Skillsoft (US:SKIL)2023-04-12 00:02Financial Data and Key Metrics Changes - Full year bookings were $607 million, down approximately 3% year-over-year, with GAAP revenue at $555 million and pro forma revenue at $563 million, reflecting a slight decline of 1% year-over-year [27][39][58] - Adjusted EBITDA from continuing operations was $107 million for the full year, representing a margin of 19% of GAAP revenue, with a GAAP net loss of $725 million for the year, including a significant noncash goodwill impairment charge [27][40][41] Business Line Data and Key Metrics Changes - Skillsoft Content segment bookings grew 5% year-over-year to $409 million, with strong performance in coaching, which more than doubled bookings during the year [7][39] - Instructor-led training (ILT) bookings were $199 million for the full year, down 16% year-over-year, primarily due to reductions in customer subsidies [20][58] Market Data and Key Metrics Changes - The deferred revenue balance increased to $281 million, up 8% year-over-year, indicating a positive outlook for future revenue [22][100] - The company reported a dollar retention rate (DRR) of approximately 100% for fiscal 2023, up from 97% in the prior year, suggesting improved customer satisfaction and retention [29][94] Company Strategy and Development Direction - The company aims to build a leader in enterprise learning through strengths in platform, content, and go-to-market strategies, focusing on workforce transformation and tech skills [17][41] - Investments in content, platform, and go-to-market strategies are expected to drive growth and enhance customer satisfaction, with a particular focus on generative AI and personalized learning experiences [13][15][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a dynamic macro environment with challenges such as high inflation and rising interest rates but expressed confidence in the company's momentum and pipeline for fiscal 2024 [19][22] - The company remains committed to executing its strategic priorities and believes the investment thesis is compelling due to a large and growing market with structural tailwinds [17][41] Other Important Information - The company has made significant strides in enhancing its Codecademy product suite, launching new subscription products and features aimed at upskilling and career development [11][28] - The company has been recognized for its AI-driven learning experiences, receiving awards for its innovative use of AI in education [14][36] Q&A Session Summary Question: Demand trends in Q4 and fiscal year 2024 - Management noted that growth was strongest in the subscription business, which is capital light and has high retention rates, with broad-based growth across tech, leadership, and compliance areas [50] Question: Insights on win backs and customer retention - Management highlighted successful win backs of large accounts, emphasizing the value of their multimodal solutions tailored to customer needs [73] Question: Pricing and ARPU trends - Management indicated that while there is price pressure in some segments, there is significant growth in areas focused on strategic reskilling and workforce transformation, which are less price-sensitive [87] Question: Dynamics driving DRR improvement - The improvement in DRR was attributed to migrating customers to the Percipio platform, cross-selling, and upselling efforts, with expectations for continued improvement [94] Question: Free cash flow expectations relative to EBITDA - Management provided context on free cash flow expectations, indicating a path to positive free cash flow in fiscal 2024, with a focus on balancing investment and profitability [95]