Skillsoft (US:SKIL)2023-06-06 23:47Financial Data and Key Metrics Changes - The company reported total bookings of $108 million, down 4% year-over-year, primarily due to the decline in the Instructor-led Training (ILT) segment [47] - Content & Platform segment bookings were $65 million, reflecting a growth of 9% for the quarter and 3% on a Last Twelve Months (LTM) basis [24] - Total revenue was $136 million, down 3%, with Content & Platform revenue at $99 million, up 2%, and ILT revenue at $37 million, down 14% [26][29] - Adjusted EBITDA was $22 million, up 13%, with an adjusted EBITDA margin of approximately 16%, gaining over 200 basis points compared to the previous year [29][48] Business Line Data and Key Metrics Changes - The Content & Platform segment demonstrated strong performance with a dollar retention rate of 108% for the quarter and 101% on an LTM basis [19][24] - The ILT segment saw bookings decline by 18% to $44 million, attributed to changes in training subsidy programs [25] - Codecademy contributed to sustained double-digit growth within the Content & Platform segment [26][70] Market Data and Key Metrics Changes - The company noted a significant increase in demand for generative AI training, with a more than six-fold increase in completions for AI and machine learning courses [8] - Growth opportunities were identified in sectors such as professional services, technology, and retail, with a focus on organizations prioritizing workforce transformation [83] Company Strategy and Development Direction - The company is focusing on three growth drivers: leading workforce transformation, tech and development skilling, and preparing organizations for generative AI [42] - A strategic partnership was established with Kyndryl, emphasizing the importance of skills development and workforce transformation [20][21] - The company is leveraging generative AI to enhance its offerings, including an AI coaching simulator currently in alpha testing with large enterprise customers [17][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term structural tailwinds, including low unemployment and the need for reskilling as a priority for organizations [6][40] - The company reaffirmed its full-year outlook, expecting total bookings of $610 million to $640 million and revenue of $555 million to $585 million [51] - Management acknowledged the challenges of a bifurcated pricing environment but remains optimistic about capturing market share in strategic customer segments [62][77] Other Important Information - The company ended the quarter with $178 million in cash and cash equivalents, having repurchased 4.4 million shares under its share repurchase program [30] - Non-GAAP sales and marketing expenses were $44 million, or 32% of revenue, reflecting a 7% increase due to investments in go-to-market strategies [28] Q&A Session Summary Question: Can you provide insights on Codecademy's revenue contribution and profitability metrics? - Management indicated that Codecademy is performing well on the top line and is tracking positively against profitability commitments made at the time of acquisition [54][69] Question: What is the expectation for the ILT business revenue cadence throughout the year? - Management noted that Q4 is typically the strongest quarter for ILT bookings, and they expect a more logical comparison in the second half of the year [73] Question: How is the sales force productivity, particularly for newer representatives? - Management confirmed that improved productivity is assumed in their guidance, with newer sales representatives expected to reach full productivity within 12 months [75] Question: How is the pricing environment affecting the business? - Management described the pricing environment as bifurcated, with a shrinking segment of price-sensitive customers and a growing segment that views skills development as strategic [62][77] Question: What are the growth opportunities across regions or verticals? - Management highlighted stronger growth in professional services, technology, and retail, particularly where organizations prioritize workforce transformation [83]