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Skillsoft (SKIL) - 2025 Q1 - Earnings Call Transcript
SKILSkillsoft (SKIL)2024-06-10 23:05
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Financial Data and Key Metrics Changes - Content and platform revenue was 98million,roughlyflatyear−over−year,impactedbytighterbudgetsandsofterconsumersubscriptionperformance[9]−Totalrevenuewas98 million, roughly flat year-over-year, impacted by tighter budgets and softer consumer subscription performance [9] - Total revenue was 128 million, down 6% year-over-year, with adjusted EBITDA at 19millionor1519 million or 15% of revenue compared to 22 million or 16% in the prior year [43][44] - General and administrative expenses increased by 10% year-over-year to 20million,whiletotaloperatingexpenseswere20 million, while total operating expenses were 109 million, down 4% year-over-year [10][11] Business Line Data and Key Metrics Changes - Instructor-led training revenue decreased by 20% year-over-year to 30million,influencedbytheexitfromtheapprenticeshipbusinessintheUK[9]−Thelong−termdollarretentionratewasapproximately9930 million, influenced by the exit from the apprenticeship business in the UK [9] - The long-term dollar retention rate was approximately 99%, down from 101% in Q1 of the previous year [9] Market Data and Key Metrics Changes - The instructor-led training market is growing globally, but Skillsoft's performance in this segment has been challenged [16][68] - The company is seeing good expansion in selected Asian markets, while Europe continues to show positive growth [74] Company Strategy and Development Direction - The company is evolving its strategy to strengthen operational foundations and improve execution, focusing on a dual business unit structure [5][6] - Skillsoft aims to leverage its unique digital capabilities and interactive learning experiences to capture growth in the individual learner market [16] - The company is committed to enhancing its leadership position in a fragmented industry by offering an end-to-end interactive learning solution [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment in the first quarter results but remains confident in the long-term market opportunity [20] - The company is addressing operational challenges and expects improvements in performance in the coming quarters [20][90] - Management highlighted the importance of adapting to a skill-centric economy driven by technological advancements like generative AI [7] Other Important Information - Cash flow from operations was 15 million, with positive free cash flow of 10millioninthequarter[22]−Thecompanymaintainsasolidbalancesheetwithcashandcashequivalentsof10 million in the quarter [22] - The company maintains a solid balance sheet with cash and cash equivalents of 150 million, up from $147 million in the previous quarter [45] Q&A Session Summary Question: Concerns about restructuring and full-year outlook - Management acknowledged the need for operational discipline and execution focus, expressing confidence in achieving full-year guidance despite a softer start [25][27] Question: Impact of enterprise renewal rates and specific industries - Management noted that while there are pressures, they do not see significant changes across industry verticals, with some softness observed [33][40] Question: Challenges in the instructor-led training business - Management indicated that execution issues are primarily responsible for the challenges, with confidence in fixing these operational matters quickly [55][68] Question: Geographic performance and market share - Management reported no significant geographic divergence affecting performance, with positive growth in selected Asian markets [74] Question: Engagement metrics and user outcomes - Management emphasized the importance of measuring outcomes rather than just usage, aligning with customer expectations for retention and career mobility [81][85]