welcome to Skillsoft Second Quarter Fiscal 2023 Results Conference Call. [Operator In ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2022 or ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT Delaware 83-4388331 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 300 Innovative Way, Suite 201 Nashua, New Hampshire 03062 (Address of pri ...

Financial Data and Key Metrics Changes - In Q1 2023, total company bookings were $125 million, down 5% year-over-year, with a flat year-over-year performance when excluding the sum total segment [27] - Combined GAAP revenue was $164 million, while adjusted revenue was $170 million, up 1% over the prior year [28] - The GAAP net loss for the quarter was $22 million, and adjusted EBITDA was $3 million, down 12% year-over-year [29][30] - Cash balance decreased to $76 million from $155 million at year-end, primarily due to the acquisition of Codecademy [31] Business Line Data and Key Metrics Changes - Bookings for the Skillsoft content segment increased by 22% year-over-year to $51 million, driven by new customers and a dollar retention rate of 101% [32] - Global Knowledge bookings decreased by 15% year-over-year to $56 million, attributed to its transactional nature and sensitivity to macroeconomic conditions [33] - Sum total bookings were $19 million, a decrease of 26% due to a large contract loss in the payroll business [34] Market Data and Key Metrics Changes - The content segment is expected to be the main driver of future value creation, while Global Knowledge is more sensitive to macroeconomic headwinds [11][21] - The company is experiencing strong demand for its transformative learning experiences, with a focus on addressing skills gaps in the workforce [15] Company Strategy and Development Direction - The acquisition of Codecademy is expected to enhance the tech and development offerings, creating one of the largest communities of learners globally [13] - The company aims to transition more of its business to subscription revenue, embedding instructor-led training into subscriptions and cross-selling offerings [22] - The focus is on improving the performance of Global Knowledge while maintaining growth in the higher-margin content subscription business [24] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic factors have impacted Global Knowledge, with a quantification of about 50% of the shortfall attributed to macro conditions and 50% to staffing issues [62] - The company is optimistic about the performance of the content segment but is tracking towards the low end of its bookings and revenue outlook due to Global Knowledge's slower start [36] - Management expressed confidence in addressing staffing challenges and launching new products to improve Global Knowledge's performance in the second half of the year [44][62] Other Important Information - The company has made significant investments in new content, totaling $120 million over the last four years, contributing to the growth of its subscription business [19] - The engagement on the Percipio platform has reached an all-time high, with a notable increase in the issuance of blockchain-based digital badges [68] Q&A Session Summary Question: Impact on Global Knowledge and macroeconomic conditions - Management explained that Global Knowledge is transactional and sensitive to macroeconomic conditions, particularly in Europe, affecting demand and sales [42][43] Question: Confidence in maintaining performance in sum total - Management indicated that while the Learning Management System (LMS) business is performing well, the legacy human capital management modules have faced challenges due to losing a large customer [45] Question: Cross-sell opportunities with Codecademy - Management confirmed strong interest from enterprise customers in the Codecademy offering, which is being sold as an add-on to existing subscription products [46] Question: Global Knowledge revenue decline and guidance - Management quantified that about 50% of the decline in Global Knowledge is due to macroeconomic factors, with the other half related to staffing issues [62] Question: Engagement levels on the Percipio platform - Management reported increases in usage on the Percipio platform, with high engagement levels and a significant number of digital badges issued [68]

Q1 FY2023 Highlights - Adjusted Revenue was $170 million[14] - Content Bookings grew 31% year-over-year[14] - Adjusted EBITDA was $33 million[14] - Content Dollar Retention Rate was 101%[14] - Content Bookings grew 22% year-over-year on a pro forma basis[14] - Adjusted EBITDA Margin was 19%[14] FY2023 Outlook - Bookings are trending towards the low end of the $790 million to $825 million range due to softness within Global Knowledge[16] - Adjusted Revenue is trending towards the low end of the $765 million to $790 million range due to softness within Global Knowledge[16] - The company expects to deliver Adjusted EBITDA of approximately $167 million[16] Capital Structure - Total Debt was $665 million[18] - Cash was $76 million[20] - Net Debt was $589 million[23] - Net Debt / Pro Forma LTM Adjusted EBITDA was 41x[25]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2022 or ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission File Number: 001-38960 Skillsoft Corp. (Exact name of registrant as specified in its charter) Delaware 83-4388331 ...