Skillsoft — Second Quarter Fiscal 2027 Earnings Summary

Financial Performance

• Revenue for the second quarter of fiscal 2027 was $98.2 million, a 3% decrease from the prior year.
• Net loss improved 17% year-over-year to $15.0 million, compared to a net loss of $18.0 million in the prior year.
• Net loss per share improved 20% to $1.67, compared to $2.10 in the prior year.
• Adjusted EBITDA was $33 million, representing a 34% margin of revenue, up from $31 million and a 31% margin in the prior year.
• Free cash flow was ($20.5) million, an improvement from ($22.6) million in the prior year.
• Deferred revenue decreased to $190.6 million as of July 31, 2026, from $257.3 million as of January 31, 2026.
• Total long-term debt was $567.2 million as of July 31, 2026, compared to $570.8 million as of January 31, 2026.
• Cash and cash equivalents were $90.3 million as of July 31, 2026, down from $94.1 million as of January 31, 2026.

Guidance and Future Outlook

• Updated full-year fiscal 2027 revenue guidance to $380 million – $390 million, revised down from the prior guidance of $388 million – $406 million.
• Maintained full-year fiscal 2027 Adjusted EBITDA guidance of $108 million – $116 million.
• Maintained full-year fiscal 2027 Free Cash Flow guidance of $14 million – $22 million.
• Management cited accelerating pressure in the consumer business as the driver for the revised revenue outlook.

Business Segments and Product Lines

• Skillsoft operates as a single operating and reportable segment following the classification of the Global Knowledge (GK) business as held for sale and discontinued operations as of April 30, 2026.
• The enterprise business continues to perform as planned, supported by healthy retention, growing platform adoption, and an expanding pipeline.
• In July 2026, Skillsoft completed the sale of its Global Knowledge business to Enduring Ventures.
• The AI-based LX Design Studio capability reached general availability, enabling customers to create custom courses and assessments.
• Early access was launched for Skillsoft AI Coach, a personalized coaching experience.
• CAISY learners increased 23% year-over-year, and organizations using CAISY grew 9% by the end of the second quarter.

Market and Competitive Landscape

• Skillsoft positions itself as an AI-native skills management platform addressing the need for organizations to identify skills gaps and measure workforce readiness.
• The company notes growing demand for AI-enabled practice and skills development.

Risks and Challenges

• Accelerating pressure in the consumer business has impacted revenue growth.
• Addressing the debt structure is identified as a top financial priority.
• The company faces risks related to the successful implementation of its transformation strategy and maintaining compliance with New York Stock Exchange listing standards.

Management Commentary and Tone

• Ron Hovsepian, Executive Chair and CEO, stated the second quarter marked an important step in the company's transformation, resulting in a simpler, more focused company centered on the core enterprise opportunity and AI-native platform.
• Hovsepian expressed encouragement regarding customer engagement, early platform adoption, and pipeline expansion.
• Ron Kisling, Chief Financial Officer, noted progress on profitability and emphasized disciplined execution and cost structure management to maintain EBITDA and Free Cash Flow guidance despite revenue headwinds.

Other Key Points

• The sale of the Global Knowledge business to Enduring Ventures was completed in July 2026.
• Historical results of the former GK segment are presented as discontinued operations and excluded from continuing operations and segment results.
• Free cash flow metrics include both continuing and discontinued operations through the sale of the GK disposal group on July 6, 2026.
• Skillsoft reported a loss on disposal and impairment of goodwill related to the disposal group of $37.967 million for the six months ended July 31, 2026.