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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Skillsoft Corp | NYSE:SKIL | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.20 | 1.97% | 10.35 | 10.46 | 10.14 | 10.14 | 6,960 | 15:54:30 |
Skillsoft Corp. (NYSE: SKIL) (“Skillsoft” or the “Company”), a leading platform for transformative learning experiences, today announced its financial results for the first quarter of fiscal 2024 ended April 30, 2023.
“Skillsoft delivered a strong start to the fiscal year with near double-digit Bookings growth in our Content & Platform segment on a constant currency basis, highlighting the value of our transformative learning solutions,” said Jeffrey R. Tarr, Skillsoft’s Chief Executive Officer. “The strength in this high margin, SaaS-based segment contributed to expanded profitability on an Adjusted EBITDA basis and sets us up well for the year ahead.”
Tarr added, “Continued low unemployment and the proliferation of new technologies is driving organizations to invest in enterprise learning as a strategic priority. Further, we see the rapid rise of Generative AI creating a new imperative for reskilling that will impact nearly every knowledge worker and organization. We’ve spent the last two years assembling an unrivaled collection of assets and believe we are well-positioned to seize the opportunity in front of us.”
Fiscal 2024 First Quarter Select Metrics and Financials from Continuing Operations (1)
Fiscal 2024 First Quarter Business Highlights
Full-Year Fiscal 2024 Financial Outlook (2)
The following table reflects Skillsoft’s reaffirmed financial outlook for the full-year fiscal 2024 ended January 31, 2024, based on current market conditions, expectations, and assumptions:
Bookings
$610 million to $640 million
GAAP Revenue
$555 million to $585 million
Adjusted EBITDA
$100 million to $105 million
(1) Growth calculated relative to the comparable prior year period. Pro Forma results are presented as if Codecademy had merged on February 1, 2022. Constant currency results represent current year period local currency amounts translated at prior year foreign exchange rates. Continuing operations excludes SumTotal results for all periods presented as a result of the sale on August 15, 2022.
(2) See “Non-GAAP Financial Measures and Key Performance Metrics” below for the definitions of our key operational and non-GAAP metrics and how they are calculated and more information regarding the fact that the Company is unable to reconcile forward-looking non-GAAP measures without unreasonable efforts. We have provided at the back of this release reconciliations of our historical non-GAAP financial measures to the comparable GAAP measures.
Key Operational Metrics and Non-GAAP Financial Measures (3)
Change
Three Months Ended
Constant
April 30,
Change
Currency
2023
2022
$
%
%
Bookings (4)
Continuing Operations:
Content & Platform
$
64,533
$
60,146
$
4,387
7
%
9
%
Instructor-Led Training
43,936
55,665
(11,729
)
-21
%
-18
%
Total Bookings
$
108,469
$
115,811
$
(7,342
)
-6
%
-4
%
GAAP Revenue
Continuing Operations:
Content & Platform
$
98,573
$
89,785
$
8,788
10
%
11
%
Instructor-Led Training
36,981
45,053
(8,072
)
-18
%
-14
%
Total
$
135,554
$
134,838
$
716
1
%
3
%
Pro Forma Revenue (4)
Continuing Operations:
Content & Platform
$
98,573
$
97,843
$
730
1
%
2
%
Instructor-Led Training
36,981
45,053
(8,072
)
-18
%
-14
%
Total Pro Forma Revenue
$
135,554
$
142,896
$
(7,342
)
-5
%
-3
%
GAAP Net Income (Loss)
$
(44,224
)
$
(21,643
)
$
(22,581
)
-104
%
Pro Forma Non-GAAP Operating Expenses (4)
Pro Forma Non-GAAP costs of revenues
$
37,576
$
38,465
$
(889
)
-2
%
1
%
Pro Forma Non-GAAP content and software development expenses
14,306
18,465
(4,159
)
-23
%
-21
%
Pro Forma Non-GAAP selling and marketing expenses
43,843
41,477
2,366
6
%
7
%
Pro Forma Non-GAAP general and administrative expenses
18,201
24,811
(6,610
)
-27
%
-26
%
Total Pro Forma Non-GAAP Operating Expenses
$
113,926
$
123,218
$
(9,292
)
-8
%
-6
%
Pro Forma Adjusted Net Income (Loss) & Adjusted EBITDA (4)
Continuing Operations:
Pro Forma Adjusted Net Income (Loss)
$
(30,053
)
$
(11,499
)
$
(18,554
)
-161
%
Pro Forma Adjusted EBITDA
$
21,628
$
19,680
$
1,948
10
%
13
%
___________(3)
See "Non-GAAP Financial Measures and Key Performance Metrics" below for the definitions of our key operational and non-GAAP metrics and how they are calculated.
(4)
For the three months ended April 30, 2022, the unaudited Pro Forma financial information is presented in accordance with Regulation S-X, Article 11 to enhance comparability for all periods by including operating results for Codecademy as if the merger had closed on February 1, 2022.
Webcast and Conference Call Information
Skillsoft will host a conference call and webcast today at 5:00 p.m. Eastern Time to discuss its financial results. To access the call, dial (877) 413‑9278 from the United States and Canada or (215) 268‑9914 from international locations. The live event can be accessed from the Investor Relations section of Skillsoft’s website at investor.skillsoft.com. A replay will be available for six months.
About Skillsoft
Skillsoft delivers transformative learning experiences that propel organizations and people to grow together. The Company partners with enterprise organizations and serves a global community of learners to prepare today’s employees for tomorrow’s economy. With Skillsoft, customers gain access to blended, multimodal learning experiences that do more than build skills, they grow a more capable, adaptive, and engaged workforce. Through a portfolio of best-in-class content, a platform that is personalized and connected to customer needs, world-class tech, and a broad ecosystem of partners, Skillsoft drives continuous growth and performance for employees and their organizations by overcoming critical skill gaps and unlocking human potential. Learn more at www.skillsoft.com.
NON-GAAP FINANCIAL MEASURES AND KEY PERFORMANCE METRICS
We track the non-GAAP financial measures and key performance metrics that we believe are key financial measures of our success. Non-GAAP measures and key performance metrics are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to us, many of which present non-GAAP measures and key performance metrics when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of U.S. GAAP financial disclosures. For example, a company with higher U.S. GAAP net income may not be as appealing to investors if its net income is more heavily comprised of gains on asset sales. Likewise, excluding the effects of interest income and expense moderates the impact of a company’s capital structure on its performance. However, non-GAAP measures and key performance metrics have limitations as analytical tools. Because not all companies use identical calculations, our presentation of non-GAAP financial measures and key performance metrics may not be comparable to other similarly titled measures of other companies. They are not presentations made in accordance with U.S. GAAP, are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with U.S. GAAP or operating cash flows determined in accordance with U.S. GAAP. As a result, these performance measures should not be considered in isolation from, or as a substitute analysis for, results of operations as determined in accordance with U.S. GAAP.
We have provided at the back of this release reconciliations of our historical non-GAAP financial measures to the comparable GAAP measures. We do not reconcile our forward-looking non-GAAP financial measures to the corresponding U.S. GAAP measures, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible; and because not all of the information necessary for a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measure is available to us without unreasonable efforts. For the same reasons, we are unable to address the probable significance of the unavailable information. We provide non-GAAP financial measures that we believe will be achieved, however we cannot accurately predict all of the components of the adjusted calculations and the U.S. GAAP measures may be materially different than the non-GAAP measures.
We disclose the following non-GAAP financial measures and key performance metrics in this press release because we believe these non-GAAP financial measures and key performance metrics provide meaningful supplemental information.
Cautionary Notes Regarding Forward Looking Statements
This document includes statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created by those laws. All statements, other than statements of historical facts, that address activities, events or developments that we expect or anticipate may occur in the future, including such things as our outlook (including bookings, revenue and adjusted EBITDA), our product development and planning, our pipeline, future capital expenditures, share repurchases, financial results, the impact of regulatory changes, existing and evolving business strategies and acquisitions and dispositions, demand for our services, competitive strengths, the benefits of new initiatives, growth of our business and operations, and our ability to successfully implement our plans, strategies, objectives, expectations and intentions are forward-looking statements. Also, when we use words such as “may,” “will,” “would,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “forecast,” “seek,” “outlook,” “target,” “goal,” “probably,” or similar expressions, we are making forward-looking statements. Such statements are based upon the current beliefs and expectations of Skillsoft’s management and are subject to significant risks and uncertainties. All forward-looking disclosure is speculative by its nature, and we caution you against unduly relying on these forward-looking statements.
Factors that could cause or contribute to such differences include those described under “Part I - Item 1A. Risk Factors” in our Form 10‑K for the fiscal year ended January 31, 2023. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements included in our other periodic filings with the Securities and Exchange Commission. The forward-looking statements contained in this document represent our estimates only as of the date of this filing and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so, whether to reflect actual results, changes in assumptions, changes in other factors affecting such forward-looking statements, or otherwise.
Although we believe that the assumptions underlying our forward-looking statements are reasonable, any of these assumptions, and therefore also the forward-looking statements based on these assumptions, could themselves prove to be inaccurate. Given the significant uncertainties inherent in the forward-looking statements included in this document, our inclusion of this information is not a representation or guarantee by us that our objectives and plans will be achieved. Annualized, Pro Forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results. Additionally, statements as to market share, industry data and our market position are based on the most currently available data available to us and our estimates regarding market position or other industry data included in this document or otherwise discussed by us involve risks and uncertainties and are subject to change based on various factors, including as set forth above.
SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT NUMBER OF SHARES)
April 30, 2023
January 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
178,049
$
170,359
Restricted cash
9,051
7,197
Accounts receivable, net of allowance for credit losses of approximately $291 and $221 as of April 30, 2023 and January 31, 2023, respectively
109,981
183,592
Prepaid expenses and other current assets
48,037
44,596
Total current assets
345,118
405,744
Property and equipment, net
6,920
10,150
Goodwill
458,227
457,744
Intangible assets, net
703,369
738,066
Right of use assets
10,153
14,633
Other assets
16,574
16,350
Total assets
$
1,540,361
$
1,642,687
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt
$
8,015
$
6,404
Borrowings under accounts receivable facility
45,237
39,693
Accounts payable
14,194
18,338
Accrued compensation
21,397
34,325
Accrued expenses and other current liabilities
35,793
41,474
Lease liabilities
4,177
4,198
Deferred revenue
245,539
280,676
Total current liabilities
374,352
425,108
Long-term debt
580,715
581,817
Warrant liabilities
1,902
4,754
Deferred tax liabilities
69,224
73,976
Long term lease liabilities
11,812
11,947
Deferred revenue - non-current
1,689
1,778
Other long-term liabilities
11,467
11,551
Total long-term liabilities
676,809
685,823
Commitments and contingencies
Shareholders’ equity:
Shareholders’ common stock - Class A common shares, $0.0001 par value: 375,000,000 shares authorized and 159,578,765 shares issued and outstanding at April 30, 2023, and 163,655,881 shares issued and outstanding at January 31, 2023
14
14
Additional paid-in capital
1,530,413
1,521,574
Accumulated deficit
(1,016,417
)
(972,193
)
Treasury stock
(10,891
)
(2,845
)
Accumulated other comprehensive income (loss)
(13,919
)
(14,794
)
Total shareholders’ equity
489,200
531,756
Total liabilities and shareholders’ equity
$
1,540,361
$
1,642,687
SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months
Three Months
Ended
Ended
April 30, 2023
April 30, 2022
Revenues:
Total revenues
$
135,554
$
134,838
Operating expenses:
Costs of revenues
37,824
38,009
Content and software development
17,035
16,331
Selling and marketing
45,927
39,561
General and administrative
25,296
29,346
Amortization of intangible assets
38,245
39,558
Acquisition-related costs
1,391
13,312
Restructuring
5,218
3,956
Total operating expenses
170,936
180,073
Operating income (loss)
(35,382
)
(45,235
)
Other income (expense), net
(375
)
1,052
Fair value adjustment of warrants
2,852
10,106
Fair value adjustment of hedge instruments
270
—
Interest income
645
160
Interest expense
(15,936
)
(11,514
)
Income (loss) before benefit from income taxes
(47,926
)
(45,431
)
Benefit from for income taxes
(4,384
)
(22,337
)
Income (loss) from continuing operations
(43,542
)
(23,094
)
Gain (loss) on sale of business
(682
)
—
Income (loss) from discontinued operations, net of tax
—
1,451
Net income (loss)
$
(44,224
)
$
(21,643
)
Net Income (loss) per share:
Ordinary – Basic and diluted - continuing operations
$
(0.27
)
$
(0.16
)
Ordinary – Basic and diluted - discontinued operations
-
0.01
Ordinary – Basic and diluted
$
(0.27
)
$
(0.15
)
Weighted average common shares outstanding:
Ordinary – Basic and diluted
163,154
142,209
SKILLSOFT CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Three Months
Three Months
Ended
Ended
April 30, 2023
April 30, 2022
Cash flows from operating activities:
Net income (loss)
$
(44,224
)
$
(21,643
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Share-based compensation
9,128
6,898
Depreciation and amortization
1,144
2,533
Amortization of intangible assets
38,245
43,854
Provision for (recovery of) doubtful accounts
70
(320
)
Provision for (benefit from) income taxes – non-cash
(4,934
)
(26,434
)
Non-cash interest expense
664
415
Non-cash lease and property and equipment impairment charges
4,819
—
Gain (loss) on sale of business
682
—
Fair value adjustment to warrants
(2,852
)
(10,106
)
Unrealized loss on derivative instrument
(270
)
—
Changes in assets and liabilities, net of effects from acquisitions:
Right-of-use asset
43
2,836
Accounts receivable
73,624
84,107
Prepaid expenses and other current assets
297
(367
)
Accounts payable
(4,340
)
2,042
Accrued expenses, including long-term
(16,367
)
(22,768
)
Lease liability
(156
)
(3,053
)
Deferred revenue
(34,109
)
(50,112
)
Net cash provided by (used in) operating activities
21,464
7,882
Cash flows from investing activities:
Purchase of property and equipment
(1,636
)
(1,613
)
Internally developed software - capitalized costs
(2,683
)
(2,286
)
Sale of SumTotal, net of cash transferred
(5,137
)
—
Acquisition of Codecademy, net of cash received
—
(198,633
)
Net cash used in investing activities
(9,456
)
(202,532
)
Cash flows from financing activities:
Shares repurchased for tax withholding upon vesting of restricted stock-based awarded
(296
)
(309
)
Payments to acquire treasury stock
(7,155
)
—
Proceeds from issuance of term loans, net of fees
—
157,088
Proceeds from accounts receivable facility, net of borrowings
5,544
(46,639
)
Principal payments on Term loans
—
(1,601
)
Net cash provided by (used in) financing activities
(1,907
)
108,539
Effect of exchange rate changes on cash and cash equivalents
(557
)
(2,157
)
Net increase (decrease) in cash, cash equivalents and restricted cash
9,544
(88,268
)
Cash, cash equivalents and restricted cash, beginning of period
177,556
168,923
Cash, cash equivalents and restricted cash, end of period
$
187,100
$
80,655
Supplemental disclosure of cash flow information:
Cash and cash equivalents
$
178,049
$
69,517
Restricted cash
9,051
4,848
Cash attributable to discontinued operations
—
6,290
Cash, cash equivalents and restricted cash, end of period
$
187,100
$
80,655
SKILLSOFT CORP. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (in thousands, unaudited)
Three Months Ended
Three Months Ended
April 30, 2023
April 30, 2022
Revenues:
Revenues, as reported
$
135,554
$
134,838
Net income (loss), as reported
$
(44,224
)
$
(21,643
)
Income from discontinued operations, net of tax
-
(1,475
)
Loss on sale of business
682
-
Acquisition and integration related costs
1,391
13,312
Restructuring
5,218
3,956
Foreign currency impact
469
(952
)
Warrant fair value adjustment
(2,852
)
(10,106
)
Fair value adjustment of hedge instruments
(270
)
-
Stock-based compensation expense
9,124
8,493
Transformation costs
1,127
851
System migration costs
667
1,612
Tax impact of non-GAAP adjustments
(1,385
)
(1,392
)
Adjusted net income (loss) from continuing operations
(30,053
)
(7,343
)
Interest expense, net
15,291
11,377
Expense from income taxes, excluding tax impacts above
(2,999
)
(20,945
)
Depreciation
1,144
1,418
Amortization of intangible assets
38,245
39,558
Adjusted EBITDA from continuing operations
$
21,628
$
24,065
GAAP Operating Margin %
-26.1
%
-33.5
%
Amortization of intangible assets
28.4
%
29.2
%
Acquisition-related costs
1.0
%
9.9
%
Restructuring
3.8
%
2.9
%
Stock-based compensation expense
6.7
%
6.3
%
Transformation costs
0.8
%
0.6
%
System migration costs
0.5
%
1.2
%
Depreciation
0.8
%
1.1
%
Other
0.1
%
0.1
%
Adjusted EBITDA Margin %
16.0
%
17.8
%
SKILLSOFT CORP. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES - continued (in thousands, unaudited)
Three Months Ended April 30,
2023
2022
Operating expenses:
GAAP costs of revenues
$
37,824
$
38,009
Depreciation
(151
)
(474
)
Stock-based compensation
(97
)
(13
)
Codecademy Pro Forma (1)
-
943
Non-GAAP costs of revenues
37,576
38,465
GAAP content and software development
17,035
16,331
Depreciation
(50
)
(120
)
Stock-based compensation
(2,012
)
(1,575
)
System migration
(667
)
(1,612
)
Codecademy Pro Forma (1)
-
5,441
Non-GAAP content and software development
14,306
18,465
GAAP selling and marketing
45,927
39,561
Depreciation
(267
)
(272
)
Stock-based compensation
(1,681
)
(1,477
)
Transformation
(136
)
-
Codecademy Pro Forma (1)
-
3,665
Non-GAAP selling and marketing
43,843
41,477
GAAP general and administrative
25,296
29,346
Depreciation
(677
)
(552
)
Stock-based compensation
(5,333
)
(5,427
)
Transformation
(1,085
)
(951
)
Codecademy Pro Forma (1)
-
2,395
Non-GAAP general and administrative
18,201
24,811
Total GAAP operating expenses
126,082
123,247
Depreciation
(1,145
)
(1,418
)
Stock-based compensation
(9,123
)
(8,492
)
System migration
(667
)
(1,612
)
Transformation
(1,221
)
(951
)
Codecademy Pro Forma (1)
-
12,444
Total Non-GAAP operating expenses
$
113,926
$
123,218
____________
(1)
For the three months ended April 30, 2022, the unaudited Pro Forma financial information is presented in accordance with Regulation S-X, Article 11 to enhance comparability for all periods by including operating results for Codecademy as if the merger had closed on February 1, 2022.
SKILLSOFT CORP. PRO FORMA REVENUE (IN THOUSANDS)
Three Months Ended April 30,
2023
2022
Revenue, as reported:
$
135,554
$
134,838
Pro Forma adjustments:
Revenue from acquisitions (1)
-
8,058
Pro Forma Revenue (2)
$
135,554
$
142,896
____________
(1)
Revenue from acquisitions for the three months ended April 30, 2022 only includes Codecademy's revenue for the period from February 1, 2022 to April 4, 2022 as its post-acquisition revenue is included in the GAAP revenue.
(2)
Pro Forma Revenue is presented in Note 3 "Business Combinations" of the Notes to Unaudited Condensed Consolidated Financial Statements included in our Form 10-Q to be filed with the SEC for the quarterly period ended April 30, 2023 in accordance with Regulation S-X, Article 11.
SKILLSOFT CORP. PRO FORMA ADJUSTED NET INCOME (LOSS) (IN THOUSANDS)
Three Months Ended April 30,
2023
2022
Adjusted net income (loss) from continuing operations (1)
$
(30,053
)
$
(7,343
)
Pro Forma adjustments:
Adjusted net income (loss) from acquisitions (2)
-
(4,156
)
Pro Forma Adjusted Net Income (Loss)
$
(30,053
)
$
(11,499
)
____________(1)
See RECONCILIATION OF NON-GAAP FINANCIAL MEASURES within this press release for more details.
(2)
Adjusted net income (loss) from acquisitions for the three months ended April 30, 2022 only includes Codecademy's adjusted net income (loss) for the period from February 1, 2022 to April 4, 2022 as its post-acquisition adjusted net income (loss) is included in the adjusted net income (loss) from continuing operations.
SKILLSOFT CORP. PRO FORMA ADJUSTED EBITDA AND FREE CASH FLOW (IN THOUSANDS)
Three Months Ended April 30,
2023
2022
Pro Forma Adjusted EBITDA
Adjusted EBITDA from continuing operations (1)
$
21,628
$
24,065
Pro Forma adjustments:
Adjusted EBITDA from acquisitions (2)
-
(4,385
)
Pro Forma adjusted EBITDA
$
21,628
$
19,680
Free Cash Flow Reconciliation
Net cash provided by (used in) operating activities
$
21,464
$
7,882
Purchase of property and equipment
(1,636
)
(1,613
)
Internally developed software - capitalized costs
(2,683
)
(2,286
)
Total free cash flow
$
17,145
$
3,983
______________
(1)
See RECONCILIATION OF NON-GAAP FINANCIAL MEASURES within this press release for more details.
(2)
Adjusted EBITDA from acquisitions for the three months ended April 30, 2022 includes Codecademy's adjusted EBITDA for the period from February 1, 2022 to April 4, 2022 as its post-acquisition adjusted EBITDA is included in the adjusted EBITDA from continuing operations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230606005486/en/
Investors and Media Chad W. Lyne SVP, Strategic Finance & Investor Relations Officer chad.lyne@skillsoft.com
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