- Delivers Full-Year Adjusted EBITDA Above the Top End of Outlook
Range
- Accelerates Revenue Growth in Subscription-Based Content &
Platform Segment to 4% for the Fourth Quarter
- Increases LTM Dollar Retention Rates to 101% for the Fourth
Quarter
Skillsoft Corp. (NYSE: SKIL) (“Skillsoft” or the “Company”), a
leading platform for transformative learning experiences, today
announced its financial results for the fourth quarter and full
fiscal year ended January 31, 2024 and provided its financial
outlook for full year fiscal 2025.
“Skillsoft delivered full-year Adjusted EBITDA above the top end
of our outlook range, further enhancing our industry-leading profit
profile as we drove accelerated revenue growth in our
subscription-based Content & Platform segment,” said Richard G.
Walker, Skillsoft’s Chief Financial Officer. “We seized the
generative AI opportunity and successfully positioned Skillsoft as
the partner of choice for enterprise customers seeking to prepare
their workforces to utilize this important technology. More
broadly, we supported the workforce transformation priorities of
thousands of organizations and enabled a community of more than 90
million learners to build future-ready skills. Our ability to
holistically address the reskilling and upskilling priorities of
the world’s largest and most complex organizations gives us
confidence in our strategy and our ability to deliver long-term
profitable growth.”
Recent Business Highlights (1)(2)
- Increased fourth quarter LTM Content & Platform Dollar
Retention Rates to approximately 101%, up from approximately 100%
in the prior year period.
- Launched an expanded collection of more than 60 new learning
scenarios and recognized with a 2024 AI Excellence Award by
Business Intelligence Group for Skillsoft’s AI-powered coaching
solution CAISY™.
- Released new GenAI capabilities and enhancements to the
Codecademy platform, including direct access to ChatGPT for prompt
engineering from within the Codecademy platform, an AI-powered
intelligent hint system, a mock interview simulator powered by
GPT-4, and a real-time virtual coding assistant.
- Named as a key learning partner for the launch of Accenture
LearnVantage, a new service designed to help organizations reskill
and upskill their people in technology, data, and AI.
Fiscal 2024 Fourth Quarter Select Metrics and Financials from
Continuing Operations (1)(2)
- Content & Platform segment GAAP Revenue of $102 million
grew 4%. Total GAAP Revenue of $138 million declined 2%, with
growth in the Content & Platform segment offset by a 16%
decline in Instructor-Led Training segment GAAP Revenue to $36
million.
- GAAP net loss of $245 million included a $202 million non-cash
charge for goodwill and intangible impairment, and compared to a
GAAP net loss of $53 million in the prior year. GAAP net loss per
share of $30.38 compared to a GAAP net loss per share of $6.51 in
the prior year. Pro forma Adjusted Net Loss of $25 million was
favorable to a pro forma Adjusted Net Loss of $34 million in the
prior year. Pro forma Adjusted Net Loss per share of $3.09 was
favorable to a pro forma Adjusted Net Loss per share of $4.17 in
the prior year.
- Adjusted EBITDA from continuing operations of $28 million,
reflecting a margin of 21% of GAAP Revenue, up from $22 million and
a margin of 16% of GAAP Revenue in the prior year.
- Free Cash Flow of positive $5 million, favorably compared to
positive $1 million in the prior year.
- Ended the quarter with $136 million of cash and cash
equivalents.
Fiscal 2024 Full Year Select Metrics and Financials from
Continuing Operations (1)(2)
- Content & Platform segment bookings of $418 million grew
2%. Total bookings of $596 million declined 2%, with growth in the
Content & Platform segment offset by a 10% decline in
Instructor-Led Training segment bookings to $178 million.
- Content & Platform segment GAAP Revenue of $405 million
grew 5%. Total GAAP Revenue of $553 million was approximately flat
to prior year, with growth in the Content & Platform segment
offset by a 13% decline in Instructor-Led Training segment GAAP
Revenue to $148 million. Content & Platform segment pro forma
Revenue of $405 million grew 3%. Total pro forma Revenue of $553
million declined 2%, with growth in the Content & Platform
segment offset by a 13% decline in Instructor-Led Training segment
pro forma Revenue to $148 million.
- GAAP net loss of $349 million favorably compared to a GAAP net
loss of $725 million in the prior year. GAAP net loss per share of
$43.38 favorably compared to a GAAP net loss per share of $91.26 in
the prior year. Pro forma Adjusted Net Loss of $107 million
favorably compared to a pro forma Adjusted Net Loss of $118 million
in the prior year. Pro forma Adjusted Net Loss per share of $13.31
favorably compared to a pro forma Adjusted Net Loss per share of
$14.91 in the prior year.
- Pro forma Adjusted EBITDA from continuing operations of $105
million, reflecting a margin of 19% of pro forma Revenue, was up
from $102 million and a margin of 18% of pro forma Revenue in the
prior year.
- Free Cash Flow of negative $15 million, favorably compared to
negative $36 million in the prior year.
Full-Year Fiscal 2025 Financial Outlook (2)
The following table reflects Skillsoft’s financial outlook for
the fiscal year ending January 31, 2025, based on current market
conditions, expectations, and assumptions:
GAAP Revenue
$530 million – $550 million
Adjusted EBITDA
$105 million – $110 million
(1)
Growth calculated relative to the
comparable prior year period unless otherwise noted.
(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) (in
thousands, except per share amounts)
Three Months Ended
Year Ended
January 31,
Change
January 31,
Change
2024
2023
Dollar
Percent
2024
2023
Dollar
Percent
Bookings (4)
Continuing operations:
Content & Platform
$
184,129
$
186,269
$
(2,140
)
(1)%
$
417,540
$
408,578
$
8,962
2%
Instructor-Led Training
42,125
48,625
(6,500
)
(13)%
$
178,110
198,569
(20,459
)
(10)%
Total bookings
$
226,254
$
234,894
$
(8,640
)
(4)%
$
595,651
$
607,147
$
(11,496
)
(2)%
GAAP revenue
Continuing operations:
Content & Platform
$
101,957
$
97,871
$
4,086
4%
$
404,850
$
384,378
$
20,472
5%
Instructor-Led Training
35,583
42,450
(6,867
)
(16)%
148,387
170,746
(22,359
)
(13)%
Total
$
137,540
$
140,321
$
(2,781
)
(2)%
$
553,237
$
555,124
$
(1,887
)
(0)%
Pro forma revenue (4)
Continuing operations:
Content & Platform
$
101,957
$
97,871
$
4,086
4%
$
404,850
$
392,436
$
12,414
3%
Instructor-Led Training
35,583
42,450
(6,867
)
(16)%
148,387
170,746
(22,359
)
(13)%
Total pro forma revenue
$
137,540
$
140,321
$
(2,781
)
(2)%
$
553,237
$
563,182
$
(9,945
)
(2)%
GAAP net income (loss)
$
(245,326
)
$
(53,479
)
$
(191,847
)
359%
$
(349,285
)
$
(724,964
)
$
375,679
(52)%
Pro forma non-GAAP operating expenses
(4)
Pro forma non-GAAP costs of revenues
$
38,020
$
42,104
$
(4,084
)
(10)%
$
151,842
$
151,638
$
204
0%
Pro forma non-GAAP content and software
development expenses
15,378
12,659
2,719
21%
59,303
61,524
(2,221
)
(4)%
Pro forma non-GAAP selling and marketing
expenses
39,220
44,485
(5,265
)
(12)%
166,016
168,415
(2,399
)
(1)%
Pro forma non-GAAP general and
administrative expenses
16,664
19,024
(2,360
)
(12)%
71,001
79,440
(8,439
)
(11)%
Total pro forma non-GAAP operating
expenses
$
109,282
$
118,272
$
(8,990
)
(8)%
$
448,162
$
461,017
$
(12,855
)
(3)%
Pro forma adjusted net income (loss)
& adjusted EBITDA (4)
Continuing operations:
Pro forma adjusted net income (loss)
$
(24,966
)
$
(34,244
)
$
9,278
NA
$
(107,157
)
$
(118,427
)
$
11,270
NA
Pro forma adjusted net income (loss) per
share
$
(3.09
)
$
(4.17
)
$
1.08
NA
$
(13.31
)
$
(14.91
)
$
1.60
NA
Pro forma adjusted EBITDA
$
28,258
$
22,049
$
6,209
28%
$
105,075
$
102,165
$
2,910
3%
Pro forma adjusted EBITDA % of pro
forma revenue
21
%
16
%
19
%
18
%
_______________
(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 twelve months ended
January 31, 2023, 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 high-quality content, an AI-enabled platform that is
personalized and connected to customer needs, and a broad ecosystem
of partners, Skillsoft drives continuous growth and performance for
employees and their organizations by overcoming critical skills
gaps, unlocking human potential, and transforming the workforce.
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.
- Bookings - Bookings in any particular period represents
the dollar value of orders received during that period and reflects
(i) subscription renewals, upgrades, churn, and downgrades to
existing customers, (ii) non- subscription services, and (iii)
sales to new customers. Bookings generally represents a customer’s
annual obligation (versus the life of the contract), and, for the
subscription business, revenue is recognized for such bookings over
the following 12 months. We use bookings to measure and monitor
current period business activity with respect to our ability to
sell subscriptions, and accompanying services to our platform.
Bookings are adjusted and presented on a pro forma basis as if
Codecademy had merged on February 1, 2022, to enhance
comparability.
- Pro forma revenue – Pro forma revenue is defined as GAAP
revenue adjusted in accordance with Regulation S-X, Article 11 as
if Codecademy had merged on February 1, 2022, to enhance
comparability. Pro forma revenue is reconciled to the reported GAAP
revenue for all periods presented.
- Dollar retention rate (“DRR”) - For
existing customers at the beginning of a given period, DRR
represents subscription renewals, upgrades, churn, and downgrades
in such period divided by the beginning total renewable base for
such customers for such period. Renewals reflect customers who
renew their subscription, inclusive of auto-renewals for multi-year
contracts, while churn reflects customers who choose to not renew
their subscription. Upgrades include orders from customers that
purchase additional licenses or content (e.g., a new Leadership and
Business module), while downgrades reflect customers electing to
decrease the number of licenses or reduce the size of their content
package. Upgrades and downgrades also reflect changes in pricing.
We use our DRR to measure the long-term value of customer contracts
as well as our ability to retain and expand the revenue generated
from our existing customers.
- Adjusted net income (loss) - Adjusted net income/(loss)
is defined as GAAP net income (loss) excluding non-cash items,
discrete and event-specific costs that do not represent normal,
recurring, cash operating expenses necessary for our business
operations, and certain accounting income and/or expenses that
management believes are necessary to enhance the comparability and
are useful in assessing our operating performance, include the
following (including the related tax effects):
- Stock-based compensation expense – Non-cash expense associated
with stock-based compensation.
- Restructuring charges – Severance costs and the abandonment of
right-of-use assets resulting from the acquisition integration
process and cost saving initiatives.
- Fair value adjustments – Mark-to-market adjustments of warrants
and hedge instruments.
- Foreign currency impact – Unrealized and realized foreign
exchange gains or losses due to fluctuations in currency exchange
rates.
- Acquisition and integration related costs – Costs incurred to
effectuate an acquisition, including contingent compensation
expenses, and integration related costs.
- Transformation costs – Costs incurred to transform our
operations through significant strategic non-ordinary course
transactions.
- System migration costs – Costs of temporary resources needed
for the migration of content and customers from our legacy system
to a global platform.
- Income from discontinued operations – Income from discontinued
operations that do not reflect our current operating
performance.
- (Gain) loss sale of business – Gain or loss on non-routine sale
on business.
- Impairment charges - Non-cash goodwill, intangible or other
asset impairment charges.
- Adjusted EBITDA - Adjusted EBITDA is defined as adjusted
net loss excluding interest expense or income, benefit from or
provision for income taxes, depreciation and amortization
expense.
- Non-GAAP operating expenses - GAAP operating expenses,
less depreciation, stock-based compensation, system migration
costs, transformation costs, other non-cash charges and pro forma
adjustments, as applicable.
- Pro forma adjusted net income (loss) – Pro forma
adjusted net income (loss) is defined as adjusted net income (loss)
adjusted in accordance with Regulation S-X, Article 11 as if
Codecademy had merged on February 1, 2022, to enhance
comparability.
- Pro forma adjusted net income (loss) per share – Pro
forma adjusted net income (loss) per share is defined as adjusted
net income (loss) defined above divided by weighted average common
shares outstanding.
- Pro forma adjusted EBITDA – Pro forma adjusted EBITDA is
defined as adjusted EBITDA adjusted in accordance with Regulation
S-X, Article 11 as if Codecademy had merged on February 1, 2022, to
enhance comparability.
- Pro forma adjusted EBITDA % of pro forma revenue – Pro
forma adjusted EBITDA % of pro forma revenue is defined as pro
forma adjusted EBITDA defined above as a percentage of pro forma
revenue defined above.
Reclassifications
Certain amounts reported in prior years have been reclassified
to conform to the presentation in the current year. These
reclassifications had no effect on total assets, total liabilities,
total stockholders' equity, or net income (loss) for the prior
year.
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, adjusted EBITDA, and free cash flow),
our product development and planning, our sales 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, 2024. 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 purposes
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 current 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)
January 31, 2024
January 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
136,308
$
170,359
Restricted cash
10,215
7,197
Accounts receivable, net of allowance for
credit losses of approximately $562 and $221 as of January 31, 2024
and January 31, 2023, respectively
185,638
183,592
Prepaid expenses and other current
assets
53,170
44,596
Total current assets
385,331
405,744
Property and equipment, net
6,639
10,150
Goodwill
317,071
457,744
Intangible assets, net
539,293
738,066
Right of use assets
8,044
14,633
Other assets
17,256
16,350
Total assets
$
1,273,634
$
1,642,687
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Current maturities of long-term debt
$
6,404
$
6,404
Borrowings under accounts receivable
facility
44,980
39,693
Accounts payable
14,512
18,338
Accrued compensation
31,774
34,325
Accrued expenses and other current
liabilities
29,939
41,474
Lease liabilities
3,049
4,198
Deferred revenue
282,570
280,676
Total current liabilities
413,228
425,108
Long-term debt
577,487
581,817
Warrant liabilities
—
4,754
Deferred tax liabilities
52,148
73,976
Long-term lease liabilities
9,251
11,947
Deferred revenue - non-current
2,402
1,778
Other long-term liabilities
13,531
11,551
Total long-term liabilities
654,819
685,823
Commitments and contingencies
Shareholders’ equity:
Shareholders’ common stock - Class A
common shares, $0.0001 par value: 18,750,000 shares authorized and
8,380,436 shares issued and 8,080,659 shares outstanding at January
31, 2024, and 8,264,308 shares issued and 8,182,794 shares
outstanding at January 31, 2023
1
1
Additional paid-in capital
1,551,005
1,521,587
Accumulated equity (deficit)
(1,321,478
)
(972,193
)
Treasury stock, at cost- 299,777 and
81,514 shares as of January 31, 2024 and January 31, 2023,
respectively
(10,891
)
(2,845
)
Accumulated other comprehensive income
(loss)
(13,050
)
(14,794
)
Total shareholders’ equity
205,587
531,756
Total liabilities and shareholders’
equity
$
1,273,634
$
1,642,687
SKILLSOFT CORP.
UNAUDITED CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands, except per
share amounts)
Three Months Ended
January 31,
Year Ended January 31,
2024
2023
2024
2023
Revenues:
Total revenues
$
137,540
$
140,321
$
553,237
$
555,124
Operating expenses:
Costs of revenues
38,459
42,353
153,157
152,015
Content and software development
17,007
16,520
68,031
69,796
Selling and marketing
40,661
47,192
170,982
173,281
General and administrative
23,207
25,578
95,896
109,572
Amortization of intangible assets
36,425
42,064
152,511
170,260
Impairment of goodwill and intangible
assets
202,233
—
202,233
641,362
Acquisition and integration related
costs
2,225
4,010
5,063
30,663
Restructuring
5,386
2,005
13,978
12,294
Total operating expenses
365,603
179,722
861,851
1,359,243
Operating income (loss)
(228,063
)
(39,401
)
(308,614
)
(804,119
)
Other income (expense), net
(696
)
1,705
(1,986
)
4,438
Fair value adjustment of warrants
4
(2,922
)
4,754
23,158
Fair value adjustment of interest rate
swaps
(8,430
)
(6,803
)
2,756
(1,554
)
Interest income
981
292
3,557
531
Interest expense
(16,652
)
(15,952
)
(65,335
)
(53,493
)
Income (loss) before provision for
(benefit from) income taxes
(252,856
)
(63,081
)
(364,868
)
(831,039
)
Provision for (benefit from) income
taxes
(7,530
)
(6,739
)
(16,265
)
(40,973
)
Income (loss) from continuing
operations
(245,326
)
(56,342
)
(348,603
)
(790,066
)
Gain (loss) on sale of business
—
2,863
(682
)
56,619
Income (loss) from discontinued
operations, net of tax
—
—
—
8,483
Net income (loss)
$
(245,326
)
$
(53,479
)
$
(349,285
)
$
(724,964
)
Net income (loss) per share:
Ordinary – Basic and diluted - Continuing
operations
$
(30.38
)
$
(6.86
)
$
(43.29
)
$
(99.45
)
Ordinary – Basic and diluted -
Discontinued operations
—
0.35
(0.09
)
8.19
Ordinary – Basic and diluted - Net income
(loss)
$
(30.38
)
$
(6.51
)
$
(43.38
)
$
(91.26
)
Weighted average common shares
outstanding:
Ordinary – Basic and diluted
8,075
8,216
8,052
7,944
SKILLSOFT CORP.
UNAUDITED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended
Year Ended
January 31, 2024
January 31, 2023
Cash flows from operating activities:
Net income (loss)
$
(349,285
)
$
(724,964
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Impairment of goodwill and intangible
assets
202,233
641,362
Amortization of intangible assets
152,511
176,690
Share-based compensation
31,067
36,622
Depreciation
3,330
6,508
Non-cash interest expense
2,074
2,098
Non-cash property, equipment, software and
lease impairment charges
5,230
—
Provision for credit loss expense
(recovery)
341
375
(Gain) loss on sale of business
682
(56,619
)
Provision for (benefit from) income taxes
– non-cash
(22,066
)
(43,082
)
Fair value adjustment of warrants
(4,754
)
(23,158
)
Fair value adjustment of interest rate
swaps
(2,756
)
1,554
Change in assets and liabilities, net of
effects from acquisitions:
Accounts receivable
(2,091
)
(1,560
)
Prepaid expenses and other assets,
including long-term
(4,601
)
(13,588
)
Right-of-use assets
2,940
3,715
Accounts payable
(3,848
)
(5,982
)
Accrued expenses and other liabilities,
including long-term
(6,425
)
(20,797
)
Lease liabilities
(3,966
)
(2,335
)
Deferred revenues
2,202
2,228
Net cash provided by (used in) operating
activities
2,818
(20,933
)
Cash flows from investing activities:
Purchase of property and equipment
(4,181
)
(4,913
)
Internally developed software -
capitalized costs
(13,722
)
(10,352
)
Sale of SumTotal, net of cash
transferred
(5,137
)
171,995
Acquisition of Codecademy, net of cash
received
—
(198,914
)
Net cash used in investing activities
(23,040
)
(42,184
)
Cash flows from financing activities:
Shares repurchased for tax withholding
upon vesting of restricted stock-based awards
(1,649
)
(4,279
)
Payments to acquire treasury stock
(8,046
)
(2,845
)
Proceeds from issuance of term loans, net
of fees
—
157,088
Proceeds from accounts receivable
facility, net of borrowings
5,287
(34,936
)
Principal payments on Term loans
(6,404
)
(37,795
)
Net cash provided by (used in) financing
activities
(10,812
)
77,233
Effect of exchange rate changes on cash
and cash equivalents
1
(5,483
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
(31,033
)
8,633
Cash, cash equivalents and restricted
cash, beginning of period
177,556
168,923
Cash, cash equivalents and restricted
cash, end of period
146,523
177,556
Supplemental disclosure of cash flow
information:
Cash and cash equivalents
$
136,308
$
170,359
Restricted cash
10,215
7,197
Cash, cash equivalents and restricted
cash, end of period
$
146,523
$
177,556
SKILLSOFT CORP.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(in thousands,
unaudited)
Three Months Ended
January 31,
Year Ended January 31,
2024
2023
2024
2023
Revenues, as reported
$
137,540
$
140,321
$
553,237
$
555,124
Net income (loss), as reported
$
(245,326
)
$
(53,479
)
$
(349,285
)
$
(724,964
)
Income from discontinued operations, net
of tax
—
—
—
(8,483
)
Gain (loss) on sale of business
—
(2,863
)
682
(56,619
)
Impairment of goodwill and intangible
assets
202,233
—
202,233
641,362
Acquisition and integration related
costs
2,225
4,010
5,063
30,663
Restructuring
5,386
2,005
13,978
12,294
Foreign currency impact
479
(1,458
)
1,992
(3,681
)
Fair value adjustment of warrants
(4
)
2,922
(4,754
)
(23,158
)
Fair value adjustment of interest rate
swaps
8,430
6,803
(2,756
)
1,554
Stock-based compensation expense
8,150
9,716
31,067
36,622
Transformation costs
823
1,091
3,326
8,355
System migration costs
594
1,175
2,174
5,524
Tax impact of non-GAAP adjustments
(7,957
)
(4,124
)
(10,878
)
(34,583
)
Adjusted net income (loss) from
continuing operations
(24,966
)
(34,202
)
(107,157
)
(115,114
)
Interest expense, net
15,671
15,660
61,778
52,962
Expense (benefit from) income taxes,
excluding tax impacts above
427
(2,615
)
(5,387
)
(6,390
)
Depreciation
701
1,142
3,330
4,832
Amortization of intangible assets
36,425
42,064
152,511
170,260
Adjusted EBITDA from continuing
operations
$
28,258
$
22,049
$
105,075
$
106,550
GAAP operating margin %
(165.9
)%
(27.9
)%
(55.9
)%
(144.7
)%
Amortization of intangible assets
26.5
%
30.0
%
27.7
%
30.7
%
Impairment of goodwill and intangible
assets
147.0
%
0.0
%
36.6
%
115.5
%
Acquisition and integration related
costs
1.6
%
2.9
%
0.9
%
5.5
%
Restructuring
3.9
%
1.4
%
2.5
%
2.2
%
Stock-based compensation expense
5.9
%
6.9
%
5.6
%
6.6
%
Transformation costs
0.6
%
0.8
%
0.6
%
1.5
%
System migration costs
0.4
%
0.8
%
0.4
%
1.0
%
Depreciation
0.5
%
0.8
%
0.6
%
0.9
%
Adjusted EBITDA margin %
20.5
%
15.7
%
19.0
%
19.2
%
SKILLSOFT CORP.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES - continued
(in thousands,
unaudited)
Three Months Ended
January 31,
Year Ended January 31,
2024
2023
2024
2023
Operating expenses:
GAAP costs of revenues
$
38,459
$
42,353
$
153,157
$
152,015
Depreciation
(140
)
(150
)
(553
)
(1,110
)
Stock-based compensation
(299
)
(99
)
(762
)
(210
)
Codecademy pro forma (1)
—
—
—
943
Non-GAAP costs of revenues
38,020
42,104
151,842
151,638
GAAP content and software development
17,007
16,520
68,031
69,796
Depreciation
(67
)
(43
)
(236
)
(330
)
Stock-based compensation
(968
)
(2,643
)
(6,318
)
(7,859
)
System migration
(594
)
(1,175
)
(2,174
)
(5,524
)
Codecademy pro forma (1)
—
—
—
5,441
Non-GAAP content and software
development
15,378
12,659
59,303
61,524
GAAP selling and marketing
40,661
47,192
170,982
173,281
Depreciation
(83
)
(304
)
(922
)
(959
)
Stock-based compensation
(1,358
)
(2,403
)
(3,793
)
(7,537
)
Transformation
—
—
(251
)
(35
)
Codecademy pro forma (1)
—
—
—
3,665
Non-GAAP selling and marketing
39,220
44,485
166,016
168,415
GAAP general and administrative
23,207
25,578
95,896
109,572
Depreciation
(411
)
(645
)
(1,619
)
(2,433
)
Stock-based compensation
(5,525
)
(4,571
)
(20,194
)
(21,016
)
Transformation
(607
)
(1,338
)
(3,082
)
(9,078
)
Codecademy pro forma (1)
—
—
—
2,395
Non-GAAP general and administrative
16,664
19,024
71,001
79,440
Total GAAP operating expenses
119,334
131,643
488,066
504,664
Depreciation
(701
)
(1,142
)
(3,330
)
(4,832
)
Stock-based compensation
(8,150
)
(9,716
)
(31,067
)
(36,622
)
System migration
(594
)
(1,175
)
(2,174
)
(5,524
)
Transformation (2)
(607
)
(1,338
)
(3,333
)
(9,113
)
Codecademy pro forma (1)
—
—
—
12,444
Total Non-GAAP operating expenses
$
109,282
$
118,272
$
448,162
$
461,017
_______________
(1)
For the twelve months ended
January 31, 2023, 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.
(2)
This line item does not agree to
the amounts reflected on preceding table due to certain
transformation expenses not being reflected in GAAP operating
expenses.
SKILLSOFT CORP.
PRO FORMA REVENUE
(in thousands)
Three Months Ended
January 31,
Year Ended January 31,
2024
2023
2024
2023
Revenue, as reported
$
137,540
$
140,321
$
553,237
$
555,124
Pro forma adjustments
Revenue from acquisitions (1)
—
—
—
8,058
Pro forma revenue (2)
$
137,540
$
140,321
$
553,237
$
563,182
_______________
(1)
Revenue from acquisitions for the
twelve months ended January 31, 2023 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 Consolidated
Financial Statements included in our Form 10-K to be filed with the
SEC for the year ended January 31, 2024 in accordance with
Regulation S-X, Article 11.
SKILLSOFT CORP.
PRO FORMA ADJUSTED NET INCOME
(LOSS)
(in thousands)
Three Months Ended
January 31,
Year Ended January 31,
2024
2023
2024
2023
Adjusted net income (loss) from
continuing operations (1)
$
(24,966
)
$
(34,203
)
$
(107,157
)
$
(115,114
)
Pro forma adjustments
Interest adjustment for debt prepayment
(2)
—
(38
)
—
887
Tax impact of adjustments above
—
(3
)
—
(44
)
Adjusted net income (loss) from
acquisitions (3)
—
—
—
(4,156
)
Pro forma adjusted net income
(loss)
$
(24,966
)
$
(34,244
)
$
(107,157
)
$
(118,427
)
Pro forma adjusted net income (loss) per
share
$
(3.09
)
$
(4.17
)
$
(13.31
)
$
(14.91
)
_______________
(1)
See RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES within this press release for more details.
(2)
Under the terms of our Amended
Credit Agreement, the net proceeds attributable to the sale of
SumTotal required a mandatory prepayment of $31.4 million. Interest
expense under the Amended Credit Agreement is adjusted for the
prepayment.
(3)
Adjusted net income (loss) from
acquisitions for the twelve months ended January 31, 2023 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
(in thousands)
Three Months Ended
January 31,
Year Ended January 31,
2024
2023
2024
2023
Pro forma adjusted EBITDA
Adjusted EBITDA from continuing operations
(1)
$
28,258
$
22,049
$
105,075
$
106,550
Pro forma adjustments:
Adjusted EBITDA from acquisitions (2)
—
—
—
(4,385
)
Pro forma adjusted EBITDA
$
28,258
$
22,049
$
105,075
$
102,165
Pro forma adjusted EBITDA % of pro forma
revenue
21
%
16
%
19
%
18
%
_______________
(1)
See RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES within this press release for more details.
(2)
Adjusted EBITDA from acquisitions
for the twelve months ended January 31, 2023 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.
SKILLSOFT CORP.
FREE CASH FLOW
RECONCILIATION
(in thousands)
Three Months Ended
January 31, 2024
Year Ended January 31,
2024
2023
2024
2023
Free cash flow reconciliation
Net cash provided by (used in) operating
activities
$
11,499
$
2,628
$
2,818
$
(20,933
)
Purchase of property and equipment
(428
)
(200
)
(4,181
)
(4,913
)
Internally developed software -
capitalized costs
(5,667
)
(1,713
)
(13,722
)
(10,352
)
Total free cash flow
$
5,404
$
715
$
(15,085
)
$
(36,198
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240415184803/en/
Investors and Media Chad W. Lyne SVP, Strategic Finance
& Investor Relations Officer chad.lyne@skillsoft.com
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