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01/11 16:20
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several negative factors: an EPS miss, revenue decline, and significant debt levels. Although adjusted EBITDA and free cash flow improved, these are overshadowed by declining revenues and financial instability. The Q&A section highlights uncertainty in the macro environment and management's evasive responses. The absence of a share repurchase plan and a competitive market also contribute to a negative outlook. Despite some positive product developments, the overall sentiment is negative, likely leading to a stock price decline of -2% to -8%.
EPS Reported EPS is $-3.75, compared to expectations of $-2.05.
Talent Development Solutions (TDS) Revenue TDS revenue was $102.8 million in Q4, up 1% year-over-year; full year revenue was $405.5 million, essentially flat to FY '24.
Global Knowledge Revenue Global Knowledge revenue was $30.9 million in Q4, down approximately $4.7 million or 13% year-over-year; full year revenue was $125.4 million, down approximately $23 million or 15% year-over-year.
Total Revenue Total revenue was $133.8 million in Q4, down approximately $3.8 million or 2.8% year-over-year; full year total revenue was $531 million, down approximately $22.2 million or 4% year-over-year.
Adjusted EBITDA Adjusted EBITDA was $29.9 million in Q4, up $1.6 million compared to $28.3 million in the prior year; full year adjusted EBITDA was $109.1 million, up $4 million compared to $105.1 million in the prior year.
GAAP Net Loss GAAP net loss was $31.1 million in Q4 compared to a GAAP net loss of $245.3 million in the prior year; full year GAAP net loss was $121.9 million compared to $349.3 million in the prior year.
Free Cash Flow Free cash flow was $13.2 million in Q4, an improvement of $7.8 million compared to $5.4 million in the prior year; full year free cash flow was $11.6 million, an improvement of approximately $27 million compared to negative $15 million in the prior year.
Cash and Liquidity Position Cash, cash equivalents, and restricted cash was $103 million; total gross debt was $581 million, down from approximately $591 million at the end of Q3.
Adjusted Net Income Adjusted net income was $17 million in Q4, flat compared to the prior year; full year adjusted net income was $35 million, compared to $34 million in the prior year.
Adjusted Free Cash Flow Adjusted free cash flow was $33 million for FY '25, an improvement of $30 million compared to the prior year period.
New Product Features: Skillsoft continues to build out enterprise features and integrations available in the Percipio platform, including the AI-powered coach, Skillsoft CAISY, which recently hit over 1 million launches.
Certification Paths: Percipio now allows customers to create their own certification paths and manage their own certification programs.
Integration with Learning Systems: Skillsoft released a new integration with SAP Talent Intelligence Hub and added new content integrations with Pluralsight and Big Think+.
Market Positioning: Skillsoft is targeting the enterprise market segment, reallocating up to 20% of resources to this area, focusing on acquiring large enterprise customers.
Market Size: The market Skillsoft serves is estimated at over $400 billion, with a focus on the talent development life cycle.
Expense Reduction: Skillsoft achieved $45 million in annualized expense reduction in fiscal 2025, with 40% to 50% of these savings reinvested back into the business.
Cash Flow Improvement: Skillsoft generated $13.2 million in free cash flow in Q4 FY '25, an improvement of $7.8 million year-over-year.
Transformation Strategy: Skillsoft's transformation strategy focuses on fixing operational basics and investing to grow, with a commitment to return to top-line growth and margin expansion in FY '26.
Go-to-Market Strategy: Skillsoft is shifting its go-to-market resources to a more regionally focused model to stabilize its Global Knowledge business unit.
Earnings Miss: Skillsoft Corp. reported an EPS of $-3.75, missing expectations of $-2.05, indicating potential financial instability.
Regulatory Risks: The company is closely monitoring the macro-economic environment and evolving government policies, which may have material impacts on business operations.
Revenue Decline in Global Knowledge Unit: Global Knowledge revenue decreased by approximately 13% year-over-year, indicating challenges in this business unit.
Foreign Exchange Impact: The Talent Development Solutions segment experienced a slightly negative impact on revenue due to foreign exchange fluctuations.
Debt Levels: Total gross debt was $581 million, with a leverage profile of 5.3 times, indicating significant financial obligations.
Transformation Costs: Non-recurring costs associated with the transformation of the business have materially impacted free cash flow, although necessary for aligning cost structures.
Market Competition: Skillsoft is targeting the enterprise market segment, which is competitive and requires significant investment to maintain and grow market share.
Economic Factors: The company acknowledges potential economic factors that could impact business performance, emphasizing the need for strategic adjustments.
Transformation Plan: Skillsoft is on track with its transformation plan, focusing on operational execution to drive growth and improve productivity and margin expansion.
Go-to-Market Strategy: Skillsoft is reallocating resources to focus on the enterprise market segment, targeting a shift of up to 20% of go-to-market and product resources.
Expense Reduction: Skillsoft achieved $45 million in annualized expense reduction in FY 2025, with 40% to 50% of these savings reinvested back into the business.
Product Development: Skillsoft is enhancing its Percipio platform with new features and integrations, including AI capabilities and certification paths.
Customer Engagement: Skillsoft is focusing on acquiring and retaining large enterprise customers and enhancing its product capabilities.
Revenue Guidance FY 2026: Skillsoft expects revenue of $530 million to $545 million for FY 2026.
Adjusted EBITDA Guidance FY 2026: Adjusted EBITDA is expected to be between $112 million and $118 million for FY 2026.
Free Cash Flow Guidance FY 2026: Skillsoft anticipates free cash flow of $13 million to $18 million for FY 2026.
Unlevered Free Cash Flow Guidance FY 2026: Excluding net debt servicing costs, unlevered free cash flow is expected to be between $71 million and $76 million.
Share Repurchase Program: None
The earnings call reveals several negative factors: a GAAP net loss increase, a decline in free cash flow, and pulled guidance for GK due to uncertainty. Despite some positive aspects like strong TDS margins and AI-driven growth potential, the lack of specific guidance and strategic review timeline, combined with the negative financial results, suggest a negative sentiment and potential stock price decline.
The earnings call summary reveals mixed signals: stable adjusted EBITDA and improved net loss, but negative free cash flow and declining revenue. The Q&A section highlights macroeconomic challenges, particularly in North America and the Middle East, but shows optimism in Europe and strategic investments. Despite uncertainties, the company maintains confidence in recovery. However, the lack of precise guidance and quantifiable metrics tempers optimism. Overall, the neutral rating reflects balanced positive and negative factors, suggesting a stable stock price in the short term.
The earnings call shows mixed signals. While there are positive aspects like improved free cash flow and reduced debt, these are offset by declining revenues in key sectors and macroeconomic uncertainties impacting customer spending. The Q&A reveals cautious optimism but also highlights challenges like discretionary spending cuts and government sector softness. The company's strategic focus on growth and transformation is promising, but immediate financial results are lackluster. The lack of market cap data prevents a precise prediction, but overall, the sentiment is neutral due to balanced positive and negative elements.
The earnings call reveals several negative factors: an EPS miss, revenue decline, and significant debt levels. Although adjusted EBITDA and free cash flow improved, these are overshadowed by declining revenues and financial instability. The Q&A section highlights uncertainty in the macro environment and management's evasive responses. The absence of a share repurchase plan and a competitive market also contribute to a negative outlook. Despite some positive product developments, the overall sentiment is negative, likely leading to a stock price decline of -2% to -8%.
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