Company Overview

Skillsoft Corp. (SKIL) has emerged as a trailblazer in the dynamic landscape of corporate learning and talent development. With a rich history spanning over two decades, this leading platform for transformative learning experiences has consistently pushed the boundaries of innovation, empowering organizations worldwide to unlock the full potential of their workforce.

Founded in 1998, Skillsoft's journey has been marked by a relentless pursuit of excellence, strategic acquisitions, and a steadfast commitment to providing cutting-edge solutions that address the evolving needs of its clients. In the early years, Skillsoft built a reputation for its high-quality content and innovative delivery methods, particularly in the areas of leadership, business, and technology training. The company's growth strategy has included both organic expansion and strategic acquisitions, such as the purchase of Codecademy in 2021, a leading online learning platform for technology skills, which further strengthened its position in the skills development market.

Product Portfolio

Skillsoft's comprehensive suite of premium, original, and authorized partner content features one of the deepest libraries of leadership and business, technology and development, and compliance curricula. With access to a broad spectrum of learning options, including video, audio, books, bootcamps, live events, and practice labs, the company has consistently delivered engaging and impactful learning experiences that drive measurable outcomes for its clients.

Skillsoft's flagship offering, Percipio, is a state-of-the-art, AI-driven online learning platform that delivers an immersive and personalized learning experience. Leveraging the power of cutting-edge technologies, including generative AI, Percipio empowers learners to acquire critical job skills in the flow of work and grow as leaders, employees, and individuals.

In addition to its Talent Development Solutions segment, Skillsoft also operates the Global Knowledge business, which offers a diverse range of training solutions covering information technology and business skills for corporations and their employees. This blended approach to learning, combining virtual, in-classroom, and on-demand offerings, has enabled the company to cater to the evolving needs of its clients and stay ahead of the curve in an ever-changing landscape.

Financials

Skillsoft's financial performance has been a testament to its strategic execution and market relevance. In the fiscal year ended January 31, 2024, the company reported total revenue of $553.24 million. However, the company faced challenges, reporting a net loss of $349.29 million for the same period. Operating cash flow (OCF) was $2.82 million, while free cash flow (FCF) was negative $15.09 million.

For the most recent quarter (Q2 2025), Skillsoft reported revenue of $132.22 million, representing a 6.3% year-over-year decrease. This decline was primarily attributed to weaker demand in the Global Knowledge segment and a tighter budget environment impacting the Talent Development Solutions segment. The company reported a net loss of $39.57 million for the quarter, with OCF at negative $11.44 million and FCF at negative $16.12 million.

Skillsoft's performance varies across geographic markets. In the first half of fiscal 2025, the United States accounted for $173.33 million (66.6%) of total revenue. The Europe, Middle East, and Africa region generated $63.80 million (24.5%), while the Other Americas and Asia-Pacific regions contributed $11.90 million (4.6%) and $10.99 million (4.2%), respectively.

Despite these challenges, the overall market for corporate training and learning solutions is growing at a compound annual growth rate (CAGR) of 7-13% across various sub-segments in which Skillsoft operates, indicating potential for future growth.

Liquidity

As of the most recent quarter, Skillsoft's financial position reflected a highly leveraged capital structure, with a debt-to-equity ratio of 4.40. The company held $122.65 million in cash and cash equivalents, along with $7.49 million in restricted cash, totaling $130.14 million. Additionally, Skillsoft has access to up to $75 million in borrowings under its accounts receivable facility.

The company's current ratio and quick ratio both stood at 0.88, indicating potential liquidity challenges. These figures underscore the importance of Skillsoft's ongoing efforts to improve operational efficiency and financial performance.

Despite the challenges posed by the COVID-19 pandemic, Skillsoft has demonstrated its resilience and adaptability. The company swiftly pivoted to address the surge in demand for remote and virtual learning solutions, leveraging its technological capabilities to seamlessly transition its offerings and ensure uninterrupted support for its clients.

Business Segments

Skillsoft operates through two main business segments: Talent Development Solutions and Global Knowledge.

The Talent Development Solutions segment offers a comprehensive suite of premium, original, and authorized partner content, featuring one of the deepest libraries of leadership and business, technology and development, and compliance curricula. This segment provides customers with access to a broad spectrum of learning options, predominantly delivered through Percipio, Skillsoft's AI-driven learning platform. For the three months ended July 31, 2024, this segment generated revenues of $101.65 million, a slight decrease of 1.5% compared to the prior year period. The segment's operating income for the same period was $18.12 million.

The Global Knowledge segment generates revenues from virtual, in-classroom, and on-demand training solutions geared towards information technology professionals. This segment offers authorized content from various partners aimed at providing professional certifications. For the three months ended July 31, 2024, the Global Knowledge segment generated revenues of $30.57 million, a decrease of 19.5% compared to the prior year period. The segment's operating income for the same period was $1.21 million.

Strategic Priorities and Future Outlook

Looking ahead, Skillsoft remains firmly committed to its strategic priorities, which include driving profitable growth, enhancing operational efficiency, and delivering innovative solutions that cater to the evolving needs of the modern workforce. The company's recent appointment of a Chief Transformation Officer, Chief Analytics Officer, and Senior Vice President of Sales underscores its dedication to strengthening its operational foundations and positioning itself for long-term success.

In July 2024, Skillsoft announced a comprehensive resource reallocation plan to reduce costs and better align its operations with current economic conditions. This included workforce reductions and facility consolidations, reflecting the company's commitment to improving its financial performance.

Furthermore, Skillsoft's collaboration with industry titans, such as Microsoft, showcases its ability to forge strategic partnerships and leverage emerging technologies to deliver cutting-edge learning experiences. The launch of its AI Accelerator program, for instance, positions the company as a leader in the AI-powered learning revolution, empowering organizations and individuals to navigate the complexities of the digital age.

Skillsoft has reaffirmed its full-year guidance for fiscal 2025, projecting revenue between $510 million and $525 million, and adjusted EBITDA between $105 million and $110 million. The company also expects full-year free cash flow to be approximately negative $15 million, which includes the impact of restructuring and one-time transformation charges.

It's worth noting that on May 9, 2024, Skillsoft's former Chief Executive Officer departed the company. While this leadership change presents both challenges and opportunities, Skillsoft remains focused on executing its strategic plan and driving long-term value for its stakeholders.

Conclusion

As Skillsoft continues to navigate the ever-changing learning and development landscape, it remains steadfast in its mission to propel organizations and people to grow together through transformative learning experiences. With a robust portfolio of solutions, a relentless focus on innovation, and a deep understanding of its clients' needs, Skillsoft is working to strengthen its core operations while investing in growth initiatives to capitalize on the expanding corporate training market opportunity. Despite facing financial challenges, the company's strategic initiatives and market position in a growing industry provide potential for future growth and improved performance.