Skillsoft (US:SKIL)2022-06-08 23:29Financial 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]