Skillsoft Corp. Q1 FY2026 earnings call

• Welcomed John Frederick as new CFO and Raianne Reiss as Chief Marketing Officer.
• TDS has 3 consecutive quarters of revenue growth, with a value proposition resonating with skills-based organizations.
• GK saw a decline in U.S. public sector discretionary live learning spending but has a pipeline of large global public sector deals.
• Expanded product offerings including Percipio's AI capabilities, CAISY in over 40 languages, Percipio certification dashboard, and Codecademy's evolutions.
• Hosted global customer events validating business strategy.

Talent Development Solutions (TDS) revenue was $99.1 million in the first quarter, up 1% year-over-year. Global Knowledge (GK) revenue was $25.1 million, down approximately $4.7 million or 15.7% year-over-year. Total revenue of $124.2 million in the first quarter was down approximately $3.6 million or 2.8% year-over-year. TDS had 3 consecutive quarters of revenue growth, while GK was impacted by softer public sector demand and a higher reseller business mix.

• Revenue expected in range of $530 million to $545 million for fiscal 2026.
• Adjusted EBITDA expected in range of $112 million to $118 million for fiscal 2026.
• Free cash flow expected in range of $13 million to $18 million for fiscal 2026, with expectation of positive free cash flow despite Q2 seasonality reversal.

• Macro uncertainty impacting discretionary spending and elongated sales cycles.
• Uncertainty around government business, including workforce reductions and executive order impacts, particularly affecting discretionary spend in the federal sector.

Q: What gives confidence in reiterating full year target despite macro uncertainty?

A: TDS has 3 consecutive quarters of growth, GK has a pipeline of large deals, and last quarter showed signs of improvement.

Q: Phase 2 of business process?

A: Focus on product plans, go-to-market, and sales coverage, with investments in go-to-market and products in the first half, benefits in the back half.

Q: Free cash flow analysis?

A: Strong Q1 due to collections timing, but Q2 expected to reverse, with back half relying on investments and bookings.

Q: Government business context?

A: Discretionary spend hit GK, federal sector impacted, but Europe public sector showing uptick; workforce reduction impact TBD.

Q: Focus as new CFO?

A: Integrate finance into all decisions, align with go-to-market and product strategies.