Skillsoft (US:SKIL)2025-09-09 22:02Financial Data and Key Metrics Changes - Total revenue for the second quarter was $128.8 million, down $3.4 million or 2.6% year-over-year [15] - Adjusted EBITDA was $28.3 million, flat compared to last year, with an adjusted EBITDA margin of 22% compared to 21.4% last year [17] - GAAP net loss was $23.8 million, an improvement from a net loss of $39.6 million in the prior year [17] - Free cash flow for the quarter was negative $22.6 million, compared to negative $16.1 million in the prior year [18] Business Line Data and Key Metrics Changes - Revenue for Talent Development Solutions (TDS) was $101.2 million, slightly down year-over-year [14] - Global Knowledge revenue was $27.6 million, down approximately $2.9 million or 9.6% year-over-year [15] - TDS LTM dollar retention rate was 99%, unchanged from the previous quarter [15] Market Data and Key Metrics Changes - Demand in North America and the Middle East was notably soft, impacting revenue [8] - The public sector was significantly affected by macroeconomic uncertainties, particularly in North America and the Middle East [24][25] Company Strategy and Development Direction - The company is focused on a transformation plan that includes a dual business unit structure and a new AI innovation-based product roadmap [7] - Strategic priorities include leveraging existing platform scale and enhancing customer relationships [8] - The company aims to evolve its product strategy to focus on AI-native design and skills intelligence [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged economic uncertainty affecting revenue and customer discretionary spending [5] - The company is adjusting its full-year revenue guidance to $510 million-$530 million due to anticipated continued softness in federal spending [21] - Management expressed confidence in the core business's durability and the potential for market growth [13] Other Important Information - The company achieved $45 million in expense reductions, contributing to profitability and margin expansion [8] - The company is committed to improving free cash flow, reiterating expectations of $13 million-$18 million for the full year [20] Q&A Session Summary Question: Can you provide additional color on sectors impacted by softer live learning? - Management noted that public sector spending was significantly affected in North America and the Middle East, while Europe showed good progress [24][25] Question: Is the softness more macro-driven or competitive? - Management indicated that the softness is primarily macro-driven, with positive bookings in Europe providing confidence [26][27] Question: How does the adjusted revenue guidance reflect bookings? - The guidance adjustment was based on first-half performance and anticipated seasonality in the second half [30] Question: Is Q2 a trough for the company? - Management suggested that Q2 may represent a trough, particularly for the Global Knowledge segment, while TDS is expected to perform reasonably well [42][43] Question: How will the company maintain profitability amid revenue challenges? - Management emphasized ongoing efficiency assessments and cost management to sustain profitability [48][49]